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Key Events This Week:

2010-11-23T07:04:00.000-08:00

Monday:

No significant data.

1:30 ― Narayana Kocherlakota, president of the Minnesota Fed, delivers a luncheon speech to business leaders in Sioux Falls, South Dakota.

Treasury Auctions:

11:30 ― 3-Month Bills
11:30 ― 6-Month Bills
1:00 ― 2-Year Notes

Tuesday:

8:30 ― Revisions to third-quarter GDP are expected to boost the measure to an annualized rate of 2.4%, up from the original projection of 2%. Estimates from the 64 economists polled by Thomson Reuters range from 2% to 2.8%.

“Recent economic indicators such as business and wholesale inventories, new residential construction and net external demand point to a stronger economic activity in 3Q10 than previously estimated,” said economists at BBVA.

Forecasters at IHS Global Insight say inventory accumulation should provide a bigger boost than original estimates, while foreign trade should be less of a drag. However, private nonresidential construction should see large downward revision.

Projecting into the current quarter, IHS says to expect 2.5% growth.

10:00 ― Existing Home Sales are expected to take a slight hit in October. Forecasters expect to see an annualized pace of 4.50 million sales, down from 4.53 million in September. Estimates from 60 economists range from 4.20 to 4.80 million. The pessimism largely stems from the 1.8% drop in September’s pending home sales index, versus the consensus call for a 3% gain. The PHSI tracks contract signings, thereby anticipating secondary market sales by a month or two.

Against the consensus, economists at Nomura Global Economics look for a 1.5% increase to 4.60 million sales.

“Despite rapid growth over the past two months, the level of existing home sales remains a bit low compared to pre-federal tax credit levels,” they wrote. “We therefore think sales could rise further this month, despite the weakness in the pending home sales index (a leading indicator of existing home sales).”

On the lower end of the spectrum, economists at IHS Global Insight expect a 6% tumble.

“The Pending Home Sales Index slipped 1.8% in September, and mortgage applications to buy homes fell during October, according to the Mortgage Bankers Association,” they wrote. “The foreclosures mess which led to halts in foreclosures from some mortgage lenders contributed to the expected decline in sales.

2:00 ― Given the unprecedented attacks on the Federal Reserve in recent weeks, there should be lost of appetite to read the FOMC Minutes of the Nov. 2-3 policy meeting. The resulting communique detailed the central bank’s plan to renew quantitative easing efforts with $600 billion of new asset purchases. The minutes should detail how much support chairman Ben Bernanke had in launching the program.

“The QE2 decision is under attack from many quarters ― including from some members of the committee ― and markets have reacted violently since the meeting,” said economists at Nomura. “There is a clear need for formal communication on the latest policy action from the Fed. Indeed, the minutes of the last FOMC meeting specifically noted that the committee itself regards this document as ‘an important channel for communicating participants' views about monetary policy.’”

The minutes will also provide the Fed’s first updates on GDP, unemployment and inflation since the late June meeting.

“We expect major downward revisions to the Fed's forecasts for growth and core inflation, and an upward revision to forecasts for unemployment,” said Nomura.

Treasury Auctions:

11:30 ― 4-Week Bills
1:00 ― 5-Year Notes

Wednesday:

7:00 ― In the latest MBA Mortgage Applications survey for the week ending Nov. 12, mortgage loan application volume fell a precipitous 14.4%. Refinancings declined 16.5% to their lowest level since July; purchases fell 5%, ending a three week uptrend.

One reason for the sharp drop was a rise in interest rates. The average contract for a 30-year fixed-rate mortgage moved up to 4.46% from 4.28%.

“Rates increased sharply last week due to stronger economic data and lingering uncertainty regarding the structure and impact of the Fed’s QE2 program,” said the MBA. “Mortgage applications, particularly for refinances, dropped in response.”

Economists at Nomura note that purchase applications, despite three weeks of gain before last week’s fall, continue to languish at low levels. “This may indicate downside risks to our home sales forecasts for the next few months,” they added.

8:30 ― Durable Goods are expected to be flat in October following a 3.5% advance one month before. Forecasts are all over the place however, ranging from -2.7% to +4.5%. Not all news is bad though; the core index, defined as non-defense spending excluding aircraft, is anticipated to rise 1% after falling 0.2% in September. The discrepancy arises from September’s 105% monthly climb in non-defense aircraft parts.

Economists at Nomura, looking for a 0.5% increase overall, said October’s industrial production report signaled “very strong growth in business equipment output” and suggests a healthy underlying trend in capital expenditure ― “and therefore core durable goods orders.”

8:30 ― The October Personal Income & Outlays report is anticipated to show wages and consumption rising amid flat inflation. Economists predict income will rise 0.4%, following a 0.1% cut one month before, while consumption will pick up 0.5% after rising 0.2%. Core inflation, which excludes volatile energy and food prices, is set to be unchanged for the second month, providing the Federal Reserve with a defense of its reflationary QE2 measures.

Economists at BMTU note that year-to-year personal income began expanding in December 2009 following eleven months of decline. The growth rate was 3.1% in September.

“While that’s the best growth rate in income since late 2008, it is still about half of the historical average,” BTMU says. “Wages were up +1.7% year-over-year in September, which is the third consecutive month they’ve outpaced inflation since the recession began in December 2007.”

Forecasters at IHS Global Insight look for wages and salaries – which they call “the best guide to underlying trends” – to rise 0.5% in October.

“Higher employment, a longer working week, and increased hourly earnings all drove wages and salaries higher in October,” they said.

8:30 ― Many will be watching the Initial Jobless Claims report to see if the trend in claimants continues to fall. There were 439k and 437k new claims in the weeks ending Nov. 13 and Nov. 6, respectively, which drove the 4-week average to the lowest level since September 2008. A sustained number below 450k is generally indicative of private job growth in the US economy.

“Recent claims reports have increased our optimism about the state of the US labor market,” said economists at Nomura. “If we see another good report this week we will likely push up our forecasts for nonfarm payroll employment growth.”

10:00 ― The Reuters / U of Michigan Consumer Sentiment report bumped up 1.6 points in mid-November to 69.3. The current economic conditions index climbed 3.1 points to 79.7 and the expectations component moved up less than one point to 62.7. Revisions are expected to be minor, with analysts forecasting a 0.2 point gain to 69.5.

“The index of consumer sentiment remains quite low despite higher stock prices and improving economic conditions,” said economists at Nomura. “Given that the index was as high as 76.0 in June, we think further increases from 69.3 are quite plausible. The inflation expectation components of this report signal little risk of deflation.”

10:00 ― New Home Sales, the final bit of new data for the holiday-shortened week, is expected to show the annual pace of sales rise to 310,000 in October, from 307,000 one month before. Last month’s positive employment report provides the hope for more sales in the final quarter of 2010. Extremely low mortgage rates are also a nice incentive.

Analysts at Nomura look for the index to jump 4.2% to 320,000.

“The post-tax credit bust in new home sales looks to have ended, and building sentiment has started to pick up (albeit slowly and from a very low level),” they noted. “Given that new home sales remain quite low, we see room for further increases.”

Treasury Auctions:

1:00 ― 7-Year Notes

Thursday:

Happy Thanksgiving! Markets closed.

Friday:

No significant data. Markets are closing early.

Question of the Day:

Realtors Ask Mortgage Industry to Ease Underwriting Policies

2010-11-10T20:07:00.000-08:00

The National Association of Realtors® (NAR) used the forum of its 2010 Conference in New Orleans to urge the lending industry to make things easier to qualified buyers to become homeowners. NAR appealed primarily to the public sector, i.e. FHA, Fannie Mae, and Freddie Mac, which it said account for more than 90 percent of the mortgage market, saying that lenders refuse to make loans without assurance that FHA will insure them or the GSEs will buy them.

Vicki Cox Golder, NAR President, said that the government agencies are impairing their own mission to provide mortgage liquidity to home buyers with unnecessarily restrictive limits on the availability of credit. "These policies are delaying recovery both of the housing market and the larger economy."

"Under current practices, many would-be home buyers who could responsibly, affordably become home owners are unable to do so," said Golder. "NAR wants to ensure that anyone who is able and willing to assume the responsibilities of owning a home should have the opportunity to pursue that dream."

NAR also called on FICO Corp. and private lenders to amend certain rules on the utilization of credit, how negative credit scores will affect future home purchases, and to change how they report and treat loan modification and payment plans. The Association also expressed its intentions to work with all public and private parties to encourage them to assess their credit policies on an ongoing basis.

NAR said it will also develop educational materials for its members and consumers about credit issues, including the importance of good credit, lender credit policies, and how to find a fair and affordable mortgage.

By: Jann Swanson

Largest Lenders Control Mortgage Industry. Time to Engage Community Bankers

2010-11-04T20:02:00.000-07:00

I've been very busy over the past few weeks answering questions regarding the foreclosure mess and the accompanying “robo-signing” dilemma.
What surprises me are not the concerns over systematic risks surrounding the issue or whether or not fraud has occurred, but the fact that everyone I’ve spoken to is shocked that something like this could have happened.

To this I say, have you not been paying attention?

The government initiated HAMP program has failed to address loan modifications effectively and short-sales have failed to efficiently mitigate housing's losses.

These two outcomes have played out for the same reason: Four major banks control over 75% of the nations mortgage servicing. The GSE’s failure too can be linked to Fannie and Freddie controlling over 70% of the nations mortgage-backed securities market during their hay day. Too much control in the hands of the few has ultimately ended in chaos.

The same four major banks have controlled the majority of the mortgage servicing for the past two decades. During that time their primary responsibilities have been the collection of monthly remittances, payments to bond-holders and submission of the accompanying reports. This responsibility was relatively straight-forward and with the ability, in the past decade, to send processes off-shore the profitability grew at an enormous rate.

