Maxine Waters Wants Trial Now! - 08.11.10 | Vincent K. Mohr : First Priority Financial, Inc. : Fairfield, CA

Pegg02: (August 13, 2010 11:49am)

Frank - That's a smart looking T-Shirt you got there!

Oregon CR Appraiser: (August 12, 2010 7:48am)

joecolorado- I agree with you that it's extremely important not to misrepresent which hat you're wearing when dealing with a client (appraiser/broker hat) but USPAP covers the issue of being dual licensed and as long as you do what you're supposed to... no problem. 5Pence and I wasn't talking about doing $35-$50 online BPOs for an income stream- we were talking about appraising AND selling and you're right in that 20 years local real estate appraisal experience will draw purchase clients to us. That is a fact and there is nothing wrong with using your appraisal real property experience to also sell. Since you're not going to get a listing without doing a CMA/BPO... I don't see it as quicksand at all. Most who become dual licensed will be careful not to misrepresent which hat they're wearing and that part of your post I completely agree with! BTW... my firm's first sale produced a $7,000+ sales commission, so we're not talking about 'a couple bucks'. (same as 25 $300 appraisals)

5pence: (August 11, 2010 8:00pm)

If they stay in there too long they always get corrupted it appears, without exception.

Bryan/MortgageFinanceGroup: (August 11, 2010 6:44pm)

Obamonomics is a disastrous failure, and Maxine Waters is a piece of crap.

joecolorado: (August 11, 2010 3:05pm)

problem is with bpo's and cma's if the request is made to an appraiser and it is provided under the guise of an appraisers expertise,guess what.....you are an appraiser doing an appraisal.So dont get fooled into doing cheap reports thinking you are in the clear because its "not an appraisal" 'cos its a bpo or a cma,If it walks like a duck etc....your license will be on the line if you produce a figure with information that doesnt comply with USPAP if you were commissioned as an appraiser. BUT, even if you weren't,it will be difficult/impossible to prove that you were not using your expertise as an appraiser to produce a credible result. seems like quicksand to venture away from the USPAP standards just for a couple of bucks.

5pence: (August 11, 2010 2:57pm)

Godlike - pick a side? Up the middle. 60% of all americans think this is the worst Congress ever. Vote them all out. Vote the person, not the party.

GODLIKE: (August 11, 2010 1:36pm)

Just read an article in a local business journal that was said Blacks are being hit hardest by the mortgage issues. It went on to say they were the ones that were put into these home loans at low downpayments (apparently against their will) and we needed more programs to make sure they didn't lose their homes. You're damned if you don't allow people to get into a home for next to nothing and you're damned if you do. Now I don't know which race is hit the hardest, nor do I think it matters, but the do-gooders need to pick a side and then stick with it. This waffling back and forth is making my head spin.

rhodyloans: (August 11, 2010 1:12pm)

I don't see a link to find out anymore about the new FHA guidelines on wrapping a non-purchase second mortgage into a refi. Can you tell me where it is? Thanks.

Oregon CR Appraiser: (August 11, 2010 12:36pm)

Personally, I think it's the way to go in these hard times and am telling my appraiser friends to get dual licensed, before licensing gets more strict. Realtor organizations here have mostly been talking about raising the bar and I suspect that's going on in other states. There's about 700 residential appraisers in Oregon and maybe 22,000 realtors... so the RE sales side is obviously a bit overcrowded. Take a cheap online state course and you shouldn't have much problem getting licensed. And with your local experience, pick your 3 favorite brokerages to talk with. Focus on their recurring monthly costs and fee structure... maybe even before you get licensed; then you'll know what the deal is. Most brokerages will love having you and you can also look at getting into the REO side of sales... we both know that'll probably be good for years to come. Good luck!

5pence: (August 11, 2010 12:34pm)

Just had a CMA done and it came in at $219k when the house is worth $290k. Did an appraisal recently where the BPO was $200k and the appraisal, with 3 identical model matches they overlooked came in at $275k. Yeah they do need edumacating lol. Thanks for the advise.

