The holidays are upon us and I have to share that one of our traditions is driving throughout our neighborhood with our twins and seeing all the Christmas lights that are decorating all the houses. This year was quite different than years before and you are probably asking yourself what I mean. Let me say, before even in the last two years there were probably outside Christmas decorations on every third house. There were also some houses that were quite extravagant with their decorations and then others you didn’t know what the purpose was of even decorating. This year as we drove through, we were lucky if we saw decorations on one house on a street. What we saw more of was vacant houses, for sale signs in yards and doors with tons and tons of signs hanging and yards unkept. I have to admit it only confirmed to me that the mortgage trauma is not over by any means.

During this holiday season, there are people fighting for their homes and some are even losing them to foreclosure. I read a story in our local newspaper about a veteran that was losing his home because of adjustable rate mortgages. He shares how when he initially bought the home he could afford the mortgage but received assistance from a friend in the family regarding a mortgage. Now that adjustable mortgage has started and his payments went from approximately $1,000 a month to $3,000. As a veteran he is unable to afford those payments. He said he trusted that person that was a friend of the family and now it is apparent it is coming back to bite him. He didn’t really understand all the terms and figures that were being thrown at him. How often have we heard stories like this? From what I could surmise one of the only factors that made him different than the other stories was this man a veteran.

Constant stories about people with adjustable rate mortgages is one sign of a meltdown and want to call to the readers attention that every couple of days we are seeing headlines such as “Fed tightens up lending rules”, anything that says “Subprime” and the various meetings that are happening in and out of the White House. Regardless there is a lot of attention on this subject all over.

As a writer for this blog, I hope that during this holiday season that those families that have lost their homes to foreclosure, moved out before being in a foreclosure situation or even those who are facing rate adjustments soon will receive the help and guidance they need as they prepare to go into 2008. With all the different options that are being presented such as FHASecure, refinancing and even the latest bill being presented by the Senate, I encourage you all to do your homework and truly find out what is best for you. Have you ever heard, you don’t know until you know? There could be solutions from your lender or through your local bank but you don’t know because you have not read everything that came in the mail. While you are preparing to enter into a new year, take the time to seek out realistic options.

Happy Holidays

Taffy Wagner

I have to tell you I must have been a few days behind catching up on my news because yesterday I was watching President Bush talking about the housing and mortgage industry and it said breaking news. However, when I turned to other channels he was not on there. So I determined that it was more than likely a re-run of the talk he gave last week unveiling the mortgage plan. I was not really surprised by what I had heard since there was a lot of build up to the unveiling. So I listened and then went on with my day.

This morning as I was doing my reading, I read through CNNMoney’s real estate website that a House committee is scheduled to vote Wednesday on legislation that would permit judges to shrink the size of home loans for bankrupt homeowners – a mortgage-mess remedy supported by consumer advocates and ardently opposed by the lending industry. I would have to ask the question for those that oppose this, do they not believe that the housing and mortgage industry is in crisis? Let me give you an example, I read last night in our local news that
Colorado is on tract to have 37,000 foreclosure filings by the end of the year. They topped their end of the year 2006 number in November of this year. How many homes in your neighborhood say for sale or look vacant as if the people moved out over night?

The article went on to share that under existing law, judges cannot modify loan terms on a borrower’s primary residence, but can do so for mortgages on second homes. I really wonder how many people fall into the category of having second homes. Maybe it is my being naïve, I thought many people that were facing foreclosure was on their primary home. Well that is the way it appears in our neighborhood. When people go through foreclosure on a home, they still end up somewhere. What is the bigger picture of helping them keep the home they have?

The bill that is being considered on Wednesday would apply to subprime loans made since 2000 to borrowers with shaky credit, and other nontraditional loans, such as those in which borrowers only make interest payments. The more I read national news and watch local news, everyone keeps saying the worst is not over. I do believe that because it seems each quarter it is getting worse and worse. Everyone keeps having these meetings to discuss the problem and reach some viable solutions. With each meeting there are solutions being presented, however the problem continues to grow and the number of foreclosures increase as well. What is going to happen one the votes are taken on Wednesday? What viable options will home owners have that they can see a light at the end of the tunnel? Don’t miss out on the vote. Either come back here to receive an update or watch the local and national news. With all the discussions that have been going on, this is a story that will be watched and reported on as soon as the voting is over.

