Mortgage News Network

Forclosure projections and Risk Based Pricing

2008-06-29T19:20:00.000-07:00

New tools for assessing mortgage risk. With foreclosures projected to reach 2 million nationwide by the end of next year, bankers are rethinking how they set mortgage rates. Eventually, mortgage pricing may come to resemble pricing for, say, homeowners insurance, which takes into account dozens of factors. Lenders "want to be able to assess the risk, practically down to the biological level, that you won't pay your mortgage," says Keith Gumbinger, vice president of HSH Associates, which tracks the home-lending market.

Housing data: no secrets left. With more innovative real estate Web sites popping up, everyone now knows how much everyone else's house is worth, and consumers will continue to have unprecedented access to housing information that was once found only in multiple listing services. Source: Money

New Trends in Real Estate

2008-06-29T19:19:00.000-07:00

New trends will reshape tastes in homes and transform how you buy and sell, experts say. So what will the housing market of the future look like? Money magazine interviewed developers, architects, lenders, and more, to paint the following picture--Smaller houses. In a February survey of potential home buyers by the National Association of Home Builders, 60 percent said they would rather have a smaller house with more amenities than vice versa. "In the past, people would say 'Give me space and I'll add the features later,' " says Gopal Ahluwalia, the NAHB's vice president of research. Newly built houses will have layouts that can "live bigger" than their square footage would suggest, with rooms that can do double duty, experts say.

FHA Guidelines

2008-06-29T19:13:00.000-07:00

FHA case number assignments on or after 7/14/08, FHA will implement “risk based” MIP Premiums on 1 to 4 unit mortgages?

Some of the highlights regarding FHA’s Risk-Based Premiums are:

UFMIP will range from 1.25 percent of the loan amount (currently 1.50%) for lower risk borrowers, to 2.25% percent for higher risk borrowers.
No borrower who qualifies for a FHA/HUD insured mortgage will pay more that 2.25% on the UFMIP and .55% for the annual premium.
Borrowers with credit bureau scores must be risk-classified by FHA TOTAL Mortgage Scorecard (AUS).
Borrowers with no credit scores will need to be manually underwritten, and the premium will be determined by the LTV.

So what if your borrowers don’t have 3 credit scores….what then?

3 scores…the middle score is used.
2 scores…the lower of the two is used.
1 score…..that score is used.

What if there are multiple borrowers?

If more than one person is applying for the loan, you use the lower of all borrowers.

What if there are multiple borrowers, and one doesn’t have a credit score?

The borrower representing the greatest risk will determine the MIP factor to be used. Example:

If one borrower has a 620 and the other borrower has no FICO score, then the factor to be used would be the “Non-Traditional” factor.

First Time Homebuyers

HUD has always “suggested” that a FTHB complete a pre-purchase counseling course. Now, if they do, they will benefit from a lower UFMIP factor……BE CAREFUL!!!! HUD requires that this class is a one on one, face to face class that has to be completed BEFORE a purchase contract is executed. HUD wants to make sure that the borrowers understand:

Budgeting and Credit
Assessing Homeownership Readiness
Financing a Home
Shopping for a home…including the professionals involved in the process
Maintaining a home

Source: Mortgagee Letter 2008-16 addresses

The Atvantages of FHA Loans - 100% Financing

2008-06-20T12:28:00.000-07:00

The Advantages of FHA Loans

In many regions of the U.S., FHA loans have not been utilized for years, so a lot of real estate agents and mortgage originators aren't familiar with this great resource. The following are a just a few of the recent changes that have made FHA loans a more attractive option again for some
consumers looking to buy a new home or refinance an existing one:

1) Congress passed the Stimulus Act of 2008. During the recent housing boom, home values surpassed FHA loan limits in many regions of the U.S. The recent enactment of this important legislation, however, increased FHA loan limits up to $729,500 in many high-cost regions of the U.S. through the end of the year. FHA loan limits vary by county, so give us a call for loan limits in your area.

2) The FHA changed its appraisal and fee negotiating guidelines. In the past, many sellers steered clear of FHA loans because the appraisals were too strict and certain fees were non-negotiable. The FHA has greatly loosened these guidelines to make it easier for both buyers and sellers.

3) FHA loans are much cheaper now. Because FHA loans are federally insured, they tend to trade at a higher premium in the secondary market.
This means lenders can often charge a lower rate.

Other FHA Benefits

• FHA loans are not credit-score driven. Borrowers can have a lower score than other products and still qualify for a good rate.

• FHA loans require as little as 3% down.

FHA loans allow down-payment assistance programs. This allows the seller to cover the buyer's down payment and closing costs.

This means borrowers, especially first-time buyers, or move-up buyers with limited funds, have a real opportunity of getting into a home with little or no cash at closing.

For sellers, this means you can offer concessions that make marketing your home without having to lower the price of your home again.

• FHA loans allow
a) Sellers to finance all of the buyer's costs to close;
b) Homeowners to take cash out up to 95% of the home's value;
and
c) Homeowners to consolidate a first and second loan up to 97% of the home's value.

If you or someone you know is thinking about buying or refinancing a home, give us a call. We'll see if an FHA loan is right for your financial goals and needs.

Source: The Loan Tool Box

Risk Based Pricing Impact

2008-06-18T08:53:00.000-07:00

The Federal Reserve Board and the Federal Trade Commission have announced proposed regulations that generally would require a creditor to provide a consumer with a risk-based pricing notice when, based in whole or in part on the consumer's credit report, the creditor offers or provides credit to the consumer on terms less favorable than the terms it offers or provides to other consumers. Risk-based pricing refers to the practice of using a consumer's credit report, which reflects his or her risk of nonpayment, in setting or adjusting the price and other terms of credit offered or extended to a particular consumer. Many creditors offer more favorable terms to consumers with better credit histories. The proposed rules would apply, with certain exceptions, to all creditors that engage in risk-based pricing. Under these rules, a risk-based pricing notice would generally be provided to the consumer after the terms of credit have been set, but before the consumer becomes contractually obligated on the credit transaction. The proposal provides a number of different approaches that creditors may use to identify the consumers to whom they must provide risk-based pricing notices. In addition, the proposed rule includes certain exceptions to the notice requirement. The most significant of the exceptions permits creditors, in lieu of providing a risk-based pricing notice to those consumers who receive less favorable terms, to provide all of their consumers with their credit scores and explanatory information.

Source: Mortgage Bankers Association of America

When Higher Rates Are Good News.

2008-06-16T13:07:00.000-07:00

When are higher rates good news? The fact that rates on fixed mortgages have moved up in the past few weeks may actually be. Why? Because the rates on Treasuries have moved up further. This means that the spreads between mortgages and other rates are decreasing and could mean that the secondary markets are gaining confidence in mortgages again. Remember, part of the reason that rates on many mortgages have increased in spite of lower rates everywhere else is that the default rates on mortgages were so high. This accounted for the fact that adjustable rate mortgages and jumbo mortgages rose dramatically over the past year despite generally lower rates. Source: Origination Pro - Dave Hershman

Over 1 Million Forclosed Homes!

2008-06-16T13:04:00.000-07:00

More than one million homes are now in foreclosure, the highest rate ever recorded, according to a trade group which warned Thursday that the crisis will continue to worsen. The Mortgage Bankers Association's first quarter report showed that a record 2.5% of all home loans being serviced by its members are now in foreclosure, which works out to about 1.1 million homes. That's up from the 2% of loans, or about 938,000 homes, that were in foreclosure at the end of 2007. The report also showed that 448,000 homes, or about 1% of loans being serviced, began the foreclosure process during the first quarter. That's up from about 382,000 homes, or 0.83%, that entered foreclosure in the last three months of 2007. The number of homeowners behind on their mortgage payments also hit a record high. Nearly 3 million home loans are now at least one payment past due, while about 737,000 are at least three months past due but not yet in foreclos ure. This marks the sixth straight quarter in which a record percentage of loans went into foreclosure. The trend has led to a widespread decline in home prices, as well as huge losses for banks and other financial firms that issued or invested in the loans. Source: CNN/Money

CalHFA Changes and Other Options for 100% Financing

2008-06-11T14:33:00.000-07:00

Here are the changes from CalHFA

Hi All,

Be careful on CalHFA right now!!

*Note the changes below.

1) Seller credit max is 3% - even if you are doing an FHA loan
2) Nehemiah can no longer be used with Cal HFA products
3) 45.00% max DTI on manual underwriting and 55.00% on Automated
approvals
4) 3 years from BK discharge - regardless of what kind of first
mortgage you have
5) Mid low FICO of all borrowers must be 620 for 95% LTV or less or 680
for 95.01% LTV or more (Note this is LTV, not CLTV)

Please make sure you are relaying this info to your clients...

Another option for 100% financing is FHA loans with Nehemiah gifts through seller contributions (up to 6%)!

For Further information please contact our chief FHA and Nehemiah Specialist Joe Littell at joe.littell@partnersnet.com for further information.

