Ron Withers ----Retired Mortgage Professional

We are acutely aware of the foreclosure statistics over the past couple of years and the number of homeowners being displaced, their erosion of wealth and the family turmoil created as a result of these events. To some extent, the plight of renters that are losing their home and money as landlords succumb to default/foreclosure!

Has The Time Come for A Renter's Bill of Rights to afford some degree of protection for Renters?

Consider some real situations that are happening every day as a Renter; Renter's are moving in and are faced with possibly the first and last months of rent in advance and quite possibly a damage deposit as well as the cost of moving or relocation. The owner/landlord knows that they are in default on their mortgage or that there is an impending default.

They rent and collect their tenant's monies with no intention of paying their mortgage. Is this "Theft by Deception? My thought is yes!!!! For they are withholding information that should be known to the renter and doing it for personal financial gain regardless of the impact on the tenant. Should there be punitive damages available to the tenant?

Should landlords be required by law to notify their tenants upon their personal default prior to renting to a tenant or at any such subsequent default after the tenant has occupied the home?

Should mortgage holders be required to mail a notification letter to the Owner or Occupant at the property address that is receiving a notice of default notice as generally the letter would only go to the mortgagor's address of record?

Should a tenant's rents be required to be placed in an independent Escrow Account until such a default is resolved or the foreclosure process has been completed?

What Say Ye?

First and foremost I believe there is still some misconception by consumers of what credit scores are! Secondly, consumers must understand that there are no...I repeat NO catchall rates and loan terms that apply across the board to consumers. It's all about risk assessment by the lenders whether you are getting an auto loan, credit card or a mortgage loan.

As an example, if you hear that the national average for 30 year fixed rate agency loans is 5.25% this is not what you can expect if you just have "good" credit. You can have excellent credit/pay all your debts on time but a low score due to a risk assessment.

Likewise it is important to understand that this also applies to higher rates/fees charged by Private Mortgage Insurance (PMI) companies to insure your conventional mortgage loan. These fees have skyrocketed in the past couple of years.

Many consumers may still understand or believe that their personal credit scores are a numerical evaluation of how they have handled their past credit. Quite contraire....your personal credit score is a predictive risk model or an indication of increased risk of the likelihood that you may or will experience future credit problems whether it be in the form of late payments/delinquency, default, collections, bankruptcy, etc.

All lenders use some form of tiering of credit scores to either grant or decline your credit request as well as price the cost/rate of your loan to you. In the case of credit cards you might receive a credit card with an interest rate of 8.99% based on your credit worthiness at the time the credit card is issued. The credit card companies monitor your credit file/score frequently and if you add excess debt or you credit score drops you could reasonably expect a notice in the change of your terms.....maybe to 27.99% virtually overnight.

So...on to the subject matter or title of my post. Depending on your credit score, loan-to-value %, type of loan and purpose, your credit score could cause a pricing adjustment in some extreme cases as much as 3.50%..yes .....I said 3.50%!

To illustrate my point that higher credit scores can put money in the bank for you, let's make a few assumptions and crunch the numbers. Assuming that national mortgage rates for 30 yr fixed rate are at 5.25% and you are obtaining a mortgage loan of $100,000 (purchase or refinance), however your personal credit score is low enough to cause a rate increase to 6% after price adjustments are calculated. A $100k mortgage at 5.25% equates to a monthly principle and interest (P & I) payment of $560.49, however since your credit score was lower your actual monthly P & I payment will now be $608.54, a monthly differential of $48.05.

Assuming that you will reside in your home for 7 years, that you had protected your credit score to avoid paying a higher interest rate and that you have the financial discipline to save or invest this monthly differential of $48.05 you would have accumulated just over $4000 in this period of time.

Let's add some more "what ifs"! Let's assume that you took out a mortgage loan that required private mortgage insurance (PMI) and your lower credit score also caused an increase to the cost of your monthly PMI premium. While there are many variables to how this cost may impact you...it can be significant! Conceptually, apply this situation to all your personal debt, auto loans, credit cards, etc. Also consider the earnings on these savings or investments over the next 7 years. $10,000, $15,000 in the bank....or more?

Bottom line is there will always be a cost of using credit but the ability to make it pay you... is up to you!

Copyright 2009, Ron Withers, All Rights Reserved

As of March 20, 2009 Florida Housing Finance Corporation (FHFC) or Florida Housingstill has in access of $14.5 million available between their 2008 Series 3 and 4 Mortgage Revenue Bond Issue for mortgage financing and down payment assistance (DPA) up to $10,000 subject to borrowers eligibility.

If you are seeking DPA funds to help make your home purchase attainable or affordable the Florida Housing program presents a higher probability of assistance when compared to local SHIP programs. Most of the local SHIP programs have already closed their application period or exhausted their available funds.

Florida Housing remains committed to the continuous availability of funds. Home prices are down and with $10,000 in assistance you may be able to complete your home purchase with very little out of pocket funds.

