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There’s hardly any good news to speak of when the words mortgage and foreclosure are used in the same sentence but one self-proclaimed wrongful-foreclosure homeowner has identified a silver lining behind the massive cloud.

Aime Jackson writes on her website, advocateaime.com that her foreclosure was “set off by a series of errors (in some instances involving gross negligence) committed by my lender’s servicing agent.”

According to Jackson, the errors included failing to apply three months of payments and to update Jackson’s files correctly as well as having the home placed in default without proper notice under the Texas Property Code.

“They were mis-applying the payments to another account,” says Jackson. She adds, “There were a lot of procedural mistakes that they made when they actually started filing for foreclosure. The attorneys that the mortgage company hired to handle the foreclosure — there was just error after error.”

Jackson’s story was reported on by News 8 in Austin, Texas, recently.

“This isn’t as uncommon as you would think. [Lending companies] are just so overwhelmed and they have so many files on their desk and cases going on — the right hand doesn’t know what the left hand is doing. There are some really huge mistakes being made. In some cases, they’re just ignoring people completely,” says Jackson.

In the end, Jackson, her husband, and children kept their home but not before she felt completely beaten up by the process. “They were ugly and nasty and you feel like you’re being bullied by someone,” says Jackson.

Her story ends with finding the silver lining behind the very dark, oppressive foreclosure cloud. Now, Jackson, who also battled ovarian cancer while fighting to keep their home, is helping others facing foreclosure learn how they can and should fight back to make sure everything possible is done to save their homes. After her intense experience she has learned methods that work

“I can work directly with their mortgage company, the bank, the servicing agent, the lender (whoever it is) to come up with some kind of solution to either modify the loan so that they can continue to stay in the property or to do the right thing and, if they can’t afford to be there, to get out from underneath the property but still avoid the foreclosure,” says Jackson.

Jackson’s website is a grassroots efforts aimed at helping protect and promote the welfare and rights of consumers. While she is not a Realtor or an attorney, Jackson believes her own hard-knocks experience can help others who may find themselves in a similar situation. She offers these tips.

“Do not go into a hole and hide — that’s very tempting and a lot of people do it because they’re so overwhelmed with their own personal circumstances and then they’re bombarded with mail,” says Jackson.

She says people sometimes think if they ignore it the foreclosure will go away. “That’s the worst thing you can do,” says Jackon.

Next, she says, gather as much information as possible about your case. “Find out who your lender is, who actually holds the lien on your property,” says Jackson. She adds, “You cannot deal with your situation and effect any kind of change unless you know exactly what you’re dealing with.”

Jackson says you must be relentless. Do not give up. “You are always your own best advocate because you care most about what is happening to you and your family,” says Jackson. She adds, “I always tell people, the squeaky wheel gets the oil. So, you’ve got to be as loud and as vocal with as many people as you can so that your particular case gets the attention that it needs — otherwise it will just get lost in the shuffle.”

Jackson says remember that it’s never too late. “My situation was a wrongful foreclosure, meaning that my home was actually foreclosed on, and I fought it and got it overturned,” says Jackson. However, she notes that her situation is rare but, as Jackson says, she’s an advocate who will help homeowners “go down fighting” to the end in order to protect their consumer rights and welfare.

Written by Phoebe Chongchua

  One holiday Blue Light Special appears to be working. Interest rates are as low as they been since Freddie Mac started tracking them, refinancing applications are soaring and home buys are on the move.

Freddie Mac on Christmas Eve said the 30-year fixed-rate mortgage (FRM) averaged 5.14 percent for the week ending Dec. 24, 2008. That’s the lowest the rate has been since Freddie Mac started the Primary Mortgage Market Survey in 1971.

The 15-year rate averaged 4.91 percent.

Five year hybrid adjustable rate mortgages (ARMs) were higher at 5.49 percent, but 1-year ARMs were below 5 percent at 4.95 percent nationwide and even lower 4.75 in the Northeast and Southwest.

With all the money you’ve been saving on reduced holiday spending and gasoline conservation, and all those motivated sellers out there twisting in the frigid wind, it’s a good time to be thinking about refinancing or better yet, “Buy A Home — Now!”

