Dear Mr. Rockey:
Thank you for writing regarding the U.S. economy and economic stimulus legislation. Your correspondence is important to me, and I welcome the opportunity to respond.
On February 13, 2008, the President signed the Economic Stimulus Act of 2008 into law. This legislation provides a maximum $600 tax rebate to individuals and $1,200 rebate to couples, including seniors on fixed incomes and disabled veterans. An additional $300 rebate is also provided for each dependent child. Eligibility for these rebates is phased out for individuals with 2007 adjusted gross incomes over $75,000 and couples over $150,000.
The bill also provides tax incentives for small businesses and increases limits on government-backed home loans, so more Californians can buy homes or refinance at lower rates. Specifically, the bill increases the Federal Housing Administration loan limit to $729,750 and temporarily increases the Fannie Mae and Freddie Mac conforming loan limits to $729,750. While, regretfully, the legislation does not include extended unemployment benefits or energy efficiency tax incentives, I am hopeful it will provide targeted relief to struggling American families, while contributing to economic growth.
In order to receive a stimulus rebate, individuals must have a valid Social Security number and file a 2007 tax return. For more detailed information about the stimulus rebate and filing the necessary 2007 tax return, please visit the "Rebate Questions" page accessible from the Internal Revenue Service homepage at http://www.irs.gov.
Again, thank you for writing. If you have any further questions or comments, please do not hesitate to contact my Washington, D.C. office at (202) 224-3841. Best regards.
Sincerely yours,
Dianne Feinstein
United States
Monday, February 25, 2008
Wednesday, February 20, 2008
Let's Make one Thing Perfectly Clear... Your Mortgage
We have seen a whirlwind of legislative activity these past few weeks! There is much confusion surrounding the recently passed Economic Stimulus Package and higher loan limits. Unfortunately, the new law can be confusing to decipher, and not everyone will benefit. For this reason, I have provided an outline below that clarifies what this new law means for you and how you can benefit from the higher loan limits.
Description and Overview:
An economic stimulus package just passed Congress on February 7, 2008 and was signed into law by the President on February 13, 2008. This new law is effective immediately and includes a temporary increase in both the FHA and conforming loan limits to as high as $729,750 in high cost areas. This means that the interest rates on many mortgages will go down because these loans are now eligible to be purchased by Fannie Mae and Freddie Mac or insured by the Federal Housing Administration (FHA). Previously, the FHA was only allowed to insure loans with balances lower than $200,160 - $362,790, depending on the county where the property was located. Also, Fannie Mae and Freddie Mac were only allowed to purchase loans with balances at or below $417,000. This resulted in limited options and higher financing costs for those with loan balances above these limits. The new law substantially increases these limits in high cost areas and opens up new options and lower financing costs for many people.
How to Determine "High Cost" Areas
There are two things you must know in order to determine if you are in a high cost area:
1. Understanding the Formula
If 125% of the local area median home price exceeds $417,000, the temporary loan limit would be that 125% of the median home price with a cap of $729,750. Here are three examples to illustrate this concept:
If the median home price in your area is $225,000, 125% of that number is $281,250. This is below the current $417k conforming loan limit. Therefore, the conforming loan limit in your area will not change. However, if $281,250 is greater than the FHA limit in your county, your FHA limit will go up to $281,250.
If the median home price in your area is $375,000, 125% of that number is$468,750. This is above the current $417k conforming loan limit. Therefore, the conforming loan limit in your area WILL change and go up to $468,750. This number is also higher than the highest FHA loan limits, so therefore your FHA loan limit will also go up to $468,750.
If the median home price in your area is $650,000, 125% of that number is $812,500. This number is greater than the maximum cap of $729,250. Therefore, the conforming loan limit in your area will increase to highest allowable amount under this new law which is $729,250.
2. Determining the Median Home Price in Your Area
The Secretary of Housing and Urban Development (HUD) will publish the median house prices within 30 days of the bill going into effect (30 days from February 13, 2008). HUD does not have any interim stats or information for us to use. However, the bill also states that HUD can use any commercially available data if they are unable to compile the information on their own within the 30 day timeframe. With that in mind, it is likely that HUD’s numbers will be relatively consistent with the data published by the National Association of Realtors (NAR), which already has a solid track record of tracking and publishing this information on a quarterly basis.
Therefore, until HUD actually publishes their version of the median home prices, the most accurate way to get this information today is to utilize the data that is published by NAR. Ironically, NAR just released their latest median home price update for the 4th quarter of 2007 on February 14, 2008! Contact me today and I’ll research your info and let you know exactly what the median home price is in your area and how you can benefit from this information.
