Chance Gates' Blog

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RISMEDIA, August 25, 2010–Consumers with strong financial knowledge begin saving earlier and are more confident in their everyday financial tasks, according to the TD Bank Financial Literacy Poll released by TD Bank.

Education at an early age is key to achieving financial confidence. Many consumers doubt their financial skills and believe they were not taught enough at a young age and feel saving money is difficult. TD Bank surveyed 2,160 consumers to better understand the financial literacy and attitudes of consumers in the Northeast, Florida and Mid-Atlantic.

“The poll reveals that it is imperative for parents to act as the primary role model to their children if they want financially successful children,” says Suzanne Poole, executive vice president, retail sales strategy and distribution, TD Bank. “Starting financial literacy lessons early results in adults who are more confident in their money decisions, are more financially literate and are more skilled at saving money.”

Who is Your Financial Role Model?
Although this is not an easy question to answer, more than one-quarter of consumers struggled to identify any financial role models. The poll also revealed the primary sources for financial information and help in managing finances. Forty percent of consumers in the Northeast and 38% in the Washington, D.C. region turn to family members for financial advice; while Warren Buffet and famous financiers often edge ahead of financial advisors. In fact, only about one-quarter of the consumers surveyed have a financial advisor or financial planner.

Consumers with “good” financial literacy started learning about money slightly earlier than the average consumer, but only one-half of consumers started learning or having conversations about money under the age of 18. From those who did start learning about savings at a young age, 77% of New Englanders, 80% of Mid-Atlantic residents and 78% of Floridians say they learned from their parents.

Financial firsts are important to financial literacy confidence and education. Although most polled, about 70%, can remember opening their first bank account, only half can remember their first deposit or investment. However, those with “good” financial literacy, about 57%, could recall their first deposit amount.

“TD Bank believes it is important to not only start having financial conversations at a young age, but to also make those first financial experiences memorable,” said Poole. “More than 22 years ago, we created the WOW!Zone, a free, financial literacy program to help children ages 5-18 develop strong financial skills, in school and online. It is a great tool for parents to use to make learning about money fun!”

Responsibility and budgeting are taking a more prominent place at the dinner table today than when parents were younger. Sixty-two percent of parents versus 77% of children today learned about the importance of money. About 75% of parents are teaching their children about financial responsibility as well as saving, budgeting, the value of money, credit cards, etc., while only about 15% of parents were taught about investments and only about 20% learned how to use a credit card.

Poole added, “Today’s children are not learning about money that differently than their parents did. Parents today are taking primary responsibility in financial education. Parents should ask themselves if they are the financial role model they need to be. Starting young is not the only key to success. We found that the topics parents talk about and creating memorable financial moments matter, too.”

Other key findings from the survey include:

• About 94% of those polled with “poor” financial literacy skills wished saving money wasn’t so hard versus 65% with “good” skills.
• About 40% of consumers in New England, the Mid-Atlantic and Florida with “poor” financial literacy skills are confident in making financial decisions versus 93% with “good” skills.
• About 81% of those surveyed wished they would have started saving earlier, and about 55% of them were definitely not taught when young.
• 71% of consumers in the New England, Mid-Atlantic and Florida regions are confident in their understanding of everyday financial tasks such as paying bills on time, followed by balancing their checkbook.

The majority of consumers in the New England, Mid-Atlantic and Florida regions are either extremely confident or very confident in financially preparing their children; consumers responded that responsibility, saving money and budgeting money are the most important topics to teach children today.

As a Reno/Sparks real estate professional, I encourage all questions and comments on the Reno/Sparks real estate market or any of the articles posted in this blog. I have free access to the MLS and you can email me @  chance at ballard-company.com or http://www.myspace.com/chancegates

By Jim Dinkel and Ken Trepeta

RISMEDIA, August 9, 2010—The real estate industry and especially the mortgage industry have been overwhelmed with changes, regulations and consolidations recently. In the last couple of months, many transactions nationally have experienced delayed closings or worse as a result of the application of new guidelines affecting APR, Good Faith Estimates (GFE), Truth in Lending (TILA) and condo project approvals to name a few.

