Subprime Loans and Rising Foreclosure Fiasco

There are still major problems happening in the US real estate market with foreclosures. According to CNNMoney.com, foreclosures have jumped 90% over last year. To blame is the slowing real estate market and the subprime lending nightmares.
According to RealtyTrac, the US foreclosure rate was one foreclosure filing for every 656 U.S. households during May.
These problems, and numerous others, are encouraging the Federal Reserve to tighten up regulations to slow things down. According to CNNMoney.com, there are four areas where the government and those highly affected by these problems are focusing right now:

1. Prepayment Penalties- Where borrowers are stuck with high interest rates or fees because they can’t afford to pay the penalties involved to refinance or sell to get lower rates and fees.
Insurance and Taxes Not in Escrow- When neither of these is being paid out of escrow and money gets tight, borrowers stop paying these. Taxes get behind and insurance lapses, and the lender is left with the consequences.

2. “Stated” or “No Doc” Loan Programs- These encourage borrowers to participate in what many call “liar loans” where income and assets are exaggerated.

3. Poor Judgement on the Borrower’s Payment Ability- Because most brokers do not have to worry about what happens after closing, deals are made that should not be happening in order to make a commission.

4. Lenders have already begun tightening things up and it’s gotten harder and harder for homeowners to get a good loan on a property, never mind your average investor.

Places To Get Help For Your Small Business

Most Municipal governments have Small Business Development Centers. They also have Minority and Female Based Business Advisory boards. These are great resources for advice from a city/county/state perspective. There are resources for submitting bids, finding open requests for projects, etc... and there are possibly grants to grow your business, expand your business and hire particular types of employees.

They also have funds for renovating certain properties in central business districts or historical districts.
What you can also find there is contact information for the local chapter of Service Corps of Retired Executives (SCORE). It can be a great and inexpensive way to get some consulting from retired accountants, business managers, attorneys etc...

But where do you go when you're 2-3 years into your business and in RAPID GROWTH Mode??
This is when you just don't have time to make 100 appointments with government employees to get referred to the next appointment. This is the time when your business relies on YOU BEING ON THE JOB.

This is when you NEED to start creating your team of trusted business advisors.
Here are the basic needs and why:

1) CPA/Bookkeeper - in Rapid Growth Mode, your business is no longer in a place where you should be doing your own taxes or bookkeeping without at least professional guidance. You could have a part time bookkeeper or have a CPA set up your Quickbooks... but they need to be part of your planning and advising at this point.
Strategise for tax savings NOW!

2) Mortgage Broker - in Rapid Growth Mode, your personal and business finances are especially important. Now is the time to make sure that you're leveraged properly. You want to make sure your personal mortgage is in order. Now is NOT the time for a 15 year mortgage, a bi-weekly payment plan, or anything that ties up your money from your use. Remember - you might think that putting it in your business is an expense - but it is actually an investment and you can regain that money down the road with interest as a loan!

Speaking of which... now is the time you're probably going to start looking for new space. You're bursting at the seams and need to find something - rent or buy is your decision and your mortgage professional will be able to look at your finances and see if now is the time. If it is, he/she will be able to show you how best to finance the transaction with the LEAST STRESS on you and your business.

3) Realtor - when bursting at the seams, a Realtor can help identify the right space for you while you're working. Don't worry about shopping, calling property owners, landlords etc... contrary to popular belief, it does NOT cost more to use a Realtor in a real estate transaction.
Whether renting or buying, your realtor partner will be there to help you find the right place in the most efficient manner!

4) Attorney - hmmm...lots of people would be confused as to why I would leave this person til last. You have to have an attorney one way or another to make sure you're legally sound. I just don't push this one to the front because there are so many other professionals up there that cover a lot of the same bases. Sure, they don't do what an attorney does ... but an attorney can't do what they do either!! for example ... Attorney's can close loans, but not pick them!
Your attorney should welcome the opportunity to work hand in hand with the rest of your team. Then you'll be getting the best overall legal advice.

