I must admit, I am one of those people that love creativity. What is happening with the housing market is literally forcing people to get creative. Think outside the box. If there has ever been a time, this is a good time. Why because when you think inside the box it is limiting to the way things are always done. Now, there is a world of opportunity. I was contacted by a friend and colleague who knew I was writing a mortgage blog. She briefly told me about this house-swapping story.

I was all too excited to go and find out about house-swapping. From what I understand, people that live in different places that have a house for sale and have not been able to sell, look for houses in the area they want to move that are for sale. You have to love modern technology. This is where the internet comes into play. You can search an online database (Domuswap.com) where people can go state by state. That is absolutely phenomenal. It also tells you how many properties available by state and then it shows you in the different cities or counties.

Even in this transaction, a realtor has to be used. What each party should agree is to utilize the same realtor which in return reduces fees. The realtor should be willing to work with lowering their fees or commission based on the transaction taking place. If the properties are of equal value it is a swap, if they are not there is some cash exchanged. I have to say, I would have to and see the property to make sure it would be conducive to my needs. Why do I say that? You do not get to choose your own furnishings and all those things. However, at the end of the day you also do not have that expense. Not necessarily a huge moving cost either. The more I write about this, it keeps getting better and better to me.

This could definitely solve those moves that need to happen quick due to job relocation, or even health concerns. If you are someone that has a house that has been on the market for a while and have not had any luck, I think this would be an option worth considering. Let your fingers do the walking and see if someone is looking for a home like yours.

We have looked at the advantages, are there disadvantages to this equation? The only questions which might not be disadvantages are the following: I would want to know about the neighborhood and school system. Something that came to mind is how do the utilities and other bills get handled that belong to the property. When you do a house swap, do you do it for a set period of time? Find out all the particulars before you do a house-swap.

Think about it, house-swapping is bartering coming back to life. Not that it has been non-existent in some fashion. However, I think it is being revived on a much larger scale.

Dr. Taffy Wagner

Every day we continue to read story upon story upon story about foreclosures. It is almost as if people who are decisionmakers are in a panic to find a solution. Instead of coming up with one viable solution, it appears that every couple of weeks there is a new solution on the table. Of course with each new solution comes requirements to qualify for that solution. Everyone will not qualify for every new program that becomes available. I encourage you right at the outset of this blog to find out which ones you are eligible for. Then compare the pros and cons of each.

I was not surprised to find out that The Bush administration and several major mortgage lenders recently unveiled “Project Lifeline,” a national program that is supposed to help some homeowners facing possible foreclosure. As a matter of fact, I remember the day this information came forth last week. I had finished writing on mortgages and thought to myself wow I can actually keep writing. There is so much happening in the housing industry foreclosures, FHA options and mortgage fraud. Let’s talk about Project Lifeline.

Project Lifeline targets those who are seriously delinquent on their mortgage. This program is a joint effort by six of the largest lenders. This should not be a surprise such as Countrywide, Bank of America, Wells Fargo, Citigroup and others. Let’s face it with as much as Countrywide has been in the news, there should be a step of good faith or solutions.

To qualify the following requirements must be met borrowers must be at least 90 days behind in their payment. They cannot be within 30 days of foreclosure sale. From what I read this new plan is not so limited to where it only applies to subprime loans. It should be interesting to see how many are able to qualify for this plan. We have had FHA Secure, HopeNow and a couple of others. Now is the time when you should literally sit down and write out on a sheet of paper a pro and con list for each of the different programs. Look at each of the requirements and do not be hasty in making your decision.

I do not want the readers to misunderstand what I am saying by listing the different programs. What I am saying is I definitely believe in solutions. My concern is that after a time there will be some many programs out there, the person who needs it the most will not be able to find one that fits them. They will just miss qualifying for one reason or another in this or that program. I understand that there are numerous foreclosures that no one could have anticipated what is currently happening all over the
United States. My recommendation to anyone that continues to remain in the real estate industry and are a realtor or even mortgage broker or lender, do something that your competition probably has not done 1) if you see the person’s income is not enough – then turn them down and explain to them in detail what needs to be done with their finances and 2) Establish and maintain relationships with your clients. Developing relationships for the long term versus short-term will be evident.

