Caught in a mortgage mess? Contact your lender
by Chad Graham - Apr. 26, 2009 12:00 AMThe Arizona Republic
Hiding in plain sight is one of the worst actions a homeowner who is facing foreclosure can take.
You won't save your house - or credit - by barricading the door and ignoring phone calls from bill collectors.
It is completely understandable that you want to isolate yourself. An unbelievable amount of shame, fear and guilt can wash over someone who is behind on payments or who is about to lose a home. It's not just you. Pre-foreclosures in metropolitan Phoenix topped 10,000 in March; a new record.
To prevent those becoming a wave of foreclosures, lenders are working with a lot more homeowners to fix or modify their loans. Last month, the number of foreclosures fell for the first time in a year and the number of foreclosures canceled by lenders rose.
That's good news. Here are 10 steps to try and save your home, suggested by Arizona Republic real estate reporter Catherine Reagor:
1. Don't wait. Call your lender immediately. New government-backed programs can help fix your loan so you can afford the payment.
2. Organize important papers. Locate such items as lender information, annual tax returns, paycheck stubs and monthly utility bills. Any organization providing help will ask for this information.
3. Click on http://www.makinghomeaffordable.com/. It's a federal Web site that determines if you can qualify for new programs, just by answering a few questions. Or, call 888-995-HOPE(4673).
4. Call 877-448-1211. It's the Arizona Foreclosure Prevention Hotline. It offers bilingual counselors.
5. Click on http://www.hud.gov/. That's a good way to find a counselor approved by the U.S. Department of Housing and Urban Development, or HUD. Click on the "foreclosure avoidance counseling" link and then choose Arizona.
6. Contact your lender again and again. The people who answer the phone for your lender are used to collecting on past debt. But the government is encouraging them to find a solution with struggling homeowners. Be nice to them. Don't get stressed and lose your temper. Have the names and dates of people you've spoken to previously. To be sure, this is a time-consuming, exhausting process, but it's benefiting an increasing number of homeowners. Lenders want to avoid getting stuck owning property.
7. Scan for scams. Mortgage fraud has risen 400 percent nationally. Housing advocates advise people not to pay big up-front fees to the growing number of groups offering help to struggling homeowners. Remember, HUD counselors provide help for free.
8. Slash your expenses. It'll show your lender you're serious about refinancing. Get a roommate to help meet your monthly mortgage payment. Cut up your credit cards. Have a garage sale. Check out how much you can save by cutting down on extras at http://www.finishrich.com/. Click the "learn" tab and then the "Latte Factor Calculator."
9. Consider a short sale. You won't make any money, but you won't have a foreclosure ding on your credit either. Lenders are being encouraged to consider more short sales. Or maybe you should consider filing for Chapter 13 bankruptcy, according to Bankrate.com. "Doing so temporarily halts the foreclosure process and can force the mortgage lender to accept a more borrower-friendly repayment plan, such as one that grants five years to repay the amount in arrears rather than one or two," according to the site.
10. Know when to fold 'em. Not everyone is going to be able save their home and not everyone wants a bankruptcy on their record. Be mentally prepared to turn over the keys to your lender.
Yes, it's a heartbreaking time, but it can mean have far less stress in your life. This is a good time to make a fresh start, while learning valuable lessons for the future.
Sunday, April 26, 2009
Sunday, April 19, 2009
5 Things You Need to Know Before Buying Renters' Insurance
5 Things You Need to Know Before Buying Renters’ Insurance
By Mary Umberger
RISMEDIA, April 18, 2009-(MCT)-It is, unfortunately, an all-too-familiar news image: An apartment building smolders in the hours after a major fire. The traumatized residents have gone off to put their lives back in order. In all likelihood, they have lost most of their possessions.
Some of those tenants will find financial support for their losses through their renters’ insurance policies. However, a majority of renters probably don’t have coverage, either because they believe they can’t afford it or because they don’t even know such a thing exists, according to a 2007 survey by Apartments.com.
“The average renters’ insurance in the U.S. is about $200 annually,” according to Loretta Worters, a spokeswoman for the Insurance Information Institute, a trade group in New York. “A lot of people don’t think about purchasing it because they think their landlord is responsible, but in reality, it’s the tenant that’s responsible for their own belongings,” Worters said.
And the value of those belongings can add up, even in the households of many young adults just starting out on their own: Computers, stereos, plasma-screen televisions, etc., are part-and-parcel of many an urban lifestyle these days.
