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We are your local refinance specialists and will work hard to search and find the best rate from our network of wholesale lenders and banks to achieve your family’s needs and goals, every time.

Prequalification Is Critical	Reverse Mortgage	Loan Modifications
Today’s Mortgage Market	Fannie Mae Refinance	Short Sale
Senior Citizens, HECM	FHA Streamline Refinance	Foreclosure Info

In today’s mortgage market obtaining a Pre-Approval is of utmost importance before you start your home shopping process. Most Realtors require a Pre-Approval letter from a mortgage broker or lender before they will schedule any viewing appointments.

Obtaining a Pre-Approval and Pre-Approval letter is a fairly easy process. We recommend to first gather all the necessary requirements for our lenders and/or banks to render an accurate decision. But if you would like to know today, if you qualify for a loan, call us now to conduct a short interview with our licensed Broker at 949-378-6550.

Today’s mortgage market is a lot like the turbulent times of the Wild West and that is no exaggeration! The sub prime (less than best credit) market is gone and so are stated income loans. Jumbo loan programs are not yet beneficial for homeowners to refinance with lender’s high interest rates still being offered. Home Values have diminished further eroding home equity and opportunities to refinance. But new programs have been launched to come to the rescue! Lenders are extremely selective on the loans they will fund so it is important to collect everything required up front. The old question often asked to brokers and lenders during the boom times was, “what’s your rate?!” Now the question is, “do you qualify while showing proof of income?”

Now the good news…there are great mortgage opportunities for homeowners or potential homeowners to consider!

Short Sales-Make a clean break away from your unaffordable mortgage for free! 949-378-6550

Reverse Mortgages for Seniors - FHA's Home Equity Conversion Mortgage (HECM)

Looking for housing options for yourself, an aging parent, relative, or friend? A reverse mortgage may be right for your situation. [Photo: A senior couple]

The loan, commonly known as Home Equity Conversion Mortgage or HECM, is originated by a lending institution such as a mortgage lender, bank, credit union or savings and loan association. Senior homeowners age 62 and older can use FHA-insured reverse mortgages to convert the equity in their homes into monthly streams of income and/or a line of credit to be repaid when they no longer occupy the homes. Homeowners are required to receive consumer education and counseling by a HUD-Approved counselor so they can be sure this program meets their needs.

HECM counselors will discuss program eligibility, financial implications and alternatives to obtaining a HECM plus provisions for the mortgage becoming due and payable. Upon the completion of HECM counseling, you should be able to make an independent, informed decision of whether this product will meet your needs.

How FHA's Reverse Mortgage Program Works

Homeowners 62 and older who have paid off their mortgages or have only small mortgage balances remaining, and are currently living in the home, are eligible to participate in FHA's reverse mortgage program. The program allows homeowners to borrow against the equity in their homes.

Homeowners whose circumstances change may be able to restructure their payment options for a nominal fee of $20. Please consult your lender for more information.

Unlike ordinary home equity loans, an FHA-insured reverse mortgage does not require repayment as long as the home is the borrower's principal residence. Lenders recover principal, plus interest, when the home is sold. If any home equity remains after sale, the remaining value of the home goes to the homeowner, estate or heirs. You can never owe more than your home's value when sold.

If the sales proceeds are insufficient to pay the amount owed, HUD will pay the lender the amount of the shortfall. The Federal Housing Administration (FHA) collects an insurance premium from all borrowers to provide this coverage.

The amount you can borrow depends on your age, the current interest rate, other loan fees, and the appraised value of your home or FHA's HECM mortgage limit for your area, whichever is less. Generally, the more valuable your home is, the older you are, and the lower the interest, the more you can borrow. If there is more than one owner, the age of the youngest owner is used to determine the amount you can borrow. For an estimate of HECM cash benefits based on your age, home value, and current interest rate, go to the online calculator.

For example, based on a loan with interest rates of approximately 9%, and a home qualifying for $100,000, a 65-year-old could borrow up to 34% of the home's value; a 75-year-old could borrow up to 47% of the home's value; and, an 85-year-old could borrow up to 64% of the home's value. The percentages do not include closing costs because these charges vary.

There are no asset or income limitations in order for you to be eligible for a HECM. In addition, there is no limit on the value of homes qualifying for a HECM. The value of your home will be determined by an appraisal. However, the amount that you may borrow is derived from the lower of the appraised value or the FHA HECM mortgage limit for your area. Under the American Recovery and Reinvestment Act of 2009 (ARRA), the national FHA loan limit for HECM increased from $417,000 to $625,500 (from 100 percent to 150 percent of the conforming limit). The change in loan limits is applicable to all FHA-insured mortgage loans originated until December 31, 2009. You are charged an upfront insurance premium of 2 percent of the maximum claim amount that may be borrowed plus a 0.5 percent annual premium.

