Refinance Before Forbearance ?

Mortgage Rates are going to fall some more in the coming months.
Right now banks, Wall Street, mortgage lenders and brokers are 
all hedging with higher margins due to covid19. The future is a bouquet of roses?

And why you ask?

Though the Ten Year Bond has bounced close to zero since
March 2020, it was traditional that lenders charged, call it
a profit of 170 over the Ten Year Bond. Right now they
are charging between 230 and 250. The reasons are as follows:
expected volatility is risky, there are millions in forbearance
who may go into default, values will likely decline, they can't
hire new people to temporarily fill the hamster seats who do
all the work, and mainly they expect rates to fall further which
risks early payoffs and losses. Rather than go into why the 
last reason is important I want to explain how lenders will see
your forbearance in the future.

If you have income it would be best to refinance now before things get thorny.

Right now Fannie Mae and Freddie Mac are working with Congress on a bill or bills to figure out how to deal with the
massive numbers of home loans in forbearance. Temporarily
they agreed to buy some of the new loans in process until June 30,2020, soon to be cut off in the coming week. Or perhaps the Federal Government will extend? Lenders who sell loans to Fannie and Freddie cannot afford to be stuck holding a low interest rate
mortgage coupon who is not paying, or making partial payments,
this will bankrupt lenders and servicers. 

So you asked for the forbearance because you are laid off? 
Try and save up the money you will need when the 180 days
or whatever they wanted to grant you are over. Only maybe 
will they give you more time and if you know anyone who
tried to get a modification in 2008, it takes time and the stress
is hard on everyone. What can you do to increase income and
cash flow? What can you sell now before everyone else does?
What other income can you pull in? Can you rent your master 
bedroom? Start with a notepad and start brainstorming. Finding
a replacement job if your company closed is going to be difficult.
Students who just graduated from Ivy League schools with 
desirable hire-able majors may have to move home. The plan
to remember during this time is that it won't be forever, things
will bounce back.

Refinancing your home is not going to be possible during forbearance, lenders will want to see you current. A Few lenders will allow you to bring the existing loan current and show you made three exact payments on time. The attestation you made to get the forbearance - the reason you used is going to come into play if you want to refinance or get a new purchase mortgage. 

The existing mortgage company is not going to extend the forbearance if you have income enough to refinance or purchase another property. 

Fannie Freddie USDA and HUD are NOT all on the same page as to forbearance there no one size fits all. The GSE's don't agree.

Here are some differences today as of 6/15/2020

So you got at 90 day forbearance back in late March from your servicer but you need longer. If loan is owned by Fannie/Freddie/FHA/USDA lenders were required in May to offer 180 days. You need to contact your servicer to extend for the extra ninety days.
Fannie maybe will automatically extend you for ninety days more being a total of 180 days.
Freddie expects you to contact you servicer and re attest. This means you must call or write a letter explaining your ongoing Covid19 related hardship. Some servicers require a wet signature. Some servicers will require you to be notarized and record the extension. You are changing the repayment terms, they are NOT forgiving any debt, only pushing it out in a variety of ways to the future.
There is not clear guidance in the Cares Act, yet.
HUD and USDA announced this week under the Cares Act that mortgage servicers must approve any forbearance no LATER THAN October 20, 2020. This date was set this week based on March 19th 2020 being the start of Cares Act.

In summary - law is fluid and changing

Corona virus shook up every institution.

Our COVID-19 Response - Freddie Mac

Search Results Web results Guide to coronavirus mortgage relief options | Consumer ...

PPP Loan Programs

PPP and Other Corona Virus Loan Programs

Help New Program Coming!