There is one more issue that is critical for real estate agents, loan officers, and anyone else who deals with consumers purchasing a home or obtaining a refinance. Effective with applications on or after June 1, 2010, Fannie Mae has issued new lender mandates (FNMA LL-2010-03 Loan Quality Initiative) on a national basis that, if not understood properly, could have devastating consequences for many buyers and sellers. We want to be certain that everyone understands the implications of the new rules and ensure that all interested parties know what they need to know to minimize negative repercussions.

The intent of this initiative is to assure that all applicant information is disclosed and is honest and accurate as of the moment of closing. Lenders will now be required to re-pull credit report information just prior to closing, re-verify employment, validate Social Security numbers, verify intent to occupy and verify that all parties to the transaction have been checked against the national “excluded party” list, which is managed by HUD and by the General Services Administration. Changes in any of these factors are likely to result in a re-underwrite, the need for additional documentation, or suspension of loan closing.

The most onerous of these is the credit re-pull. It is important that this is done as a “soft pull” so it does not show as an inquiry, which could potentially change the borrower’s credit score. Firms will, however, have to match the outstanding debts and inquiries with the report used to approve the loan. Additional credit or increased balances that change the debt-to-income ratio more than 2% (or less if it now exceeds guidelines) will require the loan to be suspended and re-submitted to underwriting.

Any additional delinquencies will result in a new, full credit re-pull and re-underwriting, utilizing the new credit. Any and all inquiries from other lenders or credit suppliers must be verified by the credit bureau and certified that new debt did not occur. If new credit has been extended, the new debt must be included in the borrower’s debt-to-income ratio and the loan must be re-underwritten.

Other considerations are W-2 employees that may own more than 25% of a business, mandating business returns and cash flow analysis and full disclosure of child support and alimony. Changes could render the applicant unqualified or could delay the closing. As a result of TILA, GFE and risk-based pricing changes, additional debt could result in re-pricing the loan due to a change in credit score, which even if approvable, would delay the closing three business days as re-disclosure would be required.

So How Do We Manage the New Process?
Real estate agents and lenders must impress upon the applicants the need for full and honest disclosure at the time of application, during the loan process and at closing. Buyers must be cautioned against applying for new credit during the process, changing jobs (30-day pay stub requirements are being enforced), and charging to their credit cards. It is imperative that they notify the lender if anything changes from application to closing.

We must all be aware that an applicant that signs an erroneous initial or final closing application could be committing fraud. Lenders choosing to approve loans without the proper loan quality processes and documentation are only endangering the buyer. Any lender or real estate agent that encourages someone to falsify information could be equally responsible. It is noteworthy to mention that many loans go through an immediate quality control audit post closing, so this could affect highly qualified applicants as well. Identified fraud of this nature could be investigated by the FBI.

While this new policy was implemented first by Fannie Mae, it is already a mandate of all national lenders and, based on experience, will soon be required on every loan. It is important to keep this in mind on every deal, not just ones that may involve Fannie Mae.

As a Reno/Sparks real estate professional, I encourage all questions and comments on the Reno/Sparks real estate market or any of the articles posted in this blog.  You can email me @  chance at ballard-company.com or http://www.myspace.com/chancegates

RISMEDIA, June 18, 2010—E & O insurance is certainly nothing new for Madison, Wisconsin-based HSA Home Warranty. In fact, with its own in-house insurance division since 1986, HSA Insurance Services, risk management and liability insurance is built right into HSA’s corporate structure.

“Back in the day, when we first started offering E & O insurance 25 years ago, it was something of an unknown entity,” says HSA Chief Corporate Development Officer, Gary Lombardo. “We sold home warranties on the basis of it being part of a risk management program. If the warranty didn’t do an adequate job of deflecting lawsuits, you had the safety net of E & O insurance.”

While risk and E & O insurance may have been downplayed during the market boom of the early 2000s, in today’s tumultuous market, risk is at the center of the conversation.

“Today, there’s more risk than there has been in the past 10 years,” according to Lombardo. “In the era of short sales and REOs, there are a lot more activities that create more liability than there’s been in the past. Since HSA has an insurance agency, we have the ability to consult our clients through these more turbulent times when agents and agencies need to protect themselves that much more. We are better poised to address these issues than most of our competitors because we are only one of two companies that has its own insurance agency. At HSA, this has always been a part of our corporate structure.”

