MERS is a tiny data-management company created by mortgage lenders to save money on filing fess. Seems simple enough right? How could this become one of the major problems in the housing market today? Bankruptcy judges, foreclosure attorneys, and homeowners going through the process of bankruptcy or foreclosure are starting to find out! Only people working in the mortgage industry had heard of MERS before the collapse, now MERS is popping up everywhere.
Although the average person has never heard of it, MERS — short for Mortgage Electronic Registration Systems — holds 60 million mortgages on American homes, through a legal maneuver that has saved banks more than $1 billion over the last decade but made life maddeningly difficult for some troubled homeowners. In case that slipped by you – 60,000,000 mortgages! I do not know how many mortgages there are all together but that is most of them!
MERS was created by lenders seeking to save millions of dollars on paperwork and public recording fees every time a loan changes hands, and all of you know how many times a mortgage changes hands. MERS is a confidential computer registry for trading mortgage loans. From an office in the Washington suburbs, it played an integral, if unsung, role in the proliferation of mortgage-backed securities that fueled the housing boom. But with the collapse of the housing market, the name of MERS has been popping up on foreclosure notices and on court dockets across the country, raising many questions about the way this controversial but legal process obscures the tortuous paths of mortgage ownership.
If MERS began as a convenience, it has, in effect, become a corporate cloak: no matter how many times a mortgage is bundled, sliced up or resold, the public record often begins and ends with MERS. In the last few years, banks have initiated tens of thousands of foreclosures in the name of MERS — about 13,000 in the New York region alone since 2005 — confounding homeowners seeking relief directly from lenders and judges trying to help borrowers untangle loan ownership. What is more, the way MERS obscures loan ownership makes it difficult for communities to identify predatory lenders whose practices led to the high foreclosure rates that have blighted some neighborhoods.
To a number of critics, MERS has served to cushion banks from the fallout of their reckless lending practices.
In an interview, the president of MERS, R. K. Arnold, said that his company had benefited not only banks, but also millions of borrowers who could not have obtained loans without the money-saving efficiencies it brought to the mortgage trade. He said that far from posing a hurdle for homeowners, MERS had helped reduce mortgage fraud and imposed order on a sprawling industry where, in the past, lenders might have gone out of business and left no contact information for borrowers seeking assistance.
About 3,000 financial services firms pay annual fees for access to MERS, which has 44 employees and is owned by two dozen of the nation’s largest lenders, including Citigroup, JPMorgan Chase and Wells Fargo. It was the brainchild of the Mortgage Bankers Association, along with Fannie Mae, Freddie Mac and Ginnie Mae, the mortgage finance giants, who produced a white paper in 1993 on the need to modernize the trading of mortgages.
At the time, the secondary market was gaining momentum, and Wall Street banks and institutional investors were making millions of dollars from the creative bundling and reselling of loans. But unlike common stocks, whose ownership has traditionally been hidden, mortgage-backed securities are based on loans whose details were long available in public land records kept by county clerks, who collect fees for each filing. The “tyranny of these forms,” the white paper said, was costing the industry $164 million a year.
Although several courts have raised questions over the years about the secrecy afforded mortgage owners by MERS, the legality has ultimately been upheld. The issue has surfaced again because so many homeowners facing foreclosure are dealing with MERS.
When foreclosures do occur, MERS becomes responsible for initiating them as the mortgage holder of record. But because MERS occupies that role in name only, the bank actually servicing the loan deputizes its employees to act for MERS and has its lawyers file foreclosures in the name of MERS.
The potential for confusion is multiplied when the high-tech MERS system collides with the paper-driven foreclosure process. Banks using MERS to consummate mortgage trades with “electronic handshakes” must later prove their legal standing to foreclose. But without the chain of title that MERS removed from the public record, banks sometimes recreate paper assignments long after the fact or try to replace mortgage notes lost in the securitization process.
This maneuvering has been attacked by judges, who say it reflects a cavalier attitude toward legal safeguards for property owners, and exploited by borrowers hoping to delay foreclosure.
Hopefully you will not have to deal with MERS!
Check out www.thebriteway.com for your mortgage needs!
Have a great Friday!