5) Personal Banker - if your bank doesn't know who you are or what you do... then it is time to find a smaller bank that caters to your needs as a small business owner. Any of your other professionals should know some of these people... they're not advertising like the big banks - but they will treat you better.

These are also the people most likely to help you with financial issues outside of your mortgages like merchant accounts, operating capital lines of credit, money market accounts, deposit accounts... they will also help you keep your books in good order! Sure... they'll do your mortgages too, but they will only have a few specialty loan programs so they won't be able to help you with ALL your needs.

When you've outgrown the small business groups and are ready to step into the big leagues, you probably don't even have time to do so without some major overhauling of your schedule! It will be well worth it, though to focus on identifying at least one of the first ones... they'll be able to refer the rest of the team with professionals they know, trust and work with regularly.
A good team of professionals at your service will not only save you time and money.... but grow your business for you!

Sound advice do take and cherish it.

read more here http://activerain.com/blogsview/96584/Small-Business-Real-Estate

Real Estate Agents vs Snake Oil Salesman

“‘We’re in a real estate recession,’ said David Lereah, chief economist for the National Association of Realtors, who surprised many this week when he announced he would leave the Chicago-based trade group on May 19. ‘I’m projecting the first [nationwide] price drop since the Great Depression,’ he said. ‘We’re going to have negative home prices in 2007.’”

“‘He promotes housing,’ said Washington economist Dean Baker. ‘Certainly, people who were making decisions to move, they either heard David directly or from someone who heard from David that home prices will never fall, don’t worry, the market will stay strong. So they paid too much for a house.’”
“Lereah, in an interview Wednesday, shrugged off the criticism. ‘I feel confident I did a very good job forecasting and reflected what was happening in the marketplace,’ he said.”

It’s hard for me to have a whole lot of contempt for Lereah.

After all, he was just doing his job — which was NOT to give a fair and unbiased assessment of the RE market. His job was to be the mouthpiece for a group of people who sell houses for a living, and to maximize these people’s profits by getting Americans to buy and sell as many houses as possible at the highest possible price.

And you know what? He did a pretty good job.
For someone whose paycheck was signed by a group of house-sellers, what else would you have expected him to do? What would have been a desirable outcome? So he says prices are too high back in 2003, then he gets fired and the NAR puts someone more accommodative in, so now what?

It just goes to show Beware of Snakeoil Salesmans. If it sounds too good to be true, it probably isn't. Do your OWN homework. Crosscheck even your real estate agent as they want to get paid as well, no matter how or who is doing the paying.

No Housing Bubble HUH?

I wonder where is this author now? I also wonder how much money he made off of those who believed him, when he said, "there was no housing bubble." I wonder.

Kevin - If you look in today's online version of the WSJ you will also find an extensive article titled "What housing bubble?" You can read the article but the author's basic conclusion is pretty scary.

-Minyan JB

Thank you for the link MJB. The author's main thesis is: "There is no housing bubble." Among the evidence he uses to support this conclusion are the fact that he believes the strong housing market is a function of a variety of factors with "real" economic underpinnings: low interest rates, job growth, parental contributions, optimistic view of future earnings power. He goes on to cite three "myths" of housing: too much capacity, risky mortgage products fueling appreciation, and speculators driving prices higher.

All of this is basically a way of echoing the popular denial-based saying that, "What is, is." Blind acceptance. Sure, the economic underpinnings cited by the author may be "real" in the sense that they exist, but this ignores the reality of why those "real" economic underpinnings exist.

read more here http://www.minyanville.com/articles/index.php?a=8098

People Falling Deeply into Debt

I recently had the opportunity to view “Maxed Out,” a feature-length documentary directed by James Scurlock.


There are many debtors who are generally innocent, who got tripped into debt by sophisticated and despicable measures used by disreputable creditors, with Congress turning the blind eye.
On the issue of irresponsible creditors, Exhibit A, featured in the movie, was a severely disabled woman who lived in a nursing home. She had no income, but was offered $30,000 in credit through the mail.