Taffy Wagner

More and more horror stories are coming out about this mortgage crisis. Like me, I am sure many of you are realizing it is getting worse before it gets better. This past week, I read a story that stated Washington Mutual would be closing offices and laying off 3,000 workers. Has anyone started thinking about all these employees that are being laid off? I can’t help but think about them because when you are laid off from a job, everything is now subject to your lack of receiving a paycheck – your mortgage, auto loan, auto insurance, groceries, etc. Some might have received a severance package that only lasts so long. Normally, a layoff is not something you plan for and people are caught unaware and end up in situations unprepared. I digress; let me return to the mortgage crisis.

Last week I briefly shared about the mortgage plan that was being unveiled. Remember, I made a comment about what happens to the people that are already delinquent, because they too need help! Hooray seems as if maybe someone out there in cyberspace or powers that be were thinking the same thing. I just read where the Senate passes bill addressing mortgage crisis. Before you begin doing cartwheels, do you realize the House passed a similar bill back in September? From what I can understand, the two chambers must now come to an agreement on the legislation before sending it to the White House for approval.

Let me share what this bill says that the senate has passed. This particular bill would allow the Federal Housing Administration to back refinanced loans for tens of thousands of borrowers who are delinquent on payments (okay, just for that statement alone I am doing cartwheels) because their mortgages are resetting to sharply higher rates from low initial “teaser” levels. I have always believed that when people are already delinquent, you need to help them see the light at the end of the tunnel and give them some hope to know that someone out there is concerned about what they are going through. Sure, you didn’t cause them to make the choices they made; however, how much better will it make a loan officer, mortgage company or even bank look to be a part of the solution. How many people will they tell that ABC Company helped me when I thought I was about to lose my house or when I had to make the choice between paying my mortgage or having Christmas for my family.

Do not think for one minute, that consumer that was facing these trials and tribulations would not tell everyone they know how ABC Company came to their aid. I personally would be shouting it from the rooftop telling everyone I knew. If I had a blog, I would be blogging about their help, customer service and everything. They potentially begin to receive so many referrals; they would not have to advertise. Will you be a part of the solution or aid the problem?

Taffy Wagner

A few blogs ago I shared with you about the FHA Secure loan. After doing some extensive reading this morning based on the unveiling of the new plan, I found that the FHASecure has already begun helping people. According to a press release that I read dated on December 4, 2007 it stated that tens of thousands of homeowners are refinancing their exotic subprime loans with HUD’s new government backed mortgage product. HUD Secretary Alphonso Jackson announced that more than 33,000 borrowers have already refinanced their subprime home loans with FHASecure. The FHASecure is a government-insured foreclosure avoidance initiative created in September.

I was very pleased to hear this because for each one of those individuals that are helped, that is going to change their lives forever. I can imagine some of those people thinking they would not get any help and there FHASecure was. The release shared that there was an additional 20,000 in the pipeline for approval this month bringing the total to more than 53,000 in a four month period. This says to me, that if one door does not open, continue to knock and the correct door will open. You will be able to get the appropriate help. You have to seek it though.

I don’t mean to get on a tangent here but I must share this discussion I was having with a friend. We were discussing how there is so much information out there to help people and in different cultures you are taught that you do not ask for help. How do you advance in life, business or education if you do not ask for help? No one can do it alone. I want to caution you and recommend that when you are seeking help, that you verify what people are telling you. Do not take their word for it, do your due diligence and background checks. Meaning research the information, talk to more than one person. When I get the same answer from two or three people then I know it can’t be wrong. Take your time and get the best solution for you and your family.

FHASecure could be an option for you. FHASecure enables homeowners who have a history of on-time mortgage payments under their original interest rates, but missed payments after their rates reset, to refinance into FHA’s mortgage insurance program. Families with high-cost mortgages and mortgages that are due to reset, but are still current on their loan, also continue to refinance through FHASecure.

The release continued to share that as a result of extensive nationwide consumer outreach, more subprime borrowers recognize they have a choice and are turning to FHA for assistance. FHA’s toll-free call center has received more than 137,000 calls over the past three months. Nearly 900 FHA-approved lenders around the country are participating in FHASecure by helping families refinance with home loans insured by FHA. Don’t prolong what could be your answer to a very stressful situation.

Taffy Wagner

As I was watching early morning news this morning and I do mean early, there is tons of talk about the unveiling of a mortgage relief plan to be revealed later today. What I have found interesting is the different views that I heard. One gentleman said is it really a relief plan or is it the usual we’ll step in and attempt to bail out. With all the news on foreclosures, everyone is waiting to see what is truly going to happen.

