To access the new Handbook for MHA, inclusive of HAMP and HAFA, click here. While reviewing the Handbook you should be aware of the case of Flagstar Bank v. Walker wherein the Court held that the statutory good faith standard for a CPLR 3408 Foreclosure Settlement Conference is compliance with the Handbook. To review the case, click here.
This Handbook is the rules for banks / servicers to modify mortgages, so pay careful attention to detail and make sure that they comply.
Monday, December 17, 2012
Thursday, December 13, 2012
Highlights:
- >1.1 million homeowners have received a permanent modification through HAMP.
- 74% of non-GSE borrowers entering HAMP in October, 2012 received a principal reduction
- >78,000 HAFA short sales have been completed
To read the full report, click here.
The report contains a lot of positive news and those seeking relief from mortgage nightmares should be encouraged.
Tuesday, December 11, 2012
Salespersons - Listen Up!
- Your license is regulated by the Department of State, New York (DOS) and NOT by any real estate school or trade organization.
- Ethics courses are NOT required to maintain your real estate license with the Department of State, New York (DOS).
Learn the Facts: Real Estate Continuing Education in NY
Every 2 years, licensed real estate brokers and salespersons in the State of New York are required to take 22.5 continuing education credits. The ONLY mandatory class requirement is at least 3 hours of instruction pertaining to fair housing and/or discrimination in the sale or rental of real property or an interest of real property, within the 2 - year period immediately preceding a renewal.
Exemptions: Licensed
Real Estate Brokers who are engaged full time in the real estate business and
who have been licensed for at least 15 consecutive years immediately preceding
license renewal. This exemption must have been met prior to July 1, 2008. An attorney admitted to the New York State
bar is also exempt from the Continuing Education Requirement.
Ethics
Ethics training is NOT a required course for a Real Estate Broker or Salesperson to maintain their license in full force and effect with the Department of State, New York. Ethics courses may be required by your local Board (trade organization), but are not required to maintain your license with the Department of State of New York.
Saturday, December 01, 2012
To read the Supplemental Directive, click here.
It addresses the following topics:
It addresses the following topics:
- HAMP® Modified Loans Repurchased from GSEs
- Debt-to-Income Ratio Eligibility
- Single Point of Contact (SPOC) Clarifications
- Dodd-Frank, Identity and Occupancy Verification Clarifications
- Handbook Mapping Clean-Up and Clarifications
Wednesday, November 28, 2012
Last evening, we instructed our continuing education course, Deal Killers: Don't let your deal die, at Briarcliffe College in Patchogue.
During the course we received many questions from students about what alternatives there were to FHA funding to help SAVE a deal for a highly leveraged transaction. Our friends at Citi suggested the HomeRun program.
Here are the details:
WHAT IS HOMERUN?
HomeRun is Citi’s exclusive portfolio Program that has no mortgage insurance and no price ups. It is designed as a responsible financing solution to meet the needs of the low-and moderate-income (LMI) borrower. It provides the stability of a fixed rate, the flexibility of lower down payment options, and the added borrower protection of a relationship with a nonprofit housing organization committed to helping the borrower stay on track with payments. Fannie Mae Community Lending guidelines apply except as modified by the Mortgage Policy Manual (MPM) Fact Sheet.
- 97% LTV financing
- 3% seller contribution toward closing costs and prepaids on CLTVs greater than 90%, 6% on CLTVs 90% or less
- Minimum FICO score is 640
- Non-traditional credit is allowed with insufficient credit history and no FICO score
- No mortgage insurance
- Available to returning and first time homebuyers as well as existing Citi customers
Additionally, Citi has provided access to the Federal Financial Institutions Examination Council's Geocoding System that they discussed last evening. Click here to learn more.
Tuesday, November 27, 2012
On May 9, 2012 we blogged about the importance in extending the Mortgage Forgiveness Debt Relief Act of 2007. To read that blog, click here.
