Posts Tagged ‘lender’

Audit: FHA’s reserve funds way below what law requires

Thursday, November 12th, 2009

From The Washington Post : ‘FHA’s cash reserves have dropped well below amount required by law, audit shows’

DHW asks: Do you think the FHA’s reserves will hit zero?

FHA loan limits in your area

Foreclosures down but not out

Thursday, November 12th, 2009

U.S. foreclosures sank for a third consecutive month in October, down 3% from the previous month. However, many feel this trend will not continue. Foreclosure notices were curtailed in many states due to temporary, legislative intervention. CNBC reported Nevada foreclosures “dropped 26 percent from the previous month because of new legislation requiring mediation before initiating foreclosure proceedings.” Illinois had similar legislation, but foreclosure notices skyrocketed there 56% in October from the previous month.   

States leading in foreclosure:

  1. Nevada
  2. California
  3. Florida
  4. Arizona
  5. Idaho

DHW asks: Are foreclosures down in your area?

Realogy CEO just doesn’t get it.

Wednesday, November 11th, 2009

In a CNBC interview this morning, Realogy CEO, Richard Smith, called on FHA to increase its minimum required down payment of 3.5%. Mr Smith suggested the ‘risk profile’ will have to change to stave off foreclosures. This argument only perpetuates the myth that those who put less money down are somehow less attached to their home than those who put down a significant amount. Mr Smith should have taken the opportunity to call on the administration and Congress to cure the real problems that cause mortgage delinquencies.

The Urban Institute, a Washington D.C. based think tank, issued a study recently that revealed some interesting, though not surprising, data. Those who put little or no money down tend to be more poor than those who put, say, 20% down. They are also less likely to have health insurance. Someone who has health insurance is more likely to miss less work due to an illness than someone who has no insurance. This is only one example cited in the Institute’s report. 

Although many pundits, including Mr Smith, suggest the nation’s recovery is tied to housing, it is not. It is tied to job creation. You cannot have a 10% unemployment rate and expect to have a stabilizing housing market.

Reology is the world’s largest brokerage operator. They own Coldwell Banker, Century 21, Better Homes and Gardens Real Estate and ERA. 

DHW asks: Do you think the FHA should increase its minimum required down payment?

FHA loosens condo project guidelines

Wednesday, November 11th, 2009

The Miami Herald reported the Federal Housing Administration (FHA) is temporarily relaxing underwriting guidelines for some condominium communities. The changes are intended to increase condo sales and put occupants in otherwise vacant units. 

DHW asks: Do you agree with the FHA’s decision to relax condo underwriting guidelines?

Critics be damned. Home sales up, prices down

Tuesday, November 10th, 2009

Critics of the Housing Tax Credit were quieted, if only briefly, when the National Association of Realtors (NAR) released data for third quarter home sales. According to the trade group, home sales increased by nearly 6% over this same time last year. Despite the spike in sales, prices have fallen more than 11% during the same period. The U.S. median existing single-family price for the third quarter was $177,900.

Opponents of the housing tax credit feared an inflationary reaction in home prices. Although housing inventories are down, existing units still outweigh the demand.

NAR chief economist,  Lawrence Yun, predicts home prices will stabalize next spring. His prediction may be overly optimistic. Foreclosures and short sales made up 30% of thrid quarter sales. There is no real evidence to suggest foreclosures will take a breather in 2010.

DHW asks: Do you see a bottom to the housing market?

Citi and USA Today: 1 in 5 dressed like they want it

Monday, November 9th, 2009

Last week, CitiMortgage suggested in a USA Today article that 1 in 5 homeowners currently in default of their mortgage are doing so strategically or voluntarily. They cite Sharon Sakson as one of these ’strategic defaults.’ Ms Sakson was laid off as a television writer and producer. After losing her job, she ‘burned through her savings to pay her mortgage.’ Burned through her savings. Ms Sakson is possibly the worst strategist I know. She strategically lost her job then voluntarily burned through her savings to make her mortgage payments. She eventually ‘walked away’ from her New Jersey home.

Clearly, we’re made to think Sakson and others who ‘walk away’ from their homes are bad people. How CitiMortgage and other lenders can get away with this type of character  assassination is beyond belief. Even more unbelievable, USA Today refuses to call lenders out on this practice. 

Readers should also note the USA Today article is not entirely accurate with regard to the seven-year wait period. If the foreclosed property is a primary residence, a borrower may be eligible for a new mortgage in five years.

