Entries in Home Mortgage (4)


Realtors: This Year Is Best to Purchase a Home

Ryan McVay/Thinkstock(NEW YORK) -- Realtors and mortgage brokers are saying this year may be the best time ever to purchase a home, with mortgage rates at historical lows not seen since President Harry Truman dealt with his own divided Congress.

But the times of easy mortgage money are over, locking out many with tarnished credit from getting a loan. In addition, one of four U.S. homeowners can't borrow because their homes are worth less than the amount of their mortgages.

Freddie Mac announced Thursday fixed-rate mortgages fell near 60-year lows as investor concern over the European debt market keep Treasury bond yields low. The 30-year fixed rate mortgage averaged 4.09 percent, a new all-time low. The 15-year fixed rate mortgage, a popular refinancing option, according to Freddie Mac, also reached a new record low, averaging 3.30 percent for the week.

Long-term, fixed-rate mortgages backed by the Federal Housing Administration averaged 4.08 percent for several months from 1950 to 1951.

Tom Mellett, a senior loan officer at Cole Taylor Mortgages in Pennsylvania, said it may be more difficult to get a mortgage loan that it was two years ago, a period that he calls the "wild, wild West." During that time, mortgage lenders were more widely giving loans to buyers without the wherewithal to purchase a home, hence leading to the sub-prime mortgage crisis.

But Mellett said people who really are in a position to receive a mortgage are actually getting them. He recommended a few initial steps to take advantage of the present low mortgage rates.

First, he recommended checking your credit score for inaccuracies.

Second, set realistic financial expectations for your price range. One guideline is that your proposed housing expenses, including monthly mortgage payments and all other debts, not exceed 45 percent of your gross income, though Mellett said that percentage is not set in stone.

Next, he said it may be wise early on to talk to a mortgage broker or someone registered with the National Mortgage Licensing System to get pre-approved for a mortgage. Mellett said that most realtors recommend pre-approval if you want to be considered a "serious" buyer, sometimes before even taking a potential buyer to look at homes.

Copyright 2011 ABC News Radio


Iowa Attorney General Reviewing Case of Couple Who Got Free Home

Digital Vision/Thinkstock(DES MOINES, Iowa) -- The Iowa Attorney General's office is reviewing the case of a couple who paid virtually nothing for their home because of a century-old Iowa law.

The $320,000 mortgage of Matthew and Jamie Danielson was voided on their home in a suburb of Des Moines because of the "Spousal Homestead" statute, as first reported by the Des Moines Register. That statute, which dates back to the 1880s, requires that both spouses sign a mortgage agreement. Only Matthew Danielson signed the mortgage in May 2007 in what he described as a "rushed" meeting with his mortgage broker, Jason Larson, in the food court of a shopping mall, according to the Iowa Appeals Court decision in May 2009 that voided their mortgage.

Geoff Greenwood, communications director for the Attorney General's office, said the Danielsons' case is "currently being reviewed" and is not a full-fledged investigation. He said the office first began reviewing the case late last month.

At the meeting that finalized the mortgage, Matthew asked if his wife needed to be present and Larson said no, according to a court document. Matthew tried to call Jamie anyway because she handled the couple's finances and worked as a loan originator for a mortgage banker, the court document states.

The loan applications refer to Matthew as "unmarried," according to the court document, and the promissory note he signed was payable to CitiMortgage, the plaintiff in the Iowa Appeals Court case.

When the economy soured, Matthew's home-building business took a turn for the worse. Around the summer of 2007, the Danielsons anticipated a foreclosure and went to their attorney, Jerry Wanek, to file for bankruptcy. Wanek was the one who first noticed that Jamie hadn't signed and recognized the loophole, according to the Register.

When CitiMortgage initiated foreclosure proceedings in December 2007 against Matthew, he used that discrepancy for his defense and ultimately won in the Iowa Appeals Court in 2009.

The Danielsons did not immediately return requests for comments.

Rodney Reed, finance bureau chief of the Iowa Division of Banking, told ABC News that Larson withdrew his application to renew his broker's license in February 2011. Larson had no comment.

