Angelo 's Blog

Economic solution - eliminate the problem

Thu, 04 Dec 2008 13:18:50 -0600

As we hear the latest layoff news, has anyone asked why we still have not seen any layoffsnotices coming from Congress? With the internet efficiencies, I would think tht cutting back our representation to one Senator per state and half the number of Congressmen would cut significant costs from our budget.
Think of the number of staff that would cut and the number of local offices that would no longer be needed. After all, does anyone believe that the survivors would not do just as good a job at twice the nmber are doing today.

Now we should not let the individual states off the hook either. Cut the bodies that were incharge and don't replace them.

I know, their jobs are critical. __ _ _ _ _ _ _ _! Fill in the blanks and have a great day!

Low mortgage rates are not enough

Thu, 04 Dec 2008 13:06:54 -0600

As a mortgage broker, I am frustrated with all the bailouts being offered to the companies that contributed to our economic crisis. I am frustrated because those that can are ignoring an opportunity to help homeowners.

If a homeowner had an FHA loan, they could refinance to a lower rate without an appraisal - Streamline Refinance. This provision required that the homeowner was current on their mortgage and had made their payments on time for the last 12 months.

Why not allow Fannie Mae and Freddie Mac create a similar program. This would make today's lower rates available to those homeowners that have lost equity but still want to stay in their homes. If critical, a provision could be included that the homeowner would have to pay a fee if they sold/refinanced their home during the next two years and that only one Streamline refinance was available to a homeowner.

It seems too easy but you can bet that it will not happen. Not enough $-00000000's to get anyone's attention.

This proposal will probably receive the same attention to my earlier post - Banks not helping homeowners enough.

Have a great day!

Loan Modifications in Illinois - Attorney General lawsuits

Tue, 18 Nov 2008 14:57:38 -0600

November 18, 2008 at 12:38 PM |

If you have not noticed, loan modification companies are now on almost every corner. They are also the latest target of Illinois Attorney General Lisa Madigan. She is warning homeowners about companies that are offering to help them save their homes by negotiating a lower mortgage payment for them.

Today, her office announced seven new lawsuits against businesses that she believes offered false hope to homeowners trying to keep their homes. (Actually, the problem is that they collected an up-fee before they did anything of value which is illegal for mortgage "rescue" companies in Illinois.) She's now filed 22 lawsuits against such companies.

> As soon as I have the list, I will add it to this blog. SEE LIST BELOW IN THE COMMENT SECTION.

She suggests that homeowners contact their lenders, HUD certified housing counelors, other "free agencies" or her office for help.

While those suggestions make sense and should be the first steps that homeowners take, some homebuyers will still pay a fee to have someone else do the work for them. I guess this is another case where the State decides it is better to shut down a service rather than provide enforcable guidelines that will let companies help clients for a reasonable fee.

Why choose Private Mortgage Insurance?

Tue, 28 Oct 2008 16:17:33 -0500

The operative word is "insurance". Refer to my earlier blogs for more details - Greedy Banks and Frozen Equity Lines.

In the past, having less than 20% down gave you two options. PMIor a second/equity line of credit. The majority of the home buyers choose the equity line of credit for the flexibility and lower cash flow (interest only minimum payment) needs. Now we see that the equity line alternative has some hidden traps.

In my earlier blog, I commented that banks are freezing equity lines of credit by taking advantage of some fine print that allows them to re-evaluate home values and adjust the line based on this value. In many cases, equity lines were initially paid down by using savings that was being held for emergencies, or accumulated for college, under the belief that they can always write a check from the line when needed. When the banks started freezing their loan balances, the emergency/college fund was no longer available.

Now the decision to use an equity line of credit has to be evaluated purely based upon the pay-off expectations. No longer is it a safe place to keep funds for the future. Now, it seems that the fixed payment second mortgage or PMI are your safer choices. Unfortunately, banks are backing away from offering second mortgages and refusing to subordinate this second if you have the opportunity to refinance the 80% loan in the future - see my GREEDY BANK blog posting.

Bottom line, the PMI selection may be your best choice. Many of my clients now are deciding to take PMI rather than take the second mortgage or equity line with he expectation that down the road, appreciated home values and lower interest rates will allow them to refinance the package and drop PMI.

Well we can hope. Have a great day!

Real Estate Taxes in Lake County IL

Tue, 28 Oct 2008 15:20:58 -0500

Last week I visited with the Lake County Board of Review. It was a 15 minutes time slot that reminded me of how it felt when I was asking my father to borrow the car. The assessor's web site identifies comparables. They pick those that favor their positon, I pick those that support my position. Guess what? They win. I also tried to present comparables that supported the fact that even if my home and others in the development were determined to be taxed consistently within the development, our development was being taxed too high relative to other developments in the township. I explained how I made my selection and felt that I was playing by their rules yet they seemed to be changing the rules during the meeting if they were not going to accept my comparables. I guess they did not want to hear someone question the system.

While the assessor was professional, the board seemed to be exhausted from days of 15 minute pleadings and seemed to shut off listening. They were quick to say "this meeting is over" - thanks dad.

Next step - spend time preparing for a presentation at the state level. Before long you will be able to place an "over/under" bet in Las Vegas on our final results. Wish us luck!

BANKS REFUSE TO HELP HOMEOWNERS

Wed, 08 Oct 2008 15:07:09 -0500

BANKS REFUSE TO HELP HOMEOWNERS!

GREED again hurting the housing market

If it doesn't cost the bank and doesn't increase their risk, then why are the banks refusing to help the housing industry?

Market conditions are beginning to offer many homeowners an opportunity to refinance their first mortgage to a lower payment or safer mortgage loan. For those that have a second mortgage or home equity line of credit, the lender in the second position must agree to subordinate (stay in second place) to the new first mortgage.

If this were to happen, the homeowner would have a lower first mortgage payment making it easier for them to afford their home and most agree that the risk to the second mortgage holder would be reduced.

This should be a WIN! WIN! But it isn't.

Agreeing to subordinate is currently optional! In most cases, the second mortgage lender refuses to subordinate. They want out! They want to force the homeowner to pay them off! If the homeowner cannot obtain a new second mortgage or pay the mortgage off with savings, the bank refuses to help and the homeowner continues to pay a higher payment on their old mortgage. The bank says no one can make us help - too bad!

My suggestion -

Force the banks that depend on the Treasury, Fed or State for their charter to subordinate second mortgage loans and equity lines of credit if the new first mortgage improves the homeowner's financial position.

The replacement loan would have to meet certain conditions.

1) If the current first is a fixed rate loan, then the new loan balance should be no higher than the current principal balance and also be a fixed rate loan resulting in a lower monthly payment.

2) If the current first mortgage is an ARM then the new loan must again have a balance that is no higher than the existing loan and either be:

A) A fixed rate loan with a lower payment than the ARM has or is expected to have within the next 6 months.

B) An ARM that results in a lower payment than the ARM has currently or is scheduled to have within the next 6 months (calculated at the current index value plus margin).

If the new loan is an interest only loan, then the term must be at least 5 years and may not have the potential for negative amortization.

NO appraisal, NO credit report, and NO ncome documentation should be required by the second mortgage lender because the objective is to maintain or reduce the risk due to the first mortgage with all other things affecting the risk of the transaction remaining the same.

Is there a politician or journalist out there that cares? Please contact me if you have questions or need some hard facts.

Have a great day!

ILLINOIS | MORTGAGE BROKERS SUSPENSIONS & REVOCATIONS | SEPTEMBER 2008

Mon, 29 Sep 2008 12:09:24 -0500

IDFPR COMPANY FINES, REVOCATIONS AND SUSPENSIONS

September 2008

1) UAM CORPORATION, Irvine, CA, License No. MB.6759328 was fined $5000.00 for using unregistered loan officers

2) BRINKMAN MORTGAGE GROUP, INC. , Hickory Hills, IL, License No. MB.6759195. was revoked for failure to comply with regulations of Illinois Licensing Act.

3) CARTERET MORTGAGE CORPORATION, Centerville, VA, License No. MB.0005435, license was revoked for failure to comply with License Surrender requirements.

