Lee Walsh's Mortgage Blog

Who is to blame - the borrower or the bank?

The Full Service Loan Officer — Thu, 18 Jun 2009 10:42:35 -0500

In a recent article that Yahoo republished from the Wall Street Journal, Stephanie Simon wrote about a failed Colorado bank - New Frontier. She tells the story of a woman named Tina Gasner and her $260,000 business loan to start a pizza shop.

In the article Ms. Gasner blames the bank for misleading her into thinking her business plan was sound. The problem I have with this is that at the beginning of her statement she declares that she is an accountant.

Come on Ms. Gasner - it's time to "woman up".. and take some blame for selling yourself and the bank on a bad plan.

As an accountant she should have been knowledgeable in determining costs,revenues and profit margins.

Either she is a very poor accountant or she tried to borrow on a business plan that she knew did not add up.

Granted the bank was making a lot of bad loans, their criteria for lending failed the ultimate test. The bank was closed by regulators.

But Ms. Gasner and borrowers like her have to step up and take some blame. If you know that you cannot make the payments you should not be asking for the loan. You should not blame everyone else for letting you do something that based on your experience and knowledge you must have known had little chance of succeeding.

To be fair - the bank management and the loan officer that approved the loan were as delusional as the borrower.

This reminds of the days of the NINA loan. borrowers would apply knowing that they did not have a chance in you know where to make the payments over the life of the loan. They were leveraging themselves against all odds to get in on the flipping bandwagon. If a loan officer did the right thing and refused to process the application the borrower moved down the street until they found someone who would take the application.

I for one am glad to see products like the NINA and loan officers who only care about an easy commission out of this industry.

For the full story see: Click Here

The other shoe did not drop! Your LIBOR ARM mortgage

The Full Service Loan Officer — Mon, 22 Dec 2008 15:55:59 -0600

Important Information About Your LIBOR ARM Mortgage And How Your Rate Can Change.

Several months ago I posted some information about the possible surge in the LIBOR rate that could impact millions of mortgages in the US.

Based on the recent history at the time it was possible that LIBOR rates could soar putting many Americans in financial jeopardy.

The good news is that although the LIBOR did continue to rise for a brief period in late Oct 08, it has recently tanked. The 6 month LIBOR rate has fallen almost 4% in the last 8 weeks. It is almost at zero.

How does this help homeowners with LIBOR based adjustable mortgages?

In some instances it means that homeowners with a mortgage tied to the LIBOR will see their payments decrease at each adjustment period.

If you have a conventional Fannie Mae or Freddie Mac LIBOR ARM mortgage the above sentence is talking about you.

If you have a sub-prime or any of the alternative mortgage loans written in the last 2 - 5 years you might not have much to party about.

Why? Because many of the sub-prime and Alt-A mortgages have a clause in the adjustment rider that says that your rate will never go below the start rate.

How do you know which loan you have?

How do you determine how low you rate can or cannot go?

You want to dig out your mortgage papers - that would be the big packet of documents that you received from the settlement agent at or soon after your closing.

You want to look for a document called the Adjustable Rate Rider.

You want to look for a section that is usually titled - "Limit On Interest Rate Changes".

This paragraph will spell out the rules for your mortgage's adjustments.

All ARM mortgages have caps or limiters that stop your rate from skyrocketing or dropping through the floor all at once. There are two types of caps. Perodic - these occur at each adjustment. And Life Caps - these caps set the maximum/high and in some instances the minimum/low that your rate can float up or down to.

This is in place to protect you when rates spike and the lender when rates tank.

If you have an LIBOR ARM or any other adjustable mortgage you should be aware of the adjustment caps.

LIBOR - The other shoe could be about to fall

The Full Service Loan Officer — Wed, 17 Sep 2008 15:16:35 -0500

The other shoe could be about to fall... the LIBOR rate has spiked in recent weeks. What is the LIBOR and why is something to be concerned about?

From a report on Bloomberg this week..
"The overnight Libor rate in U.S. dollars soared 3.33 percentage points to 6.44 percent today, its biggest jump in at least seven years, according to the British Bankers' Association. The one-week rate rose by more than a percentage point, to 3.88 percent from 2.49 percent on Monday, and the one-month rate increased to 2.75 percent from 2.5 percent."

LIBOR is short for London Bank Inter Offered Rate. It is a rate index that is set by the British Bankers' Association.

Created in the mid 80's the index became widely used in the mid to late 90's in the US mortgage markets as the preferred index for adjustable mortgages. Most subprime and about 40% of conforming adjustable rate loans are based on a LIBOR index.

This means that these loan rates cannot be controlled by the FED.

If the LIBOR's recent increases continue this means that the adjustable rate mortgage payments that are tied to the LIBOR could more than double at adjustment time.

Most LIBOR based loans are tied to the 6-month index. This means that the rate is a rolling 6 month average. So will a short term spike cause you rates to jump? No. But an ongoing increase will.

If you have a LIBOR rate keep a very close watch on the monthly rate. Do not wait for the rate to spike before you have an exit strategy.

Fed Fannie Mae / Freddie Mac bail out - what next?

The Full Service Loan Officer — Mon, 08 Sep 2008 09:29:48 -0500

By now everyone has heard about the historic bail out of Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) by the government. In the short term this looks like a good move. The two companies are saved from insolvency and they can continue with business as usual. Is this good or bad in the long run? I think it depends on how ready FHA is to take the lead in mortgage lending in America.

Look at some of the ramification of the take over.

The CEOs will be fired - Great… it should have happened a long time ago.
The boards will be replaced - same as above!
There will be restructuring of the balance sheets - not so good!

The devil is always in the details.

The restructuring will result in a new class of stock to be created that has precedence over current stock holders. This new senior preferred stock will earn 10% a year.

Fannie and Freddie will be required to make major cuts in their mortgage holdings. Over several years they will have to cut their portfolios by almost 70%.

Mortgage rates are currently in the 6% range - Fannie and Freddie will be forced to borrow at 10% - you do the math!

