buy a house with bad credit

amortization

Definition 1

The gradual elimination of a liability, such as a mortgage, in regular payments over a specified period of time. Such payments must be sufficient to cover both principal and interest.

Definition 2

Writing off an intangible asset investment over the projected life of the assets.

Worst Real Estate Crisis Since Great Depression, Reports Housing PredictorWEBWIRE - Thursday, October 11, 2007

The mortgage crisis has developed into the worst real estate crisis since the Great Depression, according to the latest report from Housing Predictor. Hundreds of thousands of conventional mortgage borrowers are being foreclosed.

The crisis not only has the ability to cause a recession, according to the new Housing Predictor report, but analysts only question it's severity and how much of an impact it will have on the overall U.S. economy.

This last March Housing Predictor was the first to forecast the Federal Reserve would cut interest rates by the end of 2007 and set out on a path of interest rate cuts in order to lessen the severity of the crisis. The Fed has cut the bench mark lending rate by a half point and has indicated further rate cuts would be made in the near future.

More than 250 cities housing markets in all 50 U.S. states are tracked by Housing Predictor and the over-whelming majority are seeing home prices fall, many at the fastest rate of deflation they have seen since the 1930's. Real estate sales in the majority of markets are slower than at the peak of the U.S. Savings and Loan Crisis. However, a little more than a handful of states are still seeing their markets appreciate.

Housing Predictor provides independent housing market forecasts and keeps visitors up to date on changing market conditions with insightful analysis of the real estate market. The web site is regularly consulted by consumers, leading mortgage companies, Wall Street investment bankers, real estate firms, banks and retail businesses for its highly accurate forecasts.

Housing Predictor forecasts that more than 3-million foreclosures will occur through 2009 due to the subprime crisis and other problems in the conventional mortgage market. New bills in Congress to help some home owners are being worked on to stem the tsunami of foreclosures, but the Congressional process is slow and appears to help few home owners under pressure by lenders in foreclosure.

The proposals introduced by legislators so far address only primary residences, and do not address investors needs. An estimated 5 million adjustable rate mortgages are set to be re-set in the U.S. through 2009 and at least a third are mortgages held by investors.

The epidemic started in the subprime mortgage market and spread into conventional loans through the use of exotic and creative mortgages developed by mortgage companies just to make new mortgages to borrowers.

A Housing Predictor poll determined the over-whelming majority of Americans do not want the U.S. Congress to bail out mortgage companies and Wall Street investment bankers from the foreclosure crisis.

Read the latest details in the full Housing Predictor report on the real estate crisis, check your market's forecast and search foreclosures at http://www.housingpredictor.com

Mortgage crisis: Despite halts by Fannie Mae, Freddie Mac, Citigroup, foreclosures jump 30% in Feb.
THE ASSOCIATED PRESS

Thursday, March 12th 2009, 10:27 AM

Related NewsArticlesDaly: Mortgage madness' huge tollBankruptcy may be last best way outFor those willing to pounce, big deals on foreclosuresMortgage woes hit an all-time highWhat Obama's home bailout plan means to youDespite halts on new foreclosures by several major lenders, the number of households threatened with losing their homes rose 30 percent in February from last year's levels, RealtyTrac reported Thursday.

Nationwide, nearly 291,000 homes received at least one foreclosure-related notice last month, up 6 percent from January, according to the Irvine, Calif-based company. While foreclosures are highly concentrated in the Western states and Florida, the problem is spreading to states like Idaho, Illinois and Oregon as the U.S. economy worsens.

"It doesn't bode well," for the embattled U.S. housing market, said Rick Sharga, vice president for marketing at RealtyTrac, a foreclosure listing firm. "At least for the foreseeable future, it's going to continue to be pretty ugly."

The rise in foreclosure filings came despite temporary halts to foreclosures by Fannie Mae and Freddie Mac, and major banks JPMorgan Chase, Morgan Stanley, Citigroup and Bank of America. Those companies pledged to do so in advance of President Barack Obama's plan to stem the foreclosure crisis, which was launched last week.

Two states that contributing to the increase were Florida and New York, where temporary bans on foreclosures ended.

But other states are moving to enact similar measures. On Wednesday the Michigan House approved legislation that would give homeowners facing foreclosure a 90-day reprieve. The legislation now goes to Michigan's Republican-led Senate, where its future is unclear.

While the number of foreclosures continue to soar nationwide, banks have held off listing properties for sale, Sharga said. There were around 700,000 such properties nationwide at the end of last year, making up a "shadow inventory" of unsold homes that could drag the housing crisis out even longer.

"It's going to take us longer than you might anticipate to burn through he inventory of distressed properties," he said.

The results highlight the challenge ahead for Obama and his economic advisers. The Obama administration is aiming to help up to 9 million borrowers stay in their homes through refinanced mortgages or loans that are modified to lower monthly payments.

