FHA Mortgage Underwriting: HUD Rescinds New Rule Requiring Collections & Upaid Bills Over $1,000 To Be Paid Off

29 06 2012

“…policy change would have affected borrowers whose national credit bureau files have one or more collections or disputed-bill accounts where the aggregate amounts were $1,000 or greater…if the now-rescinded rules had gone into effect, as many as one in three FHA loan applicants would have had difficulty being approved…”

Under the withdrawn plan, borrowers with collections or disputed unpaid bills would have been required to “resolve” them before their loan could be closed, either by paying them off in full or by arranging a schedule of repayments. In effect, if you couldn’t resolve the outstanding credit issue, you might not be able to obtain FHA financing.

Disputed bills are commonplace in many consumers’ files but may not indicate serious credit risk. Rather, they might simply be a disagreement between merchant and customer over price, quality of the product or the terms of the credit arrangement. Open collection accounts are also common but tend to be viewed more ominously by lenders since they often indicate nonpayment over an extended period. Unpaid creditors frequently charge off unpaid accounts, then sell the files to collection agencies that pursue the customer and report nonpayments to the national credit bureaus: Equifax, Experian and TransUnion.

For more: http://www.washingtonpost.com/realestate/federal-housing-administration-rescinds-tough-new-rules-on-mortgage-applicants/2012/06/28/gJQAqFFx9V_story.html

California Housing Market: Pending Home Sales Increase In May 2012 While Distressed Property Sales Fall To 41% Of Total Sales

28 06 2012

C.A.R.’s Pending Home Sales Index rose to 128.8 in May compared with 115.8 a year earlier.  Pending home sales also posted double-digit gains compared with the previous year for the fourth consecutive month. Additionally, the share of distressed sales continued to decline from year-ago levels, signaling a return of non-investors to the housing market.

  • The share of equity sales – or non-distressed property sales – compared with total sales improved further in May.  The share of equity sales rose to 59.3 percent in May, up from 55.8 percent in April.  Equity sales made up 51 percent of all sales in May 2011.
  • Likewise, shares of REOs and short sales sold statewide decreased in May, with the share of REO sales dropping the most markedly from a year ago.  The combined share of all distressed property sales fell to 40.7 percent in May, down from April’s 44.2 percent and from 49 percent in May 2011.
  • The share of short sales declined in May to 19.4 percent, down from 20.6 percent in April and from 20.3 percent a year ago.
  • Of the distressed properties, the share of REO sales declined further in May to 21 percent, down from 23.2 percent in April and 28.4 percent in May 2011.
  • The available supply of REOs for sale continued to tighten in May, with the Unsold Inventory Index declining from a 2-month supply in April 2012 to 1.5 months in May 2012.

Housing Market: Over 10 Million Properties In U.S. Have “Underwater Mortgages” With “Shadow Inventory ” Of Foreclosures At 1.5 Million Homes

27 06 2012

“…there are still more than 10 million properties with underwater mortgages, and a shadow inventory of 1.5 million, or four months supply.  Negative equity will continue to take its toll on consumption, while the shadow inventory, worth about $246 billion according to CoreLogic, will constrict lending and probably affect banks’ earnings…”

Out of those 10 million mortgages that are underwater, about 3 million remain “severely underwater,” which means the initial loan-to-value ratio (LTV) is 125% or more (in other words, the value of the mortgage is at least 25% higher than that of the property).  While seriously delinquent mortgages (at least 60 days) have declined, the percentage of loans in foreclosure has remained stubbornly high, at about 10% of underwater mortgages.

According to CoreLogic, the shadow inventory stood at 1.5 million in April, which translates to 4 months of supply.  After having peaked at 2.1 million in 2010, the shadow inventory has declined, but still remains elevated; its total dollar volume is $246 billion.

For more:  http://www.forbes.com/sites/afontevecchia/2012/06/26/10-million-underwater-mortgages-and-shadow-inventory-worth-246b-mean-housing-trouble/

Home Prices Show Signs Of “Stabilization” As S&P/Case-Shiller Index Falls At Slowest Pace In 12 Months

26 06 2012

“Housing has picked up since the middle of last year…Sales have improved and the inventory of homes for sale has been falling, which has brought a bit more balance into the market and fed into a bit of stabilization of prices.”

Residential real estate prices fell in April at the slowest pace in more than a year, adding to signs the U.S. housing market was firming. The S&P/Case-Shiller index of property values in 20 cities dropped 1.9 percent in April from the same month in 2011, the smallest decline since November 2010, after decreasing 2.6 percent in the year ended March, the group said today in New York. The median forecast of 28 economists in a Bloomberg News survey projected a 2.5 percent drop.

A turnaround in prices is a necessary step toward luring more buyers and sustaining demand for housing, which is starting to stabilize after precipitating the last recession almost five years ago. Record-low borrowing costs, due in part to Federal Reserve efforts to hold down long-term rates, may keep promoting home sales in the presence of an 8.2 percent unemployment rate.

For more:  http://www.businessweek.com/news/2012-06-26/home-prices-in-20-u-dot-s-dot-cities-fall-at-slowest-pace-since-2010

“Ready4Remodel” REO Homes In Ohio: 148 W. 73rd St., Cincinnati, OH 45216 Is Listed At $26,000 With FHA 203k Renovation Financing Through Prospect Mortgage

26 06 2012

Real Estate Agent: Coleen Holt  (513) 899-1609  cholt@theholtteam.com

“Click on Prospect For FHA 203k Financing”

Ready4Remodel Financing Options Below:

“Ready4Remodel” REO Homes In Michigan: 1909 Carlton Blvd, Jackson, MI 49203 Listed At $35,490 With FHA 203k Renovation Financing Through Prospect Mortgage

26 06 2012

Real Estate Agent: Gena Foster  (517) 962-5344  genafoster@yahoo.com

“Click on Prospect For FHA 203k Financing”

Ready4Remodel Financing Options Below:

“Ready4Remodel” REO Homes In Missouri: 413 Olive St., Pleasant Hill, MO 64080 Listed At $32,000 With FHA 203k Renovation Financing Through Prospect Mortgage

25 06 2012

Real Estate Agent: Kimberly Killian, Realty Platinum Professionals, (816) 525-2121  kkillian1@mindspring.com

“Click on Prospect For FHA 203k Financing”

Ready4Remodel Financing Options Below: