Oklahoma Real Estate Blog

In an effort to end the foreclosure crisis, the Obama administration has been trying to keep defaulting owners in their homes. Now it will take a new approach: paying some of them to leave.

This latest program, which will allow owners to sell for less than they owe and will give them a little cash to speed them on their way, is one of the administration’s most aggressive attempts to grapple with a problem that has defied solutions.

More than five million households are behind on their mortgages and risk foreclosure. The government’s $75 billion mortgage modification plan has helped only a small slice of them. Consumer advocates, economists and even some banking industry representatives say much more needs to be done.

For the administration, there is also the concern that millions of foreclosures could delay or even reverse the economy’s tentative recovery — the last thing it wants in an election year.

Taking effect on April 5, the program could encourage hundreds of thousands of delinquent borrowers who have not been rescued by the loan modification program to shed their houses through a process known as a short sale, in which property is sold for less than the balance of the mortgage. Lenders will be compelled to accept that arrangement, forgiving the difference between the market price of the property and what they are owed.

“We want to streamline and standardize the short sale process to make it much easier on the borrower and much easier on the lender,” said Seth Wheeler, a Treasury senior adviser.

The problem is highlighted by a routine case in Phoenix. Chris Paul, a real estate agent, has a house he is trying to sell on behalf of its owner, who owes $150,000. Mr. Paul has an offer for $48,000, but the bank holding the mortgage says it wants at least $90,000. The frustrated owner is now contemplating foreclosure.

To bring the various parties to the table — the homeowner, the lender that services the loan, the investor that owns the loan, the bank that owns the second mortgage on the property — the government intends to spread its cash around.

Under the new program, the servicing bank, as with all modifications, will get $1,000. Another $1,000 can go toward a second loan, if there is one. And for the first time the government would give money to the distressed homeowners themselves. They will get $1,500 in “relocation assistance.”

Should the incentives prove successful, the short sales program could have multiple benefits. For the investment pools that own many home loans, there is the prospect of getting more money with a sale than with a foreclosure.

For the borrowers, there is the likelihood of suffering less damage to credit ratings. And as part of the transaction, they will get the lender’s assurance that they will not later be sued for an unpaid mortgage balance.

For communities, the plan will mean fewer empty foreclosed houses waiting to be sold by banks. By some estimates, as many as half of all foreclosed properties are ransacked by either the former owners or vandals, which depresses the value of the property further and pulls down the value of neighboring homes.

If short sales are about to have their moment, it has been a long time coming. At the beginning of the foreclosure crisis, lenders shunned short sales. They were not equipped to deal with the labor-intensive process and were suspicious of it.

The lenders’ thinking, said the economist Thomas Lawler, went like this: “I lend someone $200,000 to buy a house. Then he says, ‘Look, I have someone willing to pay $150,000 for it; otherwise I think I’m going to default.’ Do I really believe the borrower can’t pay it back? And is $150,000 a reasonable offer for the property?”

Short sales are “tailor-made for fraud,” said Mr. Lawler, a former executive at the mortgage finance company Fannie Mae.

Last year, short sales started to increase, although they remain relatively uncommon. Fannie Mae said preforeclosure deals on loans in its portfolio more than tripled in 2009, to 36,968. But real estate agents say many lenders still seem to disapprove of short sales.

Under the new federal program, a lender will use real estate agents to determine the value of a home and thus the minimum to accept. This figure will not be shared with the owner, but if an offer comes in that is equal to or higher than this amount, the lender must take it.

Mr. Paul, the Phoenix agent, was skeptical. “In a perfect world, this would work,” he said. “But because estimates of value are inherently subjective, it won’t. The banks don’t want to sell at a discount.”

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The article mentions the $75 Billion already allocated for workouts that the Federal Government insititued previosuly. While I applaud this and the administrations desire to make short sales streamlined, uniform, and have new incentives, as a real estate short sale specialist I know that if I take the 5 hardest hit states, there has been a $2 Trillion loss of equity. For instance 70% of Nevadans owe more that the value of their home. While Oklahoma is not in that shape, this problem exist in every major city and beyond. I wish I had an answer, and i wish some genius in Washington DC could come up with one also.

See more news releases in: Computer Electronics, Carriers and Services, Mobile Entertainment, Networks, Telecommunications Equipment, Telecommunications Industry, Wireless Communications, New Products & Services

 

AT&T Invested Nearly $650 Million in Oklahoma Wireless and Wireline Network Over the Past Three Years

 

Network Projects Aimed At Enhancing Mobile Broadband Service Across the State

OKLAHOMA CITY, March 4 /PRNewswire-FirstCall/ — AT&T* today announced that AT&T’s total capital investment in its Oklahoma wireless and wireline networks was nearly $650 million from 2007 through 2009. Since 1996, AT&T has invested more than $2.8 billion in its wired and wireless services in Oklahoma.

