As a growing number of jobless Americans default on their mortgages, the Obama administration is considering new ways to help them avoid foreclosure.
Among the options being floated are giving the unemployed money, in the form of grants or loans, to cover their mortgage payments or allowing them to remain in their homes as renters after foreclosure.
The plans remain in the formative stage and are likely to encounter resistance in Congress.
Odd? Congress resisting to more spending for people that aren't good enough at what
they do to stay employed? Why don't we just pay all their bills? You know if we
pay these peoples car payments they would have a better chance finding a new job. Also, so many employers are running credit on new hires we wouldn't want them to fall behind on there outside mortgage consumer debt so we should make these peoples credit card payments as well. So we pay the mortgage, the car payment, the credit card bills. this is the life do whatever we want with no accountability!! I you cannot hear the sarcasm in my writing please go back to third grade!
-Christopher Rockey
Saturday, July 25, 2009
Friday, July 24, 2009
PSC in Van Nuys
I will be flying out Sunday night to Burbank, staying at the Airtel Plaza hotel where the PSC course is being taught. I will then fly to Sacramento to do the PSC course in Rocklin on Wednesday and Thursday. I will keep you all informed on the success. As of now Jacob Swodek the Van Nuys instructor is going to fly to Sacramento with me to attend PSC in Rocklin taught by Scott Thompson.
-Christopher Rockey
-Christopher Rockey
Yield Spread on the Chopping Block AGAIN
A lot of consumers don't have any idea of how or what Yield Spread Premium (YSP) is I have discussed it in the past at my 'Soapbox' views are rather unpopular amongst my Mortgage Broker colleagues. In a nutshell YSP is a tool lenders offer brokers to make loans more marketable in the secondary market. That's a very nice way of saying, your broker is able to jack up your interest rate and the lender pays the broker a premium depending on how much the interest rate is jacked up. Therefore a consumer never truly gets the interest rate they deserve unless points are paid to 'Buy Down' an interest rate that didn't need buying down. To be fair, we live in a capitalist society and making money is an opportunity that every US citizen has the right to do. With the proper disclosures I believer there is nothing wrong with minimal YSP as long as it is properly disclosed.
The Federal Reserve Board Thursday recommended new disclosure rules for homeowners and compensation guidelines for mortgage brokers to correct some abuses of the recent runaway housing market.
Prospective borrowers would receive a one-page notice of key questions about their loan and see a graph comparing their interest rate to that of a low-risk borrower, the Fed said.
Mortgage brokers would not receive greater compensation if they put a borrower into a high-cost loan, under the rules.
"Consumers need the proper tools to determine whether a particular mortgage loan is appropriate for their circumstances," Fed Chairman Ben Bernanke said during an open meeting of the board.
There are ultra conservative interest groups who have in the past tried to outlaw YSP, I believe these efforts will continue until a process is given to the consumers which protects them from predatory lending, obviously a great proposal. But these activist groups cannot with a straight face actually blame 'The Runaway Housing Market' on YSP.
-Christopher Rockey
The Federal Reserve Board Thursday recommended new disclosure rules for homeowners and compensation guidelines for mortgage brokers to correct some abuses of the recent runaway housing market.
Prospective borrowers would receive a one-page notice of key questions about their loan and see a graph comparing their interest rate to that of a low-risk borrower, the Fed said.
Mortgage brokers would not receive greater compensation if they put a borrower into a high-cost loan, under the rules.
"Consumers need the proper tools to determine whether a particular mortgage loan is appropriate for their circumstances," Fed Chairman Ben Bernanke said during an open meeting of the board.
There are ultra conservative interest groups who have in the past tried to outlaw YSP, I believe these efforts will continue until a process is given to the consumers which protects them from predatory lending, obviously a great proposal. But these activist groups cannot with a straight face actually blame 'The Runaway Housing Market' on YSP.
-Christopher Rockey
Thursday, July 23, 2009
Don't You Hold Back on Me
The everlasting story is this; Are the lenders that created this problem in what may be considered pure stupidity smart enough not to inundate the market? I have seen industry experts argue both sides, my opinion, yes they are smart enough and their current market REO pricing manipulation shows exactly that.
The number of homes listed for sale in several housing markets fell last month to levels last seen at the start of the housing downturn. That’s raising hopes that several of the hardest-hit housing markets may be stabilizing.
But the housing cynic may wonder: how much does that have to do with banks holding foreclosed properties off the market to prevent a new glut of properties from hitting the market?
Figures released by ZipRealty, a national Real Estate brokerage that tracks Realtor listings in 28 major U.S. markets, showed that the number of active listings in those markets decreased by 2.1% in June from May. I did a very successful seminar for Zip in Walnut Creek last May by the way!
California posted the most dramatic declines, with inventory falling by 54% in Los Angeles—a level last seen in Sept. 2005— while listings fell by 56% in San Bernardino. The number of homes listed in the San Francisco Bay Area dropped below 20,000 for the first time since Dec. 2006. Listings fell to a Jan. 2006 level in Orange County and a Feb. 2006 level in Phoenix.
It may be too soon to know if these are genuine “green shoots” in the West. After all, there are some signs that banks may be delaying foreclosures, either because they’re overwhelmed with a glut of delinquent loans or because they’re strategically holding off on over saturating the market. That so-called “shadow inventory” could lead to an uptick in foreclosure listings later this year.
For example, notices of default, which mark the first step in the foreclosure process, jumped by 10% in California last month from the previous year, according to ForeclosureRadar.com.(Which is the best foreclosure software in the market, this is fact not opinion) Sorry it's just in California. But notice of trustee sales—the second step in the process, where lenders set a foreclosure sale date—fell by nearly 15% in June from the same month one year ago.
It’s unclear why trustee sales have fallen even as defaults has risen. While California has a new foreclosure moratorium, banks that have loan modification programs in place have been exempted, so that’s not a terribly satisfying answer.
But can we truly expect one from the banking land of Chaos?
-Christopher Rockey
The number of homes listed for sale in several housing markets fell last month to levels last seen at the start of the housing downturn. That’s raising hopes that several of the hardest-hit housing markets may be stabilizing.
