DUANE GOMER’S EDUCATION SALE ENDS SEPTEMBER 1st:
August is a great month for completing your education because so many of your clients are on vacation. Want another small incentive to move now? Sign-up for any Homestudy Continuing Education, Homestudy Notary Public or Broker & Sales Qualification Courses and Duane Gomer Seminars will give you a 10% discount on all of those courses. To get this discount or for more information on our courses, call 800-439-4909 before 9/1/2010 and ask for the Summer Sale Prices. This offer is not available for online registrations or any seminar courses.
Another point to consider: effective January 1st Continuing Education Exams will be of the much more difficult multiple-choice variety with a better chance of failing. Reading materials will be increased up to 40% in some instances, more prep exams to pass when doing the online courses increasing your study time and costs will have to rise for us to stay in business. Forewarned is forewarned.
What do we recommend? Check our live review course schedule at the end of this email. “See you real soon at one of our reviews. They’re the best in the West, East, South and North.”
ANOTHER ALERT FOR MORTGAGE LOAN ORIGINATORS:
August 31st remains the deadline to receive a waiver of the 20 hour pre-license course. September 15th is the deadline for passing both the National and State Exams. Check out our Mortgage Loan Origination Exam Review Courses at the end of this email.
DRE sent out an email reiterating these deadlines last week and NMLS sent out an email to providers expressing amazement at the number of licensees still procrastinating. Don’t be one of them.
By the way, licensees who don’t pass are failing the 35% Federal Regulations Section and the 15% Ethics Section. Just a word of warning. Spend more time on those sections.
We have added more National exams on our past MLO seminar student website, additional flash cards, an important informative section on the Equal Credit Opportunity Act plus increased Appraisal Tips.
Another Important Item: Larry Cannon is the DRE Deputy who is their outstanding leader for the SAFE Act Transition. In a previous email I mentioned that his panel presentation at the June CAR meeting in Sacramento was extremely informative.
Want to get more insight on what is happening with Mortgage Loan Origination at DRE? Larry Cannon will be in a webinar being presented by Go To Training on Thursday, August 19th at 10 a.m. Mark your calendar, alert your troops and write down this link. https://www1.gotomeeting.com/register/403283840
Also, you might want to keep up with the NMLS since they decide whether or not you will have a Loan Origination career. Want to check their up-to-the-minute blog, go to http://nmlssafeact.wordpress.com
Duane Gomer Seminars is proud to announce three new instructors: Ken Dean of San Francisco, Jim Eszlinger of San Diego, and Terry Ward of Walnut Creek. These people are true professionals and will illustrate to you what they did to pass the exams with honor student grades after attending a Duane Gomer Seminar.
Theresa Ballard, a legend in the MLO field, will not be instructing for a while. She will be undergoing surgery for a severe break of her left leg. Walking dogs can be extremely dangerous. Our wishes and hopes for a speedy recovery go out to her. She will be missed in this chaotic month of August and September by everyone. Theresa will still be doing Webinars and she will be moderating the August 19th Larry Cannon show.
THINGS TO WATCH:
Tax Changes: What will be happening to tax rates, capital gains and dividend taxes for next year? Anything right now is conjecture, but I would bet anyone that tax rates on capital gains and dividends won’t be going down. Might be a good time to think over your assets.
Estate Tax: The Steinbrenner children must really be a hoping and a praying that the no estate tax rule in 2010 holds true and isn’t changed retroactive to the first of the year. Remember one item about this year. If the no tax rule stands, there is another little consideration. There is no step-up basis on assets inherited this year.
This is just all too confusing for me to even review at this time. To paraphrase Scarlett in “Gone With The Wind”, “If I have to think about one more thing today after MLO courses, 2011 continuing education regulation changes, a ridiculous 4 year continuing education report due now, the cost of NMLS course approval, etc., I will just go crazy.”
Incidentally I want to run out of breath and money at the same moment working on several short sales and I’m right on schedule. Therefore, estate and gift taxes are not a high priority to me.
Financial Reform Act: Let’s not all panic and let’s wait for the regulations. It will all be in the regulations. Also, if you feel everyone is against you that could mean you are paranoid or it could also mean you’re right, they are all against you.
If any of my readers have any ideas about these topics, send them in but no profanity or extended rants. Small rants are acceptable.
WORDS FROM THE PAST:
In the past few weeks I have been doing many live seminars. It has been a sincere pleasure and especially gratifying when students from the past, past, past have come up and told me that they had used some of my advice over the years. A couple of quotes from them:
To be successful in a small business, keep your overhead low and your ego low.
If things aren’t working out, go back to the basics on what got you started. For me, this is getting into my car and going to personally visit Associations and other past sponsors.
If you want to be more successful than you already are, you have to introduce yourself to one or both of these two groups, employees or tenants.
If you want to become more successful in real estate, become a Broker Associate instead of a Sales Associate.
When should you hire your first assistant? When you want to make money! What if you don’t have enough money to hire an assistant? That shows you really need one.
Dave Baldwin was one of my young Pop Warner football players and became a Division One Head Football Coach. In a San Jose newspaper article he was asked which coaches had made an impact on him. He answered, “Jack Elway because he gave me my first jobs at Stanford and San Jose State, Dennis Erickson because he taught me the one back offense, and Duane Gomer who as my first coach always kept emphasizing “It’s got to be fun, be sure to make your practices and your games fun and the victories will come.” By the way, that is also great advice for the field of real estate. Keep smiling for they may be gaining on you and be sure to never let them see you sweat.
And always remember when you reach your goal line make sure you are still carrying the football (friends, families & associates). It is kinda important.
TIME FOR MY COMMERCIAL
MLO’s – check out our live seminar schedule that follows or go online to www.DuaneGomer.com for an online course.
Salespersons – Want to make more money? Become a broker. Call our office and we can tell you personally the courses you need and if need be, we will check with DRE for you.
Brokers & Salespersons – You can renew with us at special low price that starts at only $50. Guaranteed you pass or no pay.
Notary – Want more exposure and give more service to your clients and make more money? Become a Notary Public.
Notary Redo – Have to renew a commission? We have a 3-hour renewal course that meets the State Regulations. Why spend more time than you need? Call us.
DUANE GOMER SEMINARS
We are here to help you every step of your career. Call, email, fax, phone, stop by, write – love to hear from you.
Tags: MLO · NMLS · DRE
As we have told you many times, California DRE licensees do not have to complete the 20-hour pre-licensure course because the DRE commissioner got it waived for you. However, you have to complete this waiver procedure by August 31, 2010.
How do you do it?
First, you go to the NMLS website at http://mortgage.nationwidelicensingsystem.org/Pages/default.aspx and register yourself if you have not already done so. Once you log-in to your account, complete the MU4 form and pay the cost of $360. All loan originators including salespersons, broker associates, responsible brokers, company officers have to complete the MU4 so do it now. You can do it before you take your tests.
