Mary Anne's Blog

How MDIA and HVCC will Impact Your Closing Date

Mary Anne Daly, Queen of the Loan (Pacific Mortgage & TMP CA DRE Lic #01380812) — Wed, 02 Dec 2009 00:11:44 -0600

This is a well written and detailed explanation of MDIA and HVCC. Required Reading for Real Estate Professionals and consumers entering into Real Estate transactions.

Via Nicole Lahti, Austin Texas Mortgage (United Lending):

If you're in Real Estate and have a pulse, you've experienced, or at least heard of, the frustrations caused by the HVCC process. Well, just as you started getting used to dealing with HVCC's inefficiencies, along comes MDIA (Mortgage Disclosure Improvement Act, also referred to as HERA), HVCC's slower, meaner sister.

Ok, so before you start drowning in an alphabet soup of government legislation, let's quickly breakdown the legislations' rules, and their impact on the real estate market.

HVCC, Home Valuation Code of Conduct (effective May 1, 2009):

Promotes the accuracy of appraisals by shielding appraisers from undue influence and ensuring consumers have sufficient notice of appraisal content by requiring consumers receive a copy of their appraisal report no less than 3 days prior to the closing of their loan, absent a consumer waiver of this requirement.

Impacts

Although this legislation is great in theory, its stringent (an in my opinion irrational) rules makes implementation is inefficient at best. HVCC has caused significant delays in closings, and kills sales altogether by not offering a reasonable dispute process for correcting inaccurate appraisals.

MDIA, Mortgage Disclosure Improvement Act (effective July 30, 2009):

Amends the Truth in lending Act (TILA) implemented through Regulation Z by changing the requirements surrounding disclosures to consumers and addresses the timing of when fees can be charged.

MDIA is also referred to as HERA (Housing and Economic Recovery Act), as MDIA amends HERA which was passed in 2008.

Impacts

Another piece of legislation that is great in theory, but will negatively impact the real estate market as inefficiencies in the process are worked out. Until these are corrected, the real estate market will experience significant delays in closings, increasing the cost to consumers through longer ratelock periods and/or lock extension costs.

The good thing is consumers will benefit from greater transparency once inefficiencies in the process are corrected. Until then, hold on because its going to be a bumpy ride.

Four Key Elements of MDIA and HVCC

1. If the consumer is financing the property, these new regulatory and investor guidelines will impact--and could even dictate--the closing date. Historically, consumers and sellers would agree on a closing date, and then service providers--including lenders--would work as best they could toward meeting that date. Going forward, contracts can still be written with a specific closing date in mind, but all parties need to take into account that the earliest any home financing transaction can close is 7 business days after the consumer is issued his or her initial mortgage disclosures from the lender.

(Note: Saturdays, with the exception of federal holidays, do count as a business day for the purpose of disclosures only)

I don't see this rule causing too many delays as nearly all financing transactions require an appraisal. Although possible, its not very likely to receive the appraisal and provide it to borrower 3 days before closing (HVCC rule), all within the first 7days of providing disclosures.

2. Upfront fees cannot be collected by the lender (except for credit report fees) until the initial disclosures (most importantly, initial TIL) are received by the consumer.

Upfront fees include appraisal fees, and most lenders won't order the appraisal until they've received upfront payment/deposit from the borrower for the appraisal. Not ordering the appraisal immediately can cause delays in the underwriting and closing process.

The tricky part here is when the borrower is considered to have received the disclosures. Some lenders allow the initial disclosures to be emailed, and therefore, considered received immediately. Other lenders, require the loan be submitted to their investor, who then mails the initial disclosures to the borrower. If disclosures are mailed, they are considered received by the borrower on the 3rd day after mailing. Therefore, its important to ask your lender how disclosures and appraisals will be delivered to the borrower -- email or snailmail, as the answer can significantly impact your closing date (more on this in Email vs. Mail Delivery below).

3. The consumer must be provided a copy of their appraisal at least 3 days before closing. The consumer must receive the appraisal at least 3 business days prior to the mortgage closing. If the consumer believes the 3-business-day required review period is not necessary for whatever reason, he or she has the right to waive that requirement in writing.

This is an HVCC requirement, and to date I have not experienced any significant delays meeting this requirement. Delays may be experienced if an appraisal is mailed vs. emailed; in that case, a borrower is considered to have received the appraisal 3 days after mailing, and then HVCC requires a 3 day review period before they can close.

4. An increase of more than .125% in the Annual Percentage Rate (APR) from the initial Truth in Lending disclosure (TIL) requires the TIL revised and redisclosed to the consumer. The consumer must receive a revised TIL at least 3 business days before closing. A more typical contract date may be 30-45 days. Considering that many things can be changed or finalized throughout the course of the transaction, there are a number of changes that can impact the borrower's APR. Therefore, it is critical on the front end to ensure estimated fees are as accurate as possible.

Ok, this is the BIGGIE. Prior to MDIA, most lenders accurately disclosed their fees, and provided a "good faith estimate" of other third party fees. A good lender always came in close. This is no longer possible with MDIA as a hairline change in 3rd party fees could increase the APR more than .125%. If this occurs (which could be discovered right before closing), the TIL must be redisclosed, and the closing delayed at least 3 business days. Therefore, its very important buyers choose a lender before an offer is made, so the lender can collect 3rd party fees and provide an accurate TIL ASAP.