On November 20, 2012, the National Association of Attorneys General joined the cause by writing this letter to the Congressional Leadership of our Federal Government.
Additionally, the Real Property Committee of the Suffolk County Bar Association also drafted a similar letter to our local leadership in the region.
Its imperative that this act is extended to protect those vulnerable community members who have underwater homes. Additionally, there are many secondary and tertiary effects on our local economy that will be realized if this act is not extended.
Please contact your representative and stress why this Act should be extended.
On November 20, 2012, the National Association of Attorneys General joined the cause by writing this letter to the Congressional Leadership of our Federal Government.
Additionally, the Real Property Committee of the Suffolk County Bar Association also drafted a similar letter to our local leadership in the region.
Its imperative that this act is extended to protect those vulnerable community members who have underwater homes. Additionally, there are many secondary and tertiary effects on our local economy that will be realized if this act is not extended.
Please contact your representative and stress why this Act should be extended.
Friday, November 23, 2012
During this Thanksgiving I was spending time with some good friends who recently purchased a house. They are great people, but not particularly knowledgeable about the real estate industry.
My friend said to me that his wife and him were discussing setting up automatic payments for their mortgage, which I thought was a good idea so they would never miss a payment.
Then, my friend said that once they got situated in their new house that they would switch to paying every other week to cut down their interest and make the mortgage term shorter. My response was simple, "So you are going to make an additional payment a year on your mortgage?". He responded with "No, I am just going to pay every other week and we will save money, everyone does that", as if I was some sort of fool who had no idea how mortgages worked - thanks for the lesson. I thought that I may share with him why he doesn't understand what he is talking about, but on second thought I thought it is Thanksgiving and he didn't ask me for my professional advice, so I should keep my mouth shut.
To be clear, paying every other week as opposed to monthly is not a magic trick. The bank is not happy to merely receive payments in partial amounts more frequently than in full amounts monthly. Instead, paying bi-weekly results in 26 half payments throughout the course of a year. 26 half payments equals 13 full payments. Math not magic is what matters. So, the result is that a bi-weekly payor is making 1 extra payment a year and that is the SOLE reason that a loan's term is accelerated by expeditiously reducing the loan's principal balance. Moreover, as you reduce the principal, the amount of interest paid is reduced. This is actually what my friend was saying; albeit confusedly. In fact, it works the same if you simply make 13 payments a year as opposed to 12.
However, mortgagors (borrowers) should not EVER unilaterally decide to make bi-weekly payments. Instead, they must discuss their desire with their lender first. Many lenders want a one-time setup fee for this service and require online payments as opposed to checks.
Or, instead, mortgagors (borrowers) can simply send an extra payment annually and they are set.
Enjoy the holidays. I've learned that when I keep my mouth shut I enjoy the holidays too.
My friend said to me that his wife and him were discussing setting up automatic payments for their mortgage, which I thought was a good idea so they would never miss a payment.
Then, my friend said that once they got situated in their new house that they would switch to paying every other week to cut down their interest and make the mortgage term shorter. My response was simple, "So you are going to make an additional payment a year on your mortgage?". He responded with "No, I am just going to pay every other week and we will save money, everyone does that", as if I was some sort of fool who had no idea how mortgages worked - thanks for the lesson. I thought that I may share with him why he doesn't understand what he is talking about, but on second thought I thought it is Thanksgiving and he didn't ask me for my professional advice, so I should keep my mouth shut.
To be clear, paying every other week as opposed to monthly is not a magic trick. The bank is not happy to merely receive payments in partial amounts more frequently than in full amounts monthly. Instead, paying bi-weekly results in 26 half payments throughout the course of a year. 26 half payments equals 13 full payments. Math not magic is what matters. So, the result is that a bi-weekly payor is making 1 extra payment a year and that is the SOLE reason that a loan's term is accelerated by expeditiously reducing the loan's principal balance. Moreover, as you reduce the principal, the amount of interest paid is reduced. This is actually what my friend was saying; albeit confusedly. In fact, it works the same if you simply make 13 payments a year as opposed to 12.