At the helm of HSA’s in-house insurance operation is James Candler, president of HSA Insurance Services. With 21 years’ experience in professional liability insurance and real estate liability insurance, Candler is quite familiar with the impact of today’s market and its implications for insurance. In the current real estate climate, says Candler, insurance carriers have become more stringent.

“Carriers perceive more risk in the market building up because of the financial crisis, largely, and are becoming more conservative,” he explains. “Not only do we write insurance for real estate agents, but also for property managers, appraisers and mortgage brokers. Things have been especially tough [for those professionals]. On the real estate side, if it’s a company that’s got some blemishes, carriers are often not willing to give the best pricing…if [they are willing to insure those companies] at all.”

That said, the need for real estate professionals to have effective liability coverage is essential in the current, litigious real estate environment. According to Lombardo, in today’s market, brokers and agents need to review their insurance coverage in great detail to ensure they are prepared.

“It became clear to us how many clients were unaware of the risks their policies didn’t cover,” he explains. “Our industry is under siege right now. We are trying to refocus agents on the big-picture role that warranty and E & O insurance plays in their lives and their careers and how this should be more important to them than the small fee they get for selling the warranty. In recent years, in many of the agent’s minds, the value of the home warranty was measured by the per-transactional remuneration. Chances are, though, they would spend more money on a lawsuit than they receive as an administrative fee. It’s the only over-riding risk management tool they have to shield them from post-litigation liability.”

According to Candler and Lombardo, the risk climate of today’s market is presenting unique insurance issues in terms of short sales and bank-owned properties.

“Many banks are requiring our clients to affiliate with the bank in order to sell these types of properties,” explains Candler. “Banks are requiring real estate firms to carry higher limits and they are trying to get these firms to name the bank as an additional insured on their policy. But agents need to know that when they name an additional insured on their policy, they are then sharing that policy value with the bank. While banks are looking to protect their interests, they really don’t need to be on the agent’s policy, because if the agent makes a mistake, the bank could bring suit against the agent or the real estate firm. If they’re on the agent’s policy, then they become a co-insured, and one co-insured cannot sue another.”

While Candler advises real estate agents to never add a bank to their liability insurance, he does strongly recommend that all real estate professionals make sure they have an adequate amount of quality insurance, despite the financial strain they may be feeling in today’s troubled economic environment.

“Many are focusing more on the money than on the value of protecting themselves from post-transaction litigation,” Lombardo explains. “When you look at the big picture, the cost is such a small percentage compared to the liability reduction we create for people. It’s hard to measure the costs of a lawsuit you prevented. And, more often than not at the brokerage level, if home warranties are being endorsed, they’ll reduce the E & O premium.”

While many agents and brokers are tempted to be led by price alone when buying insurance, Candler stresses that how the insurance company performs is more important. “We have the ability, through our strong relationships with our insurance carriers that if we have a claims issue, we can get to the right people immediately and resolve the problems for our customers.”

Candler recommends firms never buy a policy worth anything less than half a million dollars. “You need to purchase a limit that is realistic for your area,” he adds. “That is the biggest message we’re trying to get across. Money is sensitive, but you don’t want to skimp on what you’re buying.”

According to Lombardo, in today’s real estate climate, seller’s E & O insurance is also gaining popularity. “We are in a cycle now where seller’s E & O insurance is making a resurgence,” he explains. “This provides the seller coverage in the event they are sued.”

In addition to promoting effective liability coverage, Candler stresses the importance of taking the proper risk-reduction steps throughout the real estate transaction.

“From a risk management standpoint, E & O is always going to be there as an umbrella, but real estate agents need to educate themselves to make sure they are providing the proper disclosure and making inspections and warranties available, and communicating all the information they can to buyers,” says Candler. “There are so many properties out there being sold as-is—agents need to disclose what they know about the property’s condition but also should disclose the homeowner’s financial condition and whether the lender has approved the short sale. All of these steps are necessary to keep themselves out of litigation.”

For more information, visit www.onlinehsa.com.

