Watch out for Predatory Lenders

Do you think you might be dealing with a predatory lender? Sometimes it is hard to tell. All predatory lending practices are illegal, but some may seem more harmless than others.

For example, if the appraisal says a property is worth a certain amount, then the property must be worth that amount, right? Maybe and maybe not. Check to see what other homes in the immediate area are worth. If the one you hope to purchased doesn’t seem to be grander then others, yet it appraises for a lot more, this should raise a red flag.

The whole point of applying for a mortgage is to buy a property, so if a lender is offering you money, you should take it right? Perhaps. It is illegal to knowingly lend someone more money than they can afford to repay. It is also not ethical to tell borrowers to “fudge” details about their earnings or finances so they can qualify for a loan.

Many borrowers like their lender or they want to like their lender since this is someone who is in a gatekeeper position. And it is wrong for a lender to take advantage of someone’s trust to cajole that person into buying more house than they can afford. It is also not good if you feel any pressure from your lender to agree to a high-risk loan, such as one that has very stiff penalties for prepayment or one with interest-only payments.

Keep the Heat In

The recent cold snap we experienced reminded me that even though winter comes every year, we sometimes forget about the preventative maintenance we can do to prevent cold weather from being a hassle.

I was talking with a friend recently who told me that when the temperatures dropped, her pipes froze. These tips are too late for her and they may be too late for you if this also happened to you recently, but it is good to be reminded for the future.

Here are some things you can do to keep your pipes from freezing and to keep warmth in the house overall:

-Close the damper for your fireplace (when you are not using it).

-Have ducts checked for air leaks.

-Look for and stop drafts. There are some drafts (like the ones near doors and windows) that you can find easily yourself. Other drafts (like ones in the attic) may require an expert’s assistance.

-When you know temperatures will drop severely, leave the faucet running. Not at full blast, but just enough so some water trickles out.

-Open the cabinet doors under sinks. This way the warm air that is flowing in the house will reach the pipes.

Painting Tips

Painting involved more than just picking a color and slapping it on the wall. Here are some tips to make your next paint job look great.

Put it to the test
Once you’ve finally decided 1) to go ahead and paint and 2) on a paint color, it can be tempting to just get the job done. Not so fast. You can save yourself a lot of hassle if you take the time to test the paint first.

Buy quarts in several shades of the color you want and paint a little of a wall with each one. Allow the paint to dry and see how it looks over a few days. Then you’ll see that the shade you thought was perfect may not be quite right. Or you may find that your first choice is best. Either way, it is better to give it a trial run.

Don’t be afraid to mix it up
Professionals know that no two paint cans are exactly alike. There can be a slight difference between different cans of custom-color paint. But how can you assure yourself that these slight differences won’t affect how your home looks? By mixing all of your paint together. This is called “”boxing.” When you “box” you paint you pour all of the paint into a large (5 gallon) bucket and mix it up. This mix will dilute the effect that any slight differences in shade or tone that one can may have. After mixing the paint in the large bucket, you can return it to the smaller cans because it is not easy to paint using a container that large.

Do a little blending, too
Adding just a few tablespoons of the wall paint to the trim paint will help the two blend together much better. Just a bit, though. You still want them to be different colors.

Strict Foreclosure

It may seem odd to see foreclosure preceded by the word “strict.” For those who have experienced it, the addition of the word strict may seem redundant. But strict foreclosure means that a homeowner has limited prospects for recovering their home. With non-judicial foreclosure, a homeowner has more opportunity to prevent their home from being taken away.

With a strict foreclosure, there is no sale. The house title transfers back to the lender. The lender can then employ a real estate agent to sell the house and the money from the sale is applied to debt still owed by the homeowner.

However, as we know homes don’t always sell for what they are worth (or what we think they are worth). In the case of strict foreclosure, if the sale does not bring in enough money to cover the debt, them the homeowner who defaulted is still responsible for the difference.

Foreclosure is to be avoided at all costs. Of the three kinds of foreclosure that I have described, this is the kind that you really do not want. With a judicial foreclosure, there is a lawsuit involved. A non-judicial foreclosure does not involve a lawsuit and a homeowner can find a way to pay what is owed or work out an agreement with the lender.

If you are facing foreclosure, call me at 410-507-2909 or write to me at john.day@longandfoster.com

You can also click on the title of this post and be directed to foreclosure information on my website.

Non-judicial Foreclosure

I discussed judicial foreclosure last week, so now I want to look at non-judicial foreclosure. As you can imagine, there is no lawsuit in a non-judicial foreclosure.

