Mike's Blog

23 Legal Defenses to Foreclosure: How to Beat the Bank”

MLS of FLORIDA Realty Corp. — Fri, 24 Apr 2009 00:47:02 -0500

23 Legal Defenses to Foreclosure: How to Beat the Bank"

Author: Troy Doucet

440 pages

Publication date: 2008

Publisher: Custom Books Publishing

ISBN: 1438278195

Did you know that there are laws on the books that protect you AND help you defend yourself against the prospect of a mortgage foreclosure? Did you know that certain lending law violations may win for you punitive damages against your mortgage lender, including the cancellation of your mortgage loan?

One of the most useful and informative books that I have found dealing with the subject of mortgage foreclosures is "23 Legal Defenses to Foreclosure: How To Beat The Bank", an easy to read ‘how-to' manual that explains various defenses you the consumer have available to you when dealing with a mortgage loan foreclosure. There a total of 53 defenses to foreclosure that is contained within the book, all of which are covered in an easy to understand format.

The following are some examples of the legal defenses of foreclosure provided in the book:

Truth in Lending Act (TILA) violations enabling rescission
Truth In Lending Act (TILA) violations enabling damages
Failure to Provide a Correct Notice of the Right to Rescind.
Unconscionability

Each chapter is dedicated to one defense or counter claim (a lawsuit against your lender), and is broken down into parts as follows:

Defined: Provides the reader a brief explanation of what the defense is, and the ability to quickly understand the basics of the defense.

Spot It! This gives the reader the ability to quickly spot whether or not the defense applies to their situation.

Limitations: If the defense has limitations or drawbacks, it will be identified here.

Potential Recovery: What is the defense worth? Is it a tool that enables rescission of a loan, or is it worth only a few hundred dollars?

23 Legal Defenses to Foreclosure addresses specific Federal lending law violations that are valid defenses to foreclosure in every state, including:

•· Truth In Lending Act (TILA)

•· Home Ownership Equity Protection Act (HOEPA)

•· Real Estate Settlement Procedures Act (RESPA)

•· Fair Debt Collection Practices Act (FDCPA)

•· Failure to verify assets

23 Legal Defenses to Foreclosure also includes legal letters, forms, motions, an "Answer" to a foreclosure lawsuit, and sample discovery to get damaging information directly from your mortgage lender.

Chapters within the book are broken into sections that include:

A Definition of the legal defense
The damages available
A litigation strategy
Elements and factors to prove in court
Checklist and worksheets
Whether you can sue others

The author is Troy Doucet, a Juris Doctor candidate in Ohio whose previous career was in residential loan origination for many years. Mr. Doucet gained notoriety within the mortgage industry several years ago when he called for the elimination of all junk fees in mortgage loans. Since leaving the mortgage industry in 2006, Mr. Doucet has pursued his law studies as well as performing Forensic Mortgage Loan Audits for TILA and HOEPA violations. Additionally, Mr. Doucet assists attorneys nationwide in combating foreclosures on behalf of consumers.

Although this book is an excellent reference guide for consumers to better understand the foreclosure process and the rights afforded to them under the law, it is not the author's intent to suggest this book as replacement for competent legal counsel.

23 Legal Defenses to Foreclosure is a must read for anyone presently in foreclosure or facing the prospect of a property foreclosure. Knowing your rights and proper defenses under the law could help you keep your home, and possibly own your home debt free too! On a scale of 1 to 10, I give this book a solid 10.

23 Legal Defenses to Foreclosure sells for $39.95. To order a copy of the book "23 Legal Defense to Foreclosure: How To Beat The Bank", go to www.Amazon.com or you can purchase the book directly from the publisher at www.CreateSpace.com/3349582.

Mike Sikorski MBA, GRI

Licensed Real Estate Broker

Licensed Mortgage Broker

Forensic Mortgage Loan Auditor

MLS OF FLORIDA REALTY CORP.

22079 Kimble Avenue

Port Charlotte, Fl. 33952

Phone (941) 206-6000

Mike@FloridaRealty.net

WHO'S PROPERTY IS IT ANYWAY?

MLS of FLORIDA Realty Corp. — Sun, 29 Mar 2009 20:59:32 -0500

In the mad dash to relist a property for sale in the MLS after a foreclosure sale has taken place, many of these properties are not eligible for sale! The back log of filings of Certificate of Title in many circuit court systems around Florida have left many of the home titles in the previous owners name for several weeks after the Public Sale has taken place! In most instances, the Certificate of Title is recorded within 10 days after the Public Sale has taken place, forcing the previous owner to move out quickly. today, many of the Public Sales that occurred 60 and even 90 days ago have still failed to record the Certificate of Title. This can prove especially difficult, especially if a property is listed for sale and a buyer wants to close within the standard 30 day period after the purchase contract has been executed.

Mike Sikorski, MBA GRI

Licensed Real Estate Broker

Licensed Mortgage Broker

MLS OF FLORIDA REALTY CORP.

22079 Kimble Avenue

Port Charlotte Florida 33952

941-206-6000

Mike@FloridaRealty.net

www.FloridaRealty.net

Most Loan Modifications ‘Designed” To Fail

MLS of FLORIDA Realty Corp. — Mon, 05 Jan 2009 18:07:02 -0600

"Unqualified" homeowners are being offered mortgage loan modifications by their bank or mortgage lender that are ultimately designed to fail, in a slight of hand effort to offer token assistance to consumers who should never have received mortgage loans in the first place.

The mortgage industry estimates that over 60% of mortgage loans modified are likely to become delinquent less than 12 months after the loan modification is made. Given the fact that many of the mortgage loans modified today do very little to help homeowners in the first place, it is not a wonder why so many ‘modified' mortgage loans end up in foreclosure.

Although many ‘qualified' consumers are receiving favorably modified mortgage loan terms due in large part to sufficient monthly income and low debt to income ratios, many homeowners who have lost significant household income since first receiving their mortgage loan are being locked out of the loan modification process, otherwise seen as ‘unqualified'. Even the government sponsored mortgage loan bailout programs are disqualifying many of these homeowners simply because they would not otherwise qualify under regular government loan-underwriting guidelines.

Thousands of homeowners, whose mortgage loans have been identified as loans that should have never closed in the first place, are being targeted early on in the loan modification process, often suggesting that the homeowners should strongly consider selling their home or refinancing with another mortgage lender, rather than making a bad loan, better. Requests for loan modifications are given little consideration to these types of mortgage loans, with mortgage lenders offering nothing more than a ‘token' loan modification, one that does little if any good at all in making the monthly mortgage loan payments more affordable or making the mortgage itself more plausible over the life of the loan.

Simply put, banks and mortgage lenders who may have run afoul of traditional mortgage underwriting guidelines, offering high loan to value mortgage loans associated with high debt to income ratios, are simply wanting to keep in that in the past, keeping only those who can meet ‘current' underwriting guidelines, such as debt to income ratios of no more than 38%. Loan modifications for those homeowners receiving mortgage loans with debt to income ratios upwards of 60% of their gross income are finding the loan modification process to very difficult, especially if their current income has changed from when they first received their mortgage loan.

It is easy to tell a good loan modification from a token loan modification, simply by using the following formulas:

A good mortgage loan modification is one where your mortgage lender offers:

*Mortgage loan balance is reduced to that of the property's current value

*Convert an Adjustable Rate Mortgage (ARM) into a fixed rate interest loan

*Waive interest and escrow arrearages, including unpaid property taxes and hazard insurance

*A low good faith payment to reinstate a past due loan

A token mortgage loan modification where the mortgage lender offers:

*Add past due interest and/or escrow arrearages to the mortgage loan's current principal balance

*Setting a high interest ARM into a high interest fixed rate mortgage loan

*Increasing a mortgage loan's term from 30 years to as much as 40 years

*A high good faith payment to reinstate a past due loan, often times higher than what a homeowner can reasonably afford to pay at one time.

A good loan modification has improved loan delinquencies tremendously, where in opposition; the token mortgage loan modification has provided disastrous results, often leaving many of these same homeowners in the same quandary they were in even before the loan was modified!

Homes secured by ‘underwater' mortgage loans, that is, where the mortgage loan balance exceeds that of the home's current market value, are without a doubt a huge problem for consumers and industry alike. Consumers who have suffered financial setbacks such as a job loss or a loss of income, and continue to pay a mortgage loan that is taking a larger portion of their household income that an ordinary would never approve of, should strongly consider their options, including the sale of their home. Although the option of refinancing a mortgage loan is an option, applicants must still qualify for financing and may have difficulty if their current lender will not consider them to a good risk.

Although homes secured by underwater mortgage loans will likely not sell in a buyer's market such as the down market we are currently experiencing nationwide, a home could sell as a short sale, with many banks and lenders who originally offered a token mortgage loan modification, more than willing to accept a short sale followed by the subsequent debt forgiveness for the remaining principal mortgage loan balance.

The short sale of a home, when properly coordinated, allows the homeowner the potential benefit of full debt forgiveness by their mortgage lender as well as reduced income tax exposure. As always, seek competent, professional advice when seeking answers to questions regarding these specific areas.

