The Ultimate Mortgage Secret Revealed Coming January 2015

Like you we believe in family and have been busy with the holidays. To make up for my absence I would like to offer you a behind the scene look at Wholesale Mortgage Lending in the 21st Century.

We are going to show you what the new disclosure will look like that is replacing the existing confusing disclosures that not even the loan officers understand. The new disclosure that will be implemented across the nation, will be so easy, even the most simple people will enjoy shopping for their next mortgage.

To top it off, since we are saying good bye to an interesting chapter in mortgage history, I am going to reveal in the most logical way possible the ultimate secrete in the Wholesale Mortgage Industry. We want to give you a behind the scenes look into a few types of mortgage companies to show you what really goes on when you Google for mortgage rates and what happens with your personal information. The answer is sure to shock you.

Do not worry, its not a book. It will be on soEZ.tv. 

Didn't Fannie Mae Get A Huge Bailout?!

They sure did...to the tune of $188,000,000,000!

So who are they to set guidelines that say your buyer can't get a loan if they had a foreclosure, short sale or bankruptcy? In fact, every major lender in the country went through a similar bailout process with OUR TAX DOLLARS. Now, the major lenders and government entities have created what they call a"Qualified Mortgage" which prevents millions of Americans from being able to obtain a home loan for being a victim of the financial crisis that they created, or worse yet, the heinous crime of INDIVIDUALITY!

FOMC Announced the End of QE3 (November)

Yesterday the FOMC announced the end ofQE3 (November) stating that the under-utilization in the labor market is gradually diminishing Provided By  and that the Fed will likely maintain the 0-1/4% target Fed FundsRate for a considerable time. They recognized that inflation continues to run below their long-run goals and that recovery in the housing sector remains slow, but believe that the overall economic trend is improving. With the timing of rate hikes being largely data dependent, and the modestly hawkish statement released yesterday, we anticipate less Fed dependent pricing in the long end of the curve and the introduction of an element of volatility that has been suppressed in recent years ashedge conscious buyers enter the MBSpurchase space. GDP increased at an annual rate of +3.5% in the third quarter of 2014, following a +4.6% GDP print in the second quarter. The increase in real GDP in the third quarter can be attributed to positive contributions from personal consumption expenditures (+1.8%), exports (+7.8%), non-residential fixed investment (+5.5%), federal government spending (+10.0%), and state and local government spending (+1.3%). Initial Jobless Claims rose to 287K vs. 283K prior (consensus 285K) andContinuing Claims rose to 2384K vs. 2351K prior (consensus 2352K). Although claimsincreased last week, the monthly trend is still at 14 year lows, a sign that the labor market is strengthening. The curve has bull flattenedwith 2s10s down -2.8 bps and MBS is under-performing treasury hedges by 1.5-2ticks.   This Week's Events:   DATE EVENTS TIME (PDT) PERIOD SURVEY ACTUAL PRIOR REVISED 10/30 InitialJobless Claims 05:30 October 25 285K 287K 283K 284K 10/30 Continuing Claims 05:30 October 18 2352K 2384K 2351K 2355K 10/30 GDPAnnualizedQoQ 05:30 3Q A 3.00% 3.50% 4.60% - 10/30 Personal Consumption 05:30 3Q A 1.90% 1.80% 2.50% - 10/31 Personal Income 05:30 September 0.30% - 0.30% - 10/31 Personal Spending 05:30 September 0.10% - 0.50% -

New Home Sales Surged +18.0% In August

New Home sales surged +18.0% in August to a much higher-than-expected annual rate of 504K, the biggest monthly increase since January 1992. Consensus for September New Home Sales is for a decline of -6.8% to 470K (YoY). Treasuriesare opening slightly higher this morning with MBS 1-2 ticks tighter to treasuryhedges, and the curve has bull flattenedwith 2s10s down -1.7 bps.

Provided by SWMC

Lenders Still Bending Rules, Borrowers Still Not Shopping

This article will help homeowners:

Understand the purpose of the good faith estimate (GFE);

Understand the mortgage broker’s role in explaining to a borrower how to use the GFE; and

Review the changes made with the proposed integrated GFE/Reg Z disclosures.

The good faith estimate is designed for shopping around

Within three days after a borrower’s loan application is first submitted to a mortgage lender, the lender must prepare and hand the borrower an accurate good faith estimate (GFE) of closing costs. The estimates are required by the Real Estate Settlement and Procedures Act (RESPA). [12 CFR §1024.7(a)(1)]

RESPA regulations on use of the GFE are designed primarily to eliminate increases in lender fees at the time of closing, not at the time of the estimate. The binding GFE is meant to give borrowers an accurate portrait of what they will be obligated to pay to obtain a mortgage. HUD created more rigorous standards for the GFE in order to allow borrowers the opportunity to choose a loan fully knowing what they are getting into and what the competition has to offer, which will hopefully reduce the amount of homeowners who are trapped paying costs they claim were never disclosed.