4) EXPERIENCED MORTGAGE PROFESSIONALS, OF ILLINOIS, INC. Wood River, IL, License No. MB.0006730, license was revoked for failure to comply with License Surrender procedures.

5) FIRST STAR FINANCIAL CORPORATION, Schaumburg, IL, License No. MB.6759248 was fined for $500.00 for advertising violation

6) LENDING SERVICES, INC., Norridge, IL, License No. MB.0006973, license was revoked for violations of the licensing act and using unregistered loan officers.

7) PATRIOT MORTGAGE COMPANY, Warrenville, IL, License No. MB.0005981, was fined was $500.00 for exam violations

8) REGAL MORTGAGE, INC., Lisle, IL 60532, License No. MB.0000997, license was revoked for violations of the Licensing Act.

9) WESTLAKE MORTGAGE CORPORATION, Chicago, License No. MB.6759266, license was revoked for license surrender procedures.

10) BEST MORTGAGE SERVICES, INC., South Elgin, IL, License No. MB.0006821, license was revoked for violations and possible fraudulent practices.

Mortgage law updates - APPRAISALS and NO-Doc loans

Fri, 26 Sep 2008 14:00:55 -0500

APPRAISAL NEWS - Last night I watched C-Span and Director of Federal Housing Finance Agency James Lockhart responded to a question as follows: "the appraisal agreement(restricting mortgage brokers from ordering appraisals) is being reviewed and implementation of the resulting policy will be delayed several months beyond January 1, 2009."

There is still some hope that the mortgage brokers will still be able to offer better and faster turnaround.

NO-Doc NEWS - Rep Brad Sherman suggested that "no doc loans at best are taken by people that cheat on their taxes and since Fannie and Freddie are more closely a part of the federal government, they should not be rewarding a tax cheater."

While his perception is partially correct, it appears that the "baby is being tossed out with the bath water".

Guess no-doc is still dead in the (bath) water.

Have a Great Weekend!

SKI JUMPING ON GRASS

Thu, 18 Sep 2008 12:16:31 -0500

If you are looking for something new and exciting to do this weedind, take the kids to see the ski jumping (and more) in Fox River Grove ( September 20 and 21). Check out www.norgeskiclub.com for details and directions. Get there early(1 PM Saturday, Noon Sunday) and see the top ski jumpers of the nation compete for points used to qualify for the US Olympic team. Best of all, you will not be standing in snow and freezing. Instead enjoy great food, beverage, and a bonfire. Pleanty of Photo OPS so bring your camera! See you there!

Lake Country Real Estate Tax Protest

Thu, 18 Sep 2008 11:30:05 -0500

I recently received notice of a 21% increase in my Lake County IL 2008 real estate tax assessed valuation. In 2007, I along with many of my neighbors, were facing a similar increase and protested to the Lake County Board of Review. They agreed with our position and rolled back the 2007 increase. Now, with a year to do their homework and modify their mechanics, the assessor's office found a way to increase the assessment again. This time, we have the ability to protest in another way and that is "MATTER OF LAW". The following is the meat of our protest and I thought some of you might appreciate the sections that are copied below. Wish us luck!

The Lake County Board of Review rules for 2008 set forth a set of "reasonable rules for the guidance of persons doing business with the Board and for the orderly dispatch of business." The rules include an Appeals Based upon Matters of Law, which states:

"Prior Board of Review Decisions. Owner occupied residential property assessment appeals based up on prior year Board of Review decisions should contain the Notice of Finding from the Board of Review from the general assessment year or from the subsequent year where applicable. Aside from substantial cause, prior year decisions on owner-occupied residential properties should be carried forward until the next general assessment year, subject to the Chief County Assessment Officer's equalization. Cases based solely on this reason will be set for review only after a review by the Board or its staff."[i]

Furthermore, Illinois Property Tax Code Article 16 Division 2 Section 16-80 "Reduced assessment of homestead property." states:

"Sec. 16-80. Reduced assessment of homestead property.

In any county with fewer than 3,000,000 inhabitants, if the board of review lowers the assessment of a particular parcel on which a residence occupied by the owner is situated, the reduced assessment, subject to equalization, shall remain in effect for the remainder of the general assessment period as provided in Sections 9-215 through 9-225, unless the taxpayer, county assessor, or other interested party can show substantial cause why the reduced assessment should not remain in effect, or unless the decision of the board is reversed or modified upon review. (Source: P.A. 88-455; 89-126, eff. 7-11-95; 89-671, eff. 8-14-96.)."

