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Waccabuc NY Real Estate | Mortgage delinquencies spike in September, report says

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While the nation’s foreclosure inventory continues to shrink, new delinquencies spiked sharply during September 2012, new data released Monday afternoon showed.

According to Lender Processing Services ($28.51 0%), the total U.S. mortgage delinquency rate — loans 30-plus days past due, but not in foreclosure — surged upward by 7.72%, reaching 7.4% in September versus the 6.87% reported one month earlier.

Despite the spike, September 2012 delinquency totals still remain below levels seen last year, LPS said.

While new delinquencies spiked in September, the volume of properties in foreclosure continues to shrink as banks and other financial instutions continue to work through a backlog of distressed real estate that remains well above historical levels of half of a percent or so, according to most industry experts.

LPS said that the nation’s foreclosure pre-sale inventory rate fell to 3.87% during September, down 4.05% from one month earlier and down 7.37% less than one year ago.

Florida, Mississippi, New Jersey, Nevada, and Louisiana represented the states with the highest percentage of noncurrent loans, according to the data report; Lousiana replaced New York, which had been in the top five for most of this year.

Despite the drop in foreclosure inventory, the surge in new delinquencies has led to something not seen this year until now: an increase in the amount of distressed properties, defined as properties 30 or more days delinquent or in foreclosure.

According to LPS, there were 5.45 million properties in distress during August 2012; for September, thanks to increasing delinquencies, that number now equals 5.64 million.

via housingwire.com

10 Strategies To Increase Your Credit Score In 24 Hours | Waccabuc Realtor

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When you are in a hurry to increase your credit score there is 10 things that you can do with in 24 hours that help immensly. Here are the 10 things to increase your score:

1. Order your credit reports online for each of the top three credit reporting agencies individually. Even though it may be cheaper to order a three in one report offered by one of the Agencies, ordering individual credit reports will grant you the access to initiate a dispute online with each agency. You can’t improve your score in 24 hours unless you know what it is! Knowing where to start is important.

2. Call your credit card companies and request to increase your credit lines. Increasing credit lines will improve your outstanding debt to-available-credit ratio amounts on your revolving accounts, and can improve your credit by as much as 60 points.

3. Rearrange your debt so that every one of your credit cards have the lowest possible outstanding debt-to-available-credit ratio. A ratio of 25%-35% is ideal.

4. If you have the ability, pay down the cards until that ratio is recognized on your credit report.

5. Borrow money to pay down your debts referenced on your credit reports from a lender that doesn’t report, such as friends and family. Unreported debts will assist you to decrease those debt to available credit ratios and boost your score. Your private lenders may even want lesser interest than you are paying on the cards! While this business deal doesn’t appear on your credit report, it’s still debt, so use it wisely. You don’t want horrible Thanksgiving dinners after failure to pay on a loan made by a family relative.

6. If you have freshly paid down or paid off debts and they don’t show corrected on the report, fax that information to the credit agencies. Providing them with the verification of payoff is much faster then initiating a dispute of the account information. In many cases, the agency won’t verify the payoff with the lender, and accept your proof as correct.

7. Begin your dispute approach online with each service. The online dispute will suspend the negative derogatory items from your credit report for the short term, increasing your score. When the dispute is resolved your score will change accordingly, but for the period in-between you get a momentary reprieve from the effects of the negative derogatory information.

8. If you must choose one credit score to work on, spotlight your focus on the middle score. For most major purchases such as real estate or a vehicle, the lender will pull all three credit scores and use the middle score, (all three scores in one is called the tri-merge score) so this is the one that matters the most. If you improve your middle score over your highest score, the formerly top score is the one that now matters most.

9. Have a close friend or family member with a solid credit history add you to their card. You don’t even need to have the possession of an actual card, but by adding you to the account, you get the benefit of their long credit history. This doesn’t hurt their credit history at all. A Credit report is a compilation of accounts with your social security number attached to them. When your social security number was added to their account, you agreed to be responsible for it, and their years of good credit history now show up on your credit report. The individual person who lent you their excellent credit didn’t add their social security number to any of your accounts with the negative or derogatory history, so there is no way for the bad information to appear on their credit report.

10. If you have recent collection account reporting to your credit file that haven’t been paid? If so call the collection agency and ask, “do you delete?” About half of all collection agencies will take away the item from your credit report if you pay it in full, or a generous portion of the debt. Sometimes the collection agency can remove the debt from the credit bureaus instantaneously.

There are other things that can help you improve your credit score that will take much longer to implement. I think this list will suffice for now because these things can be done in 24 hours.

via articles.submityourarticle.com

‘Obamacare’ individual mandate has no teeth | Waccabuc NY Real Estate

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If, like most real estate professionals, you’re self-employed, you have to obtain your own health insurance unless you can obtain coverage through a spouse. Lots of self-employed people have no health coverage because they can’t afford it.

