Eric's Blog

Week in Review, December 7 - 11

Eric Murrietta (1st Advantage Mortgage, LLC) — Fri, 11 Dec 2009 17:13:12 -0600

A little over two weeks remain as we close out 2009 and brazenly embrace 2010. The rates that were down in the 4% range have shot back to a more expected level to where rates have been throughout the year. If the theory holds true though, we may see a small dip in rates come the end of December and into early January so be ready with those buyers to snag the best and most affordable rates.

It has been a while since I posted because of the Thanksgiving Holiday and then my first real vacation (one where the cell phone was left at the condo when we left to do exploring) since I was married in 2006. Lucky for me, the vacation to Maui was just what I needed to recharge the batteries and to attack 2010 with a vengeance. I have been researching a few different items related to the mortgage market that I am sure is great information for you and your clients. So without further adieu:

Week in Review:

Fannie Mae 8.0 and new Freddie Mac LP - In the world of loan originators, Fannie Mae and Freddie Mac LP, are the lifeline through which we can approve and not approve deals prior to underwriting. Basically, an approve/eligible rating with Fannie Mae or an Accept rating from Freddie Mac LP, means that the loan does meet minimum guidelines if the Assets, Income, Credit, etc. can be supported through verification. Why is this important? Well, both are undergoing upgrades to their Desktop Underwriting system that is going to change the guidelines for borrowers. For the past two years a decent credit rating and a DTI (debt to income) ratio of less than 57% was enough to get people qualified. THE NEW MINIMUM STANDARD FOR DTI RATIO IS 45%. Read it again! And again! The guidelines just got tighter, which means we have to be even more diligent to ensure that the borrower are qualified upfront. It can be said for sure the effect that the new DU system will have on borrowers but it does mean we are back to the underwriting of the mid 90's. Time to buckle down for 2010.

Financially - Does walking away make more sense? - An article by a lawyer, Brent White, from the University of Arizona discusses the stigma associated with walking away from your home. He makes some compelling arguments for people to walk away, because if the numbers work in their favor, they can save tens of thousands of dollars. An article, written by Liz Pulliam Westin, gives her take on the subject matter. It is interesting that people are making a moral decision when it comes to their homes not a financial or numbers decision. Brent White, discusses how the trends of foreclosures closely follows the trend of unemployment and further that people, instead of thinking logically, use emotion to deter them from foreclosing on their home. However, Liz Pulliam Westin does disagree with White as he speaks nonchalantly about the difficulties associated with credit after a foreclosure. (Of which I agree!) The most profound comments though came from White when he discussed the general public/society and their decision to keep the house being a moral decision. He believes that the lending industry and bankers don't make moral decisions, they make numbers decisions, and because of that the general public has that right.

- When faced with difficult decisions, are we hurting the economy by making a financial decision that will keep ourselves protected or should we, as Liz Pulliam suggests, continue to put our financial well being in the hands of banks and lenders who are unwilling to help? (Ms. Pulliam does suggest that banks and lending institutions improve their moral position to help but the truth is that won't happen!

PMI increases DTI Ratio - For those borrowers that couldn't get PMI because their DTI was over 41%...Congratulations, the new percentage is now 45% to match that of the Fannie Mae and LP changes above. Remember, to always find the good in any news.

Lastly, remember that the new changes always make it more difficult to close loans without underwriting asking questions or wanting more information. Sure, it can be tiring and grating, but my motto is that the Underwriters are my friends, not my enemy, and if I work with them and don't fight them the chance for overall success is greater. I will always fight for what the customer needs, but the goal is to win the war and if there are times when we must retreat and not fight small battles to ultimately win the war, then that is what I will do.

Consistent, Disciplined and Persistent Lending practices will lead to successful closings. You have all contributed in a positive way I am sure for your clients and for that they will be forever grateful.

With a little bit of elbow grease, 2010 looks to be even more promising.

Week In Review - November 2nd - 6th, 2009

Eric Murrietta (1st Advantage Mortgage, LLC) — Fri, 06 Nov 2009 17:00:59 -0600

Interesting how perspective can change in just one quick second. As soon as news that the tax credit extension had been approved (see attached document), it seemed people weren't quite as pressured to buy a home, "right now". That isn't at all a scientific observation, but perhaps just a feeling since there were a lot of people, realtors and lenders included, who breathed a sigh of relief. As a result of the extension, a few borrowers that were concerned about the deadline can now take a bit more time to find the home that works the best for them without feeling rushed. Not to mention the added benefit of continuing to help first time home buyers with a lasting benefit in the form of cash back from the government (even if it sets the deficit nationally further in the red - yes the statement is too political for this email so no further mention will be made of it, excuse the lapse in judgement...HAHA). Again, it's that whole perspective thing.

Nevertheless, rates held steady through the week and at this point on Friday, the market is saying to "bail out", which just means to be patient to see how the market moves. Again, there isn't a better time to buy a home then when you are ready. And if you are ready when rates are historically low and the government is giving you money, then by all means...buy a home.

Besides the most important news (see above) there were some other interesting items:

•· Consumer Credit Fell - AGAIN! - For the eighth straight month consumer credit fell and people were borrowing money at a slower pace than in the past. It seems we are moving toward cash and away from credit. But if it is any indication on the upcoming Holiday season, many retailers may be in for some hard times. In some cases, there are stories of retailers beginning their "Black Friday" sales this weekend. Retailers such as Walmart (no surprise there J ), Sears, JC Penney, etc. are having blowout sales every weekend leading up to "Black Friday", all in the hopes of capturing some of that consumer spending which may be very muted this year. It will be an opportunity for many to find great deals throughout the end of the year and leading all the way up to Christmas.

•· Credit Policies continue to tighten - The question always looms: when will the easing on the credit markets occur? When will it not be a battle to the finish line, with the Loan Officer asking for the borrowers' blood to get the deals done??? It seems that in some areas changes are taking place, but not always for the good. For example, trailing secondary wage earner income is no longer eligible income for any conventional loan transaction. (Trailing Secondary income - if a borrower is relocating and the old job will end before the new job begins, the old income cannot be used to qualify). Investors are now asking for three months bank statements for retirement/pension income. There are more guideline changes and credit policy changes that will increase the paperwork needed for many borrowers. Surely one would think these are not standard with every investor, however, they are derived from Fannie Mae and Freddie Mac and will become commonplace as we move forward.

•· Phoenix Coyotes are 10-6, Phoenix Polar Bears work to raise money for Breast Cancer - If you are a hockey fan, which I am, then you will be pleased with the new brand of hockey the Coyotes are playing. They compete and battle all over the ice, it isn't always flashy but they seem committed to defense and playing the game with intelligence which has led to a decent start. Sure, it will still be a long shot to make the playoffs, but at least they are enjoyable to watch. So long Gretzky! If you are interested in continuing the donations for Breast Cancer, the Junior team that I am involved with is hosting a walk tomorrow morning. You can read more about it at the website: Making Strides for Breast Cancer. You can also check out the webpage at www.phoenixpolarbears.com to see our website and its facelift to commemorate Breast Cancer Awareness.