What do all the dates mean?
There is some confusion because the bill has a provision that says the higher limits are only effective for loans originated between July 1, 2007 and December 31, 2008. In short, the reason it is effective beginning July 1, 2007, is because the credit crisis started to unfold in July and August of 2007. Mortgage market conditions rapidly deteriorated almost overnight. Many secondary market investors suddenly refused to purchase loans that couldn’t be sold to Fannie Mae and Freddie Mac. (For more info on how this process works, please see the article entitled Saga of the US Mortgage Industry.)
Unfortunately, many mortgage banks had already funded these loans in their own portfolio or through their warehouse lines of credit. Their intention was obviously to sell these loans on the secondary market after the loans were funded. However, the credit crisis prevented them from doing so, and they were stuck holding these loans in their portfolio. The July 1, 2007 date in the bill is designed to allow these lenders to unload these mortgages and sell them on the secondary market to Fannie Mae and Freddie Mac.
However, the July 1, 2007 date has no bearing whatsoever on new refinance transactions! In other words, it doesn’t matter when the loan you are refinancing was originated. The old loan could have been originated in 2005, 2006 or anytime before or after July 1, 2007 and it would have no effect whatsoever on your current purchase or refinance transaction. If you are taking out a new loan today, whether it is a purchase or refinance transaction, that loan is subject to the new limits set forth in the bill.
The other date of December 31, 2008 means that the old limits will go back into effect after this year. In other words, now is the perfect time to buy a new home or refinance your mortgage because after this year, your costs will be higher and your options more limited again. We then need to consider lobbying Congress to extend the limits beyond 2008
When does this all go into effect?
February 13, 2008 – immediately upon the President’s signature. Therefore, HUD is obligated to publish the median home prices within 30 days of that date. However, Fannie Mae, Freddie Mac, and various wholesale lenders may have different policies as to how these new loans are going to be priced and underwritten. That is why it is imperative that you work with a Certified Mortgage Planning Specialist who is committed, qualified and equipped to give you timely information and expert guidance every step of the way. Contact me today for a complimentary consultation. I can look up the median home price in your area and see whether you can save money in any way. Also, please pass along this update to anyone you know who may be able to benefit, and I’d also be happy to look up the median home price in their area and discuss with them whether they could save money.
I know, yes, I had to throw that in.
-Christopher Rockey
rockey_finance@yahoo.com
Description and Overview:
An economic stimulus package just passed Congress on February 7, 2008 and was signed into law by the President on February 13, 2008. This new law is effective immediately and includes a temporary increase in both the FHA and conforming loan limits to as high as $729,750 in high cost areas. This means that the interest rates on many mortgages will go down because these loans are now eligible to be purchased by Fannie Mae and Freddie Mac or insured by the Federal Housing Administration (FHA). Previously, the FHA was only allowed to insure loans with balances lower than $200,160 - $362,790, depending on the county where the property was located. Also, Fannie Mae and Freddie Mac were only allowed to purchase loans with balances at or below $417,000. This resulted in limited options and higher financing costs for those with loan balances above these limits. The new law substantially increases these limits in high cost areas and opens up new options and lower financing costs for many people.
How to Determine "High Cost" Areas
There are two things you must know in order to determine if you are in a high cost area:
1. Understanding the Formula
If 125% of the local area median home price exceeds $417,000, the temporary loan limit would be that 125% of the median home price with a cap of $729,750. Here are three examples to illustrate this concept:
If the median home price in your area is $225,000, 125% of that number is $281,250. This is below the current $417k conforming loan limit. Therefore, the conforming loan limit in your area will not change. However, if $281,250 is greater than the FHA limit in your county, your FHA limit will go up to $281,250.
If the median home price in your area is $375,000, 125% of that number is$468,750. This is above the current $417k conforming loan limit. Therefore, the conforming loan limit in your area WILL change and go up to $468,750. This number is also higher than the highest FHA loan limits, so therefore your FHA loan limit will also go up to $468,750.
If the median home price in your area is $650,000, 125% of that number is $812,500. This number is greater than the maximum cap of $729,250. Therefore, the conforming loan limit in your area will increase to highest allowable amount under this new law which is $729,250.
2. Determining the Median Home Price in Your Area
The Secretary of Housing and Urban Development (HUD) will publish the median house prices within 30 days of the bill going into effect (30 days from February 13, 2008). HUD does not have any interim stats or information for us to use. However, the bill also states that HUD can use any commercially available data if they are unable to compile the information on their own within the 30 day timeframe. With that in mind, it is likely that HUD’s numbers will be relatively consistent with the data published by the National Association of Realtors (NAR), which already has a solid track record of tracking and publishing this information on a quarterly basis.