You can pay for most of the costs of a HECM by financing them and having them paid from the proceeds of the loan. Financing the costs means that you do not have to pay for them out of your pocket. On the other hand, financing the costs reduces the net loan amount available to you.

The HECM loan includes several fees, including an origination fee, closing costs, mortgage insurance premium, interest and servicing fees.

You will pay an origination fee to compensate the lender for processing your HECM loan. A lender can charge a HECM origination fee up to $2,500 if your home is valued at less than $125,000. If your home is valued at more than $125,000 lenders can charge 2% of the first $200,000 of your home's value plus 1% of the amount over $200,000. HECM origination fees are capped at $6,000.

Closing costs from third parties can include an appraisal, title search and insurance, surveys, inspections, recording fees, mortgage taxes, credit checks and other fees.

You will incur a cost for HECM insurance. You can finance the mortgage insurance premium (MIP) as part of your loan. You will be charged an upfront MIP at closing which will be 2% of the lesser of your home's value or the FHA HECM mortgage limit for your area. You will also be charged a monthly MIP that equals 0.5% of the mortgage balance.

The HECM insurance guarantees that you will receive expected loan advances and that you will not have to repay the loan for as long as you live in your home. The insurance also guarantees that, if you or your heirs sell your home to repay the loan, your total debt can never be greater than the value of your home.

Lenders or their agents provide servicing throughout the life of the HECM. Servicing includes sending you account statements, disbursing loan proceeds and making certain that you keep up with loan requirements such as paying taxes and insurance. HECM lenders may charge a monthly servicing fee of no more than $30 if the loan has an annually adjusting interest rate and $35 if the interest rate adjusts monthly. At loan origination, HECM lenders set aside the servicing fee and deduct the fee from your available funds. Each month the monthly servicing fee is added to your loan balance.

HECM borrowers can choose an adjustable interest rate or a fixed rate. If you choose an adjustable interest rate, you may choose to have the interest rate adjust monthly or annually. Lenders may not adjust annually adjusted HECMs by more than 2 percentage points per year and not by more than 5 total percentage points over the life of the loan. FHA does not require interest rate caps on monthly adjusted HECMs.

A HECM loan must be repaid in full when you die or sell the home. The loan also becomes due and payable if:

Need answers to additional questions about FHA-insured Reverse Mortgages (HECMs)? Call today 949-378-6550.

The Making Home Affordable program announced by the Department of the Treasury on March 4, 2009, includes a new initiative – Home Affordable Refinance – to provide refinance opportunities to borrowers with mortgages held or guaranteed by Fannie Mae. This initiative is for borrowers who have demonstrated an acceptable payment history on their mortgage but due to a decline in home prices or where mortgage insurance (MI) is not available, have been unable to refinance to obtain a lower payment or move to a more stable product. The Federal Housing Finance Agency (FHFA) has also provided greater flexibility to Fannie Mae to implement this refinance initiative.

Fannie Mae is announcing new refinance options to achieve the goals set out for this initiative and to incorporate additional flexibilities provided by FHFA. Importantly, the maximum loan-to-value (LTV) ratio for refinance mortgage loans under this initiative will be expanded to 105 percent, and MI requirements will be significantly relaxed to assist borrowers who have experienced home price declines. Call us today to see if you can refinance! 949-378-6550.

FHA has permitted streamline refinances on insured mortgages since the early 1980's. The "streamline" refers only to the amount of documentation and underwriting that needs to be performed by the lender, and does not mean that there are no costs involved in the transaction. The basic requirements of a streamline refinance are:

Lenders may offer streamline refinances in several ways. Some lenders offer "no cost" refinances (actually, no out-of-pocket expenses to the borrower) by charging a higher rate of interest on the new loan than if the borrower financed or paid the closing costs in cash. From this premium, the lender pays any closing costs that are incurred on the transaction.

Lenders may offer streamline refinances and include the closing costs into the new mortgage amount. This can only be done if there is sufficient equity in the property, as determined by an appraisal. Streamline refinances can also be done without appraisals, but the new loan amount cannot exceed the original loan amount. Investment properties (properties in which the borrower does not reside in as his or her principal residence) may only be refinanced without an appraisal.

On May 20, 2009, the President signed the “Helping Families Save Their Homes Act of 2009.” This new law provides the Federal Housing Administration (FHA) with additional loss mitigation authority to assist FHA mortgagors under the Making Home Affordable Program (MHA). The MHA Program is designed to help homeowners retain their homes and to prevent the destructive impact of foreclosures on families and communities.