(P.S. We carry Breast Cancer awareness into November due to our season schedule - but, hey shouldn't we be aware of dangers to our loved ones at all times)

Week in Review, 9/21/2009 - 9/25/2009

Eric Murrietta (1st Advantage Mortgage, LLC) — Fri, 25 Sep 2009 19:07:09 -0500

With the passing of Summer and the arrival of Fall; the Holiday season begins to quickly approach. There were a couple items of note this week within the mortgage market and within the real estate market. So let's get right to it.

Government to continue buying Mortgage Backed Securities - The government stated earlier this week that they plan on tapering back the buying but will continue to buy Mortgage Backed Securities until March of 2010. This may not seem like much on the surface but if the government stops buying these Mortgage Backed Securities, we are most definitely in for an increase in mortgage rates. As such, the announcement they would continue to buy them and extend it out past the original October deadline had rates dropping at the end of the week. Again, another positive sign as people search for those affordable homes and secure low mortgage rates that will keep their home affordable for years to come.

Housing re-sales were down 2.7% - In news that brought everyone back to reality a bit, the number of re-sale homes sold in August was down 2.7% though the projected number was for the re-sales to be up 2.1%. The reasoning behind the decrease in sales is partly due to the amount of foreclosures coming back on the market. If you will recall, I mentioned that this may happen back in May or June when discussing the market. Mostly this decline is due to increase in foreclosures back on the market and the slow-down as families move back to their normal routine of school, etc.

Of Note: the numbers may go back up as the end of the tax credit for FTHB's looms large.

For Real or Just Pretending - That's right are the Cardinals for real or are they just pretending to be a good team. I guess in hindsight we can feel a bit better about the loss to the 49ers based on their performance against the Seahawks last week, but still, we should have at least won the game. I think this week against Peyton Manning and the Colts, though the season is only 3 weeks old, will be a nice test. We are definitely the beneficiary (or at least could be) of a tired Colts defense that played for 45 minutes on Monday night and had 80+ plays against them. Hopefully we can let it fly and end up with a nice win.

Lastly, as part of my work in the Ice Hockey community, I am the co-Chairman for our upcoming Golf Tournament to raise money for players within our organization who need scholarships. It is a great event and I have attached the flier for you to see. I would love to have some of you join me as we raise money for these kids and help them reach their dreams of playing competitive youth hockey and one day, for some, college hockey.

Week in Review: 8/24 -8/28/2009

Eric Murrietta (1st Advantage Mortgage, LLC) — Fri, 28 Aug 2009 20:04:47 -0500

Rates improved slightly this week as we have seen swings of about .125% in either direction of the 5.5% mark over the last couple of weeks. These rates do help keep home owner affordability up, which in general is a good thing. As far as market news, check this out:

1. Housing Market set to enter new stage??? - I am not a person that entertains bad news easily. However, I do like to read different perspectives on the market so that I can be well versed in potential trends. For example, in this article, "Housing Crises set to enter new stage.", the author explores some very interesting statistics that might make some hold still before jumping into the market. The analysis was on how buying trends are not following a normal pattern, foreclosures are beginning to affect even prime borrowers, and the multitude of ARM loans set to readjust. Those three points could definitely have a drag affect on the market, and by drag I mean drag down affect. Nothing is certain but we have to definitely keep our eyes on the overall picture and not just a short snapshot of the last couple of months. It is the prudent thing to do.

2. Extend and EXPAND the tax credit? Are they crazy or smart? - That is right, apparently major lobbying is taking place to extend the tax credit and to even EXPAND it by way of the amount of tax credit and to more buyers (i.e. not just FTHB). Over the last week I have begun to see more and more of these articles/blogs discussing the possibility of extending the tax credit. I don't know if it is a right or wrong question as to whether or not we should take action to extend the credit, there is simply too much gray? We do know that it has helped many FTHB in getting a break for buying the home, but it hasn't had as much of an impact as say, Cash for Clunkers program. Namely because obtaining a mortgage is a bit more stringent than obtaining a car loan. Regardless, I believe an extension could help, but I believe expanding it will not help the market. Further, if the expansion of the credit is tied to the extension of the credit, it might be rejected all together. Just food for thought.

3. Ways to Beat the Slow Down - That's right, as football season begins and the holiday months roll in, typically the housing market slows down. So, in order to keep from letting the slow down affect you, here are some tips:

a. Revisit old contacts - There are a ton of people in our lives that may be able to help our business succeed and in turn you may be able to help their business succeed. Reach out to old contacts, past clients, etc. and get them excited about homeownership opportunities.

b. Amp up Marketing - That's right before you are slow, see it in front of you and be determined to keep it from happening. Come up with a seasonal slogan or something exciting that you can talk with people about so that instead of missing the boat, you find yourself on a cruise ship of opportunity.

c. Grind it out - There is something to be said for plain old grit. Understand that with the holidays and family pulling people in different directions it may be difficult but it isn't impossible. Be determined to keep business going strong and make it fun through competition or other means. Remember, sometimes a bit of elbow grease will get the job done. Nothing takes the place of old fashioned hard work.

As always, my number is 602-670-3272. Your referrals and business always makes me smile.

Only 104 DAYS LEFT - FTHB and $8,000 Tax Credit

Eric Murrietta (1st Advantage Mortgage, LLC) — Wed, 19 Aug 2009 17:55:02 -0500

Just an FYI - there are only 104 Days left before the $8,000 First Time Home Buyer tax credit expires. We don't know for sure if it will be extended but as of now no news has come out stating that it will.

All purchases must be closed by November 30^th in order for First Time Home Buyers to take advantage of the credit. If you have any clients on the fence, now would be the time to get them off the fence and into their first home.

They can enjoy the benefits of:

Historically low interest rates that helps the homes AFFORDABILITY.
Real estate market with prices so low they are on SALE.
Loan programs that allow for minimal DOWN PAYMENT. (FHA, USDA, VA, etc.)

That is just the tip of the iceberg. If the homeowner stays in the home for 10 years, their minimum investment can turn into a return of over 300%+. Now that's a great deal!

If there is anything that I can do for you and your clients, just give me a call at 602-670-3272.

Credit Changes - - AGAIN!

Eric Murrietta (1st Advantage Mortgage, LLC) — Mon, 10 Aug 2009 19:20:37 -0500

Effective today the following changes have occurred, though the FANNIE MAE announcement came on June 8th they weren't effective until today.

The changes are:

Credit Reports are no longer valid after 90 days. -- This means that if a report is pulled on the 10th of August, you have 90 days for the loan to fund and close. If that doesn't occur a new report will need to be issued. The new report may affect the loan status report.

EFFECT FOR REALTORS: Make sure the client that you are working with is continuing to manage their credit properly by staying in touch with the loan officer. If they are toeing the line with their credit, any small hiccup along the way can go from approval to denied.

Credit Card financing of up to 2% of customary fees paid outside closing. -These fees include home inspection fees, termite inspection fees, etc. However, we as the lender must confirm they have enough liquid cash to cover the fees or recalculate the credit card payment to include the amount they have financed.

***Remember no part of the down payment can ever by financed using a credit card.

EFFECT FOR REALTORS: Make sure the client has sufficient funds to cover not just the total closing costs but any outside closing customary fees. It can mean they need more cash to close, they can't just "charge them" without it affecting the loan process.

Tip Income: All tip income can only be used if it has occurred over the last two years and the borrower has documentation via tax returns from the previous two years to support the income. They must also have acknowledgement from their employer that it is likely to continue.