The continued effort of the industry, and regulators, is to craft a better GFE. Their goal is two-fold:

make it easier for borrowers to shop around and be able to readily compare several loan offers before committing to any single loan; and give borrowers a tool they can use to compare the costs initially disclosed by the lender with the final settlement charges reflected on the HUD-1 statement to ensure the borrower is not surprised with a disadvantageous loan term at closing.

But how is the GFE being used in practice?

Lenders still bending rules, borrowers still not shopping

The GFE, given to borrowers within three days of submitting their home loan application, is prohibited from exceeding 10% of the final closing costs, otherwise lenders pay the difference. However, some lenders purposefully over quote their estimates to ensure the final number is within the required 10% range.

After meeting with CFPB staff in 2011, the American Land Title Association (ALTA), one of the nation’s largest title insurance trade associations, performed a survey in April of 2012 regarding the accuracy of the GFEs their members observed.

Of the 205 closing agents who responded, nearly 75% have observed lenders over quote their GFEs and pad them with estimates for general services like “document preparation” and “warehouse fees” which don’t make it to the final statement. More than half of the agents surveyed reported being pressured to cut their own fees in order for the lender to make it within the 10% buffer.

Further, 75% of respondents indicated borrowers receive more than one GFE from a single lender, thereby confusing borrowers.

Two thirds of agents surveyed claimed lenders do not attach the list of closing service providers, which would encourage borrowers to shop around for the most competitive rates. Likewise, 75% of agents observed borrowers do not shop around for title and escrow services.

And it’s not just a one-sided failure: borrowers aren’t doing everything they can to protect their own interests. More than half do not even use the GFE they received to compare it to the HUD-1 Settlement Statement. 

While ALTA’s informal survey was not statistically large, its findings indicate that continued effort is required to both make these forms more visible to the inexperienced borrowing public, and more restrictive on lenders. [ALTA Comment Letter to CFPB’s Ben Olson Summarizing Results of the GFE Survey, April 12, 2012.]

Mortgage and Foreclosure Scams | Housing - Avoiding Foreclosure

Housing - Avoiding Foreclosure

If you miss your mortgage payments, you may lose your home through foreclosure. Your lender can use foreclosure as a legal means to repossess your home. If you owe more than your property is worth, a deficiency judgment is pursued. Both foreclosures and deficiency judgments have a negative impact on your future credit. You should avoid foreclosure if at all possible.

These steps can help:

• Do not ignore the letters from your lender. If you're having problems making your payments, call or write to your lender's loss mitigation department immediately. Explain your situation. Be prepared to provide them with financial information, such as your monthly income and expenses, loan documents/ type of mortgage, tax returns, the amount of equity in your home. Without this information, they may not be able to help.
• Stay in your home for now. You may not qualify for assistance if you abandon your property.For example, the Hope for Homeowners program only offers 30-year fixed-rate mortgages to owner occupiers.
• Contact a HUD-approved housing counseling agency. Call 1-800-569-4287 or TDD 1-800-877-8339 for the housing counseling agency nearest you. These agencies are valuable resources.

HUD counselors frequently have information on services and programs offered by government agencies as well as private and community organizations that could help you. The housing counseling agency may also offer credit counseling. These services are usually free of charge.

Mortgage and Foreclosure Scams

Most mortgage professionals are trustworthy and provide a valuable service by allowing families to own a home without saving enough money to buy it outright. But dishonest or "predatory" lenders do exist and engage in lending practices that increase the chances that a borrower will lose a home to foreclosure. Some abusive practices include:

• Lease-back or rent-to-buy scams: You are asked to transfer the title to your home "temporarily" to the scam artist who promises to obtain better financing for your mortgage and allow you to stay in your home as a renter with the option to purchase the home back. However, if you do not comply with the terms of the rent-to-buy agreement, you will lose your money and be evicted like any other tenant.
• Fake "government" modification programs: These scams claim to be affiliated with the government or require that you pay high fees in order to benefit from government modification programs. Remember that you do not have to pay any fees to participate in government-approved programs. Some frauds may even use words like "federal" or "government-approved" or acquire website names that make consumers think they are associated with the government.
• Refinance fraud: The scam artist offers to be an intermediary between you and your mortgage lender to negotiate a loan modification. The scam artist may even instruct you to make payments directly to him or her, which the scammer will send to the lender. However, the scam artist will not forward the payments to your lender and you could still lose your home.
• "Eliminate your debt" claims: Some companies may make false legal claims that you are not required to repay your mortgage or that they know of "secret laws" that can eliminate your debt. Do not believe these claims.
• Refinance scams: You are encouraged to sign "foreclosure rescue" loan documents to refinance your loan. In reality, you have surrendered ownership of your home because the loan documents are actually deed transfer documents. You may falsely believe that your home has been saved from foreclosure until you receive an eviction notice months or even years later.

