Friday, September 19, 2014

Ask the "Mortgage Man": SATISFYING JUDGMENTS ON YOUR CREDIT

Ask the "Mortgage Man": SATISFYING JUDGMENTS ON YOUR CREDIT: Have you ever heard of someone paying their judgment and it still is being shown as unpaid? This is a common occurrence.  Creditors are ea...

SATISFYING JUDGMENTS ON YOUR CREDIT

Have you ever heard of someone paying their judgment and it still is being shown as unpaid?

This is a common occurrence.  Creditors are eager to take your money, but they have no incentive to go to the trouble of removing the judgment, or at least showing it as being paid.  Once you pay them it is too late to negotiate with them.  They can still continue to show the judgment as being unpaid for up to 10 years!  If a potential home buyer is attempting to purchase a home, and a judgment shows as being unpaid, even if the lender is willing to give a mortgage, the title company can't get clean title for the borrower without proof the lien is paid and satisfied in the courthouse.

You owe it to yourself to follow these simple steps if paying off an old judgment:
1. Contact the creditor who filed the judgment against you. ( Don't call the magistrate or courthouse)
2. Get a bank or cashier's check for the entire amount owed, made payable the plaintiff.
3. Set up a time to meet with the creditor at the courthouse in the county in which it was filed.
4. Pay them at the same time they go to the clerk of courts to file the "Satisfaction Piece".
By following these simple steps insures that your lien will show as satisfied anywhere from 30-90 days after it is filed.

Andy Williams
President
Abacus Regional Mortgage
NMLS # 118317
(484) 695-5972

Saturday, September 6, 2014

Ask the "Mortgage Man": COULD THIS BE THE TURNING POINT IN CREDIT SCORING...

Ask the "Mortgage Man": COULD THIS BE THE TURNING POINT IN CREDIT SCORING...: FICO scores will be rescored as of the fall of 2014.  For a long time, unpaid collection accounts have been the thorn in the sides of many b...

COULD THIS BE THE TURNING POINT IN CREDIT SCORING?

FICO scores will be rescored as of the fall of 2014.  For a long time, unpaid collection accounts have been the thorn in the sides of many borrowers looking to purchase their first home.  They have unknown unpaid bills appearing on their credit report causing their scores to plummet.  Many of these are final utility bills that have never been forwarded to the borrower's new address, and more are from hospital bills that were never paid by their medical insurance carriers. Some collection accounts are called charge-offs, because they may have had a car loan or a revolving charge card that went unpaid for a long period of time. After this period of non payment, the creditor places the account in an inactive status, and they write the debt off their books as being "unable to be collected".
As of this fall, the scoring agencies are revamping their scoring models, and changing the way that borrowers will be assessed.

Medical collection accounts will  not count against a person's credit score.  For years, whenever mortgage underwriters saw medical collection accounts on a person's credit report, they overlooked them in determining a borrower's willingness to pay bills.  When underwriters had the ability to overlook these, regardless of their impact on a borrower's credit scores, loans continued to get approved, and subsequently many buyers purchased homes.  Since the real estate market contraction in 2008, many lenders haven't had the ability to approve these types of buyers. This is due to the fact that these same underwriters who were approving borrowers manually, who had decent credit but outstanding medical bills, were unable to approve them with a lower credit score.  As soon as a medical collection appeared on a report, the credit score would drop anywhere between 50-125 points, depending on the number of bills and good credit references appearing on a person's overall credit report.  For instance, if a buyer has 12 references, all good, with low balances on their credit cards, but one medical collection account suddenly appears on their report, I've seen scores drop from 725 to 650 and lower. Needless to say, this inability to overlook these accounts took many potential buyers out of the market. From this point forward, any medical bills appearing on the credit reports will not affect a borrower's credit score at all.

Up until now, paying off other types of collection accounts have had no impact on a person's credit score.  I have been heavily involved in helping people rehab their credit in the hopes of turning them into future home buyers.  I've seen people improve their scores very rapidly, with the help of paying down debt, disputing late payments, etc. The frustrating part has always been that paying off collection accounts, and charge-offs haven't had a positive affect on their credit scores.  Even though the potential buyers were doing the right thing, doing so didn't benefit them in any way.  With the latest changes to the credit scoring algorithms, paying off collection accounts and charge-offs will boost their scores by as much as 50 points.  This affirms to a borrower that by doing the right thing they will benefit, and eventually realize the dream of becoming  homeowners.

Andy Williams
President
Abacus Regional Mortgage
NMLS 118317
(484) 695-5972

Monday, May 19, 2014

My most challenging scenario has been matched. I was recently asked if I can finance a Mobile Home that sits on piers.  First of all, most conventional lenders won't finance mobile homes, whether they are on a permanent foundation, or they are situated in a mobile home park.  Given that this home is also resting on piers with the original axles and wheels underneath, makes this a nightmare to finance.  When the question was posed, I told the agent that only a very small local lender would consider financing such a property.  I gave a few names as suggestions based on the proximity of the subject property in relation to these lenders.  When I saw the agent last week, during my routine weekly visit,  lo and behold he told me that he tried all of my suggested banks, and Mauch Chunk Trust has agreed to finance this property.  If you have a mobile home, or a house that sits on piers located in Carbon, Monroe, or Northern Lehigh Counties, Mauch Chunk Trust will finance it for you.

Any questions, please call me at 484-6985-5972.

Andy Williams
President
Abacus Regional Mortgage
NMLS # 118317

Saturday, February 8, 2014

Ask the "Mortgage Man": Effective Financing for Foreclosures with NO PMI i...

Ask the "Mortgage Man": Effective Financing for Foreclosures with NO PMI i...: Do you ever see a property cheap enough to buy, but needs thousands of dollars in minor cosmetic repairs?  You don't have much money for...

Effective Financing for Foreclosures with NO PMI insurance!

Do you ever see a property cheap enough to buy, but needs thousands of dollars in minor cosmetic repairs?  You don't have much money for a down payment because you want to save some of your money to fix up the home.  Usually an FHA loan is the best way to finance a property so that you can keep your down payment to a minimum. FHA requires certain repairs and defects to be completed prior to a new buyer taking ownership of a property.  Perhaps it is a bank-owned property who won't allow you to make any repairs or alterations to the property prior to taking ownership.  A simple solution would be an FHA 203K loan.  This product allows a buyer to finance the required repairs into the mortgage, with all of the work being done after the closing.
Lately, more and more people are upset about FHA's version of PMI insurance.  It is called Risk Premium.  It is the most expensive monthly PMI insurance on all types of mortgages.  The cost is anywhere between 125% to 250% higher than PMI insurance on conventional mortgages.  We offer conventional loans with as little as 5% down with NO PMI insurance.  Since most conventional mortgage underwriters normally don't call for cosmetic repairs to be completed prior to closing, this is a better alternative with properties that don't need major structural repairs.  So if you don't want PMI insurance on your loan, and wish to do as little as 5% down payment, this is a better alternative for many buyers.

Andy Williams
NMLS #118317
President
Abacus Regional Mortgage
NMLS # 113984
(484) 695 -5972
www.abacusmort.com