Taking over or assuming an existing mortgage

Back when I began to practice law in the 1970s it was quite common for buyers to assume an existing mortgage rather than apply for a new one.  Believe it or not, there are still some loan programs that allow a buyer to still do that.

This article from the Times, Taking Over a Seller’s Loan, addresses the possibility of taking over an existing mortgage in limited cases, primarily with the FHA or VA has insured the loan or it’s an adjustable rate mortgage.

Homeowners with a mortgage insured by the Federal Housing Administration or the Department of Veterans Affairs should consider using their loan terms as a marketing tool when it comes time to sell.

Mortgage loans from both government agencies include a little-known feature known as assumability. In other words, the buyer of a home financed with an existing F.H.A. or V.A. loan may be able to take over, or assume, the seller’s loan, under the same terms, rather than take out a new mortgage.

“You could now have a seller saying, ‘I have a great house to sell you and a great mortgage to go with it, which is better than my neighbor, who only has a great house,’ ” said Marc Israel, an executive vice president of Kensington Vanguard National Land Services and a real estate lawyer. “It’s a very clever idea.”

So what’s the catch? In a rising market, the buyer needs more cash to put down.

When a house sold back in the 70s for $28,000 and had a $25,000 mortgage, the need for cash was $3,000.  But when prices run up by the 10s of thousands of dollars, well, you get my point.

Read the full article.

For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us. We can help. Located in Fairfield, NJ, we are the title insurance agent that does it all for you.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow AT vested.com

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Big jump in VA mortgages reported

Applications for VA mortgages jumped 50% according to a story in the New York Times.

MORTGAGES guaranteed by the Department of Veterans Affairs surged by 50 percent in the fiscal year ended Sept. 30, as tighter credit standards on conventional financing made these programs all the more attractive to current and former military members.

VA mortgages are available to former and current members of the military.  My parents obtained one when they bought their home in 1960.  The attractiveness of the VA loan program is due to low rates guaranteed by the US government.

Borrowers also benefit now that rates have dropped.

Borrowers who already have a V.A.-backed mortgage can get an interest-rate reduction relatively easily. The department’s streamlined refinance program doesn’t require these borrowers to “re-prove” that they qualify, said Nathan Long, the chief executive of Veterans United Home Loans, an online broker of V.A. loans.

Information about VA loans is readily available on the Internet.  Read the full story here.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow AT vested.com

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VA Mortgages - the borrower's friend

title insurance refinance new jersey closing in our office or your home

My folks bought their first home with a VA mortgage, yet we haven't heard too much about them.  Here's an article from Bankrate.com.

Shoved aside by the hot mortgage products of recent years, Veterans Affairs mortgage loans are making a comeback and are a viable financing alternative for veterans looking to secure an attractive fixed-rate loan with little or no money down.

Veteran's deserve a break.  This article will provide more information and some good links.
Read more here.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow AT vested.com

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F.H.A. promises underwater homeowners some oxygen

The New York Times reports on underwater properties. As we’ve previously written, these underwater properties are not burdened by spring storms but by depressed property values. In other words, the property is now worth less than the homeower’s mortgage.

“STRUGGLING homeowners who owe more on their mortgages than their properties are worth have had few options to restructure their loans, but that may soon be changing for a few of them.

“Six months after the Federal Housing Administration announced an $11 billion refinancing initiative for these “underwater” borrowers, nearly two dozen lenders have agreed to take part in a new loan modification program.“

Unfortunately, Fannie Mae and Freddie Mac will not participate.

“The F.H.A. program — called Short Refi — requires major concessions from lenders, which must agree to write off at least 10 percent of the principal balance, and from investors, who, if they own the mortgage, must also agree to the deal.“

How does a homeowner qualify?

To qualify, homeowners must be current on their monthly mortgage payments and not already have an F.H.A. loan.

Loan to value cannot exceed “97.75 percent of the current value of the property; refinanced loans for homeowners whose properties carry second liens cannot exceed 15 percent of the property value.”

Wells Fargo and Ally Financial, formerly known as G.M.A.C., have created test programs for the new F.H.A. program. Bank of America, Citibank and JPMorgan Chase are not participating in the program because Fannie Mae and Freddie Mac are not.

“HUD estimated that 500,000 to 1.5 million borrowers could be eligible for the program.“

But the program may be short-lived as the House has voted to repeal the program. But good news may be out there.

“One mortgage expert, John DiIorio, the owner of 1st Alliance Lending, said that big banks were taking part behind the scenes, by referring homeowners to third-party lenders that could restructure their mortgages. He added that 1st Alliance had “several hundred F.H.A. Short Refi” loans in the pipeline.“

“But he said lenders and investors had agreed to reduce principal for only half of the loans he had worked on.”

Underwater loans have been the bane of homeowners throughout New Jersey. Maybe this program will give them some relief.

Read the full article More Loan-Modification Options for the ‘Underwater’.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Title Inc.

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 201-656-4506

E-mail vti@vested.com - www.vested.com

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