Foreclosure Improvements….

BY JANN SWANSON

Foreclosure Improvements Held Back by Judicial States

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Oct 31 2013, 9:38AM

Completed foreclosures in September totaled 51,000 nationwide, down 39 percent from a year earlier when banks repossessed 84,000 homes.   CoreLogic said, in its September National Foreclosure Report, that the number of foreclosures last month was virtually identical to that in August.

By way of comparison, CoreLogic said that in what might be considered a more normal market, the period from 2001 to 2006, there were an average of 21,000 foreclosures completed each month.  The approximately 4.6 million foreclosures completed in the 60 months since the financial crisis began in September 2008 average 76,700 per month.

In September the foreclosure inventory, that is the number of homes in some stage of foreclosure, stood at approximately 902,000, down one third from 1.4 million one year earlier.  The inventory decreased by 3.3 percent from August to September.  The inventory in September represented approximately 2.3 percent of mortgages homes in the U.S., down from 3.2 percent in September 2012.

"The foreclosure inventory continues to decline, now standing at an early 2009 level," said Mark Fleming, chief economist for CoreLogic. "Just over 900,000 properties remain in the inventory, two thirds of them in judicial states where the foreclosure process is typically slower. Consequently, the pace of overall improvement in the inventory will slow down and distressed assets will cast a long shadow over housing markets in states with judicial foreclosure."

"The number of seriously delinquent mortgages continues to drop across the country at a rapid rate with every state showing year-over-year declines in foreclosure inventory," said Anand Nallathambi, president and CEO of CoreLogic. "We're not out of the woods yet, but these are encouraging signs for a return to a healthier housing market in the U.S."

Five states accounted for almost half of all completed foreclosures over the 12 months ended in September.  Florida had 115,000 foreclosures, California 52,000, Texas 43,000, Michigan, 40,000, and Georgia 39,000. The states with the highest foreclosure inventory as a percent of mortgaged homes were Florida (7.4 percent), New Jersey (6.5 percent), New York (4.8 percent), Maine (4.0 percent) and Connecticut (3.7 percent).

Best Regards Chris Mesunas

 

Steady Rates till 2014…

Freddie Mac: Slower Housing Market, Steady Rates Till 2014

 

Banks Relax Mortgage Requirements…

Oct. 17, 2013, 7:17 a.m. EDT

Home buyers no longer need perfect credit to score a loan

 

By AnnaMaria Andriotis

Michael D Brown / Shutterstock.com

To get a mortgage lately, home buyers have had to jump through hoops, performing back flips and other acrobatics while lenders grade their credit worthiness with the eye for perfection of an Olympic judge. But they can finally breathe a little easier, data shows. Banks are increasingly willing to overlook credit scores that aren’t quite gold medal material.

The average credit score among borrowers who received a mortgage in September was 732, down from a peak of 750 a year prior, according to new data released today by Ellie Mae, which provides mortgage lenders with loan origination systems. That’s also the lowest average credit score since the company started tracking this data in August 2011. In addition, a greater share of borrowers have lower credit scores. Thirty-two percent of mortgages doled out in September went to borrowers with an average FICO credit score (the measure used by most lenders) of less than 700 compared with 17% a year ago, according to the findings. The changes suggest a critical shift is under way in the housing market, which could help more applicants gain access to home loans. “It does seem there’s a little bit of an opening that’s going on,” says Brad Hunter, chief economist at Metrostudy, a housing-market research and consulting firm. “Lenders are being more lenient.”

Lenders pulled back on giving mortgages to borrowers with less-than-perfect credit in 2008 as the number of borrowers who foreclosed on their homes spiked. That’s left millions of would-be home buyers shut out of the housing market. The findings suggest that some borrowers who were unable to gain financing as recently as a year ago could get mortgage approval now.

To be sure, the bar to getting a mortgage remains high. Applicants who were denied a mortgage in September had an average FICO score of 696, according to Ellie Mae—a score that’s relatively stellar by most counts. FICO scores range from 300 to 850. Before the recession it was common for borrowers with credit scores in the 600 range and below to get mortgages.

