Money Beat

The government needs to check and see why a Reo Mortgage company is charging excessive closing costs to buyers and the sellers listing realtor. Also the closing service they provide is substandard as well as overpriced. This looks like price gouging to me.

Maybe I'm too simple minded to understand this mess, but I wish subprime loans would be outlawed, all banks would be forced (in next 60 days) to re-work subprime loans into longer term fixed rates (they would get all their money back, just take 40 years instead of 30) and that $700 billion was used to give every American adult $2,500 plus $1,000 per child. That would cost much less than $700 billion and each family could use the stimulus to pay their mortgage, pay off some debt, put in savings, or for those that must, go spend. All of that money would end up back in the economy whether through banks or retailers. Then these goofy mortgages would be reworked, and we would go back to the way it was where you had to prove to the bank that you could save money first (down payment), and second could afford to pay back what you borrowed (decent credit history). We don't all need a first home with marble counters, a bathroom for every child, top of the line stainless steel appliances, a landscaper, a two car garage, flat panel TV's and three video game systems. I just read an article in the local paper about a poor family struggling in their subsidized apartment to save for a home. The child in the background was playing a video game on a 42" or larger flat panel TV and the furniture was nicer than what I can afford on a decent income. We need to get our priorities straight, and we need to stop coddling the banks with big payments for their bad behavior.

I’ve heard such bad stories ... people were talked into taking out loans that they really couldn’t afford,” she said. “That’s one of my big fears.”

I keep hearing this stupid excuse or variations of it. Where are peoples spines, where is their financial responsibility. DUH! "oh they talked me into it, I didn't want to do, so it's their fault" "I didn't do anything"

As for buying, now would be the perfect time, while prices are low, it will help get the economy going. Just take responsibility for your actions, do your research and stay within your means.

Keep it simple, only buy what you need, not what you want. People stop trying to be like the "Jones" , it's not worth it. Stop worrying about what others think, theyare not worth it. If you spend too much you will not be able to save in case something bad happens.

I keep think of one of the home buying shows I watch...they go and view a couple of different homes and then pick which they will buy. This one couple was looking at houses and one in particular was over their budget, of course the woman fall in love with it and she looks at her husband and says "if we eat hotdogs for dinner every night we can afford it"....sort of sums up this mess for me. Eating hot dogs every night is not a financial plan

I am loving this tool. I created a better plan than my financial planner gave me. I fired him. I’m done with paper financial plans.

Voyant:

http://www.planwithvoyant.com

I had been trying to buy a house for the last year. I put an offer in for 3 houses and I lost out on all 3 after some "Investor" came in and outbid me. Way to go jerk, now my dream of owning a house has disapeared and I will have to rent for the rest of my life.
This is not the life I ordered!

I feel the government ought to freeze all mortgages at 3% interest, previous loans and new all together, let the banks have to reamortize the profit and lower the payments. That way the payments go down so people can keep their homes, less foreclosures and the banks won't get stuck with homes they can't sell and make a small profit but not the big bucks they are charging some in interest. I know I'd say 500$ a month on my mortgage which would make it more like 1/3 of my wages instead of half. Even if the house is underwater, most people would choose to stick it out if they weren't struggling to make the payments.

This is a comment for petek. As a real estate agent, I can tell you that if you are being outbid by investors, you are not putting in fair offers for the houses. Investors will back out if a property is overpriced (or even if it is not a great deal). They are not making decisions based on emotions, like most home buyers, but rather based on what is a good financial decision. If you want to know how much to offer so that it might actually be accepted, look at other similar properties that have sold very recently, and offer close to tht amount. Don't blame others for you trying to make offers that are too low! Educate yourself.

This is exactly the government needs to allow the foreclosures to happen. People like this (Nancy Nichols & ME) who were responsible & didn't buy a house we couldn't afford will come into the market & buy the houses now that they ARE affordable.

Government needs to stay out of the housing cycle!

petek.... I here ya. I am in the same exact boat as you. Except I've lost 4
homes 1 because of the sellers agent didnt want to have to split the commision with my agent... so she went out and found her own buyer for the same price I was offering and never submitted my offer to the seller. Hows that for ethics! I'll be a first time buyer if all of the planets line up in perfect alignment and I hold my mouth the right way, and jump thru the hoops like a good boy. But I have found that people here in the midwest still think
they're homes are worth top dollar appraisals for 2 years ago. And that is not the case. Reasonable offers will not be excepted is their mentality. So
my wife and 2 daughters are still homeless even with 10,000 cash to put down and perfect credit. Only in America!

Keramel..... real estate agents are as bad as lawyers. You're all cut
throat, backstabbing, and lack any ethics in your profession. It's all about the money to you. Not about getting a needy family off of the streets and into a nice home.

She should get on the The Treasury Department's website...there is a link to the IRS repossessions...there is a house in Cheyenne, she can afford...why buy it outright for market now...this isn't a great time to buy PRICES are gonna continue to drop...

To Keramel,

You comment: "This is a comment for petek. As a real estate agent, I can tell you that if you are being outbid by investors, you are not putting in fair offers for the houses."

Keramel, perhaps your common sense answer would have some reality if investors were behaving rationally not making very RISKY offers based on some irrational sense of market invulnerability. It *was* commonplace for investors to make inflated risky offers with intentions to flip the property based on the going rate of property value inflation.

Those days are gone. And yes, Petek's opportunity to buy if his/her credit is less than perfect is now gone.

pooreducatedtrashnUSA - There are good and bad people in every profession, you have to look around and be careful about who you deal with.