  Updates on federal loan programs:

1. On June 5, 2020, the President signed into law the Paycheck Protection Program Flexibility Act to provide borrowers greater flexibility in getting their loans forgiven. 
2. Today on June 8th, U.S. Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza released a joint statement outlining the changes. 
   • Please note that while the "covered period" of the loan was extended from 8 weeks to 24 weeks, the deadline for applying for a PPP loan application remains June 30, 2020.  If you're still interested in applying for a forgivable PPP federal loan, please do not delay. If you need help, contact me I can get you in touch with someone at no cost. You may need your accountant or CPA to assist if you are not a numbers person. Get out your IRS taxes for 2018 and 2019 if you filed and find the payroll numbers, count of employees before end of February, your tax Id number it's not that difficult
   • There is still more than $130 billion in available funds and you must apply by the end of this month.
   • On June 8, 2020, the Federal Reserve announced the expansion of the Mainstreet Lending Program to small and medium-size businesses. While these types of loans are not the forgivable type and were previously only available to major corporations, the terms may be attractive with very low interest rates and provide much more flexibility for use of funds for operating costs rather than just 75% payroll. $75 billion is being made available for these loans through the CARES Act. Please note that the Federal Reserve Board also confirmed that they will soon be announcing an additional loan program specifically for nonprofit organizations.
   • 
     
   •  Key highlights of the newly expanded Main Street Loans include:
   • Allowing eligibility for companies with fewer than 15,000 employees
   • Lowering the minimum loan size for certain loans to $250,000 from $500,000
3. • Increasing the maximum loan size for all facilities
   • Increasing the term of each loan option to five years, from four years
   • Extending the repayment period for all loans by delaying principal payments for two years, rather than one year
   • Deferring interest payments for one year
   • Interest rates set at LIBOR+3% Libor today is .67 and going forward LIBOR is going away and will be replaced by two other averaging indexes
   • Raising the Reserve Bank's purchasing of all loans to 95%

https://www.ebay.com/itm/164236141874

https://www.ebay.com/itm/164236731287

PPP Under Two Million Given a Break

The Office of Inspector General (OIG) begins its review of the Small Business Administration’s (SBA’s) implementation of the Paycheck Protection Program (PPP) provisions of Section 1102 of the Corona virus Aid, Relief, and Economic Security (CARES) Act.

Thus far:

1,661,000 loans granted in first funding totaling nearly $342.3 billion dollars

and an additional 2,441,369 loans, totaling about $183.5 billion.

As we move forward there still remains confusion and unanswered questions.

How will underserved and rural markets get loans?

How to provide butts in seats proof of employees for forgiveness?

How will deferments of loans be granted?

Why is the information publicly registered?

How to account as cash or accrual?

How are small business to prove they don't have capital to repay?

5/13/2020 

Today, the SBA released a new FAQ which addresses one question. According to SBA FAQ #46, any borrower (combined with its affiliates) with a PPP loan amount below $2 million , will “be deemed to have made the required certification concerning the necessity of the loan request in good faith.” This is due to the reasoning that borrowers with loan amounts below this threshold are less likely to have access to other sources of cash flow than borrowers who receive loans above the $2 million threshold. This means they do not have to hire a CPA, pay a grant writer and an auditor to review their books.

As time rolls forward and these new programs bring up more questions, hopefully your local bank and the SBA will have all the right answers. 

I know of seven small business owners who applied and received funding, and one who did not get funding from his existing bank who was overwhelmed. All are operating and employing the same number of persons who work to support the business and their families

Wish you all health and prosperity, now is the time for growth mode let us help each other on the path.

Update 5/27/2020 all things are liquid and please be safe out there

“Loan Forgiveness Application” (SBA Form 3508) that walks the user through a series of calculations, the outcome of which is the amount of loan forgiveness the borrower can claim. 

The form can be found here:  https://home.treasury.gov/system/files/136/3245-0407-SBA-Form-3508-PPP-Forgiveness-Application.pdf – or here: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program#section-header-8

The form is complicated and requires study.  The press release announcing the form’s publication promises additional guidance will be forthcoming.

I do see some helpful clarifications in the form which address some of the detailed questions that businesses have been asking.  I have highlighted three of them in the press release below. 

Release Date: May 15, 2020                 Contact: Press_Office@sba.gov, (202) 205-7036

Release Number: 20-41                          Follow us on Twitter, Facebook, Blogs & Instagram

 

SBA and Treasury Release Paycheck Protection Program

Loan Forgiveness Application

WASHINGTON—Today, the U.S. Small Business Administration, in consultation with the U.S Department of the Treasury, released the Paycheck Protection Program (PPP) Loan Forgiveness Application and detailed instructions for the application. 

