Bank Of Americas Campaign To Rid Bad Mortgages

Bank of America Gets Serious About Bad Mortgage Clean Up

The announcement of a veteran mortgage expert to head the Legacy Asset Servicing unit to take care of bad mortgages and foreclosures has lent strength to Bank of America’s ongoing battle in this area. Terry Laughlin, who amply demonstrated his expertise in his earlier stint with OneWest Bank, will head this new division and hopefully find more success in keeping the bank’s subprime mortgages within control.

Ever since it acquired Countrywide Financial Corp. in 2008, Bank of America has been hard pressed to contain the damages the new company brought into the fold in the form of bad mortgages. Already, BofA has invested billions in settling claims in this respect. Recent months witnessed a 50 million dollar spending towards the legal costs for Angelo R Mozilo, erstwhile Chairman and CEO of Countrywide.

Needless to say, investors have been apprehensive about how these costs will impact the bottom line of BofA. Many fear that as more bills continue to pile up in the coming months the bank may start to show some cracks.

Statistics show that there is good reason for such fears. In September 2010, Wells Fargo reports showed that upwards of 13% of the mortgages attributable to Countrywide payments were either late or foreclosure proceedings had already been initiated on them. BofA has also failed to make the best use of loan modifications under the Making Homes Affordable program introduced by Obama to shore up housing.
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The Three Basic Mortgage Options for Home Buyers

There are three basic types of house mortgage loans offered by lenders. Understanding these basic mortgage types will help you choose the best option for financing your purchase.

Fixed interest mortgage is the traditional mortgage loan in which the loan is amortized for the entire loan period using a constant pre-decided interest rate. You have to pay equal monthly installments for the loan period. For the first few years, the interest payments are front-loaded and only a small fraction of the principal is paid from these payments. [Read more…]

Keep This in Mind before You Strike a Real Estate Deal

Buying a house requires serious thought and planning. It is a major investment and it could significantly stretch your finance and affect your lifestyle. That is why striking the right deal is critical. Here are some important aspects you must consider before you come to your decision.

Make a Commitment

Firstly, make sure you are likely to live in the same area for at least a period of 5 years if you intend to buy a house there. Buying and selling are costly affairs and the housing market is volatile, with prices changing frequently. As with any investment, it is wise to consider a decent lock-in period so that you can get optimum returns. By buying and selling a house too often, you would end up paying a huge amount as transaction costs, including brokerage, mortgage closing, processing a new mortgage etc.

Maintain Good Credit History

A good credit record will help you get attractive deals on mortgages and keep you in a strong bargaining position when you are negotiating your loan terms and even the house price. When shopping for the best mortgage, look for lenders who are willing to offer lower down payments. If your past record is good, you may even get a loan with a down payment of just 3% of the purchase price. Pre-approval is another good way to strengthen your bargaining position and make the process of buying the house faster.

Avoid a Deal that Puts Your Finances in Severe Stress

Look at houses that have affordable price tags. There are many online calculators that can help you assess the ideal investment amount for you based on your income and current liabilities. Get a professional to tell you whether the house you like is worth the price quoted by the seller. He can also help you make the right bid.

Understand the Trend

Review the recent sales in the area and understand the prevailing trend and pricing before you make your bid. A look at the previous three month period sales in that location should usually give you a good idea of what a competitive offer would be for a particular property. Start with about 5% lower than the recent sale prices for comparable properties.

With some planning and research on recent sales, and understanding your financial situation, you can find the right house at the best possible price.

Learn About Jumbo Mortgages

There is a term in the world of mortgages that more and more people are becoming familiar with. That term is “Jumbo Mortgages,” and is exactly as the name implies. These are mortgages that were originally intended for luxury homes and estates much like the typical family couldn’t afford, however with the boom of the real estate industry in the mid 2000’s giving way to higher prices for homes, more and more people needed to start using these types of mortgages to be able to buy homes. [Read more…]