Before I share what the mortgage relief plan is supposed to be do I want to say the market seems really bad for homeowners right now. I remember briefly hearing that the Mortgage Bankers Association reporting that home foreclosures hit an all time high. I continue to drive through our neighborhood to see what homes are for sale now that were not for sale two weeks prior. I read a story in our local newspaper earlier this week where this family was choosing between celebrating Christmas (purchasing gifts) or paying their mortgage keeping their home out of foreclosure. The story went on to share that how in the 6 and ½ years they have watched their payment skyrocket 66% to $2,454 because of home equity loans for repairs, delinquent fees and an adjustable mortgage rate that has risen twice in the past six months. Unfortunately this is probably more of the norm right now than being uncommon.

Will this couple be one of those that can receive help from this mortgage plan? I don’t know. From what I could glean from my research of this plan, seems as if the initiative is designed to put a 5 year “freeze” on teaser rates for some who face default on their subprime mortgages. Everyone would not be eligible of course. Seems the ones who are eligible would be if they are current with their teaser-rate payments and cannot afford higher interest payments would be eligible. Those who have been delinquent, would not be eligible. Says they can work it out with their lender on a case by case basis. Now maybe it is me, but, as I was reading this information I was thinking, the ones who are delinquent need help as well. What could they possibly work out with the lender when they are already dealing from a position of being upside down on their payment. I remember when I was a person that was in debt and talked with someone to help me, I felt as if I had to take whatever they offered because I was already delinquent. I would not have ever thought to propose another option because I was late on the current bill. How many people are going to be helped by this and will they be able to remain current on paying their mortgage without the increase in rates? I sure hope that a lot of people will be helped and able to keep their homes. Stay tuned and watch the news later today when this plan will be unveiled.

Taffy Wagner

I read a press release today on prnewswire that was discussing the statement by Nancy Pelosi. I want to share about the statement issued by Speaker Nancy Pelosi on a report issued on November 27, 2007 by the U.S. Conference of Mayors on the economic impact of the mortgage foreclosure crisis. I would be remiss if I did not share this and share some observations. The below statement is action taken by the House of Representatives to address the mortgage crisis:

“Today, the U.S. Conference of Mayors released a significant report warning of the impact of the mortgage foreclosure crisis – a weakening of our economy and the economic security of American families. As individuals struggle with the subprime mortgage crisis, the report concludes that its impact could be nationwide, with weak residential investment, lower spending in the construction industries, and curtailed consumer spending. This demands serious solutions.”

“Already this year, and with the support of America’s mayors, the House has taken swift action to help families struggling to make mortgage payments and avert this potential economic downturn. With bipartisan support, we have reformed the Federal Housing Administration so it can help people at risk of foreclosure stay in their homes with affordable loans and refinancing options; taken comprehensive anti-predatory action to prevent bad loans from being made in the first place; and expanded housing counseling for distressed families who are at risk of losing their homes.”

One of the things that I want to highlight is regardless of the financial struggles that have been happening with home owners, almost every story I read says that FHA is an option. They have taken steps to help those who are in trouble and educate them to prevent foreclosure. Not saying that FHA is the only one, however, let’s go back to September when some action was taken to expand American Homeownership. The House passed a bipartisan bill to enable the Federal Housing Administration to serve more subprime borrowers at affordable rates and terms, recapture borrowers that have turned to predatory loans in recent years and offer refinancing loan opportunities to borrowers struggling to meet their mortgage payments in the midst of the current turbulent mortgage markets. These reforms would help some 200,000 additional families if not more, purchase or refinance into safe FHA-insured mortgages.

Second and this is an observation that I have made. I find it almost like “karma” that the very mortgage companies that were practicing these subprime loans are now filing bankruptcy and closing their doors. Stop and think, this has to affect those employees as well. Will they stop and think about how they treated those consumers that were asking for help and they potentially said no. Let’s face it, what is happening in the housing industry is far reaching and it is not over. Many are being affected and there has to be a better solution to helping families when they are struggling.

I invite you to write to us and share what you believe would be some options for those that are struggling, do not know where they can turn and are a step away from foreclosure. I ask because there is always going to be someone that is not able to reach out and say I need help. That very person could be your neighbor or your co-worker that is reading this blog. They might not say anything to you, but they are reading for answers. I ask that you share your suggestions today, you never know who it might help.