Insurers say beyond personal property, renters may need to consider another possession - protection from liability lawsuits in this litigious age.
Here are five things renters should know about insurance:
1. What’s the real cost? That $200 annual cost is a generalization, though it’s generally regarded as a reliable one. “It depends on where you live and how much property you’re insuring,” said Janet Patrick, a spokeswoman for the Illinois Insurance Association. “It also depends on the size of the deductible and other coverage.”
Patrick said a $250 deductible (an amount the insured party pays out-of-pocket before coverage kicks in on a claim) is probably most commonly found in the standard wording of renters’ policies. “But you should take the highest deductible you can afford, maybe a $500 one, because it’s going to lower your premium cost,” she said.
2. Two forms of coverage. Policies usually cover property in one of two ways, providing either the “actual cash value” or the “replacement value” of the household objects in paying out a claim.
Actual cash value policies pay what a possession is deemed to be worth at the time of the loss. In other words, if, your laptop cost you $800 a few years ago, its value would be less today, an amount the insurer would calculate in determining how much to pay you for the loss.
Replacement-cost coverage is just what it sounds like - it pays out the equivalent cost if you were to go out and get a similar laptop today. Such coverage, because of the higher payout, carries a higher premium.
3. Beyond property. Policies cover more than lost property. For example, they also provide payment for living expenses if you’re displaced from the unit for covered events, such as fires.
Another major area of coverage is liability. “If somebody comes into your apartment or rented home and trips on a rug, that’s still a liability issue,” Patrick said.
Generally, policies include up to $100,000 liability coverage, according to Worters. “However, experts recommend that you purchase at least $300,000 of protection,” she said.
4. Talking about catastrophes. The list of catastrophes and circumstances that are likely to be covered by renters’ insurance is a long one, ranging from “typical” events such as fire, vandalism or theft to things such as damage from frozen pipes or even riots. What often isn’t included is damage from flooding, and insurance experts suggest if you live in a flood-prone area, you’ll need separate coverage.
5. Other things affecting costs. There may be ways to keep your premium costs down. Or drive them up.
Some policies, for example, may give you a discount if your building has a security system - especially if you have it connected to a central station alarm. And then, there’s a lifestyle consideration that might make your coverage pricier - that is, having a dog. “Some companies are concerned because of the additional liability of certain dogs that are aggressive in nature,” Patrick said.
Additional dog-related insurance costs and whether you get coverage or not depend on the company, she said. “Some won’t write a policy if you have a certain type of dog; others will take a look at the risk and evaluate it differently.”
By Mary Umberger
RISMEDIA, April 18, 2009-(MCT)-It is, unfortunately, an all-too-familiar news image: An apartment building smolders in the hours after a major fire. The traumatized residents have gone off to put their lives back in order. In all likelihood, they have lost most of their possessions.
Some of those tenants will find financial support for their losses through their renters’ insurance policies. However, a majority of renters probably don’t have coverage, either because they believe they can’t afford it or because they don’t even know such a thing exists, according to a 2007 survey by Apartments.com.
“The average renters’ insurance in the U.S. is about $200 annually,” according to Loretta Worters, a spokeswoman for the Insurance Information Institute, a trade group in New York. “A lot of people don’t think about purchasing it because they think their landlord is responsible, but in reality, it’s the tenant that’s responsible for their own belongings,” Worters said.
And the value of those belongings can add up, even in the households of many young adults just starting out on their own: Computers, stereos, plasma-screen televisions, etc., are part-and-parcel of many an urban lifestyle these days.
Insurers say beyond personal property, renters may need to consider another possession - protection from liability lawsuits in this litigious age.
Here are five things renters should know about insurance:
1. What’s the real cost? That $200 annual cost is a generalization, though it’s generally regarded as a reliable one. “It depends on where you live and how much property you’re insuring,” said Janet Patrick, a spokeswoman for the Illinois Insurance Association. “It also depends on the size of the deductible and other coverage.”
Patrick said a $250 deductible (an amount the insured party pays out-of-pocket before coverage kicks in on a claim) is probably most commonly found in the standard wording of renters’ policies. “But you should take the highest deductible you can afford, maybe a $500 one, because it’s going to lower your premium cost,” she said.
2. Two forms of coverage. Policies usually cover property in one of two ways, providing either the “actual cash value” or the “replacement value” of the household objects in paying out a claim.
