Last night I was priveledged to be at the Union League Club as approximately 50 recipients of America's highest award for valor in combat, the Medal of Honor were welcomed to Chicago for the start of the 51st Annual Congressional medal of Honor Convention.
Recipients that served in WWII, Korea, an Viet Nam were in attendance. As a Viet Nam vet, it was an emotional experience. While they would not speak about the actions that resulted in their being so honored, each of their stories was included in a handout summary and available in more detail in a coffee table book (which I could not pass up).
Those that did speak either last night or in interviews in the Sunday, September 13 newspaper indicated that while they were recognized, they carry this honor for all of those who showed similar bravery, both living and dead - they all showed humilty with pride.
One notable comment when one was asked about today's hot topic - health care was that some of the older recipients of the MofH are unable to receive VA health care because they served before the health care benefit became part of today's benefits. Now isnt't this a slap in the face.
For those of you who have the opportunity, here are some of the events throughout this week.
Wednesday 9/16 - 10AM live webcast from the Pritzker Military Library (pritzkermilitarylibrary.org) 11:30 Constitution Day Ceremony at the Daley Plaza
Thursday 9/17 - 1PM pre-game ceremony honoring recipients at Wrigley Field
Beginning in January, 2009 and continuing until the marital house is sold, spouse #1 will recieve $1000 per month from spouse #2 who also pays housing costs (PITI plus utilities) of $4000 directly to mortgage servicer and utility companies. After sale of marital house, spouse #1 will receive $5000/month for more than three years. Sale of the marital home is taking place in September, 2009. Spouse #1 has no other income except as a result of the divorce and would like to move to a smaller home with the children.
Under this situation, the earliest spouse #1 could use $5000 in income to close on on new purchase would be January 2010.
Mortgage guidelines require evidence of the receipt of income for at least three months prior to closing and evidence that it will continue for at least three years after closing.
NOTICE DIVORCE ATTORNEYs
Even though it looks like a DUCK, mortgage underwriters can not use the "direct payment for the benefit of the spouse" as income to meet this guideline.
With a minor wording change, Spouse #1 could have closed September 2009.
To eliminate the lag in closing, the divorce decree wording only needs to be changed to state that Spouse #2 was responsible for housing payments (PITI + utilities) until the house was sold and she would receive $5000 per month until that time and thereafter for more than three years. While there is some risk to Spouse #2 that Spouse will choose not to pay the mortgage payment, Spouse #2 can check on-line to make sure that timely payment is made and make the payment and readjust the method of paying Spouse #1 in future months. I'm sure the attorneys can eliminate this risk.
Same message, same cash flows but the underwriter is protected - isn't that what it is all about????
Current guidelines make it very difficult for condo financing. There are however options that may be overlooked.
1) New Construction - it may be that the developer continues to have a construction loan in place. If so, current financing guidelines may make it impossible to sell units with anything other than a cash offer. An alternative would be that consturction lender look longer term and offer buyers creative financing so that the developer is able to sell enough units to allow for FHA, FNMA or Freddie Mac finaning in the future. I have seen some cases where 5/1 and 7/1 ARMs are being offered using this approach. While the lender continues to hold approximately the same amount of debt, the diversification and "look to the future" is in everyones best interest.
2) Existing Condos - some portfolio lenders continue to offer financing for up to 55% loan to value (45% down payment) on 5/1 and 7/1 ARMS with very low interest rates. If you have clients that are downsizing but can not do a cash offer, look for this type of financing option.
Don't miss a mortgage payment - make sure you take action to verify this information with TBW and your new servicer. You should receive a good bye letter from TBW and a welcome letter from your new servicer. If not, make a call. There have been scams in the past where a dummy PO box is used to collect payments that then disappeared leaving borrowers with delinquent payments and trashed credit scores. Beware.
Just Released Info on Taylor Bean and Whitaker
Posted by Julie St. Jean
We just received this information from TBW. You probably will have clients that are affected. We had released the attached information last week for what to do with an FHA or Ginnie Mae loan.
NOTICE TO HOME MORTGAGE CUSTOMERS
AT THIS TIME, TAYLOR, BEAN & WHITAKER MORTGAGE CORP. ("TBW") IS UNABLE TO EITHER OFFER AN ONLINE PAYMENT OPTION OR AUTOMATIC PAYMENT DEDUCTIONS FOR ITS HOME MORTGAGE CUSTOMERS. PLEASE NOTE THAT NO AUTOMATIC DEBIT PAYMENTS HAVE BEEN MADE SINCE AUGUST 10, 2009. MOREOVER, TBW IS NO LONGER SERVICING GINNIE MAE AND FREDDIE MAC LOANS.