Effective July 1st, NMLS started the process of education certification. They will send an email to DRE that you completed your MU4. DRE will send an email back to them certifying that you are licensed in good standing.
Next, NMLS will send you an email telling you that you have been certified and they would like a fee of $15. Detailed instructions on how to pay the $15 will be in the email. By the way, there will be a statement in your email about a $5 fee. Ignore it.
Pay the money at once so you don’t forget. Forgetting will cost you three days of time and about $500. Want to know more about the process? Click here.
Want to read the NMLS Certification FAQ? Click here.
Want to take our lauded Mortgage Loan Origination Crash Course? Check our schedule at the end of this newsletter or online at www.DuaneGomer.com.
MLO STUDENT TESTING
The latest statistics from NMLS show only 55% are passing the National Exam. Earlier this year the passing rate was around 68%. Why are California licensees not performing as well? Other states required the testers to complete 20-hours of education before they tested. Taking 20-hours of course work will beat 30 years of experience in almost all cases when it comes to test-taking.
The exam is divided into four parts. Students who are experienced are doing well on the 25% of the exam covering General Mortgage Knowledge and the 25% covering Mortgage Loan Activities.
Where are they failing? Federal Mortgage Regulations (35%) and Ethics (15%) are causing people to fail.
Two topics that they are testing hard – Appraisal and ECOA (Equal Credit Opportunity Act). If you have not taken the exams yet, that is a word of caution.
Some test-takers seem to be of the opinion that they have been in business for a long time and that the test will be a breeze. I want to ask those agents “How long has it been since you’ve taken a difficult Government Test?” This is not one of our continuing education exams.
Our passing rate from our live classes is in the high 90% bracket, but of course some of our students have failed. When I ask them how they studied, they say that they kept taking our practice exams over and over. You will not be taking the National test over and over.
There are 41,000 plus questions in the NMLS base so you have got to read the text book we give you and understand the concepts. Please read the books, they are costing me thousands of dollars. Also, you should study the flash cards, cliff notes, the Hondros glossary, math exams, etc.
Quote of the Day from John Wooden: “Never mistake activity for achievement”.
Quote from another Scholar – George Carlin: “Some people see things that are and ask, why? Some people dream of things that never were and ask, why not? Some people have to go to work and don’t have time for all that.”
WE GET EMAILS:
R.G. from our San Mateo class: Thanks Duane. I passed both exams last week at 88%… thanks to you! And the Hondros book was very good too.
M.P. from our Laguna Hills class: I passed both State & National exams in three hours (they allow 6).
T.M. from our Laguna Hills class: I ACED both the State and National Tests – 96% on State, and 88% on National!!! Your course was a BIG help, couldn’t have passed without it!
B.H. from our Online course: By the way I passed both exams 1st time by just taking your Q & A questions.
K.D. from our San Mateo class: It was an excellent class and the interaction was great.
A couple of comments from our last seminar: Fantastic, awesome, full of energy, motivating. Check us out sometime.
DUANE GOMER UPDATE:
Some students mentioned to one of my instructors at their seminar that they were very sorry that Duane had passed away. I would like to tell you that the report of my passing is greatly exaggerated and I hope extremely untimely. See you all soon.
NEW REGULATION:
Carbon monoxide detectors will have to be installed in all residences by July 1, 2011. Statistics show that this odorless, invisible gas is a leading cause of home deaths. It is just a coincidence that the party strongly pushing for its passage was Home Depot. More information later.
NEW RPA:
It was my pleasure to hear Stella Ling from the CAR Legal staff present some updated information on the form promulgated April 28th. She is an outstanding speaker. If you ever get a chance to hear her, go out of your way to get there.
As Realtor activists know, CAR has many outstanding instructors. It is impossible to list them in any order because I have enjoyed all of them in just the past year. (Going to a seminar to me is really a “busman’s holiday”. That phrase does show my age.) In alpha order: Leslie Appleton-Young, Howard Freeman, Gov Hutchinson, Neil Kalin, Stella Ling, Joel Singer, & Chris Tellez. Although she is not a CAR staff member, Debbie Rogers does many classes for them all impeccably performed.
Back to Stella. The one comment that she hears is that associates love the initials being separated on the bottom of the pages. That is also what I am hearing.
There has not been a plethora of complaints, but some associates dislike the transfer of the termite clause to a different spot. All in all, the changes have gone well. Not like 2002 when some members thought the world was ending.
Personally, I like the fact that in the default situation, I don’t touch the buyer’s check. Great change. Remember years ago when we got the DRE Quarterly Bulletin and we couldn’t wait to check to see if we knew anyone who had lost their license. So many times it involved Trust Fund Accounts or Trust Fund Registers. No more. Clients, agents, DRE and the Recovery Fund should applaud this change.
DRE STATISTICS FOR FIRST ELEVEN MONTHS OF THE FISCAL YEAR
Hot off the press.
Number of Licensees at the peak – 548,000+-
End of May, 2010 – 486,160
Total tests scheduled – 2 years ago - 82,389
Total tests scheduled – this year - 35,972
Salesperson Renewal rate – 2 years ago 72.9%
Salesperson Renewal rate – this year 59.6% and dropping
Broker Renewal rate – 2 years ago - 90.2%
Broker Renewal rate – this year - 78.1%
Passing rate – Salesperson – 2 years ago – 40%
Passing rate – Salesperson – this year – 63% last month
Passing rate – Brokers – 2 years ago – 40%
Passing rate – Brokers – this year – 50% last month
Licenses suspended – 2 years ago – 117
Licenses suspended – this year – 155
Licenses revoked – 2 years ago – 472
Licenses revoked – this year – 546
Subdivision final reports – 2 years ago – 2,296
Subdivision final reports – this year – 1,358
My comments: The number of salesperson coming into the field is increasing and it appears that possibly the elimination of the conditional license could be a cause of the better grades on the state exam. As you know, new licensees must pass the three college level tests before they can take the state exam.
Does your Association or Company want to schedule our Two Day Get A License Course – 3 College Courses and a Cram Course Review? It would be a good time to schedule now before the State changes the exams again.
Tags: MLO · NMLS · MLO State Component Exam · MLO National Component Exam · MLO Continuing Education · California Association of Realtors · Duane Gomer · CAR · Purchase Agreements · Calif. Dept. of Real Estate · California Department of Real Estate · DRE · DRE Regulations
MLO UPDATE:
- Be careful of using schools from outside of California because we have seen out of state websites that have incorrect information about the California education deadline. One that recently scheduled seminars in Southern California had a statement that you had until December 31st to complete your course requirements and that you had to complete the 20 hour pre-licensure course. You have to request the waiver of the 20 hour course by August 31st and have all your exams passed by September 15th. Wait until September 16th and you could be out of business.
