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Let’s Make Home Happen!
Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market
To create affordable housing
opportunities for North Carolinians
whose needs are not met
by the market.
NCHFA Mission Statement
www.nchfa.com
Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market
More than
191,000 households
www.nchfa.com
The N.C. Housing Finance Agency has helped
Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market
$11.7 billion in affordable homes
and apartments
www.nchfa.com
The N.C. Housing Finance Agency has financed
Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market
79,600 families
buy their first home
www.nchfa.com
The N.C. Housing Finance Agency has helped
Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market
More than $150 million of supportive housing for North Carolinians:
www.nchfa.com
The N.C. Housing Finance Agency has financed
mental illness & developmental disabilities
survivors of domestic violence
homeless
Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market
$693 million in real estate activity
7,226 construction jobs
$66 million in state and local tax revenues
www.nchfa.com
The N.C. Housing Finance Agency’s
2008 investments created:
Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market
Today’s Session Topic
Tools for Turning Minority
Buyers Into Homeowners
in a Tight Credit Market
Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market
Our Speakers
Ms. April Young, VP of BB&T- Specialist in all facets of mortgage financing
Mr. Jose Serrano, Realtor RE/MAX United - 25 years of experience in real estate, specializing in all areas of real estate purchases
Mr. Lewis Dancy, Assistant Director of Mortgage Lending, Self-Help Credit Union
Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market
Credit is Tight
Fewer mortgage applications being approved
“Nearly seven of 10 mortgage applications were approved and
financed during the housing boom five years ago. At the end of 2008, the
number was down to five.”– Source: CNN, 9/17/2009
Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market
Credit Scores
Two Measures of Credit– Credit Report – like a school transcript– Credit score – like an SAT score
Access Your Credit Report for Free– www.annualcreditreport.com– Call 877-322-8228– Free / one every 12 months from each bureau– Opt out of credit inquiries = (888) 567-8688
Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market
True or False About Credit
Fallacy: A poor score will haunt me forever.
Fact: Just the opposite is true. A score is a “snapshot” of your risk at a particular point in time. It changes as new information is added to your bank and credit bureau files. Scores change gradually as you change the way you handle credit.
Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market
True or False About Credit
Fallacy: Credit scoring is unfair. Fact: Scoring considers only credit-
related information. Factors like gender, race, nationality and marital status are not included. In fact, the Equal Credit Opportunity Act (ECOA) prohibits lenders from considering this type of information when issuing credit.
Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market
What's Not in Your Credit Score
Any items reported as child/family support obligations or rental agreements.
Certain types of inquiries (requests for your credit report). The score does not count “consumer-initiated”
inquiries.
Whether or not you are participating in a credit counseling of any kind.
Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market
What's Not in Your Credit Score
Your race, color, religion, national origin, sex and marital status.
Your age. Your salary, occupation, title, employer,
date employed or employment history. Where you live. Any interest rate being charged on a
particular credit card or other account.
Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market
Credit Scores Credit scores range from 350 to 850
in most credit scoring models 3 main bureaus are depositories of your
credit histories– Equifax– Experian– TransUnion
Not all 3 bureaus will have identical information
Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market
Know What Makes UpYour Credit Score
35% is based on “payment history” 30% is “amount owed as a percentage of
total credit available” 15% is based on length of credit history 10% is based on types of credit utilized
– Revolving credit vs. installment debt
10% is new credit inquires or applications for credit
Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market
Credit Scores Vary by Type of Credit
Did you know….- Your credit score can change
daily
- Your credit score number is different when applying for a mortgage vs. a car
Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market
Improving Your Credit Score
Pay your bills on time. If you have missed payments, get
current and stay current. Be aware that paying off a
collection account will not remove it from your credit report. It will stay on your report for seven years.
Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market
Improving Your Credit Score Keep balances low on credit cards and other
types of “revolving credit”. Pay off debt rather than moving it around to
other credit cards. Don't close unused credit cards as a short-
term strategy to raise your score. Don't open new credit cards that you don't
need, just to increase your available credit.
.Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market
Ways to Improve Credit
Pay your bills on time Don’t hide from credit problems Seek help from a established housing
counselor if you feel overwhelmed or are getting behind on payments– Housing counselors are trained to solve these
problems– Help is confidential and can change your life
for the betterTools for Turning Minority Buyers into Homeowners in a Tight Credit Market
Mortgage Market in Flux
According to federal HMDA data just released in September 2009, “the total number of originated loans of all types reported fell by 3.3 million, or 31 percent, from 2007”.
“FHA backed mortgages have increased dramatically. The number of such loans in 2008 rose by 169 percent over 2007 levels”.
Source: FFIEC.govTools for Turning Minority Buyers into Homeowners in a Tight Credit Market
Mortgage Market in Flux
“FHA’s market share expanded from 5.5 percent in 2007 to 19.6 percent in 2008”
“The number of VA-guaranteed loans in 2008 increased by 48 percent over the number in 2007.”
Source: FFIEC.gov
Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market
Lending DiscrepanciesStill Exist
According to FFIEC data released in September 2009…
“for conventional home purchase lending in 2008, the incidence of higher-priced lending (not adjusted for lender or
borrower-related factors) was 17.1 percent for blacks, 15.4 percent for Hispanic whites, 6.5 percent for non-Hispanic whites, and 3.3 percent for Asians.
Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market
If You Need Help
Contact a HUD-approved credit counselor
Seek help from a non-profit agency Establish a budget and stick to it Seek advice from an established
financial institution or counselor
Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market