Ellie Mae’s data comes from lenders that input mortgage applicants’ information in its software, which processes applications. The data represents 20% to 30% of all mortgage applications in the country.

The recent loosening of credit standards comes as lenders are trying to boost demand for mortgages. Until recently, large numbers of homeowners were refinancing to lower their mortgage rates — a trend that slowed down as mortgage rates started rising earlier this year. Since May, applications for refinancing have dropped 70%, according to the Mortgage Bankers Association. In turn, some lenders “are willing to loosen somewhat to try to increase their purchase volume,” says Mike Fratantoni, vice president of research and economics at the Mortgage Bankers Association. The pace at which borrowers’ average credit score dropped intensified starting in May. Since then, it has declined 11 points compared with a six-point drop from January through May, according to Ellie Mae.

On another level, willingness to accept lower credit scores underscores a delicate balance of give and take that lenders employ. When one risk factor is eliminated (or significantly declines), some lenders are willing to take on more risk elsewhere. Consider the following: As home values increase, there’s less of a risk that borrowers will end up owing more on their mortgage than their home is worth, and therefore less of a risk of borrowers intentionally walking away from their home. As those risks have lessened, lenders have become more comfortable taking on risk elsewhere—in the form of somewhat lower credit scores, says Fratantoni.

For borrowers, the Ellie Mae data offers some insight into where those with less-than-perfect credit scores can find a mortgage. Home buyers who get mortgages backed by the Federal Housing Administration, which require a small down payment, have lower credit scores—694 on average—than those who get mortgages backed by Fannie Mae or Freddie Mac, whose credit scores average 758, according to Ellie Mae. While FHA mortgages have for years had lower credit score requirements than other home loans, lenders say this requirement has loosened even further in recent months. The U.S. Department of Housing and Urban Development, which includes the FHA and which is closed due to the government shut down, did not immediately respond to a request for comment.

In addition, homeowners who want to refinance encounter lower credit hurdles. Homeowners who refinanced into Fannie Mae or Freddie Mac mortgages in September had an average credit score that was 23 points lower than home buyers who received financing that month. That spread has been growing all year; at the end of the first quarter it was just four points. That’s partly because borrowers who refinance tend to have more equity in their home, which makes them less of a risk to lenders who in turn allow for more flexibility when it comes to credit scores, says Stu Feldstein, president of mortgage-research firm SMR Research.

Despite loosening, borrowers with less than ideal credit scores have to pay more to get a mortgage. That’s either in the form of points—meaning that they’re paying a certain number of percentage points of the total dollar amount of the loan upfront—or a higher interest rate, says Mark Goldman, a senior loan officer at San Diego-based mortgage brokerage C2 Financial Corp. Separately, borrowers who have to sign up for private mortgage insurance (a cost that kicks in if borrowers don’t have enough of a down payment) will end up paying more for this if they have lower credit scores. Consider a $200,000 mortgage for a single-family home purchase in California with a 10% down payment: running the numbers with one large PMI firm, a borrower with a 700 credit score would end up paying 0.62% of the total loan amount each year while the same borrower with a 750 credit score would pay 0.49%, says Goldman.

Hope you find this info helpful.

Best Regards, Chris Mesunas.

 

Can You Get a HARP Refinanced with a Piggyback Mortgage…

Can You Get a HARP Refinance If You Have a Piggyback Mortgage?

By Robert Koller

The government’s Home Affordable Refinance Program (HARP) has helped millions of homeowners save money on their monthly mortgage payments, and it might help you, too — even if you owe more on your loan than your home is worth. But what if you have a “piggyback” loan — a second mortgage that you took out at the same time you bought your home?

Good news! Even with a piggyback loan, you may still save money by refinancing through HARP.

 

What is a piggyback mortgage?

Piggyback mortgages, also called second mortgages, are sometimes used by home buyers who don’t have the funds to make a large down payment and may want to avoid paying for private mortgage insurance (PMI). If you closed on a second mortgage at the same time you closed on your first mortgage and are currently paying on two mortgages for one home, you probably have a piggyback mortgage.

