Real Estate and Mortgage Consultant

Why won't they fund my loan? Common Red Flags

Real Estate Consultant — Thu, 03 Dec 2009 10:22:01 -0600

Someone had asked me once to identify all of the reasons that a lender might find to not fund a particular loan. He said review it and tell me what are the issues that would be raised. So here is the good list of those reasons for a potential denial of a loan. This can help borrowers identify what the would assist them in obtaining a loan. I hope it helps those overcome those issues and create successful transactions for true long term homeownership.

Link to Fannie Mae Common Red Flags

Common Red Flags

Resources to Help You Combat Mortgage Fraud

The following is a list of Common Red Flags that may indicate mortgage fraud.

Inconsistencies in the loan file are often a tip off that the file contains misrepresentations. The presence of one or more of these red flags in a file does not necessarily mean that there was fraudulent intent. However, several red flags in a file may signal a fraudulent transaction.

High-level Red Flags

Social Security number discrepancies within the loan file

Address discrepancies within the loan file

Verifications addressed to a specific party's attention

Verifications completed on the same day they were ordered

Verifications completed on weekend or holiday

Documentation includes deletions, correction fluid, or other alteration

Numbers on the documentation appear to be "squeezed" due to alteration

Different handwriting or type styles within a document

Excessive number of AUS submissions

Mortgage Application

Significant or contradictory changes from handwritten to typed application

Unsigned or undated application

Employer's address shown only as a post office box

Loan purpose is cash-out refinance on a recently acquired property

Buyer currently resides in subject property

Same telephone number for applicant and employer

Extreme payment shock may signal straw buyer and/or inflated income

Purchaser of investment property doesn't own residence

Sales Contract

Non arms-length transaction: seller is real estate broker, relative, employer, etc.

Seller is not currently reflected on title

Purchaser is not the applicant

Purchaser(s) deleted from/added to sales contract

No real estate agent is involved

Power of Attorney is used

Second mortgage is indicated, but not disclosed on the application

Earnest money deposit equals the entire down payment, or is an odd amount

Multiple deposit checks have inconsistent dates, i.e., #303 dated 10/1, #299 dated 11/1

Name and/or address on earnest money deposit check differ from buyer

Real estate commission is excessive

Contract dated after credit documents

Contract is "boiler plate" with limited fill-in-the-blank terms, not reflective of a true negotiation

Credit Report

No credit history or "thin" credit files

Invalid Social Security number or variance from that on other documents

Duplicate Social Security number or additional user of Social Security number

Recently issued Social Security number

Liabilities shown on credit report that are not on mortgage application

Length of established credit is not consistent with applicant's age

Credit patterns are inconsistent with income & lifestyle

All trade lines opened at the same time

Authorized user accounts have superior payment histories

Significant differences between original and new or supplemental credit reports

Also Known As (AKA) or Doing Business As (DBA) indicated

Numerous recent inquiries

Missing pages and/or supplements

Employment discrepancies

Social Security alerts

Employment and Income Documentation

Applicant's job title is generic, e.g., "manager," "Vice President"

Employer's address is a post office box, the property address, or applicant's current residence

Applicant's residence is (will be) in location remote from employer

Employer name is similar to a party to the transaction, e.g., utilizes applicant's initials

Employer unable to be contacted

Year-to-date or past-year earnings are even dollar amounts

Withholding not calculated correctly (check FICA tables)

Withholding totals don't foot from pay advice to pay advice

Pay period dates overlap and/or don't correspond with other documentation

Abnormalities in paycheck numbering

Handwritten VOE, pay stubs, or W-2 forms

W-2 form presented is not the employee's copy

Employer's identification number has a format other than 12-3456789

Income appears to be out of line with type of employment

Self-employed applicant does not make estimated tax payments

Real estate taxes or mortgage interest claimed, but no ownership of real property disclosed

Tax returns not signed or dated

High income applicant without paid preparer

Paid preparer signs taxpayer's copy of tax returns

Interest and dividend income don't substantiate assets

Applicant reports substantial income but has no cash in bank

Large increase in housing expense

Reasonableness test: income appears to be out of line with type of employment, applicant age, education and/or lifestyle

Asset Documentation

Down payment source is other than deposits (gift, sale of personal property)

Applicant's salary doesn't support savings on deposit

Applicant doesn't utilize traditional banking institutions

Pattern of loyalty to financial institutions other than the subject lender

Balances are greater than the FDIC, SIPC insured limits

High asset applicant's investments are not diversified

Excessive balance maintained in checking account

Dates of bank statements are unusual or out of sequence

Recently deposited funds without a plausible paper-trail or explanation

Bank account ownership includes unknown parties

Balances verified as even dollar amounts

Two-month average balance is equal to present balance

Source of earnest money is not apparent

Earnest money isn't reflected in account withdrawals

Earnest money is from a bank or account with no relationship to the applicant

Bank statements do not reflect deposits consistent with income

Reasonableness Test: Assets appear to be out of line with type of employment, applicant age, education and/or lifestyle

Appraisal

Appraisal ordered by a party to the transaction

Occupant shown to be tenant or unknown

Owner is someone other than seller shown on sales contract

Appraisal indicates transaction is a refinance, but other documentation reflects a purchase

Purchase price is substantially higher than predominant market value

Purchase price is substantially lower than predominant market value

Subject property obsolescence is minimized

Large positive adjustments made to comparable properties

Comparables' sales prices don't bracket the subject's value

Comparable sales are not similar in style, size and amenity

Dated sales used as comparable sales

New construction / Condo conversion: All comparable sales located in subject development

Comparable properties are a significant distance from the subject, or located across neighborhood boundaries (main arteries, waterways, etc.)

