HVCC Ended Appraisal Fraud?

Fannie Mae and Freddie Mac along with the Attorney General of New York created this great program called Housing Valuation Code of Conduct (HVCC) that would solve all the appraisal fraud problems we have experienced over the last few years. While EVERY ONE in the business knew this was bad idea from the beginning the public was unable to let their voice be heard.

HVCC has not only resulted in higher fees and additional headaches for the consumer, a recent report shows appraisal fraud has actually increased by 40%. Another government intervention failure and I know there will be more to come.

When will they learn to talk to experts in the business before they create or pass new guidelines/laws?

Why the Mortgage Bail Out Bill Won't Work?

There has been a lot of hype surrounding the Mortgage Bail Out Bill that is scheduled to be signed by President Bush today. However, it's all been for the wrong reason. Our government has waisted a lot of time and tax payer's money for a bill that will cause more harm than good. I'm not sure how they could get this so wrong and not have a clue.

Why won't it work and what is wrong with the bill?

1. To be eligible for the bail out you must have obtained a loan between January 2005 and June of 2007. So if you received a loan prior to January 2005 or after June 2007 you are out of luck.
2. To receive help your current lender must be willing to write a portion of your current loan balance, similar to a short sale . If you currently owe $250,000 and your home's value is only $200,000, your current lender will have to write of $70,000.00. Don't get me wrong a lot of lenders will do this, but it's a process and not an easy one. Most consumers will not be able to navigate through the process on their own and very few lenders will be willing to help as it will take a lot of time and very little in compensation.
3. The consumer will have to share any appreciation they obtain with the government, up to 100%!!! If the consumer refinances or sales their house with in the 1st year the government would get 100% of the profit. The percentage the government would receive decreases 10% every year there after but is guaranteed to receive at least 50% of the profit regardless when you sale or refinance.
4. TIME!!! There will also be a huge back log to obtain approval as all of these loans will have to be manually underwritten. Lenders are already struggling to keep up with current FHA loans that must be manually underwritten and a lot of lenders have placed tight guidelines on FHA loans that they will manually underwrite. I foresee a lot of lenders not offering this new FHA program as they will not be able to handle the workload and/or it will be cost prohibitive.

Not only will the bail out fall short in helping the millions Americans, it has made it tougher for millions of American to purchase a home. The bill will eliminate down payment assistance (DPA) programs that millions of Americans use to help purchase a house AND it raises the the down payment requirements to 3.5%. While I agree with the elimination of DPA this is not the time to do it. We have now cutoff millions of potential home owners ability to purchase a house at time that we are trying to stimulate the housing market. How will this help???

If you are in a house or mortgage that you need to get our of you need to call a mortgage specialist and discuss your options. We will provide a free consultation to review your options and help you develop a plan.

Are you Kidding Me?!?!?

As most of you know in February of 2009 all television broadcasts are moving to digital. Which means that you will be required to have a TV or attenna or converter box that can receive the digital signal. What you might not know is that the Federal Government may spend over $1.3 TRILLION to help people with conversion!!!

ARE YOU JOKING????

Your tax money is going to help ensure people don't miss out on American Idol??? I didn't know watching TV was a right as an American? With all the problems we are facing now, we can't find a better way to spend this money?

Paying For Other's Mistakes...

You came home after a hard day at work and open your pay check, and you are astonished, upset, angry when you see how much of your check has been taken my Uncle Sam. If you are still mad, STOP READING NOW!!!

Although most American home owner's made a conscious effort to purchase a house within their budget, obtain a loan that would fit their financial plan, and even struggled to make their payments in hard times, they now will be forced to help those who didn't. Many Americans don't know that their hard earned money and taxes they pay will be used to help bailout homeowners who made bad choices and may lose their home in foreclosures. The Federal Government has already allocated billions of dollars to bailout investment banks that made poor decisions and now there is legislation that is gaining popularity to bailout homeowners, AT OUR COST!!!

