Archive for the ‘Mortgage News’ Category

Tips for Successful Brooklyn Short Sales

Thursday, February 2nd, 2012

Short Sale  And Your Brooklyn Home

The reality of today’s real estate market means that there are many opportunities to purchase Brooklyn short sales.  While the process can still be confusing, it is increasingly common. Here are a few tips on how to make sure you leap through the extra hoops a short sale requires with ease and grace:

  • Avoid short sales with multiple mortgage lenders: Offers on Brooklyn short sales with two different lenders are at a much higher risk of being declined. The first mortgage lender will likely only allow a small percentage to go to the holder of the second mortgage – who will therefore be likely to veto a deal, on the hope that more funds would be generated in a foreclosure.
  • Check the Real Estate Agent’s Short Sale Track Record: Agents with experience in short sales are much more likely to be able to successfully navigate the system than those new to the vagaries of short sales.
  • Make Reasonable Offers: Short sales can be better deals, but they are unlikely to be magically cheap.  No matter what, the bank isn’t going to give the home away just to avoid foreclosure.  You want to put together an offer that makes the buyer and the bank happy.
  • Follow Up on the Details: With the bank involvement, there will be more negotiation and more detail.  Keep your i’s dotted and t’s crossed to make sure the process doesn’t stall.
  • Allow For Extra Time: Short sales are not a short process, so if you are truly in a hurry to close a deal, consider other options.

If you’re looking for a real estate agent with experience in Brooklyn short sales, give me a call.  I can help you navigate the system and close on your new home. You can reach me at call Charles D’Alessandro Your Brooklyn real estate agent with Fillmore Real Estate a call at 718/253-9600 ext 206 or email me at [email protected]

Fannie Mae and Freddie Mac: How Do They Impact Brooklyn Real Estate?

Wednesday, January 25th, 2012

Fannie Mae and Freddie Mac have been in the news quite a bit over the last year, so it’s a good time to do a refresher on who they are and what role they play in the Brooklyn real estate market.

Who are Fannie Mae and Freddie Mac?

Fannie Mae is the Federal National Mortgage Association. Freddie Mac is the Federal Home Loan Mortgage Corporation. They were originally created to raise homeownership levels and increase the availability of affordable housing.

Fannie and Freddie don’t sell mortgages directly to homeowners. They buy mortgages from lenders, so the lenders can use the money to issue new home mortgages.

In 2008, due to mismanagement resulting in billions of dollars of losses, Fannie and Freddie were taken over by the government.

How do Fannie and Freddie impact Brooklyn real estate?

  • They contributed to the financial crisis and real estate downturn, by loosening underwriting standards, buying and guaranteeing risky loans and increasing purchases of mortgage-backed securities.
  • They are key players in the government’s Making Home Affordable foreclosure-prevention program. If your mortgage is owned by Fannie Mae or Freddie Mac, you may be able to refinance your loan and take advantage of lower interest rates.
  • They influence mortgage interest rates and the availability of home loans. Freddie, Fannie and the Federal Housing Administration together now guarantee about 90 percent of all new mortgages, far above their historic level.

What’s going to happen to Fannie and Freddie?

Fannie and Freddie’s future is uncertain. The House Republicans and the Obama administration agree that the pair should be done away with. But this will not happen soon, if at all. Congress must agree on a plan, which could take years, and then the market’s dependence on the companies and the financial backing they provide must be reduced.

If you have questions about Brooklyn real estate or how national or international events impact Brooklyn real estate, please give  Charles D’Alessandro Your Brooklyn real estate agent with Fillmore Real Estate a call at 718/253-9600 ext 206 or email me at [email protected] I’m happy to help.

Preapproval Steps for a Real Estate Home Loan

Wednesday, January 25th, 2012

If you’re thinking about taking the plunge into homeownership, before you even start looking, talk to a qualified mortgage professional to get preapproved for a home loan. Armed with that information, you can make better decisions on the type of  Brooklyn real estate you can afford to buy.

Follow these steps to get preapproved for a mortgage:

1)      Get referrals. Ask family, friends, neighbors and your Brooklyn real estate agent for referrals to a lender with whom they have had a good experience. Talk to several lenders to compare service, rates and other options.

2)      Review your credit report. If anything unexpected appears on your report, do what you can to resolve the issues before you apply for preapproval.  Lenders will review your credit report before preapproving you for a home loan.

