2010 Sibor Rate

2010 Sibor Rate
Here is a look at the latest December 2010 Sibor Rate.

2010 Sibor Rate is obtained from Monetary Authority of Singapore (MAS).

Here is the update ono 2010 Sibor Rate.

2010 Sibor Rate:

(9 December 2010 Sibor Rate )

3 month sibor = 0.44% p.a.

6 month sibor = 0.56% p.a.

12 month sibor = 0.81% p.a.


2010 Sibor Rate is provided for personal infomration.


Singapore Housing Loan

Citibank Housing Loan

Citibank Housing Loan
In this December 2010 post, we look at Citibank Housing Loan.

Citibank Housing Loan has attractive effective interest rates

Citibank Housing Loan provides interest savings on your home loan with the interest-adjustment feature.

Citibank Housing Loan gives instant access to our dedicated Mortgage Client Care team.

Citibank Housing Loan offers flexibility to switch

Fixed Rate Housing Loan

Fixed Rate Housing Loan

Fixed Rate Housing Loan is provided for info.

This is a fixed rate housing loan for private property in Singapore.

It is the HSBC Fixed Rate housing loan rates.


3 Year Fixed Rate Housing Loan:

Year 1 = 1.99% p.a. (fixed)

Year 2 = 1.99% p.a. (fixed)

Year 3 = 1.99% p.a. (fixed)

Thereafter = 3 month SIBOR + 1.25% p.a.

Terms and conditions apply.

Singapore

HSBC Fixed Rate Home Loan

HSBC Fixed Rate Home Loan
We take a look at HSBC Fixed Rate home loan this October 2010.

This HSBC Fixed Rate Home Loan is subject to change and re-confirmation with bank home loan staff.

Here are the HSBC Fixed Rate Home Loan rates.

HSBC Fixed Rate Home Loan :

2-Year Fixed Rate Package

Year 1 = 1.80% (fixed)
Year 2 = 1.80% (fixed)
Year 3 = 3 month Sibor + 1.25% p.a.
Thereafter = 3 month

Sibor Rate

Sibor Rate
The Sibor Rate for the 3-month Sibor has dropped to the lowest since such Sibor rates were tracked.

Sibor Rate is heading south. Will Sibor rate go even lower?

Sibor Rate is shown below:


3 Month Sibor Rate :


15 Oct 2010 = 0.44% p.a.


Singapore Housing Loan Rates subject to change.

Housing Loan Rate

3M Sibor

3M Sibor
3M Sibor is the 3-month SIBOR rate of Singapore.

We have the latest 3M sibor rate for you today.

3M Sibor Rate:

3-month Singapore Interbank Offered Rate = 0.50 %



Note that other Singapore Housing Loan Rates quotes are subject to change.

Housing Loan Rate

Latest October Sibor

Latest October Sibor
We share the latest October Sibor with you.

Latest October Sibor:

As at 1 October 2010:

3 month Latest October Sibor = 0.50

6 month Latest October Sibor = 0.63

12 month Latest October Sibor = 0.88


Singapore Housing Loan Rates subject to change.
Housing Loan Rate

POSB Home Loan

POSB Home Loan
This POSB Home Loan is obtained from POSB bank in Singapore.

POSB Home Loan is called POSB Home Ideal package.

POSB Home Ideal, the first housing loan pegged to CPF rate, lets you enjoy:

* Transparency on your POSB Home Loan rates1 since CPF rates are known to the public
* Stable interest rates with rates pegged to CPF Ordinary Account rates as the historical trend shows that

September Sibor Rate

September Sibor Rate
We compile the 2010 September Sibor Rate for your personal information.

September Sibor Rate is not meant for investing money in property or for calculating your bank loan payments.

September Sibor Rate :

DATE : 24 Sep 2010

3 month September Sibor Rate = 0.56

6 month September Sibor Rate = 0.63

12 month September Sibor Rate = 0.88


Singapore Housing Loan Rates subject

HDB Loan Eligibility Conditions

HDB Loan Eligibility Conditions
We share the eligibility conditions for HDB Concessionary loan.

HDB provides housing loans at concessionary interest rate to eligible flat buyers, subject to HDB's credit assessment and prevailing mortgage loan criteria.

Since 1 January 2003, flat buyers who are not eligible for an HDB loan will have to take a loan from a bank/financial institution that is

Housing Loan Calculator

Housing Loan Calculator

Using Housing Loan Calculator, we present calculations for a housing loan for a property purchase of $1,000,000 to be paid over 20 years at 3% interest rate per annum throughout.

Here is the detail of Housing Loan Calculator:

Property Price = $1,000,000

Loan Tenure = 20

5% cash downpayment = $50,000
15% CPF downpayment = $150,000
Amount of Loan = $800,000

YEAR |

Fixed Housing Loan Package

Fixed Housing Loan Package
We go over the Fixed Housing Loan Package this February 2011.

How attractive are the 2011 interest rates of the fixed housing loan package? Let us check out DBS Bank Housing Loan Package.

This fixed Housing Loan Package is taken from DBS bank.

DBS Bank Fixed Housing Loan Package:

Promo 3-Year Fixed Housing Loan Package

Year 1 = 1.99 %
Year 2 = 1.99 %
Thereafter =

OCBC Bank Housing Loan

OCBC Bank Housing Loan

OCBC Bank Housing Loan approval for HDB flat in 30 minutes, even on Sundays.

Visit any OCBC Bank branch to enjoy application fofr OCBC housing loan with SingPass. Even on Sundays at any OCBC Bank Sunday banking branches.

Details of OCBC Bank Housing Loan at shown.

Terms and conditions of OCBC Bank Housing Loan:

Apply personally at any OCBC Branch to enjoy

Citibank Housing Loan Package

Citibank Housing Loan Package
We highlight Citibank Housing Loan Package in Singapore. This Citibank bank housing loan package is taken from Citibank bank in Singapore.

Some of the Citibank Housing Loan Package details for year 2010 are shown today.

Citibank Housing Loan Packages:

Home Loan Fees and Rates

Interest Rates of Citibank Housing Loan Package:

Citibank offers a variety of Board

Maybank Housing Loan Promotion

Maybank Housing Loan Promotion
Let us see the Maybank Housing Loan Promotion.

This Maybank Housing Loan Promotion turned up in the Straits Times of 27 August 2010.

Details of Maybank Housing Loan promotion will be presented this August 2010.

Maybank Housing Loan promotion comes during Maybank's 50th Anniversary celebrations.

Maybank Housing Loan promotion is subject to terms and conditions

CIMB Housing Loan Singapore

CIMB Housing Loan Singapore
This is the CIMB Housing Loan Singapore report.

CIMB Housing Loan Singapore is obtained from CIMB bank / banking institution found in Singapore.

