Lewis's Blog

What would you do???

Lewis Poretz - Mortgage Marketing Expert — Mon, 19 Oct 2009 20:40:03 -0500

Ok everyone - here is the first question in what will be a weekly series on -

what would you do? ----

You have excellent credit - 785 scores...

you have been on your job 15 years and make a solid income....

you have money in savings and a very nice 401K built up.....

you purchased your home at the very height of the market------- you owe 400K and you home is now worth 275K...

you have made assumptions and believe it will be 8 - 10 years before you break even on the value of your home......

what do you do?

1) - continue to pay the mortgage?

2) - request a short sale?

3) - tell the bank the keys are in the door and like they say in old Mexico city AMF

I am not looking for the ethical answer nor am i looking for a expose on what is right or wrong...... just a simple decision on what would be best for you and your family....

so What would you do?

Designations - Mortgage or Real Estate related - Fluff and stuff?

Lewis Poretz - Mortgage Marketing Expert — Mon, 19 Oct 2009 20:12:36 -0500

Via Jeff Belonger -- The FHA Expert.com -- FHA Loans -- FHA mortgages - USDA loans (Infinity Home Mortgage Company, Inc):

What is in a name? - Honesty? Integrity? Knowledge? Trustworthy? Creativity? Being reliable?

What is in a name designation? - In most cases, the same that would be attached with any name?

Some of you might be asking yourself, "what am I talking about." How about those names that come with such designations as :

Certified planner - Certified Technician

Mortgage Specialist - Real Estate Specialist

In the mortgage and real estate world, many realtors and loan officers have special designations attached to their names. You will usually find these designations on their business cards or on their web site.

Realtor -

CRS - Certified Residential Specialist

ABR - Accredited Buyers Representative

CNS - Certified Neighborhood Specialist

SRS - Seller Representative Specialist

Loan Officers -

CMPS - Certified Mortgage Planner Specialist

UMB - Upfront Mortgage Broker

CLA - Certified Liability Advisor

My Example : Just last week, I wrote this post about basic information on FHA loans and what you should be careful of. FHA loans 101- The basics of FHA mortgages & mortgage shopping - I truly pride myself on numbers, giving out very accurate figures, and not just my opinions based on assumptions. But to prove them with real numbers, not numbers that can be manipulated to make me look right.

This loan officer comes in and disagrees with my opinion and my figures. Hey, I have no problem with people disagreeing. I might actually learn something. Yet he told me that I wasn't correctly comparing apples to apples and that upfront mortgage insurance was still a cost to the borrower. That part is true, but he didn't read my whole post and review my comparison examples, which detailed this. And if you know how to compare FHA loans vs conventional loans, you understand the whole mortgage insurance issues. You don't a specific designation for this. This person left several comments, but ended up deleting them. Not sure if it was because others disagree with him. This was his last comment....

Now, if you look this person up and go to their web site, this is what you will read in the first paragraph on his web site. "My philosophy is simple - to help you get the lowest cost loan possible. I give you choices and let YOU choose the wholesale interest rate you want." This person is an Upfront Mortgage Broker, UMB, and they sell costs. Overall, he disagreed with me 110%, yet he says that after reading my details, that he is still learning. - ????

Conclusion :

My whole point to this post? To make the average consumer understand that not everyone is as knowledgeable or ethical as they may sound just because they have one of these designations. Yes, many of these designations mentioned require for that person to take classes and a test in order to receive that designation.

How many of you remember going to school and passing a test to a class that you didn't fully pay attention to? How many of you were good at winging things? How many have a photogenic mind, are able to remember what they read or hear, yet might not comprehend what was said?

So, who are you really? Just because you say that you a CMPS, certified mortgage planner, does it mean that you have my best interest at hand? Do you know exactly what you are doing?

In regards to the loan officer in my example? He advertises lowest cost loans. I have an old saying..."the cheapest loan on paper might cost you more in the long run." If this person doesn't know how to compare specific loans, how can this be the cheapest for you? The best? What happens if that person's choices aren't accurate? Wrong? Misleading? Many loan officers sell costs, but can't give you accurate or reliable comparisons when it comes to specific programs. Just keep this in mind when shopping for a mortgage.

PS... don't get me wrong. In many cases, designations are good. But if someone preaches it or slams it don't your throat, that might be their only selling feature to you. A desgination should not be verification for that person to be credible. Just be careful...

FOLLOW ME ON FACEBOOK

- FHA Loans - USDA Loans - VA Loans -

- Energy Efficient Mortgages -

- Conventional Loans - 203 k loans -

- Mortgages -

Experience & Knowledge at its BEST !!!

_________________________________________________________________________________________

For more information on FHA loans, please go to this link. The FHA Expert

For more information about the 2009 Tax Credit for First Time Homebuyers : 2009 Tax Credit

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags!

Copyright © 2009 by Jeff Belonger of Infinity Home Mortgage Company, Inc

We are nothing but ENABLERS...........

Lewis Poretz - Mortgage Marketing Expert — Mon, 12 Oct 2009 09:01:17 -0500

All those billions of dollars earmarked to modify American consumer mortgages have not been policed. Loan modification departments at the major lenders are jokes! I have personally been involved with attempting to help modify clients as well as my own loan. I do not do this for a fee. If you want to understand just how much the US Government is in touch with the billions they targeted for these programs, simply call your mortgage company and ask if you qualify...... Overworked, Unqualified and no authority are the qualities of the people you will talk with. Most clients get turned down over a phone interview..... How can these banks turn someone down without documentation? How can these institutions not be held liable for helping consumers..... The US Government is nothing but ENABLERS who turn their back on policing the very guidelines they create.....

BANK	TARP Funds	Percent Eligible Homeowners Assisted
Bank of America	$45 Billion	11%
Chase	$25 Billion	27%
Citibank	$45 Billion	33%
GMAC	$12.5 Billion	26%
PNC (bought National City)	$7.7 Billion	9%
Wells Fargo	$25 Billion	20%

here is a scary thought -

what if every American homeowner who is upside down STOPS paying their mortgage?

