Marc (Moshe) Preger Mortgage Solutions

Marc's Mortgage Matter's

December 4th, 2011 12:21 AM

In what economists are hailing as a clear sign of economic recovery, Walmart customers across the USA jammed into stores on Black Friday, sometimes killing each other to buy useless stuff. 'We have been looking for evidence that the economy is on the mend,' said Davis Logsdon, chairman of the economics department at the University of Minnesota. 'When people resort to homicide to buy a Blu-ray player, that is very, very good news indeed.' Mr. Logsdon said he was 'impressed' by the lengths to which some Walmart customers were going to grab coveted sale items. With many customers using pepper spray and other weapons to get a shopping advantage, however, Mr. Logsdon advised Americans not to enter a Walmart unarmed. 'If you want to get your hands on a doorbuster, you'd better have a firearm,' he said. 'Fortunately, Walmart is offering several great doorbusters on firearms.' 'Egyptians risk their lives for new government,' he said. 'Americans bravely do the same for new flat screens.'

Who Pays the Taxes in Your Neighborhood? – Sober Look Blog – Here is an interesting exercise. Download the 2008 tax spreadsheet from the IRS website for your state to see who files returns along with amazing amount of other information – dependents, mortgages, deductions, etc.

How to find out who owns your mortgage.

Realty Q&A is a weekly column in which Lew Sichelman, a nationally syndicated columnist who has been covering the housing market for more than 40 years, responds to readers’ questions on real estate.

WASHINGTON (MarketWatch) — QUESTION: Could you please inform us as to what steps to take in order to find out if a bank has sold a mortgage, and if so, when and to whom? My son has a first and a second with two major banks and they tell him they still own the loans. He bought his house in 2006 and is way underwater, and he has not missed a payment and has good credit. But the banks tell him he does not qualify for HARP. —A.E.

ANSWER: For starters, to qualify for HARP, the mortgage in question must be owned or guaranteed by either Fannie Mae or Freddie Mac. You can check their websites or call their toll-free phone numbers to find out if your son’s loans meet that requirement. (MP: Call me direct!) That would be:

Fannie Mae’s Loan Lookup website. Call 800-372-6643.

Freddie Mac’s self-service lookup site. Call 800-373-3343.

QUESTION: You stated in your MarketWatch article (Nov. 18, 2011) that investment properties do not qualify. I have exchanged e-mails with several mortgage brokers who say that it IS for investment property. Can you double-check this? I have two investment properties in Myrtle Beach, S.C., which are more than 125% underwater that I really need refinanced. If I could refinance them, it would save me $500 a month, which is about what I need to break even with the rental income and pretty much mean that I would keep them instead of having to explore other options. We have a squeaky-clean credit score and have made all payments on time for everything, but we need some relief. Please recheck this. I know that they were refinancing investment property under the old HARP but I never checked into refinancing ours because I know we are so far underwater. —S.R.

ANSWER: You are right. I totally got this wrong. You and dozens of other readers called me on this, and I am ashamed to admit, I blew it entirely.

I checked with several sources — other than my misreading of the announcements by Fannie Mae and Freddie Mac — all of which confirmed that investment properties and second homes qualify.

QUESTION: I can’t quite grasp why my lender has told me that I need to have 125% loan-to-value ratio when the new HARP program states differently. My home in Cape Coral, Fla., is worth about $145,000 and my loan balance is $205,000. With the new governor forcing educators to pay into retirement accounts, I am hurting. My wife and I have perfect credit because we still pay all our bills on time, but we are struggling. We have made our mortgage payment on time for the past eight years and I was excited to hear about the new program, but now it just makes me disgusted. I called my lender but was told my house would need to appraise at $173,000. I need help. We are both in education and are trying to do the right thing but no one is making any programs to help people like me out. Please, any suggestions would be greatly appreciated! —B.M.

ANSWER: According to Arlene Hyde, the senior vice president for strategic relationships in the business and information services at CoreLogic — and the subject matter expert on HARP at the big Santa Ana., Calif.-based real estate information company — Fannie Mae and Freddie Mac actually have two different programs. One is for your existing lender; the other, for customers who refinance with another lender.

Under HARP 2.0, your current lender, and anyone else’s, can start taking applications for refinance loans at greater than 125 percent loan-to-value ratio beginning Dec. 1. But their automated underwriting engines won’t be brought up-to-date so it can handle HARP 2.0 loans from other lenders until sometime in mid-March next year, which is why you have been informed by your lender that you don’t qualify. I’d start the application process sooner rather than later. (MP: It could get complicated so call me direct and I'll advise you what to do!)

QUESTION: I am pretty sure I qualify for the revised HARP program. Only problem is, I contacted the company that handles my mortgage and they will not be offering this program. They only offer modifications? Am I stuck, or can I contact outside banks to process the HARP refinance? —D.A.

ANSWER: After March 2012, contact a lender for your HARP refinance. The company you mentioned only services loans on behalf of Fannie Mae and Freddie Mac. Lenders which sell loans to the two government sponsored enterprises — and most do these days — will be able to offer refinance mortgages at loan-to-value ratios of greater than 125% using the GSE’s automated underwriting systems. (MP: You can contact me now - as I am already assisting others.)

QUESTION: Can I refinance a home that I no longer live in but currently rent out?

ANSWER: Yes, you can refinance a rental house that was once your primary home.

Once again, for any HARP questions, hardship concerns, or to see if you qualify, and straightforward answers to help guide you correctly I urge you to email or contact me now.

Where do the experts think home values are heading? "Nobody should be surprised by further home value losses in the remaining balance of this year and into next year," said Zillow Chief Economist Stan Humphries. "Despite record high affordability of real estate, the psychology of home buyers is still being weighted down by economic uncertainty, keeping them on the fence when it comes to buying homes. Moreover, we do expect foreclosure liquidation rates to increase in the coming months as banks try to unload their backlog of foreclosures accumulated in the post robo-signing period. This will also put downward pressure on home values. The good news is that we expect these remaining home value losses to be relatively minor in comparison to the declines from the market peak to current levels."

If we were to write a handbook on How to be a Dictator, we’d have a chapter called Public Spaces. “Future tyrants, do not allow big open plazas. Tiananmen Square in China? Tahir Square in Cairo? The list goes on. Upon first gaining power, get a good architect to figure out how to break up these big public places into smaller ones. Big open areas = huge crowds, and if they get bored, they will ultimately start calling for your hanging. Controlling the masses will be much easier if you make it difficult for large groups to ever gather in one place.”

Sometimes in the financial markets there is just too much going on to comprehend. For example, on Wednsday the Fed (the U.S. Central Bank), in conjunction with the European, Canadian, England, Japan, and the Swiss National Banks arranged for a dollar Swap agreement lasting through the middle of 2013 to make it easier for the European banks to get dollars by borrowing from their Central Bank, the ECB. This removes the liquidity fear that when a European bank needed to borrow dollars in the overnight market, the international reserve currency, they could do so through their Central Bank at reasonable rates. The lack of liquidity in 2008 is what precipitated the collapse of Lehman Bros. and that triggered the panic banking crisis in our country. But remember that liquidity is different than credit!

So what happened? The DOW rallied nearly 500 points, mortgage prices barely budged, and in fact some lenders/investors had rate improvements! Treasury rates went up very slightly but it is easy to see how financial news like this can jar markets, often more so than weekly or many of the monthly numbers that are released here in the United States.

The world remains awash in troubles, including slowing growth and recession likely forming in Europe, less-stellar growth in China and a still-weak recovery here at home. That being the case, and with fiscal policy flailing about both here and abroad, central banks announced both individual and coordinated actions to help address some of these issues, and stock investors cheered loudly at the efforts. A considerable rise in stocks this week came partly at the expense of bonds, and while underlying interest rates rose somewhat as a result, most mortgage rates didn't follow them.

Equity markets were also cheered by reports of very solid sales on Black Friday and Cyber Monday to kick off the holiday retailing season. We'll need to see if these extreme bargain hunters continue to come out for the rest of the annual buying binge before it's all said and done, but a good start is an encouraging sign that consumers are hunkering down somewhat less than they had been.

For their part, the Federal Reserve, European Central Bank, Bank of Canada, Bank of England, Bank of Japan and the Swiss National Bank all pledged to make US dollars available more cheaply to one another in order to make certain that currency liquidity issues don't further disrupt global markets. This means that credit can keep flowing more easily despite tightening lending conditions in Europe, and that may help keep individual economies functioning as they address their debt difficulties. That credit will keep flowing means companies can continue to borrow and invest, and that improvement in potential business conditions improved the moods of equity investors measurably. While this does not directly address the Eurozone's troubles, it does address the results of those troubles to at least some degree.

The improving tone is of course reflected in other economic reports, and lends some hope that some economic momentum may be finally starting to build. By no means are we out of the woods yet or have no risks which might again derail us from an upward path, but the grind forward seems to be moving a little quicker of late.

A sign of confidence of sorts -- or perhaps just the simple need of replacing an aging fleet -- stoked sales of new vehicles to a 13.6 million annualized rate in November. That was a 400,000 increase from October and the best pace of 2012. In fact, and excepting a spike in sales from the 2009 CARS ("cash for clunkers") program, the present rate is the best since August 2008, when the collapse in sales accelerated (eventually bottoming just above the nine million mark).

With the economic sky brightening somewhat, interest rates would normally have some reason to press higher. However, eurozone clouds lurk on the horizon yet, and whether the ensuing storm will be a drizzle or a downpour remains yet to be seen, as does the duration of the event. Even central bank umbrellas to help deflect the rain may only keep everyone from getting soaked for a while.

The spate of good news and welcome actions of this past week is now behind us; a light economic calendar next week will likely allow eyes to again turn to the troubles that remain unsolved, and interest rates seem likely to settle, erasing this week's slight bump.

A man and a friend are playing golf one day at their local golf course.
One of the guys is about to chip onto the green when he sees a long funeral procession on the road next to the course. He stops in mid-swing, takes off his golf cap, closes his eyes, and bows down in prayer.
His friend says, "Wow, that is the most thoughtful and touching thing I have ever seen. You truly are a kind man."
The man then replies, "Yeah, well, we were married 35 years."

Posted by Marc (Moshe) Preger on December 4th, 2011 12:21 AMPost a Comment (0)