FOR HOME MORTGAGE CUSTOMERS WITH A GINNIE MAE LOAN, YOUR LOAN WILL NOW BE SERVICED BY BANK OF AMERICA. BANK OF AMERICA CAN BE REACHED AT 1-800-669-6607. PAYMENTS SHOULD BE SENT TO:
BANK OF AMERICA HOME LOANS, LP PAYMENT PROCESSING P.O. BOX 10334 VAN NUYS, CA 91410-0334
FOR HOME MORTGAGE CUSTOMERS WITH A FREDDIE MAC LOAN, YOUR LOAN WILL NOW BE SERVICED BY ONE OF THE FOLLOWING SERVICERS:
IF YOUR LOAN IS CURRENT, YOUR SERVICER WILL BE CENLAR. CENLAR CAN BE REACHED AT 1-866-430-9689.
IF YOUR LOAN IS NOT CURRENT, YOUR SERVICER WILL EITHER BE SAXON OR OCWEN. SAXON CAN BE REACHED AT 1-888-422-6451. OCWEN CAN BE REACHED AT 1-800-74-OCWEN.
FOR ALL OTHER HOME MORTGAGE CUSTOMERS, PLEASE MAIL YOUR PAYMENT TO THE FOLLOWING ADDRESS:
IT IS IMPORTANT FOR ALL CONSUMERS THAT YOUR LOAN NUMBER IS WRITTEN ON YOUR CHECK AND THAT YOU INCLUDE ANY SPECIAL PAYMENT INSTRUCTIONS SUCH AS ADDITIONAL PAYMENTS TO PRINCIPAL OR ESCROW. USE YOUR TBW LOAN NUMBER UNTIL YOU RECEIVE A NEW LOAN NUMBER FROM YOUR NEW SERVICER.
FOR QUESTIONS ABOUT YOUR FHA-INSURED LOAN, CONTACT FHA'S RESOURCE CENTER AT 1-800-CALL-FHA.
FOR QUESTIONS ABOUT YOUR FREDDIE MAC LOAN, GO TO THE FREDDIE MAC WEBSITE AT WWW.FREDDIEMAC.COM OR CONTACT FREDDIE MAC'S HEADQUARTERS AT (703) 903-2000.
FOR OTHER QUESTIONS, PLEASE CONTACT TBW AT 1-888-225-2164 OR 1-800-530-2602.
It is amazing how some people and organizations continue to give lip service to the notion that "service released premiums" are incentives to steer consumers to their detriment. THIS IS WRONG AND ANYONE WHO UNDERSTANDS THE SYSTEM WOULD KNOW THIS! As a mortgage broker, I am required to disclose the fee(SRP) that will be paid to me for delivering a specific loan to the end investor. If I was a mortgage banker, or a bank, I could offer the exact same loan to the same client and this fee (probably larger than the fee that would be paid to the broker) would not be disclosed to the consumer. Does that mean that the bank does not receive compensation for the loan? Of course not.
Most banks operate as mortgage brokers but avoid the disclosure requirement because they are banks.
The APR, note rate and closing costs that are disclosed on the Truth in Lending and Good Faith Estimate are the consumers best source to compare loans programs being offered. Because the lenders have the option to use a service released premium to "buy a loan" from a mortgage broker, the consumer is able to better compare the package offered by a mortgage broker and the package offered by a bank. I believe that the pressure to eliminate the use of service released premiums is an effort by the banks to use their lobbying power to eliminate the mortgage broker competition, not an effort to help the consumer. Over the 25+ years that I have been a mortgage broker, my business has grown because my clients are smart enough to realize a good and fair deal. They come back and refer their friends and family. They are not stupid. They choose not to go to a bank and be forced to take it or leave it. They prefer to deal with someone that is only successful if they do it right.
I guess if I had the advertising budget that some of the banks have (thanks to the bail-out), I would do what I could to undermine my competition....or maybe, if I was smart, I should look at my business model and try to do it better and not unfairly change the rules to kill the competition. Of course the legislators don't have time to really understand the system that they are trying to regulate out of business.
Everyone is an expert. Interest rates are moving - up? down? sideways? So much depends on who you ask. I recently spoke with a client who told me that someone he works with said rates dropped. He asked how much and was told at least 1 percent. My client was excited because he had been quoted 6% and was looking forward to hearing from me that his new rate was 5%. When I told him it wasn't, he was upset.
"Water Cooler" mortgage rate quotes are given by the uninformed to the unknowing and most importantly without the facts. Since the unwinding of the mortgage mess, FICO scores (640), purpose (cash out), type of property (2-4 unit), lock period (45 days) impact the final interest rate/fee package more than ever before. Many of those attempting to obtain financing were refinancing or purchasing during the "go-go" low-doc, who cares mortgage period. I showed him a detailed rate quote to support my comments.
I suggested that he obtain a copy of either the Good Faith estimate or the closing statement from the Water Cooler expert so we can compare. I also asked him to see if he could find out the borrower's credit score, the type of property being financed as well as if it was a cash out refinance, and what the loan to value was if it was a refianance. The good faith or closing statement would answer those questions if it was a purchase.
While I was surprised when he told me that his research showed that the other guy's profile was similar to his, my review of the good faith estimate showed that the client was being charged points. I was not and the bottom line was that the rate didn't change but the points and fees dropped and I had already reduced my clients fees by over 1%.
