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Even the Rich Are Treating Their Houses Like Piggy Banks | Valerie Fitzgerald | Beverly Hills & West L.A. Real Estate

American Pacific Mortgage- Karen Cooper, Oregon & California — Sat, 07 Nov 2009 17:07:08 -0600

Here in Southern Oregon, super jumbo mortgages are not commonly seen. I found this an interesting read, getting a glimpse in to the motivation these homeowners had in taking out their multi-million dollar mortgages. Used to see this a lot more in my Southern California days...

Via Valerie Fitzgerald | Beverly Hills & West L.A. Real Estate (Coldwell Banker Residential Brokerage):

In recent years, millions of Americans looked at their houses and saw big, fat piggy banks. And it occurred to them to take out big, fat new mortgages.

Few did it on the scale of Ronald Burkle.

Mr. Burkle, the grocery-store billionaire, has $56 million in loans against two houses, including $9 million added last year. One is his iconic Beverly Hills mansion, "Green Acres," a 44-room Italian Renaissance palazzo built in the 1920s by silent-film star Harold Lloyd that more recently was a favorite overnight rest stop for Mr. Burkle's buddy, Bill Clinton.

Mr. Burkle declined to say how he is using the money. There is no indication he needs it to pay the water bill.

Traditionally, the super-rich didn't really bother with mortgages. Home loans were for people who carry lunch buckets, not captains of industry.

That changed in the boom years -- and it is still going on. Recent big-time home borrowers include fashion entrepreneurs, hedge-fund titans and baseball-team magnates.

Home loans "are a really good source of cheap capital," says Robert Maguire, a real-estate tycoon who built some of the tallest officer towers in L.A. He has borrowed some $50 million against several properties, including his beach house, which features huge picture windows framing the Pacific near Santa Barbara, Calif.

He has been raising money with an eye toward regaining control of his property firm, Maguire Properties Inc., which he lost during the real-estate bust. Even as he borrows against his beach retreat, Mr. Maguire is trying to sell it for $29 million.

By hocking the house, so to speak, he and others say they are simply borrowing low in hopes of investing in something they believe will yield a high return.

And mortgage rates are near historic lows. In April, Mr. Burkle renegotiated his $56 million in adjustable-rate mortgages down to 3.25%, which was in line with adjustable home loans of a more mortal size. Recently, his rate adjusted down to about 2.25%, based on publicly available documents.

It puts Mr. Burkle's mortgage interest charge at $105,000 a month, give or take.

Like ordinary home loans, megamortgages flourished during the boom earlier in the decade. The number of home mortgages in the $3 million-and-up category soared to about 3,000 in 2007, from only 1,100 or so in 2004, according to LPS Applied Analytics, a unit of Lender Processing Services Inc.

Not surprisingly, mammoth home loans got scarce during last year's near-unraveling of the world economy. But now they are showing signs of coming back.

U.S. Trust, which is the private wealth-management arm of Bank of America Corp., has seen a 33% rise this year in home loans, compared to last year, with the average size over $3 million. Jan Reuter of U.S. Trust says clients are using the cash to buy stocks and other assets. Other major lenders tell a similar story.

The federal tax code doesn't smile upon giant mortgages. It allows mortgage interest to be deducted only on home borrowings of about $1 million or less.

But there are ways around that, says David Adamo of Luxury Mortgage Corp., a mortgage-banking firm in Stamford, Conn. If the cash is used for investment purposes, the loan interest could be used to reduce taxes on income from the investments, he says.

Of course, plenty of rich people still avoid home loans. Partly, it is an image thing. Maria Elena Lagomasino of GenSpring Family Offices LLC, a Palm Beach Gardens, Fla. wealth-management firm, says a mammoth mortgage implies to her that someone is "borrowing because they have to."

One rub for zillionaires who value their privacy: Mortgages are a matter of public record.

One of New York City's classiest new addresses is 15 Central Park West -- which along with the requisite pool, health club and movie-screening lounge, offers "30 climate-controlled wine rooms" with "solid oak cabinetry." Since the start of last year, five buyers there have taken out mortgages ranging from $10 million and $35 million, according to public information collected by First American Corps.' RealQuest data service.

Not all megamortgages have happy endings. Since mid-May, about a dozen home loans of $3 million to $9 million have been involved in default or foreclosure actions in Malibu, Beverly Hills and other fancy areas around Los Angeles, according to public data gathered by First American. None of the giant mortgages over $10 million examined in detail are in default.

Max Azria, chief executive of privately held BCBG Max Azria Group Inc. clothing company, took out a $25 million mortgage in April 2008 on a 12-bedroom, 13-bath West Los Angeles mansion, once home to the late TV producer and novelist Sidney Sheldon, according to public records. He bought the house in 2005 for about $16 million.

Last year, Moody's Investors Service, the credit-rating company, said BCBG could face a cash crunch without financial help from Mr. Azria. A BCBG spokesman said Mr. Azria used the mortgage money for renovations and "additional personal liquidity," and that the company restructured and improved its finances this year without funds from him.

Israel Englander, who runs the Millennium Management LLC hedge-fund operation in New York, last year pledged a home in a wooded, estate-filled section of Greenwich, Conn., as part of the collateral for a revolving credit line of up to $100 million.

Mr. Englander declined to comment. There is no indication he needed the money for anything other than investment purposes.

Besides signing multimillion-dollar baseball players, Frank and Jamie McCourt have accumulated homes with multimillion -- dollar mortgages since moving to Los Angeles in 2004 to run the Los Angeles Dodgers. They bought homes and adjacent properties in both West Los Angeles and Malibu.

Their 15,000-square-foot, 10-bath L.A. manse, located in the prestigious Holmby Hills neighborhood across the street from the Playboy Mansion, was purchased in 2004 for about $20 million. For good measure, the McCourts spent $14 million to upgrade the place, including tearing out the tennis courts to install an indoor, Olympic-size swimming pool.

All told, the homes carry some $28 million in mortgages. The houses, which are in Mrs. McCourt's name, are now part of a nasty divorce battle between the couple, who are fighting for control of the Dodgers.

The McCourts declined to comment.

Amid the acrimony, the estranged couple did agree on one housekeeping matter at a court hearing Thursday: Mrs. McCourt could have exclusive access to the indoor Olympic pool. Swim hours for her are between 6 a.m. and 2 p.m.

—Jonathan Karp contributed to this article.

Write to John R. Emshwiller at john.emshwiller@wsj.com

Karen Cooper - OR|CA Mortgage Consultant - www.Quality4Loans.com
Providing high Quality, Professional, Ethical service to Oregon and California home buyers and owners since 1983. Whether you are taking out your first home loan or your fiftieth, for your home, your second home or for investment, put my knowledge and expertise to work for you.

Cold vs. H1N1 - Know the Difference!

American Pacific Mortgage- Karen Cooper, Oregon & California — Sat, 07 Nov 2009 17:02:14 -0600

This is some great information put together by Debi Boucher, Woodland Park photographer about the differences between a cold and H1N1. Great info!

Via Debi Boucher - "Realtor Showcase" Real Estate Slideshows/ Photographer (Memories DVDs - Realtor Showcase Slideshows):

Cold vs. H1N1 - Know the Difference!

I heard on the news the other day that the seasonal flu hasn't really even hit yet - That means, according to the report, that nearly all cases of the flu so far are H1N1. The government has declared the H1N1 pandemic a national emergency. According to the Washington Times, as of October 25th, there have been more than 1000 deaths, 100 of them pediatric. (The synopsis below reports 22 pediatric deaths as of Oct. 24). And we are woefully short on vaccines. We all know the steps we should take to help prevent getting the flu, but do we all know the symptoms? When is going to the doctor warranted? Or the emergency room? I have to wonder how many deaths can be prevented by not waiting too long to get medical care.

A co-worker had the flu last week. I asked her if it was H1N1, and she said she didn't know for sure. It is too expensive to have the tests done, so she didn't have it confirmed. Are the statistics we see on how many cases there have been based on 'tested' cases? If that's so, then the numbers must be much higher than reported.

This information is from the CDC:

Synopsis:

During week 42 (October 18-24, 2009), influenza activity increased in the U.S.

8,268 (42.1%) specimens tested by U.S. World Health Organization (WHO) and National Respiratory and Enteric Virus Surveillance System (NREVSS) collaborating laboratories and reported to CDC/Influenza Division were positive for influenza.

All subtyped influenza A viruses being reported to CDC were 2009 influenza A (H1N1) viruses.

The proportion of deaths attributed to pneumonia and influenza (P&I) was above the epidemic threshold.

Twenty-two influenza-associated pediatric deaths were reported. Nineteen of these deaths were associated with 2009 influenza A (H1N1) virus infection and three were associated with an influenza A virus for which the subtype was undetermined.

The proportion of outpatient visits for influenza-like illness (ILI) was above the national baseline. All 10 regions reported ILI above region-specific baseline levels.