3)      Provide financial information to the lender. This usually includes documentation of your income, recent statements for all your checking and savings accounts, assets and debt (for instance, credit card debt and car payments).

Even though the preapproval process is rigorous, obtaining a preapproval still does not guarantee that the lender will ultimately fund your loan. Lenders still need to look at property appraisals, verify your information and potentially check your credit again before agreeing to give you a mortgage.

Preapproval helps you narrow the focus of your Brooklyn real estate search to properties that are within your financial reach. It also helps you check out lenders to find one that is the best match for your situation. When you find the Brooklyn real estate of your dreams, you’ll be ready to move to the next step!

If you’re looking for more information on the home buying process, I can help. Give me a call today at Charles D’Alessandro Your Brooklyn real estate agent with Fillmore Real Estate a call at 718/253-9600 ext 206 or email me at [email protected]

Second Mortgages on Brooklyn Homes: What You Need to Know

Tuesday, November 15th, 2011

Second mortgages on Brooklyn homes are used by people who need to access the equity on their homes. Here’s some information to help you decide if a second mortgage is right for you.

What is a Second Mortgage?

A second mortgage is taking out a second loan on top of the existing mortgage on your home. The collateral for the second mortgage is your home. The loan process is similar to getting a primary mortgage, including the need to pay for appraisals and closing costs.

The maximum amount of the second mortgage is determined by the equity in your home. The equity is the difference between what you owe on the home and the current fair market value of your home.

Why Get a Second Mortgage?

People take out second mortgages on their Brooklyn homes to:

What Should I Consider Before Getting a Second Mortgage?

Taking out a second mortgage is a big risk because your home is your collateral on the loan. Second mortgages on Brooklyn homes are riskier for the lender, so they usually have a much higher interest rate than your first mortgage.

According to an article in the Wall Street Journal, almost 40% of homeowners who took out second mortgages are underwater on their loans. This is more than twice the rate of owners who didn’t take out second mortgages.

Make sure that you can afford the monthly payments as well as the costs associated with getting a second mortgage including the appraisal fee, closing costs, etc. Before signing on the dotted line, investigate financially safer alternatives such as refinancing, selling or renting out.

If you’re considering getting a second mortgage, please think it through very carefully and weigh all your options before making a final decision.

If you’d like help determining if refinancing, selling or renting out your home is the best option for you, give me a call Charles D’Alessandro Your Brooklyn real estate agent with Fillmore Real Estate at 718/253-9600 ext 206 or email me at [email protected],

How to Avoid Paying Private Mortgage Insurance on Your Brooklyn Real Estate

Friday, November 11th, 2011

If you get a mortgage for more than 80% of your Brooklyn real estate’s fair market value, your lender will require that you pay Private Mortgage Insurance (PMI). PMI payments are expensive at about 0.5% to 1% of the entire loan amount on an annual basis.

Obviously, it would be a good thing if you didn’t have to pay PMI. To help you achieve that goal, here are several tips to avoid paying PMI on your Brooklyn  real estate:

Save for a big down payment: The easiest way to avoid PMI is to have a down payment of at least 20% of the value of the home you want to purchase.

  • Borrow to get 20% down: Check with friends and family for down payment assistance. You can offer repayment with interest and still never pay as much as you would have to for PMI.
  • Get a Second Mortgage: Getting a second mortgage to cover the difference between your down payment on your first mortgage and the 20% threshold for your PMI can make a substantial difference in your monthly payments. Talk to a qualified mortgage professional to discuss your options.
  • Pay More Interest: Some lenders will waive PMI if you agree to a higher interest rate. Again, discuss your options with a mortgage professional.
  • Consider a Less Expensive Home: This goes back to being able to hit that 20% threshold. As we’ve all seen in this tough economy, stretching beyond your means can have dire consequences if your circumstances change. Consider if you really need that extra bedroom and extra expense. If you haven’t saved enough to afford an expensive home, downsize your expectations and buy within your means.

If you’d like a referral to an outstanding mortgage professional or need help finding Brooklyn real estate that fits your budget, give Charles D’Alessandro Your Brooklyn real estate agent with Fillmore Real Estate at 718/253-9600 ext 206 or email me at [email protected],


What You Need to Know About Private Mortgage Insurance When Purchasing Brooklyn Real Estate

Monday, November 7th, 2011

If you are on the verge of buying Brooklyn real estate, you’ve probably heard the term Private Mortgage Insurance (PMI). Mortgage professionals talk about it a great deal, but you may be asking, “What is it exactly? And why should I care?”

