Wells Fargo Clarifies Short Sale Criteria for Foreclosure Postponement

The National Association of Realtors (NAR) issued a notice this week explaining Wells Fargo’s new rules surrounding short sale transactions when a foreclosure is pending.

Earlier this month, Wells Fargo advised NAR that it has modified its existing guidelines to allow the postponement of a scheduled foreclosure in connection with a short sale, but only in limited situations. Please check my website at www.shortrefiusa.com

NAR explained that for loans owned by Wells Fargo, including those inherited with the bank’s Wachovia acquisition, as well as other loans serviced by Wells Fargo but owned by an investor, the policy allows for one fore-
closure postponement, but only if: (1) Wells Fargo has a short sale sales contract in hand that has been approved (including approvals from junior lien holders and mortgage insurers, if applicable), (2) the buyer has proof of funds or financing approved, and (3) the short sale can close within 30 days of the scheduled foreclosure sale. For alternante solutions please visit my website at www.shortrefiusa.com

However, Wells Fargo noted that not all investors allow for such postponements and stressed that in jurisdictions where the courts will not approve the delay, the postponement policy will not apply. Wells Fargo told NAR that it is willing to address situations that do not qualify under these guidelines on a case-by-case basis.

Last month, it was reported that Wells Fargo had stopped delaying foreclosures in order to allow distressed homeowners to complete short sales. But as NAR outlined, the foreclosure timeline can be pushed back for a short sale as long as Wells Fargo’s specified criteria are met.

NAR has been holding meetings with the nation’s four largest lenders, including Wells Fargo, to address concerns about their processes for short sales and REO disposition. The trade group’s talks with the banks are ongoing, but NAR has indicated that the discussions have been productive in fostering mutual success and support for a market recovery.

Wells Fargo has been approving Short Refinances call me for details. Contact Robert at (562) 673-1136

Homebuyer Credit Extension heads to Obama!!

NEW YORK (CNNMoney.com) -- First-time homebuyers will have until Sept. 30 to close on their purchases and land an $8,000 tax credit under a bill passed by the Senate late Wednesday.

President Obama is expected to sign the bill, which was overwhelmingly approved by the House on Tuesday. The deadline had been June 30.


The bill doesn't help anyone currently shopping for a home. Buyers must have signed a contract by April 30 to qualify for the tax break. At issue is when the deal must be finalized.

Qualified existing homeowners also have until Sept. 30 to close on new homes and receive a tax credit of up to $6,500.

Congress has been trying to pass the extension for the last month, but it got caught up in Washington politics. Only when it was separated from a larger jobs bill did deficit-wary lawmakers sign off on it. The extension will lower the deficit by $9 million over a decade since it is offset by certain other provisions.

An estimated 200,000 people have missed out on the tax credit because they wouldn't have been able to close by the end of business Wednesday. Many are trying to take advantage of short sales, which are complicated deals to complete.

The Senate approved the stand-alone homebuyers tax credit shortly after a failed attempt to advance a bill that combined the credit with an unemployment benefits extension.


Thanks for checking out my post, If you have any questions on the tax credit extension or questions about pruchasing a home please call me at 562-673-1136

Robert Vaughan
Affinity Lending Group

6 Biggest Mistakes Homebuyers Make!!

Buying a home is the biggest purchase most people will ever make, yet many go into it blind. Here are the 6 most common -- and costly -- mistakes homebuyers make.

1. Not knowing your credit score

If you're even toying with the idea of buying a home, you must find out exactly what your FICO score is. If you find it is less than ideal, wage a systematic campaign to raise it. Too many borrowers ignore this step and get surprised when they get interest rate quotes.
Once you've pored over your credit history and corrected any errors, your next step is to pay down revolving debt balances to no more than 30% usage. That will help raise your score significantly.

Why does it matter?

The lower your score, the higher your costs of borrowing. Fannie Mae and Freddie Mac, for example, charge higher up-front fees to borrowers with credit scores below 740.

For a buyer with a credit score between 680 and 700, the fee comes to 1.5% of the mortgage principal. On a $200,000 mortgage, that adds up to $3,000. Someone with a 740 score pays nothing.

Lower-score borrowers also get saddled with higher interest rates, about 0.4 percentage point more for the below 700 borrower. That costs an extra $62 a month -- $744 a year -- on a $200,000, 30-year, fixed rate loan.

2. Buying a car before a house

Anytime consumers open new credit accounts -- credit card, auto loan, etc. -- their FICO score could drop, according to Craig Watts, a spokesman for Fair Isaac, the creator of FICO scores.
"Hence the admonition to not open other new accounts while your mortgage application is in process," he said.

A big purchase would use up a considerable proportion of a borrower's total credit limit, which results in a drop in the score. Lenders often continue to check credit scores in the weeks before closing.

"The lender will likely slam on the brakes if the applicant's credit scores have suddenly dropped below the minimum required for the requested loan rate," Watts said.

3. Skimping on home inspection

Buying a pig in a poke can cost buyers big bucks -- just when they can least afford it. So It's vital to find all the costly flaws before you buy.
Many homes on the market today are distressed properties -- foreclosures and short sales -- and that only increases the importance of good inspections, according to David Tamny, president of the American Society of Home Inspectors.

"The owners usually didn't have the money to keep up these homes," he said. "There's a lot of deferred maintenance."

A home inspection can find problems with the foundation, electrical, plumbing, roof, attic insulation, and heating and air conditioning. In some states, separate licensed inspectors offer mold or termite inspections.

Often homebuyers, who may be strapped for cash, stint on inspections and look for the cheapest way to go. That can lead to disaster.

"The cost of repairs far exceeds the cost of inspection

4. No lawyer

Nearly everyone involved in a real estate transaction -- the seller, the buyer's real estate agent, the seller's agent and the mortgage broker -- has a vested interest in getting the deal done because they only get paid when the house is sold. So they may push a deal even if it's not in the best interest of the buyer.

One of the best defenses against making am expensive purchase you'll regret is to hire a real estate attorney -- even in cities where it's not standard practice. These professionals charge flat fees and their advice is objective.
It's nice to have someone on your side.

5. No contingencies

When signing a sales contract, buyers usually have to put up 1% to 3% in "earnest money," which they don't get back if they pull out of the deal except under certain conditions spelled out in the contract.
Sellers try to limit the grounds for canceling, and inexperienced buyers may sign contracts that don't include common exceptions, such as uncovering major problems during the home inspection, failing to obtain financing and failure of the house to appraise.

Failure to obtain financing is common these days because lenders have become very picky; underwriting is very strict.

Even if your mortgage company is still willing to finance your purchase, the house itself may be worth less than you've contracted to pay for it, and the lender will pull its approval.

With residential real estate markets still slow, sellers usually accept contingency clauses, but if they resist, it may be better to rethink the deal. Losing a deposit of $2,000 to $6,000 on a $200,000 home hurts.

6. Not budgeting for insurance

Don't underestimate insurance costs and fail to budget for them.

Many homebuyers don't understand just what is -- and what is not -- covered. Standard policies pay for theft and wind, fire, lightning, hail and explosion damage. Not covered is flooding, earthquake damage or problems caused by neglect of routine maintenance, according to Jeanne Salvatore, spokeswoman for the Insurance Information Institute, an industry-sponsored educational group.

"The most important thing is before you buy a home, find out what it will cost to insure it," she said. "Insurance needs to be calculated into the cost of owning a home. Unlike a mortgage, which you can pay off, you'll be responsible for the insurance costs forever."

For flood insurance, most buyers use the National Flood Insurance Program. Earthquake coverage may be available through a state authority or some private companies.

Depending on location, flood insurance can run into a lot of money. The cost of $250,000 worth of government flood coverage on the building and $100,000 of its contents can go as high as $5,714 in high-risk, coastal areas.

If you are thinking of buying or selling or you just have questions about the process. Please feel frr to contact me at (562) 673-1136

Robert Vaughan
Vice President
Affinity Lending Group
www.Shortrefiusa.com

Is the mortgage market starting to heal???

NEW YORK (CNNMoney.com) -- The mortgage market may have begun to turn: Fewer borrowers fell behind on their payments during the last three months of 2009.

A seasonally adjusted 9.47% of all mortgage loans were late during the fourth quarter, down from 9.64% at the end of September, according to the National Delinquency Survey, which is produced by the Mortgage Bankers Association and is considered the bible of the industry.


This figure is significant because it shows a reduction -- even if just slight -- in the volume of loans heading toward the foreclosure process. This has not happened since 2006.

