Stability and Affordability Program FAQ

Hello Family, Friends, and Referral Partners:

In light of the new reform from federal government on the subject of loan modifications, many homeowners who are current, and have fulfilled their obligation to the bank will finally be recognized. Contrary to current guidelines set in place that do not allow up- to- date customer’s assistance even if default is immanent. If a homeowner lost a significant portion of their income and have been paying their mortgage from a depleting savings account, former stipulations would require these Americans to be three months late before any relief would be considered. Now, the banks will have an incentive from our government to cure future loan default situations before they become a reality. The federal government has also recognized that the formula used to calculate a loan modifications for current, and past due consumers are unreasonable. Previous statutes state that 38% of the household income should go to mortgage payments (first mortgage, second mortgage, taxes, and insurance). This formula resulted in 47% of modified loans becoming delinquent again in six months. The stimulus package will lower the gross monthly income percentage to be paid toward mortgage expenses to 31%. Here’s a look at some of the frequently asked questions:
Do I have to fall behind on my loan payments to be eligible for a loan modification?

No, but borrowers do have to demonstrate that they are in danger of staying current on their mortgage payments and that they don’t have enough income to make their mortgage payments. That could help borrowers whose interest rates are resetting or who have lost their jobs.

Who is eligible for a loan modification?

The program is open only to primary residences and homeowners who are paying more than 31% of their monthly gross income on mortgage payments. Jumbo loans, which exceed Fannie or Freddie loan limits, are not eligible. Final eligibility will be determined by your mortgage lender. Can I modify a second mortgage? No. Only first mortgages are eligible.

Is my lender required to participate?

No. Lenders participate on a voluntary basis, but the government is providing subsidies to encourage lenders and servicers to modify loans. Mortgage servicers, for example, receive $1,000 upfront for each loan modification and can receive an additional $1,000 annually for three years if the borrower stays current on the loan. (Plan is heavy on incentives to modify loans.

Will the government reduce the size of my loan?

For those eligible for the government-subsidized loan modification, borrowers can receive a reduction in loan principal of $1,000 annually for five years if they stay current on their modified loan. Borrowers who aren’t able to qualify for a loan modification because they aren’t in danger of defaulting on their loans may still be able to refinance their loans to take advantage of low interest rates.

Can I refinance my loan if I owe more than my property is worth?

Borrowers with little or no equity can refinance into a 30-year or 15-year fixed-rate mortgage at current rates as long as the amount owed on a first mortgage does not exceed 105% of their home’s current value. The refinance program is only open to borrowers with conforming loans that are owned or guaranteed by Fannie Mae or Freddie Mac. Borrowers must be able to demonstrate that they are current on mortgage payments and that they will be able to meet the new payment terms on the first mortgage.

How do I know if my mortgage is owned or guaranteed by Fannie or Freddie?

It is recommending that borrowers contact their lender at that time to see if their mortgage is owned or guaranteed by Fannie or Freddie.

What happens if I have a second mortgage?

Can I still refinance? Borrowers with more than one mortgage may be eligible to refinance as long as they owe less than 105% the value of their property on the first mortgage. The second mortgage holder will have to agree to remain in a second position on the home.

Are jumbo loan holders eligible?

No. Only those who have mortgages owned or guaranteed by Fannie or Freddie can apply, and the government-held mortgage companies don’t guarantee jumbo loans.

Here are the latest in loan modification guidelines released by the US Treasury: http://www.ustreas.gov/press/releases/reports/modification_program_guidelines.pdf.

Rates are in the low 5’s for most clients right now. It is vital you call and review your situation and take advantage of this new legislation.

How to Renegotiate your mortgage

Many Americans are finding it increasingly difficult to make their mortgage payments due to the struggling economy. If you find yourself in this situation, it may be worth calling the lender that services your loan to discuss a mortgage renegotiation. Here is how to go about it:

1. Call and ask for the loss mitigation department or the department that handles renegotiation inquiries.
2. Explain why you can’t afford your payment and be ready to prove it!
3. Send them your pay stubs and proof of monthly obligations (other debts, childcare, etc.). The goal is obviously to prove that your ability to pay the debt has declined.
4. Once the lender gets the information from you, they will run a debt-to-income analysis to see if you are a good candidate for renegotiation.
5. If they decide to renegotiate, they will send you new terms and conditions to sign.
6. Let us know if you are unsuccessful in renegotiating with your lender. You can call us for recommendations on organizations that specialize in renegotiation.
7. The government is looking to potentially contribute to the cost of re-writing the loans to slow foreclosures as soon as the new administration takes office. So keep this in mind, as it would be very helpful in adding to the willingness of the lenders to help.

