There is a lot of doom and gloom in the market right now. Unemployment figures stink,the government is spending like there is no tomorrow,foreclosures are at all time highs, gold is at all time highs,housing ins’t recovering and people are talking about a double dip,etc,etc. So how does this all affect the average consumer? Well it’s both good and bad. If you are a seller then you are feeling the pain for sure as you watch your equity evaporate into thin air and you have to be extremely competitive to sell right now. But it’s all kind of relative if you think about it. If you are upgrading,then you have nothing to worry about. If you take a loss on your home that you are selling,then you will more than make up for it with a “better deal”on the home you purchase. Plus,interest rates are at all time lows right now which makes it the absolute perfect time to buy despite all the doom and gloom out there. Now here is one question you should ask yourself. What are your long term plans for your next home? Is it your final home? Will you live there for several years or are you pretty confident that it’s not your final home and you’ll be selling in a few years? If you will live there for several years then don’t listen to a word that the “experts”say. They are wrong most of the time anyway. Go ahead and buy now,take advantage of the low interest rates and prices that have come down,and don’t ever look back. Housing will recover eventually and you’ll be glad that you took advantage of the great prices and rates now even if you see a little volatility along the way! However,if you are definitely going to be moving within a few years then you probably should plan on some volatility going forward. We probably will see some more declines in prices before the real bottom hits (in my humble opinion). If you are the kind of person who can’t stomach that kind of thing then perhaps renting your next home would be the best choice if you are going to be moving soon. But whatever you do,just remember what they say on Wallstreet…..”The best time to buy is when there is blood in the streets”. With that in mind,there really may never be a better time to buy than now! When sellіng your home it’ѕ very іmpоrtant that уоu stаgе it prоperlу. This just mеаnѕ thаt уou wіll wоrk оn thе smаll thingѕ that wіll helр it tо ѕhоw much better. 1. If уоu hаvе а bооkshelf,try re-arrangіng it. Plасe somе of them hоrіzоntаlly inѕtеad of vеrtісаllу. Tаkе ѕоme out аnd put іn a рlаnt or statue оr ѕоmеthing. Mix іt uр a bіt. 2. Let’s now talk аbout the furnіture. Tаke notе оf hоw thе layоut iѕ. Mаkе surе еvеrythіng іs оrdеrlу аnd іn іts рrореr рlaсе. Arrаnge thе furniturе іn а waу thаt іѕ іnvіtіng аnd mаkеѕ thе roоms aрреаr as lаrge aѕ pоssible. You dоn’t wаnt tо makе it appear aѕ a traіn ѕtаtіоn еіther thоugh! If you hаve а rеallу largе roоm,try pulling the couсhes off thе wall a fеw feet. Lооk through magаzinеs to get idеаs. Chancеs arе thеrе is a better layоut thаt will lооk bеttеr thаn whаt уоu сurrеntlу have. 3. Make ѕure the furnіturе іѕn’t cluttеred. Tоо muсh furniture іs nоt a gоod thing. If a rоom lоoks crowdеd,ѕend ѕomе of it tо anоther room,to thе garаgе,оr even to storage. On the оther hаnd,emрty roоmѕ аrе nо gооd еіthеr. Yоu want your home tо lооk aѕ natural аs роsѕіblе. Gеt ѕоme furnіturе in thе emрtу rооms еven if уou havе to rent оr borrоw sоme! 4. If уou have сurtaіns оr draрery that is heavy in naturе,gеt rid of thеm and reрlaсе them wіth lightеr curtains thаt arе еvеn tranѕрarent. Thе maіn thing уou wаnt is for еxtra lіght tо соme in. Lіghtеd rоomѕ aрpeаr to be bigger аnd іnvitіng. 5. Spеaking of lightіng,it іs а vеrу іmрortant elemеnt for аll rоomѕ. Trу аdding dіffеrent lіghtѕ to a room tо brіghtеn it up. End table lіghts,аccеnt lightѕ,рedеstal lіghtѕ,еtс. Think оf thе movіe industry:“Lightѕ,Camеrа,Action”. Evеrуthіng ѕtаrts wіth the light! 