In 2009 alone, AT&T added more than 30 new cell sites in Oklahoma, upgraded four cities to 3G and expanded 3G capacity in Oklahoma City and Tulsa. In addition, AT&T plans to continue to enhance mobile broadband service in 2010 with the construction of more new cell sites and the upgrade of additional cell sites to 3G.

The planned wireless network enhancement strategy is part of AT&T’s 2010 wireline and wireless capital investment, which is expected to be in the $18 billion to $19 billion range companywide, an increase of between 5 and 10 percent over 2009. This planned amount also includes an increase of about $2 billion in capital expenditures for wireless and backhaul related to AT&T’s wireless network. This planned level of investment is framed by the expectation that regulatory and legislative decisions relating to the telecom sector will continue to be sensitive to investment.

“Investment in the state’s broadband networks is critical to keeping Oklahoma competitive and providing our citizens with the best technology,” said Oklahoma House Speaker Chris Benge. “Expanding and enhancing the mobile broadband network extends the benefits of broadband access to many consumers who are relying more and more on wireless technology to access the Internet.”

“The enhanced coverage and improved wireless service created by these investments are vitally important to our state’s economic development efforts,” said state Senate President Pro Tempore Glenn Coffee. “More than ever before, Oklahomans look to wireless communications to stay in touch with family, friends and business colleagues.”

“These investments in smart networks are enabling the innovation of today and tomorrow that will enhance economic growth and stimulate jobs,” said Bryan Gonterman, president, AT&T Oklahoma. “We commend the work of our elected officials who are creating a positive economic environment that provides opportunities for companies to continue to invest aggressively in Oklahoma.”

Internet usage growth has brought tremendous benefits for consumers, but requires tremendous investments in infrastructure. This significant investment in infrastructure and jobs is possible due to policy that enables companies to compete and offer the innovative services that consumers are increasingly demanding. AT&T has been working with policy makers to support a national broadband plan that enables broadband adoption and ensures broadband access to every American by 2014.

Wireless data traffic on the AT&T network has grown more than 5,000 percent over the past three years, largely attributed to today’s advanced smartphones that are generating dramatically increasing volumes of network traffic. In fact, roughly 40 percent of AT&T’s postpaid customer base uses a smartphone today, representing twice the number of smartphone customers than any other U.S. provider.

“We’re seeing advanced smartphones driving up to 10 times the amount of usage of other devices on average,” said Steve Gray, AT&T’s Vice President and General Manager for the Oklahoma and Arkansas region. “Despite these unprecedented increases in wireless data traffic, AT&T’s network investments and upgrades have enabled us to continue to deliver the nation’s fastest 3G network.”  

AT&T recently completed a software upgrade at 3G cell sites nationwide that prepares the nation’s fastest 3G network for even faster speeds. The deployment of High-Speed Packet Access (HSPA) 7.2 technology is the first of multiple initiatives in AT&T’s network enhancement strategy designed to provide customers with an enhanced mobile broadband experience, both today and well into the future. 

Faster 3G speeds are scheduled to become available this year and in 2011 as AT&T combines the new technology with our second initiative to dramatically increase the number of high-speed backhaul connections to cell sites, primarily with fiber-optic connections, adding capacity from cell sites to the AT&T backbone network.

The backhaul upgrades are also a key step in the evolution toward next-generation LTE mobile broadband technology. AT&T is designing its new backhaul deployments to accommodate both faster 3G and future LTE deployments. AT&T currently plans to begin trials of LTE technology this year, and to begin LTE deployment in 2011, matching industry time lines for broader availability of compelling devices and supporting network equipment.

AT&T’s 3G mobile broadband network is based on the 3rd Generation Partnership Project (3GPP) family of technologies that includes GSM and UMTS, the most open and widely used wireless network platforms in the world. AT&T offers 3G data roaming in more than 115 countries, as well as voice calling in more than 220 countries. The technology also provides customers the ability to talk and surf the Internet at the same time.

AT&T is also an industry leader in Wi-Fi with the nation’s largest Wi-Fi network, which complements its wired broadband and wireless 3G networks, offering Wi-Fi connectivity in more than 20,000 U.S. hotspots — including retail stores and restaurants from coast-to-coast. A full list of AT&T Wi-Fi locations is available at www.attwifi.com.

