Suzanne Voter's Expert Insight

HARPing on good news

The Home Affordable Refinance Program (HARP) has been around for a few years to help homeowners under water, so you may be wondering why there’s so much buzz over the new, improved HARP 2.0. Turns out, there’s a lot going for this just-available program, primarily easier access to refinancing opportunities.

While HARP 2.0 was approved many months ago, only a few lenders were able to offer it and only to their customers. Homeowners didn’t have the opportunity to shop around, and if they weren’t approved with that one lender, their hopes for getting a break were dashed. The long delay in making HARP 2.0 widely available was due to automating Freddie Mac and Fannie Mae’s underwriting systems and getting all the new rules in place. Yes, new, easier rules!

Many roadblocks that borrowers encountered have been removed, including the cap of what the home is worth vs. what the mortgage balance is (typically 125%).  Also noteworthy is that there is no minimum credit score with HARP 2.0 (although individual lenders can require one), plus the new program releases the lender’s liability on the original loan. This makes it more appealing for more lenders to offer HARP 2.0, and with more lenders to choose from, mortgage brokers and homeowners can shop around.

A few of the requirements to keep in mind are:

• Your mortgage must have been sold to Freddie Mac or Fannie Mae before June 1, 2009.
• You must be current on your mortgage and have no late payments for the last six months.
• Not more than one late payment in 12 months.
• Possible appraisal waiver.
• This must be your first refinance with HARP.

I believe that at long last, homeowners can feel good, and hopeful, about the refinancing opportunities that are now out there. HARP 2.0 became available the first of March, and already the demand has been steadily growing. My advice is to contact us sooner rather than later to lock in today’s historically low interest rates before they go up significantly. The time is now to save your home and some money. We can do it together! 

 Paying off collections and FICO scores

In my Ebook, When Can I Buy a Home Again, I offer many tips and steps on improving credit scores. With the recession effecting so many homeowners and prospective buyers, it was important to address the many concerns and questions we get with regard to repairing credit in order to buy again. One of the most frequently asked question is whether or not paying off a collection will improve a FICO score right away.

The short answer is no. Even with today’s circumstances causing financial difficulties for

so many, the scoring process looks at actions and behavior to predict performance on future payments. If you missed payments that led to a collection, it demonstrates a past behavior of willingly foregoing payments. In fact, it doesn’t matter how high or low the collection is. It’s all about the negative incident that predicts how you might handle payments in the future. If you did it once, you might do it again.

It’s also good to know that collection agencies don’t automatically remove the collection debt from your credit reports, even if you paid off the debt. If a collection agency agrees to do so, get it in writing before you pay them off. Even then, it is questionable as to whether or not they will follow through, but you can.

There are, however, several effective steps you can do to repair or maintain your credit score on your path toward home buying. One is to not file a dispute on any accounts on your credit report. Another one is to not consolidate your credit cards into one or two because it appears that you maxed out on some cards.

If one of your 2013 resolutions is to have a good credit score and to take advantage of the great home buying opportunities, we can help. You can also download my e-book for free at www.yourmortgagewiz.com. It’s a little holiday gift from us to you! Visit our website for more good-to-know info. www.deltahl.com.

Repeal the Home Valuation Code of Conduct

Sometimes well-intended laws don’t turn out so well. In my humble and professional opinion, this is particularly true with the Home Valuation Code of Conduct (HVCC), a process that was implemented as a safeguard for consumers regarding appraisal fraud, yet, in reality, has turned out to be a misfire.

The HVCC is an appraisal process that took effect in spring 2009 after New York’s State Attorney General filed a lawsuit against a major mortgage bank for allegedly pressuring appraisers to submit inflated home values. FHA, Fannie Mae and Freddie Mac, which purchases most of our country’s mortgages, adopted the Code of Conduct that requires lenders to use an appraiser from an appraisal management company rather than selecting their own. It was created to prevent any fraudulent acts between lenders and appraisers, and would thereby protect the public.

Today, appraisers are randomly selected which means they could be coming from out of town. They may have little or no knowledge of the town, community, neighborhood or surrounding amenities. While the appraisers are all licensed, there are other key problems associated with HVCC:

• Too many long-time, established appraisers have gone out of business because appraisers are now paid a small portion of what they use to. They are the ones with insight into a home’s real value based on its location within a community. They have built their business on longevity in the industry and repeat business, which has gone away with HVCC.