CIMB Housing Loan Singapore Details:

Enjoy interest free Sundays for the first year of your CIMB Housing Loan Singapore loan.

Features and Benefits of CIMB Housing Loan Singapore:

Financing all types of completed or

Sibor Rate 2010

Sibor Rate 2010
We present the Sibor Rate 2010 for month of August in Singapore.

Sibor is the Singapore interbank offered rate. It is the interest rate that banks charge one another to lend bank money.

Sibor rate may change in the future.

Here is the Sibor Rate 2010.

The 3-month Sibor Rate 2010 is shown. This is the same 3 month Sibor rate that most banks use to calculate their loan interest

ANZ Bank SIBOR SOR Housing Loan

ANZ Bank SIBOR SOR Housing Loan
In this ANZ Bank SIBOR SOR Housing Loan, home loan owners can choose to pay down their housing loan that is pegged to both SIBOR rates and SOR rates.

Read more in this post:

ANZ Bank offers unique floating rate mortgage

ANZ Bank has launched a new floating rate home loan, believed to be the first of its kind here.

The bank claims it could reduce the anxiety of

Sibor Rates

Sibor Rates
We update you with the latest Sibor Rates in Singapore.

For those who don't know what are sibor rates, here's a short explanation of Sibor rates. Sibor rates are the Singapore interbank offered rates. Sibor rates are the interest rates that banks use to lend money to one another.

Domestic Sibor Rates August 2010:

Sibor Rates as of 20 August 2010:

1 month Sibor Rates = 0.38 % p.a.

HDB Concessionary Interest Rate

HDB Concessionary Interest Rate
The HDB concessionary interest rate is pegged at 0.1 percentage point above the prevailing CPF interest rate. HDB Concessionary Interest Rate is revised every quarterly, in January, April, July and October each year, in line with the revision in the CPF interest rate.

HDB Concessionary Interest Rate:

* Oct 2009 - Dec 2009 : 2.60% p.a.


HDB Concessionary Interest

Sibor Rates

Sibor Rates

Here are the current latest Sibor Rates in Singapore.

Singapore Sibor Rates are provided for information only and not for use to check on your SIBOR linked housing loan calucualtions.

Sibor Rates updates are obtained from Monetary Authority of Singapore (MAS).

The following is the list of Sibor Rates (Singapore).

SIBOR RATES (% per annum):

(from 30 July 2010 to 6 August 2010,

Housing Loan Rates Singapore

Housing Loan Rates Singapore

Here are some figures of housing loan rates Singapore for your information. We received the housing loan rates Singapore from DBS Bank and would like to share the housing loan interest rate with you.

Check out the bank housing loan rates Singapore available in the housing loan market in Singapore.

housing loan rates Singapore :

DBS Bank Sibor Fixed Rate Package

SBI Singapore Housing Loan Rates

SBI Singapore Housing Loan Rates

We share with you the State Bank of India SBI Singapore Housing Loan Rates for those keen to find out more about Singapore housing loan bank rates.

SBI Singapore Housing Loan Rates are shown as indication of rates. You should verify SBI Singapore housing loan rates with bank before use.


SBI Singapore Housing Loan Rates Fixed-Rate Scheme:


• Fixed interest

SIBOR Rates 2010

SIBOR Rates 2010
For those who are curious as to what are SIBOR Rates 2010, this post should help you understand what SIBOR rates 2010 are about.

The "SIBOR" in SIBOR Rates 2010 refers to the Singapore Interbank Offered Rate.

SIBOR is a daily reference rate based on the interest rates at which banks offer to lend unsecured funds to other banks in the Singapore wholesale money market (or

Housing Loan Interest Rate

Housing Loan Interest Rate

Here are some figures of housing loan interest rate for your information. We received the housing loan interest rate from DBS and would like to share the housing loan interest rate with you.

Check out the bank housing loan interest rate available in the housing loan market in Singapore.

Housing Loan Interest Rate:

DBS Bank Sibor Fixed Rate Package Interest Rates:

2010 DBS Bank Housing Loan Rates

2010 DBS Bank Housing Loan Rates
We take a look at DBS Bank Housing Loan Rates this July 2010. The 2010 DBS bank housing loan rates are obtained from Singapore DBS bank.

Here are the 2010 DBS bank housing loan rates for your information.

DBS Bank Housing Loan Rates Interest Rates

Year / Rates for 80% Loan / Rates for 80 to 90% Loan

Year 1

1.99% Fixed

2.49% Fixed

Year 2

2.09% Fixed

2.59%

UOB Singapore Housing Loan Package

UOB Singapore Housing Loan Package

It is the turn to look at UOB Singapore Housing Loan Package this day in July 2010. What is the UOB Singapore housing loan package?

The details of UOB housing loan package is posted below.


UOB Singapore Housing Loan Package :

Loan Tenure | Fixed Rate 1 Year Lock Package

(Loan to Value equal to or less than 80%)


Singapore Housing Loan Package 1st Year=

Singapore Housing Loan Rates

Singapore Housing Loan Rates
We share with you the Singapore Housing Loan Rates of UOB bank Singapore.

These Singapore Housing Loan Rates may change without notice.

Singapore Housing Loan Rates :

UOB Private Home Loan Packages

Fixed Rate 1 Year Lock Package

Loan to Value equal to / less than 80%

LOAN TENURE | Interest Rate % p.a.


1st Year 1.70% p.a. (Fixed)

2nd Year 1.80% p.a.
(2.70%

Singapore Housing Loan Rate

Singapore Housing Loan Rate
We discuss the Singapore Housing Loan Rate of Hong Leong Finance (HLF) today this July 2010.

The information on Singapore Housing Loan Rate is provided for informational purpose only.

Singapore Housing Loan Rate in detail is shown below.


Table of Singapore Housing Loan Rate from HL Finance:

Hong Leong Finance 2-Year Fixed Rate Package


Year 1 = 1.58%

Year 2 =

Housing Loan Rate

Housing Loan Rate
Welcome to Housing Loan Rate blogspot!

At Housing Loan Rate site, we share with you the latest, the best, the cheapest and the lowest housing loan rate available in Singapore.

These Housing Loan Rate / rates that we gather are obtained from banks and financial institutions in Singapore that offer residential housing loans.

By comparing Housing Loan Rate at our site, you

What you should know about your housing loan

When there is an increase in the Prime Lending Rate (PLR), the interest rate on your loan will also go up, and your repayment would be higher. However, in most cases, financial institutions would allow you to pay the fixed amount of monthly repayment (EMI) throughout the loan tenure and would make any adjustment caused by the variation in interest rate by increasing or shortening the loan tenure, as the case maybe. Also, do note that the PLR will soon be replaced by the Base Rate (BR) from July 2010 onwards.

