In a major victory for REALTORS®, Governor Brown signed into law today a C.A.R.-sponsored bill, Senate Bill 458, prohibiting a deficiency after a short sale for one-to-four residential units, regardless of whether the lender is a senior or junior lienholder. Effective immediately for transactions closing escrow from this day forward, both senior and junior lienholders cannot require a borrower to owe or pay for a deficiency in a short sale. This law also prohibits any deficiency judgment to be requested or rendered for senior or junior liens after a short sale of one-to-four residential units. Any purported waiver of this rule shall be void and against public policy.
Although a lender cannot require a borrower to pay any additional compensation in exchange for a short sale approval, the new law does not prohibit a borrower from voluntarily offering a monetary contribution to a lender in hopes of obtaining a short sale. A lender is also permitted under the new law to negotiate for a contribution from someone other than the borrower, such as other lenders, agents, relatives, and the like.
See bill 458 at www.leginfo.ca.gov.
Monday, July 18, 2011
Friday, July 15, 2011
Mortgage Rates are Great....for those that qualify.
Mortgage rates are great, if you qualify
Interest rates are near historic lows and home prices are affordable; however, many borrowers are finding they must have nearly pristine credit records and hefty down payments to get the best rates.
Making sense of the story
Since 2009, credit standards have become much tighter. For borrowers, this emphasizes the importance of paying close attention to credit scores.
New rules unveiled last week, the result of last year’s Dodd-Frank financial-services legislation, require banks and other lenders to disclose to consumers the scores used to determine interest rates charged borrowers, or to deny credit, making it easier for borrowers to see how their credit scores affect the interest rates they pay.
The FICO credit scores on loans that banks are giving out and that are backed by government agencies Fannie Mae and Freddie Mac show the new reality. Currently, the two agencies essentially finance 75 percent of all mortgages by purchasing the loans from banks, thus shaping how much it costs to borrow.
FICO scores range from 300 to 850. Prior to the decline in home prices, a score of 700 to 725 was considered solid and, a borrower could expect to be approved for a “conventional” mortgage at the lowest rates.
From 2003 to 2006, 82 percent of Fannie Mae mortgages were for borrowers with a score between 700 and 750, but so far in 2011, only 13 percent of Fannie Mae mortgages carry that score, and just 1.7 percent have a score of 700 to 725. This year, 75 percent of Fannie Mae mortgages are for FICO scores of 750 to 755, up from less than 5 percent before 2005.
These trends demonstrate the importance of understanding credit scores and ensuring credit reports are accurate. Consumers can check their credit report at AnnualCreditReport.com.
More at http://online.wsj.com/article/SB10001424052702303544604576436331698560662.html?mod=WSJ_hpp_sections_personalfinance
Interest rates are near historic lows and home prices are affordable; however, many borrowers are finding they must have nearly pristine credit records and hefty down payments to get the best rates.
Making sense of the story
Since 2009, credit standards have become much tighter. For borrowers, this emphasizes the importance of paying close attention to credit scores.
New rules unveiled last week, the result of last year’s Dodd-Frank financial-services legislation, require banks and other lenders to disclose to consumers the scores used to determine interest rates charged borrowers, or to deny credit, making it easier for borrowers to see how their credit scores affect the interest rates they pay.
The FICO credit scores on loans that banks are giving out and that are backed by government agencies Fannie Mae and Freddie Mac show the new reality. Currently, the two agencies essentially finance 75 percent of all mortgages by purchasing the loans from banks, thus shaping how much it costs to borrow.
FICO scores range from 300 to 850. Prior to the decline in home prices, a score of 700 to 725 was considered solid and, a borrower could expect to be approved for a “conventional” mortgage at the lowest rates.
From 2003 to 2006, 82 percent of Fannie Mae mortgages were for borrowers with a score between 700 and 750, but so far in 2011, only 13 percent of Fannie Mae mortgages carry that score, and just 1.7 percent have a score of 700 to 725. This year, 75 percent of Fannie Mae mortgages are for FICO scores of 750 to 755, up from less than 5 percent before 2005.
These trends demonstrate the importance of understanding credit scores and ensuring credit reports are accurate. Consumers can check their credit report at AnnualCreditReport.com.
More at http://online.wsj.com/article/SB10001424052702303544604576436331698560662.html?mod=WSJ_hpp_sections_personalfinance
Thursday, July 14, 2011
CHF Grant provides 3% towards down payment for qualified buyers!!!
The CHF Platinum Program is designed to assist low-to-moderate income homebuyers with the purchase of a home, by providing down payment and/or closing cost assistance (currently in the form of a Grant). Many times this means families and individuals can purchase a home much sooner than they thought possible.
This program is available for the purchase of an owner occupied single-family residence, agency-approved condominium or planned unit development (PUD) located in the state of California. It is not limited to first-time homebuyers.
The Grant, currently made possible through the program, is sized at 3% of the Mortgage Loan amount. The Grant funds can be used towards the homebuyer’s down payment and/or eligible closing costs on a 30-year fixed-rate full amortization FHA, VA or USDA Mortgage Loan. It is available for purchases of both new and existing homes, as long as the home will be the primary residence of the homebuyer.
You may qualify if you make less than $84,480/yr and have a credit score above 620 in most cases you will qualify.
More info at: http://www.chfloan.org/Programs/Platinum/CHF_Platinum.html
This program is available for the purchase of an owner occupied single-family residence, agency-approved condominium or planned unit development (PUD) located in the state of California. It is not limited to first-time homebuyers.
The Grant, currently made possible through the program, is sized at 3% of the Mortgage Loan amount. The Grant funds can be used towards the homebuyer’s down payment and/or eligible closing costs on a 30-year fixed-rate full amortization FHA, VA or USDA Mortgage Loan. It is available for purchases of both new and existing homes, as long as the home will be the primary residence of the homebuyer.
You may qualify if you make less than $84,480/yr and have a credit score above 620 in most cases you will qualify.
More info at: http://www.chfloan.org/Programs/Platinum/CHF_Platinum.html
Friday, July 8, 2011
Option for College Grads
With many college graduates unable to find the kinds of jobs that would allow them to save up enough money for a large down payment, which many lenders now require, some parents are helping their children buy their first home.
Parents considering this option first need to consider whether this is a viable and affordable solution to their child’s housing situation. If the answer is “yes,” then there are a variety of financial arrangements that can be arranged.
Parents can lend a down payment (or the entire mortgage) to the child.
The parents can co-sign a bank loan, enter into a shared-equity arrangement with the child, or gift the money.
Another option is for the parents to buy a house and work out a rent-to-buy arrangement with their child.
There are upsides and downsides to each of these arrangements, so parents are advised to talk to a financial planner before making the decision.
Parents considering this option first need to consider whether this is a viable and affordable solution to their child’s housing situation. If the answer is “yes,” then there are a variety of financial arrangements that can be arranged.
Parents can lend a down payment (or the entire mortgage) to the child.
The parents can co-sign a bank loan, enter into a shared-equity arrangement with the child, or gift the money.
Another option is for the parents to buy a house and work out a rent-to-buy arrangement with their child.
There are upsides and downsides to each of these arrangements, so parents are advised to talk to a financial planner before making the decision.
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