Mortgage Loans

7/30/2014

Fannie Makes Credit Rules Tougher

Dive in the Water's Fine
Fannie Mae is tightening up on foreclosure and short sale
rules.
Worsening? Yes

Fannie Mae announced changes to seasoning requirements for major derogatory credit events.

• Effective immediately - If a mortgage debt was discharged through bankruptcy, borrower is held to the bankruptcy seasoning requirement and not a foreclosure seasoning requirement. The lender must obtain appropriate documentation to verify that the mortgage obligation was discharged in the bankruptcy. FYI - Chapter 7 bankruptcy seasoning without extenuating circumstance is 4 years. This is an improvement to the previous 7 year wait period for a foreclosure within a bankruptcy.

EXTENUATING CIRCUMSTANCES IS HARD TO PROOVE

Docket summary (they will check what you wrote off) , proof of job loss, death certificate, proof of decline in value... about 40 pieces of paper

• Effective with applications dated on or after August 16, 2014 - The seasoning for a short sale without extenuating circumstance is 4 years. This has been worsened from what was a 2 year wait period for loans with LTVs at or below 80%, is no change for 80.1-90% LTV, and improves the waiting period for 90.1-95% LTV.

• Effective with applications dated on or after August 16, 2014 - A charged-off mortgage account occurs when a creditor has determined that there is little (or no) likelihood that the mortgage debt will be collected. A charge-off is typically reported after an account reaches a certain delinquency status, and is identified on the credit report with a manner of payment (MOP) code of “9.” Fannie will require a 4 year seasoning for charged-off mortgage accounts. This is new Fannie policy.

Translation : Mine Government is getting out of doing credit risk loans

Tougher to get a loan after short sale now...

Come on in the water's fine

Derogatory Event	Waiting Period Requirements	Waiting Period with Extenuating Circumstances Extenuating circumstances are nonrecurring events that are beyond the borrower’s control that result in a sudden, significant, and prolonged reduction in income or a catastrophic increase in financial obligations. These circumstances must be documented within the loan file.
Bankruptcy — Chapter 7 or 11	4 years	2 years
Bankruptcy — Chapter 13	· 2 years from discharge date (payments made as agreed) · 4 years from dismissal date (noncompliance with BK repayment plan)	· 2 years from discharge date · 2 years from dismissal date
Multiple Bankruptcy Filings	5 years if more than one filing within the past 7 years	3 years from the most recent discharge or dismissal date
Foreclosure1	7 years	3 years Additional requirements after 3 years up to 7 years: · 90% maximum LTV ratios2 · Purchase, principal residence · Limited cash-out refinance, all occupancy types
Deed-in-Lieu of Foreclosure, Preforeclosure Sale, or Charge-Off of Mortgage Account	4 years	2 years

1 When both a bankruptcy and foreclosure are disclosed on the loan application, or when both appear on the credit report, the lender may apply the bankruptcy waiting period if the lender obtains the appropriate documentation to verify that the mortgage loan in question was discharged in the bankruptcy. Otherwise, the greater of the applicable bankruptcy or foreclosure waiting period must be applied.

2 References to LTV ratios include LTV, CLTV, and HCLTV ratios. The maximum LTV ratios permitted are the lesser of the LTV ratios in this table or the maximum LTV ratios for the transaction per the Eligibility Matrix.

7/28/2014

Zillow Dragon Merger?

Zillow buys Trulia Active Rain.

Wisdom of the ancients predicts the future?

Mergers are a tricky thing. It’s the same as a divorce but no one uses that nasty word. Executives will be fired, employee benefits slashed, and offices closed. Consolidation of this kind is aimed at increasing earnings. This merger makes Zillow a powerhouse of old Real Estate information. The combination of brands should capture more consumers. Why do I say old? Because the information presented is outdated. Zillow is not in the free real estate information providing business, company EBIDTA is based on advertising.

A brief history: (history tells us everything)

Zillow is a Seattle based company with 817 employees. (I owned 200 shares- sold in June 2014 as a full disclosure but I hear insiders at both companies dumped shares in the past few days- someone is in trouble...) Today the price is down, but it has soared about eighty percent in the past six months.

Problems with Zillow:

1. They have been spending more on advertisements than earnings in the past sixty days. You've seen Adwords, television, Facebook, print, geez they spent on Warner cable…

2. They have a scummy sales force model that works as follows:

Zillow salesman tells Realtors to convince Lenders to pay for their advertisements (the right side banner shared with two other Realtors on listings that they have no direct contact but is implied they are perhaps the listing agent). Zillow salesman and Realtor tell the Lender to write the first check to the Realtor directly then use a credit card for the area(S) desired. A high net worth area may cost $400 a month, while a lessor one $290. Lender is told they are exclusive, but this is untrue, the same area is sold to twelve to sixteen other lenders. The assumption is Realtor and Lender will rake in leads and recoup the cost tenfold.