AT&T operates 33 AT&T-owned retail locations in Oklahoma. AT&T’s products and services are also available at a number of other authorized dealers and national retail locations.  

For more information about AT&T’s wireless coverage in Oklahoma, or anywhere in the United States, consumers can go to http://www.wireless.att.com/coverageviewer/. The online tool can measure the quality of coverage based on a street address, intersection, ZIP code or even a landmark.

*AT&T products and services are provided or offered by subsidiaries and affiliates of AT&T Inc. under the AT&T brand and not by AT&T Inc.

Largest Wi-Fi network claim based on non-municipal company and owned and operated hotspots. A Wi-Fi enabled device required. Other restrictions apply. See www.attwifi.com for additional services, details and locations.

About AT&T

AT&T Inc. (NYSE: T) is a premier communications holding company. Its subsidiaries and affiliates – AT&T operating companies – are the providers of AT&T services in the United States and around the world. With a powerful array of network resources that includes the nation’s fastest 3G network, AT&T is a leading provider of wireless, Wi-Fi, high speed Internet and voice services. AT&T offers the best wireless coverage worldwide, offering the most wireless phones that work in the most countries.  It also offers advanced TV services under the AT&T U-verse(SM) and AT&T | DIRECTV(SM) brands. The company’s suite of IP-based business communications services is one of the most advanced in the world. In domestic markets, AT&T’s Yellow Pages and YELLOWPAGES.COM organizations are known for their leadership in directory publishing and advertising sales. In 2009, AT&T again ranked No. 1 in the telecommunications industry on FORTUNE® magazine’s list of the World’s Most Admired Companies.

Additional information about AT&T Inc. and the products and services provided by AT&T subsidiaries and affiliates is available at http://www.att.com. This AT&T news release and other announcements are available at http://www.att.com/newsroom and as part of an RSS feed at www.att.com/rss. Or follow our news on Twitter at @ATTNews. Find us on Facebook at www.Facebook.com/ATT to discover more about our consumer and wireless services or at www.facebook.com/ATTSmallBiz to discover more about our small business services.

Cautionary Language Concerning Forward-Looking Statements

Information set forth in this press release contains financial estimates and other forward-looking statements that are subject to risks and uncertainties, and actual results might differ materially. A discussion of factors that may affect future results is contained in AT&T’s filings with the Securities and Exchange Commission. AT&T disclaims any obligation to update and revise statements contained in this news release based on new information or otherwise.

© 2010 AT&T Intellectual Property. All rights reserved. 3G service not available in all areas. AT&T, the AT&T logo and all other marks contained herein are trademarks of AT&T Intellectual Property and/or AT&T affiliated companies.

SOURCE AT&T Inc.

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As an iPhone user this is good news. AT&T has sold so many iPhone in its exclusive arrangement, that the system has been overloaded. When i am in cities like Houston or San francisco you really notice it. With the coming iPad the system will be strained even more.

ELKHART, Ind. %u2014 Over the next six months, the federal government plans to wind down many of its emergency programs for housing. Then it will become clear if the market can function on its own.

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Dean Slabach, a real estate agent, showing Gina Martin a house near Elkhart, Ind., that was taken over by the government.

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People here are pretty sure the answer will be no.

President Obama has traveled twice to this beleaguered manufacturing city to spotlight the government%u2019s economic stimulus program. The employment picture here has indeed begun to improve over the last nine months.

But Elkhart also symbolizes the failure of federal efforts to turn around the housing slump at the heart of the economic crisis. Housing in this community has become almost entirely dependent on a string of federal support programs, which are nonetheless failing to prevent a fall in prices and a rise in mortgage delinquencies.

More than one in 10 mortgage holders in Elkhart is seriously behind on payments. The median sales price has plunged to the level of a decade ago. Many homeowners owe more than their home is worth, freezing them in place for years. Foreclosures recently hit a record.

To the extent that the real estate market is functioning at all, people here say, it is doing so only because of the emergency programs, which have pushed down interest rates on mortgages and offered buyers a substantial tax credit.

Equally important is an expanded mortgage insurance program run by the Federal Housing Administration, which encourages private lenders to accept borrowers with small down payments. The government takes the risk of default.

A few years ago, only one in 10 buyers in Elkhart used the housing agency program. Now about half do. Across the country, the agency has greatly expanded its reach so that it now insures six million mortgages.

%u201CThere has been all kinds of help for housing. I%u2019m not unappreciative,%u201D said Barb Swartley, president of the Elkhart County Board of Realtors. %u201CBut you can%u2019t turn real estate into a government-sponsored operation forever.%u201D

Many in Washington agree. With worries about the deficit intensifying, the government is eager to start withdrawing some of its support programs.

