Innova Mortgage Services

Fed's Plan to "Wind Down" Fannie Mae and Freddie Mac

2011-02-11T10:47:00.000-08:00

Fed's Plan to "Wind Down" Fannie Mae and Freddie Mac's role in the mortgage industry

Back In Black: Economy Moves From Recovery To Expansion

2011-02-10T11:15:00.000-08:00

Key points

Real GDP moves from recovery to expansion, but growth remains below potential.
Inflation concerns globally replacing double-dip recession concerns as key theme in 2011.
Egyptian unrest and rising volatility could further temper optimism, which could bring back the "wall of worry" the stock market likes to climb.

The economy has officially moved from recovery to expansion. For a visual, take a look at the chart below. From the point an economy bottoms, at the end of a recession, to the point it reaches its prior high, that's a "recovery." Thereafter, until the next peak, it's considered an "expansion."

Real GDP Surpasses Prior High

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Source: Bureau of Economic Analysis and FactSet, as of December 31, 2010. As you can see in the chart below, this was the longest stretch in at least 60 years for this move into expansion to occur. The good news (potentially) is that, historically, expansions have lasted at least three years.

Long Time Between Recovery and Expansion
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Source: Bespoke Investment Group (B.I.G.), as of December 31, 2010. The latest news on the economy should further put to rest the bears' theme of 2010: double-dip recession. However, the civil unrest in Egypt adds to the bears' theme of 2011: global inflation. Let's start with the economy and, later in this report, I'll move on to inflation.

Strong consumption likely to ebb this year Real gross domestic product (GDP) was reported as initially up 3.2% in last year's fourth quarter (remember, there will be two subsequent revisions). This was light relative to the 3.5% consensus expectation, with the drop in inventory accumulation taking away 3.7 percentage points from growth.

There was a huge 7.1% surge in "real final sales," which is basically everything we buy, excluding changes in the aforementioned inventories. That jump was the highest since the second quarter of 1984. The net reading for personal consumption was 4.4%, which was the largest increase in five years.

However, to get these big jumps, the savings rate fell a bit, to 5.4% from 5.9%. That's still up sharply from its negative reading before the financial crisis erupted, but it would have been better to see a sales increase coming alongside income growth, not a reduction in the savings rate.

Real disposable incomes were only up 1.7% in the fourth quarter, and some of that was government transfer payments.

And, after a year and a half of consistent consumer debt retrenchment, consumer credit has been rising during the past two months. This is not a recipe that suggests continued robust strength in consumption.

To round out the summary of the GDP report:

In addition to personal consumption moving to new highs, so did federal government spending (shocker, I know).
Also back to their previous highs were business spending and exports.
State and local government spending has been flat for the past 10 years, following a 33% increase during the 1990s.
Net trade was a big positive last quarter, with exports up over 8% and imports down over 13% (reflecting the slowdown in inventory-building).
Still at recession lows are private residential investment and business spending on structures (two key real-estate components).

Bifurcated economy operating below potential The bottom line is that the manufacturing side of our economy is booming. Testament to that would be today's release of the Chicago Purchasing Managers Index, which jumped to an extremely strong reading of 68.8 on the back of strong auto sales.

On the other hand, the construction-related side of our economy is still mired in recessionary conditions. It's a bifurcated economy.

We know the overall economy continues to operate below potential. Take a look at the chart below, which makes this painfully clear.

Economy Still Operating Below Potential

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Source: FactSet and Ned Davis Research, Inc. (Further distribution prohibited without prior permission. Copyright 2011 Ned Davis Research, Inc. All rights reserved.), as of December 31, 2010. Output gap = potential GDP using Congressional Budget Office estimates less actual GDP.
Headline inflation heats up with Egypt's unrest … Lest you see little good in what I've written so far, such a large output gap will help keep a lid on core inflation. A growing concern, and partly to blame for Egypt's turmoil, is the rapid pace at which food and energy inflation is rising.

Unfortunately, it's becoming a vicious circle as the escalating civil unrest is contributing to even-higher commodity prices, especially oil, given fears of a Suez Canal closure (the route through which a lot of exported oil travels, especially bound for Europe).

… but core inflation remains subdued
We've been consistent in our view that rising food and energy prices will not bleed into broader core inflation any time soon. This is a function both of the aforementioned output gap and the absence of strength in the money multiplier (or velocity of money), about which I've written extensively.

I don't diminish the economic impact of rising commodity prices, which will undoubtedly hit the consumer and in turn the consumption component of GDP. They could also affect corporate profit margins, for those companies with the most limited pricing power.

However, the reason we separate core (excludes food and energy) and headline inflation is because of the impact it has on monetary policy.

Commodity prices are set by global forces and there's little the Federal Reserve can do to rein them in. The Fed is also aware that raising interest rates to combat commodity inflation would both not likely work, but would also put an additional crimp in economic growth.

As such, there should be no expectation the Fed will preemptively try to beat down commodity inflation with its rate stick. Those central banks globally that are tightening policy are generally doing so for other reasons too, including excess lending growth as in China.

The GDP deflator increased only 0.3% in the fourth quarter of 2010, while the core consumer price deflator was up only slightly more at 0.4%. Looking ahead, leading indicators for core inflation in this year's first half are a bit less optimistic, but not yet dire.

The present mixture of low core inflation, low short-term interest rates, a steep yield curve and strong earnings growth is very favorable to the stock market.

Sentiment's improved, but remains troublesome We remain optimistic about the market, but we've also recently expressed concerns in the short term about elevated optimistic sentiment (a contrarian indicator). In my recent report on the subject, I noted the market's increasing vulnerability to bad news, and we certainly got it last week with the unrest in Egypt.

I won't attempt to divine the political outcome there, but it represented an easy excuse for investors to sell last Friday, although that weakness doesn't appear (as of this writing) to be extending into the early part of this week.

We're not the only sentiment watchers out there, of course. And, frankly, I think because there's been so much chatter about why too much optimism might breed a market pullback, some of those measures of sentiment have already begun to pull back themselves, even without a major hiccup in the market.

The spread between the bulls and bears in the American Association of Individual Investors (AAII) poll has narrowed by a decent amount, as has the spread between "dumb money" and "smart money" optimism as per the SentimenTrader index. You can see both below.

Bulls Down, Bears Up
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Source: AAII and FactSet, as of January 26, 2011.
"Dumb Money" Getting More Pessimistic
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Source: FactSet and SentimenTrader.com, as of January 28, 2011.
Another way to judge sentiment is to look at complacency, as measured by the Chicago Board Options Exchange Volatility Index (VIX), seen below.