The quicker a homeowner accepts the fact that an unaffordable mortgage loan is best resolved by a short sale, the quicker they can re-establish their good standing and purchase another home another home in the near future, secured by a mortgage loan that is affordable and no longer underwater.

For FREE information regarding the benefits of short selling your home, please contact your real estate professional or call (941) 206-6000.

Mike Sikorski, MBA, GRI

Licensed Real Estate Broker

Licensed Mortgage Broker

MLS of Florida Realty Corp.

22079 Kimble Avenue

Port Charlotte, Florida 33952

Phone (941) 206-6000

Email: Mike@FloridaRealty.net

Most Loan Modifications ‘Designed” To Fail

MLS of FLORIDA Realty Corp. — Mon, 05 Jan 2009 18:04:40 -0600

It is easy to tell a good loan modification from a token loan modification, simply by using the following formulas:

A good mortgage loan modification is one where your mortgage lender offers:

*Mortgage loan balance is reduced to that of the property's current value

*Convert an Adjustable Rate Mortgage (ARM) into a fixed rate interest loan

*Waive interest and escrow arrearages, including unpaid property taxes and hazard insurance

*A low good faith payment to reinstate a past due loan

A token mortgage loan modification where the mortgage lender offers:

*Add past due interest and/or escrow arrearages to the mortgage loan's current principal balance

*Setting a high interest ARM into a high interest fixed rate mortgage loan

*Increasing a mortgage loan's term from 30 years to as much as 40 years

*A high good faith payment to reinstate a past due loan, often times higher than what a homeowner can reasonably afford to pay at one time.

For FREE information regarding the benefits of short selling your home, please contact your real estate professional or call (941) 206-6000.

Mike Sikorski, MBA, GRI

Licensed Real Estate Broker

Licensed Mortgage Broker

MLS OF FLORIDA REALTY CORP.

22079 Kimble Avenue

Port Charlotte, Florida 33952

Phone (941) 206-6000

Email: Mike@FloridaRealty.net

Certain Loan Mods Are ‘Designed” To Fail

MLS of FLORIDA Realty Corp. — Sat, 03 Jan 2009 18:01:48 -0600

Although many ‘qualified' consumers are receiving favorably modified mortgage loan terms due in large part to sufficient monthly income and low debt to income ratios, many homeowners who have lost significant household income since first receiving their mortgage loan are being locked out of the loan modification process. Even the government sponsored mortgage loan bailout programs are disqualifying many of these homeowners simply because they would not otherwise qualify under regular government loan-underwriting guidelines.

It is easy to tell a good loan modification from a token loan modification, simply by using the following formulas:

A good mortgage loan modification is one where your mortgage lender offers:

*Reduce the principal balance of the outstanding mortgage loan balance in line with the property's

current value

*Convert an Adjustable Rate Mortgage (ARM) into a fixed rate interest loan

*Waive interest and escrow arrearages, including unpaid property taxes and hazard insurance

*A low good faith payment to reinstate a past due loan

A token mortgage loan modification where the mortgage lender offers:

*Add past due interest and/or escrow arrearages to the mortgage loan's current principal balance

*Setting a high interest ARM into a high interest fixed rate mortgage loan

*Increasing a mortgage loan's term from 30 years to as much as 40 years

*A high good faith payment to reinstate a past due loan, often times higher than what a homeowner can reasonably afford to pay at one time.

The quicker a homeowner accepts the fact that an unaffordable mortgage loan is best resolved by a short sale, the quicker they can re-establish their good standing and purchase another home another home, secured by a mortgage loan that is affordable and perhaps no longer underwater.

For FREE information regarding the benefits of short selling your home, please call (941) 206-6000.

Mike Sikorski, MBA, GRI

Licensed Real Estate Broker

Licensed Mortgage Broker

MLS OF FLORIDA REALTY CORP.

22079 Kimble Avenue

Port Charlotte, Florida 33952

Phone (941) 206-6000

Email: Mike@FloridaRealty.net

Certain Loan Mods Are ‘Designed” To Fail

MLS of FLORIDA Realty Corp. — Sat, 03 Jan 2009 17:58:53 -0600

Although many ‘qualified' consumers are receiving favorably modified mortgage loan terms due in large part to sufficient monthly income and low debt to income ratios, many homeowners who have lost significant household income since first receiving their mortgage loan are being locked out of the loan modification process. Even the government sponsored mortgage loan bailout programs are disqualifying many of these homeowners simply because they would not otherwise qualify under regular government loan-underwriting guidelines.

It is easy to tell a good loan modification from a token loan modification, simply by using the following formulas:

A good mortgage loan modification is one where your mortgage lender offers:

*Reduce the principal balance of the outstanding mortgage loan balance in line with the property's

current value

*Convert an Adjustable Rate Mortgage (ARM) into a fixed rate interest loan

*Waive interest and escrow arrearages, including unpaid property taxes and hazard insurance

*A low good faith payment to reinstate a past due loan

A token mortgage loan modification where the mortgage lender offers:

*Add past due interest and/or escrow arrearages to the mortgage loan's current principal balance

*Setting a high interest ARM into a high interest fixed rate mortgage loan

*Increasing a mortgage loan's term from 30 years to as much as 40 years

*A high good faith payment to reinstate a past due loan, often times higher than what a homeowner can reasonably afford to pay at one time.

The quicker a homeowner accepts the fact that an unaffordable mortgage loan is best resolved by a short sale, the quicker they can re-establish their good standing and purchase another home another home, secured by a mortgage loan that is affordable and perhaps no longer underwater.

For FREE information regarding the benefits of short selling your home, please call (941) 206-6000.

Mike Sikorski, MBA, GRI

Licensed Real Estate Broker

Licensed Mortgage Broker

MLS OF FLORIDA REALTY CORP.

22079 Kimble Avenue

Port Charlotte, Florida 33952

Phone (941) 206-6000

Email: Mike@FloridaRealty.net

Certain Loan Modifications Are ‘Designed” To Fail

MLS of FLORIDA Realty Corp. — Sat, 03 Jan 2009 13:59:16 -0600

“Unqualified” homeowners are being offered mortgage loan modifications by their bank or mortgage lender that are ultimately designed to fail, in a slight of hand effort to offer token assistance to consumers who should never have received mortgage loans in the first place.

Although many ‘qualified’ consumers are receiving favorably modified mortgage loan terms due in large part to sufficient monthly income and low debt to income ratios, many homeowners who have lost significant household income since first receiving their mortgage loan are being locked out of the loan modification process. Even the government sponsored mortgage loan bailout programs are disqualifying many of these homeowners simply because they would not otherwise qualify under regular government loan-underwriting guidelines.

It is easy to tell a good loan modification from a token loan modification, simply by using the following formulas:

A good mortgage loan modification is one where your mortgage lender offers:

*Reduce the principal balance of the outstanding mortgage loan balance in line with the property’s

current value

*Convert an Adjustable Rate Mortgage (ARM) into a fixed rate interest loan

*Waive interest and escrow arrearages, including unpaid property taxes and hazard insurance

*A low good faith payment to reinstate a past due loan

A token mortgage loan modification where the mortgage lender offers:

*Add past due interest and/or escrow arrearages to the mortgage loan’s current principal balance

*Setting a high interest ARM into a high interest fixed rate mortgage loan

*Increasing a mortgage loan’s term from 30 years to as much as 40 years

*A high good faith payment to reinstate a past due loan, often times higher than what a homeowner can reasonably afford to pay at one time.

Homes secured by ‘underwater’ mortgage loans, that is, where the mortgage loan balance exceeds that of the home’s current market value, are without a doubt a huge problem for consumers and industry alike. Consumers who have suffered financial setbacks such as a job loss or a loss of income, and continue to pay a mortgage loan that is taking a larger portion of their household income that an ordinary would never approve of, should strongly consider their options, including the sale of their home. Although the option of refinancing a mortgage loan is an option, applicants must still qualify for financing and may have difficulty if their current lender will not consider them to a good risk.

Although homes secured by underwater mortgage loans will likely not sell in a buyer’s market such as the down market we are currently experiencing nationwide, a home could sell as a short sale, with many banks and lenders who originally offered a token mortgage loan modification, more than willing to accept a short sale followed by the subsequent debt forgiveness for the remaining principal mortgage loan balance.

The quicker a homeowner accepts the fact that an unaffordable mortgage loan is best resolved by a short sale, the quicker they can re-establish their good standing and purchase another home another home, secured by a mortgage loan that is affordable and perhaps no longer underwater.

For FREE information regarding the benefits of short selling your home, please call (941) 206-6000.

Mike Sikorski, MBA, GRI

Licensed Real Estate Broker

MLS OF FLORIDA REALTY CORP.

22079 Kimble Avenue

Port Charlotte, Florida 33952

Phone (941) 206-6000

Email: Mike@FloridaRealty.net

THINK TWICE ABOUT “SHOPPING” FOR A MORTGAGE

MLS of FLORIDA Realty Corp. — Sat, 06 Dec 2008 20:29:49 -0600

Consumers "shopping" for a mortgage have taken on a new twist, leading to the creation of an information-sharing network by competing mortgage lenders.