Short Sale and Forclosure News

2008-06-05T08:25:00.000-07:00

Banks say they want to help troubled homeowners, but they are delaying deals that could save everyone - including the lenders themselves - a lot of time and money. Lenders are taking much longer than necessary to approve short sales, according to Duane LeGate, of House Buyers Network, a short sale specialist. In a short sale, a homeowner who cannot keep up with their loan asks the lender to take a dollar amount less than what is owed on a home's mortgage, and forgive the remainder of the unpaid debt. So if a borrower has a mortgage balance of $100,000 and finds a buyer who will pay $95,000 for the house, the lender agrees to accept that $95,000 and close out the loan. "There was a much greater chance of success with these in the past," said LeGate Ideally in a short sale, everyone wins. Borrowers avoid the ugly foreclosure process that destroys their credit, while lenders recoup more of their costs than they would by s pending the time and money it takes to kick an owner out and resell the property. Lenders typically lose about 19% of a mortgage's value in a short sale, according to Clayton Holdings, a Conn.-based, provider of loan analytics, while they lose an average of 40% on loans that go into foreclosure. Coldwell Banker CEO Jim Gillespie agrees that short sales are taking too long to complete. And he speaks from firsthand experience; a short-sale offer he made on a house in Marin County, Calif. in late fall didn't win approval until April. But most buyers can't, or won't, wait that long."That's been our biggest challenge - keeping the buyers interested long enough as we wait and wait for an answer," said Jeff Morrell, a Colorado Springs real estate agent who specializes in short sales. Source: CNN/Money

Fannie Mae Removal of 5% Market Decline!!!!!!!

2008-05-30T15:32:00.000-07:00

Following a similar decision by Fannie Mae, Freddie Mac has eliminated its controversial policy of requiring borrowers to put up larger downpayments in markets where home prices are declining. "Beginning June 1, 2008, we will allow maximum financing up to 95% LTV for most Freddie Mac mortgages in all markets," Freddie says in a May 16 e-mail message to its approved lenders. Under its declining-markets policy, the maximum amount of financing was reduced by 5% in markets where lenders determined that house prices are falling. On May 2, Freddie issued a bulletin to its lenders revising the policy so that the loan-to-value ratio of 95% became the floor for most loan products. "The practical effect [of the May 16 change] is that lenders no longer have to make that determination about a declining market," a Freddie spokesman said. As previously reported, Fannie is scrapping its declining-markets policy starting Jun e 1. Source: National Mortgage News

Industry Update

2008-05-30T15:04:00.000-07:00

With prices falling around the nation, home price affordability has improved dramatically in many U.S. cities. As a result, 53.8% of all new and existing homes sold nationwide during the first three months of 2008 were affordable to families earning the median household income of $61,500, according to the latest Housing Opportunity Index released Tuesday by Wells Fargo and the National Association of Home Builders (NAHB). That's up from 44% during the first three months of 2007 with home prices the most affordable they've been since the three month period that ended June 30, 2004. "Three factors combined to substantially increase housing affordability," said NAHB president, Sandy Dunn, in a press release accompanying the report. "Mortgage rates returning to near the record low levels of a few years ago, a $2,500 rise in family income nationwide (from 2007 to 2008) and lower house prices." Home prices dropped about 8% compared with a year ago, according to NAHB, but that doesn't mean that buyers are flocking back to the market. "This measure can only take you so far in implications for the market," said Dave Seiders, NAHB's chief economist. "There're several factors that the index does not capture." Source: CNN/Money

Why are rates better today and what caused the improvement.

2008-04-04T14:11:00.000-07:00

Incase you were wondering why rates are better today
and what caused the improvement in pricing…

Bonds are off to a tremendous start this morning in reaction to a very weak employment report.
The economy lost 80k jobs in March and the job losses in Feb we revised to -76k from a previously reported -63k. January’s number was revised lower, as well. In addition, the unemployment rate increased to 5.1%. The first quarter of 2008 has painted a bleak picture of the labor market.

So what does this mean for bonds and in turn mortgages and home sales?
You probably know that a poor employment report is good news for the bond market (as it was today). The main reason bonds like a poor employment report is that higher unemployment means a larger supply of labor in the economy. A larger labor pool means wages should remain low. Lower wages generally mean lower prices and lower prices equal lower inflation. Inflation eats away returns on long term investments. A lower risk of inflation also means a better chance of more Fed easing. So as long as the bond traders aren’t the ones losing their jobs they like higher unemployment.

In other words, when the stock market and its driving forces are hurting, Bonds are improving and vice versa.

*One issue that the bond markets haven’t seen in a very long time is that there is a massive reluctance to buy mortgage backed securities because of the instability of the housing market. What this means is that, just because the stock market takes a hit, there is still some investor reluctance to the traditional seeking of safer investments in the bonds market.

This is indeed a market like none of us have ever seen. My suggestion is that you team up with someone who not only watches the market but understands it, so they can pass along information that will be affecting you directly. For example, just like this information today and how the weak employment reports created a dip in rates and created a favorable market for home buyers and those in need of a refinance.

I hope this helps!

Courtesy of,

Joe Littell
Mortgage Planner

Joe's Home Page

[Mortgage News Network] There are still a few ways to get to 100% financing!

2008-04-01T14:11:00.000-07:00

There are still a few ways to get to 100% financing!

Keep in mind that these are the options for first time home buyers with little or no reserves or down-payments.

The market is here and as you know, there are multiple offers all over the place, so fence sitting time is over!

100% financing is available through VA. 6%

FHA: Go 97% LTV. Combine it with 3% gift; 3% CHDAP thru CalHFA; or 3-6% thru Nehemiah.

CalHFA: Go 95% on their Conventional product or 97% on their FHA: Both at 6.75% for Moderate Incomes; 6% Low Income.
Combine it with their 2% CHAP and/or their 3% CHDAP. You can also layer their extra Credit Teacher program if qualified.

My Community or Flex: Both at 95% LTV. You can use DAP (Down Pmt. Assistance) or gifted funds to get to 100%.

There are a few specialty products such as PERS/STRS, First House and Access. All are at 95% LTV.

Please see below for links to all programs.

Cal STRS Guidelines

http://www.chl-mrb.com/BondManuals/StaticData/MRB/BondManuals/MRBBondManual.asp?bondManual=CalSTRS

Cal PERS Program Guides

http://correspondent.citimortgage.com/calpers/CalpersServlet?PageID=GetLoanEligibilityGuidelines&type=2

Cal HFA Program Descriptions

http://www.calhfa.ca.gov/homeownership/programs/index.htm

FHA Keyword Index

http://www.hud.gov/offices/hsg/keywords.cfm

FHA Lender Resource Page

http://www.hud.gov/groups/lenders.cfm

VA Lender Home Page

http://www.homeloans.va.gov/ls.htm

NHF First House Library

http://www.nhfloan.org/pub/firsthouse_guidelines.htm

NHF ACCESS Library

http://www.nhfloan.org/pub/access_guidelines.htm

DRE Broker/Agent Licensee Search

http://www2.dre.ca.gov/PublicASP/pplinfo.asp

DRE Appraiser License Search

http://www.orea.ca.gov/html/lic_appraisers.asp

NEHEMIAH Home Page

http://www.getdownpayment.com/

HART Home Page

http://www.hartprogram.com/staging/nuke/index.php

--
Posted By Mortgage News Network to Mortgage News Network at 4/01/2008 01:05:00 PM

- Final Thought -

"Problems are only opportunities in work clothes."

~Henry Kiaser

LAST MINUTE TAX TIPS!

2008-03-25T12:28:00.000-07:00

Last Minute Tax Tips

Before you file your taxes, you may want to consider several last-minute tips before sending your

W-2s to Uncle Sam by April 15.

IRA Contributions

The maximum contribution for 2007 to your Individual Retirement Account (either Roth or traditional)

is $4,000 (increasing to $5,000 for 2008). Individuals who have reached age 50 before Dec. 31,

2007, are allowed an additional "catch up" contribution of $1,000. It's not too late to make your 2007

IRA contribution: Taxpayers have until April 15, 2008, to make their 2007 contribution. In fact, a

deduction may be taken on your 2007 tax return even though the contribution has not as yet been

made.

Capital Gains

The 2007 alternative capital gains tax rate for individuals in the 10 percent or 15 percent tax bracket

is 5 percent. Beginning in 2008, a 0 percent rate replaces the 5 percent rate. If you qualify for this

rate, you might consider selling capital assets that have appreciated while this 0 percent rate is in

effect. While this rate is presently in effect for next year as well, there is no guarantee that there will

not be a tax change, so you might want to take advantage of this rate in 2008.

Personal Energy Credits

Individuals are entitled to a variety of personal energy credits for 2007. Among these are credits for

the installation of certain energy saving devices installed in your principal residence prior to Jan. 1,

2008 (e.g. qualified exterior doors, windows, furnaces, and the like). You also may be entitled to an

alternative motor vehicle credit on your 2007 tax return if you purchased an eligible vehicle last year

(e.g. a qualified hybrid vehicle). Among other requirements you must meet, you must be the original

user of the vehicle. You would claim this credit on form 8910.

Foreign Tax Credit

If you are the recipient of foreign source income (e.g. dividends from a Canadian corporation) from

which foreign income taxes were withheld at the source, you may be entitled to a credit against your

U.S. income for these taxes. There are limits to the amount of credit to which a taxpayer is entitled,

but generally most, if not all, foreign taxes paid is eligible for the credit.

Charitable Contributions

Unfortunately for tax years beginning after Aug. 17, 2006 (generally meaning 2007), no deduction

for any cash contribution will be allowed without some bank record or receipt. For example, weekly

cash contributions to your local church would not be deductible without some form of substantiation.

