The last year and a half or so has seen a amazing chain of events happen in the New Jersey refinance industry with the shutting down of hundreds if not thousands of lending institutions and the elimination of many of the so-called “exotic” products.
When the dust finally settled only the most persistent have remained well positioned and able to lend to qualified families. We are proud to be among those standing tall and offering the very best of what is available today for the consumer. Along with standard New Jersey usda mortgage that we have available, we are among the few remaining lending institutions that can offer Stated Income Verification mortgages to our highly qualified New Jersey borrowers.
What sets apart “No Income Verification” from “Stated Income” loans?
The answer is that real “No Income” allows for the verification of a borrower's employment while allowing the income section of the application to remain [spin]empty. A “Stated Income” mortgage on the other hand, requires a home buyer to “state” an income to be used on the 1003 form, but not be verified. It must however, coincide for line of work that the home buyer's is in. In both cases, fund verification is a must and must be significant enough to warrant approval of the loan. There is no set calculation as only common sense will prevail. It is important to note that these products are for owner occupied properties ONLY and the person's MUST be self-employed or retired.
What is the upside of going with a “No Income” or “Stated Income” loan?
With the changes that have occured in the industry there is not a higher level of automated underwriting approval that allows for income to be accepted as stated therefore, the only selections available for the self-employed or retired borrower are those previously mentioned. Stated Income loans are allowed up to 70% loan to value (LTV) while No Income loans are limited to 60% LTV.
What make these products desired as well is that the interest rates are quite similar to Fannie Mae and Freddie Mac income verified mortgages. The add-on to the interest rate is .375% for No doc and .25% for Stated Income mortgages. To be more specific a 30 year fixed rate as of this blog posting would be 5.50% up to $417K for No Income and 5.375% for Stated Income. These programs are available for our 5/1, 7/1, 10/1 ARMS as well as our 10, 15 and 40 year fixed.
If you have been having difficulty proving your income with you normal mortgage company then a no income documentation mortgage may be just what you have been hoping for.
Saturday, November 7, 2009
Can A Mortgage Alteration Lower Your Credit Report?
Many people these days are considering if they should apply for the government sponsored colorado map program Making Home Affordable. One of the major concerns folks have is what effect a loan alteration will have on their credit score.
Until now a colorado commercial mortgage was reported in various ways depending upon the individual bank and their reporting rules. Some banks would report a mortgage modification as “paid as agreed”, however, most would report them as “partial payment”, which has a derogatory impact on a person’s credit score. A “partial payment” report is a serious negative, in the same category as a foreclosure or short sale according to FICO spokesman Craig Watts. FICO, is one of the 3 largest credit reporting companies in the US.
New reporting plan
Starting November 1, 2009, mortgage companies are encouraged to use a new benign way to report government-sponsored loan alteration. Under guidelines put out by the Consumer Data Industry Association, lenders should report them as a “loan modificationunder a federal government plan”. CDIA is the association which represents credit bureaus. FICO, the leading provider of credit scores, will ignore this new notation for the time being. It will neither help nor hurt a home owner’s credit numberscore until FICO decides how to treat it. FICO says new mortgage changes will not hurt scores. “Once there is enough documented performance for people who went through a government sponsored loan modification, we will be able to assess the accumulated data to determine how predictive it is”, says FICO spokesman Craig Watts. As a rule the analysts prefer having at least a year’s worth of performance data before making any alterations to its credit-scoring formula.
Under the associations guidelines, if a person is current with his mortgage payments before and during a trialmortgage alteration period (typically three months), the lender is supposed to report the mortgage as current.
Starting November 1, 2009, if the loan adjustment is approved after the trial period, the lender adds a comment that it was modified under a federal plan instead of the dreaded “partial payment”.
If the mortgage was at least 30 days past due before the trial mortgage modification, payments during the trial period will not bring it above water. The lender will continue to report the appropriate level of delinquency, but if the note alteration is approved, it will reported as a loan alteration under a federal plan.
Caveats
The new designation could affect a home owner down the road if FICO decides to treat it as a risk factor. Even if it never affects the scoring formula, potential mortgage company can see it on an applicant’s credit report and decide for themselves how to handle it. Have in mind that in a few cases the financial instituations will look beyond a credit report and study someone’s full credit history when determining a home owners’s credit worthiness.
Until now a colorado commercial mortgage was reported in various ways depending upon the individual bank and their reporting rules. Some banks would report a mortgage modification as “paid as agreed”, however, most would report them as “partial payment”, which has a derogatory impact on a person’s credit score. A “partial payment” report is a serious negative, in the same category as a foreclosure or short sale according to FICO spokesman Craig Watts. FICO, is one of the 3 largest credit reporting companies in the US.
