Monday, August 30, 2010

FHA Refinance of Borrowers in Negative Equity Position....but current on their loan

Wow sounds great but what does that mean?

On March 26, 2010, the Department of Housing and Urban Development (HUD) and the Department of the Treasury (Treasury) announced enhancements to the existing Making Home Affordable Program (MHA) and Federal Housing Administration (FHA) refinance program that will give a greater number of responsible borrowers an opportunity to remain in their homes. These
enhancements are designed to maintain homeownership by providing borrowers, who owe more on their mortgage than the value of their home, opportunities to refinance into an affordable FHA loan. This opportunity allows borrowers who are current on their mortgage to qualify for an FHA refinance loan provided that the lender or investor writes off the unpaid principal balance of the original first lien mortgage by at least 10 percent.

This Mortgagee Letter provides additional guidance for lenders regarding the requirements and administration of these enhancements to FHA’s refinance program. These enhancements are effective for loans with case numbers issued on or after September 7, 2010, which are closed on or
before December 31, 2012.

So like anything else, there's specific criteria and you can do well by making a copy of the information in the link below, read it thoroughly, highlight the important criteria to determine elegibility and start calling your Lender(s) on your lunch hour to inquire if you qualify. If things start to look rosy, you can talk to your Mortgage Broker or Banker who places FHA loans or even to your existing lender to pursue this endeavor, if they place Government loans (FHA).

So FHA is stepping to the plate - Great!, but if you don't qualify for this loan, you may still qualify for H.A.R.P. the Home Affordable Refinance Program. Your existing Lender will be the party to investigate this other alternative with.

The full story is available at:

Check for other options or log onto and click on Blogs icon .... Keep the faith!

Saturday, August 21, 2010

You Can Keep Your Good Credit During This Recession - If You Know The Score

You Can Keep Your Good Credit During This Recession - If You Know The Score

People are having to make tough financial choices today, but many don't have to wreck their credit scores if they know how the system works, according to credit expert Eddie Johansson, president of Credit Security Group.

"With the same amount of money, you can make decisions that kill your credit score or ones that keep your score - or at least give you the ability to rebuild your score quickly later," he said. "Most people have wrong or little information about how the system works, and that's a big reason scores go down when difficult decisions are made during a recession."

Johansson advises major financial institutions and consumers on the FICO credit score model used by most lenders in deciding the borrower's risk and interest rate. He described three common misconceptions that needlessly lower credit scores.

Misconception #1: Paying late didn't hurting my credit since I'm caught up now.
Johansson said recent late payments are the credit score killers he sees most often. "It's great that you caught up," he said, "but it doesn't change the fact that you paid late. Anything other than 'paid as agreed' on accounts on your credit report hurts your score."

Misconception #2: Dollar Amounts Matter in Credit Scores.
An example of bad credit score advice here is "pay the highest bill first," Johansson said. "Dollar amounts don't matter in FICO scoring; ratios and recency do. The effect on your score is the same for a $1 late payment as a $1,000 late payment. The fewer late payments on your credit report, the higher your score - regardless of their dollar amounts," he said.

Johansson emphasized the importance of paying all your bills on time, every time. However, he says that if you must pay late and want to avoid damage to your score, pay the accounts that report to credit bureaus first. You can find this information by getting a copy of your credit report.

Misconception #3: Closing Credit Card Accounts Helps Your Score.
If you cancel a card, you may have just thrown away your chance to increase your score by continuing to build on years of positive credit. "Very long term positive account history can really boost your score," Johansson said. "It's best for your score to keep cards open and active, using them for small purchases. Next best is to just keep them open so you can build your score back up quickly by using them later."

Don't Make a Bad Situation Worse.
In tough economic times, people often buy more on credit than they usually would. The amount they pay in interest on these purchases is largely determined by their credit scores. Poor decisions that lower scores combined with an already tight budget can be very costly, making money problems worse than they have to be. "What we're trying to do," Johansson said, "is help people get through these tough times with as little financial damage as possible. This is best for them, for lenders and for our economy."

