100% Mortgages

So, you are interested in purchasing a home, and you figured that with a mortgage, it would be possible. But the more you thought about it, the more you realized it wouldn't be a possibility. With closing costs and a down payment, your funds will be wiped out. Or perhaps you don't even have those funds to begin with. What you may not know though,  there is a type of mortgage out there that is perfect for you: a 100% mortgage.

Are you interested in applying for a 100% mortgage? Contact a lender today.

This type of mortgage allows you to finance the entire cost of your home, without a down payment. These types of mortgages are very common, especially among young people just starting off. There are even 103% mortgages, which will roll closing costs into your monthly payment as well. It will be possible to finance your entire home without having to pay for closings costs or putting down a down payment.

Besides the obvious reason of saving money, 100% mortgages can be to your advantage because:

• They generally do not require good credit
• When rolling in fees such as closing costs to your monthly mortgage, it does not make much of a difference in your monthly payments
• Even though interest rates may be higher, it is possible to get a fixed rate
• They can get you into your new home faster!

The last type of 100% mortgage you can get is a 107% mortgage. It is just like the 103% mortgage, but in addition, these loans allow cash back for furnishing or repairs. These types of loans generally require good credit. Now, you are out of excuses. With the different types of 100% mortgages available, you can soon be paying the same amount you are paying for rent, for a home that is actually yours. Apply today!

Are you interested in applying for a 100% mortgage? Contact a lender today.

15 Year Mortgages

They may not be as popular as the 30 year mortgages,but 15 year mortgage would prove to be a better decision, but by the same token, full payment of your home at purchase would be the best way to not only get the best deal but it would also save you the astronomical amount you pay in interest. That option, unfortunately, is not available to most people. In any case, the shorter your mortgage term is, the better off you will be in the end, but not everyone can afford to do so.

Are you interested in applying for a 15 year mortgage? If so, contact a lender in your area today.

Advantages of a 15 Year Mortgage:

• Lower interest rates
• Costs less in the end
• Builds equity faster

Gets mortgage payments, in general, out of the way
If you can afford the higher monthly payments, then great! The longer your mortgage term is, the more interest you pay. If you choose a 30 year mortgage over a 15 year mortgage, the amount you pay by the time that 30 year term ends could be almost double of the cost of your home!

The amount of money you can save by choosing a 15 year mortgage over a 30 year mortgage is a very large amount, so if you can afford to do so, it will be the best decision. However, do not be discouraged if a 15 year mortgage will not be affordable to you, as a 30 year mortgage is still a great choice and remains the most popular choice for a reason.

Are you interested in applying for a 15 year mortgage? If so, contact a lender in your area today.

30 Year Mortgages

When you are applying for a mortgage, you will have a choice when it comes to the amount of years you wish to spread your mortgage out over. While 15 year mortgages and 40 year mortgages are popular choices, the most common choice is a 30 year mortgage.

Even 50 year mortgages have been a hit recently, but 30 years still remains to be the most popular pick for mortgage terms. It does not drag out the mortgage life too long, but it's also not too short either. It is a happy medium, and also the best choice for those with average incomes.

A 30 year mortgage may cost more in the end than a 15 year loan, but it offers many advantages as well, such as the following:

• Lower monthly payments
• Doesn't impact you as much
• Allows you to purchase a larger home
• Even if you can afford the higher monthly payments a 15 year loan offers, perhaps you have other things you wish to do with your money

Deciding between a 30 year mortgage and a 15 year mortgage can be a tough decision. Either choice is a good one though. You just need to think carefully about what is best for you. If you can afford it, then a 15 year mortgage is better in the long run as long as you are the type that plans for the future. If you are the type that chooses to live each day as if it were their last, a 30 year mortgage may not be the best choice. Let's face it, we're not immortal, and if you anticipate you won't be around for 15 more years, then the higher payments won't be helpful.

Are you interested in applying for a 30 year mortgage? Contact a lender today.

Read about other Mortgage infomation such as: Mortgage Refinancing, Adjustable Rate Mortgage and Reverse Mortgage

A Sense of Security Comes From Homeownership

Homeownership remains one of the highest goals for many people because of its many benefits. Along with owning a home comes a sense of security and belonging that cannot be found elsewhere. For many, homeownership represents personal and financial success.

There is much personal satisfaction in living in a home that you own. A home is a valued investment that can have many financial advantages and tax benefits. The interest you pay on a home loan and the real estate taxes you pay on your home are among the few major federal tax deductions. Owning a home is the primary way most people build wealth.

Homeownership is also good for our communities, because families who own their homes are more involved in their communities and participate in local events.

The rewards of homeownership include:

• Personal satisfaction
• Sense of community
• Tax savings
• Stability for you and your family
• Investment in the future

Obstacles To Homeownership: Still, for many Americans, owning a home continues to remain just slightly out of reach. For more and more families, saving the money for a down payment is the biggest obstacle to homeownership. Many people mistakenly believe that you have to come up with a down payment equal to 20 percent of the price of a home.

Traditionally, lenders have required that home buyers be able to make a down payment of at least 20 percent of a home’s purchase price to get a home loan or mortgage. Mortgage lenders, however, will grant home loans to qualifying home buyers with a down payment of as little as 3 to 5 percent of the purchase price if the mortgage is insured.

Adjustable Rate Mortgages

You've seen it before, ads for home loans with an interest rate as low at 1%. You think to yourself that there is no way it could be for real. There has to be a catch! Well, in reality, it is actually very possible to get a rate that low with an adjustable rate mortgage. An adjustable rate mortgage allows you to pay a very low interest rate on your mortgage payments.

Are you interested in an Adjustable Rate Mortgage? Contact a lender in your area today.

Benefits of Choosing an Adjustable Rate:

• Allows you certain times when you have very low payments
• Will allow you to purchase a home sooner
• Will allow you to purchase a more expensive home that you normally could not afford
• Won't affect you too much if you plan on selling your home very soon

A lot of people are against adjustable rate mortgages and may talk you out of doing so due to the fact that there is risk involved when you choose an adjustable rate, as opposed to a fixed rate. The term 'adjustable' is just what it suggests; your interest rate will constantly be adjusted. The first year or so may have an extremely low rate, such as 1%, but this will change. The risk involved is the fact that you never know how high your interest rate will get. An adjustable rate is constantly going up and down.

This is a great choice for people that do not have to worry too much about money or constantly worry about how high their interest rate will be. It is a great idea for those that do not have much money right now, but anticipate they will in the future, therefore making it possible for them to purchase a home now instead of waiting. Also, there is always the option to refinance one day and possibly switch over to a fixed rate if you feel the adjustable rate isn't best for you.

Are you interested in an Adjustable Rate Mortgage? Contact a lender in your area today.

Applying For Mortgages

So, you've made the smart decision of purchasing a home or commercial property. Whether you plan on applying online, over the phone, or just meeting with the lender in the person, it is always good to know what to expect during the process so that you are better prepared.

Are you ready to apply for a mortgage? Contact a lender today.

Make sure you bring the following with you when applying for a mortgage:

• Checking Account Statements
• Gross Income Information
• Pay Stubs
• W-2 Forms
• Any Other Additional Income Information
• Asset Information
• Credit Card Bills
• Social Security Number

Normally, when applying for a mortgage, lenders will charge an application fee, but this is not always so. You will also usually have to pay for an appraisal of the property. These fees are not upfront and are paid when things are becoming more finalized when the contract to purchase the business or home is drawn up.

When you are applying for a mortgage, also make sure you know the exact amount you are seeking to borrow, and the exact amount you are planning on using for a down payment. With all the different loans and options available, it is good to have something in mind before you even contact a lender, but a lender can assist you in making your decision as well. Having all of these things ready and being prepared will only help the application process go that much smoothly and quickly.

Are you ready to apply for a mortgage? Contact a lender today.

Avoiding Foreclosure

Foreclosure occurs when you fall behind on your mortgage payments. Basically, it means that your lender has the right to take your home. Sometimes, certain circumstances occur that can make it difficult - or impossible - to make mortgage payments. There are alternatives to this so that you can keep your home and avoid foreclosure.

Don't let the possibility of foreclosure scare you. Contact a lender in your area today for mortgage information.

If you are facing the possibility of foreclosure, keep these things in mind:

• Contact your lender and explain the situation
• Do not abandon your home
• Beware of scams
• Don't sign things you do not understand
• Explore your alternatives

You may get calls from groups claiming to be counseling agencies that want to help you, when in fact, they really don't and are just out to take advantage of your bad situation. Another common scam is equity skimming, which still may cause you to foreclose in the end.

You have a few different alternatives to consider. If your loan is between 4 and 12 months delinquent but you are able to afford mortgage payments again, you can qualify for a partial claim. With Special Forbearance, a repayment plan may be arranged. To refinance your debt and make payments smaller, mortgage modification would be a great choice. If things are a little more serious, you can consider a pre-foreclosure sale or a deed-in-lieu of foreclosure. Even though they are last resorts, they are still better than regular foreclosure.

Don't let the possibility of foreclosure scare you. Contact a lender in your area today for mortgage information.

 Bad Credit Mortgage Loan: Qualifying For The Best Rate On A Mortgage Loan

Most bad credit mortgage loan applicants have no idea that mistakes on their credit reports are preventing them from qualifying for a low rate on a mortgage or home equity line of credit. Some of the most common mistakes found on applicants' credit reports are incorrect balances, judgments and collections that are too old or were paid in full, but reporting as having outstanding balances. Such accounts can be identified and taken in to consideration when refinancing.

Express Capital Funding Group is one of the companies that take time to review credit reports, to help borrowers qualify for a lower rate on a mortgage or home equity line of credit. The process is simple, application is taken over the phone. Within 24 hours a borrower is contacted by a loan consultant for a credit report review to identify any mistakes that can be taken in to consideration when making a credit decision. As a result of this review, applicants can qualify for interest rates that are much lower than what they are being offered by lenders that don't take credit reporting inaccuracies in to consideration.

Some borrowers have so much debt and such bad credit, that they don't qualify for a conventional mortgage. Outstanding balances have to be paid off in order to qualify for lower rate. ECFG offers short term private money loans to homeowners to repay some of the outstanding balances to improve their financial position before refinancing.

Balloon Mortgages

Balloon mortgages are mortgages that seem good in the beginning, but could wind up becoming bad news in the future. The fact is, most people would not be better off with a balloon mortgage, but there are plenty of people who would be. Balloon mortgages have their good and bad points, and it's up to you to weigh these differences and determine if it's the right choice for you or not.

Are you interested in a Balloon Mortgage? Contact a lender in your area today.

With other types of mortgages, your mortgage payment each month consists of two things aside from things such as taxes and insurance: the amount that is interest, and the amount that goes toward your principle. These two components are the largest components of your payment and add up to your monthly payment. However, with a balloon mortgage, you are paying ONLY for the interest, and not at all toward the principle. In a way, it's almost like paying for rent: the money goes nowhere, but you have a place to live. The big difference, though, is how much lower your monthly payments will be. In the end, the home will be yours.

Benefits of Balloon Mortgages:

• The interest is usually lower
• Monthly payments are lower
• The interest is fixed
• The term is short, usually 3, 5, or 7 years
• Sometimes come with refinancing options

How much will you save exactly? This all depends on a number of a factors, such as how much your home costs, how long your mortgage term is, and your interest rate. Depending on these factors, your savings each month can be anywhere from $100 to a few a hundred dollars. So if you are paying interest each month, when do you pay the principle? You are expected to pay the principle (the entire cost of the home) all at once after a certain number of years. This is the perfect loan for you if you need low monthly payments for a few years, but you know for certain that you will have all of the cash available in the future for the value of your home.

Are you interested in a Balloon Mortgage? Contact a lender in your area today.

Biweekly Mortgages

When you think of paying your mortgage, you usually think of one monthly payment every month. However, another option that is available to you is paying biweekly. This means instead of making one payment a month, you will make a payment every two weeks, which results in two payments a month.

Are you interested in a biweekly mortgage? If so, contact a lender in your area today.

Benefits of a Biweekly Mortgage

• You can pay off your loan faster
• Your interest savings will be greater
• It is sometimes easier for people to make two smaller payments instead of one large payment
• You will save a lot in the end

Let's say you are taking out a mortgage and the once-a-month payment would be $800 a month. If you chose to pay biweekly instead, this does not mean you would pay $800 twice a month ($1,600 all together.) It means your payment would be split in half and it would be two, $400 payments a month. These are not exact figures, but they are just to give you a general idea. By doing this, you save a lot in interest, and you can turn your 30 year mortgage into a much shorter term. How short? Roughly 22 years, but this is an estimate.

