Daniel Poulos

Year-after-year the largest lenders in the country push for regulations to stack the deck against hometown mortgage companies. Usually the tactics take the form of sweeping Real Estate Settlement and Procedures Act (RESPA) reforms that are disguised as consumer protection rules but apply only to mortgage brokers while loan originators for lenders remain unchecked and legally unlicensed. The latest cash cow for the Big Banks at the expense of consumers, mortgage brokers and residential property appraisers is the new Home Valuation Code of Conduct (HVCC) policy. How could something that sounds so righteous be so unjust? While it is important to ensure that home appraisals are high quality and accurate, the new policy has prompted the opposite result.

As of May 1, 2009, Fannie Mae and Freddie Mac are no longer purchasing loans from lenders using "appraisal reports completed by an appraiser selected, retained, or compensated in any manner by any third party." Lenders may only accept appraisal reports from a pre-approved list of appraisers or unregulated Appraisal Management Companies (AMC's). In one fell swoop this regulation has put countless independent real estate appraisers out of business. Instead of appraisals being supplied by professionally licensed appraisers operating in local markets values are now determined by unlicensed and inexperienced paper pushers on behalf of AMC's. The AMC's keep up to 40% of the appraisal fee, and guess who gets to have ownership in the Appraisal Management Companies? The Big Banks themselves!

On May 1^st CNBC reported "that it puts good solid appraisers out of business, complicates the loan process for mortgage brokers, and inevitably hurts consumers." The Wall Street Journal on June 9^th proclaimed that "Appraisals are becoming one of the biggest obstacles for Americans trying to sell their homes, refinance their mortgages or tap into home-equity credit lines."

Here are some typical scenarios being reported that have resulted in higher costs, less choices, and difficulty in borrowing:

• If a borrower applies for a mortgage and pays for an appraisal from an AMC they will not only pay considerably more for the appraisal but it is only valid if you get your loan from that lender. If the borrower finds better terms with another lender they are required to purchase another appraisal. Prior to this regulation the mortgage broker would order the appraisal from a local professional and all lenders would utilize that appraisal and retain the right to review the findings.
• Because the property inspectors for the AMC's are receiving only a percentage of the appraisal fee they are reluctant to spend extra time or effort resolving any underwriting inquiries regarding the property value. Compounding the problem is that the substandard appraisals being conducted by the AMC's generate excessive underwriting conditions that are atypical with accurate value determinations conducted by licensed local appraisers. This has unreasonably drawn out the loan process and in many cases borrowers have been denied financing due to inaccurate appraisals.
• Prior to the implementation of the HVCC mortgage brokers would typically speak to an appraiser to prior to a borrower paying for an appraisal to ascertain whether the value might be too low to support a mortgage. Now, it's cash up front then roll the dice.

Ironically, the HVCC arose out of a lawsuit involving one of the nation's largest mortgage lenders accused of conspiring to inflate real estate appraisals. Over-regulation has once again taken the place of enforcement, leaving consumers and small businesses to pick up the tab. Somehow Big Banks have convinced Government that the fox is the best minder of the chicken coop.

There's been much debate about who is being helped by the never ending stream of bailouts. A main point of contention is that the programs for refinancing or modifying mortgage loans seems to only help those who have neglected to pay their mortgage as agreed. Granted, there are people in that situation who have a legitimate plea for help but what about the "responsible" individuals who have done all they can and kept their payments current?

While there are a number of options that provide relief for borrowers who have been unable to stay current with their mortgage obligations there is also a new government assistance program for those with good payment histories. The Home Affordable Refinance introduced last month is designed to offer an opportunity to refinance at today's low rates even if the mortgage balance is more than the current value of the home.

Many homeowner's have found themselves in a position where they put 20% down on their home purchase but due to declining values find themselves without equity in their property. Until the introduction of the Home Affordable Refinance there were no mortgage products available to allow these borrowers to take advantage of the lowest mortgage rates in recent history.