As a Reno/Sparks real estate professional, I encourage all questions and comments on the Reno/Sparks real estate market or any of the articles posted in this blog.  You can email me @  chance at ballard-company.com or http://www.myspace.com/chancegates

RISMEDIA, July 26, 2010—(MCT)—David Kosowski has a full-time job, a sky-high credit score, a solid debt-to-income ratio and enough cash stashed away to put a 20% down payment on the three-bedroom, two-bath home he’s had his eye on since spring.

But when he applied for a mortgage to cover 80% of the $495,000 purchase price of the Coral Gables, Fla., home last month, he was flatly denied.

His story is one that has played out with head-scratching regularity across the troubled housing market, industry analysts say, even as mortgage rates have dropped to historically low levels.

The average interest rate for a 30-year fixed-rate mortgage sank to a record-low 4.56% this week, according to government-sponsored mortgage buyer Freddie Mac. Fixed-rate 15-year mortgages dipped slightly to an average 4.03%, also a record.

But even as rates fall, lenders are raising the bar ever higher for applicants, making it harder for even financially-stable home buyers to qualify, and in some cases making homes affordable only to those able to pay with cash.

Kosowski, who seems to have weathered the recession and the housing market downturn better than many—he’s employed and has considerable equity in the three-bedroom home he purchased 10 years ago—said his application was rejected because the company he works for (and owns a 25% stake in) saw its earnings drop between 2008 and 2009.

That was enough, he said, for the bank to turn down his loan application—despite his 817 credit score, a history of meeting all debt obligations and a 21% debt-to-income ratio.

“They asked me to explain the earnings decline,” he said. “I wrote a letter explaining that the economy had been down in 2009, and the next day they said the loan was denied. I was very surprised.”

Steve Schneider, his mortgage broker, and owner of Greenwich Title Services in South Miami, said he was surprised as well. “His credit is as good as anyone I’ve ever worked with,” he said. “He should’ve flown through.”

Such rejections would have been unheard of a half-decade ago, when credit was flowing freely, often to people who couldn’t afford the homes and condos they were buying, said Doug Dewitt, a Miami-based real estate broker.

“Now the pendulum has swung completely in the other direction, and lenders are making you very accountable in terms of your credit history,” he said. “It’s like they don’t want to write one more bad loan.”

With South Florida’s housing market still struggling to recover from record-high foreclosures, toppled home values and a glut of inventory, the ease with which banks now turn down applicants is nearly unprecedented, he added.

Potential borrowers are being denied access to tantalizingly low interest rates for reasons ranging from insufficient down payments, to a less-than-perfect credit history, to concerns about the property or buildings they hope to buy into.

The current interest rates are so desirable because they translate into significant savings in monthly and total payments for home buyers. For example, someone getting a $250,000 home loan in July 2010 would save an average of about $155 each month, compared to someone getting a similar loan last July, when the average 30-year fixed interest rate was about a percentage point higher.

Mortgage lending in 2010—down about 50% from early 2009—has shown a complete 180-degree turn from the home lending practices that reigned before the housing market bubble burst, and represents yet another obstacle stalling a recovery in the housing market, those who track the industry say.

Kosowski had very little trouble getting a loan for the home he bought back in 2000, when his income was lower than it is today. As he looked to move into a bigger home this year, the stack of paperwork he had to fill was considerably thicker than it was 10 years ago.

“It’s night and day,” he said, comparing the two loan application experiences. “I had to give about a quarter of the information that they ask for now, my income was significantly less than it is now, and there was no problem getting a loan. It’s almost like they don’t want to lend.”

The low-interest rates have done little to spur activity in the housing market. Last week, the number of mortgage-loan applications for home purchases dropped to its lowest level since the 90s, the Mortgage Bankers Association found. Nearly four out of five applications were from existing homeowners looking to refinance, many of them rejected because of insufficient or nonexistent equity.

Despite prices that have fallen drastically in the past five years, traditional home sales to traditional, middle-income buyers have been pushed to the margins.

With the expiration of the federal home buyer tax credit and many still worried about losing their jobs, the stiff lending requirements of banks offer up yet another reason for the average person to not buy a home.

Kosowski, who works for a lighting manufacturing company, ended up paying cash for the Coral Gables home in June, and is hoping to get a refinance loan soon.

Greg McBride, senior financial analyst for Bankrate.com, predicted that mortgage rates would remain low for the foreseeable future, but it will take more than low-rates to spur a recovery.