The first step could happen as early as next month, when the Federal Reserve has said it will end its trillion-dollar program to buy up mortgage securities. That program has driven mortgage interest rates to lows not seen since the 1950s.

Yet it is uncertain whether the government can really pull back without sending housing markets into another tailspin. %u201CA rise in rates would kill us all by itself,%u201D Ms. Swartley said.

The Obama administration has offered few ideas about reforming the housing market. Proposals for the future of Fannie Mae and Freddie Mac, the mortgage holding companies taken over by the government at the height of the crisis, were supposed to be introduced with the president%u2019s budget this month. They were not.

The government programs, however crucial, are distorting the market. The tax credit produced sales last fall, but some lenders here say it has troubling implications.

%u201CPeople are buying to get that tax credit, to get some reserve money. They%u2019re saying, %u2018If something happens, I will have a little bit of money to fall back on,%u2019 %u201D said Denny Davis of Horizon Bank in Elkhart. %u201CThat%u2019s not healthy.%u201D

The programs favor first-time buyers, who have the fewest resources to bring to a deal. Heather Stevens, a 23-year-old nurse here, is closing on a three-bedroom house this week. Since her loan was insured by the Federal Housing Administration, she had to put down only 3.5 percent of the $74,900 purchase price.

%u201CIt was a breeze to get approved,%u201D she said.

The sellers are covering her closing costs, which agents say is often the case here. That meant Ms. Stevens had to come up with only the $2,600 down payment, which still took all her savings.

But the best part is the $7,500 tax credit. She will use that to remodel the kitchen. %u201CIf it wasn%u2019t for the credit, we would have waited to buy,%u201D said Ms. Stevens, who is getting married this year.

Buying houses with no money down was a feature of the latter stages of the housing bubble. It gave prices a final push into the stratosphere. But buyers with no equity were the first to abandon their properties as the market turned south.

With housing prices stagnant, bolstering the market by again letting people buy with hardly any money down is viewed in some quarters as a bad bet.

Neil Barofsky, the special inspector general for the government%u2019s Troubled Asset Relief Program, wrote in his most recent report to Congress that %u201Cthe federal government%u2019s concerted efforts to support%u201D housing prices %u201Crisk reinflating%u201D the bubble.

He noted one difference from the last bubble: taxpayers, rather than banks, are now directly at risk in these new mortgages.

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Sign in to RecommendNext Article in Business (1 of 30) A version of this article appeared in print on February 15, 2010, on page A1 of the New York edition.

The end of the fed buying treasuries worries me. Alos the points made about the tax credit distorting the market has beena concern of mine. Are we setting up people for another round of foreclosures? With almost all suing FHA with a 3.5% downpayment, asking the seller to pay the closing cost, and then taking the tax credit money to buy things for the house since they are usually young buyers without reserves could be a recipe for disaster.

MORTGAGES

U.S. aims to stop backing mortgages

The question is how to withdraw support without undermining the fragile recovery.

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Jim McKinley and his wife were eager to refinance their Placentia home last month because they worried that mortgage interest rates would rise after the Fed ended its mortgage purchases. (Don Bartletti / Los Angeles / February 5, 2010)

Related

Foreclosure activity falls 10% in January

New rule affects homeowners in foreclosure avoidance program

Mortgage applications fall 11% last week

Stories

30-year mortgage interest rates slide back below 5%

By Walter Hamilton and Jim Puzzanghera

February 10, 2010 | 9:20 p.m.

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Reporting from Washington and Los Angeles – Uncle Sam is trying to get out of the business of running the U.S. mortgage market. The trick will be withdrawing support without toppling the nation’s fragile housing recovery in the process.

The government rescued the sector last year with a series of unprecedented measures that staved off a catastrophic collapse, including pumping more than $1 trillion into home loans. But Washington now has effective control of the housing market, either owning or guaranteeing an estimated 9 out of 10 new mortgages.

That has critics worried that the government has asserted too much control over a critical segment of the economy while inflating the federal deficit at what some consider an alarming pace. Pressure is building on the Obama administration to scale back a variety of stimulus efforts.

In comments released Wednesday, Federal Reserve Chairman Ben S. Bernanke outlined a broad strategy for eventually tightening credit. Bernanke had been scheduled to testify on the plan before Congress, but his appearance was postponed by the heavy East Coast snowstorm.

He talked only vaguely about when the central bank might act, sprinkling his remarks with phrases such as “in due course” and “at some point.”