In a desperate attempt to secure some forms of mortgage financing, loan applicants have turned to tailoring their loan application and loan documentation to that of what a mortgage lender is known by reputation for getting certain loan programs approved and closed. Think, "Telling them what they want to hear". This includes stating different sources of income and even alternative forms of credit, all in an effort to get the loan approved the way the applicant thinks the lender would like to see.

It is for these reasons competing mortgage lenders nationwide have created an information-sharing network to crosscheck loan applicants activity, such as income documentation and asset verification.

Using a mortgage loan applicants name and social security number, mortgage lenders nationwide have begun sharing pertinent applicant information as a way to safeguard mortgage lenders and investors from mortgage fraud. The information shared is based on specific information provided by the loan applicant, such as income and stated sources of income. This information is run through a database to see if this same loan applicant may have tried to apply for a mortgage loan with another mortgage lender, using different information. Loan applicants who provide conflicting information from one mortgage lender to another are not only immediately turned down for their loan request, are also subject to criminal charges of mortgage fraud, among others.

In addition to tracking consumer information, mortgage lenders are also tracking the names of mortgage brokers and loan originators who placed the loan with the mortgage lender, to see if potential fraud is being committed on the origination side and not the consumer.

In case you are wondering why a competitive group of mortgage lenders would band together in this effort, the answer is very simple. A majority of these lenders sell their loans their loans on the secondary market, and at some point in the future, could possibly sell their loans to each other. No mortgage lender wants to get stuck with a fraudulent loan, so a consensus of these mortgage lenders realized it was better to work together to combat mortgage fraud together.

Mortgage fraud is very serious crime, and is being taken seriously by mortgage lenders as well as law enforcement. The Federal Bureau of Investigation is current investigating thousands of cases of mortgage fraud, with consumers and so-called mortgage professionals being sentenced to lengthy prison terms and paying heavy fines as the direct result of committing mortgage fraud.

Think twice about the information you provide to a mortgage lender when applying for a mortgage loan. The assets and income you claim as well as the declarations you state on a mortgage loan application will be carefully scrutinized by mortgage loan underwriters, more so now than ever before. If you got away with mortgage fraud once, it is highly unlikely you'll succeed the next time around. And if you do succeed in committing mortgage fraud, just remember that months and even years later, you could get a knock on the door from someone with a badge in one hand, and handcuffs in the other.

For more information on how you can avoid mortgage fraud and predatory lending, please call 941-206-6000.

Mike Sikorski, MBA, GRI

Licensed Real Estate Broker

Licensed Mortgage Broker

Loss Mitigation Specialist

MLS OF FLORIDA REALTY CORP.

22079 Kimble Avenue

Port Charlotte, Fl. 33952

(941)206-6000

Mike@FloridaRealty.net

MORTGAGE LOAN APPROVALS USING NON-TRADITIONAL CREDIT

MLS of FLORIDA Realty Corp. — Fri, 05 Dec 2008 18:22:05 -0600

Homebuyers turned away due to lack of credit or credit scores do have a rather unconventional way to be approved without traditional credit or even a credit score.

Nontraditional credit is a widely used form of credit verification used by certain mortgage lenders for loan applicants who prefer not to use traditional forms of credit such as credit cards or car loans yet can provide a payment history on similar forms of ‘nontraditional" credit.

For several years now, mortgage lenders have recognized that loan applicants who choose to use non-traditional credit in place of traditional credit should not be penalized or discriminated, since proper verification of these non-traditional forms of credit can be treated to that of traditional forms of credit.

Non-traditional credit falls into two distinct categories that provide balance in assessing various forms of non-traditional credit. The categories are as follows:

Category I: Rent payments for an apartment or home, and utility bills such as electricity, water, telephone, propane gas, or cable TV. Rental payments made payable to a property management company for a home or apartment will usually require a Verification of Deposit, with no additional documentation required. However, if rental payments are made directly to a family member or private individual, 12 months of cancelled bank checks will be required. A letter of credit from utility companies will suffice as acceptable non-traditional credit.

Category II: Insurance payments, such as life, medical, automobile, & renter's insurance; child care providers, school tuition; department, furniture, appliance stores; specialty stores, rent to own; medical bills not covered by insurance; and Internet/cell phone services; savings accounts with regular monthly deposits (payroll deductions are not permissible) Personal loans from an individual with repayment terms in writing and supported by cancelled checks for 12 months are acceptable.

A minimum of three (3) credit references, including at least one (1) from Category I, must reflect 12 months of the most recent activity from the date of application. Credit from Category I is considered most important since it is the greatest indicator of a borrower's future housing payment performance. Borrowers with no credit references contained within Category I is considered insufficient by most underwriting standards.

All forms of non-traditional credit will have to be verified by an independent credit bureau. As each item of credit is verified, it will be added to your credit file as a Non-Traditional Mortgage Credit Report in the same manner as a traditional mortgage credit report. The name of the credit reference, as well as the date of opening, high credit, current status of the account, payment history, and any unpaid balances will be required for consideration by most mortgage loan underwriters. Although non-traditional credit will not trigger a credit score as required by most banks and similar lending institutions, a clear, consistent credit history reflecting no accounts delinquent more than 30 days in the most recent 12 month period will be treated similar to that of someone with good to very good credit scores.

It should be noted that borrowers who wish to apply for a mortgage loan using non-traditional credit will also be required to occupy the property as their primary residence AND may be required to have a minimum of two month's cash reserves at the time of loan settlement.

If you have been turned down for a mortgage loan by a bank or similar lending institution due to insufficient credit but have sufficient non-traditional credit, you may be able to finally purchase the home you have always wanted but could not get due to insufficient credit. With home prices more affordable now than in years past, now may be the best time for you to finance your next home using non-traditional credit. Loan programs are available through qualified mortgage lenders offering low, fixed interest rate mortgage loans as well as low down payments.

For more information about how non-traditional credit can benefit you, please call (941) 206-6000.

Mike Sikorski, MBA, GRI

Licensed Real Estate Broker

Licensed Mortgage Broker

Florida Realty Network LLC

22079 Kimble Avenue

Port Charlotte, Fl. 33952

(941) 206-6000

Mike@FloridaRealty.net

MORTGAGE FRAUD BEGINS AT LOAN APPLICATION

MLS of FLORIDA Realty Corp. — Fri, 05 Dec 2008 18:19:36 -0600

How far will you go to get the dream home you have always wanted, or the lowest interest mortgage available? Are you willing to claim assets you do not have, or income that you truly cannot prove to be true? If so, you could be facing a lengthy prison term and a very heavy fine.

The moment you sign a loan application that contains fraudulent information as it relates to income, debts, or assets, you have committed mortgage fraud. Even if you are turned down for a mortgage loan, or if a mortgage loan does not close, you can still be subject to prosecution for mortgage fraud.

It is illegal for a person to make any false statement regarding income, assets, debt, matters of identification, or to willfully overvalue any land or property, in a loan and credit application for the purpose of influencing in any way the action of a financial institution. The Federal Bureau of Investigation investigates these crimes where individuals could face up to 30 years in prison, a $1,000,000 fine, or both.

The following are examples of what is considered mortgage fraud:

* Providing false names, addresses, and Social Security numbers.

*Providing fraudulent documentation regarding income, such as Federal income tax returns,

W-2's, 1099's, and pay stubs.

*Intentionally overvaluing assets or failing to disclose debts or other liabilities

Even the submission of a loan application to a bank or mortgage lender that contains fraudulent information is considered Bank Fraud; put the loan application in the mail to the mortgage lender, it becomes Mail Fraud; send the application to a mortgage lender by facsimile (fax) or email, it becomes Wire Fraud.

Dishonest consumers and unscrupulous mortgage brokers have been known to go to great lengths to get a mortgage loan by means of fraud, simply to get a lower interest rate or a higher loan to value mortgage loan. Sometimes consumers and mortgage brokers will work together to commit mortgage fraud, and a mortgage broker may decide to take it upon themselves to commit mortgage fraud. You may be an unwilling participant to mortgage fraud, but if you put your signature on a loan application that may be inaccurate or fraudulent, you are just as guilty as the mortgage broker, and you both could end up paying a very heavy price.

There is home for sale or mortgage you have to have that is worth to the lengths of committing mortgage fraud. There is an excellent chance that you could get caught committing mortgage fraud, even before a mortgage loan has closed. In fact, most instances of mortgage fraud are caught at the very beginning; at the time the loan application is made.

Banks and most mortgage lenders are highly trained to look for various types of mortgage fraud, by analyzing your loan application and income documentation, looking for red flags that could be some form of mortgage fraud. For example, the income tax returns you provide to a mortgage lender can be verified for accuracy through the IRS in as little as 48 hours, verifying the income you are claiming on the tax returns you gave the mortgage lender is the same as you are reporting to the IRS. The advent of computer software programs such as tax preparation & payroll software easily purchased at your local office supply store have given banks and mortgage lenders even more reason to scrutinize your tax returns, w-2's, 1099's, and pay stubs, looking to make sure everything is where it should be.

If your bank or mortgage lender catches you committing fraud, they may not even tell you about it. They could simply turn your loan application down and not say another word. It's when you get a knock at your door from an FBI agent or some other law enforcement official that you know you have been caught.

