I heard on the news today about a woman who was 45 days behind on her mortgage. She has had her home for 20 years and is at the point of walking away. She said she tried to work with her lender, to no avail. She said she went online looking for a loss mitigation company to help her, but was told that she had to be in full foreclosure before she could be helped. Then she found a company that told her they could help her just walk away from it - no harm, no foul. They told her they could make the banks stop calling, help her keep it from affecting her credit score, and keep her from foreclosure.
As many are doing in the Real Estate industry these days, I am not only working as a loan officer, but I am working to help people through loss mitigation. But that is not what this blog is about. I set out to find information that would help people navigate through a black sea that they had no idea even existed. The black sea of "what do I do now"?
I found some great information from the FTC Website. There are 7 parts to this blog of mine. Hopefully someone will find the information confirming, others may find it completely new, or still others may find only one thing new that they did not already know. What ever the case, my purpose will have been fulfilled. So happy reading everyone and let me know what you think.
Mortgage Payments Sending You Reeling? Here's What to Do
The possibility of losing your home because you can't make the mortgage payments can be terrifying. Perhaps you are one of the many consumers who took out a mortgage that had a fixed rate for the first two or three years and then had an adjustable rate. Or maybe you're anticipating an adjustment, and want to know what your payments will be and whether you'll be able to make them. Or maybe you're having trouble making ends meet because of an unrelated financial crisis.
Regardless of the reason for your mortgage anxiety, the Federal Trade Commission (FTC), the nation's consumer protection agency, wants you to know how to help save your home, and how to recognize and avoid foreclosure scams.
Know Your Mortgage
Do you know what kind of mortgage you have? Do you know whether your payments are going to increase? If you can't tell by reading the mortgage documents you received at settlement, contact your loan servicer and ask. A loan servicer is responsible for collecting your monthly loan payments and crediting your account.
Here are some examples of types of mortgages:
Hybrid Adjustable Rate Mortgages (ARMs): Mortgages that have fixed payments for a few years, and then turn into adjustable loans. Some are called 2/28 or 3/27 hybrid ARMs: the first number refers to the years the loan has a fixed rate and the second number refers to the years the loan has an adjustable rate. Others are 5/1 or 3/1 hybrid ARMs: the first number refers to the years the loan has a fixed rate, and the second number refers to how often the rate changes. In a 3/1 hybrid ARM, for example, the interest rate is fixed for three years, then adjusts every year thereafter.
ARMs: Mortgages that have adjustable rates from the start, which means your payments change over time.
Fixed Rate Mortgages: Mortgages where the rate is fixed for the life of the loan; the only change in your payment would result from changes in your taxes and insurance if you have an escrow account with your loan servicer.
If you have a hybrid ARM or an ARM and the payments will increase - and you have trouble making the increased payments, find out if you can refinance to a fixed-rate loan. Review your contract first, checking for prepayment penalties. Many ARMs carry prepayment penalties that force borrowers to come up with thousands of dollars if they decide to refinance within the first few years of the loan. If you're planning to sell soon after your adjustment, refinancing may not be worth the cost. But if you're planning to stay in your home for a while, a fixed-rate mortgage might be the way to go. Online calculators can help you determine your costs and payments.
Yesterday I was at a seminar. The speaker was a woman who was a real estate agent for 30 years, and is now a motivational speaker and trainer for real estate professionals. Her name is Daniel Kennedy. I found her seminar very interesting, with lots of great ideas and tips. Diversification in our commentary with people is the key to setting ourselves apart from everyone else.
Anyway, the point of this is this. With all of the fear and panic in the streets about the state of the real estate market, she had some interesting quotes to share. I can't remember them verbatim, but the to paraphrase; very well known and highly respected publications, such as TWSJ, Money Magazine, TNYT, TLAT, at various points in history were quoted to have said that real estate was not the place to invest your money for the long term. I believe the last quote was from 1989 and it indicated that we would never see souring land values in our life time.
Kinda makes you wonder how much of what your hear or read is actually fact or just another persons interpretation of current events and they have to print something before deadline.
