How Is Your Credit?

Your credit score is not the only determinant of whether you qualify for a mortgage loan but it is an important one. However, many people are confused about how the credit score is determined.

FICO credit scores range between 300 and 850. Generally, a score above 620 is considered desirable for obtaining a mortgage. The following factors affect your score:

credit score


1. Your payment history. Did you pay your credit obligations on time? At a minimum, mortgage lenders will look for perfect payment history over the last 12 months. Bankruptcy filing, foreclosures, liens, and collection activity also impact your history and your ability to qualify for a loan.

2. How much you owe. Owing money on credit accounts doesn’t necessarily mean you’re a high-risk borrower with a low FICO Score. However, when a high percentage of a person’s available credit is being used, this can indicate that a person is overextended, and is more likely to make late or missed payments. Mortgage lenders will also look at the amount of your monthly debt obligation compared to your income as a qualifying factor for the loan.

3. The length of your credit history. In general, a longer credit history will increase your FICO Score. Your credit scoring will factor in the average age of your credit accounts and how long it has been since you used certain accounts.

4. How much new credit you have. New credit, either installment payments or new credit cards, are considered more risky, even if you pay them promptly.

5. The types of credit you use. Generally, it is desirable to have more than one type of credit — installment loans, credit cards, and a mortgage, for example.

One note — mortgage lenders will look for you to have active credit lines in order to qualify for a mortgage loan.

Also, many people have had delinquent credit history in the past and have stayed away from establishing new credit. This often results in a lower score even though you now pay your bills on time.   In order to raise your score, you need to replace the old bad history with good payment history that is reported to the credit bureau.  

For more information on improving your credit score, visit

If you are looking to buy or sell real estate in the Chicago area real estate market, please email or call.

Millie C Lumpkin, CDPE, SFR
Keller Williams Preferred Realty
Cell:  (312) 217-5644


What Can We Expect From the Mortgage Settlement


More details are coming out about the specifics of the recent mortgage settlement .  As I wrote last week, the settlement was for $25 billion and the settlement was with five of the nation’s largest banks:  Ally Financial (GMAC), Bank of America, Citigroup, J.P. Morgan Chase and Wells Fargo.  However, excluded from this settlement are loans purchased by Fannie Mae, Freddie Mac or insured by HUD (FHA loans).  This excludes more than 50% of all mortgages. 

In the Chicago area (and especially the south side and south suburbs), a huge percentage of homes are underwater.  Foreclosures and short sales make up more than 50% of available listings in many communities.  While the mortgage settlement itself is limited in the mortgages directly involved, the changes outlined will probably flow to the greater market. .

1.   There is expected to be an acceleration in the processing of foreclosures.  There was a significant slowdown in foreclosures since the 4th quarter of 2010 while this challenge on the banks’ handling of foreclosures was being settled.  Illinois has a large shadow inventory of unreleased foreclosures so expect a much higher inventory of foreclosures in 2012.  This affects not only homes where foreclosures were fully processed but those where there was a holding pattern. 

2.   The 49 state’s attorney generals (all except Oklahoma) will have oversight over the implementation of this settlement. 

3.   Banks are encouraged to work with homeowners to provide loan modifications or short sales to struggling homeowners.  Some of the key protections for borrowers seeking loan modifications:

a.    Banks/servicers must review and make decision of completed loan modification applications within 30 days of receipt.

b.   Banks must stop practice of loan modification consideration with simultaneous foreclosure proceedings (dual track foreclosures).

c.    The bank must establish a single point of contact for each homeowner who reaches out to the bank due to difficulty making their loan payments.

4.   The short sale process for many banks is expected to be streamlined making it easier and quicker for homeowners (we’ll see).  Banks are seeing the value of short sales vs. modifications since 35-50% of loan modifications end up defaulting again.  The banks will get settlement credit for short sales. 

5.   Although some news reports are giving the impression that banks will start reducing principal balances on loans, don’t expect a lot of them. Principal reductions are one option but loan modifications are more likely.  Principal reductions would be a huge hit for banks.

The bottom line is that homeowners that are struggling should take action now.   The news media reports national trends but real estate is local.  States have different procedures for handling foreclosures and some states were never impacted as hard as other states.  Illinois has a judicial foreclosure process so it takes longer. Other states don’t.  In Illinois, banks have a right to pursue borrows for the loan deficiency remaining after foreclosure.  Other states don’t. Some states are already recovering in this crisis. Others are not.

The first step is to contact your bank and see if you are able to refinance or modify your home loan.  If you are past this point then you need an exit strategy.  Contact a realtor to get an estimate of your home’s value.  Get educated on the pros and cons of short sales vs. walking away from the mortgage (foreclosure).  Decide what’s best for your personal situation.