Therefore, until HUD actually publishes their version of the median home prices, the most accurate way to get this information today is to utilize the data that is published by NAR. Ironically, NAR just released their latest median home price update for the 4th quarter of 2007 on February 14, 2008! Contact me today and I’ll research your info and let you know exactly what the median home price is in your area and how you can benefit from this information.
What do all the dates mean?
There is some confusion because the bill has a provision that says the higher limits are only effective for loans originated between July 1, 2007 and December 31, 2008. In short, the reason it is effective beginning July 1, 2007, is because the credit crisis started to unfold in July and August of 2007. Mortgage market conditions rapidly deteriorated almost overnight. Many secondary market investors suddenly refused to purchase loans that couldn’t be sold to Fannie Mae and Freddie Mac. (For more info on how this process works, please see the article entitled Saga of the US Mortgage Industry.)
Unfortunately, many mortgage banks had already funded these loans in their own portfolio or through their warehouse lines of credit. Their intention was obviously to sell these loans on the secondary market after the loans were funded. However, the credit crisis prevented them from doing so, and they were stuck holding these loans in their portfolio. The July 1, 2007 date in the bill is designed to allow these lenders to unload these mortgages and sell them on the secondary market to Fannie Mae and Freddie Mac.
However, the July 1, 2007 date has no bearing whatsoever on new refinance transactions! In other words, it doesn’t matter when the loan you are refinancing was originated. The old loan could have been originated in 2005, 2006 or anytime before or after July 1, 2007 and it would have no effect whatsoever on your current purchase or refinance transaction. If you are taking out a new loan today, whether it is a purchase or refinance transaction, that loan is subject to the new limits set forth in the bill.
The other date of December 31, 2008 means that the old limits will go back into effect after this year. In other words, now is the perfect time to buy a new home or refinance your mortgage because after this year, your costs will be higher and your options more limited again. We then need to consider lobbying Congress to extend the limits beyond 2008
When does this all go into effect?
February 13, 2008 – immediately upon the President’s signature. Therefore, HUD is obligated to publish the median home prices within 30 days of that date. However, Fannie Mae, Freddie Mac, and various wholesale lenders may have different policies as to how these new loans are going to be priced and underwritten. That is why it is imperative that you work with a Certified Mortgage Planning Specialist who is committed, qualified and equipped to give you timely information and expert guidance every step of the way. Contact me today for a complimentary consultation. I can look up the median home price in your area and see whether you can save money in any way. Also, please pass along this update to anyone you know who may be able to benefit, and I’d also be happy to look up the median home price in their area and discuss with them whether they could save money.
I know, yes, I had to throw that in.
-Christopher Rockey
rockey_finance@yahoo.com
Monday, February 11, 2008
Do you need to Short Sale Your Home? Or Your Client?
Guide To Help with a Short Sale Prequal
What You Need To Know
When you receive a call from a potential Short Sale client it is critical that you establish, as early as possible, that the client is a legitimate Short Sale candidate. Below, is a list of the information you must have to determine if the caller is someone for whom a Short Sale is appropriate. Keep in mind, you are not just qualifying them financially, but also for cooperation. You need a client who is willing to do their part, or no deal:
You Need -
The Property address
Is it Owner occupied or held for investment?
Occupied or vacant
Information on all those who are on the loan – and only those who are on the loan.
Determine the willingness of ALL those on the loan to cooperate
Gross monthly income for those on the loan
The Mortgage information on all loans
Who is the lender(s)?
What is the balance(s)?
Are the loans current or delinquent? if delinquent
*when was the last payment made?
*has an NOD been filed?
*has a NOT been published?
What is the payment for each mortgage?
*If pick-a-pay, get the amount required to cover all interest
Are the mortgages “purchase money” or not?
What is the hardship?
What has changed so that they can no longer afford their mortgage?
Note: Most times it is a loan product problem. If so, look at the numbers.
Things to look keep in mind:
1) Calculate their front end debt ratio (housing expense divided by gross income – for borrowers only. Rule of thumb – if the ratio is below 35%, the problem is not their mortgage.
2) If they are too far into the Foreclosure process, you may not have enough time to help.
3) Trust you’re your gut. If it doesn’t pass the “smell test”, don’t take the deal.
4) If the 2nd is non-purchase money, the client will likely need to make a contribution towards the loss. Prepare the client for the contribution. The client should be able to save money by not making the mortgage payment – that should more than cover a $3,000-$5,000 contribution towards the 2nd.