Thinks the banks would start modifying their homes now?? This could become a reality in the upcoming months if foreclosures continue to drive down property values.....

USDA Rural Development loans are NOT out of money, and other important facts…

Lewis Poretz - Mortgage Marketing Expert — Fri, 02 Oct 2009 12:00:35 -0500

Great insight from an Active rain superstar!

Via Thomas Mortgage, Florida's FHA Loan Pro:

Last Friday the USDA formally announced it was entering its annual "roll over" of funding as of its new fiscal year October 1^st. This mainly administrative action results in USDA's funding being delayed until it's made available through the General Accounting Office (GAO). This by no means indicates the USDA is out of funds! What it does do is delay funding for loans and guarantees. While there are still a number of lenders that can and do close and fund loans during this period, the vast majority of lenders do not. This doesn't mean your loan won't close, it just means you may have to wait a bit. How long? Last year the funds were made available by October 17 and this year they expect funds allocated within three weeks.

This means you may have to wait that long to close your loan, or take your loan to a lender that does fund in anticipation of the new allocation. Do note, by the time you can get an appraisal recertified, docs transferred, loan re-underwritten, etc. it's rarely worth it so you're likely best off to sit tight with your lender and wait for a late October close.

The great news is that in spite of crushing volume the USDA actually has $2 billion in funds to carryover from last year! In Florida we went from 2084 loans to over 7000 last year. The increased volume has increased the time it takes to get approvals from the USDA so depending on your area you may need to add from 3 days to two weeks to the process. This will become very critical as we near the deadline for the Tax Credit and the desperate scramble to close by November 30, so plan in advance and plan accordingly.

Lastly for those lenders interested in learning more about the program, consider signing up for the WebEx training offered nationally. This link will take you to the registration page for more information.

Realtors and lenders, if you haven't familiarized yourselves with this incredibly successful 100% financing program you are missing the boat. Home buyers, if you haven't spoken to your lenders and Realtors about the program you may be missing out on the least expensive low down payment program available.

Gerry Suarez, Jr.

Your FHA Loan Pro!

Death of the mortgage broker?

Lewis Poretz - Mortgage Marketing Expert — Thu, 01 Oct 2009 15:04:31 -0500

It seems as if every week there are new guidelines, requirements, licensing etc. to remain operating as a mortgage broker these days. It appears as if the big banks want to be the only option to turn to when you look for a mortgage.

Every day I recieve a call from long standing veterans in the industry asking my opinion of the state of affairs in the mortgage broker world.

People - It ain't pretty.....

There are several options consumers can turn to when looking for a mortgage.

Mortgage Brokers - known to produce 65% of all loans originated.

Mortgage Bankers - a mortgage broker that utilizes a warehouse line and then typically sells the loan off to an investor.

Banks - we all know about them. I reccomend to support your local banks and leave the big boys alone. - Before dealing with a bank, be ceratin the will be around long enough to fund your loan. More bank failures are imminent!

Credit Unions - very strict underwriting guidelines but possibly the best terms in home financing if you qualify.

Private Investors - typically equity lenders that will make certain the reward far outweighs the risk.

OK - Mortage Brokers and Mortgage Bankers are being slammed with new guidelines such as increased net worth, more liability to repurchase bad loans and generally more sructiny with their closed loan packages. Broker cannot make loan decisions. Mortgage Bankers can make lending decisions but are very scared to do this currently because investors do not have to buy a closed loan and it could remain stuck on the mortgage bankers warehouse line - which creates a whole new set of issues.

Banks march to their own set of rules. Yes, some of the rules are more stringent, yet some of them definitely tip the scale in favor of banks surviving this mortgage meltdown and outlasting the survival of mortgage brokers and mortgage bankers.

In this risk/reward world we live in, expect to see more mortgage brokers and mortgage bankers close their doors. In a recent report I have read, 75% of mortgage brokers/bankers that were in business in 2005, just a few short years ago, are now defunct. Consumers are witnessing a new breed of loan originators and should expect more to come, possibly at an even rapid pace.

The intention of our government is to regulate the loan process but in my opinion, when you destroy an industry and eliminate 75% of the competition, You know what happens when competition disappears? You got it... inflated rates..... I will keep everyone posted on the state of the industry but for now... rates are at the lowest point ever and it is a great time to refinance or purchase a home.

Touchy Subject - your CREDIT

Lewis Poretz - Mortgage Marketing Expert — Tue, 29 Sep 2009 15:31:07 -0500

When searching for a new job many potential employers pull a credit report......

I am interested in learning what a typical loan originator / real estate agent's credit profile is....

please click the link below and answer the one question survey... i will update results regularly...

this will help everyone get a better understand where they stand compared to the rest of the industry should you apply for a job and have your credit pulled in the near future......

https://app.icontact.com/icp/sub/survey/start?sid=6495&cid=350014

Dave Ramsey - say it ain't so!!

Lewis Poretz - Mortgage Marketing Expert — Fri, 25 Sep 2009 06:30:44 -0500

Let me begin this post with this disclaimer…. THIS IS NOT AN ATTACK ON DAVE RAMSEY - he is an idol of mine… I have purchased his products and believe in what he is all about…. This is simply the facts on how their endorsed agents handle consumers and how Dave Ramsey personnel handle complaints…..

I am a huge fan of Dave Ramsey... honestly, he doesn't preach anything we don't already know but his delivery is spot on and about as real as it gets..... i recently received a loan proposal from one of Dave Ramsey's "endorsed agents"...

- let me ask the Active Rain community.... is 2.75% on the front end in ponts + junk fees what you would expect from the man, myth and legend called Dave Ramsey? I had to take a pic of the actual quote and insert into this post as I was not able to cut and paste it.... take a look for yourself........ i have left out the company and originators name, just as i did in the initial email i sent to the folks at dave ramsey --- see their reply below...... ** as a side note - i copied about 13 of my long time friends from AR.... we all know them...... these people know exactly how this went down.... it is a disgrace!