As annual mortgage volume grew from $500 billion in 1990 to an excess of $3 trillion in 2006 so too did the number of outstanding mortgage accounts that were being serviced by the large financial institutions. As these numbers continued to grow, so too did the number of delinquent files. Unfortunately loan servicers are not properly set up with the experienced personnel or the technology required to effectively managing these delinquent assets. As a result, too many delinquent accounts are being managed by institutions that have not adequately prepared for such an anomaly and we've experienced a massive back-up in the modification/loss mitigation process.

The solution is not simple but it’s doable...

First congress MUST redesign the nation’s Housing finance System to adequately supply the necessary liquidity to meet its future housing needs. This can only be accomplished if congress is willing to address an entire system overhaul and not just Fannie and Freddie.

Congress should also provide the Federal Home Loan Banks the authority to securitize mortgages. This would serve two purposes. It would first help to deleverage the percentage of the mortgage-backed securities market that the GSEs currently enjoy. After all that is what got them into the situation they find themselves today. Owning 70% of the MBS market was doomed to failure. Allowing the FHLB to securitize would also allow the industry to begin to shift some of the servicing responsibilities from the few to the many. Engaging the community banking system to assist in the de-leveraging of the big players should be a goal of the administration. More importantly, however, moving the servicing back down to these local bankers in local markets makes much more sense and improves the odds of future catastrophic failure of our mortgage system.

If the market ever expects housing to contribute 25% to 30% of GDP again, it will require congress to completely overhaul the housing finance system, de-leverage those institutions that have enjoyed the “too big to fail” status and let the private markets control housing rather than the socialized housing system currently in place.

by Joe Murin

FHFA Releases Framework for Dealing with Foreclosures. Borrowers Must Play Ball

2010-11-01T06:25:00.000-07:00

Statement By FHFA Acting Director Edward J. DeMarco On Servicer Financial Affidavit Issues

“On October 1, FHFA announced that Fannie Mae and Freddie Mac are working with their respective servicers to identify foreclosure process deficiencies and that where deficiencies are identified, will work together with FHFA to develop a consistent approach to address the problems. Since then, additional mortgage servicers have disclosed shortcomings in their processes and public concern has increased.

Today, I am directing the Enterprises to implement a four-point policy framework detailing FHFA’s plan, including guidance for consistent remediation of identified foreclosure process deficiencies. This framework envisions an orderly and expeditious resolution of foreclosure process issues that will provide greater certainty to homeowners, lenders, investors, and communities alike.

In developing this framework, FHFA has benefited from close consultation with the Administration and other federal financial regulators.

The country’s housing finance system remains fragile and I intend to maintain our focus on addressing this issue in a manner that is fair to delinquent households, but also fair to servicers, mortgage investors, neighborhoods and most of all, is in the best interest of taxpayers

Four-Point Policy Framework For Dealing with Possible Foreclosure Process Deficiencies

1. Verify Process -- Mortgage servicers must review their processes and procedures and verify that all documents, including affidavits and verifications, are completed in compliance with legal requirements. Requests for such reviews have already been made by FHFA, the Enterprises, the Federal Housing Administration, and the Office of the Comptroller of the Currency, among others. In the event a servicer’s review reveals deficiencies, the servicer must take immediate corrective action as described below.

2. Remediate Actual Problems -- When a servicer identifies a foreclosure process deficiency, it must be remediated in an appropriate and timely way and be sustainable. In particular, when a servicer identifies shortcomings with foreclosure affidavits, whether due to affidavits signed without appropriate knowledge and review of the documents, or improperly notarized, the following steps should be taken, as appropriate to the particular mortgage:

a. Pre-judgment foreclosure actions: Servicers must review any filed affidavits to ensure that the information contained in the affidavits was correct and that the affidavits were completed in compliance with applicable law. If the servicer’s review indicates either (a) that the information in a previously filed affidavit was not correct or (b) that the affidavit was not completed in compliance with applicable law, the servicer must work with foreclosure counsel to take appropriate remedial actions, which may include preparing and filing a properly prepared and executed replacement affidavit before proceeding to judgment.

b. Post-judgment foreclosure actions (prior to foreclosure sale): Before a foreclosure sale can proceed, servicers must review any affidavits relied upon in the proceedings to ensure that the information contained in the affidavits was correct and that the affidavits were completed in compliance with applicable law. If the servicer’s review indicates either (a) that the information in a previously filed affidavit was not correct or (b) that the affidavit was not completed in compliance with applicable law, the servicer must work with foreclosure counsel to address the issue consistent with local procedures. Potential remedial measures could include filing an appropriate motion to substitute a properly completed replacement affidavit with the court and to ratify or amend the foreclosure judgment.

ci. Post-foreclosure sale (Enterprise owns the property): Eviction actions: Before an eviction can proceed, servicers with deficiencies must confirm that the information contained in any affidavits relied upon in the foreclosure proceeding was correct and that the affidavits were completed in compliance with applicable law. If the servicer’s review indicates either (a) that the information in a previously filed affidavit was not correct or (b) that the affidavit was not completed in compliance with applicable law, the servicer must work with foreclosure counsel to address the issue consistent with local procedures before the eviction proceeds. Potential remedial measures could include seeking an order to substitute a properly prepared affidavit and to ratify the foreclosure judgment and/or confirm the foreclosure sale.

cii, Real Estate Owned (REO): With respect to the clearing of title for REO properties, servicers must confirm that the information contained in any affidavits relied upon in the foreclosure proceeding was correct and that the affidavits were completed in compliance with applicable law. If the servicer’s review indicates either (a) that the information in a previously filed affidavit was not correct or (b) that the affidavit was not completed in compliance with applicable law, the servicer must work with foreclosure counsel to address the issue consistent with local procedures and take actions as may be required to ensure that title insurance is available to the purchaser for the subject property in light of the facts surrounding the foreclosure actions.

d. Bankruptcy Cases: Servicers must review any filed affidavits in pending cases to ensure that the information contained in the affidavits was correct and that the affidavits were completed in compliance with applicable law. If the servicer’s review indicates either (a) that the information in a previously filed affidavit was not correct or (b) that the affidavit was not completed in compliance with applicable law, the servicer must work with bankruptcy counsel to take appropriate remedial actions.

3. Refer Suspicion of Fraudulent Activity -- Servicers are reminded that in any foreclosure processing situation involving possible fraudulent activity, they should meet applicable legal reporting obligations.

4. Avoid Delay -- In the absence of identified process problems, foreclosures on mortgages for which the borrower has stopped payment, and for which foreclosure alternatives have been unsuccessful, should proceed without delay. Delays in foreclosures add cost and other burdens for communities, investors, and taxpayers. For Enterprise loans, delay means that taxpayers must continue to support the Enterprises’ financing of mortgages without the benefit of payment and neighborhoods are left with more vacant properties. Therefore, a servicer that has identified no deficiencies in its foreclosure processes should not postpone its foreclosure activities.

FHFA will provide additional guidance should it become necessary.

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

Notice I called attention to the phrase "the servicer must work with counsel". I am not sure if this guidance was intended to be a solution or not. If it was, it seems like the borrowers who have claimed to be victims of "robosigning" will still need to be dealt with individually, on a case by case basis, which tells me only time will heal this problem. It also means borrowers must be willing to work with servicers. This is a technicality that can be corrected if all parties involved are willing to play ball. Unfortunately common sense tells me that borrowers will not give in without a fight.

The FHFA made the consequences clear/guilt tripped all the robosigned folks...

"Delays in foreclosures add cost and other burdens for communities, investors, and taxpayers. For Enterprise loans, delay means that taxpayers must continue to support the Enterprises’ financing of mortgages without the benefit of payment and neighborhoods are left with more vacant properties. Therefore, a servicer that has identified no deficiencies in its foreclosure processes should not postpone its foreclosure activities."

Foreclosures should go as scheduled if the servicer has all their ducks in a row. Let’s get on with the correction process already....

by Adam Quinones
in an article from Mortgage News Daily

All States Join Nationwide Mortgage Licensing System. Verification Checkpoint Provided

2010-10-21T07:40:00.000-07:00

The presser below was released this morning by the Conference of State Bank Supervisors
Washington, D.C.—Less than 34 months after its official launch, all 50 states have joined the Nationwide Mortgage Licensing System and Registry (NMLS, or the System). Hawaii became the last state to join NMLS on Monday, thereby ensuring improved supervision of non-depository mortgage lenders, brokers, and mortgage loan originators maintaining licensure through a single system shared by all state mortgage regulators.

“NMLS was built to be the foundation of a coordinated and transparent system of mortgage supervision implemented by state regulators,” said Neil Milner, CSBS President and CEO. “Having all 50 states on the System provides greater transparency within the mortgage industry and makes information available to consumers as they obtain mortgages from state-licensed entities.”

“This milestone is a testament to the hard work and commitment of state mortgage regulators,” said Gavin Gee, Director of the Idaho Department of Finance and Chairman of the State Regulatory Registry LLC (SRR). A limited liability company established by CSBS and the American Association of Residential Mortgage Regulators, SRR operates NMLS on behalf of state regulators. “State regulators have demonstrated their ability to coordinate on an unprecedented level to enhance supervision of the residential mortgage industry and protect consumers,” Gee continued.

Launched in January 2008 with seven states (ID, IA, KY, MA, NE, NY, RI), NMLS now includes 58 state agencies from all 50 states, the District of Columbia, and the territories of Puerto Rico and the U.S. Virgin Islands. NMLS currently tracks nearly 16,000 mortgage companies holding over 30,000 licenses and over 126,000 mortgage loan originators holding over 207,000 licenses.

MORE BACKGROUND INFO: The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, the Farm Credit Administration, and the
National Credit Union Administration published in the Federal Register a joint final rule implementing the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act) on July 28, 2010. The rule took effect on October 1, 2010, institutions were expected to implement appropriate policies, procedures and management systems to ensure compliance.

