Advantage Lending Corp is looking to fill 8 new seats in down town Rochester Michigan. If you or any one you may know is looking to make a move and wants to work some where that offers great commission splits, friendly environment, and has a desire to learn how to take their game to the next level, please contact Daniel Litvin.
Daniel Litvin 248-608-9120 x230
415 S. Main Suite B
Rochester MI 48307
I recently had a purchase transaction where I ordered the appraisal from JP Morgan Chase's approved appraiser list. After receiving the appraisal and turning it into the lender, Chase ordered a second appraisal and kindly let me know that i get to pay for that one too! You can only imagine my excitement, gosh that's $300 bucks less in my pocket....YIPPIE!
Chase and other lenders are no longer standing behind their approved appraisers. They are questioning the appraisal, ordering reviews, asking for additional comps, even if you use their "approved" appraisers they list in their website.
5/3 Bank & Chase are now looking to have all loan officers wholesale and retail order appraisals blindly through their preferred appraisal vendor company. Supposedly doing this will make the fear of a stretched or not so accurate appraisal disappear and the loans fly through underwriting. Basically this removes the loan officer from ordering the appraisal from any one they may know and having any type of influence on the outcome of the value.
Now I can understand the banks desire to ensure an uninfluenced appraisal value, but come on! The loan I wrote about above was a purchase of a condo for $175,000. The appraisal came in at $180,000, the SEV was $149,000 (do the math, that means $298,000 value from the city), and was ordered from a Chase approved appraiser!!! Oh yea did I mention the borrower has a credit score over 800, a LTVof 80% and a debit ratio of 38% total back end ratio!!!
I suppose I'm just angrily ranting since I just lost an extra $300, but this appraisal review process should be reserved for loans and properties more deserving.
Dan Litvin www.AdvantageLendingCorp.com
The pathways to foreclosure are varied and numerous, especially in today's tougher economy. Increasing mortgage payments or mounting credit card debt, a sudden loss in income or employment, a serious illness, or a divorce or separation are all unexpected changes that can quickly lead to delinquency and even foreclosure.And whether or not you personally are having trouble with your mortgage, it doesn't matter, because foreclosures affect everyone. After all, a single foreclosure in your neighborhood will often lower the value of every home - including yours - even if you've never missed a single payment.
The good news is that there is hope for you or anyone you know who might be on one of these unfortunate paths. This month Advantage Lending Corp will take a closer look at how foreclosure can now be avoided thanks to loan modifications and new legislation that won't result in the traumatic loss of your home.
Lenders Really Don't Want to Foreclose
It's important to understand that lenders are not in the business of owning real estate, and would much rather help a struggling homeowner than to take possession of their home.
The numbers speak for themselves.
The average loss incurred by a mortgage company on a foreclosure is approximately 40%. In comparison, the average loss on a modification of the mortgage is approximately 20%.
With this in mind, let's say a $200,000 mortgage is facing foreclosure. A mortgage lender can expect a loss in the area of $80,000. Compare this to just the $40,000 loss it can expect by working something out with the homeowner. Multiply these numbers by hundreds or even thousands of delinquent loans, and it becomes clear why working with homeowners is in a mortgage lender's best interest - especially in today's challenging market where foreclosures are reaching record levels in some areas.
RealtyTrac®, a company that tracks foreclosure statistics, recently reported that bank-owned inventory hit the three-quarter million mark in July. Bank repossessions have increased 184% since last year at this time as default and auction notices continue to climb.
In the second quarter of this year, 1 in every 171 households nationally reportedly received a foreclosure filing. While the majority of the fallout is limited to states like Nevada, California, and Florida, states from the Midwest and Sun Belt have not been exempt. In fact, add in foreclosures from states like Michigan, Ohio, and Arizona, and the number of homes in foreclosure increases to as many as 1 in every 43 homes.
With staggering numbers like these, it's easy to understand why mortgage lenders are so willing to work with homeowners right now to save their homes through loan modifications.
Why Should a Homeowner Try to Modify?
Just because someone missed his or her last three mortgage payments, triggering the foreclosure process, doesn't mean that it is necessarily time to start packing up and moving out. As we mentioned earlier, the reasons borrowers may miss a few payments are valid and often understandable. More importantly, not all of the unfortunate scenarios that lead to missed payments are permanent or irreversible. People can and do get back on track very quickly - and lenders know this and, now more than ever, are willing to help these homeowners avoid foreclosure.
According to Hope Now, a non-profit company helping distressed homeowners, mortgage servicing companies have successfully negotiated 522,000 workouts in the second quarter of 2008. In the month of June alone, approximately 76,000 of 105,000 homeowners received loan modifications. With so much on the line, homeowners in financial distress need to be proactive and make every attempt to help themselves.