Map scale distorts distance of comparable properties

"For Rent" sign appears in photographs

Photos appear to be taken from an awkward or unusual standpoint

Address reflected in photos does not match property address

Weather conditions in photos inconsistent with average marketing time, date of appraisal

Appraisal dated before sales contract

Significant appreciation in short period of time

Prior sales are listed for subject and/or comparables without adequate explanation

Title

Prepared for and/or mailed to a party other than the lender

Evidence of financial strain may indicate a compromised sale transaction (flip, foreclosure rescue, straw buyer refinance, etc.), or might suggest undisclosed credit problems in the case of a refinance

Income tax, judgments or similar liens recorded

Delinquent property taxes

Notice of default or modification agreement recorded

Seller not on title

Seller owned property for short time

Buyer has pre-existing financial interest in the property

Date and amount of existing encumbrances don't make sense

Chain of title includes an interested party such as realtor or appraiser

Buyer and seller have similar names (property flips often utilize family members as straw buyers)

Owner Occupancy

Purchase Transactions:

Real estate listed on application, yet applicant is a renter

Applicant intends to lease current residence

Significant or unrealistic commute distance

Applicant is downgrading from a larger or more expensive house

Sales contract is subject to an existing lease

Occupancy affidavits reflect applicant does not intend to occupy

New homeowner's insurance is a rental policy (declarations page)

Refinance Transactions:

Rental property listed on application is more expensive than subject property

Different mailing address on applicant's bank statements, pay advices, etc.

Different address reported on credit report

Significant or unrealistic commute distance

Appraisal reflects vacant or tenant occupancy

Occupancy affidavits reflect applicant does not intend to occupy

Homeowner's insurance is a rental policy (declarations page)

Reverse directory does not disclose subject property address

HUD-1 Settlement Statement

Borrower or seller name is different than on sales contract and title

Sales price is inconsistent with contract, loan approval and/or appraisal

Excessive earnest money or builder deposit

Earnest money deposit is inconsistent with sales contract and/or application

Payouts to unknown parties

Refinance pays off previously undisclosed liens

Excessive sales commissions

Excessive fees and/or points

Seller-paid closing costs, especially for purchaser with sufficient assets for down payment

Cash proceeds to borrower are inconsistent with final application and loan approval

Foreclosure Rescue Red Flags

The borrower was advised by a foreclosure assistance consultant that they should avoid contact with their servicer

The borrower has paid someone to negotiate with the servicer on their behalf

The borrower states that they are sending their mortgage payments to a third party

Borrower receives a purchase offer that is greater than the asking price

Borrower states that they will be renting back from new owner

Cash-back at closing to the delinquent borrower, or disbursements that have not been expressly approved by the servicer

The borrower has quit claimed title to a third party at the advice of a foreclosure assistance consultant

Short Sale Fraud Red Flags

Sudden default, no workout discussions, and immediate offer at short sale price

Ambiguous or conflicting reasons for default

Short sale offer is from a related party

Link to Fannie Mae Common Red Flags

Do Credit Repair Companies Actually Work?

Real Estate Consultant — Tue, 13 Oct 2009 05:01:05 -0500

Do Credit Repair Companies Actually Work?

Professional credit repair companies do not advertise on the freeway off-ramps.

Look for a company from a referral or one that is worthy of your referral. It's an amazing feeling to be able to finance a car or home, be approved for a credit card or even be able to apply for a job without worrying about your credit rating. With a good credit rating, you can finance items with a lower interest rate and a payment that your family can afford.

The Fair Credit Reporting Act gives you the legal rights. Utilizes a company state-of-the-art computer technology so that you keep up and view your progress. Find a company has a tracking system that will not allow anything to "slip through the cracks." You need to find a company with extensive computer backed knowledge of the Fair Credit Reporting Act and the Fair Debt Collections Practice Act. Use a firm that has many years of experience and time proven letter writing, forms and Lawful Notices. A good service can remove inaccurate negative, unverifiable and incomplete information from your credit reports with all three major credit reporting agencies.

This includes removing: Bankruptcies, Foreclosures, Tax Liens, Civil Liens, Student Loans, Judgments, Repossessions, Charge Offs, Medical Bills, Slow Pays, Inquiries, Old Information and Late Payments.

The credit bureaus will tell you that it is easier and less expensive to do it yourself. While it may be true that you have the right to repair your credit yourself, many individuals do not have the time, experience and organizational savvy necessary to deal with bureaucracies. You must also spend hours of study to gain a working knowledge of the consumer laws available to you. Many who start repairing their credit turn to a credit repair company after months of work.

Once you begin it is a work in progress and you must be committed to sending your updates as you get them. You want to work with a company that keeps in touch with you and you can monitor your progress of the phone and on your computer. Continious customer service is necessary for any professional company. Look for a referral based company and expect your counselor to be proactive and professional.

After utilizing a solid credit restoration service, many clients have been able to buy a new home, a new car, adopt a baby or just meet the credit needs of their family. Your good credit in todays world is right up there next to food. Many more transactions today are being denied because of credit issues. Take your credit profile seriously.

Now, here is the pitch. www.4cmax.com TRW Credit Group has helped thousands of people restore their credit and raise their credit Score. There are companies out there that guarantee results, but they do not care about you or your credit situation. If you don't send your reports back to them, they don't care because they already have your money. We stay in contact with you to make sure you are sending your credit reports to us so we can continue disputing the information. We charge a one-time fee for our complete service. There are no ongoing fees and we will refund your money if we don't improve your credit profile!!!

Pitfalls and Solutions for Your Short Sale Protect Yourself

Real Estate Consultant — Tue, 22 Sep 2009 17:44:43 -0500

Pitfalls & Solutions

As a homeowner considering a short sale, it is important you understand the process. Following are some of the most common mistakes agents and homeowners make when handling a short sale. Remember 100% of the agents will tell you they understand the process and may have taken a class on the subject. 10% actually do the work and close those most difficult transactions. 86% of short sale listings become foreclosures. Do not be a statistic. Call me to discuss your specific situation.