If you were interested in paying a much higher payment each month in order to make your mortgage term go much quicker, than a 15 year loan would be a good choice for you. Otherwise, biweekly mortgages are your best bet. So, why doesn't everyone with a 30 year loan choose to pay biweekly? Some people don't like, or simply don't have the funds, every two weeks to pay for half of their mortgage. If you do however, it is something to consider.

Are you interested in a biweekly mortgage? If so, contact a lender in your area today.

Bush Administration renews effort to address risky loans

In a speech to the National Press Club, HUD's Assistant Secretary for Housing-Federal Housing Commissioner Brian D. Montgomery warned FHA must take action because these loans, which now make up one third of FHA's portfolio, are causing substantial losses.  This year, as a result of its annual re-estimate, FHA had to book an additional of $4.6 billion in unanticipated long-term losses, mostly due to the increased number of certain types of seller-funded loans in the FHA portfolio.  

"Given these concerns, we cannot just stand by.  No private mortgage insurance companies back these types of loans.  We are concerned about this business because the substantial losses affect FHA's bottom line and FHA's ability to serve American citizens who need access to prime-rate home loans," Montgomery stressed.

Stressing that FHA is still solvent with reserves of about $21 billion, Montgomery also noted:  "However, no insurance company can sustain that amount of additional costs year after year and still survive. Unless we take action to mitigate these losses, FHA will soon either have to shut down or rely on appropriations to operate.  That, I think, would have a far-reaching impact on the economy: it would severely reduce the number of new homeowners each year; and it would also sharply reduce the need for the services required to build and maintain homes.  In other words, the negative impact goes far beyond the individuals who would not be able to purchase homes, and would likely be felt across the entire economy."

The primary focus of HUD's rule is to establish appropriate standards for downpayment assistance that is categorized as a gift.   Specifically, it would prohibit downpayment assistance provided before, during, or after closing of the sale by the seller, any other person or entity that financially benefits from the transaction, or any third party or entity that is reimbursed directly or indirectly by any of the parties benefiting from the sale.  

The rule would clarify that downpayment funds for FHA-insured mortgages cannot be derived from sellers - directly or indirectly - or any other party that stands to benefit from the transaction financially.  "The IRS, GAO and our own Inspector General have previously expressed concerns with these circular financing schemes.  Data clearly demonstrates that FHA loans made to borrowers relying on seller-funded downpayment assistance go to foreclosure at three times the rate of loans made to borrowers who make their own downpayments," noted Montgomery.

"In its entire 74-year history, FHA has been self-sustaining.  That means that our income has exceeded our costs and we have not needed an appropriation of taxpayer dollars to cover FHA's operations. That's pretty unique for a federal program," Montgomery said.

Permissible sources of gifts as a source of the homebuyer's investment include a family member, a governmental or public agency, the borrower's employer or labor union, and a charitable organization that qualifies as a tax-exempt charitable or educational organization.  

In these cases, there is a clear quid pro quo between the homebuyer's purchase of the property and the seller's "contribution" or payment to the charitable organization.  Often, these contributions function as an inducement to purchase the home.  One of FHA's primary concerns with these transactions is that the sales price may be increased to ensure that the seller's net proceeds are not diminished, and such increase in sales price is often to the detriment of the borrower and FHA.  

Discussing the Bush Administration's effort to help families stay in their homes, Montgomery also called on Congress to pass legislation that modernizes FHA, which includes addressing the risks associated with seller-funded downpayment assistance.  "Frankly, we need reasonable solutions to the housing crisis.  And I think there is considerable common ground on confronting it.  There is surely a consensus on a number of actions.  But some in Congress are advancing legislation that, while well intentioned, could be problematic for the economy and the country.  Some of the proposed Congressional actions could actually weaken FHA and endanger the housing market by turning FHA into a less stable, less solvent, more bureaucratic entity," stressed Montgomery.

Bush Administration to Help Nearly One Quarter of A Million Homeowners Refinance, Keep Thier Homes

Buying vs. Renting

There are so many advantages to owning your own home.  In most cases, the amount of money a renter spends on rent can be close to if not less than the amount that a homeowner would spends on mortgage payments. Homeowners also have the advantage of tax benefits for homeownership, the savings can be considerable.  Are you ready to own your own home?

Are you looking to own your own home?  If so, contact a lender in your area today!

Benefits of buying vs. renting include, but are not limited to:

• Property builds equity
• Sense of community, stability, and security
• Free to change decor and landscaping
• Not dependent on landlord to maintain property
• Tax benefits

Not only will owning your own home come with the benefits listed above, but you will also gain a sense of accomplishment.  With all the housing options and mortgage options you have at your finger tips, why not own your own home?

Are you looking to own your own home?  If so, contact a lender in your area today!

Commercial Mortgages

If you have been thinking about starting a business, a commercial mortgage will usually be necessary in order to purchase the building or the land planned to build the business on. Starting your own business and taking out a commercial mortgage is a great investment that can lead to a very successful future.

Are you interested in applying for a commercial mortgage? Contact a lender today.

What exactly can a Commercial Mortgage be used for?

• The Purchase of Business Premises
• Commercial Investment
• Residential Investment
• Development of Property
• Expansion

Just like residential mortgages, your commercial mortgage can either be a fixed rate mortgage or an adjustable rate mortgage. Also, there are usually many different choices of time frames available for commercial mortgages, such as 10, 15, 20, 25, or 30 years.

If you are choosing to apply for a commercial mortgage in order to make some changes to your current business, the lender will look at the current situation of your business as a major deciding factor. If you are applying for a commercial mortgage in order to start a new business, they will focus on the potential of the particular business you are desiring to create. Of course, good credit helps as well. If you've always wanted your own business or to improve your current business, you can do so with a commercial loan.

Are you interested in applying for a commercial mortgage? Contact a lender today.

House Financial Services Committee Passes Comprehensive FHA Reform

Washington, DC—The House Financial Services Committee passed H.R. 1852, the “Expanding American Homeownership Act of 2007” introduced by Representative Maxine Waters, Chairwoman of the Subcommittee on Housing and Community Opportunity, and Barney Frank, Chairman of the Financial Services Committee.  The bill would revitalize the Federal Housing Administration (FHA) to restore its historical role in ensuring critically needed mortgage loans for low and middle income families by authorizing zero down payment loans, directing the Department of Housing and Urban Development (HUD) to serve higher risk borrowers who would otherwise turn to predatory and high priced mortgage loan alternatives, and by raising loan limits so that FHA can serve high cost housing markets.  The bill now awaits a vote by the full House of Representatives.

“The passage of this bill is a major step towards making FHA relevant again in today’s unstable mortgage market where low and moderate income borrowers have been squeezed into unaffordable loan products with no safe options for refinancing, or for entering the housing market as first time, particularly in high cost areas of the country,” said Rep. Maxine Waters, Chairwoman of the Subcommittee on Housing and Community Opportunity.  “I applaud Chairman Frank for passing this bill out of committee and I call on the Senate to work quickly to modernize FHA and help strengthen the housing market and the economy, as soon as possible.

Specifically, the bill modernizes the FHA and brings it into the realities of the housing market in the 21st century by:

• Increasing loan limits in high cost areas of the country like California, New York, and Massachusetts, where FHA has been driven from the market, forcing many borrowers to turn to high-cost financing and other non-traditional loan products. 
• Authorizing zero down and lower down payment FHA loans for homebuyers who could not otherwise make the down payment required under current FHA rules, to make FHA more consistent with other private sector loan products.
• Directing FHA to underwrite to borrowers with higher credit risk than FHA currently serves that are still creditworthy to take out a mortgage loan, but are otherwise now being driven into the subprime loan market, with much higher mortgage rates.
• Permanently eliminating the current statutory volume cap on FHA reverse mortgage loans to permit this program to meet the growing needs of home equity rich, cash poor seniors citizens that need help paying bills or needed home costs, while capping the fees that loan originators can charge senior citizens
• Reinvesting increased FHA profits created by the bill in housing counseling and affordable housing fund activities

To view the rest of this news release from Congressman Barney Frank please visit www.house.gov/frank.

Conventional Loans

If you do not qualify for a Veteran loan or an FHA loan does not suit your needs, a conventional loan may be a good option for you. A conventional loan is secured by government sponsored entities, such as Freddie Mac and Fannie Mae. Conventional loans aren't usually the best choice for first time home buyers or those with little cash to put down toward their home.

Are you interested in applying for a Conventional Loan? If so, contact a lender in your area today.

Even though conventional loans required a bigger down payment than other types of loans, and also require higher credit scores, the benefits that come along with these requirements make it a great loan to qualify for.

Benefits of a Conventional Loan:

• The ability to have more than one mortgage
• Less inspections required
• Lower interest rates with good credit scores
• Quicker closing dates

There are limits with conventional loans, however these limits are usually higher than other loan programs offer. For example, a single family seeking to take out a conventional loan on a home are limited to $417,000. So, if you have great credit and a good amount of money for a down payment, why not consider a conventional loan? Apply for one today!

Are you interested in applying for a Conventional Loan? If so, contact a lender in your area today.

Down Payments

A down payment is a payment you put down when you purchase a home. For example, if you are getting a loan for a $100,000 home, but you make a down payment of $20,000, than you only need to take a loan out for $80,000.

You have the down payment, now you need the mortgage. Contact a lender today.

Home loans usually require some sort of down payment, even if it's a very small one. You always have the option to put down more than required. This can have it's advantages and it's disadvantages. The disadvantages, of course, would be the fact that your bank account may be close to depleted after a hefty downpayment. On the other hand, if it's affordable, it offers plenty of advantages. Making a downpayment will:

• Help Get a Percentage of the Overall Payment Out of the Way
• Immediately Put Equity Into Your Home
• Make Monthly Payments Lower
• Possibly Make Interest Rates Lower
• Cancel out Mortgage Insurance If You Put Down More Than 20%

Some mortgage lenders, however, will offer their loans to you for zero money down. These loans are called 100%, 103%, or 107% mortgages. This usually only applies to home loans, as commercial mortgages usually require downpayments. If you have the money saved up for your down payment, or even if you don't, contact a lender in your area today to discuss your needs.

You have the down payment, now you need the mortgage. Contact a lender today.

Secretary Paulson to Visit Florida, Missouri, California to Discuss the Administration’s Efforts to Reduce Foreclosures

Federal Financial Regulatory Agencies Issue Final
Statement on Subprime Mortgage Lending

WASHINGTON — The federal financial regulatory agencies today issued a final Statement on Subprime Mortgage Lending to address issues relating to certain adjustable-rate mortgage (ARM) products that can cause payment shock.

The statement describes the prudent safety and soundness and consumer protection standards that institutions should follow to ensure borrowers obtain loans they can afford to repay. These standards include a fully indexed, fully amortized qualification for borrowers and cautions on risk-layering features, including an expectation that stated income and reduced documentation should be accepted only if there are documented mitigating factors that clearly minimize the need for verification of a borrower’s repayment capacity. Consumer protection standards include clear and balanced product disclosures to customers and limits on prepayment penalties that allow for a reasonable period of time, typically at least 60 days, for customers to refinance prior to the expiration of the initial fixed interest rate period without penalty.

The statement reinforces the April 17, 2007 interagency Statement on Working with Borrowers , in which the agencies encouraged institutions to work constructively with residential borrowers who are financially unable or reasonably expected to be unable to meet their contractual payment obligations on their home loans. Workout arrangements that are consistent with safe and sound lending practices are generally in the long-term best interest of both the financial institution and the borrower.

The agencies published the proposed Statement on Subprime Mortgage Lending for comment on March 8, 2007. Comments were received from financial institutions, trade associations, consumer and community organizations, members of Congress, state and local officials, and members of the public. The agencies made a number of changes to the proposal to respond to commenters’ concerns and to provide additional clarity.

FHA Loans

An FHA loan is a home loan that was established by the government in 1934. It is a great option for first time home buyers or those who do not have much to put down on a home, as an FHA loan can allow you to purchase the home with as little as 3% down, or even no money down in some cases.

Are you interested in an FHA loan? If so, contact a lender in your area today.

Additional benefits of an FHA loan:

• Lower interest rate
• Does not usually require good credit
• Makes it possible to obtain a mortgage even if bankruptcy was filed in the past
• Allows individuals the opportunity to purchase their first home

FHA loans are available to you with an adjustable rate or a fixed rate, just like other mortgages. The choice to choose an adjustable rate or a fixed rate is dependent on you and your situation, as no one choice is "better" than the other. A good way to lower interest rates even more is by paying for "points". Points are paid to the lender and the more you pay, the lower your interest rate will be.

Deciding between an FHA loan and all the other loans out there can be tough. While an FHA loan is a good option, it may not be the choice for you. For example, with an FHA loan, you can only have one at a time. This is not a good choice for those wishing to purchase multiple properties for investment purposes. On the other hand, this may not even be an issue to you at all - therefore making it a good, possible choice.

