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Over the past couple of weeks, many of the lenders who work with sub prime or riskier loan products like, 80/20 piggy-back products, interest-only, negative amortization loans, no income or asset verification loan products are under increasing pressure to buy back those loans which are in default. The default and foreclosure rate on these loan products are so high that many lenders have had no choice but to close their doors and file for bankruptcy protection because their investors are forcing them to repurchase those loans. Over the past week or so Linda Jean and I have been talking to Mortgage Companies, Title Companies and other Realtors just to find out several clients have been left with out a Mortgage Company or Mortgage Underwriter right before closing. We had 3 just last week have to find new Lenders with less than a week to go before they were to close. There is no better time than now to make sure you have the right Lender to work with. As in one of my previous Blogs was talking about the number of Mortgage Companies closing everyday, up to 50. I was talking to one of my lenders last week and he said a sales rep from one of his Underwriters came into his office to do his pitch on how they are going to have all kinds of new products with the next morning the Underwriter had closed there doors. In a report released this week, "Mortgage Payment Reset: The Issue and the Impact," Cagan studied 8.37 million adjustable-rate mortgages that originated between 2004 and 2006, and estimated that 1.1 million of those homeowners will end up in foreclosure during the span of six to seven years. The debt from the mortgages will total $326 billion, and after foreclosure and resale, about $112 billion will be lost to remaining equity, lenders and investors over several years, according to the report Some Brokers are looking for safer routes? Remember FHA insured loans? For the past 10 years, programs like Nehemiah, Quickdown and Geniuses Programs "plus many more" has helped thousands of families achieve homeownership working with Realtors, builders and lenders nationwide to provide more than a Billion dollars in down payment gift funds. Ask your lender if he or she is qualified for FHA and what kind of down payment assistance programs they have to offer. Of course this only works if you are a little credit challenged, have a little debt and don't make six figures at your job and your home mortgage is less than $200,160 in Tarrant County Texas. I am sure in the next few weeks and months we are going to see lots of creative people have all types of programs for the home buyer. We will also see if this is going to help with the Foreclosure rate going off the charts, I just ran a report from the MLS and found over 1500 foreclosures in Tarrant County Texas alone, this does not include the 500+ active listings that are labeled "call agent" under the seller type. I think we all knew something was coming and lets hope this does the trick, if not, the big guys (whoever that is) will come out with a new plan, time will tell. OK I am off my soapbox, thank you for listening, say goodnight Gracie. Roger Paschal Century 21 Mike Bowman, Inc.
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A key problem in today's home mortgage industry is created by appraisers who bend their ethical commitments under pressure to "hit specified numbers" in their appraisal reports. This often results in inflated property values that are, in many cases, much higher than realistic market values. This can ultimately cause major problems for home buyers who could be paying on a mortgage that's larger than their property's true value. That's a common scenario that leads to foreclosure actions.
It can also be a serious problem for banks and mortgage companies. The last thing they want is to deal with foreclosures. The pressure on appraisers usually comes from real estate brokers who are desperately trying to arrange financing for a home purchase. In some cases, the pressure comes from individual home buyers or sellers.
About 90 percent of real estate appraisers are experiencing pressure to come up with certain specified values, according to a recent research survey of 1,200 appraisers. That number is up sharply from the same type of survey conducted in 2003, when 55 percent of appraisers felt pressured to reach predetermined values. The American Society of Appraisers believes that this pressure is a real problem for appraisers. The group is committed to supporting legislation to reform fraudulent practices in the mortgage lending industry. They are actively supporting legislation to combat predatory lending and mortgage fraud.
"I'm not surprised that so many appraisers surveyed still feel pressured to hit a particular number to close a deal," said Mike Evans, with the Society of Appraisers. "There is currently little regulation or incentive that stops this type of behavior from taking place." ASA supports the consumer's right to receive a loan based on an accurate appraisal, a society spokesperson noted. "It's in the homebuyer's best interest to receive an accurate appraisal to ensure that they are not over-paying for their loan."
"Homebuyers should take an active role in scrutinizing the practices of everyone involved in their home purchase," Evan said. "If they feel that agents are overly aggressive in wanting the deal to go through, or if the price of the house they want to buy isn't comparable with other similar homes in the neighborhood, they should be wary."
The FDIC (Federal Deposit Insurance Corporation) has taken the lead in informing banks of their concerns that some appraisers are not following their Uniform Standards of Professional Appraisal Practice for federally related transactions. Special areas of concern include appraisals for commercial real estate and residential tract developments.
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It's tough to survive in today's mortgage lending industry. Many originators, particularly those that have been specializing in the subprime niche of the market, are folding their tents and silently leaving the business. But there's a bright side of that development for the mortgage industry and consumers.
"We're seeing 40 or 50 subprime companies a day throughout the country going down in one form or another," said Angelo Mozilo, chief executive of Countrywide Financial. About two dozen large subprime mortgage lenders nationwide have gone under or stopped making loans, according to Implode-O-Meter, a Web site that tracks closures in the subprime lending industry.
The failure of so many subprime lenders is symptomatic of a larger trend – Wall Street's loss of appetite for risk, the site reported. With so many mortgages going bad, investment banks have quit backing subprime mortgages and are actually kicking bad loans back to some originating lenders, forcing some of them to close their business. One of the first mortgage products expected to disappear are zero-down mortgages, sometimes known as 80-20s. These are often structured without verification of income to borrowers with impaired credit ratings.
Many loan originators are going out of business during the first quarter of this year, it was reported by the "For Benefit of the Originator" (FBO) association. This could be a positive development for the business generally, they point out. "The skilled mortgage pro does not lose when the market gets worse because the unreliable lenders tend to go out of business or are acquired by others, and the unreliable loan officers go back to doing whatever they were doing before," it was noted in a FBO report.
"The slowing market fits well in a trend of expansion and consolidation. The market expands until it's white hot, then cools and consolidates before the next expansion period. It's in this period that mortgage loan originators can begin to exert influence in a way they have never been able to before. If they play it smart, today's slow-down can be the catalyst for a new glory day to come for the loan originator." [:'(] 
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Newly proposed federal legislation would put the brakes on the growing trend of providing home loans to mortgage applicants using an Individual Taxpayer Identification Number instead of a Social Security number. ITINs are normally issued by the Internal Revenue Service to help immigrant workers who don't qualify for a Social Security number to report their income and pay federal taxes.
An increasing number of banks and other lenders have been offering home mortgages to undocumented immigrants using ITINs. The proposed bill, introduced by Rep. John Doolittle, would amend the Truth in Lending Act to make ITIN mortgage lending illegal. 
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The number of existing-home sales in January rose significantly, reaching the highest level in seven months, according to a report from the National Association of Realtors. The increasing sales include single-family homes, townhomes, condominiums and co-ops. The sales volume rose by 3.0 percent from the previous month, to a seasonally adjusted annual rate of 6.46 million units.
"Although we're expecting existing-home sales to gradually rise this year, and buyers are responding to the price correction, some unusually warm weather helped boost sales in January," said David Lereah, NAR's chief economist. "On the flip side, the winter storms that disrupted so much of the country in February could negatively impact the housing market. These weather events are unusually large. Many transaction closings were postponed in February and home shopping was essentially shut down for about a week in many areas. We shouldn't be surprised to see a near-term sales dip, but that will be followed by a continuing recovery in home sales."
Meanwhile, there was a drop in new-home sales during January, according to figures released by the U.S. Commerce Department. The sales pace declined 16.6 percent for the month, down 20 percent from a year ago. "The falloff in new-home sales reflects a return to more normal weather conditions, following the weather-related increase in sales late last year," said David Seiders, chief economist for the National Association of Home Builders.
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Despite a generally sluggish market, mortgage applications are rising, according to a report from the Mortgage Bankers Association. At the end of February, applications were up 8.8 percent over the same week a year ago.
Applications for mortgages to finance the purchase of a home increased 5.2 percent during the week ending February 23, compared to the previous week. Refinance mortgage applications increased 1.2 percent from the previous week. It appears the market is strengthening. The average interest rate for a 30-year fixed-rate mortgage lowered to 6.16 percent on March 1, down from 6.19 percent during the previous week, according to MBA. The average rate for a 15-year fixed-rate loan is down to 5.84 percent. These are rates for 80 percent LTV loans. 