Oregon CR Appraiser: (August 11, 2010 12:26pm)

Sorry 5Pence, keep getting mixed up whether you're an appraiser or not, so thanks for the clarification. I opened my own real estate firm too, so hasn't been easy overall. I considered hanging my RE license at a local brokerage at first, but desk costs, etc.. a little hard to gulp down. Personally, I don't think you should migrate... I think you should do both. The pendulum is swinging back our way and I believe the appraisal profession will pay off once again before we retire. You're right in that your experience will set you aside from other local brokers that mostly just printout listings... don't even give a real CMA, just printouts- then list it for whatever the seller says. THAT doesn't serve the client very well and they need people to tell them a REALISTIC list price! And in doing either CMA or BPO... you know the drill, but almost no requirements to meet (no USPAP hanging over your head).

5pence: (August 11, 2010 11:58am)

Oregon CR Appraiser : I was thinking of moving in being a licensed RE broker. I can use my appraisal education as credits to the license. How is that field working out for you and would you recommend a newbie to try it out? I haven't had 1 call that lead to a job since the CFPB was passed.

joe: (August 11, 2010 11:51am)

@godlike: "Clinton may have been out of office for 10 years now but..As has been pointed out jillions of times it wasn't poor originations, it was the poor loan program standards - that originated with Clinton. Sure that wasn't the only issue but the root cause goes back to him." Pointing something out over and over again does not make the argument any more cogent. If you'd like to correlate high default rates attributable to Fannie and Freddie loans, then show how looser guidelines are responsible and that somehow Bill Clinton was responsible for them, be my guest. But a far stronger case can be made for the lack of oversight of the companies like AIG, Bear Stearns et al, who were able to securitize some pretty crazy stuff and package them into AAA rated bonds because of Credit Default Swaps and CDOs. The Perfect Storm was created by the combination of 100% financing, Stated Income loans and low credit criteria--and I defy you to tie that to the Clinton Administration.

5pence: (August 11, 2010 11:51am)

@Oregon CR Appraiser : I'm at the point in my career where I really don't have any questions about how, but have many more questions about why - such as why the seller concessions aren't being adjusted out when you have the purchase and sale agreement right in front of you and why that idea is considered laughable because the market is perfect. Perfect market? Ohh really AI? I've got 20+ years too. Seen it all, but thanks for the offer.

Oregon CR Appraiser: (August 11, 2010 11:44am)

I'm also a licensed real estate broker, so I understand both sides of the fence.

5pence: (August 11, 2010 11:44am)

Good article on Robert Rubin, the father of derivatives and de-regulation and Obama's key campaign advisor now saying he wanted to regulate toxic derivatives and is not responsible at all for the economic meltdown. He got rid of Brooksley Borne because she wanted to regulate derivatives and his disciples, Geithner and Summers, Obama installed as guardians of the US economy. These guys belong in jail - no fi, ands or buts. IMHO.. http://www.huffingtonpost.com/robert-scheer/the-rubin-con-goes-on_b_678098.html?utm_source=DailyBrief&utm_campaign=081110&utm_medium=email&utm_content=FeatureTitle

Oregon CR Appraiser: (August 11, 2010 11:41am)

Sorry 5Pence- posts and email are such a flat medium... but yes, your last comment sounds better. FYI, I'm one of the most thorough (anal) appraisers you'll ever talk with, so if you ever need help with a specific appraisal question ... feel free to ask. =)

5pence: (August 11, 2010 11:30am)

@jcollins - further explanation. If your house is actually worth $400k why would you put up $5k of your own money? If it's to help get the kid out of the basement into his own place I can understand. That's why seller concessions of 3% have been typical for years and why it's allowed by the GSE's and FHA is coming around. I'm thinking, at today's prices though, 3% is large, maybe too large of a seller concession. They do influence prices to rise exponentially unless there's limits put on subsequent sales and flipping. I know that doesn't sound good to you brokers, but consider how crazy prices have risen and how we got here. I still 100% blame the banks and it's not right we should have to shoulder the burdens of their mistakes. What was once a nice tight righteous lending system is now the red light district with pimps, ho's and drug dealers and worst of all - the banks are the cops hired to clean it up.

