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 Bill Black CMP Loannetwork LLC, Vancouver 1001 Main Street Suite A Vancouver, WA 98660 bill@billcblack.com 360-326-8891 www.aofdowntown.com
Remember, your referrals are the lifeblood of my business. Thank you for remembering me. Hope you enjoy this newsletter.
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Bill Blacks Mortgage Minute
November 3, 2009
Well, we finally had a positive quarter of economic growth which was a bit stronger than expectations. We should be celebrating. Only, it is hard to celebrate with the backdrop of these numbers: 7.2 million jobs lost and 6.3 million foreclosures during this severe recession. No one thinks that the job losses and foreclosures will end because of one positive quarter. So the logical question is, where do we go from here? In this respect, this week’s employment numbers are even more important than last week’s snapshot of the economy which is a preliminary estimate of a quarter already behind us. Because employment is a "lagging" indicator, we are not looking for employment growth. However, the markets will be looking for improvement with regard to the number of jobs lost. There is no doubt that the markets are contemplating the same question. We must ask whether the market contraction last week was a classic "sell on the news" scenario or recognition that we have seen our best quarter for the foreseeable future. The fact that Congress appears to be ready to extend the homebuyer tax credit is really good news in this regard. On the other hand, we know that one day these temporary fixes will be gone and the economy will have to stand on its own two feet. The markets have done a pretty good job predicting this positive quarter. Let us hope the struggle of the past few weeks does not represent a prediction of a one-shot deal because we need several positive quarters to declare the recession behind us.
Current Indices For Adjustable Rate Mortgages
Home buyers are scaling back, according to a quarterly survey by the American Institute of Architects, choosing energy-saving amenities over recreational ones. Two-thirds of architects say their clients want better insulation, including double- and triple-glazed windows, water-saving devices, and solar panels. The most popular bonus room is a home office, with 46 percent of architects saying these rooms are gaining in popularity. The architects identified a sharp decline in the demand for high-end kitchens and baths and said that there was also less interest in game and media rooms and in-law suites. The AIA said residential billings, a leading indicator of activity, rose to 38 in the second quarter, up 20 points from the first quarter of 2009. Source: Reuters News The American dream of homeownership is still a good bet, financial advisors say firmly. Despite the downturn in the last couple of years, homes have still appreciated an average of 4 percent a year since World War II. Plus, it’s a leveraged investment; a 10 percent down payment yields a 1,000 percent return if the price of the home doubles. There are also valuable intangibles. Owning a home provides independence, security, community, and a roof over the owner’s head. No one can say that about investing in stock. Source: Associated Press |
What Can You Expect From Bank of America/Countrywide Home Loans ?
So I was looking for a funny logo to add to today’s post and I ran into a very interesting website-www.bankofamericasucks.com I am not going to say what I used for a google search but lets just say the search pretty much covered the 4 words in the website. No need for a funny picture when that website pretty much clears up the facts.
So the question of the day has become “I have Bank of America Mortgage- what are the chances of a loan mod?” Everyone knows that Bank of America bought noxious Countrywide a couple of years ago and now Bank of America is one of the largest banking institutions in our nation.
What you can expect from Bank of America / Countrywide
Bloomberg.com reported that Bank of America was 1 of the worst performer’s amongst the biggest U.S. banks in modifying loans for struggling home-owners. As of August 5, 2009 they had only modified 4% of eligible loans; http://www.bloomberg.com/apps/news?pid=20601208&sid=aaiRx.lyFD4I
Don’t expect much if any assistance from them. They have improved their mortgage modification eligibility review process, but they lack on execution.
They took $45billion in TARP funds (the government asset relief funds that is designated for banks to use to assist home-owners to remain home-owners without the bank taking large losses) but it doesn’t appear that they have used these funds to build an efficient modification department.