-------------------------------------------------------------------------------------------------------

One option I would suggest is going FHA. This reduces the monthly mortgage insurance by almost half.

Home Loan Specialist

XXXXXXX Mortgage

Office: 866-xxx-xxxx

Cell:

Fax: xxx-xxx-xxxx

Exclusively Endorsed by Dave Ramsey:

------------------------------------------------------------------------------------

I have sent Dave numerous emails and all they do is get screened by his workers..... see below... especially if you are a fan of his.... let me know your thoughts...

quote on 9/15/2009 30 Yr loan 5.125% 2.75% points cost of points $9679.56 est closing costs $2825.00 APR 5.56% huh????? I don't think so!!!!
___________________________________________________________________

Dear Dave,

I am a huge fan. I drive my wife and kids nuts making them watch you on TV and listening o your products in the car. I would give my left arm to be endorsed by you. I have tried multiple times but my requests go unanswered. With that said – I have a MAJOR concern.

I am an 18 Yr vet in the mortgage business. I believe in a fair profit. I believe in Dave Ramsey. I do not believe in flat out rip offs such as the example below………. *** I am NOT accusing the actual company off ripping off clients – however I can prove in an email I have possession of that the company in mention does not police their originators -- Let me break this down for you…. I was forwarded this quote from a past client who wanted a competitive loan proposal…….. My mission here is not to get anyone fired or punished but it is to make you aware of the lack of quality control your company has with regards to your endorsed agents…… in fact, I have removed the agents name and cell phone – if you want that information just give me a call…. I can forward the complete email…… regardless, this is not the Dave Ramsey I admire and turn to for advice on a nightly basis and I feel I owe it to you for all the free advice you have given me over the years.

I quote this refinance 5.0% ( which is par pricing ) and 1 point. The one point is my paycheck and it covers associated loan costs as well.

Your Dave Ramsey endorsed agent is charging the consumer 5.125% and 2.75 POINTS!!! On top of that, the APR – which is what the government tells consumers should be used as the basis for loan comparisons – is incorrect! I have not seen 2.75 points since the 90’s and the days of the 125% second mortgage……. this is worse than banks overdraft and over the limit fees….

Dave – say it ain’t so. Tell me you don’t endorse this crap……….. I look forward to your response….

Lewis Poretz
President – Open Mortgage

-------------------------------------------------
Lewis, please send me the entire e-mail. We take these issues very seriously.

As an 18 year veteran in the business, you certainly know that all loan situations are different. I would ask that you allow me to find out all of the facts before accusing XXXXXXX of being “crooks.” That is a very hefty word to throw around. We have worked with XXXXXXXX for over 15 years and never have I had an accusation like that thrown at them.

I will definitely check into this once you send me all of the information.

Thanks.

XXXXXXXXX

Director of National Sales & Sponsorships

The Dave Ramsey Show

877.410.3283, ext. XXX (voice)

______________________ Below is my response to the original email from dave ramsey people.....

Wow - I think it is awesome you guys responded to this that fast….

listen, I am not calling that company a crook. The company does not create the good faith estimates, the loan officers do…… But I can tell you this – I am part of a weekly conference call of about 20 small and medium sized mortgage shop owners like myself all over the country… we call ourselves the mortgage mastermind group - we are experts….. we also have principals and morals and as Dave says “ a heartbeat”…. I will gladly forward anything you request but I would like a phone call from you guys just telling me my client or myself will suffer no repercussions…… in other words… I don’t want any pissed off loan officer coming after my ass…… so I don’t want my name or my clients name passed out…. can you call and confirm that?

Lewis 410-956-0050 below are comments from my group, they all love Dave as well…. I thought I owed it to Dave Ramsey to blow the whistle… I just don’t want to get in the middle of this….

Shit, tell David Ramsey that he should chop off this loan officers hand, for using him as an endorsement, when she is raping this person. Hey, I don’t see a huge problem with someone making $8,000…. But there is $9,600 in upfront points plus about 1 pt on the back end, which is another $3,500….. so, $13,100 on a $351,000 loan amount? Just a wee too much….. if my client ever found this out, I would not have a client for life nor referrals.

Send it to dave along with a rate sheet

Send it to Dave along with a carefully crafted story and maybe he'll have you on the air.

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Lewis, I would have to send the customer’s information to XXXXXXXX in order to get the whole story. It’s kind of pointless without that, wouldn’t you agree? Making a judgment without that information is the equivalent of blindly taking your word over XXXXXXXX and forgive me if I decline to do that.

If you won’t give me the information then I cannot help your client.

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at this point i sent him the complete quote along with the originators name and contact info ---

All I want is a call from you… it is not the client you need to help…. he understands that it was a bad quote…… he can clearly see the charges in black and white… it is Dave Ramsey’s reputation… why are you defending this shit… here do what you will but if I find you passed my name out as the whistle blower and something happens to me or my family by some loan officer who has nothing to lose I am giving forewarning… I want myself and my client to remain anonymous… please why do I feel as if I am the bad guy here????…….

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and this is the BS i get back from someone who works for one of my mentors.......

1) You refuse to give me all the information needed for me to look into this.

2) I have said that we take accusations like this very seriously and that I would look into this situation once you provide me the information I need to do so. You responded by accusing me of “defending this shit.”

3) You’ve copied 13 people in on the e-mail chain who have nothing to do with this conversation.

4) Your actions and your language are completely unprofessional.

5) I will not waste a single minute on the phone with you.

6) I will not respond to any further e-mails from you.

xxxxx xxxxxxxxx

Director of National Sales & Sponsorships

The Dave Ramsey Show

877.410.3283, ext. xxx (voice)

xxx xxx xxxx (facsimile)

winds of change are in the air......

Lewis Poretz - Mortgage Marketing Expert — Fri, 04 Sep 2009 10:33:00 -0500

Imagine - A new business model where consumers actually put their trust in the company handling their mortgages, banking, insurance etc.....