Thursday, April 23, 2009
Wednesday, April 22, 2009
New Bankruptcy Bill - Could be a Huge Help to You
Not able to make your mortgage payments anymore? Are you considering filing for bankruptcy? If you are considering filing for bankruptcy keep an eye on the so-called "cramdown" bill. The bill, which is part of President Obama's housing plan and is making its way through Congress right now, would allow bankruptcy judges in Chapter 13 proceedings to reset the terms of certain mortgages so that more homeowners can keep their homes. The home must be a primary residence to qualify. Mortgages on rental properties or second homes will not qualify for this plan.
Currently, a Chapter 13 filing stops the foreclosure process and gives homeowners time to restructure their payments with their lender. But as the law stands right now, homeowner’s do not have the ability to alter the terms of their loans.
The passing of the “cramdown” bill would be a huge change…
Under the new bill, which has already been passed by the House of Representatives, the bankruptcy judge can reduce a homeowner’s principal balance as well as their interest rate. So let’s say that you have a $300,000 loan on a home whose value has fallen to $200,000. Under the new plan, a bankruptcy judge could eliminate $100,000 of the debt. Wouldn’t that be nice! It would be worth it to file bankruptcy just for this benefit!
Now - before you could qualify for a cramdown loan modification, you would have to show that you appealed to your mortgage lender for relief at least 15 days before you filed for bankruptcy. Easy enough right?
The plan will obviously help more people keep their homes, but the mortgage industry is not happy with the bill.
The mortgage industry opposes it because of concerns it will destabilize the housing market and lead to more bankruptcy filings. I agree with the mortgage industry that it will lead to more bankruptcy filings, but you cannot argue with homeowners who are paying on mortgage balances that are $100,000 - $200,000 more than the house is worth. There has to be some relief for these people. Let’s see what happens!
Check out www.thebriteway.com for your refinance and purchase needs!
Have a great Thursday!
Currently, a Chapter 13 filing stops the foreclosure process and gives homeowners time to restructure their payments with their lender. But as the law stands right now, homeowner’s do not have the ability to alter the terms of their loans.
The passing of the “cramdown” bill would be a huge change…
Under the new bill, which has already been passed by the House of Representatives, the bankruptcy judge can reduce a homeowner’s principal balance as well as their interest rate. So let’s say that you have a $300,000 loan on a home whose value has fallen to $200,000. Under the new plan, a bankruptcy judge could eliminate $100,000 of the debt. Wouldn’t that be nice! It would be worth it to file bankruptcy just for this benefit!
Now - before you could qualify for a cramdown loan modification, you would have to show that you appealed to your mortgage lender for relief at least 15 days before you filed for bankruptcy. Easy enough right?
The plan will obviously help more people keep their homes, but the mortgage industry is not happy with the bill.
The mortgage industry opposes it because of concerns it will destabilize the housing market and lead to more bankruptcy filings. I agree with the mortgage industry that it will lead to more bankruptcy filings, but you cannot argue with homeowners who are paying on mortgage balances that are $100,000 - $200,000 more than the house is worth. There has to be some relief for these people. Let’s see what happens!
Check out www.thebriteway.com for your refinance and purchase needs!
Have a great Thursday!
Tuesday, April 21, 2009
FICO Offering Free Tool For Homeowners
Fair Isaac Corp. is offering Mortgage Recovery Initiative(MRI), a foreclosure prevention and management tool based on consumer credit behavior feedback. The tool was developed to help facilitate mortgage modifications and mitigate new delinquencies by reducing re-defaults and preventing foreclosures. Check out their website at http://www.mortgagereliefonline.com/. The process is fairly simple and the best part about this service is that it is FREE! You can actually get some help that is easy and free.
The Minneapolis-based firm said MRI assists borrowers and lenders to be aware of and comply with the federal Making Home Affordable, http://makinghomeaffordable.gov/, guidelines. MRI users can also contact program partners such as the Homeownership Preservation Foundation, a national network of HUD certified counseling agencies, Money Management International, a full-service credit counseling agency, and Equifax.
So if you are in need of some relief with your mortgage you have no reason not to check this website out. Sign up with their program and get some answers and some guidance.
If you just need a mortgage refinance or are looking to purchase a home check out http://www.thebriteway.com/.
Have a great Tuesday!