Though the Danielsons own their home because of the court's decision, there has been renewed interest in their story since Iowa Gov. Terry Branstad signed an amendment three weeks ago to the Spousal Homestead statute.

"There are some allegations that borrowers have intentionally misrepresented their marital status," said Bob Hartwig, legal counsel for the Iowa Bankers Association, who would not comment specifically about the Danielsons' situation.

Hartwig said the original intent of the law was to protect one spouse from the other.

"It was to prevent a spouse from unilaterally transferring a home out from under the other spouse," said Hartwig, who has been legal counsel for the Iowa Bankers Association for 14 years.

He said he is aware of at least six disputes between lenders and homeowners in Iowa related to the statute. He said he is not aware of similar laws in other states.

He said the new amendment would apply to future cases and not the Danielsons' case. The newly signed amendment gives new defenses to lenders and allows judges to have some leeway if there is "unjust enrichment."

Copyright 2011 ABC News Radio 


Foreclosure Mess: 50 States Investigate Mortgage-Services Industry 

Photo Courtesy - Getty Images(NEW YORK) -- The attorneys general of all 50 states Wednesday announced an investigation into whether sloppiness or deceit caused the latest episode of the national foreclosure drama, further threatening the recovery of the U.S. housing market.

"This is not a silver bullet to keep millions of Americans in their homes," said Iowa Attorney General Tom Miller, who's heading the bipartisan investigation. "This is a chance to right the law and get the process right, a chance to have some extra time...and maybe a chance to do some modifications."

Statements from Miller and other state investigators said the initial focus will be on whether industry employees -- so-called "robo-signers" -- signed off on thousands of foreclosures every month without reviewing the files as legally required.

"Robo-signing is the one [problem]...we're most concerned about," Miller told reporters late Wednesday, but he added, "We're not ruling out other issues."

The immediate goals of the investigation appear to be a halt of improper foreclosures and a review of the past and present mortgage service practices, investigators said.

"We want this to never happen again," Miller said.  "We will try to do this as quickly as possible."  In courts throughout the nation, homeowner attorneys have alleged that lenders forged signatures and improperly notarized documents in the rush to foreclose on homeowners.

"Banks blatantly broke the law, papering the courts with defective documents to railroad consumers into fast, possibly fraudulent foreclosures," Connecticut Attorney General Richard Blumenthal said in a statement.  "At the best, banks engaged in careless negligence, at worst, outright fraud."

Such practices might have violated laws against unfair and deceptive trade practices, which could result in civil penalties, according to investigators.

In recent weeks, major lenders such as JPMorgan Chase, Ally Financial's GMAC Mortgage unit and Bank of America have conceded that paperwork supporting an unknown number of foreclosures contain errors ranging from wrong dates to forged or inconsistent signatures.  In some instances, mortgage company employees signed foreclosure documents without first verifying the information in them.

Copyright 2010 ABC News Radio


Wells Fargo: Reviewing Foreclosure Affidavits; No Suspension

Photo Courtesy - Getty Images(NEW YORK) -- A spokesperson for Wells Fargo Home Mortgage told ABC News that the lender/loan servicer is reviewing the foreclosure affidavits for all pending foreclosures.

The bank specifically says it is not issuing a moratorium on foreclosures, but simply reviewing the legal documentation for the foreclosures it is currently processing.

“Foreclosure is truly a last resort,” said the spokesperson.  “Delaying foreclosures can be damaging because properties cannot be resold to stabilize markets and home prices.”

The spokesperson said Wells Fargo first attempts to contact a delinquent homeowner within 14 days of the first missed payment.  Their current procedure for foreclosures has the bank calling delinquent customers on average 77 times and sending on average 48 letters before the foreclosure is completed.

They are reviewing the documents by order of “proposed foreclosure sale date” – meaning a property that will be put on the market in November is getting a look before one that is likely to be put on the market in December.

While the review has found no affidavits which are not in compliance with the bank’s standards or legal requirements thus far, they will resubmit any affidavits which are found to be non-compliant.

Copyright 2010 ABC News Radio

ABC News Radio