Last, run a "Statement Of Identity."
Fidelity National Title and Chicago National Title have the easiest system in place to run the property ID. Contact an office near you or, contact me so I can do that
for you.
-Christopher Rockey
rockey@mresolution.com
What You Need To Know
When you receive a call from a potential Short Sale client it is critical that you establish, as early as possible, that the client is a legitimate Short Sale candidate. Below, is a list of the information you must have to determine if the caller is someone for whom a Short Sale is appropriate. Keep in mind, you are not just qualifying them financially, but also for cooperation. You need a client who is willing to do their part, or no deal:
You Need -
The Property address
Is it Owner occupied or held for investment?
Occupied or vacant
Information on all those who are on the loan – and only those who are on the loan.
Determine the willingness of ALL those on the loan to cooperate
Gross monthly income for those on the loan
The Mortgage information on all loans
Who is the lender(s)?
What is the balance(s)?
Are the loans current or delinquent? if delinquent
*when was the last payment made?
*has an NOD been filed?
*has a NOT been published?
What is the payment for each mortgage?
*If pick-a-pay, get the amount required to cover all interest
Are the mortgages “purchase money” or not?
What is the hardship?
What has changed so that they can no longer afford their mortgage?
Note: Most times it is a loan product problem. If so, look at the numbers.
Things to look keep in mind:
1) Calculate their front end debt ratio (housing expense divided by gross income – for borrowers only. Rule of thumb – if the ratio is below 35%, the problem is not their mortgage.
2) If they are too far into the Foreclosure process, you may not have enough time to help.
3) Trust you’re your gut. If it doesn’t pass the “smell test”, don’t take the deal.
4) If the 2nd is non-purchase money, the client will likely need to make a contribution towards the loss. Prepare the client for the contribution. The client should be able to save money by not making the mortgage payment – that should more than cover a $3,000-$5,000 contribution towards the 2nd.
Last, run a "Statement Of Identity."
Fidelity National Title and Chicago National Title have the easiest system in place to run the property ID. Contact an office near you or, contact me so I can do that
for you.
-Christopher Rockey
rockey@mresolution.com
Friday, February 8, 2008
Why Is This So Hard to Understand??
Am I the only person that has an understanding of the current economy?
I had a client (Idiot) call me last night saying his daughter is ready
to buy a house now. Great Jim are you helping her with her down payment?
No, she wants the same loan we have...
Wait a minute here Jim, You have the worlds shittiest loan. You called me last
month saying you don't know how your gonna make your payments when your loan
adjusts and what shoud you do? Now your calling me saying you want your daughter
in a 100%, stated income, interest only loan? He went on to explain that
now is a great time to buy because interest rates so low. My response:
Your right Jim they are low, very low.
But do you not understand those loan programs are completly gone?
They are gone because they suck so bad and everyone is defaulting.
Now you want me to put your daughter in that same Fu--ed situation your in.
I am tempted just because she is a relative of yours and probably doesn't
have the credit to buy a chicken wing.
My point is, anyone asking for 100% stated 2/28 or 3/37 needs to have there heads
bounced off the sidewalk.
Next, lenders, what the hell are you thinking? You made all these loan programs and
now your making me look like the bad guy? Let me guess, your going to position yourself to come out of this in a year or two open your retail doors and say "We never supported small brokers in funding those loans. Trust us."
How about trust me when I tell you your heads are all up your asses.
Your customer service sucks. Your rate locking is a ploy. Your credit worthiness
should be heavily scrutenized and somone from each credit bureau should make a public statement apologizing for making this world a worse place.
So stop allowing consumer scams. It's the lenders who are responsible for the personality of every slimy filthy used car sales men or dirt bag mortgage prick
that has convinced the consumer to take the wrong route.
Interest rates are low? So what, good luck dealing with all the bull shit
of getting a loan which more than likely you don't qualify for anymore!
-Christopher Rockey
I had a client (Idiot) call me last night saying his daughter is ready
to buy a house now. Great Jim are you helping her with her down payment?
No, she wants the same loan we have...
Wait a minute here Jim, You have the worlds shittiest loan. You called me last
month saying you don't know how your gonna make your payments when your loan
adjusts and what shoud you do? Now your calling me saying you want your daughter
in a 100%, stated income, interest only loan? He went on to explain that
now is a great time to buy because interest rates so low. My response:
Your right Jim they are low, very low.
But do you not understand those loan programs are completly gone?
They are gone because they suck so bad and everyone is defaulting.
Now you want me to put your daughter in that same Fu--ed situation your in.
I am tempted just because she is a relative of yours and probably doesn't
have the credit to buy a chicken wing.
