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| Brenda Hayward & Associates |
| BRENDA HAYWARD & Associates 310.589.1201 310.457.6550 YourMalibuRealtors@yahoo.com |
Your Malibu Realtors
Los Angeles Business Journal
Foreclosed homeowners could owe
‘tens thousands of dollars’ to lenders.
Facing the possibility of foreclosure, California homeowners may be hit with more than just
losing their homes. Due to a loophole in state law, they also can be sued by their lender.
Senate Bill 1178 by State Sen. Ellen Corbett (D-San Leandro), which will extend anti-
deficiency protection for consumers who have refinanced their original mortgage loans and
now are facing foreclosure.
KEEP THIS IN MIND
• Currently, if a homeowner defaults on a mortgage used to purchase his or her home --
known as a “purchase money mortgage” -- the homeowner's liability on the mortgage is
limited to the property itself. Unfortunately, the original law did not extend the purchase
money protection to loans that refinance the original purchase debt, even if the refinance
only was to obtain a lower interest rate.
• Californians who refinance a property currently do not have protection if they default on
a mortgage greater than the property’s value. Called a “deficiency” liability, under current
California law, the lender can sue the former homeowner for the amount of the deficiency
even after taking back the property.
• Recent years of low interest rates and aggressive marketing campaigns by lenders have
induced tens of thousands to refinance mortgages. Few homeowners realized that by
refinancing their mortgage, they were forfeiting their protections and now are personally
liable.
• C.A.R. created a video detailing Senate Bill 1178. The video can be viewed here.
To read the full story, please click here:
http://losangeles.bizjournals.com/losangeles/stories/2010/05/17/daily8.htmlMay
Foreclosed homeowners could owe
‘tens thousands of dollars’ to lenders.
Facing the possibility of foreclosure, California homeowners may be hit with more than just
losing their homes. Due to a loophole in state law, they also can be sued by their lender.
Senate Bill 1178 by State Sen. Ellen Corbett (D-San Leandro), which will extend anti-
deficiency protection for consumers who have refinanced their original mortgage loans and
now are facing foreclosure.
KEEP THIS IN MIND
• Currently, if a homeowner defaults on a mortgage used to purchase his or her home --
known as a “purchase money mortgage” -- the homeowner's liability on the mortgage is
limited to the property itself. Unfortunately, the original law did not extend the purchase
money protection to loans that refinance the original purchase debt, even if the refinance
only was to obtain a lower interest rate.
• Californians who refinance a property currently do not have protection if they default on
a mortgage greater than the property’s value. Called a “deficiency” liability, under current
California law, the lender can sue the former homeowner for the amount of the deficiency
even after taking back the property.
• Recent years of low interest rates and aggressive marketing campaigns by lenders have
induced tens of thousands to refinance mortgages. Few homeowners realized that by
refinancing their mortgage, they were forfeiting their protections and now are personally
liable.
• C.A.R. created a video detailing Senate Bill 1178. The video can be viewed here.
To read the full story, please click here:
http://losangeles.bizjournals.com/losangeles/stories/2010/05/17/daily8.htmlMay
LINKS FOR BUYERS
Los Angeles Times
Economic recovery will be rapid
San Francisco Fed researchers say
Defying some analysts’ predictions of a slow and subpar U.S. recovery,
researchers at the Federal Reserve Bank of San Francisco are predicting
a rapid economic rebound.
To read the full story, please click here:
http://www.latimes.com/business/la-fi-recovery-20100518,0,5669282.story
Press Enterprise
Loan modification dropouts rise
The number of homeowners dropping out of the Obama administration’s main mortgage assistance plan is
growing, and now is almost equal to the number who have received permanent relief.
To read the full story, please click here:
http://www.pe.com/business/local/stories/PE_Biz_D_mortgage18.13b5509b.htmlMay
Economic recovery will be rapid
San Francisco Fed researchers say
Defying some analysts’ predictions of a slow and subpar U.S. recovery,
researchers at the Federal Reserve Bank of San Francisco are predicting
a rapid economic rebound.
