Tim Bradford - AMMCorp.net

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Tips for Avoiding Foreclosure

 Tips for Avoiding Foreclosure

 http://www.hud.gov/foreclosure/index.cfm

Are you having trouble keeping up with your mortgage payments? Have you received a notice from your lender asking you to contact them?

If you are unable to make your mortgage payment:

1. Don't ignore the problem.

The further behind you become, the harder it will be to reinstate your loan and the more likely that you will lose your house.

2. Contact your lender as soon as you realize that you have a problem.

Lenders do not want your house. They have options to help borrowers through difficult financial times.  

3. Open and respond to all mail from your lender.

The first notices you receive will offer good information about foreclosure prevention options that can help you weather financial problems.  Later mail may include important notice of pending legal action.  Your failure to open the mail will not be an excuse in foreclosure court.

4. Know your mortgage rights.

Find your loan documents and read them so you know what your lender may do if you can't make your payments.  Learn about the foreclosure laws and timeframes in your state (as every state is different) by contacting the State Government Housing Office.  

5. Understand foreclosure prevention options.

Valuable information about foreclosure prevention (also called loss mitigation) options can be found on the internet at portal.hud.gov/portal/page?_pageid=33,717348&_dad=portal&_schema=PORTAL .

6. Contact a HUD-approved housing counselor.

The U.S. Department of Housing and Urban Development (HUD) funds free or very low cost housing counseling nationwide.  Housing counselors can help you understand the law and your options, organize your finances and represent you in negotiations with your lender if you need this assistance. Find a HUD-approved housing counselor near you or call (800) 569-4287 or TTY (800) 877-8339.

7. Prioritize your spending.

After healthcare, keeping your house should be your first priority.  Review your finances and see where you can cut spending in order to make your mortgage payment.  Look for optional expenses-cable TV, memberships, entertainment-that you can eliminate. Delay payments on credit cards and other "unsecured" debt until you have paid your mortgage.

8. Use your assets.  

Do you have assets-a second car, jewelry, a whole life insurance policy-that you can sell for cash to help reinstate your loan? Can anyone in your household get an extra job to bring in additional income?  Even if these efforts don't significantly increase your available cash or your income, they demonstrate to your lender that you are willing to make sacrifices to keep your home.  

9. Avoid foreclosure prevention companies.

You don't need to pay fees for foreclosure prevention help-use that money to pay the mortgage instead. Many for-profit companies will contact you promising to negotiate with your lender.  While these may be legitimate businesses, they will charge you a hefty fee (often two or three month's mortgage payment) for information and services your lender or a HUD approved housing counselor will provide free if you contact them.

10. Don't lose your house to foreclosure recovery scams!

If any firm claims they can stop your foreclosure immediately if you sign a document appointing them to act on your behalf, you may well be signing over the title to your property and becoming a renter in your own home!  Never sign a legal document without reading and understanding all the terms and getting professional advice from an attorney, a trusted real estate professional, or a HUD approved housing counselor.

Posted as a Public Service without any credit to me.   This is from the HUD website. 

0 comments • Tim Bradford • August 20 2008 08:21PM

Simplistic explanation of APR for Consumers.

 If you want to understand the APR on a Mortgage Loan consider this simplistic explanation/example. 

First, Forget that we are talking about a Mortgage.  

Imagine that you are going to the Mall and purchasing a Suit or Dress.   The Suit or Dress is on sale for $100.00.   How much will the dress cost you?

The Suit or Dress will cost you more than $100.00 because of the Sales Taxes.   (Here in Northern Ohio our sales tax are 7.50%, so the cost is $107.50)   The extra "Sales Taxes" are Closing Costs when it comes to computing the APR.

Next consider most mortgage written today have some form of Mortgage Insurance.  Using the Suit or Dress example, Once you buy the Suit or Dress, you will have Dry Cleaning Bills.   These cleaning bills are like the Monthly Mortgage Insurance Premiums collected on Mortgage Loans. 

So when you consider the cost of that Suit or Dress, the cost is not $100.00 it is some higher amount.  This higher cost (Expressed as a Percentage Rate) is what The Regulation Z - APR Disclosure is all about.  

I hope this explaination provides insite and helps you understand APR's.   

Words of warning here.  Comparing APR's are a good thing provided all quotes are using the same yardstick for Closing Costs and Reoccurring costs.    This is not the case in the Mortgage Industry, some lenders include certain fees in their up-font costs (Sales Tax) while others do not include those fees.  It is also very common that Internet Lenders (or Website Quotes) will not include the PMI Costs (Monthly Dry Cleaning) in their APR Calculations.   Why do they do this???    It is called SALES!!!!!  They want your business (aka your money).  

