Mortgage by Randy
monthly update to our clients, colleagues, family & friends
By: Randy Mitchelson, November 2009
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In Issue 20 We Touch On:
Appraisal Rule Hurts Homeowners
Secret Behind "Positive" Economic News
Foreclosure Prevention Tool Kit
As we enter the holiday season our government is doing its best to deliver gifts in the form of packages of stimulus cash. Since the American consumer has wised up and undertaken a strategy of paying down credit card and home equity debt and stashing any extra into savings, the government is trying to pick up the spending slack. The fact that there are so few prudent protectors of taxpayer money in Washington is a sad state of affairs. BREAKING NEWS: at the time of this writing, Congress has extended the First Time Homebuyer Tax Credit which was set to expire on November 30, 2009. The tax credit is now extended to home purchases put under contract prior to next April 30. Homeowners who have owned their current residence for at least five years are now eligible for a tax credit if they choose to sell their current home. We will focus more on this money saving opportunity in future newsletters.
The current newsletter and all prior newsletters are archived at the Mortgage by Randy blog. Bookmark it and share with your friends and family. You can make your own comments and feedback as well. Time for the news...
Mortgage Market: New Regulatory Rule Is Hurting Consumers and Home Values
The Home Valuation Code of Conduct (HVCC) was implemented on May 1, 2009. The rule was created by the New York Attorney General Andrew Cuomo as an agreement between Fannie Mae and Freddie Mac (GSEs), their new regulator the Federal Housing Finance Agency, and the NY Attorney General's office. The intent of the rule is to reduce coercion of appraisers. However, the rule is overreaching, and has negatively impacted consumers across the country. The HVCC was never reviewed or voted upon by Congress, has failed to follow necessary regulatory procedure, and has the following effects on our income, home values and local property taxes:
1. The HVCC increases costs for those refinancing or purchasing a home. If a consumer changes lenders while shopping for a mortgage, multiple appraisals will be needed.
2. Because lenders are picking out-of-area appraisers to conduct appraisals, the appraisals are inaccurate and are lowering home values. This causes two negative results: it lowers home equity value even if you are not refinancing a home and, more importantly, these appraisal inaccuracies are lowering the tax base of your community. This requires taxpayers and voters in your area to either pay more taxes or experience reduced funds for schools, roads, and other service expenditures.
3. This single agreement, not voted on by Congress or issued by any Regulatory Agency, is costing consumers billions of dollars and making it harder than ever to refinance or purchase a home.
Personal Credit: Time For Year End Credit Report Inspection
One of the credit report strategies we coach people on is to spread out your access to free credit reports over an entire year. All consumers are legally entitled to receive one copy of their credit report from each of the three major credit bureaus (Experian, TransUnion and Equifax) one time per year. Reminder: this entitlement does not include free access to your credit score. Instead of inspecting all three versions of your credit history at one time, you can check one every four months. For those of you that already follow this strategy or even if you want to implement it now, this is a great time to do it. The distractions of the holiday season may cause you to delay doing this so why not cross it off your "To Do List" now? The only truly free web site that you can use to do this is www.annualcreditreport.com. Get a detailed credit analysis, including all three credit scores, and personalized action plan and consultation for only $99 by contacting me.
Economy & Financial Insights: Beware Of Happy Headlines About Economic Growth
A series of cause and effects is leading our national economic statistics to return to positive territory. However, there is another story behind the numbers so consumers and investors should remain cautious. Follow along with this sequence of economic facts:
Consumers have been scarred by "The Great Recession" and continue to retrench, lowering their spending and increasing their savings (including paydown of debt)...
Less spending by consumers leads to higher inventory levels for manufacturers (i.e., more washer/dryers sitting in the warehouse)....
Higher inventories force manufacturers to slow production of new goods and accelerate consolidation via mergers and closures of plants and warehouses....
Closures and mergers leads to higher unemployment....
(Here's where it gets ironic)
Inventory levels have already been cut to the bone so manufacturers have to produce a little something. They can do this without hiring new staff. This small increase in production will lead to a higher Gross Domestic Product (GDP) which is the headline grabbing statistic we often hear about. The lesson here is to not get excited about rising GDP. Until we see a reversal in the unemployment trend our economy will continue to teeter.
