Marketline Mortgage

Social Security Number Process Change

2011-08-30T18:42:00.000-07:00

The Social Security Administration (SSA) is changing the way Social Security Numbers (SSNs) are issued. This change is referred to as "randomization." The SSA is developing this new method to help protect the integrity of the SSN. SSN Randomization will also extend the longevity of the nine-digit SSN nationwide.

The SSA began assigning the nine-digit SSN in 1936 for the purpose of tracking workers' earnings over the course of their lifetimes to pay benefits. Since its inception, the SSN has always been comprised of the three-digit area number, followed by the two-digit group number, and ending with the four-digit serial number. Since 1972, the SSA has issued Social Security cards centrally and the area number reflects the state, as determined by the ZIP code in the mailing address of the application.

There are approximately 420 million numbers available for assignment. However, the current SSN assignment process limits the number of SSNs that are available for issuance to individuals by each state. Changing the assignment methodology will extend the longevity of the nine digit SSN in all states. On July 3, 2007, the SSA published its intent to randomize the nine-digit SSN in the Federal Register Notice, Protecting the Integrity of Social Security Numbers [Docket No. SSA 2007-0046].

SSN randomization will affect the SSN assignment process in the following ways:
It will eliminate the geographical significance of the first three digits of the SSN, currently referred to as the area number, by no longer allocating the area numbers for assignment to individuals in specific states.

It will eliminate the significance of the highest group number and, as a result, the High Group List will be frozen in time and can be used for validation of SSNs issued prior to the randomization implementation date.

Previously unassigned area numbers will be introduced for assignment excluding area numbers 000, 666 and 900-999.

These changes to the SSN may require systems and/or business process updates to accommodate SSN randomization.If you have any questions regarding SSN randomization or its possible effects to you or your organization, please see the related Frequently Asked Questions or email your question(s) to ssn.randomization@ssa.gov

Rates are incredibly low today

2011-08-05T12:56:00.000-07:00

It's a great time to lock in if you need financing!

15 year fixed 3.625% APR 3.675%

30 year fixed 4.25% APR 4.3%

Give me a call with any questions.

Taum
480-967-8286

Can You Get a Loan Now?

2011-07-27T07:36:00.000-07:00

The credit crunch is history, the recession is officially over, and banks are sitting on something like $1.5 trillion in cash. So why is it still so hard for many people to get loans?

The Federal Reserve says most lenders have stopped raising their standards, but that's not the same as throwing wads of cash at people, economists note.
"If you're already extremely tight and you stop tightening, that's not easing," said Paul Kasriel, the chief economist for Northern Trust. Furthermore, he doesn't expect conditions to dramatically improve borrowers' prospects anytime soon. "There's no magic bullet that will change this," he says.
What's happening is continued fallout from the financial crisis and recession. Commercial real estate loans continue to go bad, and foreclosures in the residential market are far from over. As home values keep dropping, more people who could afford to pay their mortgages are choosing not to, allowing their homes to go into foreclosure. Currently, these strategic defaults are responsible for about one out of three foreclosures.
From a banker's perspective, these trends are reason enough to be cautious about lending right now.
"Some loans you thought were good on your books may not be good," Kasriel said. "If you use your capital today to make loans and you have more write-downs, you could find yourself undercapitalized."
Banks are required to keep some money in reserves against losses. Falling below these required levels could cause the banks to face regulatory scrutiny or even takeover. So lenders cling to tough standards, focusing most of their attention on low-risk lending to those with good to excellent credit scores.
Here's a look at three major areas of lending -- and how you can improve your chances in each if you need a loan.
Mortgages
A quick history lesson, for those of you who weren't paying attention: Until 2006, when home prices peaked, lenders competed fiercely for customers, and their lending standards were loosened considerably -- to the point where you could get a mortgage without proof of your income or assets. Even those with lousy credit scores could usually find someone to lend them money.
Those loose lending standards came back to bite lenders as first subprime mortgages and then mortgages in general started defaulting in huge numbers. Derivatives and other financial products created by Wall Street firms to amplify profit from these mortgages wound up multiplying the risk and nearly brought down the financial system.
Since the crisis, investors have balked at buying mortgages that don't come with government guarantees. Today, 90% of home loans have those guarantees. Fannie Mae and Freddie Mac, government-sponsored entities created to encourage mortgage lending, and the Federal Housing Administration buy loans from lenders and repackage them for sale to investors with guarantees to make them whole if borrowers default. Before the recession, about two-thirds of loans made had government guarantees attached.
The reduction in the market for mortgages made outside the government-backed system means fewer options for borrowers. The only good news, said Matt Hackett of direct lender Equity Now, is that Fannie, Freddie and the FHA are no longer constantly changing their lending standards, so borrowers are encountering fewer surprises and last-minute demands for documents than they might have a year ago.
"It's much easier to get a handle on it," Hackett said. "The guidelines don't change every week or every day."
Fannie and Freddie guidelines favor those with decent credit scores (FICOs of 680 and above), a 10% down payment and steady incomes documented by two years' worth of tax returns. Those with lower credit scores or smaller down payments often wind up directed to FHA loans, as the FHA handles nearly all lower-credit-score applications.
Advice for mortgage seekers now includes:
³Polish those credit scores. Pay down credit card debt, get collections cleared up by disputing them or paying them in return for removal and keep making payments on time to boost your scores. To see where you stand, buy your FICO scores from myFICO for $19.95 each. It's the only site that sells scores made from the same FICO formula most mortgage lenders use.
³Build up your down payment. It's possible to buy a home with as little as 3.5% down, but you'll be instantly "underwater" once you consider how much it costs to sell and move (usually 6% to 10% of a home's value). A bigger down payment can help keep you right-side up and win you a better interest rate. If you can save 20%, you can do without private mortgage insurance.
³Consider waiting. Home prices are still falling in many areas, and interest rates aren't expected to climb soon, so there may not be a huge penalty for waiting if you need time to boost your scores or your down payment, or both.
Car loans
Lacey Plache, the chief economist for Edmunds.com, sees "a definite easing" in auto lending standards over the past year, with more loans being made to people with less than perfect credit.
In the first three months of 2010, for example, 70% of car loans went to people with "superprime" credit -- FICO scores of 740 or above. During the same quarter this year, the percentage was down to 65.6%, Plache said, with lower credit ranges all seeing a slight increase.
That still means the majority of loans are going to the lowest-risk customers, a fact that helps explain why auto sales remain depressed. Other contributors include the fact that people are hanging on to their cars a year longer on average than before the recession, plus supply disruptions from the disasters in Japan.
If you're in the market for an auto loan:
³Understand your credit scores' impact. People with credit scores in the good-to-excellent range -- 720 to 850 on the FICO scale -- are landing interest rates averaging 4.37% on three-year auto loans. Those with scores in the 660 to 684 range pay more than 3 extra percentage points -- 7.74% -- for the same loan, according to myFICO, which uses Informa Research Services to poll auto lenders. That's a difference of more than $1,000 on a $20,000 loan. If your credit scores won't win you a great rate, consider delaying your auto purchase until you can boost your scores -- a strategy that also will give you time to save up a bigger down payment.
³Check with your credit union first. Before you walk onto a car lot, you should know how much car you can afford to buy and what rate you should be getting on a loan. Ignorance on either point can cost you dearly once you sit down to negotiate. A smart strategy, recommended by Edmunds.com, is to get approved for an auto loan from your local credit union (credit unions often offer their members better rates and terms than many banks). If the dealership can find you better financing, you can take it and cancel the credit union application. Otherwise, your funding is secure, and you don't risk getting a higher interest rate or worse terms than you deserve.
Credit cards
Credit card companies are brawling to attract the high-FICO-score crowd with 0% balance transfer offers and lavish new rewards programs. Less heralded is the return of some credit card issuers to the subprime market.
"Certain major card issuers have delved back into offering cards to those with fair credit, little credit history and bad credit," said Ben Woolsey, the director of marketing and consumer research for CreditCards.com.
Capital One and HSBC, big players in this market before the recession, have returned, with Capital One sending credit offers to those with recent bankruptcies and foreclosures. A number of smaller banks now offer credit cards to those with troubled or short credit histories.
The credit card reform law limited the fees issuers can charge for such cards, so many of these offers come with "shockingly high" interest rates. A First Premier Bank secured credit card with a $300 limit, for example, comes with a 49.9% interest rate if you carry a balance. An unsecured card with a $700 limit for those with fair credit has a 36% interest rate.
Woolsey credits a variety of factors for the credit card industry's new willingness to lend.
"A robust return to profitability, significant reduction in credit losses, lower unemployment, less uncertainty about the legislative climate and competitive pressures have all factored into the card industry ramping up its account acquisition activities," Woolsey said. "This has been more pronounced for the superprime and prime segments of the market, but for certain issuers with the right product set and risk tolerance, it has begun to include near prime and subprime markets as well."
Here's what you need to know if you're in the market for a credit card:
³The best offers are reserved for those with FICOs over 750. If you have excellent credit, you'll have plenty of offers to choose from. If you're still carrying a balance, you can use a low-rate balance transfer offer to pay off your debt. If you pay your balance in full, shop around to find the best card for your spending habits.
³Rebuild bad credit with a secured card. Those sky-high interest rates won't affect you if you don't carry a balance. Instead, charge 10% or less of the card's limit and pay it in full every month to slowly rebuild your scores. Make sure the card reports to all three credit bureaus.
By: Liz Weston, www.money.msn.com