Here’s what else I learned from Scurlock’s movie:
1. Credit card companies make 4 billion offers of credit cards every year. Fees for these cards have risen 160% over the past five years. The average household now bears over $9,000 in credit card debt, costing the average household $1300 in interest every year. One analysis of people going through bankruptcy showed that for each dollar in principle borrowed, the average person going through bankruptcy owed two dollars in interest and fees.

2. What is overall problem? According to Elizabeth Warren (a professor at Harvard Law School and a recognized expert on the issue of consumer debt) we are in great danger of turning our nation into a two-tiered society, and none of us is completely safe. A single tragedy can turn any middle-class person into a poor person. Warren cautioned that there is a new type of credit card coming out that is linked to the debtor’s pension fund. If one falls behind on the credit card, the company has access to one’s retirement funds.

3. Many people are driven into debt for honorable reasons. A pawn shop owner featured in “Maxed Out” mentioned that 15 different families came into his store to hock their personal belongings so that they could afford to send body armor to relatives serving in Iraq. In other words, not all debtors are irresponsible. Many of them were thrown into debt because of an illness or the sudden loss of a job. Nonetheless, many people take the view that all debtors are irresponsible. “Maxed Out” showed that the people filing for bankruptcy were tarnished as undeserving of help by President Bush and members of Congress who voted for the Bankruptcy “reform” bill. The bottom line regarding blameworthiness? The truth is that there are debtors who are blameworthy and others who aren’t. As I’ve written before, the willingness to group all desperate debtors together is a sign of a feebleminded intellect.

4. According to Elizabeth Warren, the big banks admitted to her that they don’t want to cut out their most marginal borrowers (those who struggle the most to make the payments). They want to continue handing credit to them. Why? These desperate people are the banks’ most profitable customers. These are the people who end up paying enormous amounts to the banks in fees and penalties, as well as interest payments.

5. Credit card companies can’t wait to offer credit cards to college students who are living away from home for the first time. No job? No problem. Many of these kids run up thousands of dollars of debt quickly, paying off the debt by taking out many new credit cards or by getting help from their families. The film features interviews with the sad mothers of two separate students who had become so desperate at the credit card debt they were amassing at college that both of the students hanged themselves.

6. Our national financial health resembles the financial health of our families. Each American families share of our national debt is now $90,000. By 2005, the United States government had spent every cent of the Social Security trust fund.

7. Once you’re in debt, beware that credit reporting companies are not well motivated to fix inaccuracies in your credit report. Credit reports are rife with errors. Many an innocent person has had his or her credit tarnished by errors that credit reporting companies are ill-motivated to correct.

After the screening of the movie, several consumer attorneys spoke to the audience at the theater (I viewed “Maxed Out” in St. Louis).

One of the speakers, Professor Mike Greenfield, raised the issue mentioned at the top of this post: “Shouldn’t consumers be paying their debt?” The general answer, in his opinion, is “yes,” but the easy availability of credit makes the issue more complex.

For attorneys representing debtors, there is no legal basis for arguing that aggressive marketing by creditors can serve as a defense to the debt. On the other hand, our lawmakers formerly believed in interest rates caps, but no longer. There are now “no limits on what a credit card company can charge, according to Congress.” We need to start having that conversation again, according to Professor Greenfield, and to start re-considering limits on interest rates and fees, as well as techniques that we should allow for hooking potential debtors. We need to consider, on a national level: “What is a fair and reasonable fee?” Greenfield reminded the audience that, for payday loans, consumers can be charged 500% annual interest or more.

Another attorney on the panel, Diane Thompson pointed out that there is a scientific basis for a cognitive obstacle experienced by many people who simply don’t understand the meaning and consequences of borrowing money over time. It is this cognitive inability to understand that allows people to refinance into new subprime adjustable rate mortgages (ARM’s) that are much more dangerous than the ARM’s of previous years. In the new explosive versions of ARM’s, the interest people pay on their home loan does not potentially rise or fall depending upon the cost of credit. In these new explosive ARM’s, the interest rate can only go up, and it can do so dramatically in a short period.