Pitfall: The Buyer's Contract is Not Strong Enough
Especially in our current economic climate, willingness to make an offer on a property does not mean that a buyer is truly qualified to purchase. The reality is that buyers need to be preapproved for financing, closing funds must be verified, and their ability to buy needs to be confirmed.

Solution: An Agent Familiar with Qualifying Buyers
Your agent should be familiar with what must be verified in order to qualify a buyer to submit an offer on your property. Otherwise, these offers may have little chance of closing. Don't risk this process with an uneducated agent who does not appreciate this aspect of short sales

Pitfall: The Buyer's Offer is Too Low
Many agents will encourage you to submit any offer that comes in. The reality is that a short sale is not the same as a fire sale. In order to have a legitimate chance of getting your deal approved, you must have an offer that is more attractive to the lender than a foreclosure

Solution: Proper Negotiation
The right agent will work with you to properly negotiate any offer that you receive to get the ‘highest and best' from each potential buyer. This ensures you are presenting the best possible solution to your lender.

Pitfall: Your Deal is Not Submitted Properly
If you do not follow the directions you receive for submission, then you are expecting an over-worked, under-staffed department to go out of their way to handle your file. There is very little likelihood of this situation working out in your favor.

Solution: Follow Instructions Closely
If you are instructed to fax your file, fax it and send a backup copy in the mail. If you are instructed to mail two copies, mail two copies. When you reach the point of having a contract, all your information, and a completed proposal, you do not want your deal to fall apart because no one sees it.

Pitfall: There Isn't Enough Time
It is critical that your agent understands the foreclosure laws in your area. They should be able to show you an estimated timeline for the process, from start to closing. In addition, they should know how to communicate with your lender. Certain information can be provided to lenders to postpone your foreclosure for weeks or months in order to negotiate a sale.

Solution: Provide Accurate and Useful Information
Make sure you provide your agent accurate information as to exactly how many payments you have missed and any correspondence you have received from your lender. This will allow your agent to understand your situation and work to improve it.

Pitfall: There has been Inadequate Follow-up and Communication
As your property goes through each stage of the short sale process, an agent can jeopardize the transaction by not properly communicating with everyone involved. As the homeowner, you may not know that your file has been delayed, and that you again may run out of time to close and avoid foreclosure.

Solution: Select an Agent With Experience
The right agent knows exactly how to follow up to ensure that your lender's issues are addressed in a timely manner, and will make certain you do not have unnecessary delays.

Pitfall: Your Short Sale Proposal is Incomplete
This is one of the most frequently seen causes for the rejection of short sales proposals. Most agents do not understand the short sale process and what your lender will be looking for

Solution: Understand All Aspects of the Process
Your agent should understand the short sale process in detail and be able to explain it clearly. The agent should also be able to communicate effectively with both you and lenders to produce a complete and cohesive proposal.

Pitfall: Your Property is Priced Incorrectly
This is the most common mistake made with all properties, and the most common reason a property doesn't sell.

Solution: Agent Providing Understanding and Transparency Your real estate agent will go through a detailed listing price strategy with you, allowing you to see exactly where your property should be priced based on its current condition, sales in your area, and most importantly, how much time you have left to sell.

In conclusion, While these pitfalls may seem troublesome, the right agent can help you navigate your way to a successful closing. Don't endanger your financial future and the potential sale of your home with an agent who does not fully understand the process. Contact me to discuss your specific situation at no charge. Real experience is what this process requires. We understand what you are going through, and are here to serve and help save your family's interests. Remember, 100% of agents will tell you they know everything to know about this process. Reality is that unless you are engaged daily in this process that is the only way to know what is happening regarding these tricky real estate transactions. Mitigations are not traditional real estate sales and there are few real "experts".

Short Sale Myths

Real Estate Consultant — Tue, 22 Sep 2009 17:31:44 -0500

Short Sale Myths

A short sale can be an excellent solution for homeowners who must sell and owe more on their homes than they are worth. Unfortunately, a number of myths about short sales have developed, and it is important to understand the reality of this process should you find it meets your current needs.

Myth #1 - The Bank Would Rather Foreclose than Bother with a Short Sale

This is one of the most common misconceptions. The reality is that banks do not want to foreclose on your property because the foreclosure process is incredibly costly. Banks, investors, and even the federal government have all publicly stated that if a person is qualified for a short sale, the deal needs to be considered. Overwhelmingly, banks receive more on their investment through a short sale than a foreclosure.

The qualifications for a short sale include:

Financial Hardship - There is a situation causing you to have trouble affording your mortgage.
Monthly Income Shortfall - "You have more month than money." A lender will want to see that you cannot afford, or soon will not be able to afford your mortgage.
Insolvency - The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.

Myth #2 - You Must Be Behind on Your Mortgage to Negotiate a Short Sale

While this may have previously been the case, today lenders are looking for verifiable hardship, monthly cash flow shortfall, or pending shortfall and insolvency.

If you meet these three requirements and believe that you soon may be unable to afford your mortgage, act immediately. Any delay could limit your options. Do not wait until the countdown clock to foreclosure has started and you have even less time left.

Myth #3 - There is Not Enough Time to Negotiate a Short Sale Before My Foreclosure

This is a myth that probably hurts homeowners the most. Many do not realize that foreclosure is a process, and that there is time to make decisions that may result in better outcomes.

The foreclosing party-in most cases a lender-can stall a foreclosure up to the final day of the process. Today, many lenders will stall a foreclosure with as little as a phone call from you explaining that you are trying to sell, and almost all lenders will stall a foreclosure with a legitimate contract. For real estate professionals who understand foreclosures and short sales, there is time available until the foreclosure process is complete.

