Did you know that senior borrowers can use a FHA reverse mortgage to purchase a home, and as a result, have no monthly mortgage payments?
For example, a 71-year old person could buy a home for $500,000, and be eligible for a $326,073 FHA HECM reverse mortgage. Their down payment would be $173,927, or approximately 35%.
Here is the link to the reverse-mortgage calculator:
This is an excellent alternative for seniors who are downsizing. They can pocket more of the proceeds from the sale of their previous home, and have ZERO house payment on the new home.
The Eligibility Requirements
62 years of age or older
Primary residence only
No delinquencies on any federal debt, suspensions, debarments, or excluded participation from FHA programs
Completion of HECM counseling
In 2011, the loan limit will be $417,000. Buyers are still responsible for property taxes, insurance, and HOA fees, plus maintenance. Here is the link to the FHA HECM reverse mortgage website.
Hat tip to both SM and RE for sending along the Wells Fargo announcement of neg-am bailouts. If principal reductions gain momentum (which is doubtful), the moral hazard would be hard to imagine – and it could start a revolution in the streets. From Eric at nctimes.com:
Wells Fargo & Co. agreed to modify $2 billion of mortgage loans and to pay $33 million to foreclosed California borrowers, the California Attorney General’s office said Monday.
The deal applies to borrowers with “pick-a-pay” loans, which typically included “teaser” periods of two to five years during which borrowers could make monthly payments for less than the monthly interest costs. At the end of the teaser period, interest rates could skyrocket, and outstanding balances were rolled into large fixed payments. This loan type became one of the hallmarks of the housing bubble because it allowed homebuyers to take out mortgages that far exceeded borrowers’ long-term ability to repay them.
“Customers were offered adjustable-rate loans with payments that mushroomed to amounts that ultimately thousands of borrowers could not afford,” Brown said in a written statement. “Recognizing the harm caused by these loans, Wells Fargo accepted responsibility and entered into this settlement with my office.”
The settlement includes loans made by World Savings Bank and Wachovia Bank, both of which were acquired by Wells Fargo when they failed. No loans made by Wells Fargo were covered by this deal.
Under the agreement, 14,900 former World Savings and Wachovia customers will be eligible for $2 billion in loan forgiveness, much of which will include principal forgiveness, the statement said. A separate statement from Wells Fargo said they’d be working with customers between Monday and June 30, 2013, and the loan modifications could be worth $2.4 billion.
Roughly 12,000 borrowers will be eligible for the $32 million settlement worth an average of $2,650 each, the statement said.
The company will contact customers eligible for modifications or settlement cash, and maintain a help line for customers at 888-565-1422.
The Wells Fargo statement said the bank anticipated making payments for roughly these amounts when they bought Wachovia in 2008.
“The majority of Wachovia’s Pick-a-Payment customers reside in California,” Mike Heid, co-president of Wells Fargo Home Mortgage, said in a separate written statement. “We’re pleased that going forward the attorney general’s office will assist with outreach, so that we can continue to work with as many customers as possible on the options available to them to prevent foreclosures.”
Wells Fargo came to similar agreements with nine other states, including Florida, Arizona and Nevada.
Hat tip to AL for sending along this link to this fascinating website of old-time aerial photos. You can plug in addresses, and see the same location over time:
Wouldn’t you think that local home sales should be sputtering right about now? Mortgage rates have sky-rocketed, relatively (now around 5%), and come on, it’s the holidays – there can’t be anyone buying homes, can there?
Plus, with the homebuyer tax credit having inflated sales during the end of 2009, and the first half of 2010 (allegedly), the year-over-year counts should look bleak for the next few months.
But out on the street, the battle continues.
Here are the North San Diego County Coastal detached closings between November 14th and December 14th; the lower amounts mean wilder percentage swings, so apply your grain-of-salt, plus there will be a few late-reporters to add to this year’s tallies.