The form and instructions inform borrowers how to apply for forgiveness of their PPP loans, consistent with the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).  SBA will also soon issue regulations and guidance to further assist borrowers as they complete their applications, and to provide lenders with guidance on their responsibilities.

The form and instructions include several measures to reduce compliance burdens and simplify the process for borrowers, including:

• Options for borrowers to calculate payroll costs using an “alternative payroll covered period” that aligns with borrowers’ regular payroll cycles [see “Alternative Payroll Covered Period” on page 1 of the form]
• Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the eight-week period after receiving their PPP loan
• Step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness
• Borrower-friendly implementation of statutory exemptions from loan forgiveness reduction based on rehiring by June 30  [see “FTE Reduction Safe Harbor” on pages 8 and 9 of the form]
• Addition of a new exemption from the loan forgiveness reduction for borrowers who have made a good-faith, written offer to rehire workers that was declined  [see “FTE Reduction Exceptions” on page 8 of the form]

The PPP was created by the CARES Act to provide forgivable loans to eligible small businesses to keep American workers on the payroll during the COVID-19 pandemic.  The documents released today will help small businesses seek forgiveness at the conclusion of the eight-week covered period, which begins with the disbursement of their loans.

VA borrower paid

VA LOANS

Va only allows Borrower paid closing cost  up to 1% with restrictions on other allowable fees. I hope this helps clarify how the Veterans Administration protects military from over paying for a mortgage

https://www.benefits.va.gov/WARMS/docs/admin26/handbook/ChapterLendersHanbookChapter8.pdf

Mortgage Forbearance

Meltdown by Caroline Gerardo  © 

Mortgage Forbearance At What Sum?

Covid19 onions?  © Caroline Gerardo

FHFA announced this week April 21, 2020 that mortgage servicers who collect payments and advance payment to investors should (but are not forced) offer four months forbearance to loans backs by Freddie Mac and Fannie Mae. The repayment period is still in a vague resolution. My suggestion is at all costs try and make the home loan payment. You won't be able to refinance or open a new mortgage until after you can show twelve months paid as agreed.  

If your loan is owned by Fannie Mae, you can contact your loan servicer or the enterprise’s Disaster Response Network for individual attention. Freddie Mac asks borrowers to contact their loan servicer directly for help. Calling your servicer may be a four hour wait time, best practice is to email them or contact them through online payment processing and follow up with a letter in writing mailed by the United States Post service. You need to include your loan number, perhaps even a copy of the bill, your best phone number, and some proof you are the real person who signed the promissory note. Each lender has their own policy and procedure to handle your request, none the same.

Ginnie Mae loans and FHA loans (those most likely to be at risk of foreclosure as they generally had lower FICO scores and less down payment, thus less equity in the home) also are eligible for four month forbearance plans. Please understand this money is not going to be erased or forgiven. Economists predict fifty percent of Ginnie Mae loans are going to end up in default. My suggestions are: sell now while value is still high, get a second job, get a family member roommate with a job, and work on plan B.

Most banks are not saying they will defer payments to the end of the loan. In order to get a modification with a government-related or MIP guaranteed mortgage agency moved “to the end” of the loan requires a new promissory note and second lien against the property in the amount of the missed payments, or an extension of the maturity date of the loan. The programs available are unique to each of these agencies and require a review of individual circumstances to determine which program will best resolve the homeowner’s hardship. This end of the loan add on requires the investor to review and approve the modification.

Some banks still own their own loans, which allows them the ability to solely determine how they address missed payments. However, they also service loans for the federal agencies described above and are limited to offering those agencies’ programs on those loans.

NONBANK servicers may not have to follow the Cares Act rule as a loan generated under the NON QM, investor and asset depletion verification has different clauses in the promissory note these are not backed by our United States government. If you have a mortgage which was opened in the past three years, the trustee and owner investor may have been a hedge fund or REIT.