First the lender needs to put out a notice that the mortgage is in default, as well as a notice that the property will be sold.

All is not lost, however. A homeowner can save the property from being sold by paying the lender what they owe or by settling with the lender. If the homeowner and lender can reach some kind of agreement about payment terms and the lender agrees not to continue with the sale of the property, then foreclosure can be avoided.

There are various possibilities for agreement. A homeowner and lender can outline a repayment plan. A lender may agree to allow the homeowner to delay payments for a time.

Yes, foreclosures are occurring at an alarming rate, but you do not have to be part of that statistic. Do what you can to avoid foreclosure. If you are currently facing it, do what you can to work with your lender. You don’t have to face it alone, either. Don’t be afraid to seek expert help.

I am available if you have questions about foreclosure. Call 410-507-2909 or e-mail me at john.day@longandfoster.com.

You can also click on the title of this post to view foreclosure information on my website.

Judicial Foreclosure

Did you know that there is more than on kind of foreclosure?
For the next few days, I’ll be looking at the different kinds of foreclosure, so you can be better informed about the process.

A judicial foreclosure is one that involves the court system. If a homeowner defaults on a mortgage, then the lender can bring a lawsuit against the homeowner. If the homeowner does not respond to the lawsuit, the lender wins the case. If the homeowner does respond, then there is a hearing. If the judgment is in the lender’s favor, then the home goes to auction, where it will be sold to the highest bidder. The highest bidder becomes owner of the property once the court has confirmed the sale.

There is a judicial foreclosure when there is no power of sale clause in the trust/mortgage deed. The inclusion of a power of sale clause means that the lender can foreclose on the property without a lawsuit.

If you have questions about foreclosure, either because you are afraid of it, it has happened to you or you are interested in buying a foreclosed property, visit my website. You can also feel free to contact me at any time. Call 410-507-2909 or e-mail me at john.day@longandfoster.com.

Check back on Monday for more information on foreclosure.

What Is Foreclosure?

That word gets thrown around a lot, but do you know what it means?

It is when someone who has borrowed money from the bank to pay for a property missed payments. When payments are missed then the institution that lent the money for the purchase of the property can decide to foreclose the home. Missing payments means the mortgage is in default.

In plain English, if you miss payments, the bank can take your home. The bank can take possession of the property or sell it. In most cases, a bank opts to sell.

You should know that many banks can declare that you are in default after three missed mortgage payments.

Foreclosure is an unfortunate situation, but it can be avoided. If you think your financial situation has been altered to the point where you cannot make payments on your home, please consider selling before the mortgage is in default. There is no shame in selling your home under these circumstances. It is better to sell it yourself than to have the bank come in, foreclose on the property and sell it themselves.

When you need special help, I have the experience to sell or help you buy a foreclosure, bank owned property, or short sale without headaches. Many properties of this nature can be purchased at below market prices even in with current market trends.

Click on the title of this post to go to my website and learn more.

Bank of America is set to buy Countrywide

In case you haven’t heard the latest news in the finance and mortgage industries: Bank of America has announced plans to buy Countrywide.

Some experts feel that this buyout could give a tiny shot of confidence to an industry that has been badly shaken in recent months. In no way does this deal mean that everything is now okay, but every little bit helps.

If you are a Countrywide customer, you may notice nothing new, other than being asked to send your mortgage payment to a different address. Or the fact that you get more marketing mail from Bank of America.

Countrywide is the country’s largest mortgage servicer. One is six homeowners has a loan through Countrywide, a company that has a reputation for trying to work with customers to prevent foreclosure. There is some talk that Bank of America may be less accommodating, but no one knows that for sure.

One group of people that may be affected are those who have large accounts with Bank of America. It is possible that having a mortgage and banking at the same place could result in exceeding FDIC coverage limits. People in that situation do have options, however. There is extended coverage available, especially if you have more than one kind of account.

When It Comes to Your Credit, It All Adds Up

You may have heard about this thing called a FICO score, but does it remain a mystery to you? Well, let me shed a little light on the subject: that mysterious number that is your FICO score is the key to getting a great rate on your mortgage. Your FICO score provides a compact view of how you use credit. Although lenders do examine credit history, seeing your FICO score lets them know right away if you qualify for a loan.

The following percentages are approximations, but they will give you an idea of how different criteria are weighted for your FICO score.

PAYMENT HISTORY 35%
Recent late payments hurt, but good financial management can lessen the impact of older late payments.

AMOUNTS OWED 30%
Lenders want to see that you use credit, but they don’t want to see that you are nearly at the limit for every type of credit you have.

