Real Estate

First Time Home Buyer Tax Credit Assistance and Federal Government Home Loan Program with Low Down Payment on FHA Mortgages. Buy Bank Foreclosed Homes at a Discount. Go To http://RealEstateMarketingThisWeek.com

Part 2 (Excerpt)

The median income family can afford twice the median priced home; prices drop over 50%

And now I mentioned Dan Havey is back in the studio with us, Dan has done a lot of great things in the mortgage industry. He left us about a year and a half ago, is that right Dan?

Yes, I left the mortgage industry in October of 2007. Tell us a little bit more about yourself.

As you know I came originally from Wisconsin, where I got a degree in Business Finance and I came out here in 1989 and started working with my brother selling real estate owned-REO, bank owned properties for Fannie Mae, Countrywide, and the Resolution Trust Corporation-RTC which was the government entity that was put in charge of disposing of all the real estate owned by the 1800 S&Ls that had failed. I did that until about 1995 when I moved into the mortgage industry and there for 12 years I worked predominately with bankruptcy attorneys helping their clients get out of bankruptcy and foreclosure. I left the mortgage industry in October of 2007. Now I am working predominately in the arena of marketing for real estate and mortgage companies, helping out companies, just like Im here helping out Michael today, to get people to realize that right now actually is a really good time to buy.

There are a couple of points I want to make and it was something that Michael had said earlier. The first one was that 4% interest rate. Originally Obama said a couple of weeks ago, when he rolled out the mortgage plan, that they were going to take the $200 billion and use it to buy mortgage backed securities, well the article I was reading today said it appears that plan may have changed. Instead of buying the mortgage backs they were actually buying the stock of Fannie and Freddie to help support the company and keep these companies going under. I dont quite understand why being how they own them now.

Well youve got to hand it to the government they have really done a heck of a job helping Fannie Mae out, for instance today the stock is up to $0.41. Wow, doing so well, I remember when it was $150 or so, where it was at the top of the market.

Today, right now is definitely the best time even if rates dont get down to the 4% point. The beauty of it and were going to talk more about this in a later segment, is that we have seen a 51% decline in home values from the peak of the market. So you dont have to have the absolute greatest interest rate in order to be able to buy a house today. The median home price right now is $130,000 in Maricopa County, it was $264,000 just two years ago.

So the median home price is $130,000? We are going to talk a little bit about what a person has to make to actually qualify for that. Well it is definitely well within the means of a median income family. Right now a median income family makes about $64,000 in the state of Arizona according to the US Census Bureau and HUD. I ran some numbers today, I think at 6% interest and at that rate they can buy a $280,000 house. So you can buy twice the median home price if you are making just what the median income family would be in the state of Arizona. So the median household income buys double the median priced house in Maricopa County. That is correct, at 6% interest.

And the reality of it is interest rates are not even that high right now. So for people to be waiting for that perfect interest rate of 4% it doesnt really matter if it gets here or not because right now is such an incredibly fabulous time to be buying a house. There are so many foreclosures out there on the market right now, there are so many short sales out there on the market right now, and the point you made earlier is very important, that people have to get in and get prequalified, know exactly what they can buy. Now in many cases you are going to need a down payment, so get with your mortgage broker, get with Velocity Financial and start working on that program of getting those funds together for the down payment as well.

Dan Havey we talked in the past about whats available for financing these days, interesting to give little pat on the back for Velocity Financial is one of less than 15% of all of the lenders in the state of Arizona that are qualified to do FHA financed homes. Now FHA financing, people used to think it was only for first time home buyers, thats no longer the case. The FHA loan which only requires 3.5% down payment it doesnt matter if you have owned a home before and in many cases you can own another home now so long as your new purchase is going to be your primary residence you can utilize FHA financing and put only 3.5% down.

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Mortgage market and interest rate update from Bruce Brown, CMPS with First Security Mortgage and radio host of Dollars and Homes on KMCO Talk Radio 710 in Kansas City.

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With the expiration of the Government’s Mortgage Backed Securities repurchase program, rates are sure to go up, but by how much and how could someone take advantage of the current real estate and mortgage interest rate market?

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Amidst the Real Estate & Mortgage Meltdown; Foreclosure Fraud & Scams; Real Estates Future is Great. First Time Home Buyers, FHA Loans & Seller Paid Closing Costs. Go To http://RealEstateMarketingThisWeek.com

Part 1 (Excerpt)

Forget the doom and gloom, First Time Home Buyers can buy with FHA

Thanks to my very great friend Brett Fallon for taking the time to be here in studio today. Brett is one of America’s finest financial advisors. And of course the infamous Dan Havey. Now we all love Dan Havey because he was instrumental in getting me into the mortgage industry about 14 years ago. Most importantly, Dan was instrumental in helping us put together the loan modification hotline and he is the author of Real Estates Future.

So today we have a few things we want discussed in regard to the economy, what’s happened, were wrapping up the year. You may have heard about this in the media, of course the media’s job is to scare you. Well our job is to tell you the truth. So Brett you have some data and some information that you wanted to share

Some of the things you hear in the media, you cant escape, its pretty much doom and gloom, sky is falling, this is the next Great Depression. It’s over for all of us and we should all just pack up and go. That kind of stuff is pervasive out there and creates fear and a lot of anxiety amongst people who are either investors, people who are looking to buy a house, looking to refinance a mortgage.

People dont realize there are certain tools that exist that we will talk about during the course of the show today. They should understand that some of the things that we discussed prior to today’s broadcasts were interest rates. Interest rates are at historic lows. Money is cheaper right now than it has ever been. We know the Fed recently reduced the Fed Funds Rate and that is the rate that banks are lending money to one another at.

Right now that rate is zero. Historically, that’s never happened in the United States before. The Fed’s idea is to help to unfreeze this credit market and we keep hearing all this talk about how credit markets are still frozen, that the global recession is deepening, there is evidence to the contrary of that. Some of the moves that the FED is making are working. We’re starting to see, and you and I were talking recently about some clients that were helping in terms of refinancing existing mortgages. Well, if the credit markets are frozen how come we got those loans complete?

Well, that’s a good point, and you got a call I think it was last Monday or maybe the Monday before, someone called you and asked if there was any money to refinance. What can I do? Well the reality of it is there is plenty of money out there for refinances, in some cases there’s issues with property values. That’s why there are different options for those types of people

Well from a buyer’s perspective, todays property valuation is a good thing, if I’m a buyer. Thats a good point too. People are interested in buying and the huge opportunity today. This is an unprecedented opportunity in my opinion, both in terms of the dollar and the real estate market. And for those who understand those dynamics and are willing to entertain the deal, they will be handsomely rewarded. There is no doubt about it.

And as we spoke on the last show, home prices in November for Maricopa County show that the median home price is down as low as $160,000 already. And it reminds me a lot about when I got into the industry, way back in 1989 and the type of financing we had then was FHA and Fannie Mae. And were back to that again now. We’ve got sanity back into the market and home prices have come down. But right now, it’s a perfect time, especially for first-time homebuyers or a move up buyer who can buy under the Fannie Mae limit of $417,000. If you can get into that range, and as we spoke before that 78% of the homes in Maricopa County that sold last month sold for under $250,000. I think that right now is the time just to get out there and find a house to move your family and children into with an FHA loan.

Michael, you don’t have to have exactly perfect credit do you? You can have a couple of dings if need be, right? You’re exactly right, each case has its own merits, every FHA loan is underwritten individually. There are many cases where collections are okay, there needs to be a explanation. You dont have to have the 720 plus credit scores like you do for Fannie Mae and Freddie Mac to get the best rates…

Duration : 0:5:57

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We are a group of real estate and mortgage professionals who have witnessed the degradation of our once great industries first hand. As business owners and former executives in major corporations, we have had enough. The negative effect the overvalued homes and investment properties have had on the financial well being of our associates, friends and families must be corrected. Unfortunately the Government, Wall Street Firms or Lending institutions are not helping us. We simply can not trust Government, Wall Street Firms or Lenders to provide a solution; they created this mess. We have formulated a viable fix to “THE REAL PROBLEM”.

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Mortgage market and interest rate update from Bruce Brown, CMPS with First Security Mortgage and radio host of Dollars and Homes on KCMO Talk Radio 710 in Kansas City.

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Changes to the First-Time home buyers tax credit for 2008 and 2009! New changes that will help you save money on your home purchase! Buy your new home today! BradenYoakum.com

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First Time Home Buyers use FHA Mortgage and Seller Paid Closing Costs to Buy Real Estate Now. Best Market Conditions for Foreclosures and Short Sales in Decades. Go To http://RealEstateMarketingThisWeek.com

Part 6 (Excerpt)

How many lives have to be wrecked by the mortgage companies loss mitigation departments?

I always tell people when I was dealing with them, with their bankruptcy situation or foreclosures or whatever especially when someone would call me and they would say, I want to file a chapter 13 to save my house and I would say, You dont even think about doing that without an attorney and I would give them an attorneys name and it would work out for them because I think the numbers were like 95% of all chapter 13s filed by the home owner themselves failed.

And I think that is the kind of numbers were going to see in loan modifications, we saw numbers the other day that came out from the government saying that over 50% of the loan modifications are failing. I would suspect that 95% of those were not negotiated by an attorney.

Youre absolutely right, the other thing is people think theyre getting a loan modification because their lender told them that but theyre going to increase their payment over the next X number of months to make up for the back payments. That is not a loan modification by my standards, that is called a forbearance agreement and the majority of people who have failed its because they were put into a plan that was designed to fail.

For gods sakes if your lender is going to increase your mortgage payment by 50% how on earth are you going to pay it when you couldnt pay it when it was right? To me its just mind boggling, theyre out of their minds in these loss mitigation departments. They’re not looking out for you, theyre mitigating the loss for the banks, you need someone who is going to fight for you. And that is what we do.

Well those guys are employed by the bank and they have a vested interest in seeing the bank do well. And they have huge, huge, huge, hundreds of millions and billions in losses that they need to make up. Its kind of a no-brainer, plus, you can’t discount the psychological element in this. If youre in a stressful situation and youre emotionally tied to what if, what if, what is this going to look like in six months? You cannot objectively negotiate your own case with the lender it’s just not psychologically feasible to consider that. Even if you have the time and could figure it out.

And one thing, to take it back to a personal level, there were many times when I was working with people who were in foreclosure and got the phone call the night before the foreclosure sale. They would ask me, can you help me?, and I would say yes, here is what you want to do. You want to go down to the bankruptcy court first thing tomorrow morning and file a chapter 13 by yourself. Now I am not saying go through the chapter 13 by yourself, because I would give them the attorneys number, but they have to be there in line by nine oclock to get it filed and then go get an attorney to work with.

But why did they end up in that situation? In many cases they would tell me that they have been working to get what they called a loan modification, more accurately a forbearance agreement, that is what they were working on with their lender, they would send in all the paperwork that the lender asked for and they would call the lender back after 30 days. And the lender would say, oh well we lost it and so they would get it all together again, and they would send it in and it would be another 30 days, oh well we lost it. Or this, or that, or they would ask for more paperwork and eventually what it came down to is a couple of days before the actual foreclosure sale date the lender would call up and say No, we decided to not do your forbearance agreement for you. And then they’re calling me looking for help. Now if you were working with an attorney, I guarantee that lender is not going to lose your paperwork.

So I have this young lady of 50 years old call me today her husband had just passed away two months ago. Sad, sad situation, very difficult to talk with her because it just felt so horrible this was just unexpected. I probably should not say the name of the servicer, but she’s dealing with someone who would be considered a subprime lender, their loss mitigation department is in India. India doesn’t really have the same rules and guidelines, there is a huge language barrier between her and the person she is talking to try with to save her home.

