While doing loans in Sylmar and Van Nuys and California we attempt to educate where we can. Here are my thoughts regarding ongoing identity theft in Sylmar and Van Nuys.
Fraud in Sylmar, Van Nuys and California is increasing at an alarming rate and new ways to separate you from your money are being invented every day. Identity theft is big business. Millions of Americans have been the victim of some form of identity theft. You are the first line of defense in keeping your personal information secure. There are steps you can take to minimize the chances that your personal information will fall into the wrong hands:
Buy a shredder. They are inexpensive and shred items with your personal information. That includes charge receipts, bank statements, expired credit cards, credit offers, etc. Identify thieves have been known to comb through trash looking for just such information. We shred everything while doing loans in Sylmar, Van Nuys and California.
Do not carry your Social Security card, birth certificate or passport with you.
Don't give your credit card or bank account number over the phone, through the mail, or over the Internet unless you confirm you are dealing with an actual representative of a legitimate business.
Get the receipts from your credit card transactions and check your credit card statements for unfamiliar transactions.
Shield the keypad when entering your PIN.
With the expansion of the Internet, your personal information is more accessible than ever and the number of "phishing" scams sent out to consumers is continuing to increase. Phishing lures unsuspecting Internet users to a fraudulent website by using authentic-looking emails in an attempt to steal passwords, financial and/or personal information. Check to see that the business is legitimate and you can conduct transactions on a secure website. You can identify a secure website by the address. It should begin with the https; the s means the site is secure. Be extra careful about what you reveal about yourself when you are online. You never know who is watching. Identity thieves could be cruising these sites for clues to piece together just what they need to steal your identity. If identity theft should happen to you, do the following immediately:
Cancel all credit/debit/ATM cards.
File a police report in the jurisdiction in which your identification was stolen.
Place a fraud alert by calling the three credit reporting bureaus so that you will be contacted before any new credit is authorized. The three bureaus are; Equifax, (800) 797-7033 , Experian, (800) 583-4080 and TransUnion, (800) 916-8800 .
For further information regarding any type of fraud you can visit the Fraud Center website at www.fraud.org.
Keep your personal information private. Taking steps will help protect you and keep fraud and identity theft an unlikely possibility.
Friday, May 30, 2008
Wednesday, May 14, 2008
Will Republicans and Democrats ever be on the same page?
Last week the House passed legislation that aims to refinance troubled mortgages and increase demand among first-time homebuyers. The President has threatened a veto, and the position of the Senate is unclear. http://www.house.gov/apps/list/press/financialsvcs_dem/press050808.shtml But, regardless, at some point federal intervention still appears likely. The policy differences aren't as large as rhetoric implies, and enactment of some type of legislation could slightly help the decline in home prices by reducing the number of foreclosures and increasing demand among first-time homebuyers - at a cost to taxpayers.
There is no agreement on the bill yet as several Republicans view the plans as a bailout for lenders, speculators and irresponsible homeowners. The program involves giving struggling homeowners a new mortgage backed by the FHA. The Democrats believe that it would cost much less compared to the potential government exposure with the Fed's guarantee in the Bear Stearns case, and as mentioned above the president may veto it. On top of Congressional differences, lies the threat of a White House veto of the bill, asking the question, "Why should the taxpayer, through the program, provide a guarantee of principal if lenders agree to reduce the principal of a borrower's current mortgage?" This is a volunteer program by which a mortgage company would be required to write-down the value of a delinquent loan by 15% of the home's current appraised value for borrowers who are 60 days late on their mortgage payments. The bill specifically excludes investors and those that lied about their income on the loan application. The bill also proposes an overhaul of Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks as well as bringing the FHA into the 21st century.
Stay tuned as soon as I know more...you"ll know more!
There is no agreement on the bill yet as several Republicans view the plans as a bailout for lenders, speculators and irresponsible homeowners. The program involves giving struggling homeowners a new mortgage backed by the FHA. The Democrats believe that it would cost much less compared to the potential government exposure with the Fed's guarantee in the Bear Stearns case, and as mentioned above the president may veto it. On top of Congressional differences, lies the threat of a White House veto of the bill, asking the question, "Why should the taxpayer, through the program, provide a guarantee of principal if lenders agree to reduce the principal of a borrower's current mortgage?" This is a volunteer program by which a mortgage company would be required to write-down the value of a delinquent loan by 15% of the home's current appraised value for borrowers who are 60 days late on their mortgage payments. The bill specifically excludes investors and those that lied about their income on the loan application. The bill also proposes an overhaul of Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks as well as bringing the FHA into the 21st century.
Stay tuned as soon as I know more...you"ll know more!
Tuesday, February 12, 2008
Stimulus Package
Tomorrow President Bush is likely to sign into law the recently passed economic stimulus bill. It raises the limit on the size of mortgage that Fannie Mae and Freddie Mac may purchase and that the Federal Housing Administration (FHA) may insure. In both cases, the increases are temporary and apply only to loans originated by the end of 2008. If signed, Fannie and Freddie may purchase loans up to 125% of the median home price in an area, up to a national limit of $729,750. YAHOO!!!
FHA limits, and I assume VA, would see the same increase, and the floor on FHA limits would be raised so that larger FHA-insured loans would become available in low-cost areas. Goldman Sachs believes that area-specific loan limits for the GSEs and FHA should be issued by mid-March. The exact impact on pricing and rates is unknown, nor are the changes in underwriting guidelines and the impact of lost equity: in cities where the increased limits are likely to apply, the Case-Shiller index now stands below its late 2005 levels.
FHA limits, and I assume VA, would see the same increase, and the floor on FHA limits would be raised so that larger FHA-insured loans would become available in low-cost areas. Goldman Sachs believes that area-specific loan limits for the GSEs and FHA should be issued by mid-March. The exact impact on pricing and rates is unknown, nor are the changes in underwriting guidelines and the impact of lost equity: in cities where the increased limits are likely to apply, the Case-Shiller index now stands below its late 2005 levels.
Friday, December 07, 2007
Increase Fannie Mae Conforming Limits
Here is a copy of a form letter that you can use to help get the fannie mae limits increased here in California. We are a high cost state and now is the time to act.
