Bad Credit? No FHA Loans for You

Mortgage loans from the Federal Housing Administration will be discontinued for clients who have unsettled their credit history starting July 1 of this year. This new regulation from the agency will be a safety measure against people who might be unable to pay their loans due to several debts like from credit cards, health related bills, car loans and other liabilities.

This policy will force clients who have not paid their dues of $1,000 or above to clear out their current liabilities first, which is very crucial. The company was supposed to adopt the policy starting April 1 but the date was moved.

However, clients who have been proven to be victims of identity theft or scams will be exempted from the new rule. Those who suffered financial crisis due to emergencies, accidents, joblessness and divorce may be given a loan provided they issue a waiver to the FHA.

This policy may decrease the number or qualified clients to a loan, however it is an action that the agency must take in order to prevent the further collapse of the housing business.

Though this new regulation will be beneficial for the housing businesses, it will not be so beneficial for about 35% of clients who are suffering from financial crisis. This is based on a 2011 study that reported 1 out of 7 citizens are struggling to pay their bills on time, furthermore about 27% of student aids given by financial intermediaries are not paid past the 30 day dude.

Even if financial and economic crisis hit, you should not be taken aback nor be demoralized. You should not allow debt to further ruin your life, take measures to improve your financial standing.

These are the ways you can do that:

Attend the credit seminars given by the Consumer Credit Counseling Services. This will show that you are making the effort to rehabilitate and alleviate your credit status.

Pay off your current balances and update your records. Paying debts will not be enough. It is important to monitor your credit history, in case errors have been committed.

Keep caution, more and more individuals are taking advantage of people who plan to rehabilitate their credit. There are some agencies or people who offer to fix your credit score for you in exchange of a very high amount of money, but these deals often end up as scams and the credit remains unchanged.

Always remember that there is no shortcut to success. Recovering from bad credit requires hard work and perseverance. Train yourself to be financially wise; learn how to plan and follow that plan in order to succeed.

Habitat for Humanity Provides Home for Families

Standing in front of his newly built home is Jesse Rasimas. He is so thankful for the organization which helped him and his family to acquire a new single-storey house.

Jesse and his wife, Angela, and two children, Kara and Jaiden started moving on Sunday into their new home at 112 Madison St. The home has a total area of 1,100 square feet. It is the 18th home which Wyoming Valley for Humanity constructed. Wyoming Valley for Humanity is a nonprofit organization and it will start to construct its 19th home starting Monday.

Their transfer to the new home kicked off with a cake, a basket full of cleaning supplies and a book for home decorating. Prayer and dedication was done by Rev. Will Haperman. Malcolm Williams, president of the Habitat Board of Directors gave the house key to the Rasimases.

The house has three bedrooms, an off-street parking, living/dining room which is very spacious. Whirpool donated the stove and refrigerator in the new home. Kara’s bedroom is painted in purple and the room next to it is her brother’s bedroom.

Karen Evans Kaufer, the Executive director of Habitat said she was so impressed with the cooperation of the volunteers and the Rasimases.

Jesse shared how he got the home. He said that he saw in a newspaper that Habitat for Humanity is building a home and it is looking for a family fit for it. He applied for it and with the help of Tracey Williams of Habitat he went through the process. The family invested 400 hours in the program in order to build the house. They were at the site every Saturday for several months for the house construction.

Jesse said that the labor for his new home costing $55,000 was through the efforts of volunteers. Materials were purchased at a discount. The term of payment is 20 years with no interest. The monthly payment is only $35 more than his payment when he was renting.

The main purpose of the program of Habitat for Humanity is to help people who could not make a house mortgage because of bad credit.

According to Kaufer, Habitat is preparing to construct another house next to Rasimases and it is looking for a qualified family for the next house. She said that they are building a house one at a time.

Homes Act to Provide More Affordable Housing in California

The state leaders of California are discussing whether or not they should tax homebuyers to be able to provide more affordable housing for those who cannot buy or even rent a house.

One-third of homeowners in the United States have more mortgage debts than the cost of their houses. These families are drowning in debts and having problems with their housing.

When a family loses a house to the bank, then they begin to compete with other families in renting apartments or small houses, which have limited living space. There is a one in a million chance that these families rent a good apartment considering the fact that they most likely have poor credit and no savings left.

