Until recently, when a potential lender evaluated your credit report, they could see whether you made payments timely and whether you had defaulted on any loans. Your lender could not figure out if you were a “revolver” or a “transactor”. What does the mean? Well, a “revolver” is a person who makes minimum payments on debts, such as credit card debt, and continues to roll the debt forward. A “transactor” is someone who pays off their bills – and we’re mostly referring to credit cards – in full every month. Basically, until recently, the lender could not tell if you were paying your credits cards in full every month, or just paying minimum payments. Analysis done by the credit industry suggests that transactors are less likely to default on mortgage loans. Effective June 25, 2016, though, things changed. Fannie Mae, who purchases many loans, required that mortgages presented to them… read more →
In March of 2010, Laura Kurtz borrowed $66,000 from ALSJ, Inc. against her single-family home in Lombard, Illinois. It was a one-year balloon mortgage that would eventually bear a 36% interest rate, and a late fee of $693. Ms. Kurtz made only six months’ of payments before defaulting, and by May of 2011, ALSJ, Inc. was already trying to foreclose her. The trial court agreed that Ms. Kurtz had defaulted on the mortgage, but the trial court also stated that ALSJ, Inc. had violated the Mortgage Rescue Fraud Act, that the mortgage was “facially outrageous” and that the plaintiff was aware that the loan was illegal. The trial court concluded that the Lombard home was “distressed property” and that ALSJ, Inc. had acted as a “distressed property consultant’ who was aware that Ms. Kurtz occupied the home, all in violation of the Mortgage Rescue Fraud Act. The mortgage was rescinded.… read more →
Bankrate recently conducted a survey, and guess what they found. They determined that Americans who have money to set aside for the next ten years would rather invest in real estate than in anything else. 25% of Americans chose real estate as the preferred long-term investment over the alternatives, although savings accounts and CDs came in a close second at 23%. 16% of Americans said they would invest in stock, another 16% said they would invest in precious metals like gold, and only 5% chose bonds. The higher the income, the more likely the individual was to choose real estate. 33% of people with income over $75,000 chose real estate, while only 23% of people who earn between $50,000 and $74,000 preferred real estate over the alternatives. For a long-term investment, real estate does seem a safer bet than the stock market, which can hit rapid highs and lows. Real… read more →