Excess FICA

If an individual holds two jobs, each employer is required to withhold social security taxes. Since

individuals are liable for the FICA portion of such taxes only up to a total wage base of $97,500 (for

2007), in many instances a person's actual FICA payments may exceed the maximum payments

due. Don't forget that such excess FICA is a credit against taxes owed.

Alternative Minimum Tax

In recent years, inflation has overtaken the AMT exemption amount. Congress passed the Tax

Increase Prevention Act of 2007 late in December, which, among other things, raises the AMT

exemption amount. If you are subject to the AMT, be sure that the AMT form you are using (form

6251) is the current form, reflecting this new exemption amount.

Extensions

As in prior years, individuals are entitled to an automatic six-month extension to file their individual

tax return (1040). Filing form 4868 by April 15, 2008, will extend the filing deadline to Oct. 15, 2008.

It will not, however, extend the due date for the payment of taxes. The estimated amount of your

taxes is due with the filing of form 4868. Failure pay all taxes by April 15, 2008, will result in the

assessment of penalties and interest.

By: John Colliander

Joe's Home Page

Fed Rate Cut of 75 bps -

2008-03-21T13:23:00.000-07:00

Home Page

Fed steps in and cuts again
Bernanke pulls out all the stops to ailing economy

The Federal Reserve significantly cut rates today for the sixth straight time since September. This follows a busy weekend where the Fed also extended its hand to Wall Street, bailing out Bear Stearns with JP Morgan Chase. While rate cuts look good at face value, you need to prepare for what's to come.

Why did they do this?
The Fed wants you to start spending money and wants to boost consumer and Wall Street confidence. Consumers are under stress with increasing consumer prices and a slowing housing market. Wall Street banks have been under stress from mortgage defaults and their impact on corporate balance sheets.

How does this impact you?
Fed rate cuts are inflationary. Since the Fed started cutting rates in September of last year, oil prices are up nearly 40%, gold prices are up over 25%. This is the direct result of a falling dollar which occurs from Fed rate cuts.

As a result, mortgage rates will ultimately rise from here. It is inevitable. Inflation is the arch enemy of fixed-income investments, long-term bonds and mortgage-backed securities, upon which mortgage rates are based.

Here's a look at the inflation picture: Gas prices last September, prior to the Fed's current cutting trend, were roughly $2.75 a gallon. Today, gasoline averages $3.25 a gallon nationally, up 18% before the first rate cut. This is a sign of inflation.

What should you do now?
If you are looking to refinance, don't wait. Act now to get a great interest rate. Home loan rates have come down over 1.00% in the last two weeks. But after each of the last five rate cuts, we have seen rates rise significantly in a short period of time. Don't get caught saying "I wish I had…"

If you are looking to purchase a home, I want to hear from you right away. Home prices have to fall over 10% to make back what you lose in monthly housing payments if rates increase 1.00%. There are some great buys out there today!

Next step
Pick up the phone and call me. You owe it to yourself. I will review your situation and let you know what I can do to put some money in your pocket. If you wait, it could cost you thousands of dollars. I look forward to hearing from you.

Tell EVERYONE about the NEW FHA LOAN LIMITS!!

2008-03-06T13:52:00.000-08:00

I have some information for you and other real estate professionals that is a breath of fresh air.

The new loan limits have come out for FHA and since the real estate industry considers FHA as the new Alt-A loan program this means that more people will qualify to both purchase new homes and refinance out of bad loans!

Here are the new FHA loan limits! They are significantly higher then expected! Let me know if you need any further information since this program is the loan of the future for non-prime borrowers. These FHA loan limits can go into effect as early as next Thursday!

Three things to keep in mind are that:

FHA does not require reserves!

Although FHA is subject to risk based pricing, FHA is not fico driven!

FHA has the option of 30 and 15 year loans (fully amortized no interest only)!

The FHA secure program which is only available until Dec. 31 2008 can refinance people with negative equity. (Call for details)

The memo is below:

NEW FHA LOAN LIMITS BY COUNTY

At a speech today in Orange County, HUD Secretary Jackson announced the new limits for California. Attached are the limits by county. They appear to be about as high as we could have expected. The limits for the rest of the country should be published tomorrow. We understand that FHA will require second appraisals on loans over a certain limit (possibly $417,000) if the following conditions exist: 1) LTV is above 95%, 2) the appraiser has designated the property in a declining market and there is data that corroborates that fact. Mountain West Financial is pleased to announce we will be underwriting and approving loans at the new limits and will advise you as soon as we are in a position to lock loans at these new limits.

California County Limits

Obs	prop_addr_st	county_nm	med_price	FHA_1unit
185	CA	Alameda County	995000	729750
186	CA	Alpine County	438000	547500
187	CA	Amador County	355000	443750
188	CA	Butte County	320000	400000
189	CA	Calaveras County	370000	462500
190	CA	Colusa County	318000	397500
191	CA	Contra Costa County	995000	729750
192	CA	Del Norte County	249000	311250
193	CA	El Dorado County	464000	580000
194	CA	Fresno County	305000	381250
195	CA	Glenn County	230000	287500
196	CA	Humboldt County	315000	393750
197	CA	Imperial County	260000	325000
198	CA	Inyo County	350000	437500
199	CA	Kern County	295000	368750
200	CA	Kings County	260000	325000
201	CA	Lake County	321000	401250
202	CA	Lassen County	200000	271050
203	CA	Los Angeles County	710000	729750
204	CA	Madera County	340000	425000
205	CA	Marin County	995000	729750
206	CA	Mariposa County	330000	412500
207	CA	Mendocino County	410000	512500
208	CA	Merced County	378000	472500
209	CA	Modoc County	125000	271050
210	CA	Mono County	370000	462500
211	CA	Monterey County	599000	729750
212	CA	Napa County	615000	729750
213	CA	Nevada County	450000	562500
214	CA	Orange County	710000	729750
215	CA	Placer County	464000	580000
216	CA	Plumas County	328000	410000
217	CA	Riverside County	400000	500000
218	CA	Sacramento County	464000	580000
219	CA	San Benito County	790000	729750
220	CA	San Bernardino County	400000	500000
221	CA	San Diego County	558000	697500
222	CA	San Francisco County	995000	729750
223	CA	San Joaquin County	391000	488750
224	CA	San Luis Obispo County	550000	687500
225	CA	San Mateo County	995000	729750
226	CA	Santa Barbara County	615000	729750
227	CA	Santa Clara County	790000	729750
228	CA	Santa Cruz County	719000	729750
229	CA	Shasta County	339000	423750
230	CA	Sierra County	228000	285000
231	CA	Siskiyou County	235000	293750
232	CA	Solano County	446000	557500
233	CA	Sonoma County	530000	662500
234	CA	Stanislaus County	339000	423750
235	CA	Sutter County	340000	425000
236	CA	Tehama County	250000	312500
237	CA	Trinity County	200000	271050
238	CA	Tulare County	260000	325000
239	CA	Tuolumne County	350000	437500
240	CA	Ventura County	599000	729750
241	CA	Yolo County	464000	580000
242	CA	Yuba County	340000	425000

Final Thought

"You can't build a reputation on what you're going to do."

~ Henry Ford

Since we are either proactive or reactive, I urge you to reach out to EVERYONE you can and connect with them! Too many people are paralyzed by the bad media and the fear that grips the general populace.

By letting them know that “money is on sale”, because interest rates are so low and inventory is so high, we are all experiencing the epitome of a home buyers market.

The favor lies with the buyers and the sellers that know how to capitalize on the oppurtunities available for buyers...ie the 3-2-1 buydown, ect.

Home Page

Economic and Mortgage Market Summary (Feb)

2008-02-28T11:13:00.000-08:00

FannieMae came out with the economic summary for February 2008 and the key points are listed below.

FannieMae (February 2008) Economic and Mortgage Market Developments

• Inflation. The core rate of inflation increased further in December and remains above the top of the Federal
Reserve’s implicit target range. The slowdown in GDP growth and resulting slack in the labor market should
help alleviate some pressure on core inflation (especially as monetary policy has become accommodative).
However, there is continued pressure on core inflation from the pass-through of recent energy price increases.

• Interest rates. The Federal Reserve lowered the federal funds rate by 125 basis points in January, and continued
credit tightness and softening economic conditions should allow them to lower it more this year. We expect the
Fed to cut rates by 50 bps in March, and by an additional 50 bps over the next several meetings, bringing the
federal funds rate down to 2.00 percent. Nevertheless, long-term rates should edge up from current levels over
the year.

• Housing market. We project that the combination of below-trend economic growth and continued dislocations in
the mortgage market will continue to slow housing starts and sales this year. We expect total home sales to
decline by 22 percent in 2008 and single-family housing starts to fall by 30 percent in 2008. We expect housing
starts and sales to stabilize in the middle of this year, with sustained gains beginning in 2009. However, the large
number of unsold homes on the market is putting downward pressure on house prices. This price weakness is
likely to extend at least through 2009.

Molly R. Boesel and David Kogut
Economics and Mortgage Market Analysis
February 15, 2008

In other words…

~Inflation is increasing and the fed is working to slow it. They still don’t have control over it and the way things look; the market will be unstable until the housing market volatility slows down.

~As for interest rates, the Fed continues to cut rates but long term rates (30yr and 40yr) will continue to climb through the course of the rest of the year.

~The housing market will continue to decline throughout 2008, is expected to stabilize in mid 09’ and the increase in inventory is only increasing the the weakness in the housing market.