They have signed up under the Home Affordable Mortgage Program to provide relief to those home-owners that are struggling and have a Fannie Mae or Freddie Mac mortgage. But in fact, they are substituting the rules (see the Home Affordable Mortgage Program page) by adding that they will not reduce the mortgage payment if it ends up being less than 50% of the original mortgage payment. This is absolutely not a rule under the Home Affordable Mortgage program. This program states that if the home-owner qualifies, the mortgage payment would be reduced to 31% of their monthly gross income (including property taxes, home-owner insurance, association dues if applicable and repayment of escrow advances). It does not limit the reduction of the mortgage payment to any more than 50%. Unfortunately, if you receive this response, what really can you do about it?
Modification request instructions can be found at: http://www.bankofamerica.com/loansandhomes/financial-difficulty/ The instructions look very inviting, but don’t be fooled. In fact, if you consider the fact that Bank of America recently testified to our Senate that they are confused about which borrower qualifies for a modification and that the paperwork may be the problem as they are confused about what to review and obtain, well then that should be enough for you to understand what you can expect from them. Especially, when they thus far have only modified 4% of eligible borrowers.
We give Bank of America a poor rating and strongly urge you to seek professional representation in order to ensure that your rights are protected and to afford you the very best chance to obtain a mortgage modification or a default solution.
I have entrusted my referral sources to NW Loan Modification Center in Vancouver, Wa. which is a local attorney firm with expertise in default solutions- Loan Modification, Short Sale Negotiation, Short Refinance Negotiation, as well as all aspect of Bankruptcy. They can be reached at 360-89-NWLMC.
I just reviewed a short sale approval and wanted to note a few things from Saxon Mortgage aka Hillbridge Capital Group for those wading through the quick sand in Short Sales:
New Contact Number for Saxson: 866-241-1901
Purchase Price $210,000
$174,300 Net 83%
$8,000 to 2nd Lien holder (Note- NEVER increase this amount by allowing Realtor commissions or having seller come in with more money or be prepared to go back to the negotiation table at the 11th hour)
Q: How much they will penalize Real Estate Agents if a short sale acceptance letter needs to be extended?
A: The new guidelines state that if a loan does not close on time they will deduct 1% penalty from Real Estate Fees- never has it been more important to close on time.
I have heard of the opportunity to negotiate this to a 2 week allowance for a per diem but make sure you get it in writing!!! Also if I was listing agent I would request the buyers agent to be responsible for the 1% fee if late close.
Q: How they are the new "FHA" when it comes to how much they will accept as a net in their pocket?
A: 83% which is close to what FHA accepts
Q: How much they will allow a 2nd mortgage?
A. Offered 10% of principal ($80,000 Second Lien)
Bill Black CMP
Branch Manager- Vancouver Branch
Loan Network LLC
Mortgage Banker
Homepath Homes- No Appraisals, No MI, 90% NOO!
360.326.8891 Office
360.910.3290 Mobile
360.326.1861 Fax
My core business is based upon trust and honesty with it’s clients; we feel that this is the most important component of any business relationship. We constantly measure our business processes to ensure that our clients receive the highest level of service possible.
Wa #520-CL-49546
I have had 3 new pre-approvals from the weekend- All three of the clients were looking forward to the $8,000 tax credit, so today I will blog about the current status of the tax credit statue as well as some highlights around this.
The $8,000 tax credit cannot be used as down payment-
Out of these 3 buyers one was already pre-approved via an online lender at Quicken Home Loans but after our 20 minute phone consultation he was not told that his tax credit was not available as a down payment! I only hope the application taker “forgot” to ask where the down payment was coming from but this should have been apparent when his assets in the bank equaled less then 1% of his overall purchase price- so no 3.5% which is a red flag proving that we have no seasoned down.
So just to be clear- THE $8,000 TAX CREDIT IS NOT AVAILABLE FOR ANY PORTION OF THE 3.5% FHA REQUIRED DOWN PAYMENT.
What if I buy a duplex?
You can only get 10% of purchase price or $8,000 max. So a $70,000 house you would only earn $7,000 in credit. With a duplex you own half as an owner occupied and the other half as an investment so depending on the price makes all the difference- so a $160,000 duplex- half would be $80,000 and 10% of that is $8,000 so you get maximum credit. A duplex under $160,000 would only get 10% of half of the price.
