Applications for home purchase loans dropped by 20 percent in October from September, even though mortgage rates in October held close to their lowest levels of the year. Compared with one year ago, applications for home purchases were unchanged.
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http://blogs.wsj.com/developments/2011/11/11/applications-for-purchase-mortgages-declined-in-october/?mod=WSJBlog&mod=WSJ_Real Estate_BLOGSDEVELOPMENTSFEED
The state-run program, “Keep Your Home California,” which helps homeowners struggling to pay their mortgages now has broader eligibility guidelines. Borrowers who did “cash-out” refinances and own multiple properties now are eligible for the program, according to California Housnig Finance Agency officials.
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- To date, Keep Your Home California has helped approximately 8,000 low- and moderate-income households that are behind on loan payments or close to default.
- There are four parts to the program: Mortgage help for the unemployed, mortgage aid for homeowners with documented financial hardship, relocation help for those in the midst of a short sale or deed-in-lieu of foreclosure, and reduction of principal.
- Homeowners who completed “cash-out” mortgage refinancing now are allowed to take part in the four programs outlined above, and borrowers who own more than one property also can apply for the program. Previously, these two groups of borrowers were excluded from participation.
- Mortgage aid to unemployed borrowers also has been extended to nine months, instead of six. Such homeowners can receive up to $3,000 a month. To qualify, borrowers must be receiving unemployment benefits.
- Additionally, the program has reinstated up to $20,000 in past-due mortgage payments instead of the previous $15,000 cap.
- To review qualification guidelines, visit www.KeepYourHomeCalifornia.org or www.ConservaTuCasaCalifornia.org.
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http://www.signonsandiego.com/news/2011/nov/08/mortgage-aid-open-more-calif-borrowers/
Some borrowers think that because their mortgage application is turned down the first time, they won’t ever be approved. In reality, some borrowers succeed on the second or third attempt, usually with a different mortgage professional, and often several months later, after they have saved more money for a larger down payment or improved their credit score.
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- Before reapplying for a mortgage, borrowers are advised to look at the reasons they were initially rejected.
- The Equal Credit Opportunities Act requires lenders to give loan applicants specific reasons in writing within 30 days of their decision. If it’s based on a problem in the borrower’s credit report, the lender must tell the borrower the name and address of the credit agency that provided the information.
- Talking to the loan officer who denied the application to see how close the borrower was to being approved also can be helpful. Sometimes the gap is small and could be bridged with a larger down payment or another home appraisal, for example.
- It also may be worthwhile to shop around for other lenders. Borrowers can work with a mortgage broker or an online network like LendingTree or Zillow’s Mortgage Marketplace.
- A credit union also might be a better bet for some applicants. Credit union loan committees may permit better deals for longtime members; they might also modify loan terms for borrowers they already know.
- However, first-time buyers may need to scale back their aspirations. One reason people get turned down for a mortgage is because they try to buy more property than they can afford based on current incomes.
- Applicants also should look at ways to strengthen their financial picture. If a borrower’s credit is poor, paying down credit-card balances can help to increase a FICO score.
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http://www.nytimes.com/2011/10/16/realestate/mortgages-what-to-do-after-an-application-is-rejected.html?_r=1&ref=realestate
A 4 percent mortgage sounds too good to be true – and for more than 90 percent of borrowers, it is.
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http://money.cnn.com/2011/10/19/real_estate/mortgage_rates/index.htm?iid=Lead
Last year, more than two million people were turned down for homes, according to federal data, often because the applicants didn’t meet certain lender requirements or because their applications were incomplete or otherwise problematic. With lenders’ underwriting criteria becoming more rigorous in recent years, it’s important buyers know the most common triggers for mortgage-loan rejection.
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- Insufficient income: Lenders want to be sure borrowers can afford to make the mortgage payments. Lenders typically look for at least a two-year track record of income, which could hurt those who have changed jobs recently.
- Cloudy financial picture: Generally, total debt payments, including the mortgage, cannot exceed 45 to 50 percent of a borrower’s adjusted gross monthly income. Overtime and bonuses are included only if the borrower has worked for the same employer at least two years, and has a history of receiving them.
- Poor credit: Lenders typically reject applicants with FICO scores below 620.
- Low appraisal: One of the predominant reasons buyers are turned down for home loans is because the appraisal on the property is too low. A buyer may think he or she is purchasing a house worth $800,000, but if the appraisal comes in less than that, the lender will not loan the borrower the money.
- Property problems: Sometimes issues turn up within a house, like a major repair or safety issue that needs to be addressed, before an application can be approved.
- Information mix-ups: Approximately 12 percent of new mortgage applications were denied because of unverifiable information or incomplete credit applications, according to the Federal Financial Institutions Examination Council.
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http://www.nytimes.com/2011/10/09/realestate/mortgages-triggers-for-rejection.html?_r=1&ref=realestate
