Trapped by House Payments You Can’t Afford?

Interest Only, Stated Income, Option ARMS and all the other easy-to-obtain band-aid mortgages loans of the once-booming housing market, have placed some homeowners in an extremely critical position. They need stitches to close the huge gap between what they earn and what they owe. Are you feeling trapped in a home you can no longer afford, but can’t afford to sell? Are you among the growing number of homeowners that are wondering what they should do next? Read More….

Foreclosures rise more than 300 percent in the two-county Inland region

The Inland Empire homeowners are losing their homes at an alarming rate due to risky subprime mortgages. Take a look at this article from Knight Ridder Tribune Business News.

Click Here

FHA Might Be The Way!

My son, a lender at Majestic Mortgage just gave me a hot mortgage tip. This could help you:

• Is your credit score 620 or below?
• Have you had any late mortgage payments in the last 12 months?
• Is your loan amount under $362,760?
• Is that loan balance less than 97.15% of your home’s value?
• Do you have an adjustable rate mortgage set to adjust?

If you answered YES to the above and you’re looking for a way out, how does this sound?

• A 30-year fixed loan With NO prepayment penalty
• In the mid-upper 6% range With a 1% origination fee
• With no junk fee charges

Interested? If you have a sub-prime mortgage loan and need to get out of because it is about to adjust to a payment you can’t afford then you might want to contact my son, Mike Martin or his Processor, Bea at (909) 466-4889. You could be the perfect candidate for an FHA loan. Imagine an affordable monthly mortgage payment plus stability to your life as well.

Sub-prime adjustable rate mortgages are ticking time bombs, if you are in one and want out, inquire about FHA refinancing. Remember, not every lender is FHA approved.

Exactly what does the fed fund interest rate cut mean?

Business – Anticipating the Cut
3 min – Aug 23, 2007
It’s been highly anticipated, but exactly how could an interest rate cut impact the fast-falling mortgage market?

Watch here!

Market Condition Report – August 2007

MARKET CONDITION REPORT INLAND EMPIRE – WEST END August 2007

THIS YEAR LAST YEAR

Year to Date Sales

This Year	Last Year	Change	% Change
3,217	4,917	-1,700	-34.6%

The market is remaining rather constant relative to last year varying by a few percentage points either way. Last report was -35.3 %. This is generally in line with other areas surveyed. There are markets performing at a lower level than Inland Empire-West (Victor Valley -51%), but there is also Santa Barbara at +6%. This implies the current market condition varies according to area and price class. Note from the History of Median Sales Price the market peaked in terms of price in the late spring-early summer of 2006. MARKET QUICK LOOK

Indicator	Comment – Current Position and Movement	Buyer	Seller	Neutral
DEMAND	Increasing moderately-slower for CONDO. No trend.		–	–
SUPPLY	Rising slowly-near peak.		–	–
PERCENT SELLING (Market Efficiency)	Increased 2 points-too small to be meaningful. No trend.		–	–
DAYS ON MARKET	Steady.	–	–
MONTHS SUPPLY	Declining slowly-movement favorable to seller. No trend.		–	–
60 DAY ABSORB (Market Speed)	Very small positive movement. Not meaningful.		–	–
PRICES	List, Ask, Close Price-off moderately. Negative trend.		–	–
FUTURE PRICE INDICATOR	Expect declines to limit of $450K for SFR and $329K for CONDO.		–	–

In terms of current position the market is clearly favorable to the buyer. In terms of movement the market is moving toward the seller. However, this movement is very slight and tentative. No clear trends are evident except a tendency to declining prices (see graph History of Median Sales Price).

MCR TIP The 60 DAY ABSORB RATE measures market speed. Another way to think about the ABSORB RATE is the rate that listings are converted to closings in a 60 day period. The higher the ABSORB RATE, the quicker this conversion is occurring and the more the market is moving toward the seller. The opposite is true.

WORDS OF WISDOM Effective leadership is not about making speeches or being liked; leadership is defined by results not attributes (Peter Drucker).

Click here to view Market Condition Report.

Fed Discount Window Cut

Fed Discount Window Cut
What does it mean for you?