6. How arе the bathrоomѕ арреаrіng? Dоеѕ іt look like the kidѕ just usеd іt оr dоeѕ it look lіke а hіgh еnd hоtеl? Thе moѕt imрortаnt thіng for bathrоoms іs сleаnlinеsѕ! For crуіng оut lоud,make ѕure thеy аrе ѕuper сlеаn! And makе ѕurе thеу ѕmell good tоо! Nеxt іn іmроrtаncе fоr bathrоomѕ аre thе lіttlе extrаѕ. Trу рuttіng lіttlе bаѕketѕ of gооdіes suсh аs (fаnсу soaр,nісe towelѕ,еtc.) іn еaсh bathroоm tо sрice іt up a bit. 7. First іmрreѕsіоnѕ are еvеrуthing when іt comеѕ tо ѕelling уour hоme. How dоeѕ the exterіоr loоk? This iѕ thе first thing anуbоdy ѕeеѕ when they pull uр tо уour hоme and it mау bе the laѕt іf іt’s a mess! Make ѕure therе arе no toуs laуing around. Hаve thе weeds beеn рulled? Iѕ thе grаѕs mowеd? Arе the flowеrѕ loоkіng gоod? Arе the treеѕ trimmed? You gеt the іdeа. Gіve thе роtеntiаl buyers a reаson to wаnt to comе оn in! 8. Is yоur hоmе too рersonаl? It’s оk tо hаvе a fаmіly photo оr two but if уоu hаve an entіrе wall of thеm,take thеm down! Your buyerѕ won’t care аbоut how many vaсatіоnѕ yоu’ve bеen on оr how many grand kidѕ уоu hаve but they will be tryіng to vіsualizе thіs aѕ theіr houѕе nоt your hоuѕe. Sо try tаkіng dоwn еxcessivе famіly and religіоus phоtоs and reрlасe them wіth morе generіc аrt that will apреal tо a biggеr аudіencе. A goоd idea іs to vіsit а few mоdel hоmеѕ of buildеrѕ in your arеа. Try to dеcorate like they have. Moѕt lіkеly they hаvе hirеd а professiоnаl deѕignеr and it reallу does mаkе а bіg differenсе. 9. Dо уоu have a сat,dоg,or othеr рet thаt livеs іn thе house? Thеу mау need tо tаke а lіttlе hiаtus! Mаny peоple are аllergіс to аnіmаlѕ аnd/оr just don’t like them. Fur on the furniture,odоrѕ,or dog pоoр on thе lаwn соuld bе reallу offеnsive to а prоѕpeсtіve buуеr. So if it’s рoѕsible to shack the fаmily pet up wіth а nеighbоr or fаmilу member while yоu try tо sell уоur homе,аll thе bеttеr. If thаt’ѕ nоt а posѕіbіlіtу then at least kеep thе plаce ѕpоtlesѕ fоr heavens ѕаke! Mаke dаrn surе thаt therе аrе no bad ѕmеllѕ and mаke ѕure yоu clеan uр after yоur pеt. And if thеrе іs any сhаnce thаt thе pеt wіll make а sсenе whеn strаngers walk through уоur houѕe,then аt leaѕt makе аrrаngemеnts to havе the pеt gone durіng а walk through. As alwaуѕ,this iѕ а lіttlе thіng that сan mаke а bіg differеnce. 10. Thе fіnаl thіng tо remеmbеr іѕ thіs:It’ѕ mainly the small thingѕ that makе the diffеrеncе. Yоu dоn’t hаvе tо add аn addіtiоnal wіng tо your homе or finiѕh the bаsеmеnt tо mаke it ѕеll. But yоu certаіnlу dо nееd to сlеаn іt,раtch up thе hоlеѕ,touсh uр the рaint,and fіx anу ѕmall іtemѕ thаt are brоkеn. The lіttlе thіngs gо a lоng waу аnd will give уour hоmе thаt tіdу and сleаn aрpeаrаnсе when роtential buyerѕ look аt іt. As a fіnal notе,try tо think оf a few еxtra thіngѕ you cаn do that maybе thе hоuse aсross the streеt dіdn’t think оf. Yоu want your homе tо mаke a ѕtrong іmрreѕsion. Trу hаvіng sоme frеѕh baked cookіeѕ on the cоunter whеn the buyеrs аrrive. Leave а nоte that tеllѕ them tо takе sоmе. Lеаvе ѕome commеnt cаrds and aѕk for thеіr honеst feedbаck. Put ѕcеntеd сandles іn ѕome of thе rооmѕ. Pеrhаpѕ some light bасkgrоund muѕiс? Remembеr,it’ѕ all about thе feelіng. Mоѕt рeоplе аrе еmotional buyerѕ аnd уоu’ll want tо make your hоuѕе aѕ соmfortаblе as pоѕѕiblе. Lіterаlly makе thеm fееl аt hоmе. Aѕ уou dо thеsе 10 thіngѕ уоu wіll dеfіnitеlу sеll уour homе fаstеr and get mоrе monеу fоr it. Bеst of luck to уou! Is it better to buy a home now with a minimum down payment OR to save for a bigger down payment and buy later? On a $200,000 loan,every additional $1,000 you put down will drop the payment by about $5.00 per month. However,every 1/8 of a point that rates go up will increase the payment by $15.00. Right now rates are the lowest they’ve ever been! We are at 4.625% today on a 30 year fixed rate! That is amazing! They are artificially low right now because of several economic factors but suffice it to say that they probably won’t stay this low for too long. So let’s say you save your money for a while in order to put a bigger chunk of money down but in the time you saved your money,rates went back up to 5% (which is a very likely scenario). Well,in order to have the same payment as you would now,you’d have to come up with an additional $8,500 down. Or if rates go to 5.375%…..you’d need an additional $17,000 or so,etc. etc. Sooooo…..with that in mind,if you are in a position to buy something now (3.5% down is the minimum for an FHA loan and it can even come from family),there has never been a better time to buy than right now. You’d save a ton of money buying now VS waiting. One of the hardest parts about my job is when it comes time to give advice to borrowers about whether to