No Seasoning on Cash Out Refi after Cash Purchase

2011-07-13T14:11:00.000-07:00

Effective immediately on Fannie Mae loans:

Borrowers who purchased the subject property within the past six months are eligible for a cash-out refinance if all of the following requirements are met:

The new loan amount is not more than the actual documented amount of the borrower's initial investment in purchasing the property, plus the financing of closing costs, prepaid fees, and points (subject to the maximum LTV, CLTV, and HCLTV ratios for the transaction).

The purchase transaction was an arms-length transaction.

The purchase transaction is documented by the HUD-1, which confirms that no mortgage financing was used to obtain the subject property.

The source of funds for the purchase transaction can be documented (bank statements, personal loan documents, HELOC on another property). Any loans used as the source for the purchase transaction will be required to be repaid on the new HUD-1.

All other cash-out refinance eligibility requirements are met and cash-out pricing is applied.

Note: The preliminary title search must not reflect any existing liens on the subject property. If the source of funds to acquire the property was an unsecured loan or HELOC (secured by another property), the new HUD-1 must reflect that source being paid off with the proceeds of the new refinance transaction

7 Nasty Credit Myths that Won't Die

2011-06-03T16:12:00.000-07:00

A decade has passed since the vault cracked open and we started learning how credit scores really work.

For years, the creators of the leading credit scoring formula, the FICO, didn't want consumers to know the scores existed, let alone what went into them. In early 2000, however, E-Loan started letting customers see their FICO scores. That free experiment was quickly shut down, but the secret was out.

Pressure from consumer advocates and lawmakers finally persuaded the FICO creators -- a company named Fair Isaac, now known as FICO -- to reveal later that year the 22 factors, grouped into five categories, that went into creating its scores.

We've been adding to our knowledge ever since. But 10 years later I'm still hearing many of the stupid myths about credit and credit scoring that prevailed 10 years ago, plus some that have sprung up since.

These myths aren't just annoying. Their prevalence is keeping people from understanding one of the most important numbers in their financial lives. Credit scores are used:

-By lenders, to determine whether you're approved for loans or credit cards, along with the interest rates and terms you get.
-By insurers, to set premiums.
-By cell phone companies, to see who qualifies for a contract and who doesn't.
-By utilities, to determine whether you need to leave a deposit and how much.
-By landlords, to decide who gets apartments and rental houses.
-Failing to understand credit scores and how they work, in other words, really can put a dent in your financial life.

Here are the seven most dangerous myths that need to be dispelled:

Myth No 1: "If you handle your finances responsibly, your credit scores will take care of themselves."
Fact: A credit score is not a financial-health score. It doesn't measure your income, assets or financial savvy. There are some behaviors that may be good for your wallet that aren't good for your scores.

Keep in mind that credit scoring formulas have one primary purpose: to help lenders gauge the likelihood you'll default -- based on how you handle credit. If you stop using credit or use it in a way the formulas don't like -- using only one card, shutting down a bunch of accounts or maxing out your cards, even if you then pay them off in full -- your scores could suffer.

Myth No. 2: "Checking your credit hurts your credit scores."
Fact: Checking your own credit reports and scores does not affect your scores. Period.
A credit check could hurt you if you asked a friend at a bank or car dealership to pull your credit reports. Such transactions probably would be coded as "hard" inquiries, or as applications for credit, which could ding your scores. But checking your own credit is otherwise a non-event.

This persistent myth is particularly destructive, because it discourages people from knowing what's going on with their credit reports and scores. Many reports contain serious errors that result in your being turned down for a loan or paying a much higher interest rate than you deserve. You need to visit AnnualCreditReport.com at least once a year to view your free credit reports from the three bureaus and dispute any serious errors. If you'll be in the market for a major loan, such as a mortgage or an auto loan, you'd be smart to buy your FICO scores from myFICO.com to see how lenders are likely to view your application and get tips from improving your numbers.

Myth No. 3: "Asking for lower limits will help your credit."
Fact: Having sizable credit limits is a good thing for your scores, as long as you don't use them to run up debt.

Lenders like to see a big gap between your available limits and the amount of credit you're actually using. A lower limit reduces that gap, which can be bad news for your credit scores. Of course, if you can't trust yourself not to use your available credit, the damage to your credit scores may be the least of your worries. Otherwise, though, you probably should leave your credit limits alone.

Myth No. 4: "You need to carry a credit card balance to have good scores."
Fact: You don't need to be in debt or pay a penny of interest to have good credit scores.
Your credit reports and scores don't "know" whether you're carrying a balance or paying it off in full every month. That's because the balance reported to the credit bureaus typically is the balance from your last statement, not what was left over after you got that statement and paid the bill. So you might as well pay in full and save yourself the interest.

This myth encourages people to carry unnecessary debt, putting them at the mercy of credit card issuers and eroding their financial security.

Myth No. 5: "You should never close an account if you can help it."
Fact: The prevailing myth used to be that closing accounts could help your scores, which, we've learned, isn't true. But the knowledge that shutting accounts can hurt your scores has caused some people to balk at closing credit accounts, even when they probably should.

If your issuer is charging you a fee you don't want to pay, for example, closing a card or two shouldn't be a crisis if you have good scores, other open accounts and no plans to apply for credit in the immediate future. If you do plan to apply for a mortgage, car loan or new credit card, though, you should hold off on closing any accounts until after you've been approved.

