Angelo Cusinato |CRMS, CMC|Mortgage Specialist

Last night I was priveledged to be at the Union League Club as approximately 50 recipients of America's highest award for valor in combat, the Medal of Honor were welcomed to Chicago for the start of the 51st Annual Congressional medal of Honor Convention.

Recipients that served in WWII, Korea, an Viet Nam were in attendance. As a Viet Nam vet, it was an emotional experience. While they would not speak about the actions that resulted in their being so honored, each of their stories was included in a handout summary and available in more detail in a coffee table book (which I could not pass up).

Those that did speak either last night or in interviews in the Sunday, September 13 newspaper indicated that while they were recognized, they carry this honor for all of those who showed similar bravery, both living and dead - they all showed humilty with pride.

One notable comment when one was asked about today's hot topic - health care was that some of the older recipients of the MofH are unable to receive VA health care because they served before the health care benefit became part of today's benefits. Now isnt't this a slap in the face.

For those of you who have the opportunity, here are some of the events throughout this week.

Wednesday 9/16 - 10AM live webcast from the Pritzker Military Library (pritzkermilitarylibrary.org) 11:30 Constitution Day Ceremony at the Daley Plaza

Thursday 9/17 - 1PM pre-game ceremony honoring recipients at Wrigley Field

Saturday 9/19 - 11AM - 2PM A Day at Cantigny

Have a great day!

FIVE STARS!

Trouble making your mortgage payment? Lost your job? Payment going up? Banks keep passing you from idiot to idiot - no one seems to care? No modification is being offered?

Well, there is a solution! A new movie is coming out May 29 that answers the question "what can a homeowner do?" when they have trouble making their mortgage payments. Cordell Eddings from Bloomberg, included comments from yours truely and other mortgage industry experts in his review. This review can be viewed at

www.bloomberg.com/apps/news?pid=20601088&sid=ay6ecNhApoMU&refer=muse

For those of you that have read my blog in the past, you probably can guess that several of my comments during a half hour phone call ended up on the edit room floor (thanks Sharon Lynch). I guess after 25 years as a mortgage broker, I am finally considered an "expert witness". See the last paragraph of Cordell's review.

Have a GREAT DAY!

The Ides of March are being celebrated with the annual March Madness Half Marathon tomorrow, March 15 in Cary, IL. The race begins and ends at the Cary-Grove High School on Three Oaks Road. The route is 13.1 miles long and is organized by the Hill Striders Running Club of Crystal Lake. Last year 981 finishers!

More information ? Just google March Madness Half Marathon in Cary IL for more details.

See you there! No I am not running, I will be taking pictures and sitting in a lawn chair along the route at the Hickory Nut Grove road entrance of the Harvest Glen Subdivision by Verseman. Have a great day!

Consider this -

As has always been the case, people try to hide income from the IRS. Liar loans became the mortgage of choice for these homeowners. They claimed an income that was higher than they reported on their tax returns. Yet, somehow they were able to make the payments for years - probably from those under-reported income dollars that they hid from the IRS. Today, there is talk about forcing lenders to modify loans where the mortgage payment exceeds a Magic Ratio of their income. But what income are they looking at to make this determination?

My questions is - if LIAR felt that they had sufficient income (higher than their reported income) when the obtained the loan and were successful in making payments for a period of time, then why should we use their (under-reported) tax return income for a calculation that would reduce their mortgage payment now?

Recommendation: Borrower should be required to release tax returns from the year before and the year that their existing loan closed. if the income they claimed was __x___% higher than they reported, then assume that their current actual income is also ____x______% higher than they report. Use this higher income to determine any qualification for CRAM down of the existing loan. Otherwise, the LIARS who understated their income, will have the more honest (or less creative) taxpayers subsidising their mortgage payments.

The bottom line is any alteration of the mortgage note that reduces its value will increase the risk for future investors in mortgage backed securities. This risk will result in higher mortgage rates in the future.

Have a great day!

The operative word is "insurance". Refer to my earlier blogs for more details - Greedy Banks and Frozen Equity Lines.

In the past, having less than 20% down gave you two options. PMIor a second/equity line of credit. The majority of the home buyers choose the equity line of credit for the flexibility and lower cash flow (interest only minimum payment) needs. Now we see that the equity line alternative has some hidden traps.

In my earlier blog, I commented that banks are freezing equity lines of credit by taking advantage of some fine print that allows them to re-evaluate home values and adjust the line based on this value. In many cases, equity lines were initially paid down by using savings that was being held for emergencies, or accumulated for college, under the belief that they can always write a check from the line when needed. When the banks started freezing their loan balances, the emergency/college fund was no longer available.

Now the decision to use an equity line of credit has to be evaluated purely based upon the pay-off expectations. No longer is it a safe place to keep funds for the future. Now, it seems that the fixed payment second mortgage or PMI are your safer choices. Unfortunately, banks are backing away from offering second mortgages and refusing to subordinate this second if you have the opportunity to refinance the 80% loan in the future - see my GREEDY BANK blog posting.

Bottom line, the PMI selection may be your best choice. Many of my clients now are deciding to take PMI rather than take the second mortgage or equity line with he expectation that down the road, appreciated home values and lower interest rates will allow them to refinance the package and drop PMI.

Well we can hope. Have a great day!