lock in their interest rate or not. It’s kind of assumed that since I’m in the business and I watch rates everyday that I can somehow see the future and will know what rates will be down the road. Boy,do I wish that were true! If I had a crystal ball I certainly wouldn’t be in this business! I’d be trading the markets everyday and I’d quickly become the richest person in the world! Obviously neither me nor anyone else can predict what is going to happen with rates or anything else in the financial markets. Yes,I probably have a better idea than the average person since I’m in the business and I read a lot about what’s happening…..BUT I’ll admit,sometimes despite my best efforts,I’m dead wrong. This happened just the other day. About a month ago the Fed met and decided to no longer purchase MBS (mortgage backed securities). This program was one of the major reasons that rates had come down so low in recent months. Naturally rates started to climb off of their lows from that news and they bounced up about ¼ point. There were also a lot of other underlying factors in the economy that said that rates would start heading back up. That’s an entirely different discussion but suffice it to say that rates are “artificially” low right now and they WILL go back up sooner or later. So as they came back down a bit,I thought it would be a great time to lock. I gave that advice to a few of my borrowers and a couple of them did decide to lock their loans. These were both new construction deals so they still have plenty of time before closing. My thinking was this:We are near all time historic lows,there are many underlying fundamentals that say rates will go back up sometime in the future,and we’ve just come down off of a recent bounce. In my mind that equals GOOD TIME TO LOCK. Well,I was wrong. As we all know there is currently a major crisis in Greece and Europe. The euro is crashing to new lows every day and the market is fleeing to the safety of bonds. When people buy bonds,the yield on them goes down and then “usually” mortgage rates will follow right along with the yield. And that’s exactly what happened. Rates are even lower now than they were a couple weeks ago and one of my clients even had the audacity to complain to me that I was wrong in my prediction! “Well,EXCUSE me for not seeing the future of global events”! LOL. So this begs the question:When SHOULD you lock your loan? Obviously everyone wants to get the best mortgage they can and part of that includes getting the lowest rate. But no matter how you slice it,it’s always going to be a bit of a gamble. Nobody really knows. Here is my advice: 1) First ask yourself how big of a deal it really is? If you are buying a million dollar home then every 1/8 of a point change in the rate will change your payment by $78. So yes,it definitely does make a difference. But if you are buying a $100k home,it only changes your payment by a few dollars per month. It’s almost not worth the stress of trying to guess correctly,so I would say just lock it and not worry about it. 2) How will it affect your budget? I had another borrower recently that said:“The way our loan currently sits is the absolute MAXIMUM payment that we are comfortable with”. They were also asking me advice about whether they should lock or not. I said ABSOLUTELY you should lock. If you are at the maximum payment you can afford then you’ll be in a lot of hurt if rates go higher. True,you may be mad at yourself if they go lower but you’ll be much more upset if they go higher. 3) IT’S ALL RELATIVE! People are funny. 6 months ago I locked a loan at 5.25% and the borrower was thrilled to death since at that time 5.25% was the lowest that rates had been in a long time. 2 weeks ago I locked a borrower at 5% and now he’s all mad that they’ve come down below 5%. Go figure! When my wife and I bought our first home we closed at 7.875% and we were thrilled to be under 8%. And I’ve met many people who purchased real estate in the 80’s and they were thrilled to be under say 13%! Good grief,can you even imagine? So try not to get all caught up in timing the market perfectly. Remember—NOBODY can do it. At the end of the day you have to just make a decision that you and your family are comfortable with and then just move forward. Don’t