Volatility Pops From Lows

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Source: FactSet, as of January 28, 2011.
You can see the spike last Friday as a result of the crisis in Egypt, but we could see a bigger pick-up in volatility as some of this excess optimism and/or complacency wears off.

Frankly, I wouldn't mind seeing a bit of a consolidation in order to further work off these recent sentiment extremes. I'm not sure investors need to try to position themselves too precisely in anticipation of an increase in volatility or market weakness given that a correction is likely to be relatively shallow.

Remember, no one can time the market with any precision. But, as always, be mindful of the need and opportunity for any portfolio rebalancing, to the extent your allocations are out of whack.

In sum, our core view remains optimistic, but the sky has some black clouds:

Parts of the economy are booming but, overall, we're operating below potential.
Instability in the Middle East is having a negative impact on oil prices and could heighten volatility.
Our ever-present debt crisis is not imminently solvable.

However, we may have entered a period in which the economy becomes self-sustaining and can be weaned off additional monetary and/or fiscal stimulus, allowing for a reasonably healthy path for the economy and stock market during the expansion phase.

Important Disclosures
The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.

All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.

Examples provided are for illustrative (or "informational") purposes only and not intended to be reflective of results you can expect to achieve.

A third of mortgaged Seattle-area homes worth less than what's owed

2011-02-09T13:36:00.000-08:00

The owners of one-third of the houses with mortgages in the Seattle metro area now owe more than their homes are worth, Zillow.com estimates.

That's up from less than 23 percent a year ago, the online real-estate database and marketplace said in an analysis released Wednesday.

At the end of 2010, 34.3 percent of all single-family homeowners with mortgages in King, Snohomish and Pierce counties were "underwater" on their homes, Seattle-based Zillow said. That was higher than the national figure, 27 percent.

This region's rate of increase over the past year — and especially over the last quarter — also topped the national increase.

"Negative equity" is rising faster now in the Seattle area largely "because of where we are in the housing cycle," said Stan Humphries, Zillow's chief economist.

Home values in this market kept rising for a year after values began falling in most of the rest of the country, Humphries said. Now Seattle is seeing steeper drops — leaving more homeowners upside down — as price declines in many other metropolitan areas are moderating.

"We're kind of where L.A. was in early 2009," Humphries said.

Negative equity can have a significant impact on both the housing market and the broader economy, especially if the gap between the home's value and the loan balance is large, said Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University.

It increases the likelihood that owners will default — even if they still can manage the payments, he said.

After that, they probably wouldn't be able to buy another house anytime soon, he added, "and that would hold the housing market back."

A "strategic default" — choosing to default on a mortgage — also damages owners' ability to obtain credit for other purchases, further curtailing economic activity, Crellin said.

Underwater homeowners who don't default also may behave in ways that harm the economy, some researchers suggest. They may be less likely to move — even for a better job — and less inclined to spend money on home improvements.

Zillow determines whether a house is underwater by comparing publicly available loan information with the company's proprietary estimate of the home's value. Those estimates, too, are extrapolated from public records.

While the percentage of houses with negative equity in the Seattle area is climbing, it still doesn't compare with Sun Belt markets that have become poster children for the housing bust.

About 82 percent of all houses in Las Vegas, 70 percent in Phoenix and 62 percent in Orlando, Fla., are underwater, Zillow estimates.

Using public records, Zillow also estimates that more than 28 percent of all houses and condos that sold in the Seattle metropolitan area in December sold for a loss. That's up from 20 percent in December 2009.

Snohomish County was hardest hit.

The sellers of nearly 42 percent of all homes sold in that county in December got less than what they had paid.

The number of sales at a loss will continue to increase as long as prices keep dropping, Humphries said.

By Zillow's calculation, homes in King, Snohomish and Pierce counties now are worth about the same on average as in summer 2004.

"Anyone who's bought their home since then probably paid a higher price than they could get now," Humphries said.

FHA Suspends Anti-Flipping Rule

2011-01-19T10:40:00.000-08:00

On Feb. 1, the Federal Housing Administration will place a one-year moratorium on its anti-flipping rule, which will allow buyers with FHA-backed loans to purchase homes that have been held for less than 90 days, officials said Friday.

The move will open a new pool of homes to first-time homebuyers who have been losing bids to cash buyers, but shouldn't have much effect on home prices, analysts said.

"Opening up to FHA buyers means I can sell it to anybody. That's big," said investor Bruce May, owner of SoCal Homes.

FHA buyers made up 28.1 percent of the market in San Diego County, and 50.1 percent in Riverside County, according to real estate data firm DataQuick. Analysts said cash buyers take up much of the rest of the market, and many of them are speculators and investors. The new rule will connect the two groups.

"Give the consumers as many options as possible," said Nathan Moeder, a real estate economist with the London Group. "Someone who's buying an investment property to flip it, isn't buying a junk property where there's holes in the walls. From the consumer side, I'd be happy about that."

The new rules limit seller's profits to 20 percent above the purchase cost, unless an independent appraiser confirms that renovations and repairs justify the higher price.

"They didn't want to facilitate speculators," said Mark Goldman, an instructor at San Diego State University.

May thinks this move will grow the number of transactions in coming months: More buyers for investors will motivate investors to buy and renovate more houses.

Crisman Report

2010-11-09T11:28:00.001-08:00

I should have listened to my Mom and become a lawyer. In Florida, where palmetto bugs rule the earth, attorneys who take on foreclosure dismissal cases are accepting payments in the form of 2nd mortgages on their client's house. A lien is added if the foreclosure is dismissed and the homeowner's debt to the bank is reduced. Given all the press about sloppy processing of foreclosures, attorneys who specialize in property law are in demand but many of the clients are short on funds to pay the legal fees. "It's a new model, a new paradigm'' said Peter Ticktin of the Ticktin Law Group in Deerfield Beach. According to the story in the New York Times, each will be a contractual obligation with the law firm, labeled as a mortgage and structured like one, too, with the client paying a certain sum every month and using the house as collateral. If the Ticktin lawyers cause the original mortgage to be nullified or reduced because of the bank's misdeeds, the client must take out a new mortgage for 40% of the savings. (They'd better be sure they do the paperwork & disclosures correctly!)

"Why don't the strategic default people apply that 'walking away' logic to everything they borrow money to purchase? Their car is worth less the minute they drive it off the lot - why not quit making that payment? Common sense underwriting will return when the American public applies common sense to repayments. When they promise to pay back the loan they need to keep their promise, regardless of what the asset backing the loan is worth. The industry is trying to protect itself from the "strategic default" people....something we've never had to contend with before. So even if you have a "good loan" based on performance and risk, you still have to dot every "I" and cross every "T" twice so if the borrower executes their "strategic default", you don't have to repurchase (or make whole) the loan. We spend more time every day just trying to make our loans bullet proof than we do actually making the loan decision. OK - I'm done ranting - pass the Xanax."