With Fannie and Freddie cutting their portfolios by more than two-thirds this means that conventional mortgage money will be choked at the source.

This leaves FHA as the sole survivor. Let’s face it with Fannie and Freddie cut to one-third of their original size they will become secondary players. Is HUD prepared for the role it is being thrust into. For years this agency has taken a back seat and is now at 3 times it’s former production levels. This change will put a substantially larger burden on HUD.

Let’s hope that HUD is up to the challenge.

FEMA disaster recovery center is open for Seminole County

The Full Service Loan Officer — Sat, 06 Sep 2008 17:15:39 -0500

The FEMA disaster recovery center is open for Seminole County residents and business owners who were affected by Tropical Storm Fay.

Crews from the Federal Emergency Management Agency and the State Emergency Response Team will help staff the center in Stanford. The office is open daily from 8 a.m. to 6 p.m.

People who were affected by tropical storm Fay can apply for disaster assistance at the center and get help with answers to questions about claims and disaster loans.

The office is located at: 520 W. Lake Mary Blvd, suite 101, Sanford , FL 32773

Applicants should register by calling FEMA toll-free at 800-621-FEMA (3362). Those with a speech or hearing impairment may call the TTY number at 800-462-7585 and apply. Multilingual operators are available. The toll-free telephone numbers will operate 7 a.m. to midnight daily until further notice. Application for disaster assistance can also be made by registering online at www.fema.gov or at one of the Disaster Recovery Centers (DRCs).

Florida - Seminole county FEMA assistance - was your home or business affected by Tropical storm Fay?

The Full Service Loan Officer — Tue, 02 Sep 2008 13:43:51 -0500

Florida - Seminole county FEMA assistance - was your home or business affected by Tropical storm Fay?

Seminole County has received a declaration from the Federal Emergency Management Agency (FEMA) for Individual and Public Assistance for homeowners and public facilities affected by Tropical Storm Fay. Please call 1-800-621-FEMA (3362) to apply for federal assistance or go to their website by clicking here.

Thirty of Florida's 67 counties are now eligible for Public Assistance.

At the FEMA site you can get the information you need to determine if you qualify for FEMA assistance.

If you have an insurance policy you should file your claim before applying for FEMA assistance.

although FEMA help is primaraly for homeowners without insurance coverage there is also some assistance available to supliment your insurance coverage.

Individual Assistance can include grants to help pay for temporary housing, home repairs and other serious disaster-related expenses not met by insurance or other assistance programs. Low-interest loans from the U.S. Small Business Administration (SBA) also will be available to cover residential and business losses not fully compensated by insurance.

For additional information also go to this website by clicking here.

Are mortgage brokers related to satan?

The Full Service Loan Officer — Tue, 26 Aug 2008 16:36:04 -0500

According to one Florida mortgage banker they are.

I received an email from the Mortgage Bankers Association of Florida that contained a reprint of an editorial from the Miami Herald by Alex Sanchez. Who is Alex Sanchez? He is president and chief executive officer of the Florida Bankers Association.

According to the Florida banker's perspective, Florida mortgage brokers are Satan incarnate and are solely responsible for the sad shape in which the financial sector and housing in general finds itself.

Here are some of the misdeeds blamed on mortgage brokers by Mr. Sanchez in his editorial.

"More than 80 brokers who were caught stealing from clients by siphoning funds from escrow accounts and issuing excessive fees were allowed to continue working in the industry."
"Here-today-gone-tomorrow mortgage originators were in the practice of doing whatever needed to be done to close the loan. As we now see, some unscrupulous individuals working in the mortgage industry were willing to lie, cheat or steal just to seal the deal."
"Banks, which are well capitalized (meaning they have required rainy-day funds) conduct a series of examinations to determine the credibility of a loan before its issuance, including verification of income, requiring a solid deposit and performing substantial credit checks. According to recent news articles, others peddled mortgages "that required no money down and minuscule payments for the first few years." Some even forged records like tax forms, account balances and income statements."

First I would like to correct Mr. Sanchez's understanding of Florida lending law.

Mortgage brokers cannot get near escrow money. They could not siphon off escrow funds if they wanted to because in no part of the transaction does a mortgage broker collect or have access to escrow funds.

Granted, some brokers have been caught in questionable and in some instance illegal practices. These people should be barred from any type of employment in our industry and prosecuted to the full extent of the law.

In fact, I doubt that you would find many in our industry that would not vote for special penalties for these people.

But, are bad brokers alone in this problem? No. Real estate agents, title agents, appraisers, bankers, builders and attorneys have all been guilty.

Unethical people from every sector have stepped up to take advantage of a system in disrepair. But for a banker to blame mortgage brokers for the mortgage problems we are facing that was in a large part created by the banks is nothing more than a smoke screen to hide the real problems in our industry, which is the greed of many bankers.

What sector created the no income, non-owner, high loan to value mortgage?

What sector threw out the window payment history, employment history, and assets, and used instead a credit score to make a lending decision?

What sector was responsible for overseeing the underwriting practices for these mortgages?

What sector pushed these products on mortgage brokers and offered them in some instances two times the normal compensation to deliver these loan products?

What sector threw principles of decisioning out the window for short term profits?

The answer is one that Mr. Sanchez will not want to face. It is squarely on the door step of our bankers.

Mortgage brokers do not have any money to lend. They are simply providing origination services for bankers.

I know Mr. Sanchez is going to continue to cry that broker fraud is the problem. The facts are different. If you remove all numbers of mortgage fraud, no matter what sector committed it, we would still have a major lending crisis because the lending practices of the majority of the banks involved in mortgage loan production were operating on automatic with no one watching the store.

They were asleep at the wheel. Blaming others for their lack of responsibility will not change that fact.

Shame on you Mr. Sanchez for not accepting your (industry's) fair share of the blame.

