Here's a look at 12 common credit report myths and what the truth really is:

1.	Paying my debts will make my credit report instantly pristine.
2.	I must give permission for a company to see my credit report.
3.	Credit counseling always destroys my credit score.
4.	Canceling credit cards boosts my score.
5.	Too many inquiries hurt my score.
6.	Checking my own credit report harms my standing.
7.	FICO scores are locked in for six months.
8.	I don't need to check my credit report if I pay my bills on time.
9.	All credit reports are the same.
10.	A divorce decree automatically severs joint accounts.
11.	Bad news comes off in seven years.
12.	I can always pay someone to fix or repair my credit.

From Bankrate.com

 1. Paying my debts will make my credit report instantly pristine.
A credit report is a history of your payments, not just a snapshot of where you are at the moment, says Maxine Sweet, vice president of public affairs for Experian, one of the three major credit reporting agencies. As the author of the popular Web column "Ask Max," she continuously reminds people that you can't change the past.

2. I must give permission for a company to see my credit report.
It's scary, but the fact is that unless it's for employment purposes, your signature or consent is irrelative.

3. Credit counseling always destroys my credit score.
Attending a credit counselor's debt management program is not considered negative in the scoring models.

"We don't want consumers to consider credit counseling to be detrimental to their FICO scores," says Craig Watts, public affairs manager at Fair Isaac Corp., the company that developed the FICO score.

However, if the credit counselor negotiates a lesser contractual obligation, the lender decides how it wants to report that. So if your $500 monthly payment is refigured for $300, the creditor may either legally report that as $200 in arrears every month or reward you for not filing bankruptcy by reporting the account as up to date.

"As long as the accounts are delinquent and not brought up to date, it will be viewed negatively by lenders," says Deborah McNaughton, owner of Professional Credit Counselors and author of "The Get Out of Debt Kit." However, she says, "if everything is current, whether it's a home loan or not, they're not going to view it as negative. The FICO scores are not affected by it." The credit score system ignores any reference to credit counseling that may be in your file.

Although credit counseling does not by itself influence your credit score, it is apparent on the report that you've been through, or are currently in, counseling -- and that is something individual lenders may not like. Or they might never know.

"If they looked manually at your credit report and saw that debts were being repaid through a debt management program, they probably wouldn't open a new account for you," Sweet says. Of course, "you shouldn't be opening a new account if you're in a debt management plan."

However, most lenders these days will never see your actual report.

"They don't look at reports manually anymore," Sweet says. "Some small creditors might, but most of any size use automated scoring systems of one model or another."

Once you've successfully emerged from credit counseling with your formerly tattered credit pieced back together, the history of consistent payments is what matters the most. "Even mortgage lenders will work with consumers who have successfully gone through debt management counseling and will work to get them a mortgage," McNaughton says.

4. Canceling credit cards boosts my score.
Open accounts spells available, potential debt, so better to close them, runs the legend. But experts agree that most creditors want to see at least two or three pieces of active credit to prove you can manage debt responsibly.

And, Watts chimes in, those unused cards lying in your jewelry box aren't wreaking havoc with your score.

"The myth is that they look ominous to potential lenders," he says. "Reality is that paying your bills on time and not being overextended is more important than having $5,000 worth of available credit on a card you're not using. We continue to evaluate this 'open to buy' statistic, and we simply don't find it falling into one of those highly predictive areas."

On the other hand, extremes never look good. Opening one charge account occasionally to take advantage of a 10 percent offer is negligible. Going wild and signing up for five during the holiday season probably would invite a decreased score, he says.

5. Too many inquiries hurt my score.
Once upon a time, this statement was true. But get with the times -- in this millennium, the credit agencies recognize a shopping mind-set when they see one. If a batch of mortgage or car loan inquiries arrives within 30 days, it doesn't count at all, Watts says.

"Outside that 30-day period, if we locate a mortgage or car inquiry that occurred 180 days ago, and then see more mortgage- or auto-related hits in the accompanying 14-day window, we err on the consumer's side and still assume she's shopping for one item," he says.

"We really feel like we are capturing the true consumer experience and not holding it against them for being an aggressive or smart rate shopper."

Furthermore, there's no such thing as some fixed number of points associated with these inquiries, Watts says.

"Inevitably when a consumer or a lender evaluates a credit file, they think this item must be worth 20 points, this is worth 100 points," he says. "In reality we design the FICO scoring model so that each credit report item is given a reasonable or statistically valid number of points."

In English, that means FICO is designed to predict the likelihood that you'll fall seriously behind in repaying one of your creditors within the next two years. Some things have predictive value and some don't. Inquiries fall in the middle.

"They're not incredibly predictive, so they're in the model but they don't drive the boat," Watts says.

6. Checking my own credit report harms my standing.
The reporting agencies distinguish between soft and hard pulls. When Target calls to check before issuing its line of credit, the agencies chalk that up as a hard pull and it counts against your score. Personal requests and credit counselors -- if they do it correctly, so insist on this as part of your agreement terms -- fall under soft pulls, which do not reflect negatively on the evaluation.

Using a company that promises credit reports as a perk can turn this myth into a self-fulfilling prophecy, however, McNaughton says.

Because they are merchants in disguise, their freebie costs you. Citizens must go directly to the three bureaus if they want a soft pull. Ditto FICO.

"Pulling your credit scores is quite empowering," says Watts. "You have a choice: You can either be very aggressive with your credit management and pull your score with some regularity or take a more passive approach once a year to see how all those credit cards are actually doing."

7. FICO scores are locked in for six months.
Fair Isaac Corp.'s models are dynamic, meaning that your FICO score changes as soon as data on your credit report change.

"When we calculate a score, for all intents and purposes it then goes away and is recalculated the next time someone pulls your file," says Watts.

