There are several real estate agents I follow on Twitter.  Some tend to get a bit self important when they constantly post everywhere they go using loopt or yfrog or foursquare, but they also link to interesting blog posts they’ve written or provide funny updates.

I tried to run a hash-tag (run a search for a subject with the pound sign in front of it - e.g., #mortgage) for mortgage companies to see what came up and my twitter account blew up with hungry lenders.  Lenders write about mortgage rates, loan modifications, short sales, who has plead guilty on loan fraud, federal actions, available tax credits, and much much more.  And then within a five minute period, 63 NEW tweets showed up under the #mortgage search criteria.

It makes me realize that lenders have fully integrated into the social media outlets to find new customers.  Most of the article links were to static web pages that showed things like “Three Steps to Loan Modification” or “(Name a State) Mortgage Refinance.” A lot just provided links to news articles that mention mortgages.  I wonder how many are automated … they’re throwing out the fishing lines to see if they can hook someone.

That’s why I always encourage people to go with word-of-mouth when finding a real estate agent or a lender or a plumber or a doctor.  These are the people who’ve actually had experience with the professionals and you’re more likely to know what you’re getting ahead of time.

Once you are ready to pick a lender, ask for a good faith estimate.  Then ask another lender for hers/his.  Look it over and ask lots of questions.  See who you feel comfortable with, see who is able to answer your questions, and pick the person who offers the best rates with the fewest “junk” fees (which should show up on the GFE).

Homeowners seeking help in modifying their home loans to more affordable payments are painfully aware of how slow the process is, and the federal government has taken notice.

The Department of Housing and Urban Development is making it easier for eligible homeowners currently in trial modifications to move into permanent modification status through a simple, straightforward paperwork documentation process.  According to HUD,

Over 900,000 Americans have begun trial modifications since the program’s inception and over 110,000 have been approved for permanent modifications as of December 31, 2009. The median monthly savings for individual homeowners is more than $500 per month.

The new guidelines also make it easier for people who are current on their mortgage payments to become eligible for a loan modification.  The eligibility is for a monthly payment to not exceed 31 percent of the monthly income.

In other news, the Shakadoo family wants to extend our appreciation to longtime writer Miranda Marquit.  Miranda has left the Shak family after providing wonderful stories, information, and news updates on the Loan Shak and Work Shak sites for several years.  We’ll miss you, but offer our best wishes for a happy, successful future.

The housing market continues to struggle as home prices fall and mortgage applications drop. The Market Composite Index, which measures the volume of mortgage applications each week, dropped this past week. One of the biggest reasons is the fact that the refinancing portion of the index dropped.

Apparently, even though mortgage rates are low, people are reluctant to refinance their homes. This is causing mortgage applications to drop. Perhaps some are waiting to see if mortgage interest rates will drop back below 5%, since mortgage rates rose last week. Another issue is that home values have not been rising, and do get the 80% loan to value ration that many mortgage lenders are asking for is difficult.

Those with mortgages serviced by Fannie Mae or Freddie Mac, though, can take advantage of a refinance program from the government that allows a 125% LTV.

With signs of economic recovery showing, there are concerns that inflation could come with economic growth. This is a common thought, since economic growth often means that prices rise as well, eroding the purchasing power of the dollar. And, indeed, an economist at RBS Securities Inc. believes that inflation is on the way, reports BusinessWeek:

“Inflation will start to tick up again as we get stronger growth,” Stanley said today in an interview on Bloomberg Radio. “I don’t think the Fed is ready to own up to that.”

As a result, there are some expectations that the Fed will have no choice but to raise interest rates in order to combat inflation. It is possible that the Fed will raise rates to 3% by the end of 2010, from their current rate at between 0% and 0.25%.

For savers, this is good news, since it means that they will see a higher yield on their cash investments. For borrowers, though, it means that they will have to pay more in interest charges. If you have a variable mortgage rate, it might be time to refinance. If you have credit card debt, it is best to pay down as much as you can before rates move even higher than they already are.

In these times, where economic uncertainty remains even as some evidence of improvement has appeared, many people are wondering whether or not bankruptcy is the answer. In some cases, there really is nothing left that can be done. In other cases, though, there are still steps that can be taken to avoid bankruptcy. Before you make the decision, though, it is a good idea to understand these 3 bankruptcy myths:

1. All of your debts will be cleared

Many people think that bankruptcy is a “get out of debt free” card, allowing them to zero out their debt. However, it doesn’t exactly work that way. Some debt is not eligible for being cleared under bankruptcy, and in some cases you will have to repay at least a portion of what you owe.

2. You will lose your home

It is only in the rarest of cases that a person loses his or her home as a result of bankruptcy. In most cases, you cannot be ordered to sell your home to pay your debts. However, if you have stopped making your mortgage payments, your lender can foreclose on your home. But that is something different.

