Prestige Family Mortgage Blog

(2008 NAR Survey Results)

The blog entry you are about to read is from data interpreted from the NAR’s Profiles of Home Buyers & Home Sellers, 2008. While I list some of the stats you are about to read,  I have interpreted the “who, what, where and how”.

A little bit about the survey…it’s based on 10,053 responses and home purchased from June 2007 to June 2008. Since it ended June 2008, I believe that there will be even MORE first-timers entering the real estate market!

• First-Time Home Buyers Made up 41% of All Home Purchases

While it has increased 2% over last year, regionally, the Northeast has increased the most with 46% (or almost ½ of all homes being sold to FTHB); 41% Midwest; 39% South; 41% West. Four out of every 10 buyers fit into this category—FTHB need more homebuying education and the way a lender or real estate agent interacts with them will be different than a homebuyer that has experience buying a home.

• Living Arrangements Prior to Buying Their First Home

75% of FTHB lived in apartment complexes or rented a home or condo prior to purchasing. It’s unchanged from 2007. 19% lived with parents prior to purchasing.

• Marital Status of First-Time Home Buyers

49% Married Couples

12% Unmarried Couples

24% Single Females

12% Single Males

These numbers only vary 1 per cent over 2007 numbers. Notice that single female buyers are double the percentage of single males and half of married couples. FTHB seminars are a way for FTHBs to learn about the home buying process and possibly meet a reliable real estate agent or lender.

• Medium Age of First-Time Home Buyers

54% - Age 24-35

20% - Age 35-44

Think Gen X here! They are independent, blunt and skeptical!

• Average Income of First-Time Home Buyers

Single women earn 13% less income than single males, but they purchase twice as many homes.

• Purchase Price Range

16% - Price Range $75K to $100K

39% - Price Range $100K to $175K

Some areas of country are more affordable than others—however based on this info, over half of FTHB are more likely to purchase a home $175K or below.

• Moving Distance From Current Residence

FTHB move an average distance of 13 miles from their previous residence (apartment or parent’s home).

• Information Sources PRIOR to Buying Home

2007		2008
87%	Internet Search Prior to Purchase	94%
56%	Virtual Tour	63%
49%	Newspaper Ads	45%
44%	Open Houses	48%
30%	Homes Magazines	30%
9%	TV	9%

Without a doubt, the Internet plays the most important role in the first steps that FTHB take when looking for a home.

• The Internet, Virtual Tours and Social Networking

Added to the survey questions in 2008 was the FTHB use of social networking to find homes and real estate agents. 42% of buyers, age 18-24 uses Social Networking sites EVERY DAY versus 19% of buyers, ages 25-44. However, in the 25-44 age group, another 14% (total of 33%) use it several times a week.

• Length of Time to Buy Home

• Financing The Home Purchase

Inside the White House

Top stories from first 100 days

Issues and agenda

 

 

Obama approved a significant troop increase for Afghanistan, saying it was "necessary to stabilize a deteriorating situation in Afghanistan." full story

• Afghanistan: Can Obama succeed in the 'land of the unruly?'
• Aides: Banking, health care next on White House agenda
• Clinton tours Asia on first trip as top U.S. diplomat
• Border fence a dividing line in immigration debate
• Commentary: Don't let White House shakeup hurt our security
• Will infrastructure stimulus create jobs?
• How a 'perfect storm' led to the economic crisis
• A look at modernizing health care
• Flashpoints for Obama's crisis room

(CNN) -- President Obama on Tuesday outlined an ambitious agenda that requires "significant resources," even as he aims to halve the deficit by the end of his first term.

President Obama says the United States will overcome its current economic struggles.

In his first speech to a joint session of Congress, Obama said it's time to act boldly not just to revive the economy, but "to build a new foundation for lasting prosperity."

"While the cost of action will be great, I can assure you that the cost of inaction will be far greater," he said.

The president struck an optimistic tone, asserting that "we will rebuild, we will recover, and the United States of America will emerge stronger than before."

Obama focused on the three priorities of the budget he will present to Congress later this week: energy, health care and education.

The president said he sees his budget as a "vision for America -- as a blueprint for our future," but not something that will solve every problem or address every issue. Watch Obama lay out his plan to "save our children from debt" »

"It reflects the stark reality of what we've inherited -- a trillion dollar deficit, a financial crisis, and a costly recession," he said.

Obama said his administration already has identified $2 trillion in government spending cuts that can be made over the next decade. See video highlights of the speech, issue by issue »

The president touted the $787 billion stimulus plan he signed into law last week, saying it will invest in areas critical to the country's economic recovery. He also made bold promises for what these investments will achieve.