Who are the 10 big servicers? By the end of the 2nd quarter, Bank of America was #1 with $2.2 trillion in servicing. Heading down the list we find Wells Fargo at #2 with $1.8 trillion, Chase with $1.4 trillion, Citi with $700 billion, Ally/GMAC with $400 billion, US Bank with $200 billion, SunTrust with $175, PHH with $155, PNC with $150, and OneWest/IndyMac with $110 billion. (The Florida lawyers mentioned above are not on this list yet.)

Servicing provides a great cash flow, and apparently is worth the headache for those who own it. Of course, if something goes wrong with foreclosures, as GMAC is experiencing in Ohio, look out. "If Ohio has 10,000 of these cases, there should be 10,000 hearings." So said an Ohio judge, regarding reviewing foreclosures. "I'm sympathetic to the fact that it's onerous for the lenders, but I still have to do my job." The judge said she will hear arguments (tell the truth - did you think it was a "he"?) related to the integrity of the foreclosure documents and may decide to allow depositions of individuals who signed affidavits in the case at a subsequent hearing. If she determines the circumstances rise to the level of fraud, GMAC could be found in contempt of court. OhioForeclosures

Every investor in fixed-income securities has choices to make: US Treasury debt, foreign bonds, corporate notes, etc. And each investor has limited capital, the supply of each of those is carefully monitored, and a large amount of one type can drive prices down and rates higher and compete for investment dollars. It seems that municipal bonds are about to see a lot of supply hit the market - over $10 billion this week, and $16 billion in the next 30 days, according to Ipreo LLC and The Bond Buyer. Some believe that issuers will have to make the yields more attractive to find a home for the bonds and get the deals done.

The National Association of Realtors (NAR) is urging the lending industry to make things easier to qualified buyers to become homeowners. Appealing to the agencies, the NAR's president said that the government agencies are impairing their own mission to provide mortgage liquidity to home buyers with unnecessarily restrictive limits on the availability of credit. "These policies are delaying recovery both of the housing market and the larger economy." With home ownership hovering in the mid-60% range, high by world standards, it is important to define "qualified buyers".

Someone already wrote to me about this. "Extending credit to unqualified buyers, or qualified borrowers who are walking away, is a key piece of the entire mortgage credit mess. Hasn't the NAR been reading the newspapers over the last few years? Realtors have never been known for their underwriting prowess. How about we crank up the rating agency machine while we're at it, where investment banks pay rating agencies to grade securities issued by...investment banks?"

It has almost been a week since the FOMC came out with its $600 billion bond buying program. How exactly will it work? The Fed, although it does not print money per se, effectively does so by expanding its balance sheet - currently triple where it stood in 2007. The Federal Reserve Bank of New York will buy $600 billion of government debt by next summer, a chunk of which will come from the expected $250-300 billion of income/early pay-offs from the $1.2 trillion of mortgages it purchased earlier this year. Most of those government securities will be in the two- to 10-year range - which is the part of the Treasury yield curve that helps to determine mortgage rates. Given supply and demand, as the Fed buys Treasuries, the rates on those securities will fall, and it is believed that rates on mortgages, corporate debt and other loans pegged to the Treasury securities will also drop, and cheaper loans will push Americans to spend. And if companies start to spend and expand, it will lead to more hiring, etc.

A mortgage industry vet wrote, "Now, here I am printing money out of thin air, creating electronic entries for specified amounts on my own balance sheet. I then, on my own wire, aka Fed Wire, send that amount over to the US Treasury Department's operating account. At exactly that same moment I simultaneously enter an asset entry on my own balance sheet which is identified by a specific CUSIP number for that particular U.S. Treasury bill or note that I just purchased with my magic money. Voila - I am making interest on money that didn't exist 30 days ago. This interest income becomes a part of my operating revenue. I have purchased a trillion or so dollars of bonds and notes, and I have earned (billions) of dollars in interest, from cash that didn't exist until I waived my magic money making wand. But if I really am another branch of the Federal government, why would I continue to collect interest from myself? Said another way, why wouldn't I simply forgive the US Treasury Debt?"

It appears that the USDA Rural Development program is back. Wholesalers, such as Wells Fargo and Mountain West, are telling their broker clients, "The USDA announced on Thursday that funding for the single family housing Guaranteed Loan Program is now available for fiscal year 2011." Wells said, "We are pleased to announce that RD Rate/Term Refinance transactions are now available at a 1% guarantee fee. Purchase transactions continue to be available at a 3.5% guarantee fee."

As expected, Ambac, the bond insurer, declared Chapter 11 bankruptcy yesterday, seeking relief on $1.6 billion of debt. "The Company was unable to raise additional capital as an alternative to seeking bankruptcy protection and was also unable to agree to terms with an ad-hoc committee of certain senior debt holders in order to restructure its outstanding debt through a prepackaged bankruptcy proceeding."

Yesterday had very little market-moving news, although mortgage prices finished the day worse by .5 in price on $1.4 billion of sales. It appeared that most traders spent their day rolling hedging positions than in bidding bonds. Little was said about the 3-year UST note auction, other than it was yielding .56% in pre-auction trading, which would be the least ever. Today is another day of no news, but the US government will be selling $24 billion in 10-year notes (and $16 billion of 30-year bonds tomorrow). The "benchmark" 10-yr is sitting at 2.55% and mortgages are roughly unchanged.

Home Sales UP in September!

2010-10-27T14:37:00.000-07:00

The U.S. Census Bureau and the Department of Housing and Urban Development have jointly released NEW RESIDENTIAL SALES for September 2010.
The survey is primarily based on a sample of houses selected from building permits. Since a “sale” is defined as a deposit taken or sales agreement signed, this can occur prior to a permit being issued. Changes in sales price data reflect changes in the distribution of houses by region, size, etc., as well as changes in the prices of houses with identical characteristics. It takes four months to establish a trend of new home purchases.

New Home Sales were expected to increase 4.0% to an annualized pace of 300,000 in September, up from 288,000 in August. As the effect of the first time homebuyer tax credit expiring wanes, sales are anticipated to inch forward. The NAHB index of homebuilder sentiment also rose 3 points in October, although the overall level was still still far from indicating optimism.

Reuters quick recap....