What is that cognitive limitation? It was discussed in detail in the bestseller written by John Paulos, Innumeracy: Mathematical Illiteracy and Its Consequences (1988). Paulos introduced the term “innumeracy” to refer to “an inability to deal comfortably with the fundamental notions of number and chance.” Paulos bemoaned that innumeracy “plagues far too many otherwise knowledgeable citizens.”

On the issue of consumer debt, also note that Danny Schechter has also produced movie “In Debt We Trust.” The following excerpts are from a review of Schechter’s movie:
massive market meltdown, a collapse of the sub-prime mortgage market, bankruptcies by leading financial lenders, billions of dollars in losses by top banks and financial lenders, and predictions of more pain to come for nearly two million Americas facing foreclosures.
Centuries ago, we had debtors prisons. Today, many of our homes are similar kinds of prisons, where debtors struggle for survival with personal finance pressures.

It is urgent that our media push these issues from the business pages to the front pages and humanize them so we can try to wrestle our lives back from the ravages of a relentless debt machine.

Here’s another predatory lending issue: Payday lending. See if you can pick the bad guy in this revealing debate, Mike Calhoun, Center for Responsible Lending or Lyndsey Medsker, Community Financial Services Assn.. Go to C-Span, then put the word “Medsker” into the “video search” box. Look for the show dated, 3/24/2007, Then click on this 31 minute video For more on payday lending, see the Center for Responsible Lending. The CRL focuses on many other debt issues too. Here is what CRL predicts as the result of the onslaught of subprime lending over the past few years:
finds that despite low interest rates and a favorable economic environment during the past several years, the subprime market has experienced high foreclosure rates, and we project that one out of five (19.4%) subprime loans issued during 2005-2006 will fail.

The reason for this net loss? From 1998-2006, only 9% of subprime loans went to first-time homebuyers, but over 15% of subprime loans ended (or will end) with borrowers losing their homes through foreclosure. Why should we care about foreclosures? First of all, many of the people losing their houses have been the victims of predatory lenders “flipping” real estate loans. Second, Here’s what happens to neighborhoods where foreclosures are common:
People living near to these homes in and must suffer from the conditions. Foreclosed homes fall into disrepair and are abandoned. They become magnets for a host of problems and dangerous conditions. According to the this website from the City of Buffalo, such neighborhoods
become locations for people to hang out free of charge, such as gangs, prostitutes and squatters. As such there is likely to be drug activity, violence, unsafe conditions, unsanitary conditions such as rodents, and arson.

Flipping scams lead to high foreclosure rates and abandoned homes and thereby destroy neighborhoods. Abandoned homes are at a greater risk of a variety of dangerous conditions. Arson, vandalism, illegal activity, unsanitary conditions such as rodents, stripping and selling of housing materials and demolition cost the City, and ultimately taxpayers of Buffalo, a high cost in providing these services.

What is true in Buffalo is true everywhere. Irresponsible lenders (and those debtors who are irresponsible) are throwing entire neighborhoods into blight. They are exploding the dreams of many people who would like to own their own homes. The irresponsible lenders have been getting away with what they are doing thanks to winks and nods from Congress and payola to Congress.

All of this is so very depressing.

But back to the screening of Maxed Out in St. Louis. According to the panel that spoke after the movie, the many horrible examples of predatory lending leading to millions of people drowning in debt offers a thin silver lining. That silver lining is the new attention that is now being paid to these predatory lending issues by some media sources.

HELOCS

Characteristics of HELOCs


HELOC stands for home equity line of credit, or simply "home equity line." It is a loan set up as a line of credit for some maximum draw, rather than for a fixed dollar amount.

