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
Thursday, July 9, 2009
Jingle Mail, Jingle Mail, Jingle All the Way to the Bank!
The national economist for Fannie Mae was the key note speaker for a Las Vegas convention last year. The speaker was expected to finish with some really positive notes which he failed to relay. In fact he was one of the first Fannie Mae officials to say "This is Going to get Really Bad." He had made mention as interest rates rise, loan products go away home buying frenzy will be closer to a normal market. Then he confided in the audience of three thousand attendees and said with recession and economic issue on a national basis one of there biggest nightmares would potentially happen. That nightmare is when it becomes a badge of courage to let your home go. Rather than mailing a mortgage payment to the lender, the homeowners mails the lender the keys to the home. This nightmare is known as 'Jingle Mail' it happened before, it will happen again.
New research found that more than 25% of mortgage loan defaults are strategic -- that is, a quarter of homeowners who default on their mortgages are walking away from their homes even if they can afford to make their payments.
Homeowners are especially motivated to walk away when home values have fallen by more than 15%, according to a new paper, "Moral and Social Restraints to Strategic Default on Mortgages," by researchers at the Kellogg School of Management at Northwestern University, the University of Chicago Booth School of Business and the European University Institute. Data were collected within the last six months as part of the Chicago Booth/Kellogg School Financial Trust Index, a quarterly indicator of the amount of trust Americans have in private institutions in which they can invest their money.
"Housing policy under the current administration has focused on reducing households' cash flow problems in response to the housing crisis, but no one has addressed the negative equity issue as part of public policy regarding housing," said Paola Sapienza, a co-author of the paper, in a news release. "We're in a completely different economic environment today, where for the first time since the Great Depression millions of Americans have mortgage loans that exceed the value of their home."
"As defaults become more common, the social stigma attached with defaulting will likely be reduced, especially if there continues to be few repercussions for people who walk away from their loans," Sapienza said. "This has an adverse effect on homeowners who do pay their mortgages, and the after-effects of more defaults and more price collapse could be economic catastrophe."
The report found that homeowners often won't default as long as negative equity doesn't exceed 10% of the value of the home. However, 17% of households would default -- even if they could afford their mortgage payments -- when their equity shortfall reaches 50% of the value of their home, according to the paper. In numerous housing markets, home prices have suffered declines of more than 30%.
Aside from their equity situation, researchers said that the local housing market also plays a role in whether a homeowner underwater on a mortgage feels comfortable walking away. And people are more likely to strategically default if they know someone who took the same sort of action.
"Our research showed there is a 'multiplication effect,' where the social pressure not to default is weakened when homeowners live in areas of high frequency of foreclosures or know others who defaulted strategically," said Luigi Zingales, a co-author of the paper, in the release. "In fact, the predisposition to default increases with the number of foreclosures in the same ZIP code." That's a common factor when the Creation of the ever growing popularity of Jingle Mail comes into the housing equation.
-Christopher Rockey
New research found that more than 25% of mortgage loan defaults are strategic -- that is, a quarter of homeowners who default on their mortgages are walking away from their homes even if they can afford to make their payments.
Homeowners are especially motivated to walk away when home values have fallen by more than 15%, according to a new paper, "Moral and Social Restraints to Strategic Default on Mortgages," by researchers at the Kellogg School of Management at Northwestern University, the University of Chicago Booth School of Business and the European University Institute. Data were collected within the last six months as part of the Chicago Booth/Kellogg School Financial Trust Index, a quarterly indicator of the amount of trust Americans have in private institutions in which they can invest their money.
"Housing policy under the current administration has focused on reducing households' cash flow problems in response to the housing crisis, but no one has addressed the negative equity issue as part of public policy regarding housing," said Paola Sapienza, a co-author of the paper, in a news release. "We're in a completely different economic environment today, where for the first time since the Great Depression millions of Americans have mortgage loans that exceed the value of their home."
"As defaults become more common, the social stigma attached with defaulting will likely be reduced, especially if there continues to be few repercussions for people who walk away from their loans," Sapienza said. "This has an adverse effect on homeowners who do pay their mortgages, and the after-effects of more defaults and more price collapse could be economic catastrophe."
The report found that homeowners often won't default as long as negative equity doesn't exceed 10% of the value of the home. However, 17% of households would default -- even if they could afford their mortgage payments -- when their equity shortfall reaches 50% of the value of their home, according to the paper. In numerous housing markets, home prices have suffered declines of more than 30%.
Aside from their equity situation, researchers said that the local housing market also plays a role in whether a homeowner underwater on a mortgage feels comfortable walking away. And people are more likely to strategically default if they know someone who took the same sort of action.
"Our research showed there is a 'multiplication effect,' where the social pressure not to default is weakened when homeowners live in areas of high frequency of foreclosures or know others who defaulted strategically," said Luigi Zingales, a co-author of the paper, in the release. "In fact, the predisposition to default increases with the number of foreclosures in the same ZIP code." That's a common factor when the Creation of the ever growing popularity of Jingle Mail comes into the housing equation.
