Free Phoenix MLS. Phoenix Real Estate. Phoenix AZ Foreclosures » Mortgage Info

Short Sale Plan Will Help Phoenix Families

admin — Wed, 21 Oct 2009 22:37:29 +0000

Short Sale Plan Will Help Phoenix AZ Families

A major joint venture for Short Sales was announced late Tuesday (Oct.20). RE/MAX International issued this press release: Contact The Cutty Group of Re/Max Desert Showcase For More Info on This Short Sale Program 623-252-5591

Real Estate Leaders Unite to Reduce Foreclosures New Short Sale Strategy Designed to Help Homeowners Avoid Foreclosure

RE/MAX International of Denver, Colorado and HEART Financial Services of Northbrook, Illinois have agreed to work together to help homeowners avoid foreclosure. The real estate franchisor and loan modification leaders have created a unique pre-foreclosure or “Short Sale” strategy that will make it easier for families to sell their homes and avoid the trauma of a foreclosure.

“It’s unfortunate that the Short Sale process has been so difficult to navigate in this marketplace,” says Dave Liniger, Chairman and Co-Founder of RE/MAX International. “We’ve been working hard to promote streamlined Short Sales to provide both significant benefits to lenders, and a welcomed opportunity for homeowners to get a fresh start.”

At-risk homeowners who do not qualify for a loan modification will now have a viable alternative, and will not be forced into foreclosure. Lenders that offer loan modifications to their at-risk borrowers will be invited to participate in this new Short Sale program.

Trained customer service representatives will provide detailed Short Sale information to all homeowners who cannot obtain a loan modification or do not wish to retain their property. If a homeowner believes that a Short Sale might be appropriate, they are directed to a secure Internet website where they can obtain more information, and select a real estate agent in their community who has received comprehensive training on the Short Sale process. RE/MAX has designed this unique online database to assist homeowners with Short Sale information and easy agent referrals, and will use the closing management services Integrated Asset Services of Denver, Colorado.

“It’s been our experience that many homeowners aren’t even aware that Short Sales are a reasonable alternative to foreclosure,” says Jerry Alt, President and Chief Executive Officer of HEART Financial Services. “Each month we speak with thousands of homeowners who can’t qualify for or don’t want a loan modification. For the most part, when we refer them back to the servicer for a potential Short Sale, we lose the opportunity to help the borrower while we have them on the phone. Now, we can offer these homeowners some hope and a more efficient process to list and sell their home.”

The number of homeowners who could rely upon a Short Sale may be in the millions. According to realtytrac.com, July, August and September had the highest foreclosure numbers on record and some analysts say there is a “shadow” inventory of foreclosed properties as high as 7 million, which could start hitting the market in a few months. Out of all the applications reviewed for a loan modification, less than 50% are successful. And a high percentage of successful loan modifications eventually re-default.

“We have been talking to numerous industry leaders, legislators and Administration officials trying to draw attention to the Short Sale situation,” says Liniger. “It’s just not possible for the housing market to recover fully until the inventory of foreclosed properties is significantly reduced, and Short Sales offers one practical way to help do this.”

There are over 11,000 real estate agents in the United States who have received the Certified Distressed Property Expert (CDPE) professional designation. Over 60% of those are affiliated with RE/MAX. In addition, the National Association of REALTORS also offers a similar Short Sale, Foreclosure and REO (SFR) designation. Agents who have received special Short Sale training like these designations could be selected to participate in this new Short Sale program.

Short Sales can occur when a lender agrees to accept a sales price for a home that is lower than what the homeowner owes on the mortgage. The Short Sale transaction is more complicated than the average real estate sale and consumers are urged to deal with agents who have specific training in the process.

Contact The Cutty Group of Re/Max Desert Showcase For More Info on This Short Sale Program 623-252-5591

HEART Financial Services will begin offering the newly developed Short Sale process to the loan modification applicants of their clients within the next few weeks.

# # #
About HEART Financial Services
HEART Financial Services, LLC is headquartered in Northbrook, Illinois and has over 200 professional customer service representatives and loss mitigation negotiators dedicated to assisting mortgage borrowers. Since mid-2008 HEART Financial has worked with over 800,000 consumer mortgage borrowers and has achieved closing rates in excess of 40%. No fees are charged to the consumer for working out a suitable plan for home retention. As one of the largest loan modification facilitators in the country, HEART Financial has a proven record of reaching the problematic “no contact” borrowers before a decision to foreclose has been made and achieves higher resolution rates than industry averages. HEART Financial is dedicated to developing successful outreach programs for our servicing clients to engage their customers in a meaningful manner to work out a suitable solution to avoid foreclosure.

