Team Nadine’s Blog

Everyone is asking who is likely to benefit from the recently released by the Treasury Department. Some program highlights include:

*The mortgage to be modified must have been originated on or before January 1, 2009. 

 *New borrowers will be accepted until December 31, 2012. Program payments will be made for up to five years after the date of entry into a Home Affordable Modification. Monitoring will continue through the life of the program. 

*The home must be an owner occupied, single family 1-4 unit property (including condominium, cooperative, and manufactured home affixed to a foundation and treated as real property under state law).

 • The home must be a primary residence (verified with tax return, credit report, and other documentation such as a utility bill).

 • The home may not be investor-owned.

• The home may not be vacant or condemned.

• Borrowers in bankruptcy are not automatically eliminated from consideration for a modification. • Borrowers in active litigation regarding the mortgage loan can qualify for a modification without waiving their legal rights.

• First lien loans must have an unpaid principal balance (prior to capitalization of arrearages) equal to or less than: o 1 Unit: $729,750 o 2 Units: $934,200 o 3 Units: $1,129,250 o 4 Units: $1,403,400

*Any foreclosure action will be temporarily suspended during the trial period, or while borrowers are considered for alternative foreclosure prevention options. In the event that the Home Affordable Modification or alternative foreclosure prevention options fail, the foreclosure action may be resumed.

For more details of this new program please follow this link:

Home Affordable Modification Program Guidelines.

Some additional things to consider:

*Not all lenders are required to participate in this program.  Your current lender might have new programs and options to abide by the new government law and is worth investigating.  Keep in mind the huge volume of consumers that are making inquiries into refinancing at this time.  Patience and understanding of these facts will help you deal with delays in response time.

*These guidelines are simply outlines of the rules of this new law and will vary with each individual situation.

*Seek out someone who deals in lending every day to discuss your options given this new program and your personal situation.

*If you are late for your mortgage payment it is worth investigating.  Sometimes you wont know if you qualify unless you go through the application process.

Hope for homeowners in jeopardy of foreclosure is getting better every day.  Here is a very comprehensive list organizations that offer free or low cost foreclosure prevention programs;

House Harmony Investments, LLC~ Charlotte based. They specialize in Preforeclosures and short sales. www.MYHouseHarmony.com 704-332-HELP Househarmony@carolina.rr.com

Hope for Homeowners may refinance mortgages for borrowers that are having difficulty making their payments, but can afford a new loan insured by the Federal Housing Administration 1-800-225-5342 www.hud.gov/hopeforhomeowners

Hope Now is an alliance-between counselors, servicers, investors, and others.They provide borrowers with debt management counseling, credit counseling and overall foreclosure counseling.  The goal is to help home owners stay in their homes. 1-888-995-HOPE www.hopehow.com

NeighborWorks is a national network of more than 240 community-based nonprofit organizations created by Congress to provide financial support, technical assistance and training for community revitalization efforts.  1-202-220-2300 www.nw.org

US Department of Housing and Urban Development Thanks to one of my readers who has shared this tip: homeowners with FHA loans or any loans for that matter can contact HUD for a free consultation.  Also available is a Guide To Avoiding Foreclosure: call 1-800-569-4287 www.hud.gov/foreclosure/index.cfm

NC Department of Health and Human Services Low Income Home Energy Assistance Program~ There are some forms of assistance available to low income households through State programs.  The include financial assistance towards a household’s energy bill, emergency assistance if a household’s energy service is shut off or about to be shut off, and a range of other energy related services such as weatherization improvements, utility equipment repair and replacement, budget counseling and so forth 1-800-662-7030 www.ncdhhs.gov/dss/energy