8. I don't need to check my credit report if I pay my bills on time.
When the Consumer Federation of America and the National Credit Reporting Association analyzed credit scores in the summer of 2002, they discovered that 78 percent of the files were missing a revolving account in good standing, while 33 percent of files lacked a mortgage account that had never been late. Twenty-nine percent contained conflicting information on how many times the consumer had been 60 days late on payments.

"There can be a lot of other activity going on that you don't have any clue about," McNaughton says.

In her experience, 80 percent of all credit reports have erroneous information ranging from a wrong birth date to accounts you never applied for.

9. All credit reports are the same.
Way wrong. These days, most creditors across the country do report their information to all three major agencies: Equifax, Experian and TransUnion.

But "that was not true in the past," Sweet says.

And, because they are separate companies, the speed in which they update records isn't necessarily equal.

Additionally, the agencies use inquiry activity to update your address, phone numbers, employment status and the like. Because creditors typically pull only one company's report, it's possible that, say, TransUnion doesn't show your current address.

According to McNaughton, she's never seen a client yet for whom all three reports spit out the same records and scores.

10. A divorce decree automatically severs joint accounts.
The judge may have rubber-stamped your plans to divide credit card, car and house payments, but that carries absolutely no legal weight with the creditors themselves, Sweet says.

"We see so many people who, a year or two after the divorce, are just outraged and hurt because their credit report reflects their ex-spouse's missed payments," she says.

Unfortunately, at that point, they are helpless to erase the damage.

Divorcing parties must contact the creditors and either close current accounts or have the booted name sign a letter of consent for this action. And assuming certain debts isn't a unilateral decision on your part, says Sweet. Creditors typically do a credit check on your name and if they don't deem you financially stable enough to assume that $30,000 car loan, for instance, they won't agree to remove the other person.

11. Bad news comes off in seven years.
Some of it does. Chapter 13 (reorganization of debt) disappears seven years from the filing date. But if you filed Chapter 7 bankruptcy (exoneration of all debt), the window is 10 years from the filing date.

On the good-news side, accounts in bankruptcy can be deleted seven years after the date of your first missed payment, so those individual pieces may disappear before the word "bankruptcy" on your report. And if you pay off or close an account that had no delinquencies or problems, it, too, remains on the record for 10 years rather than the previous seven, say Experian experts. Again, this means positive information hangs around longer, as a consumer benefit.

12. I can always pay someone to fix or repair my credit.
Yes, you can clear up erroneous information posted to your account, such as a repossessed car that you didn't purchase in the first place, but if you paid your Sears bill three months late in 1997, that's a hard fact.

Companies claiming to fix your credit deliver on their promises by generating a flood of dispute letters to the credit reporting agencies, which in turn ask the creditor to verify or document the entry. If they cannot, the listing must come off at that time. But if the creditor later does verify or document it, the agency slaps it right back into the file after 30 days.

 

RISMEDIA, May 28, 2008-Fannie Mae recently announced its Keys to Recovery initiatives, which is a part of the organization’s efforts to prevent foreclosures, support counseling efforts, and provide market stability in the wake of the housing and mortgage market downturn.

The initiatives are geared toward helping struggling borrowers stay in their homes, assisting prospective home buyers with home purchases, and stabilizing impacted communities. Here is a summary:

Keys to Recovery Initiatives

Fannie Mae’s Keys to Recovery^TM initiatives are geared toward providing liquidity, stability, and affordability to the housing and mortgage markets for the long term, and includes steps to keep struggling borrowers in their homes, assist prospective home buyers with home purchases, and stabilize communities impacted by the mortgage market downturn.

The initiatives include:

1.) A new refinancing option for Fannie Mae “underwater” borrowers that will allow for refinancing up to 120% of a property’s current value;
2.) A renewal and expansion of the company’s partnership with State Housing Finance Agencies (HFAs) to provide $10 billion in financing for qualified, first-time home
buyers;
3.) In partnership with Self-Help, a new initiative that allows families in hard-hit communities to reside in foreclosed properties on a rent-to-own basis; and 4) pricing for new jumbo-conforming loans that will be flat to conforming for portfolio asset acquisition through the end of the year.

Refinancing “Underwater” Borrowers

With home prices declining in many areas of the country and lending standards tightening as a result of the ongoing turmoil in the housing finance system, many borrowers find themselves with mortgages that exceed the value of their homes and are locked out of refinancing into safer loans that would allow them to sustain their mortgage payments.

In order to assist borrowers whose home equity is “underwater,” reduce foreclosures, and support sustained homeownership, Fannie Mae will purchase refinanced loans the company owns for up to 120% of the current property value provided the borrower is current with their mortgage payments.

HFA Investment

HFAs exist to provide affordable homeownership and rental housing opportunities within their states. The majority of HFA single-family business is for first-time home buyers who have received borrower counseling and down payment and/or closing cost assistance from the government.

Fannie Mae has maintained a long-term agreement with the National Council of State Housing Agencies (NCSHA) to purchase loans generated by the HFAs. The company is renewing and expanding its agreement with NCHSA to purchase up to $10 billion in HFA loans by the end of 2009. In addition, the company will provide access to low down payment mortgage products at competitive prices, resulting in more advantageous financing opportunities for first-time home buyers.

Neighborhood Stabilization

In order to minimize the neighborhood impact of foreclosed properties, Fannie Mae will support an initiative with Self-Help in partnership with local nonprofits to purchase foreclosed homes in hard-hit neighborhoods.

The nonprofits would acquire and rehab the properties, and then sell them to qualified borrowers or enter into a customized lease-purchase agreement. The initiative will be geared toward borrowers who have the income to qualify for the home purchase, but need additional time to improve creditworthiness. Participants choosing the rent-to-own option would be granted up to five years to qualify for the mortgage and receive extensive credit counseling during the lease period.

