Topic:  Newsletter Articles

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Last week, the Federal Bureau of Investigation (FBI) announced action against 205 individuals in the takedown of the largest nationwide enforcement operation in FBI history directed at organized groups and individuals engaged in financial institution fraud, including mortgage fraud. The initiative, christened Operation Continued Action, "reflects the FBI's mission and effort to identify, target, disrupt and dismantle criminal organizations and individual operations engaged in fraud schemes that target our nation's financial institutions," said Assistant Director Chris Swecker, FBI Criminal Investigative Division.   Read more...

By now word of something called Windows XP SP2 is filtering around to computer and Internet users everywhere. We told you it was on its way in a previous e-Newsletter, including advice from Microsoft that XP SP2 be deployed by business users, especially on remote systems, as soon as practical. We also warned you about some bumps in the road you might expect and encouraged you to research further, while we did so, too.   Read more...

The Department of Veterans Affairs (VA) Home Loans program has a new electronic appraisal delivery method instituted August 30. The new process replaces the former process of appraisals being sent directly to lenders and Regional Loan Centers (RLCs). Instead of e-mailing appraisals to the respective e-mail account for each local RLC and to each lender, under E-Appraisals, the name of the new initiative, VA fee appraisers now submit their appraisals to one centralized VA web site (direct URL: http://vip.vba.va.gov).   Read more...

For months now, the debate has been raging: Is the housing market boom over or isn't it? Home sales are still breaking records, Freddie Mac's 30-year fixed-rate mortgage averaged 5.83 percent and although existing single-family home sales slipped in July to 6.72 million units they're still the third-best pace on record, according to the National Association of REALTORS®.   Read more...

The lending industry has observed a strange phenomenon in recent months: Adjustable Rate and Interest-Only mortgages are becoming more popular, not less, as rates remain historically low. The percentage of borrowers opting for ARMs nationally doubled between last summer and this summer. Thirty five percent of borrowers chose ARMs in the second quarter, the Mortgage Bankers Association (MBA) reported. "They should be doing just the opposite," Richard DeKaser, Chief Economist at National City Bank, told the Cleveland Plain Dealer. Rates are expected to continue to rise and people will have missed their chance to lock in a low, fixed rate. "When rates are around six percent, ARMs should not be popular," Steve Roth, mortgage product manager at Third Federal Savings in Cleveland, also told the paper. The allure of bigger, more expensive houses and, some say more importantly, the psychology of what that first payment is going to be, are attracting people to ARMs in record numbers. Four out of 10 homebuyers nationally are expected to pick an adjustable rate by next summer, according to the MBA. Roth described it as "a trend we see across all kinds of consumer products, such as cars. [Borrowers] shop by monthly payment, not necessarily the total price of the car or home loan." How do you take advantage of the popularity of these programs -while ensuring that your borrowers aren't in for a shock in a few years when their payments nearly double? First, be up front about the details. Federal and state laws require you to provide, and borrowers to sign, pieces of paper with disclosures and examples of payments under adjustable rates. But be frank, and explain it to your customer while looking him or her in the eye. Tell them that after a certain number of years their payment could go up drastically. Explain that if they put away what they're saving off the first few years' monthly payment, they'll be in great shape to make the higher payments or to refinance down the road. Tell them property values go up, making higher LTV refinanced loans likely if they choose to go that route, but that not even property values are guaranteed to rise. Finally, tell them if they plan on staying in the home until their kindergartener graduates from high school, an ARM and especially an Interest-Only loan might not be for them. The reward of being seen as an honest broker, with their interests at heart, is an investment in future business. From your borrowers, if they do need to refinance in a few years, and from referrals. Don't cash that equity in for the immediate gratification of a commission on an ARM or I-O to a borrower who likely can't afford it. It can't be stressed enough to a borrower considering an I-O loan that they need to bank some of the savings. Explain that money market funds are better than Certificates of Deposit for what could end up being emergency reserves, because they're more liquid. Tell them that with mortgage interest being tax deductible, they should see a tax adviser about possibly re-doing their W-4 forms to allow for less withholdings. Tell them that if that turns out to be a viable option for them, to use this additional money in each paycheck to save for the future. Finally, explain that a 5-year Interest Only loan really becomes a 25-year mortgage after five years, and tell them what they would pay if they got a 25-year mortgage for the amount they want to borrow now. Explain that that's what they're facing in five years - only with possibly higher rates than are prevailing now. If they plan to sell or refinance at that time, this might be a great way to get into a bigger house for less of a monthly payment. But if this "sticker shock" dissuades someone who really can't afford it from opting for an I-O loan, you've given them good advice - and a reason to trust you and give you referrals and repeat business.   Read more...

Beginning January 1, your state may hold up a stop sign if you try to apply for certification with an affidavit, and may audit you to ensure your CE affidavit is true.   Read more...

Both American homeownership and debt have never been greater than they are today. Although 69.2 percent of Americans own a home, consumer credit debt is in the trillions, a boon to the growing number of credit counseling companies your potential clients will use to help them out of debt so they can buy a home. In fact, the Cambridge Consumer Credit Index, a monthly poll of American consumers that tracks attitudes towards consumer credit, reports that one of the top three reasons consumers called for credit counseling services this month is to improve their ability to "achieve future financial goals like buying a house or saving for retirement." Many mortgage lenders and brokers who were traditionally suspicious of credit counseling organizations are beginning to welcome them because it eventually brings better business their way in the end. But not all credit counselors are credible and some are downright criminal. The Association of Independent Consumer Credit Counseling Agencies (AICCCA), an organization that helps set national standard for quality credit counseling, provides some potential red flags consumers should avoid when deciding to work with a credit counseling firm:   Read more...

With two hurricanes down and one on the way, Florida real estate agents are worried the once-record breaking real estate market will face a slowdown due to damage clean up and apprehensive consumers too scared to put money toward a home that may be wiped away. Hurricane Charley pushed the closing of 10 to 15 percent of transactions on existing homes from August into September, and that number is expected to be even more significant in the aftermath of Frances, Ron Acker, owner of Winter Park's Re/Max 200 Realty, told the Orlando Business Journal.   Read more...

You don't spend your day behind a desk - but many of your potential new customers do, and that's when they're contacting you. Short of hiring a personal assistant, how can you connect with them and still work with your current clients? You automate it.   Read more...