Right now we have the lowest inventory of homes for sale in North Orange County than we have had in the last 6 years. We have more buyers than sellers and are getting multiple offers on our listings. Interest rates are below 4%!

Now is a great time to sell because the number of homes for sale on the market is so few!

My advice to sellers? Be brave and put your home on the market!

My advice to buyers? Be prepared to make a great offer because you will be competing against multiple buyers.

How to Successfully Get a Mortgage in 2012

Getting a mortgage in 2012 is a little more complicated than it has been in the past due to the challenging economy and increased government regulation of the mortgage industry. In fact, it’s like a giant hurricane has swept through the housing and mortgage markets, leaving chunks of debris and danger in its wake. But never fear; that’s why I am here! As your Certified Mortgage Planning Specialist, my role is to walk by your side, be your personal guide, and set you up for success every step of the way. Here are a few of the challenges that we will tackle together as we navigate the danger zone known as the 2012 mortgage process!

New Good Faith Estimate

The US government has created a new version of the disclosure form known as the Good Faith Estimate (GFE). The old GFE itemized all your closing costs and illustrated your “cash-to-close” – the amount of cash you would need to bring to the closing if you are buying a home, or the net proceeds you would receive at the closing from a cash-out refinance. The new GFE lumps in your closing costs under certain categories instead of itemizing them, and does not illustrate your cash-to-close. Also, if the seller is paying closing costs or points on your behalf, this is not reflected on the new GFE. In other words, it will look as though you are paying these fees even though the seller is paying them.

As your Certified Mortgage Planning Specialist, I go above and beyond the government’s minimum requirements for my clients. In fact, I have created special systems and easy-to-understand forms to help illustrate the total costs associated with the loan options available to you.

New Appraisal Guidelines

Most mortgage loans these days are either insured by the Federal Housing Administration (FHA) or sold to Fannie Mae or Freddie Mac. This means that mortgage banks and brokers need to follow the rules set by Fannie, Freddie, and the FHA. In 2009, Fannie and Freddie adopted new rules surrounding the home appraisal process. In 2012, the FHA followed suit and implemented many of the same guidelines. What this means for you is that the appraisal process is going to be more stringent and inflexible, costly, and time consuming than it has been in the past. Standardizing the mortgage planning process through participation with the CMPS community of experts.

In fact, many appraisals now go through multiple layers of screening and are handled by Appraisal Management Companies, resulting in higher costs and fees. Also, loan originators are prohibited in most cases from ordering appraisals or communicating directly with appraisers. Even so, it is important to keep in mind that an appraisal is simply somebody’s opinion of what your home would sell for in today’s market. Appraisers are required to consider the selling
prices of short sales and foreclosures in the local market when determining the current market value of your home. This may result in a value estimate that may not agree with your own opinion of what your home may be worth. You and I are entitled to disagree with the appraiser and have a different opinion, but the lending guidelines that we need to follow require us to use the appraiser’s opinion when calculating your loan amount and strategy.

As your Certified Mortgage Planning Specialist, my commitment to you is that I will help you understand the appraisal report once it is completed. If there are any errors, I will do what I can to get them corrected. Most importantly, I will work hand in hand with you to adjust the mortgage strategy as necessary if the appraiser’s opinion of value comes in below what you or I think your home may be worth.

New Disclosure Rules

The US Congress has enacted some new laws, and the Federal Reserve Board has issued some new guidelines that could delay the loan process. For example, if the APR on your loan changes by more than 0.125% before the closing, the lender needs to issue new disclosure forms and give you time to review the new forms.

Here are just a few examples of what could cause the APR to change:

• You decide to lock in your interest rate or get a rate lock extension
• You decide to reduce your loan amount
• You are getting an adjustable rate mortgage and the index value changes
• Your credit score changes before closing, resulting in a higher rate or higher fees
• You decide to pay more or less points than what you initially requested

As your Certified Mortgage Planning Specialist, my commitment to you is that I will help you avoid costly delays to the best of my ability by planning with you ahead of time and setting you up for success. While I can’t control everything that happens during the loan process, I do have the experience to know what pitfalls to look out for and help you plan accordingly.

Standardizing the mortgage planning process through participation with the CMPS community of experts.

Higher Credit Score Guidelines
As stated above, most mortgage loans these days are either insured by the Federal Housing Administration (FHA) or sold to Fannie Mae or Freddie Mac. This means that mortgage banks and brokers need to follow the rules set by Fannie, Freddie, and the FHA – all of whom have issued stricter credit scoring guidelines. I know it sounds ridiculous, but if your credit score is less than 740 (gasp!) you may get hit with higher fees if your loan is being sold to Fannie or
Freddie! Most of my clients are responsible individuals who take pride in paying their bills on time and maintaining a good credit rating. However, many Americans have recently been hit with unexpected financial difficulties due to the challenging economy.

In fact, many credit card companies have reduced the credit limits on accounts that have never even been late. This is causing credit scores to go down across the board for people who have never been late on any payments in their life! If you fall into this category, or if you have some challenges with your credit score, you may get hit with higher costs when it comes to getting a mortgage. As your Certified Mortgage Planning Specialist, I will work with you to evaluate your
options and point out strategies and ideas for increasing your credit score and getting a great deal on your mortgage.

Please contact me for more information on any of these items and how they may impact your situation. As always, I am here for you every step of the way. Together, we will make getting a mortgage in 2012 a very rewarding experience for you and your family!

Standardizing the mortgage planning process through participation with the CMPS community of experts.

Alan World, CMPS ®
NMLS Number 234162
Golden Empire Mortgage
1106 Town & Country Rd
Orange, CA 92868
714-569-3636 direct
888-806-5739 alternate
714-569-3630 fax
alworld@earthlink.net”

How would you like it if your bank made more money when you couldn’t pay your mortgage or if they refused to refinance you, than they would make if you could make your payment and refinance? Essentially NPR and ProPublica have pointed out that Freddie Mac made investments in certain types of securities that can be interpreted like that.

Various news agencies have reported that “When Homeowners Lose, Freddie Mac Wins” under these types of investments. Other agencies, most notably, Forbes, has pointed out that these investments are not abnormal and reasonable. They pointed out that less just over 1 half of 1 percent of Freddie Mac’s portfolio was used to purchase these investments.  Forbes even references the investments made by Orange County in 1994 that led to OC’s bankruptcy.

At first glance it’s shocking to believe that the same agency that is supposed to help homeownership would make these kind of bets. I believe it would be is a conflict of interest if there we actually betting against homeowners. I’m not a bonds trader or investment banker and I don’t understand all the lingo that I find in the articles I’ve read, but it sounds like it was a bet against interest rates going up and not against homeowners directly.

What do you think???

Links to Various Articles:

http://www.npr.org/2012/01/30/145995636/freddie-mac-betting-against-struggling-homeowners

http://www.huffingtonpost.com/2012/01/30/freddie-mac-investments_n_1240956.html

http://www.mortgageorb.com/e107_plugins/content/content.php?content.10825

http://www.forbes.com/sites/danielfisher/2012/01/30/freddie-mac-bets-against-refinancing-or-just-higher-rates/

“Need a status update on your short sale? Want help with an issue that’s delaying the process? Having trouble getting responses?

Your short sale specialist (at BofA) should always be your first point of contact for resolving your short sale questions and concerns. Conduct all your communications via Equator messaging, not through your personal email. (This will soon to be a requirement.) Equator messaging will:

• Secure and protect information sent in the message
• Document all communication efforts in one location
• Improve response times because short sale specialists respond to Equator messages first

To make the most effective use of Bank of America’s response system, please contact the following resources in this order when seeking solutions to your short sale concerns:

1. Your short sale specialist: Send a message via Equator by selecting the negotiator (or closing officer) in the “To” field and providing details of your issue. You should receive a response within two business days. If there’s been no answer after that time, you can contact…
2. The short sale team lead: Send a message via Equator to explain your issue. You can select the team lead from the drop-down menu in the “To” field when composing an Equator message. Allow two business days for a response. If you still do not have an answer, you can call…
3. Short Sale Customer Care: Call 1.866.880.1232 to explain your issue. Short Sale Customer Care is available Monday – Friday 8 a.m. to 10 p.m., and Saturday 9 a.m. – 5:30 p.m. Eastern.

If you have an urgent need, such as a foreclosure postponement, please call Short Sale Customer Care at any point in the process.”

I have also found the tweeting about BofA is a great way to get them to respond quickly.  They have a customer service department via Twitter that is very quick to respond.

I hope this helps.  If you have your loan with Bank of America and need an expert short sale agent, please give me a call at (714) 904-7877.  Thanks and I look forward to helping you!

Offer price: $525,000 – $575,000

For a private showing, please call (714) 904-7877.

In Real Estate, Keeping Current Matters!

by The KCM Crew on January 10, 2012

“Dear Aaron,

We are writing this letter to express our deep gratitude for representing us in the sale of our home. You made the complex process of a short sale seem extremely uncomplicated. We appreciated your attention to detail and your enthusiasm to help us.

We have dealt with other realtors in the past however; they were no comparison in service and commitment. We also respect your knowledge of the real estate market and new technology to help in the process. You were extremely responsive and available which says volumes about the type of work ethic you possess.

Again, we are nothing but pleased with your performance and would most definitely recommend you to everyone.

Sincerely,

Mr. and Mrs.  Youngblood”

Thank you for the letter! It was a pleasure working for you and I enjoyed helping your family every step of the way. May God bless you in your new home.

For estates of individuals who died in 2010, executors have until January 17, 2012, to elect not to have estate tax apply and to have the beneficiary’s basis in property received from these 2010 decedents determined under the modified carryover basis rules in Sec. 1022. Effectively the beneficiary’s basis in property received will be the lower of:

1. The fair market value on the date of the decedent’s death; or

2. The adjusted basis of the property immediately before the death of the decedent, plus certain additions

Each estate will receive potential basis additions, including:

1. $1.3 million basis step-up;

2. $3 million addition to the surviving spouse

This election is made by filing Form 8939, Allocation of Increase in Basis of Property Acquired from a Decedent.

The estate and gift tax lifetime exclusion increases from $5 million to $5.12 million for 2012.

If you have any questions, please don’t hesitate to contact me.

Mike Agresti, CPA
Tax Manager
Lesley, Thomas, Schwarz & Postma, Inc.