beat yourself up if rates come down slightly and don’t pat yourself on the back too much if they go up thinking that you were so wise,because when all is said and done…a little luck actually does have a lot to do with it! What is a mortgage? A mortgage or trust deed (depending on your state) is simply a legal document that pledges property to a lender as collateral for a loan. What is a note? The note or “promissory note” is just like it sounds. The borrower promises in writing to repay the loan according to the agreed upon terms. What happens if I don’t pay my mortgage? If you fail to pay the lender according to the agreed upon terms,the lender has the right to foreclose on the property. Foreclosure is the process of taking back the property and then selling it to try to repay the loan that was given. So how do I get a mortgage loan? There are 3 main steps to getting a mortgage. 1) Application 2) Approval 3) Closing Application Process 1) Loan Application. Borrowers need to fill out a 1003 Uniform Residential Loan Application. This document asks questions about income,work and residence history,assets and liabilities,etc. 2) Credit. Depending on the type of loan you get,most lenders have a minimum credit score requirement in order to get a mortgage. In general,you will need at least a 620-640 fico score (depending on lender) to get an FHA loan and a 660 fico score to get a Conventional loan. The higher your score,the better the terms of the loan will be. Anything over 720 is generally considered excellent credit. (Note:Credit scores are ranked in brackets. 680-700,700-720,720+,etc.) 3) Income. Borrowers need to have a steady 2 year work and income history in order to qualify for a mortgage (previous full time students who are now working are fine too). It doesn’t have to be with the same company or even in the same industry but it does need to be consistent. If there are employment or income gaps,you’ll need a good explanation for it. 4) Debt to Income. Your debts need to be at a certain percentage of your income in order to qualify. Generally speaking you want to keep the mortgage payment less than 30% of your total gross income and your TOTAL debts including the new mortgage payment at less than 45%. Certain loans allow for higher DTI ratios but the higher you go,the harder it is to get approved. 5) Loan to Value (LTV). Loan to Value is what percentage of the purchase price will be the actual loan from the lender and what percentage will be cash from the borrower. Currently for an FHA purchase loan the maximum LTV is 96.5%. Meaning that the lender will lend you 96.5% of the purchase price but you need to bring 3.5% of your own money to closing. (With FHA you can use funds that have been gifted to you from family). On a Conventional loan the current maximum LTV is 95%….meaning that you’d need 5% down of your own money. There are still a couple of ways to get 100% financing. For more information on that please contact Dan Hubrich at WJ Bradley Mortgage. www.TheBestMortgageQuote.com 6) Documentation. In the current lending climate,all Conventional and FHA loans need to be “full doc” loans. (Stated income and No-doc loans are a thing of the past right now). This means that the lender will require the following documentation from the borrower: • Last 2 years W2’s and taxes
• Last 2 months bank statements
• Last 2 paycheck stubs (30 days worth)
• 2 forms of government ID (DL and SS cards or Passport).
• Divorce Decree and Bankruptcy papers (if applicable) 7) Application Disclosures. Once an application has been taken,documents have been provided,and a home has been identified to finance,the lender will provide the borrower with the Application Disclosures. Some of these include the Good Faith Estimate,Truth in Lending form,Statement of Fees,Borrower Authorization to proceed with the loan,Permission to order an appraisal,Settlement booklet,etc. Approval Process Once all of the above is submitted to the lender then the borrower is done with most of their work. 1) Next the file goes into Processing. The processor will verify employment,assets,income,tax records,etc. They will order the appraisal,title work,verify that the borrower will have homeowners insurance,etc. They will also gather up any missing items that may have been looked over and basically make sure that the file looks nice and clean and get it ready to send to the underwriter. 