Dr. Taffy Wagner

Remember about a week or so ago I wrote about Countrywide being under a microscope. I felt it was owed to our readers to keep a watch on what is happening with Countrywide. Lo and behold as I was reading different stories regarding home ownership on Cnn.com today, I saw a story about Countrywide. I could not pass up the opportunity to share on current news.

Don’t you think with a title that says, “Countrywide Financial expands scope of mortgage workout”, I had to see what happened once they were placed in a bubble. Whether you have heard it before or not, sometimes people’s lives have been placed under a microscope or a fish bowl which means that every can see what you are doing. Do your actions change or even how do you handle yourself when everyone is watching? We know that Countrywide has been somewhat on the hot seat lately.

Countrywide has decided to expand its program to help borrowers manage their mortgage payments regardless of the type of subprime loan they have or whether they have fallen behind on payment. From what I understood after I read this story, this initiative has been brokered with ACORN, adds borrowers of subprime, fixed-rate loans. I have to ask you did they ever have a choice? Could they have continued to have story after story about them being written.

Let me share this number with you that I saw and could not help but say, “Big Brother does need to be watching on this one.” About 735,000 of the 9 million loans serviced by Countrywide fall into the subprime category, according to Michael Gross who is Countrywide’s managing director for loan administration. 735,000 is a lot of people and that says to me those people need tons of assistance. What I did not see in this article is how many people are going to be helped by this sudden initiative.

Clearly there are people out there in situations that ending marriages, disrupting families and even more. One thing that we need to consider is there are probably going to be even more people falling into the subprime category. Obviously all of these loans have not readjusted.

I would have to wonder if I were in this position could I trust the new program that is being offered since I was placed in a less than optimal position before. I recommend they look at all of their options whether it is Countrywide or are there better options through FHA loans or even the FHA Secure program. Do your homework before you end up in another undesirable situation.

Dr. Taffy Wagner

I was watching our local news yesterday and they were interviewing this couple about purchasing a house. I must admit, with all the foreclosures on the market I would not have thought it was a buyer’s market. But in all reality it could be seen as a buyer’s market. With the inventory on the market, you can take your time picking and choosing exactly what you want potentially for a more affordable price.

This story I watched on the news showed this young married couple with a child buying their first home. One thing that I found interesting was the wife said, they called it a short sale and it took them about five months to get it. One of her recommendations was to take your time. Even though the wife is working, she was saying it costs them a $100 more and they felt they should do it.

Another factor I think people in the market should look at is if it is a foreclosed house, what is the condition? How much work needs to be done to the house and also location? This is one of those circumstances where investigation will pay off. You do not want to overpay for a house and then have tons of repairs once you close on it. Weigh all of your decisions. I say this because if you do not do your homework ahead of time and purchase a house unwisely, you are going to regret it. The fact that you have to come there every day will make it worse. In order to prevent this feeling, take your time, do the research and talk to people in the neighborhood.

As you are preparing to purchase a house, let me caution you to not buy the first one you see. Take your time and shop around. You might be pleasantly surprised to know that you actually get the perfect house and a reasonable price. One that does not require exterior and interior work. If you purchase a house and are not happy with it, you will literally be miserable every time you drive up to your home. Do not be hasty in your decision making but careful and weighing all your options. Do not purchase a house before you are financially ready. Make better decisions to alleviate future problems. I invite you to share with our readers whether or not you think it is a buyer’s market.

Dr. Taffy

Just when they probably think it could not get any worse, Countrywide is under investigation by several states. I read where one former employee was suing Countrywide and KB. Apparently Countrywide is under investigation because of its subprime lending practices. How many times have we seen those same companies that did subprime lending come under fire or end up filing bankruptcy themselves.

