National Economic Update - March 23, 2009

The Commerce Department reported that housing starts unexpectedly jumped 22.2% in February to a seasonally adjusted annual rate of 583,000 units. This ended the longest streak of declines in 18 years. Economists had anticipated a 3.4% decline to 450,000 units. Leading the surge was an 82% increase in the building of multifamily homes — condominiums, apartments and townhouses — to 226,000 units in February from 124,000 in January. Housing starts for single-family homes rose 1.1% to 357,000 units. Building permits for single-family homes climbed 11% in February to 373,000, compared to 336,000 in January.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications for the week ending March 13 increased 21.2% to 876.9 from the previous week. Purchase volume rose 1.5% to 257.1, while refinancing applications jumped 29.6% to 4,497.6.
The Federal Reserve reported that industrial activity at the nation’s factories, mines and utilities fell by 1.4% in February. Economists had expected a decline of 1.2%. The factory-operating rate was down to 67.4% of capacity in February, the lowest level on records dating back to 1948. On a positive note, motor vehicle and parts production rose 10.2% after four consecutive months of declines.
The National Association of Home Builders/Wells Fargo housing market index in March stood at nine, the same level it was in February. The index hit a record low of eight in January. An index reading higher than 50 indicates positive sentiment about the housing market. The index has been below 50 since May 2006, and below 20 since April 2008.
On Tuesday, March 17, the Labor Department reported the producer price index, which tracks wholesale prices, rose 0.1% in February. Economists had expected a 0.8% increase.
The Labor Department reported Wednesday that consumer inflation rose 0.4% in February, the biggest one-month jump since a 0.7% rise in July 2008. The increase was largely due to an 8.3% rise in gasoline prices.
The Conference Board reported Thursday that its index of leading economic indicators fell 0.4% in February. That was slightly better than the 0.6% decline economists had expected. The index is designed to forecast economic activity in the next three to six months.

Washington State now has a Draft for requirements to do a loan modification... I have cut & Pasted it below.

This again re-iterates the caution that is needed for those that are offering loan modifications. I have heard of a handful of Realtors offering loan modifications and are hired from an attorney as "subject matter experts" where they split the $4500 fee. The Attorney firm says that it's all OK and they are taken care of on the compliance side.... Chatting with a few attorney friends over the weekend on this topic they they laughed and asked "the Realtors DO have retainer fee then right...chuckle chuckle?" Kind of scarey huh?

So be careful if you are in a situation when negotiating an existing contractual agreement with the servicing agents, banks and lenders.

Even though I am licensed to do a loan modification I feel we should leave it up to the attorneys that specialize in this arena, licensed in the field of contract negotiating and hired to represent the homeowner. Although the DFI says I can do a loan modification I would be worried that the question could arise on "do you give legal advice for a contract and if so are you a lawyer?" So even DFI says yes... theres stll risk.

After numerous clients not being able to come up with the money for the attorney I have found that a large number of people just need some basic help in maneuvering through the confusing arena of modifying a loan, doing a short sale, and ultimately not loosing their home.

After months of challenges and working pro bono for my clients I have put together a complete counseling session process and if they qualify we do a financial analysis, FDIC benchmark proposal, value section and a step by step instruction manual on how to maximize the best potential loan mod available. We use an attorney firm to complete the QWR and then proceed with the submission package for them including a family portrait on the cover of the submission package that puts a face to a packet instead of a number. They leave with all the answers about foreclosures, modifications, short sales etc. We also are adding as many other reports, hints or other tools that can help them get there life back on track. If you or someone you know is interested in this process please feel free to drop me an email.

Bill Black

DRAFT DRAFT DRAFT
MBPA IS-2009-01 1
State of Washington
DEPARTMENT OF FINANCIAL INSTITUTIONS
DIVISION OF CONSUMER SERVICES
INTERPRETIVE STATEMENT
MORTGAGE BROKER PRACTICES ACT (MBPA IS-2009-01)
CONSUMER LOAN ACT
(CLA IS-2009-01) DATE: March 10, 2009
FROM: Deborah Bortner, Director, Division of Consumer Services
RE: Loan Modification Services – License Required under the MBPA or CLA

QUESTION PRESENTED: Must loan modification service providers be licensed to offer services to Washington residents?

BRIEF ANSWER: Yes, under the Mortgage Broker Practices Act (MBPA), chapter 19.146 RCW, or Consumer Loan Act (CLA), chapter 31.04 RCW.