Taffy Wagner

Foreclosure—Colorado, Texas, Michigan, Massachusetts and more. Over and over when you see stories on the news, probably even if you look in your local newspaper, there are stories of foreclosure. I can’t even tell you how often the stories are happening here because for a period of time we were number one in the nation in foreclosure. We are not number one but remain in the top ten.

What are the options for people facing foreclosure or seeking to avoid foreclosure when they first notice there is trouble? Do you believe that everyone should be given a second chance even in the housing industry? I am of the mindset, that people should be given a second chance. Let’s face it; the first time anyone purchases a house, they might not have been aware of all the financial obligations that encompass home ownership. I’m going to list some of the options that I found.

Option 1 – There are foreclosure conferences and foreclosure seminars to prevent foreclosure. I found there are some Mayor’s meeting about foreclosure at a meeting in Detroit. When foreclosure happens, it affects more than that one family. Especially when it reaches the magnitude that it has already and the worse part is, it’s not over yet. So what are people in decision making positions to do? Do you believe there is “Wisdom in a multitude of counsel?” I have to tell you I do. Or do you like the saying “two heads are better than one?” Regardless of which saying you like, it says you cannot do it alone. Same for the person that is facing foreclosure, get some help.

One of the options that will be discussed at the Detroit foreclosure article that I read is FHA Secure. Since it didn’t have enough detail for me I took it a step further and did some research. Our readers need to know right. Seems back in August of this year, a new loan product called FHA Secure Loan was going to come to the rescue of some not all homeowners who were unable to refinance at that particular time and help stop foreclosure for many homeowners who struggled with adjustable rate mortgages. I surmise from the previous Detroit foreclosure article I read, this program will be discussed and those who can qualify will be given this option. There are 80,000 that this loan is supposed to be laid out for. What happens to the other million and something that need help?

What is a second option for people that are facing foreclosure or trying to prevent a foreclosure from happening? One of the things I would recommend is if at all possible, downsize in housing before you get into a foreclosure situation. I have heard of people that have tried to get out of their housing situation only for the bank not to work with them or help them. If you can see that there are situations arising that will prevent you from paying your mortgage – decide what your options are. I am sure you realize by now, I believe in dealing in solutions not problems. There have been too many times when people are overwhelmed and emotional about the problem and cannot see options. Let’s share options for those that are reading that potentially could be in this situation and are embarrassed.

You can imagine my surprise when I saw the above title because I believed everyone was in the business of helping people obtain the American dream. Hold on before you make any assumptions based on that title and continue reading. I was that person that was about to do that very thing and decided to continue reading this news before I made any conclusion. Why you might ask? Because I am familiar with several organizations that assist people with downpayment assistance and they are necessary. Not seen as optional but for many they are necessary.

From what I surmised reading this news is federal regulators take a step to shut down programs providing down payment assistance utilizing money from home sellers because the assistance ends up added to the purchase price. I recall when my husband and I were preparing to sell our first home, we were prepared to kick back some money towards the sell of our home, whether it was closing costs or downpayment assistance. We knew our market and how difficult it could be to get a home loan if you have a few items of discrepancy on your credit report. We didn’t find anyone when we attempted to sell it on our own. However, when we worked with a realtor, we had a buyer in less than a week.

The story I read says at the end of the day, the buyer financed the down payment. In that regard, they did not get assistance. They paid for it at the end of the day. Let me share what ended up happening when we did sell our first home. We were at the closing table with our realtor and the buyers, had their realtor and of course the lender was there. My husband and I had agreed to give a certain amount towards their closing costs. As everyone was sitting there running the numbers, the lender said the buyer can only receive x amount of dollars back nothing above that number. Next thing my husband and I experience is we were receiving more back than what we were originally told from the sale of our house.

Did the buyers need assistance? I am sure they did. I believe the buyers should benefit and not be punished in some fashion. It almost seems as if that lender was penalizing them for their situation. That was soooo many years ago, that I would not even be able to say if it was a FHA loan or not. However, FHA requires buyers using the loans it backs to put down at least 3 percent of a home’s purchase price. I remember my husband and I had already discussed what we needed to put down before even purchasing a house. We wanted to make sure we had money set aside that we could afford and not be in a situation because it was all going towards down payment. They require some family members and some charities to contribute to the down payment but sellers may only contribute to closing costs.