RTRS-US SEPT SINGLE-FAMILY HOME SALES 307,000 UNIT ANN. RATE (CONS 300,000) VS AUG 288,000 (PREV 288,000)

RTRS-US SEPT SINGLE-FAMILY HOME SALES +6.6 PCT VS AUG +1.1 PCT (PREV UNCH)

RTRS-US SEPT HOME SALES NORTHEAST +3.4 PCT, MIDWEST +60.6 PCT, SOUTH +3.2 PCT, WEST -9.9 PCT

RTRS-US SEPT NEW HOME SUPPLY 8.0 MONTHS' WORTH AT CURRENT PACE VS AUG 8.6 MONTHS

RTRS-US SEPT MEDIAN SALE PRICE $223,800, +3.3 PCT FROM SEPT 2009 ($216,600)

RTRS-US HOMES FOR SALE AT END OF SEPT 204,000 UNITS, LOWEST SINCE JULY 1968, VS AUG 206,000 UNITS

RTRS-TABLE-U.S. Sept single-family home sales rose 6.6 pct

Excerpts from the Release....

Sales of new single-family houses in September 2010 were at a seasonally adjusted annual rate of 307,000. This is 6.6 percent (±16.9%)* above the revised August rate of 288,000, but is 21.5 percent (±13.3%) below the September 2009 estimate of 391,000.

The seasonally adjusted estimate of new houses for sale at the end of September was 204,000. This represents a supply of 8.0 months at the current sales rate. The median sales price of new houses sold in September 2010 was $223,800; the average sales price was $257,500.

New home sales are up from record lows. Not many folks are talking about an increase in purchase business though. Are you?

Realtors, Triple your listing volume!

2010-10-27T14:36:00.000-07:00

Realtors, click here to triple your listing volume, and call me for a walk-through.

http://mwilson01.valuedlender.com/

Foreclosure Gate

2010-10-15T12:50:00.000-07:00

If you work in the mortgage industry or for a title insurer, you might not want to make any plans for the next six months. Foreclosure-Gate is about to explode. It is being alleged that many prominent mortgage lenders have been using materially flawed paperwork to evict homeowners. Apparently officials at quite a few of these firms have been signing thousands upon thousands of foreclosure documents without even looking at them. In addition, it is being alleged that much of the documentation for these mortgages that are being foreclosed upon is either "improper" or is actually "missing". As lawyers start to smell blood in the water, lawsuits challenging these foreclosures have already started springing up from coast to coast. In fact, some are already calling Foreclosure-Gate the biggest fraud in the history of the capital markets. JPMorgan Chase, Ally Bank's GMAC Mortgage and PNC Financial have all suspended foreclosures in the 23 U.S. states where foreclosures must be approved by a judge. Bank of America has actually suspended foreclosures in all 50 states. Now, law enforcement authorities from coast to coast are calling for investigations into this controversy and it could be years before this thing gets unraveled.

This thing just seems to escalate with each passing day. It is being reported that the attorneys general of up to 40 U.S. states will be working together on a joint investigation into this foreclosure crisis. Lawmakers in both houses of the U.S. Congress, including Nancy Pelosi and Christopher Dodd, have called for an investigation to begin on the national level. U.S. Attorney General Eric Holder said last week that he is looking into the issue. Things are certainly getting very serious out there. Never before has there ever been such a national focus on foreclosure paperwork.
But apparently there are good reasons for such scrutiny....

*One GMAC Mortgage official admitted during a December 2009 deposition that his team of 13 people signed approximately 10,000 foreclosure documents a month without reading them.

*One Bank of America employee confessed during a Massachusetts bankruptcy case that she signed up to 8,000 foreclosure documents a month and typically did not look them over "because of the volume".

But the "robo-signing" aspect of Foreclosure-Gate is just the tip of the iceberg. Apparently there is a whole lot more going on than just a bunch of bad signatures.

Peter J. Henning, a professor at Wayne State University Law School in Detroit, was recently quoted by MSNBC as saying the following about Foreclosure-Gate....
"You've got so many potential avenues of liability. You don't even know the parameters of this yet."

The sad truth is that potentially millions of foreclosures across the United States could potentially be invalid because the securitization process has muddied the chain of ownership. In fact, an increasing number of judges from coast to coast have been ruling that the "owners" of the mortgage have no right to foreclose on a property because they lack clear title.

At the core of this title controversy is MERS - Mortgage Electronic Registration Systems. MERS is based in Reston, Virginia and it was created by the mortgage industry to enable that big financial firms to securitize and swap mortgages at high speed. MERS allowed these big financial firms to largely avoid the hassle of filling out more forms and submitting new filing fees every time that a mortgage was traded.

But now MERS is facing some very serious legal challenges. A recent article in Businessweek described the situation this way....

A lawsuit filed on September 28th in federal court in Louisville on behalf of all Kentucky homeowners claims that MERS was part of a conspiracy to create false promissory notes, affidavits, and mortgage assignments to be used in mortgage foreclosures. Similar class actions have been filed on behalf of homeowners in Florida and New York. Karmela Lejarde, a MERS spokeswoman, declined to comment on any pending litigation.

The reality is that as millions of U.S. mortgages have been bunched together and traded around the globe at lightning speed, it has become increasingly unclear who actually has title to them and who actually has the right to foreclose on these properties.

Title insurers have backed the titles of millions of these foreclosed properties and now potentially find themselves in a heap of trouble. Some of the biggest title insurers have already begun circling the wagons in an attempt at damage control. For example, one of the biggest title insurance companies in the United States, Old Republic National Title Insurance, has already declared that it will no longer write new policies for homes that have been foreclosed on by JPMorgan Chase and GMAC Mortgage.

So what happens if nearly all title insurers start avoiding foreclosed properties?

Won't that make it much more difficult for the banks to sell the massive backlog of foreclosed properties that they have accumulated?

In addition, Americans that have purchased foreclosed homes may now be facing some serious problems themselves. Millions of Americans may now "own" homes that they do not have clear title for. When it comes times to sell those homes, many Americans may find themselves unable to do so.

Needless to say, this is a complete and total mess.

Already, U.S. banks have a record number of foreclosed properties that they need to clear out, and now all of this scrutiny on foreclosure paperwork and all of these lawsuits are going to grind the process of getting these homes sold off to a standstill.

In fact, the true legacy of Foreclosure-Gate may be the massive amount of bank failures that it causes.

It would be difficult to understate how much of a nightmare Foreclosure-Gate is going to be for U.S. mortgage lenders. Having to go back through the paperwork of millions of old mortgages is going to be a complete and total disaster. If banks end up being unable to foreclose on a large number of bad mortgages, it could potentially be enough to put many banks out of commission for good. Not only that, but the legal fees that many of these banks will accumulate defending lawsuits related to Foreclosure-Gate will be astronomical.