- We have not heard of anyone who has failed the State exam. In fact, we have heard of very few who got less than a ninety. In our opinion, the questions are hard, but the answers are easy. A reading of the question looks difficult, but normally three of the answers are so wrong that the right one stands out, front and center.
- To you Californians: In other states the test takers had to go to a controlled class for 20 hours. They had to learn something in that time. The DRE got that class waived for us so we missed that study time. Therefore, we have to study a little on our own to pass the National Exam.
- No continuing education required for this year. In 2011 we have to take an 8 hour course that must be approved by NMLS and that is not easy. We will have that course ready for you when you are ready. One point that as a seminar company owner I don’t like: all renewing licensees have until December 31, 2011 to finish the class and it has no exam. From my experience licensees have a tendency to wait until the last moment. So let’s plan to all meet in late December next year. Why not schedule a cruise seminar and we can have a good time and get renewed.
- Reverse Mortgage originators are having the most difficulty on the exams and that is understandable as they don’t work with the RESPA and TILA forms. Reverse people get moving.
- We have been told that there are 41,000 or more questions in the bank of questions that are used for these exams. Then, for your National Exam they pull out 100 questions at random and grade you on 90 which means that you can only miss 22. Also, it means that the exams vary greatly. In one office one person had one math question and another had 10. The first person had several difficult queries on appraisal topics and the second person had none. This is similar to the California Notary Public Exams that change completely each month. One month we had a 97+ pass rate and the next month a 78+ pass rate. Luck of the draw.
- Why do our students do so well? We have experienced professional instructors, intensive and exclusive classroom materials, State and National Practice Exams, Flash Cards, Glossary, 167 Page Textbook from Hondros Training (a Nationally Respected Company), Federal Regulation Cliff Notes, Date and Data Checklists, Test Taking Tips and live people to talk to when you call.
- We have discussed many times that the National Exam components are Federal Mortgage-Related Laws, General Mortgage Knowledge, Mortgage Loan Origination Activities and Ethics. What are the components of the State Exam? DOC and DRE-5%, California Law and Regulation Definitions-10%, California License Law and Regulations-25%, Compliance-50% and Disciplinary Action-10%. Interesting - no ethics and no Federal Law.
- To our students who have completed our class and are waiting to take their exams: Call our office and give us your information and we will give you a reference so you can do our practice exams, cliff notes, flash cards, etc. on line. A new more professional and time saving method to study. You can thank Chuck McCord for getting this online quickly.
- We have scheduled seminars where our professional instructors go to a company’s office and do an in-house, full-blown, no materials withheld meeting. A great way to make sure all your associates get ready for the tests and if you meet certain attendance requirements, you get a discounted rate. In June one Company had me come to their Palo Alto office and do a real estate broker exam crash course for four people. I believe that they have all passed. I sure hope so after what they paid.
- We keep getting questions all the time about the DRE waiver so I believe that this information needs repeating. D.R.E. licensees do not have to take the 20-hour pre-license course that D.O.C. licensees must complete. The D.R.E. website states: NOTE-Approval has been granted for individuals who are currently licensed by DRE to obtain certification that the pre-license education requirement has been satisfied based on the education completed to obtain their DRE license. However, to be eligible for this process, licensees must file Form MU 4 by August 31, 2010, as noted in the following instructions. Please note that a NMLS&R system fee will be assessed as part of this process.
Want to take a crash course in your area? Our extensive schedule follows in the newsletter. See you there.
TEST YOUR KNOWLEDGE
In my different classes there are many questions that a majority of the students fail to answer correctly. I would like to present a few of them here for your enjoyment. The answers follow the questions.
- In California our loans involve a lender- Beneficary, a borrower-Trustor, and a Trustee who handles reconveyance or any trustee sale if needed. In Eastern states they have a Mortgagee and a Mortgagor. Which one is the borrower?
- Commingling is putting any of my personal money in my trust fund. True or False
- Which is worse, commingling or conversion?
- In almost all cases on a property an IRS would be a junior or a senior lien?
- Bank reconciliations must be completed monthly on our trust fund. True or False
- You are a Notary and I come into your office to get my Trust Deed notarized. I had signed it last night. Do you ask me to sign it again?
- You looked at an apartment house property and you were told that the Gross Multiplier was 8 at that time. The following year you looked at the same property and the income had not changed, but the Gross Multiplier was now 7.The price would be lower or higher?
- There is a two year experience requirement to become a broker unless you have a four year college degree. Can a person who has two years experience as an escrow officer qualify?
- All written offers must be submitted promptly?
- If the cap rate on a property goes from 6% to 7%. does the price go up or down?
Answers
- The mortgagor is the borrower. There is one good rule to remember. Normally, “or” means the signer or giver. For example, Grantor signs the Grant Deed, Vendor signs the Bill of Sale, Trustor signs the Trust Deed.
- False: I can put $200 of my own money in the fund for expenses, etc.
- Conversion is stealing the money from the fund.
- Junior or senior status is decided by when the item was recorded. IRS liens will be the last lien recorded because very few lenders will make a loan after an IRS lien is recorded. Consequently, when there is a foreclosure, the IRS lien is wiped off the property. The IRS does have one final option that they hardly ever exercise and that is they can buy the property back from the winning bidder for 120 days after the sale.
- False, you do not have to reconcile if there has been no activity.
- A trust deed is acknowledged so that it can be recorded. A document to be acknowledged does not have to be signed in front of the notary.
- When a gross multiplier goes down, the price goes down.
- Yes, it is called equivalent experience.
- You do not have to present patently frivolous offers, offers received after an escrow has closed, or when a seller says no more.
- When a cap rate goes up, the price goes down, etc.
Tags: MLO Continuing Education · MLO National Component Exam · MLO State Component Exam · MLO · Reverse Mortgages
Since my last newsletter Duane Gomer, Inc. has presented many successful Mortgage Loan Origination full-day Exam Crash Courses throughout California. Our material is designed to prepare MLO exam prospects to pass both the National and State Exams.
To date, we have not heard of anyone failing the State Exam but many long time loan brokers who did not take our course are still failing to reach the magic 75% mark on the National Test. We have had 2 students get 91% on the exam – Sal Guardino from the Santa Cruz session and Pat Mihevic from Long Beach. If any of our students out there broke the 90% mark, fax your score sheet and we will put you on our website honor roll.
A question area that is still proving troublesome is the myriad of questions on the Alphabet Stew topics of RESPA, TILA, ECCOA, FACT, SAFE, HMDA, FCRA, HOEPA, etc. Other difficult questions seem to be about appraisal regulations, obscure ethic rules, predatory lending, and other never-to-be-used-in-your-business topics.
