Low Risk Investing

Can my Lender sue me for not Making my Mortgage Payments?

2010-05-13T14:00:00.000-07:00

The wave of possible lender lawsuits against borrowers has started, primarily by junior lenders whose seconds (often HELOCS) were wiped out when a senior lender foreclosed. We presently know of borrowers being represented in a number of these lawsuits and have already settled several. The most important points to remember if you are served with a lawsuit are: 1) don't panic and ignore it. Get competent legal counsel in your State to advise you how and when to respond; and 2) almost all such lawsuits will resolve without going to trial.
There are several defenses that can be raised in defense to any lender lawsuit that may reduce or even eliminate their claim. These include:

1. Lender does not own the loan - In order to file a lawsuit against you, the lender must actually "own" the loan, that is they own and have possession of the Promissory Note. Loans change ownership all the time and it is possible that the lawsuit has been brought by a loan "servicer" or collection company, not the actual owner. If they cannot prove ownership, they do not have "legal standing" to file the lawsuit and they would potentially lose.

2. Loan was predatory - One of the key reasons why we had this market collapse was that from 2000 through 2006, lenders made loans to borrowers who in reality could not afford the loan. Sometime this was done by misstating income on "stated income" or "no document" loans and often this misstatement was done by the lender, not the borrower. Other times the loan was unrealistic, such as a 1% interest rate on which the borrower qualified for the loan but which jumped up much higher after the first month. So the buyer only qualified on month one but would never qualify on month two. Failure was inevitable unless the buyer could quickly flip the property. If the lender should never have made the loan, they likely will not recover against the borrower in court. For the agents that have the FACS certification we call these loans NINJA Loans (No Income No Job or Assets)

3. Loan was result of fraud - Similar to predatory loans, many borrowers obtained loans through actual fraud where the loan agent altered information supplied by the borrower or made false representations to the borrower such as: "take this adjustable rate now and we'll convert it to a fixed rate within a year". For most borrowers, that loan agent was never to be found within the year, the fixed rate was not obtainable, and the increasing adjustable rate forced the borrower into default. If the lender's loan agent defrauded the borrower into getting the loan, they likely will not recover against the borrower in court.

4. Lender failed to do diligence - One of the biggest causes of the market collapse was that the lenders failed to exercise any diligence in checking to make sure the information on the loan application was true, such as checking tax returns and confirming the borrower’s employment and income. The banking deregulation in the late 1990's created a flood of money in the market for new loans to be made and lenders accepted virtually any application without checking whether the loan was good. The result was billions of dollars of bad loans secured with property that was not worth the debt. If the lender should never have made the loan, they likely will not recover against the borrower in court. If the lender is trying to give you a commissionectamy when negotiating a commission, remind that lender of exactly the above point and additionally you did not tell them how many points to charge when they originated the loan.

5. Lender knew the market was inflated in a bubble - The combination of banking deregulation and easy money created a huge increase in demand by possible homeowners and investors which drove up the prices on available properties, often increasing by $10,000 or more in a single month. Developers rushed in with new subdivisions everywhere trying to fill the demand as competition for homes kept driving prices upwards. This inflationary bubble was almost entirely fueled by high-risk loans, speculative appraisals, and the lack of real underwriting and diligence by the lenders. It was completely foreseeable to lenders that this bubble would burst but they made the loans anyway because they earned commissions and could sell the loans in the secondary mortgage market. It was no real surprise to lenders when the borrowers started defaulting in 2005 on the increasingly expensive loans which led to the collapse starting in 2006. If the lender should never have made the loan, they likely will not recover against the borrower in court.

6. Lender has insurance for the loss - Many of the loans made were 100% of purchase price and even more. Generally, if the loan was for more than 80% of the property value, mortgage insurance (PMI) was required. Although paid for by the borrower, this insurance paid the lender for any loss on a default. The lawsuit may be an attempt by the lender to collect on a loss that they have already recovered on through the insurance. If the lender has already been compensated for any loss, they likely will not recover against the borrower in court.

7. Lender has been bailed out by the taxpayers - Between 2008 and 2009, Federal bailout monies paid by taxpayers (including the borrower) provided protection for lenders damaged because of loan losses. Our government guaranteed billions of dollars in lender bad debt, guarantees that we and our children will be paying for years to come. Many consider these bailouts to be a reward for bad business practices instead of the punishment that might be deserved. If the lender has already been compensated for any loss, they likely will not recover against the borrower in court.

8. How Should You Prepare? - In many states, the deadline for a lender to bring a claim against a borrower is four years other states are six years while I have heard as high as seven years in other states. Don’t forget that most states the owners of the debt are able to get an extension for up to ten years and in some states you can get that extension of ten years twice. Meaning for the next twenty six years the homeowner is going to be on the hook for the debt. That’s generally from the date the borrower defaulted, not to be confused with the actual foreclosure date. With hundreds of thousands of borrowers just now in default, these lawsuits will be a constant threat for many years to come. These may be joined by deficiency lawsuits following short sales to which the same defenses can be raised in addition to several other defenses unique to short sales which I'll cover in subsequent Blogs assuming I have the time!

Before anybody makes any kind of decision concerning your upside-down home or investment property, be certain to get tax and legal advice from qualified professionals in your State who can look at your specific situation and advise you on how these rules apply to you, particularly on how to identify and minimize the risks of a lender lawsuit. Thank you to Attorney Mr. Steve Bedde from the Sacramento California area in helping us to recognize these steps. www.stevebeede.com

This article in no way is serving as a function of legal advice. You must talk to an attorney in the state your property is located in order to make an intelligent decision in diagnosing the recourse of your debt.

-Christopher Rockey

Jimmy HAFA

2010-03-04T19:40:00.000-08:00

Please excuse the delayed post. I have been travelling the world in 60 days. I am having a lot of agents tell me HAFA is going to change the world. That's great!!

Tell me what you see missing...

The first gives up rights of recourse, great many states are a single action state anyway (Sorry Florida) How about the second?

HAFA is designed for homeowners who have applied to HAMP for assistance but have had no success with their loan modification program. To participate in HAFA, homeowners must still meet HAMP’s eligibility criteria (principal residence, first-lien mortgage, serious delinquency, unpaid balance under $729,750, and a mortgage payment over 31 percent of gross income).

Homeowners must be considered for HAFA within 30 days if they cannot meet HAMP’s requirements or if they specifically request consideration for HAFA. However, the homeowner only has 14 days to respond to a written notice that HAFA may be available to them, giving the lender time to meet their 30-day deadline.

As with other short sales and deeds-in-lieu, the lender or loan servicer of the primary mortgage must approve of the transaction and conduct their own independent appraisal. Under HAFA, however, they must also agree to accept the proceeds from the sale of the house as payment in full, waiving their right to collect the balance of the loan from the homeowner.

It is up to the lender or servicer of the first-lien mortgage whether they or the homeowner negotiate with any subordinate lienholders. Lenders of HELOCs and other subordinate liens may be allowed to keep a limited portion of the proceeds (up to $3,000 each) of a short sale, with the first-lien lender’s approval. These funds are part of an incentive program for subordinate lienholders to waive their right to collect the balance due on their loans. The original lender may not be held responsible if any subordinate lienholders decline to participate and decide to sue the borrower for the amount of their unpaid debt.

HAFA’s Short Sale Agreement (SSA) has certain stipulations for all parties involved. Their SSA requires that the deadline for the homeowner to find a buyer and complete the transaction be not less than 120 calendar days from the date the SSA is mailed to the homeowner. The lender has the option of extending this deadline another 245 calendar days, for a total term of 12 months. The SSA also mandates that a HAFA transaction must be ‘arms-length’, and that the end buyer must agree to hold the property for at least 90 days after closing. Finally, the SSA gives the listing real estate agent the right to an undiscounted 6 percent commission at closing.

A short sale is any sale of property, usually during the foreclosure process, in which the lender(s) agrees to accept less than the balance due on the mortgage(s) or lien(s) in order to avoid the cost of foreclosure. Depending on HAFA requirements and state law, the lender(s) may or may not pursue the homeowner for the remainder of the debt. The vacancy date is determined by the terms of the closing.

Unlike a short sale, a deed-in-lieu simply allows the homeowner in default to transfer the deed to the property back to the lender in exchange for partial or full payoff of the mortgage. The vacancy date must be at least 30 days after the deed-in-lieu agreement is signed.

In either case, HAFA requires that the lender agree to suspend all foreclosure sales in good faith, pending the outcome of either transaction. In the case of a short sale, the lender also must agree to pay the administrative closing costs.

The Department of the Treasury, which authorizes all programs under the Making Home Affordable umbrella, has designated Freddie Mac as its compliance agent.

The HAFA program is set to begin on April 5, 2010. Servicers may initiate a HAFA transaction earlier in 2010 under certain conditions. As of this writing, all HAFA agreements must be finalized and signed by December 31, 2012.

-Christopher Rockey
www.facseducation.com

Fed to Save the Day? And if Not?

2010-01-29T07:25:00.000-08:00

The Federal Reserve today reported on their weekly purchases of agency mortgage-backed securities (MBS).

In the week ending January 27, 2010, the Federal Reserve purchased a total of $12.50 billion agency MBS. In those five days the Federal Reserve sold $500 million (supported the roll market) for a net total of $12 billion purchases.

The goal of the Federal Reserve's agency MBS program is to provide support to mortgage and housing markets and to foster improved conditions in financial markets more generally. Only fixed-rate agency MBS securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae are eligible assets for the program. The program includes, but is not limited to, 30-year, 20-year and 15-year securities of these issuers.

Since the inception of the program in January 2009, the Fed has spent $1.16 trillion in the agency MBS market, or 92.87 percent of the allocated $1.25 trillion, which is scheduled to run out in March 2010. This leaves $89.1 billion left to purchase MBS coupons in the TBA market.

Uh-Oh...

2010-01-06T17:02:00.000-08:00

Until this very moment I have not considered the Federal Reserve Bank of New York to suffer from Dawn syndrome...

A new study found that borrowers who receive loan modifications that reduce loan balances, and not simply interest rates, are less likely to redefault on the loan, according to the Federal Reserve Bank of New York.

Principal reductions are more successful at avoiding redefaults because they reduce negative equity and provide the borrowers with greater incentive to remain current on the loan, according to the study. The study also found that borrowers who owe 15 percent or more than their homes’ value have a 51 percent higher risk of redefaulting in any given month.

I'm not going to waste too much time on this but i will say that Dawn syndrome is popularly named after a famous radio disk jockey who carries the first name of Dawn and always states the obvious. Most of her listening audience want to present her with a bouquet of roses complimented with a nice fresh slap.

Home Prices Dropping?

2010-01-05T09:14:00.000-08:00

At the FACS certification program we are the hugest advocates of stabilization and standardization. Lenders have potentially decided to manipulate the housing economy by withholding REO inventory which has boosted demand the highest we have seen it since early 2006. unfortunately that is a bet lenders could loose if defaults continue to rise which they have. After four months of gains, home prices flattened in October. Worse yet, industry insiders think that they'll soon start to fall.
Prices have risen more than 3% since May, according to S&P/Case-Shiller.
But most forecasts predict price declines in 2010, with possible losses ranging from anywhere from 3% on up. Fiserv Lending Solutions, a financial analytics firm, forecasts that prices will fall in all but 39 of the 381 markets it covers, with an average drop of 11.3%.

"We've seen recent price stabilization because of low mortgage interest rates and the impact of the first-time homebuyers tax credit," said Pat Newport of IHS Global Research. "But there are really good reasons to think prices will now start going down."

There are three main reasons for the reversal: a coming flood of foreclosures, rising interest rates and the eventual end of the tax credits.

More foreclosures
For Gus Faucher, the director of macroeconomics for Moody's Economy.com, the huge number of foreclosures that remain in the pipeline is the big problem.

Moody's upped its estimate of defaults recently because of shortcomings of the government-led mortgage modification programs. Trial workouts are not being made permanent and completed modifications are redefaulting at high rates.

"There are going to be fewer [successful] modifications than we thought," said Faucher.

Even so, he added, much of the price decline has already occurred and Moody's forecast is for only another 8% drop. The worst-hit markets will be the ones suffering the most foreclosures, places like Arizona, California, Florida and Nevada.

Resetting option ARMs (adjustable rate mortgages) will also aggravate the foreclosure problem. These mortgages allow borrowers to pick their own payments, which can be so low they don't even cover the interest. Balances swell.

For many of the more than 350,000 option-ARM borrowers, it's time to pay the piper. Their loans will change into fully amortizing mortgages that will carry much higher monthly payments. A very large percentage of these homeowners will default, according to Shari Olefson, author of "Foreclosure Nation: Mortgaging the American Dream."

"We've still only seen the tip of the foreclosure iceberg," she said.

She also predicts more strategic defaults, people deliberately walking away from even fixed-rate mortgages as the value of their homes dips well below the amount they owe.

Olefson's forecast is for price declines of 5% to 15%, depending on the area, with a national median price drop of about 10% for 2010.

Rising interest rates
Also affecting prices will be higher interest rates. Some analysts, according to Newport, think rates for a 30-year mortgage will pass 6% next year as the government curtails housing market support.

The Federal Reserve has helped keep rates low through purchases of mortgage-backed securities. But that program is winding down and will end in March.

"The government is throwing everything at the market but the kitchen sink," said Peter Schiff, president of Euro pacific Capital. "It can't prop up housing markets forever."

Schiff is among the bigger bears. Though he gave no specific prediction, he thinks prices -- already down 29% from the peak -- are only halfway to the bottom.

The end of the tax credit
As a tool for supporting housing markets and prices, the tax credit for homebuyers is a two-edged sword. It reduces taxes dollar-for-dollar by up to $8,000 for new homebuyers and $6,500 for buyers who already own a home and should support home prices. But it ends at the end of April.

Many buyers will push their deals forward to get in before the deadline and then demand for homes could sink afterward.

One of the few bulls out there is NAR, whose chief economist, Lawrence Yun, is counting on the tax credit to provide temporary support for housing markets until the economy recovers enough to start fueling sales. He predicts price improvement in 2010 of more than 3%.

"The headwind we face is rising mortgage interest rates," Yun said, "but the compensating factors will be the homebuyers tax credit in the first half of the year and increased job creation in the second half."

At FACS we believe that several economists have tried to rely on there influential position to induce consumer spending. Remember the saying 'If your mother tells you she loves you get a second opinion'

Stay and Fight or Walk?

2009-12-22T08:29:00.000-08:00

Troubled home loans continued to mount in the nation's banks in the third quarter as even once-solid borrowers increasingly fell behind on their mortgage payments.

For the first quarter ever, the number of homes in foreclosure with mortgages serviced by U.S. national banks and savings and loans topped the 1-million mark, according to figures released Monday by the Office of Thrift Supervision and the Office of the Comptroller of the Currency.

The percentage of prime borrowers whose loans were 60 or more days past due doubled from the July-to-September period a year earlier. And more than half of all homeowners whose payments had been lowered through modification plans defaulted again.

The report, which covers about 34 million loans, or about 65% of all U.S. mortgages, underscores the obstacles to strengthening the nation's rickety housing market. Stubborn unemployment is making it tough for millions of homeowners to pay their debts. In addition, many people whose monthly installments have been lowered still are unable to keep up with their payments.

Of the mortgages serviced by national banks and thrifts, only 87.2% were current and performing. It was the sixth straight quarter that the quality of those home loan portfolios had slipped.

"Mortgage performance continued to decline as a result of continuing adverse economic conditions including rising unemployment and loss in home values," the report said.

Seriously delinquent mortgages -- loans 60 or more days past due and loans to delinquent borrowers who have filed for bankruptcy -- rose to 6.2% of the servicing portfolio. That's a 16.7% increase over the second quarter and a 73.8% increase from a year earlier, the report said.

Of those seriously delinquent loans, the number of homes in the foreclosure process reached 1.09 million, about 3.2% of all the loans surveyed.

The report highlighted some troubling trends as the housing market continues to struggle despite increasing sales and prices in many areas. Difficulties increased for holders of prime mortgages, with the percentage of those loans that were 60 days or more past due increasing to 3.2%, up almost 20% from the second quarter and more than double the rate of a year earlier.

-Christopher Rockey

FACS Endorses Moratorium

2009-12-18T13:57:00.000-08:00

Fannie Mae and Freddie Mac will suspend foreclosure evictions from December 19, 2009 through January 3, 2010. To help struggling families over the holidays, both owner-occupants and tenants living in properties foreclosed upon by Fannie Mae will not be evicted. Freddie Mac's suspension of evictions will be limited to properties up to four units.

In a similar move, Citigroup Inc. will suspend foreclosure sales and evictions for 30 days through January 17, 2010 for loans it owns. Citigroup's foreclosure moratorium, however, does not extend to loans it services on behalf of other investors. Given these developments, other lenders may follow suit, so check with the lender if appropriate.

I believe we can expect several lenders to follow suit in fact. The Moratorium Christmas rumor has been around for months now. I think it's a great move to not have the sheriff throw someone out of their home on Christmas Eve. By the way, it's a very voter initiative also.

-Christopher Rockey

FACS agrees on High Priced Homes

2009-12-17T16:35:00.000-08:00

Homeowners with mortgages of more than $1 million are defaulting at almost twice the U.S. rate and some are turning to so-called short sales to unload properties as stock-market losses and pay cuts squeeze wealthy borrowers.

“The rich aren’t as rich as they used to be,” said Alex Rodriguez, a Miami real estate agent with JM Group USA Inc., whose listings include a $2.9 million property marketed as a short sale because the price is less than the mortgage, leaving the bank with a loss. “People have reached the point where they can’t afford the carrying expenses of a $2 million home.”

Payments on about 12 percent of mortgages exceeding $1 million were 90 days or more overdue in September, compared with 6.3 percent on loans less than $250,000 and 7.4 percent on all U.S. mortgages, according to data from First American CoreLogic Inc., a Santa Ana, California-based research firm. The rate for mortgages above $1 million was 4.7 percent a year earlier.

As defaults on the biggest mortgages rise, borrowers such as Steve Holzknecht are turning to short sales to exit loans that now are larger than the market value of the house. In such a transaction, the lender agrees to accept less than a 100 percent payoff on a mortgage to expedite the property’s sale.

Holzknecht, 53, last month cut the asking price for his 7,280-square-foot home in Kirkland, Washington, by $550,000 to $1.25 million, lower than the balances of his two mortgages. Holzknecht, the former owner of Four Suns Inc., a Seattle luxury homebuilder that went out of business two months ago, constructed the Craftsman-style home in 2000. He declined to identify his lenders or the amount he owes.

Common Plight

“It’s not uncommon to see this situation on the high end of the market -- homes selling for less than it would cost to build them,” said Holzknecht’s agent, Joe Flick of Roanoke Group in Seattle. The property came on the market eight months ago priced at $1.85 million, he said.

Porter Michael Peterson, a 33-year-old linebacker for the National Football League’s Atlanta Falcons, bought a mansion near Tampa, Florida, four months ago for $1.1 million -- almost half the amount of the mortgage taken out by the sellers three years earlier, according to real estate records. Reggie Roberts, a spokesman for the Falcons, didn’t return a call seeking comment.

Short sales almost tripled to 40,000 in the first six months of 2009 from the same period a year earlier, according to data from the Office of Thrift Supervision. The bank regulator doesn’t break out short sales by size of mortgage.

Upside Down Mortgages

“You are just starting to see the tip of the iceberg with luxury short sales,” said Adrian Heyman, owner of Property Advisors, a real estate broker in Scottsdale, Arizona. “A lot of wealthy people are upside down in their mortgages and they just can’t afford the second or third vacation home anymore.”

There are 114,000 home loans of more than $1 million, according to First American. About a quarter of all mortgaged homes in the U.S. have loan balances bigger than their current value, known as being upside down or underwater, the data company said.

The Dow Jones Industrial Average lost more than half its value as it tumbled to a 12-year low in March. The number of U.S. households with a net worth of more than $1 million, not counting primary residences, fell to a five-year low of 6.7 million last year from a record 9.2 million in 2007, according to Spectrem Group, a Chicago-based consulting firm.

The financial-services industry was among the hardest hit by the recession. While Goldman Sachs Group Inc. set aside a record $16.7 billion in the first nine months of the year for employee bonuses, some Wall Street executives will see pay cuts, according to Johnson Associates Inc., a New York-based compensation-consulting firm.

Distress

Year-end bonuses for people at hedge funds, asset- management firms and insurance companies probably will drop an average 20 percent, the firm said.

“There’s a lot of distress,” said Tracy McLaughlin, co- owner of Morgan Lane Real Estate in Ross, California, north of San Francisco. “You have hedge-fund guys whose funds evaporated and a year-and-a-half later they’re still not working.”

The entry-level segment of the housing market was aided this year by an $8,000 first-time buyers tax credit that pushed resales to a 6.1 million annual pace in October, the highest since February 2007, the National Association of Realtors said in a Nov. 23 report.

President Barack Obama signed a bill last month extending the program into next year. The new version keeps the first-time buyer benefit and makes a smaller credit available to some move- up buyers. It can’t be used for homes priced above $800,000.

Luxury Market Left Out

The Federal Reserve set out in January to lower fixed mortgage rates by purchasing $1.25 trillion of bonds backed by home loans. The 30-year fixed rate for so-called conforming loans that can be bought by Fannie Mae and Freddie Mac dropped to an all-time low of 4.71 percent in the week ended Dec. 4, according to McLean, Virginia-based Freddie Mac, the second- largest U.S. mortgage financier. The rate rose to 4.81 percent last week.

The Fed purchases haven’t affected the high end of the market because they exclude so-called jumbo loans. Mortgages above the $729,750 limit set by Congress for the nation’s highest-priced markets cost almost 1 percentage point more than conforming loans, according to Keith Gumbinger, vice president at HSH Associates, a mortgage-data company in Pompton Plains, New Jersey. That’s quadruple the historic spread.

“There is no refinance market for you if you are underwater and outside the Fannie and Freddie framework,” Gumbinger said. “High-end neighborhoods are all suffering from the same problems of diminished income at a time when there is little equity to work with.”

Trapped by Market

Masoud Bokaie, co-founder of engineering firm BORM Associates Inc. in Irvine, California, owes $2.6 million on a 3,664-square-foot house with marble floors and granite counters about 10 miles (16 kilometers) away in Newport Beach. He’s waiting to hear whether lenders Luther Burbank Savings and Wells Fargo & Co. will approve a short sale.

He received an offer last month “close to” the loan balances, said Shirley Cameron, his agent at Coldwell Banker Platinum Properties in Irvine, who declined to specify how much. Bokaie said he doesn’t want to pay $7,000 a month in net costs including the property’s mortgages and taxes when real estate values in the area continue to tumble.

“What’s the point when the market is going in the other direction?” Bokaie said in an interview.

The U.S. median home price was $173,100 in October, 25 percent lower than its July 2006 peak, according to the National Association of Realtors. Prices fell 7.1 percent from a year earlier, the slowest pace of the year.

More Declines Expected

“The reason the low end stopped falling is because the government stepped in with affordable loans,” said Scott Simon, managing director at Pacific Investment Management Co., a Newport Beach-based investment firm that runs the world’s largest bond fund. “There is no political will to bail out a million-dollar house.”

Luxury home prices probably will drop another 5 percent before reaching a bottom in September 2010, according to Sam Khater, senior economist at First American.

Those declines may lead to losses on jumbo mortgages that dwarf the “haircut,” or discount to full value, that banks take on short sales or foreclosures of moderately priced homes, said Rodriguez, the agent with JM Group in Miami.

“When the bank takes a loss on a $3 million property it’s a lot bigger than the loss on a home with a $150,000 mortgage,” Rodriquez said.

I have said it a thousand times now and I will continue to say it. Any Lender big enough to give your clients everything they want is certainly big enough to take away everything they have. A mortgage on a high priced home three years ago for three million dollars is now only worth one million. They do a Short Sale like they should, make sure you are getting them 'Full Settlement Language' against any further potential recourse. We have clients all the time that think letting the home go to foreclosure will satisfy the exposure to deficiency. Not true I will say this, I would rather have the common exposure to a forty thousand dollar deficiency than a couple million. Short Sale or foreclosure in many states. That could potentially be catastrophic to the financial future of a seller for years to come.

-Christopher Rockey

-Christopher Rockey

Loss Mitigation and FACS

2009-12-16T09:02:00.000-08:00

The Treasury Department has started dispatching what it calls foreclosure "SWAT teams" to big banks to take a hard look at their operations.

The administration says it is cracking down on mortgage companies that aren't doing enough to implement President Obama's program to prevent foreclosures. The government hopes to help 3 million to 4 million people. But many economists say the program is stumbling, and that greater oversight is needed.

About 750,000 people have had their mortgage payments reduced so far through the president's Making Home Affordable plan. But the vast majority of those people — more than 95 percent — are just in the temporary trial stage of the program. Meanwhile, the foreclosure crisis remains one of the biggest threats to the economy.

One judge publicly announced "The behavior of these lenders are similar to the behaviors we saw with early century Gangsters." With that said all involved in these transactions run into several frustrations. It is important for Real Estate professionals especially working on Short Sales never loose their professionalism. Loss Mitigation is very much an art rather than a science this is truly a people business.

-Christopher Rockey

FACS Certification

2009-12-14T12:26:00.000-08:00

“FOR IMMEDIATE RELEASE”

Mortgage Resolution Services Introduces a National Foreclosure Alternative Certified Specialist designation for Realtors®

SACRAMENTO, CA. – Mortgage Resolution Services, the nation’s pre-foreclosure solution and Short Sale experts (www.mrseducation.com), and subsidiary of Fidelity National Financial (NYSE: FNF) has announced the creation of a Foreclosure Alternative Certified Specialist (FACS) designation for Real Estate professionals. The FACS designation will allow professionals to move short sale opportunities forward more quickly, avoiding time consuming and potential deal ending delays and missteps. Through the course participants will learn key short sale expectations and points of negotiation established by lenders. FACS will also assist professionals in expanding their abilities to help the over 3.9 million homeowners currently in default with selling their homes through short sale proceedings avoiding full-scale foreclosure.

“Short sales are very much an art not a science,” says Scott Thompson, founder of Mortgage Resolutions Services, a national expert on the subject of short sales, and one of two instructors in the FACS course. “The key is mastering the rules and expectations of the lenders, and then learning how to structure the sales for rapid approval. The FACS course teaches real estate professionals how to do this – efficiently and effectively.”

The FACS course will be held in major metropolitan cities throughout the nation during 2010. The cost for the one day course is well below other short sale courses available in the market, but the content is significantly superior. “Our FACS course is the most current and unique short sale education available,” says Christopher Rockey, Mortgage Resolutions Services, Director of Education, “because the course is always adapting. We work with lenders negotiating and closing short sale transactions on a daily basis. The FACS participants are the beneficiaries of this constant interaction and experience.”

Those Real Estate Professionals certified with the FACS designation will experience a turning point for their careers. With foreclosure filings exceeding over 300,000 for the ninth straight month, the landscape of the real estate market is changing and the knowledge needed for real estate professionals to be successful is clear. The FACS course is comprised of the best material needed to teach the highest level of pure short sale strategy and execution available in the market. For more information or to register for the FACS course please visit www.mrseducation.com.

Mortgage Resolution Services, Inc. provides a full range of services to the real estate community, all designed to support the efforts of brokers and agents working with homeowners overburdened with mortgage debt. MRS provides education, coaching and a comprehensive short sale processing services to help real estate professionals who are seeking to adjust their business plan to account for current market conditions.

Fidelity National Financial, Inc. (NYSE:FNF), is a leading provider of title insurance, specialty insurance, claims management services and information services. FNF is the nation's largest title insurance company through its title insurance underwriters - Fidelity National Title, Chicago Title, Commonwealth Land Title, Lawyers Title, Ticor Title, Security Union Title and Alamo Title - that collectively issue more title insurance policies than any other title company in the United States. FNF also provides flood insurance, personal lines insurance and home warranty insurance through its specialty insurance business. FNF also is a leading provider of outsourced claims management services to large corporate and public sector entities through its minority-owned subsidiary, Sedgwick CMS. FNF is also a leading information services company in the human resource, retail and transportation markets through another minority-owned subsidiary, Ceridian Corporation. More information about FNF can be found at www.fnf.com.

-You saw it here first!

FACS Flipping Warning

2009-12-10T09:00:00.000-08:00

We at FACS (Foreclosure Alternative Certified Specialist)have no intention to be on our soap box or to tell agents what they can or cannot do. Within the last year there has been a dramatic increase of ‘Option contract’ flipping. The good news is that yes option contracts are legal. The bad news is that an option contract is not good for anyone beyond the middle man investor. Option contracts expose a seller to a higher liability of recourse debt and could exploit a homeowner to greater tax related penalties. BEWARE of the legal and especially the ethical issues in option contracts I assure you staying away from them is the wisest way not to be sued by a past client. Besides I have had Cracker Jack box attorney’s tell me they would be more than happy to take any option contract case pro bono.

Flipping houses is becoming big business in the world of real estate investment. Unfortunately it takes all kinds of ‘flippers’ to make the world go around and some of them aren’t nearly as conscientious as others. If you are going to get into the business of flipping houses and want to make a living, and build a good reputation, for producing quality results you need to see to a few details throughout the process.

1) Do what needs to be done. Don’t cut corners and create situations that will put the family that purchases your home in personal or financial risk. You want to create a safe home for the family or person that ultimately makes the purchase. You do not accomplish this by taking shortcuts and using shoddy workmanship.
2) Avoid spending money that doesn’t need to be spent. By this I mean don’t spend money creating more work. Many people do this by deciding to tackle additions, rip out walls, or changing floor plans. These kinds of changes are best left to the buyer unless they will significantly improve the asking price you can bring in on the house. Otherwise spend the bulk of your money in kitchens and baths where they are best known for bringing in bigger profits.
3) If it ain’t broke don’t fix it. There is a lot of wisdom in this age-old saying. There is no reason to go in and fix something that doesn’t need to be fixed unless doing so will improve the value of the house to its buyers.
4) Always work within a budget. Most people set a budget when planning to flip houses but very few manage to work within that budget. This is the difference in making the profits you anticipated and putting the entire project at risk.
5) Create a home that the buyer will want to live in not the home that you will want to live in. You should never flip a house or design a flip according to your tastes; it is a recipe for disasters in more ways than one. First of all, it is unlikely that buyers will be able to afford it. Second, it sets you up for hurt feelings if a potential buyer rejects any small details. Third, it often raises the price you must seek for the property in order to cover the increased costs of decorating and designing according to your taste. Finally, it often leads to unnecessary expenses, which defeats the purpose of a quick flip type of project.
6) Time is money. Remember this in all things. The more time it takes to do the flip the more money it’s going to cost and the less money you are going to make. Plan small changes that have a big impact and can be done quickly to get the most out of your flip.
7) Never attempt a champagne flip unless you have a champagne budget to back it up. Just as flipping above the market is an unwise move it is equally unwise to flip a property beneath your target market as well. Do not attempt to flip a house in an upscale neighborhood if you can’t manage the upscale building supplies and appliances that will be needed in order to make it a success.

While these aren’t guarantees for success they are solid advice that will minimize the risks you face when flipping properties.

Keeping an ethical head will greatly reduce your personal exposure to legal issues and your reputation will be such that your investor pool should greatly increase.

-Christopher Rockey

FACS May Disagree

2009-12-09T08:55:00.000-08:00

Stop paying your mortgage.

That's the underlying message from a University of Arizona law professor, whose new paper is hitting a nerve as the nation's housing crisis enters its fourth year.

Brent White denies advocating walking away from a mortgage that is bigger than the value of a home. Nonetheless, he lays out a case of how it can be done, and his suggestions have gone viral, popping up online, in newspapers and on television.

White is hardly first to talk about the idea of walking away from a mortgage that is bigger than the value of a home. Nonetheless, his suggestions have gone viral and are popping up online, in newspapers and on television.

It's a move that can save some people money, but at the expense of wrecking their credit.

The topic is central to what's crippling the housing market: About one in four homeowners, or 10.7 million Americans, are considered underwater, meaning their mortgage exceeds their home value, according to real-estate information company First American CoreLogic.

In the markets hardest hit by the nation's housing bust — Florida, Arizona, California, Michigan and Nevada — the share of homeowners who are underwater is 40 percent.

"Millions of Americans would be better off financially if they did walk away," says White, who authored the paper "Underwater and Not Walking Away: Shame, Fear and the Social Management of the Housing Crisis."

What White is saying goes against everything that we've been taught about contracts. If you make a mortgage commitment, most people think you have a responsibility to pay.

On top of that, White suggests those who decide walk away should consider getting a new car or house before they default on their mortgage, which will constrain their credit.

Mr. White, here is my question to your cavalier media seeking agenda. While standing by your name as a Professor, aren't you advising clients to walk away from debt that may hold recourse? Mr. White may not be familiar with all the facts of recourse debt even in his own state of Arizona which is commonly mistaken as an anti deficiency state. In Arizona they have a unique definition of purchase money to any other state. Lenders only have recourse on non purchase money which can be defined in Arizona exclusively as 'Cash Out.' With that said, if there is a potential for recourse (Arizona also carries a 2.5 acre property recourse law) and Professor White is advising homeowners to walk away? I believe because of the nature of his job status he may be taking a huge public liability. Of course we should show some sense of forgiveness, after all he is only an ASU professor.

Just teasing Sun Devils! I wish you all the luck, Foreclosure Alternatives are always the way to go!

-Christopher Rockey

Your FICO Score

2009-11-29T19:59:00.000-08:00

Borrowers already knew that late payments hurt their credit scores, but for the first time, they now know the extent of that damage.

Did you max out your credit card? Expect a credit score drop of 10 to 45 points. Declare bankruptcy? Your score will plummet by up to 240 points, and your odds of getting credit will nosedive with it.

The "damage points" data, unveiled recently by FICO, are part of the most revealing glimpse into the firm's once-secret -- and still mysterious -- credit scoring model. The new information discloses how many points borrowers' scores will drop when they make the most-common mistakes.

'Help People Understand' Scores

"I hope this information will help people to better understand FICO scores and the value for them of avoiding credit missteps. It illustrates key points such as the higher your score, the farther it can fall if you stumble," says FICO spokesman Craig Watts. "Getting and maintaining a good score isn't complicated. We all just need to pay our bills on time, keep credit card balances low and take on new debt sparingly. "

The greater transparency about FICO scores is important because American consumers' ability to get credit rises and falls with the number. FICO, the company that pioneered credit scoring, assigns consumers a three-digit number from 300 to 850, depending on how well they handle credit. Other companies also offer scores, but FICO's version is the most widely used by lenders in determining whether a consumer can borrow, and at what rate.

FICO's credit score has been around for decades, but only within the past decade have consumers gradually gained access to theirs. Though the raw numbers can be purchased, how they're figured remains a FICO secret, as closely guarded as the formula for Coca-Cola. Until Thursday, FICO revealed only broad categories of factors influencing the score, but not the number of points at stake for consumers who fail to pay as agreed. The "damage points" information, revealed in a report by personal finance writer Liz Pulliam Weston, will be made available through its myFICO.com Web site starting this weekend.

FICO's information shows that bankruptcy does the most serious damage to a credit score (up to 240 points), followed by foreclosure (up to 160 points) while maxing out a credit card has the least numerical impact (as few as 10 points).

Those with good or excellent credit -- so-called prime borrowers -- put more points at risk with each mistake. For example, someone with an average credit score of 680 who pays a bill 30 days late will see a drop of 60 to 80 points. But for someone with an excellent credit score -- 780 -- that same delinquency can send a FICO score tumbling by 90 to 100 points.

If you earn your FACS certification as a Real Estate Professional you get a hand out showing what the three major credit Bureaus told me in a face to face interview specifically on the topic of Short Sale's.

-Christopher Rockey

Defaulting on Your Mortgage? Is Your Agent FACS Certified?

2009-11-28T10:39:00.001-08:00

Due to the national mortgage failure rate there are several alternatives available to homeowners to avoid Foreclosure. If you are considering a Short Sale make sure your agent is FACS Certified. The Foreclosure Alternative Certified Specialist is the highest level of Short Sale education in the country according to Fidelity National Financial. Beyond Short Sale's, the agent's who have earned FACS will have a superior knowledge of Loan Modification, Short Refinance, and several other options.

Activity in Fannie Mae’s portfolios declined according to most metrics during the month of October as compared to September. Delinquency rates reported, however, continued to increase.

In their monthly summary, Fannie Mae reported the corporation’s Book of Business declined at a compound annualized rate of (3.1) percent during the month. The current Book of Business is $3.23 trillion, an increase 4.8 percent thus far in 2009.

The retained portfolio declined 27.8 percent to $771.5 billion during October. The portfolio has declined 2.4 percent thus far in 2009. The principal decline was in non-Fannie Mae Agency Securities which dropped from $60.6 billion to $49.4 billion. Mortgage loans increased by about $5 billion and non-Agency securities decreased a little over $5 billion. Fannie Mae, along with Freddie Mac is mandated to reduce its portfolio by 10 percent a year beginning in 2010 until the portfolio of each corporation reaches $250 billion.

It is imperative for agent's to know they have no choice but to be in the default market if they are planning to do Real Estate over the next ten years. The Foreclosure Alternative Certified Specialist (FACS) designation should be mandatory for Real Estate Professionals.

-Christopher Rockey

Why You Need to Earn the FACS Certification

2009-11-27T23:42:00.000-08:00

Option-ARMs: File under, "It sounded good at the time."

These exotic mortgages allowed homebuyers to come to closing with little cash and choose, monthly, how much to pay: interest and principal, interest only, or a minimum amount less than the interest due.

Of course, the last option is the one 93% of option-ARM buyers selected, according to a new report released this week by Standard & Poors.

But eventually, everyone has to pay the piper.

Nearly all of the 350,000 option-ARM borrowers owe more than when they first bought their homes thanks to the unpaid interest accumulating. And many loans written during the first big wave, which started in 2004, are getting ready for their five-year reset, when they become standard amortizing loans. Additionally, some newer loans will reset early if the accumulated interest has pushed the loan-to-value ratio above 110% to 125%.

That means borrowers are about to start paying very hefty prices for their homes. In one scenario outlined in the S&P report, the payment on a $400,000 mortgage jumps from $1,287 to $2,593.

25% default rate
But that doesn't just spell bad news for borrowers. Some industry pessimists say the looming default problem could have the power to derail the nascent housing market recovery. "The crux of the matter is that as soon as these mortgages recast, the history is that they will default," said Brian Grow, one of the S&P report's coauthors.

And the newer the loans, the worse they will perform, the report said. The last year that any option-ARMs were issued was 2007. In the first 20 months after issuance, this vintage of option-ARMs had an average default rate of just over 22%.

That includes all option-ARMs issued in 2007. But if you calculate default rates for only 2007 option-ARM borrowers who are now underwater, the default rate jumps to 25% after just 20 months, according to S&P.

So, while there may not be an awful lot of these loans out there, their high default rates will have an outsized influence on housing markets, adding to already bloated foreclosure inventories and driving prices down further.

Bubble markets
And the markets where they'll produce the most foreclosures are still among the most vulnerable in the nation.

Option ARMs were most popular in bubble markets -- California, Nevada, Florida and Arizona -- where double digit home annual price increases put the cost of buying a home out of reach.

In fact, 60% of these loans went to residents of California and other Western states, places where prices have fallen the most, according to report coauthor Diane Westerback. "The geography is negative for these products," she said.

Many borrowers in these places could only afford a home if they chose the option ARM. Many counted on continued hot market conditions to add value to their homes. The extra equity could then be tapped to pay their bills.

We all know how that worked out.

Home prices in many of the markets where option ARMs are most concentrated have fallen 30%, 40% or more. When the loans recast, most borrowers will find themselves severely underwater.

"Because borrowers of [options ARMs] are in a much worse position," said Westerback. "You'll see defaults rising very rapidly."

And most option ARM borrowers will not be good candidates for refinancing or mortgage modifications because their loan-to-value ratios will be far too high. Under the administration's Making Home Affordable program, for example, mortgages with balances that exceed 125% of the home's value are not eligible for help.

Not so white lies
There is another little problem that many option-ARM borrowers seeking refinancing would face: "Upwards of 80% of were stated-income loans," said Westerback.

These are the so-called "liar loans" in which lenders did not verify that borrowers earned as much money as they said they did. Lenders may not be able to modify mortgages because many of the borrowers' income could not stand up to the scrutiny. Borrowers may also not want to go through underwriting again because they could be held legally liable for deliberate inaccuracies on their original applications.

Add to those conditions the still fragile economy and high unemployment rates, and you have a recipe for disaster.

I had a conversation wit h the HR Director for Layton Construction this evening who said on the commercial side they expect 2010 to be the toughest year to get work since the great Depression. I will form an opinion on Commercial Real Estate soon but I can tell you, historical trends are pointing in a bad direction!

-Christopher Rockey

FACS

2009-11-25T08:52:00.000-08:00

Foreclosure Alternative Certified Specialist (FACS)
In 2008 Fidelity National Financial (FNF) acquired a California based company that specializes in pre-foreclosure and Short Sale compliance. This company, Mortgage Resolution Services, since it’s FNF acquisition has had the opportunity to make a very serious place for itself in the Short Sale industry. Because Mortgage Resolution Services has an affiliation with FNF they are able have face to face appointments with lenders. These meetings are specifically made to learn the lenders language in the Short Sale process.
Mortgage Resolution Services has a unique ability to teach the lenders language and then pass that education on to Real Estate professionals. The FACS certification is specific to Short Sales but not exclusive. Because this is a foreclosure Alternative certification, we present all avenues to avoiding foreclosure including, Loan Modification, Short Refinance, High LTV refinance and others.
The FACS course is the only interactive course that requires participation from all attendees. Each student is broken into a team with one common goal much like in real life. This is also a unique teaching method rather than other certifications that bolt a desk to the ground, lock the doors and make you listen to an instructor for two days.
Mortgage Resolution Services is highly sensitive of its FACS education and only teaches very specific Short Sale strategy and execution. Because our course is the only one day Short Sale, it is fast paced a lot of fun and cost efficient.
Scott Thompson the founder of Mortgage Resolution Services who authored the FACS course has been recognized as an industry expert by National Association of Realtors. NAR has had Scott Thompson out to Washington DC on numerous occasions for national webinar education on the subject of Short Sales. Christopher Rockey, the Director of Education for Mortgage Resolution Services and the FACS certification is also a National Speaker on Short Sales.
FACS is the highest level of Short Sale strategy and execution offered for your budget as a one day course. If you are an agent interested in how to get short Sales done in a more efficient manner, specific strategies on settling with junior lien holders, how to protect commissions and interested in depth training on Risk Management, FACS should be highly considered as the training course for you and your team of Real Estate Professionals.

FACS

2009-11-25T08:48:00.000-08:00

Media Advisory

“FOR IMMEDIATE RELEASE” Fidelity National Financial

Rancho Cordova, California www.mrseducation.com

November 24th, 2009 916.631.6180

Fidelity National Financial Implement’s National Pre-Foreclosure Compliance Course for Realtors®

SACRAMENTO, CA. – Fidelity National Financials pre-foreclosure solution and Short Sale arm known as Mortgage Resolution Services (www.mrseducation.com) has announced the Foreclosure Alternative Certified Specialist, FACS designation for Real Estate professionals today on a national platform. Mortgage Resolution Services is a national Short Sale processing center located just outside of Sacramento California.

Scott Thompson the founder of Mortgage Resolution Services is considered a national expert who has already been sought out nationally for expert advice on the subject of Short Sales. Thompson will be one of two instructors who was recently quoted in Time magazine saying “Short Sale’s are very much an Art not a Science.” Christopher Rockey, Director of Education for the FACS certification is recently quoted as saying “It’s important for the Realtor® to know that any lender big enough to give their clients everything they want is certainly big enough to take away everything the homeowner has.”

The FACS course will be unique to any other course because of the affiliation Mortgage Resolution Services has with FNF. Tom Bolinger, twenty year FNF employee heads up Mortgage Resolution Services and is quoted as saying “Our FACS Course and Instructors have a more unique understanding of the lenders language than the lenders themselves in some cases.” This understanding and ability to communicate that language to Realtors® will make this one day training a turning point for the careers of Real Estate professionals nationwide.

Thompson and Rockey the instructors for the FACS course, have taken part in writing Short Sale certification courses in the past. The two believe they have comprised the best of the material to bring the highest level of pure Short Sale strategy and execution on the market.

Please note for registration information please go online to www.mrseducation.com
# # #

Uncle Ben

2009-11-24T08:51:00.000-08:00

Federal Reserve Chairman Ben Bernanke has a tough road ahead.
Very tough.
Bernanke, whose four-year term expires in January, is certain to face a contentious Senate banking panel at his confirmation hearing, set for Dec. 3. He is also defending against the sharpest attack on Federal Reserve powers ever.

The latest blow came last week, when a House panel overwhelmingly agreed to tack on to must-pass regulatory reform a proposal to dig into the Fed's books, despite attempts by Rep. Barney Frank, D-Mass., to make it less intrusive.

Fed watchers say they expect that Bernanke will be confirmed for a second term as chairman. But he may get the fewest favorable votes on record - and end up at the helm of a vastly changed Federal Reserve.

"It's going to wind up to be a very different institution," said American Enterprise Institute scholar Vincent Reinhart, a former director of the Fed's division of monetary affairs. "At least on the Federal Reserve part, Congress is going to converge on something that's tougher on the Fed. It's a way to vent anger. And fundamentally people are angry."

What Congress has in store for the Fed
While many credit Bernanke for saving the economy from falling into the next Great Depression, some in Congress blame the Fed - and Bernanke - for having failed to restrain the housing bubble. Others say he has gone too far in the financial system bailouts.

Interesting to see why Mr. Frank wants such a high level of anonymity? I wonder if it has anything to do with intrusions in his own personal life?

-Christopher Rockey

Deed for Lease Program

2009-11-06T08:18:00.000-08:00

Fannie Mae announced Thursday that it is implementing a program under which qualifying homeowners facing foreclosure will be able to remain in their homes as renters if they voluntary transfer the property deed back to the lender.

The GSE’s new Deed for Lease Program is designed for borrowers who do not qualify for or have not been able to sustain other loan-workout solutions, such as a modification. Under the program, borrowers transfer their property to the lender by completing a deed in lieu of foreclosure, and then lease back the house at market rate.
“The Deed for Lease Program provides an additional option for qualifying homeowners who are facing foreclosure and are not eligible for modifications,” said Jay Ryan, Fannie Mae’s VP. “This new program helps eliminate some of the uncertainty of foreclosure, keeps families and tenants in their homes during a transitional period, and helps to stabilize neighborhoods and communities.”

To participate in the program, borrowers must live in the home as their primary residence and must be released from any subordinate liens on the property. Investor properties with tenants are also eligible for the program.

Prospective renters must show that they can afford to pay the new market rental rate and must be able to document that the rental payment is no more than 31 percent of their gross income.

Leases under the new program may be up to 12 months, with the possibility of term renewal or month-to-month extensions after that period.

A Deed for Lease property that is subsequently sold includes an assignment of the lease to the buyer.

Loan Modification Failure Rate

2009-11-04T14:24:00.001-08:00

I have spent the last several years preaching Short Sales and the importance of recognizing there significance in the market place. Now with the national changes in the political climate the 'Anti Foreclosure Parade' marches on. Here are some facts about Loan modification which I am anxious to stop writing about. It appears the HAMP program is about as significant as a Big Foot sighting!
In what it termed a "conservative projection," Fitch Ratings says 65% to 75% of securitized subprime loan modifications will fall back into default a year after modification.

The findings were included in Fitch's semiannual report on loss mitigation actions taken by servicers on securitized loans. The report, which included information from Fitch-rated servicers and data from First American Loan Performance, found that, during the first half of 2009, about 30% of modified subprime loans fell back into default by the six-month mark and about 60% redefaulted 12 months after modification.

These numbers actually understate the number of loans that fail after modification, Fitch says, because the figures do not include modified loans that were subsequently re-modified or liquidated. While the rating agency adds that the number of prime-loan modifications initiated this time last year is insufficient for Fitch to determine a 12-month trend, at six months, the statistics on prime redefaults are similar to those for subprime and Alt-A loans.

By analyzing a pool of loan modifications from the third quarter of 2008 - a pool that included prime loans but mostly comprised Alt-A and subprime loans - Fitch found that 34% of the loans are current today. Five percent are in 30-day buckets, 17% received a second modification and 8% have been liquidated. These statistics support Fitch's contention that its 65%-75% redefault projection is conservative.

In explaining why modifications may not necessarily be the best route for servicers to take with certain borrowers, Fitch warns its rated servicers against re-modifying loans for the sake of improving performance data.

"The use of multiple mods for the sole purpose of managing default statistics and advances could not only put at risk a servicer's, as well as the transaction's, ratings, but also could greatly increase the ultimate loss to the investor," the report's authors state.

Modifications as a percentage of loan resolutions (i.e., actions that result in home retention as well as those that result in foreclosure) grew in the first six months of the year when compared to the six months ending Dec. 31, 2008. Loan modifications accounted for 58.1% of residential mortgage-backed securities loan resolutions in the first half of 2009, whereas they made up only 39.6% of loan resolutions in the last half of 2008. In total, 88.5% of the loans worked by Fitch-rated servicers' loss mitigation departments between January and June 2009 resulted in workouts. For the prior six-month period, 71.4% of cases resulted in workouts.

Looking for a Loan Modification, good luck. All too many loan moods are in favor of the lender and not the consumer!

-Christopher Rockey

Does Loan Modification turn your Mortgage into Recourse Debt?

2009-11-02T09:25:00.000-08:00

I have been asked this question several times in the recent past. I have always told Real Estate professionals that as long as the the original purchase money deed of trust is recorded on the property, the lender has no recourse. In LA last week I had a couple agents put up a very excellent argument on why the debt should become recourse. I decided to do the research beyond my own suspicion and seek the advice from a REPUTABLE attorney!

Under California law (Civil Code Section 580b), if a lender makes a loan to enable a borrower to buy a 1-4 unit property which they live in, the lender has no recourse against the borrower. They can only take (foreclose) the property. They cannot get a judgment against the borrower if the property is not worth the amount owed on the loan. This is called an “acquisition loan”. If the borrower later refinances this loan by getting a new loan, this protection is generally lost because the new loan was not obtained to acquire the property. That makes sense. But what about a loan modification?

Recently, several clients have had lenders (or collection companies) tell them that their loans became recourse because they got a loan modification. From what I can see, this appears to be false and is no doubt said in an attempt to collect some money even when there is no recourse.