Best Rates and Worst President

30 year fix is jumping between 4.75% and 5.375%. We lock only after we have a complete application in so make it easy and get approved today at www.BuyorRefi.Biz
Okay, so Chase is out of wholesale. (1) They have no more wholesale division, (2) they won’t buy loans from correspondents who got their loans from brokers, and (3) Chase’s warehouse lending division apparently won’t issue lines to mortgage bankers who do more than a small amount of third party business. As we started saying 6-9 months ago, wholesale may not go away entirely, but there’s clearly a trend against it. We hope you’re working hard on building your retail business. The good news is I’m not them and still use Chase as on of my top lenders.
If we had to guess, we’d say that yes, a year or three from now there will still be some sort of wholesale. But brokers will have significant net worth requirements, they’ll have some kind of buy-back responsibility, and there will be all sorts of barriers to entry, for the brokers and the bankers. That’s our guess.
If you measure company size by their market cap, we were curious how many of the top ten world-wide were American. The answer is five, and we found it so interesting that we’ll run the whole table here. All numbers are in billions.

1. $406 Exxon Mobil
6. $177 Proctor & Gamble

2. $214 Wal-Mart Stores
7. $169 Microsoft

3. $209 China Mobile
8. $168 Volkswagen

4. $183 Industrial Bank of China
9. $166 Royal Dutch Shell

5. $178 General Electric
10. $161 Petrochina

Of the next ten biggest, four were American.

The Chicago Tribune (owner of the L.A. Times) is in bankruptcy, the Seattle Post-Intelligencer may not survive the month, and newspapers across the land are barely staying alive. But the New York Times will be forever, right? Well, think again. They have $1.0 billion of debt on their books, $400 million of which comes due over the next five months, and only $46 million of cash reserves.

It’s always fun to compare Presidents by certain metrics. Now that Bush has finished his eight years, the following numbers were just compiled for how the Dow Jones Industrial Index did on average each year for him and a few others:

28% Clinton
11% Bush (the dad)

21% Eisenhower
6% Johnson

17% Reagan
6% Kennedy

16% Ford
0% Carter

16% Truman
-2% Bush (son)

One thing to remember, though: Correlation is not causation.

Everyone knows one or two of Satchel Paige’s six rules of life, but every so often, it’s worth reading them all: (1) Avoid fried foods cause they anger up the blood, (2) If your stomach disputes you, lay down and pacify it with cool thoughts, (3) Keep the juices flowing by jangling around lightly as you move, (4) Go very light on vices such as carrying on in society. The social ramble just ain’t restful. (5) Avoid running at all times, and (6), Don’t look back. Someone might be gainin’ on you. This all must have helped, as he was pitching in the Major Leagues at age 48.

Fannie and Freddie give borrowers more time

By Les Christie, CNNMoney.com staff writer
January 8, 2009: 1:12 PM ET

NEW YORK (CNNMoney.com) — Mortgage giants Fannie Mae and Freddie Mac have extended a moratorium on foreclosure suspensions for another three weeks, directing the mortgage servicers they work with to postpone any foreclosure or eviction proceedings through January 31.

Fannie (FNM, Fortune 500) and Freddie (FRE, Fortune 500) projected that, under the original moratorium, which began Nov. 26 and was scheduled to lapse on Jan. 9, 6,000 homeowners would avoid bank repossession and eventually qualify for mortgage modifications. The companies don’t have any actual statistics tracking how many borrowers the moratorium has helped.

The extension should give servicers more time to help these at-risk homeowners enroll in the companies’ Streamlined Modification Program.

That program is aimed at helping borrowers who are 90 days or more late on payments, who own and occupy their primary residences and who have not filed for bankruptcy to reduce mortgage payments to no more than 38% of their income. It was launched by Freddie and Fannie on December 15, 2008.

“Freddie Mac is committed to pursuing every responsible opportunity to reduce foreclosures and accelerate the return of stability to the U.S. housing market,” said Freddie Mac CEO David Moffett in a prepared statement. “Today’s announcement will provide Freddie Mac and its servicers additional opportunities to help put more families on the path to stable homeownership.”

Renters benefit too
The foreclosure grace period applies to owners of single family homes as well as multiple family houses of two to four units that are occupied by renters. In addition to cutting the number of foreclosures, it could also help some families who rent apartments remain in their homes.