Look at some of these details that I read about when I was looking at Countrywide. The attorney general’s office
Florida started a mortgage fraud hot line last year. They received 150 complaints on Countrywide. That is a lot of complaints and makes me wonder if any of those are duplicates. Seems Attorney generals in
Illinois and
California are conducting similar investigations. I do applaud these agencies for stepping up and taking action. One thing that I encourage the readers and potential home owners is to do your research. Do not let someone tell you how you should think or decide about a particular situation.

Do you guys remember when Countrywide suffered heavily under the weight of the subprime fallout. Then Bank of America comes in to the rescue. Seems as if this is not a good mix though. SRM Global Fund, which owns a 5.2% stake in Countrywide stated the acquisition is a bad deal for shareholders. This makes me want to ask the question if this has been publicized in the media. This information sure does make you think if this is going to go through or not.

Countrywide has even had a quarterly loss of $422 million. I know if that were me, I would definitely have to do something different. That is a very significant loss and will probably continue to incur loss. I thought I read earlier today where the CEO forfeited some of his bonuses in order to give that money to the shareholders. Of course because I want to share it with my readers, I can no longer locate it. He wants to do what is best for the consumer.

Even as Countrywide is under the looking glass in my opinion, I saw a news breaking story that said Countrywide sent a letter to 122,000 customers last week telling them they could no longer borrow against their credit lines because the total debt on the home exceeded the market value of the property. The lender says it is using computer modeling to determine which of its customers would have their cash spigot shut off.”I can just imagine the people feeling they were getting some relief and now they are going to worry and stress all over again. They did not get an opportunity to get some things cleaned up. Now they are back to square one. During the beginning of any year, people seek the opportunity to clean up finances and start fresh. For those people that are affected by this decision, I hope they had the chance to correct some things when it comes to their home.

Stay tuned. I am sure we will be hearing more and more about Countrywide over the next few weeks.

Dr. Taffy

As I was on a working vacation last week, I listened to President Bush’s last State of the Union address. I was prepared for the topic of foreclosures and home ownership because every day in the media those remain very “HOT” topics. He did address that topic because so many people are affected. I did some research and found out that the House approved two measures this past Tuesday which are designed to boost the ailing housing market as part of the economic stimulus package. I tell you what we can all say “OUCH” about the housing market. In some way we are all affected by what is happening in the housing market. I am sure like me, you know someone that has faced foreclosure and having a lot of foreclosures in a neighborhood affects your property as well.

This is one of those times where it does not appear to be a light at the end of the tunnel. I continued to read about what the House approved. Seems they were under pressure from the Bush administration and the lawmakers limited the duration of one of the measurers. Apparently the plan raises the maximum size of mortgages Fannie Mae and Freddie Mac can buy from $417,000 to as high as $729,750 in expensive parts of the country. The propose increase would expire at the end of the year. The House also passed stimulus bill increases the size of Federal Housing Administration backed loans from $352,790 to as high as $729,750 in expensive areas until year-end allowing more borrowers with weak credit to refinance into federally insured loans.

I am all for consumers having the opportunity to get into loans that are fixed per se and federally insured so that they begin to get some relief and know that people are concerned about them. I applaud FHA for wanting to serve more consumers and help them in their time of need. All the different solutions that are out there I believe eliminated a lot of the people that were really in trouble and needed the help. For example, I remember one of the solutions talked about they could not have been late on a payment in order to apply for assistance. Well, given the current state of the housing market if they had not been late on a payment why are they receiving additional options for their mortgage. They are not the ones that need it.

I will be watching to see how the above loans help those that hurting in this market.

Dr. Taffy Wagner

I must share that as I have been interviewed for online radio shows these first two weeks of the year, the topics have been about credit and getting out of debt. That is understandable and it also leads us to discussing the housing market. So many people have been affected and people look forward to a new beginning, for some this is not happening. As a matter of fact their situation has gotten worse. For example, not only are people having a hard time paying their bills now it appears they are beginning to fall behind in paying their credit card bills.

Let me share that I am one of those people that always look forward to a new beginning with very realistic goals. I tell you if you are a person that already has a hard time paying credit card bills at the onset of the year, it is time to take action. There are many financial situations to really look at such as housing, gas (which has continued to increase) and the cost of food has not declined. I remember once as I was going through a drive thru to get some lunch for our kids and the lady working the window was fussing about the cost of food increasing but not her salary. This is a situation many people are facing. They seriously have to choose which bill to pay.

We have all heard I am robbing Peter to pay Paul. So what do you do with finances as you begin the New Year? One of the things I recommend is write down all of the bills you have to date. Second make a commitment to yourself to not add any new bills and get the current bills in a manageable state. Why do I say this because if it has gotten really close to where you almost could not pay your mortgage, it is imperative that you evaluate your needs and wants. I strongly recommend cutting the cable off and getting rid of the cell phone. Look at the rules for the cell phone and make sure you know what the rules. Different cell phone policies have a disconnect fee. Look at everything.

I read an article where Capitol One started reporting a rise in delinquencies. American Express reported an increase in late payments whereas they have been known for customers with excellent credit. When there are issues with mortgage payments, there are usually other financial obligations that end up in the same situation. I ask that you do not beat yourself up, but figure out a realistic plan for you and your household.

What I have shared with these interviewers is do what needs to be done in order to reduce and eliminate debt. Once this happens you will see how other areas of your life begin to clean up as well. You might find yourself give 110% at work versus 75% because you were concerned about money. Now you can freely excel in your job. If your health had begun to deteriorate and you free up some of the debt, you will find your health getting in order. Do not take this lightly. Now is the time to establish a DOABLE plan and WORK your plan. I wish you financial happiness.

Dr. Taffy

We all know that a lack of knowledge can lead to poor choices, uninformed decisions that lead to long term consequences. What is even worse is when businesses choose to prey on those that are uninformed for their own gain. From what I read today, there was a report released by the United for a Fair Economy (UFE) advocacy group that stated subprime mortgages, home loans issued to Americans with scant finances, were “ruthlessly hawked and that a “solid majority of subprime loan recipients were people of color.”

It is sad that in the year 2008, that we are continuing to deal with the issue of minorities being taken advantage of instead of being helped and educated. It is evident that this crisis has ruined communities as well as families and is continuing to do so. Is there a light at the end of the tunnel? Who could actually say because mortgages are continuing to adjust for those that got the adjustable rate mortgage. Some will be fortunate to be able to qualify for the FHASecure but everyone will not fall into this category.

For those that do not qualify for FHASecure, they have to weigh what other options are available. The report estimated the total loss of wealth “for people of color” including Latinos to be between 163 and 278 billion dollars for subprime loans taken out during the past eight years. What does that say to you? To me it says let’s keep the poor, poor and the wealthy wealthier thinking they will not know the difference. Surprise, this is out in the open and the nation knows what has happened.

As a matter of fact, some of these same lenders probably are no longer in business because they could not operate in this morning. So it affected them as well as the people they were taking advantage of. I do believe and advocate more should be spent on educating people prior to home ownership so that it is a benefit for all parties and not just the lender.

The effect this is having on communities is astronomical. Having a lot of foreclosures in a neighborhood also brings down property values. I have seen houses staying on the market as long as a year or more without even a showing. Then owners are taking their house off the market. I have heard that some of the houses that were foreclosed on being absolutely torn apart when the new owner moved in. They spent a lot of time repairing the homes to make them livable which ends up costing money.

Something I recommend for anyone in the housing industry, whether realtor, mortgage broker or even housing counselor increase the amount of information you are giving to your client. This is going to make the difference between a dream for them or a nightmare. I continue educating people as often as I am asked. I do not want anyone struggling and lose their dream of home ownership. Sure at the end of the day it is their choice, but have you done all you can do to give them solid information. This could be someone in your family seeking information.