One key component of MHA provides homeowners the opportunity to reduce their mortgage payments by the use of a loan modification through the Home Affordable Modification Program. When initially introduced to the public, MHA excluded FHA insured mortgages, stating that FHA would develop its own standalone program. This Mortgagee Letter announces a new FHA Loss Mitigation option, the FHA-Home Affordable Modification Program (FHA-HAMP). FHA-HAMP will provide homeowners in default a greater opportunity to reduce their mortgage payments to a sustainable level. This Mortgagee Letter is effective August 15, 2009.

The new FHA-HAMP authority will allow the use of a partial claim up to 30 percent of the unpaid principal balance as of the date of default combined with a loan modification. The objective of FHA-HAMP is to assist FHA mortgagors who are in default to modify their mortgage to an affordable payment. According to Mortgagee Letter 2000-05 and subsequent guidance, disposition options (pre-foreclosure sales and deeds-in lieu of foreclosure) are available immediately upon default, if the cause of the default is incurable, i.e. the borrower has no realistic opportunity to replace the lost income or reduce expenses sufficiently to meet the mortgage obligation.

To confirm if the mortgagor is capable of making the new FHA-HAMP payment, the mortgagor must successfully complete a trial payment plan. The trial payment plan shall be for a three month period and the mortgagor must make each scheduled payment on time. The mortgagor’s monthly payment required during the trial payment plan must be the amount of the future modified mortgage payment. The Mortgagee must service the mortgage during the trial period in the same manner as it would service a mortgage in forbearance. If the mortgagor does not successfully complete the trial payment plan by making the three payments on time, the mortgagor is no longer eligible for FHA-HAMP. Prior to proceeding to foreclosure, the Mortgagee must re-examine and re-evaluate the borrower’s financial condition and confirm that none of FHA’s other Loss Mitigation options could assist the mortgagor.

The attachment to this Mortgage Letter supplements program guidelines for FHA-HAMP, including a requirement that the servicer obtain an executed Hardship Affidavit (available at https://www.hmpadmin.com/portal/docs/mod_docs/hamphardshipaffidavit.pdf) from every mortgagor and co-mortgagor seeking an FHA-HAMP. FHA-HAMP is a permanent addition to HUD’s Loss Mitigation Program as of the date of this Mortgagee Letter.

To be eligible under FHA-HAMP, the front end debt to income ratio must be as close as possible, but not less than, 31 percent. This ratio is defined as the total monthly mortgage payment (PITI) for the modified mortgage divided by the mortgagor’s gross monthly income (the “Front End Ratio”). The back end debt to income ratio must not exceed 55 percent and is defined as the total monthly mortgage payment plus all recurring monthly debt divided by the mortgagor’s gross monthly income (the “Back End Ratio”). Please refer to the sections in the Attachment regarding Underwriting – Front End and Back End Debt to Income Ratios.

The maximum partial claim amount under FHA-HAMP consists of the sum of (i) arrearages, (ii) legal fees and foreclosure costs related to a canceled foreclosure action and (iii) principal reduction. Arrearages that may be included in the partial claim shall not exceed 12 months of PITI. The maximum partial claim amount under FHA-HAMP is 30 percent of the outstanding principal balance as of the date of default. The principal deferment on the modified mortgage is determined by multiplying the outstanding principal balance by 30 percent and then reducing that amount by arrearages advanced to cure the default for up to 12 months PITI, and any foreclosure costs incurred to that point subject to the requirements provided in Mortgagee Letter 2008-21. The principal deferment amount for a specific case shall be limited to such an amount that will bring the mortgagor(s) total monthly mortgage payment to 31 percent of gross monthly income.

Mortgagor had a reduction of income and is delinquent 3 full mortgage payments. The unpaid principal balance on the mortgage on the date of default is $150,000 and the monthly payment is $1,220 (consisting of P&I of $920 and escrows, including MIP, of $300). The financial analysis reveals that the mortgagor’s gross monthly income is $3,500 and the total monthly other recurring debt payments are $800.

In order to fulfill the 31% Front End Ratio requirement, the mortgagor(s) total monthly mortgage payment would have to be reduced to $1,085 ($3,500 x 31%). Therefore, P&I would have to be reduced to $785 ($1,085 total monthly mortgage payment less $300 escrow and MIP). Assuming that the loan modification will have an interest rate of 6% and a P&I of $785, the new mortgage amount would have to be $130,931, resulting in a principal reduction of $19,069 ($150,000 unpaid principal balance less $130,931). In this example, the mortgagor’s Back End ratio is 53.9% ($1,885/$3,500), which satisfies the 55% Back End Ratio limitation.