Actual cash value policies pay what a possession is deemed to be worth at the time of the loss. In other words, if, your laptop cost you $800 a few years ago, its value would be less today, an amount the insurer would calculate in determining how much to pay you for the loss.
Replacement-cost coverage is just what it sounds like - it pays out the equivalent cost if you were to go out and get a similar laptop today. Such coverage, because of the higher payout, carries a higher premium.
3. Beyond property. Policies cover more than lost property. For example, they also provide payment for living expenses if you’re displaced from the unit for covered events, such as fires.
Another major area of coverage is liability. “If somebody comes into your apartment or rented home and trips on a rug, that’s still a liability issue,” Patrick said.
Generally, policies include up to $100,000 liability coverage, according to Worters. “However, experts recommend that you purchase at least $300,000 of protection,” she said.
4. Talking about catastrophes. The list of catastrophes and circumstances that are likely to be covered by renters’ insurance is a long one, ranging from “typical” events such as fire, vandalism or theft to things such as damage from frozen pipes or even riots. What often isn’t included is damage from flooding, and insurance experts suggest if you live in a flood-prone area, you’ll need separate coverage.
5. Other things affecting costs. There may be ways to keep your premium costs down. Or drive them up.
Some policies, for example, may give you a discount if your building has a security system - especially if you have it connected to a central station alarm. And then, there’s a lifestyle consideration that might make your coverage pricier - that is, having a dog. “Some companies are concerned because of the additional liability of certain dogs that are aggressive in nature,” Patrick said.
Additional dog-related insurance costs and whether you get coverage or not depend on the company, she said. “Some won’t write a policy if you have a certain type of dog; others will take a look at the risk and evaluate it differently.”
Tuesday, April 14, 2009
$8,000 Tax Credit Q&A's
As you all know, right now is a phenomenal time to buy a home. The best benefit out there is for the First-Time Home Buyer. Not only are home prices the most affordable we have seen in the past 13 years, the government is offering an $8000 tax incentive. Here is a quick Q & A to help understand some of the points on this incentive:
Q:
A:
How much is the credit?
The tax credit would be $8,000 or 10% of the purchase price, whichever is less.
Q:
A:
What type of purchase is eligible?
Similar to the $7,500 tax credit included in the Housing and Economic Recovery Act of 2008, the $8,000 tax credit included in the 2009 economic stimulus plan is available for the purchase of a principal residence by first-time homebuyers.
Q:
A:
Who qualifies for the first-time homebuyer credit?
According to the IRS, any taxpayer who has not owned a home during the 3 years prior to the date of purchase can qualify for the credit.
Q:
A:
And I really don't have to repay the credit?
No. This is a change from the previous $7,500 tax credit. However, if the home is sold within three years of purchase, the credit will be reversed.
Q:
A:
Are there income limitations on the tax credit?
The tax credit begins to phase out for individuals with adjusted gross income over $75,000 ($150,000 for joint filers).
EXAMPLE: If an individual has a tax liability of $4,000 and was a first time home buyer, they will, instead of paying $4,000 to the IRS, get $4,000 back.
Remember also that when purchasing a home through FHA that the minimum required down payment is only 3.5% and FHA will allow the seller to contribute up to 6% of the sale price for closing costs, pre-paids and impounds. So if the buyer is tight on cash 3.5% is much better than a regular conventional 10% down payment. FHA rates are still in the 5 percent range for a 30 year fixed!
As always, if you or any of your clients have questions regarding any loan programs I would be happy to sit down with you or feel free to give me a call at the number below or shoot me an email.
Thank you,
Jason
Jason T. Beckington
Sr. Mortgage Planner
State Financial Services
Phone: 480.444.2260
Facsimile: 866.854.8555
Email: jbeckington@LO4Hire.com
Web: www.LO4Hire.com
Q:
A:
How much is the credit?
The tax credit would be $8,000 or 10% of the purchase price, whichever is less.
Q:
A:
What type of purchase is eligible?
Similar to the $7,500 tax credit included in the Housing and Economic Recovery Act of 2008, the $8,000 tax credit included in the 2009 economic stimulus plan is available for the purchase of a principal residence by first-time homebuyers.
Q:
A:
Who qualifies for the first-time homebuyer credit?
According to the IRS, any taxpayer who has not owned a home during the 3 years prior to the date of purchase can qualify for the credit.
Q:
A:
And I really don't have to repay the credit?