For example, using a standard mortgage you might borrow $150,000, which would be paid out in its entirety at closing. Using a HELOC instead, you receive the lender’s promise to advance you up to $150,000, in an amount and at a time of your choosing. You can draw on the line by writing a check, using a special credit card, or in other ways.

Most HELOCs are second mortgages. An increasing number, however, are first mortgages, as yours would be if you used it to refinance your existing first mortgage. Using a HELOC as a substitute for a first mortgage is risky, for reasons discussed in a moment.

HELOCs have a draw period, during which the borrower can use the line, and a repayment period during which it must be repaid. Draw periods are usually 5 to 10 years, during which the borrower is only required to pay interest. Repayment periods are usually 10 to 20 years, during which the borrower must make payments to principal equal to the balance at the end of the draw period divided by the number of months in the repayment period. Some HELOCs, however, require that the entire balance be repaid at the end of the draw period, so the borrower must refinance at that point.

Interest on a HELOC

Because the balance of a HELOC may change from day to day, depending on draws and repayments, interest on a HELOC is calculated daily rather than monthly. For example, on a standard 6% mortgage, interest for the month is .06 divided by 12 or .005, multiplied by the loan balance at the end of the preceding month. If the balance is $100,000, the interest payment is $500.

On a 6% HELOC, interest for a day is .06 divided by 365 or .000164, which is multiplied by the average daily balance during the month. If this is $100,000, the daily interest is $16.44, and over a 30-day month interest amounts to $493.15; over a 31 day month, it is $509.59.

APR on a HELOC

Don’t compare the APR on a HELOC with the APR on a standard loan because they mean different things. The APR on a HELOC is the interest rate, period. Among other things, it does not reflect points or other upfront costs, as the APR on standard loans does. Requiring lenders to show the interest rate on a HELOC twice is a strange way to protect borrowers, but there it is.


Advantages of HELOCs

HELOCs are convenient for funding intermittent needs, such as paying off credit cards, making home improvements, or paying college tuition. You draw and pay interest on only what you need.

Upfront costs are also relatively low. On a $150,000 standard loan, settlement costs may range from $ 2-5,000, unless the borrower pays an interest rate high enough for the lender to pay some or all of it. On a $150,000 HELOC, costs seldom exceed $1,000 and in many cases are paid by the lender without a rate adjustment.
Some HELOCs are convertible into fixed-rate loans at the time of a drawing. This is a useful option for borrowers who draw a large amount at one time.

The Risks of a HELOC

The major disadvantage of the HELOC is its exposure to interest rate risk. All HELOCs are adjustable rate mortgages (ARMs), but they are much riskier than standard ARMs. Changes in the market impact a HELOC very quickly. If the prime rate changes on April 30, the HELOC rate will change effective May 1. An exception is HELOCs that have a guaranteed introductory rate, but these hold for only a few months. Standard ARMs, in contrast, are available with initial fixed-rate periods as long as 10 years.

HELOC rates are tied to the prime rate, which some argue is more stable than the indexes used by standard ARMs. This is an illusion, however, arising from the fact that the prime rate doesn't change from day to day. In 2003, it changed only once, to a low of 4% on June 27. However, in the next three years it changed 17 times, by .25% each time, reaching 8.25% on June 29, 2006. In 1980, it changed 38 times and ranged between 11.25% and 20%.

In addition, most standard ARMs have rate adjustment caps, which limit the size of any rate change. And they have maximum rates 5-6% above the initial rates. HELOCs have no adjustment caps, and the maximum rate is 18% except in North Carolina, where it is 16%.
Note: Some HELOCs are convertible into fixed-rate loans at the time of a drawing. This is a useful option for borrowers who draw a large amount at one time.

HELOC rates are tied to the prime rate, which some argue is more stable than the indexes used by standard ARMs. In 2003, this certainly seemed to be the case, since the prime rate changed only once, to 4% on June 27. However, as recently as 2001, the prime rate changed 11 times and ranged between 4.75% and 9%. In 1980, it changed 38 times and ranged between 11.25% and 20%.