The Minneapolis-based firm said MRI assists borrowers and lenders to be aware of and comply with the federal Making Home Affordable, http://makinghomeaffordable.gov/, guidelines. MRI users can also contact program partners such as the Homeownership Preservation Foundation, a national network of HUD certified counseling agencies, Money Management International, a full-service credit counseling agency, and Equifax.
So if you are in need of some relief with your mortgage you have no reason not to check this website out. Sign up with their program and get some answers and some guidance.
If you just need a mortgage refinance or are looking to purchase a home check out http://www.thebriteway.com/.
Have a great Tuesday!
Sunday, April 19, 2009
Obama Housing Fix Update
This is an update to my first article on Obama’s Housing Fix. On March 4th the government passed a housing bill aimed at reducing the number of foreclosures by helping homeowners lower their monthly payments through loan modifications and refinances.
Some banks and servicers are up and running with the new programs and some are still updating their systems to implement the changes. There are still portions of the bill that companies are waiting for clarification on. It may take a few more weeks for these companies to be ready to start taking applications for refinances and modifications. Just be patient. In the meantime the government has created a website that you can go to : http://makinghomeaffordable.gov/ . This website can help you figure out if you will qualify for the new programs that are being put into place.
Just because some of the banks or servicers are not completely ready to take on this program does not mean that you can’t call them. If your bank or servicer is not ready to start taking application they are most likely taking down names and numbers of the customers that call them to ask about the program. Then once they have the program in place they will return these customer’s calls.
The good news is that the four largest servicers in the country have agreed to participate in the program – Wells Fargo, CitiBank, JP Morgan Chase and Bank of America. This is huge! This means that most of the other banks will likely follow their lead. So help for you could be on the way!
A brief overview of the program is below – this was also in my first article:
Loan Modifications:
Mortgage companies will be reviewing requests from current customers who need to lower their monthly mortgage payments. The goal is to reduce your front end debt ratio to 31%. Your front end ratio is your first mortgage payment(principle, interest, taxes, insurances, mortgage insurance) divided by your gross monthly income. If your current front end raio is higher than 31% then the mortgage compnay will try a number of things to to reduce your monthly payment until it reached 31%.
1. They will reduce your interset rate to a low as 2%...if your front end ratio is still to high then
2. They will increase the term of your loan up to 40 years...if your front end ration is still to high then
3. They will defer some of the principle on your loan to the end of your mortgage term. This will create a balloon payment at the end of your mortgage term...if the front end ratio is still too high then
4. They can do priciple reduction on your loan. This means they will waive some of the balance on your loan. This principle reduction will not have to be repaid.
Mortgage Refinances:
The people who qualify for this will be:
1. Loans closed before January 1st, 2009
2. Owner occupied properties3. Loan to value of 105% or lower - the big change is here. Most people only qualify for a better rate if they are at 80% of lower right now.
Both of these programs offer incentives to the mortgage companies to participate in the program as well as incentives to the homeowners who keep their payments current.You can read some other articles regarding this reform at http://money.cnn.com/2009/03/04/news/economy/guidelines/index.htm
Check out details of the new program at http://www.treas.gov/initiatives/eesa/
If you need help with a refinance or a purchase check out www.thebriteway.com and give us a call.
Happy Monday Everyone!
Some banks and servicers are up and running with the new programs and some are still updating their systems to implement the changes. There are still portions of the bill that companies are waiting for clarification on. It may take a few more weeks for these companies to be ready to start taking applications for refinances and modifications. Just be patient. In the meantime the government has created a website that you can go to : http://makinghomeaffordable.gov/ . This website can help you figure out if you will qualify for the new programs that are being put into place.
Just because some of the banks or servicers are not completely ready to take on this program does not mean that you can’t call them. If your bank or servicer is not ready to start taking application they are most likely taking down names and numbers of the customers that call them to ask about the program. Then once they have the program in place they will return these customer’s calls.
The good news is that the four largest servicers in the country have agreed to participate in the program – Wells Fargo, CitiBank, JP Morgan Chase and Bank of America. This is huge! This means that most of the other banks will likely follow their lead. So help for you could be on the way!
A brief overview of the program is below – this was also in my first article:
Loan Modifications:
Mortgage companies will be reviewing requests from current customers who need to lower their monthly mortgage payments. The goal is to reduce your front end debt ratio to 31%. Your front end ratio is your first mortgage payment(principle, interest, taxes, insurances, mortgage insurance) divided by your gross monthly income. If your current front end raio is higher than 31% then the mortgage compnay will try a number of things to to reduce your monthly payment until it reached 31%.
1. They will reduce your interset rate to a low as 2%...if your front end ratio is still to high then
2. They will increase the term of your loan up to 40 years...if your front end ration is still to high then
3. They will defer some of the principle on your loan to the end of your mortgage term. This will create a balloon payment at the end of your mortgage term...if the front end ratio is still too high then
4. They can do priciple reduction on your loan. This means they will waive some of the balance on your loan. This principle reduction will not have to be repaid.
Mortgage Refinances:
The people who qualify for this will be:
1. Loans closed before January 1st, 2009
2. Owner occupied properties3. Loan to value of 105% or lower - the big change is here. Most people only qualify for a better rate if they are at 80% of lower right now.
Both of these programs offer incentives to the mortgage companies to participate in the program as well as incentives to the homeowners who keep their payments current.You can read some other articles regarding this reform at http://money.cnn.com/2009/03/04/news/economy/guidelines/index.htm
Check out details of the new program at http://www.treas.gov/initiatives/eesa/
If you need help with a refinance or a purchase check out www.thebriteway.com and give us a call.
Happy Monday Everyone!
Thursday, April 16, 2009
Steps to Take Before You Refinance Your Home
Rates are excellent right now and refinancing into a lower rate to lower your monthly payments might be a great idea for you. Before you call your mortgage broker or your bank you will want to follow a few steps first:
1. Take a look at your mortgage statement and find out what your current balance is and what your current rate is.
2. Pull up this website - http://finance.yahoo.com/q?d=t&s=%5Etnx – Historically and on a typical day you can take this index, the 10 Year Treasury Note, add 2% to this rate and it will give you the par rate for a 30 year fixed rate mortgage. So today the rate is 2.76%. Add 2% to 2.76% and it gives you 4.76%. This will be close to the par rate for a 30 year fixed rate loan. This is not an exact science, but it will give you a good idea. And this is the par rate so your rate will probably be a little higher if you meet all of the qualifications. This rate will be for the most qualified individuals.
3. You need to get an idea of your homes value. Pull up these two sites: www.zillow.com and www.cyberhomes.com. All you need to do it put your address in and these websites will give you an estimate of your home’s value. You can also pull up your local county property appraiser’s website and get recent sales in your area. For Hillsborough County the website is http://www.hcpafl.org/www/search/index.shtml#. This site is fantastic!
4. Now you will take your current balance on your mortgage, your second mortgage too if you have one, and divide it by the value your received from www.zillow.com or www.cyberhomes.com.
a. For an FHA loan you want your mortgage balances/home value to be 94% or less.
b. For a conventional loan you want your mortgage balance/home value to be 87% or less.
These are just a few of the steps you want to take before you call you mortgage broker, lender or bank. When you do call you mortgage person check out www.thebriteway.com.
Rates right now are excellent and if it makes sense you should look into refinancing your loan. I highly recommend a mortgage broker when you do decide to refinance…shocking huh? Considering I am a mortgage broker.
But I do have my reasons. A mortgage broker has many more options than a bank when completing a refinance or a purchase. When you contact a bank directly you only have access to their rates and programs. A mortgage broker has access to a number of different lenders and thus to a number of different programs and rates. You will be doing yourself a favor if you contact a mortgage broker.
Even better – contact both and see who can get you a better deal!
Have a great Thursday!
1. Take a look at your mortgage statement and find out what your current balance is and what your current rate is.
2. Pull up this website - http://finance.yahoo.com/q?d=t&s=%5Etnx – Historically and on a typical day you can take this index, the 10 Year Treasury Note, add 2% to this rate and it will give you the par rate for a 30 year fixed rate mortgage. So today the rate is 2.76%. Add 2% to 2.76% and it gives you 4.76%. This will be close to the par rate for a 30 year fixed rate loan. This is not an exact science, but it will give you a good idea. And this is the par rate so your rate will probably be a little higher if you meet all of the qualifications. This rate will be for the most qualified individuals.
3. You need to get an idea of your homes value. Pull up these two sites: www.zillow.com and www.cyberhomes.com. All you need to do it put your address in and these websites will give you an estimate of your home’s value. You can also pull up your local county property appraiser’s website and get recent sales in your area. For Hillsborough County the website is http://www.hcpafl.org/www/search/index.shtml#. This site is fantastic!
4. Now you will take your current balance on your mortgage, your second mortgage too if you have one, and divide it by the value your received from www.zillow.com or www.cyberhomes.com.
a. For an FHA loan you want your mortgage balances/home value to be 94% or less.
b. For a conventional loan you want your mortgage balance/home value to be 87% or less.
These are just a few of the steps you want to take before you call you mortgage broker, lender or bank. When you do call you mortgage person check out www.thebriteway.com.
Rates right now are excellent and if it makes sense you should look into refinancing your loan. I highly recommend a mortgage broker when you do decide to refinance…shocking huh? Considering I am a mortgage broker.
But I do have my reasons. A mortgage broker has many more options than a bank when completing a refinance or a purchase. When you contact a bank directly you only have access to their rates and programs. A mortgage broker has access to a number of different lenders and thus to a number of different programs and rates. You will be doing yourself a favor if you contact a mortgage broker.
Even better – contact both and see who can get you a better deal!
Have a great Thursday!
Tuesday, April 14, 2009
Tax Day!!!
It is April 15th and a day that many people are hoping to forget about because they owe the government money. If you were a first time homebuyer, or had not owned a home in three years and purchased a home during 2008 then you may be eligible for a tax rebate. If you qualify then you may not have to pay and money to the government this year. Even if you did not purchase a home until 2009 you may still not have to pay! This could be great news for a lot of you out there.
If you have filed your 2008 tax return and forgot about this rebate – DO NOT WORRY – you can file and amended return and receive your rebate.
If you just purchased a home is 2009 and want to get you tax credit now – YOU CAN – check out http://www.irs.gov/newsroom/article/0,,id=205416,00.html for more details on how to do this.
The bottom line is if you qualify for the first time homebuyer tax credit there is no reason you should be paying taxes this year, well at least you should be paying a lot less in taxes this year.
Here is how the tax rebate works - For the 2008 Plan
1. If you made $75,000 or less as an individual and $150,000 or less as a married couple in 2008 then you can claim 10% of the purchase price of your home or $7,500 whichever is less. ***The house must be a primary residence.
2. So you purchased a $200,000 home in 2008 and you meet the income requirement. You can claim 10% of the purchase price of the home which is $20,000 or $7,500 – whichever is less. So you can claim $7,500.
3. So lets say in 2008 your tax situation is:
Tax Liability = $6,000
Taxes Withheld= -$5,000
Tax Credit= -$7,500
Tax Refund= $6,500
4. The above example shows that even if you only paid $5,000 in taxes during 2008 you can still get back $6,500! So you can have the IRS give you money this year. Go get it!
5. If you do decide to tax this tax refund – it is a loan. You have to pay back this $7,500 over the next 15 years – interest free. Your tax liability will be increased every year by $500. This is a great loan, but still a loan – not free money.
For more info - http://turbotax.intuit.com/support/kb/tax-content/tax-tips/6360.html
For the 2009 Plan:
The 2009 plan is much better than the 2008 plan because you do not have to pay back the tax break. And for those of you who purchased a home already in 2009 and were either a first time homebuyer or have not owned a home in 3 years or more then you can file for the $8,000 tax break on your 2008 taxes. Most people will qualify, but make sure you read the rest of the qualifications before you get too excited. Check out http://www.irs.gov/ for more info on the qualifications.
Already filed your 2008 taxes? No need to worry. You can file an amended tax return and receive your hard earned money back. Like I said earlier in the article check out http://www.irs.gov/newsroom/article/0,,id=205416,00.html for more info on filing your taxes.
So get out there and get your tax rebates if you qualify.
Check out http://www.thebriteway.com/.
Have a great Day!
If you have filed your 2008 tax return and forgot about this rebate – DO NOT WORRY – you can file and amended return and receive your rebate.
If you just purchased a home is 2009 and want to get you tax credit now – YOU CAN – check out http://www.irs.gov/newsroom/article/0,,id=205416,00.html for more details on how to do this.