The U.S. mortgage industry was already on the verge of death, and Foreclosure-Gate may just be the straw that broke the camel's back.

The reality is that U.S. banks are drowning in foreclosures and this current crisis is just going to make things a lot worse. Back in 2005, there were approximately 100,000 home repossessions in the United States. In 2009, there were approximately 1 million home repossessions in the U.S. and RealtyTrac is now projecting that there will be an all-time record of 1.2 million home repossessions in the United States this year.

For the U.S. mortgage industry, Foreclosure-Gate must feel like someone has dropped a bomb on them after they have already been beaten up and doused with gasoline.

Attorney Richard Kessler, who recently conducted a study that found serious errors in approximately three-fourths of court filings related to home repossessions, says that Foreclosure-Gate could haunt the U.S. mortgage industry for the next ten years....

"Defective documentation has created millions of blighted titles that will plague the nation for the next decade."

While it may be easy to beat up U.S. mortgage lenders and say that they deserve all this, let us not forget that this is going to impact a whole lot of other people too.

It is going to become much harder to get a mortgage. It is going to become much harder to buy a home. It is going to become much harder to sell a home. The U.S. housing industry is likely to suffer a significant downturn due to all of this. There is even a good chance that the entire U.S. economy could be dragged down for an extended period of time.

So no, Foreclosure-Gate is not good news for anyone.

Well, except maybe for lawyers.

But for virtually everyone else this is really bad news. Any hope that the U.S. housing industry would experience a quick recovery is completely and totally gone.

NMLS License Renewal for 2001

2010-09-28T09:47:00.000-07:00

Friends and Partners,

Yesterday was my first day back with full attention to my business again. Andrea is home and taking care of Chloe and Zander from this point forward. This will again allow me to focus on impressing you and impressing my clients better than I probably have for the last 3+ years. There are major changes happening again in the mortgage business, and most of you will likely see or hear of hundreds of loan originators and/or processors that leave the industry over the next six months, starting around the first of the year. National licensing renewals begin on November 1 of this year, and my guess is that many will decide not to renew due to the new world in which we operate. I will be renewing, of course.

The facts are, in order for a loan originator to remain in this business after 4/11/11, they will need to be doing more business than they are now. Low production numbers will not be acceptable to most mortgage companies because of the soon-to-be cost of maintaining low producers. I have spoken to the heads of dozens of major national mortgage banks/brokers over the last three weeks, and not a single one of them sees an opportunity for the low-producing originator. By low-producing, I mean less than 2 loans per month. Believe it or not, there are thousands of loan originators, just in the Northwest, that are doing less than one loan per month.
In all of this, I see a fantastic opportunity to capture a nice portion of the market out there. Re-focusing on my business will allow me to rebuild my reputation as a fantastic communicator with my clients. This blog is my way of letting you know that I am committed to making a great life for my family and myself, using this business as the vehicle. It is me asking for an opportunity to impress you and some of your colleagues with my service to you. “Service” to me means fantastic communication, realistic expectations, over-delivering on pricing and closing dates, and a follow-up system that ensures complete satisfaction after the transaction is over.

Onward and upward we go...

Incredible rates, but don't get greedy!

2010-06-18T09:06:00.000-07:00

Yes, mortgage interest rates are insanely low right now. I have noticed that there are still homeowners out there that currently have a rate in the low 6's or high 5's, and for many of them, now is a great time for them to refinance---financially speaking anyway.

However, some of them are reluctant to make a move because they think rates will get even better. What these folks are not aware of is the fact that in order for interest rates to get any lower than where they are right now will take a massive move in the mortgage backed securities market. I'm not talking about just a "bad day at the stock market"; I'm talking about a global shocker, like the combined effect of Greece and Portugal's economy that has happened over the last couple months---and this would-be shocking and terrible event would have to happen now in order to fuel the current fire.

To get to my point: if you have an opportunity to save money, ask your mortgage professional to provide you with a "refinance savings analysis" (not an official mortgage term, but we all know what it means) in order to show you your short term and long term savings in terms of:

            1. total interest savings over the life of the new loan versus your current loan
            2. interest savings over the next five years
            3. monthly payment savings
            4. term savings (how many years can you take off of your current mortgage by refinancing?)
            5. mortgage interest savings (for refinances that consolidate other debts)

Without knowing the answers to those four (or five) factors, there is no way to make an intelligent decision about refinancing your home loan. For those out there that have bought into the myth about "reducing your rate by less than 2% (or 1% even) is the only way to make it worthwhile", there is possibly a great opportunity for them to save money that will be lost if they do not act while rates are this low. That is an inaccurate and misleading myth! Don't buy into it!

Because it will be so much easier for rates to increase than it will for them to decrease from these current levels, the gamble to hold out for that extra .25% reduction in rate is too huge---don't gamble. No, this is not me impulsing anyone to refinance so I can make money. I have seen several families miss opportunities to save in the past, and I am making sure I do everything I can now to see as few families miss opportunities in the future.

Real life scensario: if you are being quoted 4.50% on your loan right now (assuming that would truly be a benefit to you), and you are holding out for 4.25%, get off the fence! Take 4.50% while it's here! It is highly unlikely, due to the amount of movement that would be required by the "Discount Coupon" (this is an official mortgage term), that rates will get any lower than they are today. Don't get too greedy...

Now go forth, and refi!

HVCC

2010-05-21T09:28:00.000-07:00

For perhaps the first time since the S & L crisis of the 1980’s, appraisers are faced with an alphabet soup of proposed regulations which will dramatically and permanently alter the valuation industry landscape. But unlike the S & L crisis, appraisers and others are forming political, legal, and business assault teams and preparing for a long, painful fight over the HVCC, as well as other real estate reform bills.

Opening moves

The HVCC, or Home Valuation Code of Conduct, isn’t a regulation at all, but rather a privately negotiated set of policies promulgated by Fannie Mae and Freddie Mac. It originates not from a federal agency or from Congress directly, but from action started by the New York Attorney General against a lender (Washington Mutual) and a management company (eAppraiseIT), finally escalating into an investigation of Fannie and Freddie directly. In order to stop the investigation into their practices, the GSEs signed a settlement agreement with New York’s Attorney General, Andrew Cuomo, agreeing to create new rules which they would embody in the HVCC. At the last minute, the Office of Federal Housing Enterprise Oversight joined in and signed the settlement, which granted it federal rule status.

