Home Loan

Several readers have sent in questions asking about the feasibility of obtaining a mortgage when they have gone through bankruptcy.Qualifying for a home loan after bankruptcy may be difficult, but it is not impossible. According to the loan specialists at Agra Capital, a Towson-based mortgage broker, two of the most important factors lenders consider are:What is the amount of equity in the home? Lenders will not consider bankruptcy as a "showstopper" if the total loans on the home do not exceed 65 percent of its fair market value.

IF YOU'VE bought a house or shopped for a mortgage in the past few years, you know the problem: You get smothered in federally mandated paper -- good-faith estimates, cost-of-credit disclosures, loan-servicing notices and tough-to-understand settlement cost itemizations.And if you're like many consumers, you don't really read all that fine print. Worse yet, some of the most important disclosures -- such as truth-in-lending and closing-cost projections -- either get to you too late to be useful, or are subject to major bottom-line revisions before your home loan actually closes.

WASHINGTON -- In a bellwether victory for consumer advocates, a prominent mortgage lender has agreed to settle a national class-action lawsuit challenging its funneling of undisclosed fees to local mortgage companies who persuade borrowers to pay higher than the prevailing rates or terms for their home loans.A spokesman for Ford Consumer Finance Co., a mortgage subsidiary of the giant automaker, confirmed that his company has decided to settle the year-old suit rather than incur additional litigation costs.

HOME LOAN applicants nationwide should be the beneficiaries of a new Federal Reserve Board rule on upfront disclosure of fees charged by mortgage brokers.Effective Sept. 30, all fees levied by loan brokers and paid directly by the borrower must be included as part of the mandatory truth-in-lending "finance charge" disclosure that consumers receive within three business days of applying for a home mortgage.Before the new rule, the federal government offered no uniform guidance on what fees brokers had to disclose up front as part of the finance charge or annual percentage rate (APR)

TO MICHIGAN attorney Robert Constan, the fees he is challenging are "symbolic of what's happening in the mortgage marketplace right now. Consumers aren't watching every line item on their [loan settlement documents]. They see little charges for $20, $30 or $50 and they just let them go. The fees just sort of sneak in there and nobody complains."They're complaining now -- loudly. Constan's firm, Daguanno and Accetura, is one of several around the country who are taking on many of the biggest, best-known American mortgage companies over a series of seemingly trivial fees they routinely charge when they close out a home loan for a refinancing or to sell a house.

What are the most important things to consider when shopping for a home loan?Last year, at this time, shopping for financing was relatively easy. Most buyers took fixed-rate loans, so it was merely a question of finding out who offered the best interest rate with the lowest points (loan origination fees).Recent interest rate increases have changed the home financing market significantly. More and more buyers are opting for adjustable-rate mortgages (ARMs). Some buyers are looking into hybrid loan products, which combine features of fixed- and adjustable-rate mortgages.

The 30-year fixed-rate home loan -- the mortgage industry's old standby -- is enjoying a surge in popularity after having lost ground last year to 15-year models, a study shows.The trend suggests a marked change of heart among homeowners participating in the refinancing boom, economistsand lenders say.As interest rates plunged last year, many consumers refinanced into 15-year mortgages to pay off their loans more quickly. But this year, experts said, more consumers are interested in reducing their monthly payments, and 30-year mortgages entail smaller payments than 15-year loans.

Are you bewildered by the process of buying a first home? Do all the references to mortgages, brokers, contracts, home inspectors, deeds and surveys leave you baffled? Does your puzzlement keep you from pursuing your housing ambitions?Then sit down in a comfortable chair for a moment and take a deep breath. While there's much to learn along the way, most people can navigate the process of buying a home to a satisfactory outcome, points out Peter G. Miller, the Silver Spring-based author of "Buy Your First Home Now," a HarperCollins paperback.

You have your mortgage lender on the line when you're confronted with that thorny question: How long will you stay in your home?It's hardly an academic issue. Your answer to the question should figure prominently in your selection of a mortgage.And picking the right type of home loan can cut your monthly mortgage payments by several hundred dollars, says Daniel Coffey, manager of Great Western Mortgage's Pikesville branch.Too few think through their answer to the question of how long they'll stay in a home, Mr. Coffey says.

Mortgage rates are at their lowest level in more than a year, causing a surge of interest in refinancing and a pickup in new loan business for lenders.But consumers hoping for further rate drops are likely indulging in wishful thinking. Prospective buyers who have found the home they want to buy are advised to proceed with their purchase rather than try to catch the market at its lowest, experts said."Rates may go lower than they are now, but they're not going to go through the floor," said Mark Obrinsky, a senior economist with the Federal National Mortgage Association, known as Fannie Mae, the nation's largest secondary market buyer of home mortgages.

