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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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November 17, 2009
All logic would have to say that the markets would pause after such a big run and Dow 10,000 seemed to be the ideal spot. Indeed, the markets have seesawed above and beyond the 10,000 mark, with a contraction of approximately 5.0% from top to bottom. But then an interesting thing happened. As soon as all the big economic numbers were released and digested, the markets hit the second week in November with all guns blazing. Now one strong week does not mean the rally is going to continue, but it is interesting that the markets would start moving positively so quickly after the weak employment numbers were released. Obviously, the markets are satisfied with a tepid recovery. And why should the markets not be happy with a weaker recovery? There is a lot to like about the economy not gaining strength too quickly. For one, oil prices should remain subdued. Higher oil prices can make the recovery weaker. Also, rates should stay low. Low rates can support an economic recovery that is more sustainable. Finally, with the concern about government spending, inflation will be a threat. A slower recovery has the potential to hold off that threat indefinitely. Of course, the markets could have just been reacting to the good news that the tax credit for homeownership was extended and expanded. With low rates and housing prices, real estate is quite a bargain and a government subsidy will serve to boost demand as we go through the typically slow winter home-buying season. If demand runs high during the winter, the spring market could be very strong.
Current Indices For Adjustable Rate Mortgages
Buyers of new homes can expect much healthier and more energy-efficient properties than they get if they buy an older home. Tom Molidor, president of Molidor Custom Builders in Clarendon Hills, Ill., recommends installing a high-efficiency furnace close to the part of the house the family uses the most, instead of putting it in the basement. A 3,000-square-foot home that is top-rated for energy efficiency can be heated in the greater Chicago area for less than $50 a month, estimates R.A. Faganel Builders. Other commonly included energy-friendly features include double- or triple-paned low-E windows that not only keep out cold air but also make homes quieter. Source: Chicago Tribune One in 20 Americans say they plan to buy a home within the next year, and they’re most likely to be 34 years old or younger and living in the South or West, according to a survey released last week. Roughly a quarter of potential buyers said the No. 1 reason they would buy now is because prices appear to have bottomed out. That reason topped bargain-priced foreclosures, worries about rising interest rates and a wide selection of homes. The survey, conducted for Move.com, a real estate listings site, reveals how Americans are responding to a nascent and fragile housing recovery after three years of price declines. The percentage of buyers thinking of jumping into the market was down slightly from a March survey, but up about 1 point from a poll in June. Home prices rebounded this summer at an annualized pace of almost 7 percent, according to the Standard & Poor’s/Case-Shiller home price index. Source: Associated Press
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November 9, 2009
Some financing programs for real estate-owned assets are connecting first-time homebuyers with a particular property and a chance to buy a home where perhaps they couldn't afford one otherwise., especially in markets like California and parts of the Northeast where prices are more expensive.
For Fannie Mae-owned REO, for instance, financing for these properties, which tend to be in the lower price range at around $150,000, is offered through HomePath. The program is unique because no appraisal is required, LTV is at 97% and private mortgage insurance is not mandatory. We can also go up to 90% on a Non-Owner Occupied.
"We try to make it easier and faster to finance a Fannie Mae-owned REO," said Jane Severn, director of new business initiatives at Fannie Mae, on the REO Financing Options panel at the Five Star Default Servicing Conference & Expo.
"These assets provide a unique opportunity for first-time homebuyers to purchase a home and pick up a value often. It's a good time for those people who are taking advantage of the buyer tax credit as it exists now," she said.
Prospective properties are listed on the site at HomePath.com. Every property has a logo by it that will say either HomePath Mortgage or HomePath Renovation Mortgage, which allows for minor repairs to the property. For a HomePath Mortgage, there is a minimum of 3% down for a primary residence, and 10% down for investment property. We at Loannetwrok LLC has made this type of loan our specialty.
About 60% of properties are eligible for both the mortgage and the renovation mortgage. Another 30% are eligible for a renovation mortgage only. "That leaves you with about 10% of our properties not eligible for any financing," said Ms. Severn.
She says Fannie Mae is having trouble finding lenders that do construction lending now and who have the skill set to oversee renovation projects in local markets.
In many cases, REO agents are able to negotiate the buyer's closing costs to be paid for based of our experience.
Combine that with the $8,000 tax credit and it's a fantastic tool to enable quite a few first-time homebuyers who are able to come up with the downpayment.
I can't think of any servicers or outsourcers we deal with that don't offer closing-cost assistance.
Most everyone is aware of the government financing that is currently available to borrowers, including FHA and VA.
Jeff Gideon, vice president of REO at Residential Credit Solutions, says it's very difficult to take the standard REO property and make it go through FHA without any hiccups.
"We do try to identify those items that will be a lender-required repair and we'll try to fix those things upfront so we can have an easier time once we get the property under contract and into closing. We don't want to get halfway through and have the appraiser come back and have things come up," Mr. Gideon said.
"We try to know our markets and eliminate some of that timeframe."
When an REO hits the market, his company may have as many as 10 offers on the second day.
"REOs are hot. It's becoming so competitive from the buyer's side. If you put two properties side by side, one's an REO and one's an owner-occupied for sale, that REO is going to command. It will be sold first."
When an offer comes in, Mr. Gideon said it is important to have a good, strong prequalification. There is typically a 30% fallout rate. Often, 60 days down the road the loan falls out based on something that could have been identified on day one. During that time the carrying costs on a lot of these properties is excessive.
We have a 100% success rate at the Vancouver Branch says Bill Black- Branch Manager. We take pride in that success as all homepath loans go through our unique process of "underwriting" a loan at the application process and identifying solid borrowers.
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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
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