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On February 27, 2007 Freddie Mac (one of the nation's leading government-sponsored buyers of existing home mortgages) announced it will cease buying subprime mortgages that have a high likelihood of excessive payment shock and possible foreclosure. It will only buy subprime adjustable-rate mortgages (ARMs) that qualify borrowers at the fully-indexed and fully-amortizing rate. This means there will be fewer offerings of these loans to consumers.
The objective of Freddie Mac's action is to protect future borrowers from the payment shock that could occur when their adjustment rate mortgages increase. It will also limit the use of low-documentation underwriting for these types of mortgages to help ensure that future borrowers have the income necessary to afford their homes. Also, it will strongly recommend that mortgage lenders collect escrow accounts for borrowers' taxes and insurance payments. The new policies will take effect on all mortgages originated on or after September 1 of this year.
Freddie Mac also announced their development of fixed-rate and hybrid ARM products that will provide lenders with more choices to offer subprime borrowers. For example, in contrast to the payment structure of many of today's "2/28" ARMs, the new hybrid ARMs will limit payment shock by offering reduced adjustable rate margins, longer fixed-rate terms, and longer reset periods.
However, it will require originators to underwrite these products at the fully indexed and amortizing rate. The company plans to commit significant capital to purchasing these loans into its portfolio.
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March 7, 2007 UpdateWow, we had a great turn out last night, 15+, great feedback and I think we all learned a little in the process. I would like to Thank the great people at Alamo Title and their help in putting this together. I would also like to thank the other Vendors in their help. We hope to hold the next one at a more convenient time and day, if you have any comments on any topics please let us know.Thank you The Paschal's________________________________________________________________________ Our first Workshop - REIF Real Estate Investors Forum OK we have been working with setting up our first REIF workshop, we have set the date and time for March 6th - 5PM at Alamo Title located at 26 East Debbie Lane in Mansfield. Please RSVP on this board or contact the Paschal's. This first workshop we are going to have Alamo Title go over various closing charges, Title Insurance and other charges when you buy or sell your properties, this one meeting can save you Thousands in your next closing. All this with no charge to you!!! You want to understand all the charges and what charges to get the other party to pay when we are going through negotiations within all your contracts. Alamo Title Mansfield is located at the Southeast corner of Debbie lane and 287 click below for directions and phone numbers http://www.alamodfw.com/LocationAreas.aspx?area=Arlington/Mansfield&officeName=&officeid=20 We have arranged to have professionals to attend our workshops ie Mortgage Professionals "Regular and Hard Money", Insurance agents, Title Agents, Appraisers, Home Inspectors, Financial Planners, 1031 Exchange, General Contractors, Foundation Repair Company's, Real Estate Attorney's and of course Real Estate Agents from the Paschal Group REIF equips the seasoned and novice investor with knowledge in a safe environment. Topics for future workshops include 1031 Exchanges, financing investment properties, foreclosures, retirement strategies, fix and flip, zoning updates, analyzing multi-family properties, market trends, just to name a few. Once again if you have interest in attending one or our meetings please e-mail me or leave a post on our Blog " http://www.thepaschals.info/Our_Blog/page_1735726.html Roger Paschal Century 21 Mike Bowman, The Paschal Group
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THE FUTURE IS NOW ORLANDO, Fla. (NAHB) – What’s in store for home design in 2015? Thanks to a recent study conducted by the National Association of Home Builders' (NAHB) Economics Group, visitors at the International Homebuilders Show did not need a crystal ball to find out. Average home size is likely to stay in the range of today’s 2,400 square feet, and homes are likely to be two-story rather than one-story. They will be greener and more resource-efficient, and there will be a stronger emphasis on universal design and handicap access. Kitchens and bathrooms will continue featuring upgraded materials and appliances, and more consumers will prefer recessed lighting and wood floors. Three-car garages with larger garage door openings will also become more popular. Finally, there will be a definite trend toward outdoor living. An increasing number of high-end homes will come with outdoor kitchens, outdoor fireplaces, pools and spas, and outdoor home entertainment equipment. What are you looking for in your next home?
