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Posts Tagged ‘Cristina Warfield’

This issue is common in many market places today.  Mortgage lenders will only close/fund up to a specific percentage of the appraised value for refinance and for purchase.  When properties don’t appraise for the value necessary to refinance or the agreed upon purchase price most transactions fall out or cancel.  In the case of a purchase a home buyer could increase their cash down payment or the buyer and seller could renegotiate the purchase price AND your agent could take the five steps listed below.

1. Read the appraisal and look for errors.  Sometimes appraisers undervalue properties because they mistakenly use comps that are not neighborhood comps, sometimes the bedroom or bathroom count is wrong, sometimes the square footage is wrong.  On occasion, other neighborhood information is wrong, such as schools.  All of this data impacts the final appraised value.  If you find errors then dispute the appraisal immediately.
2. If the lender or appraiser refuse to correct the appraisal then ask for a second opinion.  Request that the lender consider a second appraisal.
3.  Once a true appraised value is decided and the value is still lower than the previously negotiated price then renegotiate.  In today’s market your Buyer pool may be primarily FHA buyers who lack cash to make up the difference or the buyer simply does not want to make up the difference.  Work with your agent to renegotiate the purchase price.  While most Sellers want to avoid this tactic the reality is that once you start over again you may face the same appraisal results with a new buyer and by then you may have lost considerable time.
4. Buyers should consider splitting the difference with the seller.  How long have you been shopping for your home?  What will you lose by waiting?  If you have been looking for a year and think the solution is to wait think again – when interest rates that are so begin to increase a waiting buyer could experience a payment increase of up to $200/month on a purchase price of $300,000.  Buyers making a home purchase where they will raise their children will reside in their homes for upwards of ten years which equates to a possible savings of $24,000 in monthly mortgage payments based on today’s lower rates.  So if your appraisal came in $20,000 below your negotiated price work on splitting the difference with the seller.
5. If all else fails, extend contingencies and change lenders.  A new lender, mortgage banker or broker will have their own appraisal process and approved appraisers that could have very different results.
Stay tuned for more tips on completing successful closings in today’s market!

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It’s official. The Federal Housing Finance Agency (FHFA) unveiled a new, revamped government mortgage refinancing program Monday.

The initiative involves a series of rule changes to the Home Affordable Refinance Program (HARP) to allow more underwater homeowners to reduce their mortgage debt by taking advantage of today’s rock-bottom interest rates.

Mortgages backed by Fannie Mae and Freddie Mac, and originally sold to the GSEs on or before May 31, 2009 are eligible for the program.

Under the revised HARP guidelines, the 125 percent loan-to-value (LTV) ceiling has been eliminated. Previously, only borrowers who owed up to 25 percent more than their home was worth could participate in HARP. That limitation has now been removed. The program will continue to be available to borrowers with LTV ratios above 80 percent.

The new program enhancements address several other key aspects of HARP that industry participants say have restricted its impact, including eliminating certain risk-based fees for borrowers who refinance into shorter-term mortgages and lowering fees for other borrowers, as well as allowing mortgage insurers to automatically transfer coverage from the original loan to the new loan.

In addition, Fannie Mae and Freddie Mac have done away with the requirement for a new property appraisal where there is a reliable AVM (automated valuation model) estimate already provided by the GSEs, and they’ve agreed to waive certain representations and warranties on loans refinanced through the program.

Not only are loans eligible for HARP considered “seasoned loans,” but a refinance helps borrowers strengthen their household finances, reducing the risk they pose to the GSEs. Thus, FHFA feels reps and warranties are not necessary for some of these loans.

With Monday’s announcement, the end date for HARP has been extended from June 30, 2012 to December 31, 2013.

The GSEs will release program instructions to lenders by the middle of next month, and FHFA expects some lenders will be ready to accept applications by December 1.

Since HARP was rolled out in early 2009, approximately 1 million homeowners have refinanced their mortgage loans through the program. FHFA estimates that with the revised guidelines, another 1 million will be able to take advantage of the program.

To qualify, borrowers must be current on their mortgage payments, but government officials believe by opening HARP up to more homeowners with higher thresholds of negative equity, it will help to prevent foreclosures by erasing the primary motivation behind strategic defaults.

Economists at the University of Chicago Booth School of Business estimate that roughly 35 percent of mortgage defaults are strategic. Numerous industry studies have found that homeowners who owe significantly more than their home is worth are more likely to throw in the towel and walk away from their mortgage debt even if they have the ability to continue making their payments.

“We anticipate that the package of improvements being made to HARP will reduce the Enterprises credit risk, bring greater stability to mortgage markets, and reduce foreclosure risks,” FHFA stated in its announcement Monday.

Fannie Mae and Freddie Mac also released statements in response to the announcement.
Michael J. Williams, Fannie Mae’s president and CEO, called the program a “welcome development.”

“By removing some of the impediments to refinance, lenders can more easily participate in the program allowing more eligible homeowners to take advantage of the low interest rates,” Williams stated.

Charles E. Haldeman, Jr., CEO of Freddie Mac said, “These changes mark another step on the road to recovery for the nation’s housing market.”
For more detailed information, please visit:

http://www.dsnews.com/articles/administration-announces-refinance-program-for-underwater-borrowers-2011-10-24

Authors: Krista Franks and Carrie Bay
Source: DSNews.com

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Another beautiful Sunday with Ian. Shopping the Santa Monica Farmers Market for our weekly provisions. Lovely music, warm sun, Ian in the petting zoo while I read. Followed by a nice beach bicycle ride to the park in Venice. We have so many wonderful communities in southern california where we can walk and enjoy our families and friends.

Santa Monica has a terrific volunteer program directory. It’s all about getting acquainted, giving back, meeting new people, learning new skills, sharing old ones. Remaining active, replacing loss and building a richer life by supporting our non-profit, human service agencies.

Take a look – you probably have a skill or special interest that you can share!!!

Santa Monica Volunteer Programs
Best Buddies for intellectual disabilities
Find the Children dedicated to the recovery of missing children
Heal the Bay Santa Monica Aquarium at the pier
Free Arts for Abused Children
School on Wheels for one on one tutoring of homeless children
Westside Food Bank

We hope you have a relaxing Sunday!!!

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Finally a new year has started which means I get to run again. I’m writing this blog this year to learn and hopefully share that just because you hit a road block in life it doesn’t mean you stop. It means you work harder, defy odds, climb over the road block and never look back. The dr says I can run or jog for up to 30 mins a day. This sounded like a joke especially since I just ran a marathon a few months ago. But I guess he knew better. I jogged a mile this morning at 13:20 – yikes and it hurt…long road ahead but it felt oh so good. If this is what I get for 30 days I’ll take it with a smile and so begins my training for something wonderful this year. I can’t weight train or work my abs so I will focus on miles and improving my time again. I will focus on raising money as I train for the Pediatric Cancer Research Foundation Half Marathon on May 6. Here’s to Jan 2012 and my goal to lose 10 lbs and improve my time to 10 min miles. Perhaps without hair I will run a faster time – regardless my 2012 journey has begun.

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 Santa Claus, Ind., is on the list

From Zillow blog

By Inman News

The average American city jump-starts the holiday season with the usual kind of merrymaking activities: tree-lighting festivals, the opening of ice skating rinks, and holiday concerts beckoning celebrants to get in the spirit.

But then there are cities and towns where the very name of the place conjures visions of sugar plum fairies, elves and reindeer 365 days a year. From Christmas Cove, Maine, to Saint Nicholas, Pa., and, of course, North Pole, Alaska, it’s hard not to adopt the yuletide glow.

Here’s a roundup of some of the most seasonally themed community names, and a sampling of their respective real estate.

North Pole, Alaska

Source: Wikipedia.com.

History: The naming of this northern town was no accident. According to a National Geographic profile on the tiny city, the town council renamed it North Pole in 1952 (from “Davis Homestead”), “hoping that toy manufacturers would come for the “Made in North Pole” bragging rights despite its inconvenience … as a manufacturing site.” No companies came for the manufacturing rights, so North Pole remains a bedroom community for nearby Fairbanks, which is located 14 miles away.

Holiday tradition: The North Pole’s claim to fame, of course, is its responsibility regarding children’s letters to Santa. Every year, North Pole middle and high school students respond to the letters that pour in.