Politicians are quick to note that some of these homeowners were victims of fraud, and will share personal stories of these people to help them pass these bills. The fact is, a majority of these people made poor financial decisions and either purchased more house than they could afford or gambled with ARM loans and didn't follow up and refinance their house before the loan adjusted or over spent on materialistic items (like new cars, boats, electronics) and now can't make their mortage payment. And now, we have to pay for their mistakes and bail them out.

When will we as society start holding people responsible for their mistakes and make them accept the consequences of their actions??? If I don't manage my business correctly and I'm forced to close my doors the government is not going to come and save me, nor do I expect them or want them to. I understand and fully support helping those who are less fortunate, but I'm responsible for my failures and the consequences, as well as, my success and prosperity. I shouldn't have to bare the burden of others mistakes nor should I share in their prosperity. But I guess that is what our nation is becoming or already has become?

Prosperity Financial - Your Mortgage Manger

Mortgage Brokers Hitting the Books

Colorado has announced that mortgage brokers licensed to do business in the State of Colorado will have to complete 40 hours of education by the end of 2008. Until now, any one that was registered/licensed could originate mortgage loans with little or no knowledge of the industry.

This is great for the industry and consumers, as consumers can now be assured their mortgage brokers is knowledgeable about the industry and not some one who was selling cars yesterday. However, I would like to see it go a step further and require all mortgage professionals, even those who work for banks, be required to complete education courses. If we really want to protect consumers we need to make sure every mortgage broker and loan officer is required to complete classes that will provide them with the knowledge to originate mortgage loans.

Finally, They are Trying to Get it Right

A baby could have foreseen what was going to happen when Colorado implemented their mortgage licensing regulation. In last 12 months there have been a migration of mortgage hacks who could not obtain licensing because of fraud or other past issues to federally charted banks (Chase, Wells Fargo, TCF, Washington Mutal). Not any more.

It appears that State of Colorado is finally trying to look at for the consumers and ignore the lobbyist. In an attempt to help protect consumers (which is what they stated was their reason was from the beginning with mortgage licensing), Colorado will require ALL mortgage originators to be licensed by the state regardless of their employer.

Initially, only mortgage brokers that were not HUD approved were required to be registered/license, and then the state amended the law to require all mortgage brokers to be licensed, but employees of federally and state chartered banks were exempt. However, the Division of Real Estate has determined that EVERYONE who originates loans must be licensed in Colorado.

There is a big obstacle that stands in the way of making this a permanent reality. The Supreme Court has ruled in the past that federally charted banks are governed by the Office of Comptroller and Currency and are not subject to state regulations. However, the vote on the decision was very close (3-5) and, at issue then and now will be, whether federal oversight of federally chartered banks extend to their mortgage subsidiaries and granting them exemption from state regulations.

Let's hope they get this right for consumers, a fraud is a fraud, it doesn't matter if they work as a mortgage broker or Wells Fargo and they should have access to our personal information.

Prosperity Financial, LLC -Your Mortgage Manager
Lafayette, Colorado

http://www.colomortgages.com/ http://www.myprosperityfinancial.com/ http://www.3bed2bath.net/

Don't They Know What They're Doing????

Congratulations Nancy Pelosi and California home owners!!!!

A revised economic stimulus package has now passed the Senate and House that includes a temporary increase in the conforming loan limit and the upper threshold for FHA loan programs to as much as $729,000. Which will help only homeowners in a few markets around the county, but will raise rates around the country and jeopardize the stability of Fannie and Freddie.

The bill allows Fannie Mae, Freddie Mac, and FHA to purchase and guarantee loans up to 125% of the median home price in any given market for the duration of 2008. Currently, Fannie Mae and Freddie Mac are limited to loans equal to or below $417,000 regardless of location and FHA limits are based on the market (Denver Metro is about $310,000).

Regardless, this will have no impact/help on Colorado home owners, as there will be only a few if any "markets" that will have a median home price great enough to matter. Even if you have a jumbo loan now, unless you live in resort community like Aspen, Vail, or Beaver Creek your "market" most likely won't qualify.