"We are likely seeing the beginning of the end of the unprecedented wave of mortgage delinquencies and foreclosures that started with the subprime defaults in early 2007, continued with the meltdown of the California and Florida housing markets due to overbuilding and the weak loan underwriting that supported that overbuilding, and culminated with a recession that saw 8.5 million people lose their jobs," said Jay Brinkmann, the MBA's chief economist.

Of course, delinquency rates were still 1.59% higher than they were in the last quarter of 2008.

Foreclosures: Where does your state rank?
Brinkmann's main reason for optimism was a drop in the percentage of borrowers who had missed one mortgage payment. That rate fell quarter-over-quarter to 3.63% from 3.79%.

"The continued and sizable drop in the 30-day delinquency rate is a concrete sign that the end may be in sight," he said. "We normally see a large spike in short-term mortgage delinquencies at the end of the year due to heating bills, Christmas expenditures and other seasonal factors."

Another positive sign is a drop in the percentage of borrowers whose lenders had initiated foreclosures, the first step in the process of taking homes away from borrowers. That may be only temporary, though: Lenders have been holding back and the number of seriously delinquent loans not in foreclosure has ballooned.

As a result, loans 90-days late or more now account for half of all delinquencies calculated by the MBA, a record high and twice the category's share of delinquencies two years ago.

Landlord foreclosed. Do you have to go?
"The build-up in the 90-day bucket of loans that could end up in foreclosure should keep foreclosure rates elevated," said Brinkmann.

But the high number of borrowers in that category is also somewhat of a statistical glitch. Loans are remaining there much longer than they did in past years because of government and lender attempts at mortgage modifications.

Of all the delinquency hot spots, Florida is the worst hit with 26% of all mortgages in some kind of trouble.

The worst performing category of loans was subprime adjustable rate mortgages, with more than 42% being 90 days late or in foreclosure. That is nearly four times the rate of default during early 2007, when the mortgage meltdown was heating up.

The MBA report, according to Mike Larson, a real estate analyst for Weiss Research, is a further sign that the housing market is truly stabilizing.

"We're now seeing the next piece of the puzzle fall into place," he said. "Specifically, early stage delinquencies are stabilizing. This is a key sign that housing market conditions are slowly, grudgingly, getting slightly better."

One key trend is that home price declines, a key influence on delinquency rates and, especially, on foreclosures, halted their free-fall in 2009. The average home price in 20 major markets dropped only about 5% during the 12 months ended Nov. 30, according to the S&P/Case-Shiller home price index.

As prices stabilize, fewer mortgage borrowers will plunge underwater, owing more on their mortgage balances than their homes are worth. Homeowners with positive equity in their homes have an asset they can tap during temporary financial strains and are much less likely to fall behind on their mortgages


Thank you for checking out my blog. If you have any questions please dont hesitate to call me direct.

Robert Vaughan
Vice President
Affinity Lending Group
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FHA 90 Day Flip Rule Waived!!

FOR RELEASE
Friday
January 18, 2010

HUD TAKES ACTION TO SPEED RESALE OF FORECLOSED PROPERTIES TO NEW OWNERS
Measure to help bring stability to home values and accelerate sale of vacant properties

WASHINGTON - In an effort to stabilize home values and improve conditions in communities where foreclosure activity is high, HUD Secretary Shaun Donovan today announced a temporary policy that will expand access to FHA mortgage insurance and allow for the quick resale of foreclosed properties. The announcement is part of the Obama administration commitment to addressing foreclosure. Just yesterday, Secretary Donovan announced $2 billion in Neighborhood Stabilization Program grants to local communities and nonprofit housing developers to combat the effects of vacant and abandoned homes.

"As a result of the tightened credit market, FHA-insured mortgage financing is often the only means of financing available to potential homebuyers," said Donovan. "FHA has an unprecedented opportunity to fulfill its mission by helping many homebuyers find affordable housing while contributing to neighborhood stabilization."

With certain exceptions, FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. This temporary waiver will give FHA borrowers access to a broader array of recently foreclosed properties.

"This change in policy is temporary and will have very strict conditions and guidelines to assure that predatory practices are not allowed," Donovan said.

In today's market, FHA research finds that acquiring, rehabilitating and the reselling these properties to prospective homeowners often takes less than 90 days. Prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition adversely impacts the willingness of sellers to allow contracts from potential FHA buyers because they must consider holding costs and the risk of vandalism associated with allowing a property to sit vacant over a 90-day period of time.

The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. This will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.

"FHA borrowers, because of the restrictions we are now lifting, have often been shut out from buying affordable properties," said FHA Commissioner David H. Stevens. "This action will enable our borrowers, especially first-time buyers, to take advantage of this opportunity."

The waiver will take effect on February 1, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner. To protect FHA borrowers against predatory practices of "flipping" where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver is limited to those sales meeting the following general conditions:

•All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
•In cases in which the sales price of the property is 20 percent or more above the seller's acquisition cost, the waiver will only apply if the lender meets specific conditions.
•The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

Affinity Lending Group is here to help you with your questions please contact my office at (562) 685-8159

Thank you
Robert Vaughan
Vice President
www.shortrefiusa.com

Foreclosures Weigh On Home Appraisals

LOS ANGELES - It wasn't the first time that Katherine Scheri ruined a real estate agent's day with a low property appraisal.

Scheri, a real estate appraiser, had sized up a three-bedroom, two-bath house in Santa Ana, Calif., for $30,000 less than what the buyers offered to pay. A typical deal-killer for a seller.

The agent urged the lender to force Scheri to consider several other properties that could back up the original $310,000 sale price. Then he tried good old-fashioned guilt, telling Scheri her appraisal was going to ruin the buyers' shot at the American Dream.

"That's what he laid on me," Scheri recalled. "And I said, 'Don't you care they could be potentially spending $30,000 too much for a house?"

Across the country, agents and homebuilders are complaining too many appraisals are coming in low, scuttling deals.

The National Association of Realtors says nearly one in four of its members has reported clients losing a sale due to botched appraisals. The National Association of Home Builders, meanwhile, said low appraisals were sinking a quarter of all new home sales and argues it's not fair to compare distressed properties to brand-new homes.

And that gets to the heart of the problem.

Roughly 40 percent of all home sales this year were foreclosures or short sales, meaning the property sold for less than the mortgage. In some markets, like Las Vegas and Phoenix, they've hit more than 50 percent.

Appraisers determine the value of a property by looking at recent sales of comparable homes. They take an apples-to-apples approach, excluding or making adjustments for certain features, such as a swimming pool or finished basement. And generally, a foreclosure isn't used as a comparison for a standard sale.

But in some areas, appraisers like Scheri contend they are only sizing up homes according to the reality of the market, though they concede its becoming increasingly harder pinpoint what a home is worth.

Home prices in many large metro areas, including Los Angeles and San Diego, hit bottom earlier this year and are recovering, data last week showed. Yet there are many neighborhoods across the country where foreclosures and other financially distressed sales are still rising.

"It used to be a very infrequent thing that you did an appraisal and the value wasn't supported," says Scheri, who is based in San Diego. "Now, it's more common than not."

So, if you're trying to sell your home in a neighborhood where foreclosures and short sales are predominant, an appraiser could determine your home is actually worth less than what some buyers may be willing to pay.

Part of the problem, critics contend, is that many real estate appraisers are now hired under new industry rules. Designed to limit conflicts of interest that can bias an appraisal, the rules bar mortgage brokers from ordering appraisals themselves, forcing them to do so through a mortgage lender.

Lenders may order appraisals through in-house staff or appraisers hired by outside firms known as appraisal-management companies. But neither may talk to the appraisers about the value of the property they're evaluating.

The result, however, can mean that low-cost appraisers are hired from outside the area and don't have the local knowledge to find homes that can be a better benchmark for regular homes.

Chris Heller, agent-owner of Keller Williams Realty in northern San Diego, recently had the sale of a home nearly botched for the second time because of a low appraisal.

The three-bedroom, two-bath house in the Poway suburb of San Diego was appraised for $55,000 less than what the buyer agreed to pay. The seller wasn't willing to drop the price down to $400,000, but knocked off $20,000 when the buyer agreed to come up with $35,000 in cash.

"The seller is taking less because of the appraisal," Heller said, noting that almost all of the comparable homes used to gauge the property's value were distressed sales.

Still, the buyer is paying a premium not to have to deal with the risks involved in buying a foreclosed home or a short sale, which can take several months to close.

So, should distressed homes sales be compared with other homes? Is one inherently worth more than the other?

A new analysis of foreclosure and non-foreclosure sales by checking AffinityLendingGroup.com found that even when most of the market is made up of bank-owned homes, non-foreclosures sell for as much as 30 percent more. Another study by Harvard's Joint Center for Housing Studies came up with a similar conclusion.