-Christopher Rockey
Wednesday, July 8, 2009
No You Cannot / Yes I Can... And Will
The argument is simple, should we do high loan to value refinances? The question poses many interesting views and my own proclivity's lead me to believe I'm a supporter. The difference between the 'Loan Product Problem' that was caused by furious greed and the high 125% loan to value refinance is simple. The old loans were originated under NINA terms (No Income No Assets) the new FHA guidelines are strict in a time while we are in a credit crunch. The FHA 125% isn't the worse idea in the world. Someone that purchased in the peek of the market and only owes 125% of the value is a good borrower that probably put some money down at one point. Or in the words of our new President "These are People that Tried to do the Right Thing." FHA guidelines are tough. You need to qualify for the loan, you have to provide evidence on Income, Credit and cash. It's a strong 30 year fix that won't adjust and I support it if the borrower qualifies for it!
Home Affordable Refinance eligibility expanded to 125 percent LTV
Fannie Mae last week announced the Home Affordable Refinance Program (HARP) will be expanded to permit refinancing of existing Fannie Mae and Freddie Mac loans with current loan-to-value ratios (LTVs) up to 125 percent, an increase from the current LTV limit of 105 percent. Fannie Mae characterised the expansion as a move to help lenders serve more borrowers with a demonstrated track record of paying their mortgages, but who have been unable to refinance due to significant property value declines. Loans with LTVs above 105 percent will be eligible for a same-servicer refinance under the Refi Plus manual underwriting option, and the new loan must be a fully amortizing fixed-rate mortgage with a term greater than 15 years, up to 30 years. Fannie Mae is evaluating potential updates to Desktop Underwriter to allow LTV ratios above 105 percent.
In conjunction with the LTV expansion, Fannie Mae also announced it is offering a 0.50 percentage point reduction in the loan-level price adjustment (LLPA) charged for manually underwritten Refi Plus loans with LTVs above 105 percent and loan terms greater than 15 years, up to 25 years. Refi Plus mortgage loans with LTV ratios that exceed 105 percent are eligible for whole loan purchase or delivery into MBS on or after September 1, 2009. Please refer to Announcement 09-23 for information about a new MBS prefix and other operational and delivery details for loans with LTVs above 105 percent.
Freddie Mac announced a similar 125 percent LTV expansion July 1; details are available on the webinar below.
More info
Free Think FHA webinars July 14, July
Don’t miss your chance to learn all about FHA with free Think FHA webinars on July 14 and July 28 from 1 p.m. to 2 p.m. The webinars will cover various topics including the benefits of FHA loans and Energy Efficient Mortgages to Hope for Homeowners. Space is limited, so register early and reserve your spot. For more information, visit http://www.car.org/education/FHA/.
Tell a friend!
-Christopher Rockey
Home Affordable Refinance eligibility expanded to 125 percent LTV
Fannie Mae last week announced the Home Affordable Refinance Program (HARP) will be expanded to permit refinancing of existing Fannie Mae and Freddie Mac loans with current loan-to-value ratios (LTVs) up to 125 percent, an increase from the current LTV limit of 105 percent. Fannie Mae characterised the expansion as a move to help lenders serve more borrowers with a demonstrated track record of paying their mortgages, but who have been unable to refinance due to significant property value declines. Loans with LTVs above 105 percent will be eligible for a same-servicer refinance under the Refi Plus manual underwriting option, and the new loan must be a fully amortizing fixed-rate mortgage with a term greater than 15 years, up to 30 years. Fannie Mae is evaluating potential updates to Desktop Underwriter to allow LTV ratios above 105 percent.
In conjunction with the LTV expansion, Fannie Mae also announced it is offering a 0.50 percentage point reduction in the loan-level price adjustment (LLPA) charged for manually underwritten Refi Plus loans with LTVs above 105 percent and loan terms greater than 15 years, up to 25 years. Refi Plus mortgage loans with LTV ratios that exceed 105 percent are eligible for whole loan purchase or delivery into MBS on or after September 1, 2009. Please refer to Announcement 09-23 for information about a new MBS prefix and other operational and delivery details for loans with LTVs above 105 percent.
Freddie Mac announced a similar 125 percent LTV expansion July 1; details are available on the webinar below.
More info
Free Think FHA webinars July 14, July
Don’t miss your chance to learn all about FHA with free Think FHA webinars on July 14 and July 28 from 1 p.m. to 2 p.m. The webinars will cover various topics including the benefits of FHA loans and Energy Efficient Mortgages to Hope for Homeowners. Space is limited, so register early and reserve your spot. For more information, visit http://www.car.org/education/FHA/.
Tell a friend!
-Christopher Rockey
Subscribe to:
Posts (Atom)
Posts