Myth #4 - Listing My Home as a Short Sale is an Embarrassment

It is understandable to have reservations about letting the world know that you owe more on your home than it is worth. However, according to recent estimates, one out of five homeowners in the U.S. is in the same situation. You are to be congratulated for admitting you need help, taking action, and finding a professional who can work with you toward a solution.

With recent estimates showing 40-60% of U.S. sales will be short sales or foreclosures, you are not alone.

Myth #5 - Short Sales are Impossible and Never Get Approved

This is a complete falsehood. Are short sales more difficult to execute? Yes. Do you, as a homeowner, need to learn about a new process? Yes. Are they impossible? Absolutely not.

For example, agents with the Certified Distressed Property Expert® (CDPE) Designation receive thousands of short sale approvals on a monthly basis. These professionals have undergone extensive training in methods to help homeowners in distress and process short sales. While there are no guarantees in any transaction, more and more short sales are being approved regularly. This is far from an impossible process.

Myth #6 - Banks are Waiting on a Bailout and Not Accepting Short Sales

You may have heard this, but the reality is that banks (and the U.S. government) are trying to do anything they can, within reason, to avoid foreclosing on properties. It is preposterous to believe they would deny a short sale in hopes that some future legislation would pass and pay them for losses.

Today, more banks are aggressively pursuing short sales and working with agents who understand how to process them. Freddie Mac recently hosted a national training Webinar for real estate agents where they expressly stated the organizational goal of "eliminating distressed assets through modification or short sale."

Myth #7 - Buyers are Not Interested in Short Sale Properties

This is a myth that potential sellers hear all the time. Thankfully, this is just not true. In fact, many agents are getting calls from buyers who say they only want to look at foreclosure and short sales.

For buyers, short sales and foreclosures have become synonymous with "good deals." More specifically, international buyers are targeting these properties. Listing with an experienced agent who is educated in the short sale process will provide you with a great chance of quickly seeing a contract on your property.

In conclusion, While these pitfalls may seem troublesome, the right agent can help you navigate your way to a successful closing. Don't endanger your financial future and the potential sale of your home with an agent who does not fully understand the process. Contact me to discuss your specific situation at no charge. Real experience is what this process requires. We understand what you are going through, and are here to serve and help save your family's interests. Remember, 100% of agents will tell you they know everything to know about this process. Reality is that unless you are engaged daily in this process that is the only way to know what is happening regarding these tricky real estate transactions. Mitigations are not traditional real estate sales and there are few real "experts".

AnnualCreditReport.com Is It Really Free? How Does It Work?

Real Estate Consultant — Wed, 28 May 2008 14:18:34 -0500

Credit Repair

A home-buying consulting business that offers credit repair and home-buying consulting services has agreed to settle with the Federal Trade Commission for alleged federal law violations, including illegally charging an advance fee for credit repair and falsely claiming that they can remove negative information from consumers' credit reports, even if the information is accurate and timely.

The Federal Trade Commission advises that only time, a conscious effort, and a personal debt repayment plan can improve your credit report. The first step is to learn what information is in your credit report. If you find errors or mistakes, federal law gives you the right to have them corrected - free of charge. Federal law requires that the nationwide consumer reporting companies - Equifax, Experian, and TransUnion - provide you with a free copy of your credit report once every 12 months, if you ask for it. To order your free report, visit annualcreditreport.com, call 1-877-322-8228, or complete and mail the Annual Credit Report Request Form. Other credit repair information is available at http://www.ftc.gov.

Mortgage Market Report for Wednesday May 28th, 2008

Real Estate Consultant — Wed, 28 May 2008 10:00:41 -0500

Interest Rate Report for Wednesday May 28, 2008

Mortgage bonds have located a bottom at the important 200 day moving average. If this level of support is broken then this level will act as the new ceiling. It is likely that we will see some recovery if bond prices lift off this strong level of support. These are technical signals but they are most often correct.

The surprisely improved reading in durable goods gave stocks a modest boost and added more selling pressure on mortgage bonds.

Today the Treasury Department will auction off $30 billion of 2 year notes and this may sway the markets later in the day.

For now we are floating as we see how the floor of support at the 200 day moving average plays out.

My business is built on solid advice not just price.

Thank you for listening to www.ContactHerrick.com . We will have another report for you, your family, your friends and your important business contacts later this week.

A quote from JFK

"We need men who can dream of things that never were."

Mortgage Market Report for Wednesday May 21st, 2008

Real Estate Consultant — Wed, 21 May 2008 15:32:23 -0500

Interest Rate Report for Wednesday May 21, 2008

FOMC Minutes were released today. They forecast weak economic times ahead. The see higher inflation and higher unemployment. They project no interest rate cuts even if the economy continues to slow.

Stocks pare losses - bonds move lower. Bonds slide from earlier gains on inflation concerns as oil trades at a record $132 a barrel.

Mortgage Bonds open lower as traders look to cash in on recent gains. Locking in on rates is recommended as the markets digest the news from the Fed.

My business is built on solid advice not just price.

Thank you for listening to www.ContactHerrick.com . We will have another report for you, your family, your friends and your important business contacts later this week.

A quote from JFK

"The time to repair the roof is when the sun is shining."

Roger Herrick

Mortgage Broker

www.ContactHerrick.com

Interest Rate Report for Tuesday May 20th, 2008

Real Estate Consultant — Tue, 20 May 2008 11:16:14 -0500

Interest Rate Report for Tuesday May 20, 2008

Mortgage Bonds lose some momentum from previous highs but are still in positive territory. Stocks in the red after hitting resistance levels yesterday.