“Low mortgage rates alone are not going to revive the housing market,” he said. “People are still nervous about their jobs, and reluctant to take the plunge into home ownership. And the market continues to be plagued by a very high level of distressed properties.”

As a Reno/Sparks real estate professional, I encourage all questions and comments on the Reno/Sparks real estate market or any of the articles posted in this blog.  You can email me @  chance at ballard-company.com or http://www.myspace.com/chancegates

(c) 2010, The Miami Herald.

Home at Last™ MCC Program
Do you want to become a homeowner, but don’t think you can qualify for a loan? The Nevada Rural Housing Authority is here to help with Home at Last™ home financing programs. One of our current Home at Last™ programs is a mortgage credit certificate (MCC) program.

Home at Last™ MCC provides a dollar-for-dollar federal income tax credit equal to 20% or 30% of the interest paid on a mortgage loan. The tax credit is given to the homebuyer every year as long as they live in the home. Loans of $190,000 or less will receive a 30% credit and loans of more than $190,000 will receive a 20% credit.

What does Home at Last™ MCC offer:
• Federal income tax credit equal to 20% or 30% of the interest paid on a mortgage loan
• Annual savings estimated at $2,000 a year per household
• Savings continue each year based on actual interest paid on the home
• No asset limits for homebuyers

Savings Example:
Home A
Loan Amount: $120,000
Interest rate: 5.5%
Approximate annual interest: $6,600
Tax credit: 30% of mortgage interest
Savings: Approximately $165 a month or $1,980 a year

Home B
Loan Amount: $200,000
Interest rate: 5.5%
Approximate annual interest: $11,000
Tax credit: 20% of mortgage interest
Savings: Approximately $183 a month or $2,200 a year

Who qualifies:
• First-time homebuyers or qualified veterans who will live in home as primary residence
• Households meeting income qualifications and normal FHA, VA, Conventional or RHS underwriting requirements
• Home purchase is in rural Nevada (population fewer than 100,000) and falls below maximum price

Click here to watch a four-minute video explaining the program.

Information obtained from http://www.nvrural.org

As a Reno/Sparks real estate professional, I encourage all questions and comments on the Reno/Sparks real estate market or any of the articles posted in this blog.  You can email me @  chance at ballard-company.com or http://www.myspace.com/chancegates

RISMEDIA, July 19, 2010—“Homeowners and buyers who are sitting on the sidelines should get moving today, unless they want to get blindsided by the impact of a new law,” said Gibran Nicholas, Chairman of the CMPS Institute, an organization that trains and certifies mortgage bankers and brokers. “The massive financial reform law that just passed Congress has two main components that could very negatively impact homeowners and home buyers in the future.”

Harder to qualify for a mortgage
“The new law dictates certain guidelines that lenders must follow when making loans,” Nicholas said. “Some of these guidelines are simply a copy of the current situation. However, now that the guidelines are built into law, lenders will find it even more difficult to loosen their guidelines once the economy and housing market improves.” For example, consider a business owner with a very high 750 credit score, plenty of equity in their home, no history of late payments, and plenty of cash in the bank. If this responsible homeowner experienced a loss in their business last year, they may be prevented from qualifying for a home mortgage under the new law because of the temporary decline in income from their business. The new law requires lenders to document a borrower’s income, but it does not specifically state the terms under which loans can be made. “Regulators may address this ambiguity when writing the regulations implementing the law,” Nicholas said. “However, if they don’t, many lenders will be tempted to tighten their guidelines even further in order to err on the side of caution and stay in compliance with the new law.”

Higher mortgage rates
“There are two sections of the law that will cause mortgage rates to increase in the future,” Nicholas said. “The new law requires lenders to keep a 5% stake in the mortgages they originate unless the loans meet a certain criteria. This means that lenders won’t be able to offload some of the higher risk associated with these loans, and interest rates on these types of loans will go up.” For example, homeowners who have had financial or credit challenges due to divorce or bankruptcy, business owners with fluctuating income, and other homeowners and buyers who fall “outside the box” may need to pay higher rates on their home loans in the future. “Also, the future of Fannie Mae and Freddie Mac remains uncertain,” Nicholas said. “The market doesn’t like uncertainty, and mortgage rates could go a lot higher in the future depending on when and how the issue of Fannie and Freddie is resolved.”

