Top Five Cities Where Buying Beats Renting
          ——————————————————-
            #       City                 State       Price:Rent Ratio
          ——————————————————-
            1     Las Vegas            NV                  6
          ——————————————————-
            2      Detroit                 MI                   7
          ——————————————————-
            3       Mesa                   AZ                   7
          ——————————————————-
            4      Fresno                 CA                  7
          ——————————————————-
            5     Arlington              TX                   8
          ——————————————————-

            Top Five Cities Where Renting is Cheaper than Buying
          ——————————————————-
            #       City                 State       Price:Rent Ratio
          ——————————————————-
            1    New York             NY                  36
          ——————————————————-
            2    Fort Worth            TX                   32
          ——————————————————-
            3     Omaha                  NE                   27
          ——————————————————-
            4     Seattle                  WA                 24
          ——————————————————-
            5   San Francisco         CA                  24
          ——————————————————-

NOTE: The price-to-rent ratio is the median listing price divided by the annualized median rent.
< 15 —–BUYING is less expensive than renting, 
> 20—–RENTING is less expensive than buying.

                         Price:Rent Ratio  Price:Rent Ratio   % Change
     #     City     State   July 2011       January 2011
   --------------------------------------------------------------------
     1     Miami      FL       13             6              112%
   --------------------------------------------------------------------
     2    Phoenix     AZ       8              8               1%
   --------------------------------------------------------------------  
     3   Las Vegas    NV       6              6              -7%
   -------------------------------------------------------------------=
     4    Tucson      AZ       13             14             -10%
   --------------------------------------------------------------------
     5     Mesa       AZ       7              8              -11%
   --------------------------------------------------------------------
     6  Sacramento    CA       8              13             -17%
   --------------------------------------------------------------------
     7    Fresno      CA       7              11             -32%
   --------------------------------------------------------------------
     8    Detroit     MI       7              12             -39%

   --------------------------------------------------------------------
See full Article

In Florida only the bank who owns your mortgage can foreclose. So why on earth are they still practicing and engaging in activities that could be construed as CRIMI…
watch this one

Is the “In House Lender-Ok
Or a RESPA Violation?

What do you think?

What does this mean for Mortgage Applicants?
If an underwriter does a search and may find information that is different or contrary to what was on your application you may get a denial, how will this all come to play i don’t know. to keep thigs on the safe side here are 5 simple suggestions:

• Don’t post any private information on line you don’t want your employer to find today or kids to find out about you in 20 years.

• Keep “Private Discussions” private- OFF LINE
• If you use Social Media for business CHOOSE WELL your connections
• Keep your communications on a professional basis
• Stay away from gossip you never know how it will backfire

Check this week’s Mortgage Video News Channel
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The legislation was introduced by New York Attorney General, Andrew Cuomo. It was designed to decrease the likelihood of appraisal fraud by removing the individual most inclined to push for inflated value (the loan officer/realtor). This rogram severed communication with the appraiser. Whereas that may sound logical, the reality is that the extra layer of bureaucracy increases cost, slows down the loan process, decreases customer service and creates an increased potential for miscommunication

My main points of contention:

1. Appraisals are now more expensive for the consumer, because the third party company charges a fee to process the order. The consumer, whom the legislation was designed to protect, can expect to pay more.

2. HVCC is likely to create unnecessary customer service issues. I am more likely to follow up on a delinquent appraisal than a third party company. There are often mistakes on the appraisal. I am more likely to catch errors due to my direct interaction with the client. If I can’t address appraisal issues as they arise, the client becomes irritated and frustrated.

3. Going through a third party Appraisal Management Companies (AMCs) is inefficient. These unregulated entities (AMCs) don’t acknowledge orders consistently, they charge additional fees and the turn-around times are slow.

4. Whereas I used to be able to use local appraisers who knew every detail about their market, I am now forced to utilize large national companies who order the appraisal. Each AMC has a roster of appraisers at their disposal. There is no guarantee that the appraisers working for the AMC will be skilled or knowledgeable about the local market.