Myth No. 6: "How you handle credit indicates how trustworthy you are."
Fact: People get in financial trouble for all kinds of reasons, including simply getting sick (medical bills were a factor in nearly two-thirds of consumer bankruptcies in 2007, according to Harvard University researchers).

There's no evidence of a link between information on credit reports and the likelihood an employee will commit fraud, but employers persist in thinking there is. (By the way, employers typically use credit reports to evaluate applicants, not credit scores.)

Furthermore, there is evidence that employers are abusing their power to review credit reports. Some states have already banned or limited pre-employment credit checks, and a bill was introduced in 2009-2010 session of Congress to do the same, although the legislation didn't go anywhere.

Myth No. 7: "All credit scores are pretty much the same."
Fact: There are hundreds of different credit scoring formulas. Even the scoring formula used by most lenders, the FICO, comes in different iterations. One lender may use the most up-to-date formula while another might use an older version that gives a different result. There are FICOs tweaked to accommodate car lenders, credit card lenders and finance companies, in addition to the "classic" FICO used by most mortgage lenders.

Some purveyors of other scoring formulas point to these different versions to try to convince people that it doesn't matter which score you get, since there are so many variations. Indeed, if you're simply looking for a guidepost as you try to shore up your finances, any of them can give you an idea of your credit's relative strength.
But if there's real money at stake, you want to get a score that's at least in the same ballpark as the one your lender will be using, and that's typically a FICO. If you're buying a credit score that doesn't say it's a FICO, it's not a FICO -- and it could be dozens or even hundreds of points different from the one your lender sees.

Liz Weston, www.money.msn.com

Life After Bankruptcy

2011-05-23T12:15:00.001-07:00

Life After Bankruptcy

Bankruptcy is an uncomfortable subject for a variety of reasons. The most obvious is the potential havoc it can wreak on your finances. Running a close second is the negative stigma which is often attached to the process. This negativity is important to mention because strong emotions can sometimes lead to unsound financial decisions with devastating results.

Bankruptcy becomes a viable option for someone who is “upside down” in terms of cash flow. In other words, when a person has more money going out each month than coming in, bankruptcy should be considered if no reversal of this negative cash flow is within sight. The longer someone waits to explore the various options available, the more serious his or her situation may become.

One of the worst things people can do in this situation is to borrow more money to try and pay off their debts. On paper, this is clearly an unwise financial decision. In the real world, however, it is very common for individuals to pursue this strategy in an attempt to buy time and hold off on filing for bankruptcy. On the surface, this is certainly a noble notion; however it can often compound the problem and serves only to delay the inevitable.

For many homeowners in the midst of this upside down cash flow, speaking to a qualified mortgage professional is a much better option. An experienced loan officer can objectively look at your finances and help you determine if restructuring your mortgage would not only help, but possibly even alleviate any need for bankruptcy.

If bankruptcy is the only option, seek out a reputable bankruptcy attorney and credit counselor. A qualified mortgage specialist can provide references for you as well, as he or she works with these professionals on a regular basis. Reliable references are essential in this case because experienced professionals greatly increase the odds of a successful bankruptcy experience. It’s that simple.

When filing for bankruptcy, be completely honest and accurate regarding every aspect of your financial situation. This includes any changes to your income which may occur throughout the process. Bankruptcy is a federal procedure, adjudicated by real judges, and scrutinized by representatives who coordinate with the Department of Justice, the FBI, and the IRS.

Here are some additional steps you can take to make the bankruptcy process as painless as possible:

Save all paperwork regarding your bankruptcy, and keep it organized. This will prove beneficial after your bankruptcy as you now have all of the pertinent information in one place. Also, be sure to write down your discharge date. It’s surprising how many people forget to do this.
Establish a household budget. This can be accomplished in many ways, but there are several inexpensive computer programs available which do an excellent job.
Throughout the bankruptcy, do your best to not only live below your means, but to save as much cash as possible. You never know what you may need it for once the process is completed.
Be prepared for a barrage of junk mail. There will be sharks on the loose who are hoping to capitalize on your need for credit.

Tips for Rebuilding Credit:

If you must buy a car, focus on transportation as opposed to style. Buy an inexpensive, used car, and try to get a loan for it. It’s a good idea to figure out what your budget allows in terms of a dollar amount first. This means obtaining financing prior to looking for a car.
Get a secured credit card. Secured credit cards allow for the cardholder to deposit a said amount of money into an account, thus establishing the spending limit of the card. Missed payments result in deductions from the account. Some of these cards will reward responsible borrowers by upping the limit without an additional deposit. Some will even convert the account into a traditional credit card. (Be wary of offers of “easy credit” or any card which asks you to call a 900 number. You will be charged for the call.)
Meet with a credit repair specialist. Not only can they help you clean up the damage to your credit report, they can advise you on specific ways to rebuild the credit you lost as well.
While it does take time, there is definitely life (and credit) after bankruptcy. Some mortgage lenders will even lend to you within a year or so after a bankruptcy. If you’re in serious financial trouble, the trick is to get the help and advice you need from professionals you trust.

Home Loan Rate Trends

2011-05-23T12:11:00.001-07:00

What is the Velocity of Money and How Does it Impact Home Loan Rates?

If you’ve been watching the economic news, you’ve probably noticed that market experts and traders have been keeping a close eye on the Commerce Department’s Personal Spending and Personal Income reports. Obviously, those reports provide insight into the health of our economy, but did you know they also influence home loan rates? That’s right, personal spending can actually influence the interest rates that are available when you purchase or refinance a home.

Here's why. It has to do with something called the velocity of money. Even though the government keeps pumping money into the system, nothing happens until that money is spent or lent – and passes from one hand to another or one business to another. The speed at which this money passes between parties is called the velocity of money. With the job market still very sluggish, consumers aren't spending much money these days, and businesses are still reluctant to spend money to make investments in their business. With the present velocity at low levels, inflation remains subdued and that's good for home loan rates. That's because rates are tied to Mortgage Bonds and inflation is the archenemy of Bonds, so low inflation is good for Bonds and rates. However, once velocity increases, the excess money in the system will cause inflation – which is bad for rates, since even the slightest scent of inflation can cause home loan rates to worsen. While we certainly want to see better economic recovery news in the near future, we have to remember that there's an inverse relationship between good economic news and Bonds and home loan rates. Weak economic news normally causes money to flow out of Stocks and into Bonds, which helps Bonds and home loan rates improve. Strong economic news, on the other hand, normally has the opposite result.

Currently, home loan rates are at a historically low level, but that situation won’t last forever. That means now is an ideal time to purchase a home or refinance before the velocity of money – and rates – change. If you or anyone you know would like to learn more about the current economic situation and how to take advantage of historically low home loan rates, then please contact me.

FIVE MAJOR TAX DEDUCTIONS THREATENED

2011-04-15T12:51:00.000-07:00

Five major tax deductions are up for discussion for elimination, starting with mortgage interest:
•Mortgage interest deduction
•Charitable contributions
•State and local taxes
•Employer-provided health insurance
•Tax-deductible retirement plans

See full story at: http://www.usatoday.com/money/perfi/taxes/2011-04-14-tax-breaks-under-fire.htm

Realtor Bonuses Offered with Program

2011-04-14T16:13:00.000-07:00

HomePath financing incentives are now available which allow up to 3 1/2% seller contribution to buyer's closing costs. This incentive is good through 6/30/2011.