The housing market malaise has some homeowners up in arms. Sure, if you're trying to sell your home to get out of financial difficulties or because you have bought another place and carrying two mortgages is killing you financially, I can understand why you're not happy. What does not make much sense to me are the dozens of readers who are ready to hand over their property to the lenders because their home does not work for them anymore. Where did these folks get the idea that homes are like disposable consumer goods?

YOU'VE SEEN the home loan pitches - possibly ad nauseam: "Refinance now!! 1 percent mortgages!! Save thousands of $$$$$ per year with our 1 percent option ARM!!" Given the seductions of 1 percent money, you might not be surprised to learn that this form of financing has quintupled its national market share in the past 12 months. But two developments - one that took effect Aug. 1, another due this fall - could reduce the number of promotions you see for cut-rate option adjustable rate mortgages.

ONE OF the key players in the home mortgage market quietly has signaled that it believes real estate speculation in some parts of the country is approaching worrisome levels. PMI Mortgage Insurance Co. told its network of lenders nationwide that it will no longer insure new loans made to borrowers who already have more than four mortgages outstanding or who represent more than $350,000 in "risk exposure" to the company. A second large underwriter, MGIC Mortgage Insurance Corp., confirmed that it, too, is carefully monitoring real estate speculation in hot housing markets, and has serious concerns about certain interest-only mortgages that investors are using to buy multiple houses or condos.

Several readers have sent in questions asking about the feasibility of obtaining a mortgage when they have gone through bankruptcy.Qualifying for a home loan after bankruptcy may be difficult, but it is not impossible. According to the loan specialists at Agra Capital, a Towson-based mortgage broker, two of the most important factors lenders consider are:What is the amount of equity in the home? Lenders will not consider bankruptcy as a "showstopper" if the total loans on the home do not exceed 65 percent of its fair market value.

IF YOU'VE bought a house or shopped for a mortgage in the past few years, you know the problem: You get smothered in federally mandated paper -- good-faith estimates, cost-of-credit disclosures, loan-servicing notices and tough-to-understand settlement cost itemizations.And if you're like many consumers, you don't really read all that fine print. Worse yet, some of the most important disclosures -- such as truth-in-lending and closing-cost projections -- either get to you too late to be useful, or are subject to major bottom-line revisions before your home loan actually closes.

HOME LOAN applicants nationwide should be the beneficiaries of a new Federal Reserve Board rule on upfront disclosure of fees charged by mortgage brokers.Effective Sept. 30, all fees levied by loan brokers and paid directly by the borrower must be included as part of the mandatory truth-in-lending "finance charge" disclosure that consumers receive within three business days of applying for a home mortgage.Before the new rule, the federal government offered no uniform guidance on what fees brokers had to disclose up front as part of the finance charge or annual percentage rate (APR)

TO MICHIGAN attorney Robert Constan, the fees he is challenging are "symbolic of what's happening in the mortgage marketplace right now. Consumers aren't watching every line item on their [loan settlement documents]. They see little charges for $20, $30 or $50 and they just let them go. The fees just sort of sneak in there and nobody complains."They're complaining now -- loudly. Constan's firm, Daguanno and Accetura, is one of several around the country who are taking on many of the biggest, best-known American mortgage companies over a series of seemingly trivial fees they routinely charge when they close out a home loan for a refinancing or to sell a house.

WASHINGTON -- In a bellwether victory for consumer advocates, a prominent mortgage lender has agreed to settle a national class-action lawsuit challenging its funneling of undisclosed fees to local mortgage companies who persuade borrowers to pay higher than the prevailing rates or terms for their home loans.A spokesman for Ford Consumer Finance Co., a mortgage subsidiary of the giant automaker, confirmed that his company has decided to settle the year-old suit rather than incur additional litigation costs.

What are the most important things to consider when shopping for a home loan?Last year, at this time, shopping for financing was relatively easy. Most buyers took fixed-rate loans, so it was merely a question of finding out who offered the best interest rate with the lowest points (loan origination fees).Recent interest rate increases have changed the home financing market significantly. More and more buyers are opting for adjustable-rate mortgages (ARMs). Some buyers are looking into hybrid loan products, which combine features of fixed- and adjustable-rate mortgages.

The 30-year fixed-rate home loan -- the mortgage industry's old standby -- is enjoying a surge in popularity after having lost ground last year to 15-year models, a study shows.The trend suggests a marked change of heart among homeowners participating in the refinancing boom, economistsand lenders say.As interest rates plunged last year, many consumers refinanced into 15-year mortgages to pay off their loans more quickly. But this year, experts said, more consumers are interested in reducing their monthly payments, and 30-year mortgages entail smaller payments than 15-year loans.