October 28, 2010

Meet My Newest Assistant, Bentley!

Last weekend my family and I picked up this little guy from the Humane Society. My daughter named him Bentley which suits him well. Bentley is 14 weeks old and was brought to Maryland from Kentucky where he and his brothers and sisters were going to be euthanized because of the lack of funding and support in these shelters. There are so many animals that need rescued in this country, why someone would rather pay for a dog that comes with a fancy pedigree rather than save a dog from an early demise is beyond me. The best pets I have ever had were rescues because they actually appreciate the life and love you give them and in return they work hard to please and typically are very affectionate. If you are looking to bring home a pet, PLEASE at the very least visit your local Humane Society or animal shelter and just see if you don't fall in love with a pet that will be loyal and grateful to you for years to come. Another great resource for finding adoptable pets that desperately need homes is http://www.petfinder.com/. You can define your search criteria by breed, gender, age, and location. Check it out, you will be glad you did, I know Bentley is!

October 19, 2010

6 Questions to Ask Before You Refinance

To refinance or not to refinance...That is the question?

Before taking the leap and opting to refinance, homeowners should ask themselves the following six questions.

Do I have equity in my home?

Homeowners need to have at least 20 percent equity in their home to qualify for a new loan without paying

Today, many homeowners are underwater -- meaning they owe more on their mortgages than the house is worth. However, being underwater or having little equity does not necessarily rule out a refi.

"Homeowners should still apply for a refinance even if they have low equity, because there are some Fannie Mae and Freddie Mac programs and FHA loans that may accept them," Hsieh says. "The best way to find out if you fit into a program is to go to a lender."

Roy Meshel, district vice president for W.J. Bradley Mortgage in Phoenix, recommends homeowners refinance quickly in case the housing slump deepens, causing values to depreciate even more.

Patrick Cunningham, vice president of Home Savings & Trust Mortgage based in Fairfax, Va., recommends an increasingly popular approach -- the so-called "cash-in" refinance.

"Some people are opting to bring cash to the settlement in order to pay down their loan balance to qualify for a refinance," he says.

Do I have good enough credit?

Borrower credit scores play a big role in securing a good mortgage rate. In fact, you'll need a good credit score to qualify for any type of mortgage at all.

Mortgage rates operate on a sliding scale, with the lowest rates going to applicants with the highest credit scores of 720 or higher.
Borrowers with scores below 620 will have trouble qualifying for a mortgage at any rate.

What are my financial goals?

Many homeowners refinance to lower their monthly payments. A mortgage calculator can give borrowers a sense of what their new payment would be after a refi.

Others choose a shorter-term loan with higher monthly payments so they can reduce overall interest payments and own their homes faster.

"Some people are restructuring their loans to a 20-, 15- or 10-year mortgage, which works well for people with plenty of disposable income," Cunningham says. "But I worry that people are too focused on paying off their mortgage and not integrating this decision with their overall financial plan."

Cunningham urges borrowers to make sure they contribute to retirement savings and college savings, pay off high-interest debt, and save six to 12 months of expenses "before opting for a shorter, more expensive mortgage."

Meshel says people should consider whether they want to retire without a mortgage before opting for a new 30-year loan. Those who have employment concerns may want to refinance into the lowest possible payment in case they experience a job loss.

How long do I plan to stay in this home?

Mortgage professionals generally tell borrowers to expect a home refinance to cost 3 percent to 6 percent of the loan amount. A simple calculation shows how long it will take to reach the break-even point when the savings outweigh the costs.

"If the breakeven is at 15 months and you plan to stay in the home for five years or longer, it is probably worth it to refinance," Cunningham says. "But if you plan to move in two years, it may not make sense."

Meshel says long-term homeowners who are close to paying off their mortgages might not want to refinance because of the costs incurred.

What are the terms of my current loan?

