Beware buying a home from a divorcing couple!!

NEW YORK (CNNMoney.com) -- Marriage break-ups can be tense. And when divorcing couples sell their homes, it's buyer, agent and everyone else beware.

There are about one million divorces a year in the United States and in most cases, there's a home that needs to be sold. That can mean great bargains, because couples divorcing -- like those in foreclosure -- are often among the most motivated of sellers, willing to accept offers below market value.

Still, house hunters may well pay the price in terms of aggravation and time when working with these sellers.

Buyers must wade through the venom generated by the divorce. Often, one spouse is anxious to sell while the other tries to sabotage the deal -- either out of spite or an unwillingness to end the marriage.

"Most of my divorcing clients dislike each other very much so navigating the transaction can be tricky," said Scott Weeda, a Seattle-based real estate agent who specializes in divorce.

We're too afraid to buy -- despite low prices
In other cases, one spouse may delay signing off just to aggravate the ex. Other times, one party may want to maximize the profits while the other just wants to get out.

"In many cases, the joint ownership is the only remaining tie that connects couple selling," Weeda said. "They sometimes want to cut that ASAP."

Buyers may find themselves in agreement on a deal with one spouse until the other vetoes the deal. Sometimes, buyers don't even know there's a problem until the last minute.

Charles Vallis, a Massachusetts-based agent for discount broker Redfin, had a recent sale in which his buyers went to contract and had a closing date, but then the wife in the divorce disappeared.

"She was nowhere to be found for the last few days before closing," said Vallis. "The day before, their attorney notified us that they might not be able to close because the wife was unreachable

One of the buyers, Megan McGuire, who works in public relations for a large law firm, said she "floored" by this. "We thought it was really reckless on her part."

She and her husband, Josh Ledeen, had already given notice at their rental and had made a date with the movers. "We would have been out on the street," said McGuire.

Vallis kept leaving messages for the wife and calling her attorney, who couldn't reach her either. Luckily, her husband was anxious to sell. He even changed the locks before the final walk-through because he feared his wife might damage the interior.

After days of desperately trying to contact the wife, the sellers' attorney finally got a call back and read her the riot act about the legal consequences of breaching the contract. The sale closed on time -- but the agitation cost the buyers sleepless nights.

To try and avoid these situations, Randy Morrow, an Arlington Va.-based real estate agent who represents divorcing couples, tells potential buyers to find out early whether a divorce is acrimonious.

Then, there's a very good chance the settlement will not happen on schedule," he said. "Buyers should talk to their agents about placing protective language in the offer. If a case is really nasty, I would tell my clients to run."

Carol Ann Wilson, an expert in divorce financial planning, also advises house hunters to delve deeper into the sellers' backgrounds if the sale involves a divorce.

"If buyers find that both parties haven't signed off on the selling agreement," she said, "buyers should back off. The deal could be easily derailed."


Thanks for checking out my blog if you have any questions about refinancing or buying or selling a home please contact me. (562) 673-1136

Thanks Rob

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

America's Real Mortgage Rate!!

Record low mortgage rates? Too bad no one is taking advantage of them. Most homeowners still pay around 6% for their loans.

Mortgage rates dropped to another record low this week following the Fed's move to pump hundreds of billions of dollars into the U.S. economy. Though officials hope that buying Treasuries with newly-printed money will give the slow-growing economy a big boost, the move likely won't give today's homeowners much relief. Any Questions about refinancing please call Robert at 562-673-1136

Now is one of the cheapest times in decades to finance a home, but few are actually locking in record low mortgage rates. This isn't just because many don't qualify for refinancing as home prices plummet and banks continue to enforce tighter lending standards.

It's also because many owners who locked in relatively low rates between 2003 and 2005 don't think it's worth refinancing, according to a U.S. Federal Reserve study of the mortgage market released in September. This is a factor that has largely been overlooked. Please visit my website if you have questions about principle reduction www.shortrefiusa.com

It's true millions have been trying to redo the terms of their home loans to reduce their monthly payments. Yet a sizable group also thinks their current interest rates are at least bearable – they don't want to spend the money or time to take out a new loan for only slightly lower rate.

Mortgage rates are at their lowest since at least 1971. The rate for a 30-year fixed loan fell to 4.17% in the week ended Thursday from 4.24%, according to Freddie Mac (FMCC). The average 15-year rate declined to 3.57% from 3.63%.