REMINDER: At this time there is no licensing action required in the Nationwide Mortgage Licensing System (NMLS) of any mortgage loan originator who is an employee of a federally insured depository institution or an owned and controlled subsidiary of such a depository institution that is federally regulated. HOWEVER these loan officers will soon be forced to comply with licensing laws....the final rule further provides that Agency-regulated institutions must: require their employees who act as residential mortgage loan originators to comply with the S.A.F.E. Act’s requirements to register and obtain a unique identifier, and adopt and follow written policies and procedures designed to assure compliance with these requirements. It is expected that these loan originators will have to obtain a unique identifier, and maintain this registration on the NMLS system sometime in early 2011.

While it might seem "sketchy" that some loan officers face tougher testing standards than others, this is not the case. Even before the SAFE Act, loan officers employed by banks, savings associations, credit unions or Farm Credit System (FCS) institutions and certain of their subsidiaries regulated by a Federal banking agency or the FCA, were already required by Federal regulations to pass a series of tests similar to those taken by independent mortgage originators who must already comply with NMLS today.

Consumers you can check the licensing status of your mortgage professional HERE.

READ MORE ABOUT NMLS REQUIREMENTS

by Adam Quinones - Map by Google Maps

FHFA Releases Framework for Dealing with Foreclosures. Borrowers Must Play Ball

2010-10-15T12:13:00.000-07:00

“On October 1, FHFA announced that Fannie Mae and Freddie Mac are working with their respective servicers to identify foreclosure process deficiencies and that where deficiencies are identified, will work together with FHFA to develop a consistent approach to address the problems. Since then, additional mortgage servicers have disclosed shortcomings in their processes and public concern has increased.

Today, I am directing the Enterprises to implement a four-point policy framework detailing FHFA’s plan, including guidance for consistent remediation of identified foreclosure process deficiencies. This framework envisions an orderly and expeditious resolution of foreclosure process issues that will provide greater certainty to homeowners, lenders, investors, and communities alike.

In developing this framework, FHFA has benefitted from close consultation with the Administration and other federal financial regulators.

The country’s housing finance system remains fragile and I intend to maintain our focus on addressing this issue in a manner that is fair to delinquent households, but also fair to servicers, mortgage investors, neighborhoods and most of all, is in the best interest of taxpayers

Four-Point Policy Framework For Dealing with Possible Foreclosure Process Deficiencies

1. Verify Process -- Mortgage servicers must review their processes and procedures and verify that all documents, including affidavits and verifications, are completed in compliance with legal requirements. Requests for such reviews have already been made by FHFA, the Enterprises, the Federal Housing Administration, and the Office of the Comptroller of the Currency, among others. In the event a servicer’s review reveals deficiencies, the servicer must take immediate corrective action as described below.

2. Remediate Actual Problems -- When a servicer identifies a foreclosure process deficiency, it must be remediated in an appropriate and timely way and be sustainable. In particular, when a servicer identifies shortcomings with foreclosure affidavits, whether due to affidavits signed without appropriate knowledge and review of the documents, or improperly notarized, the following steps should be taken, as appropriate to the particular mortgage:

a. Pre-judgment foreclosure actions: Servicers must review any filed affidavits to ensure that the information contained in the affidavits was correct and that the affidavits were completed in compliance with applicable law. If the servicer’s review indicates either (a) that the information in a previously filed affidavit was not correct or (b) that the affidavit was not completed in compliance with applicable law, the servicer must work with foreclosure counsel to take appropriate remedial actions, which may include preparing and filing a properly prepared and executed replacement affidavit before proceeding to judgment.

b. Post-judgment foreclosure actions (prior to foreclosure sale): Before a foreclosure sale can proceed, servicers must review any affidavits relied upon in the proceedings to ensure that the information contained in the affidavits was correct and that the affidavits were completed in compliance with applicable law. If the servicer’s review indicates either (a) that the information in a previously filed affidavit was not correct or (b) that the affidavit was not completed in compliance with applicable law, the servicer must work with foreclosure counsel to address the issue consistent with local procedures. Potential remedial measures could include filing an appropriate motion to substitute a properly completed replacement affidavit with the court and to ratify or amend the foreclosure judgment.

ci. Post-foreclosure sale (Enterprise owns the property): Eviction actions: Before an eviction can proceed, servicers with deficiencies must confirm that the information contained in any affidavits relied upon in the foreclosure proceeding was correct and that the affidavits were completed in compliance with applicable law. If the servicer’s review indicates either (a) that the information in a previously filed affidavit was not correct or (b) that the affidavit was not completed in compliance with applicable law, the servicer must work with foreclosure counsel to address the issue consistent with local procedures before the eviction proceeds. Potential remedial measures could include seeking an order to substitute a properly prepared affidavit and to ratify the foreclosure judgment and/or confirm the foreclosure sale.

cii, Real Estate Owned (REO): With respect to the clearing of title for REO properties, servicers must confirm that the information contained in any affidavits relied upon in the foreclosure proceeding was correct and that the affidavits were completed in compliance with applicable law. If the servicer’s review indicates either (a) that the information in a previously filed affidavit was not correct or (b) that the affidavit was not completed in compliance with applicable law, the servicer must work with foreclosure counsel to address the issue consistent with local procedures and take actions as may be required to ensure that title insurance is available to the purchaser for the subject property in light of the facts surrounding the foreclosure actions.

d. Bankruptcy Cases: Servicers must review any filed affidavits in pending cases to ensure that the information contained in the affidavits was correct and that the affidavits were completed in compliance with applicable law. If the servicer’s review indicates either (a) that the information in a previously filed affidavit was not correct or (b) that the affidavit was not completed in compliance with applicable law, the servicer must work with bankruptcy counsel to take appropriate remedial actions.

3. Refer Suspicion of Fraudulent Activity -- Servicers are reminded that in any foreclosure processing situation involving possible fraudulent activity, they should meet applicable legal reporting obligations.

4. Avoid Delay -- In the absence of identified process problems, foreclosures on mortgages for which the borrower has stopped payment, and for which foreclosure alternatives have been unsuccessful, should proceed without delay. Delays in foreclosures add cost and other burdens for communities, investors, and taxpayers. For Enterprise loans, delay means that taxpayers must continue to support the Enterprises’ financing of mortgages without the benefit of payment and neighborhoods are left with more vacant properties. Therefore, a servicer that has identified no deficiencies in its foreclosure processes should not postpone its foreclosure activities.

FHFA will provide additional guidance should it become necessary.

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

Notice I called attention to the phrase "the servicer must work with counsel". I am not sure if this guidance was intended to be a solution or not. If it was, it seems like the borrowers who have claimed to be victims of "robosigning" will still need to be dealt with individually, on a case by case basis, which tells me only time will heal this problem. It also means borrowers must be willing to work with servicers. This is a technicality that can be corrected if all parties involved are willing to play ball. Unfortunately common sense tells me that borrowers will not give in without a fight.

The FHFA made the consequences clear/guilt tripped all the robosigned folks...

"Delays in foreclosures add cost and other burdens for communities, investors, and taxpayers. For Enterprise loans, delay means that taxpayers must continue to support the Enterprises’ financing of mortgages without the benefit of payment and neighborhoods are left with more vacant properties. Therefore, a servicer that has identified no deficiencies in its foreclosure processes should not postpone its foreclosure activities."

Foreclosures should go as scheduled if the servicer has all their ducks in a row. Let’s get on with the correction process already....

by Adam Quinones
in an article from Mortgage News Daily
Statement By FHFA Acting Director Edward J. DeMarco On Servicer Financial Affidavit Issues

What is loan to value ratio (LTV)?

2010-10-13T05:33:00.000-07:00

A loan to value ratio (LTV) is a ratio used by mortgage lenders to figure out what amount of a mortgage they will loan you based on the appraised value of the property (or purchase price of the property, whichever of the two numbers is lower). Lenders consider the LTV ratio whether you are purchasing new property or refinancing property you currently own. The loan to value ratio may depend on the type of property - commercial or residential, or primary home, secondary home or investment property. The loan to value ratio may even vary depending on whether the property is a single family home or a condominium.

As an easy example, let's assume that a couple is purchasing a single family primary residence. The couple walks into the local bank to apply for a mortgage. The lender tells the couple that it can loan up to an 80% loan to value on the purchase price or the appraised value of the home the couple is looking to purchase. Let's say that the purchase price is $100,000. So, in this example, the loan to value ratio is 80:100 or 80%. Multiply the LTV ratio by the purchase to figure out the amount of money the bank will loan. Eighty percent of $100,000 is $80,000, which means that the couple will need to come up with a down payment for the difference of $20,000.

The lower the loan to ratio value for a property, the more risk that the lender associates with the property type or borrower. So if a borrower has a low credit score, a history of making late payments, or a high debt-to-income ratio, the borrower is likely to receive a lower loan to value ratio from lenders than those borrowers with higher credit scores, who pay their mortgage on time, and have a low debt-to-income ratio.

For properties that are located in the United States, the typical LTV ratio is 80%. This is because an 80% LTV ratio allows the lenders resell the mortgage to the federal government on the secondary market. Borrowers can obtain higher loan to value ratios, but they will usually have to pay private mortgage insurance on top of their regular mortgage payment. Private mortgage insurance protects the lender since they are exposing themselves to more risk by loaning a borrower a higher loan to value ratio than they normally would.

