Brodie Stephens- Broker Associate Selling Homes in Folsom | Placerville | Pollock Pines | El Dorado Hills | Elk Grove | Roseville | Rocklin

The Los Angeles Times

The Consumer Financial Protection Bureau’s new mortgage complaint service is an extension of the agency’s existing hotline for credit card-related disputes and inquiries.
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http://www.latimes.com/business/realestate/la-fi-harney-20111211,0,6604263.story

Closing costs can increase the price of a home by as much as $10,000, sometimes more.  Borrowers who are “cash-poor” can ask for assistance, or talk to their lender about a lender credit toward closing costs.

Making sense of the story

• Some lenders advertise that if borrowers agree to accept a mortgage interest rate from a quarter to a full percentage point higher than they would ordinarily qualify for, they can receive credit toward their closing costs.
• These mortgages are sometimes called no-closing-cost loans, though the term is misleading.  The credit usually covers only fees charged by the mortgage broker or bank, like the loan origination fee, the underwriting expense, and the appraisal.  That generally leaves title insurance, mortgage-recording taxes, insurance, and escrowed taxes to cover.
• The amount of credit depends on total closing costs and other loan details.  Generally, for every one-eighth of a point increase in interest rate, borrowers receive a credit worth half a percentage point of the principal amount.
• While these mortgages can be helpful to some, borrowers should carefully review all the details.  There are pluses and minuses to these loan types.  A downside is the higher rate and monthly payments remain in place through the life of the loan.
• Doing a side-by-side comparison of loans with and without the credit can be helpful.

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http://nyti.ms/svzEBM

The Federal Trade Commission has charged the operators of a credit repair company with making false statements to credit bureaus about information in consumers’ credit reports, and illegally collecting fees from consumers before performing any services. According to the FTC’s complaint RMCN Credit Services Inc. and the married couple who own it, Doug and Julie Parker, advertised a six-month program to improve consumers’ credit reports. The FTC alleges that the defendants made false statements to credit bureaus disputing the accuracy of negative information in consumers’ credit reports. In letters to credit bureaus, which RMCN did not show to consumers, the firm typically disputed all negative information in credit reports, regardless of the information’s accuracy. RMCN continued to send these deceptive dispute letters to credit bureaus, even after receiving detailed billing histories verifying the accuracy of the information, or signed contracts from creditors proving the validity of the accounts. The complaint alleges that RMCN misrepresented to consumers that federal law allows the company to dispute accurate credit report information, and that credit bureaus must remove information from credit reports unless they can prove it is accurate. In the company’s words, credit bureaus must “prove it or remove it.” RMCN charged a retainer fee of up to $2,000 before providing any service.The defendants are charged with violating the Credit Repair Organizations Act by making untrue or misleading statements to credit bureaus about consumers’ credit worthiness, and by charging fees for credit repair services before they were fully performed.

HUD has reached a settlement with Bank of America, releasing the company from liability for failing to adequately provide alternatives to foreclosure on 57,000 delinquent government-insured mortgages.

The agreement was created on a separate but parallel track from continuing settlement talks between Bank of America, state attorneys general, and other regulators over alleged mortgage origination and servicing failures.

The agreement requires the bank to waive a minimum of $10 million in unpaid mortgage payments and vet each of the 57,000 delinquent borrowers for a possible loan modification, short sale, or other foreclosure alternative.

After such outreach, the settlement paves the way for BofA to foreclose on homes that borrowers could not afford even after a mortgage modification and those that have been left vacant by owners.

The agreement is HUD’s first involving settlement of claims in which a servicer failed to offer loss mitigation to borrowers. It does not, however, prevent HUD from seeking damages from BofA for unrelated origination and servicing failures.

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The drop in the homeownership rate from an all-time high of 69.2 percent in 2004 to 66.4 percent in the first quarter of 2011 reflects a decline from unsustainable levels to something closer to historical averages, according to a study released by the Mortgage Bankers Association’s Research Institute for Housing America (RIHA). While the homeownership rate may have bottomed out, it could fall another one or two percentage points because of tightened credit and other factors, the study says.
Key findings from the study include:
A combination of changes in mortgage credit standards and attitudes towards investment in homeownership likely contributed to much of the rise and fall in homeownership over the decade.  As credit conditions loosened in the first part of the decade, many people of all ages who would have remained renters instead became homeowners.  With the financial crash, the recession, and tighter credit conditions, homeownership rates have fallen back to levels close to those of 2000 for most age groups.
Individuals appear to have been more risk-seeking in their approach to home buying in the first half of the last decade.  This changed to a more risk-averse posture following the real estate meltdown.
Between 2000 and 2009 there was a one percentage point increase in the homeownership rate.  But, were it not for the shifts in access to homeownership through easier credit and the changes in socioeconomic conditions, the homeownership rate would have actually fallen between 2000 and 2005, rather than increasing.
To view the full report, please visit the RIHA website at http://www.housingamerica.org
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