EFFECT FOR REALTORS: Think along the lines of self-employed borrower when it comes to tip income.

Proof of Liquidation for Stocks, Bonds or Mutual Funds: In the past it wasn't necessary to prove these funds were liquidated. They just needed to be available. However, if the borrower is using these funds to qualify for down payment, etc. then we will need to prove the funds have been liquidated for the down payment. This percentage has also been lowered to only 70% of the total amount as allowable for down payment and closing costs.

EFFECT FOR REALTORS: Borrowers have to be willing to liquidate their stocks, bonds, and mutual funds. If they are not, then those funds can't be used as down payment. Further, if they say they have $10,000 we can only use $7,000 as allowable. Again they must prove they liquidated those funds. Make sure the client is liquid enough to purchase the home.

It doesn't get easier, but knowing what we are up against helps us properly communicate to the clients the necessary expectations, requirements and needs for the loan transaction. As long as we stay out in front and don't lag behind we will make the client happy and they will continue to refer that precious business.

Have a great Monday.

Selling tips for those Fence Sitters!

Eric Murrietta (1st Advantage Mortgage, LLC) — Wed, 05 Aug 2009 16:33:45 -0500

It's mid-week and you are wondering, "How can I get a couple of these buyers off the fence???"

They keep asking:

What if prices drop further?
Have we reached the bottom of the market?
Should I look for a short sale or a foreclosure?
Isn't it still a buyers market? Can't I put a low bid on the property, I don't want to offer full price?

All that said; here are some little tidbits of information to counter-act those common questions.

Prices have dropped 53% since the peak median price in June of 2006. However, the current market shows that for the past three months the median price has gone up from $116K in April of 2009. Let's say there is a slight possibility that the home prices drop 5% in the next year. Consider though that most people (outside of VA and USDA Rural Housing program) are committing at least 3.5% towards the down payment. Worse case scenario they lose 1.5%. Further, consider that if after we lose the last 5% we begin seeing normal/historical levels of 3% appreciation, then after 14 years of living in the home (this is the Census Bureau's estimate of how long someone owns a home after purchasing it) the homeowners have gained 37% in appreciation. On the down payment of $4,375 (initial investment) and the future potential sale of $171,250 in 14 years the borrower stands to have a return on investment of 1000%. Clearly a scenario in which the borrower wins, even if prices drop further.

Like anything in life, everybody looks for the best deal. The question isn't when the best deal happens it is what side of the deal you want to be on. For example, would your rather buy right before the bottom of the market or right after the bottom of the market? I vote for right before the bottom (even if you lose 5% - see scenario above). The reason right before the bottom is the best is because you, as the buyer, still have the advantage. If you ask for the fans to come with the house in a market where the sellers are eager to sell, you will have an easier time getting them. If you ask when the sellers are having an easier time selling their item, they might want you to pay for the fans. It's just a classic example of why buying right before the bottom, when people are fearful is better than buying when people begin to get greedy. Don't give the seller that opportunity.

Short sales are on the rise. In June, there were 9,350 total sales per ARMLS. Of those 9,350, 13.4% were short sale and 57.2% were foreclosure. That is highest number of closed short sales and lowest number for foreclosure percentage since the beginning of the year. However, the moratorium on foreclosures was recently lifted and so we may see an increase in that percentage in the next few months. Why would you steer the client away from short sale? Time, Effort, and most important cost. Short sales on average cost $82.88 per square foot while Lender Owned homes cost $63.36 per square foot. Basically there is more foreclosure inventory and a better price to be had for that foreclosure inventory.

Depends on your Market!!! Homes from $349,999 and down have a maximum of 4.6 months of supply, while homes under $99,999 have only 1.9 months of supply. Those markets are quickly becoming a sellers market, where closing cost contributions and any help from the seller will be limited. However, if you have a savvy borrower that can get into the $350+ range, they may still make out like a bandit in this market. According to ARMLS, the inventory jumps up to 7.4 months of supply from $350K and on range. You might still be able to get a lower offer into a $400K property and make it fly, perhaps even to the point where they could use the max financing for FHA of $346,250.

See it really depends on easing the minds of your client. It is never easy, but with statistics and examples, it is easier to persuade someone that they are making the right move, best offer, and are generally moving towards their home purchase in a manner that sets up for success and limits failure.

Best of luck and Keep on Selling!

All statistical data taken from ARMLS for Greater Phoenix.

Week In Review - July 31, 2009

Eric Murrietta (1st Advantage Mortgage, LLC) — Fri, 31 Jul 2009 17:30:45 -0500

Rates were up, then down and have now closed the week where we left off last week. Overall though, they are faring better towards the end of this month, then they did at the end of June.

REMINDER: MDIA (Mortgage Disclosure Information Act) went into effect yesterday so be on the lookout for lenders that aren't on top of the deals because too many changes can cause delays to closings.

Week In Review:

Economic News:
- Value of homes increased for the first time in 3 Years...that's right the article discusses how the value of homes has increased, however slight the impact was there is still cause for concern as pointed out in the article, "Is the Housing Market Recovering?" by Anthony Mirhaydari. My opinion, the lower end properties have reached their low point with a few oddities and deals here and there, the higher end homes though may still see some dropping in prices as the loss of jobs and economy impacts the wealthier individuals.
- Gross Domestic Product dip was smaller than expected - We aren't out of the "recession" as the economy is still shrinking, but we are making progress. Some top economists believe the businesses have made the "necessary adjustments" and will begin to grow through the summer. The only concern is that the Unemployment Rate is still climbing and expected to hit 9.7% when the July numbers are made available. That would mean 1 in 10 people don't have jobs. That isn't so good.

"Cash for Clunkers" - A slight success: Call it what you want, but this little gem of a program still proves that we will do whatever we can to get stuff for cheaper. The $3500-$4500 incentive to trade your old "clunker" in for a newer, more fuel efficient car had an impact on car sales and on the availability of the government funds. The government, because we all had such beat up cars (wink, wink), had to allocate more money to the program because people were being turned away. I get the idea of the program but am still amazed at our willingness to take on more debt in an effort to get a newer car.

For example: Say you own your 99 "clunker" free and clear, it runs well and you can put another 60K miles on it and you average about 15K a year...so you have four more years with the car, if you maintain it. Now with the incentive you go look at a Toyota Camry Hybrid and its MSRP is $26,150.

The dealer probably won't come down much because of the program, so let's take off $4500 and your new base price is $21,650. Now they aren't offering additional incentives but they do give you a rate of 4.5% on a 72 month term. You bring in an extra $3500 of your own money to put towards the car. So you are looking at $18,150 plus taxes (we will leave out the fees) which brings the total to $19,656.45. Your monthly payment is now $322.56. So for the next six years you will be paying the $322.56 a month.

Let's go back to the top. You keep your $3500 in the bank and begin adding the $322.56 a month to it for the next four years and at that time you will have $18,982.88 in the bank by keeping your old car. Just shy of the total price but two years short of what you still owe if you had purchased the car. What does it all mean? Pretty simple you save yourself $7,734.24 over the two years that you don't have the loan. Factor out the incentive and you still lost $3,234.24 by using the "cash for clunkers" program. Not only that but you are saddled with HAVING to pay the $322.56 a month vs. the flexibility if you were to need to allocate it somewhere else.