Fixing Core Failings of the Mortgage Industry: Data Quality, Transparency, Auditability

2010-10-13T05:20:00.000-07:00

The mortgage industry has always been cursed by its inability to prioritize initiatives that promote and ensure the efficacy of processes versus the efficiency of processes. Things were so bad that during the thick of the origination and housing boom, a 2007 Mortech study uncovered that two-thirds of lenders had no (zero) system for managing financial or operational risks. It’s always been far easier to justify investments and quantify returns on investments in the areas of loan sales and production than on quality assurance.
We all recognize that a lack of data quality, transparency, and auditability are core failings of the mortgage industry. Efforts to validate the integrity of loan data and quality of loan documents have been underway since the discovery of meta data and XML data (machine and human readable data) and eventually SMART documents over ten years ago.
President Clinton gave mortgage companies ammunition to fight fraud and improve processes with the enacting of E-SIGN legislation in July of 2000. The federal law gave “...electronic signatures, contracts and records the same validity as their handwritten and hard copy counterparts...”
E- Signatures became the linchpin to a fully automated, auditable, and rules based process – the eProcess. Loan software companies and document preparation companies quickly followed suite to be a part of the paradigm shift. Inaccurate and incomplete loan documents could not be signed until they were fixed. Loans would not – could not -progress unless everything was accurate. Anyone electing to “E-SIGN” documents went through rigorous and multi-pronged identification processes – even biometrics - that had virtually eliminated identity fraud cases. A digital seal was applied to the document and the embedded loan data was protected by a “hashmark” that ensured data could not changed once the document was notarized. The very things that could have prevented the mortgage and foreclosure debacle at its core are available, but for how long?

Last week, President Obama vetoed a bill that was designed to facilitate electronic mortgages and e-commerce, in large part over fears that the legislation would make it easier for servicers to get foreclosures approved by the courts. The bill (H.R. 3808) is called the Interstate Recognition of Notarizations Act and required state and federal courts to recognize paper or electronic documents with seals from out-of-state notaries.

White House press secretary Robert Gibbs said - “The President will not sign H.R. 3808...our concern is the unintended consequences on consumer protections, particularly in light of the home foreclosure issue and developments with mortgage processors. So the President is exercising a pocket veto, sending that legislation back to Congress to iron out some of those unintended consequences."

“Tapping the brakes” on 3808 is regrettable but understandable as the industry deals with yet another unprecedented issue. However, we need to be alert to the risks associated with condemning service providers and technology providers for what are really problems of procedures and policy. We as an industry need to be looking forward to the things that validate, mitigate, and share risks. Data driven rules and workflow go a long way toward solving to issues related to poor loan quality. E-Signatures and eNotarizations are the very sorts of things that ensure efficient processes can be performed at scale without deterioration of quality or efficacy.

by Tim Rood

a Mortgage News Daily article

Purchase Demand Rallies Ahead of FHA Updates. Seller Concession Reduction Still in Limbo

2010-10-08T09:31:00.000-07:00

The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending October 1, 2010.

The MBA's loan application survey covers over 50% of all U.S. residential mortgage loan applications taken by retail mortgage bankers, commercial banks, and thrifts. The data gives economists a snapshot view of consumer demand for mortgage loans.

In a low mortgage rate environment, a trend of increasing refinance applications implies consumers are seeking out a lower monthly payment. If consumers are able to reduce their monthly mortgage payment and increase disposable income through refinancing, it can be a positive for the economy as a whole (creates more consumer spending or allows debtors to pay down personal liabilities like credit cards). A falling trend of purchase applications indicates a decline in home buying demand, a negative for the housing industry and the economy as a whole.

Excerpts from the Release...

The Market Composite Index, a measure of mortgage loan application volume, decreased 0.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 0.3 percent compared with the previous week. The four week moving average for the seasonally adjusted Market Index is down 3.0 percent.

The Refinance Index decreased 2.5 percent from the previous week. The four week moving average is down 4.2 percent for the Refinance Index. The refinance share of mortgage activity decreased to 78.9 percent of total applications from 80.7 percent the previous week.

The seasonally adjusted Purchase Index increased 9.3 percent from one week earlier and is the highest Purchase Index observed in the survey since the week ending May 7, 2010. The unadjusted Purchase Index increased 9.1 percent compared with the previous week and was 34.7 percent lower than the same week one year ago. The four week moving average is up 2.0 percent for the seasonally adjusted Purchase Index.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.25 percent from 4.38 percent, with points decreasing to 1.00 from 1.01 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The 30-year contract rate is the lowest recorded in the survey, with the previous low being the rate observed last week. The effective rate also decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.73 percent from 3.77 percent, with points increasing to 1.14 from 1.13 (including the origination fee) for 80 percent LTV loans. The 15-year contract rate is the lowest recorded in the survey, while the previous low was observed last week. The effective rate also decreased from last week.

The average contract interest rate for one-year ARMs increased to 7.11 percent from 7.04 percent, with points increasing to 0.24 from 0.22 (including the origination fee) for 80 percent LTV loans.
The adjustable-rate mortgage (ARM) share of activity increased to 6.1 percent from 6.0 percent of total applications from the previous week.

THE MBA SAYS:

“The increase in purchase activity was led by a 17.2 percent increase in FHA applications, while conventional purchase applications also increased by 3.6 percent,” said Jay Brinkmann, MBA’s Chief Economist. “This is the second straight weekly increase in purchase applications and the highest Purchase Index level since the expiration of the homebuyer tax credit program. One possible driver of last week’s big increase in FHA applications was a desire by borrowers to get applications in before new FHA requirements took effect October 4th, which included somewhat higher credit score and down payment requirements.”

Jay hits the nail on the head. While new upfront MIP requirements lower the cost for borrowers at the closing table, the plain and simple truth is the increase in the annual premium (paid monthly) pushes monthly costs higher for homeowners. Hence the uptick in purchase demand, led by FHA loans, before the October 4 case number deadline .

From Mortgagee Letter 10-28

HUD has decided to raise the annual premium and correspondingly lower the upfront premium, except for Home Equity Conversion Mortgages (HECM), so that FHA is in a better position to address the increased demands of the marketplace and return the Mutual Mortgage Insurance (MMI) fund to congressionally mandated levels without disruption to the housing market.

Based on the new authority, effective for FHA loans for which the case number is assigned on or after October 4, 2010, FHA will lower its upfront mortgage insurance premium (except for HECMs) simultaneously with an increase to the annual premium which is collected on a monthly basis. This policy change will decrease upfront premiums for purchase money and refinance transactions, including FHA-to-FHA credit-qualifying and non-credit qualifying streamlined refinance transactions.

What items do home appraisers seek to find that would give higher home values?

2010-10-04T09:06:00.000-07:00

The The quick and easy answer would be comps (comparable homes for sale in your area) and location. We all know the first rule of real estate is location, location, location. A home across the street that might be exactly the same as yours could be valued at more because it might fall in a better school district or may not have railroad tracks behind it.

An appraisal is subjective but all appraisers should follow similar guidelines. That is to say 2 different appraisers could come to your house the same day and give you two different values. They try to find homes similar in size, location, and appeal to yours. But as we know all homes are not the same. Even in a development built by the same builder, homes vary in size, location, features, views, lots etc. The appraiser will adjust the homes based on the items. Usually they have fixed costs for things, like a home with an extra half bath would add $5000 or a fireplace would add $2500 to the value. There are also more subjective items like condition, build quality, view etc. This can vary greatly and is based on the appraiser and again comps in the area.

What is APR?

2010-10-04T09:05:00.000-07:00

Rarely is there such a simple question in the mortgage industry with such a complicated answer. The true definition of this one even puzzles some seasoned veterans. For those of you not interested in long and complicated, here is a very serviceable and very brief definition: APR is the true cost of money over time.

In other words, your mortgage has a NOTE rate, or the interest rate on your loan, but it also has closing costs, prepaid interest, and other finance charges. The APR is the cost of your normal interest and those finance charges over time expressed as an interest rate relative to the rate you are paying on your mortgage.

· Now for the long and boring stuff:

APR stands for Annual Percent Rate and was made a requirement of mortgage disclosures by the Federal Truth in Lending Act. It is intended to level the playing field among mortgage quotes. For instance, one loan might advertise a 4.5% NOTE rate, while another advertises 6.5% rate. But both of those loan's APRs could be exactly the same, meaning that although the 4.5% loan appears to be the better deal, if you take closing costs and finance charges into consideration, the cost is actually the same as the 6.5% loan. In fact, if you were to sell or refinance the house sooner rather than later, you'd probably pay less interest overall on the 6.5% loan!

Perhaps the most idiotic thing about APR is that the finance charges that contribute to the APR calculation must be manually checked and included by the person originating the loan. Because of this, two identical mortgage quotes could have completely different APRs because one of the loan originators didn't do their job correctly. Even worse for consumers is that the lower APR quote in this example would be the one generated by the inferior originator. My blanket advice is to know the NOTE rate of the loan you are applying for, and know the exact closing costs. Do not trust anyone's calculation of APR.

FHA MIP Updates Go Live on Today; Flood Insurance Officially Extended

2010-10-04T08:58:00.000-07:00

On the legislative front, President Obama signed into law S. 3814, a bill that will extend the National Flood Insurance Program(NFIP) for one year to September 30, 2011. And H.R. 3081 passed the House of Representatives, which among other items is the authorization to extend current loan limits for mortgages provided through Fannie Mae, Freddie Mac, and the Federal Housing Administration. Passage of the legislation will ensure that current loan limits for single-family residential mortgages will remain in place until September 30, 2011 at 125% of local median home sales prices, up to a maximum of $729,750 in high-cost areas. The floor for FHA is $271,050; the floor for Fannie Mae and Freddie Mac conforming loan limits is $417,000. The bill also appropriates $20 billion so that FHA can continue making loan commitments through the end of 2010.

Everyone in the FHA biz knows that Monday is a big day. FHA will lower its upfront mortgage insurance premium (except for HECM's) while simultaneously increasing the annual premium, which is collected on a monthly basis. This change will affect purchase money and refinance transactions, including FHA-to-FHA credit-qualifying and non-credit-qualifying streamlined refinance loans. (Hawaiian Homelands Section 247 loans are not affected by these changes, for anyone doing business in the state whose motto is "Ua Mau ke Ea o ka 'Āina i ka Pono.")