5pence: (August 11, 2010 11:13am)

Oregon CR Appraiser - Hence my comment about it not being accepted appraisal practice, yet. It's not an exact science but isn't the purpose of appraising to be as accurate as possible? Let me and my business rise and fall on my accuracy in valuations. That's the problem, "not an exact science" becomes an excuse to be sloppy and how skippy appraisers keep employed. @jcollins. The definiton of market value is cash equivalency, so yes, if there is a $5000 concession that raises the price to $400k, then the cash equivalency is $395k, if the market supports even that.

Oregon CR Appraiser: (August 11, 2010 11:12am)

Most real estate professionals realize hiding material facts can often be both a federal and state crime. So here's a good test I heard, whether or not something is a MATERIAL FACT. Go into the bathroom and close the door.... look in the mirror and ask yourself if revealing the information will make any difference. If the answer is yes- it's a material fact and should be appropriately disclosed (state law can vary, such as some states prevent reporting if a murder occured in a home). I believe we all have a responsibility to use peer pressure and appropriate training, in order to get the bar raised back a little higher in the real estate industry. Personally, that's why I love the daily Frank & Brian show so much!! Well, that and they have the big b@lls it takes to call out stupid stuff and is another reason why I think so many of us admire them (the calling out stupid stuff part). =)

slickvicspicks: (August 11, 2010 10:55am)

They indicated refinance, not c/o...and I am not endorsing the DPA programs. I am simply stating that we eliminated the DPA's as non profit (BS) companies and have replaced them with government grant programs. NSP as a national program, many more local govie programs that are federally funded. I fund on plenty of FHA loans that are backed by a federal grant program...at least with the non profit DPA's the money came out of the sellers proceeds. Whether non profit or govie endorsed federal monies, that borrower doesn't have any skin in the game and a greater chance of default....we just subsidize it now on a federal level instead of accepting the sellers proceeds.

Oregon CR Appraiser: (August 11, 2010 10:45am)

5Pence, I think your "infalliable" way to adjust concessions "out of the comparables" makes a wrong assumption that other market grid adjustments will be accurate, so that any remainding difference can be attributed to contributory value of concessions. That's not right. The appraisal process is NOT an exact science, partially because market grid adjustments are partially subjective. TO JCollins... there is really no definitive way to determine a home's "worth" or "value"; and especially when concession data is hidden from brokers and appraisers in a local market. (Yes, brokers also need that info to perform accurate BPOs.) When concessions are openly reported, then market participants can feel better that comparables are actually providing real support. There is nearly always a range of value from comparables and appraisers won't usually purposely come in low... in other words, we don't need "help" from so called professionals willing lie in order to make deals.

[email protected]: (August 11, 2010 10:35am)

The guys we not wrong regarding the max LTV on 85% on a cashout FHA loan. New subordinate financing, for the purpose of this guideline, is defined as secondary financing: Originated concurrently or within six months prior to the closing date of the subject FHA refi transaction, and Not part of the original purchase transaction. Equity Line of Credit: If any portion of the funds of an equity line of credit in excess of $1,000 was advanced within the past 12 months and was used for purposes other than repairs and rehabilitation of the property, the line of credit is not eligible for inclusion in a no cash-out refinance. So what this is saying is that if you have a second and it is seasoned for 12 months with no draws, you can incluede it in a no-cash out FHA refinance. Which maxes out at 97.75%

pinkribbonhomeloans: (August 11, 2010 10:34am)

Hey Boys, I wanted to let you know I also tried Doreen Aldana because I saw them on here and I agree with WOLV. You should not be promoting that company.I did his 30 day trial but never received the promised CD. Although I did received an email apologizing that the sales person had told me the wrong price and my amount was being adjusted UP! When I tried to cancel DURING the trial, they billed my card anyway and refused to refund the money they charged to my card. As of today they will not return my calls or emails. OR MY MONEY. BEWARE!!!!!!!!!!!!!!!!!!

jcollins: (August 11, 2010 10:23am)

I completely unders seller con. but is the home worth the price or not. If my home is worth 400,000 and I sale it to with a 5000 con. is my house only worth 395000 now or did I sell it for less then it is worth.