No. This is a change from the previous $7,500 tax credit. However, if the home is sold within three years of purchase, the credit will be reversed.
Q:
A:
Are there income limitations on the tax credit?
The tax credit begins to phase out for individuals with adjusted gross income over $75,000 ($150,000 for joint filers).
EXAMPLE: If an individual has a tax liability of $4,000 and was a first time home buyer, they will, instead of paying $4,000 to the IRS, get $4,000 back.
Remember also that when purchasing a home through FHA that the minimum required down payment is only 3.5% and FHA will allow the seller to contribute up to 6% of the sale price for closing costs, pre-paids and impounds. So if the buyer is tight on cash 3.5% is much better than a regular conventional 10% down payment. FHA rates are still in the 5 percent range for a 30 year fixed!
As always, if you or any of your clients have questions regarding any loan programs I would be happy to sit down with you or feel free to give me a call at the number below or shoot me an email.
Thank you,
Jason
Jason T. Beckington
Sr. Mortgage Planner
State Financial Services
Phone: 480.444.2260
Facsimile: 866.854.8555
Email: jbeckington@LO4Hire.com
Web: www.LO4Hire.com
Saturday, April 4, 2009
Promising Signs from Valley Housing Data 4/4/09
Promising signs from Valley housing data
In March, foreclosures fell, sales in some areas hit record highs
Apr. 4, 2009
For the first time in years, there's good news coming out of metropolitan Phoenix's housing market.
In March, home sales soared to levels not seen since 2005, foreclosures fell for the first time in a year and prices showed signs of leveling off in some areas.
The Valley's most affordable communities, including many edge neighborhoods, are leading the housing rebound. "The affordable end of the Valley's housing market could finally be at the bottom looking up," said Mike Orr, a real-estate agent and analyst who publishes the Cromford Report. "Homes priced for $150,000 or lower are selling fast and even getting multiple offers. My money is on home prices in many of those neighborhoods being slightly higher by June."
High-priced areas such as Paradise Valley and north Scottsdale aren't seeing the same increases in home sales, though, and are likely to experience more price declines, Orr said.
Valley pending home sales hit 7,550 in March, a 70 percent jump from a year earlier, according to the Cromford Report, which has partnered with the Information Market to track housing indicators by analyzing data from the Arizona Regional Multiple Listing Service and real-estate records. The data track mostly resales but include some new-home sales.
Pending home sales, more than 90 percent of which become final, are a leading indicator for the housing market and include only deals that have a signed contract and set price.
Several Valley cities, including Phoenix, Avondale, Glendale, Peoria, Surprise and Goodyear, posted record sales in March, even beating monthly sales figures from the housing boom of 2005-06.
All of the West Valley cities seeing record sales were battered by foreclosures last year. Those foreclosures pushed down home values.
Now investors, first-time home buyers and retirees are buying those foreclosed homes from lenders. About two-thirds of all Valley home sales are foreclosure properties being resold. All those sales are putting a serious dent in the foreclosure inventory.
"There aren't that many foreclosure homes on the market now," said Orr, who is in the process of buying a foreclosure home in Queen Creek for $94,000. "Many of those deals will soon be gone."
In Queen Creek, the number of foreclosure homes for sale has dropped to 79 at the end of March from 169 in February.
Foreclosure homes are selling nearly twice as fast as they did last fall, when lender-owned homes began to dominate the Valley's housing market. On average, it is taking 117 days for a foreclosure home to sell now, compared with 227 days in November.
The number of foreclosure homes on the market could continue to fall. There were 3,377 foreclosures in metro Phoenix during March, almost 2,000 less than in February. At the same time, foreclosure cancellations nearly doubled to 3,168 last month.
Preforeclosures hit a new high of 10,689 in March. However, Tom Ruff of the Information Market doesn't believe all those will turn into foreclosures. He cites as reasons the growing number of successful short sales in the Valley and the loan-modification programs available under the federal government's housing plan.
Short sales can drag down prices but not as much as foreclosures.
The average sales price per square foot of a Valley foreclosure home has held steady at $66 for the past three weeks. The Valley's overall average price per square foot fell in March to $83 from $89 in February. But Orr doesn't see that number going below $80 because of the recent increase in demand for houses and the shrinking inventory of foreclosure homes.
The Valley's median home price fell in March to $129,000 from $136,000 in February. Prices are a lagging indicator of deals made months ago, before President Barack Obama's housing-rescue plan was announced and before sales began to pick up.