Duration : 0:6:36

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Home Loan Modifications Negotiated by Licensed Attorneys. Real Estate & Mortgage Laws and Guidelines are Complex. Beware of the Banks Loss Mitigation Department. Go To http://RealEstateMarketingThisWeek.com

Part 6 (Excerpt)

Fannie Mae is proposing to give you a 50 year loan with an adjustable rate

The next one is that your loan to value on your house has to be at least 90% of the property value. So in other words everyone under 90% gets foreclosed on? Right, if you only owe 80% of what your home is worth, they can foreclose on you, take your house and they dont lose as much money.

Back when I was working with Fannie Mae selling repos almost 20 years ago now, they always gave us the figure that they lost 20% of the homes value every time they had to foreclose. So they have plenty of room to sell your house if you only owe 80% on it. So if you owe, lets just throw out some numbers here, lets say your house is worth $100,000 and you owe $80,000 on it, well they are going to lose a little bit but they are going to make it back when they sell your house for $100,000.

Yes, they would just as soon kick you out and keep their money. Yes, exactly I am not necessarily going to say that Fannie Mae is going to kick you out of your house, however the reason why they have this guideline is very simple, they are not going to lose money on you if they have to foreclose on you when you are under 90%. They certainly are not going to lose very much money.

If you have subordinate loans it may be left outstanding and will not be considered in the LTV, so lets just give an example here, your house is worth $300,000 and you have a $300,000 1st mortgage and you happen to have a $50,000 second mortgage. They will re-modify your 1st mortgage but leave the 2nd mortgage in place. So people get to stay underwater, or upside down.

Well certainly you would be in that case and it just does not sit right. The best thing I certainly would like to see them do if nothing else in a situation like that is combine it all into one loan at a much lower interest rate. Because you know that 2nd mortgage is probably going to have a high interest rate. So it would just be so much better.

We need verification of income that makes sense. Here is one I dont get, 38% as far as your debt to income ratio. That seems kind of high to me. What do you think Michael?

Well I think that people who have gotten themselves into trouble and they need to do something like a loan modification then 38% is probably on the high side. People need relief, but they need relief that is going to last a long time. Even though this is essentially a trial-period loan modification this particular guideline of 38% really does not set well with me, I personally think it needs to be lower. People need a break; people need to be able to stay in their house.

Well what I was looking at is your average family; I always think probably pays about 30% of their gross income towards taxes, payroll, and things like that, so right off the bat Uncle Sammy takes 30%. Well now that Fannie Mae and Freddie Mac are owned by the government Uncle Sammy is going to get another 38% out of your paycheck which is a total of 68%, that doesnt leave a whole lot of money does it? Especially if you have a car payment, or you have kids to feed, maybe who go to daycare while you go off to work, assuming you still have a job. The unemployment rate is pretty high.

Well in order to qualify for this you do have to have income so you do have to have a job. So moving on to the next one because we are getting a little short on time, what they are going to do is take all of your back interest, escrow advances, costs, fees, everything they are going to add it to the loan amount and have you pay it back over as much as 50 years, if they need to stretch it out that long. Theyre going to give you a 50 year mortgage? I looked at that and thought, why dont you make it interest only because you are never going to pay the thing off anyway.

Lowest acceptable rate that they’ll have is 3%. The real kicker, if they get you a rate of 3% it will be an adjustable rate because it’s below today’s market rate. Your rate will actually increase starting five years from now at 1% per year until it gets up to the market rate. So not only are they getting a 50 year loan that you will never pay off, theyre giving you an adjustable-rate loan on top of it. If they give you 3% today it will begin to adjust up in the five years until it reaches today’s market rate. I think today’s market rate is about 6%, so you may get 3% for a couple years but eventually they go back up to 6%…

Duration : 0:6:35

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Homeowners First!

Trilogy Property Solutions is a company of three women who help homeowners and property owners solve a variety of different real estate and financial situations. Sometimes the homeowner has to move when theyre relocated to another state, sometimes they just want to live somewhere else and need to sell their properties quickly, and sometimes financial hardship befalls them and they need to know what their options are.

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