Beware of Foreclosure Rescue Scams-Help is Free

• Beware of anyone who asks you to pay a fee in exchange for a counseling service or modification of a delinquent loan.
• Scam artists often target homeowners who are struggling to meet their mortgage commitment or are anxious to sell their homes. Recognize and avoid common scams.
• Beware of people who pressure you to sign papers immediately or who try to convince you that they can save your home if you sign or transfer the deed to your house over to them.
• Do not sign over the deed to your property to any organization or individual unless you are working directly with your mortgage company to forgive your debt.

Making Home Affordable

The Making Home Affordable Program offers opportunities to modify or refinance your mortgage to make your monthly payments more affordable. It also includes the Home Affordable Foreclosure Alternatives Program for homeowners who are interested in a short sale or deed-in-lieu of foreclosure. E-mail info@soez.tv or call the Home Loan Helpline, 1-855-995-SOEZ (7639).

Short Sale - Foreclosure - Chapter 7 BK - Chapter 13 BK - What Are My Options?

SoEZ.tv	SHORT SALE / OIL	FORCLOSURE	CHAPTER 7 BK	CHAPTER 13 BK
FREDDIE MAC	Seasoning: Financial Miss-Manage.:4 Yrs Extenuating circumst.: 2 Yrs Max 90% LTV	Evaluated by LP
FANNIE MAE	4  Years from  completion date	7 Yrs from completion date	4 Yrs from discharge or dismissal date	2 Yrs from discharge date 4 Yrs from dismissal date
FHA	Permitted with mtg/installment OX30 for 12 months prior to short sale. 3 yrs if in default.	3 Yrs from completion date, exceptions with extenuating circumstances	2 Yrs from discharge date, but not less than 12 Months w/ extenuating circumstances	1 Yr of payout must elapse & payment performance must be satisfactory; Must receive permission from court to enter into a mortgage
VA	Permitted with mtg/installment OX30 for 12 months prior to short sale. 3 yrs if in default.	3 Yrs from completion date with AUS Refer	2 Yrs from discharge date with AUS Refer
USDA	3 Years from completion date
JUMBO	Refer to specific Jumbo guidelines

Information provided by So EZ Mortgage.

SoEZmortgage.com

Justice Is Served To Unethical Mortgage Lenders

Consumer Financial Protection Bureau v. Castle & Cooke Mortgage, LLC (U.S. District Court – District of Utah, Central Division Case No. 2:13CV684DAK)

Loan originator compensation rules prohibit any person from paying a loan originator based on any terms of a loan. 

A Utah-based mortgage company, Castle & Cooke Mortgage LLC (Castle & Cooke) began offering and providing mortgage loan products to consumers in 2005.  In 2013, at the time of the complaint, Castle & Cooke employed 330 individuals in around 45 branches. It practiced in 22 states in the nation, and originated approximately $1.3 billion in loans in 2012.

Among its employees are loan originators who interact directly with borrowers. Castle & Cooke pay the loan originators to assist borrowers in obtaining mortgage credit.

Prior to April 2011, when the loan compensation rules went into effect, Castle & Cooke paid its loan originators commissions based on the interest rates of the loans originated. The higher the rate, the higher the commission.

To avoid this blatant violation of the loan compensation rules, Castle & Cooke devised a scheme to pay quarterly bonuses to loan originators. These bonuses varied depending on the interest rates of loans originated during the quarter. Again, the higher the interest rates of the loans originated, the higher the bonus. This policy was not written in any of the company’s policies. The policy of paying bonuses based on higher interest rates continued past the April 2011 deadline for implementation of the loan originator compensation rules.

The CFPB determined that, since the implementation date, Castle & Cooke had paid out more than 500 quarterly bonuses. Each of these bonuses was a discrete violation of the loan originator compensation rule.