Zillow’s challenge now is to cut costs. Free user accounts on Active Rain, Trulia and Zillow will become less visible. Meanwhile they will promise a paid account to rise in rankings.
Trulia and ActiveRain employees I hope you packed up the photograph of your son’s little league team, the sales trophies you have and the pen given to you by the CEO because your days are numbered. Work smart, volunteer to rescue market capitalization and become invaluable –it may or may not open a job for you in Seattle, but the San Francisco office is imploding as I type.

Consumers – Good news. The new Zillow powerhouse can withstand the lawsuits from National Association of Realtors (or others for copyright infringement) will add services enhancing user search for property.

They will add better mapping, maybe drone photographs, maybe intuitive advertising directed at the consumer (much like Facebook farms all our traits and secrets). I see them adding referral sources for construction, remodeling, property management, title, and national escrow.

Consumers if you would like to get on the Multiple Listing Service live (rather than Zillow’s year old sold listings that appear open) please contact me.

These opinions are my own and not reflective of stock future price or loss.

Name in- famous merger game:

Google – Motorola

New York Central- Pennsylvania Railroad

Sears- KMART

My un-favorites are the financials.

Trulians in the Den in the Rialto building

today I wish you well. Perhaps the reason

Mayan culture fell wasn't climate change?

Merger?

Dragon fruit

7/25/2014

LOW FICO FHA

Caroline Gerardo

Senior Loan Officer

NMLS #324982

Cell	949-637-8190
Office	949-784-9699
eFax	855-883-4303

CarolineGerardo@eaglehm.com

www.eaglehomemortgage.com/carolinegerardo

Committed to Seeing You Home.

Eagle Home Mortgage

8105 Irvine Center Drive Suite #500

Irvine CA 92618

NMLS #849059 CA #813I609 Universal American Mortgage Company of California, dba Eagle Home Mortgage of California. Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act. RMLA #4130383, NMLS #252392. Certain restrictions apply. This is not a commitment to lend. Applicants must qualify.

7/21/2014

Erase Your IRS Tax Lien

Many Americans are struggling with getting back on their feet after the downturn, you know the Third Great Depression. Here is a tip that doesn't cost anything, but can greatly improve your credit and FICO score

The IRS will withdraw a federal tax lien after it has been released.

What?

You can clean up your credit and raise your FICO score by filing Form 12277

You do not need an attorney. You can file this yourself! You will have to follow up.

Form here: http://www.irs.gov/pub/irs-pdf/f12277.pdf/

This greatly benefits taxpayers who pay the tax they owe after the IRS has filed a Notice of Federal Tax Lien (NFTL) against them. Taxpayers who could not pay taxes due after notice and demand during this past economic downturn end up with a lien arising in favor of the United States upon all the property and rights to property of the taxpayer.

Unless the IRS “perfects” this lien by recording a NFTL in the public records, other creditors of the taxpayer, such as purchasers and holders of security interests, may obtain priority over the IRS. A NFTL adversely affects a taxpayer’s credit rating. Depending on the size of the paid lien and date paid it can reduce FICO scores by eighty to two hundred points. This more often harms taxpayers who own small businesses. Small business owners struggle the most with
the IRS, the State and regulatory agencies.

The program is called Fresh Start. There are terms and conditions to qualify. It takes 45 days minimum to complete and see your FICO score pop up.

You must have paid and they released the lien, and you filed

subsequent.

The IRS must release a tax lien, by issuing a certificate of release of lien, not later than 30 days after the underlying liability is fully satisfied through full payment of the tax, or is legally unenforceable (e.g., the statute of limitations for collecting the tax has expired). The IRS also has the authority, under certain circumstances, to withdraw a NFTL. If a NFTL is withdrawn, the tax laws shall be applied as if the NFTL had not been filed.

The circumstances that permit withdrawal are any one of the following:

Filing of the NFTL was premature or otherwise not in accordance with the IRS's administrative procedures.

Taxpayer enters into an installment agreement to satisfy the liability for which the lien was imposed.

Withdrawal will facilitate the collection of the tax liability.
With the consent of the taxpayer or the National Taxpayer Advocate, the withdrawal of the NFTL would be in the best interests of the taxpayer and the United States. The difference between a released or withdrawn NFTL is vital because of the way credit reporting agencies show withdrawals verses releases. Releases remain and lower FICO score, withdrawals disappear…erased from your credit history!

When a credit reporting agency receives a notice of the withdrawal of a NFTL, they delete any reference to the tax lien in the taxpayer's credit history. In contrast, when the credit reporting agencies receive a release of a lien, while they note the filing of the release in the taxpayer's credit history, the filing of the release does not operate to remove the references to the tax lien from the taxpayer's credit history.

In fact, typically a released NFTL remains noted in the taxpayer's credit history for seven years from the date of the release. (Credit reporting agencies are required to remove references to released tax liens after seven years under the Fair Credit Reporting Act.) -

File the form - follow the directions - poof magic it is ERASED in about 45 days.