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Special OriginationPro Marketing System Are You Ready For The Purchase Market? Annual Subscription Discounted 50% From $40 Monthly Price.. to $240 Per Year Use coupon code AnnualSpecialOP To Get The Discount Special Ends Friday Order Here Only one system was designed by someone who sat inside a real estate office and originated loans--over 550 loans (95% purchase) in his FIRST 18 months in the industry. This system is designed to deliver value to Realtors. ⇒Personalized weekly email newsletters; ⇒Library of real estate & finance articles; ⇒Library of personalized sales articles; ⇒Hundreds of personalized emails; ⇒Weekly personalized mobile alerts; ⇒Print newsletters, flyers and more; ⇒Certified Mortgage Advisor webinars--including webinars for your Realtors; ⇒Free downloads such as the Book of Home Finance, seminars, First Time Buyer Marketing Kit and more Bonuses Include The Complete Mortgage Marketing Kit --a $300 Value. Order Here *********************************** Don't Throw Prospects Away With rates rising, you must close every prospect. A compliant credit repair company you can rely upon for advice and service -- Credit Repair Resources was voted the best small credit repair company in America! Get your prospects qualified with the best service available. Credit Repair Resources Chad Kusner 888.927.7760 chad@crr760.com CRR Site August 27, 2013 ⇒ HUD: Reverse Changes Coming Quickly ⇒ FHA Issues Letters Changing Credit Standards ⇒ "Relaxed" QM Rule Due Out Shortly ⇒ Americans Fail Credit Score Survey ⇒ Good News From Europe Europe Rises From Recession Many have wondered why interest rates have risen so sharply this year without the economy showing significant enough strength to heat up inflationary pressures. Yes, the threat of the Federal Reserve decreasing stimulus by lowering their purchases of Treasuries and Mortgage Backed Securities hovers over the markets. Yet, the Fed would not be considering lessening stimulus if they were not more confident about the economy. One must remember that these extraordinary measures were put in place to keep us out of a second recession as the world-wide economy was slowing while we were struggling to come back from our deep recession. How many times did we hear that Europe's recession and fiscal crisis could drag us back into recession? In the past we asked the question -- will Europe pull us back into recession or will we lead Europe out of recession? We surmised that if the real estate markets in the U.S. continued their recovery, then it was more likely that we would help lift Europe up. While we can't say there was a direct relationship, the news released recently that the Eurozone had a positive quarter of growth bodes well for this scenario as well. A 0.3% growth rate for the 17-nation area is nothing to write home about, but it is progress. One should remember that the central banks in Europe have been applying their own brand of low interest rate stimulus. The fact is that Europe is not out of the woods and we are a long way from a normal recovery. However, the easing of Europe's recession weakens another threat to our economy. The Fed's reaction to lessen stimulus is a normal reaction to the lessening of threats. We are still a long way from ending all stimulus activity from the Fed but we seem to be on the doorstep of the first move. Rates trended up during the past week. Freddie Mac announced that for the week ending August 22, 30-year fixed rates rose to 4.58% from 4.40% the week before. The average for 15-year loans was up to 3.60%. Adjustable rates were mixed, with the average for one-year adjustables remaining at 2.67% and five-year adjustables decreasing to 3.21%. A year ago 30-year fixed rates were at 3.66%. Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac -- "Fixed rates continued to follow bond yields higher leading up to the August 21st release of the Federal Reserve monetary policy committee's minutes for July. In its July 30th and 31st meetings, the committee members were broadly comfortable with a plan to start reducing its bond purchases later this year, although a few emphasized the importance of being patient. Meeting participants acknowledged mortgage rate increases might restrain housing market activity, but several members expressed confidence the housing recovery would be resilient in the face of higher rates. In fact, existing home sales increased in July to the strongest pace since November 2009 and homebuilder confidence in August rose to its highest reading since November 2005. Both increases occurred after rates had risen from their spring-time lows. Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes. Current Indices For Adjustable Rate Mortgages Updated August 23, 2013 Index Aug 22 July 6-month Treasury Security 0.06% 0.07% 1-year Treasury Security 0.14% 0.12% 3-year Treasury Security 0.82% 0.64% 5-year Treasury Security 1.71% 1.40% 10-year Treasury Security 2.90% 2.58% 12-month LIBOR 0.684% (July) 12-month MTA 0.153% (July) 11th District Cost of Funds 0.954% (June) Prime Rate 3.250% The Ask The Expert Column is sponsored by NACSO. NACSO –- National Association of Credit Services Organizations -- advocates for strong industry standards, consumer protection, and ethical business practices for the credit repair industry. For more information of NACSO's Standards of Excellence and NACSO membership, Click Here. To read the latest blog article on NACSO's site, Why Disputing Credit Report Errors The Way The Experts Recommend Could Hurt, Not Help, Click Here I know that you sell newsletters for us to send to our clients. My question is--how often should I send newsletters? Right now I mail newsletters one time per quarter, but I feel that is not enough. Mark from Colorado As you can guess, we get the question frequently. There is not one canned answer to this question and it will take me at least two weeks to get my two cents in. The variables will include the size of the database, to whom you are sending, how you are sending and the content of the newsletter. Let me address the first issue--content. If your newsletter is "fluff"--recipes or handy homeowner hints-it may be interesting in some, but most will trash and it will not be considered much value. Therefore you should send more infrequently (quarterly or monthly) and not include high-level professionals such as your top referral sources. It is here that you need to decide whether you want to appear as a financial professional such as a CPA or an "ordinary" sales person selling consumer products. On the other hand, if your newsletter contains current and relevant news -- in other words, it is a newsletter -- then you can send more frequently. For years our subscribers have been emailing our real estate report weekly. Not only is the news current--but the topic aligns with news of interest to clients and referral sources. This topic is real estate and not home loans or the secondary markets. Information on home loans is included only where deemed relevant to real estate. Of course, mailing to a large database weekly is expensive and that is why email newsletters can be sent out more frequently. You can mail monthly and quarterly to those who opt out of emails and to the higher priority members of your sphere. That is why we provide both email and mail newsletters. Next week we will talk about targets as well. Dave Want to view examples of our newsletters and other marketing materials? Click Here for free samples. Do you have a reaction to this commentary or another question you would like answered? Email us at success@hershmangroup.com. Breaking News: In Mortgagee Letter 2013-25, the Department of Housing and Urban Development said that while it doesn't require unpaid collection accounts to be paid off in order to obtain FHA loan approval, it does require that lenders consider how a creditor's efforts to collect the account can impact the borrower's ability to repay the loan. When unpaid collection accounts have an aggregate balance of at least $2,000, the lender needs to factor in monthly payments of 5 percent of the balance for the account into the debt-to-income ratio. If payment arrangements were made with the creditor, then that payment must be used. Collection accounts for non-purchasing spouses need to also be considered in community property states. Nothing needs to be done if the aggregate balance is under $2,000. In addition, medical accounts are excluded from the requirement. Impacted loans are those that have case numbers assigned on or after Oct. 15. Non-credit qualifying streamline refinances and home-equity conversion loans are excluded from the requirement. HUD said it will integrate the changes into it its FHA online handbooks and TOTAL Scorecard Guide. On disputed accounts, manual underwriting is required when the aggregate amount is at least $1,000. Mortgagee Letter 2013-24 said that lenders must analyze whether collection accounts or judgments were a result of disregard for financial obligations, an inability to manage debt or extenuating circumstances. In any event, the borrower needs to write an explanation and provide supporting documentation for each account. While applications that receive an "accept/approve" from the TOTAL Mortgage Scorecard require no letter or supporting documentation, "refer" responses require manual underwriting. Judgments need to be paid in full prior to closing unless a payment arrangement has been made with the creditor. This applies to non-purchasing spouses with outstanding judgments. Source: Mortgage Daily President Obama signed the Reverse Mortgage Stabilization bill (H.R. 2167) on August 9 and now it is up to HUD to implement the changes which will significantly revamp the FHA Home Equity Conversion Mortgage program. The bill, co-sponsored by Reps. Denny Heck, D-Wash., and Michael Fitzpatrick, R-Pa., gives the Federal Housing Administration new powers to regulate its troubled HECM program via mortgagee letters. H.R. 2167 also requires lenders to conduct financial assessments of HECM applicants for the first time. It allows FHA to set limits on the first draw a senior can take on a HECM loan and require escrow accounts or set-asides for property taxes and homeowners insurance, if necessary. Ideally, Department of Housing and Urban Development officials want to implement the changes by Oct. 1, the start of the government’s new fiscal year. “But there are a number of steps HUD needs to take first before the industry can start preparing for the changes,” said Peter Bell. The president of the National Reverse Mortgage Lenders Association noted that HUD