Sunday, May 29, 2011

Five blunders to avoid when you refi

From’s Michele Lerner, “5 refi blunders to avoid”

“When interest rates are low, plenty of homeowners rush to refinance before evaluating the true consequences of their actions. A mortgage refinance can benefit some homeowners, particularly if they intend to stay in their home for the long term or if they can significantly reduce their interest rate. Sometimes, though, a mortgage refinance can be the wrong move.”

1. Not comparing the real rate.

Compare the true cost of the new loan with the APR of your current loan. If you are saving less than one-half point, don’t waste your time or money. Remember that Fannie Mae and Freddie Mac have added fees to loans where there’s little equity in the property.

“Borrowers who have little or no equity may qualify for a refinance under the government's Home Affordable Refinance Program, or HARP, available to those with a current mortgage owned or guaranteed by Fannie Mae or Freddie Mac.”

2. Choosing the wrong loan

What’s the purpose of the refinance? Afraid about losing your job, then lower your overall payment. If you want to be debt-free by a certain year, pick a loan that meets that objective.

Remember, closing costs can increase your payback.

3. Not shopping around

“While many borrowers compare loan offers from more than one lender, they can also shop for title services and save hundreds or sometimes thousands of dollars on their loan.”

Check at lease three lenders. Start with the servicer that has your loan now.

4. Refinancing when you shouldn't

If you don’t plan on staying in your home for several years, refinancing may be a waste of money. Know your break even point where the savings outweigh the costs of refinancing.

5. Not keeping up with borrower responsibilities

Keep up your credit score throughout the refi process. A lender can pull your credit report right before closing. So avoid adding new debt.

Read the full article.

For your next title order, contact
Stephen M. Flatow
Stephen's Title Agency LLC
165 Passaic Avenue, Suite 101
Fairfield, New Jersey 07004
973-227-4724 * 973-5561628 Fax
Stephen AT

Sunday, May 22, 2011

Short-Sale Nightmare

Readers of this blog know about the pitfalls and benefits of short sales where a home is sold for less than the amount of its mortgage.

Since a short sale cannot occur without the consent of the lender, sellers are completely subject to the lender’s whims and ineptness.

The New York Times reports on one New Jersey homeowner who lived the short sale nightmare in “A 30-Month Short-Sale Saga” by Antoinette Martin.
“MELANIE BROWN sits at the breakfast bar of the Teaneck house she will soon surrender to new owners and says the pain of that is piercing, but at least the “mental torture” at the hands of bankers and their computerized bureaucracy is finally done, after two and a half years.
“They would demand information, and then delay any response, demand and delay, over and over,” said Ms. Brown, 42, a school administrator, about her lender, Bank of America, and its Equator software system. “I got to feel like a mouse that a cat just kept smacking around.”
“This was a short sale. It took 30 months. And it might not have happened at all — despite Ms. Brown’s sustained effort to meet every shifting deadline for documents, and her real estate agent’s campaign to get help — except that the agent finally contacted an aide to a congressman, who contacted an aide to the president of Bank of America.”
What was it like dealing with Bank of America? Ms. Brown says,
“No one ever actually talks to you,” “they just send threatening e-mails, saying things like: ‘If you don’t refile those documents for the third time giving the entire history of your life by the end of the business day, then this process is terminated. You will have to start over at the beginning.’ ”

“Ms. Brown’s original loan was from Countrywide Savings Bank, acquired by Bank of America in 2008. When she began asking Bank of America about loan modification, she said, she was told it was impossible, because she was current with her payments.

“They told me I had to stop paying for three months before they could even consider helping me,” she said. “I was shocked. I thought that was drastic, but they said it was the only way.”
Sounds drastic, but a common step.

Do you have a short sale nightmare to share? We’d love to hear from you.

Read the full story here.

For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Stephen's Title Agency, LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-227-4724 - Fax 973-556-1628
E-mail Stephenstitle AT -

Monday, May 9, 2011

Higher costs for F.H.A. loans are here

We have previously written about the higher costs associated with FHA loans. What I didn't know was that an FHA loan might cost you more than a loan with private mortgage insurance (PMI.)

Here's a good article from The New York Times explaining the new costs of FHA loans and comparing it to others.

Dealing With Higher Costs of F.H.A. Loans

Contact us if we can be of help.

Stephen's Title Agency

165 Passaic Avenue, Suite 101

Fairfield, New Jersey 07004

973-227-4724 * Fax 973-556-1628

Stephen AT

Sunday, May 1, 2011

Getting a mortgage on a vacation home is hard

The New York Times states

IT might be easier if you just paid cash for that vacation house.

There is loan money available for second-home purchases, but expect bigger down payments, higher interest rates and other standards tighter than on a principal residence — and those standards are tight already. In addition, there are quirks specific to vacation markets.

Back in the day, “there was virtually no difference in underwriting for vacation homes versus owner-occupied homes,” said Guy Cecala, the publisher of Inside Mortgage Finance. “That’s something that’s changed dramatically. The days of being able to buy a vacation home with little or no money down are over.”

For instance, favorable interest rate loans from the FHA are not available. And you’ll need at least 20% down to meet Fannie Mae and Freddie Mac requirements.

“Thirty percent also seems to be the “comfort zone” this year for down payments in the Jersey Shore towns where Michael Loundy, a broker at Seaside Realty, works. “You can get 20 percent down,” he said, “but the buyer has to look very strong with income-debt ratios.””

Read the full article -Financing a Vacation Home

FDIC shutters 5 banks. Total for year 39

More bank closings.
Regulators have shut down a total of five banks in Florida, Georgia and Michigan, lifting the number of U.S. bank failures this year to 39. That follows157 bank closures in 2010 in a limping economy and mounting soured loans.

The Federal Deposit Insurance Corp. on Friday seized the banks: First National Bank of Central Florida, based in Winter Park, Fla., with $352 million in assets; Cortez Community Bank of Brooksville, Fla., with $70.9 million in assets; First Choice Community Bank of Dallas, Ga., with $308.5 million in assets; Park Avenue Bank, based in Valdosta, Ga., with $953.3 million in assets; and Community Central Bank in Mount Clemens, Mich., with $476.3 million in assets.
Read on-line: 5 banks fail in Fla., Ga., Mich.; makes 39 in '11 - BusinessWeek

For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Stephen's Title Agency, LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-227-4724 - Fax 973-556-1628
E-mail Stephenstitle AT -