But interest paid on the vast majority of home loans is much higher than the record rates, according JPMorgan, which tracks the outstanding U.S. mortgages by major lenders including Freddie Mac and Fannie Mae (FNMA). As of October 31, only about 16% of fixed-rate mortgages and 12% on floating mortgages paid between 4% to 4.99%.

A relatively bigger proportion, about 27%, are adjustable rate mortgages that fluctuate with the market and pay a lower rate ranging between 3% to 3.99%. Still, at least half of outstanding home loans still pay 5% or higher regardless of whether a fix or floating rate.

Historically when rates have dropped significantly, there's typically a flurry of refinancing.

And indeed, that happened recently when the average annual rate for a prime-quality 30-year fixed rate mortgage fell abruptly at the end of 2008 and through 2009, falling below 5% in April and May. Refinancing boomed, peaking to more than 645,000 loans in May 2009 before dropping back to monthly levels similar to those seen in 2006 and 2007, according the Fed's report.

But the recent surge in refinancing doesn't compare to what was seen historically – it's in stark contrast to the levels seen between 2001 to 2003 when rates fell sharply. In 2003 when rates were slightly more than 5%, the volume of refinance loans rose to more than 15 million, markedly greater than volumes in 2009 of about 5.8 million loans.

"There's a lot of head scratching right now as to why people aren't refinancing," says Freddie Mac Chief Economist Amy Crew Cutts. "The applications are high but the closings are low."

Cutts points to various factors, including high unemployment, home values falling well below the balances of mortgages and stricter lending standards at many major banks.

Whatever the reason, it appears homeowners aren't benefiting much from the Fed's policy prescription to accelerate the economic recovery. Who knows how low mortgage rates will go or if it will even matter months from today.

Who pays what? E-Mail Rob at Robsavestheoc@gmail.com

Robert Vaughan
Vice President/ Managing Partner
(562) 673-1136

Underwater Borrowers Get a Lifeline on September 7

With as many as 20 million homeowners going underwater by 2011, there could be a lot of interest in this new program.

"We're throwing a life line out to those families who are current on their mortgage and are experiencing financial hardships because property values in their community have declined," FHA Commissioner David H. Stevens said in a statement. "This is another tool to help overcome the negative equity problem facing many responsible homeowners who are looking to refinance into a safer, more secure mortgage product."

The new loan product, called the FHA Short Refinance option, is targeted for those homeowners who are paying on time, but saw large declines in home values in their local markets. If your home is underwater and your interest rate is above 6 percent, you should definitely consider this. Even if you have a good interest rate, the write-down of your first and/or second mortgage may make this deal worth considering.


To qualify for this FHA refinance opportunity, you must be current on your mortgage, and your lender or investor must be willing to write off at least 10 percent of the original first lien on the mortgage. The big hitch is that you must have the consent of your current mortgage lien-holders, so if your lender refuses to participate, you won't be able to take advantage of this refinance program.
For your loan to qualify, you must meet these conditions:


- Your mortgage must be in a negative equity position.
- You must be current on your mortgage to be refinanced.
- You must occupy the subject property (one to four units) as your primary residence.
- You must qualify for the new loan under standard FHA underwriting and your FICO score must be greater than or equal to 500.
- Your existing loan must not be an FHA-insured loan.
- The existing first lien-holder must write off at least 10 percent of the unpaid principal balance.
- The refinanced FHA-insured first mortgage must have a loan-to-value ratio of no more than 97.75 percent.
- If you have other subordinate mortgages (such as an equity line) they must be re-subordinated and the new loan may not have a combined loan-to-value ratio greater than 115 percent.
- Your total monthly mortgage payment, including the first and any subordinate mortgage(s), cannot be greater than 31 percent of gross monthly income. And total debt, including all recurring debts, cannot be greater than 50 percent of gross monthly income.
- You cannot use the new FHA mortgage to pay off existing debt obligations in order to qualify for the new loan.

If you've already undergone a loan modification, you may still qualify for these new FHA loans. Anyone whose loan was modified under the Making Home Affordable Modification Program may still be eligible beginning the month following the date the modification was permanent. If you were modified using a non-HAMP loan, you must make three on-time monthly payments on the new modified mortgage and be current on the loan.

