Lender started foreclosure … What should I do?

Q. My lender has started foreclosure proceedings. What should I do?

A. Immediately contact an attorney and/or a MSHDA approved foreclosure prevention counselor in your county. Click on the following link for information on foreclosure prevention counselors. http://www.mshda.info/counseling_search/. Many Michigan counties also have lawyer referral services that can assist you in finding an attorney. The Save the Dream toll-free number is 866-946-7432. Operated by the Michigan State Housing Development Authority (MSHDA), the hotline directs homeowners to a homeownership counselor in their county who specializes in foreclosure prevention.

For more specifics and some general counsel on “short sales”, auctions, time tables, tax consequences (there’s a big one), etc, give me a call asap.

“I’ll just Short Sell it ;-) “

Oh yeah ? Not so fast.

I hear it over and over – “lets bandwagon, let the bank have it, let it go, walk away”…after all, Mr Fix It is in the white house and America cares for the little guy, not those ding nab fat rich bankers !

Try on a dose of reality:

To short sell, you’ll need to prove hardship, and then wait for the income tax bill and higher insurance rates while you ponder getting sued for the short fall and remaining fall out of bad credit for 7 years.

..do NOT constitute hardship:

  1. Bad purchase decisions.
  2. Unhappy with the neighbors.
  3. Buying another home.
  4. Pregnancy.
  5. Moving into an apartment.

Examples of hardship are:

  1. Unemployment
  2. Divorce
  3. Medical emergency / sudden illness
  4. Bankruptcy
  5. Death

A decent article for the cold shower awaiting.

ps, consider buying something that makes sense in the first place – questions ? Call us.

Why Home Prices Won’t Bottom

In theory, it should be a good time to buy a home. In the worst-hit areas, properties have lost more than half their value.

Yet as the average 30-year mortgage rate has slipped below 4 percent, the combination of employment insecurity and unusually tight standards for lending are discouraging buyers en masse. Lenders are asking for extensive income verification and tax returns. One lender I contacted for refinancing even wanted me to get an accountant to certify that I wasn’t lying to the IRS…….

How Long is Credit Information Retained on Your File

A Credit Reporting Agency may report negative information for seven years.

exceptions:

  • Crminal convictions may be reported without any time limitation.
  • Bankruptcy – up to 10 yrs.
  • Response to application for a job with a salary > $75,000 – no time limit.
  • Information reported re: an application for > $150,000 worth of credit or life insurance –  no time limit.
  • Lawsuit or an unpaid judgment – the longer of 7 yrs or until the statute of limitations expires.

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FICO score is as follows:

  • 35 percent payment histories
  • 30 percent amount of debt (e.g. don’t use over 50% of a credit line).
  • 15 percent length of time credit line has been open (a longer history is better if there have always been timely payments).
  • 10 percent very recent history including new applications for credit.
  • 10 percent type/mix of credit, includes installment loans (like car loans), leases, mortgages, credit cards, and so on.

How to Wreck Your Credit Score

Being 30 days late on a house payment — even if it is an accident —

can knock 100 points off a pristine 780 credit score….

30-Year Mortgage May Fade Away

nytforsale.jpg

How might home buying change if the federal government shuts down the housing finance giants Fannie Mae and Freddie Mac?

The 30-year fixed-rate mortgage loan, the steady favorite of American borrowers since the 1950s, could become a luxury product, housing experts on both sides of the political aisle say.

Interest rates would rise for most borrowers, ……

Life without Fannie and Freddie is the rare goal shared by the Obama administration and House Republicans,………..The reasons by now are well understood. Fannie and Freddie, created to increase the availability of mortgage loans, misused the government’s support to enrich shareholders and executives by backing millions of shoddy loans. Taxpayers so far have spent more than $135 billion on the cleanup.

Bring your preapproval letter and lets shop for some BARGAINS !

Make sure your credit is as clean as possible, according to FICO, a person’s score is as follows:

  • 35 percent is determined by payment histories on credit accounts, with recent history weighted a bit more heavily than the distant past.
  • 30 percent is based on the amount of debt outstanding with all creditors.
  • 15 percent is produced on the basis of how long the borrower has been a credit user (a longer history is better if there have always been timely payments).
  • 10 percent is comprised of very recent history and whether the borrower has been actively seeking (and getting) loans or credit lines in the past months.
  • 10 percent is calculated from the mix of credit held, including installment loans (like car loans), leases, mortgages, credit cards, and so on.