Obama predicted that because of the recovery plan, the United States will double its supply of renewable energy in the next three years.

He also said the country will invest $15 billion a year to develop technology for green energy. Grade Obama's speech »

Louisiana Gov. Bobby Jindal, who delivered the Republican response to Obama, blasted the Democrats' stimulus plan, saying, "while some of the projects in the bill make sense, their legislation is larded with wasteful spending." Read: Jindal calls stimulus "irresponsible"

Obama also pledged a "historic commitment" to health care and said the recovery plan could lead to a cure for cancer. He also promised the "largest investment ever" in preventive care.

On education, Obama set a goal of having the highest college graduation rate in the world by 2020.

He pointed to the billions for education -- from early childhood education expansion to college-loan programs -- in the economic stimulus package to ensure that every child has access to education "from the day they are born to the day they begin a career."

Obama also said his budget will pay for more soldiers and Marines, increase their pay and expand veterans health care and benefits. iReport.com: Did Obama really deliver?

Obama said the recovery plans already in the works are immediate steps to revive the economy in the short-term, "but the only way to fully restore America's economic strength is to make the long-term investments that will lead to new jobs, new industries, and a renewed ability to compete with the rest of the world."

"Slowly, but surely, confidence will return, and our economy will recover," he said, asking Congress to join him in "doing whatever proves necessary because we cannot consign our nation to an open-ended recession."

Obama promised to reform the regulatory system to "ensure that a crisis of this magnitude never happens again."

The president also signaled that he was willing to take on entitlements, saying that Congress must take on the growing costs of Medicare and Social Security.

Obama described the nation's financial woes as a "reckoning" for poor decisions made by both government and individuals. Watch what Obama says about the "day of reckoning" »

"A surplus became an excuse to transfer wealth to the wealthy instead of an opportunity to invest in our future," Obama said.

"Regulations were gutted for the sake of a quick profit at the expense of a healthy market. People bought homes they knew they couldn't afford from banks and lenders who pushed those bad loans anyway. And all the while, critical debates and difficult decisions were put off for some other time on some other day."

Noting that is easy to "become cynical and doubtful," Obama said he has learned that "hope is found in unlikely places."

Obama avoided lofty rhetoric and instead used examples of specific people to personalize his points.

He mentioned Leonard Abess and Ty'Sheoma Bethea -- two of the Obamas' invited guests. Read: Who did the Obamas invite?

Abess is a bank president from Miami, Florida, who reportedly cashed out of his company, took a $60 million bonus and distributed it among people who had worked for him.

Bethea is an eighth-grade girl from South Carolina who, in a letter to lawmakers, asked for help for her school and said, "We are not quitters." Watch Obama talk about Bethea saying "We are not quitters" »

While the economy was the focus of the speech, Obama also touched on foreign policy.

The president said he'll soon be laying out specifics on how to win the war in Afghanistan and end the one in Iraq.

"We are now carefully reviewing our policies in both wars, and I will soon announce a way forward in Iraq that leaves Iraq to its people and responsibly ends this war," he said. Watch the entire speech »

Meanwhile, he said, both Afghanistan and its border with Pakistan will remain a key focus.

Because Obama's presidency is just a month old, the speech is not technically considered a State of the Union address. The annual State of the Union speech is delivered in the House of Representatives before members of both the House and the Senate as well as the justices of the Supreme Court, the president's Cabinet and international dignitaries.

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Consequence of Turning Fifty: Empty Nest?

The emotions of empty nest kick in long before they actually leave, but when your kids leave home, the reality finally sets in. You can tell because you're really missing the things that drove you nuts about your kids...the bedroom that looked like an ongoing ransacking, the empty milk carton sitting in the refrigerator, the last of your favorite cookies you thought you had hidden gone missing. How did this happen? Suddenly you go from a frenzied whirlwind of learning to drive, first date, first prom, college visits and applications, sports, music, summer jobs, heartbreaks...the roller coaster ride is fast and furious. Once it stops, the silence can be deafening, bringing the reality of women's midlife crisis and menopause home.

Different parents cope differently with their kids leaving home. Some baby boomer women may feel as though they have no purpose, as though it's a sign of a sudden onset of aging...life is over! For some women, turning fifty and the idea of empty nest causes them to embrace the recognition of a new time in life, and off they go! Sell the house and buy a one-bedroom condo before they come back! Sound like extremes? Well, they are, but maybe not as unusual as you might think...aging gracefully is a state of mind!

