long island homes: Do Not Be Afraid of an ARM
- 11/18/09 08:38 AM
We have all heard of the horror stories about how home owners could no longer afford their mortgage when their adjustable rate mortgage (ARM) adjusted. The payment went up dramatically forcing the borrower into foreclosure or bankruptcy. This experience has made ARMs as popular as the swine flu. The problem was that some borrowers were unaware that they had an ARM and others did not understand how and why their mortgage payment changed. Today, the rates for an ARM are considerably lower than a 30 year fixed mortgage. Under the right circumstances, an ARM may be the right choice for a … (4 comments)
long island homes: Finding a Bargain Home
- 11/17/09 01:13 AM
When looking to purchase a home whether you are current home owner or a first time home buyer, there are many options. There is a belief that there are bargains available if you look for a short sale, a bank owned property (REO’s), or a for sale by owner (FSBO) property. Each has its pitfalls that make a seeming bargain turn into a problem. Let us look at each type of property.
Short Sale Many people look at a short sale as potential bargain because the home owner has no incentive to price the house as high as possible. The … (5 comments)
long island homes: Chase Forecloses on a House BY Mistake!
- 11/16/09 04:14 AM
You knew this was going to happen. Chase agreed to a loan modification for a borrower and the borrower had started making payments under the loan modification. The problem was that nobody told the good folks in the Chase foreclosure department. Unknown to the owners, the house was sold at auction. Click here to see the news report concerning this situation. Somehow I get the feeling that this is not the first time this has happened and it will not be the last. The lesson here is that if a borrower is going through a loan modification, make sure that there … (1 comments)
long island homes: Things The Listing Agent Can Do to Help Get A Mortgage Approved
- 11/13/09 03:44 AM
A listing agent can help the buyer get approved for a mortgage. Of course the listing agent has every incentive to want the buyer to be approved as quickly as possible so the sale can be closed. Here are a few ways the listing agent can help:
Insist on consist communication with the buyer’s loan officer. Any decent loan officer should not have any problem with this. The listing agent should be updated at least once a week as to the status of the borrower’s loan application. This will ensure that the loan officer is keeping on top of the … (1 comments)
long island homes: Can a Lender Be Forced to Modify a Mortgage?
- 11/12/09 03:27 AM
4 home owners are suing Aurora Loan Services because they refused to participate in the government sponsored mortgage assistance program (HAMP). The outcome of this lawsuit has far reaching implications. If the plaintiffs are successful, the courts are saying that a party can be forced to alter the terms of a contract, in this case a mortgage. If this should happen, banks will be extremely reluctant to lend money because at a nay time they could be forced to renegotiate the terms of the mortgage. This will mean fewer loans and higher interest rates.
It is one thing for a … (25 comments)
long island homes: Fannie Mae as the New Landlord
- 11/11/09 03:23 AM
Fannie Mae has announced a new program which would allow the former owners of foreclosed housed to remain in the home as a tenant. The former owners would enter a one year lease and a month to month lease thereafter. Now Fannie Mae would be Ms. Landlord. Is this a good thing or a bad thing? Before we answer that, there are a lot of unanswered questions. First, what would the rent be? The former owner clearly could not pay the mortgage, now how much rent could the new tenant afford and is this sufficient for Ms. Landlord. Will Ms. Landlord … (7 comments)
long island homes: Where Are My Fellow New Yorkers?
