Obama Plans Refinancing Aid, Loans for Jobless Homeowners, HUD Chief Says, by Holly Rosenkrantz, Bloomberg

The Obama administration plans to set up an emergency loan program for the unemployed and a government mortgage refinancing effort in the next few weeks to help homeowners after home sales dropped in July, Housing and Urban Development Secretary Shaun Donovan said.

“The July numbers were worse than we expected, worse than the general market expected, and we are concerned,” Donovan said on CNN’s “State of the Union” program yesterday. “That’s why we are taking additional steps to move forward.”

The administration will begin a Federal Housing Authority refinancing effort to help borrowers who are struggling to pay their mortgages, and will start an emergency homeowners’ loan program for unemployed borrowers so they can stay in their homes, Donovan said.

“We’re going to continue to make sure folks have access to home ownership,” he said.

Sales of U.S. new homes unexpectedly dropped in July to the lowest level on record, signaling that even with cheaper prices and reduced borrowing costs the housing market is retreating. Purchases fell 12 percent from June to an annual pace of 276,000, the weakest since the data began in 1963.

Sales of existing houses plunged by a record 27 percent in July as the effects of a government tax credit waned, showing a lack of jobs threatens to undermine the U.S. economic recovery.

House Sales Plummet

Purchases plummeted to a 3.83 million annual pace, the lowest in a decade of record keeping and worse than the most pessimistic forecast of economists surveyed by Bloomberg News, figures from the National Association of Realtors showed last week. Demand for single-family houses dropped to a 15-year low and the number of homes on the market swelled.

U.S. home prices fell 1.6 percent in the second quarter from a year earlier as record foreclosures added to the inventory of properties for sale. The annual drop followed a 3.2 percent decline in the first quarter, the Federal Housing Finance Agency said last week in a report.

Donovan said on CNN yesterday that it is too soon to say whether the administration’s $8,000 first-time homebuyer credit tax credit, which expired April 30, will be revived.

“All I can tell you is that we are watching very carefully,” Donovan said. “We’re going to be focused like a laser on where the housing market is moving going forward, and we are going to go everywhere we can to make sure this market stabilizes and recovers.”

Reviving the tax credit would “help enormously” in the effort to fight foreclosures and revive the economy, Florida Governor Charlie Crist said on the same CNN program. Florida has the third-highest home foreclosure rate in the country, with one in every 171 housing units receiving a foreclosure filing this year.

To contact the reporter on this story: Holly Rosenkrantz in Washington athrosenkrantz@bloomberg.net.


Multnomahforeclosures.com: Updated Notice of Default Lists

Multnomahforeclosures.com was updated today (August 24th, 2010) with the largest list of Notice Defaults to date. With Notice of Default records dating back over 2 years. Multnomahforeclosures.com documents the fall of the great real estate bust of the 21st centry. The lists are of the raw data taken from county records.

It is not a bad idea for investors and people that are seeking a home of their own to keep an eye on the Notice of Default lists. Many of the homes listed are on the market or will be.

All listings are in PDF and Excel Spread Sheet format.

Multnomah County Foreclosures


Demystifying Income Documentation, By Jason Hillard, Fireside Lending Group

Having discussed the importance of the home loan pre-interview, I would like to dedicate a little time to income documentation. There is a lot of confusion about this subject, and thanks to an atrociously lazy mainstream media, and some irresponsible “new media”, disagreements on the issue are still coming up in day to day business operations.

This is a list of the items your mortgage professional NEEDS from you, REGARDLESS of what type of home loan you want or what type of borrower you are.

–most recent 30 days of paystubs
–most recent statement for any depository account, ALL PAGES
–most recent statement for any other liquid assets or retirement plan
–most recent 2 years federal tax returns with ALL PAGES/SCHEDULES
–any divorce/alimony/child support documentation
–any bankruptcy discharge documentation from the last 10 years

The reality is that most loans now are what is referred to as “full doc”, which is to say that you will be subject to a financial rectal exam. There are some stated income programs coming back, but bank on your next home loan funding as a result of a full fledged inquest into your personal finances. We’re talking mortgage court-marshal, so you need to be prepared.

It may sound funny, but you really should frame your thinking around this analogy. Your mortgage professional is really taking up your case, not just packaging a home loan. The underwriter is the judge, jury, and executioner. That is why you need someone who vigorously represents you, like us. (We are not above plugging our outstanding services.)

So I am now going to explain the thinking behind each of these items, from an underwriter’s perspective. You know you are a good person who will pay back what is owed, and so do we. Let’s delve into the mind of the cagey underwriter though, and see where it leads.

30 days of paystubs
This is pretty simple, obviously. But it does go a little beyond “does this person have a job that pays legal tender?”

What the elusive underwriter is searching for is your year-to-date (YTD) numbers. Does this person work an average of 40 hours? Is there overtime pay that is consistent? What about commisions and bonuses? And is this borrower’s income consistent with the tax returns provided?

Now, some check stub formats provide a lot of information, and others leave something to be desired. However, it is estimated that 30 days worth of paystubs will provide an accurate representation of monthly income calculated on a yearly basis. “In plain english”, you say? Your YTD pay divided by the number of months so far this year minus one month equals your monthly income.

Most Recent Depository Statements
This is usually your most recent bank statement, for all accounts you have. This helps to verify liquid assets. It is very important when running your situation through the automated underwriting software to have this information accurate. This verifies the number of months of cash reserves you have and/or whether you actually have your down-payment available.

Why do we emphasize ALL PAGES? We know…your balance is on the first page. However, when an underwriter sees “page 1 of 7″ on your bank statement, they immediately want to know, and quite honestly NEED to know what the other 6 pages say. Are there car loans, lines of credit, etc. that aren’t shown on the 1st page? The underwriter needs to assume the worst at all times in order to protect their mortgage company from exposure to loan buybacks.

Other Asset & Retirement Statements
More “liquifiable” assets. Stocks, bonds, 401ks, IRAs, etc. What resources do you have that you can sell to make your payments in the event that your income disappears? That’s why we need proof of these items. Important note: for most loan programs, the value of 401ks and IRAs will be decreased by 3o per cent. The reason for this is that if you lose your job, and have to dip into these funds to make your payments, there will be about 30% in penalties and taxes you will have to pay for early withdrawal.

Last Two Years Federal Tax Returns (All Pages)
These aren’t always needed. However, we always ask for them. More and more, the automated underwriting systems are requiring them. And even if the underwriter doesn’t need them, it’s a good idea to show them to your mortgage professional. Why? Because, you will be signing a disclosure (4506T) stating that the lender has the right to request transcripts of your last 2 federal tax returns. This right will be exercised. Having a competent mortgage professional look over them upfront assures a smaller chance of “issues” coming up later. You may have what are called “2106” expenses, which reduce your income in the eyes of the underwriter. If you are riding the fence with your debt-to-income ratio, this can implode your home loan.

As for the self-employed, we will always need 2 years of federal tax returns. There’s no way around it right now.

Divorce Decrees & Child Support
Divorce is a nasty thing, and it can rear its ugly head AGAIN the next time you apply for a mortgage. Is there an alimony agreement? Alimony reduces your income. How long will it continue? Is there child support involved? Again, how long will you be obligated to pay it? Is either amount scheduled to increase? The bank has to look at the big picture when it comes to your overall liabilities, and these can play a huge role in determining your debt-to-income ratio.

Chapter 7 or Chapter 13? When was it discharged? What was included? What was excluded? The details and date of your bankruptcy discharge is a crucial piece of information. The lender must document what liabilities remain, which are cleared, and that the requisite amount of time, as prescribed by the mortgage product you are applying for, has transpired since the discharge.

Other Circumstances
You may have a pension that you are looking forward to in the future. Unfortunately, it doesn’t have any cash value now, so it cannot be considered as an asset right now. And you’re not receiving any income from it right now, so it doesn’t offset your debt-to-income ratio.

Maybe you just started your own business last year, and things are going great. Unfortunately, current underwriting guidelines do not allow us to consider self-employed income unless you have been in business for two years, as evidenced by 2 years of federal tax returns.

There are all kinds of unique situations, and we are always happy to help you determine where you stand.

Please understand that in order to truly apply for a home loan, you need to have these items prepared. We don’t ask for them just to make your life miserable. Your mortgage professional is your advocate, not your enemy. You have to present them with ALL of the information so that they can properly represent you in front of the judge. I mean underwriter.

If you have any questions about income documentation or mortgages in general, please feel free to shoot us an email! Jason Hillard, Fireside Lending Group jasonh@firesidelendinggroup.com

Important New Regulations Affecting Closing Dates!

From the Desk of Phil Querin, Partner, Davis Wright Tremaine, LLC, PMAR/OREF Legal Counsel

Although the initial annual percentage rate (APR) on a residential loan is disclosed in the Good Faith Estimate early in the purchase transaction, it can change before closing. Under the new rules enacted in the Truth in Lending Act, effective on July 30, 2009 (last Thursday), if the actual (i.e. the final) APR varies from that initially disclosed on the Good Faith Estimate by at least .125%, then there is a mandatory additional three (3) business day waiting period before the transaction can close. So if the final APR isn’t disclosed until late in the transaction, it could potentially force the three (3) business day period to extend beyond the closing date set forth in the Sale Agreement.

As you know, the Oregon Real Estate Forms (OREF) closing date is written in stone – there are no automatic extensions – so if it appears that the APR could be held up or there is any indication that the APR will change at closing, brokers would be well-advised to get seller and buyer to agree in advance to a written extension as a contingency if the final APR causes the three (3) business day period to extend beyond the scheduled closing date. OREF will be meeting shortly to consider some additional language for the new sale agreement form, although it won’t actually get printed and distributed until early next year. In the meantime, I have recommended to my clients that they may wish to consider adding an addendum to their sale agreements with language such as the following: ” In the event that Buyer’s final Annual Percentage Rate (“APR”) differs from the APR initially disclosed to the Buyer in the Good Faith Estimate by .125% or more, the Closing Deadline defined in the Real Estate Sale Agreement shall automatically be extended for three (3) additional business days in accordance with Regulation Z of the Truth in Lending Act ,as amended on July 30, 2008.”

This, of course, is subject to the review of the companies’ principal broker and legal counsel.

Multnomahforeclosures.com Updated with New Notice of Default Listings

The new update of the Multnomah Foreclosures web site (http://multnomahforeclosures.com/) includes NOD listings dating back to February of 2008. This data was added because we had it and there has been a lot of interest in this data by the visitors of the site.

Multnomah Foreclosures

Multnomah Foreclosures Web Site Updated

The new update of the Multnomah Foreclosures web site (http://multnomahforeclosures.com/) includes NOD listings dating back to February of 2008. This data was added because we had it and there has been a lot of interest in this data by the visitors of the site.

Multnomah Foreclosures

Five Ways to Avoid Mortgage Foreclosure, Tips from Expertforeclosurehelper.com

If you fail to make your mortgage payments on time or if you default on your payments, you are in danger of foreclosure. This happens more and more frequently in today’s economic climate. But it is possible to avoid mortgage foreclosure if you know what to do.

Here are a few of the options that are available to you. These are only going to be open to you if you can get the cooperation of your lender.

– See if your lender would be willing to re-arrange your payments based on your current financial situation. This may be referred to as a special forbearance and you may qualify for it if your financial situation has changed. To qualify for this you will probably have to provide information to your mortgage holder to prove that you will be able to meet the payments of the new plan.

– Another option may be a modification of your actual mortgage. This would involve refinancing the amount owed and/or extending the term of the mortgage. The goal is to reduce monthly mortgage payments so they are more affordable for you.

– You may qualify for an interest free loan from HUD to bring your mortgage up to date if you meet certain conditions. This is referred to as a partial claim and your lender can help you with the application process and explain the conditions of this type of loan. You can also contact your local HUD office for more details.

– Another way to avoid mortgage foreclosure is to consider a pre foreclosure sale. The purpose is to sell your home and clear up your debts to avoid foreclosure and damage to your credit. If you know that you will be unable to make mortgage payments even if they are lowered, this may be something to consider. You will have to see if your lender will agree to give you some extra time to sell before foreclosing.

– A final option which should be considered only as a last resort is a deed-in-lieu of foreclosure. In this case you are basically turning your house over to your mortgage institution instead of paying off the mortgage.

Even though you will lose your home this may be a better option than losing it to foreclosure. That’s because your chances of obtaining another mortgage loan at some point in the future are better than if your home is lost due to foreclosure.

These are the main alternatives that you have as you try to avoid mortgage foreclosure. Be sure to contact your lender at the first sign of financial difficulty so they can help you find the option that will be best for you.

Learn about 6 practical steps you can take to avoid foreclosure.

If it’s too late for that, find out how to stop a foreclosure by going to getforeclosurefacts.com

Expert Foreclosure Helper