After first announcing that there would be 90 days to comment on the proposed new rule, OFHEO reduced the time period to 45 days, ending April 30th. But even in that short time, opposition to the HVCC was galvanized. We formed this newspaper and began a series of e-mail and print campaigns, culminating in the submission via our website of more than 31,000 comments of opposition to OFHEO, Fannie, Freddie, and the New York Attorney General's office. Simultaneously, we hired lobbyists and PR firms in Washington and began working the traditional political process in the capital. While we can't report specifically on most of the meetings and discussions held in that venue, we can say that the one-two punch of grassroots and corporate advocacy is effective.

As appraisers saw us acting more like an organization and less like just a software vendor, many became more vocal with their organizations, asking not only why we were carrying the torch, but why the organizations had endorsed the HVCC in the first place. By the time the OFHEO comment period ended, the appraisal organizations had effectively reversed their stances and submitted commentary much more critical of the HVCC than their prior endorsements.

Forming five battle lines

With the stage set, it's clear that the battle lines regarding the HVCC and industry reform in general are forming along five primary fronts:

1.Getting the parties to the agreement to make changes to the HVCC directly

2.Using congressional action to supersede the HVCC with like-minded but less damaging real estate reform legislation

3.Stopping the HVCC entirely through private litigation in the courts

4.Forcing modification to the HVCC's scope via other agencies

5.Altering business models to mitigate the HVCC's negative effects

We'll examine each area separately here, with more to follow online and in subsequent issues of this paper.

Changing the HVCC itself

The only way to change the HVCC directly at this point is to get the parties - OFHEO, the NY AG, Fannie, and Freddie - to change it themselves through basic logical persuasion. Each party comes to the table with different motivations, so getting all to agree on a change is difficult at best.

Ultimately, it appears that the NY AG holds most of the cards in terms of forcing any alterations, since Fannie and Freddie don't want a tobacco-like state damages lawsuit opened back up and OFHEO needed to be involved because their federal territory was being successfully invaded by a state. It's likely that Fannie and Freddie were afraid they would either lose in court or would have to negotiate substantial financial settlements had they not handled the lawsuit in this manner. The current arrangement gives Cuomo political advantages while shifting the costs away from Fannie and Freddie directly and keeping OFHEO relevant. That being said, it appears that Cuomo's office is genuinely seeking to solve a real problem, not just derive political benefit.

While some groups have visited with Cuomo's staff, OFHEO, and others, it's generally safe to say that if the content of a meeting can be reported publicly in detail, it's a sure sign that it won't change anything. Effectively influencing cases like this happens in off-the-record meetings which don't cause the parties to spend any "political currency". If you hear about it, it didn't cost much.

Fighting in Congress

Congressional real estate action is generally centered on the "Federal Housing Financing Regulatory Reform Act of 2008", which is currently controlled by the Senate Finance Committee. Elizabeth Dole, R (NC) is working to incorporate an amendment regarding the HVCC, instructing OFHEO to issue new rules consistent with other federal regulations and superseding the HVCC. Dole's amendment was not heard in committee due to a procedural stalling tactic not aimed at the amendment directly, but she plans to bring it to the floor of the Senate.

Appraisers should ask their Senators to support the amendment, and their Representatives should be encouraged as well to support its provisions when it reaches conference with the House. As noted in the political action articles on pages 6 and 7, Congress is preparing for the July 4th break, and after that they'll be in campaign mode due to the presidential election, so the time to affect the outcome through Congress is short. There is talk of fast tracking the housing bill and working directly with the House before it even comes up for Senate vote, which means the need to act now is even greater. Our articles on pages 4 and 5, regarding the economic impact of the HVCC and the political action website which we've deployed (at www.alamode.com/action), give detailed information on how to proceed.

The likelihood of litigation

The HVCC was born out of a lawsuit and may indeed end with one or more lawsuits as well. Due in large part to OFHEO's involvement, the HVCC falls under the purview of the Administrative Procedures Act (or "APA"), which requires specific procedures for commentary and public involvement when rules are set forth by federal agencies.

Virtually every letter submitted by banking associations, federal agencies, and major corporations (including, of course, our own letter) during the abnormally short commentary period cited the APA conflict and explicitly reserved the right to sue under the APA.

While Fannie's and Freddie's public stance is that the HVCC is part of a private settlement that doesn't invoke the APA, the generally accepted opinion is that a lawsuit based on APA violations would be filed and heard, though even a successful APA challenge might simply delay the HVCC without altering it.

Turf battles with other agencies

With a state attorney general demanding that a federal agency overseeing the GSEs expand its scope to include the internal policies and structures of national banks, it was inevitable that the banking-related federal agencies would respond negatively.

Indeed, the most scathing criticism to date came from the Office of the Comptroller of the Currency (OCC), John Dugan. Using a word we too applied in our own political action messages - "draconian," - Dugan's letter called on OFHEO to withdraw the HVCC entirely and work in manners consistent with existing federal procedures. Dugan also cited the APA violations.

Political maneuvering behind the scenes by the other agencies in Congress and the administration may result in a face-saving way for OFHEO to be barred from implementing the HVCC.

Fighting with new business models

There's one final area where the battle will be fought with dollars and ideas every day: In the industry itself. New business models will arise which defend against the challenges posed by the HVCC, in the context of the broader scramble to survive a massive real estate meltdown.

The post-bust liability environment (and the need for lenders to move now to be in compliance by January 1st just in case the HVCC succeeds) will shift most lenders toward a "firewall" structure. Some will move to traditional AMCs and hand off all liability. Some will create internal compliance departments which prevent loan production staff from influencing appraisers, while still using their own in-house managed fee panel. Others will choose a hybrid model, where an external service provides the technical firewall shielding appraisers from loan production staff, but without requiring a management company's fee split and without the extra cost of a new internal compliance staff.

Likewise, appraisers may form "co-op" arrangements, consolidate into larger corporate entities, or even create full-fledged regional and national AMCs. Others will simply work for AMCs at lower fee splits, and still others will leave the business entirely.

Winning the battles, without losing the war

It's happened on many occasions that a military force has won nearly every battle, yet lost the war. Even if appraisers manage to muster the forces to prevail in all five areas examined here, it's essential that the final objective for "winning" be kept in mind: Appraisers must be financially successful. Focus all of your energy on that end result, and this will wind up being a worthwhile fight. Ignore it, and it won't matter...

FHA TO PROVIDE EARLY RELIEF TO STRUGGLING HOMEOWNERS

2010-01-25T12:54:00.000-08:00

Homeowners with FHA-insured mortgage loans who are experiencing financial hardship are now eligible for loss mitigation assistance before they fall behind on their mortgage payments. Previously, these homeowners were not eligible for such assistance until after they had missed payments.

