We all know that many people around the country are struggling financially, many are even facing foreclosure. Terry Hoskins found himself in this same position, but he took a different tack. Now, in addition to facing financial problems, he may be looking at jail time.
So what you think? Did Terry do the right thing? Or is he absolutely NUTS and deserves to go to jail? Leave a comment and let me know.
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Check out this quick video on how to make sure none of your properties ever get broken into again!
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WASHINGTON – Dec. 1, 2009 – The Obama Administration, through the Treasury Department, announced new housing guidelines yesterday. While a series of announcements highlighted different programs, the National Association of Realtors (NAR) focused on changes that will make it easier for real estate associates to deal with short sales and “deeds in lieu of foreclosure.”
The program’s official name is the Home Affordable Foreclosure Alternatives Program (HAFA), and it’s part of an existing initiative, the Home Affordable Modification Program (HAMP). HAFA applies to loans not owned or guaranteed by Fannie Mae or Freddie Mac, which cover over half of all U.S. mortgages; however, Fannie and Freddie will issue their own versions of HAFA in coming weeks.
While HAFA’s goal is simple – increase the number of short sales and “deeds in lieu of foreclosure” by simplifying the process – the rules are complex, and it comes with 43 pages of guidelines and forms. Among other things, HAFA:
• Allows borrowers to receive pre-approved short sales terms before listing the property (including the minimum acceptable net proceeds).
• Prohibits servicers from requiring a reduction in the real estate commission agreed upon in the listing agreement (up to 6 percent).
• Requires borrowers to be fully released from future liability for the first mortgage debt (no cash contribution, promissory note, or deficiency judgment is allowed.)
• Provides financial incentives: $1,500 for borrower relocation assistance; $1,000 for servicers to cover administrative and processing costs; and up to $1,000 for investors.
The program does not take effect until April 5, 2010, but servicers may implement it before then if they meet certain requirements. The program sunsets on Dec. 31, 2012.
For more information, read the Nov. 30 HAMP news release: https://www.hmpadmin.com/portal/docs/news/hampupdate113009.pdf
To read the complete 43-page short sale guidelines, go to: https://www.hmpadmin.com/portal/docs/hamp_servicer/sd0909.pdf
How do you think this information will affect your business? (And by the way, it WILL affect your business whether or not you’re even doing short sales yet…) Please post your response below and I’ll provide some feedback once I hear from you.
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By: Pete Young
In my latest deal that closed on Friday, there were many things
that happened from the inspection that most of the people doing
rehabs might have overlooked. Part of my teaching style in my
systems and live events is to teach you things that you would
not have realized on your own.
Sometimes you must look very hard at a property to find the little
things that will add up and may cost you thousands of dollars
you had not intended to spend. I teach how to do property
inspections…one of the most important tasks that will save you
big bucks if you know what to look for. See, the buyer will hire
a property inspector to list the defects of your property as a
tool for getting a discount on the deal or will attempt to
get you, the seller, to pay for these repairs. Here’s what we had
to recognize on my last deal.
First, the gutters did not have a nice line to them. They had
sagging areas that made the property look as if it would be best
to replace the gutters,which would have cost around $800.
But for under $20.00, I got some gutter brackets that attached
with a screw gun and had a helper use a 2 x 4 stud to push up on
the gutters to get them back in line as I screwed the brackets
tightly into the fascia board. This made the appearance 100%
better and saved about $780.00.
Next problem was something that most would have missed seeing,
unless you have a trained eye. Some siding had been replaced
due to moisture rot on the bottom of the house around the entire
exterior. (Probably from the gutter situation). An inspector would
have picked up on this and made a big deal out of it. You see,
siding must not touch the ground around the house. This makes for
easy insect infestation, such as termites, and also stops some
loan institutions from financing a deal with this situation.
Commonly, siding must be about 6 inches from the ground to be
considered correct. To save money, we did not tear out the siding
and start over. We got on both ends of the side portions of the
house and measured up six inches from the ground, and then snapped
a chalk line that marked the siding all the way across each side
of the house. Then we adjusted the blade on our skill saw to _
inch and used it to trim the bottom six inches off the house. This
now was acceptable for the inspection.
The toilets in the house seemed as if they could be kept if they
were given new working parts on the inside. I put newspaper around
the bottoms and flushed a few times, then left the newspaper
overnight. When we returned the next day, we found that the paper
had absorbed some water. This indicated that the wax ring in both
toilets had been seeping a little. So by the time we added
up the moving parts or guts to be replaced, then the wax rings and
then the plumbers labor cost per hour, it was actually cheaper to
just buy new toilets. The new ones came complete with all new
parts, most installed already. Therefore, it takes the plumber
less time at his hourly rate to install new toilets rather than
rebuild the old ones. It also looks good to the buyer to see
brand new fixtures.