If you are in the Chicago or south suburbs and want advice on your situation, please contact me.  I would love to help.

For more information on the national mortgage settlement, visit .  This is the official website. 

Millie C Lumpkin, SFR
Cell: (312) 217-5644
Email Me:
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    Forget the doom and gloom, this is a GREAT time to buy”

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Feeling Stuck???

I read an article recently that stated that the economic recovery was being hampered by people unwilling to relocate for jobs.  They are unable or unwilling to sell their homes in this current market. For some, an underwater mortgage makes relocation difficult. You also have dual income households where one spouse would be forced to quit their job in an uncertain job market.  There are other reasons I’m sure but this gives some substance to news reports that speak to the number of unfilled skilled jobs.

This makes me think about what other segments of our lives might be negatively impacted by people feeling locked into their homes and unable to sell?

  • Growing families unable to move into larger homes
  • Empty nesters that would like to downsize or move into a condo where there’s less property maintenance
  • Senior citizens unable to sell their homes to be closer to their children or to enter assisted living facilities or retirement communities
  • People wanting to upgrade into something bigger or more upscale
  • People with personal relationship situations like divorce or break-ups

Unfortunately, it will take several  years for many communities to recover.  Once the bottom is established, prices are not expected to grow at levels experienced during the bubble.  That means, decisions have to be made either to sell, get comfortable where you are, etc.  Millions of foreclosures are yet to be released or processed. Prices will take further hits in many communities before the bottom is hit. 

Speak to a local realtor to find out the specifics of your situation. If you are in Chicago or the south suburbs, I would love to talk with you about your options. 

Millie C Lumpkin, SFR
Direct: (312) 217-5644
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REO / Short Sales Musings

As we move through this crazy real estate market, there are some things that you see happening over and over again that just gets you to shake your head.

The “beat the bank” game – In my local market of the Chicago south suburbs, a huge percentage of listings are either REO’s or foreclosures. Many communities have their market value significantly lower than a few years ago (not just Chicago, I know). With the REO listings, many times the listings are below market value (sometimes significantly).  There are so many times that I speak with buyer’ s agents who mention that their clients really really want this house. However, you look at their offer and its 20% below the list price. Then, shock and awe, they lose out on the house they want.  Sometimes, its just a few thousand but on a really low price, a few thousand matters.

I have one REO listing. It’s a split level home with some attractive features, good condition and currently priced well below market value after several price reductions. A buyer had submitted an offer in an earlier round and missed out to higher bid.  When the home came back on the market, they were the first to make an offer. They offered $2,000 below the list price and triggered a counter from the bank. Now, other offers have come in and there is a multiple offer scenario. If they had offered list, they would have been accepted and the buyer in the house she wanted …. $2,000! 

In working with my own buyer clients, I counsel them that the REO market is competitive. If it is an attractive home in a desirable location with a great price, expect competition.  If you want the home, make an offer that shows it.  Don’t assume that you will have the chance to increase your offer. If there are multiple offers, top price usually wins. Everyone else picks up their marbles and goes home.

To be sure, there are overpriced REO’s just like in any segment of the market.  However, the bulk of REO sales (at least in my market), tend to sell close to the listing price. Some that are originally overpriced may go through price reductions but when they sell, its usually close to the existing list price. Make sure you’re comfortable that you’re not over paying and decide what’s your personal ceiling but don’t lose out on a great deal because you’re trying to beat the bank. Making an offer to a bank or other corporation is different than working with a traditional seller.

Millie C Lumpkin, SFR
Cell: (312) 217-5644
Email Me:
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     Forget the doom and gloom, this is a GREAT time to buy”

Is Everyone Still Underwater?

Listening to the national news media, the state of the housing market is week by week either improving or still really weak.  The truth is that different markets across the country are in various stages of recovery.

The percentage of homes with negative equity (value of the home is less than the mortgage) is seen as one indicator of the health of the housing market.  Below is a map showing negative equity by state for the third quarter of 2011.   

There are 10 states most heavily impacted by “negative equity” are FL, AZ,NV, GA, IL, OH, MI, VA, ID, and RI.  These states have at least 20% of their homes under water.  Nevada, Florida and Arizona have the highest levels.

Housing is local. States have different rules for handling foreclosures.  Some are judicial and some are not. Some states had values that exploded far greater than others during the housing bubble and are now suffering more. Some had more moderate growth in values and so were not as impacted as much.

If you’re making a decision about buying or selling real estate this year, consult your local real estate professional rather than the nightly news. If you are looking to to buy or sell in Chicago or the south/southwest suburbs, I would love to work with you.  Just give me a call or email.

