FHA loans may be what you are looking for

Nov 09, 2007, 10:26 am PST
News provided by Quicken Loans

The recent credit crunch in the mortgage industry has prompted consumers to examine their options carefully. An outstanding option for home buyers and current homeowners making a comeback is FHA (Federal Housing Administration) loans. The desire for secure options in a volatile market is making FHA loans more attractive.
But many people don't understand FHA and if it's right for them. While there's still a bevy of conventional loan options available, the guidelines have been tightened and for some people with less-than-perfect credit, FHA may be just what they're looking for.

Credit
FHA is generally more flexible than conventional loans. Look for guidelines requiring two years from bankruptcy discharge date, paid tax liens and judgments and 3 years from a resolved foreclosure. It is even possible to qualify with no credit score, but you must be able to prove regular payment and financial responsibility in some other forms, such as utility bills or rent.

Income
Contrary to popular belief, there is no minimum or maximum income limits for FHA. The key for qualification for income is not the type of income, but the fact a borrower can prove reliable and steady income. Even part-time income can be considered if earned for a significant period of time.

Down Payment / Equity
The max loan-to-value ratio for FHA loans is 97%, meaning you must have 3% down payment or equity in the home. The bright side of buying a home with FHA is you can use gifts, grants and concession for your down payment. For a cash-out refinance with FHA, the max LTV is 95%. One thing to keep in mind is FHA does have loan limits based on geographical location.

Mortgage Insurance
Mortgage insurance is a policy that protects lenders from losses on defaulted loans. It is required for borrowers that have less than a 20% down payment. Since FHA insures all FHA loans, the guidelines for FHA loans can be a little more lenient. FHA does require an upfront mortgage insurance premium of 1.5% of the loan amount. After closing, you will be responsible for mortgage insurance premium paid monthly for a minimum of 5 years.
FHA has helped more than 30 million people become homeowners since 1934 and is becoming increasingly involved with options for borrowers who have adjustable rate mortgages that will re-set and may be facing foreclosure.
As always, it is advised that you speak with a mortgage professional about your specific situation and what loan is right for you.

This article is reprinted by permission from Quicken Loans © 2007 Quicken Loans Inc. All rights reserved.

Bank of America dropping wholesale mortgages

American Press, Oct. 25, 2007

CHARLOTTE, N.C. - In addition to scaling back its investment banking operations, Bank of America Corp. is exiting the wholesale mortgage business and eliminating about 700 jobs, bank officials said Thursday.
The nation’s second-largest bank will stop offering home mortgages through brokers at the end of the year to focus on direct-to-consumer lending through its banking centers and loan officers. The move also eliminates the jobs in the bank’s consumer real estate unit.
The bank shared details of the decision with The Associated Press before its public announcement scheduled for Friday.

The cuts are part of a 3,000-job reduction engineered by Chief Executive Ken Lewis after the nation’s second-largest bank reported a huge decline in third-quarter earnings.
“When Ken talks about a top-to-bottom review in five days time, you can’t make that happen. These cuts were in the works, and expect more,” said Tony Plath, an associate professor of finance at the University of North Carolina at Charlotte. “Don’t underestimate the depth of Lewis’ disappointment in earnings. This guy is pissed.”
Bank of America confirmed on Thursday that its co-head of equities, Peter Forlenza, had left the bank. Forlenza, who joined the bank in August 2002, left on his own accord, Bank of America spokeswoman Melissa Kitlowski said.

Equifax to start file freezes Oct. 31

By PÉRALTE C. PAULThe Atlanta Journal-ConstitutionPublished on: 10/25/07
Consumers nationwide who want to freeze their Equifax credit reports from unauthorized access will have that option starting Oct. 31, the Atlanta-based credit reporting company said Wednesday.
Like TransUnion and Experian, its two main rivals that have made similar moves in recent weeks, Equifax will charge $10 each time a consumer wishes to have his or her credit file frozen or unfrozen. TransUnion began to allow the file freeze option Oct. 15. Experian's takes effect Nov. 1.

Equifax, which charges $4.95 to $12.95 for a credit monitoring service, will add $2 to the monthly fee to those subscribers who want to add the file-freeze option.
The moves come after several years of consumer advocates lobbying state governments and Congress to give consumers that option to combat identity theft.
Identity theft, which costs victims and businesses about $50 billion a year, occurs when someone obtains loans or conducts other transactions using someone else's personal information.
Consumer advocates have long contended that if credit reports — which contain a person's Social Security number, most recent home addresses, employment and creditors — were frozen, a lender could be alerted to possible fraud.