Private Mortgage Insurance Defined

PMI is required by lenders if the down payment of a purchase is less than 20 percent of the home’s value. It protects the lender if the borrower defaults on the loan. It also makes the lender more apt to loan, even if the down payment is as low as 3%, because in the long run, the lender’s investment is protected.

You Pay For It

Unlike other types of insurance which you pay to protect your interest in an asset, you pay Private Mortgage Insurance to the mortgage company to protect its interest in your new Brooklyn real estate. (Note that PMI is not usually tax deductible. Check with a tax professional for details. )

Make It Go Away: PMI Can Be Terminated Once You’ve Paid Down Your Loan

Once you pay down your mortgage to the point where it hits the magical 80% of the original purchase price or appraised value, whichever is less, you can request cancellation of PMI. The Homeowners Protection Act requires that loans made after 1999 include notifications to the borrower when you arrive at this point in your payments.

Your PMI payments must be automatically canceled once you pay down your loan to 78%. At closing, and on a yearly basis, you should receive information from your lender about when you can request cancellation.

Whether you’re ready to buy Brooklyn real estate or need more information before taking the plunge, I can help. Give me a call today Charles D’Alessandro Your Brooklyn real estate agent with Fillmore Real Estate at 718/253-9600 ext 206 or email me at [email protected],

FHFA Announces Expansion of Program for Underwater Homeowners

Monday, October 24th, 2011
by Jann Swanson
FHFA Announces Expansion of Program for Underwater Homeowners
Oct 24 2011, 11:25AM

In advance of a speech in Nevada later today in which President Obama is expected to expand on the initiative, the Federal Housing Finance Agency (FHFA) has announced major changes to the Home Affordable Refinance Program (HARP).  FHFA unveiled what is essentially a widening of HARP to reach more borrowers in another effort to reverse the continuing flood of delinquent mortgages heading down the pipeline to foreclosure.

HARP is unique among programs designed to assist distressed borrowers in that it is intended to help those who are current on their mortgages but underwater, that is who owe more on their mortgages than the current market value of their homes.  Several studies have identified these borrowers as being likely to strategically default on or walk away from their mortgages.   Although Fannie Mae and Freddie Mac, the two government sponsored enterprises (GSEs) which are under FHFA conservatorship, have assisted about 9 million homeowners to refinance into lower-cost mortgages over the last few years, only about 10 percent of those were aided through HARP.  HARP, like the other major government foreclosure prevention initiative HAMP, the Home Affordable Modification Program, has been impeded by a lack of enthusiasm among lenders and servicers integral to the programs’ success.  In the case of HARP, the lenders objected to the possibility they might have to buy back delinquent loans if they weren’t scrupulously underwritten.  They thus tended to cherry pick the best loans which in turn limited borrowers from refinancing with other than their current lenders.

The current HARP limits the loan-to-value (LTV) ratio for a new loan to 125 percent (the program originally had a limit of 105 percent).  This effectively eliminates the most underwater homeowners and even leaves whole states, such as Nevada where large percentages of homeowners have negative equity above that amount, out of the program.

While regulations and guidance for the plan won’t be finalized for several weeks, relevant changes to HARP that were announced today include:

  • Removing the current 125 percent loan-to-value ceiling on refinanced mortgages;
  • Waiving risk-based fees on borrowers who take shorter term mortgages and reducing those fees for others;
  • Eliminating the need for a new property appraisal where there is a reliable AVM (automated valuation model) estimate provided by the GSEs;
  • Eliminating certain representations and warranties required of lenders to obtain the GSE guarantee. This will protect lenders from many of the buy-back requirements they face under current guidelines.
  • Extending availability of the program through the end of 2013.

FHFA said the changes to HARP were made with input from lenders, mortgage insurers, and other industry participants.  According to The Wall Street Journal, among the concessions made by the industry are agreements from private mortgage insurers to facilitate the transfer of existing mortgage insurance coverage and from most of the major lenders to ease the process of subordinating existing second mortgages to the new loans.

The changes in the program may double the number of borrowers using HARP according to some estimates, but still will serve only those borrowers who are current in their loans and who have loans owned or guaranteed by one of the GSE’s that were delivered to Fannie or Freddie prior to July 2009.  Thus it will impact only a small percentage of distressed borrowers in the country.