There are also requirements that you must meet for any secondary financing, such as a home equity loan or home equity line:

- Your subordinate lien must not provide for a balloon payment before 10 years, unless the property is sold or refinanced.
- The terms must permit prepayment by the borrower, without penalty, after giving 30 days advance notice.
- Periodic payments, if any, must be collected monthly.
- Any monthly payments must be included in the qualifying ratios unless payments have been deferred for no less than 36 months.

To encourage second lien-holders to participate and extinguish fully or partially any second lien, the existing second lien-servicer will be entitled to a onetime incentive of $500 for each successful closing. There also will be an incentive for investors, based on the combined loan-to-value of the existing lien, and all senior liens associated with the mortgage.

Hopefully, these incentives will be enough to encourage your lender to participate

Thanks for checking out this blog if you have any questions about shortpay refinance please contact me direct and I will answer all your questions.

Thanks
Robert Vaughan
www.shortrefiusa.com
(562) 673-1136 Direct

The Wasted 4.44% Mortgage Rate!!!

FORTUNE -- It appears even the bright spots of this tired economy are still working against heavily indebted homeowners. Mortgage rates have hit new lows nearly every week, but many borrowers are still unable to take advantage of them.

Like it is in so many parts of today's sideways economy, relief is out of reach. Stimulus dollars are everywhere, but somehow never where they're needed most.

Last week, U.S. mortgage rates fell for the eighth consecutive week to a record low after the Federal Reserve said it would buy more government debt to help the economy recover. A 30-year fixed-rate mortgage in the week ending Thursday dropped to 4.44% from 4.49%, according to Freddie Mac, which noted it was the lowest since the mortgage finance company began collecting data in 1971. The 15-year rate averaged 3.92%.

The fall in rates ostensibly means homeowners can lower their monthly loan payments by refinancing their existing loans. They're certainly trying -- the Mortgage Bankers
Association reported last week that 78.1% of all mortgage applications fell under the refinance category, up from 58.7% in April.

But many of them are filling out all that paperwork only to get a rejection letter in response. The mortgage association does not quantify how many of those who apply for refinance actually get approved, but mortgage brokers say many homeowners are ineligible. Last year the Home Affordable Refinance Program, or HARP, was created to help homeowners get new loans, but the program has only resulted in a small fraction of the refinancings the government aimed to enable.

"The qualifications are so much stricter," says Dale Robyn Siegel, CEO of Harrison, NY-based Circle Mortgage Group and author of The New Rules for Mortgages. "Banks have realized that even the best of borrowers have lost their jobs. A lot of people are really tapped out."

Doors closing

The stricter qualifications include a higher FICO score of at least 620, a higher down payment and lower monthly debt service ratios. Additionally, lenders typically won't loan more than the appraised value of a home. The troubled housing market has left an estimated 15 million U.S. mortgages -- one in five -- worth more than the value of the homes they helped purchase. The growing mountains of paperwork required and higher bank fees have also discouraged some from refinancing.

Add it all up, and you get a 4.44% rate that most Americans can't have.

The government-controlled Freddie Mac (FRE, Fortune 500) and Fannie Mae (FNM, Fortune 500) either own or guarantee half of the nation's mortgages. Wall Street economists and analysts have called on the Feds to loosen lending standards and give breaks on fees so that more people qualify to refinance. In the short-term, this could free up household incomes and inject much-needed money into a slow-growing economy. But opponents argue it would only add to the hundreds of billions of dollars it will take to prop up troubled Fannie and Freddie.

The U.S. Treasury Department says it doesn't plan to ease refinancing rules.

It's easy argue against the idea of helping homeowners -- even the debt-ridden and jobless -- with their bills. After all, it can be said they bought too much house for their own good and bailing them out would only encourage the kind of irresponsible borrowing that sent the US economy into a financial crisis in the first place.

But lower interest rates, ideally, are meant to encourage investments - something the economy could use right about now. Instead, today's mortgage rates are doing nothing more than tempting those investors who can't have them.

If you have any questions about refinancing or find out what are the latest Mortgage Solutions out there feel free to call me direct at (562) 673-1136

Thank You,
Robert Vaughan
www.shortrefiusa.com

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

Drowning In Home Debt!! Help Is HERE!!