Borrowers with adjustable-rate mortgages or interest-only loans should consider the potential benefit of switching to a fixed-rate loan. Hsieh says all borrowers with ARMs should switch to a fixed-rate loan unless they intend to move within one year.

However, Cunningham says some borrowers can benefit by sticking with their current ARM.

"Consumers with a subprime ARM should definitely switch to a new loan," Cunningham says. "But some with conventional ARMs may find that they are in a good loan and that their rates are actually dropping."

While new loans today rarely have a prepayment penalty, many homeowners still have loans with that restriction, which could reduce the financial gain of a refinance, Meshel says.

Do I have a second mortgage or line of credit?

Cunningham says borrowers with a second mortgage will face additional complexity when refinancing.

"Borrowers can either pay off the second loan or combine the two loans into a larger first mortgage," Cunningham says. "Otherwise, the lender holding that second loan must agree to stay in second position behind the lender of the first mortgage, which the lender may or may not be willing to do."

Article written by: Michele Lerner, Bankrate.com

October 15, 2010

What does the foreclosure mess mean to buyers and sellers?

You've probably seen the headlines about the fast-spreading foreclosure mess - moratoriums on home sales, calls for congressional investigations, and state and federal litigation in the wings.

But what could all of this mean to you as a homeowner, buyer or seller? Potentially more than you might assume. It all depends on your situation.

For example, although you might not be delinquent on your mortgage, the bank-owned house down the street that hasn't gone to foreclosure sale - and has been sitting vacant and in disrepair for months - might not be resold for an extended period to new owners who would make needed repairs and capital improvements. If the house becomes a long-term eyesore, it could negatively affect neighborhood property values.

In fact, it's possible that the evicted former owners are hiring a lawyer to look through documents for evidence of irregularities in processing by the bank that could throw the entire foreclosure into question and stall any resale for months.

"The phones are ringing off the hook," said Ronald Scott Kaniuk, a foreclosure and bankruptcy law specialist in Boca Raton, Fla. "People know that the banks haven't been playing fair" on foreclosures and have cut corners through mass "robosignings" of documents rather than proper reviews, he said. The coming tidal wave of private and public litigation against banks could stall foreclosures indefinitely, he said.

The sheer numbers of houses and families potentially affected are huge. According to data researcher RealtyTrac, lenders filed for foreclosure on approximately 339,000 homes nationwide during August alone. During the same month, banks took back about 95,000 homes for eventual resale. Roughly 5 million households are somewhere in the foreclosure process, according to industry estimates; they've received notices of default and are on the conveyor belt to foreclosure and eviction.

Even without mass litigation gumming up past and future foreclosures, the process is often not a speedy one, especially in the 23 states where courts must approve each foreclosure. In the slowest states, the full cycle can take more than 500 days from the first filing to the actual sale.

Based on conversations with legal, banking and real estate experts, here are some of the potential scenarios and issues emerging from the national foreclosure mess. Say you fit into one of these categories:

Recent buyer of a foreclosed home. There's a chance that the bank's foreclosure processing could be found to have been improper or that the bank did not adequately document its legal title to the house. What does this mean for you? The first question to ask is: Did I take out title insurance that protects me? If you financed the purchase, it's virtually certain the mortgage company required at least a lender's policy that covers title issues affecting its collateral. The title insurance underwriter will go to court, if necessary, to defend the lender's interest and compensate it for any legitimate losses. But if you did not take out an owner's policy, or bought for all cash, you could find yourself defending your investment on your own.

Financially distressed homeowner who recently received notice of a foreclosure filing from the bank. What to do? Peter J. Henning, a professor at Wayne State University Law School, says now more than ever it is crucial to ask a lawyer to review all documents you receive. Henning says that banks have been sloppy in their high-volume processing of foreclosures. "They often seem to have sort of a 'good enough for government work' approach," he said, "because they assumed nobody was watching." The foreclosure crisis, which Henning calls "Hydra-headed" in its wide-ranging effects, should force banks to be more careful in foreclosures, he said.