Another requirement that is causing frustration is completing the MU1, MU2, MU3, and MU4 forms on the NMLS website. We recommend that you spend any spare time you now have studying for your two exams. When you pass both exams, then move on to the MU forms.
If you are a MLO student of ours, call our office after you pass. We have a tutorial (prepared in conjunction with Theresa Ballard, noted NMLS professional) available for you to study before starting your registration. Also, if you want to save yourself time and worry, you can contact our office and for a small hourly charge, we will have a counselor walk you thru the processes by phone. Some brokers have hired our counselor to come to their office and paid travel plus portal-to-portal pay.
Another puzzling factor: MLO loan originators have to authorize NMLS to order a credit check. California has not formulated this procedure yet and it is not expected to be ready until October at the earliest. The present deadline for completing this requirement is March 1, 2011 so don’t spend time worrying now. The DRE has stated that they are not looking for low FICO’s or short sales, only a major lack of financial responsibility.
The deadline for receiving the waiver of the 20-hour pre-licensing course for DRE licensees is August 31, 2010. DRE licensed MLO’s must have all their requirements completed by September 15, 2010. Also, be aware that if you fail a test you have to wait 30 days to test again so to paraphrase John Wayne from the movie “The Cowboys”, “Stop burning daylight and test sooner than later.”
Plan to attend one of our classes as soon as possible. Click here to see our current statewide schedule. If your company or trade group would like a program scheduled in your location, call Gail Clairmont at 800-439-4909 or email her at Gail.Clairmont@DuaneGomer.com.
NEW RPA:
As we have mentioned in previous emails, C.A.R. introduced a new Residential Purchase Agreement effective 4/28/10. I have not heard any Chicken Little “The sky is falling” exclamations so it appears the transition has gone smoothly. If you have any comments, please send them to me for a future email.
The one change that I think is outstanding is that as a selling agent I don’t touch the money, and buyers are encouraged to electronically wire the funds. A large portion of DRE disciplinary actions revolve around broker trust fund violations. No more.
The verbiage on the treatment of televisions bolted to the wall is interesting as is the fact that the Agency Confirmation is moved from page 8 to page 1. The Forms Committee and C.A.R. staff introduced a Table of Contents single page form to help agents and clients find sections quickly and yet I have not heard one person mention that change. I believe that I would be giving it to clients to help them find stuff.
The change mentioned most in answer to my queries is the separation of the required initials on the bottom of each page. It actually appears to be guiding clients to initial where they are supposed to initial, imagine that.
Lots of new words and many old words are in new positions. Would love to hear any comments, yes or no, on the new form.
HIGH INTEREST RATES:
A recent article in the LA Times discussed Pay Day loans and the interest rates charged. The maximum rate noted in California was 479% per year. The defensive response from one practitioner of these offerings was, “Other states charge much more.” Usury laws limit me to 10% so I sure am missing the boat. If any of you need Pay Day loans, I won’t charge you more than 399%, a real cost-cutter.
SURFING FOR INFO:
Recently I was asked some difficult questions about RESPA Regs and Good Faith Estimates. I found a great source of information at www.hud.gov, particularly the new April 2, 2010, 62-page booklet.
Another person had a question about the new tax-deductibility of private mortgage insurance. Need to know: www.irs.gov, a tip from my student David Neugart in Temecula.
An excellent source of information on so many subjects, www.aarp.org. A time-waster for me but I’m learning lots of trivia. I am beginning to think that my head needs more RAM and more storage.
Questions on DRE Mortgage Loan Origination information: www.dre.ca.gov and look for Senate Bill 36.
What is the official site to help your clients get their yearly free credit report? www.annualcreditreport.com. Many of the other advertised sites for “free credit reports” are thinly disguised sales pitches for costly credit monitoring.
Questions on Mortgage Loan Origination: http://mortgage.nationwidelicensingsystem.org/Pages/default.aspx .
To register for a Duane Gomer course for renewal of a Real Estate License or Notary Commission, get a Broker or Sales license, register for MLO Online or Live courses and to read my past emails: www.DuaneGomer.com
A recommended location for a free extra email account for you: www.gmail.com
Everyone should have an extra email and I have found my gmail beneficial.
You have heard me say so many times that sending an email with no signature is like handing out a blank business card. Want to see some great dos and don’ts of signature file use, go to www.netmanners.com/email-etiquette/dos-and-donts-of-signature-file-use/.
TIMES MAGAZINE LIST:
Did I ever mention the poll “25 People to Blame for the Financial Crises?” Number one on the list, my old neighbor from Calabasas Park, California: Angelo Mozilo of Countrywide followed by Phil Gramm, Alan Greenspan, Chris Cox and #5 was the American Consumers. Want to see the whole list? www.time.com/time/specials/packages/completelist/0,29569,1877351,00.html
DRE EDUCATION CHANGES:
There is an update on the DRE education renewal changes. In a previous newsletter I lamented on the new changes that DRE had scheduled to begin July 1, 2010. Continuing Education courses had to have 3,750 words per hour, all new multiple choice exams with more questions, 375 words per page and 3 pages per hour on a live course outline, procedures to ensure students were online for 15 hours when a course is 15 hours and so forth, incremental assessments throughout the reading material, remediation on practice questions, etc., etc. These changes mean extensive software programming, time-consuming writing of extra materials and exam questions, and time consuming planning to meet DRE expectations. To students this would mean more material to read, tougher exams to pass and lots of extra time doing online courses plus courses will cost more.
Well, the Office of Administrative Law just sent 9 pages of corrections to the proposed regulations back to DRE. DRE has changed their proposals and there is a new 15-day comment period on the new writings. These efforts have delayed the process so the implementation of the new regulations has been moved back to January 1, 2011.
The new or newer changes are much better in my opinion. The 3,750 and 325 word requirements and the number of exam questions have been lowered. I am busy now writing my 15-day comments and I will keep everyone posted as this scenario unfolds. By the way, if you wanted to read the changes yourself, go to http://www.dre.ca.gov/pdf_docs/2009_Continuing_Ed_proposal.pdf.
Tags: Mortgage Loan Originators · California Association of Realtors · New Laws In 2010 · Loan Origination · MLO · NMLS · FICO Scores · FICO · California Department of Real Estate · Calif. Dept. of Real Estate · DRE · Duane Gomer · Interest Rates · DRE Regulations
There is good news for California DRE licensed MLO’s. In fact, I think it is awesome news for you. Basically, you do not have to take the expensive 20-hour pre-license course. You do have to register with NMLS and pay a small fee but no time consuming costly course is needed.
The bad news – We have spent many hours getting MNLS approval as a course provider and researching a 20-hour course for you students and now no course. Back to the drawing board, whatever that means.