Lisa Gibbs
(Money Magazine) -- A transfer in 2005 landed Air Force major Richard Hallbeck, his wife, and two kids in Southern California smack in the middle of the real estate bubble. Home prices in the area had doubled in the past five years and were still climbing. So the Hallbecks swallowed hard and bought an $845,000 four-bedroom in a suburb of Long Beach.

The $3,800 monthly payment was high but affordable on two incomes. (Laurie, now 37, worked as a claims adjuster.) And they figured the market was so strong that when they had to move again, they'd at least break even. "Our house actually appraised over what we paid for it," Richard, 42, recalls wistfully.


Since then, area sale prices have fallen 26% -- when properties sell at all. Meanwhile, the recession cost Laurie her job, and the payment on the couple's adjustable-rate mortgage will jump $800 in July. Next year Richard will face mandatory retirement from the Air Force, and his pension will be a third of his current $117,000 income.

All that's got the Hallbecks anxious to move to a more affordable city -- like Dayton, where they used to live. But they're just as anxious about how much they could lose on the sale of their house.

A similar home down the street lists for $655,000, $21,000 less than the Hallbecks' outstanding mortgage. At that price, the couple would be out $231,000, including their down payment and closing costs. "The stress has really worn on us," Richard says.

Nationwide, about one in four home mortgages are now underwater, meaning borrowers owe more than their places are worth. No surprise, California and other bubbly states -- Nevada, Arizona, and Florida -- lead the nation.

While a bevy of new federal programs aim to help, underwater owners who want to move still face uncomfortable choices: Postpone the move and continue sinking money into a pit; sell for a loss, forfeiting the down payment and some savings to close the deal; desperately try to enter into a short sale; or simply walk away and face the consequences of foreclosure. If you (or your kids) are in this situation, here's how to think about the options.

Keep on keeping on!!

If you don't have to move and can afford the payments, it probably makes sense to soldier on and wait for housing prices to recover, says Denver financial planner Ross Schmidt. Moody's Economy.com projects that prices in 61% of metro areas will return to recent peak levels by 2015.

If you live in one of the harder-hit cities -- which may take 20 years to rebound -- and you're more than 25% underwater, your house won't be a financial asset anytime soon. But as long as you're happy to stay in it for many years, that may not matter.

In the meantime, you may be able to cut your loan balance -- and lower your payments -- through a new federal program with Affinity Lending Group that refinances existing loans into smaller FHA loans. To qualify, you must be current on payments -- but it's up to the lender to agree to it www.Shortrefiusa.com.

The Hallbecks might have been eligible for some of this aid, but Laurie is eager to move with the kids by this fall, rather than waiting until Richard retires -- which will be in the middle of the school year.

Beg the bank for a break

What if you need to get out of the house? The Hallbecks initially considered renting their place out. But they'd probably lose money, given the spread between their mortgage payment and rental prices. Becoming a landlord is a risk even in areas where you can cover carrying costs, as you're still on the hook in between tenants, says Maryland financial planner Timothy Maurer.

If you have any questions on these Government Programs or what type of Mortgage solutions you may qualify I'm here to help.






Thank you
Robert A Vaughan
Vice President
Affinity Lending Group
562-673-1136

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
562-673-1136 (c)

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

More Homeowners Struggling As Option ARMs Reset Higher!!

Mark Koba S.E.


Thousands of American homeowners are starting to see their monthly mortgage payments skyrocket, dealing a fresh blow to the already shaky housing recovery.

The widely feared reset of thousands of option adjustable-rate mortgages—where both interest and principal payments rise sharply—is already leaving many homeowners struggling to keep a roof over their head.

"It's going to kill off housing," warns Patrick Pulatie, CEO of Loan Fraud Investigations, a predatory lending audit firm. "We have pretty close to 500,000 option ARM payments going higher in California over the next couple of years. The impact of the higher payments will be devastating for homeowners who are having trouble now making ends meet."

Option ARM mortgages, which have been around since 1981 and are aimed primarily for people who had fluctuating incomes, became popular during the housing boom. Terms of the loan usually allowed the borrower to make low monthly payments initially—sometimes by just paying interest only.

But as the terms of those mortgages now readjust, homeowners are facing much higher mortgage payments at a time when the value of their house has plummeted and many are out of work. In some cases, homeowners who chose a very low starting interest rate have actually seen the overall amount of their mortgage increase—known as negative amoritization—putting them even deeper in debt.