Millie C Lumpkin, SFR
Phone:     (312) 217-5644

Keeping Buyer Frustration Down

In some markets, the majority of homes actually selling are foreclosures.  Although the timeline for purchasing these properties is pretty similar to a traditional home purchase, there are some differences that should be considered.

  1. Work with a buyer’s agent. The listing agent for foreclosures typically has a very high inventory of homes he/she is managing. Sometimes these are smooth transactions. However, often there are glitches and you want a buyer agent who will be more invested in your purchase succeeding.
  2.  If financing your home, make sure you are familiar with the mortgage process. FHA has strict standards in regarding to property condition –peeling paint, structural damage, etc. Your realtor should be able to educate you regarding conditions in the home that might eliminate it in regards to FHA appraisal approval.
  3. Don’t cheap out on home inspections. Often, when buyers are straining their resources to purchase the home they are inclined to skip on the home inspection. Village inspections are not equal to a licensed home inspector.  Saving a few hundred now can cost you thousands in the future.
  4. Don’t cheap out on hiring your own attorney. Agents can’t give you legal advice.  The seller’s attorney won’t look out for your interests. Protect your interests and your pocket book by hiring your own attorney. 
  5. Foreclosures are not likely to be opportunities for lowball offers.  Foreclosures often have multiple offers.  The bank may not be willing to negotiate if the offer is ridiculously low—they do have the option to just reject the offer.  This is especially true if home is already priced significantly below the market value. 
  6. Be prepared for possible problems after the offer is accepted.  Closing extensions, title issues, appraisal concerns, mortgage qualification issues, municipal issues — things can get very interesting after you make your offer. 
  7. Know that contingencies are likely not to be considered. Standard contingencies like attorney review, mortgage financing and inspections are fine.  Concessions for closing costs are routinely considered.  Sale of existing real estate, repair requests (unless related to health or safety) —not so much. 
  8. Beware of tenant-occupied homes.  I have seen listings where the REO company will cede responsibility for tenant eviction to the buyer.  This can be a nightmare in some cases.

Foreclosures can be a wonderful opportunity to purchase homes that might otherwise be outside of your price point.  Like any other real estate transaction, however, this is a major financial purchase and should be treated as such.  That being said, this is a great market for buyers.

Millie C Lumpkin, SFR
Cell: (312) 217-5644
Email Me:

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     Ask Me About Buyer Downpayment Assistance Programs

     Click Here for FREE Property Search

     Forget the doom and gloom, this is a GREAT time to buy”

Help for 1st Time Homebuyers

Rent or Buy

Many of the buyers I work with are first-time home buyers. Home affordability is high at the moment.  Many renters would be surprised to see how possible it is to purchase a home for what they are paying for rent.  For many would-be homeowners, however, that initial downpayment is a hurdle.  I asked one of our lender partners, Sheila Gower of First Mortgage Corporation, to write a guest blog about one of the downpayment assistance programs available to first-time home buyers in Illinois. It should be noted that the state program defines a first-time homebuyer as, “someone who has not had an ownership interest in a principal residence at any time during the three year period prior to the date the mortgage is executed.”  You can’t have owned a home in the last three years.  A first-time homebuyer does not necessarily have to be a “first-time homebuyer”.


If you have been considering buying a home, now is the time to make your move! Housing prices and interest rates have dropped to historic lows, creating new homeownership opportunities for families across Illinois.  Furthermore, you may be eligible to buy a home with at little as $1000 using the Smart Move down payment assistance program.

Smart Move is an affordable homeownership program that addresses one of the biggest obstacles for first time buyers, meeting the upfront expenses of down payment and closing costs.  Borrowers who qualify for the Illinois Housing Development Authority’s (IHDA) 30 year fixed rate Smart Move mortgage will receive 3 % of the purchase price, up to a maximum of $6,000. Buyers are required to invest the greater of 1% or $1000 of their own money, making the amount needed similar to and in some cases less than, the costs involved in renting.

 In addition to being a first-time buyer, certain household income and purchase price limits apply and buyers are required to receive homebuyer counseling.  My company, First Mortgage Corporation, is an authorized lender offering the program.  If you would like to see if you qualify or want to receive additional information, please contact me at 708 647-5244 or     


 If you are interested in seeing if this is the time for you to take the plunge into homeownership, please contact me. It amazes me every day the choices available for those looking to find an affordable home.  I would love to work with you.

Millie C Lumpkin, SFR
Century 21 ProTeam
Phone:    (708) 213-6141

“Forget the Doom and Gloom…It’s A Great Time to Buy!”


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