But the housing cynic may wonder: how much does that have to do with banks holding foreclosed properties off the market to prevent a new glut of properties from hitting the market?
Figures released by ZipRealty, a national Real Estate brokerage that tracks Realtor listings in 28 major U.S. markets, showed that the number of active listings in those markets decreased by 2.1% in June from May. I did a very successful seminar for Zip in Walnut Creek last May by the way!
California posted the most dramatic declines, with inventory falling by 54% in Los Angeles—a level last seen in Sept. 2005— while listings fell by 56% in San Bernardino. The number of homes listed in the San Francisco Bay Area dropped below 20,000 for the first time since Dec. 2006. Listings fell to a Jan. 2006 level in Orange County and a Feb. 2006 level in Phoenix.
It may be too soon to know if these are genuine “green shoots” in the West. After all, there are some signs that banks may be delaying foreclosures, either because they’re overwhelmed with a glut of delinquent loans or because they’re strategically holding off on over saturating the market. That so-called “shadow inventory” could lead to an uptick in foreclosure listings later this year.
For example, notices of default, which mark the first step in the foreclosure process, jumped by 10% in California last month from the previous year, according to ForeclosureRadar.com.(Which is the best foreclosure software in the market, this is fact not opinion) Sorry it's just in California. But notice of trustee sales—the second step in the process, where lenders set a foreclosure sale date—fell by nearly 15% in June from the same month one year ago.
It’s unclear why trustee sales have fallen even as defaults has risen. While California has a new foreclosure moratorium, banks that have loan modification programs in place have been exempted, so that’s not a terribly satisfying answer.
But can we truly expect one from the banking land of Chaos?
-Christopher Rockey
Wednesday, July 22, 2009
PSC in Van Nuys
I am going to fly to Burbank / Van Nuys this Sunday night and stay at the Hotel where the PSC course will be taught. I am looking forward to hearing Jacob speak about Loss Mitigation again. I think the PSC course has hands down, absolutely, positively, categorically, the best Short Sale training in the United States. I think Keller Williams has the brilliance to endorse the very best and my hats off to them for not asking for any money from Partner First. This clearly illustrates the reason why Keller Williams agents are so classy, it's truly a reflection of management.
-Christopher Rockey
-Christopher Rockey
DRE and The Loan Modification, WARNING!!
The DRE recently issued a fraud warning alerting consumers about loan modification scams and informing consumers of what they can do to protect themselves. The alert is available in both English and Spanish. Last July, the DRE had fewer than 10 complaints involving loan modification companies; today the department has 750 pending investigations. In addition, since last October, the DRE has filed more than 200 desist and refrain orders. A list of the companies and persons the DRE has filed an action against can be viewed at http://www.dre.ca.gov/cons_drs.asp.
It is worth noting that not all firms who collect advance fees for loan modification services do so illegally, the DRE said. In general, only licensed real estate brokers and attorneys operating within the scope of their license may collect advance fees. Real estate brokers must have their advance fee agreement reviewed by the DRE prior to its use to ensure it is compliant with real estate law.
C.A.R. advises members to carefully look at any program that may appear to have a government seal. C.A.R. is not aware of any government programs that have exclusive areas for which you have to pay to participate, and cautions all members to be on the alert for schemes seeking funds from REALTORS® or consumers with no value, or that may be misleading or unlawful.
Because of the current economic situation, you may not be able to afford your mortgage payment. If you are also not able to refinance your home loan, an option that may be available to you is a Loan Modification.
What is a Loan Modification? That is where you and your lender agree to modify one or more of the terms of your home loan. The terms could be a lower interest rate, an extension of the length of the loan (like making a 30 year loan into a 40 year loan), a conversion of an adjustable rate loan (called an ARM) to a fixed rate, the deferring of some of your payments, or any other modification of loan terms.
The goal of a Loan Modification is to help you keep your home and to give you a real, meaningful, sustainable, and long-term adjustment to your current home loan that works for your financial situation.
II. BEWARE OF LOAN MODIFICATION SCAMS AND CON ARTISTS, WHO USUALLY DEMAND THE PAYMENT OF UPFRONT FEES.
Just like after a hurricane hits, where unscrupulous contractors and repair people may collect money for repairs and then not do anything, there are numerous rogue and dishonest operators and companies (many of whom are unlicensed) that have appeared in the wake of the current economic downturn -- and more are popping up every day. They make false promises about their abilities to help get you a loan modification, collect money up front, and then do nothing or next to nothing. They are predators who take advantage of those who are or may be vulnerable.
III. THINGS TO DO TO PROTECT YOURSELF FROM BECOMING A LOAN MODIFICATION OR FORECLOSURE RESCUE SCAM VICTIM.
A. Do It Yourself (and Do It As Soon As Possible) -- You can contact your mortgage servicer and/or lender directly and request a Loan Modification that works for you and your lender. Don’t wait to call if you cannot make or believe you will not be able to make your mortgage payments. Be persistent! - call back many times. Make detailed notes about your attempts to call, when you have left messages, who you speak with, what was said, and what offers are discussed and/or made.
B. Other Free and Safe Options -- If you don’t believe you can negotiate a Loan Modification yourself, or if you do not want to, there are free and safe options available to you.
1. The U.S. Department of Housing and Urban Development (“HUD”) offers Foreclosure Avoidance Counseling through non-profit agencies in California. Go to HUD’s web site at www.hud.gov, or call 800-569-4287, to find counselors. HUD also offers information to homeowners facing the loss of their home.
2. HOPE NOW Alliance - this is a cooperative effort of home loan counselors and lenders, and it consists of HUD intermediaries. Go to the HOPE NOW web site at www.hopenow.com or call 888-995-HOPE.
C. Locate and Work with a Legitimate, Licensed, and Qualified person or company (“Log on, Look em up, and Check em out”)
1. California licensed real estate brokers can perform loan modification work, and licensed real estate salespersons can do such work under the supervision of their employing broker.
While it is legal for a real estate broker to charge you in advance of performing the loan modification services before a Notice of Default is recorded, you do not have to pay anything in advance of a successful loan modification, and all broker fees are negotiable. If a real estate broker wishes to charge an advance fee, he or she must submit an Advance Fee Agreement and all supporting materials to the Department of Real Estate (“DRE”). If the agreement and materials meet the requirements under the law, DRE issues a no-objection letter. All fees collected in advance must be properly handled as trust funds, which require special handling and must be deposited into the broker’s trust account. A licensee must refund to you any unearned portion of the advance fee(s) collected if any of the promised services are not completed.
But please understand that a no-objection letter does not mean that DRE recommends, approves or endorses the agreement or the services of the real estate licensee. You should go to DRE’s web site at www.dre.ca.gov, review and check the information on advance fees and loan modification services, carefully review the public license information on the real estate broker (that information will include any disciplinary history), and look for any Desist and Refrain Orders (D&Rs) that have been issued against companies and individuals. If a D&R has been issued, that means that DRE has determined the individual and/or company is unlicensed and/or has operated unlawfully.
2. California licensed lawyers can also perform loan modification work, but only when such lawyers render those loan modification services in the course and scope of their practice as an attorney at law.
Lawyers can also charge fees in advance (typically called a retainer), and even after a Notice of Default has been recorded. But lawyers must have a written fee agreement with you. And as is the case with real estate licensees, you do not have to pay anything in advance of a successful loan modification, and all legal fees are negotiable. Any fees that you pay to the lawyer(s) in advance do not have to be placed in their trust accounts.
Just as you should do with real estate licensees, check out lawyers by going to the website of the California State Bar, www.calbar.ca.gov. Check the lawyer‘s bar membership records and look for any discipline.
Unfortunately, some loan modification business models have claimed lawyer involvement but they are just unlawful schemes to avoid the prohibition against the collection of advance fees by a real estate licensee after a Notice of Default is recorded. In others, lawyers are just a “front” or non-participating “magnet” for business from desperate homeowners.
****Be on Guard and Check Them Out -- Do Your Own Homework**** In addition to looking at the license records, contact the Better Business Bureau to see if they have received any complaints about the person or company. But please understand that this is just another resource for you to check, and the loan modification provider might be so new that the Better Business Bureau may have little or nothing on them (or something positive because of insufficient public input).
Also, and very importantly, ask the loan modification “specialists” (whether they are real estate licensees or lawyers) about their financial, mortgage and real estate experience, the options and methods they use to renegotiate home loans, when they were first licensed, whether their license is still active, whether they have ever been disciplined, where they got their experience, and also ask them to define a loan modification and the process that they will undertake and the time that they will spend to negotiate a long-term, affordable and sustainable modification for you.
D. Signals of Fraud/Red Flags to Watch Out For --
1. Demand for payment up front (advance fee payment). While not unlawful if paid to licensed persons in the certain limited situations discussed above, the demand or request for advance payment should alert you to the possibility of fraud.
2. Promises or guarantees of success, such as “We Can Save Your Home. We Have Saved Thousands. Free Consultation. Money Back Guarantee”. No such guarantees are possible, and there are no assurances of a successful loan modification.
3. Too good to be true testimonials, such as “We Modified Terri G’s Adjustable Rate Loan, Which Had Spiked to 8 Percent, to a 3.5 Percent Fixed Rate Loan”.
4. Claims that a loan modification company is attorney-backed, attorney-affiliated, or attorney-based -- especially where no lawyer or law firm is identified or mentioned. Many of these entities are simply using the name of an attorney (the name might be for show only, and/or there might not even be a lawyer involved) and scams skirting the law.
5. Claims that a loan modifier is operating under a California Finance Lender‘s (CFL) license issued by the California Department of Corporations. This is not lawful according to the Commissioner of the Department of Corporations.
6. A request that you grant a “power of attorney” to the loan modifier. The scammer may use the power of attorney to sell the home right out from under you.
7. A request that you transfer title to your home to the loan modifier or some third party. This is likely evidence of a scam where these scam artists will strip all of the remaining equity in your home.
8. Promises that you can repair your credit history by the payment of rent to the loan modifier or some third party.
9. Lease/rent-back scams, where you are told to transfer title to a third party, rent the home from that party, and then buy it back later. Transferring your deed gives the con artists the ability to evict you and sell the home.
10. Instructions to pay someone or some company other than your home loan lender or servicer.
11. Claims that a loan modification company will file a bankruptcy or other frivolous case for you to “force” a lender to negotiate a loan modification. So-called “forensic loan reviews” may fall into this category.
12. Assertions by the so-called loan modifier that you should just sign documents that they have filled out, without reviewing them first. You must carefully read and understand all of the documents you sign. Be especially wary of promises by salespeople that they will “take care of everything” and you just need to sign “a bunch of forms with boring legalese”.
13. Lawyers or real estate licensees who tell you that they have no time to meet with you face-to-face.
14. Unlicensed people or companies.
15. Instructions from a loan modification provider that you should not contact your home loan lender or servicer, a lawyer, an accountant, or a non-profit housing counselor.
16. Being advised to miss payments in order to improve your chances of getting a loan modification.
17. High-pressure sales tactics or warnings that “you must act today” or “tomorrow may be too late”.
It is impossible to list all of the Red Flags that might suggest fraud, since the scammers and con artists continue to modify and refine their stories, pitches and cons. They are ruthless and clever. Please be alert, be skeptical, and do your own homework.
And remember, Don’t Rush! You are always able to “slow down” or “pause”, and you should tell the provider of loan modification services that you want to check out their license status with the DRE or the California State Bar. Any service provider who objects to that request may have something to hide, like no credentials or license (or bogus credentials) – so be wary!!! Log on, Look em up, and Check em out!!! www.dre.ca.gov..
IV. WHAT YOU CAN DO IF YOU HAVE BEEN SCAMMED (OR BECOME AWARE OF A LOAN MODIFICATION SCAM)? REPORT FRAUD AND FILE COMPLAINTS WITH --
1. The DRE if a real estate licensee is involved, or if the person or company is unlicensed. If the person or company is unlicensed, the DRE will file a Desist and Refrain Order. If the person or company is licensed, the DRE will commence disciplinary action, http://www.dre.ca.gov/cons_complaint.html.