"Option ARMs have been a disaster from day one and a lot of them have already defaulted," says Greg McBride, senior financial analyst with Bankrate.com. "This is a very big issue because interest rates are rising." Reduce your principle balance with Affinity Lending Group Shortrefiusa.com


There are no specific numbers on how many option ARM loans there are. But analysts estimate that as many as 1.3 million borrowers took out $389 billion in option ARMs in 2004 and 2005 alone.

Many of those option ARM loans have already re-adjusted to higher payments, but more are on the way. Some 88 percent of Option ARMs originated between 2004 and 2007 are going to adjust higher between now and 2012. Those option ARM borrowers could see their housing bills go up as much as 63 percent, according to Fitch ratings.

And there's more misery. If the Fed increases rates in the months ahead to fight inflation, rates tied to option ARM indexes will rise further—causing more payments to adjust up even sooner. And while Option ARM borrowers might want to re-finance, they often can't because of falling home values and tighter credit restrictions.

"I don’t see how the option ARM problem is not a huge issue," says Sylvia Alayon, vice president and director of operations for the Consumer Mortgage Audit Center, which provides auditing services to advocacy groups. "This is a major hit for housing. It will continue to feed the excess supply of housing with more foreclosures."

But Mark Zandi, chief economist at Moody's, says the option ARM problem is just one of many for housing.

"It's more of a bump in the road," Zandi says. "Many of these loans defaulted before they even got to higher payments. "I think the jobless situation is hurting more and the increase in interest rates. Add that with the coming ending of the home buyer tax credit and those are the bigger problems facing housing."

And David Adamo, ceo of mortgage banking firm Luxury Mortgage, says lenders are helping to ease the situation.

"Many of the good ones are entering into agreements to help borrowers ease their payments," says Adamo. "I don’t think that the re-casting of option ARMs will have any greater effect on housing than any other troubles facing borrowers."

In fact, some 21,000 home loans modified in the third quarter of 2009 included a principal reduction or deferral, according to Mortgage Metrics.

But that's not nearly enough says Loan Fraud Investigations Pulatie and getting most lenders to help now is not that easy. He also says they were part of the problem from the beginning. "They were pushing option ARMs. Anytime they sold to Wall Street, they received 3-4 points in commission," Pulatie said. "If you have $500,000 loan you’re talking about $15,000 in your pocket. That's why Wall Street liked them."

As for borrowers, Adamo says they need to do some honest personal appraisals when applying for a loan. "A lot of option ARM loans should not have been made in the first place, " Adamo says. "Many of them had lower stated income levels than should have been listed. Both the lenders and borrowers are at fault for that."

As the option ARM implosion hits housing, solutions seem few and far between. Homeowners are advised to work with their lenders in reducing loans payments if they are behind or can't re-finance. The White House has been increasing pressure on banks to help borrowers, but it's still up to the banks to decide if they will.

And there is HARP, the government program designed to help homeowners refinance an existing mortgage with lower mortgage rate or to refinance to lower monthly payments. But this too has had limited effect with tough restrictions and qualifiers.
Affinity Lending Group is one of the leaders offering shortpay refinancing. Please view this testimonial of a California couple that refinanced through Affinity Lending Group http://www.youtube.com/watch?v=WY7MToO1fdM


While the number of foreclosures has slowed somewhat, it could reach 4 million in the US in 2010 according to RealtyTrac. Numbers like that, says one analyst, mean housing needs a major financial overhaul.

"We need to have these option ARM loans modified and help homeowners pay them off," says Alayon. "People who say 'don't help my neighbor because I made my payments' are missing the point. Missed mortgage payments mean foreclosures and falling home values. This effects us all."

Hi, and Thank for your continued support. If you have any questions or are just curious at what the banks are doing for solutions to this mortgage crisis. Please contact me at 562-685-8159

Thank you
Robert Vaughan
Vice President
Affinity Lending Group

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

Obama Mortgage Rescue: Only a Few get Lasting help!!

Only a handful of homeowners are receiving permanent loan modifications under the Obama administration's foreclosure prevention plan.

NEW YORK (CNNMoney.com) -- Only a tiny percentage of troubled homeowners have received permanent modifications under President Obama's foreclosure prevention plan, raising concerns about the effectiveness of the $75 billion effort.