Jumbo-Conforming Loans

Following passage of the Economic Stimulus Act of 2008, Fannie Mae is temporarily able to purchase loans greater than the conventional-conforming loan limit of $417,000. In certain high-cost areas as designated by HUD, the company is able to purchase jumbo-conforming loans up to $729,750 in the continental U.S. The company is now accepting deliveries of 15-year and 30-year fixed-rate (FRM), and certain adjustable-rate (ARM), jumbo-conforming mortgages.

In order to bolster liquidity in the jumbo-conforming market and help reduce rates for jumbo-conforming mortgages in high-cost areas, the company will now:

• Price new jumbo-conforming loans flat to conforming for portfolio asset acquisition through the end of the year. This means that although jumbos are not TBA-eligible, we will be pricing them as if they were.

• Allow for cash-out, jumbo-conforming loan refinancings.

• Expand loan-to-value (LTV) criteria for jumbo-conforming purchase loans and limited cash-out refinancings.

• Offer expanded jumbo-conforming FRM and ARM options.

HomeStay

The company’s Keys to Recovery^TM efforts build on Fannie Mae’s HomeStay® initiative announced last year.

The company is working with lenders, loan servicing companies, and policy makers to respond to the housing and mortgage market crisis with a goal to minimize the impact on families and communities by preventing foreclosures, supporting counseling efforts, and providing market stability.

Through HomeStay®, since the beginning of 2007, the company has:

• Helped more than 200,000 at-risk homeowners refinance into safer loans or work out their loans, including nearly $28 billion in refinancings for subprime borrowers.

• Provided more than $10 million in grants - and hundreds of employee volunteer hours - to support foreclosure prevention counseling and workshops since the housing crisis deepened last year.

• Worked with loan servicers to emphasize work-outs for delinquent loans, instituted attorney incentive fees for workouts, provided HomeSaver Advance^TM loans that allow borrowers to catch up on their delinquent mortgage payments, deployed staff to work on-site with our largest servicers, and made dozens of operational changes and enhanced servicer authorities to allow for easier modifications and work-outs.

• Supported HOPE NOW initiatives and public policies to give at-risk and delinquent borrowers a better chance to afford their mortgages.

National Down Payment Policy

On May 16, 2008, the company announced a new, single down payment policy in all communities across the nation for conventional, conforming mortgages the company will purchase or guarantee. Starting with loan applications taken on June 1, 2008, Fannie Mae will accept up to 97% loan-to-value ratios for conventional, conforming mortgages processed through its Desktop Underwriter® automated underwriting system, and 95% loan-to-value ratios for loans underwritten outside of Desktop Underwriter, in all geographic locations in the United States.

This new national down payment policy will supersede the “Maximum Financing in Declining Markets Policy” Fannie Mae adopted in December 2007, which required higher down payments in markets where home prices are declining. The new policy now equalizes down payment requirements across the country, regardless of local market conditions.

RISMEDIA, May 13, 2008-Fannie Mae recently announced four key initiatives that will have a huge positive impact for home owners and buyers. “When Fannie Mae changes their policies and procedures, it has a wide-spread impact on homeowners,” said Gibran Nicholas, Chairman of the CMPS Institute, an organization that certifies mortgage bankers and brokers. “This is because over 60 percent of US home mortgages are securitized, meaning that they are owned by investors like Fannie Mae and Freddie Mac who issue bonds on the bond market using these mortgages as collateral.”

The four changes are:

1. Fannie Mae will allow borrowers to refinance up to 120% of their home value if they are currently paying their mortgages on time.

“This is a huge positive development for responsible homeowners who are faithfully making their payments, but simply find themselves in a negative equity situation due to declining real estate values,” said Nicholas.

2. Fannie Mae is renewing and expanding their partnership with the state Housing Finance Agencies to provide $10 billion in financing for qualified first-time home buyers.

“This is important because it gives first time home buyers access to more financing options, thereby increasing the amount of eligible buyers in the marketplace,” Nicholas said.

3. Fannie Mae is teaming up with the Self-Help Credit Union, one of their long-time partners, in order to help families in hard-hit real estate markets get into foreclosed properties through a rent-to-own program.

This will stabilize communities by enhancing the options available to renters.

4. Effective immediately, Fannie Mae will buy new jumbo-conforming loans at the same price that they buy other conforming loans throughout the remainder of 2008.

“This is an enormous benefit for mortgage borrowers in high cost areas who have been largely disappointed with the persistently high rates on jumbo loans,” said Nicholas. As part of the much touted Economic Stimulus Package of 2008, limits on jumbo mortgages were increased from $417,000 to up to $729,750 in high cost areas. “The reality of the situation is that these higher loan limits have not really been effective because Fannie Mae has charged higher interest rates and fees on these loans versus traditional conforming loans at or below the $417,000 limit,” said Nicholas. The new rules abolish this pricing difference, and allow jumbo-conforming loans to priced exactly the same as traditional conforming loans. “These low interest rates expire at the end of 2008, so now is a perfect time for borrowers in these higher-priced markets to buy homes,” said Nicholas.

For more information, visit www.CMPSInstitute.org

RISMEDIA, May 12, 2008-The Bush Administration has put in place responsible solutions to help American families stay in their homes and avoid foreclosure, U.S. Department of Housing and Urban Development Deputy Secretary Roy A. Bernardi said today. Delivering the keynote address at the Federal Home Loan Banks Annual Directors Conference, Bernardi highlighted President Bush’s responsible plan to strengthen the economy and help homeowners by allowing HUD’s Federal Housing Administration (FHA) to be “a good safeguard against foreclosure.”

“This is the time for vision and prudence. We must give the American people real solutions to the housing crisis, not multiply problems. The Bush Administration favors responsible, specific efforts to save homeowners and allows FHA to be a central part of any lasting solutions,” Bernardi said.