FHA could back refinanced loans for borrowers delinquent on payments

WASHINGTON - Looking to help homeowners avoid foreclosure, the Democratic-controlled House on Tuesday moved toward expanding federal backing of mortgages well beyond limits favored by the Bush administration.
The House bill would allow the Federal Housing Administration, which insures mortgages for low- and middle-income borrowers, to back refinanced loans for tens of thousands of borrowers who are delinquent on payments because their mortgages are resetting to sharply higher rates from low initial "teaser" levels.
"The American dream is in peril for many families in this country as foreclosures rise and dreams shatter," Rep. Betty Sutton, a Democrat from Ohio, a state particularly hard-hit by the default wave, declared in House debate on the measure.

She called the legislation, which backers say could help an estimated 250,000 families, "a bold step forward on what is going to be a long road to fix this broken system."

FDIC to mortgage servicers: Freeze ARM rates

By Jeanne Sahadi, CNNMoney.com senior writer
October 5 2007: 5:03 PM EDT
NEW YORK (CNNMoney.com) -- The heat on U.S. mortgage lenders and servicers was turned up a few degrees this week when the country's chief bank regulator publicly proposed that they permanently freeze interest rates on subprime adjustable-rate mortgages (ARMs) for many homeowners.
"Keep it at the starter rate. Convert it into a fixed rate. Make it permanent. And get on with it," Federal Deposit Insurance Corp. Chairman Sheila Bair said in prepared remarks at an investor's conference.

ARMs often have a low introductory interest rate for two or three years and then reset to much higher levels.
Roughly 1.3 million subprime ARMs are due for a rate reset between now and the end of 2008, according to data from First American Loan Performance.
Bair proposed that servicers convert only those ARMs that haven't reset yet and only for borrowers who are current in their payments and occupy their homes. Loans taken out by speculators who don't live in the homes they bought would not qualify for the automatic conversion.

Ways to avoid Foreclosure

Here are some options your lender may offer you if you miss a payment and want to avoid foreclosure:
•
Repayment plan: If you suffer a short-term financial setback (expensive car repairs, a medical emergency), your lender may provide some breathing room by agreeing to let you pay off your missed payment in two installments over the next two months.
•
Loan modification: Mortgage servicers can adjust the terms of your loan -- most often by lengthening the amortization schedule, lowering the interest rate or rolling the delinquent amount into the loan and reamortizing the new balance -- to help you bring the loan current.
•
Short sale: The lender allows you to sell the house for less than the outstanding loan amount, takes the proceeds and forgives any remaining debt.
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Short refinance: The lender forgives some of your debt and refinances the rest into a new loan.
•
Refinance with a "hard money" loan: You won't like the high rates and fees of a hard money loan -- one from a private lender -- but it may buy you time to sell your home and avoid foreclosure.

Credit freezes becoming available

Credit freezes becoming available
By Leslie McFadden • Bankrate.com

Beginning Oct. 15, TransUnion, one of the three major credit reporting agencies, will allow consumers in all 50 states to freeze their credit files, while a second agency, Equifax, promised it will make a similar move soon.

The third credit agency, Experian, said it is studying the issue.
Consumers living in states that either don't have credit freezes laws, have laws that aren't in effect yet or limit freezes only to identity theft victims will have the ability to place freezes on their TransUnion credit reports. Victims of identity theft will be able to place, lift ("thaw") and remove the freeze for free while nonvictims will pay $10 each time.
"We're trying to give consumers the opportunity to choose the identity theft fraud solution for their specific circumstances," says Steve Katz, spokesman for TransUnion's Truecredit.com.

2007 Primerica Atlanta Convention

Wholesale Prices Fell

Wholesale prices fell in August by the largest amount in 10 months, reflecting a plunge in the price of gasoline and other energy products and the fourth straight month of falling food costs.

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Open House September 8 (Sat.) 1-3pm

Attend the Open House on September 8, 2007 from 1pm- 3pm. Located just blocks from Highway 6, this home is a great starter home and has new carpet and paint for its future homeowners. Please call 713-443-3423 or http://www.openhousefinancials.com/ for more information or to apply for a mortgage loan

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Purchasing a home is easier and quicker than one may think, however, maintaining the home and your finances after purchasing a home is harder than one may realize.