The Honorable Brad Sherman
House Office Building
United States House of Representatives
Washington, DC 20515
Dear Representative Sherman:
As you know, the liquidity crisis in the mortgage industry is harming
clients and business throughout our state, as well as our economy in
general. Congress, however, has the power to make a rather simple change
that will relieve a large portion of this burden for thousands of people in
CA and throughout the United States.
The cap for government sponsored Conforming Fixed Interest Rate loans is
currently set at $417,000--which may adequately serve some parts of the US,
but is not high enough for many middle-class homes in our area.
Consequently, many people in CA are powerless to refinance adjustable rate
mortgages that are at risk of foreclosure or default, and others are unable
to purchase new homes for their families at all.
The problem is that the current limits are based on formulas that were
created based on demographics from 1980. Additionally, the limits apply
nationally except for Hawaii and Alaska, which were given High Priced State
status. To be both effective and fair, the limits for our state and others
with higher housing prices need to be brought in line with the higher loan
caps of states like Alaska and Hawaii, which both have a 50% increase to the
conforming limit. In 1992, the US Virgin Islands was successful in asking
congress to allow it to have the benefit of High Priced State status. In
2001, Guam did the same. Our state should be considered a High Priced State
as well. This would increase the current conforming limit of $417,000 to
$625,500 in CA, just like Hawaii and Alaska.
Raising these limits will help thousands of your constituents--from current
homeowners and first-time home buyers to mortgage professionals and hundreds
of related service providers who have been, or will be, devastated by this
crisis.
This is an urgent request for your help. Only you and the members of
Congress can make this desperately needed change. Please respond
immediately to relieve the burden created by these outdated limits and to
help our states residents and economy as a whole begin to recover from this
crisis.
Sincerely,
(Insert Your Name)
(Insert Title)
(Insert Company Name)
(Insert Address)
(Insert City, State & Zip)
(Insert Phone Number)
(Insert E-mail Address)
The Honorable Brad Sherman
House Office Building
United States House of Representatives
Washington, DC 20515
Dear Representative Sherman:
As you know, the liquidity crisis in the mortgage industry is harming
clients and business throughout our state, as well as our economy in
general. Congress, however, has the power to make a rather simple change
that will relieve a large portion of this burden for thousands of people in
CA and throughout the United States.
The cap for government sponsored Conforming Fixed Interest Rate loans is
currently set at $417,000--which may adequately serve some parts of the US,
but is not high enough for many middle-class homes in our area.
Consequently, many people in CA are powerless to refinance adjustable rate
mortgages that are at risk of foreclosure or default, and others are unable
to purchase new homes for their families at all.
The problem is that the current limits are based on formulas that were
created based on demographics from 1980. Additionally, the limits apply
nationally except for Hawaii and Alaska, which were given High Priced State
status. To be both effective and fair, the limits for our state and others
with higher housing prices need to be brought in line with the higher loan
caps of states like Alaska and Hawaii, which both have a 50% increase to the
conforming limit. In 1992, the US Virgin Islands was successful in asking
congress to allow it to have the benefit of High Priced State status. In
2001, Guam did the same. Our state should be considered a High Priced State
as well. This would increase the current conforming limit of $417,000 to
$625,500 in CA, just like Hawaii and Alaska.
Raising these limits will help thousands of your constituents--from current
homeowners and first-time home buyers to mortgage professionals and hundreds
of related service providers who have been, or will be, devastated by this
crisis.
This is an urgent request for your help. Only you and the members of
Congress can make this desperately needed change. Please respond
immediately to relieve the burden created by these outdated limits and to
help our states residents and economy as a whole begin to recover from this
crisis.
Sincerely,
(Insert Your Name)
(Insert Title)
(Insert Company Name)
(Insert Address)
(Insert City, State & Zip)
(Insert Phone Number)
(Insert E-mail Address)
Tuesday, October 30, 2007
V Cards (a tech benefit)
The vCard, or virtual business card, is an electronic business
card. It provides a standard format allowing the exchange of
contact information over the internet without having to manually
enter business card information. vCards include information
such as name, address, telephone number and e-mail addresses and
URLs. They can also have graphics and multimedia including
photographs, company logos, audio clips such as for name
pronunciation. Geographic and time zone information in vCards
can also be included to let others know when to contact you.
vCards can support multiple languages.
One of the most popular uses of vCards are as attachments in
e-mail messages. Since the vCard is not a signature file that
is put into the message of the e-mail, the information can
automatically be recorded into most contact managers and e-mail
software. It can be used with many programs including Microsoft
Outlook, Outlook Express, Netscape Messenger, and On-Line Agent
(also referred to as RE/MAX Agent 2000 and AgentOffice 4.5),
just to mention a few.
vCards can not only be used to record contact information of
business contacts, friends and family, but, can also be used to
store information about prospects and clients. Because vCards
are compatible with most e-mail clients, you can save a contact
in vCard format.
There are different ways of saving vCards. Some programs
automatically import the vCard, others let you drag and drop the
vCard icon directly into the address book. Some require that you
save the vCard to disk and then import it to the program. If
your computer doesn't know what to do with the vCard, you may
need to set it to automatically save .vcf files with the address
book of choice. See your system's help pages on associating file
types with programs.
As you’ll quickly discover, the major advantage of using vCards
is the significant amount of time that is saved by eliminating
the need to type contact information into contact managers and
address books. Other advantages of vCards are that since they
are text files, they cannot transmit a computer virus in an
"infectious" form, and their file size is very small.
ABOUT THE AUTHOR: Stephen Raitt is a leading Internet marketing
expert for the real estate and financing industry. He has helped
thousands of real estate agents and loan officers develop and
promote their Internet presence more profitably.
His Special Report, "How to Become the Dominant Internet Agent
in Your Marketplace Overnight... Without Spending a Fortune,
Wasting Your Time, or Even Caring How It Works!" and his book,
"87 Ways To Make 0ver $1,OOO,OOO Annually In Commissions On The
Internet" are both available WITHOUT COST or obligation at:
http://SuccessWebsite.com
card. It provides a standard format allowing the exchange of
contact information over the internet without having to manually
enter business card information. vCards include information
such as name, address, telephone number and e-mail addresses and
URLs. They can also have graphics and multimedia including
photographs, company logos, audio clips such as for name
pronunciation. Geographic and time zone information in vCards
can also be included to let others know when to contact you.
vCards can support multiple languages.
