The government has still not yet decided to extend the First Time Home-buyer Credit. What are they waiting for? If they knew how bad it really was out there they'd act on extending the tax credit. Our mortgage modification experience tells us that many lenders and mortgage servicing companies are not playing fair with regard to the Federal Making Home Affordable Program. Many lenders and mortgage servicing companies are making it very hard for the consumers to get approved for these federal programs and it is going to be a matter of time before the housing inventory increases.
If you have an opportunity to write or to call your legislator please do so immediately. Time is of the essence!
Well it's close to the end of the month and still no national lenders have committed to lend under the new HOPE FOR HOMEOWNERS being proposed by FHA/HUD. It's really not hard to understand why no national and/or regional lenders have stepped up to the plate to finance under the program. After reading, in detail, about what risks to a new lender are and what little future benefits a new lender would get, it not hard to really truly understand the problem. Unless the government adjusts some detail about this program its hard for us to see any lenders stepping up to the plate.
Another major draw back to the program is the borrower's requirement to give up future equity in their homes. Right now many are left under the assumption that there is no other choice and they have to give up anything in-order to get help! That is all the borrower needs, especially the ones who ran into unforeseeable circumstances that helped cause some of their problems. Most people we speak with still have jobs, and have the ability to pay but because most mortgage servicing company employee's are trained to collect payments there is little help or guidance for the homeowners who need the help!. Many pass these helpless borrowers over to unorganized housing agencies who all operate under different charters and bylaws, and which most employees who work at these organization are underpaid, overworked and understaffed facilities handling hundreds of calls a week. What most people don't understand is that many of these employees of the current mortgage company's and non-profit agencies don't get incentives on solving foreclosure problems. Most would like to pass your call to someone else to handle mainly because they are limited in their resources and abilities. That's where we come in.
We believe that in many cases we could renegotiate terms that make sense for homeowners to stay in their homes. If you asked us this a year ago we would not be so optimistic.
To find out if you or your client's might qualify to save their homes under favorable terms go to WWW.HOPEFORHOMEOWNERSHIP.US
Click the yellow link to register and complete the online application. You or your client will be contacted within 24 hours of receipt either by phone or e-mail.
DON'T TAKE AN OVERPRICED LISTING IT MIGHT COST YOU MORE THAN YOU THINK!
REAL ESTATE DECLINING MARKETS, WATCH OUT!!!!
These are the resent changing rules that will affect an overpriced property. Don't be caught with one. Use this article to inform and prepare your sellers.
This is what most banks and mortgage companies are requiring from appraisers.
What is the sale to list priceratio?
Generally, the sale to list price ratio is based on the "original list price compared to the "sale price". For example, Original List Price is $350,000. At day 60, price is reduced to $335,000. The final sale price is $330,000. This represents a sale to list price ratio of 94%. A sale to list price ratio below 90% indicates rapidly declining values that could lead to a reduction in maximum LTV or a loan declination for the buyer. This is why it is more important than ever to price the house right. Do not take over priced listings because they will hurt everyone in this market. It isn't fair but the banks and the government are the ones who make the rules. We just have to learn what the new rules are and play by them.
Also there are special requirements that apply to appraisals that identify adverse market conditions (for example, an over supply of properties, or marketing times in excess of six months (180 days)). These appraisals need to be documented and reviewed carefully. Required documentation includes:
•1.) At least two of the three comparables must be dated within 90 days of the appraisal date.
•2.) A minimum of one listing or pending sales is required. Ideally and when possible, at least two additional comparable listings or pending sales should be provided.
•3.) The appraiser must address the impact on marketability and value of both favorable and unfavorable factors and avoid using subjective, racial, or stereotypical terms, phrases or comments within the appraisal report.
•4.) Days on the market must be reported for subject property and each comparable sale must support the average marketing time listed on Page 1 of the appraisal.
•5.) Appraisal must contain the total number of listings, and the sale to list price ratios as well as average marketing time for those listings, based on data available for most recent and preceding quarters (last 90 days an last 180 days) If the appraiser is unable to provide two comparables within 90 days and/or current listing(s), the appraiser must provide a detailed explanation and identify whether value adjustments resulted. The explanation from the appraiser must be consistent with other tools utilized to review the appraisal. When the appraiser is unable to provide this (or other) information, second level review through some banks must be required.
By Ronald A. Giannamore
Managing Loan Specialist with Mortgage Services, Inc. for over 23 years.
Well fellow agents and mortgage professionals the news is out. Fannie Mae and Freddie Mac have just made their first change to their new LLPA (Loan Level Price Adjustments). Imagine, only 60 days with the new pricing hits and they are changing them already. It seems that having a 720 credit score is not high enough. You now need over 739 score to get the very best price. Come on are the clients with over a 720 really giving them problems or is this just another way to get more money? I already know the answer. The government really can't think we are that stupid. When are they going to step in and take Fannie and Freddie over? When are they going to increase rates to where they should be instead of having us sell their extra fees to our borrowers. Oh ya, what did they call that when the brokers did it, gouging.... The mortgage professionals that have been in the game for many years can whether this storm, even after everyone bashes us in the head for many years about how terrible we ALL were. We all know that there were a few bad apples in our bunch, but let's remember who let them in. Yes, the banks allowed these people to get licenses and become brokers. And yes the banks are governed by our government. The problem, oh yes the government. Let's wake up and start listening to the soldiers in the fields. The professional mortgage bankers/brokers and real estate agents. This new policy will further reduce the already staggering problem of foreclosures. The less people in the market, the less houses will sell, which will cause more inventory, which will cause properties prices to go lower, that will cause more people to justify walking away, which will increase more foreclosures, and so on.... It's pretty simple. Can we blame them for walking away from their homes when the government keeps protecting their personal interests in banks and wall street firms, of which they have an equity stake in and continue to bail out of problems. Or will they continue to make those homeowners feel like peasants and losers when they make those HARD decisions about walking away? The mortgage problems have mostly been solved by getting rid of the Stated income, no-income verification loans, the negative-am loans, the Pic-a-pay mortgages, the Sub-prime adjustable rate mortgage with high prepayment penalties..... let's be smart......let's start making a difference. Let's start putting your personal interests aside and make a difference for the communities that elected you. People remember this when is comes time to vote again.