The First reason that this is false is that the loan and security (deed of trust) have not changed. It is still the acquisition loan and the same date of purchase recorded security. Second, there is a rule in law called “substitution”. The substitution doctrine applies when an acquisition loan is refinanced by the lender holding the original acquisition debt. The acquisition portion refinanced retains its purchase money character and the anti-deficiency protections of CCP §580(b) apply. (Union Bank v. Wendland, 1976). Further there is legal authority that the protection extends to situations where the “beneficiary of the purchase-money loan ‘refinances’ the loan, ie: same lender, borrower, and security, but different loan amount. From these sources, it appears fairly clear that a modification will not alone convert a non-recourse acquisition loan into a recourse loan. As the court said in the Union Bank case, “…. the protections of the anti-deficiency statutes can not be avoided because of some clever paper shuffling on the part of the lender. To allow such is a circumvention of the anti-deficiency statutes.”

It was also clearly outlined to me that if the lender did try to actually seek a judgement a trial could easily be attained. With that said any first year internet attorney could win that case by illustrating the unpopular lender practices now perceived by the American public as villainous.

-Christopher Rockey

Raising the Limits

2009-10-30T16:15:00.000-07:00

President Obama is expected to sign a resolution passed late yesterday by Congress extending the current limits for Fannie Mae, Freddie Mac, and FHA loans through 2010. The limits were set to expire at the end of this year. This is especially critical for California, where more than 80 percent of all loans are financed by Fannie Mae, Freddie Mac, or FHA, and will help maintain the positive signs we are now seeing in California’s mortgage market. President Obama is expected to sign the resolution today or tomorrow as part of a broader piece of budgetary legislation that will prevent a government shutdown.

While home prices in California have declined, the demand for housing has not. The market has been dominated by first-time home buyers who have faced a shortage of financing opportunities. The loan limits are set at 125 percent of local median home sales prices, up to a maximum of $729,750 in high-cost areas, including many regions in California. Sales in move-up and high-end markets have been constrained this year; the loan limits extension will help qualified home buyers in these markets to move forward with their purchases.

Although loan limits are safe through 2010, there is still work to be done. Congress has yet to act to extend the First Time Home Buyer Tax Credit past its current Nov. 30 expiration date. Yet the impact of the home buyer tax credit is clear: A C.A.R. survey of first-time home buyers shows that 40 percent would not have purchased a home without the tax credit.

In tandem with our efforts to extend the current loan limits, C.A.R. and NAR are vigorously working to have the soon-to-expire federal First Time Home Buyer Tax Credit extended, and we need your help.

I am asking every one of you to contact your congressional representative today. In the Senate, an amendment offered by Senators Dodd, Lieberman, and Isakson will both extend the program into 2010 and expand the eligibility requirements. The amendment has been attached to a bill that will extend unemployment insurance benefits. We expect the bill will pass the Senate and then be voted on by the House of Representatives.

Please call your Congressional Representative to urge them to support the Unemployment Extension bill that contains the home buyer tax credit. Please call (800) 961-3302 and enter your PIN number 195517903 when you are prompted to be connected to your legislator’s office.

Thank you for your help with this effort. Together, we can make a difference in Washington, D.C.

rockey@mresolution.com

FACS Foreclosure Alternative Certified Specialist

2009-10-28T11:51:00.000-07:00

Although the FACS certification course is a national training platform, we really need to have a very specific partnership with entities that have made the right commitment to this market.

As millions of American families struggle to keep their homes not knowing where to go for help, the Northeast Atlanta Metro Association of REALTORS® (NAMAR) wants to help those homeowners learn how to avoid foreclosure and keep their home, and have launched www.UnnecessaryForeclosure.com to do so.

“The prospect of losing one's home can be overwhelming and stressful for homeowners,” says Tom O’Rourke, NAMAR's chief executive officer and executive vice president. “From predatory lending to topics like forbearance and reinstatement to short sales and where to find help that one can trust, foreclosure is a confusing and complicated process. UnnecessaryForeclosure.com provides honest, practical tips and advice in plain, easy-to-understand language.”

The Web site offers a list of nonprofit organizations dedicated to helping consumers avoid foreclosure, warning signs of predatory lenders and information on mortgages that could lead to trouble for homeowners. Detailed information on short sales and the short sale process and the tax implications of foreclosure is also available. Among the most useful pieces of information on the site is a list of common solutions that can be reached with a lender, such as repayment or loan modification. The site also offers references for consumers, which includes a series of informational brochures to educate homeowners and consumers on today's mortgage options. Lastly, the site provides information on how a REALTOR® can help. REALTORS® are in the business of homeownership, and can offer invaluable guidance and options for a homeowner in need.

“If a homeowner is behind on mortgage payments for any reason, or expecting to have problems in the near future, they should be proactive and work with experts and their lenders to find a solution now to avoid losing their home,” continues O’Rourke.

NAMAR has produced a series of videocasts to help consumers understand their options and give tips on how to avoid losing one's home. These videos can also be found at www.UnnecessaryForeclosure.com.

-Christopher Rockey

NAHREP / AAREA Las Vegas

2009-10-23T10:03:00.000-07:00

Last week I spoke in LA for NAHREP and this week I am leaving to speak in Las Vegas. We will be rolling out our FACS certification course (Foreclosure Alternative Certified Specialist) and Scott Thompson the founder of our company and I both are on panels to speak to the public about the nature of our market and Short Sale compliance.
Hispanic and Asian Real Estate professionals and industry business leaders will convene next week at the 2009 AREAA/NAHREP Real Estate and Marketing Conference in Las Vegas to discuss the state of the current multicultural homebuyer market. Hosted by the Asian Real Estate Association of America and the National Association of Hispanic Real Estate Professionals, the meeting is one of the largest industry gatherings of multicultural real estate professionals and is expected to draw 1,500 practitioners that actively work with the underserved market.

The conference will feature 22 different sessions that include general session discussions about the state of the multicultural real estate market and practitioner-based tips workshops on topics like foreclosures, short sales, appraisals, loan modifications and more. National leaders such as FHA Commissioner Dave Stevens; Lloyd Frink, CEO of Zillow; Economists Lawrence Yun, National Association of Realtors; and Eugenio Aleman, Wells Fargo; Political Consultant Howard Glaser; Barrett Burns, CEO of Vantage Score and senior executives from Fannie Mae, Freddie Mac, Bank of America, Chase and Wells Fargo will participate in the event. Leading servicers and asset managers will also offer insights about current trends in the foreclosure market.

Asian, Hispanic and African American homeowners have been broadly impacted in the foreclosure crisis due to the high proportion of sub-prime mortgages used by them to purchase or refinance homes. Many minority neighborhoods have been devastated by foreclosure. Real estate and housing leaders will discuss strategies to help stabilize these neighborhoods, rescue beleaguered homeowners and make it possible for new buyers to purchase homes while government tax incentives are available and housing is affordable.

If Consumers Suffer we all Suffer!

2009-10-19T16:59:00.000-07:00

You heard it here first YSP is gone effective January 1st Mortgage Brokers will not be allowed Yield Spread Premium from lenders. So what does the industry as a whole do? Change the name name from YSP to SPS (Which may or may not stick) and allow the oversight committee to regulate the amount of SPS granted to 1.5%. If you are not quite sure what that means it's simple, more good mortgage brokers are going to Short Sale their houses because they will not have the income necessary to maintain there way of life. Also, larger front end points will become more and more common. Today industry standard is 1% loan Origination and by January first the industry should be at about three points which will force more qualified buyers to the big lending mills that don't get paid on points but volume. Other industry changes are coming as well:

REO Buyer Can Select Escrow and Title: Effective October 11, 2009, the Buyer's Choice Act prohibits an REO lender selling residential property up to four units from directly or indirectly requiring the buyer to purchase escrow services or title insurance from any particular company. A buyer, however, who has received written notice of the right to make an independent selection, may agree to the REO lender's escrow or title recommendations. An REO lender that violates this law can be held liable for three times the charges the buyer incurred, whereas a violation by the seller's agent may be subject to license disciplinary action. This law expires on January 1, 2015. Assembly Bill 957.
No Advance Fee Loan Modifications: Starting October 11, 2009, a new law prohibits anyone from claiming any compensation for negotiating or arranging a loan modification until after that person fully performs each and every service as promised. Aimed at combating loan modification scams, this ban applies to upfront fees collected by real estate agents and attorneys. The ban expires on January 1, 2013. Also effective immediately, anyone who negotiates or arranges a loan modification must give the borrower a specified notice that paying a third-party for loan modification services is unnecessary. These new requirements apply to mortgage loans secured by residential property up to four units, with certain exceptions for lenders and loan servicers acting on their own behalf. Violations can be penalized by, among other things, a $10,000 fine plus one-year imprisonment for individuals, or a $50,000 fine for businesses. Real estate brokers with existing Advance Fee Loan Modification Agreements reviewed by the Department of Real Estate (DRE) can no longer, as of October 11, 2009, enter into these agreements or collect advance fees. Agreements entered into and advance fees collected before October 11, 2009 are not affected. For the DRE announcement, go to http://www.dre.ca.gov/pdf_docs/SB94WebAnnouncement(brokers).pdf. Senate Bill 94.
Advance Fee Redefined: Aside from loan modifications discussed above, Senate Bill 94 also broadens the definition of an advance fee which must be specially handled by real estate agents, such as by submitting an advance fee agreement for DRE review and placing funds received into a broker's trust account. Under the new definition that took effect on October 11, 2009, agents cannot separate advance fees or services into components to avoid the advance fee requirements. More specifically, an advance fee is now defined as "a fee, regardless of the form, claimed, demanded, charged, received, or collected by a licensee from a principal before fully completing each and every service the licensee contracted to perform, or represented would be performed." Exceptions include advertisements in newspapers of general circulation, tenant prescreening fees, and tenant security deposits. Senate Bill 94.
Mortgage Loan Originators Regulated: Beginning in December 2010, a real estate licensee acting as mortgage loan originator must obtain a license endorsement, which entails education, written testing, and reporting requirements. A mortgage loan originator is anyone who, for compensation or gain, takes a mortgage loan application or offers or negotiates terms of a mortgage loan for residential property containing one-to-four units. Exemptions include real estate agents who only engage in selling, buying, or leasing activities, unless compensated by a lender or mortgage loan originator. This license endorsement requirement comports with the creation of a Nationwide Mortgage Licensing System and Registry under recent federal law. Finance lenders and residential mortgage lenders under the Department of Corporation must also register in the nationwide system. Additionally, if a real estate broker or the broker's salesperson makes, arranges, or services loans secured by residential property containing one-to-four units, the broker must notify the DRE by January 31, 2010 or within 30 days of commencing such loan activity, whichever is later. Senate Bill 36.
Mortgage Broker Activities Restricted: Commencing January 1, 2010, a mortgage broker will be deemed a fiduciary with a duty to place the borrower's economic interest above his or her own. This fiduciary duty pertains to a mortgage broker who makes loans secured by residential property of one-to-four units. Also starting January 1, 2010, the law will strictly regulate higher-priced mortgage loans as defined, including requiring upfront disclosure if a mortgage broker only arranges higher-priced mortgage loans, restricting prepayment penalties and yield spread premiums, prohibiting negative amortization, and prohibiting mortgage brokers from steering borrowers to higher-cost loans. Assembly Bill 260.
Appraisal Industry Oversight: The Office of Real Estate Appraisers (OREA) will have regulatory oversight of appraisal management companies, which gained prominence after Fannie Mae and Freddie Mac adopted the Home Valuation Code of Conduct (HVCC). Starting January 1, 2010, the OREA must implement a registration system for appraisal management companies, including fingerprinting and background checks for persons with operational authority as defined. On a separate note, this law clarifies what conduct constitutes improperly influencing the appraisal process by anyone with an interest in a real estate transaction. Such prohibited conduct includes withholding or threatening to withhold an appraisal fee, withholding or threatening to withhold future appraisal business, and promising future business, promotions, or compensation. Senate Bill 237.
Mortgage Fraud Becomes a State Crime: As of January 1, 2010, anyone who deliberately makes any misrepresentation or omission during the mortgage lending process with the intent of influencing that process will be guilty of mortgage fraud under California law. A violation of this law is a crime punishable by one-year imprisonment. Under existing federal law, loan fraud against a federally-insured lender is a crime punishable by a $1 million fine, plus one-year imprisonment (18 U.S.C. section 1014). Senate Bill 239.
Increase in Homestead Exemptions: Coming into effect on January 1, 2010, the homestead exemption protecting a homeowner's equity from judgment creditors has been increased by $25,000 across the board to $75,000 for individuals, $100,000 for married couples or family units as specified, and $175,000 for persons over 65 years, disabled, or over 55 years with limited income as specified. Assembly Bill 1046.
60-Day Notice to Terminate Tenants Extended: Existing law generally requiring a 60-day notice to terminate a month-to-month residential tenant, which was originally slated to sunset on January 1, 2010, has been extended indefinitely. A 30-day notice to terminate is sufficient if the tenant has lived in the property for less than one year, or if the landlord has sold the property and certain requirements are met as specified in our standard-form Notice of Termination of Tenancy (C.A.R. Form NTT). The 60-day notice requirement does not apply to fixed-term leases, such as a one-year lease. Other laws address tenants in properties foreclosed upon. Senate Bill 290.

The first Wave of the Hurricane

2009-10-13T13:28:00.000-07:00

I call this 'The First Wave of the Hurricane of Lawsuits' because I expect many more. In each lawsuit the homeowner will be the troubled waters of the unpredictable storm. The next wave, Homeowners suing their attorney's in the Loan Modification process. Where does it end? Homeowners suing the lenders. Lenders suing homeowners for deficiency judgments. Homeowners suing failed attorney's. The state and counties filing suit against the lenders and the attorney's. We have created a financial hurricane which comes from the exact same 'Mortgage Storm' that GREED created in the first place. No accountability invites hurricanes to rip through our financial district with fierce vengeance and this hurricane I assure you will not go away after a few days.

During the housing boom, mortgage lenders were doling out the dough, giving loans to people who could never have qualified before.

Now, homeowners and government officials are increasingly taking these institutions to court, alleging unfair and predatory practices. While many of these suits are still winding their way through the legal system, some banks have already settled for millions of dollars.

The defendants include the biggest names in the business -- from Wells Fargo (WFC, Fortune 500) to Countrywide Financial to Citigroup (C, Fortune 500).

"Borrowers are looking to the legal system for help in keeping their houses," said Gary Klein, a partner in Boston-based Roddy Klein & Ryan, which focuses on consumer law. "There are more cases pending than I've ever seen in my 23-year career."

Homeowners are seeking the courts' help either individually or as part of class action lawsuits. With foreclosures continuing to rise, borrowers are looking to force banks to modify unaffordable loans or to stop them from foreclosing on homes. Often, they also seek money.

To be sure, banks have faced unfair lending lawsuits for years and have paid millions of dollars in settlements. But the recent housing boom was fueled by questionable and exotic loans that many borrowers had no hope of repaying.

Some of the cases involve the classic predatory lending schemes, where certain borrowers were given mortgages with high interest rates, while other suits are combating loans that are ultimately unaffordable.

In addition, the mortgage industry preyed on a wider group during the housing boom, capturing more middle-class borrowers. These homeowners have more means to hire attorneys.

Those in more dire financial straits are turning to lawyers who work for non-profit legal services agencies or who agree to seek payment from the banks if they win the case.

Some borrowers who hire lawyers to defend them against a foreclosure sale are successful in getting the courts to stop or delay the proceeding, at least until the bank considers whether a loan modification would be more appropriate.

Then, there are class action suits on behalf of hundreds or thousands of homeowners. In one of his current class action cases, Klein is suing Wells Fargo because one of the banks Wells Fargo now owns originated payment option adjustable-rate mortgages. This type of loan allows borrowers to make very low monthly payments, and the unpaid interest is then added to the principal. Many borrowers end up defaulting on their payments.

The suit's goal is to get Wells Fargo to restructure the borrowers' mortgages to make them affordable, Klein said.

"They are looking for a second chance," he said of the homeowners.

The suit also seeks damages, particularly for those borrowers who've already lost their homes or paid off their loans.

Wells Fargo said it was filing a motion to dismiss the case, calling the claims baseless and a mischaracterization of the bank's long-standing commitment to responsible lending and the pricing practices.

Attorneys general file suit
Meanwhile, state attorneys general are likewise filing suit against the mortgage industry's major players, alleging predatory lending and deceptive business practices. Banks are also getting hit with suits from the NAACP, some cities and individuals claiming discrimination against minority borrowers.

In Massachusetts, Attorney General Martha Coakley reached a $10 million settlement in June with subprime lender Fremont Investment & Loan for its unfair lending practices. The state will distribute $5 million to state residents with Freemont loans, and another $3 million will go foreclosure relief and homeowners education. The rest will go to the state and to cover costs.

The California-based lender agreed to do more loan modifications and not to foreclose upon up to 2,200 loans without notifying the attorney general's office first and seeking court approval in certain circumstances.

"The American dream of homeownership has turned into a nightmare for many borrowers because of predatory lending practices," said Massachusetts Attorney General Martha Coakley, when the settlement was announced in June. "We will continue to hold companies responsible for their role in the foreclosure crisis."

The Fremont settlement came a few months after Coakley negotiated a $60 million settlement with Goldman Sachs (GS, Fortune 500) over its role in bundling subprime loans into securities and selling them to investors. As part of the deal, the Wall Street investment bank agreed to modify loans of more than 700 troubled borrowers.

Attorneys general reached the largest predatory lending settlement a year ago. Bank of America agreed to spend $8.4 billion to lower the interest rates or loan balances of nearly 400,000 Countrywide customers with subprime loans or payment option ARMs.

"This settlement holds the number-one mortgage lender in the country accountable for deceptively putting borrowers into loans they didn't understand, couldn't afford and couldn't get out of," Illinois Attorney General Lisa Madigan, one of the lead negotiators, said at the time. "These are the very practices that have created the economic crisis we're currently experiencing."

Bank of America said the agreement was in the best interest of its customers and investors in mortgage-backed securities, though a group of investors is suing the bank over the settlement terms.

Principal Balance Reduction on Loan Modification?

2009-10-09T16:27:00.000-07:00

Banks and loan investors are starting to bite the bullet and lower the principal due on home mortgages for some struggling borrowers, a new report from bank regulators shows.

That's good news for some homeowners, but may portend more write-offs over the next few years for banks and other lenders now wading through hundreds of thousands of applications for loan modifications. The tradeoff for banks is that by taking the hit now they can boost their chances of being repaid.

Primary Source
Read the full OCC report. Banks and loan servicers modify loans primarily by reducing interest rates or extending the term of the mortgage. These methods can temporarily help borrowers struggling to make payments without requiring lenders to lower the principal owed. Now, in a small but growing number of cases, banks are going further and writing off some of the loan altogether.

Part of this is due to prodding from the Obama administration, which has made saving homeowners from foreclosure a cornerstone of its economic-rescue strategy. The administration in March announced plans aimed at helping as many as nine million households struggling with mortgage debt through loan modifications or refinancings. The plans include financial incentives for mortgage-servicing firms that modify loans.

At the same time, banks now have more flexibility to modify loans because of their success in stabilizing their balance sheets and, in some cases, raising fresh capital. Banks can afford "to take the pain up front," said Kevin Fitzsimmons an analyst at Sandler O'Neill & Partners LP in New York. "If they want a legitimate chance of salvaging something out of the loans, they are better off taking the loss now."

Bloomberg News

Rows of tract houses this month in Las Vegas. The median home price in the area fell 40% to a 10-year low in August amid sales of foreclosures.
The portion of loan modifications in the second quarter that involved reducing the principal jumped to 10% from 3.1% in the first quarter, according to the report released Wednesday by the Office of the Comptroller of the Currency, or OCC, which regulates national banks.

Alejandro Estrella, a mail carrier in Riverside, Calif., said he was surprised when his lender, the Wachovia unit of Wells Fargo & Co., agreed recently to reduce the principal he owed on two mortgages on his home by 18% to about $237,000. That will lower his monthly payments to less than $1,500 from about $2,100. "I wasn't expecting it," said Mr. Estrella, who started out seeking just a reduction in his interest rate and got counseling from Springboard Nonprofit Consumer Credit Management.

Principal reductions are still the exception, though. Tom Kelly, a spokesman for J.P. Morgan Chase & Co., said the lender first tries to make loans affordable by lowering the interest rate for borrowers who qualify for modifications. If that doesn't result in a low enough payment, the bank may extend the term of the loan or defer repayments on part of the principal. That deferred principal would come due if the home is sold or refinanced.

But banks and loan servicers are recognizing that modifications don't always work if the borrowers aren't given a big enough break. Of loans modified in this year's first quarter, 28% were in default again within three months, the OCC said. Among those modified in last year's second quarter, 56% were in default again a year later.

Although the Obama administration programs for averting foreclosures got off to a slow start, they are starting to result in larger numbers of modified loans. The OCC report tallied 439,574 agreements to help troubled borrowers, including loan modifications and other repayment plans, in the second quarter. That was up 75% from a year earlier. Of that total, 142,362 of the agreements were classified as loan modifications, and 10% of those involved reducing the principal.

Beyond Housing, a nonprofit in St. Louis that counsels distressed borrowers, recently won a principal reduction for Evone Lester, a prison employee who had fallen behind on her payments and faced foreclosure. The loan was being serviced by Wells Fargo & Co. but was owned by an investor, Beyond Housing said. The investor agreed to reduce the loan balance to about $48,800 from $72,000, said Chris Krehmeyer, chief executive of Beyond Housing. That helped cut the monthly payment to $761 from $1,039.

In spite of these efforts, foreclosures continue to rise. In a report last week, Amherst Securities Group, a New York research firm, estimated that about seven million homes -- representing 12% of U.S. homes with mortgages -- will end up changing hands in foreclosures or related transactions over the next few years. The company said it doesn't expect that loan-modification efforts will ease the problem significantly, largely because so many people default again.

The OCC's report, which covers about 64% of all U.S. home mortgages outstanding, found that 11.4% of those mortgage loans were at least 30 days overdue or in foreclosure at the end of the second quarter, up from 10.2% three months earlier and 7.4% a year before.

The OCC isn't requiring banks to reduce principal, said Joseph Evers, a deputy controller at the regulatory agency. But, he said, the OCC has told banks they need to make sure modifications are "more sustainable," giving borrowers a real chance to keep up with the new payments.

Separately, the Federal Reserve Board Wednesday released a report on mortgage data from more than 8,000 lenders under the Home Mortgage Disclosure Act, known as HMDA. The report showed that blacks and Hispanic whites were far more likely to be denied last year for refinancing conventional mortgages, those that aren't insured by the federal government.

The denial rate for blacks was 61%, compared with 51% for Hispanic whites and 32% for non-Hispanic whites. That may partly reflect the larger proportion of minority borrowers who got subprime loans during the housing boom and ended up in homes whose values have crashed.

Move over Loan Modification, Now there's Something Meatier

2009-10-06T10:25:00.000-07:00

The U.S. Treasury will soon finalize a plan to expand its incentives for mortgage companies to include "short sales" as a way to stem a rising tide of foreclosures, according to a Treasury spokeswoman.

"Short Sales," or sales of homes for less than the balance on existing mortgages, are seen as a key way to supplement other efforts such as loan modifications to steady housing. Unlike most modifications, "Short Sales" eliminate the problem of negative equity that has become a big reason for defaults as home prices have plunged.

The incentives, first announced in May, would expand the government's Home Affordable Modification Program that has seen limited success in lowering payments for hundreds of thousands of homeowners deemed eligible. Just 12 percent of homeowners eligible have had their loans reworked, leaving millions more foreclosures to come, the Treasury said on September 9.

More short sales may alleviate fears that a raft of "shadow supply," or foreclosures in the pipeline, will flood the market and deal a blow to the nascent rebound in housing seen over the U.S. summer months, analysts said. The overhang of supply is currently about 7 million units, or 135 percent of a year's of existing home sales, according to Amherst Securities Group.

"What they are trying to do is move some of these foreclosures in the pipeline, and bring them to a resolution before (foreclosure) happens," said Lisa Marquis Jackson, a vice president at Irvine, California-based John Burns Real Estate Consulting. "12 percent of these being modified isn't enough to clean these up."

Realtors express frustrations with banks when trying to negotiate a short sale, which can take four to five months to complete, according to John Burns consultants. Buyers often walk away from sales because banks are slow to respond, or balk at the offer.

The Treasury will use up to $10 billion from a previously announced $50 billion pool of mortgage modification funds for payments to address lender concerns that home prices will continue falling in high-cost areas.

Incentives will be calculated on recent declines of local home prices and average home prices in these markets, the Treasury said in May. They would add to other incentives that servicers can receive for reducing loan payments.

In May, the Treasury proposed lenders would receive a $1,000 payment for allowing the owner to sell the house for less than the amount owed on the mortgage, and accepting the proceeds as full repayment. They can also receive $1,000 for accepting a similar deed-in-lieu transaction, in which the deed is simply transferred to the lender instead of going through a costly foreclosure.

Borrowers who agree to short sales or deed-in-lieu deals can received up to $1,500 in closing costs. Treasury also said it will pay second lien holders up to $1,000 to relinquish their claims in such transactions.

"Presumably, the Treasury is trying to help facilitate a transaction that will result in less loss to the lender than in the case of a foreclosure," John Burns consultants said in a research note dated Oct 1 alerting clients of an impending Treasury announcement.

I am, just like you very anxious to see what happens. In california SB306 has certainly sent a false hope into the market place. I will write more on that subject later.