In this example, the maximum principal deferment is $41,340 (30% of $150,000, less the $3,660 delinquency, or $45,000 - $3,660). However, based on their gross income, mortgagor is eligible only for a principal deferment of $19,069 plus $3,660 arrearages (which would include any foreclosure costs incurred to that point, in accord with Mortgagee Letter 2008-21) for the total Partial Claim of $22,729.

FHA-HAMP can be utilized only if the mortgagor(s) does not qualify for current loss mitigation home retention options (priority order FHA Special Forbearance, Loan Modification and Partial Claim) under existing guidelines (ML 2008-21, 2003-19, 2002-17, 2000-05). To qualify for the FHA-HAMP program, Mortgagees must evaluate the defaulted mortgage for loss mitigation actions using the aforementioned priority order. According to Mortgagee Letter 2000-05 and subsequent guidance, disposition options (pre-foreclosure sales and deeds-in lieu of foreclosure) are available immediately upon default, if the cause of the default is incurable, i.e. the borrower has no realistic opportunity to replace the lost income or reduce expenses sufficiently to meet the mortgage obligation.

If the mortgagor does not successfully execute the loan modification, the mortgagor is no longer eligible for FHA-HAMP. In such cases, per 24 CFR 203.355, the Mortgagee must re-evaluate the mortgagor’s eligibility for the other appropriate loss mitigation actions prior to commencing or continuing a foreclosure.

Mortgagees that utilize FHA-HAMP are eligible to receive incentive payments. Mortgagees utilizing this initiative will be allowed to first file for a partial claim (to bring the loan current and defer principal where appropriate), followed by a loan modification claim (claim type 32). Under FHA-HAMP, the Mortgagee may receive an incentive fee of up to $1,250. This total includes $500 for the partial claim and $750 for the loan modification. Mortgagees may also claim up to $250 for reimbursement for a title search and/or recording fees.

Mortgagees must file a claim for insurance benefits for the partial claim within the 60-day timeframe stated in ML 2003-19 to receive incentive fees for the FHA-HAMP loss mitigation action. Any previous outstanding partial claim(s) must be subordinated and the mortgage company must provide HUD’s Secretary-Held servicing contractor (see ‘Remittance’ below) with a subordination agreement to request subordination.

FHA will monitor Mortgagees for compliance with the terms of this Mortgagee Letter and will take administrative actions, including sanctions and penalties, against all parties for non-compliance.

Please note that all provisions described in the aforementioned existing guidelines, such as Repayment Terms, Option Failure and Disclosures apply also, except as specifically changed under FHA-HAMP.

Mortgagees must forward all required documentation, including subordination requests, and advise all parties to send any payments for the Partial Claims to HUD’s Secretary-Held Assets Servicing Contractor which is currently located at:

Current information about the Secretary-Held Assets Servicing Contractor is located at:

Any questions regarding this Mortgagee Letter may be directed to HUD’s National Servicing Center (NSC) at 888-297-8685 or hsg-lossmit@hud.gov. Persons with hearing or speech impairments may reach this number via TDD/TTY by calling 1-877-TDD-2HUD (1-877-833-2483).

A homeowner who is upside down or unable to refinance, may want to look into a loan modification. A loan modification is any change in loan terms; a loan workout with the lender through negotiations. Such loan changes of allowing the borrower new terms are included but not limited to: Reducing the rate slightly or significantly, allowing missed payments to be waived, adding missed payments to the loan balance, principle reduction, locking the rate from adjustable to a fixed rate and finally, a graduated rate or payment plan. (Example of a graduated rate plan: Fixed rate of 3% for three years, 4% fixed for the fourth year and 5% fixed for years five through thirty.) Call us today to see what your specific lender may do for you! 949-378-6550

FHA will monitor Mortgagees for compliance with the terms of this Mortgagee Letter and will take administrative actions, including sanctions and penalties, against all parties for non-compliance.

Please note that all provisions described in the aforementioned existing guidelines, such as Repayment Terms, Option Failure and Disclosures apply also, except as specifically changed under FHA-HAMP.

Current information about the Secretary-Held Assets Servicing Contractor is located at:

A short sale is defined as an over encumbered property whereby the homeowner is usually is serious default and bank has the decision to either foreclose against the homeowner or settle for less than what is owed with a new buyer. A great time to make this important decision to short sale the house is if the lender has issued a Notice of Default. The Notice of Default starts the clock of the intent to foreclose 90-120 days. A short sale is less detrimental than a foreclosure and may allow the homeowner a clean break from the financial and emotional stress of a impending foreclosure. We have an excellent short sale staff to consult with about your situation today. 949-378-6550.

