Palm Springs, CA – The American Bankers Association, through its subsidiary ABA Total Business Solutions, and Freddie Mac (NYSE:FRE) are extending and enhancing their special alliance to provide the nation’s community banks with critical mortgage products, technology tools, staff training and other important services to help them compete in today’s troubled mortgage market. Freddie Mac is one of the nation’s largest investors in residential mortgages.
The official announcement of the Freddie Mac/ABA Alliance extension was made here at the ABA’s Real Estate Lending Conference and Marketplace.
“Today’s announcement with the ABA will accommodate its members’ changing needs with a proven package of business services and residential financing options,” said Iliana Ghanem, Freddie Mac vice president for regional and community lending. “We are proud of our relationship with the ABA and our commitment to provide its members with a higher level of support in today’s challenging market.”
“We are pleased to extend and enhance our agreement with Freddie Mac,” said Deborah Whiteside, senior vice president mortgage solutions, ABA Total Business Solutions. “Community bankers are currently the most stable source of funding for mortgages in the country. The Freddie Mac alliance helps them stay competitive in their markets.”
By joining the Freddie Mac/ABA Alliance, banks gain competitive cash executions, services to help them manage their mortgage portfolios more efficiently – plus exclusive training sessions on many Freddie Mac products and solutions, especially in the areas of technology and affordable housing.
Access to Critical Origination, Servicing and Compliance Services
In addition, the ABA/Freddie Mac Alliance gives banks special access to critical services from some of the industry’s leading providers. These include:
* Set-up advantages for Mortgagebot® with Loan Prospector bank-branded website to originate mortgages, utilizing Freddie Mac’s Loan Prospector® automated underwriting system
* Private-label subservicing through Cenlar® FSB and Dovenmuehle Mortgage, Inc.
* Outsourced Investor accounting, P&I and T&I bank account reconciliations and loan level quality control services through Mortgage Dynamics Inc.
* Advisory services from Brook Systems to help members comply with the myriad of state anti-predatory and other lending statutes;
* REO Management Services from New Vista Asset Management, Inc., the nation’s only CRA-focused foreclosure disposition firm that can help banks quickly and responsibly sell their REO inventory in all major markets.
For more information on the ABA/Freddie Mac Alliance call 866-764-2083 or visit www.FreddieMac.com/singlefamily/aba.html.
Freddie Mac is a stockholder-owned corporation established by Congress in 1970 to support homeownership and rental housing. Freddie Mac purchases single-family and multifamily residential mortgages and mortgage-related securities, which it finances primarily by issuing mortgage pass through securities and debt instruments in the capital markets. Over the years, Freddie Mac has opened the doors for one in six homebuyers and more than two million renters across America.
ABA Total Business Solutions offerings are provided via ABA Business Solutions, Inc., a subsidiary of the American Bankers Association. Leverage, access, and expertise mark the suite of products offered by ABA Total Business Solutions. Our relationships with best-in-class companies give you access to unmatched, high-value solutions providers in mortgage; card programs; capital markets; and commercial lending and business banking.
The American Bankers Association brings together banks of all sizes and charters into one association. ABA works to enhance the competitiveness of the nation’s banking industry and strengthen America’s economy and communities. Its members – the majority of which are banks with less than $125 million in assets – represent over 95 percent of the industry’s $12.7 trillion in assets and employ over 2 million men and women.
Tuesday, March 18, 2008
Thursday, February 28, 2008
Step 1:
Understand and improve your credit
Your credit reports and credit scores are a major part of your mortgage application. A mortgage lender will usually check all three of your credit scores – based upon data from Equifax, Experian, and TransUnion – and use the middle score to calculate your rates. A credit score over 650 will help you get good rates on your mortgage. Having an even higher credit score (750 or above) can lower your rates even more.
If your credit score is below 650, you can try to give it a quick boost by:
* Reducing your credit card balance below 35% of the credit limit
* Keeping your accounts stable
* Making all of your payments on time
* Avoiding unnecessary applications for credit
* Correcting negative inaccuracies.
Checking your credit reports and scores 3-6 months before a mortgage application will ensure that you have enough time to fix any problems you find.
Step 2:
Reduce your debts
Mortgage lenders look at your debt-to-income (DTI) ratio to determine how much you can afford to borrow. This ratio is calculated by dividing your monthly pre-tax income by the amount you use to pay off debts such as auto loans, student loans, and credit card balances each month. Your credit card payments are calculated in this formula as the minimum payment required, not the amount you usually pay each month.
