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Hot Topic #1

Why Subprime Mortgages Are Back

Subprime mortgages – once the bad boys of real estate lending – are coming back. Figures from the Federal Reserve Bank of St. Louis show that between 2007 and the start of 2013 subprime mortgages fell off the radar for most banks but now they have begun to make a significant comeback. What happened to […]

| February 3rd, 2014 | Continued

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Hot Topic #2

What’s A Qualified Mortgage (QM)?

One of the better ideas to come out of the Wall Street Reform Act was to create something called a “qualified residential mortgage.” You want to know about such financing because most lenders will offer nothing else — and that’s good news for borrowers. Under Wall Street reform several federal agencies are supposed to work […]

| September 21st, 2010 | Continued

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Hot Topic #3

How To Read The HUD-1

Since January 1st, 2010, all real estate transactions have been settled using a new HUD-1. The HUD-1 is a standardized form which allows real estate buyers and sellers to clearly understand the costs of their transaction. The original HUD-1 was developed as a by-product of the Real Estate Settlement and Procedures Act of 1974 — […]

| November 8th, 2009 | Continued

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Hot Topic #4

How Do We Get Rid of the FHA Mortgage Insurance Premium?

Question: I bought a home with FHA financing. We have a monthly insurance premium (MIP) with each payment. How do we get rid of this cost? Answer: When you bought your home you purchased with little money up front, perhaps 3.5 percent down. This means a lender put up as much as 96.5 percent of […]

| October 20th, 2008 | Continued

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Hot Topic #5

What Are “Front” and “Back” Ratios?

Different loan programs use different calculations, or ratios, to qualify would-be borrowers. The “front” ratio is generally equal to your monthly costs for principal, interest, property taxes, and property insurance (what lenders call “PITI”). The “back” ratio includes the front ratio plus all regular monthly costs such as credit card payments and auto payments. For […]

| August 28th, 2008 | Continued

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Hot Topic #6

What’s A Title insurance Re-issue Rate?

It sometimes happens that a property is sold or refinanced more than once within a five- or ten-year period. In such instances, if title insurance is obtained from the same firm, it’s often possible to get a re-issue (discount) rate. The discount can represent a significant savings, thus it is worthwhile to ask if such […]

| August 26th, 2008 | Continued

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Should We Overpay For Homeowners Insurance?

Question: We’re in the process of buying a home. The sale price is $225,000 but the insurance agent wants us to carry coverage for a property costing $285,000. Why do we need so much excess insurance — or do we? Answer: When you buy a car the price you pay has a package cost but […]

January 26th, 2015 | | 0 comments | Continued
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Will Lenders Accept Partial Mortgage Payments?

Question: Can you tell me why it’s okay for mortgage companies to reject partial payments when a borrower is behind? It seems to me that it’s bad business and not too good for the economy. Answer: Many mortgage servicers — but not all — are reluctant to accept partial mortgage payments from delinquent borrowers because they […]

January 20th, 2015 | | 0 comments | Continued
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2014 Foreclosures Down 18%, Says RealtyTrac

For the fifth year in a row foreclosure levels are down, signaling an end to the worst real estate collapse since the Great Depression. But while the numbers are greatly improved for 2014, the real estate market remains fragile with 1.1 million foreclosure notices generated during the year. “Despite the annual increase in foreclosure starts […]

January 15th, 2015 | | 0 comments | Continued
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Please Don’t Move To Pensacola….

Please don’t move to Pensacola. Seriously. I know it has superficial attractions like miles of clean beaches, real estate costs which are a third, or a fourth or a fifth of home values in hip-and-happening major metro areas and sure, you can easily park on the streets downtown, but do you really want to give […]

January 12th, 2015 | | 1 comment | Continued
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Congress Shoots Down FHA Mortgage Program

FHA mortgage borrowers and American homeowners will have fewer opportunities for success in the coming year as a result of the newly-minted 2015 budget bill. You won’t see such a headline anywhere but if you check page 1,560 of the just-approved federal budget you will find language which shows how Washington really works. “SEC. 235. […]

December 15th, 2014 | | 0 comments | Continued
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2015 Mortgage Loan Limit Charts

Loan limits for 2015 remain virtually unchanged from 2014, news which is hardly evidence of a booming real estate marketplace. Instead, what everyone would really like to see are higher loan limits, limits justified by rising real estate values. According to the National Association of Realtors, “The median existing-home price for all housing types in […]

December 9th, 2014 | | 0 comments | Continued
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Why Credit Scores Are So Common

Credit scores have become more common in the last few years and one reason is that requirements under new federal lending rules. It’s not so much that lenders are required to hand out credit scores, rather the requirements are sufficiently vague that lenders give out the scores without cost to mortgage applicants to avoid any question […]

November 17th, 2014 | | 0 comments | Continued
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Will Your Children Own A Home?

Long ago, when I was a child, no material possession was more important than a home. Whether the house was large or small ownership was a way to say that you had a stake in the American system, that you had full citizenship. The symbolism of ownership was enormous. Many people came to America precisely […]

October 27th, 2014 | | 1 comment | Continued
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Mortgage Rates and Financial Repression

Financial repression is a newly-emerging buzzword, the idea that by forcing down interest rates the government is scooping up funds that would have gone to the private sector. Why would the government do this? To paper over the size of the federal deficit and avoid a financial collapse. If this sounds like a strange idea […]

October 20th, 2014 | | 0 comments | Continued
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Why Pay Needless Mortgage Penalties & Late Fees?

Mortgage penalties are a multi-billion-dollar tax on American borrowers, one that you don’t have to pay. This is a case where borrower behavior can completely eliminate mortgage penalties — fees that typically equal 5 percent of the monthly payment. In other words, if you have a $1,500 a month payment the penalty for being late […]

October 13th, 2014 | | 0 comments | Continued