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Selling Your Home Alone

Selling Your Home Alone

Foreclosure Listings Canada Review

Foreclosure Listings Canada Review

Articles

Calculating Depreciation

First of all, depreciation is mandatory. You must accept and claim depreciation deductions if your property qualifies for depreciation . You cannot elect out of it. Consequently, real estate investors cannot file 1040EZ short forms. You may wonder why someone would forego depreciation deductions there are investors with sufficient deductions elsewhere and don't need any more deductions. Moreover, depreciation tends to be considered passive activity losses so they cannot be easily deducted...

Eliminating Closing Costs With Seller Subsidy

A final method for lowering closing costs is to negotiate for the seller to pay them. Unfortunately, many home buyers, sellers and first-time real estate agents are also sometimes unaware of this option. Moreover, seller-paid closing costs are often tax-deductible for the buyer that's correct , while reducing the capital gains calculation for the seller. This is often called a seller subsidy or seller closing contribution. Either way, it's additional funds working in the buyer's favor. The...

Dollar Roll Financing in the TBA Market

TBA trading gave rise to the dollar roll as a mechanism for dealers to borrow pass-throughs they had sold short. In fact, a dollar roll is a contract to buy an amount of TBA pass-throughs for a close delivery date and sell the same amount of the same pass-throughs back for a more distant delivery date. Similar to a Treasury repo trade, the difference in buy-sell prices the drop implies a cost-of-carry or financing rate, given a prepayment assumption. This expected financing rate, then, is...

Risks Associated With Mortgages And

Psa And Cpr Mortgage

Holders of fixed income investments ordinarily deal with interest-rate risk, or the risk that changes in the level of market interest rates will cause fluctuations in the market value of such investments. Under most circumstances, interest-rate risk can be hedged through either the cash or derivative markets. Mortgages and associated MBS, however, have additional risks associated with them that are unique to the products and require additional analysis. In the following discussion for the sake...

Statement Of Calvin Bradford

The wide-scale use of credit scoring represents a significant efficiency in the competitive world of mortgage finance. Both the Federal Reserve, by its regulations, and lenders, who use credit scoring, refer to it as an objective process as opposed to judgmental systems. The largest purveyor of credit scores, Fair, Isaac and Company, Inc., has continually maintained that its scores could not be discriminatory because they do not contain race as an explicit...

External Credit Enhancements

External credit enhancements come in the form of third-party guarantees that provide for first-loss protection against losses up to a specified amount. Historically, the most common forms of external credit enhancements have been 1 a letter of The author is grateful to Bill Berliner and Jonathan Lieber of Countrywide Securities Brian Grow, Ray Morel, and Weili Chen of Standard amp Poor's and Patrick Fitzsimonds of UBS for their helpful comments. credit, 2 bond insurance, and 3 pool insurance. A...

What Is a Subprime Mortgage and Who Is a Subprime Borrower

National Distribution Fico Scores

How Do Regulators Characterize Subprime Borrowers By providing loans to borrowers who do not meet the credit standards for borrowers in the prime market, subprime lending can and does serve a critical role in the nation's economy. These borrowers may have blemishes in their credit record, insufficient credit history or non-traditional credit sources. Through the subprime market, they can buy a new home, improve their existing home, or refinance their mortgage to increase their cash on hand....

Analyzing Grading Credit History

Most conforming and many non-conforming lenders today do not perform the detailed analysis of the credit report that they did during the 1990s. Mortgage lenders are more frequently relying on the consumer credit scores, although some review of the credit details are still performed. The future trend, as the mortgage industry becomes even more automated, will be an even greater reliance on credit scores. Nevertheless, credit scores are derived from the applicant's recorded credit history. This...

Internal Credit Enhancements

Internal credit enhancements come in more complicated forms than external credit enhancements and may alter the cash-flow characteristics of the loans even in the absence of default. Credit enhancement levels i.e., the amount of subordination for each form of enhancement used within a deal are determined by the rating agencies from which the issuer seeks a rating for the tranches. This is referred to as sizing the transaction and is based on the rating agencies' expectations for the performance...

The tilt and cash constraints

The discussion of mortgage demand presented in Chapter 2 and Chapter 3 briefly noted the importance of the so called tilt, that is the tilting of the real value of mortgage payments towards the early years of the debt. The presence of the tilt meant that borrowers might experience cash flow problems, and a case was made for using the nominal, rather than the real mortgage interest rate when estimating mortgage demand equations. The tilt is likely to be particularly problematic at times of high...

To the Bottom Subprime Loans

Sub Prime Mortgage Default Rate

At the opposite extreme from prime loans are subprime ones, which are given to borrowers with very poor credit histories and low FICO scores, typically below 620 to 660, depending on whose definition you want to use the average FICO score for securitized subprime loans was 617 as of January 2009 . Such borrowers are generally poor, aren 't well educated, have spotty employment histories, and have frequently been late or defaulted on debts in short, precisely the people a lender should be very...

Statement Of William N Lund

Maine Office of Consumer Credit Regulation As a regulator enforcing Maine's credit reporting laws, I have tried to learn as much as I can about credit scoring. The ingenuity of the scoring models and the complexity of the applied mathematics are very impressive, and I have no doubt that use of such scores permits creditors to make fast decisions on consumers' applications. However, from the consumer's perspective, I harbor great concerns about the exponential growth in the use of such scores,...

Will my credit score fall if I shop many loan providers

Credit inquiries impact credit scores negatively because statistical studies show that multiple inquiries are associated with high risk of default. Distressed borrowers often contact many lenders hoping to find one who will approve them. On the other hand, multi- many delinquencies in past two years balance below 75 of line on all cards three new cards acquired in last month Table 2-1. Best and worst of credit card usage Table 2-1. Best and worst of credit card usage ple inquiries can also...

Can I improve my credit score by paying off delinquent credit cards

Most everyone understands that if you don't pay your bills on time, your credit score suffers. There is a com mon misperception, however, that if you pay off these accounts, all will be forgiven since the lender has been paid, the credit score will return to what it was before the delinquency. But it doesn't work that way. Delinquencies reduce your credit score because the credit-scoring genie views delinquent accounts as evidence of a weak commitment toward meeting your obligations. The...