Free Phoenix MLS Search
Features Full and FREE access to ALL Phoenix MLS Metro Area Listings of all homes available in: Phoenix, Scottsdale, Paradise Valley, Cave Creek, Carefree, Sun City, Peoria, Glendale, Surprise, Buckeye, Avondale, Tempe, Chandler, and Mesa, Arizona. Find REO’s, Short Sales,Bank Owned, Foreclosures! The Cutty Group!

Share and Enjoy:

Two AZ Foreclosure Rescue Firms Fined

admin — Wed, 21 Oct 2009 16:41:12 +0000

Two AZ “foreclosure rescue” firms to pay $1.37 million in fines, restitution

The Arizona Attorney General’s office has settled two mortgage fraud lawsuits for $1.37 million. Most of the money will go towards paying restitution to consumers who lost money to the “foreclosures help” firms.

Richard Winer, principal of the firm Taken Care of Investments, has agreed to pay fines totaling $691,000,half of which goes to consumers who lost money to the firm, according to a Maricopa Superior Court consent judgment.

In March, Attorney General Terry Goddard’s filed a complaint alleging Winer and his businesses defrauded 270 Arizona homeowners in danger of foreclosure, by promising to obtain the deed to their home and then lease it back to them. But instead, homes were sold to investors who usually evicted homeowners. Winer is consenting to pay the fine without admitting guilt.

According to court documents, Winer and his salespeople persuaded struggling homeowners to deed him their homes in return for Winer assuming their monthly mortgage payments and paying off the full value of their delinquent payments.

Winer charged homeowners a monthly fee that was as much as the mortgage payment. Neither the owner’s mortgage lender nor servicer was notified of the transfer of title.

These owners-turned-renters had the option to repurchase the house from Winer within one year for approximately $15,000, if they met all of the conditions of the sale-leaseback agreement. If the owner-turned-renter didn’t meet any of the conditions, which included never being late on a payment, the option to repurchase the home was cancelled. The former homeowners could then be evicted immediately.

A man who answered the phone at the Tempe office of Taken Care of Investments said he didn’t know who Winer was and hung up.

Glendale-based Hope for Homeowners Now and its principals, Matthew Castaneda and Michael Winding, have been ordered to pay almost $580,000 in fines, according to a default judgment filed in Superior Court. In July, the Attorney General’s office filed a complaint against Hope for Homeowners Now alleging the company victimized homeowners facing foreclosure by fraudulently claming high success rates with loan modification deals.

According to court documents, Hope for Homeowners Now advertised loan modification services for an upfront fee of $3,195 and then solicited their modification services with claims including: “Over 80% of our customers have tried to deal with their lending institutions on their own and failed,” and “Loan modifications have a very small success rate if you try to do it with a non-profit organization or yourself.”

Hope for Homeowners Now and its principals were served with the lawsuit and notice of a court hearing regarding the State’s claims, but the defendants didn’t appear in court or respond to allegations against them. Due to their failure to respond, Maricopa County Superior Court Commissioner Jay Davis issued a default judgment in favor of the State.

The phone has been disconnected at the Glendale office of Hope for Homeowners.

“These operations misled vulnerable homeowners for profit, with no apparent concern for the damage their actions caused,” said Goddard.

Goddard said law enforcement alone is not enough to stop mortgage fraud. He continues to urge federal and state lawmakers to adopt heightened protections for homeowners, including state legislation prohibiting predatory lending and the creation of a Federal Consumer Protection Agency.

Share and Enjoy:

Reverse Mortgages’ Dangers

admin — Thu, 08 Oct 2009 19:22:34 +0000

Report warns of reverse mortgages’ dangers

CHICAGO – A national consumer advocacy organization added its voice Tuesday to a growing chorus of concerns about the rapid growth of reverse mortgages, comparing the industry to subprime mortgage lenders.

The National Consumer Law Center noted in a report that the use of aggressive marketing techniques to sell a complicated financial product to potentially vulnerable senior citizens requires the adoption of new consumer safeguards and industry standards.

