Trinity: 'Soundest investment you can make' [The Decatur Daily, Ala.]

By Ronnie Thomas, The Decatur Daily, Ala.
McClatchy-Tribune Information Services

Dec. 19--Like the Somerville and Priceville areas of Morgan County, Trinity's residential housing market is growing.

Realtor Leighann Turner of RE/MAX believes the reason is that people want to be closer to the industries near Trinity.

She also believes U.S. Department of Agriculture Rural Development Loans have fueled growth in Priceville, Trinity and Somerville.

"Most people didn't know about the program, which has gained in popularity the last couple of years," she said. "They are zero down payment with low private mortgage insurance. Until two months ago, there was no PMI at all. Now it is still much less than any other mortgage."

Turner said area residents have been fortunate compared to surrounding states and larger markets.

"I think it's because of our industries," she said. "Our real estate is still the soundest investment you can make."

Kent Hollingsworth developed Mountain Cove subdivision off Mountain Home Road in Trinity and has 16 of 44 lots left in the subdivision. He said he has finished 17 homes.

Hollingsworth said a lot of Lawrence County residents are moving into Mountain Cove.

Trinity Mayor Vaughn Goodwin is excited about his town's future.

"We think we're going to start seeing more movement in residential building in the spring," he said.

Two other older subdivisions along Mountain Home Road, Blakely Estates and Hidden Creek, offer opportunities for homeowners.

Jason Owens continues to build in Stone Village beside West Morgan Elementary School on Old Alabama 24, and lots are available in Greenway Place at Ghost Hill and South Greenway drives.

In addition to residential building in Trinity, Goodwin has another reason to be positive.

"We just got our first walk-in, sit-down restaurant since Mountain Top Cafe on Old Alabama 24 closed years ago," he said.

Dirt Road BBQ opened last week in a seven-business strip mall on Gordon Terry Parkway.

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(c)2011 The Decatur Daily (Decatur, Ala.)

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How To Avoid Mortgage Insurance?

Avoiding mortgage insurance is not always an easy thing to do, especially if the borrower is financially strapped. However, it can be done. What exactly is mortgage insurance? There is several mortgage-related insurance—mortgage protection insurance and private mortgage insurance (PMIs), to name a few. However, we will only be elaborating on PMIs when we use the term “mortgage insurance.” Mortgage insurance is therefore an insurance coverage that is required on the mortgage of a borrower who is putting less than a 20% down payment toward the purchasing price of a home.

Therefore to avoid paying mortgage insurance, a borrower must put down 20% or more toward the cost of the property. There are lots of other ways to avoid paying mortgage insurance, though. Another way to side step the extra expense is by taking out a second loan, sometimes called a piggyback loan or second mortgage that closes simultaneously with the first mortgage. The second loan can normally be a home equity loan or a home equity line of credit provided by the lender or lending institution.

By paying a little extra each month toward the mortgage payment, one can dramatically reduce the principal of the loan faster, which will facilitate the removal of mortgage insurance if one was used in attaining the mortgage in the first place. When 20% or more of the mortgage has been paid, a borrower with mortgage insurance can contact the lender of the mortgage and request a removal of the mortgage insurance. By law, the lender is required to remove the mortgage insurance when requested by the borrower, providing that 20% or more of the mortgage is paid.

Refinancing a home loan with a lender who does not require mortgage insurance can also help a homeowner do away with or remove mortgage insurance from a mortgage. People with good credit can ask their lenders to exempt them from paying mortgage insurance. Most banks are willing to work out deals with borrowers who have excellent credit because it makes good business sense. People with good credit are less likely to default on loans and are less risky for banks or other creditors. So lenders will be more apt to take a chance on credit worthy people and will be more than willing to wave the mortgage insurance requirement.

To conclude, avoiding mortgage insurance is not the easiest thing to do, especially when there is a limited in available funds. Banks and other lenders usually require borrowers to pay mortgage insurance when the down payment is less than 20% of the purchasing price of the home. However, there are many ways to get around paying mortgage insurance. Paying more than 20% down toward the purchasing price of the home and paying extra on the mortgage each month, so the principal can be paid down quickly are some of the ways people avoid paying mortgage insurance.

Analysts see fragmented mortgage insurance industry

The struggling private mortgage insurance industry is more fragmented than ever, as companies grapple with elevated levels of underwater mortgages and loan delinquencies, according to one equities research firm.

The Bedford Report released its latest outlook for The PMI Group (PMI: 0.21 0.00%) and MGIC Investment Corp. (MTG: 2.37 0.00%) this week.

The analysts who wrote the report are bullish on MGIC, despite the stock being down about 75% this year. The outlook stems from the company's main operating unit writing more new insurance in August, while the number of bad loans under MGIC's roof fell from July.

The analysts maintain a bearish outlook for The PMI Group, which was pulled under the umbrella of the Arizona Department of Insurance last month and forced to stop writing new business. The company also faces possible delisting from the New York Stock Exchange because its stock price has traded at less than $1 for more than a month.

Analysts last month suggested PMI's struggles could boost the market share of other mortgage insurers in the near-term.

Private mortgage insurers represented by the Mortgage Insurance Companies of America wrote $4.9 billion in new business in July even as some companies struggled with falling stock prices and uncertainty about liquidity levels.

The Bedford Report analysts report the trade group said the private mortgage insurance industry has raised more than $8 billion in new capital since the beginning of the credit crisis a few years ago, "which is a testament of investor confidence in the industry's ongoing role in the marketplace."