The tricky part again is when the borrower is considered to have received the redisclosed TIL. This all depends on whether the redisclosed TIL is mailed or emailed. If it is mailed, add an extra 3 day mail wait to the 3 day review period, which means your closing can be delayed 6 more days! Ouch.

Mail vs. Email Delivery

As mentioned above, whether the initial/redisclosed TIL and/or appraisal is delivered to the borrower via mail or email has a significant impact on the closing of the loan. If an email system is utilized, the borrower is considered to have received the documents immediately, and the 3 day required review period can begin. However, if a mail system is used, the 3 day review period doesn't begin until 3 days after the documents were mailed. Whether a mail or email delivery system is used depends on which investor the lender utilizes for the loan.

Currently, many investors allow for an email delivery system, however, there are many that utilize a mail system. The general trend for investors utilizing mail delivery systems is to switch to email, but until then expect delays in closings. Remember, its a learning curve for everyone. To help you visualize how MDIA and HVCC will affect a typical closing see the slides below. I've included a few calendars to help illustrate various scenarios you may encounter, including email vs. mail delivery system, and how redisclosing the TIL affects the closing date.

What you can do to make adjusting to MDIA less painful

1. Choose your lender prior to making an offer. More than ever, there are many moving parts and timelines to adhere to during the underwriting process. Therefore, you need your lender communicating with all parties involved early-on to ensure a smooth and timely closing.

Choose an experienced, competent lender prior to making an offer, and understand the consequences of switching lenders. A new lender must provide a new TIL, meaning the wait requirement periods start from the beginning, and will delay your closing.

2. Negotiate which title company you'll use quickly. Buyers and sellers choose which title company to use during the negotiation process. Real estate agents should negotiate this first, so the lender can contact the title company for their fees to begin computing the initial TIL. The sooner the initial TIL is completed and sent to the borrower, the sooner you can close. They key is to facilitate communication between the lender and title company ASAP.

How to negotiate to use your Title Company? If a buyer wants to use their title company, pull for them by letting the seller know the lender already has their fees, which means the initial TIL is almost complete (subject to the final sales price), and can be sent to the borrower sooner (i.e., close sooner). If a seller wants to use their title company, pull for them by providing the title company's list of fees and endorsements with the Seller's Disclosure.

3. Allow for a 30-45 day closing. This timeline may decrease as the industry adjusts to the new process, but minimize stress by allowing for ample closing time.

4. Lock the interest rate and fees upfront. The best way to expedite the close is to lock in the rate and fees as soon as possible. If the borrower chooses to "float" the interest rate, a TIL may need to be redisclosed when the rate is locked if the rate and fees differ from the initial TIL provided. Redisclosure automatically adds at least 3 days to your closing date.

5. Understand the MDIA and HVCC process, and the learning curve

These are new processes for everyone involved in the transaction, and the best thing you can do is understand the legislation so you can be a team player. There's nothing worse than someone who hasn't taken time to learn the new way of doing business, then blaming everyone else when things take longer than they expected.

What you can do to make adjusting to HVCC less painful
1. Choose your lender prior to making an offer. Doing so allows your appraisal to be ordered quicker. Also, understand changing lenders may require you to purchase a new appraisal as some lenders don't allow you to transfer the appraisal you ordered through another lender.

2. Understand which comps appraisers are using. Appraisers use comps underwriters prefer, and currently underwriters are placing more weight on comps within the last 90 days AND pending comps. You may/may not agree with what that does to your value, but understanding this better prepares you for what may be a lower appraised value.

3. Discuss a contingency plan with buyer & seller. What happens if the appraisal comes in lower than the sales price? Try to figure out worse case scenario, and how the buyer and seller can restructure the price (or not) if it does. Don't be sideswiped by a low appraisal if you can help it.

MDIA and HVCC Timing Impacts
View more presentations from Nicole Lahti.

Queen of The Loan Music Video

Mary Anne Daly, Queen of the Loan (Pacific Mortgage & TMP CA DRE Lic #01380812) — Sat, 28 Nov 2009 23:49:26 -0600

I was recently crowned "Queen Of The Loan" by the Windsors because they heard that I give my clients "The Royal Treatment". As part of my duties, it turns out I'm required to address the public, so after LOTS of Royal coaching, here's a little song....

New and Improved!

Marin Realtor

Mary Anne Daly, Queen of the Loan (Pacific Mortgage & TMP CA DRE Lic #01380812) — Mon, 10 Aug 2009 16:08:54 -0500

Finding a Marin Realtor

Looking for a Marin Realtor

As a Marin resident since 1993 and a loan officer since 2003, I can help you find the right Marin Realtor for your needs. Whether you’re buying or selling.

As a loan broker since 2003, I have worked with Marin Realtors and have an extensive network of real estate professionals to draw on to help you find the best Marin Realtor for you.

Here are some Tips for Finding A Marin Realtor:

1. Ask someone in the Real Estate Field: People who work in Real Estate have relationships with Realtors and can give you several to choose from.

You might think going with the most successful top producing Marin Realtor is the way to go. But the number one Marin Realtor may not give your property the attention it deserves. It’s best to meet at least 3 Marin Realtors and talk to them about your situation. Like Goldilocks and the porridge, you’ll find the one who is “just right”.