It's coming people.... and you are the one's who have been forcing the issue...

yep - a financial institution with a heartbeat and a real honest feeling for the American consumer... an institution that has the consumer in mind first and foremost as opposed to the bottom line....

A place where you will be able to turn to for lending, banking and investments but in addition, a financial institution that listens and offers high quality advice regarding non traditional services such as helping consumers get out the financial mess they are in rather than attempting to discipline consumers for poor decisions.......

Hang tight - I feel a new model being written... the winds of change are shifting...... and everyone of you should be congratulated because the American consumer's distaste for the way things have been done for a long, long time is coming to an end.....

.........If you have been crushed by this economy – god bless you….

My Air Conditioning guy told me so......

Lewis Poretz - Mortgage Marketing Expert — Tue, 01 Sep 2009 07:56:41 -0500

As a mortgage professional I always ask other business owners, " how's business"? Just the other day my AC repair man was in the office attempting to get me some more cool air pumped into my suite as the heat was becoming unbearable. As he wrapped up his visit I asked my typical, how's business"? Man, I did not expect such a long conversation to follow.

He went on to tell me how life had been so good the past five years or so. He remained small all these years offering personal service to builders, socked plenty of money away and pucrhased several rental properties that had great cash flow and plenty of equity........

Fast foward five years......................... These properties now sit vacant. Most of them have lost so much value they are now upside down. Of course the loans he got on these properties were the flavor of the day at the time, 5 year interest only arms that are due to reset in 2010. And also of course, based on his great credit and some money in the bank at the time, they were stated income loans. And worse yet, those awesome builders who helped stack his money to purchase those properties who had always paid when the job was finished are now paying 30, 60 and even 90 days net..... and by the way.... stated income loans ain't no more................

If this situation sounds familiar, stay ahead of the curve before it is too late, understand your options and seek high quality advice from people who understand this business. Put a solid plan together to eliminate debt and monthly payments and stick to it.

How much is my house really worth?

Lewis Poretz - Mortgage Marketing Expert — Mon, 10 Aug 2009 09:07:00 -0500

Honestly - what is my home worth??

............ Often getting a home appraisal these days becomes a very humbling experience. We all have heard the saying "my home is my castle". Many times emotional values far exceed true market value when determining how much your house would sell for.

Foreclosures and short sales have pushed market values down. Way down... When determining the value of your house, an appraiser uses comparbles, otherwise known as comps. The house that sold for half the value of your house last month at foreclosure.... well that just pushed the value of your house down. No - it is not fair and given time you may be able to get more for your house than any appraiser can value you it at, but for lending purposes, it is what it is.....

Mortgage lenders have been battling the value issue daily. The new HVCC guidelines have been killing otherwise slam dunk deals. When refinancing a home, understand what you may be walking into. Know the facts upfront. For more details give us a call so you can make an informed decision before moving forward with any refinance.

How do I attempt to make clients bridge the gap between perceived value and actual value? I ask them this question. - If you had to sell your house in one week, where would you have to price it at?

If you want a true estimate of market value for your property, get in touch with a high quality real estate agent. Remember, it is much better to be informed than lost in the shuffle. Be proactive and understand your options in today's real estate market. There are deals to be had out there. Don't miss out.

.........If you have been crushed by this economy – god bless you….

REVERSE MORTGAGE MARYLAND

FED makes you say WTF ????

Lewis Poretz - Mortgage Marketing Expert — Tue, 04 Aug 2009 20:25:28 -0500

Want to know what type of handle the FED has on their duties?

Watch the video below... you will be amazed!

couple this with reports such as Bank of America and other huge lending istituions that accepted TARP money have modified hardly any loans.... and it will make you sick!

spread the word - send this to your political representatives

Subordination agreements are driving me nuts!!....

Lewis Poretz - Mortgage Marketing Expert — Mon, 20 Jul 2009 20:00:43 -0500

.....................If you currently have a second mortgage, home equity loan, line of credit or anything that is a lien on your property, you will be required to have that loan subordinated or paid off when refinancing. And let me tell you, these bad boys are a nightmare! Currently I have been waiting over seventy five ( 75 ) days for one of these subordination agreements to be completed. Lenders move at their own speed. I have been told by Bank of America, Citi Mortgage and Citizens that they only take fax requests….. oh and by the way, it will cost you upwards of a $250 subordination fee before the clock starts ticking.

I cannot begin to tell you about the nightmare of waiting for these agreements has become. Many of these resulting in rate lock extensions which get passed on to the borrowers. And these are lenders that currently own your second mortgage in the first place. Besides the fact most of them are recipients of millions in TARP money targeted to help homeowners like all of us. If you are one of the many frustrated with your current lender and their turn time with these subordination agreements, call and write your local and state politicians. I certainly have.

Be prepared for frustration and if possible, look into paying these loans off with a fixed rate first mortgage. Especially if you have a variable (adjustable) rate line of credit. These my friends are ticking time bombs…..

For more advice on how to handle a refinance with a second mortgage involved call a high quality mortgage professional.

If you have been crushed by this economy – god bless you….

Lewis Poretz - Maryland Mortgage Advice

I have a BOLD PREDICTION ----

Lewis Poretz - Mortgage Marketing Expert — Tue, 07 Jul 2009 19:32:20 -0500

Many readers may not want to hear what I have to say. I said it before and it brought out responses from a few people that don’t like reading statements they percieve as doom and gloom..... Maybe I didn’t do a good enough job of simply pointing out some GLARING STATISTICS that can’t be denied nor be thrown out with the bath water. People remember this – politicians can put a spin on any statistic and make it look good. That is what politicians do. Read the facts below – I am not a gloom and doomer. I am a realist!