Fewer than 5% of the trial modifications on loans owned or guaranteed by Freddie Mac were converted to long-term adjustments as of Sept. 30, according to the mortgage finance giant.

Looking more broadly, the figures are even lower. As of Sept. 1, only 1.26% of all trial adjustments were made permanent after three months, reported the Congressional Oversight Panel, which monitors the government's use of bailout funds.

The Treasury Department is set to release within coming weeks the first comprehensive look at the number of permanent modifications issued so far.

The preliminary data, which has not been widely reported, underscores the next big problem facing the government's effort: Officials have leaned on banks to offer more homeowners trial modifications, but the real test will be whether homeowners will receive lasting help.

"No one is really sure why the conversion rate is so low," said Mike Zoller, assistant economist at Moody's Economy.com. "We're concerned these loans will eventually become foreclosures."

Under the president's plan, delinquent borrowers are put into trial modifications for several months to make sure they can handle the new payments and to give them time to submit their financial paperwork. If they qualify for a long-term modification, borrowers can keep making the lower payments for five years, after which time the interest rate is set at the rate at the time of the adjustment, or about 5% today.

The number of permanent modifications reported is expected to be small, industry observers said. Servicers say they are having trouble getting the necessary documents from borrowers, while homeowners maintain that their servicers are repeatedly losing the paperwork.

And, the question remains, how many people will meet the criteria necessary to adjust their loans for the long-term?

Once homeowners send in their paperwork, servicers may find these borrowers don't have enough income or have too much equity or savings to qualify. Or it may just be more profitable for the bank to foreclose on the home than modify the mortgage.

While the foreclosure rate has eased a bit recently thanks in part to the growing number of people in trial modifications, some experts fear foreclosures will start rising again unless more people receive permanent assistance.

"Everyone is going to be shocked at the low conversion rates from trial modifications to permanent modifications," said Guy Cecela, publisher of Inside Mortgage Finance, a trade publication. The president's program "won't result in a significant number of loans being modified and won't put a significant dent in foreclosure rates."

To be sure, the program is still in a relatively early stage, and the number of trial modifications did not really start ramping up until the fall. Also, in recent weeks, the administration and servicers have taken steps to increase the conversion rate by lessening the documentation requirements and even hiring firms to go door-to-door to assist borrowers with collecting the paperwork.

"We continue to identify new ways to refine the program and increase the likelihood that trial modifications will become permanent ones," a Treasury spokeswoman said.

Announced in February and launched in April, the foreclosure prevention program seeks to help as many as 4 million troubled homeowners by putting them mortgages where the monthly payments are no more than 31% of the borrowers' pre-tax income.

Though the initiative got off to a slow start, some 650,000 people have been placed in trial modifications, which were originally intended to last three months but recently lengthened to five. To get into the trial period, homeowners only need to meet some basic criteria, including owing less than $729,750 on their mortgage and having monthly payments above 31% of their pre-tax income.

Verifying documentation
During the trial period, borrowers must send in the documentation needed to verify their income and expenses, including tax returns, pay stubs and bank statements. Homeowners must also be timely with their trial payments to receive long-term adjustments.

At JPMorgan Chase (JPM, Fortune 500), about 92,500 borrowers, or just over half of those in the president's loan modification program, have made more than three payments. But only 26% of those have also submitted all of the required documents.

"We're not sure why we're not getting the documents from people," said Chase Spokesman Tom Kelly, who declined to say how many permanent modifications the bank has completed.

Citigroup (C, Fortune 500), meanwhile, has converted about 1,800 borrowers into permanent modifications, said Sanjiv Das, head of CitiMortgage. The servicer has about 89,000 in trial modifications.

Citi, too, is having trouble with the documents. Often, borrowers send in paperwork that is not complete or has errors, Das said.

But, the Treasury Department's recent relaxation of the rules has allowed Citi to ramp up its efforts. In particular, servicers are now able to accept electronic signatures on tax documents instead of having to secure signed forms. As a result, the number of Citi borrowers whose files are complete has soared to 11,000, from 3,500 only three weeks ago.

"It will go up substantially" said Das, who expects Citi to place between 5,000 and 6,000 borrowers in permanent modifications by year's end.