- 11/10/09 03:08 AM
I feel kind of lonely. As loan officer for a mortgage banker here in New York, I am amazed that very few posts are by New York realtors or mortgage brokers. Of course I do not read every post, but for some reason New Yorkers do not seem to participate. My unscientific survey of Activerain would put participation by New Yorkers in the bottom 10% of all states even though it is the third most populous state. I cannot figure out why. If some one can explain this to me I would be grateful
I enjoy the insights and knowledge … (7 comments)
long island homes: The 5 Top Deal Killers
- 11/09/09 03:15 AM
After much time and effort, a willing buyer and a willing seller have been brought together. The buyer seems to have a good enough credit score and income to purchase the house. The loan is submitted to the lender. Then the bad news is received, the loan was declined. What happened? Here are the 5 top deal killers in ascending order:
Number 5 Not enough Assets On the surface, the borrower seems to have enough money to qualify for either a conventional loan or FHA. The loan is declined because the underwriter wants more. Even though the buyer meets conventional … (1 comments)
long island homes: The Credit Reporting Agencies Can Sell You Out
- 11/06/09 03:32 AM
You did everything right; everything your trusted real estate agent advised you to do. You were referred to a qualified mortgage professional, had a great, meaningful conversation about your short- and long-term financial goals, and were quickly pre-approved for a loan. Together, you and your agent then searched for and found the perfect home within your budget, and put in an appropriate bid. Finally, you completed the application for your Long Island mortgage and were well on your way to qualifying for your piece of the American Dream. Then one night, while eating dinner, it began. They began! Call after frustrating … (2 comments)
long island homes: Strategic Default-An Idea Whose Time is Dumb
- 11/05/09 03:26 AM
There has been a lot of discussion about what is called astrategic default. First, let us define our terms. A strategic default is when a home owner can afford the current home payment but decides not to make the payment purposely and goes into foreclosure because the mortgage is greaterthan the home value. Let us be clear, this is not a situation where the home owner must sell. There have been many arguments as to the morality of doing this, but it is not necessary to get into those issues because rationally, economically and financially, a strategic default is justplain stupid. … (2 comments)
long island homes: No More Mortgages from Local Lenders
- 11/04/09 03:09 AM
Barney Frank is at it again. Once more, in the guise of looking as if Congress is doing something, they are attempting to pass an incredibly anti-consumer piece of legislation. The proposed Financial Stability Improvement Act contains a section called Subtitle F. Under this provision, all lenders would be required to retain 10% of all money they lend out in mortgages. For example, if a lender has lent out $100 million dollars in mortgages, it must have on hand $10 million. Theory is that this way, if it loans go bad, it will have money to cover it. Sounds reasonable? Think … (4 comments)
long island homes: Beware Quick Credit Repair Promises
- 11/03/09 04:16 AM
Due to job losses and reductions in income, people’s credit scores have been going down. Of course as scores go down, the less likely they will qualify for a mortgage and be able to purchase a house. As a result of this, a new type of scam is emerging. I would call this the quickie credit score improvement scam. I distinguish this from credit repair companies.
Unlike credit repair companies, the quick credit score improvement company will promise an immediate credit score improvement to they can qualify for a loan. A credit counselor will go over a person’s finances and … (4 comments)
long island homes: Appraisal Fraud Up!
- 11/02/09 03:03 AM
National mortgage news has reported on their web site that appraisal evaluation fraud has increased 46% over the past year. With HVCC and appraisal management companies, how can this be? Loan officers and realtors cannot order or even speak to appraisers. Why is appraisal fraud increasing? Are loan officers or realtors using their evil powers of the Vulcan mind meld or or Jedi mind tricks to influence appraisers? The answer of course is that this whole notion that loan officers or realtors influence appraisers to give artificially high appraisals is not true. The whole rationale behind HVCC is false. As can … (4 comments)
long island homes: If I Were the Short Sale Czar
- 10/30/09 04:21 AM
The Obama administration is fond of appointing czars. It is in that spirit I volunteer my services as short sale czar. I think I have the qualifications and ideas for this important post. First my qualifications. I am an experienced loan officer and the process for obtaining a loan approval and a short sale approval are quite similar. Both involve submission to a lender of financial information, a contract of sale, a written evaluation of the value of the property (appraisal or BPO) and an overall picture of the applicant (1003 for mortgagee application a and financial worksheet for a short … (5 comments)
long island homes: Whose Mortgage Is It Anyway?
