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In the issue of repairing your credit, it is best to do it yourself.
Most often, you may hear or see advertisements claimingoutstanding
credit repair services offering you “legal” and “guaranteed” solutions
for your credit problems.

In the issue of repairing your credit, it is best to do it yourself. Most often, you may hear or see advertisements claimingoutstanding credit repair services offering you “legal” and “guaranteed” solutions for your credit problems. These services may use mottos that are quite enticing to those who are in dire need of credit repair. There are even others who get easily convinced after reading “authentic” testimonials from several customers, who might not actually exist. When you are really in need of credit repair, the first thing you want to do is to act immediately. You should remember that this action should be done by you and not anyone else. Luckily, there are several factors that can help you avoid scam credit repair services.

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Beginning our series “Industry Checks & Balances” - at it’s core are reliable credit decisions. In an era where most on the origination side know little about how sound credit decisions are arrived at; due to the advent of credit scores and matrix’s of scores vs LTV vs DTI ratios, this issue is critical for the long term survival of individual careers and the industry as a whole. We’ll explore most of the necessary ‘checks & balances’ over the next several months.

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Home ownership has its benefits, a quite a lot of them, at that. The following are several of the key benefits of home ownership.

Investment Value

Statistics collected by such organizations as the Office of Federal Housing Enterprise Oversight has shown that real estate, though in moves cyclically up and down throughout the years, maintains a consistent trend of appreciating in value over the long run. Homeowners tend to consider their homes their primary investment and a hedge against annual inflation.

Tax Benefits

Tax rates encouraging home ownership make owning a home an excellent tax shelter.

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Introduction

Mortgages are loans that are used to purchase real estate and come in many different forms. The most common types are Conventional, FHA and VA. Other types are Second, Reverse and Balloon Mortgages. These loans often involve the use of Discount Points.

Conventional

The conventional loan is the most common type of mortgage used in the nation today. Conventional mortgages are loans between borrowers and lenders that are not insured or guaranteed by the government. Conventional mortgages are either privately insured through private mortgage insurance companies or not insured at all. Conventional loan guidelines typically require a minimum down payment of five percent on owner-occupied (non-rental) properties; higher for investment/rental properties. For mortgages that have a down payment of less than 20%, private mortgage insurance (PMI) is usually required. Most conventional mortgages have time frames of 15 to 30 years and may be either fixed-rate or adjustable.

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As we all know by watching the news, the real estate market is pulling back hard from the days of glory earlier this decade. In fact, many people are losing their homes to foreclosure. Few realize the tax consequences of losing one’s home.

The Internal Revenue Service looks at things in a strange manner. What you may see as a loss, it sees as a gain. How could this possibly be? Well, the agency takes the view that any loss that relieves you of a financial obligation is actually a monetary gain. Let’s look at an example.

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No doc loans are mortgages that do not require the borrowers monthly income amount and employment source to be filled in on the mortgage application. No Doc loans are a great program for the borrower that just doesn’t have the ability to come up with the required paper work for a conventional or stated income loan such as a self employed or unemployed borrower. No Doc mortgage loans are available for the purchase or refinance of Single Family homes, town homes and condominiums. No Doc Loans are also available for non owner occupied investment properties as well, but have different lending guidelines that will apply and they are only available at lower loan to value ratios and will require a down payment or equity for a refinance.

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If you are struggling to find a buyer for your home who will pay you enough to cover your mortgage payoff, you are not alone and there may be a solution for you. A short sale can be very useful in these types of situations and they are becoming increasingly common as the real estate market has been taking a bit of a “beating” as of late. A short sale is when you sell your home and the lender agrees to accept a balance that is less than the full amount that you owe them. Now why would the lender agree to accept less than the full amount that is due to them? This is a very good question. First off a short sale benefits the lender by getting the property off of their books and saving themselves from the possibility of having to foreclose on the property. If the lender has to foreclose on the property, the amount of time and money they will need to put into the process will be quite considerable. Therefore, by agreeing to allow you to sell your home for less and take what the market will give you, helps you out and helps the lender out.

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WOW! This is getting quite scary, don’t you think?

Have you been seeing all the Lenders that, ummm let just say, have “cut back” on their sub-prime production lately? I heard a figure that over 50 companies have “cut back”. (ok, yes I know some may no longer be in existence, but I’m trying to be nice about it). I also heard a figure that within the next year, there will be over 1 million new foreclosures because of all this sub-prime stuff.

Well, if you’ve been reading my post for while, you’ll know that my belief is the Pay Option Arm is NOT a sub-prime product and should not be sold as one.

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Few people purposely wish to suffer through the pain and humiliation of losing a home through foreclosure. There are many alternatives to bankruptcy and stopping home foreclosure for owners unable to keep their mortgage payments current. One such option is known as a “short sale.” It means a lender is willing to accept less than the total amount owed on the loan. One key element involved in the short sale process is the hardship letter.

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Here’s something interesting, I often hear phrases like this:

I know people want to save money, but they don’t want to risk the possibility of their rates going up.People are scared that their payments will increase so much that they can’t afford their home.Those ARM things are too risky, people around here are way too conservative for one of those things. (this is usually said by the “seasoned” loan officer who’s too afraid to attempt to sell anything but a fixed rate. It’s their way of avoiding the truth) Now, I’m going to tell a story that actually happened not long ago and then we’ll discuss how it relates to those statements.

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