Here are some of the requirements for eligibility:

• The home must be your primary residence
• Your loan must be owned by Fannie Mae or Freddie Mac
• You must have made your last 12 mortgage payments on time
• Your loan balance less than or close to the current value
• You qualify for the new payment

To find out if your loan is owned our securitized by Fannie Mae or Freddie Mac go to www.MyEliteLending.com/HelpMe .

The financing options available for today's home owners are in constant flux. Whether you are in a distressed situation or just want to be sure you are taking advantage of any special opportunities it's best to seek the counsel of a mortgage professional. Many lenders have modification and short sale programs that go above and beyond those sponsored by the government so be sure to speak with someone up to date on recent developments.

For Florida residents, consultations and pre-approvals are conducted for free by Elite Lending. Please call 561-575-5626 to speak to a mortgage specialist and find additional details at www.EliteLending.biz

If you bought your first home in 2008 you are bound by the benefits of last year's tax code. The maximum credit for 2008 was $7,500 and involves a payback period. The American Recovery and Reinvestment Act of 2009 makes the first-time home buyer tax credit bigger and better! To cash in on this credit you must purchase your first home before December 1^st, 2009

A first-time home buyer is considered to be someone who has not owned a principal residence for the prior 3 years. Married couples must earn less than $150,000 to earn the maximum credit while the corresponding income limit for individual buyers is $75,000. The limits apply to something called your "modified adjusted gross income" so it's important to speak to a professional to determine eligibility.

The two significant improvements over the 2008 program are that the maximum credit has been raised to $8000 and it does not have to be paid back as long as the house remains the buyer's principal residence for 3 years. Last year's tax credit was really more of an interest-free loan while the 2009 credit is truly free money! Remember, this is not a tax deduction; it's an absolute "money-in-the-bank" credit.

Early critics of the program suggested that most eligible buyers probably do not pay $8,000 in yearly taxes so the credit wouldn't benefit them. The beauty of this incentive is that if the buyers owe or paid less than $8,000 in income taxes the IRS will send them a check for the difference! For a simple video explanation of the program please visit www.MyEliteLending.com/taxcredit2009 .

The stars are really alligned for anyone who has been thinking of buying their first home. First, some areas have experienced price drops as high as 80%. Next, interest rates are at the lowest rates in modern history. Add to that the cold cash incentives provided by the government, and the opportunity is absolutely irresistable! Just a few years ago Palm Beach County was faced with a seriuos lack of affordable housing and young families had the feeling that they had "missed the boat" and would never get their foot in the door of home ownership.

Now they get another chance to experience the proverbial American Dream!

The only roadblock might be the tightening of lending standards. It makes no sense to spin your wheels looking for property until you have been pre-approved for your financing by a mortgage professional. Consultations and pre-approvals are conducted for free by Elite Lending in Jupiter, FL. Please call 561-575-5626 to speak to a mortgage specialist and find additional details at www.EliteLending.biz.

In some markets more than 1 out of 10 homeowners are dealing with a pending foreclosure. The most common initial reaction is to avoid the lender and bury one's head like an ostrich hoping to avoid danger. It is impossible to hide from mortgage obligations without dire consequences but a proactive strategy can produce positive results.

The first step is to stare the problem right in the face. You've got to deal honestly with the questions at hand. For instance:

• Could you afford to stay if the payment was lower?
• Are you expecting that you can catch up on arrears?
• Do have the money to move if evicted or sold as a short sale?
• What would be the effect of a deficiency judgment on your financial condition, both present and future?

Next is to determine the goals of your strategy. Where do want to be when this is over?

• Do you want to stay in the house if the payment can be made affordable?
• Do you owe much more than the house is worth and just want a way out with some damage control?
• Do you need to stay in the house for as long as possible without being able to make any mortgage payments?