Nothing's perfect and you would have to assume the maintenance costs on the new car would be similar to that of the old car during the same 4 month stretch, but in reality it might be a better way to go. Maybe the incentive isn't so great after all - but it doesn't keep us from buying new stuff when we have a little incentive.

Couple Questions to you As Realtors??? - You can respond by commenting in the post.

- Would you prefer more transparency in the lending side of the equation? (i.e. automatic email updates during the loan process on appraisals, docs drawn, etc.)
- How much knowledge do you prefer on the loan side (i.e. guideline changes, updates, basic loan information, etc.)? A Ton, Some, Not Very Much, Very Little, None
- What is the best way that a Lender can help you as the Realtor? (Listing Fliers, Phone Calls, Open Houses, etc.
- What are some creative ways that a Lender has helped you or could help you?
- What is the number 1 most important attribute in a Lender that is working for your client and ultimately, you?

Just some questions I have wanted answers to for a long time.

Thank you and have a great weekend.

Week In Review - July 20 - July 24

Eric Murrietta (1st Advantage Mortgage, LLC) — Fri, 24 Jul 2009 17:48:54 -0500

Rates improved slightly in some areas this week. 30 YR Fixed rates on conventional loans are at 5.5% with 0 Points and 0 Origination Fee. On a 15 Year FHA Fixed deal the interest rate is 4.5% with 0 Points and 0 Origination Fee. Not too bad if you have somebody that wants or needs to refinance or can afford a shorter loan with a lower interest rate. There still may be one more drop in interest rates to the very low 5's on 30 year fixed rates, but it might be too much of a gamble to see that one play out.

Housing Numbers slightly better than expected: So I read an article this week about the housing numbers improving a bit. They discussed the inventory decline and the prices stabilizing in many markets. However, I couldn't find the link today to send it. Instead I thought I would turn the question to you, the realtor. What are the numbers? Do you look at the statistics from last year vs. two years ago and even further back? Are there trend patterns to follow as a buyer? Are the buyers educated as to what will happen in the next few years based on the housing numbers? Do you have information on your specific market, the general Phoenix market, and/or National trends? Would these numbers help a buyer off the fence?

REALTOR TIP: (see below and in conjunction with the above)

**Altos Research is a company that has all sorts of statistics and numbers regarding the housing market. Altos Research has an interesting concept where they take the statistics of the market and make them available for use by Realtors to help them sell more homes. I heard a small seminar by the President of the company and I thought he had some very good insight into the local and national markets. Check it out.

Mortgage Applications up Last Week: The numbers do fluctuate from week to week but the increase in the number of Mortgage Applications taken last week is always a positive sign. It means that there are more buyers seriously looking for homes and potentially more people looking to refinance. All in all, whenever the number of application increases, it usually turns in to a greater amount of closings in the near future.

Teaching Point for the upcoming HERA changes in effect July 30, 2009 - A list of the items that affect APR: (because remember a change in APR for the worse of greater than 1/8 (.125%) will cause as few as three day delay in closing.)
- Amortization Schedule, Application Fee, Assignment Fee, Assumption Fee, Commitment Fee, Courier Fees, Escrow Waiver Fee, Flood Certification w/life of loan, Funding Fee, Construction Inspections, Interest, Loan Discount Fee, Loan Origination Fee, Mortgage Broker Fees, Mortgage Insurance Premiums, Per Diem Interest, Processing/Administration/Underwriting Fees, Recording Fees, Settlement/Closing Fees/Escrow, Tax Life of Loan Certification, Tax Service Fees, Verification Fee, Wire Fees.

- With all of those items listed above...what's the point? The point is that lender's better be cognizant of how APR works and what affects it because if they don't and make a mistake, it could cost valuable time in the closing efforts on your client's purchases.

Week in Review - When it's hot in AZ...Find something "Cool" to do!

Eric Murrietta (1st Advantage Mortgage, LLC) — Fri, 10 Jul 2009 17:36:04 -0500

Another week has come and gone but the heat still remains. We all live in Arizona for a myriad of reasons but usually the heat isn't the first one that comes to mind. What I can say is that when it cools off and we aren't dealing with snow or anything of the sort we will say, "This is why we live in Arizona."

With that in mind, I thought I would give you some information on some "Cool" Deals that you could take advantage of over the next couple of months.

1. Desert Ridge Marriot -At the Desert Ridge Marriot they have a couple of great deals that you could take advantage of. One of them is a "Golf for Two" package and the other is a "Spa Package for Two" - the spa package can be with a friend or a loved one. These packages range from $249-$259. That really is a great deal for a night at a resort, a spa treatment or golf and even breakfast for two people. Not too mention they have a great "lazy river" where you can relax during the heat of the day. A great way to COOL off in the summer.

2. MOJO, A cool treat in the summer heat - Basically my wife kept telling me about this place called Mojo's. She would say, "They have the best yogurt and it's fun because you get to choose your own toppings." My response was always a bit less than enthusiastic. Don't get me wrong I listened but I thought, "Eh, it's just yogurt." Then last Sunday before our foray to see "Transformers: Revenge of the Fallen." (Side note: Great if you like to see things blow up but I started to fall asleep at what were maybe the most important parts of the movie. Guess that tells you how important they really were...not very.) I had promised that we could get Mojo's. Best idea I ever had. It was fantastic and though it melted quick because of the intense heat, it was definitely a great treat for the summer time heat. They have them at the Biltmore, Tempe Marketplace, and at City North, so you can find the location that is best for you and go.

3. Ice Skating - Okay, so it is a bit lame and a tad cliché but in all honesty where can you go in AZ where you have to where pants and a long sleeve shirt because it is cold. Not too many places, unless you are like my wife. She has to carry a jacket because she gets cold inside restaurants during the summer. Me, nope! It takes me all through dinner just to cool off and then BAM, right back into the heat. But in all seriousness, it is a cool activity, both figuratively and literally, that you can do in the heat of the summer. Check out the local rinks...you can google: Polar Ice AZ, Arcadia Ice Rink AZ, Ice Den AZ and they will all pop up.

All right...hopefully it gives you some ideas for the weekend or for later this summer. Either way, it is sure to be warm for a while so you have time to figure out what you might want to do.

Rates are slightly improved this week from last week (see the attachment). Especially check out the rates on the 15 YR Loans, they are really pushing those right now so if a borrower could swing it, that might be the way to go.

Week In Review - What the loss of Michael Jackson and Billy Mays can teach us...

Eric Murrietta (1st Advantage Mortgage, LLC) — Fri, 03 Jul 2009 10:21:50 -0500

There was easing in rates from a couple of weeks ago, as in about .25% better. This has helped us drop down to the mid 5% range again for qualified borrowers. The discussion is that this trend may continue and we may see them come down a bit more over the next couple of weeks. However, nothing in life is ever guaranteed but if you look back to my rate sheet update from early June, I mentioned they might ease in July, August and September. See sometimes even I get lucky!

In other News:

• November 30, 2009 is the Deadline for the 1^st Time Homebuyer Tax Credit - Why mention this in early July??? Because we all know how long short sales can take, especially if you are working with a buyer who is making offers on short sales. Soon, if they want to take advantage of the tax credit, they may need to begin looking at other types of purchases that might move quicker. The worst thing would be for a buyer to get a home the 1^st week in December and miss out on the tax credit. Food for thought.