Forget settling down for a long winter’s nap. It’s obviously time to put on your refinance thinking cap or your buy-a-home lid, not that go-to-sleep winter topper. Either way, you won’t be alone. Jack Frost can’t hold a candle to housing consumers who feel the heat.

On Dec. 24, the Mortgage Bankers Association’s composite index of mortgage applications to buy a home or refinance a mortgage rose to 1,245.4, the highest since 2003, from 841.4 a week earlier. The group’s refinancing gauge rose 63 percent and purchases gained 11 percent.

Low rates have you looking to refinance?

The average rates are so low, refinancing can benefit even those who purchased a home a year or two ago, even if they had a small equity stake in their home and used an ARM to buy. The key, say the experts, is to examine your options.

In Freddie Mac’s results of its Primary Mortgage Market Survey the 30-year fixed-rate mortgage averaged 5.97 percent with an average 0.7 point for the week ending November 26, 2008, down from the previous week when it averaged 6.04 percent. Last year at this time, the 30-year FRM averaged 6.10 percent. The 30-year FRM has not been this low since October 9, 2008, when it was 5.94 percent.

The 15-year FRM this week averaged 5.74 percent with an average 0.7 point, up slightly from the previous week when it averaged 5.73 percent. A year ago at this time, the 15-year FRM averaged 5.73 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.86 percent, with an average 0.6 point, down slightly from the previous week when it averaged 5.87 percent. A year ago, the 5-year ARM averaged 5.86 percent.

One-year Treasury-indexed ARMs averaged 5.18 percent with an average 0.5 point, down from the previous week when it averaged 5.29 percent. At this time last year, the 1-year ARM averaged 5.43 percent.

“Interest rates for 30-year fixed-rate mortgages fell for the fourth consecutive week as signs the overall economy is flagging lowered most interest rates market-wide,” said Frank Nothaft, Freddie Mac vice president and chief economist. “And economic growth in the third quarter was revised downward this week, led by the first decline in consumer spending since the fourth quarter of 1991 and the largest drop since the second quarter of 1980.

“However, declining house prices and low mortgage rates have raised housing affordability in September to the highest level since February of this year, according to the National Association of Realtors®.”

Buyers With Great Credit Scores in Driver’s Seat

Potential home buyers with great credit scores, enough cash for a 20 percent down payment, and some determination can get a very good deal right now.

“There are a lot of hungry mortgage originators, so great credit-quality borrowers are in the driver’s seat,” says Keith T. Gumbinger, vice-president of HSH, a mortgage market analyst.

Borrowers need a credit score of at least 750 to get the best deals. Keeping credit-card balances below 35 percent of their credit line is very important, but 20 percent is the maximum allowed for a top score.

Buyers in a strong-enough position can ask sellers to agree to a contingency clause that gives them an out if they can’t get the best interest rate on a mortgage.

Tax Credits Give Solar Power a Boost

A series of tax credits for wind, solar, geothermal, tidal energy and others was among the tenets of the October congressional financial rescue legislation.

The law increased the investment credit for solar from $2,000 to $7,500 for a buyer who spends $25,000 to install solar panels on his roof.

In states like California, Connecticut, and New Jersey, where the cost of power is considerable, the pretax compound rate of return on a typical home solar system will be greater than 15 percent per year, says Andy Black, CEO of OnGrid Solar, an industry research firm.

Home builders, including some of the biggest, such as Centex, Lennar, Pulte Homes, and Woodside Homes, are seeing advantages to including solar. All are developing successful communities where all of the homes have solar panels capable of making most if not all power.

More First-Time Buyers Entering the Market

The 2008 National Association of REALTORS® Profile of Home Buyers and Sellers reveals that the number of first-time buyers have risen as a percentage of the market share and they plan to own their homes longer than buyers in the past.

Lawrence Yun, NAR chief economist, said a higher share of first-time buyers makes perfect sense, and it’s a trend he expects to grow.

“First-time buyers are much more flexible in entering the market because they aren’t concerned about selling an existing home,” he said. “Given low home prices, plentiful supply, and affordable interest rates, it’s been an optimal time for entry-level buyers with a long-term view.

“Considering the temporary first-time buyer tax credit and improvements to the FHA loan program, we expect stronger entry-level activity as the flow of credit improves – that, in turn, should free more existing owners to make a trade in 2009.”