Owning a piece of land, a house or a property is a lifetime dream for every individual. Maslow’s law of hierarchy indicates such a dream as well. Taking a home loan nowadays has become much simpler. Each year the budget regulations seem to lean towards the housing sector and construction sector in terms of generosity!

There are many home loan providers in the market to make your dream come true. However, before you opt to take a home loan, you need to consider certain factors related to the property that you are interested in buying and also understand the features offered by a home loan provider.

Choosing Your Financial Institution

When you shop for a home loan its good to research your financial institution well before opting to go with them. Remember that when you take up a housing loan, you will be dealing with the lending institution you choose on a regular basis for a long period of time.

Therefore, you should also consider factors other than just interest rates. Some of these are:

How professional is the financial institution in dealing with customers?

Does it offer quality service in terms of efficiency and reliability?

What are the available loan packages and which package suits you best?

What are the various charges involved?

Assessing your loan repayment capacity

You should ensure that your monthly loan installment repayment (EMI) should not be more than around 40-50% of your gross monthly household income. If you have savings or fixed deposits, they can be used to support your loan application as financial institutions may take them into account in evaluating your eligibility. Different financial institutions have different criteria in calculating the repayment capacity. In the case of a floating rate loan, you should also note that your loan tenure or (if you so choose) your monthly repayment may increase substantially when interest rates go up.

When there is an increase in the Prime Lending Rate (PLR), the interest rate on your loan will also go up, and your repayment would be higher. However, in most cases, financial institutions would allow you to pay the fixed amount of monthly repayment (EMI) throughout the loan tenure and would make any adjustment caused by the variation in interest rate by increasing or shortening the loan tenure, as the case maybe. Also, do note that the PLR will soon be replaced by the Base Rate (BR) from July 2010 onwards.

Margin of finance

It is assessed on factors such as:

• Type of property
• Location of property
• Age of the borrower
• Income of the borrower

Generally the margin for the borrower (down payment) will be about 15% of the property as assessed by the bank/ lending institution. For mortgage loans the lending institutions will assess the value for the property based on the ‘Distress Sale Vale’ - this is the value of the property in case it is sold on an urgent need basis. This value can be much lower than the market value of the property.

Rights and duties of the borrower and the financial Institution

Both the borrower and the financial institution have certain rights and duties during the course of the loan repayment period. Some of these include:

RIGHTS

Borrower

• Right to have access to all information that would affect your borrowing decision
• Right to be treated professionally, courteously and without prejudice
• Right to be consulted on changes to the terms and conditions of your loan
• Right to have accurate information on a regular basis on your loan account
• Right to enforce legal action in the event of a breach of contract

Financial Institution

• Right to have full relevant disclosure of information on borrower’s credit standing
• Right to correct and truthful information on the borrower
• Right to timely repayment of interest/ installments of the loan
• Right to enforce legal action in the event of default/breach of contract

DUTIES

Borrower

• Duty to read and understand all terms and conditions of the loan
• Duty to observe the terms and conditions of the loan at all times
• Duty to enquire and get clarification on all aspects of the loan to their satisfaction
• Duty to make prompt payment on the fees, charges, interest and installment of the loan

Financial Institution

• Duty to discharge borrowers’ obligations as described in the loan agreement
• Duty to consult borrowers on any changes made to the terms and condition, fees charged and other relevant information
• Duty to attend to all queries made by borrower

Before getting a housing loan take stock of your finances and assess your loan repayment capacity. Then shop for the best offers available. You can also approach a financial counselor for optimum allocation and utilization of your money.

article source: bankbazaar

White House to announce housing aid: sources

The White House plans to announce on Friday that it will require lenders to lower the mortgage payments of some unemployed workers and encourage lenders to eliminate some principal debt of homeowners who owe more than their home is worth, sources familiar with the plan said on Thursday.

The plan comes as President Barack Obama is under increasing political pressure to change his strategy for helping struggling homeowners and stem the tide of rising foreclosures and is the second major housing initiative announced in as many months.

Delinquencies on U.S. mortgages rose to nearly 14 percent in late 2009, led by a sharp increase in seriously overdue home loans held by the most credit-worthy borrowers, U.S. banking regulators said earlier on Thursday.

Obama's $75 billion homeowner assistance program announced last year has been widely criticized as ineffective by both Democrats and Republicans on Capitol Hill.

Representative Jackie Speier, a California Democrat who backs Obama on most issues, told a top administration official responsible for housing policy on Thursday that White House efforts so far have "failed miserably."

The new efforts include at least three and at most six months of temporary assistance for jobless workers and incentives for mortgage servicers to write down part of the principal balance, sources said.

The plan also aims to increase the Federal Housing Administration efforts to keep people in their homes as the cause for delinquencies has shifted from sub-prime borrowers to the unemployed and "underwater" borrowers: people who owe more than their house is worth.

Recognizing the difficulties for so-called loan servicers to modify loans for unemployed workers, the administration's plan aims for lenders to cut payments on existing loans to 31 percent of a borrowers income.

Howard Glaser, a mortgage industry analyst in Washington called the decision to focus on jobless and underwater borrowers a significant and welcome shift in the administration's strategy to stabilize housing market.

"They have recognized that the complexion of the mortgage crisis has changed. This is no longer about risky subprime loans -- its about home value declines that have made default a rational economic choice for homeowners," Glaser said in a note to clients.

It would use up to $14 billion of what remains of the $700 billion bailout to let borrowers refinance up to 115 percent of the value of the homes they live in.

The FHA plan is aimed at getting servicers to write down some or all of the so-called piggyback loans that have been a major sticking point for modifications thus far.

John Courson, chief executive officer of the Mortgage Bankers Association, welcomed the administration's efforts to expand its homeowner assistance.

"As the causes of the ongoing foreclosure crisis have shifted, we need to keep looking for new ways to help delinquent and underwater borrowers," Courson said in a prepared statement.

The principal reduction plan would be administered under the existing Home Affordable Modification Plan and is modeled after a principal reduction plan announced this week by Bank of America.

Under pressure from Massachusetts Attorney General Martha Coakley, Bank of America Corp said on Wednesday it would offer what could be up to $3 billion in loan forgiveness to about 45,000 troubled homeowners.

Bank of America pledged to offer an "earned principal forgiveness" of up to 30 percent for homeowners nationwide who owe more than 120 percent of the value of their home.

Bryan Whalen, a managing director at money manager TCW, which manages more than $115 billion, including mortgage-backed securities, cautioned that this could be aimed more at public opinion than the mortgage market.

"If this program is anything like Bank of America's -- in terms of scale -- I expect the market to not react to it," Whalen said.

"The BofA program involves 45,000 loans -- it doesn't move the needle one bit. The market will take a 'show me' approach to the White House announcement," Whalen said.

The plan comes just a few days after Treasury Secretary Timothy Geithner launched what could be a years-long process of overhauling the government's role in helping Americans buy homes.