Now to fully disclose I am not a CPA and certain things could affect this answer but if you ever have questions I refer all my accounting questions to the smartest CPA in the County- John Caughell CPA at 360-573-9800 or johnc@golden-cpas.com he is truly the best.
Timeline to qualify-
So as we go down one of the biggest unknowns to first time homebuyers we ask will the $8,000 be extended another six to 12 months? Could it be possible to have it increased? We have 14 weeks left for the $8,000 tax benefit with the buyers required to be fully closed by Nov. 30th.th and not just under contract. I have a feeling that short sale offers will see less activity as a result of this timeline and the fact that SO many of us have been burned by playing the hurry up & wait game while the servicing agents and banks fumble the ball and make up new rules as they go. That means funded and wired by Nov. 30
What is Happening Today-
The two biggest housing trade groups- the 1.2 million-member National Association of Realtors and the National Association of Home Builders- are spending the month mounting unusually intense grass-roots lobbying campaigns to make case for extending the credit, and maybe even expanding it. The effort is targeted first at the districts of members of the house of the two tax writing committees- House Ways and Means and Senate Finance- this is very strategic and could have been beneficial if we had that support for the HVCC issues we are now dealing with instead of a 1 page document that basically stated to suspend the HVCC until further review.
Economic “Ripple Effect”
According to Economists at National Association of Realtors 300,000-350,000 additional houses will be sold as a result of the tax credit. Each home is forecasted to contribute $63,000 in downstream “ripple effect” elsewhere in the economy, they say- sales of furnishings, appliances, lawnmowers, landscaping, renovation materials, plus moving expenses.
For those who know me understand that I always say “you always have to know where the information came from” so on this bullet point I realize the number seems high but having $8,000 of free money and buying a home at the bottom of the market seems to really make people feel better about spending. Accurate or not I feel it is a benefit that may be one of the only Obama plans that I have witnessed that worked without a flaw.
Path Forward
Bills are already pending in both houses to extend the credit for another year. Some have fantasized about the bill that Chris Dodd, D-Conn., and Chairman of the Senate Banking Committee is co-sponsoring with Georgia Republican Johnny Isakson that would raise the tax credit to $15,000! Meanwhile, both the Realtors and builders are pushing not only for extension but for the credit to cover ALL home purchases in 2010. I forecast some sort of an extension but I would caution spreading false hope and if we can capture the money for clients today that is soon-certain and positive they receive the $8,000 credit.
The MARKET
Pretty Good Day in the Market
Treasuries and mortgages rallied today; see-saw back and forth after the hammering treasuries and mortgages took on last Friday on the jump in existing home sales in July and the strong rally in equities. Today the stock market opened better following the 156 point jump in the DJIA Friday, but by mid-afternoon the equity markets rolled over and ended unchanged on the day.
Tomorrow Treasury will auction $49B of 2 yr notes, beginning three days of new issuances raising a total of $109B. Markets appear to be thinking demand for the new issuances will be strong as they have been for the past two months. Demand for US Treasury debt remains firm from indirect bidders (mainly foreign central banks). The 2 yr note usually does see good demand as it fits well with banks’ assets and liabilities. Banks are hoarding cash these days while telling the media there is little loan demand. Banks have the straight faced ability to paint the picture anyway they like. There is scant loan demand because banks will only lend to those borrowers that can get along without it.
We are currently 24 hours in UW
12 hours in Docs
12 hours in funding….. So let’s go have some fund!
Bill Black CMP
Branch Manager- Vancouver Branch
Loan Network LLC
Mortgage Banker
Homepath Homes- No Appraisals, No MI, 90% NOO!
360.326.8891 Office
360.910.3290 Mobile
360.326.1861 Fax
My core business is based upon trust and honesty with it’s clients; we feel that this is the most important component of any business relationship. We constantly measure our business processes to ensure that our clients receive the highest level of service possible.