If you would like to read the complete message from Mr. Sanchez see this link.
http://www.miamiherald.com

If you would like to contact Mr. Sanchez directly to voice your opinion about his statements you can reach him at:

Alejandro “Alex” Sanchez
President
Florida Bankers Association
P.O. Box 1360
Tallahassee, FL 32302
850.224.2265
asanchez@floridabankers.com
www.floridabankers.com

I guess I could end this by saying that some of my best friends are bankers…

H.R. 6694 means Seller funded downpayment assistance is not dead. Yet!

The Full Service Loan Officer — Tue, 12 Aug 2008 16:14:54 -0500

The support for H.R. 6694 the bill recently introduced to revive seller assisted DPA is growing.

Supporters include Jerry Howard, chief executive officer of the National Association of Home Builders, said the association supports HR 6694.

Also today, Nehemiah Corporation of America announced the launch of www.DPAGroundSwell.org, a web-based community established to mobilize the growing industry opposition to the October 1 ban on seller-funded downpayment assistance (SF-DPA).

On the new site you will see an inpressive list of supporters, a countdown clock showing when the current programs like Nehemiah's will expire. You will also find links and information showing you how you can help, and where you can write to demonstrate your support.

To see the bill as introduced see my previous post.

If these programs are important to you get involved.

Do something.

CNN spam alert...

The Full Service Loan Officer — Wed, 06 Aug 2008 16:07:24 -0500

Are you are getting emails from "CNN" that promote the top 10 stories of the day?

Guess what?

They are not from CNN - they are spam that points you to websites that are not part of CNN.

Do not click on the links.

The practice is called spoofing.

It looks like this....

This one is pretty good.. if you hold your mouse over the links in the lower part of the email.. the gray areas.. they go to a CNN link.

The top story links do not.

I got 5 of them today - all from different email addresses that are not CNN email addresses.

FHA Seller-Financed Downpayment Reform and Risk-Based Pricing Authorization Act of 2008

The Full Service Loan Officer — Sat, 02 Aug 2008 16:06:09 -0500

FHA Seller-Financed Downpayment Reform and Risk-Based Pricing Authorization Act of 2008

This bill - H.R. 6694 was introduced 8/1/2008 by U.S. Rep. Al Green (TX), and co-sponsored by U.S. Representatives Gary Miller (CA), Maxine Waters (CA), and Christopher Shays (CT).

It is a short addendum to the housing bill recently signed into law by President Bush that attempts to correct the exclusion of seller assisted down payment assistance. The bill also sets some risk based pricing guidelines for HUD.

As introduced seller assisted DPA would be allowed for borrowers with a credit score of 620 or higher.

There are some M.I. guideline for DPA loans also set with this legislation.

Seller assisted DPA, like every other mortgage program and service has experienced some abuses over the past 3- 4 years. But this is type of assistance has also helped over 1 million families buy homes.

You should urge your representitives to support this bill.

I always welcome subscribers and comments.

Feds seize two more banks - the rest of the story!

The Full Service Loan Officer — Sat, 26 Jul 2008 22:24:13 -0500

Feds seize two more banks - the rest of the story!

In the news On Friday, the Office of the Comptroller of the Currency closed First National Bank of Nevada, based in Reno, Nev., and First Heritage Bank of Newport Beach, Calif., with the FDIC named as receiver.

Mutual of Omaha Bank bought all insured and uninsured deposits, Mutual of Omaha Bank also will acquire $200 million in other assets from First National.

First National Bank Holding Co., which owned both banks closed by the FED, focused on four key areas: commercial loans, construction loans, small-business loans and mortgages.

Now - The rest of the story... this story has many people very nervous. It's another story like the recent IndyMac Bank closing. In fact that is why people should not be nervous. This is something they should have been expecting.

Everyone in the mortgage and real estate sectors know this company as First Bank of Arizona - one of the major players in the no income, no assets, investor loan.

IndyMac, WAMU (a company having major problems), FBOA (First National Bank Holding), GreenPoint Bank (Capital One), World Savings (Wachovia), all were leading the way in these problem loans.

no one should be surprised to see the parent companies of these operations struggling and in some cases drowning.

But no one should be making the connection that all banks are in such bad shape. Are some banks having problems? Yes. Will there be more bank closures? Probably.

But the way the major media outlets are reporting this information by leaving out this key information is doing a lot to generate a fear that all banks are in trouble. No one is highlighting the fact that these closing are a direct result of the mortgage activities of these companies in Alt-A and Sub Prime loan products.

North Carolina law tougher on mortgage branches, originators and lenders

The Full Service Loan Officer — Mon, 07 Jul 2008 09:07:27 -0500

North Carolina law tougher on mortgage branches, originators and lenders

A new law is going into effect soon in North Carolina that will eliminate more originators, mortgage branches and companies in that state.

Very soon if you do not have a credit score of 600 or higher, your out!
The net worth for a broker now will $25,000 and require audited financials.
The education requirements will now require 3 time more classroom hours.

Where does the N.C. brokers association - NCAMP stand on this?
Apparently on the sidelines.
A recent news article quoted Jennifer Salemson of the N.C. Association of Mortgage Professionals “Anything that would improve the quality of the mortgage industry, we would view as beneficial.”

Is more education a good thing - certainly it is and increasing the current 8 hours to 24 hours is not a burden on anyone and can only help originators stay up on the ever increasing complex laws and regulations we all are faced with.

I'm not so sure about the credit score requirement or the audited net worth requirement.

When has a good credit score reflected a persons trustworthiness?

Does anyone remember that one of the reasons we have a crisis in the mortgage industry is that underwriting basics were thrown out the window and replaced with credit scores as the deciding factor?

What is the credit score requirement in North Carolina for tax preparers, attorneys, financial advisers, insurance sales people, auto finance and sales people, home builders, etc.?

I doubt that any one in North Carolina politics has researched the cost for a small company to get audited financials. The cost can be from $750 to $2,500. This alone will greatly reduce the ranks of mortgage professions in the state.

Today I visited the NCAMP web site to see what they had to say about this up coming change - the only info I found was about the original bill passed in 2001.. isn't this 2008?

North Carolina is leading the way once again in legislation that will harm the people of their state instead of help them.

