Mortgage News – Page 4

Your Math Skills Can Affect Your Chance Of Foreclosure

July 29, 2013 by admin

$Wallingford PA Real Estate - wallingford Pa - A Borrower's Math Skills Can Effect The Chances Of Foreclosure$

A Borrower’s Math Skills Affect Chances Of A Forecosure

Borrowers with poor math skills made up a higher percentage of homeowners in foreclosure during the housing bust than those who were skilled at arithmetic.

According to a study released Monday, math-challenged borrowers were five times more likely to default on their loans.

“Whether you’re good with numbers predicts how likely you are to default,” said Stephan Meier, an associate professor of business at Columbia Business School, who authored the report along with economists from the Federal Reserve of Atlanta and the University of Lausanne.

The study examined several hundred borrowers who held mortgages issued in 2006 and 2007 — right before the mortgage meltdown. Of the study subjects, 25% of the borrowers who scored in the lowest bracket for math skills had defaulted on mortgage payments within five years of getting the loans. Meanwhile, only 5% of those in the top tier for math skills defaulted.

The survey sample included homebuyers from a variety of backgrounds, from blue collar workers to corporate professionals. Their math ability covered the gamut — from those with very limited abilities to a mathematician with a six-figure salary, according to Kristopher Gerardi, an economist with the Federal Reserve of Atlanta.

The researchers controlled for differences in overall intelligence by measuring for verbal and general IQs, as well as math skills, and controlled for socioeconomic factors, such as age, sex, income, ethnicity and local labor market conditions.

From CNN’s Bad At Math? You’re More Likely To Lose Your Home

Wallingford PA Real Estate – Wallingford, PA 19086

Rising Mortgage Rates – Keeping A Historical Perspective

July 24, 2013 by admin

Wallingford PA Real Estate - Wallingford PA - 10 Year History - 30 Year Fixed Mortgage Rates

Interest Rates During The Decade Past – Freddie Mac

As mortgage rates have risen in the past few weeks on the heels of the Fed’s announcement regarding the scaling back of their bond repurchasing efforts, there has been concern about the impact on the gradually recovering housing market.

While it is true that rising rates will probably always have some negative impact on the market, it is important to look at rates in a historical perspective. Rates remain very attractive when compared to the past decade, with Freddie Mac reporting an average rate of 4.37% as of July 18.

Record low rates over the past year did not produce any dramatic recovery, and it has been predicted that even with rates expected to reach the 5% mark later this year, such an increase will not hamper the market’s recovery.

Wallingford PA Real Estate – Wallingford, PA 19086

Low Credit Scores Force Many Out Of The Market

May 14, 2013 by admin

Mortgage originations for borrowers with credit scores below 620 have mostly disappeared in recent years, eliminating borrowers with low credit scores from the housing market.

Mortgages for borrowers with a credit score between 620 and 680 tumbled nearly 90%, compared to a 30% drop for borrowers with a score greater than 780, according to the Federal Reserve.

Meanwhile, the median credit score skyrocketed from 730 in 2007 to a whopping 770 in 2013.

Credit challenged borrowers have have turned to mortgages insured or guaranteed by the Federal Housing Administration (FHA), the Department of Veteran Affairs(VA)and the Rural Housing Service (RHS). As a result, the share of purchase mortgages guaranteed or insured by the FHA, the VA, or the RHS escalated from 5% in 2006 to more than 40% in 2011.

According to the Federal Reserve’s April survey of loan officers and bank lenders, banks are less likely to originate mortgages with FICO scores in the 620 range, even with a 10% or 20% down payment.

Wallingford PA Real Estate – Wallingford, PA 19086

PHFA Offers 2.95% Mortgages To First Time Home Buyers

February 26, 2013 by admin

PHFA Offers Below Rate Mortgages To 1st Time Buyers

The Pennsylvania Housing Finance Agency (PHFA) through it’s Keystone Home Loan Program, is offering below market mortgages to first time home buyers in Pennsylvania.

The current 30 year fixed rate for first time buyers using the Keystone Home Loan Program stands at 2.95%, which is almost 1% lower than the prevailing rate. The cost for a $100,000 mortgage at the PHFA rate would be $418.91 as opposed to $465.96 at a market rate of 3.8% – cheap money even cheaper!

The program does impose income and purchase price limits on potential buyers, but they are not too stringent. For example a 1 or 2 member household can earn up to $97,800, and purchase a home in Delaware County up to $387,000. The Keystone Home Loan Program is summarized on the agency’s web site.

Weichert Financial is a a PHFA participating lender, and Steve Madonna is available at 610- 566-2045 to answer any questions regarding this money saving program for first time home buyers.

Steve and I would also like to offer first time home buyers $500 toward their closing costs for choosing Weichert and Weichert Financial!

Wallingford PA Real Estate – Wallingford, PA 19086

The Attack Of The Zombie Title

February 23, 2013 by admin

Wallingford Real Estate - wallingford PA = Zombie Mortgage

Lenders Double As As A Supernatural Force In Zombie Titles

Imagine you have gone through the nightmare of foreclosure on your home. You have moved out of the home after receiving notice of foreclosure and thinking the bank is now the owner. Sometime later you are again haunted by the spectre of documents asserting that you are still the owner of the home, and that you are responsible for back taxes and fees, even bills for municipal services, and you do not live in the home!

How can this happen?

Add the term zombie title to the growing list of ominous real estate terminology.

Title is the legal document that assigns ownership and responsibility of a piece of real estate to a rightful owner. In the case of a zombie title the lender who foreclosed on a property either through legal delays, or by choice, fails to take title to the property, thus avoiding the costs and responsibilities of ownership of the home. In this title limbo there seem to be no repercussions for the lender that initiated the foreclosure, but plenty of legal and financial challenges for the home owner.

The zombie title will continue to hang over the owner’s head until the lender, at it’s discretion, decides to finalize the process by taking title to the home.

It would seem to make sense to impose guidelines so that homeowners know whether or not their home is going to be sold. If a lender schedules an auction, sheriff’s sale, or another kind of foreclosure sale, that lender should be required to finish the process within a set amount of time. Whatever that timeline is, it should be clear to the homeowner that they will not be subject to financial and legal hassles without end.

Wallingford Real Estate – Wallingford, PA 19086

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Borrowers with poor math skills made up a higher percentage of homeowners in foreclosure during the housing bust than those who were skilled at arithmetic.

S. Clark Kendus