In an effort to end the foreclosure crisis, the Obama administration has been trying to keep defaulting owners in their homes. Now it will take a new approach: paying some of them to leave.

This latest program, which will allow owners to sell for less than they owe and will give them a little cash to speed them on their way, is one of the administration’s most aggressive attempts to grapple with a problem that has defied solutions.

More than five million households are behind on their mortgages and risk foreclosure. The government’s $75 billion mortgage modification plan has helped only a small slice of them. Consumer advocates, economists and even some banking industry representatives say much more needs to be done.

Full story is available on The New York Times

Before you throw up your hands and walk away, here are some things to consider if you are underwater — owing more on your place than it is worth.

First, figure out if you’ll ever break even. If you love your neighborhood and the house is worth 10% less than you paid for it, remaining patient is likely to pay off.

But be warned that it could be decades before some housing prices are back to their heyday levels.

Full story is available on Freep.com

With a record number of homes being foreclosed all across the country, you may have investigated purchasing one. But since most of them need some fixing up, you may have thought against it, thinking the savings on the house would be more than eaten up in the cost of fixing it up. Or perhaps you want to keep your home, but it requires a lot of repair. The Federal Housing Administration (FHA) offers the FHA 203K Mortgage that can be used for both of these purposes. This type of mortgage not only prevents neighborhoods from becoming blighted by a large number of foreclosures, it can also be used to help save the environment by altering homes so that they can become more energy efficient. Some of the green additions you can make include windows, furnaces, appliances, floors, landscaping, solar panels and insulation. Certain repairs can be made by the borrowers themselves and not a contractor.Although not a loan from the government, a FHA loan is guaranteed by the government. FHA 203K Mortgages have existed for decades, and have regained popularity in the wake of the sub-prime loan meltdown. Because some banks and mortgagors are struggling to survive due to unprecedented loan defaults, conventional loans are now requiring a 20 to 30 percent down payment. First-time home buyers are hard pressed to come up with this large amount of money. But, a FHA 203K Mortgage only requires 3.5 percent down. These loans also offer more favorable terms and simpler qualification than do conventional loans.

Full story is available on HUD Housing

Gary Onks answered more than 30 questions about what reverse mortgages are and how they work during Tuesday’s Money Talk$.

He is the regional branch manager of Reverse Mortgage USA in Spotsylvania County. Reverse mortgages are loans for people over the age of 62 that let them tap the equity in their homes without having to repay the money until they, or their estate, sell the house.

Below are some of the highlights from the Web chat. A full transcript is available at fredericksburg .com/blogs/whatsin store.

From “ck” in Spotsylvania: I currently have a reverse mortgage, but the value of my house has fallen below the balance of the mortgage. If I sell the house as a short sale, am I able to purchase another home and get a new reverse mortgage without having to pay the bank the difference of the short sale?

Full story is available on Fredericksburg

Mortgage rates continue to be low, which should help prospective home buyers to afford a home, Freddie Mac released the results of its Primary Mortgage Market Survey® (PMMS®) on a March 4, 2010. The 30 year fixed rate mortgage (FRM) averaged 4.97 percent, down from the previous week.

According to information from Freddie Mac, the average interest rate on the 30 year fixed rate mortgage (FRM) average 4.97 percent with an average 0.7 point for the week ending March 4, 2010. During this time period in 2009 the 30 year FRM averaged 5.15 percent.

Home buying is now more affordable because the mortgage interest rates are below 5 percent, according to a statement by Frank Nothaft, Freddie Mac vice president and chief economist. Nothaft stated “ “In fact, monthly principal and interest mortgage payments for a typical family buying a median-priced home of $163,800 were just $709 in January, the lowest amount since February 1998, according to the National Association of Realtors®. For first-time home buyers, the fourth quarter of 2009 was the third most affordable quarter since 1981 behind the first and second quarter of 2009.”

Full story is available on Huliq News

So you’re interested in taking advantage of the 2009 home buyer tax credit, but not quite sure of how to go about beginning or working your way through the mortgage process. Let’s take a look at what you need to know:

Complete the Mortgage Loan Application – when you’ve found the home you love, get in touch with a lender of your choice and let them know you’d like to start the mortgage process.

Financial Documentation – in order to complete your application, the lender will need documentation of your employment, assets, and debts, as well as the purchase price of the home. You will likely need to provide your pay stubs along with a copy of your tax returns for the last two years.

Full story is available on Home Space

LRT USA Inc. today announced a new tech tool “Underwater Home Mortgage Evaluator”. This new online tool determines if a home is “underwater” and by how much based on the outstanding mortgage balance(s) and most lenders new risk value process. Today, over 11 million home mortgages are underwater at an average $69,700 per property. That means average homeowners owe $69,700 more than their home could sell for.

“U.S. Taxpayers funded the bail out of major banks, and are angry, scared, and want straight answers and new tools they can use to economically “fix” mortgage problems. Until now there was no universally trusted source to provide them. We responded to homeowner requests and developed ‘The Underwater Home Mortgage Evaluator’, as the first step in the mortgage resolution process, as an easy to use “Do-It-Yourself” decisioning tool”. This new tool Is linked to several new complimentary technologies that enable homeowners to perform DIY loan modifications, short sales, or learn how to get cash and walk away, said Debi Simmons of LRT USA Inc.

Full story is available on i-News Wire

More than 11.3 million homeowners — nearly one-fourth of all Americans with a mortgage — owe more on their loan than their home is now worth, according to a recent report released by FirstAmerican CoreLogic.

More than 10 percent of people with mortgages owe 25 percent more than their home is worth.

The number of underwater mortgages increased by about 620,000 from the third quarter, the firm said. An additional 2.3 million mortgages had less than 5 percent equity in their home, which could be wiped out if home prices fall further.

Once the mortgage is underwater, owners cannot easily sell their home or refinance their loan.

Full story is available on Seattle Times

Mortgage rates generally declined this week, with the average rate on 30-year fixed-rate mortgages retreating below 5%, according to Freddie Mac’s weekly survey of mortgage rates.

Demand for new and used homes strengthened last year, but has dropped in recent months because of cold weather and continuing joblessness. New-home sales unexpectedly hit a record low in January, the Commerce Department said last week, while existing-home sales slumped.

Treasury yields were generally flat in the past week; mortgage rates tend to follow the yields.

Full story is available on Wall Street Journal