In addition, most standard ARMs have rate adjustment caps, which limit the size of any rate change. And they have maximum rates 5-6% above the initial rates, which puts them roughly at 8% to 11%.
HELOCs have no adjustment caps, and the maximum rate is 18% except in North Carolina, where it is 16%.


Don?t compare the APR on a HELOC with the APR on a standard loan because they mean different things. The APR on a HELOC is the interest rate, period. Among other things, it does not reflect points or other upfront costs, as the APR on standard loans does. Requiring lenders to show the interest rate on a HELOC twice is a strange way to protect borrowers, but there it is.
October 20, 2003

Federal Foreclosure Study

WASHINGTON, April 25 (Reuters) - Two leading members of the U.S. House of Representatives Wednesday sought a federal study of the current problems in the subprime mortgage sector and an increase in the rate of home foreclosures.
Failed loans to subprime borrowers with damaged credit have pushed up mortgage delinquency and foreclosures in recent months.

The study should examine what caused the surge in foreclosures, what communities have been hardest hit and how “the recent rise in foreclosures compare to the scope of foreclosures in previous housing downturns,” according to a letter seeking the study.
The study should also consider what regulators did to prevent the current problems and what impact “17 consecutive Federal Reserve interest rate increases had on borrowers with adjustable rate mortgages,” the letter states.

The report was requested by Rep. Barney Frank, chairman of the House Financial Services Committee and the top-ranking Republican on the panel, Spencer Bachus of Alabama.
The Government Accountability Office, a non-partisan research agency, typically fulfills such requests that come jointly from leading Democrats and Republicans.

Frank, a Massachusettes Democrat, and Bachus wrote that they are “developing workable solutions to the current problems in the subprime mortgage market… and our Committee will be considering legislation on the subject in the coming months.”


I am not surprised of the rising interest rate during that time. The Federal Reserve was complicit in the subprime mortgage collapse. The Federal Reserve was trying to get more "profits" to the banking industry. The only problem the Federal Reserve didnt know where the line of collapse factor or the Federal Rserve chose to ignore it.

Squeeze as much out of the little guy as possible to get more profits to the banks and the top 1% of the rich rich folks in America. So much of what the Federal Reserve has done is so much like the ways of the Bush Administration.

A Company's Paydex

A Companies Paydex score is its heartbeat. A small business owner should know the Paydex score of each entity they own. Many people dont even know that their business has a Paydex- because they have never looked! People in the real estate industry, for example, can have many different corporations- and each one would have its own Duns number and Paydex Score. Dunn & Bradstreet, the main business Credit Reporting Agency, gives this cryptical definition: "The D&B PAYD

Prepare for a Real Estate Loan

Besides your credit score and the other five qualifications you must meet to finance a real estate mortgage loan, you need to gather papers and documents. Speed up your financing and make your life easier. Organize your papers into a three-ring binder or file system. You wont need all of the documentation listed below. However, the more information you gather, the more likely you will be to get the best loan rates. Keep in mind that all of these documents may not be needed for all types of loans.
Documentation Required for Real Estate Mortgage Loan
Whether you want to buy your first home or many investment properties to build wealth, this checklist will help you save money on loan costs.

1. Proof of Income Include copies of your last two pay stubs or other proof of employment and income verification. If you are receiving fixed income like trust income or social security, then include the beneficiary letter stating how much you get.
For self-employed, you will need to prove that you have been in the same line of work or business for two or more years. If self-employed, show a copy of your business license for two or three years to show you have been in that business for at least two years. If you dont have these, then show whatever you do have to evidence you have been in business for at least two years in the same line or business field. You may also ask a CPA to amend your income tax returns for the previous two years and then write a letter verifying that youve been self-employed for at least two years.

