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Major mortgage companies are beginning to falter and effect people on the retail level. CNBC reports that borrowers who have already moved into new homes are finding out that their loans will never close. Since these major mortgage companies are already scrambling to save whats left of their loan portfolio the loans in the “pipeline” are all getting pulled.

This is just the beginning of the correction in my opinion. Tighter lending guidelines are only going to force more buyers out of the market, further driving prices down. Not to mention these guidelines can end up being more of a problem than the interest rate itself. Even if rates are lowered, we now face a new issue with scarcity of credit. Less lenders in the business and tighter guidelines may be the nail in the coffin of this real estate market downturn…

Why does the Fed keep saving the Market? I thought they were supposed to hold off and only come in when there is a real problem. I know what your saying “there is a real problem!”, but it’s a problem created by bank and homeowners negligence. The more they lower rates, the weaker the US dollar will likely become in turn hurting the fixed-income and retirees.

I agree this is good for the market, but I think it’s just another delay for a correction that is inevitable. The sub-prime mortgage mess needs work itself out.

On another side we have Henry Paulson (74th Secretary of the Treasury) who is ready to start bailing out Fannie Mae and Freddie Mac, these two companies can already borrow money at rates lower than any other bank! They screwed up when they started buying mortgage backed securities on the secondary market. For years they had only originated loans with strict guidelines, then in the past few years they moved to the secondary market. So did a company that can already borrow money at rates lower then any other bank need to go into this business? I don’t think so… rant rant rant..

Unfortunately the real losers in this market are going to be the home-owners and small mortgage brokers, not to mention some REALTORS dropping like flies..

Many paying a price for easy credit

Sunday, April 22, 2007 BY LINDA STEIN

Two years ago, when the housing market was booming, William Soodul figured he would reduce his costs with a “creative mortgage.”

He took out a $226,500 adjustable-rate mortgage on his A-frame home in Allentown with a 1.8 percent interest rate and monthly payments that were not applied to either the principal or the interest. His plan was to refinance before his interest rate rose and higher payments kicked in.

But Soodul, a 61-year-old self-employed title insurer, got the surprise of his life when he tried to line up a conventional mortgage last month. Not only would his costs rise $7,000 a year if he kept the mortgage, he would have to pay a $10,000 prepayment penalty just to get out of the deal. continue

Experts on CNBC report more bad news for the Nations Housing Market today. Declines scheduled to be longer than the 1990-1991 slowdowns. Analysts for futures are also worried that if the housing decline continues it will take the stock market down with it.

Coupled with an earlier report on how the NAR (National Association of Realtors) is hustling to educate homeowners about delinquency and other banking institutions starting their own programs to CYA, things really don’t sound good.

And with all this going on, the Office of Federal Housing Enterprise Oversight (which governs Fannie Mae and is about 1/10 of their size) is suing former top level employees to get money which was taken under illegal circumstances.

I think its safe to say that a large chunk of the US National Debt is held by Fannie Mae mortgage backed securities which might be a problem J

The National Association of Realtors (NAR) yesterday expressed its concern over the continued increases in default and foreclosure rates, and many of its members are troubled with the risks and consequences associated with exotic loans, particularly because many borrowers aren’t aware of them.

NAR says the negative effects of increasing foreclosure rates spread much further outside the families who defaulted; the communities where foreclosures are occuring at high rates also take a hard hit.

“Foreclosures can lead to high vacancy rates, which, in turn, can cause all homes in the
neighborhood to lose value,” said Pat Vredevoogd Combs, NAR president and vice president of Coldwell Banker-AJS- Schmidt.

NAR has been working diligently to educate consumers on the different types of mortgages as well as predatory lending. In conjunction with the Center for Responsible Lending (CRL), NAR has produced and distributed three brochures on these very topics. And yesterday, Combs held a conference call with the CRL and the Leadership Conference on Civil Rights to push borrower education before taking out loans to buy homes.

“We are committed to helping people buy—and keep—the home of their dreams, and an educated consumer really can make the best decision,” said Combs. “Realtors(R) help Americans achieve the dream of homeownership. We work to ensure that homebuyers have access to the proper information so they can fulfill their homeownership goals.”

Think “foreclosure” and the image that springs to mind is often the ramshackle, boarded-up house on the wrong side of town.