Geithner told lawmakers the government should continue to play some role in any new system of housing finance Congress develops, although he said mortgage finance giants Fannie Mae and Freddie Mac should not be nationalized.

"As long as the administration continues to sidestep the larger issues such as job creation and how they intend to deal with Fannie and Freddie, subsequent misadventures (by the government) into the mortgage market will continue to be an exercise in futility," said Representative Darrell Issa of California, one of the hardest hit states.

article source: .reuters

Citigroup CitiMortgage Homeowners Refinance Mortgage For A Lower Interest Rate

Citigroup CitiMortgage is one of the mortgage lenders offering low mortgage interest rates on home loans and refinancing. Homeowners that refinance with Citigroup, or other mortgage lenders offering low mortgage rates that the present time, are getting interest rates on their mortgage for around 5%. Some homeowners have even see rates as low at 4.75%.

Also, homeowners aren’t just refinancing to a lower interest rate. Many homeowners are refinancing to a 30-year fixed rate mortgage and getting a lower monthly mortgage payment as well. Citigroup homeowners concerned with their mortgage payment may want to look into refinancing for a 30-year fixed rate mortgage, if they can afford to do so and it’s in their best interest.

Refinancing can also bring in more money if a homeowner had equity built in their home. Many homeowners refinance to get money from their home and pay off debt or home repairs, but homeowners that refinance to a lower interest rate and get money back may fair better if they pay on their mortgage principal.

Again, Citigroup isn’t the only big lender offering low interest rates at the present time. Check with other lenders and be sure you are getting the best possible rate when refinancing your home loan and that you are in the financial position to afford to refinance before proceeding.

article source: rwbpress

Student loan reform will provide relief to college students

The health care reform passed in the House of Representatives last Sunday won't only provide health care for the citizens of the United States, but will also provide some help for college students.

The reform was piggybacked on the back of health care reform.

The new student loan reform is aiming to eliminate the private sector from the process and have all loans come straight from the government.

According to the Congressional Budget Office, this would create a $62 billion net savings through 2020.

The $62 billion that's being saved would go back into financial aid.

SRU increased tuition by 3.5 percent before this school year, but the raise was below the rate of inflation for four straight years.

State schools are struggling to keep up in the current economy.

Students also bear the brunt of the burden because they're forced to pay higher tuition rates whenever the economy goes south.

SRU is still one of the cheapest schools in the state.

But with a $9 million deficit, how long will it be able to keep tuition costs so low?

Democrats trimmed their original spending plan by dropping the amount from $87 billion to $61 billion.

They increased the maximum number of dollars that could be spent on a Pell Grant from $5,300 to $5,900.

Besides increasing Pell Grants, the bill provides $1.5 billion to help students repay their loans. And beginning in 2014, borrowers won't be allowed to devote more than 10 percent of their monthly income to repay student loans.

The idea of there being more money toward financial aid is exciting for many students, and a majority of our staff is in favor of the program.

Any additional financial aid that could be provided for students would be beneficial.

Can you imagine, if we have children one day, what the cost of colleges will be?

Increasing tuition every year is going to hurt every aspect of academia.

The first victim of these increases would be lower-income students.

It's hard enough for students to pay as it as, let alone without any help for financial aid. These kids are trying to better their lives and may need an extra push to get there.

Students will also enjoy this new system because they'll have to spend less time worrying about making money to go to school.

Working will still be important, but with extra grant money coming in, they could put more focus on education.

Some of our staff members do have problems with the nature of how the bill was passed.

This is a practice that's gone on in the United States forever, but it's a reprehensible way to push a bill through.

Healthcare was on the front page of most major newspapers, while student loan reform was on page seven.

Also, cutting out the private sector will eliminate nearly 32,000 jobs.

The banks in the private sector used to be responsible for processing the loans once they were approved.

That isn't helping an economy rife with unemployment.

Also, increasing the Pell Grant by $600 is kind of insignificant, considering tuition at the Rock went up by $181 last year.

So in five years, the $600 extra wouldn't matter in four years.

We're all in favor of more money and hope this new program will benefit students sooner rather than later.

article source: theonlinerocket

Obama readies steps to fight foreclosures, particularly for unemployed

The Obama administration plans to overhaul how it is tackling the foreclosure crisis, in part by requiring lenders to temporarily slash or eliminate monthly mortgage payments for many borrowers who are unemployed, senior officials said Thursday.

Banks and other lenders would have to reduce the payments to no more than 31 percent of a borrower's income, which would typically be the amount of unemployment insurance, for three to six months. In some cases, administration officials said, a lender could allow a borrower to skip payments altogether.

The new push, which the White House is scheduled to announce Friday, takes direct aim at the major cause of the current wave of foreclosures: the spike in unemployment. While the initial mortgage crisis that erupted three years ago resulted from millions of risky home loans that went bad, more-recent defaults reflect the country's economic downturn and the inability of jobless borrowers to keep paying.

The administration's new push also seeks to more aggressively help borrowers who owe more on their mortgages than their properties are worth, offering financial incentives for the first time to lenders to cut the loan balances of such distressed homeowners. Those who are still current on their mortgages could get the chance to refinance on better terms into loans backed by the Federal Housing Administration.

The problem of "underwater" borrowers has bedeviled earlier administration efforts to address the mortgage crisis as home prices plunged.

Officials said the new initiatives will take effect over the next six months and be funded out of $50 billion previously allocated for foreclosure relief in the emergency bailout program for the financial system. No new taxpayer funds will be needed, the officials said.

The measures have been in the works for weeks, but President Obama is finally to release the details days after his watershed victory on health-care legislation. Following that bruising battle on Capitol Hill, his administration is now welcoming a chance to change the subject and turn its attention to the economy and, in particular, the plight of the unemployed -- concerns that are paramount for many Americans.

The administration has been facing increasing pressure from lawmakers and housing advocates to overhaul its foreclosure prevention efforts. So far, fewer than 200,000 borrowers have received permanent loan modifications under its $75 billion marquee program, known as Making Home Affordable. In the meantime, there is a growing backlog of distressed borrowers awaiting help from their lenders, which threatens to undercut efforts to stabilize the housing market.

Challenges unmet

Assistant Treasury Secretary Herbert M. Allison Jr. told a House panel Thursday that "we did not fully envision the challenges that we would encounter" when the earlier program was launched.

The efforts have been hampered by the difficulty of helping unemployed homeowners, who struggled to qualify for the government's mortgage relief plan. In requiring temporary relief for jobless borrowers, known as forbearance, officials are hoping to give them time to find a new job. Some will still need more assistance after the six-month period while others will ultimately lose their homes, administration officials said.

"We certainly support a forbearance opportunity for unemployed borrowers," said John A. Courson, chief executive of the Mortgage Bankers Association. He said he had not seen full details of the program.