Forty-eight states reported geographically widespread influenza activity, Guam and two states reported regional influenza activity, the District of Columbia and Puerto Rico reported local influenza activity, and the U.S. Virgin Islands did not report

Know the Difference between Cold and H1N1 Flu Symptoms

Symptom

Cold

H1N1 Flu

Fever

Fever is rare with a cold .

Fever is usually present with the flu in up to 80% of all flu cases. A temperature of 100°F or higher for 3 to 4 days is associated with the flu .

Coughing

A hacking, productive (mucus- producing) cough is often present with a cold.

A non-productive (non-mucus producing) cough is usually present with the flu (sometimes referred to as dry cough) .

Aches

Slight body aches and pains can be part of a cold .

Severe aches and pains are common with the flu .

Stuffy Nose

Stuffy nose is commonly present with a cold and typically resolves spontaneously within a week .

Stuffy nose is not commonly present with the flu .

Chills

Chills are uncommon with a cold .

60% of people who have the flu experience chills .

Tiredness

Tiredness is fairly mild with a cold .

Tiredness is moderate to severe with the flu .

Sneezing

Sneezing is commonly present with a cold .

Sneezing is not common with the flu .

Sudden Symptoms

Cold symptoms tend to develop over a few days .

The flu has a rapid onset within 3-6 hours. The flu hits hard and includes sudden symptoms like high fever, aches and pains .

Headache

A headache is fairly uncommon with a cold .

A headache is very common with the flu, present in 80% of flu cases .

Sore Throat

Sore throat is commonly present with a cold .

Sore throat is not commonly present with the flu .

Chest Discomfort

Chest discomfort is mild to moderate with a cold .

Chest discomfort is often severe with the flu .

If you know someone who lives alone, keep an eye on them! They may not be able to get the care they need if they are too sick to seek it out....

DBoucher Photography

Nature and Wildlife Photography Notecards

Real Estate Showcase Slideshows

Position yourself above your competition - Utilize a "Real Estate Showcase" Slideshow as a listing tool. Post it on your own website - Realtor Showcase Members can upload it to Realtor.com - Post it on your blog to showcase your listings.

"Real Estate Showcase" Slideshow and Web Presentations, more captivating than a virtual tour!

Photos taken by Debi Boucher, DBoucher Photography, all rights reserved, may not be reproduced without express written permission.

"How To Get Rich In This Market"

American Pacific Mortgage- Karen Cooper, Oregon & California — Fri, 06 Nov 2009 18:05:46 -0600

I’m thanking God it is Friday. This week has so drained my energy. I’m looking forward to it being revitalized by family, friends and church this weekend. I will not be taking any business related calls this weekend, because I desperately need to recharge. Have you ever felt like that?

A “funny” thing happened this week, though. In the heat of trying to prod government and major bank employees along to get a first time home buyer’s transaction closed before their extended closing date passed us by, I inadvertently addressed a fiery e-mail to the previous CEO of Carteret Mortgage, one of our nation's largest mortgage brokerage until they closed down with the rapid disintegration of the mortgage industry. I can’t tell you how this “divine intervention” “coincidence” - whatever you wish to label this experience – did to help take my focus off an imploding file, taking me out of battle mode for a few moments so I could contemplate how the myriad of changes we’ve been facing in the mortgage industry have effected this gentleman, Mr. Eric Weinstein (not Everlyn Williams, whom the e-mail was intended for! :->).

The dialog between Eric Weinstein and I went back and forth a bit, but here is an article by Eric Weinstein, formerly CEO of Carteret Mortgage, that I found soothing in this crazy week:

“How to get rich in this market” by Eric Weinstein

“I must say, as the former owner of one of the largest mortgage brokers in the country, I have a new found respect for all the crap my loan officers must have gone through when I was at the top making policy at Carteret Mortgage. Literally, four of my last 5 borrowers in the last two weeks did not qualify where less than a year ago, they were golden. I never had these problems when I was taking loan apps fifteen years ago, typing the 1003 on my trusty Smith-Corona and using some sort of “special machine” to run my credit reports. You old timers, like me, will remember the days before LP, before anyone had an LOS that merged the liabilities into the second page and when basically anyone breathing qualified for a loan.

So here I am, a time traveler thrown back fifteen years, to when I was a loan officer just starting out in the business. Back then, all we had was agency and government loans, just like to day. At least we had MI back then. Yes, technology has made inputting the loan faster, but now we have to worry about appraisal reviews and ever changing guidelines.

What I am saying is…”It’s always something.” The market is tough now, but hey, old timers like us have been through stuff like this before. The market is bad, then it’s good, then it’s bad again Underwriting is hard, then it’s easy, then it’s hard again. Life sucks, then you are on top of the world and then it sucks again. So what is the secret to being rich in this crazy market?

I love the bumper sticker “He, who dies with the most toys … is STILL DEAD.” The best way to get rich in this market is to count your blessings, Realize you still have your health, your family and you are still breathing on this earth. Life is the greatest gift and if you are reading this, there is a good chance you are not dead yet. Rejoice at just being alive and the rest is just the price you pay for the privilege. Right now, you are the richest person at the cemetery. So, just say a little” thank you”, and get back to work.”

Eric – thank you! I’m counting my blessings…and getting rich!

See you out there!

Wordless Wednesday - When You've Gotta Go, You've Gotta Go

American Pacific Mortgage- Karen Cooper, Oregon & California — Tue, 03 Nov 2009 23:08:32 -0600

High Offers Offset By Low Appraisals - Fair And Balanced? Or Unfair?

American Pacific Mortgage- Karen Cooper, Oregon & California — Tue, 03 Nov 2009 19:41:12 -0600

We're seeing a lot of accepted offers way over the listed price on bank owned foreclosure homes in our local markets, too. I haven't seen any low appraisals, although we've been seeing lots of repairs called out. Lisa brings to light an issue I hadn't considered. Thanks for the food for thought, Lisa!

Via Lisa Udy Realtor Utah Real Estate Specialist (Logan Utah Real Estate Immaculate Homes):

With the amount of offers coming in on REO properties(Bank Owned Properties), there has been a new trend among buyers. The trend is to just offer as high as possible to get the property under contract. After the contract is accepted by the bank, they have to get an appraisal for the loan.

The appraisal comes in quite a bit lower then their original offer price, which means the buyers won't be able to get the financing. These buyers then have the right to withdraw from the contract based on the appraisal contingency. The deal is dead right?

Not so fast. The buyers agent has been planning this all along. The agent and the buyers will submit an addendum to the price to meet the appraisal, and will re-submit to the bank.

Now, the bank wants to get this deal done, and knows the same thing will happen with any other buyer. The appraisal has already been done. So, the bank just accepts the lower price, and the buyers get away with it. They knew the appraisal would not meet the original offering price, and they get a great deal.

With the new appraisal guidelines, this is happening more and more. Appraisals are coming in low, buyers are aware this is what's happening, they are offering high to get the property over the competition, and just wait out the appraisal to get a great deal.

How fair is it to the buyers that put in an offer closer to asking price? Is this fair and balanced? Is it unfair to the other buyers that put in a reasonable offer? Or is it a smart way to get your buyers the house they wanted?

Know Your Forms - New RESPA Closing Documents On The Way!!!

American Pacific Mortgage- Karen Cooper, Oregon & California — Tue, 03 Nov 2009 19:26:23 -0600

Gary Woltal has highlighted the new Good Faith Estimate and its 2010 proposed changes very well. Hopefully, this will be the final form that is eventually released in January, as many revisions have taken place. Thanks, Gary!

Via Gary Woltal - Associate Broker REALTOR® Dallas Ft. Worth (Keller Williams Realty):

Come January 1st, 2010, as a REALTOR or a consumer at the closing table things are about to change as far as the Good Faith Estimate (GFE) and Settlement Statement (HUD-1). Links below will allow you to print these out to familiarize yourself with them. Both now are three pages in length. The highlights:

Revised Good Faith Estimate (GFE)

GFE tolerances on settlement costs (1/8 point allowed to be in error)

Revised Settlement Statement (HUD-1)

Revised definitions for application, Good Faith Estimate, and Mortgage Broker

Additional definitions for changed circumstances, origination services, loan originator, prepayment penalty, third party, title service and tolerance

Elimination of 1% origination fee cap on FHA loans

RESPA (Real Estate Settlement Procedures Act) forms apply to federally insured or backed loans such as FHA/VA/Conventional and NOT cash deals. There is also a 30 day cure period to give lenders after closing the ability to meet the tolerance. The closing script is eliminated as it is contained in the revised HUD-1. Average charges can be used by service providers and is not limited to loan originators.