My point is, anyone asking for 100% stated 2/28 or 3/37 needs to have there heads
bounced off the sidewalk.
Next, lenders, what the hell are you thinking? You made all these loan programs and
now your making me look like the bad guy? Let me guess, your going to position yourself to come out of this in a year or two open your retail doors and say "We never supported small brokers in funding those loans. Trust us."
How about trust me when I tell you your heads are all up your asses.
Your customer service sucks. Your rate locking is a ploy. Your credit worthiness
should be heavily scrutenized and somone from each credit bureau should make a public statement apologizing for making this world a worse place.
So stop allowing consumer scams. It's the lenders who are responsible for the personality of every slimy filthy used car sales men or dirt bag mortgage prick
that has convinced the consumer to take the wrong route.
Interest rates are low? So what, good luck dealing with all the bull shit
of getting a loan which more than likely you don't qualify for anymore!
-Christopher Rockey
Wednesday, February 6, 2008
Lenders Just Not Doing There Job
With so many defaulted loans they are not being able to keep up and it's
becoming chaos in every aspect.
Borrowers are walking away from there homes as a badge of courage. Lenders
are giving out REO business to the first Realtor to reply to an email. Loss
Mitigation cannot hire enough new suckers (People) to do the job. BPO business
has completly gone corrupt. Lenders padding there bottom line losses so they
don't even record N.O.D. or N.O.T. Working out a loan modification is like
pulling teeth. Customer service is still not the right people to talk to.
Collections departments basically check there conscience in at the door when
they get to work every morning.
Now, all this being said, you expect your client to be hopeful and helping.
Well, in order to complete a Short sale transaction, they better. You must
prequalify your clients for commitment. Without it, your spinning your wheels
and wasting your time.
As far as Loss Mitigation goes, they get lied to by Realtors all day "My deal is better than Foreclosure." They here that shit all day do you think they even believe
you. Can't prove your hardship? Probably not that hard then sorry, bottom of the pile.
My point is, for a full time Realtor working anywhere in the Central Valley of
California or East less any really desireable areas, will be dealing with Loss
Mitigation for a long, long time.
Good luck...
-Christopher Rockey
becoming chaos in every aspect.
Borrowers are walking away from there homes as a badge of courage. Lenders
are giving out REO business to the first Realtor to reply to an email. Loss
Mitigation cannot hire enough new suckers (People) to do the job. BPO business
has completly gone corrupt. Lenders padding there bottom line losses so they
don't even record N.O.D. or N.O.T. Working out a loan modification is like
pulling teeth. Customer service is still not the right people to talk to.
Collections departments basically check there conscience in at the door when
they get to work every morning.
Now, all this being said, you expect your client to be hopeful and helping.
Well, in order to complete a Short sale transaction, they better. You must
prequalify your clients for commitment. Without it, your spinning your wheels
and wasting your time.
As far as Loss Mitigation goes, they get lied to by Realtors all day "My deal is better than Foreclosure." They here that shit all day do you think they even believe
you. Can't prove your hardship? Probably not that hard then sorry, bottom of the pile.
My point is, for a full time Realtor working anywhere in the Central Valley of
California or East less any really desireable areas, will be dealing with Loss
Mitigation for a long, long time.
Good luck...
-Christopher Rockey
Tuesday, February 5, 2008
Quick Lender Tips
I am asked every day "What Is Loss Mitigation thinking" very simpl,
They're not! Loss Mitigation reps. have sometimes over 200 files on there
desks do you really think they even have the time to give a shit about your file.
Why do you think it takes 6 weeks to get an approval?
You can sing til your Blue in the face but the truth is, they are in charge.
The process cannot be completed with out them and they know it.
Try being nice for a change, ask your Loss Mit. rep. "How do I work with you."
"What do you expect of me to make this an easier process."
Let's be honest, Loss Mit. hates us, why? What is the biggest line item on your
HUD? Your commission, they think it's all going to you and that one deal represents
more than six months of there salary.
-Christopher Rockey
They're not! Loss Mitigation reps. have sometimes over 200 files on there
desks do you really think they even have the time to give a shit about your file.
Why do you think it takes 6 weeks to get an approval?
You can sing til your Blue in the face but the truth is, they are in charge.
The process cannot be completed with out them and they know it.
Try being nice for a change, ask your Loss Mit. rep. "How do I work with you."
"What do you expect of me to make this an easier process."
Let's be honest, Loss Mit. hates us, why? What is the biggest line item on your
HUD? Your commission, they think it's all going to you and that one deal represents
more than six months of there salary.
-Christopher Rockey
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