For what it's worth, empty nest is not in your head. The feelings are real -particularly when you hit that 50-year milestone birthday - so there's no reason to think you're unique or different or missing something. It's easy to fall into a pit of despair (a bit dramatic perhaps, but you get the idea!) when your kids leave home. For those who are really struggling, the biggest danger is not recognizing the fear and succumbing to isolation. Identifying and addressing empty nest syndrome is the first step in dealing with it.

The first order of business is to face your fear head on and then take action. Don't sit around...do something. From fear comes action, and from action comes change:

• Start taking regular walks during what would have been your family dinner hour...if your spouse joins you, all the better! Health and fitness for a woman turning fifty is important for mind AND body!
  
• Sign up for a class - belly dancing, an author's group, a computer class or any type of continuing education.
  
• Volunteer! The best way to wean yourself from your own misery is to help someone else. It works - really.

If you have a spouse, it can be a difficult time of adjustment for baby boomer women. Suddenly you have only each other to talk to, to spar with, to bounce your thoughts and emotions off of. With the kids leaving home, sometimes it's easy to lash out at the person closest to you when you're feeling lonely or fearful. In many very normal families, parents haven't had a meaningful conversation with each other that didn't involve the kids in years. Even if it was career related, or involved household issues or moving, the family is always the main focus in the back of your mind. Having the kids around may sometimes have played as a buffer, either forcing you to compromise with your spouse, or pushing you to suppress some strong opinions or emotions that you otherwise might not have. Life after menopause is definitely an interesting and exciting time.

No matter what, baby boomers, the most important thing to remember is that empty nest is temporary! How many times have you heard other people roll their eyes and say, "Oh, don't worry, they come back!" Whether they do or not, it's a journey, and you will adjust and you will go on with your life. Remember - 'fifty is the new forty' - enjoy it!

(By the way - the first time you pull out your cell phone to call your kid and see how his or her first college cafeteria dinner was, think about your own parents. How often did you talk to them when you went to college? Once, twice a week, maybe? No cell phones or computers, no instant communication at all. Hmm...maybe it isn't so bad after all!)

Feel free to Contact Us with any questions or comments.

Michael Torres of Prestige Mortgage nominated...  by Bend OR GLBT Community

In Oregon and Washington more gay, lesbian, bisexual and transgender couples turn to prestigefamily.com to obtain their mortgage financing than any other company in the greater North West.

Michael has been offering free advice for credit repair, credit scoring, pre-qualification, NOLA (notice of lender approval), residential mortgage financing, commercial mortgage financing, for more than 12 years in Oregon and Washington.

Michael has a 100% success rate facilitating the appropriate financing GLBT customers are looking for. He has a winning proven track record. Michael Torres offers excellence in service for Oregonians and Washingtonians alike. Michael Torres is an expert in the Bend/Central OR, Portland OR, housing markets... for those looking to relocate to these areas he has proven himself invaluable.

If you and your family are looking to purchase or refinance a home anywhere, you will be in good hands with Michael. With 30 years in Oregon his network of professionals is knowledgeable, honest and ready to serve you. From schools, shopping, medical care facilities, insurance agent, realtors, builders, doctors, plumbers, mechanics, lanscapers, handymen, you name it... Michael is your resource.

You can expect fast personalized service with attention to detail every time, no exception. You will know what ereas offer more or less of what you are looking for, and what to expect of your investment no matter where you choose to call home. Never have we seen someone offer so much diligence achieving much more than a clients expectations, so often!

When you are looking for a professional you can trust to turn to for sound financial and credit advice, turn to no other than Michael Torres of Prestige Home Mortgage Services. A hands down winner.

Bend Source Zine

 

Argentina	Australia	Austria
Azerbaijan	Belgium	Brazil
Canada	Chile	Costa Rica
Croatia	Cuba	Czech Republic
Denmark	Dominican Republic	Egypt
England	European Union	Fiji
France	Gay Kingdom	Germany
Greece	Iceland	India
Ireland	Italy	Japan
Malta	Mexico	Micronesia
Netherlands	New Zealand	Panama
Poland	Portugal	Russia
Scotland	South Africa	Spain
Sweden	Switzerland	Tahiti
Tanzania	United Kingdom	United Nations
United States	Wales

Hope For Homeowners

MESA, Arizona (Reuters) – U.S. President Barack Obama pledged up to $275 billion on Wednesday to help stem a wave of home foreclosures, part of a broad effort using massive sums of government money to push the country out of recession.

Up to 9 million families would be given the chance to refinance their mortgages under the plan, administration officials said. He unveiled the plan in Arizona, a state hard hit by home foreclosures.