Bottom line is it looks like the new GFE and HUD-1 want the borrower to be as crystal clear on everything related to the loan. It looks like the fastest you could go from app to close is about three weeks. On page three of the new HUD-1 boxes compare GFE and HUD-1 costs. On page 3 of the GFE they clearly in the instructions state what charges CANNOT increase past the GFE, can increase up to 10%, and what charges can change. It is VERY clear. The only thing weird I saw on both the new HUD-1 and GFE is it never clearly says the PITI monthly payment but just principal, interest, and mortgage insurance in the loan terms.

It looks a lot different for most of us, but print yourself out a copy and take a look. January is NOT that far off.

Revised Good Faith Estimate (GFE)

Revised Settlement Statement (HUD-1)

With closings averaging 130 pieces of paperwork both the REALTOR and the consumer need to know about these documents ahead of time. One last tip for both groups in this area, be sure to show up at the table with a U.S. government issued ID with a picture and your signature. This is mandatory for identification purposes. Good luck and happy closings!!!

Out With The New/Old, In With The Old/New…Oh Whatever!

American Pacific Mortgage- Karen Cooper, Oregon & California — Tue, 03 Nov 2009 18:31:54 -0600

2008 and 2009 have been phenomenal funding times for FHA loan financing for buyers purchasing real estate. This is because FHA guidelines are broader, making this financing tool more suited to today’s homebuyers’ needs. FHA guidelines allow the buyer to receive gift funds for their down payment/closing costs, which is what many first time home buyers are doing these days.

Prior to FHA financing’s comeback, conventional loans were the tool of choice for first time home buyers because they could choose “piggyback financing” – two loans, holding the amount borrowed on the 1^st mortgage to 80% or less, financing the rest in the 2^nd mortgage, thereby eliminating the need to obtain private mortgage insurance which until the past few years was not tax deductible. Automated underwriting made for easy processing of these loans, limiting documentation requirements and making for faster closings.

Now, proposals are moving forward to increase the down payment requirements on FHA financing to at least 5% down. I’ve received word that Fannie Mae and Freddie Mac are reviving 3% down on certain programs for home buyers with credit scores of 680+, because they have a private mortgage insurance carrier that will agree to insure these loans. These programs are priced higher than FHA financing, making it an unlikely substitute if the down payment requirements are raised on FHA loans.

In 2010, the tax deduction for private mortgage insurance is set to sunset. I haven’t heard about any proposal to extend that tax deduction. Guess it’s time to start another letter writing campaign to my elected officials on THAT issue.

Welcome to my world where the new is old and the old is new…it’s like watching professional ping-pong.

See you out there!

Thanks, Neighbor For Your Diligence In Hanging In There To Sell Your Home – The Rest of Us Living Here Appreciate It!

American Pacific Mortgage- Karen Cooper, Oregon & California — Tue, 03 Nov 2009 17:51:10 -0600

There’s another home on our street that turned over recently. This homeowner relocated to another state to take a job. Having purchased at a high point in the market, they rented the home out, after attempting to sell it to no avail. Three sets of tenants later in a relatively short period of time of about 2 years, they put the home on the market. I’m guessing it was a short sale, with the owner having purchased at a peak AND sunk quite a bit of money in to the home to renovate it and fix some quirky floor plan issues making this home more easily marketable for the future... a future that came along much sooner than the homeowner anticipated.

Short sales are not looked upon favorably in our market, by the prospective buyers or by the Realtors. Showings are lower than they are on bank owned foreclosure homes or privately held “market rate” homes. With good reason, based on the lack of response and ineptitude encountered with many mortgage holders. Admittedly, some of them are getting better. Some are still floundering with the excessive, escalating volume of transactions these mortgage companies need to review, transactions being set up and processed by inexperienced under-trained staff that have been thrown in to sink or swim at these mortgage companies. There are some bargain hunters willing to give purchasing a short sale home a try, or purchasing a bank owned foreclosure home able to see its potential through the damage the property may have and the repairs/renovation it may need. Who can blame them for wanting to take advantage of extraordinarily low priced homes while they can take advantage of the $8,000 first time home buyer tax credit AND low mortgage interest rates? Or, if they are investors, pick up several homes for their portfolio that will cashflow and meet their return on investment goals?

Over time, multiple buyers came along, some tried to negotiate an accepted contract to be approved by the mortgage companies, and then there would be a price reduction and further wait for another buyer willing to attempt the cycle again. Finally, a diligent (lucky?) buyer came along, worked out a deal, got the mortgage company to approve it, and closed escrow on this home. Hallelujah, after a year the vacant home is filled! And the home DID NOT go through foreclosure.

Thank you persistent seller for pursuing this long road to avoid letting the home go back to the bank. Thank you dedicated real estate brokers who hung in there to successfully get this home sold. Thank you diligent buyer who lives in this home - we're thrilled to have good neighbors again.

People are successfully refinancing there homes under the Home Affordable Refinance program. People are successfully modifying their loans under the Home Affordable Modification Program. Even more people are now successfully refinancing or modifying their existing home loans under the Home Affordable Programs since the limit was increased to 125% of their home’s current market value. People are successfully selling their homes for less than what is owed on them when they can no longer ride this market out. Kudos to every one of these people for traveling these challenging paths to avoid foreclosure.

Thanks, Neighbor, for your diligence in getting your home sold…for playing your part in stemming the tide of foreclosures we’re seeing in our local real estate market. The rest of us here really appreciate it!!!!

See you out there!

Thanks, Neighbor and Thanks, Bank of America/Countrywide/Fannie Mae/Freddie Mac – NOT!

American Pacific Mortgage- Karen Cooper, Oregon & California — Tue, 03 Nov 2009 15:47:25 -0600

There are some great Realtors here in Southern Oregon, dedicated to their profession and their clients. One of them, our 2010 Rogue Valley Association of Realtors President, Krista Bolf, knows where I live and lets me know what sales are happening in the neighborhoods where we own property. Yesterday, Krista Bolf of Coldwell Banker ProWest Ashland spotted a new listing on our street. This isn’t the first “don’t shoot the messenger” message we’ve received from Krista Bolf, and with the way the local real estate market has been very likely won’t be the last.

There are a lot of ways to deal with financial distress. I’ve listed several of those that pertain to the housing/real estate/ mortgage distress below. Then, there are those that just irk me, like the strategic foreclosure or the high cost loan modification companies.

As of October, there was another Trustee Sale creating a bank owned foreclosure home on our street. There are about to be two bank owned foreclosure homes on the street where we have a rental, too. A sign of the times, hopefully a tide that will be stemmed soon with all of the housing stimulus being poured out. If I’m going to have to foot the bill for these programs for the rest of my life and probably those of my children, I’d like to see this blood-letting of our assets end soon.

The most recent bank owned foreclosure home on our street is a home the owners had for almost 20 years. At some point, maybe from the beginning, this was an investment property for the owners. They wouldn’t have been eligible for the Home Affordable Modification Program through Bank of America/Countrywide/Fannie Mae/Freddie Mac because they won’t modify notes on this program for Investment Property. They paid $85,000 for the home that went back to the bank. But, it didn’t go back to the bank to be foreclosed on for that amount or less. It went back for almost $230,000 owed to Bank of America/Countrywide. So, that tells me the owner used this home as an A.T.M., borrowing against it and borrowing against it until the rents couldn’t sustain the Bank of America/Countrywide mortgage payments, at which time they defaulted on their Bank of America/Countrywide mortgage creating a new foreclosure in our neighborhood. I don’t know about you, but I certainly don’t appreciate the ramifications of what may have been this homeowner’s decisions! No, I don’t know first hand what circumstances led to the eventual loss of our neighbor’s house through foreclosure or their reasons for refinancing; maybe there were health issues that led to outrageous medical bills, or a job/income loss that put them in survival mode - I’d rather think this than that they sucked all the equity dry and walked leaving the rest of us to pay the price. Yes, I am making some assumptions based on case histories I’ve come across repeatedly since the real estate/mortgage industry began the tumble from unsustainable peaks.

So now, Bank of America/Countrywide/Fannie Mae/Freddie Mac has listed the home for sale at a “bargain rate”, something that is done prevalently by banks when selling their foreclosure inventory. Throw the home on the market at a low price, sell quickly, drag the values in the neighborhood down for the rest of us – over and over again if there are multiple bank owned foreclosure homes in the neighborhood, which we are finding happens frequently. This home in our neighborhood is listed for sale for a little over $150,000. We paid $205,000 for our house in 2004. Yes, this REO home is less desirable in condition, lot size and location, but we are similar in square footage and age. We don’t have a lot of turnover of homes in our neighborhood, so this puppy will be setting the stage on values for a while.