Regardless of the news, the bottom line is that everyone is waiting to see what the rest of everyone else is going to do. People are paralyzied by the market and don’t want make a bad move. Make no mistake, now is the best time to buy a home in the last 10+ years. Money is incredibly cheap with rates being so low, and the inventory and standard concessions that sellers are making across the market, make this the epitome of a buyers market.

Those that buy or refi at this point are wise and will reap the benefits of this favorable market. Those who chase the rainbow and keep searching for the “Bottom” of the market, or for the rates to go down- will find that it doesn’t exist because they will always feel that there is always something better and when the market actually begins to flourish the inventory will be compromised and according to the fed and the inflation issues, rates will have gone up. Another thing to keep in mind is that on a $250,000 investment, an increse in rates of .5% will decrease their buying power by about $30K

Final Thought…

There are risks and costs to a program of action. But they are far less than the long-range risks and costs of comfortable inaction.

-John Fitzgerald Kennedy

Don't Get Burned by the HELOC Freeze

2008-02-27T12:49:00.000-08:00

There’s a growing trend among lenders that I feel compelled to tell you about.

Several major lenders are freezing withdrawals from Home Equity Lines of Credit (HELOC's) – and I don’t want you to be caught off guard by this development.

Don’t Get Burned by the HELOC Freeze

HELOC's, though secured by your real estate, are treated by lenders as consumer credit. And just as a lender can revise the terms of your credit cards, or even cancel them, the same can be done with your HELOC.

Previously, HELOC withdrawals were usually only frozen for reasons such as bankruptcy, declining credit and payment problems.

While these events can still cause a freeze, there’s another factor that lenders are considering more often today: the value of your property. You should be aware that the lender retains the right to suspend or reduce the line of credit available if your property value falls below the appraised value used to originate the loan. Lenders are actively assessing properties and then suspending access for account holders who have seen a downward slide in their home value.
If you’re in a market that has seen real estate values decline, then access to your HELOC may be at risk.

*One thing to keep in mind is that lenders have labeled all of California a declining state, which means that those who live in California and have HELOC's are at risk to the HELOC Freeze and this risk should be assumed and recognized.

Your financial security and success are my highest priority. Feel free to contact me to discuss your options and any other questions you may have so I can make sure that you are protected in this volatile market.

Food For Thought...

2008-02-21T13:55:00.000-08:00

Deep within man dwell those slumbering powers; powers that would astonish him, that he never dreamed of possessing; forces that would revolutionize his life if aroused and put into action.

~ Orison Swett Marden

A 100% Financing Message to First Time Home Buyers

2008-02-20T16:23:00.000-08:00

Seller Concessions, FHA & CalHFA:
A 100% Financing Message to First Time Home Buyers

A couple of years ago you could get declined for a discover card but you could qualify for a home loan. Think for a moment about the logic because I am not exaggerating. There were hundreds of thousands of people that got into loans that they were not qualified to handle, thus developing the onslaught of foreclosures and Short Sales that have come to pass. The rules of the game have changed and the difference now is that people will have to qualify and in some cases over qualify for financing. Lenders and consumers both have taken massive losses and new policy and laws have been set into motion to make sure that we never end up in a similar situation

There are numerous reasons to learn more about 100% financing besides that fact that about 90% of it completely disappeared. For instance, you could be a first time home buyer or know someone who is looking, that could benefit from this knowledge. You could be a realtor who needs to be kept up to date with the few remaining 100% programs so you can let your clientele know about them or, you could be a mortgage lender who wants to learn more about available products so you can serve your clients in a more effective manner.

What ever your situation, I want to share some extremely valuable information that could keep you and the people you know, from wasting a ton of time and loosing a large amount of money.

100% financing in California is available through government sponsored programs. The two most common programs are called CalHFA and FHA. This article will dominantly focus on the CalHFA and FHA because they apply to the largest demographic. There are also other programs for educators and employees who work for a school district and receive salaries and if you are a U.S. Vet then the VA is a great option as well.
(For information about VA or PERS please go to the Mortgage News Network at http://mortgagenewsnetwork.blogspot.com/ )

For First Time Home Buyers, CalHFA offers down payment assistance programs which provide a helping hand of 3% of the sales price. This has to be paid back when you sell or refinance your home and is extremely beneficial because if there is a lack of funds to close, the 3% helps to absorb the closing costs and you don’t have to pay those absorbed out of pocket expenses. There are different down payment assistance programs and the parameters differ upon which of them you qualify for.

Seller concessions are also important because they will absorb other closing costs as well. Seller concessions are common (especially in a buyers market) and CalHFA allows seller concessions designed as follows:

- 3% of you are borrowing 90% of the property value or more.

- 6% if you are borrowing 90% of the property value or less

Add the Seller Concession to the Down Payment Assistance and you are looking at some major help to get into your home.

FHA allows 6% Seller Concession and there are similar down payment assistance programs available (similar to that of CalHFA).

Neither CalHFA nor FHA loans are subject to the California declining market decrease of 5% because CalHFA is its own entity (separate from mainstream housing lending) and FHA loans are federally insured.

I highly suggest that if you are a First Time Home Buyer then you look at these opportunities and get a professional to pre-approve you, NOT pre-qualify you. The difference is a pre-qualification is a verbal go ahead and means nothing to a lender. A pre-Approval is a green light to go and get a house because under the approved information that you have submitted, you will be able to proceed into negotiations. A pre-approval is also a green light for an appraiser, a realtor, as well as buyers and sellers.

Experienced real estate agents who know that they are doing will have you get
pre-approved before they take you out to look at homes. This gives you a clear picture of how much money you can spend and it gives your realtor a chance to do some research on the available inventory of homes so they can show you exactly what fits your needs.

For future information, there are many discussion boards, blogs, news sites, magazines and other sources of information. My intent is to educate you so that you know that there are still opportunities out there and they are available to those who are willing to qualify for them.

For future and archived articles go to: Mortgage News Network http://mortgagenewsnetwork.blogspot.com/

~Joe Littell

Congress Extends MI Tax Deductibility Law!!!

2008-02-20T11:08:00.000-08:00

Congress extends MI tax deductibility law!

Congress has just extended the MI tax deductibility law. Once the President signs the bill, borrower-paid MI premiums will be tax-deductible through the year 2010. Because it’s still new, the law has raised many questions.

Below are answers to commonly asked questions regarding the new law. We will continue to post updated information as regulators sort out the details. Borrowers should consult their tax advisors regarding MI tax deductibility. See disclaimer note below.

FAQs

Does the bill apply to MGIC mortgage insurance?
Yes, borrower-paid MI provided by MGIC qualifies for the deduction. This includes our Monthly, One-Time MI and Split Premium plans. There are varied opinions on the deductibility of lender-paid MI as the IRS has not yet clarified the deductibility. It is recommended that borrowers consult their tax advisors regarding the amount that is deductible.

What types of mortgage loans qualify for the MI tax deduction?
Loans used for “acquisition indebtedness” — that is, money borrowed to buy, build or substantially improve a residence — are eligible, as long as the debt is secured by the same residence.

This includes purchase loans and refinance loans, up to the original acquisition indebtedness. (Money borrowed against the equity in a home or when refinancing a home for any reason other than to buy, build or substantially improve a residence is called “equity indebtedness.”)

When refinancing a piggyback loan originally used to acquire a property, is the original loan amount considered the sum of the two mortgages or only the primary mortgage amount without the second lien included?
The original acquisition indebtedness is considered to be sum of the two mortgages.

Is deductibility applicable for all loan types?
There is no differentiation among loan types.

What types of properties are eligible for tax deductibility?
The deduction applies to “qualified residences,” as defined in the Internal Revenue Code. Generally, that includes the borrower’s primary residence and up to one other residence selected by the borrower for purposes of the deduction for qualified residence interest. As with mortgage interest, borrowers can deduct mortgage insurance premiums paid on both their primary residence and one other qualified residence each year. Investor loans are not eligible.

Who qualifies for this itemized deduction?
Households with adjusted gross incomes of $100,000 or less will be able to deduct 100% of their MI premiums. The deduction is reduced by 10% for each additional $1,000 of adjusted gross household income, phasing out after $109,000. (Details below.)
Married individuals filing separate returns who have adjusted gross incomes of $50,000 or less will be able to deduct 50% of their MI premiums. The deduction is reduced by 5% for each additional $500 of adjusted gross income, phasing out after $54,500. (Details below.)
The deduction is not restricted to first-time homebuyers.

Is adjusted gross income calculated before or after deductions?
Adjusted gross income is calculated before itemized deductions, including the MI deduction.

How does the MI tax deduction work?
Borrowers who itemize deductions are able to reduce their overall taxable income in the same manner as mortgage interest.

Are borrower-paid, single premiums, which are paid up front in a lump sum, eligible for the deduction?
Yes, borrower-paid, single-premiums are eligible for the deduction under the new law. Borrowers should consult with a professional tax advisor to determine the amount of the MI premium eligible for the tax deduction.

If the single premium is financed, are both the mortgage insurance premium and the interest tax-deductible?
We believe that if the loan is for acquisition indebtedness, both the interest attributable to the entire loan balance as well as the allocated portion of the mortgage insurance premium are tax-deductible.