“These problems are eerily similar to those that drove the sub-prime boom,” said Tara Twomey, an attorney with the Boston-based center. “This market could be another financial fiasco.”

Twomey acknowledged that most of the data is “anecdotal at this point” and there was no statistical data to quantify how many reverse mortgage loans were made inappropriately.

In recent years, the market for reverse mortgages, particularly the federally backed Home Equity Conversion Mortgage has taken off in popularity, as strapped homeowners look for additional financial sources. In a HECM, a homeowner age 62 or older can borrow funds against the equity in their home. The loan and the accrued interest does not have to be paid back until the homeowner sells the property, dies or fails to live there for one year. Last year, some 112,000 seniors used reverse mortgages to tap more than $17 billion of home equity.

The number of loan providers has swelled as demand for the product has grown. More than 2,700 lenders offer reverse mortgages, including 1,500 lenders who originated their first HECM last year.

In June, the General Accountability Office issued a report criticizing the U.S. Department of Housing and Urban Development for its oversight of reverse mortgage, saying inconsistent counseling could lead to abusive lending practices. GAO investigators posting as consumers found that the counseling sessions required for FHA-backed reverse mortgages frequently were not long enough, did not cover all the mandatory topics and did not discuss alternative loan products.

A good counseling session would last two to three hours, Twomey said.

U.S. Sen. Claire McCaskill, D-Mo., said she hopes to introduce legislation by early next year that would safeguard seniors and regulate the industry.

“If (the reverse lending industry) goes wrong, not only are these seniors going to lose their life savings but also the government and the taxpayer are on the hook,” she said. “The government won’t really be called upon to make good on these loans until many years in the future.”

Share and Enjoy:

Mortgage Rates Fall To 4.8%

admin — Thu, 08 Oct 2009 19:17:22 +0000

Mortgage Rates Fall To 4.8%

Mortgage rates for 30-year fixed U.S. home loans fell for the second consecutive week, pushing borrowing costs to near record lows.

The average U.S. 30-year rate dropped to 4.87 percent from 4.94 percent last week. The 15-year rate was 4.33 percent, mortgage buyer Freddie Mac of McLean, Virginia, said today in a statement.

Falling rates helped boost home-loan applications last week to the highest level since May. The Mortgage Bankers Associations index of applications to purchase a home or refinance rose 16 percent. Rates around 5 percent, slumping home prices and a government tax credit for first-time homebuyers are bolstering demand for housing.

Were not expecting the housing market to come roaring back to anything close to what it was during the boom, said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida. It’s going to be a long, gradual recovery.

The Federal Reserve set out last year to encourage lower mortgage rates by pledging to buy bonds backed by home loans. It increased the size of the program to $1.25 trillion in March.

The purchases from Fannie Mae, Freddie Mac and Ginnie Mae brought down yields on mortgage-backed securities and allowed lenders to reduce rates on new loans while still selling the securities backed by them at a profit. The plan helped drive home loan rates to a record low of 4.78 percent twice in April.

Applications Rise

Mortgage applications to buy a home climbed 13 percent in the week ended Oct. 2 and the refinancing gauge surged 18 percent.

Recent data indicate the housing industry is emerging from its worst recession since the 1930s. The index of signed purchase agreements, or pending home sales, jumped 6.4 percent in August, a seventh consecutive gain, the National Association of Realtors said on Oct. 1.

Source: Bloomberg News

Share and Enjoy:

New Law Makes Mortgage Fraud A Felony

admin — Wed, 07 Oct 2009 16:25:28 +0000

New law Makes Mortgage Fraud A Felony. $200 Million Fund To Prosecute Real Estate Fraud

New national legislation calls for setting up a $200 million fund to help states prosecute mortgage and real estate fraud cases.

Sen. Jon Kyl (R-AZ) is teaming with Charles Schumer (D-NY) to back the Fighting Real Estate Fraud Act of 2009, which would set up a grant program that local prosecutors, state attorney generals and Native American Tribes could apply for to fund investigations.

Arizona is in the top 20 states for mortgage fraud, according to a Federal Bureau of Investigation report issued earlier this year. Mortgage giant Fannie Mae ranked Arizona no. 5 for the highest rate of “significant misrepresentations” discovered on loans originated in 2007-08.