If you are struggling to make your mortgage payment, do not worry. There are several options available to you at this time. Lenders are willing to make accommodations to help your situation. Below is a list of Pre-Foreclosure, realty and mortgage options to consider for relief:

Loan Modification-A homeowner who is upside down or unable to refinance, may want to look into a loan modification. A loan modification is any change in loan terms; a loan workout with the lender through negotiations. Such loan changes of allowing the borrower new terms are included but not limited to: Reducing the rate slightly or significantly, allowing missed payments to be waived, adding missed payments to the loan balance, principle reduction, locking the rate from adjustable to a fixed rate and finally, a graduated rate or payment plan. (Example of a graduated rate plan: Fixed rate of 3% for three years, 4% fixed for the fourth year and 5% fixed for years five through thirty.) Call us today to see what your specific lender may do for you! 949-378-6550.

Short Sale- A short sale is defined as an over encumbered property whereby the homeowner is usually is serious default and bank has the decision to either foreclose against the homeowner or settle for less than what is owed with a new buyer. A great time to make this important decision to short sale the house is if the lender has issued a Notice of Default. The Notice of Default starts the clock of the intent to foreclose 90-120 days. A short sale is less detrimental than a foreclosure and may allow the homeowner a clean break from the financial and emotional stress of a impending foreclosure. We have an excellent short sale staff to consult with about your situation today. 949-378-6550.

Refinance- *Borrower Must Be Current on the Mortgage to Qualify for a Refinance.

Bankruptcy-Is a court proceeding for people who are unable to pay their debts to settle those debts with their creditors under a judges supervision. For a homeowner facing foreclosure, the filing of a bankruptcy case provides an “automatic stay” which temporarily stops the foreclosure proceedings. Under a Chapter 7 bankruptcy case, a lender generally requests for the federal bankruptcy court to lift the automatic stay to allow the lender to resume its foreclosure proceedings under California law. Under a Chapter 13 case, the debtor can keep the property by paying the amount overdue over a three-to-five year plan (along with regular mortgage payments.) Bankruptcy and loan modification/short sales usually don’t mix. If the homeowner is waiting on a short sale approval and files bankruptcy, the lender typically forwards the file to its legal department. The homeowner’s legal stay generally prevents the lender from negotiating a short sale with the homeowner. The homeowner should consult these options with a qualified bankruptcy attorney. Call us today for our bankruptcy attorney we recommend. 949-378-6550.

Deed in Lieu-Is a voluntary agreement between the a borrower and lender for the borrower to surrender the title to the property in full satisfaction of the debt. A lender may agree to a deed in lieu of foreclosure to avoid the costs of foreclosure. The credit and tax consequences of a deed in lieu of foreclosure are similar to those of a foreclosure.

Foreclosure Timeline-You may be upside down and/or lost your job and can’t make the payments. You must decide if you want to keep the house or start over and start fresh. The approximate minimum time frames for the foreclosure of owner-occupied loans made from 2003 to 2007 are as follows:

1. Pre-Foreclosure Period-A lender may initiate the foreclosure process when a borrower defaults on a loan, such as missed payments. Lenders are generally waiting a few months before starting the official foreclosure process.

2. Day 1-Lender Contacting Borrower-The lender must contact the homeowner to access the financial condition of the homeowner and explore options.

3. Day 31-Filing of the Notice of Default-The lender has 30 days to file a Notice of Default after speaking to the homeowner to explore options.

4. Day 121-Filing of the Notice of Trustee’s Sale-Three months after filing a Notice of Default, the lender record a notice of trustee’s sale setting forth the time, date, and place of the upcoming trustee’s sale. Because of the gravity of the notice of trustee sale it must be widely disclosed and published for three weeks straight in a newspaper of general circulation.

5. Day 145-Deadline to Cure Default-Up to five business days before the trustee sale the borrower can reinstate the loan by curing the default amount.

6. Day 152-The Trustee Sale-At the trustee sale the property is sold through a public auction to the highest bidder. Homeowner still has the right to redeem property by paying the full amount

Other Alternatives-A homeowner facing an impending foreclosure may have other alternatives to consider. There are choices during these stressful times. Clear your worries and focus on the outcome desired and the action necessary to resolve.

Second Job-An extra job may make up the shortage in funds needed or after a new payment is negotiated through a loan modification!

Rent a Room-Can you rent a room for extra money in the interim. May help with the lender negotiations and income requirements!

Seek an injunction-Maybe consult to seek legal action against the lender as circumstances warrant.

Call us and tell us your story! We can help walk you through all this! 949-378-6550.