Realtor Bonuses are offered through this program also. Call Taum for details - 480-967-8286 and hear a little bit more from Taum by clicking here:

http://www.youtube.com/watch?v=faAv9B1KnWg

Mortgages Now More Expensive, Harder to Get, Take Longer....That's Government in Action Again...

2011-03-16T23:18:00.000-07:00

Real Estate Industry News

Mortgage Proposals Could Cost Borrowers, Some Say

Mortgage loans could get more expensive, and harder to get, under proposals presented by the Obama administration to reform Fannie Mae and Freddie Mac, some consumer groups said recently.
The administration's proposals suggest varying levels of government support for mortgages. But only one of those proposals would maintain a strong role by the government for consumers in the mortgage market, according to the Consumer Federation of America, a nonprofit advocacy group.
Plans to rely heavily on banks and investors to provide mortgages, without much federal support, could lead to fewer long-term, fixed-rate mortgages, higher prices and less access to secondary markets for small banks and credit unions, the CFA and others said.
"The administration has laid out a series of options that could lead to the abandonment of a nearly 70-year commitment to affordable homeownership for working American families," said Barry Zigas, CFA's director of housing policy, in a news release.
Other administration proposals that might affect borrowers:
³Raising the minimum down payment for a Fannie- or Freddie-backed home loan to 10%
³Reducing the maximum mortgage amount that can be financed or insured by Fannie, Freddie or the Federal Housing Administration
³Increasing the fees charged by Fannie, Freddie and the FHA
It's important to note that the proposals are just a starting point for what is sure to be a lengthy discussion about the future of mortgage finance in America.
The Mortgage Bankers Association's chairman called the release of the administration's proposals "another important milestone on the road to stabilizing the mortgage market."
One of the concepts outlined by the administration resembles a previous MBA proposal, said Michael D. Berman, chairman of the MBA.
"Our proposal envisions an explicit, but limited, government guarantee of lower-risk mortgage-backed securities. The guarantee would be paid for by fees used to build a fund to protect taxpayers," Berman said in a news release. "This is the most prudent approach, one that places the primary risk on private investors and ensures sufficient liquidity during times of economic stress in order to provide affordable mortgage finance in all types of mortgage markets."
Reduced access to loans
For sure, if the government scales back Fannie and Freddie, and fees involved with government-backed mortgages rise, it will inevitably curtail the availability of affordable mortgage credit for some borrowers -- particularly people with marginal credit or little money to put down, said Greg McBride, senior financial analyst for Bankrate.com.
"The consequence of reining that in and expecting the private market to fill the void is that some consumers will find that credit isn't available -- and when it is, it will cost a good bit more," McBride said.
While broad changes to the government-sponsored entities could bring higher costs to consumers, mortgage costs have been going up already anyway, in the form of loan-level price adjustments from Fannie and Freddie and fee increases from the Federal Housing Administration, said Keith Gumbinger, vice president of HSH Associates, a publisher of mortgage and consumer loan information.
And with a private mortgage market nearly non-existent today, it's far from clear exactly how -- and when -- policies will change, he said.
"This is a pretty broad framework," Gumbinger said of the administration's proposals. But, finally, people in the industry have a framework on the table to argue about, he added.
"Hopefully, we can preserve mortgage markets that existing players can profit in, and move away from the excesses and polices that pushed us to where the market went as far as it could and fell over," Gumbinger said.
For its part, the National Community Reinvestment Coalition said the proposed policies could lock working-class families out of homeownership.
"There is universal agreement with the principle that people who cannot afford homeownership shouldn't be put in an unsustainable loan," John Taylor, president and chief executive of NCRC, said in a news release.
"However, the administration's proposal may be overly narrowing the window of opportunity for many blue collar and low- and moderate-income people from realizing their dream of homeownership."

By: Amy Hoak, www.marketwatch.com

FHA Announces Increase to Monthly Mortgage Insurance Premiums

2011-02-28T09:51:00.000-08:00

How Will This Impact Buying a Home?

I just wanted to let you know about an important announcement from FHA that will have an impact buying a home. As of this coming April 18th, the monthly Mortgage Insurance Premiums will increase for FHA loans (.25%). The change raises the current premium from .9% to 1.15% on 30 year fixed loans.

This increase could have a large impact on borrowers and their ability to qualify for FHA financing (or may even take them out of their comfort level for monthly payment).

Example:
$150,000 loan amount
Current monthly MIP: $112.50
New monthly MIP: $143.75

While this change will help strengthen FHA, which is important since some estimates show that FHA loans represent nearly 50% of all loans being done today, it puts the burden of shoring up FHA back on the consumer.

Even though FHA has increased their rates, the FHA loan is still a good option for buyers with little to put down; however, conventional financing is becoming more attractive every day.

If you have any questions at all about what this might mean, call or email me anytime. I'm committed to doing whatever I can to help people buy a home.

Renters Have Much to Gain by Pursuing Home Ownership

2011-02-26T08:50:00.000-08:00

Scottsdale, AZ – Buying a home vs. renting is a big decision that takes careful consideration, as most mortgage consultants will agree. But the rewards of home ownership are great. For many years, purchasing real estate has been considered an extremely profitable investment. It is an achievement that offers a sense of pride, financial stability and potential tax advantages.

Yes, there are certain responsibilities associated with owning a home. Landlords will often argue the benefits of renting, and for obvious reason. If you are renting, you’re helping them make their mortgage payment.

The numbers are staggering if you look at it this way. If you are paying $1,000 per month for an apartment, and you know your rent will increase 5% every year, then over the next five years you will pay your landlord $66,309. If you are currently renting a house, you may be paying much more than that each month. Either way, you gain no equity by shelling out this monthly housing expense and you certainly won’t benefit when the property value goes up!

However, if you were to purchase your own home or condominium, you would be well on your way toward building equity within that same five-year period. By choosing a fixed-rate loan program, you can have the comfort of knowing that your monthly mortgage payment will never go up. In fact, you would have the option of refinancing to a lower interest rate at some point in the future should interest rates drop, and this would cause your monthly mortgage commitment to go down.

In addition to building equity, there are tax advantages that come into play with home ownership. Depending on your tax bracket, owning a home is often less expensive than renting after taxes. Interest payments on a mortgage below $1 million are tax-deductible, and your mortgage consultant should help you evaluate the tax advantages of various loan scenarios, and share this information with your tax consultant to glean feedback on your behalf.

To find the loan program that is right for you, your mortgage consultant will need to evaluate your monthly household income, current assets and savings, as well as any monthly obligations you may have for credit card payments, car payments, child support, etc. These prequalification factors, along with the report of your credit score, will determine how much house you can afford and what interest rate you will pay for financing. It is also important to let your mortgage consultant know what your future goals are, because this will help narrow down which loan option is the best fit for your long-term needs.

There are many different types of loan programs available, including “low” and “no” down payment mortgage programs. These types of programs require the borrower to provide less than 3 percent of the loan amount as down payment. FHA lenders rule that the mortgage payment, including principal, interest, taxes and insurance (PITI) should not exceed 31 percent of your gross income, and the PITI plus other long-term debt (car payments, etc.) should not exceed 43 percent of your gross income.

Housing is an expense that takes a big bite out of the monthly budget. If you are a renter and feel that “home” is more than just someplace to hang your hat, think about the advantages of purchasing real estate. It may be time to take the step into building your personal net worth as a home owner.