“We know that there are many homeowners who are eligible to refinance under HARP and those are the borrowers we want to reach,” said FHFA Acting Director Edward J. DeMarco. “Building on the industry’s experience with HARP over the last two years, we have identified several changes that will make the program accessible to more borrowers with mortgages owned or guaranteed by the Enterprises. Our goal in pursuing these changes is to create refinancing opportunities for these borrowers, while reducing risk for Fannie Mae and Freddie Mac and bringing a measure of stability to housing markets.”

Charles E. “Ed” Haldeman, Jr., Chief Executive Officer of Freddie Mac released the following statement on the program.  “This new phase of the Home Affordable Refinance Program (HARP) will help reach more borrowers with negative equity so they can refinance into new Freddie Mac mortgages at today’s historically low-rates. These changes mark another step on the road to recovery for the nation’s housing market and underscore Freddie Mac’s vital role in making affordable mortgage financing available to America’s homeowners and future homebuyers.”

4 Questions to Ask Before Lending Money to Your Child to Buy Brooklyn Real Estate

Sunday, September 4th, 2011

Questions and Answers from Charles The Realtor®

You’ve reviewed your finances and have decided you can afford to and want to help your child buy Brooklyn real estate.  Is lending the money to your offspring your best option?  Here are some questions to consider when making this decision.

  1. 1. Will you need the money later?

If there’s a chance that you might need the money to live on at some point, lending the money to your child is a better option than giving it to them.  You can always forgive part of the loan later on, if you find you don’t need the money to live on.

  1. 2. How much should you lend?

Depending on your financial situation, you can lend part or all of the down payment or part or all of the purchase price of the Brooklyn real estate.

If you have enough money to lend the entire mortgage amount, consult with your financial planner to determine if this is the best option for you. Lending the entire amount often offers you more interest than you’d get from a bank and gives your child an even lower interest rate than he or she would get with a traditional mortgage.  It also allows your child to deduct the mortgage interest because the loan is secured by the property.

  1. 3. Who will receive the mortgage payments?

Decide if you want to receive the monthly mortgage payments or if you’d prefer to have a third party service the mortgage.  If you want to know more about employing a third party to draw up the mortgage contract and accept the monthly payments, look into companies that handle intra-family loans.

  1. 4. How much interest should you charge?

As part of the loan agreement, you’ll want to charge an interest rate equal to the IRS-approved Applicable Federal Rates (AFRs). The AFR is the lowest interest rate you can charge without causing any unwanted tax complications.  Work with your financial and legal experts to ensure the loan agreement is in the best interests of both you and your child.

Let me help you find the Brooklyn real estate that meets the needs of you and your child – and get it at a great price!  Call call Charles D’Alessandro your Brooklyn real estate agent with Fillmore Real Estate at 718/253-9600 ext 206 or email me at [email protected]sales.com,

Brooklyn Real Estate Investing:Buying a Short Sale Steps 6 through 10

Monday, July 11th, 2011
Brooklyn Real Estate and Short Sales

Brooklyn Real Estate and Short Sales

If you haven’t read “Brooklyn Real Estate Investing:  Buying a Short Sale Steps 1 through 5,” start there.  This blog post provides steps 5 through 9 of the short sale process.

  1. 6. Visit the Brooklyn real estate on your short list.  You’ve already searched for short sales, researched them and narrowed your list to a few short sales that meet your criteria and have the best chance of making it to closing.  Now it’s time to personally visit the few on your short list.  Your primary purpose in visiting the property is to get an estimate as to how much it’s going to cost you to repair the home.  As a real estate investor, you want a property that needs some work so that the average home buyer won’t want it, and you can get it at a lower-than-average price.   But, you also want a property that is in good enough condition that the cost of the property plus repairs still gives you a good return on your investment.
  2. 7. Get a home inspection. Since short sales are typically sold “as is,” it’s crucial that you have a licensed home inspector evaluate the condition of the short sale that you’ve decided is the one you want to buy.  An inspection will find problems you might not have been able to see in your initial visit to the home.  It will also give you a more precise idea of how much it’s going to cost you to repair and renovate the property.
  3. 8. Make an offer. Now that you’ve found the short sale you want to buy, you’re ready to prepare an offer.  Have your Brooklyn real estate agent prepare all the documentation and submit the offer to the seller’s agent.  The seller’s agent will submit the documentation to the lender.  Hopefully, you’ve chosen a short sale with only one lender, but if there is more than one lender, remember that all lenders have to agree on the terms of the sale.
  4. 9. Make a counter offer or walk away.  After getting your offer, the lender has his real estate agent evaluate the offer.  More than likely the lender will make a counteroffer.  That’s the time for you to do a final evaluation.  Double check your numbers using the higher purchase price and ask yourself, “Is this property really going to give me the profit I want?”  If the answer to this question is no, or if you’ve already reached the maximum you’re willing to pay for the property, it’s time to walk away.