The best way to avoid mortgage fraud is to not be a party to fraud. If you apply for a mortgage loan, provide only accurate and truthful information from the start. Make sure the loan application that you place your signature on is truthful and accurate. The signature on the loan application is you attesting that the information provided by you is truthful and accurate. Make sure the bank or mortgage lender you choose is, honest, & trustworthy. Check references, question their experience in residential lending, and try to avoid overzealous mortgage brokers bent on getting you a mortgage loan at any cost. Even when you attend the loan closing, make sure the loan application you sign is truthful and accurate. Any information on the loan application that may be untruthful or inaccurate becomes valid at the time you sign that loan application. If there is incorrect information on the application at your loan closing, it is better to put the closing off until the loan application is corrected. It could possibly delay the loan closing from happening all together, but it could help avoid having to answer questions later, and save you from a lengthy prison term and heavy fine later.

There is no dream home or low interest mortgage you have to have if it means committing mortgage fraud, and there are no second chances if you are caught committing mortgage fraud. The home or mortgage you receive today through mortgage fraud could offer severe consequences later. That knock on your door could likely be someone holding a badge in one hand with handcuffs in the other.

Mike Sikorski, MBA, GRI

Licensed Real Estate Broker

Licensed Mortgage Broker

Loss Mitigation Specialist

Florida Realty Network LLC

22079 Kimble Avenue

Port Charlotte, Fl. 33952

Phone (941) 206-6000

Mike@FloridaRealty.net

LOAN APPROVALS JUST GOT TOUGHER

MLS of FLORIDA Realty Corp. — Fri, 05 Dec 2008 18:16:57 -0600

Getting a mortgage loan approval is about to get a lot tougher as both Fannie Mae and Freddie Mac have opted to toughen underwriting guidelines for conventional mortgage loans as a direct result of the current housing and mortgage crisis.

Revised mortgage loan underwriting guidelines will call for higher credit score requirements, increased private mortgage insurance premiums, and lower loan to values (LTV's) for cash out refinance mortgage loans. In addition, risk factors such as previous bankruptcies, foreclosures, and previous mortgage payment delinquencies will require longer recovery periods for conventional mortgage loans.

How a particular mortgage loan application is submitted for approval will depend largely on whether the application is submitted electronically through Fannie Mae's Desktop Underwriter (commonly referred to as DU) or non Automated Underwriting Submission.

Loans submitted through Desktop Underwriter typically require fewer loan stipulations, making it easier to get approved quickly. Non-Automated Underwriting, which requires an experienced mortgage loan underwriter to review the loan application, requires greater scrutiny and typically takes longer to get an approval; however, manually underwritten loans are more forgiving for loan applicants with lower credit scores, unlike DU which prefers higher credit scores.

A loan officer or mortgage broker will typically have only one opportunity to submit the loan application correctly, since choosing the wrong option could have very negative effects to the loan applicant.

The following is a review of the new changes to the underwriting guidelines:

Debt to Income Ratios: Currently DU will accept debt to income ratios of up to 45% of the loan applicant's gross monthly income. The new DU guidelines call for more conservative debt ratios. The exact debt ratio will be determined based upon the applicant's credit scores and other risk factors. Non-Automated Underwriting guidelines will typically allow for no more than 36% of the loan applicants gross monthly income.

Mortgage Delinquencies: An applicant who has been no more than 60 days late on their mortgage in the last 12 months is "Ineligible" for loan approval, where previous guidelines allowed for a "Refer with Caution". The new changes apply to manually underwritten loans as well.

Foreclosures: loan applicants who have a previous foreclosure must wait a minimum of 5 years AFTER the foreclosure was satisfied, unless extenuating circumstances existed, which would allow a minimum of 3 years for consideration. Applicants will be required to put down a minimum of 10% AND have a minimum middle credit score of 680. Applicants applying for a cash-out refinance will be required to wait a minimum of 7 years after the foreclosure is satisfied to obtain a conventional mortgage loan.

Bankruptcies: Applicants who have filed for bankruptcy in the last 24 months or a bankruptcy that is not yet discharged regardless of the bankruptcy filing date are no longer eligible, whereas previous guidelines for consideration for applicants with compensating factors.

Cash out Refinances: Loan applicants with credit scores below 700 can expect to pay a minimum of 1 point for mortgage loans using more than 80% of the property's appraised value. Lower credit scores coupled with higher loan to value loans will require loan applicants to pay as much as 4 points.

Although Fannie Mae and Freddie Mac are tightening up on their underwriting guidelines, there are still several very viable financing options that are more forgiving with credit issues, credit scores, and debt to income ratios. FHA mortgage loans are growing in popularity, making it possible for applicants to qualify for financing with more liberal underwriting guidelines. And there are still several loan programs available that fall in line with Fannie Mae and Freddie Mac, offering higher loan to values and debt to income ratios.

For a FREE brochure offering tips on shopping for a mortgage as well as the many differences in mortgage loan programs, please call 941-206-6000.

Mike Sikorski, MBA, GRI

Licensed Real Estate Broker

Licensed Mortgage Broker

Loss Mitigation Specialist

Florida Realty Network LLC

22079 Kimble Avenue

Port Charlotte, Fl. 33952

Phone (941) 206-6000

Email: Mike@FloridaRealty.net

IS YOUR LANDLORD MAKING THEIR MORTGAGE PAYMENT?

MLS of FLORIDA Realty Corp. — Fri, 05 Dec 2008 18:14:56 -0600

Just when you thought the housing and mortgage crisis was limited to only homeowners, a new victim has been brought into the fray, one who doesn't own a home or have a mortgage. Who are these new, unsuspecting victims? The people who are actually renting homes!

Thousands of homeowners (namely investors and property speculators unable to sell homes purchased in the recent sellers market) have opted to rent their homes to help offset their monthly debt service. Low market rents compared with high risk, high interest mortgage payments are causing many investors to go ‘out of pocket' to pay the difference each and every month, creating a negative cash flow position costing hundreds and sometimes even thousands of dollars monthly in subsidized debt service payments.

"Robbing Peter to Pay Paul" Landlords/investors juggling several properties with negative cash flow are often seen prioritizing which mortgages should get paid first. This can prove especially difficult after doing this for several months, in most cases providing disaster results. Poor bookkeeping coupled with a consistently delinquent mortgage history are causing many landlords to default on their mortgages all together, leaving many of their tenants with no place to go.

"...But I'm paying My Rent on Time!!" A perfect rental history may still get a tenant evicted from their homes, especially those tenants renting from landlords' facing a property foreclosure. The rental lease you signed with your landlord may afford you some legal remedies, but in most cases may not help you if your landlord ends up in foreclosure. If your landlord does end up in foreclosure, they might not tell you directly, but you will find out soon enough, when a sheriff's deputy or other process server serves you, the tenant, with a summons for foreclosure. Your actual name likely will not appear on the summons, except as Tenant #1, 2, 3, & 4. The summons is merely to inform you that the leasehold interest you have in the property is at risk of foreclosure. At this point, you should strongly consider seeking the advice of a competent attorney to help you understand your rights as a tenant. The rents you pay today may only end up in your landlord's pocket, with no assurances that your landlord will honorably pay their monthly mortgage payment.

So You Want To Rent Me your Home.... Although it is customary for the landlord to interview a prospective tenant, in these times, it may be just as important for a tenant to interview the prospective landlord. Before you sign a lease for the next home that you rent, ask your prospective landlord about the number of homes they are currently renting out, as well as the number of year's experience they have as a landlord. Ask them about their take on the current mortgage and housing crisis, especially their thoughts on the high number of rentals falling into foreclosure. It may not hurt to do quick search of the Public Records with the Clerk of the Circuit Court in your county may show pending lawsuits or foreclosure actions against a prospective landlord. Access to these records is easily attainable over the Internet.

Help Your Landlord, Help Yourself. The difficulty a landlord has in making their monthly mortgage payments could present a real opportunity for you, the tenant, to actually purchase the home you're renting. Depending on the market value of the home you are renting, how much your landlord owes on their mortgage, and how much you can afford to pay each month you may present a real opportunity for you to purchase the home through a short sale, provided that your landlord's mortgage lender will approve of a short sale. If this is not an option, and you find out the home you are renting is in foreclosure, consider having a frank and open discussion with your landlord regarding the remaining term of your lease and how it may be affected by a potential foreclosure on the property you live in. Inquire about any security deposits you may have paid at the beginning of the lease. If your landlord is uncooperative, you may want to consult a competent attorney immediately.

Get All of Your Ducks In A Row A foreclosure action against your landlord could pose potential problems for you should you decide to rent somewhere else. A sudden move in the middle of a lease could raise questions from future landlords, so proper documentation by you to support your rental history is critically important. Some examples of proper documentation to consider are as follows:

*Pay all monthly rent payments and security deposits by personal check, bank check, or money orders. Paying cash proves nothing in terms of a rental history, and provides no support to you should you seek to recover any security deposits. Always pay in a format that can prove your honesty.