Your “first” mortgage is the primary mortgage on your home and likely is larger than your second mortgage.

It’s important to understand that your first and second mortgages are separate obligations, and only first mortgages are eligible for HARP.

Tale of 2 mortgages

If you are eligible to refinance through HARP, you’ll take out a new mortgage and use those funds to pay off your existing first mortgage.

Your piggyback (or second) mortgage cannot be refinanced under HARP, and you cannot pay off your piggyback mortgage with funds from your HARP refinance. However, you can work with your current mortgage company, or another mortgage company, to refinance your piggyback mortgage at the same time that you complete a HARP refinance. Whether you decide to refinance your existing second mortgage or keep it as is when you refinance your first mortgage through HARP, your mortgage company will need to take steps to “subordinate” that second mortgage. That just means that your first mortgage obligation takes precedence over the second.

Is HARP right for you?

By taking advantage of today’s low interest rates, you may still save money on your monthly payments by refinancing your first mortgage through HARP. Your mortgage company can estimate what your new monthly payment would be with a HARP refinance.

To find out your HARP eligibility, contact your mortgage company. Be sure to mention that you have a piggyback (second) mortgage, so the lender can take any necessary steps to either “re-subordinate” your second mortgage or help you refinance your second mortgage at the same time you are refinancing under HARP.

Finally, if your mortgage company is unable to help you with a HARP refinance, ask another lender to assist you. Any lender participating in HARP may be able to help refinance a loan. A list of participating HARP lenders is available through HARP.gov.

 

What will Mortgage Rates do…

Mid-October Preview : What Will Mortgage Rates Do Next?

AUTHOR

Dan Green

 

 

Mortgage markets worsened a bit last week. One week after posting the fastest rate-drop in more than 4 years, U.S. mortgage rates edged higher between Monday and Friday.  

During the trading week, Fannie Mae's mortgage-backed securities (MBS) changed +17/32 last week. Fannie Mae MBS are tied to conventional mortgages and conventional mortgage rates. Programs subject to Fannie Mae bonds include the HARP 2.0 refinance program and the Conventional 97 mortgage.

Bonds issued by Ginnie Mae were mostly a little bit worse, moving -14/32. Ginnie Mae bonds are linked to mortgage rates for FHA and VA loan products. Rates for the FHA Back To Work program and the VA IRRRL program increased last week.

This week, without a government shutdown resolution, mortgage rates may fall.

Click to skip to today's live mortgage rates.

15-Year Mortgage Rates Dropping Quickly

According to Freddie Mac's weekly survey of 125 banks nationwide, the conventional 30-year fixed rate mortgage rate now average 4.23% — near the 4-month low.

Not since June have mortgage rates been as low as are they are today. Home buyers have regained some their lost purchase power from the summer; and homeowners are benefitting from a "second chance" to refinance.

At today's rates, the typical HARP mortgage saves 27 percent. That's a big number. Furthermore, for homeowners looking to own their home sooner, current 15-year mortgage rates are incredibly low as compared to 30-year ones.

The 15-year fixed rate mortgage rate now averages 3.31% nationwide — 0.92 percentage points lower than a comparable 30-year product which is more than double the historical interest rate spread.

At today's rates, mortgage applicants using 15-year mortgages will save $50,000 in mortgage interest over the life of their loan for every $100,000 borrowed. 

A home buyer borrowing at the conforming loan limit of $625,500 in Orange County, California, therefore, will save more than a quarter-million dollars by going with a 15-year loan. 

Even if 2014 Conforming Loan Limits get congressionally-reduced, the math on the loan still works. The 15-year loan program remains a relative bargain.

Predicting This Week's Mortgage Rates

Mortgage rates have moved quickly this month, making it difficult to shop for the lowest mortgage rates possible. This week, rates could be equally jumpy.

As a rate shopper, the most important thing to remember is that this month's government shutdown has delayed the release of economic data including, but not limited to, the Non-Farm Payrolls report, the Retail Sales report, and key inflation reports.

