Alexander B. Pastewski, JD

Vermont Mortgages - Scandal at the FDIC!!!!!!

Take a look at this video post from ThinkBigWorkSmall & tell me it doesn't get you unbelievably mad!!!!

http://www.thinkbigworksmall.com/mypage/player/tbws/23088/1020959

I spend my days doing Vermont Mortgages & blogging on Vermont Mortgages & had thought the market semi-insulated, but apparently, anyone with Vermont Mortgages held by One West Bank (formerly IndyMac Bank) may not be able to get their Vermont Mortgages to be modified by the HAMP program here in VT. Why? Click on the link above to find out the aweful truth: that IndyMac's debt (not just Vermont Mortgages) was all sold to One West in a restructuring by the FDIC (who funded the purchase of this debt for One West), insures it at 80-95% of the orignal loan amount, then allows the bank to recoup the difference. Mathematically challenged? Then follow the example of an ACTUAL deal (posted on the above link):

Borrowers wanted to go into Loan Modification, with a $478,000.00 Mortgage (no, at least it's not a Vermont Mortgage). 6 Months of missed payments brought the loan balance up to $485,200.00. One West Bank had paid 70% of that (which is what the FDIC said they could buy ALL of IndyMac's debt for) = $334,600.00 paid for that loan, which the FDIC lent for them. The borrowers were denied by One West for the loan modification, so got a short sale offer for $241,000.00, sold it, & signed a promissory note to One West Bank for $75,000.00. So the bank gets $241,000.00 and a $75,000.00 note from the sellers.

The sinister part: from the FDIC's calculation of recouping the loss, they take the ORIGINAL LOAN AMOUNT ON THE NOTE (not the purchasing note) minus the short sale, to detemine the net loss to One West, so $485,200-$241,000=$244,200.00 NET LOSS, of which they give them a check for that of 80%, or $195,360.00.

See the problem here? One West ends up getting $241,000.00 from the short sale, $195,360 from the FDIC, & then $75,000.00 from the note from the seller. TOTAL: $436,360.00 BEFORE THE $75,000.00 Note is repaid!!!! They bought it for $334,600!!!! Net profit = $101,760, before the note is repaid!!!! All with the FDIC's money, & the FDIC just asked the Treasury (our tax dollars) for more money. See why there haven't been many loan modifications done????

Please click on the link above, & forward it to your representatives, and to all news media outlets that can do a story on Vermont Mortgages, if you are as outraged as I am. This is national & not just limited to Vermont Mortgages. If you are affected by an IndyMac/One West loan modification or know of one, please let me know, regardless of if it's Vermont Mortgages or not.

And thanks again for tuning into my Blog on Vermont Mortgages.

Vermont Mortgages

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Vermont Mortgages - A SHORT SALES MUST READ for ALL!!!!

Today I came across an article on the internet that truly would scare me if I were involved in short sales, regardless of whether it is for Vermont Mortgages. All sellers and brokers involved in negotiating short sales REALLY need to read this article. (This article is only applicable only to Vermont Mortgages if you are short selling your home. If you have one or more Vermont Mortgages and you get involved in selling one on your short sale, this applies!)

http://finance.yahoo.com/news/Mortgage-lenders-pursue-cnnm-3107909798.html?x=0

To paraphrase, it basically states that there are a number of lenders going after people who sell their homes by short sale after the closing. As a REALTOR, be aware of making sure you ask the bank you are negotiating a short sale with to release the seller from their obligation, and make sure to get it in writing. Not just for realtors negotiating Short Sales in Vermont dealing with Vermont Mortgages, this is applicable to all realtors nationwide! How horrible would it be to have someone you negotiated a short sale with come after you a year later saying, "You never asked for a release for me from the bank holding my Vermont Mortgages, and now they have obtained a judgment to garnish my wages from me until I repay the deficient loan amount!" Realtors, one of your worst nightmare? I'M SURE!!!!! Imagine how bad for business this would be!

I can't stress to you all how important this is if you negotiate short sales for Vermont Mortgages. Even though Vermont Mortgages may not be as strictly held as in one of the other states (please see an attorney about this, I don't hold to know all facts about lending laws), you would be wise to make sure to this little loophole is closed before you negotiate a short sale on those Vermont Mortgages on behalf of your sellers, or you may find that you have some people very upset at you for not noticing this little technicality on those Vermont Mortgages.

Once again, Vemont Mortgages are affected by this, so make sure you do not make this critical mistake if you are involved in a short sale on any Vermont Mortgages.

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Vermont Mortgages - A lifeline for people needing help from FHA

So now, some good news from FHA! Some people with Vermont Mortgages may be happy to hear that if they have gotten their Vermont Mortgages from FHA, and they are in trouble of defaulting, they will now be able to modify their loan directly through the HAMP Program (Home Affordable Modification Program, offered by FHA).