Dr. Taffy

I have to say that I cannot say I am surprised in the least. Foreclosures have affected literally every state. Look at the news or read the newspaper. As the saying goes, it gets worse before it gets better. Are you asking yourself, what could I possibly mean? Let me explain what I mean. Last year every time we looked at the news, there were stories about foreclosures. There was also many stories about how mortgages were being discussed on the hill because there was too many people caught up in foreclosures. Do you think all of the adjustable rate mortgages adjusted last year? Don’t because they have not. That is why we have different options being presented such as the FHASecure and other FHA options.

Based on a story I read today, saying that a month after the Bush administration announced a plan to help troubled homeowners, one foreclosure agency needs help of its own. That is right it is overwhelmed and inundated with phone calls. I must applaud consumers that have basically taken a stand and said I need help. I want someone to help me in this situation and not continue it. They went from approximately 1500 calls per day to 3000 per day. This is the Consumer Credit Counseling Service of Greater Atlanta. They plan to hire about 130 new staff members. I must ask you if you are presently understaffed how many people go each day without the answer they need.

I say that because, I have to wonder if there are people that waited until the last minute and they are now in a do or die situation. I encourage those who are calling the foreclosure hotline to continue to call until you get the answers and direction you need. Here is an idea – if you are in the
Atlanta area, maybe you could apply for a job at the Consumer Credit Counseling Service. If they need help, they need help and could provide some training. I am not in the
Atlanta area so I do not know the specifics; however what is the worse thing that could happen. They say no! You will never know until you ask the question.

Let me share how busy they are – see this is exactly what I was talking about in the above paragraph. I went back and looked at the article; it shares that due to this agency receiving such a huge increase in calls it had to limit its services only to customers who were delinquent on their mortgage payments, then referring other customers who were not delinquent to their lenders. Were some of those customers calling because they could not get through to their lender? Does make you say hmmmmm.

If you are in a situation and need answers, do not forget that persistence and patience pays off. Take the time to make the phone calls and get through to someone who understands your specific situation. Remember you are not alone and it appears that the foreclosure hotlines are overwhelmed with callers. Think about how they feel not being able to get to everyone each day. When it is your turn, thank them for listening to you and providing some sound guidance. There is something to be said for a person having even phone etiquette no matter how dire the situation.

Dr. Taffy Wagner

This is a bit of news that I believe the readers should know about as well. Even though the majority of the blogs written here provide information about FHA and also some current news, it is just as important that you are aware of some other aspects of the mortgage industry. Why? Because I believe that some of what I am about to share you could already know or this information is going to give you insight into what could have happened to you.

I was talking with my brother about my blogging and he said did you see this article about mortgage fraud. I asked him what he was talking about and he basically gave me the gist of it – there are so many mortgage fraud cases filed that the officials that prosecute the cases cannot keep up. So I took the time and did some research and found out that banks filed 47,717 cases this year which is up from 21,994 two years ago which was according to Federal Bureau of Investigation and Financial Crimes Enforcement Network of The Treasury Department. What does this say to you? This says to me that people were clearly being taken advantage of by people in the mortgage industry.

Understand this before you get all in an uproar, I am not saying everyone in the mortgage industry was bad. What it says is that you must be careful and do your due diligence before hiring a realtor, mortgage broker, banker or lender. As a matter of fact, in every area of your life, you should do your homework and background checks. Let me give you a prime example, I recently received a letter in the mail from a company that read about me on a press release. They contacted me basically throwing out some names that I would know. I finished reading the letter and put it aside. I had decided that after a couple of days, I would do some research on the internet to find out about them. After doing my research, I had found some very derogatory information that was recent from several different people. I was very proud of myself for not being too eager to jump right into something without having done my homework.

Look at these numbers as well because when I say numbers are going up, they are going up. I remember last month there was an article that said the number of foreclosures filed here had already topped last year’s filing in November. For any of you that have followed
Colorado’s foreclosure being in national news as #1 in the nation for foreclosure during the past year. So I am sure even where you are, the foreclosures have made record numbers.

If mortgage fraud is up, then it almost stands to reason why there are tons of foreclosures. Does make you say hmmmm. It did for me because that has to be a part of it. Once again even if you are facing foreclosure, thoroughly read all your paperwork.

Taffy Wagner