-Christopher Rockey

Loan Modification Loosers

2009-09-30T08:41:00.000-07:00

In the past I have interviewed and spent many tedious hours talking to different Loan Modification company's. Either under the DRE model or the attorney model. At one point I saw that even I can fall victim to being 'Sold' on a company. Some Loan Modification places offer money back, other's offer attorney protection with fancy forensic loan analysis. Either way I am continuing to research for consumers and came across some very interesting facts.

The State Bar of California, alarmed by the number of lawyers preying on vulnerable homeowners, today identified 16 attorneys who are under investigation for misconduct related to loan modification.

“In my 21 years in attorney discipline, I have not seen a crisis of this magnitude. It is truly unprecedented,” said Interim Chief Trial Counsel Russell Weiner, who is waiving investigation confidentiality in favor of public protection. The waiver, allowed by law, is used only occasionally, but Weiner said the seriousness of the problem demanded a strong reaction by the bar in order to protect consumers. This is the first time the names of more than a few lawyers being investigated have been made public.

“The number of attorneys using their law licenses to essentially take money from unwary but trusting consumers is astounding,” Weiner added. “There are literally thousands of victims who have lost money they could not afford to lose. Under the circumstances, the need for public information and protection is paramount.”

Those attorneys being named by the State Bar have allegedly taken fees for promised services and then failed to perform those services, communicate with their clients or return the unearned fees, Weiner said. Some attorneys misrepresented the services they could provide. “It appears these attorneys may have significantly harmed their clients who were already facing great financial pressure and the possible loss of their homes.”

About one-quarter – almost 800 cases – of the active investigations in the Office of Chief Trial Counsel (OTC) are related to foreclosure complaints. The office has experienced a 58 percent increase in active investigations over 2008 due in large part to the huge increase in complaints against attorneys offering loan modification services. “Our office is aggressively investigating these cases and is working proactively with law enforcement,” said Weiner.

In March of 2009, the State Bar created a special team of investigators and lawyers to handle the growing number of complaints received about attorneys offering loan modification services. OTC found that many of the offending attorneys are associated with firms that use telemarketers or phone banks to sign up clients without regard to the facts of the individual case or whether or not the client can be helped, Weiner said.
In many cases, the attorneys work with untrained non-attorney staff engaging in the unlawful practice of law by offering legal advice to prospective clients. OTC also is investigating the non-attorney staff for possible referral to law enforcement.

In recent months, OTC has obtained the resignation of three attorneys who were offering loan modification services. Those attorneys chose to give up their licenses to practice law rather than face disciplinary charges and possible disbarment. In addition, OTC lawyers are preparing to put some attorneys on inactive status pending the filing of formal disciplinary charges

Weiner warned consumers to take special caution when seeking legal representation related to loan modification. “Consumers should not be comforted by advertisements that claim the attorney is a member of the State Bar of California,” he said, noting that all attorneys practicing in California on a regular basis are members. “Such membership does not mean the attorney has any special knowledge, experience or expertise in the area of loan modification. In fact, it appears that many of the attorneys offering these services have little or no prior experience in the area of loan modification.”

The following attorneys have received a significant number of complaints related to the loan modification services they were hired to perform. They are entitled to a full and fair hearing on any charges that may be filed in the future. No discipline may be imposed unless and until the State Bar proves allegations of misconduct by clear and convincing evidence.

▪ David Arase, Bar No. 233705, Arase Law Firm and National Housing Assistance

▪ Stephen Burns, Bar No. 113371, Legal Group Network

▪ Robert Buscho, Bar No. 122556, United Law Group

▪ Nicholas Chavarela, Bar No. 251632, Rodis Law Group and America’s Law Group

▪ Steven Feldman, Bar No. 103676, Feldman Law Center

▪ Eric Johnson, Bar No. 224065, Avantgarde Group

▪ Paul Lucas, Bar No. 163076, Lucas Law Center

▪ Brandon Moreno, Bar No. 233750, U. S. Foreclosure

▪ Jeffrey Nemerofsky, Bar No. 213014, U.S. Advocacy Law Group and U.S. Financial Products

▪ Gregory Paiva, Bar No. 207218, Law Offices of Gregory Paiva

▪ Adrian Pomery, Bar No. 249664, U.S. Foreclosure

▪ Ronald Rodis, Bar No. 181873, Rodis Law Group and America’s Law Group

▪ Mark Shoemaker, Bar No. 134828, Advocates for Fair Lending

▪ Marc Tow, Bar No. 78429, Marc Tow and Associates

▪ Michael Yellin, Bar No. 255050, A Fresh Start Loan Modification

▪ Sean Rutledge, Bar No. 255938, United Law Group

The State Bar suggests that consumers be wary of attorneys offering loan modification services under any of the following circumstances:

Advertisements of the office do not expressly identify by name the attorney who is responsible for the business.
Office staff will not readily identify by name the attorney responsible for oversight of the business.
The attorney in charge of the office is too busy or not willing to meet personally with prospective clients.
The firm advises a consumer to stop paying the existing mortgage.
The business, through its advertisements or claims of its representatives, makes claims that sound too good to be true, such as claims of a 90 or 100 percent rate of success in obtaining loan modifications, or claims that a reduction in the mortgage principal is likely to be achieved.
The business demands payment of a large fee, even before obtaining a prospective client’s basic income and expense information, and information about the existing mortgage and present home value.
The attorney responsible for the business is not licensed to practice law in the state where the consumer resides.
There are legitimate loan modification services and ethical attorneys that are providing the promised services for their clients. Two places to start in the search for loan modification assistance are: HUD Housing Counselors, 800-569-4287, http://www.hud.gov/counseling; and HOPE NOW, 888-995-HOPE, http://www.hopenow.com.

Consumers can also find qualified attorneys through a State Bar-certified lawyer referral service that can be found on the State Bar’s Web site (www.calbar.ca.gov), or by calling the State Bar’s Lawyer Referral Services Directory at 1-866-442-2529 (toll free in California) or 415-538-2250 (from outside California).

Consumers having a problem with the attorney handling their loan modification may contact the State Bar at 1-800-843-9053 or visit the State Bar’s Web site at www.calbar.ca.gov to find a complaint form.

I am still certainly promoting our new friends at www.loanlifesavers.org. the two key components they offer that I am attracted to are their presence in the non-profit sector and the fact that (For Free) consumers have to apply to be accepted into their program of which they have a high turn down rate.

-Christopher Rockey

Auto Reply

2009-09-29T15:32:00.000-07:00

Dear Mr. Rockey:

Thank you for contacting me to express your support for expanding the first-time homebuyer tax credit. I appreciate the time you took to write and welcome the opportunity to respond.

In July 2008, the Housing and Economic Recovery Act of 2008 (Public Law 110-289) provided first-time homebuyers with a tax credit, equivalent to an interest-free loan, worth up to $7,500. The tax credit applied to homes purchased between April 9, 2009 and July 1, 2009. As the housing situation worsened in the fall of 2008, additional action was taken to prevent further declines in home values. Congress included in the American Recovery and Reinvestment Act of 2009 (Public Law 111-5), a more robust first-time homebuyer tax credit. Specifically, the tax credit was increased to $8,000 for homes purchased in 2009 and will not have to be repaid.

I understand your belief that the first-time homebuyer tax credit should be increased and expanded further. As you know, on June 10, 2009, Senator Johnny Isakson (R-GA) introduced the "Home Buyer Tax Credit Act of 2009" (S. 1230), which would increase the credit to up to $15,000, remove income eligibility limits, and expand it to include homebuyers purchasing homes other than their first. S. 1230 has been referred to the Senate Finance Committee, of which I am not a member. Please know that I will keep your support for this legislation in mind should it come before the full Senate.

Once again, thank you for writing. If you have any additional questions or concerns, please do not hesitate to contact my Washington, D.C. office at (202) 224-3841. Best regards.

Sincerely yours,

Dianne Feinstein
United States Senator

Race to the Moon

2009-09-25T13:57:00.000-07:00

In the late sixties we witnessed a global race by all nation's to be responsible for the first man on the moon. Unless your a conspiracy theorist living in a trailer in the desert with sixty cats you believe the US one that race. We again now have a new race, national and international company's are participating to end recession. It is still a race for technology but we have the first place company's trying to be heard. When I call this the race to end recession we know from historical data that although these 'Company's' are not saying that's what this is about, there are several media whispers that will give the originating company this prestigious title. The plan is to have a single electronic platform that 'Learns' the lenders specific software. One of the biggest failures in Short Sale's is the lack of communication. We have tried to get lenders to use our Transaction Point software but all lenders have already invested millions in their own software which is not compatible with any other. The invention of an electronic platform that would be compatible to every lenders software would essentially wipe out Loss Mitigation and it's current horrible lack of participation in communication. Service Link is an FNF owned company and has it's 'Vision Sale' product and in second place -

Foreclosure.com Founder, President and CEO, Brad Geisen, announced today that he has built the first-ever short sales offer management system that handles marketing, processing, negotiating and closing services all in one central location.

QuickSale(SM) (www.QuickSale.com) is an easy-to-use platform that simplifies an often long and complicated process, bringing together all parties -- distressed homeowners, lenders, investors, buyers and agents -- who all share one common interest: Moving real estate inventory as fast as possible under the best terms.

"Short sales are the ultimate solution when it comes to solving the national foreclosure crisis now and in the future," said Geisen.

In short sales situations, banks or mortgage lenders agree to discount home loan balances prior to selling because of economic (local home values have plummeted) or financial (unemployment) hardship on the part of homeowners.

Geisen states that QuickSale.com helps cash-strapped homeowners avoid foreclosure and minimize the negative impact on their personal credit, allowing them to pursue alternative housing options worry-free when the time is right.

On the lender side, banks ensure instant liquidity for the defaulted loans on their books, maximizing the amount (often 80 to 90 percent of market value) that they can get out of distressed properties in a much shorter timeframe (30 to 90 days).

QuickSale.com closes the loop by bringing in agents and buyers located throughout the United States and beyond who purchase the distressed properties at negotiated prices before the banks repossess them. Agents who coordinate short sales from start to finish through the QuickSale(SM) system earn commissions.

"Banks lend money, they're not in the business of marketing and selling real estate -- certainly not on today's current scale," said Geisen. "And their loss mitigation departments are just too overwhelmed at this point. QuickSale.com is a structured tool that provides much-needed support and relief. It short circuits the entire foreclosure process to ensure the best possible outcome for all parties involved . . . quickly."

I have heard of several other software platforms but none so advanced they are actually meeting with the GSE's about enforcing servicers to use them.

-Christopher Rockey

Foreclosure Prevention Politically Popular?

2009-09-18T16:32:00.000-07:00

The Federal Deposit Insurance Corporation (FDIC) today announced that it is releasing a free tool kit of information that will help borrowers, community stakeholders and the banking industry avoid unnecessary foreclosures and stop foreclosure "rescue" scams that promise false hope to consumers at risk of losing their homes.

The tool kit includes critical information to help borrowers know who to contact and what documents they need to have available to apply for a loan modification that could save their home from foreclosure. This tool kit also describes the warning signs of potential foreclosure "rescue" scams and how consumers, community stakeholders, and bankers can report scammers and prevent fraud. The public can access the free tool kit at http://www.FDIC.gov/foreclosureprevention. To ensure this information is widely available, the FDIC is conducting outreach to community-based organizations and the banking industry, and furnishing a referral service to help consumers identify sources of legitimate help and report fraud to the appropriate law enforcement agencies.

"It is vitally important that consumers and bankers know all of the resources available to help prevent unnecessary foreclosures. The tool kit released today, along with our outreach, should help consumers know how to get a loan modification when they need one. While reaching out a helping hand, we must also be on guard for those who would prey on consumers who are facing foreclosure," said FDIC Chairman Sheila C. Bair. "Everyone with a stake in this issue – from community leaders to those with a neighbor, friend or family member facing hardship – must take responsibility for reporting questionable activity and directing consumers to legitimate sources for assistance." Raising consumers' awareness of foreclosure "rescue" scams will give borrowers more confidence in knowing they are working with legitimate counselors and servicers to obtain a loan modification that could help them avoid foreclosure.

The FDIC's foreclosure prevention tool kit includes:

Is Foreclosure Knocking at Your Door? brochure (available online and in print), which encourages consumers facing financing difficulties to contact their servicer, apply for a loan modification, and talk to a counselor.
Beware of Foreclosure Rescue Scams brochure (available online and in print), which provides information on common scams, tips for detecting fraudulent deals, and resources for reporting criminal activity.
Spring 2009 edition of FDIC Consumer News, which features advice for consumers on avoiding foreclosure rescue and loan modification schemes.
Your Own Home module of the FDIC's Money Smart curriculum, which offers tips and advice on avoiding foreclosure with a loan modification, preventing foreclosure "rescue" scams and providing legitimate sources of foreclosure prevention assistance.
The tool kit and other helpful resources are available on the FDIC's foreclosure prevention Web page at www.fdic.gov/foreclosureprevention.

Also as part of this initiative, the FDIC is continuing to work with banks and community-based and consumer organizations to avoid foreclosure and stop foreclosure "rescue" scams, particularly in underserved communities. Consumers are encouraged to report questionable activities, including solicitations or offers, to their servicer and appropriate state and federal authorities, which may include the Federal Trade Commission and the appropriate state attorney general. Consumers who have difficulty finding contact information for these officials or their servicer may receive a referral by calling the FDIC Call Center at 1-877-ASK-FDIC (1-877-275-3342) or visiting www.fdic.gov.

Top 10 Seller Mistakes

2009-09-15T16:55:00.000-07:00

10. Waiting until spring to sell. People buy homes all year, so play up the home's seasonal amenities and take advantage of serious buyers looking in the off-season.

9. Not understanding the real estate contract. Go over the fine print of the agreement with your real-estate agent or attorney before signing to make sure you understand your responsibilities as well as any demands the buyer has made.

8. Going it alone without researching first. Selling a home for-sale-by-owner take time, and requires you to do paperwork, marketing and showings. Make sure you're up for the work involved in return for saving on the real-estate agent commission fee.

7. Ignoring lowball offers. If buyers submit a low offer, don't reject it completely. Counteroffer to see if they are willing to negotiate.

6. Wasting time on an unqualified buyer. Make sure a potential buyer is prequalified for a loan before accepting an offer.

5. Skimping on marketing. Mix traditional advertising, including a sign in the yard and an ad in a homes magazine, with Web techniques, including online photos and video.

4. Sabotaging the showing. Leave the home when it is being shown to prospective buyers so they can more easily focus, and make sure the home is accessible with convenient showing hours and a lockbox for agents.

3. Not prepping for the sale. Visit open houses in the neighborhood to get a sense of what the competition offers, then make fixes and updates, declutter and clean to outshine them.

2. Overimproving. Don't make so many upgrades that you price your home out of the appropriate range for the area and fail to recoup your investment.

And the number one biggest mistake homeowners are making right now is the following and after you read it I will tell you why:

1. Overpricing. Your home should be priced in line with homes in the area that are of similar age, style and size.

Many homeowners hold out for the 'Miracle Sale' they are not realistic about the price. My favorite homeowner is the guy who is holding a new appraisal on the home complaining that it came in way to low, I need to sell his house for 50-100K more and by the way, when it does sale I need to find them a house 200K under priced.

Sellers need to be realistic! If they aren't they are going to cause themselves horrible damage long term. In some cases we have seen in this declining market, when homeowners want to list their home well above fair market value. They blame the Realtor for not getting an offer then fire them. Then the new Realtor lists it more realistic but not quite what the homeowner in there delusions of grander may like. Next thing you know the homeowner is stuck in a Short Sale and back to the original agent who they should have listened to in the first place.

these steps help homeowners avoid foreclosure, Deed in lieu and even Short Sale.

-Christopher Rockey
rockey@mresolution.com

Finally a Positive Sign for Short Sales

2009-09-14T08:25:00.000-07:00

A report from Amherst Securities Group indicates programs that support short sales could be the most effective loss mitigation approach, as they minimize loss severity.

Amherst researchers also said the Hope-for-Homeowners (H4H) program is a “powerful alternative” to the Home Affordable Modification Program (HAMP).

Amherst researchers point to H4H’s ability to mimic the impact of short sales, such as a one-time loss on the loan, which provides a softer loss severity than foreclosure sales.

“In all cases, the loss severity on the short sale is 15-20% less than on the foreclosure sale,” Amherst researchers reported.

Borrowers completing the H4H program become re-equified and refinanced into a new Federal Housing Administration-insured mortgage, while HAMP provides capped incentives to servicers to modify mortgages in danger of foreclosure. The US Treasury Department then adjusts the HAMP incentive caps based on the level of actual participation.

Plans for the “new and improved” H4H program could be released within the next two months, resolving enough issues to maximize the net present value of loans in bank portfolios but “unlikely” to be used for loans in private label securitizations, according to the report.

“This is a superior alternative to either the HAMP modification or foreclosure,” Amherst researchers reported.

Even though borrowers would make the same payment under the two programs, 31% of their income, Amherst expects higher success rates with H4H because the borrower is re-equified and re-underwritten to make sure he or she qualifies for the loan, and H4H extinguishes the second mortgage.

Servicers and investors agree that HAMP is particularly less useful to pay-option adjustable-rate mortgages (ARMs) borrowers because of the difficulty to reduce payments from their current levels. HAMP’s 40-year term extension doesn’t help many of the option ARM mortgages that are already at a 40-year term. Also, these borrowers have mortgages that are less affordable, on average, than any other product type, according to the report.

“Once the new H4H program is implemented, we expect portfolio lenders to make considerable use of the program,” Amherst researchers reported.

Treasury and housing officials are in the process of finalizing a federal incentive program that will encourage servicers to pursue short sales and deeds-in-lieu of foreclosure. Details may arrive within weeks, spurring servicer participation in short sales, according to Treasury sources.

Short Sale can often be viewed by a homeowner as 'Still loosing their Home' it is a valuable tool in avoiding foreclosure that the American consumer must realize. Many consumers think they can sit and wait in their house for a year why bother with a Short Sale? How about 'Full Settlement Language' against recourse debt? How about the potential for less tax exposure with a 1099C rather than a 1099A received in foreclosure? How about being able to repurchase again sooner? How about walking away with a little bit of dignity from the transaction!!

-Christopher Rockey
rockey@mresolution.com

Foreclosure Avoidance - Scammer's Beware

2009-09-11T14:58:00.000-07:00

Scams that promise to “rescue” you from foreclosure are popping up at an alarming rate nationwide, and you need to protect yourself and your home.

If you’re falling behind on your mortgage, others may know it, too — including con artists and scam artists. They know that people in these situations are vulnerable and often desperate. Potential victims are easy to find: mortgage lenders publish notices before foreclosing on homes. Private firms frequently compile and sell lists of these foreclosed properties and distressed borrowers. After reading these notices, con artists approach their targets in person, by mail, over the telephone, or by e-mail. They often advertise their services on television, radio, or the Web, and in newspapers, describing themselves as “foreclosure consultants” or “mortgage consultants,” offering “foreclosure prevention” or “foreclosure rescue” services. And they are only too happy to take advantage of homeowners who want to save their homes.

If someone offers to negotiate a loan modification for you or to stop or delay foreclosure for a fee, carefully check his or her credentials, reputation, and experience, watch out for warning signs of a scam, and always maintain personal contact with your lender and mortgage servicer. Your mortgage lender can help you find real options to avoid foreclosure. It is important to contact your mortgage lender early to preserve all your options. There are legitimate consumer financial counseling agencies that can help you work with your lender.

This Consumer Advisory, issued by the Office of the Comptroller of the Currency (OCC), describes common scams, suggests ways to protect yourself, provides information on U.S. government loan programs and counseling resources, and lists 10 warning signs of a mortgage modification scam.

Common Types of Scams

Here are some examples of scams related to mortgage modification and foreclosure avoidance.

Foreclosure “rescue” and refinance fraud. The scam artist offers to act as an intermediary between you and your lender to negotiate a repayment plan or loan modification and may even “guarantee” to save your home from foreclosure. You may be told to make mortgage payments to the scammer directly — along with significant, up-front fees — and be told that the scammer will forward the payments to your lender. In reality, the scammer may pocket your money and leave you in worse shape on your loan. The scam artist also may tell you to stop making payments or stop communicating with your lender. Don’t follow that advice.
Remember that your mortgage lender should be the starting point for finding options to avoid foreclosure. You also should consider contacting qualified and approved credit counselors.

Fake “government” modification programs. Unscrupulous people may claim to be affiliated with, or approved by, the government or may ask you to pay high up-front fees to qualify for government mortgage modification programs. While government-supported mortgage modification and refinancing initiatives are legitimate, the scam artists’ claims are not. Keep in mind that you do not have to pay to benefit from these government programs. All you need to do is contact your lender or loan servicer.
The scam artist’s name or Web site may be very similar to those of government agencies. The scam artist may use such terms as “federal,” “TARP,” or other words or acronyms related to official U.S. government programs. These tactics are designed to fool you into thinking the scam artist is somehow approved by, or affiliated with, the government. The government is taking actions to stop this fraud, but you also need to protect yourself. So be wary of claims offering “government-approved” or “official government” loan modifications. Your lender will be able to tell you whether you qualify for any government initiatives to prevent foreclosure. You do not have to pay anyone to benefit from them.

Leaseback/rent-to-buy schemes. In this type of scam, you are asked to transfer the title to your home to the scammer, who will, supposedly, obtain new and better financing and/or allow you to remain in the home as a renter and eventually buy it back. If you do not comply with the terms of the rent-to-buy agreement, you will lose your money and face eviction. The agreement may be very hard to comply with, because it may require, for instance, high up-front and monthly payments that you may not be able to afford. In fact, the scammers may have no intention of ever selling the home back to you. They simply want your home and your money.
Remember that transferring your title does not change your payment obligations — you will still owe your mortgage debt. The difference will be that you will no longer own your home. If payments are not made on the mortgage, your lender has the right to foreclose, and the foreclosure and any other problems will appear on your credit report.

Bankruptcy scams. You may have heard that filing bankruptcy will stop a foreclosure. This is true — but only temporarily. Filing bankruptcy brings an “automatic stay” into effect that stops any collection and foreclosure while the bankruptcy court administers the case. Eventually, you must start paying your mortgage lender, or the lender will be able to foreclose. Bankruptcy is rarely, if ever, a permanent solution to prevent foreclosure. In addition, bankruptcy will negatively impact your credit score and will remain on your credit report for 10 years.
Debt-elimination schemes. Scammers may claim to be able to “eliminate” your debt by making illegitimate legal arguments that you are not obligated to pay back your mortgage. These scammers will provide you with inaccurate claims about applicable laws and finance, such as that “secret laws” can be used to eliminate debt or that banks do not have the authority to lend money. Do not stop making payments on your mortgage based on their claims.

How to Protect Yourself from Mortgage Modification and Foreclosure Avoidance Scams

Always proceed with caution when dealing with anyone offering to help you modify your mortgage or avoid foreclosure. Remember that you do not need a third party to work with your lender — any such party should make the process easier, not harder and more expensive.

Contact your lender or mortgage servicer first. Speak with someone in the loss mitigation department for mortgage modification options and other alternatives to foreclosure.

Make all mortgage payments directly to your lender or to the mortgage servicer. Do not trust anyone to make mortgage payments for you, and do not stop making your payments.

Avoid paying up-front fees. While some legitimate housing counselors will charge small fees for their services, do not pay fees to anyone before receiving any services. Make sure you are dealing with a legitimate organization.

Know what you are signing. Read and understand every document you sign. Do not rely on an oral explanation of a document you are signing — make sure that you read and understand what the document actually says. Otherwise, a document may obligate you to terms you don’t want or may even convey ownership of your home to someone else. Never sign documents with blank spaces that can be filled in later. Never sign a document that contains errors or false statements, even if someone promises to correct them. If a document is too complex to understand, seek advice from a lawyer you trust or a legitimate, trusted financial counselor.

Do not sign over your deed without consulting a lawyer you select. Foreclosure scams often involve transfer of ownership of your home to a con artist or another third party. Never agree to this without getting the advice of your own lawyer, financial advisor, credit counselor, or other independent person you know you can trust. By signing over your deed, you lose the rights to your home and any equity built up in the home — and you are still obligated to pay the mortgage.

Get promises in writing. Oral promises and agreements relating to your home are usually not legally binding. Protect your rights with a written document or contract signed by the person making the promise. Keep copies of all contracts that you sign. Again, never sign anything you don’t understand.

Report suspicious activity to relevant federal agencies, such as the Federal Trade Commission, and to your state and local consumer protection agencies. Reporting con artists and suspicious schemes helps prevent others from becoming victims. If your complaint or question involves a national bank and you cannot resolve it directly with the bank, contact the OCC’s Customer Assistance Group by calling (800) 613-6743, by sending an e-mail to customer.assistance@occ.treas.gov, or by visiting www.HelpWithMyBank.gov.

Contact a legitimate housing or financial counselor to help you work through your problems.

To find a counselor, contact the U.S. Department of Housing and Urban Development (HUD) at (800) 569-4287 or (877) 483-1515, or go to www.hud.gov/offices/hsg/sfh/hcc/hccprof14.cfm.

Call (888) 995-HOPE, the Homeowner’s HOPE Hotline to reach a nonprofit, HUD-approved counselor through HOPE NOW, a cooperative effort of mortgage counselors and lenders to assist homeowners.

Visit NeighborWorks America’s Web site at www.nw.org/network/home.asp.

-Christopher Rockey

Just When You Thought it Was Safe to Go Back in the Water

2009-09-11T08:26:00.000-07:00

The foreclosure crisis grinds on amid signs of hope.