Your options will be dictated by how you have addressed the above questions and defined your immediate goals. The most common options include a refinance or modification of the mortgage, a sale of the property, negotiating a deed in lieu of foreclosure or just stalling what may be an inevitable foreclosure. Most important to remember is that in most states a foreclosure is a legal procedure. Richard Weinstein, an attorney in Jupiter, Fl specializes in foreclosure defenses and explains that, "there is much too much at stake for the average individual to try to properly address all the issues of the foreclosure process. The homeowner has rights they must demand and possibly assets they need to protect. Unrepresented borrowers very often find themselves unnecessarily homeless and still hopelessly in debt."

I couldn't agree more! I have seen too many regretful real life experiences with disastrous results that could have been averted if the homeowner in distress had gotten proper advice before it became too late. The sooner the dangers are acknowledged the more options that remain available, both practical and legal.

Some have advised that the first person to talk to is your lender. Here I disagree. Doesn't it make more sense to first speak with someone who is already prepared for your lender's response and knows what information should be shared? If you find yourself in the position that you cannot meet your mortgage obligations I encourage you to speak to a mortgage professional that is well versed in all possible remedies. Free consultations are available for Florida residents by Elite Lending, 561-575-5626 or visit www.EliteLending.biz More info also available at www.RealEstateRoadkillUSA.com

Where it began.....

Despite having spent the last 22 years in the mortgage business I have never seen a time where such a high percentage of transactions where "negative equity" sales, either short sales or purchases of bank owned real estate. The most successful real estate agents are clearly those who have become experts at short sale negotiating or have contracted with experienced, professional negotiators. Granted, the process is time consuming and sometimes frustrating, but some estimations suggest that these types of transactions represent over half the real estate market in many parts of the country.

I started attending classes on short sale negotiating and inevitably teamed up with an extraordinary negotiator and began providing our service to real estate agents, usually at no cost to them. When properly presented, the lender would agree to pay for our very valuable services. Of course it was a natural that our mortgage business grew as real estate agents were drawn to our ability to get their short sales closed.

Anyone that's been involved with short sales knows of the absolute biggest frustration: you work hard (very hard), for months and finally get an offer accepted by the bank only to find your buyer, for whatever reason, is no longer interested in proceeding. The buyer may have had a number of different offers in on other properties that came together first, or they may have lost their financing in the time that passed. In many instances the due diligence clock doesn't start until the offer is accepted by the lender and the buyer can then choose to walk with no consequences.

The most challenging obstacle in today's marketplace might be time. On the selling side it takes the form of the time spent negotiating with the lender and keeping the buyers engaged, all the while trying to keep the property from getting to the courthouse steps. From the buyer's side of the market, there is a teeming interest in purchasing these deeply discounted properties but without waiting for 4-6 months to see if an offer will be accepted while other opportunities come and go.

So, here we are. Everyone's time an effort has been spent and nobody is getting paid!

How can the distressed sellers, disappointed Realtors® and overworked negotiators find new buyers before the lenders acceptance of the offer expires, normally in 30-45 days?

That's when I had my "Aha!" moment. Let's take these "accepted offers" and present them, not only as the best deals in the market, but ready to close immediately. The lender doesn't care who the buyer is as long as the bottom line remains the same so we just need to provide new buyers.

RealEstateRoadkillUSA.com was born! Real estate agents and buyers are flocking to it like bees to honey (or vultures to carrion). These are the absolute hottest deals in town and all the work has already been done to prepare them for closing. Wouldn't you have to be crazy to buy any property without looking here first?

After appearing on ABC-TV News and being written about in www.LoanOfficerMagazine.com we have had an outpouring of interest from real estate professionals throughout the country that want to put the program into effect in their area. I'm not surprised because honestly, in 22 years, this is the biggest "no brainer" I have ever seen for both mortgage brokers and real estate agents. It has absolutely saved my mortgage business and is providing instant transactions for real estate agents (and mortgages for us).

For information on how you can secure your Road Kill Territory and become the "gatekeeper" for the hottest deals in your market please visit RealEstateRoadkillUSA.com and click on "Join Our Network". Many territories are still available and there is a very limited charter membership offer for those ready to seize the opportunity.