“This grant program will give state prosecutors the resources needed to investigate and target those who fraudulently profited from predatory lending practices during the housing boom, as well as those who are illegally stripping homes during the downturn of the market,” said Kyl.

Arizona has a new law making mortgage fraud a felony, which should help crack down on some of the scams. Starting next summer, mortgage loan officers must be licensed in Arizona, which will also help.

In the Kyl-Schumer legislation real estate fraud is defined as including “…crime involving purposeful misrepresentations, forgeries, omissions to general applications, tax returns, financial statements, appraisals and valuations, verifications of deposit and employment, escrow and closing documents, credit reports, and any actions that may defraud a secured creditor.”

Foreclosure home stripping started in the Valley last year and continues despite recent arrests and indictments. Stripping a foreclosure home is defrauding a secured creditor and covered in the legislation.

Arizona has a mortgage fraud task force that was formed by state regulators, the Arizona Attorney General, the FBI, the U.S. Department of Housing and Urban Development and other government agencies. The goal is to collaborate on cases and share information to prosecute offenders because proving real estate or mortgage fraud is a much more document-intensive process than proving other crimes.

The Kyl-Schumer legislation calls for local and state groups applying for funds to prosecute and investigate real estate fraud cases through the U.S. Attorney General. About 70 percent of the $100 million would be allocated to local prosecutors and Native American tribes and the other 30 percent would go to state attorney generals.

Earlier this year, Arizona Attorney General Terry Goddard teamed with 17 other state attorney generals, the U.S. Department of Justice and the Federal Trade Commission to launch a national crackdown dubbed “Operation Loan Lies.” The crackdown involves 180 U.S. law-enforcement actions against deceptive loan-modification and foreclosure-rescue firms, including several in Arizona.

Source: Catherine Reagor http://www.azcentral.com/members/Blog/CatherineReagor/

Share and Enjoy:

Phoenix AZ Foreclosures fell slightly in September

admin — Wed, 07 Oct 2009 16:07:43 +0000

Phoenix AZ Foreclosures fell slightly in September 2009

There are some positive signs coming from metropolitan Phoenix’s housing market. Foreclosures dropped slightly in September, while home prices inched up again.

• Last month, lenders foreclosed on 3,759 Valley homes, an almost 5 percent drop from August, according to the Information Market. It’s the second month in a row foreclosures, or trustee sales, have fallen. Pre-foreclosures also dropped in September, a good sign there will be another decline in foreclosures this month. There were 7,857 pre-foreclosures, or notice of trustee sales, filed by lenders last month. That’s an 11 percent drop.

There’s been a big push by the government and non-profits for lenders to do more loan modifications, which could be behind the decline in foreclosures. Whatever the reason, at least for now, it means more people keeping their homes.

• The median price of metro Phoenix home sales climbed to $130,000, according to Mike Orr’s Cromford Report. The median a month ago was $127,000. Home prices, particularly in many of the Valley’s edge communities, have been slowly climbing since April, reports Orr, who analyzes Arizona Regional Multiple Listing Service data.

• New-home prices are up as well. Real-estate analyst RL Brown’s “Phoenix Housing Market Letter” reports the median price of a new Valley home is at $197,948, after hitting a recent low of $183,750 in July.

However, home building fell after showing some gains in recent months. There were 696 single-family housing permits issued Valley-wide. Sales overall were down slightly from August but are still well ahead of last’s year pace.

Gordon’s fellowship

Phoenix Mayor Phil Gordon has been awarded a fellowship with the Urban Land Institute’s Daniel Rose Center for Public Leadership in Land Use. He joins the mayors of Nashville, Minneapolis and Philadelphia in the program, designed to help city leaders build and sustain their cities.

“Mayor Gordon and his administration have demonstrated a commitment to sustainability through investments in planning, building retrofits and solar energy,” ULI Chief Executive Patrick Phillips said.

Gordon’s team is Wes Gullet, partner with lobbying firm First Strategic; Mark Winkleman, former director of the State Land Department; and Debra Stark, planning director for Phoenix.

Reach the reporter at catherine.reagor@arizonarepublic.com.

Share and Enjoy:

FHA Propping Up Housing Market

admin — Tue, 22 Sep 2009 15:02:21 +0000

Obama bolsters program that insures home loans. More homebuyers depend on government-insured FHA loans and defaults are rising. Federal housing officials take steps to lower the program’s risk.

