GREEN TIP OF THE WEEK: LIGHT-EMITTING NOEL

It's a fact: Christmas decorations will cause a spike in your electricity bill. This year, consider purchasing strings and strands that contain light-emitting diodes, which use 99 percent less electricity than traditional bulbs.

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Barba​ra Ann Paul-​Wibe
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Mortgage & H4H Update

· Early projections indicate that only 20,000 troubled homeowners will apply for the “Hope for Homeowners” program, a considerable reduction from the previously estimated 400,000 homeowners who were expected to apply. The $300 billion program was launched Oct. 1 and is designed to help troubled homeowners rewrite a “risky” mortgage loan into a 30-year, fixed-rate loan with a lower interest rate. During the first two weeks of the program, the Federal Housing Administration, which oversees Hope for Homeowners, reported receiving only 42 applications. Some housing experts believe the low application rate is due to the program being voluntary for lenders and provisions requiring homeowners to agree to an equity share with the government.

To read the full story, please click here:
http://www.latimes.com/business/la-fi-hope4-2008nov04,0,5527840.story


· Less than half of homeowners with mortgage loans through IndyMac have responded to offers from the Federal Deposit Insurance Corporation (FDIC) to lower loan payments and interest rates. The FDIC, which is running IndyMac, mailed 35,000 letters offering homeowners an opportunity to rework the terms of their mortgages. The goal is to reduce the monthly payment on a loan, including taxes and insurance, to no more than 38 percent of the borrower’s pretax income. The FDIC is prepared to implement the following: reduce the interest rate to as low as 3 percent; extend a loan’s terms to 40 years; and waive interest on a portion of the mortgage balance.

To read the full story, please click here:
http://www.latimes.com/business/la-fi-indymac31-2008oct31,0,5613024.story


· JPMorgan Chase & Co. has reported that it is instituting a 90-day foreclosure freeze while it searches for ways to make payments easier for consumers. The program may enable up to 400,000 borrowers to reduce their interest rates or principal amounts. The bank also will open 24 mortgage counseling centers in areas with the highest delinquency rates. JPMorgan also is planning to hire 300 loan counselors to work with delinquent borrowers and employ approximately 150 additional staffers to review each mortgage prior to sending it through the foreclosure process. The program offer is extended to borrowers who have loans through Washington Mutual Inc., and clients of EMC, a mortgage unit of Bear Stearns Companies. Both companies were acquired by JPMorgan in recent buyouts and takeovers.

To read the full story, please click here:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aR3.7ix83s6s&refer=home


· Bank of America, which acquired Countrywide in July, said that nearly 400,000 troubled homeowners who have subprime mortgages and option adjustable-rate loans through Countrywide may be eligible for loan modifications. To be eligible for the Bank of America plan, homeowners must occupy the home as their primary residence; the mortgage must be seriously delinquent — or likely to become so; and the loan must have been serviced by Countrywide and originated prior to Dec. 31, 2007. Bank of America will help borrowers by restructuring first-year payments of principal, interest, taxes and insurance to no more than 34 percent of the borrower's income; halting foreclosure sales against borrowers who are likely to qualify for a loan modification; and waiving restructuring fees and prepayment penalties.

To read the full story, please click here:
http://www.usatoday.com/money/economy/housing/2008-10-06-countrywide-mortgages-settlement_N.htm

...The Best Time to Buy a Home... ???

The best time to buy a home

Recent economic reports and the continued decline of home prices have caused some home buyers to stay on the sidelines and try to time the market so they can purchase a home at an affordable price that will not reduce in value, and will appreciate quickly.  However, many housing advisors recommend that home buyers not try to time the market, but instead purchase a home when they are ready.  

MAKING SENSE OF THE STORY FOR CONSUMERS

·     Despite rising foreclosures, delinquencies, and unemployment rates, and declining home prices,   sales of new and existing homes are improving, which is causing some home buyers to try to “time the market.”  Many housing analysts advise potential home buyers not to base their homebuying decision on economic reports, but rather to take their time finding the right house and to focus on getting their financing in place.