I have helped several clients and others in need of a Realtor referral. A recent client, decided to relocate to the East and needed a Realtor to sell her home. Using my real estate network, which includes Realtors, escrow officers, loan agents and real estate attorneys, I recommended 4 qualified Realtors for her to interview. All the Realtors I suggested were experienced in her her local area.

2. Interview them over the phone: Before connecting her to the Realtors, I discussed her situation with them over the phone. We talked about what they thought the challengers were regarding my client’s property. I then let my client know a little bit about each of them including the results of my interviews and encouraged her to meet and interview all four of them.

3. Meet the Realtor in person at your home. When you interview them over the phone, ask them to come to your home to discuss listing your property for sale. Each Realtor should arrive with a current market analysis to let you know what homes have recently sold for in your neighborhood. They can talk about the state of the market, the number of days homes are staying on the market before selling and other trends that will affect your home sale. They may also discuss challenges in lending that might affect the sale. Finally, they will also discuss and recommend improvements you might want to make in order to make your home desirable to a larger number of buyers. A good Realtor will have a network of experienced and affordable contractors to give estimates of any work that might be recommended.

My client chose the Realtor I thought was the best fit for her. That Realtor was the most familiar with her neighborhood and was the most proactive of all the folks I spoke to. Instead of reacting negatively about the client interviewing several Realtors, this Realtor was encouraging about having my client meet and interview others.

So if you need a Marin Realtor, or any Realtor in the state of California, I can help you find the right Realtor for you in your town and like Goldilocks in her quest, we’ll find the Realtor who is “just right” for you.

San Anselmo Homes For Sale - Sleepy Hollow - 10 Martling Road - 94960

Mary Anne Daly, Queen of the Loan (Pacific Mortgage & TMP CA DRE Lic #01380812) — Wed, 05 Aug 2009 00:07:00 -0500

San Anselmo Homes For Sale - Sleepy Hollow - 10 Martling Road

San Anselmo Homes For Sale - Sleepy Hollow is a desireable neighborhood in San Anselmo with large lots, great schools and a strong community.

This special home has been redesigned, reimagined and remodeled to create an ideal San Anselmo Sleepy Hollow family indoor/outdoor resort.

Situated on a sunny, near .4 acre, this home takes advantage of level yard areas – front and back, swimming pool, beautifully designed & planted gardens, an array of fruit trees and excellent privacy.

The San Anselmo Home For Sale -Sleepy Hollow house has been beautifully and artistically remodeled: structural metal support beams in the ceiling have allowed the entry & living area to be connected, open & architecturally dramatic. The kitchen, dining room, entry & living room are united in one warm and welcoming space. The chef’s kitchen is designed for the serious cook but also to engage family and guests in the living/dining areas and at the breakfast bar. Vaulted ceilings, operable skylights & tasteful finishes make this an area that is stylish and comfortable.

The living area of the San Anselmo Home For Sale -Sleepy Hollow opens right up to the newly rebuilt redwood deck that commands fantastic sun and view orientation and a great post to take watch over the various backyard activities – Marco polo, badminton or climbing on the play structure.

This San Anselmo Home For Sale -Sleepy Hollow location is one of the best in The Hollow: close to the clubhouse and community pool, yet not on a main street, so you can enjoy the quiet and privacy of home plus all that Sleepy Hollow has to offer within just a few steps. The sunny orientation, woods and pastoral views could be your place under the sun. 4BR/3BA, dining & family rooms, office space with separate entrance.

More Property Details

To see this home and more San Anselmo Homes For Sale - Sleepy Hollow Contact Jeff Sterley CA DRE License#00494655.

To be pre-approved for a mortgage for this or other San Anselmo Homes For Sale- Sleepy Hollow contact: Mary Anne Daly 415-381-1995

Home Valuation Code of Conduct (HVCC)

Mary Anne Daly, Queen of the Loan (Pacific Mortgage & TMP CA DRE Lic #01380812) — Mon, 03 Aug 2009 23:21:06 -0500

Lending has become tougher than ever and the Home Valuation Conduct Code, which became effective May 1, 2009 has thrown the real estate and lending industry into chaos.

I recently had clients approach me who were in need of a cash-out refinance to make improvements to their home. Ordinarily this would be an easy transaction. The borrowers had great credit and enough equity in their home, but after the Home Valuation Conduct Code started it was another deal waiting to die without a mortgage broker knowledgeable in navigating the Home Valuation Conduct Code waters.

If you know anything about the fallout from the Home Valuation Conduct Code you’ll see that homeowners and home sellers are desperate to not let the Home Valuation Conduct Code trip their transactions up.

What is HVCC?

Simply stated the Home Valuation Conduct Code prevents mortgage originators from ordering appraisals for loans that will be sold to Fannie Mae or Freddie Mac, in other words, the best priced conforming and conforming jumbo loans. That sounds OK, except that the companies now ordering the appraisals, called Appraisal Management Companies (AMC’s) often pay appraisers one half of their pre- Home Valuation Conduct Code fees and often send appraisers from out of the area to the appraisal, a recipe for bad appraisals and the results are killing real estate deals all over the country.