Obama, who a day earlier signed into law a landmark $787 billion economic stimulus package, said his housing plan would counter a cycle of mortgage defaults, plummeting home values and financial-market turmoil.

"A lost home often begins with a lost job. Many businesses have laid off workers for a lack of revenue and available capital. Credit has become scarce as the markets have been overwhelmed by the collapse of securities backed by failing mortgages," Obama said in a speech at a high school in Mesa.

"In the end, the home mortgage crisis, the financial crisis, and this broader economic crisis are interconnected," he added.

The plan goes much further than previous government efforts to address the foreclosure crisis. In a break from past programs, it would help borrowers who have not yet missed a monthly mortgage payment but are straining to keep up.

Still, financial markets reacted skeptically to the plan.

U.S. stock prices dipped after government data showed a drop in housing starts and permits to record lows, portending more weakness in the housing market despite Obama's plan.

The U.S. Federal Reserve cut its 2009 economic forecast sharply, saying the economy was likely to shrink by between 0.5 percent and 1.3 percent this year, weighed down by rising unemployment, frozen credit and the housing crisis.

FANNIE AND FREDDIE

The home foreclosure plan features a $75 billion fund made up of $50 billion from the $700 billion financial bailout fund approved last year and up to $25 billion from housing finance firms Fannie Mae and Freddie Mac.

It also draws on up to $200 billion authorized by last year's housing bill.

"All of us are paying a price for this home mortgage crisis. And all of us will pay an even steeper price if we allow this crisis to continue to deepen," Obama said.

The plan will enlist Fannie Mae and Freddie Mac to do much of the heavy lifting.

Up to 5 million homeowners still making payments who cannot qualify for conventional refinancing because their home values have dropped could refinance through Fannie and Freddie.

Separately, up to 4 million "at risk" borrowers in danger of foreclosure could get payments reduced through modifications jointly paid for by lenders and the Treasury.

Those reductions would aim to bring borrowers payments down to 31 percent of their income.

A main challenge for the government has been prodding lenders to bring down borrowers' payments to the point where they are affordable.

The plan would provide a $1,000 fee to mortgage servicers for each successful loan modification, while borrowers would receive up to $1,000 to reduce their loan principal each year if they stay current on their payments.

Obama also renewed a call for legislation that would allow bankruptcy judges to rewrite mortgage terms.

SAFE AS HOUSES?

The housing crisis has played a central role in the financial and credit turmoil that spread across the globe, with many U.S. homeowners saddled with mortgages they cannot pay.

"I'm glad we're finally acknowledging the obvious, and it's just a matter of time now before hopefully something gets done," said Sean Klasen, a 31-year old former mortgage broker from Mesa, Arizona where Obama announced his plan.

The housing package was meant to be a more politically popular aspect of Obama's plans to rescue the economy. His administration's plan to shore up the financial industry was met with a dive in stock prices last week.

"This plan is good, but it is unnecessarily complicated," said Michael Cheah, senior portfolio manager at AIG SunAmerica Asset Management in New Jersey.

"Every effort helps, but the question is effectiveness. I think it could come with side effects, like people trying to game the system."

Andrew Bekoff, chief investment officer at LPB Capital LLC in Pennsylvania said the measures could make a difference.

"The plan has a real shot to help. The combination of government action and additional funding (through) Fannie and Freddie should help keep millions of Americans in their homes."

Obama, a Democrat who succeeded Republican George W. Bush on January 20, battled with opposition Republicans in Congress to pass the stimulus plan, his first major political victory in office.

Leaders of both parties have called for measures to address the housing crisis.

At the end of last year, just over 9 percent of all home loans in the United States were in arrears or already in foreclosure, the Mortgage Bankers Association has said.

A total of 8.1 million U.S. homes, or 16 percent of all households with mortgages, could fall into foreclosure by 2012, according to a report by Credit Suisse.

