US Foreclosures Fell in April, Signaling Improvement

Foreclosures in the US fell by more than 2 percent in April from a year earlier, the first year-over-year decline in the five years RealtyTrac has been reporting the data.
The number of Americans receiving foreclosure notices was down 2.4 percent in April from a year before and 9 percent lower than March 2010.
Experts say the foreclosure situation is slowing, and may have hit a plateau.
“I think you shouldn’t read too much into a one month dip, even if it is the first time,” said Rick Sharga, senior vice president of RealtyTrac. "It really isn’t that we’re out of the woods. It’s more of a process issue," he said, explaining that lenders are working through a backlog of troubled properties.
In all, one in every 387 homes in America received a foreclosure notice, which is defined as a notice of default, auction sale or bank repossession.
“The data is starting to indicate that it is stabilizing,” said housing analyst Patrick Newport of IHS Global Insight. He cited Fannie Mae’s [FNM 1.06 0.03 (+2.91%) ] first-quarter results released Monday, which indicated that single-family mortgage delinquencies were starting to slow down.
“Although our single-family serious delinquency rate increased during the first quarter of 2010 and remains high, our single-family serious delinquency rate grew at a much slower rate during the first quarter of 2010 than during each quarter of 2009,” Fannie Mae said in its filing.
While the foreclosure rate dropped, the RealtyTrac data shows that bank repossessions—also known as real estate owned, or REO—hit a record high in April; a total of 92,432 homes that were taken back by the lender. That’s a 1-percent increase from the previous month and a 45- percent increase from April 2009.
“If we start creating jobs, I think the situation will start getting better,” said Newport.
The ten states with the highest foreclosure rates were little changed from the previous month. According to the RealtyTrac report, Nevada remains No. 1 for the 40th straight month, with one in every 69 properties in the state getting a foreclosure notice.
Arizona ranked second with one in every 169 households receiving a notice, followed by Florida (one in 182 households), California (one in 192 households) and Utah (one in every 221 households.)
Vermont had the lowest rate, with one in every 26,051 properties receiving a foreclosure notice.

-Florida's Mortgage Expert
05/13/10

High Credit Scores are possible...

Learn from some credit scoring superstars.
While most Americans strive for good credit scores, others take special care to achieve great ones. Meet some credit score superstars -- and learn why and how they keep those precious three digits so high.

Good Scores Key to Financial Health
Credit scores were developed as tools to help banks and businesses make objective decisions. To generate them, a mathematical formula pulls credit report data and transforms it into a numerical rating. FICO (FICO) scores range from a low of 300 to a high of 850, and according to MyFico.com, mortgage lenders consider anything above 760 as ideal. While it is the dominant score, FICO isn't the sole scoring model. For example, the three major credit reporting bureaus -- TransUnion, Experian and Equifax (EFX)-- produce the VantageScore, with a scale ranging from 501 to 990.
Despite ranking system differences, a higher score always indicate less risk, and having them makes you more appealing to lenders, employers and landlords.
Consequently, focusing on scores is only natural. "People are drawn to this subject because it allows them to measure something that they equate to financial health," says Jose Rivas, national education manager for Consumer Credit Counseling Service of San Francisco.
That focus, however, can turn into anxiety, with conflicting information often to blame. "One article states that consumers should close their unused accounts," says Rivas, "another states that consumers should never close their accounts." For this reason, getting the facts from reliable sources is essential. Like the following high achievers, you can create a terrific credit score with real knowledge and a specific sense of purpose.
Credit Score Vigilante
Dan N, a professional comedian who constantly travels between New York and Los Angeles, has carefully built an 830 FICO score. Doing so enabled him to negotiate preferential terms with his premium reward card. "I was able to drop the annual fee for my $450 per year American Express card to $150!" Dan also cites the "feel-good" factor: "It's a comfort to know that wherever I go and whatever I apply for, I can get it."
Vigilance is Dan’s strategy. "If there's anything at all that might affect my score, I ask a ton of questions and go to the Internet and do as much research as possible. If I test drive a car, or sign up for a health club, I look at the fine print very carefully to see if they have a right to hit my credit file with an inquiry." He's also programmed everything online "so that all of the bills pay themselves, and any and all credit card balances are paid off immediately."
Protecting a Long History of Timely Payments
Want the very best vehicle loan available? Let your numbers do the talking. When Brenda A, founder of TheCaregiversVoice.com, out of Pearblossom, Calif., was applying for a car loan, her 849 score helped her secure top financing. "Saving thousands on interest charges is a tremendous motivator," says Brenda, who locked in 0 percent interest for five years. A loan with a 4 percent rate would have cost her an extra $3,200 on the same vehicle.

