Ann Sabbagh, Sr. Loan Officer

This site is growing in popularity here in the North East. I am curious what everyone thinks of this site and their experiences in closing transactions with the properties listed on the site,

Also, what other auction websites are you using?

All comments, as always, very much appreciated!

Short refinances should be the norm. They keep the homeowner in their home AND they reduce losses for the lender AND they improve the economy since home ownership stimulates economic growth.

A short refinance keeps the homeowner in their home, thus reducing the supply of homes on the market . Short sales result in the homeowner losing their home; the loss of the American dream and creates economic disaster for everyone.

A short refinance entails the current lender or lenders forgiving debt based upon the current market value of the home. The homeowner then refinances the remaining debt into a new mortgage. For example, a home is currently appraised at $200,000. The homeowner owes $275,000. 95% of the current value is $190,000. The difference between $190,000 and $275,000 is $85,000. The current lender(s) forgive the $85,000, enabling the homeowner to refinance the remaining $190,000 into a new mortgage.

As you can see, a short sale does the SAME action as a short refinance: a forgiveness of debt, BUT with a short sale, a stranger buys the home and the homeowner loses their home AND the supply of homes increases. Lenders suffer larger losses, as well, with a short sale since they are typically sold for less than 95% of current value. A short refinance keeps the homeowner in their home.

Now, we could take this one step further and SAVE the lenders their losses by doing the following along with a short refinance. We could place a silent 2^nd mortgage on the home after the refinance to allow the former lender(s) to salvage their loss upon any sale of the property in the future. In this way, it is a win-win-win for both the homeowner, the lender and the economy.

So, I as I have been asking myself for years now, who came up with the SHORT SALE transaction idea and ignored the OBVIOUS benefits of the SHORT REFINANCE transaction? Homeowners have been told to be late on their mortgages to obtain loan modifications, which have failed miserably. The homeowner then becomes so far behind, even if they hear of a short refinance, it then is too late. Short refinances are not discussed in the media and the lenders do not speak about short refinances. WHY? Short refinances are available and the BEST option for everyone's sake.

Is it too late for short refinances to now be the norm? NO! It is never too late, but no one is listening. I have gone to our senator and approached other politicians. They all love the idea, but no one has made it their platform.

I will keep promoting this until someone does listen AND enacts this better solution to KEEP HOMEOWNERS IN THEIR HOMES AND START TO BRING THIS ECONOMY BACK!

A bend in the road is not the end of the road, unless you fail to make the turn.: Author unknown

Yes! The real estate market has a lot of bends for us to go through, but the road continues with those of us who do not quit!

Let's keep turning down the road and help every seller and buyer we can!

Baseball season has begun and the talk has begun as well about the drinking at stadiums across the country. Not only is the discussion on excessive drinking, but it is also focused on the types of drinks being sold dependent upon where you sit.

At Fenway, the bleacher seats are $28. Here they sell beer. In the better seats, like the box seats, top shelf liquor is offered, like Absolute vodka, along with beer and other beverages.

The "bleacher people" feel they should be offered the top shelf drinks as well. They feel they are being "discriminated" against and one is assuming they cannot afford the top shelf liquor since they are in the bleacher seats.

Is it a case of discrimination or simply wishing to make the higher priced ticket buyers feel they are receiving a "bang for their buck" by allowing for perks like top shelf liquor?

And more importantly, the conversation should be focused on the amount of liquor being overly consumed by the attendees at the sporting events. Personnel are being criticized for not "shutting guests off when they have had one too many". Stadium personnel are not acting like licensed bartenders and watching the purchaser closely prior to allowing the purchase of an alcoholic beverage.

So, I suggest having "drink coupons" attached to each ticket to the sporting event. Perhaps 3 drink coupons per individual. Yes, this will lead to some abusing the system and selling their drink coupons within the stadium. BUT, I think it will help with the excessive drinking problem. And some help is better than doing nothing. And, yes, the owners of the stadiums will be reluctant to curb the drinking, since, after all, they are making $$$. But at what cost? Drinking and driving do NOT mix and we all should do what we can to avoid a potentially tragic result of the excessive drinking.

What are your thoughts?

This new mortgage will affect every American looking to mortgage a home. And the impact will be felt by all of us.

Regulators are deciding the future of down payments. For those who have minimal down payments, FHA will become the norm.

The new mortgage: QRM: Qualified Residential Mortgage has yet to be defined in detail, but, basically, it will be the new mortgage which will require a defined minimum down payment. Some proponents are advocating as high as 30%. If a borrower does not have this minimal down, there will be limited non-QRMs available at higher rates.

Thus, there will be an increase of mortgages at FHA, which currently offers mortgages at 3.5% down and reasonable rates. The downfall of FHA is the 1% upfront mortgage insurance, which is financed into the loan and the monthly mortgage insurance which is paid every month for 5 years and until the LTV reaches 78% (for loans greater than 15 years) and paid monthly on loans 15 years or less when the LTV reaches 78% regardless of how long the payments have been made.

FHA may be gearing up for this by increasing their mortgage insurance rates by .25% effective with all new loans on April 18, 2011. Even the 15 year FHA loans, which were exempt from monthly mortgage insurance with LTV's less than 90%, will have monthly insurance.

So, let's compare FHA payments based on a $200,000 loan at 4.75 for 30 years:

Prior to October 2010: P&I and mortgage insurance: $1146.31

After October 2010: P&I and mortgage insurance: $1205.23: Increase of $58.92/month

After April 2011: P&I and mortgage insurance: $1247.31: Increase of $42.08/month

In less than a year, the increase due to mortgage insurance is: $101.00/month!

Proponents of QRM wish to see the originating company to maintain 5% of every loan on their books for the duration of the loan. To have so-called "skin in the game", proponents believe the originating company will "care more" about underwriting the loan and will think twice before closing on a loan. The opponents see this as a large negative for the consumer. A non-QRM will have higher rates, thus greasing the lining of lenders and hurting the consumer and the housing market. If an originating firm must keep 5% of the loan and it is a non-QRM, the lender will wish to have a higher return for the higher risk.

The 5% retention requirement will also negatively impact the smaller lenders who will not be able to stay in business with limited capital. How many loans can a small lender hold for the duration of the loan? Thus, an already high unemployment rate will grow worse with the closure of all the small lenders.

In 2009, 47% of homebuyers placed less than 10% down on homes. Imagine what this new QRM will do to the housing market!

Mortgage insurance companies are against the QRM, since they are in business to insure homes with down payments of less than 20%. If the regulators enact a 20% or more down payment requirement for a QRM, non-FHA mortgage insurance companies will no longer be required.

April 21 is the deadline to define a QRM, but that date will probably be moved to a later date since this is a big decision for the mortgage industry.

The mortgage crisis is causing many changes. Some are for the better, but this one needs to be reviewed and analyzed CLOSELY by regulators BEFORE they implement, since it may further negatively affect the real estate industry.

Stay tuned!