I do believe, however, that not everyone should buy a home. The first thing I do when working with a first time buyer is educate them about the expenses involved in buying and owning a home, and getting them a meeting with a reputable mortgage broker who will not take advantage of them. I encourage them to look within a price range that is comfortable for them. If they cannot find what they want in their price range, it is best to wait until their financial situation improves.

XFreemanX - I see what you mean, but I was under the impression that Petek had been looking for a home after the bubble burst. If that is indeed the case, and his or her credit is ok (he didn't mention any credit problems?) he should keep looking for a good deal, and make a reasonable offer. Investors are likely a lot more cautious these days.

lenders should go to the old fasion way. fill out a cedid application and check it out them selves before making a loan. Get rid of these credit reporting outfits that can make or break your credit look good or bad as they desire(if they make a mistake to bad). Alot of good people get in atemporary bind, this don't nesscarily make them a bad risk.

Keramel why are you so mean? I have educated myself, attended short sales classes, spoke with probably 10 realtors and yes the offers i have made are within selling prices of others. I even offered the asking price. My credit is very good what else would you like to chastise (sp) me for? Good god not all of us are rich like you. You give Realtors a bad name. Educate youself! What a cruel comment! You don't know my fianancial situation, which by the way is very good

If she takes out an FHA/ HUD Loan she doesn't need a score of 700. The rate's between FHA and Conventional are very comparable. The only big difference is an upfront Mortgage Premium with FHA. Usually 1.5% on the purchase price. The minimum down payment is 2.25%. The Buyer only needs 3% of their own money. This money can be gifted by a relative. Take your monthly debt(including your new house payment)and divide by your monthly gross income. If that percentage is below 30% then you should be able to afford your new mortgage payment comfortably.

I wish her luck, but she has the advantage of location. Living in Southern CA, you cannot buy a "median-priced" home. It takes about $500k. Do the math.... to avoid getting a jumbo loan, you'd need about $100k down. I was hopeful that this downturn would allow responsible savers to enter the market, but all these bailouts, talks about allowing judges to reset rates -- puts less homes on the market and keeps prices higher than they should be. It's madness. I feel like I'm missing out again on home ownership, through no fault of my own.

I also was struggling to repair my credit after it was trashed after a nasty breakup. I decided that now WAS a good time to buy. My mortgage broker here in Atlanta (thanks Leah!) hooked me up with FHA and I have a 6.5% interest rate with still imperfect credit.

More than that, I have a home. I was actually able to be approved for $250k, but went with $110k. I have a wonderful home without needing to be excessive. I also have money to stuff into savings just in case. I highly recommend FHA :)

that is good to hear good things.. my only suggestion is dont go with hsbc that are awful and i do mean awful and if they can stick it to you they will. I cant believe noone has ever gone after HSBC MORTGAGE//
Be very careful when signing papers and think about everything and good luck to you

Here's some advice:

1) Get your preapproval loan first. They may offer you $150,000 loan but only purchase a $100,000 house.
2) Make sure the loan is 30 years fixed no exceptions!!
3) Make sure the monthly payment with property tax and insurance is either the same or just slightly above your current rent. You must be able to afford the payment.
2) Go with a HUD/FHA or State Housing Loan or VA, if you can.
3) Pay at least 5% down or better yet 20% down.
4) Have NO CREDIT CARD DEBT AT TIME OF PURCHASE.
5) Have NO CAR LOAN PAYMENT AT TIME OF PURCHASE.
6) Have at least 3 months of salary saved up.
7) Find a house, which has good bones. Have it inspected. No plumbing, electrical or foundation problems. Roof and siding should last at least for the next 5 years. Windows should be energy efficient and the house should be insulated. Don't fuss over the paint, carpet, flooring or decor. This will all change even if the house was brand new.
8) If you go with a Realtor do what your gut tells you. Not what the realtor tells you.
9) Do your own research and find out what other homes of similar size have sold for. Don't rely on the realtor to do the research. They will find 3 of the highest priced homes of similar size sold in the last 6 months. It won't be a good sample.
10) Offer less than those comparable homes.
11) Keep looking until you find one.
12) Remember offer a quick closing date. This will always encourage the sellers to sell to you.

Calculate how much monthly payment you can afford and don't go above it. be sure and include taxes and insurance and maintenance costs. You are responsible for your actions...nobody else..nobody can talk you into anything. Do not take on debt you cannot pay back. In the end, every American is responsible to pay their bills. Had we all done this, there would be no current financial crisis.

Use a local bank where you can actually talk to someone in person. Don't go with a mortgage broker. It must be a bank or credit union.

Last but not least. Understand the paperwork you will sign at time of closing before you show up at the title company. Talk to the banker first and have them explain the paperwork before you show up. If at closing you have questions - DO NOT SIGN. Call the banker right away while your sitting at the title company. Ask the questions? Make them come down to the title company to help you, if need be. Remember once you sign there is no going back. The bank will not modify that loan for you for anything. The closing papers should match exactly to the truth in lending papers they gave you a few days before the closing. If they don't, then the paperwork was filled out wrong and it needs to be fixed before you close.
Most banks will give you copies or allow you to view the loan papers the morning of close so you can ask questions before you show up at the title company.

As much as I would love to own a house, I'd prefer to rent my apt. No responsibilities, super and maint crew are the best and will do anything for any tenant, we have a big court yard, big built in pool, tons of kids playing well together. My daughter loves it here, safe area for the kids. My place looks more like a condo set up and it's beautiful. Besides, I'm going to inherit a house soon and there's no mortgage payments. I'll wait....