This is a big deal because, several weeks ago, the Federal Reserve reminded us that it's dependent and that the future of QE3 and other stimulus would depend on the general health of the U.S. economy.

QE3 is linked to low mortgage rates.

It's only known truth is that the longer the shutdown lasts, the weaker U.S. economic output will be. The government shutdown is estimated to cost $160 million daily, with unknown long-term costs related to loss of business and consumer confidence.

This week, the shutdown may end. Until it does, however, markets will search for clues for what's with QE3 and U.S. mortgage bonds and there will be no shortage of places to look between now and Friday.

The calendar of events for Fed member speeches is on full-tilt : 

• Monday : Fed Chairman Ben Bernanke speaks
• Tuesday : Fed Members John Williams, Richard Fisher and William Dudley speak
• Wednesday : Fed Member Richard Fisher speaks
• Thursday : Fed Members Richard Fisher, Charles Evans, Esther George, and Narayana Kocherlakota speak
• Friday : Fed Members Daniel Tarullo, Charles Evans, and Jeremy Stein speak

In addition to this week's scheduled Fed speakers, there are non-government-published reports which may affect this week's mortgage rates, including Wednesday's National Association of Homebuilders Housing Market Index. 

 

How Much Can You Afford…

How Much Home Can You Afford?

DATE:OCTOBER 9, 2013 | CATEGORY:FINANCE | AUTHOR:EXPERIAN CONSUMER SERVICES

 

You’ve rented for years and are yearning to buy a home of your own. But how do you know what your house-hunting budget should be?

Good news: With just a little financial information you can actually do thoseaffordability calculations before you officially begin shopping for a mortgage. Here are the top things lenders typically consider when determining how much house you can afford.

Debt-to-income ratio

One of the first factors a lender will analyze is your debt-to-income ratio, or DTI. Lenders use this measurement to ensure that you’ll have enough income to cover both your new mortgage payment and any existing monthly debts such as credit card, auto loan and student loan payments.

Generally most lenders want your debt-to-income ratio, including your anticipated new monthly mortgage payment, not to exceed 36 percent. The ratio is calculated by taking your total monthly debt load and dividing it by your monthly gross income.

What does that mean in dollars and cents? Someone who earns $5,000 per month and carries $500 in monthly debt would have a DTI of 10 percent. This borrower generally could be approved for a maximum monthly mortgage payment of $1,300, including property taxes, homeowners insurance and private mortgage insurance. Someone making the same salary but carrying zero debt generally could be approved for a maximum monthly mortgage payment of $1,800.

Credit considerations

There are several key factors in securing a mortgage loan, and your credit is one of the most important elements. Your credit scores is based on your payment history, overall level of debt, length of credit history, types of credit and applications for new credit.

If your credit score falls within an undesirable range or includes unfavorable marks, traditional lenders might be leery of approving you for a loan. You may be able to obtain a loan, but you’ll likely pay a higher mortgage rate, which will ultimately result in a higher mortgage payment.

Well before you apply for a home mortgage loan, pull your credit report to review where you stand, and research the requirements you need to meet with your desired lender. Understanding your personal credit profile and the lender’s expectations will help you understand the interest rates you likely qualify for and the terms your loan will likely be.

Down payment requirements

With the exception of Veterans Affairs (VA) loans and some special programs for first-time buyers, a home purchase requires that you have some cash on hand. How much? Anywhere from 3.5 percent of the sales price for a Federal Housing Administration (FHA) loan to as much as 20 percent for a conventional loan. Expect to get a better interest rate if you’re able to make a down payment of at least 20 percent.

Keep in mind that the down payment amount doesn’t include closing costs, which are fees related to the purchase of the home. Typically, buyers pay between 2 percent and 5 percent of the purchase price of the home in closing costs.

The big picture

If you have less-than-amazing credit, then you may want to consider waiting to purchase a home and making changes in your spending habits to improve your credit score. Many experts suggest before you even consider buying a home, you should be debt-free and have three to six months of expenses saved — in addition to your down payment and closing costs.

