First Mortgage

The state's House of Delegates recently passed by a 134-to-0 vote a bill that would make it easier for homeowners to refinance mortgages at today's low rates. The bill, modeled after a law Virginia adopted more than a decade ago, would allow homeowners to proceed with refinancing a first mortgage without permission from a second mortgagor. The process of seeking such approval can be costly, confusing and time-consuming, according to the bill's sponsors. “Too many homeowners struggle to make payments on more than one mortgage,” said Del. Sam Arora, a Montgomery County Democrat who co-sponsored the bill, HB 88. “We have a real opportunity to help them by removing an unnecessary barrier to locking in lower interest rates and stay in their homes.” For the law to apply, the principal of the second mortgage would have to be $150,000 or less.

In addition to an extension of the Homestead Tax Credit application deadline, several other pieces of legislation relevant to homeowners passed both chambers of the General Assembly during the most recent session, which ended earlier this month. Gov. Martin O'Malley is expected to sign them -- provided they pass a constitutional review, according to spokeswoman Raquel Guillory. Among the 2013 session housing legislation that is likely to become law: House Bill 235, introduced by Harford County Republican Del. Susan K. McComas, would require the Department of Assessments and Taxation to add five fields of information to the publicly available online database of property tax assessment information.

In addition to an extension of the Homestead Tax Credit application deadline, several other pieces of legislation relevant to homeowners passed both chambers of the General Assembly during the most recent session, which ended earlier this month. Gov. Martin O'Malley is expected to sign them -- provided they pass a constitutional review, according to spokeswoman Raquel Guillory. Among the 2013 session housing legislation that is likely to become law: House Bill 235, introduced by Harford County Republican Del. Susan K. McComas, would require the Department of Assessments and Taxation to add five fields of information to the publicly available online database of property tax assessment information.

The state's House of Delegates recently passed by a 134-to-0 vote a bill that would make it easier for homeowners to refinance mortgages at today's low rates. The bill, modeled after a law Virginia adopted more than a decade ago, would allow homeowners to proceed with refinancing a first mortgage without permission from a second mortgagor. The process of seeking such approval can be costly, confusing and time-consuming, according to the bill's sponsors. “Too many homeowners struggle to make payments on more than one mortgage,” said Del. Sam Arora, a Montgomery County Democrat who co-sponsored the bill, HB 88. “We have a real opportunity to help them by removing an unnecessary barrier to locking in lower interest rates and stay in their homes.” For the law to apply, the principal of the second mortgage would have to be $150,000 or less.

Are you a Maryland homeowner saddled each month with both a heavy first mortgage payment and a home equity loan payment?Then this could be the moment to combine your debt into one shiny new first mortgage. The maneuver is called a "debt consolidation refinance" and current mortgage rates make it an attractive possibility. Of course you have to crunch the numbers relevant to you.But the potential is there to save a lot of money."If you roll all your debt into one mortgage, you should come out ahead," says Fritz Elmendorf, a vice president of the Virginia-based Consumer Bankers Association, which represents 700 lending institutions.

Q: My husband and I are renting a house in Westminster with the option to purchase it. The owner of the house has offered to take back a second mortgage for part of the purchase price if we exercise our option and buy the house. How will this help us get a first mortgage to purchase the house?K. Houck, WestminsterA: The seller's offer to take back a second mortgage for part of the purchase price will help you get a first mortgage for the house you are now renting.Homebuyers need to borrow from 90 percent to 95 percent of the purchase price of a house in the form of a first mortgage from a lender in order to buy a home.

Consumer First Mortgage Inc. has been taken over by four lenders who stepped in after the Columbia-based mortgage broker abruptly shut its doors with nearly 650 home loans in the pipeline, Maryland's bank commissioner said yesterday.The 648 mortgages that Consumer First failed to bring to settlement before its shutdown at the end of July have been distributed among Virginia First Mortgage, a division of Virginia First Savings Bank; Carroll County Bank and Trust Co.; MNC Mortgage Corp.; and Mortgage Edge Corp.

A STARTLING new study says American homeowners are in the process of rewriting the traditional rules of refinancing: Rather than getting a new mortgage at a lower interest rate, they are taking out larger loans at rates slightly higher than what they were paying before. After a statistical analysis of recent refinance transactions in a national database of 14 million loans, mortgage market researchers report that the average borrowers in the current refinance boom took out loans $41,000 larger and at an interest rate 0.6 percent higher than they had before the refinance.

GRAND OPENINGWashington Square1. Mayor Kurt L. Schmoke on Thursday took part in the grand opening of Washington Square in the Washington Hill section of Baltimore.Washington Square, under the direction of the Washington Hill Development Corp., will include 24 new two- and three-story townhomes, 13 renovated townhouses and 22 refurbished condominium units for low- to moderate-income families.The houses will be available for below-market rates for those willing to stay for at least 10 years.