A report released Thursday shows that substantially fewer people had their homes repossessed in August. Showing evidence of lender market manipulation on pre and post foreclosure.

Unfortunately, a large number of Americans are still falling behind on their payments, to the point where letting your house go has finally become a badge of honor.

A total of 76,134 troubled borrowers lost their homes in August, but that is 12.7% fewer than in July, according to RealtyTrac, an online marketer of foreclosed properties.

The pipeline of troubled borrowers remains full, however. Filings of all kinds dropped only slightly, just 0.5%, from July. Filings include NOD, NOT and Lis Pendens.

According to RealtyTrac spokesman Rick Sharga, there are a couple of possible explanations for the decline in bank repossessions, called REOs in the industry.

"It could be that the government-led mortgage modification programs are finally gaining some traction," he said. "But it could also be that the banks are still delaying repossessions of these properties." The latter derives from accuracy.

Because banks take big losses on REOs, they may leave delinquent borrowers in their homes, especially where lenders already have a substantial amount of vacant, unsold inventory. Presumably, the borrowers are caring for the properties, which saves banks the time and expense of upkeep and maintenance.

Plus, there is always hope that some of these borrowers will "self-cure" -- or catch up on their loans without assistance -- which is better for banks' bottom lines. In fact, a recent report from the Boston branch of the Federal Reserve found that 30% of borrowers who have missed two mortgage payments eventually become current. I would argue that this figure is categorically incorrect based on the data provided to us by lenders. In fact lenders have specifically told us face to face, 'On the record' once a property goes down 60 days, we know they are not coming back. For those that try, that's great, your hearts in the right place but the inevitable is awaiting i assure you.

Increases in short sales could also be reducing the repossession statistics, according to Duane LeGate, president of HBN Interactive, a short-sale specialist. These are transactions in which lenders allow borrowers to sell their homes for less than what they owe.

"A lot of banks are delaying the foreclosure process if they see any kind of chance of making a reasonable short sale," he said. Indeed you can postpone a Trustees sale with a fair market value offer, but we have even seen lenders get worse at this including, WAMU and Sun Trust.

The reprieve in repossessions could be coming to an end, however. Sharga expects a spate of payment problems to start this fall as interest rates reset on some of the exotic mortgage products that proliferated during the boom. Option ARMs (adjustable rate mortgages) in particular will be a big problem. It's OK you can be honest and say the truth 'A huge market changing crisis.' Big problem under illustrates the actual issue at hand.

A Fitch Ratings report released last week forecast that of the $200 billion in option ARMs outstanding, $29 billion will reset to fully amortizing loans by year's end, and another $67 billion will recast in 2010. The average payment increase will be 63%, or $1,053 a month -- an impossible hurdle for many borrowers. Or for all of them who have not recently been visited by the sweepstakes van.

These loans are named for the options they give borrowers. They can pay at a minimum rate, which does not even cover interest; at an interest-only rate; at a fully amortizing 15-year rate; or at a fully amortizing 30- or 40-year rate.

More than 60% of all option ARM borrowers, and more than 80% of all option ARMs issued in 2006 and 2007, often pay just the minimum amount, according to First American LoanPerformance.

That means the principal balances of these loans actually grow. And when they get too large, somewhere between 110% and 125% of the original loan amount, the lender will convert the loan into a fully amortizing mortgage. That usually results in payment shock, a huge jump in monthly mortgage costs.

"We're in the soup for at least another year," Sharga said. In the soup? That's treading lightly? How about something more accurate like, if you are currently in a payoption arm you need to call your lender now for a Loan Modification or be ready to move out of your home.

That could mean a third dismal year of foreclosures. So far this year 540,222 homes have been lost to repossession, which is on par with the first eight months of 2008.

Where it's worst
Six states account for 60% of all foreclosure filings, according to the RealtyTrac report. California, where many option ARMs were issued, leads with more than 92,000 filings, followed by Florida with more than 62,000. Michigan is next with more than 19,000; Nevada, whose foreclosure rate of one for every 62 households was the highest in the nation, and Arizona both had close to 18,000. Illinois recorded more than 13,000.

California homeowners also lost more properties to repossession than any other state. There were 14,590 in August, twice the number of Florida, which was the second worst-hit state with 6,446.

Still, those figures show month-over-month improvement. In California, the August total was down nearly 32% from July, and Florida showed a 4.6% improvement. REOs also steeply fell in Arizona (down 16.7%) and Nevada (off 23.8%).

The list of cities worst hit by total foreclosure filings include many names familiar from past months. Las Vegas had the nation's highest foreclosure rate, with 16,798 filings, or one for every 47 housing units.

Second was another repeat offender, Stockton, Calif., where one of every 62 homes had a filing. Modesto, Calif. was third with one in 63.

Several honorable mention that I don't have time for now. I am headed to Oregon to see how Portland and Eugen is going to be doing. I have a feeling I know the answer.

-Christopher Rockey

Las Vegas Lender Panel

2009-09-10T11:22:00.000-07:00

Yesterday in Las Vegas was close to be blood shed. The agents are hostile and in my opinion they have every right to be. I have said it over and over again, "The market must start respecting Buyers or they are going to check Out." You would perhaps be appalled at some of the answers the lenders were giving and the sad truth, they were honest! Not deficiency release language, cutting commissions, taking forever, loosing files, the list goes on. The panel attendees were the Las Vegas area top producing Short Sale agent, Chase, HUD, Freddie Mac, Mortgage Resolution Services www.mresolution.com, Wells Fargo and Bank of America. Each panelist had a unique prospective of Short Sales but none had the answers we require to afford market stabilization.
We are actually going to host a webinar to follow up because there are so many agents that attended that are frustrated. NAHREP and AREAA did an excellent job at putting this event together. Our hats off to them.
For a link to the webinar please email questions@mresolution.com

-Christopher Rockey

Consumer Warning: Loan Modification Fraud on the Rise

2009-09-03T08:43:00.000-07:00

In some states in order to work on a Loan Modification it is considered licensed activity. In other states Loan Modification can only be done by attorneys and unfortunately in most states there is very little accountability, reliability or oversight in any way for a Loan Modification company. Check with your local department of Real Estate and ask if they either have a 'No Objection List' of Loan Modification company's or if they have another viable resource connected with a governmental regulatory agency like the Attorney General or even the Better Business Bureau.

Hundreds of people calling themselves "foreclosure rescue specialists," promising to quickly cut through red tape and reduce mortgage payments, have taken millions of dollars from South Florida homeowners over the past year for their services.

But unlike mortgage brokers or real-estate agents, mortgage modifiers are not required to have any special training or even a license — something many consumers don't know.

That has contributed to a dramatic rise in the number of struggling homeowners complaining they paid thousands to foreclosure loan modification or foreclosure rescue outfits, but received little or no help in return, state regulators say.

The Florida Attorney General's Office has received about 16,127 calls or complaints about mortgage modification from March through Aug. 24, state records show. The agency currently has filed 15 civil lawsuits against these operations, is actively investigating 83 statewide and has 99 additional companies under review.

Susan Spurgen, a Tampa attorney who specializes in real estate litigation, was surprised to learn the troubled industry that quickly sprung up in the wake of the sub-prime mortgage fiasco is largely unregulated.

"It's sad, given that you want only licensed professionals who know what they are doing taking money from people," said Spurgen, who gave a Florida Bar seminar on modification earlier this year.

Homeowners will have more protection beginning Jan. 1. That's when a new law passed by the Legislature this year will require all unlicensed modifiers, loan originators and mortgage lenders to get a broker's license through the state's Office of Financial Regulation.

The statute, which brings state laws in line with the 2008 federal mortgage licensing act, also requires brokers to renew their licenses annually instead of every other year, go through a background check, have 24 hours of training and pass a written exam. Beginning in 2011, they also must be listed in a nationwide registry that will include employment histories and disciplinary actions from all states.

Officials with the Attorney General's Office, saying the new requirements should help weed out questionable operators, supported the law. So did the Florida Association of Mortgage Brokers.

"We are hoping that by requiring licensure, it will hold people accountable," said association president Valerie Saunders.

Until licensing becomes law, consumer advocates and regulators advise homeowners to steer clear of modification companies asking for money up front — something prohibited under the 2008 state Foreclosure Rescue Act. The 2009 law narrowed the exemption allowing attorneys to collect advance fees, stating as of July 1 it applied only to those handling modifications as "ancillary" work connected with other cases, such as bankruptcies.

"If someone asks you for money prior to completion of work, they are breaking the law," said State Rep. Ritch Workman, R- Melbourne, a mortgage banker who worked on this year's bill. Even taking post-dated checks or credit card numbers, to be charged later, is not allowed.

In the past 15 months, hundreds of foreclosure rescue and modification firms have cropped up in the state, Saunders said. While homeowners can try renegotiating their loans themselves, "it's extremely paper intensive and it's complicated," Saunders said.

And slow. The Treasury Department reported earlier this month that eligible homeowners going through the federal Making Homes Affordable program — designed to encourage lenders to renegotiate loans with struggling homeowners — can't get modifications approved by their lenders or mortgage servers. Only 9 percent received loan reductions. The White House has called on servers to start on at least 500,000 modifications by Nov. 1.

I predict the licensure provisions will drive out some of the bad actors and encourage some legitimate foreclosure operations to consolidate. I suspect it also may make it harder for homeowners with bad credit to get approved for modifications or that they'll be charged higher fees.

"The sub-prime model was that everyone was entitled to a mortgage. We don't need that same model for loan modification negotiators"

-Christopher Rockey
rockey@mresolution.com

CNN Is Reporting Toward Market Manipulation

2009-09-02T12:37:00.000-07:00

Shares of Toll Brothers (TOL), Hovnanian (HOV) and KB Home (KBH) and other builders have surged. The exchange-traded fund that tracks the group has nearly doubled since March.

Home starts have risen for five straight months, while sales of new homes recently hit their highest level since last September. Prices are up as well: the Case-Shiller index of national house prices rose 2.9% in the second quarter, ending a three-year decline.

These signs -- as well as anecdotal reports about house shoppers growing more willing to write a deposit check -- have executives at homebuilding firms declaring the worst is over.

"We believe declining cancellations and more solid demand indicate that the housing market is stabilizing," Toll Brothers chief executive officer Bob Toll said this month in a conference call with investors and analysts.

But housing boosters have forecast turnarounds repeatedly since the market peaked in 2006, only to be proved wrong by plunging prices. And skeptics say they're wrong again now.

They argue that a deeply indebted consumer, a weak job market, expiring incentives and rising foreclosures spell a quick end to any housing rebound.

"We're entering the phase where the homeowner has to earn his way out of this mess," said Mark Hanson, who runs a California real estate research firm. "This summer is shaping up as the gateway into the next move down."

Sales shift
Hanson attributes the much-ballyhooed recent house price gains to a shift in the types of properties changing hands. Earlier this year, as many as half of all transactions nationally were resales of foreclosed properties, largely at low prices.

Since then, so-called organic sales (those not involving distressed properties) have risen while foreclosure sales have remained stable. This improved mix -- together with cheap financing and a couple of popular tax incentives -- helped to revive prices in some hard-hit areas.

Thus, house prices in California have risen for three straight months, according to data provider MDA DataQuick. Foreclosure sales there have dropped to about a third of recent transactions from a high of 57% earlier this year.

But with schools opening up again and the summer home-selling season winding down, sales by nondistressed sellers are likely to fall in coming months, Hanson said.

Adding to the pressure on prices, the end is in sight (or already here) for some popular housing subsidies. An $8,000 federal tax credit for first-time home buyers is due to sunset in December. A $10,000 California tax credit for buyers of newly constructed houses expired last month.

Prime problems
Another concern is that the housing woes appear to be spreading well beyond the questionable borrowers who were at the center of the first stage of the financial crisis.

Banks leave foreclosures hanging
While many mortgage defaults in 2007 and 2008 stemmed from frauds perpetrated at the height of the bubble, a greater share of problems now are being driven by the weak job market. That's evident in the fact that more so-called prime borrowers -- those with the best credit histories -- are falling behind on their payments.

Prime fixed-rate mortgages now account for about a third of foreclosure starts, according to the Mortgage Bankers Association. MBA chief economist Jay Brinkmann said in a statement earlier this month this is "a sign that mortgage performance is once again being driven by unemployment."

Some 44% of prime borrowers fell behind on payments last year because they lost a job or income. That's up from 36% in 2006, according to data from Freddie Mac.

Other numbers bode ill for a housing recovery as well. The inventory of houses for sale has come down from a recent peak but remains "high on a historical basis," Office of Thrift Supervision economist Sharon Stark said this month.

"The supply of homes continues to be a drag on home prices and the ability for home prices to recover," she added.

An orgy of homebuilding over the past decade has driven vacancy rates higher. The Census Bureau said 14.3% of rental and owner-occupied housing units were vacant in the second quarter, compared with 9.7% a decade ago.

And Hanson said the pace of foreclosures could soon accelerate as mortgage servicers catch up on foreclosures they have delayed while grappling with new mortgage modification guidelines.

"There could be a big wall of foreclosures once the servicers get running again," he said.

Even Toll, who was talking about housing markets "dancing on the bottom or slightly above that" as long ago as December 2006, has been saying lately that the homebuilders could use a hand -- from taxpayers, of course.

Toll said on a conference call Aug. 12 that the government should consider a Cash for Clunkers type plan for the housing market: giving consumers a rebate to scrap an old home and buy a new one.

Toll argued that a four-month program that offered people $15,000 vouchers for new home construction could "put twice as many people to work, twice as fast as what's being done with the auto industry."

It won't be a shocker if Toll finds some takers in Congress for that one, given the growing jobless rolls across the nation. But legislators might first want to consider how effective such a plan might be.

"It took 10 years to create this problem," said Hanson. "Do people really believe we can correct it all in 36 months?"

-Christopher Rockey
877.446.5152
http://www.mresolution.com

Actions Speak Louder Than Words

2009-08-31T08:46:00.000-07:00

In this case it's lack of any action. My list of tough lender / servicers is no secret when it comes to working on Loss Mitigation and completing Short Sales. I don't often put it in writing just based on the fact that the list differs week to week. I will tell you this though, Citigroup has been on my top five 'Hardest to Work With Lenders' for over a year. And just like every other US lender, the pat themselves on the back because they are doing what they can to help. I have a four letter word for them 'LIES!'

The good news is that Citigroup helped 108,000 people avoid foreclosure during the second quarter, a nearly 30% increase from the previous period.

The bad news is that the number of its borrowers at least 90 days behind in payments surged to 4.7%, up from 3.9% in the first quarter.

Still, CitiMortgage CEO Sanjiv Das feels the bank's ramped-up foreclosure prevention efforts can help stem the number of its borrowers falling behind.

"You keep plugging away at the early stages of delinquency and that's how you slow down the number of foreclosures," Das said in an interview.

Citigroup reported Tuesday that for every completed foreclosure, 12 at-risk borrowers get to stay in their homes. Six months ago, the ratio was 1 to 6.

The bank's loss mitigation initiatives include repayment plans, payment extensions, forbearance, and loan modifications.

When borrowers can't afford to stay in their homes, Citi also helps them avoid foreclosure through short sales -- in which a homeowner sells the property for less than what's owed -- and deeds-in-lieu-of-foreclosure, in which a homeowner signs over the house to the bank. The 1 to 12 ratio that it reported Tuesday does not include short sales or deeds-in-lieu.

Total modifications decreased by 5% during the quarter as the bank ramped up its implementation of the Obama administration's loan modification program. The president's program, which gives banks incentive payments to modify loans, requires that borrowers be put into a three-month trial period before the modification is finalized. Citi also has its own modification programs.

The bank, one-third of which is owned by U.S. taxpayers, said the redefault rates for modified loans continued to decline. Only 6.54% of loans adjusted in the first quarter were delinquent after 30 days, compared to 7.67% of loans modified in the fourth quarter and 10.86% of those adjusted in the third quarter.

More troubling, however, is the fact that foreclosures and delinquencies continue to rise. The number of foreclosures in process for Citi-serviced loans increased about 10% from the first quarter, though foreclosures initiated dropped by 14%. Completed foreclosures rose by 5%.

It will be interesting to see if the American consumer takes a hostile position against Sanjiv Das the way they have with B of A CEO Ken Lewis.

Just a thought.

-Christopher Rockey

More Loan Modification Details

2009-08-27T10:33:00.000-07:00

So here's the deal... I am now being blasted by Loan Modification company's daily because they are so insistent on their "Huge Success Rate." I am currently interviewing Loan Modification company's on a national platform to refer agents to. I have found one Loan Modification company that I am close to endorsing based on a couple key features. First, I like that they are in the non profit sector. Second, I like that they do not charge an advanced fee to apply to their Loan Modification program. I also like their executive transparency, nobody seems to be hiding behind gate keepers. I have a national conference call tomorrow at 1:00 with this company. I will keep you posted. In the meantime, I wrote a manual on how homeowners can speak to lenders while seeking a Loan Modification. Please email me if you would like a copy of my "Guide to Negotiating a Settlement with your lender and Keeping Your Home." Here are a few passages:

What is a loan modification? To “negotiate” a loan modification means to talk to your lender and negotiate a more favorable payment plan. This usually means lowering your rate or extending the payment plan. There are several steps:

1. Realize that you cannot pay your current mortgage rates

2. Create a income vs. expense worksheet. Include your total income, your household expenses and then calculate how much you can reasonably afford per month to pay mortgage.

3. Write a “letter of hardship” explaining your current financial situation and why you need a loan modification. Lenders do not want you to file for bankruptcy and would rather give you a loan modification. Make sure to emphasize that you can pay off your mortgage if you are given a modification. This will increase your chances of success.

4. Contact the loan modification department of your lending company. Be patient and be nice. There brokers are your key to a modification.

5. Your broker will ask you for your income worksheet and your letter of hardship. Have those ready.

6. Now its negotiation time. Your broker will be working with the bank to see if you can get a modification. At this time, read our “loan modification negotiation tips”.

7. Once negotiations have ended the decision will be made. If you failed to secure a loan modification consider contact an attorney to help you negotiate. Qualified attorney have the legal power to aggressively make you a priority to your lender. Beware of unqualified attorneys or so called “loan modification” companies. These companies do not have any more knowledge than you do from reading this article.

Good luck! If you succeed then I can guarantee you that you that paying your mortgage will be a lesser burden.

-Christopher Rockey
rockey@mresolution.com

Positive National Data

2009-08-26T13:23:00.000-07:00

After three years of declines, home prices increased 2.9% in the three months ended June 30, according to the latest S&P/Case-Shiller report. That is the first quarter-over-quarter improvement in three years.

Prices in the national index are down 14.9% compared with the second quarter of 2008, the report said. But that is better than the record 19.1% decline that was set in the first three months of 2009.

"We're seeing some positive signs," says David M. Blitzer, Chairman of the Index Committee at Standard & Poor's.

The Case-Shiller 20-city index rose quarter-over-quarter by 1.4% but fell 15.4% year-over-year. Still, that was a smaller loss than analysts were predicting: A consensus of experts compiled by Briefing.com had forecast a 16.4% drop

"This is great news; prices may be starting to grow again" said Pat Newport, a real estate analyst for IHS Global Insight. "Three independent sources, the National Association of Realtors, the Federal Housing Finance Agency and Case Shiller are showing price improvement."

Providing a boost
The slide may be over partially because prices have reached affordability levels not seen in a generation, drawing many buyers into the market.

Helping housing markets, too, is the government economic stimulus effort, which includes an $8,000 first-time homebuyers tax credit. That added discount has spurred many entry-level buyers into homeownership.

The rebound may mean that potential homebuyers will have more of a feeling of urgency, afraid that they'll miss the market bottom.

That's already happening in some of the markets that had gone through steep price declines over the past few years, such as the area east of Los Angeles that went through a severe boom and bust cycle. Home sales there are now booming again, according to Chuck Whitehead, a Coldwell Banker real estate broker.

"There's such a frenzy to get in before prices go up again," he said. "Buyers are more concerned about that than about getting the first-time homebuyers tax credit."

Among cities, Cleveland reported the biggest rebound; prices improved by 9.8% compared with the first quarter of 2009. Dallas prices rose 6.5% and San Francisco 5.9%. Prices declined in seven cities, including 7.8% in Las Vegas, 2.2% in Miami and 1.2% in New York.

Warning signs
Despite the upbeat report, Robert Shiller, one of the principle authors of the Case-Shiller index, expressed caution, pointing out that last year's turnaround quickly fizzled out.

In early 2008, prices were falling 3% a month. That improved to -0.5% a month in the spring, giving the impression that the market would turn around. But prices quickly started falling more steeply again. The same thing could happen again, especially with the economy still in a downspin.

"The really important things [affecting home prices] are unemployment and momentum," said Shiller, who is a Yale economist. "We have momentum, which is very important, but we also have high unemployment."

And, he added, "the government has not yet handled the foreclosure problem."

Increased bank repossessions could unleash of flood of new supply on the market, which could dampen prices. Plus, is also some indication of shadow inventory -- repossessed homes the banks are holding onto because they don't want to flood inventories.

That leads Stuart Hoffman, the chief economist for PNC Financial Services Group (PNC, Fortune 500), to conclude that it's still a good time to be a buyer.

"Given the tremendous amount of inventory, nearly a year's worth," he said, "it should continue to be a buyer's market for a while."

Shiller, too, is relatively optimistic despite being cautious. "I have found that momentum matters," he said, "and this is a sudden break in [downward] momentum. The [market] psychology seems to be changing."

My warning: We still need to take caution of lenders purposely holding back REO inventory so they don't inundate the market place. What happens if they do decide
to inundate because the coast seems clear?

-Christopher Rockey

Good News From Uncle Ben

2009-08-25T08:53:00.000-07:00

Federal Reserve Chairman Ben Bernanke on Friday gave his most upbeat economic outlook yet, saying the recession seems to be ending and a recovery should begin shortly.
"After contracting sharply over the past year, economic activity appears to be leveling out, both in the United States and abroad, and the prospects for a return to growth in the near-term appear good," Bernanke said at the Fed's annual conference in Jackson Hole, Wyoming.

Most economists expect the recession to end in the third quarter, with many saying it's already over. Many, however, expect unemployment — now at 9.4%— to peak above 10% early next year.

I'm not sure myself how much economic recovery we can expect when unemployment
is still projected to peak. I'm just glad to exit the Dooms Day Soap Box finally,
or am I speaking to soon?

-Christopher Rockey

To Recover or Not to Recover

2009-08-12T10:19:00.000-07:00

All over the US lenders are holding back REO inventory creating a false up rise in the housing market. We know this lets, look past it. My local newspaper this last Sunday ran an article stating 'The Road to the Housing Recovery.' I have said several times in the past I do NOT want to be a Prophet of Doom! But facts are facts, I was even manipulated a bit by several offers on every home, my solution, let's wait and see what I'm writing on my January 10th 2010 article. The title will likely say something like "I Told You SO!!"
The number of government repo homes is expected to increase further following the significant rise in the percentage of loans insured by the Federal Housing Administration in June, based on data released by the Mortgage Bankers Association.
Out of all home loans provided to homebuyers in June, FHA-insured home loans comprised 36 percent, the biggest FHA share of the home loan market since 1990.
In August 2005, FHA loans accounted for only 5.8 percent of the home loan market.
Analysts expect government repo homes to increase because of the rising trend in FHA loan default. Based on FHA data, the default rate increased to 5.65 percent in February this year, a substantial increase of nearly 23 percent from the default rate of 4.6 in October last year.
As of the last months of 2008, more than 4 percent of loans insured by FHA were delinquent by 90 days or more. These delinquencies increased the number of government repo homes.
Many housing analysts are worried that the factors that largely caused the current subprime mortgage crisis will also cause another crisis involving FHA loans and government repo homes. They pointed out current housing programs that enable many borrowers to get loans with zero down payments.
In many states, housing officials are providing financial assistance so borrowers can use the federal $8,000 tax credit to make their down payments and their closing costs.
The popularity of FHA loans exploded sharply since 2008, soaring by a staggering 314 percent nationwide. In the first two months of this year alone, 670,000 homebuyers took out FHA loans, compared to the 425,000 taken out in all the 12 months of 2007.
FHA officials expect to insure a total of 1.75 million of new loans in 2009, according to Meg Burns, head of the Office of Single Family Program Development at FHA.
Dennis Maag, a home lending regional vice president at JPMorgan Chase, said his mortgage firm has been carefully screening FHA loan applicants, putting its FHA default rate to only 0.4 percent.
Fifth Third has a 1.6-percent default rate and Huntington has a 2.4-percent default rate.
But FHA loan defaults in other mortgage banks are rising. Strategic Mortgage has a staggering 12.1-percent default rate nationwide while Countrywide Homes Loans holds a delinquency rate of 16.2 percent in Ohio.
To prevent another wave of government repo homes similar to what the subprime crisis caused, analysts said FHA must examine current FHA loan defaults and its loan insurance policies.
Despite signs that the real estate market is bottoming out, millions of homeowners are likely to find themselves in worse shape within the next two years.

In fact, here are a few numbers to think about.
Nearly half of the nation's 52 million mortgage borrowers will have negative equity by the end of the first quarter of 2011, up from the 14 million at the end of this year's first quarter, according to estimates in an Aug. 5 report by Deutsche Bank. With so many borrowers underwater – or owing more on their home than it's worth – the risk is high that they'll default and their homes will go into foreclosure, says Mark Zandi, the chief economist at Moody's Economy.com. (Moody's Economy.com estimates that 17.5 million mortgage borrowers will be underwater by early 2010.)