 

·     Most economists believe that home prices will continue to decline during 2009.  C.A.R. predicts that the median home price in California will decline an additional 6 percent next year.  Home buyers need to remember that real estate markets are local and prices differ neighborhood to neighborhood. Many REALTORS® advise their clients to visit communities that interest them, and to talk to homeowners, business owners, and financial institutions to become familiar with the area.

 

·     Credit restrictions and loan underwriting standards tightened during the credit crunch, resulting in mortgage loans taking longer to process and fund.  Most lenders are requiring more information about income, assets, and expenses than in previous years, so home buyers are advised to get preapproved for their mortgage loan instead of applying once they have identified their ideal home. (source CAR)

GREEN TIP: CLEAN YOUR FRIDGE'S COILS

Cleaning the back of your fridge--the coils and electric circuitry--increases energy efficiency. A refrigerator with dirty coils works harder, and that means an extra 25 percent more energy use and CO2 emissions as compared with a fridge with clean coils.

RADICAL SHIFT IN LIFESTYLE COMING

"I have been working with way too many clients over the last several months who are in severe financial straits. One thing that I keep reminding them of is that they have to stop judging themselves by what they have; rather, they need to judge themselves by who they are. Having to give up material things does not make anyone a bad person. Recognizing that they can still put food on the table, clothes on their family's back and a roof over their heads helps to put everything into perspective. Yes, we are going to have to undergo a radical shift in our American lifestyle. But, even with this shift, most of us will still be living far better than 95 percent of the other people on this planet. We should be very thankful."

 --Peter J. Pike

New Demands Make Mortgages Harder to Get ...

New Demands Make Mortgages Harder to Get 
Even home buyers with good credit are having trouble getting mortgages with terms they find attractive. 

Lenders are demanding much higher down payments, often about 20 percent, and sometimes even higher. Jumbo home loans, ranging from $417,000 up to $750,000, depending on the local market, are particularly hard to find because private banks are no longer investing in them.

Properties, as well as buyers, are facing extra scrutiny. Some lenders now require a second appraisal to reassure them of a property’s true value, slowing the buying process and increasing closing costs by hundreds of dollars.

Plus, the wave of consolidation among financial institutes has led to confusion and further delays over mortgage processing. 

Source: USA Today

Mortgage shock? Adjustable rates tied to LIBOR, COFI, other indexes

With approximately 60 percent of outstanding adjustable-rate mortgage (ARM) loans set to the London Inter Bank Offered Rate (LIBOR), nearly 25 percent linked to average yields on certain Treasury securities, and 15 percent set to measures like the Cost of Funds Index (COFI), more homeowners are reacquainting themselves with the type of ARM they have and considering refinancing options such as 30-year, fixed-rate loans.

· It is important that homeowners who have adjustable-rate mortgages (ARMs) are aware of the index to which their mortgage is linked, as this determines the monthly payments. Payments of loans tied to the LIBOR, which is in the interest rate that banks charge each other to borrow money, could increase if the loan resets in November or December because of the recent increase in the index's rate. Most ARMs are set to the one-month, three-month, or six-month LIBOR. Homeowners who are concerned about possible payment increases should contact their local bank, credit union, or mortgage broker to rewrite their ARM into one with a fixed interest rate, if possible.

· Rates on adjustable-rate mortgages are determined by two factors –the loan's index (LIBOR, COFI, Treasury) and the lender's margin. A guideline to help determine the new rate when a loan resets is to add the lender's margin to the new index. For example, if a homeowner's ARM resets according to the six-month LIBOR index, which was 3.70 percent as of Oct. 22, and the lender's margin is 2.5 percent, then the new rate would be 6.20 percent.

· Some mortgage brokers recommend that homeowners who have ARMs and are unaware of to which index their loan is set, should review their loan documents again to determine if they should consider refinancing into a new loan with a fixed rate or possibly one linked to a different index.

To read the full story, please click here:
http://www.mercurynews.com/localnewsheadlines/ci_10830812?source=rss

JUST LISTED

Green Tip of the Week: Front Loaded Savings

FRONT-LOADED SAVINGS
In the market for a new washing machine? Choose an ENERGY STAR variety, of course, but also opt for an horizontal-axis (front-loader) washing machine, which uses far less water and 60 percent less energy than top-loaders.