CREDIT HISTORY 15%
Check for unused accounts, but be careful: an older account with a zero balance can help your score. Don’t close these accounts.

NEW CREDIT 10%
Shopping is good if you are applying for a car or house loan. Having several of these inquiries in a short period of time won’t damage your score.
Shopping is bad when you are looking for ways to get credit and open multiple new lines of credit in a short period of time.

CREDIT TYPE 10 %
Lenders want to see variety—loans, credit cards, home equity lines—this shows that you can handle different types of credit.

Preventing falls in the home

If you are over 65, live with a relative who is that age, or frequently have guests who are that age spending time in your home, you should take some precautions to prevent falls.

Every room in your house can be “fall proof” if you take the time assess possible dangers and do some rearranging.

Bathroom:

• Use non-skid adhesive strips on the floor of the bathtub or shower. These strips can serve as decoration and as a safety precaution.
  

• Put grab bars on the walls near the toilet and bath/shower area. Having these bars to hold onto can make a world of difference.
  

Kitchen:

• Don’t try to get to high cabinets on your own or by standing on a chair, and don’t allow your guests to do attempt to do this either. Use a sturdy step stool, preferably one with a handrail.
• If you must wax your floors, use the non-skid variety.
• Don’t allow spills to go unnoticed because they create a safety hazard.

Throughout the house:

• Get rid of wobbly furniture.
• Get rid of furniture that sits really low. If you cannot part with these pieces, warn guests about this furniture or offer to help them get up.
• Be prompt about repairing loose floorboards.
• Don’t allow electric cords to block walkways.
• Use slip-resistant backing to keep area rugs in place.

Purge!

A recent article in the Post called on area residents to get rid of clutter for a good cause. I couldn’t agree more with this rallying cry, for many reasons.

If you are even remotely considering the possibility that you might want to sell your home in the near future, you need to get rid of excess stuff. Why? Because a streamlined home is easier to assess. You will get a better view of your home’s assets and flaws that need to be touched up before your home goes on the market if you can actually see your home (and not just your purchases).

The holiday season just ended and many people probably have more stuff in their homes than ever: all of the stuff they’ve kept for years, plus holiday gifts. Take some time to go through old things that you don’t need/use anymore. If they are suitable for further use, why not give them away?

And those of you who want to purchase a home are not off the hook, either. Before you check out one listing, take time to sort through what you have in your current home or apartment. There is no point in buying a home and hiring movers to transport lots of things you really don’t want anymore. Think about it: you know you have some things that have traveled with you over the years that you meant to get rid of years ago. Things that have been with you since college, or furniture that you hope to use “someday” that is taking up space in the garage.

Let something go and get ready to enjoy a spacious new home.

Read the full article here.

Don't Forgo Final Walk-through

If you’ve purchased a home, you probably have a final walk-through scheduled. But what is it? This is a time to make sure that the home you are buying is in acceptable condition. It is your time to verify that the repairs you requested were actually made.

It is also a time to make sure that nothing has happened to the home that would make you reconsider. There are horror stories about plumbing disasters or trees falling onto a roof right before a sale is finalized, but really barring the unusual, you have little to worry about. You are more likely to find that a repair was left undone than you are to find that the home you want to buy has been struck by disaster.

The final walk-through can take place in the week before or even the same day as closing. If there were defects already present and acknowledged in the sales contract, this is not the time to demand they be fixed. It is the time to assure yourself that you are getting the house you agreed to buy and to really check thoroughly to see that the agreed-upon repairs were carried out.

No matter how busy or harried you are in the days and hours that lead up to closing, you really should not forego a final walkthrough. It is important to get this last look at a property before you sign on the dotted line.

Homeowner Resolutions for 2008

The new year has just arrived and with everyone making resolutions, it is a good idea to make some commitments with regard to your home. Resolve to be a better homeowner and take better care of your home. After all, it is one of your most important investments, and it is up to you to take care of it.

Homeowner Resolutions for 2008
Resolve to keep a watch on your credit rating
This will allow you to monitor your credit to safeguard yourself from fraud and mistakes. You will know the shape you are in when it comes time to refinance, sell, or buy additional property.

Resolve to know what’s in your home
If you have already taken an inventory of your home, it is time to update it. If you have never done so, take a little time to do it now. You should make a list, take pictures, and if possible keep a copy in a safe deposit box at your bank.

Resolve to put maintenance on a schedule
Rather than looking up and realizing that you need firewood, that pests are creeping in, or that the gutters suddenly need cleaning, why not set up a maintenance calendar? Write down reminders or set up automatic ones online.