Wa #520-CL-49546
Hello and GOOD Friday to you,
The good news is we have some ROCKIN turn times- the bad news is rates are starting to sneak up on us as anticipated. I have never seen so much volatility. Rates under 6% are still good but it’s hard for me when I just had rates at 5.25 less then a week ago. The market will swing back and forth but now but I think what REALLY needs to be identified is the new TILA regulations and HVCC appraisal issues that will be killing deals as well as slowing down turn times and charging buyers for multiple appraisals if they are dealing with web based brokers or lenders that do not have bank lines.
I have said this before and I will say it again- a realtor and a lender HAVE to be a team in this challenging market. My phone rings 2-3 times a day to try to “help” a fallout due to a poor appraisal or a poor underwriting decision. Most of these items should have been identified in the very beginning of the transaction and could have had a solution. A majority of these are when the buyer is using web based company such as Quicken Loans or Dietech. They have no idea of the issues and if a client was to only google the lender they would find numerous “ripoff.com” findings about these.
So before I get on my soap box- let’s not forget it’s FIRST FRIDAY and the downtown Vancouver area is booming this evening. There is something from 1220 Main Street restaurant all the way down to 1st and main at the West Coast Bank that is open house for appetizers and wine. The galleries are full of energy and some very interesting art and to end the evening at the glass shop watching them make hand blown glass objects is a perfect way for an affordable, entertaining Friday night! My 12 year old daughter even has fun with me on this walk about!
Current Turn Times as follows:
Underwriting: 12 Hours
Conditions: 12 Hours
Docs: 24 Hours
Funding Review: 48 Hours
*UW Turn Times start when file submission is complete.
*Doc Turn Times start when file has cleared doc prep and is ready to draw.
Our Current Rates for 8/7/2009 are as follows:
15 year fixed – 25 day lock – 4.875%
30 year fixed – 25 day lock – 5.75% at
*Based on o/o, r/t refi w/80% ltv
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Unfortunately Friday's bond market has opened down sharply following the release of stronger than expected employment numbers. The stock markets are reacting favorably to the data with the Dow up 136 points and the Nasdaq up 32 points. The bond market is currently down 28/32, which should push this morning's mortgage rates higher by approximately .375 - .500 of a discount point compared to yesterday's morning rates. (Already in the pricing above) |
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The Labor Department reported this morning that only 247,000 jobs were lost last month and that the U.S. unemployment rate fell to 9.4%. It is always interesting to see the “revised” numbers 6 months later that are more accurate but hey- good news is good news. Both of these readings were stronger than expected. Analysts had forecasted a job loss of 328,000 and an increase on the unemployment rate of 0.1% to bring it to 9.6%. In addition, average hourly earnings also exceeded forecasts with a 0.2% increase.
Today's news was definitely negative for bonds and mortgage rates. It indicates that the employment sector is not as bad as many had thought. While it was still softening last month, it was at a much slower pace than expected. That helps support the theory that the recession may be nearing an end. In fact, some analysts are already stating they think it has ended. This is bad for bonds because economic growth often creates an environment with inflation concerns that make bonds less attractive to investors. The result usually ends up being higher mortgage rates as investors shift funds into a growing stock market.
Next week is another busy one for the markets and mortgage rates. There are several very important economic releases scheduled to be posted in addition to another FOMC meeting that can heavily influence bond trading and mortgage rates. None of them is due out Monday, but there is relevant data or events scheduled for every other day of the week. Look for more details on next week's events in Sunday's weekly preview.
If I were considering financing/refinancing a home, I would....
Lock if my closing were taking place within 7 days...
Lock if my closing were taking place between 8 and 20 days...
Lock if my closing were taking place between 21 and 60 days...
Lock if my closing were taking place over 60 days from now...
This is only my opinion of what I would do if I was financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
Be sure to say hi if you are downtown Vancouver this evening.
