The Indiana Mortgage Guy

Fannie Mae Loan Buyback Requests Up More Than 60% Year Over Year

Ken — Fri, 21 May 2010 18:27:56 +0000

While many expected the disturbingly high number of GSE directed repurchase demands to mortgage lenders on nonperforming loans to crescendo in 2009 – 2010 is looking to be an even more onerous year for mortgage lenders that sold loans to the GSEs. Nonbank financial institutions in particular, could be at significant financial risk by the contingent liabilities associated with the representations and warranties made to the GSEs for the quality, eligibility, and integrity of loans they originated and sold; and, which are now seriously delinquent or in default.
Excerpts from Fannie Mae’s 2010 Q1 Form 10-Q:
Pursuing Contractual Remedies. We conduct reviews of delinquent loans and, when we discover loans that do not meet our underwriting and eligibility requirements, we make demands for lenders to repurchase these loans or compensate us for losses sustained on the loans, as well as requests for repurchase or compensation for loans for which the mortgage insurer rescinds coverage.

During the first quarter of 2010, lenders repurchased approximately $1.8 billion in loans from us, measured by unpaid principal balance, pursuant to their contractual obligations. We are also pursuing contractual remedies from providers of credit enhancement on our loans, including mortgage insurers. We received proceeds under our mortgage insurance policies for single-family loans of $1.5 billion for the three months ended March 31, 2010.

Our mortgage servicers are obligated to repurchase loans or foreclosed properties, or reimburse us for losses if the foreclosed property has been sold, if it is determined that the mortgage loan did not meet our underwriting or eligibility requirements or if mortgage insurers rescind coverage.
In 2009 and during the first quarter of 2010, the number of repurchase and reimbursement requests remained high. Pursuant to our servicers’ contractual obligations, during the first quarter of 2010, the
aggregate unpaid principal balance of loans repurchased by our servicers was approximately $1.8 billion compared with $1.1 billion during the first quarter of 2009.

If a significant servicer counterparty, or a number of servicer counterparties, fails to fulfill its repurchase and reimbursement obligations to us, it could result in a substantial increase in our credit losses and have a material adverse effect on our results of operations and financial condition. We expect the amount of our outstanding repurchase and reimbursement requests to remain high throughout 2010

Backdating Purchase Agreements for Home Buyer Tax Credits = Criminal Fraud

Ken — Mon, 17 May 2010 09:57:20 +0000

As a reminder, the Home Buyer Tax Credits have expired. This means that buyers who wish to benefit from the tax credit must have already accepted binding purchase agreement as of April 30, 2010.

With the tax credit deadline expired, home buyers or REALTORS® may be tempted to backdate post-April 30th purchase agreements. REALTORS® must resist this temptation or face severe criminal consequences.

Specifically, Title 26, Section 7206 of the United States Code, warns that any person who aids or assists in a fraudulent or false document in connection with any matter under the Internal Revenue laws is guilty of a felony and subject to:

(1) Imprisonment for not more than 3 years in a Federal prison;
(2) A fine of $250,000 for individuals or $500,000 for corporations; or
(3) Both

In fact, just recently, a Los Angeles REALTOR® pleaded guilty to federal tax charges after she helped five new home buyers fraudulently obtain the $8,000 credit. She also assisted five others in scamming the IRS under the Earned Income Tax Credit. As a result, the REALTOR® faces up to 50 years in prison and a $2.5 million fine.

Like the fraudulent LA REALTOR®, any Indiana REALTOR® who backdates a post-April 30th purchase agreement will be guilty of criminal tax fraud and subject to a lengthy prison term and pricey fine.

So, think before you backdate a purchase agreement: Is committing criminal fraud for an $8,000 or $6,500 tax credit worth risking your career, a prison sentence, and fine? Do not let a misguided desire to help your client ruin your life. Your agency duties do not require it, and the Code of Ethics and the law forbid it!

States: Let taxpayers cover your mortgage

Ken — Wed, 12 May 2010 20:06:25 +0000

NEW YORK (CNNMoney.com) — Unemployed? Owe more on your mortgage than your home is worth? Your state might one day pay your mortgage. Giving people free money to cover their home loans is just one of the radical ways that four states — Florida, Michigan, California and Arizona — plan to use $1.4 billion the Obama administration is sending their way to help the unemployed and underwater avoid foreclosure. Many consumer advocates have said the government should help cover the payments of these troubled homeowners, lest the mortgage crisis continue spinning out of control and dragging down everyone’s property values. But other housing experts warn that paying off loans creates a moral hazard and could actually dissuade people from looking for work. Innovative programs, however, are exactly what the administration was hoping for when it unveiled the Hardest Hit Fund initiative in February. Officials are looking to help the unemployed and underwater, who are now at the heart of the crisis. Despite the administration’s best efforts to stabilize the market, home prices are still sliding and foreclosure filings are at record highs. The federal government is doling out a total of $2.1 billion to 10 states, which also include Nevada, North Carolina, South Carolina, Rhode Island, Ohio and Oregon. The others have not yet submitted their plans to Treasury for approval or have not made them public. States have radical ideas to stop foreclosures To be sure, the proposals will only a touch a small percentage of the unemployed and underwater homeowners who need help. But it will provide assistance to some of those who presently don’t qualify for traditional loan modifications. Administration officials will spend the next few weeks reviewing the proposals, but Assistant Treasury Secretary Michael Barr told CNNMoney.com that they contained some good ideas. Subsidizing troubled homeowners The recently unveiled initiatives are not identical, but they have two common themes: Helping the unemployed by subsidizing part or all of their monthly mortgage payments for up to two years and paying down underwater homeowners’ loan balances. The states want the loan servicers and investors to match their largess, hoping to woo them by paying down as much as $50,000 of underwater homeowners’ loan balances. But until now, financial institutions have been reluctant to reduce principal. 0:00 /3:10Homeowners walking away These proposals may irk Americans who are keeping up with their mortgage payments or don’t want tax dollars used to help their neighbors. But Alan White, a law professor at Valparaiso University, said all homeowners will suffer if neighboring properties fall into foreclosure. “There are benefits for all of us for stopping foreclosures any way we can,” White said. Plus, he added, many of the people who would be helped are those capable of paying their mortgages again once they find work. By example, he pointed to a longstanding Pennsylvania program that provides loans to the unemployed, which gives them assistance while they look for new jobs. Also, covering homeowners’ mortgages is a better use of government funds than giving incentives to the servicers and relying on them to assist borrowers, said Paul Willen, senior economist at the Federal Reserve Bank of Boston. This way, he said, states have more control over who benefits from the initiatives. “Every dollar spent will go to families who need it,” he said. But delinquent homeowners aren’t the only ones who would benefit from these subsidies. In fact, the banks would come away with a huge win, said Mark Calabria, director of financial regulation studies at The Cato Institute. Not only would they have government money securely in hand, but they’d avoid the time and expense of the foreclosure process. “This is a lot more than they would have collected otherwise,” Calabria said. “The lenders should bear the losses for this. They are the one who made the loans.” Another concern is that these proposals will dissuade the unemployed from finding work or from relocating to an area with better job prospects, said Casey Mulligan, an economics professor at the University of Chicago. Such programs incent people to maintain their financial hardships. “Why should anybody work if you are going to be in your house either way?” he said. To top of page

Indy Mortage News Letter

Ken — Fri, 12 Mar 2010 19:47:58 +0000

The Real Estate Market Minute:

Warren Buffet Sees Housing Market Bouncing Back by 2011

Billionaire Warren Buffet said the U.S. will recover from the residential real estate slump by 2011 as demand for houses catches up with the supply that accumulated during the bubble.

Click Here to Read the Full Article by USAToday.com

If you’re considering a Home Purchase then now is the time to take action! Check out the “Resource Center” in the left-hand column of this newsletter for an interactive online tool that can help answer just about any mortgage or real estate related question.

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Brian Tracy Inspirational Article of the Month:

Making Strong Connections

Brian Tracy is a world-renowned personal and professional development coach that has helped millions of people achieve their goals and develop a positive mindset. Brian will be contributing to our newsletter every month by providing us with an article to help inspire you, our clients, to reach higher and achieve more than ever before.

Click Here to Read this Article by Brian Tracy

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Interesting Articles of the Month:

The 10 All-Time Greatest FREE Downloads and Services

In our 15 years of choosing the best free stuff, we’ve spotlighted the superstars: Adobe Reader, Craigslist, Flickr, Gmail, Google, Mozilla Firefox, and Wikipedia. Here are ten other classics you might not use, but should!

Click Here to Read the Article by PCWorld.com

Man Caught Robbing Same Bank Twice in 24 Hours

BERLIN – A German robber held up the same bank in Hamburg twice within 24 hours just a week after being released from jail — for the same crime.

Click Here to Read the Full Article by Reuters.com

Italian Billionaire Goes from Jet-Set to Jail!

Telecoms billionaire Silvio Scaglia spent the night in Italian police custody after flying in by private jet from the Caribbean to face charges in a money-laundering probe.

Click Here to Read the Full Article by Reuters.com

Tanks. Tanks a Lot.

About 100 modern Russian tanks have been discovered abandoned on the side of a road in the country’s Ural Mountains, footage published Saturday by websites showed.

Click Here to Read the Full Article by Reuters.com

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YouTube.com Video of the Month:

Mike Parsons Surfs 64-Foot Wave off the Coast of Hawaii

Mike Parsons is one of the most amazing athletes on the planet. He is a big wave surfer and one of the best at his profession. He was made famous by this video which shows him riding a 64 foot wave off the beaches of Jaws, Hawaii. The footage was filmed from a helicopter and is 100% real. Enjoy the following video and be sure to forward to family, friends, and co-workers!

Click Here to Watch the Video Clip by YouTube.com

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Delicious Recipe of the Month:

Fresh Zucchini Flower Quesadillas

The flowers are beginning to bloom and welcome the Spring Season! Zucchini’s will grow in abundance this season; they produce a golden edible flower that can be used in a number of dishes. This healthy spin on a traditional Mexican dish is sure to create quite a buzz. Be sure to share this wonderful recipe with family, friends, and co-workers!

Click Here for the Full Recipe by CookingWithMelody.com

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Funny Dumb Criminal Story of the Month:

One Way NOT to Open a Safe After a Burglary!

Police said two would-be robbers were arrested early Sunday morning in the parking lot of a Swiss Chalet restaurant in Ajax, Ontario after spending more than half-an-hour trying to open a safe they had stolen from the restaurant by driving back and forth over it with a car.

Click Here for the Full Story by CriminalLawLawyer.net

What is this Guy Thinking ?

Ken — Wed, 03 Mar 2010 14:39:36 +0000

What is He Thinking?

H.A.R.P. was put into law last year by our President Obama. It was placed into law so that people could Refinance there mortgage up to 125% of the current value of there home. Our President told us that this would allow people to refinance there mortgage that was underwater due to the value.

However, here is the problem. People are doing the following:

1. Some are first trying to do Loan Modification thru their lender only to find it will not work.

2. When they can not get a Loan Modification the they are trying to sale their property thru a Short Sale.

3. When they discover they cannot get a buyer or the bank will not agree to the Short Sale, then they are allowing the house to go into a Foreclosure.

4. The last thing they are trying to use is H.A.R.P. Only 20,0000 people have used any of the Governments programs and Obama sold the country on that all these programs would help 4 to 5 million people keep their homes. (It is not working)

Now…….Guess What……Obama wants to pass H.A.M.P. This will Freeze all Foreclosures by banks for 4 – 6 months. That means that the people not paying their mortgage payments can live there FREE for another 6 months.

I heard the other day that Obama is a smoker. The question is WHAT IS THIS GUY SMOKING ?

Why should all of us keep paying our mortgages when our President wants to let all of these people, that should not be in their homes, to live there FREE ? As a taxpayer we are paying for all of this.

Fannie: Buybacks Happen for a Reason

Ken — Tue, 02 Mar 2010 11:48:24 +0000

Fannie Mae said Friday that many mortgage lenders are not complying with the most basic underwriting guidelines, such as confirming a borrower’s identity or verifying a Social Security number. Marianne Sullivan, a senior vice president and Fannie’s chief risk officer, sent a nine-page letter to lenders announcing a “Loan Quality Initiative” to ensure that loans meet the government-sponsored enterprise’s credit and eligibility guidelines. Sullivan said Fannie analyzed the primary drivers of loan-repurchase requests and has launched the initiative to identify ways to improve compliance with its guidelines. “Many repurchase requests are driven by the fact that the delivered loan does not meet Fannie Mae’s eligibility requirements,” she wrote. In the next few months, the government-sponsored enterprise plans to add quality-control policies to monitor and assess the effectiveness of lenders’ own quality-control plans. Lenders now will be required to obtain documentation to confirm the occupancy of a property. They also must determine that a borrower’s debts are not only evaluated as part of the qualification for a mortgage but also are disclosed on the final loan application signed by the borrower at the closing table. Separately, Fannie reported Friday that its net loss narrowed to $16.3 billion in the fourth quarter, from $25.2 billion a year earlier. The GSE also said it requested another $15.3 billion from the Treasury to help eliminate its net worth deficit. Fannie has not been able to maintain a positive net worth without government assistance since September 2008. The GSE expects to receive the additional funds from the Treasury by the end of March, bringing its total government support to $75.2 billion.

Siding adds to curb appeal

Ken — Sat, 20 Feb 2010 12:41:44 +0000

By Angie Hicks / Star correspondent

Posted: February 20, 2010

Replacing old or damaged siding on your house can make it easier to sell it or add long-term value if you’re planning to stay for several years.

According to the National Association of the Remodeling Industry, adding new siding offers one of the best returns on an investment a homeowner can make.

“Anything you own and are trying to resell, if it’s maintained, it’s going to sell (faster) than if it isn’t,” said Matt Wright, a certified remodeler and owner of The HomeWright, LLC.

Wright likes to get creative when adding siding to a home by dressing up trim pieces, shutters and other exterior components. “It’s taking a design eye to the outside, like I do to the inside, to add curb appeal and also to maintain the house,” he said.

Homeowners can choose from a variety of siding options to fit their needs. Wood, vinyl and fiber-cement are the most popular choices:

Wood: It offers a nice aesthetic appeal to many homeowners but can be pricey, inviting to insects and requires more maintenance than other siding types.

Vinyl: It is an easy-to-maintain, low-cost option and doesn’t rot or wear like wood. However, it can crack, chip and fade over time.

Fiber cement: It has more of a wood appearance and is more durable than vinyl. It has become the preferred choice of homeowners in recent years, but typically costs more than vinyl.

“Unlike vinyl, fiber cement is fire- resistant,” said Mike Dittmer, owner of Aztec Homes Fiber Cement Siding. “It does not expand or contract and is hail-resistant. Unlike wood, fiber cement will not rot. It’s resistant against all insects and woodpeckers. Most of what I replace is wood and vinyl.”

Ultimately, homeowners must weigh the pros and cons of the different siding types and choose what best fits their personal tastes and budgets.

“People just have to see what their options are; see how knowledgeable (service companies) are, not only about the product, but about the installation,” Wright said.

If you do it yourself:

» You expose yourself to physical dangers — mostly from ladder falls, and potential health hazards from inhaling the residual dust.

» You might void your warranty if installation is done improperly or in conflict with a manufacturer’s instructions.

If you decide to hire a contactor:

» Avoid those who market their work door-to-door.

» Always verify a contractor’s insurance and references before you hire.

» Ask for before and after photos of other jobs.

» Know that fiber cement siding has to be installed by a certified preferred remodeler approved by the manufacturer. If not, Dittmer said, the warranty is voided.

“If it’s installed properly, fiber cement requires minimal maintenance,” Dittmer said.

Damaged screws are troublesome — but don’t despair

Ken — Sat, 20 Feb 2010 12:34:52 +0000

By Shelly Miller Leer

Posted: February 20, 2010

Any home-improvement project that
involves wood and wood screws opens
the door to troublesome screw issues.
There are three frustrating situations: a
stripped screw head, a screw spinning
around in stripped wood, and (the worst)
a broken-off screw head. Many thanks to
my students who have offered some
handy tricks they’ve learned.

Tools and materials:

Phillips and flat screwdrivers

Electric drill

2 to 4 toothpicks

Wood or Elmer’s glue

Wide rubber band

Small pair of locking pliers (a brand
name is Vise-Grip)

Needle-nose pliers (not pictured)

Extractor kit ($3.49)

Broken-off screw head:

1. Try to get hold of the top of the

remaining screw post with needle-nose
pliers.

2. If that doesn’t work, use a flat-head
screwdriver to push the wood down
around the post.

3. Attach small locking pliers to the post
and turn the screw counter-clockwise to
remove.

You may have to repair the wood around
the hole.

Stripped Phillips screw head: the
grooves, shaped like a plus sign (+),
have been worn away:

1. Try different sizes of Phillips
screwdrivers, press down, trying to get
screwdriver to catch in the head.

2. Use a wide rubber band on top of the
screw, press and turn the screwdriver to
“catch” the screw.

3. If it turns, when the screw head is

above the wood surface, attach locking
pliers and remove the screw.

4. An extractor kit comes with a regular
drill bit and a strange-looking drill bit
called an extractor. You drill a hole into
the center of the screw, insert extractor
bit into drill, push down into drilled hole
and turn the drill in reverse (counter-
clockwise).

Stripped wood around screw:

1. Pull loose screw out.

2. Add glue to 2 or 3 toothpicks.

3. Insert toothpicks into hole in the
wood, alongside the screw.

4. Drill screw partially into hole, break off
tops of toothpicks and drive the screw all
the way in as normal.

Any tricks you have would be welcome.
Send e-mail to flipt@att .net.

Indiana Mortgage Watch

Ken — Sat, 20 Feb 2010 10:33:35 +0000

As reported by the IBJ Real Estate Weekly, on a seasonally adjusted basis, the pace of mortgage loan activity grew 21 percent in the week ended Jan. 29, according to the Indiana Mortgage Bankers Association. Rates for 30-year loans decreased to 5.01 percent from 5.02 percent the previous week. Fifteen-year mortgages decreased to 4.33 percent from 4.34 percent.

NAR Issues Brochure Explaining the New Short Sales Program (HAFA)

Ken — Sat, 20 Feb 2010 10:31:04 +0000

NAR has issued a new brochure to help members understand the new Home Affordable Foreclosure Avoidance Program (HAFA) that takes effect on or before April 5, 2010. The purpose of the program is to help homeowners, who are unable to retain their homes under the Home Affordable Modification Program (HAMP), avoid foreclosure through a short sale or a deed in lieu of foreclosure. HAFA includes uniform procedures, standards forms, and deadlines. This program has the potential to revolutionize short sales, but its success will depend on the implementation by servicers and cooperation by investors and subordinate lien holders. Fannie and Freddie are tweaking the rules for their own programs—their variations are expected “soon.” Information about short sales, including HAFA, is available on www.realtor.org/shortsales.

Additional Informatio includes:
NAR’s HAFA brochure (text only)
NAR’s HAFA brochure
NAR’s one page summary of HAFA
NAR’s HAFA FAQs

For more information, contact Jeff Lischer at 202/383-1117 or Tony Hutchinson at 202/383-1120.

Source: National Association of REALTORS®