Borrowers with a debt-to-income ratio below 30% will have an easier time getting a good deal on a loan. If your DTI ratio is too high, you should consider paying off some small loans (such as electronics or personal loans) or credit card balances before you apply for a mortgage. Don’t close the credit card accounts when you pay them off, however. Closing credit accounts can damage your credit score. You can also improve your DTI by increasing your income. Usually, this is done by co-signing with a spouse.
Step 3:
Improve you loan-to-value ratio
Your down payment amount is the third key element the interest rate calculation process. In the loan world, your down payment is calculated by looking at your loan-to-value (LTV) ratio. Lenders calculate your LTV ratio by dividing the amount you are asking to borrow by the price of the home you want to buy. If you are buying a house for $100,000 and want a mortgage for $90,000, your loan-to-value ratio is 90%.
Ideally, lenders look for borrowers with an LTV over 80%. However, many borrowers these days only put down a 5% down payment or obtain special financing with a no-down payment loan. It’s especially common for first-time borrowers to buy a home with little or no down payment. If your LTV is below 80%, you will probably be expected to pay private mortgage insurance on your loan. You can improve your LTV ratio by increasing your down payment or choosing a less expensive home to purchase.
These three improvements can help you save big on your home loan. Reducing your interest rate by just one percent can translate into thousands of dollars in savings over the life of the loan. As part of your loan preparation, you can also use Credit.com’s free online mortgage calculators to easily estimate how much you can afford to borrow, what rates you deserve, and what kind of loan is best for you. When you are ready to apply for a loan, you can apply here for no- obligation loan offers from competing lenders online. A home is often the largest purchase people make in their lifetime. Credit.com wants to help you make this important process as easy and as affordable as possible.
Understand and improve your credit
Your credit reports and credit scores are a major part of your mortgage application. A mortgage lender will usually check all three of your credit scores – based upon data from Equifax, Experian, and TransUnion – and use the middle score to calculate your rates. A credit score over 650 will help you get good rates on your mortgage. Having an even higher credit score (750 or above) can lower your rates even more.
If your credit score is below 650, you can try to give it a quick boost by:
* Reducing your credit card balance below 35% of the credit limit
* Keeping your accounts stable
* Making all of your payments on time
* Avoiding unnecessary applications for credit
* Correcting negative inaccuracies.
Checking your credit reports and scores 3-6 months before a mortgage application will ensure that you have enough time to fix any problems you find.
Step 2:
Reduce your debts
Mortgage lenders look at your debt-to-income (DTI) ratio to determine how much you can afford to borrow. This ratio is calculated by dividing your monthly pre-tax income by the amount you use to pay off debts such as auto loans, student loans, and credit card balances each month. Your credit card payments are calculated in this formula as the minimum payment required, not the amount you usually pay each month.
Borrowers with a debt-to-income ratio below 30% will have an easier time getting a good deal on a loan. If your DTI ratio is too high, you should consider paying off some small loans (such as electronics or personal loans) or credit card balances before you apply for a mortgage. Don’t close the credit card accounts when you pay them off, however. Closing credit accounts can damage your credit score. You can also improve your DTI by increasing your income. Usually, this is done by co-signing with a spouse.
Step 3:
Improve you loan-to-value ratio
Your down payment amount is the third key element the interest rate calculation process. In the loan world, your down payment is calculated by looking at your loan-to-value (LTV) ratio. Lenders calculate your LTV ratio by dividing the amount you are asking to borrow by the price of the home you want to buy. If you are buying a house for $100,000 and want a mortgage for $90,000, your loan-to-value ratio is 90%.
Ideally, lenders look for borrowers with an LTV over 80%. However, many borrowers these days only put down a 5% down payment or obtain special financing with a no-down payment loan. It’s especially common for first-time borrowers to buy a home with little or no down payment. If your LTV is below 80%, you will probably be expected to pay private mortgage insurance on your loan. You can improve your LTV ratio by increasing your down payment or choosing a less expensive home to purchase.
These three improvements can help you save big on your home loan. Reducing your interest rate by just one percent can translate into thousands of dollars in savings over the life of the loan. As part of your loan preparation, you can also use Credit.com’s free online mortgage calculators to easily estimate how much you can afford to borrow, what rates you deserve, and what kind of loan is best for you. When you are ready to apply for a loan, you can apply here for no- obligation loan offers from competing lenders online. A home is often the largest purchase people make in their lifetime. Credit.com wants to help you make this important process as easy and as affordable as possible.
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