Happy New Year from the entire Affinity Team. We are here to assist you with any questions you have about about your real estate needs. Visit our website www.shortrefiusa.com We Thank you for a great year 2009. We saved hundreds of homes facing foreclosure this past year and we gained a solid communications with all the major banks. If you have any questions please contact my office at (562) 685-8159 and ask for Robert.

Thank you,
Robert Vaughan
Vice President
Affinity Lending Group

Extreme Modifications: 2% mortgages Whuut The??

NEW YORK (CNNMoney.com) -- At 8 a.m., homeowner Rodney Wynn was drowning under his $1,800-per-month, 13.4% interest rate mortgage. But by 5 p.m., he had found some relief: a 4.7% loan with a $970 monthly payment.

Wynn, a program director for a youth home in North Carolina, is just one of a growing number of homeowners getting dream workouts on their mortgages. Some are even getting sweet 2% deals.

Nearly 80% of all loan modifications resulted in lower payments in the second quarter (the latest figures available), according to the Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision. That's up from just over 50% three months earlier. Still, just a paltry 4% of all homeowners in need of workouts are receiving them.

When loans are made affordable, borrowers are less likely to default. A year after modifications, according to the OCC report, just 34% of borrowers whose loan payments had been reduced 20% or more had redefaulted compared with 63% of borrowers whose payments had been left unchanged.

"We're hearing there's a lot more give from lenders," said Rick Sharga, a spokesman for RealtyTrac, the online marketer of foreclosed properties. "It often makes sense for the banks to take anything they can get."

Wynn was able to get his modification at a "Save the Dream" event offered by the Neighborhood Assistance Corporation of America (NACA) in New York City last Friday.

Lenders from nearly all the major banks and servicers were in attendance and promising to restructure loans based on what borrowers could afford. As a result, many homeowners walked in with their mortgage problems and walked out with solutions.

In fact, according to Bruce Marks, NACA's founder, 40% of attendees left with decisions the same day. About 80% are expected to receive workouts within weeks. His organization has already hosted about 400,000 borrowers at more than a dozen of these events.

5 who are contemplating walking away from their homes.
The most common restructuring seemed to be one that reduced interest rates to the minimum of 2% for the entire life of the loan. That's partially because NACA has agreements with all the top lenders to reduce interest rates to as low as 2% if that's what it takes to make loans affordable.

For example, Californians Steve and Elena Servi received a 2% fixed-rate loan from Wells Fargo that replaced the 6.75% adjustable rate mortgage on their Rowland Heights house.

"We had a jumbo loan and we thought no one would work with us," said Elena.

But it's in the bank's self interest to salvage deals -- even if it means slashing payments -- because the alternative, foreclosure, can cost them more.

"We're getting a lot of borrowers looking for a better interest rate," said Jason Ferebee, a Wells Fargo Community Relations exec who was supervising his company's operation at the NACA event.
Wells Fargo is participating in the Shorpay Refinance Program. Visit my website at www.shortrefiusa.com

He explained that his auditors send each applicant through a kind of flow chart, or "waterfall" as he called it, of possible fixes. It starts with seeing if they fit the guidelines for a Home Affordable Modification Program (HAMP) workout. If borrowers don't qualify, then the bank will go through a series of its own programs, ticking down the list to more radical cuts until they reach one that's affordable for the borrower.

At that point, the lender then decides whether it's more profitable to offer that workout or take the borrower to foreclosure. Most times these days, they try harder to make the modification work; foreclosures are simply too costly.

In the case of the Servis, their house had lost perhaps 40% of its value since they purchased it five years ago. Repossessing the home would have cost Wells Fargo more than $100,000 in lost value alone, plus the legal expenses, commissions, taxes and other expenses the bank would have incurred.

"I'd say we restructure loans for close to half the borrowers we see here," said Ferebee.

But wait, there's more
More severely stressed borrowers in many hard-hit areas have gotten even more radical deals. There are even some who are having their debts forgiven entirely.

"The interest rates they're offering [delinquent borrowers] are a lot lower than they used to be," said Tanya Davis, a foreclosure prevention counselor for Empowering and Strengthening Ohio's People (ESOP) in Cleveland. "They cut them to 0% for three years, then 2% for a year, then 4%, capping out at 5%. I have a case where they lowered the interest rate to zero for the entire life of the loan."

Lenders are very reluctant to repossess properties in the worst hit parts of cities such as Cleveland, according to Jim Rokakis, treasurer of Cuyahoga County, where Cleveland is located. "Rather than going to a sheriff's sale, some banks are just giving back the houses," he said.

Rosie Brooks, a retired hairdresser, has been paying off her house for more than 20 years, but it hasn't been easy since one of her daughters came down with leukemia 10 years ago.

"She was very sick and that cost me every dollar I had," she said. "I got behind."

She had paid $38,000 for the house and had refinanced the loan a couple of times. By last year, her mortgage balance was more than $42,000. She no longer works and is dependant on Social Security. The payments became impossible to afford.

Like most borrowers (Taking cash out through the refinance process for home improvements or bill consolidation was a big thing from 2002 through 2005

She contacted ESOP, and her counselor, Scott Rose, knew her lender was unusually sympathetic. Three weeks later, Rose was able to tell Brooks that he had gotten her a workout -- and it was a real dream.

The bank forgave her entire debt in exchange for a one-time payment of just $3,000, which Rose was able to obtain through a loan from the county's foreclosure-prevention program.

Why was Rose's bank so generous??

If you have any Questions please contact me at (562) 685 -8159

Thank you for Reading

Robert Vaughan
Vice President
Affinity Lending Group

Could FHA raise 3.5% minimum downpayment to 5%???

Homebuyers getting FHA loans too easily

While most lenders have tightened standards for down payments — usually requiring at least 10% down and 20% for the best rates — the Federal Housing Administration has continued to offer loans to borrowers putting down as little as 3.5%. On Thursday the House Financial Services Committee is considering whether to boost the minimum down payment requirement to 5%.

I think the move is overdue, especially since FHA mortgage defaults are at a record high and the agency's reserve fund is at a record low. As a soon-to-be homebuyer myself, I appreciate how hard it is to save money for a down payment. And I recognize that increasing the down payment requirement from 3.5% to 5% will mean that some people may have to put off home ownership in order to save a bit longer. What I don't realize is what's so wrong with that. Getting a home for 5% down is still pretty good deal in my book.

On a $178,000 home (the median in the third quarter, according to the National Association of Realtors), the down payment under the new rules would increase $2,670, from $6,230 to $8,900. That's no small sum, but in the grand scheme of purchasing a home it's not wildly unrealistic, especially for first-time homebuyers (more than half of whom use FHA loans) who will get an $8,000 housewarming gift from the federal government courtesy of the first-time homebuyer tax credit.

One lesson of the foreclosure crisis is that buyers with little of their own cash invested in their homes are more likely to walk away from them, and critics are already making comparisons between the FHA and subprime lenders. Increasing down payment requirements is one way the FHA could prove them wrong.

If you have any questions about what the banks are doing for payment solutions to your mortgage please contact me if you need any assistance.

Robert Vaughan
Affinity Lending Group
www.shortrefiusa.com

Avoid Foreclosure: Rent your own Home!!

Fannie Mae implements deed-for-lease program that allows troubled borrowers who don't qualify for loan modifications to stay in their homes.

NEW YORK (CNNMoney.com) -- Giving troubled borrowers yet another way to avoid foreclosure, Fannie Mae said on Thursday it would allow eligible homeowners to rent their own homes.

The Deed for Lease program lets homeowners transfer the deed back to their lender and then sign a lease to remain in the home. The effort is aimed at borrowers with mortgages owned or guaranteed by Fannie Mae who do not qualify for or cannot sustain a loan modification. Borrowers must live in the home as their primary residence and must be released from any subordinate liens.

The program aims to reduce the number of foreclosed properties being abandoned because they often fall into disrepair and hurt the surrounding homes' values. Also, it keeps a roof over troubled borrowers' heads and a steady stream of income coming from the property. Tenants of homeowners may also be eligible for leases.

"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," said Jay Ryan, vice president of Fannie Mae, a mortgage-guarantee firm under federal government control.

Homeowners must show they can afford market rent, but that payment cannot be more than 31% of the borrower's pre-tax income. Leases may be up to 12 months, with the possibility of renewal or month-to-month extensions. If the property is sold, the new owner picks up the lease.

"It really buys them time," said Paul Habibi, real estate professor at UCLA's Anderson School of Management.

Stopping foreclosures
But in the long-run the program only delays the inevitable sale of the distressed properties.

While this initiative is not part of the Obama administration's loan modification program, the White House is leaning heavily on Fannie Mae and its sister firm, Freddie Mac, to assist in stemming the foreclosure crisis.