*Keep copies of cancelled checks to show a consistent payment history. Cancelled checks are the most effective way to show your ability to make monthly rent payments on time as well as the frequency of paying your rent at a certain time every month. A consistent payment history can provide indisputable proof that you are a good risk.

*If you are served a foreclosure summons, keep a copy for your records. If the rental you are living in does fall into foreclosure, you are likely to be served foreclosure papers as well, since you have a leasehold interest in the property. If you lose your rental as a result of a foreclosure through no fault of your own, the foreclosure papers you are served along with the documentation noted above will greatly enhance your chances of securing another rental with greater ease, and will also help you tremendously in the event you decide to purchase a home of your own in the near future.

You may not always know if your landlord is making their mortgage payments, but through careful landlord screening and proper documentation, you can protect yourself and minimize the chance of facing eviction by foreclosure.

For free copy of "Ten Tips for Tenants" or a free brochure on "Why Rent When You Can Buy?" please call 941-206-6000.

Mike Sikorski, MBA, GRI

Licensed Real Estate Broker

Licensed Mortgage Broker

Loss Mitigation Specialist

Florida Realty Network LLC

22079 Kimble Avenue

Port Charlotte, Florida 33952

Phone 941-206-6000

Mike@FloridaRealty.net

HOW A LOAN APPROVAL BECOMES A LOAN DENIAL

MLS of FLORIDA Realty Corp. — Fri, 05 Dec 2008 18:10:42 -0600

The loan approval that you receive today could fail to close due to the lack of follow through required by consumers and their loan officers as stipulated directly within the loan approval itself.

A loan approval contains several stipulations by a mortgage underwriter that requires the verification of a number of issues primarily dealing with income and credit. Failing to meet the stipulations of the loan approval EXACTLY as written in the loan approval will likely change your loan approval into a loan denial.

Job Loss or Job Change. Proving you have the ability to pay a loan back to a lender is probably the most important attribute to a loan approval. Losing your job before your loan closes is a serious setback that could cancel your loan approval automatically.

Even if you experience a change in your employment status, a mortgage loan underwriter will need to re-evaluate your entire loan application to ensure that you still qualify for the initial loan approval. A loss in income could result in a lower loan amount, which could require you to accept less money if you are refinancing a mortgage on your current home, or put down more money if you are purchasing a home. Worse yet, a loss in income will likely increase your debt to income ratios and likely disqualify you from the initial loan approval all together!

I have known several instances where consumers either changed employers or lost their jobs entirely, and failed to disclose this to their mortgage lender, thinking that no one will notice. Mortgage lenders will re-verify your employment up until the day of your loan actually closing, so it is highly advisable that you tell you are upfront about any change in your employment status. Failing to disclose a change in employment has caused many loan underwriters to turn a loan down automatically.

Failing to disclose a job change to your mortgage lender could result in lengthy delays to your loan approval getting to the closing table. Some loan underwriters may question why you failed to disclose a job loss or job change, viewing this as an attempt to deceive or defraud the mortgage lender, which could result in an immediate loan denial.

Low Credit Scores. The current real estate and mortgage crisis has caused many mortgage lenders to re-evaluate the risks they are willing to take with consumers whose credit scores are below 600. Several mortgage lenders are honoring some loan approvals with credit scores below 600, but there is no guarantee that the approval will be honored 30 days after the approval was initially offered. Applying for new credit while your loan is in process could also decrease your credit scores, potentially causing your loan approval to be denied.

Increased Consumer Debts. The purchase and finance of a new automobile or adding new credit cards while your loan is in process will likely change your debt to income ratios, making the loan you initially were approved for no longer affordable.

Excessive Monthly Housing Expenses. The monthly housing expenses calculated within your loan approval contain estimated costs for the principal and interest payment, as well as calculations for property taxes, hazard insurance, flood insurance, and mortgage insurance. The underwriter verifies these expenses, and depending on your debt to income ratios, cannot happen.

Failing To Lock In Your Interest Rate. Floating interest rates during a turbulent economy is a gamble almost not worth risking. Interest rates can change daily, and depending on various events happening worldwide, the interest rate for your loan approval could change rapidly, thus changing your loan approval as well.

Three of the items above are easily avoidable, if you follow through by taking the necessary steps to ensure that these issues do not occur:

*When you find a good interest rate, lock it in immediately. Most mortgage lenders will honor interest rate locks for 30 days, giving you sufficient time to process your mortgage loan and clear all conditions set forth by the mortgage loan underwriter.

*No Major Credit Purchases. Smart loan underwriters will pull an updated credit report just before your loan is set to close to make sure nothing dramatically has changed on your credit report. Avoid major credit purchases at all costs before your loan closes.

*Review Monthly Housing Expense Budget in Your Loan Approval. Verify the interest rate that you applied for is the same interest rate available for the loan approval you were given. Property tax calculations are based on worse case, so use the amount due March 31, not when discounts apply in November. New construction home purchases with property taxes levied on land only will be given an estimate of future property taxes based on similar homes in the area. Verify annual insurance premiums for any potential cost increases.

Consumers faced with the prospect of a job of a change in employment should strongly consider contacting their loan officer to verify that the original loan amount applied for is still possible; a loss in income will certainly have an effect on the original loan approval, and could require a loan approval for a lesser loan amount, or worse yet, a loan denial.

The loss of a job without a job to replace it will almost certainly require a loan denial.

Mortgage loan approvals can be very tricky, especially for those consumers who may run the risk of falling into any of the issues above. Knowing how to avoid these potential pitfalls will certainly create shorter path in getting to the closing table. Working with an experienced loan professional will certainly help you to accomplish this.

Mike Sikorski MBA, GRI

Licensed Real Estate Broker

Licensed Mortgage Broker

Loss Mitigation Specialist

Florida Realty Network LLC

22079 Kimble Avenue

Port Charlotte, Fl. 33952

941-206-6000

Mike@FloridaRealty.net

Fix Credit Issues BEFORE Shopping For a Home

MLS of FLORIDA Realty Corp. — Fri, 05 Dec 2008 18:07:39 -0600

Financing the purchase of a home is getting more difficult these days, especially for those consumers who may have recent or past credit delinquencies in their credit file.

Credit score requirements by most mortgage lenders are changing on a weekly basis, requiring no less than a 580 middle score from the three credit repositories: Transunion, Experian, & Equifax.

Many of the loan approvals issued by banks and mortgage lenders over the last several months have failed to close due to these changes in the credit score requirements, leaving many potential homeowners without the means necessary to finance their home purchase.

In years past, banks and mortgage lenders had the ability to finance home purchase for consumers with low credit scores, recent delinquency and even a recent bankruptcy. Well, those are long gone, with the large number of foreclosures around the country as evidence of substandard underwriting of consumers with low credit scores.

Today, thousands of consumers with credit issues still choose to shop for a home first sign a purchase contract for a home they think they can afford, and then take their chances of securing financing with a bank or mortgage lender.

I still find consumers with credit issues armed with a purchase contract, running from bank to bank, mortgage lender to mortgage lender, scrambling to find someone to finance their home purchase. In most cases, they fail to get their financing, fail to get their home, and could likely lose the deposit on the purchase contract.

Here are some tips on helping you to deal effectively with your credit issues:

*Get a FREE copy of your credit report from all three credit repositories. All three credit repositories (Transunion, Experian, & Equifax) allow consumers one free credit report per year. Other firms such as www.FreeCreditReport.com can provide you with additional services such as credit analysis and helpful information on improving your credit.

*Use Your FREE Credit Report When Shopping For a Mortgage. Mortgage lenders are anxious to see your credit report, especially your credit scores. Bring the free credit report to your loan officer when you first apply for a mortgage. The information contained within your free credit report should provide sufficient information for the loan officers to determine if your credit works within their own underwriting guidelines. A competent, experienced loan officer will easily understand the information on this report. If a loan officer insists on ordering his or her own credit report on you before committing to a loan approval or denial, consider applying with another bank or mortgage lender. Needless inquiries into your credit file can lower your credit scores as well as decrease your chances for a loan approval.

*Get Approved For Financing BEFORE You Sign A Purchase Contract. Knowing how much you can afford in terms of loan amount and the monthly loan payment is most important. Signing a purchase contract for a home without first knowing that you can afford to purchase the home will not only create disappointment for you, it could also obligate you to purchase the home anyway, depending on the legal verbiage of the purchase contract. Knowing how much you can

*If Your Loan Request is Denied, Work diligently to fix your Credit Issues. Deal with your credit issues by contacting creditors directly to clear up the delinquencies. Consult with a credit counselor about payment plans that can help you re-establish a payment history and even help to re-establish your credit. Consumers with serious credit issues should consider consulting with an attorney who specializes in bankruptcy.

Working to correct credit issues will make it easier to secure better financing options when you are ready to purchase a home. Choosing to ignore your credit issues when applying for a mortgage loan makes it less likely you will get the financing you desire. With increased credit standards asked for by most mortgage lenders, ignoring credit issues to today will certainly diminish your chances of securing financing in the future.