If you or someone you care about are currently experiencing some sort of financial distress that might jeopardize your ability to make mortgage payments there are several crucial bits of information you need to know and some things you need to do right now before your payment is late. There are many people currently in this situation due to loss of job or a decreased income, mounting credit card debt, an increase in mortgage payments (due to an increase in an adjustable rate mortgage), a serious illness, or divorce.  These are depressing situations that might cause one to avoid dealing with the serious situation at hand, just give up and let the bank foreclose on their home, or perhaps someone might be too embarrassed to reach out for help to investigate their options.  There are options and alternatives to foreclosure!  Foreclosure hurts many people besides the person being foreclosed. Like a contagious disease that begins to spread it effects the entire neighborhood.  It hurts all homeowners that surround this home causing properties values to decrease.  When a home is put onto the market it is extremely difficult to compete with the short sale or foreclosure down the street causing that home to need to lower their list price to have even a remote chance to compete for a sale.  Eventually causing comps to fall and home values within this surrounding area to depreciate.  Believe it or not lenders would rather not foreclose on properties.  It is more lucrative for lenders to work out as the foreclosure process can be an expensive process for the lender.  BUT…once a borrower defaults on the loan the mortgage servicer is no longer collecting their monthly fees and therefore would rather forclose to rid itself of the obligation to service that loan.  For that reason it is critial that you contact your lender before a payment is ever late or missed!!!!

Here are things you can do that will help your situation:

First and foremost if you are beginning to experience financial difficulties anticipate financial problems you need to communicate with the mortgage lender before a mortgage payment is late.   Communication is crucial.  Another critical this to avoid is abandoning the property.  The lender will interpret that action as an indication that you are not willing to attempt to work out a loan modification and will just foreclose. 

Get professional guidance:  FREE help is out there to guide you through the process of evaluating your personal situation.  There is an 800# to call for Government approved counselors to assist you at this point and to review your case to see if there are any alternatives for you at this point. 1-888-995 HOPE or website www.HOPENOW.com   This program provides 24 hour a day-seven days a week free counselling or to be directed to a HUD approved counseling agency.  Or check out the HUD website www.hud.gov and follow the various links to find offices within North Carolina. 

 The options rather than foreclosure are:

1. Forbearance by the Lender~  This is most feasible if you have experienced a temporary financial hardship due to illness, or job loss with a reasonable expectation that you will be able to find a new job with an income level high enough to make your mortgage payment.  If you can provide proof and documentation of a temporary hardship the lender may agree to delay or alter collection efforts.  They may agree to allow the borrower to pay only a portion of your scheduled payment or perhaps no payments for a very specific period of time.  The amounts that are unpaid are not excused but rather will be addressed by an new loan modification or extension plan from your original loan.

2. Repayment plans~If a borrower has missed a payment… but now has the financial ability to make full payments the lender may be willing to alter your current payment structure to include the past-due amount.
3. Loan Modifications~ If you are behind several months of mortgage payments due to financial hardship and you have the ability now to resume payments the lender may agree to modify the terms of the original loan. Sometimes they even forgive payments for up to 1 year for those who have experience hardship due to a natural disaster.  Loan modification may be the best solution for those who have an adjustable rate mortgage which they are not able to afford currently but who can qualify for a fixed rate mortgage at a slightly higher rate than initially enticed them to choose an adjustable rate option.
4. Short sale~ When the above two options are not an option the lender may agree to accept less than what is owed on your home if you present full evidence that diligent efforts have been employed to try to sell your home to recoup full value of the mortgage amount.  Due to the recent depreciation of homes the value or your current mortgage might exceed the current market value.  In this case a homeowner cannot lower the price of the home to a level that is currently selling.  Another new option for those home owner’s homes are now worth less than the current mortgage owed  is the new bill put into law in October known as the Home Owner Recovery Act of 2008. This new law allows for qualified home owners with their lenders permission to refinance their home at 90% of the homes newly appraised value. One catch though…the government will then share in the property’s appreciation.  Follow the blue link for complete details.  

5. Deed -in-lieu of foreclosure~ Is when the home owner voluntarily agrees to give up title on their home to the mortgage company to satisfy the mortgage debt. 

6. Partial Claim~In this situation an insurer agrees to provide funds to the borrower to satisfy any deficiency in mortgage payment to bring the account current.  There are three sources to provide payments in this situation:

     *HUD Partial Claim~ It the loan is and FHA backed loan  In essence HUD provides an interest free second mortgage.

