40 Percent of Homeowners Take First Loan Offer
An online poll of more than 1,300 homeowners by LendingTree and Harris Interactive indicates that 40 percent made a purchase after receiving only one mortgage loan quote, and 96 percent said they comparison shop except when it comes to mortgages.
The survey also indicates that just 28 percent believe they received the best deal on their mortgages.
About 70 percent of respondents found comparing terms and the process of comparison shopping to be frustrating, and 10 percent spent only a matter of minutes looking for the best deal.
“Our research clearly shows that home buyers and homeowners need help navigating the often complex world of home loan financing,” says LendingTree CEO Doug Lebda.
Source: Housing Wire, Jon Prior (12/14/10)
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Owners, Practitioners Think Prices Will Fall
About 48 percent of real estate professionals and 33 percent of homeowners believe home prices will decline over the next six months, according to a survey by HomeGain.
Only 10 percent of real estate professionals and 18 percent of homeowners believe home prices will increase in the next six months.
Sellers continue to doubt the accuracy of prices recommended by practitioners, with 79 percent believing that their homes are worth more than professional appraisals.
On the other side of the fence, 69 percent of practitioners say that their home-buying clients think homes for sale are overpriced.
Source: Real Estate Economy Watch, Steve Cook (09/21/2010)
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Banks Again Offering Home Equity Lines
Now might be a good time for homeowners who still have plenty if equity in their home to tap into it.
Lenders are again writing home equity lines of credit, says MortgageBot, which processes real estate loans.
Homeowners with more than 20 percent of equity in their homes may find the HELOC a better source of emergency cash than a credit card as long as they don’t exhaust their equity.
Source: CNNMoney.com, Linda Stern (12/14/2009)
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Home Owners Would Spend Tax Credit Wisely
A survey of homeowners by Coldwell Banker Real Estate found that 20 percent said they were more likely to consider purchasing a new home after learning about the $6,500 tax credit than they were six months ago.
Of the more than 1,000 homeowners surveyed, 83 percent said that if they were to purchase a home and qualify for the tax credit, they would pay off debts, make home improvements, add it to savings or use the money for household expenses.
Only 6 percent said they would spend the money on a luxury item like a vacation or a shopping spree.
Source: Coldwell Banker Real Estate (12/16/2009)
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U.S. to Offer Incentives to Modify Seconds
The Obama administration is announcing incentives today for mortgages servicers to modify home equity loans and other second mortgages.
Servicers must agree to modify second mortgages when the first mortgage has been modified. They must extend the term of the second mortgage and match the rate of the first mortgage. Then the government will share the cost with the servicer of cutting the rate to 1 percent for amortizing loans and 2 percent for interest-only loans.
Under the program, the government will pay mortgage servicers $500 upfront and $250 a year for three years for the modifications. Borrowers will receive payments of up to $250 a year for five years if they stay current on the modified loan.
There will also be a schedule of incentives for holders of second liens to drop their claims altogether.
The Department of Housing and Urban Development and Treasury will make the announcement jointly.
Bank of America, Wells Fargo, and JPMorgan Chase have already agreed to participate in the program.
A separate announcement will include changes to the Hope for Homeowners program, which helps homeowners refinance into more affordable government-backed loans. To get this program moving, the administration is announcing a $2,500 upfront payment to servicers. Lenders will receive $1,000 a year for three years if the loan stays current.
Source: The Wall Street Journal, Jessica Holzer (04/28/2009)
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Some homeowners see giving up as best option
In decision balancing stress and credit score, an Atlanta couple walks away.
Teresa Bondora and her family abandoned their two-story brick home in Atlanta rather than fall behind on their mortgage and $30,000 worth of home renovation debt.
The decision was tough for Bondora, a home-schooling curriculum developer raised to believe that preserving good credit and paying bills on-time were key adult responsibilities.
“I was willing to walk away and live with someone else while we get out of debt,” Bondora says. “I’m not worried about anything anymore.”
Bondora isn’t the only homeowner making an about-face in her approach to the stigma of foreclosure; if anything, homeowners like her see that efforts to prevent foreclosure may make them more financially vulnerable than succumbing to it and starting anew.
Despite new refinancing and loan modification programs made available under the Obama administration, mortgage experts say that many homeowners still face difficult choices in the short run. The latest options may not affect the market for a few more quarters, they say.
When the real estate market first showed signs of weakness in fall 2006 — right when the Bondoras listed their home for $170,000 — the family faced tough circumstances. They watched at least a dozen seemingly qualified buyers fail to secure financing, and as Bondora’s husband, a contractor, began to see work evaporate. Full Story.
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Obama throws $75 billion lifeline to homeowners.
MESA, Ariz. — President Barack Obama threw a $75 billion lifeline to millions of Americans on the brink of foreclosure Wednesday, declaring an urgent need for drastic action — not only to save their homes but to keep the housing crisis “from wreaking even greater havoc” on the broader national economy.
The lending plan, a full $25 billion bigger than the administration had been suggesting, aims to prevent as many as 9 million homeowners from being evicted and to stabilize housing markets that are at the center of the ever-worsening U.S. recession. Full Story.
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