[i] Lake County "2008 Rules of the Lake County Board of Review"

http://www.co.lake.il.us/elibrary/publications/boardofreview/2008%20board%20of%20review%20rules%20for%20internet.pdf

Real Estate Recovery around the corner?

Wed, 17 Sep 2008 09:25:44 -0500

AIG bites the dust. Many are wondering "what does this mean to the Real Estate Industry?" As I see it, 30 year mortgage rates were traditionally around 200 - 250 basis points above the yield on the 10 year treasury. If this pattern had followed, mortgage rates would have been below 6% most of this year at the treasury yield sat around 3.80%. However, because of uncertainty (credit crisis), mortgage rates were around 6.5%. Now that the US Government has stepped in to reduce the risks with the bail out of Fannie and Freddie, and other financial companies, I believe that mortgage rates will drop down below 5.75%. This along with the Stimulus Bill that was signed a few months ago should result in more first time buyers coming in to the market. With their actions, hopefully, we will see a carry through to other buyers and sellers to start a recovery. Have a great day!

What do you think?

Housing Bill - Help for First Time Home Buyers!

Fri, 25 Jul 2008 13:04:33 -0500

Two sections of the new housing bill will help First Time Home Buyers. First, a $7500 Federal Tax Credit. This is advertised as if $7500 is added to taxes paid for 2008 and will increase your refund. While that is how it will work, it is actually an interest free loan that must be paid back over 10 years. This is still quite a stimulus for a first time home buyer.(see how to use it now below). The second way the Bill will help is that if the buyer closes late in the year and does not have mortgage interest to itemize (tax savings from home ownership) the standard deduction is increased by $1000 (for couples). First Time Home Buyers >>>> BUY NOW!

JUMBO buyers are also being helped. Fannie Mae and Freddie Mac have been given authority to purchase larger loans. The impact of this is uncertain due to the issues that Fannie and Freddie are currently facing. Until they better understand their exposure to the smaller loans, it is questionable whether this authority will result in lower Jumbo mortgage rates.

The other provisions of the Housing Bill are attempts to reduce foreclosures, reduce the up front costs for Reverse Mortgages, and delay foreclosure action on retuning veterans.

Have a great day!

How to use the $7500 tax credit now!

The key is to change your withholding. While I recommend that your check with your tax adviser, you may be able to experiment yourself in this way. Obtain a form W-4 from your payroll service. Increase your FEDERAL withholding (decrease federal withholding & increase take home pay). How many deductions can you take? The simple answer is to increase withholding by 10 and see what the impact is on your next check. If your objective is to take your credit by year end by reducing your withholding, calculate if you need to increase or decrease your withholding based on the impact of 10 additional withholding exemptions. Good luck.

Is Bank of American really pushing Predatory Loans?

Tue, 22 Jul 2008 13:38:36 -0500

Realtor Beware!

A Realtor recently attended a Bank of America presentation. The message that she received from BofA was suggesting that - "If she wanted to loose a deal she should use a mortgage broker that had to comply with SB1167. However, if she wanted to keep her deal she should send her client to Bank of America for their mortgage because they are EXEMPT from this law. Since this Realtor realized that this advice was coming from the company that got in bed with Countrywide, she asked what this all means to her and her clients.

My response was that this law was put in place to protect FIRST TIME BUYERS from predatory (high risk and or high cost) loans. By sending a FIRST TIME BUYER to an EXEMPT lender, the buyer looses that protection. The Realtor now takes the risk that because they were sent to BofA, the client believes that the Realtor pushed them to a lender that did not provide the protection that the state requires from non-exempt lenders. The Realtor also takes the risk that the borrower also believes that they were not presented with the comprehensive education and most competitive options that a mortgage broker offers. Realtor Beware!