The cabinets were stained dark brown and had a thin layer of poly
on them. They really needed a fresh look to avoid replacing them.
I have written previously on how to prep and paint stained cabinets
for a nice white look but this is a also a great way to give a
brand new look for under $5.00. In most any store that sells
cleaning supplies you can find a product called “Old English Scratch
Remover”. Pour this dark oil onto a white terry cloth rag and
rub it over the entire cabinet area. This will not only blend in any
light and dark areas but will also give the appearance of freshly
stained and varnished cabinets. This one tip will save you easily
about $1000.00 and is one that you will use over and over in your
investing career.
Last, was the big killer. If overlooked this could easily cost you
several thousand dollars and, in many cases, it’s a deal breaker if
you do not replace it. It is also something you should use as a
discount when buying the house as an investor. Either way,
somebody is likely to have to pay for this replacement. I am
talking about polybutelyne water piping. Usually identified by
its blue coloring, this piping has a reputation of breaking and
leaking, causing thousands in water damage. Though many houses may
have it, nobody wants it. Not only is it unpopular, it’s expensive
to replace. But using the techniques I teach in Rehab 101 we got
our estimate to replace the entire pipe in the house and the
underground service from the street down from $7995.00 to about
half the cost at $4200.00. That’s a great savings on just that
item alone. So be careful not to overlook a house’s “fine print”
when you do your initial walk around. Look beyond just what you
think you see and learn to look for the less obvious repairs that
could make or break a good deal.
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Hi!
I just got involved in a conversation between two of my students regarding door knocking. One of my students, David Martin, had a VERY good response, and I thought I would share it with each of you. My little free tip for the day. Enjoy.
QUESTION:
I am searching for some input. I know some of you do door knocking to generate leads and since leads seem to be scarce from my marketing efforts, I want to approach this option. So any input would be appreciated.
Questions:
What do you look for?
How do you approach the homeowner?
What do you bring with you (paperwork) and what do you leave if no one is home?
Do you follow up with phone call if no one is home?
If others are doing this, do you concentrate on areas or deals? I know it’s about leads & competition, but I am not sure if I want to compete with others in the group for specific areas.
Kevin
RESPONSE:
I’ve got my website and my Voice Connect phone system but my postcards weren’t as affective as I would have liked in driving prospects to either one, so I decided to start door knocking to bring in some more leads for pre-foreclosure properties here in Jefferson County, MO. The good news is that my leads tripled. The bad news is that this marketing approach now takes 5x more time! Now, unlike Dave (another one of our coaching students) who is very direct in his “buying houses” approach, I’m offering options to people facing foreclosure and I’m building a follow-up list for when my people finally snap out of their FC denial mode, if they ever do.
Since driving is so time-costly I look up all missing phone numbers and cold phone call all of my EZ Data (foreclosure list) entries FIRST. I find maybe 3/4ths of the phone numbers. Then, after all the phoning, I can eliminate 10 – 20% of my list from the “No’s” I get and I feel this is worth the time I will save driving. By the way, over half of my calls are disconnects so going through 20 – 30 phone calls per week goes pretty fast. I still door-knock on the disconnects because they will almost always keep their cell phones if they’re still living at their house.
When I drive to a pre-FC house, I find fully half the houses are already vacant. But even there I leave my flyer proclaiming “WARNING” and “You have options!” The flyer lists the most common ways we can help and includes info about my 24-hr message and my website. Then I visit any neighbor I can find. If the neighbor is standoff-ish, I’ll tell them I’ve got some money to give to this missing person and then sit back and just listen to that neighbor as he or she spills the beans and tells me everything that I’ve ever wanted to know about the house, neighborhood, etc…! I mean, this is Jefferson County after all! If it’s obvious that they are still living there and I happened to miss them, I’ll go back a second time. I really doubt if my competition will be as aggressive.
I approach the homeowner by asking if they are Mr. or Mrs. (whatever name on half-sheet printout), and, with a visible sigh of relief, “I’m glad I’m finally talking to you,” and this gets their interest up, if nothing else. Then, “I’m Dave with JINO Home Solutions and we help people who are having trouble with their mortgage. Our services are always FREE to you, so if you need to sell your house or just look over any options you may have missed, we can help… but we can talk about that later. So, (looking VERY concerned for them) what’s your situation?” Over half the time they’re ready to dump on any listening ear. About 1/4 of the time I get ATCO-ed (Already Taken Care Of). I listen and mirror, then gently dismantle their denial, just like Shaun teaches, if I can. Then I ask for their phone number. (And sometimes I DON’T ask for it if I’M not interested in their situation.) If I get it, now I’ve got a lead; and I’ll give them my number.