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New York Times - Todays Headlines

TOP STORIES
Advertisement To Fix Detroit, Obama Is Said to Drop Plan for ‘Car Czar’ By BILL VLASIC The administration will put the task of revamping G.M. and Chrysler in the hands of a presidential panel led by Timothy F. Geithner and Lawrence H. Summers. U.S. to Compare Treatments By ROBERT PEAR The stimulus bill will, for the first time, provide substantial financing for the government to compare different treatments for the same illness. States and Cities in Scramble for Stimulus Cash By MONICA DAVEY Local officials facing budget deficits are jockeying for the upper hand in deciding how money from the federal stimulus package will be spent in their regions.
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QUOTATION OF THE DAY
"Part of his job is to stay in touch with the American people, and the White House can be a very suffocating place if you don’t get out and talk to people." DAVID AXELROD, a senior adviser to President Obama, speaking of the presidential visit back home to Chicago.
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WORLD
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U.S.
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WASHINGTON
Burris Defends His Evolving Description of Talks By MONICA DAVEY Senator Roland W. Burris of Illinois tried to explain why he did not mention phone conversations with the former governor’s brother during testimony last month. Some Find Hope for a Shift in Drug Policy By WILLIAM YARDLEY The anticipated selection of Gil Kerlikowske as drug czar has given hope to those who want national drug policy to shift away from an emphasis on arrests and prosecution. Obama Confronts a Choice on Copters By PETER BAKER President Obama, who slammed executives for traveling by jet, will soon have to decide whether to proceed with an expensive new fleet of presidential helicopters.
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BUSINESS
nytimes.com/movies Who do you think will win an Oscar? Also in Movies: Photos of the Academy Award nominees luncheon A list of the nominees Continuous coverage of awards season Carlos Slim Helú: The Reticent Media Baron By MARC LACEY Mr. Slim, Mexico’s richest man and now a major shareholder in and lender to The New York Times, has a complex relationship with the news media. Industry Makes Pitch That Smartphones Belong in Classroom By MATT RICHTEL and BRAD STONE Proponents of selling cellphones to schools have said that they are simply making the same kind of pitch that the computer industry has been profitably making to educators since the 1980s. What Convergence? TV’s Hesitant March to the Net By MATT RICHTEL While there is movement by chip makers to spur a new generation of TVs with full browser capability, TV manufacturers simply do not seem to want it.
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TECHNOLOGY
Industry Makes Pitch That Smartphones Belong in Classroom By MATT RICHTEL and BRAD STONE Proponents of selling cellphones to schools have said that they are simply making the same kind of pitch that the computer industry has been profitably making to educators since the 1980s. What Convergence? TV’s Hesitant March to the Net By MATT RICHTEL While there is movement by chip makers to spur a new generation of TVs with full browser capability, TV manufacturers simply do not seem to want it. THE FUTURE OF READING In Web Age, Library Job Gets Update By MOTOKO RICH Even as more school librarians teach digital skills, they often become the first casualties of budget crunches.
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Kenseth’s Drought Ends in Rain at Daytona 500 By VIV BERNSTEIN Matt Kenseth drove from the back of the field Sunday to take the lead minutes before the race was stopped by rain. An Unexpected Journey for an Anonymous All-Star By JONATHAN ABRAMS Often overlooked, Danny Granger Jr., perhaps the most anonymous All-Star selection, is drawing attention. WEST 146, EAST 119 Reunited, Bryant and O’Neal Are Dynamic By HOWARD BECK Shaquille O’Neal and Kobe Bryant were together again Sunday evening, leading the West to a victory over the East in the N.B.A. All-Star Game.
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ARTS
THE FUTURE OF READING In Web Age, Library Job Gets Update By MOTOKO RICH Even as more school librarians teach digital skills, they often become the first casualties of budget crunches. THE TV WATCH Economists Try Target Practice in a Fun-House Mirror By ALESSANDRA STANLEY Two new television documentaries demonstrate that in making sense of an economic meltdown, there’s enough blame to go around. Saving Federal Arts Funds: Selling Culture as an Economic Force By ROBIN POGREBIN There was a whiplash quality to the action surrounding the preservation of $50 million for the National Endowment for the Arts in the final version of the economic-stimulus bill.
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NEW YORK/REGION
Investigators Examine Roles of Ice and Autopilot By MATTHEW L. WALD The commuter plane that crashed on Thursday appeared to be flying uneventfully until its final 26 seconds. Unease Over Weather’s Role, in a City Known for Snow By AL BAKER The circumstances of the plane crash have struck a discordant note among some Buffalo residents for whom traveling in inclement weather is a fact of life. For Two Jazzmen, Work Meant Life on the Road By NATE SCHWEBER Gerry Niewood and Coleman Mellett, who were killed aboard the flight, were largely successful in the world of jazz, but their lives as musicians were hardly glamorous.
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OP-ED
OP-ED COLUMNIST Decade at Bernie’s By PAUL KRUGMAN Like the duped investors who believed in Bernard Madoff’s scheme, America has thought it was rich in the first decade of the 21st century. OP-ED COLUMNIST The Magic Mountain By ROGER COHEN For young Iranians, the Alborz mountains are a physical escape from the city where jobs are elusive, but also a mental one — freedom from censorship. Playing President By GRETA PRATT Photographs of members of the Association of Lincoln Presenters, an organization dedicated to keeping the memory of Abraham Lincoln alive and well. Lincoln Transcontinental Views of Abraham Lincoln from Germany, Japan, Liberia and Hungary.
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On Feb. 16, 1923, the burial chamber of King Tutankhamen's recently unearthed tomb was unsealed in Egypt.
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Q: How do i know whether or not i am dealing with a scam company in reference to loan modifications?

