Fannie Mae’s Deed For Lease (D4L) Program
If you qualify, and that’s a big IF, it could be a way to get out from under a house deal gone wrong. Find out more: Read our Deed For Lease story.
CreditKarma Credit Card Debt Survey
This week, CreditKarma released its October U.S. Consumer Credit Score Climate Report Survey.
Amongst consumers with a credit card, credit card debt increased 14 percent nationally from September. The Midwest and Northeast regions showed the highest increases in credit card debt with 16 percent and 17 percent respectively, and Philadelphia consumers represented the highest gain for a Metropolitan Statistical Area (MSA), increasing debt by 28 percent in October.
By contrast, the West had the lowest percentages of increasing credit card debt in October, and the San Francisco MSA itself remains the only MSA with an average credit score above 700.
What’s happening here? My sense is that we’re living in a time where people who are laid off are using their severance pay to keep up their standard of living. The Wall Street Journal recently called it the “severance economy.” I think what is happening now is that the severance is running out, and folks are turning to their credit cards to pay for groceries, gas, utilities and the daily necessities of life.
The problem is that we don’t have unlimited credit – in fact, credit has been severely clamped down in recent months. Pretty soon, these folks are going to run into a brick wall if they don’t get jobs and some income stream.
Sure enough, the CreditKarma survey found that with the exception of 25 and under, all age groups also showed substantial increases in credit card debt.
RealtyTrac October 2009 Foreclosure Survey
RealtyTrac® (www.realtytrac.com), the leading online marketplace for foreclosure properties, released its October 2009 U.S. Foreclosure Market Report™ this week. Foreclosure filings — default notices, scheduled foreclosure auctions and bank repossessions — were reported on 332,292 U.S. properties during the month, a decrease of 3 percent from the previous month but still up nearly 19 percent from October 2008. The report also shows one in every 385 U.S. housing units received a foreclosure filing in October.
The top ten states for foreclosure filings was Nevada, California, Florida, Arizona, Idaho, Illinois, Michigan, Georgia, Maryland and Utah.
Click here to read the full report.
Mike Rose, Bank of America on Divorce and Mortgages
Mike Rose, a senior loan officer with Bank of America, said he has seen the percentage of clients getting a divorce rise substantially in the last year. One of the big problems they have is that they deed over the house, but can’t get their ex-spouses’ name off of the loan.
Mike says he recently found guidance under Making Home Affordable that if a divorced couple’s house is worth a little less than what is owed, the spouse who takes over the property might be able to refinance with a limited doc loan. (Don’t call this a “stated income” loan, even if that’s what it sounds like.)
To make this work, your loan has to be owned or securitized by Fannie Mae or Freddie Mac (not FHA) and you can’t be too far underwater, and you have to start with the lender who currently owns the loan. So, if you have a Bank of America mortgage, you’d call Bank of America. If you have a second loan, this won’t work. But, it’s a big change for mortgage lenders.
If you’re getting divorced, check out our Divorce and Your Finances ebook, available at the ThinkGlink.com store. (See below for a special deal on ebooks.)
Mike also said there are rumors that FHA, which doesn’t currently have a minimum acceptable credit score it will accept might draw the line at credit scores of 620 or better. With credit scores of 600 or below, Mike say he has to do some extremely careful underwriting. Watch for big FHA rule changes (and big rule changes for HUD homes after January 1, 2010).
Rent.com’s Investment Property Owner’s Survey
Rent.com President Peggy Abkemeier came on the show to discuss the results of the Investment Property Owner’s survey the company recently conducted. You can read the highlights of the survey here.
In order to identify what property management companies are experiencing in this economic downturn and to better understand how they are dealing with increasing vacancy rates, Rent.com surveyed property owners representing 3,900 communities and over 987,000 rental units. (Rent.com has more than 4 million rental properties listed for rent on its site.)
According to the study, over 70 percent of property owners are experiencing higher vacancy rates. In response, those in the hardest hit markets are being more resourceful than ever, and are often willing to negotiate when it will deliver a winning situation for both the renter and themselves. The survey found that 65 percent of property owners are providing one or more months free, while 35 percent of owners are reducing the amount of required deposits.
We also discussed how to successfully negotiate a rental agreement (for the landlord and tenant). Overall, you want it to be a “win-win” or successful ending for everyone involved. Abkemeier offered some rental property negotiation tips and strategies.
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MoneyWatch.com and Loan Modifications from Hell
I talked about my MoneyWatch.com blog, and specifically the post called Are You In Loan Modification Hell?. I suggested on the air that if you are in loan modification hell, you should write up your story and add it to that blog post. There are already 56 comments, but I’d like 156 comments!
The blog is being read by folks at the highest levels of major mortgage companies and the Treasury Dept. How do I know? They’re emailing me for more information.
So feel free to post your Loan Modification from Hell story there and tell all your friends and family. We have to shed more light on this to get it fixed for everyone.