Chance Gates' Blog

– Establish that you would be better off with a modification than with refinancing: In general, borrowers should seek refinancing rather than a modification if they can do so at a significantly lower rate at a reasonable cost. However, you can’t refinance advantageously if you are behind in your payments, have little or no equity in your property, or don’t qualify for a refinance for other reasons such as a low FICO credit score or inability to document adequate income.

– Deliver the information the servicer requires, in the form the servicer specifies: The loan servicer is the company to which you make your mortgage payments. It will be the one you deal with on your modification. The most important part of the process is to place in the hands of the servicer all the information about you that the servicer needs to make a decision. While this information is pretty much the same for all servicers, each has its own questionnaire that it expects to be used.

To help you with this, I have compiled the information required by each of the major servicers and how to get their questionnaire in “Mortgage Servicer Information” on my Web site.

Make sure the information you provide is correct: Having the right form is one thing, but filling it out correctly is something else. A questionnaire with obvious errors may fall to the bottom of the pile, or it may lead the servicer to conclude that you do not qualify for a loan modification when, in fact, you do. Being accurate is a challenge for some borrowers because most questionnaires are not borrower-friendly. In the future, I will write about some of the sources of help available

Make sure your information does not get lost in the shuffle: Most servicers prefer to receive documents by fax, although some also provide mailing addresses. I am told fax is more reliable. A few servicers, including Chase and Wells Fargo, want borrowers to call them before submitting detailed data, and thus provide only telephone numbers for contact. They evidently prefer to have their own staff participate with the borrower in compiling the information.

The principal danger of delivering documents by fax is that they will get mixed up with those of other borrowers. To prevent that, place your name and mortgage account number at the top of every page you fax.

– Determine whether you are eligible for special modification programs: Servicers are under a lot of pressure and they might overlook your eligibility for specific programs. Borrowers who took subprime adjustable-rate mortgages after Jan. 1, 2005, that have interest rates scheduled to reset before July 31, 2010, may be eligible for a modification under the “fast track solution” adopted voluntarily by servicers last year. Borrowers with housing expenses that exceed 31 percent of their gross before-tax income may be eligible for a modification under the government’s recent Making Home Affordable program.

If you have good reason to believe that you are eligible under either program, add a statement to that effect in your hardship letter. (My Web site also has an article that looks more closely at the eligibility requirements for these programs.)

– Nudge the servicer as needed: The process of modifying mortgages is slow and error prone. A firm that two years ago may have had two people modifying mortgages today may have 200, most of them newly trained. Development of computer systems has lagged and much of the work is done manually.

So you may need to nudge. If the servicer’s stated policy is to reply within 21 days, call on day 21 if you haven’t heard back. If they give you a quick denial on the grounds of ineligibility and you believe that’s wrong, let them know it is wrong — in a nice way. Remember that getting a modification is not a negotiation, and you have no place else to go.

Jack Guttentag is professor of finance emeritus at the Wharton School of the University of Pennsylvania. He can be contacted through his Web site, http://www.mtgprofessor.com.

© 2009, Jack Guttentag

As a Reno/Sparks real estate professional, I encourage all questions and comments on the Reno/Sparks real estate market or any of the articles posted in this blog. Please feel free to use my back door to the MLS and search the houses available in the Reno/Sparks and most Northwest Nevada neighborhoods. I can be reached by email @ chance@ballard-company.com or  http://www.myspace.com/chancegates .  You can also follow me at http://www.twitter.com/chancegates .  If you are behind on your house payment and looking for a loan modification, go to making homes affordable to request a modification.  If the modification fails, contact your local real estate professional to help short sale your home.  To make sure there is no deficiency judgment a homeowner might find it necessary to hire an attorney. For a free copy of my blog titled  “5 Steps For Reno/Sparks Homeowners To Prevent Foreclosures” go to my about page http://chancegates.com/about and ask for more information on preventing foreclosures.

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By Paige Tepping

RISMEDIA, August 26, 2010–You wouldn’t buy a house without shopping around first, right? Then why would you commit to the loan you use to buy that house without making sure you’re getting the best deal possible? From the experts at LendingTree, here are six reasons why it’s essential to take a few minutes to browse before you borrow:

1. To get the best interest rate possible
Over the life of a $200,000, 30-year fixed rate loan, a one-tenth of a point difference in interest rate could save or cost you thousands of dollars.

2. To pay lower loan fees
Once your loan application is accepted, the lender will get back to you with a good-faith estimate (GFE), including an itemized list of all the costs associated with the loan. If there are any parts of the GFE that you don’t understand, don’t be afraid to ask the lender to explain each fee that is listed.