Are you interested in an FHA loan? If so, contact a lender in your area today.

FHA Mortgage Insurance Limits Raised In Certain Counties In Idaho

More homebuyers in Boise and throughout Ada, Canyon, Gem and Owyhee Counties may be able to use FHA insured mortgages and home improvement loans under new mortgage limits announced today by the U.S. Department of Housing and Urban Development. The FHA mortgage limit for a single-family unit, condominium or manufactured home is $225,150. This represents an increase of nearly 12.5 percent from the previous limit of $200,160 set in January 2006. Limits for a duplex are $256,248, a three-unit home $309,744, and for a four-unit home $384,936. For a complete list of FHA insurance limits in Idaho counties, go to https://entp.hud.gov/idapp/html/hicost1.cfm.

These increases may allow more prospective homebuyers to qualify for FHA insured mortgages and home improvement loans to purchase or refinance one to four-unit residences including condos and manufactured homes. The higher limits will help seniors, age 62 or older, seeking FHA insured reverse mortgages (Home Equity Conversion Mortgages) to potentially access more equity from their homes. "This significant increase in FHA loan limits is in response to continuing rapid increases in the average price of housing in Ada, Canyon, Gem and Owyhee Counties and will help more Idahoans purchase or refinance homes using FHA insured mortgages," said Boise Field Office Director Constance Hogland. "FHA loans are particularly appealing for first-time homebuyers and those with less than perfect credit who might otherwise seek loans from the sub prime market. With FHA's 3 percent downpayment, this means FHA loans can be used to purchase a home with a sales price up to $232,113."

Many homebuyers are attracted to FHA insured loans because of the program's benefits: a low 3 percent down payment, which can be 100 percent gifted from an acceptable source such as a downpayment assistance program or family member, liberal underwriting criteria, market rate interest, and consumer protections. FHA loans are assumable, have no income limits, no minimum credit scores and are not restricted to first-time homebuyers.
Recent streamlining of FHA insured loan processing has made these loans easier to use for lenders, Realtors and consumers.

State Orders $46,000 in Fines Against Promoters of Illegal Mortgage Rescue Scheme

Some Oregon victims lost their longtime homes

(Salem) — The Oregon Department of Consumer and Business Services issued final orders to cease and desist and levied fines against two men, one from Portland, for operating a mortgage rescue scheme that claimed to
pay off homeowner mortgages.

Rex A. Haragan of Portland, doing business as Bountiful LLC, and Kenneth G. Titus Sr. of Schenectady, N.Y.,doing business as Redwood Trust, were fined $23,000 each for securities violations and violations of Oregon
laws governing credit services organizations.

The Redwood Trust business entity operated by Titus Sr. is not the same as and has no connection to Redwood Trust, Inc., based in Mill Valley, Calif., which trades on the New York Stock Exchange under the ticker symbol
RWT.

Haragan operated Bountiful LLC, a multi-level marketing organization that recruited approximately 45 representatives to locate prospects and promote the Redwood Trust grant program in exchange for tiered
commissions of up to 8 percent of the amount of the mortgage payoff. The Redwood Trust promoters claimed they would pay off or eliminate home mortgages of consumers who applied for grants, in exchange for upfront
fees of $3,000 or promissory notes for $5,000. The only known Bountiful LLC grant applicant whose mortgage was paid off by Redwood Trust was Haragan’s stepson. Redwood paid off his mobile home for less than
$20,000. Haragan received a commission on the transaction.

For the rest of this article please visit www.oregon.gov.

First Federal Launches 24-Hour Mortgage WebCenter With Instant Loan Approvals

Charleston --- First Federal has launched its online Mortgage WebCenter giving customers 24-hour access to mortgage loan applications and nearly instantaneous application decisions.

Customers can access the Mortgage WebCenter on First Federal’s website at firstfederal.com and can apply for a mortgage loan, research interest rates and loan programs and utilize an in-depth online mortgage resource center 365 days a year. Customers will receive a decision and lock in a rate within minutes for loan amounts up to $750,000.

“We believe our Mortgage WebCenter offers a huge boost in terms of customer service,” said Todd Huss, vice president of residential lending at First Federal. “We took the time consuming traditional mortgage process, and made it a simple activity. Our distinguishing factor is the quick turnaround on the decision. Other mortgage lenders are taking applications online, but First Federal is giving customers a decision within seconds of completing their application.

It’s all about accommodating our customers. It’s another option, but we will continue to help customers through every step of the process depending on their needs.”

The WebCenter is located on First Federal’s secure website, and allows customers to complete an application at their convenience. The application can be completed in approximately 20 minutes. “We only ask questions that are absolutely necessary to make a decision, which greatly reduces the time it takes to complete and receive a decision,” Huss said.

The site also contains a resource center that provides answers to frequently asked questions, a glossary of common mortgage lending terms, a detailed listing of estimated closing costs and a rate calculator that allow the customer to experiment with different mortgage products.

Visitors to the site can also sign up for Rate Watch, which monitors First Federal’s mortgage rates and sends an automatic, customized rate quote. “Rate Watch is great for customers who want to refinance or make a purchase once market rates reach a determined level” Huss said. “Just tell us what rate you're looking for, and we'll notify you when it hits your target. You can then go online to complete an application and lock your rate.”

First Time Home Buyers

You have been renting up until now and you are finally making the decision to purchase a home. Congratulations - this will be one of the smartest moves you have ever made. It may seem a little scary, because it is a bold decision, and with every bold, big decision, risks are involved. The best things in life come with risks, so stop being scared and nervous, and get ready to be excited!

Are you ready to buy your first home? Contact a lender in your area today.

There are plenty of opportunities and types of loans out there for those just starting off and that have limited funds. These types of loans can help you get a good start in the home buying world, and in the end, you will find out your mortgage payment is practically the same as your rent.

First Time Home Buyer Programs Can Offer The Following:

• Little or no down payment requirements
• Limits on certain fees that lenders charge
• Deferring of payments
• Lowering or completely eliminating interest costs
• Offers for other types of grants and loans

First, you need to establish what exactly you can afford so you don't get in over your head. Once you establish how much your monthly payments can be, you can figure out the maximum amount you can afford to spend on a home and then find a lender. There are plenty of first time home buyer programs that lenders can offer you. Some good options for first time home buyers include FHA loans, 100% mortgages, and VA loans for veterans. There are also various other types of special programs that can be offered to you depending on what state you reside in.

Are you ready to buy your first home? Contact a lender in your area today.

Fixed Rate Mortgages

A fixed rate is usually the most popular pick when it comes to mortgages. Unlike an adjustable rate mortgage, a fixed rate mortgage gives you the interest rate up front, before your mortgage is even 100% official. You will know the exact amount of interest you will be paying each month for your entire mortgage term.

Are you interested in a Fixed Rate Mortgage? Contact a lender in your area today.

Advantages of a Fixed Rate Mortgage:

• Allows you to budget your finances better
• No Surprises, interest rates remain the same
• Offers more stability
• Good choice for those with average to good credit

If your credit is good and you think you can get a generally low interest rate, then a fixed rate would probably be your best bet because it is a good rate that you will always have. However, if the fixed rate you will be receiving is actually a high rate, you may be better off with an adjustable rate because you will have some periods in which your rate will be much lower, which is something you couldn't have with a fixed rate.

Generally, fixed rates are a much simpler, easier process. They are usually picked over adjustable rates, and are especially popular among first time home buyers. If you plan on living in your home for a long time, or if you have an "average" income, a fixed rate may be the best choice for you as well. You might already have a mortgage with an adjustable rate, and have been looking to refinance to a fixed rate - this may be in your best interest. Contact a lender to discuss your options.

Are you interested in a Fixed Rate Mortgage? Contact a lender in your area today.

FTC Staff Files Mortgage Disclosure Comments with Banking Agencies

Reverse Mortgages:
Get the Facts Before Cashing In On Your Home’s Equity

Whether seeking money to finance a home improvement, pay off a current mortgage, supplement their retirement income, or pay for healthcare expenses, many older Americans are turning to “reverse” mortgages. They allow older homeowners to convert part of the equity in their homes into cash without having to sell their homes or take on additional monthly bills.

In a “regular” mortgage, you make monthly payments to the lender. But in a “reverse” mortgage, you receive money from the lender and generally don’t have to pay it back for as long as you live in your home. Instead, the loan must be repaid when you die, sell your home, or no longer live there as your principal residence. Reverse mortgages can help homeowners who are house-rich but cash-poor stay in their homes and still meet their financial obligations.

To qualify for most reverse mortgages, you must be at least 62 and live in your home. The proceeds of a reverse mortgage (without other features, like an annuity) are generally tax-free, and many reverse mortgages have no income restrictions.

Three Types of Reverse Mortgages
The three basic types of reverse mortgage are: single-purpose reverse mortgages, which are offered by some state and local government agencies and nonprofit organizations; federally-insured reverse mortgages, which are known as Home Equity Conversion Mortgages (HECMs), and are backed by the U. S. Department of Housing and Urban Development (HUD); and proprietary reverse mortgages, which are private loans that are backed by the companies that develop them.

Single-purpose reverse mortgages generally have very low costs. But they are not available everywhere, and they only can be used for one purpose specified by the government or nonprofit lender, for example, to pay for home repairs, improvements, or property taxes. In most cases, you can qualify for these loans only if your income is low or moderate.

HECMs and proprietary reverse mortgages tend to be more costly than other home loans. The up-front costs can be high, so they are generally most expensive if you stay in your home for just a short time. They are widely available, have no income or medical requirements, and can be used for any purpose.

Before applying for a HECM, you must meet with a counselor from an independent government-approved housing counseling agency. The counselor must explain the loan’s costs, financial implications, and alternatives. For example, counselors should tell you about government or nonprofit programs for which you may qualify, and any single-purpose or proprietary reverse mortgages available in your area.

The amount of money you can borrow with a HECM or proprietary reverse mortgage depends on several factors, including your age, the type of reverse mortgage you select, the appraised value of your home, current interest rates, and where you live. In general, the older you are, the more valuable your home, and the less you owe on it, the more money you can get.

The HECM gives you choices in how the loan is paid to you. You can select fixed monthly cash advances for a specific period or for as long as you live in your home. Or you can opt for a line of credit, which allows you to draw on the loan proceeds at any time in amounts that you choose.You also can get a combination of monthly payments plus a line of credit.

HECMs generally provide larger loan advances at a lower total cost compared with proprietary loans. But owners of higher-valued homes may get bigger loan advances from a proprietary reverse mortgage. That is, if you have a higher appraised value without a large mortgage, then you may likely qualify for greater funds. Location (for example, your neighborhood) is only one part of the determination of appraised value.

Loan Features
Reverse mortgage loan advances are not taxable, and generally do not affect Social Security or Medicare benefits. You retain the title to your home and do not have to make monthly repayments. The loan must be repaid when the last surviving borrower dies, sells the home, or no longer lives in the home as a principal residence. In the HECM program, a borrower can live in a nursing home or other medical facility for up to 12 months before the loan becomes due and payable.
As you consider a reverse mortgage, be aware that:

• Lenders generally charge origination fees and other closing costs for a reverse mortgage.
• Lenders also may charge servicing fees during the term of the mortgage. The lender generally sets these fees and costs.
• The amount you owe on a reverse mortgage generally grows over time. Interest is charged on the outstanding balance and added to the amount you owe each month. That means your total debt increases over time as loan funds are advanced to you and interest accrues on the loan.
• Reverse mortgages may have fixed or variable rates. Most have variable rates that are tied to a financial index and will likely change according to market conditions.
• Reverse mortgages can use up all or some of the equity in your home, leaving fewer assets for you and your heirs. A “nonrecourse” clause, found in most reverse mortgages, prevents either you or your estate from owing more than the value of your home when the loan is repaid.
• Because you retain title to your home, you remain responsible for property taxes, insurance, utilities, fuel, maintenance, and other expenses. So, for example, if you don’t pay property taxes or maintain homeowner’s insurance, you risk the loan becoming due and payable.
• Interest on reverse mortgages is not deductible on income tax returns until the loan is paid off in part or whole.

Getting a Good Deal
If you are considering a reverse mortgage, shop around to compare your options and the offered terms. Learn as much as you can about reverse mortgages before you talk to a counselor or lender. It will help you ask more informed questions, which could lead to a better deal.