2. The District Attorney, Sheriff, local police and local prosecutor in your community.
3. The California Attorney General, at www.ag.ca.gov/consumers/general.php.
4. The California State Bar if a lawyer is involved, or if an unlicensed person claims to be a lawyer at www.calbar.ca.gov.
5. The California Department of Corporations, at www.corp.ca.gov, if a loan modification claims to be operating under a California Finance Lender License.
6. The Federal Trade Commission, at www.ftc.gov. They have an excellent fact sheet on Foreclosure Rescue Scams.
7. Federal Bureau of Investigation (FBI), at www.fbi.gov.
8. HUD, at www.hud.gov.
9. The Federal Deposit Insurance Corporation (FDIC), at www.fdic.gov.
10. The Better Business Bureau in your community.
11. The Chamber of Commerce in your community.
12. File a Small Claims Court action. These are informal courts where disputes are resolved quickly and inexpensively by a judge. Since 2008, you can recover up to $7,500 in Small Claims Court. You represent yourself, and can request a judgment for money damages. If
Your input as usual is always appreciated, personally I think the warning is a little harsh. I can say that because I'm not a loan modification fan. I think that a money back guarantee is OK to advertise. It's when that guarantee is not honored that the company should be put to death by firing range with tickets sold on pay per view. But that's just me.
-Christopher Rockey
It is worth noting that not all firms who collect advance fees for loan modification services do so illegally, the DRE said. In general, only licensed real estate brokers and attorneys operating within the scope of their license may collect advance fees. Real estate brokers must have their advance fee agreement reviewed by the DRE prior to its use to ensure it is compliant with real estate law.
C.A.R. advises members to carefully look at any program that may appear to have a government seal. C.A.R. is not aware of any government programs that have exclusive areas for which you have to pay to participate, and cautions all members to be on the alert for schemes seeking funds from REALTORS® or consumers with no value, or that may be misleading or unlawful.
Because of the current economic situation, you may not be able to afford your mortgage payment. If you are also not able to refinance your home loan, an option that may be available to you is a Loan Modification.
What is a Loan Modification? That is where you and your lender agree to modify one or more of the terms of your home loan. The terms could be a lower interest rate, an extension of the length of the loan (like making a 30 year loan into a 40 year loan), a conversion of an adjustable rate loan (called an ARM) to a fixed rate, the deferring of some of your payments, or any other modification of loan terms.
The goal of a Loan Modification is to help you keep your home and to give you a real, meaningful, sustainable, and long-term adjustment to your current home loan that works for your financial situation.
II. BEWARE OF LOAN MODIFICATION SCAMS AND CON ARTISTS, WHO USUALLY DEMAND THE PAYMENT OF UPFRONT FEES.
Just like after a hurricane hits, where unscrupulous contractors and repair people may collect money for repairs and then not do anything, there are numerous rogue and dishonest operators and companies (many of whom are unlicensed) that have appeared in the wake of the current economic downturn -- and more are popping up every day. They make false promises about their abilities to help get you a loan modification, collect money up front, and then do nothing or next to nothing. They are predators who take advantage of those who are or may be vulnerable.
III. THINGS TO DO TO PROTECT YOURSELF FROM BECOMING A LOAN MODIFICATION OR FORECLOSURE RESCUE SCAM VICTIM.
A. Do It Yourself (and Do It As Soon As Possible) -- You can contact your mortgage servicer and/or lender directly and request a Loan Modification that works for you and your lender. Don’t wait to call if you cannot make or believe you will not be able to make your mortgage payments. Be persistent! - call back many times. Make detailed notes about your attempts to call, when you have left messages, who you speak with, what was said, and what offers are discussed and/or made.
B. Other Free and Safe Options -- If you don’t believe you can negotiate a Loan Modification yourself, or if you do not want to, there are free and safe options available to you.
1. The U.S. Department of Housing and Urban Development (“HUD”) offers Foreclosure Avoidance Counseling through non-profit agencies in California. Go to HUD’s web site at www.hud.gov, or call 800-569-4287, to find counselors. HUD also offers information to homeowners facing the loss of their home.
2. HOPE NOW Alliance - this is a cooperative effort of home loan counselors and lenders, and it consists of HUD intermediaries. Go to the HOPE NOW web site at www.hopenow.com or call 888-995-HOPE.
C. Locate and Work with a Legitimate, Licensed, and Qualified person or company (“Log on, Look em up, and Check em out”)
1. California licensed real estate brokers can perform loan modification work, and licensed real estate salespersons can do such work under the supervision of their employing broker.
While it is legal for a real estate broker to charge you in advance of performing the loan modification services before a Notice of Default is recorded, you do not have to pay anything in advance of a successful loan modification, and all broker fees are negotiable. If a real estate broker wishes to charge an advance fee, he or she must submit an Advance Fee Agreement and all supporting materials to the Department of Real Estate (“DRE”). If the agreement and materials meet the requirements under the law, DRE issues a no-objection letter. All fees collected in advance must be properly handled as trust funds, which require special handling and must be deposited into the broker’s trust account. A licensee must refund to you any unearned portion of the advance fee(s) collected if any of the promised services are not completed.
But please understand that a no-objection letter does not mean that DRE recommends, approves or endorses the agreement or the services of the real estate licensee. You should go to DRE’s web site at www.dre.ca.gov, review and check the information on advance fees and loan modification services, carefully review the public license information on the real estate broker (that information will include any disciplinary history), and look for any Desist and Refrain Orders (D&Rs) that have been issued against companies and individuals. If a D&R has been issued, that means that DRE has determined the individual and/or company is unlicensed and/or has operated unlawfully.
2. California licensed lawyers can also perform loan modification work, but only when such lawyers render those loan modification services in the course and scope of their practice as an attorney at law.
Lawyers can also charge fees in advance (typically called a retainer), and even after a Notice of Default has been recorded. But lawyers must have a written fee agreement with you. And as is the case with real estate licensees, you do not have to pay anything in advance of a successful loan modification, and all legal fees are negotiable. Any fees that you pay to the lawyer(s) in advance do not have to be placed in their trust accounts.