2) Underwriting. When the appraisal is done and everything has been verified,the file goes into the underwriting department. The underwriter is really there to just make sure that everything meets their guidelines. They say to themselves “Everyone in my company seems to think that this person deserves a loan. Let’s see if I agree”. Once they’ve reviewed everything,then they will issue an approval,a conditional approval,or a decline based on how the loan matches up with their guidelines. ** Keep in mind that the underwriter is not the enemy. They want to get these loans done as badly as everyone else. However,their job is also on the line if they screw up. So they do have to be careful and cautious but it’s in their best interest and the interest of the company to approve as many loans as possible. Sometimes underwriters get a bad rap but we are all on the same team. 3) Conditions. It’s actually kind of rare to see a pure approval with no conditions from the underwriter. They almost always want clarification on one item or another,additional documentation/explanation on something,or want something corrected. (Everything in the lending world has to be perfectly accurate and exact). It’s the underwriter’s job to make sure the file is “perfect”. Then when the lender goes to sell the loan (which most lenders do) there won’t be any issues down the road. 4) Final sign off. Once all of the conditions have been cleared then the underwriter will sign off on the final loan,issue a full approval,and submit the file to the closing and doc department. Closing Process 1) Docs. You’ll hear this word a lot. It’s slang for Closing Documents. The lender prepares the final documents for closing and then sends the file to the title company. The title company then prepares the HUD1 form,which is basically just a down to the penny review of all the fees of the transaction. 2) Closing. A time is scheduled with the borrowers,lender,and realtor to all meet at the title company to sign the closing documents. It usually takes between 30-60 minutes and you’ll need to bring your 2 forms of ID along with a cashiers check made out to the title company for the amount of your down payment,and closing costs,etc. 3) Funding. On a purchase transaction the loan will generally fund and record the next business day from the day you closed. Even though you’ve signed everything and paid your money,the home is not officially yours and you can’t get the keys until funding and recording take place. (On a refinance you have to wait 3 days for funding and recording to take place. You have a right of recission period where you can back out of the loan if you change your mind). Have you ever wondered how some mortgage companies can offer so called “NO-COST” mortgages when others are charging closing costs? Well,it’s quite simple. The truth is that any mortgage company can do either one of them. The difference is in the interest rate. Whenever you get a quote for a no-cost mortgage the rate will always be higher than when you are paying your own closing costs. The reason lenders can pay for all of your closing costs is because of the YSP (Yield Spread Premium) or SRP (Service Release Premium) IE….”REBATE” that they make from charging the higher rate. Suppose interest rates are at 5%. Well,if you let the lender charge you 5.375% or 5.5% instead,then most likely they will be able to pay all of your closing costs for you. So is it a good idea to just pay the higher rate and not incur any closing costs? Well,yes and no. It all depends on how long you will be in the home. It’s quite simple to figure out though. All you have to do is this: 1) Have the lender give you two quotes. (One with you paying closing costs and one with the lender paying them). 2) Then all you have to do is divide the closing costs by the monthly savings that you will have with the lower rate if you were paying your own closing costs. 