The number of first-time buyers rose to 41 percent from 39 percent of transactions in last year’s survey and 36 percent in 2006. “Although modest, this is a meaningful gain for the 12-month period ending at the close of June, and more recent independent data show a stronger uptrend in first-time buyers who are helping to reduce excess inventory,” Yun said.

According to the NAR study, the median age of first-time buyers was 30, down from 31 in 2007, and the median income was $60,600. The typical first-time buyer purchased a home costing $165,000 and plans to stay in that home for 10 years, up from seven years in 2007.

The median down payment by first-time buyers was 4 percent, up from 2 percent in 2007; the number purchasing with no money down fell from 45 percent in 2007 to 34 percent in the current survey.

“The study covers transactions through the middle of 2008, so we can assume the down payment numbers have shifted recently because credit tightened and no-down payment loans all but disappeared around the close of the survey,” Yun explained.

Of first-time buyers who made a down payment, 69 percent used savings and 26 percent received a gift from a friend or relative, typically from their parents. Another 7 percent received a loan from a relative or friend, while 16 percent tapped into a 401(k) fund, stocks or bonds. Ninety-two percent chose a fixed-rate mortgage.

Written by Realty Times Staff

  A recent survey released by Trulia, a real estate search engine, community forum center, andreporter of market trends and data, found that a “crisis of confidence” exists among key groups of U.S. homebuyers.Not surprisingly, much of the lack of confidence in the real estate market stems from the mortgage fallout, the instability of the real estate market, uncertainty of economic times, and the upcoming election.

According to the survey, which included about 1,500 respondents, 70 percent of non-homeowners have no plans to purchase a home in the next 12 months and nearly half in the 18 to 34 age group say the reason is because it’s too costly. While those in the 35 to 44 age group are concerned that they might not be able to qualify for a home loan. The survey also found that only 12 percent of the non-homeowner respondents said they expect to buy a home in the next 12 months.

In a press statement, Pete Flint, CEO of Trulia said, “This combination of the mortgage and Wall Street crisis is tantamount to a one-two punch that has knocked the wind out of the American home buying public. The question is how quickly the American psyche will heal. Despite this short term pain, half of all Americans believe that home ownership is still the cornerstone of the American dream. It is the dream of homeownership that—in the end—may help the market rebound.”

If you’re a prospective buyer, who sees now as an opportune time to buy, then having fewer buyers to compete with puts you in a very good market position. Remember the days of bidding wars?

If you’re interested in purchasing a home now, especially because of fewer buyers in the market, this may be the ideal time. Working with experts in the industry to help you qualify for the best-suited loan, appropriate size house and style, in a neighborhood that shows promise of increasing value over time – may allow you to get into the perfect property.

“There are some amazing opportunities out there right now and if you are in a good financial position and you can get the loan that you need—with the banks just getting the infusion of cash this week which will hopefully be used to free up the credit market a little bit—now is a great time,” says Ken Shuman, head of communications for Trulia.

He points out that the fourth quarter is traditionally a slow time for buying homes but it can be a good time for serious buyers to get a head start. Shuman says getting pre-approved is critical even if you have done it in the past.

“Even if you are making the same amount of money and for instance last year you qualified for a mortgage of $600,000, this year you might only qualify for a mortgage of $500,000—even if your salary hasn’t changed and your credit score hasn’t changed,” says Shuman.

Shuman also points out that even in these difficult times, the effort to get into the housing market is worth it and that’s supported by the research found in their survey.

The survey found that half of the homeowner respondents believe that their home is a great long-term investment despite the turbulence in the marketplace. Some, of course, still have anxiety over the current conditions. The survey also revealed that more than half of all non-homeowners believe homeownership is a central point in achieving their own personal “American Dream”.

Among prospective homebuyers the key areas of concern that influence them when deciding to purchase a home are: getting a good price (35%); crime rates (15%), making a good investment (15%).

According to the survey, featured amenities ranked higher than the quality of local school systems (14% versus 11%). Traffic commute ranked last (8%). A gender difference occurs as well. The survey found that, “Men are more concerned with the crime and sound investment factors, whereas women are more concerned with amenities and quality of schools.”

As the adage goes, behind every cloud is a silver lining; so, if you’re a serious buyer, this may be the market you’ve been waiting for.