Once again, before you get that FHA loan do your homework. Make sure you aware of all the parameters so you can make an informed decision. Not everyone is in agreement with the ban, understandably so. Research, research is key and preventative.

Dr. Taffy Wagner

There are many home ownership programs created to help increase home ownership. However, do they really help increase home ownership or are they more of a deterrent? Let me share what I mean, is there so much “red tape” and regulations that the potential buyer will not understand that at the end of the day they say forget it. I will continue apartment living.

We all know people that want to obtain the American Dream. So of you probably can even remember when you were the person seeking to obtain the Dream. There are some details you should know about buying a home using a FHA loan that you might not have known about. I believe the information I am preparing to share with you will get you excited about becoming a home owner. I was doing some research about the different FHA loans and I have to share what I found.

First, were you aware in the minimal down payment and closing costs it extends to the down payment being less than 3%. I can see some of you doing a double take right now as you read that on the screen. Why? You had no idea that you could get into a home for that a small amount of money. That makes it so much more attainable right! Don’t run right out now and get a house based on that. Continue reading this blog and see what else you need to know.

Second, you can utilize a gift for down payment and closing costs. There are many programs available for first time home buyers and more. One item I always counsel new home buyers on is not utilizing all their cash for down payment or closing costs. With all the programs existing, do the research and find out which one fits your particular situation.

I have to stop and share this at this very moment because I was not knowledgeable of this CRUCIAL information that can make the difference for many people. Buying a home through FHA Loan has easier credit qualifying guidelines. Let me take it a step further, from my research I found that there is no minimum FICO score. Stop! So many people have not gotten a house because of their low FICO score. I can hear people right now in amazement saying they did not know that.

Furthermore there is no credit score requirement. That does not mean if you have a few marks on your credit report that you should not clean them up. By all means clean them up. However, know in my opinion FHA is saying you do not have to have perfect credit in order to obtain a loan through them.

Maybe you are reading this and have had a bankruptcy in the last few years. Did you know that FHA will allow a home purchase two years after a bankruptcy. I have to tell you I am surprised by that. I tend to encourage people that I counsel to wait until you have gotten more of a handle on your finances. Maybe FHA has a program they have worked out that can instill money management and rebuilding the family unit as you obtain the American Dream and give better guidance.

I have not even finished what I am going to share. I would say come back and read again next time when I will give you some more insight into buying a home with a FHA loan.

There has been so much in the media about subprime loans, foreclosure and even FHA. I thought it would be best if we get a clear understanding of what FHA is so readers can make an informed decision regarding solutions to housing options.

First, let’s look at what FHA even stands for. FHA stands for Federal Housing Administration and maybe you are reading this saying, I knew that. But what about the person that didn’t. FHA is a government backed agency that provides insurance for mortgage loans. FHA has been around a long time and has not always had a good reputation. But what business do you know that has not weathered some storms. They have their ups and downs.

I read recently about an annual conference of the Mortgage Bankers Association that was in
Boston on the CNNMoney.com website and they were sharing how the mortgage industry would be returning to a back to basics theme which included the FHA. When the FHA was originally created in 1930s, was intended to provide lenders with sufficient insurance. In the 1980s, the FHA’s refinancing department came into existence. I even remember hearing about FHA loans when I was growing up. I only heard about it but didn’t know who it was really for.

As I prepared to purchase my first house, I heard about FHA loans again. I took the time to research and find out what FHA really means and who did they help. In the beginning FHA’s goal was to provide an adequate home financing system through insurance of mortgages and to stabilize the mortgage fund. Well, they have definitely expanded on what they do today. They play a crucial role in financing minority borrowers, first time home buyers and borrowers who have troubled credit history. We both know there will always be borrowers that have less than perfect. I am glad to see they have viable options to obtain the American Dream.

What is your present housing situation? Are you renting, planning on purchasing a house within six months to a year or are you in a foreclosure situation? Is this an option for you? Could be – this is one reason to research the different types of loans so you can make an informed decision before you sign on the dotted line. One of the benefits of an FHA loan is borrowers with less than perfect credit can receive a favorable interest rate. I know for me it was important that I received a good interest rate that I felt was favorable especially when it came to how that affected my mortgage payment. I encourage you to do your research because FHA loans are not for everyone. Come back and read next time, when we will discuss some of the parameters before you even apply for an FHA loan. Knowing the information can help you avoid foreclosure even in the beginning of the process. Come back and visit us often for more up-to-date information and news regarding FHA.