The BofA approach assumes that Realtors are not qualified to understand how SB1167 works. Counseling is only required for FIRST TIME BUYERS, that are buying a home in Cook County, that choose a risky loan (interest only, pre-prepayment penalty, costs and fees over 5%, negative amortization, ARM with first adjustment in three years or less). The counseling verifies that the borrower understands the mechanics and costs of the loan and verifies that the borrower supplied information to show that they can afford the loan. It does not affect the repeat buyer, and it does not affect the first time buyer that selects a safe loan.

SB1167 is not an issue and should be viewed as a step that is being taken to help an industry that has not policed themselves. Have a nice day!

gas price savings

Mon, 21 Jul 2008 14:20:54 -0500

How would you like to save $.08/gallon?

Consider this - All you need to do is pay $50 for a gas card to receive $51 worth of gas. If your reaction was "so what", you should do the math. $51 buys you 12.23 gallons @ $4.17/gal. (today's price). Since you only pay $50 for the 12.23 gallons, you are only paying $4.09/gallon.

If you want to take advantage of this visit your neighborhood Marathon gas station.

Have a great day from the featured Barrington Mortgage Broker.

PS, Buy the card before you pump and confirm that you can use the card immediately. At the pump select pay inside and bring the card back in to pay for gas. My card did not work at the pump.

VACATION - GREAT ESCAPE TO DOOR COUNTY

Thu, 26 Jun 2008 16:43:37 -0500

"Greetings!" is a Big Hit! Playing June 17 - July 6

If you are planning to visit DOOR County this summer, be sure to check out PENINSULA PLAYERS, just North of Egg Harbor. My wife & I were there thiis past Sunday and viewed this comedy. What a great show. (They even scheduled a sunset over the water during the intermission - great photos!) We have seen several of their presentations over the year and I highly recommend that you find time to visit. Peninsula Players Theatre | 4351 Peninsula Players Theatre | Fish Creek | WI | 54212. If you run mapquest, you will go through Green Bay and find gas priced under $4.00.

*** 4 Stars out of 4 *** In this festive comedy a family gathering is thrown into chaos when Andy brings his Jewish fiancée home for the holidays. A wise and witty spirit, intent upon healing the family, provides a miracle through Andy's younger brother, sending everyone on a hilarious exploration of the phenomenal.
Tom Mula directs our first show, GREETINGS! He has previously directed AMADEUS, THE LION IN WINTER and last fall's BE MY BABY for us - as well as being an audience favorite on stage. The cast includes Neil Friedman, Maggie Carney, Joe Foust, Kevin McKillip, and Cassandra Bissell. Steve White designed the lights, Tom Burch the set, Kärin Kopischke the costumes - all returnees, and we have some new designers in Jeff Entwistle from UWGB on props and Victoria Dilorio from Chicago on sound. BUY TICKETS or Dial 920.868.3287 "If you're earnest about theater, Peninsula Players Theatre is the fountainhead around here. The oldest resident professional summer theater in America opens its 73rd season solidly with "Greetings!"
It's a comically serious fantasy about something wonderful, amazing and mystifying that happens on Christmas Eve in a home in Pittsburgh." Warren Gerds, Green Bay Press Gazette

July 1, 2008 - Illinois Regulations impact First Time Homebuyer in Cook County

Fri, 20 Jun 2008 16:17:53 -0500

highlights - Before a real estate transfer(buy-sell) or refinance can take place in Cook County (beginning 7/1/2008), data must be entered into a database to determine if it is an exempt or "subject to counseling" transaction. This information must be verified by the title company before funding.

If you are, or are helping a First Time Homebuyer, you should know about this new regulation. The state of Illinois is trying to protect First Time Homebuyers. The new regulation identifies mortgage loan features that may lead to confusion or misreprentation and requires that the buyer meet with a counselor. At that meeting, they will be asked to confirm that they understand the mechanics of the loan. The counselor does not have the authority to stop the borrower from proceeding with the loan or with the mortgage broker.

Features that would require counseling - 1) Interest - only, including an equity line second(combo), 2) Pre-payment penalty, 3) Adjustable rate loan where the first adjustment is three years or less, 4) negative amortization or deferred interest, and 5) costs and fees greater than 5% of the purchase price.