[Read more →]
Tags: Mortgage Loan Originators · NMLS · MLO · California Association of Realtors · FICO · Paul Scheper · Duane Gomer · DRE Regulations
February 5th, 2010 · 1 Comment
INCLUDED TODAY:
-
Loan Origination – Yea, I took the test
-
Morals and Ethics Revisited
-
Tax Refunds From IRS
-
Social Media Thoughts For The Day
-
Foreclosure Radar
-
Help Your Clients Save Money
-
Movies - It’s Oscar Time
-
Thoughts on Food and Food for Thought
-
Commercial – Grow Your Company
[Read more →]
Tags: NMLS · Loan Origination · Duane Gomer · Foreclosures
It would be unfair to say that the Obama administration hasn’t been trying to restore the health of the housing market. Unfortunately, it would be inaccurate to say that its programs are having much success. The loan modification program is a worrisome case in point.
On February 18, 2009 the Treasury Department announced the Homeowner Affordability and Stability Plan. The Loan Modification portion of that program had a goal “to keep up to 3 to 4 million Americans in their homes by preventing avoidable foreclosures.”
August 4, 2009 the administration released its first monthly Servicer Performance Report which claimed that the program was “on pace”. It noted that by July more than 230,000 trial modifications had begun. By November, however, the administration announced a campaign to pressure mortgage companies because, said assistant Treasury Secretary, Michael Barr, “The banks are not doing a good enough job.”
Recently, a detailed report of the program’s progress was made available on the website www.MakingHomeAffordable.gov. The report showed results through December, 2009. As of December, 66,465 permanent loan modifications had been granted. Another 46,000 had been approved but had not yet been accepted by the borrowers. Now, in many ways those are nice numbers; and many of us, not all, I know, would be happy for the borrowers. But, in the context of the entire situation, those numbers are rather paltry. Taken together they represent only 3% of the estimated eligible mortgages, and only 12% of the modification programs that have been started. More than ½ million trial modifications had been started by August; yet, by December almost 800,000 were still in the trial stage.
The slow pace and the low ratio of trial modifications becoming permanent modifications does not bode well for the administration to meet its goal of keeping 3 - 4 million borrowers in their homes over the next three years.
The problem isn’t a lack of participation by lenders. 107 servicers have signed up so far in addition to approximately 2300 lenders who service Fannie Mae and Freddie Mac loans. It is estimated that 89% of eligible mortgage debt outstanding is covered by participating servicers. Admittedly, though, their performance is uneven. Those who have the highest percentage of trial and permanent modifications are Citimortgage (47%), Saxon Mortgage Services (46%), and GMAC (44%). Not quite so stellar is Wachovia at 3%. Nine servicers have only offered modifications to fewer than 20% of their estimated eligible borrowers.
Nor do all borrowers find the modifications offered to be acceptable. 22% who were offered plans did not take them. There are no data as to why this is so. One can speculate though. For one thing, it is quite possible that eligible borrowers facing seriously negative equity will decide that, even with lower payments, it just doesn’t make sense to try to hang on.
There is no clear reason why the ratio of permanent modifications to trial plans is so low. Certainly bureaucratic inertia and interminably convoluted paperwork issues may have a lot to do with it.
Inasmuch as plans have been offered to only 35% of estimated eligible borrowers, it would appear that one reason the program isn’t receiving its desired results is simply that many potential beneficiaries are not applying. There could be a number of reasons for this, many of them having to do both with ignorance of the program and with denial of the issues.
Many real estate agents do an exceptionally good job of communicating with the public. They can provide a useful service by making people aware of the attempts to resolve issues related to delinquencies and foreclosure. People should know that they can obtain a good deal of useful information by visiting the MakingHomeAffordable website.
###
Bob Hunt is a director of the California Association of Realtors® and is the author of Real Estate the Ethical Way.
Tags: Mortgage Servicing · Freddie Mac · Loan Modifications · Distressed Homeowners · Home Affordable Modification Program · Mortgage Loan Originators · Fannie Mae · Mortgage Funding · Mortgage Lending · Bob Hunt · Lending · Loan Processing · Mortgage Application · Foreclosures
January 21st, 2010 · 1 Comment
I have been in real estate a long time. How long? My California license number is 257862 (issued
December 9, 1961). In all that time I have never seen anything as confusing as the new NMLS procedures concerning loan origination. What have I learned since my last email about this confusing topic? Lots.
[Read more →]
Tags: S.A.F.E. Act · NMLS · Loan Origination · Duane Gomer · Loan Processing
A recent memo from the legal department of the California Association of Realtors® has brought to our attention some changes in rules for advertising mortgage loans. “The Federal Reserve Board has adopted, under TILA [Truth in Lending Act] Section 129(l)(2), 15 U.S.C. 1639(l)(2), rules to prohibit the following seven deceptive or misleading practices in advertisements for closed-end mortgages.”
1. Advertisements that state “fixed” rates or payments for loans whose rates or payments can vary without adequately disclosing that the interest rate or payment amounts are “fixed” only for a limited period of time, rather than for the full term of the loan.
How many times have you heard “2.9% fixed rate!” (or some such rate) when the 2.9% was “fixed” only for the first 60 days?
2. Advertisements that compare an actual or hypothetical rate or payment obligation to the rates or payments that would apply if the consumer obtains the advertised product unless the advertisement states the rates or payments that will apply over the full term of the loan.
“Are you paying 5.5% or more? Refinance now with our 3% rate!” Of course that 3% only lasts for the first three months.
3. Advertisements that characterize the products offered as “government loan programs,” “government-supported loans,” or otherwise endorsed or sponsored by a federal or state government entity even though the advertised products are not government supported or sponsored loans.
You can’t call a Fannie Mae loan “government sponsored”. (Even though the Treasury Department has pretty much written Fannie Mae a blank check…)
4. Advertisements, such as solicitation letters, that display the name of the consumer’s current mortgage lender, unless the advertisement also prominently discloses that the advertisement is from a mortgage lender not affiliated with the consumer’s current lender.
Anyone with a mortgage has received one of these letters, “Regarding your [name of bank] loan # ——: You can now refinance, etc. etc.” But the letter is from another lender.
5. Advertisements that make claims of debt elimination if the product advertised would merely replace one debt obligation with another.
Ah, yes: “Are you staggering under a mountain of credit card bills and mortgage loans? Get rid of that debt! Call ABC Financial.” (And owe it all to them.)
6. Advertisements that create a false impression that the mortgage broker or lender is a “counselor” for the consumer.
“Call today and speak to one of our counselors!” (who will counsel you into a back-breaking loan)
7. Foreign-language advertisements in which certain information, such as a low introductory “teaser” rate, is provided in a foreign language, while required disclosures are provided only in English.