If you look online you’ll find hundreds of firms promising to work with your lender and get you the help you need. For a not-so-small upfront fee, of course. Is it worth it?

Look out for phonies. Mortgage modification is a new field and there are no licensing requirements, oversight boards, etc. Anyone can hang a shingle and claim to be a modification specialist. However, some professionals do have a code of conduct and board they answer to. Licensed Mortgage Brokers, Attorneys, CPAs, Certified Financial Planners, and nationally-regulated credit counseling or debt settlement firms have standards of ethics that at least in theory preclude them from making promises they can’t keep or ripping you off.

When You Have a Need for Speed
Attorneys assert that their calls get answered and their letters replied to faster than those of consumers, this is also true of reputable Mortgage Brokers. If foreclosure is imminent and you need help fast, it may be worth it to engage a lawyer or a broker with a good reputation. Beware of over-promising practitioners. Other than contacting your lender, negotiating changes to the loan, and in some cases financial counseling,  a modifier cannot make any guarantees. For example promising a $100,000 principal reduction or a 3% lower rate is a red flag that should get you running.

Beware of High Upfront Fees
Avoid any outfit that wants a huge fee before doing any work; these are non-refundable to you even if there is no progress in your modification. And that’s money you could be using to pay for necessities when you’re pinched for funds. Typically fees should not exceed $2500.00, depending on the amount of work your Broker or Attorney is willing to perform on your behalf.

Try DIY or Non-profits First
An online search turns up all kinds of examples of hardship letters and instruction for making your request to your lender. Before contracting with a for-profit company, contact your lender or the Homeowner’s Help Hotline (1-888-995-HOPE) run by the Homeowner’s Preservation Foundation. You might get a comprehensive, affordable mortgage modification that won’t cost a dime.

Q: Is it true they can modify your loan toward value around your area. For example you owe 700k and the houses around you are only worth 300k, is it true they can modify it?

In short, yes, but for FYI, Loan Modifications usually include one or more of the following:

- Interest rate reduction
- Add past loan payments, late fees and back taxes to the principle loan balance
- Extend the repayment period of the loan
- Reduce or modify the monthly payment
- Offer monthly payment forbearance or deferment
- Loan balance reduction

Take advantage of your lender's existing loan modification options as lenders are being encouraged by Government Agencies to negotiate reduced rates, principles reductions and help homeowners avoid foreclosure.

Sorry to say this takes a severe hardship situation.

Before a lender is going to lose more money(than they have to) they will first see if by adjusting the interest rate, term of the mortgage and reassign arrears to the rear of the loan before reducing a balance.

And before that, again a hardship must be documented. If you do a net take home minus ALL bills and you have .01 left, they don't have many reasons to help you as they don't consider the fact that you owe more than it's currently worth to be considered a hardship.

If you or your spouse lost their job(and both were needed to qualify for loan) or you had an adjustable rate mortgage that has adjusted, or will, and the new payment will take you into the red, they will work with you. If by reducing therate, changing the term or moving lates doesn't create a workable situation, than a balance reduction will be considered ONLY if there a negative equity situation. If none of that works, that means you have the equity to sell and that's what they will tell you to do or lose your home.

There is another side. Depending on the type of loan you took out, an audit may reveal items that allow for a rescinding or can be used as leverage to FORCE the lender to reduce the balance. For example, if you can prove fraud or a TILA violation, you may be able to force the lender to modify the loan.

Loan modification is certainly possible, however loan modification due to dropping Real Estate values is unlikely in many (but not all) cases. To understand a modification, you need to take a look at what terms you agreed upon at the time of purchase. A mortgage and a note were signed when you took out the loan. The mortgage would state that you were pledging a certain piece of Real Estate as collateral against the funds that were lent to you to purchase the home. The note outlines that terms at which you have agreed to pay back the loan. These will include the date your repayment begins, the interest rate, the amount of the payments, and how many payments you will have.