Four measures

In addition to mortgage relief for unemployed borrowers, the program features four other key elements, including several steps to address the growing population of borrowers who owe significantly more than their home is worth, according to officials who spoke on the condition of anonymity because the official announcement had not been made. Underwater borrowers now make up about a quarter of all homeowners, according to First American CoreLogic. Economists consider these homeowners at higher risk of default because they cannot sell or refinance their home when they run into financial troubles.

The first key element is that the government will provide financial incentives to lenders that cut the balance of a borrower's mortgage. Banks and other lenders will be asked to reduce the principal owed on a loan if the amount is 15 percent more than their home is worth. The reduced amount would be set aside and forgiven by the lender over three years, as long as the homeowner remained current on the loan.

Until recently, administration officials had been reluctant to encourage lenders to cut the principal balance, worrying that this would encourage borrowers to become delinquent. But as federal regulators have struggled to make an impact on the foreclosure crisis, those qualms have weakened.

"We would prefer to see a required principal forgiveness program. But this is helpful," said David Berenbaum, chief program officer for the National Community Reinvestment Coalition, a nonprofit housing group. "This is another tool that will help consumers weather the crisis."

Second, the government will double the amount it pays to lenders that help modify second mortgages, such as piggyback loans, which enabled home buyers to put little or no money down, and home equity lines of credit.

These second mortgages are an added burden on struggling homeowners, especially when their total debt, as a result, is greater than their home value.

Federal officials have estimated that about half of all troubled homeowners have a second mortgage and last year launched a program to encourage lenders to restructure them. That effort has struggled to get off the ground.

Third, the new effort also increases the incentives paid to those lenders that find a way to avoid foreclosing on delinquent borrowers even if they can't qualify for mortgage relief. For example, the administration is scheduled to launch a program next month encouraging lenders to have borrowers sell their homes for less than the mortgage balance in what is known as a short sale.

Fourth, the administration is increasingly turning to the Federal Housing Administration to help underwater borrowers who are still keeping up their payments. The aim is to help these borrowers refinance into a more affordable loan. The FHA will offer incentives to lenders that reduce the amount borrowers owe on their primary mortgages by at least 10 percent.

For those borrowers who have more than one mortgage on their house, the FHA will allow refinancing of the first loan only. The new loan and any second mortgage could not exceed 15 percent of the home's value. This approach is meant to benefit not only borrowers but also lenders by allowing them to offload mortgages that might otherwise fail.

Only homeowners who are refinancing their main residence, have a credit score above 500 and can document their income are eligible.

Administration official say this refinancing program should not strain the FHA's already weakened finances because the effort will be financed with up to $14 billion out of the federal bailout program.

article source: washingtonpost

Gov’t to unveil plan to shrink some home loans

The Obama administration will announce Friday a plan to reduce the amount some troubled borrowers owe on their home loans, three people briefed on the matter said.

The people declined to be identified because the program had not yet been announced. Earlier in the day, Herbert Allison, an assistant Treasury secretary, told reporters officials are close to expanding the administration’s $75 billion foreclosure relief effort.

The plan to be unveiled Friday at the White House is expected to include at least three months of temporary assistance for borrowers who have lost their jobs. It also is expected to include an expanded effort to allow borrowers refinance into Federal Housing Administration loans.

The plan would expand the administration’s foreclosure-prevention program, which has been a disappointment to date. Critics have complained the program does little to encourage banks to cut borrowers’ principal balances on their primary loans. Nearly one in every three homeowners with a mortgage are “under water” — they owe more than their property is worth — according to Moody’s Economy.com.

Allison cautioned that any new plan is “not going to mean that all underwater mortgages are suddenly in the program.”

Obama administration officials have been studying such issues for months. An expansion of its foreclosure-prevention program has long been expected because only 170,000 homeowners have completed the process out of 1.1 million who began it over the past year.

And lawmakers have been frustrated by the lack of results.

“It has failed,” said Rep. Jackie Speier, D-Calif., at hearing of the House oversight committee on Thursday. “It has failed miserably and unfortunately we are incapable of saying: OK, this was an experiment, it didn’t work, let’s try something else.”

The program is designed to lower borrowers’ monthly payments by reducing mortgage rates to as low as 2 percent for five years and extending loan terms up to 40 years. To complete the program, homeowners need to go through a three month trial period and provide proof of their income, plus a letter documenting their financial hardship.

Though $75 billion in funding is available to the more than 100 lenders who have signed up, only a tiny fraction has been spent. Lenders had received $58 million in incentive payments as of last month, according to the Government Accountability Office.

AP Business Writer Daniel Wagner in Washington contributed to this report.

article source: taragana

Half of U.S. Home Loan Modifications Default Again

More than half of U.S. borrowers who received loan modifications on delinquent mortgages defaulted again after nine months, according to a federal report.

The re-default rate of loans modified in the first quarter of 2009 was 51.5 percent by the end of the year, the Office of the Comptroller of the Currency and the Office of Thrift Supervision said in a joint report today. The figure, which measures payments at least 30 days late, climbed to 57.9 percent for changes made in the prior 12 months.

U.S. homeowners are struggling to make payments as depressed housing prices leave them owing more than their properties are worth. About 24 percent of properties with a mortgage were underwater in the fourth quarter, First American CoreLogic said last month. The median price of a U.S. home was $165,100 in February, down 28 percent from its peak in July 2006, according to the National Association of Realtors.

Modifications are “clearly not working well and it’s not a surprise,” said Sam Khater, a senior economist at First American CoreLogic in Tysons Corner, Virginia. “It’s pointless to rewrite these loans because they’re underwater.”

The number of homes with mortgage payments at least 60 days late climbed 2.39 million in the fourth quarter, up 13.1 percent from the prior three months and 49.6 percent from the year earlier period, the quarterly Mortgage Metrics report said.

article source: democraticunderground

BofA Forgives Home-Loan Principals

According to the agreement with state attorneys general to help homeowners who got high-risk home loans from Countrywide Financial, Bank of America Corp. (BAC - Analyst Report) said on Wednesday that it would forgive about $3 billion in principal loan amount to about 45,000 troubled borrowers.

The borrowers had taken those loans before BofA acquired Countrywide Financial in mid-2008. However, following the acquisition, BofA has stopped such loans.

BofA will offer up to 30% of total loan balances for homeowners who owe more than 20% of the value of their home and missed at least two months of mortgage payments.

BofA is expected to start the process in May 2010. Following the execution, BofA will be the first U.S. mortgage lender to take such a systematic approach to reducing mortgage principal to help distressed borrowers by preventing foreclosures.

Wells Fargo & Co. (WFC - Analyst Report) said that it has modified more than 52,000 mortgage loans it absorbed when it acquired Wachovia Corp. In addition, Wells Fargo had reduced the principal on those loans by more than $2.6 billion.