A couple of weeks ago one of our in house appraisers came to our office meeting to clue us in on the climate of things in the appraiser world. He had met with our Senior Underwriter and HUD's Senior Underwriter to get a bead on where their respective positions are regarding the declining markets in our area. ( I know it is a country wide problem).
Without boring you with the gory details, the jist of it is this. Now it is more important than ever to know your appraiser. In our area, like so many other areas of the industry, quite a few people jumped on the appraiser band wagon over the past few years. They did their required training, completed their required training appraisals etc. They got their licenses and hit the road.
The past 3-5 years have been very good to them. They didn't really have to do much in the way of indepth research, honing and polishing of their case pleading skills, and their appraisals were accepted. This is not in any way bashing good appraisers. They are the most important people in our lives. They really have their work cut out for them now. They must do so much more research, so much more detailed comparison of not just recent listed and sold comps, but also trends. If your appraiser does not have access to data that shows it was updated within the last 30 days, then they have outdated data.
Also, in addition to critical data, your appraiser should be on the phone with you the moment he or she see's that the subject property is in a declining market. They should be able to give you a ball park of where the value may come in. They should be at the top of your underwriters favorite appraisers to work with. This will go such a long way in being able to get your deals closed and on time.
Keep on top of your lenders DNU appraiser list. In the wake of so much turmoil in the market, the list has undoubtedly grown. Don't lose time using an appraiser that has been removed from the approved appraiser list.
Last but not least, don't bogg your appraiser down with needless value checks. This takes away from the time they have to work on the deals that are viable. There are plenty of tools out there to get the information for yourself. It is as accurate as possible without considering all of the facts of the property.
Your appraiser is your best friend right now. Treat them as well as you would your Mother or your grandmother.
Let me first say that I only have one side of this story. However, I can't really imagine how the other side of the story could make much of a difference.
I was on caravan last week and one of the agents riding in my car shared a story with us. She told us about a buyer deal that she had that was quite disturbing. The buyers were all cash, so no need for borrowing or a risk for another lender. They were interested in a local home that was being short saled. The buyer was offering $280,000 cash. (Yes, they might be an investor, I don't know for sure.) The agent took the entire package to the bank, I believe it was Countrywide, thinking it was as good as gold. The bank countered wanting $289,000. The buyers did not have the additional $9000, or possibly did not want to pay it. At any rate, the bank turned down the offer.
This is the disturbing part. The bank ended up taking the home from the owners. So now, they have a foreclosure on their credit, when the worst they would have had was a short sale. The bank turned around and now has the property listed for $214,000!!
I heard this story last week and am still shocked and angry about it. This is just one story, from one agent, on one afternoon. I wonder how many more matching stories there are out there. I don't think I have heard anything about THAT type of behavior in the media. Has anyone else?
I was just responding to a comment posted in the "Is this a typical loan scenario" blog. After reading this blog and the comments for the past several days, I realized that the tone was changing. Amidst my response, I realized an idea that I personally thought deserves a blog of its' own.
I was commenting that the lending and real estate industries are in the news and other media in a very negative light. Those who have provoked this negative image, the image is rightfully deserved. However, I believe that there are plenty of lending and real estate professionals that do not subscribe to the same predatory and down right vulgar business practices or philosophies.
My thought is why not take the same media engines and use them to our advantage. I feel a sincere change campaign needs to be waged. Why don't we take it upon ourselves to draft that change, present it to the powers that be, and get it implemented. Why not be proactive instead of demanding that someone else be responsible for mandating that change? Let's mandate it ourselves and put it into action.
I came up with the greatest idea today. I was washing my hair, thinking about ways to increase business, and had a Eureka moment!! It was just the greatest idea I had had in a long time. I was so excited about it. It was all I could do to finish washing my hair. As I finished getting ready, I was so afraid that if I waited to long to share it with my Branch Manager, I would forget it. (One of the hazards of having terminal CRS)
So, instead of taking an additional 15 minutes to "do" the mop that is my hair, I tied it up in a knot on top of my head and headed into the office. I called my BM to make sure he was going to be in the office. I just knew that my idea was not one that I could adequately explain over the phone. What if he had questions that I had not yet considered? Dead air is not good on the cell phone. Not fear, however, he was in the office.