“We have spent considerable effort in developing the tools we will need to remove policy accommodation, and we are fully confident that at the appropriate time we will be able to do so effectively,” he said.

For the housing market, the plan to scale back support carries an inherent risk: that it could stall the very housing recovery that the government has worked so feverishly to jump-start.

“We understand that stimulus can’t continue forever, but at the same time, trying to get the housing market back on track is key to a broader economic recovery,” said Lawrence Yun, chief economist for the National Assn. of Realtors. “This policy is having that intended impact. Policymakers should be cautious about how soon to end it.”

The Fed plans next month to end a $1.25-trillion mortgage-bond-purchase program that has helped keep mortgage interest rates near a record-low 5%. The Fed has been buying virtually all the mortgage bonds churned out by mortgage giants Fannie Mae and Freddie Mac, replacing private investors such as pension funds and mutual funds that have shied away since the sub-prime mortgage crisis.

That exit is expected to push up rates, which could weigh on buyers at a time of high unemployment and anemic consumer spending.

The Mortgage Bankers Assn., an industry trade group, predicts the end of the Fed mortgage-bond program could push rates up by roughly 0.5%. For a $500,000 fixed-rate mortgage, that would increase the monthly payment by $155.

Even a moderate rise could push potential buyers such as Erin Sorensen out of the market.

The 29-year-old museum educator and her husband have been trying for months to find a moderately priced home in West Los Angeles.

“If interest rates go up, there’s really no hope for us in getting a home,” Sorensen said.

Higher rates could force many others to recalculate where to live or what to purchase.

“If those rates jump up to 5.5% or 6%, then [buyers] can’t qualify for what they thought they could qualify for, and they’re not going to be able to buy as much house as they thought they could,” said Frank Drury, a loan originator at Cobalt Financial Corp. in Huntington Beach.

A popular home buyer’s tax credit is scheduled to lapse at the end of April. It provides tax breaks of up to $8,000 to first-time buyers and up to $6,500 for some homeowners who move up to middle-market homes costing up to $800,000. The credits were originally scheduled to lapse in November, but were extended over concerns that home sales would slow without the incentive.

There is already evidence that could occur. In December, home resales skidded almost 17% after buyers sped up their purchases the month before to make sure they qualified for the subsidy before the expiration of the original deadline.

Even with the elimination of the programs, the government would remain deeply involved in housing and would maintain several key pillars that have propped up the market. Those include expanded Federal Housing Administration programs popular in Southern California, as well as enhanced support of Fannie Mae and Freddie Mac.

Still, “it is one of what will ultimately be many steps by the government to start to take back its unprecedented support for the housing and mortgage markets,” said Thomas A. Lawler, founder of research firm Lawler Economic & Housing Consulting. “There will be more.”

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Copyright © 2010, The Los Angeles Times

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Timing is everything, and how the Fed acts on this is crucial to the housing market. One thing is certain, with the fed stopping its purchase of mortgage bonds next month, rates will be going up. If you are looking to make a home purchase in the Oklahoma City area, now is the time to lock your rate. It is conceivable that rates will rise 1% by sometime in 2010.

By Liz Pulliam Weston

MSN Money

The mortgage

world has changed dramatically in a few short years.

The new mortgage rules

At the peak of the real-estate bubble

, mortgage professionals joked that you needed only to be able to fog a mirror to get a loan. These days, even borrowers with good incomes and good credit scores can get turned down.

Much of the change is driven by the higher standards of the companies that buy mortgage loans

, including Fannie Mae, Freddie Mac and various large banks.

Here’s what you need to look out for if you’re trying to land a mortgage, whether you’re buying a home or refinancing:

1. The house needs too much work.

A lot of properties on the market these days are foreclosures owned by banks, and many aren’t in great repair. (See “Should you buy a foreclosure?“) If a house is in really bad shape, it can be tough, if not impossible, to persuade another lender to give you the money to purchase it.

Broken windows, defective appliances, roof leaks and serious water damage can all cause a lender to bail, said Dick Lepre, a senior loan officer with RPM Mortgage.

“A lot of deals just fall apart” after appraisers examine the homes, Lepre said. “Some sellers have gotten shot down so many times because the buyers couldn’t get a mortgage that some homes are put on the market as ‘all cash.’” In essence, the sellers won’t consider buyers who need mortgages to purchase their homes.

In the past, Lepre said, a lender might have been more willing to set aside some of the cash from a deal to pay for necessary repairs. Today, lenders are far more likely to simply refuse to do deals.

Bottom line: If it’s a real fixer-upper, you may need to pay cash.