BofA had already completed modifications for about 22,000 homeowners as of Feb 2010. This equals about 8% of its total list, compared to about 11% for JPMorgan Chase & Co. (JPM - Analyst Report).

Earlier this month, the Treasury received net proceeds of $1.5 billion from the sale of warrants entitling it to purchase BofA common stock.

The amount received from the auction of BofA warrants exceeds $1.1 billion raised from the sale of Goldman Sachs (GS - Analyst Report) warrants earlier.

The market turmoil was more harmful to BofA than its peers. However, the company has concluded acquisitions of Merrill Lynch and Countrywide Financial almost during the height of the financial crisis last year.

The CEO views these deals as beneficial for stakeholders of the company. Furthermore, this will allow the bank to focus on rebuilding customer relationships.

article source: zacks

Bank Launches Big Plan to Cut Mortgage Debt

Under pressure by Massachusetts prosecutors, Bank of America Corp. said Wednesday it would reduce mortgage-loan balances as much as 30% for thousands of troubled borrowers, in what could presage a wider government effort to encourage banks to offer debt reduction to ease the mortgage crisis.

The plan is one of the boldest moves yet to address the plight of millions of U.S. homeowners who are "under water," owing more on their homes than they're worth. It could make it easier for the Obama administration to move in a similar direction with its existing loan-modification program, although senior government officials and many bankers remain very wary of offering to cut loan balances as the main way of helping distressed borrowers.

So far, most modifications, including those under the government-subsidized Home Affordable Modification Program, involve reducing interest rates. Some also extend terms to 40 years, to shrink monthly payments.

But banks are finding that some borrowers aren't willing to keep making even reduced payments, believing they have little hope of ever having equity in their homes and might be better off renting, and perhaps buying a less-expensive home later.

"Severely under-water homeowners are reluctant to accept a solution that does not offer some reduction in principal," said Barbara Desoer, president of Bank of America Home Loans. "The whole purpose of the program is to get more customers to return phone calls" and make payments for trial modifications so workouts can be made permanent, she added.

The Obama administration is discussing with banks how to adjust its existing loan-modification program to encourage forgiveness of principal, people familiar with the matter say. An official declined to discuss such efforts but said the administration was encouraged by Bank of America's initiative, calling it "consistent with our own housing policy principles."

Howard Glaser, a housing-industry consultant, said, "The fact that private institutions are moving in this direction makes it more palatable for the Obama administration to face criticism from homeowners who think there's unfairness" in reducing principal for only some people.

The action by Bank of America is notable because it is the largest mortgage servicer, collecting loan payments on one of every five home loans in the U.S. At the end of last year, 14.76% of them were at least 30 days past due or in foreclosure, versus an industry average of 12.31%, according to Inside Mortgage Finance.

Some housing advocates were skeptical. Kevin Stein, associate director of the California Reinvestment Coalition, which works on access to credit, said "Everyone, including us, is looking for something positive to point to, but we are concerned this is going to be more P.R. than substance."

The bank's program is limited to Countrywide borrowers whose loan balance is at least 120% of the estimated home value, who are at least 60 days overdue, and who can show that financial hardship makes them unable to meet current payments. The bank estimated that 45,000 customers will qualify for principal reductions averaging more than $60,000.

Only the riskiest loans will be eligible. They include subprime loans; "option adjustable-rate" mortgages entailing minimal payments now but big increases later; and certain loans that have a fixed rate for two years and then adjust annually.

The bank's move is part of an agreement to settle claims over certain high-risk loans made by Countrywide Financial, which the bank acquired in mid-2008. The Massachusetts Attorney General's office, which was negotiating with the bank, said it was prepared to file suit had the agreement not included principal reductions.

Other banks have selectively reduced balances on certain loans. Wells Fargo & Co. said it modified loans for 52,600 borrowers with "option-ARM" loans last year, totaling $2.6 billion in principal write-downs.

Citigroup Inc. reduces principal on a case-by-case basis after other options to address affordability are exhausted, a spokesman said.

Banks and policy makers have long worried that reducing loan balances for some could spur others to default in hopes of a similar deal. Bank of America said it believed it would limit that risk by requiring borrowers to "earn" the lower balances in stages over five years by keeping up on their new, lowered payments. After the third year, the bank could halt principal forgiveness if home values have stabilized enough to provide borrowers with equity.

Last fall, Bank of America slashed more than $200,000 in principal on an option-ARM that Precy Padua used in 2007 to buy a nearly $1 million four-bedroom home in Fairfield, Calif. That modification, which stemmed from a 2008 multi-state Countrywide settlement, lowered her principal balance to $635,000 and provided a 5.5% fixed rate over 40 years.

Ms. Padua said she had stopped making her payments in late 2008, even though the loan wasn't set to adjust to higher payments for years, because the home's value had fallen to around half of the $850,000 she owed.

"We made a mistake," said Ms. Padua, a 61-year-old clinical lab technician. The lower principal balance is a "big help," she said, even though her monthly payments have increased by nearly 40% from the initial low teaser payments, to $3,275. She estimates her home is still under water by $100,000.

Bank of America has come under fire for not doing enough to rework troubled loans. Through February, it had 240,550 borrowers—or 24% of potentially eligible homeowners—in trial or permanent modifications, according to the Treasury Department, lower than most competitors. The bank had completed modifications for 20,666 borrowers, with 22,303 pending.

A bank spokesman said the government's numbers don't accurately reflect the firm's performance.

article source: onlinewsj

Reverse Mortgage For Senior Citizens Can Pay Off Home Loan

Senior citizens that qualify for a reverse mortgage may be able to pay off their home loan and rid themselves of mortgage debt. A reverse mortgage is only available to senior citizens, so if money is needed later in life, a reverse mortgage is a great way to use the equity in your home to make payments, home improvements, or simply have access to cash.

A reverse mortgage must first be put toward the balance of a home loan. If you owe money on your home and get a reverse mortgage than any or all of the reverse mortgage funds must go toward paying off the mortgage balance.

Obviously, if you have no mortgage balance you keep the money, but using the money to pay off your home loan is a great way to alleviate the financial strain associated with a mortgage payment. If the money you get from a reverse mortgage is less than what you owe on the home, you can still use your own funds to pay off your mortgage, but in such a case as that, you’ll have to look closely at your personal financial situation to see if a reverse mortgage is right for you.

If you have more equity in your home and can get enough from a reverse mortgage to pay off your home loan, then it could benefit you financially. A reverse mortgage never has to be paid back as long as the borrower is alive or remains in the home. Again, if you are interested in a reverse mortgage, you will want to look at your personal financial situation, make sure you understand what a reverse mortgage requires, then decide if it is the right choice for you.