Freddie Mac launched a program in January that allowed borrowers to stay in their homes on a month-to-month basis after they go through foreclosure.

Despite the government and financial industry initiatives, foreclosures hit an all-time high in the third quarter. During that time, 937,840 homes received a foreclosure letter -- whether a default notice, auction notice or bank repossession, according to RealtyTrac.

Last month, Treasury officials announced that 500,000 troubled borrowers have been put into trial modifications under the president's plan. The program calls for eligible homeowners to pay no more than 31% of their pre-tax income toward their mortgages.

At the same time as it tries to ramp up its loan modification program, the administration is looking for ways to help those not eligible for adjustments. In May, officials unveiled a program to incent borrowers and loan servicers to participate in short sales and deeds in lieu. Under that initiative, borrowers get up to $1,500 to assist with relocation expenses and Treasury pays servicers $1,000 when the deal is completed.

Short sales, in which the home is sold for less than the mortgage balance and loan servicers may forgive the difference, and deeds in lieu, in which borrowers voluntarily forfeit the deed and the debt may be erased, are faster and cheaper than foreclosure.

If you have any questions about new programs or solutions to stop foreclosure please contact Robert Vaughan at 562-673-1136

$8,000 Tax Credit to BUY a Home still in Play!!

NEW YORK (CNNMoney.com) -- Confused about whether lawmakers will extend the $8,000 first-time homebuyer credit and what it would look like?


Negotiations about whether and how to extend and expand the tax credit for homebuyers are moving quickly. Here are the latest developments.

That's understandable, since the situation is still very fluid.
Here's where things stand!!

Support for the credit: There is still bipartisan support in Congress for extending the credit past Nov. 30 and making it available to more homebuyers.

Some of the issues still in play: Just how far past Nov. 30, the size of credit and how many more buyers would qualify.

It's still not clear where President Obama stands on the issue. Last week, Housing Secretary Shaun Donovan said the administration wanted to review more data to better assess the cost of the credit before weighing in.

What's on the table now: There appears to be movement toward a compromise deal that falls between the most and least generous proposals that have been put forth so far.

"There is bipartisan compromise to extend the credit through spring and expand it to existing homeowners who are stepping up to a different home," financial policy analyst Jaret Seiberg wrote in a research note for Concept Capital's Research Group.

The latest idea under discussion is a credit worth up to $8,000 for first-time homebuyers and up to $6,500 for homeowners looking to trade up to a bigger primary residence and who have already lived in their current home for five years. (CNN: Senate compromise may be in the works.)

To qualify for the full credit, however, homebuyers must have adjusted gross income of less than $125,000 ($225,000 for married couples filing jointly).

In addition, the credit would only apply to homes sold for $800,000 or less. Contracts to buy a home must be signed by April 30, 2010, and the deals must close by June 30 in order for a buyer to qualify for the credit.

Rationale for extending the credit: Supporters of the credit say it has helped to boost existing home sales in recent months. Extending the credit would help further support sales, stabilize housing prices and generate jobs in the face of an expected rise in foreclosures next year, which is expected to put downward pressure on prices.

If the credit is allowed to expire, they say, the housing market and the broader economy will grow moribund again.

"The most fundamental argument for the credit is that nothing works in the economy if housing is falling -- it hurts household wealth and credit becomes tight," said Mark Zandi, chief economist at Moody's Economy.com. "[The credit] is a good insurance policy. It's vital to stem the housing price declines."

What critics say: Though extending the credit has bipartisan support, it is not without its critics.

Critics, while acknowledging that the credit has helped to generate additional home sales, say it has been poorly targeted and therefore not cost-effective.

They point to estimates that only 10% to 20% of the nearly 2 million homebuyers who will have gotten the credit by Nov. 30 bought solely because of the tax break.

In other words, a large majority of homebuyers who benefited from the credit would have bought their homes without it.

By one economist's estimate, the government may have spent $43,000 for each sale that occurred strictly because of the credit.

In a position paper published this week, the liberal Center on Budget and Policy Priorities said making the credit available to existing homeowners would not help stabilize housing prices or reduce inventory

If you have any questions about purchasing a home or how you can benifit from this tax credit please contact Robert at (562) 673-1136. Thank you

500 Helped by Obama Mortgage Rescue!

The administration reaches its goal a few weeks early. But it remains to be seen how many of these trial modifications will work.

NEW YORK (CNNMoney.com) -- Loan servicing companies have put 500,000 troubled borrowers into trial mortgage modifications, the Obama administration said Thursday.

The administration set that target in late July after it came under fire for not helping homeowners fast enough. http://shortrefiusa.com/

Officials have increased the pressure on servicers to speed up their implementation of the president's foreclosure prevention plan, which calls for reducing eligible borrowers' monthly payments to no more than 31% of their pre-tax income. Servicers had until Nov. 1 to hit the half-a-million mark.

The administration also released a related report Thursday showing that 16% of eligible troubled borrowers at least 60 days delinquent were placed into trial modifications as of the end of September. This is up from 12% a month earlier.

Consumer advocates have said that the president's initiative has prompted servicers to help more people than ever before. But, there is still a long way to go.

The administration's efforts are only "chipping away" at the problem, said Barry Zigas, director of housing policy for the Consumer Federation of America

"It's very, very frustrating that so many borrowers are on track to lose their homes," Zigas said. Thursday's report "is not a cause to rest."

President Obama announced the $75 billion initiative in February and the first institutions to join began accepting applications in April. http://shortrefiusa.com/

The plan, which was projected to help up to 4 million homeowners, puts qualified borrowers into three-month trial modifications before the adjustment is made final. Servicers, borrowers and investors can get financial incentives to participate.

Servicers' performance, however, remains very uneven. Short Payoff Refinance http://shortrefiusa.com/

Saxon Mortgage Services once again led the pack with 41% of eligible delinquent borrowers in trial modifications, while Citigroup (C, Fortune 500) and Aurora Loan Servicers following at 33%. JPMorgan Chase (JPM, Fortune 500) has put 27% of its clients into trial modifications, while Wells Fargo (WFC, Fortune 500) has placed 20% and Bank of America (BAC, Fortune 500) 11%.

Several servicers, including many of the largest banks, have made great strides in recent months. Wells Fargo, for instance, had helped only 6% of eligible borrowers by the end of July. The bank's numbers rose after it started putting people into the trial modifications before collecting all the documentation, a practice which many of its peers do.

Administration officials met with servicers Thursday afternoon to press for further improvements in their modification efforts and responsiveness to borrowers. Many people have complained that financial institutions lose their paperwork, transfer them repeatedly between departments and require that they fill out applications again and again.

Permanent modifications
Though the housing market is showing signs of stabilizing in some locations, the foreclosure crisis continues to plague the nation. The president's plan has been credited with reducing the number of homes falling into foreclosure, but some experts worry that the modifications will only delay many inevitable defaults.

Many banks put delinquent homeowners into the trial modifications as long as they meet the basic criteria, such as having a first mortgage of less than $729,750 and living in the home as their primary residence. During the three-month trial, banks gather detailed income documentation and determine whether they'll recover more money by foreclosing on the home or by offering a permanent modification.

Banks, however, say they are having trouble obtaining the needed paperwork from borrowers, said Zigas. http://shortrefiusa.com/

Borrowers, meanwhile, must make timely payments during the trial.

The industry is now waiting to see how many borrowers in trial modifications will qualify for permanent adjustments. Banks said they have yet to compile how many people were ultimately denied permanent modifications.

If you have any questions please contact Robert Vaughan (562) 673-1136

Frustrations Rises over Mortgage Relief Program!!

After months of dead ends, rejections and runarounds from bank representatives, Dan Binder is still in loan modification limbo.

When Binder lost his job as a media researcher, he and his wife left their southern California home in July 2008 and relocated to North Carolina where he found a new job in the media business.

Since then, he’s never missed a payment on the three-bedroom home in Riverside County, Calif., he said, though it's lost about half its value since he bought it in 2005 for $418,000. When his wife lost her job after the move, he called his lender, Wells Fargo, to see if the bank could rewrite the loan to lower the monthly payments. Short Payoff Refinance

Since then, he said, he’s gotten conflicting responses from multiple bank representatives, one of whom said he was days away from a new loan that was subsequently rejected.

At one point, after assurances that he submitted all the appropriate paperwork, he was told a form was missing. When he provided it, he was told the remaining paperwork was more than 30 days old and he would have to update and resubmit each document. At another point, he said, he was told his file showed a sizable credit card debt he didn’t owe.

After his latest rejection he asked for an explanation.

“They said the notes from the investors (holding the mortgage) said, ‘You spend too much on food,’ ” he said.