Orr says home prices will continue to fall in Paradise Valley, where there are about 550 houses for sale and only about six are selling a month.
At the current sales rate, that's at least a seven-year inventory of houses on the market in Paradise Valley. In most other parts of the Valley, the inventory of homes for sale is less than a year.
If sales continue to climb in other metro Phoenix communities this month and in May, there's a good chance home prices in the Valley's most affordable communities could tick up in June.
"April will be the turning point for the housing market," Orr said. "People are beginning to perceive we are at the bottom, and there's no reason to wait to buy anymore."
In March, foreclosures fell, sales in some areas hit record highs
Apr. 4, 2009
For the first time in years, there's good news coming out of metropolitan Phoenix's housing market.
In March, home sales soared to levels not seen since 2005, foreclosures fell for the first time in a year and prices showed signs of leveling off in some areas.
The Valley's most affordable communities, including many edge neighborhoods, are leading the housing rebound. "The affordable end of the Valley's housing market could finally be at the bottom looking up," said Mike Orr, a real-estate agent and analyst who publishes the Cromford Report. "Homes priced for $150,000 or lower are selling fast and even getting multiple offers. My money is on home prices in many of those neighborhoods being slightly higher by June."
High-priced areas such as Paradise Valley and north Scottsdale aren't seeing the same increases in home sales, though, and are likely to experience more price declines, Orr said.
Valley pending home sales hit 7,550 in March, a 70 percent jump from a year earlier, according to the Cromford Report, which has partnered with the Information Market to track housing indicators by analyzing data from the Arizona Regional Multiple Listing Service and real-estate records. The data track mostly resales but include some new-home sales.
Pending home sales, more than 90 percent of which become final, are a leading indicator for the housing market and include only deals that have a signed contract and set price.
Several Valley cities, including Phoenix, Avondale, Glendale, Peoria, Surprise and Goodyear, posted record sales in March, even beating monthly sales figures from the housing boom of 2005-06.
All of the West Valley cities seeing record sales were battered by foreclosures last year. Those foreclosures pushed down home values.
Now investors, first-time home buyers and retirees are buying those foreclosed homes from lenders. About two-thirds of all Valley home sales are foreclosure properties being resold. All those sales are putting a serious dent in the foreclosure inventory.
"There aren't that many foreclosure homes on the market now," said Orr, who is in the process of buying a foreclosure home in Queen Creek for $94,000. "Many of those deals will soon be gone."
In Queen Creek, the number of foreclosure homes for sale has dropped to 79 at the end of March from 169 in February.
Foreclosure homes are selling nearly twice as fast as they did last fall, when lender-owned homes began to dominate the Valley's housing market. On average, it is taking 117 days for a foreclosure home to sell now, compared with 227 days in November.
The number of foreclosure homes on the market could continue to fall. There were 3,377 foreclosures in metro Phoenix during March, almost 2,000 less than in February. At the same time, foreclosure cancellations nearly doubled to 3,168 last month.
Preforeclosures hit a new high of 10,689 in March. However, Tom Ruff of the Information Market doesn't believe all those will turn into foreclosures. He cites as reasons the growing number of successful short sales in the Valley and the loan-modification programs available under the federal government's housing plan.
Short sales can drag down prices but not as much as foreclosures.
The average sales price per square foot of a Valley foreclosure home has held steady at $66 for the past three weeks. The Valley's overall average price per square foot fell in March to $83 from $89 in February. But Orr doesn't see that number going below $80 because of the recent increase in demand for houses and the shrinking inventory of foreclosure homes.
The Valley's median home price fell in March to $129,000 from $136,000 in February. Prices are a lagging indicator of deals made months ago, before President Barack Obama's housing-rescue plan was announced and before sales began to pick up.
Orr says home prices will continue to fall in Paradise Valley, where there are about 550 houses for sale and only about six are selling a month.
At the current sales rate, that's at least a seven-year inventory of houses on the market in Paradise Valley. In most other parts of the Valley, the inventory of homes for sale is less than a year.
If sales continue to climb in other metro Phoenix communities this month and in May, there's a good chance home prices in the Valley's most affordable communities could tick up in June.
"April will be the turning point for the housing market," Orr said. "People are beginning to perceive we are at the bottom, and there's no reason to wait to buy anymore."
Subscribe to:
Posts (Atom)