5pence: (August 11, 2010 10:15am)

Oregon CR Appraiser - no, we're on the same page. I'd like to see sales concessions listed i the MLS for every sale. That would be a great solution in adjusting out concessions from the comparables. However, the way it's set up, you have to call the realtor and trust what they say. They may or may not tell you the truth, especially if they have a similar sale down the street that needs that higher price to appraise out - or any other number of personal reasons for not telling the whole truth. Or, if there are concessions and without them you won't make value and might lose a client, you'll overlook calling and finding out from the realtor how much those concessions are. It's too predicated on the whims of the banks, realtors and appraisers. Since we don't have concessions in the MLS listings of sales, the only other infallible way to reflect seller concessions is to adjust them out of the comparables you have chosen to reflect the market. This is not accepted practice, but it works.

ssfranny: (August 11, 2010 10:10am)

So we have an increase in monthly MI for FHA, now you can't pay off a 2nd not used to buy the house over 85% LTV and NOW changes to 2 year work history??? Good bye FHA... hello Fannie/Freddie!!!!! so what the diff between the two other than the downpayment is less??? Goof lord this is why the housing market is so colosally f-ed up stupid programs like this that prevent even more people to buy or refi. I've been in the business for 15 years can someone please ecplain to me what the F difference does it make if the second was used to buy the house or not??? If it wasn't are the a much higher credit risk? Uhh no. Jeez no wonder people are getting out of the mortgage business in droves. Nov can't get here soon enough to throw all these liberal anti-business socialists out on their arses.

5pence: (August 11, 2010 10:07am)

Interesting, Diane Olick just said that the government is going to stop trying to stop foreclosures and is going to concentrate on keeping people in their homes - hence the new HUD policy I mentioned earlier.

Oregon CR Appraiser: (August 11, 2010 10:06am)

Appreciate your patience with the long post, but as you can tell... hidden concessions is a GIANT pet peeve of mine.

Oregon CR Appraiser: (August 11, 2010 10:04am)

But even after the last investor/owner absorbs losses and the cycle starts over… a pyramid scheme like this quickly prices first time home buyers out of the market and that is what has happened in Oregon. Think about it; if like-property sales occur about every 3 months, they will pyramid onto each other and in theory, by the end of a single year concessions will by themselves inappropriately support a price for similar homes $24,000 higher ($6,000 x 4 quarters=$24,000). Sales with hidden concessions actually create their own higher comparable price to base subsequent sales on (basic concept of an illegal flip).

Oregon CR Appraiser: (August 11, 2010 10:03am)

When concession data is hidden and everyone is fooled into thinking the “CASH” price is higher than it really is, then appraisers end up supporting values they wouldn’t otherwise support. When you remember that each sale with hidden concessions results in a comparable that supports a higher subsequent appraised value, then the true danger of the scheme becomes apparent. It is not the $6,000 hidden in a single sale so much as it’s the $6,000 hidden in sales throughout the year, that very much act like a pyramid scheme as to how they build on themselves with each transaction… easily increasing local property values quickly in a market until it runs out of steam and the last ones holding the property are at risk for loss (including securities investors).

Oregon CR Appraiser: (August 11, 2010 10:03am)

Quotes from the 11/2/07 New York State Bar formal ethics opinion 817: “Seller’s counsel is unaware whether the lender’s underwriting guidelines, or those of Fannie Mae and Freddie Mac, discuss a price “gross up” and is concerned that there is no assurance that the “ultimate purchaser of the loan” would be aware of the selling price “gross up” used to offset the seller’s concession. Moreover, counsel is concerned that the reporting of a “grossed up” selling price on the purchaser’s mortgage application and the HUD-1 Settlement Statement may violate federal law, and in particular 18 U.S.C. §§ 1001, 1010. “By manipulating the sales price in the manner described by the inquirer, either the originating lender or the secondary investors may be deceived as to the true market price of the house. The deception is the credit to the buyer given by the seller to offset the increase in purchase price. The credit is not justified by any additional property or rights to be sold to purchaser, or by a legitimate charge against the seller on account of any actual costs assumed by it and otherwise payable by the buyer.”