Going door-to-door
The low number of conversions has kicked administration officials and loan servicers into higher gear to secure the paperwork needed to evaluate borrowers for long-term modifications. A growing number of servicers are hiring companies to knock on borrowers' doors in hopes of getting the required income and tax statements.

"This will give [borrowers] someone they can talk to who is reliable and knowledgeable so they can turn that trial period into a permanent modification," said Brad German, a spokesman for Freddie Mac (FRE, Fortune 500), which in late September hired a firm to work with servicers to gather the needed documents from homeowners.

Many servicers, including Citi and Chase, are working with such firms. Others have tried other ways to entice borrowers to provide their documents.

Saxon Mortgage Services, which leads the pack with 44% of its eligible delinquent borrowers in trial modifications, has offered homeowners in California and Florida $25 gift cards to come to company-sponsored foreclosure prevention events with paperwork in hand.

Only about 15% of the borrowers took Saxon up on its offer, a spokesman said


If you have any questions on what solutions are available to help you with your mortgage payments please contact me at (562) 673-1136


Robert Vaughan
Vice President
Affinity Lending Group

Buy your New Home Now!! Tax Credit Extended until June 2010

President Obama reups popular tax credit through June 2010 and expands it to include people with higher incomes and some who want to trade up into new homes.

NEW YORK (CNNMoney.com) -- President Obama signed an extension and expansion of the first-time homebuyers tax credit on Friday.

The $8,000 credit was scheduled to lapse on Dec. 1 but will now be in effect through the end of June. Homebuyers must sign a contract before April 30 and close by June 30. The income limits were also raised: Single buyers can now earn up to $125,000 and still get the full credit while a married couple can earn $225,000.

The bill also made more homeowners eligible to claim the credit on their taxes. First-time buyers -- those who have not owned a home in the past three years -- still qualify for an $8,000 rebate. But now people who want to trade up can also qualify. Those who have owned and occupied a residence for at least five years out of the past eight can claim a $6,500 tax credit if they close on a purchase by the end of June.

"The new version of the tax credit has the potential to stimulate the housing market even more than the old version due to the fact that more people will qualify under the new rules," said Gibran Nicholas, chairman of the CMPS Institute, an organization that certifies mortgage bankers and brokers.

Who qualifies?
Nicholas provided four scenarios illustrating how the tax credit rules for existing homebuyers will apply:

• Harry owned a home in 2001 and 2002 but sold it to relocate for a job. He would qualify for the $8,000 first-time-buyer credit because he has not owned a home in the past three years.

• Sue purchased a home in 2004 and has lived there since. If she decides to buy a new home, she would qualify for the $6,500 tax credit because she has lived in the same residence for five consecutive years in the past eight.

• Jane purchased her home in 2002, lived there for five consecutive years before she rented it out in 2007. She would qualify because she was an owner/occupier for at least five consecutive years in the past eight.

• Mark purchased a home in 2006 and lived there for the past three years. He would not qualify because he is neither a first-time homebuyer nor someone who lived in the same primary residence for five consecutive years out of the past eight.

How it helps the economy
Legislators and industry experts expect that the credit will encourage buyers such as Jane and Sue to move up their purchase plans.

"This bill will shift demand from the second half of 2010 into the first half," said Pat Newport, a real estate analyst with IHS Global Research. "As a result, home sales and prices will get a boost in the first half of 2010, with payback in the second."

That's not a bad thing, according to Bill Kilmer, vice president of advocacy for the National Association of Home Builders. It's important to stabilize real estate markets quickly to help bring the economy out of its tailspin.

The original $8,000 tax credit appears to have helped accomplish that goal: Home prices have inched up the past few months, according to the S&P/Case-Shiller Home Price Index.

Would it have happened anyway?
But critics still see the program as being ineffectual because it rewards buyers who would have purchased a home anyway. Newport estimates that fewer than 400,000 of the 2 million who have claimed the original credit made their purchases solely because of the tax advantages.

Furthermore, buyers do not, in reality, receive the entire benefit. "The credit helped prices stabilize," said Newport. "So the credit has been split between seller and buyer. The sellers are getting higher prices and buyers paying more than they would have without it."

The housing industry, however, is pleased with the extension, although the credit has not been quite as effective as they hoped.

The industry thought the credit would provide a ripple effect, with sales to first timers triggering as many three additional "move-up" sales.