Johansson emphasized that lower credit scores may be unavoidable for some, and that credit scores are not the only factor to consider. "However," he said, "good credit is an important part of financial security and must be considered when making the best long-term decisions. Having the right information is necessary to make good choices - now more than ever."

Reproduced from RisMedia - August 21, 2010 .....Keep the faith!!

Friday, August 20, 2010

Fannie, Freddie and politicians, Oh my!

Geithner Calls for Cooperation to Modify GSEs

Treasury Secretary Timothy Geithner told attendees at a housing summit on Tuesday that the U.S. government will continue to guarantee mortgages, but its role will be revised to avoid making it a primary backer if Fannie Mae and Freddie Mac face another meltdown.

Geithner urged Democrats and Republicans to work together to rebuild Fannie and Freddie to avoid another crisis. He called remaking the mortgage market one of the most important and complicated economic policy problems the U.S. faces today.

"There is nothing we can do to decrease the significant losses Fannie and Freddie incurred ahead of this crisis. All we can do is to minimize the risk that they get worse,” Geithner said.

Source: The Wall Street Journal, Nick Timiraos (08/17/2010)

Wednesday, August 18, 2010

Fed gives the last word on Mortgage Origination

Highlights of Final Rules on Loan Originator Compensation and Steering

The final rules protect mortgage borrowers from unfair, abusive, or deceptive lending practices that can arise from loan originator compensation practices. The new rules apply to all persons who originate loans, including mortgage brokers and the companies that employ them, as well as mortgage loan officers employed by depository institutions and other lenders. The final rules, which apply to closed-end loans secured by a consumer’s dwelling, will:

 Prohibit payments to the loan originator that are based on the loan’s interest rate or other terms. Compensation that is based on a fixed percentage of the loan amount is permitted.

 Prohibit a mortgage broker or loan officer from receiving payments directly from a consumer while also receiving compensation from the creditor or another person.

 Prohibit a mortgage broker or loan officer from “steering” a consumer to a lender offering less favorable terms in order to increase the broker’s or loan officer’s compensation.

 Provide a safe harbor to facilitate compliance with the anti-steering rule. The safe harbor is met if:

o The consumer is presented with loan offers for each type of
transaction in which the consumer expresses an interest (that is,
a fixed rate loan,adjustable rate loan, or a reverse mortgage); and
o The loan options presented to the consumer include the following:

(1) the lowest interest rate for which the consumer qualifies;
(2) the lowest points and origination fees, and
(3) the lowest rate for which the consumer qualifies for a loan with
no risky features, such as a prepayment penalty, negative
amortization, or a balloon payment in the first seven years.

The final rules are effective April 1, 2011, to provide lenders and originators time to develop new business models, implement necessary changes to their systems, and train personnel.

The Dodd-Frank Wall Street Reform and Consumer Protection Act also restricts practices concerning loan originator compensation. The Reform Act includes provisions that are similar to the Board’s final rules but also addresses other practices not covered by the final rules. The
Board plans to implement the Reform Act provisions in a future rulemaking with opportunity for public comment.

Keep reading .... and Keep the faith !!

Friday, August 13, 2010

Four Proposals for Reforming Fannie and Freddie

The government is wrestling with what to do about Fannie Mae and Freddie Mac, which have needed a combined $148 billion since the government bailed them out two years ago.

There are many ways to restructure the system. Here are four that have the most support:

1. Fully private system. Eliminate Fannie and Freddie and let private lenders take over. The problem is that the market for mortgage securities issued without government backing is small – perhaps, nonexistent.
2. Semi-private system. Dissolve Fannie and Freddie and turn their function over to private companies that would pay for the right to issue government-backed mortgage securities. Small banks don’t like this plan because it would inevitably increase the role of the largest banks.
3. Hybrid system. Fannie and Freddie would compete against other companies that would also issue government-backed mortgage securities.
4. Government-run system. Fannie and Freddie would become part of the government. This is unpopular because it would expand the ballooning federal debt.

Source: Associated Press, Alan Zibel (08/09/2010)

Keep the faith..........

