More than 22% of Mortgages are Underwater

This article was on Housing Wire:

 Nearly 11 million properties, roughly 22.5% of all U.S. homes, were worth less than the underlying mortgage in the second quarter, according to CoreLogic.
The percentage of properties in negative equity declined slightly from 22.7% the previous quarter and down from 24% one year ago. Another 2.4 million borrowers held less than 5% equity in their home, what analysts call near-negative equity. CoreLogic also showed nearly three-quarters of all underwater borrowers are paying above-market interest on their home loans.
"High negative equity is holding back refinancing and sales activity and is a major impediment to the housing market recovery," said Mark Fleming, CoreLogic chief  economist.
More borrowers could be in danger of falling underwater. JPMorgan Chase analysts expect home prices to drop another 5% by the beginning of 2012, pushing the amount of underwater borrowers to 15 million, according to a research note released earlier in the month. If prices drop more, possibly 10% further, the number of borrowers in negative equity would approach 20 million.
The Obama administration continues working on a proposal to boost refinancings, which many include eliminating some negative equity restrictions on Fannie Mae and Freddie Mac loans. Some analysts believe such a program would have only modest impact, but CoreLogic showed nearly 28 million outstanding mortgages hold above-market rates and, in theory, should be able to refinance.
Of these, 8 million borrowers are in negative equity.
Some believe the new plan from the administration will be a revamp of the Home Affordable Refinance Program, which allows Fannie and Freddie borrowers with up to 125% LTV to refinance.
But more than 40% of borrowers with LTVs above that limit are trapped with mortgage rates above 6%. Only 17% of borrowers with positive equity have rates at that level.
Negative equity also affects sales. Traditional home sales in areas with low negative equity numbers dropped 61% since the peak in 2005, compared with an 83% drop in areas with more underwater borrowers.
Roughly 60% if borrowers in Nevada were underwater in the second quarter, the highest percentage of any state but down from 68% one year ago. It was followed by Arizona at 49% and Florida at 45%.
"The hardest hit markets have improved over the last year, primarily as a result of foreclosures. But nationally, the level of mortgage debt remains high relative to home prices," CoreLogic said.


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-Daniel Barli, Esq.
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Top 10 Do's & Don'ts When YOU are Securing a Mortgage

Top 10 Do's & Don'ts When YOU are Securing a Mortgage

The final 3 tips for what you should, and shot NOT do when getting your loan:

7) DO Join a Credit Watch Program

Yyou may check your own credit reports regularly (you won't get dinged for a "hard" inquiry). Plus, if something unexpected does show up, you can address it promptly

8) DO Stay Current On Existing Accounts

One 30-day late notice can cost you

9) DO Continue Using Your Credit as Normal

Red Flags are raised easily with the scoring system. If it appears that you are changing your pattern, it will raise a red flag and your score could go down.

Please let us know what else you need from us.

-Daniel Barli, Esq.
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Top 10 Do's & Don'ts When YOU are Securing a Mortgage

Top 10 Do's & Don'ts When YOU are Securing a Mortgage

Here are the next 3 tips for what you should, and shot NOT do when getting your loan:

4) DON'T Max Out or Over-charge credit card accounts

Try to keep your balances below 40% of their limits throughout the loan process.

5) DON'T Consolidate Your Debt
When you consolidate all of your debt onto one or two credit cards, it will appear that you are "maxed out" on that card and you will be penalized

6) DON'T Do anything that will Raise a Red Flag 
This includes adding new accounts, co-signing on a loan or changing your name or address with the bureaus.

Stay tuned for more tips to help YOU with getting the best loan possible!

-Daniel Barli, Esq.
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TOP 10 Do's & Don'ts When YOU are Securing a Mortgage

Good credit is ESSENTIAL when you are trying to secure a mortgage to buy your home. Here are the first 3 tips for what you should, and shot NOT do when getting your loan:


1) DON'T apply for new credit.


Every time that you have your credit pulled by a potential creditor or lender, you can lose points from your credit score immediately.


2) DON'T pay off collections or charge-offs.


If you want to pay off old accounts, do it through escrow, making sure that the debt is yours. Request a "letter of deletion" from the creditor.


3) DON'T close credit card accounts. 


If you close a credit card account, it may appear that your debt ratio has gone up. Closing a card will affect other factors in the score, including credit history.




Stay tuned for more tips to help YOU with getting the best loan possible!


-Daniel Barli, Esq.
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How Purchase Loans Are Made