North Pole home for sale:
Nhn Aaron Ave, North Pole, Alaska (below)
List price: $219,900

This recently constructed home sits in a newer North Pole subdivision with quick access to schools and shopping. The three-bedroom, two-bathroom home has 1,196 square feet of living space on nearly an acre-sized plot.

 

 

Rudolph, Wis.

Source: visitrudolphwi.org.

History: Although this Wisconsin dairy community was not inspired by the red-nosed reindeer, it has incorporated the fictional sleigh-leader in many seasonal festivities. The small town was actually named for the first male born in the community: Rudolph Hecox.

Holiday tradition: Like North Pole, Alaska, thousands of Christmas letters are sent to Rudolph each year. Other letters are directed through the village post office just to get the village’s sought-after Rudolph the red-nosed reindeer postmark. The town also features an illustration of Rudolph on all of its street signs.

Rudolph, Wis., home for sale:
5150 Stoney Brook Road, Rudolph, Wis. (below)
List price: $369,900

How about a Rudolph, Wis., home with a lot big enough to host a team of reindeer? This four-bedroom, three-bath home sits on an acre of lakefront land. The 4,400-square-foot home features a custom kitchen with granite countertops and high-end appliances, stone fireplaces, media room and sauna.

 

 

Santa Claus, Ind.

Source: virtualtourist.com.

 

History: The birthplace of good ol’ St. Nick? According to RoadsideAmerica.com, Santa Claus, Ind., was originally named Santa Fe and was asked by the postmaster in 1856 to change the name. At the time, the community apparently couldn’t think of anything other than Santa Claus. Today, the town completely capitalizes on its moniker with holiday-themed streets and St. Nick statues.

Holiday tradition: The post office is busy here, too, postmarking over a half-million holiday cards and processing about 10,000 letters from children.

Santa Claus home for sale:
918 S December 25, Santa Claus, Ind. (below)
For sale: $131,900

The newer-built home on the Santa Claus real estate market has three bedrooms, two bathrooms and 1,445 square feet of living space on a large, level lot. The one-story house has an open floor plan and spacious master bedroom with walk-in closet and attached bath.

 

 

Christmas, Fla.

Source: postcardfile.blogspot.com.

History: It’s an unusual community name, but this town’s history is rather basic. On Dec. 25, 1837, at the height of the Second Seminole Indian War, American troops built a fort 20 miles east of Orlando. They named it Fort Christmas, which was later adapted into the small town’s name.

Holiday tradition: The city celebrates all year long with an enormous lighted and decorated tree display. The town’s postal staff also works overtime each season postmarking holiday cards.
Christmas home for sale:

23524 Seneca Ridge Ct, Christmas, Fla. (below)
List price: $319,000

The four-bedroom, 3.5-bath home is a spacious ranch that sits on five acres and is a few miles southeast of nearby towns Chuluota and Oviedo. Built in 1988, the house has a large wraparound front porch, mudroom, and updated solar-heated pool.

 

 

Snowflake, Ariz.

Source: ci.snowflake.az.us.

History: You may not think snow when you picture Arizona, but this small town is nestled just north of the White Mountains and gets an occasional dusting. The town wasn’t named for the winter weather, but rather for its two founders: Erastus Snow and William Jordan Flake.

Holiday tradition: Twelve Days of Christmas that culminates in a grand parade where the city serves up to 1,000 cups of hot cocoa.

Snowflake home for sale
28 County Road 8572, Snowflake, Ariz. (below)
List price: $250,000

This brick colonial-style home is situated on a “mini ranch” with solar power and battery backup. Built in 1995, the home has five bedrooms, three bathrooms and 3,367 square feet of living space.

 

 

Bethlehem, Pa.

Source: travel.webshots.com.

History: Bethlehem, Pa., is by no means the only Bethlehem in the U.S. There are several scattered throughout the states, and nearly all are named for the ancient city in the Middle East.

Holiday tradition: The city wraps its downtown in 5,500 strands of lights every year — not as many as Clark Griswold (the lights-happy father portrayed by Chevy Chase in “National Lampoon’s Christmas Vacation”) but long enough to stretch two miles.

Bethlehem, Pa., house for sale:
1015 Stone Stack Dr., Bethlehem, Pa. (below)

Located in the “prestigious Saucon Fields” neighborhood, this Bethlehem home is a far cry from a hay-strewn manger. The stone and stucco home has three bedrooms, 2.5 bathrooms, 2,562 square feet of living space and a floor-to-ceiling stone fireplace.

