Lewis Poretz - - Maryland Mortgage Expert -

Honestly - what is my home worth??

............ Often getting a home appraisal these days becomes a very humbling experience. We all have heard the saying "my home is my castle". Many times emotional values far exceed true market value when determining how much your house would sell for.

Foreclosures and short sales have pushed market values down. Way down... When determining the value of your house, an appraiser uses comparbles, otherwise known as comps. The house that sold for half the value of your house last month at foreclosure.... well that just pushed the value of your house down. No - it is not fair and given time you may be able to get more for your house than any appraiser can value you it at, but for lending purposes, it is what it is.....

Mortgage lenders have been battling the value issue daily. The new HVCC guidelines have been killing otherwise slam dunk deals. When refinancing a home, understand what you may be walking into. Know the facts upfront. For more details give us a call so you can make an informed decision before moving forward with any refinance.

How do I attempt to make clients bridge the gap between perceived value and actual value? I ask them this question. - If you had to sell your house in one week, where would you have to price it at?

If you want a true estimate of market value for your property, get in touch with a high quality real estate agent. Remember, it is much better to be informed than lost in the shuffle. Be proactive and understand your options in today's real estate market. There are deals to be had out there. Don't miss out.

.........If you have been crushed by this economy – god bless you….

REVERSE MORTGAGE MARYLAND

Want to know what type of handle the FED has on their duties?

Watch the video below... you will be amazed!

couple this with reports such as Bank of America and other huge lending istituions that accepted TARP money have modified hardly any loans.... and it will make you sick!

spread the word - send this to your political representatives

.....................If you currently have a second mortgage, home equity loan, line of credit or anything that is a lien on your property, you will be required to have that loan subordinated or paid off when refinancing. And let me tell you, these bad boys are a nightmare! Currently I have been waiting over seventy five ( 75 ) days for one of these subordination agreements to be completed. Lenders move at their own speed. I have been told by Bank of America, Citi Mortgage and Citizens that they only take fax requests….. oh and by the way, it will cost you upwards of a $250 subordination fee before the clock starts ticking.

I cannot begin to tell you about the nightmare of waiting for these agreements has become. Many of these resulting in rate lock extensions which get passed on to the borrowers. And these are lenders that currently own your second mortgage in the first place. Besides the fact most of them are recipients of millions in TARP money targeted to help homeowners like all of us. If you are one of the many frustrated with your current lender and their turn time with these subordination agreements, call and write your local and state politicians. I certainly have.

Be prepared for frustration and if possible, look into paying these loans off with a fixed rate first mortgage. Especially if you have a variable (adjustable) rate line of credit. These my friends are ticking time bombs…..

For more advice on how to handle a refinance with a second mortgage involved call a high quality mortgage professional.

If you have been crushed by this economy – god bless you….

Lewis Poretz - Maryland Mortgage Advice

Many readers may not want to hear what I have to say. I said it before and it brought out responses from a few people that don’t like reading statements they percieve as doom and gloom..... Maybe I didn’t do a good enough job of simply pointing out some GLARING STATISTICS that can’t be denied nor be thrown out with the bath water. People remember this – politicians can put a spin on any statistic and make it look good. That is what politicians do. Read the facts below – I am not a gloom and doomer. I am a realist!

People with good credit and equity left in their house need to know what’s up. They need to understand how lucky they are that bills get paid every month. They need to become an expert on saving money and reducing debt, for these are the rare breed that will hunker through this and possibly even profit from our current economy. This message is intended for people who are above water because people who are $100,000 plus under water on their house, people who have been out of work for months, people whose income has been slashed, many of these mentioned people with excellent credit through all of this. Well these people just don’t care anymore. Read below with an open mind and try and comprehend. Do not hide from reality. This is reall world. If you are one of those that is laughing right back at this economy you are awesome and I am jealous. If you have been crushed by this economy – god bless you….

Our Vice President – the man just under the head honcho - said just a few days ago, “we misread how bad the economy really is”…. SHOCKER!!!

DUH! Let me tell you what I see must rebound before we even hit the bottom, let alone recover. I don’t care where you live……

PROPERTY VALUES - In MOST areas – I said MOST – values continue to decline. For the first time home owner and the mortgage banker who is originating these loans, you guy’s should be kickin ass. BUT for the millions who can only dream of purchasing in this market, well they are simply getting crushed.