So, back to my transaction: I did the research and asked prime lenders to give an estimate of value for the subject property. They all came in below market value to the point that my borrowers could not refinance. But the story does have a happy ending. The property is a Victorian home in the city of San Francisco and many of the surrounding homes are not Victorians, so the word “comparable” is important. An automated valuation in the hands of a non-local appraiser would not show the true value of this home. I did not want to risk having my borrowers receive a sub-standard appraisal, so what to do?

I turned my search to a portfolio lender, a lender who holds their own mortgage loans and does not sell to Fannie and Freddie. Going “portfolio” meant I could use my trusted local appraiser, who performed her inspection, included comparable properties, real comps - those that actually matched the subject property or were close to it. After I submitted the loan and appraisal to the lender, the appraisal review process went flawlessly and the loan is closing next week. Result: Happy borrowers who know that I safely navigated their transaction through the Home Valuation Code of Conduct mortgage waters.

If you don’t think there is a problem with the Home Valuation Code of Conduct, go to the Home Valuation Conduct Code Petition and read some of the real life Home Valuation Code of Conduct stories of deals falling out from scores of Realtors and mortgage brokers. And if you need a mortgage in California, make sure your lender knows how to safely guide you through the process. Or call me and I will be glad to help you.

The Seller Buy Down Strategy

Mary Anne Daly, Queen of the Loan (Pacific Mortgage & TMP CA DRE Lic #01380812) — Tue, 29 Jul 2008 19:37:52 -0500

The Seller Buy Down

You are a Realtor or Home Seller.

You've priced your home to sell, which is to say, it's not overpriced and the appraisal would come in at the asking price.

BUT it's not selling and you're considering a price reduction.

Don't reduce the price until you see the The Seller Buy Down strategy.

It costs less than a 5% price reduction and will attract more buyers.

Buyers get a below market interest rate with a lower payment, and more buyers will qualify for a loan.

It's a win-win for all concerned.

See this short video explanation of the Seller Buy Down strategy and get that property sold!

What Every Cash Buyer of Real Estate (Primary and secondary residences) Needs To Know

Mary Anne Daly, Queen of the Loan (Pacific Mortgage & TMP CA DRE Lic #01380812) — Thu, 17 Jul 2008 10:55:01 -0500

If you're paying cash for a primary or secondary residence, congratulations! You'll have a better chance of getting your offer accepted and can close fast.

As a mortgage lender, I love cash buyers. Yes, you read that right. Cash buyers of primary residences and second homes, that is.

Why do I love them? Cash buyers are so grateful when I inform them of this important tip that can save them tens of thousands of dollars in taxes as long as they own that home:

If cash buyers don't apply for a mortgage loan within 90 days of the close of escrow they forever lose the ability to deduct mortgage interest based on the loan amount, also known in this case as acquisition indebtedness. Cash buyers still may deduct interest for loans up to $100,000 in most cases (known as the home equity deduction.) For details, consult your tax advisor.

So I send them to their CPA or tax person or financial planner to be sure they understand the importance of this short window of opportunity for a major tax break that will save them tens of thousands of dollars over time.

For example: A homebuyer pays $500,000 (remember, this does not apply to investment property) and takes out a $400,000 mortgage @ 6.25% for 30 years.

The interest they will pay in the first year is $25,000.

If they are in the 25% taxbracket, they will be able to deduct approximately $6,250 in mortgage interest annualy and this does not include points paid or real estate property tax, both are also deductible (see your tax advisor for your specific situation)

$6,250 x 7 years of living in that home = $43,750

Some of you might be saying, "but paying $2,462.87 in principal and interest monthly is $29,554.43 per year, so who cares about saving $6,250 when you're paying out $29,554.43?"

Most high-net worth individuals who can pay off their mortgage from assets choose not to. The aquisition debt interest deduction is one reason they don't. To see 9 other reasons endorsed by top financial planners and a federal reserve board member, see my blog post: http://activerain.com/blogsview/430543/Top-1-Reasons-To

So be sure to consult your tax advisor about the 90 day acquisition indebtedness window if you're planning on buying a primary or secondary residence with cash.

Free Loan Modifcation California

Mary Anne Daly, Queen of the Loan (Pacific Mortgage & TMP CA DRE Lic #01380812) — Sat, 28 Jun 2008 18:26:36 -0500

Free Loan Modification in California

A Free Loan Modification in California is what you get when you use a non profit agency. That sounds great and might be the way for you to go, espeically with all of the con artists and scammers out there taking money from homeowners with big promises. Federal and State Agencies are cracking down on these charlatans who prey on distressed homeowners.

Just how does Free Loan Modifcation in California work? Hope Now is the organization that HUD refers homeowners to.

They don't charge homeowners. The Hope Now Alliance was funded and set up by the largest mortgage servicers in the U.S. How does this avenue of Free Loan Modification in California and the U.S. stack up as far as results, you might ask? That is a great question! The Hope Now Alliance released their results January 31st, 2009, of over 1,000,000 homeowners who applied for a modification in 2008 through their non-profit agency, a little less than 20% got a true modification.

California homeowners, particularly those who may not want to represent themselves, may also seek out licensed real estate brokers who have received a "no objection" letter for their advanced fee agreement from the California Department of Real Estate. But buyer beware: Please don't make the mistake of thinking that because a Broker is on the list that they are endorsed in any way by the Real Estate Department. Ask them questions about long they have been engaged in loan modification work, what training and study they persued, how much they charge and how their fee agreement works. Get references and proof of their prior successes. Do you get any money back if they're not successful? If you can meet them in person that is best. Know who you are dealing with and if you don't feel comfortable about what they charge or how their agreement works, say no thank you and move on.