Brenda attributes her impressive score to a long history of timely payments. "And on those rare moments when a bill sneaks under some paperwork and it's either late or due that day," says Brenda, "I call and take care of it." She believes her loyalty to the same banks (three credit accounts -- not too many, not too few) also helps. "Instead of constantly shifting to capture the best deal, discount rate, rebate points, etc., I've stuck with the same folks for years."
Regular Charging, Zero Balances
At last check, marketing company president Paul E, from Bloomsbury N.J., holds a 990 VantageScore. For him, it's a matter of honor and integrity. "A high credit score indicates your name and your signature on a contract have meaning. It's an indicator of certainty ... of character. It would be difficult to trust someone with a poor credit rating to the same extent you can trust someone with a higher credit rating."
Paul maintains his high score by using his business and personal credit cards regularly and paying them off every month. "It's not magic -- pay your bills on time and pay the debt. Make it a priority. Pay attention to spending."
Keeping the Right Mix of Credit
"Every time someone runs my credit they say, 'Wow, I almost never see someone with credit that high,'" says Carrie R, founder of pocketyourdollars.com in Minneapolis. She keeps it first-rate to preserve her autonomy. "As someone who got out of $50,000 in debt in less than three years, I take a lot of personal pride in my financial freedom." Though Carrie has no plans to borrow money again, "I have no barriers when it comes to employment, insurance or other areas of life where my credit score is used to assess the kind of risk I am."

Besides "the obvious things like pay my bills," Carrie says she increased her score by talking to her credit union loan officer, who said an overabundance of idle retail accounts was driving it down. She had opened the cards randomly during in-store promotions, but never really charged on them, so there was no history to protect. After formally closing the accounts, her scores that were previously in the 720 to 740 mark rose to the 800s.
Does the Perfect Credit Score Exist?
Pursuit of excellence is often wise, but does 'perfect' exist? Yes, says Craig W, public affairs director for FICO. "Several thousand consumers do in fact have the highest possible FICO score."
While not everyone will reach the credit score apex, you can get close by consistently following three simple guidelines:
1. Pay all bills on time.
2. Keep credit card balances low.
3. Take on new credit only when you really need it.

-Florida's Mortgage Expert

Good news for buyers returning to the market

Going forward, borrowers who previously experienced a deed-in-lieu of foreclosure won’t have to wait as long to get approved for a subsequent mortgage.
Last week, mortgage financier Fannie Mae changed its required waiting period (the amount of time that must elapse after a pre-foreclosure event) to reflect current market conditions.
In the past, borrowers had to wait four years after a deed-in-lieu of foreclosure to get approved for a mortgage with Fannie Mae.
That time period has been slashed to just two years, though the maximum loan-to-value is limited to 80 percent. After four years, the maximum LTV climbs to 90 percent.
Pre-foreclosure sales and short sales, which Fannie categorizes as the same event, a property sold in lieu of foreclosure for less than the total amount owed, will also have a two year waiting period with the same LTV requirements.
Additionally, certain extenuating circumstances will allow borrowers to get loans after just two years at up to 90 percent LTV.
In all cases, borrowers must re-establish their credit, meaning they must meet minimum credit score requirements and eligibility requirements.
Fannie Mae and Freddie Mac currently require a five-year waiting period after foreclosure to re-establish credit; the waiting period is only three years for an FHA loan and two years for a VA loan.