SHOP LOCALwhen possible.  Not trying to offend anyone, I have heard many people comment or complain that the local ABC store closed because the International XYZ company came to town and put them out of business.  Remember that local ABC stores likely treated their employees better than the International XYZ company.   You also likely received better service with them.  The local ABC store also contributes more to your local economy.  In most cases if a consumer does Shop and Compare they can Save if they choose the Local alternatives.  

If you live in Northern Ohio consider visiting one of my informational websites
and then Call me for you Mortgage Needs.

Visit
All Ohio Mortgage . com

Visit
Cost of Renting . com

Visit
Ohio203k.com

Visit
Ohio Buyers and Sellers .com

I welcome any comments, suggestions or critiques on the explanations presented here. 
Also opinion on the importance of shopping local will be appreciated and encouraged.

0 comments • Tim Bradford • August 12 2008 09:19AM

Search for HUD owned homes in Northern Ohio

HUD Owned homes can be easily searched by City, County or Zip Code from this lender sponsored page.

http://Hud.NorthernOhioRealtor.com  

From this page you can also request a referral to a Realtor in the Northern Ohio Market that is experienced in selling HUD Owned Homes.   The Realtors also have access to homes owned by various banks and the Veterans Administration. 

If the home needs repairs consider the FHA 203k Streamline Mortgage.
Click for Brochure

The seach engine is provided by Tim Bradford, an employee of American Midwest Mortgage.
Any Realtors wishing this search engine on their website should contact Tim Bradford.

Visit
All Ohio Mortgage . com

Visit
Cost of Renting . com

Visit
Ohio203k.com

Visit
Ohio Buyers and Sellers .com

1 comment • Tim Bradford • August 11 2008 09:55PM

203K Strealine Financing

 

Do you have buyers in need of funds for repairs?

 FHA’s Streamline 203(k) Mortgage
Download TriFold Brochure

 3% DOWN FOR ACQUISITION (GIFT FUNDS ALLOWABLE)

Eligible Renovations Include:

Repair/Replacement roofs, gutters, and downspouts

Repair/Replacement/Upgrade of existing HV AC systems

Repair/Replacement/Upgrade of plumbing and electrical systems

Repair/Replacement of existing flooring

Minor remodeling such as kitchens, which does not involve structural repairs

Exterior and interior painting

Weatherization:  including storm windows and doors, insulation, weather stripping, etc.

Appliances – Purchase and installation are included.  Appliances may include free-standing ranges, refrigerators, washers/dryers, dishwashers, and microwaves

Lead-based paint stabilization or abatement of lead-based paint hazards

Repair/Replace/Add exterior decks, patios, porches

Basement finishing and remodeling, which does not involve structural repairs

Basement waterproofing

Window and door replacements and exterior wall re-siding

Septic system and/or well repair or replacement

Improvements for accessibility for persons with disabilities

Also consider Visiting www.Ohio203K.com or www.NorthernOhioRealtor.com to find a local Realtor to assist you in finding a home in Northern Ohio.

 

Visit
All Ohio Mortgage . com

Visit
Cost of Renting . com

Visit
Ohio203k.com

Visit
Ohio Buyers and Sellers .com

 

3 comments • Tim Bradford • August 11 2008 09:32PM

Nontraditional Credit Verification and Evaluation

It has been a little while since I have seen this information distributed on ActiveRain.   As much as I say 2008 & 2009 will be the years of FHA.  This Mortgagee Letter places underwriting guidelines on the lenders approving loans.   A downloadable copy is available here.   The download or print of this page might be useful to buyers and Realtors when providing documents to your lenders.  Also remember these are HUD's Minimum Guidelines, Individual lenders sometime apply additional restrictions.   

April 29, 2008 MORTGAGEE LETTER 2008-11
SUBJECT:     Nontraditional Credit Verification and Evaluation

 The Federal Housing Administration (FHA) has long permitted mortgage lenders to establish a borrower’s credit history through nontraditional means, including the compilation of performance on rental payments; utility bills; telephone and cellular phone services; cable television service; payments to local stores, etc.  This is further described in handbook HUD-4155.1 REV-5, paragraphs 2-3 and 2-4B. 

 This practice is appropriate when the borrower has insufficient trade lines with Equifax, Experian, or TransUnion and a credit bureau score cannot be derived.  Mortgage lenders also may use nontraditional credit verification to augment “thin-file” credit reports where a credit score was generated but based on only a few trade lines. However, nontraditional credit reports may not be used to enhance any poor credit history on a traditional credit report. 