Down Payment Assistance (gift funds) attacked again!

The Full Service Loan Officer — Wed, 25 Jun 2008 10:31:57 -0500

A recent WSJ article on the DPA sector of down payment assistance showed how HUD is still looking for ways to shut this financing option down.

If this area of down payment assistance is new to you here are the basics on how it works.

Q: Can this program be used on any loan product?

A: Loan guidelines must allow a gift from a seller-contributed non-profit charity. All FHA loan products allow for this type of charitable contribution.

Q: Doesn't this program simply mean the price of a home is raised to cover the funds?

A: No. The market value of the home is substantiated by an independent appraiser. The appraiser must substantiate the value of the home based on sales of comparable properties. The price of a home cannot be higher than its appraised value.

Q: Is the seller paying for the buyer's down payment?

A: No. The gift comes from an existing pool of funds operated by the charity. After the funding, the seller pays a service fee that replenishes the funds for the next buyer.

Q: Are there any income limitations for potential home buyers?

A: If a buyer is approved for a loan, he or she can receive the gift funds. Only the lender's gift restrictions would limit the amount of the gift.

Q: Is the DPA gift tax deductible to the seller?

A. No. IRS Tax Regulations state that if a person receives something of value in return for a contribution to a non-profit, the gift is not tax deductible. In this contribution to the charity, the seller has received compensation from the sale of their home. ***You should refer questions regarding tax consequences of the sale of property to the sellers' tax professional.

Q: Who completes the gift application?

A: The loan officer or real estate agent completes the application and submits it to the charity. Once they receive the application, a confirmation gift letter is usually returned to the mortgage company. This confirmation affirms that the charity has received the request for funds and that the money will be at closing.

Q: How do we know if our wholesale lender has approved the use of DPA funds?

A: This type of Down payment Gift Program is approved by almost every major lender primarily for FHA loan. If a lender has not yet approved the charity's program, simply request a compliance package. Have it forward to your preferred lender and follow up to be sure this step is taken care of.

Q: Does a buyer have to repay the funds received through the Down payment Gift Program?

A: No. This is a gift not a grant. The buyer does not have to repay the gift.

Q: Can funds from the program be used to purchase condos, town homes, duplexes, etc.?

A: Yes. If allowed by the lender's guidelines, the Gift Funds can be used to purchase owner-occupied properties, including single family homes, manufactured homes and multi-family units.

This is a general overview of the how a typical DPA gift program works. For specific details contact your preferred DPA provider.

In my opinion HUD is looking in the wrong place for the problems. The numbers they post as "proof" that DPA is a problem are skewed. They do not show the stats for community grant programs which are more restrictive both in income levels - they have a very low ceiling, and in restriction after the funding including a filing of a lien against the property for 5 - 10 years.

(Q&A provided by American Family Funds)

Naked sunbathing as a sales concession!!

The Full Service Loan Officer — Mon, 23 Jun 2008 10:32:49 -0500

Well it's official, the circus has rentered the real estate market. Where else but right here in sunny Florida. Tampa to be specific.

The Arbors at Branch Creek, a complex of 390 homes in Countryway, Fla., will be setting aside one of their pools for skinny dippers and nude sunbathers to stand out from competing condos.

I wonder if digital cameras, telescopes, and binoculars are also incentives.

You do know that if this is a successful marketing campaign if will spread like wildfire accross the sunbelt states.

What is next?

Maybe a mini Hard Rock casino in the clubhouse!

WaMu exiting the option arm - it's about time!

The Full Service Loan Officer — Thu, 19 Jun 2008 03:56:50 -0500

Well it's official. Washington Mutual has announced that they are no longer going to offer the option arm.

I am amazed that they have continued to offer this product for the last 9-12 months.

So to date WaMu has exited the wholesale, and the subprime sectors. It's subprime company, Long Beach Mortgage was acquired in 1999 from Ameriquest (remember them) and now the option arm product. WaMu said the thrift was discontinuing that type of mortgage entirely because it has "significantly decreased in popularity with our customers given current market conditions."

Option arms only represented about 6% of total originations during the mortgage boom but I think it was one of the most abused mortgage products in the last 10 years. Although some originators used it correctly. For the right borrower it is a good solution, the majority of the borrowers who wound up with this loan were either not informed of the pitfalls or in some cases ignored the potential for disaster and found them selves upside down on their loans.

In 2007 WaMu shares were going for a little over $40, now it is about $6.25 a share.

My money says we will see a takeover announcement soon.

Save New Jersey Homes Act - could actually help.

The Full Service Loan Officer — Tue, 10 Jun 2008 07:55:00 -0500

Save New Jersey Homes Act - could actually help.

The New Jersey mortgage relief law is the kind of legislation that could help both the homeowner and the investors.

The bill, S-1853, known as the “Save New Jersey Homes Act of 2008,” would require mortgage companies to notify borrowers at 60 and 30 days prior to the date that the interest rates on their home loans reset. These notices would include information regarding the current interest rate under the introductory terms of the mortgage, the date at which the interest rate resets, an explanation of how the reset interest rate would be calculated, and the best estimate by the creditor of the amount of the monthly payment after the reset date. The notice would also include a list of alternatives the borrower can pursue prior to the reset date, including refinancing or renegotiating with the creditor, or applying for an extension on the introductory interest rate.

Borrowers would be able to apply for an extension on the introductory mortgage interest rate, up to three years, if they could not afford the monthly mortgage payments after the interest rate resets. They would have to complete a certification of extension prior to the reset date, indicating that they do not have sufficient monthly income, after deductions for necessary living expenses, to pay the monthly payment on the post-reset mortgage, and that they agree to continue payments during the extension period of principal and interest calculated at the introductory rate. Eligible borrowers would still have to pay back the interest deferred during the extension when they sell their homes, and would forfeit the deferment of interest if the borrower fails to make regular payments during the extension.

The bill would also allow eligible foreclosed borrowers to obtain a three-year suspension on foreclosure proceedings on an introductory rate mortgage. Homeowners who had already exhausted their three-year extension of introductory mortgage interest rates would not be eligible for foreclosure suspension.

