Do you fit any of these descriptions:

– You came through the housing bust and recession far more debt-averse than you were before.
– You’ve been reluctant to consider selling your house because you don’t believe you’ll get what it’s really worth.
– Buying a new home is out of the question, even with today’s low interest rates, because it’s so difficult to qualify for a mortgage.
– You’ve gradually come to the conclusion that it’s smarter to improve the house you already own — spend some money on making it more comfortable, more up to date — and just stay put for a while. [more]

Could gloomy popular assumptions about how tough it is to get approved for a
mortgage be scaring away large numbers of people who are qualified from even
applying?

Could the same worries — I can’t come up with the big down payment I
need, my credit scores are too low, my bank account has almost none of
the “reserves” lenders want to see — put a needless damper on a housing
recovery in the new year?

You bet. Lenders and economists will tell you flat out: The lack of accurate
information about the availability of loan programs that are designed to
address special needs is discouraging far too many consumers from even
considering an application, much less shopping around. [more]

When you apply for a mortgage to buy a house, how often does the lender ask detailed questions about monthly energy costs or tell the appraiser to factor in the energy-efficiency features of the house when coming up with a value?

Hardly ever. That’s because the big three mortgage players — Fannie Mae, Freddie Mac and the Federal Housing Administration, who together account for more than 90 percent of all loan volume — typically don’t consider energy costs in underwriting. Yet utility bills can be larger annual cash drains than property taxes or insurance — key items in standard underwriting — and can seriously affect a family’s ability to afford a house. [more]

Here’s some good news for homeowners who’ve gone green and installed energy-saving features but haven’t been sure whether appraisers will credit them with higher valuations: Thanks to a new industry-issued appraisal addendum, the odds have improved that they’ll get the fairer market value they’re due.

The Appraisal Institute, the country’s largest and most influential association in its field, published the long-awaited addendum Sept. 29. It’s designed to be attached to any standard appraisal report covering a property with significant green features. Owners, sellers, buyers, refinancers and real estate agents don’t have to wait for an appraiser to use it. They can download it at no cost and ask that it be made part of the appraisal submitted to the lender. [more]

When you spent $2,000 to $3,000 to buy title insurance and closing services on your home purchase or refinance, did you really know where your money was going?

Did you shop for competing prices? Or did you end up using the title, escrow agency or lawyer your real estate agent or loan officer recommended?

Consumers’ answers to these questions involve billions of dollars a year — $10 billion in title insurance premiums alone in 2010. Yet buyers and refinancers often don’t shop for the most expensive item on their settlement sheets. They don’t know how little of their premiums are actually paying for an insurance policy, and they’re in the dark about who ends up with their money. These are not idle opinions — they’re among the findings by the Government Accountability Office in a critical study of the industry and its practices. [more]

Picture a mortgage program that seems to defy many of the
lessons of the housing bust:

– 91 percent of its borrowers make zero down payments.
– Loan amounts go well into the jumbo range — to $1 million
and sometimes above, even with little or nothing down.
– Credit standards are flexible and generous. Underwriting
rules encourage loan officers to look for ways to approve
applications rather than to reject them.

– Mortgage originations are up — almost triple what they were
just three years ago and are on track this year to exceed 2010′s
volume. The rest of the loan industry, by contrast, is down by
anywhere from 25 percent to 30 percent. [more]

If you give millions of seriously underwater homeowners a new equity position in their properties by reducing their principal mortgage debt, will they keep paying on their loans and avoid foreclosure?

Call it a pipe dream or a significant model for other lenders and investors, but one company said it has found an important combination: Modify underwater borrowers’ loans so that their payments are reduced to a manageable amount, cut their principal debt over time but make the deal totally dependent on their scrupulous on-time monthly payments of the new amount plus sharing of a portion of any future profits they make on the house sale. [more]

Are homebuyers walking away in droves from the contracts they’ve signed? Or are they essentially
fouling out of the game, unable to close deals because of financing and credit issues?

Whatever the answer, this much appears to be certain: Exceptionally large numbers of signed real estate
contracts fell apart last month, failing to reach settlement. According to the National Association of
Realtors, one of every six real estate agents polled in June reported having signed contracts canceled
before closing — up from just one in 25 the month before. The typical monthly cancellations rate over
the course of the past 16 months has ranged in a narrow band between 8 percent and 10 percent.

What’s going on here? Lawrence Yun, the chief economist of NAR, said the sudden spike is surprising
and worrisome, and that there are no hard statistics available on the causes. Comments

How big a deal is the upcoming cutback in mortgage limits for Fannie Mae, Freddie Mac and the Federal
Housing Administration? Will buyers and sellers who depend on jumbo-sized loans find themselves in a
financing squeeze after Oct. 1, when the limits plunge in key markets around the country?
Housing and realty lobbies are pushing hard on Capitol Hill for a continuation of the $729,750 high-cost
area maximum, but one industry is delighted by the prospect and is gearing up to fill the gap.
From small community banks to megabanks, the message is the same: Bring on the switch to lower
limits. [more]

Are medical bill collection accounts buried away inside millions of consumers’ credit files — even bills that were fully paid or settled years ago — functioning as a drag on the housing market?

That might sound far-fetched, yet some credit and mortgage industry experts say negative medical collection records are playing a little-recognized but significant role in depressing otherwise creditworthy loan applicants’ scores. Lower scores, in turn, are disqualifying borrowers from getting mortgages in today’s toughened underwriting climate or forcing them to pay higher interest rates, fees and down payments.

According to a 2008 study by the non-profit Commonwealth Fund, an estimated 28 million Americans were contacted by collection agencies on medical debt issues during a two-year period and 72 million reported difficulties in paying outstanding medical bills. [more]