2. The appraisal came up short.

Occasionally during the bubble an appraiser would decide a home was worth less than the price a buyer and seller had agreed upon. But that was relatively rare. Critics accused appraisers of colluding with lenders to “hit the number” — deliver the values needed for loans to be approved. Some appraisers acknowledged the pressure, saying banks would turn to their competitors if they didn’t hit the number.

These days, the situation is drastically different. New rules hold appraisers to higher standards and sharply limit communication between appraisers and lenders. So the appraisal on the home you want to buy may fall short of the agreed-upon selling price.

More from MSN

• Your 1st home? Start saving for repairs
• Deadline looms for homebuyer credit
• Ready to move up? It may pay to wait
• 3 bad reasons to buy a home
• Today’s top 5 homebuying blunders

Even if the first appraisal goes well, Lepre said, a second evaluation — known as the review appraisal and now ordered by most investors that buy home loans — may not.

Bottom line: You may be able to nudge an appraisal a bit by showing there are better “comparable sales” available than the ones the appraiser used. In general, though, appraisers are much harder to influence. You may need to reopen negotiations with the seller or come up with a bigger down payment to make a deal work — or pay down your mortgage in order to refinance.

3. You have too much debt.

Lenders look at how much of your income will go toward housing expenses (mortgage, property taxes and insurance) as well as how much you spend on other debt payments.

The total amount of your income that can be eaten up by these expenses can vary by the lender and even by the day. Over a matter of months, one major mortgage buyer

dropped the ceiling of total debt from 65% to 55% and then to 50% of gross income, said Matt Hackett, the underwriting manager for New York lender Equity Now. Some have lower limits.

The mortgage industry still isn’t as conservative about debt as it probably should be, said Michael Moskowitz, Equity Now’s founder and president. Moskowitz noted that people can still get approved for loans that don’t leave them enough breathing room for other costs, such as adequately maintaining the house or saving for other goals, including retirement.

Bottom line: If your projected housing-and-debt ratio exceeds 40% of your income, you should think twice about buying a home — not because you won’t get approved (you might) but simply because you’re carrying too much debt. At the very least, you should pay off all credit cards and other toxic debt. Such debt indicates you’re already living beyond your means, a situation that’s likely to worsen if you buy a home.

4. You’re self-employed and your income has declined.

To get a mortgage, you typically need to submit the past two years’ tax returns. If your 2008 income was lower than your 2007 income and you’re a W-2 wage earner, lenders will simply use the lower figure to decide how big a mortgage you can get.

The industry is far more leery of declining income if you’re self-employed, Moskowitz said. Some lenders will use the 2008 figure, but others won’t make the loan at all because they’re worried your income will drop further and you’ll default.

Bottom line: If you’re self-employed and your income has dropped, talk to your mortgage professional about how that might affect your loan.

Video: The mortgage that pays you

5. You recently started being paid on commission.

Companies eager to cut costs have been switching some of their staffs from salaries or hourly wages to commissions. That can wreak havoc with your mortgage application because lenders typically won’t count commission income unless you’ve been earning commissions for at least two years.

Bottom line: If your company switched you to commissions before the end of 2008, you may have to wait to get a loan or use a spouse’s income to qualify.

6. There’s a problem with your tax returns.

Lenders don’t accept your copies of your tax returns as the final word about what you earned. These days they order transcripts of the returns you filed with the Internal Revenue Service and compare those with what you had submitted.

Your loan will get tossed if you exaggerated your income, of course. But other problems include:

• Unreimbursed employee expenses. This snares a surprising number of borrowers, Hackett said. Any amount taxpayers deduct for these expenses has to be deducted from the income that can be used to qualify them for a loan. “We’ve had some loans that blew up because of this,” Hackett said. “One guy had $49,900 of income but he wrote off $12,100 in (unreimbursed) auto expenses.” Subtracting that amount from his pay left him too little income to qualify for the loan he wanted.
• Second-home expenses. Even if you own the property free and clear, the taxes and insurance you pay on it will affect your debt ratio. Borrowers may not list the property on their initial application, especially if there’s no mortgage involved, but the tax transcript will pick up any of the second-home costs they deducted.
• A too-small payment for estimated taxes. If you’re self-employed and pay estimated taxes, you might try to conserve cash by making a smaller-than-usual tax payment. That could be a mistake, since a lender might decide the smaller payment is a sign your income is declining.
• No transcript. It can take up to five weeks for a transcript to be available after a return is filed, Hackett said. So if you got an extension to file your return and didn’t do so until the Oct. 15 extended deadline, your transcript won’t be available for several more weeks, which could endanger your deal.