Remember, with a foreclosure on your record, under most circumstances you will not be able to buy another home with a conforming mortgage for five years. Not to mention the lost opportunities of being a homeowner, which include increased wealth through home price appreciation and decreased income tax liability from deducting mortgage interest and property taxes.
If you or someone you know is facing financial challenges and can't pay the mortgage right now, don't just bury your head in the sand. The first thing you need to do is reach out to your mortgage company right away.
What Should You Do?
For a homeowner to be considered for a loan modification, the lender will want to know exactly where you stand financially and what you can afford.
The first thing to do is to find the courage to pick up the phone and call someone for help. Picking up the phone may not be easy, but if you want to avoid the financial ramifications of a foreclosure, you have to do it.
There are three calls you should make right away. The first call could be to the existing servicing company for the mortgage. The second option could be to a non-profit company like Hope Now. The third would be to contact a company that negotiates loan modifications. Either way, for direction on the best path to take, contacting an experienced mortgage professional is also a good idea.
Once you have made contact, let the company know that you would like to stay in the home. Assure them that you are committed to honoring your mortgage, but that you are in need of a little assistance right now to get back on your feet.
To enter into a modification agreement, the company will need to know, in writing, exactly what caused your sudden financial distress - so be prepared to tell your story in writing. This is also known as a "hardship letter," which will clearly explain the circumstances behind your missed payments and justify why you're in a good position to continue to make your modified payments in the future.
Be advised, investors or property flippers who were simply caught in a falling real estate market are not usually considered hardship cases. These homeowners may not find the same willingness to help that lenders will offer someone whose home in question is his or her primary residence. That means your chances are much better if you live in the home that you're trying to save.
Next, you will need to provide detailed financial information to help prove your case, so be prepared once you make that call to provide this information. Documents may include pay stubs, income tax returns, W-2s, liquid assets (bank and brokerage accounts), and current expenses (food, utilities, insurance, and other common expenses).
With this information, a lender may be willing to offer assistance in the form of a mortgage modification. This could include a reduction of your interest rate, a reduction of your principal, or even an extension of your existing mortgage. A combination of these options could also be in the mix, depending on your situation. Remember, the goal of a loan modification is to keep the homeowner in the home, so be open and up front and willing to help this process along in any way that you can.
Another Option for Struggling Homeowners
New legislation was put in place recently that could also assist homeowners whose mortgage balance is higher than the current value of the home - also known as being "upside down" or "under water." The bill is called the Homeowner Recovery Act of 2008, and it goes into effect October 1, 2008.
This law has provisions that will allow qualified homeowners to refinance their mortgage, with the mortgage company's approval, at 90% of the newly appraised value. There is one catch, though. To take advantage, the homeowner will have to share in future appreciation with the government. While some may be reluctant to do so, this could be an outstanding option for many homeowners who want to avoid foreclosure and keep their homes.
Details of exactly how this will be accomplished by the government, however, are still a little unclear at this time. But if you're under water with your mortgage, don't wait. You don't have to lose your home. There are many options available to struggling homeowners, but you have to be proactive before it's too late.
Daniel Litvin www.AdvantageLendingCorp.com
Your client found the perfect house, they've spoken with your lender, they've even given you a pre qualification letter, but are they really approved?
Contacting a lender and getting pre qualified for a mortgage usually consists of not much more than a five minute conversation and a review of the borrowers credit report by the loan officer. What does this mean to you as a Realtor? It means your clients application for a mortgage has not been reviewed by an underwriter, checked against the lenders guidelines, or verified any of their income, assets, or employment that they verbally disclosed during their time of application with the lender.
Getting pre approved by a lender involves providing the lender or loan officer with a combination of some of the following documents that pertain to the borrowers specific loan scenario: signed loan application and disclosures, pay stubs, tax returns, W2's, bank statements, drivers license, divorce decree, child support verification, etc. Basically until the underwriter can verify the information the borrower is attempting to state in their application, THEY ARE NOT APPROVED.
Getting from a pre qualification to a pre approval is very quickly and easily achievable. Simply having the borrower stay in touch with their loan officer and providing them with the documentation they are requesting to process the loan application is all it takes. Then they can perform their job of continuing to get the borrower the mortgage you need to buy a home.
So before you start playing taxi driver and showing your clients homes for sale, make sure you have an understanding of whether they have a real approval or just a pre qualification.
Daniel Litvin
President of Advantage Lending Corp
Expert advice, personal service and the right program with the best rate is what you get when you contact Dan Litvin at Advantage Lending Corp.
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