If all this sounds familiar, it's because homeowners around the country have been jumping through similar hoops with the same fruitless results.

Nearly two years after the federal government’s first program to slow the relentless rise in the pace of home foreclosures, the latest attempt, known as Making Home Affordable, is turning out to be another painful disappointment for millions of Americans at risk of losing their homes.

Dozens of e-mails from msnbc.com readers report months of futile effort to modify their loans. The list of problems includes misdirected calls, lost paperwork and conflicting advice from multiple representatives for the same lender.

A Wells Fargo spokeswoman said the company can't comment on individual customer's loans due to privacy restrictions. But she said the company is "working with all of its customers who experience hardships and need assistance with their mortgage payments up the point of actual foreclosure sale.” Short Payoff Refinance

“As the government guidelines have changed and as we have gotten more options to help people, there has been some communication confusion that we are working to absolutely get on top of and correct for customers,” she said.

HUD-approved housing counselors — the frontline professionals trying to help borrowers modify mortgages — have expressed frustrations with a variety of roadblocks, bureaucratic snafus and ongoing confusion about the program.

If you need any Advice, Affinity Lending Group is here to help assist you any way we can. Please contact Robert (562)673-1136

Life after the "F" word Foreclosure

After losing their homes, these 4 families thought they'd never recover. They've found it difficult to rent and their credit is wrecked, but life is looking up.

City: Chicago
Price paid: $245,000
Current value: 175,000
Lesson: "My only regret is that ... we signed a contract and then we couldn't fulfill that contract."

Stephanie Thomson's troubles began when her husband Rich, a highly regarded hair designer, became disabled with neuropathy and could no longer work.

The income loss made it impossible for the couple to sustain the payments on their home in a Chicago suburb.

When they bought the house, they took out a hybrid ARM mortgage. The original bill was $1,400 a month. But it went to $1,900 after three years and more than $2,000 after the second reset six months later.

"With my husband unable to work, we could have paid the mortgage without the ARM reset but nothing more," says Stephanie, who tried for months to get help from her lender. (Robert wants to point out tried for months to get help from her lender) If you find yourself in this position please contact Robert Vaughan with Affinity Lending Group at (562) 673-1136

"They told me they would pray for me. That's an exact quote," she says.

The Thomsons decided to stop paying their mortgage last July -- their first time missing a payment. They didn't pay for 10 months, during which time YouWalkAway.com helped guide them through the foreclosure process.

In April, having saved what they would have paid in mortgage, they relocated to Elyria, Ohio, where Stephanie has relatives. Unfortunately, their credit scores had dropped so low that it was difficult to rent -- much less buy -- a new place. So Stephanie's mom bought a house and rents it to them.

"It's less expensive here; we were able to get a larger house in a wonderful neighborhood," she says. "My only regret is that I'm a proud person. We signed a contract and then we couldn't fulfill that contract because of my husband's illness. It was very difficult."

http://www.youtube.com/watch?v=WY7MToO1fdM
Lori DiBacco
Lori and Bill DiBacco

• Big cities: Big changes in foreclosure rates
City: Oceanside, Calif.
Price paid: $610,000
Current value: $550,000
Lesson: "It was so horrible, the worst stress we'd ever been under."
Apparel sales rep Lori DiBacco and her musician husband, Bill, were living a dream life in their five-bed, three-bath home with pool in beautiful Oceanside, Calif. They bought the place in 1994, and they lived well, but not wisely.

"We took great vacations, if we saw something we wanted we bought it," says Lori.

The couple was childless by choice, as they both traveled for work. Then, five years ago, their goddaughter came to live with them. That radically altered everything.

Bill stopped working so someone would be home, which halved the couple's income. Then, there were big expenses for taking care of the child.

"She needed a lot of extra care," Lori says. "We put a lot of money into her education, dropping $50,000 the first year into Sylvan Learning Center for remedial work."

The coup-de-grace happened when Lori injured her back and couldn't work.

They burned through their savings and took out a second loan on the house. Their monthly mortgage bill, about $1,400 when they first bought the house, ballooned to $4,400. They started missing payments; they simply didn't have the money. They went nine months without paying.

"Oh my God, it was so horrible, the worst stress we'd ever been under," Lori says. "It sent my husband over the edge to a nervous breakdown."

By the time they were done, they owed $610,000 on a property that was worth just $550,000 when they did a short sale last year. (This would have been a good shortpay refinance if they kept current on the mortgage payments.
http://www.shortpayrefinanceusa.com/loan_modification_OC.html
Things are much better now. Bill runs a business restoring classic Mustangs, and Lori started a pet concierge business, which arranges everything for the pampered pet. She calls working with animals her dream job.

Their finances are still tattered. They were turned down for several places they tried to rent. They're living in a condo owned by Bill's mom, paying a small rent but fixing the place up. Lori loves the new place; it's in a quiet 55-plus community with very nice neighbors, most of whom have pets.

"We almost divorced many times over the stress of the financial burden and all that entailed," Lori says.
http://www.youtube.com/watch?v=WY7MToO1fdM

City: Carlsbad, Calif.
Price paid: $840,000
Current value: $600,000
Lesson: "Nothing was lost but a big, freaking headache."
This California resident bought his house nine years ago in a gated community within the posh, seaside city of Carlsbad. He took out an adjustable rate mortgage to keep the initial monthly payments affordable, but by this spring his monthly mortgage bill was $5,600.

At the same time, he found himself severely underwater thanks to falling home prices and several cash-out refinances.

The headhunter and motivational speaker couldn't afford that big a payment and realized he wasn't likely to make back nearly a quarter-million dollars in value. He tried for months to work something out with his lender, but he says, "They made me an offer that was unacceptable."

Instead, Nash, who is married with two kids, decided to go through the foreclosure process. He didn't pay the mortgage for 18 months and finally vacated in June. Not having a housing payment during that time kept him from financial ruin since his headhunting business was in a tailspin.

Nash and his family are now living in a $1,900-a-month rented townhouse in the same great neighborhood just a half mile away from their former home. "I downsized about 1,000 square feet to a 1,500-square-foot home," he says. "Hey! It's a lot easier to clean."

He feels like he landed on his feet in just about every way: His kids were able to stay in the same school; he stayed in the same location, which is like living in a beach resort; and he's spending a lot less on housing. "Nothing was lost but a big, freaking headache," he says.

Still, he counts himself lucky that he was able to find the new place. Most large-scale commercial property complexes wouldn't rent to him because his credit was so tattered, but he found a woman who had just lost her job and needed to leave her townhouse on short notice. He had just received a big check for a head-hunting transaction he had just closed so he got the place.
http://www.youtube.com/watch?v=WY7MToO1fdM

If you or anyone you know is facing a hardship, Affinity Lending Group has a mortgage solution. We have a the experience with many banks over the years please contact me if your thinking of selling or you want to save your home from foreclosure. Take care and God Bless.

The credit for this stories goes to Les Christie, CNNMoney.com



Robert Vaughan
Affinity Lending Group
(562) 673-1136

Mortgage Modifications Moving at Snail’s Pace!! Shortpay's Are Up!!

Bank of America, Wells Fargo get low marks on plan to help homeowners

WASHINGTON - The government's $50 billion program to ease the mortgage crisis is helping only a tiny fraction of struggling homeowners, and a list released Tuesday showed which lenders are laggards.

As of July, only 9 percent of eligible borrowers had seen their mortgage payments reduced with modified loans. And the first monthly progress report showed that 10 lenders had not changed a single mortgage.

The report indicated that lenders such as Bank of America Corp. and Wells Fargo and Co. have lagged behind government expectations. Both banks received billions in federal bailout money.

BofA modified just 4 percent of eligible loans, and Wells Fargo 6 percent. Wachovia Corp., which was taken over by Wells Fargo in December, modified only 2 percent.

"We think they could have ramped up better, faster, more consistently and done a better job serving borrowers and bringing stabilization to the broader mortgage markets and economy," said Michael Barr, the Treasury Department's assistant secretary for financial institutions. "We expect them to do more."

Wells Fargo says it plans to speed up its efforts, signing up most borrowers for the Obama plan with one phone call and sending customers a trial offer within two days.

If your loan is with Wells Fargo please contact me as soon as possible to see what Shortpay Refinnance Solution will do to your mortgage.

The report is "only part of the story" because the numbers do not reflect an additional 220,000 loans that Wells modified outside the Obama plan this year, a company executive said.

BofA said it would improve its "processes for reaching those in need" and continue working with the Treasury Department to help homeowners who fall outside the program's eligibility requirements.

We have good results with BofA please contact me at the information listed below

Increase in foreclosures
Meanwhile, foreclosures continue to rise. About 1.5 million households received at least one foreclosure-related notice in the first half of this year, according to RealtyTrac Inc.

