Swing loans, more appropriately termed "bridge loans", are designed for people who can't afford to carry two mortgages at once. A swing loan, also called a "gap loan," is a short-term loan on a property the borrower is acquiring, allowing the borrower to carry both the mortgage on his existing home that he's selling, as well as the new mortgage on a home he's bought.
With many people in a financial pinch, they're being turned down for bridge loans, and are thus unable to sell their homes. This means that the real estate market suffers.
The US government has bailed out GM, Chrysler, AIG, Lehman Brothers, and countless other companies and industries. How about giving a stimulus to the real estate market by helping potential home buyers get bridge loans?
Or is this another case of politicians talking rather than doing?
From California to North Carolina, the real estate industry needs help!
Tuesday, July 21, 2009
Wednesday, June 17, 2009
New York Mortgage Laws Changed
Following the suit of most other states, New York last year beefed up the state's lending laws in reaction to foreclosures and defaults resulting from the sub prime mortgage mess.
The legislation provides assistance to homeowners at risk, and also tightens regulations on New York mortgage lenders.
The primary focus of the bill is homeowners who are facing foreclosure. One component of the bill requires New York mortgage lenders to send a notice to the borrowers of high cost ("jumbo") home loans, subprime loans and non-traditional loans at least 90 days before the lender starts legal action. The notice would advise the borrowers that they are at risk of foreclosure and that, if they are experiencing financial difficulty, they should consider a financial counselor. Also required with the notice would be a list at least five HUD-approved counselors.
The legislation also provides that a court in a residential foreclosure action schedule an early settlement conference with the borrower and the New York mortgage lender . If the borrower cannot afford an attorney, the court may appoint one at no charge to the borrower.
The legislation also targets those running foreclosure scams. It prohibits consultants from performing any services without a contract, charging fees without completing the service, and taking power of attorney from the homeowner. The legislation also sets forward strict standards for consultant contracts.
Other elements of the legislation are designed to prevent a repeat of the subprime crisis. The legislation sets forth strict underwriting rules for a new class of mortgages called "subprime home loans."
The legislation also provides new underwriting rules for New York mortgage lenders. Under the bill, mortgages cannot have negative amortization or prepayment penalties, lenders cannot "flip" loans," mortgage lenders cannot charge for services not actually rendered, lenders must disclose the exact amount they will receive from any source, lenders must require the escrow of taxes and insurance for at least one year, lenders must disclose (if known) the amount of initial taxes and insurance, and lenders are prohibited from using "teaser" rates with durations under six months.
The legislation tackles the issue of "no doc" mortgages by requiring New York mortgage lenders to make a reasonable good faith determination as to the borrower's ability to repay the loan based upon the borrower's income, employment status, and other financial resources.
The legislation also sets forth standards of duty that lenders must abide by. Further, mortgage lenders and brokers will be required to register with the state Banking Department. Additionally, the bill criminalizes acts of mortgage fraud, making it easier for prosecutors to go after rogue lenders and brokers.
With the enactment of this legislation, New York brokers lenders North Carolina mortgage lenders and lenders from dozens of other states in conforming with legislation to rid the industry of rogue players.
The legislation provides assistance to homeowners at risk, and also tightens regulations on New York mortgage lenders.
The primary focus of the bill is homeowners who are facing foreclosure. One component of the bill requires New York mortgage lenders to send a notice to the borrowers of high cost ("jumbo") home loans, subprime loans and non-traditional loans at least 90 days before the lender starts legal action. The notice would advise the borrowers that they are at risk of foreclosure and that, if they are experiencing financial difficulty, they should consider a financial counselor. Also required with the notice would be a list at least five HUD-approved counselors.
The legislation also provides that a court in a residential foreclosure action schedule an early settlement conference with the borrower and the New York mortgage lender . If the borrower cannot afford an attorney, the court may appoint one at no charge to the borrower.
The legislation also targets those running foreclosure scams. It prohibits consultants from performing any services without a contract, charging fees without completing the service, and taking power of attorney from the homeowner. The legislation also sets forward strict standards for consultant contracts.
Other elements of the legislation are designed to prevent a repeat of the subprime crisis. The legislation sets forth strict underwriting rules for a new class of mortgages called "subprime home loans."
The legislation also provides new underwriting rules for New York mortgage lenders. Under the bill, mortgages cannot have negative amortization or prepayment penalties, lenders cannot "flip" loans," mortgage lenders cannot charge for services not actually rendered, lenders must disclose the exact amount they will receive from any source, lenders must require the escrow of taxes and insurance for at least one year, lenders must disclose (if known) the amount of initial taxes and insurance, and lenders are prohibited from using "teaser" rates with durations under six months.
The legislation tackles the issue of "no doc" mortgages by requiring New York mortgage lenders to make a reasonable good faith determination as to the borrower's ability to repay the loan based upon the borrower's income, employment status, and other financial resources.
The legislation also sets forth standards of duty that lenders must abide by. Further, mortgage lenders and brokers will be required to register with the state Banking Department. Additionally, the bill criminalizes acts of mortgage fraud, making it easier for prosecutors to go after rogue lenders and brokers.
With the enactment of this legislation, New York brokers lenders North Carolina mortgage lenders and lenders from dozens of other states in conforming with legislation to rid the industry of rogue players.
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