In choosing to ask for forbearance BE TRUTHFUL. Expect that the servicer is going to check and verify your story in the following thirty and one hundred eighty days. This is not free money and kicking the problem towards the future may be more painful.

Ally Bank has suspended foreclosure and eviction proceedings through July 30 and offers forbearance plans of up to 120 days with no late fees — though interest will continue to accrue. Apply for help online to avoid long wait times, set up online.

Bank of America has a COVID-19 resource page that directs customers to the right support line to request help. If payments are current ask to delay your monthly payments and add the amount you delay to the end of your loan. No negative information is reported to credit bureaus. Bank of America has also paused foreclosure sales, evictions and repossessions until mid May. Call 1-800-669-6607 for more information.

Chase call 1-800-848-9380, or by log into their online account page and send a secure message. No guarantees offered but military officers can use hotline at 1-877-469-0110 to see what additional benefits might be available.

Citi serviced by Cenlar FSB. The bank does not specify what relief is being offered.

1-855-839-6253 to see if you’re eligible for assistance.

Fifth Third Bank is offering 180-day forbearance plans, interest will still accrue during forbearance, there won’t be any late fees. The bank has also suspended foreclosure activity for 60 days from March 15 contact 1-866-601-6391 or send a secure message through the bank’s online portal.

Flagstar Bank is offering automatic six-month forbearance plans for mortgage customers impacted by COVID-19. (Though take note that the bank doesn’t say whether interest will accrue during that time.) The bank is also waiving late fees for certain customers and has suspended foreclosures and evictions through May 31. request a forbearance with Flagstar online.

HSBC call the bank at 1-855-806-4657 to discuss your situation and eligibility requirements if they will offer anything

LoanDepot No specific relief is available call 1-877-420-4526

Mr Cooper Reviews all requests case by case  Pandemic Relief Plan Request here. 

PNC claims it’s considering waiving or refunding some mortgage fees right now for customers who are having trouble making payments. They recommend other programs that may be available for mortgage customers facing financial hardship right now, including postponing payments website set up to help you if you’re facing financial difficulty. It includes phone numbers to call and a hardship assistance application to fill out.

Quicken Loans offers forbearance up to three months for customers experiencing job loss, illness or lost work opportunities while caring for a family member as a result of the corona virus pandemic. At the end of the forbearance period, you’ll be able to pay with a lump sum, repayment plan or loan modification if eligible that finances the deferred amount — or you can request to extend the forbearance.

TD Bank is offering to defer payments and waive late fees for customers

call 1-800-742-2651 to see if you’re eligible.

Truist is offering forbearance plans of 90 days or more for mortgage customers of both its predecessor banks, BB&T and SunTrust

Legacy SunTrust customers should call 1-800-443-1032 and legacy BB&T customers should call 1-800-827-3722.

Specialized Loan Service login online and write a letter with your expenses and situation

U.S. Bank is offering forbearance plans of up to 180 days if you’re facing financial hardship due to the pandemic. call 1-800-365-7900.

Wells Fargo is offering to suspend mortgage payments for three months for customers hit by financial difficulties related to COVID-19. Once the suspension period is over, Wells Fargo will work with you to see if you need a longer suspension or loan modification, or if you can move the payments to the end of the loan. Sign into your online banking account and send a note through the secure message center and a bank representative will get back to you within five days.

https://www.housingwire.com/articles/fannie-mae-freddie-mac-will-only-require-servicers-to-advance-4-months-of-payments-on-loans-in-forbearance/

https://www.urban.org/sites/default/files/publication/78131/2000633-Nonbank-Servicer-Regulation-New-Capital-and-Liquidity-Requirements-Don%27t-Offer-Enough-Loss-Protection.pdf

https://www.cato.org/blog/unbearable-forbearance-quantifying-mortgage-servicers-emergency-liquidity-requirements

Protect Your Garage Against Break Ins

PREVENT GARAGE BREAK INS

Our economy is going into a different cycle. It’s time to secure your home. Let’s begin with your garage. Why you ask? Because you leave the door open, its easy to steal the remotes from the visor of your car or use many of the burglary tools on You tube to get in and steal your tools, golf clubs, bikes, and beer in the garage refrigerator. They will carry it all off, and maybe hang out inside for a day or two. Maybe your children will discover them in the act. Don't be a target to the lego bad guy just released above who will look far worse

How to prevent garage theft

Think about how a theft might enter the structure and secure the automatic door opener from:

1.  code grabbers

2. using a wire to pull the emergency release

3. hiding in or around the structure

Begin with the perimeter.