"There are certainly more foreclosures going on in the country then there are modifications — by a long shot," said Bruce Dorpalen, director of housing counseling at Acorn Housing, a nonprofit housing group. He said his group has intervened to prevent about 500 foreclosure sales in cases where borrowers wanted to be considered for the Obama plan.

A housing counselor told 36-year-old Veronica Cassella she should qualify for a loan modification, but Green Tree Servicing LLC claims she does not. Cassella, who works at a hair and nails salon in Visalia, Calif., has seen her income shrink with the economy from $35,000 to $25,000.

Her husband still works, but their income is not enough to cover the $213,000 mortgage on their home, which has lost roughly half its value.

"My life has been a standstill with these people for at least half the year," Cassella said. Green Tree, which modified 4 percent of eligible loans, did not return calls for comment.

There are 38 companies participating in the government program, and some noticeable holdouts that control 15 percent of outstanding mortgages.

HomEq Servicing, owned by Barclays PLC, and Litton Loan Servicing, owned by Goldman Sachs, have yet to join. Spokesmen for both companies said they plan to do so soon.

Government partly to blame
So far, banks have extended only 400,000 offers among 2.7 million eligible borrowers who are more than two months behind on their payments. More than 235,000 of those borrowers have enrolled in three-month trials.

But the government is partly to blame for the languid start. The administration rolled out the guidelines gradually this year. Much of the program was not finished until mid-May, and the guidelines were updated again in early July.

The White House maintains it is on track to meet its goal of helping up to 4 million homeowners by 2012. Last week, the administration extracted a verbal promise from the mortgage industry to reach 500,000 borrowers by Nov. 1.

American Home Mortgage Servicing and PNC Financial Services Group Inc. were among the companies that had a zero next to their names on Tuesday's report.

In a statement, American Home Mortgage Servicing explained that it did not join the program until July 22 but had modified nearly 37,000 loans in the first six months of 2009.

David M. Friedman, president and CEO, said executives expect to help 60,000 customers, or about 40 percent of the company's eligible delinquent borrowers.

PNC, which owns National City Bank, began the process in early July.

If you know anyone that is upside down on the mortgage but they are current with there monthly payments call me to see if your lender is participating.

Robert Vaughan
Vice President
Affinity Lending Group
(562)673-1136

Are You Eligible??

Are you are among the 7 to 9 million homeowners who may be able to benefit from Making Home Affordable.

HUD SECRETARY DONOVAN ANNOUNCES EXPANDED ELIGIBILITY FOR MAKING HOME AFFORDABLE REFINANCING
Announces eligibility for borrowers up to 125% underwater in Las Vegas with Senate Majority Leader Harry Reid and Congresswoman Dina Titus
WASHINGTON - U.S. Housing and Urban Development Secretary Shaun Donovan today announced an expansion of the Obama Administration's Home Affordable Refinance Program to include participation by borrowers who are current but up to 125 percent underwater on their mortgage. Under authorization provided by the Federal Housing Finance Agency, borrowers whose mortgages are currently owned or guaranteed by Fannie Mae and Freddie Mac will now be allowed to refinance those loans according to the terms of the Home Affordable Refinance program established earlier this year.

Secretary Donovan made the announcement while touring a neighborhood in Las Vegas with Senate Majority Leader Harry Reid (D-NV) and Congresswoman Dina Titus. Las Vegas leads the nation in foreclosures and approximately 67 percent of the current mortgage holders have mortgages that are higher than the worth of their homes.

"I am here in Las Vegas because it is ground zero of the foreclosure crisis," Secretary Donovan said. "I am pleased to join Senator Reid and Congresswoman Titus to make this announcement today, which I believe will make a critical difference in our ability to help many more Americans, particularly those here in Nevada, to stay in their homes. The president's Making Home Affordable plan is already helping far more families than any previous foreclosure initiative and with today's announcement we will extend its reach still further."

"I am pleased Secretary Donovan accepted my invitation to come to Nevada and see firsthand the challenges homeowners here are facing," Senator Reid said. "His announcement that the loan-to-value requirement for the Administration's refinance program has been raised to 125 percent is good news for Nevadans fighting to stay in their homes. The neighborhood we visited today represents the hardships caused by the housing crisis and the hope that is being restored through the neighborhood stabilization program and the Home Affordable refinance program."

"I am pleased to welcome Secretary Donovan to Las Vegas and thank him for coming. This is an opportunity to show him firsthand the magnitude of the foreclosure crisis in Southern Nevada," Congresswoman Titus said. "His announcement that the Making Home Affordable program will be expanded to help those further underwater, something I have advocated for, is welcome news that will help thousands of Nevadans stay in their home. I will continue working with Senator Reid, Secretary Donovan, and the rest of the Administration to find more ways to help the hardest hit areas like Southern Nevada, as every new foreclosure prolongs the housing crisis and hampers our country's ability to move out of the current recession."

"This decision is part of our ongoing efforts to maximize the effectiveness of the Making Home Affordable program and adapt to an ever-changing housing market," said Treasury Secretary Tim Geithner. "By expanding refinance eligibility, we can bring relief to more struggling homeowners more quickly. It's a crucial step in our broader efforts to get America's housing market and economy on the path to recovery."

Currently, only those borrowers whose first mortgage does not exceed 105 percent of the current market value of the property are eligible for the Obama Administration's Home Affordable Refinance Program. For example if the property is worth $200,000, the borrower must owe $210,000 or less. Today's announcement will allow more homeowners to become eligible for the program, by increasing the eligibility to 125 percent.

Making Home Affordable, a comprehensive plan to stabilize the U.S. housing market, was first announced by the Administration on February 18. In just a few months, more than 200,000 borrowers have received offers for trial loan modifications, tens of thousands of refinances and trial modifications are under way, and informational mailings about the program have been sent to more than one million borrowers who may be eligible.

Donovan toured a neighborhood that has experienced several foreclosures in recent years, negatively impacting the property values of surrounding homes. The neighborhood has been targeted for Clark County's Neighborhood Stabilization Program, which will use funds to purchase and rehab foreclosed homes, provide downpayment and closing cost assistance to those purchasing foreclosed homes, and provide housing counseling to potential buyers.

If you have any questions please contact me. Thank you so much for the continued support.

Robert Vaughan
Vice President
562-673-1136

Making Home Affordable Program allows you to Refi 105% of a homes value!!

So you want to refinance your house, but it's not worth enough for you to get a good loan in the current market? A new Obama administration program is designed to fix that problem for Millions of homeowners.

Through June 2010 borrowers whose loans are owned or guaranteed by Fannie or Freddie may be able to get quick refinance for up to 105% of a homes value. They must be current on their mortgage payments, but administration officials estimate that as many as 5 million homeowners qualify. Refinance are available for borrowers with credit score as low as 620

This is going to create a real opportunity for millions of people to save money on their mortgages or replace an adjustable-rate mortgage with a fixed rate, "Freddie Mac spokesman Brad German said. The impatient can go to http://makinghomeaffordable.gov a federal website that explains the refinance program. For others please contact Robert Vaughan with Affinity Lending Group.

Thank you,

Robert Vaughan
Vice President
Affinity Lending Group

Mortgage Rates Climb!! Dont Miss this Boat!!

Treasury yields on a tear help pull rates higher; 30-year fixed mortgage jumps to 5.95%.

NEW YORK (CNNMoney.com) -- Home mortgage rates jumped in the most recent week, pulled higher by skyrocketing Treasury yields.

The average 30-year fixed rate soared to 5.95% from 5.45% last week, according to a weekly national survey from Bankrate.com.

The 30-year rate is often influenced by the benchmark 10-year bond's yield, which has increased steadily to hover around 4% recently. The yield was 2% just six months ago. Investors worry that this has re-ignited inflation fears and threatens the potential for economic recovery.

In an effort to cap mortgage rates, the Federal Reserve in March revealed a campaign to buy back $300 billion in Treasurys in hopes that it will spark demand and keep yields -- and therefore, mortgage rates -- in check.

Mortgage rates fell as refinancings abounded. But those benefits seem to have worn off, as rates have been on a tear in recent weeks.

Although mortgage rates continue to rise, they remain much lower than last year, when the average 30-year fixed mortgage rate was 6.48%.

Adjustable-rate mortgages: Those rising rates have made it difficult for many homeowners to refinance, but ARMs are an option, the Bankrate report noted.

Adjustable-rate mortgages were higher last week, with the average 1-year ARM rising to 5.16% and the 5-year ARM jumping to 5.49%.

