I have just been resuscitated after the shock and awwweeee of the news I'm about to tell you. Our government.....the government....yes our government actually did something that will help stimulate the economy and keep this little thing we call a country breathing.

Not only did they extend the tax credit for new homebuyers ($8,000) it now offers a $6500 tax credit for repeat buyers or buyers moving up (how do you move up when prices are down?).

This tax credit will end in June 2010 and all contracts must be in writing by end of April. I wonder if the record number of foreclosures in a quarter in American history had to do with it....HMMMMM.

Anyway that is good news and I have posted an excellent site that gives you full details.

http://www.federalhousingtaxcredit.com/

This is the best Monday in a long time and yes even Barney Frank didn't screw this up. By the way Barney, Fannie Mae (your pals) asked for 15 billion to stay afloat but their debt is 19 billion...can you help them with their math....didn't think so.

I wish us all well.

In his quest to appease the too big to fail banks making sure the CEO's get the bonuses promised so his campaign coffers remain flush Barney Frank is working hard to keep his promise of killing any and all competition for home loans leaving only the too big to fail banks to lend to the consumer. You know the TARP KIDS.

30 years ago the banks had their little monolopolistic operation - no competition and they were slow. The consumer was victimized because they were the only players in town until the local community based lenders (mortgage bankers/brokers) cropped up and what the consumer found was lower rates and better delivery of service.

Community based lenders (non-bank) provide 40% plus of the origination's and 50% of all FHA (HUD) loans and the reason for that is the big banks and credit unions are lousy at government loans they are flat out afraid of them based upon my personal experience.

So what is this all about? This is HR 1728 Financial Stability Improvement Act. There is a risk retention feature meaning that any lender that originates a loan must put aside a 10% reserve - in other words have a financial stake in making good loans. The concept itself is a good one and community based lenders already and always will have a stake in that but 10% is a huge number cost prohibitive and the only entities that will be able to fork out that kind of reserve is none other than....you guessed it the TARP KIDS wiping out or eliminate most of the community based lenders the result of course is the consumer pays more.

So the American consumer once again has Barney Frank to thank in a series of self serving bizarre blunders that will only build the few banks left to be even bigger to fail for the future bail outs and what about economic recovery? HAH!

On January 1st 2010 the American consumer is going to wake up to a bunch of new stuff featuring the new HUD version of the good faith estimate and the Financial Stability Improvement Act and other fantastic ideas Barney, Chris and Friends .... the same people that have been in charge of oversight and never did any over seeing....have come up with.

Man oh man if you think this is a sour grapes rant it may be but I have been in this business a long time and have seen it all until now of course and I know what it was like then and I can see the future and it stinks for the consumer. AMERICA write, call your representative....or don't. It is so bad it will be reversed once the results and the screaming starts but it will be at the expense of the middle class consumer and it will take another three years to fix. It will cost the middle class millions if not billions across the country.  Chris Dodd already got his sweetheart loan from Countrywide so he's set but what about the rest of America?

The link below is a related blog confirming Mr. Franks motives. Remember there are around 3 banking lobbyists per representative so if you think there is no influence here think again.

Barney Frank & Friends lack knowledge & skill

I wish us all well.

 The highly touted and much patting on the back until it bruised (Thanks NY AG of NY Cuomo) occurred when loan originators were lectured about how badly they behaved. After all it was the loan originator that put pressure on the appraiser to pull values out of their 'pockets'.

What do you know....a bizarre and simply unbelievable report has just come out stating that since the inception of HVCC (started in the 2nd qtr or 2009) the number of 'inflated value appraisal fraud" is up 46% compared to a year ago? Really?

How can this be? The big banks as you recall were for this 'reform'. WHY? Because they (Banks) formed another entity under their umbrella called it an AMC (appraisal management corporation) to separate loan originators from appraisers generating more income for themselves (at expense of consumer) what a dealio! While this is going on appraisers were given stricter parameters in what can only be categorized as a bizarre market on many levels to begin with.

Add to the above the fact banks instituted these electronic measuring systems designed to "review" (dumb down) the values or 'scrub' the appraisal work after it had been scrutinized by their own underwriters.... how redundant can you get on what is a subjective process anyway.

HOW COULD APPRAISAL FRAUD BE UP 46%? WELL IT ISN'T BECAUSE OF THE LOAN ORIGINATOR...AND FRANKLY I DON'T BELIEVE IT.... Who could be putting this out there? Here is the link scroll down and the name Interthinx pops up. A "risk mitigation" firm benefiting from the HVCC regulation thing publishes this information the same time  an amendment is being proposed to kill the HVCC. You be the judge.

http://brokeruniverse.com/news/#1256918407

http://www.interthinx.com/overview/fraud_reports.php

By their admission Interthinx states the sheer size and population of California has a significant impact on the national fraud trend numbers. Ok so why the headline then? Is that food for the BANK lobbyists to keep HVCC alive? You be the judge.