Written by Phoebe Chongchua

In Freddie Mac’s results of its Primary Mortgage Market Survey (PMMS) the 30-year fixed-rate mortgage (FRM) averaged 6.46 percent with an average 0.7 point for the week ending October 30, 2008, up from the previous week when it averaged 6.04 percent. Last year at this time, the 30-year FRM averaged 6.26 percent.

The 15-year FRM this week averaged 6.19 percent with an average 0.7 point, up from the previous week when it averaged 5.72 percent. A year ago at this time, the 15-year FRM averaged 5.91 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.36 percent this week, with an average 0.7 point, up from the previous week when it averaged 6.06 percent. A year ago, the 5-year ARM averaged 5.98 percent.

One-year Treasury-indexed ARMs averaged 5.38 percent this week with an average 0.6 point, up from the previous week when it averaged 5.23 percent. At this time last year, the 1-year ARM averaged 5.57 percent.

“Long-term mortgage rates followed long-term Treasury bond yields higher this week, pushing fixed-rate mortgages up to levels of two weeks ago,” said Frank Nothaft, Freddie Mac vice president and chief economist. “The Federal Reserve’s 0.50 percentage point cut in the discount rate and federal funds target rate on Wednesday was widely anticipated in the financial markets and is likely to keep short-term interest rates low; consequently, initial interest rates on ARMs, which tend to be set relative to other short-term rates, may remain near current levels.

“In other news, house-price declines in many markets have improved housing affordability and stimulated home sales. In September, sales of existing homes rose 5.5 percent while sales of new homes were up 2.7 percent, at a seasonally-adjusted annual rate.”

Written by Realty Times Staff

Today’s volatile housing market demands that home buyers take an exacting, almost surgical approach to completing a mortgage application in order to speed the paperwork through the narrowed arteries of the home loan pipeline.

Profusely sweating the details of a mortgage application gives lenders fewer reasons to reject your quest for the American Dream. And the need for speed is crucial if you want to beat today’s realty market clock which frequently resets itself.

The real estate market’s mortgage credit squeeze tightens one day then eases the next. So there’s no room for vagueness or foot dragging when completing a mortgage application.

Here are your marching orders.

Tighter underwriting regulations, fewer mortgage options, appraisers trying to keep tabs on value changes, and several recent federal interventions to help cure the housing hangover this year alone, are all conditions that reflect the unsettled nature of a housing market in the throes of correction.

It’s like marching into hostile territory. Actually, it is marching into hostile territory.

Market conditions insist on laser-focused offensive of market monitoring and, when the time is right, fast-as-a-speeding-bullet action. Hesitate at the wrong moment and your mortgage action — along with your dreams — could go up is smoke.

Case in point: mortgage rates plunged recently just days after the most far-reaching federal effort yet was launched to stem the credit chaos spawned by the housing hangover. That’s doesn’t mean rates will remain reduced.

Control of Freddie Mae and Fannie Mac recently went to the new Federal Housing Finance Agency (FHFA), spawned by the "Housing and Economic Recovery Act of 2008′s" statutory merger of the Federal Housing Finance Board (FHFB) and the Office of Federal Housing Enterprise Oversight.

"The full weight of the federal government backing Fannie and Freddie is huge! For the short term, rates have improved to their best levels since 2005. The spread between the larger conforming loans and the loans of $417,000 and less has almost been eliminated," said Quincy Virgilio, president elect of the Santa Clara County Association of Realtors.

Virgilio, added "My thoughts are, if you were thinking about buying, it’s time to act. I believe we have a short window of opportunity to take advantage of the current lending environment."

Virgilio concedes, once the elation about government intervention subsides in the fickle investment markets and the new regulator gets to work, rates could just as quickly shift the other way.

Other experts agree.

"While the short-term impact of the Treasury’s actions served to calm the markets and restore confidence, in the longer term, these entities need to be able to fulfill their historic mission," said California Association of Realtors’ Executive Vice President Joel Singer.

"A privatized Fannie and Freddie will short-circuit the countercyclical role the GSEs (government sponsored enterprises) have played during precarious times in real estate markets," Singer added. "Without an institutionalized mortgage-backed securities market, mortgage capital will be less predictable and more expensive, and adjustable-rate mortgages could become the standard loan for home buyers, as could higher down payment requirements."