Florida offers help to some with home down payment

Florida offers help to some with home down payment

Starting Wednesday, Florida hopes to stoke its real-estate market by becoming one of the few states to offer $8,000 in down-payment assistance to qualified homebuyers so they can benefit upfront from a new federal tax credit.
The state Legislature set aside $30 million to create the Florida Homebuyer Opportunity Program, aimed at first-time buyers and others who have not owned a home for at least the past three years. To qualify, an individual cannot earn more than $75,000 a year, while couples can't earn more than $150,000.
"Here in Florida, rather than qualified buyers waiting to get the tax credit on the tail end of the process, in the form of a credit after they have filed the tax returns, it will allow them to get it upfront and let them use it for down-payment assistance and fees," said David Hart, vice president of legislative and government affairs for the Florida Home Builders Association. He estimated that about five states are taking a similar approach.
The state's program takes effect Wednesday, though the money isn't expected to be available until later in July or August. The funds are being distributed through local government and nonprofit agencies that already provide down-payment help through the State Housing Initiatives Partnership, known as SHIP. Qualified homebuyers are entitled to $8,000 or 10 percent of the property's purchase price, whichever is less.

18 months to repay

Buyers who receive a down payment must file for the tax credit on their federal tax return next year and then repay the agency that lent them the assistance, according to the program, which was proposed by state Sen. Mike Fasano, R-New Port Richey. The program gives buyers who qualify and get funds 18 months in which to repay the state, which allows them plenty of time to realize the benefits of the tax credit, part of the federal government's massive stimulus package, the American Recovery and Reinvestment Act of 2009.
The state program is intended to boost Florida's slumping housing market. While the number of existing-home sales locally and statewide have been up for months now compared with a year ago, prices continue to be down 30 percent or more year-over-year depending on the market, according to the Florida Association of Realtors.
To receive the state's down-payment assistance, the buyer must close on a property by the end of November. Housing agencies are still working out the details of how to distribute the funds, and state officials caution that four or five months is a relatively short time in which to qualify, find a home, obtain a mortgage, close on the property — and use the money. Qualified buyers who do not take advantage of the state program may still take the federal tax credit, which is currently set to expire in December.
Some local homebuilders are hopeful the state's decision to convert the tax credit into upfront money will help spur the slumping market. George Glance, who oversees operations for KB Home in Central Florida, said that, while historically low interest rates and falling home prices are enticing many first-time buyers into the market, many of them struggle to come up with a down payment.
"Allowing the federal tax credit to be used toward a down payment would be a great advantage to a first-time homebuyer trying to obtain the dream of homeownership," Glance said.
One consumer advocate considers the state program flawed, however, because of the way the state is distributing the money. Walter Dartland, director of the Consumer Federation of the Southeast, said he fears some Florida cities and counties will run out of cash before the end of November, even as others wind up with excess funds that won't get used.

Will it be used?

"Each county or municipality gets a share of the money. In smaller counties, no one is going to buy any houses — there're so many for sale," Dartland said. "The concern I have is that it won't be used. If there's any money left on deck, it won't stimulate anything."
He proposed that the money all come from a single, statewide pot. But state officials said they must abide by rules set by the Legislature, which call for the funds to be distributed through local housing agencies.

Info By Mary Shanklin-Sun Sentinel

Beware of Credit Card Changes 2

As I discussed last week, Credit Card Companies are blind siding us with changes that only benefit their pockets.

Minimum payments
You might have to start paying more each month.
Chase increased the minimum payment from 2% to 5% for cardholders with large balances.

Credit limits
Many card issuers are slashing credit limits despite your credit/pay history.
American Express has taken the most heat over slashing credit limits. Nearly half of its portfolio underwent a major overhaul that included cutting limits by 50% or more. Other issuers have cut limits, too, sometimes to amounts lower than the balances owed, triggering over-the-limit fees on a few accounts.
Lowering credit limits also can cause immediate damage to the credit scores of consumers who carry balances.

Rewards
Rewards programs have become less rewarding. Be sure to carefully review any "rewards programs" you are enrolled in.
What's behind the upheaval?
Why so many changes? Why now? Especially after the federal government has pumped billions into struggling banks to help bolster lending?

Consider these reasons:

A perfect storm. Banking and credit industry observers say a tsunami of financial, regulatory and economic forces is leading issuers to drive up the cost of borrowing on credit cards. The recession, financial market turmoil, the frozen credit card securities market, job losses and growing credit card payment defaults are fueling some of the changes.

