Home Under Water

Home under water?
The two main servicers of mortgages made some changes regarding refinancing homes that are under water. These new provisions became effective on November 15th.

At 5pm yesterday, both Fannie and Freddie released their "versions" of the Home Affordable Refinance Program.

Here is a small excerpt,

“For loan applications on or after December 1, 2011, eligible loans are those "sold" (not closed) to Fannie and Freddie BEFORE June 1, 2009.”

This could be a great opportunity for clients who intend to remain in their homes and need to take advantage of these lower rates. However, this is not for everyone. Please see the attachment we sent to everyone regarding these refinancing changes. There are some very important details that you need to read.

If you would like more information, please visit my Website HERE.

Am I smarter than you??

Thought this article was worth sharing:


I’m smarter than you are
November 16th, 2011. By Mike Marchev

I could wax eloquent on this subject and have lots of fun doing so.
But in the interest of time–both yours and mine, I will immediately
Address the subject at hand.

I believe I am smarter than you for five very simple reasons:

1. I read a lot. I don’t care what books you read while attending
Harvard or MIT. Or Wellesley or Smith. I was a History Major at UMASS
and for the past 40 years, I have yet to be asked a question about the
Battle of 1812. I do want to know everything I can about people,
sales, marketing, why people think the way they do and how the
different generations differ in thought and practice. The answer to
all these questions come as a result of reading. And I read a lot. Do
You read a lot? Or are you content on staring at your diploma from a
Zillion years ago?

2. I fail a lot. I refuse to stay within my comfort zone and play it
safe. I am constantly trying new things both on and away from the
Internet. I believe that with failure comes learning. I fail a lot. Do
You fail a lot? Do you learn from your failures?

3. I am coachable. Knowing you don’t know it all is key. Being able to
Internalize constructive criticism and learn from other’s experiences
Is a skill worth developing? With being coachable comes the
Willingness to practice. I practice a lot. Do you practice a lot?

4. I listen a lot? Most people simply wait their turn to speak. I
Listen a lot. Do you listen a lot? Do you enter a conversation with?
The understanding that you already know what you know, and that the
Trick is to learn and benefit from what others know. The key is to
Develop the skill of “listening.” Go to school on other people.

5. I laugh a lot. The ability to find the humor in most situations is
A skill that differentiates the true professionals from the wanna-bes.
Humor drives a happy environment. Being confident enough to laugh at
Yourself puts others at ease. I laugh a lot. Do you laugh a lot?

And there you have it. Five reasons why I believe I am smarter than you are.

I read, fail, learn, listen and laugh more than you do. Hence, I in my
World by my definition, I am smarter than you.

But, as in everything I do and everything I say, I may be wrong. In
This case, I truly hope I am wrong. I want to believe that you read,
fail, learn, listen and laugh more than I do. Because if you do, you
are on your way to a super-fine life. Get on track. Then keep on
track. Be smarter than me.
Thanks Bev from J&B Travels www.jandbjourneys.com

Is it time to Refinance

Is It Time to Refinance?
Three Questions to Consider
Leonard Baron, MBA, CPA, and author of Real Estate Ownership, Investment and Due Diligence 101


So you've read that interest rates are near historic lows and you want to figure out if you can refinance. Financing has become significantly harder to do and more expensive in the past few years, thanks to the financial crisis. But refinancing is still possible and may make financial sense.

In this article, we will run through some of the basic issues you should contemplate to help give you a framework for deciding whether to refinance. The best person to help you sort through this framework and help you reach a final decision about when to refinance is your mortgage lending professional. But doing a little homework beforehand will help you ask your mortgage professional the right questions.

Here are three questions to consider when you are thinking about refinancing:

Planning on moving? The first item to consider is whether you're going to own the house in question for at least two to four more years–the longer the better. If you're not planning on owning for at least a couple years, refinancing may not be a net benefit to you. HOWEVER: The bigger the mortgage, and the bigger the differential between your current mortgage interest rate and the rate you might get by refinancing, the more refinancing might make sense even on a shorter term basis like two years. So rather than dismiss the idea, this is a good topic to discuss with your mortgage professional in terms of your unique situation.

Can you even qualify for a refinance? It can be tough to refinance these days. If your loan-to-home-value ratio is too high–meaning that your property doesn't appraise at a high enough value in comparison to the amount that is still outstanding on your loan–it may be harder to refinance. The bank may also consider you to be a higher risk if you're self-employed, have a high debt-to-income ratio, or if you have credit issues. But the only way to know for sure is to check with your mortgage lender to examine your options.

What are the costs versus the reduction in interest rate? If you are qualified for financing, your lender will also let you know what interest rate you can secure and how much it will cost you to refinance. You can then do a rate versus loan fee comparison to see if refinancing makes sense. For example, if you refinance a $300,000 loan it might cost $6,500 once you add up points, escrow, title, appraisal, etc. If your loan is dropping by one-half of a percentage point you will save $1,500 per year, which is about $1,000 after taxes. So if you are paying $6,500 to save $1,000 per year, it will take you 6.5 years to earn your money back. That may or may not be a good deal for you, depending on how long you are planning to stay in your home. The bottom line is add up all the costs you will incur by refinancing (remember to exclude items like prepaid interest, taxes and HOA fees that you pay whether you refinance or not) and compare these to your cost savings. This will help you determine whether now is the time to refinance.

Generally speaking, it can be time consuming and challenging to properly dissect the costs versus benefits of refinancing a property. That's why it's a good idea to talk to your trusted lending professional, who understands the right questions to ask and can help you work through the details to make an informed decision.

If you have any questions about your personal situation, contact the professional who supplied you with this month's issue of YOU Magazine. Take action now, so you are protected when you need it most.

Leonard P. Baron, MBA, CPA, is a San Diego State University Real Estate Lecturer, a long-term real estate owner, author of Real Estate Ownership, Investment and Due Diligence 101 and loves kicking the tires of a good piece of dirt! At ProfessorBaron.com you can download his free "Real Estate Buying Due Diligence Checklist" under Chapter 1: Due Diligence. No sign up or registration needed–just download it!

Contributing author Wendy Mihm is the founder of FinancialRx.com, for women who are busy, competent and have it all together–except for maybe one thing: their family's finances. See more information on the website to get your financial house in order.