Says Virgilio, plain and simple, "For the next few months, it’s time to act."

In "How Can You Speed Up the Approval of the Loan?" the Federal Reserve suggests:

McLEAN, VA — Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 6.10 percent with an average 0.6 point for the week ending October 2, 2008, up from last week when it averaged 6.09 percent. Last year at this time, the 30-year FRM averaged 6.37 percent.

The 15-year FRM this week averaged 5.78 percent with an average 0.6 point, up from last week when it averaged 5.77 percent. A year ago at this time, the 15-year FRM averaged 6.03 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.00 percent this week, with an average 0.6 point, down from last week when it averaged 6.02 percent. A year ago, the 5-year ARM averaged 6.11 percent.

One-year Treasury-indexed ARMs averaged 5.12 percent this week with an average 0.5 point, down from last week when it averaged 5.16 percent. At this time last year, the 1-year ARM averaged 5.58 percent.

"Average mortgage rates were nearly unchanged during the past week, leaving rates above the levels of two weeks ago," said Frank Nothaft, Freddie Mac vice president and chief economist. "Reflecting the rate uptick from two weeks ago, the Mortgage Bankers Association reported that loan applications were down 23 percent last week."

"The Institute for Supply Management’s manufacturing index dropped from August’s 49.9 to 43.5 in September, indicating further erosion in new orders, a decline in order backlog, and lessened production, suggesting further cutbacks in manufacturing activity in coming weeks. Consumers are feeling the effects of the slowing economy as well. For example, consumer spending was unchanged in August and revised downward for the month of July."

 Mortgage Rates
U.S. averages as of August 28, 2008:

30 yr. fixed:   6.40%
15 yr. fixed:   5.93%
1 yr. adj:        5.33% <–30 yr. jumbo:  6.98%–>

Good news has made its way into the real estate arena this summer — in the form of the Housing and Economic Recovery Act of 2008. What does this Act mean for you?

It means a lot if you are in the market to be a first time homebuyer — up to a $7,500 tax credit if you purchase before July 1, 2009. And there’s more good news. First time homebuyers is defined as, "a buyer who has not owned a principal residence during the three-year period prior to the purchase."

This means for all those markets that have started to stabilize, now could be a great time to buy.

Let’s take a closer look at just what this new incentive entails.

In order to receive the tax credit you must have purchased your home — single-family detached, townhouses and condominiums, manufactured homes, and houseboats — between April 9, 2008 and July 1, 2009. Purchase being the closing date.

You must also meet income requirements. But even if you are over the modified adjusted gross income level of $95,000 (single) or $170,000 (married), you may be able to receive partial tax credits.

And getting started with the tax credit program is simple. You claim the tax credit on your federal income tax return. That’s it. It doesn’t require any other confusing, fancy paperwork.

You can even access the funds quick — instead of waiting to file your return. The NAHB reports, "Buyers who believe they qualify for the tax credit are permitted to reduce their income tax withholding. Reducing tax withholding (up to the amount of the credit) will enable the future home buyer to accumulate cash by raising his/her take home pay. This money can then be applied to the downpayment. Buyers should adjust their withholding amount on their W-4 via their employer or through their quarterly estimated tax payment. IRS Publication 919 contains rules and guidelines for income tax withholding."

What’s tricky about this Act — its a tax credit, meaning that you must repay the government either over the next 15 years (no interest charged), or when you sell the home, if there were sufficient capital gains from the sale.

The NAHB gives this example, "A home buyer claiming a $7,500 credit would repay the credit at $500 per year. The home owner does not have to begin making repayments on the credit until two years after the credit is claimed. So if the tax credit is claimed on the 2008 tax return, a $500 payment is not due until the 2010 tax return is filed. If the home owner sold the home, then the remaining credit amount would be due from the profit on the home sale. If there was insufficient profit, then the remaining credit payback would be forgiven."

So why do you have to repay this credit? Because this is just that — a credit, not a deduction. The government’s hope is that this credit will stimulate the housing market … and in turn the economy. By providing first-time home buyers with a little financial boost — remember it’s interest free — it could do just that.

Written by Carla L. Davis