“To be clear, there are a few positive elements to the bill,” Nicholas said. “These include consumer protections involving pre-payment penalties and loans originated in states that have laws that prohibit lenders from pursuing judgments against homeowners who owe more than the value of their homes. However, the main takeaway for homeowners and buyers is that mortgage rates are currently very low, and lending guidelines are not as bad as they could be once the new law goes into effect. This means that if you can qualify for a mortgage now, you should do so, and not gamble your homeownership goals on the future impact of the new law.”

For more information, visit www.cmpsinstitute.org.

As a Reno/Sparks real estate professional, I encourage all questions and comments on the Reno/Sparks real estate market or any of the articles posted in this blog.  You can email me @  chance at ballard-company.com or http://www.myspace.com/chancegates

By Dan Serra

RISMEDIA, June 28, 2010–(MCT)–While most financial-savvy consumers do their best to avoid debt, one debt that is unavoidable to many families is a mortgage. Because many of us feel more in control of our home and expenses without a mortgage, a common question is whether to pay it off as quickly as possible.

The answer depends on each person’s financial situation. A mortgage can actually be a blessing to some.

For example, mortgage interest is tax-deductible. This deduction saves taxpayers about $103 billion a year, according to the U.S. Treasury. The benefit is less to owners of low- to moderate-valued homes who may not have much interest or enough to claim it by itemizing deductions. But for families with a higher net worth, it allows a tax savings and may encourage them to buy larger homes.

With tax brackets for the wealthy rising next year, this tax break becomes more valuable. When the break is included, a 6 percent mortgage could have a rate closer to 4 percent in reality. Calculate your mortgage’s effective rate by subtracting your tax rate from 100 and multiplying that number by the interest rate. For example, a 28 percent tax bracket with a 6 percent mortgage would result in (.06 x 72) to equal the equivalent of a 4.32 percent mortgage rate after considering tax savings if itemized. That helps the interest look less daunting.

In addition, with the possibility of investing with a goal of a 5 or 6 percent return, instead of putting that money into a mortgage the homeowner could get a return higher than the effective rate, which could help grow net worth. On the other hand, if the effective rate is higher, it may make sense to pay down the mortgage.

Another situation that makes paying off a mortgage attractive is for someone at risk of bankruptcy. Many states offer protection from creditors seizing a home to pay debts. If a home is paid in full, it is more likely the owner could stay in it if he goes broke, providing he can pay for the upkeep.

Money taken out for a mortgage also could reduce net worth later in life. The potential for higher investment returns are gone; that money will not be able to grow if investments grow over the long term. Not to mention having too much invested in a house. That could be detrimental at retirement. While we can get a loan for a house, there are no loans to finance retirement.

As a Reno/Sparks real estate professional, I encourage all questions and comments on the Reno/Sparks real estate market or any of the articles posted in this blog.  You can email me @  chance at ballard-company.com or http://www.myspace.com/chancegates

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When shopping for a mortgage loan, homebuyers need to be aware of predatory lending practices. These unscrupulous activities can increase the cost of homeownership and rob the borrower of equity in the home. Many predatory practices are illegal.

Predatory lenders may mislead the borrower about the true cost of a mortgage loan, fail to provide legally required disclosure documents or add unexpected, unnecessary and excessive costs at settlement.

Unethical lenders may involve borrowers in mortgage fraud by asking the borrower to provide false information on the loan application or leave important line items blank on the application. Fraud can also involve inflated home appraisals and the misuse of mortgage funds.

The best protection against predatory lending and mortgage fraud is to shop around for a mortgage loan. Ask questions and get explanations so that you have a complete understanding of the loan. Be sure you know the total borrowing cost over the life of the loan.

Fannie Mae works to promote responsible lending and combat predatory lending and mortgage fraud. We want people to buy homes they can afford over the long term. We do this by:

• Offering home mortgage products through lenders that make home buying affordable and sustainable for borrowers.
• Supporting homebuyer education and counseling. Counselors and other housing professionals use our free Home Counselor Online™ tool as a resource to help consumers prepare for, apply for and receive home loans — as well as provide the post-purchase support necessary to remain successful homeowners.
• Providing consumers with home-buying information through Fannie Mae’s Resource Center
  at 1-800-7FANNIE (732-6643).