People with good credit and equity left in their house need to know what’s up. They need to understand how lucky they are that bills get paid every month. They need to become an expert on saving money and reducing debt, for these are the rare breed that will hunker through this and possibly even profit from our current economy. This message is intended for people who are above water because people who are $100,000 plus under water on their house, people who have been out of work for months, people whose income has been slashed, many of these mentioned people with excellent credit through all of this. Well these people just don’t care anymore. Read below with an open mind and try and comprehend. Do not hide from reality. This is reall world. If you are one of those that is laughing right back at this economy you are awesome and I am jealous. If you have been crushed by this economy – god bless you….

Our Vice President – the man just under the head honcho - said just a few days ago, “we misread how bad the economy really is”…. SHOCKER!!!

DUH! Let me tell you what I see must rebound before we even hit the bottom, let alone recover. I don’t care where you live……

PROPERTY VALUES - In MOST areas – I said MOST – values continue to decline. For the first time home owner and the mortgage banker who is originating these loans, you guy’s should be kickin ass. BUT for the millions who can only dream of purchasing in this market, well they are simply getting crushed.

Mortgage insurer PMI Group Inc. says home prices continue to fall and will likely be even lower in two years. Their recent index shows approximately 85 percent of the nation's 381 metropolitan statistical areas (MSAs) are now facing increased risk of lower home prices in 2011. Florida, California, Nevada and Arizona continue to have the highest risk scores but an increased risk of lower future prices is now spreading across all regions of the nation because of the significant increases in unemployment and foreclosure rates. Some experts are now predicting another 40% drop in home values are inevitable. Hmmmmm let’s read on –

UNEMPLOYMENT – the number of unemployed Americans will top 10% within two months, possibly even next month. Watch the news - last I heard GM and a few other pretty large employers were letting go employees by the tens of thousands. Even hospitals are cutting their budgets. HOSPITALS!!!

Imagine Emergency Departments closing for the night. How bizarre huh?

FORECLOSURES - I see somewhat of an algebraic formula here – check it out…

Property Values + Unemployment = Foreclosure what a genius thought –

If you own a house and you owe more than it is worth (property value) +

You ain’t got no dough to pay the rent (unemployment) =

You gonna lose your house!!!

Why is that so damn hard to understand? Statistics show in in every 5 homes in America is upside down on their mortgage – read on…..

BAIL OR NOT? – A study of the Massachusetts housing market by researchers from Northwestern University and the University of Chicago concludes that a home owner’s propensity to default increases the further their loan goes under water.

The study found that home owners begin to walk away after declines of 15 percent or more. More than 17 percent of households would default, even if they can afford to pay their mortgage, when the equity shortfall reaches 50 percent of the value of the house.

Recent studies show 20% of American homeowners are under water. TWENTY PERCENT! That is 1 out of 5 homeowners. If housing prices have another 40% drop to go let’s take a look at something here.

Your current house value is 300K You owe 350K you continue to maintain good credit and pay on time. Next year your home is worth 240K. That is simply a 20% drop, a number that can be seen as fairly conservative. So now your house is worth 240K and you owe 345K – It could possibly take 10 – 15 years of mortgage payments simply to get back to frickin even! Highlighted below is a new term you are going to start hearing more and more… trust me on this. This term has no prejudice to credit or income. This demonstrates that housing values must hit bottom before anything will even remotely begin to get better in our economy. The new saying will be –

Strategic Mortgage Default

MORE BAD NEWS – Bank Failures will be on the rise. It is inevitable. Just look at what the subprime mess did to them. The conforming, A+ credit loans nobody expected to go bad are going to start happening very soon. Given the example above, if you were that far underwater and it could take up to 15 years to break even, what would be the most strategic financial decision to make? As property values continue heading south more of those good borrowers will choose to simply walk away. More bad loans = more bank closings. There is NO WAY AROUND IT….

from Forbes 7/7/2009 --

"Rising unemployment, a shrinking economy and falling home prices have left U.S. consumers increasingly unable or unwilling to pay credit card bills and home equity lines of credit.

THE SOLUTION – Now there is your gazillion dollar question. Would it make sense if the government told the banks, which they own anyway, to just forgive any mortgage amount owed on a property until the loan to value hits 80%. Hs the government already spent that much money bailing out the banks anyway? And speaking of the bailout money, I called my lender, told them I owed more than my house was worth, and they told me because I always pay on time there was nothing they could or would do. My current lender held their hands out to the government for billions in TARP money, still went belly up, and was purchased by a bigger bank with TARP money they received from the government. WTF???

Maybe this 2^nd round of government stimulus they are now talking about – (would it really be the 2^nd round or the 3^rd, 4^th or 5^th?) – maybe this money can really be not just earmarked but handed directly to underwater homeowners and small business. Fix those two core units that America was built on and then we can begin a recovery. Hopefully it won’t take the next 5 – 10 years to figure this out. Until then --- God bless you all ~~~

MARYLAND MORTGAGE EXPERT

How much is my house worth??

Lewis Poretz - Mortgage Marketing Expert — Tue, 07 Jul 2009 06:02:12 -0500

Consumers, realtors and mortgage brokers continue to have deals killed because of the new HVCC appraisal compliance regulations. Inferior appraisals are now becoming the norm with no help in site. This program has come under serious fire and hopefully will be placed on hold very soon as refinances and purchases fall by the wayside with no appeals process that seems to work.

There is an alternative. FHA - if you are looking to refinance ask your mortgage banker if an FHA loan would make sense for you. FHA appraisals are still handled by the loan originator and comparables can be checked by appraisers for value before an order is sent and your hard earned money is cashed by appraisers simply looking to make a buck without the client’s best interest in mind.

Is the worst yet to come?

Lewis Poretz - Mortgage Marketing Expert — Sun, 05 Jul 2009 22:32:19 -0500

Have you been listening to the media lately?

Many are saying that the housing market has hit bottom and the economy is on the way to a recovery. To these people I say nonsense! As a mortgage banker who fields calls for refinancing and purchases every day I can tell you this is a false statement which is harboring false hope. I have my finger on the pulse and it is not good. Here is a snapshot of how I see it -- like it or not.