5. Payment methods vary between AMCs. There are some that require the loan officer to collect payment from the borrower. If I collect the payment from my client, but have no involvement with the appraiser and they make a mistake, it is perceived as my fault, which negatively impacts my relationship and communication with my client.

6. I have developed outstanding relationships over the last 7 years with appraisers all over the country. These relationships are based on an appraiser’s cost, speed and the quality of their work. Independent appraisers can no longer rely on the patronage of satisfied mortgage professionals and realtors. They will be forced to work with the AMCs or starve.  Appraisers are being asked to work for less, though the AMCs are charging borrowers more.

7. In the past you could opt to pay for the appraisal at the closing. Currently appraisals must be paid for up front.  If the loan officer needs to change lenders before the closing for any reason, the borrower may have to pay for a new appraisal, incurring additional cost.

8. How many loan officers have had to get two separate appraisals over the last month? On every appraisal, the appraiser must check one of three boxes regarding local market conditions.  The options are: “market is appreciating,” “market remains stable” or “market is declining.”  Given the nationwide decline in home values, appraisers are most likely to cite “market is declining.”  This may prompt the underwriter to request a second appraisal.  

9. FHA has not adopted the HVCC. It is not requiring lenders to use the AMCs.  However, many FHA lenders are using AMCs anyway, charging even more for the service than Fannie Mae and Freddie Mac.

10. As a loan officer, I feel ridiculous telling realtors and clients that: I don’t know who the appraiser will be, I can’t use anyone they recommend, I don’t know when it will be done and I hope it doesn’t’t detrimentally impact the closing.

I am not the only one frustrated with the new policy. A quick Goggle search on “HVCC nightmare” yielded numerous articles discussing issues caused by HVCC regulations, including the following story from Maryland.  

An investor purchased a property for $375k cash at a trustee sale. The property was listed for $450k on MLS. After reviewing multiple offers, they accepted a final contract price of $459k.

The client wanted to do a conventional loan. The loan officer was limited in terms of investor. They selected Flagstar, because Flagstar does not have a 90 day anti-flipping policy. They scrutinize the appraisal.

The loan officer submitted the order to Flagstar’s AMC. The appraiser was given all of the information on the transaction; including the listing, previous trustee, sale information, offers and counter offers, executed contract, 24-month chain of title, etc. The appraiser measured the property inaccurately, by 500 sq. ft. As a result, they used the wrong comps. Rather than calling the agents about the discrepancy between purchase price and appraised value, they submitted a report with a value of $400k.

The buyer freaked out. The seller freaked out. Both agents freaked out. The buyer’s agent emailed the appraiser to inform them of the error. The appraiser amended the report to reflect the correct square footage and provided new comps. The appraiser uploaded the revised report to Flagstar’s AMC; however, the AMC had not requested the revisions. They contacted the appraiser to ask why the report was amended. The appraiser told them that the buyer’s agent pointed out errors.

HVCC VIOLATION! The agents are not allowed to contact the appraiser either, despite the fact that the agent is the person who grants the appraiser access to the property. ALL communication has to go through the AMC. 

As a result, the appraisal was voided. Flagstar would only accept the original $400k appraisal. The deal is dead, because Flagstar was the only lender that would allow flipping in less than 90 days. Dead loan. The seller will have to accept the next offer in line.

The new appraisal system is wreaking havoc on home values and transparency.  It is unfair to the consumer.  This nightmare could slow economic recovery in the real estate market. The system that we had before was flawed, but this system is no better. The National Association of Mortgage Brokers issued a “Call to Action” this week. Please take a moment to email hvcc@namb.org and tell them your horror stories. 

Courtesy of Leslie Davis an Examiner Author from Atlanta. http://www.examiner.com 

My reply to Leslie

Leslie

I too have been using 2 appraisers for 14 years.

If I can’t have a professional discussion for the benefit of my client how do I help them?

They will never give me a # but they can tell me if we are in or out of line. Not waste my client’s money or time and the bank too.