DISCUSSION: The Division has received many inquiries regarding the applicability of the MBPA or CLA to loan modification services. According to callers, individuals are communicating directly with borrowers and lenders in order to negotiate loan modifications. In most of the calls, the caller inquires as to what restrictions are applicable to loan modification services.

For purposes of this Interpretive Statement, “loan modification” means a change in one or more of the loan terms. Loan modifications includes forbearances, repayment plans, modifications of interest rates, loan term (length), loan type, capitalization of arrearages, and principal reduction.

The MBPA defines a mortgage broker as any person who for compensation or gain, or in the expectation of compensation or gain (a) assists a person in obtaining or applying to obtain a residential mortgage loan or (b) holds himself or herself out as being able to assist a person in obtaining or applying to obtain a residential mortgage loan. See RCW 19.146.010.

A loan originator is a natural person who (a) takes a residential mortgage loan application for a mortgage broker, or (b) offers or negotiates terms of a mortgage loan, for direct or indirect compensation or gain, or in the expectation of direct or indirect compensation or gain. "Loan originator" also includes a person who holds themselves out to the public as able to perform any of these activities. See RCW 19.146.010.

DRAFT DRAFT DRAFT
MBPA IS-2009-01 2

It is the Director’s position that individuals and companies offering or negotiating residential mortgage loan terms are acting as mortgage brokers or loan originators and must licensed under with the MBPA or CLA.
Additionally, unless sponsored by a licensed mortgage broker, or a person exempt from licensing as a mortgage broker, a loan originator’s license is considered inactive. A loan originator with an inactive license may not hold himself or herself out as being able to conduct the activities of a licensed loan originator.

In addition to any applicable licensing requirements under either the MBPA or CLA, all individuals who offer or negotiate loan terms for borrowers are required to comply with the following:

a. Disclosures – [to be determined]

b. Fees – upfront fees are prohibited pending further interpretation

c. Prohibited Practices – the following is prohibited: directly or indirectly employing any scheme, device, or

artifice to defraud or mislead borrowers or lenders or to defraud any person; engaging in any unfair or deceptive practice toward any person; obtaining property by fraud or misrepresentation; soliciting or entering into a contract with a borrower that provides in substance that the mortgage broker or loan originator may earn a fee or commission through “best efforts” to obtain a loan modification even though no loan modification is actually obtained for the borrower.

If the mortgage broker or loan originator has an offer of a loan modification on terms and conditions agreed to by the borrower and the borrower fails to finalize the loan modification through no fault of the mortgage broker or loan originator, the mortgage broker or loan originator may charge a fee, not to exceed three hundred dollars, for services rendered, preparation of documents, or transfer of documents in the borrower’s file that were prepared or paid for by the borrower if the fee is not otherwise prohibited by the federal “Truth in Lending Act”, 15 U.S.C. section 1601, and Regulation Z, 12 CFR 226, as amended.
The Director’s position on this matter shall not be construed to include employees of nonprofit
HUD-approved housing counseling agencies, as long as such individuals are acting in the course of their employment by the nonprofit counseling agency.
Noncompliance may result in the imposition of any of the sanctions allowable under the MBPA including, but not limited to: fines, restitution to the borrower, refusal to renew a license, refusal to grant a license, and license revocation.

CONCLUSION: Loan modification services fall under the jurisdiction of the Mortgage Broker Practices Act and Consumer Loan Act. A mortgage broker or loan originator license, or a license under the Consumer Loan Act is required to conduct loan modifications for Washington residents.
Prepared by: Cindy Fazio, Staff Attorney

STATUTES AND RULES RELIED UPON: Chapter 19.146 RCW

FANNIE MAY HOMEPATH PROGRAM OFFERS GREAT HOME BUYING OPPORTUNITY

This one could come and go... I finally have a product that I am happy to announce to the world and happy to say it can make the american dream come true!

It almost sounds too good to be true but it is the real deal... 3% down, no mortgage insurance, no appraisal, 6% seller concession, and you don't have to move to the country to get this offer!

FannieMae really wants to get rid of the homes they have had to take back. This offers a fine opportunity to score a low priced home and get a great loan in the process. The loan side of the deal is called the HomePath program and offers buyers some great rates and incentives to take the plunge including a free warranty wiith the home as well.

