Mortgage Restrictions Eased

Below is a reprint of an article recently featured in my monthly newsletter.

Subsequent to reading this, I asked a lender whom I respect to comment.  His comment was not as positive as I had hoped, as he brought up the fact that with PMI (private mortgage insurance) still being required on loans with less than 20% down, tighter lending restrictions would still apply.

Nevertheless, I share this with you.

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Source: The National Association of Realtors®; Realtor.com

Existing-home sales slowed in April, partly because restrictive lending practices hampered home buyers. At the same time, a greater number of areas are showing sales gains from a year ago and a recent reversal in mortgage policy means the market is better positioned for a turnaround, according to the National Association of Realtors®.

NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said the good news is that mortgage restrictions have just been eased. "In the past week, Freddie Mac and Fannie Mae announced that they were eliminating their 'declining market policies, effective June 1," he said. "This means consumers across the country will have access to safe, affordable financing with downpayments of only 5 percent on most mortgages, with 100 percent financing available on some loan products, and we could see an upturn in home sales this summer."

Lawrence Yun, NAR chief economist, said eliminating restrictive policies should be a big help to home buyers. "I would encourage buyers who were disappointed by poor mortgage options to take another look at the market because the lending changes are significant," he said. "Also, a recent notable drop in interest rates on conforming jumbo loans will help consumers in high-cost markets like California and New York."

The unusual mix of market conditions around the country continues, but areas showing healthy price gains include Greenville, S.C., and Springfield, Mo., both with solid local economies. "On the other hand, some markets like San Diego, Calif., and Fort Myers, Fla., are experiencing rising sales after sudden double-digit drops in local home prices, so lower prices and low interest rates are starting to generate results," Yun said.

The national median existing-home price for all housing types was $202,300 in April, which is 8.0 percent below a year ago when the median was $219,900. Because the slowdown in sales from a year ago is greatest in high-cost areas, there is a downward distortion to the national median with relatively more sales in low- and moderate-priced markets.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage slipped to 5.92 percent in April from 5.97 percent in March; the rate was 6.18 percent in April 2007.

Source: The National Association of Realtors®; Realtor.com

MY WEEKLY FAVORITE ROCKLAND "GREAT BUY PICK".

"GREAT BUY PICS" AREN'T NECESSARILY MY LISTINGS, BUT THEY STAND OUT IN MY MIND AS GREAT PICS ON THE MARKET NOW.  HERE IS ONE!  EVERYONE LOVES A NEW HOME.  HERE'S ONE AND IT'S IN NANUET AND IN THE NANUET SCHOOL DISTRICT. Address:   Nanuet, NY 10954 ... $489,900 4 Bed, 3 Bath 2,343 Sq. Ft. 0.23 Acres     Address:  Nanuet, NY 10954 ~ Call us today:  We'll arrage a showing ! $489,900 4 Bed, 3 Bath 2,343 Sq. Ft. 0.23 Acres

House under construction on quiet dead end street.Clarkstown Schools ,Private wooded rear yard Perfect for the exteded familyor for a large family. Possible 5th bedroom. Quality throughout Custom Kitchen and baths, many closets large deck overlooking rear yard. Property Features Single Family Property Status: ACTIVE Area: Clarkstown County: Rockland Year Built: 2008 New construction 4 total bedroom(s) 3 total bath(s) 3 total full bath(s) 10 total rooms Approximately 2343 sq. ft. Style: Bilevel/High Ranch Master bedroom Family room Den Laundry room Hardwood floors 1 car garage Attached parking Heating features: Natural Gas, Forced Air, 1 Heat Zones Interior features: Attic Stairs, Slab Foundation, Eat In Kitchen, Dishwasher, Oven/Range, Cathedral Ceiling, Foyer, Wall To Wall Carpet Exterior features: Blacktop Driveway, Circuit Breaker, Existing Screens, Existing Thermal Windows, Paved Street Surface, Municipal Sewer, Municipal Water, Level Lot, Partly Wooded Exterior construction: Frame, Vinyl Siding Approximately 0.23 acre(s) Lot size is less than 1/2 acre School District: Clarkstown Elementary School: Bardonia Jr. High School: Felix Festa High School: Clarkstown South This listing is brokerd by SMB Real Estate ... 447407 mls id

When you apply for a loan, the interest rate that the lender charges you
on that loan is determined by something known as a fico score.

Per Suze Orman: Every single person alive (once they have a credit card or apply for any type of credit) has a credit report AND a FICO score.  You should be aware that there are three credit reporting bureaus. They are:

1. EQUIFAX
2. EXPERIAN
3. TRANSUNION
   
   Each one of these bueaus has a FICO score attached to it. Therefore you can have as many as 3 FICO scores.

EVERY MOVE YOU MAKE when you pay a creditor, gets reported to one of this bureaus. It's up to the creditor which bureau they report to. Therefore, its possible that your credit card payment history would be on one bureau, your car loan on another and your mortgage on still another (or any combination of the above).

Remember: (excerpted from: myFico.com) Lenders use a number of facts to make credit decisions, including your FICO® score. Lenders look at information such as the amount of debt you can reasonably handle given your income, your employment history, and your credit history. Based on their perception of this information, as well as their specific underwriting policies, lenders may extend credit to you although your score is low, or decline your request for credit although your score is high.

Here's what you need to know: Since rate follows risk, if your FICO score is high the interest rate charged on the loan is lower - if you FICO score is low the interest rate the lender charges you is higher.

WHAT IS THE DIFFERENCE, therefore, BETWEEN A FICO SCORE AND A CREDIT SCORE? Fico scores are created by FICo and Credit Scores are created by the credit bureaus.  The credit reporting bureaus have to send the credit scores to FICO so FICO can look at the reports to give you a score.   Understand that because there are three different credit reporting bureaus, you can have three different FICO scores. 

FICO HISTORY:  Years ago the people whe were creating these fico scores (from information compiled from the credit bureaus) decided to get into this business themselves and create a credit score based on the information they already have on you. So they did, and "FICO" (which stands for Fair Isaac Corporation) for formed.  (by the way ... the HIGHEST the score can go is 850)  

HERE'S THE PROBLEM: 90% OF major lenders today only look at a FICO scoreS in determining the intereSt rate that you will be charged.

HERE'S THE SOLUTION: Now that you know you can have as many as 3 FICO scores, you should contact the creditor you want a loan from and ask them which fico scores they check and that's the one you should purchase and see how you are doing.

  WHAT IS A FICO SCORE! (3:18 length) 

  FICO Planner Kit: Fabulous Info (6.41 length)

This property Sold and Closed yesterday (June 13, 2008)

It took 33 days.

It sold for $320,000.00

This unit was Listed March 13, 2008. It took 33 days for an acceptable offer to come in.  It was shown an average of 1 time a day during that time. There was considerable interest
in this unit. The seller's finally decided to accept an offer lower than usual because the offer came in as cash.

This unit was in the E. Ramapo School District.

There is currently another unit located at 184 Eagle Ridge Way. Originally Listed for $340,000 and reduced to $337,500. It too has an accepted offer, however has not closed as yet, so the price can not be disclosed.

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