     *An Advanced Claim~ If the loan has mortgage insurance coverage that insurance company might provide the funds to bring the loan current and allow a provision for deferred repayment.

     *Fannie Mae HomeSaver Advance~ A low interest loan repaid over 15 years to bring the loan current and is available on most Fannie Mae insured loans. 

     Remember there is help available to assist you to prevent a foreclosure.  Banks are not in the business to own real estate and would much rather keep a homeowner in their home.  They have the option of lengthening the term of your loan, lowering the interest rate, and/or reduce the amount of principle left on your loan.  If you or someone you know is facing financial difficulties please pass this information onto them.  The more people who work through their difficulties with their lender rather than allow the bank to foreclose on their home the better off we all are.

Historically the holidays have been a slow time of year for real estate sales in North Carolina.  In this unpredictable economic environment no one know when the official bell will ring indicating “the bottom” has finally been reached and it is time to start buying real estate again.  Rumor has it that interest rates will likely reach 4.5% for new purchases soon.  Surely that will create a huge buying spree.  So if you are thinking about listing your home in the spring perhaps you should reconsider and potentially list sometime soon.  Here are 11 other reasons you might want to consider when thinking about listing your home during the holidays:

1.  There will be less competition for buyers.  This spring will bring a flood of new homes coming to market.  Due to the law of supply and demand…you might actually yield more money for your home now vs. this spring.

2.  Winter prospects tend to be more serious buyers.

3.  Your home looks better during the holidays.

4.  One of the highest percentages of “Listing Sold” to “Listing Taken” occur during this time of year.

5.  Throughout the holiday season , you may restrict showings during your personal family events.

6.  Buyers have more time to look at homes during the holidays, especially during vacation.

7.  January is traditionally the biggest transfer month…and you must be on the market to capture that market.

8.  By selling now you can have a delayed closing or extended occupancy until the beginning of the following year if you want it.

9.  When you sell during the winter you have an opportunity to buy during the spring, when many homes are on the market.

10.  You may have fewer actual showings, but more qualified and motivated prospects.

11.  Corporate transferees, who need to buy a home now, can’t wait until spring.

Ever wonder what remodeling jobs are worthwhile as you consider putting your home onto the market?  Some Sellers wonder if they should in fact hold off on doing a remodel job prior to selling their home thinking that a typical buyer might rather do that remodel themselves.  Not true.  Most buyers prefer not to lift a finger after they move into a home.  Studies show that your home will sell faster and for a higher price if those remodel jobs are done prior to listing your home.   Many people also wonder what home improvement projects will more likely pay for themselves when putting your home onto the market?  Here is a link to a great article that details what remodel jobs are likely to pay for themselves when selling your home:

http://www.realtor.org/rmohome_and_design/articles/2008/0812_costvsvalue_2008?id=bcaa4b804bfb44b98fe18f66fe42bfc9&wcm_page.resetall=true&cache=none&contentcache=none&connectorcache=none&srv=page

Never before has this statement been truer!  When Sellers are considering an initial list price in our current market it is vital to have the home competitively priced.  If not you will most likely not even get any showings.  Buyers today have such a large number of homes to choose from.  They are seeking homes that have the potential to maintain their value even if the market continues to decline.  Even if you have an extremely lovely home with exceptional decorating, if it is not priced for today’s market Buyers will not even consider looking at your home because there are tons of other pretty homes available at lower prices.  Here’s a link to a great article that elaborates on this topic:

http://www.visualtour.com/shownp.asp?T=726404

Mortgage rates took a sharp nosedive this week after the Feds announced they would buy back mortgage-backed securities.  Fabulous rates surfaced this week with lenders offering up to 5.25 for a 30 year fixed rate!  Using a Mortgage Broker can help you locate different lenders who have the best deals out there.  But does the cost to refinance make good financial sense?  There are fees involved when you refinance that makes the decision to refinance tricky.  Here is a link to a great article that advises on four things to consider when trying to make the decision to refinance or not:

http://www.bankrate.com/brm/news/mtg/mortgage-news-e1.asp

Did you know that since 2006  303 major lending institutions have imploded according to a website called The Mortgage Lenders implode-o-Meter:

http://ml-implode.com/index.html#lists

This website lists all the lenders who have gone under, those that are in jeopardy and those that are secure.  Be sure to check out their list before you take out that new loan!  At the very least this website has some interesting reading.