Thursday, August 12, 2010

42,000 of California’s jobless will get help with mortgages

The U.S. Treasury Dept. announced yesterday it is providing additional funding to a California program to help homeowners struggling to make their mortgage payments due to unemployment. The program, administered through the California Housing Finance Agency (CalHFA) will assist struggling borrowers make up to six months of mortgage payments. Lenders will be asked to match the government contribution.


•The program aims to help 19,000 unemployed borrowers in California between its November launch and next July. An additional 23,000 borrowers will receive help over the next two years, according to CalHFA estimates.

•To qualify for the program, borrowers must be unemployed and eligible for unemployment benefits, and live in the home tied to the mortgage. Borrowers must be fewer than 90 days behind on mortgage payments and meet low- and moderate-income guidelines. Income requirements can be found at

•CalHFA is focusing on providing aid to unemployed borrowers struggling with purchase loans, excluding refinanced loans. According to CalHFA officials, it is too difficult to decide who “cashed out for a good reason and who didn’t.”

•More information about the CalHFA program, including eligibility, program summary, income requirements, and frequently asked questions, can be found at
To read the full story, please click or cut/paste link

State Deadline for Tax Credit Applications ending 8/15/2010

2010 Tax Credit for New Home / First-Time Buyer

Important Update(08/06/10): FTB to accept First-Time Buyer applications through 8/15/10.

"As shown in the numbers below, we have received First-Time Buyer applications totaling more than $100 million. We announced in June that we would accept at least 28,000 applications since many we had received were duplicate, revised, or invalid applications. Since that time, we have received more and more duplicate, late, and invalid applications. So that we do not risk cutting off the program too soon, we will accept First-Time Buyer applications until midnight on Sunday, August 15, 2010. This will insure that we have more than enough First-Time Buyer applications to allocate the full $100 million. These additional applications must be timely, meet all requirements, and will be subject to the availability of remaining credits. We will only issue approved certificates of allocation until the $100 million is exhausted. Applications received more than 14 days after the close of escrow will be denied. We will continue to accept New Home reservation requests and applications." (Updated 08/06/10)

"We have not processed any applications yet, but our computer system is now completed, and we are ready to begin processing both New Home and First-Time Buyer applications. We will provide weekly updates on the number of certificates that have been mailed and the amount of credits that have been allocated starting August 19." (Updated 08/06/10)

Full story - (If you are looking for more information regarding the 2009 New Home Credit, see FTB Publication 3528, New Home Credit, or search using the “Forms & Publications” available at website.)

Tuesday, August 10, 2010

"Puttin' on the Ritz" or How can I showcase my home for sale

If you want to market your property properly, you must stick to the basics. The goal is to sell it quickly for the highest price possible while investing as little as possible in renovations. You can greatly increase your home's appeal by focusing on what prospective buyers can see on their first visit.

Tip #1: Refresh the exterior
First impressions count when it comes to selling a home. Most buyers won’t even leave their car if they don’t find the exterior appealing. The best ways to improve your home’s exterior include:
-Repairing and/or replacing trims, shutters, gutters, shingles, mailboxes, window screens, walkways and the driveway.
-Painting siding, trim and shutters and lamp and mailbox posts.
-Pressure washing vinyl siding, roofs, walkways and the driveway.
-Washing windows.

Tip #2: Spruce up the lawn and landscape
Home buyers associate the condition of your lawn and landscaping with the condition of your home’s interior. By improving the outside, you affect buyers’ impression of the entire property. The best ways to enhance the yard include:
-Mowing and edging the lawn.
-Seeding, fertilizing and weeding the lawn.
-Keeping up with regular lawn maintenance by frequent watering.
-Trimming and/or removing overgrown trees, shrubs and hedges.
-Weeding and mulching plant beds.
-Planting colorful seasonal flowers in existing plant beds.
-Removing trash, especially along fences and underneath hedges.
-Sweeping and weeding the street curb along your property.

Tip #3: Create an inviting entrance
The front door to your home should invite buyers to enter. The best ways to improve your entry include:
-Painting the front door in a glossy, cheerful color that complements the exterior.
-Cleaning, polishing and/or replacing the door knocker, locks and handles.
-Repairing and/or replacing the screen door, the doorbell, porch lights and house numbers.
-Placing a new welcome mat and a group of seasonal potted plants and flowers by the entry.