So, thanks Neighbor for the choices you made leading to your home going back to the bank (or, forgive me for making false assumptions), and thanks Bank of America/Countrywide/Fannie Mae/Freddie Mac for putting this foreclosure home on the market at this below market rate – NOT! These banks are reminding me of the Robin Hood principle - stealing from the “rich” to give to the “poor”, and I’m getting a little tired of being stolen from! It’s no wonder we’re seeing the level of strategic defaults we’re seeing now. Is this the objective/goal you had in mind Bank of America/Countrywide/Fannie Mae/Freddie Mac? You contributed to it!!!!

There ARE other ways to handle distressful financial circumstances in many cases. Exploring all alternatives, like Home Affordable Refinance or Home Affordable Modification Programs which will now let you refinance up to 125% of your primary home’s value to help you lower your payments and keep you in your home using any lender that offers the programs, not just the one you are already with who you may or may not want to stick with. If you’ve tried one or both of those two Home Affordable options, but you don’t qualify, you may want to get legal/tax guidance for the other alternatives. If you haven’t tried the Home Affordable programs because of the barrage of negative media attention on unsuccessful applicants, TURN YOUR TV/RADIO/ MONITOR off and give it a try! If you’ve tried the Home Affordable route, but haven’t been able to get a credible response/action from your lender, get to a HUD approved housing counselor in your area to help you work through the process – THEY will get the attention of your mortgage holder. Exhaust this alternative, because the next options – short sale/ deed in lieu of foreclosure/ foreclosure / bankruptcy – will have longer term, costlier affects on your credit and your pocketbook. If a Home Ownership Preservation Event (H.O.P.E.) is being held in your area, and you need help on your primary residence, GO TO IT! Make sure you get the proper professional guidance from a knowledgeable reputable source, as bad advice and scams are rampant out there. Chances are anyone who wants to charge you a significant upfront fee for loan modification is operating illegally – they are in California and Oregon, anyway.

See you out there!

That Was Then…This Is Now 2007-2009

American Pacific Mortgage- Karen Cooper, Oregon & California — Mon, 02 Nov 2009 11:48:26 -0600

Having been in the mortgage industry for so long, having seen a great many changes since 1983, recent changes seem different from earlier changes in one big way. The period between 2007 and 2009 doesn’t really seem like a long period of time in the big picture, but these changes are making for some long days in my mortgage industry world. Where many of the changes in the past were market driven, today’s changes are “putting fires out” driven. And it seems to me, those changes are being made without the necessary foresight and investigation required to have these changes be viable solutions to the problems they are meant to address. Take these two, for example:

Home Valuation Code of Conduct (HVCC):

Before this change went in to effect, a loan originator could choose an experienced, qualified, local appraiser to be hired to do the appraisal inspection/report for their refinance or purchase transaction. Limited analysis of rapidly defaulting home loans brought to light that there were cases of undue pressure on appraisers that were playing a big part in the appraisers providing over-inflated values. The solution was to not allow loan originators to speak to appraisers and limit what other parties to a transaction may say to an appraiser that must be hired anonymously through an appraisal management company. Of course, the appraisal management company wants to be paid, so they first increased appraisal fees, then secondly took a piece of the appraiser’s compensation to accomplish this. The appraisers the appraisal management companies hire have to be willing to accept the lower compensation for the same work, limiting the available pool the appraisal management companies draw from, and often the appraisal management companies hire appraisers for jobs that are not from the area the subject property is located in and/or appraisers that have less experience than that of the appraiser an originator may have chosen to hire for the job before. The latest report referenced by TBWS on a comparison between 2^nd quarter 2009 when HVCC went in to effect, comparing the 3^rd quarter 2009 results to 3^rd quarter 2008 results before HVCC was in effect, and guess what? Cases of appraisal fraud, including over-inflated values, are UP 46% since HVCC was instituted.

Real Estate Settlement Procedures Act (RESPA):

There have been several proposed changes to RESPA to help make the Good Faith Estimate and Truth-in-Lending disclosures with their respective information complete, clear and concise. Limited analysis of the homeowners defaulting on their home loans brought to light that many of those homeowners didn’t fully understand the loan program they used to buy/refinance their home. It also brought to light that a limited number of loan originators were “churning” loans and being compensated through yield spread premiums on those loans that bank employees were not required to disclose to their borrowers. The objective is to help the home loan applicant better understand the loan product they have chosen and the loan products available to them to use as the tool for their refinance or home purchase. Further proposed changes currently in the comment stages are proposing that yield spread premiums disclosed by mortgage brokers but not by the rest of the mortgage originators be eliminated, not just disclosed because the average homeowner isn’t savvy enough to figure out what they are. The results? The disclosure forms are longer, more confusing for first time homebuyers, and if the latest change proposed by R1366 is approved, will eliminate yield spread premium and fix the compensation of loan originators, so that those seeking home loans will HAVE to pay points to get their loans (although 44% of borrowers chose NOT to) unable to scale their interest rates up and down to offset charges for risk factors associated with their individual circumstances and/or get the lowest annual percentage rate for their individual plans/goals/objectives.

The difference from earlier changes and the common denominator I see in today’s changes? They HURT the consumer!!!! They are NOT helping anyone other than the factors pressing for changes that will make them money and/or eliminate their competition. They will chase what is left of the quality appraisers, loan originators, and real estate brokers out of the business. The rules don’t need to be dramatically changed like this…the original ones just needed to be enforced! Greed, fraud, poor judgment are still a part of our world – how about we focus on enforcing existing regulations/ laws to address these issues since this human element can’t be removed?

You CAN do something to change the changes. Let your elected officials know your experience with HVCC if your transaction(s) fell apart because of it. It isn’t too late, because a bill is moving forward requesting a moratorium on HVCC. Let your elected officials know if you don’t want to HAVE to pay thousand of dollars more for an interest rate that is SET, and you believe you are intelligent enough to understand – or have confidence in the support you can get to help interpret –your disclosure forms, the forms the newest MDIA regulations give you 6 business days to receive and review before an appraisal may be ordered. If you attend HUD approved homebuyer education programs, you are taught how to figure these out.

We’ve come a long ways these past 2 ½ years…but I think we’ve taken some wrong turns at some Y’s along the way. I think it’s time We The People take some initiative and steer our own vehicle. Let your voice be heard – it’s your constitutional right!

I have a suggestion. How about we get back to basics – buyer beware, read before you sign, get reputable professional guidance if you don’t understand it, “buy local” through recommended companies/ representatives.

See you out there!

A Sunday Drive in Southern Oregon (3 of 3)

American Pacific Mortgage- Karen Cooper, Oregon & California — Sun, 01 Nov 2009 23:09:24 -0600

After we have finished exploring Sunny Valley and the ghost town of Golden Oregon with the hydraulic mining sights across the road, we head to Historic Wolf Creek Inn to have dinner. In spite of the Rogue Valley population being well over 200,000 people now, we manage to bump in to two people we know having dinner with their families at the Wolf Creek Inn. After a delicious dinner of "Steak for 2" and Crab and Avocado Louie, we meet up with one group of friends and tag along for a tour of the Wolf Creek Inn, learning about the days the Inn was established as the overnight stop for the Portland to San Francisco Stage Coach run, housing notables such as Clark Gable and Robert Redford, while hearing tales of paramormal activities - appropriate for All Saints Day, don't you think?

Thanks for sharing our Sunday Drive to three very scenic locations here in Southern Oregon.

Part 1 - Sunny Valley, Oregon

Part 2 - Golden, Oregon

See you out there!

A Sunday Drive in Southern Oregon (2 of 3)

American Pacific Mortgage- Karen Cooper, Oregon & California — Sun, 01 Nov 2009 22:40:19 -0600

On this first day of November 2009, we continue our Sunday drive on this glorious day, leaving Sunny Valley, and heading north to go to Golden, Oregon. This historic town was settled by early Gold Miners, most of whom moved on to other areas for their treasure hunt. The State of Oregon is in the process of restoring/renovation this historic area, and we'll look forward to seeing it again one day. In the meantime, here you go!

There is such beautiful scenery in this area, and so many great places to sightsee and hike, or as we chose to do, take a leisurely Sunday drive!

Part 1 - Sunny Valley

Part 3 - Mill Creek Inn

A Sunday Drive in Southern Oregon (1 of 3)

American Pacific Mortgage- Karen Cooper, Oregon & California — Sun, 01 Nov 2009 22:27:00 -0600

There are so many wonderful places to visit here in Southern Oregon. Today, my family and I piled in to the car and headed North from Medford Oregon to spend some time discovering places and some ground we've passed through many times along the I-5 corridor.

First stop, was the Grave Creek Covered Bridge in Sunny Valley, Oregon. This is along the Applegate Trail, and there is a small interpretive center located here that tells the tail of Sunny Valley and these scenic landmarks that can be spotted when one is driving north or south on the Interstate 5 Freeway.

A nice pit stop on a Sunday drive, with a great location for a picnic.