Oregon CR Appraiser: (August 11, 2010 10:02am)

FINALLY some negative feedback about DPAs. I haven't said anything before, but 5Pence- some posts have been off regarding concessions and how appraisers should or could handle them. Realize that not all appraisers follow what our education teaches us. Fannie Mae's definition of "MARKET VALUE" clearly states concessions should be removed from contract price when used as a comparable in an appraisal and gives examples. It would be difficult to find even one appraiser that doesn’t agree hidden concessions (for comparables) causes real estate to be overvalued. I've been an appraiser for 20 years and use of concessions locally, really only became prevalent after 2000. As I already stated in another post, in 2005 Oregon Assoc of Realtors & MLS worked out in the open to prevent brokers from continuing to report concessions to appraisers (as they had always done up to that point). I think the real problem with use of concessions is that some believe it ok to hide them from appraisers.

5pence: (August 11, 2010 9:55am)

Re: Credit Union - add in no check fees (printed free), group rates on car insurance, no ATM charges, candy at the teller windows, and more. When I last was in B of A to pull my money out, the teller told me they were cutting back and that's why they had no candy at the counter and no coffee and no cookies at the entry. I mean, B of A!!! The teller told me they were cutting back on the teller "perks" too. Why give the big banksters your money to gamble with at at least a 10 to 1 leverage ratio. For every $1 you put in there it's $10 for them to gamble with. Do they pay you, as a bank customer, part of the profits if they win? Noooo. But you get to pay if they lose. With a credit union you do share in the profits as you're a part owner. Just sayin....

W.R.Buchanan: (August 11, 2010 9:53am)

Guys: stacking checks is nothing new. Banks have always posted Debit to your account BEFOR thye post credits. gosh, I wonder why? DUH! This new scam is just a variation of the old way of doing things. Why do you think Banksters hire the best and brightest out of the best colleges? It's so they can figure out new ways to SCREW YOU! Lawyer talking to bank CEO "This plan is definately illegal, so we should only do it once." Until someone gets physical with these people, nothing will change. We've got to take the money out of politics, or else this country is doomed! Randy Randy

MortgageAngel: (August 11, 2010 9:37am)

Whoops, almost forgot to leave my mark - KILROY WAS HERE! lol just kidding, that's not my mark. This is: www.moslereconomics.com Counter Insurgency, Deficit Terrorist Unit Signed - STORMY

MortgageAngel: (August 11, 2010 9:33am)

cpappraisal - Actually the policy of stacking checks is in the fine print. It was bundled neatly inside Check Clearing for 21st Century or whatever that thing was called.. lol you didn't see it? Neither did I... until I bounced a check unwittingly. Google Wachovia +Stormy "The financial sector is a lot more trouble than it's worth." -Warren Mosler

5pence: (August 11, 2010 9:31am)

cpappraisal: I'm pretty sure that's covered in the new bill. But, how long do we have to wait? You know, if they had just broken up the big banks these "constrictions" on their money making activities wouldn't be felt by the banksters as such an affront. Now they're going to make the taxpayer pay even more to sustain their bloated, fat, oversized, gluttonous, greedy, backstabbing, career robbing arses. Didn't Congress think of that? Get your money out of the big banks. Their fees are just going to keep going up. I'm with a credit union now, no monthly maintenance fees, no check cashing fees and free cookies and coffee when you go inside. They keep all their mortgage loans and invest in the community.

5pence: (August 11, 2010 9:22am)

Hey, maybe with that $50k I can sue Cuomo

cpappraisal: (August 11, 2010 9:14am)

Ok...I know this is a little off subject but I saw on the news this morning that Wells has admitted to putting through the smallest checks first to obtain the most overdraft fees from customers. It was reported that all of the big banks have been doing this and have made over a billion in overdraft fees by doing this out of our pockets!!!!!