 

 

Evergreen, Ala.

Source: Flickr/jimmywayne.

History: Like Evergreen, Colo.; Evergreen, Ala., was named for its greenery. The small town is located in central Alabama, about midway between Montgomery and Mobile.

Holiday tradition: In honor of the town’s name, Evergreen residents line their main street with more than 30 decorated trees for the duration of the season.

Evergreen house for sale:
10951 U.S. Hwy 31, Evergreen, Ala. (below)
List price: $122,000

Built in 1935, this three-bedroom, two-bath home has been remodeled and features refinished hardwood floors, crown moldings, and gas-log fireplace. A rear, screened-in porch looks out over a backyard pond.


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10/24/2011 BY: KRISTA FRANKS AND CARRIE BAY

It’s official. The Federal Housing Finance Agency (FHFA) unveiled a new, revamped government mortgage refinancing program Monday.

The initiative involves a series of rule changes to the Home Affordable Refinance Program (HARP) to allow more underwater homeowners to reduce their mortgage debt by taking advantage of today’s rock-bottom interest rates.

Mortgages backed by Fannie Mae and Freddie Mac, and originally sold to the GSEs on or before May 31, 2009 are eligible for the program.

Under the revised HARP guidelines, the 125 percent loan-to-value (LTV) ceiling has been eliminated. Previously, only borrowers who owed up to 25 percent more than their home was worth could participate in HARP. That limitation has now been removed. The program will continue to be available to borrowers with LTV ratios above 80 percent.

The new program enhancements address several other key aspects of HARP that industry participants say have restricted its impact, including eliminating certain risk-based fees for borrowers who refinance into shorter-term mortgages and lowering fees for other borrowers, as well as allowing mortgage insurers to automatically transfer coverage from the original loan to the new loan.

In addition, Fannie Mae and Freddie Mac have done away with the requirement for a new property appraisal where there is a reliable AVM (automated valuation model) estimate already provided by the GSEs, and they’ve agreed to waive certain representations and warranties on loans refinanced through the program.
Not only are loans eligible for HARP considered “seasoned loans,” but a refinance helps borrowers strengthen their household finances, reducing the risk they pose to the GSEs. Thus, FHFA feels reps and warranties are not necessary for some of these loans.
With Monday’s announcement, the end date for HARP has been extended from June 30, 2012 to December 31, 2013.
The GSEs will release program instructions to lenders by the middle of next month, and FHFA expects some lenders will be ready to accept applications by December 1.

Since HARP was rolled out in early 2009, approximately 1 million homeowners have refinanced their mortgage loans through the program. FHFA estimates that with the revised guidelines, another 1 million will be able to take advantage of the program.
To qualify, borrowers must be current on their mortgage payments, but government officials believe by opening HARP up to more homeowners with higher thresholds of negative equity, it will help to prevent foreclosures by erasing the primary motivation behind strategic defaults.

Economists at the University of Chicago Booth School of Business estimate that roughly 35 percent of mortgage defaults are strategic. Numerous industry studies have found that homeowners who owe significantly more than their home is worth are more likely to throw in the towel and walk away from their mortgage debt even if they have the ability to continue making their payments.

“We anticipate that the package of improvements being made to HARP will reduce the Enterprises credit risk, bring greater stability to mortgage markets, and reduce foreclosure risks,” FHFA stated in its announcement Monday.
Fannie Mae and Freddie Mac also released statements in response to the announcement.

Michael J. Williams, Fannie Mae’s president and CEO, called the program a “welcome development.”
“By removing some of the impediments to refinance, lenders can more easily participate in the program allowing more eligible homeowners to take advantage of the low interest rates,” Williams stated.

Charles E. Haldeman, Jr., CEO of Freddie Mac said, “These changes mark another step on the road to recovery for the nation’s housing market.”

• Tags: FHFA, Foreclosure Prevention, HARP, Making Home Affordable, Mortgage Rates, Negative Equity, Refinance, Treasury, Underwater, Fannie Mae, Freddie Mac •

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PMIC was ordered to stop writing new policies in August
By Inman News
Inman News™
October 27, 2011

PMI Mortgage Insurance Co. — one of the nation’s top three issuers of private mortgage insurers before it was forced to stop writing new policies in August — has been taken over by regulators, who have slashed claim payments and are seeking to place the company in receivership.

