Mailbag: IRS to give Tax Lien holders a break

Category: Consumer Education

Posted on in Consumer Education

Mailbag: IRS to give Tax Lien holders a break

From time to time, we get great content from our friends over at Advantage Credit. In December, they wrote about Short Sale and Foreclosures and how each affects your credit report. Short Sale Vs. Foreclosure: How Does Each Affect My Credit? Advantage is back with an update on the latest changes from the IRS regarding Tax Liens. The big change … If you have had a tax lien in the past and you have paid it off in full or by settlement, you can now remove the lien from your credit report, thereby increasing your credit scores. This is good news for consumers and will help some folks obtain home financing that otherwise couldn’t. It’s not often we cheer for the IRS but this is one instance they deserve some credit (sort of a pun there). Anyway, here’s the skinny, courtesy of Mindy Leisure and Advantage Credit. Up until now a tax lien, paid or unpaid could haunt your credit […]

by jberman
Posted on in Consumer Education

Mailbag: Short Sale Vs. Foreclosure: How Does Each Affect My Credit?

Question: Short Sale Vs. Foreclosure: How Does Each Affect My Credit? A short sale in real estate occurs when the outstanding obligations (loans) against a property are greater than what the property can be sold for. In this time of option-arms coming due we will see more and more borrowers trying to negotiate short sales as opposed to going into foreclosure. In most cases the borrower are behind on payments and about to go into foreclosure. Some short sales are negotiated simply because a borrower knows they are upside down on their mortgage but has not reached the point where they have late payments. For example, the borrower’s loan is interest only and they have been unable to make principal payments. The original loan amount was $250,000 and they have been making the minimum payment and the loan balance has increased to $263,000. At the same time, the home only appraises for the $250,000 or possibly even less. Because the option-arm period is up, the borrower’s mortgage payments will increase […]

by jberman
Posted on in Consumer Education

How Important is Identity Security to Your Mortgage Originator?

As it relates to our mortgage practice, I’ve been thinking about privacy and data security a lot lately. Mortgage Origination IS moving online. This means thousands of individuals like me are discovering that it is both efficient and economical to operate a mortgage practice on the web. One of the many benefits of operating in a virtual manner is the increased number of tools available that we can utilize to protect the critical identity information entrusted to us by our clients. Operating online, we have less physical risk than a traditional mortgage office. (More on this in a future post) Think about it. A loan application contains all the information a criminal needs to steal your identity. Your information is only as safe as the competence of your mortgage originator and the people in their office. I’ve seen loan files sitting unlocked in vehicles. I’ve seen loan applications sitting in recycle bins in plain view of passing strip mall traffic. […]

by jberman
Posted on in Consumer Education

From the Mailbag: Shorter Maturity Loan Terms

Question: Can I get a mortgage for less than 30 years? Is that a good deal? – Avi, Westminster, CO The quick answer is yes & maybe. Mortgages are available in a variety of loan terms. The two most common are 30 year fixed and 15 year fixed. However, 25 year and 20 year options are becoming more popular with consumers. Many people like the idea of refinancing to a shorter term and paying off their home more quickly. In some instances, dropping the rate will offset the shorter maturity of the new loan and result in paying off faster with the same monthly investment. The second part of the question is a little harder to discern. Terms such as the 20 year and 25 year often offer little rate incentive. These options do however offer a price incentive. Typically, 12.5bps-25bps ($250-$500 on a $200,000 loan) of a price improvement for these options. So while these options are the same […]

by jberman
Posted on in Consumer Education

From the Mailbag: Holding Title to a Home

Throughout the year we get lots of mortgage-related questions from our customers and readers of this blog. We thought it would be fun to start answering some of the questions on a regular basis as a featured post. If you have a question, send it to us through the contact us page. “I’m confused about the different ways one can hold title to a home. I’m a first-time buyer and my mom is interested in being on the loan with me. Would you please explain the options?” – Eve in Denver Answer: Several options as to how title to a home can be held exist, each has its advantages. It’s important to know your options before signing the final papers. SOLE OWNERSHIP. For a single person buying a home, this is the most often used title-holding option. Even married couples can choose this Sole Ownership if one of the spouses signs a quick claim deed terminating marital rights to the […]

by jberman
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