MortgageAngel: (August 11, 2010 9:13am)

aka STORMY Down payment assistance programs are a sham. Just keep the 6% seller contribution and go to bed - done deal. same - same! Jeez laweez.. I've got enough paperwork and hoops of fire made in China to jump through these days! K-I-S-S Not only that- it definately won't save taxpayers any money since federal taxes don't actually pay for anything. The only thing that can possibly 'save' the taxpayers money is a reduction in taxes! Simple-dimple! See? #justclarifying www.moslereconomics.com Counter Insurgency, Deficit Terrorist Unit

slickvicspicks: (August 11, 2010 9:11am)

I don't see any change in the mortgagee letter that precludes the 2nd being inclusive in the 97.75 rate/term guides pre-existing (unless under 12 months seasoned). Also, DAP was replaced by federal housing assistance programs. So instead of the seller paying the DAP from their proceeds, gues who does...that's right...another cost passed along to the rest of us. As far as the default rate decreasing since the termination of public DAP...well so has the default rate on the rest of loans made since lenders have constricted UW guidelines...

jcollins: (August 11, 2010 8:56am)

Bono Vox: I can admit that some of them were bad and had a little neg. effect. that is why I said they should have tougher gudielines. SKIN IN THE GAME. Once your equity is gone you no longer have it. This is a market of people find religion or an accountant. When you run the numbers it makes to much sense to let it go. It maybe wrong but, in todays world it is unfortunitly, I am going to look out for me and the H%^ll with the rest.

W0LV: (August 11, 2010 8:48am)

Hey Guys Just to let you know I used a couple of the companies that you promoted on TBWS and I would not use Doren Aldana EVER again. I did his 30 day trial and when I tried to cancel after the trial, they billed my card anyway and refused to refund the money they charged to my card. I WOULD NEVER PROMOTE HIM AGAIN!!!

5pence: (August 11, 2010 8:45am)

By unemployed, I mean finally helping those that can't receive unemployment benefits, like independent contractors.

5pence: (August 11, 2010 8:35am)

Finally, on MSNBC it was just announced that help for the unemplyed is on the way. HUD will be offering $50k loans at zero interest for 2 years or until steady work is found. Another program is pecifically for the highest unemployed states. As much as I hate bailouts, it's about time they did something for the unemployed due to government and bank excesses.

[email protected]: (August 11, 2010 8:31am)

Deputy Assistant Secretary Vicki Bott stated yesterday that the up coming changes to FHA MI/UFMIP will be rolled back to October 4th. Send me an email and I will forward her letter!!!

GODLIKE: (August 11, 2010 8:30am)

I love VA and USDA both are 100% loans but those are both loans that are conditional upon other things. You must have served in the armed forces or you must be buying a home in a less poplulous area and they aren't available to the general public at large. VA has always performed well and many attribute that to the fact that Veterans feel they've earned a right to a 100% loan. USDA has a much shorter history and who is to say they won't end up the higher default rates. When they were Farmers Home Administration the incentive to pay your bills was the fact that if you pooped in that nest you had no source for a future loan since there were very few loan sources available in the country. Now things have changed and USDA comes right up to the city limits and there are multiple sources for rural money.

GODLIKE: (August 11, 2010 8:26am)

Clinton may have been out of office for 10 years now but the good he did lives on. As has been pointed out jillions of times it wasn't poor originations, it was the poor loan program standards - that originated with Clinton. Sure that wasn't the only issue but the root cause goes back to him.

joe: (August 11, 2010 8:15am)

@Godlike: Yeah, that flaky VA "nothing down" scheme has really wrecked the economy. They are defaulting at a rate of...oh, wait. The default and delinquency rate for VA loans is actually *lower* than for FHA and conventional loans.

Bono Vox: (August 11, 2010 8:14am)

JCollins - Seller DAPs did have a negative impact on the market. That's why FHA pulled them in the first place. There was a significantly higher number of derogs and foreclosures for those using Seller DAPs. You can say you like them and want them, but go in with your eyes open and know what you're getting.

jamiebuchmeier: (August 11, 2010 8:11am)

Hey Frank and Brian, FHA still allows rate/term refinances to include the payoff of junior liens > 12 months old.

joe: (August 11, 2010 8:09am)

@Godlike: Clinton has been out of offfice for over 10 years now. Get over it. The mortgage problem is far more attributable to the exotic programs and loosey-goosey underwriting on loans that were purchased/insured/securitized by the likes of AIG, Bear Stearns, Goldman/Sachs and the like. Yes, underwriting criteria were looser across the board than they should have been, but to lay this in the lap of the Clinton administration? Give me a break.