Mortgage insurer PMI Group Inc. says home prices continue to fall and will likely be even lower in two years. Their recent index shows approximately 85 percent of the nation's 381 metropolitan statistical areas (MSAs) are now facing increased risk of lower home prices in 2011. Florida, California, Nevada and Arizona continue to have the highest risk scores but an increased risk of lower future prices is now spreading across all regions of the nation because of the significant increases in unemployment and foreclosure rates. Some experts are now predicting another 40% drop in home values are inevitable. Hmmmmm let’s read on –

UNEMPLOYMENT – the number of unemployed Americans will top 10% within two months, possibly even next month. Watch the news - last I heard GM and a few other pretty large employers were letting go employees by the tens of thousands. Even hospitals are cutting their budgets. HOSPITALS!!!

Imagine Emergency Departments closing for the night. How bizarre huh?

FORECLOSURES - I see somewhat of an algebraic formula here – check it out…

Property Values + Unemployment = Foreclosure what a genius thought –

If you own a house and you owe more than it is worth (property value) +

You ain’t got no dough to pay the rent (unemployment) =

You gonna lose your house!!!

Why is that so damn hard to understand? Statistics show in in every 5 homes in America is upside down on their mortgage – read on…..

BAIL OR NOT? – A study of the Massachusetts housing market by researchers from Northwestern University and the University of Chicago concludes that a home owner’s propensity to default increases the further their loan goes under water.

The study found that home owners begin to walk away after declines of 15 percent or more. More than 17 percent of households would default, even if they can afford to pay their mortgage, when the equity shortfall reaches 50 percent of the value of the house.

Recent studies show 20% of American homeowners are under water. TWENTY PERCENT! That is 1 out of 5 homeowners. If housing prices have another 40% drop to go let’s take a look at something here.

Your current house value is 300K You owe 350K you continue to maintain good credit and pay on time. Next year your home is worth 240K. That is simply a 20% drop, a number that can be seen as fairly conservative. So now your house is worth 240K and you owe 345K – It could possibly take 10 – 15 years of mortgage payments simply to get back to frickin even! Highlighted below is a new term you are going to start hearing more and more… trust me on this. This term has no prejudice to credit or income. This demonstrates that housing values must hit bottom before anything will even remotely begin to get better in our economy. The new saying will be –

Strategic Mortgage Default

MORE BAD NEWS – Bank Failures will be on the rise. It is inevitable. Just look at what the subprime mess did to them. The conforming, A+ credit loans nobody expected to go bad are going to start happening very soon. Given the example above, if you were that far underwater and it could take up to 15 years to break even, what would be the most strategic financial decision to make? As property values continue heading south more of those good borrowers will choose to simply walk away. More bad loans = more bank closings. There is NO WAY AROUND IT….

from Forbes 7/7/2009 --

"Rising unemployment, a shrinking economy and falling home prices have left U.S. consumers increasingly unable or unwilling to pay credit card bills and home equity lines of credit.

THE SOLUTION – Now there is your gazillion dollar question. Would it make sense if the government told the banks, which they own anyway, to just forgive any mortgage amount owed on a property until the loan to value hits 80%. Hs the government already spent that much money bailing out the banks anyway? And speaking of the bailout money, I called my lender, told them I owed more than my house was worth, and they told me because I always pay on time there was nothing they could or would do. My current lender held their hands out to the government for billions in TARP money, still went belly up, and was purchased by a bigger bank with TARP money they received from the government. WTF???

Maybe this 2^nd round of government stimulus they are now talking about – (would it really be the 2^nd round or the 3^rd, 4^th or 5^th?) – maybe this money can really be not just earmarked but handed directly to underwater homeowners and small business. Fix those two core units that America was built on and then we can begin a recovery. Hopefully it won’t take the next 5 – 10 years to figure this out. Until then --- God bless you all ~~~

MARYLAND MORTGAGE EXPERT

Consumers, realtors and mortgage brokers continue to have deals killed because of the new HVCC appraisal compliance regulations. Inferior appraisals are now becoming the norm with no help in site. This program has come under serious fire and hopefully will be placed on hold very soon as refinances and purchases fall by the wayside with no appeals process that seems to work.

There is an alternative. FHA - if you are looking to refinance ask your mortgage banker if an FHA loan would make sense for you. FHA appraisals are still handled by the loan originator and comparables can be checked by appraisers for value before an order is sent and your hard earned money is cashed by appraisers simply looking to make a buck without the client’s best interest in mind.