Taum Hemmingsen is the owner/banker of Marketline Mortgage, LLC. Taum hosts Home Buyer’s Seminars which are open to the public on the first Tuesday of each month from 6:30p – 7:30pm. Seating is limited. To reserve your seat at the next event, call 480-967-8286 to RSVP and obtain a free copy of Taum’s Home Buyer Handbook.

Life After Bankruptcy

2011-02-25T10:34:00.000-08:00

Taum Hemmingsen, Owner/Banker
Marketline Mortgage, LLC

SCOTTSDALE, AZ – Bankruptcy is an uncomfortable subject for a variety of reasons. The most obvious is the potential havoc it can wreak on your finances. Running a close second is the negative stigma which is often attached to the process. This negativity is important to mention because strong emotions can sometimes lead to unsound financial decisions with devastating results.

Bankruptcy becomes a viable option for someone who is “upside down” in terms of cash flow. In other words, when a person has more money going out each month than coming in, bankruptcy should be considered if no reversal of this negative cash flow is within sight. The longer someone waits to explore the various options available, the more serious his or her situation may become.

One of the worst things people can do in this situation is to borrow more money to try and pay off their debts. On paper, this is clearly an unwise financial decision. In the real world, however, it is very common for individuals to pursue this strategy in an attempt to buy time and hold off on filing for bankruptcy. On the surface, this is certainly a noble notion; however it can often compound the problem and serves only to delay the inevitable.

For many homeowners in the midst of this upside down cash flow, speaking to a qualified mortgage professional is a much better option. An experienced loan officer can objectively look at your finances and help you determine if restructuring your mortgage would not only help, but possibly even alleviate any need for bankruptcy.

If bankruptcy is the only option, seek out a reputable bankruptcy attorney and credit counselor. A qualified mortgage specialist can provide references for you as well, as he or she works with these professionals on a regular basis. Reliable references are essential in this case because experienced professionals greatly increase the odds of a successful bankruptcy experience. It’s that simple.

When filing for bankruptcy, be completely honest and accurate regarding every aspect of your financial situation. This includes any changes to your income which may occur throughout the process. Bankruptcy is a federal procedure, adjudicated by real judges, and scrutinized by representatives who coordinate with the Department of Justice, the FBI, and the IRS.

Here are some additional steps you can take to make the bankruptcy process as painless as possible:

• Save all paperwork regarding your bankruptcy, and keep it organized. This will prove beneficial after your bankruptcy as you now have all of the pertinent information in one place. Also, be sure to write down your discharge date. It’s surprising how many people forget to do this.
• Establish a household budget. This can be accomplished in many ways, but there are several inexpensive computer programs available which do an excellent job.
• Throughout the bankruptcy, do your best to not only live below your means, but to save as much cash as possible. You never know what you may need it for once the process is completed.
• Be prepared for a barrage of junk mail. There will be sharks on the loose who are hoping to capitalize on your need for credit.

Tips for Rebuilding Credit:

• If you must buy a car, focus on transportation as opposed to style. Buy an inexpensive, used car, and try to get a loan for it. It’s a good idea to figure out what your budget allows in terms of a dollar amount first. This means obtaining financing prior to looking for a car.
• Get a secured credit card. Secured credit cards allow for the cardholder to deposit a said amount of money into an account, thus establishing the spending limit of the card. Missed payments result in deductions from the account. Some of these cards will reward responsible borrowers by upping the limit without an additional deposit. Some will even convert the account into a traditional credit card. (Be wary of offers of “easy credit” or any card which asks you to call a 900 number. You will be charged for the call.)
• Meet with a credit repair specialist. Not only can they help you clean up the damage to your credit report, they can advise you on specific ways to rebuild the credit you lost as well.

While it does take time, there is definitely life (and credit) after bankruptcy. Some mortgage lenders will even lend to you within a year or so after a bankruptcy. If you’re in serious financial trouble, the trick is to get the help and advice you need from professionals you trust.

Taum Hemmingsen is the Founder and owner/banker of Marketline Mortgage, LLC; Licensed Banker # 0911893. For a free copy of our Consumer Credit Scoring Booklet, contact Taum at 877-967-TAUM (8286).

Your Smartphone - Your Most Dangerous Possession?

2011-02-16T08:22:00.000-08:00

Forget what's in your wallet -- beware your smartphone. It's becoming one of your most dangerous possessions.
If your phone was stolen a few years ago, the thief could make prank calls and read your text messages. Today, that person can destroy your social life -- you said what on Facebook?! -- and wreak havoc on your finances.
Now that smartphones double as wallets and bank accounts -- allowing users to manage their finances, transfer money, make payments, deposit checks and swipe their phones as credit cards -- they are very lucrative scores for thieves. And with 30% of phone subscribers owning iPhones, BlackBerrys and Droids, there are a lot of people at risk.
"It's crazy the amount of information on that phone -- it's like carrying a mini-computer around with you, except that more people know the settings on their computer than they do on their phones at this point," said Nikki Junker, social media coordinator and victim advisor at Identity Theft Resource Center. "People are incredibly at risk as technology improves."
And mobile banking use is expected to soar by nearly 55% next year, according to recent data compiled by TowerGroup, a research firm for the financial services industry.
They found that while 17.8 million consumers used mobile banking last year, 27.4 million are expected to use it this year, and 53.1 million consumers are forecast to adopt it by 2013.
"We're now past the early adopters and starting to hit the early maturity phase," said George Peabody, director of emerging technologies at Mercator Advisory Group. "So much of our screen time is shifting from PCs to smartphones, and the banks want to be there and know they have to be there."
Google to power your mobile wallet?
In addition, the volume of mobile payments -- buying boots via Zappos iPhone app, for example, or paying bills -- is expected to climb to $214 billion by 2015, up from $16 billion in 2010, according to Aite Group, another financial services research firm.
And pay-by-phone is only going to get easier as our devices come embedded with Near Field Communication (NFC) devices that allow you to pay for your morning latte by waving your phone at the cash register.
Companies like Blaze Mobile and Bling Nation already let you pay major retailers by swiping your smartphone thanks to a sticker adhered to the outside of your phone. Meanwhile, an app created by mFoundry brings up an image of your Starbuck prepaid card barcode and lets you scan it in lieu of a credit card.
"A lot of players are now pushing to drive the contactless technology," said Gwenn Bezard, research director at Aite Group specializing in banking and payments. "While you're not going to wake up tomorrow and everyone is going to be using mobile payments, it's going to grow over the next years -- and from a very low base."
Watch your phone! Security attacks on smartphones climbed to an all-time high in 2010, according to AdaptiveMobile, an international mobile security firm. Specifically, attacks on Google's Android smartphones quadrupled, and smartphones running Java-based applications jumped 45%.
"Bad guys are following where the people are going -- and people are going to smartphones," said Peabody. "As smartphone prices continue to decline and even more people get them, that's definitely the new place for bad guys to go."
While storing a password and keeping your phone locked is a good start, it's not going to protect you from professional fraudsters.
"Don't think that having an initial password set on your phone can stop people from getting in there," said Junker. "It's a very low level of protection -- you can even find 30-second videos on how to crack smartphone passwords on YouTube."
Web: More dangerous than ever
If you use mobile banking or make online payments frequently, you should invest in anti-virus protection and check with your bank about any security or identity theft protection features that you can enable.
Most smartphones also offer remote wipe-out services -- like MobileMe for the iPhone -- that automatically erase the information on your phone if you claim it as lost or stolen.
If you bank with your phone by accessing its website rather than opening an app, be extra careful when typing in the address. Some identity thefts create domains with the same address as major banks with two letters switched in hopes a consumer will accidentally land on the site and enter their username and password, said Junker.
And make sure you immediately log out of any bank apps or sites where your financial information is stored as soon as you're finished. While your identity is still at risk if your phone is stolen, this will buy you time to wipe out your information as soon as you realize it's gone.