“Being debt-free or close to it with some money in the bank is optimal,” said Tiffany Kjellander, owner and operations manager of Augusta, NJ-based EXIT Towne & Country Realty. “It can be tough to hear that it’s not the right time for you to look for a house, but the truth is that getting your financials in order and putting some money in the bank could keep you from losing your home if you get sick or lose your job down the road.”

Further, Kjellander advises that potential homeowners think long term. The cost of homeownership extends beyond the monthly payment and includes routine maintenance and repairs, homeowners association dues and additional utilities that you might not have paid while renting.

“Just because you’re approved to spend $3,000 per month on a house doesn’t mean you have to go that high,” she said. “Buying a home is a huge financial decision. No one should enter into it blindly.”

Related:

• • What Really Influences Your Credit Score?
  • 3 of 10 Americans Unlikely to Qualify for a Mortgage
  • 5 Tips to Help You Save for a Down Payment

 

Shut down slows application process…

Government Shutdown Slows Application Process as Mortgage Rates Dip

 

Banks Abandon Mortgage Pre-approvals…

Oct. 3, 2013, 9:23 a.m. EDT

What the decline of preapprovals means for homebuyers

By AnnaMaria Andriotis

The mortgage preapproval, for years a crucial step in the home-buying process, is losing its luster with lenders, new data shows.

A mortgage preapproval is a written commitment lenders give to buyers that states the maximum size home loan they can get as well as the likely interest rate. Buyers rely on preapprovals to make sure they’re shopping for a home that’s in their price range. But new federal data suggests lenders are scaling back on preapprovals. Among the top 25 mortgage lenders, just 29,912 preapprovals resulted in mortgages that borrowers received to purchase a home last year, according to data released last month by the Federal Financial Institutions Examinations Council. That’s down from 101,626 in 2007, before the housing downturn. Preapprovals accounted for 4% of purchase mortgages that were originated by these lenders last year, down from 9% in 2007.

The bank that rejects the most mortgages

In addition, preapprovals—which have traditionally been considered one of the first steps to getting a home loan—did not precede any of the mortgages doled out to home buyers by 14 of the largest 25 lenders last year. “The popularity of preapprovals is quite low,” says Mike Lyon, vice president of mortgage operations at Quicken Loans. (The mortgage lender had 598 preapprovals result in mortgages last year, down 43% from 2007, according to this government data.)

Andy Dean Photography / Shutterstock.com

The demise of the preapproval comes at a delicate time for home buyers. As competition heats up, bidding wars are becoming the norm; for prospective buyers to stand out to sellers, they often need to show proof that they have lined up financing and are ready to proceed with the transaction, says Jim Gaines, research economist at Texas A&M University’s Real Estate Center. Preapprovals provide that evidence to sellers, and buyers who lack them will have a hard time getting a home that has many offers on it. Preapprovals may also provide some leverage to buyers who are competing against all-cash buyers, who accounted for 32% of existing-home sales in August, up from 27% a year prior, according to the latest data from the National Association of Realtors. Because they don’t need a mortgage, all-cash buyers often make lower offers on homes; a home buyer with a higher offer and a preapproval could beat them out, says Gaines.

Bernanke gives home buyers a breather

To be sure, this government data may not encompass all preapprovals. The numbers are released under the Home Mortgage Disclosure Act, which requires lenders to submit their mortgage and preapproval numbers to the federal government. Some lenders say they don’t submit data for their preapprovals because they don’t meet the federal definition. The official criteria include a written commitment to give a home loan for a certain period of time, with the caveat that approval can change only for a few reasons including a change in the home buyer’s financial standing or some other conditions that could derail a sale, like a report of termites in the home.

Housing experts, however, say the decline in preapprovals is largely due to dwindling competition among mortgage lenders for new clients. Prior to the recession, lenders used preapprovals as way to attract would-be borrowers. Buyers who had this commitment from a lender were more likely to turn to this company when they were ready to get the actual mortgage, says Keith Gumbinger, vice president at mortgage-info site HSH.com. In that way, preapprovals became a revenue source for lenders. Since the recession, many lenders have shut down, and that has decreased competition for buyers, he says.