Starting in 2014, these people will run up against the most controversial portion of the Patient Protection and Affordable Care Act (“Obamacare”) — the individual health insurance mandate. This is the requirement that most legal residents of the United States obtain at least minimal health insurance coverage by 2014.

The word “mandate” sounds pretty serious. But what will actually happen if you don’t obtain health insurance by 2014? Surprisingly little.

The health care law says that individuals who can afford health insurance coverage and are not otherwise exempt must purchase minimum essential health coverage or pay a penalty to the IRS with their tax returns. The assessment of this penalty is the only consequence of not obeying the health insurance “mandate.”

How much is the penalty?

The exact amount of the tax penalty is based on household income above the level at which an uninsured individual is required to file a tax return — currently $9,500 per person and $19,000 per couple. This penalty is scheduled to be phased in over the next several years as follows:

  • for 2014, the penalty is the greater of $95 or 1 percent of income
  • for 2015, the greater of $325 or 2 percent of income
  • for 2016, the greater of $695 or 2.5 percent of income, and
  • the $695 amount is indexed for inflation after 2016.

The penalty for children is half the amount for adults, and an overall cap will apply to family payments. This cap will be three times the amount of the per-person penalty, regardless of how many people are in the family. Thus, the cap is $285 in 2014 but rises to $2,085 in 2016, after which point it is indexed to inflation. Moreover, the total penalty can never be more than the cost of a minimal “bronze” heath insurance plan that can be purchased through a state health insurance exchange. The CBO estimates that these policies will cost $4,500-$5,000 per person and $12,000-$12,500 per family in 2016, with the costs rising thereafter.

All in all, for most people the penalty will be less than the cost of obtaining health insurance. Many people may choose to wait until they get sick to purchase health insurance. This is something they will be able to do because “Obamacare” does not allow health insurers to refuse to insure people with pre-existing conditions.

In addition, the penalty applies only to taxpayers who can afford insurance but do not purchase it. The Congressional Budget Offices says that of the 30 million non-elderly Americans it estimates will not have health insurance in 2016, only about 6 million will be subject to the tax. The remainder will be exempt because their income is too low or they qualify for another exemption.

How will the IRS collect?

Taxpayers subject to the penalty are supposed to report the amount due on their tax returns and pay it along with their income taxes. What happens if they don’t? Not nearly as much as when they don’t pay their regular taxes.

The law greatly limits how the IRS can collect the penalty. It cannot use liens or levies to collect it, and taxpayers are not subject to criminal prosecution or any additional penalty if they don’t pay. Moreover, the IRS says that its revenue agents will not be involved in enforcing the penalty — that is, they won’t ask you about it during an audit. All enforcement will be done through automatic assessments and computer-generated correspondence.

The only power the IRS will have to collect the penalty is to withhold it from an uninsured taxpayer’s tax refund. Currently, most taxpayers get refunds because they have too much tax withheld during the year. This year 77 percent of taxpayers received an average refund of $2,707.

However, self-employed taxpayers have no tax withheld from their pay. Instead, they pay estimated taxes to the IRS four times a year. Self-employed people can easily avoid qualifying for a tax refund by making sure they don’t pay too much in estimated tax. If you have no refund, the IRS will have no way of collecting the penalty.

As a result of all this, some experts predict that the IRS will be unable to effectively enforce the penalty tax. Only time will tell.

via inman.com

Mixed news for homeowners facing foreclosure | Waccabuc NY Homes

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So-called short-sales of homes are rising, according to HOPE NOW, a private-sector alliance of mortgage investors, servicers, insurers and non-profit counselors.

The number of short-sales — when banks accept less money for a home than is currently owed on the mortgage —  crept up in August from the previous month. In theory, that’s good news because an uptick in short-sales should fewer homes going into foreclosure.

But that’s not the case yet. August foreclosure sales increased 12 percent from July, and foreclosure starts grew 14 percent. Faith Schwartz, executive director of HOPE NOW, attributed the rise to lenders clearing their foreclosure backlog, noting that many of the foreclosures have been in process for at least a year.

“The incentives for short-sales continue to increase,” she said. “The $25 billion foreclosure settlement, and the fact that many servicers aren’t used to holding on to foreclosures or [real-estate owned properties] means incentive is increasing.”

The goal is to resolve foreclosures before homes end up sitting abandoned and blighting the surrounding community, Schwartz added.

The data also suggest that more homeowners are making mortgage payments on time. The number of homeowners delinquent 60 days or more on their mortgage fell 2 percent in August, down to 2.42 million. In July, 2.47 million homeowners were seriously delinquent on their mortgages. Fewer borrowers are falling behind at least 60 days on their mortgages, and there are fewer current (30 day) defaults.

“While this is almost 40 percent lower than the all-time high of 4 million homeowners seriously past-due on their mortgage, we cannot forget there are many more who remain at risk of foreclosure,” Schwartz said, noting that short-sales are an integral part of helping homeowners. Yet many borrowers don’t know a short-sale is an option.

