Those Who Plan a Strategic Default

Because the prices of homes are falling along with the values, those who were considering selling might have planned to walk away. Those who discovered that they are underwater and see no end in sight, may also very well a prime candidate to plan a strategic default too. Many times, couples learn that they can rent for less, which saves them a substantial amount of money. Joblessness is at an all time high, and if both spouses and partners were working, it changes everything when the household goes down to one income. It is not out of reason to believe that when parents look at their children and have to decide who eats that they would have to come up with some alternatives. 

Reasons That Borrowers Plan a Strategic Default

Those who know that they can get into a home or apartment for less than what they are paying know that they can put money away that they wouldn’t have otherwise. Being able to cut costs is important and necessary, especially in today’s tough economic times. 

The best option is to try and get a modification on your mortgage first to see what the bank can do for you. It will take some time, but they are limited on the amount of time they can spend on getting it together for you. Be sure that they understand everything that you are going through, and anything that they ask for give it to them. They are there to help you, and they can’t fully do their job with missing information. 

If you need more information on how to get started buying a home or refinancing your current home, you can visit www.fhaloansnow.net. You will find a wealth of information there including the requirements for an FHA loan.

Defining a Strategic Default

A strategic default is when a homeowner knowingly walks away from their home, and completely abandons it while living elsewhere. They don’t notify the lender, and they don’t make any payments or arrangements at all. They simply leave the home without warning, not planning to take any responsibility for what is owed, and allow it to go into foreclosure even though they can afford the payments. 

Options to Consider

This may seem okay to do in the borrower’s minds, but it really isn’t the right thing to do at all. In fact, it seems odd for those who can afford their payments, and those who have never been late, to run right into a 90 day late mortgage. There are options to consider even though you are frustrated; don’t let the market get the best of your emotions and make a hasty decision that will ruin your credit and your chances to refinance your loan or worse to buy a different home in the future. 

To find out more about how you can get the help you need, you can go to www.fhaloansnow.net. You can find valuable information and learn more about buying smart with FHA.

Reverse Mortgage Performance is Good Despite the Rumors

While many reports have not shined favorably on the mortgage industry, there is some good news coming forth regarding reverse mortgages. They are doing well, in fact the final numbers rolled out earlier this month from the end of 2010. Believe it or not, there was more than $3 trillion in home equity loans being held by seniors, age 62 and up. When you look at the country’s overall financial picture, it really isn’t all that hard to understand, but it’s sad that seniors are carrying that burden. However, the good part is how the reverse loans are structured, giving them money back in exchange for the property. 

Seniors Make a Sacrifice, but They do Better Financially 

Reverse mortgages enable senior citizens to let go of their home in the end, in return for signing up for a mortgage that makes payments to them. While values are a bone of contention in real estate circles, seniors have fared well in getting these loans closed. There is plenty of counseling upfront to ensure that they understand what is involved, and their family members or caretakers are encouraged to learn about the programs as well so that they can be of assistance should the need arise. While the children might fear they won’t get the property, in some cases it might be the best thing for their parents. This is especially true at a time when values are going down, and there may not be much of a profit regardless on the home. Making the equity work for them is what it’s all about, and it’s doing well.

Equifax Says Credit is Growing!

In the month of March, the report from Equifax showed that credit was growing and on the rise. This is great news, and tells us that people are being more money savvy than they have been in the past. The trend absolutely shows new growth in credit, and those who got back into the game by repairing their credit are thrilled and ready to move forward and buy a home or refinance for a better rate before the changes come. Home equity loans are growing, auto loans are growing, and consumer finance in general is growing too. 

Beating the Odds is Always Favored 

It’s always good to beat the odds, and although many were sure that they wouldn’t be able to sustain the changes, it has made Americans stronger and more determined than ever to clean up their credit and create a whole new portfolio of spending power. This time around, borrowers are wiser and smarter, and they know what it takes to earn that buying power. Hats off to those of you who have worked so hard to make changes and make things happen, you will find out very soon that it was well worth all the hard work and effort you put into it.

Choosing the Cheap Appraiser is Out

Well, there is good news for homeowners in terms of appraisers and no it’s not that appraisals are no longer required! Appraisals will always be required to determine fair market value, but now lenders are required to pay appraisal fees. The reason for this is good; it keeps lenders from using appraisers that aren’t up to par, and it keeps the borrower out of the mix on choosing their own appraiser and paying for it. Even though it might seem that the appraiser would work in favor of the lender, they simply can’t blow out values, and that’s just what we need. 

Why Lenders Have to Pay Appraisers 

Lenders making payment to appraiser’s means that they are now going to look at things more closely when they evaluate the creditworthiness of a borrower. This means that the bank is less likely to handle a borrower’s loan in a non-chalant way. This is probably what should have happened a long time ago, but it used to be that it was viewed in the interest of the lender being able to blow out a loan. There are plenty of things that are not so great, that we can take and use for good; this is one of those things.

More Modifications and Principal Reductions in 2011

Those of you who do not know what a mortgage modification is are going to get a crash course today. They are simply a reassessment of a homeowner’s mortgage, in which their loan is evaluated against their income and other debts, to see where they fall and if any changes can be made to make it more affordable. The benefits of this are twofold: 1) it helps homeowners keep their homes, and 2) it helps homeowners avoid considering a foreclosure or even a short sale. 

With anything there is a risk, or possibly a shortcoming, and in this case the shortcoming is that modifications don’t always work. Ideally, they are looking to get someone’s debt to income ratio to at least 31% total, but with the level of debt most Americans have, that isn’t always possible. In fact, only 9% of modifications are approved, which leaves a large percentage of people out there looking for other options. 

The Purpose of Principal Reductions 

Principal reductions are certainly helpful in an economic downturn, where the values of homes are falling and taxes are going up. A principal reduction is beneficial for those who aren’t struggling with their payments, because its benefits are two-fold as well. The reduction in principal means that not only would the principal balance go down, but those who are upside down in their mortgage would nearly breakeven, or in some cases they would be on benefit from owing less even though they are in the positive right now on value.

Either way, these changes would be good for our economy, and great for the homeowner. It almost seems that it would make us look stronger as a whole across the country, but naturally nothing is free and there are always concerns with any changes that are drastic.

You can find out more about getting a better loan, or a purchase loan by going to www.fhaloansnow.net. You will get the help you deserve with a professional mortgage banker and a realtor. 

-Mayer Dallal