• If you want to make a home repair or improvement or need help paying your property taxes, you may want to find out if you qualify for any low-cost single-purpose loans that may be available in your area. Area Agencies on Aging (AAAs) generally know about these programs. 
• If you are interested in a federally-insured HECM, know that all HECM lenders must follow HUD rules, and that many of the loan costs including the interest rate will be the same no matter which lender you select. Still, some costs including the origination fee, other closing costs, and servicing fees may vary among lenders.
• If you live in a higher-valued home, you may be able to borrow more from a proprietary reverse mortgage. But it generally will cost more. The best way to see key differences between a HECM and a proprietary loan is with a detailed side-by-side comparison of future costs and benefits. Many HECM counselors and lenders can provide you with this important information.
• No matter which type of reverse mortgage you are considering, be certain you understand all the conditions that could make the loan due and payable. Ask a counselor or lender to explain the Total Annual Loan Cost (TALC) rates, which show the projected annual average cost of a reverse mortgage, including all itemized costs.

Be a Savvy Consumer
Be cautious if anyone tries to sell you something, like an annuity, and suggests that a reverse mortgage would be an easy way to pay for it. If you don’t fully understand what they’re selling, or you’re not sure you need what they’re selling, be even more skeptical.

Keep in mind that your total cost would be the cost of what they’re selling plus the cost of the reverse mortgage. If you think you need what they’re selling, shop around before you buy.

No matter why you decide to take a reverse mortgage, you generally have at least three business days after signing the loan documents to cancel it for any reason without penalty. Remember that you must cancel in writing. The lender must return any money you have paid so far for the financing.

Ginnie Mae Guarantees First Home Equity Conversion Mortgage Mortgage-Backed Security

Ginnie Mae Increases Homeownership Opportunities for Veterans

What is a Home Equity Loan?

A home equity loan is also known as a second mortgage or it can be seen as borrowing from the money your home has accumulated in value or equity. This type of loan allows you to take advantage of your home's built-up equity. Equity is the difference between the value of your home or what it could be sold for and the amount that you currently owe on it. Homeowners regularly use a home-equity loan to pay off credit cards, home improvements, for a new car, or their child's college education.

Are you interested in applying for a home equity loan?  If so, contact a lender in your area today.

A home-equity loan is a good way to borrow money for two main reasons:

• The interest rate is usually one of the lowest loan rates a borrower can get
• The interest you pay on the loan is usually tax-deductible

You receive a home equity loan in one lump sum and that is paid off over a certain amount of time, usually with a fixed interest rate and payments broken up by month. These payments can be used for a number of different reasons including medical bills, debt consolidation, and home repairs.  Are your ready for a home equity loan?

Are you interested in applying for a home equity loan?  If so, contact a lender in your area today.

Home Mortgages

Although some people take out mortgages for commercial purposes, such as starting their own business, most people take out mortgages to purchase a home. Whether for investment purposes or you are just looking to have a home to live in, taking out a home mortgage is a very smart decision.

Are you interested in applying for a home mortgage? If so, contact a lender in your area today.

Types of Home Mortgages:

• FHA Loans
• Conventional Loans
• Veteran Loans
• First Time Home Buyer Programs
• New Home Mortgages
• And Much More!

There are several ways that home mortgages can make you money. The value of homes are continuing to rise, so if you purchase a home today and then decide in a few years that you would like a bigger home, would like to relocate, or that you are simply bored with the home you live in, turning around and selling it will usually make you a pretty nice profit. This is called "flipping".

Another way that obtaining a home mortgage can help make you money is renting out the home you are taking a mortgage out on. You can charge a monthly payment that is slightly higher than your mortgage payment, so not only is your mortgage payment getting paid every month, but you are making a profit as well. Some people do this with several different homes and they even do it with homes that are out of the state they live in. Even if you have just been wanting to purchase a home to live in, a home mortgage is what can make it all possible.

Are you interested in applying for a home mortgage? If so, contact a lender in your area today.

Comptroller Testifies on House Subprime Lending Bill

HUD MARKS WORLD AIDS DAY - AWARDS MODEL OREGON HOUSING PROGRAM WITH $1.4 MILLION GRANT

WASHINGTON- Housing and Urban Development Deputy Secretary Roy A. Bernardi today marked World AIDS Day 2006 by presenting nearly $1.4 million to a model Oregon program that provides critically needed housing and support services to persons living with HIV/AIDS The funding announced today is part of HUD's Housing Opportunities for Persons with AIDS (HOPWA) Program.

The Oregon Department of Human Services in Portland is awarded a grant of $1,373,293 to expand the scope of a HOPWA grant awarded in 2001 In partnership with the Cascade AIDS Project, the Oregon Statewide Supportive Community Re-entry Project will provide 55 units of rental assistance as permanent supportive housing for post-incarcerated persons living with HIV/AIDS

"HOPWA has been a great success and many of our local partners, like the State of Oregon, stand out," said Bernardi "Oregon’s use of HOPWA funds is a model for others demonstrating how expanding the reach of housing through a prisoner reentry program can literally change lives."

Housing assistance and related services funded by HOPWA are a vital part of the comprehensive system of care for those living with HIV/AIDS. A stable home environment is critical for low-income persons managing complex drug therapies and potential side effects from their treatments

The Oregon grant presented today is part of $286 million provided nationwide to support local HIV/AIDS housing programs this year The Bush Administration is seeking more than $300 million in HOPWA funding for FY 2007, representing a record for HUD’s principal HIV/AIDS housing effort.

Donnie Sanders was 28 years old when he entered Cascade AIDS Project after nearly three years in prison Facing the prospect of a life on the street without any real medical treatment, Sanders found stable housing through the program and is currently building a new, healthy life with his wife Sanders said, "Just being able to stay clean and sober allowed me to move forward quite a bit. As long as I’m here with housing and always moving forward, I have no problem."

AIDS has claimed the lives of more than 25 million people worldwide and another 38 million people are living with HIV, including over one million in the United States December 1st is World AIDS Day, a day established by the World Health Organization to focus global attention on the devastating impact of the HIV/AIDS epidemic.

HUD Celebrates First-Ever Fair Housing Education in America Day

The U.S. Department of Housing and Urban Development today announced its first-ever “Fair Housing Education in America Day” to be held on Wednesday, April 16, 2008. Designed for 4th through 6th grade students, this national education project will give teachers, parents and their children a basic understanding of the landmark Fair Housing Act.

This year marks the 40th anniversary of the Fair Housing Act. To mark this occasion, HUD’s Office of Fair Housing and Equal Opportunity (FHEO) and its fair housing partners will encourage schools across the country to instruct younger children about fair housing opportunities. Using a lesson plan developed by HUD, instructors will help to educate young people and to promote the principles of equal opportunity in housing.

“The goal of ‘Fair Housing Education in America Day’ is to start the conversation about fair housing opportunities at a young age,” said Kim Kendrick, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity. “It’s critically important to teach future generations of renters and home buyers about their rights under the law.”

The Fair Housing Act prohibits housing discrimination based on families with children, race, color, national origin, religion, disability, or sex and this April marks its 40th anniversary. Used to create awareness, Fair Housing Month is designed to educate people of all ages about the rights they have under the Fair Housing Act.

HUD Releases Tips for Avoiding Foreclosure

Information aimed at helping more homeowners stay in their home

WASHINGTON - Today, the U.S. Department of Housing and Urban Development (HUD) released its top 10 tips for homeowners who are facing foreclosure.

"These guidelines will assist homeowners who are struggling to pay their mortgage and could be threatened with foreclosure," said HUD Secretary Alphonso Jackson. "We want to encourage homeowners to take action and use every resource available so that they can get control of their finances and stay in their home."

If you are unable to make your mortgage payment:

1. Don't ignore the problem.
2. Contact your lender as soon as you realize that you have a problem.
3. Open and respond to all mail from your lender.
4. Know your mortgage rights.
5. Understand foreclosure prevention options.
6. Contact a non-profit housing counselor.
7. Prioritize your spending.
8. Use your assets.
9. Avoid foreclosure prevention companies.
10. Don't lose your house to foreclosure recovery scams!

To view more on this article please visit www.hud.gov.

HUD Stresses Preservation and Protection at Homeownership Summit

Jackson lays out six areas of agreement for renewing confidence in the homebuying process

WASHINGTON - The U.S. Department of Housing and Urban Development today hosted a Homeownership Summit with leading stakeholders in the housing community to discuss the impact of risky, high-priced loans, departmental actions against predatory lending and how modernizing the Federal Housing Administration will provide a safer alternative to exotic mortgages. Delivering the keynote address, HUD Secretary Alphonso Jackson laid out seven areas of agreement for preserving and protecting homeownership, helping new homeowners keep their homes and vastly improving lending practices.

"We must make the American Dream a realistic possibility for as many Americans as possible," said Secretary Jackson. "This is not an option; it is a duty. And that goes beyond policy-makers and regulators. It is a shared duty with investors, associations, consumers, and communities themselves."

Today's summit invited over 150 investors, consumer advocates, decision-makers and key advisors to assess the current housing situation and offer up recommendations. Secretary Jackson noted that all in attendance share the goal to make this an ownership society and achieving this goal begins with the recognition of common ground.

"HUD has vigorously investigated and prosecuted predatory lending. We have restrained or stopped several companies engaged in questionable practices. We must give consumers the highest possible confidence in the housing purchasing process. I believe we must create an extremely high expectation of transparency and honesty for lending on all levels and by all lenders," Jackson added.

For the full Homeowner Summit article please visit www.hud.gov/news.

OCC Makes Available Downloadable Consumer Illustrations of Information on Nontraditional Mortgage Products

WASHINGTON — The Office of the Comptroller of the Currency posted today on its Web site illustrations of consumer information for nontraditional mortgage products that can be downloaded and printed for easy production to assist bankers if they choose to use them.

The OCC has posted on its Web site both English (PDF) (Word) and Spanish (PDF) versions of the illustrations, as well as a template (PDF) (Word) for one of the illustrations that can be adjusted to reflect relevant economic conditions.

The federal banking agencies issued the final illustrations of consumer information on May 31, 2007, and agreed to post the illustrations in a downloadable form at a later date. Institutions are not required to use the illustrations. They may choose to use the illustrations, provide information based on the illustrations, or provide the consumer information described in the guidance in an alternate format.

The illustrations of consumer information are intended to help institutions implement the consumer protection portion of the Interagency Guidance on Nontraditional Mortgage Product Risks that the agencies published in the Federal Register on October 4, 2006.

Congressman Donnelly Introduces Legislation To Strengthen Manufactured Hosuing Market

Elkhart, IN - Congressman Joe Donnelly held a press conference at Patriot Homes in Elkhart with leaders in the manufactured housing industry to discuss legislation he introduced in the U.S. House of Representatives this week. The FHA Manufactured Housing Loan Modernization Act of 2007 would raise manufactured housing Title I loan limits and improve underwriting standards to make sure the program is actuarially sound.

“We have a strong tradition in Elkhart and other Indiana communities of delivering first class housing to Americans, and providing quality jobs for Hoosiers,” Donnelly said. “However, despite the great work of our local companies, this industry is in the midst of a nine-year downturn in housing production levels. I have been working very closely with the manufactured housing industry to learn what Congress can do to reverse this trend and I believe that this legislation would help revitalize the industry.”

The Federal Housing Administration (FHA) Title I mortgage insurance program insures loans made by private lenders to finance the purchase of manufactured homes that will be placed in land-lease communities or otherwise not classified as real property. 

Title I loan limits have not been adjusted for inflation since 1992 and the manufactured housing industry has experienced a major decline since.  In 1992, in the midst of the last downturn, FHA insured 30,000 Title I loans.  In 2006, that number went to less than 1,500.  In Indiana, that number went from 377 loans in 1992 to just four loans in 2006.

Ginnie Mae, which securitizes FHA loans, maintains that its decline in Title I activity is due to “structural problems” with the program.  They argue that it is very difficult for them to recoup losses when lenders go out of business.  This does not occur with Title II (real property), because insurance under that program is set on a loan-by-loan basis as opposed to a bundle of loans. 
 
For the rest of this article please visit donnelly.house.gov.

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Martinez Looks To Revisit Mortgage Rules

Washington - The debate over how to curb predatory lending has a major element of deja vu for Sen. Mel Martinez, R-Fla.  In 2002 when he was HUD secretary, Martinez proposed a sweeping rule that would have overhauled mortgage purchases for home buyers, simplifying good faith estimates, requiring mortgage brokers to disclose more of their compensation and allowing lenders to offer one-stop mortgage packaging that could save an average of $700 per closing.

But the proposal triggered a massive backlash throughout the mortgage lending industry. Mortgage brokers protested greater disclosure of a little-known lending practice referred to as a yield spread premium (YSP); brokers and lenders wrangled over what should and should not be included in the good faith estimate; and settlement attorneys and title companies argued that the guaranteed mortgage package would put them out of business.

