TEAM EMPOWERMENT MORTGAGE CHATTER: Sept 5; FHA Flips Within 90 Day & More than 20% Increase in Value; Top Reasons to Own A Home; Rescue the Housing Market; Delays Reach New Records; Foreclosures Hurt Your Health; Obama to Unveil Plan,Reviving Hou

“Logic will get you from A to B. Imagination will take you everywhere.” – Albert Einstein: Was a theoretical physicist




Criteria that MUST be met for an FHA Flip within 90 days:

If the property value has increased from the prior sales by more than 20%, a second full appraisal is needed, along with a property inspection that is to be provided prior to docs. The property inspector must have no interest in the property or relationship with the seller.

  • Minimum 680 FICO Score
  • Minimum 3 months reserves – Retirement accounts may be used to meet min reserve requirements
  • Minimum of 3 years continuous employment history. No employment gaps within the last 3 consecutive years allowed.
  • Max DTI of 50%
  • The name of the owner on the title report must match the seller’s name on the purchase contract
  • If the seller is an entity (LLC, Trust, etc), documentation showing legal registration of the entity such as articles of incorporation with the seal, or business license
  • The borrower(s) can have no affiliation with the entity of any kind. The correspondent does not need to provide evidence to meet this requirement. PNMAC will investigate through a public records search and other resources.
  • The property cannot have been sold in the 12 months prior to the transaction in which the seller acquired the property.
  • The subject transaction cannot include a transfer or other special arrangement between buyer and seller.
  • The property must have been fairly and openly marketed through MLS, an auction or as a For Sale by Owner offering in a newspaper or other publication. If the property is not listed on MLS, documentation such as the auction roster or the For Sale by Owner advertisement must be included in the loan package.
  • Non arm-length transactions are prohibited





There’s good reason that over half of all Americans are homeowners. Social and financial benefits are key factors when it comes to deciding to buy. Home ownership allows people to grow wealth slowly over time, to hold assets that build equity, and to bring stability into chaotic lives.

Despite these facts, homeownership rates have taken a hit since the recession in 2009. Falling home prices along with reduced access to credit has kept many would-be buyers from entering the market. According to Morgan Stanley, the current homeownership rate is around 59.2%. This is lowest rate since the Census Bureau began tracking in 1965. Has this reduction been a fear-based one?

The top benefits of homeownership haven’t changed, even in the face of a down economy. Here are the top five:

1. Savings: Be sure to check out the calculator at the end of this article. You’ll find that long-term homeownership is still a way to get big savings.

2. Tax Breaks: They’re not on the chopping block just yet. Many homeowners are still able to take the mortgage interest deduction (MID) each year, along with great rebates and credits associated with upgrades made to your home.

3. Equity: When you pay a landlord, it’s money down the drain. When you pay on a mortgage, you are paying towards owning a piece of something. You may still owe $100,000, but perhaps the home is worth $200,000. This means you have $100,000 worth of equity you’ve built up over time.

4. Budgeting: Unless you live in a rent-controlled apartment (and not many do), then each lease renewal could mean a jump in prices. A fixed-rate mortgage, however, means your monthly payment is the same amount for the life of the loan. A $1,000 a month payment on a 30-year mortgage is the same now as it will be in 30 years!

5. Security: When you own, it’s yours. You can paint, improve, and decorate. The trees and flowers are yours to enjoy — for a lifetime if you wish. Most homeowners are in neighborhoods with other homeowners, meaning more time to build relationships and friendships. Recent studies have also shown that homeowners rank themselves as healthier than their renter counterparts.

Should you rent or buy? For a strictly financial evaluation, be sure to check out The New York Times’ Interactive calculator to crunch the numbers. This advanced calculator takes into account everything from yearly costs to selling costs and broker fees.

Experts have recommended for years that if you’re planning on staying put for 5+ years, buying becomes an increasingly better deal. You have time to recoup any extra expenses found in closing costs and are now making an investment in your future through home price appreciation. Once your mortgage is paid off, you’ll have a real asset. That brings real stability.

Home affordability is at near record highs. Now is a good time to run the numbers and see if buying makes good financial sense. If it does, then you’re in store for a wealth of benefits that only homeowners can experience.






If the Obama administration really wants to save the housing market, it should speed up the foreclosure process — not prolong the inevitable, experts say.

Four years into the housing crisis, the real estate market is still teetering on the edge. The Obama administration has tried one program after another to stem the tide of foreclosures with limited success. And it is continuing to look for ways “to ease the burden on struggling homeowners,” though no new initiative is imminent, the White House said this week.

But some housing experts argue that the administration should go in a different direction than it has in the past. Instead, they say it’s time to focus on pushing many of those delinquent borrowers through the foreclosure process and putting foreclosed properties back into use.

While some of the 2.2 million loans in foreclosure can still be saved, many are too far gone, they say. Some 37% have not made a payment in more than two years, while another 34% have not made a payment in 12 to 23 months, according to Lender Processing Services.

“Loans enter into foreclosure, but never come out,” said Thomas Lawler, founder of Lawler Economic & Housing Consulting. “If this keeps going on, you have a continual overhang that never goes away.”

Delaying foreclosure increases the percentage of homeowners who’ll likely never catch up, Lawler said. In 2009, only 6% of delinquent borrowers were more than two years behind. And it means vacant properties still in limbo could fall even further into disrepair, hurting the value of the surrounding housing market.

Lawler is not the first to warn about the consequences of slowing the foreclosure process. Since the housing crisis began, several experts cautioned that foreclosure prevention efforts may only prolong the pain.

