Capitalism Defined...

One summer in the 60's at U of MD, I learned from and met the most brilliant men of his time... Milton Friedman. In a discussion with Donahue he brings clarity to a recurring topic we hear today! I consider him one of the GREAT Americans.

Is ANYONE "Minding the Store" at the FED??? You MUST watch this!!

Want to know just how much the FED has their finger on the pulse of what they are doing??? This my friends is crazy and we should not be allowing this… an expert in our field (and good friend) shared this with me and my jaw dropped!

This video speaks VOLUMES as to the heart of our economic woes and the mounting debt that we are heaping on our children and their children. As an indrustry "insider" I'm getting mad as hell... we can no longer allow this to happen! Please share with all you know...

HUD Chops 10% Off Senior HECM Benefits!

Almost two months back I wrote regarding the monies being spent in the stimulus package that went to things like tunnels for turtles, guard rails for dried lakes, rehabs for airports with very not many customers, repairs to train stations closed for decades and many more, but we were appalled that our US Congress was taking into consideration Bills which would force our seniors bear the cost of the HUD reverse mortgage plan.

I felt that if Billions and Trillions of dollars can be used in support of these and other projects like skim board parks, hundred million dollar courthouse renovations, scientific grants used for laser beams and wetlands defense, that surely our Congress may possibly stumble on the money to help our seniors continue to use the HUD Home Equity Conversion Mortgage (HECM otherwise “Heck-um”) program to continue to stay in their homes. Unfortunately, it looks like we were incorrect!

Just last week a news piece came out that the US was to fire $36.7 Billion concerning foreign aid, to wealthy countries and countries who don’t like us. That’s correct, we can discover almost $40 Billion meant for countries who are already wealthy, or would like to witness us fall into the ocean, but we don’t have the money to support a plan that helps our senior homeowners stay in their homes without slashing the benefit amount to our senior homeowners. Our mothers, fathers, grandmothers and grandfathers aren’t equally crucial as the money we will send off to North Korea, Cuba, Venezuela, Libya, Bolivia, Russia and others.

It seems that not simply do we come up with money intended for all these pet projects, but Congress is slating money for healthcare reform with the intention of by all accounts may well further slice benefits to seniors in the form of cuts to Medicare and Medicaid. This week, HUD announced with Mortgagee Letter 2009-34 that Principal Limit Factors are being subtantially reduced effective October 1, 2009 to “...assist with the viability of the program”.

It seems that the HECM program was in no way intended to function with a credit subsidy as explained by the Commissioner, David Stevens, in a call to the Reverse Mortgage Lenders Association (NRMLA). He remained amicable to re-engineering the mortgage insurance premiums or making other changes but indicated that there was nothing HUD might do since the plan needed to function exclusive of need of a subsidy.

According to the notice issued by the NRMLA, several of the bigger reverse mortgage lenders did an analysis on the portfolios of loans they have settled to year, and that 10% reduction of benefits under the plan (this is the amount HUD intends to lessen the benefits) would have left approximately 21% of all the borrowers with too little proceeds to pay off the existing mortgages on their homes. Said a bit differently, more than one-fifth of all reverse mortgages completed would not have been able to be settled after October 1, 2009, unless the borrowers had supplementary funds they could bring to closing!

This means that all the borrowers who used the HECM Reverse Mortgage, barely paid off their liens to keep their homes throughout these exceptionally tough financial period would be NOW be forced to move; even worse, if they were now delinquent on their mortgages, the seniors may have been foreclosed upon if they didn’t have the additional money to cover the reduced benefit amount.

This year alone, 1st Metropolitan NRMC has helped over two dozen seniors homeowners, who were behind on their current mortgage due to the current economic and financial environment, and, who would have not had the additional funds needed under the proposed changes, and would not have been able to keep their homes. Approximately a dozen were presently in foreclosure and, unquestionably, would have lost their homes with these changes.

Seniors already pay a great portion of this program since the single prime fee for any reverse mortgage transaction is typically the HUD mortgage insurance. On the largest of transactions, this is in excess of $12,500 in cost paid directly to HUD to INSURE the loan. Additionally, all borrowers also pay one half of 1% (0.5%) for monthly mortgage insurance on their loans. I have no way of knowing what claims have been paid due to the current mortgage/real estate market adjustment; surely the HECM loans are no worse than the forward, or regular mortgage loans with the intention of HUD has insured through FHA.

The office of Management and Budget (OMB) came up with the statisticsics to determine the projected deficit in the program, and I, for one do not know how they were derived (if I did I might take exception with their numbers, and express this article differently). But to make our seniors pay yet again, while we cover the billions and trillions in spending for superfluous programs and projects while our seniors need our help and support is criminal! This is just one added cut to the senior population while we waste for pet projects and for things few can justify... Oh, and yes, it seems they could found the money to give Congress a RAISE in budget benefits.

I ask every person, even if you are not a senior, to cal, write, fax, or email (or do all 4!) your representative at http://www.Usa.Gov/Contact/Elected.Shtml and tell them that you strongly urge them to discover a way to fully fund the HUD HECM program and instruct HUD to revert back to the existing benefits so that our seniors do not have to pay the price by way of reduced benefits.

It’s incredulous to me, that HUD or Congress would even consider such a modification at this point in time; a challenging time when our seniors need help more than ever. It is my sincere hope that the Congress hears from a millions of concerned citizens before it’s too late for many seniors.

What if... we modernize one less useless airport, leave out a a small amount of guardrails for dried lakes, build one or two fewer skateboard parks or just forward much less money to the nations who are already wealthy or otherwise postured against the US (Yemen or Jordan?)... In the name of our parents and grandparents so that they can stay in their homes?

I for one, don’t think that’s asking too much.