I see a few problems with this regulation. 1) The counseling is a cost that is absorbed by the mortgage broker, paid by the mortgage broker, and at risk to the mortgage broker if the borrower backs out of the purchase or changes mortgage companies. 2) By including a purchase money equity line under the "interest only"category, it is likely that this alternative to private mortgage insurance may be kept off the table when presenting differnt mortgage alternatives to First Time Homebuyers. In this way, the buyer avoids counseling and stretching the mortgage approval process by at least one week. 3) Pre-payment penalties are often used to protect the lender when they offer a lower interest rate on their five or seven year adjustable rate loans.

While the First Time Homebuyer may need more education to make sure they understand their mortgage, This regulation will also affect someone that refinances their home into a loan that has one of these features. Now when a homeowner refinances from an interest only ARM to a new interest only ARM, they will need counseling. Amazing but true. Welcome to Cook County.

SB1167 Warning!

Tue, 10 Jun 2008 14:14:39 -0500

Do you have a COOK COUNTY closing after June 30? Was the application taken before July 1? So you think you are off the hook and do not have to worry about SB1167? Wrong! Your title company closer will have to enter the borrower's information into the state data base to confirm that the borrower is exempt from counseling. This will have to be done before funds are disbursed.

(Loan officers and mortgage companies will not have access to the data base until July 1 and in talking to the state, they indicated that this will be the title companies responsibility.)

If you have walked though the on-line training (which takes close to one hour), you will realize that the closer will need 30 minutes to one hour to enter the data an obtain authorization that the transaction is exempt. Without the certificate, the lender will not release funds because the loan can not be recorded.

So beware and make sure that the seller's attorney impresses on the title company that the Exempltion Certificate efforts should be done before the closing and not while everyone is sitting around the table. Or maybe you like spending extra time watching the clouds go by.

Have a great day!

How do YOU pick a mortgage broker?

Mon, 12 May 2008 12:03:45 -0500

Press Release
I was recently awarded the Lending Integrity Seal of Approval from the National Association of Mortgage Professionals. This means that I have met the Association's high standards for ethics, integrity, professionalism and knowledge in the mortgage industry. I couldn't buy it or receive it just by joining the Association; I had to earn it, and my pledge to you is that I will keep earning it every day.

As a mortgage broker, my job is to present you with a range of loan products so that you can select the one that's right for you. The success of my business rests upon a foundation of professionalism and service.

To earn the right to display the seal, I had to pass a national criminal background check; to keep it I must attend professional education classes, including ethics training, and adhere to NAMB's strict Code of Ethics, and best business practices. This sets the highest national standard in the country, and I am proud to have earned it.

I'm very pleased to share this important news with you. I look forward to working with you and your clients when there is a need to finance or refinance.

Sincerely,

Angelo Cusinato, CRMS, CMC

P.S. To learn more about the Lending Integrity Seal of Approval visit www.lendingintegrity.org.

Economists paid to throw darts?

Tue, 06 May 2008 17:24:51 -0500

I would say that at least this month, the newspapers should rank economists below used car salesmen and loan officers when it comes to the listing of "who can you trust". Of course all three would rank above politicians.

Well, the economists missed again with their prediction of March consumer spending. The actual number - up 0.4% was double what they predicted. Since consumer spending represents over 2/3 of all US economic activity, I begin to feel that they get their numbers from the "gloom and doom" newspapers. I wonder what they will predict for the month of May.... I wonder if they realize that refund checks will start to flow.... They are probably only focusing on the stimulus checks and again will predict a slow economy. Maybe May & June will bring a brighter economy!

Fortunately, the Commerce Commission does not use the same economists. Their prediction was also low as first quarter GDP (sum of all goods and services produced in the US) growth kept pace with growth in the fourth quater 2007 and was up 0.6%.

The Fed did what was forecasted by the stock market (no economists needed) and reduced the funds rate (bank to bank lending) by 1/4% to 2.0%. The banks passed this on to consumers who have equity lines of credit tied to Prime which dropped to 5.0% This was the seventh rate cut since it began to realize that the economy needed some help last September. At one point, prime was at 8.25%. If your equity line payment was at prime, you have enjoyed a 39.4% payment savings which probably went into your gas tank like mine did.