• Monetizing the $8,000 Tax Credit - In addition to the above deadline, there has been some circulation as to the ability to monetize the $8k tax credit. Monetize = using the money as an additional down payment or to help offset the costs associated with closing the loan. The $8K cannot be used as part of the down payment and as of now I haven't come across any companies that are working with borrowers to help them monetize the tax credit. I may have given this information already but it's a good refresher. See below:

WASHINGTON - Speaking to the National Association of Home Builders Spring Board of Directors Meeting, U.S. Housing and Urban Development Secretary Shaun Donovan today announced that the Federal Housing Administration (FHA) will allow homebuyers to apply the Obama Administration's new $8,000 first-time homebuyer tax credit toward the purchase costs of a FHA-insured home. Donovan said that today's action will help stabilize the nation's housing market by stimulating home sales across the country.

• Tribute to Michael Jackson- Last week, while heading to Whistler, BC (an hour north of Vancouver and a very gorgeous place to visit indeed); the news came out that the "King of Pop" died. Sometimes we think these things are insignificant, but the man truly crossed all boundaries. The coverage in Canada was as prominent as that in the US as it was the only thing on the radio and news. The interesting part is truly what his genius built. You don't have to be a fan of Michael Jackson as a person to see what his body of work means. There is no doubt that someday, should I have a little boy, he might try the moonwalk and to emulate the dance steps in "Billie Jean". Michael Jackson was an interesting character but he gave lasting memories to many people all over the world and that is a feat all on its own.

Often we miss greatness only when it's gone and we fail to realize the lengths at which one must strive to become great. People who some may consider great, pour their lives into becoming great at their passion. Think Abraham Lincoln, Wayne Gretzky, Michael Jordan, Michelangelo, George Washington, Bill Gates, and the list goes on and on. Greatness is achieved and earned, not given.

The last example of this was when watching "Pitchmen" a show on the Discovery Channel about Billy Mays and his partner Anthony Sullivan (in a nutshell they help inventors sell their products). In the show, they played an old clip from 1983 of Billy Mays, the renowned Oxi-Clean guy, selling a car shami on TV. They all had a good laugh about it. Why...because it was really bad. It didn't even seem like the same Billy Mays. But he worked hard, honed is craft and in the end became the most successful TV Pitchman of all time. His greatness isn't defined by his early beginning but that he was determined to become great at what he did.

We might all do better by learning from this example. The biggest decision lies in where we decide to be great.

HAPPY 4^th of JULY.

July 23rd - "Obtain More Buyer's" Seminar - Glendale, AZ

Eric Murrietta (1st Advantage Mortgage, LLC) — Tue, 16 Jun 2009 19:07:27 -0500

Do You Wonder...

* What is Causing Delays in Loan Fundings?

* Why are Appraisals so Difficult to Get?

* Are there any new Mortgage Products available?

* Why can't my client get Mortgage Insurance?

Stop Wondering and find out at the "Obtain More Buyer's" Seminar. You will learn about snags in undewriting, pre-approval vs. pre-qualification, credit concerns, and much more.

It will help turn those serious leads into buyers!

WHEN: THURSDAY, JULY 23RD, 2009

WHERE: DHI TITLE - ARROWHEAD

7025 W. BELL ROAD, STE. #2

GLENDALE, AZ 85308

COST: FREE!

In a market where the buyers are beginning to make themselves noticed, take the guesswork out of the loan process and find out how to be successful in screening your potential customers.

Call for more information: 602-670-3272

Mortgage Rates follow trends - Imagine that!

Eric Murrietta (1st Advantage Mortgage, LLC) — Mon, 08 Jun 2009 13:05:07 -0500

We forget that life is cyclical, history often repeats itself, and nothing is really new under the sun.

Such is the way with rates - though recently it has been more difficult to really "predict" (if that word can even be used) what may happen with rates.

We are clearly in a different rate environment than we have been since December of last year, but remember that things could be much different - see interest rates in mid 1980's.

The President of 1st Advantage Mortgage posted this explanantion for the trend patterns with rates and if it does prove to be true we will start seeing some downward shifting of rates in the next 4-6 weeks.

Hope you enjoy the video.

http://www.1amtv.com/lueken/00360-01.html

It's all in the Spin!

Eric Murrietta (1st Advantage Mortgage, LLC) — Fri, 05 Jun 2009 17:41:02 -0500

Life and our outlook on it, is sometimes dependent on how we Spin the situation.

It's the "Half glass full vs. Half glass empty" theory. But it is true, we can apply it to any situation.

For example, with mortgage rates increasing over the last couple of weeks there are two recurring thoughts:

"I can't believe rates have increased to the mid 5% range. That is outrageous.'
"Rates have increased but at least we aren't paying 6.5%-7.5% like the historical averages. A thirty year fixed rate in the 5% range, is still a great deal."

Two statements - Two completely different outlooks.

It's the same with gas prices. They have gone higher but they aren't at the highest levels we have seen them (think March/April of 2008)

The question remains: Does it make it any easier?

NO - Is of course the resounding answer.

We all want the best rate, the cheapest gas, the easiest road. But it usually doesn't happen. I locked my fair share of loans in the 4% range, but those people didn't hold out for lower rates, they seized the opportunity. Sometimes timing isn't perfect and we wait too long until what was great passes us by.

I think the goal is to do what you believe is best at the time: based on past experiences and using good decision making skills. They say that "hindsight is 20/20" but perhaps those that say that dwell too much on the past. Think of why you make the decisions at the times that you made them and you will find that you probably made the decision with the best possible information you had available and were okay with it.

Life changes: sometimes for the good and sometimes for the bad. But one thing remains, another decision is always around the corner. How are you going to Spin it so that you make the best decision at that time. Don't let negativity keep you from moving forward...that might lead to regrets you never want to experience.

"Monetizing" the Tax Credit for use as Down Payment Assistance

Eric Murrietta (1st Advantage Mortgage, LLC) — Mon, 01 Jun 2009 18:15:56 -0500

On May 29, 2009, HUD released Mortgagee Letter 2009-15.

Initially this letter appears to help First Time Homebuyer's to use their $8000 Tax Credit as a part of their down payment before they actually receive the credit back from the government.

Based on my research this is not the case!

Currently their are 10 States that are participating in "First Time Homebuyer Tax Credit Loan Programs" - for purposes of this blog and since I work in AZ, please note that Arizona is not on the list.

In addition, if you read the entire Mortgagee Letter there is a very important Condition listed:

"Pursuant to 12 U.S.C. 1709(b)(9), the homebuyer's downpayment required for eligibility for FHA insurance may not consist of any funds (including funds derived from a sale of the homebuyer tax credit) provided by the mortgagee, the seller, or any other person or entity that financially benefits from the transaction(or by any third party or entity that is reimbured, directly or indirectly, by the financially benefiting persons or entity). Accordingly, the proeeds of the sale of the tax credit to FHA approved mortgagees, the seller , or any other person or entity that financially benefits from the transaction (or any third party or entity that is reimbursed, directly or indirectly, by the financing benefitting person or entity), may not be used to meet the 3.5% minimum downpayment, but may be used as additional downpayment, buying down of interest rate, or other closing costs." - See Mortgage Letter 2009-15, Page 2

Notice the first part that says, "including funds derived from a sale of the homebuyer tax credit". You cannot use the money in place of the 3.5% down payment, based on the comment above.