A loan modification is modifying the note that you signed at the time of close. There are several reasons this may happen, and several avenues this may take. It is first necessary to understand that the note you signed is a legally binding agreement between you and the lender. Anything in this note can be modified, as long as it is agreed upon by both you and the lender, as you are changing the agreement that you made. Forms of modification may include the following:

1.) Reducing the interest rate on the loan, which will allow for a lower monthly payment.

2.) Fixing an interest rate on an Adjustable Rate Mortgage (ARM).

3.) Reamortizing the note to extend the term of the loan and help lower payments.

4.) Lowering the principal balance on the loan.

Once you understand what can be done, you need to understand why it would be done. A lender will typically only agree to modify a loan if there is current proof that you are having difficulty handling the payment, or have had a situation that has adversly affected your ability to repay the loan (lost job, loss of income, etc). A lender will not typically lower a balance of a loan simply because. Real Estate is an investment like anything else, and is not guaranteed to increase in value. Simply because home values have dropped doesn't mean that you should owe less on the home. By the same token, should property values rise in the future, is the bank entitled to more money because the value appreciated? Loan modifications, while they exist, are typically done to help a homeowner retain a home when they are in danger of losing it. They are not designed to insure a borrower against an unrealized loss on investment due to property values dropping.

Important Disclaimer: Questions and answers provided on the Prestige Family Mortgage BLOG are general information, and are not intended to substitute for informed professional financial, tax, legal, investment, accounting, or other professional advice. Prestige Home Mortgage does not endorse, and expressly disclaims liability for any product, service or service provider mentioned or any opinion expressed in these questions and answers.

Chicago Federal Reserve President Charles Evans said the Troubled Asset Lending Facility program should begin within weeks.

The Federal Reserve announced Tuesday it would be expanding the program to take on as much as $1 trillion in assets, including mortgage-backed securities.

Speaking in Des Moines, Iowa, Evans said taking the toxic assets off banks' balance sheets should attract more private investment.

Evans said there are signs that fiscal and monetary policy actions taken by U.S. officials are reducing the strain financial markets, but that disturbances remain.

On the subject of further Fed initiative, Evans said the Federal Reserve is still open to buying long-term bonds. The idea was first mentioned by the Federal Reserve in December of last year. The next Federal Open Market Committee meeting is on March 17.

The state of the U.S. economy is a recession, not a depression, Evans added. He said he isn't too concerned about inflation, but advocated his support of setting an inflation target for the Federal Reserve to go by.

By Megan Ainscow and edited by Stephen Huebl

With U.S. housing affordability at a record high in December, a better-than-expected rise in pending home sales showed signs homebuyers are returning to the market.

December's pending home sales grew by 6.3%, against expectations of a flat reading. The report from the National Association of Realtors (NAR) records home sales that are signed but not finalized, predicting existing home sales for the months ahead.

"This is an encouraging report as it suggests that a potential bottom in the housing market is materializing," said Ian Pollick, an economist at TD Securities.

Nevertheless, Pollick said there remains a "tremendous" amount of supply on the housing market. To make matters worse, the Federal Reserve's quarterly Senior Loan Officer Survey released yesterday revealed that banks are still tightening the conditions under which they'll issue mortgages.

"You have to start somewhere," said Ian Shepherdson, an economist at High Frequency Economics, referring to the increase. He attributed today's rise to attractive bargain basement prices on foreclosed homes.

Indeed, the report from NAR showed the affordability index hit 158.8 - its highest level on record.

The sale of heavily discounted homes is "hardly the sign of a robust market," said Paul Dales, an economist at Capital Economics.

However, one economist disagreed that the foreclosure argument paints the whole picture.

Michelle Meyer, an economist at Barclays said, "the balance in home sale was concentrated in the Midwest and in the South, and those areas, while they do have notable presence of foreclosures, it's not as high as what you've seen in the West," she said.

While this is a positive sign, Meyer said she doesn't foresee a bottom in housing activity before mid-year, and added home prices still have a long way to fall.

Dales agreed, and said with so much inventory left to be sold, U.S. home prices will fall by another 10% or so.

By Megan Ainscow and edited by Sarah Sussman
©CEP News Ltd. 2009

It may be hard to digest all of the news around Senator Isakson’s amendment to the pending economic stimulus package. I’m here to help!

Here are the highlights of the $15,000 Home Buying Tax Credit

· Homeowners that recently purchased their new home may be wondering if they will be able to take advantage of the tax credit that is now before the Senate. The short answer is no. The effective date of the amendment is the date of the enactment. So if they have already completed the purchase of their new home, they will not be qualified for the new program.