Just as you should do with real estate licensees, check out lawyers by going to the website of the California State Bar, www.calbar.ca.gov. Check the lawyer‘s bar membership records and look for any discipline.
Unfortunately, some loan modification business models have claimed lawyer involvement but they are just unlawful schemes to avoid the prohibition against the collection of advance fees by a real estate licensee after a Notice of Default is recorded. In others, lawyers are just a “front” or non-participating “magnet” for business from desperate homeowners.
****Be on Guard and Check Them Out -- Do Your Own Homework**** In addition to looking at the license records, contact the Better Business Bureau to see if they have received any complaints about the person or company. But please understand that this is just another resource for you to check, and the loan modification provider might be so new that the Better Business Bureau may have little or nothing on them (or something positive because of insufficient public input).
Also, and very importantly, ask the loan modification “specialists” (whether they are real estate licensees or lawyers) about their financial, mortgage and real estate experience, the options and methods they use to renegotiate home loans, when they were first licensed, whether their license is still active, whether they have ever been disciplined, where they got their experience, and also ask them to define a loan modification and the process that they will undertake and the time that they will spend to negotiate a long-term, affordable and sustainable modification for you.
D. Signals of Fraud/Red Flags to Watch Out For --
1. Demand for payment up front (advance fee payment). While not unlawful if paid to licensed persons in the certain limited situations discussed above, the demand or request for advance payment should alert you to the possibility of fraud.
2. Promises or guarantees of success, such as “We Can Save Your Home. We Have Saved Thousands. Free Consultation. Money Back Guarantee”. No such guarantees are possible, and there are no assurances of a successful loan modification.
3. Too good to be true testimonials, such as “We Modified Terri G’s Adjustable Rate Loan, Which Had Spiked to 8 Percent, to a 3.5 Percent Fixed Rate Loan”.
4. Claims that a loan modification company is attorney-backed, attorney-affiliated, or attorney-based -- especially where no lawyer or law firm is identified or mentioned. Many of these entities are simply using the name of an attorney (the name might be for show only, and/or there might not even be a lawyer involved) and scams skirting the law.
5. Claims that a loan modifier is operating under a California Finance Lender‘s (CFL) license issued by the California Department of Corporations. This is not lawful according to the Commissioner of the Department of Corporations.
6. A request that you grant a “power of attorney” to the loan modifier. The scammer may use the power of attorney to sell the home right out from under you.
7. A request that you transfer title to your home to the loan modifier or some third party. This is likely evidence of a scam where these scam artists will strip all of the remaining equity in your home.
8. Promises that you can repair your credit history by the payment of rent to the loan modifier or some third party.
9. Lease/rent-back scams, where you are told to transfer title to a third party, rent the home from that party, and then buy it back later. Transferring your deed gives the con artists the ability to evict you and sell the home.
10. Instructions to pay someone or some company other than your home loan lender or servicer.
11. Claims that a loan modification company will file a bankruptcy or other frivolous case for you to “force” a lender to negotiate a loan modification. So-called “forensic loan reviews” may fall into this category.
12. Assertions by the so-called loan modifier that you should just sign documents that they have filled out, without reviewing them first. You must carefully read and understand all of the documents you sign. Be especially wary of promises by salespeople that they will “take care of everything” and you just need to sign “a bunch of forms with boring legalese”.
13. Lawyers or real estate licensees who tell you that they have no time to meet with you face-to-face.
14. Unlicensed people or companies.
15. Instructions from a loan modification provider that you should not contact your home loan lender or servicer, a lawyer, an accountant, or a non-profit housing counselor.
16. Being advised to miss payments in order to improve your chances of getting a loan modification.
17. High-pressure sales tactics or warnings that “you must act today” or “tomorrow may be too late”.
It is impossible to list all of the Red Flags that might suggest fraud, since the scammers and con artists continue to modify and refine their stories, pitches and cons. They are ruthless and clever. Please be alert, be skeptical, and do your own homework.
And remember, Don’t Rush! You are always able to “slow down” or “pause”, and you should tell the provider of loan modification services that you want to check out their license status with the DRE or the California State Bar. Any service provider who objects to that request may have something to hide, like no credentials or license (or bogus credentials) – so be wary!!! Log on, Look em up, and Check em out!!! www.dre.ca.gov..
IV. WHAT YOU CAN DO IF YOU HAVE BEEN SCAMMED (OR BECOME AWARE OF A LOAN MODIFICATION SCAM)? REPORT FRAUD AND FILE COMPLAINTS WITH --
1. The DRE if a real estate licensee is involved, or if the person or company is unlicensed. If the person or company is unlicensed, the DRE will file a Desist and Refrain Order. If the person or company is licensed, the DRE will commence disciplinary action, http://www.dre.ca.gov/cons_complaint.html.
2. The District Attorney, Sheriff, local police and local prosecutor in your community.
3. The California Attorney General, at www.ag.ca.gov/consumers/general.php.
4. The California State Bar if a lawyer is involved, or if an unlicensed person claims to be a lawyer at www.calbar.ca.gov.
5. The California Department of Corporations, at www.corp.ca.gov, if a loan modification claims to be operating under a California Finance Lender License.
6. The Federal Trade Commission, at www.ftc.gov. They have an excellent fact sheet on Foreclosure Rescue Scams.
7. Federal Bureau of Investigation (FBI), at www.fbi.gov.
8. HUD, at www.hud.gov.
9. The Federal Deposit Insurance Corporation (FDIC), at www.fdic.gov.
10. The Better Business Bureau in your community.
11. The Chamber of Commerce in your community.
12. File a Small Claims Court action. These are informal courts where disputes are resolved quickly and inexpensively by a judge. Since 2008, you can recover up to $7,500 in Small Claims Court. You represent yourself, and can request a judgment for money damages. If
Your input as usual is always appreciated, personally I think the warning is a little harsh. I can say that because I'm not a loan modification fan. I think that a money back guarantee is OK to advertise. It's when that guarantee is not honored that the company should be put to death by firing range with tickets sold on pay per view. But that's just me.
