Mortgage Loan Outlet

In a recent article, the chief economist for LendingTree, Cameron Findlay stated that borrowers need to have a few borrowing qualifications met to get the lowest mortgage rates.  First, you’ll need a FICO credit score of 720 or higher, a loan-comparison website. 

To avoid surprises, you should obtain your credit score before you apply for a mortgage loan, says Nancy Flint-Budde, a financial planner in Salem, N.Y. Your credit score is based on information in the credit reports compiled by the three main credit bureaus: TransUnion, Equifax and Experian. You can order a free copy of all three of your credit reports once a year at www.annualcreditreport.com. You’ll have to pay extra for your credit score.  

Once you have received your credit reports, check them for errors that could hurt your score. If your reports show late payments make sure the info is accurately reported.  The only way to repair the damage is by showing mortgage lenders that you can prove it was a mistake or “you must have change your ways”, says Craig Watts, spokesman for Fair Isaac, who developed the FICO score. That will take time, because you need to demonstrate a pattern of on-time payments.  However, if your credit reports show large credit card balances, you can raise your score quickly by paying them off, Watts says. Your “credit utilization” ratio, which reflects to the amount you’ve borrowed as a percentage of your available credit, accounts for 30% of your credit score. Credit repair solutions are available if you need help getting errors and duplicates removed from your credit report.  Read the complete story by Reporter Sandra Block>

Despite complaints that mortgage lenders and banks are not financing enough of new home mortgages, bankers say there’s plenty of money to borrow if banks agree that you are worthy of credit.  In the case of business clients, that means banks are happy to lend to growing companies that can handle the payments.  The Fed cut interest rates, but how many borrowers are being approved for mortgage loans?  Can borrowers with bad credit refinance into an affordable payment or will they lose their home to foreclosure?

But even where banks are lending to sound businesses, they are tightening standards on new mortgage loan programs. In a distressed economy, they say, and with the example of so many failed mortgages around them, it makes sense to demand more security from borrowers.  In a recent article, Bill Williamson, division president for Bank of the West’s Portland said, “When times were better, we were willing to make some exceptions off our guidelines and policies for well-run, growing companies.” 

IndyMac Federal Bank, FSB (“Indymac Federal”) will implement a new program to systematically modify troubled mortgages. The program is designed to achieve affordable and sustainable mortgage payments for borrowers and increase the value of distressed mortgages by rehabilitating them into performing loans. This in turn will maximize value for the FDIC, as well as improve returns to the creditors of the former IndyMac Bank and to investors in those mortgages. The new loan modification program will help IndyMac Federal improve its mortgage portfolio and servicing by modifying troubled mortgages, where appropriate, into performing mortgages.

What mortgage loans are eligible?

The streamlined loan modifications will be available for most borrowers who have a first mortgage owned or securitized and serviced by IndyMac Federal where the borrower is seriously delinquent or in default. IndyMac Federal also will seek to work with others who are unable to pay their mortgages due to payment resets or changes in the borrowers’ repayment capacities. This streamlined approach applies only to mortgages for the borrower’s primary residence. As with all mortgage loan modifications, borrowers will have to demonstrate their financial hardship by documenting their income.

The goal of this streamlined loan modification program is to achieve improved value for IndyMac Federal by turning troubled loans into performing loans and, thereby, avoiding unnecessary and costly foreclosures. Accomplishing this goal will reduce the costs to the FDIC of the failure of IndyMac Bank and provide improved returns to investors in securitized mortgages.

Some mortgages serviced by IndyMac Federal are subject to additional contractual terms governing loan modifications. While additional steps are necessary to comply with those contracts, IndyMac Federal will work to expedite approvals for modifications to help eligible homeowners keep their homes.

IndyMac Federal will only make modification offers to borrowers where doing so will achieve an improved value for IndyMac Federal or for investors in securitized or whole loans. Modification offers will be provided consistent with agreements governing servicing for loans serviced by IndyMac Federal for others. The modification program does not guarantee a modification offer for IndyMac Federal borrowers.