In August 2007, FHA modified its refinancing program to help creditworthy homeowners who missed payments after their teaser rates reset. Since then, more than 170,000 families who are current and past due on their home loans have refinanced with FHASecure, FHA’s refinancing product. The number of single family mortgages endorsed by FHA has effectively doubled over the last year, Bernardi said. In the first quarter of 2008, FHA endorsements totaled more than 237,000, which is a 100 percent increase over the same period last year. Homeowners refinancing from the exotic subprime market to FHA are saving approximately $400 a month on their new mortgages.

Earlier this month, the Bush Administration announced additional administrative steps to extend FHA opportunities to troubled homeowners. Using its current regulatory authority, FHA will assist homeowners who are struggling with their current mortgage payments who have no other way to refinance their loans as their homes lose value.

FHASecure will extend assistance to borrowers in subprime adjustable rate mortgages who were late on up to three consecutive monthly mortgage payments or at three different times over the previous twelve months. FHA will allow lenders to voluntary write-down outstanding principal mortgage balances and insure, which will provide an equity cushion and protect taxpayers against risk.

“Expanding FHASecurein this way is a good idea,” Bernardi said. “Borrowers will reduce their principal payments and keep their homes. Lenders will avoid taking a more significant loss at foreclosure. Neighbors will avoid vacant homes in their neighborhood, depressing their home values. And localities will keep a viable tax base to fund community health, schools, and other valuable services. The changes we have made with FHASecurewill help us reach about 500,000 homeowners in total by the end of this year.”

Bernardi also highlighted President Bush’s stimulus package, which will make a positive difference in the mortgage market by temporarily increasing FHA’s loan limits. For the rest of 2008, FHA is able to insure mortgages in higher-cost states and help homeowners hold on to their houses. The new loan limits were announced in March, and the affects of the program should be seen in the coming months.

“The reaction to the new, temporary loan limits should again explain the need for immediate passage of FHA Modernization, which we have urged for two years. Congress needs to make this important bill an immediate priority over other housing proposals that are under consideration. As a first order of business, a good FHA Modernization bill must be sent to the President,” Bernardi said.

The Bush Administration’s proposal to modernize FHA has bipartisan support. Introduced two years ago, this legislation would help hundreds of thousands of homeowners access safe, affordable FHA-backed mortgages by increasing FHA’s loan limits, making downpayment requirements more flexible, and introducing fair pricing of insurance. The House and Senate have passed different versions of this legislation, but have not reconciled their differences and sent the President a final bill.

Bernardi also warned against proposals in Congress that “put us on a slippery slope, rapidly moving in the direction of a federalization of the mortgage industry.”

“Americans don’t want to pay for the risky financial behavior of others. And they don’t want to make the Federal government the lender of last resort, with the private sector dumping bad loans on FHA and the taxpayers themselves. We must not harm our economy through solutions that further erode the foundation of the nation’s housing market, hurt homeowners who are meeting their mortgage obligations, or prolong the correction,” Bernardi said.

Finally, Bernardi said the mortgage industry, in cooperation with the Bush Administration, has stepped forward and pro-actively implemented workouts to help homeowners avoid foreclosure, but there is still more work to do. With more subprime loan interest rate resets expected, Bernardi urged the industry to have “a strong and effective response that will quickly help to stabilize housing prices.” Yesterday, the HOPE NOW Alliance announced that mortgage servicers have provided nearly 1.4 million loan workouts since July 2007 for homeowners with prime and subprime mortgages. This includes 503,000 homeowners in the first quarter of 2008.

“I believe that Congress and the Administration can forge a strong working partnership on housing. There is some common ground which should be explored and extended. I will continue to try to convince our lawmakers that we need wisdom, not over-reaction. We must give the American people real solutions to the housing crisis, not multiply problems,” Bernardi concluded.

For more information, visit: http://www.hud.gov/news/speeches/

RISMEDIA, May 5, 2008-The average home buyer views at least 10 homes over an eight week search so it isn’t practical to get a professional inspection of every house they tour. FrontDoor.com, a new real estate website powered by HGTV, comes to the rescue pointing out things to look for in your own pre-inspection that will help identify potential problems before calling in the pros.

FrontDoor.com’s Top 10 Red Flags for Home Buyers

1) Mass Exodus from the Neighborhood

Don’t let a home’s curb appeal keep you from glancing down the street. Are there several other homes for sale? Are nearby businesses boarded up or vandalized? Get the scoop from the neighbors. If everyone else wants to leave the street, maybe you should, too - before you’re stuck with a bad investment.

2) Mediocre Maintenance

Three layers of roofing and gutters with plants growing in them are signs the owners aren’t big on maintaining their home. What else did they neglect?

3) Foundation Failures

Check out the yard grading. If the yard slopes towards the house, it could cause water to run down the foundation walls or into the basement, which will be costly to repair. Scour the foundation for damage. Bulges or cracks bigger than 1/3 inch can mean the house has serious structural issues.

4) Bad Smells - Inside or Outside

Take a big whiff of the air inside and outside the house. Do you smell anything funky? If you can’t smell anything but the huge baskets of potpourri all over the house, this could be a red flag.

5) Faulty or Old Wiring

While you’re probably not an electrician, make sure all the switches and outlets in the house function properly. Flickering lights, circuits that don’t work and warm or hot outlets or faceplates are all symptoms of wiring problems.

6) Fresh Paint… on One Wall

New paint can really spruce up drab walls, but it can also hide bigger problems, like water damage, mildew or mold. If the room smells strange or if you see stains or saggy walls or ceilings, have an inspector look for mold and leaks.

7) Locked Doors and Blockades

Ask about any rooms that are “off limits” during your home tour, and arrange to see them later if you’re interested in the house.

8) Foggy or Non-Functioning Windows

Check for water in between double-paned windows and make sure all the windows are functional.

9) Structural Walls or Floors have been Removed

Sure you love the open floor plan, but was the house always open or did the homeowners renovate? If they removed a load-bearing wall without adjusting the framing, it can shift weight to other parts of the house. Hire a structural engineer if you think any renovations are questionable.