It isn’t that banks aren’t lending…they have just become more picky who they give loans to.  Welcome to the world of full doc loans.  This year creditors standards have become tighter and tighter.   This is a reversal of the standards used back in the days when sub-prime loans were given to those who should not have qualified for them.  Today the burden of proof is in the hands of the borrower more than ever.  Credit scores need to be higher and documentation needs to be complete.   Mortgage insurers require these higher credit score to underwrite the loans.  They are also demanding higher down payments.  To learn more follow this link to a great article that explains this new trend in detail:

http://www.bankrate.com/brm/news/mortgages/20080925-credit-crunch-mortgages-a1.asp

Credit card fraud is truly on the rise.  Consider yourself lucky if it hasn’t happened to you yet…but with possible continued economic hard times ahead chances are you will.  Here are a few tips from The National Foundation for Credit Excellence to help protect you from credit card fraud (used with permission):

Internet ScamBusters’ 21 Credit Card Fraud Prevention Tips:
1. Keep an eye on your credit card every time you use it, and make sure you get it back as quickly as possible. Try not to let your credit card out of your sight whenever possible.
2. Be very careful to whom you give your credit card. Don’t give out your account number over the phone unless you initiate the call and you know the company is reputable. Never give your credit card info out when you receive a phone call. (For example, if you’re told there has been a ‘computer problem’ and the caller needs you to verify information.) Legitimate companies don’t call you to ask for a credit card number over the phone.
3. Never respond to emails that request you provide your credit card info via email — and don’t ever respond to emails that ask you to go to a website to verify personal (and credit card) information. These are called ‘phishing’ scams.
4. Never provide your credit card information on a website that is not a secure site.
5. Sign your credit cards as soon as you receive them.
6. Shred all credit card applications you receive.
7. Don’t write your PIN number on your credit card — or have it anywhere near your credit card (in the event that your wallet gets stolen).
8. Never leave your credit cards or receipts lying around.
9. Shield your credit card number so that others around you can’t copy it or capture it on a cell phone or other camera.
10. Keep a list in a secure place with all of your account numbers and expiration dates, as well as the phone number and address of each bank that has issued you a credit card. Keep this list updated each time you get a new credit card.
11. Only carry around credit cards that you absolutely need. Don’t carry around extra credit cards that you rarely use.
12. Open credit card bills promptly and make sure there are no bogus charges. Treat your credit card bill like your checking account — reconcile it monthly. Save your receipts so you can compare them with your monthly bills.
13. If you find any charges that you don’t have a receipt for — or that you don’t recognize — report these charges promptly (and in writing) to the credit card issuer.
14. Always void and destroy incorrect receipts.
15. Shred anything with your credit card number written on it.
16. Never sign a blank credit card receipt. Carefully draw a line through blank portions of the receipt where additional charges could be fraudulently added.
17. Carbon paper is rarely used these days, but if there is a carbon that is used in a credit card transaction, destroy it immediately.
18. Never write your credit card account number in a public place (such as on a postcard or so that it shows through the envelope payment window).
19. Ideally, it’s a good idea to carry your credit cards separately from your wallet — perhaps in a zippered compartment or a small pouch.
20. Never lend a credit card to anyone else.
21. If you move, notify your credit card issuers in advance of your change of address.
If you suspect credit card fraud:
If your credit cards are lost or stolen, contact the issuer(s) immediately.
Most credit card companies have toll-free numbers and 24-hour service to deal with these emergencies — they are eager to avoid credit card fraud.
According to US law, once you have reported the loss or theft of your credit card, you have no more responsibility for unauthorized charges. Further, your maximum liability under federal US law is $50 per credit card — and many credit card issuers will even waive that fee for good customers. 
If you follow all these tips, it will go a long way in protecting you from credit card fraud