Bottom line: Review your tax returns with your mortgage lender or broker when you apply to see whether there are any red flags.

Continued: You can’t get private mortgage insurance

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Sometimes msn.com real setate advice can be very wrong, but on this one Liz Weston is accurate about what can kill a home loan. For instance, if you are looking for a short sale to buy because it is a good deal, if more than 10% of the home’s value is needed to correct defects, you can’t get a loan. Debt ratios are being closely monitored so your total bills that count aginst your qualifying can stop you. Seek a good Realtor to be your consultant, and have that Realtor hook you up with a mortgage company that will shot straight with you before you put out any money that you won’t get back.

Distressed Property Institute Breaks Ground on Habitat for Humanity Build

Short sale education organization brings dream of homeownership to an Austin family with Austin Habitat for Humanity’s first home of 2010.

Austin, Texas (Vocus/PRWEB ) January 25, 2010 — The Distressed Property Institute, LLC broke ground on construction today for its first home with Austin Habitat for Humanity in the Meadow Lake community of Austin, Texas. The home, the first build of 2010 for Austin Habitat, will provide a fresh start for Austin resident Jaylandra Fitzgerald and her family.

“Our membership of real estate agents across the nation is helping homeowners regain their stability, and providing hope when faced with the possibility of foreclosure. We want to continue this mission and have an immediate impact on a member of our community,” Alex Charfen, Institute co-founder and CEO, said.

Our membership of real estate agents across the nation is helping homeowners regain their stability, and providing hope when faced with the possibility of foreclosure. We want to continue this mission and have an immediate impact on a member of our community

Homeownership is a light in the dark

I look forward to the day that I can have a place I can call my own.

I work five days a week and still enjoy getting up on Saturday mornings to go to the build site

The Institute, which confers the CDPE® designation, is the nation’s leading short sale training organization, having educated more than 18,000 real estate professionals to assist distressed homeowners toward quick and successful solutions to foreclosure.

After struggling through tough financial times during the recent economic crisis, Fitzgerald resolved to regain the security and stability that homeownership brings.

“Homeownership is a light in the dark,” she said. “I look forward to the day that I can have a place I can call my own.”

Being a part of the Habitat Home Buyer Program, Fitzgerald has worked alongside volunteers and future neighbors to build her home. This determination has lead to a contribution of 400 hours of “sweat equity” on other Habitat builds.

“I work five days a week and still enjoy getting up on Saturday mornings to go to the build site,” Fitzgerald said.

Habitat’s sweat-equity requirement is an exciting learning experience in which families, neighbors and friends work to build other peoples’ homes as well as their own. Fitzgerald is also attending 24 Homebuyer Education Classes to gain proper instruction on budgeting, and financial resources for her new home.

If you are a CDPE, or would like to volunteer and participate, the Institute’s Austin Habitat build will continue every following Saturday for ten weeks. For more information, or to coordinate your participation, contact CDPE Member Services at 800-482-0335.

About Austin Habitat for Humanity
At Austin Habitat, we believe everyone deserves a simple, decent and affordable place to live. It changes everything. We know that together we can end the cycle of poverty. Together we can change lives.

We have served the Austin community since 1985, building more than 235 new affordable homes with hardworking low-income families. Homes are built with volunteer labor and community funding, and sold to our homebuyers with zero-interest mortgage loans. Each homebuyer participates in housing counseling programs and contributes approximately 400 hours of “sweat-equity.”

You can change lives by giving at AustinHabitat.org.

About the Distressed Property Institute, LLC
The Distressed Property Institute trains real estate professionals to engage with and assist homeowners facing hardships. The Institute has developed a curriculum to provide the tools and knowledge to handle distressed properties, including short sales, deeds-in-lieu, mortgage modifications, forbearance, refinances, reinstatements and, if that fails, how to help homeowners through the foreclosure process. After completing a comprehensive on-site or online course, graduates are awarded the Certified Distressed Property Expert® Designation.

About the CDPE Designation
The CDPE Designation provides real estate industry professionals with detailed information on how to engage with and assist homeowners in distress. The CDPE designation has been endorsed by major U.S. brokerages and industry icons, including: Brian Buffini, founder of Buffini & Company; Dave Liniger, chairman and co-founder of RE/MAX; Howard Brinton, founder of STAR POWER® Systems; and Joe Stumpf, founder and national spokesman for By Referral Only®.

For more information about The Distressed Property Institute and the CDPE Designation, visit www.cdpe.com.