10) Bugs!

No one wants a house with a pest problem - be it roaches, mice or worst of all, termites. Be on the lookout for unwelcome creatures as you tour the house. Even if no foes pop out while you’re there, consider a separate termite inspection if you’re thinking of purchasing the property.

The Bottom Line

Always get a professional inspection for the house you choose to buy. Skipping a home inspection is not a good way to cut costs. You’ll end up paying more in the long run when problems arise.

Please Email me with your comments and suggestions. Have a wonderful week.

AlexandraZega@remax.net

RISMEDIA, May 2, 2008-Fixed mortgage rates inched upward for the third week in a row, with the average conforming 30-year fixed mortgage rate rising to 6.16%. According to Bankrate.com’s weekly national survey of large lenders, the average 30-year fixed mortgage has an average of 0.36 discount and origination points.

The average 15-year fixed rate mortgage popular for refinancing is now 5.71%, while the average jumbo 30-year fixed rate nosed up to 7.35%. Adjustable mortgage rates were no exception, with the average 5/1 ARM rising to 5.96% while the average 1-year ARM soared to 6.96%.

The turmoil that was so prevalent in credit markets earlier in the year has given way to smoother waters in recent weeks. Accordingly, fixed mortgage rates have been comparatively placid in contrast to the wild gyrations seen during the first quarter. Mortgage rates are closely related to yields on long-term government bonds. Short of a crisis in the credit markets, the Federal Reserve is expected to hold off from further interest rate cuts. But mortgage rates could still be volatile in the weeks ahead.

Additional signs of economic weakness, such as another poor employment report for April, would likely push mortgage rates down. Inflation is a risk as well, and could propel rates higher in the weeks ahead.

Mortgage rates have been on a wild ride since the beginning of the year. The average 30-year fixed mortgage rate was as low as 5.57% in January, meaning that a $200,000 loan would have carried a monthly payment of $1,144.38. In February, the average 30-year fixed rate got as high as 6.41%, which meant the same $200,000 loan would have carried a monthly payment of $1,252.32. Today, with the average rate at 6.16%, a $200,000 loan would mean a monthly payment of $1,219.75.
SURVEY RESULTS

30-year fixed: 6.16% — up from 6.11% last week (avg. points: 0.36)
15-year fixed: 5.71% — up from 5.70% last week (avg. points: 0.39)
5/1 ARM: 5.96% — up from 5.92% last week (avg. points: 0.44)

Bankrate’s national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets.

For more information, visit http://www.bankrate.com/mortgagerates

 

RISMEDIA, May 1, 2008-The Bush Administration has put in place solutions to help American families stay in their homes and avoid foreclosure, U.S. Department of Housing and Urban Development Deputy Secretary Roy A. Bernardi said this week. Delivering the keynote address at the Federal Home Loan Banks Annual Directors Conference, Bernardi highlighted President Bush’s responsible plan to strengthen the economy and help homeowners by allowing HUD’s Federal Housing Administration (FHA) to be “a good safeguard against foreclosure.”

“This is the time for vision and prudence. We must give the American people real solutions to the housing crisis, not multiply problems. The Bush Administration favors responsible, specific efforts to save homeowners and allows FHA to be a central part of any lasting solutions,” Bernardi said.

In August 2007, FHA modified its refinancing program to help creditworthy homeowners who missed payments after their teaser rates reset. Since then, more than 170,000 families who are current and past due on their home loans have refinanced with FHASecure, FHA’s refinancing product. The number of single family mortgages endorsed by FHA has effectively doubled over the last year, Bernardi said. In the first quarter of 2008, FHA endorsements totaled more than 237,000, which is a 100% increase over the same period last year. Homeowners refinancing from the exotic subprime market to FHA are saving approximately $400 a month on their new mortgages.

Earlier this month, the Bush Administration announced additional administrative steps to extend FHA opportunities to troubled homeowners. Using its current regulatory authority, FHA will assist homeowners who are struggling with their current mortgage payments who have no other way to refinance their loans as their homes lose value. FHASecure will extend assistance to borrowers in subprime adjustable rate mortgages who were late on up to three consecutive monthly mortgage payments or at three different times over the previous twelve months. FHA will allow lenders to voluntary write-down outstanding principal mortgage balances and insure, which will provide an equity cushion and protect taxpayers against risk.

“Expanding FHASecurein this way is a good idea,” Bernardi said. “Borrowers will reduce their principal payments and keep their homes. Lenders will avoid taking a more significant loss at foreclosure. Neighbors will avoid vacant homes in their neighborhood, depressing their home values. And localities will keep a viable tax base to fund community health, schools, and other valuable services. The changes we have made with FHASecurewill help us reach about 500,000 homeowners in total by the end of this year.”

Bernardi also highlighted President Bush’s stimulus package, which will make a positive difference in the mortgage market by temporarily increasing FHA’s loan limits. For the rest of 2008, FHA is able to insure mortgages in higher-cost states and help homeowners hold on to their houses. The new loan limits were announced in March, and the affects of the program should be seen in the coming months.

“The reaction to the new, temporary loan limits should again explain the need for immediate passage of FHA Modernization, which we have urged for two years. Congress needs to make this important bill an immediate priority over other housing proposals that are under consideration. As a first order of business, a good FHA Modernization bill must be sent to the President,” Bernardi said.

The Bush Administration’s proposal to modernize FHA has bipartisan support. Introduced two years ago, this legislation would help hundreds of thousands of homeowners access safe, affordable FHA-backed mortgages by increasing FHA’s loan limits, making down payment requirements more flexible, and introducing fair pricing of insurance. The House and Senate have passed different versions of this legislation, but have not reconciled their differences and sent the President a final bill.

Bernardi also warned against proposals in Congress that “put us on a slippery slope, rapidly moving in the direction of a federalization of the mortgage industry.”