HomePath is simply a loan program that makes it more affordable for home buyers to purchase some FannieMae held properties. Not all Fannie Mae products qualify though and you can only use a Homepath qualified lender in which we are more then honored to offer this loan.

The features of the program are:

• Low down payment and flexible mortgage terms (fixed-rate, adjustable-rate, or interest-only)
  
• You may qualify even if your credit is less than perfect
  
• Available to both owner occupiers and investors
• Investors with as little as 10% down and no MI!
• Down payment (at least 3 percent) can be funded by your own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer
  
• No mortgage insurance*
  
• No appraisal fees

As you can see, there are a lot of benefits, especially the waving of mortgage insurance that can add thousands a year to your payment along with 6% seller concessions and NO APPRAISAL to kill the deal.

So what's the catch here. There are not too many; FannieMae is very motivated to sell a bunch of homes. Here's what I've found... not all FannieMay homes are eligible but we are fortunate to have some BEAUTIES here in Vancouver, Wa. I was amazed to see a 3 bedroom for under $85,000 that a person could buy for as little as $2600 down and 600-700 month! They also allow for some repairs and will be coming up with a renovation loan for these soon as well.

For more info, to search the FannieMae Inventory check out their website... here. If you need an authorized HomePath lender in Washington or Oregon we would be happy to assist in making your dreams come true. If you need a great real estate team to represent you in the purchase, keep you safe and well informed you should contact Shannon Wheeler at Sundin Realty.

Shannon Wheeler

REO Specialist

360-574-4616

Vancouver

reosales@comcast.net

Bill Black CMP
bill@aofdowntown.com
360.326.8891 direct
360.910.3290 cell
America One Finance

Have a great weekend,

Bill Black

I ran into this post in another blog. I think we will see more and more shady companies getting shut down as a result of making false promises and collecting money to only put people into foreclosure.

March 5, 2009

United First

Filed under: Foreclosure, Real Estate

<!-- end POST META -->My husband and I purchased a house in 1999, last year he was hurt and could not work, we tried to pay the mortgage but without his income could not keep up, We decided to let the mortgage company take the house, Its been about a year now since we have made any payment, they still have not foreclosed and today I received a letter from a law office saying that we could be awarded the original amount of the loan from the original lender (the mortgage has been sold several times over the years)for our “paid in full but unsatisfied loan”; the letter asks us to sign and a return a document allowing them to “research the title, appraise us of any PIF but unsatisfied mortgages, confirm with us that the mortgages identified are PIF, send a statutorily complaint notice to the lender or lenders demanding that any PIF mortgages be satisfied, and if the lenders fail to cooperate, prosecute them,” the law office will front all the monies for this and they will keep one third of the profit if successful. This mortgage is NOT paid in full, so whats the story?

Do you know why they would send this and what it means?

Thanks for you’re help!

Sue

———-

Hi Sue,

I’m not familiar with the company that sent you that letter. It sounds similar to something that a company called United First was (is?) offering. Here’s the update on the attorney that United First was working with from a March 2009 California Bar article titled: “State Bar discipline unit scores three wins on the same day”:

In a third key development last month, bar prosecutors obtained a Superior Court order that effectively shut down three southern California offices of Sherman Oaks attorney Mitchell Roth. Hospitalized due to severe depression since January, Roth recently expanded his law practice — which had included credit, debt and collections, general civil litigation, personal injury, medical malpractice, wills and trusts, and probate — to foreclosure cases. Roth’s estimated 2,300 foreclosure clients were referred to his law offices by a company doing business as United First, which is not a law firm.

“Given the belief that many of Roth’s cases are open and active foreclosure defense litigation cases wherein the clients are subject to losing their homes and facing eviction, a delay in making orders for assumption of Roth’s law practice will result in substantial injury to clients or others,” the State Bar wrote. Roth’s phone message referred foreclosure clients back to United First.

The order was obtained under the Business and Professions Code, which permits the Superior Court to assume jurisdiction over a law practice where the attorney has become incapable of providing the quality of service necessary to protect clients or if there is an unfinished client matter for which no other lawyer agrees to accept responsibility.

Through his attorney, Paul J. Virgo, Roth consented to the Superior Court’s assumption of jurisdiction over his law practice.

Thanks for the questions and hope this helps.

Paul

I wanted to share a great local band... great to listen to some of their music as we see the economic world crumble... it kind of gives some peace:)

http://www.myspace.com/intervision

Chat on Monday!

Bill Black