NEW YORK (CNNMoney.com) — With a growing number of homebuyers depending on government-insured loans, the Obama administration is taking steps to shore up the Federal Housing Administration program.

Rising demand and a slower-than-expected rebound in home prices are pushing one of FHA’s reserve accounts below the 2% ratio mandated by Congress, said Commissioner David Stevens. The capital reserves are a cushion against expected losses in the program, which has suffered soaring defaults amid the housing collapse.

The FHA has skyrocketed in popularity during the mortgage crisis since it backstops banks if borrowers stop paying. Housing experts are growing increasingly concerned about the agency’s ability to handle rising numbers of defaults.

The drop in reserves, however, will not require a taxpayer-funded infusion into the housing agency, nor an increase in insurance premiums that FHA borrowers pay, Stevens said. The capital reserves, which are determined by an independent auditor and reported to Congress in November, will rise above the minimum threshold within a few years as the housing market recovers.

The agency’s overall reserves stand at more than $30 billion, a record level thanks to the large influx of premium-paying borrowers, Stevens said. It covers more than 4.4% of its insurance commitments.

“To be clear, the fund’s reserves are sufficient to cover our future losses, so the FHA will not require taxpayer assistance or new congressional action,” Stevens said.

Still, the agency is taking a number of steps to reduce the riskiness of the program, which allows borrowers to purchase a home with as little as 3.5% down. It plans to hire its first chief risk officer in its 75-year history and to increase net-worth requirements for approved lenders to $1 million, up from $250,000. Lenders will also be responsible for any losses resulting from fraud on the part of mortgage brokers.

The changes may eliminate some smaller FHA lenders and will likely weed out some of the riskier borrowers, Stevens said.

These moves, particularly hiring a chief risk officer, are important steps that need to be taken, said Howard Glaser, head of the The Glaser Group, a financial services analytics firm. The agency grew so quickly that it was difficult to monitor the quality — and riskiness — of the loans being made.

While the FHA may want to raise borrower premiums or tighten its underwriting standards if defaults continue to rise, Glaser said the agency’s $30 billion reserve is enough to cover its current loss estimates.

“It’s surprising they are doing as well as they are,” said Glaser, a former Clinton administration housing official.

FHA propping up housing market

As banks have clamped down on mortgage lending, the FHA program has emerged as one of the few ways people can buy a home these days. Banks are more willing to make FHA loans because they come with a federal guarantee to cover losses if the borrower defaults. And borrowers can more easily qualify for FHA loans because they only need 3.5% down and can have lower credit scores.

As a result, demand for FHA loans has exploded. FHA loans now account for 23% of the market, up from 2% in 2006, Stevens said. Some 80% of first-time homebuyers go through the agency.

The agency, however, has also seen a spike in delinquencies amid the mortgage meltdown. Some 14.42% of FHA loans were past due in the second quarter, up .58 percentage points from the same period a year earlier, according to the Mortgage Bankers Association. Just under 3% of FHA loans were in foreclosure, up .22 percentage points.

Concerned about rising defaults, the agency has raised its standards for new borrowers. Only 7.5% of the portfolio has a credit score below 620, down from 50% two years ago. The average score is 690, versus 630 two years ago.

“The quality of the current FHA book is significantly better than anything seen in the FHA portfolios in recent years,” Stevens said. To top of page

Source: http://money.cnn.com/2009/09/18/news/economy/FHA_housing_trouble/index.htm?postversion=2009091815

Share and Enjoy:

How to Understand Second Mortgages

admin — Fri, 18 Sep 2009 18:22:31 +0000

How to Understand Second Mortgages

The difference between a first and second mortgage is simple. A first mortgage is taken out for the purchase of the home, while a second mortgage is taken out on any residual value between the outstanding loan balance and the value of the home.

Usually, homeowners will take out a second mortgage to perform some renovations or improvements to the property, but increasingly, people are using the equity in their homes to reduce or eliminate their high rate credit card debt.

A home improvement is a good reason to obtain a second mortgage, but you should be sure that the improvements you make are going to perform are worth the additional payments you will be making.

Some home improvements, however, are nothing more than luxuries and will not affect the future value. An in ground pool is an example that is frequently used, since there are many buyers (with young children, for instance) who would not care to have one.