Note how Carlsbad and Encinitas look solid, especially in the Actives/Solds-last-30-days category, and both La Jolla and RSF are hanging tough:
Town or Area
Zip Code
’09 sales
’10 sales
’09 $/sf
’10 $/sf
ACT #/ppsf
A/S
Cardiff
92007
11
3
$483
$480
42/$534
14.0
N. Carlsbad
08+10
23
26
$265
$274
112/$453
4.30
SE Carlsbad
92009
31
37
$254
$256
161/$272
4.35
SW Carlsbad
92011
20
13
$283
$287
75/$340
5.77
Del Mar
92014
17
9
$561
$888
140/$1,070
15.55
Encinitas
92024
30
27
$350
$537
141/$456
5.22
La Jolla
92037
22
19
$661
$553
214/$958
11.26
RSF
67+91
12
16
$442
$419
234/$688
14.63
Solana Bch
92075
4
8
$621
$580
39/$788
4.88
Carmel Vly
92130
41
29
$339
$329
167/$372
5.76
Total
Above
211
187
$385
$404
1,324/$616
7.30
The number of sales measures the quantity of sellers who were willing to sell for the price the market would bear. When sales go down, people (MSM) are quick to assume that something is wrong with demand.
But just look at the difference in cost-per-sf between Actives and Solds: $616/sf to $404/sf!
I think the lower sales count describes the increasing difficulty with buying a home today, especially the right home, at the right price. You want to think that home prices would be soft, and nary a buyer around the holidays.
In the last week, I’ve seen four different houses that had multiple offers on them!
In mid-December!
The demand is healthy, yet very specific – if a house misses on quality or price, it sits. But the sellers, and the listing agents, want to think they are close just because they see a few people come by. But who knows? It’s only when there are offers that sellers know they must be close on price. Buyers know they’ve found a good buy when there are multiple offers, so rejoice!
This is brilliant – rather than regulate or bailout MERS, these three are pushing to cut them off. If lenders want to sell loans to Fannie/Freddie/FHA, they’ll have to find another way to track them other than MERS, and pay recording fees every time they sell or transfer the loan. FromHW:
Three congressional representatives recently introduced a bill into the House that would gradually phase out the use of Mortgage Electronic Registration Systems,commonly called MERS, within the government-sponsored enterprises as well as Ginnie Mae.
The Transparency and Security in Mortgage Registration Act of 2010, also known as H.R. 6460, would prohibit Fannie Mae and Freddie Mac from purchasing or acquiring any new MERS mortgage deal of six months after its enactment.
MERS allows lenders to track individual mortgages through an electronic tracking and holding system. According to MERS, the firm holds legal title to a mortgage as the loan owner’s agent and is sometimes granted the authority to enforce foreclosure. The firm has been at the epicenter of foreclosure-gate and under scrutiny for wrongful foreclosure.
Under the bill, Fannie and Freddie would also be prohibited from new lending or investing in securities consisting of MERS mortgages for six months.
After the six-month time period expires, “MERS shall not be the named mortgagee or mortgagee of record on any mortgage owned, guaranteed, or securitized” by the GSEs. If at the six-month deadline, Fannie and Freddie still hold loans with a connection to MERS, the agencies will assign those loans to a servicer or holder, the bill states.
Ginnie Mae would be subject to the same timelines and similar terms as Fannie and Freddie under Transparency and Security in Mortgage Registration Act of 2010.
“[T]he association may not newly guarantee the payment of principal of or interest on any trust certificate or other security based or back by a trust or pool that contains, or purchase or acquire, any MERS mortgage,” the bill states.
A modern house on view property with 3,800 SF of living space and a 925 SF detached garage. Primary materials include concrete, steel, and glass. A concrete wall up to twenty-four feet high organizes the site and the house: the garage, entry and service spaces are on the street side of the wall, while providing privacy for the main living space which is a curtain wall-enclosed pavilion.
The wall is also the organizing element for the circulation including the stairs with cantilevered steel treads. Supported on steel frames and triangular steel trusses, the roof swoops over the concrete wall capping the pavilion. Eight by sixteen foot sections of the curtain wall pivot for ventilation. The stair has demountable guardrails which are normally in place but were removed for the photographs.
The master bedroom is in a loft space above the kitchen, while a family room, media room, children’s bedrooms and bathrooms occupy the daylight basement level. There is additional living space above the garage accessible via stair or future elevator.
Here is the link to the reverse-mortgage calculator:
