Treasury Invites Taxpayers to Get Refunds by Debit Card!

The U.S. Treasury wants to quit writing paper checks. At the same time, it wants to give taxpayers more choices.

Its latest effort consists of a pilot program to deliver tax refunds through prepaid debit cards. About 600,000 taxpayers earning $35,000 a year or less have received letters inviting them to activate a debit card that can receive direct deposits.

An estimated nine million households, about one in every 12, don’t have bank accounts. By activating the debit card for a tax refund, they wouldn’t have to pay a check-cashing fee, and the government would save the cost of producing a check.

Each tax refund check costs the government about $1, including the cost of processing roughly 600,000 claims each year for missing checks. Payments by direct deposit cost the government about 10 cents.

The pilot program will provide consumers with a debit card that can be used, not just for receiving refunds, but also for shopping with many features of a checking account.

Deputy Secretary of the Treasury Neal Wolin, quoted by Bankrate.com, says the debit card “can be used for everyday financial transactions, such as receiving wages by direct deposit, withdrawing cash, making purchases, paying bills and building savings safely, giving users more control over their financial futures.”
Half of the 600,000 offers from the Treasury test program will carry a monthly fee of $4.50. The rest will be free. The different approaches will allow Treasury to determine which is more likely to lead consumers to sign up for the card.

Short Sales, Foreclosures and Bankruptcy-How they impact your credit!

How will a foreclosure, short sale or

bankruptcy affect your ability to

purchase a home?  Below are

some guidelines that lenders follow!

Seasoning means time that must pass!

FHA

 Bankruptcy - Chapter 13 - No seasoning

 Bankruptcy - Chapter 7 – 2 years seasoning from      discharge date

Foreclosures and Short sale – 3 years seasoning from date reported on the credit report.  Possibly less time is required with extenuating circumstances (2 yrs. seasoning is required).  Divorce is not a extenuating circumstance by HUD.

The HUD exception is that borrowers who are forced to move due to a job relocation can be eligible immediately after a short sale provided that there have been no late mortgage payments.

Conventional  loans WITHOUT mortgage insurance

Bankruptcy – 4 years seasoning

Foreclosure - 5 years

Deed- in- lieu of foreclosure – 4 years

Short sales – 2 years seasoning

Conventional loans with Mortgage Insurance

Mortgage Insurance requirements

BK – 4 years seasoning                                                      

Short Sale – 2 years seasoning

Foreclosure – 4-5 years

There can be no late payments since the negative reporting and the FICO score requirements must be met.  Three trade lines with no late payments is highly recommended.

What are extenuating circumstances?  Here is what FNMA says:

Extenuating circumstances are nonrecurring events that are beyond the borrower’s control that result in a sudden, significant, and prolonged reduction in income or a catastrophic increase in financial obligations.

Examples of documentation that can be used to support extenuating circumstances include documents that confirm the event (such as a copy of a divorce decree, medical reports or bills, notice of job layoff, job severance papers, etc.) and documents that illustrate factors that contributed to the borrowers inability to resolve the problems that resulted from the event (such as a copy of insurance papers or claim settlements, property listing agreements, lease agreements, tax returns (covering the periods prior to, during, and after a loss of employment), etc.).

The lender must obtain a letter from the borrower explaining the relevance of the documentation.  The letter must support the claims of extenuating circumstances, confirm the nature of the event that led to the bankruptcy of foreclosure-related action, and illustrate the borrower had no reasonable options other than to default on their financial obligations.

The Shadow Inventory

The Shadow knows...   Most of us of a certain age can remember these haunting words at the end of each episode of "The Shadow".  What I want to talk about is the shadow inventory and what it may mean for housing prices moving forward.  We all learned in Economics 101 that if the supply of a product increases, the demand for the product decreases.  The result is the manufacturer must reduce the price of the product in order to sell it.  Real estate works the same way.  Our supply is measured by the inventory of homes for sale.  These figures are published regularly in every market in the country and are used by realtors in pricing their listings and in helping their buyers determine what to offer to purchase homes.  However, what these figures miss is the "shadow" inventory.  The shadow inventory refers to the properties that have been foreclosed by lenders but have yet to be placed on the market.  The National Association of Realtors (NAR) published a great article that details the percentage of distressed sales (short sales and foreclosures) in 2010, the remaining shadow inventory for each state, and the effects this inventory will have on prices in the upcoming months http://bit.ly/dJHxU4.  For California, the results are mixed.  While over 50% of all sales in 2010 were distressed sales, it is estimated that the remaining shadow inventory will be absorbed over the next 11-20 months, which is much sooner than in other parts of the country. 

So, when you are asked by friends how long it will take before we get back to a normal real estate market, it would be safe to lean over and whisper in their ears..."Only the Shadow knows"...

Housing Trust of Santa Clara County-CCAP Program-Up to $15k of assistance!

Take advanage of the Closing Cost Assistance Program (CCAP) in Santa Clara County!  It is like a little money tree for first time buyers! 

Deferred loan of 3% of the purchase price up to $15,000 for down payment and/or closing costs!

3% simple interest rate loan due on sale or refinance of home, or in 30 years!

No interest or principle payments due during term of the loan!

A first time buyer for is defined as someone who has not owned a home in Santa Clara County during the last three years! 

Minimum 3% down is required!

                  



Avoiding Foreclosure!

When the stress of a possible foreclosure rises, it is important to remember that there are many resources out there to help avoid it. The programs and agencies below all specialize in helping people avoid foreclosure on their homes:

U.S. Department of Housing and Urban Development (HUD)

800-569-4287

http://www.hud.gov/local/ca/homeownership/foreclosure.cfm

HUD Avoidance Counseling
http://www.hud.gov/offices/hsg/sfh/hcc/fc/

Making Home Affordable Program
888-995-HOPE
http://www.makinghomeaffordable.org/

Housing California
916-447-0503
http://www.housingca.org/nr/resource/foreclosure_resources/

State of California – Consumer Home Mortgage Information
http://yourhome.ca.gov/

Fannie Mae Resource Center
800-732-6643
http://www.fanniemae.com/homeowners/index.html

Project Sentinel – Redwood City counseling agency
(HUD Approved Agency)
888.331.3332
http://www.housing.org

Neighborhood Counseling Services – Silicon Valley
(HUD Approved Agency)
408-279-2600
http://www.nhssv.org/foreclosure-counseling.htm

Neighbor Works America
202-220-2300
http://www.nw.org/network/foreclosure/default.asp

National Foreclosure Mitigation Counseling
202-220-6314
nfmc@nw.org

The important thing to remember is that foreclosure isn’t always inevitable, and there are many programs and agencies ready to help. Share these resources if someone you know is going through a possible foreclosure on their home.

Shopping Around for a Mortgage

It is important that while shopping for a mortgage to not solely focus on rates, but to shop for a great loan consultant. Anyone can quote a rate, but knowing you’re with a true professional that can deliver makes all the difference.

Also, many lenders will quote rates without taking into account where the property is, what your credit rating is, or other very important factors that may affect the actual rate you and your property qualify for.

Here’s the inside scoop on how to do it right.

Always make sure you are working with an experienced, professional lender. The largest financial transaction of your life is far too important to place into the hands of someone who is not capable of advising you properly and troubleshooting the issues that may arise along the way. But how can you tell?

Here are four simple questions your lender absolutely must be able to answer correctly. If they do not know the answers immediately leave and go to a lender that does.

1. What are mortgage interest rates based on?

The only correct answer is Mortgage Backed Securities or Mortgage Bonds, not the Fed or the 10-year Treasury Note. While the 10-year Treasury Note sometimes trends in the same direction as Mortgage Bonds, it is not unusual to see them move in completely opposite directions. Do not work with a lender who has their eyes on the wrong indicators.

2. What is the next Economic Report or event that could cause interest rate movement?
A professional lender will have this at their fingertips. To receive an up-to-date weekly calendar of weekly economic reports and events that may cause rates to fluctuate, contact us today.

3. When Bernanke and the Fed “change rates,” what does this mean… and what impact does this have on mortgage interest rates?
The answer may surprise you. When the Fed makes a move, they are changing a rate called the “Fed Funds Rate”. This is a very short-term rate that impacts credit cards, credit lines, auto loans and the like. Mortgage rates most often will actually move in the opposite direction as the Fed change, due to the dynamics within the financial markets.

4. What is happening in the market today and what do you see in the near future?
If a lender cannot explain how Mortgage Bonds and interest rates are moving at the present time, as well as what is coming up in the near future, you are talking with someone who is still reading last week’s newspaper, and probably not a professional with whom to entrust your home mortgage financing.

Be smart… Ask questions… Get answers!

More than likely, this is one of the largest and most important financial transactions you will ever make. You might do this only four or five times in your entire life but we do this every single day. It’s your home and your future. It’s our profession and our passion. We’re ready to work for your best interest.

Tips for Buying a New Home

There are many pitfalls you can avoid when you are in the market to buy a new home. Here are just a few tips and strategies to help you prepare for success:

Know your credit score.


You may be able to get a better mortgage rate and more favorable loan terms by restructuring some of your balances on credit cards, car loans, etc. Mortgage professionals help you correct errors on your credit report and determine which balances to restructure or pay off in order to improve your credit score.

Know how much you can spend and determine how much you can afford. Mortgage professionals can help you:

• Finance your home based on your monthly payment comfort level
• Determine how much cash to use as your down payment and where to get these funds
• Understand your before and after-tax monthly payments
• Restructure some other debt you may have to free up more monthly cash flow that enables you to improve your home buying budget

Don’t get caught in the “pre-approval” / “pre-qualification” trap.

It is always better to get a full approval / loan commitment from a mortgage professional before you even start looking for a home. Many mortgage brokers and lenders will give you a “pre-approval” or “pre-qualification”, but these are often meaningless. What you really need is a bona fide commitment from a mortgage lender that you are in fact approved for financing. Many real estate transactions have been ruined because buyers, sellers and Realtors have counted on “pre-approval” letters that proved meaningless.

Determine whether to rent or buy a home based on timeframe, budget and local market conditions.

Mortgage professionals help you run the numbers to determine if it is better for you to rent or buy a home based on your individual circumstances.

Develop a strategy for financing your closing costs, home improvements and furniture expenses.

A home purchase is a significant financial commitment. Mortgage professionals help you understand the costs involved in home ownership and help you develop a financial strategy for dealing with these costs ahead of time.

Evaluate the mortgage products that will work best in your situation.

Remember, it is far better to find a mortgage professional who can help you implement the best strategy with competitive interest rates than for you to shop for the lowest rate with the wrong strategy.

7 Things You Should NOT Do When Applying for a Home Loan!

This is a list of things to steer clear of when you are seeking to obtain financing for a home. If you do any of these things, please contact your loan officer immediately.

Even if  you have been pre-qualified, we can help you re-qualify.

1. Don’t buy or lease an auto!

Lenders look carefully at your debt-to-income ratio. A large payment such as a car lease or purchase can greatly impact those ratios and prevent you from qualifying for a home loan.

2. Don’t move assets from one bank account to another!

These transfers show up as new deposits and complicate the application process, as you must then disclose and document the source of funds for each new account. The lender can verify each account as it currently exists. You can consolidate your accounts later if you need to.

3. Don’t change jobs!

A new job may involve a probation period, which must be satisfied before income from the new job can be considered for qualifying purposes.

4. Don’t buy new furniture or major appliances for your “new home”!
If the new purchases increase the amount of debt you are responsible for on a monthly basis, there is the possibility this may disqualify you from getting the loan, or cut down on the available funds you need to meet the closing costs.

5. Don’t run a credit report on yourself!
This will show as an inquiry on your lender’s credit report. Inquiries must be explained in writing.

6. Don’t attempt to consolidate bills before speaking with your lender!
The loan officer can advise you if this needs to be done.

7. Don’t pack or ship information needed for the loan application!
Important paperwork such as W-2 forms, divorce decrees, and tax returns should not be sent with your household goods. Duplicate copies take weeks to obtain, and could stall the closing date on your transaction.

Managing Your Debt!

With credit card debt spinning out of control, it is important to come up with a plan for managing your debt.
Interest rates and fees are continuing to get the best of many consumers.  Credit cards are bad debt and the ultimate goal should be to pay off the debt monthly.   

1. If you are in credit card trouble, you must cut up all of your credit cards now, with the possible exception of one card for emergencies; do not carry this card in your wallet, however.  Temptations to charge must be eliminated.  Do not add to your debt! 
2. You must pay more than the minimum payment every month, as much more as you possibly can. If you owe a credit card company $5000 at 18 percent interest and all you do is pay the minimum each month it will take you over 30 years to pay it off.
3. You must pay off the credit card with the highest interest rate first, and the rest in descending order.
4. You must negotiate for yourself the best interest rates, even if it means switching credit cards.  Do not close old accounts, just use periodically and pay them off monthly.  Closing old credit cards can affect your fico score-history of credit. 
5.  You must understand everything about how your credit card works--all fees, how the company charges you, all about the so-called grace period.  Read the fine print of your terms.
6. You must honor all your debts equally--whether it's the money you owe a credit card, or the money you owe to a family member.
7. After you pay off one credit card, you must apply the money you have been paying that particular company to paying off another credit card.  The ultimate goal is to become debt free and pay the balance in full every month.  Spend only what you can afford to pay off monthly!
8. After your debts have all been paid off, you should apply the money you were paying all those months toward creating your future.  SAVE, SAVE, SAVE!

Daylight Savings Time-Clocks Spring Forward This Saturday at 2:00 AM

Starting in 2007, daylight time begins in the United States on the second Sunday in March and ends on the first Sunday in November. On the second Sunday in March, clocks are set ahead one hour at 2:00 a.m. local standard time, which becomes 3:00 a.m. local daylight time. On the first Sunday in November, clocks are set back one hour at 2:00 a.m. local daylight time, which becomes 1:00 a.m. local standard time. These dates were established by Congress in the Energy Policy Act of 2005, Pub. L. no. 109-58, 119 Stat 594 (2005).
Not all places in the U.S. observe daylight time. In particular, Hawaii and most of Arizona do not use it. Indiana adopted its use beginning in 2006.

History of Daylight Time in the U.S.
Although standard time in time zones was instituted in the U.S. and Canada by the railroads in 1883, it was not established in U.S. law until the Act of March 19, 1918, sometimes called the Standard Time Act. The act also established daylight saving time, a contentious idea then. Daylight saving time was repealed in 1919, but standard time in time zones remained in law. Daylight time became a local matter. It was re-established nationally early in World War II, and was continuously observed from 9 February 1942 to 30 September 1945. After the war its use varied among states and localities. The Uniform Time Act of 1966 provided standardization in the dates of beginning and end of daylight time in the U.S. but allowed for local exemptions from its observance. The act provided that daylight time begin on the last Sunday in April and end on the last Sunday in October, with the changeover to occur at 2 a.m. local time.

During the "energy crisis" years, Congress enacted earlier starting dates for daylight time. In 1974, daylight time began on 6 January and in 1975 it began on 23 February. After those two years the starting date reverted back to the last Sunday in April. In 1986, a law was passed that shifted the starting date of daylight time to the first Sunday in April, beginning in 1987. The ending date of daylight time was not subject to such changes, and remained the last Sunday in October. The Energy Policy Act of 2005 changed both the starting and ending dates. Beginning in 2007, daylight time starts on the second Sunday in March and ends on the first Sunday in November.
For a very readable account of the history of standard and daylight time in the U.S., see

Ian R. Bartky and Elizabeth Harrison: "Standard and Daylight-saving Time", Scientific American, May 1979 (Vol. 240, No. 5), pp. 46-53.

Year	Begin	End
2006	April 2	October 29
2007 *	March 11	November 4
2008	March 9	November 2
2009	March 8	November 1
2010	March 14	November 7
2011	March 13	November 6
2012	March 11	November 4
2013	March 10	November 3
2014	March 9	November 2
2015	March 8	November 1

Year	Begin	End
2006	April 2	October 29
2007 *	March 11	November 4
2008	March 9	November 2
2009	March 8	November 1
2010	March 14	November 7
2011	March 13	November 6
2012	March 11	November 4
2013	March 10	November 3
2014	March 9	November 2
2015	March 8	November 1

Federal Trade Commission Protecting America's Consumers!

FTC's Mortgage Assistance Relief Services Advance Fee Ban Takes Effect

The advance fee ban under the FTC’s Mortgage Assistance Relief Services (MARS) Rule is designed to protect financially distressed homeowners from mortgage relief scams that have sprung up during the mortgage crisis.

“Banning the collection of up-front fees will protect homeowners from being victimized,” FTC Chairman Jon Leibowitz said. “This is especially important at a time when so many people are behind on their mortgages or facing foreclosure.”

As of January 31, 2011, companies that offer to help homeowners get their loans modified or sell them other types of mortgage assistance relief services are no longer allowed to charge up-front fees. Under the rule, a mortgage assistance relief company may not collect a fee until the consumer has signed a written agreement with the lender that includes the relief obtained by the company. When the company presents the consumer with that relief, it must inform the consumer, in writing, that the consumer can reject the offer without obligation and, if the consumer accepts, the total fee due. Before the consumer agrees to accept the mortgage relief, the company must also provide a written notice from the lender or servicer showing how the relief will change the terms of the consumer’s loan (including any limitations on a trial loan modification).

During the past three years, the FTC has filed 32 lawsuits against mortgage assistance relief companies for deception and abuse, and state law enforcers have filed hundreds of additional cases. The MARS Rule issued in November gives the FTC and the states an additional tool for combating deceptive and unfair acts or practices by these entities.

Attorney exemption

Attorneys are generally exempt from the rule if they provide mortgage assistance relief services as part of the practice of law, are licensed in the state where the consumer or dwelling is located, and comply with state laws and regulations governing attorney conduct related to the rule. To be exempt from the advance fee ban, attorneys must also place any advance fees they collect in a client trust account and abide by state laws and regulations covering such accounts.

Information for Businesses and Consumers

FTC staff has issued two new business education publications. “The Mortgage Assistance Relief Services Rule: A Compliance Guide for Business” describes the key provisions of the MARS Rule to help covered businesses ensure that they are in compliance. “The Mortgage Assistance Relief Services Rule: A Compliance Guide for Lawyers” contains specific guidance for attorneys who provide mortgage assistance relief services. The staff has also issued a consumer publication, “Mortgage Assistance Relief Scams: Another Potential Stress for Homeowners in Distress,” which relates how to spot and avoid these scams.

MEDIA CONTACT:

Office of Public Affairs
202-326-2180

Mortgage Credit Certificate (MCC) Program in Santa Clara County-SCC40k Downpayment Assistance Program

County of Santa Clara-First-Time Home Buyer Program Updates

Mortgage Credit Certificate’s Update:  

Money is still available!

On January 26, 2011, the California Debt Limit Allocation Committee (CDLAC) awarded Santa Clara County’s

Mortgage Credit Certificate Program (MCC) an additional $3,041,670 in MCC tax credits to be issued to qualified first-time homebuyer’s.  The MCC Program is a federal income tax credit equal up to 15% of the homebuyer’s

interest paid on their first loan. 

Maximum Income Limits for 2011:                        

1-2 person household: $103,500                                

3+  person household: $119,025                                

Maximum Purchase Price Limits for 2011:

$570,000 for Resale Properties

$630,000 for Newly Constructed Properties

Based on the average MCC loan amount the Bonus Pool Allocation should serve 65-70 households. 

SCC40K Downpayment/Closing Cost Program Update:

The County has seven (7) $40,000 Downpayment Assistance loans still available. 

The Downpayment/Closing Cost Program offers qualified first time buyers a 30- year, deferred loan

at 3% interest for the first 4 years, and 0% interest to year 30.  Properties purchased only in the following jurisdictions qualify:

Qualified  Jurisdictions:

Campbell, Los Altos, Los Altos Hills, Los Gatos, Monte Sereno, Morgan Hill, Saratoga, and the County Unincorporated Areas.  

(Properties in the City of San Jose are not eligible for these loans.)

HomePath Properties Have Special Financing Available!

                                  Home Path (Fannie Mae Real Estate Owned Properties): Take Advantage!

Refer to http://www.homepath.com for property listings!

Currently over 300 eligible properties in Sacramento County and

103 available for Santa Clara County!

No mortgage insurance required!  No appraisal necessary!

Fannie Mae sets the price!

Purchases Only!

Ø       Owner Occupied

o         Max LTV 97 (1 unit, Single Family, Condo’s & PUDs)

o         Max LTV 80 (2 unit, Single Family)

      Max LTV 95 (Co-ops- see geographic restrictions)

                                                 Max LTV 75 (3-4 units)

  Second Homes

o    Max LTV 90 (1 unit, SFD/SFA, Condo’s & PUDs)

o    Max LTV 90 (Co-ops- see geographic restrictions)

Investment (Non-Owner)

o    Max LTV 90 (1 unit, Single Family, Condo’s & PUDs)

o    Max LTV 80 (2 unit, Single Family)

o    Max LTV 75 (3-4 units)

Declining Market policy does not apply. No reduction in LTV required

Minimum 660 credit score

·         If LTV is < 80 the minimum credit score will be 620

NO PRIVATE MORTGAGE INSURANCE

Geographic Restrictions:

·         Properties must be an eligible FNMA REO Property.  Refer to http://www.homepath.com/ for property listing

o    Choose either the Basic search, or the Map Search to find available properties

o    Only Home Path Mortgage Financing will be eligible

o    Properties requiring Home Path Renovation Mortgages will not be eligible