If you are in the market looking to buy a home, now is the time. The federal government has recently passed legislation that would allow up to a $7500 credit for first time home-buyers. Even if you are not a first time home-buyer you might be able to qualify. There are certain restriction that might allow you to qualify. This $7500 credit is not going to last forever. The government has proposed the elimination of this credit to end in 2009, so if you are considering buying or where thinking about waiting until next year, now might be the time. There are other programs also available now that might allow you to access down payment assistance and closings costs as well. Some of these programs are slated to be eliminated by the end of 2008. If you'd like to see what benefits you might be able to qualify for, feel free to access our website at www.ToMortgageServices.com or call us directly at 800.922.3210 ext 121
Ronald A. Giannamore is a Senior Managing Loan Specialist for Mortgage Services, Inc. He serves on the board of directors for a local government non-profit organization. He has been with the company for over 24 years. Mortgage Services, Inc. is a mortgage banker/broker licensed in 32 states.
It looks as though congress is actually listening. Three Congressmen and one Congresswoman have at least heard enough to present bill H.R. 6694 which would reinstate down payment assistance programs as changed in H.R.3221. We hope all senators and the president understand the importance of making these specific changes as soon as possible. In my previous blog and letter I explained that most of the problems in the mortgage market have been rectified. The elimination of many ridiculous underwriting standards, such as no income verification loans, have almost all been terminated. The only problem that still exists now are the people left with some of these mortgage, which the bill will support tremendously and the continued decline in housing prices. This change will at least provide some type of stabilization in the housing industry and provide some buyers the help they need to get started, as well as those trying to refinance or sell thier homes. The increased credit score requirements, the lowering of debt to income ratios, and the tougher appraisal reviews will help protect new borrowers and lenders in providing mortgages. At least now we can begin to breathe a sigh of relief if this new proposed bill passes.
If the politicians actually spent time with the mortgage professional community, not necessarily just with federal or state chartered bank executives, discussing ideas and potential solutions, we possibly might be able to make a difference. Congress and these executives are far from the realities which actually exist in the market place. While I agree that the highest delinquent borrowers are the ones putting little of their own cash down and getting Down Payment Assistance, once eliminated the next highest delinquent borrowers would be those next in line that put 3% or 3.5% down. The problem would still exist. It also is creating fewer home buyers in the market which would help curb the supply and demand theory. Congress can't honestly believe that providing a tax credit of up to $7,500 is going to get most people off the fence, they are dreaming! After reading all the rules on recapture terms, married couple splits and the 10% purchase price cap, it's ridiculous. If they really think we have problems now, just wait. For someone to max out and receive a tax credit for $7,500 they'd have to be purchasing a home for $750,000. These benefits are NOT going to the hard working middle class American, nor will they make much of any difference. Politicians and these banking executives can't believe that Americans are that dumb!
My personal belief is that keeping these programs in place and increasing the total upfront mortgage insurance and/or monthly premiums these people pay would be more appropriate. Or, having them participate in some matching fund program would at least allow these potential borrowers to be able to purchase and at least begin to stabilize the real estate values for many others. If this doesn't happen and our existing situation continues more people will begin to evaluate whether walking away is more advantageous than wasting money on something that continues to decline in value. You really can't blame people from doing this. American businesses cut there expense and losses every day. They sit down and have to make very difficult decisions everyday, we don't want this conversation to be the one the American family must have sitting at dinner with their children. No more the American dream, the American nightmare...
The Major Cause To These Problems have been SOLVED!
Sub prime mortgages are gone. No income verification mortgages are gone. Stated income vacations home mortgages are gone. Negative amort mortgages @1.25% are gone. PIC a payment mortgages are gone. Interest only mortgages are slim to none. These are the programs that were abused and taken advantage of for over the past 7 years. Let's be smart!!!!!! We need to start lending again!
We should protect FHA, Fannie Mae and Freddie Mac. Those who have lower credit scores and/or participate in any down payment program should pay extra insurance for protecting these entities. Too many years have gone by with no actions that this panic mode will continue to perpetuate declining property values if qualified buyers can't get access to first time mortgage money. Congress needs to force these banks to continue to lend as opposed at protecting their profitability. They continue to give low CD rate terms, now can borrower from the fed at extraordinary low rates, yet continue to horde these funds and are hesitant to lend. If they are not lending then the must be getting this money to sure up balance sheets, pay dividends, and/or continue to pay themselves and their colleges high salaries.
I agree we must change the game, but for God sake, get valuable input from the players who have faithfully been on the field playing your game by the rules. Stop blaming and ignoring us, we are the ones who have made these banks and investors, millions of dollars over the past 7 years playing their game and by their rules. The rules reviewed and approved by those in charge in congress, the state and the federal government and ignored for many years because of greed.
If you really want to make a difference spread this message and I promise I'd get 3000 soldiers that would back you! I believe in America, I am just losing faith in the system because most go with the flow and aren't willing to stand up for what is right! NOW IS THE TIME!
From: correspondence-email@lieberman.senate.gov [mailto:correspondence-email@lieberman.senate.gov] Sent: Thursday, July 31, 2008 3:23 PM To: Ronald Giannamore Subject: Correspondence From Senator Lieberman
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