3. To avoid a prepayment penalty
In these transient times, it seems no one stays in their home long enough to pay down their mortgage the old fashioned way: in monthly increments over a period of decades. So you’ll want to be clear on whether the terms of your loan include a penalty if you pay off your mortgage early—either because you move or refinance.

4. To find a lender you feel comfortable with
You don’t want any surprises popping up at closing time. Get a lender who is responsive to your questions and is willing to give you the details in writing.

5. To find a lender that specializes in your situation
Recent volatility in the mortgage markets means that people with bad credit or little money for a down payment might have to look a little harder to find a lender.

6. To get the rate lock period you want
Once you’ve found the lender offering the best mortgage rate and terms, you’ll want to get a written commitment, known as a “lock” that puts in writing that the lender will make the loan to you at that the specified interest rate. The length of the lock can vary from 30-90 days, but many lenders will charge a fee for a rate commitment of longer than a month. Negotiate the lock period that is right for you, depending on when you plan to close on your new home and if interest rates are expected to creep higher during that time.

As a Reno/Sparks real estate professional, I encourage all questions and comments on the Reno/Sparks real estate market or any of the articles posted in this blog.  Please feel free to use my back door to the MLS and search house available in the Reno/Sparks and all Northwest Nevada neighborhoods.  I can be reached by email @  chance at ballard-company.com or http://www.myspace.com/chancegates

RISMEDIA, July 26, 2010—(MCT)—David Kosowski has a full-time job, a sky-high credit score, a solid debt-to-income ratio and enough cash stashed away to put a 20% down payment on the three-bedroom, two-bath home he’s had his eye on since spring.

But when he applied for a mortgage to cover 80% of the $495,000 purchase price of the Coral Gables, Fla., home last month, he was flatly denied.

His story is one that has played out with head-scratching regularity across the troubled housing market, industry analysts say, even as mortgage rates have dropped to historically low levels.

The average interest rate for a 30-year fixed-rate mortgage sank to a record-low 4.56% this week, according to government-sponsored mortgage buyer Freddie Mac. Fixed-rate 15-year mortgages dipped slightly to an average 4.03%, also a record.

But even as rates fall, lenders are raising the bar ever higher for applicants, making it harder for even financially-stable home buyers to qualify, and in some cases making homes affordable only to those able to pay with cash.

Kosowski, who seems to have weathered the recession and the housing market downturn better than many—he’s employed and has considerable equity in the three-bedroom home he purchased 10 years ago—said his application was rejected because the company he works for (and owns a 25% stake in) saw its earnings drop between 2008 and 2009.

That was enough, he said, for the bank to turn down his loan application—despite his 817 credit score, a history of meeting all debt obligations and a 21% debt-to-income ratio.

“They asked me to explain the earnings decline,” he said. “I wrote a letter explaining that the economy had been down in 2009, and the next day they said the loan was denied. I was very surprised.”

Steve Schneider, his mortgage broker, and owner of Greenwich Title Services in South Miami, said he was surprised as well. “His credit is as good as anyone I’ve ever worked with,” he said. “He should’ve flown through.”

Such rejections would have been unheard of a half-decade ago, when credit was flowing freely, often to people who couldn’t afford the homes and condos they were buying, said Doug Dewitt, a Miami-based real estate broker.

“Now the pendulum has swung completely in the other direction, and lenders are making you very accountable in terms of your credit history,” he said. “It’s like they don’t want to write one more bad loan.”

With South Florida’s housing market still struggling to recover from record-high foreclosures, toppled home values and a glut of inventory, the ease with which banks now turn down applicants is nearly unprecedented, he added.

Potential borrowers are being denied access to tantalizingly low interest rates for reasons ranging from insufficient down payments, to a less-than-perfect credit history, to concerns about the property or buildings they hope to buy into.

The current interest rates are so desirable because they translate into significant savings in monthly and total payments for home buyers. For example, someone getting a $250,000 home loan in July 2010 would save an average of about $155 each month, compared to someone getting a similar loan last July, when the average 30-year fixed interest rate was about a percentage point higher.

Mortgage lending in 2010—down about 50% from early 2009—has shown a complete 180-degree turn from the home lending practices that reigned before the housing market bubble burst, and represents yet another obstacle stalling a recovery in the housing market, those who track the industry say.

Kosowski had very little trouble getting a loan for the home he bought back in 2000, when his income was lower than it is today. As he looked to move into a bigger home this year, the stack of paperwork he had to fill was considerably thicker than it was 10 years ago.