Tip #4: Reduce clutter and furniture
A buyer cannot envision living in your home without seeing it. A home filled with clutter or even too much furniture distracts buyers from seeing how they can utilize the space your home offers. If you have limited storage space, you may want to consider renting a temporary storage unit to place items you wish to keep. The best ways to declutter your home include:
-Holding a garage sale to prepare for your move, getting rid of unnecessary items.
-Removing clutter such as books, magazines, toys, tools, supplies and unused items from counter tops, open shelves, storage closets, the garage and basements.
-Storing out-of-season clothing and shoes out of sight to make bedroom closets seem roomier.
-Removing any visibly damaged furniture.
-Organizing bookshelves, closets, cabinets and pantries. Buyers will inspect everything.
-Putting away your personal photographs, unless they showcase the home. Let buyers see themselves in your home.
-De-personalize rooms as much as you can.

Tip #5: Clean, clean, clean
The cleanliness of your home also influences a buyer's perception of its condition. The appearance of the kitchen and bathrooms will play a considerable role in a buyer's decision process, so pay particular attention to these areas. The best ways to improve these areas include:
-Cleaning windows, fixtures, hardware, ceiling fans, vent covers and appliances.
-Cleaning carpets, area rugs and draperies.
-Cleaning inside the refrigerator, the stove and all cabinets.
-Removing stains from carpets, floors, counters, sinks, baths, tile, walls and grout.
-Eliminating house odors, especially if you have pets.
-Considering air fresheners or potpourri.

Tip #6: Make minor repairs
The small stuff does count, especially with first-time home buyers. Without dismissing the importance of repairing major items such as a leaky roof or plumbing, you do not need to spend money on replacing these items. Instead, focus on the minor repairs that will make your home visually appealing. The best ways to improve your home include:
-Repairing ceilings and wall cracks.
-Repairing faucets, banisters, handrails, cabinets, drawers, doors, floors and tile.
-Caulking and grouting tubs, showers, sinks and tile.
-Adding fresh paint to ceilings, walls, trim, doors and cabinets.
-Tightening door handles, drawer pulls, light switches and electrical plates.
-Lubricating door hinges and locks.

Tip #7: Showcase the kitchen
The heart of any home is the kitchen. If you are going to spend any money on renovations, this is the one area where you will see the greatest return. Even with a modest budget, focusing on a few key areas can make a great difference in getting the asking price for your property. The best ways to showcase the kitchen include:
-Replacing cabinet doors and hardware.
-Installing under-cabinet lighting.
-Replacing light fixtures.
-Replacing outdated shelving with pantry and cabinet organizers to maximize space.
-Baking cookies or cupcakes for a showing, to create a homey smell.

Tip #8: Stage furniture
Furniture placement can enhance the space of your home while giving buyers an idea of how to best utilize the space with their own belongings. Take some time to rethink how different areas in your house could be used. Some ideas to think about include:
-Moving couches and chairs away from walls in your sitting and family rooms to create cozy conversational groups.
-Creating a reading corner in the master bedroom.
-Clearing an empty room to set up a reading space.
-Turning an awkward space into a home office.
-Setting the dining room table with your best china.
-Set wine glasses in front of the fireplace or next to a Jacuzzi tub.

Tip #9: Light up the house
Create a sense of openness and cheerfulness in your home through its lighting. To improve the lighting try:
-Opening shades and drapes to let the sunshine warm and brighten rooms.
-Installing brighter light bulbs in rooms that tend to be dark.
-Adding additional lamps for ambient lighting.
-Turning on all the lights for a showing.

Tip #10: Add fresh touches
You can easily add color and style to your home by adding fresh touches throughout. Some ideas to consider include:
-Placing fresh floral arrangements in the entry and master bedroom.
-Placing bowls of bright-colored fruit in the family room and the kitchen.
-Filling an empty corner with a potted leafy plant.
-Setting new hand soap in the bathrooms.
-Displaying fresh towels near sinks.

These tips were provided by Lowe's through Rismedia August 10, 2010