So what do you think is more realistic? A magical recovery during the largest recession since the Great Depression? Or... Lenders manipulating the public again?

-Christopher Rockey

You Should Go Buy a House So You Dont Have to Make Your Payments

2009-07-25T11:40:00.000-07:00

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

PSC in Van Nuys

2009-07-24T16:23:00.000-07:00

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

Yield Spread on the Chopping Block AGAIN

2009-07-24T08:11:00.000-07:00

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

Don't You Hold Back on Me

2009-07-23T17:02:00.000-07:00

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

PSC in Van Nuys

2009-07-22T16:11:00.000-07:00

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

DRE and The Loan Modification, WARNING!!

2009-07-22T16:03:00.000-07:00

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

Pre Foreclosure Specialist Certification, PSC a Huge Hit!!

2009-07-21T12:12:00.000-07:00

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

PSC Eve

2009-07-15T10:08:00.001-07:00

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

2009-07-15T09:26:00.000-07:00

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

Pre Foreclosure Specialist Certification

2009-07-13T11:49:00.000-07:00

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

PSC 6 Day Countdown

2009-07-10T16:26:00.000-07:00

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

2009-07-10T15:37:00.000-07:00

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

PSC Pre Foreclosure Specialist Certification

2009-07-09T16:08:00.000-07:00

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

Jingle Mail, Jingle Mail, Jingle All the Way to the Bank!

2009-07-09T09:29:00.000-07:00

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

No You Cannot / Yes I Can... And Will

2009-07-08T18:17:00.000-07:00

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

Can I Borrow 6 Billion Dollars Please

2009-06-30T09:17:00.000-07:00

Home prices are at their most affordable in many years, which has opened up homeownership to many who had been locked out during the housing boom. And now, the federal government -- and many states - are launching plans to hook up buyers of repossessed properties with very attractive terms.

The feds made nearly $6 billion available for the Neighborhood Stabilization Program, which intends to combat blight by reducing the number of foreclosed homes on the market.

The money, which has only started to flow during the past few weeks despite much of it being authorized last summer, will go to state and local housing authorities and non-profit organizations involved in providing housing for middle- and low-income families.

"The NSP was designed to help deal with all the properties in foreclosure around the nation," said Antonio Reilly, executive director of the Wisconsin Housing and Economic Development Authority (WHEDA), which will administrate the program in several counties in the state. Respectively (I Guess)

The bulk of the NSP funds will come from the $3.92 billion that was approved as part of the Housing and Economic Recovery Act of 2008 passed in August.

By regulation, these funds must be spent in communities with the highest incidences of foreclosures and subprime loans. They'll go to helping households earning no more than 120% of the median income of the local area, with 25% of the money going to families earning less than half the median

So we have already identified the fact that lenders made loans available called:
SIVA, SISA, NINA. Why were those loans made? Because they didn't qualify for a loan that's why! My point is this, once again it seems like there's a lot of talk and
not enough action to stop the crisis to those that need it most. I promise you the
105% FHA Refinance product is worthless in markets where the loss is well over 50%
of the loan to value.

-Christopher Rockey

Tired of a Cold Market / Move to Seattle

2009-06-26T17:04:00.000-07:00

I spent the first half of this week in LA and the second half in Seattle. While in Seattle I had the unique opportunity to speak to the Hispanic Chamber of Commerce on the subject of 'The Demand for market Stabilization and the importance of Short Sale vs. Foreclosure.' I am going to be honest I was really impressed with the speaker. Usually I get off track or rant on about a superfluous subject but for whatever reason in Seattle I just felt at peace. I did have one small hick-up that I need to apologize for. Often I forget the vast cultural and market differences between major market places outside of California. Yesterday at the Chamber although I fully announced that home owners should always seek a Loan Modification, I was more down on Loan Modification companies than up. One gentlemen really had to set me straight that there are in fact people of integrity and professional morals doing Loan Modifications. He is right, now if i was in California I would even say he was right! But here's the big problem:
The California Real Estate Commissioner, Jeff Davi, announced the issuance of a Consumer Alert by the California Department of Real Estate (DRE) warning consumers about loan modification scams and informing consumers of what they can do to protect themselves. If your not sure what Jeff davi looks like read my April article that's just before my camera got stolen in Las Vegas.

“With so many people struggling to stay in their homes, foreclosure rescue scams have risen dramatically,” DRE Commissioner Jeff Davi said. “The Consumer Alert will educate consumers and help homeowners avoid becoming victims to loan modification scams.”

With new state and federal programs, as well as new laws and regulations in place, more and more loans are being successfully modified to keep homeowners in their homes. Earlier this week, the California Department of Corporations released the results of its first quarter survey of mortgage servicers, which showed that there have been more modifications during the first three months of 2009 than there were at the same time last year. While it is welcome news that more Californians are remaining in their homes, it is also important for consumers to make sure they understand their options in regards to loan modifications. The Consumer Alert can be a valuable resource, especially since unscrupulous operators are looking to take advantage of vulnerable consumers.

Loan modification scams are worrisome and widespread. 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 over 200 Desist and Refrain Orders and Accusations involving loan modification scams and the list of offenders continues to grow. A list of the companies and persons the Department has filed an action against can be viewed at http://www.dre.ca.gov/cons_drs.asp.

Enforcement efforts are not enough; consumer education is the key to preventing any further fraud. The Consumer Alert contains important information on how consumers can protect themselves against unscrupulous providers who collect advance fees promising financially stressed borrower’s relief, but instead, do little or nothing. The alert also provides information on where to report fraud and what resources may be available to victims of fraud to recover losses suffered at the hands of illegal or incompetent operators.

It is worth noting that not all firms who collect advance fees for loan modification services do so illegally. 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 the Real Estate Law.

The Commissioner encourages all consumers to log on to DRE’s website at http://www.dre.ca.gov/mlb_adv_fees.html to check out any real estate broker wanting an up-front fee in exchange for loan modification help. Be aware, even real estate brokers with compliant advance fee agreements are prohibited from collecting advance fees for loan modification services involving a property against which a Notice of Default has been recorded.

No person is required to pay a third party for a loan modification. A consumer can simply call his or her lender or use the services of a nonprofit housing counselor. Commissioner Davi encourages consumers to visit the DRE’s website for information on loan modifications. “Log on, look ‘em up and check ‘em out” to ensure that a company wanting an advance fee is properly licensed and can legally collect an advance fee before they sign on the dotted line.

Now back to the positive note about Seattle. Not only is it absolutely beautiful, great skiing, trails, green forests (A Little Rain) but it is by area the most and highest educated population amongst any other City in the United States.

Thank you for setting me straight on Loan Modifications.

I am certainly anxious to return to Seattle!

-Christopher Rockey

Is Your Money Safe?

2009-06-23T09:37:00.000-07:00

Below is a list of all the US banks that have closed this year, with the most recent ones first.

A total of 40 banks have failed so far in 2009, versus 25 for all of 2008.

Failed Banks 2009
Bank Location Date Closed Assets Cost to FDIC
First National Bank of Anthony Anthony, Kan. 6/19/09 $156.9 mil. $32.2 mil.
Cooperative Bank Wilmington, N.C. 6/19/09 $970 mil. $217 mil.
Southern Community Bank Fayetteville, Ga. 6/19/09 $377 mil. $114 mil.
Bank of Lincolnwood Lincolnwood, Ill. 6/5/09 $214 mil. $83 mil.
Citizens National Bank Macomb, Ill. 5/22/09 $437 mil. $106 mil.
Strategic Capital Bank Champaign, Ill. 5/22/09 $537 mil. $173 mil.
BankUnited, FSB Coral Gables, Fla. 5/21/09 $12.80 bil. $4.9 bil.
Westsound Bank Bremerton, Wash. 5/8/09 $334.6 mil. $108 mil.
America West Bank Layton, Utah 5/1/09 $299.4 mil. $119.4 mil.
Citizens Community Bank Ridgewood, N.J. 5/1/09 $45.1 mil. $18.1 mil.
Silverton Bank, N.A. Atlanta, Ga. 5/1/09 $4.1 bil. $1.3 bil.
First Bank of Idaho Ketchum, Idaho 4/24/09 $488.9 mil. $191.2 mil.
First Bank of Beverly Hills Calabasas, Calif. 4/24/09 $1.5 bil. $394 mil.
Michigan Heritage Bank Farmington Hills, Mich. 4/24/09 $184.6 mil. $71.3 mil.
American Southern Bank Kennesaw, Ga. 4/24/09 $112.3 mil. $41.9 mil.
Great Basin Bank of Nevada Elko, Nev. 4/17/09 $270.9 mil. $42 mil.
American Sterling Bank Sugar Creek, Mo. 4/17/09 $181 mil. $42 mil.
New Frontier Bank Greeley, Colo. 4/10/09 $2.0 bil. $670 mil.
Cape Fear Bank Wilmington, N.C. 4/10/09 $492 mil. $131 mil.
Omni National Bank Atlanta, Ga. 3/27/09 $956 mil. $290 mil.
TeamBank, National Association Paola, Kan. 3/20/09 $669.8 mil. $98 mil.
Colorado National Bank Colorado Springs, Colo. 3/20/09 $123.5 mil. $9 mil.
FirstCity Bank Stockbridge, Ga. 3/20/09 $297 mil. $100 mil.
Freedom Bank of Georgia Commerce, Ga. 3/6/09 $173 mil. $36.2 mil.
Security Savings Bank Henderson, Nev. 2/27/09 $238.3 mil. $59.1 mil.
Heritage Community Bank Glenwood, Ill. 2/27/09 $232.9 mil. $41.6 mil.
Silver Falls Bank Silverton, Ore. 2/20/09 $131.4 mil. $50 mil.
Pinnacle Bank of Oregon Beaverton, Ore. 2/13/09 $73 mil. $12.1 mil.
Corn Belt Bank and Trust Company Pittsfield, Ill. 2/13/09 $271.8 mil. $100 mil.
Riverside Bank of the Gulf Coast Cape Coral, Fla. 2/13/09 $539 mil. $201.5 mil.
Sherman County Bank Loup City, Neb. 2/13/09 $129.8 mil. $28.0 mil.
County Bank Merced, Calif. 2/6/09 $1.7 bil. $135 mil.
Alliance Bank Culver City, Calif. 2/6/09 $1.14 bil. $206.0 mil.
FirstBank Financial Services McDonough, Ga. 2/6/09 $337 mil. $111 mil.
Ocala National Bank Ocala, Fla. 1/30/09 $223.5 mil. $99.6 mil.
Suburban Federal Savings Bank Crofton, Md. 1/30/09 $360 mil. $126 mil.
MagnetBank Salt Lake City, Utah 1/30/09 $292.9 mil. $119.4 mil.
1st Centennial Bank Redlands, Calif. 1/23/09 $803.3 mil. $227 mil.
Bank of Clark County Vancouver, Wash. 1/16/09 $446.5 mil. $120-$145 mil.
National Bank of Commerce Berkeley, Ill. 1/16/09 $430.9 mil. $97.1 mil.

So now that I can do the research and find out who's closed, would you like to know who's staying open?

Remember this is just me talking (Writing) out loud:
Bank of America
Chase
Wells Fargo
Citibank / Citigroup
Goldman Sachs (international/National Banking and Asset management)

Beyond those, nothing shocks me. Even B of A has had major exposure issues.

-Christopher Rockey

Chase Away Customer Service

2009-06-23T08:30:00.000-07:00

In the Short Sale and Loan Modification world there is a huge lack of responsibility. Lenders are overworked and underpaid in their Loss Mitigation department. I will give them that. But that does not give them the right to behave poorly and not be part of the solution.

The Obama administration's $75 billion program to reduce foreclosures has been beset by backlogs and delays, leading many overstretched homeowners to complain about unreturned phone calls and inaccurate information from lenders, while others say they were denied help for reasons that weren't clear.
Details of the plan were unveiled in early March. The goal is to prevent up to 4 million foreclosures by having banks modify loans into more affordable monthly payments.

Since its debut, the plan has led to offers of more than 190,000 mortgage modifications with lower monthly payments, according to the Treasury Department. During that time, lenders either have started or advanced foreclosure proceedings against more than 1 million homes, according to RealtyTrac. About 20% of those were foreclosed upon and repossessed. The Center for Responsible Lending says 2.4 million Americans are at risk of foreclosure in 2009, and 8.1 million could be over the next four years.

Homeowners who apply for mortgage modifications are finding that banks typically are taking 45 to 60 days to respond to inquiries, according to a report this month by NeighborWorks America, a provider of foreclosure-prevention counseling.

Some homeowners who applied for mortgage modifications five months ago still have no answer on whether they will be able to arrange smaller monthly payments, leaving them uncertain whether they'll keep their homes or lose them shortly.

"Some lenders may not be turning (homeowners) down right away because it might be politically easier to push them off and delay," said Joel Naroff at Naroff Economic Advisors. "No one will admit they're doing this."

Naroff also says banks today are dealing with even more demand for mortgages, including refinancings, than during the peak of the housing bubble in 2006, and the backlog is likely to get worse as more homeowners lose their jobs. Mortgage delinquencies have been growing in areas where unemployment has been rising fast, and even homeowners who successfully get modified mortgages could face trouble later if their incomes or home values fall.

Lenders say they're doing the best they can with a tsunami of requests, but some industry officials say delays are hampering efforts to revive the housing market.
It doesn't take an industry official or a rocket scientist to figure that out!!

"The loan-modification program is suffering. What we're doing right now isn't working as expected," says Richard A. Smith, CEO of Realogy, the parent company of Century 21, Coldwell Banker, Sotheby's International Realty and ERA. "The delays are horrible. Banks, unfortunately, just weren't geared up for this." I say put a sign out front that says "Now Hiring Friendly CEO's"

This month, Sen. Jack Reed, D-R.I., and 14 other senators wrote a letter to Housing and Urban Development (HUD) Secretary Shaun Donovan and called for a new strategy to get lenders to respond to homeowners faster.

"Of particular concern are homeowners who have been instructed by HUD-approved counselors to contact their (loan) servicers only to be rebuffed or, worse, never even reach their servicer," it said.

Robin and Craig Doyle of Woodland Hills, Calif., have been trying to get a loan modification through their lender, JPMorgan Chase, since February.

Robin, who does freelance writing from home, said she initially was told to send a letter describing her hardship, paycheck stubs, tax returns and other information.

She assembled a 200-page file and sent it along. A month later, she was told she had to redo the information because the file she'd sent had become outdated.

Another time, Robin says, she was told her file had been mistakenly closed altogether. On another occasion, she was told the request couldn't be processed because she hadn't included information about a homeowner association fee, even though her family doesn't belong to such an association.

"I've had to resend it four times," says Robin, 35. "It's making me sick. It's been five months. I've spent hours and hours on this and sleepless nights. It's foremost on my mind. I look at my beautiful home and wonder if I'll have it next month."

The Doyles pay $5,031 a month on a mortgage of $947,000. They have an interest-only loan at a 6.3% rate that will reset in about seven years. On interest-only loans, borrowers pay only interest for a specific period to temporarily reduce the payments. After that, they pay interest and principal.

Craig, a writer in the television and movie industry, is still finding work but not as much as before. This is the first month the family has failed to make its mortgage payment.

"I feel like Obama's plan has done absolutely nothing," says Craig, 38.

Jennifer Zuccarelli, a Chase spokeswoman, says there were miscommunications in the Doyles' case, and the bank is working to resolve the situation. It also has added about 950 loan counselors the past six months.

"We're hiring hundreds more every month," Zuccarelli says.

After USA TODAY contacted Chase for comment, the Doyles say the bank told them the next week to resubmit their application. They later were told they don't qualify for the Obama plan because their loan amount is too high.

Bonuses for mortgage collectors

Other major lenders say they are beefing up staffing to process modification requests. Some say it has taken time because details of the Obama administration's plan weren't outlined until March.

Under the plan, if the borrower's monthly payment is reduced by 6% or more but not below a 31% mortgage-debt-to-income ratio, the servicer can receive success payments of up to $1,000 for three years, provided the borrower stays current.

Once a three-month trial period is complete and loan documents are signed, the servicer is entitled to a one-time $1,000 incentive payment and the investor receives a $1,500 check.

The investor incentive is important because the program is targeted mainly at hard-to-modify loans in certain mortgage-backed securities.

Loan modifications can help borrowers by reducing mortgage principal, the interest rate or the term of the loan. The government also has set aside money to help up to 5 million families refinance into safer long-term mortgages from risky kinds of adjustable mortgages whose payments could soar to unaffordable levels.

Those who don't qualify for either refinancing help or loan modifications under the government's program are counseled on other alternatives to foreclosure, such as short sales where lenders agree to a home's sale for less than the mortgage balance.

Bank of America reports that it modified about 232,000 mortgages last year. During the first four months of this year, it has completed about 157,000 modifications — all before the Obama housing rescue plan went into effect.

To settle claims brought by attorneys general in 11 states, Bank of America last year agreed to modify loans for homeowners holding riskier loans that often balloon into larger monthly payments later. The claims involved mortgages that originated with Countrywide Financial, which Bank of America took over in 2008.

Bank of America expects to begin processing applications from homeowners who are current with their mortgage within a few weeks.

Treasury Department officials say 16 mortgage servicers — the companies that collect homeowners' monthly payments — have signed up to participate in the program. They say they are aware of servicer delays.

"Treasury continues to pursue strategies to help servicers reach more borrowers faster. Given the fragile state of housing markets, we will need to continue to do more to ensure loan modifications are occurring at scale under our program," says Meg Reilly, a Treasury spokeswoman.

Lenders say they need to take time to review each application so that the modifications are meaningful. Some economists also warn that rushing approvals could result in modifications that only delay foreclosures rather than prevent them.

'I don't know who to trust'

Some applicants who were turned down say they don't understand why.

Judy Lederman, 49, of Scarsdale, N.Y., a freelance writer after losing her full-time job in public relations a year ago, says she tried to get a modification with Chase about three months ago. She has an interest-only loan at 5.25% that resets in one year. How high it will rise depends on interest rates then.

She says Chase denied her request a few weeks ago because she has an adjustable-rate mortgage, but other borrowers with ARMs are getting modifications under the Obama plan.

"They kept me on hold and waiting for months. I bent over backwards to get them what they needed, but it was like no one was home," Lederman says. "I really don't know what else to do. I don't know who to trust."

The day after USA TODAY called Chase for comment, Lederman says the bank called her. She says the representative told her she was turned down because of missing information and that new forms to apply for a modification were being expedited to her home. "There was some miscommunication, but we have reconnected with the borrowers and are working on finding solutions for them," Zuccarelli says regarding the complaints about Chase.

If I were more secure about my job right now I would have a wish list. In fact I'm going to write another article on all the failed banks that have imploded thus far. Then at the end of that article I'm going to state who should be on that list based on their horrible pathetic behavior in Loss Mitigation.

-Christopher Rockey

The Loan Modification and Santa Claus

2009-06-22T16:20:00.000-07:00

I was talking to my favorite person yesterday and they were telling me of all the interesting and unique opportunities clients bring to them in this market. My favorite person was a lier AKA a Lawyer. You know these guys can legally take a retainer fee for breathing. What's worse is that people are willing to pay the retainer fee because of the three little initials behind an attorneys name ESQ. So here it is, an attorney can legally and ethically say that they will get you a 'Loan Modification' because with the right paper work an attorney can increase a homeowners payments. The myth is that not all Loan Modifications are created equal. Lenders will often offer a Loan Modification that is very much in favor of that particular lender. Not necessarily in favor of the homeowner who is actually in a distressed financial situation. Remember in order to get paid on a Loan Modification
you must take money up front, there is no close of escrow or a promise to pay you later. With that said, people will say and do anything they can to get there up front fee. You want a 1% thirty year fix, no problem. How about I reduce your principal balance while I'm at it. Hey I have a better idea, give me five thousand dollars up front and I will do the following:
1% thirty year fix
cut 50% of your principal balance
do a full 'Forensic Loan Analysis' to get you a free home

I will do all this for the low low price of just five thousand dollars.

the same people that got us into the problem have yet again found a way to thrive off the people they put into this situation. My personal belief is they should all be tarred and feathered publicly!

Loan Modification although becoming more popular was basically invented by the same retail genius who invented the word 'Santa Claus' it's just not real. The most common loan modification is a five year band aid, no cut of principal balance and a big problem in five years from now!!

-Christopher Rockey

Let's Stop the Rumors Here

2009-06-19T14:35:00.000-07:00

No California Foreclosure Moratorium But You Can Save Your Home With Loan Modification Programs in Los Angeles and Throughout California

http://www.foxbusiness.com/story/california-foreclosure-moratorium-save-home-loan-modification-programs-los/

LOS ANGELES, June 17, 2009 /PRNewswire via COMTEX/ ----The new "foreclosure moratorium laws" do not guarantee homeowners a loan modification and will do little to stop a trustee sale. Governor Schwarzenegger's signature on the recent California Foreclosure Prevention Act, similar to the Obama Making Homes Affordable Plan, is unlikely to stop or delay most foreclosures. The bill is a step in the right direction by adding 90 days to the 3 month time frame between a notice of default and a notice of trustee sale, but leaves loopholes that allow lenders to be excluded upon application to the state or by implementing a loan modification program. The law only applies to certain loans for owner occupied properties and does not require lenders to stop a trustee sale that has already been scheduled. In addition, the lenders are not required to give borrowers a modification under these laws, but they do need to implement loan modification programs to avoid delay.

"Do not trust your mortgage company's nice customer service person telling you that you are covered by the foreclosure moratorium. You are dealing with a huge organization with thousands of foreclosure calls per day. I have clients who were told by their lender that they were postponing their sale and then sold the home anyway. Once the trustee sells your house, it is extremely difficult to get it back, even in court," said loan modification attorney Chris Barsness, Esq. "In order to assure you protect and save your home, don't assume you are covered by the moratorium. The good news is that many lenders are successfully implementing their new loan modification programs, so there really is hope for homeowners, but you must act."

Read more articles: http://barsnesscohen.blogspot.com

About the Law Office of Barsness & Cohen

The Law Office of Barsness & Cohen is a licensed California law firm where a loan modification lawyer provides legal advice and solutions for clients facing foreclosure or real estate issues. They assist clients in obtaining the best legal option for foreclosure relief, including mortgage modification, short sale, bankruptcy, and other foreclosure alternatives. They are a Debt Relief Agency as defined by Federal Law. They help people file for relief under the Bankruptcy Code. Advertisement for legal services. Although I have not met nor do I endorse Barness and Cohen, I certainly will say their heart seems to be in the right place.

-Christopher Rockey

FHA , VA, Convetional Short Sale Equations

2009-06-19T12:05:00.000-07:00

In working Short Sales, there are some numbers and calculations that are especially critical and knowing how to run these calculations will ultimately save you many headaches in the long-run. For instance, the initial list price for the Listing Agreement that is submitted to the bank, the initial list price for MLS, the net amount that banks typically require in a Short Sale given the type of loan, the bottom-line offer that will be necessary to cover the bank's required net, as well as all broker commissions and Seller closing costs. In addition, you need to know how the numbers are affected if there are multiple mortgages on the property. All of these numbers are critical for you to facilitate the transaction effectively, gain credibility with the bank, and best represent your client.

Determine the Lender's Discount Threshold

Banks have a threshold at which they will accept or reject on offer in a Short Sale. And knowing these approximate discount thresholds is imperative in determining your list price for MLS, so that you are able to generate an offer that will meet the bank's requirements, as well as cover all the Seller closing costs and protect your commission. When we refer to the banks "discount threshold", we are referring to the net amount that the bank requires in the transaction after all approved closing costs and commissions have been paid in the transaction. As a reminder, when it comes time to go active on the market in MLS, you need to adjust the price in the Listing Agreement and have your client initial off on this price change.

Calculating the initial list price for MLS is a critical part of setting up the Short Sale. We all know that when considering market comparables for a specific area, if the price per square foot of your client's property is equal to or higher than any other property in the neighborhood, your chances of getting an offer quickly are pretty slim and the whole goal in a Short Sale is generating an offer quickly so that the house doesn't go to foreclosure. In many states, the foreclosure process is a very aggressive one, so knowing how to calculate your initial list price for MLS is imperative. To do this, you must know what kind of loan you are shorting and have a good idea as to what the lender's discount thresholds are for each type of loan.

Currently...

FHA loans are insured at 82% of the current market appraised value

VA loans are guaranteed at 88-91% of the current market appraised value

Currently, Conventional and Home Equity lenders expect net proceeds of no less than 85-92% of the current market appraised value.

Note: These thresholds represent a percentage of current market value, not the loan balance. Currently, the Conventional threshold is 85-92% of current market value. This threshold fluctuates with the market and is lender-specific. We have been working Short Sales for almost 5 years and FHA and VA thresholds have not changed during this time. Know that changes in market conditions, bank policy and/or the passing of legislation can effect these thresholds. If the market takes a turn for the worse and property inventory increases for lenders, you will most likely find that Conventional thresholds will decrease. As usual with any of the governmental
standardization processes I'm not holding my breath.

-Christopher Rockey

Is My Math Right Here?

2009-06-05T13:59:00.000-07:00

Consumer and commercial bankruptcy filings are on pace to reach a stunning 1.5 million this year, according to a report from Automated Access to Court Electronic Records. Maybe it's just me but isn't that about 5,000 filings per day?
While well below the record 2 million filings in 2005, the number of filings is up sharply from last year's 1.1 million, says Robert Lawless, professor of law at the University of Illinois.