Based upon my experience since the inception of HVCC I cannot see how fraud could have increased. Honestly. The appraisers task is monumental and their work is scrutinized in an abnormal market place. It is ridiculous out there and our government continues to make it worse. Unbelievable. Just unbelievable. 

By the way - more garbage on the airways from the media pundits or guests proclaiming small community banks are handing out businesses loans.... really...which ones and ask the businesses that never missed a payment why their credit was pulled or canceled.

http://www.fdic.gov/bank/individual/failed/banklist.html

Hokey Smokes Bullwinkle....I wish us all well.

History....

Anytime we turn in a claim to our insurance company pertaining to our home and damage that information is collected for all insurance companies to see. This information is stored in a 'repository'. Experian and Equifax are both repositories storing information about our credit.

If you are looking at a home to purchase you should call your insurance agent and have them pull up the property to see what kind of claim history it has before you call your home inspector. Armed with that information going into an inspection can help you make an informed decision on what is the most important financial decision other than retirement you can make.

It is kind of like a CARFAX for houses.

I wish us all well.

I am usually available to my clients (borrowers/Realtors) as they need me and on Saturdays it is not uncommon to get a phone call or two about qualification on a home a borrower may be interested in or a call from a Realtor to confirm the price range our mutual client can afford before the offer goes in.

This past Saturday I sat in my office looking at two new purchase contracts on my desk. The tax credit certainly is playing a role and my sources tell me it will be extended into 2010 up through June. Perhaps congress would just extend it permanently since it is clearly a better stimulus program than the cash for clunker crap.

It is imperative you call your representatives. Write too. I have found when writing (via email from their website) I get a standard formatted non-response response telling me what they are doing for me. That does not mean I stop writing. I continue.

My second phase of "Operation Crazy Person" is to call the local office of my representative. I have met some of the staff through chamber events and so forth and as long as I have taken the time to write I should have someones ear.

There are many issues if addressed succinctly could add to the very modest momentum this tax credit has started- a few are:

1. Bringing back the down payment assistance program
2. Aggressively force banks/lenders/note holders to re-negotiate or modify existing loans consistent with the economic realities of our times vs a re-underwrite process to "unmeetable" standards
3. Banks that have foreclosed and have properties on the market must respond within 10 business days to offers and negotiate realistically plus any repairs of such properties are to be corrected by the lender or its facilitator.
4. Stop the cost prohibitive and unfair pricing of home loans based upon credit score
5. Force lenders to stop abusing their correspondent lending relationships (Buy back practices)

We need to drip on the representation in DC because the banking lobby has 3 lobbyists to every one Representative so if you think you are being represented (I don't care which party you drink kool-aide from) think again.

If you watched the interview of Tim Gietner on Meet the Press you should note what he did not say. The point is we have a long road ahead.

I wish us all well.

Nutty professors at HUD, the spoon fed (by lobbyist) congress and its agencies run around making speeches, proclaiming villains, pointing fingers yet right under the noses of all these knuckleheads bad players continue to play bad.

Case in point is Lend America's Mike Ashley. Caught, arrested, fined, fired, rehired, fired, ordered to stay out of the business, restrictions ordered -  See link for the full story:

http://www.housingwire.com/category/buzz-post/

The point is no regulation in the world will prevent stupid OR bad behavior unless of course there is oversight and enforcement. A drum I have been beating for the past 18 months and will continue to do so.

The enemy is from within and that enemy is our very own government to include the 'pretenders' in congress (pretending to practice oversight) the pretenders in the SEC (pretending to watch Wall Street) to name a few and of course the HUGE lobby effort by the Banking & Insurance industry.

Until we have real oversight and enforcement the noise we hear today is just that...noise.

I wish us all well.

The HVCC appraisal regs that went into effect thanks to the Attorney General of NY Cuomo (probably will run for Gov of NY and certainly at some point will run for president...oh yea former HUD secretary under Clinton...Cuomo was a disaster there too)... His response to serious issues is from the same handbook used in Washington DC and to reverse this or right this wrong you can sign and forward this petition.

If you want to right the wrong this is your chance. If you as a consumer wish to be subjected to inaccurate appraisals that cost you money up front then don't participate. If you are an industry professional wishing to be subjected to inexperienced appraisers in one of the most difficult markets in history then don't participate.

This is a very serious matter. See link below:

 http://www.hvccpetition.com/

I wish us all well.

Rates are good now for the short term and one way to shed some light where our interest rates will be in the future is to look into our past.

