4/25/2014

Zillow Scam

Zillow Go Sit in the Corner





































 Time Out For Zillow

Millions use Zillow to search for home listings and real estate valuations but Zillow doesn’t care if their listings are incorrect or two years old. Zillow profits from selling leads and advertisements, not on providing consumers information.

Now Zillow the online aggregator of Real Estate old and outdated information has found new pockets for revenue source. Before 2009 it was the Title Representatives paying referral fees for leads, or gifts to encourage business from Real Estate agents. That is gone. Now after reforms Title Reps offer a ten dollar plastic or paper item with their company logo.

Zillow sales agents in the Irvine and Seattle offices push a scam on lenders and consumers. Here is how it works:

Real Estate Agents need leads. Realtors want to be seen on Zillow. To be ranked high (visible first) on Zillow one must pay for advertisements. Even the reviews and ratings of agents on zillow.com are known in the industry to be fakes. Real Estate business is highly competitive and the market has been tough. Most agents can’t afford the $200- 500 per zip code monthly fees to be ranked.

Sales staff of Zillow in Irvine and Seattle pitch to real estate agents that they can team up with a lender and “split” the cost of the advertisement (wink wink). The Real Estate agent invites every lender to be their partner in Zillow ads. To the ears of a hungry loan officer who needs leads this sounds great.

A discussion begins about what area, zip code, and monthly costs are to be listed. Emails and calls from Zillow sales representative and the Realtor instruct the lender they must make the first payment directly to the Realtor. Lender goes ahead and writes a check to the Realtor and gives credit card or bank account routing number and account number to Zillow sales person to be billed monthly going forward. Savvy Realtors hit up many lenders offering a variety of locations to potential lending partners.

The problem is: After a month or so: no, none, zero leads and no business develops from the partnership. Zillow leads are not loyal buyers. Zillow provides wrong emails, wrong phone numbers that customers entered into Zillow’s sign up. Zillow customers don’t want to be hounded with phone calls and emails so they provide wrong number or an email they never open. The lender begins to complain and checks around to discover they are paying not half but one hundred percent of advertising that features the Realtor at the top left of the page but buries the lender scrolled down to a dungeon where no consumer will ever read.

Why does the consumer care?

Some agents steer business to their lender of choice, as in the one who pays the most advertisements for them. They put the lender in the counteroffer as “must cross approval with my lender at imortgage.” Borrower is forced to apply with the Listing agent’s lender. Buyer’s agent plays along to close the deal. Listing agent’s lender is never the cheapest or best choice. I have seen five transactions this month where listing agent put their lender in the forced cross approval position. The lender first offers verbally unbelievable rates, tells scare tactic tales, and in the end closes with a higher rate.

Borrowers pay for that advertisement that the Lender ran with the agent. The Borrower pays in the form of hidden overage, higher rates and fees. It is a scam.

Zillow has drawn more real estate consumers since 2004 to their site. They have grown the business to a profitable stock. American real estate consumers want information to find bargains and deals. New platforms are arising that compete with Zillow. I have mobile software that offers Consumers access the MLS in real time rather than Zillow’s old listings and errors. There are nine new contenders for online Real Estate shopping, and more in beta trials.

 Shame Zillow, go sit in the corner.


Is Richard Cordray is investigating Zillow’s advertising practices? The Consumer Financial Protection Bureau takes its job seriously to protect individuals from unfair business practices.

Zillow and its media staff made no comment or response to my request for their take on this story.

 

4/11/2014

Laguna Niguel Bird Houses


 
Some photographs I took with my iphone of birdhouses in Laguna Niguel and
San Clemente California this week as a treat for the eyes.
Reminder for spring:
If you have birdhouses clean them out for new nests in the coming months!





4/07/2014

Niche Mortgage Birdhouse or Castle

How to Close your Problem Mortgage?

ceramic house

Not all houses are the same. Bird houses are each special as well.
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Wooden bird house 





handmade bird house

barn style bird house

4/03/2014

Freddie Tightens Underwriting AGAIN



Freddie Mac rules for conversion of a property to investment or second home revised. More reserves for the property conversion are now required , and you will have to qualify with both payments and extra appraisals needed.

 

Borrower converting Primary Residence to second home:

 

If the Borrower is converting a Primary Residence to a second home, and purchasing a new Primary Residence, the following requirements apply:
 
The monthly payment amount for the property being converted to a second home and the monthly housing expense for the subject property must be included in the monthly debt payment-to-income ratio in accordance with the requirements • The reserves requirements must be met.

 

Borrower converting 1-unit Primary Residence to an Investment Property:

 If the Borrower is converting their 1-unit Primary Residence to an Investment Property and purchasing a new Primary Residence, the following requirements apply:


The Seller can use rental income from the property being converted to qualify the Borrower, provided that:

The loan-to-value (LTV)/total LTV (TLTV)/Home Equity Line of Credit TLTV (HTLTV) ratios of the property being converted are less than or equal to 70%, as evidenced by an appraisal with at least an exterior-only inspection that meets Freddie Mac requirements

 
And the Borrower's federal income tax returns must reflect a two-year history of managing investment properties when a signed lease is used to determine the net rental income

The rental income is documented with a copy of the fully executed lease and, in addition, the receipt of a security deposit from the tenant with evidence of the deposit into the Borrower's designated account

 

Borrower converting 2- to 4-unit Primary Residence to an Investment Property:

 
If the Borrower is converting their 2- to 4-unit Primary Residence to an Investment Property and purchasing a new Primary Residence, the following requirements apply:

• The Seller can use a maximum of 75% of the gross rental income from the unit previously occupied by the Borrower to qualify the Borrower, provided that:

o The LTV/TLTV/HTLTV ratios of the 2-to 4-unit property being converted are less than or equal to 70%, as evidenced by an appraisal with at least an exterior-only inspection that meets Freddie Mac requirements, and o The rental income is documented with a copy of the fully executed lease and the receipt of a security deposit from the tenant with evidence of the deposit into the Borrower's designated account • Rental income for the units not previously occupied by the Borrower may be used to qualify the Borrower

 

Additional reserves required for Mortgages secured by Primary Residence when Borrower's current Primary Residence is pending sale or being converted to a second home or Investment Property:

Pending sale or conversion of 1- to 4-unit Primary Residence to second home or Investment Property - Additional required reserves:

• Six months for the subject property, and • Six months for property pending sale or being converted

 When loan-to-value (LTV)/total LTV (TLTV)/ Home Equity Line of Credit TLTV (HTLTV) ratios are <=70% for property pending sale or being converted:

• Two months for the subject property, and • Two months for the property pending sale or being converted

Translation:
You are buying another home and not selling your current residence.
You must have rental properties on your past two years taxes to be able to use any rents.
If you do not own any rentals, you will need to qualify with both principle interest taxes insurance and Home Owner Association fees.
Freddie Mac is tightening up once more for the millionth time. Fannie will follow suit on conventional loans.
Tighten that belt on the American Home Buyer again Freddie.