Separately, lower-than-expected appraisals of homes have resulted in fewer preapprovals, says Gumbinger. Preapprovals are usually given before buyers identify the home they want to buy. When the home’s appraisal is determined to be lower than the purchase price the buyer and seller agreed to, the lender often requires the buyer to come up with the extra cash to make up the difference; buyers who are unable or unwilling to do so walk away, and the preapproval ends up derailed.

Housing markets about to get squeezed

Several banks, including Chase and Bank of America, say rather than preapproving home buyers, they’re mostly doing pre-qualifications. With pre-qualifications, lenders inform borrowers of the size of the loan they can qualify for based on their stated income and assets as well as an initial credit check. Historically, pre-qualifications were the first step buyers would take before shopping, which was then followed by a preapproval when they became serious about a specific home they wanted to purchase.

To give buyers a better idea of where they stand, Chase says it provides a more detailed prequalification program through which buyers get a “conditional approval” that usually lasts 90 days, which they can share with the seller. The bank says this type of approval differs from the federal definition of a preapproval because it is not a written commitment; instead, its commitment is often delivered after verifying borrowers’ income, employment and the home’s appraisal. Similarly, a Bank of America spokesman says the bank wouldn't approve a buyer until the home is appraised and the borrower’s financial condition is fully vetted.

A prequalification doesn’t provide the same leverage to buyers though as an official preapproval. Pre-qualifications are typically based on average mortgage rates rather than the rate that’s close to what the borrower would actually get. Also, most lenders can rescind a prequalification, whereas a preapproval is a commitment that usually lasts two to three months.

 

Ways to Manage Credit When Searching For a Mortgage

Ways to Manage Credit When Seeking a Mortgage

Shutterstock

By Scott Sheldon



Consumer debt: Many of us have it. And most who do, have a love/hate relationship with it. If you can't make the purchase with cash, do it with debt — right? We love to know we can still consume, but we hate the bill that comes 30 days later, along with the subsequent monthly payment. Ouch!



Like it or not, your relationship with money can be best expressed on paper by how much debt you carry or don't carry, more specifically in the form of credit card debt. Credit card debt is a double-edged sword when it comes time to making high-ticket purchase like buying a home. On one end of the spectrum, having open trade lines with no debt increases a credit score, which can lower the cost of your mortgage. On the flipside, payment obligations reduce your ability to qualify, lowering how much house you're eligible for. So here's a quick guide to managing credit card debt when trying to get the holy grail (i.e. a mortgage):



How Credit Cards Help You Land a Mortgage: Credit cards that are paid current with no derogatory items or delinquencies improve and support a good credit score, which reduces your borrowing costs. Mortgage lenders typically want to see a borrower carry at least three open trade lines (and credit cards are a common form of a trade line). Examples of this would be a line limit with a department store for example or even basic Visa credit card.



Other ways credit cards help you in the mortgage process:

1. Credit cards are reported to the credit bureaus (sometimes just one or two bureaus), and are very beneficial to a credit score, assuming you have a perfect payment history.

2. Assuming you have no derogatory items or late payments, your credit card obligation can show a "pattern over time" of consistent satisfactory history.

3. If you carry no balances, this shows a lender that a person has "good character."



How Credit Cards Can Hurt Your Ability to Land a Mortgage: Credit cards, when not properly managed, have a greater effect on reducing your ability to land a mortgage than they do to improve it. Let's look at how they can do this:



1. Credit card companies are required by law to report the minimum monthly payment due, associated with any present balance carried. If the minimum payment is $100 per month, that's what will show up on the credit report, and that's the amount the lender will use, dollar for dollar. In other words, because the debt is present, how much you can borrow in terms of total house payment will be limited by $100 per month. Granted, $100 per month is small in the grand scheme of things, but the payment will reduce the amount of house payment you can take. (This goes for any minimum credit card payment.)

2. Multiple credit cards spread out with high balances and high payments limit your borrowing power because the minimum payment obligations are higher, thus reducing your potential allowed house payment.