Those homes are still there, along with lots of upscale digs, in a list that experts say is growing fast as the housing market cools and sharply higher interest rates kick in on adjustable-rate mortgages.

But if you’re a house shopper thinking this is a great time to land a cheap home at the next sheriff’s sale, be forewarned: The numbers don’t tell the full story, and trying to buy a home this way can be an extremely risky, time-consuming and even costly proposition, especially for the novice.

The numbers do appear staggering: In September 2005 in New Jersey, there were 967 filings of lis pendens — the first stage of foreclosure. This September, there were almost 1,650 filings — a whopping 71 percent increase, according to the foreclosure data service Sheriffsalesonline.com.

* * * IF YOU GO… • Sheriff’s sales are held weekly in county courthouses: Fridays in Bergen, Tuesdays in Passaic and Mondays in Morris (Tuesdays after Jan. 1).• Information on properties available can be found in newspaper advertisements or picked up at the county sheriff’s department or in Morris County, online at mcsheriff.org.• You must have between 10 percent and 20 percent of the total sale price in cash at the time of the auction. The remainder must be paid quickly — usually within 30 days. The money must be paid, even if the previous owner is still occupying the property.• For more information: Passaic: 973-881-4200, Bergen: 201-646-2200, Morris 973-285-6600.

Those findings are echoed locally, according to another foreclosure tracking company, RealtyTrac. In the third quarter of 2006, there were 947 properties in all price ranges at some stage of foreclosure in Bergen, Passaic and Morris counties. That’s a 100 percent increase compared with the third quarter of last year.

“These days a lot of these houses are not in disrepair, it’s just that people can run into financial trouble no matter where they’re starting from,” said Jeff Posner, who runs the Fair Lawn-based sheriffsalesonline.com.

Celia Chen, director of housing economics for Moody’s Economics.com, noted that adjustable-rate mortgages that allowed buyers to capture low interest rates for several years — sometimes as low as 3 percent — are now re-setting to higher rates, and owners are paying the piper.

“In some cases, these monthly payments are doubling,” Chen said. “A good share of these buyers were barely qualified for a mortgage even at those lower interest rates.”

Increases in foreclosures also are seen anytime the real estate market slows, said Rick Sharga, vice president of marketing for RealtyTrac.

“If a homeowner is in financial distress, the last two things they need are an extended time to sell and lower prices,” he said.

With all the doom and gloom, only one in four properties that enter a stage of foreclosure are actually foreclosed, said Mike Fratantoni, senior economist for the Mortgage Bankers Association. In most cases, lenders work out deals with the owners, or owners sell or file for bankruptcy.

And, he said, the group’s data also showed that out of the 1.2 million existing loans in New Jersey, less than 1 percent were in a foreclosure stage in the second quarter of 2006. That’s a similar figure to last year. continue

BY Jeffrey M Posner
SheriffSalesOnline.com

If I had to guess, I would say that 40% of the phone calls we get here at Sheriff Sales Online are about the quality and timeliness of our information. We have even received calls that just wanted to see if we would pick up the phone. “I just wanted to see if someone would actually answer?” they say. The funny thing is that I can’t blame them. I have also been ripped off by many foreclosure/real estate services in the past claiming that they had the info with special bells and whistles to boot, but after signing up I realized they just had all the bells and whistles integrated with their crappy information. I’m sure most of you have experienced similar results from web services you may have purchased in the past and I hate to say it, but the foreclosure web site business has a bad rap. There are lots of sexy and super hi-tech foreclosure sites out there, so you have to be careful. I have seen quality hi-tech foreclosure sites with crappy information and the most basic crappy looking site that had the best and most current info. Real Estate is behind the times with technology and is still making its climb up the internet ladder.

Nationwide Services

It is virtually impossible to cover every area in detail unless you have someone local to the area following it on a county level in most cases. Almost all nationwide foreclosure web sites have a heavy concentration with REO (Real Estate Owned) and Realtor® properties. Now I am not saying that these sites are not worth the money, I would just like to clear the air on how up to date and closely followed their information might be.