The economists missed also missed the "jobs lost" number. They expected that 75,000 jobs were lost in April. The actual number was 20,000.

Also on Friday, the Commerce Department reported that factory orders in March rose 1.4%, far better than the 0.2% rise economists had forecast.

The statistice shown above were taken from various website reports, the critical observations about economists were all mine. Have a great day!

Charity worth your consideration - a feel good story

Wed, 30 Apr 2008 17:48:09 -0500

Our company, Resource Plus Mortgage started a sharing program in 1998. This month we crossed $50,000 in total contributions to charities. When one of our employees elected this charity, I laughed at the name and thought he was trying to pass off a "charity begins at home" selection. That wasn't the case.

It is with great pleasure that I introduce the Daniel Murphy Scholarship Foundation. They award scholarships each year to Chicago area eighth grade students so that they are able to attend schools that are more geared to college preparation than their neighborhood high schools might be. Eight hundred students submit applications for 100 scholarships. Winners sign a contract and must maintain grades and meet other performance standards to renew their scholarships. DMSF follows the scolars' progress and assigns mentors to assist them achieve the established goals.

View their website www.dmsg.org to find out more and to be amazed with their story. One of the reasons that you may not of heard of them is because they seem to want to give without strings and without fanfare.

I guess I am making some noise that they did not ask for but I believe it is the type of feel good story that we all need. Have a great day!

PS Their primary fund raising event is coming up June 2, 2008. When you visit their website, you will learn more. I will be there for dinner.

FED DROPS RATE 1/2%|MORTGAGE RATE DROP TO FOLLOW?

Wed, 30 Apr 2008 17:20:45 -0500

Mortgage rates have not moved much over the last few months as the Fed has droped the discount rate. In fact, the latest movement has been to the upside. Inflation, or the fear of inflation is what drives the fixed rate loans and the Fed still fears signs of inflation and will attempt to take action later this year to address this issue. The reduction in rates is passed through to the banks who inturn drop PRIME. This only helps those that have equity lines of credit that are tied to PRIME. Those homeowners have benefited as PRIME dropped from a high of 8.25% down to the current rate of 5.0%. Enyoy this while it lasts - which might only be for a few months.

How will the FED address inflation? The usual way - increase the discount rate making it harder to borrow money. today's drop will probably be the last one by the fed as they wait and see what the affect of the stimulus package will be. The Fed hopes this money gives a boost in the arm to the economy > increase spending > increase demand > increase inflation. The rollercoaster continues. Have a great day!

equity line warning

Wed, 23 Apr 2008 12:55:01 -0500

Many of us use obtain an equity line of credit to have as an emergency fund. Why tie up cash if you can write yourself a check when you need it. Isn't this one of the ways the banks market the equity line?

Yesterday I received a panic call from a past client that had obtained the line of credit in November 2006 when his home appraised for $675,000. His equity line bank reviewed his file, ran an AVM to determine a current value that was 19% lower. This dropped the loan to value below what was necessary to qualify for the equity loan so the bank notified them that the line of credit was being cancelled.

These clients have excellent credit scores (750) and low ratios. They also live on the northwest side of Chicago, in an area where no two homes look alike - hardly an area that an automated appraisal system is designed for.

While the wording in the equity line disclosure indicates that the bank may "suspend additional extensions of credit" (allow you to write checks against the available line) or "reduce your credit limit" (which will show as usage in excess of authorized limit on your credit report - significantly reducing your FICO score)if the value of your home drops significantly, this action could have a significant impact on their credit and financial health until the issue is resolved.

The notice that my client received allows them to pay $200 for a new appraisal from an appraiser approved by the bank (sounds fair to me??? NOT!) and if the value comes in higher they will refund the $200 and re-acctivate the credit line. When asked what would happen if they took their business elsewhere, they were told that this option would trigger an early cancellation fee of $300+.

So what do you think the customer service tag line should be changed to - "take it of leave it", "too bad", "deal with it", "not my problem", "wait until the appraisal comes in and we will see". Respond with your vote.