Saying growing losses had left the company undercapitalized, the Arizona Department of Insurance on Aug. 19 placed PMIC and PMI Insurance Co. under supervision and ordered the companies to stop writing new mortgage insurance policies in all states.

Fannie Mae and Freddie Mac — which require private mortgage insurance when homebuyers make down payments of less than 20 percent — suspended the companies from their list of approved insurers three days later.

On Thursday, the Department of Insurance obtained a court order authorizing it to take possession of PMIC. Parent company PMI Group Inc. said regulators had instituted a partial claim payment plan under which payments will be reduced to 50 percent, with the remaining amount being deferred as a policyholder claim.

In a complaint, regulators said PMIC had “recently experienced a rapid increase in losses that has adversely affected its solvency and that of its affiliates.”

During the second quarter, the complaint said, PMIC reported net incurred losses of $574 million and net earned premiums of $227 million — a 253 percent loss ratio.

Citing an internal PMI report, Arizona regulators said the situation worsened during the third quarter, with net incurred losses rising to $520 million and earned premiums dropping to $112 million. At negative $213 million, PMI’s “policyholders’ surplus” was below the required minimum of $1.5 million, the complaint said.

Mortgage insurers — including the government-backed Federal Housing Administration (FHA) and Department of Veterans Affairs (VA) loan guarantee programs — have been hit by rising claims on policies written during the boom.

After the housing boom went bust, private mortgage insurers tightened underwriting standards and lost market share to FHA and VA loan guarantee programs, which have grown from 20 percent of the market in 2007 to 84 percent last year, according to statistics compiled by Inside Mortgage Finance.

While premium increases and lower claim rates on more recent loans have helped FHA and VA loan guarantee programs rebuild their capital reserves, private mortgage insurers have missed out on much of that business.

PMIC and other PMI subsidiaries wrote $6.7 billion in new insurance last year, down 85 percent from $46.1 billion in 2007. During the same period, “insurance in force” — the dollar amount of insurance issued — remained at about the same level, $102 billion.

PMIC is the second private mortgage insurer to stop writing new policies this year. Republic Mortgage Insurance Co., a smaller player, was forced to stop making new commitments after waivers issued by North Carolina regulators expired Aug. 31.

The nation’s largest private mortgage insurer, MGIC Investment Corp., is operating under similar waivers issued by Wisconsin regulators. But in its latest quarterly report to investors, MGIC said its risk-to-capital ratio was 22.2 to 1, well within the maximum 25-to-1 ratio required by the Wisconsin insurance commissioner.

MGIC, which had $179 billion in insurance in force on 1.1 million mortgages as the end of September, reported a $165 million net loss for the third quarter, up from $51.5 million the same quarter a year ago.

Company officials warned investors that jurisdictions other than Wisconsin, including those that don’t have specific risk-to-capital ratios, could take actions that prevent it from writing new insurance.

In 2009 MGIC entered into an agreement with Fannie Mae allowing its subsidiary, MGIC Indemnity Corp., to insure loans in jurisdictions where MGIC is not able to due to its failure to meet capital requirements. That agreement is good through the end of this year. A similar agreement with Freddie Mac expires next year.

Radian Group, the second-largest private mortgage insurer with $125 billion in insurance in force, said in August that profits on derivative investments helped it turn a $137.1 million second-quarter profit, compared with a $475 million loss during the same quarter a year ago.

The company said its primary mortgage insurance subsidiary, Radian Guaranty Inc., had a risk-to-capital ratio of 19.8-to-1. More recently, on Sept. 19, Radian Group announced it had terminated Radian Guaranty’s chief operating officer and was laying off 7 percent of its mortgage insurance and corporate employees.

If claims on loans made during the boom are forcing some companies out of the private mortgage insurance business, higher premiums, tighter mortgage underwriting standards and lower claim rates could also make the business attractive to new players. Last year, Essent Guaranty Inc., which has backing from JP Morgan Chase, became the first company to enter the business in many years.

Copyright 2011 Inman News

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