Go with your instincts and be a smart consumer.

a Free Loan Modification in California may or many not get as good a result as working with a broker. The old adage You Get What You Pay For may apply, if you choose wisely. If you have questions about Free Loan Modification, and want more statistics regarding Free Loan Modification in California, email us at info@trustedmortgagepro.com.

Visit our website to learn more:

www.trustedmortgagepro.com

Let Me Sing You A Song!

Mary Anne Daly, Queen of the Loan (Pacific Mortgage & TMP CA DRE Lic #01380812) — Wed, 21 May 2008 19:11:41 -0500

I was recently crowned "Queen Of The Loan" by the Windsors because they heard that I give my clients "The Royal Treatment".

As part of my duties, it turns out I'm required to address the public, so after LOTS of Royal coaching, here's a little song....

The Fed Cut- Mortgage Rates Are Down, Right?

Mary Anne Daly, Queen of the Loan (Pacific Mortgage & TMP CA DRE Lic #01380812) — Mon, 07 Apr 2008 18:19:53 -0500

Not everyone wants Ben Bernanke's job, but this is a funny YouTube parody of Glen Hubbard, Columbia Business School's Dean who was tagged by the media as a potential successor to Greenspan. The students who created this parody obviously thought Hubbard could do a better job heading the Federal Reserve than Bernanke.

Most of us just want to know how the Fed Cuts effect our mortgage interest rates. My San Francisco Bay Area clients considering a Real Estate financing transaction ask me this frequently.

To answer the question, Rates are down after a Fed Cut, right? The answer is Yes and No.

The Fed Funds rate directly impacts home equity lines, credit cards and LIBOR based ARMs and often makes the long term mortgage rates dip initially, then go higher.

Why? Long term mortgage interest rates are tied to something called mortgage backed securities.

The Fed lowers the funds rate in order to stimulate the economy. When the economy is stimulated, the stock market improves, and when money flows into stocks and out of mortgage backed securities (or bonds), interest rates on long term mortgage loans go higher. The mortgage bond market is sensitive to inflation, and economic improvement often comes with inflation, thus bonds worsen, and long term mortgage rates rise.

Because interest rates have been so volatile, with I advise my clients to apply right away if they are considering refinancing. I present debt strategy and we select their loan product. If the rates are not in our target zone, we wait until they are, at which time I grab and lock the loan.

For my purchase clients, I show them how I track mortgage backed securities throughout the day on my cell phone and closely follow economic reports that impact rates, and float or lock accordingly after selecting a debt strategy and loan program.

Make sure your mortgage professional is tracking mortgage backed securities throughout the day to protect you in this volatile market. And make sure they know what Fed cuts and hikes mean to rates.

Consumer Tips: How To Use Zillow.com's Free Mortgage Shopping Tool

Mary Anne Daly, Queen of the Loan (Pacific Mortgage & TMP CA DRE Lic #01380812) — Fri, 04 Apr 2008 17:38:48 -0500

Zillow.com is now offering a free service to borrowers who are in need of a mortgage loan.

Here's how it works: You type in (anonymously) details about your situation, such as your home's value, your credit rating, what kind of loan you are looking for, etc., then lenders provide quotes to you and you decide who do go with.

Consumers should know that Zillow.com performs a background check on all the mortgage brokers who sign up for the service. They also verify that we're licensed. They provide a feedback system, which as time goes on, will allow borrowers to rate the lender as far as how the transaction went.

The concern is that some lenders will promise rates that are not "real" and when the borrower, especially in a purchase transaction is at the closing table, they'll be stuck with what they've been "baited and switched" to.

Before the feedback system is up and running, here are some tips from the CMPS Institute, a leading certification institution devoted to raising mortgage industry lending standards. To learn more about the CMPS Institute go here: http://www.cmpsinstitute.org

Shopping For A Mortgage Loan- Here's the inside scoop on how to do it right:

Always make sure you are working with an experienced, professional lender. The largest financial transaction of your life is far too important to place into the hands of someone who is not capable of advising you properly and troubleshooting the issues that may arise along the way. But how can you tell?

Here are four simple questions your lender absolutely must be able to answer correctly. If they do not know the answers immediately leave and go to a lender that does.

1. What are mortgage interest rates based on? The only correct answer is Mortgage Backed
Securities or Mortgage Bonds, not the Fed or the 10-year Treasury Note. While the 10-year Treasury
Note sometimes trends in the same direction as Mortgage Bonds, it is not unusual to see them move
in completely opposite directions. Do not work with a lender who has their eyes on the wrong
indicators.

2. What is the next Economic Report or event that could cause interest rate movement? A
professional lender will have this at their fingertips. To receive an up-to-date weekly calendar of
weekly economic reports and events that may cause rates to fluctuate, contact a Certified Mortgage
Planning Specialist professional today.

3. When Bernanke and the Fed " change rates what does this mean... and what impact does this
have on mortgage interest rates? The answer may surprise you. When the Fed makes a move, they
are changing a rate called the "Fed Funds Rate". This is a very short-term rate that impactscards, credit lines, auto loans and the like. Mortgage rates most often will actually move in the
opposite direction as the Fed change, due to the dynamics within the financial markets. For more
information and explanation, contact a CMPS professional today.

