Foreclourses has become the new real estate Four-letter word.

In March one in every 538 households in the U.S. received a foreclosure notice with Nevada (1 in 139 homes) leading the pack, followed by California (1 in 204 homes), Florida (1 in 282 homes) and Arizona (1 in 283 homes).

And the bad news is just everywhere...CNN, Fox News, USA Today, the Web, etc. etc.

To assist homeowners Real Estate Wiki (see previous entry on launch of the new wiki in real estate) has added a bunch of Frequently Asked Questions (FAQs) covering questions such as:

As promised, and actually required, by the Economic Stimulus Bill of 2008, FHA/HUD announced their new loan amounts this past week. The new FHA loan limits are based on 125% increases of each county's median price with a minmum of $271,050 and a maximum of $729,750.This one move will make it much easier for many who are burdened with an adjustable rate mortgage to refinance if their property has not appreciate much over the past few years.

New real estate wiki for real estate industry is launched. 

History of wikis in real estate
BiggerPockets (launched in 2006) claims to be the first real estate wiki but it unfortunately closed down in May 2007 due to lack of sufficient content.  Introduced shortly therafter, and still going strong, is InmanWiki (part of InmanNews, InmanTV and InmanBlog).  

America's Federal Bureau of Investigation (FBI) announced today that they are investigating 14 financial and mortgage companies for insider dealing and fraud as part of a criminal inquiry into the sub-prime crisis. The FBI suspects that the house price boom, once seemingly endless, encouraged mortgage lenders to take increasingly large risks, making loans to people with weaker and weaker credit histories as they sought new customers. 

Read the complete article here.

Last night CBS 60 Minutes reported on how the subprime loan crisis is shaking markets worldwide. The programs started by reporting that “It was another nervous week for the world's financial markets and for Wall Street. In the last six months, Americans have seen their investments shrink, their property values plummet, and the country edge closer towards a recession. At the heart of the problem is something called the subprime mortgage crisis, which began last summer and continues to ricochet through the economy. It sounds complicated, but it's really fairly simple. Banks lent hundreds of billions of dollars to homebuyers who can't pay them back. Wall Street took the risky debt, dressed it up as fancy securities, and sold it around the world as safe investments.

The number that caught my eye in The New York Times was $9.8 billion. But that staggering sum – the loss recorded by Citigroup – was just the start of the bad news. The fine print was a lot worse.

We all know the cause: Subprime. But if only it had been so good as the headline!

The real number was $22.2 billion – the amount Citigroup wrote off in “soured mortgage-related investments and bad loans.”

Let’s try to get our arms around these numbers by thinking not in terms of dollars, but of seconds. A second goes by pretty quickly, right? A few hundred have ticked by since I started writing this item. So intuition might tell you that any fifth grader would have lived at least a couple billion seconds.

Every year the RealSure team surveys the residential industry, seeks out any changes, analyzes new business models, interview hundreds of industry leaders, researches and reads thousands of articles and send out tens of surveys. Well the survey is currently underway and your opinions and comments will help provide a more accurate assessment of certain paradigm shifts that are currently occurring in the real estate industry.

Click Here to participate.

RealSure, Inc., publishers of the Swanepoel TRENDS Report is offering a bonus 10% savings as a thank you for participating in the quick 6- 10 question survey, depending on whether you are a broker or an agent. This is over and above the currently available 20% pre-publication discount for early purchasers.

There are difference aspects of the financial picture that are common in what makes a good mortgage loan. All of these elements have a degree of risk to the lender. Mortgage companies judge these risks and assign a credit grade to them. The higher the risk to the lender results in a higher rate to the borrower.

 

We will review the lenders’ point of view on the property itself:

 

The title to the property must qualify for the loan.

 

One of the largest costs when you buy or refinance a home is the title insurance premium. It is one cost that you won’t ever want to do away with because there are so many ways that title can become “clouded”.

I apologize that this posting is late. I thought it had been uploaded!

There are difference aspects of the financial picture that are common in what makes a good mortgage loan. All of these elements have a degree of risk to the lender. Mortgage companies judge these risks and assign a credit grade to them. The higher the risk to the lender results in a higher rate to the borrower.

We will review the lenders’ point of view on borrower assets:

What assets does the borrower have? Where did they come from?

Just about every single lender will want to see that they borrower has “reserves”. Reserves are additional funds, which can be verified prior to closing.

There are difference aspects of the financial picture that are common in what makes a good mortgage loan. All of these elements have a degree of risk to the lender. Mortgage companies judge these risks and assign a credit grade to them. The higher the risk to the lender results in a higher rate to the borrower.

The discussion below is for mortgage loans that are of the plain, vanilla variety; that type of loan that doesn’t have any special characteristics.

We will review those risks associated with how lenders view income now: