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.

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.

Reverse Mortgage Myths

The lender will own my home if I take out a Reverse Mortgage.
Not true. The homeowner retains title to their home throughout the life of the Reverse Mortgage.

My heirs will be responsible for repayment of the Reverse Mortgage.
Not True. The Reverse Mortgage is a non-recourse loan. The lender can only look for repayment from the sale of the property, although the repayment may be made from any other source and your heirs may keep the home. The lender cannot look to the estate for repayment of the loan.

Your home must be debt free to qualify for a Reverse Mortgage.
Not True. You may have a mortgage or other debt on your home. The mortgage or debt however, must be paid off first with the proceeds of the reverse mortgage.

Only those with excellent credit, income and/or health can qualify.
Not True. There are no credit, income or health requirements for a Reverse Mortgage. The only requirements are that you be at least 62 years of age, that the home be your primary residence and that you have equity in the home.

I will need to make monthly payments on the Reverse Mortgage.
Not True. The homeowner is only responsible for paying the taxes, insurance and upkeep of the home. As long as the home is your primary residence you will never have to make a payment.

Only the “cash poor” or desolate seniors can benefit from the Reverse Mortgage.
Not True. Even though some seniors may have a greater need than others for the cash or monthly income, the Reverse Mortgage can also be an excellent financial or estate planning tool.

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.

Protect Yourself. Protect Your Identity.

WHAT HAPPENS AFTER YOUR MORTGAGE ORIGINATOR PULLS YOUR CREDIT REPORT?

1. Your mortgage originator pulls your credit report from the credit bureaus to obtain your credit score and process your loan application.

2. The credit bureaus may place your personal information on a prescreened list (also called a trigger list).

3. Within hours the credit bureaus may sell the list to hundreds of companies. Your mortgage originator does not authorize the sale of your personal information and cannot stop it. Only you have the ability to stop this practice.

4. Within hours you begin to receive phone solicitations for mortgage products from numbers and companies you don’t recognize.

5. Within days you begin to receive mail solicitations for mortgage products.

WHAT TO LOOK OUT FOR

1. The “bait-and-switch” scheme. This scheme is run by companies who get business by luring consumers in with low rates and then switching the loan product.

2. Solicitations (phone and mail) that appear to be from your current mortgage company. Always confirm who you are speaking with.

3. Solicitations asking for pin numbers, passwords, your mother’s maiden name and/or your social security number.

4. If you believe you have been the target of one of these deceitful practices or some other abuse of the system, please report the incident to the Federal Trade Commission at 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261.

WHAT YOU CAN DO

1. Opt-Out of prescreened offers.

2. Register with the Do-Not-Call Registry, www.donotcall.gov.

3. Contact the Federal Trade Commission.

4. Contact Congress.

5. Stop other forms of direct marketing by visiting the Direct Mail Association’s Web site at: www.dmaconsumers.org/consumerassistance.html.

Worried? Want To Do More To Protect Your Information?

Voice your concerns by calling your Congressional Representative at 202-224-3121.

FAQs

WHAT IS A PRESCREENED OFFER OF CREDIT OR INSURANCE?

A firm offer of credit or insurance is defined as any offer of credit or insurance to a consumer that will be honored if the consumer is determined, based on the consumer’s credit report, to meet the specific criteria used to select the consumer for the offer, subject to certain confirmation requirements.

WHAT IS OPT-OUT?

Opting-Out refers to the process of removing your name from lists supplied by the Consumer Credit Reporting Companies, Equifax, Experian, Innovis and TransUnion (“Credit Bureaus”), to be used for firm (pre-approved /prescreened) offers of credit or insurance. Your rights as a consumer under the Fair Credit Reporting Act include the right to “Opt-Out” for 5 years or permanently.

HOW TO OPT-OUT

You can opt-out by visiting www.optoutprescreen.com or through the toll-free telephone number, 888-567-8688. When you call or visit the website, you’ll be asked to provide personal information, including your home telephone number, name, Social Security number, and date of birth. The information you provide is confidential and will be used only to process your request to opt out.

DOES EXERCISING MY RIGHT TO OPT-OUT AFFECT MY ABILITY TO APPLY FOR CREDIT OR INSURANCE?

No, removing your name from these lists does not affect your ability to apply for or obtain credit or insurance.

DOES OPTING-OUT IMPROVE MY CREDIT SCORE?

No, since inquiries for firm offers for credit or insurance are not used in calculating credit scores, Opting-Out does not improve your credit score. Similarly, inquiries for firm offers for credit or insurance do not reduce your credit score.

HOW DO I CONTACT THE FTC?

Federal Trade Commission

Consumer Response Center

Room 130600 Pennsylvania Avenue, N.W.

Washington, D.C. 20580

www.ftc.gov/credit/

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.