Existing Home Sales Dip in January
Reports show that the sales of existing homes dropped this January, the steepest level since summer of last year. The National Association of Realtors reported a 7.2 percent drop in existing home sales. Just when everybody thought that the housing numbers pointed to a full pledged recovery in the real estate market, the latest figures placed a serious dent on reports of recovery.
This shows that the fundamental problems fuelling the housing crisis has yet to be addressed as the numerous government and private initiatives to spur the economy back on track is just not enough. The high unemployment numbers and strict lending policies have all but undermined government efforts.
The report released last Friday was the lowest since June. With billions of government dollars released since the start of the housing crisis, this figures show just how fragile the real state of the real estate market today. It has fuelled concerns that without continued government support, all progress might be lost. Some of these major government programs are scheduled to end this spring including the hugely popular $8,000 Tax Credit program.
“Most of the improvement that we’ve seen in housing over the past year has been tied to some sort of stimulus program,” said Wells Fargo economist Mark Vitner. “Now that we’re seeing those programs wind down, we’re seeing that housing is quite a bit weaker than what many people had thought.”
Majority of all home sales are made up of previously owned or foreclosed homes. With home market values posting drops of as much as twenty percent these past months, the prices of existing homes could only be described as a bargain, making the drop in their numbers even more disturbing.
Homeowners have been complaining about the difficulty of landing a mortgage or refinancing their existing home loans. With a sluggish economy and huge unemployment numbers still plaguing consumers, qualifying for a house loan is getting even more difficult.
Winter months have traditionally been slow in terms of home sales. But after seasonal adjustments on the numbers, home sales are still lower than forecasts. Until all the fundamental problems are worked out, even the billions of government dollars released might not be enough to sustain housing recovery.
Reported by REOProteams
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Mortgage Refinancing and Credit Scores
Numerous homeowners are taking advantage of President Obama’s Home Affordable Modification Program. Even on-time payers have moved to this strategy hoping to refinance their loans and take advantage of low mortgage rates. With the prevailing state of the US economy, companies have started reducing their employee’s salaries as an alternative to cutting jobs.
Many Americans who saw their income shrink have availed of this program as a way of providing relief and keeping their payments on time. FICO rules and guidelines concerning credit score, loan refinancing with previous history of on time payments drag credit scores lower. This as on-time homeowners applying for refinancing are shocked by their new credit score reports.
Lower credit scores means higher mortgage rates, on-time homeowners who wish to avail of the lower mortgage rates today may find out that their expected savings from availing of this program wouldn’t be that much. In fact they might just be extending their mortgage payments for a couple of years more without great savings.
JPMorgan Chase &Co, Citigroup Inc. and Bank of America Corp have reported sentiments made by homeowners. It shows growing concern that if present guidelines and rules remain in place, homeowners seeking refinancing under the administration’s Housing plan faces a lower FICO or credit score. It also calls for a full disclosure of the negative effect in the homeowners’ credit score or FICO ratings.
Almost two million homeowners have modified their loans since 2007, the Home Affordable Modification Program started last March aimed to curb the number of foreclosures and help homeowners reduce mortgage payments.
This plan does not only help homeowners avoid foreclosures generally helps the financial sector rebound from the housing crisis. The plan still has a lot to go, the lower cost loans are under a three month trial period, meaning the final impact of the program is still under study.
The Home Affordable Modification Program began in March to reduce mortgage payments for those who are delinquent or in danger of defaulting. The lower-cost loans are subject to a three-month trial period, meaning data for the completed number of modifications under the program is still pending. Existing modification programs have not been very effective and have fallen short of goals, said Senator Richard Shelby, a Republican from Alabama at a hearing on the housing programs in Washington.
Reported by REOProteams
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What happens to your lease when your apartment is foreclosed?
With foreclosures continuing to post alarming figures, the number of homeowners forced to leave their homes continue to grow. We have heard a lot about the difficulties still being faced in the private home sector. Many of us know what happens when a bank finally takes over ownership of a foreclosed home but do you know what happens when your apartment gets foreclosed?
It is certainly a troubling thought to know that like private homes, apartments are not immune to foreclosure. When faced with this difficult situation, tenants begin to wonder about the status of their residence. Does the new owner of the property have the right to evict you from your home? The simple answer is No.
If you have a lease made with the prior owner of the apartment, any entity that takes ownership of the apartment is obliged by law to honor the terms and conditions of your lease contract. Under the “Protecting Tenants at Foreclosure Act of 2009”, tenants whose residences have been foreclosed are awarded certain rights against unlawful eviction.
Protecting Tenants at Foreclosure Act of 2009
The law also known as the “Helping Families Save Their Homes Act of 2009” provides a 90 day grace period for families who find themselves renting residences which have fallen into foreclosure. It also provides special circumstances and policies which regulate how tenants with current leases should be treated. However, the law is scheduled to expire on the 31st of December 2012.
- The new owner may terminate the tenancy if the owner will occupy the unit as a primary residence, and has provided the tenant a notice to vacate at least 90 days before the effective date of such notice. This is the only exception to the rule that the tenant may not be evicted during the term of the lease.
- During the term of the lease, the tenant has a right to remain in the unit and cannot be evicted, except for actions that constitute good cause.
- If the lease ends in less than 90 days, the new owner may not evict the tenant without giving the tenant at a minimum 90 days notice.
- At the end of the term of the lease, the new owner may terminate the tenancy if the new owner provides a 90-day notice.
Reported by REOProteams
For more information on the latest and hottest deals or how we at REOProteams.com could help you please email us at info@REOproteams.com or visit us at www.reoproteams.com or LVbargainproperties.com
Home Equity Loans: HELOCs Vs Credit Cards
Getting a credit card is easy, but getting out of the debt which they sometimes get us into is another thing. I’m sure many of us have received a call in one time or another about a bank offering us an easy way of getting a credit card. This line of credit tempts us into spending money which we don’t have which is basically a hole which gets deeper every time we use the credit card.
There are many ways of getting a line of credit. Having a credit card is certainly great when we fail to bring along cash during a run to the grocery store or eating outside. Home equity lines of credit or HELOCs is another way of getting a credit line. These maybe similar to getting a credit card but there are certain differences on how interests are computed and payments could be made for example.
Homeowners having troubles paying their credit cards may use value invested in their homes as an alternative way of paying credit card debts. This could also be used as a ready line of credit which a homeowner could withdraw anytime much like a credit card would do.
Advantages of HELOCs
Lump sum payment
HELOCs offer homeowners the option of getting larger amounts of cash compared to credit cards. For those planning to establish a business, a home equity loan could fund larger projects. For those who may have credit card debts, taking out a HELOC could help you pay outstanding debts and stretch your payments with fixed interest rates.
Payment options
Credit card payments are made monthly with interest rates being applied if a holder does not make payments within the given period. Payments made on purchases are payable within a pre agreed period of time, usually a year. HELOCs on the other hand have longer payment periods which could run to as much as 25 years. A minimum monthly payment is first applied during the HELOCs early years; borrowers are required to make a monthly payment which is often based on the loans interest.
Interest rates
Any type of loan or credit requires borrowers to subject themselves to certain terms and conditions. Credit card interest rates seem to increase monthly, a huge risk if you’re not able to make those monthly payments. HELOCs however have comparatively lower interest rates than credit cards.
Reposted by REOProteams
For more information on the latest and hottest deals or how we at REOProteams.com could help you please email us at info@REOproteams.com or visit us at www.reoproteams.com or LVbargainproperties.com
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