However, mortgagors (borrowers) should not EVER unilaterally decide to make bi-weekly payments. Instead, they must discuss their desire with their lender first. Many lenders want a one-time setup fee for this service and require online payments as opposed to checks.
Or, instead, mortgagors (borrowers) can simply send an extra payment annually and they are set.
Enjoy the holidays. I've learned that when I keep my mouth shut I enjoy the holidays too.
Tuesday, November 20, 2012
On November 16, 2012, we blogged about the Making Home Affordable Program's forbearance program for victims of Hurricane Sandy.
Today, Treasury issued Supplemental Directive 12-08, which addresses Federally Declared Disasters, such as Hurricane Sandy, and specifically directs Non-GSEs (servicers) with respect to the following topics:
To read Supplemental Directive 12-08, click here.
Today, Treasury issued Supplemental Directive 12-08, which addresses Federally Declared Disasters, such as Hurricane Sandy, and specifically directs Non-GSEs (servicers) with respect to the following topics:
- Flexibility with Borrowers in Federal Emergency Management Agency (FEMA) Designated FDD Areas
- Forbearance Plans
- Borrowers in a Home Affordable Modification Program® (HAMP) or the Second Lien Modification ProgramSM (2MP) Trial Period Plan
- Borrowers in a HAMP or 2MP Permanent Modification
- Handbook Mapping
To read Supplemental Directive 12-08, click here.
At our recent continuing education course, The Fair Housing Act, a student challenged our slideshow, which showed the list of protected classes. Specifically, they adamantly argued for the inclusion of age as a protected class. As explained then and reiterated now, there are multiple fair housing and discrimination laws of which real estate agents must be mindful. The course taught was the federal law, which does not expressly protect age. Nonetheless, New York has a law called the Human Rights Law that makes it unlawful to discriminate on the basis of age, among many other classes. However, the law does not apply the class of age to those under the age of 18, instead the class of familial status applies in those situations. Additionally, the law doesn't apply to housing restricted to those 55 years of age or older. Moreover, publicly assisted housing for the elderly is also exempted.
The message for real estate agents out there is that they need to consider a multitude of laws from Federal to State to Local (County, City, Town or Village) prior to practicing in a particular area.
The message for real estate agents out there is that they need to consider a multitude of laws from Federal to State to Local (County, City, Town or Village) prior to practicing in a particular area.
According to Ad Age, the leading publication in the advertising industry, the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) are jointly investigating deceptive ads concerning mortgage modifications, short sales and workouts.
To read the article, click here.
The article expressly states that real estate agents have received warning letters from the FTC. Of specific concern to the FTC & CFPB was the practice of utilizing images of President Barack Obama in ads promoting loan-modification services, which wrongfully communicate to consumers that certain services are affiliated with the government. If you use the President's image on your advertisements, take it down now!
Real estate agents this is important. When you work in mortgage relief, you must be mindful of the Mortgage Assistance Relief Services (MARS) Rules from the FTC, a summary of which can be found by clicking here. Also, in New York, Distressed Property Consultants must additionally comply with Real Property Law section 265-B, the text of which can be found by clicking here.
During each of our continuing education courses to real estate agents on foreclosure, whether its Foreclosure and the Economy: the Short Sale Course; or Foreclosure Filibusters we always stress the importance of these laws and regulations. Unfortunately, we always also get responses from agents that we are being ridiculous. This is very serious and far from ridiculous.
Real estate agents should also be mindful that the FTC's watchful eye is not restricted to mortgage modifications. As stated in our course, To be Green or Not to be Green: That is the Question, the Green Guides are available by the FTC and demonstrate the need to be candid and avoid deception in advertising Green Housing & Buildings. To read the Green Guides, click here.
As Lieb School always states: You are a real estate Professional; knowing these laws makes you a value-add to your clients and customers. Now go study.