Add motion detector lights which can be purchased from your local hardware store. I prefer True Value as they will talk with you about the pieces you need, and the skill set you have or lack to accomplish adding a motion light to the exterior and perhaps interior of the garage. First you want this to be high enough to not be easy to unscrew the bulb, but also accessible for you to maintain from a ladder. Second don’t leave the ladder out for them to borrow. Many of these tips and tricks can be DIY and done in a day cheap and easy.

Trim back trees and bushes that allow hiding places for a human. I know you love that shrub by the door, but consider the height and depth of the bush- can a person hide behind it easily? Perhaps relocating the plant to another area and changing to something thorny that is airy?

Add a camera which can communicate with your cell phone.

Add a garage shield that reinforces the doors.

Change the door to have a single sided dead bolt.

What can you change to lock from inside if the garage is attached to the home or you are away on vacation?

There are many types of locks and bars to secure and reinforce the big overhead door as well as side doors. These can be inexpensive bolt locks, zip ties added to the overhead emergency release, unplug the power cord when away on vacation, and add a small interior light on a timer. 

I suggest you make friends with trusted neighbors and share keys, or have a secure nearby hidden

in a location to recover keys (not the doormat, not a flower pot, not the mailbox).

What habits leave you open to break in?

Having shiny things visible when the garage door is open or visible from a garage window. Hide your toolboxes under a tarp. Cover your golf clubs with an old blanket. It’s nice to have a pretty clean chrome garage interior but don’t allow bad guys to see what is available to steal.

Don’t leave the garage overhead open.

Don’t have garage remotes visible in and unlocked vehicle.

Can you add a peep hole between the house and garage to view before you exit?

Can you carry something that makes noise in your hand when you walk from the garage to your home?

Each house situation is unique and may take time to consider where you need to reinforce security to

Make the bad guys go pick on someone else.

Be safe. Protect your home.

Much love

C G Barbeau

NMLS 324982

(949) 784-9699

Mortgage Loans 

Best Seeds and Free Exchanges

I know you are at home wishing you could stroll the aisles of your favorite

garden supply store. My local favorite is Plant Depot and they are open

until three o'clock, but call and make sure of the hours.

In late winter my mailbox fills with seed catalogs and I spend hours reading

them just as honored as the poetry books I ordered this year when so many

book tours and release parties have been cancelled. I only go to my post office

to pick up mail every other week, to avoid my elaborate mask, glasses, hat,
alcohol spray, avoidance of touching anything, and protocol.

I want to share one of my life's pleasures with you. It's picking out seeds 

to plant for the early spring. I'm Zone 9a - yes that's like some Zodiac

sign that people say on their Match.com profile, not. 

I have posted photos of picture packets which I quite love, but serious organic gardeners or farmers would frown at the watercolor illustrations 
and a small amount of joy inside the paper folder.

For as long as I recall I've been a trader on free seed co-ops and seed trade  companies. You may search local for some affiliated with Garden Groups 
on Facebook or your local Arboretum or Botanical Garden. 
Many have annual trades, swaps or sales, and will mail out seeds to those who request them. 

You may also receive some free seeds when you request a free catalog. 

My favorite seed trade sites are:

        Seed Savers Exchange:

      Set up and account and post what you have to trade or are hoping to find. They are in Iowa. in addition to flowers, vegetables they also have herbs

Houzz Seed Exchange   offers local seed exchanges, try searching for a seed library to find one near you. 