That did not happen, according to Lawrence Yun, NAR's chief economist.

"It did not have the chain reaction impact it was supposed to," he said. "Instead, many first-timers turned to vacant, foreclosed or other distressed properties the sellers of which were unlikely to be move-up buyers."

So, the tax credit helped prop up the low end of the market without having much impact on the rest of the spectrum. Expanding the benefit to existing homeowners should boost those segments. That should produce additional benefits, according to Yun.

"Preventing further price decline or even nudging prices up a bit stabilizes housing wealth, which makes homeowners more comfortable in their spending," said Yun. "They're more likely to go out to the stores or buy a new car. That provides a boost to the overall economy."
If you have any questions about how this tax credit extension will help you purchase a new home please contact Robert Vaughan at 562-673-1136

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

Rob Ask? Is it time to Dump your ARM??

Some 1.5 million adjustable-rate mortgages reset soon. If yours is one of them, you need to decide whether to lock in your rate and refinance into a new loan.

(Money Magazine) -- If you are among the 6.5 million homeowners who took out a low-rate adjustable-rate mortgage during the housing boom, you've probably spent the past couple of years waiting for your day of reckoning to come.

After all, you've probably heard repeated warnings that when your ARM resets your payments would spike dramatically: an especially big problem if you used a low-rate ARM to stretch for a home you could barely afford.

The good news is that scenario hasn't come to pass. Instead, interest rates have fallen to record lows, and when your ARM resets you'll probably see your monthly nut fall, not rise.

But once the economy stabilizes, the government will start peeling back the policies that are keeping mortgage rates low.

"Eventually rates are going to go up very significantly," says Greg McBride, a senior financial analyst at Bankrate.com. The Mortgage Bankers Association predicts fixed mortgage rates will reach 5.9% by the end of 2010 and 6.3% by the end of 2011.

To see what could happen to your payments later on, look on your mortgage documents to find the cap, or the number of points your rate can move in any given year after the first reset (one or two is typical), as well as the lifetime cap on your loan. Then figure out if you should refinance now and what kind of mortgage you should get if you do.

Stand pat if ...
You plan to move in the next three years. In that case, the few thousand dollars you'll pay to refinance is likely to exceed any extra interest you'll pay on the mortgage before you move.

You have less than 20% equity in your home. If you bought in the past few years and real estate values in your area have taken a big hit, you may not qualify for the best rates. "That makes refinancing less attractive," says Wilton, Conn. mortgage broker Tim Malburg, Homeowners with a jumbo mortgage (more than $417,000 in most areas) are held to an even higher equity standard.

Refi to a 5/1 arm if ...
You'll be in your home for three to five more years. In mid-September, ARMs that were fixed for the first five years cost about half a percentage point less than 30-year fixed-rate loans. Over a five-year period, that could save you almost $10,000 on a $300,000 mortgage.

You have a jumbo loan. These large mortgages can feel like a rip-off right now, since rates for 30-year fixed jumbos are about a percentage point higher than those for smaller loans -- an unusually wide spread, says Keith Gumbinger, vice president at HSH Associates.

That's because the government has been purchasing loans backed by Freddie Mac and Fannie Mae, which has artificially driven down conventional-mortgage rates.

If you need a jumbo mortgage you'd knock about three-quarters of a percentage point off your rate by taking a 5/1 ARM. That would save about $3,300 a year for a half-million-dollar loan.

Refi to a fixed-rate loan if ...
You might be less attractive to a lender later on. If you'll need to take a big loan to pay your kid's college tuition, say, or think you might get laid off -- then it's worth doing the refi while you have the chance.

You'll be in your home five years from now. While most experts think that rates will stay low for a while, they're not likely to get much lower, and there's no guarantee they won't jump unexpectedly.

If you're planning to stay longer than five years, go with a 30-year fixed to eliminate any interest-rate risk, since rates on seven- and 10-year ARMs are only a notch lower than those on 30-year loans. And if you have any doubts about your time frame, lock in. After all, you don't want to be in this same predicament five or so years down the road.

You'll pay more to lock in a fixed-rate mortgage today. But a couple of years from now, holding on to that adjustable-rate loan could get costly.

If you have any questions about principle reduction or just general questions about your mortgage please contact Robert Vaughan at (562)673-1136
Thank you and God Bless

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