While short-sales, foreclosure starts and foreclosure sales rose in August, the number of homeowners who got mortgage relief in the form of loan modifications fell. Roughly 76,000 homeowners got permanent loan modifications under both both lender programs and the federal government’s Home Affordable Modification Program (HAMP). That’s down from July, when more than 82,000 homeowners received modifications from both HAMP and private companies.

Most loan mods start as HAMP modifications. If the borrower does not meet HAMP standards, they may be considered for alternative, proprietary modifications.

In total, 5.75 million homeowners have received permanent loan modifications since 2007, with more than 543,000 of those modifications occurring since January. Most homeowners who have had loans modified since the beginning of the year have done so through a lender or loan servicer.

Only 143,420 homeowners have received loan mods this year under HAMP which has very rigid documentation and debt-to-income standards. Since 2007, most of the loan mods — nearly 4.7 million — have been completed via proprietary loan modifications. Comparatively, the government’s HAMP program has modified roughly 1.1 million loans since it began reporting in 2009.

via cbsnews.com

Second mortgages rebound as banks’ confidence in housing market seems to grow | Waccabuc NY Real Estate

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If you have a pressing need to raise some cash, here’s some good news: Rising home values are encouraging lenders to revive a product that imploded during the housing bust years: second mortgages.

Researchers at Equifax, one of the three national credit bureaus, say total outstanding balances of residential second mortgages at banks rose in the latest month for the first time in nearly five years. Though the jump was relatively small — about three-tenths of 1 percent — analysts say any increase in the amount of second mortgages is a bellwether event, indicating that major lenders are showing growing confidence that the real estate market has finally made the turn to recovery. The Federal Reserve recently reported that American homeowners’ equity stakes rose by $406 billion during the second quarter — a 5.9 percent increase from the previous quarter — to
­$7.28 trillion, the highest that figure has been since 2008.

Second loans, which include fixed-payment mortgages as well as floating-rate home equity lines of credit, put the bank in second position in the event of a foreclosure. Say you have a house worth $250,000 with a $200,000 first mortgage and a $20,000 second mortgage. The proceeds of any foreclosure would initially be used to pay off the lender in the first position. Any remainder would pay off the holder of the second lien. Because lenders assume a “junior” position when they make a second loan, these mortgages are generally considered to be higher risk and carry higher interest rates and fees than a first.

Second loans can be used for a variety of purposes. Paying for kids’ college tuition, injecting capital into a small business, financing a home improvement and paying off credit-card debts are among the most popular.

Equifax, which receives information from virtually every major bank and mortgage lender, compiles data on a variety of loan products. In its latest National Consumer Credit Trends study, it found that home equity lending appears to be rebounding fastest in New Mexico and California, where outstanding balances jumped by 2.3 percent, along with Nevada (2.1 percent), Colorado (2 percent) and Florida (1.6 percent).

In an interview, Equifax chief economist Amy Crews Cutts said increases in equity lending “are really a healthy sign” for the economy overall because in the years following the housing bust, many banks had little confidence that home prices were stable enough to lend against in second position.

Now when Cutts speaks with bankers, she finds them “pretty willing to do [second] loans when their customers need them — they’re much more open” than they’ve been in years. Though underwriting standards are tougher than they once were, banks are lending again, and they are experiencing smaller losses. In the most recent study, Cutts said, second-mortgage write-off rates fell to just
2.7 percent, the lowest they’ve been since February of 2008.

Matt Potere, home equity executive for Bank of America, called second loans “an important element” in his company’s “customer-relationship strategy” and said that “we expect growth to occur as market conditions continue to improve.” James Chessen, chief economist for the American Bankers Association, agrees that “it’s good news that finally there’s some upward movement” in home equity lending, but he isn’t yet convinced that it’s a long-term trend, in large part because of slow job growth and uncertainty about the economy. Also, notwithstanding Equifax’s finding that write-offs are down, Chessen’s own surveys indicate that delinquencies on home equity loans rose from 4 percent to 4.09 percent in the latest quarter.

Rate quotes and terms on home equity loans appear to reflect some of that uncertainty. A quick look at quotes on Oct. 5 at Bankrate.com showed that depending on the way banks perceive local markets, rates can vary significantly. For example, in suburban Maryland, Bank of America offers a $75,000 second mortgage at 6.34 percent, assuming the borrowers have FICO credit scores in the 700 to 850 range — good to excellent — and a total loan-to-value ratio no higher than 80 percent. In the Los Angeles County city of Hawthorne, by contrast, a loan of the same size with the same criteria comes with a 7.24 percent rate.

So be aware that while lenders are more willing to extend home equity credit, rates can vary — sometimes from as low as the mid-4 percent range to the mid-8s — depending upon the location of the house, loan size and your credit score.

via washingtonpost.com