In the past, when building owners were foreclosed on their renters often faced immediate eviction, even when the renters were up to date with their payments.

In December, Fannie announced a new policy for renters called the National REO Rental Policy, which allows these renters to stay in their homes as long as they have legitimate leases and keep up with their rent payments.

The company said the additional three weeks of the moratorium will enable Fannie to put this new REO Rental policy more fully into operation.

It will also give Fannie more time to make sure all of its seriously delinquent borrowers who are eligible receive help from the company’s “Second Look” initiative.

Under this program, which launched early last fall, Fannie Mae personnel work with servicers to make sure that all homeowners facing foreclosure have been contacted and told of the possible workout options available to them.

When is Bankruptcy the Answer?

Filing for bankruptcy becomes a viable option when an individual’s cash flow is “upside down” with no reversal in sight. But before proceeding, it’s important to first look at the structure of one’s assets and liabilities. For many homeowners, an experienced and qualified mortgage professional may be able to help them restructure debt and avoid bankruptcy altogether.

If this isn’t possible, then it’s critical not to let negative cash flow go on for too long. Instead, quickly seek references for a reputable bankruptcy attorney and a credit counselor. One of the worst mistakes consumers make is to borrow more money in an attempt to pay off debts.

When declaring bankruptcy, it is important to be very accurate and honest in one’s filing, especially when it comes to any recent changes in income. Remember, a bankruptcy hearing is a federal proceeding, complete with courts, judges, and representatives who coordinate with the Department of Justice, the FBI, and the IRS.

During the proceeding, homeowners should develop a budget and try to live below their means. They should use this time to save cash as well as examine the causes of their bankruptcy. Also, they should keep organized, saving all their paperwork and taking note of their discharge date. Having this information on hand will prove extremely useful in the future.

Once the bankruptcy is final, it’s time to begin rebuilding credit. Secured credit cards are an excellent place to start. This is also a good time to hire a reputable credit repair specialist who can offer advice regarding the best ways to re-establish credit. There is definitely life (and credit) after bankruptcy. The trick is to get the help and advice you need from professionals you trust.

Doctors’ Opinion of Financial Bail Out Package:

The Allergists voted to scratch it, and the Dermatologists advised not to make any rash moves.

The Gastroenterologists had sort of a gut feeling about it, but the Neurologists thought the Administration had a lot of nerve, and the Obstetricians felt they were all laboring under a misconception.

The Ophthalmologists considered the idea shortsighted. The Pathologists yelled; ‘Over my dead body!’ while the Pediatricians said, ‘Oh, Grow up!’

The Psychiatrists thought the whole idea was madness, the Radiologists could see right through it, and the Surgeons decided to wash their hands of the whole thing.

The Internists thought it was a bitter pill to swallow, and the Plastic Surgeons said, “This puts a whole new face on the matter.”

The Podiatrists thought it was a step forward, but the Urologists felt the scheme wouldn’t hold water.

The Anesthesiologists thought the whole idea was a gas, and the Cardiologists didn’t have the heart to say no.

In the end, the Proctologists left the decision up to the “folks” in Washington.

Creating a First Impression

Make an Impact

Before your next meeting with a prospective client or potential referral source, take a long look in the mirror and ask yourself, “If I was a prospect, would I want to do business with this person?”

The image you create, and the way people perceive you, has a tremendous impact on your long-term success. What you say, how you dress, your level of preparation, and your enthusiasm all influence your potential customer’s perception. The old adage is true, “You never get a second chance to make a first impression.”

Evaluate your image and ask yourself a few simple questions:

When your client calls, how are they greeted? Is your receptionist both friendly and professional? Is your voicemail system prompt? Does your personal message portray your professionalism and exceed the caller’s expectations? How soon do you return calls?

When the client first enters your office, what impression are they given? How long must they wait to see you? Do you roll out the red carpet and offer a selection of beverages? Are you prepared for the meeting?

Do you follow up with a personal hand-written note card after every meeting? Begin your follow-up campaign by sending a thank-you note to the client showing your appreciation for the opportunity to meet with them.

Is your marketing collateral unique? Make sure you stand out from the competition with marketing materials that “WOW” the prospect, especially if their first impression of you will not come from a face-to-face meeting. People are naturally attracted to confidence. Knowing your product and being a student of your craft will result in a high level of self-esteem. This, in turn, projects a highly compelling and magnetic image.

Now, get back in front of that mirror and ask yourself the question, “Would I want to work with this person?” If the answer is still no, start diving into the areas of your image that need improvement.