I don’t bring any other paperwork except the $20,000 document which Shaun gave us in his course and a generic Authorization to Release form, which I do NOT plan to use, except if they know someone I’ve already helped, or if they’re somebody from church, or something really flukey like that. Otherwise I may mess with ‘em a little that “This IS a busy time. Now if we get just three or four MORE other people started before the weekend we MAY NOT be able to help you. You need to know that, too.”
I hope this helps.
Dave
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There’s a new wave of foreclosures coming, and it’s bigger than expected.
While this news is upsetting to most, it’s an excellent opportunity for us in the Short Sale business to continue to create win-win-win situations for us, homeowners, and lenders.
Click the Play button below, to listen to CNBC’s Diana Olick report on how banks have been holding on to their foreclosed properties for months, but now they’re getting ready to release them onto the market.
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I recently heard a story of a man in San Diego who is in serious trouble with his mortgage. Even though this man makes a good living (and combined with his wife’s, are well above average), this time he really thinks he’s in trouble.
This gentleman, a 63 year-old professional, refinanced his home for $618,000 at the peak of the market with an Option ARM (Adjustable Rate Mortgage). With this Option Arm, the gentleman was able to decide which of four optional mortgage plans he would pay each month. Since refinancing, he always “chose the lowest payment” – a payment that was actually less than the accrued interest.
The gentleman and his wife had been planning on selling their home and relocating to Palm Springs after retiring at the age of 65. And even though the gentleman thought he knew what he was doing, his $2200 monthly mortgage jumped to $2700, with the dreaded fact that it could possible jump to over $4000 in the near future. And as we’ve all encountered, the sad truth is that while the mortgage on the gentleman’s home is $680,000, the net worth has dropped to approximately $400,000.
But here’s where the major problem (or opportunity) lies… Even though the housing market is moving toward 
recovery, there are still over a half million Option ARMS scheduled to reset within the next four years, leading to a default rate that has surpassed that of Sub Prime mortgages.
From the $750 Billion in Option ARMs made from 2004-2007, currently about one third are in default. Many of the borrowers, even the ones with a perfect payment history, are having trouble refinancing and working through this mess.
In comparison to the Sub Prime Mortgages, the borrower of an Option ARM typically had much higher credit scores, better jobs and more to lose than the masses of Sub Prime borrowers who literally walked away from their homes and neighborhoods, in droves. The Option ARMs tend to have higher balances and when they reset have been known to double the initial monthly payment.
The industry is expecting to see 600,000 or more Option ARMs reset in the next 4 years. The four payment plans that Able and other borrowers were offered included the interest only, less than the interest (where the difference would be added onto the principal – OK, when you are accumulating equity every month – but really bites in a declining market), fully amortized over both a 15 year and a 30 year fixed-rate-mortgage.
Over 75% of all borrowers never paid more than the minimal payment – less than the current interest rate plan. This plan was set to reset at either 5 years or when the new principal balance reached a pre-determined level somewhere between 110% and 125% of the original loan. Then once the ‘cap’ is reached, borrowers have to pay down a higher balance at a higher interest rate in a shorter time period.
Like so many other exotic loans, they were great products if used properly. Unfortunately industry experts expect 81% of the Option ARMs that originated in 2007 to default with many of them ending in foreclosure.
The problem is that the loans were not only offered to those for whom they were designed but to just about everyone with a decent credit score. People were not taking on these loans because they believed their income would grow over time – they were used by homeowners who believed the equity in their house would increase and that they could refinance out of the teaser rates.
The losses from Option ARMs promises to be staggering. Another industry expert is projecting at least $112 Billion will be lost by the banks as a result of Option ARMs written between 2005 and 2007.
The good news, if there is any, is that interest rates remain low – so loans are taking longer to reach their cap and will not rest at the higher interest rate until they do reach the cap.
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Hi everyone,
We had a great call last week where I shared some of the secrets that I used to sell one of my properties in this SO CALLED DOWN MARKET in only one weekend. I literally got 6 offers on the house within 2 days, and sold the property with ease. I got a great follow up question via email in reference to our call last week, and thought I would share it with you. (See below…)
Also, on the call I offered up an incredible deal on our upcoming 4 day Short Sale Wealth bootcamp, which is close to being sold out. The event is taking place right here in St. Louis on August 27-30, so don’t wait. Book it NOW! Here’s what you’re going to get.
- One full access ticket to 4 FULL DAYS of solid short sale training ($2997 Value)
- Bring a spouse for FREE ($997 Value)
- My complete Short Sale Wealth home study course ($1997 value)
- One month of FREE access into our Platinum Coaching program ($197 value)
- 3 months of FREE email coaching
- Private Member access to the www.shortsaleintensive.com backoffice ($997 value)
These are REAL numbers of what I’ve sold each of these items for in the past, not just bogus numbers that I pulled out of a hat. This is a grand total of $7,185.00 worth of goodies that I’m putting together for you for only $997, but you have act very quickly! I only have a few seats left and this event WILL SELL OUT!!! To register for the event, simply click here http://www.shortsalewealth.com/secure/productdetail.aspx?pr_id=2 and use the coupon code “discount”. This will get you the special pricing and everything you see above.
Here’s the question I received. I hope it helps you! And by the way, if you missed the call, you can catch a replay by clicking HERE
Hi Shaun,
Listened to the replay of your call yesterday. I have a house I think I want to try it with. I have some questions though and wondered if you could provide some insight.
I planned to list the property at 120K, hoping for a relatively quick sale at that price. House will be in good shape and has a great yard. It was only a lipstick rehab – we updated some paint, carpet, light fixtures inside. A potential negative is the house is a bilevel, which are not as desirable in my area as they once were, but for this price point it offers a ton of space (4/2/2 at 1900+ sf) – though really no basement space (this all taking into account with pricing). House has really nice yard and curb appeal. Staging goes in on Saturday and we will be ready at that point.
I was thinking of listing at 110K for purposes of this “auction” method. It would clearly be a deal at that price point, and based on the numbers you were mentioning it seems to be about the same or maybe a little bigger percentage drop for expected sale price.
Questions:
* Did you only have the house open for showings on Friday 9-11 and 1-3? Did anything happen on Sat and Sun? What about people that couldn’t get off work during the day on Friday?
* Do you think it would be as successful to have it open for showings starting Tues and say no offers would be presented until Thursday at 5pm? This give more flexibility in showings but possibly decreases the auction environment. Potential concern with the limited showings model is some realtors can get pretty crabby when others are around during their showing times. Actually recently had an agent showing her buyers one of my properties when a second couple arrived to meet my listing agent, who they had never met. When they came inside thinking it was him there the agent started to yell at them to get out 
* Is there an advantage to finishing on a Sunday? I thought it might help to have a weekday end so I could verify financing with the buyer’s lender.
* You obviously didn’t need to worry about seasoning. Do you anticipate there being any issue with using this method for a quick flip? (eg, don’t want fha buyers)
* Logistically, how does the “Sunday evening calls” work. Did you specifically say you need to beat $X to be considered (at least for now)? Is there any issue with relaying everything through the buyers agents, seems there could be a big lag time for this (I’ll check with them and get back to you, or they get back together to write up the new offer and by the time it arrives it is no longer high enough). Did you just explain in advance that you would be making these calls and the agents and buyers needed to be ready on Sunday between 5-7pm. Did you explain in advance there would be this – do you want to beat the next guy – proposition, over and over?
* What do you believe is the greatest advantage of this technique, simply selling faster, selling for a higher amount, or a combination or both?
Hopefully these ramblings make sense. I’d love to give this a try, just have some issues I need to figure out how to handle.
Here was my response…
Dear Coaching Student,
Great questions!
Yes, I had the house available on Friday, and the same times on Saturday as well. We had probably 30 or 40 sets of people come through during those times. ( I lost count…) Sunday, we did not offer any showings, although we did allow two people to come by anyway. But at that point, we were also saying, “Are you a serious buyer? Because we already have 6 contracts on the property… If you have to put in a contingency to sell your house, etc… you may now want to waste your time to come by…) By that point (Sunday) we were just tired of showing it non-stop, which is why we got more picky on who we were going to show it to. That eliminated about 3 or 4 more showings.
I always like the “no show till…” approach, but you have to give people the weekend to see it. You need a REASON though to not respond to any offers until later. My reason was that I had to have a family member sign off on whatever we do, and that person wasn’t going to be in town until Sunday night at 5:00, which was true… Otherwise, agents get ticked at this!
And yes, some of the realtors WERE crabby when there were so many other people around while they were showing the house. But I don’t care about that. I want to get the house sold. Excitement helps do this. PEOPLE in the house creates excitement. For the most part though, most of the realtors didn’t really care. That why if you’re going to do it this way, you need to be at the house during these showings. It helped me because this was my own personal house, but you can see why it makes sense.
There IS an advantage to doing it on Sunday. This gives them the weekend to make the final decision and move forward. I don’t really care if they qualify for the financing yet since all they did was bid the house up. If they don’t qualify, I’ll go to buyer number 2 tomorrow and see if they still want the house.
As for seasoning, there is always that risk, so if the property is not seasoned, you’re going to have the same concerns that you would if you didn’t sell the house via this method. You could have a local bank there as well to offer financing if you wanted.
For the Sunday calls, I simply called each person and said, “$255K is now the highest and best offer. Would you like to raise your offer? If so, I need you to submit a new contract right away.” Then I just continued to do that round and round until I got the highest offer and no one would go up any more. The person that was in 2nd place knew that they were in 2nd place before I made my final decision. they just weren’t willing to go up any more than they already had. And yes, I did explain this in advance, sort of… I told everyone that I would make my decision on Sunday at 7PM, but then on Sunday around lunch time I started making calls. I started with the lowest offer, called them, and told them what the highest offer currently was. They didn’t want to increase their offer that much, so I called the 2nd lowest offer and did the same. They DID increase their offer and send me a new contract. Then, I called the 3rd lowest person and told them about this NEW high price. Rinse and repeat. Make sense?
I think the advantages were that it’s a combination of both. BUT, it may not be the best thing to do in every scenario. I knew it would work here with the numbers I was selling at, the house, the fact that I wanted to sell it quickly, etc… Could I have gotten a little more for the house if I would have held out and waited? Probably. But I wanted to move the house quickly, and I wanted to get as close to top dollar as possible. This really helped attain that.
Hope this helps,
Shaun
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Urgent – Senate Bill to Crush Our Business
I need your help!
Dear Student,
Please read the information below regarding an urgent Bill that has been passed by the House and is being considered in the Senate.
You must take action NOW as this will inpact all of us!
I don’t know if you’ve heard about HR 1728, but it’s a heinous infringement on private property rights that is likely to shut down the creative selling market. IT HAS ALREADY PASSED THE HOUSE AND IS UNDER CONSIDERATION BY THE SENATE NOW. I have attached an article about it that you should blast to your students ASAP, we need massive action on this immediately to stop it.
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House Bill 1787-Why it’s Death to Your Business and What to Do About it.
The U.S. Senate is considering a bill that would severely limit the way you do business as a creative investor and, more importantly, is an inexcusable infringement of the property rights of all Americans.
HR 1728, which you can view in its entirety here: http://www.govtrack.us/congress/bill.xpd?bill=h111-1728 deals with a plethora of mortgage-related issues, mostly around limited terms and fees on residential loans. But the heinous piece of the legislation is in section 101(3)(e), which defines the affected principals as:
‘(E) does not include, with respect to a residential mortgage loan, a person, estate, or trust that provides mortgage financing for the sale of 1 property in any 36-month period, provided that such loan-
(i) is fully amortizing;
(ii) is with respect to a sale for which the seller determines in good faith and documents that the buyer has a reasonable ability to repay the loan;
(iii) has a fixed rate or an adjustable rate that is adjustable after 5 or more years, subject to reasonable annual and lifetime limitations on interest rate increases; and
(iv) meets any other criteria the Federal banking agencies may prescribe; and
Yeah, I know, confusing. But here’s what it says: you are NOT subject to the law as long as you DON’T sell more than 1 property with owner financing every 3 years! Or, to put it another way, you ARE subject to the limitations of the law if you DO sell more than one property every 3 years via a land contract, owner-held mortgage or wrap-around mortgage-and who knows if they’ll define lease/options as owner financing, too?
So what does it mean to be “subject to the law”? Well, at the very least, it means that you will have to comply with a long, confusing, and penalty-filled piece of national legislation. Here are the types of transactions that you would be restricted from doing more than once every 36 months:
o Selling YOUR OWN HOME using a land contract or owner-held mortgage so that you can get a quicker sale, higher sale price, or better rate of interest than is available in other investments
o Carrying back owner-held second mortgages on investment properties that you sell
o Doing any kind of installment sale on residential properties including homes, condos, mobile homes, and even raw land that is zoned residential
Yes, there will undoubtedly by ways to “get around it”-some have suggested that getting a mortgage broker’s license and then learning and following the vast new set of regulations would circumvent the “problem”. But bottom line is, this law has to be stopped and it has to be stopped NOW. Here’s why:
1. Congress is trying to regulate the wrong thing. The deals we make are not “loans”-they don’t involve the transfer of money, or points or closing costs or adjustable rates or any of the other things that caused the mortgage crisis to begin with. They are INSTALLMENT SALES. We don’t give money to the “borrower” and wait for it to be paid back: we give a property to the borrower and wait for it to be paid off. Regulating this will have no effect on the foreclosure crisis
2. It is a completely unacceptable infringement on private property rights. When I own a piece of property and find a ready, willing, and able purchaser, I should be able to control the sale of that property within the existing laws of my state, which already regulate the interest rate that I am able to charge and some of the terms of the sale. The government does not have the right to tell us that we need special licensing to sell our own properties; nor do they have the right to further regulate the terms under which we can sell or burden small investors with a new set of rules that we can’t comply with.
Not only will this new law, if passed as written, effectively choke off owner financing as an exit strategy for you, it will also take away housing choice for your buyers. The millions of Americans who’ve been through foreclosure in the last 3 years can’t buy a house in any way OTHER THAN to negotiate owner financing with a seller-and HR 1728 would greatly reduce the number of properties available in this way. Millions of potential home owners who would otherwise be able to re-start the process of paying off a home, and get the tax advantages of ownership, will be reduced to renting until they are able to qualify for bank financing.
What to Do Right Now:
This bill has already passed the house and is waiting for Senate approval. Please contact your senator via email and snail mail to let him know that this law MUST NOT PASS in its current form. You can get your senator’s contact information here: http://www.senate.gov/general/contact_information/senators_cfm.cfm
As always in cases like this, you have an automatic handicap to overcome-the fact that you are a real estate investor and are therefore viewed as part of the problem. So when you write, don’t emphasize the nature of your business, just that you and your buyers would be greatly aversely affected by the new law.
We need THOUSANDS of these communications to go out in the next few days to have a CHANCE of stopping this in its tracks. So whether you’re a new or experienced investor, PLEASE take the time right now to write your elected representative!
Here are some sample letters or emails:
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IF YOU HAVE A REAL ESTATE LICENSE
Dear Senator [name];
My name is Shaun McCloskey and I am a resident of St. Louis.
I am writing you to encourage you to vote NO on HR 1728, the “Mortgage Reform and Anti-Predatory Lending Act”.
While many of the provisions of the act are positive steps toward mortgage reform, the inclusion of private owners in the act (see section 101(3)(e)) will enormously reduce the housing choice of Ohioans and the ability of home owners to sell properties in this already-slow market.
As a real estate broker, I have seen several dozen cases in the past year of home sellers and buyers coming to an agreement for an installment sale on a property that the owner desperately needed to sell (often to avoid foreclosure) and the buyer desperately wanted to buy, but could not raise the downpayment needed for conventional financing.
In all cases, these sales turned out to be win-win deals for the buyer and seller; the seller was able to get rid of an unwanted property to a buyer who loved it, and the buyer was able to get his new home at an affordable payment and interest rates with none of the usual costs (points, application fees etc) inherent in more conventional mortgage transactions.
In Missouri, these transactions are already regulated by state law: a low maximum interest rate is already in place, and both the buyer and seller are protected by other regulations at the state level.
In defense of private property rights, owners should be exempted from the burdensome and unnecessary rules that this law foists upon them. In its current form, it would all but shut off the “owner financing” market that is the only way that many sellers can sell and many buyers can buy right now.
PLEASE DO NOT LET THIS RESTRICTION ON PRIVATE PROPERTY RIGHTS PASS THE SENATE. It is unnecessary to stop private buyers and sellers from transacting business that is beneficial to both of them-they are not the problem that the bill seeks to solve. HR 1728 would be extremely harmful to thousands of your constituents.
It will exacerbate the problem OF foreclosure, as fewer sellers will be able to sell their homes to avoid it, and CAUSED BY foreclosure, as fewer buyers who have recently experienced foreclosure will be able to re-start the process of home ownership inexpensively and easily by negotiating owner financing.
Thank you for your consideration;
Shaun McCloskey
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IF YOU SELL HOUSES WITH OWNER FINANCING
Dear Senator [name];
My name is Shaun McCloskey and I am a resident of St. Louis.
I am writing you to encourage you to vote NO on HR 1728, the “Mortgage Reform and Anti-Predatory Lending Act”.
While many of the provisions of the act are positive steps toward mortgage reform, the inclusion of private owners in the act (see section 101(3)(e)) will enormously reduce the housing choice of Ohioans and the ability of home owners to sell properties in this already-slow market.
As a professional housing provider, I sell several houses each year to home buyers on installment sale [or, if you have not purchased a property, add here: "I had planned to sell several houses this year on installment sale]-a practice that would become impossible under this law in its current form.
I find that in today’s slow market, the best way for me to help buyers who desperately want to become homeowners, but who cannot raise the downpayment or meet the other terms needed for conventional financing, is to allow them to make payments directly to me.
These sales are win-win deals for both the buyer and myself; I am able to turn over homes that I’ve bought and rehabbed (often from foreclosures) to buyers who love and can afford them, and the buyer can get his new home at an affordable payment and interest rates with none of the usual costs (points, application fees etc) inherent in more conventional mortgage transactions.
In Missouri, these transactions are already regulated by state law: a low maximum interest rate is already in place, and both the buyer and seller are protected by other regulations at the state level.
Without the ability to sell homes in this way, I will no longer be able to invest in and renovate any of the tens of thousands of vacant, ugly houses placed on the market by the foreclosure crisis, and my small-but-beneficial business will literally be in ruins. Perhaps more importantly, the homeowner-buyers that I serve will be forced to rent rather than moving toward the American dream of home ownership.
In defense of private property rights, owners should be exempted from the burdensome and unnecessary rules that this law foists upon them. In its current form, it would all but shut off the “owner financing” market that is the only way that many sellers can sell and many buyers can buy right now.
PLEASE DO NOT LET THIS RESTRICTION ON PRIVATE PROPERTY RIGHTS PASS THE SENATE. It is unnecessary to stop private buyers and sellers from transacting business that is beneficial to both of them-they are not the problem that the bill seeks to solve. HR 1728 would be extremely harmful to thousands of your constituents.
It will exacerbate the problem OF foreclosure, as fewer sellers will be able to sell their homes to avoid it, and CAUSED BY foreclosure, as fewer buyers who have recently experienced foreclosure will be able to re-start the process of home ownership inexpensively and easily by negotiating owner financing.
Thank you for your consideration;
Shaun McCloskey
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IF YOU BUY HOUSES WITH OWNER FINANCING
Dear Senator [name];
My name is Shaun McCloskey and I am a resident of St. Louis.
I am writing you to encourage you to vote NO on HR 1728, the “Mortgage Reform and Anti-Predatory Lending Act”.
While many of the provisions of the act are positive steps toward mortgage reform, the inclusion of private owners in the act (see section 101(3)(e)) will enormously reduce the housing choice of Ohioans and the ability of home owners to sell properties in this already-slow market.
In the past year, I have purchased and renovated several homes-made possible only because the sellers of these homes were able to sell to me using owner financing in an unrestricted way.
For many of these property owners, seller financing was the only way to unburden themselves of an unwanted property that, in some cases, was headed toward foreclosure before I purchased it.
Without this ability, I can not continue to buy and renovate properties in the neighborhoods that so need me and my colleagues to invest our time, energy, and money in rehabbing properties. Bank financing is not an option for these properties because of the condition; only financing carried by the sellers will suffice.
Section 101(3)(e) would keep my sellers from utilizing this method of getting rid of unwanted properties in today’s market, should they have more than 1 to sell.
In defense of private property rights, owners should be exempted from the burdensome and unnecessary rules that this law foists upon them. In its current form, it would all but shut off the “owner financing” market that is the only way that many sellers can sell and many buyers can buy right now.
PLEASE DO NOT LET THIS RESTRICTION ON PRIVATE PROPERTY RIGHTS PASS THE SENATE. It is unnecessary to stop private buyers and sellers from transacting business that is beneficial to both of them-they are not the problem that the bill seeks to solve. HR 1728 would be extremely harmful to thousands of your constituents.
It will exacerbate the problem OF foreclosure, as fewer sellers will be able to sell their homes to avoid it, and CAUSED BY foreclosure, as fewer buyers who have recently experienced foreclosure will be able to re-start the process of home ownership inexpensively and easily by negotiating owner financing.
Thank you for your consideration;
Shaun McCloskey
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Shaun McCloskey
Lots of investor updates; who is hiring; apps dropping as rates edge higher
The other day my daughter was singing to herself, “Love to eat them mousies; Mousies what I love to eat. Bite they little heads off, nibble on they tiny feet.” Although that has nothing to do directly with mortgages, I hope that the girl in my UC San Diego dorm who painted the Kliban cat poem on her wall 30 years ago isn’t being foreclosed upon. (I know that this is a real stretch.) Yesterday the administration unveiled a new set of incentives for mortgage servicers on 2nd liens: the government will pay mortgage servicers (not originators) $500 upfront and $250 a year for three years for successfully modifying a second mortgage, such as a home equity loan.
The news yesterday also included the latest mortgage growth industry that is hiring. The Senate voted to hire hundreds more FBI agents and prosecutors to go after mortgage fraud and make a better attempt at dealing with the 5,000 incidents reported each month. The Senate bill is estimated to cost more than $265 million a year for the next two years, but is also expected to pay for itself because of the fines and penalties that would result from more aggressive government investigations. Another 160 special FBI agents and more than 200 support staff, including forensic analysts would be hired – a large increase from the 250 special agents currently assigned to financial fraud cases, and the Justice Department would hire 200 more prosecutors and civil enforcement attorneys, along with 100 support staff.
Speaking of hiring, remember Deutsche Bank’s MortgageIT platform? Sun West Mortgage, out of California, is picking up MortgageIT’s core platform. They are setting up the office and training their staff, and expect to start taking new business (government & agency products, including reverse and 203(k) products) next month. This is yet another example of the wholesale business model surviving.
MGIC reported its seventh straight unprofitable quarter, posting a $184.6 million loss. The loss widened from the $34.5 million they lost in the same quarter a year ago. Chief Executive Officer Curt Culver said he’s talking with regulators and the U.S. Treasury about raising funds to continue offering policies.
US Bank Home Mortgage rolled out their FNMA refinance plus program for both conforming and jumbo conforming loans. As most brokers know, this program goes up to 105% LTV, and is being used to reduce the monthly mortgage principal and interest payment or offer a more stable mortgage product (i.e. refinance from an ARM to a fixed rate or a interest only to a fixed rate amortizing). The borrower can finance closing costs, prepaid expenses and points, and get cash back to the borrower in an amount no more than the lesser of 2% of the balance of the new refinance mortgage or $2,000.
“To ensure we are protecting consumers and clients, and to aggressively mitigate fraud, the majority of Wells Fargo 
Wholesale Lending’s loan options require a processed IRS Form 4506-T. Effective May 4, 2009, the IRS will strictly enforce their policy to reject any 4506-T that is incomplete, illegible or has any information completed after the form is signed by the applicant/taxpayer.”
Wells correspondent announced that for Mandatory & Best Effort Registrations and Best Effort Locks “on and after May 4, 2009, the following Wells Fargo requirements will apply to all Fannie Mae DU Refi Plus loans: Maximum CLTV allowed: 110%, Minimum Loan Score allowed for primary: 620, Second home and investment: 680.”
Starting Wednesday 4/29/09 Everbank will accept the 2009 temporary loan limits up to $729,750.
GMAC Bank Correspondents should “note that appraisals conducted in connection with single-family mortgage loans, other than government-insured and -guaranteed loans, with application dates on or after May 1, 2009 must conform to the Home Valuation Code of Conduct. The Home Valuation Code of Conduct reinforces the independence of the appraiser and enhances the overall appraisal process to provide a greater level of integrity to the appraisal ordering process and appraiser contact. The Home Valuation Code of Conduct applies to all conforming loan products.”
The MBAA reported that U.S., driven by a big drop in refinancing demand. Refinance applications fell almost 22% in the week ended April 24, and purchase applications were down .6%. The total loan index was -18.1%. home loan applications fell last week to the lowest level since mid-March
Are you, as a consumer, more confident? The Conference Board Consumer Confidence Index, up slightly last month, improved considerably in April. The index, which samples 5,000 households, jumped from 26.9 in March to 39.2 (1985=100). Although that didn’t have a huge impact on the market, what did cause some prices changes for the worse yesterday was the fact that our stock market did not plummet, and this morning appears to be on the rise since suddenly swine flu concerns may be over-stated. And although companies around the world are exceeding profit estimates, here in the US the first three months of 2009 are expected to be the seventh straight quarter of falling U.S. profits, the longest stretch since at least the Great Depression.
The big news today, in addition to the $26 billion auction of 7-year notes and the May refunding announcement of 3, 10, and 30-yr Treasury debt next week, will be the FOMC announcement this afternoon. Look for no change in rates, but the verbiage of the announcement can often move the markets. We’ve already seen GDP, which measures total goods and services output within U.S. borders, dropped at a surprising 6.1% annual rate after shrinking 6.3% in the fourth quarter. Output has declined for three straight quarters for the first time since 1974-1975. After the news we find the 10-yr back at 3.0% and mortgage security prices worse by about .125.
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