One of the most popular uses of vCards are as attachments in
e-mail messages. Since the vCard is not a signature file that
is put into the message of the e-mail, the information can
automatically be recorded into most contact managers and e-mail
software. It can be used with many programs including Microsoft
Outlook, Outlook Express, Netscape Messenger, and On-Line Agent
(also referred to as RE/MAX Agent 2000 and AgentOffice 4.5),
just to mention a few.
vCards can not only be used to record contact information of
business contacts, friends and family, but, can also be used to
store information about prospects and clients. Because vCards
are compatible with most e-mail clients, you can save a contact
in vCard format.
There are different ways of saving vCards. Some programs
automatically import the vCard, others let you drag and drop the
vCard icon directly into the address book. Some require that you
save the vCard to disk and then import it to the program. If
your computer doesn't know what to do with the vCard, you may
need to set it to automatically save .vcf files with the address
book of choice. See your system's help pages on associating file
types with programs.
As you’ll quickly discover, the major advantage of using vCards
is the significant amount of time that is saved by eliminating
the need to type contact information into contact managers and
address books. Other advantages of vCards are that since they
are text files, they cannot transmit a computer virus in an
"infectious" form, and their file size is very small.
ABOUT THE AUTHOR: Stephen Raitt is a leading Internet marketing
expert for the real estate and financing industry. He has helped
thousands of real estate agents and loan officers develop and
promote their Internet presence more profitably.
His Special Report, "How to Become the Dominant Internet Agent
in Your Marketplace Overnight... Without Spending a Fortune,
Wasting Your Time, or Even Caring How It Works!" and his book,
"87 Ways To Make 0ver $1,OOO,OOO Annually In Commissions On The
Internet" are both available WITHOUT COST or obligation at:
http://SuccessWebsite.com
Thursday, September 27, 2007
Home Warranty = Peace of Mind
After months of planning and hard work, you have just sold your house. You put your cash into a new beautiful home, and complete the arduous task of moving in. Now, you can put your feet up on the couch, open your favorite beverage and enjoy the afternoon football game. Just then, the phone rings. To your surprise, the buyer of your old home is talking your ear off about how the dishwasher broke and flooded the kitchen. Can you rest easy that the burden of this mishap will not fall on your shoulders? If you negotiated a home warranty for your buyer through closing, then the answer is yes.
The last thing you want to worry about after you sell your home is what could malfunction or break. A home warranty plan will protect both the buyer and the seller in the even of an unexpected repair. Depending on negotiations made through a sales transaction, the cost of the policy can be paid by either the buyer or the seller, or they can split the cost. The cost varies, but it is usually between $350-$450. The term of the policy can also vary, but the most common is a one-year policy with a renewable option. Basic coverage in most plans includes heating, plumbing, electrical, and major appliances such as your water heater, oven, built-in microwave, dishwasher and garbage disposal. Some warranties will cover your roof, and others will require an additional fee to cover items such as septic systems, pools or spas. Be sure to read the policy carefully and ask questions if something is not clear. For a referral to a good company, you can contact me.
Most home warranty plans work the same way with regards to a repair. If an appliance stops working, the homeowner will call the home warranty company. The home warranty company will send out a provider or contractor with whom they do business. The provider will contact the homeowner to make an appointment. If the appliance can be fixed, the provider will do that. If the appliance must be replaced, the home warranty company will install and replace the appliance. The homeowner will pay a small trade service fee for the repair or replacement, and it is most often between $50-$75.
So sit back and enjoy the game. Purchasing a home warranty can be a big home run!
The last thing you want to worry about after you sell your home is what could malfunction or break. A home warranty plan will protect both the buyer and the seller in the even of an unexpected repair. Depending on negotiations made through a sales transaction, the cost of the policy can be paid by either the buyer or the seller, or they can split the cost. The cost varies, but it is usually between $350-$450. The term of the policy can also vary, but the most common is a one-year policy with a renewable option. Basic coverage in most plans includes heating, plumbing, electrical, and major appliances such as your water heater, oven, built-in microwave, dishwasher and garbage disposal. Some warranties will cover your roof, and others will require an additional fee to cover items such as septic systems, pools or spas. Be sure to read the policy carefully and ask questions if something is not clear. For a referral to a good company, you can contact me.
Most home warranty plans work the same way with regards to a repair. If an appliance stops working, the homeowner will call the home warranty company. The home warranty company will send out a provider or contractor with whom they do business. The provider will contact the homeowner to make an appointment. If the appliance can be fixed, the provider will do that. If the appliance must be replaced, the home warranty company will install and replace the appliance. The homeowner will pay a small trade service fee for the repair or replacement, and it is most often between $50-$75.
So sit back and enjoy the game. Purchasing a home warranty can be a big home run!
Tuesday, September 25, 2007
Wednesday, August 22, 2007
Mortgage Crash Info
Here is everything you ever wanted to know about why the crash has occoured. Please feel free to comment or just read and understand what is going on in today's market.
John Mauldin's "The Panic of 2007!"
http://www.frontlinethoughts.com/pdf/mwo081707.pdf
John Mauldin's "The Panic of 2007!"
http://www.frontlinethoughts.com/pdf/mwo081707.pdf
Thursday, August 02, 2007
Subprime Crash Information
symphony mortgage company for the benefit of borrowers with home loans in van nuys and loans in sylmar, presents this email as recd. from a public website regarding the current industry meltdown.
« Indymac’s Q207 Earnings Presentation and Press Release
Email from Mike Perry, Chairman and CEO: Conditions in the Private Secondary Markets and Their Implications for our Industry and Indymac
Following up on our earnings release earlier this week, we wanted to provide some commentary on what we see happening right now in the secondary market and what actions we are taking in response. Given Indymac’s commitment to candor and transparency, here is a copy of an email CEO Mike Perry sent out to all Indymac employees yesterday on this subject:
Unfortunately, the private secondary markets (excluding the GSEs and Ginnie Mae) continue to remain very panicked and illiquid. By way of example, it is currently difficult, at present, to trade even the AAA bond on any private MBS transaction. In addition, to give you an idea as to how unprecedented this market has become…I received a call from U.S. Senator Dodd this morning who seeking an understanding of “what is really going on and how can I and Congress help?” I also have talked to the Chairman of Fannie Mae this morning and have traded calls with the Chairman of Freddie Mac (Fannie Mae’s Chairman telling me that they are “prepared to step up and help the industry”).