“sólo el tres por ciento!” (but it changes to seven percent in 90 days) The new rules take effect 4/1/2010. Some of us will miss those outrageous ads, but it will be a good thing to have them gone. ### Bob Hunt is a director of the California Association of Realtors®. He is the author of Real Estate the Ethical Way.
Tags: California Association of Realtors · Interest Rates · Advertising · Truth In Advertising · New Laws In 2010 · Mortgage Loan Originators · Annual Percentage Rate · Misrepresentation · Mortgage Lending · CAR · Lending · Mortgage Funding · Mortgage Servicing · Bob Hunt
At the recent annual governance meeting of the National Association of Realtors®, held in San Diego, the Board of Directors adopted a recommendation to expand its existing support of equal opportunity to include its application with respect to sexual orientation. The exact wording of the motion was: “That existing NAR policy on equal housing opportunity be amended to include opposition to discrimination based on sexual orientation.”
The recommendation came to the Directors from the Equal Opportunity – Cultural Diversity Committee. At the committee and at the Board of Directors the recommendation passed unanimously. There was no spoken opposition. Indeed, at the committee level a number of often-impassioned members spoke in its favor. Additionally, as part of the rationale presented to the Directors, it was noted that “The Obama Administration has signaled its intent to announce proposals ensuring that HUD’s housing programs are open to all regardless of sexual orientation or gender identity.”
For many years NAR has had within its Code of Ethics (at Article 10) a fair housing policy that pretty well mirrors the law under the federal Fair Housing Act. “Realtors® shall not deny equal professional services to any person for reasons of race, color, religion, sex, handicap, familial status, or national origin.” A similar policy, within the same Article, prohibits discrimination in “real estate employment practices.” This doesn’t exactly match federal law, because the Realtor® code doesn’t address age discrimination. It is also true that there are state and local jurisdictions with more expansive anti-discrimination rules. Some already have such laws regarding sexual orientation. Moreover, it is not clear that the Realtor® code might treat the concept of “handicap” as broadly as has been done by some legislative and judicial bodies. Still, for the most part, the Realtor® code is a close approximation of the law as far as discrimination is concerned. While not specified in the Board of Directors’ action, presumably the adoption of this recommendation will lead to a specific change in the Code of Ethics to include a prohibition against discrimination of the basis of sexual orientation. Also, presumably, that prohibition will cover both the provision of professional services and also brokerage hiring practices. This, in turn, will call for new training at both the local level and within individual companies. It would be naïve to think that all Realtor® members will be equally accepting of this new policy. We know from the news and from national polling that across the country there are deep-seated divisions about such matters. The fact that no opposition was voiced at the NAR meetings probably doesn’t tell the whole story. Adopting anti-discrimination policies with respect to race and religion was no cake walk either. To do so was no doubt unsettling to many. Change, we all know, can be painful. But so can being the object of discrimination. ### Bob Hunt is a former director of the National Association of Realtors® and is author of the book Real Estate the Ethical Way.
Tags: Code of Ethics · Realtors Code of Ethics · National Association of Realtors · NAR · Bob Hunt
It would be tacky to call it a cause for celebration, but California real estate agents can be gratified that the State Supreme Court has upheld the dismissal of Hughes v. Pair, a sexual harassment case. Why should real estate professionals care about sexual harassment suits? Because the laws involved apply to them. Most of those in the real estate business should know by now that both federal and state laws banning sexual harassment in the workplace apply to real estate brokerages. Many real estate people in supervisory positions have received required training in this regard. Brokers of both large and small offices know that they need to maintain anti-harassment rules governing interactions between agents and agents, agents and staff, and staff with staff.
What is less known, but is fraught with potential liability, is that California law also prohibits sexual harassment in certain business relationships outside the workplace. According to California Civil Code 51.9, among the persons to whom this prohibition applies are a “…real estate agent, real estate appraiser…loan officer…escrow officer…landlord or property manager,” if there is a “business, service, or professional relationship between the plaintiff and defendant.”
It is because of this applicability of sexual harassment laws to business and professional relationships that California real estate brokers and the attorneys for California real estate brokerages have had an interest in Hughes v. Pair. This was not a case involving real estate licensees; but it had elements that are easily seen to be analogous to situations and events that could occur in a brokerage or property management context. The facts of the case might evoke a certain fascination, but they were not pretty. Suzan and Mark Hughes had divorced in 1998. In 2001, Mr. Hughes died, leaving some $350 million in trust for the sole benefit of his son, for whom Suzan was guardian. The trust was administered by three trustees, one of whom was Christopher Pair.
In June of 2005, Ms. Hughes requested that, on behalf of the son, the trustees provide $160,000 rent for the two-month rental of a Malibu beach house. The trustees rejected the request and agreed only to one month’s rent for $80,000. A few days later, Ms. Hughes received a phone call from Mr. Pair. During their conversation, he called her “sweetie” and “honey” and at one point told her he thought of her “in a special way, if you know what I mean.” When Ms. Hughes queried him regarding the one-month payment allowed by the trustees, Mr. Pair “suggested that he could be persuaded to cast his vote for an additional month if [she] would be ‘nice’ to him.” He told her to “call me when you’re ready to give me what I want.”
Later, that evening at a social event, Mr. Pair said to Ms. Hughes “I’ll get you on your knees eventually. I’m going to ____ you one way or the other.” Subsequently Ms. Hughes filed a complaint alleging infliction of emotional distress as well as sexual harassment under Civil Code section 51.9. Pair’s behavior was clearly rude and boorish. Moreover, we acknowledge that the plaintiff was a sympathetic character, like a mama bear protecting her cub. What parent wouldn’t seek to keep their child from being deprived of a second $80,000 month at a Malibu beach house? Nonetheless, setting manners and emotions aside, the Court had to decide whether or not Pair’s behavior constituted actionable sexual harassment under Civil Code 51.9. Upholding an Appellate decision, the Supreme Court said, no, it wasn’t sexual harassment. The Court’s reasoning drew heavily from the extensive case law regarding sexual harassment within the workplace. It noted that “the hostile work environment form of sexual harassment is actionable only when the harassing behavior is pervasive or severe.” “There is no recovery for harassment that is occasional, isolated, sporadic, or trivial.” (To be sure, it acknowledged that a single incident “involving physical violence or the threat thereof” could qualify as severe.) On a variety of grounds, including the legislative history of section 51.9, the Supreme Court held that the section should be understood in the same way as the prohibitions against sexual harassment within the workplace. The harassing conduct “must consist of more than a few isolated incidents” and that standard had not been met in Hughes v. Pair. Moreover, there had been no threat of violence. Nor was there any evidence of retaliation for Ms. Hughes non-cooperation. At most there were only “unfulfilled threats.” Hence, the case was dismissed. It would be naïve to think that real estate agents and property managers never make unwanted and offensive sexually-tinged comments to clients and customers. Shame on them. And no one should take the Hughes v. Pair ruling as an entitlement to engage in such behavior. On the other hand, it would seem good to know that, to be sustained, the serious charge of sexual harassment will have to rest on more than occasional or isolated misbehavior. ### Bob Hunt is a director of the California Association of Realtors® and is the author of Real Estate the Ethical Way.