2. Tax returns
Provide tax returns for the last two years or at least the last two years of W2s and/or 1099s if you dont want to disclose tax returns. If youre self-employed, the mortgage company may require your personal and business tax returns for the previous two years and your companys year-to-date Profit and Loss Statement. If you own a business, you may need a Financial Business Statement prepared by an accountant.
3. Bank account records Gather your account numbers, address of your bank branch, along with checking and savings account statements for the previous two-to-twelve months. You only need the last two months bank statements in most cases. Most lenders will only need twelve months bank statements when you are trying to get a “full doc” loan (with the best rates) instead of stated income for a self-employed individual. Talk to your loan officer about whether twelve months of bank statements will help you get a better rate. Include all bank accounts, savings accounts, retirement accounts, and investment accounts. Include any account that you sign for, even if your spouse also signs on the account, and even if your spouse does not apply for the loan with you. Financial assets like these are considered important by lenders as a reserve, particularly now that property values are not rising as quickly.

4. Driver’s license and social security card photocopies

5. Proof of housing payments
Whether you own or rent, you must document your housing payments. Credit reporting agencies list mortgage payments. Provide copies of your mortgage statements or a copy of your lease agreement with twelve months of checks showing rent payments on time. If you rent your home from a professional management firm, they can verify that you have paid rent on time. If you rent from a private party, most lenders (though not all) will require you to show canceled rent checks for twelve months.

6. Major assets (other real estate owned, automobiles, boats, antiques, stocks, etc.).
You dont have to include individual stocks if you own shares in a mutual fund or hedge fund. Just provide the latest fund statement. Include vested cash value of whole-life or universal life insurance policy, if any. (Cash value is not the same as the face value. Cash value is what you would get from the insurance company right now, if you surrendered the policy while still alive.) If there are antiques or other collectibles, provide only the total collection value; you dont have to itemize.

7. List of debts (car loans, furniture loans, student loans, and credit cards)
Even though the debts will be on the credit report, you must be aware of all of your debts so that you can tell if the credit report has mistakes. Include any debts that you have co-signed for, like when you co-sign for a childs car.

8. Divorce settlement papers, if applicable, no matter how far back in time

9. Delinquent or inaccurate debts or credit report items
If you paid a collection, judgment or lien (especially a tax lien or other lien against your house), include proof of payment.

10. An irrevocable gift letter if you are receiving a monetary gift from a relative.

11. Purchase agreement (for new purchase).
Provide a copy signed by both parties, including all the signed disclosures.

12. Items needed for a refinance
Furnish copies of your note and deed of trust, home insurance declaration page, copy of your last property tax bill.
13. If you own investment real estate in your name, you need rental leases for each of your properties, plus the items listed in #12 for each of your properties.

14. Bankruptcy Supply all pages and schedules for any bankruptcy filing within the last seven years, and the discharge sheet, for any type of bankruptcy (Ch 7, Ch 11 or Ch 13). Bankruptcy must be discharged before the date of the loan application.

Preparation Leads to Financial Freedom
Talk to your loan officer to see which documents you need to copy and send. Prepare your credit and your real estate mortgage loan documents so you can buy your dream home and even multiple investment properties.


It goes without saying, Be honest and upfront. Nothing gets a denial fast and furious than exposed lies or deceptions.

Birmingham, Alabama's Real Estate Market Conditions

Market Conditionsby Realty Times Staff
Downtown Birmingham, Alabama, is seeing strong sales -- despite national housing reports that the market may be falling.
Perhaps strong numbers are related to the city being "ranked among the top 11 "Most Livable Communities" in America, according to the nonprofit organization, Partners for Livable Communities."
The "magic city" sees an average selling price around $158,000, with a market time of 107 days.
There is a 9.76 month supply of homes on the market. "With interest rates continuing to stay under 6.5 percent, and more homes on the market to choose from, now may be a good time to buy."
For information on your area, please click here.



It would work depending upon the goal of the buying or selling of the house. If one was doing a house flip, 107 days would eat into potential profits. If one had bought a larger house before selling the former home , then one is paying two morgages. If one has the time and money to languish for 107 days, then the real estate market is "fine".