The Federal Reserve has taken significant action in the last few weeks due to the credit crunch. And now they’ve made an unexpected move by cutting the discount window rate – which is great news. I’ll get to that in a minute, but first let’s look at recent events and understand what they mean.

Market movement
To date, over 120 mortgage companies have closed their doors due to reduced liquidity. The result: Borrowers who want to take out non-conforming loans have fewer, more expensive options.

Many media outlets have incorrectly added fuel to the fire by stating that mortgage lending has stopped altogether and that borrowers can’t get a loan without a 20% down-payment. This is not true.

Conforming interest rates and loan programs, those backed by Fannie Mae and Freddie Mac, have not been significantly impacted by recent events. Even better, interest rates have come down from recent highs. While this is good news, the market is experiencing unprecedented volatility and changes could come at any time. Borrowers need to act swiftly and decisively in today’s climate.

What did the Fed do?
Now back to the discount rate. This is the interest rate charged to commercial banks and other depository institutions on the loans they receive from their regional Federal Reserve Bank’s lending facility. The Fed’s decision to cut this rate provides stability in the financial markets and this can be good for all of us.

How exactly does this provide stability? Here’s an example: Imagine you just wrecked your car and it requires $5,000 worth of repairs. You have a short-term need for cash to pay your mechanic. Even though you know you will eventually be reimbursed by your insurance company, you still need the cash now. So do you sell off stocks to get the cash, or tap into an equity line of credit? Most likely, you draw from that line of credit rather than liquidating a long-term investment.

This is what the banks are facing in today’s liquidity crisis. And Bernanke’s move helps them avoid long-term damage by supplying access to short-term cash.

It’s important to note that the discount rate is different than the Fed Funds Rate, which directly impacts interest rates that you pay for Home Equity Lines of Credit, credit cards, and automobile loans. Most importantly, the discount window rate cut does not directly impact mortgage rates.

What should you do now?
Information, knowledge, and expertise are the building blocks of sound financial decision making. If you are considering financing or are in the process of financing a home, you should tap into the resources of a skilled mortgage professional. I strongly encourage you to contact me as soon as possible. I would welcome the chance to help you navigate these choppy waters.

Credit Crisis Cripples The Market

Just last week, American Home Mortgage and its wholesale counterpart, American Brokers Conduit, became the latest casualties of the credit crisis. Last year, this company closed over $58 billion in home loans. Despite being, by all accounts, a well-run business, market conditions forced them to file for bankruptcy, leaving nearly $800 million in loans unable to close. Tens of thousands of borrowers have now been left without financing as a result of companies like this going under. Clearly, with over 100 national lenders having now closed shop in the last eight months, this is no longer simply a subprime lending issue. The credit market is experiencing unprecedented turmoil that, according to Mike Perry, CEO of Indymac Bancorp, is “broader and more serious than past disruptions.”

What does this mean for to the real estate market?

• Sellers can no longer be reluctant to accept offers or reduce prices. Tightening credit and diminishing mortgage products will continue to reduce the pool of qualified buyers. This, along with the increase in national inventories, means now is not the time to hold out for the “best” price possible.

• Buyers with credit issues or who have difficulty providing required documentation can no longer sit on the fence. If market conditions change, buyers who qualify for a loan today may not qualify a few weeks from now for the same exact loan. Just this week, many lenders have stopped offering no-Doc loans, and some lenders have even pulled back on all forms of stated loans. As market conditions continue to change, a buyer’s pre-approval status can disappear even more quickly, delaying or spoiling the deal.

• Subprime and Alt-A refi candidates, especially those with ARMs scheduled to reset over the next 12 months, need to act now – even those with a pre-payment penalty. ARMs borrowers struggling with monthly payments now might be shocked to know that monthly payments can double in some cases once an ARM resets.

What does this mean to you?

As educated Real Estate and Mortgage professionals, we feel it’s our responsibility to educate and inform you. Please feel free to utilize our experience and resources to help navigate through these turbulent times. Don’t leave your future in the hands of random mortgage providers. We’re local, accountable, and you can trust us to discuss this or any other strategies to survive in today’s challenging market. Don’t hesitate to call us. We’re happy to speak with you.

