USA Liberty Mortgage - Mortgage Advice and News

Divorce Buyouts: What You need to know

Wed, 30 May 2007 12:28:39 -0400

As a twelve-year veteran of the mortgage industry I’ve helped clients with hundreds of divorce home buyouts. During that time I’ve learned that this often complicated process can be treated overly casually by judges, mediators and attorneys. I can’t tell you how many times I’ve come across people who have completed their entire divorce without ever investigating whether they can actually afford what the court or settlement agreement has determined. That’s a recipe for disaster. Sometimes dates for when a buyout must be completed aren’t even put into the agreement, leaving the transaction hanging indefinitely or at the mercy of a reluctant ex-spouse.

Tags: divorce buyout mortgage, quitclaim deed, separation agreement, buyout, refinance, mediator

When it's O.K. to run credit and when it's not

Wed, 19 Apr 2006 17:32:46 -0400

The reason people are often told not to run their credit is to avoid excessive credit runs called "inquiries" diminishing their credit scores. It is possible to lose points temporarily from having excessive credit inquiries, but the key word here is "excessive" credit runs. Credit bureaus track the last ninety days of inquiries to determine if a credit fraud is being perpetrated against or even by someone. As the number of credit inquiries grows the credit score drops temporarily to limit credit availability and ward off fraud. You will not lose any points during normal shopping for a loan, car, credit card or mortgage unless you really go overboard with the shopping. The exact number of inquiries allowed every ninety days before scores drop is not clear as credit grading formulas vary by bureau and the bureaus also keep their grading formulas a trade secret. But, talking to a few legitimate companies while you're shopping and allowing them to give you accurate quotes by running your credit will make no difference in your credit.

Tags: credit points inquiries runs fico score

Follow rate trends like a mortgage industry insider.

Wed, 19 Apr 2006 16:39:19 -0400

All mortgage rates follow one financial index or another to set their pricing. Fixed rate mortgages mirror the US 10-Year Treasury Bond or T-Bill. You can see graphs of this index's activity on financial websites by searching the symbol $tnx. Increases in the interest yield will mean higher fixed mortgage rates and decreases indicate lower fixed rates.

Variable rate loans or ARM loans can be tied to a number of indices, but the most prevalent are The US 1-Year Treasury Bond and the LIBOR or London Inter Bank Daily Rate. If your variable rate loan is tied to one of these loans and you're past the introductory period you can track upcoming changes by looking up these indices and comparing them to where they were when you originally took your mortgage loan.

Tags: rates banks rate setting trends index prime

Senator Barack Obama proposes tougher mortgage fraud legislation

Fri, 17 Feb 2006 13:16:17 -0500

edited title for accuracy - ed

Long overdue.

Chicago Tribune:

Sen. Barack Obama (D-Ill.) proposed a sweeping set of federal reforms Tuesday to combat mortgage fraud, ratcheting up enforcement and creating a national database of brokers who have been disciplined.

Obama's bill would increase funding for federal law enforcement programs, create new criminal penalties for mortgage professionals found guilty of fraud and require industry insiders to report suspicious activity.

Mortgage fraud is "robbing thousands of Americans of their dream of homeownership, and costing the mortgage industry hundreds of millions of dollars each year," Obama said. "Congress needs to come to the table and do its part."

Tags: mortgage fraud legislation fbi

Warm weather, murky data

Fri, 17 Feb 2006 12:44:53 -0500

The unusually warm January weather in the Northeast has led to outliers in economic data, most notably the best January in housing starts since 1973.

On the surface, a torrid pace of housing starts seems to be a good thing for the economy, but in this case it appears that the weather has skewed the data from home heating (way down) to retail (way up, especially in building materials.) After December's very disappointing figures, January's numbers may not add up to an increase in demand for this year, but merely a shift in timing.

Tags: housing starts economy weather demand

Real estate speculators sitting out

Wed, 25 Jan 2006 11:31:45 -0500

Slower housing price gains and higher interest rates are contributing to a slowdown in the housing market. Experts forecast growth in the upcoming year, though not at the torrid pace of the last few years.

Bloomberg News:

Higher home prices and borrowing costs will curtail demand this year, according to real estate industry forecasts. Demand for refinancing and home equity loans, which have driven consumer spending and boosted economic growth, may also fade. Federal Reserve Bank of St. Louis President William Poole said business investment will begin to replace housing as an engine of growth.

Tags: realestate data housing homeprices rates interest

Borrowers lack mortgage education

Thu, 19 Jan 2006 08:35:33 -0500

Credit consumers could use a bit more education on the subject. That's the (unsurprising) conclusion of three independent studies of borrower's knowledge about their mortgages.

A recent article on Bankrate entitled "Mortgage borrowers know that they don't know much" sums it up:

The need for consumer education underlies all three of these surveys: Radian's, which found that homeowners wish they knew more about mortgages; Freddie Mac's, which reported that delinquent borrowers don't know their options, and LendingTree's, which uncovered confusion about all kinds of debt.

Fannie Mae to originate construction loans

Wed, 18 Jan 2006 16:53:21 -0500

Banks and mortgage industry consortiums are howling at Fannie Mae's announcement that it intends to expand it's pilot program into contruction loan origination.

The Washington Post writes:

A plan by Fannie Mae to make $10 billion worth of home construction loans over the next 10 years has renewed calls among banks and lenders for legislation that would tighten regulation of the housing finance giant and its sibling, Freddie Mac.

Although the company first announced the plan as part of an affordable-housing initiative two years ago, remarks made yesterday by Fannie Mae chief executive Daniel H. Mudd at a gathering of the National Association of Home Builders in Orlando stirred concerns in the banking industry about a move by the giant company into construction finance, a $350 billion industry.