 This mortgagee letter provides guidance to lenders and underwriters for establishing and evaluating nontraditional credit histories and also describes FHA’s acceptance of those enterprises that can develop a verifiable credit history, no less than 12 months in duration, for borrowers with limited traditional credit.  This guidance is effective immediately but must be considered for borrowers without traditional credit beginning with case numbers assigned 30 or more days after the date of this mortgage letter.  

Nontraditional Credit—Basic Guidance
 The following provides guidance in establishing that a borrower has sufficient credit references for evaluating bill paying habits, which include: three (3) credit references, including at least one from Group I, covering the most recent 12 months activity from date of application.  Group I references should be exhausted prior to considering Group II for eligibility purposes, as Group I is considered more indicative of a borrower’s future housing payment performance.  Borrowers with no Group I trade references will be underwritten using the criteria set forth under “insufficient credit” below.

Group I –

rental housing payments (subject to independent verification if the borrower is a renter),
utility company reference (if not included in the rental housing payment), including
             ·        gas,
             ·       electricity,
             ·        water,
             ·       land-line home telephone service,
             ·       cable TV. 
If the borrower is renting from a family member, request independent documents to prove regularity of payments, such as cancelled checks.
 

Group II –
·       insurance coverage, i.e., medical, auto, life, renter’s insurance (not payroll deducted);
·       payment to child care providers – made to a business providing such services;
·       school tuition;
·       retail stores – department, furniture, appliance stores, specialty stores;
·       rent to own – i.e., furniture, appliances;
·       payment of that part of medical bills not covered by insurance;
·       Internet/cell phone services;
·       a documented 12 month history of saving by regular deposits (at least quarterly/non-payroll deducted/no NSF checks reflected), resulting in an increasing balance to the account;
·       automobile leases,
·       or a personal loan from an individual with repayment terms in writing and supported by cancelled checks to document the payments.
   

Evaluating Nontraditional Credit

 The following offers guidance in evaluating borrowers with nontraditional credit histories. A satisfactory credit history, at least 12 months in duration, is to include:  
·        No history of delinquency on rental housing payments
·        No more than one 30-day delinquency on payments due to other creditors
·        No collection accounts/court records reporting (other than medical) filed within the past 12 months
   

 Insufficient Credit

 The following offers guidance in evaluating borrowers with no credit references, or otherwise having only Group II references.  A satisfactory credit history, at least 12 months in duration, is to include: 
·        No more than one 30-day delinquency on payments due to any Group II reference
·        No collection accounts/court records reporting (other than medical) filed within the past 12 months
   

In addition, for such borrowers, to enhance the likelihood of homeownership sustainability, the following underwriting guidance is being provided:

·        Qualifying ratios are to be computed only on those occupying the property and obligated on the loan, and may not exceed 31 percent for the payment-to-income ratio and 43 percent for the total debt-to-income ratio. Compensating factors are not applicable for borrowers with insufficient credit references.
·        Borrowers should have two months of cash reserves following mortgage loan settlement from their own funds (no cash gifts from any source should be counted in the cash reserves for borrowers in this category).
   

Verifying Nontraditional Credit

 We prefer all nontraditional credit references be verified by a credit bureau and reported back to the lender as a nontraditional mortgage credit report (NTMCR) in the same manner as traditional credit references.  A NTMCR is designed to assess the credit history of the borrower without the benefit of institutional trade references and should format as traditional references – including creditor’s name, date of opening, high credit, current status of the account, required payment, unpaid balance, and a payment history in the delinquency categories of 0x30, 0x60 etc. It should not include subjective statements such as “satisfactory, acceptable, etc.” 

 Only if a NTMCR is impractical or such a service is unavailable may a lender choose to obtain independent verification of trade references.  Documents confirming the existence for a nontraditional credit provider may include a public record from the state, county, or city records, or other means providing a similar level of objective confirmation.  To verify the credit information, lenders must use a published address or telephone number for that creditor and not rely solely on information provided by the applicant.  Rental references from management companies with payment history for the most recent 12 months may be used in lieu of 12 months cancelled checks.  Credit references may also be developed via independent verification directly to the creditor.  If a method is used to verify credit information or rental references other than NTMCR, all references obtained from individuals should be backed up with the most recent 12 months cancelled checks.

 In addition, FHA has no objection to the use of various service providers now operating that are able to develop a bill payment history, as well as a score by obtaining rental payment history, utility trade-lines, and other common recurring non-reporting bill payments.  While we do not endorse any particular service provider, FHA approved lenders may use such services to develop a credit history for borrowers with no or little traditional credit.