Although Florida Housing has been committed to continuous funding the more recent bond issues have been increasingly difficult to get negotiated.

Also, homebuyers wanting to take advantage of this resource should know about of the more recent changes to the program.

Firstly, home buyers wanting to use this program and be eligible for assistance must complete a home buyer education program and receive a completion certificate prior to negotiating any purchase contract and receiving a rreservation of funds.

Secondly, home buyers are now eligible to receive the newly enacted $8000 tax credit. Previously, they were ineligible for the $15,000. tax credit.

Visit me at www.ronwithers.com or www.myfloridamortgagepro.com

As of February 20, 2009 Florida Housing Finance Corporation (FHFC) or Florida Housing still has in access of $25 million available between their 2008 Series 3 and 4 Mortgage Revenue Bond Issue for mortgage financing and down payment assistance (DPA) up to $10,000 subject to borrowers eligibility.

If you are seeking DPA funds to help make your home purchase attainable or affordable the Florida Housing program presents a higher probability of assistance when compared to local SHIP programs. Most of the local SHIP programs have already closed their application period or exhausted their available funds.

Florida Housing remains committed to the continuous availability of funds. Home prices are down and with $10,000 in assistance you may be able to complete your home purchase with very little out of pocket funds.

Although Florida Housing has been committed to continuous funding the more recent bond issues have been increasingly difficult to get negotiated.

Visit me at www.ronwithers.com or www.myfloridamortgagepro.com

I believe that within the day to day conduct of our respective business there are blasé' days, so-so days and the occasional great day that just makes us feel good about who we are and serves to reinforce our commitment to do what we do. I am not talking of the deal that just got closed or the new prospects lined up as potential sources of business. I am speaking of an event such as an interaction with a client or someone, anyone that touched us in some way.

I am speaking of things such as a HUG or a FIRM HANDSHAKE and a THANK YOU that comes from deep within the heart after the transaction is closed. Anything similar in nature that puts a smile on your face for the rest of the day!

Yesterday was such a day for me. Early in the afternoon I received a call from Tom in California (out of the blue). When I saw the out of state number pop up on my caller ID my initial thoughts....I wonder that this is? I answered the call and Tom identified himself and all the while I'm sort of thinking, a telemarketer wanting to offer we some new-fangled service or a head hunter maybe? Tom dispelled those thoughts rather quickly after a pleasant exchange of how do you dos'.

Tom proceeded to tell me that he had been surfing the internet and stumbled across an AR blog by another AR Member to which I had commented on. Evidently my comment had struck a chord with him which led him to further investigate me and finding my personal website. He so kindly complimented me on my AR comment and then my website which he found very simple, straight forward and informative. Furthermore how I portrayed myself and my services.

WOW....Tom.....tell me more, you've hooked me! And that he did....and it was so interesting for me. We started to talk in more detail about the original AR Blog and my comment, however we got wrapped up in other aspects of the conversation that I did not find out what the blog was about, nor the comment that I had made. Although, that is not all that important. What matters is that it touched him!

Tom shared with me that he had faced some challenges with his former career and the economic climate in California and after considerable soul searching had made the decision to enter the Real Estate industry. He is presently taking Real Estate classes.

In speaking of ActiveRain and his career plans I suggested that he consider AR membership and pointed him toward 1 or 2 AR members that he might want to follow. I further suggested that this may prove helpful in his career transition.

We briefly joked about his decision to enter the Real Estate industry, the timing, being in CALIFORNIA and the turmoil there, both in housing and financially.

I thanked Tom for his call and making my day as well as by best wishes for his success in his new endeavor. This morning when I opened my Outlook there was Tom with a comment. I'll share it with you.

There's a new comment on the blog entry Usury......We Hired The Fox To Guard The Henhouse!

Comment:

Ron, I hope you see this post as I called you out of the blue today and you were so gracious to have a pleasant conversation with me. Thank you for pointing me out to this blog of yours, as I mentioned to you that I am starting new in real estate, and I do mean in the beginning. It does not matter about that but maybe I wanted to suggest a new way of looking at what has happened to our great united states. GREED is just like an addiction, it can't be cured, just controlled, that's really it in a nutshell. But also I from now on will close my mouth and take the cotton out of my ears and listen to all of you gracious folk out there, I really need to learn. Thank You all......Tom

Tom:

It's so nice to meet in an indirect way two days in a row. Our conversation was pleasant for me as well. As I mentioned in our discussion you are making a huge leap in your decision to enter the Real Estate industry, more so given the nature of our times and your location.

I am in agreement with you on your perspective on greed. I want to wish you all the best in your endeavor to become a licensed Realtor in California, it indeed is a 180 degree turn as you mentioned. Likewise, it hope that you will visit ActiveRain often as well as consider membership as it will compliment the new direction you are taking with your life and career. If you revisit this post I will leave you with this.....shortly I will be making a new post,,,Close Encounters of the Nice Kind!

Best wishes and good luck!