The deferment on the increased interest would be better for the investor than it would be for them to add another property to their list of real estate owned.

The interest deferment is key here. If it was forgiven the security that the mortgage was tied to would be stripped of value. In a market where mortgage backed securities are already taking a beating it appears to be a good compromise.

The three years period is enough time for the borrower to get back on their feet, or sell the property.

I hope other states and our federal government notice this legislation.

opt in spam - Eben Pagan - the Guru MasterMind or Spam Mastermind?

The Full Service Loan Officer — Fri, 30 May 2008 23:39:03 -0500

Spam - Don't you hate it? We all get more than we could possibly read.
This week I think I opted in to receive more spam email that I bargained for.

It all started with an email from a group I subscribed to called Stompernet. They are a group of internet marketers out of Atlanta, GA who seem to have some good free information they provide in order to encourage you to subscribe to what I thought at the time was a high ticket item. If I remember correctly the guys at Stompernet charge around $800 for a subscription to their secrets to internet wealth.

Then they send me an email about an associate of theirs named Eben Pagan - the Guru MasterMind. The email was an invitation to listen to an exciting online conversation with one of their friends (read that as someone "Eben Pagan - the Guru MasterMind" who is paying them "Stompernet" a big slice of sales revenue to tap into their email list).

I liked what the guys at Stompernet had to say, so I opted in to receive email from Eben Pagan - the Guru Mastermind. Holly crap what a mistake.

How many emails do you think I got a day from this guy Eben Pagan the guru Mastermind?

1 a day?
NO

2 a day?
NO

3 a day?
NO

4 a day?
Close but NO!

Yesterday I received 5 different emails from Eben Pagan - the Guru Mastermind!

OK.. I know what you are thinking.. if I opted in to receive emails from Eben Pagan - the Guru Mastermind why am I now saying it's spam?

From Wikipedia, the free encyclopedia
"Spamming is the abuse of electronic messaging systems to indiscriminately send unsolicited bulk messages."

Now your thinking "Wait a minute - didn't you say you opted in to receive his emails?"

Your right I did opt in to receive emails from Eben Pagan - the Guru Mastermind.

The problem is the trick he uses for opting out.

At the the end of Eben Pagan - the Guru Mastermind's email messages is this line.
If you wish to unsubscribe, please send mail to: "Guru MasterMind Inc."
3960 Howard Hughes Pkwy, 5th Floor Las Vegas, NV 89109

I think that this lack of an opt out link makes Eben Pagan - the Guru Mastermind's email messages spam or Unsolicited Bulk Email (UBE) - and so do most internet service providers.

To be fair some of his emails did have an opt out link - I used it and the emails keep coming!

Before I decided I did not want to receive more email from this guy I actually took the time to review his information.

If I thought the Stopmernet guys were proud of their product at around $800. I have to say that Eben Pagan - the Guru Mastermind has priced his information like he is selling the secret to the second coming.

From what I can gather his basic price is about $6,000 (yup 6K) and the high end service is about $9,000.

On his information site I found broken links - for $6k to $9k everything better work.

Most of the information I saw was nothing new.. it's all available for free with some searching.

There is a whole lot of content on his free site but I though that the substance was lacking.

If you going to charge me $6k to $8k for something it better be a very big WOW!

So I guess the moral to the story is be careful what you ask for... It was lot easier opting in than it has been trying to opt out.

***I just got another email from Eben Pagan - the Guru Mastermind as I was writing this.

Message to Eben Pagan - the Guru Mastermind - please stop!

Reminder - April 30th is the Deadline to Submit Comments to the GSEs on the Policy that Prohibits Mortgage Brokers from Ordering Appraisals

The Full Service Loan Officer — Tue, 29 Apr 2008 09:00:46 -0500

It seem like every where we turn mortgage brokers are being attacked. Many of the new laws and rules that on the table only change the way a mortgage broker conducts their business. Here is another one.

Here is a notice and call for help from the NAMB (if your not a member of your local chapter - you should be)

Included is a sample letter to send.

If your not a member take that part out (or you could join)

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

Take Action Now!

New GSE Policy Prohibits Mortgage Brokers from Ordering Appraisals

Dear NAMB Member:

Fannie Mae & Freddie Mac recently entered into agreements with the New York Attorney General that will prohibit mortgage brokers from ordering appraisals. The GSEs are accepting comments on these agreements until April 30th.

Please respond to this critical call-to-action and tell the GSEs that there are better ways to address concerns over appraiser pressure and coercion, and that mortgage brokers help keep consumer costs down and promote comparison shopping when they order appraisals for their customers.

Below you will find a sample letter, which you are free to use in its entirety or modify, but please take a moment and submit your comments to the GSEs.

Comments may be sent to Fannie Mae by clicking here, and Freddie Mac by clicking here.

The agreements between the GSEs and New York Attorney General Andrew Cuomo were entered into on March 3, 2008 and are scheduled to take effect January 1, 2009. A copy is available by clicking here.

This may be the most important issue facing our industry today.

It is vital that you share your comments with the GSEs by April 30th.

Thank you for all of your continued support.

George Hanzimanolis, CRMS
NAMB President

******************************SAMPLE LETTER***************************

Dear Sir / Madam:

I am a mortgage broker and a member of the National Association of Mortgage Brokers ("NAMB"). I am writing to express my grave concern over the appraisal agreements entered into by the GSEs and New York Attorney General Andrew Cuomo.

Although I support the concept of a Home Valuation Code of Conduct, I strongly oppose the prohibition against mortgage brokers ordering appraisals for their customers. Under this Code, consumers will be financially tied to whichever lender they submit an application to first. If the consumer needs to submit an application to another lender, for any reason, a new appraisal must be ordered, the consumer's costs will rise significantly, and unnecessary delays are likely to follow.