Bill Black CMP
Branch Manager- Vancouver Branch
Loan Network LLC
Mortgage Banker
360.326.8891 Office
360.910.3290 Mobile
360.326.1861 Fax
My core business is based upon trust and honesty with it’s clients; we feel that this is the most important component of any business relationship. We constantly measure our business processes to ensure that our clients receive the highest level of service possible.
Wa #520-CL-49546
As a Certified Mortgage Planner, I see my role differently than a traditional loan officer. My goal is to help you integrate the loan into your over-all long and short-term financial goals.
A Mortgage Banker with options- Fast, Professional and Accurate
We specialize in FHA, Conventional, VA, Fannie Mae Preferred lender for Homepath, investment property, and assist in "deal structuring" to make win/win transactions for both parties. We take great pride in establishing a reputation as the company that takes exceptional care of its customers and referral partners.
All lenders advertise the lowest rates, fees and best service but what sets us apart is the knowledgeable licensed and certified staff that takes the time to educate our clients and give them the choices that best fits their needs.
We are focused on constantly achieving excellence by staying in tune with the economic indicators, newest lending options, latest technologies and most innovative means of structuring a loan which some can call "creative" financing including our 102% financing options as well as 97% with NO MORTGAGE INSURANCE OR APPRAISAL REQUIRED!
At Loan Network LLC- Downtown we have our direct banking lines as well as relationships with many lenders so we can offer hundreds of programs! Our FHA program have been very popular in our current market as well as specialty loans such as the 203K renovation loan or the standard Fannie Mae Renovation loans on the Homepath properties found at www.homepath.com
We offer a variety of programs to service virtually any borrower. That's why we are happy to say, "Loan Network LLC- Downtown is clearly the choice for anyone needing lending assistance today!
As a Certified Mortgage Planner, I see my role differently than a traditional loan officer. My goal is to help you integrate the loan that you select into your over-all long and short-term financial and investment plan to help minimize taxes, improve cash flow and minimize interest expense. We strive to really understand what is important to you about a loan.
I guarantee my Good Faith Estimate be within $200 after initial application and an on time closing guarantee as well.
Those who understand interest- earn it....Those who don't - Pay it. Let me help you be the one to earn it.
We may not do it all but what we do we ar ethe best at: First time home buyers, Renovation, 102% financing, FHA, VA, and investment property.
All of Oregon, Washington, Idaho, Colorado and many other states.
Local appointments in house upon request in Portland, Vancouver, Kelso, Longview, Kalama, Clark County, Cowlitz County, Battle Ground, Woodland
"I highly recommend any new LO looking for a career and guidance to look up Bill. I am a virtual office in Idaho and work from home so I have hardly any contact with other LO's that are employed with America One Finance. Bill went out of his way to become like a mentor to me through e-mail. He has taught me so many things and he is so positive and honest. He does not have to do this since he makes no profit from any of my loans. But he chooses to take time out of his busy day and give me advice and any documents that may help me. All he ever asks for is that I pay it forward. Bill has outstanding character and in this market who better to learn from than someone you can trust and who has survived the many market twist and turns and is still on top."
Sylvia Champion
Senior Loan Officer
America One Finance
sylvia@iwillfinanceyou.info
www.iwillfinanceyou.info
fax:
mobile:
888-210-4597
208-447-6653
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Now The Big Question 
Senators agreed last week to extend a popular tax credit for first-time homebuyers and to offer a reduced credit to some repeat buyers. The tax credit provides up to $8,000 to first-time homebuyers but is set to expire at the end of November. Senators agreed to extend the existing tax credit for first-time homebuyers while offering a reduced credit of up to $6,500 to repeat buyers who have owned their current homes for at least five years, said Regan Lachapelle, a spokeswoman for Senate Majority Leader Harry Reid, D-Nev. The tax credits would be available to homebuyers who sign sales agreements by the end of April. They would have until the end of June to close on their new homes, said a congressional aide, who spoke on condition of anonymity because he was not authorized to publicly discuss the deal. Senators were still negotiating the expansion of a separate tax credit that lets money-losing businesses get refunds for taxes paid in previous years, providing them with an immediate source of cash. Source: Associated Press