Still, the faltering economy, driven down by the collapse of the housing bubble, is causing the housing crisis to spread. Nearly 12 percent of all Americans with a mortgage - a record 5.4 million homeowners - were at least one month late or in foreclosure at the end of last year, according to the Mortgage Bankers Association. That's up from 10 percent at the end of the third quarter, and up from 8 percent at the end of 2007.

The RealtyTrac report said more than 74,000 properties were repossessed by lenders in February as the worst recession in decades, falling home values and stricter lending standards continue to sap the U.S. real estate market.

Nevada, Arizona, California and Florida had the nation's top foreclosure rates. In Nevada, one in every 70 homes received a foreclosure filing, while the number was one every 147 in Arizona. Rounding out the top 10 were Idaho, Michigan, Illinois, Georgia, Oregon and Ohio.

Among metro areas, Las Vegas was first, with one in every 60 housing units receiving a foreclosure filing. It was followed by the Cape Coral-Fort Myers area in Florida and five California metropolitan areas: Stockton, Modesto, Merced, Riverside-San Bernardino and Bakersfield.

Tips on getting feds to cut your house payment
The key is to show bank you're in its 'modification sweet spot'
Latest from Forbes.com

If your income slumped along with the economy, you've got plenty of company these days. So much so that the government has a program meant to help you out by cutting your mortgage payments to 31 percent of your gross income. But it turns out that qualifying for this benefit will probably take some fancy footwork, a sympathetic partner and a little luck. Here are some pointers for navigating the terrain.

Get to know the program
The program in question is the Obama administration's $75 billion Making Home Affordable program.

It applies to mortgages held by Fannie Mae and Freddie Mac, the two giant mortgage holders that the government took control of a year ago. Under the government's auspices, Fannie and Freddie are now cutting interest rates on mortgages they own to as little as 2 percent, with the aim of lowing payments to no more than 31 percent of a homeowner's gross income.

How do you know if Fannie or Freddie own your mortgage? The simplest way is to visit each of the lender's Web sites and type in the information requested about you and your residence. Remember: The giant home financing organizations buy loans that were originated by commercial banks and own a significant portion the nation's entire home loan assets. That means you may have taken out your mortgage through Bank of America, Wells Fargo or another private lender, and they may still be servicing your account, while ownership has actually been transferred to Fannie or Freddie (if not, you're out of luck).

If you do have a Fannie or Freddie loan, then figure out what portion of your gross monthly income your housing payment consumes. In this case, your "housing payment" means not only your mortgage costs but your PITI (principal, interest, taxes and insurance). Since you first took out your mortgage, it may have zoomed way up as a percentage of your household income, either because you and your spouse's income has fallen or because the adjustable rate of interest on the loan has ratcheted up. In either case, you should consider applying.

Navigating the process
Even when Fannie and Freddie own loans, they don't handle homeowner paperwork themselves. Instead, they rely on banks to service their loans and to decide who qualifies for the Making Home Affordable program. The banks have been both stingy about granting approvals and overwhelmed by the sheer volume of applications.

The key to receiving a modification seems to be convincing the bank that you're in its modification "sweet spot." That means you're in dire enough financial straits to need help but not so deeply in trouble as to be hopeless. After all, the point of the program is to modify loans in a way that borrowers will be able to keep up.

Disqualifiers
What might disqualify you? Savings, for one thing. We spoke with nearly a dozen homeowners who applied for modifications. Several were turned down because of their hefty savings accounts.

On the other hand, if you have no savings and no job or income, you'll likely be turned down for a modification too. The program requires that applicants show proof of current income and that the income is likely to continue for at least nine months. Since in most cases unemployment benefits are part of a six-month program, they're unlikely to qualify you.

Other variables that can influence the odds of getting approved include your other debts (credit cards and car loans) and fixed costs. Once again, banks are looking for modifications that borrowers can live with. If you're seeking to have your housing payment cut to 31 percent of your income but are spending another 60 percent on private school tuition and health club memberships, the bank is unlikely to be convinced that you're a viable candidate.

Showing just enough distress
It isn't pretty, but to go to the top of the list in your bank's loan modification department, it might help to miss a mortgage payment or two. "It feels terrible to say it, but go delinquent," says Ron Morgan, chief executive of Sterling Home Retention Services. Morgan's firm specializes in home-loan workouts, and many banks are outsourcing their problem loans to firms like his.

If you need help with the application process, it's probably available. The U.S. Department of Housing and Urban Development has a network of debt counselors, many available to work with you free of charge.

Tools on the Internet may also help you improve your chances at getting a modification. The owner of Homeowner's Toolbox is a former California mortgage broker who says he has consulted with the banks he used to source loans for and has a sense of each bank's modification "sweet spot." Homeowner's Toolbox is free to users and claims to estimate the probability that a homeowner will be approved for a modification.

The last thing you want to do is make your financial problems worse. That means avoiding any for-profit outfit that "promises" to get you a modification or that insists on a large payment upfront.

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