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Here is my best advice I got from My Abba (Dad in Hebrew)

Whenever I had to make a decision between 2 options, my dad always told me to take a piece of paper make a line in the middle from Top to Bottom and Left to right. Write the best and the worst that it would be with each choice. Once the choices were looking at me from the page it was much easier to make a decision. the best choice actually jumps at me.

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But will they refund You- a Home Buyers the looses due to your Mortgage Rate Lock Expiring?

Home buyers could not close on homes because no Flood Insurance was available. Meantime their Rate Lock expired just in the same time as the Fed stopped buying Mortgage backed Securities which caused the mortgage rate to soar in the last 2 weeks.
Is this a coincidence or what…
All this in addition to the already limping Real Estate market.

Could Congress Be held accountable?

The National Flood Insurance Program, which has been on hiatus for two weeks, is a component of a legislative effort that is Congress’ first priority as lawmakers return from recess. Congress had failed before the recess to pass a bill extending a long list of federal programs, including the NFIP, leaving the business of flood insurance virtually paralyzed.

The extension bill had been blocked by Senate Republicans who object to its spending, saying it isn’t paid for with matching cuts or savings elsewhere. The chief spending in the legislation is associated with the extension of unemployment benefits, but NFIP’s inclusion meant that it, too, fell into hiatus after the March 28 expiration. The legislation would only extend it to the end of April, though, meaning yet another extension bill would be needed within two weeks.

The extension is expected to also be back-dated to fill in the program gaps — both for the past two weeks and also for the two days at the start of March in which the NFIP experienced another hiatus. Until the program is funded again, no new policies can be written, nor renewals granted.

As Congress prepared for its April 12 return to session, a coalition of insurance and real-estate organizations sent a letter to leaders in the House of Representatives and Senate, asking them to get NFIP back on track.

“Failure to reauthorize the NFIP expeditiously when Congress returns will severely harm real estate markets, putting consumers at risk of uninsured losses and potentially putting additional tax money at risk to cover relief efforts,” said the letter, signed by the American Insurance Association, National Association of Mutual Insurance Companies, Property Casualty Insurers Association of America, Independent Insurance Agents and Brokers of America, The Financial Services Roundtable and groups concerned with the real estate fallout. “If Congress fails to reauthorize the NFIP, it will still be paying for post-disaster relief for flood victims, yet it will be unable to collect premiums for renewing current flood insurance policies, which amounts to $2.85 billion annually. Devastating storms in the Northeast underscore the need for congressional action to reauthorize the NFIP immediately.”

The bill was the first item on the Senate’s April 12 calendar, though lawmakers may face some procedural hurdles before a final vote can take place.

“The level of irresponsibility that we’ve seen out of Washington on the flood program — they just keep outdoing themselves,” said Jimi Grande, senior vice president of federal and political affairs for the National Association of Mutual Insurance Companies. He said the lawmakers have fallen into a “circus-like atmosphere surrounding the flood debate” and “they’ve been lucky that we haven’t had another really bad storm season.”

Insurers are meanwhile paying claims with the expectation they will be reimbursed. “Only in Washington does that make sense,” Grande said.
Courtesy of Insurance News

Today is 4-13-2010 No word from Congress yet!

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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Get your Saturday http://budurl.com/zq39You’ll be glad you did

]]> http://www.yourmortgagecafe.com/2009/07/05/4th-of-july-and-saturday/feed/ 0 http://www.yourmortgagecafe.com/2009/06/14/mortgage-nightmare-hvcc-appraisal-regulation-hurting-the-already-straggling-housing-market/ http://www.yourmortgagecafe.com/2009/06/14/mortgage-nightmare-hvcc-appraisal-regulation-hurting-the-already-straggling-housing-market/#comments Sun, 14 Jun 2009 18:06:39 +0000 Racheli http://www.yourmortgagecafe.com/2009/06/14/mortgage-nightmare-hvcc-appraisal-regulation-hurting-the-already-straggling-housing-market/ If you thought the low rates and tax incentives would quell the storm in the Mortgage and Real Estate market, think again. With the implementation May 1, 2009 of the Home Valuation Code of Conduct (HVCC) regulations, loan officers and realtors are no longer allowed to select or influence the selection of  appraisers.

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”

IN RE: Foreclosure Cases

CASE NO. NO.1:07CV2282, 07CV2532, 07CV2560, 07CV2602, 07CV2631, 07CV2638, 07CV2681, 07CV2695, 07CV2920, 07CV2930, 07CV2949, 07CV2950, 07CV3000, 07CV3029

CASE: 07-cv-02282-CAB

Fourteen pending foreclosure cases were brought before the district court of the Northern District of Ohio by the Plaintiff-lenders invoking its diversity jurisdiction¹. The Court issued an Order requiring submission of an executed Assignment to show and prove that the Plaintiff was the holder and owner of the note and mortgage as of the date of filing of the complaint. In its amendment of the Order, Court further required the plaintiff to submit an affidavit alleging therein that Plaintiff is the original mortgage holder, or as an assignee, trustee or successor-in-interest. Thereafter, the Court judiciously heard the parties’ arguments.

The issue to be resolved by the Court was: Whether or not the documentary evidence submitted by the plaintiff, as trustee for securitized pools of mortgages on behalf of the mortgage investors is sufficient to establish its ownership of the note and mortgage. Corollary to this issue is, whether or not the plaintiff can establish legal standing to invoke the diversity jurisdiction of the federal court.

The Court in addressing the first issue scrutinized the documentary evidence submitted by the plaintiff. It observed that the affidavits it required to be submitted averred that the Plaintiff is the owner of the note and mortgage but as for the Assignments, none was mentioned about the ownership of the Plaintiff. Instead, what was mentioned was the intention of the plaintiff-lenders to transfer the title, interest and all rights in the mortgage upon receipt of a specified consideration and a note to the Plaintiff named in the Foreclosure complaint caption. Moreover, these assignments were prepared by plaintiffs’ counsel and therefore belie the claim of ownership as of the filing of the complaint.

Pursuant to Ohio law, all matters that involve real property must be in writing and in cases of assignment, the assignee is only entitled to receive distribution from the sale of said real property if such interest is recorded in accordance with the requirements of law.

Anent the issue of legal standing, the Court ruled that the Plaintiffs failed to establish their standing. It clarified that before a party can invoke diversity jurisdiction, three constitutional requirements, i.e. proof of injury in fact, causation and redressability. In other words, plaintiff must show that he personally suffered some injury. Moreover, he must establish that he is the proper party, that the suit is the proper mode to obtain relief.

Plaintiffs failed to prove all of these elements by reason of its premature filing of the action. The Court ordered the dismissal of the fourteen foreclosure cases without prejudice.

¹ Kenneth M. Lapine, in his commentary in LEXISNEXIS, explained that there is a trend to file foreclosure cases in federal courts most especially in northeast Ohio because of the clogging of state courts due to already pending foreclosure cases and federal courts are more efficient in the disposition of cases. Moreover, most of the parties in foreclosure cases are domiciled in states other than Ohio; therefore there is diversity of citizenship jurisdiction.

Written by Kevin Levonas and Giselle G.

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