Off to Golden we go to see this historic ghost town that came to be in the Gold Rush days... (see part 2 of 3)

Part 2 - Golden Oregon

Part 3 - Wolf Creek Inn

Speechless Sunday - Along the Applegate Trail

American Pacific Mortgage- Karen Cooper, Oregon & California — Sun, 01 Nov 2009 21:06:49 -0600

Have I Carved Out Market Niches In The Loans No One Else Can Do – Or The Ones No One Else Wants? Where’s My EASY Button!?!?!

American Pacific Mortgage- Karen Cooper, Oregon & California — Thu, 29 Oct 2009 15:57:18 -0500

Today, I’m tired and looking for my “Easy button”. Since 1983, I’ve come across a LOT of different aspects of real estate financing. Having entered the real estate finance industry during a time of extraordinarily high interest rates AND rising property prices, I saw some pretty creative mortgage products devised to meet the needs of home buyers and investors, such as graduated payment mortgages and the first versions of adjustable rate mortgages put for in the savings and loan industry. These were mortgage loan programs designed to keep a flailing real estate market alive and get credit flowing again. “Pretty creative”, I thought, the early adjustable rate mortgages these forward thinking lending institutions were making available to home buyers and investors who wanted to “buy low”, adjustable rate loans that could adjust DOWN when the historically high interest rates began to correct and go back to more sustainable levels. Mind you, these loans required substantial down payments and proof of the ability to pay, borrower credit worthiness and the property that was collateral for the loan was severely scrutinized – these loans needed some “tweaking” as they went along, but were not the home loan products in the heyday of the subprime saga we all got to pay the price for with the early plummet in the real estate markets where the subprime loan was prevalently used as a financing tool.

In the early 90’s, I saw the expansion of the subprime “hard money” loan. Homeowners and investors who had chronic histories of late/no payments or couldn’t meet the “ability to pay” criteria of the traditional institutional loan programs used these tools – some of them to take care of emergency home repairs or medical bills, some of them again to “buy low”, like with the 70’s-80’s market. There were no “homebuyer education” program requirements on these loans, nor were the companies providing them educating these borrowers voluntarily. It was all about instant gratification for borrowers and lender investors alike – at a high cost to the borrowers and profit to the lender investors. I personally chose to emphasize that cost and the other ramifications my borrowers could face if they didn’t change spending habits, change payment habits, and not look at the easy credit as an endless resource, as well as the savings they could experience by taking the time to correct the issues that prevented them from obtaining institutional loans. Seeing the money to be made in this “alternative loan” market segment, investors flocked to this market segment and it transitioned in to the Alt-A/125% CLTV/subprime loans that were eventually the straw that broke the camel’s back when appreciating real estate values were no longer the market’s bail out.

So fast forward to 2009, and here we are today. Instead of the creativity and business planning of the private enterprises like those savings and loans that devised the tools to help fix the late 70’s and early 80’s real estate market and financing issues, we have Uncle Sam “fixing” things. From the Home Affordable Refinance and Modification programs put forth in the 2009 stimulus package to the $8,000 first time homebuyer tax credit to the Neighborhood Stabilization Program financing tool released to help move foreclosed homes off the market in to owner occupants’ and multi-family non-profit/developers' hands. Affordable housing and bond programs are likely to be funded again soon making low interest rates and down payment assistance available again for low-to-moderate income home buyers. Now, I’ve seen hands on the families who have used these tools to purchase homes, homes that they couldn’t afford otherwise. Homes that are 100% financed in a still declining market, but the buyers' monthly housing expense is less than what they were paying in rent. Once again, I believe homebuyer education is the key to success for these homeowners. In 26+ years, the homeowners I’ve worked with understood what they were getting in to, set their budgets, and have maintained and sustained homeownership. Yes, with the economic downturn and chronic job losses that are a part of today’s equation, some of the buyers I’ve worked with have benefited from the HARP/HAMP programs, some have sold their homes and rented instead, a couple have lost their homes when they could not find replacement jobs that would bring the equivalent income for jobs they had lost.Most are struggling along, staying in their homes.

I’ve paid my dues, and done my time in the mortgage and real estate industry. I have not been afraid to take on the challenging transactions, and for this I have become “known”. I have given this knowledge and expertise not only to my clients, but to the community through the HUD approved ABC’s of Homebuying course and Default/Foreclosure Prevention event like the monthly ones going on at ACCESS Inc. and the H.O.P.E. Ownership Preservation Event held at Rogue Community College/SOU in downtown Medford earlier this month. But, good Lord! – it would be nice to have some EASY transactions again! I’m feeling like the hamster on their wheel, an exercise in productivity, but wondering where I’m going. As I ponder this further, I realize it is not necessarily the products I have educated myself on and assisted home buyers and borrowers with obtaining, such as the Neighborhood Stabilization Program that has been such a monster to deal with, or the various down payment assistance programs, or the construction loans that are beginning to slowly reappear in the market again with very stringent guidelines for the few homeowners and builders venturing out to build dream homes or the Jumbo loan programs that almost completely disappeared for a while by becoming so pricey they were not a viable tool but have stabilized and re-entered the arena. Rather, I’ve discovered that the entire mortgage industry is tipping leeward, and many of the life boats already took off with so many Realtors and Mortgage folks in them, while I’ve had my nose to the grindstone bailing with all I’ve got. I’M GETTING TIRED!!!! Too tired to believe the likely to be corrected downward 3.5 GDP reports mean much of anything when the US consumer is focused on getting jobs with enough pay to cover basic needs and escalating food/oil/medical prices and the Federal Reserve Board is in the comment period for regulatory proposals that are meant to leave the Big Four in place, while on the other hand our government is announcing they’ll gladly step in and nationalize the U.S. banking system.

Our youngest is completing surveys to show what careers would be good to focus on based on interests and talents. Hmmm…….. What is a 26 year mortgage and real estate industry veteran to do? Where is that survey…maybe I need a new ship. I definitely need an EASY button.

See you out there!

SHOULD I PAY MY MORTGAGE? WHEN SHOULD I STOP PAYING MY MORTGAGE?

American Pacific Mortgage- Karen Cooper, Oregon & California — Thu, 29 Oct 2009 12:27:19 -0500

Although Richard Zaretsky Esq. wrote this in June, the information is very pertinent now. Here in Southern Oregon, some of the rules are slightly different, but the overall circumstances homeowners are facing are the same. You might want to check Oregon laws with an attorney, such as Doug Schmor of Brophy, Mills, Schmor et al. here in Medford Oregon if you are a Southern Oregon home owner looking for solutions and guidance when considering a modification, short sale or foreclosure.

Via Richard Zaretsky, Florida Real Estate Attorney (Richard P. Zaretsky P.A. ):

This seems to be THE NUMBER ONE question I get. Unfortunately there are several answers and which is correct for you depends on the Circumstances. I will address the common scenarios in this article.

Policy in my office is to never "tell" - as in "instruct" - our borrower client to pay or not to pay their mortgage. Paying or not paying has a lot of collateral effects and the borrower needs to know what they are before making the decision. We don't make the decision for the borrower (our client) because the effects of paying or not paying are not going to affect me - but they will affect the client, so it is the client that must make the final decision.

Let me make one issue clear - when we are hired to help facilitate a short sale or loan modification it is far easier for us to negotiate with the lender if the payments are late, but it is almost never a requirement. The exceptions to which will be discussed later in this article. Additionally, internal rules change at the banks constantly. A new client came in totally frustrated. They called their bank to help with a modification and the bank said they could not address their situation until they were at least 60 days late. So the near perfect (800+) credit score couple stopped paying for 60 days and then called the bank back. Now the bank says that because they are 60 days late they cannot speak to them about a modification! The point is, if you don't have to be late then why voluntarily create a late payment credit history that will adversely affect your credit-dependent life almost immediately and for years to come?

SO LET'S GET INTO IT - Danger - this is a long article and it covers a lot of ground!

Short Sale:

A borrower that is current and contemplating a short sale wonders if they should stop paying their (first) mortgage. They are upside down and until now they have been current. However they are paying the mortgage at a cost of not paying other bills. (Other or different facts may be that they are paying all their bills but taking the money from savings or a pension fund to make those payments, or they are borrowing money from another equity loan).

Generally, it is not a good idea to get into debt to pay your mortgage, unless you have a solid plan to both (i) keep the mortgage current and (ii) repay the additional indebtedness you are creating. It is not like taking from one pocket to put into another - it is more like taking from someone else's pocket to pay your bills. This would include credit card loans as the source of funds. It all has to be paid back, so if you don't have a plan to pay it back, don't borrow it in the first place! You are only digging a bigger hole for yourself and making it harder to get out of the hole.

If you are taking from your pension or savings money, again you better have a rock solid plan to get that money back into those accounts, or there is no sense in giving up that hard earned and usually irreplaceable retirement money, especially considering these are monies that are usually protected from creditors' judgments including those your mortgage lender could obtain (deficiency judgment)..