Further, Castle & Cooke’s failure to document their calculation of, or even the existence of the bonus structure violated the requirement to keep records of the compensation provided to loan originators.
The CFPB’s complaint sought to:

• prohibit Castle & Cooke from incentivizing its loan originators to upcharge borrowers based on interest rates of the loans originated;
• compel Castle & Cooke to pay restitution to borrowers harmed by their conduct;
• impose civil penalties against Castle & Cooke for their violations; and
• order Castle & Cooke to pay the CFPB’s costs in the action, and any other damages deemed appropriate by the court.

This complaint was filed in 2013, and has yet to be resolved by the CFPB and Castle & Cooke.  However, recall the minimum civil penalty collectible is $5,000 per violation. As each of the 500 bonuses paid is considered a separate violation, the penalties alone will amount in over $2.5 million dollars.

Although the complaint did not address the individual loan originators’ roles in the alleged transgressions, recall that the loan originator compensation rules forbid both any party from paying bonuses in violation of the rules, and the loan originators from accepting payment in violation of the rules. Thus, each loan originator may be held separately liable for accepting a bonus based on a violation of the loan originator compensation rules.

Nice! Try recovering from that one. :0)

FICO Informed By Michael Hansen

What Affects Your FICO Score and How To Get Your Free Report

The feds allow you to obtain a copy of your full report from all three credit agencies for free once a year at https://www.annualcreditreport.com

We highly recommend MyFico.com to help you understand what affects your credit score and how to increase it.   

A Regulation That Cost You More Than It Saves You

The three day right of rescission. This regulation was put into place (supposedly) to give borrowers the opportunity to let their attorney or trusted confidants to review the signed documents before funding the loan to ensure it’s in the borrowers’ best interest. First of all the regulation also requires the borrower to sign a disclosure confirming they are aware of this regulation and any time you add a required disclosure to a closing package, you are creating another opportunity for something to go wrong. Not only can just having to sign the form create problems,(i.e. when a borrower mistakenly dates is incorrectly it could cause the entire package to have to be resigned if not caught by escrow in time.) but the amount of time that is spent while everyone waits for your loan to fund is wasteful to say the least. 

First, why is it only required on refinance and not purchase? Wouldn't it make more sense for someone to have time to look over documents committing them to a home they have never lived in before as opposed to documents committing them to a more favorable payment on a home they have lived in for years possibly their entire lives? Plain and simple, there is a HUD at closing that compares the closing disclosures with the opening disclosures you received at the start and if the fees are more than 10% higher, the loan cannot fund. Not to mention the borrower does not have to sign the disclosures if they do not like them. No matter what! So what is really the point of this? 

Perhaps some politician wanted to get attention, perhaps a lawyer needed to get recognition? Possible, however I have a feeling it’s much bigger than that. Since I have watched this right of rescission cost consumers thousands of dollars. Since I have never seen a single client, out of over 9,600 loans that closed around me, utilize the right of rescission. I have to suspect there is another reason for this costly time consuming disclosure and requirement. 

It's the Banks! Lending money to homeowners for primary residence on 1-4 unit buildings that conform to Fannie, Freddie or Genie Mae, is the safest way to invest your money. Coincidentally the only loans that require a 3 day right of rescission are loans that are exactly like the ones I just described. Interesting. Perhaps the real reason is the investors who invest through these types of loans are looking for one more loop hole to get out of delivering a loan on time. I truly feel this is the only logical explanation, I have seen nothing but pain endured by both the originator, and the borrower and never once seen or heard of any good coming from it. Not to worry, I will tell you what you should know in order to protect yourself.

Delivery of the TIL disclosures and the notice of right of rescission happens at closing. Once you sign the loan documents with the disclosure, (provided you did not accidentally date the form incorrectly and make a correction) the three-business-day period must follow both the disclosure and the rescission notices, as well as the signing of the loan documents, called consummation of the loan, and this begins the next business day as day 1 of 3.

Midnight is considered the beginning of the first rescission day. Therefor making you wait an additional day on top of the three days. Consider a borrower who signs loan documents and signed all material disclosures on Monday, June 1 at 8:00AM. The actual timeline would go like this:

Monday, June 1 - Day of disclosure/signing. Rescission begins running on the day after this day.

Tuesday, June 2 -  First day of three-day rescission period.

Wednesday, June 3 - Second day of the three-day rescission period.

Thursday, June 4 -Third day of the three-day rescission period. The loan cannot close until all of 
Thursday has passed, and it is midnight.

Friday, June 5 – Loan can now fund, however even if the loan funds in the morning, the lender being paid off will not receive the funds until the next business day, Monday. Now you will have to pay interest to the new lender starting on Friday. You will also pay interest to the existing lender until Monday. Paying double interest for two days.

Sign your loan documents on Wed - Sunday.