Tags: Standards of Practice · Realtors Code of Ethics · Bob Hunt · Uncategorized
December 20th, 2009 · 1 Comment
Two years ago the National Association of Realtors® formed a task force to address the vexing issue of short sales. A multitude of members had complained of lengthy and often incomprehensible processes that – although they varied in detail from lender to lender – all seemed to share the characteristics of being inefficient and irrational. Upon completing its studies the task force issued recommendations that the short sale process be standardized among lenders, that common forms be used, and that fixed time frames be adopted for various phases of the short sale process.
Fast forward to November 30, 2009 when the Treasury Department announced the Home Affordable Foreclosure Alternatives (HAFA), a program that features – you guessed it – standardized short sale procedures, common forms, and fixed time frames. The program is directed to lenders and servicers participating in the Home Affordable Modification Program (HAMP). It applies to non Freddie Mac or Fannie Mae loans. It covers liens on a borrower’s principal residence up to an amount of $729,750 (higher if the property is 2 – 4 units).
HAFA is meant to help borrowers who either do not qualify for a HAMP loan modification or who have been unable to keep up their payments under such a plan. A major time-saving feature of the HAFA program is that the financial information already gathered in the loan modification application will be used to determine eligibility for the short sale program.
Prior to approving a borrower to participate in a HAFA short sale the servicer must determine the minimum acceptable net proceeds that the investor will accept. Each servicer must develop a written policy, consistent with investor guidelines, for making that determination. Then, once a borrower has been approved for the short sale program, the net requirement may not be increased for at least 120 days.
A borrower’s approval is expressed in a standardized Short Sale Agreement (SSA). The SSA must be good for at least 120 days. No foreclosure may take place while the agreement is in effect. The SSA requires that the property be listed and actively marketed with a “licensed real estate professional who is regularly doing business in the community where the property is located.”
Within three business days of an executed purchase agreement, the borrower is to submit a Request for Approval of Short Sale (RASS), which is also a standard form. Within ten days of receipt of a completed RASS, the servicer must indicate approval or disapproval. The approval cannot be contingent on a lowering of the real estate commission that had been agreed to. Also, the approval cannot require a closing in less than 45 days. Again, no foreclosure may take place during the period approved for closing.
One of the common hang-ups in short sales is the matter of junior liens. HAFA takes this into account, although perhaps not to a degree than junior lien holders might wish. The servicer may “authorize the settlement agent to allow up to an aggregate of $3,000 of the gross sale proceeds as payment(s) to subordinate mortgage/lien holder(s) in exchange for a lien release and full release of borrower liability.” Each lien holder may be paid up to 3% of their unpaid balance, but the aggregate of such payments may not exceed $3,000. They are paid up to 3% in order of their priority.
HAFA has financial incentives for all parties. The borrower receives a $1,500 relocation allowance, paid at closing. The servicer receives $1,000 for administrative costs. The investor will be paid one dollar for every three that had been paid to junior lien holders. If $3,000 had been paid to juniors, $1,000 would be paid to the investor.
The HAFA program will not apply to all loans, but it will cover a lot of them. Hopefully, it will bring a little more order and sanity to the process.
###
Bob Hunt is a director of the California Association of Realtors® and is the author of Real Estate the Ethical Way.
Tags: HAFA · Home Affordable Modification Program · HAMP · Junior Liens · National Association of Realtors · Freddie Mac · Bob Hunt · NAR · Fannie Mae · Short Sales
“Bad facts make bad law”, they say, and the recent case of Robbins v. Davi, heard by California’s Second Appellate District Court of Appeal, drives that point home for real estate licensees. Did I say the facts were bad? Try this: Real estate broker and attorney, Lance Robbins, both owned and managed numerous “slumlord” apartments in the city of Los Angeles. This, as acknowledged by Robbins’s attorney, was an extremely lucrative business. The record suggests, though, that Robbins took less than adequate care of the apartments under his control. Between 1985 and 1995, Robbins had been convicted of some 50 municipal building code violations. He was twice disciplined (1991 and 1994) by the State Bar for “facts and circumstances surrounding habitability violations in properties” that he owned. In January of 2001, Robbins pleaded nolo contendere and was convicted of three misdemeanor violations of the fire protection and prevention provisions of the Los Angeles Municipal Code. He was fined $100 and placed on summary probation for 18 months. In March of 2003 the Department of Real Estate filed an accusation alleging that Robbins’s convictions constituted cause for the suspension or revocation of his license as a broker. The original charges involved issues of moral turpitude, but subsequent rulings have effectively removed that as a cause of action. Nonetheless, charges remained based on the claim that Robbins’s crimes were “substantially related to the qualifications, functions or duties of a real estate licensee.” According to California law, if a crime is so related to a licensee’s qualifications, functions, or duties, the license may be revoked. But, “licensing authorities do not have unfettered discretion to determine whether a given conviction is substantially related to the relevant professional qualifications.” The authorities are required to develop criteria to aid them in making that determination.
The Department of Real Estate has developed such criteria in a manner that many think is distressingly broad. Namely, a crime shall be considered substantially related “…if it involves…doing of any unlawful act with the intent of conferring a financial or economic benefit upon the perpetrator…” Presumably, then, for example, an attempt to fix a horse race, or a high school basketball game, might be considered “a crime substantially related to the qualifications, functions or duties of a real estate licensee.”
Because Robbins’s violations were related to a profit motive, the court agreed that they fit the criteria for license revocation. This is a result that many concerned licensees think is too broad. Any illegal act aimed at making a profit will fit the definition. It need not have anything to do with the profession in question. Presumably, failing to pay a traffic fine might result in a license revocation. That seems excessive. While many concerned real estate professionals were inclined to protest the court’s decision, those sentiments were overcome by the egregiousness of Robbins’s actions. Who would want to appear to be on his side? Regrettably, this is the way that bad law sometimes gets made. ###Bob Hunt is a director of the California Association of Realtors® and is the author of Real Estate the Ethical Way.
Tags: Robbins v. Davi · California's Court of Appeals · Slumlord · Landlords · DRE · Bob Hunt · California Department of Real Estate · Landlord Liability
There are no great surprises in the National Association of Realtors® 2009 Profile of Home Buyers and Sellers, but, as in the past, the annual survey contains information useful both for consumers and for brokers and agents. The survey consisted of an eight-page questionnaire sent to 120,038 consumers who had purchased a home between July 2008 and June 2009. Names and addresses were provided by Experian, a firm that maintains a data base derived from county records. There was a 7.9% response rate.