Unlike past private secondary mortgage market disruptions, which have lasted a few weeks or so…our industry and Indymac have to be prudent and assume that this present disruption, which appears broader and more serious, might take longer to correct itself. As a result, we have seen just since yesterday, many major mortgage lenders announce additional product cutbacks…some leaving subprime, Alt-a, and other products altogether or restricting some products to only their own retail channel (and possibly wholesale) and significant, additional price widening.
While we have very strong liquidity, a good amount of excess capital and there are no realistic scenarios that I can foresee that would impair Indymac’s viability (thanks to our Federal Thrift structure), as I said on the earnings conference call yesterday…we cannot continue to fund $80 to $100 billion of loans through a $33 billion balance sheet….unless we know we can sell a significant portion of these loans into the secondary market…and right now, other than the GSEs and Ginnie Mae….the private secondary market is not functioning.
As a result, Indymac like all major lenders, will continue to widen its pricing and tighten product and underwriting guidelines to ensure that a much great percentage of our production qualifies for sale to the GSEs or through a GNMA security (we sold 40% to the GSEs in the 2nd quarter, up from 30% in Q107 and 19% in 2006, and we want to get it up to at least 60% asap). We are hopeful that private AAA MBS bonds begin to trade soon…and have encouraged the GSEs to step in and provide additional liquidity to the secondary markets (their primary role) for both these private securities and other loans.
While this is an abrupt and uncomfortable change, it is a change that all of our competitors are making just as abruptly, if not more abruptly…so it should not result in one mortgage company having a competitive advantage over another. The reality is I have a lot of confidence in our industry’s mortgage originators (and in particular Indymac’s customers and retail loan officers)….to quickly move as many borrowers as possible to this more full doc, conforming loan environment. I remain hopeful that these very major changes which are clearly negative for our and industry’s loan volumes…will be largely offset for Indymac by the fact that we have fewer players left in the business….we are certainly seeing it play out this way so far this week.
More specific details on products and channels will follow in the next few days. Thanks. Mike
P.S. We will still originate product that cannot be sold to the GSEs…just less of it and we will have to assume we retain it in portfolio (until the AAA private MBS market recovers).
« Indymac’s Q207 Earnings Presentation and Press Release
Email from Mike Perry, Chairman and CEO: Conditions in the Private Secondary Markets and Their Implications for our Industry and Indymac
Following up on our earnings release earlier this week, we wanted to provide some commentary on what we see happening right now in the secondary market and what actions we are taking in response. Given Indymac’s commitment to candor and transparency, here is a copy of an email CEO Mike Perry sent out to all Indymac employees yesterday on this subject:
Unfortunately, the private secondary markets (excluding the GSEs and Ginnie Mae) continue to remain very panicked and illiquid. By way of example, it is currently difficult, at present, to trade even the AAA bond on any private MBS transaction. In addition, to give you an idea as to how unprecedented this market has become…I received a call from U.S. Senator Dodd this morning who seeking an understanding of “what is really going on and how can I and Congress help?” I also have talked to the Chairman of Fannie Mae this morning and have traded calls with the Chairman of Freddie Mac (Fannie Mae’s Chairman telling me that they are “prepared to step up and help the industry”).
Unlike past private secondary mortgage market disruptions, which have lasted a few weeks or so…our industry and Indymac have to be prudent and assume that this present disruption, which appears broader and more serious, might take longer to correct itself. As a result, we have seen just since yesterday, many major mortgage lenders announce additional product cutbacks…some leaving subprime, Alt-a, and other products altogether or restricting some products to only their own retail channel (and possibly wholesale) and significant, additional price widening.
While we have very strong liquidity, a good amount of excess capital and there are no realistic scenarios that I can foresee that would impair Indymac’s viability (thanks to our Federal Thrift structure), as I said on the earnings conference call yesterday…we cannot continue to fund $80 to $100 billion of loans through a $33 billion balance sheet….unless we know we can sell a significant portion of these loans into the secondary market…and right now, other than the GSEs and Ginnie Mae….the private secondary market is not functioning.
As a result, Indymac like all major lenders, will continue to widen its pricing and tighten product and underwriting guidelines to ensure that a much great percentage of our production qualifies for sale to the GSEs or through a GNMA security (we sold 40% to the GSEs in the 2nd quarter, up from 30% in Q107 and 19% in 2006, and we want to get it up to at least 60% asap). We are hopeful that private AAA MBS bonds begin to trade soon…and have encouraged the GSEs to step in and provide additional liquidity to the secondary markets (their primary role) for both these private securities and other loans.
While this is an abrupt and uncomfortable change, it is a change that all of our competitors are making just as abruptly, if not more abruptly…so it should not result in one mortgage company having a competitive advantage over another. The reality is I have a lot of confidence in our industry’s mortgage originators (and in particular Indymac’s customers and retail loan officers)….to quickly move as many borrowers as possible to this more full doc, conforming loan environment. I remain hopeful that these very major changes which are clearly negative for our and industry’s loan volumes…will be largely offset for Indymac by the fact that we have fewer players left in the business….we are certainly seeing it play out this way so far this week.
More specific details on products and channels will follow in the next few days. Thanks. Mike
P.S. We will still originate product that cannot be sold to the GSEs…just less of it and we will have to assume we retain it in portfolio (until the AAA private MBS market recovers).
Tuesday, June 26, 2007
Holding Title
Various Ways To Hold Title To A Property
There are several different ways to hold title to real property (a home, commercial building, etc). When considering which option is best for you, think about how the ownership rights should be dispersed and what happens when it comes time to sell the property. Each has its own advantages and disadvantages. Here are the basics, but you should contact an attorney or CPA who understands the differences as they pertain to you. In other words, we can't give you legal advice.