After Martinez was elected to the Senate in 2004, HUD Secretary Jackson withdrew the rule. But now Martinez would like to revisit some of those issues as Congress begins to tackle ways to curb predatory lending, which has taken on greater steam with more subprime lenders collapsing and foreclosures among homeowners rising.

"The problem is that we didn't fix those issues. I tried and we were about 75 to 80 percent of the way there. The president was very supportive and I think we would have been able to do it, but didn't manage to get it done before I left," Martinez said.

Given Martinez's experience on the issue, Senate Banking Chairman Dodd said he would reach out to Martinez as he crafts a measure. "He can be a tremendous help to us here. He did some great work back several years ago," Dodd noted during a recent hearing on the issue.

To view more information on this article please visit martinez.senate.gov.

Missouri Protect Homeowners From Unfair Mortgage Practices

Gov. Matt Blunt today signed legislation he called for to protect homeowners from fraudulent mortgage practices by strengthening both Missouri’s civil and criminal laws.

“Purchasing a home is an integral part of the American dream,” Gov. Blunt said. “I am pleased to sign this important legislation that will work to put an end to deceitful mortgage practices in our state and is aimed at getting the hucksters and charlatans out of the real estate business, and, in the worst cases – in jail.”

“This bill gives Missouri consumers protection against dishonest mortgage providers and strengthens the regulations under which mortgages are processed” Rep. Pearce said. “Missourians should feel more confident and secure when they sign the papers for a home loan. My thanks go to Governor Blunt for his strong support and for signing this important consumer protection measure into law.”

House Bill 2188, sponsored by Rep. David Pearce, shuts existing loopholes, creates civil and criminal penalties for mortgage fraud and further enhances consumer knowledge about the mortgage process. The legislation:

• Gives the Real Estate Commission and Real Estate Appraisers Commission power to suspend or revoke licenses for mortgage fraud
• Creates the crime of mortgage fraud, a class C felony, with up to 10 years of prison
• Enhances consumer protection laws to protect Missourians from fraudulent scams
• Provides the commissioner of the Division of Finance power to prohibit offenders from doing real estate lending in the state

Mortgage FAQ's

A: Both banks and mortgage companies can make mortgage loans. Banks, however, can also take deposits of your money, which can be placed into a savings account or checking account, but mortgage companies cannot take deposits.

Q: What is the highest rate of interest I can be charged on a mortgage loan?

A: PL 96-221 (a federal law) eliminated interest rate ceilings on all first lien mortgage loans in 1981.

Q: Does a federally related mortgage loan only involve FHA, VA or other government sponsored loans?

A: No, RESPA covers most conventional loans too. See the statute or regulations for the definition of a federally related mortgage loan.

Q: Are home equity loans covered under RESPA?

A: Yes, home equity loans secured by residential property are covered.

Q: Must a mortgage broker disclose payments he receives that the borrower does not pay for directly?

A: Yes. The mortgage broker must disclose all payments and fees he receives whether they are received directly from the borrower or indirectly from the lender.

Q: Must a mortgage servicing transfer notice be given for a prospective table funded transaction?

A: Yes, by the mortgage broker.

Q: How do I apply for a VA guaranteed loan?

A: You can apply for a VA loan with any mortgage lender that participates in the VA home loan program. At some point, you will need to get a Certificate of Eligibility from VA to prove to the lender that you are eligible for a VA loan.

Q: Where a mortgage broker is used, is it the mortgage broker's responsibility to provide the Good Faith Estimate (GFE) to consumers, or is that the lender's responsibility?

A: If the mortgage broker is not an exclusive agent of the lender, the broker should provide a GFE within 3 days of receiving an application. The lender is not required to send an additional GFE; however, it is the lender's responsibility to ascertain that one was sent and includes an estimate of all costs that are likely to occur. Where the broker is the exclusive agent of the lender, either the broker or the lender shall provide the GFE.

Q: What Is Property Tax?

A: Property tax is a local tax that is imposed by local government taxing districts and is based on a property’s value. Property taxes are collected and spent at the local level and is a major source of tax revenue for local government taxing districts.

Q: Who Pays Property Taxes and Who Is Affected By Them?

Anyone that owns real property such as land, buildings, and permanent fixtures such as fences, landscaping, driveways, sewers, or drains.

Mortgage Glossary

203(b): this FHA program which provides mortgage insurance to protect lenders from default; used to finance the purchase of new or existing one- to four family housing; characterized by low down payment, flexible qualifying guidelines, limited fees, and a limit on maximum loan amount.

203(k): this FHA mortgage insurance program enables homebuyers to finance both the purchase of a house and the cost of its rehabilitation through a single mortgage loan.

Amortization: repayment of a mortgage loan through monthly installments of principal and interest; the monthly payment amount is based on a schedule that will allow you to own your home at the end of a specific time period (for example, 15 or 30 years).

ARM: Adjustable Rate Mortgage; a mortgage loan subject to changes in interest rates; when rates change, ARM monthly payments increase or decrease at intervals determined by the lender; the Change in monthly -payment amount, however, is usually subject to a Cap.

Assessor: a government official who is responsible for determining the value of a property for the purpose of taxation.

Assumable mortgage: a mortgage that can be transferred from a seller to a buyer; once the loan is assumed by the buyer the seller is no longer responsible for repaying it; there may be a fee and/or a credit package involved in the transfer of an assumable mortgage.

Balloon Mortgage: a mortgage that typically offers low rates for an initial period of time (usually 5, 7, or 10) years; after that time period elapses, the balance is due or is refinanced by the borrower.

Cap: a limit, such as that placed on an adjustable rate mortgage, on how much a monthly payment or interest rate can increase or decrease.

Debt-to-income ratio: a comparison of gross income to housing and non-housing expenses; With the FHA, the-monthly mortgage payment should be no more than 29% of monthly gross income (before taxes) and the mortgage payment combined with non-housing debts should not exceed 41% of income.

Deed-in-lieu: to avoid foreclosure ("in lieu" of foreclosure), a deed is given to the lender to fulfill the obligation to repay the debt; this process doesn't allow the borrower to remain in the house but helps avoid the costs, time, and effort associated with foreclosure.

Default: the inability to pay monthly mortgage payments in a timely manner or to otherwise meet the mortgage terms.

Delinquency: failure of a borrower to make timely mortgage payments under a loan agreement.

Discount point: normally paid at closing and generally calculated to be equivalent to 1% of the total loan amount, discount points are paid to reduce the interest rate on a loan.

Down payment: the portion of a home's purchase price that is paid in cash and is not part of the mortgage loan.

Earnest money: money put down by a potential buyer to show that he or she is serious about purchasing the home; it becomes part of the down payment if the offer is accepted, is returned if the offer is rejected, or is forfeited if the buyer pulls out of the deal.

EEM: Energy Efficient Mortgage; an FHA program that helps homebuyers save money on utility bills by enabling them to finance the cost of adding energy efficiency features to a new or existing home as part of the home purchase.

Equity: an owner's financial interest in a property; calculated by subtracting the amount still owed on the mortgage loon(s)from the fair market value of the property.

Fannie Mae: Federal National Mortgage Association (FNMA); a federally-chartered enterprise owned by private stockholders that purchases residential mortgages and converts them into securities for sale to investors; by purchasing mortgages, Fannie Mae supplies funds that lenders may loan to potential homebuyers.

Fixed-rate mortgage: a mortgage with payments that remain the same throughout the life of the loan because the interest rate and other terms are fixed and do not change.

Foreclosure: a legal process in which mortgaged property is sold to pay the loan of the defaulting borrower.

Freddie Mac: Federal Home Loan Mortgage Corporation (FHLM); a federally-chartered corporation that purchases residential mortgages, securitizes them, and sells them to investors; this provides lenders With funds for new homebuyers.

Ginnie Mae: Government National Mortgage Association (GNMA); a government-owned corporation overseen by the U.S. Department of Housing and Urban Development, Ginnie Mae pools FHA-insured and VA-guaranteed loans to back securities for private investment; as With Fannie Mae and Freddie Mac, the investment income provides funding that may then be lent to eligible borrowers by lenders.

Good faith estimate: an estimate of all closing fees including pre-paid and escrow items as well as lender charges; must be given to the borrower within three days after submission of a loan application.

Index: a measurement used by lenders to determine changes to the Interest rate charged on an adjustable rate mortgage.

Interest rate: the amount of interest charged on a monthly loan payment; usually expressed as a percentage.

Loan fraud: purposely giving incorrect information on a loan application in order to better qualify for a loan; may result in civil liability or criminal penalties.

Loan-to-value (LTV) ratio: a percentage calculated by dividing the amount borrowed by the price or appraised value of the home to be purchased; the higher the LTV, the less cash a borrower is required to pay as down payment.

Lock-in: since interest rates can change frequently, many lenders offer an interest rate lock-in that guarantees a specific interest rate if the loan is closed within a specific time.

Loss mitigation: a process to avoid foreclosure; the lender tries to help a borrower who has been unable to make loan payments and is in danger of defaulting on his or her loan

Margin: an amount the lender adds to an index to determine the interest rate on an adjustable rate mortgage.

Mortgage banker: a company that originates loans and resells them to secondary mortgage lenders like :Fannie Mae or Freddie Mac.

Mortgage broker: a firm that originates and processes loans for a number of lenders.

Mortgage insurance: a policy that protects lenders against some or most of the losses that can occur when a borrower defaults on a mortgage loan; mortgage insurance is required primarily for borrowers with a down payment of less than 20% of the home's purchase price.

Mortgage insurance premium (MIP): a monthly payment -usually part of the mortgage payment - paid by a borrower for mortgage insurance.

Mortgage Modification: a loss mitigation option that allows a borrower to refinance and/or extend the term of the mortgage loan and thus reduce the monthly payments.

Origination fee: the charge for originating a loan; is usually calculated in the form of points and paid at closing.

Partial Claim: a loss mitigation option offered by the FHA that allows a borrower, with help from a lender, to get an interest-free loan from HUD to bring their mortgage payments up to date.

PITI: Principal, Interest, Taxes, and Insurance - the four elements of a monthly mortgage payment; payments of principal and interest go directly towards repaying the loan while the portion that covers taxes and insurance (homeowner's and mortgage, if applicable) goes into an escrow account to cover the fees when they are due.

PMI: Private Mortgage Insurance; privately-owned companies that offer standard and special affordable mortgage insurance programs for qualified borrowers with down payments of less than 20% of a purchase price.

Pre-foreclosure sale: allows a defaulting borrower to sell the mortgaged property to satisfy the loan and avoid foreclosure.

Premium: an amount paid on a regular schedule by a policyholder that maintains insurance coverage.

Prepayment: payment of the mortgage loan before the scheduled due date; may be Subject to a prepayment penalty.

Principal: the amount borrowed from a lender; doesn't include interest or additional fees.

Refinancing: paying off one loan by obtaining another; refinancing is generally done to secure better loan terms (like a lower interest rate).

Rehabilitation mortgage: a mortgage that covers the costs of rehabilitating (repairing or Improving) a property; some rehabilitation mortgages - like the FHA's 203(k) - allow a borrower to roll the costs of rehabilitation and home purchase into one mortgage loan.

Sweat equity: using labor to build or improve a property as part of the down payment.

Truth-in-Lending: a federal law obligating a lender to give full written disclosure of all fees, terms, and conditions associated with the loan initial period and then adjusts to another rate that lasts for the term of the loan.

Underwriting: the process of analyzing a loan application to determine the amount of risk involved in making the loan; it includes a review of the potential borrower's credit history and a judgment of the property value.

VA: Department of Veterans Affairs: a federal agency which guarantees loans made to veterans; similar to mortgage insurance, a loan guarantee protects lenders against loss that may result from a borrower default.

Mortgage Insurance

Mortgage insurance is necessary when one takes out on a mortgage and puts down less than 20% for a down payment. Since most people only put down 5%-10% of the property value as a down payment, a lot of people are required to pay mortgage insurance. Mortgage insurance protects the lenders in case you default on your payments.

Are you interested in applying for a mortgage? Contact a lender today.

Mortgage insurance is something that is paid monthly along with your mortgage payments. The amount you are borrowing and the amount that you are putting down are the two major factors in determining how much your monthly mortgage insurance payments will be. Although mortgage insurance may be associated with negativity, there are many positive aspects to focus on as well. Keep in mind that:

• It is a small amount paid monthly
• Mortgage Insurance allows you to purchase a more expensive home
• It will eventually stop when the loan-to-value ratio reaches 80%
• It makes it possible for those with no money to put down to buy a home

If you are still not convinced that mortgage insurance isn't all that bad, and you have little to no money to put down for a home, don't be discouraged. There are some tricks that people use in order to avoid mortgage insurance when obtaining their mortgage. One thing you can do is agree to pay more interest. The disadvantage to this is that you will be stuck with that higher interest rate until your mortgage term ends. The upside, however, is that it is tax deductible. Another option that is available is taking out an 80-10-10 loan. This involves putting down 10%, and then taking out two separate loans for your home: one for 80% of the home and than one for 10% of the home. Since neither of these loans involve you taking out a loan that's more than 80% of the home value, you will avoid mortgage insurance.

