In order to make HUD-1 closing statements more transparent for the parties involved, the Department of Housing and Urban Development (HUD) has made a number of changes that will take effect on January 1, 2010. HUD has tried to protect consumers, particularly buyers, during the course of dealing with their lenders and at the closing table. Here are some of the changes: 1) Mortgage brokers will need to calculate their commissions from their lenders (known as yield-spread premiums) as part of the loan origination fee. HUD hopes that by integrating the yield-spread premium into the origination fee, brokers will be less likely to place their customers into loans at the high end of the interest-rate spread. 2) Lenders will have to complete a new good faith estimate form, which will be three pages long as opposed to the current two-page form. 3) Origination fees and transfer taxes on the HUD-1… read more →
Many lenders will work with homeowners who are unable to pay their monthly mortgage. If you are having difficulty making your mortgage payment, you might want to consider trying to get a loan modification. Modifications come in many forms — you might get a temporary or permanent payment reduction, an interest rate reduction, temporary abatement, extension of the payment period, or some sort of mixture of these options. However, the bottom line is that help may be available to you; most importantly, you may be able to keep your home. Of course, getting your lender to negotiate their loan with you is not easy. Many lenders won’t discuss the matter with you until you’ve missed a number of monthly payments. You may not want to get yourself in that situation for any number of reasons — it will affect your credit, you feel it will tarnish your name, you are… read more →
In today’s real estate market, more and more contracts tend to fall apart, often because the buyer is unable to procure a mortgage on satisfactory terms, if at all. As the lending market gets tougher, I hear the following questions a lot from buyers: “Is my earnest money protected? Can I get my earnest money back?” I also hear the inverse from Sellers: “Can I keep the earnest money?” A standard real estate contract will set forth various contingencies that the parties must meet in order to close. One of these contingencies is the mortgage contingency. For a detailed explanation of what a mortgage contingency clause is, click here. To see how the mortgage contingency affects your earnest money, keep reading! If the buyer is unable to procure a mortgage commitment stating that the lender’s various conditions have been met, and the buyer thus does not have a loan, then… read more →
Short sales may be simple or complex, but they are almost always time-consuming. If you are considering selling your home through a short sale, there are certain things you can do to expedite the process. First and foremost, call your lender. Most large lenders have a division or an outside company that is handling short sales for them; your lender should be able to put you in touch with the right people. Some banks will send you their forms, etc. right away, open a file for you, and then hold it until you have an offer. Other banks will want you to have a contract in hand before starting the process. Regardless of which route your bank takes, you should assemble documentation to support your short sale right away. If your attorney is negotiating the short sale for you, he or she will want these documents up front so they… read more →