GODLIKE: (August 11, 2010 8:08am)

2) the more skin you have in the game the less likely you are to walk if the going gets the slightest bit tough. I'd think you'd have learned that minimum or zero down loans don't work long term because long term the economy naturally goes thru up and down cycles. If we had a minimum of 5% downpayments required we'd all be a lot better off long term. Also think of the buying rush when higher rates and higher downpayments were announced.

jcollins: (August 11, 2010 8:07am)

Guys, We still have 100% or close to it loans. Seller assisted DAP did not have a neg. impact on the market. it has to do with low qual loans and equity. Seller's already pay for closing costs. It should come back but with higher qualifing standards. just as the other DPAs have now.

GODLIKE: (August 11, 2010 8:07am)

I'm afraid I'm going to have to agree with a portion of what the Great Obam (pay no attention to the man behind the curtain) recently said. I don't agree that there's been too much emphasis on home ownership and that more/most people need to rent, but I do agree with his comments that we need higher interests and higher downpayments. He wants them to stem the home ownership flood, I'd like them to increase the home ownership flood. 1) more homes are bought when rates are rising if for no other reason than when rates are falling there's no incentive for a buyer to BUY NOW. If they wait, they'll just get a better deal and 2) next post

5pence: (August 11, 2010 8:06am)

Big Mike: Allowable concessions have been 3% and that has been going on around here for about 15+ years. During that period prices rose steadily at 3%/yr. Then flippers came around and that 3%/yr grew with each flip until the market was overblown with higher values. So it comes down to a matter of adjusting for all seller concessions so that the market stabilizes. I think a policy was instituted that you can't sell for 90 days on a flip, or is it a year? If it's 90 days then that's too much as that's 12% a year if the same house or similar houses get flipped in the same neighborhood. Seller concessions need to be adjusted out of the comps at the time of sale so that the sales price can be market tested. That is not typical appraiser practice though, so, yeah, any concessions will skew values with 90 day flips. Chase and Wells are going to charge us because they're losing money due to the new CFPB? No-they're losing money because they're too GD big - unsustainably big. Someone tell them

GODLIKE: (August 11, 2010 8:02am)

So why are Fannie and Freddie losing money? Is it they've been giving money to friends and family like Maxine? No, it was mostly the irresponsible guideline changes implemented by Mr. Clinton that made virtually every loan a no doc loan. Fannie and Freddie aren't the culprits, they are the victims.

5pence: (August 11, 2010 7:51am)

Wells Fargo is going to charge us because they are unsustainably large and grossly overfed??!! Pigs. Take your money out of the big banks and go local - support your community! The GSE's should be nationalized so that the taxpayers can actually make a profit instead of pouring money down a black hole, but the Government doesn't want to take on their $5 trillion in debt on their books, considering our shaky rating and how much in debt we already are. Something needs to be done with them soon! As long as they're playing the "taxpayer foots the bill" scam, the banks do not have to make a "real" market that worldwide investors would want to invest in. Hence, bank shenanigans with HVCC as the excuse and the oligopoly of the TBTF's. As long as the GSE's are playing Monopoly with the big banks, it's democracy destroying and anti-competitive. The longer it continues, the worse it will get, and the more this perversion will be engrained in the system.

joe: (August 11, 2010 7:42am)

@GaryP: there is a huge difference between seller-funded DPA and HUD's $100 down program. The first effectively inflates the purchase price, while the second increases the risk to the insurance pool by decreasing the buyer's protective equity. As helpful as the seller-funded DPAs like Nehemiah were in creating sales, I think they ultiamtely were a bad idea. If I, as a seller, am willing to credit the buyer 2.5% for the buyer's closing costs, that's quite typical for FHA deals in our area (Northern California). But if I add another 3.5% to cover the buyer's down payment, I have just pumped the price up by that amount to cover my additional "gift" to the buyer. The appraiser is going to use the contract price as a target value, and may well hit that number, assuming he can defend it with carefully selected comps. I think programs like Access (.5% down) are a far more responsible and sustainable approach.

Gilbert: (August 11, 2010 7:35am)

Bigmike, Valid point, but how is seller financed down payment any different than allowing seller concessions? Isn't building anything additional into the contract inflating the sales price? Doesn't the appraiser take concessions into consideration when doing a report?