The bottom line is if you qualify for the first time homebuyer tax credit there is no reason you should be paying taxes this year, well at least you should be paying a lot less in taxes this year.
Here is how the tax rebate works - For the 2008 Plan
1. If you made $75,000 or less as an individual and $150,000 or less as a married couple in 2008 then you can claim 10% of the purchase price of your home or $7,500 whichever is less. ***The house must be a primary residence.
2. So you purchased a $200,000 home in 2008 and you meet the income requirement. You can claim 10% of the purchase price of the home which is $20,000 or $7,500 – whichever is less. So you can claim $7,500.
3. So lets say in 2008 your tax situation is:
Tax Liability = $6,000
Taxes Withheld= -$5,000
Tax Credit= -$7,500
Tax Refund= $6,500
4. The above example shows that even if you only paid $5,000 in taxes during 2008 you can still get back $6,500! So you can have the IRS give you money this year. Go get it!
5. If you do decide to tax this tax refund – it is a loan. You have to pay back this $7,500 over the next 15 years – interest free. Your tax liability will be increased every year by $500. This is a great loan, but still a loan – not free money.
For more info - http://turbotax.intuit.com/support/kb/tax-content/tax-tips/6360.html
For the 2009 Plan:
The 2009 plan is much better than the 2008 plan because you do not have to pay back the tax break. And for those of you who purchased a home already in 2009 and were either a first time homebuyer or have not owned a home in 3 years or more then you can file for the $8,000 tax break on your 2008 taxes. Most people will qualify, but make sure you read the rest of the qualifications before you get too excited. Check out http://www.irs.gov/ for more info on the qualifications.
Already filed your 2008 taxes? No need to worry. You can file an amended tax return and receive your hard earned money back. Like I said earlier in the article check out http://www.irs.gov/newsroom/article/0,,id=205416,00.html for more info on filing your taxes.
So get out there and get your tax rebates if you qualify.
Check out http://www.thebriteway.com/.
Have a great Day!
Cash
Last month U.S. investors had more of their assets in cash than in stocks. This is the first time in more than 20 years that this has happened. Why is this a good thing? This is a positive sign because there is a lot of money out there to continue to fuel the current stock price increases we have been seeing.
Since Black Monday back in 1987 this has been an important ratio. After the crash in 1987 investors pulled so much of their money out of stock and put it into cash accounts that the ratio favored cash over stocks. Since then this is the first time this has happened.
In March investors held a record 45 percent of assets in cash, including money-market investments, and a record-low equity allocation of 41 percent. What are the ratio’s normally you ask? Historically investors keep about 60 percent of their assets in stocks and 25 percent in cash.
This may be good news for the near future of stock prices. Because there is so much cash available that is not currently in the market investors have enough buying power to keep stocks moving higher. This does not guarantee that stocks will continue their upward trend, but it is a good sign that it is possible.
So once again, just like homes, this could be the best time to buy. Buy low and sell high is the way to make money. So even if you are not going to use the money you put in the stock market for a number of years – this could be the low. Now don’t blame me if it is not and you lose money! I am just saying – there are a lot of positive signs out there pointing to a better future for the stock market as well as the housing market.
If you need help with a mortgage check out http://www.thebriteway.com/.
Have a great Tuesday!
Since Black Monday back in 1987 this has been an important ratio. After the crash in 1987 investors pulled so much of their money out of stock and put it into cash accounts that the ratio favored cash over stocks. Since then this is the first time this has happened.
In March investors held a record 45 percent of assets in cash, including money-market investments, and a record-low equity allocation of 41 percent. What are the ratio’s normally you ask? Historically investors keep about 60 percent of their assets in stocks and 25 percent in cash.
This may be good news for the near future of stock prices. Because there is so much cash available that is not currently in the market investors have enough buying power to keep stocks moving higher. This does not guarantee that stocks will continue their upward trend, but it is a good sign that it is possible.
So once again, just like homes, this could be the best time to buy. Buy low and sell high is the way to make money. So even if you are not going to use the money you put in the stock market for a number of years – this could be the low. Now don’t blame me if it is not and you lose money! I am just saying – there are a lot of positive signs out there pointing to a better future for the stock market as well as the housing market.
If you need help with a mortgage check out http://www.thebriteway.com/.
Have a great Tuesday!
Subscribe to:
Posts (Atom)