Source: Blake Ellis www.money.cnn.com

YOU Magazine

2010-11-09T10:47:00.000-08:00

2010-08-11T15:27:00.000-07:00

FHA Premium Increases Will Impact Borrowers' Ability to Qualify
(Effective date October 4, 2010)

FHA is raising its annual mortgage insurance premium charges.

A contract must be in place and an FHA case number assigned by September 7 in order to avoid the MIP increase.

What does this mean for borrowers?

Some borrowers may no longer qualify because monthly payment will be increasing.

Example of FHA increase for $200k loan @ 5% - 30 year fixed

.55% Today $204,500 P/I $1098 MI $94 = $1192

.90% 10/4 $202,000 P/I $1083 MI $152 = $1235 (+$43)

1.55% Future $202,000 P/I $1083 MI $261 = $1344 (+$152)

For any FHA borrower who is considering buying, they may be better-able to qualify and will save money if they buy prior to this new rule going into place.

Please call me if you have any questions.

Help for Those Struggling to Stay in Their Homes

2010-08-05T12:52:00.000-07:00

Avoid foreclosure. Get the help you need.
Short Sale and Foreclosure Assistance from Fannie Mae.

If you or anyone you know is struggling with a mortgage payment or facing foreclosure, check out this new site from Fannie Mae. It helps homeowners get information and help before it’s too late.

www.knowyouroptions.com

 Free & simple to click through
 Walks you through options of staying or leaving
 Provides short and long-term options & solutions
 How to be prepared to talk to your mortgage company
 Who are housing counselors are in your area
 Hear from others in similar situations who had success
 How to avoid scams

Please pass this on...This site can really help people in this situation get information, ease their frustration and actually get help.

Taum Hemmingsen
Mortgage Banker

Refinancing Mortgage Often Smart - Even if You Have to Pay

2010-07-27T12:39:00.000-07:00

Many homeowners are looking into refinancing as mortgage rates have fallen to record lows.

At the height of the housing boom, refinancing was doubly rewarding: You could lower your monthly payment and extract some cash to spiff up the kitchen.
With mortgage rates at record lows, refinancing still offers the promise of lower monthly payments. But forget about that Sub-Zero refrigerator. Instead of taking cash out, you may have to pay cash upfront when you refinance.

Here's why: If the loan-to-value ratio of your new loan is above 80%, a lender will probably require you to pay private mortgage insurance, which could wipe out the benefits of reducing your interest rate. You may also be ineligible for the lowest rates.

Suppose, for example, that you bought a home several years ago, when fixed mortgage rates were 6%. You paid $200,000 and put $10,000 down. You currently owe $180,000, but your home's value has declined to $160,000. To refinance to a lower rate and avoid private mortgage insurance, you'd probably need to put in $25,000 to $30,000, says Bob Walters, chief economist for Quicken Loans.

"You're going to pony up what is probably the equivalent of another down payment," says Keith Gumbinger, vice president of HSH.com, a mortgage publishing firm.

In the first quarter, 18% of borrowers who refinanced paid cash as part of the deal, according to Freddie Mac. Cash-out borrowers represented 28% of refinanced loans. Over the last two quarters, the percentage of cash-out refinanced loans hit the lowest level since Freddie Mac started analyzing the loans in 1985.

As long as rates remain at record lows, the trend toward cash-in refinances will likely continue, says Frank Nothaft, chief economist for Freddie Mac. Freddie Mac will release figures for the second quarter on Wednesday.

A good investment?

Interest in cash-in refinancings isn't limited to homeowners with unfavorable loan-to-value ratios, says Anthony Hsieh, chief executive of LoanDepot, an online mortgage lender. Most of LoanDepot's cash-in borrowers have plenty of equity, and are primarily interested in accelerating the payoff of their loans, he says. Many are shortening their 30-year loans to 20, 15 or 10 years, he says.

Often, these are people who didn't lose their jobs or homes during the downturn, and still have good credit scores, Hsieh says. They have some extra money, but don't trust the stock market, and are tired of earning abysmal rates on low-risk investments.

"You have consumer psychology coming out of a very challenging recession, low (mortgage) rates, and a lack of options for putting your money to work," he says. "All of that together created a perfect situation where cash-in really makes sense."

But before you write a check to a lender, sit down with a calculator and figure out whether the savings from a cash-in refinancing are worth the cost. What you need to consider:

•How long you plan to be in your home. With a conventional refinancing, borrowers often recover their upfront costs in a few months. But with a cash-in refinancing, it could take you much longer to get your money back, Gumbinger says.

Most borrowers will need to stay in their homes for at least five years before the investment starts to pay off, he says.

•Where you'll get the money. If you have money in a bank account earning 1% or less, you could earn a better return by buying down your mortgage rate, Walters says. Suppose you have a 6% rate on a $200,000 mortgage and pay $20,000 to lower it to 4.75%. You'll save $2,300 a year, which is a much better return than you'll get from your bank, Walters says. "If you have the means, the math makes a lot of sense."

But having the means to pay down your mortgage is key. You shouldn't deplete your emergency fund to lower your mortgage principal, Hsieh says. Lenders are much more reluctant to approve cash-out refinanced loans than they were a few years ago, so you may not be able to get that money back out if you need it, he says.

And while your home may look like a safer place to invest than the stock market, buying down your mortgage isn't risk-free, Gumbinger says. If the value of your home declines and you have to sell, the amount you spent to buy down your mortgage could disappear.

"Are you going to be there long enough at the very least to get your money back?" he says. "That's your primary consideration."

By Richard M. Hackett for USA TODAY

Tax Credit Extension - the Latest

2010-07-08T11:47:00.000-07:00

What Good is an Extension without a Loan Approval?

The deadline for the homebuyers "tax credit" due to expire June 30 has been extended to September 30. Not only is the extension great news, but interest rates have fallen over .375-.50% since the end of April according to Freddie Mac.

This could effectively reduce a buyer's monthly payment over $600-800 a year on a $200,000 30-year fixed rate loan!

Unfortunately, for the estimated 180,000 homebuyers this extension impacts, their closing was held up by the lender. Some of the reasons may well be legitimate and some unfortunately may not be.

If you know someone who has had difficulty getting their loan closed, call me. Just because someone has been unable to get a loan closed so far does not mean that it may not be able to close. What's more, we closed a lot of loans in May and June for people who submitted their application after the Tax Credit's April 30th contract deadline.

I'll review anyone's situation and offer my opinion on what their options might be - no cost or obligation.

NOTE: the Homebuyer's Tax Credit extension only applies to people who were under contract by the initial April 30th deadline. Homebuyers who entered into contracts after April 30th remain ineligible for the tax credit.