Are you interested in applying for a mortgage? Contact a lender today.

Mortgage Lending Transactions Information Available

September 08, 2006

The Federal Financial Institutions Examination Council (FFIEC) today announced the availability of data for the year 2005 on mortgage lending transactions at 8,848 financial institutions covered by the Home Mortgage Disclosure Act (HMDA) in metropolitan statistical areas (MSAs) throughout the nation. The HMDA data made available today include disclosure statements for each financial institution, aggregate data for each MSA, nationwide summary statistics regarding lending patterns, and the Loan Application Register (LAR), modified for borrower privacy, submitted by each institution to its supervisory agency by March 1, 2006. The FFIEC prepares and distributes these data products on behalf of its member agencies—the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, National Credit Union Administration, Office of the Comptroller of the Currency, and Office of Thrift Supervision—and the Department of Housing and Urban Development.

The HMDA data show disposition of loan applications (for example, originated or denied) detailed by property location, applicant characteristics (such as race, ethnicity, sex, and income), and census tract characteristics (minority composition and income). For the second year, the data reflect information about: loan prices; whether a loan is subject to HOEPA (the Home Ownership and Equity Protection Act); whether a loan or application relates to manufactured housing; and whether a loan is secured by a first or subordinate lien, or is unsecured.
 
The addition of loan price information to the HMDA data is related to the substantial growth in the higher-priced segment of the mortgage market. Although affording many consumers greater access to credit, this growth also has led to concerns about the appropriateness of loan terms and lending practices and the potential for unequal treatment of borrowers. While the HMDA price data alone cannot be used to determine fair lending violations, they can facilitate the fair lending examination and enforcement process, as well as promote market efficiency.

The aggregate 2005 data show that the incidence of higher-priced lending (that is, the proportion of loans where the spread between the rate on the loan and the yield on comparable Treasury securities exceeds specified thresholds) was significantly higher overall in 2005 than in 2004. The data also show that the incidence of higher-priced lending, as well as the disposition of loan applications, varies by loan product, lender, geographic market, race, and ethnicity. When viewed at the aggregate level, differences in the incidence of higher-priced lending between racial and ethnic groups, which were shown in the 2004 data, increased from 2004 to 2005. Caution should be exercised, however, when comparing the 2005 loan price data with corresponding data for 2004, because a number of factors can affect whether loans are reported as higher-priced. These factors include changes in the interest rate environment – specifically, in the relationship between short-term and long-term interest rates – as well as changes in lenders’ business practices and in consumers’ borrowing practices or credit risk profiles.

The federal banking agencies analyze HMDA loan price data, in conjunction with other information, when evaluating fair lending risk. The Interagency Fair Lending Examination Procedures direct examiners to evaluate an institution’s fair lending risk by considering a variety of information and risk factors. Risk factors for pricing discrimination include, but are not limited to, the relationship between loan pricing and compensation of loan officers or brokers; the presence of broad pricing discretion; the use of a system of risk-based pricing that is not empirically based and statistically sound; and consumer complaints. The HMDA loan price data are analyzed in conjunction with these other factors to assess an institution’s level of risk for pricing discrimination.

Although HMDA data may be used to facilitate fair lending supervision and enforcement, it is not possible to conclude whether a lender is complying with fair lending laws from HMDA data alone. The HMDA data do not include many potential determinants of loan pricing, such as the borrower's credit history, debt-to-income ratio, and the loan-to-value ratio. Thus, when the federal banking agencies conduct examinations involving loan pricing, they collect additional information through the fair lending examination process before reaching a determination regarding an institution's compliance with fair lending laws. (For more information, see the FFIEC's FAQs as noted above.) Users of the 2005 data should also be aware that transition rules for reporting loans with application dates prior to 2004 raise important analytical issues. For example, for some loans in this category institutions are not required to report price data. For this reason, the FFIEC has included a data item on each institution's modified LAR data to allow users to identify such loans.

Mortgage Payments Sending You Reeling? Here’s What to Do

Regardless of the reason for your mortgage anxiety, the Federal Trade Commission (FTC), the nation’s consumer protection agency, wants you to know how to help save your home, and how to recognize and avoid foreclosure scams.

Know Your Mortgage

Do you know what kind of mortgage you have? Do you know whether your payments are going to increase? If you can’t tell by reading the mortgage documents you received at settlement, contact your loan servicer and ask. A loan servicer is responsible for collecting your monthly loan payments and crediting your account.

• Hybrid Adjustable Rate Mortgages (ARMs): Mortgages that have fixed payments for a few years, and then turn into adjustable loans. Some are called 2/28 or 3/27 hybrid ARMs: the first number refers to the years the loan has a fixed rate and the second number refers to the years the loan has an adjustable rate. Others are 5/1 or 3/1 hybrid ARMs: the first number refers to the years the loan has a fixed rate, and the second number refers to how often the rate changes. In a 3/1 hybrid ARM, for example, the interest rate is fixed for three years, then adjusts every year thereafter.
• ARMs: Mortgages that have adjustable rates from the start, which means your payments change over time.
• Fixed Rate Mortgages: Mortgages where the rate is fixed for the life of the loan; the only change in your payment would result from changes in your taxes and insurance if you have an escrow account with your loan servicer.

If you have a hybrid ARM or an ARM and the payments will increase — and you have trouble making the increased payments, find out if you can refinance to a fixed-rate loan. Review your contract first, checking for prepayment penalties. Many ARMs carry prepayment penalties that force borrowers to come up with thousands of dollars if they decide to refinance within the first few years of the loan. If you’re planning to sell soon after your adjustment, refinancing may not be worth the cost. But if you’re planning to stay in your home for a while, a fixed-rate mortgage might be the way to go. Online calculators can help you determine your costs and payments.

If You Are Behind On Your Payments

If you are having trouble making your payments, contact your loan servicer to discuss your options as early as you can. Most loan servicers are willing to work with customers they believe are acting in good faith, and those who call them early on. The longer you wait to call, the fewer options you will have. After you’ve missed three or four payments and your loan is in default, most loan servicers won’t accept a partial payment of what you owe. They will start foreclosure unless you can come up with the money to cover all your missed payments, plus any late fees.

Avoiding Default and Foreclosure

Reinstatement: You pay the loan servicer the entire past-due amount, plus any late fees or penalties, by a date you both agree to. This option may be appropriate if your problem paying your mortgage is temporary.

Repayment plan: Your servicer gives you a fixed amount of time to repay the amount you are behind by adding a portion of what is past due to your regular payment. This option may be appropriate if you’ve missed only a small number of payments.

Forbearance: Your mortgage payments are reduced or suspended for a period you and your servicer agree to. At the end of that time, you resume making your regular payments as well as a lump sum payment or additional partial payments for a number of months to bring the loan current. Forbearance may be an option if your income is reduced temporarily (for example, you are on disability leave from a job, and you expect to go back to your full time position shortly). Forbearance isn’t going to help you if you’re in a home you can’t afford.

Loan modification: You and your loan servicer agree to permanently change one or more of the terms of the mortgage contract to make your payments more manageable for you. Modifications can include lowering the interest rate, extending the term of the loan, or adding missed payments to the loan balance. A loan modification may be necessary if you are facing a long-term reduction in your income.

Before you ask for forbearance or a loan modification, be prepared to show that you are making a good-faith effort to pay your mortgage. For example, if you can show that you’ve reduced other expenses, your loan servicer may be more likely to negotiate with you.

Selling your home: Depending on the real estate market in your area, selling your home may provide the funds you need to pay off your current mortgage debt in full.

Bankruptcy: Personal bankruptcy generally is considered the debt management option of last resort because the results are long-lasting and far-reaching. A bankruptcy stays on your credit report for 10 years, and can make it difficult to obtain credit, buy another home, get life insurance, or sometimes, even get a job. Still, it is a legal procedure that can offer a fresh start for people who can’t satisfy their debts.

If you and your loan servicer cannot agree on a repayment plan or other remedy, you may want to investigate filing Chapter 13 bankruptcy. If you have a regular income, Chapter 13 may allow you to keep property, like a mortgaged house or car, that you might otherwise lose. In Chapter 13, the court approves a repayment plan that allows you to use your future income toward payment of your debts during a three-to-five-year period, rather than surrender the property. After you have made all the payments under the plan, you receive a discharge of certain debts.

To learn more about Chapter 13, visit www.usdoj.gov/ust; it’s the website of the U.S. Trustee Program, the organization within the U.S. Department of Justice that supervises bankruptcy cases and trustees.

If you have a mortgage through the Federal Housing Administration (FHA) or Veterans Administration (VA), you may have other foreclosure alternatives. Contact the FHA (http://www.fha.gov/) or VA (http://www.homeloans.va.gov/) to discuss your options.

Contacting Your Loan Servicer

Before you have any conversation with your loan servicer, prepare. Record your income and expenses, and calculate the equity in your home. To calculate the equity, estimate the market value less the balance of your first and any second mortgage or home equity loan. Then, write down the answers to the following questions:

• What happened to make you miss your mortgage payment(s)? Do you have any documents to back up your explanation for falling behind? How have you tried to resolve the problem?
• Is your problem temporary, long-term, or permanent? What changes in your situation do you see in the short term, and in the long term? What other financial issues may be stopping you from getting back on track with your mortgage?
• What would you like to see happen? Do you want to keep the home? What type of payment arrangement would be feasible for you?

• Keep notes of all your communications with the servicer, including date and time of contact, the nature of the contact (face-to-face, by phone, email, fax or postal mail), the name of the representative, and the outcome.
• Follow up any oral requests you make with a letter to the servicer. Send your letter by certified mail, “return receipt requested,” so you can document what the servicer received. Keep copies of your letter and any enclosures.
• Meet all deadlines the servicer gives you.
• Stay in your home during the process, since you may not qualify for certain types of assistance if you move out. Renting your home will change it from a primary residence to an investment property. Most likely, it will disqualify you for any additional “workout” assistance from the servicer. If you choose this route, be sure the rental income is enough to help you get and keep your loan current.

New Law Requiring Mortgage Loan Originators to be Authorized

The New York State Banking Department today announced details of its regulatory guidelines and supervisory procedures for authorizing mortgage loan originators (MLOs) beginning in January. Article 12-E of the New York Banking Law, which goes into effect on Jan. 1, 2008, requires individuals to obtain authorization from the Superintendent of Banks before engaging in mortgage loan origination with respect to New York residential real estate.

“New York’s participation in this multi-state effort to enroll all mortgage loan originators (MLOs) is a testament to our commitment to reducing mortgage fraud and identifying individuals who attempt to evade enforcement by simply migrating across state lines,” said Richard H. Neiman, Superintendent of Banks. “By requiring MLOs to be authorized by the Banking Department, not just the firms that employ them, we are creating a heightened level of protection for consumers and generating a greater sense of stability in an industry that has been significantly impacted by the recent subprime crisis.”

The Banking Department will be using the Nationwide Mortgage Licensing System (NMLS), which goes into effect on Jan. 2, 2008, as the initial step in the application process. New York is joining 40 other states who also signed on to use the NMLS, which was developed by the Conference of State Banking Supervisors (CSBS) and the American Association of Residential Mortgage Regulators (AARMR). In addition to the detailed online application through the NMLS, individuals will be required to submit supplementary documents directly to the Banking Department, including fingerprints, credit history, and documentation related to their financial and criminal disclosures.

An estimated 40,000 applications will be received and processed before the January 2010 deadline for full compliance with the law. The timing for submitting applications, which is based on the MLO’s status prior to Jan. 1, 2008, will be staggered over the coming year. Individuals who become MLO's on or after Jan. 1, 2008 must file an application for authorization as soon as possible after employment. MLOs employed by or affiliated with a New York mortgage banker or mortgage broker before Jan. 1, 2008 must file an application for authorization by July 1, 2008 or such later date as the Superintendent may agree to with their employer.

The Banking Department created a dedicated section on their Web site to ensure that all MLOs, as well as the mortgage bankers and brokers they are employed by or affiliated with, have all of the information necessary to ensure compliance. Information on the Web site includes an overview of Article 12-E of Banking Law; the application process; and answers to the most frequently asked questions about compliance.

OCC Focuses on Employer Assisted Mortgage Programs

WASHINGTON — The Office of the Comptroller of the Currency (OCC) today released a Community Developments Insights report entitled, “Understanding Employer Assisted Mortgage Programs: A Primer for National Banks,” highlighting key features of employer assisted mortgage programs and opportunities for bank involvement with these initiatives.