Homeowner is behind on payments but has not received a foreclosure notice. Ira Rheingold, executive director of the National Association of Consumer Advocates, which provides support to foreclosure legal-assistance programs, says this may be a propitious time to demand a loan modification - even a substantial principal reduction - from your loan servicer. The nationwide foreclosure mess "might shake up the banks enough to convince them to finally become real partners" in devising workable solutions for distressed borrowers, "forcing them to deal with the reality they've created."

For their part, some of the country's largest banks insist that their foreclosures have been proper and that foreclosed borrowers typically are severely delinquent. Bank of America says that its average customer who goes to foreclosure has not made mortgage payments for 18 months.

Written by: 
Ken Harney
Friday, October 15, 2010;

October 13, 2010

The Short Sale

A Unique Selling Proposition for Real Estate Agents

While a short sale may be a last resort for many homeowners facing foreclosure, it also represents a great opportunity for potential home buyers and real estate investors. This article is designed to help answer a few basic questions about the substantial risk and reward involved in this extremely complex and often drawn out process.

What is a Short Sale?

A short sale is a legally-binding agreement to allow a home to be sold for less than the amount that is owed. And, while short sales are not by any means common or easy, because of increasing inventory levels and foreclosures in some parts of the country, lenders are much more eager to negotiate with borrowers who are having trouble paying their mortgages. For potential home buyers and real estate investors, a short sale also offers a great opportunity to purchase property at a significant discount.

However, don't expect a lot of help from the lender without first providing a sales contract from a qualified buyer and all the information required by the lender's loss mitigation department.

Of course, lenders are not looking to bail out "flippers" or other borrowers who simply overextended themselves. In most cases, a borrower must have suffered a serious financial hardship that directly caused him or her to default on the mortgage: the loss of a job, a serious illness, or the death of a loved one.

A written declaration and supporting documentation demonstrating financial hardship will definitely be required by the lender. This may include pay stubs, tax returns, and liquid asset statements, among other documentation.

Key Considerations to Keep in Mind

It's important to note that the difference between what is owed on a mortgage and the final amount the lender collects after the costs of the sale, including real estate commissions and possibly other charges don't simply disappear in a short sale. In the past, this deficiency or "canceled mortgage debt" was considered taxable income to the borrower. However, thanks to the Mortgage Forgiveness Act of 2007, the tax burden for qualifying canceled mortgage debt (as high as 35%) for primary residences only has been temporarily waived.  The federal timeline has been extended to 2012 although states are not required to follow it for state income.

If there are multiple liens against the property, all lien holders will have to be involved in the negotiation process, not just the first lien holder. Therefore, communication and patience are essential components of any short sale. This is why an experienced real estate agent and mortgage professional become so valuable to this process.

October 11, 2010

Embrace Open House 2010

The Embrace Family

A great evening with great people!

October 7, 2010

Embrace Home Loans- OPEN HOUSE TONIGHT!!!

Please join us tonight at our Open House, it is shaping up to be a great event and you'll even get a gift bag! Just send me an email and I will add you to our guest list or comment directly on this post. See you there!

October 5, 2010

2010 GCAAR Fest Was a Success!

Embrace Home Loans was a sponsor at the Greater Capital Area Association of REALTORS® and the turn-out was wonderful. It was so great to talk to prospective clients, colleagues, and old friends. I look forward to next year's GCAAR Fest, which should be called the GCAAR "Feast", because the food was abundant and delicious! Great job Embrace team-members for a successful and "fruitful!" day of hard work!

October 4, 2010


Don't miss this year's REALTOR® Fest

October 4, 2010
5701 Marinelli Road
Bethesda, Maryland 20852

Formerly known as the Capital Area Real Estate Summit.

A day of education and networking with dynamic instructors, exhibitors, and relevant courses designed to take your career to the next level! You will receive up to 9 hours of continuing education credits from Maryland, DC, and VA.

Online registration is now closed. You may register onsite Monday.