3. Have a credit card late payment? This will tank your credit score, increasing the costs to borrow mortgage money, thereby making your home loan … drum roll, please … more pricey. (Note that a consistent pattern of lack of repayment over time is what really drops the credit score, which could also derail your loan approval.)

4. Credit card charge-offs still reporting a balance on your credit report will need to be zeroed out in order for you to successfully fund your new home loan. This will negatively impact your credit score. However, the negative effect of having an outstanding debt compounds due to the additional costs of paying off the previous charged-off balances, in addition to the higher interest for the mortgage from the lower credit score. Don't have the funds to pay off the previous bad debt? Then the loan won't happen.



Managing Credit Cards to Secure the Best Mortgage Terms: Because credit cards can either hinder or help your ability to get a mortgage, there is a fine line not to be crossed. The best scenario for your mortgage would be to have minimal or no credit card delinquencies of any kind in the past 12 months.



Are you paying off your credit card in full every month? Make sure you know when they report to the credit bureaus, so you can have the mortgage lender pull your credit report and credit score after that date so as to preserve high credit score. If there are multiple credit cards and you have the ability to consolidate the debt to reduce your minimum payment obligations, do it. Lenders are looking for cash flow after expenses. The more cash flow after expenses, the better your chances of a favorable credit decision with the lender.



Finally, if you know you want to buy a home in the near future, now is the time to get up to speed on your credit situation. Pull your credit reports and look for errors, signs of fraud, and areas that you need to work on (like payment history or debt usage, for example). You should also start monitoring your credit score so you can build your credit in order to get the best rates possible.



Consumers are allowed to get their credit reports for free once a year from each of the three credit reporting agencies through AnnualCreditReport.com. You can also obtain your score using free credit score tools and services. (Credit.com offers a snapshot of your scores and a breakdown of your credit profile to help you determine what areas you need to work on.) Whether you use a free score or you buy one from a credit scoring service, know that the number you seemay differ somewhat from the score your mortgage lender will see, but it will nevertheless give you a helpful range to work within.

 

Freddie Mac to recover $1.3 billion from Wells, Citi, and Suntrust…

BY JANN SWANSON

Freddie Mac to recover $1.3 billion from Wells, Citi, and Suntrust

Freddie Mac has tentatively settled three more claims with financial institutions over representations and warrantiesrelated to single family loans.  The agreements resolves claims against Wells Fargo Bank, Citibank and CitiMortgage (collectively "Citigroup") and SunTrust Mortgage and should result in a total recovery for the company of approximately $1.3 billion.

Under terms of the agreements, announced on Tuesday, Freddie Mac will, with some limitations and exclusions, release the companies from existing and future loan repurchase obligations for specific populations of loans.  The payments also compensate Freddie Mac for certain past losses and potential future losses arriving out of denials, cancellations, or other actions related to private mortgage insurance.

The Wells Fargo settlement involves claims against the bank regarding existing and future repurchase obligations for loans funded by Freddie Mac prior to January 1, 2009 including approximately 6.7 million loans sold by the bank to Freddie Mac between 2000 and 2008.  Wells Fargo has agreed to pay a total of $869 million less credits of $89 million for previous repurchases and for reconciling adjustments. 

The Citigroup settlement will result in a payment to Freddie of $395 million less $43 million in credits for other repurchases and adjustments.  It releases the bank from repurchase obligations for approximately 3.7 million loans funded by Freddie Mac between 2000 and 2012.

SunTrust has agreed to pay Freddie Mac a total of $65 million, less credits of $25 million as in the agreements above.  In return the company will release the bank from repurchase obligations for approximately 312,000 loans they funded between 2000 and 2008.

"With these settlements, Freddie Mac is recouping funds effectively due to the nation's taxpayers," said Freddie Mac CEO Donald H. Layton. "We believe these settlements are equitable, and we are pleased to have resolved legacy repurchase issues with three of our valued customers."

All of the agreements were signed between September 25 and September 30, 2013 and were approved by the Federal Housing Finance Agency (FHFA) as Freddie Mac's conservator.