Joint Tenancy
In many cases, married couples hold title as joint tenants. This is a way for two or more people to share ownership. When two or more people own property as joint tenants and one owner dies, the other owners automatically own the deceased owner's share. For example, if a parent and child own a house as joint tenants and the parent dies, the child automatically becomes full owner. Because of this right of survivorship, no Will is required to transfer the property. It goes directly to the surviving joint title holders without the delay and costs of court probate.
Tenants in Common
Tenants in Common allows for multiple people to hold title in unequal percentage shares. Each has the right to sell their share, or Will their share as they want. For example, three buyers could own a property with one buyer owning 60%, one owning 30% and one owning 10%. Each would be able to sell or Will their own shares as they want.
Sole Ownership
You can take the title in your own name, which is referred to as sole ownership, or title in severalty. You can use this if you are unmarried, if you have been married but are now legally divorced or if you are currently married but want to acquire the property in your name alone. In the last case, if you are married, your spouse will have to relinquish his or her rights to the property. An interesting note is that one who was previously married and now divorced is called an "unmarried" person. A "single" person has never been married.
Living Trust
A living trust can be created only in the name of individuals who are alive. A Living Trust is like having another entity own and control your assets, including your home. That entity belongs to you, or others designated as trustees, who own the entity. While the creator of the Living Trust lives, the Trust is revocable (can be changed) during his or her life. Upon the death of the creator of the Living Trust, it becomes irrevocable (cannot be changed). Court probate costs and delays are avoided because the assets in the Trust automatically pass according to the dictates of the Trust. Privacy is a major attraction in setting up a Living Trust. Still another advantage is that court challenges of living trusts are virtually impossible, whereas Will challenges by disappointed relatives frequently occur. A trust document does not become public upon the death of the trust-holder like a Will does. Some mortgage lenders will not allow a buyer to close the transaction in a Trust. There is usually no problem with transferring it in to a Trust after the close.
Community Property (or co-ownership)
There are nine states that allow married people to purchase property, either together or individually, as community property. This basically means that each person owns 50%, but each needs to write in their Will how their share is to be divided when they die. If the ownership is community property with rights of survivorship, however, then the deceased spouses interest terminates when he/she dies, and the surviving spouse owns the entire property. A special advantage is that community property assets (such as the house) Willed to a surviving spouse receive a new "stepped-up basis" to market value on the date of death. The stepped-up basis means that when the property is eventually sold, there will be less taxable gain. As of 12/31/06, there are nine states that allow community property. They are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.
There are several different ways to hold title to real property (a home, commercial building, etc). When considering which option is best for you, think about how the ownership rights should be dispersed and what happens when it comes time to sell the property. Each has its own advantages and disadvantages. Here are the basics, but you should contact an attorney or CPA who understands the differences as they pertain to you. In other words, we can't give you legal advice.
Joint Tenancy
In many cases, married couples hold title as joint tenants. This is a way for two or more people to share ownership. When two or more people own property as joint tenants and one owner dies, the other owners automatically own the deceased owner's share. For example, if a parent and child own a house as joint tenants and the parent dies, the child automatically becomes full owner. Because of this right of survivorship, no Will is required to transfer the property. It goes directly to the surviving joint title holders without the delay and costs of court probate.
Tenants in Common
Tenants in Common allows for multiple people to hold title in unequal percentage shares. Each has the right to sell their share, or Will their share as they want. For example, three buyers could own a property with one buyer owning 60%, one owning 30% and one owning 10%. Each would be able to sell or Will their own shares as they want.
Sole Ownership
You can take the title in your own name, which is referred to as sole ownership, or title in severalty. You can use this if you are unmarried, if you have been married but are now legally divorced or if you are currently married but want to acquire the property in your name alone. In the last case, if you are married, your spouse will have to relinquish his or her rights to the property. An interesting note is that one who was previously married and now divorced is called an "unmarried" person. A "single" person has never been married.
Living Trust
A living trust can be created only in the name of individuals who are alive. A Living Trust is like having another entity own and control your assets, including your home. That entity belongs to you, or others designated as trustees, who own the entity. While the creator of the Living Trust lives, the Trust is revocable (can be changed) during his or her life. Upon the death of the creator of the Living Trust, it becomes irrevocable (cannot be changed). Court probate costs and delays are avoided because the assets in the Trust automatically pass according to the dictates of the Trust. Privacy is a major attraction in setting up a Living Trust. Still another advantage is that court challenges of living trusts are virtually impossible, whereas Will challenges by disappointed relatives frequently occur. A trust document does not become public upon the death of the trust-holder like a Will does. Some mortgage lenders will not allow a buyer to close the transaction in a Trust. There is usually no problem with transferring it in to a Trust after the close.
Community Property (or co-ownership)
There are nine states that allow married people to purchase property, either together or individually, as community property. This basically means that each person owns 50%, but each needs to write in their Will how their share is to be divided when they die. If the ownership is community property with rights of survivorship, however, then the deceased spouses interest terminates when he/she dies, and the surviving spouse owns the entire property. A special advantage is that community property assets (such as the house) Willed to a surviving spouse receive a new "stepped-up basis" to market value on the date of death. The stepped-up basis means that when the property is eventually sold, there will be less taxable gain. As of 12/31/06, there are nine states that allow community property. They are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.
Monday, January 15, 2007
A New Year
As the new year is upon us, I have found it very useful to think about this past year. As you are aware, mortgage rates have risen. At least that is what the media would like you to believe. The 30 year no prepay, 80% Loan to value, 680 credit score loan is still very low. Generally the note rate would be between 5.875 and 6.250% depending on the day. These rates are not rate quotes but a general idea of where rates have recently been. However, the short term indicies that are associated with adjustable loans have increased dramatically over the last two years.
The media is aware that many people originated a mortgage that was tied to an adjustable rate. Moreover many people have originated loans that are by nature adding to the principal balance or the original note. This is not always bad and is a valid strategy for designing your financial future. However some people never understood that there is a limit to the percentage of negative additional balance that the banks will allow. Generally between 110% and 125%. When these loans reach their maximum negative balance, they recast. That is to say the lender adjusts the payments so that the entire balance will be paid off within the original time frame of the note. When this happens, the payment increases and some people are caught off guard with the payment increase. That's why we are here. We brokers that are responsible want to work with borrowers to maximize leverage in their home but still keep to a payment and loan strategy that will work in the long term for you.