Of course the "amount" of money you have "in reserve" comes into consideration. If you have 2 million dollars in reserve and you decide to spend 10% of it to keep the loans current until you can short sale the property, that plan has a basis that the 10% is not going to make a difference in the way you run your life over the remaining time you have left as a mere mortal.

Sometimes, but rarely, we run into a lender that says they won't approve a short sale or modification because the borrower is current with his payments. When we have encountered this it is in most cases associated with a government backed loan, (but later on we will show you why this may be motivated by plain greed on the part of a loan servicer). A properly compiled financial snapshot of the borrower should show why they are current and what will happen if the short sale or modification is not approved.

Your decision on how to proceed should be based on what goal you are trying to accomplish and how you plan to get to that goal (see how to determine your goal).

Mortgage Modification:

Apart for some voluntary government programs regarding (Fannie Mae or Freddie Mac) government involved mortgages, I know of no lender that absolutely will not deal with a borrower who is current with their mortgage payments. Lenders deal with all sorts of situations and "absolutely not" is just not in the vocabulary. A typical borrower calling a lender may hear that they must be late, but that is more of a "vetting" statement than an absolute policy.

The exceptions are some government program guides for modification. The first step to seeing if your loan comes within this exception is to see if it is a Fannie Mae or Freddie Mac loan. You can do this online at the Making Home Affordable site. Many servicers and lenders whose loans are not "government backed" are now choosing to follow this government plan (known as the Home Affordable Modification plan or more affectionately called the "Obama Plan" - see below) for the simple reason that they are being compensated by the government for each successful modification they execute within its guidelines, and either the servicer or lender receive a residual bonus for the loan staying current under the modification. In these cases we have seen non-government backed loans insist on the borrower being late to qualify for modification as well. What is confusing on this point is that when the plan was introduced it included modifications (and compensation for such) for current loans as well. However, we are told time and time again from the lenders directly that they must be late to qualify. There is no such rule in the guidelines.

While this is contrary to what has been published by the government about the plan, keep mind that following the plan and any of its various aspects is entirely voluntary and up to the Lender or servicer. They can pick and chose from this plan as they see fit for their own internal reasons. Here is a more interesting twist - a servicer that modifies a delinquent loan is paid more under this incentive plan than if the borrower were to modify while the loan is current! If the borrower is current, the servicer can receive up to $3,500 in incentive fees from the government. If the borrower is delinquent, the servicer can receive up to $4,000 in incentive fees from the government. Thus it seems that it pays ($500 to)the servicer to encourage a borrower to be delinquent!

We often see a client that fits the profile for modification under this government plan. Some of these plans are said to require that to be qualified the borrower must be late 60 days (see Guidelines page 5 at bottom). But in fact, being late is not a requirement, but only one factor of many (see Guidelines page 16 at the top - "However, a NPV (net present value) positive result is not necessary to qualify a loan for a Home Affordable Modification"). If the goal is to qualify under such a plan as put in place by the lender at that time, then to accomplish that qualification the borrower may need to make themselves late, but that cannot be determined in a 2 minute telephone call with a lender representative. I cringe when we go this route because just like these "plans" came into existence, I can see them change the plan thus leaving the now 60 day late borrower with ruined credit scores that occurred needlessly.

Generally about a quarter of our modification clients never go late and still get a modification offer from the lender. However, keep in mind that nearly all lenders put up as their first line of defense the policy that going late is a necessity to qualify. We can only speculate this is done to deter the enormous inflow of loan modification requests from borrowers that would come in if this was NOT said to be a requirement. It also helps address those in the most dire amount of need first.

The Pro's and the Con's:

The general rule of thumb we use is if you can pay your mortgage and maintain your life's necessities, you may consider keeping the loan current, taking the points in this article into account. However, if you need to choose between buying food or medications and paying the mortgage, the decision that should be made is clear: your life necessities take precedent.

Here are the pro's to consider when in the short sale or modification process. Keeping the loan CURRENT has the following benefits:

a) Your credit score is not dinged until the short sale transaction occurs (and not at all in most loan modifications) and your overall credit score reduction will be minimized, and b) You will remain in good standing with your lender without worry of penalties, fines, or a foreclosure.

The "con's" of keeping the loan current are that:

(a) You will be out of pocket for the monthly mortgage payment (monies which you may or may not need to survive), and

(b) Your lender may question the sincerity of your claimed hardship, and you may be spending funds that would otherwise be potentially (but rarely) forgiven by the lender. In addition, occasionally the lenders in a short sale may require a lump sum payment above the sale amount from the borrower to forgive the debt. Coming up with that money is sometimes the difference between a deal or no-deal. If you can put your mortgage payments aside and stockpile them, it will help you cover that potential lump sum.

A similar pro/con approach applies to GOING DELINQUENT with your mortgage. In favor of going late is being able to keep the unspent mortgage payments in your pocket (or applied towards other necessities as the case may be) in which event your hardship may appear more sincere to the lender. On the other hand, there are very real consequences to going late with your mortgage payment:

a) You WILL incur late fees and other penalties on the late interest. Usually this is not a large issue as it is part of the forgiven debt in a short sale and usually forgiven in a modification, but it is something to consider,

b) Your credit score downgrade will be harder as you will compound the short sale hit with a 30 day late, 60 day late, etc, (and if this is a modification you will make a non-negative credit score event turn into a negative credit score event), and

c) You will eventually cross a threshold (typical industry standard of 90 days late) where the lender will initiate a foreclosure action in State court.

Going Late on Your Second Mortgage:

Often a borrower comes to us and says that they are late on the first mortgage but current on the second mortgage. The second mortgage is almost always totally upside down with no equity left in the property to secure that financial obligation. The borrower says they paid the second mortgage because they had the money for the smaller payment (second) mortgage but not the larger amount first mortgage. Our answer - if you don't pay the first mortgage they are going to foreclose it and then paying the second mortgage is not going to save your house.

Lately we have seensecond mortgage lenders with 90 day late mortgages skipping the foreclosure process (since if they cause a sale of the house it is sold subject to the first mortgage, and thus any buyer still has to pay the first mortgage, which usually makes no economic sense). Instead the second mortgage lender sues the borrower on the promissory note only and gets a money judgment that they can keep for a long time (20 years in Florida).

So if a client says they are paying the second mortgage but not the first mortgage, we usually suggest they look at the common sense approach and what are they likely to gain or lose by doing so.

Effect of Non-Payment / Late Payment on Credit Score:

This is a big question and nowhere is the answer clear cut. Definitely if you get a report on your credit that you were "late" (in mortgages that means 30 days or more late) then your credit has been "dinged" and your credit score is adversely affected.

Credit scores are used for many purposes, including the amount of credit you can get on a credit card, the interest rate you get on credit cards, car loans and mortgages, your ability and price of life and disability insurance and even car or house liability insurance, your ability to get a certain type of job, or to establish business relationships, and your ability to rent a place to live, to name a few. So credit scores are important. If you want to better understand credit scoring you can see the Federal Reserve Board's Report to Congress from April 2008.

How much your credit score is affected by a 30, 60 or 90 day late report depends on a lot of other factors about your financial well being, your past credit history and myriad other issues. Generally though we have our clients reporting drops of as little as 50 points for a no late payment short sale or up to 150 points for a short sale with multiple late payment reports. We have seen an 800 go to 720 and we have seen a 740 go to 500. It all depends on too many uncontrollable credit issues to be able to give a formula that works for everyone. For a discussion on credit scores this our past article.

Confused?

Rightfully so. The fact of the matter is that we are in uncharted waters and there is no industry standard for Short Sales or Loan Modifications, which makes pinning down exactly what the Lenders may do near impossible. Pile on the fact that there are a large number of lenders out there and each have their own internal policies which change as readily as the tides. The best anyone can hope to do is make an educated decision, set a plan, and be ready for anything.

Copyright 2009 Richard P. Zaretsky, Esq.

Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make. This article is for information purposes and is not specific advice to any one reader.

Richard Zaretsky, Esq., RICHARD P. ZARETSKY P.A. ATTORNEYS AT LAW, 1655 PALM BEACH LAKES BLVD, SUITE 900, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660 RPZ99@Florida-Counsel.com - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW - We assist Brokers and Sellers with Short Sales and Modifications and Consult with Brokers and Sellers Nationwide! Shortsales@Florida-Counsel.com New Website www.Florida-Counsel.com. See our easy to find articles at SHORT SALE AND LOAN MODIFICATION TABLE OF CONTENTS

Home Comfort Hearth of Grants Pass & Phoenix Oregon Is Great!