“America’s labor force is being squeezed out of many high cost housing markets,” observed Comptroller of the Currency John C. Dugan, “and the gap between affordably priced housing and wage increases has been widening. Employer assisted mortgage programs provide a good opportunity to help close that gap in many communities.”

Employers, including national banks, are recognizing the benefits of providing mortgage assistance that allows their employees to live affordably closer to their work site. Such programs help employers attract and retain valuable employees. This is particularly important when employees are emergency first responders, or when they must commute long distances to find affordable housing.

Some employer assisted programs include a forgivable second mortgage, closing cost assistance, and homeownership education as an employee benefit. Some banks offer these mortgage programs to their own employees, or provide mortgage financing and other services to local employers offering their own employer assistance programs.

For the full article please visit www.occ.treas.gov.

Ocwen Enters 24-Hour Mortgage Processing Business

Ocwen Financial Corporation  announced today that it now offers 24-hour mortgage loan processing and closing services to mortgage lenders and brokers who want to shorten the closing cycle, reduce expense, and improve accuracy. Ocwen's loan processing services include all back-office activities, including loan opening, processing, underwriting, closing and interim servicing.

 "We're leveraging our 24-hour global workforce, along with our processing expertise as a highly rated subprime and special servicer and our strong financial base, to raise the bar on loan processing services. Lenders and brokers can reduce the time from application to close by a week or more using our loan processing solution. We believe this is a significant breakthrough from the offerings that exist in the marketplace today," said W. Michael Linn, Ocwen Executive Vice President.

Mr. Linn explained that Ocwen's leading edge document imaging technology is key to delivering clean loan packages and faster turn times. "Because we also perform due diligence services, we understand how important it is to produce clean loan files. After the lender or broker supplies the mortgage application, we image all supporting loan documents. This allows Ocwen personnel across multiple time zones to multi-task on a single file eliminating bottlenecks and speeding the entire process," he said.

According to Mr. Linn, Ocwen's loan processing services were designed to enable lenders and brokers to spend more time originating loans and less time tracking down credit reports, appraisals and title insurance reports.

"Our solution reduces or eliminates the hassles and expense of in-house processing, including the high cost of hiring, training, retaining, and paying in-house staff. In addition, by using our services, lenders or brokers will be positioned to meet fluctuating market conditions with rapid scalability," Mr. Linn added.

Payment-option ARM

A payment-option ARM is an adjustable-rate mortgage that allows you to choose among several payment options each month. The options typically include a traditional payment of principal and interest (which reduces the amount you owe on your mortgage). These payments may be based on a set loan term, such as a 15-, 30-, or 40-year payment schedule. An interest-only payment (which does not change the amount you owe on your mortgage). A minimum (or limited) payment (which may be less than the amount of interest due that month and may not pay down any principal). If you choose this option, the amount of any interest you do not pay will be added to the principal of the loan, increasing the amount you owe and increasing the interest you will pay.

Interest rates. The interest rate on a payment-option ARM is typically very low for the first 1 to 3 months (2%, for example). After that, the rate usually rises to a rate closer to that of other mortgage loans. Your monthly payments during the first year are based on the initial low rate, meaning that if you only make the minimum payment, it may not cover the interest due. The unpaid interest is added to the amount you owe on the mortgage, resulting in a highter balance. This is known as negative amortization. Also, as interest rates go up, your payments are likely to go up. Payment changes. Many payment-option ARMs limit, or cap, the amount the monthly minimum payment may increase from year to year. For example, if your loan has a payment cap of 7.5%, your monthly payment won't increase more than 7.5% from one year to the next (for example, from $1,000 to $1,075), even if interest rates rise more than 7.5%. Any interest you don't pay because of the payment cap will be added to the balance of your loan.

Payment-option ARMs have a built-in recalculation period, usually every 5 years. At this point, your payment will be recalculated (lenders use the term recast) based on the remaining term of the loan. If you have a 30-year loan and you are at the end of year 5, your payment will be recalculated for the remaining 25 years. The payment cap does not apply to this adjustment. If your loan balance has increased, or if interest rates have risen faster than your payments, your payments could go up a lot. Ending the option payments. Lenders end the option payments if the amount of principal you owe grows beyond a set limit, say 110% or 125% of your original mortgage amount. For example, suppose you made minimum payments on your $180,000 mortgage and had negative amortization. If the balance grew to $225,000 (125% of $180,000), the option payments would end. Your loan would be recalculated and you would pay back principal and interest based on the remaining term of your loan. It is likely that your payments would go up significantly.

Poor Credit Mortgages

A lot of individuals are too scared to even try to apply for a mortgage because they feel they will be rejected due to their bad credit. Don't let your bad credit stand in the way of owning a home or your own business. It is possible to be approved for a mortgage. Plenty of programs are out there and being offered to people with poor credit that wish to take out a mortgage.

Do you have poor credit but wish to apply for a mortgage? Contact a lender to discuss your options.

You may think it's just impossible for you to be approved for a mortgage and you have lost all hope. Don't let this happen, because it is possible. Even if your problems extend a little bit past "poor credit," you can still be eligible for certain types of loans. Depending on your exact circumstances, you may still be qualified for a mortgage even if you are dealing, or have dealt with the following:

• A poor debt-to-income ratio
• Bankruptcy
• Foreclosure
• A very low credit score

Unfortunately, obtaining a poor credit mortgage won't be as appealing as mortgages obtained by those with good, or even average credit. Fees will be higher, such as interest rates. This is to be expected and you probably already figured that. Sometimes, you need to work your way through the bad to get to the good. Consider it your second chance, your opportunity to build your way back up and improve your credit score. One day, you will be able to refinance once your credit has improved.

Do you have poor credit but wish to apply for a mortgage? Contact a lender to discuss your options.

Problems In The Subprime Mortgage Sector

In general, mortgage credit quality has been very solid in recent years. However, that statement is no longer true of subprime mortgages with adjustable interest rates, which currently account for about two-thirds of subprime first-lien mortgages or about 9 percent of all first-lien mortgages outstanding. For these mortgages, the rate of serious delinquencies--corresponding to mortgages in foreclosure or with payments ninety days or more overdue--rose sharply during 2006 and recently stood at about 11 percent, about double the recent low seen in mid-2005. The rate of serious delinquencies has also risen somewhat among some types of near-prime mortgages, although the rate in that category remains much lower than the rate in the subprime market. The rise in delinquencies has begun to show through to foreclosures. In the fourth quarter of 2006, about 310,000 foreclosure proceedings were initiated, whereas for the preceding two years the quarterly average was roughly 230,000. Subprime mortgages accounted for more than half of the foreclosures started in the fourth quarter.

The sharp rise in serious delinquencies among subprime adjustable-rate mortgages (ARMs) has multiple causes.  "Seasoned" mortgages--mortgages that borrowers have paid on for several years--tend to have higher delinquency rates. That fact, together with the moderation in economic growth, would have been expected to produce some deterioration in credit quality from the exceptionally strong levels seen a few years ago. But other factors, too, have been at work. After rising at an annual rate of nearly 9 percent from 2000 through 2005, house prices have decelerated, even falling in some markets. At the same time, interest rates on both fixed- and adjustable-rate mortgage loans moved upward, reaching multi-year highs in mid-2006. Some subprime borrowers with ARMs, who may have counted on refinancing before their payments rose, may not have had enough home equity to qualify for a new loan given the sluggishness in house prices. In addition, some owners with little equity may have walked away from their properties, especially owner-investors who do not occupy the home and thus have little attachment to it beyond purely financial considerations. Regional economic problems have played a role as well; for example, some of the states with the highest delinquency and foreclosure rates are among those most hard-hit by job cuts in the auto industry.

The practices of some mortgage originators have also contributed to the problems in the subprime sector. As the underlying pace of mortgage originations began to slow, but with investor demand for securities with high yields still strong, some lenders evidently loosened underwriting standards. So-called risk-layering--combining weak borrower credit histories with other risk factors, such as incomplete income documentation or very high cumulative loan-to-value ratios--became more common. These looser standards were likely an important source of the pronounced rise in "early payment defaults"--defaults occurring within a few months of origination--among subprime ARMs, especially those originated in 2006.

Gov. Blagojevich Announces $15 Million Program to Help Veterans and Active Duty Personnel Afford Homes

G-I Loan program makes Illinois first state in the nation to offer comprehensive homeownership package to those serving their country

CHICAGO – Governor Rod R. Blagojevich today launched a new $15 million pilot mortgage program to help Illinois Veterans and active duty personnel afford their own homes.  On behalf of the Governor, housing and Veterans officials announced the program, called the G-I Loan for Heroes, designed to help more than 100 qualified Veterans and service men and women secure low-interest mortgages and closing cost assistance.  The announcement makes Illinois the first state in the nation to provide significantly below-market interest, 30-year fixed rate mortgages to qualifying former and current service men and women who are working hard to provide for themselves and their families.

“We owe a huge debt of gratitude to the men and women who are willing to leave behind their families and comfortable lives to face danger head-on and preserve our freedom. We should do everything we can to help our soldiers and Veterans succeed when they come back home,” said the Governor. “That’s why we created the G-I Loan for Heroes program – to help Veterans and active duty personnel and their families achieve the American Dream of owning their own homes, so they can build equity and build better lives.”

For view the rest of this article please visit www.illinois.gov.

Refinancing

To refinance your home or business basically means to re-apply for a mortgage all over again on that same property. The purpose of this is to try to get a better deal than the deal you got the first time around. This is especially vital for those who had very poor credit when they originally obtained their mortgage.

Are you ready to refinance your mortgage? Contact a lender in your area today.

The process for refinancing your mortgage is very similar to the process you went through when you originally applied for your mortgage. The only difference is that costs such as closing costs and points may be paid by the lender this time around. Some of the many benefits that you could receive by refinancing your mortgage are the following:

• Your interest rate may be lower
• You can eliminate mortgage insurance
• You can reduce the term of your mortgage
• Your overall monthly payment will be lower

If you chose an adjustable rate and you feel it has not been working for you, it may even be possible to switch to a fixed rate when you refinance. If your credit and overall financial situation has improved, why keep paying for a mortgage that was originally meant for someone with bad credit? Refinance today to get the new rates that you deserve and earned.

Are you ready to refinance your mortgage? Contact a lender in your area today.

HUD Secretary Calls for Restoring Confidence in Mortgage Lending Practices Through FHA Modernization

Jackson stresses mortgage alternatives and ending predatory lending

HOUSTON, TX - U.S. Housing and Urban Development Secretary Alphonso Jackson today said we must increase "transparency and honesty for lending on all levels and by all lenders" at the Credit Suisse Small and Emerging Manager Private Equity Conference. Speaking to over 300 business professionals, Secretary Jackson addressed the need to modernize the Federal Housing Administration (FHA) as an alternative to the predatory lending practices that are affecting our nation's housing market today.

"We must restore confidence in lending practices, top to bottom. We can begin by exposing and ending predatory lending. There is no place for it in the housing industry or as an investment practice. Predatory lenders and mortgage fraud harm everyone in the home purchasing process, making it all the more necessary that we offer a safe FHA alternative," said Jackson.

While subprime home loans allow individuals with limited or troubled credit to become homeowners, some of these loans, which can include interest rates up to 10 percent or more, are taking a toll on too many hard working American families, often forcing them into foreclosure, noted Jackson. Last year, more than one million families lost their homes due to foreclosure, an increase of 42% from the previous year.

Secretary Jackson encouraged Congress to assist him in his efforts to combat predatory lending by passing legislation to modernize the Federal Housing Administration (FHA) The program has helped more than 34 million families become homeowners over the past 72 years, and prevented 75,000 families from losing their homes to foreclosure in Fiscal Year 2006 alone, and another 36,500 since October of last year. However, as lending practices have evolved and modernized, the FHA has been unable to do so without legislation. Reforming the critical mortgage insurance program to adapt to today's marketplace could serve as a solution to predatory lending, providing families with the opportunity to obtain a fair, safe and affordable mortgage.

For more on this article please visit www.hud.gov/news.

Reverse Mortgages

A reverse mortgage is similar to a home equity loan but with some differences. It only applies to homeowners that are at least 62 years old. It is a home loan that you do not have to pay back for as long as you live in your home. While most homes qualify, co-ops and mobile homes usually don't.

Are you interested in a reverse mortgage? Contact a lender today.

Reverse mortgages are paid back when the last living borrower dies, moves out of the home, or sells the home. The amount you are eligible for is dependent on a number of factors, such as the home's location and value, the cost of the loan, and the age of the person seeking to take out the loan.