All of this creates a disincentive for consumers to shop around for a mortgage loan that is right for them, and penalizes consumers if they ever need to change lenders in order to secure approval, a better rate, lower fees, or a more attractive loan product or program. Additionally, appraisal quality will suffer if local, independent appraisers, who have longstanding professional relationships with mortgage brokers and real estate agents, are cut out of the process.

Moreover, there are a number of possible alternatives to this Code that would actually address the problem of appraiser independence, while promoting consumer protection and comparison shopping, without disadvantaging an entire segment of the industry. Some better alternatives include:

   1. Establishing a Peer Review System for Appraisals.
   2. Requiring Lenders to Conduct Independent Appraisal Reviews.
   3. Providing Regulators with the Resources Necessary to Conduct Comprehensive Audits and Review.

Mandating accountability for appraisers will benefit consumers and the industry far more than targeting long-standing business relationships that present no inherent problem.

If the Home Valuation Code of Conduct takes effect as it is written today, it will harm consumers and put me out of business, along with thousands of other mortgage brokers and the small, independent appraisers who rely on us for their business.

Please reconsider the prohibition against mortgage brokers ordering appraisals for their customers.

Sincerely,

Mortgage Brokers - Kiss your A@#$ Goodbye!

The Full Service Loan Officer — Tue, 01 Apr 2008 11:06:42 -0500

Well it has begun... the Federal Government in their blundering wisdom is now trying to eliminate mortgage brokers. The Federal Reserve is preparing to make sweeping changes to the origination landscape by enacting new rules that will cripple the mortgage broker's business.

Both the Federal Trade Commission and HUD have visited theses issues and have policies in place that address the practices that the FED is trying to regulate.

I have printed the memo from the National Association of mortgage Brokers calling on everyone in our industry to send comments to the FED on this important issue. If you do not act act now.. you can kiss your career goodbye!

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Board of Governors of the Federal Reserve System

Proposed Rule Amending Regulation Z

1. Proposed Fed Rule Impedes Brokers’ Ability to Compete and Hurts Consumers

The Board of Governors of the Federal Reserve System recently proposed amending Regulation Z, which implements the Truth in Lending Act and the Home Ownership and Equity Protection Act.

The proposed Fed Rule would put in place some useful consumer protections, but it also would impose significant burdens on mortgage brokers. In particular, the proposed Fed rule would require brokers, but not other mortgage originators, to disclose the specific dollar amount which the broker would earn from a transaction, including yield spread premiums. That disclosure would have to be made before the consumer paid any fee to any person, and before submitting an application. Brokers may only receive compensation disclosed in that manner. If there is no such disclosure, the mortgage brokers cannot be paid by any amount by any party, lender or borrower.

HUD already requires disclosure of yield spread premiums in both the GFE and HUD-1. However, the Fed believes additional disclosure is needed from brokers, but not other originators, to protect consumers because, the Fed claims, consumers believe that brokers are a “trusted advisor” who are bound to get the best possible deal for borrowers, but do not view other originators in the same way. The Fed has taken this position even though exhaustive studies of mortgage disclosures by the Federal Trade Commission, the government’s principal consumer protection agency, in 2004 and 2007 show that additional disclosures of mortgage broker compensation created confusion, caused consumers to choose more expensive loans, led to a bias against broker-assisted transactions, and impeded competition, thus hurting consumers.

Opportunity for Public to Comment on Proposed Fed Rule

The Fed, like other federal agencies, is required to solicit comments from the public on any proposed regulation. The Fed must consider those comments before issuing a final rule. Comments must be submitted by April 8^th. Comments may be submitted at regs.comment@federalreserve.gov, and should identify “Docket No. R-1305” in the subject line of the message.

The National Association of Mortgage Brokers will file comments on the proposed Fed rule. Those comments will be very detailed, and include lengthy analyses of such matters as research methodology and rulemaking procedural requirements. However, it would be quite helpful for others to submit comments as well, particularly if those comments were mortgage brokers who explain real-life, practical considerations about how mortgage markets work and how brokers conducted their business. Attached are some points which it would be useful to make in such letters.

Suggested Points to be Made in Comments Submitted on

Proposed Rule Amending Regulation Z (Truth in Lending and HOEPA)

WHAT: The Federal Reserve has proposed a new rule which would implement several measures designed to protect consumers. Among other provisions, the proposed rule would prohibit mortgage brokers from receiving any compensation unless the specific dollar amount of the total compensation the broker would receive from both the borrower or the lender, including yield spread premiums, was agreed upon with the borrower before an application was submitted. This requirement would be in addition to the disclosures regarding broker compensation required by current law to be included in the GFE and HUD-1. The Fed is required to solicit comments on the proposal from the public. Brokers are encouraged to submit comments on the proposed Fed rule.

HOW: Comments may be emailed to the Board of Governors of the Federal Reserve System at regs.comment@federalreserve.gov, and should identify “Docket No. R-1305” in the subject line of the message.

WHEN: Comments must be submitted by APRIL 8, 2008.

SUGGESTED POINTS FOR LETTER:

[Theme: Highlight Real Life Experiences and State and Local Considerations]

Identify broker writing letter by name and home town

Express support for the consumer protection goals of the Federal Reserve Board’s proposed amendments to Regulation Z, but respectfully oppose the proposal to restrict compensation for mortgage brokers

Explain the services that mortgage brokers provide as an intermediary between borrowers and lenders, and the value the broker adds in the real estate transaction by serving BOTH parties, but representing NEITHER.

Explain how mortgage brokers must compete with direct lenders, and how the distinctions between brokers and lenders have blurred in recent years as lenders themselves typically package and resell loans they originate

Note how consumers are largely unable to distinguish between brokers and lenders, which have similar names, use similar signage, and rely on similar advertising

Insist that any disclosures apply equally to ALL mortgage originators, not just brokers

Explain how yield spread premiums are much more than just compensation, and how they are used to pay certain costs and facilitate the loan transaction

Explain how, in the real world, requiring brokers, but not other loan originators, to make compensation disclosures enable the brokers’ competitors to steer consumers away from brokers, even if brokers offer more favorable loans

Explain how it is impossible to give a reasonably precise dollar estimate of fees a broker will charge in a transaction even before an application is submitted because the broker does not yet know the prospective borrower’s financial status, transaction details, type of product sought, or amount of loan, all of which may vary as the transaction progresses

Suggest that the Fed consider alternatives to the proposed regulation which would protect consumers in their dealings with all mortgage originators, and encourage competition on price and service

Thank the Board of Governors of the Federal Reserve for considering the comments

Wow - a 40 year flashback.... what's that smell?