Even though we won't benefit from the increase, we will PAY FOR IT!!! Larger loan amounts carry greater risk for the lenders, especially if they are in markets like California, Florida, Las Vegas that are suffering double digit depreciation. Fannie and Freddie must change (increase)their pricing (rates) in order to account for this additional risk they are taking on.

Another problem with this bill, is Fannie Mae and Freddie Mac are barely surviving with the current conditions in the market. This additional risk they will be adding to their portfolio is not coming at a good time and may be the straw the breaks the camel's back. And if you thinks are bad now, wait to see what happens if one or both companies fails.



Prosperity Financial, LLC - Your Mortgage Manager
Lafayette, Colorado

http://www.myprosperityfinancial.com/ http://www.3bed2bath.net/ http://www.colomortgages.com/


Purchase - Refinance - Cash-Out - Debt Consolidation - Home Equity - Great Rates

We Can't Pay for Financial Literacy?

A bill has been introduced at the Capitol to bring financial literacy to Colorado Schools. The goal of the bill is to help teach our children about mortgages , personal finances, savings, budgeting and other financial lessons.

What a great idea!!! Let's provide our children with the information and knowledge they need so they don't make the same mistakes we did. We will show them why it's important to save and invest their money, and then HOW TO DO IT. We will teach them why it's not wise to spend your all you money on things you don't need, why it's no smart to max out your credit cards, and why you don't spend more money than you make.

One problem, WE don't want to PAY for it. This new bill would cost about $550,000 to implement in schools around the state. I don't understand how the State of Colorado can't pay for a bill that will save 100 times that in the years to come. Our state spends over $13 million dollars a year for education and recreation programs for PRISONERS in our state. I have an idea, let's spend $550,000 less on convicted felons and use that money for our children.

There was no vote taken on the bill yesterday and funding options will be discussed before a vote on Thursday (1/31/08). Hopefully, they do the right thing.


Prosperity Financial - Your Mortgage Manager
Lafayette, Colorado

http://www.colomortgages.com/ http://www.3bed2bath.net/ http://www.myprosperityfinancial.com/

What you Don't Hear About in the Tax Rebate Bill?

As always, politicians can't just try to help the masses. There is always a hidden clause that finds it's way in to bills even though it has nothing in common. Most of us have heard about the tax rebate that we may receive due the economic stimulus bill the house passed, however, I bet most of you don't know that there is a clause in there that will raise the conforming loan limit from $417,000 to a maximum of $729,750.

Nancy Pelosi, a California Representative was able to include a one year increase in Fannie Mae and Freddie Mac's loan limits in to the "Tax Rebate" bill. An idea that has been discussed over the last few months with regard to mortgage reform, but many experts believe it will help on a few and will most likely due more harm than good to the overall market. Pelosi, knowing she would not be successful in passing a bill that only raised the conforming the loan limits, is now trying to piggyback on a bill that will most likely pass (what politician won't vote for a tax rebate in an election year????).

Raising the conforming loan limits would force Fannie and Freddie to assume more risk, forcing them to raise rate to account for the risk. So while, raising the loan limits would help very people (mostly California home owners and the real wealthy), the rest of us will be stuck paying higher interest rates.

You have to love politicians? I still don't understand how they can screw up every thing they do.


Prosperity Financial, LLC - Your Mortgage Manager

Lafayette, Colorado

www.colomortgages.com www.3bed2bath.net


Purchase - Refinance - Cash-Out- Debt Consolidation - Home Equity - Great Rates

Are you Kidding Me?!?!?!

Let me begin by saying, I'm a huge sports fan and while baseball is not my favorite, I understand and follow the game. But, why in the world is our government wasting their time and efforts to probe in to the steroid/HGH debacle in baseball? Don't they have better things to do? Don't we have troops fighting overseas? Are we not in the middle of a foreclosure crisis that could force our county in to a recession? Immigration? Social Security reform? Health care reform? The bottom line is, there are more important issues for the government to focus their attention and our money on.