has to update the language in its model documents, which lenders use in their loan documents. HUD has to update the counseling protocol and see that counselors are retrained. And they have to update their management information systems. Reserve mortgage lenders have to update their systems and their marketing literature. “There is a lot of work that needs to be done by Oct. 1,” Bell said. Source: National Mortgage News MGIC (MTG) made several changes to its underwriting guidelines in an effort to streamline the mortgage insurance (MI) application process. The new MGIC Go! Guidelines apply to both primary residences and second home loans that receive and are processed according to DU Approve/Eligible or LP Accept/Eligible response and require three overlays. Prior to the changes, MGIC had a couple of FICO overlays. An LTV of 97% required a 680 or higher FICO; and those with an LTV of 95% or below required a minimum credit score of 660. After the changes, there is now a maximum LTV/CLTV of 97%/105% and a minimum credit score of 620 and maximum cash out of $150,000. Previously, MGIC had separate overlays for primary residences vs. second homes; now they are the same. Additional overlays used to be required if a person was using gift funds or had a DTI of 41% or lower. Now the company allows the LO to follow their Findings/Feedback for source of funds and borrowers own fund requirements. Source: HousingWire A new version of a rule requiring lenders to keep a stake in risky home loans that they securitize will be proposed by U.S. regulators in the last week of August, according to two people familiar with the matter. The 500-page draft regulation written by a panel of six agencies will replace a more stringent proposal for the Qualified Residential Mortgage rule, said the people, who asked not to be identified because the plan isn’t public. The first version drew protests from housing industry participants and consumer groups when it was released in 2011. The plan will require banks to retain a slice of home loans when borrowers are spending more than 43 percent of their monthly income on all of their debt. The earlier version would have required banks to keep a stake in loans when borrowers were spending more than 36 percent of their income on all loan payments and in loans with a down payment of less than 20 percent. The rule will carve out loans backed by Fannie Mae and Freddie Mac, one of the people said. The agencies will seek public comment before each holds a vote on the final rule. The agencies involved in the rulemaking are the Federal Reserve, Federal Deposit Insurance Corp., Department of Housing and Urban Development, Federal Housing Finance Agency, Office of the Comptroller of the Currency, and Securities and Exchange Commission. Source: Bloomberg Nearly two-fifths of adult Americans incorrectly answered wide-ranging questions about credit scores, the Consumer Federation of America reported. The consumer survey by CFA and VantageScore Solutions said 42 percent of respondents did not know that residential home lenders use credit scores in decisions about credit availability and pricing; 40 percent said they did not know credit card issuers used credit scores for the same purpose. Additionally, the survey said large percentages of respondents incorrectly believed that age (43 percent) and marital status (40 percent) are used in calculating credit scores. Between one-quarter and one-third do not know when lenders are required to inform borrowers of the credit score used in their lending decision--after consumers apply for a home loan (27 percent), when they are turned down for a loan (24 percent) and when they don’t receive the best price or other terms (35 percent). “Credit scores have become so influential in the lives of most consumers that tens of millions are severely disadvantaged by their lack of knowledge about these scores,” said CFA Executive Director Stephen Brobeck. “Low credit scores will often cost car buyers more than $5,000 in additional finance charges and cost home purchasers tens of thousands of dollars in additional home loan costs. And low scores are likely to limit consumer access to, and increase the cost of, services such as cell phone service, electric service, and rental housing.” The survey also said between one-third and two-fifths of respondents said they did not know that the credit scores of co-signers of a student loan are affected by that loan--improving if payments are made on time (38 percent) and declining with one late payment (31 percent). More than one quarter said they did not know key ways to raise or maintain their scores--keeping credit card balances low (26 percent) and not applying for several cards at the same time (28 percent). More than one-third (36 percent) incorrectly believed that credit repair agencies are always or usually helpful in correcting credit report errors and improving scores. "Misperceptions about credit scores are extremely concerning,” said Barrett Burns, president and CEO of VantageScore. “People who fail to understand exactly what can impact their score have little incentive to manage the real things that truly do make a difference; such things as paying bills on time, keeping credit card balances low and not taking out unnecessary loans." Source: Mortgage Bankers Association