Housing Market to Cool in 2006?

Tue, 17 Jan 2006 16:01:48 -0500

The statistics are sobering...existing home sales dropped 2.7% in the month of October, while unsold homes hit a 20-year-high. David Lereah, chief economist for the National Association of Realtors, believes we are past the peak of a housing boom. He sees the softening as "not sharp, but meaningful", with signs pointing to the strong possibility that we are transitioning from a seller's market to a buyer's market.

After months of consecutive rate increases by the Fed, and many experts predicting higher rates in 2006, Lereah suggests that sellers across the US may have to adjust their expectations in the coming months, but most especially in the Northeast.

Changes in Bankruptcy Laws and Credit Card Payments

Mon, 16 Jan 2006 13:43:16 -0500

Americans Feel The Pinch:
by Matt Killikelly

With the new bankruptcy law in force this fall and credit card companies virtually doubling their minimum payments within the next few months, a major shift in American personal finance has arrived. The new bankruptcy legislation was signed into law in April 2005 and took effect on October seventeenth. This new law makes it significantly harder to discharge debt through bankruptcies and will benefit credit card companies by significantly reducing losses they experience due to bankruptcies. In a related move, prompted by a 2003 directive, credit card companies in America are raising their minimums, ostensibly to improve a borrower's ability to payback their balances more quickly and encourage more prudent use of credit cards. With two such important changes happening simultaneously there will undoubtedly be some negative long and short term effects and perhaps even some benefits.

Tags: bankruptcy law congress creditcard payments

Which Loan Is Best For Me?

Mon, 16 Jan 2006 13:39:47 -0500

Which Loan is Best For me?

by Matt Killikelly

As the competition in the lucrative mortgage market increases lenders are offering more niche market products, which target transactions outside the norm, to gain an edge on their competitors. This influx of specialized products creates wider loan availability to borrowers than ever before; increasing the possibility to each individual borrower that a product exists that really serves their needs perfectly. Obviously, these products present a a benefit to borrowers when applied to the proper situation. However, this same range of products that bring benefits to clients can also make a consumer’s head spin. Without careful consideration and good guidance a borrower could end up with a loan that simply does not suit their needs. With the dizzying array of loans available to choose from consumers are faced with a difficult choice when selecting which mortgage loan is right for them. A bad choice made on the loan program can cost a borrower immensely. What's worse, is that the problems can occur at either end of the spectrum, when a borrower or loan officer is too aggressive, or so careful that they cost themselves money.

Tags: mortgage loan comparison fixed adjustable option interest-only

Should Borrowers Pay Points?

Mon, 16 Jan 2006 13:31:19 -0500

Should Borrowers Pay Points?

by Matt Killikelly

Many borrowers ask the question: Is it in our best interests to pay upfront points when buying or refinancing a home? Short answer: it depends. There is no hard and fast rule.

It’s a shame that many misguided “rule of thumb” answers are still circulating at the family barbeque or being touted within the trusted walls of the accountant’s or attorney’s office. The real answer depends mostly on the borrower’s plans for remaining in the home and their budget. There is a simple test that a borrower can conduct themselves to see what’s best for them. Read on.

Tags: mortgage upfront points buying rate

A Realtor’s Most Valuable Alliance

Mon, 16 Jan 2006 13:30:32 -0500

A Realtor's Most Valuable Alliance

by Matt Killikelly

Everyone who has ever sold real estate, or sold anything for that matter, knows just how challenging the world of sales can be. A realtor is faced daily with demands of buyers and sellers, deadlines and contracts, along with doing everything else it takes to be successful in our field. Of course most people would not sign on for such a high stress occupation without the strong incomes that reward those who perservere at such a demanding job. Let’s face it; many people are simply unwilling or unable to do what it takes in spite of the great compensation available to those few who succeed. For those who go on to become top producers in the field there are some secrets learned along the way that allow us to maximize our efforts in a number of areas. One way realtors can do this is to form alliances in related industries, such as the mortgage field, which can help make the most of opportunities and actually result in a higher income. We’ve all heard that eighty percent of the sales are usually made by twenty percent of the sales people, and forging alliances with strong mortgage professionals is an important ingredient in the recipe for success.

Tags: mortgage realtors sales partnership

What is a bi-saver mortgage?

Mon, 16 Jan 2006 13:26:16 -0500

What is a bi-saver mortgage?

by Matt Killikelly

A bi-saver takes an existing loan and essentially forces the borrower to pre-pay principal toward a loan in order to shorten the term.

There are two issues I do not like about bi-savers. First, bi-savers usually have a fee attached, anywhere from $200-$600 yearly for the servicing. The second issue is the way they are sold -- most customers don't realize that it's not the fact that the payments are made bi-weekly that makes them save more, it's the fact that by paying bi-weekly the client actually pays more money towards their mortgage over the year and that's what makes the savings.

Tags: mortgage pmi bisaver amortization

The Qualifying Process: What the bank needs to know to price your loan

Mon, 16 Jan 2006 13:22:29 -0500

The Qualifying Process: What the bank needs to know to price your loan

By Matthew Killikelly

Borrowing money is different than other financial transactions in that the risk to the lender is ongoing so long as the loan exists. This means that the bank's profit margin is not calculated solely on cost to provide the borrower with the service less the cost of the product as in other purchases.

In the case of a loan the qualifications and history of the borrower, the amount of investment by the borrower and even property type and occupancy status of the property being collateralized are weighed to determine a unique risk profile for each loan. Every aspect of the transaction is carefully considered before a bank makes any solid offer for interest rate or closing fees.

Here are the factors considered by the lender in pricing your loan:

Transaction type-What are the customer’s needs?

Tags: mortgage qualifying loans banks underwriting income credit equity