3) Then see how many months it will take you to break even. Every month after that point in time…..you will be saving money by paying your own closing costs! However,if you think you’ll be moving prior to that date,then you are better off having the lender pay them for you. Example Let’s say you can refinance your $200,000 loan at 5% but it will cost you $5,000 in closing costs to do so. Your principle and interest payment would be $1,073.64 per month. That same loan at 5.5% would be $1,135.58 per month. That’s a difference of $61.94 per month. Divide that into $5,000 and you get 80 months or 6.6 years. So there you have it! If you are confident that you’ll be in your home longer than 6.6 years then you are better off paying your own closing costs. If you’re not sure or are pretty confident that you’ll be moving before then,then you are better off having the lender pay the closing costs. So what’s the difference between an FHA loan and a Conventional loan? A Conventional loan is just as it sounds. You’re “standard”or “typical”mortgage loan. FHA stands for Federal Housing Administration. They don’t lend the money themselves but just insure the loan. They basically guarantee to lenders that the principle that they lend will be protected. In order to do that,they have to collect an insurnace premium. Hence,the mandatory mortgage insurance. FHA loans are literally just “government insured loans”. So with that,what are the main differences to the consumer? Here are the pros and cons to each. Conventional PROS:The main advantage is that you do not need mortgage insurance if you put 20% down or have 20% equity in the property. If you do need mortgage insurance,you can get rid of it as soon as you can prove to the lender that you have 20% equity in the property. CONS:Conventional loans typically require a bigger down payment. In current market conditions it’s in the 5-10% range. If you do need mortgage insurnace (loan is above 80% LTV) then it’s typically a little more expensive and harder to obtain than with FHA. FHA PROS:Less down payment. 3.5% down is all that’s required. FHA loans are assumable. This is a great feature if rates are higher when you go to sell. The new borrower can take over your rate but you are completely off the hook with no risk whatsoever. It makes the home more marketable. FHA loans typically are a little easier to qualify for in regards to debt to income and credit requirements. CONS:Mortgage insurnace is required for a minimum of 5 years regardless of how much equity is in the home. Plus there is a one-time upfront “mortgage insurance premium”that is added to the back of the loan. It is pro-rated and will be credited back to you if you sell or refinance within 5 years,but if you don’t,it simply increases the cost of the loan. * When an FHA insured loan is foreclosed,it then becomes a HUD home. If you haven’t heard yet,FHA is planning on revamping their fees on October 6th,2010. They can’t seem to figure out what they want to do. Previously the upfront mortgage insurance premium (UFMIP) was 1.75% of the loan amount. In April of this year they raised that to 2.25%. Now they are going to drop it down to 1%,BUT they will be raising the monthly mortgage insurance to .90% instead of the current .55%. So how will that affect borrowers? Well,it’s both good and bad. If you don’t plan on living in the home for very long then it will be a good thing for you since you’ll save money on the UFMIP fee. However,if you plan on living in the home for several years then you’ll end up paying more than you would now because of the higher monthly mortgage insurance. Here is an example. Let’s say you have a $200,000 loan amount. You will pay $2,000 for the UFMIP instead of the current $4,500. That’s a good thing. However,you will also be paying about $60 more per month on your monthly PMI than you would have previously. So after 41 months of payments you would have paid the equivalent of the current fee structure. If you live there longer than 41 months then you will start paying more than you would have now. If you are planning on doing an FHA loan in the near future and you do plan on living in the home longer than 3 ½ years,then there is a little trick you can do to insure that you get the old fee structure and not the new. You can have a lender order an FHA case number for you now. Note:The case number is attached to the house,not the borrower,so on a refinance you are ok,but if you are planning on buying you’d need to have a home picked out before October 4th,2010. 