If you have any questions regarding this Mortgagee Letter, call 1-800-CALLFHA.
0 comments • Tim Bradford • August 11 2008 07:47PM

FHA Loans & FHA Mortgages -- Legislation Update -- August of 2008

Excellent writeup about the Changes that are coming. 

Via Jeff Belonger -- The FHA Expert.com -- FHA Loans -- FHA mortgages -- Mortgages :

FHA loans & FHA mortgagesAs many of you are aware, the mortgage industry has been going through some major changes in the last 6 months. Well, get ready for some more changes. In my honest opinion, many of the changes are for the worst. Sorry, but it's reality and we need to pay attention more than ever.

I am going to list the important changes next. I will list from the most important to least, but based on my opinion.

 

1.  Seller funded downpayment assistance programs - Know as DPA's or Downpayment assistance programs. Seller's can't participate as of October 1st, 2008, unless the borrower is approved prior to this. FHA confirmed the definition of "borrower approved" by stating that cases run through the FHA scorecard, eligibility will be determined by the date of the last scoring time. For manually underwritten loans, the eligibility will be determined by the date of the underwriter's signature on the MCAW or the loan transmittal form. ** Ask your loan officer for definitions in what was just mentioned. ** FYI - Even though the new bill was passed by Congress, Bill HR 3221, there is a new bill that will hit the floor soon to oppose the banning of DPA programs.

 

2.  Cash Investment from borrower - Not only do they kill the DPA program, which helps buyers to purchase a home with little or no money out of pocket, but HUD now raises the cash requirement. The previous requirement was 3% from the buyer and the new investment from the buyer is now raised to 3.5%. FHA should be publishing a mortgagee letter in the next 30 to 60 days and this should go into effect on January 1st, 2009. My opinion?  It's tough to save as it is. On a $200,000 property, the buyer will now need an additional $1,000. You will still be able to get 100% gifted to you by a relative and still be able to get 6% seller contributions.

 

3.  Risk base pricing - FHA is going back to the old method of upfront mortgage insurance premiums. The new changes were mentioned here : http://www.fhaloansfhamortgages.com/fha-mortgage-insurance-new-risk-based-pricing-guidelines-effective-07-14-08  So, FHA will be going back to the old method, which is just one calculation. This will go into affect with new FHA case numbers assigned on or after October 1st, 2008.

 

4.  Mortgage Limit Decrease - As many of us know, when the Stimulus package was approved and signed by the president, FHA loan limitswere increased, but only up until December 31st, 2008. The mortgage limits will be lowered in high cost areas to 11% of the area median sales price up to a maximum of $625,000. HUD is still trying to decide whether it is $417,000 across the board, $417,000 "floor" and higher limits in high cost areas or $625,000 across the board.

 

Overall, as you can see, there are some important changes in the mix. And in my opinion, this will hurt real estate more than help it. But nothing is confirmed until FHA publishes their mortgagee letters to reflect the changes.

For those that of you that want to help save the DPA program, Gerry Suarez wrote this post. http://activerain.com/blogsview/621419/we-have-one-more  Please read this and vote, let your government officials know how you feel. Voice your opinion.

1 comment • Tim Bradford • August 11 2008 05:56PM

Down Payment Assistance will still be available in OHIO after Oct 1, 2008

This is an Important read for any Buyers, Sellers or Real Estate professionals, that have concerns about DPA programs going away effective Oct 1, 2008. as a result of the "Housing and Recovery Act of 2008" 

Buyers in Ohio have the option of using the OHFA Program to receive a 3% grant that can be used towards their down payment.   The seller can still assist them with Closing Costs, so there will not be much change except for those buyers that exceed the income limits of the OHFA program.   

Buyers should also be aware that if they use the OHFA program they will not be eligible for the $7,500 Tax Credit/Loan that was part of the "Housing and Recovery Act of 2008".  

Also, I ask all Buyers, Sellers and Real Estate professional to please take action to authorize 100% financing on FHA Loans.   I believe this is better than continuing to allow the DPA programs to use the loophole that they have been using to justify their existence. 

 Anyone wishing to recieve updates on this issue should drop me an email and I will provide updates. 

Visit All Ohio Mortgage . com

Visit Cost of Renting . com

Visit Ohio203k.com

Visit Ohio Buyers and Sellers .com
Request Prequalification or Realtor Referral

0 comments • Tim Bradford • August 03 2008 03:00PM