Oil hits record $129.58 a barrel in NYMEX trading - stocks suffer. Investors flock to bonds.

Home Depot posts a 66% drop in net income due to the slowing economy and housing slump.

We recommend floating but be prepared to take advantage of these recent price improvements. Because referral and repeat business built on solid advice not just price.

Thank you for listening to www.ContactHerrick.com . We will have another report for you, your family, your friends and your important business contacts later this week.

A quote from Rosalynn Carter

"You have to have confidence in your ability, and then be tough enough to follow through."

Roger Herrick

Mortgage Broker

www.ContactHerrick.com

Interest Rate Report for Saturday May 17th, 2008

Real Estate Consultant — Sat, 17 May 2008 10:28:06 -0500

Mortgage Market Report for Saturday May 17^th, 2008

The University of Michigan's Consumer Sentiment was reported at worse than expectations. This has been the worst number in 26 years.

Some better than expected news in the Housing market as Housing Starts had modest up-tick in newly constructed homes is welcomed news, but the cost of materials has risen dramatically and may be a further drag on this sector in the months ahead.

Technically, Mortgage Bonds have powered through a triple layer of resistance at the 25, 50 and 100-day Moving Averages. Stocks are battling their 200-day MA ceiling, and if they are turned lower, bonds should rally further - we feel this will happen. And that would give us a run towards the high levels for another refinance opportunity. Be prepared, as these opportunities are typically brief.

Treasury Secretary Henry Paulson then painted a pretty rosy picture for the economy and credit markets when he spoke on the U.S. credit and housing markets at a business forum, in Washington, D.C. Paulson stated the financial markets are recovering nicely from the recent turmoil and that the economy should rebound later in this year.

Because my business is built on advice and not just price...and given the current market conditions, I am recommending floating and prepare to take advantage of improving home loan rates."

Thank you for listening to www.ContactHerrick.com . We will have another report for you, your family, your friends and your important business contacts later this week.

A quote from Joseph Addison

"Man is distinguished from all other creatures by the faculty of laughter."

Roger Herrick

Mortgage Broker

www.ContactHerrick.com

Mortgage Market Report for Tuesday May 13th, 2008

Real Estate Consultant — Tue, 13 May 2008 10:44:42 -0500

Mortgage Market Report for Tuesday May 13, 2008

A better than expected Retail Sales Report are putting a downward pressure on mortgage bonds. Confirming this were sales from Wal-Mart with a better than expected first-quarter results. But it is expected that the second quarter will not be as good due to rising food and energy prices. Just a fill up at the gas station will tell you that. However, the consumer continues to spend for now.

Federal Reserve Chairman Big Ben Bernanke spoke this morning and said financial markets remain unsettled and the Central Bank will increase its auctions of cash to banks as needed. He went on to say "while markets have improved, they remain far from normal and we stand ready to increase the size of the auctions if further warranted by financial developments''.

For now a carefully floating bias may be prudent. The Bond bounced higher off the floor of support twice in the past 30 days and has done so thus far today. The trend is usually your friend.

Thank you for listening to www.ContactHerrick.com . We will have another report for you, your family, your friends and your important business contacts later this week.

A quote from Evan Esar

"Character is what you have left when you've lost everything you can lose."

Mortgage Market Report for Friday May 9th, 2008

Real Estate Consultant — Sat, 10 May 2008 08:54:45 -0500

Mortgage Market Report for Friday May 9, 2008

Mortgage bonds could not capitalize on the weakness in stocks. Soaring oil prices reached $126.00 per barrel. This created new concerns about inflation to close a tough week.

The mortgage lenders have been very tough on underwriting standards. Navigating these obstacles has been somewhat difficult even for the most credit worthy borrowers. The timelines for coming out of the difficult housing market is being dragged out even further.

Enough of the bad news. On the good news the rates are still very low and there are some great buys available for new purchases.

If your loan is prepared to lock it would be advisable to do so at this time to protect some of your recent gains.

Thank you for listening to http://www.contactherrick.com/ Please check back weekly for another report for you, your family, your friends and your important business contacts.

This is a quote from Napoleon Hill

"First comes thought; then organization of that thought, into ideas and plans; then transformation of those plans into reality. The beginning, as you will observe, is in your imagination."

New Conforming Limit Disappointment

Real Estate Consultant — Mon, 05 May 2008 15:16:34 -0500

Mortgage Market Report for Monday May 5, 2008

Today Representative Barney Frank complained that the mortgage industry has done little over the past month to make higher-value loans available in costly housing markets, after Congress took steps to try to infuse more cash into the so-called jumbo market. He will hold a meeting on May 21^st. He is trying to find out why these mortgages remain difficult to obtain and continue to carry high interest rates despite the rules that took effect April 1^st.

"I am disappointed," Frank said in response to an audience question after a speech to a Mortgage Bankers Association convention. "We fought very hard to raise the loan limits for Fannie and Freddie, and there have been a lot of problems in implementation."

Frank said he called the hearing to "try to unstick" loans made under the new rules covering jumbo mortgages.

"There is a chain of people blaming each other, and we're going to call everybody in there into the hearing and find out why," Frank said.

To address the worst housing crisis in decades, the economic stimulus package that President Bush signed in February included a temporary increase in the cap on mortgages that Fannie and Freddie can purchase or guarantee, from $417,000 to $729,750 in high-cost markets. The change will be in effect through 2008.

The goal was to spark investor demand for securities made up of higher-value mortgages backed by Fannie and Freddie, which would have the effect of driving down interest rates on jumbo loans and spur home buying and refinancing activity.

The immediate impact was expected to be muted as investors in mortgage-related securities remain wary of making risky investments, even if they're tied to mortgages guaranteed by Fannie and Freddie.