“Americans don’t want to pay for the risky financial behavior of others. And they don’t want to make the Federal government the lender of last resort, with the private sector dumping bad loans on FHA and the taxpayers themselves. We must not harm our economy through solutions that further erode the foundation of the nation’s housing market, hurt homeowners who are meeting their mortgage obligations, or prolong the correction,” Bernardi said.

Finally, Bernardi said the mortgage industry, in cooperation with the Bush Administration, has stepped forward and pro-actively implemented workouts to help homeowners avoid foreclosure, but there is still more work to do. With more subprime loan interest rate resets expected, Bernardi urged the industry to have “a strong and effective response that will quickly help to stabilize housing prices.” Yesterday, the HOPE NOW Alliance announced that mortgage servicers have provided nearly 1.4 million loan workouts since July 2007 for homeowners with prime and subprime mortgages. This includes 503,000 homeowners in the first quarter of 2008.

“I believe that Congress and the Administration can forge a strong working partnership on housing. There is some common ground which should be explored and extended. I will continue to try to convince our lawmakers that we need wisdom, not over-reaction. We must give the American people real solutions to the housing crisis, not multiply problems,” Bernardi concluded.

For more information, visit http://www.hud.gov.

RISMEDIA, April 30, 2008-The Federal Trade Commission testified before the U.S. Senate Committee on Commerce, Science, and Transportation’s Subcommittee on Interstate Commerce, Trade, and Tourism, about the Commission’s continuing efforts to protect subprime mortgage borrowers.

The testimony described the agency’s priorities, including deceptive mortgage advertising, deceptive or unfair servicing practices, discrimination in lending, and foreclosure rescue scams, and it emphasized the following points:

- The Commission has been at the forefront of the fight against deceptive subprime lending and servicing practices since 1998, when it filed its case against Capital City Mortgage. The case alleged that the defendant took advantage of African-American consumers in Washington, D.C.
- In the past decade, the FTC has brought 22 actions in the mortgage lending industry, with particular attention to entities in the subprime markets. Through these cases, many of which have challenged deceptive advertising and marketing practices, the FTC has returned more than $320 million to consumers.
- The Commission is investigating more than a dozen mortgage companies as part of a mortgage advertising law enforcement sweep. Last year, the agency sent more than 200 warning letters to mortgage brokers, mortgage lenders, and media outlets that carry their home mortgage advertisements. FTC staff recently reviewed the current advertising of those who received warning letters and will follow up with law enforcement where appropriate.
- With the recent rapid increase in mortgage delinquencies and foreclosures, the FTC has intensified its focus on protecting consumers from scams that promise to rescue them from mortgage foreclosure. The Commission has filed law enforcement actions against defendants allegedly engaged in mortgage foreclosure fraud, and has additional nonpublic matters under investigation.
- This month, FTC staff filed a public comment in response to the Federal Reserve Board’s proposed rules to restrict certain mortgage practices. The comment supports the Board’s goals of protecting consumers in the mortgage market from unfair, abusive, or deceptive lending and servicing practices. If the Board’s rules are finalized, the FTC will have the authority to enforce them against nonbank entities under its jurisdiction. The FTC’s enforcement efforts would be more effective if it could obtain civil penalties for violations of these rules.

To empower consumers to better protect themselves from potentially harmful conduct, the FTC’s extensive consumer education efforts include new educational materials, in English and Spanish, about deceptive mortgage advertisements, buying a home, mortgage foreclosure rescue scams, and steps borrowers can take to avoid foreclosure.

The Commission engages in research and policy development to better understand and protect consumers in the mortgage marketplace. Next month, FTC staff economists will host a conference to assess the role of consumer information in the current mortgage crisis, and to discuss strategies for ensuring that mortgage disclosures will be designed to provide the greatest benefit to consumers.

The Commission vote authorizing the presentation of the testimony and its inclusion in the formal record was 4-0.

In other FTC news, they have charged Foreclosure Solutions, LLC and Timothy A. Buckley with operating a nationwide mortgage foreclosure “rescue” scam that charged consumers as much as $1,200 to save their homes from foreclosure but failed to do so. The FTC seeks to bar them from further law violations and make them forfeit their ill-gotten gains.

According to the FTC’s complaint, the defendants market their services through direct mail to consumers named in court records of foreclosure actions and through Internet websites, including www.program10.com and www.foreclosuresolutionsusa.net. Through the direct mail solicitations, the defendants warn that consumers could lose their home within 10 days, and they promise that they can stop foreclosure proceedings. In one of their letters they claim a 93% success rate.

Consumers who call a toll-free number are told that the defendants will provide an attorney and a case manager to help them avoid foreclosure, the complaint alleges. The defendants allegedly state that they have helped thousands of others, and they promise to guarantee in writing that they will save each consumer’s home. In some instances, consumers are permitted to pay about half the fee up-front and the balance within 30 days for an extra $50.

The defendants allegedly send a representative to the consumer’s home to close the sale and collect the up-front fee. In the agreement they require consumers to sign, they attempt to disclaim their guarantee that they will save the consumers’ homes, stating that they will work faithfully but not guarantee the success of their efforts. The defendants also provide consumers with a money-back guarantee, promising a refund if the consumer follows their instructions to save money and avoid lender phone calls. They also require consumers to sign a power of attorney form, authorizing them to represent the consumer in the foreclosure action.

In addition, the complaint alleges that the defendants instruct consumers to open a savings account and to deposit, every month until further notice from the defendants, the consumer’s monthly mortgage payment plus an additional 25 to 35%. They claim that the extra payment will be used to negotiate with the lender to reinstate the loan. After consumers have paid for the services, the defendants often don’t answer or return their calls. In other instances, the defendants’ representatives allegedly tell consumers that they are working on a solution, that they need more information from the consumer, or that no solution can be found.