“It’s night and day,” he said, comparing the two loan application experiences. “I had to give about a quarter of the information that they ask for now, my income was significantly less than it is now, and there was no problem getting a loan. It’s almost like they don’t want to lend.”

The low-interest rates have done little to spur activity in the housing market. Last week, the number of mortgage-loan applications for home purchases dropped to its lowest level since the 90s, the Mortgage Bankers Association found. Nearly four out of five applications were from existing homeowners looking to refinance, many of them rejected because of insufficient or nonexistent equity.

Despite prices that have fallen drastically in the past five years, traditional home sales to traditional, middle-income buyers have been pushed to the margins.

With the expiration of the federal home buyer tax credit and many still worried about losing their jobs, the stiff lending requirements of banks offer up yet another reason for the average person to not buy a home.

Kosowski, who works for a lighting manufacturing company, ended up paying cash for the Coral Gables home in June, and is hoping to get a refinance loan soon.

Greg McBride, senior financial analyst for Bankrate.com, predicted that mortgage rates would remain low for the foreseeable future, but it will take more than low-rates to spur a recovery.

“Low mortgage rates alone are not going to revive the housing market,” he said. “People are still nervous about their jobs, and reluctant to take the plunge into home ownership. And the market continues to be plagued by a very high level of distressed properties.”

As a Reno/Sparks real estate professional, I encourage all questions and comments on the Reno/Sparks real estate market or any of the articles posted in this blog.  You can email me @  chance at ballard-company.com or http://www.myspace.com/chancegates

(c) 2010, The Miami Herald.

Here’s some good news for the struggling US housing market: Thanks to the European debt crisis, mortgage rates are at historic lows.

The current average rate for a 30 year fixed loan is 4.87 percent, according to Bankrate.com. That’s the lowest rate for the 30 years since Bankrate started keeping track 25 years ago.

Even jumbo loan rates-loans for more than $417,000-have fallen. The 30-year fixed jumbo loan is at an average rate of 4.5 percent, down from nearly 6 percent at this time last year.

“It’s the best time in our generation to buy,” says Mark Zandi, chief economist at Moody’s. “It may be the best time in any generation. Mortgage rates are so low and with homes prices down and lots of inventory, you couldn’t pick a better time to buy or re-finance.”

Europe’s debt crisis is behind the drop. Nervous investors are flocking to the security of US Treasurys, which pushes down their yield and influences a host of consumer interest rates-including those on mortgages.

The decline is also good news for homeowners looking to refinance, particularly those who owe more on their mortgage than their house is worth.

“There’s a tremendous window on re-financing,” says Greg McBride, chief economist at Bankrate.com. “That’s particularly true for people who can take advantage of the government’s Home Affordability Refinance Program (HARP)-which allows home owners to refinance into low mortgage interest rates even if they’re property value has gone down.”

HARP, which was due to end at the end of this June, now runs through June of 2011.

“Think of the benefits if you buy or refinance now,” says McBride. “Locking in now at the lower rates means more more bang for the buck and more breathing room for homeowners when it comes to payments.”

But the decline in rates probably won’t last long, analysts say. So homeowners need to move fast.

“I think they won’t last much longer than a month or two at the best,” says Lawrence Yun, chief economist at the National Association of Realtors. “I can see them going up to 5.5 percent by the end of June if not sooner.

Read more at http://finance.yahoo.com/

As a Reno/Sparks real estate professional; I encourage all questions and comments, on the Reno/Sparks real estate market or any of the articles posted in this blog.  I can be reached by email at chance@ballard-company.com

RISMEDIA, April 15, 2010—The 30-year fixed mortgage rate on Zillow Mortgage Marketplace is currently 4.88%, down twenty basis points from 5.08% compared to this same time last week. The 30-year fixed mortgage rate rose last week, spiking Sunday at 5.05% before falling to 4.88% Monday.

Zillow’s real-time mortgage rates are based on thousands of custom mortgage quotes submitted daily to anonymous borrowers through the site, and reflect the most recent changes in the market. These are not marketing rates, or a weekly survey.

The rate for 15-year fixed home loans is currently 4.29%, while the rate for 5-1 adjustable-rate mortgages (ARM) is 3.49%.

The total volume of mortgage requests in the past week was up 4.5% from the prior week. Of last week’s requests, 21% were for refinance loans, 77% were for purchase loans and 2% were for home equity loans. The prior week, 25% of requests were for refinance loans, 73% were for purchase loans and 2% were for home equity loans.

As a Reno/Sparks real estate professional I encourage all questions and comments on the Reno/Sparks real estate market of any of the articles posted.  You can email me at chance@ballard-company.com or http://www.myspace.com/chancegates

For more information, visit www.zillow.com.