High-pressure sales tactics, including pressure to act quickly, can be signs of predatory lending. Deals that appear to be too good to be true generally are just that — too good to be true.

Fannie Mae

As a Reno/Sparks real estate professional, I encourage all questions and comments on the Reno/Sparks real estate market or any of the articles posted in this blog.  You can email me @  chance at ballard-company.com or http://www.myspace.com/chancegates

If you want to stay in your home, but you had trouble paying your mortgage and are now behind with your payments. There are options available to help you stay in your home.

Refinance:

A new loan—with new terms, interest rates and monthly
payments—that completely replaces your current
mortgage. Even if your home value has decreased, you may
be able to refinance your loan as part of the government’s
Home Affordable Refinance Program (HARP).
• Make your payment more affordable by lowering your
interest rate or adjusting the terms of your loan
• No negative impact to credit score
• Stay in your home and avoid foreclosure

Repayment Plan:

An agreement between you and your mortgage company
that lets you pay the past due amount on your mortgage
payments over a specifed time period in order to bring
your mortgage up to date.
• Catch up on your past due payments over an extended
period of time
• Less damaging to your credit score than a foreclosure
• Stay in your home and avoid foreclosure

Forbearance:

An offer by your mortgage company to temporarily
suspend or reduce your monthly mortgage payments for
a specifed period of time.
• Have time to improve your financial situation and get
back on your feet
• Less damaging to your credit score than a foreclosure
• Stay in your home and avoid foreclosure

Modification:

An agreement between you and your mortgage company to
change the original terms of your mortgage—such as
payment amount, length of loan, etc. You may also be
eligible for the government’s Home Affordable Modification
Program (HAMP) created to help struggling homeowners.
• May reduce your monthly mortgage payments to a more
affordable amount
• Less damaging to your credit score than a foreclosure
• Stay in your home and avoid foreclosure

Download full Borchure

As a Reno/Sparks real estate professional, I encourage all questions and comments on the Reno/Sparks real estate market or any of the articles posted in this blog.  You can email me @  chance at ballard-company.com or http://www.myspace.com/chancegates

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Here’s some good news for the struggling US housing market: Thanks to the European debt crisis, mortgage rates are at historic lows.

The current average rate for a 30 year fixed loan is 4.87 percent, according to Bankrate.com. That’s the lowest rate for the 30 years since Bankrate started keeping track 25 years ago.

Even jumbo loan rates-loans for more than $417,000-have fallen. The 30-year fixed jumbo loan is at an average rate of 4.5 percent, down from nearly 6 percent at this time last year.

“It’s the best time in our generation to buy,” says Mark Zandi, chief economist at Moody’s. “It may be the best time in any generation. Mortgage rates are so low and with homes prices down and lots of inventory, you couldn’t pick a better time to buy or re-finance.”

Europe’s debt crisis is behind the drop. Nervous investors are flocking to the security of US Treasurys, which pushes down their yield and influences a host of consumer interest rates-including those on mortgages.

The decline is also good news for homeowners looking to refinance, particularly those who owe more on their mortgage than their house is worth.

“There’s a tremendous window on re-financing,” says Greg McBride, chief economist at Bankrate.com. “That’s particularly true for people who can take advantage of the government’s Home Affordability Refinance Program (HARP)-which allows home owners to refinance into low mortgage interest rates even if they’re property value has gone down.”

HARP, which was due to end at the end of this June, now runs through June of 2011.

“Think of the benefits if you buy or refinance now,” says McBride. “Locking in now at the lower rates means more more bang for the buck and more breathing room for homeowners when it comes to payments.”

But the decline in rates probably won’t last long, analysts say. So homeowners need to move fast.

“I think they won’t last much longer than a month or two at the best,” says Lawrence Yun, chief economist at the National Association of Realtors. “I can see them going up to 5.5 percent by the end of June if not sooner.

Read more at http://finance.yahoo.com/

As a Reno/Sparks real estate professional; I encourage all questions and comments, on the Reno/Sparks real estate market or any of the articles posted in this blog.  I can be reached by email at  chance at ballard-company.com