The secondary financing essentially works like this: A company could "purchase" your $8k tax credit, charge you $200 for lending you the $8K and put requirements on how you pay them back.

Important points on how they can be repaid:

No Cash Back to the Borrower
Second lien cant exceed the total amount needed for down payment, closing costs and prepaid expenses.
Secondary financing can be "soft" - Meaning no repayment required until the sale or refinance of the property.
Must include payments in qualifying ratios if they are required.

Basically the mortgagee letter is intended to let buyers use the $8K tax credit to help pay for closing costs and any extra down payment above the 3.5% required by FHA.

There is no way, up to this point and based on my research, to not be required to put 3.5% down into the new home, unless the money is gifted from a relative.

Hopefully that clarifies the new mortgagee letter. I don't know whether it is good or bad...I just know that it might not be what people were hoping for. Sure it would help get more 1st time homebuyers into homes, but the DPA programs were opposed by HUD for a while, why would they enact a new guideline to help bring DPA programs back???

Kind of makes you stop and think that the perception this might be available in the future is just that - perception and not reality.

There is good news though - 1st time homebuyers or people who haven't owned a home for the past three years, can still receive an $8000 tax credit on the purchase of their new home between now and December 1, 2009 (unless the bill is extended by President Obama).

Happy 1st week in June.

All Quotes taken from Mortgagee Letter 2009-15 from HUD Website: http://www.hud.gov/news/index.cfm

Volatility - Can I have the definition Please?

Eric Murrietta (1st Advantage Mortgage, LLC) — Fri, 29 May 2009 18:57:44 -0500

This week was the Scripps National Spelling Bee. I didn't watch all of it but on Monday, I happened to catch about 10 minutes of it on ESPN. What I found most interesting was the way the kids showed their pleasure or discomfort with the words immediately. One contestant looked as if she was about to begin dancing when the moderator (or whatever they call him) asked her to spell ____________. (Heck I don't remember the word, it's not like any of them are used in daily conversation anyway!!!)

However, it does bring me to the word of the week - Volatility.

Can I please get the definition? a. Tending to vary often or widely,

b. Tending to violence; explosive

Can I have it in a sentence? a. Mortgage interest rate volatility was very high this week

Can I have the language of origin? a. Yeah - It's frustration (doubt that's a language).

Can I have it in another sentence? a. Many mortgage consultants were volatile this week because interest rates were volatile.

Volatile - V - O - L - A - T - = "Oh, who cares, just tell me what is going to happen next week with interest rates."

I hope you get the idea. At one point, yields swung by a percent and rates jumped almost .75%. But then now, on Friday, only about .125% higher than where we ended last week! It's enough to make a person well...volatile.

Outside of that, nothing fantastic happened. D-backs are winning a bit more, Detroit and Pittsburgh are in a rematch for the Stanley Cup Finals (check out games 1 and 2 on NBC this weekend), and HVCC still stinks.

My last tidbit of knowledge...Hold the ones you love close and dear to your heart because life is fragile and we are only guaranteed today.

(My thoughts and prayers go out to the Swartz family as they lost their mom to a stroke at the age of 45 this past Sunday. She touched many lives. May we all hope to do the same!)

Fed to potentially buy more Treasuries - Keep interest rates low

Eric Murrietta (1st Advantage Mortgage, LLC) — Mon, 11 May 2009 10:02:05 -0500

Rates have been trending upward over the last several weeks. Though they haven't jumped dramatically, it has been a steady uptick that is seeing rates over the 5% mark. As this begins to happen, it could lessen the urge for many consumers to refinance and/or buy a new home. If we don't keep the real estate market on the correction that has been occurring over the last couple of months, it may keep us in this financial funk the country has endured over the last year and a half.

Critics are saying that the Fed will potentially buy more treasuries, in order to keep rate low. Apparently back on April 29th, they made the statement that they were staying with their initial purchase amount of bonds and that has had a negative impact on rates to the tune of seeing the yield pushed up to 3.16%.

Basically, the Fed needs to continue to keep rates low so that good credit risk customers are purchasing properties and refiancing to free up capital. This will, in theory, continue to help the real estate market along.

Week in Review May 4 - May 8, 2009

Eric Murrietta (1st Advantage Mortgage, LLC) — Fri, 08 May 2009 20:34:27 -0500

Happy 100 degree weather! Man it got hot pretty fast. It went from gorgeous to unbearable in about two minutes. I guess that is AZ for you. Not much as far as rate changes. The market was pretty volatile this week and things fluctuate as is the norm, but we ended very close to where we started.

Week in Review

Stocks end up for 8 of past 9 weeks - That's right, missed an opportunity about 10 weeks ago when everything looked bleak. Hopefully somebody out there jumped in at the right time. If you did and made a bunch of money, you could always take me to lunch. Nah, I just have to remember that age old adage, "You have to spend money to make money."

Stanley Cup Playoffs are Great (Coyotes leaving AZ???) - That's right I like hockey. So sue me. Most people don't, which I may never understand. Mostly they don't like it until they learn the game. Think about it though, where else can you watch superior athletes skate at blazing speeds and fling dense rubber at somebody wearing a mask. It's a great game with speed, agility, quickness all wrapped in one. Not only that but they play really hard especially in the playoffs. With that said, I am a little bummed about the news regarding the Phoenix Coyotes. I can't say that they ever excited me, it has felt like they were a JV team playing a bunch of Varsity teams for the last six years. They aren't relevant. And since when has anything not relevant made money. But they could be relevant, if they realized it takes more in markets unaccustomed to the sport then pitting a JV team vs. VARSITY. Nevertheless, let's hope they stay, if only for the dream that one day they can be relevant.

HVCC is a new four letter word - Don't believe me. Ask my client that just spent the money on an appraisal that came in 15% lower than we thought. Alas, I couldn't talk to a trusted appraiser for a rough estimate, I had to play Russian roulette and it came up bad for the client. Trust me. I am bummed about the loan, but more bummed that the client had to spend the money on the appraisal. Who knows, I may save the deal. But it won't change the fact that I will now refer to HVCC as H**C.

Week-in Review April 27 - May 1

Eric Murrietta (1st Advantage Mortgage, LLC) — Fri, 01 May 2009 16:19:30 -0500

Rates were higher today than they were for the majority of the week. The market is looking up though. There are bidding wars in the price range of homes under $100K due to the 2.2 months of inventory supply. There still remains over a 13 month supply on homes in the Scottsdale area and this is mostly attributed to the difficulty in affordability of those homes. Remember that Jumbo loans or loan amounts over $417K require anywhere from 20-30% down to secure financing. That is a far cry from the 3.5% required for FHA financing up to $346,250.