There are two ways that I could buy stock. First I could research all the various fundamentals and their meanings. I could then choose several companies to follow through charts. I could rigoursly read their prospecti and watch documentaries on their CEOs. This would likely take me all day and all night, everyday of the week. Of course I would have no way to invest in the company of my choice because I would have no money.
I could also go to a specialist and work with him or her to strategize my future. I would rely on their intimate knowledge of the stock market and investment strategies. I retain final say on the actual investments but I rely on the specialist for their knowledge of the best investments to reach my goals. I would have money to invest because I could get back to work right away.
The latter is also the reason to use a mortgage broker/advisor. We spend all of our days working through scenarios so you can get back to your life. A mortgage can be a useful tool in your portfolio. Come to us and let us help you unlock it's potential
The media is aware that many people originated a mortgage that was tied to an adjustable rate. Moreover many people have originated loans that are by nature adding to the principal balance or the original note. This is not always bad and is a valid strategy for designing your financial future. However some people never understood that there is a limit to the percentage of negative additional balance that the banks will allow. Generally between 110% and 125%. When these loans reach their maximum negative balance, they recast. That is to say the lender adjusts the payments so that the entire balance will be paid off within the original time frame of the note. When this happens, the payment increases and some people are caught off guard with the payment increase. That's why we are here. We brokers that are responsible want to work with borrowers to maximize leverage in their home but still keep to a payment and loan strategy that will work in the long term for you.
There are two ways that I could buy stock. First I could research all the various fundamentals and their meanings. I could then choose several companies to follow through charts. I could rigoursly read their prospecti and watch documentaries on their CEOs. This would likely take me all day and all night, everyday of the week. Of course I would have no way to invest in the company of my choice because I would have no money.
I could also go to a specialist and work with him or her to strategize my future. I would rely on their intimate knowledge of the stock market and investment strategies. I retain final say on the actual investments but I rely on the specialist for their knowledge of the best investments to reach my goals. I would have money to invest because I could get back to work right away.
The latter is also the reason to use a mortgage broker/advisor. We spend all of our days working through scenarios so you can get back to your life. A mortgage can be a useful tool in your portfolio. Come to us and let us help you unlock it's potential
Friday, November 17, 2006
Understanding a Reverse
The Basics:
A "reverse" mortgage is a loan against your home that you do not have to pay back for as long as you live there. No matter how this loan is paid out to you, you typically don't have to pay anything back until you die, sell your home, or permanently move out of your home. Homeowners 62 and older who have paid off their mortgages or have only small mortgage balances remaining are eligible to participate in HUD's reverse mortgage program. The property must be your principal residence. The program allows homeowners to borrow against the equity in their homes in a variety of different ways. (What is HUD? The Department of Housing and Urban Development is the Federal agency responsible for national policy and programs that address America's housing needs, that improve and develop the Nation's communities, and enforce fair housing laws.)
Obtaining a traditional loan (a "forward" mortgage) requires that the lender check your credit/income to see how much you can afford to pay back each month. But with a reverse mortgage, you don't have to make monthly repayments. Your income generally has nothing to do with getting the loan. You could have no income and still be able to get a reverse mortgage. With most home loans, if you fail to make your monthly repayments, you could lose your home. Reverse mortgages do not have monthly repayments, so you can't lose your home by failing to make them. You can turn the value of your home into cash without having to move or to repay the loan each month. The cash you get from a reverse mortgage can be paid to you in several ways:
All at once, in a single lump sum of cash
As a regular monthly cash payment to you
As a "credit line" account that lets you decide when and how much of your available cash is paid to you
As a combination of these payment methods
Another feature is that the money paid to you is not taxable. This is because it is not income, it is a loan! The amount of cash you can get from a reverse mortgage depends on the program you select and - within each program - on your age, home, and current mortgage rates. With a reverse mortgage, you are taking the equity out in cash, so your debt increases and your home equity decreases.
Reverse mortgages allow you to use debt to turn your equity into income. You are reversing the deal you used to initially buy your home. Then, you had income and wanted equity. Now, you have equity and want income. There are also no limits on the value of homes qualifying for a HUD reverse mortgage. However, the amount that may be borrowed is capped by the maximum FHA loan limit for each city and county. It varies from $172,632 in rural areas to $312,895 in many major metropolitan areas (and even higher in Alaska, Hawaii & the U.S. Virgin Islands) depending on local housing costs. The size of reverse mortgage loans is determined by the borrower's age, the interest rate, and the home's value. The older a borrower, the larger the percentage of the home's value that can be borrowed.
A "reverse" mortgage is a loan against your home that you do not have to pay back for as long as you live there. No matter how this loan is paid out to you, you typically don't have to pay anything back until you die, sell your home, or permanently move out of your home. Homeowners 62 and older who have paid off their mortgages or have only small mortgage balances remaining are eligible to participate in HUD's reverse mortgage program. The property must be your principal residence. The program allows homeowners to borrow against the equity in their homes in a variety of different ways. (What is HUD? The Department of Housing and Urban Development is the Federal agency responsible for national policy and programs that address America's housing needs, that improve and develop the Nation's communities, and enforce fair housing laws.)
Obtaining a traditional loan (a "forward" mortgage) requires that the lender check your credit/income to see how much you can afford to pay back each month. But with a reverse mortgage, you don't have to make monthly repayments. Your income generally has nothing to do with getting the loan. You could have no income and still be able to get a reverse mortgage. With most home loans, if you fail to make your monthly repayments, you could lose your home. Reverse mortgages do not have monthly repayments, so you can't lose your home by failing to make them. You can turn the value of your home into cash without having to move or to repay the loan each month. The cash you get from a reverse mortgage can be paid to you in several ways:
All at once, in a single lump sum of cash
As a regular monthly cash payment to you
As a "credit line" account that lets you decide when and how much of your available cash is paid to you
As a combination of these payment methods
Another feature is that the money paid to you is not taxable. This is because it is not income, it is a loan! The amount of cash you can get from a reverse mortgage depends on the program you select and - within each program - on your age, home, and current mortgage rates. With a reverse mortgage, you are taking the equity out in cash, so your debt increases and your home equity decreases.