I walked in and immediately told him I had a great idea. I proceeded to tell him about my brilliant idea that would save the lending market. We offer to refinance borrowers out of adjustable rate loans, into fixed rate loans. In our area, many new home owners are upside down because the got very high ltv loans and values have dropped dramatically. We offer to refinance 100% of what the borrowers home is currently worth, and resubordinate the difference between the original current balance and the current value.
For example: Current loan balance=$300,000. Current value=$200,000. We refinance the $200,000 into a fixed rate and subordinate the remaining $100,000 with the current lender.
Thus, the borrower is not forced to short sell or go into default and foreclosure. Their payment amount is decreased. The original lender gets some return on their investment, and values do not decline as rapidly simply because of too many short sales. Sounds like the perfect solution....right??
That is when my BM told me that FHA had already thought of that and called it FHASecure. If you haven't checked it out, go ahead and check it out. It really is a great idea, even if I do say so myself. I won't save everyone, but it will save those who are credit worthy, actually making enough money to make mortgage payments, and have shown credit responsibility. Only 3% equity is required.
Don't cha just love it when you're a day late and a dollar short??
Good morning to all. Hope your holiday's are joyful thus far.
I have designed this blog to give lenders, brokers and Real Estate agents a centralized place to find and share solutions for those hard to close deals. Many real estate offices and brokers have lenders that they have worked with for many years. Loyal relationships are critical in our industry. But it is wise to always have a plan B. Let's face it, we can't all close all the deals we have been able to in the past.
Even though the real estate and lending markets have come to a slow crawl, there are still homes to be sold, and families to help. Why not add..."If I can't do it, I know someone who can"...to your sales pitch. This will make you a miracle worker in the eyes of your client. Isn't that the goal? I assure you, this will have an enormously positive impact on your referral rate.
Here you will can post questions, comments and ideas in response to your fellow bloggers. I'll get the ball rolling. Do you have a listing that just doesn't seem to sell? Is your seller tired of constant price reductions? I have a program that could help. If your seller has at least 7% equity in their home, or the equivalent in cash in the bank, my program will attract the buyers like bee's to honey. I will also prevent any, or further, need to reduce the sales price. It can also help to stabalize values in the neighborhood.
I don't know if you all have noticed or not....but the real estate and lending market has suffered a serious drought!!! Just kidding. Seriously though, business has fallen by the wayside. So, I have decided to transition over to originations. I have gone back to my former employer and will be focusing on PERS, STRS, FHA and so forth. They haven't been utilized to their full potential in several years, so the time is right. I have been certified by CalPERS, and that is very exciting.
The best benefit, as I see it, for STRS and PERS borrowers, is that the costs are totally controlled. There is no way for an originator to gouge the borrower with fee's. Escrow and Title fee's are limited as well. I am very excited and very eager to get rolling. Should anyone have a borrower, a buyer, or an agent who is looking for someone to do a PERS/STRS deal, feel free to contact me. I'd love to help. If I can't help, I probably know someone who can.
Hey there....I know....long time no blog. I have been so busy gettin with the program. I have been developing my website and, am tickled pink to say, that it should be up and running by mid July. Woooo Hoooo!!!! I will be sure to let you all know when we have "lift off"!
I gotta compose some page turning text, now, that will entice my customers to pick me out of the sea of other services out there. This much fun should be illegal. ;)
Boy did I have a blonde moment. No offense to blondes. My sister is blonde. However, every now and again, I have really really good ones.
Somehow, I got my dates mixed up and my marketing manager and I went on Friday, instead of Saturday. We hae a really great time. It is a beautiful restaurant and location. The food was great, and not too expensive and the staff was quite nice.
I was really looking forward to meeting all of you as well. Maybe something will come together later in the year. At any rate, it sounds like everyone had a great time. I am not surprised.
Kerry Cannon
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