This entry was posted on 03/25/2010 at 7:00 am and is filed under Banking/Finance, Loan Modification, Real Estate. You can follow any responses to this entry through the RSS 2.0 feed.

article source: rwbpress

Wells Fargo Home Mortgage Loan—Financial Help Can Come From Refinancing

Wells Fargo homeowners that may be in need of financial help in their mortgage may be able to get a lower monthly mortgage payment by refinancing their home loan. Wells Fargo, along with other big mortgage lenders, is offering low mortgage rates on homes and refinancing, and dropping your interest rate on a mortgage can go a long way in helping you afford your monthly mortgage payment.

Many homeowners are getting mortgage rates for around or under 5%. Some homeowners have seen refinancing rates on a 30-year fixed rate mortgage for 4.75%. Even if you are not able to get a rate below 5% you still may get a cheaper interest rate, which is going to help you when it comes to making your mortgage payment.

By refinancing to a 30-year fixed rate mortgage, for instance, you can possibly lower your monthly mortgage payment, in most cases, and for those with equity built up in their home, you can get money back.

Many people that have refinanced and got money back have either kept or spent the money in some other way, but homeowners that do get money back from refinancing a mortgage would do well to apply that money to the principal amount on the mortgage. While refinancing can be beneficial there are costs associated with the refinancing process, so do your research, look at lenders outside of Wells Fargo too, and make sure that refinancing is the best option for you before proceeding.

This entry was posted on 03/25/2010 at 7:00 am and is filed under Banking/Finance, Loan Modification. You can follow any responses to this entry through the RSS 2.0 feed.

article source: rwbpress

How to Refinance your Home - Loans Guide

Home Refinancing Basics

In recent years, millions of homeowners have taken advantage of low rates and refinanced their mortgages. This article describes the advantages and possible pitfalls associated with a "refi."

Before You Start

• Remember that refinancing to reduce debt can be a smart move, but refinancing in order to borrow more for consumer purchases (car, vacation, etc.) could set you back significantly.
• Read the fine print on your current mortgage to learn whether you'll be assessed penalties or fees for "getting out" of that loan early.
• Make sure you know whether you have a fixed or variable interest rate and what the terms are.

1.Home Refinancing Basics

In recent years, Americans seeking to take advantage of low interest rates have lined up to refinance their mortgages. In fact, refinancings hit an all-time high in 2003, and remained high in both 2004 and 2005, according to the Mortgage Bankers Association of America.
But while it's true that refinancing has the potential to help you reduce the costs associated with borrowing money to own a home, it is not necessarily a strategy that makes sense for every individual in every situation. So before you make a commitment to refinance your mortgage, its important to do your homework and determine whether such a move is the right one for you.

2. To Refinance or Not

The old and arbitrary rule of thumb said that a refi only makes sense if you can lower your interest rate by at least two percentage points for example, from 9% to 7%. But what really matters is how long it will take you to break even and whether you plan to stay in your home that long. In other words, make sure you understand -- and are comfortable with -- the amount of time it will take for your overall savings to compensate for the cost of the refinancing.
Consider this: If you had a $200,000 30-year mortgage with an 8% interest rate, your monthly payment would be $1,468. If you refinanced at 6%, your new monthly payment would be $1,199, a savings of $269 per month. Assuming that your new closing costs amounted to $2,000, it would take eight months to break even. ($269 x 8 = $2,152). If you planned to stay in your home for at least eight more months, then a refi would be appropriate under these conditions. If you planned to sell the house before then, you might not want to bother refinancing. (See below for additional examples.)

3. Remember -- All Mortgages Are Not Created Equal

Don't make the mistake of choosing a mortgage based only on its stated annual percentage rate (APR), because there are a variety of other important variables to consider, such as:
The term of the mortgage -- This describes the amount of time it will take you to pay off the loan's principal and interest. Although short-term mortgages typically offer lower interest rates than long-term mortgages, they usually involve higher monthly payments. On the other hand, they can result in significantly reduced interest costs over time.
The variability of the interest rate -- There are two basic types of mortgages: those with "fixed" (i.e., unchanging) interest rates and those with variable rates, which can change after a predetermined amount of time has passed, such as one year or five years. While an adjustable-rate mortgage (ARM) usually offers a lower introductory rate than a fixed-rate mortgage with a comparable term, the ARM's rate could jump in the future if interest rates rise. If you plan to stay in your home for a long time, it may make sense to opt for the predictability and security of a fixed rate, whereas an ARM might make sense if you plan to sell before its rate is allowed to go up. Also keep in mind that interest rates hovered near historical lows in recent years and are more likely to increase than decrease over time.
Points -- Points (also known as "origination fees" or "discount fees") are fees that you pay to a lender or broker when you close the deal. While a "no-cost" or "zero points" mortgage does not carry this up-front cost, it could prove to be more expensive if the lender charges a higher interest rate instead. So you'll need to determine whether the savings from a lower rate justify the added costs of paying points. (One point is equal to one percent of the loan's value.)

How Much Would You Save?
A homeowner with a 30-year, $200,000 mortgage charging 8% interest would pay $1,468 each month. The table below illustrates the potential monthly savings and the various break-even periods that would result from refinancing at different rates.
Rate After Refinancing	New Monthly Payment	Monthly Savings	Months to Break Even*
7.5%	$1,398	$70	29
7.0%	$1,331	$137	15
6.5%	$1,264	$204	10
6.0%	$1,199	$269	8
5.5%	$1,136	$332	7
5.0%	$1,074	$394	6
*Assumes $2,000 closing costs. Rounded up to the next highest month.

A Closer Look at Mortgage Fees

Using data collected during 2003, researchers at Bankrate.com determined the average fees charged to consumers who borrow money to buy a home. Based on a loan of $180,000, the fees broke down as follows: Average Lender/Broker Fees Administration fee: $336 Application fee: $205 Commitment fee: $498 Document preparation: $194 Funding fee: $228 Mortgage broker fee: $839 Processing: $320 Tax service: $73 Underwriting: $269 Wire transfer: $31 Third-Party Fees Appraisal: $327 Attorney or settlement fees: $445 Credit report: $29 Flood certification: $17 Pest & other inspection: $68 Postage/courier: $45 Survey: $174 Title insurance: $605 Title work: $200 Government Fees Recording fee: $76 Various taxes: $1,339

4. Stick With What You Know?

Finally, keep in mind that your current lender may make it easier and cheaper to refinance than another lender would. That's because your current lender is likely to have all of your important financial information on hand already, which reduces the time and resources necessary to process your application. But don't let that be your only consideration. To make a well-informed, confident decision you'll need to shop around, crunch the numbers, and ask plenty of questions.