Reverse mortgages allow you to use debt to turn your equity into income. You are reversing the deal you used to initially buy your home. Then, you had income and wanted equity. Now, you have equity and want income. There are also no limits on the value of homes qualifying for a HUD reverse mortgage. However, the amount that may be borrowed is capped by the maximum FHA loan limit for each city and county. It varies from $172,632 in rural areas to $312,895 in many major metropolitan areas (and even higher in Alaska, Hawaii & the U.S. Virgin Islands) depending on local housing costs. The size of reverse mortgage loans is determined by the borrower's age, the interest rate, and the home's value. The older a borrower, the larger the percentage of the home's value that can be borrowed.
Wednesday, April 19, 2006
New Credit Score
There is a new credit score called the "VantageScore", developed by the three major credit bureaus, Equifax, Experian and TransUnion, to compete with Fair Isaac's scoring models (FICO), which is currently in use.
Many lenders are reluctant to begin using this new scoring method until more is learned about the product and how it will be adopted within the industry. Until this is determined, most lenders will continue to use their current credit score philosophy, based on the Fair Isaac scoring models provided through credit bureaus today.
According to Advantage Credit President Ron Litt, it could take years to move away from using FICO based scores, "While the new system has potential for improving consistency of scoring from top to bottom, most lenders, Government Sponsored Enterprises (Fannie Mae and Freddie Mac), the U.S. Department of Housing and Urban Development and the Federal Housing Association would have to retool their existing technology, retrain staff and make other significant investments to accommodate the change. Without immediate participation from these groups, adoption could be slow."
Litt also discussed the new score's level of acceptance by the industry. "Advantage Credit and other resellers can offer the new scoring model almost immediately, but the existing credit scores are so embedded that an effective change could take years," he said.
Many lenders are reluctant to begin using this new scoring method until more is learned about the product and how it will be adopted within the industry. Until this is determined, most lenders will continue to use their current credit score philosophy, based on the Fair Isaac scoring models provided through credit bureaus today.
According to Advantage Credit President Ron Litt, it could take years to move away from using FICO based scores, "While the new system has potential for improving consistency of scoring from top to bottom, most lenders, Government Sponsored Enterprises (Fannie Mae and Freddie Mac), the U.S. Department of Housing and Urban Development and the Federal Housing Association would have to retool their existing technology, retrain staff and make other significant investments to accommodate the change. Without immediate participation from these groups, adoption could be slow."
Litt also discussed the new score's level of acceptance by the industry. "Advantage Credit and other resellers can offer the new scoring model almost immediately, but the existing credit scores are so embedded that an effective change could take years," he said.
Tuesday, November 29, 2005
Eliminate PMI
What You Need to Know About Your Mortgage Insurance
Up to $700,000,000 per year is unnecessarily paid to Private Mortgage Insurance Companies by homeowners. If you are paying Mortgage Insurance or PMI (as it is regularly called), now is the time to check and see if you qualify to eliminate it from your monthly payment.
Below are some of the guidelines of carrying PMI.
1. You must determine the date you signed your mortgage. There are different rules for mortgages taken before July 29, 1999. These requirements are for those mortgages signed after July 29, 1999.
2. Your mortgage insurance will “automatically” drop off when your mortgage is paid down to 78% from its “original” value. That means that even if the value of your property has increased substantially, the lender is required to use the lesser of the two values.
3. Mortgage Insurance has a two-year waiting period before a lender can even consider dropping that portion of the payment. However, there are two exceptions to this rule: (In both instances-you must request that it be canceled.)
A. You have paid money towards the principal balance and have reached the 80% of the original value.
B. You have substantially improved the property (such as a room addition or a second story addition – just remodeling is not enough) and you can prove it with a new appraisal.
4. After two years, you can request that the mortgage insurance portion of your payment be dropped. However, it must meet these parameters:
A. You must provide a new appraisal. (The appraiser must be approved by your lender. The lender has the right to dispute the value.)
B. You must have a good payment history on your mortgage.
C. The Loan to Value Ratio must be 75% or less-based upon the new appraisal.
5. After five years, the same rules as #3 apply; however, the loan-to-value ratio increases to 80% of the appraised value.
6. If you have a second mortgages on your property, it will not affect your ability to get your mortgage insurance payment waived and it will NOT be considered in the loan-to-value calculations.
Each “type” of mortgage (i.e., adjustable rate, balloon, etc.) has its own set of regulations. In addition, some states have passed their own legislation, which makes canceling your mortgage insurance easier. However, I recommend that you call your lender and request their rules on what is required to eliminate it from your payment.
When you receive the letter of instructions from your lender, call me and I will help you determine what is needed and if you qualify.
Up to $700,000,000 per year is unnecessarily paid to Private Mortgage Insurance Companies by homeowners. If you are paying Mortgage Insurance or PMI (as it is regularly called), now is the time to check and see if you qualify to eliminate it from your monthly payment.
Below are some of the guidelines of carrying PMI.
1. You must determine the date you signed your mortgage. There are different rules for mortgages taken before July 29, 1999. These requirements are for those mortgages signed after July 29, 1999.
2. Your mortgage insurance will “automatically” drop off when your mortgage is paid down to 78% from its “original” value. That means that even if the value of your property has increased substantially, the lender is required to use the lesser of the two values.
3. Mortgage Insurance has a two-year waiting period before a lender can even consider dropping that portion of the payment. However, there are two exceptions to this rule: (In both instances-you must request that it be canceled.)
A. You have paid money towards the principal balance and have reached the 80% of the original value.
B. You have substantially improved the property (such as a room addition or a second story addition – just remodeling is not enough) and you can prove it with a new appraisal.
4. After two years, you can request that the mortgage insurance portion of your payment be dropped. However, it must meet these parameters:
A. You must provide a new appraisal. (The appraiser must be approved by your lender. The lender has the right to dispute the value.)
B. You must have a good payment history on your mortgage.
C. The Loan to Value Ratio must be 75% or less-based upon the new appraisal.
5. After five years, the same rules as #3 apply; however, the loan-to-value ratio increases to 80% of the appraised value.