Accelerating foreclosures is tricky, however, especially since it is largely the purview of the states. But the administration could work with state officials to speed the process, especially on vacant homes, he said.

The push would come at a time when many mortgage servicers have slowed foreclosure efforts as they resolve shoddy paperwork practices. Foreclosure filings in July dropped to their lowest level since November 2007, due to processing delays and foreclosure prevention measures, according to RealtyTrac.

Getting rid of the glut

Another key to helping the housing market is facilitating the resale of homes that have already been foreclosed upon, experts said. This glut of vacant properties will continue to weigh on home values until they are sold.

“They can’t be a glacier hanging over the market with everyone waiting for it to fall,” said Jim Gaines, research economist at The Real Estate Center at Texas A&M University. “Those properties have to clear the market.”

A first step could be to sell off the foreclosed properties owned by Fannie Mae, Freddie Mac and the Federal Housing Administration. Collectively, they own 248,000 homes, about 31% of the foreclosure inventory.

The administration and the Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, are already looking for ways to unload these foreclosed homes. Earlier this month, they put out a request for ideas, including possible bulk sales of inventory. Also, they are interested in turning many of these properties into affordable rentals, which are sorely lacking in many communities. Experts interviewed agree this would be a good move for the market.

To entice investors to purchase these homes, as well as other foreclosed properties owned by banks, the administration could advocate for changes to the tax code, Gaines said. For instance, more favorable capital gains or depreciation rules could attract buyers.

The case against foreclosure

Of course, not everyone agrees that pushing people through the foreclosure process is the best solution to the housing crisis.

David Min, associate director for financial markets policy at the Center for American Progress, argues that there are many homeowners who can be saved if their payments can be adjusted to affordable levels or if some of their principal is forgiven. This particularly applies to those who are only a few months behind.

Foreclosure is very costly for servicers, homeowners and neighborhoods, he said.

“There are a lot of other options that make more sense” than foreclosure, Min said. “It’s just so destructive to value. We should be pulling every lever we can.”

Mediation, for instance, could help some homeowners avoid foreclosure, he said. Some 23 states and the District of Columbia currently have programs that require mortgage servicers to sit down with borrowers and discuss the homeowners’ options, though many began only in the last year. More than 70% of mediations end in a settlement, often restructuring the mortgage to a sustainable level, according to the center.

Helping those still current with their payments can also give the housing market — and the economy — a lift, albeit a somewhat marginal one, experts said.

For instance, the administration could revamp its refinancing program aimed at allowing underwater homeowners to take advantage of today’s lower interest rates. Improvements could include reducing some of the upfront costs and underwriting requirements.

Lowering borrowers’ monthly payments would give people more money to spend. And, for those on the edge, it could make it more likely that they will stay in their homes.

“It would be helpful to some borrowers with high rates,” Lawler said






Delinquent home owners are living in their homes longer, rent-free. Home owners with a loan in foreclosure haven’t made a payment, on average, for 20 months or 599 days–a new record, according to new data by Lender Processing Services Inc.


Of nearly 1.9 million loans that are 90 or more days delinquent–but not yet in foreclosure–42 percent of the home owners have not made a payment in more than a year, with an average delinquency of 397 days–another record, LPS reports.


The slowdown in foreclosures was most evident in judicial foreclosure states. At the current rate of foreclosure sales, judicial foreclosure states would require 111 months to work through inventories of loans that are 90 or more days delinquent or in foreclosure. On the other hand, non-judicial states would be able to clear inventories in about 32 months, according to LPS data.








The higher the foreclosure rates, the more risks to your community’s health, posits a new study.

The increasing number of foreclosures in Arizona, California, Florida, and New Jersey were found to coincide with a rise of stress-related health problems in those states, finds new research by Janet Currie of Princeton University and Erdal Tekin of Georgia State University.


The researchers, who examined hospital-visit numbers and foreclosure rates for ZIP codes across the country, found that areas in the top fifth of foreclosure activity had more than double the number of hospital visits for preventable conditions–which generally don’t require hospitalization–than the areas in the bottom fifth of foreclosure activity.


Researchers found that an increase of 100 foreclosures coincided with a 7.2 percent increase in emergency room visits and hospitalizations for hypertension, and an 8.1 percent rise for diabetes among people aged 20 to 49. The foreclosure increase was also associated with a 12 percent increase in hospital visits related to anxiety, also among the 20 to 49 age group. Plus, foreclosure increases also were found to have a nearly 40 percent jump in hospital visits for suicide attempts, although those numbers still remain low.


“You see foreclosures having a general effect on the neighborhood,” Currie told The Wall Street Journal. “Everybody’s stressed out. There is a connection between people’s economic well being and their physical well being.”






The Obama administration is expected to announce a new mortgage relief program next week to help struggling home owners stay in their home and reduce the number of foreclosures, Reuters reports.


While the exact details of the proposal are still unknown, analysts are speculating that President Barack Obama is likely to announce a plan that would help more borrowers to refinance loans, allowing them to lower their monthly payments and ward off possible foreclosure.


The refinancing plan will reportedly apply to loans backed by government-owned Fannie Mae and Freddie Mac or the Federal Housing Administration, allowing more home owners who have been unable to refinance due to poor credit, owing too much above their home’s current value, or unemployment, to take advantage of current low interest rates.


Other lawmakers who have pushed for such a move have argued that by lowering home owners’ monthly payments, it would free up cash for other spending, which will help stimulate the overall economy.



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