- 10/29/09 04:07 AM
When doing a short sale, one must be very careful that the entity you are negotiating with has the authority to approve a short sale and can properly provide a satisfaction of mortgage. Here is a link to an article: http://www.nytimes.com/2009/10/25/business/economy/25gret.html?_r=1 where a federal judge in the Southern District of New York wiped out a $461,000 mortgage debt. It completely disappeared. The reason was that the apparent owner of the mortgage could not prove it. To summarize the article, a borrower went into bankruptcy. He filed a Chapter 13 in hopes of negotiating a new payment schedule. Any time a bankruptcy … (1 comments)
long island homes: The Prime Example of What is Wrong With My Industry
- 10/28/09 04:32 AM
The civil lawsuit filed by the Federal government against Lend America’s parent company Ideal Mortgage demonstrates all that is wrong with our mortgage lending industry. What is upsetting is that there was a 20 year pattern of fraud and no one did anything about it. The mastermind behind the fraud, HUD and Justice claim, is Mike Ashley. Justice claims Ashley fostered an environment that encouraged Lend America sales staff to originate FHA loans, even when borrowers were not eligible. In his meetings with sales staff, the suit claims, Ashley told them there were “no minimum credit score requirements” for FHA loans … (3 comments)
long island homes: Update on the Future of the $8,000 tax credit
- 10/27/09 04:08 AM
There is increasing concern about the pending expiration of the $8,000 federal tax credit. Bloomberg News reported that one of the reasons the stock market went down yesterday was due to concerns over the expiration of the tax credit.
There are two proposals in the U.S. Senate concerning the extension of the credit. One is by Sen Reid, Democrat of Nevada. He would keep the credit but slowly phase it out. The credit would be lowered to $6000 in April of 2010, $4,000 in July, $2,000 in October and be gone completely at the end of 2010.
Ironically, a … (0 comments)
long island homes: APR Can Be Misleading
- 10/26/09 04:04 AM
A borrower who is shopping for the best mortgage rate can easily be seduced by low rate offers that are accompanied by low Annual Percentage Rates (APR). Federal Law requires that APR be disclosed along side the actual interest rate. This is in order to help borrowers make a more informed decision on their mortgage. The truth is that APR is a very poor way to comparison shop for a Long Island mortgage or any mortgage throughout the country and can cause borrowers to make costly wrong decisions. APR was created in order to provide a way for borrowers to account … (3 comments)
long island homes: The Beginning of the End for AMC's
- 10/23/09 02:48 AM
The long national nightmare may be over soon! The House financial services committee passed a bill which had an amendment eliminating HVCC. We can only hope this is the beginning of the end. My experiences with appraisal management companies (AMC) is that they do nothing more than take money from the consumer and the appraiser, delay closings and artificially lower home prices. Good riddance. On another front, FHA will be enacting new guidelines on ordering appraisals. One of the guidelines is that all money collected for an appraisal must go to the appraiser. This would effectively mean no AMC because there … (1 comments)
long island homes: The Best Way To Market
- 10/22/09 01:33 AM
About 2 months age my son was involved in an automobile accident. Thankfully he was not hurt. That incident though opened my eyes about the best marketing technique. The driver of the other car was at fault because he went through a stop sign. The accident happened right in front of my house. After insurance information was exchanged, I called the other driver's insurance company, which was GEICO. The claims adjuster and everyone else involved could not have been nicer. They had some one look at the car within 24 hours. They declared it a total loss right away and their … (5 comments)
We have all heard of the horror stories about how home owners could no longer afford their mortgage when their adjustable rate mortgage (ARM) adjusted. The payment went up dramatically forcing the borrower into foreclosure or bankruptcy. This experience has made ARMs as popular as the swine flu. The problem was that some borrowers were unaware that they had an ARM and others did not understand how and why their mortgage payment changed. Today, the rates for an ARM are considerably lower than a 30 year fixed mortgage. Under the right circumstances, an ARM may be the right choice for a … (4 comments)
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