Private mortgage insurers have been licking their chops for Monday. They have grappled with credit losses on policies, claims of bad policy rescission, and an inability to compete with FHA's prices on new insurance. So with the increase on Monday could come the restoration of competitiveness of private insurance, potentially letting the companies win back market share and rebuild their reserves. And anyone watching that business has seen MI companies increasing riskier loans in somewhat subtle ways. Most believe that the MI companies, as a whole, are still fairly well capitalized. And of course lenders undoubtedly will benefit from the better prices, service and product diversity after Monday's FHA premium changes.

Most investors have credit and guideline overlays, over and above what the government agencies allow for programs.CitiMortgage, currently ranked #5 in volume among lenders right behind #4 GMAC, releases its overlays monthly. Citi's clients are aware of them, but include restrictions on initial & final 92900A and 92900-LT forms, VA Funding Fee information, source of funds documentation requirements, savings documentation, maximum VA loan amounts ($1 million prior to the VA Funding Fee), etc., etc. In other words, in this environment, borrowers had better have proof of anything or any transaction for practically every investor.

On to the fixed income markets. After some intra-day volatility, mortgage (MBS) prices ended Thursday unchanged from Wednesday's closing prices, with about $2.2 billion being sold. 10-yr notes worsened about .125 in price and moving to 2.52%. This was all after new U.S. claims for jobless aid fell last week, while manufacturing in the nation's Midwest region grew faster than expected in September, supporting the view that economic activity picked up a bit in the third quarter. There are, of course, large-scale trends occurring around the world, with commodities on the rise, the dollar sinking, several European countries still wallowing - so one might ask what a few percentage points in an ISM survey or the NY Fed's Empire Index means. It is a valid question.

Q: How long do you need to wait to get a new mortgage if you have a bankruptcy and a forclosure discharged on your credit?

2010-09-29T20:51:00.000-07:00

Mortgage Question of the Day

A:The time frame for recovery after a bankruptcy and or foreclosure is four years as a general rule of thumb.

This time frame can vary based on the circumstances. For example, if your bankruptcy or foreclosure was due to medical reasons then it is possible that you could qualify in as little as 2 years from the time your bankruptcy is discharged or the foreclosure redeemed, which ever occurs last.

If there is no medical reason for the situation and it is due to financial neglect then it is 4 years after the end of the last event, either the home is repurchased or bankruptcy discharged.

One other important point to know is that bank underwriters also want to see 4 years of RE-established credit history so it is important to start working on as soon as possible to help you on the road to recovery.

Q: Once a bank has issued an acceleration notice on a mortgage, how long does it take before a person must leave the propery?

2010-09-29T20:50:00.000-07:00

Real Estate Question of the Day

A: An acceleration notice just informs the mortgagor that the debt is due, immediately. It is not a foreclosure notice, and it is not an eviction notice. After acceleration, if the debt isn't brought current, the lender can file a foreclosure action; and in that case, the lender must follow the specific rules in the foreclosure law. These rules usually require notice of the foreclosure sale be published several times in a newspaper, notice to the property owner and other secured parties, and might even require notice to tenants.

At the foreclosure sale, if the lender bids in the mortgage balance, the lender becomes the owner. In some states, there is a redemption period, meaning the former owner can "buy back" the property from the lender by paying off the debt. Rdemption periods vary. However, if there is no redemption period and the mortgage lender owns the house, the former mortgagor has no right to remain in the house from the day of the foreclosure sale. If he stays in the house, the lender must use legal means to evict him. That means filing an eviction notice, which again requires notice to the occupant and legal process. Some jurisdictions are fast with evictions (Virginia) and some are slow (DC). So it depends on where you live. The basic rule is you have no right to occupy the property from the moment it is sold at the foreclosure sale.

Response to Rapid Refi Rumors; Wells Exec Speaks Out on Future of Mortgage Industry; Lock Desks Look for Loans; PMI Max LTV Increased

2010-09-29T20:49:00.000-07:00

Yesterday was another less-than-normal volume day for MBS's: $1.8 billion, again with the lion's share being 3.5% securities. These securities contain 3.75%-4.125% loans. What does this mean? Well, it is a sign that volumes are easing up a little, and companies, still hungry for volume, and lowering profit margins in order to keep market share. Rate sheet rates slide down from 4.375% or 4.25%, and when current production hits 4.125% or lower, the production is destined to be put into 3.5% securities.

In a related issue, the MBA reported that U.S. mortgage applications fell for a fourth straight week, and were down about 1% last week. (The 4-week moving average is down about 3 %.) At least purchases were up 2.4%. As we all know, it doesn't matter how low mortgage interest rates go - if a potential borrower does not have a job, or thinks the market will continue to soften, they are not going to borrow or buy a home.

The odds of this happening are slim, and certainly would not help folks in the business or mortgage investors, but, "as many as 30 million U.S. homeowners would be able to refinance their mortgage at record low interest rates regardless of their income, credit history or loan-to-value ratio" under a plan unveiled yesterday. The legislation, viewed primarily as a pre-election issue, would allow for blanket 30-year, fixed-rate mortgages at the prevailing market rate, now around 4.3%, for anyone seeking to refinance a government-backed loan. Serious analysts' initial belief is that this should not be taken seriously, but it did cause investor and originator concern. The Home act described by Cordoza appears to be very similar that was proposed in Jan 2009.

Analysts wonder if we have done enough to ensure that financial and housing markets will work properly and lead us to recovery. The answer is pretty much "no". Anyone in the biz can tell you that in a normally functioning mortgage market almost all homeowners would have refinanced their mortgages to take advantage of low rates. This has not happened with this wave of low rates. Borrowers are nervous about their jobs, local housing markets in many areas are still slow, and some lenders don't want to lend.

Some in the industry feel that the companies servicing higher-than-market-interest-rate loans should be directed by the agencies to send a short application to all eligible borrowers promising to allow them to refinance with minimal paperwork. Servicers would receive a fixed fee for each mortgage they refinanced, which would be rolled into the mortgage to eliminate costs to taxpayers. Proponents say that this would not only help homeowners through the current crisis, but would be the equivalent of a 26-year tax cut given the current average housing expense of about 30% of income. With roughly 37 million mortgages now guaranteed by the federal government, this adds up to about $50 billion a year of savings, some percentage of which is pumped back into the economy, and lowering foreclosure rates and the number of borrowers walking away from their house.

Unfortunately, of course, it eliminates any originator who does not work for a servicing company from earning fees from refinancing a borrower. It also hits holders of MBS's, who were counting on a certain revenue stream at a certain rate of return. (Of course, those investors are hit anyway every time a loan refinances, but do they really mind if a 6% borrower, who is making their payments, can't refi?)

HARP tried to do this, with very limited success. What about HARP's failings, with LTV's up to 125%? First, the program was not widely publicized relative to the federal government's efforts to help with more modest loan modifications. Second, the refinancing requires substantial upfront costs for borrowers. Third, many borrowers - those with second liens or shaky incomes - were locked out. (About 20 percent of all borrowers with federally backed mortgages have a second lien.) Last, many borrowers do not know the current value of their homes, and are reluctant to pay to get an appraisal only to be turned down for a refinancing. The odds of this happening are slim, but it has been thrown out there.

An executive from a large mortgage investor publicly spoke out about the future of the industry, particularly Freddie & Fannie, which is a little unusual. Mike Heid, co-president of co-president of Wells Fargo Home Mortgage: "Heid said the so-called mortgage securities insurance companies could eventually take over that function from Fannie and Freddie. But the government would still backstop the mortgage industry by guaranteeing the principal and interest on securities for investors...Heid said at least four, but not more than eight, such companies would be needed to serve the market. Groups of banks are seen as potential investors in the mortgage securities insurance companies."

Few, if any, investors "go out on the street" with programs that exactly mimic the underwriting and procedure guidelines agencies set forth. In fact, those that do will often use that as an advertising tactic. Conversely, most investors and servicers have overlays. For example, CitiMortgage set out its credit overlays, which effect rent schedules (deleted), maximum CLTV for FHA R&T refi's (deleted), and credit inquiries (modified). Citi added overlays in the areas of installment/revolving debt, judgments, and non-arms length transactions.

On the mortgage insurance front, PMI will be increasing its maximum LTV to 97% effective October 8. It is a good sign for many in the industry, and loans must have a minimum 720 credit score, be in non-distressed markets, owner-occupied, conforming, originated only through a retail channel, etc.

How 'bout these markets? No wonder people are buying gold: putting money into a savings account gets you nowhere, smart folks out there say the stock market is over-valued, bonds only yield 2-3 percent, and the list goes on. Yesterday we learned that confidence among U.S. consumers fell in September to the lowest level in seven months, mostly due to the employment situation. If unemployment stays near 10% for an extended period, folks aren't going to go out and spend a lot of money in the economy. On the flip side, the S&P/Case-Shiller Home Price Indexes were up 4.1% in July versus a year earlier in 10 metro areas, while the 20-city index climbed 3.2%. Month-over-month numbers were up slightly.

After this news traders reported that "flows were quiet" as the market prepared for the $35 billion 5-yr note auction, which ended up going well. There is a $29 billion 7-yr auction today, but no news. In mortgage-land, yesterday the mortgage security markets ended the day pretty much unchanged and price changes were minimal. Investors are roiled, however, about this refi plan, as unlikely as it is to be carried out. There was a limited knee-jerk reaction in the higher coupons to this news, but lower coupon rates improved. The 10-yr ended at 2.47%, and this morning we find it at, uh, 2.48%. Mortgage prices are roughly unchanged so far.

Mortgage Rates Inch Higher After Existing Home Sales Data

2010-09-27T13:28:00.001-07:00

After ending last week on a three day losing streak, loan pricing made a total turnaround in the first three days of this week, mostly thanks to the outcome of the FOMC meeting on Tuesday. This led mortgage rates almost all the way back to record lows on Wednesday morning. However, soon after, MBS prices began to tick lower (from the top of the price range) which forced a few lenders to reprice for the worse. This put pressure on mortgage rates heading into today...