Pre-foreclosure information is everywhere, but accurate foreclosure sale information with sale dates and owners about to loose their properties is not. Most deals go down towards the END of the pre-foreclosure process, not the beginning. A property is a pre-foreclosure until the day it is sold, the sale is it being foreclosed on, and once foreclosed on it is not REO (Real Estate Owned by the bank or a buyer from the sale)

Here are a few questions that you can ask when researching a foreclosure web site, that is if they answer the phone

1. How often is your information updated?
2. Where do you get your information?
3. Are you just re-selling this information from another provider?
4. Are you local to the area you serve?
5. If I give you a property in foreclosure right now, can you find it for me on your site and tell me about it?
6. What’s the story behind the site? Why was it created? By who?

Leave a comment with any questions, thoughts, or experiences…

A “short sale” or “short pay” as some people may call it, is just a discount. When talking about foreclosures and real estate, a short sale is used to describe the process of a party trying to discount a lien on the property. Most short sales are done under distressed circumstances to the property owner and are usually taken as a last resort on the lien holder’s part.

The process of doing a short on a loan can be quite tedious at times. It involves a lot of time on the phone with lenders and other parties to negotiate the discount and if there are other liens on the property the process progresses. Although a great technique to lower the price on a property, it usually comes at a cost to the owner as the discount will count as income to them and they are NOT allowed to receive ANY money from the sale.

If you are thinking about trying a short sale I would recommend that you have someone who has done one before (or better yet an attorney – in most cases) assist you in the process.

Any Questions?

By DoItYourself.com
Staff Decks are more than just lumber and nails, they are a place of memories. Decking can be expensive, so understanding the various materials is crucial to making a cost-effective decision. Before purchasing the material, you will want to define the goals of the deck:
Will you have the time to maintain the deck through the seasons? Is the deck going to be a focal point of family gatherings? Do you plan on staying in your current home for a long period of time?
Answering these questions should narrow the number of materials to use. If you have little time to maintain a deck (staining, cleaning, and refinishing), a natural wood may not be the best choice. The beauty of natural wood is undeniable. Redwood and cedar decks have been a popular choice for homeowners throughout the country. However, natural wood needs to be waterproofed every couple years. This costs time and money – which you may not have available. In recent years, composite decking material has risen in popularity. Composite decking is offered in various textures and colors, but its main selling point is little to no maintenance. It can be cleaned with common household cleaners and provide years of enjoyment.

If the deck will be the center of family gatherings, choosing the right material is important. For example, selecting an exotic hardwood for your deck – especially with small children around – can lead to dings and dents. When chair and tables are moved the deck may be scratched, which will mean time spent fixing it. If you anticipate hosting people on your deck, a resilient material may be your best choice.

Another factor to consider is how long you will stay in your home. If you plan on staying in you home long-term, choosing a durable material will provide years of enjoyment. However, if you plan on selling your home in the near future, it can drain valuable resources. Decks can add to the value of a home, but it may be difficult to recoup the expense during the sale.

Decking materials are as diverse as the people that buy them. Visit your local lumberyard and investigate the materials available in your area. Compare the selling points of natural wood and composite materials to your specific decking needs. Using the right material can provide all the cherished memories you remember as a child.

© Doityourself.com 2006

BY: Jeffrey Posner
SheriffSalesOnline.com

So you have just successfully purchased your first foreclosure property at the local foreclosure auction and you wonder, now what? Well in most cases there will still be an occupant in the house who will now become your tenant. If the occupant is a renter things will usually be easier, but if it’s the homeowner it may get difficult. First thing you should do is make sure that the foreclosure sale you made is actually going to go through. In New Jersey there is a 10 day redemption period where the property owner can go to the sheriff and pay off the balance in full to get the property title back. So in many cases here investors may lay back a little until they know it is theirs for sure.

Once the sale is final, a great way to approach the situation is to offer the occupant money to leave so they can get a new rental. An eviction can be quite costly not to mention time consuming in the process so this can be a nice way of one hand washing the other.

In the case of disgruntled homeowners, you may be forced to proceed with an eviction. Just follow the normal proceedings and use a good lawyer. Let the legal process do its work, but make sure you file as soon as possible to get the ball rolling. If the occupant has children, financial issues or if it is just is close to the holiday season you are likely to be delayed. Typically, an eviction takes about 3 months if filed correctly and on time.