Bankruptcy filings took a dramatic nose dive after a 2005 bankruptcy reform measure was signed into law to curb bankruptcy abuse and make it harder to erase debts.

But filings are surging back in part because of rising job losses. The unemployment rate could hit 10% this year. And tighter credit, dwindling 401(k) accounts, smaller paychecks and less savings have left unemployed workers and those who are working but struggling with fewer financial resources to keep creditors at bay.

Over the past decades, consumers who were hurting financially could rely on credit cards to help them tread water. "The fact that consumer credit has tightened and shrunk explains why bankruptcy filings have now gone up so dramatically,"

Which we all know that a happy BK attorney is one that continue to collect more fees.

-Christopher Rockey

You Have Three Options to Avoid Foreclosure

2009-06-04T09:56:00.000-07:00

A 'Foreclosure Start' is when the process of foreclosure action begins with the lender's first step of legal action. In judicial states it becomes recorded as 'Lis Pendens' in non judicial you will hear about a 'Notice of Default' being recorded against the property. Most lenders will always be ever so kind and write a 'Letter of Intent' on or around the sixtieth day of non payment.

According to the D.C.-based nonprofit homeownership research and advocacy group the Center for Responsible Lending (CRL), a dismal milestone was reached over the weekend – the organization says one million new foreclosures have been filed so far in 2009.

CRL’s news comes on the heels of last week’s first quarter 2009 National Delinquency Survey by the Mortgage Bankers Association, showing that 12 percent of all mortgages are now delinquent – the highest level since the industry trade group began compiling delinquency numbers 37 years ago.

Michael Calhoun, president of CRL, called the rapid escalation in foreclosures alarming. “It’s easy to think, ‘Well, that’s tough luck for the families that lose their homes.’,” Calhoun said, but he cautioned, “The truth is that foreclosures are costing neighboring families hundreds of billions of dollars and dragging down the entire economy. Foreclosures started today’s crisis, and foreclosures will keep the crisis going if this epidemic continues.”

The Center for Responsible Lending projects 2.4 million foreclosure starts in 2009. The organization warns that these foreclosures will reduce the property values of some 70 million nearby homes by a total of $502 billion – about $7,200 per family. Through 2012, CRL said, these numbers will rise to at least 9 million foreclosures that will cost 92 million neighboring families $1.9 trillion in lost home value.

The center points out that the industry’s track record proves loan modifications that fail to lower a homeowner’s monthly payments are not likely to succeed. The Obama administration’s foreclosure relief plan, however, includes stronger incentives for servicers to pursue more sustainable loan repairs. And CRL says these new guidelines encourage earlier intervention and loan modifications more likely to reduce monthly payments — tools designed to stabilize the housing market and keep people in their homes.

CRL points out though, that while the industry waits for the next wave of mortgage modification programs to be put into place, a new foreclosure starts every 13 seconds – tallying nearly 6,500 each day. The organization has sent out an urgent call to lenders and loan servicers, “to work with homeowners in good faith to dramatically increase loan modifications that actually stop foreclosures and keep people in their homes”.

Option number one is a 'Loan Modification'
Option number two is a 'Short Refinance'
option number three is a 'Short Sale'

beyond those you can have the option of a 'Deed in lieu' or 'Foreclosure' itself
which we obviously want to do anything to avoid. You can make argument for forbearance agreement but that really fits under the 'Loan Modification' option. The
first three options all avoid the 'F' word!!

-Christopher Rockey

Not all Treasury Secretary's are Created Equal

2009-06-03T13:26:00.000-07:00

Dear Mr. Geithner,

With all the money you saved by not paying your taxes you may not have to do a
Short Sale. You might just be able to write a check for the decrease in value
on your home.

Truth be told I am a strong advocate of anyone that even claims to want to find stabilization and standardization in our market place.

Treasury Secretary Tim Geithner is struggling to unload his million-dollar manse located in a posh New York City suburb. And like so many other Americans, he'll probably lose money on it when he does.

Geithner and his wife Carole put their 5-bedroom Tudor-style home in Larchmont, New York on the market for $1.635 million in February, just days after he was tapped by the Obama administration to help lead the nation out of the worst economic crisis in a century.

The Geithners paid a premium for the house when they bought it in 2004, plunking down $1.601 million after a bidding war. The "exquisitely renovated" home was originally built in 1931, according to a listing for the 0.2 acre property.

Although I would find it comedic if he did go short and couldn't get 'Full Settlement Language' against any further recourse from Ken Lewis down at Bank of America.

-Christopher Rockey

GM / GMAC That is the Question

2009-06-02T10:23:00.000-07:00

GMAC Financial Services said Monday the finance company doesn't intend to seek protection under the U.S. Bankruptcy Code and continues to meet all its obligations.
The Chapter 11 courts must be heartbroken.

General Motors Corp. (GM), which filed for bankruptcy Monday morning, owns 49% of cash-strapped GMAC. The lender got a $5 billion capital infusion under the U.S. Treasury Department's Troubled Asset Relief Program as it became a bank holding company several months ago. I thought TARP stood for something else? See my previous article.

As a creditor of GM, GMAC said it is taking the "appropriate steps" to protect its interests during the auto maker's restructuring. GM has submitted a motion to the bankruptcy court that would allow its direct business with GMAC to continue during the bankruptcy case.

GM's prepackaged plan leaves the federal government in control of a downsized auto maker, faced with the weakest market conditions in a generation.

Last month, GMAC said its first-quarter loss widened as credit woes continued to mount and weak economic conditions hurt results. Still, the company said it was seeing some improvement in mortgage origination, as the beleaguered Residential Capital LLC unit posted a narrower loss but continued to struggle with high credit costs.

So let's talk about something nice rather than the market shall we.

-Christopher Rockey

Is it enough? You decide.

2009-05-22T12:45:00.000-07:00

Personally I was hoping for much more than what the lenders are already saying they are doing. You give me your thoughts.

http://www.realtor.org/press_room/news_releases/2009/05/short_sales_process?lid=ronav0019

We Shall See

2009-05-22T12:38:00.000-07:00

I hear and read something new every day as far as 'Standardizing Short Sales.' Even NAR would like to see something change. I don't believe the industry is set up to positively succeed in a true standardization process due to so many unpredictable and uncontrollable variables.

Help is on the way for many homeowners who are facing foreclosure, thanks to new details under the Making Home Affordable Program announced today by the U.S. Treasury and the U.S. Department of Housing and Urban Development.

The Making Home Affordable Program is designed to help homeowners obtain modifications to their loan so they can afford to stay in their home. Where a modification is not possible, new incentives encourage the “quick private sale or voluntary transfer of property, which will save homeowners money and protect their financial future,” according to U.S. Treasury Secretary Timothy Geithner. The National Association of Realtors® expects that a uniform process for handling short sales and financial incentives will facilitate this process.

“NAR is pleased that the government is stepping in to help prevent foreclosures by streamlining the short-sale and deeds-in-lieu process,” said NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth. “NAR has been calling for uniform short sales procedures and other initiatives that will help today’s homeowners in challenging economy.”

Short sales occur when a bank agrees to let homeowners who have fallen behind on their mortgage to sell their home for less than they owe on their mortgage. Visit www.treasury.gov for detailed information on the program changes.

“Many families are finding themselves with a mortgage that is higher than their current home value, and they are struggling,” said McMillan. “As Secretary Geithner noted, and as NAR has been advocating for many months, stemming the foreclosure crisis and stabilizing the housing market are critical to our economic recovery.”

“We have heard from Realtors® that the extensive delay in the short sale process had caused many buyers to go elsewhere and have left many would-be sellers with no option but foreclosure. We are all pleased that the government has stepped in to help homeowners and those wishing to buy a home,” McMillan said.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

Let me know what you think, I'm anxious to hear.

-Christopher Rockey

H4H Round Two

2009-05-22T10:11:00.000-07:00

As many of you know I am a HUGE advocate of the H4H Short Refinance program. Actually
I am a huge advocate of any program that keeps consumers in their homes. The H4H Short Refinance program is an equity share program. The equity share is for thirty years. I have all the details on this program should you be curious contact me directly at: rockey@mresolution.com

One of the biggest disappointments of the foreclosure prevention fight has been HOPE for Homeowners, a plan Congress passed in an attempt to help as many as 400,000 underwater, delinquent borrowers from going into foreclosure.

In its first seven months, HOPE for Homeowners helped one family stay in its home.

Congress and the Obama administration are hoping to do a lot better than that.

On Wednesday, President Obama signed into law a bill that attempts to correct the program's problems. The president said the program had many provisions that discouraged servicers from using it.

"This bill removes those hurdles," Obama said.

The original bill, which took effect Oct. 1, was intended to help defaulting homeowners by having banks voluntarily reduce mortgage balances to 90% of a home's current market value. The loan would then be refinanced into a mortgage insured by the Federal Housing Administration (FHA).

The idea was that the lenders take "haircuts" and the government would then bail them out of any future losses by insuring the new loan.

As a result, most of the big lenders didn't offer the program, which was strictly voluntary though heavily encouraged by the Bush and Obama administrations. "The lender basically short-sells the mortgage into the plan, and there's no more chance for upside," said Tom Kelly, a spokesman for JP Morgan Chase (JPM, Fortune 500).

The new version of HOPE sweetens the FHA-refinance option - for lenders. It only requires servicers to reduce balances to 93% of market values instead of 90%. It also pays servicers $1,000 for every Hope-refinanced loan.

For example, borrowers who owed $220,000 on a house valued at $200,000 would need their mortgage balances reduced to $180,000 to qualify for an original HOPE for Homeowners refi. That's a $40,000 writeoff. Under the new plan, lenders would have to forgive $34,000.

But the biggest change is that it authorizes FHA's parent agency, the Department of Housing and Urban Development (HUD), to share future home-price appreciation with investors, up to the appraised value of the property when the existing loan was first issued.

The original bill gave HUD the right to share potential profits 50/50 with homeowners, but now some of HUD's share would go to the original investors.

Also certain to increase servicer utilization of HOPE for Homeowners is a change in Treasury Department policy announced late last month. Treasury will require any servicer that signs up to participate in the Making Home Affordable program, the administration's mortgage modification plan, to evaluate borrower eligibility for Hope for Homeowners as well.

If borrowers don't fit into the Making Home Affordable program but are viable for HOPE, the servicers must offer them this option.

Industry insiders say they hope the changes will spur more lenders to use the plan.

"It's very important that it becomes a better program," said Faith Schwartz, director of Hope Now, a coalition of lenders, servicers, mortgage investors and community advocates. "We need the FHA to provide another outlet for refinancing these problem loans."

The final bill removed a provision that would have authorized bankruptcy court judges to lower mortgage balances to reflect current market values. Supporters of this "cramdown" believed it would pressure lenders into making more affordable modifications for at-risk borrowers. But the Senate removed that from their version of the bill and the House followed suit.

-Christopher Rockey

Think Your Underwater?

2009-05-18T08:42:00.000-07:00

The downturn in home prices has left about 20% of U.S. homeowners owing more on a mortgage than their homes are worth, according to one new study, signaling additional challenges to the Obama administration's efforts to stabilize the housing market.

The increase in the number of such "underwater" borrowers comes amid signs that falling prices are making homes more affordable for first-time buyers and others who have been shut out of the housing market. But falling prices also make it more difficult for homeowners who get into financial trouble to refinance or sell their homes, and for others to take advantage of lower interest rates.

More from WSJ.com:

• Affluent Homeowners Sink Further

• Cheaper Than Selling: Banks Wreck New Houses

• Foreclosure Trouble Spreads to Farms

For instance, fewer will qualify to take advantage of a key component of the Obama administration's plan to stabilize the housing market. Under the plan, announced in February, as many as five million homeowners whose loans are owned or guaranteed by government-controlled mortgage giants Fannie Mae and Freddie Mac can refinance their mortgages, but only if the mortgage loan is a maximum of 105% of the home's value.

Government officials are considering an increase in that limit. "It's a question that we're looking at," said James Lockhart, director of the Federal Housing Finance Agency, which regulates Fannie and Freddie.

Real-estate Web site Zillow.com said that overall, the number of borrowers who are underwater climbed to 20.4 million at the end of the first quarter from 16.3 million at the end of the fourth quarter. The latest figure represents 21.9% of all homeowners, according to Zillow, up from 17.6% in the fourth quarter and 14.3% in the third quarter.

"What's going on here is that you don't have any markets that have turned around and you have new markets, like Dallas, that have joined the ranks" of communities where home prices have fallen, said Stan Humphries, a Zillow.com vice president.

More from Yahoo! Finance:

• Let Obama Help Pay for Home Upgrades

• America's Top-Selling Luxury Neighborhoods

• U.S. Cities Where It's Hardest to Get By

--------------------------------------------------------------------------------
Visit the Real Estate Center

Borrowers who owe far more than their home is worth may also be less likely to participate in another part of the government's housing plan, which provides incentives for mortgage companies to modify loans to make payments more affordable. Thomas Lawler, an independent housing economist, said borrowers who owe 30% more than their homes are worth are far more likely to walk away from their property than those who owe just 5% or 10% more and expect prices to rebound. More than one in 10 borrowers with a mortgage owed 110% or more of their home's value at the end of last year, according to First American CoreLogic.

There are some recent indications that the housing market could be beginning to stabilize. The National Association of Realtors pending home-sales index, for instance, increased 3.2% in March.

No I am not 'Chicken Little.' No the sky is not falling. In most local markets
across the US, houses listed in the price range of 200K or less are getting
offers within 10 days. REO's are selling within 45 days and Short Sales are
selling from 45 days of bank approval typically.

-Christopher Rockey

100 Post Anniversary

2009-05-15T17:57:00.000-07:00

And not a whole lot of anything that important to mention. I did find the
following article which I found funny because I am such a huge advocate of foreclosureradar.com. I like many others nation wide consider Foreclosure Radar to be the best of the best. Sean O'Toole the company's founder is considered beyond brilliant. So why doesn't Sean get more national coverage? Because Foreclosure Radar
is only in California. So, again, more from RealtyTrac...

Foreclosures up less than 1 percent in April, increase 32 percent from year ago
Foreclosure filings, which include default notices, auction sale notices, and bank repossessions, were reported on 342,038 U.S. properties in April, an increase of less than 1 percent from the previous month and an increase of 32 percent from the same period a year ago, according to a report released today by RealtyTrac®. The report also shows that one in every 374 housing units nationwide received a foreclosure filing in April.
“Much of this activity is at the initial stages of foreclosure, while bank repossessions, or REOs, were down on a monthly and annual basis to their lowest level since March 2008,” said James J. Saccacio, chief executive officer of RealtyTrac®. “This suggests that many lenders and servicers are beginning foreclosure proceedings on delinquent loans that had been delayed by legislative and industry moratoria. It’s likely that we’ll see a corresponding spike in REOs as these loans move through the foreclosure process over the next few months.”

Foreclosure activity in California decreased 10 percent in April compared with March, although the state still posted the nation’s third highest state foreclosure rate in April, with one in every 138 housing units receiving a foreclosure filing during the month. Total foreclosure activity in California was up 42 percent last month compared with the same period a year ago, according to the report.

That's the news, I'm currently taking topic requests.

I will be in Tampa Bay On Tuesday with Scott Thompson. I will let you know how it goes.

-Christopher Rockey
rockey@mresolution.com

Spank That Fannie

2009-05-12T15:11:00.000-07:00

This reminds me of the time when I was young and I needed 10 bucks. I went to mom
and asked for 20 (And got it) then went to Dad and asked for twenty (Got five) I'm
wondering if the books are cooked in the opposite direction in the favor of yet again the Servicing giant Fannie Mae. This is called 'Icing the Dollars' or 'Book
Chilling.' I iced the dollars needed from mom and dad to get a larger benefit.

Fannie Mae reported yesterday that it lost $23.2 billion in the first three months of the year as mortgage defaults increasingly spread from risky loans to the far-larger portfolio of loans to borrowers who have been considered safe. Ohhh Waaaa.

The sobering earnings report was a reminder of the far-reaching implications of the government's takeover in September of Fannie Mae and the smaller Freddie Mac. Losses have proved unrelenting; the firms' appetite for tens of billions of dollars in taxpayer aid hasn't subsided; and taxpayer money invested in the companies, analysts said, is probably lost forever because the prospects for repayment are slim.

But the government remains committed to keeping the companies afloat, because it is relying on them to help reverse the continuing slide in the housing market and keep mortgage rates low.

Even as the government bailout of banks appears to be leveling off, the federal rescue of Fannie and Freddie is rapidly growing more expensive. Fannie Mae said that the losses will continue through at least much of the year and that it "therefore will be required to obtain additional funding from the Treasury." Analysts are estimating that the company could need at least $110 billion.

Freddie Mac, which has been in worse financial shape than Fannie Mae and has obtained $45 billion in taxpayer funding, will report earnings in coming days.

Fannie's most recent loss compares with a $2.2 billion loss in the first quarter last year, before the government takeover.

Fannie Mae, of the District, and Freddie Mac, of McLean, have been growing ever more dependent on federal largesse. The Federal Reserve has bought $366 billion of their mortgage investments and $70 billion of their debt, and has pledged to buy hundreds of billions of dollars more of both. The Treasury has pledged $200 billion to each company to keep them solvent and already bought $124 billion of their mortgage investments.

In total, the government has committed about $2 trillion to supporting Fannie and Freddie and buying the securities they issue.

Over the next 10 years, the government's rescue of Fannie Mae and Freddie Mac is expected to cost $389 billion, exceeding the cost of investments in banks and other financial firms by the government's Troubled Assets Relief Program, according to a recent study by Subsidyscope, a project of the Pew Charitable Trusts. The group based its calculations on Congressional Budget Office figures.

The federal government seized Fannie Mae and Freddie Mac last September out of concern that they would collapse and threaten the entire financial system. Since then, the companies have been called on to carry out large parts of the government's plan to spur a housing recovery by modifying mortgages and taking anti-foreclosure steps.

Fannie Mae said these programs are likely to have "a material adverse effect on our business, results of operations and financial condition, including our net worth." But, it said, the program could yield long-term benefits. "If, however, the program is successful in reducing foreclosures and keeping borrowers in their homes, it may benefit the overall housing market and help in reducing our long-term credit losses."

I always love the words 'If However' especially when it comes to my tax dollars.

-Christopher Rockey

Not Just a Local Problem When NAR Steps Up

2009-05-07T09:14:00.000-07:00

There is a very serious commitment that Real Estate agents and Mortgage Professionals have made to this market. The good news is, most agents that had not made that commitment of excellence and integrity are out of the business altogether by now. The National Association of Realtors is now intercepting anyone who may not have the fiduciary responsibility of our core business in mind as priority number one, OUR HOMEOWNERS. Foreclosure rescue scams and other predatory and irresponsible lending practices have been on the rise, negatively impacting families, communities, and the housing market. The National Association of Realtors® testified today on the importance of protecting homeowners from these anti-consumer practices.

“Foreclosures lead to families losing their homes and their savings, and can cause entire neighborhoods to lose home value,” said John W. Anderson, a broker-owner from Crystal, Minn., who spoke on NAR’s behalf before the House Financial Services Subcommittee on Housing and Community Opportunity. “A sound and dynamic real estate industry fosters families and communities, and sustains and stimulates the national economy.”

NAR provided a list of recommendations that would help prevent foreclosure rescue scams and protect consumers. The recommendations include enacting H.R. 1231, the Foreclosure Rescue Fraud Act of 2009, as introduced. The bill would create appropriate minimum standards for disclosure and terms of service for individuals or firms offering their services as foreclosure consultants to distressed homeowners.

“There has been a significant rise in the number of foreclosure rescue scammers making all kinds of claims to defraud already devastated families,” said Anderson. “We all have an interest and a stake in making this stop.”

NAR asked Congress to direct lenders and servicers to be more aggressive in helping distressed homeowners with loan modifications, ensure foreclosure prevention options are widely advertised, shorten the closing process for short sales, and establish methods for the private and public sectors to actively educate home buyers about foreclosure alternatives and today’s safer more affordable mortgage products. Congress should also pass balanced mortgage reform that safeguards consumers and assures access to mortgages at a reasonable cost.

“Realtors® across the nation believe that anti-predatory lending reforms are required to restore consumer confidence in the housing industry and avoid another housing crisis in the future,” Anderson said.

“Historically low mortgage interest rates and a significant tax credit for first-time home buyers have enticed some consumers back into the housing market. However, we believe that wholesale reform of the mortgage lending sector will give consumers the protections they need and will remove the last impediment to a housing recovery,” said Anderson.

Ultimately my point is, we are all in this together let's act as the professionals we were trained to be.

-Christopher Rockey

For Once I Agree With Something I Read

2009-04-28T08:18:00.000-07:00

I have the chance to pay attention to the housing market's across California. I
obviously see other market s as well in my travels. I can tell you this specifically
across California, Nor Cal or So Cal, the homes that are correctly priced are selling. Even from an investment point of view, if we do loose a little more value, the probability to get interest rates this low next year are not likely.

Distressed properties in Phoenix, Ft. Myers/Naples, Fla., Las Vegas, Southern California, and Sacramento, Calif., spent 20% fewer days on the market in the first quarter compared with the first quarter of 2008, according to a recent report from ZipRealty. Distressed properties include foreclosures and short sales.
"Banks have sped up the process for getting foreclosed homes on the market, and continue to lower prices to sell them," said Leslie Tyler, vice president of ZipRealty, in a news release. "The drop in days on market versus last year highlights that distressed properties in these hard hit markets are starting to move, which is a hopeful sign."
The 25 U.S. cities most searched on ZipRealty.com were in the Sunbelt, including five in California, eight in Arizona, one in Texas, four in Las Vegas, six in Florida and one in Georgia, according to the news release.
Areas that were able to fetch the highest sales-to-list price ratios during the first quarter included Hesperia Calif, (ZIP code 92344), where buyers paid, on average, more than 15% higher than the listing price. Neighborhoods with the lowest sales-to-list price ratios included Fort Lauderdale, Fla., (ZIP code 33304), where homes are going for 30% or more below asking price. View the news release.
Read more real-estate news in this week's pages, including the best places to live in 2009. Plus, read why it's looking even more attractive to buy a home today.
It's looking especially attractive if you're a first-time buyer or investor.

I leave for Las Vegas tonight, I will keep you posted on the local market in Greater Las Vegas.

-Christopher Rockey

What Does TARP Stand for Again?

2009-04-25T15:48:00.000-07:00

To Assist and Repair Profits.

Thought you might like this:

Herb Allison, who has been chief executive of Fannie Mae since it was seized by the government last September, has been tapped to oversee the $700 billion financial rescue fund conceived to restore rattled markets, the White House said on Friday.

Allison must be confirmed by the Senate before he can succeed Neel Kashkari and become Treasury assistant secretary for financial stability. In that role, Allison will be charged with overseeing several federal programs meant to improve the availability of credit, aid major automakers and boost the housing market.

Allison was named CEO of mortgage finance company Fannie Mae (FNM, Fortune 500) in September as the housing market soured and pushed the company and its sibling agency, Freddie Mac (FRE, Fortune 500), to the brink of collapse.

He had spent more than 25 years with Merrill Lynch before becoming chairman and chief executive officer of pension fund giant TIAA-CREF.

After six years as the head of TIAA-CREF, Allison retired in 2008 and was asked by former Treasury Secretary Henry Paulson to become conservator of Fannie Mae, the nation's largest source of housing finance.

In early April, Allison defended Fannie Mae's bonus payments to several thousand employees as lawmakers on Capitol Hill were scrutinizing payments made to executives at failed insurance giant American International Group Inc; both companies received billions of dollars in government bailout funds.

Allison has told Fannie Mae colleagues that his long experience and personal wealth have given him valuable independence when it comes to managing the nation's largest source of mortgage finance.

High Yield REIT's Come With Warning

2009-04-08T15:38:00.000-07:00

I was just about to announce to the world the new securitization platform that I have been able to create through Joint Venture. Commercial Property can be a risky bet in this economy, businesses closing doors and unable to pay rents are sticking the landlords with payments. Myself an my partner have identified four property's in California that have strong tenant balance sheets, and a lease for a minimum of another 10 years. We are able to offer a twenty percent annual return on funds with a one year commitment. I am proud to have been part of the forming of this JV, I am excited to bring the offer to my investors on a national level... Then I read this:

Many investors looking for safe havens in a rough market are latching onto double-digit dividend yields offered by real estate investment trusts.

"Equity REITs absolutely are a place for an investor to get a very meaningful spread versus treasurys," says Ritson Ferguson, chief investment officer at ING Clarion Real Estate Securities, an investment management firm.

Typically, investors seek out REITS for their stable, predictable cash flows and above-average dividend yields. Under REIT rules, companies avoid paying most corporate taxes as long as they distribute at least 90% of their taxable income to shareholders as dividends. And with the past year's market selloff, those dividends, which are typically paid quarterly, have become even more attractive.

0:00 /3:29Has the market hit bottom?
Equity REITs (which own brick-and-mortar properties) currently offer average dividend yields of 7.7%, while mortgage REITs (which hold mortgage securities on properties) yield an average of 15.5%, according to the National Association of Real Estate Investment Trusts. That far outpaces the S&P 500 index (SPX), where stocks currently average a dividend yield of about 3%.

Some individual REITs offer far loftier yields: Sunstone Hotel Investors Inc., CBL & Associates Properties Inc., Macerich Co., Hersha Hospitality Trust, and Apartment Investment & Management Co., all exceed 30%, while the yields at several mortgage REITs - Newscastle Investment Corp, Arbor Realty Trust, and RAIT Financial Trust - top the 100% mark.