How would a premium refund issued during the tax year affect eligibility and the amount of the MI deduction?
Borrowers are only permitted to deduct that portion of their MI premium attributable to a tax year. If the MI is dropped, and a refund is paid, the amount refunded would reduce the amount of MI premium that could be attributable to that tax year and be deducted.
Note: MGIC cannot provide tax advice. Taxpayers should consult their tax advisor to ascertain if they are eligible to take this deduction. The answers to these questions are based on an interpretation of the language of the statute, the Joint Committee on Taxation’s Technical Explanation of the statutory language, and present law. The Internal Revenue Service (“IRS”) will issue guidance interpreting the new provision, and could reach different conclusions for some of the issues raised.

(Stimulus Bill, Mtg Ins, and FHA) Market Snapshot and Key Update

2008-02-19T12:12:00.001-08:00

Good morning,

The stimulus bill has passed but lenders don’t have the changes in place to offer the higher loan amounts to agency approved customers. Apparently HUD has 30 days to come up with the posted numbers for our area after changing their systems, documentation, etc. Then the lenders will update theirs. This process could take a little longer than we all thought. 30 days? 60 days? The jumbo loans, or newly conforming loans or whatever you want to call them are going to be submitted in separate pools and we are not sure if the pricing will be worse for these types of loans. For now we have to wait and see and know that good news is coming.

NOTE* If you didn’t see the “Ignore the Headlines” article in the February 25th issue of Time Magazine, you may want to take a look. Famed money manager Peter Lynch explains that the inevitable rise in interest rates may extinguish a borrower’s advantage to get into more house, for a lower rate. It might be a good article to have on hand for indecisive borrowers. A half point worsening to rate on a $220k home could mean $20k+ less that one would qualify for with the same payment. It’s a little more complicated if one is selling their home but if you are buying or refinancing there may be no better time.

As far as Mortgage insurance goes; the word on the streets is that MGIC is going to update some of their guidelines on March 3rd. In a recent Washington Post article from February 16th, Kenneth Harney he mentions changes that will include: 680 min ficos for homebuyers with less that 5% down (same applies to less than 10% down in declining markets) – no more cash out refis on investment properties – reduced doc programs will require a 660 fico and have to show 50% of their income coming from self-employment sources. This all comes after MGIC estimated they would lose over a billion in the 4th quarter. Keep in mind that FHA products will come into play a lot more now that the MI companies are struggling with lower ficos and higher LTV’s.

In other words there is more tightening coming in for riskier loans. Consumers have to qualify under much more stringent processes due to the avalanche of foreclosures and delinquent loans. Sub Prime is still existent but the rates and payments are inflated and the terms in general are short. FHA is the new Alt-A and there are a few ways to structure these loans. 100% financing is still available at beautiful rates but that is through CalHFA and you must fit the parameters. Pretty much all financing is subject to risk based pricing.

The great news is that money is cheap, there is a ton of inventory and the loan limits for GSE (Fannie and Freddie) loans are increasing… it just remains to be seen how much.

I’ll keep you posted as developments evolve.

Final Thought on taking action…

I will act now. I will act now. I will act now. Henceforth, I will repeat these words each hour, each day, everyday, until the words become as much a habit as my breathing, and the action which follows becomes as instinctive as the blinking of my eyelids. With these words I can condition my mind to perform every action necessary for my success. I will act now. I will repeat these words again and again and again. I will walk where failures fear to walk. I will work when failures seek rest. I will act now for now is all I have. Tomorrow is the day reserved for the labor of the lazy. I am not lazy. Tomorrow is the day when the failure will succeed. I am not a failure. I will act now. Success will not wait. If I delay, success will become wed to another and lost to me forever. This is the time. This is the place. I am the person.

~Og Mandino 2/19/08

2/14/2008 Quick Question...

2008-02-14T14:39:00.000-08:00

How much of the devastation caused by the “Housing Bubble and Unethical Lending" practices would have never reached these levels if there were open discussions and proactive education aimed at consumers and professionals for the sole purpose of their protection their well being?

2/13/08 Economic Stimulus Bill Signed in by the President.

2008-02-13T17:18:00.000-08:00

As of today the Economic Stimulus bill was signed into law by the President. We would like to let you know what to expect.

Several steps listed below, must occur before anyone can lock in loan applications with the
higher loan amounts.

• First, the GSEs and FHA must assess their internal impacts to determine the delivery approach they will require of mortgage lenders and investors.

• Second, GSEs and FHA must communicate their requirements to mortgage lenders and investors.

• Third, Lenders will work to identify impacts and implement the changes as quickly as possible.

Due to these necessary steps, the higher limits offered by GSEs and FHA as a result of this bill will not be immediately available to our clients (higher loan limits are still available through non-conforming product offerings.)

High-level Details of the Stimulus Package

Details of the GSA/FHA requirements are not finalized; however, outlined below is some information regarding what is expected as a result of the new law:

Overall

• The increases are a temporary solution for some high-cost areas based on Metropolitan Statistical Areas (MSAs).

• The Higher loan limits will not be immediately available.

• Changes related to FHA Modernization were not included in the Economic Stimulus Package.
GSE Loan Limits

• Loan amounts may be as high as $729,750; however, $729,750 will not be the nationwide loan limit.

Increases will be available in high-cost areas based on the median area sales prices and will follow the standard HUD mortgage loan limit calculation process.

• To determine high-cost areas, the calculation factor will increase to 125% of the area median sales price.

• The temporary increase applies to loans originated from July 1, 2007, through Dec.31,2008.

FHA

• Loan limits in high-cost areas may increase to as much as $729,750..

• To determine high-cost areas, the calculation factor will increase from 95% to 125% of the area median sales price.

• The increase applies to loans with credit approval issued prior to Dec. 31, 2008.

• Floor will increase to $271,050.

2/13/08 Stimulus Bill to be Signed Today!!

2008-02-13T11:37:00.000-08:00

A message from CAMB Government Affairs Chair Ed Smith, Jr.
regarding the Economic Stimulus bill.

President Bush to sign the Economic Stimulus bill Today!

On Thursday of last week, as CAMB members lobbied the halls of the congressional offices in Washington, D.C., the U.S. Senate and House of Representatives passed a final version of the Economic Stimulus bill that includes provisions to increase the FHA and GSE conforming loan limits. Essentially, the loan limit would be 125 percent of the area median home price, but in no case will exceed 175 percent of the conforming loan limitation for 2008 ($729,750). The bill gives HUD 30 days from enactment to set the loan limit by area. An analysis of how the increase will work for the GSE and FHA loan limit is attached below.

Attached Analysis

2/4/08 REALTOR UPDATE

2008-02-12T16:56:00.000-08:00

Many of you have clients that will need 100% financing. Not to worry; there are still several STRONG programs that are available for your clients.

There are available 100% financing programs in California regardless of the declining market factor.

NOTE* The FHA and CalHFA loan limits are subject to the areas New Construction and Resale Targeted and Non-Targeted assessments from HUD.

Loan limits for Sacramento, Placer and Yolo counties for CalHFA Non-Targeted Resale and New Construction are $429,619. For those with targeted areas the loan amount increases to $525,090.

Final Thought…

Don't waste life in doubts and fears; spend yourself on the work before you, well assured that the right performance of this hour's duties will be the best preparation for the hours and ages that will follow it.

~Ralph Waldo Emerson

01/16/08 Economic Stimilus Package Update

2008-02-12T16:52:00.000-08:00

Here is a recap of the “Stimulus package” that our government has been working on…
Once this is passed, it will generate hundreds of thousands of home sales. This is much needed and wonderful news.

Congress, President Agree to Loan Limit Hike in Stimulus Package stimulus

California will see federally guaranteed mortgages as high as $730,000 if pending emergency legislation, now awaiting action in the U.S. Senate, is approved. Late last week Congress and President Bush reached agreement on the contents of a so-called "economic stimulus" package, which after several days of lobbying and negotiation, now includes an increase in the limits placed on federally guaranteed loans, which should help revive California's slumping housing markets.

The limit on what are referred to as "conforming" loans is set by the federal government and serves as the cap under which "government sponsored enterprises" (GSEs) such as Fannie Mae and Freddie Mac may purchase mortgage loans and turn them into marketable "securities" which private investors buy.

GSEs were established by the federal government over 70 years ago to keep mortgage credit markets "liquid" and help deliver lower interest rates to homebuyers. But the limit now as well as those set over the past several decades are far too low to provide at least half of California homebuyers the lower-financing-cost benefits this Depression-era program intended. CBIA has long complained that these limits don't work in California and force homebuyers in the state to finance their purchases using "jumbo" loans which carry higher interest rates.

It's estimated that over the life of a 30-year jumbo loan a California homebuyer spends $150,000 more in financing costs on the purchase of a median-priced home. If the current agreement between the White House and Congress is enacted - something that's expected to happen in the next two weeks - high-cost markets around the country - and most of those in California - will see conforming loans go from the current $419,000 to $730,000. CBIA was joined in its advocacy for including the conforming loan limit change in the stimulus package by NAHB, the California Association of Realtors and their national association, the California Mortgage Bankers Association and by Governor Schwarzenegger. Indeed, the Governor sent a letter to congressional leaders last week, saying "No issue is of greater importance to California's economy than raising credit for our housing market."

Most economists lauded the proposed changed, confirming that it will give a much-needed shot in the arm to the nation's sagging real estate sector. The National Association of Realtors estimated that a sizeable increase in the loan limit like the one now being pushed in Washington will generate hundreds of thousands of additional home sales nationwide and produce over $40 billion in economic activity.