Reverse Mortgage Drawbacks

Reverse Mortgages are gaining more and more steam due to the vast amount of benefits and heavy regulation in the industry.Despite the various benefits of a reverse mortgage, it is crucial to consider its drawbacks prior to securing one. When the homeowner dies or permanently moves out of his home, the home will need to be sold in order to pay off the mortgage. The mortgage will be due at this time, in a lump sum. If the homeowner or his inheritors want to keep the home, they would have to make payment on the home within a year of the mortgage becoming due. However, the heir can refinance the home to a loan that better fits their needs and budgets.There are quite substantial fees involved in a reverse mortgage. This type of mortgage is generally more expensive than a regular mortgage or loan. In the beginning, the homeowner is expected to pay mortgage insurance premium, origination fee, appraisal fee and closing costs. In short, a $200,000 reverse mortgage may have $10,000 worth of fees involved with it. The fees are deducted from the loan prior to the funds being released to the homeowner. There may be additional servicing fees to be incurred during the term of the mortgage.

If the homeowner still holds a mortgage on the home when he seeks out the reverse mortgage, the mortgage will need to be paid off in full with the funds from the reverse mortgage and/or personal funds as needed.

Call Toll-Free 1-877-476-9600 to speak with one of our Loan Specialist to find out more about reverse mortgages or to request more information. There is no obligation or cost for their services.

Market Condition Report – July 2007

MARKET CONDITION REPORT

INLAND EMPIRE WEST
July 8, 2007
PROVIDED BY CHICAGO TITLE

The market stalls as demand declines and supply is relatively constant.

Price weakness looks inevitable as pending price is less than current closing price.

See all the details in the attached Market Condition Report (MCR) for the Inland Empire West area.

Reverse Mortgages

Reverse Mortgage: Does it really make sense?

Traditionally reverse mortgages have been a convenient way for seniors in need of cash to access some of the equity in their home to supplement their lifestyles. I’m coming around to the idea of the concept of reverse mortgages because it’s becoming apparent that they enable seniors to do more than augment their income. Of course I’m probably seeing more merit in them too because I am quickly becoming a senior.

Maintaining one’s independence is a very important priority and a reverse mortgage can make it possible for seniors to extend that independence significantly. Part of maintaining one’s independence has to do with being able to remain in one’s home. The expenses associated with living in a house can often prove overwhelming for seniors who may not have the physical wherewithal to perform maintenance tasks around the house.

This could be one very good way of putting a reverse mortgage to work. For those who are unfamiliar with the concept of a reverse mortgage, it is a financial product that’s exclusively geared toward mortgage free seniors. A reverse mortgage enables seniors to tap into the equity of their home, in some cases by as much as 60% of the total value, without ever having to make a payment. The financial institution advancing the funds will take repayment plus the agreed-upon accrued interest upon the eventual sale of the home or upon the demise of the owner, regardless of how long it takes.

So if you own a home worth $500,000 and you want to take a reverse mortgage, say for 60% of the home’s value, the financial institution advances $300,000 to the senior owning the home and the senior can use these funds in any way he or she wishes without ever having to repay a cent until the home is sold or the senior passes away.

At that time, the financial institution, which has a mortgage secured on the property, is entitled to sell the property and take its principal and interest from the proceeds of the sale, or the senior’s heirs can pay out the principal and interest and keep the home. In either case, any amount above and beyond the mortgage and interest must by law be turned over to the senior’s estate.

Personally, I like the idea of a reverse mortgage. Many seniors don’t because they’re thinking about their children’s inheritance. But then, when you consider that in the United States inheritance taxes are confiscatory, to put it mildly, and probating a will is very expensive; it only makes sense to enjoy the fruits of your labor while you’re still alive. Besides, your grown children should be able to look after themselves without counting on a windfall from your death.

So, does a reverse mortgage make good financial sense? Overall I’d say it does and I think many seniors would benefit greatly by tapping into the equity of their home to help maintain their independence.

Call Toll-Free 1-877-476-9600 to speak with one of our Loan Specialist to find out more about reverse mortgages or to request more information. There is no obligation or cost for their services.