• Appraisers with less experience are doing home evaluations. It doesn’t take a lot to get a residential license and be selected from a pool of appraisers to evaluate a high-end home.

• Appraisers with less experience and local knowledge tend to submit lower appraisals. In many cases, it’s below the selling price. Unless the seller is willing to negotiate, the transaction is cancelled, which is unfortunately happening a lot these days.

• Somebody has to pay to keep appraisal management companies operating. That somebody is you, the consumer.

According to the website Change.org, “Consumers and small business are being significantly harmed by the Interim Final Rule on Appraiser Independence. Consumer costs have increased by over 2.8 Billion dollars a year; thousands of small business residential appraisers have gone out of business, as the rule diverts appraisal orders to often unregulated middlemen-owned by the large banks. Since the rule was implemented, valuation fraud has increased over 50% and it has led to the continuing depreciation of home values.”

You, the consumer, can help make a change by signing a petition to end HVCC and allow lenders to order an appraisal directly. Simply go to: www.naihp.org. Today. In the meantime, we can help clear any confusion or concerns you might have regarding HVCC. www.deltahl.com.

Suzanne's blog

October 2012

Taking care of one another

There's a lot to be said about living in a small, rural community. Certainly, there are
trade-offs for enjoying the quality of life offered here. While we lack some
conveniences and level of services taken for granted in a big city, we are
surrounded by a lot of very big-hearted folks. Perhaps it's because everyone
virtually knows everyone here. Regardless, this is a
community that goes the extra distance to help one another.

October is well known as Breast Cancer Awareness Month. So how does a small town take
part in a highly visible and international campaign? We create our own customized,
large-scale effort. Our Paint the Town Pink is in its sixth year, and continues
to grow with more attendance, a grander expo and more money raised. The really
good news is that 100% of our donation dollars stay right here in our community
and goes to the hospital's foundation that provides mammograms and breast
cancer care for our residents.

Even in our small community where the recession is particularly difficult and the need
for care is on the rise, Paint the Town Pink puts "unity" in our community. The
organizers have done a fabulous job at keeping the event a must-do of the year
as well as make it easy and affordable for all to donate.

This year, Paint the Town Pink established fundraising teams. We signed up as the
Mortgage Divas Team. Moreover, our head diva, Dawn Narvaez, is the event's team
coordinator. The competition is on, and we're serious about being the winning
team that raises the most money and takes home the top prize! It's a diva
thing.

Those in need have many faces - a neighbor, the bank teller, the soccer coach, or the
anonymous family going to our local Food Bank to survive. We may be a small
town, but we are big on compassion. Life here is just a little sweeter by the
simple desire to take care of one another. It's gratifying, especially when you
know how it's helping and who it's helping.

Donations of any size can be made to the Mortgage Divas Team by calling (530) 478-8383

Get ready for lower loan limits this fall

There's talk around the lending industry that mortgage giant Fannie Mae will tighten
its loan grip this October. The plan is to lower the loan amount that buyers
and refinancing homeowners can take out. They also plan to eliminate the
all-attractive 3% down and require a minimum of 10% down payment.

Considering the recent momentum in the real estate market fueled by new government programs
(HARP and easier USDA, FHA loans), this news come as a surprise. It will no
doubt be disappointing for the numerous buyers and homeowners out there seeking
to take advantage of this historic buying opportunity or to lower mortgage payments
to save their home.

Currently, individual counties determine loan amounts. More populated ones have loans as
high as $729,000 while our rural Nevada County is $477,250 and Placer County
$460,000. With Fannie Mae government controlled, the recession-stuck economy
seems to be the reasoning behind this move. Everything these days is getting
cut or getting cut back.

If you're feeling confused, you're not alone. In the past six months, our office
has seen a surge in loan activity, a sign to me that the recent new federally
supported programs are giving the market the long-awaited
boost. With current loan amounts, it widened the net to save more homeowners
from going under. Moreover, the low down payment, along with historic low
interest rates, is finally attracting first-time buyers who are the catalyst in
moving up buyers to the next level.

October is just a few short months away. While there are other programs out there offering
3% down payment and USDA 0 down payment, they cost more. You owe it to yourself
to explore this once-in-a-lifetime opportunity to buy or refinance. It costs
nothing. Simply give us a call – before it's too late.