Obama Administration Plans To Shrink Some Home Leans

September 1, 2010
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The Obama administration announced on Friday a plan to reduce the amount of troubled homeowners’ debt on their home loans.  This plan will allow people to get new loans backed by the Federal Housing Administration, a government agency that insures home loans against default.  This will be funded by $14 billion from the administrations $75 billion foreclosure-prevention program.

The plan would also help existing mortgage companies to receive incentives to lower their principal balances.  The program would also reduce monthly payments for unemployed homeowners for up to six months.

But the administration warned that the plan is not intended to stop all…

The First-Time Homebuyer Tax Credit

September 1, 2010
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The first-time homebuyer tax credit has been extended to cover sales after November 6, 2009 and in contract by April 30, 2010.  There are limits to qualify for the homebuyer tax credit such as income limits.  Income limit for individuals is $125,000 while couples have a limit of $225,000.  Home buyers must not have owned a home for three years and the tax credit is applicable only to primary residences.

Even if you’re not a first-time homebuyer, you can still avail the tax credit.  Homebuyers can get a credit of up to $6,500 if they are buying a primary home and…

Government Program Falling Short Of Its Goal

September 1, 2010
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According to a congressional hearing, the administration is falling short of its goal of preventing millions of Americans from losing their homes.  Treasury officials acknowledge problems in the year-old mortgage modification program and announced its changes.  Only 170,000 homeowners have completed the process to get their monthly payments reduced out of 1.1 million who began it over the past year.

The government’s latest effort to stem foreclosures would threaten more than roughly 8 million homeowners at risk of losing their homes in the next two years, according to John Taylor, president of the National Community Reinvestment Coalition.  These additional 8 million…

Housing Market At A Risk Of Collapsing

August 10, 2010
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The recovery in the housing market is at a risk of collapsing.  The announcement made by the Bank of America to forgive up to 30% of their total mortgage balance can only help 45,000 troubled homeowners and this would not make a difference in the country’s foreclosure problems.  Also, forgiving principal may encourage people to default intentionally on their mortgages.

Still, home sales are sliding, prices are stalling, foreclosures are rising and mortgage rates are likely to go up after next week when the Federal Reserve ends their program.

A few months ago, the housing market was showing signs of recovery and…

Obama Administration Pushes Mortgage Help For Unemployed

August 10, 2010
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The Obama administration pushes mortgage help for unemployed homebuyers and homeowners.  The new push takes direct aim at the major cause of the current wave of foreclosure which is unemployment.  Banks and other lenders would have to reduce the payments to no more than 31% of a borrower’s income, which would typically be their unemployment insurance, for up to 6 months.  In some cases, a lender could allow a borrower to make no payments at all.

This push also seeks to help borrowers who owe more on their mortgages than their properties worth.  The help would come by encouraging lenders to…

Obama Administration Working On A Principal Reduction Plan

August 10, 2010
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The Bank of America is making the right step towards a positive direction in helping the housing market recover.  They announced yesterday that they will make principal forgiveness towards modifying certain sub-prime, Pay-Option and prime two-year hybrid mortgages qualifying for its National Homeownership Retention Program.

Aside from the help of the Bank of America, the Obama administration is actively working on a plan to help both jobless workers and those who owe more than their homes.  According to Herb Allison, Treasury assistant secretary for financial stability, the administration has come up with some interesting ideas to enable some additional people to…

New Home Sales Fell To A Record Low

July 28, 2010
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The New Home Sales fell 2.2% to a record low 308,000 annual rate this February.  This record was much worse than the consensus estimates which called for an annual pace of 320,000 units.  The Northeast area saw the biggest decline in sales as it dipped 20.0% over the course of February while the Mid-western area was second with 18%.  These areas were hit the hardest with snow storms.

The reaction rates in markets are:

* 3.625% coupon bearing 10 year TSY note didn’t react but the 10s were already off their high yields
* FN 4.5 followed its benchmark guidance giver’s direction and…

Top 5 Cities Recovering From Recession

July 28, 2010
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Some cities are finally recovering from recession.  The top five metros like Washington / Arlington/ Alexandria, D.C., Austin/Round Rock, Texas, Dallas/Fort Worth/Arlington, Texas, Minneapolis/St.Paul/Bloomington, Minn-Wis and Houston/Sugar Land/Baytown, Texas are some of the areas that are surviving the downturn in real estate because they specialize in industries that are relatively insulated from economic volatility.  Federal and state jobs all but guarantee the health of a local economy, and nowhere is there more government-related work than in Washington.

Washington has one of the lowest unemployment rates in the country at 6.2% and its output amounts to 362.3 billion which is three times…

Bank Of America Reduces Principal For Underwater Borrowers

July 28, 2010
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Bank of America, the largest mortgage lender in the country announced that it will forgive up to 30% of some customers total mortgage balances.  The homeowners must have missed at least two months of mortgage payments and owe at least 20% more than their home is currently worth.

The announcement was made to resolve legal problems as well as the potential of setting a precedent for other banks to also start forgiving principal on loans that are in danger of failing.  The announcement came as another report came regarding the continuing problems in the housing market that dropped to a record…

Consequences Of Foreclosures

July 24, 2010
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Losing a home to foreclosure could affect your tax and credit history.  Not many homeowners understand these issues aside from the fact that they are bad.  The legal department of California Association of Realtors issued a memorandum titled “Credit After Foreclosure, Bankruptcy, or Short Sale.  This document is really helpful for those who have questions regarding their credit if they lose their home.

Here are some contents of the memo to help you understand the consequences of a foreclosure:

o Five years after foreclosure, a home buyer may be able to obtain a home loan.  At least 10% down payment is required…