I don't know about you but I use my line of credit as an emergency fund and keep the balance as low as possible by depositing all of my available cash. Had I received that letter, I may have just deposited my payroll check with the expectation of paying my mortgage payment with an equity line check. Has anyone looked at the "Mortgage Accelerator" program? Guess what would have happened if the mortgage payment bounced!

For all of you that use an equity line of credit, look at your closing papers - disclosure of terms and beware. Don't use your last $$$$ of liquidity to pay down your line because it may not be available to you tomorrow! This morning I stopped at the bank and moved my available funds from my equity line to my checking account. If I have to pay some net interest, it is better than letting someone come during the night an mess up my financial flexibility. Have a great day!

March Madness comes to Cary IL

Thu, 13 Mar 2008 12:39:47 -0500

This Sunday, March 19, will be the 28th running of the March Madness Half Marathon. It starts at 8:35 AM from the Cary-Grove High School at 2208 Three Oaks Road in Cary, IL.

The challenging course begins heading East on Three Oaks Road in Cary (McHenry County) to Hickory Nut Grove Road where it heads North and then back West. (Hickory Nut Grove Road is the eastern border between McHenry County and Lake County and passes the Harvest Glen custom homes built by Verseman Development on the Lake County side of Hickory Nut Grove Road.)

The event web site says that "The course has been dubbed the most challenging in Northern Illinois and an excellent training race for spring marathons." (Having biked the hilly course, I don't envy the runners and am amazed how many return each year.) 15 special entries will be made available as charitable donations to promote the Hillstriders Scholarship Fund.

Trophies will be awarded to overall winners. Plaques will be given to the top ten males and females. Medals will be awarded to age group winners (3 deep). Approximate time schedule for Half Marathon awards is 11 AM. AGE DIVISIONS Male and Female; 19 & Under, 20-24, 25-29, 30-34, 35-39, 40-44, 45-49, 50-54, 55-59, 60-64, 65-69, 70-74, 75-79, 80 and over. Results will be provided by DRKomputing, Inc. Result cards will be available at the finish line on race day. See http://www.hillstriders.com/ for details.

FHA loan limits increase - effective March 6, 2008

Thu, 06 Mar 2008 14:44:17 -0600

Effective March 6, 2008. Great news for those that are having trouble qualifying with low downpayments. With great fan fare, the increased FHA loan limits were announced today. The new limits are county specific and designed to help traditional home buyers and those with low down payment or marginal credit. The new loan limits for Lake County, Cook County, DuPage County, McHenry County and Will County are now $410,000 for a single family home, almost 50% higher than the earlier limit. Higher limits were also announced for 2, 3, and 4 family homes.

FHA may also be a good sub-prime alternative for the homeowner that is facing an adjustment on their adjustable rate loan. Taking an FHA loan may allow them to keep their home a little longer to recover lost equity.

This may also be a plus for those considering a Reverse Mortgage since one of the issues had been the low loan limit. If you have recently considered a Reverse Mortgage, link to their web site for a new calculation of your benefits.

Have a great day!

To find out if your local limits have increased go to www.hud.gov.

Kids going crazy? - Consider a bad weather escape toTimber Ridge in Lake Geneva

Wed, 05 Mar 2008 15:59:32 -0600

Does this sound familiar? A couple of weeks ago, my daughter in law said that with the cold weather, the kids were going crazy in the house. My wife had an idea that turned into a great day. Pack the kids in the car and we will go to Timber Ridge water park in Lake Geneva, Wisconsin.

As we have done in the past, Timber Ridge is close enough to take a mid-week escape from a gloomy winter. Kids up to age 12 have a blast with water slides, pools, and arcade games. While we cruize around the lazy river or enjoy some refreshment we know that the kids are in view or close enough to keep track of them. My grandchildren can not get enough of the water park and suddenly are on their best behavior when they know a trip to Timber Ridge is being considered.

If you are looking for a change of pace, or a great reward for the kids, consider doing what we do. Take a short afternoon drive from the Barrington area and enjoy the water park until 9PM. Bring your own snacks and breakfast if you like and check in to your suite where the next morning you can wake up knowing the water park is a short walk down the hall. The return drive is usually quiet as they fall asleep in the back seat.

Hope this helps someone looking for a great escape - we might see you there!