On the surface, condos may appear to be no different than other homes or apartments. But the legal definition of a condominium is significantly different from that of a typical single-family home, and buyers should be aware of these differences before buying a condo.
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In the wake of the worst mortgage crisis in USA history, lawmakers and consumer rights groups are forging ahead with proposals to more tightly regulate America’s mortgage brokers. Mortgage brokers are different from traditional loan officers because rather than simply working for a single bank or lending company they represent numerous lenders. Their job is to help find the best rates and loans for their customers by doing the background research and comparison shopping required to find those loans, and the best mortgage brokers work with a reliable network of lenders that are capable of providing competitive loan packages and interest rates.
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Most people know that foreclosures are the bargain basement buys within the real estate business. But buying a foreclosure can also involve huge risks, especially for those who are not knowledgeable about the process and the major legal responsibilities that taking ownership of a foreclosure entails. REO properties, however, offer many of the same discounts without the inherent risks, and you can buy them just as you would any property listed with a real estate broker. You don’t have to show up at an auction with a cashier’s check; you have a chance to conduct inspections, and you can pay for an REO with a regular home mortgage.
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In 2007 the word subprime suddenly went from being a seldom-used mortgage industry term to a commonly known household word. The notoriety happened because subprime loans caused severe turmoil in the mortgage industry and led to historically high rates of real estate foreclosures. But even though most of us now understand the negative effects from subprime loans, we may not be familiar with the actual meaning of this category of mortgages.
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When you buy any type of insurance, you are paying the insurance company to cover your losses in event of an accident, illness, theft, or other problem. But homeowners are often surprised to find out that the policies they bought do not cover them for certain situations, and it pays to study your insurance policy carefully to make sure you get what you pay for in terms of coverage. Homeowners have to assume more responsibility than ever before in order to qualify for insurance payments in the event of a claim, and insurers are adding more and more small print to limit their policies.
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Hard loans are often depicted as shady loans like those made by loan sharks in gangster movies, but that is usually not a fair or accurate portrayal. The majority of hard loans are offered by legitimate major banks and mortgage lenders in order to help consumers who have special financial needs that are not covered by traditional types of loans.
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Equity is another word for value or potential profit, and specifically it means the difference between what you owe on something – or paid for something – and what that item is actually worth today.
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With the Option ARMs kicking in to their higher rates and/or due to job loss or health emergencies many are not able to make their mortgage payments. And to make matters worse with the house market going down many of them are upside down on their mortgage, meaning their mortgage value is more than that of the house value itself. So even if they were to sell their house, it won’t completely payoff the mortgage. With no options left many just let the bank foreclose on the home and ruin their credit for up to 10 years.
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The number of foreclosures in the USA is staggering, and is being felt in practically every region of the nation. Inventories of unsold homes now amount to about six or seven months’ worth, which means that it will take at least half a year just to sell off the houses that are already on the market. But pricing continue to fall, even as such economic pressures as gas rices and interest rates go higher and higher. The result is a perfect storm of distress for homeowners, many of whom are forfeiting their properties to foreclosure. Because mortgage companies lose money when they take back or foreclose on a house, lenders are becoming very conservative with their purse strings, and this mood is being demonstrated by the tightening of lending rules and guidelines.
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Mounting pressure on lenders in the subprime markets – who are taking some hard hits from a record number of loan defaults and foreclosures – is forcing them to revisit the way they qualify people for loans. And as Congress investigates whether banks and mortgage companies wrote too many risky loans without adequately screening customers or educating homeowners about the dangers of such loans, the entire lending industry is jumping on the band wagon and promoting the trend toward tighter guidelines.
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