4. What is happening in the market today and what do you see in the near future? If a lender
cannot explain how Mortgage Bonds and interest rates are moving at the present time, as well as what
is coming up in the near future, you are talking with someone who is still reading last week's
newspaper, and probably not a professional with whom to entrust your home mortgage financing.

Be smart... Ask questions... Get answers!
More than likely, this is one of the largest and most important financial transactions you will ever make. You
might do this only four or five times in your entire life but CMPS professionals do this every single day. It's
your home and your future. It's our profession and our passion. We're ready to work for your best interest.

Charlie Bit My Mortgage! And Look How We're Using it to Pay for His College...

Mary Anne Daly, Queen of the Loan (Pacific Mortgage & TMP CA DRE Lic #01380812) — Tue, 01 Apr 2008 03:00:45 -0500

I love this YouTube video (so do millions of others, as of this posting, it's been viewed over 27 million times!)

But watching it as a mortgage planner, I wonder if the parents of Charlie and his brother have started a college savings account for their boys. I also wonder if they have a good mortgage planner who can show them the difference between them saving monthly, or taking some equity out of their home and letting a lump sum grow in a safe, fully diversified investment account. When you compare the after tax cost of saving for college this way, you will see that it's a more cost effective strategy. DISCLAIMER: This is NOT for every homeowner. If you have assets, stable income and a good savings track record, using equity management might be right for you.

A good mortgage planner will consider your income, tax bracket, current mortgage, debt and assets and the age of your child (or children) and show you how much faster you can save with a much lower monthly outlay.

Watch Charlie Bit My Finger Again and read on to see a strategy for how to save for your little one's college.

To keep it simple, let's Charlie's parents have one child to send to college.

They have a $100,000 combined annual income, and are in the 25% tax bracket, and are married, filing jointly.

They're British aren't they? I love the way Charlie's brother annunciates the word "OUCH!" Well let's pretend they live in the USA.

We'll assume an 8% annual return on their savings.

Annual cost of college in today's dollars: $19,188.

Wonder what Charlie will want to be when he grows up? Well as time marches on, the cost of college will rise, so we have to factor that in.

College Cost Inflation Rate= 5%

Age of child when savings begins: 3

Total cost of college: $171,932. Yikes! Don't worry, it's not as hard as you think. Now pay attention:

Option 1 - Monthy Savings Needed: $527.68

That's what it costs if Charlies mum and dad start w/ zero college savings at age 3, when Charlie is still a cute little imp.

Option 2 - Current lump sum needed to fund college: $54,200.43

We will assume the parents refinance and take out the lump sum on a 30 Year Fixed Rate Mortgage @ 6%:

Payment on lump sum: $324.96

After tax payment on lump sun: $257.21. Ah ha! If you use your mortgage as a tool, it will cost a lot less per month, and they can sign Charlie up for Taekwondo, so he can put his strength to better use.

Monthly amount saved using Option 2: $270.47

I know what you're thinking now: Charlie's going to be educated, but his parents are still paying on that mortgage.

True, so if they put the $270.47 they are saving monthly using our strategy in a diversified account earning 8%, how does that look over time?

$56,956 saved in 11 Years

$93,593 saved in 15 Years, when Charlie is going off to college. So they can "repay' the mortgage, or put that savings toward your retirement.

If you think this strategy may work for you, you'll of course want to consult your CPA and Financial Planner, as mortgage planners are not tax advisers and we do not recommend investments like financial planners do, but we work with both to help you make the most of your mortgage. See my other posts about how the top financial planners and Fed Reserve Board Members are espousing these mortgage planning strategies.

If you would like to "run the numbers" for your college savings plan and a referral to a good financial planner, please call me today.

Why You Need A Certified Mortgage Planning Specialist

Mary Anne Daly, Queen of the Loan (Pacific Mortgage & TMP CA DRE Lic #01380812) — Sun, 30 Mar 2008 05:36:53 -0500

Things have changed in the lending world. Now more than ever, you want to be sure you're working with a lender who is dedicated to expanding their knowledge, and commited to providing you with a personalized mortgage plan that integrates your mortgage into your whole financial plan.

The Certified Mortgage Planning Specialist is a graduate of the CMPS Institute. The institute maintains an informative website, (http://www.cmpsinstitute.org/public/menu) and here are some of the reasons the institute lists to choose a CMPS:

Why do you need a Certified Mortgage Planning Specialist?

