General Topics affecting / related to the 1-4 unit Residential Real Estate Financing Market

According to this Realtytrac report for first Quarter 2009, California was #3 in the country in terms of highest percentages of foreclosure filings at ~1.72%, Arizona just beat us out ~ 1.85% and Nevada was the undisputed champ at ~ 3.7%. Realtytrac defines a foreclosure filing as an NOD, NTS or a bank repossession.

The national average is ~.63% of all U.S. Properties (had some sort of foreclosure filing during that same time period.)

Defaults in California are up by record numbers according to this Dataquick article.  Up 80% from prior quarter (Q4 2008) and 19% from prior year quarter (Q1 2008). 

~70% of loans originated by ResMae 8/06=>11/06 have defaulted, Masters Financial and Ownit were both North of 60% too during that time period, WOW!!...

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As I understand it, the Home Valuation Code of Conduct (HVCC) was passed to erect a barrier between Loan originators having undue influence on appraisers.  Basically the Government is saying that Mortgage Brokers are twisting appraisers arm to inflate values so they enacted this law.  As I sit and try to understand this new law here are my initial thoughts:

  1. Lenders have whats called in house "Appraisal Review".  These departments basically analyze comparable sales to verify that appraisers aren't doing things like excluding better comparables.
  2. Why are some of the biggest lenders in the country allowed to run their own appraisal management companies?
  3. Why is there no oversight of Appraisal Management companies, no licensing required.
  4. There is a…

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There are alot of misconceptions surrounding FHA within the Real Estate Industry.  Especially from people that have been in the industry for a long time.  During the height of the "Mortgage Bubble" no one used FHA because of the relative difficulty in closing them.  HUD realized this and revamped the program in significant ways in order to make FHA a more competitive program within the marketplace.  These modernization efforts combined with the dissappearance of the Secondary Market for non-agency products and the simultaneous tightening of the Fannie/Freddie conventional guidelines has placed FHA back on top as the financing product of choice for Residential 1-4 unit purchase transactions and high ltv refinances.  I'll try to address some of these…

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I am adamant in my opinion that Obama’s mortgage plan will be a bust.   It seems difficult for people to understand that:

  1. borrowers need to be in homes they can afford, regardless of the level of rates;
  2. home prices should (and will) fall to levels consistent with area incomes;
  3. re-default rates will continue to rise for a host of reasons;
  4. seems like the only mod plan that is working is the one where banks actually cut principal by a significant amount; and
  5. it is horrific public policy to give people that have loan modifications a credit after 5 years if they have paid their mortgage on time over that period, but provide other folks like renters and homeowners who have paid their mortgage on the up and up no relief. 

In related news, don't…

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I guess I felt a little guilty about my outrage directed at all those fence straddlers I sent home in my last post,... so I went out and found this article just for you guys...



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I just locked a 95% 30yr fixed FHA Rate & Term Refinance loan on a 30 day lock at 5%

No points No fees No costs to client...None...our Investor is paying us to deliver these loans to them.

This is what you need to do:

Call IET Capital at 562 360-1027

Click here to e-mail the first available rep

Or apply online at

If you are not doing anything and everything you can to refinance right now you are missing out on what will most likely be a a once  in a lifetime opportunity...  I'm not going to apologize for coming across as too sale-esy or too strong here.  What I'm telling you to do is in your best interest.  There is no time to beat around the bush or think about this.  Fence straddlers Go Home!  This…

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For liability reasons it "wouldn't be prudent" for us to give you direct advice on this topic but here are some excellent sources of information for you to review with either your CPA or Tax Lawyer.


IRS Links:

IRS FAQ re: The Mortgage Forgiveness Debt Relief Act and Debt Cancellation

IRS News Update: Mortgage Workouts, Now Tax-Free for Many Homeowners; Claim Relief on Newly-Revised IRS Form

IRS Publication 4681 re: Canceled, Debts, Foreclosures and Abandonments

IRS Form 982



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$8,000 2009 Home Buyer Tax Credit Details

click here if you are looking for info on the 2009-2010 tax credit extension that passed in November 2009?

The recently approved American Recovery and Reinvestment Act of 2009, combined with favorable resale prices and interest rates, offers home buying bargain hunters a once in a lifetime purchasing opportunity.  The measure has features designed to stimulate the economy and spur home sales with the hope that this will trigger a ripple effect throughout the overall economy. Features include:


  • An $8,000 tax credit - up from $7,500 - available to first-time home buyers for purchase of principal residence after January 1 and before December 1 2009.
  • The credit applies only to homes purchased during 2009.
  • The…

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Lots of lawyers or "Law Groups" are spending lots of money trying to convince consumers Mortgage Brokers and Real Estate Agents are bad and Lawyers are good.  To me this is like a fox offering a Chicken a "safe haven" in its den from a Cat its running for its life from.

Here are some issues a homeowner should be aware of before choosing any person or company to modify their loan:

  • Who is telling me what type of loan modification results I'm likely to get?  A salesperson on commission for getting my check? or someone with experience negotiating with different lenders' Loss Mitigation Departments?
  • Who will be negotiating with my lender?  An actual attorney, or an out of work, unlicensed, former sub-prime mortgage flunkee who is doing loan mods now? …

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