California’s state policy makers know that their constituents still cannot afford to buy a house. As a result of the elimination of Redevelopment Agencies, $1 billion was deducted from the funds for annual affordable housing. Also, this caused Californians who earn a small income to struggle from finding an affordable housing that is adequate for their small budget.

Now, there is a bill called Housing Opportunity and Market Stabilization Act (HOMeS Act) or also known as SB 1220. This bill suggests a $75 addition to all real estate transactions in California, and the earnings would be used to fund affordable housing.

This bill is criticized by many and they say that the $75 could damage California’s weak housing market.

Despite criticisms, the $75 would actually accumulate and reach $400 million to $1 billion annually. Consequently, this could already finance a lot of houses to be given to families and individuals who earn little or who have no homes.

Over the years, Californians have been considered as trendsetters of the state because of, for instance, living a healthy lifestyle or taking care of the environment. Now, California might make a new trend in helping its constituents through providing more affordable housing.

Commercial Mortgages Slowing Down

According to reports last week by Mortgage Bankers Association, despite the credit crisis and recession, loans from commercial real estate have held up better compared to loans from banks and thrifts.

In the previous year, banks and thrifts charged off 0.8% of commercial mortgages and 0.7% of multifamily mortgages as bad debt.

The charge-off rate was almost one-half of the rates for all loans and leases held by banks and thrifts, which is 1.5%.

According to Jamie Woodwell, vice president of the commercial real estate research, for the banking sector or economy as a whole, commercial mortgages have showed to be neither ‘the next shoe to drop’ nor a ‘ticking time bomb’.

At the last part of 2011, commercial loans and multifamily loans by banks and thrifts had a delinquency rate of 3.5%, which is a decrease from the highest rate in quarter three of 2010 of 4.4%. On the other hand, residential mortgages had a delinquency rate of 7.7% in the last part of 2011.

As said by Jim Chynoweth, managing director of CBRE’s Albuquerque, vacancy rates were kept from elevating by the lack of new construction and it came to the extent that there were sudden rises in commercial mortgage default. Moreover, this was said to be the worst of commercial and multifamily mortgage defaults.

Other main investor groups in commercial and multifamily real estate had the following delinquency rates:

From 0.3% in the first half of 2010, only 0.2% of loans by insurance firms were two months or more late on payments.

From 9% in quarter two of 2011, only 8.6% of loans maintained in commercial mortgage-backed securities were a month or more delayed on payments.

From 0.4% in quarter one of 2011, only 0.2% of multifamily loans by Freddie Mac were two months or more late on payments.

From 0.8% in the first half of 2010, only 0.6% of multifamily loans held by Fannie Mae were two months or more delayed on payments.

Check Your Credit Rating Before Getting a Mortgage

Tara Lynn Wagner said that it is very essential for you to determine your credit score before securing a mortgage loan if you want to avoid paying more money.

Most people especially women know their Social Security number, their weight but when you ask them about their credit scores, they are not aware of it.

CEO Amanda Steinberg, founder of Dailyworth.com, said that loans are needed to buy a vehicle or a house because it is quite impossible to obtain them in cash. But in order to get the best term, it is important that consumers should know their credit scores before securing a mortgage. She said that it might cost you to pay tens of thousands dollars more if you do not check your credit rating before securing a mortgage.

To illustrate her point she cited this example. There were two women who wanted to secure a mortgage amounting to $200,000. The first woman was Susie. Susie’s credit score was 740 points. Her high rating qualified Susie to get a 30-year mortgage at 3.9 % interest. She was paying $953 per month. The second woman was Jane. Jane had a credit score of 640 points. She was also granted a 30-year mortgage at 4.75 % and paid $1,043 monthly. The total difference in the payments of two women for 30 years was more or less $35,000.  This is quite big, says Steinberg. The big difference was the result of the credit scores of Susie and Jane.

There are three steps to take before taking a mortgage. First is to check your credit score. Then, if it is excellent maintain it. Finally, if it is not good, do something to improve it.

Steinberg says that aside from paying their dues on time, the consumers have to control their spending habits because the credit companies are checking their spending to determine their credit scores.

She further added that consumers have to spend only about 20% of the available credit or they should not go beyond 90% of the available credit.