Week in Review:

Value Checks on Properties are No More! - If you weren't aware, many of the larger banks have already adopted the policy of placing the appraisal order through a non-affiliated third party. As of May 1, 2009 all mortgage companies are required to be a part of the HVCC (Home Valuation Code of Conduct). This new code will affect single-family mortgages that are originated after May 1.
- Nuts and Bolts
  - No communication allowed between loan originator and appraiser.
  - Appraisal is ordered by a third party from a licensed appraiser on the approved list.
  - Appraiser cannot be picked for a specific property, the approved appraiser list will have a non-affiliated "loan production" staff member choose based on a rotating schedule.
  - For Refinances cannot indicate value or LTV estimate for the property.

Mortgage Applications on the Decline - Applications for mortgages declined this past week from the higher volume of last week. The trend over the past four weeks has been increased volume followed by a lower volume, followed by a higher volume. Which must mean that we are taking a week off after the high volume from the previous week??? Call that lack of consistency. Actually it probably has more to do with the Realtors?!?!?! NAH! It really is all about the numbers. I believe that you will see that mortgage rates are higher statistically next week and volume for applications will hold steady. Unfortunately as the summer approaches, we must work harder to make sure business doesn't go elsewhere because typically things slow down in June and July.

Homebuyer's Seminar - Coming Soon! - A former colleague and myself are teaming up this month to put together a Homebuyer's Seminar for all of your potential leads. That's right!!! This is for you and your clients. You know them. They are the leads that insist a mortgage company won't contact them, or they can't decide if they want to buy because they aren't sure about the market. Well this is the seminar for them. What they will get is an education on the mortgage process, market statistics on homes for sale and historical rate averages, instant access to mortgage consultants willing to check credit and send them back to the YOU with LSR in hand. It is an opportunity to find more buyers ready to purchase with financing in place. Think of it like a one-stop shop. LOOK FOR MORE INFORMATION IN THE COMING WEEKS!

Week In Review, March 30th - April 3rd, 2009

Eric Murrietta (1st Advantage Mortgage, LLC) — Fri, 03 Apr 2009 17:36:27 -0500

Rates took a bit of a beating the last couple of days. In mid-week, there were still deals around the mid 4's on a 30 YR Fixed conventional loan. Not too shabby. But now everyone is waiting on the low 4's - Ah, but if we could all wish upon a shooting star.

Some updates for this week:

Homeowner Affordable Program - More information out...not much that we can do as Mortgage Consultants unless the current owners do not have PMI on the property. Basically any loan with Private Mortgage Insurance that is owned by Fannie Mae or Freddie Mac must be directed to the current mortgage servicer for the refinance or loan modification. The only way that mortgage brokers/bankers could help a borrower with a refinance would be if they do not currently have PMI and are still upside down in the value of their home. Go to www.financialstability.gov for more information.

Financing Fliers in Open Houses - I read an article this week and it discussed one piece of what potential home buyers think as they walk into an open house. How much is this going to cost? It is a basic principle and law that we deal with every day. What is the dinner going to cost, what will the car payment be, how much will the hotel on vacation cost, what are my MONTHLY MORTGAGE PAYMENTS going to be if I buy this house. As listing agents a great way to help those wandering buyers that step through the threshold of the door and into the open house living room, is by giving them something that explains the potential costs per month and down payment for the house you are listing. Long story, short, if you need a financing flier for your open house, I would be happy to oblige.

SUNS are done - As much as it pains me to say that, it really is the truth. If they make the playoffs now, being 4 games back with 7 to go, it must have been an epic collapse by any of the remaining playoff seeds. So, with a sad face we move on towards baseball season. Go D'Backs. Hopefully, they don't leave us feeling blue in six months as well. Only time will tell.

Make it a great weekend. Please don't hesitate to contact me if there is anything that I can help you with.

Week in Review - March 23-27th, 2009

Eric Murrietta (1st Advantage Mortgage, LLC) — Fri, 27 Mar 2009 18:48:07 -0500

Rates stayed pretty consistent throughout the week with a few swings up .125% and down .125%, but for the most part it was right at where we ended last week. I can't stress enough that we don't know how long these rates will stay down in this range, so be on the lookout for those buyers and the affordability that the rates and prices of homes truly has for them.

On another note - some stories for the week:

April 4^th the new DU Program will be available - Well not the entire Home Owner Affordable Plan refinance and loan modification programs will be up and running but DU (Desktop Underwriter - the program we lenders use to qualify borrowers) will be up and ready to go. Which means we will be able to run these potential scenarios to see "how many" people we can help. Call me a bit skeptical, but all the restrictions that they are laying out means the box and opportunity for people to refinance is really not all that much larger. I know it will help some, but probably not enough. There is no magic cure! (Repeat that phrase over and over - it will make you smile.)

Borrowers need a few extra credit points - Credit score is everything in this market and in some cases it can mean the difference between 5.25% and 5.625%. Basically, I have a credit rescore option that might help some borrowers. For example, if they have a credit score of 697 and want to get above the 700 threshold, this credit tool will explain what the borrowers can do to improve the score. Once they complete the desired credit items, then we submit to the companies, wait 5-7 business days and if it goes through we can re-pull the credit report. Hopefully good news will be on the other side. Nothing is guaranteed in life, but everything is worth a shot in this market.

Buyers looking to move - If you have clients asking, "Is now the time to buy?" - Move on. They don't get it. They will have already missed the boat. Look, it is time to stop asking when and just start doing. Flip the question on them and ask, "Is it the right time for you to buy?" Buyers are sometimes are so concerned with everything around them that they don't even consider their own situation. Buyer's can't be so concerned with the economy that it makes them stand their ground like cement was poured over their feet. I know it's a tough question and we don't have all the answers, but be assured if you work with them to find out their needs and earn their trust as a Realtor, I believe that people will begin to buy. They activity is increasing greatly from week to week. So, if they are still asking that question next year and you haven't moved on to the next serious buyer -just realize they may never be ready to buy

Week in Review 3/16/2009 - 3/20/2009

Eric Murrietta (1st Advantage Mortgage, LLC) — Fri, 20 Mar 2009 19:12:14 -0500

Rates this week dropped a bit on Wednesday when the government announced their plan to buy even more mortgage backed securities, but we've steadily seen increases since then so we ended right back where we started.

$15,000 for Down Payment and Closing Costs in City of Phoenix - Our "Government Stimulus and Local Incentive Programs" continued to grow. The City of Phoenix released information about a program that loans homebuyers $15,000 for down payment, closing costs, and pre-paids when purchasing bank owned properties in Phoenix.

Fannie Mae Home Affordable Refinance - More information regarding the Fannie Mae Home Affordable Refinance program that is to be in effect next month was made available. We now know that borrowers wishing to utilize this program must have put down 20% when they purchased the home. If they did not, they will have to contact their current lender who will have to work with the MI company insuring the home. As has become customary with this big rollout programs, we don't expect it will benefit as many people as it was intended to, but I guess anything is more than zero - right?

March Madness - If you did or did not enter your bracket at least it gives us something to watch on TV. There is nothing more exciting than single elimination tournaments on one of the biggest stages. At least then you don't have to go out like the team I coached in hockey this past year. We lost our last two games; the first in a 14 person shootout and the second in overtime. We were one goal away from making it to the semifinals and playing for a chance at Nationals. It didn't happen. These boys will only have to feel heartbreak once. Lucky them.

