Refinancing of upside down mortgages
November 16, 2009
Over my many years of writing about different real estate events to our subscriber base, I have never been as excited 
about something as what I am about to tell you today.
In normal “NoBullRE.com” fashion, we don’t want to overhype anything but I am about to share something that will rapidly create its own hype…
So, without further ado, here it is:
IF YOUR MORTGAGE IS SEVERELY UPSIDE DOWN, SOMEBODY IS READY TO BURN YOUR CURRENT MORTGAGE AND REWRITE IT AT 95% OF TODAY’S VALUE
…… And This Is True For Investment Properties As Well!!
So, for example, let’s say you face the following scenario:
- Total Of All Mortgages: $300,000
- Current Value: $175,000
- Current Princ. + Interest: $1,800/month
Now, suppose our investor BUYS (not renegotiates but BUYS) your mortgage from your lender and then provides you a BRAND NEW mortgage with the following terms:
- Mortgage Amount: $166,250
- Current Value: $175,000
- New Princ. + Interest: $1,050
And they will do this (at least currently) for zero upfront cost to you (zip, nada, zilch) and then only $3,500 when they offer you the new loan. I know, I know….. you didn’t fall off the turnip truck yesterday but we are dead serious…. there is absolutely no risk (or cash outlay) to you.
Because of our experience with working with real estate investors, NoBullRE.com has been in behind the scenes of this emerging program. The players are huge with about $1 Billion already committed verbally to fund this…. and that is simply for a little pilot program.
Further, we will tell you that this has NOTHING TO DO WITH:
- TARP FUNDS;
- LOAN MODIFICATIONS; or
- DEBT CONSOLIDATION.
This is good old fashioned capitalism at it’s best and is essentially the free markets coming up with a winning solution for all.
Also, please be aware that this is very, very, very ground floor. We have been exposed to the intentions of the major players and we know the difficulties that they face. For a little while, in our opinion, this program will evolve rapidly as all pieces are put into place and challenges overcome.
IF IT’S TOO GOOD TO BE TRUE THEN…….
“it just might work”.
Well that is not how the saying actually goes but in this case, it is true. As we begin to roll out this program, we will FULLY EDUCATE you about it but for now, just realize that there is three parties that have to be happy in this transaction:
- The Home (Or Investment) Owner: DUH. About As No-Brainer As It Gets
- The Investor That Buys Your Mortgage: Trust me…. they buy CHEAP and they are very excited.
- The Bank With Your Current Mortgage: Yes, they loose money but this is their BEST Option.
In our opinion, the biggest problem with this program is going to be over demand and just handling the logistics of large volume….. other than that, this program will be HUGE.
What’s Next
I wanted to write this piece today to give some of you hope even though we are not quite yet ready to open the doors. Many of you are hurting out there and we are doing everything in our power to get this to you.
We are still ironing out a few details and burning the midnight oil. When we introduce this program, we will likely have 250 units carved out specifically for our clients.
We will host a webinar to introduce this program to our clients and their direct friends and family. We expect an almost immediate blowout so please pay attention as we begin sending out emails for this event. This webinar may be as soon as next Tuesday but only if we have all the details slicked out.
We will update you soon. UPDATE: CLICK HERE TO REGISTER FOR WEBINAR
![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=51e0904c-924d-4ee2-900e-397696c488a9)
Home Valuation Code Of Conduct: Investors Be Ready
May 1, 2009
Today marks a major change in the lending landscape and the way loans are sold to Fannie Mae & Freddie Mac…. Specifically, how they are appraised.
If you have not heard of Home Valuation Code Of Conduct (HVCC),just ask your favorite mortgage broker about it and more than likely their response will be something like:
&$#@%^&%$#^%$#@#$%^
(sorry, but can print what they really will blast you with)
In short, this change is designed to fix the evils of the past.
As always, there are good and bad sides to every change. We will explore the good, bad and ugly of this new approach but first, let’s synopsize what it is about.
WHAT IS HVCC (Short Story)
So what does the code say? Basically, it’s that the people responsible for originating mortgages can have nothing to do with the appraisal process.
In addition, the code also:
* Prohibits lenders and third parties from influencing or attempting to influence appraisals.
* Requires lenders to ensure that borrowers get a free copy of appraisal reports at least three business days before closing.
* Allows lenders to have in-house appraisers, so long as they’re completely independent of sales staff and their compensation does not depend on their estimates or on loan closings.
* Requires lenders to test a randomly selected 10 percent (or other statistically significant percentage) of appraisals and report any problems to Fannie Mae or Freddie Mac, which may force lenders to buy loans back from them.
* Requires lenders to report appraisal misconduct to applicable state agencies.
You can download a copy of the HVCC at: https://www.efanniemae.com/sf/guides/ssg/relatedsellinginfo/appcode/pdf/hvcc.pdf
WHY IS HVCC GOOD?
Let’s face it, the appraisal business has been a bit “rigged” over the last several years.
In short, only appraisers that could “get the deal done” were used on a repeated basis by mortgage brokers, realtors, and or builders. It only makes sense that this is the way the system worked. If you were a realtor, or even if you were a new home buyer, the last thing that you want is for your appraisal to come up short and the deal fall apart.
Since appraisals are somewhat subjective, the appraisers that always got called were those where the subjectivity worked out in favor of the deal.
However, many appraisers felt very pressured to make the deal work….. their future business counted on everybody walking away happy. Of course we are now seeing some of the consequences of that type of approach with our current housing and mortgage crisis.
WHY IS HVCC BAD?
Because now your purchase or sale is a crap shoot.
Why?
Simply because appraisers will be pulled out of a “blind pool”. From my personal experience, only about 20% of appraisers are good at their profession (you know, the ole 80/20 rule).
So you now have an 80% chance of a mediocre appraiser being assigned to your appraisal. Are they really capable of determining the value? I am skeptical.
In addition, most the incentives for the appraisers are now set up to appraise low….. The safe play is to come in BELOW what you may be thinking is actual value.
CONSEQUENCES
HVCC will be implemented May 1, 2009. Many people believe, myself included, that this is going to severely disrupt the home seller market, and investor market, for a period.
Everybody’s major hope is that soon, tweaks will be made into something that is workable for all in the industry.
Related articles by Zemanta
- Appraisers brace for industry change (appraisalnewsonline.typepad.com)
![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=7f919c86-1e19-4531-9b63-4b6732eaf18a)
-
Who Is "REALLY" Making $ In Today's Real Estate Market?
Our 29,689 Members Tend To Agree...
It's Usually Not The GURUs
Have you ever noticed that every "Guru" real estate pitch sounds the same........
They once were poor, but now are rich working only 5 hours per week, and you can be rich too if you just buy their "can't fail system".
Or have you noticed that every property promote has a can't miss proposition, if you just buy TONIGHT.
At the NoBullRE club, we are huge believers in real estate investing...... but we also know that every approach has two sides: Nothing is perfect.
If you want unbiased ("No Bull") facts of who is making money, how are they doing it, and where do they get their knowledge, then you don't want to miss joining the NoBullRE Club
IT'S FREE (FOR NOW)
SECURE & CONFIDENTIAL
Your info will never be shared
CONFIDENTIALITY GUARANTEED