So, in a nutshell… The activity that this legislation will generate, is going to pump some life back into the market which will also (hopefully) get the majority of consumers “off the fence” and it will create huge oppurtunities for consumers to buy more home for less money and ease higher payments for people that are currently in Jumbo financing.

Final Thought…

"The secret of success in life is for a man to be ready for his opportunity when it comes."

Benjamin Disraeli (1804-1881)British statesman and prime minister

1/16/08 RESPA UPDATES

2008-02-12T16:43:00.000-08:00

Here is an article that you might find interesting and useful. It affects all of us who are licensed with the DRE.

RESPA released this article regarding the enforcement of compliance.

NOTE* Certain lenders avoid sending out RESPA and Disclosures because they have alternative motives, they are lazy or they do not know what they are doing. DRE requires lenders, that it is mandatory RESPA is sent out within 72 hours of a lender either quoting rate or pulling credit. The main reason for this law is so that consumers understand what they are being charged and what the parameters of the loan are. This is how RESPA is cracking down.

I hope this helps.

Issue Date: RESPA News Monthly January 2008, Posted On: 1/2/2008 HUD reports sharp increase in RESPA response efforts
The real estate market may be down, but HUD's RESPA activity is up...way up, according to a new report released by the agency showing that the number of RESPA inquiries and complaints HUD’s RESPA office handled in 2007 was remarkably higher than the year before. HUD also showed an increase in the number of enforcement actions and touted the novel ways it had handled certain RESPA issues in the past year. Read on for a look at the report and to see how HUD’s enforcement continues to rise.

By Robin Wardzala

The real estate market may be down, but HUD's RESPA activity is up...way up, according to a new report issued at the end of 2007 by HUD’s Chief Financial Officer.
The agency's Performance and Accountability Report for FY 2007 summarized (in 447 pages) HUD’s activities over the past year.

The report was broken up into sections corresponding with HUD’s six strategic goals. Notably, while “Increasing Homeownership Opportunities” was HUD’s eighth goal in 2006, in 2007 it ranked as number one, reflecting an apparent rise in the importance of that issue.
As a part of that issue, HUD denoted a sub-goal of “making the homebuying process less complicated and less expensive” which covered its activities under RESPA.

In the 2007 report, HUD noted that it currently receives RESPA inquiries and complaints from consumers, industry and other state and federal regulatory agencies by mail, telephone, and e-mail. The FY 2007 goal was to respond to 3,000 of these inquiries and complaints.

Skyrocketing numbers However, the RESPA office "responded to 6,622 inquiries and complaints during FY 2007. This number exceeds the goal by 121 percent,” HUD said in its report.
This marks a huge increase in the number of inquiries the RESPA office is responding to, as in FY 2006, the department only responded to 1,355 complaints.

According to the report, HUD’s RESPA office “anticipated that by increasing public awareness of enforcement, an increasing number of consumers, industry, and other regulatory agencies would file complaints alleging violations of the act. This increased public awareness has helped bring additional violations of the act to the attention of the department and enabled the department to provide greater assistance to the public, particularly consumers.”

The report added that “the office also was involved in public affairs and outreach by providing training to state and federal regulatory agencies, speaking at industry conferences … [and] providing information to various news agencies … to help increase consumer awareness.”

Industry pays out $6 million
The 6,622 complaints and inquiries the office responded to in 2007 “included questions and complaints from industry, consumer, and state and federal regulators regarding practices that violate RESPA,” HUD said.

“Consumer redress cases returned over $1 million to consumers who complained about unearned fees, misapplied loan payments, unpaid property taxes and unpaid insurance premiums. The office closed 12 formal executed settlement agreements resulting in payments of over $5 million,” the report continued. “Additionally, two agreements were coordinated with state regulatory agencies. In one case, the Department of Justice filed a federal lawsuit on behalf of HUD for violations of [RESPA].”

Curiously, of the 12 closed settlements HUD reported, only nine were publicly announced. Collectively, those nine represented the results of three investigations.

HUD’s reported 12 settlement agreements in FY 2007 also exceeded FY 2006, when HUD announced eight individual settlements, which represented the results of three investigations. That number still fell short of the record number of settlements HUD reached in 2005, when it chalked-up a total of 14 agreements.

The year to come
Regarding HUD’s RESPA goals for 2008, its budget statements indicate that its priorities lie in undertaking reform of the RESPA regulations.
As of press time, the RESPA reform rule was still marked as being under review at the Office of Management and Budget, but sources have indicated that it could be released as early as January 8.

Final Thought…

The man who makes a success of an important venture never waits for the crowd. He strikes out for himself. It takes nerve, it takes a great lot of grit; but the man that succeeds has both. Anyone can fail. The public admires the man who has enough confidence in himself to take a chance. These chances are the main things after all. The man who tries to succeed must expect to be criticized. Nothing important was ever done but the greater number consulted previously doubted the possibility. Success is the accomplishment of that which most people think can't be done.

~C. V. White

12/27/08 Happy New Year and May Your Dreams Come True!

2008-02-12T16:28:00.000-08:00

Instead of sending focusing on a market update, I want to focus completely on you today. With that in mind, I have three thought provoking questions to ask you…

1.) What goals, if you accomplished them, would make your world a better place and give you a deep sense of achievement?

2.) What do you desire, that you have been putting off?

3.) What are the three most significant things that you would like to complete for yourself this coming year?

I ask you this because, with the New Year being only a few days away, it is time to think about what you will be striving for through 2008 and what barriers need to be removed that held you back in 2007!

I am sending you this because I had a chance to converse with the author of the following mini-article as he inspired me to look at some aspects of my life, which I know all of us go through at times. My wish is that you are able to take something from it as well.

This is my gift to you in hopes that you have the best year ever.

~

~ The Time To Start Working On That Dream Is Now! ~

Most of us are hesitant to start anything because we are afraid we might make a mistake or fail. Go ahead make mistakes!

Don't wait for more experience or to be good enough to start. You don't have to be good to start, but you have to start to be good. Some may tease and laugh at you. They will warn you, and recite all the reasons why you shouldn't take the risk. These will be the ones to wait around patiently hoping to say, "I told you so."

Brush them off. If you let these people influence you in any way, you will never, ever be ready to go ahead and start making your dream a reality.You will never have enough money, enough time, enough support, or experience to start. But once you muster up the courage to take that giant step forward and start, the rest will fall into place.

But only you can make it happen! You have to start now with whatever you know, whatever you have, and wherever you are. Don't let money be your handicap. You don't need money to make the phone call, attend that networking event, or go as a guest to an association meeting in your field.

How about volunteering a few hours a week to work for someone in the business arena that you're thinking about? Do you see what I mean? You have so many opportunities out there. Do something! Be sure to keep a good database. Record your contacts and touch base with them every three months. And guess how much that will cost you? Zero. Most computers already come with a database program. All you need is a little time which you can choose to create right now. Your assignment: This month, write down what kind of resources you will need and which people can help you make your dream a reality. Be creative! Go for it.

If you would like to sign up for Rene Godefroy’s newsletter go to:
www.villagehero.com

Final Thought…

Cherish your vision and your dreams as they are the children of your soul; the blueprints of your ultimate achievements.

-Napoleon Hill

12/21/07 Aid for Distressed Families

2008-02-12T16:23:00.000-08:00

Here is some great news on changes in the market place that will aid families who are in distressed situations.

I have followed it up with an inspirational excerpt from Napoleon Hills: Grow Rich! With Peace of mind.

~

Mortgage Forgiveness Act Signed into Law

Yesterday, President Bush signed H.R. 3648, The Mortgage Forgiveness Act of 2007, into law, sparing homeowners the tax burden associated with canceled mortgage debt.

Prior to this action, forgiven mortgage debt due to foreclosure, short sale, or deed in lieu of foreclosure, was considered taxable income. The new law, however, temporarily waives these taxes for debts forgiven (as high as 35%) from the beginning of 2007 to the end of 2009. The bill also extends the tax deduction for mortgage insurance premiums through 2014.

"This is going to make a happy holiday for many homeowners," President Bush said yesterday before signing the bill in to law. During the press conference he added the following:

"When you're worried about making your payments, higher taxes are the last thing you need to worry about. So this bill will create a three-year window for homeowners to refinance their mortgage and pay no taxes on any debt forgiveness that they receive. And it's a really good piece of legislation. The provision will increase the incentive for borrowers and lenders to work together to refinance loans – and it will allow American families to secure lower mortgage payments without facing higher taxes."

"There's more work to be done," Bush added, saying that Congress needs to pass legislation to strengthen Freddie Mac and Fannie Mae, to modernize FHA, and to allow the government to issue tax-exempt bonds for refinancing existing home loans.

~

Excerpt from Napoleon Hill’sGrow Rich! With Peace of Mind: by Napoleon Hill

What do we mean by BELIEVE? “Wishing won’t make is so,” runs an old saying. This is true, and helps you remember a wish is not a belief.

A wish takes place, as it were, upon the surface of the mind. I wish . . . you may say, and follow with any wish that tickles your fancy . . . to have a million dollars drop into your lap . . . to be able to flay your arms and fly. A wish is not limited by natural forces.