Question of the Month: Where Can I Get Reliable Mortgage Help To Avoid Foreclosure?
The FDIC recently launched a new Foreclosure Prevention Initiative for consumers. For a free tool kit of valuable information on how to avoid unnecessary foreclosure, options to stay in a home and guidance on avoiding foreclosure scams, contact the FDIC at 1-877-ASK-FDIC (1-877-275-3342) or through the web at Foreclosure Prevention Tool Kit. Available at this link is an informational tool kit that includes:
1) "Is Foreclosure Knocking at Your Door?" brochure
2) "Beware of Foreclosure Rescue Scams" brochure
3) FDIC Consumer News, Spring 2009, with articles on getting a loan modification and avoiding foreclosure "rescue" scams
4) "Your Own Home" module in the FDIC's Money Smart adult financial education curriculum
Giving Back: Supporting Our Communities - Cash Back Program For Holiday Shopping
We all know about the constantly rising costs of college. Recent reports reveal that despite the economy, institutions of higher education continue to raise tuition rates. You may have your own kids to plan for or you might have nieces, nephews, cousins or friends with kids. Have you visited Upromise.com? This service provides a way for you to turn your everyday shopping into college savings which you can assign to any child in your life. Even people without their own kids can use Upromise.com to donate college savings to their friend's kids. This service is free, easy and secure. If you have ever purchased something on the Internet you should definitely check this out.
Most of us already go online to shop at Barnes and Noble or order from 1-800 Flowers and by linking to these sites through Upromise.com you will earn these rebates. That's it! No special codes or downloads. There are offline earnings too like at Mobil, Staples and McDonalds. Rebates are there for the taking at restaurants in your area and you also earn money back for buying everyday groceries at supermarkets and stores like CVS. The list of participating stores is huge and continues to grow.
Need volunteers? Do you have a fundraising event upcoming? Do you have a personal web site where you are raising donations for your cause? Submit the information to randy@mortgagebyrandy.com by the 5th day of each month and we will do our best to include your information in the next issue.
Have a wonderful Thanksgiving. After celebrating a World Series win in New York City, including a ticker tape parade, it's nice to be settled at home again. We will get a rare chance to see our beloved Syracuse Orange play the Florida Gators in Tampa Dec 10 and then off to Disney for a few days of holiday magic.
Randy
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Mortgage by Randy newsletter, Copyright 2009 Randy Mitchelson. All Rights Reserved.
Randy Mitchelson is a licensed mortgage professional. All material presented herein is believed to be reliable but we cannot attest to its accuracy. All material represents the opinions of Randy Mitchelson. Recommendations may change and readers are urged to check with their financial advisors before making any decisions. Opinions expressed in these reports may change without prior notice. Mitchelson can be reached at 239-851-6738.
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You have permission to publish this article electronically or in print as long as the following is included:
Randy Mitchelson, of Estero, Florida, is a business professional, entrepreneur and author with over 15 years experience in financial services. Mitchelson has served in leadership roles for Global & Fortune 500 firms like Bank of America, KeyBank and CIBC.
As a member of National Association of Mortgage Brokers, Randy has earned the Lending Integrity Seal of Approval. He educates both individuals and groups about credit scoring by conducting personalized credit report reviews, action plans and one on one consultations. He is author of the free monthly newsletter, Mortgage by Randy as well as the Daily Dollar newsletter. A licensed mortgage professional, Mitchelson also founded Trinity Home Financing, LLC.
He is owner of Estero, Florida based National Web Leads, LLC, an internet lead generation service matching consumers with lenders for auto, cash advance and other financial products. Through its network of partners, National Web Leads delivers innovative Web 2.0 performance marketing solutions to advertisers and affiliate marketers.
Mitchelson earned his BS and MBA at Rensselaer Polytechnic Institute in Troy, NY. He is a founding member and Finance Chairman of the Southwest Florida Regional Technology Partnership Inc. and Vice President for the Michelle's Angels Foundation Inc. He is married to Susan, a Pharmacy Supervisor in the Lee Memorial Health System in Fort Myers, Florida.
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