The data calendar picked up today with several economic releases, starting with weekly Jobless Claims. Released by the Department of Labor, this report provides three timely metrics on the health of the labor market:

Initial Jobless Claims: totals the number of Americans who filed for first time unemployment benefits in the previous week
Continued Claims: totals the number of Americans who continue to file for benefits due to an inability to find a new job
Extended and Emergency Benefits: totals the number of Americans who have exhausted their traditional benefits and are now receiving extended and emergency benefits

Since our economy is driven by consumer spending, market participants track employment data to get a gauge on economic momentum. Higher jobless claims imply less consumers have jobs and therefore less money to spend. This is a negative for the overall economy but generally helpful in keeping consumer borrowing costs from rising. Since peaking in mid-August at 504,000 claims, initial claims for unemployment benefits have either held steady or improved in the past 5 weeks.

Here are the results:

Initial Jobless Claims: +12,000 to 465,000 vs. estimates for a read of 450,000. WORSE THAN EXPECTED. Prior week’s data was revised worse to show 3,000 more claims.
Continued Claims: -48,000 to 4.489 million vs. estimates of 4.460million.
Extended and Emergency Benefits: +208,000 to 5.17million.

This worse than forecast data was a positive for mortgage rates. Bonds rallied on the news and mortgage rates looked like they were set to correct today.

Next on the docket was Existing Home Sales for August. Released by the National Association of Realtors (NAR), this data totals the number of previously owned homes in which a sale closed in the previous month. Last month’s report was downright horrible, EHS plunged 27.2% to record low annualized pace of 3.83 million existing home sales. Right after this report was released last month, mortgage rates set new record lows.

Today’s release indicated Existing Home Sales in August improved 7.6%, which was slightly better than expectations. That equates to an annualized pace of 4.13 million homes sold. The increased number of sales helped reduce the number of homes on the market to 11.6 months worth. The median home price fell 1.9% from last month to $178,600. NAR states that supply would need to fall to 8 or 9 months in order to stabilize home prices. Despite the positive news on existing home sales, this was still the second lowest amount of sales on record, with last month being the lowest. HERE are charts and more commentary.

Bonds sold off after this data and mortgage rates moved higher as lenders who published rate sheets earlier in the day (after jobless claims) ended up repricing for the worse. Overall, loan pricing was weaker today than it was yesterday, but consumer borrowing costs didn't get beat up too badly. Mortgage rates remain close to record lows.

The best par 30 year fixed mortgage rates remain in a range between 4.25% to 4.50%, with several lenders still offering 4.125%. The par 15 year conventional rate mortgage continues to hold in the 3.75% to 4.00% range, which several lenders offering 3.625%. To secure a par interest rate you will be required to pay all the closing costs associated with your loan which includes lender fees, title fees, government recording fees and taxes including one point loan origination/discount/broker fee. You may elect to pay less in costs but you will have to accept a higher interest rate.

Same lock advice as yesterday. Short term closings should lock while those with time are probably safe to float but you should consider locking as lender pricing is very close to the best we have ever seen.

MORTGAGE QUESTION OF THE DAY

Q: How does one person get from under a mortgage with some one whom is not their spouse, but is on the mortgage with them.

I think you are asking how to "get out from under" a mortgage. (There appear to be words missing in your question.) Once you have signed the mortgage, it does not matter whether the co-mortgagor is your spouse, a friend or a stranger. Both people who sign the mortgage are fully responsible for repayment of the debt.
If one mortgagor does not pay, the other one is fully liable for the entire amount of the mortgage. Even though co-borrowers may have personally agreed that each one owes 50% of the payments, that agreement is immaterial to the mortgage lender. If, for example, the two of you have a mortgage for $400,000 and one of you loses his job or moves away, the OTHER one is responsible for the full $400,000. Simply put - every person who signs a mortgage is responsible for 100% of the mortgage amount. The bank is not required to divide up the loan and decide "who pays what."

The only way to "get out" from a mortgage is to pay it off, or to have the lender release you from the mortgage. The lender is unlikely to release you from a mortgage, because that means there is one less person responsible for the repayment of the loan. You could sell your interest in the house to your co-borrower, but even then, the mortgage company would continue to hold you (as original signer of the mortgage) responsible for repayment of the loan

REAL ESTATE QUESTION OF THE DAY

Q: What will be my tax liability if I just return the house back to the bank?

This is something that you will need to carefully consider with your tax professional and your mortgage lender. Every circumstance is different, and it is impossible to tell you what your liability will be without knowing much more about your situation.

By involving your lender in the discussion, you are given the chance to explain why you cannont make the mortgage payments and how your local market has changed so that you cannot sell the home in order to pay back the mortgage. If your lender agrees that accepting your keys "in lieu of foreclosure", you may be in a better position financially than if you simply stop paying on the loan.

In general, if you cannot sell to pay back the loan in full, the bank does NOT want your house. When they have to take title to a home, care for it, and then resell it at a discounted, foreclosure price, they lose tens or even hundreds of thousands of dollars. If the lender feels that your default was avoidable, you can expect that they will report your derogatory credit and hold you accountable for as much as legally possible in your area. However, if it is evident that you considered all options and worked with them to find a solution, they are likely to report your status differently . . . to the credit bureaus, the IRS, etc.

Make sure you consult a tax professional, the lender, and perhaps an attorney in your area familiar with "short sales" before taking the next step.

What will be my tax liability if I just return my house back to the bank?

2010-09-27T10:58:00.000-07:00

Mortgage Question of the Day?

This is something that you will need to carefully consider with your tax professional and your mortgage lender. Every circumstance is different, and it is impossible to tell you what your liability will be without knowing much more about your situation.

Make sure you consult a tax professional, the lender, and perhaps an attorney in your area familiar with "short sales" before taking the next step.

Stigma Surrounds Home Ownership. Emotional Currency Undervalue

2010-09-27T10:23:00.000-07:00

The Obama administration has tried gallantly to combat the financial crisis. Using virtually every conceivable tool at its disposal to keep people in their homes and prevent an outright collapse in home values.

Initial Jobless Claims: totals the number of Americans who filed for first time unemployment benefits in the previous week

Continued Claims: totals the number of Americans who continue to file for benefits due to an inability to find a new job

Extended and Emergency Benefits: totals the number of Americans who have exhausted their traditional benefits and are now receiving extended and emergency benefits

Here are the results:

Initial Jobless Claims: +12,000 to 465,000 vs. estimates for a read of 450,000. WORSE THAN EXPECTED. Prior week’s data was revised worse to show 3,000 more claims.

Continued Claims: -48,000 to 4.489 million vs. estimates of 4.460million.

Extended and Emergency Benefits: +208,000 to 5.17million.

This worse than forecast data was a positive for mortgage rates. Bonds rallied on the news and mortgage rates looked like they were set to correct today.

How does one person get from under a mortgage with some one whom is not their spouse, but is on the mortgage with them?

2010-09-21T13:59:00.000-07:00

Mortgage Question of the Day?

How does one person get from under a mortgage with some one whom is not their spouse, but is on the mortgage with them.

I think you are asking how to "get out from under" a mortgage. (There appear to be words missing in your question.) Once you have signed the mortgage, it does not matter whether the co-mortgagor is your spouse, a friend or a stranger. Both people who sign the mortgage are fully responsible for repayment of the debt.

If one mortgagor does not pay, the other one is fully liable for the entire amount of the mortgage. Even though co-borrowers may have personally agreed that each one owes 50% of the payments, that agreement is immaterial to the mortgage lender. If, for example, the two of you have a mortgage for $400,000 and one of you loses his job or moves away, the OTHER one is responsible for the full $400,000. Simply put - every person who signs a mortgage is responsible for 100% of the mortgage amount. The bank is not required to divide up the loan and decide "who pays what."

-written by: Tim Rood

mortgage question of the day?????

2010-09-16T10:22:00.000-07:00

Today's Mortgage Question Of The Day:
Q: Can gifted money be used towards a downpayment? If so, does that money have to be reported to the IRS as gifted money?

A: You are basically asking two different questions. Let's separate the two. Yes, gift money can be used towards a downpayment. FHA loans for example allow 100% of the downpayment to be gift funds. Most FannieMae lenders allow 100% of the downpayment to be gift funds as long as it is a 20% downpayment.

Some lender/investors do have restrictions on this so it's best to talk with your lender before making an assumption. If they don't like your solution then shop around.With less than 20% downpayment using conventional loans typically the Mortgage Insurance providers are going to require some percentage of the funds to come from your own account, typically that is 5%, but you should check with your lender to verify.

The final thing on gift funds is that typically they need to be from a "relative", Parents, siblings, cousins, etc. With regards to the IRS that's really a tax question for a tax advisor to answer. In my experience there is no reporting between the gift letter/funds that are provided to the lender and the IRS.

Market Snapshot

2010-09-16T09:44:00.000-07:00

The Obama Administration appears to be tossing in the towel on consumers in this recovery. I missed it yesterday but one of our subscribers brought it to my attention; in the WSJ yesterday Sec of Treasury Geithner made this comment; "He said the U.S. can no longer rely on consumer spending, which has long powered the economy, to be the growth engine that leads the recovery this time around and said Washington needed to plant the seeds for business investment and exports." Well, in a perverse sense he has a point, the admission that consumers in the US are not going to bring the economy out of its slump and exports have to drive it forward indicates this administration has tossed in the towel. Exports, what exports? The US gave up its export base 20 years ago, we cannot compete in the export markets to the levels that will change how the US economy will grow itself out of this slump. Consumers in the US have accounted for 65% to 70% of GDP growth, although consumer spending will likely increase from what we have now, to think that we can rely on exports is wishful thinking in the short and intermediate term. To focus on exports is long overdue, however to be competitive US wages will have to decline in order to compete with low wage major countries like China, Japan, Indonesia, India and others; that won't happen anytime soon. This economic recovery cannot be speeded up, that is a hard pill to swallow but we all better get used to it. Planting the seeds is the first step, but it takes years for a seed to grow into a tree.