Mike Sikorski MBA, GRI

Licensed Real Estate Broker

Licensed Mortgage Broker

Loss Mitigation Specialist

Florida Realty Network LLC

22079 Kimble Avenue

Port Charlotte, Fl. 33952

(941)206-6000

Mike@FloridaRealty.net

FINANCING THE “AS-IS” HOME PURCHASE

MLS of FLORIDA Realty Corp. — Fri, 05 Dec 2008 18:05:19 -0600

The loan approval from your bank or mortgage lender to finance a home purchase may not include many homes for sale in "As-Is" condition, so it is critically important that you recognize this before committing yourself to a purchase contract.

Several purchase contracts have failed to close recently due to various banks and mortgage lender's refusal to finance homes in serious disrepair. Many of these homes are classified as homes listed for sale in as-Is condition, and likely could still have had a successful closing provided that the correct method of financing the purchase was in place from the beginning.

When a buyer first makes application for a mortgage loan, it is critically important that they inform their loan officer what their intentions are in terms of the type of home they intend to purchase. Your loan officer can address what types and conditions of homes are acceptable to their lending guidelines. Homes in serious disrepair are less likely to get approval from most banks, and several mortgage lenders will likely consider financing a home in need of repairs, provided that escrows are set up to ensure vendors and contractors are compensated once the necessary repairs are completed.

Why consider the purchase of a home in as-is condition?

Homes for sale in as-is condition tend to be priced more competitively, given the current condition of the property. The tricky part is getting the right financing to purchase a home in as-is condition, so it is very important that you understand what a home in as-is condition is, and how to successfully secure a purchase contract for a home and also get the right financing, the first time.

Unlike homes for sale where a seller has offered a Seller's Real Property Disclosure that allows the seller to disclose defects or facts that materially affect the value of the property but may not be readily observable to a buyer, a seller will typically a home for sale in as-is condition due to either the fact that repairs need to be completed but not by the seller, or the seller may have little or no immediate knowledge of the property' condition, as in the case of many investors.

In most cases, banks and mortgage lenders will offer financing for most of these homes, provided of course that all necessary repairs are completed PRIOR to funding the purchase. In some cases, a mortgage lender may allow for the escrow of funds for the repairs to be completed after the loan closing, with the bank, mortgage lender, or Title Company directly responsible for the disbursement of the funds needed to complete the repairs for the home.

Why is this important to know? The loan approval that you receive from your bank or mortgage lender will determine whether the repairs need to be complete prior to your loan closing, and if they will allow for funds to be held in escrow to complete these repairs.

For example, FHA and VA mortgage loan programs will require all necessary repairs be completed prior to the loan closing. Examples of necessary repairs are typically related to structural issues such as the roof on the home, cracks in the foundation or walls of the home, or other issues that may not make the home immediately habitable. All of this is subject to the individual mortgage loan underwriter.

Often times a home may be listed for sale in "as-Is" condition simply because of cosmetic issues, such as paint, soiled carpeting, poor landscaping, etc. Most mortgage loan underwriters will likely overlook these issues, depending on their severity.

Currently, there are over 1200 homes for sale in our local Multiple Listing Service that are being offered in "As-Is" condition, with almost 400 of these homes classified as "repaired', likely from the damage incurred from hurricane Charley. Other homes for sale ‘as-is' appear to be in good condition, with many others in need of serious repair.

Before you sign a purchase contract for a home in as-is condition, you should consider getting all of the facts upfront, especially on how a home purchased in as-is condition directly affects your loan approval. Find out what your bank or mortgage lender considers ‘acceptable' condition for a home that they would finance. Again, most banks and mortgage lenders will require all necessary repairs to be completed prior to a loan from closing. If the repairs are extensive, you may want to discuss this with your real estate professional, as the sale of the property could hinge on the repairs being completed, and the seller may opt to complete those repairs just to get the sale completed.

Consider hiring a home inspector to inspect the home first before signing a purchase contract. You may find that the repairs needed to make the home habitable may be too expensive, and will likely have an adverse affect on securing the financing that you need to complete the purchase of the home. The cost of a home inspection could be money well spent, especially if it helps the buyer recognize the costs associated with purchasing certain as-is homes in need of repair.

If you do sign a purchase contract first prior to a home inspection, consider using a purchase contract that gives you an out from having to purchase the home if the cost of the repairs exceeds a certain dollar amount. If you only have $2000 to complete the repairs and the cost estimates for the repairs are over $2000, you may be able to negotiate this with the seller for the difference, or simply opt out of the purchase agreement.

Purchasing a home in as-is condition requires special attention, especially when it comes to financing the purchase of a home in as-is condition with a bank or mortgage lender. Recognizing the potential pitfalls with financing a home in as-is condition can save the buyer from needless headaches, costly repairs, and unnecessary mortgage loan denials.

For a free copy of the Seller's Real Property Disclosure Statement, please contact 941-206-6000.

Mike Sikorski, GRI
Licensed Real Estate Broker

Licensed Mortgage Broker

Loss Mitigation Specialist

Florida Realty Network LLC

22079 Kimble Avenue

Port Charlotte, Florida 33952

Phone 941-206-6000

Email: Mike@FloridaRealty.net

COMMIT MORTGAGE FRAUD AND PAY A HEAVY PRICE

MLS of FLORIDA Realty Corp. — Fri, 05 Dec 2008 18:03:18 -0600

Question: What do you get when you combine a dishonest mortgage broker, dishonest title agent, and a dishonest real estate appraiser? Answer: heavy fines as well as a lengthy prison sentence!

Law enforcement officials and government regulators are cracking down hard on people involved in all aspects of the real estate business who commit or conspire to create fraudulent mortgage loans as well as illegally obtain mortgage loans, which ultimately costs tens of billions of dollars to both mortgage lenders and consumers each and every year.

Recently, Federal agents in both Miami and Anchorage, Alaska have charged numerous people with scheming to defraud banks and mortgage lenders out of millions of dollars in illegally obtained mortgage loans. These individuals include home sellers, so-called ‘straw' buyers, real estate agents, title agents, real estate appraisers, bank employees and mortgage brokers, all d in the purchase & sale of properties using inflated real estate appraisals, fraudulent loan documents, as well as inflated mortgage loans, allowing these people to pocket millions of dollars. Kickbacks and bribes were paid to cooperating home sellers with the remaining individuals earning illegally obtained commissions in their respective professions.

These various individuals are now facing charges of mail fraud, bank fraud, wire fraud, money laundering, as well as giving false statements (e.g. signing loan documents you know to be false!), with penalties involving lengthy prison terms as well as millions of dollars in fines. The home sellers themselves are also faced with these same charges.

In these particular cases, the persons involved seem so far away, especially with Anchorage Alaska thousands of miles away from Florida. Yet you may not know it, but mortgage fraud has occurred right here, in our own back yard!

Numerous homeowners in and around our community as well as nationwide have obtained fraudulent mortgage loans to either purchase a home or refinance the mortgage on their current home, who under normal circumstances would have never received a mortgage loan of the amount they did. As a result, many of these same homeowners are now facing the very real prospect of losing their home to foreclosure.

Recently, I have personally spoken with well over 100 homeowners in and around our community who have disclosed some rather unorthodox methods of purchasing and financing real estate, all of which was accomplished with the aid of some very unscrupulous mortgage brokers, mortgage bankers, title agents, real estate appraisers, and yes, even real estate agents. In almost every case, each of these homeowners has obtained a mortgage that would never be approved by an honest mortgage loan underwriter. Each homeowner had debt to income ratios that almost doubled what a conventional mortgage loan underwriter would find acceptable. Each of these homeowners had fully documented income sources, with no job or income changes since their loan was first obtained. You may be asking yourself, how could this happen? How can someone get a mortgage loan they know they cannot afford, and yet somehow still qualify for what amounts to be a very unaffordable mortgage loan? Mortgage fraud, pure and simple.

These days it seems mortgage fraud is involving more than the usual suspects. Now the actual home owners and home sellers are getting involved, perhaps not realizing that their involvement alone subjects them to the same scrutiny of that of anyone else involved in a fraudulent transaction. Falsifying income tax returns, creating pay stubs, and conspiring with others to re-create an income or credit history is being accomplished by real estate professionals, mortgage professionals and consumers alike, all in the effort get something that you would normally not qualify for.

The current mortgage and real estate crisis we are now faced with is definitely giving pause to many, especially those faced with losing their homes to foreclosure. However, those people involved in many of these mortgage loans that were obtained fraudulently should be more concerned about how they may be judged in the near future, should they get caught being a party to mortgage fraud.

There is no home or mortgage loan you must have that means having to commit mortgage fraud to get it. One can only hope that seeing this mortgage and real estate crisis first hand will cause them to think twice about being a party to mortgage fraud.

Reading articles like this one about mortgage fraud is one thing; actually reading the headlines of the arrests & indictments of people within their own community and seeing the names of the actual individuals facing serious prison time has to be a real wake up call. Let's hope everyone wakes up today, and realize that the mortgage fraud you commit today may end up costing you your freedom tomorrow.