How Purchase Loans Are Made 
A Step-By-Step Walkthrough

1.		Loan Search - Buyers should seek the advice of an experienced mortgage professional, someone who will help determine which financing options best suit their needs today and in the future.
2.		Loan Application - It's crucial that consumers supply the lender with as much information as possible, as accurately as possible. All outstanding debts as well as assets and income should be included.
3.		Documentation - Buyers must submit paperwork supporting the application as well. Information commonly sought includes pay stubs, two years' tax returns, and account statements verifying the source of the down payment, funds to close and reserves.
4.		Pre-approval - Getting pre-approved for a mortgage allows borrowers to know exactly how much house they can afford. Viewed as "cash buyers", pre-approved borrowers have greater negotiating power as well.
5.		The Hunt - The buyer begins shopping for a house. When the right one is found, the terms of the sale will be negotiated, including the price and potential terms of the loan being sought.
6.		Appraisal - Lenders require an appraisal on all home sales. By knowing the true value of the home, the borrower is protected from overpaying.
7.		Title Search - This is the time when any liens against the property are discovered. A lien may have been placed on a property to ensure payment of outstanding debts by the owner. All liens must be cleared before a transaction can be completed.
8.		Termite Inspection - While most purchase loans do not require a formal inspection for termite and water damage, some loans (especially government loans) allow for the possibility. If problems are found, repairs may be necessary.
9.		Processor's Review - The mortgage professional packages all pertinent information and sends it to the lending underwriter, including any explanations that may be needed, such as reasons for derogatory credit.
10.		Underwriter's Review - Based on the information put together by both the loan executive and the processor, the underwriter makes the final decision regarding whether or not a loan is approved.
11.		Mortgage Insurance - Many lenders require private mortgage insurance when borrowers put down less than 20 percent on a loan.
12.		Approval, denial or counter offer - In order to approve a loan, the lender may ask the borrowers to put more money down to improve the debt-to-income ratio. The borrower may also need a bigger down payment if the property appraises for less than the purchase price.
13.		Insurance - Lenders require fire and hazard insurance on the replacement value of the structure. Flood insurance will also be required if the property is located in a flood zone. In California, some lenders require earthquake insurance on condominiums.
14.		Signing - During this step, final loan and closing documents are signed.
15.		Funding - At this point, the lender sends a wire or check for the amount of the loan to the closing company.
16.		Close of Transaction - Documents transferring title will now be recorded with the County Recorder. -Daniel Barli, Esq. http://www.barlilaw.com Follow us on Facebook Connect with us on LinkedIn

10 ways to decrease the value of your home

Today, we bring you the final 2 ways that you will get LESS money for your home:

7) Environmental Hazards

Things like mold or asbestos can cause the value of a home to plummet.
8) A long list of improvements that need to be made 

This sounds self-explanatory, but today's consumer is looking for a place they can move into today. Give them a list of repairs and they will most likely walk away or offer you far less for your property.
Let us know what the next topic you want to see is!

-Daniel Barli, Esq.
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10 ways to decrease the value of your home

We are continuing with more advice for today's homeowner who is thinking of selling and wants to get more in terms of price. Here are another 2 ways that you will get LESS money:


7) Poor maintenance


If you know that something has to be fixed, fix it. This should go without saying. A buyer will see outdated paint or a dilapidated roof, and move right on to the next property. 


8) Bad location


The cardinal rule of real estate.... location, location, location!


Stay tuned for more help in getting top dollar!


-Daniel Barli, Esq.
http://www.barlilaw.com
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10 ways to decrease the value of your home

We are continuing with tips - these are two more ways the value on your property goes down:


5) Bad roof


A good roof is now considered standard for almost all buyers. If your roof has problems, be prepared to see a drop in your price.


6) Overly personal decor


This may sound a bit "weird," but remember what works for one person doesn't necessarily work for another. Your favorite color may be "in" right now, but the potential buyer may not like it and immediately will think about having to repaint.


# 7 and 8 are coming tomorrow, so come back to see them.




-Daniel Barli, Esq.
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10 ways to decrease the value of your home

Here are two additional ways that the value of your home (and the price you get when you sell) can be decreased:


3) Garbled floor plan


A layout that requires you to go through multiple rooms to get to your bedroom or bathroom is a negative for consumers in the marketplace. Small rooms and bathrooms are another minus...


4) Outdated appliances


There isn't much to say about this one. Consumers don't want to buy a home that needs all the appliances redone and updated.


Stay tuned for more information coming your way!


-Daniel Barli, Esq.
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10 ways to decrease the value of your home

Here are another two ways to increase the value of your home:


1) Absence of garage
Most buyers today are looking for a two-car garage. No garage will be a turn-off to potential buyers, unless you live in a condo or common-dwelling area.


2) A pool
It is being circulated that having a pool will automatically limit your market when it comes time to sell. This is because pools require constant upkeep, get cracks, the equipment is high, the cost to repair/replace is high and it adds liability.


-Daniel Barli, Esq.
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20 ways to improve the value of your home

Here are two more ways that you can increase the value of your home:


9) Good windows


Energy efficiency is important and consumers are looking at exposures and windows. Insulated windows are always a plus and pay for themselves in 5 years. Well placed skylights are also a good touch in today's market.


10) Ample storage


Space is super-important for today's savvy customer. "Nothing beats an oversized garage, attic space and multiple closets."


Keep tuning in to learn more about what you can do for your home!


-Daniel Barli, Esq.
http://www.barlilaw.com
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20 ways to improve the value of your home

Here are another two ways to increase the value of your home:


7) Landscaping


Providing your potential buyer with outdoor spaces with various "touches" (such as pergolas and/or garden swings) may prove extremely helpful. This is not to say you need to spend a lot of money on your property, but keep up with the neighborhood.


8) Basement


A basement with water problems is a big turn-off to a potential buyer. Try to keep your basement dry. Nowadays buyers are also more interested in a finished basement.


Stay tuned for the additional ways that can help you in any economy!


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