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June loan preapproval by jennyyingdi


									       The New York Times

The advantages of preapproval
The housing market is warming up in many areas, with multiple offers becoming more
commonplace. Buyers who want an advantage in the bidding process will need more than a
mortgage prequalification – they will need a preapproval.

Making sense of the story

      The differences between mortgage prequalification and preapproval are significant.
       Prequalifying for a mortgage is based solely on what a borrower discloses to the loan
       officer or broker about his/her earnings, credit score, and total assets, including what is
       available for a down payment. By contrast, a preapproval requires a borrower to provide
       documentation of his/her income and assets.

      The lender typically pulls the borrower’s credit report and score, while the borrower
       gathers together almost everything else needed for the actual mortgage underwriting: W-
       2 wage statements; 1099s; recent pay stubs; bank statements; and statements from
       Individual Retirement Accounts and 401(k)s; and other assets that could show the
       borrower has the resources to buy and maintain a home.

      At one of the country’s largest mortgage lenders, Wells Fargo, the first quick review
       provided by an underwriter constitutes an agreement to lend. Other lenders may treat
       preapprovals as more of an opinion on the person’s ability to borrow, not a guarantee to

      With so many homes receiving multiple offers, a preapproval is more important in
       today’s marketplace.

      The preapproval letter should include the amount a borrower is qualified to borrow, as
       well as the loan officer’s contact information. Some letters may have an estimated
       monthly payment, but details about the loan time and interest rate are not included.

      Timing also is important. Buyers should aim for obtaining a preapproval letter from a
       lender within 30 to 60 days of the expected purchase date. That is because some letters
       expire in 90 days.

Read the full story

June 14, 2012
In other news …

       Los Angeles Times

Shortage of homes for sale creates fierce competition
The newest problem for the slowly improving housing market isn’t a shortage of serious buyers,
it’s a shortage of good homes.

Read the full story


Down payment biggest obstacle to homeownership
Feelings about homeownership remain positive in the face of a diminished market, but an
uncertain economy and increasing down payments are keeping Americans from making
purchases, a report from Integra Realty Resources said.

Read the full story

       San Francisco Chronicle

HARP 2 starts to help the severely underwater
HARP 2 is starting to pay off for some deeply underwater homeowners. Last fall, the
government said it would remove the 125 percent loan-to-value cap and loosen other
restrictions that had prevented many homeowners from refinancing under the original HARP.

Read the full story

      The Wall Street Journal

Big homes are back in business
KB Home says the average square footage of houses currently under contract is 2,079, an
increase of 13 percent from last year. That is a change from the past few years, when builders
were downsizing houses to accommodate an era of frugality and austerity.

Read the full story

June 14, 2012
       San Diego Union Tribune

Did you face foreclosure in ’09 or ’10? You may be due money
More than 4 million people in the U.S. may be eligible for free independent reviews of their
foreclosure experiences and could be owed money if mistakes and problems are found, federal
officials say.

Read the full story

       The New York Times

U.S. agency to sell off loans to stem foreclosures
In a move intended to prevent foreclosure for thousands of homeowners and shed some
seriously delinquent home loans, the Federal Housing Administration will sell off distressed
mortgages in bulk, the housing secretary said Friday.

Read the full story

       The Wall Street Journal

Probe widens into mortgage lenders
Federal officials are broadening their investigations of mortgage lenders that use a popular
federally backed mortgage program, a move that could force more banks to pick up some of the
rising tab for losses at the Federal Housing Administration.

Read the full story


Negative equity props up home prices in toughest markets
Many housing markets may be undersupplied because underwater borrowers are unable to put
their homes up for sale. According to CoreLogic, this paradox may actually be pushing prices
upward for some.

Read the full story

June 14, 2012
Talking Points

         A surprising number of homeowners are bucking the notion that good fences make
          good neighbors and taking down the fences in favor of bigger gardens and more
          space to entertain.

         While some homeowners are turning previously neglected corners into shared
          garden and dining spaces, togetherness does have its down sides. Gardening
          expenses can be split evenly, but who pulls the weeds and who gets to pick the fruit?
          What happens when one neighbor wants to sell? Some people draw up legal
          contracts to help prevent acrimony and spell out how they will disband.

         Additionally, yard-sharing is rare in new developments of single-family homes with
          privacy fences often required under community covenants and building codes.

         A shared yard also could dampen an individual home’s value and prolong the time
          spent on the market, as potential buyers likely will want to put up a fence instantly,
          adding costs to the home.

         Because of these issues, some real estate agents are advising that neighbors
          restore fencing when either home is offered for sale. It is best to install the fence
          before the listing the home, as some buyers will not want to be the bad new neighbor
          who required a fence.

June 14, 2012

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