Mike Sikorski, MBA,GRI

Licensed Real Estate Broker

Licensed Mortgage Broker

Loss Mitigation Specialist

Florida Realty Network LLC

22079 Kimble Avenue

Port Charlotte, Florida 33952

Phone 941-206-6000

Mike@FloridaRealty.net

Beware of ‘Bait & Switch’ for Closing Costs & Interest Rates

MLS of FLORIDA Realty Corp. — Fri, 05 Dec 2008 18:01:06 -0600

The interest rates and closing costs that you shop for today for a mortgage loan could be dramatically different when you get to the closing table.

Unscrupulous mortgage broker and bank loan officers are intentionally quoting low interest rates and even lower closing costs as a way to get consumers to stop further shopping for a mortgage loan, and sign on with them. By the time the loan closing occurs, the interest rate jumps up as well as the closing costs, putting the consumer at a disadvantage that is both highly illegal and unethical.

In most cases, the unscrupulous loan officer or mortgage broker will quote the interest rates and closing costs over the telephone, even before a loan application is taken or a credit report is ordered. This is in itself is highly illegal, and is one of the most abusive tactics within the mortgage industry. Unless a bank or mortgage lender is offering a truly non-qualifying mortgage loan program with regard to credit or income, they cannot tell you what interest rate you will be charged or what the amount of the closing costs will be for your particular loan request, without first getting ALL of the information needed to make a determination of interest rates and/or closing costs. Yet, this abusive lending tactic goes on every day, with the loan officers and mortgage brokers benefiting at the expense of the consumer.

The Good Faith Estimate (or GFE) that a consumer receives at the time of loan application will contain a list of closing costs that a consumer can expect to pay for a given mortgage loan. The list of costs will include points, appraisal fees, as well as closing fees that are known to the lender at the time of application. Ideally the costs contained in the initial Good faith Estimate should resemble that of the closing costs appearing on the HUD-1 Settlement Statement which you would receive at the actual loan closing.

In the case of loan officers and mortgage brokers using ‘Bait & Switch' tactics, the loan costs on the initial Good Faith Estimate will most likely appear to be significantly lower than that of what the consumer will truly end up paying at the loan closing. Additionally, the interest rate could also change significantly from the time of application, and often times goes without explanation by the loan officer or mortgage broker, leaving the closing agent to sell both interest rate and the closing costs. Depending on the immediate needs of the consumer, the loan may close anyway, with the consumer never knowing why their closing costs increased or why the interest rate increased until its too late to say anything.

The practice of ‘Bait & Switch' is not only abusive; it is highly illegal. Under Federal law, loan officers and mortgage brokers are subject to very steep fines as well as possible criminal charges for committing ‘Bait & Switch', as well as other abusive practices.

The Real Estate & Settlement Procedures Act of 1974 (or RESPA) requires that consumers receive the following:

*A Good Faith Estimate, containing an estimate or a range of charges

*A copy of Buying Your Home, offering a detailed explanation of what closing costs are, as well as other helpful information.

*A HUD-1 Settlement Statement, providing a detailed list of the closing costs you will pay for your loan closing.

Loan officers and mortgage brokers are required to re-disclose any changes in closing costs or interest rates to mortgage loan applicants as often as necessary to keep the consumer informed as to any changes that may occur. If changes occur in the closing costs, a new Good Faith Estimate is required to be given to the loan applicant. If changes in the interest rate occur, a Truth in Lending (or Til as it is known) disclosure may also be required.

The only way for these abusive lending practices to stop from happening, is for you, the consumer, to stop it from happening. If you let these unscrupulous loan officers and mortgage brokers get away with committing this crime, you are allowing yourself to unnecessarily become a victim of this abuse.

The following are some tips to help you prevent becoming a victim of ‘Bait & Switch' and other abuses commonly used by these predatory lenders:

*Demand an ‘honest' Good Faith Estimate at the time of loan application. Let your loan officer or mortgage broker know you have read articles about common lending abuses such as the ‘Bait & Switch', and let them know you will not be a victim. Hopefully this upfront disclosure by you from the start will keep them honest, minimizing any chance that the Good Faith Estimate they give you is as accurate as possible.

*Keep regular contact with your mortgage lender. Ask them for updates on any changes in your loan status, or if they anticipate any changes in the closing costs or the interest rate. If there are changes, demand that they give you new disclosures immediately that reflect those changes.

*Be a smart Loan Shopper. Ask the right questions, beginning with the years of lending experience that a given loan officer or mortgage has. Then ask about the loan programs that they offer, such as FHA, VA, & Conventional mortgage loan programs. Ask about the likelihood of the closing costs and interest rates changing from the initial disclosures given to you, and the reasons for why they might change. Never give a loan officer or a mortgage broker verbal authorization order your personal credit report, without first signing all of the Federally required mortgage loan disclosures.

*Demand to see the HUD-1 Settlement Statement before the loan closing occurs. Federal law requires that HUD-1 Settlement statement be made available to you at least 24 hours prior to the actual loan closing. This gives you an opportunity to see the true closing costs ahead of the closing without the pressure of sitting at the actual loan closing. Any discrepancies in the closing costs should be addressed immediately, especially if these discrepancies were not re-disclosed to you prior to the loan closing

More importantly, don't fall for the fast talking sales pitch that tells you everything you want to hear. Often times, the answers you may want to hear are not always possible. The unscrupulous loan officer or mortgage broker will try to tell you everything you want to hear, even if it means using half truths about interest rates and closing costs. The right mortgage broker or loan officer is the one who will offer you straight forward advice, with many mortgage programs to choose from, and will likely never give you interest rate or closing costs information over the telephone without first taking a complete loan application, pulling credit, and reviewing all income documents. Anyone who does give you interest rate and closing costs information over the telephone without this information is breaking the law.

Keep in mind that Interest rates and closing costs are important, but the loan you receive will likely cost you thousands of dollars over the life of the loan, and choosing the right loan program will help minimize just how much you do pay over the term of the loan.

You can easily avoid becoming a victim of ‘Bait & Switch' tactics and other abuses by choosing your mortgage broker or loan officer wisely. Experienced loan officers and mortgage brokers can help you get the mortgage loan you are looking for, with the right interest rate and competitive loan costs. Choosing the wrong loan officer or mortgage broker can just as easily happen, with consequences far too expensive to even consider.

For free copy of "Buying Your Home" or other information regarding mortgage loan programs, please call 941-206-6000.

Mike Sikorski, GRI

Licensed Real Estate Broker

Licensed Mortgage Broker

Florida Realty Network LLC

22079 Kimble Avenue

Port Charlotte, Florida 33952

Phone 941-206-6000

Email: Mike@FloridaRealty.net

Most Short Sales, Foreclosures Unnecessary

MLS of FLORIDA Realty Corp. — Fri, 05 Dec 2008 17:57:51 -0600

Most of the properties for sale as Short Sales as well as properties currently in foreclosure are unnecessary, so property owners should strongly consider all of their options before taking the steps towards certain financial ruin and seriously derogatory credit.

The use of Federal and State lending laws could dramatically alter the ever-increasing number of homes for sale as a short sale, as well decreasing the large number of foreclosures and bank-owned properties. More importantly, homeowners can keep their homes and improve their credit rating.

A thorough review of all mortgage loan documents, including the initial loan application and disclosures up to the final closing documents should be carefully reviewed for lending law violations that have been found in over 80% of mortgage loans originated in the last five years. This in turn could give their current mortgage lender the encouragement necessary to modify the mortgage loan to more favorable terms, such as a principal loan reduction and/or a low fixed interest rate, regardless of the homes current value!

Long before the recent call for sweeping changes to mortgage loan underwriting guidelines, Federal lending laws such as RESPA, TILA, HOEPA and other acronym-shortened lending laws were enacted to prevent much of the abuses that have recently been found in thousands of subprime credit and conventional mortgage loans, especially those mortgage loans originated in the last three to five years.

The combination of toxic mortgage loans coupled with unscrupulous mortgage brokers and out of state mortgage lenders who originated high cost, high interest loans at the expense of consumers often represent the largest portion of error-filled mortgage loans. Tens of thousands of these problematic mortgage loans have been found to violate at least one Federal and/or State Lending laws that could present trouble for mortgage lenders, and opportunities for consumers to make their mortgage loan affordable and less risky.

Homeowners considering a short sale of their home or are facing the certainty of a foreclosure on their home are strongly urged to contact a qualified and experienced Mortgage Loan Auditor right away to have an extensive Forensics Audit of their mortgage loan documents. Many audits can be completed in as little as five days, and could be very useful in modifying their mortgage loan and/or stopping a foreclosure.

If your home is currently listed for sale as a Short Sale, a Forensic Mortgage Loan Audit can still be completed, since most mortgage lenders desire to have the home listed for sale as a Short Sale even when the customer requests a mortgage loan modification.

Whether it is your goal to seek a mortgage loan modification, loan reinstatement, or rescission of your mortgage loan all together, proper use of these lending laws as a means of dealing directly with your mortgage lender does give you advantages in helping you keep your home while at the same time leveling off ever decreasing property values due to unnecessary short sales and foreclosures.

Mike Sikorski, MBA, GRI

Licensed Real Estate Broker

Licensed Mortgage Broker

Loss Mitigation Specialist

Florida Realty Network LLC

22079 Kimble Avenue

Port Charlotte, Florida 33952

941-206-6000

Mike@FloridaRealty.net

IS YOUR LANDLORD MAKING THEIR MORTGAGE PAYMENT?