With the new system appraisers submit a bid on a fee they will charge. The Appraisal Management Company (AMC) looks at this bids list and guess who gets the job? Yap the cheapo one.

PRONLEM 1-
The professional appraisers will be out of business as they cannot do a “GOOD JOB” for $150, $175. Who will be left? You can answer it.

PROBLEM 2-
Buyer pays $350-$400 to the AMC Company, appraiser who does the job gets $150-$200. Who pockets the fat? You can answer that too.

At the end WHO LOOSES? the very person this system “Meant to Protect” the CONSUMER, and the whole system suffers as we are now.

Let’s get rid of the problem NOT choke the market.

Warm regards

Racheli Smilovits

Watch the HVCC video https://www.thinkbigworksmall.com/public/showArchiveVideo/1/4909

Here is how you can help Sign the HVCC Petition http://www.hvccpetition.com/

Together we can all make a difference

With mortgage rates returning to levels seen before the Fed pledged to buy up billions in mortgage securities, it might be time to turn to a costly Plan B, subsidizing mortgage rates.

Rising interest rates have already extinguished a short-lived refinance boom, with applications dropping precipitously over the past three weeks.

Mortgage rates, which slipped to a record low 4.78 percent on the popular 30-year fixed as recently as early April, have since risen above 5.50 percent, following the surging 10-year bond yield.

So now it appears as if the Obama Administration will need to come up with something more, which could be in the form of explicitly guaranteed rates.

Remember that whole plea for 4.5 percent mortgage rates to stabilize housing?

Then the National Association of Home Builders went a step further, calling for interest rates as low as 2.9 percent to spark sales and shed inventory; that wild proposal clearly fell on deaf ears.

Now the newly formed Housing Working Group of Business Roundtable, composed of the nation’s top CEOs, has called for lower mortgage rates to stimulate the housing market and lead an overall economic recovery, but it appears the only way that will happen now is with subsidized rates.

Unsurprisingly, the National Association of Realtors applauded the efforts of the roundtable group, asking for more concessions to spark flagging home sales and buoy corresponding home prices.

“NAR has called on Congress and the Obama administration to expand the first-time home buyer tax credit to all home buyers, regardless of income,” the Realtor group said in a statement.

“In addition, it is imperative to maintain mortgage interest rates below 5 percent, make the loan limit increases permanent, and strengthen foreclosure mitigation and loan modification efforts. These are all actions that BRT is fully supporting and we welcome their involvement.”

Seeing that lowering mortgage rates seems to be the Fed’s main solution to this housing mess, it appears likely something will be done to get rates back down near record lows.

Unfortunately, the repercussions of such a move could extend the housing crisis, keeping home prices elevated and subsequently pushing future home buyers out of the market.

Then there’s the cost of funding such a program, and the fact that subsidized rates tend to benefit the wealthiest of homeowners.

Ugh.

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got a question Email us info@loans-4-u.com

 courtesy of “The Truth about Mortgage”

The days of solely blaming subprime lending for the housing collapse are far behind us (I hope), but the risky, high-cost lending certainly played a hand in the mortgage crisis.

The Center for Public Integrity released an interesting report documenting the actions of so-called “mega-banks,” which supported such lending that set off a global economic meltdown.

Unsurprisingly, 21 of the top 25 subprime lenders were financed or owned by banks that received TARP money.

Investment banks Lehman Brothers and Merrill Lynch both owned and financed subprime lenders, while others like Credit Suisse and Goldman Sachs were major financial backers of subprime lenders.

Nine of the top 10 subprime lenders were based out of California, along with the top five, which include Countrywide Financial, Ameriquest Mortgage, New Century Financial, First Franklin, Long Beach Mortgage.

Of course, twenty of the top 25 subprime lenders have either closed shop, stopped lending, or have been sold to avoid bankruptcy.

Eleven lenders on the list have had to make payments to settle claims of widespread lending abuse, including four who received bailout money regardless.

Check out the list below detailing the insane loan volumes of “high interest” mortgages between 2005 and 2007; you’ll notice many of the names are no more.

Courtesy of www.TheTruthAboutMortgage.com