Usually, when the facts are presented, the differences can be explained and clients feel better about the package that they are being offered. Now the satisfied and educated client is ready for the next "Water Cooler" session.
If only those that increase taxes would be accountable and pay their taxes. A recent article in the Wall Street Journal points out that the Chairman of the Houes Ways and Means committee, Representative Charles Rangel has been causual about his tax liability for years. Read the article at http://online.wsj.com/article/SB10001424052970203946904574300013592601036.htm.
No wonder taxes must go up, there is no effort to make sure our legislators pay there share.
Do you think this qualifies Charlie to be nominated by Obama to fill a cabinet seat?
Andrew Cuomo, in his quest to become Senator has settled for KING by putting the HVCC system in place. He didn't care about consumers. He didn't care about small business. He didn't care about punishing the criminals. All he wanted was publicity and he continues to get that - and perhaps the expectation of contributions to his future election from those that are making the big bucks from this system? The American Way!
Here are another two examples of problems this "independent appraisal system" has created.
1) Appraisal in January 2009 = $600,000. Same property appraised six months later for $470,000. When the first appraisal was completed, the lender wented to the MLS, found a lower value sale and asked the appraiser why the sale was excluded in determining value. The appraiser showed evidence that the lower sale was >75 years old and basically had not been updated. The subject had been updated to the tune of $250,000 with plumbing, electrical, kitchen and bathes being brought up to code and today's life style. The lender was satified and accepted the $600,000 appriasal. When the new appraisal was prepared that same low value sale was used as a comparable contributing to a 22% value reduction in one of the most stable areas in the Northwest side of Chicago. No adjustment was made and there is no effective way to challenge the $410 appraisal. Too bad - so sad!
2) Appraisal was ordered and completed in a timely basis. Estate sale, priced to move quickly, as is. This time the appraiser came in at the purchase price even though the buyer is confident that they got a steal. Isn't amazing how the appraiser came in at the price he needed for a buy-sell? Now the problem. The appraiser put down an incomplete address. This was noticed on July 14 and now 7 days later, the lender is still trying to get the appraiser to correct the appraisal. No change in value, no change in adjustments, just get the address right. Count down to closing - 4 days. Wish me luck.
You can bet that the appraisers that I used in the past would have done the research to provide a more accurate value in #1 - probable a value drop of < 10% and would have made the address change within the hour.
Hope you are having a better day than I am. And I hope Andrew Cuomo is not Italian.
Yesterday OBAMA said that the stimulus package was working! The reason that was given is that the new claims for unemployment was down. After giving that some serious analytical thought (maybe 10 seconds), I found that I was getting dizzy from the SPIN. Here is why I don't see it that way.
Consider a company that once had 1000 employees. As they viewed their future, they are forced to cut back hours and product lines and put on a hiring freeze. As a result, they cut back 300 jobs(30%x 1000). Next, they realize that business is still bad, they close manufacturing plants, other product lines, consolidate jobs, start using unpaid days off and cut back another 300 jobs(43% x 700) leaving their workforce at 400. Finally, they are forced to lay off 250 (62.5% x 400) - all except those essential to providing security, those that are used to moth ball the manufacturing plants and those that will file for bankruptcy. In two months 125 (83% x 150) will be released.
But the stimulus is working! The number that filed for unemployment benefits this week (250) was down from last week (300) and in two months, the number filing will be only 125 - half of this week! Obama signs of success!
Will the last one with a job please turn out the lights!
LESSON #2
Does anyone really believe that if the Treasury floods the market with debt to buy Mortgage Backed Securities then the mortgage rates will drop?
If you do, please look at the mortgage rates. Buyers of MBS will only buy those securities if the return makes sense (higher than treasuries). As the treasury increases the supply of treasury securities, the yield must go up to balance the demand. With the yield on treasuries going up, the yield on MBS must go up to get investors other than the FED to buy them. Many of us learned this DAY 1 in economics class.
Will the constitutional lawyer please not insult us any more with SPIN - Do you think he actually believes what he is dumping on us?
Trouble making your mortgage payment? Lost your job? Payment going up? Banks keep passing you from idiot to idiot - no one seems to care? No modification is being offered?
Well, there is a solution! A new movie is coming out May 29 that answers the question "what can a homeowner do?" when they have trouble making their mortgage payments. Cordell Eddings from Bloomberg, included comments from yours truely and other mortgage industry experts in his review. This review can be viewed at
For those of you that have read my blog in the past, you probably can guess that several of my comments during a half hour phone call ended up on the edit room floor (thanks Sharon Lynch). I guess after 25 years as a mortgage broker, I am finally considered an "expert witness". See the last paragraph of Cordell's review.
Why overpay for a home by overpaying for a mortgage? We put education at the top of the list for homebuyers & prepare them to get the right mortgage the first time and every time. Check our website at www.resourceplusmortgage.com for helpful information
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
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