"Bankers say ARMs got a bad rap in the mortgage debacle," the report continued, adding that the riskiest loans in the housing bubble --"subprime, low down payment, interest-only, negative amortizing and stated income" -- tended to be adjustable-rate mortgages.

But the meltdown happened "because those loan features were layered on top of ARMs," the report said, meaning that it was not the adjustable rates that caused people to default. Rather, home buyers put no money down and "exaggerated their earnings when they applied for stated-income loans."

A few months ago, only about 1% of mortgage applications were for ARMs. Last week, it was 3.4%, the report added.

Other rates: The average 15-year fixed rate mortgage jumped to 5.37% from 5.06% the week prior.

The average jumbo 30-year fixed rate ticked up to 6.96% from 6.68%. Loans are considered "jumbo" when they are too large to be purchased or guaranteed by Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500). They carry higher rates than smaller "conforming" loans, which do have guarantees.

Have you applied for a loan modification or refinancing under the Obama administration plan? Did you run into roadbloacks or were you able to get a lower monthly payment and avoid foreclosure? We want to hear your experiences. E-mail your story to AffinityLendingGroup@Gmail.com Attn Robert Vaughan


Robert Vaughan
Vice President
(562) 673-1136

URGENT FIRST TIME BUYERS!! ROB HAS GREAT NEWS!!

Home buyer tax credit can be applied to purchase costs

U.S. Dept. of Housing and Urban Development (HUD) Secretary Shaun Donovan
recently announced that the Federal Housing Administration (FHA) will allow home
buyers to apply the administration's new $8,000 first-time home buyer tax credit
toward the purchase costs of a FHA-insured home. The American Recovery and
Reinvestment Act of 2009 offers home buyers a tax credit of up to $8,000 for
purchasing their first home. Families can only access this credit after filing their tax returns with the IRS.

Home buyers using FHA-approved lenders can apply the tax
credit to their down payment in excess of 3.5 percent of appraised value or their
closing costs, which can help achieve a lower interest rate.
Currently, borrowers applying for an FHA-insured mortgage are required to make a
minimum 3.5 percent down payment on the purchase of their home. Current law
does not permit approved lenders to monetize the tax credit to meet the required 3.5
percent minimum down payment, but, under the terms of the announcement,
lenders can now monetize the tax credit for use as additional down payment, or for
other closing costs, which can help achieve a lower interest rate.
First-Time Home Buyer Tax Credit
Frequently Asked Questions About the Home Buyer Tax Credit
The American Recovery and Reinvestment Act of 2009 authorizes a tax credit of up to
$8,000 for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009.

The following questions and answers provide basic information about the tax credit. Ifyou have more specific questions, we strongly encourage you to consult a qualified tax advisor or legal professional about your unique situation.

1. Who is eligible to claim the tax credit?
First-time home buyers purchasing any kind of home—new or resale—are
eligible for the tax credit. To qualify for the tax credit, a home purchase must
occur on or after January 1, 2009 and before December 1, 2009. For the
purposes of the tax credit, the purchase date is the date when closing occurs
and the title to the property transfers to the home owner.

2. What is the definition of a first-time home buyer?
The law defines "first-time home buyer" as a buyer who has not owned a
principal residence during the three-year period prior to the purchase. For
married taxpayers, the law tests the homeownership history of both the home
buyer and his/her spouse.

For example, if you have not owned a home in the past three years but your
spouse has owned a principal residence, neither you nor your spouse qualifies
for the first-time home buyer tax credit. However, unmarried joint purchasers
may allocate the credit amount to any buyer who qualifies as a first-time
buyer, such as may occur if a parent jointly purchases a home with a son or
daughter. Ownership of a vacation home or rental property not used as a
principal residence does not disqualify a buyer as a first-time home buyer.

3. How is the amount of the tax credit determined?
The tax credit is equal to 10 percent of the home’s purchase price up to a
maximum of $8,000.

4. Are there any income limits for claiming the tax credit?
Yes. The income limit for single taxpayers is $75,000; the limit is $150,000
for married taxpayers filing a joint return. The tax credit amount is reduced for
buyers with a modified adjusted gross income (MAGI) of more than $75,000
for single taxpayers and $150,000 for married taxpayers filing a joint return.
The phaseout range for the tax credit program is equal to $20,000. That is, the
tax credit amount is reduced to zero for taxpayers with MAGI of more than
$95,000 (single) or $170,000 (married) and is reduced proportionally for
taxpayers with MAGIs between these amounts.

5. What is "modified adjusted gross income"?
Modified adjusted gross income or MAGI is defined by the IRS. To find it, a
taxpayer must first determine "adjusted gross income" or AGI. AGI is total
income for a year minus certain deductions (known as "adjustments" or
"above-the-line deductions"), but before itemized deductions from Schedule A
or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the
last number on page 1 and first number on page 2 of the form. For Form 1040-
EZ, AGI appears on line 4 (as of 2007). Note that AGI includes all forms of
income including wages, salaries, interest income, dividends and capital gains.
To determine modified adjusted gross income (MAGI), add to AGI certain
amounts of foreign-earned income. See IRS Form 5405 for more details.

6. If my modified adjusted gross income (MAGI) is above the limit, do I
qualify for any tax credit?
Possibly. It depends on your income. Partial credits of less than $8,000 are
available for some taxpayers whose MAGI exceeds the phaseout limits.

7. Can you give me an example of how the partial tax credit is determined?
Just as an example, assume that a married couple has a modified adjusted
gross income of $160,000. The applicable phaseout to qualify for the tax
credit is $150,000, and the couple is $10,000 over this amount. Dividing
$10,000 by the phaseout range of $20,000 yields 0.5. When you subtract 0.5
from 1.0, the result is 0.5. To determine the amount of the partial first-time
home buyer tax credit that is available to this couple, multiply $8,000 by 0.5.
The result is $4,000.

Here’s another example: assume that an individual home buyer has a modified
adjusted gross income of $88,000. The buyer’s income exceeds $75,000 by
$13,000. Dividing $13,000 by the phaseout range of $20,000 yields 0.65.
When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $8,000 by
0.35 shows that the buyer is eligible for a partial tax credit of $2,800.
Please remember that these examples are intended to provide a general idea of
how the tax credit might be applied in different circumstances. You should
always consult your tax advisor for information relating to your specific
circumstances.

8. How is this home buyer tax credit different from the tax credit that
Congress enacted in July of 2008?
The most significant difference is that this tax credit does not have to be
repaid. Because it had to be repaid, the previous "credit" was essentially an
interest-free loan. This tax incentive is a true tax credit. However, home
buyers must use the residence as a principal residence for at least three years
or face recapture of the tax credit amount. Certain exceptions apply.

9. How do I claim the tax credit? Do I need to complete a form or
application?
Participating in the tax credit program is easy. You claim the tax credit on
your federal income tax return. Specifically, home buyers should complete
IRS Form 5405 to determine their tax credit amount, and then claim this
amount on Line 69 of their 1040 income tax return. No other applications or
forms are required, and no pre-approval is necessary. However, you will want
to be sure that you qualify for the credit under the income limits and first-time
home buyer tests. Note that you cannot claim the credit on Form 5405 for an
intended purchase for some future date; it must be a completed purchase.

10. What types of homes will qualify for the tax credit?
Any home that will be used as a principal residence will qualify for the credit.
This includes single-family detached homes, attached homes like townhouses
and condominiums, manufactured homes (also known as mobile homes) and
houseboats. The definition of principal residence is identical to the one used to
determine whether you may qualify for the $250,000 / $500,000 capital gain
tax exclusion for principal residences.

11. I read that the tax credit is "refundable." What does that mean?
The fact that the credit is refundable means that the home buyer credit can be
claimed even if the taxpayer has little or no federal income tax liability to
offset. Typically this involves the government sending the taxpayer a check
for a portion or even all of the amount of the refundable tax credit.
For example, if a qualified home buyer expected, notwithstanding the tax
credit, federal income tax liability of $5,000 and had tax withholding of
$4,000 for the year, then without the tax credit the taxpayer would owe the
IRS $1,000 on April 15th. Suppose now that the taxpayer qualified for the
$8,000 home buyer tax credit. As a result, the taxpayer would receive a check
for $7,000 ($8,000 minus the $1,000 owed).

12. I purchased a home in early 2009 and have already filed to receive the
$7,500 tax credit on my 2008 tax returns. How can I claim the new $8,000
tax credit instead?
Home buyers in this situation may file an amended 2008 tax return with a
1040X form. You should consult with a tax advisor to ensure you file this
return properly.