But industry experts caution investors to beware of REITs offering the frothiest yields. "A dividend that high indicates ... the market doesn't believe that dividend is sustainable," says Steven Marks, a managing director at Fitch Ratings.

"Yields in the 20s and 30s (and higher) often reflect a view by the market that this dividend is likely to be cut," Ferguson concurs. When investors get jittery about a REIT's ability to cover its dividend, they tend to sell shares, which causes the yields to jump.

About 40 REITs have already cut their dividends in the past six months, notes Tom Bohjalian, senior vice president and portfolio manager at Cohen & Steers Inc. Some have suspended their dividends, while others have either trimmed them or opted to pay a portion of them in stock. He says investors looking at REITs with yields north of 15% need to "do a deep dive into the balance sheet" to assess if a company will need to trim or scrap its dividend to meet debt obligations.

Indeed, industry analysts say debt is the biggest threat facing REITs and their dividends in today's seized-up credit markets, and it must be carefully considered before buying a stock.

Two blue chip names show what can happen when debt problems can lead to dividend cuts and then panic. Last year, mall-owner General Growth Properties Inc. (GGP) and industrial warehouse giant ProLogis (PLD, Fortune 500) were trying to dig themselves out from under a mountain of debt accumulated during the real estate boom of the past five years. Like just about every other business, REITs have had a tough time finding lenders who are willing to refinance their debt in today's frozen credit markets.

Stunned investors watched General Growth suspend its dividend, replace its management team, and sell off some of its crown jewel properties to meet debt calls and stave off bankruptcy. Its stock lost more than 98% of its value in the last year, leading to its ouster from the S&P 500 index.

Similarly, ProLogis slashed its dividend by 52% to shore up cash to cover debt maturities, and 85% of its share value disappeared. General Growth's dividend yield was 37%, and Prologis' yield was 46% when they changed their dividend policies.

Spooked investors responded by dumping REITs in droves: The group's total returns, which include dividends, fell 37% in 2008 and are off another 20% so far in 2009, according to NAREIT. But as share prices have fallen, dividend yields have risen - even for companies that face little debt risk, and this is where cherry-picking becomes key.

Industry analysts caution investors to be wary of equity REITs with debt levels that exceed 70% of total market cap and - more importantly - those with a significant amount of debt rolling over in the next two years.

"A company needs to have dealt with or presented a credible plan for dealing with maturities in 2009 and 2010 to get out of the penalty box," says Ferguson.

Among the equity REITs with leverage exceeding 70% and who have at least 39% of their debt expiring in 2009 and 2010 are General Growth, CBL & Associates Properties Inc., Ramco-Gershenson Properties Trust, Developers Diversified Realty Corp., U-Store-It Trust, and Strategic Hotels & Resorts Inc., according to SNL Financial LC.

"When you get to those levels, you have to question the company's ability to continue to fund that (dividend)," says Bohjalian, although he does emphasize that dividend yield isn't the only factor to consider when looking at a company's overall story and growth outlook.

0:00 /4:50First inning of recovery?
Healthcare and apartment REITS offer the safest bets, with average dividend yields of 8.6% and 9.8% respectively, says Richard Anderson, a senior analyst at BMO Capital Markets.

Healthcare REITs have been largely unscathed in the economic downturn as demand for nursing homes and doctors continues in good economic times and bad, Anderson notes. As a result, most have the cash flow to cover their debt maturities and pay their dividends.

In the apartment sector, REITs are reaping the benefits of the battered housing market as foreclosed homeowners turn to rental units to live while fewer renters are venturing into homeownership until they're certain the market has bottomed. Apartment REITs and certain healthcare REITs also have access to cheap debt from mortgage giants Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500), says Anderson.

"If you've got access to Fannie and Freddie, and you're an apartment company or a healthcare company, you're in pretty solid shape," says Bohjalian

Well how about if your a mid level Joint Venture that has always offered the highest yield to investors, with a capitalization maximization vision? WITH TESTIMONIALS

-Christopher Rockey

When I Grow Up I Wanna Be A CEO

2009-04-07T10:55:00.000-07:00

This is that 'Good ol Boys Club' I have been talking about that I am not a part of.
The nation's CEOs see their company's sales, spending and employment falling over the next six months, and project an overall decline for the economy this year, according to a survey released Tuesday.
The Business Roundtable, an association of CEOs, said 67% of its members expect sales to decline, 66% project a drop in capital spending and 71% see a decrease in employment over the next half-year.
Overall, the group said CEOs expect a 1.9% decline in 2009 gross domestic product (GDP), compared with a projection of no change in GDP three months earlier. The government said last month that GDP declined at a 6.3% annual rate in the fourth quarter of 2008.
The Business Roundtable's CEO Economic Outlook Index fell to negative 5 from a positive reading of 16 in the previous quarter. The index ranges from 150 to negative 50, with a reading below positive 50 signaling economic contraction.
The group said the index's decline was less dramatic than the plunge from 78 in the third quarter of last year.
Business Roundtable chairman Harold McGraw III, the head of publisher McGraw-Hill Cos., saw some signs of promise in the stimulus being made by the U.S. and other governments.
"Improving consumer confidence and demand, both in the United States and abroad, is the key to jump-starting the economy," said McGraw, in a written statement.
While "recently implemented administration policies will take time to have an impact, they already have begun to restore confidence in our markets, which is a critical first step," he added.
The Business Roundtable consists of executives whose companies represent 10 million workers and more than $5 trillion in yearly revenue.
So here's the deal, if our adjustable rate mortgages are not the only issue causing foreclosures in the US, but it's actually the economy itself, then people now no longer even qualify for 'Loan Modifications.'
That just leaves a Short Sale, if you do not have a full understanding of the lenders language, I would suggest getting yourself educated ASAP.

Back to God's Country

2009-04-03T16:58:00.000-07:00

I think I made my position perfectly clear on my last visit to the 'High Desert.' The surrounding area was absolutely beautiful. The drive from Ontario was full of
green scenery. The overall atmosphere of the local people in Victorville was intellectual. Not much to report, better than average room, dinner the night I landed, better than average audience. The feedback has been excellent thank you Victorville very much for your hospitality.

On another note I took some notes today I thought you might find interesting:
In a wide-ranging TV interview on CNBC, CEO Ken Lewis -- who spearheaded Bank of America's controversial acquisitions of Countrywide Financial and Merrill Lynch at the height of the recent credit crisis -- also said that the Charlotte, N.C.-based company (BAC:bank of America corporation)says they remain willing to work with customers to avoid mortgage foreclosure and that tens of billions of dollars of the bank's capital remains tied up in reserves for losses on consumer loans such as mortgages and credit cards. Although they rarely seem to give 'Full Settlement Language' if ever?
Regarding the government's recent investment in the company under the Troubled Asset Relief Program stabilization plan, Lewis said that he regretted taking a larger piece of government money than the company needed, adding that he's "anxious" to return at least some of those funds to the government.
Lewis said that the company is continuing to make "every good loan we can make," despite a continuing rise in consumer loan delinquencies.
He said that the next six months will be tough but that the current economic downturn is beginning to feel to him more like a typical recession than a freefall.
'Mixed signals'
Asked about the current state of the economy, Lewis said he sees mixed indications with some housing sales data coming in better than expected, and some auto sales not quite as bad as forecasted.
"When you see mixed signals, I think it signals that you're getting close to the bottom," the chief executive told CNBC.
He said he shares the consensus view that can have things moderate in terms of the declines and that the economy hits bottom in the second half 2009, with a recovery in the first part of next year.
"You can't throw as many things as we're throwing at it and not break the back of this thing," Lewis said.
He said the recent wave of mortgage refinancing will reduce monthly payments for many borrowers and help kick-start the economy.
Lewis said Bank of America is working on modifying home loans for strapped borrowers.
"Nobody wants to foreclose," he said. "It's bad for everybody, and it's particularly devastating for communities."
TARP regrets
Lewis said he erred by taking the second round of TARP capital from the government when it was closing the controversial acquisition of Merrill Lynch.
B. of A. took another $20 billion after earlier accepting $25 billion.
"That was my mistake," he said. "We took more than we needed. I regret having taken that much. That's why I'm so anxious to pay at least some of it back."
Lewis explained he didn't take the second capital infusion solely because of Merrill Lynch, but also to protect the bank from the economy worsening more than it actually did. He said the government didn't force the company to complete the Merrill Lynch deal, and that it was "the right thing to do" for both B. of A. and the American financial system. Lewis lauded the Merrill acquisition, saying the brokers have more banking products to sell now.
He said the purchases of Merrill and mortgage giant Countrywide "will prove to be two of the best acquisitions we've ever made if you judge us over two or three years, rather than two or three months."
'Earnings power'
When asked about B. of A. shares still trading below $8, the CEO said the stock price reflects "fear of the unknown," as well as questions over the economy and further write-downs.
"This is going to be a tough year for all institutions," Lewis said.
Yet a year from now, "we'll be coming out of this, and you'll be able to see a lot of the earnings power of the financial institutions and the unemployment rate should at least be holding steady if not starting to improve slightly."
Lewis is also optimistic the bank will pass the so-called stress tests being conducted by the government.
"The bad news is it creates a lot of uncertainty," he remarked. "The good news is we will get through it now and hopefully get that uncertainty behind us and get some closure."
He said he doesn't expect the government will ask B. of A. to raise additional capital.
Finally, he acknowledged the compensation system in the banking business is changing during the financial crisis. He expects salaries will represent a greater percentage of overall compensation relative to incentives, which can encourage too much risk-taking.

May I have my 100 million dollars now please. I deserve some kind of bonus right? Everyone else seems to get one?

-Christopher Rockey

Thank You Temecula

2009-04-03T16:39:00.000-07:00

I had such a great time in Temecula. Everyone participated in our seminar and
we all got through the six hours of talking together. Thank you to Chicago Title for
having the foresight to see a need for education in the market place. Thank you PRMG
Lending for sponsoring the event. I can tell you I had no interest in leaving to catch a flight to go to Sacramento.

By the way, whoever that guy was that said the Southwest Airlines flight to Northern California a few hours before mine had crashed, your evil plan worked. Thank you
for scaring me to death. I'm glad it wasn't someone in the audience saying such harsh cruelties.

If I could ask one favor it would be to just let me come back.

-Christopher Rockey

Tis The Season

2009-03-20T15:14:00.000-07:00

I actually had an agent this week tell me that the recession is over and that
home prices are going up nationally in every neighborhood as we speak. I am all
for an optimistic outtake in life. I do not ever want to represent myself as an ambassador of doom as I have been nicknamed in many markets. But lets get real, the
market traditionally always picks up a little in spring and stays that way just until school starts.
The following information is not bad news, not even false hopes, just real numbers.
Lower interest rates on fixed- and adjustable-rate mortgages attracted homeowners as well as people seeking to buy homes.
Application volume for the week ended March 13 was up an unadjusted 31.2% from the same week in 2008, the Washington-based MBA said. Its weekly survey covers about half of all U.S. retail residential mortgage applications.
On a week-to-week basis, applications for mortgages to buy homes rose a seasonally adjusted 1.5%, while filings to refinance existing home loans increased 29.6%.
I wanted to thank everyone who attended the full day Short Sale seminar in Bakersfield this last Wednesday. I met some extremely intelligent agents who had an excellent understanding of the local market and economy. Our room was completely packed in the morning class and I thoroughly appreciated the hospitality that not only the local Association of Realtors showed us, but, the entire Real Estate community.

Market Volatility and up Turn Shows Little Promise

2009-03-13T14:53:00.000-07:00

Mortgage applications jump up 11% according to the MBA. U.S. mortgage applications rose for the first time in three weeks as near record-low interest rates spurred demand for home refinancing and purchase loans, data from an industry group showed on Wednesday.

Freddie Mac said Thursday the 30-year fixed-rate mortgage average fell from the previous week to 5.03% with an average 0.7 point for the week ending March 12. In the previous period, the average was 5.15%, and the year-ago average was 6.13%.

You would think the market has been stimulated but then this just in...

New home sales fell 10.2% in January to the slowest pace since records began in January 1963 while pending existing home sales slowed by 7.7%, the weakest since the series began in January 2001.

Our new President has asked consumers to restore faith in our economy. Many people
are trying to refinance as stated in my first paragraph, but, that doesn't mean they get the loan. Consumer confidence is down for a reason.

-Christopher Rockey

Temecula California Move Over Napa

2009-03-12T18:47:00.000-07:00

Once again I go to strange new worlds and civilizations with no warning whatsoever as to what I may expect. The ATF established the "Temecula" viticultural area in the Federal Register on October 23, 1984. The TTB renamed the same viticultural area "Temecula Valley" effective June 18, 2004. The Federal Register lists the official acreage for the Temecula Valley AVA at 33,000 acres. Approximately 1,300 acres are currently planted in commercial vineyards. Within the appellation there are 5,000 acres located in a "protected" area referred to as the Citrus/Vineyard Zone. This area is generally located in and around the Rancho California Road area within the County of Riverside. County guidelines strictly enforce number of acres needed to build a winery, lodging and other limited housing and commercial ventures.

The scenery was beautiful and serene. The entire area looked like a Napa Valley
Resort except newer. Winiries dot the hill sides and I plan on staying the entire weekend when I go back on March 26th.

-Christopher Rockey

Is Madoff Alone How You Can Protect Yourself

2009-03-10T22:42:00.000-07:00

Investment strategies differ depending on a level of exposure. Madoff simply
exposed VANITY. Everyone wanted to be a part of the Bernard Madoff Elite. Let me make something perfectly clear. Knowing that I teach and preach Short Sale's in
Real Estate I also teach and preach 'Loan Modifications' what does that have to do with our beloved Bernie you ask? Well, simple, when seeking a 'Loan Modification' you
make sure you are dealing with a DRE approved company with a 100% money back guarantee. You can now for the first time ever ask that from your Hedge Fund manager. Most people think they need to expose themselves to risk of loss in a Hedge Fund. Not true at all, Northern California has recently insured a private fund guaranteed against loss of principal. The concept is behind a Fund of Funds. Generally a FOF will invest in other performing Hedges. The funds of hedge funds industry shrank by almost 30 percent last year, with most of the losses coming in the latter part of the year as volatile markets, poor returns and the impact of the Bernie Madoff scandal took their toll.

More than $1,000bn in assets was held in funds of hedge funds in June last year but, by the end of the year, about $300bn had flowed out of the industry.

In a securitized Hedge you can verify your principal balance twenty four hours a day seven days a week. You never sign your money over to anyone and you WILL make up to
30% annual return. Better than even Bernie gave his investors.

You don't even need to be vein to join the FOF. Serious investors or managers only please.

-Christopher Rockey

Freddie Mac Helping Homeowners Stay That Way

2009-03-10T11:09:00.000-07:00

Freddie Mac said late Wednesday that it will suspend foreclosure sales on mortgages eligible for the Home Affordable Modification Program announced as part of the Obama administration's Making Home Affordable plan. Freddie Mac will ask its servicers not to complete a foreclosure sale on a mortgage eligible for the Home Affordable Modification program unless they made an effort to contact the borrower and the borrower either did not respond or lacked the capacity to participate in the new program or any other Freddie Mac workout program. Freddie Mac's previously announced suspension of foreclosure sales will expire on March 6. Now this foreclosure suspension is indefinite.
Is it possible they are just putting off the inevitable?

-Christopher Rockey

The High Desert

2009-03-09T18:47:00.000-07:00

Traveling all over I have been warned of some places i may not find savory to the pallet of success. This warning did not come as I went into Victorville California this last week. The drive through the beautiful mountain range reminded me of a quote by Eric Hoffer, Where there is the necessary technical skill to move mountains, there is no need for the faith that moves mountains.
With that said I look forward to going back on the first day of April 2009 to such a place of beauty to try to move mountains of Short Sales.

In the picture above from left to right are my guests Bobby Terango with Chicago Title, James Cameron AVP Countrywide Home Loans and Mike Arias also with Chicago Title. Thank you for getting a great crowd together. I am not going to tell you what I am laughing at. Let's just say the photographer really knew how to make me blush.
I have no idea why I'm the only one laughing at Candice's comment.

-Christopher Rockey

A National Generality

2009-03-07T11:38:00.000-08:00

In National articles writers must not obviously give any tax or legal advice,
they must also be vague about foreclosure compliance as it pertains to
a distressed homeowner because foreclosure laws vary state to state. In California
the Short Sale vs. Foreclosure argument is no argument at all. You do a Short Sale every time NO MATTER WHAT! If you have a committed homeowner that rule applies in every state with few exceptions.

I thought you would be interested in this article. Please identify yourself and
what state you are from after reading it and I will survey your comments.

http://money.cnn.com/galleries/2009/real_estate/0903/gallery.walking_away/index.html

-Christopher Rockey

DO NOT MISS THIS EVENT

2009-03-05T13:50:00.000-08:00

If you are planning on getting out of Real Estate in the next year or two for god sakes get out now. You really don't think this is going to get any better any time soon do you?

NAR has asked Scott Thompson the founder of our company to do a national webinar event because our education is considered the best in the business.

If you plan on doing Real Estate in the next two years please register now.

It's Free!!

http://www.realtor.org/rmodaily.nsf/pages/News2009022641

-Christopher Rockey

Not one in Ten after All

2009-03-05T09:02:00.000-08:00

It is a common belief that one in every ten mortgages are defaulting. There
are some places I travel to like Victorville California (where I am flying to today)
that have a much higher rate than one in ten. The new default rule seems to be closer to one in eight according to the Mortgage Brokers Association.

Mortgage delinquencies for U.S. homes in the fourth quarter of 2008 rose to a new record high, with one homeowner out of eight behind on one or more mortgage payments, according to a report from the Mortgage Bankers Association on Thursday.

The result is above the 6.99% rate reported in the third quarter, the previous record high.

The organization also said that foreclosure rates in the United States reached a record 3.3% in Q4, compared to a 2.97% rate in Q3 and a 2.04% rate in Q4 2007.

The report found that 5.06% of prime mortgages were considered delinquent, compared to 4.34% the prior quarter, and 21.88% of subprime mortgage holders were behind on payments, up from 20.03% previously.

I will keep you posted when the number dropr drom one in eight to one in???

-Christopher Rockey

The Common Goal

2009-03-04T17:59:00.000-08:00

In every market, in every state, on every trip, I teach if not preach, giving the homeowner options. Last Saturday Scott Thompson the founder of my company (www.scottcthompson.com)and Tom Bolinger (Who is our President of operations and a longtime Fidelity National Financial Executive)and myself had the opportunity to roll up our sleeves and actually do something none of us has done in years. We had the opportunity to go to a DRE hosted consumer direct seminar. There were over 3000 attendees mostly from the Latino community who were all there to try to keep there homes. Huge lenders attended like Washington Mutual, Countrywide, EMC, Litton, Bank of America, Indy Mac etc. these lenders certainly whom do not often seem to have the day to day commitment for market stabilization were all there this last Saturday February 28Th. We saw people who were overcome by emotion because they had been trying for months to have their mortgages modified. People who have been told several times were told yes on this day. Jeff davi was there who is our DRE Commissioner with his two twin sons Jeffrey and Anthony. I have had times where I am on the road for weeks and weeks at a time. I often get bored, lonely and almost a transient feeling. This day makes it all worth it. I asked several homeowners to write me their stories, I will not be posting those as to not exploit the feeling of emotion we all experienced.

-Christopher Rockey

The Desert's Hidden Treasure Chest

2009-03-04T17:50:00.000-08:00

I refer to Scottsdale as the Desert's secret treasure although I think I was just
the last person to find out about it. There are so many things to do in Arizona,
it's the only place where I have been able to enjoy a beautiful sunny dinner on the patio of a trendy restaurant after snowboarding in great snow conditions that same day. If I ever had the opportunity to move to AZ for work I would take it in a heart beat.

I want to thank all of our guest speakers includin manny caballero from Loss Mitigation Solutions. Paul Scheper out of Harvard University and the Vice President of Trust 1 mortgage. Mark Winsor ESQ for teaching all who attended how lenders are suing homeowners and how homeowners need to protect themselves. Deborah Leone from Lions Gate Financial Network who is always in huge demand. Several of you flew from all over to come speak. Your message was heard and we all thank you very much.

-Christopher Rockey

The Perfect Trip

2009-03-04T17:41:00.000-08:00

I love the one day trip in and out, no flight delays, no lost luggage. It's rare
but Ontario airport Southwest airlines and San Bernardino seem to have it figured out.

Thank you to the audience whom was highly participating, Suzy, David, Raquel, Marilyn, Chanda. It was an honor to have you all there. Even Mark our friendly
loan officer made a commitment to be there.

Thank you to everyone who made this day so successful. I look forward to coming back
tomnorrow isn't soon enough.

-Christopher Rockey

I Know How far Behind I Am

2009-03-03T17:24:00.001-08:00

Between Southern California, Northern California and Phoenix I know I have some catching up to do. Even I get busy please forgive me.

Busy doing what? Working of course. I will enlighten you in the upcoming articles
for now look at the above picture and Google the name Jeff Davi.

That's me with Jeff. I have been exhausted busy and when I get a chance to catch up and write about it I will fill you in on everything.

Now Where's Freddie Going?

2009-03-03T08:56:00.000-08:00

Do you have any idea what kind of hell I would have to be in to quit after six months in this economy. I don't care if my job was the dirtiest of 'Dirty Jobs' on
the Discovery Channel you couldnt get me to quit a job in six months.

The CEO of embattled mortgage titan Freddie Mac (FRE), who was installed last year to head the company after the federal government took it over, announced Monday that he is resigning.
David Moffett will leave his position by March 13. He had indicated that he wants to return to the financial services industry. Good luck because everyone is hiring.

His announcement comes as a critical juncture, leaving the financially battered company — a crucial segment of the beleaguered housing market — with no foreseeable leader.

It also comes as Freddie Mac seeks billions of dollars more in federal financial help and is being hailed by the Obama administration as a vehicle for restoring confidence to the housing market.

Freddie officials said Monday that an interim successor will be named before Moffett departs.

Oh Oh I want that job! Pick me.

-Christopher Rockey

Monrovia was Great!! I love LA

2009-02-19T19:45:00.000-08:00

In the two pictures we have the highly participating audience in one picture
and in the second picture are my two guests (Center) Chris Shevlin from Chicago Title Company and on the far right is Paul Scheper of Harvard university.

I arrived in Monrovia the evening before (Monday the 16th) and enjoyed beautiful
Colorado Blvd. in Downtown Pasadena. I never realized how nice Pasadena is. I
would live in that area in a heartbeat.

A great crowd, Jery asked several great questions. Sarah 'Sally' was also very intelligent and had a lot to add.

Thank you everyone including the local YMCA that provided the room. They
are a strong local charity and we appreciate the opportunity to be a part
of the solution with them.

-Christopher Rockey

Really Santa Claus? A Whole Three Weeks? Golly!

2009-02-15T20:49:00.000-08:00

I have been saying 'The Change in the Political Climate will Help the Short Sale Process' Now we are seeing evidence of that. Now you know why REO agents are finally starting to come to my seminars. Those same REO agents have seen a dramatic reduction in their inventory and that shall continue.
Citigroup announced it will be halting foreclosures starting Feb. 12. The bank said it will uphold this commitment until U.S. President Barack Obama has finalized the details of his plan to modify mortgage loans to benefit U.S. residents at risk of losing their homes.

Minutes later, JPMorgan announced it will also put a moratorium on foreclosures for a three-week period, or until March 6. Morgan Stanley later made a similar statement.

Bank of America CEO Ken Lewis already announced a similar pledge earlier this week in a hearing before the House Financial Services Committee.

On Wednesday, CEOs from Bank of America, Goldman Sachs, Citigroup, Morgan Stanley, Wells Fargo, JPMorgan Chase, Bank of New York Mellon and State Street all faced harsh criticism from lawmakers for allowing the financial system to come crashing down in 2008.

All of the executives said they will do what they can to boost lending and stem foreclosures to aid the U.S. economic recovery.

I will let you in on a little secret. You put me in the same room as these guys and they get the ruler to their knuckles. There are three options in a distressed property situation and each of the named above MUST start to respect the market on these options.
#1 Loan Modification
#2 Short Refinance (TIME Magazines top 50 best inventions of 2008)
#3 Short Sale

I am making a living on teaching and training Real Estate professionals how to successfully complete the Short Sale process. It's no secret I manage a securitized Hedge Fund as well but I enjoy my full time job. If Scott Thompson the founder of my company gets that appointment in Washington DC that Fidelity National Financial is trying to set up, it will be a good day for Real Estate agents. I promise to let you in on every little detail these lenders give us. Starting with Ken Lewis and how he has no right asking the government for money when he is just coming after the Recourse debt he maintains in Short Sale.

I'm Moving to Brentwood

2009-02-14T16:11:00.000-08:00

People ask me all the time why I love my job. I just smile and think about days like Brentwood this last Wednesday February 12Th. You know that I was one of only two males in the room. The funny thing is that in the above photo Paulette wasn't looking at the camera and Jerry who took the picture is her husband. He was the other male in the room. Sorry Jerry but you're married. I received a very nice thank you letter from Kathy N. I will tell everyone the same thing. This seminar was so much fun. We had great questions, we had great participation and the guest speakers were awesome as well!

Now you see why I say I'm moving to Brentwood. Well I would like to anyway.

-Christopher Rockey