That very apparent fact, however, is not the main difference between a wish and a belief. A belief is created, as it were, in the depths of the mind. A belief becomes part of you. That is why a true, deep belief can change your glandular secretions and the content of your bloodstream, and work other physical changes beyond the power of medical science to explain. Again, a belief, radiating its unknown wave length from the depths of your mind to the depths of another mind, accounts for a good deal of “personality” power and much else on which we can put only the clumsiest of labels. It is belief in a cause – much stronger than a wish to stay alive – which causes people to transcend even the instinct of self-preservation. It is belief that founds religion, sustains nations, stands behind anything great that ever is achieved. A belief, I repeat, is part of you; that is why you can achieve what you believe. Moreover, when you hold a great belief you believe all the time, just as, all the time, you go on living. Source: Grow Rich! With Peace of Mind. Napoleon Hill. Fawcett Crest Book, 1967. Pg. 177.

( If you would like to subscripe to the Napoleon Hill Inspirational newsletter go to: www.Napoleon-Hill-News.com )

Final Thought…
To laugh is to risk appearing a fool,
To weep is to risk appearing sentimental,
To reach out to another is to risk involvement,
To expose feelings is to risk exposing your true self,
To place your ideas and dreams before a crowd is to risk their loss,
To love is to risk not being loved in return,
To hope is to risk despair, To try is to risk to failure.
But risks must be taken because the greatest hazard in life is to risk nothing.
The person who risks nothing, does nothing, has nothing is nothing.
He may avoid suffering and sorrow,But he cannot learn, feel, change, grow or live.
Chained by his servitude he is a slave who has forfeited all freedom.
Only a person who risks is free.

~Anon.

12/18/07 Realtor Update...

2008-02-12T16:20:00.000-08:00

Here is a crucial update on issues that will now be affecting the market as of yesterday. This means your business too, so I want to share this with you.

The changes are summarized below for your benefit.

Following these summaries are some key tactics to focus on which will help you grow in this market.

Keep in mind these are NOT lending institutional changes. These are FNMA/FHLMC changes and they apply to EVERYONE.
*They will especially affect First Time Home Buyers and High Loan to Value refinances.

1) “Adverse Market Conditions" Adjustment
You will notice loan level pricing adjustments for credit scores and LTV/CLTV. These apply to ALL FNMA loans over 70% LTV with scores less than 680.
Again, these adjustments are per the changes announced by FNMA and FHMLC. Jumbo loan amounts are not governed by these entities but they will be subject to risk based pricing as well.

2) Maximum Seller Contribution Reduction
The maximum seller contribution for Loan to Value’s (LTV’s) above 90% is now 3% (except for investments loans, which is always 2%).

Again, for purchases…the solution is to gain an additional 3% to help in taking care of down payment and closing costs is the down payment assistance programs.

3) Declining Market LTV Reductions

All California properties will require the maximum LTV and CLTV limits to be cut by 5% for the program maximum.
This is for: Conventional Conforming, Jumbo, Seconds and My Community.

At this moment (which it can change), Cal HFA is not effected by this change (unless you go I/O) and neither are the FHA and VA products. If you want maximum financing on a FLEX product, your maximum LTV is 95% for a property in California. Pease note that your appraiser must still provide 2 closed comps that support value that are dated within 60 days of the appraisal.

4) Lock Policy for Existing and New Locks
All of the above apply to any loans that are not already locked.

If your loan is locked, you need to make sure you meet your lock expiration date or your pricing and guidelines will change. Any changes or extensions to an existing lock will require the implementation of all pricing and underwriting guidelines that are in effect as of the date of the change. A common example would be if you locked your loan on a conforming fixed rate product and you now have an EA-1 finding that requires you to change your lock, your pricing and guidelines will change.

How to navigate through these changes

The solutions to gain maximum financing (as I have reported in earlier snapshots) will be FHA and Down Payment assistance programs for loans $417,000 or under. (FHA just increased loan amounts to conforming limits of $417,000).

Keep in mind that “applied knowledge is power” and the more you know; the more freely you will be able to use your gifts and talents accordingly to serve your client’s in the best way possible. Always keep learning and following up on industry activity as well as self development.

Have your prospects get qualified BEFORE you show them properties.

Communicate with your lender about any up-front challenges that could possibly arise so that there are no last minute “surprises” and the home buying process goes smoothly for all parties involved.

Maintain and cultivate your database. This is a goldmine that is rarely utilized to its fullest potential.

Fire prospects that waste your time and are not serious... Hint* Beware the “Hurry up and wait” game.

Cross sell your strategic partners and create referrals through reciprocation and strategically positioned social proof.

Take strategic action to establish higher and higher levels of credibility which will draw prospects to you and separate you from your competition.

Final Thought…

The way to gain a good reputation is to endeavor to be what you desire to appear.

– Socrates

12/17/08 Solutions to 100% Financing

2008-02-12T16:18:00.000-08:00

Good Morning!

With the fall out of Sub-Prime financing and the deterioration of Alt-A financing there has been a ton of speculation on how people with challenged credit and First Time Home Buyers will be able to qualify for home loans.

Many experts have been referring to FHA and the 100% My Community Products as the solution and the replacement to Alt-A & Sub-Prime lending. There needs to be some changes to FHA to make it available to more borrowers. It has been a long time since the program was updated to fit the current market/economy and it looks like folks in Washington are making moves

We may see the FHA Reform Bill passed prior to the end of the year. If the conference is able to happen next week before holiday recess we could see this implemented ASAP. If not it could be the first couple of weeks of the New Year. Either way, this will open doors for those who were unable to qualify.

I have attached a comparison of the House and Senate versions. The final bill will more then likely be somewhere in-between.

There are some modifications to the original bill that the House passed earlier this fall. The key differences are as follows:

1. FHA loan limits will rise to the current Conforming loan limits of $417,000
2. Minimum down payment will be 1 ½ %.
3. Raises the upfront MI and the MMI premiums.
4. Delays the “risk based pricing” for 12 months.

This is all GREAT news as it helps many more people purchase and refinance out of instable financing. It will also make the FHA Secure program more viable as well.

Final Thought…

The talent of success is nothing more than doing what you can do, well.

~Henry W. Longfellow

Gain an Edge Over Your Competetion! 3-2-1 Buydown.

2008-02-12T16:15:00.000-08:00

In a market as competitive as the one we are experiencing, it is essential that we exhaust every opportunity separate ourselves from the pack.

This is one way to do so.

Did you know that by having your seller/builder credit potential buyers non-recurring closing costs specifically in the form of a Third Party Funded Temporary Buy-Down the following benefits are realized:

More buyers are qualified with your listing compared to other listings on MLS because monthly mortgage payments are reduced by hundreds—thousands of dollars less per month.

Home sellers closer to asking price resulting in satisfied seller and maintains comps/values in subject neighborhood.

Sellers cost basis is reduced by the amount of seller credit.

Buyer gains tax deduction equal to the amount of the seller credit.

If the borrower refinances or sells the property, the unused buydown funds will be credited to the borrower, reducing the payoff.

With the above benefits you are uniquely positioned in your marketplace with a different offer to your potential sellerw/builders.

Temporary Buy-Down Defined

The (3-2-1 or 2-1 or 1-1-1) Temporary Buy-Down reduces the borrower’s monthly mortgage payment. Example—3%reduction of the payment rate the first year, 2% reduction of the payment rate the second year and 1% in the third year.

The Buy-Down Subsidy is paid by the seller (or builder) at the close of escrow and placed into a buy-down account with the lender.

Each month the buy-down account is drawn upon to make up the difference between the buyers payment and the actual payment at the note rate.

Final Thought

They can because they think they can.

~Virgil

12/11/07 Economic & Mortgage Developments

2008-02-12T16:13:00.000-08:00

Economic and Mortgage Market Developments (Fannie Mae)

Housing market. The latest housing data were mixed, with existing home sales falling and new home sales rising in September (though prior estimates for new home sales in June, July and August were revised downward). We project that the combination of below-trend economic growth, low affordability, real estate investors leaving for greener pastures, and dislocations in the mortgage market will continue to slow housing starts and sales for the rest of this year and into 2008. Total home sales should decline by 14 percent in 2007 (from the annual level of sales recorded in 2006) and by another 12 percent in 2008. Single-family housing starts are projected to fall by 28 percent this year and by 14 percent next year. The housing market should stabilize in the second half of next year, with sustained gains in the level of sales activity beginning in 2009.

House prices. The large number of unsold homes on the market is putting downward pressure on house prices. This price weakness is likely to extend into 2009 until a combination of a projected rise in home sales and decline in unsold inventories leads to perhaps a modest gain in prices by 2010.

Mortgage market. The projected decline in home sales and prices will lead to a decline in purchase originations of 14 percent in 2007 and 19 percent in 2008 (to $1.2 and $1.0 trillion, respectively). Refinance originations are projected to slip only modestly to $1.2 trillion in 2007 and $1.1 trillion in 2008 (from an estimated $1.3 trillion in 2006) as many borrowers with upwardly-adjusting ARMs continue to refinance into new lower-rate loans. The ARM share (of the number of mortgage applications) is expected to remain near its current level of 14-15 percent for the next several quarters. Growth in single-family mortgage debt outstanding is projected to slow to 6.3 percent in 2007 and to between 4-5 percent for the next several years.

Molly R. Boesel and David Kogut
Economics and Mortgage

12/10/07

2008-02-12T15:45:00.000-08:00

President Bush Announces Industry Agreement to Freeze Sub-Prime Mortgage Rates
Following weeks of talks with Treasury Department officials, mortgage lenders and Wall Street firms, President Bush announced today an agreement to freeze interest rates for up to five years for some borrowers with sub-prime loans.

