Banks Offer Incentives to Unload REOs

“Banks facing high inventories of REOs are turning to financial incentives in the hopes of accelerating sales of these often vacant, deteriorating properties.

For example, Fannie Mae and Freddie Mac are trying to liquidate its REOs, the National Mortgage News reports. By the end of 2010, Fannie Mae was authorizing lenders to offer the HomePath program for Fannie Mae REOs. In the program,   which is available to individual buyers and investors, home buyers do not need perfect credit and can put down as little as 3 percent of the property price, qualifying for a loan up to  97 percent of the purchase price.

Also, HUD’s National Community Stabilization Trust “First Look” program is providing competitive prices on REO properties and giving buyers priority access to these homes before they are broadly listed for sale.

Some cities are coming up with their own programs to stimulate sales. For example, JPMorgan Chase recently teamed with Detroit city officials to offer down payment assistance to police officers and city employees who purchase a vacant home in the city over the next two years. The first buyers will receive $25,000 in down payment assistance, while 60 other buyers will receive up to $15,000.

Source: “REO Incentives Accelerate,” National Mortgage News (Aug. 29, 2011)

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US Loan Demands Reach Multi Year Lows

Near-record low mortgage rates  couldn’t prevent the sudden drop  in  mortgage demand that came in the wake of the expired federal tax credit program. Mortgage Bankers Association stated that  mortgage purchase applications sank 27.1 percent due mostly to the expiration of the  the popular government support program.

Applications  for home purchase loans have fallen almost 20 percent over the past month despite low borrowing costs.

On the,  upside mortgage refinancing applications increased by 14.5 percent as homeowners scramble to take advantage of  rates hovering neared historic lows. According to the MBA average 30-year mortgage rates fell 0.13 percentage point last week to 4.83 percent just shy of the the record low of 4.61 percent established in  March 2009.

Almost 70% of all of lat week’s loan  applications were refinancing applications.

Michael Fratantoni, the  Mortgage Bankers Association Vice President of Research stated that ” The data continue to suggest that the tax credit pulled sales into April at the expense of the remainder of the spring buying season .”

Mortgage Rates Reach 6 Months Low

Mortgage Rates Hit 6-Week Low
Freddie Mac reports that the average interest for 30-year fixed mortgages was 5 percent this week, down from last week’s 5.06 percent.
Meanwhile, 15-year fixed loans averaged 4.36 percent versus 4.39 percent over that same time span. Rates on five-year, adjustable-rate mortgages and on one-year ARMs also were down, averaging 3.97 percent and 4.07 percent, respectively.
Source: Modesto (Calif.) Bee (05/07/10)

9 Things you must never do after you apply for a loan

by Carol Lloyd on May 16, 2009

After you apply for a mortgage and you’re told you have been pre-approved, don’t think it’s all smooth sailing to the closing table. Because YOU might do something to foul things up.  Happens a lot, especially if you were not warned by your loan officer.

Even if you were pre-approved at the beginning, the mortgage approval process is not a “static” process.  A snapshot of your financial situation is taken initially, but the underwriter reserves the right to update your information anytime before your loan closes.  And if things have changed, you could lose your loan.

This is painfully important if you are trying to buy a home.

Here’s the list of what you must NOT do while your loan is processing:

1. Do not quit your job.
2. It would be great if you don’t get fired either.
3. Do not use your credit cards for anything but minor purchases;  and since minor purchaeses can add up, try not to use them at all.
4. Do not spend any savings you have disclosed in your application, especially if you are buying a home.  Do not move funds around between accounts.
5. Do not buy or lease a new car, or other large item.
6. Do not buy items using the “buy now pay later” plans.  It still shows up on your credit – immediately.
7. Do not close any credit accounts.
8. Do not open any new credit accounts.
9. Do not throw away financial documentation that might be needed during processing.  Keep paystubs, W2s, bank statements, mortgage statements, credit card statements, etc.  You can shred them after you’re done.

If you keep your  situation about equal to when you applied, you should be fine.  Should something arise where you need to make changes, discuss it with your  loan specialist immediately.

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