The Helping Families Save Their Home Act of 2009 signed into law by President Obama expanded FHA’s authority to use its loss mitigation tools to assist FHA borrowers avoid foreclosure to include those facing ”imminent default” as defined by the Secretary. FHA today issued guidance to FHA-approved loan servicers on how to assist these FHA borrowers.

“Loss mitigation assistance is beneficial to both borrowers and FHA because it helps borrowers retain their homes while protecting the FHA insurance fund from unnecessary losses,” said FHA Commissioner David Stevens. “FHA has always required lenders to establish early contact with delinquent borrowers to discuss the reason for missing a payment and to evaluate reinstatement options. Now servicers will have additional options for those borrowers who seek help before they go delinquent, which increases the likelihood that the borrower will be able to retain their home.”

Effective immediately, the loss mitigation options of forbearance and FHA’s Home Affordable Modification Program (FHA-HAMP) may be used to assist borrowers facing imminent default.

•FHA defines an “FHA borrower facing imminent default” to be an FHA borrower who is current or less than 30 days past due on the mortgage obligation and is experiencing a significant reduction in income or some other hardship that will prevent him or her from making the next required payment on the mortgage during the month that it is due.

•A forbearance agreement is an agreement by the loan servicer to postpone, reduce or suspend payments due on a loan for a limited and specific time period.

•FHA-HAMP allows qualified FHA-insured borrowers to reduce their monthly mortgage payment to an affordable level by permanently reducing the payment through the use of a partial claim combined with a loan modification. The partial claim defers the repayment of a portion of the mortgage principal through an interest-free subordinate mortgage that is not due until the first mortgage is paid off. The remaining balance is then modified through re-amortization and in some cases, an interest rate reduction.

The borrower must be able to document the cause of the imminent default which may include, but is not limited to, one or more of the following types of hardship:

1.A reduction in or loss of income that was supporting the mortgage loan, e.g., unemployment, reduced job hours, reduced pay, or a decline in self-employed business earnings. A scheduled temporary shutdown of the employer, (such as for a scheduled vacation), would not in and by itself be adequate to support an imminent default.

2.A change in household financial circumstances, e.g., death in family, serious or chronic illness, permanent or short-term disability.

Loan servicers must document the basis for its determination that a payment default is imminent and retain all documentation used to reach its conclusion. The servicer’s documentation must also include information on the borrower’s financial condition.

Additional information and guidance can be found on HUD’s website.

Good Bye 2009

2009-12-31T15:07:00.000-08:00

Some of us will miss it, many of us will not, but either way, 2009 was a year that none of us will soon forget. I'll save you the recap and keep this short. Good bye 2009, and thank you for humbling us. Innova Mortgage Services has always proudly served our customers up and down the west coast with the best mortgage pricing and best personal service available, and we look forward to serving you in 2010 and beyond.

Mortgage highlights to remember for 2010:

1. The Homebuyer Tax Credit ends on 4/30/10
2. Mortgage rates remain low, though economic forecasts indicate that this will truly not last much longer
3. Home prices continue to remain very low, respectively, and are within reach of many first time homebuyers
4. Mortgage lending has reached an unprecendented pinnacle of competitiveness as of 1/1/10, and many sub-standard lenders have been forced to exit the business
5. You will always find honest, straightforward, valuable advice when you visit the NW Loan Guru on my website, Facebook, Twitter, or simply contact me by email or phone at 503-885-2435.

HAPPY NEW YEAR!!!

Christmas Party Rescheduled Due to Freezing Rain

2009-12-11T11:46:00.000-08:00

Innova Mortgage Services Website

...plus, I'm sick. Who wants to be sick at their own party? We will reschedule it for January and re-brand it as a kick-off party for 2010. Happy Holidays!

Clackamas County Down Payment Assistance - Still Available!

2009-12-09T11:05:00.000-08:00

The Community Development Division (CDD) works with approved lenders to offer the Clackamas Homebuyer Assistance Program (CHAP). The CHAP program can loan up to $14,000 to help qualified first-time homebuyers pay for downpayment and reasonable closing costs. CHAP loans are zero-percent interest deferred-payment loans.

The CHAP program is funded through the federal Department of Housing and Urban Development (HUD).

Prior to obtaining a CHAP loan the first-time homebuyer must:

1. Complete an approved homebuyer training class.

Click here for a list of homebuyer training class.

2. Be approved for primary financing through an FHA-approved lender.

To be an "Eligible Applicant", the homebuyer must:

• Meet the HUD definition of a “first-time homebuyer” which means the buyer has not owned a home during the past 3 years, or is a displaced homemaker, or is a single parent.
• Be low-income. (See income Limits.) CHAP Income Limits as of March 2009

Number in Household 80% of Median:

1 - $39,200
2 - $44,800
3 - $50,400
4 - $56,000
5 - $60,500
6 - $64,950
7 - $69,450
8 - $73,900

• Demonstrate a financial need for CHAP assistance.
• Complete a homebuyer education program approved by the County.

To be a "Qualified Borrower", the homebuyer must:

• Have sufficient income to qualify for and support the primary debt.
• Be pre-qualified by a primary lender. (Contract sales are not allowed.)
• Have good credit.
• Contribute $1,000 in cash toward the purchase from the buyer’s own funds.

To be an "Eligible Property", the house must:

• Be located in Clackamas County.
• Have a purchase price less than $304,950.
• Meet the definition of affordable, standard single family housing (a single unit).
• Meet property standards and pass HQS inspection.
• Be free of chipped or peeling paint if the house was built before 1978.
• Not be occupied by a tenant unless the buyer is the tenant.

* Homes purchased through the CHAP program must be the primary residence of the homebuyer.
* Other program requirements apply. The CHAP Program is subject to funding availability. Take it while they are available!

Click here to apply!

Tax Credit Details

2009-12-01T14:02:00.001-08:00

Expanded Tax Credit is Good News for First Time and Repeat Home Buyers Alike!

Home sellers and potential buyers nationwide welcomed the recent news that Congress had decided to extend and greatly expand the Home Buyer's tax credit in an attempt to further stimulate the economy. Not only does the new legislation extend the existing first time buyer's credit until mid-next year, but it also creates a tax credit for qualified repeat buyers. The change in legislation will relieve home buyers scrambling to meet the original deadline and may encourage a wider range of buyers to consider purchasing a residence.

What Has Changed with the New Law?

Deadline: Whereas the original tax credit was set to expire on December 1st, buyers now have additional time to find their dream home! Buyers must have a contract to purchase a residence in place before May 1 2010, and the deal must close before July 1, 2010 in order to take advantage of the tax credits. At this stage, no additional extensions are anticipated.

Sale Price Limit: A ceiling has now been set for the sales price of homes eligible for the tax credit. For purchases made after Nov. 6, the tax credit is only available for any homes costing less than $800,000.