Well,we are currently at historical low interest rates. The big question is WHY are rates so low,and HOW LONG will they stay this low? To understand that,we first need to look at the fundamentals. Contrary to what lot of people think,mortgage rates are not directly determined by the Fed. Mortgage rates are mainly determined by the Mortgage Backed Securities (MBS) market and also are highly influenced by bond prices. A few months ago we had a big fundamental indicator that rates would be heading North and that was the Fed ending their purchase program of MBS paper. For several months the Fed had purchased over 1.2 Trillion dollars worth of mortgage backed securities. And just like any other market,the MBS market is all based on supply and demand. Since the Fed was the biggest buyer of all time,their exiting the market was a huge deal. So just as everyone predicted,as soon as that happened this Spring….rates popped up by about 3/8 to 1/2 a point. So why did they come back down? Well,there was a second fundamental issue that popped up that was even more powerful than the Fed exiting the market. And that was the Greek debt crisis,fear about the stability of the Euro,and a general fear of a double dip recession. All of those combined,placed a huge amount of fear into the markets and everyone ran for the safety of bonds. When that happens the yields that bonds pay are reduced and mortgage rates usually respond accordingly with lower rates. So how long will this condition last? Well,it’s anybody’s guess. But suffice it to say,as long as there is great uncertainty in the markets and people are scared,then chances are quite good that bonds will be the investment vehicle of choice which will in turn keep yields and mortgage rates low. Pleaase read the exerpt below from the Utah Division of Real Estate regarding loan modifications and foreclosure bailouts. BE CAREFUL. There are a lot of scammers out there who collect money upfront and promise you the moon. Very few of them are successful. At least now they have to be licensed and have a strict code of conduct. Hopefully that will weed out most of the shady people who are doing loan modifications. 3/29/2010 This past legislative session brought a number of changes to real estate laws. Representative Wilcox successfully ranHB 53 aimed at halting unscrupulous foreclosure rescue and loan modification practices. The bill defines foreclosure rescue and loan modification assistance,specifies that only licensed brokers and agents may provide foreclosure rescue services as that term is defined,and clarifies that only licensed mortgage loan originators may perform mortgage loan modifications. The bill also includes prohibited conduct for individuals performing mortgage loan modifications or foreclosure rescue activities. With these provisions in place,the DRE will have better statutory tools for going after people who engage in harmful practices. We encourage you to report any unlicensed person who provides mortgage loan modification services to the DRE. Loan Modification Prohibited Conduct and Practices You may not: * Request or require a person to pay a fee before executing a written agreement defining the services you will provide * Require a person to forfeit the fee if the lender forecloses on the property within one year from the date on which you and your client execute the written agreement for services * Suggest to a person that you have a special relationship with his or her lender or loan servicer * Falsely represent or advertise that you are acting on behalf of a government agency,a lender or loan servicer,or a nonprofit or charitable institution * Recommend or participate in a foreclosure rescue that requires a person to transfer title to you or to a third party with whom you have a business relationship or financial interest * Advise a person to make a mortgage payment to anyone other than his or her loan servicer * Tell a person to refrain from contacting his or her lender,loan servicer,attorney,credit counselor,or housing counselor * Effective May 11,2010,engage in foreclosure rescue or loan modification without offering in writing to the client a right to cancel the agreement within three business days after the day on which he or she enters the agreement. | |