You can receive your money one of the following ways:

• A Lump Sum of Money
• Monthly Income
• Credit Line
• Combination of Payment Options

There are different types of reverse mortgages available. Reverse mortgages offered by the government are usually for certain circumstances. However, when they are offered by mortgage companies, banks, or any other type of private lender, they can usually be used for anything you desire.

Are you interested in a reverse mortgage? Contact a lender today.

More Than 300,000 Seniors Benefiting From HUD Reverse Mortgages

Tenfold increase in HECMs over the last 6 years

WASHINGTON - More seniors than ever before are reaping the benefits of reverse mortgages to enjoy their golden years. New data from HUD reveals that more than 300,000 seniors have used the federally-insured Home Equity Conversion Mortgage (HECM) loan program to convert the equity in their home into cash without having to move.

"For some senior citizens on fixed incomes, reverse mortgages are a great way to cash in on their home equity to make needed repairs, pay unexpected medical bills or just to supplement their retirement. Seniors shouldn't have to choose between taking out a loan to fix up their home and putting food on the table. With a reverse mortgage, this difficult decision is a thing of the past," U.S. Housing and Urban Development Secretary Alphonso Jackson said.

Insured by HUD's Federal Housing Administration (FHA), HUD's reverse mortgage loans require that the borrower be a homeowner, 62 years of age or older; own one's home outright, or have a low mortgage balance, and must live in the home. Reverse mortgage recipients are also required to participate in HUD-approved housing counseling programs before obtaining the loan.

For the rest of this article please visit www.hud.gov.

State Launches Consumer Home Mortgage Information Web site, Hosts Series of Town Halls Statewide

In an effort to continue enhancing financial literacy, the Business, Transportation and Housing Agency and the State and Consumer Services Agency today launched the Consumer Home Mortgage Information Web site (www.yourhome.ca.gov) to help Californians make informed decisions when buying a home or deal with existing mortgages. The Administration also announced that a series of town hall meetings will be held statewide, in partnership with local legislators, to help educate the public about mortgage issues.

"In an effort to help borrowers who are struggling to make their mortgage payment, the Administration has developed a three pronged approach to address the increase in foreclosures. These efforts include consumer education, enforcement against unscrupulous licensees, and new regulations to ensure consumers better understand the loan products that are available," said Department of Housing and Community Development Director Lynn L. Jacobs. "By visiting www.yourhome.ca.gov or attending one of the town hall meetings, borrowers can obtain helpful information about the foreclosure process, tips on working with lenders to hopefully avoid foreclosure, and how to file a complaint with the appropriate regulatory agency, if a borrower believes a violation of the law occurred."

"The 'American Dream' of owning your own home must be kept alive," said Assemblymember Garcia. "We must do all we can to prevent families from losing their investment or worse, ending up homeless. I encourage people not to wait until they are in a crisis - anyone who bought a house in the past three years, is facing foreclosure or is currently looking to buy should attend one of these town halls. Bring your loan documents, delinquency notices or questions and get straight answers from the experts who will be there to help."

To view the rest of this article please visit www.bth.ca.gov.

Streamline Refinances for Mortgages

FHA has permitted streamline refinances on insured mortgages since the early 1980's. The "streamline" refers only to the amount of documentation and underwriting that needs to be performed by the lender, and does not mean that there are no costs involved in the transaction. The basic requirements of a streamline refinance are:

• The mortgage to be refinanced must already be FHA insured
• The mortgage to be refinanced should be current (not delinquent)
• The refinance is to result in a lowering of the borrower's monthly principal and interest payments
• No cash may be taken out on mortgages refinanced using the streamline refinance process

Lenders may offer streamline refinances in several ways. Some lenders offer "no cost" refinances (actually, no out-of-pocket expenses to the borrower) by charging a higher rate of interest on the new loan than if the borrower financed or paid the closing costs in cash. From this premium, the lender pays any closing costs that are incurred on the transaction.

Lenders may offer streamline refinances and include the closing costs into the new mortgage amount. This can only be done if there is sufficient equity in the property, as determined by an appraisal. Streamline refinances can also be done without appraisals, but the new loan amount cannot exceed the original loan amount. Investment properties (properties in which the borrower does not reside in as his or her principal residence) may only be refinanced without an appraisal.

The Mortgage Application Process

The mortgage application process requires considerable paperwork. First there is the application form, which asks for detailed information about you, your employment record, the house you want to purchase, etc. The lender will need documentation pertaining to your personal finances--your earnings, your monthly expenses, and your debts--to help gauge your willingness and ability to repay the mortgage.

Lenders also will examine your file at the credit bureau to learn if you pay your bills on time. A lender may reject your application if the report shows that you have a poor credit history. Thus, you may want to make sure your credit file is accurate before you apply for your mortgage. You have a right to know what information is contained in your credit report and to have someone from the credit bureau help you understand what the report says. The names of credit bureaus can be found in the phone book.

To figure the mortgage payment, the lender will begin by asking how much you want to borrow. The maximum loan amount will be determined by the value of the property and your personal financial condition. To estimate the value of the property, the lender will ask a real estate appraiser to give an opinion about its value. The appraiser’s opinion can be an important factor in determining whether you qualify for the size of mortgage you want. Lenders usually will lend the borrower up to a certain percentage of the appraised value of the property, such as 80 or 90 percent, and will expect a down payment making up the difference. If the appraisal is below the asking price of the home, the down payment you planned to make and the amount the lender is willing to lend you may not be enough to cover the purchase price. In that case, the lender may suggest a larger down payment to make up the difference between the price of the house and its appraised value.

When looking at your projected mortgage payment and existing debt, some lenders might use ratios such as "28 and 36" to determine whether you qualify for the loan. These are commonly used ratios.

In the case of "28 and 36," the 28 refers to the percentage of your gross income (before taxes) that may be spent on housing expenses, including principal and interest on the mortgage, real estate taxes, and insurance. The 36 refers to the income that may be spent for payments on all your debts (including the mortgage): the monthly payments on your outstanding debts, when added to the monthly housing expenses, may not exceed 36 percent of your gross income. When you talk to a lender, find out what ratios will be used to evaluate your application.

Be prepared to provide certain documentation about your income (W2s for prior years and year-to-date pay stubs), current debts (account number, outstanding balance, and creditor’s address for each), and the purchase contract for the home you want to buy. When you file your application, ask the lender how long the approval process will take. The time may vary depending on the complexity of your mortgage, current market conditions, and whether you have to provide additional information. It’s common for a decision to be made within 30 days after the lender receives all the necessary information. Applications for FHA or VA loans may take longer.

If your application is turned down, federal law requires the lender to tell you, in writing, the specific reasons for the denial. Make sure you understand the reasons given--you may be able to find answers or alternatives that will satisfy the institution’s lending standards. Even if that doesn’t happen, understanding fully why the loan was denied may improve your chances with the next lender you visit. Factors that may affect the loan decision include:

• Downpayment - Is your proposed down payment sufficient? If not, perhaps the lender offers other types of mortgages with lower down-payment requirements.
• Appraisal - Is the size of the mortgage you need too high, given the property’s appraised value? If similar houses in the neighborhood have sold at prices comparable to yours, maybe the appraiser undervalued the property. Suggest that the lender re-examine the appraisal. You also have the right to receive a copy of the appraisal if you have paid for it.
• Credit history - Is the lender doubtful--because of your level of debt or credit history--about your ability to make the monthly payment? Ask how your debt ratios compare to the lender’s standards. If there were special circumstances surrounding old credit problems, ask for a chance to explain.

Wachovia Offers 24-Hour Mortgage Pre-Approvals

Additionally, Wachovia is offering a new permission-based email series to help educate homeowners on the benefits of refinancing. Customers who register for the curriculum and close their loan with First Union Mortgage Direct will be eligible for a $99 credit at closing. Topics covered include: where and when you should refinance, lowering your monthly payment and how much equity do you have in your home.

“The recent drop in interest rates and the continued strength of the housing market has made it an excellent time for many to refinance an existing mortgage,” said Joan Sommerer, manager of Mortgage Direct for FUMC. “Many of our customers are wondering if this option is the right choice for them and our hope is that this new email series will help them make that decision.”

Consumers can register for the free program by logging on to firstunion.com/refinance, or by clicking on the “Considering Refinancing?” banners located throughout the firstunion.com site. Participants do not have to be First Union or Wachovia customers to use the program.

Ways and Means Approves Mortgage Forgiveness Debt Relief Bill

Wells Fargo Web Site Ranked No. 1 For Online ‘Mortgage Experience’

Wells Fargo & Company’s ( Web site was recently ranked by Change Sciences Group, a national research firm, as No. 1 in overall online mortgage experience – specifically for helping people learn the basics of home buying, determining whether refinancing is worthwhile, choosing the right loan, learning how to apply for a loan online and finding a loan officer.

“Recognizing that buying a home can be an intimidating experience, we work hard at making the process simple and comfortable for customers,” said Cara Heiden, Wells Fargo Home Mortgage division president of National Consumer and Institutional Lending. “Connecting with our customers through the channel that works best for them is our first priority. We have a nationwide network of more than 10,000 home mortgage consultants, a 24-hour phone option and an easy-to-use Internet site. That’s what has made us the leading retail mortgage lender the past 14 years running.” ¹

Change Sciences also reported that the Wells Fargo Web site is: the best at providing a first impression that meets the common needs of customers and making it possible for consumers to find loans tailored to their situation; successful at meeting the needs of both the home buyer and individuals who want to refinance; the only site among those reviewed by Change Sciences that had alerts for both interest rates and home prices; and one of the top three sites that required less data entry, clicking, reading and scrolling, as well as minimizing unanswered questions.

“As the first financial services company to provide online access to accounts, we’re very pleased to be recognized by Change Sciences as providing a top online mortgage experience,” said Jim Smith, executive vice president of Wells Fargo’s Internet Channel & Products. Read more at wellsfargo.com

What Homebuyers Should Know Before Buying a Home

Before you start looking for a home, get pre-qualified for a loan. Banks, credit unions and mortgage bankers make home loans; mortgage brokers process them. The lenders will take an application, process the loan documents, and see the loan through to the funding stage.

If you have marginal or bad credit, consult your lender. You may be able to qualify for a loan depending on how long ago and what reason(s) caused the bad credit. A lender should be able to advise you on whether your credit history will prevent you from qualifying for a home loan.

You will need a down payment. Down payment requirements vary depending on the type of loan. Many down payment assistance programs exist. These programs may loan or grant you the funds necessary for the down payment. Consult with a lender about programs available in your area.

You will need funds for closing costs. Closing costs are charges for services related to the closing of your real estate transaction. They include, but are not limited to:

• Escrow fees charged by the company handling the transaction
• Title policy issuance fees charged by the title insurance company
• Mortgage insurance fees
• Fire and homeowners insurance
• County Recorder fees for recording your deed
• Loan origination fees

(Consult your lender for an actual estimate of these costs, as well as information about loan programs which can assist in financing your closing costs.)

Some loans have "points" and some do not. A point is a loan origination fee equivalent to 1% of the loan amount. Together with the interest rate they constitute the yield on your loan for the lender. Some lenders charge a higher interest rate to compensate for charging no points. It is important to comparison shop lenders to make sure your loan is at a competitive yield.

Should you select a mortgage with a fixed rate or an adjustable rate? The answer to this question depends on whether mortgage rates are at a high or a low point when you purchase, and on how long you plan to live in the home. If rates are high, an adjustable rate might be attractive since subsequent rate drops could reduce your monthly payments. Additionally, lenders may offer a below-market rate during the first few years of an adjustable mortgage to make it appealing to you. If interest rates are low you might want to take a fixed rate to protect yourself against the possibility of rising interest rates.

Be aware of the two main types of loan categories.

• Conventional Loans. Conventional mortgage loans are available with fixed or adjustable interest rates. Some loans may require mortgage insurance.
• Government Loans. These include Federal Housing Administration (FHA) fixed and adjustable rate mortgage loans, and Veterans Administration (VA) fixed rate mortgage loan.

If you are a low or moderate income homebuyer, there are special programs designed to help you. These loans are available through private lenders, as well as local and state housing agencies, like the California Housing Finance Agency (CalHFA). Most lenders specializing in real estate mortgage loans are aware of these types of loan programs.

Why might I have to pay mortgage insurance? Mortgage insurance protects the lender from potential loss if you should default on your mortgage loan payment. Generally, conventional loans that require larger down payments do not require mortgage insurance. Mortgage insurance is always required on FHA mortgage loans.

Many organizations offer home loan counseling to prospective homebuyers. These organizations provide classes for homebuyers to cover the steps to homeownership. They will cover home selection, realtor services, lenders, loan programs, homeownership responsibilities, saving for a down payment, and other important pieces of information. Many first-time homebuyer programs require homebuyers to attend this type of class to be eligible for selected programs.