13. Instead of buying a new home from a home builder, I hired a contractor
to construct a home on a lot that I already own. Do I still qualify for the
tax credit?
Yes. For the purposes of the home buyer tax credit, a principal residence that
is constructed by the home owner is treated by the tax code as having been
"purchased" on the date the owner first occupies the house. In this situation,
the date of first occupancy must be on or after January 1, 2009 and before
December 1, 2009.
In contrast, for newly-constructed homes bought from a home builder,
eligibility for the tax credit is determined by the settlement date.

14. Can I claim the tax credit if I finance the purchase of my home under a
mortgage revenue bond (MRB) program?
Yes. The tax credit can be combined with the MRB home buyer program.
Note that first-time home buyers who purchased a home in 2008 may not
claim the tax credit if they are participating in an MRB program.

15. I live in the District of Columbia. Can I claim both the Washington, D.C.
first-time home buyer credit and this new credit?
No. You can claim only one.

16. I am not a U.S. citizen. Can I claim the tax credit?
Maybe. Anyone who is not a nonresident alien (as defined by the IRS), who
has not owned a principal residence in the previous three years and who meets
the income limits test may claim the tax credit for a qualified home purchase.
The IRS provides a definition of "nonresident alien" in IRS Publication 519.

17. Is a tax credit the same as a tax deduction?
No. A tax credit is a dollar-for-dollar reduction in what the taxpayer owes.
That means that a taxpayer who owes $8,000 in income taxes and who
receives an $8,000 tax credit would owe nothing to the IRS.
A tax deduction is subtracted from the amount of income that is taxed. Using
the same example, assume the taxpayer is in the 15 percent tax bracket and
owes $8,000 in income taxes. If the taxpayer receives an $8,000 deduction,
the taxpayer’s tax liability would be reduced by $1,200 (15 percent of $8,000),
or lowered from $8,000 to $6,800.

18. I bought a home in 2008. Do I qualify for this credit?
No, but if you purchased your first home between April 9, 2008 and January
1, 2009, you may qualify for a different tax credit. Please consult with your
tax advisor for more information.

19. Is there any way for a home buyer to access the money allocable to the
credit sooner than waiting to file their 2009 tax return?
Yes. Prospective home buyers who believe they qualify for the tax credit are
permitted to reduce their income tax withholding. Reducing tax withholding
(up to the amount of the credit) will enable the buyer to accumulate cash by
raising his/her take home pay. This money can then be applied to the
downpayment.

Buyers should adjust their withholding amount on their W-4 via their
employer or through their quarterly estimated tax payment. IRS Publication
919 contains rules and guidelines for income tax withholding. Prospective
home buyers should note that if income tax withholding is reduced and the tax
credit qualified purchase does not occur, then the individual would be liable
for repayment to the IRS of income tax and possible interest charges and
penalties.

Further, rule changes made as part of the economic stimulus legislation allow
home buyers to claim the tax credit and participate in a program financed by
tax-exempt bonds. Some state housing finance agencies have introduced
programs that provide short-term credit acceleration loans that may be used to
fund a downpayment. Prospective home buyers should inquire with their state
housing finance agency to determine the availability of such a program in
their community.

The National Council of State Housing Agencies (NCSHA) has compiled a
list of such programs, which can be found here.

20. The Secretary of Housing and Urban Development has announced that
HUD will allow "monetization" of the tax credit. What does that mean?
It means that HUD will allow buyers to apply their anticipated tax credit
toward their home purchase immediately rather than waiting until they file
their 2009 income taxes to receive a refund. These funds may be used for
certain downpayment and closing cost expenses.
Under the guidelines announced by HUD, non-profits and FHA-approved
lenders will be allowed to give home buyers short-term loans of up to $8,000.
The guidelines also allow longer term loans secured by second liens to be used
by government agencies, such as state housing finance agencies, to facilitate
home sales.

Housing finance agencies and other government entities may issue tax credit
loans, the funds of which home buyers may use to satisfy the FHA 3.5%
downpayment requirement.

In addition, approved FHA lenders will also be able to purchase a home
buyer’s anticipated tax credit to pay closing costs and downpayment costs
above the 3.5% downpayment that is required for FHA-insured homes.
More information about the guidelines is available on the NAHB web site.
Read the HUD mortgagee letter (pdf) and an explanation of the FHA
Mortgagee Letter on Tax Credit Monetization (pdf).

21. If I’m qualified for the tax credit and buy a home in 2009, can I apply the
tax credit against my 2008 tax return?
Yes. The law allows taxpayers to choose ("elect") to treat qualified home
purchases in 2009 as if the purchase occurred on December 31, 2008. This
means that the 2008 income limit (MAGI) applies and the election accelerates
when the credit can be claimed (tax filing for 2008 returns instead of for 2009
returns). A benefit of this election is that a home buyer in 2009 will know
their 2008 MAGI with certainty, thereby helping the buyer know whether the
income limit will reduce their credit amount.
Taxpayers buying a home who wish to claim it on their 2008 tax return, but
who have already submitted their 2008 return to the IRS, may file an amended
2008 return claiming the tax credit. You should consult with a tax professional
to determine how to arrange this.

22. For a home purchase in 2009, can I choose whether to treat the purchase
as occurring in 2008 or 2009, depending on in which year my credit
amount is the largest?
Yes. If the applicable income phaseout would reduce your home buyer tax
credit amount in 2009 and a larger credit would be available using the 2008
MAGI amounts, then you can choose the year that yields the largest credit
amount.


Robert A Vaughan
Vice President
562-673-1136

NEW FEDERAL LAW AFFECTING DISTRESSED PROPERTIES

This week, President Barack Obama signed into law the Helping Families Save Their Homes Act of 2009 to help homeowners and lenders avoid foreclosure. Previously included in this bill was a measure to allow bankruptcy judges to modify mortgage loans for principal residences, but the U.S. Senate did not pass this "cram-down" legislation.

The Helping Families Save Their Homes Act of 2009 contains various new laws to address the national foreclosure crisis. Major provisions that may affect California REALTORS® and your clients include the following:
HOPE FOR HOMEOWNERS (H4H) REVAMPED: The new law loosens the H4H program requirements to help homeowners refinance out of their troubled mortgages and into more affordable, fixed-rate FHA-insured loans. Originally launched in October 2008, the H4H program intended to help 400,000 distressed homeowners, but in the program's first seven months, it only helped one family stay in its home. The maximum loan-to-value ratio for an FHA refinance is 96.5% of the appraised value. If refinance proceeds are insufficient to pay off existing liens, the existing lienholders must voluntarily agree to a short payoff, but a new inducement is an opportunity for them to share in the homeowner's equity. Other changes to the H4H program include monetary incentives for both the participating servicers of the existing loans and originators of the FHA refinance. Millionaire borrowers (with net worth over $1 million) are now excluded from the program. HUD will establish the requirements and standards to implement the H4H program as revised.


LONGER STAY FOR TENANTS OF FORECLOSED HOMES: Effective immediately, an REO lender or buyer who acquires title through a foreclosure sale must give at least a 90-day notice to terminate a bona fide tenant as defined. A 90-day notice to terminate is sufficient for a month-to-month tenant or if a new owner will occupy the property as a primary residence at the end of the 90 days. Otherwise, a tenant with a one year or other fixed-term lease with a remaining lease term exceeding 90 days can stay in the premises until the remaining lease term ends. This new 90-day notice requirement applies to foreclosures of a federally-related mortgage loan or residential real property, except for properties under rent control, rent-subsidized programs (such as Section 8), or other state laws that provide additional protections for tenants. This law expires on December 31, 2012.


NOTIFICATION OF TRANSFER OF MORTGAGE LOANS: The Truth in Lending Act now requires a lender to whom a mortgage loan is sold or otherwise transferred to notify the borrower in writing of such transfer within 30 days. The notice must include the new lender's identity, address, telephone number, authorized representative's contact information, and other relevant information. This measure should help alleviate the problem borrowers often face in determining who owns their mortgage loans.

Other provisions of the Helping Families Save Their Homes Act include a 4-year extension of the $250,000 FDIC deposit insurance to December 31, 2013, protection for loan servicers who establish qualified loss mitigation plans from liability for an alleged breach of duty to maximize mortgage values for their investors, $130 million for foreclosure prevention counseling and education, and $2.2 billion to strengthen homeless programs.

President Obama has also signed into law the Fraud Enforcement and Recovery Act (FERA) which authorizes the Department of Justice to prosecute mortgage fraud crimes against private mortgage brokers and companies that previously were not regulated by the federal government. FERA also earmarks almost $500 million for federal enforcement agencies to investigate and prosecute mortgage fraud and other fraud crimes.

Thank you for checking out my blog. If you or anyone you know is facing a hardship and they are having trouble paying there mortgage please have them contact me direct.

Robert Vaughan
Vice President
562-673-1136 Direct