American Pacific Mortgage- Karen Cooper, Oregon & California — Sun, 25 Oct 2009 19:40:26 -0500

We’ve been investigating replacing our fireplace insert since before the City of Medford Oregon where we live passed an ordinance making it a requirement that fireplace inserts like the one that came with the house we bought in the East Medford Hills in 2004 need to be removed upon sale if they don’t meet the new criteria. Of course, being in compliance with the particulates being released in to the air is important to us. Important, too, is the overall cost of using the wood fireplace insert for our heat source, since our home also has a central heating/AC system. We were finding the “recapture period” for replacing our fireplace insert was going to be a long one, since the wood fireplace insert we have did not get installed with the chimney liner and parts required today, as we discovered after having an installer come take a look and give us an estimate last year. So, this project kept getting put on the back burner in the “one day” part of our “to do list”, and we kept watching those big winter gas bills and/or blazing through 2 ½ cords of wood during the winter. We had already replaced our windows & doors, and figured we’d stick with those energy savings for the time being.

Along comes Uncle Sam with the 2009 Economic Stimulus Package, and we dust off our “to do list” and have another look at this replacement project. Now, we can receive up to $1,800 in Federal and State tax credits for replacing our wood fireplace insert. Well, THAT got our attention! Now, not only will 40% of the expense be offset, but the efficiency with this new wood fireplace insert will bring the overall annual expense down AND shorten up our recapture period to about three winter seasons. Sign us up!!!! Happy birthday to me, I got a brand new wood fireplace insert for my birthday last week. With 30-percent federal tax credit for costs incurred up to $1,500 AND the Oregon Residential Energy Tax Credit program which offers up to a $300 tax credit, we’ll be saving roughly $1,400 of the $3,500, and expect to get by with only one cord of wood.

We had been talking to store owners at the Fall Home Show and around town for a couple of years, one of whom really stood out in our minds when we decided to consider taking on this project again. Mike at Home Comfort Hearth was knowledgeable and professional when we first spoke to him. Being the types who do a great deal of research online before making a major purchase, we discovered that Mike knew his stuff and so does his crew. People we spoke to about Home Comfort Hearth spoke very highly of Mike and his crew. Now we can, too. From our early Saturday morning visit with Bob in the Phoenix store of Home Comfort Hearth who asked us the questions to help find the right wood fireplace insert that would meet our needs while helping us make our decision between pellet and wood, to the owner Mike’s home visit to confirm the installation cost, and the prompt installation as promised/scheduled by Bobby and Jason, we would recommend Home Comfort Hearth in Grants Pass or Phoenix Oregon to anyone looking for a wood stove or fireplace insert for their home. If you, too, are in the market for a fireplace insert or wood or pellet stove, go to Home Comfort Hearth in Grants Pass or Phoenix. Their professionalism, experience, service and reliability are commendable! It’s no wonder they’ve been in business since 1979.

Home Comfort Hearth Home Comfort Hearth

224 SW “G” Street 166 South Main Street

Grants Pass, OR 97526 Phoenix, OR 97535

(541) 955-4446 (541) 535-3080

And, now, for a shameless plug. My husband happens to be the owner of Superior Windows & Doors of Ashland and Medford Oregon. Energy efficient Windows and Doors are also included in these Federal and State Tax Rebate programs. The guys at Superior Windows & Doors of Ashland and Medford Oregon have made a point of knowing about how homeowners may meet the material requirements in order to obtain these credits when replacing their windows & doors, and can point homeowners to knowledgeable, reputable general contractors who can install these windows & doors for you. So if part of the energy efficient home improvement projects on YOUR “to do list” includes replacing your old drafty windows and doors, and you, too have been waiting for the time when this project would become cost effective with a quicker return on your investment, contact Superior Windows & Doors:

Superior Windows & Doors Superior Windows & Doors

300 E Hersey Street # 6 1121 Helicopter Way #100

Ashland, OR 97520 Medford, OR 97502

(541) 482-0061 (541) 773-9999

http://superior4windows.com/gogreen.htm

See you out there!

10 Commandments Home Buyers Must Follow

American Pacific Mortgage- Karen Cooper, Oregon & California — Wed, 21 Oct 2009 10:36:21 -0500

These are some great tips for homebuyers who don't want to be in the midst of escrow only to find out they won't be buying a house after all! Thanks, Chantal!

Via Dr. Chantal Saucier (Keller Williams Realty Acadiana):

These 10 Commandments home buyers must follow may seem like common sense to many. Buyers, however, can sometimes forget with all the excitement surrounding the buying of their new home. In the past couple of weeks, I have heard of two separate buyers who saw their home loan turned down, and their dream shattered, a few days before closing because they had bought furniture for their new home before it actually became their home. Both of them now have beautiful furniture with no home to put them in.

These two buyers were not my clients but it always hurts when I hear of transactions falling apart for reasons that could have been avoided. These 10 commandments are part of the buyer packet I give all my clients when we first meet and I always stress that once they get pre-approved and the process is started, they can't do anything that might affect their credit.

1. Thou shalt not change jobs, become self-employed or quit your job.

2. Thou shalt not buy a car, truck or van (or you may be living in it)!

3. Thou shalt not use credit cards excessively or let your accounts fall behind.

4. Thou shalt not spend money you have set aside for closing.

5. Thou shalt not omit debts or liabilities from your loan application.

6. Thou shalt not buy furniture.

7. Thou shalt not originate any inquiries into your credit.

8. Thou shalt not make large deposits without first checking with your loan officer.

9. Thou shalt not change bank accounts.

10. Thou shalt not co-sign a loan for anyone.

If you are in the process of buying a home, remember that your credit must not change or be affected in any way until you actually sign the paperwork and get possession of your new home. Lenders will not only look into your credit when you first get pre-approved, they will check it again (and sometimes again and again) before they let you sign the mortgage. If you want to buy new furniture for your home or change jobs, just be patient. There will always be time to do it after the closing.

Wordless Wednesday - Isn't She A Butte?

American Pacific Mortgage- Karen Cooper, Oregon & California — Wed, 21 Oct 2009 10:26:48 -0500

HOPE Arriving For Struggling Southern Oregon Homeowners

American Pacific Mortgage- Karen Cooper, Oregon & California — Fri, 16 Oct 2009 08:03:45 -0500

Are you, or is anyone you know, struggling to find a way to stay in your/their home here in Southern Oregon? HOPE is arriving for struggling Southern Oregon homeowners who may have been attempting to refinance under the Home Affordable Refinance Program only to find out they needed to be under the Home Affordable Modification Program because they did not qualify.

Bank of America, Wells Fargo and Chase will all be here in Medford Oregon to talk to homeowners who have existing loans with these three banks and may have been caught in phone system hell trying to work their way through to find out how they may save their homes from foreclosure after suffering a job loss, decreased hours/pay, a resetting adjustable or interest only loan, or have credit scores or property value too low to qualify for a refinance. This event is for home owners living in their homes – not investors.

It can be a scary world out there, and trying to get to the right source of information is important. Most of the help out there that Homeowners need is offered FOR FREE. Heard about scammers? Or, companies that jumped from a floundering mortgage industry over to do Loan Modifications – for $3,000+? Been told you could refinance, only to be turned down after all?

Come find out what legitimate options are available to you by attending one of the workshops at this free Home Ownership Preservation Event on Saturday October 17, 2009 from 9a.m. to 4 p.m. held at the new SOU/RCC Higher Education Center located in downtown Medford at 101 South Bartlett (between Central and Riverside at the corner of 8^th Street near the Medford Library).

If you haven’t already scheduled an appointment, it’s okay – walk-ins are welcome! Try to get there early if you can, though, and make sure you bring the following documentation with you for anyone on your loan if you would like to speak to one of the Loss Mitigation representatives that will be there representing Bank of America/Chase/Wells Fargo:

Copies of your most recent mortgage statement(s) received
Copies of all recent correspondence you have received on your mortgage
Closing statement and copies of your loan documents for your mortgage(s)
A recent credit report (you may get this once a year for free from each credit bureau by going to www.annualcreditreport.com )
Copies of your income documentation (paycheck stubs for the past 60 days, 2 years W-2s & 1040 tax returns, award letters for social security/pension/retirement benefits with 3 months bank statements verifying these deposits, unemployment benefits award letter/checks)
Copy of your driver’s license(s) and social security cards
A monthly Budget Worksheet, such as THIS ONE

The more of this documentation you have with you, the better your chances of having one of these bank representatives be able to give you an answer on the spot. If you can’t bring this with you, come anyway! You may still get valuable information at this event AND an appointment will be made for you to come to the next Default/Foreclosure Prevention meeting held monthly at ACCESS Inc. with a one-on-one conference scheduled once you learn about the available options and have the documentation needed for the HUD approved housing counselors to determine how they may help you.

HOPE…it’s a Good Thing!

FOR MORE INFORMATION, CONTACT ACCESS, INC. AT 541-774-4305 OR GO TO WWW.ACCESS-INC.ORG

See you out there!

Need A Wonderful Flooring Installer In Jackson County Oregon?