-Christopher Rockey
Tuesday, July 21, 2009
Pre Foreclosure Specialist Certification, PSC a Huge Hit!!
One hundred seven people gathered last week in Ontario to receive the education required for the PSC designation. The feedback has been overwhelmingly excellent!! The instructor, Jacob Swodeck, effectively communicated all the course material. Every agent in the class passed the quiz to receive the certification. I am anxious for Santa Anna on August 3rd. Scott Thompson is going to be the instructor in Rocklin next week and we postponed Pleasanton for another few days. Although our course material was nearly flawless, we are taking this week to make any necessary corrections. Personally I need to apologize to Son who created the entire PSC vision and concept. Much like all the students in the room I was taking very detailed notes the entire time. I was in such a hurry I took my suitcase out of one vehicle, borrowed Son's keys to put my suitcase in his car, and that's the last we ever saw the car keys. Of course just my luck no spare was around, my suitcase stayed with Son while I caught my flight home. Sorry Son... I owe you a new BMW spare key!
-Christopher Rockey
-Christopher Rockey
Wednesday, July 15, 2009
PSC Eve
On the eve of our first PSC live two day event it's coming together like a group of professionals would expect it to. The course material is flawless and the manuals will be ready tonight at 7:00. We ordered PSC lapel pins for graduates along with their certificates. Although I am no longer sure who I work for I am anxious to hit the road. Let me make sure if I have this right. Mortgage Resolution Services is the company that Scott Thompson founded in 2007 which I have worked for even when Fidelity National Financial acquired us in 2008. Since then, Asset Link has placed us under their umbrella. (Asset Link still an FNF company) We have strategically aligned ourselves with Keller Williams although I do not personally have my Real Estate license with them. So here is my question, Why does my business card say that the name of my company is Partner First. When I have it all figured out I will be sure to let you know. This is going to be one of the greatest experiences of my life and I am anxious to share all my adventures, wherever they may take me.
The Freddie Mac Loan Modification Hits Big Media
With so many homes headed to foreclosure Freddie Mac has posted a new video on YouTube to show late-paying borrowers how to speed their efforts to get their mortgage loans modified.
The video, which runs two minutes, shows borrowers which documents they need to make more effective calls to loan servicers.
McLean, Va.-based Freddie Mac (NYSE: FRE) says having the right documents at hand can cut the time needed to determine their eligibility and process their application for a loan modification under President Barack Obama's Making Home Affordable program or Freddie Mac's other workout initiatives.
Available in English and Spanish versions, the new Freddie Mac video — "Stop Foreclosure: Documents Your Lender Needs to Help You" — can see the video clip by clicking below, WARNING: The Video is Shallow, lacks content and is so simple
a caveman could do it.
http://www.youtube.com/FreddieMacWeb
-Christopher Rockey
The video, which runs two minutes, shows borrowers which documents they need to make more effective calls to loan servicers.
McLean, Va.-based Freddie Mac (NYSE: FRE) says having the right documents at hand can cut the time needed to determine their eligibility and process their application for a loan modification under President Barack Obama's Making Home Affordable program or Freddie Mac's other workout initiatives.
Available in English and Spanish versions, the new Freddie Mac video — "Stop Foreclosure: Documents Your Lender Needs to Help You" — can see the video clip by clicking below, WARNING: The Video is Shallow, lacks content and is so simple
a caveman could do it.
http://www.youtube.com/FreddieMacWeb
-Christopher Rockey
Monday, July 13, 2009
Pre Foreclosure Specialist Certification
I can't find the right words to explain how bad I need to get to Southern California today. Our first live program for PSC is this Thursday. We are doing a full two day seminar to a sold out audience. I haven't had the chance to see the entire course material yet. The great news is that my associates feel like I have nothing to worry about and that Jacob will be doing the majority of the presenting anyway. The truth is and you can certainly verify this from your own experience that whenever you are presenting something for the first time, your going to get nervous. What do I do? What do I say? What if i blow it? What if my zipper is down? you know all the usual stuff. To be honest I am going to So Cal tonight and I look forward to the challenge ahead. I think by the first time I get to Pleasanton I will be more than ready. If anyone has any cures for being nervous let me know. I can tell you that whole 'Picture the entire Audience Naked' thing is a complete myth.
-Christopher Rockey
-Christopher Rockey
Friday, July 10, 2009
PSC 6 Day Countdown
Our kick off day is next Thursday July 16Th in Ontario. Our PSC is a two day course with an endorsed designation. The entire team is working round the clock to add the finishing touches. I came home to Sacramento to get that horrible trashy looking crack in my tooth fixed but turns out my Dentist doesn't accept my new Assert Link insurance. It looks like i will be doing seminars looking like Loyd Christmas. Jacob Swodeck is currently the only other Full Time trainer. Lucky for his artistic capabilities because there is no chance I could make our Power Point presentation look as nice as it's going to. The earlier article I wrote today was about that interview, the truth is I am relationship building with Freddie Mac to get the most up to date information in the Short Sale industry. Although PSC will not recognize my AAGG designation the next 120 days will be a time in my life I will never forget. I wish great success to all Real Estate professionals that are thirsty for the standardization process that I will be teaching through partnerfirst.org
-Christopher Rockey
Loan Modification Facts and Myths
According to the center for responsible lending there is a foreclosure in the US every thirteen seconds (while there are no moratoriums respectively) Net Net over Short Sale over Short Refinance the Loan Modification makes more sense to the lender / Investor. So why aren't more lenders doing them, first name one that's not? They all are but they literally have thousands of requests per liquidation manager or Loss Mitigator. I had the opportunity to interview a high ranking trainer with Freddie Mac today. She told with out a doubt Freddie Mac is not doing any principal reductions on Loan Modification. She did say they would consider Ballooning or Forbearing a portion of the principal. When I asked her (I didn't ask if i could quote her so she can remain anonymous) what one quote Freddie Mac wants the public to know what would it be, her response "Our number one priority is to do whatever we can to help the consumer avoid foreclosure. We are huge advocates of the presidents plan and the Making Homes Affordable Program, we know there is a problem, we get that, we are a huge advocate of being part of the solution."