10. Finalize the deal.  After you, the seller and the lender have all reached an agreement, get everything in writing and officially record it.  Go to closing, and the property is now yours.  Congratulations!

If you’re a Brooklyn real estate investor looking for a well-priced property to invest in, I can help you find the true bargains, whether they’re short sales, foreclosures or just well-priced real estate.   Give me a call Charles D’Alessandro Your Brooklyn Realtor® with Fillmore Real Estate at 718/253-9600 ext 206 or email me at [email protected].

Emergency Homeowners Loan Program May Provide Relief For Brooklyn

Wednesday, June 22nd, 2011
Top stocks

Emergency Homeowners Loan Program for Brooklyn Homeowners

$1 billion in new help to flailing homeowners

Only about 30,000 are expected to get these interest-free loans, which can eventually be forgiven by the Emergency Homeowners’ Loan Program.

This post comes from Marilyn Lewis at MSN Money.

Homeowners have until July 22 to get pre-screened for a new, interest-free government loan intended to help delinquent homeowners stave off foreclosure. In fact, for those who play by the rules, the loan isn’t really a loan — it’s a gift.

No reason is offered for the short deadline, only that the next four weeks are for “pre-screening” applicants. After that, presumably, selected homeowners will be allowed to apply.

The $1 billion in aid — money provided in the Dodd-Frank Wall Street Reform and Consumer Protection Act (.pdf file) — was announced this week.

“The program, known as the Emergency Homeowners’ Loan Program, is expected to help up to 30,000 distressed borrowers, according to HUD,” says The Washington Post.

That’s about $34,000 apiece, on average. Sounds great, but of course there are plenty of caveats and qualifications.

Who’s eligible?

Apply if:

  • You’re (involuntarily) unemployed or underemployed after losing a job or because of a serious medical condition.
  • You’re 90 days delinquent on your mortgage payments on your primary home.
  • You’ve received a notice of foreclosure.
  • Your income has dropped by at least 15%.
  • You’re likely to be able to resume home payments within two years.
  • You meet the income eligibility criteria. Roughly, that’s if your household income in 2009 was at or below $75,000 a year or 120% of the area median income for a household size of four.

These loans can become gifts

These “bridge loans” of up to $50,000 are “forgivable,” says HUD. They appear to be carefully constructed to reduce the incentive for underwater homeowners to walk away from their homes.

Here’s how the program works:

  • Lucky approved homeowners will get one-time help to become current on overdue mortgage costs and make monthly (first lien) mortgage payments (including principal, interest, taxes, and insurance) for a maximum of two years or $50,000.
  • The loan becomes a junior lien against the borrower’s home. No payments on the loan are due for five years if the borrower stays current on mortgage payments and meets other requirements. After that, the loan balance is reduced by 20% a year until nothing is owed and the junior lien is eliminated.

The loans are available only in 32 states and Puerto Rico. Participating states: Alaska, Arkansas, Colorado, Connecticut, Delaware, Hawaii, Idaho, Iowa, Kansas, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Missouri, Montana, Nebraska, New Hampshire, New Mexico, New York, North Dakota, Oklahoma, Pennsylvania, South Dakota, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin and Wyoming.

Tips:

Watch for fraud

Beware of fraudsters, who are bound to crop up like toadstools after a rain. ConsumerAffairs.com says that legitimate agencies won’t phone you. You’ll have to call them.

The rules require that you personally apply for the loan. In other words, if someone calls you, asks for advance payment and promises to apply on your behalf, you’ve hooked a con artist and you’d be a dope to participate.

On the other hand, ConsumerAffairs says, the actual, legitimate government program itself can sound a little fishy:

It may sound like a classic foreclosure rescue scam: a limited-time offer for a free government loan to save your home. But this time the offer is legitimate.

The rest of the states

You may be wondering: Why only some states?

The answer: Homeowners in the other states already are getting billions of dollars in help from the Hardest Hit FundPost continues after this video about Florida’s Hardest Hit Fund.