Interest rates on jumbo mortgages have been running about a percentage point higher than those for conforming loans for months, and Frank said he's seen little evidence since the new lending flexibility kicked in that the rate spread has narrowed.

Jay Brinkman, chief economist for the Mortgage Bankers Association said, "You don't want to guess on the low side. If you make a mistake in this environment... you can take a serious price hit."

Brinkman also said mortgage lenders and investors in mortgage-backed securities need time to adjust to regional differences in the loan amount that Fannie and Freddie can guarantee under the new jumbo rules.

Another problem is that jumbo loans guaranteed under the newly enlarged caps aren't being sold in a key secondary market. Mortgages above the conforming loan limit of $417,000 will not be allowed to be blended into packages of other loans traded in the market.

Thank you for listening to contactherrick.com and we will have another report for you your family your friends and your important business contacts tomorrow.

However beautiful the strategy, you should occasionally look at the results.

Sir Winston Churchill

Mortgage Market Report for Monday April 28th, 2008

Real Estate Consultant — Mon, 28 Apr 2008 15:02:32 -0500

Mortgage Market Report for Monday April 28^th, 2008

This week's schedule has some of the biggest economic news of April.

On Wednesday, the Fed will release their Policy Statement and interest rate decision. For now, the Fed Fund Futures are pricing a 75% probability of a .25% cut to the Fed Funds Rate. As you know, Bond prices have reacted very poorly after Fed Rate cuts, due to the expectation that the cut will spur on inflation. If the Policy Statement leads Traders to believe this may be the final cut, it might just have the opposite effect, helping Bonds actually move higher with the reduced prospect of the Fed spurring future inflation.

Right on the heels of the Fed decision and statement, Thursday will bring the Fed's most favored gauge of consumer inflation, the Core Personal Consumption Expenditure Index (PCE). Especially since it will come after Fed day, it will be interesting to see the inflation read in light of the Fed's decision. And as if this weren't excitement enough for the week, Friday will bring the important Jobs Report, where early estimates are for a loss of 80,000 jobs.

Bonds will likely take their cues from action in the Stock market. For now, be prepared and ready to lock, as we have seen many daily reversals recently.

A quote from Benjamin Disraeli

"What we anticipate seldom occurs; what we least expected generally happens."

Roger Herrick

www.ContactHerrick.com

Mortgage Market Report for Thursday April 24th, 2008

Real Estate Consultant — Thu, 24 Apr 2008 12:23:56 -0500

Mortgage Market Report for Thursday April 24, 2008

The FOMC will announce its rate decision on April 30. Economists expect a 25bp cut to bring the Fed funds rate to 2.00%.

Greg Ip, the economist said. "The Fed is concerned that further easing could aggravate rising inflation expectations as food and oil prices soar to new records. Concerns about inflationary pressures "means the option of standing pat will likely also be on the table. Fed fund futures imply a 90% chance of a 25bp cut with a 10% chance of no change. Looking further out, futures show a 19.8% chance of a second cut at the June 25 FOMC meeting, unchanged from a day earlier."

These improvements take some time to factor into the long term fixed mortgage market. Initially, these reductions in short term rates create higher long term fixed securities. The markets have been continuously rocked by credit crunch and the housing bubble.

On the day mortgage bonds are down and rates are up. They are testing the new floor at the 200 day moving average.

Thank you for listening to http://www.contactherrick.com/ We will have another report for you your family, your friends and your important business contacts. Please check back

This is a quote from James Joyce.

"Mistakes are the portals of discovery."

Roger Herrick

http://www.contactherrick.com/

Mortgage Broker

Mortgage Market Report for Tuesday April 22nd, 2008

Real Estate Consultant — Tue, 22 Apr 2008 09:57:31 -0500

Mortgage Market Report for Tuesday April 22, 2008

The volatility continues this morning, on the heels of yesterday's incredibly wild session.

Yesterday Bonds were extremely volatile. Providing additional challenges for all of us attempting to navigate through these wild times, which include both enormous price swings as well as rapid directional changes in the market.

Yesterday's rise in the Mortgage Bonds was an announcement from The Bank of England, allowing Banks to swap Mortgage Bonds for government bonds, which creates greater value and stability for mortgage backed securities. Since this announcement did not effect Treasuries, they did not participate in the rally. This further illustrates the pitfalls of watching incorrect indicators like the 10-year Treasury Note.

Existing Home Sales for March was reported. It was not a great report but it was not worse than the market had expected.

McDonald's Corp 1st quarter earnings beats estimates. AT&T, the biggest US phone company, inline with analysts 1st quarter expectations. Oil hits yet another record high of $118.05.

Yesterday's move higher pushed Bond prices above both the 50 and 100-day Moving Averages, which may now serve as a floor of support.

Thank you for listening to http://www.contactherrick.com/ Please check back often for another report for you, your family, your friends and your important business contacts.

This is a quote from Maria Edgeworth,

"If we take care of the moments, the years will take care of themselves."

Roger Herrick

California Mortgage Broker

www.ContactHerrick.com

Mortgage Market Report for Thursday April 17th, 2008

Real Estate Consultant — Thu, 17 Apr 2008 18:04:52 -0500

Mortgage Market Report for Thursday April 17, 2008

Today the bonds started weak and ended strong. The daily swings are wild. After an ugly open bonds received a soft jobless claims report.

The mortgage bond market spent most of the day fighting its way back from far lower levels while the stock market mostly fizzled instead of sizzled due to "mixed" corporate earnings reports and poor economic news. Bonds also had to deal with comments made by noted inflation hawk Richard "Loose Lips" Fisher. The Dallas Fed President and voting FOMC member cut loose with a new warning "against inflating our way" out of the credit crisis and stated additional interest rate cuts "may just compound the problem."