A study by the Federal Reserve in Boston finds that since the housing downturn began, only a small fraction of mortgages have been renegotiated to prevent foreclosure, some 3% of seriously delinquent loans. But this isn't because these loans have been securitized and sold off to investors; banks have modified a similar number of loans still on their books. The evidence says it's just not worth it for the banks to do it: Nearly half of all modified mortgages fail anyway, and a significant portion of delinquent borrowers "self cured" and started repaying within a year. Again Loan Modification makes most sense to the lender, not always the consumer. At one point early this year the center for responsible lending stated a 9 out of 10 failure rate for Loan Modifications that were negotiated. Again, I believer that's because the lender was able to convince the homeowner to take a Loan Modification that was in the interest of the lender not necessarily the consumer. Loan Modification just like a Short Sale is a negotiation. Never accept the lenders first offer even if they come back and tell you they will have to re submit for approval and that could take another six months.
-Christopher Rockey
A study by the Federal Reserve in Boston finds that since the housing downturn began, only a small fraction of mortgages have been renegotiated to prevent foreclosure, some 3% of seriously delinquent loans. But this isn't because these loans have been securitized and sold off to investors; banks have modified a similar number of loans still on their books. The evidence says it's just not worth it for the banks to do it: Nearly half of all modified mortgages fail anyway, and a significant portion of delinquent borrowers "self cured" and started repaying within a year. Again Loan Modification makes most sense to the lender, not always the consumer. At one point early this year the center for responsible lending stated a 9 out of 10 failure rate for Loan Modifications that were negotiated. Again, I believer that's because the lender was able to convince the homeowner to take a Loan Modification that was in the interest of the lender not necessarily the consumer. Loan Modification just like a Short Sale is a negotiation. Never accept the lenders first offer even if they come back and tell you they will have to re submit for approval and that could take another six months.
-Christopher Rockey
Thursday, July 9, 2009
PSC Pre Foreclosure Specialist Certification
Although I should have been talking about this more often I really have been busy. I know most of you don't think I'm as busy as I claim to be but I assure you I dream about working during my four hours of sleep per night. The PSC designation is the most detail oriented designation a Real Estate Professional can receive in the distressed Real Estate market. The PSC designation is the only of it's kind that has several endorsements including Keller Williams Real Estate, Asset Link REO manager and several lenders. There are going to be so many benefits to the PSC designation I do not have time right now because I need to get back to writing the course material. If I had my camera I would take a picture of the key players who are working on this FULL TIME. Mark Comer, Michael Leet and Son Nguyen are the founders of Partner First.
More to come for many months...
www.partnerfirst.org
-Christopher Rockey
More to come for many months...
www.partnerfirst.org
-Christopher Rockey
Jingle Mail, Jingle Mail, Jingle All the Way to the Bank!
The national economist for Fannie Mae was the key note speaker for a Las Vegas convention last year. The speaker was expected to finish with some really positive notes which he failed to relay. In fact he was one of the first Fannie Mae officials to say "This is Going to get Really Bad." He had made mention as interest rates rise, loan products go away home buying frenzy will be closer to a normal market. Then he confided in the audience of three thousand attendees and said with recession and economic issue on a national basis one of there biggest nightmares would potentially happen. That nightmare is when it becomes a badge of courage to let your home go. Rather than mailing a mortgage payment to the lender, the homeowners mails the lender the keys to the home. This nightmare is known as 'Jingle Mail' it happened before, it will happen again.
New research found that more than 25% of mortgage loan defaults are strategic -- that is, a quarter of homeowners who default on their mortgages are walking away from their homes even if they can afford to make their payments.
Homeowners are especially motivated to walk away when home values have fallen by more than 15%, according to a new paper, "Moral and Social Restraints to Strategic Default on Mortgages," by researchers at the Kellogg School of Management at Northwestern University, the University of Chicago Booth School of Business and the European University Institute. Data were collected within the last six months as part of the Chicago Booth/Kellogg School Financial Trust Index, a quarterly indicator of the amount of trust Americans have in private institutions in which they can invest their money.
"Housing policy under the current administration has focused on reducing households' cash flow problems in response to the housing crisis, but no one has addressed the negative equity issue as part of public policy regarding housing," said Paola Sapienza, a co-author of the paper, in a news release. "We're in a completely different economic environment today, where for the first time since the Great Depression millions of Americans have mortgage loans that exceed the value of their home."
"As defaults become more common, the social stigma attached with defaulting will likely be reduced, especially if there continues to be few repercussions for people who walk away from their loans," Sapienza said. "This has an adverse effect on homeowners who do pay their mortgages, and the after-effects of more defaults and more price collapse could be economic catastrophe."
The report found that homeowners often won't default as long as negative equity doesn't exceed 10% of the value of the home. However, 17% of households would default -- even if they could afford their mortgage payments -- when their equity shortfall reaches 50% of the value of their home, according to the paper. In numerous housing markets, home prices have suffered declines of more than 30%.
Aside from their equity situation, researchers said that the local housing market also plays a role in whether a homeowner underwater on a mortgage feels comfortable walking away. And people are more likely to strategically default if they know someone who took the same sort of action.
"Our research showed there is a 'multiplication effect,' where the social pressure not to default is weakened when homeowners live in areas of high frequency of foreclosures or know others who defaulted strategically," said Luigi Zingales, a co-author of the paper, in the release. "In fact, the predisposition to default increases with the number of foreclosures in the same ZIP code." That's a common factor when the Creation of the ever growing popularity of Jingle Mail comes into the housing equation.
-Christopher Rockey
New research found that more than 25% of mortgage loan defaults are strategic -- that is, a quarter of homeowners who default on their mortgages are walking away from their homes even if they can afford to make their payments.
Homeowners are especially motivated to walk away when home values have fallen by more than 15%, according to a new paper, "Moral and Social Restraints to Strategic Default on Mortgages," by researchers at the Kellogg School of Management at Northwestern University, the University of Chicago Booth School of Business and the European University Institute. Data were collected within the last six months as part of the Chicago Booth/Kellogg School Financial Trust Index, a quarterly indicator of the amount of trust Americans have in private institutions in which they can invest their money.