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This is a great article regarding Home Warranties, please read this before you select one. We have had many customers just take it with a grain of salt that they are all the same, most or very close to another and we take great pains to try to get you information on the best but please read. Linda Jean and Roger Paschal News Release No. 60, August 2005
By David S. Jones According to the Gallup Poll, 79 percent of buyers and sellers rate home warranties as one of the most important considerations when buying a home. Home warranties are the fourth most important factor behind location, design and financing options. But just because you have a home warranty doesn’t mean you have adequate protection. I know this will come as a shock, but all home warranties are not created equal. The folks at www.homewarrantyexperts.com collect both good and bad experiences on home warranties. Their goal is to educate consumers about the need for home warranties, how to pick the right company and warn consumers of the pitfalls. This column focuses on the latter. Keep in mind that this list is based on opinions and experiences sent in by consumers rather than any scientific data or research. The number one gotcha to watch out for is a big one for Texans — the air conditioner. While a bad wire may be covered, cleaning the coils is normally a standard maintenance item and not covered. And once the technician reports the dirty coils, your home warranty company may exclude all future air conditioning claims because you haven’t been taking good care of your equipment. Annual maintenance contracts are a way around this gotcha. Keep in mind that pre-existing conditions are not covered by a home warranty. Therefore, it’s a good idea to have a professional check the air conditioning before you buy to rule out the possibility of a pre-existing problem. A bad inspector, however, can cost you thousands in gotchas. It helps if the inspector has the warranty contract in hand when he does the inspection. Special attention needs to be given areas that require routine maintenance. The more detail you get in the report, the better. Ask for photos. And ask the seller to repair or replace anything that is excluded in the warranty or may be deemed a pre-existing condition. Rust and corrosion also are potential trouble areas. Because they are common problems, rust and corrosion are excluded for the first 30 days of most home warranty plans. Some exclude them altogether. This could mean trouble for getting your garbage disposal or hot water heater repaired. If you examine a home warranty carefully, you are likely to discover that it does not pay a claim unless you call the warranty company before you have the problem fixed. One of the biggest gotchas occurs when you call in a home warranty claim. What you tell the person who answers the 800 number is important because it determines whether or not the problem is covered by the warranty. What you tell the customer service representative is logged into the computer for reference to the current and future calls. If there’s any doubt, you may be told the broken item is “not covered.” Always be nice and professional when talking to the home warranty folks on the telephone. Keeping your cool nearly always gets better results. There are many gotchas inherent to home warranties. The service technician answering your call may misdiagnose the problem. The warranty may have payout limits. Multiple items may be covered only at an additional cost. Refrigerators located outside the kitchen usually are not covered. Anything associated with a commercial purpose probably isn’t covered. Mold is not covered. You get the idea. How do you avoid the gotchas with a home warranty? Do your homework. The best defense is to read the fine print.
We hope you will permit us to communicate with you via e-mail. We promise not to overstep our welcome in your in-box!
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FORECLOSURE TSUNAMI FORECASTED COLLEGE STATION (Real Estate Center) – Based on results from its recent mortgage study, the Center for Responsible Lending (CRL) has predicted that one out of five subprime loans issued during 2005 and 2006 will fail, resulting in foreclosure for millions of American homeowners. Dr. Mark Dotzour, chief economist with the Real Estate Center, says the real vulnerability in the residential housing market is in the entry-level housing category in regions where a large percentage of buyers have purchased with little or no down payment. “In recent years, investor thirst for the higher yields of mortgage-backed bonds has allowed mortgage lenders to relax credit standards and issue loans that have a much higher risk of foreclosure,” Dotzour said. “It stands to reason that when you make riskier loans, you are going to have more foreclosures.” Dotzour does not think mortgage companies or mortgage bond holders will be hurt when the expected tsunami of foreclosures hits. Instead, hedge funds, pension funds and endowment associations that have been chasing yield by accepting more risk, or large commercial banks offering complex derivatives to allow traders to hedge their risk in mortgage bonds are likely to feel the pinch. “Nobody knows exactly where the ultimate risk really lies in the financial markets,” Dotzour said. “But one thing is for certain. Those who will be hit the hardest will be families that lose their homes to foreclosure.”
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What is the best way that you have found to find homes, internet, drive by, newspaper, realtor book or something else?
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