CMPS professionals have demonstrated financial knowledge and expertise regarding the tax and financial planning implications of various mortgage and real estate investment strategies. Therefore, CMPS professionals can better advise you when it comes to:
- Your single largest debt - mortgage
- Your single largest asset - real estate equity
- Life Planning needs and goals - cash flow
CMPS professionals are trained to help you increase your cash flow
CMPS professionals are skilled in helping you become debt free sooner and achieve true financial freedom
CMPS professionals are equipped to help you profitably invest in real estate and protect you from mortgage and real estate investment scams
CMPS professionals are qualified to help you implement mortgage and real estate equity strategies to help you save money on income, capital gains and estate taxes
CMPS professionals are committed to help you improve your credit score and get the best deal on your financing
CMPS professionals are able to explain the benefits and drawbacks of paying off your mortgage before retirement, and help you to determine which strategy works best under your individual circumstances
CMPS professionals can guide you in implementing the best home equity and mortgage strategies for divorce situations
CMPS professionals can help you implement a financial strategy to finance your children's education
CMPS professionals are equipped to better enable you to financially care for your elderly parents
CMPS professionals are able to help you implement beneficial mortgage and real estate equity strategies before and during job or career changes
CMPS professionals can help empower you to start or sell your business by implementing viable mortgage and real estate equity strategies
CMPS professionals are able to recommend the proper financial strategies when you are ready to buy or build a vacation home
CMPS professionals are committed, qualified and equipped to help you implement mortgage, cash flow and home equity strategies to build and conserve wealth when buying a home or refinancing your mortgage
CMPS professionals have pledged to follow a Code of Ethics

Sometimes I feel like a Miracle Worker- Or Why I Love My Job!

Mary Anne Daly, Queen of the Loan (Pacific Mortgage & TMP CA DRE Lic #01380812) — Wed, 26 Mar 2008 20:50:30 -0500

I love my job. I get a thrill showing people how to do what others would say is impossible, especially when it comes to the ownership of Real Estate.

I have learned in life that the old adage is true: "Nothing ventured, nothing gained" especially when it comes to real estate. And until you run the numbers for people, they truly don’t know what is possible.

I have a friend here in the San Francisco Bay Area who came into an inheritance and she called me for advice about buying real estate. Blithe* had already started looking at property. Not just any property, she is a recording artist and needed a large place to house herself and allow her to set up a recording studio.

This gal is a multi-talented woman who can tile a bathroom, build an instrument, write songs, play multiple instruments, record the music and (at one time) walk a tightrope and skateboard on her hands! My husband had signed her to her first major recording deal back in the 70's on Elektra Records. The blonde genius was in Joni Mitchell's league. I'll let my husband blog about that one sometime.

Back to the present day and our story: She wanted to know how much to put down and what her total payments would be. Since I am a mortgage planner we would start by looking at her income, assets, and credit, amount of time she planned to keep the property, as well as the property’s sales price, income and operating expenses.

Now here come the part where the process would end with your average mortgage broker: I ran her credit and came up with a score in the 500’s. We discussed her credit score and it turned out that her mother, who had recently died had handled the finances in their joint business and she was naturally devastated when her mother was killed in a car accident and had missed enough payments to send her credit into the subprime zone.

So I said "Blithe, the only way you are going to buy a property is to find a seller who will loan you the money". I didn't think about it at the time, but that advice would have stopped a lot of buyers in their tracks. But sending her off to find seller financing seemed so natural, I mean this woman had thus far accomplished anything she set her mind to.

So off she went looking at property and soon called me to say she found something, her dream place, a former cigar factory, and it was owned by a visual artist. When she later met the seller, they bonded because they are both mature strong women artists.

To make a long story short, since I was a licensed Realtor way back when I was 18 years old, I gave her some language for her offer including an interest rate that was a bit higher than the going rate due to her credit score and to compensate the seller for carrying the loan. Her Realtor, another amazing woman put it in writing, and handled the protracted negotiations.

The seller agreed to carry the loan and my friend put 20% down and is now the proud owner of her dream home, a 12,000 square foot building in Oakland, CA with a few apartments configured inside that are filled with creative people like herself and finally, enough room for the instruments, art, furniture, and clothes she's been collecting for many years. And to top it off, it even cash flowed. She had always dreamed of having a space like this of her own and finally it became a reality.

The seller's attorney required that Blithe take out an insurance policy for the loan balance that named the seller as beneficiary and he also required her to put a few years payments in a separate account as a safeguard he insisted upon to protect the seller.

You might ask, "Why does the seller need that? She could just foreclose if Blithe missed payments." True, but no one wants to go through that hassle and since her credit score was low, the seller’s attorney was looking out for his client.

I did not make a commission on the financing, but I did do a loan for her brother and I’m proud to have helped my friend realize a lifelong dream.

Now I’m working on getting my neighbor to buy the home she rents by asking the seller to credit part or all of her five years rent towards the down payment. She qualifies for conventional financing and will most likely go that route, but I did show her how to propose to the seller that he carry financing too. Like I said, “nothing ventured, nothing gained.” Stay tuned!

*Name changed to protect her privacy."

Marin County Home Sales Survey from 2005-2007

Mary Anne Daly, Queen of the Loan (Pacific Mortgage & TMP CA DRE Lic #01380812) — Thu, 20 Mar 2008 17:00:42 -0500

Here's a nice survey of Marin County home sales from 2005-2007 co-authored by my appraiser Chantal Griffin, of Griffin Appraisals. The survey goes town-by-town and divides the properties into single family and townhomes and further divides sales into price ranges.

The local newspapers often report the median price for the county, and how it has changed over the last year, but that doesn't tell the whole picture for the county and can be misleading. For instance Novato sales are quite different from Mill Valley's, not only in price but days on the market. Novato, being at the northern end of the county was the last area to see appreciation during the last few years and the first to see values decline. Mill Valley, one of the jewels of Marin is one of the most desireable places to live due to it's proximity to San Francisco, great schools, neighborhoods, and beautiful downtown, not to mention redwood trees, and trails.