"Housing policy under the current administration has focused on reducing households' cash flow problems in response to the housing crisis, but no one has addressed the negative equity issue as part of public policy regarding housing," said Paola Sapienza, a co-author of the paper, in a news release. "We're in a completely different economic environment today, where for the first time since the Great Depression millions of Americans have mortgage loans that exceed the value of their home."
"As defaults become more common, the social stigma attached with defaulting will likely be reduced, especially if there continues to be few repercussions for people who walk away from their loans," Sapienza said. "This has an adverse effect on homeowners who do pay their mortgages, and the after-effects of more defaults and more price collapse could be economic catastrophe."
The report found that homeowners often won't default as long as negative equity doesn't exceed 10% of the value of the home. However, 17% of households would default -- even if they could afford their mortgage payments -- when their equity shortfall reaches 50% of the value of their home, according to the paper. In numerous housing markets, home prices have suffered declines of more than 30%.
Aside from their equity situation, researchers said that the local housing market also plays a role in whether a homeowner underwater on a mortgage feels comfortable walking away. And people are more likely to strategically default if they know someone who took the same sort of action.
"Our research showed there is a 'multiplication effect,' where the social pressure not to default is weakened when homeowners live in areas of high frequency of foreclosures or know others who defaulted strategically," said Luigi Zingales, a co-author of the paper, in the release. "In fact, the predisposition to default increases with the number of foreclosures in the same ZIP code." That's a common factor when the Creation of the ever growing popularity of Jingle Mail comes into the housing equation.
-Christopher Rockey
Wednesday, July 8, 2009
No You Cannot / Yes I Can... And Will
The argument is simple, should we do high loan to value refinances? The question poses many interesting views and my own proclivity's lead me to believe I'm a supporter. The difference between the 'Loan Product Problem' that was caused by furious greed and the high 125% loan to value refinance is simple. The old loans were originated under NINA terms (No Income No Assets) the new FHA guidelines are strict in a time while we are in a credit crunch. The FHA 125% isn't the worse idea in the world. Someone that purchased in the peek of the market and only owes 125% of the value is a good borrower that probably put some money down at one point. Or in the words of our new President "These are People that Tried to do the Right Thing." FHA guidelines are tough. You need to qualify for the loan, you have to provide evidence on Income, Credit and cash. It's a strong 30 year fix that won't adjust and I support it if the borrower qualifies for it!
Home Affordable Refinance eligibility expanded to 125 percent LTV
Fannie Mae last week announced the Home Affordable Refinance Program (HARP) will be expanded to permit refinancing of existing Fannie Mae and Freddie Mac loans with current loan-to-value ratios (LTVs) up to 125 percent, an increase from the current LTV limit of 105 percent. Fannie Mae characterised the expansion as a move to help lenders serve more borrowers with a demonstrated track record of paying their mortgages, but who have been unable to refinance due to significant property value declines. Loans with LTVs above 105 percent will be eligible for a same-servicer refinance under the Refi Plus manual underwriting option, and the new loan must be a fully amortizing fixed-rate mortgage with a term greater than 15 years, up to 30 years. Fannie Mae is evaluating potential updates to Desktop Underwriter to allow LTV ratios above 105 percent.
In conjunction with the LTV expansion, Fannie Mae also announced it is offering a 0.50 percentage point reduction in the loan-level price adjustment (LLPA) charged for manually underwritten Refi Plus loans with LTVs above 105 percent and loan terms greater than 15 years, up to 25 years. Refi Plus mortgage loans with LTV ratios that exceed 105 percent are eligible for whole loan purchase or delivery into MBS on or after September 1, 2009. Please refer to Announcement 09-23 for information about a new MBS prefix and other operational and delivery details for loans with LTVs above 105 percent.
Freddie Mac announced a similar 125 percent LTV expansion July 1; details are available on the webinar below.
More info
Free Think FHA webinars July 14, July
Don’t miss your chance to learn all about FHA with free Think FHA webinars on July 14 and July 28 from 1 p.m. to 2 p.m. The webinars will cover various topics including the benefits of FHA loans and Energy Efficient Mortgages to Hope for Homeowners. Space is limited, so register early and reserve your spot. For more information, visit http://www.car.org/education/FHA/.
Tell a friend!
-Christopher Rockey
Home Affordable Refinance eligibility expanded to 125 percent LTV
Fannie Mae last week announced the Home Affordable Refinance Program (HARP) will be expanded to permit refinancing of existing Fannie Mae and Freddie Mac loans with current loan-to-value ratios (LTVs) up to 125 percent, an increase from the current LTV limit of 105 percent. Fannie Mae characterised the expansion as a move to help lenders serve more borrowers with a demonstrated track record of paying their mortgages, but who have been unable to refinance due to significant property value declines. Loans with LTVs above 105 percent will be eligible for a same-servicer refinance under the Refi Plus manual underwriting option, and the new loan must be a fully amortizing fixed-rate mortgage with a term greater than 15 years, up to 30 years. Fannie Mae is evaluating potential updates to Desktop Underwriter to allow LTV ratios above 105 percent.
In conjunction with the LTV expansion, Fannie Mae also announced it is offering a 0.50 percentage point reduction in the loan-level price adjustment (LLPA) charged for manually underwritten Refi Plus loans with LTVs above 105 percent and loan terms greater than 15 years, up to 25 years. Refi Plus mortgage loans with LTV ratios that exceed 105 percent are eligible for whole loan purchase or delivery into MBS on or after September 1, 2009. Please refer to Announcement 09-23 for information about a new MBS prefix and other operational and delivery details for loans with LTVs above 105 percent.
Freddie Mac announced a similar 125 percent LTV expansion July 1; details are available on the webinar below.
More info
Free Think FHA webinars July 14, July
Don’t miss your chance to learn all about FHA with free Think FHA webinars on July 14 and July 28 from 1 p.m. to 2 p.m. The webinars will cover various topics including the benefits of FHA loans and Energy Efficient Mortgages to Hope for Homeowners. Space is limited, so register early and reserve your spot. For more information, visit http://www.car.org/education/FHA/.
Tell a friend!
-Christopher Rockey
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