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Are you living the American Nightmare! Why others Profit?

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The Problem:►
►Wall street got too greedy.
►ARM, Alt-A ARM, Option ARM, Prime ARM, Sub-prime ARM, these adjustable rate
mortgages will continue reset to higher monthly payments which many homeowners will
not be unable to afford.
►Millions of mortgage brokers originated these types of loans across the nation.
►Now the banks are literally overwhelmed and don’t have enough people to clean up
the mess.

The Numbers:
►More than $250 billion in 2008 another 350 billions in 2009 and another $700 billion
will reset in 2010 and beyond, this is according to a First American study.
►Now here is the recipe for disaster.
►It’s estimated that 60% of all arms borrowers pay only the minimum payment and can
not afford a higher payment.
►According to Freddie Mac 62% of all loan modifications become delinquent within 60
days after a modification takes place.
►Loan modification is a disaster; it’s PROVEN it doesn’t work without principal
reduction.
►Right now according to credit Suisse banks have approximately 900 thousands
properties in their books. Not listed for sale with an agent.
►As per Credit Suisse banks and GSE’s must avoid foreclosure in 4.2 million loans
until the end of 2010 in order to have a recovery.
►Highest unemployment rate in over 30 years.

The FDIC is selling off failed Bank and making crazy deals with the new owners, like this deal with failed IndyMac Bank to OneWest Click to Watch This Video Why would these banks want to help the average homeowners who is fighting to keep their homes when they can make more money doing short sales. Does this seem right to you?

Let me know your thoughts.

Lifeline needed for underwater homeowners – Is Walking away the only option?

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Link To Lifeline Needed For Underwater Homeowners

I’m meeting more and more homeowners who just don’t want to wait for the market value of their homes to catch-up to the price they paid or the mortgage they have. If you’re home has a lot of equity and you’re underwater, maybe you are struggling to make the payments. There is hope, really! Check out making homes affordable to see if you can get help.

If you don’t qualify for this government program try contacting your lender and see if they can assist with a loan modification (CLICK HERE FOR ANSWERS) if don’t get assistance from the lender, DON’T walk away from your home the problems don’t disappear! Infact it will get a lot worse.

Lenders are willing and advising borrowers to short sell their homes because you are helping them save them money. It cost the bank on average $50,000-$80,000 to foreclose on a home. By Short Selling you’re home you are helping the lender solve a problem they have. Both you and the lender have a problem, you can’t afford the house and they are not getting interest paid on the loan. Some lenders are also giving borrowers (the seller) cash at closing to help move. Wells Fargo offered one of my clients $2,500!

Check out a video I did on short sales and why it’s better for you than walking away and facing a foreclosure!
I’m here to help so feel free to call me anytime or shoot me an email.

FHA to provide early relief to struggling homeowners

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WASHINGTON – Jan. 25, 2010 – At-risk homeowners with FHA-insured mortgage loans are now eligible for loss mitigation assistance before they fall behind on their mortgage payments. Previously, homeowners weren’t eligible until they missed payments.

The Helping Families Save Their Home Act of 2009 expanded FHA’s authority to use its loss mitigation tools to assist FHA borrowers avoid foreclosure, including those facing “imminent default” as defined by the Secretary.

“Loss mitigation assistance is beneficial to both borrowers and FHA because it helps borrowers retain their homes while protecting the FHA insurance fund from unnecessary losses,” says FHA Commissioner David Stevens. “Now servicers will have additional options for those borrowers who seek help before they go delinquent.”

The change is effective immediately under FHA’s Home Affordable Modification Program (FHA-HAMP) (http://www.hud.gov/offices/hsg/sfh/nsc/rep/hampfact.pdf) with the following rules:

• FHA defines “FHA borrower facing imminent default” to be current or less than 30 days past due on the mortgage obligation and experiencing a significant reduction in income or some other hardship that will prevent him or her from making the next required payment on the mortgage.

• A forbearance agreement allows the loan servicer to postpone, reduce or suspend payments due on a loan for a limited and specific time period.

• FHA-HAMP allows qualified FHA-insured borrowers to reduce their monthly mortgage payment to an affordable level by permanently reducing the payment through the use of a partial claim combined with a loan modification. The partial claim defers the repayment of a portion of the mortgage principal through an interest-free subordinate mortgage that is not due until the first mortgage is paid off. The remaining balance is then modified through re-amortization and, in some cases, an interest rate reduction.

The borrower must be able to document the cause of an imminent default, which may include, but is not limited to, one or more of the following types of hardship:

1. A reduction in or loss of income that was supporting the mortgage loan, e.g., unemployment, reduced job hours, reduced pay, or a decline in self-employed business earnings. A scheduled temporary shutdown of the employer, (such as for a scheduled vacation), would not in and of itself be adequate to support an imminent default.

2. A change in household financial circumstances, e.g., death in family, serious or chronic illness, permanent or short-term disability.

Loan servicers must document the basis for its determination that a payment default is imminent and retain all documentation used to reach its conclusion. The servicer’s documentation must also include information on the borrower’s financial condition.

Additional information and guidance can be found on HUD’s website. (www.hud.gov).

Banks start to embrace short sales

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WASHINGTON – Dec. 7, 2009 – Even before the government put pressure on them to embrace short sales, more banks were starting to take their lumps, do the short-sale deals and move on.

Three years into the housing meltdown, short sales have tripled to 40,000 in the first six months of 2009 compared to the same time period a year ago, according to data from the Office of Thrift Supervision and the Office of the Comptroller of the Currency.

Wells Fargo, Bank of America Corp. and JPMorgan Chase & Co. this year have hired and trained more staff to handle short sales and also developed software for expediting them.

“It’s really finally dawning on banks that they’re better off with a short sale,” says Richard Green, director of the Lusk Center for Real Estate at the University of Southern California in Los Angeles. “I think banks were in denial.”

Source: Bloomberg, John Gittelsohn and Margaret Collins (12/4/2009)

Fed housing program encourages short sales

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Fed housing program encourages short sales

WASHINGTON – Dec. 1, 2009 – The Obama Administration, through the Treasury Department, announced new housing guidelines yesterday. While a series of announcements highlighted different programs, the National Association of Realtors (NAR) focused on changes that will make it easier for real estate associates to deal with short sales and “deeds in lieu of foreclosure.”

The program’s official name is the Home Affordable Foreclosure Alternatives Program (HAFA), and it’s part of an existing initiative, the Home Affordable Modification Program (HAMP). HAFA applies to loans not owned or guaranteed by Fannie Mae or Freddie Mac, which cover over half of all U.S. mortgages; however, Fannie and Freddie will issue their own versions of HAFA in coming weeks.

While HAFA’s goal is simple – increase the number of short sales and “deeds in lieu of foreclosure” by simplifying the process – the rules are complex, and it comes with 43 pages of guidelines and forms. Among other things, HAFA:

• Allows borrowers to receive pre-approved short sales terms before listing the property (including the minimum acceptable net proceeds).

• Prohibits servicers from requiring a reduction in the real estate commission agreed upon in the listing agreement (up to 6 percent).

• Requires borrowers to be fully released from future liability for the first mortgage debt (no cash contribution, promissory note, or deficiency judgment is allowed.)

• Provides financial incentives: $1,500 for borrower relocation assistance; $1,000 for servicers to cover administrative and processing costs; and up to $1,000 for investors.

The program does not take effect until April 5, 2010, but servicers may implement it before then if they meet certain requirements. The program sunsets on Dec. 31, 2012.

For more information, read the Nov. 30 HAMP news release: https://www.hmpadmin.com/portal/docs/news/hampupdate113009.pdf

To read the complete 43-page short sale guidelines, go to: https://www.hmpadmin.com/portal/docs/hamp_servicer/sd0909.pdf

FHA boss: FHA is not the new subprime

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SAN DIEGO – Nov. 16, 2009 – Federal Housing Administration Commissioner David Stevens said Saturday that concerns the agency is headed for the same financial trouble that snared Fannie Mae, Freddie Mac and the subprime sector are unwarranted.

Stevens made the remarks during a speech at the National Association of Realtors®’ annual conference and expo in San Diego.

His comments come days after the agency revealed its financial reserves have fallen to a dangerously low level due to more homeowners defaulting on their loans. The FHA does not make loans, but rather offers insurance against default.

That’s led to mounting concerns that it will eventually need an infusion of cash like government-controlled mortgage finance companies Freddie Mac and Fannie Mae.

But Stevens sought to dampen those concerns, noting that despite the most severe housing recession in decades, the agency has $31 billion in capital – $3.5 billion more than it had a year ago.

FHA is “the only participant in home financing services in the U.S. economy that hasn’t needed a bailout, hasn’t needed (funds from the government’s Troubled Asset Relief Program), hasn’t needed special assistance and is still completely self-sustaining,” Stevens said.

“Without FHA there would be no (housing) market, and this economy’s recovery would be significantly slower,” he said.

The FHA has insured nearly a quarter of all new loans made this year, and about 80 percent of that business is from first-time homebuyers.

The agency’s dominant role in first-time home purchases has raised questions about whether it taking on too much risk. Some have drawn comparisons between FHA and the subprime market, which collapsed due to homebuyer defaults on risky loans.

Stevens rejected such comparisons, stressing that the agency has far more stringent guidelines for the loans it insures.

“Nothing could be further from the truth,” he said.

FHA’s losses have increased with the unemployment rate as more homeowners default on their loans. About 17 percent of FHA borrowers are at least one payment behind or in foreclosure, compared with 13 percent for all loans, according to the Mortgage Bankers Association.

An independent audit shows FHA’s reserves have fallen to $3.6 billion, compared with $685 billion in outstanding insured loans for the fiscal year ended Sept. 30. That’s a ratio of 0.53 percent and far below the 2 percent threshold required by Congress.

Stevens credited the requirement with keeping FHA on good financial footing.

“That is why we’re still standing while many of others did not survive this tumultuous time,” he said.

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Cities to get $4 billion in foreclosure aid

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WASHINGTON – Sept. 17, 2008 – The Foreclosure Prevention Act, which passed in July, allocates $4 billion to cities and states that have been hardest hit by the surge in foreclosures over the last year. Recipients will be able to use the money – which is an addition to the usual funding for the Community Development Block Grant (CDBG) program – to buy foreclosed properties to stabilize property values. Now, the U.S. Department of Housing and Urban Development (HUD) is devising a formula for distributing the funds for communities in need.
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