American Pacific Mortgage- Karen Cooper, Oregon & California — Thu, 08 Oct 2009 14:28:20 -0500

Meet Ray Feckner of Ashland Oregon. Ray is the gentleman that came highly recommended to my husband and I when we called Peter McBennett, one of our favorite general contractors who installs the windows & doors for our store, to see about replacing the vinyl flooring that was damaged in a rental we have in Old East Medford. Ray met us when we were having the final walk through with our outgoing tenants, and gave us a great quote for his services to replace the kitchen/laundry/bath area vinyl flooring. It’s no wonder he has had this family owned and operated residential and commercial flooring installation business for 30+ years.

With Ray’s recommendation we went down to No Frills Flooring to pick out the vinyl and trim materials, which Ray picked up before installing. No Frills Flooring offered great quality products and selection, and their service was excellent.I know where I'll be headed when it comes time to re-do the carpet and vinyl in our main home - hopefully replacing them with hardwood and/or travertine/tile!

Ray Feckner completed the vinyl flooring installation yesterday. What a fantastic job he did! The tenants had shopped around for quotes before they gave notice, and Ray came in almost 30% less on the job. Better price and for great work, and who doesn't want to say a bit these days? We were glad to be able to hold less out of the tenants' security deposit and refund almost $300 more than they were expecting.

If you are looking for a reliable company to install your Carpet-Vinyl-Laminate residential or commercial flooring, do yourself a favor…call Ray Feckner at (541)944-8064. You’ll be glad you did!

See you out there!

Where Is Louise Dix? - The Ongoing Saga of Oregon Neighborhood Stabilization Program

American Pacific Mortgage- Karen Cooper, Oregon & California — Tue, 06 Oct 2009 19:21:15 -0500

Monday October 5^th was the official release for the State of Oregon’s Neighborhood Stabilization Program. The City of Medford Oregon which has its own program funding released on September 4^th but put the program back on hold. Why? Could it be because the City removed Louise Dix from her position as Resource Coordinator for the City of Medford? Now we HAVE no Neighborhood Stabilization Program Coordinator for the City of Medford’s Neighborhood Stabilization Program?

An interim person is being assigned for the home buyers I am work with whose application was submitted on September 4^th, whose transaction is scheduled to close the end of this month, and hopefully she’ll be trained and ready to roll quickly, since I’ve a LOT of qualified buyers who are interested in this program.

Where is Louise Dix? We miss you!!!!

See you at the closing table!

What Has Happened To Our World?

American Pacific Mortgage- Karen Cooper, Oregon & California — Tue, 06 Oct 2009 10:44:08 -0500

Here it is, Autumn in Southern Oregon. It seems that overnight the flip was switched and Summer was gone. With frost advisories again, a run to the vegetable garden was in order to harvest what may be the season’s final harvest. The call has been made for this Winter’s wood to be delivered. Thankfully, our temperatures are easing upward again, and we’ll have another chance to get out on the boat on our favorite mountain lake, and say our farewells for this season before the boat is hauled down and put in storage until next Spring.

Lately, this same “cooling” seems to have dramatically snuck in to my mortgage world. A sense of futility comes through when calls are made to question turn times that haven’t been met. “Sure things” are no longer quite so sure, and justification has become the name of the game. Proposals for guideline changes and new programs are flooding the gates, with the long term affects of these decisions left either unexplored or ignored. In 26+ years, I’ve seen quite a few “cycles” in the real estate/mortgage industry. Is this really another cycle? Is this just another season passing by? Are you seeing this in your world, too?

Maybe it’s just the cooling trend that is getting to me, but it seems to me that it’s more than just a change of seasons taking place…

See you out there!

Ashland Rotary Run Saturday October 3, 2009 – Come Out and Support Eradication of Polio!

American Pacific Mortgage- Karen Cooper, Oregon & California — Fri, 02 Oct 2009 10:31:12 -0500

Did you know that Rotary International, with the support of the Bill and Melinda Gates Foundation, have set a goal to eradicate Polio worldwide? Each Rotary Club is finding a way to do their part to support this lofty goal. The Rotary Club of Ashland Oregon is having a 5k & 10k run on Saturday October 3, 2009. Come on out and show your support of this great event and worthy cause!

Lithia Park - Ashland, OR 5k and 10k Run/Walk

These 10K and 5K runs offer a beautiful tour of Ashland, Oregon. 10K Runners start at the band shell in Lithia Park, run through the Historic Railroad District, and take the bike path towards Ashland Ave. The return route follows Siskiyou Boulevard past Southern Oregon University, the Oregon Shakespeare Festival, and finishes with a run through beautiful Lithia Park and finish at the band shell. 5K participants start the same way, go through the Railroad District and return by East Main to the Library and rejoin the 10K route there.

7:00 Registration tables open

8:00 Run begins

9:00 Pancake Breakfast sponsored by Ashland Rotary

10:00 Run finishes

10:30 Awards Ceremony

See you out there!

To be held accountable: New Oregon loan modification law for home owners in foreclosure

American Pacific Mortgage- Karen Cooper, Oregon & California — Wed, 30 Sep 2009 17:11:46 -0500

Melina Tomson of Salem Oregon posted some great information on the new Oregon Bill 628 that requires lenders look at whether or not a home owner in financial distress is eligible for modification BEFORE foreclosure is finalized. Our local Community Action Agency that does the HUD foreclosure prevention counseling, ACCESS Inc. is anticipating an uptick in the number of home owners in need of assistance here in Southern Oregon. Hopefully this bill will help some of them, too - maybe get some loan modifications through for eligible homeowners so they may stay in their homes!

Via Melina Tomson, M.S. Salem Oregon Real Estate Specialist (Tomson Burnham, llc):

"I've been trying to talk to the bank about a loan modification for 8 months. I give up," said the caller on the other end of the line.

With unemployment still high many Salem Oregon area homeowners are in a dire predicament these days. The letter that comes in the mail stating their home is headed for foreclosure is not happy news. In the 2009 Oregon Legislature, a bill was passed…Senate Bill 628 for the curious. This bill requires lenders to meet with borrowers facing a foreclosure and see whether or not they qualify for a loan modification. It doesn’t guarantee a loan modification because sometimes people just can’t stay in their homes.

When the notice of default comes in the mail, along with it will be information about loan modification. As of yesterday, if the borrow requests a meeting, either in person or on the phone, the lender MUST meet with the borrower OR show that they evaluated the borrower for a loan modification and the buyer didn’t qualify. They need to do this process before foreclosing on a home.

According to the State of Oregon:

Oregonians who are seriously behind on their mortgage payments should watch their mail for the new foreclosure notice. Once they receive the notice, they should immediately take the following steps:

1. Call their lender to set up a meeting to discuss a loan modification.
2. Fill out the loan modification request form provided in the notice.
3. Call 1-800-SAFENET and ask to be referred to a nonprofit foreclosure counselor. The counselor can help homeowners request a loan modification.

Homeowners should act fast – they have 30 days from the date of the foreclosure notice to request a loan modification.

Read that part in bold. If you are a homeowner in trouble this is not a means to stall your foreclosure. You can’t request a loan modification the day before auction. This law is meant to hold lenders more accountable and be responsive to the many homeowners that have requested help with no response in sight.

So, if you are one of the many weary Salem Oregon area home owners that are facing a short sale or foreclosure… call the Department of Consumer and Business Services at 503-947-7854 or call 1-800-SAFENET to be referred to a foreclosure counselor.

This post was first published on the Salem Oregon Real Estate Jumble.

Symptom	Cold	H1N1 Flu
Fever	Fever is rare with a cold .	Fever is usually present with the flu in up to 80% of all flu cases. A temperature of 100°F or higher for 3 to 4 days is associated with the flu .
Coughing	A hacking, productive (mucus- producing) cough is often present with a cold.	A non-productive (non-mucus producing) cough is usually present with the flu (sometimes referred to as dry cough) .
Aches	Slight body aches and pains can be part of a cold .	Severe aches and pains are common with the flu .
Stuffy Nose	Stuffy nose is commonly present with a cold and typically resolves spontaneously within a week .	Stuffy nose is not commonly present with the flu .
Chills	Chills are uncommon with a cold .	60% of people who have the flu experience chills .
Tiredness	Tiredness is fairly mild with a cold .	Tiredness is moderate to severe with the flu .
Sneezing	Sneezing is commonly present with a cold .	Sneezing is not common with the flu .
Sudden Symptoms	Cold symptoms tend to develop over a few days .	The flu has a rapid onset within 3-6 hours. The flu hits hard and includes sudden symptoms like high fever, aches and pains .
Headache	A headache is fairly uncommon with a cold .	A headache is very common with the flu, present in 80% of flu cases .
Sore Throat	Sore throat is commonly present with a cold .	Sore throat is not commonly present with the flu .
Chest Discomfort	Chest discomfort is mild to moderate with a cold .	Chest discomfort is often severe with the flu .