A Hidden Marketing Tool in Mortgage and Lending

Many homeowners who currently have an FHA or VA mortgage don’t realize what a good marketing tool they have.

These loans can be quickly and easily assumed by a new buyer. The original holder of the mortgage will still have some responsibility for the mortgage, but that seldom causes a problem.


Homeowners who have a mortgage insured by the Department of Veterans Affairs or Federal Housing Administration are often unaware of this feature. The buyers may be able to take over the home owner’s loans under the same terms.

This prevents the buyer from having to take out a new mortgage and may be an incentive that can be used as a marketing tool to sell a home — particularly at a time when mortgage rates are on the rise, The New York Times reports.

“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,'” Marc Israel, an executive vice president of Kensington Vanguard National Land Services and a real estate lawyer was quoted as saying.

The advantage to buyers is that they may be able to snag a lower mortgage rate by assuming the seller’s loan. It also can be cheaper than applying for a new one with fewer settlement fees. An appraisal is not required, but buyers must still prove their creditworthiness.

Q: How will the shutdown affect housing?

A: As the federal government grounds to a halt, the question of how the shutdown will affect the housing market remains at the front of everyone’s mind. The answer: It depends.

“Most economists agree that the short-term effects of the shutdown should be minimal, assuming that the shutdown is short-lived,” it was reported by DS News.

Q: How much will home prices rise within the next year?

A: That projection depends on the information source.

For example, Barclays forecasts U.S. housing prices to rise by 11 percent in 2013 and 7 percent in 2014, based on data through the second quarter.

According to Barclays’ Q3 Regional Housing Update, the company also expects the nationwide distressed property segment to fall from its current 3.8 percent of the market to 2.2 percent by 2017, with the most dramatic distress decline taking place in Florida.

Q: What direction are mortgage rates taking at this point?

A: Freddie Mac recently released the results of its Primary Mortgage Market Survey, showing average fixed mortgage rates fell following the Federal Reserve announcement that it will maintain its bond buying stimulus helping to keep homebuyer affordability elevated.

The average rate on the 30-year fixed mortgage is at its lowest level since the week ending July 25 of this year.

Q: Is it true that dual agency listings are not allowed for short sale properties?

A: The Department of Housing and Urban Development (HUD) has delayed its prohibition of dual agency listings on short sale properties, according to a statement made recently by the National Association of Realtors.

The HUD prohibition had first been outlined in a July letter to mortgage servicers describing new anti-fraud requirements for short sales and deed-in-lieu of foreclosure transactions. The original policy was slated to go into effect Oct. 1, 2013.

Q: Is the number of foreclosed properties dropping?

A: Yes. The performance of mortgages serviced by large national and federal savings banks continues to improve as a result of home retention efforts and home forfeiture actions.

Additionally, strengthening economic conditions and servicing transfers contributed to the improved performance of home mortgages, with 90.6 percent of mortgages considered current and performing at the end of the second quarter. That figure is up slightly at the end of the first quarter and also up from 88.7 percent a year earlier, according to the Office of the Comptroller of the Currency.

Source: Creators.com

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