The stock market is still 40% off where it was just a year or so ago. And in my opinion will continue to head the wrong way. Unemployment is up. Way up! In fact it will likely go over 10% next month. That means if you put 50 Americans in a room, 5 of them will be unemployed. 1 in 5 American home owners are under water! Foreclosures continue to rise. A recent report shows that 1 out of every 4 homes are delinquent on their mortgage. If you live in a neighborhood of 50 houses, 12 of your neighbors could be facing foreclosure. Staggering!!!!

Here is my finger that is on the pulse and this is what it is telling me.

I am approving fewer loans than I did last month and the month before that.

Housing prices continue to sink at an unthinkable pace.

Credit scores continue to drop.

Income continues to drop.

Personal debt continues to increase.

So what can I do about this you ask? First of all, hunker down. Change your spending habits. Stop using credit to purchase things. Cut up your credit cards. Call your creditors and ask if they have any programs to help eliminate your debt faster and less costly. Pay your mortgage, autos, electric and feed your family first! Do not let unscrupulous creditors and collection departments bully you. And finally this may come as a shock to you hearing this from a mortgage banker, do not open a line of credit or a second mortgage. If at all possible, do not consolidate your bills into a new mortgage and eat up the remaining equity in your house. These may be moves you never recover from.

In my opinion, this country is in for a more serious economic crisis than most so called experts have ever predicted. I see this stuff every single day and I am living this nightmare right along with you. My mission is to provide you with honest answers to your questions. Possibly selling your home and moving “down” makes the most financial sense. Maybe, walking away from your house or negotiating a short sale makes the most sense.

Seek high quality advice and a get a complete credit check up from someone who has a heartbeat and NOT a dollar sign in mind. It may be the most important move you ever make.

Mortgage rates this week should be -- HIGHLY VOLATILE

Rates make a comeback - Property values continue to fall...

Lewis Poretz - Mortgage Marketing Expert — Tue, 16 Jun 2009 21:37:54 -0500

As appraisal requirements become more detailed typically resulting in substantially lower appraised values, mortgage refinance deals are falling by the wayside. I have never witnessed such a huge difference in clients perceived value and actual appraised value. Up to 400K spreads just this week.

So what does this mean to me?? – Let’s say you have some equity left in your house and you have a need for cash out – (college, home improvement, bill consolidation whatever…) the true motivation in refinancing would be cash, NOT interest rate alone. Rates are higher – that is a fact, but there is still cash available with acceptable appraised value…. that is the problem… as values continue to fall, consumers are facing less available cash when refinancing.

Don’t let interest rates determine your refinance if cash is a big factor. You may lose the opportunity to achieve your goals. We are still lending money!

The best home equity line in the world...

Lewis Poretz - Mortgage Marketing Expert — Fri, 05 Jun 2009 10:54:28 -0500

Why would I ever want to refinance my 2.5% line of credit???

Were you one of the ones who took out a monster line of credit a few years back, because you could? Well there were plenty of you that did. And what a brilliant decision you made huh? Where else could you get a payment that low for that amount of money borrowed? Why would you want to refinance a 100K loan at 2.5% to a fixed rate that is higher?

Let’s assume the prime rate (the tool used in adjusting your line of credit) remains low for a bit longer. Eventually, when government debt must be repaid and inflation hits – (all the experts say it’s coming) mortgage rates will hit double digits. It’s a fact. History repeats itself. To see in black and white what that could mean to you, look at a few examples below, based on the prime rate historical index.

Let’s assume your rate today is set at prime (3.25%) - .75 which would be a rate of 2.5%

100K balance 250K balance

2009 - @ 2.5% monthly payment - $208 $520

2008 - @ 5% monthly payment - $416 $1041

2006 - @ 8.25% monthly payment - $708 $1718

1989 - @ 11.5% monthly payment - $958 $2395

1979 - @ 21.5% monthly payment - $1791 $4479

Never in the history of the world.......

Lewis Poretz - Mortgage Marketing Expert — Fri, 29 May 2009 17:14:48 -0500

Purchase activity appears to be attempting to shake off the cob webs…..

By no means does any so called expert have enough facts to call an end to this recession/depression. Many key indicators signal things will get worse. I can add this as a fact. We are receiving many more calls every day regarding purchase money. Refinance still far outweigh purchases but we are finding activity is increasing ever so slightly, with most of the inquiries coming from first time home buyers.

*** If you do not currently own your home, you pay your bills on time and you have a couple bucks saved up -------

There may never, ever, ever - ( i am not kidding about this!! ) - in the history of the world be a better time to buy a house again!

You are what is known as a seller’s dream – a non contingent borrower. Side by side with an experienced real estate agent and a strong commitment letter you are driving the bus and calling all the shots. Many contracts these days are based on the sale of a purchaser’s current residence. Well guess what, houses are not selling.

Find out what you qualify for today. Money is available to lend!

How the stock market moves mortgage rates....

Lewis Poretz - Mortgage Marketing Expert — Tue, 07 Apr 2009 22:28:24 -0500

The general rule of thumb when watching mortgage interest rates is as follows –

Good news for the economy causes the stock market to rise and interest rates to rise.

In the most simplistic of analogies - Bad news for the economy causes investors to pull money out of the stock market and into the safe haven of treasuries, causing mortgage interest rates to fall.

This is how it always used to be. In this economic climate no rules seem to apply but trends still remain typically somewhat the same. The stock market rally of the past few weeks has caused rates to increase. Loan level price hits for cash out, high loan to value, lower credit scores and other factors have moved some borrowers qualifying rates from the 4’s to the 5’s this past week. The lower rates are still available but they now come with a steeper cost in the form of discount points.

Earnings reports are expected out on Wall St soon. Many suggest the recent stock market rally was just mere profit taking. Others are calling for another huge drop in the stock market. Using the theory above, this could mean interest rates may possibly drop again. We have witnessed three or four rate drops in the past few months. Every rate dropped stopped at the same level. If you have been sitting on the sidelines waiting for rates to return to the level of recent weeks, pull the trigger when they return and stop speculating on further declines. I have had way too many clients who waited too long only to have rates return to the lower levels and were not ready to make a move.