3. You can’t get credit after a bankruptcy

Many people believe that once they declare bankruptcy, they will not get credit in the future. While they may have a tougher time, the fact is that it doesn’t mean you won’t get credit. You will have to rebuild your history, and bankruptcy will remain for 7 - 10 years, but if you work hard to rebuild your credit, you can usually buy a home within 3 - 4 years after a bankruptcy.

It is also worth noting that you cannot be fired due to your bankruptcy. So, before you decide for or against bankruptcy, consult a professional, and consider whether or not one of these myths is influencing your decision.

No, the mortgage market hasn’t completely recovered. However, mortgage applications are on the rise again, and lenders are starting to take a few more chances. Some are starting to offer teaser rates again. These low interest rates make it possible for you to initially be approved for a loan, and then a few years down the road the rate resets, and you have a higher payment.

This isn’t just happening with new home mortgage loans; it is also becoming popular again with mortgage refinancing. You can refinance to a low, low interest rates for around five years, and then rate increases at that time. If you can’t refinance again, then you are in trouble as the rate resets and you pay a new, higher interest rate.

So, before you agree to such a loan, it is a good idea double check your finances. Make sure you can afford the mortgage payment amount for after the reset. It’s a nice thought that you will earn more money by then, but as many are finding out right now, that doesn’t always work out. So base your mortgage decisions, from buying a new home to getting a refinance, on what you can comfortably afford now.

It’s tax time, and you probably know that you can deduct your mortgage interest on your taxes. However, it’s not just your mortgage interest. There are other deductions related to having a mortgage and having a home. Here are some of the deductions to avoid overlooking as you start getting into gear for tax season:

* Points paid this year for a home mortgage to reduce the interest rate.

* PMI.

* Property taxes.

* Green home improvements.

There are plenty of opportunities to reduce your tax liability. Think about what you have done with your home this year, and consider what might be eligible. If you have a question about what is eligible, and how you can take your tax deduction, you should contact a tax professional or the IRS.

Lately, mortgage rates have been rather volatile, changing rapidly and making things difficult for mortgage rate shoppers. However, some of the volatility has smoothed out quite a bit — even just from October to November. It looks as though things might be a little more stable going forward. The Mortgage Reports blog offers this about mortgage rate stability:

Until jobs returns, or until news convinces investors otherwise, mortgage rates should remain somewhat stable. This isn’t to say that rates won’t rise, but if they do, you won’t have to get frantic about it.  You’ll have an hour or two to get your rate lock in.

Two months ago, that wouldn’t have been the case — you’d have had 8 minutes.

This means that holding out for a mortgage rate might not be the best strategy. But you will have some time to think it over before you commit yourself.

One of the issues surrounding foreclosure prevention programs offered by the government is the fact that these programs are voluntary for mortgage lenders. Which means many mortgage lenders just aren’t participating — or they’re making things difficult. As a result, the Obama Administration is increasing the pressure on mortgage lenders.

The Administration plans to require loan servicers to report on how they plan to reach a decision on loan modification applications they receive. Communication with borrowers will also be scrutinized. Failure to comply could mean sanctions and/or penalties. Also, the Obama Administration is working to provide more information to borrowers so that they better understand the loan modification process, especially as it relates to permanent modifications. CNN Money reports on complaints from borrowers:

A growing number of borrowers are complaining that they are stuck in trial modifications. Some 650,000 homeowners are currently in this preliminary phase, but only a small fraction have received permanent assistance. …

Borrowers that qualify for long-term modifications can keep making the lower payments for five years. At that point, the interest rate will be set at the rate at the time of the adjustment, currently about 5%.

Loan servicers, however, say they are having trouble getting the necessary documents from borrowers, while homeowners maintain that their financial institutions are repeatedly losing the paperwork.

You can see where things are getting out of hand. But will pressure from the president help streamline the process?

Mortgage applications are on the rise again. It is quite likely that the fact that Congress extended the first time home buyer tax credit probably contributed in part to the change. However, refinancing has also gone up quite a bit. The Atlanta Business Chronicle reports on the latest mortgage applications data:

The Mortgage Bankers Association’s Market Composite Index, a measure of mortgage loan application volume, increased 3.2 percent on a seasonally adjusted basis from a week earlier.

The Refinance Index increased 11.3 percent from the previous week.

The refinance share of mortgage activity increased to 71.5 percent of total applications from 66.1 percent the previous week, the highest share since May.

Clearly, right now, even with the tax credit, refinancing is the bigger focus. No wonder JPMorgan Chase is getting ready to hire 1,200 new mortgage loan officers.