$6,500 Credit for Repeat Buyers: Homeowners considering a new home purchase may now be eligible for their own tax credit. Taxpayers who have lived in the same residence for five consecutive years out of the past eight can now qualify for a tax credit of as much as 10% of the purchase price of a new principal residence (up to a maximum $6,500). The new residence need not be a single-family home, and there is no requirement that the new residence must cost more than the previous residence. Note: the credit for repeat buyers does not apply to homes purchased prior to November 6th of this year.

More Accommodating Income Requirements: The tax credit was designed to phase out based on income levels, meaning the amount of the tax credit decreases as the filer's income approaches the maximum limit. Under the previous format, income restrictions called for the tax credit to begin phasing out for individuals making $75,000 annually, (modified adjusted gross income*), with no credit available to individuals making $95,000 or more. For married couples filing jointly, this "phasing out" range was $150,000 - $170,000 under the previous law. The income limits set within the new law are far more liberal. For single filers, the credits now begin phasing out at $125,000 up to $145,000 of modified adjusted gross income. For married couples filing jointly, the range begins at $225,000 and ends at $245,000.

The existing phase-out ranges of $75,000 to $95,000 or $150,000 to $170,000 for joint filers still apply to purchases on or before Nov. 6, 2009.

(*For most people, modified adjusted gross income will be the same as adjusted gross income.)

Anti-Abuse Measures: The new law contains anti-abuse measures designed to address and prevent fraudulent applications for the home-buyer tax credit. Persons who are under the age of 18 or who are claimed as dependants by other taxpayers will not be qualified for the tax credit program. Taxpayers taking the credit will also have to furnish proof of purchase. After filling out IRS Form 5405 to determine their tax credit amount, buyers must attach a copy of their HUD-1 settlement form (i.e. closing statement) as proof of the completed home purchase.

Additional Limitations on Buyer-Seller Relationship: Under the previous law, buyers were not eligible for the tax credit when purchasing a home from a lineal ancestor or descendent. The new law applying to purchases made after Nov. 6 also prohibits buyers from taking the credit if the home is purchased from a spouse or the spouse's lineal relatives.

What Aspects of the Original Credit Remain?

Up to $8,000 Credit for New Buyers: First-time home buyers remain eligible for a credit of as much as 10% of the purchase price of a new principal residence, up to a maximum $8,000. "First-time" is still defined as buyers who haven't owned a principal residence for a three year period prior to the home purchase (including both partners of a married couple).

Three Year "Principle Residence" Window: Neither the New Home Buyer Credit nor the Repeat Home Buyer Credit needs to be repaid provided that the buyer(s) reside in the home for a period of three years following the purchase. If within 36 months of the date of purchase the property is no longer used as the taxpayer's principal residence, the taxpayer is required to repay the credit. Repayment of the full amount of the credit must be included with the income tax return for the year in which the home ceased to be the taxpayer's principal residence. The full amount of the credit is reflected as additional tax on that year's tax return.

Tax Credit <> Not Deduction: The credits offer a refundable dollar-for-dollar reduction in what the taxpayer owes. For example, a taxpayer who owes $10,000 and qualifies for the full $8,000 tax credit would only owe the IRS $2,000. This offers a greater savings than a tax deduction.

The term "refundable" means that either of the home buyer credits can be claimed even if the taxpayer has little to no federal income tax liability to offset. If the qualifying credit exceeds the taxpayer's liability, the government would refund the excess portion of the tax credit. For example, if you qualify for an $8,000 credit but only owe $5,000 in tax, you could receive a $3,000 check from the Internal Revenue Service.

Tax Return Filing Options: 2009 home buyers may claim the credit on either their 2008 or 2009 returns, while 2010 buyers can claim the credit on either their 2009 or 2010 returns.

ATTENTION: First Time Home Buyers and Move-up Buyers!!!

2009-11-25T11:51:00.000-08:00

If there is one mistake that many homebuyers may make this season, it will be to wait until Spring to start looking for their home. Here are FOUR REASONS that waiting until Spring to find your home could be a costly mistake:

1. The First Time Home Buyer ($8,000) and Move-up Buyer ($6500) tax credit both end on 4/30/10. This means that you must have an accepted offer on your new home by that date.
          i. with the number of short-sales and bank-owned properties on the market, your offer could take MONTHS before it is accepted. Realtors have no control over the decision-time of the banks in accepting your offer on short-sales and bank-owned homes, and you will not want to put yourself in a position to rely upon a bank to approve your offer in time for you to qualify for your tax credit.
         ii. Spring is tax season. If you are someone who spends energy on taxes in the first quarter of the year, you will not likely have the desire to put as much energy into home-shopping as you would like to. Get it done now, focus on taxes in Q1.
         iii. In many areas of the NW, homes in the average buyer's price range are falling into bidding wars, induced by lower-than-market-value listings. Bidding wars can consume a lot of time, and if your bid (offer) gets chosen behind a higher bid, you have to start your search over, and you've what could be weeks of potential homesearching.

2. We are experienceing the lowest mortgage rates in history RIGHT NOW, and because the government cannot continue to support mortgage backed-securities, these rates WILL NOT LAST.

3. Home values have stopped declining in most areas. Homes in the FTHB price range, in some areas, are actually increasing due to demand. Most gurus (myself included) believe that we are experiencing the most favorable Buyer's Market in our entire careers.

4. Your realtor will have more time and energy to devote to you personally if you stay ahead of the curve. Waiting till Spring, like many others will, is going to possibly cause a bottleneck in the real estate industry's ability to serve you the way they prefer to serve you. In fact, Spring time is normally a bottleneck in the mortgage industry too. The sun pops out, and BAM! Home-buyers are flying at us.

So, if you want to take advantage of the lowest mortgage rates, the lowest home prices, your realtor and mortgage lender's availability, AND the soon-to-end tax credit, start getting the wheels rolling now, even if it's just a call to us or your realtor.

Our new blog spot.

2009-11-23T17:20:00.000-08:00

The Innova Mortgage Team has officially begun its new blog. We are experts in residential mortgage lending in Portland and all surrounding areas, and our team specializes in providing home buyers and homeowners in the Pacific Northwest with the best rates and unparallelled customer service. If you are looking for a home loan in Oregon or Washington, look no further. Innova Mortgage Services will astound you with its professionalism and delivery. Contact us when you are ready to get accurate answers to your serious questions about home loans. Look for more from us in the very near future. Until then, find us online at www.innovamtg.com where you can get up to the minute information on mortgage rates, loan programs, active home listings in your area, and much more information on our local area.