Everybody wants to help keep people in their houses and out of financial stress and foreclosure, right? That's what the Bush administration says, and that's what top executives of major banks, mortgage companies and Wall Street investors all say. But where the proverbial rubber hits the road -- at the point where individual homeowners seek to refinance or modify their mortgage terms -- things may look different. Take the case of Robert Whittaker, a Sykesville homeowner who sought to refinance a $260,000 first mortgage recently when 30-year rates fell below 6 percent.

For more than four years since he lost his Columbia home to foreclosure — despite never missing a mortgage payment — Kwaku Atta Poku has fought a legal battle for financial stability and personal vindication. After several legal setbacks, a federal judge's ruling has given new hope to Atta Poku, who built a small taxi business along with a new life in America — only to watch as it was ruined by a mortgage nightmare that all agree he was not responsible for. "Thank God. Finally, somebody …" Atta Poku said Tuesday when he learned of the judge's ruling.

Everybody wants to help keep people in their houses and out of financial stress and foreclosure, right? That's what the Bush administration says, and that's what top executives of major banks, mortgage companies and Wall Street investors all say. But where the proverbial rubber hits the road -- at the point where individual homeowners seek to refinance or modify their mortgage terms -- things may look different. Take the case of Robert Whittaker, a Sykesville homeowner who sought to refinance a $260,000 first mortgage recently when 30-year rates fell below 6 percent.

HOMEBUYERS WITH high credit scores but minimal down payment cash are about to get a new, potentially helpful mortgage option. It comes with a catchy name - the "SingleFile" low down-payment mortgage. But it also comes with some wrinkles you need to know about upfront. SingleFile loan down payments can go all the way to zero. Maximum mortgage amounts can extend well into the jumbo category: $650,000. However, you need to have a FICO credit score of 700 or higher - a tough hurdle for some buyers short on cash.

Some readers ask whether there is any way to cancel mortgage insurance on Federal Housing Administration loans. Mortgage insurance on FHA loans does not automatically cancel even if the loan-to-value ratio has improved substantially. This is different from private mortgage insurance. With FHA loans, you must pay the monthly mortgage insurance premium as long as you own the home or keep the loan. But in the current real estate market, with rising home values and low mortgage interest rates, folks who are paying government mortgage insurance should investigate refinancing to a conventional loan which does not require mortgage insurance.

When shopping for a mortgage to purchase or refinance your home, here are some tips: If you know you're going to sell the house within the next seven years, consider alternatives to the usual 30-year fixed rate mortgage. Adjustable rate mortgages (ARMs) are available at lower rates than fixed-rate loans. Lowest rates apply to mortgages that adjust every year. Progressively higher rates are charged for ARMs with rates that are locked in for three years, five years or seven years. After the lock-in period, the ARM interest rate adjusts at that time to the then-current index rate, plus a predetermined margin (i.e.

WHAT MAY be the most significant innovation in the American home-mortgage field in more than two decades officially hit the market last week. It's called the "home-asset management account." It grafts a growing equity line of credit onto a standard home mortgage, and essentially makes tax-deductible home equity the centerpiece of a borrower's personal financial affairs. It turns your house into a bank that's always open - if you choose to use it. Here's how it works. You apply for a home-asset management account instead of a traditional mortgage.

A NATIONWIDE price war has broken out among lenders, homebuilders and mortgage insurers for the business of TC once-neglected group of consumers: homebuyers who can afford no more than a 10 percent down payment, but who also don't like the idea of making monthly mortgage insurance payments. If you fit the description, you might be able to cash in.Traditionally, buyers who can't come up with a 20 percent down payment have been forced to purchase private mortgage insurance (PMI) to cover the lender's heightened risk of loss in the event of default or foreclosure.

Dear Mr. Azrael, I am currently in a dispute with my lender over private mortgage insurance (PMI). I purchased my townhouse in November 1998 and did so with nothing down and an 80 percent [loan-to-value] first mortgage and a 20 percent second mortgage. Only recently, when considering refinancing, was it brought to my attention that I have been paying PMI and no one can figure out why. I was under the impression that the whole reason for splitting a loan ... was to avoid PMI. I sent a letter requesting the PMI be dropped from future payments as well as a refund of previous payments.

MORTGAGE borrowers who feel less secure in the wake of terrorist attacks and the rising national unemployment rate have a little-known financial tool available to them: Insurance coverage that provides up to half a year's worth of mortgage payments in the event of involuntary unemployment. The concept works like this. For a modest charge, you, your lender, a homebuilder or home seller can purchase a policy that insulates a mortgage against tough economic times. The plan pays up to $2,500 a month to keep you current on your mortgage obligations, should you lose your job. The source of the unemployment coverage for your mortgage can be varied and creative: Your lender can offer it as an incentive, either at a small cost or at no charge, to win your long-term loyalty as a customer.

A STARTLING new study says American homeowners are in the process of rewriting the traditional rules of refinancing: Rather than getting a new mortgage at a lower interest rate, they are taking out larger loans at rates slightly higher than what they were paying before. After a statistical analysis of recent refinance transactions in a national database of 14 million loans, mortgage market researchers report that the average borrowers in the current refinance boom took out loans $41,000 larger and at an interest rate 0.6 percent higher than they had before the refinance.