Despite earlier reports to the contrary, it turns out that your mortgage lender will not have to pull a second full credit report on you hours before closing on your home purchase or refinancing.

In a clarification of a policy announced earlier this year, mortgage giant Fannie Mae now says applicants will need to come clean about any debts they have incurred since they submitted their mortgage application — or debts they never disclosed on the application. But a formal pre-closing credit report will not be mandatory to confirm creditworthiness.

Instead, loan officers can use other techniques to verify that you haven't financed a new car, taken out a personal loan or even applied for new credit in any amount that might make it more difficult for you to afford your monthly mortgage payments.

Although Fannie made no reference to specific services in its recent clarification letter to lenders, some commercially available programs claim to be able to monitor mortgage borrowers' credit activities on a 24/7 basis, flagging such things as inquiries, new credit accounts and previous accounts that did not show up on the credit report that was pulled at the time of initial application.

One of those services is marketed by national credit bureau Equifax and dubbed "Undisclosed Debt Monitoring." Aimed at what Equifax calls "the quiet period" between application and closing — often one month to three months — the system is "always on," the company says in marketing pitches to mortgage lenders.

Fannie's new policy puts the burden of detecting these debts squarely on lenders or loan officers. Whether they pull additional credit reports — still an option allowed under the revised policy — or use some form of monitoring service, lenders must guarantee that the debt loads stated in any mortgage package submitted for purchase by Fannie Mae are scrupulously accurate as of the moment of closing. If not, the lender probably will be forced to endure the most painful form of punishment in the financial industry: a forced "buyback" of the entire mortgage from Fannie Mae.

What does this mean if you're planning to finance a home purchase or refinance your existing mortgage into a new loan with a lower interest rate? Tops on the list: Be aware that sophisticated credit surveillance systems are now being used in the mortgage industry.

Next, try not to inquire about, shop for or take on new credit obligations during the period between your application and the scheduled closing. If you seriously want that new loan, keep your credit picture simple — no significant changes, no additions — until you settle on the mortgage.

Our September 2010 Johnson County Kansas Real Estate Newsletter is now online…

Read It Here Now!

Millions of people have found themselves facing foreclosure since the economic climate has shifted so rapidly over the past couple of years. Thanks to President Obama’s Federal Loan Modification Plan, however, thousands of people are starting to see themselves having some new hope that they may be able to keep their home. This loan modification program is all a part of the Federal Stimulus Package and has been funded with a total of $72 billion.

Now is the time for you to take advantage of Obama’s loan modification plan that can help you stay in your own home. You’ll simply need to fill out an application and be approved, so make sure you get help with the application process because it can only be done once. Once you’re approved for the loan modification services you’ll start to see a monthly payment that’s less than 31% of your income monthly and may have a longer repayment period, a lower interest rate, waived late fees and even forgiven principle all due to the loan modification program.

This loan modification program is going to be a once-in-a-lifetime chance for you to save your home and even pay less for the house you’ve come to love. If you’re like millions in this country that aren’t sure if they’re going to make it, it’s time to stop worrying and start taking advantage of the Obama federal loan modification plan that can possibly help you. Don’t wait too long; this plan will no longer be in effect after 2012 and you can lose your chance forever if you wait until you’re already in foreclosure. The first step you need to take is to seek advice from someone knowledgeable about Obama’s Federal Loan Modification Plan to make absolutely certain that you have completely reliable information and are dealing with someone who is qualified and capable of helping you with saving your home.

The property tax burden for residential property owners has not kept up with the present slide and erosion of market values. Everyday commercial businesses are failing and have little or no assets that make up the tangible personal property taxes and real property tax base. State and local tax collectors have lost revenue due to their inability to collect the property taxes due. It could take years to collect the back taxes for these entities, if the tax authorities are even able to collect the taxes. Defunct businesses are closing every day. Many tax jurisdictions have the legal right to seize and confiscate tangible personal property – i.e. machinery, equipment, and fixtures. These items can comprise a large percentage of a tax base. Typically, tangible property is taxed at the same millage rates as real property and goes to pay and provide the same government services that real property taxes.

It should not be surprising that residential homesteads will have to absorb the lost tax revenue. Most tax assessors will be ardent and steadfast in over assessing the homeowner to compensate for the business failures. Business bankruptcies will greatly impact each local and state revenue collection abilities.

Home values have dropped over fifty percent in many states. This drop in market value should be reflected in each home owner’s tax assessment and property tax bill. For those home owners who have not lost their home due to mortgage foreclosure, they are faced with a home that is grossly over assessed and being upside down in their mortgage amount compared to market value. In a normal economy foreclosures are considered an exception. Today foreclosures are a norm in many localities and are the only sales transactions that are occurring. Talk to any real estate appraiser to confirm these market conditions. With this being the case, chances are that your local tax assessor is only making minute adjustments to truly compensate for the market conditions.

Property taxes are typically based upon market value and equalization. Paying more than your fair share of property taxes typically defies your states constitutional obligation. Before you pay that tax bill, ask how it was computed, and don't be afraid to file to have your tax base adjusted. It could save you hundreds of dollars in overpaid taxes.

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