The Full Service Loan Officer — Tue, 25 Mar 2008 02:08:33 -0500

Last Sunday I was driving from my home in Seminole county to Lady Lake, a few mile past the Mt. Dora exit on 441 I was hit with a smell that took me back 40 - 50 years in time.

All of a sudden my senses were flooded with the pungent smell of orange blossoms. It made me realize that I was on the "Orange Blossom Trail" - but I don't think many people today really know why highway 441 bears that name. The air was so thick with the smell that it painted the picture in my mind of what it was like long ago on that highway when the blossoms from the orange groves blanketed the area for miles and miles with that unique sweet smell of orange blossoms.

"The Trail" long ago lost the acres and acres of orange grove that used to dominate the area to development.

The Orange Blossom is our state flower, but it is a becoming a rarity to experience the power of an orange grove in full bloom.

The flashback for me was not a Florida experience. I grew up in Orange county, California. The O.C. at one time just like central Florida had more orange trees than it did residents.

It was just one of the little moments in your day when everything else dissolves away for a few minutes and you have a big smile on your face.

Should you buy or refinance now?

The Full Service Loan Officer — Fri, 21 Mar 2008 12:38:15 -0500

Are you on the fence trying to decide if now is the time for you to buy property or refinance an existing property?

Does all of the bad press about housing and finance have you concerned that the timing is bad?

It seems that if you poke you head up at all you are bombarded with news stories and opinion from the pundits about how gloomy it is in the housing market. It's impossible to avoid the negative press on this subject.

But should you let this stop you from going forward with a home purchase or a refinance?

To help answer that question you should consider several things.

If you go back about 24 - 36 months ago the same newspapers, news channels and opinionated experts were really talking up the huge fortunes being made in real estate investment.

If anyone was sitting on the fence back then the press went a log way towards encouraging people to get in on the real estate bonanza.

In hindsight people that followed the pundit opinions got in to late and lost big. Many of them are still paying for that mistake.

I believe that by the time the press and the talking heads get on any bandwagon it is to late.

Are there still some areas that have not hit the bottom of their value range? Yes there are.

Are there some areas that have experienced little or no effect from the housing problems? Yes there are.

My point is that you should ignore the press when trying to decide if you should buy or refinance.

The important questions really are -

What is important for you now?
What are your options based on your credit, income, and the area your property is located in?
What are your reasons for buying or refinancing?
What is the best course of action for you?

Before you decide that this is not the right time to take or delay action you should get professional advice based on your current situation. Find a real estate agent or a mortgage professional that knows your local real estate and financial market.

Talk out your situation and needs. Get answers and recommendations based on your specific needs!

Don't rely on media or internet pundits to make the decision for you.

The Home Valuation Code of Conduct – will not help!

The Full Service Loan Officer — Wed, 05 Mar 2008 06:55:03 -0600

The Home Valuation Code of Conduct – will not help!

It has missed the mark.

The N.Y. Attorney General made Fannie and Freddie roll over and agree to sweeping changes in the way mortgage appraisals are ordered. The agreement completely isolates the appraiser form the real estate agent and the mortgage broker. By agreeing with N.Y. both Fannie and Freddie avoid threatened investigation and legal action.

How much business will this affect? According to the National Assoc. of Mortgage Brokers (NAMB) Mortgage brokers account for more than 50% of all originations. So the short answer is this new agreement will affect the industry in a tremendous way.

How will this affect our day to day business? The jury is still out on this but it already raises a few important questions. The agencies and the lenders will now be forced to create and manage some type of approved list. There will be big questions about who will collect the appraisal fees. Will the practice of the payment made at “the door” directly to the appraiser be eliminated by this new agreement? I think it will. It looks like the ability for the borrower to pay the appraiser directly is now gone. Will the wholesale lenders try to hold the broker accountable for collection problems created by bad checks form borrowers? The current agreements in place between a wholesale lender and a broker would put this liability on the broker.

Currently a broker has the ability to compare different wholesale lenders to get the best program for the borrower. The appraisal will now be ordered by the wholesale lender. If the broker will be prohibited from the appraisal ordering process this will eliminate the portability of an appraisal making it very difficult and costly to change lenders. Wholesale lenders will love this.

Is the unethical practice of attempting to influence a valuation by an appraiser limited to mortgage brokers? The simple answer is no. Loan officers who work for retail lenders can commit the same dumb acts that brokers do. How you are licensed has nothing to do with it.

Is it improper to discuss with an appraiser the estimated value or the value you need to make the loan work? The new agreement also addresses this issue. I think it depends on the reason a loan officer would discuss the value. Over the years I have had many conversations with appraisers about the value of the subject property. The reason was not to attempt to sway the determination of value it was to avoid a costly appraisal if there was not a chance of getting the value need to make the loan. These discussions help me understand my market better. This was a courtesy that the appraiser extended.

Will this hurt the mortgage broker community? I think it will harm borrowers more that it will broker. The cost of an appraisal will increase because of the additional burden placed on everyone involved, and it will greatly restrict a broker’s ability to shop a loan package for the best terms for the borrower. It also creates another bureaucracy that will oversee the new appraisal process. Putting up a wall between the mortgage broker, the real estate agent, and the appraiser is not the answer.

You just receive an e-Card from a friend - !Virus alert! (Part 2 – the solution)

The Full Service Loan Officer — Tue, 04 Mar 2008 14:46:42 -0600

You just receive an e-Card from a friend - !Virus alert! (Part 2 – the solution)

In Part 1 of this post I discussed the E-Card virus, which is really a catchall name for a number of Trojan type viruses that attack your PC. So what applications can help you when you have those pesky little things crawling all around your computer? What can you do to protect your PC?