According to the complaint, the defendants hire attorneys to respond to the foreclosure complaints filed against consumers. In many instances, the attorneys file the same form response to every complaint, usually without investigating consumers’ individual circumstances that might identify defenses or counterclaims unique to particular consumers. In many instances, the defendants do not stop foreclosure or save consumers’ homes, and many consumers who have contracted for their services lose their homes to foreclosure. Consumers who stop foreclosure through their own efforts sometimes learn that their lenders offer the same settlement terms regardless of whether the consumers negotiate on their own or through the defendants. Others learn that their lenders will negotiate only with them and not with the defendants.

The Ohio-based defendants are charged with falsely representing that they will stop foreclosure in all or virtually all instances, in violation of the FTC Act.

The Commission vote to authorize staff to file the complaint was 4-0. The complaint was filed in the U.S. District Court for the Northern District of Ohio, Eastern Division.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law. The case will be decided by the court.

For more information, visit http://www.ftc.gov.

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Alexandra Zega (Lic. in MA and NH)

 

 

A great reminder from Dr. Rainey - let's not forget our four-legged family members this summe

 

RISMEDIA, April 29, 2008-(MCT)-The approach of summer will bring constant reminders about the danger of overexposure to the sun and the need for sunscreen.

The dangers are real, and we should all take appropriate measures to prevent skin damage and skin cancer. But, did you know that the family pet is susceptible to many of the same diseases? Dogs, cats and even horses suffer from sunburn, solar dermatitis, and skin cancer.

The skin of a sunburned animal is red and painful, just as in people. Hair loss may also be evident. The most common sites for sunburn include the bridge of the nose, ear tips, skin around the lips, groin, abdomen and inner legs. Pets that have light-colored noses and skin, thin or missing hair, or have been shaved for surgery are at greater risk for solar induced skin diseases.

Sunburn can progress to solar dermatitis which is characterized by redness, hair loss, crusting and ulceration of the skin. With continued sun exposure skin cancer (such as squamous cell carcinoma) may occur.

The best way to prevent sunburn is to avoid the sun between 10 a.m. and 4 p.m. This can be done by keeping the animal inside or providing shaded areas in the yard. Horses can be protected in a barn. Using a black felt-tip marker or tattooing depigmented areas of the nose can help absorb some sunlight, but alone will not prevent sunburn.

Sunscreens may help prevent sunburn in our pets. They are not only a good idea, but are actually recommended by The American Animal Hospital Association in appropriate animals. The sunscreen should be fragrance free, non-staining, and contain UVA and UVB blockers. Because most human sunscreens can be toxic if ingested by a dog or a cat it is best to use a pet-specific product. Sunscreens should be applied liberally and reapplied every 4-6 hours during the brightest part of the day (10 a.m. to 4 p.m.).

Doggles, Nutri-vet, and Epi-Pet all produce pet specific sunscreens and can be found on-line. Be sure to inquire which product is right for your pet as some products should not be used on cats.

Ideally, it is better to prevent sunburn than to treat it. However, if sunburn does occur your veterinarian can provide you and your pet with treatment options.

Dr. Chris Rainey is a veterinarian at Northwood Hills Animal Hospital in Gulfport, Miss.

© 2008, The Sun Herald (Biloxi, Miss.).
Distributed by McClatchy-Tribune Information Services.

 

Here is an interesting article from a former Wshington Post journalist and editor, Eugene L. Meyer, as published by RISMEDIA on April 7, 2008:

Janice Petteway has a simple solution to the credibility gap that seems to plague the real estate industry as a result of public cynicism bred by media doom and gloom contrasted with smiley-face broker optimism.

“We just want one of the candidates to have a good affair and we’ll be really fine,” says the Orlando, Florida broker. Then, she says, the media would obsess over the scandal and publish fewer downbeat housing stories. Even without such a scandal, she adds, “The election has helped, because the media is on a different tangent.”

While that may not be entirely the case, many brokers believe that without what they consider media-fueled fear of the market, they are better able to give clients their best angst-free advice. For a lot of brokers, that translates into a recommendation to buy now. Or, as Barbara Reynolds, president and chief executive officer of Real Living Realty One of Cleveland, puts it: “If you’re in buyer’s market, you should buy.”

Keeping It Local

But what to tell clients in this complex marketplace, where perceptions are national but realities are local, may be one area where one size does not fit all. If consumer confidence is built on a foundation of straight talk, the rap can-and probably should-vary from region to region.

Wichita and Phoenix, for example, might as well be on different planets, their markets are so different. Wichita brokers’ biggest problem is not the local market-which is remarkably stable, with 4% appreciation forecast this year-but local perceptions based on negative national trend stories.

“Probably our biggest problem is simply overcoming the national press, because what they report has nothing to do with what’s going on here,” says Gary Walker, vice president and general manager of the residential division of J.P. Weigand & Sons Real Estate in Wichita. “If people are coming from one of the 27 states where values are depreciating, it’s a little hard to convince them that it’s not going on here. We haven’t been affected at all by the things that have been a downward force in other parts of the country.”

Consider what Phoenix-area agent Debora Nichols has to say. “In May 2005, we had somewhere around 7,000 to 8,000 homes on our market. Right now, we have over 56,000.” And, with a lot of adjustable-rate mortgages scheduled to reset in May, the expectation is for more foreclosures and further price reductions. “That tells me that the bottom of our market is nowhere near in sight.”

Nichols’ prescription might sound contrarian to some. “We’re all in it to make a living,” she says, “but I think taking care of your clients is more important. If they’re not going to benefit in the long-run or as far as we can see, then it’s not good to advise them to buy now.

A Relationship Based on Trust

“When you start to bond with somebody and build a relationship, I think they expect honesty. They expect you to be on their side. I hope that if I’m honest with them and they appreciate the straight talk that will come back to me in referrals. Or maybe when they are ready to buy, they’ll come back looking for me because I was honest with them.