For those of you that don't know what I'm talking about, there will be a 2nd congressional hearing on the steroid problem in baseball later this month. The House Oversight Committee has invited a few players and others that were recently named/involved in the Mitchell Report (the investigation in to steroids and other performance enhancing drugs in baseball).

What I don't understand (besides the obvious question of why are they wasting their time on this issue), is what they expect to come out of this hearing? Are they going to fix the steroid problem in baseball? I understand that baseball players are role models for our youth, and some one needs to fix this problem. However, I don't think our government should be spending time on this problem. Is this why we voted for these people to represent us? I don't ever remember once in a debate a politician discussing their solutions to the steroid problem in baseball? Is this why we pay taxes? Where are their priorities?

Hopefully, they don't spend too much time on this issue and get back to work solving American's real problems.

Prosperity Financial, LLC - Your Mortgage Manager
Lafayette, CO

http://www.colomortgages.com/
http://www.myprosperityfinancial.com/


Purchase - Refinance - Cash-Out - Debt Consolidation - Homey Equity - Great Rates

Colorado Mortgage Brokers Taking All the Blame?

Almost every day I turn on the news and see a new story about different bills in the Senate or House of Representatives or Colorado's legislative branch or the Federal Reserve trying to curb the foreclosure epidemic and they are always focused only on mortgage brokers. This is especially true for Colorado mortgage brokers. A majority of the new regulations passed by the Colorado legislative branch and signed by the governor only apply to Colorado mortgage brokers.

I will agree some thing must happen to help curb the fraud and dishonest practices that have occurred in the mortgage industry. However, these new rules/laws/regulations should apply to all mortgage professionals regardless of who you work for. These problems are not specific to mortgage brokers and I'm confident that a large portion if not the majority of the issues you hear in the news are a bigger problem in the larger banks.

There have been many surveys and reports that show consumers receive better interest rates, closing costs, programs and SERVICE from mortgage brokers, than they do from banks and direct lenders. There are a few reasons for this:

1. Mortgage brokers have the ability to shop multiple lenders and find the best mortgage for their client, a bank or direct lender only has access to the products their company offers. The mortgage brokers ability to shop with multiple lenders and programs ensures that they can find the best mortgage program for you at the best rate available.
2. Mortgage brokers don't have an endless marketing budget and most of their business is obtained from referrals and past clients, so they are more likely to work harder and offer better rates to earn repeat and referral business. Repeat and referral business is not as important to loan officers at banks because they know their marketing and banking customers will always bring more clients through the door.
3. Mortgage brokers have more flexibility than banks and direct lenders because they have lower overhead, therefore, they can offer better mortgage programs at lower rates with lower closing costs. To give you an example, I have a friend that works for a large bank here in Colorado and his rates are typically 1.5% higher than what I offer and his closing costs are usually $4,000 more. Why would people pay so much more? Because consumers trust their bank and they don't shop around (banks know this and therefore charge higher rates).
4. The mortgage industry, like many sales industry, has a high turn over rate, especially within banks and direct lenders. Many loan officers that work at banks and direct lenders change company's every 6-12 months. This job hopping leads to less accountability for loan officers, as they have left the company before a borrower realizes they have received a bad loan.

Again, I think there are bad actors on both the mortgage broker and banker channels, but for some reason mortgage brokers are being singled out when it comes to new rules/regulations/laws. I believe if we truly want to protect the consumers, all mortgage professionals should be required to follow any new rules/regulations/laws including, licensing, E&O insurance, and industry education.

Prosperity Financial - A Proud, Honest Mortgage Broker

Your Mortgage Manger

Lafayette, CO

http://www.colomortgages.com/ http://www.myprosperityfinancial.com/ http://www.3bed2bath.net/

Purchase - Refinance - Cash-Out - Debt Consolidation - Home Equity - Great Rates