However, the bond market successfully contended with a supply issue today as the Fed auctioned $25 billion in 28-day credit through its Term Securities Lending Facility (TSLF). This Fed financing tool provides banks with an option to pledge their illiquid mortgage-backed securities as collateral in exchange for US Treasuries that can sold and used for new loan funding. The major stock market indexes ended mostly flat but "mixed" with the Dow Jones Industrial Average gaining a measly point.

The next clear level of support is at the 200-day Moving Average, which lies about 70bp below current levels.

Thank you for listening to http://www.contactherrick.com/ Please check back weekly for another report for you, your family, your friends and your important business contacts.

A quote from George Burns

"You can't help getting older, but you don't have to get old."

Roger Herrick

http://www.contactherrick.com/

California Mortgage Broker

Mortgage Market Report for Friday April 11th, 2008

Real Estate Consultant — Fri, 11 Apr 2008 13:22:44 -0500

Mortgage Market Report for Friday April 11^th, 2008

Trading slows for stocks and bonds as the week draws to a close. Mortgage Bonds off the highs from this morning. Stocks still underwater but trying to battle back.

University of Michigan's Consumer Sentiment gives a snapshot of whether or not consumers feel like spending money. It came in much lower than expected at 63.2 vs consensus estimate of 69 - the lowest in 26 years.

Bonds have improved slightly on these reports on the decline in the stock market.

Thank you for listening to http://www.contactherrick.com/ Please check back weekly for another report for you, your family, your friends and your important business contacts.

A quote from Herbert Spencer

"The great aim of education is not knowledge but action."

Roger Herrick

http://www.contactherrick.com/

California Mortgage Broker

Mortgage Market Report for Monday April 7th, 2008

Real Estate Consultant — Mon, 07 Apr 2008 15:53:58 -0500

Mortgage Market Report for Monday April 7^th, 2008

Merrill Lynch says the worst of the credit crisis is over and Washington Mutual set to get $5 billion injection. Goldman Sachs bullish on mining stocks. . Bonds fall on the news while the optimistic attitude is spreading throughout Wall Street. However, the stock market rally fizzled. Bond players nervous as gold, crude and assorted commodities move higher citing inflation fears.

We recommend floating as again we are devloping a floor of support. Be prepared to lock if this floor of support is tested.

Due to technical difficulties we were unable to post your report on Friday.

Also, after further study of traffic patterns and client input I believe a weekly wrap up report will be posted and distributed. While this market changes I will have reports as needed. I appreciate your support as this mortgage market develops.

Thank you for listening to http://www.contactherrick.com/ Please check back weekly for another report for you, your family, your friends and your important business contacts.

A quote from Herbert Spencer

"Science is organized knowledge."

Roger Herrick

http://www.contactherrick.com/

California Mortgage Broker

Compliment Others Freely!!!

Real Estate Consultant — Mon, 07 Apr 2008 11:20:32 -0500

Compliment Others Freely

Remember the last time you were paid a sincere compliment? Remember how good it made you feel? Remember how you immediately wanted to do something in return for the person who complimented you?

Paying someone a sincere compliment is a great way to build a relationship or begin a conversation. It makes the other person feel important and acknowledges their uniqueness. We all need to feel this. We all like to hear complimentary comments to help reinforce our self image.

A compliment costs you nothing to give and can be the most rewarding gift you can give to another human being. There's a wonderful story from one of the old time sales trainers, Willie Gale, who was speaking about compliments to a group of salesmen back in the 1950s.

One of the men of the group, a door-to-door salesman asked Willie what he would do if he rang the doorbell and the woman who answered was all disheveled, dressed in a housecoat, looking absolutely awful. (Remember, this was the 1950s). Willie responded I would just stand there and keep looking until I found something to compliment her on.

A compliment must be sincere. People see right through false ones and ones without sincerity. Many a clothing sales person lost a sale by saying something looked good when instinctively it did not.

Make a habit of freely offering sincere compliments to people you encounter. This is so important, especially in our hurried, harried and seemingly impersonal society. There will be times when the compliment a person receives from you, a total stranger, is the only nice comment they hear that day. You can make a persons day with a simple nicety, spoken with caring and sincerity.

I was looking for a new article that is happy news among all of the press that this business is now involved. I hope it helps someone in todays' market.

Roger Herrick

California Mortgage Broker

www.ContactHerrick.com

Principal Residence, Second Home or Investment Property???

Real Estate Consultant — Mon, 07 Apr 2008 11:04:14 -0500

Principal Residence, Second Home or Investment Property?

A conventional mortgage may be secured by a property that is a principal residence, second home, or investment property. Any special eligibility criteria that are based on the occupancy status of a property are discussed below.

Principal residence properties. A principal residence is a property that the borrower occupies as his or her primary residence. If there are multiple borrowers for a regularly amortizing mortgage, only one borrower needs to occupy and take title to the property.

Parents who want to provide housing for their physically handicapped or developmentally disabled adult children who are unable to work or who have income that is not sufficient for them to qualify for a mortgage on their own have special home financing needs. In recognition of this, we will consider a residence that parents purchase or refinance for such children to be a principal residence for purposes of satisfying our mortgage eligibility requirements even though the parent-borrower will not be the occupant of the property. We will extend this same flexibility to children who want to provide housing for elderly parents who are unable to work or who have insufficient income to qualify for a mortgage of their own.

Second home properties. A second home is a property that is located within a reasonable distance from the borrower's principal residence and which the borrower occupies for some portion of the year. We limit our purchase of mortgages that are secured by second homes to those properties that have one dwelling unit. The property must be suitable for year-round occupancy (and can, in fact, be occupied by someone other than the borrower-as long as the occupancy is not under a timeshare arrangement). The borrower must have exclusive control over the property; therefore, he or she must not enter into any rental agreements that require the property to be rented or give a management firm control over the occupancy of the property. When a property is classified as a second home, rental income may not be used to qualify the borrower. Conventional second mortgages may not be secured by a second home.