Reducing high interest rate debt is another standard use for a second mortgage, as long as you are able to keep your total costs down. Replacing 16 to 20% debt on your credit cards with 5-9% debt on a second mortgage certainly does make a lot of sense.

Creating more debt that is not going to either add value to your home, or reduce your currently outstanding debt is not a good economic decision.

Unlike a first mortgage, a second mortgage will not have priority on your home if you default. The first mortgage on your home would be repaid by your home’s value before any funds go toward the second mortgage.

For this reason, rates on second loans are higher since the bank has that risk, and the possibility of default is higher.

There are closing costs with second mortgages just as there are with first mortgages. Make sure you are fully aware of all of the closing costs you will have to pay for loan, so that you can be sure the total cost of the loan balances the increased value of the home or the savings on the credit cards!

When it comes to second mortgages, you should shop around, both for the best loan rates and for the lowest closing costs, which comprise a greater part of the loan in a second mortgage.

About the Author:Thank you for your interest in this article.Just click oncanada mortgage insurance quoteorcanada mortgage life insurance

Free Phoenix MLS Search
Features Full and FREE access to ALL Phoenix MLS Metro Area Listings of all homes available in:Phoenix, Scottsdale, Paradise Valley, Cave Creek, Carefree, Sun City, Peoria, Glendale, Surprise, Buckeye, Avondale, Tempe, Chandler, and Mesa, Arizona. Find REO’s, Short Sales,Bank Owned, Foreclosures! The Cutty Group!

Share and Enjoy:

Fannie Mae and Freddie Mac will have lower limits on the size of loans they can buy.

admin — Wed, 19 Nov 2008 16:09:00 +0000

Fannie Mae and Freddie Mac will have lower limits on the size of loans they can buy.

WASHINGTON – People looking to buy more expensive homes next year will have fewer options to find financing because Fannie Mae and Freddie Mac will have lower limits on the size of loans they can buy.

The changes, effective Jan. 1, will lower the limit in high-priced real estate markets to $625,500 down from $729,950. Consumers who need to take out home loans above that amount typically pay higher interest rates, and that can price some would-be buyers out of the market.

The Federal Housing Finance Agency, which regulates Fannie and Freddie, kept the limit for lower-cost metro areas at $417,000. Some counties, including parts of Virginia, Utah and Maryland, have limits that range between $625,000 and $417,000.

Lawmakers temporarily raised the loan limits for Fannie and Freddie in a housing bill passed over the summer.

There are fears, however, that the reduced limits will hurt the housing market next year. Fannie and Freddie have become the dominant source of mortgage funding since last year’s collapse of the subprime lending market.

The National Association of Realtors is pressing lawmakers to keep the limit at $729,950 to help the U.S. housing market recover from its worst slump in decades.

Ready to find a home at a great price in the Phoenix Metro Area. Speak To A Professional RE/MAX Phoenix Realtor NOW….Call : 623-979-8888. We can show you foreclosures, Short Sales, REO, as well as any and all homes for sale in the Maricopa area. Search the complete Phoenix AZ MLS for free at http://www.buyphoenixazhomes.com/

Share and Enjoy:

The Ever-Changing Mortgage Loan Requirements

admin — Fri, 18 Jul 2008 14:26:00 +0000

The Ever-Changing Mortgage Loan Requirements

NEW YORK (CNNMoney.com) — Are you ready to buy a house in this crazy market? Better bring a boatload of money to the closing.

In a brutal real estate market where all the players want to hedge against the tremendous risks, down payment requirements and up-front fees have soared, shutting many potential home buyers out of the market.

“I have as many people calling me for financing as ever,” said George Hanzimanolis, a Pennsylvania mortgage broker, “but I’m putting less than half of them into loans.”

That’s happening all over the country, and may slow the housing market’s recovery. Indeed, in a Realtor.com survey released today, potential home buyers said high down payments were the second biggest obstacle, after high home prices, to buying a home.

These days, home buyers almost always have to make a substantial down payment, at least 5%, according to Rich Wordman, president of the Florida Association of Mortgage Brokers. The days of no-down loans are over.

In deeply declining markets, lenders are reluctant to issue loans unless borrowers put at least 10% down, he said.

JP Morgan Chase (JPM, Fortune 500), for instance, now asks for a minimum of 10% down in most markets, according to a spokesman, and for 20% in hard-hit areas. In Reno, Nevada, which has been devastated by the housing crisis, the bank requires 25%.