Here is a list of some of the basic tools. All of these tools are FREE. Some work from donations others are commercial companies that provide the service in the hope that you buy their software.

Spybot Search & Destroy is a must have for every PC. It is FREE (you can and should make a donation if it helps you) and very easy to use and maintain. Spybot - Search & Destroy detects and removes spyware. Spyware silently tracks your surfing behavior to create a marketing profile for you that is transmitted without your knowledge to the compilers and sold to advertising companies. If you see new toolbars in your Internet Explorer that you haven't intentionally installed, if your browser crashes inexplicably, or if your home page has been "hijacked" (or changed without your knowledge), your computer is most probably infected with spyware. Even if you don't see the symptoms, your computer may be infected, because more and more spyware is emerging. The program will also allow you to immunize your computer against hundreds of spyware programs. Spybot-S&D is free, so there's no harm giving it a try to see if something has invaded your computer.

Housecall - this is operated by TrendMicro - their software is included in many of the top virus and spyware applications. Trend Micro HouseCall is an application for checking whether your computer has been infected by viruses, spyware or other malware ( grayware ). HouseCall performs additional security checks and allows to remove detected infections. Housecall does not stay on your PC (and MAC) it scans your drive remotely and again is FREE. Instead of a program that you install, you go to their website and their server will scan and fix your PC for free.

HijackThis Last Resort - This program is for use when HouseCall and SpyBot get nowhere and your PC is still infected. This can happen. If this is the situation you are in you need HijackThis. Again it is FREE and should be used with the website listed next.

CyberTechHelp This is a message board. It's there for people who really need help with spyware and viruses. The members of CyberTechHelp volunteer their time to help with serious PC problems caused by viruses. The instruction on the site will tell you to first download HijackThis, let it scan your computer, and post the results file on their message board. A tech will then give you step by step help. Again this is a last resort option and it's FREE.

If you have any questions about these application feel free to contact me. I do not do tech service for a living. But I have a tech background both in application development and troubleshooting.

I hope this information helps, I always welcome comments and subscribers.

You just receive an e-Card from a friend - !Virus alert! (Part 1)

The Full Service Loan Officer — Tue, 04 Mar 2008 09:20:07 -0600

You just receive an e-Card from a friend - !Virus alert! (Part 1)

In our business we often receive thank you notes from clients, vendors and business associates. So receiving an e-mail announcing that you have an E-Card message is not unusual. It’s not unusual, but it could be dangerous to open.

The E-Card virus / trojan has reared it’s ugly little head again. What looks like an innocent thank you message can cause you and your trusted PC a lot of pain.

I received this one today.

Notice it is short and to the point. I do not recognize the email address or the domain name it comes from. I am sure it is not really from that domain name. The message is trying to spark my curiosity to get me to click on the unknown link.

This is not a new problem. It reappears every holiday, especially Valentine’s Day.

What does the E-Card virus do? Most of the time it will put a nasty program on your PC that starts emailing fake messages to everyone on your contact lists. It spreads the virus.

The culprits that sent the email would like recipients to believe that these E-Cards come from a legitimate sender; the From line, which is spoofed, is displaying the name of a reputable company. Many times, the mail body bears the phrase “no worm, no virus” to falsely calm users’ fears of infection. But, since the sender is trying to trick you, users do get infected.

Here a few rules to use.

If it’s a legitimate E-Card it will show the name of the person who sent it. Legitimate greeting card companies never use generic names.

Here are some examples of fake E-Cards titles.

You’ve received a greeting ecard from a neighbor!
You’ve received a greeting ecard from a neighbour!
You’ve received a greeting ecard from a partner!
You’ve received a greeting ecard from a school friend!
You’ve received a greeting ecard from a school mate!
You’ve received a greeting ecard from a school-mate!
You’ve received a greeting ecard from a worshipper!
You’ve received a greeting postcard from a admirer!
You’ve received a greeting postcard from a class mate!
You’ve received a greeting postcard from a class-mate!
You’ve received a greeting postcard from a colleague!
You’ve received a greeting postcard from a family member!
You’ve received a greeting postcard from a friend!
You’ve received a greeting postcard from a mate!
You’ve received a greeting postcard from a neighbor!

If an IP address is used instead of the domain name.

Hxxp://00.000.0.000

Don’t be fooled by the use of a real greeting card company name. Anyone can type the name.

At Snopes.com they have this page about the E-Card Trojan.

http://www.snopes.com/computer/virus/postcard.asp

In the 2^nd part of the post I will give you some tips on what to do to protect your PC and what to do if your system has been infected (before you decide to take it in for a doctors visit that could cost you a bundle).

How many passwords do you have to remember?

The Full Service Loan Officer — Sat, 01 Mar 2008 01:39:45 -0600

If your like me the answer is way to many!

I read a post on John Ford's Blog where John brought up the problem of having to many sites with login and password access. It's a problem that can have you turning green.

I mentioned to John about the application I use to combat this growing irritation. I use Password Manager XP by CP-Lab.

How many times have you forgotten your login information at the exact optimim moment that causes the most frustration? It has happened to all of us. If you have more than 2 or 3 secure sites that you have to access you should consider a password manager program.

A password manager keeps all of your information in one central data base that is as secure as you can get.
The information is secured by multiple encryption coding that would take the CIA a long time to crack.
You can also keep credit card, banking information, and any information that requires a high level of security.

Many programs also allow you to use a portable storage device like a USB flash drive to store the program and the data. To use it you just plug into a USB port on any computer and your ready to go.

The manager I use is good,but there are also several free programs available. Free is good.

Here are three that you can download and use for free.

Password Corral

KeePass

KeyWallet

Are they really free? Yes. If you like the program the developers ask (not require) that you make a donation.

I have over 50 secure sites that I use, I only have to remember 2 passwords, my PW manager requires 2 passwords to open the program.

I hope this information is helpful, I always welcome comments and subscribers