REALTORS - GREAT NEWS ABOUT TRAFFIC TO YOUR WEBSITE

2010-07-01T10:13:00.001-07:00

New Search Engine Optimization Technology Ready to Revolutionize Real Estate Industry

The real estate industry has seen a huge number of changes over the past 20 years with the advent of pagers, cell phones and the Internet, and a new one coming out now for search engine optimization will do the same thing with how agents market themselves online in 2010 and beyond.
Since 1999, the real estate industry has seen less than 1% of home sales come from the Internet to over 80% in the last 2 years. The changes keep coming, and real estate agents and brokers are doing their best to keep up by creating websites and search engine rankings to get to where the buyers are coming from.
Agents spend thousands of dollars and more to pay for SEO work and marketing to get first page rankings for a few major keywords in Google, Yahoo and other major search engines. Pay-per-click offers some traffic, but the costs can get expensive, and many agents are not happy with the results they get.
All of that will be changing very soon as a new IDX/MLS search engine marketing system begins to hit the real estate industry over the next 12 months. It is a new "SEO" technology that will revolutionize the real estate industry one more time and enable real estate agents in the middle to low productivity class to compete with the "whales."
What is it?
It is a technology that breaks down an agent's IDX feed and creates thousands of Web pages all targeting long tail keywords and adds them to their website.
Why is it powerful?
Because over 70% of all keywords typed into Google looking for real estate are long tailed keywords. Long tail keywords are normally 6-7 plus word searches for real estate like:
"2 bedroom condo for sale in la jolla"
"gated home for sale in del mar"
"3 bedroom oceanfront condo for sale san diego"
Compared to short tail keywords where most agents are bunched up like:
"san diego home for sale"
"san diego real estate"
"san diego condo for sale"
This technology first grabs up hundreds of long tailed keywords and then begins to also pull short tailed keywords over time.
When agents start getting hundreds of Web pages ranking in Google, they are going to start seeing much better results in the form of home sales, plus the long tailed keywords normally convert into a better quality lead since the searches are much more specific.
Why will it revolutionize the real estate industry?
1. Because it is going to put agents using it at a huge advantage against agents and brokers who do not. Agents who have hundreds of pages ranking in Google will start getting better results than agents with a handful or couple of keywords. It is no longer about who can spend more, but rather where you are spending your marketing dollars that matters. The costs are low enough so anyone can afford it, which levels out the playing field for agents.
2. It is a technology that goes after where the vast majority of searches are being done online (long tail keywords) -- and it is very affordable. After reviewing data last week from Google Analytics, the total number of long tailed keyword searches amounted to 80% of the total searches being done. Most agents and SEO experts do not realize how many searches being done are coming from these long tailed keyword phrases. Considering the fact you can create a couple thousand pages and target hundreds of keywords for $600 makes this affordable to the everyday agent looking for ways to maximize their marketing budget.
Also consider the options that most real estate SEO companies offer now which is "spend $2,000 to $5,000 for search engine optimization and get 3-5 keywords on the first page of Google." The cost is much cheaper than traditional SEO packages, and the results are greater because relevant data from the listings in the MLS is being used to provide the content and pages are not created from scratch. You are not just ranking in Google for 3-5 keyword phrases but rather "hundreds" of keyword phrases, which when added together become significant.
The long tailed keyword pages will eventually get rankings for short tailed keyword phrases after doing long term link building. This is a much cheaper way to get results than what the vast majority of companies are charging.
3. This is a low cost form of SEO which targets hundreds of keywords and creates a massive blanket of Web pages which are attached to the agents existing website. You keep the website you have and add thousands of pages to it. The option for starting with a new website is available as well, but many agents have had the same website for years and are happy with it, so this creates a cutting edge way to add to it and keep building it out.
How many companies offer this type of service?
The fact is there are a few companies who have versions of this technology, but they either charge $5,000 for the build out or they simply take the MLS data and paste it on the Web pages. This is not as effective as re-writing all the title lines and anchor text for each listing and re-classifying it for multiple categories.
This new technology is different because it re-writes all the title lines and anchor text, and it classifies the listings according to how they are being searched for. This puts the content on static Web pages for search engines while still staying compliant with the MLS boards on how the information can be displayed.
It updates all the pages and listings as the MLS data updates and is able to transfer ASP data into static feed data and create the static feed data on the fly for anyone who is tech-savvy. If you do not understand that, do not worry since all you need to know is that 1) it works very well and 2) it is cheap to get started. A couple thousand Web pages can be created for $600.
Because most companies simply copy the data, they can only offer the content to one agent per market place because, if they build it out for anyone else, it would be duplicate content. This new technology can spin and re-write the data so that Phoenix -- as an example -- could have 3,000+ agents all with different Web pages and content.
Not MLS limited -- What do you mean?
The fact is that other companies who offer similar versions are limited to offering this service only to areas where they can get an MLS feed. With over 900 MLS boards around the country, this is very limiting since each board has different costs and access to vendors making this a real big pain to deal with. This technology can use the MLS feed when available or use Google Base, if the MLS provider is too expensive or difficult to work with. This means that this service is available anywhere in the United States and Canada.
A few large website companies are now looking at using this technology for their clients since many website companies need something to keep their cancellation rates low and also something to give them an edge over their competition. Agents who are tired of pay-per-click and poor results with other forms of marketing are starting to invest in setting up these massive Web page grids and pull in more buyers off the Internet.
The sooner you can put it to use, the faster you will see the power of this technology and how effective it is as a low cost way to target Internet buyers and traffic and start expanding the number of home sales and search engine exposure you are getting. For more information on this new SEO service for real estate agents and mortgage lenders, check out the Real Estate Marketing Nerds website or e-mail info@multimediaicon.biz.

By: Sean Callahan, www.rismedia.com

2010-06-24T12:38:00.000-07:00

Why Housing is Headed for Second-Half Headaches

Although home sales increased more than expected in April, real estate experts are expressing concern that the market may face renewed downward pressure in the second half of the year.
The National Association of Realtors said recently that sales of previously owned homes in April rose nearly 8 percent from March and nearly 23 percent from a year earlier. Even more encouraging, the figures showed that the median price of an existing home hit $173,100 in April. That's up 4 percent from April 2009, and "the best price gains since mid 2006," David Resler, the chief economist at Nomura Securities, said in a report.
The optimistic looking data reflects a number of favorable conditions in today's market. Home prices have fallen precipitously from the peaks reached during the housing boom, helping restore affordability to many markets. Rates on 30-year fixed mortgages remained in an attractive range in April, averaging just above 5 percent for the month. Meanwhile, recent government data suggests that the labor market may finally be recovering from a protracted period of job losses.
Much of the improvement was rooted in the looming expiration of Uncle Sam's home buyer tax credit, which offered qualified buyers up to $8,000 in incentives as long as they had a sales contract signed by April 30 and closed the transaction by the end of June.
Since the existing home sales report reflects completed transactions, the data is expected to remain firm in the near term. "The expiration of the homebuyer tax credit likely boosted sales in April, and will continue to do through mid-year, when transactions must be closed to qualify for the homebuyer tax credit," economists at Goldman Sachs said in a report.
Many economists, however, expect sales to slow now that the tax credit is expired. That's because the credit likely helped pull forward sales that would have taken place in later months, with buyers scrambling to take advantage of the government incentives.
The market's recent price gains could soon reverse course as well. The backlog of unsold homes increased in April, with the months' supply of unsold inventory hitting 8.4, up from 8.1 in March. (These figures are not seasonally adjusted.) Ian Shepherdson, an economist at High Frequency Economics, suggests that the recent improvements in real estate market conditions may have convinced more sellers to list properties. "Overall supply is now rising quite quickly as would-be sellers see a chance to move their property," Shepherdson said in a report. "We remain nervous that this wave of supply will push prices back down in the second half of the year."
For his part, Patrick Newport, an economist at IHS Global Insight, says the tax credit's expiration will lead to a "mid-year plunge" in home sales. "Our view is that sales will start growing sustainably as the job market improves."
So while lower prices, cheap mortgage rates, and government tax incentives created some compelling reasons to jump into the real estate market, Mike Larson of Weiss Research points to a handful of additional forces working to sandbag a vigorous housing recovery. "The backlog of distressed homes remains extremely high. Uncle Sam is just about the only guy making or backing home loans. And we're certainly not seeing a rip-roaring rebound in the job market," Larson said in a report. "Under those conditions, we can still get an anemic recovery in housing -- but it won't be worth breaking out the champagne over."