Even bigger jumbos

For expensive homes, the down payments are disproportionately more. Lenders issuing jumbo loans, which are too pricey to be sold to Fannie Mae (FNM, Fortune 500) or Freddie Mac (FRE, Fortune 500) in the secondary market, are asking for at least 20% down, according to Ed Craine, a San Francisco mortgage broker. In the most expensive markets, where jumbo loans are over $729,000, that means a minimum down payment of $148,500.

Higher interest rates on jumbo loans are also making them more expensive than they normally would be – with interest rates a full point to a point and a half higher than non-jumbo loans, said Mike Tacconi, a mortgage advisor with lender CMG Mortgage Services based in San Ramone, Calif.

And buyers purchasing homes for investment purposes are getting clobbered. Lenders are telling them to come up with at least 25% of the purchase price, according to Tacconi – and sometimes as much as 35%, depending on the kind of loan.

“Rents are high where I am,” said Pennsylvania mortgage broker Hanzimanolis, “so people are having trouble saving enough for down payments.”

Those high down payments are are being driven in part by the privatemortgage insurance companies, according to Jay Brinkman, chief economist for the Mortgage Bankers Association, which have themselves hiked their down payment requirements. These firms insure loans when borrowers put less than 20% down, making lenders whole when homeowners default.

In the past, these companies, such as MGIC Investment Corp (MTG). and PMI Group (PMI), often guaranteed mortgages when borrowers put no money down. Today they require 5%, 10% in steeply declining markets, according to Jeff Lubar, spokesman for the trade association Mortgage Insurance Companies of America.

In addition, private mortgage insurers are also charging higher insurance rates. Historically, PMI cost about 0.5% of a home’s purchase price. Now, a borrower putting 5% down can pay about 0.75% for the first year.

Higher rates

And although interest rates are relatively low, industry experts say that they’re higher than they should be, thanks to concerns about the solvency of Freddie and Fannie, which buy about half of all outstanding mortgages in the U.S.

The average 30-year, fixed-rate loan carried a 6.37% interest rate last week, according to Freddie Mac, up nearly a point from the year’s low of 5.48% set last January and up from under 6% in late May. At the same time, yields on 10-year treasuries, which mortgage rates usually track, have trended down.

From June 12 to July 10, 10-year treasurys fell from 4.20% to 3.81%, while mortgage rates actually increased, inching up from 6.32% to 6.37%. Borrowers are probably paying at least a half point more than they ordinarily would, according to Keith Gumbinger of HSH Associates, a publisher of loan information.

That’s because the questions surrounding the future of Fannie and Freddie have made the investors who buy their loans – hedge funds, pension funds, and banks – wary. They’re demanding higher interest rates to take on the added risk they perceive.

Freddie and Fannie have also imposing higher up-front fees for riskier borrowers, based on credit scores.

As of June 1, buyers with scores of less than 620 with less than a 30% downpayment must pay a fee of 2.75% of mortgage principal, up from 2%. Between a 620 and 640 credit score, borrowers pay 2.5% (up from 1.75%); 640 to 660, 1.75% (1.25%); 660 to 680, 1.25% (0.75%); and 680 to 720, 0.5% (0).

“The fees are costing consumers a considerable amount of money,” said Mark Savitt, a mortgage broker there and current president of the National Association of Mortgage Brokers.

All these added expenses are slowing an already moribund real estate market. That means it’s going to take even longer to get rid of the tremendous inventory of unsold homes, according to the MBA’s Brinkman, especially in areas that were overbuilt during the boom.

Cities hard hit by the housing bust, like North Las Vegas, Stockton, Calif. and Tucson, Ariz, may have to suffer through many more months of stagnant prices and increased foreclosures before they return to better times.

And these higher costs are going to stick around long after housing recovers, according to Brinkman. From now on, they’ll just be the price of doing business.

Ready to find a home at a great price in the Phoenix Metro Area. We can help you find a trustworthy loan company. Speak To A Professional RE/MAX Phoenix Realtor NOW….Call : 623-979-8888. We can show you foreclosures, Short Sales, REO, as well as any and all homes for sale in the Maricopa area. Search the complete Phoenix AZ MLS for free at http://www.buyphoenixazhomes.com/

Share and Enjoy: