URGENT - READ THIS - LOSING YOUR IDENTITY

URGENT - URGENT DANGEROUS - YOU WILL LOSE YOUR IDENTITY

NEVER, NEVER reply to such an e-mail I got today about "Account alert".

These people just want all your private information you have on your e-mail address and the moment you give them your password they will change it so you can never open your e-mail account more.

Furthermore they will write a letter to all your contacts asking for money.

Then they will send letters like this one here below from your e-mail address so they people will never been cut. NOBODY WILL HELP YOU. Just do NOT answer the e-mail. They will continue sending your e-mails but DO NOT answer them.

The e-mail looks like that:

Dear Account Owner,
This Email is from Microsoft Customer Care and we are sending it to every Email User Accounts Owner for safety. We are having congestions due to the anonymous registration of Hotmail accounts so we are shutting down some Hotmail accounts and your account was among those to be deleted. We are sending this email to you so that you can verify and let us know if you still want to use this account and if you are still interested please confirm your account by filling the space below.Your User name, password, date of birth and your country information would be needed to verify your account.Confirm your E-mail by filling out your Login Information below after clicking the reply button, or your account will be suspended within 48 hours for security reasons.
* User Name: .............................
* Password: ...............................
* Date of Birth: ..........................
* Country Or Territory: ..............
After following the instructions in the sheet, your account will not be interrupted and will continue as normal. Thanks for your attention to this request. We apologize for any inconveniences.
Sincerely,The Windows Live Hotmail Team.

PROJECT RUNWAY - FINAL - DISASTER

TERRIBLE FINAL!
WHAT HAPPENED HEIDI? You are the boss, you should have the final decision!
MONDO GUERRA IS THE TRUE WIINNER!

He is one of the BEST designers there have ever been in all the shows. A real artist will stand for his own work 100 pct. and NOT let anybody tell him what to do and then follow their ideas.

Think of all the big people there have been in the world! Painters, Musicians, Designers, Architects and so on. They would never have been what they are if they have not stood up for their own ideas and work!

And that is what Mondo Guerra did with his long dress at the show yesterday and that was what made 2 of the judges (Nina Garcia and Michael C) angry. Mondo did not listen to them and changed his clothes.

Mondo did great through the whole show. From the beginning his was on top of his design.

I can't believe what happened in that final. I am so disappointed and chocked to see how Nina Garcia and Kennet Cole acted. It was NOT flattering! And Heidi, you normally seem to be a strong woman and yesterday you showed another side.

I do not think I can follow this show anymore. It has been my favourite show of all. Maybe a change of judges will be a good thing!

MONDO, YOU ARE GREAT! Your tunics and the short set are wonderful. Not to mention all the other pieces of clothes. Where can I buy it?

Marianne L.

link

DOG FAIR in Santa Clarita this Sunday 10/10/10

Byline: Daily News

VALENCIA - Pet owners are invited to bring their four-legged friends to a free community fair Sunday in Old Orchard Park, Valencia, Santa Clarita.

The third annual Bow-Wows & Meows Pet Fair will celebrate pets, encourage animal awareness and promote pet adoptionPet adoption usually refers to the process of taking guardianship of and responsibility for a pet that a previous owner has abandoned or otherwise abdicated responsibility for.

Fairgoers can expect to see demonstrations, exhibits of pet supply vendors and entertainment. Besides all the animal booths and activities, the event will have great ``people food'' plus a balloon balloon, lighter-than-air craft without a propulsion system, lifted by inflation of one or more containers with a gas lighter than air or with heated air. During flight, altitude may be gained by discarding ballast (e.g. jump for kids).

An animal shelter is a facility that houses homeless, lost or abandoned animals; primarily a large variety of dogs and cats.
Workers will be on hand to show adoptable dogs, cats, puppies and kittens in need of loving homes. The annual event started as a way to increase public awareness of the plight of homeless pets, and at last year's fair 60 animals were adopted.

Low-cost vaccines and spaying-and-neutering referrals will be available. Pet owners can also renew their pet licenses on site.

Residents who would bring their dogs to the fair are invited to join the Fun Dog Show. Unlike serious dog show events seen on television, this one awards prizes for top dogs in silly categories, like largest or smallest dog, silly pet trick, mystery mutt and owner/pet look-alikes. There is a $10 registration fee for the dog show.

The main event of Sunday's fair is the finals of the World Cup Frisbee Dog Competition. Qualifying competition rounds are being held today at Canyon Country Park.

Have you ever wondered what your dog Spot is thinking? A pet psychic/animal communicator will be at the fair to provide some insight.

Bow-Wows & Meows is scheduled for 11 a.m. to 4 p.m. Sunday at Old Orchard Park, 25032Avenida Rotella, Valencia.

Marianne

New numbers for Notice of Defaults in CA

Notice of Defaults (NODs) recorded in August 2010 throughout California totaled 31,120. That is:

■a 17% increase from July 2010 (26,671); and
■a 16% decrease from August 2009 (37,061).

Notice of Trustee’s Sales (NOTS) recorded in August 2010 totaled 30,726, marking:

■a 3% increase from July 2010 (29,920); and
■a 10% decrease from August 2009 (34,224).

(Kelli Galippo)

Do you want to live in an attractive ZIP CODE, here you have them!

ATTRACTIVE ZIP-CODES with the most expensive houses:

1) 91008 - Duarte, CA
2) 94027 - Atherton, CA
3) 90274 - Rolling Hills, CA
4) 07620 - Alpine N.J.
5) 10014 - New York
6) 90210 - Beverly Hills, CA
7) 10065 - New York
8) 94920 - Belvedere, CA
9) 10012 - New York
10) 93108 - Santa Barbara, CA

Do not hesitate to call me if you want to buy a house in these areas.
Marianne Forbes.com

Do NOT trash your foreclosured house, you can be charged!

This is interesting. After having seen so many TRASHED foreclosured houses here and there somebody got finally so tired of it and made some felony charges against the owners.
See this notice from the Newspaper today:

San Diego
HOME DAMAGED: A San Diego police officer and his wife face felony charges after alledgedly trashing their foreclosed house in Riverside County.

R.C.A. and his wife E. have been charged with vandalizing and burglarizing the six-bedroom house in Murrieta, the Riverside Press-Enterprise reported.

The damage includes stones smashed off the facade, dye poured on the carpet, wiring torn out of the walls, uprooted trees thrown in the swimming pool and a missing garage door.
- Staff and Wire Services 10/3/2010 Daily News

Opening of the new Exhibition Hall - FREE TICKETS

I saw this advertisement today in LA times. Free tickets for the Opening of the new Exhibition Hall in LA. The new RESNICK PAVILION. Check this website http://www.lacma.org if you want to know more.
I got my two free tickets.
Marianne

Crimes in LA area and other information

LA Times has a front story today about the Crime in Your Neighborhood. They refer to their website http://www.latimes.com/crimela
Check it. out. This will tell about crimes but it can also give you a lot of other interesting information.
Marianne

$4000 in grants to first-time homebuyers in San Fernando and Santa Clarita Valley

Southland Regional Association of REALTORS® is currently offering grants to qualified first-time homebuyers who are Public Safety Responders, have a low to moderate income-level, and purchase a home within the San Fernando or Santa Clarita Valley. The amount of each grant will be $4,000 and will only be paid to qualified applicants after the close of escrow. Repayment of grant is not required.

NOTE: The grant application has recently been updated to reflect higher income limits for individual programs that do not already specify their own limits. Also, VA Home Loans are now acceptable as a financing option for homebuyers (income limits still apply).

M

Home Buyers - What are you Waiting for?

Right now there are NOT many buyers in the market ready to buy a property. Why not? Before May there were so many buyers that mostly all listings got multiple offers and the prices went up. I personally wrote up to 7 offers for some clients before their offers got accepted.
Then the tax credit disappeared and so did the buyers.
BUT.........
What are they waiting for?

A new tax credit? As far as I have heard there is no hope for more help in in that direction

Lower interest? The interest rate is incredible low but the rate looks
like that it is on its way up

Lower house prices? Some areas might go down more in price but if the interest
rate at the same time goes up the mortgage might be the same

More houses on the market?The inventory is quite big now. There are many houses for
sale. So don't let that be a hurdle.

Improving Local jobs? The Valley is emerging faster from recession and took a
much softer blow than the hardest-hit communities
nationwide or elsewhere in California.

Stocks up? Stocks went up 50% from their March 2009 low and various
commodities rising dramatically, some analysts believe that
leaves real estate as the only asset class still under
valued.

Multiple offers? Not many properties get multiple offers. Buyers have often
time to think about giving an offer.

Negotiation? Sellers are eager and willing to negotiate. That's true
whether it's tradiotional owners, bank-owned properties or
short-sales.

So my advice is, buyers get out and look for your new home! There are so many reasones to do it now.

If you want my help, you know, I will be there for you.

Marianne

GAS LINES, where are they?

If you are curious to know where the big Gas Pipelines are then go to this website:
http://www.npms.phmsa.dot.gov/
and press on "National Pipeline Mapping System". Then you can type in where you want to look.
I hope not you will find your house located on top of one!

Marianne

Walking Away from a Mortgage

I read an article yesterday in the magazine "kKiplinger's", Oct. 2010 about "Walking Away from a Mortgage" which might be interesting for you to know. It told about a man who decided he would not pay for his mortgage anymore as the value of his houses had gone down dramaticly. He lived in Florida.

Some 1.65 million homeowners received default notices in the first half of 2010, according to Realty Trac, an online marketplace of foreclosed properties. It's impossible to tell how many of those defaults were strategic, but one recent study from credit bureau Experian and Oliver Wyman, a consulting firm, estimates that fewer than one-fourth of homeowner defaults are discretionary.

Meanwhile, about 20% of mortgages, or roughly 15 million homeowners, are underwater -they owe more on their mortgages than their homes are worth - and are candidates for default, strategic or not.

Homeowners who can't keep up with payments can pursue a mortgage modification or, if that doesn't work, a short sale (selling their home for less than they owe on the mortgage with the lender's okay).

But some decides just not to do anything, just not pay their mortgages and live in their house as long as they can.

There are benefits to defaulting. While the bank pursues foreclosure, borrowers pay off other debts and save money as they live in their homes free.

In this case with the man in Florida, it took nearly a year after his last mortgage payment for his property to be auctioned off and then again it will take time before it is necessary for the homeowner to leave the house.

But walking away will make it harder to buy a home in the future. Under new rules, Fannie Mae, which backs loans from lenders, prohibits borrowers from receiving government-financed mortgages for at least seven years if they default when they can afford to pay. (You will have to wait three to five years after an involuntary foreclosure and two to four years after a short sale).

Defaulting also torpedoes your credit score - at least temporarily. You can expect a 100-150 point drop for the foreclosure and extra points subtracted for late payments.

A foreclosure can stay on your credit report for up to seven years. But if a default is your only blemish, then you might revive your credit score in as little as two years.

The man from Florida said that his fico score dropped 180 points.

Depending on where you live, banks can also pursue a deficiency judgment - that is, they can come after you for the difference if your house is sold in foreclosure for less than the loan amount. About one-third of states prohibit or limit banks' suing borrowers who walk away. These are know as non-recourse states. Unfortunately for this man in Florida, Florida isn't one of them so he had to make a settlement with the bank once his foreclosure was finished.
(part of the text is by Thomas M. Anderson) ML

FILM: TEMPLE GRANDIN - AUTISM was her challenge

FILM: TEMPLE GRANDIN - Autism was her challenge

Fantastic film. Anyone who has the slightest interst in AUTISM should see it. What a film and what an actress that can play her. Claire Danes should have an Oscar for that role!
Great film based on a true story. You will learn something!
See it!
Marianne

PROFESSIONAL INVESTORS FLIPPING HOUSES

I read in Los Angeles Times, 8/20/2010 about how professional investors now are flocking to the local courthouses in hope of getting a super deal at the public auctions.

"Hoping there are big profits to be made in the aftermath of California's housing collapse, the investors are looking for the business of buying foreclosed homes at distressed prices.

The investors, primarily private equity funds and groups of wealthy individuals, purchase the homes at public auctions, which are held daily on the steps of local courthouses. They refurbish the properties and try to sell them for quick profits.

Not long ago, the typical home flipper was an amateur tapping a home equity line or savings for an investment property. But professionals have rushed in, partly because of sparse investment opportunities elsewhere.

Now there is a swarm of new investors that is making a treacherous and labor-intensive business even tougher.

Investors must do their homework on dozens of homes for every one they buy. Legal and other impediments usually prevent them from going into homes prior to buying them, leaving no way to gauge repair costs. And despite being foreclosed on, the original owners often still live in the houses. That forces buyers to pay them to leave, a dynamic known as cash-for-keys.

The influx of new players is pushing up auction prices and squeezing profits. The average discount at auctions - the difference between a home's sale price and its actual value - is 21.6%, down from 28% in January 2009, according to Foreclosure Radar.

It is busy around the courthouse. A semicircle of people is crowded around the auctioneer. Most were clad in cargo shorts and flip-flops. A few sat in lawn chairs. But their laptops and cellphones, as well as the thousands of dollars' worth of cashier's checks they clutched, marked them as professional investors girding for battle.

Competition at the auctions is brutal. The daily auction ritual begins each morning when banks signal which homes they are likely to dispose of that day. That sets off an early-hours scramble as would-be buyers speed through suburban neighborhoods to investigate the homes.

There are many risks in the foreclosure business. People who have lost their house in foreclosure sometimes vent their anger by smashing walls, knocking over water heaters or ripping out toilets, some have even take the cabinetry out. A terrible crime like murders can also have happened in the house and such a one can be very difficult to sell for the investor."

And remember, mostly the investors have not had a possibility to see the houses inside!

(Partly taken from Los Angeles Times 8/20/2010 by Walter Hamilton/Alejandro Lazo)

Funny Videos-You Tube-about realtors

Hi,

See these films. They are funny, interesting and they have a lot of truth!

http://www.youtube.com/watch?v=WK_MErZfH0s&feature=related

http://www.youtube.com/watch?v=E2IjktYtwwo

Marianne

OLD DOGS - Funny Film - LAUGHTER is the best MEDICINE

Film: OLD DOGS with John Travolta and Williams.

This is so a funny film and I laughed laud many times. To laugh laud feels so good.
Read here what I read about "Laughter" in the book I read right now about Body Language:

"Why Laughter is the Best Medicine"
As with smiling, when laughter is incorporated as a permanent part of who you re, it attracts friends, improves health, and extends life. When we laugh, every organ in the body is affected in a positive way.

Our breathing quickens, which exercises the diaphragm, neck, stomach, face, and shoulders. Laughter increases the amount of oxygen in the blood, which not only helps healing and improves circulation, it also expands the blood vessels close to the skin's surface.

This is why people go red in the face when they laugh. It can also lower the heart rate, dilate the arteries, stimulate the appetite, and burn up calories.

Neurologist Henri Rubenstein found that one minute of solid laughter provides up to forty-five minutes of subsequent relaxation. Professor William Fry at Stanford University reported that one hundred laughts will give your body an aerobic workout equal to that of a ten-minute session on a rowing machine. Medically speaking, THIS IS WHY A DAMN GOOD ALUGHT IS DAMN GOOD FOR YOU."
(Body Language by Pease)

So see the film and LAUGH !

Marianne

Home prices rise in most cities

HOME PRICES RISE IN MOST CITIES

I found an article in the Signal today that says that Home Prices rise in Most Cities.
It says that:

"Home prices rose in nearly two-thirds of US cities this spring as buyers took advantage of tax incentives that gave the struggling housing market a temporary jolt.

The median sales price for previously occupied homes rose compared with last year in 100 out of 155 metropolitan areas tracked in the April-to-June quarter, the National Association of Realtors said Wednesday. That compares with 91 out of 152 cities in the January-to March quarter. Fourteen cities had double-digit price increases.

But the boost to the housing market in the second quarter faded shortly after tax credits expired at the end of April. Home sales fell in June and are expected to plunge further in July. Prices are expected to follow in the second half of the year.

The LOWEST mortgage rates in decades haven't been enough to energize buyers. Home loan applications were virtually flat last week, the Mortgage Bankers Association said Wednesday."

What do I feel? There are absolutely fewer buyers in the market, but time is really good for these buyers. They get an extremely low interest rate and they have better time to look around and get the house they want.

Marianne

Shall I use family/friend to sell/buy my house?

SHALL I USE ONE A FAMILY MEMBER OR A FRIEND TO HELP ME SELLING OR BUYING A PROPERTY?

This is not really an easy answer but if you are in such situation consider these arguments and see for yourself what is right for you.

Have a family member or friend helping me:

Positive: Could save you money in commission.
Negative: Could cost you money if he/she is not good enough, risk for serious troubles if anything goes wrong with the deal, no pressure on the agent (=family member/friend) as it normally would be without any close relationsship. Less professionalism.

"NEVER MIX MONEY / BUSINESS WITH FAMILY AND FRIENDS". It was what my grandpa (lawyer) tought my mom and she has taught me. There is a big risk that you will lose a friend and/or a family member over some money issues. It is not worth to do it.

Marianne

Texting - a NEW LANGUAGE?

Hi,

I have just learnt that young people (I think mostly between teen-agers or am I wrong?) have a kind of other language they use when they are texting. I know that I am far from young and my kids are not living home anymore so I am a kind of outdated in that aspect but WOW this is a kind of interesting.

Do you know what that means if you get it in a text message? WTWPY? I did not.
It means "What time we picking you up?"

You might know what LOL or BRB means, or maybe not either. It means LOL (laugh out loud) and BRB means (be right back).

This is an actual "alphabet lingo" that makes up this texting language.

It works one of two ways. One, they take the first letter of every word they want to say and rund them together ith no punctuation whatsoever.

Or two, they take out every vowel from each word and rund those vowel-less "word" combinations together, with spaces in between. It looks like this: B HM SN, MVS GT OT L8 for "Be home soon, movies got out late."

So here is some other short cuts you might need to learn:

ADDY - address
AML - all my love
NUM - number
AIGHT - alright
B4U - before you
B4N - bye for now
BC - because
BF - boyfriend
BFFTTE - best friends forever 'till the end
BON - believe it or not
BTW - be the way
BZ - buzy
C-P - sleepy
C-T city
C/S change of subject
CRAT - can't remember a thing
DA - the
DAT - that
DDSOS - different day same ol' stuff
DOOD - dude
F@F - face to face
FBOCD - Facebook obsessive compulsive disorder
FCOL - for crying out loud
G2G - got to go
GAS - got a second
GAWD - God
GF - girlfriend
GI - Goggle it
GN - goodnight
GRATZ - congratulations
GRRLS - girls
HAK - hugs and kisses
H/O hold please
HAR - hit and run
IDC - I don't care
IDK - I don't know
JK - just kidding
L8R - later
MSOCD - My Space obsessive compulsive disorder
RITE - right
SU - shut up
TM - them
TTYL - talk to you later
TY - thank you
UR- your
WASSUP - what's up?
W/E - whatever
WUT - what
YW - you're welcome

Isn't it interesting? WOW.

Marianne

Shall I buy a Short Sale?

SHALL I BUY A SHORT SALE?

That answer can be YES or NO. It depends on many things. I will try to explain
what a short sale is,
what you can expect and
what can happen if you give an offer on a short sale.

A short sale is when a homeowner of some reason wants/needs to sell his property and he owes more in the property than its market value.

The homeowner/listing agent will then ask the bank/banks to forgive this difference between the owed money and the selling price. The bank needs proof that there is a true hardship, it means that the homeowner might have lost his job, has a job transfer, got divorced or got ill with high medical costs or what else that has happened. It is not sure that the bank will forgive all that money but can demand the seller to pay back some of the money (promissory note).

To start a Short Sale procedure, the listing agent will have to have an OFFER from a buyer. As a short sale is a long, insecure process many buyers do not want to give an offer on such a property. Therefore the listing agent will need to put an attractive asking price on the property to get interested buyers.

The listing agent can put whatever price he/she wants on the property, of course with sellers acceptance. The listing agent needs an offer as soon as possible to start the whole process. It is NOT SURE that the bank will ever accept that price as it is THE BANK THAT DECIDES THE PRICE IN THE END.

The banks are interested in getting as much money as possible so they have often several appraisals on the property before they accept an offer from a buyer. A cash offer is not more attractive for them as a buyer with a normal loan, remember they WANT MONEY.

The homeowner also wants the highest price possible as the less difference between owed money and selling price means faster response and less risk for the homeowner to have to pay money back to the bank.

So when you, BUYER, sees a house for sale as a Short Sale you will have to know that


1) The price is not sure (mostly the price is too low for market value)
2) The bank is not willing just to sell the house for much lower price than value
3) The homeowner will have to accept an offer, can come with a counteroffer
4) Then the bank will have to accept the offer, that the seller accepted, will mostly
come with a counteroffer
5) The whole procedure will take time, expect min. 2 months to easily 4-5 months
before the buyer, (if the seller accepted his offer), will be accepted by the bank
or what kind of counteroffer the bank will give
6) Some problems can suddenly show up as:
leans on the property somebody has to pay for
unpaid HOA fees that have to be paid (who will pay for that?)
homeowner will declare bankruptcy and the sale will stop
7) Nobody is willing to pay for repairs in the house. House is sold AS-IS.
8) Nobody will pay for the Home Warranty (sometimes the banks accept to pay)
9) Sometimes the bank will pay up to 3% of buyer's closing costs
10)Sometimes the buyer will have to pay for the termite inspection and the repairs.
11)Sometimes the listing agent will open escrow with the accepted offer by the
seller even the bank has not agreed to sell the property yet.
12)Sometimes the buyer will need to give some extra private information as birth date
13)You will need to be patient. This here takes time but you can get a good price
house. We will still use the same purchase contract and the time frame and rights
are the same.

So the question was: "Shall I buy a Short Sale?" And the answer will be,

"Yes" , if you can wait these months and are aware of these risks that might be. To lower the risks, be sure you know what the comps (comparatives) are for your property and compare them with your offer. If it is a property with a HOA find out through your agent if the HOA is paid up to date. You can still look for other houses while you are waiting.

"No" if you hate to wait and is impatient or you have to buy right now. Look for a REO (Bank owned house) or a normal sale. You will get an answer within some days. Normally a REO will get a lot of offers. Expect to go up in price. Listing price for normal sales are often higher as you will get all kind of disclosures and knowledge about the property and safer as you can always come back to seller if something was not disclosed.

Short Sales are normally nice well-kept houses as people still live in the houses while REOs are often a kind of destroyed houses as they have not been taken care of for a long time and might have been empty for half a year or more. Recently many banks have painted, put new carpet and made some repairs in these houses before they come on the market.

Hopefully, this article can help to understand a short sale. Be free to contact me if you have more questions. I have tried to explain it as easy as possible.

Marianne Leopold
7/25/2010

EAT, PRAY, LOVE

Just finished the book Eat, Pray, Love by Elizabeth Gilbert. I can't wait to see the film. It should come up in 2 weeks. "Pretty woman", Julia Roberts, is the perfect one to play that role. I cannot imagine a better one.

After this film, all us women, we will love to do the same journey as she did, I guess. At least I want to go to India and Bali. (I have been around in Italy and it is a great country, too.)

Read that book and see the film and let me know!

Marianne

Can I get a LOAN MODIFICATION?

Home owners may qualify for a modification if the answer is "YES" to these five basic questions:

1) Is the home the primary residence?
2) Is the amount owe less than or equal to $729,750?
3) Is the homeowner having trouble paying the mortgage? In other words,
has the mortgage mayment increased recently,
has income dropped
are there other hardships, such as medical bills, that increased a
a hardship?
4) Was the current mortgage obtained prior to Jan. 1, 2009?
5) Is the payment on the first mortgage, including principal, interest, taxes,
insurance and homeowner's association dues if applicable more than 31 percent of
current gross income?

Information on how to get started and what assistance is currently available to refinance a loan or obtain a loan modification can be found online at

www.MakingHomeAffordable.gov

For example, the administration's website makes it easy to determine if a loan is owned by Fannie Mae or Freddie Mac, a key criteria of eligibility for refinancing assistance.

Mortgage servicers by Aug. 1 will offer borrowers a forbearance period to temporarily reduce to 31 percent of gross monthly income or suspend monthly mortgage payments while homeowners seek a job. Details of this new program are also available at the above mentioned website under the section titled "Help for the Unemployed".

Today's lower interest rates offer a unique chance to refiance loans, perhaps bringing a loan to a more affordable level, thus improving its long-term affordability and sustainability. To qualify for refinancing, the amount owed cannot exceed 125 percent of a property's current market value. Income must be fully documented, presenting pay stubs and tax returns, and the total loan amount cannot exceed $729,750.

The website mentioned leads eligible applicants through the procedure and provides required forms that must be completed to get started. If a servicer provides a trial payment period, the applicant must make all payments. If he fails to make a payment he is out.

Most importantly, if a final modification has not been approved, owners should continue to make monthly payments even if the trial period has ended.

Applicants must be truthful when asked to state income and debt. Don't hide anything. They will find out.

Applicant's who have excessive debt - owe more than 55 percent of gross income - are required to go counseling to get expenses under control.

If successful, a loan modification can bring the interest rate to as low as 2 percent or could possibly extend the term of the loan to 40 years, with the goal being to bring total payments lower than 31 percent of gross income. To achieve that, a portion of the principal can be deferred, interest free, until the loan is paid off.

Principal forgiveness is allowed, but not required. No more than 31 percent of market value can be deferred to make the loan more affordable to the borrower.

Be beware of scams that promise owners that they can obtain a loan modification from any lender. The Making Home Affordable program and approved debt counselors are free of charge to taxpayers. Payment of a fee does not guarantee success. Walk away if any make promises and want to collect a fee.

(rewritten article from Realtor Report, July 2010)

5 REAL ESTATE SCAMS YOU NEED TO KNOW ABOUT

5 Real Estate Scams You Need to Know About


Don't be duped by mortgage fraud. Here are a few common scams and the red flags you should look for in a transaction.
By Melissa Dittmann Tracey | August 2010


Mortgage fraud is pervasive: An estimated $4 billion to $6 billion in annual losses result from mortgage fraud, according to FBI reports. “An entire community can be damaged by mortgage fraud,” says Rachel Dollar, a lawyer from Santa Rosa, Calif., and editor of the Mortgage Fraud Blog. Mortgage fraud can lead to a spike in foreclosures, home values plummeting, and lenders raising their rates and fees to recover losses.



The crimes are often complex, involving several parties and occurring over multiple transactions. To protect you and your clients, educate yourself about mortgage fraud and be on guard for any warning signs in a transaction. You can start by reviewing these five scams, and then test your knowledge by taking our Mortgage Fraud Quiz.





1. The Foreclosure Rescue Scheme



The Scam: “Rescuers” promise cash-strapped home owners that they can save their home from foreclosure. The rescue, which involves paying upfront fees, can take multiple forms, such as the perpetrator obtaining a new loan on behalf of the owner or by having the owner sign over the home’s deed and then rent the home until they can repurchase it. Eventually, the home owner loses the home, either to foreclosure or the fictitious rescue company.



Red Flags: With foreclosure rescue programs, borrowers are often advised to sign over the title of their house to a third party, become renters of their home, not contact their lender, or send mortgage payments to a third party, according to Fannie Mae, which provides fact sheets on mortgage fraud.





2. Loan Documentation Fraud



The Scam: This fraud involves numerous schemes in which a borrower provides inaccurate financial information — such as about their income, assets, and liabilities — or employment status in order to qualify for a loan with lower rates and more favorable terms. Occupancy fraud is one growing area: Borrowers say they plan to live in the property when they actually intend to rent it.



Red Flags: Documentation may raise suspicion if the employer’s address is shown as a post office box, accumulation of assets compared to the person’s income appears too high or low, the new house is too small to accommodate occupants, the person has no credit history, or the application is unsigned or undated, according to Fannie Mae.





3. Appraisal Fraud



The Scam: A faulty appraisal — saying a property is worth more than what it really is — is connected to many types of mortgage fraud. It entails manipulating or overstating comparables, market values, or property characteristics in order to obtain a higher appraisal. The higher property appraisal, which generates false equity, is done by falsifying an appraisal document or using an appraiser accomplice to obtain the higher value.



Red Flags: Be skeptical of appraisals that are dated prior to the sales contract, list comparable sales that do not contain similarities to the property or are outside the neighborhood, the owner is not the seller listed on the contract or the title, or a third party participating in the transaction orders the appraisal, Freddie Mac warns.





4. Illegal Property Flipping



The Scam: This entails purchasing properties and reselling them at inflated prices. These scams usually involve faulty appraisals and inaccurate loan documents. The property is then refinanced or resold immediately after purchase for an inflated value. The home is purchased at a higher price, often by straw buyers working with the “flipper,” and eventually falls into foreclosure.



Red Flags: Some key things to look for are rapid refinancing of a property; the seller recently having acquired the title or acquiring the title concurrent with the transaction; an appraisal that comes in too high; a property that was recently in foreclosure being purchased at a much lower price than its sales price; or the owner listed on the appraisal and title not matching the seller on the sales contract, according to Fannie Mae.





5. Short Sales Schemes



The Scam: Borrowers owe more than the current value of their home so they fake financial hardship and no longer make their mortgage payments. An accomplice of the borrower then submits a low offer to purchase the property in a short sale agreement. The lender agrees to the short sale, unaware that it was premeditated. The property, after being purchased at the reduced price, is then often resold at the home’s actual value for profit.



Red Flags: The borrower suddenly defaults on the mortgage with no workout discussions with the lender, an immediate offer is made to a lender at a short sale price, the short sale offer is less than current market value, or a cash back is offered at closing to the delinquent borrower (disguised as “repairs” or other payouts, for example) and is not disclosed to the lender, according to Fannie Mae.

Stage your home before selling!

STAGE RIGHT
TAKE A BUYER’S POINT OF VIEW

Try to look at each home as a buyer would. That means looking at the room from the doorway and using that as a frame to show off the most appealing parts of the room. Many times, prospective buyers won’t venture beyond the doorway, so it’s important to entice them to enter the room. Take steps to make the room look as clean, neat and spacious as possible. Remove excess furniture and keep floors free of any stacks of clutter.

DECLUTTER
It sounds obvious but decluttering is the single biggest aspect of staging – and one that is free of charge. Every surface, including countertops in kitchens and bathrooms, should be as clear as possible. Stow toiletries under the sink, and pack up personal photographs so buyers don’t get distracted by looking at your pictures.
GET RID OF THE UGLY
If furniture, fixture and appliance colors or window treatments are outdated, threadbare or otherwise unappealing, consider replacing them with low-cost temporary fixes.

CLEAN
The home has to be super clean. “The Complete Idiot’s Guide to Staging Your Home to Sell” says that deep-cleaning carpets, upholstery and window treatments are important to both improve the home’s appearance and remove lingering odors.
LIGHTEN UP
Each room should be light and bright. Clean windows and tie curtains back to let the light shine into the room. Lighten dark colors on the walls with inexpensive paint in neutral, light colors like white, off-white or light taupe. Paint can also be used to cover worn or outdated cabinets. And some inexpensive new drawer pulls and cabinet handles from your local hardware or home supply store for a fresh new look for less than $30.

GO SHOPPING IN THE HOME
Sometimes it is a good idea to move items from one room to another. One room may be stuffed with furniture, while another room could benefit from a great piece that can be a focal point.

ACCESSORIZE
All-neutral rooms can be a bit boring, so have pillows and small accents like candles to cheer up the room. Green is a favorite, as it coordinates with most other colors without clashing.

LOOK FOR CURB APPEAL
The outside of the home is just as important as the inside. Clean up the yard. Trim hedges and weed flowerbeds. Remove dead plants. Repair cracks in cement or asphalt, and power wash driveways and sidewalks.

Most of these activities take some effort but most require very little money and often make a big difference when it comes to the length of time the home sits on the market. ML

12 TIPS to make your move simple and avoid the hassle

Here are 12 tips to make your move simple and avoid the hassle.

Choose a type of move: You have three basic choices: do-it-yourself, full service and a relatively new hybrid of the two. Going it alone is the cheapest alternative, costing the rental price of a truck, gasoline, packing materials and, perhaps, pizza and beer for friends you rope into helping. With full-service moves, moving within a state is charged by the hour, while moving across state lines is charged by weight and mileage.

With a hybrid move, a mover will drop off a large container at your home for you to pack. The mover will then load the container onto a truck, drive the belongings to your new location and drop off the container for you to unload. Because you’re doing the manual labor of packing and unpacking, it’s far less costly than a full-service move.

Hire a quality mover: If you hire help, get at least three price quotes and do your homework before selecting a mover. Seek recommendations by talking with family and friends, even your Facebook circle. Investigate a company’s reputation with the Better Business Bureau (bbb.org), Yelp.com and possibly the paid-membership site Angie’s List (angieslist.com). Check a company’s complaint history at the federal government site, ProtectYourMove.gov.

“People think a good reputation equals expensive, but that’s not true,” said Laura McHolm, co-founder of NorthStar Moving in Los Angeles. “You don’t get a good reputation by overcharging people.”

Look for two things when hiring a moving company: A full-service mover should visit your home in person, not give a quote over the phone or online, and should provide a written estimate, experts say.

Declutter: No matter what type of move you’re making, taking less stuff is cheaper and less hassle. Set up a staging area, perhaps in a garage, with various piles, such as throw out, recycle, donate and sell.

For many items, use the rule of thumb, ‘If you haven’t used it in a year, you probably don’t need it.’

Be flexible: Like airline fares, moving rates depend on when you book. The busiest time for movers, and thus the most expensive time for consumers, is summer weekends near the 15th and 30th of the month.

If you have time flexibility, ask what rates would be for different days or seasons. If you have extreme flexibility, ask about moving standby: waiting until the mover has extra space and needs to fill a truck.

Save on boxes: Buying new boxes from a moving company is the most expensive choice. To save some money on packing materials, ask if you can buy used boxes from your moving company.

Cheaper yet is finding free boxes, ideally from somebody who just moved. Ask your real estate agent to connect you with other clients who recently moved or look on Craigslist.org. Specialty boxes, such as wardrobe boxes, might be cheaper to purchase at a do-it-yourself moving store, such as U-Haul, than from your mover.

Save on packing materials: If you’re packing your belongings yourself, fill suitcases, laundry baskets and plastic containers with unbreakable items. Use pillows, scarves and towels to wrap fragile belongings.

Mail books: If you have a large collection of books, pack them yourself and ship them at the postal media mail rate as it might be cheaper than paying a mover—a 70-pound box would cost less than $30.

Consider consolidation: For long-distance moves, ask about consolidating your stuff on a truck with other people’s as most homeowners can’t fill a full-size moving van. You might have to be flexible on delivery dates and times, but consolidation can be cheaper.

Insure it: Check your homeowner’s or renter’s insurance policy to determine whether it provides coverage for your belongings while in transit. If not, you’ll probably want more than the basic free valuation coverage a full-service mover provides. The standard valuation is 60 cents per pound per item. That means breaking a 10-pound, $1,000 stereo system would net you $6. You’ll want full replacement-value insurance, which reimburses you what it will cost to replace broken items. But don’t necessarily buy that insurance from the moving company. Moving insurance is likely cheaper from a third party, but be aware that you probably cannot get insurance on boxes you packed yourself.

Be prepared: Plot out where furniture and boxes will go before moving day arrives. The less time movers spend rearranging, the less expensive it will be.

In urban areas, reserve a space or two in front of your new home for the moving truck by parking your own vehicle there ahead of time. If the movers have to park too far away to unload, you could incur a ‘long carry’ surcharge.

Stake your claim: If you’re moving for a job, negotiate the best relocation package you can. Unreimbursed expenses might be tax-deductible. For details, see Publication 521 Moving Expenses at IRS.gov.

Tip: Tipping each mover $3-$5 per hour is customary, said Stephen Coady, marketing manager for Gentle Giant Moving Co. in Somerville, Mass.

RETIREMENT LOCATIONS - most affordable

Most Affordable Popular Retirement Locations
The real estate downturn has turned some very popular retirement destinations into bargains.

To determine where the prices are most attractive, U.S. News & World Report examined price-to-income data for 384 metropolitan statistical areas. This expresses the relationship between owner income and home values.

Here are 10 retirement havens where homes are most affordable by this measure:

1. Bend, Ore.
2. Napa, Calif.
3. Fort Meyers, Fla.
4. Fayetteville, Ark.
5. Las Vegas
6. Sante Fe, N.M.
7. Punta Gorda, Fla.
8. Phoenix
9. Santa Cruz, Calif.
10. Burlington, Vt.

Source: U.S. News & World Report, Luke Mullins (07/08/2010)

Mortgage rates sink even loweer

DECLINING HOME EQUITY, TIGHTER STANDARDS ARE STOPPING BORROWERS.

Mortgage rates have sunk to the lowest level in mofre than five decades, but consumers aren't rushing to refinance their loans or buy homes.

Mortgage company Freddie Mac said the average rate for 30-year fixed lons sank to 4.58 percent this week.

Rates have fallen over the past two months. Investors wary of the European debt crisis and the stock market have shifted money into the safety of Treasury bonds, driving down yields.

Refinancing is generally considered worthwhile for homeowners who can shave at least three-quarters of a percentage point off the rates they pay now and plan to stay in their homes for a long time.

m

Top Car Colors

DO YOU WANT TO BLEND IN OR STAND OUT?

Here is DuPont's annual report on popular color choices for new cars.

According to the company, which produces paint for manufacturers, the top 10 car color choices are:

- Silver 25%
- Black 23%
- White 16%
- Gray 13%
- Blue 19%
- Red 8%
- Brown/Beige 4%
- Yellow/Gold 1%
- Others 1%

Mortgage rates lowest since 1971

Mortgage rates fell this week to the lowest level on records dating to 1971, giving consumers added incentive to lock in low payment for home purchases and refinanced loans.

The average rate for 30year fixed loans sank to 4.69 percent, from 4.75 percent last week, morgage company Freddie Mac said Thursday.

That's the lowest point since Freddie Mac began tracking rates in April 1971. The previous record of 4.71 percent was set in December. Rates for 15-year and five-year mortgages also hit lows.

Many Americans owe more on their mortgages than their homes are worth - often called 'under water' - and can't refinance. The Obama administration has launched programs to help borrowers refinance if they owe up to 25 percent more than their home's value and have loans owned or guaranteed by mortgage gians Freddie Mac or Fannie Mae.

About 291000 homeowners have participated as of March. Yet that's a small fraction of the nearly 15 million homeowners who are under water, according to Moody's Economycom and cannot refinance.

Despite some lenders' ads, refinancing is never free. A fee normally goes to the mortgage broker or lender. There are also fees for title insurance, a new appraisal, document processing and other charges. Often, mortgage brokers or lenders create the appearance of a 'no feee' mortgage by adding the costs to a total loan amount or by charging a higher interest rate.

Signal June 25, 2010

Realtor Diary - Monday

I feel it. There are fewer buyers in the market. What a pity that my new listing not came on the market one month ago. Then it would have sold right away.
Even with this fantastic low interest rate, I think coming buyers are waiting to see if the Government will give new tax returns. I hope they will.

As far as I know there are still some tax return money to get. Not the same ones but some returns over a 3 year period. It should be up to $15000 for a 3 year period. But there was just a certain amount of money to give out and they might soon be used.

Recently, I heard that half of that sum have been used. So fast buyers should still have a chance! If some of you are interested I will find out more exactly about this money.

Today I sent in an offer for my client, make arrangement for an offer, I will write later for another clients, made a lot of lead calls and went out with Newsletters/postcards.

Days go so fast unfortunately.

realtor diary - Sunday

Relaxed day today. Sent an offer ready to be signed by buyer and got some new very nice clients. Showed them houses and they are ready to make an offer though they first need to be preapproved. Don, my lender, will take care of them tomorrow.

Realtor Diary 6/18/2010

Got a new friend today. Great and she lives close by. She is also a realtor but works from another company. I visited her and she is awsome. Works hard and crazy like me. We are thinking of working together. She is also an "old" teacher like me.
From the beginning when I started I was told that I should not count of getting friends with realtors as they are my competitors. And truly, it has not been easy.

Otherwise, nothing special happened. Went out with my Newsletters and postcard. Met many "old" faces I know of and had many good talks.

realtor diary - 6/17/2010 - AGENT OF THE WEEK

Big Surprise. I was AGENT OF THE WEEK. I had 3 clients going into escrow and 1 new listing this week. Fantastic. But.... I will still not earn much as the deals are not expensive and some of them I have to give back referral fee. Still, I am happy.
I love to work with people and make them a good deal and get them what is really good for them.

Most of my days went with giving out Newsletters and a postcard for my new listing. I went to about 175 houses. Nearly 4 hours walk. I saw so many nice yards and talked with many friendly people. I love my job.

2 BPO's later one to be worked on. Taking photos of the properties, inspection them from outside and finding comps. Give me a fantastic feeling of the market prices.

Extra: Lonely dog in the night on my street with no collar. Had to take him with me as the coyotes would have taken him. My own dogs accepted him. Now I have to find the owner. He had no collar on.

Realtor Diary 6/16/2010

I will start my Realtor Diary today. What is going on every day.

Newspaper today: SoCal median house prices rise nearly 23 pct last month from May 2009 to top #300000 for the first time in 20 months. Dataquick also said home sales increased more than 7 pct. in May.

Short Sales: Experienced that one lender will not pay more than 1 pct back in closing cost on one of my short sale deals. Mostly they accept 3 pct.

Used 4 hours to go out in my farm area with Newsletter and card with my new listing.
Nice to talk to all the people I have learnt to know along the road and to all the new ones.

Evening: finding houses for my buyers, call clients and agents and prepare my day for tomorrow,

You need to act fast to get the federal tax credit

More information:

Buy now! The federal tax credit expires soon.


April 30, 2010 is rapidly approaching, and with it comes your final opportunity to take advantage of the Federal Homebuyer Tax Credit.* However, a new California Tax Credit goes into affect for buyers of new homes, and — for a very brief time — some buyers may be able to take advantage of both!

See if you qualify for the federal tax credit before it’s too late:
•First-time buyers can qualify for an $8,000 tax credit!

•Move-up buyers can qualify for a $6,500 tax credit as long as you have lived in your home for five consecutive years out of the past eight years

•Income limits have increased to $125,000 per individual and $225,000 per married couple

•Buyers must enter into contracts written on or before April 30, 2010 and will have until June 30, 2010 to close escrow

•For certain military personnel, the credit has been extended an additional 12 months


There’s no time to wait! Take advantage of these time-sensitive opportunities today.

New tax credit

Some new information:

Great News for California Homebuyers
$10,000 New Home and First-Time Buyer Tax Credits Available May 1

There’s good news for California home buyers who want to purchase a home this year, but are unable to get under contract before the April 30th deadline for the Federal Government’s $8,000 Homebuyer Tax Credit program. In late March, Governor Arnold Schwarzenegger signed legislation that will provide a state tax credit of up to $10,000 to Californians who are buying their first home or purchasing a brand new home.

Here are important details to know about this tax credit:

Dates: These tax credits are available for taxpayers who purchase a qualified principal residence on or after May 1, 2010, and before January 1, 2011. The purchase date is defined as the date escrow closes. The tax credit will be applied in equal amounts over three years.

For both the New Home Tax Credit and First-Time Buyer Credit: A qualified principal residence must:

Be a single family residence, either detached or attached;
Be eligible for the California property tax homeowner’s exemption, and
Be occupied by the taxpayer as their principal residence for a minimum of 2 years immediately following the purchase.
In addition, for buyers to be eligible for the New Home Tax Credit, sellers must certify that the property has never been occupied. For purposes of the First-Time Buyer Credit, a first-time buyer is any individual who has not owned a home in the three years prior to purchase.

Eligibility: Taxpayers will not be eligible for either tax credit if the taxpayer (1) was allowed a 2009 New Home Credit, (2) is under 18 years old, (3) is related to the seller (or if the taxpayer’s spouse is related), or (4) is a dependent.

This tax credit is available to buyers on a first-come, first-serve basis! The 2009 California Homebuyer Tax Credit ran out after just four months! For California residents planning to purchase a home in 2010, acting sooner rather than later could make a big difference in your wallet!

See this film: SEVEN POUNDS

Hi,
I saw a really good film the other day. I will strongly recommended to both women and men. It is called SEVEN POUNDS and I will not say anymore. See it. You will not know what it is about until the end!
Let me hear your opinion.
Marianne

New Tax Credit for homebuyers 4/2/2010

Homebuyers to Receive $10,000 Tax Credit in New Program
By Pasadena Independent
Published: Friday, April 2nd, 2010


By Bill Peters

Governor Arnold Schwarzenegger signed Assembly bill 183 designed to kick-start California real estate sales during the all important spring season when home sales get into high gear. Determined to encourage home ownership and at the same time promote job creation, the Governor signed the $200 million bill to provide new and first time homeowners with a tax credit that could reach as high as $10,000.


A previous program with a $100 million cap on the 2009 tax credit was successful, but the cap came before many interested homebuyers were able to take advantage of the government assistance program.


Assembly Bill 183, signed into law on March 25, applies to buyers of new homes and first-time homebuyers of existing homes with sales contracts signed between May 1, 2010 and December 31, 2010 and closing escrow no later than Aug. 1, 2011. With action that must be taken by both buyers and sellers, the new program will allow buyers to receive a tax credit of 5% of the home’s purchase price up to $10,000, spread equally over three consecutive tax years. To qualify, the homeowner must use the property as a principal residence for two years after the closing of escrow.


There is no income restriction in the new program, but buyers will need to reserve the tax credit in advance of the closing date to assure that funds remain in the program. Buyers and sellers will need to jointly sign and submit a notice that they have entered into a sales contract between May 1 and December 31, 2010 to the California Franchise Tax Board.

If approved, the buyer will be notified by the FTB and the buyer will then be required to finalize the credit deal by providing more information to the Tax Board to actually obtain the credit. The reserve provision in the new program is a new feature that was not present in the 2009 tax credit.

That program, which allowed a federal tax credit of $8,000 will expire on April 30, 2010. Assembly Bill 183’s provisions begin on the date following the old program, May 1.


The bill is a part of the Governor’s California Jobs Initiative which he proposed in the State of the State address in January. “I have been up and down the state pushing this important housing bill that will get people off the fence and into homes while creating jobs and stimulating our economy,” the Governor said.


While the bill is good news for homebuyers, it remains contentious in the budget deficit facing California this year. The hope is that the tax credit will encourage real estate sales in the state and create jobs that will end up as revenue for the state.

But with the huge deficit, and the need to support the homebuyer tax credit, the Governor also cut $1.1 billion from mass transit by diverting gasoline tax money to pay down the $20 billion shortfall.

It has been reported that $400 million will be retained for public transit expenditures-hard to believe, but with the support of transit agencies. They figured that this would be a better deal than the complete elimination of state funding that Governor Schwarzenegger had initially proposed.

NEW TAX CREDIT LAW

Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS®

Governor Signs Home Buyer Tax Credit Legislation Into Law


Governor Schwarzenegger today signed AB 183 providing $200 million for home buyer tax credits. The bill allocates $100 million for qualified first-time home buyers who purchase existing homes and $100 million for purchasers of new, or previously unoccupied, homes.

Eligible taxpayers who close escrow on qualified principal residences between May 1, 2010 and December, 31, 2010, or who close escrow on a qualified principal residence on and after December 31, 2010 and before August 1, 2011, pursuant to an enforceable contract executed on or before December 31, 2010, will be able to take the allowed tax credit.

This credit is equal to the lesser of 5 percent of the purchase price or $10,000, taken in equal installments overthree consecutive years.

Under the bill, purchasers will be required to live in the home as their principal residence for at least two years or forfeit the credit (i.e. repay it to the state).

Buyers also must be at least 18 years old and be unrelated to the seller. First-time buyers are defined as those who have not owned a home in the past three years.

To learn more about the California Home Buyer Tax Credit, go to: http://www.car.org/governmentaffairs/stategovernmentaffairs/homebuyertaxcredit/ March

GIBBON CONSERVATION CENTER

There are APES in Santa Clarita, believe it or not. They are located in the GIBBON CONSERVATION CENTER in Saugus.

The center was established in 1976 and it has the world's second largest gibbon population outside their countries of origin, and houses the rarest group of apes in the western hemisphere.

It has successfully reproduced 7 gibbon species.

Functions as an international consultant to zoos, museums, government agencies.

Has assisted gibbon rescue programs in Thailand, Taiwan, Vietnam and Indonesia.

The GOALS for the center is to help ensure the survival, preservation and propagation of all gibbon species in the wild and in captivity. To provide a captive haven for all gibbon species as a complement to protecting them in the wild. To educate the public and add to the knowledge of gibbons for the scientific community, rehabilation centers and zoos.

YOU CAN GET IN AND SEE THEM! For information on tours, contact us by email at gibboncenter@earthlink.net or call 661-296-2737 or see "Tours" page on this website at www.gibboncenter.org

Amazing!!!

What is the value of time?

I read this recently and loved it:



To realize the value of one year, ask a student who has failed the bar exam.

To realize the value of one month, ask a mother who has given birth to a premature baby.

To realize the value of one week, ask an editor of a weekly newspaper.

To realize the value of one hour, ask lovers who are waiting to meet.

To realize the value of one minute, ask the person who has missed a plane.

To realize the value of one second, ask a person who has survived an auto accident

To realize the value of one millisecond, ask the person who has won a silver Olympic medal.



When we are busy with our lives, time seems to fly. But elderly people sometimes tell me that as they have aged, time has seemed to slow down. To them, a month can feel like a year.



Paradoxically, the financial clock of the elderly can speed up dramatically. Their finances can be consumed very rapidly if they require long-term care.

LESSON: Enjoy every minut of your life


Marianne

FHA Makes Extensive Policy Changes to Address Default Risk

FHA Makes Extensive Policy Changes to Address Default Risk
by Carrie Bay 1/20/2010

The Federal Housing Administration (FHA) said Wednesday that it is raising homebuyers’ up-front costs for mortgage insurance, tripling down payment requirements for borrowers with low credit scores, and cutting seller concessions in half.

The agency says the new policies for its government-insured mortgages will help FHA better manage loan risk and losses. According to FHA’s latest monthly activity report, nearly 9 percent of the single-family mortgages it insures against default are at least 90 days past due. The record-high delinquency rate has sent the number of claims FHA has been forced to pay out skyrocketing and left its capital reserve fund depleted – falling below what’s required by law for the first time since the agency was formed.

The FHA currently backs about 30 percent of all new loans for home purchases and 20 percent of refinanced loans. The agency’s share of the mortgage financing market has increased nearly 1,000 percent (yes, that’s 1,000) since 2006, as private lenders pulled back and the credit crunch set in – it’s a position that FHA Commissioner David Stevens says can’t be carried on for the long-term. He insists it’s essential that the federal mortgage insurer’s portfolio eventually return to pre-crisis levels and back to its original credo of providing financing for homebuyers in underserved parts of the country.

But for now, Stevens said, “Striking the right balance between managing the FHA’s risk, continuing to provide access to underserved communities, and supporting the nation’s economic recovery is critically important.”
Stevens called the new policy changes “the most significant steps to address risk in the agency’s history.”

As part of the plan, FHA is increasing up-front mortgage insurance premiums paid by borrowers from 1.75 percent to 2.25 percent. The change will go into effect “in the spring,” the agency said.

Stevens has also requested legislative approval to raise the maximum annual premiums that FHA can charge. If this authority is granted by Congress, then the second step will be to shift some of the premium increase from up-front to the annual fees assessed. FHA says this shift will allow it to increase capital reserves with less impact to the consumer, because the annual premium is paid over the life of the loan instead of at the time of closing.

New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA’s 3.5 percent down payment program. Homebuyers with less than a 580 FICO score will be required to put down at least 10 percent. This change is expected to take effect early this summer.

Changes are being made on the seller side of the equation, as well. Beginning this summer, the amount that sellers can kick in – typically in the form of closing costs – will drop from 6 percent to 3 percent of the home’s value. FHA says the current level exposes the agency to excess risk by creating incentives to inflate appraised value, and the reduction will bring its criteria in line with industry standards on seller concessions.

In addition to the policy changes introduced, the mortgage insurer plans to beef up oversight of FHA lenders. Beginning February 1, lender performance rankings will be available to the public on HUD’s Web site.

FHA is also planning to implement statutory authority to enforce indemnification provisions for lenders that delegate their insuring processes, and is pursuing legislative authority to increase enforcement on FHA lenders. The authority would include requiring all approved mortgagees to assume liability for all the loans they originate and underwrite, as well as the ability to withdraw FHA approval for a lender nationwide if the performance of one of its regional branches is faulted.
Robert E. Story, Jr., chairman of the Mortgage Bankers Association (MBA), commented “MBA supports FHA’s efforts to root out those lenders who pose undue risk to the program. We will work with FHA to ensure those efforts include fair and thorough investigations and appropriate due process for lenders who could be impacted.”