New reporting plan
Starting November 1, 2009, mortgage companies are encouraged to use a new benign way to report government-sponsored loan alteration. Under guidelines put out by the Consumer Data Industry Association, lenders should report them as a “loan modificationunder a federal government plan”. CDIA is the association which represents credit bureaus. FICO, the leading provider of credit scores, will ignore this new notation for the time being. It will neither help nor hurt a home owner’s credit numberscore until FICO decides how to treat it. FICO says new mortgage changes will not hurt scores. “Once there is enough documented performance for people who went through a government sponsored loan modification, we will be able to assess the accumulated data to determine how predictive it is”, says FICO spokesman Craig Watts. As a rule the analysts prefer having at least a year’s worth of performance data before making any alterations to its credit-scoring formula.
Under the associations guidelines, if a person is current with his mortgage payments before and during a trialmortgage alteration period (typically three months), the lender is supposed to report the mortgage as current.
Starting November 1, 2009, if the loan adjustment is approved after the trial period, the lender adds a comment that it was modified under a federal plan instead of the dreaded “partial payment”.
If the mortgage was at least 30 days past due before the trial mortgage modification, payments during the trial period will not bring it above water. The lender will continue to report the appropriate level of delinquency, but if the note alteration is approved, it will reported as a loan alteration under a federal plan.
Caveats
The new designation could affect a home owner down the road if FICO decides to treat it as a risk factor. Even if it never affects the scoring formula, potential mortgage company can see it on an applicant’s credit report and decide for themselves how to handle it. Have in mind that in a few cases the financial instituations will look beyond a credit report and study someone’s full credit history when determining a home owners’s credit worthiness.
How Note Modification Affect Credit Report
There are several ways a lower my mortgage payment may impact your credit score. Getting a mortgage workout does not automatically mean your credit adjusted, however, many people think that affiliate mortgage modification automatically impacted negatively and that is just not correct.
Homeowners who are current on their mortgage payments and have negotiated a permanent loan modification, without first going through a trial attorney loan workout will see no adverse affects on their credit reports. Remember that in order for your credit to receive a negative check, you as the homeowner either have to be late on the note payment or have not paid the monthly payment in full based on the original mortgage agreement.
If you have not been making your loan payments and you apply for a note workout, your credit score will have already been affected. For example, if your monthly payment is due on the first of December and you fail to make the payment by January first, a 30 day late entry will be added to your credit score. If a payment has not been made by February first, a 60 day late entry will be added.
In the past year, lenders have increased the number of attorney mortgage modification that they are agreeing to due to the addition of federal programs such as Making Homes Affordable and the Home Affordable Modification Program. In the past, banks relied on their own loan Alteration programs, but with the government incentives offered by MHA and HAMP programs, the volume of loan workout reviewed by banks has increased. With that in mind, the addition of these new programs usually requires the homeowner to sign up for a trial attorney mortgage modification as the lenders determines if you qualify for a permanent attorney mortgage workout during that trial period, which is usually three months. During that three month period the homeowner is required to make the new trial note change payments on time, else the permanent modification will be denied.
One of the main negatives of the trial loan Alteration (http://www.callalms.com)period is that the homeowner will receive derogatory marks on their credit report, even if they do at the end of the trial period qualify for the permanent modification. In general during the trial period, the homeowner will still receive a 30 and 60 day late entries on their credit report because they are not making the full payments as agreed upon in their original loan. Instead, the homeowner has agreed to a trial attorney mortgage workout at a lower payment.
Homeowners who are current on their mortgage payments and have negotiated a permanent loan modification, without first going through a trial attorney loan workout will see no adverse affects on their credit reports. Remember that in order for your credit to receive a negative check, you as the homeowner either have to be late on the note payment or have not paid the monthly payment in full based on the original mortgage agreement.
If you have not been making your loan payments and you apply for a note workout, your credit score will have already been affected. For example, if your monthly payment is due on the first of December and you fail to make the payment by January first, a 30 day late entry will be added to your credit score. If a payment has not been made by February first, a 60 day late entry will be added.
In the past year, lenders have increased the number of attorney mortgage modification that they are agreeing to due to the addition of federal programs such as Making Homes Affordable and the Home Affordable Modification Program. In the past, banks relied on their own loan Alteration programs, but with the government incentives offered by MHA and HAMP programs, the volume of loan workout reviewed by banks has increased. With that in mind, the addition of these new programs usually requires the homeowner to sign up for a trial attorney mortgage modification as the lenders determines if you qualify for a permanent attorney mortgage workout during that trial period, which is usually three months. During that three month period the homeowner is required to make the new trial note change payments on time, else the permanent modification will be denied.
One of the main negatives of the trial loan Alteration (http://www.callalms.com)period is that the homeowner will receive derogatory marks on their credit report, even if they do at the end of the trial period qualify for the permanent modification. In general during the trial period, the homeowner will still receive a 30 and 60 day late entries on their credit report because they are not making the full payments as agreed upon in their original loan. Instead, the homeowner has agreed to a trial attorney mortgage workout at a lower payment.
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