Here is a link to a list of seed libraries:  Seed Library Social Netwo

       Backyard Gardener Seed Exchange

      GardenWeb's Seed Exchange

Seeds of Diversity (based in Canada): They have an annual Seed Exchange where members are able to obtain samples of over 1,500 varieties of seeds and plants offered by other members in exchange for return postage. They also offer "Seedy Saturdays" where members host demonstrations and different kinds of garden tips and tricks.

Seed Savers' Network (Australia): Similar to the American based Seed Saver Exchange, above.

GardenWeb 
Facebook group: Great American Seed Swap/Exchange/Trade

     North American Lily Society
    North American Rock Garden Society
You can order catalogs to be mailed to you for free from most growers. Many have lovely illustrations online and ordering is simple. Because of 2020 corona virus expect many to be short staffed, pretty much the owner is printing, bagging and mailing to you direct.

Here are some of my all time favorite companies:

Annies
request a free seed catalog 

Baker Creek The Finest with the BEST illustrations. I love this company. Super quality, tremendous descriptions and details about how to plant and what to expect.

www.rareseeds.com
Burpee
www.burpee.com
Fedco
A purist! They don’t make your grandmother’s picture packets but a poet writes the descriptions. They offer many cold hearty seeds.
https://www.fedcoseeds.com/trees/requests.htm

Johnny’s Seeds
www.johnnyseeds.com

Jung Seed
www.jungseed.com

Richters
Be prepared to spend hours here reading. Absolute cure for corona virus shut in depression, vicariously enjoy spring.
Experts on medicinal plants, advice for all types of gardeners, the finest of suppliers.
https://www.richters.com/show.cgi?page=requst2.html

Botanical interests
 free seed catalog 




Free Seed Catalog - Heirloom, Organic - Seed Savers Exchange

https://www.harrisseeds.com/collections/catalogs


John Fendley was nearly ruined by the Paradise Fire as many employees lived in Paradise, California.
I encourage you to order from this company which is a fabulous testament to America!

https://sustainableseedco.com/

gorgeous photos of flowers 

and an early peony from my garden

College 2020 Graduation Party Ideas

My son graduates college this June. We already know the UC system is not allowing
the traditional commencement, with cap and gown. My son was actually happy that
he doesn't have to "walk." High School graduation at Dana Hills was a long all day
affair where students arrived early in the morning to be searched and breath-a-lizer
tested for alcohol. I didn't know this at the time, I was the proud but oblivious Mom
helping my Mom with her walker get down on the lower field.

We had planned to take a trip together where I told him I would give him x amount
of money and he would book the flights and plan the itinerary as some of our, well,
many of our past vacations involved road trips which he hates and hiking which we
all love but was often in hot weather with mosquitoes. Our last trek was all over Alaska
partly in a rented RV and lots of hiking in the National Parks. I had the flu and son caught
a cold.

Crossing the bridge from college to work

So these are my ideas as I think travel will still be closed or not that safe in June.

1. An outdoor family picnic down by the now sinking Pilgrim in Dana Point Harbor.
I don't think they will be hauling it our soon and the backdrop of the sinking ship that
my children enjoyed in grade school pared with coronavirus graduation has a funny
ring to the idea,  will they cut it up for souvenirs before June?
I can make a brunch and they have fire pits which I would reserve. Inviting my family
and his cousins, but still allowing distance and fresh air. Then give him the IOU that
we will take a trip next spring when God willing this pandemic is over.

or
2. Do a picnic on the beach in Santa Cruz where he great grandmother liked to sunbathe
and order food. This would likely only involve myself, his sister and roommates, again
with the promise of a future trip

or
3. Send out cards for a virtual party that we Zoom. This sounds terrible as I'm already
tired of online work and videos of my wrinkles but we could all
wear clothing in the style of the year we individually wore when we graduated. Forget
about the trip and use the money to pay off all his student loans, its about the same
amount. Please keep in mind I was the sole support of my children and his father paid
nothing for all his years of schooling and college, no I take that back he gave him twenty
dollars for gas last year.  Son only had to get small loan in his last year, and I got a large
parent loan.

or
You tell me

Me making table decorations for Mom's B day