Contact: Austin Habitat for Humanity
Michael Kellerman
512-472-8788 x408

Contact: The Distressed Property Institute, LLC
Adam Pedowitz
512.501.2588

# # #

I am proud to have been a ground floor member of the certified Distressed Property Institute, and the CDPE designation. It is great that this program which help Realtors become more expert at saving homeowners from foreclosure has started a program to give back to the community with Habitat for Humanity. If you are in a distressed situation with your home you can go to our website, www.avoidforeclosureoklahoma.com for answers.

Enjoy the video about how Oklahoma City gets better every year. Makes me glad I stuck around. let’ not stop now.

By Marilyn Lewis

The Federal Housing Administration

changed the rules for home borrowers Wednesday morning.

Along with tightening requirements for buyers, the FHA is cracking down on unscrupulous lenders who Commissioner David Stevens implies are responsible for the agency’s growing defaults and shrinking reserves. The agency — which is growing to become the lender of choice for buyers without sterling credit or 20% down — has written too many risky loans and now is retrenching.

“Not everybody should own a home,” Stevens told reporters on a conference call Wednesday.

• Ready to tap your home equity?

The FHA is a government insurance company that backs mortgages and refinance loans

for lenders that follow its guidelines. Last year the FHA insured 1.9 million loans, about 30% of the overall market, up from 1.1 million in 2008.

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The New York Times reported that in late December, the FHA was insuring 5.8 million single-family homes – a total of $750 billion in loans. This is more than half a million of which were “seriously delinquent and heading toward foreclosure.”

The FHA’s changes were made after an actuarial study took apart the agency’s loan books to see where the most money is being lost.

The biggest change: Starting in spring — no date was given — borrowers will have to pay more upfront to get a loan, at least for a while. The FHA is raising its upfront mortgage insurance

premium from 1.75% to 2.25% of the loan amount. (Homebuyers pay for FHA insurance in two ways: through a one-time upfront premium and through monthly insurance payments.)

Today, on a $250,000 loan, you’d pay $4,375, or 1.75%, at closing. With the increase, your upfront payment would go to $5,625 — an increase of $1,250.

At the same time, the FHA will ask Congress to raise the lid on the amount it can charge for annual premiums. Right now, the premiums can’t be more than 0.55%, or $1,375 a year, broken into monthly installments, for a $250,000 loan.

The right loan for you

Ultimately, the idea is to raise the cost of yearly payments and drop the upfront costs back down. But for the moment, the upfront amount is going to grow.

Two other big changes, starting sometime in early summer, are coming as well:

• Homebuyers will need minimum 580 FICO scores to get loans with only 3.5% down. Borrowers with lower scores will need minimum down payments of 10%. Stevens, the FHA commissioner, said at a news conference Wednesday morning that the FHA’s numbers show most defaults are by borrowers with credit scores of 580 or below.
• Seller “concessions” will be reduced from 6% to 3%. Sellers who really want a sale to go through aren’t allowed to help buyers with their down payments. But they can, in effect, reduce a home’s price by kicking in money to cover closing costs and upgrades to the home. The practice lets sellers keep their prices higher while allowing buyers to finance expenses like closing costs and home improvements. “The current level exposes the FHA to excess risk by creating incentives to inflate appraised value,” said Stevens.

Stevens repeatedly stressed that he’s going after “outlier” lenders largely responsible for the FHA’s losses. While “the vast majority of lenders” participate within FHA guidelines, he’s focused on identifying and eliminating “rogue” lenders whose laxness has driven the agency’s losses:

• Stevens is planning more-intense monitoring of lenders, including publicly reporting lender performance rankings on the FHA Web site.
• FHA wants congressional approval to clamp down even further, holding lenders liable if they underwrite loans violating FHA policies and standards. “This would require all approved mortgagees to assume liability for all of the loans that they originate and underwrite,” Stevens said.
• The Department of Housing and Urban Development

  , the FHA’s parent agency, will also ask Congress for authority to drop lenders from FHA programs when they violate FHA standards at regional offices. Right now, lenders can break FHA rules in one region and then, when they’re shut out locally, move operations to another region.

The changes are necessary, Stevens said, because loan defaults have created losses and shrunk the FHA’s reserves below required levels. The problem would right itself by 2013 without intervention, he said, but the proposed changes should bring the reserves back into line in the next fiscal year.

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The rise in premiums happened in the 1990’s when the FHA Fund was perilously low. Once it was built back up it was lowered back down. I would add that 580 is a low credit score for buying a home. The 10% down is risk premium because to have a below 580 score means quite a few late payments. Even with the rise in premiums, the 3.5% down payment is still very attractive especially in the Oklahoma City real estate market where we have highly affordable pricing.