Week In Review, March 2-6th

Eric Murrietta (1st Advantage Mortgage, LLC) — Fri, 06 Mar 2009 17:25:23 -0600

"Good news travels fast, bad news travels faster." That principle alone makes it difficult to decide what to write in my weekly review. I think it's easier to write the bad news. Seemingly it's everywhere. (8.1% unemployment rate, Dow at lowest levels in over 12 years, and the tragic story of the three young men who died in the Gulf of Mexico). But today is different...for starters, it's a Friday, the 6^th of March and I have seen some funny and interesting things this week. (See: Jon Stewart bash CNBC and/or Woman Calling 911 of Chicken McNuggets).

I can't say for certain if the good news ever outweighs the bad news, based on the quote above I would venture to say no. However, we can choose to seek the positive news. We can also decide that we won't ignore the bad news, but instead learn from it. In light of all that has happened over the past 18-24 months, the good thing is that it can bring us down to earth. Back to reality, where family and friends are important and matter more than that new car or million dollar house. When we are stripped of what we have, who can we say that we are? It is not wealth that elevates; it is the character behind the wealth.

Week in Review

On the good news topic - I googled good news and it gave me this link: http://www.goodnewsnetwork.org/. I believe the overall goal is to disseminate news that is positive. For example, there is an article about Community Banks going strong and an article about a puppy that was rescued from a pinned car. You can pay to join to get the good news. I guess even good news comes at a price.

Cards re-sign Kurt Warner - Sure we could be negative and say that he should have accepted the Cardinals first deal and kept his mouth shut. But consider that all he wanted was what he believed to be a fair market price for his services. Look at his resume this past season: 401/598 completions (67.1% completion rate), 4583 yards thrown, 30 TD and 14 INT. When you compare it to other QB's in the league; both Manning's and Roethlisberger, Kurt is as elite as they come. His lowest completion percentage was 58.5% in an injury riddled year with St. Louis. When he plays 10 games or more he completes no less than 62.8% of his passes. Now, I think about my career. If I was closing 15-20 deals a month, wouldn't I have the right to work for a company and have them compensate me with fair market value? It isn't greed in Kurt's case. I was fortunate enough to listen to his interviews on the radio between appointments this week and discover that Kurt may be the most humble professional athlete ever. He screams of maturity, understanding and wisdom. He is the epitome of a team guy and when he discusses Leinart, his backup, it is with an air of hope that one day he will experience what Warner has experienced through the NFL. This is a good news story. Good character people deserve to be rewarded for their hard work, love and passion for what they do.

Weather is nice - Enjoy Spring Training - That's right, spring training for baseball is here. What is more fun than having a little escapade from work with some friends to catch early season baseball in the beautiful AZ spring? Can't think of anything else at the moment. Hopefully you can catch a game an enjoy the action.

"Making Home Affordable" - Refinance and Modification

Eric Murrietta (1st Advantage Mortgage, LLC) — Wed, 04 Mar 2009 10:04:43 -0600

Today is March 4, 2009 and the new "Making Home Affordable" Refinance and Modification programs were unveiled today.

The Financial Stability website is a great place to locate the information regarding these two programs. It has everything from the full guidelines on the modification program to discovering which option may be the best for you, Refinance or Modification.

In summary, they ask four questions on the "Making Home Affordable Refinance Option" and four questions on the "Making Home Affordable Modification Option". If you answer yes, to all four questions, it then directs you to contact your CURRENT SERVICER OR LENDER and inquire about whichever option you need.

The "Making Home Affordable Refinance Option" doesn't have a lot of information on it regarding guidelines. Instead the main focus of this campaign is directed at the Loan Modification aspect of the Homeowner Affordability and Stability Plan. Here is a brief rundown on the

Homeowner Affordable Refinance Program - Borrowers guide and interesting information:

Solid Payment History
An existing Fannie Mae or Freddie Mac mortgage
Financial documentation in order (though the GSE lenders and servicers should have this information so limited documentation may be needed)
Appraisal may not be needed in some cases

Homeowner Affordable Modification Program - Borrowers guide and interesting information:

For loans originated on or before 1/1/2009
Primary Residence
Full Documention needed, including a 4506T (allows lender to pull tax returns) and must sign affidavit of hardship
Incentives to lenders and servicers who modify loans for those who are at risk but haven't missed a payment
Program available through 12/31/2012

Within the loan modifications the servicer/lender will do the following:

Reduce monthly payments to at least 31% DTI ratio of gross monthly income. They will accomplish this by reducting the rate to a floor of 2% (rate could be higher but never lower than 2%), extending the term of the mortgage for 40 years, and finally, if necessary, forgive a portion of the principal.

That is the quick and dirty run down for the new "Making Home Affordable" program that was unveiled today. I will give it a day or so and then share my opinion. Initially, I think it will help some, it really now depends on the servicer/lender.

**Any and all direct quotes taken from the following website: www.financialstability.gov

Homeowner Affordability and Stability Plan

Eric Murrietta (1st Advantage Mortgage, LLC) — Mon, 02 Mar 2009 17:10:12 -0600

On March 4, 2009 - both Fannie Mae and Freddie Mac, are to unveil how they will handle the plan laid out by President Obama almost two weeks ago. While the financial markets continuing to reel, (see AIG losses, the DOW falling, and GE closing at its lowest point since 1993) the housing market isn't faring much better.

It is time! Panic seemingly begets more panic in this market. Here is the "plan" in its simplest form.

The plan supposedly will "...help up to 7 to 9 million families restructure or refinance their mortgages to avoid foreclosure."

1. Affordability: Provide access to low-cost refinancing for responsible homeowners suffering from falling home prices.

This is designed to help people who own "Fannie Mae and Freddie Mac loans to refinance through these two institutions." This will hopefully help reduce monthly payments by effectively lowering interest rates for these families.

Opinion: This will most likely be some sort of streamline refinance. I believe you will have to work through the investor that owns the loan, i.e. Countrywide, Flagstar Bank, Chase, etc. and they will be able to use the "streamline" program to lower your rate and ease the pressure on you with regards to monthly payments.

2. Stability: Create a $75 Billion Homeowner Stability initiative to Reach up to 3 to 4 million at-risk homeowners.

This is designed to help people behind on their payments, who can commit to reasonable monthly payments, stay in their homes. This will most likely be in the form of loan modifications with each individual borrower that requests or is in need of this assistance. The government will share in this effort with the mortgage holder "responsible for bringing down interest rates so that the borrower's monthly mortgage payment is no more than 38 percent of his/her income", next the government would match the reduction dollar for dollar to bring the ratio down to 31 percent. This would be kept in place for five years and then gradually go up to the conforming rate at time of modifcation.

Opinion: These loan modifications will help in the short term but the long term effect will be unknown. The problem is less about payments (in some cases) and more a question of equity. For example, even if they lower the rate to 1.5% and keep it their for five years but the person is upside down by almost 150K, do they really offset. If after five years it balloons back up to 6.5%, whose to say that the equity has returned and they can sell. It just results in a delayed foreclosure.

Further notes:

Homeowner Affordability - only available up to 105% LTV. If you owe $210K, house is worth $200K then you can do it. Any more than that and you go to the stability plan.
Homeowner Stability - Don't have to be behind on mortgage payments, basically loan modifications without the fee.

Stay tuned for details on the program on March 4, 2009.

*Quotes taken from "Homeowner Affordability and Stability Plan: Executive Summary"