· Once the new amendment is enacted, the current $7,500 credit will no longer be given because it will be replaced with the $15,000 tax incentive.

· While the $7,500 first-time home buyer credit was to be paid back, the new $15,000 tax credit does not need to be paid back!

· The tax credit is limited to primary residences and does not come with an income restriction. It applies to any home, meaning a condo, a house, foreclosed, new, or previously owned.

· You CAN take the credit during tax year 2008! Even if you buy a home in 2009, the provision would enable you to file your taxes as if you purchased your home on December 31 of 2008.

· The credit is based on 10% of the purchase price of the home and the credit is spread over two years. So if you bought a home for $300,000, you would qualify for the maximum credit of $15,000. The first year you claim the credit, you receive $7,500, and you would receive the remaining $7.500 the next year.

The President wants a finished product by February 16, 2009! So expect to see this happen quickly!

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With mortgage interest rates believed to fall to 4.5% in the weeks to come you will want to be ready. Pre-approval / pre-qualification is fast and easy. The first step is to click on the "Get Credit Report" link located on the HOME page of this website, or contact Michael Torres directly at (541) 598-8888.

Home prices are at an all time low. We expect some more reduction in property values for specific areas around the country. Call Michael and ask which areas will hold and which will slip.

Mortgage interest rates will not stay low! Do not risk missing the opportunity of a lifetime. No matter what your scenario, chances are we have the mortgage financing for you. Whether you have little equity or zero money down...does not matter...CALL NOW! We will answer your questions. (541) 598-8888

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The Obama administration is considering a program that would let Fannie Mae and Freddie Mac lower payments for struggling borrowers.

Foreclosure's innocent victims

More Videos

 

WASHINGTON (Reuters) -- The Obama administration is crafting a mortgage-rescue program that would see Fannie Mae and Freddie Mac ease payments for hundreds of thousands of borrowers and offer a model for Wall Street to do the same, sources familiar with the plan said.

Late last week, officials from the Treasury Department and Department of Housing and Urban Development worked with the companies' regulator to agree on standards for who could get relief and how they might coax other finance companies to follow their lead, said two industry sources familiar with the deliberations.

Those discussions were still going on over the weekend with Treasury officials trying to weigh the merits and costs of several possible approaches, said one source familiar with the talks.

Washington's two largest foreclosure-prevention initiatives of the last 12 months have fallen flat with only a handful of borrowers having been helped despite promises that hundreds of thousands would qualify.

Officials hope to clear the red tape and rigid terms that have doomed past mortgage-aid efforts without burdening taxpayers with many billions of dollars in funding costs.

"They want to get rid of all the high-cost mortgages out there and figure that there are 1.5 million people who could stay in their homes this year if their loans were modified," said one industry source who asked for anonymity. "But it's just really complicated and expensive to do these kind of workouts."

Since Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500) were nationalized in September, the government-controlled companies have been retooled as agencies for delivering housing aid. Both put a moratorium on foreclosures late last year, and are pioneering programs to let borrowers rent their homes after default.

But while Fannie Mae and Freddie Mac have had some success with stopgap measures to keep people in their homes, the companies' effort to rewrite home loans announced in November has been a disappointment, industry sources said.

Fannie Mae and Freddie Mac own or insure 31 million mortgages -- about 58 percent of all U.S. single-family home loans -- but only a fraction of their borrowers qualify for a refinancing program that was meant to save several hundred thousand. A similar initiative run by the Department of Housing and Urban Development that promised to help 400,000 borrowers has only reached a few hundred.

Policy-makers agree they must relax the terms of any new foreclosure-prevention effort and are trying to identify which tardy borrowers could keep up payments under a new home loan, said two industry sources.

Fannie Mae and Freddie Mac will likely be the cornerstone of an administration mortgage-aid program that will tap between $50 billion and $100 billion from the government's $700 billion financial rescue fund.

The money would be used to underwrite failing loans and give mortgage companies a subsidy to follow the lead of the two government-controlled companies, industry sources said.

Officials are also discussing how fresh legislation from Congress could buttress their efforts by clearing some accounting and legal hurdles that obstruct loan modifications, the sources said.

Treasury Secretary Timothy Geithner could nod to the evolving plans Tuesday when he lays out the administration's thinking on how to use the funds remaining in the $700 billion program, although details might take longer to work out.

Talkback: Is the economy giving you wedding jitters? Are you cutting back on your big-day plans or are you still going all out? Email realstories@cnnmoney.com and you could be included in an upcoming article. 

First Published: February 8, 2009: 5:00 PM ET

 

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