6. If you have a second mortgages on your property, it will not affect your ability to get your mortgage insurance payment waived and it will NOT be considered in the loan-to-value calculations.
Each “type” of mortgage (i.e., adjustable rate, balloon, etc.) has its own set of regulations. In addition, some states have passed their own legislation, which makes canceling your mortgage insurance easier. However, I recommend that you call your lender and request their rules on what is required to eliminate it from your payment.
When you receive the letter of instructions from your lender, call me and I will help you determine what is needed and if you qualify.
Saturday, July 30, 2005
APR
The annual percentage rate (APR) is an interest rate that is different from the note rate. It is commonly used to compare loan programs from different lenders. The Federal Truth in Lending law requires mortgage companies to disclose the APR when they advertise a rate. Typically the APR is found next to the rate.
Example: 30-year fixed 8 percent 1 point 8.107% APR
The APR does NOT affect your monthly payments. Your monthly payments are a function of the interest rate and the length of the loan. The APR is a very confusing number! Even mortgage bankers and brokers admit it is confusing. The APR is designed to measure the "true cost of a loan." It creates a level playing field for lenders. It prevents lenders from advertising a low rate and hiding fees.
Ideally, one should be able to compare APRs from various lenders, then select the loan with the lowest APR. Unfortunately it's not that simple. Various lenders calculate APRs differently! A loan with a lower APR may not be the best choice. A good way to compare different lenders is to ask them to provide a Good Faith Estimate of closing costs. Be sure you compare the same loan program (e.g., 30-year fixed), interest rate and rate lock period. You may ignore fees that are independent of the loan, such as homeowners insurance, title fees, escrow fees, attorney fees, etc. Pay particular attention to loan fees. The lender with the lowest loan fees will likely have the best deal.
The reason why APRs are confusing is because the rules to compute APR are not clearly defined. What fees are included in the APR?
The following fees ARE generally included in the APR:
Points - both discount points and origination points
Pre-paid interest. The interest paid from the date the loan closes to the end of the month. Most mortgage companies assume 15 days of interest in their calculations. However, companies may use any number between 1 and 30!
Loan-processing fee
Underwriting fee
Document-preparation fee
Private mortgage-insurance
The following fees are SOMETIMES included in the APR:
Loan-application fee
Credit life insurance (insurance that pays off the mortgage in the event of a borrowers death)
The following fees are normally NOT included in the APR:
Title or abstract fee
Escrow fee
Attorney fee
Notary fee
Document preparation (charged by the closing agent)
Home-inspection fees
Recording fee
Transfer taxes
Credit report
Appraisal fee
Calculating APRs on adjustable and balloon loans is even more complex because future rates are unknown. The result is even more confusion about how lenders calculate APRs.
Do not attempt to compare a 30-year loan with a 15-year loan using their respective APRs. A 15-year loan may have a lower interest rate, but could have a higher APR, since the loan fees are amortized over a shorter period of time.
Finally, many lenders do not even know what they include in their APR because they use software programs to compute their APRs. It is quite possible that the same lender with the same fees using two different software programs may arrive at two different APRs!
Conclusion : Use the APR as a starting point to compare loans. The APR is a result of a complex calculation and not clearly defined. There is no substitute to getting a good-faith estimate from each lender to compare costs. Remember to exclude those costs that are independent of the loan.
information provided from www.symphonymortgagecompany.com A site hosted by Myer's inc.
Example: 30-year fixed 8 percent 1 point 8.107% APR
The APR does NOT affect your monthly payments. Your monthly payments are a function of the interest rate and the length of the loan. The APR is a very confusing number! Even mortgage bankers and brokers admit it is confusing. The APR is designed to measure the "true cost of a loan." It creates a level playing field for lenders. It prevents lenders from advertising a low rate and hiding fees.
Ideally, one should be able to compare APRs from various lenders, then select the loan with the lowest APR. Unfortunately it's not that simple. Various lenders calculate APRs differently! A loan with a lower APR may not be the best choice. A good way to compare different lenders is to ask them to provide a Good Faith Estimate of closing costs. Be sure you compare the same loan program (e.g., 30-year fixed), interest rate and rate lock period. You may ignore fees that are independent of the loan, such as homeowners insurance, title fees, escrow fees, attorney fees, etc. Pay particular attention to loan fees. The lender with the lowest loan fees will likely have the best deal.
The reason why APRs are confusing is because the rules to compute APR are not clearly defined. What fees are included in the APR?
The following fees ARE generally included in the APR:
Points - both discount points and origination points
Pre-paid interest. The interest paid from the date the loan closes to the end of the month. Most mortgage companies assume 15 days of interest in their calculations. However, companies may use any number between 1 and 30!
Loan-processing fee
Underwriting fee
Document-preparation fee
Private mortgage-insurance
The following fees are SOMETIMES included in the APR:
Loan-application fee
Credit life insurance (insurance that pays off the mortgage in the event of a borrowers death)
The following fees are normally NOT included in the APR:
Title or abstract fee
Escrow fee
Attorney fee
Notary fee
Document preparation (charged by the closing agent)
Home-inspection fees
Recording fee
Transfer taxes
Credit report
Appraisal fee
Calculating APRs on adjustable and balloon loans is even more complex because future rates are unknown. The result is even more confusion about how lenders calculate APRs.
Do not attempt to compare a 30-year loan with a 15-year loan using their respective APRs. A 15-year loan may have a lower interest rate, but could have a higher APR, since the loan fees are amortized over a shorter period of time.
Finally, many lenders do not even know what they include in their APR because they use software programs to compute their APRs. It is quite possible that the same lender with the same fees using two different software programs may arrive at two different APRs!
Conclusion : Use the APR as a starting point to compare loans. The APR is a result of a complex calculation and not clearly defined. There is no substitute to getting a good-faith estimate from each lender to compare costs. Remember to exclude those costs that are independent of the loan.
information provided from www.symphonymortgagecompany.com A site hosted by Myer's inc.
Monday, April 25, 2005
Answers to questions
I am here to answer questions regarding the lending industry. From time to time I am asked questions about loan products, appraisals, strategy and all facets of lending. I will use this space to provide some answers. Ask away, have fun.
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