Summary

• The decision to refinance should only be made if the long-term savings outweigh the initial expenses. To calculate your break-even point, divide the cost of the refi by your monthly savings. The resulting figure represents the number of months you will need to stay in the home to make the strategy work.
• Don't select a new mortgage based only on its annual percentage rate.
• Also evaluate the term of the loan, whether the interest rate is fixed or variable, and the relative merits of paying up-front fees in exchange for a lower rate.
• Your current lender already knows you and has your financial information on file, so you may be able to get a better deal that way, instead of going to a new lender.
• To get the best possible refinancing deal, you'll need to shop around, crunch some numbers, and ask a lot of questions.

Checklist

• Shop around and conduct a detailed cost assessment (with a financial professional, if necessary) to identify which mortgage offers the greatest financial benefits.
• Read the entire contract before signing. Don't let anyone pressure you or rush you to make a hasty decision.
• If refinancing results in lower monthly payments, use those savings to pursue other important goals, such as preparing for retirement and college costs.

NRI home loans on the upswing

BankBazaar.com

Most NRIs give a lot of thinking before investing in property in India and most of the time put off the plan due to effort, research and planning involved and in some instances if they do not have enough funds for the same. For such individuals there is always the NRI home loan.

RBI defines NRI as "An Indian citizen who holds a valid Indian passport and who stays abroad for employment or for carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a NRI."

The NRI loans are made available for the following purposes:

Purpose of the NRI Home Loan

Self-construction of a property on a plot of land.

Finance the purchase of a plot of land allotted by a society/development authority.

Renovate/improve an existing property in India.

Purchase of a house either under construction or on a resale.

Non-resident Indians are also permitted to purchase an existing house or flat. The RBI has not prohibited banks from providing financing to NRIs for the purchase of a second house, but the loan on the house is for the self-occupation of the NRI upon their return to India. Loans are also offered to NRIs against NRE deposits. These loans can be repaid out of NRE funds but the interest would be charged at a commercial rate. Loans to Non-Resident Indians are also provided against FCNR deposits. 

Difference between a normal & NRI Loan  

NRI home loans can be availed by any NRI with as much ease and convince as any resident would avail a home loan. However some difference between the two kinds of loans exists in terms of tenure, documents, repayment etc.

Interest rate is little costlier for NRI than Indian residents, it is 0.25% to 0.50% more for NRIs. The NRI gets the only 85% cost of the property as a loan amount.

The tenure of loan is also short ranging from 7 years to 15 years. The size of the loan depends upon the borrower's repayment capacity.

Up to 36 times of the gross monthly earnings of the applicant may be issued as loan. However, there is a maximum limit. Calculation of eligibility is same as that of Indians living in the country.

Difference between a normal & NRI Loan  

The re-payment can be made as equated monthly Installments (EMI) through Non - Resident Ordinary (NRO) account or the Non Resident External (NRE) Account.

For security, most banks insist that the first mortgage of the property should be in their name. If the property is under construction then adequate additional security is required such as guarantee of third party (either resident or non-resident).

Tax benefits

NRIs cannot claim tax benefits on home loans in India as they have to pay tax in the nation where they work and earn. However, they need to file tax returns to become eligible for home loans. However, if they pay tax in India for income earned in India, they can claim tax rebate for the home loan. 

The current scenario

An estimated 25 million NRIs living in 130 countries have remitted US$52 billion so far this year (December 2009). In fact India topped the list of countries in remittance flow followed by China and Mexico, according to World Bank report on Migration and Development Brief.

The impact of global slowdown, job losses and unviable job offers has necessitated a section of NRIs to return to Indian shores.

According to housing finance companies and banks disbursing home loans to NRIs/PIOs in Dubai, there has been a sudden surge in demand for residential property across Indian cities and particularly for Tier II cities in the wake of the economic slowdown in the emirate.

Southern cities in particular Bangalore, Chennai and Hyderabad are driving the demand though minimal level demand exists for other cities as well. Most of the NRIs keen to invest in real estate back home are looking for home loans as they are unable to get loans locally due to the current tight liquidity situation across US.

What experts say?

Experts agree that despite turbulence in mature markets, the "emotional appeal" of buying a property in India may be stronger now. However, this in turn has created a price increase in the last six months.

Popular property portals claim that the number of queries from NRIs has surged nearly 15-20 per cent over the last two-three months. However, just how many of these 'queries' translate into actual sales remains to be seen, say people behind the business.

The focus on NRIs for these portals is stronger now as many are looking to come back to India apart from those who wish to invest in properties. Another factor that seems to favour NRIS is the FDI Policy that permits FDI up to 100% from foreign/NRI investor under the automatic route has boosted NRI confidence. Banks have attractive NRI housing schemes to accommodate the housing needs of NRIs.

From the stables of HFCs, NRI housing finance plans with suitable repayment options are available. The easy interest rates on housing finance and the improved lifestyle that developers have created has enabled NRIs to acquire property not only for investment, but also for personal use.

Access to NRI loans - at the door step

The response to the real estate market has been so encouraging from the overseas community that it has prompted housing finance companies (HFCs) to set up branches in countries where there is a high NRI concentration, as in the case of ICICI Bank.

The bank has representative offices in Dubai, New York, Bahrain, Singapore and the UK to tap potential property investors there.

ICICI Bank, Sundaram Home Finance Limited, LIC Housing Finance, HDFC, CanFin Homes, Citibank and a host of other scheduled banks are vying for lending opportunities to NRIs.

However the final decision on whether the time is right to buy a house, whether to use one's own funds or to take a loan, whether to go for an independent house or an apartment, and which home loan provider to use must be made by the NRI himself/herself after careful analysis.

What this means for the realty market

Builders are looking to make up for the huge losses in the past year or so.

With growing NRI interest in Indian properties, reports suggest that the realty prices have rebounded to 2007-2008 levels, which however cannot be good news for people scouting for homes with toned down prices.

This is again an example of how a reaction in one corner of the globe can affect another.

Sometime back the same scenario happened with rentals, which shot up with a lot of NRIs returning home to take up jobs in India.

Source: BankBazaar.com - An online marketplace for your personal loan and home loan needs.

House Price Recovery Just A Head Fake, Says Alpert, Especially In New York

In the second half of 2009, house prices staged a surprising recovery, leading many to conclude that the housing bust was done.
Keep dreaming, says Dan Alpert of Westwood Capital.
The rise in the second half of 2009 was mainly the result of pent-up demand combined with a tax-break, subsidized mortgage rates, and other incentives.  The housing market is still awash in excess inventory, and Alpert says this will eventually drive prices down to 8%-10% below the lows of early last year.
The good news?
House prices should bottom this year and then begin to recover.  Also, for the hardest hit areas, such as those in California or the sand states, the bust is probably over.  Prices have fallen so far in those areas that Alpert thinks they're bottoming now.
So where is the sky still falling?
Places where price-to-rent ratios are still well above historical norms, such as New York City.
A staggering amount of excess inventory means the housing crash in NYC is alive and well, Alpert says.