The interest rate markets rebounded the past two days to technical levels of resistance. This morning so far markets are testing resistance levels in mortgages and treasuries. If the 10 yr note can push below 2.65% (now 2.69%) rates will likely continue to slip lower; however the near term is still slightly negative; 4.00% for the 10 yr note is what many are thinking. If the 10 yr were to climb to 4.00% mortgage rates on 30s will increase 10 basis points in rate from current rates.

Current Mortgage Rates

Best Rates

	Yesterday	Today
30 Yr FRM	4.37%	4.39%
15 Yr FRM	3.78%	3.80%
FHA 30 Year Fixed	4.39%	4.42%
Jumbo 30 Year Fixed	5.55%	5.58%
5/1 Yr ARM	3.53%	3.55%
Rate Disclaimer Updated: 9/15/10 5:14 PM

National Average Mortgage Rates

	Rate	Points	Change
30 Yr FRM	4.35%	0.7	0.03%
15 Yr FRM	3.83%	0.6	0%
1 Yr ARM	3.46%	0.7	-0.04%
5/1 Yr ARM	3.56%	0.6	0.02%
Source: Freddie Mac Updated: 9/9/10 2:00 PM

Credit Tips

2010-06-01T13:43:00.001-07:00

"Over 70% of consumers identify errors on their credit report. 25% of those are serious enough to deny consumers...acess to credit, preferred interest rates, or even a job." ("Real Estate" magazine, 03/09).
It is important to make sure your report is up to date and accurate.
Obtain a copy of your credit report and review the accuracy of the information. Under federal law, you are allowed 1 per year from each of the three major reporting bureaus. Log onto www.annualcreditreport.com for more info.
Be careful of making large purchases right before applying for a home loan. This may affect your qualifications.
If you cannot make a payment on time, contact the lender to make other arrangements BEFORE it's too late.
Do not fall victim to scams that claim they can remedy your credit score. Only time and consistent, timely payments can improve your credit report.

For more information contact "Florida's Mortgage Expert," at 561-654-1886 or www.floridasmortgageexpert.com

US Foreclosures Fell in April, Signaling Improvement

2010-05-13T10:51:00.000-07:00

Foreclosures in the US fell by more than 2 percent in April from a year earlier, the first year-over-year decline in the five years RealtyTrac has been reporting the data.
The number of Americans receiving foreclosure notices was down 2.4 percent in April from a year before and 9 percent lower than March 2010.
Experts say the foreclosure situation is slowing, and may have hit a plateau.
“I think you shouldn’t read too much into a one month dip, even if it is the first time,” said Rick Sharga, senior vice president of RealtyTrac. "It really isn’t that we’re out of the woods. It’s more of a process issue," he said, explaining that lenders are working through a backlog of troubled properties.
In all, one in every 387 homes in America received a foreclosure notice, which is defined as a notice of default, auction sale or bank repossession.
“The data is starting to indicate that it is stabilizing,” said housing analyst Patrick Newport of IHS Global Insight. He cited Fannie Mae’s [FNM 1.06 0.03 (+2.91%) ] first-quarter results released Monday, which indicated that single-family mortgage delinquencies were starting to slow down.
“Although our single-family serious delinquency rate increased during the first quarter of 2010 and remains high, our single-family serious delinquency rate grew at a much slower rate during the first quarter of 2010 than during each quarter of 2009,” Fannie Mae said in its filing.
While the foreclosure rate dropped, the RealtyTrac data shows that bank repossessions—also known as real estate owned, or REO—hit a record high in April; a total of 92,432 homes that were taken back by the lender. That’s a 1-percent increase from the previous month and a 45- percent increase from April 2009.
“If we start creating jobs, I think the situation will start getting better,” said Newport.
The ten states with the highest foreclosure rates were little changed from the previous month. According to the RealtyTrac report, Nevada remains No. 1 for the 40th straight month, with one in every 69 properties in the state getting a foreclosure notice.
Arizona ranked second with one in every 169 households receiving a notice, followed by Florida (one in 182 households), California (one in 192 households) and Utah (one in every 221 households.)
Vermont had the lowest rate, with one in every 26,051 properties receiving a foreclosure notice.

-Florida's Mortgage Expert
05/13/10

High Credit Scores are possible...

2010-05-10T09:10:00.001-07:00

Learn from some credit scoring superstars.
While most Americans strive for good credit scores, others take special care to achieve great ones. Meet some credit score superstars -- and learn why and how they keep those precious three digits so high.

Good Scores Key to Financial Health
Credit scores were developed as tools to help banks and businesses make objective decisions. To generate them, a mathematical formula pulls credit report data and transforms it into a numerical rating. FICO (FICO) scores range from a low of 300 to a high of 850, and according to MyFico.com, mortgage lenders consider anything above 760 as ideal. While it is the dominant score, FICO isn't the sole scoring model. For example, the three major credit reporting bureaus -- TransUnion, Experian and Equifax (EFX)-- produce the VantageScore, with a scale ranging from 501 to 990.
Despite ranking system differences, a higher score always indicate less risk, and having them makes you more appealing to lenders, employers and landlords.
Consequently, focusing on scores is only natural. "People are drawn to this subject because it allows them to measure something that they equate to financial health," says Jose Rivas, national education manager for Consumer Credit Counseling Service of San Francisco.
That focus, however, can turn into anxiety, with conflicting information often to blame. "One article states that consumers should close their unused accounts," says Rivas, "another states that consumers should never close their accounts." For this reason, getting the facts from reliable sources is essential. Like the following high achievers, you can create a terrific credit score with real knowledge and a specific sense of purpose.
Credit Score Vigilante
Dan N, a professional comedian who constantly travels between New York and Los Angeles, has carefully built an 830 FICO score. Doing so enabled him to negotiate preferential terms with his premium reward card. "I was able to drop the annual fee for my $450 per year American Express card to $150!" Dan also cites the "feel-good" factor: "It's a comfort to know that wherever I go and whatever I apply for, I can get it."
Vigilance is Dan’s strategy. "If there's anything at all that might affect my score, I ask a ton of questions and go to the Internet and do as much research as possible. If I test drive a car, or sign up for a health club, I look at the fine print very carefully to see if they have a right to hit my credit file with an inquiry." He's also programmed everything online "so that all of the bills pay themselves, and any and all credit card balances are paid off immediately."
Protecting a Long History of Timely Payments
Want the very best vehicle loan available? Let your numbers do the talking. When Brenda A, founder of TheCaregiversVoice.com, out of Pearblossom, Calif., was applying for a car loan, her 849 score helped her secure top financing. "Saving thousands on interest charges is a tremendous motivator," says Brenda, who locked in 0 percent interest for five years. A loan with a 4 percent rate would have cost her an extra $3,200 on the same vehicle.

Brenda attributes her impressive score to a long history of timely payments. "And on those rare moments when a bill sneaks under some paperwork and it's either late or due that day," says Brenda, "I call and take care of it." She believes her loyalty to the same banks (three credit accounts -- not too many, not too few) also helps. "Instead of constantly shifting to capture the best deal, discount rate, rebate points, etc., I've stuck with the same folks for years."
Regular Charging, Zero Balances
At last check, marketing company president Paul E, from Bloomsbury N.J., holds a 990 VantageScore. For him, it's a matter of honor and integrity. "A high credit score indicates your name and your signature on a contract have meaning. It's an indicator of certainty ... of character. It would be difficult to trust someone with a poor credit rating to the same extent you can trust someone with a higher credit rating."
Paul maintains his high score by using his business and personal credit cards regularly and paying them off every month. "It's not magic -- pay your bills on time and pay the debt. Make it a priority. Pay attention to spending."
Keeping the Right Mix of Credit
"Every time someone runs my credit they say, 'Wow, I almost never see someone with credit that high,'" says Carrie R, founder of pocketyourdollars.com in Minneapolis. She keeps it first-rate to preserve her autonomy. "As someone who got out of $50,000 in debt in less than three years, I take a lot of personal pride in my financial freedom." Though Carrie has no plans to borrow money again, "I have no barriers when it comes to employment, insurance or other areas of life where my credit score is used to assess the kind of risk I am."

Besides "the obvious things like pay my bills," Carrie says she increased her score by talking to her credit union loan officer, who said an overabundance of idle retail accounts was driving it down. She had opened the cards randomly during in-store promotions, but never really charged on them, so there was no history to protect. After formally closing the accounts, her scores that were previously in the 720 to 740 mark rose to the 800s.
Does the Perfect Credit Score Exist?
Pursuit of excellence is often wise, but does 'perfect' exist? Yes, says Craig W, public affairs director for FICO. "Several thousand consumers do in fact have the highest possible FICO score."
While not everyone will reach the credit score apex, you can get close by consistently following three simple guidelines:
1. Pay all bills on time.
2. Keep credit card balances low.
3. Take on new credit only when you really need it.

-Florida's Mortgage Expert

Good news for buyers returning to the market

2010-04-20T09:21:00.001-07:00

Going forward, borrowers who previously experienced a deed-in-lieu of foreclosure won’t have to wait as long to get approved for a subsequent mortgage.
Last week, mortgage financier Fannie Mae changed its required waiting period (the amount of time that must elapse after a pre-foreclosure event) to reflect current market conditions.
In the past, borrowers had to wait four years after a deed-in-lieu of foreclosure to get approved for a mortgage with Fannie Mae.
That time period has been slashed to just two years, though the maximum loan-to-value is limited to 80 percent. After four years, the maximum LTV climbs to 90 percent.
Pre-foreclosure sales and short sales, which Fannie categorizes as the same event, a property sold in lieu of foreclosure for less than the total amount owed, will also have a two year waiting period with the same LTV requirements.
Additionally, certain extenuating circumstances will allow borrowers to get loans after just two years at up to 90 percent LTV.
In all cases, borrowers must re-establish their credit, meaning they must meet minimum credit score requirements and eligibility requirements.
Fannie Mae and Freddie Mac currently require a five-year waiting period after foreclosure to re-establish credit; the waiting period is only three years for an FHA loan and two years for a VA loan.