Gilbert: (August 11, 2010 7:33am)

Frank, Brian, How can you support HR 600 when one of it's sponsors is Maxine Waters?

Summit Mortgage: (August 11, 2010 7:18am)

October 11th? Are you trying to make sure we're awake and paying attention? :)

BigMike: (August 11, 2010 7:02am)

Hey Guys From most perspectives buyer assisted down payment is mortgage fraud. If the buyer will agree to a net of say $100,000 and given $10,000 to the buyer, then they would also take $90,000 for a typical loan, or an all cash sale. But the mortage is for $90,000 and the is 100% of the actual cash value of the property. So what is the REAL sale price is always the question? There was a reason the buyer assisted program went away. It's called trillions in losses and those loans are a part of it. What's next Brian, no down stated income again? Get over it!

amylee1115: (August 11, 2010 6:55am)

Maybe the reason Navy Federal's volume is down so low is because they have very strict lending guidelines in the current market. I have a FTHB couple right now that went to them and they told them they had to have 20% down...so, now I have them! :)

tbwbrian: (August 11, 2010 6:52am)

Yeah we missed that one Gary. Yet another example of HUD acting like sybil.

tbwbrian: (August 11, 2010 6:51am)

Great points Dan ~ I didnt think of that but your spot on. ~ Kathy!! Nice to hear from you.

DanSchweihs: (August 11, 2010 6:39am)

Bank of America, Chase, and Wells are the new GSEs. They are actually Government Sponsored Entities using a different name. Uncle Sam controls these firms to such a large degree that they are not managed for the benefit of shareholders anymore. They are managed to implement government policy. We may need to wait a cycle or two until these firms also fail.

DanSchweihs: (August 11, 2010 6:34am)

Fannie and Freddie will be nationalized. We’ll call it something else. They didn’t want to use the term “bankruptcy” so they used the term “conservatorship”. Fannie and Freddie buy mortgages for X dollars and sell they for Y dollars. The spread between Y and X minus their costs is regulated my Congress and has been their profits. Their costs have increased (due to a variety of reasons) but Congress has not allowed Fannie or Freddie to increase the spread the can charge between Y and X. So Congress has bankrupted Fannie and Freddie and the common stock has dropped from $60 to $0.44 per share. At current prices, Uncle Sam can buy Fannie and Freddie and after Uncle owns them, Uncle can increase the spread and make them profitable again. The Treasury will probably buy them which transfers control of the mortgage industry to the executive branch. After they increase the spread they will ease underwriting guidelines to get their boss, Obama, re-elected.

Ntkiki: (August 11, 2010 6:23am)

I know there are a lot of people that think this is a great idea, but I believe it is a contributing factor to the inflated home prices that caused the bubble. What I have seen is that if a seller is contributing 3.5% to a buyer's dp, cc & pps, it is just tacked on top of the actual sales price of the home. Not a good idea. As was stated, the govt is the only one that can afford this kind of stupidity and we, the people, pay for it.

Broker in RIC: (August 11, 2010 5:54am)

Oct. 11th, 2010 Brian?? :)

CornerstoneKathy: (August 11, 2010 5:12am)

Jersey Mikes LOVE IT!!!!!

GaryP: (August 11, 2010 4:47am)

One more thing on DPA. I find it somewhat humourous that HUD killed DPA because they were bad a bad thing. However, isn't the $100 down program on HUD REO pretty much the same thing as seller financed DPA? They're waving the down payment requirement on an FHA loan, as long as they are the seller. Right? Isn't that kinda the same thing as DPA? The same rules that apply to the rest of the mortgage world don't apply if you are creating the rules to move your own properties.

GaryP: (August 11, 2010 4:40am)

HR 600: Seller financed DPA's are a gift to builders and their "affiliated" mortgage companies. I'm willing to bet that NAHB is backing this bill. In my market, they're the only one that has the kind of pricing flexibility to take advantage of the DPA's. What other seller is capable of dropping the net profit on a transaction 3.5%, plus whatever seller concessions are tacked onto that? Of course, this is all dependent on what HUD does on the pending action on "required use." Has anyone heard anything on that lately? I have a feeling that it will fade away, just like the last time that the Bush HUD considered it.