Of course, this news is limited only to those people who are currently IN an FHA Mortgage (others with Vermont Mortgages, sorry the rules are not drawn wider to include you all), but it does definitely go furthur than the previous steps taken by the FHA to shore up the amount of defaulting borrowers. More information can be found at http://money.cnn.com/2010/01/22/real_estate/easier_FHA_help/index.htm, a good article on CNN posted regarding this update. It does seem to go more in line with the majority of people's common sense approach, that actually going into default is NOT the time to allow the modification. If you are struggling on making payments to your FHA loan, and you have a good reason why you will be maintaining a lesser level of income for the forseeable future, then FHA will now allow you to modify your loan into a more affordable payment. But I think this still does not go far enough, honestly. I think it shuld be easier for people undergoing hardship to modify.

Once again, not all Vermont Mortgages are affected by this announcement. The only Vermont Mortgages that are affected are those Vermont Mortgages that are held by FHA.

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Vermont Mortgages - Investment Property Refinances

A lot of investors with Vermont Mortgages on their investment properties have been asking me if they can refinance their Investment Property Vermont Mortgages to take advantage of these historically low interest rates before they disappear. The answer: a solid MAYBE. Don't you just love lending nowadays? ;)

There is a wonderful way to refinance those Investment Property Vermont Mortgages right now if the mortgage is owned by Fannie Mae or Freddie Mac, & you can otherwise qualify for a mortgage. Yes, this means that you have to have the income & documentation to support it, people! I know a lot of investors used to purchase these properties in the No Doc fashion, but No Doc is gone, dead, kaput, vanished, dead like the dinosaurs, extinct, & don't even try it or ask about it!

But if you have Investment Property Vermont Mortgages on one or more existing properties, you CAN use your income from the rental properties to support your job income, & as long as you have enough assets in the bank, then you CAN refinance them into the 5.5%-6% range, whether it is a free standing SFR, a 2-4 unit property, or even a condo. Remember, the guidelines to investor density & the other guidelines on condominiums are still in effect on these Vermont Mortgages, but you CAN refinance them. Also, if you are an investor, & you have multiple properties all owned by Fannie or Freddie, you can refinance each of those Vermont Mortgages once to lower your interest rate, even though you can only get 1 refinance of your Vermont Mortgages done per property.

I hope this clears up a common misconception about refinancing Vermont Mortgages on Investment Properties. If you are an investor and haven't refinanced yet, and have a few Investment Properties with Vermont Mortgages all in the 6.5%+ range, then take advantage of this possibility before rates go up! I currently have 6 lenders offering to do these types of Vermont Mortgages in the 5.5%-6% range, but these rates won't hold forever! Let me know if you need any help.

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Vermont Mortgages - Short Sales hijinks

I wake up coming in to work every day as a mortgage lender writing Vermont Mortgages believing that one day soon I will come in and not be baffled by some of the stories I hear. I guess that's not today.

The shocking news of the day? SHORT SALES! No, it doesn't have much to do with Vermont Mortgages, but in a news webisode posted today by the guys over at Think Big Work Small (http://www.thinkbigworksmall.com/mypage/player/tbws/22129/1020959), they reported that some banks with 2nd mortgages on properties going to auction would actually demand money from realtors OUTSIDE of the HUD settlement (ie cash under the table) for payoffs on 2nd mortgages or they wouldn't allow a short sale to happen. WOW! Can you believe it? This is wholly illegal, immoral, and another good example of the unscrupulous practices of a few bad apples spoiling the entire goodwill of the industry.

Now I have nothng to worry about, since I write some of the highest quality Vermont Mortgages available. None of my Vermont Mortgages would ever turn up anything but the best service, goodwill from my clients, and wholly performing loans in the market for Vermont Mortgages. But the sad part of this is that when bad lenders do things like this, it makes the entitre industry suffer higher scrutiny, ie extra work, whether it's for Vermont Mortgages or for any mortgages anywhere. I mean, I'm all for increasing transparency and regular monitoring, but the supposed "innovations" coming out nowadays just increase the workload with minimum effect for the goal they are seeking. They just increased the good faith estimate to 3 pages, and the Paperwork Reduction Act made a half a page disclosure into 4 pages. If they are going to increase the amount of work done per transaction, what do you think this will mean for borrowers getting a Vermont Mortgage? That's right, HIGHER COSTS. (Quick plug: not on MY Vermont Mortgages, you still get the same great pricing on my Vermont Mortgages, as I take care of my clients ;)

Another thing: a blog entry on that webpage also references that this person was involved in a transaction recently that was a short sale where the house appraised at $400,000.00. It had a $300K 1st Mtg. on it and a $100K 2nd Mtg. on it, the sales price was at $264K. The 2nd Lender offered to only take $4K on it, and the 1st Lender STILL did not approve it, and it went to auction and only sold for $212K. REALLY? Why not help out the borrower, accept the discharge of debt, make more money and help the purchaser as well? This is exactly the kind of things happening that make the entire lending industry suffer right now. Actions like this by lenders only make writing Vermont Mortgages harder for everybody involved, as Vermont Mortgages are guided by federal guidelines, and so the restrictive actions instituted by the fed will be across the board, and binding on all people writing not only Vermont Mortgages, but any mortgages, and so once again, the actions of a small few affect everyone.

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