Sellers and agents can both profit from careful consideration of the information about how buyers search for and, more importantly, actually find the home that they ultimately purchase. The data enable all parties to see how marketing time and dollars may be best expended.
[Read more →]
Tags: Home Buyers · Home Sales · National Association of Realtors · Buying A Home · NAR · Bob Hunt
Move up, move down, move sideways; it just doesn’t matter. Whichever direction you move, financially, you may still qualify for the new tax credit available to current homeowners. It is unfortunate that the credit has too often been characterized as a credit for “move-up” homeowners. The phrase carries the implication that the new home must cost more than the sale price of the former one. Indeed, even the November 6 White House Press Release said that the credit would be available to qualified homeowners who “wish to step up to a new home”. Same implication.
So, it is worth emphasizing that the credit is equally available to homeowners who are moving down, cost-wise.
The move-down homebuyer is not an unusual phenomenon. For years retirees have been known to move from a larger home to one that is smaller and often less expensive. Moreover, it is reasonable to think that current economic conditions may lead to even more move-down buyers. Just as thousands of families have found it necessary or desirable to downsize with respect to their cars and their general lifestyle, so it may be when it comes to considering the costs of owning and maintaining a larger house than they really need.
The same requirements apply to both move-down and move-up buyers.
First of all, the previous home must have been occupied as the buyer’s principal residence for at least five consecutive years out of the past eight years. Two examples: (1) Suppose that during the past eight years you occupied the property for three years, then rented it out for two years (perhaps because of a job transfer or temporary assignment), and then occupied it again for three years up until now. Even though you had occupied the property as your principal residence for six of the past eight years, you would not be eligible because you had not occupied it for five consecutive years. (I’m not saying this makes sense; I’m just reporting on the requirements.) (2) Suppose you bought a home eight (or more) years ago, you occupied it as a principal residence until two years ago when you sold it. Would you qualify? Yes, because you had occupied it as a principal residence for at least five consecutive years of the past eight.
There are important issues of timing as well. You must have purchased (that is closed on) the replacement home sometime after 11/6/2009 and before 4/30/2010. With one exception: the new home will also qualify if you had entered into a binding contract no later than April 30, 2010 and you closed no later than June 30, 2010.
The time the previous home sold doesn’t matter. Indeed, it doesn’t even have to be sold. You might, for example, keep it as a rental.
The tax credit is for 10% of the purchase price up to a maximum credit of $6,500 for joint filers and $3,250 for those filing separately. There is a full credit for singles whose income does not exceed $125,000 and for couples whose income is no more than $225,000. A phase-out applies to higher incomes up to $145,000 and $245,000 respectively.
The cost of the new home may not exceed $800,000.
The new home must be used as a principal residence for a three year period subsequent to closing, or else the credit must be repaid.
This program won’t help everyone, of course; but it’s pretty nice for those to whom it applies.
###
Bob Hunt is a director of the California Association of Realtors® and serves as a Trustee for its Legal Action Fund.
Tags: Home Sales · Home Buyers · Buying A Home · Bob Hunt · Home Buyer Tax Credit
The world has not turned completely upside down, but, believe me, it is leaning precariously. Remember all those programs that were designed to turn renters into homeowners? Now we have a program to turn homeowners into renters! I refer, of course, to the Deed For Lease program rolled out by Fannie Mae on November 5, 2009.
Don’t get me wrong. I am convinced that the program is well-intentioned. In the official announcement (#09-33) Fannie Mae described, “…the Deed-for-Lease Program (D4L) [isn’t that cute?], a program designed to minimize family displacement, deterioration of neighborhoods caused by vandalism and theft to vacant homes, and the effect these have on families, communities and home price stabilization.” Surely these are worthy goals. They are to be brought about as follows: “D4L allows qualifying borrowers of properties transferred through deed-in-lieu of foreclosure (DIL) to remain in their home and community by executing a lease of up to 12 months in conjunction with a DIL. Investment properties that are tenant-occupied may also be considered as long as the borrower is cooperative in providing information from the tenant to facilitate the D4L.”
[Read more →]
Tags: Home Buyers · Home Sales · Median Prices of Homes · Buying A Home · Loan Modifications · Bob Hunt · Fannie Mae · FNMA · Foreclosures
November 5th, 2009 · 1 Comment
Everyone knows the market has been flooded by Real Estate Owned (“REO”) Properties. The challenge for real estate professionals today is not just to get the REO business but also to provide a level of service to their clients that ensure the property will close on or before the close of escrow date. One of the biggest issues we see from an escrow perspective that can delay a closing are city and county violations that are assessed against the property in the post-foreclosure or listing stages that do not show up on a preliminary title report. These violations often turn into liens right before closing or even after the buyer takes possession.
The following tips can help real estate professionals ensure this issue does not arise, the REO closes on time and their clients remain happy. [Read more →]
Tags: Home Buyers · Ryan P Spitalnick · Escrow · Buying A Home · REO's · Foreclosures
How can you fix an error on your credit report? Every person has the right, under the Fair Credit Reporting Act, to dispute the completeness and accuracy of information on their credit files. If there is a mistake on a credit report, it’s not difficult to fix it. You should do it yourself - it’s free. You do not need a company to do this for you. You just have to have patience and be able to write letters and provide documentation proving that an item contained in your credit profile is wrong. You have to be like Joe Friday In Dragnet and deal with “just the facts.”
[Read more →]
Tags: Credit Reports · Loan Applicants · Paul Scheper · Lending
My rookie season in the mortgage lending business occurred in 1983. That was the year of Michael Jackson videos, Ronald Reagan speeches and “old school” mortgage lending. In 2009 (26 years later), the rules have “boomeranged” and returned to “back to basics” lending. By “back to basics”, I am referring to actually verifying the homebuyer’s income and assets (what a concept!).
In 1983 and again in 2009, lenders must provide “proof” of an applicant’s income and assets. It’s not rocket science. It’s good for the industry and for the homebuyer.
[Read more →]
Tags: VA Loans · Refinances · Paul Scheper · Standard Loans · Lending · FHA Financing · Mortgage Lending · FHA buyers
Yogi Berra, the famous New York Yankee catcher, should have been a part-time loan officer. It was he who once said, “It’s never over till it’s over.” He must have been referring to the time period between a mortgage application and a mortgage funding.
More than a few buyers have had the wind knocked out of their sails at some point in a real estate transaction by making the wrong move during the application process. Here are six suggestions to help keep your mortgage application voyage stay on course.
[Read more →]
Tags: Mortgage Funding · Debt-To-Income Ratio · Loan Processing · Loan Applicants · Paul Scheper · Mortgage Lending