To read the full story, please click here:
http://www.latimes.com/business/la-fi-recovery-20100518,0,5669282.story
Press Enterprise
Loan modification dropouts rise
The number of homeowners dropping out of the Obama administration’s main mortgage assistance plan is
growing, and now is almost equal to the number who have received permanent relief.
To read the full story, please click here:
http://www.pe.com/business/local/stories/PE_Biz_D_mortgage18.13b5509b.htmlMay
| BRENDA HAYWARD & Associates 310.589.1201 310.457.6550 YourMalibuRealtors@yahoo.com |
CNN Money
After foreclosure: How long until you can buy again?
Financing a home after foreclosure is possible for most homeowners. Those who default on their
mortgages due to economic hardships, such as job loss, may receive approval for another mortgage
in as little as two years, while it may take more than seven years for strategic defaulters to be
approved.
KEEP THIS IN MIND
• Lenders utilize several methods in determining whether to grant mortgages, including the amount
of money borrowers have saved; employment histories; and payment history.
• According to the chief economist with the Mortgage Bankers Association, lenders may be more
willing to finance a mortgage for a borrower who defaulted on their mortgage as a result of factors
beyond their control.
• Some homeowners who strategically default—intentionally not meet their mortgage obligations
although they have the financial means to do so—assume they can raise their FICO scores by paying
their others bills on time. However, most future loan underwriters will scrutinize their records very
closely, and if they determine the borrower strategically defaulted on their previous mortgage, the
repaired credit score will not overshadow the walkaway.
• Although not impossible for strategic defaulters to finance another home purchase, it likely will be
more difficult. Lenders may ask for down payments of 30 percent or more to provide sufficient
collateral to enable the bank to recoup most of its money in a foreclosure. These borrowers also may
be charged higher interest rates, even above the levels other borrowers with similar credit scores
would receive.
To read the full story, please click here:
http://money.cnn.com/2010/05/28/real_estate/homebuying_after_foreclosure/index.htmhttp:
//money.cnn.com/2010/05/28/real_estate/homebuying_after_foreclosure/index.htm
After foreclosure: How long until you can buy again?
Financing a home after foreclosure is possible for most homeowners. Those who default on their
mortgages due to economic hardships, such as job loss, may receive approval for another mortgage
in as little as two years, while it may take more than seven years for strategic defaulters to be
approved.
KEEP THIS IN MIND
• Lenders utilize several methods in determining whether to grant mortgages, including the amount
of money borrowers have saved; employment histories; and payment history.
• According to the chief economist with the Mortgage Bankers Association, lenders may be more
willing to finance a mortgage for a borrower who defaulted on their mortgage as a result of factors
beyond their control.
• Some homeowners who strategically default—intentionally not meet their mortgage obligations
although they have the financial means to do so—assume they can raise their FICO scores by paying
their others bills on time. However, most future loan underwriters will scrutinize their records very
closely, and if they determine the borrower strategically defaulted on their previous mortgage, the
repaired credit score will not overshadow the walkaway.
• Although not impossible for strategic defaulters to finance another home purchase, it likely will be
more difficult. Lenders may ask for down payments of 30 percent or more to provide sufficient
collateral to enable the bank to recoup most of its money in a foreclosure. These borrowers also may
be charged higher interest rates, even above the levels other borrowers with similar credit scores
would receive.
To read the full story, please click here:
http://money.cnn.com/2010/05/28/real_estate/homebuying_after_foreclosure/index.htmhttp:
//money.cnn.com/2010/05/28/real_estate/homebuying_after_foreclosure/index.htm
The Wall Street Journal
Luxury sales bounce back
After a near-disastrous 2009, the luxury market appears to be making a comeback, driven by growing buyer
confidence, improved financing conditions, and more-realistic seller pricing.
To read the full story, please click here:
http://online.wsj.com/article/SB10001424052748704717004575268573660359734.html?mod=WSJ_Real+Esta
te_LeftTopNews
Luxury sales bounce back
After a near-disastrous 2009, the luxury market appears to be making a comeback, driven by growing buyer
confidence, improved financing conditions, and more-realistic seller pricing.
To read the full story, please click here:
http://online.wsj.com/article/SB10001424052748704717004575268573660359734.html?mod=WSJ_Real+Esta
te_LeftTopNews