Investment properties. An investment property is a property that the borrower owns, but does not occupy. A mortgage loan that is made on an investment property that is secured by manufactured home is not eligible for purchase or securitization.

Roger Herrick

California Mortgage Broker

www.ContactHerrick.com

Mortgage Market Report for Wednesday April 2nd 2008

Real Estate Consultant — Wed, 02 Apr 2008 18:21:12 -0500

Mortgage Market Report for Wednesday April 2, 2008

Providing market turmoil was a Congressional Joint Economic Committee hearing. Bernanke stated the economy may be headed into a brief recession during the first half of this year, but he was more optimistic about the economy over the second half of the year as the full effects of the Fed's interest rate cuts begin to stimulate economic growth.

Bonds were hit with some additional selling pressure at this point and stocks were cruising along a little higher until the release of the Energy Department's Energy Information Administration report of an unexpected decline in gasoline inventories due to higher demand. This news did not sit well with the stock market as it suggests retail gas prices will increase to levels this summer that will create a far greater financial burden on consumers while impacting corporate earnings.

As stocks then retreated on this news, our benchmark mortgage bonds staged a late session rally and bounced back from a deficit to reclaim the 50-day MA support level.

Thank you for listening to http://www.contactherrick.com/ We will have another report for you, your family, your friends and your important business contacts tomorrow.

A quote from Will Rogers

"The best doctor in the world is the veterinarian. He can't ask his patients, what is the matter?-he's got to just know."

Roger Herrick

California Mortgage Broker

www.ContactHerrick.com

Mortgage Market Report for Tuesday April 1st, 2008

Real Estate Consultant — Tue, 01 Apr 2008 17:47:06 -0500

Mortgage Market Report for Tuesday April 1^st, 2008

Stocks, led by the financial sector, are sharply higher on the optimistic outlook. As a result, Mortgage Bonds are being sold off.

While it is difficult to say if this the last of the bad news on sub prime, for today at least the markets are celebrating it. Their thinking is the only place to go from here is up.

This news is also being taken as a sign that the damages to major banks caused by sub-prime woes and the ensuing credit crunch may be nearing an end.

Prices are down thus far, after both favorable economic news and a strong stock market. But the Bond did dip down to the floor of support and has since rebounded slightly. This level will be important to watch today, as it has acted as a firm floor for the past couple of weeks. Let's see if this floor does hold.

Thank you for listening to contactherrick.com and we will have another report for you your family your friends and your important business contacts tomorrow.

However beautiful the strategy, you should occasionally look at the results.

Sir Winston Churchill

Mortgage Market Report for Monday March 31st, 2008

Real Estate Consultant — Mon, 31 Mar 2008 11:56:00 -0500

Mortgage Market Report for Monday March 31, 2008

Mortgage bonds are trading slightly higher today.

Housing and Urban Development Secretary Alphonso Jackson resigned Monday, amid multiple ethics investigations and criticism from top lawmakers.

Jackson said he will step down on April 18. He did not mention the allegations in his brief statement Monday, saying only that he wanted to attend to personal and family matters.

The resignation came after criticism from members of Congress that Jackson has refused to respond to inquiries on financial and friendly favortism for various government business contracts.

Mortgage bonds are trading in a wide area of floor and support. We recommend floating for now but things can change quickly. Again this has been and continues to be a volitile financal market .

Thank you for listening to contactherrick.com . We will have another report for you, your family, your friends and your important business contacts tomorrow

A quote from Thomas A. Edison

"Results! Why, man, I have gotten a lot of results. I know several thousand things that won't work."

Thank you.

Roger Herrick

Mortgage Broker

Mortgage Market Report for Thursday March 27th, 2008

Real Estate Consultant — Thu, 27 Mar 2008 13:39:36 -0500

Mortgage Market Report for Thursday March 27, 2008

Bonds are testing the floor of support. The Initial Jobless Claims are were reported slightly better than last week. The four week moving averages remain at levels see prior to each of the past two recessions.

The stock prices are dictating the movement of bonds and they compete for investment dollars. The bonds have a floor of support at the 50 day moving average. Hopefully, we will remain above this important support level.

We will keep you advised as this new conforming jumbo loan limit is released.

Thank you for listening to contactherrick.com . We will have another report for you, your family, your friends and your important business contacts tomorrow.

This quote is a Japanese proverb

"One kind word can warm three winter months."

Roger Herrick

California Mortgage Broker

www.ContactHerrick.com

Mortgage Market Report for Wednesday March 26th, 2008

Real Estate Consultant — Wed, 26 Mar 2008 13:41:56 -0500

Mortgage Market Report for Wednesday March 26, 2008

Today New Home Sales for February were as expected lower and now the number of sales is the lowest level in 13 years. The stock market is sagging and again placing favor on bonds.

Later today, Chicago Fed President Charlie Evans and Dallas Fed President Richard Fisher is scheduled to speak at 1:30 Eastern Time. Mr. Fisher did not agree with the Fed cuts and has rocked markets with his warnings in the recent past.

The bond market is being moved by the stock market as investment dollars try to find their comfort level.

The new conforming limit is in place but the lenders are tangling with this Conforming Jumbo pricing. It is no were near the actual conforming rates. I will keep you advised as this is investigated.

Thank you for listening to contactherrick.com . We will have another report for you, your family, your friends and your important business contacts tomorrow

A quote from Eleanor Roosevelt.

"People grow through experience if they meet life honestly and courageously. This is how character is built."

Thank you.

Roger Herrick

http://www.contactherrick.com/

Mortgage Broker