Upcoming regulations. Card issuers are also gearing up for 2010, when sweeping changes in federal credit card regulations will go into effect
• Profitability problems. Moody's, a New York credit rating agency, used a stress analysis to evaluate the strength of the six biggest credit card issuers -- Bank of America, Chase, Citi, American Express, Capital One and Discover -- and found that maintaining profitability this year will be a struggle for some. The six collectively hold 80% of the nation's nearly $1 trillion in outstanding credit card balances. Can we even fathom these numbers? I sure can't!

There's a real danger in what card issuers are doing. Fewer than 10% of card users default on their payments or pay late, yet issuers are increasing rates on some of their on-time customers. These companies may be damaging the relationships with good customers they'll need for long-term growth with all of these changes.

What you can do
Read and Review all correspondence from your card issuers. It may not be easy reading, but it can have a big impact on your finances.

Talk back: Have you been hit by sneaky credit card changes? Examine your statement to see if the credit line has been lowered, if the APR (annual percentage rate) has been raised and if your minimum monthly payments have been increased.

As for those people who are closing accounts in protest of the changes, proceed with caution. You may win the battle, but you will lose the war. Closing credit card accounts can lower consumers' credit scores, especially for older accounts that demonstrate lengthy credit histories.

In addition:

Continue to use your cards, moderately. Charge something small and pay off your balance at the end of every month.

Redouble efforts to make every payment on time.

Pay down debts to build good credit scores.

Comparison shop. Good deals still exist for those with good credit.

I have Debt Settlement Plans that will help you lower your overall debt by 50%, pay off your balances in 12-36 months, and get rid of all that interest once and for all.

Sources: Connie Prater from CreditCards.com

Beware of Credit Card Changes

Have you noticed anything different about your credit card accounts lately? Read the fine print. Really read it. Chances are the interest rates have crept upward, fees have increased or rewards rates have been diluted, even if you pay your bills on time.
Many of these changes in account terms have already taken effect. Still others, such as the return of routine annual fees, may be on the horizon. Changes have come quickly in interest rates, fees, minimum payments, credit limits and rewards, and none of them favors consumers.
Interest rates:
Although banks are scooping up billions in bailout money or borrowing money from the Federal Reserve at rates as low as 0%, they aren't passing on those savings to consumers. Credit card interest rates have increased for many major card issuers and even doubled or tripled for some consumers who pay their bills on time. Bank of America is raising interest rates on about 4 million customers with balances. Citigroup and Capital One have also jacked up rates.
Credit card interest rates are typically pegged to the prime rate, which has fallen from 5.25% a year ago to 3.25% now. But the national average rate for credit cards has actually risen over that period, moving from 11.3% to 12.4%, according to the CreditCards.com's weekly rate survey of large card issuers. How is this possible and how can they get away with this?

Fees:
Card companies have become fee addicts. According to industry consultant R.K. Hammer, card issuers raked in $19 billion from penalty fees in 2008, up 5% from 2007. This year, penalty fee income is expected to rise to a record $20.5 billion. Can we even comprehend this much money?

Fees come in many forms:
• Look Out for increases in Balance transfer fees, Cash advance fees, and Foreign transaction fees. Fees that were once waived, will now be charged. So much for the banks looking out for the little guy!
Tomorrow we will learn about other sneaky tricks to take your money and what you can do about it.

Mortgage Market Commentary

This week is light on economic reports, as investors will be focused on the large Treasury auctions June 9-11, particularly the longer term 10yr and 30yr offerings Wednesday and Thursday. With recent economic data generally favorable, investors believe the Fed will not increase it's purchases of MBS (mortgaged backed securities) or Treasuries, so the level of demand for the new bonds will be closely watched. The most significant economic data will be the Retail Sales (which account for 70% of economic activity) report released on Thursday, along with Jobless Claims and Business Inventories. Wednesday is the day for the Mortgage Bankers Association's weekly survey of mortgage applications which provides information on purchase activity and refinance demand. 30yr fixed mortgage rates jumped last week to 5.45%, from a low of 4.85% in April; which may sideline consumers planning to refinance or purchase their first home. Costs are now higher for home buyers than they were in December. However, great 1st time home buyer incentives still exist and will off set any increase to rate and costs. Also, with the price of homes still dropping, NOW IS STILL THE TIME TO BUY!!