By: Luke Mullins, www.usnews.com

GREAT DEALS IN HOUSING BUT POTENTIAL SPEED BUMPS AHEAD

2010-06-22T14:40:00.000-07:00

Taum HemmingsenOwner/BrokerMarketline Mortgage, LLCPhone: (877) 967-8286
Fax: (866) 699-1939taum@marketlinemortgage.com www.marketlinemortgage.com

Great Deals in Housing But Also Potential Speed Bumps Ahead

If you were offered the chance to buy dollars for $0.70 a piece, how many would you buy? When you compare today's home loan rates to the average in effect for the last 10 years, that is approximately what you are paying. And given lower home prices, there has never been a better opportunity to buy a home than today.
This month, YOU Magazine turns to contributing editor and national mortgage expert Jim Sahnger to learn why buying now is still a great decision and what you need to look at in your market to gain confidence. Sahnger will also share with you a new potential pitfall to the mortgage process to prevent your mortgage application from blowing up just prior to closing.
Home Affordability: The Key to Your MarketMark Zandi, Chief Economist for Moody's Analytics stated recently in an audio interview with MarketWatch Radio that he has never seen a better time to buy a home, with low interest rates and affordability being one key component.
When people decide to buy a home, the monthly payment is a crucial factor. Affordability is a function of home price, interest rate and down payment.
Conservative underwriting for mortgage payments state that borrowers should allocate no more than approximately 30% of their income for a house payment. Looked at from another perspective, this means if your monthly income is $4,000, you should keep your mortgage payment under $1,200 a month.
You also want to keep in mind that your total monthly debt payments should not exceed 41% of your income. While exceptions will sometimes allow you to exceed that number, you don't want to be stressed out, feel like you're married to your home or miss out on opportunities for investments in a 401K or retirement account.
That said, many experts have said that when median home prices exceed median incomes by three times in a market, then that market could be viewed as a high cost market. As an example, median household income in the U.S. is approximately $51,233 and the median home price in the U.S., according to the most recent statistics released from the National Association of Realtors, is $173,100.
Based on this one statistic, it could be reasoned that housing overall may be somewhat unaffordable. However, you also have to take into consideration what the monthly payment would be based on existing interest rates.
Assuming a homebuyer puts 10% down on a median home price, the monthly payment, assuming the cost of property taxes and insurance at 1% and .5% respectively, would be 28.9% of income, well within reason.
Another consideration should be the cost of renting a home when compared to a house payment for the same type of home. When the cost to rent is similar to the monthly cost to own or more, housing may well be affordable for that particular market.
Sahnger offered this comparison for homes in an area where he works. "When preparing to speak at a housing rally in South Florida, I went online to look at what types of homes were on Craigslist for $1,000 a month to rent. I found one home that offered 1,300 square feet, no garage and no pool where a home with a similar mortgage payment offered nearly 2,000 square feet of living area, a pool and two car garage in a nicer area." This is certainly one example where the cost to own is less than the cost to rent.
One other factor Sahnger mentions is that when the tax deductible portion of the payment is taken into consideration, the after tax mortgage payment was approximately 15% less, making the cost to own even more affordable when compared to renting.
Credit Reports: When One May Not Be Enough
Effective June 1, Fannie Mae has instructed lenders that they should adopt a new policy that could involve a second review of an applicant's credit report just prior to closing. When reviewing defaulted loan files, they have determined that the credit profile of a borrower may have changed from the time of the initial review of the credit report and at the time of closing.
The potential impact to a borrower who has utilized credit to make significant purchases after the initial credit report could include a delay in closing, increase of closing costs and/or interest rate or a decreased loan amount. In the worst case scenario, it could even result in a loan being denied, even after an original approval had been granted.
In order to eliminate any possibility of potential problems before closing, anyone in the application process should use credit sparingly and make sure they adhere to the tips provided below by credit expert, Linda Ferrari of Credit Resource Corp. For more tips on what you should not do regarding credit during the mortgage application process, contact the professional who supplied you with this month's issue of YOU Magazine.
Top 5 Tips for Preserving Your Credit and Mortgage Application
Don't do anything that causes a red flag to be raised by the scoring system.
Don't apply for new credit of any kind.
Don't pay off collections or charge offs.
Don't max out or over charge on your credit accounts.
Don't consolidate your debt onto one or two credit cards.
This list is not comprehensive but does give you a peek into situations that could create issues and could also be contrary to some ideas you have read previously.
Great Opportunities When Offered Should Be Acted Upon
The one key component in home affordability that is at greatest risk today is interest rates. Many experts have stated that interest rates should be higher than their current levels, in some cases a lot higher.
One point to remember is that every 1% increase in interest rates decreases the buying power of an individual by 10% in home price. This means that if you qualify for a home priced at $200,000 today and interest rates increase 1%, the amount you could qualify for would be reduced to approximately $180,000 to maintain the same payment.
If you could benefit from moving to a new home, don't let this opportunity pass you by. Home prices are increasing in most markets and combined with the risk of increasing interest rates, your time to get the home you want could pass you by.
For those people who haven't refinanced in the last 18 months, calling your mortgage professional could provide you with the opportunity to either cut your mortgage payment or save a lot of money by reducing the term of your mortgage to a 15 or 20 year fixed rate.
Call the professional who supplied you with this month's issue of YOU Magazine to determine what the best path is for you. The money you may save could help fund anything from a vacation to a college plan to your retirement.
You are receiving a complimentary subscription to YOU Magazine as a result of your ongoing business relationship with Taum Hemmingsen. While beneficial to a wide audience, this information is also commercial in nature and it may contain advertising materials.

Taum HemmingsenMarketline Mortgage, LLCBy Appt.: 7150 E Camelback Rd, Ste 444, Scottsdale, AZ 85251
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We are Still Funding USDA Loans - No Money Down - No Funding Delays

2010-05-14T21:54:00.000-07:00

WE ARE STILL OFFERING USDA LOANS WITHOUT FUNDING DELAYS
The demand for the USDA loan program (no money down option) has hit record-setting levels.
As a result, most lenders are not offering this program currently.
We are still able to offer and close this loan program without any delays in funding.
The guarantee fee effective immediately is going from 2% to 3.5% for purchases.
Call me today regarding clients who would like this program.
Taum – 480-967-TAUM (8286)

YOU CAN BANK ON TAUM!

2009-09-22T16:50:00.000-07:00

Getting a loan used to be pretty quick, easy and affordable, right? But given mishbehaviors of many on Wall Street, in banks and in brokerages, a few bad apples ruined it for the whole.

The result? Getting a loan is lengthy, difficult, confusing and more expensive. To combat today's slow, painful, arduous financing market,

Marketline Mortgage has become a mortgage banker!

How does this benefit you?

We can do loans in all states
We can control a few more pieces of the process to speed it up
We can keep costs down for you
We can help you get financing

We still provide personal service too.

Reach Taum directly - 877-967-TAUM (8286)