A sample headline for a summary of Mill Valley home sales is: "MILL VALLEY SINGLE FAMILY HOMES BUCK NATIONAL TREND. Values hold or increase in stable market."

The report also states for Mill Valley, that "the median selling price has increased from $1,177,500 in 2005 to $1,220,000 in 2006 to $1,275,000 in 2007. These represent year-to-year increases of 3.6 percent in 2006 and 4.5 percent for the year 2007. Median days on market have increased only slightly going from 31 to 34 to 36 for 2007."

Also provided are the number of sales by town per year and price increase/decrease as a percentage change from the prior years and days on the market.

The cities included in the report are: Belvedere, Corte Madera, Fairfax, Greenbrae, Kentfield, Larkspur, Mill Valley, Novato, Ross, San Anselmo, San Rafael, Sausalito and TIburon. Marin City is not represented in the report.

If you're shopping for a home or considering listing your home for sale in Marin, or just curious about values in the county, this report provides a lot of data and is organized in a readable "magazine" format.

http://www.sfmarin.com/cgi-bin/password_manager/program_files/omlsmarpricing.pl?search1=maryomarin@yahoo.com

Are You Wasting Money by Accelerating Payments on your Home Mortgage?

Mary Anne Daly, Queen of the Loan (Pacific Mortgage & TMP CA DRE Lic #01380812) — Wed, 19 Mar 2008 17:04:39 -0500

In this article from Best Life Magazine, a Federal Reserve Board member shows us why (with a complex mathematical model) it's better to invest in your retirement account than to accelerate payments on your home mortgage.

This is a key strategy that mortgage planners teach their clients. When you compare the difference between putting more money down on your residence or putting less down and investing your cash in a fully diversified portfolio, and contributing monthly to that portfolio instead of prepaying the mortgage, the numbers show what high net worth homeowners know and have been practicing for years. It's the difference between just becoming debt free (old strategy of paying off your mortgage) and creating wealth, and being able to pay off your mortgage from your assets.

Certified Mortgage Planning Specialists are trained to advise homeowners on these strategies and more importantly to discern if a homeowner is a candidate for equity management.

http://www.bestlifeonline.com/cms/publish/finance/Tax-Free_Wealth.shtml

Top 10 Reasons To Carry a Big Long Term Mortgage

Mary Anne Daly, Queen of the Loan (Pacific Mortgage & TMP CA DRE Lic #01380812) — Wed, 19 Mar 2008 16:46:20 -0500

When I show my clients why they should not pay off their homes, they usually thank me for the information. The data is sound, but what I like about sharing this information is that it's not just mortgage planners like me who have figured out why this makes so much sense, but top financial planners, one of the Federal Reserve board members and Consumer Reports.

Follow the link below to read Ric Edelman's Top 10 Reasons to Carry a Big Long Term Mortgage. Obviously this strategy is NOT for people who do not have savings habits, reserves and a steady income, but for many homeowners, this information is a revelation and I'm always thanked for passing it along.

http://www.ricedelman.com/cs/education/article?articleId=232

New Conforming Limits- Here's what the Loan Programs Look Like So Far...

Mary Anne Daly, Queen of the Loan (Pacific Mortgage & TMP CA DRE Lic #01380812) — Wed, 12 Mar 2008 15:50:12 -0500

What kind of loans can one get under the new Fannie Mae "New conforming Limit" or "Junbo Lite"?

Unfortunately, not "interest only" for fixed rate mortgages, that's too bad because the 30 YR Fixed w/ 10 Year Interest Only is an excellent product.

The Fannie Mae website, under "Eligible Product Types" lists the products below and it also states: "Eligible ARM plans To Be Announced"

We'll see these products initially:

• Fixed Rate Mortgages, fully amortizing mortgages with 15- or 30-year term (No Interest Only on these two programs)

• 5/1 ARM, fully amortizing mortgages with 30-year term, LIBOR index, 5/2/5 caps
• 5/1 ARM, interest-only (IO) for 10 years with 30-year term, LIBOR index, 5/2/5 caps

In another page on their site:

https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2008/0805.pdf

there is a mention that more ARMS may be coming:

Note: Additional information about the origination (and delivery) of ARM loans, including specific ARM plans that must be used, will be forthcoming in a future announcement.

Here is the Fannie Mae Jumbo Matrix for more details about the loan underwriting guidelines:

https://www.efanniemae.com/sf/mortgageproducts/pdf/jumbomatrix.pdf

As of this writing (3/12/08) most lenders have not yet released pricing on the "Jumbo Lite" programs, so stay tuned!

Yikes! Are You Relying on Zillow.com?

Mary Anne Daly, Queen of the Loan (Pacific Mortgage & TMP CA DRE Lic #01380812) — Tue, 11 Mar 2008 02:15:26 -0500

How much is my house worth?

Many people wondering just that have come to accept Zillow.com's "Zestimates" as accurate, and the site even claims 90% accuracy for the San Francisco Bay Area.

Our video tells another story!

Feel free to pass this along to anyone who might be involved in a real estate transaction*.

Before they say "Uh, Oh.....I believed Zillow!"

*Click the little envelope below to share this video.

If you don't see the video, go here:

https://www.thinkbigworksmall.com/public/showArchiveVideo/833/569