How Will Foreclosure Effect Credit Scores?

How Will Foreclosure Effect Credit Scores? The amount of damage to a credit score caused by foreclosure, deed in lieu or a short sale during 2008 and 2009 may be mitigated by the slower economic times, say some credit and legal experts.

FICO may have to adjust its credit scores to lessen the impact of a foreclosure in the last two years, says Todd J. Zywicki, a professor of law at George Mason University.''It just seems obvious that a foreclosure in 2008 or 2009 doesn't have as much information value as a foreclosure five years ago,'' he says. ''To the extent that foreclosure doesn't predict future behavior as much as it did in the past, you'd expect that the FICO algorithm would change to adjust for that.''One of the country’s largest credit unions Golden 1 has already figured out a way to lend to people with a foreclosure on their record by offering a mortgage repair loan specifically for those who have lost a home to foreclosure and who want to buy a new one.BECU, another large credit union based in Washington State, is about to present a program to fellow lenders, ''How to Lend to the Newly Credit Impaired.”

Source: The New York Times, Ron Lieber (03/14/2009)

FHA Loans Become Popular Choice

FHA Loans Become Popular Choice Newly discovered FHA loans, which require low down payments but charge higher interest to borrowers with lower credit ratings, have quickly become a wildly popular choice for home buyers.

The loans require a down payment of only 3.5 percent, while conventional loans require down payments of 10 percent or higher.However, the products also are drawing some unfavorable comparisons to now-abolished subprime loans.

Finance professionals, however, stress that unlike the infamous subprime mortgages of years past, FHA lenders go out of their way to verify income and ensure that they are not approving "liar loans."


Source: Palm Beach Post (Fla.), Jeff Ostrowski (03/16/09)

4 Tips to Make a Home More Inviting

4 Tips to Make a Home More Inviting Model homes are important tools for builders because they help buyers fall in love with a home.Phyllis Ryan, president of the model-home division of Interior Concepts, a Maryland design firm that specializes in furnishing new homes, has some tips that might benefit anyone who is selling a home.


A stylish kitchen appeals to many buyers. If a sellers has upgraded cabinets and granite countertops, that’s good. If they don’t, it may help to display some stylish touches like an espresso machine, a retro toaster or just some luscious fruit.


Lots of light makes spaces feel larger. Turn on all the lights even during the day and add a few extra lights if necessary.


The master bedroom should seduce a buyer. Play soft jazz, pile the bed high with a cushy comforter and pillows. Stack plush towels in the bathroom.


Add drama to a bottleneck or a dead end space. Prop an oversize mirror against the wall. It visually ops a space and adds drama.

Source: Washington Post, Elizabeth Razzi (03/14/2009)

Whatever we plant in our subconscious mind and nourish with repetition and emotion will one day become a reality." — Earl Nightingale

ZIP Codes Where Housing Sales Are Increasing

ZIP Codes Where Housing Sales Are Increasing Housing sales are improving significantly in key ZIP codes around the country where prices have moderated, according to information compiled for BusinessWeek.com by First American CoreLogic.ZIP codes in California, Florida, Arizona and Nevada dominated the list, but there were also ZIP codes on the top 25 most-improved sales list from the suburbs around Detroit and Minneapolis and in the metro areas of Atlanta and Chicago.

Inventories are shrinking and prices are stabilizing in several markets, according to the survey. Here are the top 10 ZIP codes with improved home sales:94533, Fairfield, Calif. (Fresno) 92376, Rialto, Calif. (Riverside-San Bernardino-Ontario) 91342, Slymar, Calif. (Los Angeles-Long Beach-Santa Ana) 92126, San Diego, Calif. 33914, Cape Coral, Fla. (Fort Meyers) 93065, Simi Valley, Calif. (Oxnard-Thousand Oaks-Ventura) 95123, San Jose, Calif. 85379, Surprise, Ariz. (Phoenix-Mesa-Scottsdale) 93722, Fresno, Calif. (Madera) 95624, Elks Grove, Calif. (Sacramento-Arden-Arcade-Roseville)

Source: BusinessWeek.com, Prashant Gopal (03/05/2009)

Pricing Disagreement: What Is a Home Worth?

Pricing Disagreement: What Is a Home Worth? Homebuyers and the real estate professionals they choose to sell their homes don't always agree over what the property is worth, and many buyers think both of them are setting prices too high, according to a survey by HomeGain.com Inc.

The survey found that 63 percent of home owners believe the price their practitioner recommended is too low. About 45 percent of sellers think prices should be 20 percent to 30 percent higher, while 14 percent believe their home should be priced a whopping 30 percent higher.Meanwhile, 21 percent of home buyers say the homes they are considering are overpriced by up to 10 percent; 32 percent say prices are 10 percent to 20 percent too high; and 6 percent say homes are more than 21 percent over priced.

Only 18 percent believe homes are priced fairly.“Home owners know that prices have fallen, but that somehow doesn’t apply to them because they have ‘upgraded vinyl’” or something, Pamela Frey-Primiani of Keller Williams Realty in Sicklerville, N.J., says. “Sellers have got to be realistic in their expectations.

An overpriced home in these times does nothing — no showings, no offers, just whining from sellers that it’s all someone else’s fault that the home hasn’t sold.”

Source: HomeGain.com Inc. (03/05/2009)

Loan Apps Rise as Rates Dip Below 5 Percent

Loan Apps Rise as Rates Dip Below 5 Percent Average mortgage rates dipped below 5 percent last week, driving mortgage application volume up 11.3 percent to 723.4 from 649.7 the previous week on an adjusted basis, according to the Mortgage Bankers Association weekly survey.On an unadjusted basis, the index increased 11.6 percent compared with the previous week and was up 5.7 percent compared with the same week a year ago.

The increase was reflected in the government purchase index (mostly FHA), which rose 10.4 percent. The overall purchase index was up 7.1 percent. The refinance share increased to 67.9 percent, up slightly from the previous week when it was at 66.9 percent.Mortgage rates were down to the second-lowest rate in the history of the survey, with the record low being 4.89 percent for the week ending Jan. 9, 2009.


30-year fixed-rate mortgages decreased to 4.96 percent from 5.14 percent;
15-year fixed-rate mortgages decreased to 4.54 percent from 4.73 percent;
1-year ARMs increased to 6.21 percent

Source: Mortgage Bankers Association (03/11/2009)