From: Traci O’Connor [mailto:toconnor@apmortgage.com]
Sent: Friday, April 02, 2010 11:21 AM

To: bill@nwlmc.com

Subject: referral

“Facing the possibility of losing a home is an extremely sensitive time for people.  Bill Black with NWLMC is not only an extremely knowledgeable professional, but he truly cares about the individual families, and creating a positive outcome.  It is important that situations like these be handled by a true expert, and that is what I consider Bill.  He will honestly and thoroughly explain to you the ins and outs of the process.  He will customize the best plan for your specific circumstances, and make sure you know what you can expect.  He has also put together a very solid team of individuals with the necessary qualifications to optimize your chances for a successful outcome.

Please don’t hesitate to call Bill, and give him the opportunity to give you and your family a helping hand.”

At your service,

Traci A Rohrer O’Connor

Regional Production Advocate

(Serving Branches in the Pacific NW)

American Pacific Mortgage

toconnor@apmortgage.com

503-319-1555 (cell phone)

916-960-1325 (American Pacific Corporate/Bank IT)

So I was looking for a funny logo to add to today’s post and I ran into a very interesting website-www.bankofamericasucks.com I am not going to say what I used for a google search but lets just say the search pretty much covered the 4 words in the website.  No need for a funny picture when that website pretty much clears up the facts.

So the question of the day has become “I have Bank of America Mortgage- what are the chances of a loan mod?” Everyone knows that Bank of America bought noxious Countrywide a couple of years ago and now Bank of America is one of the largest banking institutions in our nation.

What you can expect from Bank of America / Countrywide

Bloomberg.com reported that Bank of America was 1 of the worst performer’s amongst the biggest U.S. banks in modifying loans for struggling home-owners. As of August 5, 2009 they had only modified 4% of eligible loans; http://www.bloomberg.com/apps/news?pid=20601208&sid=aaiRx.lyFD4I

Don’t expect much if any assistance from them. They have improved their mortgage modification eligibility review process, but they lack on execution.

They took $45billion in TARP funds (the government asset relief funds that is designated for banks to use to assist home-owners to remain home-owners without the bank taking large losses) but it doesn’t appear that they have used these funds to build an efficient modification department.

They have signed up under the Home Affordable Mortgage Program to provide relief to those home-owners that are struggling and have a Fannie Mae or Freddie Mac mortgage. But in fact, they are substituting the rules (see the Home Affordable Mortgage Program page)  by adding that they will not reduce the mortgage payment if it ends up being less than 50% of the original mortgage payment. This is absolutely not a rule under the Home Affordable Mortgage program. This program states that if the home-owner qualifies, the mortgage payment would be reduced to 31% of their monthly gross income (including property taxes, home-owner insurance, association dues if applicable and repayment of escrow advances). It does not limit the reduction of the mortgage payment to any more than 50%. Unfortunately, if you receive this response, what really can you do about it?

Modification request instructions can be found at: http://www.bankofamerica.com/loansandhomes/financial-difficulty/ The instructions look very inviting, but don’t be fooled. In fact, if you consider the fact that Bank of America recently testified to our Senate that they are confused about which borrower qualifies for a modification and that the paperwork may be the problem as they are confused about what to review and obtain, well then that should be enough for you to understand what you can expect from them. Especially, when they thus far have only modified 4% of eligible borrowers.

We give Bank of America a poor rating and strongly urge you to seek professional representation in order to ensure that your rights are protected and to afford you the very best chance to obtain a mortgage modification or a default solution.

I have entrusted my referral sources to NW Loan Modification Center in Vancouver, Wa. which is a local attorney firm with expertise in default solutions- Loan Modification, Short Sale Negotiation, Short Refinance Negotiation, as well as all aspect of Bankruptcy. They can be reached at 360-89-NWLMC.

Just this morning, I was reading an article that I came across regarding a couple things that are going on with the Federal Housing Administration (FHA)….and it wasn’t pretty.

Basically what’s going on right now is that there are justifiable rumors that the FHA’s reserves (capital) are hovering around dangerous levels.

Congress requires that the magic number FHA needs to be at is 2%. At the moment, its speculated to be down to about 3% (down from 6.5%  in 2007) and if it falls below that mark, Uncle Sam has to come in and save the day once again. (Is it just me, or is this a never-ending cycle? Has anyone seen AIG’s stock quote recently?)

At the moment, FHA’s defaults (90 days+) are nearing 8% and depleting a good portion of FHA’s reserves. While that number may not seem that HUGE,  you have to see how all this links together.

Several high-cost areas in the US got hit pretty hard the past couple of years. What goes up,  must come down, right?

Well because of those declining markets, FHA decided to increase their loan limits and availability to accommodate the supply/demand in those areas to as much as $729,000. Who has $140,000 for a down payment stashed under their mattress in CA to buy that $700,000 home? Not too many people. Well, who has around $25,000? Get the point?

Hopefully we do not see FHA thaw this much!

And while this WAS needed to help stimulate buyers, you have to think of what happens on the flip-side. When that $5,000 (est) payment can’t be made anymore, and its time to jump ship, and who gets stuck with the bill? FHA.

FHA then has to tap into their reserves to make good on this.

Think about this for a moment:

In Texas, about 4-5 homes have to foreclose to match that ONE home in California. The odds of 4-5 consumers simultaneously defaulting is not that likely, unless they’re Madoff’s advisors.

The point I’m trying to make is that the high-cost areas are affecting FHA a little bit more than other more stable areas. While I am not saying that FHA lending shouldn’t be available here, I think it would be a good idea (especially now) to implement some more stringent measures before approving every Tom, Dick, and Harry that apply. Last thing we ALL want is to wave bye-bye to FHA.

The remainder of the year will be quite interesting. An important incentive is coming to an end ($8k Tax Credit), and as for interest rates, well, let’s just hope they keep steady. Too many good things coming to an end is not a good thing.

Bill’s 2 Cents

I would safely venture to say that FHA credit score requirements will be going up here in the upcoming months- last week 2 lenders raised minimum credit scores to 620 from 640 and another lender raised criteria all the way to 660! We may even see larger down payments later down the line. While FHA loans have been the hot product, I wouldn’t be surprised to see Conventional loans start to SLOWLY creep back in and create a “2nd hand FHA loan” if capital continues to diminish as it has.

Remember what happened with Sub-Prime loans? High Demand, High Supply, POOF- they’re gone! History always repeats itself, let’s just hope we’ve learned our lesson the first time, and we don’t screw up FHA.

So once again I am trying to offer some advice to pass on to the people on the fence- “What is available today as far as programs and rates may not even be available tomorrow and the sooner they can get pre-approved the sooner they can have a roadmap to become a homebuyer.

Bill Black CMP

Branch Manager- Vancouver Branch

Loan Network LLC

Mortgage Banker

Click here for Bills Blog

LinkedIn: Bill Black

Bills Blog

Homepath Homes- No Appraisals, No MI, 90% NOO!

360.326.8891 Office

360.910.3290 Mobile

360.326.1861 Fax

My core business is based upon trust and honesty with it’s clients; we feel that this is the most important component of any business relationship. We constantly measure our business processes to ensure that our clients receive the highest level of service possible.

Wa #520-CL-49546

The $8,000 tax credit cannot be used as down payment-

Out of these 3 buyers one was already pre-approved via an online lender at Quicken Home Loans but after our 20 minute phone consultation he was not told that his tax credit was not available as a down payment! I only hope the application taker “forgot” to ask where the down payment was coming from but this should have been apparent when his assets in the bank equaled less then 1% of his overall purchase price- so no 3.5% which is a red flag proving that we have no seasoned down.

So just to be clear- THE $8,000 TAX CREDIT IS NOT AVAILABLE FOR ANY PORTION OF THE 3.5% FHA REQUIRED DOWN PAYMENT.

What if I buy a duplex?

You can only get 10% of purchase price or $8,000 max. So a $70,000 house you would only earn $7,000 in credit. With a duplex you own half as an owner occupied and the other half as an investment so depending on the price makes all the difference- so a $160,000 duplex- half would be $80,000 and 10% of that is $8,000 so you get maximum credit. A duplex under $160,000 would only get 10% of half of the price.

Now to fully disclose I am not a CPA and certain things could affect this answer but if you ever have questions I refer all my accounting questions to the smartest CPA in the County- John Caughell CPA at 360-573-9800 or johnc@golden-cpas.com he is truly the best.

Timeline to qualify-

So as we go down one of the biggest unknowns to first time homebuyers we ask will the $8,000 be extended another six to 12 months? Could it be possible to have it increased? We have 14 weeks left for the $8,000 tax benefit with the buyers required to be fully closed by Nov. 30^th.^th and not just under contract. I have a feeling that short sale offers will see less activity as a result of this timeline and the fact that SO many of us have been burned by playing the hurry up & wait game while the servicing agents and banks fumble the ball and make up new rules as they go. That means funded and wired by Nov. 30

What is Happening Today-

The two biggest housing trade groups- the 1.2 million-member National Association of Realtors and the National Association of Home Builders- are spending the month mounting unusually intense grass-roots lobbying campaigns to make case for extending the credit, and maybe even expanding it. The effort is targeted first at the districts of members of the house of the two tax writing committees- House Ways and Means and Senate Finance- this is very strategic and could have been beneficial if we had that support for the HVCC issues we are now dealing with instead of a 1 page document that basically stated to suspend the HVCC until further review.

Economic “Ripple Effect”

According to Economists at National Association of Realtors 300,000-350,000 additional houses will be sold as a result of the tax credit. Each home is forecasted to contribute $63,000 in downstream “ripple effect” elsewhere in the economy, they say- sales of furnishings, appliances, lawnmowers, landscaping, renovation materials, plus moving expenses.

For those who know me understand that I always say “you always have to know where the information came from” so on this bullet point I realize the number seems high but having $8,000 of free money and buying a home at the bottom of the market seems to really make people feel better about spending. Accurate or not I feel it is a benefit that may be one of the only Obama plans that I have witnessed that worked without a flaw.

Path Forward

Bills are already pending in both houses to extend the credit for another year. Some have fantasized about the bill that Chris Dodd, D-Conn., and Chairman of the Senate Banking Committee is co-sponsoring with Georgia Republican Johnny Isakson that would raise the tax credit to $15,000! Meanwhile, both the Realtors and builders are pushing not only for extension but for the credit to cover ALL home purchases in 2010. I forecast some sort of an extension but I would caution spreading false hope and if we can capture the money for clients today that is soon-certain and positive they receive the $8,000 credit.

The MARKET

Pretty Good Day in the Market

Treasuries and mortgages rallied today; see-saw back and forth after the hammering treasuries and mortgages took on last Friday on the jump in existing home sales in July and the strong rally in equities. Today the stock market opened better following the 156 point jump in the DJIA Friday, but by mid-afternoon the equity markets rolled over and ended unchanged on the day.

Tomorrow Treasury will auction $49B of 2 yr notes, beginning three days of new issuances raising a total of $109B. Markets appear to be thinking demand for the new issuances will be strong as they have been for the past two months. Demand for US Treasury debt remains firm from indirect bidders (mainly foreign central banks). The 2 yr note usually does see good demand as it fits well with banks’ assets and liabilities. Banks are hoarding cash these days while telling the media there is little loan demand. Banks have the straight faced ability to paint the picture anyway they like. There is scant loan demand because banks will only lend to those borrowers that can get along without it.

We are currently 24 hours in UW

12 hours in Docs

12 hours in funding….. So let’s go have some fund!

Bill Black CMP

Branch Manager- Vancouver Branch

Loan Network LLC

Mortgage Banker

Click here for Bills Blog

LinkedIn: Bill Black

Bills Blog

Homepath Homes- No Appraisals, No MI, 90% NOO!

360.326.8891 Office

360.910.3290 Mobile

360.326.1861 Fax

My core business is based upon trust and honesty with it’s clients; we feel that this is the most important component of any business relationship. We constantly measure our business processes to ensure that our clients receive the highest level of service possible.

Wa #520-CL-49546

Market- S&P was beat up with the DOW closing down 186 points and mortgage rates rates improved slightly, we are floating over night on all locks. This is a short term deal I believe and will keep my eyes for a quick switch and rates in be steadily increasing.

Question of the day/week/month/year!

Will rates go up/down and if so when…?

Will Homeowners and Buyers Lose $45,000?

Federal Reserve officials met last week and issued a statement saying that their program to purchase $1.25 trillion of mortgage-backed securities will be winding down by the end of year. If you have been an avid reader of my blog we all know that the Fed is the single largest buyer of mortgage bonds in the market today. The way mortgage companies set their interest rates is by figuring out the price that Fannie Mae and Freddie Mac are willing to pay them for the mortgage.  Fannie and Freddie set their price by figuring out what investors on the bond market are willing to pay them for the Mortgage-Backed Securities (mortgage bonds) that they issue. When the Fed stops buying mortgage-backed securities, the demand for these bonds will be much less, and mortgage rates will go higher.

Since the Fed began purchasing mortgage bonds and intervening in the mortgage markets, interest rates on fixed rate mortgages have dropped a full percentage point below where they would be otherwise. Take out the Fed’s subsidy, and mortgage rates are likely to drift back up by at least one percent most analyst believe. A one percentage point increase in mortgage rates – from 5.25% to 6.25% – would cost an extra $127 per month and $45,730 in interest over the life of a $200,000 30 year mortgage. This is exactly what could happen in 2010 once the Fed stops buying mortgage bonds.

Fed officials have been signaling for some time that their unprecedented interventions in the mortgage markets may come to an end or even be reversed once the economy begins to improve. While I don’t believe the Fed will start selling mortgage bonds right away, I do believe that rates will start drifting higher in 2010 once the Fed stops purchasing mortgage bonds.  After all, it’s not every day that the Fed spends a whopping $1.25 trillion to subsidize mortgage rates. If you don’t remember what 1 Trillion dollars is be sure to check out What a Trillion is all about?

If you take out this enormous subsidy, and the average person with a $200,000 mortgage who refinances or buys a house stands to lose $45,000 over the life of their home loan and not to mention first time homebuyers tax credit of $8,000 as well.

That is why homeowners and buyers should really talk to their Certified Mortgage Planner and take advantage of this window of opportunity to refinance or buy a home while rates are artificially low.

With my innovative software we can educate our borrowers on the benefits of each situation as well as identify utilizing the “buydown” strategy to pay less interest over time and ultimately own the home free and clear sooner.

If you or someone you know are interested in our free “TOTAL COST ANALYSIS” report its only minutes away.

Bill Black CMP

Branch Manager- Vancouver Branch

Loan Network LLC

Mortgage Banker

360.326.8891 Office

360.910.3290 Mobile

360.326.1861 Fax

My core business is based upon trust and honesty with it’s clients; we feel that this is the most important component of any business relationship. We constantly measure our business processes to ensure that our clients receive the highest level of service possible.

Wa #520-CL-49546