Florida offers help to some with home down payment

2009-06-30T13:37:00.000-07:00

Florida offers help to some with home down payment

Starting Wednesday, Florida hopes to stoke its real-estate market by becoming one of the few states to offer $8,000 in down-payment assistance to qualified homebuyers so they can benefit upfront from a new federal tax credit.
The state Legislature set aside $30 million to create the Florida Homebuyer Opportunity Program, aimed at first-time buyers and others who have not owned a home for at least the past three years. To qualify, an individual cannot earn more than $75,000 a year, while couples can't earn more than $150,000.
"Here in Florida, rather than qualified buyers waiting to get the tax credit on the tail end of the process, in the form of a credit after they have filed the tax returns, it will allow them to get it upfront and let them use it for down-payment assistance and fees," said David Hart, vice president of legislative and government affairs for the Florida Home Builders Association. He estimated that about five states are taking a similar approach.
The state's program takes effect Wednesday, though the money isn't expected to be available until later in July or August. The funds are being distributed through local government and nonprofit agencies that already provide down-payment help through the State Housing Initiatives Partnership, known as SHIP. Qualified homebuyers are entitled to $8,000 or 10 percent of the property's purchase price, whichever is less.

18 months to repay

Buyers who receive a down payment must file for the tax credit on their federal tax return next year and then repay the agency that lent them the assistance, according to the program, which was proposed by state Sen. Mike Fasano, R-New Port Richey. The program gives buyers who qualify and get funds 18 months in which to repay the state, which allows them plenty of time to realize the benefits of the tax credit, part of the federal government's massive stimulus package, the American Recovery and Reinvestment Act of 2009.
The state program is intended to boost Florida's slumping housing market. While the number of existing-home sales locally and statewide have been up for months now compared with a year ago, prices continue to be down 30 percent or more year-over-year depending on the market, according to the Florida Association of Realtors.
To receive the state's down-payment assistance, the buyer must close on a property by the end of November. Housing agencies are still working out the details of how to distribute the funds, and state officials caution that four or five months is a relatively short time in which to qualify, find a home, obtain a mortgage, close on the property — and use the money. Qualified buyers who do not take advantage of the state program may still take the federal tax credit, which is currently set to expire in December.
Some local homebuilders are hopeful the state's decision to convert the tax credit into upfront money will help spur the slumping market. George Glance, who oversees operations for KB Home in Central Florida, said that, while historically low interest rates and falling home prices are enticing many first-time buyers into the market, many of them struggle to come up with a down payment.
"Allowing the federal tax credit to be used toward a down payment would be a great advantage to a first-time homebuyer trying to obtain the dream of homeownership," Glance said.
One consumer advocate considers the state program flawed, however, because of the way the state is distributing the money. Walter Dartland, director of the Consumer Federation of the Southeast, said he fears some Florida cities and counties will run out of cash before the end of November, even as others wind up with excess funds that won't get used.

Will it be used?

"Each county or municipality gets a share of the money. In smaller counties, no one is going to buy any houses — there're so many for sale," Dartland said. "The concern I have is that it won't be used. If there's any money left on deck, it won't stimulate anything."
He proposed that the money all come from a single, statewide pot. But state officials said they must abide by rules set by the Legislature, which call for the funds to be distributed through local housing agencies.

Info By Mary Shanklin-Sun Sentinel

Beware of Credit Card Changes 2

2009-06-24T13:36:00.000-07:00

As I discussed last week, Credit Card Companies are blind siding us with changes that only benefit their pockets.

Minimum payments
You might have to start paying more each month.
Chase increased the minimum payment from 2% to 5% for cardholders with large balances.

Credit limits
Many card issuers are slashing credit limits despite your credit/pay history.
American Express has taken the most heat over slashing credit limits. Nearly half of its portfolio underwent a major overhaul that included cutting limits by 50% or more. Other issuers have cut limits, too, sometimes to amounts lower than the balances owed, triggering over-the-limit fees on a few accounts.
Lowering credit limits also can cause immediate damage to the credit scores of consumers who carry balances.

Rewards
Rewards programs have become less rewarding. Be sure to carefully review any "rewards programs" you are enrolled in.
What's behind the upheaval?
Why so many changes? Why now? Especially after the federal government has pumped billions into struggling banks to help bolster lending?

Consider these reasons:

A perfect storm. Banking and credit industry observers say a tsunami of financial, regulatory and economic forces is leading issuers to drive up the cost of borrowing on credit cards. The recession, financial market turmoil, the frozen credit card securities market, job losses and growing credit card payment defaults are fueling some of the changes.

Upcoming regulations. Card issuers are also gearing up for 2010, when sweeping changes in federal credit card regulations will go into effect
• Profitability problems. Moody's, a New York credit rating agency, used a stress analysis to evaluate the strength of the six biggest credit card issuers -- Bank of America, Chase, Citi, American Express, Capital One and Discover -- and found that maintaining profitability this year will be a struggle for some. The six collectively hold 80% of the nation's nearly $1 trillion in outstanding credit card balances. Can we even fathom these numbers? I sure can't!

There's a real danger in what card issuers are doing. Fewer than 10% of card users default on their payments or pay late, yet issuers are increasing rates on some of their on-time customers. These companies may be damaging the relationships with good customers they'll need for long-term growth with all of these changes.

What you can do
Read and Review all correspondence from your card issuers. It may not be easy reading, but it can have a big impact on your finances.

Talk back: Have you been hit by sneaky credit card changes? Examine your statement to see if the credit line has been lowered, if the APR (annual percentage rate) has been raised and if your minimum monthly payments have been increased.

As for those people who are closing accounts in protest of the changes, proceed with caution. You may win the battle, but you will lose the war. Closing credit card accounts can lower consumers' credit scores, especially for older accounts that demonstrate lengthy credit histories.

In addition:

Continue to use your cards, moderately. Charge something small and pay off your balance at the end of every month.

Redouble efforts to make every payment on time.

Pay down debts to build good credit scores.

Comparison shop. Good deals still exist for those with good credit.

I have Debt Settlement Plans that will help you lower your overall debt by 50%, pay off your balances in 12-36 months, and get rid of all that interest once and for all.

Sources: Connie Prater from CreditCards.com

Beware of Credit Card Changes

2009-06-22T13:35:00.000-07:00

Have you noticed anything different about your credit card accounts lately? Read the fine print. Really read it. Chances are the interest rates have crept upward, fees have increased or rewards rates have been diluted, even if you pay your bills on time.
Many of these changes in account terms have already taken effect. Still others, such as the return of routine annual fees, may be on the horizon. Changes have come quickly in interest rates, fees, minimum payments, credit limits and rewards, and none of them favors consumers.
Interest rates:
Although banks are scooping up billions in bailout money or borrowing money from the Federal Reserve at rates as low as 0%, they aren't passing on those savings to consumers. Credit card interest rates have increased for many major card issuers and even doubled or tripled for some consumers who pay their bills on time. Bank of America is raising interest rates on about 4 million customers with balances. Citigroup and Capital One have also jacked up rates.
Credit card interest rates are typically pegged to the prime rate, which has fallen from 5.25% a year ago to 3.25% now. But the national average rate for credit cards has actually risen over that period, moving from 11.3% to 12.4%, according to the CreditCards.com's weekly rate survey of large card issuers. How is this possible and how can they get away with this?

Fees:
Card companies have become fee addicts. According to industry consultant R.K. Hammer, card issuers raked in $19 billion from penalty fees in 2008, up 5% from 2007. This year, penalty fee income is expected to rise to a record $20.5 billion. Can we even comprehend this much money?

Fees come in many forms:
• Look Out for increases in Balance transfer fees, Cash advance fees, and Foreign transaction fees. Fees that were once waived, will now be charged. So much for the banks looking out for the little guy!
Tomorrow we will learn about other sneaky tricks to take your money and what you can do about it.

Mortgage Market Commentary

2009-06-13T13:28:00.000-07:00

This week is light on economic reports, as investors will be focused on the large Treasury auctions June 9-11, particularly the longer term 10yr and 30yr offerings Wednesday and Thursday. With recent economic data generally favorable, investors believe the Fed will not increase it's purchases of MBS (mortgaged backed securities) or Treasuries, so the level of demand for the new bonds will be closely watched. The most significant economic data will be the Retail Sales (which account for 70% of economic activity) report released on Thursday, along with Jobless Claims and Business Inventories. Wednesday is the day for the Mortgage Bankers Association's weekly survey of mortgage applications which provides information on purchase activity and refinance demand. 30yr fixed mortgage rates jumped last week to 5.45%, from a low of 4.85% in April; which may sideline consumers planning to refinance or purchase their first home. Costs are now higher for home buyers than they were in December. However, great 1st time home buyer incentives still exist and will off set any increase to rate and costs. Also, with the price of homes still dropping, NOW IS STILL THE TIME TO BUY!!

More Gems for First Time Home Buyers

2009-06-03T13:27:00.000-07:00

Perhaps the shiniest Gem: $30.1 million for down payment assistance programs. Beginning July 1, those who qualify for the federal first-time home buyers tax credit will be able to apply for down payment assistance in advance of closing and then repay the amount borrowed when they get their tax refund.

Call me at 561-963-6432 for more info.

First Time Home Buyer Tax Credit Facts

2009-06-02T13:25:00.000-07:00

For first time home buyers in this market, there are currently great incentives to make the buying process better than ever. For example, there is now an $8000 dollar tax credit for home buyers purchasing a primary residence before December 1, 2009. To sweeten the deal, HUD has announced that FHA consumers can access these funds when they close on their home so they can be used as a down payment.

Call me for more details on this and the most updated mortgage and real estate news!