I have attached a link showing the history of long term rates going back to 1971.  See below:

http://www.freddiemac.com/pmms/pmms30.htm

In my old marketing stuff I found a chart reporting long term rates from 1799 up to 1992.  (That's right I started in this business back in 1799) It revealed long term interest rates were at or below 8.5% - 95% of the time.

When you review the history of rates you can't help but notice the period when rates soared into high double digits. Rates moved higher during the Carter administration and after his administration ended in 1980 rates were almost at 15%.....Although Carter was an economic disaster he did appoint Paul Volcker to the Fed and thanks to Volcker (despite the screaming from the new Republican President (Reagan) and the Democratic majority in congress led by Tip O'Neill ...the good ol' days some say) Volcker trudged and pushed us through that particular economic calamity.

Ok- we have some history and as we look ahead what do we see? Can it be argued that the current white house is struggling like Carter? Is it possible we will be faced with high double digit rates again?

It doesn't matter who is to blame it matters what happens as a result of government intervention (or non-intervention) and/or policy whatever that is. What is important is not how we got here it is how we get out of it safely. The debate today is ridiculous and I hope both sides start exercising real leadership soon.

It's nice to see our old friend Volcker back in the picture - he was asked to help you know but it seems nobody is listening.

If the lobbyists (Banking - Insurance - the 2 most powerful lobbyists) are allowed to continue this stranglehold on our representatives the result will be higher rates AND they will be to the level we saw during the Carter Administration....YES THEY WILL..... it won't happen tomorrow but it will happen unless sound fiscal decisions can be made to include a total overhaul of the tax code...I can only dream.

SAVE YOUR MONEY AMERICA!!!

I wish us all well.

HR 3126 deserves the support from the consumer, Realtor, obviously the lending industry, (the banks won't support it because it will save the consumer money and Banks lose revenue) and support is needed from all the other vendors supporting the real estate market place IF the amendment killing the HVCC (preventing originators from ordering their own appraisal) is included.

America write your representative and senator and refer to HR 3126....and demand this amendment is included. It has some distance to travel before it gets to a vote however we all need to contact our representatives and tell them to get this on their radar screen and support it.

I have to be frank (no pun intended) the government has continued to demonstrate its ignorance when dealing with the financial industry and the overall results of HR 3126 I'm sure will be mixed but if it eliminates the ridiculous HVCC requirement the consumer will be the winner and that's rare in today's world.

The removal of this HVCC thing would be the beginning of meaningful and necessary push back. Let's hope Barney Frank doesn't screw this up too. See link below:

http://www.housingwire.com/2009/10/22/house-panel-sunsets-hvcc-in-consumer-finance-bil/

I wish us all well.

Stealing and changing the title a bit from the Britney Spears "hit" song whenever it came out was inspired by HUD's latest announcement that it is considering "Civil Money Penalties" against the FHA underwriter if HUD FEELS (I emphasize the word FEELS) the underwriter didn't underwrite the loan properly. HUH?

I wonder if Britney Spears is now in charge of HUD. Nope it is Housing Secretary Shaun Donovan the man on an island along with the rest of Washington DC. Does anybody really believe our government and its agencies know anything?

 Timothy Geitner Treasury Secretary recently stated "regulatory overhaul without limiting consumer choice of financial products or stifling competition" was the focus.

Yet Mr. Donovan of HUD (or somebody inside the HUD house) comes up with a bizarre plan to force an individual to pay financial consequences if HUD sees fit to go after them? ARE YOU KIDDING ME? 

Read the HUD guidebook also known in the industry as the "4155". By design it is written to allow an underwriter to be subjective ....why? Because not everyone is the same, can document the same and have special circumstances. This is what we call risk analysis so if Mr. Donovan has his way the consumer will live the perfect life - nothing bad happens and even if you are that perfect consumer there is no guarantee HUD would not come after the underwriter for some minutia and be fined because some 22 year old bureaucrat is ‘following' the rules. You can bet the cost of your home loan will go up because now the underwriter will have to be insured for error and or omission insurance. 

It is unbelievable that such an idea is even put into the public for discussion. WHO are these people and WHERE do they come from and HOW the hell do they get this job and WHAT are their credentials? 

The "stupid" continues and I continue to write my representation in DC only to get back some template non-response response stating they hope all is well in Snohomish ....it's not well anywhere and the government IS the reason. They are not addressing the issues...the lobbyists are winning.... This is not a Democrat or Republican thing this is our government and America I hope you contact your representative.

 I wish us all well. 

The American Public not so smart says HUD & Washington DC....

NO...Real Estate Market is NOT improving just limping along... 

Can I shake it up a little? - Down Payment Assistance 

Meanwhile the lobbyist plays on...