CreditCrunch Back-to-Basics Lending: Lenders Say No Mas to Mortgages with Zero-down Payment

CreditCrunch Back-to-Basics Lending: Lenders Say No Mas to Mortgages with Zero-down Payment

First-time buyers are in it for a rude awakening. They will be required to put down up to 3 % down on their mortgage deal. The percentage may be different if it has to do with a jumbo loan of more than $417,000. It is the time to go back to the basics of lending championed by Fannie Mae and Freddie Mac in the mid-1980s. Lenders are taking measures to eliminate zero down-payments these days. It is a clear sign of the credit crunch this country is going through. Lenders are not willing to take risks any longer. Most buyers or consumers will have to have a credit score of 700 to even consider negotiating. Remember that the score of 850 is considered optimal. If borrowers are in the 300 credit score, they do not even need to show up these days. Lenders will examine the borrowers' credit history which usually has some inaccuracies. Borrowers should be ready to fix, dispute and correcting any errors found in the reports issued by the credit bureaus. Only after doing all of that, will borrowers have a chance to see their scores boosted and secure better loans. For some time to come, jumbo loans or mortgages of more than $417,000 will be out of the question for many borrowers.

As long as the credit squeeze continues, lenders will continue to minimize their loss. Due to foreclosures and the depreciation in home values, many homeowners who used to pay their bills are finding themselves in a tight impasse. They figure it is easier to just walk out of their loans.

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What You Can Do to Avoid Foreclosures: Foreclosures Prevention Tools and Other Ways to Get out of Financial Funk

Questions on Foreclosures Answered Here:

What You Can Do to Avoid Foreclosures: Foreclosures Prevention Tools and Other Ways to Get out of Financial Funk

President Bush recently announced that the Federal Housing Administration will begin a program to allow homeowners who have good credit but can not afford their mortgages to refinance to FHA-insured mortgages. In the meantime, there are a few things you can do to avoid foreclosure on your property. Any homeowners should start taking matters in their own hands. Way before foreclosure is lurking around, they need to start consulting with their lawyers or credit counselors. The easiest thing they can do is to contact their mortgage lender. Who else knows better than the mortgage borrowers themselves? They need to call the loan servicer before they start falling behind. It will be pretty hard to catch up once payments are late.

Here are a few ways to avoid foreclosure: Refinancing may be considered if you have enough equity in the home. Even if you do not have equity, try it any way. The process may be more difficult though. You can persuade the lender to modify the terms of the loan. You can sell the house of file for bankruptcy protection as in filing Chapter 13. There is no easy way out. No easy option for sure. Homeowners who are facing foreclosure should never ignore letter from lenders. They must try to update their phone records in case the lenders want to contact them. Borrowers or homeowners should remember that the banks or lenders or investors do not want to own your own. They do not want to declare foreclosure on your property because of all the costs and time involved. All you have to do is to make a good gesture. They need to know that you are not going to run away and that they can keep your words.

Homeowners can look for some resources such as the Neighborhood Assistance Corporation of America, which has aligned itself iwth Citigroup and Bank of Ameirca to pledge $1 billion for people at risk of losing their homes. They can contact the department of housing and Urban development, Freddie Mac's guide to avoiding foreclosures, NeighborWorks America's Center for Foreclosure Solutions and the Federal Trade Commission's fact sheet "Mortgage Payments Sending You Reeling? Here's what to do."

Lenders can also make arrangements for a forbearance or repayment plan. A forbearance is a suspension or reduction of monthly payments until the borrower regains financial footing. With a repayment plan, the missed payments are spread out over time. The borrower has to pay them in addition to the regular mortgage. Borrowers can also look at "short sale" which is an arrangement in which the lender allows the sale of the property for less than is owed. This process may take some time too. Not too many lenders are willing to do this. Patience will pay off in the end. Cash-strapped borrowers may think about a "deed in lieu of foreclosure." That means that the lender is given ownership rights without the shame of a foreclosure.

The Salvaterras Bought New Home in Hancock Park

Fast Food Nation Producer and Nickelodeon Executive, Chris Salvaterra, Sold Home in L.A.'s Venice section

Chris Salvaterra and his wife, writer, Marjorie, sold their refurbished, contemporary Venice-based home to director Robert Schwentke and his wife Jen Howard. They sold the home for which has five bedrooms, three bathrooms and sits on 2,600 square feet for $1.6 million.

The Salvaterras bought a new dig in the Hancock Park section of Los Angeles.

Style Maven Cojo Got New Dig in the Hills

Cojo or Steven Cojocaru, style maven and fashion critic by excellence, has been ready for a change of cribs. He wants to go the Hollywood Hills to rub shoulders with his peers. He is buying a contemporary house with city views and a pool for about $4 million.

The home has five bedrooms and four bathrooms in what amounts to 4,000 square feet. The Midcentury Modern has been remodeled. Cojo used to appear on NBC's "Today" show for about four years. He was serving as People Magazine's West Coast style editor. He then became a correspondent on "Entertainment Tonight" in 2003 and the "ET" spinoof series "The Insider" in 2004. What is Cojo doing these days? Well, you may find him picking the latest decorations for his new crib.

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Actress Catherine Bell Bought New Home

Actress Catherine Bell and her husband, actor Adam Beeson put their home in nearby Calabasas on the market for $3.25 million. The two have owned the one-story, nearly 6,000-square-foot villa for about two years. The couple is anticipating their move to South Carolina where the Lifetime series is filmed. Actress Catherine Bell co-starred for nine seasons on "JAG." She is now a star on "Army Wives." Bell, 39 and Beeson, 38, bought the Calabasas home when it was being built. The home is located in a gated community. It sits on about one acre, has a screening room, five bedrooms, six bathrooms and superb mountain views. Who else is selling and buying new homes?

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Paris Hilton has a new address in Hollywood Hills

First it was sister Nikki. Then it was Paris who bought a home after getting out of jail. Now the Simple Life superstar and Vegas highlighter bought a new home in the Hills. She may not have liked her home too much. She listed it for $ 4.2 million and purchased a new home in more private area. "After she returned to her home in the busy Sunset Strip area of the Hollywood Hills, she listed it for $4.25 million and purchased a home on a street less traveled for $5.9 million. The asking price was $6.25 million. Hilton bought in the Beverly Hills Post Office area and, as she desired, in a gated community."

Hilton's new home was built in 1991 and has five bedrooms and six bathrooms plus separate guest quarters and an office in 7,400 square feet.


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