RISMEDIA, February 12, 2010—Thirty-year fixed mortgage rates on Zillow Mortgage Marketplace are currently 4.81%, down six basis points from 4.87% at this time last week. The 30-year fixed mortgage rates hovered at or below 4.80% for most of the past weekend and neared 4.75% on Monday.

Zillow’s real-time mortgage rates are based on thousands of custom mortgage quotes submitted daily to anonymous borrowers through the site, and reflect the most recent changes in the market. These are not marketing rates or a weekly survey.

The rate for 15-year fixed home loans is currently 4.27%, while the rate for 5-1 adjustable rate mortgages is 3.70%.

The volume of mortgage requests in the past week fell 9.4% from the prior week. Of last week’s requests, 34.7% were for refinance loans, 63.5% were for purchase loans and 1.9% were for home equity loans. The prior week, 34.5% of requests were for refinance loans, 63.5% were for purchase loans and 2.1% were for home equity loans.

As a Reno/Sparks real estate professional, I encourage all questions or comments on the Reno/Sparks real estate market or any of the articles posted on this blog.  I can be reached by email at:   chance at ballard-company.com or http://www.myspace.com/chancegates

On 7-1-09 a homeowner, owner-occupied residents, will be allowed to request for mediation in attempts to keeps his house and negotiate a loan modification.
Here the site for more information http://www.leg.state.nv.us/75th2009/Bills/AB/AB149.pdf

The 3 steps for a homeowner to keep his house:
1.) Talk to the bank and try to refinance.
2.) Contact a senator and ask for his help getting a loan modification.
3.) Request Mediation

Understand I’m not a lawyer and will not give legal advice, however if I can be of assistance with Reno/Sparks Nevada Real Estate part please let me know.

As a Reno/Sparks real estate professional I encourage all questions and comment on the Reno/Sparks real estate market or any article posted.  I can be reached by email at chance@ballard-company.com or http://www.myspace.com/chancegates

Too many people now of days are getting those irritating phone calls from debt collectors. Other are just barely making the monthly mortgage payments on a house they owe more on, than its worth.

Don’t walk away and let the house go into foreclosure. This will prevent someone from being able to buy another house for at least 4 years.   Plus the money the lender loses on the resale of the foreclosure, the IRS counts as earn income and my charge taxes on the difference.

If a home owner is a couple months behind with his mortgage payment here is a couple of things he can do to keep his house. First call the bank to see if they will refinance the loan.  If the bank is not cooperating don’t threaten to walk away from the house. The second thing to do is for the home owner to go see his senator.  He might be able to help get the bank to refinance you house. The Senator might even get them to reduce the principle of the loan to be comparable with Reno/Sparks Nevada Real Estate prices.

If steps one or two doesn’t work or if a person doesn’t want to live in the house. Sell the house for less than owed. This is called a short sale. This will allow a person to buy another house in two years instead of four. It is still advisable to see a lawyer and a CPA to make sure the debt is forgiven and the IRS doesn’t tax the seller on the forgiven debt. I would NOT recommend taking on a short sale purchase without your own representation of a knowledgeable licensed Nevada Real Estate Agent.

As a Reno – Sparks real estate consultant I encourage any question or comments on the Reno – Sparks real estate market or any of the articles I posted here.

I can be reach at  chance at ballard-company.com

■ For FICO scores between 550-619

■ 3.5% down payment

■ 30-year, fixed-rate FHA financing

■ Purchase and refinance

■ Gifts from close relatives acceptable

■ Job-loss insurance until 2011†

■ First-time homebuyers may qualify for up to $8,000 in

Federal tax credits‡
As a Reno – Sparks real estate consultant I encourage any questions or  comments on the Reno – Sparks real estate market or about any of the articles I post.  You can email me at chance@ballard-company.com

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• Answers to Questions About New Mortgage Modification Program (bucks.blogs.nytimes.com)
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A person I know has been trying to refinance his house for over 14 months. He needed a lower monthly payment in order not to lose his house. His bank was not cooperating with him so he contacted his senator. Once his senator’s office contacted the bank and identified themselves they were transferred to the president of the company. In efforts to shorten a longs story, the interest was reduced to 4% for 5 years and the principle was reduced by $50,000. The most incredible part is this all happened in less than 2 weeks. Once again please understand, I cut a lot of things he did in order to keep this article short.

As a Reno – Sparks real estate consultant I encourage any questions or  comments on the Reno – Sparks real estate market or about any of the articles I post.  You can email me at chance@ballard-company.com