“In the current climate, I try to put myself in the client’s shoes, because it’s really important for us to understand their longer goals.” If a buyer plans to stay put for five or six years, “it’s a good time to buy. Interest rates are good. There are a ton of opportunities. But if they don’t know what their future holds, then we tell them they’re better off to rent.”

Jennifer Melo, a working mother with three children whose mother-in-law recommended Nichols, appreciates her low-pressure style. “She’s not trying to sell me a house; she’s just waiting for me to pick one I like,” she says. “[Nichols] has the mindset of, ‘if it’s right, it will be.’ She’s very honest and just really open about how she feels. If we walk into house and it’s not meeting my qualifications, we’ll still look at it but she’ll tell me, ‘It doesn’t have the things you want.’ So I just don’t rush it. She keeps us updated on what the market doing.”

Says Keith Geissenberger, a Nichols associate: “My approach is honesty. I tell buyers the market is still dropping and has a very long way to go. My approach with sellers is simply to lay out the facts. I talk about just how bad the overall market is and show them the latest stats from the Arizona MLS. Most importantly, I tell them that no matter how much they love their house, they will only get what the market values it at.

“If all Realtors would just point out to their clients that the markets are efficient and no one is going to over pay just because they wish it, we would recover faster. Lenders know that. They’re not lending above appraised value. If you sell something that doesn’t appraise, what do you have? A lot of angry people.”

Lori Reynolds, moving from Arizona to Iowa, chose Geissenberger after the firm had sold her brother’s house. Working with him, she and her husband have dropped their asking price by about $50,000, from an initial $389,000. The house has been on the market 120 days.

“They’re pretty realistic and honest with you, as far as what to do to make it most presentable,” she says. “They don’t sugarcoat anything, as far as telling you to ‘sell it at this or that price.’ They continue to update you, looking at what you’re charging per square foot, compared to houses selling and listed.”

An Incentive for Buyers

The Florida market has also experienced rapid appreciation and is now trending downward. But Petteway says more buyers are looking now that prices are lower. “Our showings were up 200 percent in the last month,” she says. “Buyers are not sitting on the fence. They’re out there. Buyers are starting to see ‘Just Sold’ and ‘Sale Pending’ signs. They don’t want to miss it. I think the negativity has gone too long. The world has not fallen apart.

“People need homes,” she continues. “It’s a little bit different than consumer confidence in buying a vehicle. You can live with the car you have to get back and forth to work. But most people prefer to get their families settled. You can’t be settled in a rental, because you don’t know when it’s going to be pulled out from you. We’ve had people renting who don’t know if it’s in foreclosure, and they’re three days away from being homeless.

“We do what’s best for them. We want to make sure they’re 100 percent financially able. We don’t encourage them to buy over their means and grow into it. We encourage them to do 30-year fixed mortgages and buy into an area that’s right for their family. We make sure they have all the data they need. There are times we advise people to wait a year or two, typically not because of the market but because something is happening or not happening in own their own situation. If they are looking at being in area for only one or two years, it’s best to rent.”

But overall, she notes, “A lot of people seem to forget that when you’re buying real estate, you’re buying a huge asset with a very little bit of your own money. It’s one of the few things you can buy that is so leveraged, and you get to live in it.” Unless, of course, you’re an investor, as is Petteway, who is buying a rental property for $60,000 or $70,000 less than she would have paid at the height of the market. For her, she says, “it’s a smart time to buy.”

According to Rick Weidel, president of a large central New Jersey brokerage that bears his family name, “There is no time when you shouldn’t buy,” though, of course, buyers will be purchasing a home “relative to the market.” Even if a house doesn’t appreciate, however, he says, “it’s better than paying a landlord, and the odds of someone living in a house for only a year are very slim, next to zero in my market, unless there’s a financial hardship.”

Keeping It Real

The message for sellers unhappy over prices, Weidel says, is to look not at a home’s peak value but at the cost basis. “[Look at] what someone paid for the property,” he explains. “That’s what we try to get our associates to focus on; sellers then feel very realistic and pleased. I don’t know why the real estate industry is fixated on what a product sold for yesterday. “

To which Reynolds, the Cleveland CEO, adds: “Until last year, it was very much a seller’s market. From my vantage point, there is just a tremendous opportunity in the market today, particularly for first-time buyers. There are fewer buyers in the marketplace, and that puts the buyer in the driver’s seat.” Only if a client plans to move in two years, she “would tell them to save money, build up equity for where they are moving and, in the meantime, rent.”

Lynn Kosner, manager broker of Baird & Warner’s Highland Park, Illinois office, also urges house-hunting clients not to wait. “Real estate, whatever it’s doing at the current moment, will increase in value at the end of the day.” But she adds, “Unfortunately, so many properties are in distress and the process is so much more complicated. We’re all learning to deal with the correction. It’s a great time to take advantage of it. There is no bad time to buy.”

In Connecticut, brokers are also challenged in their client dealings by national headlines that don’t reflect local reality. “Lately, we’ve had to do a lot more educating because the media is broad-stroking,” says Candace Adams, president of Connecticut Prudential Realty. “We drive people to a quarterly market report on our website, so the public understands that our market is healthy.”

With interest rates still low and sellers willing to negotiate, Adams urged her own daughter to purchase a house less than a year ago. Buyers, she said, should “get a clear perspective on value and pay what it’s worth, understand the trend and offer 5% less if you think the property will be worth 5% less in a year.

“Our role,” she adds, “is to educate and support clients, sellers and buyers, through any time. Historically, housing remains a great investment.” Over the decades, there have been down times accompanied by “some awful headlines. People listened to them or they didn’t, and if they didn’t they’re millionaires or billionaires today.”

Eugene L. Meyer is a former Washington Post reporter and editor who freelances from Silver Spring, Maryland.

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Thank you for your continued support. Alexandra Zega, Realtor, CBR - RE/MAX Country Crossroads in Rowley Massachusetts - 978 948 5333