MLS of FLORIDA Realty Corp. — Tue, 25 Nov 2008 02:02:14 -0600

For free copy of "Ten Tips for Tenants" or a free brochure on "Why Rent When You Can Buy?" please call 941-206-6000.

Mike Sikorski, MBA, GRI

Licensed Real Estate Broker

Licensed Mortgage Broker

Loss Mitigation Specialist

Florida Realty Network LLC

22079 Kimble Avenue

Port Charlotte, Florida 33952

Phone 941-206-6000

Mike@FloridaRealty.net

THINK TWICE ABOUT "SHOPPING" FOR A MORTGAGE

MLS of FLORIDA Realty Corp. — Tue, 25 Nov 2008 01:58:26 -0600

Consumers "shopping" for a mortgage have taken on a new twist, leading to the creation of an information-sharing network by competing mortgage lenders.

It is for these reasons competing mortgage lenders nationwide have created an information-sharing network to crosscheck loan applicants activity, such as income documentation and asset verification.

For more information on how you can avoid mortgage fraud and predatory lending, please call 941-206-6000.

Mike Sikorski, MBA, GRI

Licensed Real Estate Broker

Licensed Mortgage Broker

Loss Mitigation Specialist

Florida Realty Network LLC

22079 Kimble Avenue

Port Charlotte, Fl. 33952

(941)206-6000

Mike@FloridaRealty.net

The Terrible Truth about Mortgage Brokers and Loan Originators

MLS of FLORIDA Realty Corp. — Tue, 25 Nov 2008 01:55:59 -0600

Many of today's Florida licensed mortgage brokers and Loan Originators lack the necessary skills to truly assist consumers in securing the best financing arrangements possible, due in large part to the fact they are poorly trained, lack the most basic skills necessary to truly understand all facets of mortgage lending, and possess little or no experience in residential mortgage lending, as well as offering too few mortgage loan programs for consumers to choose from.

Under Florida Law, an individual can be licensed or unlicensed to originate residential mortgage loans, depending on the type of business entity they choose to employ under. Licensure is required for employment under a Mortgage Brokerage Business only, whereas employment with a mortgage lender requires no licensure at all.

For those individuals who choose licensure, education requirements by Florida law are limited to a 24 hour class that basically teaches an individual how to pass the state licensure exam. The core principles of the 24 hour class deals with Federal & State law, with a basic review of underwriting guidelines set forth by Fannie Mae and Freddie Mac. Very little can be taught within a 24 hour period (usually a Friday evening followed by two full days on Saturday and Sunday) to educate the average individual. After successfully passing a state exam, all that is really required to maintain licensure is 14 hours of continuing education every 2 years, which is typically completed online through an ‘honor' system.

Once an individual is licensed, they are required by law to place their license with a business entity licensed to broker loans in Florida. Many of the mortgage companies licensed in Florida lack any form of hands-on training for newly licensed individuals, leaving it up to the licensee to learn as they go. Many of these same mortgage companies offered few mortgage loan programs, with little guidance from their companies, many licensees choose to take the path that leads them to quick loan closings.

Enter the subprime mortgage lender.

Subprime mortgage lending offers a breadth of loan programs with liberal guidelines towards credit and income, offering higher loan to values than most conventional loan programs. Unlike government mortgage loan programs with stringent underwriting guidelines towards credit and income, subprime lenders offered underwriting guidelines that are loose in comparison, making it much easier for consumers to qualify for most programs. High risk mortgage loans required high risk interest rates, including costly prepayment penalties to the consumer. For those licensees whose companies did not offer more competitive, less risky mortgage loan programs such as FHA, VA, or Conventional, subprime mortgage loans meant closing loans and earning commissions, regardless of the overall benefit to the consumer.

Subprime mortgage lenders made it possible for mortgage brokers with little or no knowledge of residential mortgage lending to earn big commissions with little work involved on their part.

In 2000, the state of Florida had just over 20,000 licensed mortgage brokers. Today, there are over 81,000 licensed mortgage brokers licensed in the state of Florida. These numbers do not include the multitude of unlicensed Loan Originators working under licensed mortgage lenders, many of whom do not reside in the state of Florida.

The correlation between the heated mortgage refinance market of 2003-2006 to that of the dramatic increase in the number of newly licensed mortgage brokers in Florida is unclear, however the large number of mortgage loans originated through subprime mortgage lenders by untrained, inexperienced mortgage brokers during this same time period does give cause for concern.

Studies have shown that many consumers who received subprime mortgages with high interest rates & prepayment penalties would likely have qualified for a low interest, fixed rate government mortgage loan such as FHA.

Ultimately, the choice of mortgage broker or mortgage lender falls squarely to that of the consumer. Choosing an inexperienced mortgage broker to originate your mortgage loan or choosing a mortgage lender who offers a limited number of loan programs that may be unbeneficial to the consumer is exactly their choice.

Regardless of how uneducated or inexperience a mortgage broker or loan originator may be, it is up to the consumer to choose the mortgage loan program that best fits their needs, and not that of the mortgage broker or mortgage lender. Absent the legal language of most contractual agreements, there is nothing that obligates the consumer to choose a mortgage loan that is unbeneficial, or a mortgage payment that is unaffordable. Shopping for the mortgage that best fits their individual needs requires research that is not limited to rate shopping.

Experienced mortgage brokers that offer a wide array of mortgage loan products that includes low, fixed interest rates, no prepayment penalties through FHA, VA,& conventional mortgage programs gives consumers the choices they need to make better decisions about their mortgage financing needs. High pressure sales people with little or no knowledge of residential mortgage lending do a complete disservice to consumers as well as the mortgage industry.

With many of the subprime mortgage lenders out of the mortgage business completely, perhaps a tide may be turning that will force many mortgage brokers and loan originators to either learn the residential mortgage lending business the way it should be learned, or get out of the business all together.

Either way, the consumer will benefit, going forward.

Mike Sikorski, MBA, GRI

Licensed Real Estate Broker

Licensed Mortgage Broker

Florida Realty Network LLC

22079 Kimble Avenue

Port Charlotte, Florida 33952

Phone 941-206-6000

Email Mike@FloridaRealty.net

MORTGAGE LOAN APPROVALS USING NON-TRADITIONAL CREDIT

MLS of FLORIDA Realty Corp. — Tue, 25 Nov 2008 01:53:37 -0600

Homebuyers turned away due to lack of credit or credit scores do have a rather unconventional way to be approved without traditional credit or even a credit score.

Non-traditional credit falls into two distinct categories that provide balance in assessing various forms of non-traditional credit. The categories are as follows:

For more information about how non-traditional credit can benefit you, please call (941) 206-6000.

Mike Sikorski, MBA, GRI

Licensed Real Estate Broker

Licensed Mortgage Broker

Florida Realty Network LLC

22079 Kimble Avenue

Port Charlotte, Fl. 33952

(941) 206-6000

Mike@FloridaRealty.net

MORTGAGE FRAUD BEGINS AT LOAN APPLICATION

MLS of FLORIDA Realty Corp. — Tue, 25 Nov 2008 01:51:02 -0600

The following are examples of what is considered mortgage fraud:

* Providing false names, addresses, and Social Security numbers.

*Providing fraudulent documentation regarding income, such as Federal income tax returns,

W-2's, 1099's, and pay stubs.

*Intentionally overvaluing assets or failing to disclose debts or other liabilities

Mike Sikorski, MBA, GRI

Licensed Real Estate Broker

Licensed Mortgage Broker

Loss Mitigation Specialist

Florida Realty Network LLC

22079 Kimble Avenue

Port Charlotte, Fl. 33952

Phone (941) 206-6000

Mike@FloridaRealty.net

LOAN APPROVALS JUST GOT TOUGHER

MLS of FLORIDA Realty Corp. — Tue, 25 Nov 2008 01:48:17 -0600

The following is a review of the new changes to the underwriting guidelines:

For a FREE brochure offering tips on shopping for a mortgage as well as the many differences in mortgage loan programs, please call 941-206-6000.

Mike Sikorski, MBA, GRI

Licensed Real Estate Broker

Licensed Mortgage Broker

Loss Mitigation Specialist

Florida Realty Network LLC

22079 Kimble Avenue

Port Charlotte, Fl. 33952

Phone (941) 206-6000

Email: Mike@FloridaRealty.net

HOW A LOAN APPROVAL BECOMES A LOAN DENIAL

MLS of FLORIDA Realty Corp. — Tue, 25 Nov 2008 01:43:20 -0600

The loan approval that you receive today could fail to close due to the lack of follow through required by consumers and their loan officers as stipulated directly within the loan approval itself.

Three of the items above are easily avoidable, if you follow through by taking the necessary steps to ensure that these issues do not occur:

The loss of a job without a job to replace it will almost certainly require a loan denial.

Mike Sikorski MBA, GRI

Licensed Real Estate Broker

Licensed Mortgage Broker

Loss Mitigation Specialist

Florida Realty Network LLC

22079 Kimble Avenue

Port Charlotte, Fl. 33952

941-206-6000

Mike@FloridaRealty.net