Timing is Everything!

Maryland Mortgage Rates

I am mad as hell...........

Lewis Poretz - Mortgage Marketing Expert — Sat, 14 Mar 2009 11:56:46 -0500

I am mad as hell…..

Through all the years of taking loan applications I have heard many stories. It is not my business why people refinance but usually is to lower their monthly payment by consolidating debt. Regardless of why, I hear the stories during the loan application process. The story below from last week points the gun at why Banks must be Regulated. This is not a bashing. This is a true story that can be backed up with true proof.

We bail them out, but Banks continue to rape consumers.

I had a client last week that called about a loan. His name was Ben Dover. Hang with me, the names have been changed but this is a 100% real story and it is happening every day to millions of us. Mr Dover explained to me that he has somehow survived through this economic mess, paying all his bills on time and supporting his wife and kids, at the same time working endless days running his own business.

He is very proud he chooses not to bail on all his debt, his mortgages, his car payments and other obligations as he watches the growing number of Americans who have given up. He is a fighter! But something happened last week that prompted him to call me.

How does the Government allow this?

My client has clearly battled through adversity and has paid all the BS fees only to get his credit limit cut. Now if I remember correctly President Obama and friends claim that Bank of America is too big to let fail. So the government rescued them several times to the tune of billions of taxpayer dollars. And who is going to have to pay for these financial rescues? But the banks whose own clients have lend to rescue continue with these excessive charges and third world country interest rates. Maybe the movement in America should be to charge up all the available credit possible and then never pay the banks back. After all, what is good for the goose………….

You are one of our most valuable customers Mr Dover…

My client banks with one of the big boys – Bank of America. Matter of fact, he has several business accounts, personal accounts, a few credit cards and even a car loan with B of A. He went on to tell me how tight financially it became last year. Many bills were paid by credit card. Before long his debt accumulated. Surprisingly his business started generating more revenue. Ben Dover began paying down his debt.

Those Bank of America credit cards saved Ben Dover’s financial life. Sure he would call the bank when hit with $39 late fees and $39 over the limit fees. He argued the fact that the credit bureaus regard anything over 30 days as past due yet B of A states in their fine print that any payment received 1 day past the due date would trigger interest rate increases up to 31% APR. But Mr Dover took it like a man. Besides, he had no choice. He was on track to pay off all his debt even if it included hefty fees and unscrupulous interest rates.

Those rotten bastards – they should be shut down

As the story went on, Ben Dover became more enraged by the second. He told me that as he paid his credit cards with Bank of America down, the bank would cut his credit limit as well. That action not only eliminates any future life line he may need but it also lowers his credit score. And they did it in such a sneaky fashion. Bank of America cuts the credit limit to just dollars above the new balance. The new billing cycle comes and boom - $39 late fee and a $39 over the limit fee.

Corruption and greed within the banking system must be stopped!

Rates remain very low – loan level price fees continue to worsen

Lewis Poretz - Mortgage Marketing Expert — Tue, 10 Mar 2009 18:22:56 -0500

Want that coveted fixed rate in the 4’s? Oh yeah – it’s still here, never really went away. But toss in any cash out pricing adjustments and loan to value adjustments and mix in a subpar by today’s lending standard credit score and you may find a refinance is counterproductive. Not many months ago a 580 credit score would qualify for a 100% stated income programs. Now the pricing hits start at – get this – scores under 740.

By the way, what's it like to suck on a hose connected to a toilet? How many more billions can we give and let this mess continue. Talk about 1 step forward and three steps backward.

Wait a minute; didn’t we all hear President Obama tell us loans were going to be plentiful? Fannie and Freddie, you know the guys the government had to take over and whose stocks are trading in the 30 cent range are stating that tighter credit standards are leading to better performing loans. No damn kidding! Loans today are underwritten to such tight standards every deal is odds on favorites to perform and not default.

The way I see it, Obama, the Fed and whoever else has a say in this mess are sending the message to refinance and buy houses to stimulate the economy. But they must be living with blinders on as every new guideline change makes it that much more difficult to qualify for a loan. Timing is everything if you are contemplating refinancing – especially if cash out is on your agenda.

Is this the begining of the end?

Lewis Poretz - Mortgage Marketing Expert — Mon, 09 Mar 2009 21:07:10 -0500

Look at the program change Countrywide is rolling out. Typically others will follow. This will take refinancing options away from a big majority of consumers who are currently eligible but have yet to jump on the bandwagon.....

Effective 8:00 pm (PT), Thursday, March 5, 2009, the Conforming, Non-Conforming and Soft Market guidelines for LTVs > 80% have changed based on restrictions imposed by the Mortgage Insurance (MI) companies.

Stable Market Changes:
Conforming Loans:

Maximum LTV lowered from 97% to 90%
LTVs > 80%:
- Minimum Credit Score: Increased from 620 to 700
- Max DTI: Maximum DTI of 41%, regardless of AUS decision
- Tradelines: Minimum 3 tradelines required
- Payment History: Minimum payment history 0 x 30 x 12 required
- Reserves: Minimum 2 months reserves required, regardless of AUS decision
- Pay off of Subordinate Liens: All payoffs, including purchase-money seconds, will now be considered cash-out and will not be allowed for LTVs > 80%
Second Home: Maximum LTV lowered from 90% to 80%
Cash-Out: Maximum LTV lowered from 85% to 80%

Non-conforming Loans:

Maximum LTV lowered from 90% to 80%

Conforming Soft Market Changes:

LTVs > 80%:
- Minimum Credit Score: Increased from 680 to 720
- Condos: Maximum LTV lowered from 95% to 85%
Interest-Only: Maximum LTV lowered from 90% to 80%

Impact to Pipeline
The following pipeline protection rules apply:

Loans currently in the pipeline are eligible under the "previous" guidelines only if credit approved in the Wholesale Loan Center and locked by 8:00 p.m. (PT) Monday, March 9, 2009.
- Only loans underwritten in the center with a communicated credit disposition of Approved or Approved with Conditions are eligible for pipeline protection.
Loans in the pipeline must fund on or before Monday, March 23, 2009.
Loans NOT able to lock and fund by the dates above must be recommitted to an allowable program such as FHA, VA or Rural Housing.
Loans requiring Manual MI per existing guidelines must have a valid MI Certification in the loan file prior to closing. Due to MI volatility, it is highly suggested that loans requiring Manual MI per existing guidelines obtain the manual MI immediately.
Loans eligible for CMI per existing guidelines may continue to utilize CMI but must meet above approved, lock and fund by dates.
Lock extensions are not allowed.
Re-locks will be subject to current guidelines.
Reminder: Loan submissions received after 8:00 pm (PT), Thursday, March 5, 2009, that fall outside of these new guidelines that receive an e-Approve "Accept" decision through CWBC will not be honored.

If you have any questions about these changes, please call your Countrywide account executive.

The Death of Time - you must check this out

Lewis Poretz - Mortgage Marketing Expert — Mon, 09 Mar 2009 17:31:21 -0500

Below is a link to a post that after reading is downright frightening. It is a must read not just for all AR members but for everyone. Are you aware of what is happening in the world at this moment?

I have been an Active Rain member for a long time and many of you people even know me.

Do not skip over this link. You do not want to miss this information, regardless if you agree, it is a thought provoking and eye opening view on what is going on in the world right now! Below is a synopsis of what this message is all about. I personally know the author and the majority of the time he is dead on with his predictions. enjoy.............. please bring any comments back to this post as well.

http://www.deathoftime.com/2009/03/09/there-is-about-to-be-a-very-significant-change-in-headlines-around-the-world

I have just posted an article that is long, especially by blog standards, but important. I think we are about to see the global economic crisis morph into a global social/cultural/political crisis.This is not so much about my opinion but an objective analysis – in virtually every section of the world there are protests that are often growing into riots. The protests, regardless of the nation where they occur, share a single common denominator: it is the middle/working class protesting against governments they see as corrupt and an upper class they see as having exploited them – both are blamed for the economic situation. In this post, I assemble an iteration of events, along with pictures and videos that establish a clear pattern. The mainstream media, especially in the US, have missed this story almost entirely. But I do not think they will miss it for long – it’s becoming too loud and the protests that have been happening regularly elsewhere are starting in the US. There is more to come, as I also report in this post: a multi-city “March on Wall Street” scheduled for early April. London police are prepared for “a summer of rage.” Putin has warned Russians that he will react strongly if people use the economy as a reason to stage a “people’s revolution.” It’s chronicled country-by-country in my blog, from Latvia to China to Guadeloupe – it’s remarkable.

http://www.deathoftime.com/2009/03/09/there-is-about-to-be-a-very-significant-change-in-headlines-around-the-world

If my analysis is correct, I think the world is about to face a much bigger challenge than just an economic meltdown. I have allowed the facts to speak for themselves. If this is news to you and you think that it should be news to others, please forward the link to others, or post it on line, recommend it on facebook, link it on twitter, etc. Are we in denial about just how bad things are? See for yourself.

http://www.deathoftime.com/2009/03/09/there-is-about-to-be-a-very-significant-change-in-headlines-around-the-world

Just how bad is it?

Lewis Poretz - Mortgage Marketing Expert — Thu, 05 Mar 2009 20:48:58 -0600

Let's get candid about a few things.....

Just how bad is it?

President Obama went on TV the other day and told Americans to jump back in the stock market. It seems as if he is on TV just about every day lately. And like clockwork when Obama tells the country things will be ok the stock market gains as if to jump with joy. Well guess what happened this time. The chairman of the Federal Reserve went on TV that same afternoon and stated, “Without a reasonable degree of financial stability, a sustainable recovery will not occur,” Bernanke further commented, “Although progress has been made on the financial front since last fall, more needs to be done.” He also added policy makers would have “preferred to avoid” what is likely to be the largest ratio of federal debt compared with gross domestic product since the end of World War II, and he urged lawmakers not to lose sight of fiscal discipline.

After multiple bailouts to AIG, Citi, Bank of America and others, I ask you in all seriousness – Ya think it’s gonna work? Even kids see what is going on and are asking why? Enough said……………

High Quality Advice - seek it now….

Leave the lowest rate to Lending Tree. In today’s mortgage market, you better know what you are doing. Will a program you qualify for now, a program that puts you in a better financial position, a program that makes sense even be available next week? Talk with an expert who fully understands today’s mortgage lending environment. Have your credit report reviewed once a year. Understand your options. And never forget – Cash is King! If you have to, hide some under your mattress.

Our sincere prayers and thoughts….

As a 15+ year mortgage vet, I have seen a few up and downs. But this time, the percentage of mortgage professionals that have left the business is staggering. Many hung on as long as they could, some too long. Many had great credit and families to support and are now in dire financial straits. Some of these people were my friends for the past 15+ years. As I have told colleagues over and over the past few months, we are not competitors any more - we are all in this together. We should be holding hands. Unfortunately, too many were victims of the industry. We are thinking of you guys and wishing you the best.

hey - wait a minute now...........

Lewis Poretz - Mortgage Marketing Expert — Fri, 13 Feb 2009 09:31:01 -0600

I have a question for everyone out there. This question is not just directed at consumers who own a house and are upside down, or people who are overextended on credit because that was what they had to do to survive, or anyone who's job has been terminated. Yeah - they need help. We all need help.

But this question is also directed at the small businees owners who supposedly are the backbone of what America is all about. --- 4.5% interest rates, tax credits and everything else you poiliticians are squawking about are just fine.... but what happened to the money for small business? i am telling business owners in my community every day, owners i hvae respected for years, i am sorry - i cannot approve this loan for you. These business owners need a loan to stay alive because the banks have shut down their lines of credit.

Anyone have a comment on this? Anyone mad?