What you need to know about the agreement:
The agreement will allow distressed borrowers who are current on their sub-prime loan payments to keep their low introductory rates
The rate freeze will apply to loans taken out between January 1, 2005, and July 30, 2007, and scheduled to rise in 2008 and 2009

The rate freeze will exclude the following groups:
Borrowers who are delinquent on payments
Borrowers whose introductory rates expire before January 1, 2008
Borrowers who mortgage companies determine have sufficient income to pay the higher rates
According to recent news reports, administration officials said the rate freeze was only part of a broader plan. For more information, refer to the White House fact sheet, which is attached below. Or, go to the MBA Website for their latest press releases.
Fact Sheet: Helping American Families Keep Their Homes -

President Bush Announces Private-Sector Plan To Help Struggling Homeowners, Calls On Congress To Join Administration In Acting Today, President Bush outlined steps the Administration is taking to help American homeowners and called on Congress to join him in delivering relief to homeowners in need.

In August, President Bush announced measures to help many struggling homeowners, including directing Treasury Secretary Henry Paulson and Housing and Urban Development (HUD) Secretary Alphonso Jackson to work with lenders, loan servicers, mortgage counselors, and investors on an initiative to help struggling homeowners. Secretaries Paulson and Jackson responded by assembling a private-sector group called the HOPE NOW Alliance. HOPE NOW is an example of government bringing together members of the private sector to voluntarily address a national challenge – without taxpayer subsidies or government mandates. Today, the President announced that these efforts have yielded a promising new source of relief for American homeowners.

President Bush announced that representatives of HOPE NOW have developed a plan under which up to 1.2 million homeowners could be eligible for assistance. Many individual homeowners feeling financial stress have "adjustable rate mortgages," which typically start with a lower interest rate and then reset to a higher rate after a few years.

The HOPE NOW plan is designed to help subprime borrowers who can at least afford the current, starter rate on a subprime loan, but will not be able to make the higher payments once the interest rate goes up.

HOPE NOW members have agreed on a set of new industry-wide standards to provide systematic relief to these borrowers in one of three ways:

Refinancing an existing loan into a new private mortgage;
Moving them into an FHASecure loan; or
Freezing their current interest rates for five years.

Since The President's Announcement In August Of Targeted Actions To Assist Homeowners, The Administration Has Moved Forward With Three Key Steps

1. The President and his Administration have launched a new initiative at the Federal Housing Administration (FHA) called FHASecure. FHASecure expands the FHA's ability to offer refinancing by giving it the flexibility to work with homeowners who have good credit histories but cannot afford their current payments. In just three months, the FHA has received over 120,000 refinancing applications and has already helped more than 35,000 people refinance. By the end of 2008, the FHA expects this program to help more than 300,000 families.
The FHA is also on track to start charging mortgage insurance premiums based on the individual risk of each loan, using traditional underwriting standards. Risk-based pricing will expand access and enable FHA to help even more low-to-moderate income families who could not otherwise qualify for prime-rate financing.

2. Secretaries Paulson and Jackson have assembled the private-sector HOPE NOW alliance. This morning, representatives of HOPE NOW briefed the President on the plan they have developed.

In addition:
HOPE NOW recently mailed hundreds of thousands of letters to borrowers falling behind on their payments. In the past, some lenders and mortgage servicers may not have contacted borrowers until after their loans were delinquent. The Alliance is trying to reach families early, before their mortgage problem becomes overwhelming.
HOPE NOW has supported a toll-free hotline, 1-888-995-HOPE, which is available 24-hours a day to provide mortgage counseling in multiple languages.

3. The Federal government is taking several regulatory actions to make the mortgage industry more transparent, reliable, and fair. Later this month, the Federal Reserve intends to announce stronger lending standards that will help protect borrowers. In addition, HUD and the Federal banking regulators are each taking steps to improve disclosure requirements so that homeowners can be confident they are receiving complete, accurate, and understandable information about their mortgages.

If Members Of Congress Are Serious About Responding To The Challenges In The Housing Market, They Can Start With Several Steps Of Their Own

1. Congress needs to pass legislation to modernize the FHA. In April 2006, President Bush first sent Congress an FHA modernization bill that would increase access to FHA-insured loans by lowering downpayment requirements, allowing the FHA to insure bigger mortgages in high-cost states, and expanding FHA's authority to price insurance fairly, with risk based premiums. The House passed the bill with more than 400 votes last year. This year, the House passed it again, yet the Senate has not acted.

The liquidity and stability that FHA provides the market are needed now more than ever, and the President urges the Senate to move as quickly as possible. This bill could allow the FHA to help 250,000 additional families by the end of 2008.

2. Congress needs to temporarily reform the tax code to help homeowners refinance during this time of housing market stress. Under current law, if the value of your house declines and your bank forgives a portion of your mortgage, the tax code treats the amount forgiven as taxable income. The House recently passed this tax relief with bipartisan support, and the Senate should pass relief as soon as possible.

The Administration has also proposed allowing cities and States to issue tax-exempt mortgage bonds to refinance existing loans, and the President calls on Congress to approve this temporary measure quickly. Under current law, cities and states can issue tax-exempt bonds to finance new mortgages for first-time homebuyers, and this measure would make it easier for State housing authorities to help troubled borrowers.

3. Congress needs to pass funding to support mortgage counseling. Non-profit groups like NeighborWorks provide an essential service by helping homeowners find affordable mortgage solutions and prevent foreclosures. The President's FY 2008 Budget requests $120 million for NeighborWorks and another $50 million for HUD's mortgage counseling program. Congress has had these requests since early February, and it needs to stop delaying and get this funding to the President's desk.

4. Congress needs to pass legislation to reform Government Sponsored Enterprises (GSEs) like Freddie Mac and Fannie Mae. GSEs provide liquidity to the mortgage market that benefits millions of homeowners, and it is vital that they operate safely and soundly. The President has called on Congress to pass legislation that strengthens independent regulation of the GSEs and ensures they focus on their important housing mission. The GSE reform bill passed by the House earlier this year is a good start, and the Senate needs to pass legislation soon.

Final Thought:
The thing always happens that you really believe in; and the belief in a thing makes it happen.
Frank Loyd Wright

12/6/07 Market Snapshot and Key Update

2008-02-12T15:44:00.000-08:00

Good Morning,

This will have an effect on the market, especially for your first time home buyers.

Any FICO below 680 now has a .375 add…
FNMA has been in the news quite a bit lately reporting massive losses, and this is just the first step in mitigating these losses.

Perhaps more importantly is that effective 1/1/08 it looks like 100% financing may be going away due to the declining values situation.

FNMA APPEARS to be implementing across the board 5% LTV reductions from the maximum financing allowed in any market with declining values. This will directly affect us since we are in a declining market.

I would suggest you communicate this to any of your clients who have been on the fence and will be requiring 100% financing.

As of now, there are more then 5 programs that are available to borrowers to reach 100% financing… FHA is also available but will be subject to risk based pricing as well. Meaning that FHA is still available, and the stronger borrowers will receive better pricing.

I will consistently keep you updated on market activity that will directly affect your business. If you have any questions or would like more detailed information please don’t hesitate to contact me.

An appropriate Quote, relevant to today’s events:

Follow your honest convictions, and stay strong.William Thackeray

12/3/07 Market Snapshot and Key Update

2008-02-12T15:41:00.000-08:00

We must remember that when a foreclosure happens, there is usually an emotional crash that follows which can take years to overcome. This is devastating and although there are many who have lost and will lose their homes, there are many who DO NOT have to. I have attached an informative sheet that I urge you to forward to your clients.

Knowledge and action combined equals power. Let’s do all we can to give our customers and loved ones the available knowledge they need to take action.

This is why I am sending you this.

· Sacramento currently has the 6th highest foreclosure rate in the nation. Out of the top ten highest foreclosure rate locations, 7 of them are located in California.
· According to Data Quick there is expected to have been 52,560 defaults from June through the end of December in California.
· Through the end of 2008 there are expected to be 172,220 defaults. Half of these are expected to result in foreclosure.

One available program that I personally use to save distressed people is the FHA secure. This program allows people who are in sub-prime and prime loans to refinance when they otherwise would not be able to. Especially for borrowers who are in negative amortizations. To learn more about this program, please feel free to research it or give me a call at 916-960-0440. You can also e-mail me and I will elaborate.

Make sure that you are working with someone who knows what they are doing and who is willing to educate both the borrower and you on the knowledge that would have kept people from ending up in this mess in the first place.

There was an announcement made today by Governor Arnold Schwarzenegger that the 4 top lenders who carry 25% of California’s sub-prime loans; have agreed to freeze loans at their current rates which would otherwise be adjusting and possibly going into foreclosure. With housing prices declining and loss of equity, borrowers are stuck and cannot refinance their home loans into lower rates. With the lack of equity to refinance, this program creates hope for many consumers would otherwise loose their homes.

The lenders that are participating as of now are:

Countrywide Home Loans
GMAC
Litton Servicing
Home Eq.

Their stipulations are as follows:

Borrowers MUST communicate with the lenders. (Most foreclosures that have happened; occurred without any communication from the consumer to the borrower).

Previous payments have to have been made on time.

Borrowers must prove hardship and that if the loan does adjust they will not be able to make the payments.

Please feel free to contact me for further information. I hope you are having a wonderful holiday. This is indeed a time that has allowed me to reflect on how grateful I am for my many blessings. I am also grateful for all of you who are still in the industry for the long haul.