DHW asks: USA Today’s decision to ‘blame the victim’ struck a nerve with a lot of folks at DesperateHouseWise. Have you had to walk away from your home?

DesperateHouseWise Update

Saturday, November 7th, 2009

DesperateHouseWise.com added a new page to its site. Modification Center offers helpful information for homeowners seeking a loan modification or refinance. Find information about Making Home Affordable and local foreclosure prevention events. You can even find a free, HUD-approved housing counselor.

DHW also added Housing Tax Credits. This page provides in-depth information regarding the recent extension and additions to the housing tax credits.

DHW asks: Have you applied for a loan modification? How was your experience?

Done! Obama signs bill extending, creating Tax Credits

Friday, November 6th, 2009

President Obama signed bill  H.R. 3548, extending unemployment benefits for all states and extending the $8,000 Tax Credit for first home buyers. The bill also creates a $6,500 tax credit for those home buyers who have owned their current primary residence for at least 5 years.  See ‘Housing Tax Credits’ for more details. You can also see how congress voted.

Remember: The $6,500 tax credit took effect when the President signed the bill.

DHW asks: Will this encourage you to buy a home?

VA Compromise Sale

Monday, October 26th, 2009

There are two must-have guides for homeowners and real estate agents pursuing a VA compromise sale (commonly referred to as a ‘VA short sale’):

The first is written for real estate professionals and homeowners; the second for servicers (i.e. your mortgage lender).

Important facts to remember when negotiating an offer:

  • After you have a fully executed contract, your lender will order a VA appraisal. VA will not approve the sale if the net proceeds are less than 88% of the new appraised value. Remember this when negotiating the price.
  • For a compromise sale, VA discourages the seller from paying costs that are customarily paid by the buyer. You should have a strong argument ready for your lender if the contract reflects these expenses. VA may still approve these costs if the lender nets at least 88% of the appraised value.
  • Don’t believe your lender if they tell you a customary seller’s expense is not approved by VA. (This is where the Servicer Loss Mitigation Program guide comes in handy. See the bottom of page 28 with regard to allowable costs.) This fact cannot be stressed enough: VA does not have a sanctioned list of “allowable” and “non-allowable” closing costs. If your lender uses this tactic to deny authorizing customary expenses, push back. Do not be afraid to call VA for backup (1-800-933-5499 or 1-800-319-9446). The VA is far more reasonable than your lender will have you believe.

DHW asks: Have you completed or attempted a VA compromise sale? How was your experience?

Loan modification: communication is key

Sunday, October 25th, 2009

Communication is the key to any strong relationship. The relationship you have with your lender is no exception. It’s important you respond when your lender reaches out to you. Likewise, your lender should be responsive when you have questions or concerns. But what do you do when your lender won’t return your calls or emails? It may be time to step back and look at how you communicate.

No doubt your lender gets tons of calls and emails a day. Don’t underestimate the impact a personal note can make. Remember the now infamous meltdown of Countrywide’s former CEO, Angelo Mozilo? After receiving impersonal email after impersonal email, Mozilo got mad as hell and wasn’t going to take it anymore. “This is unbelievable,” Mozilo wrote. “Most of these letters now have the same wording. Obviously they are being counseled by some other person or by the Internet. Disgusting.” Mozilo’s frustration was understandable. Imagine if just one of his customers had taken the time to write him a nice, personal note. Below is a sample letter that may help solicit a quicker response from your lender. Of course, personalize your letter so as not to disgust the reader. I also suggest including a small, personal token of your appreciation.

Dear Sir or Madame (insert name of lender’s CEO here):

I hope this letter finds you doing well. So much has happened since we bought our home on Bonnet Drive. Our little girl, Suzie, starts kindergarten this year and Bobby Jr. now has his driver’s license. They grow so quickly, don’t they?

I’m writing you this letter because I have attempted several times to reach your company by phone and email regarding a loan modification. No one has returned my inquiries. We are in financial distress and need to reduce our house payments to avoid foreclosure. I know you and your company get so many calls that it must be difficult to keep all the names straight. To help you remember our home, I included a doorknob with this letter. If you’re still a little foggy about the details, don’t worry. I will continue to send you more artifacts from our home until it becomes clear. Surely my garbage disposer and toilet brush will help you remember.

I look forward to catching up with you.

All the best,

John or Jane Doe

Loan # 11111111111
DHW asks: Have you attempted a loan modification? Were you successful?