Larry Benton CSA^® with 1st Metropolitan Mortgage, is a Certified Senior Advisor^®, and specializes in helping senior clients continue to meet their financial goals. When you or one of your family members finds yourself needing real answers and real solutions to senior finance challenges, confidentially contact Larry at 410.573.0909 or lbenton@theReverseAdvisor.net

Wow!!! The Marketing Animals retreat in Taho has been MIND NUMBING!!! So many cutting-edge strategies and soooo many smart guys...

HVCC CALL TO ACTION

HVCC CALL TO ACTION

To: All Mortgage Brokers, Real Estate Agents, Appraisers, Lenders, Home Builders, Title Agents, and Consumers
From: Marc Savitt, President- National Association of Mortgage Brokers

After more than a year of exhaustive negotiations with Fannie Mae, Freddie Mac, Director of FHFA (GSE Regulator) James Lockhart, and NY Attorney General Andrew Cuomo, NAMB believes the time has come for your individual voice to be heard.

In order for this “Call to Action” to be effective, we ask that you fully participate, encourage others to join the action and continue calling and emailing everyday, until advised to stop by NAMB. This will NOT be a one day action!

We have received hundreds of e-mails through the hvcc@namb.org e-mail address outlining specific cases where the HVCC has created delays and additional costs to consumers. NAMB has categorized and compiled a report of the examples received, which was sent to FHFA Director James Lockhart. Please use your own examples in your conversations with legislators, regulators, or their staff. Also, please visit the NAMB HVCC Resource Center for additional information and documents on the HVCC.

Who will you be contacting?

• NY Attorney General Andrew Cuomo’s Office: (212) 416-8000, Web Email Form
• Internet ComplaintFederal Housing Finance Agency (FHFA): (866) 796-5595, director@fhfa.gov
• Fannie Mae: (202) 752-7000, headquarters@fanniemae.com
• Freddie Mac: (703) 903-2000, Web Email Form
  

Senators, Representatives and Governors: Click here for contact information.
Also, please contact your local TV and Newspaper outlets.

Below are talking points and background information to assist in your conversations. Please remember we are all professionals and should conduct ourselves accordingly in any communication with the above parties. For the most successful and influential calls, it is important to concisely quantify how the HVCC is affecting your consumer and your business.

Talking Points:

1) NAMB conservatively estimates (breakdown below) that the HVCC is costing consumers over 2.8 BILLION dollars a year in extra fees, created by long delays (extended lock-in fees) and higher appraisal costs.

2) Unregulated Appraisal Management Companies (AMCs), who have been the subject of several misconduct investigations, are the centerpiece of the HVCC. The original Cuomo investigation involved a federally chartered bank and an AMC.

3) AMCs are driving honest appraisers and mortgage brokers from business, eliminating competition, increasing costs to consumers and reducing state revenue. The HVCC is causing significant delays in real estate transactions, hurting real estate agents, title companies and other third parties reliant on turnaround time.

4) HVCC does nothing to reduce fraud, as it legitimizes the same failed model, which was the subject of Attorney General Cuomo’s investigation.

5) No Portability! Consumers are “trapped” with a specific lender. If a better deal becomes available with a different lender, the consumer is forced to pay for another appraisal.

Background:

I. Lack of Portability

1. Lenders are not allowing borrowers to transfer appraisals, regardless of the reason.
2. Forces the borrower to pay for another appraisal and wait for a new appraiser to be assigned and complete it, increasing the total cost and time needed for obtaining a home. Delays in turnaround times also cause the borrower to miss rate lock deadlines and possibly face penalties charged by the lender.
3. In a poll conducted by NAMB, 75.8% of respondents said that 0% of their appraisals are portable since the enactment of the HVCC.

II. Lack of Quality

1. AMCs are assigning appraisers from a different municipality, county, or even state to appraise the target house, therefore unfamiliar with the neighborhood and unable to produce an accurate appraisal.
2. Because of this, the HVCC is forcing appraisers to be in direct violation of the Uniform Standards of Professional Appraisal Practice (USPAP) for jurisdictional competence.
3. Because AMCs pay appraisers such low fees, those assigned appraisers willing to do the work are often inexperienced and fail to adequately appraise the home.

III. Increased Cost of HVCC to Consumers

1. The minimum increase we have seen in direct consumer cost is $150 per appraisal. That, coupled with the drastically increased appraisal turnaround times that impose extended lock periods at an average expense of $561.95 per loan, is now costing consumers an estimated additional $711.95 per transaction.

$150.00 - minimum increase per appraisal
+ (plus)
$561.95 - average loan amount of $224,778 at .25% for extended lock period
= (equals)
$711.95 - average total increase per transaction
X (multiplied by)
3,870,552* - 2007 HMDA report of residential real estate loans originated
= (equals)

$2,755,639,496 - $2.8 BILLION in increased fees to consumers!

IV. Articles Illustrating the Effects of the HVCC

• The Appraisal Bubble – Center for Public Integrity Click Here
• The Cure is Worse than the Disease – Appraisal Press Click Here
• Appraisals Roil Real Estate Deals – The Wall Street Journal Click Here
  

Feel free to forward these articles and/or reference them in your conversations.

HVCC Affects EVERY Homeowner!

How can ONE MAN affect the property values and the jobs of so many?? How can our legislators stand there like the "3 Monkeys"?? If you are not aware of how this can happen please watch this video



If you are as concerned as I am, please go to www.HVCCPetition.com and sign the petition... then forward with Nothing has disrupted the Real Estate industry like this bad deal!!!

Call your Senator... Enough ALREADY!!

The largest recipients of your TARP dollars are at it again... and it will affect EVERYONE that owns a home, will need a mortgage, or is connected to the Real Estate Industry! This video was produced by the leaders of my mastermind group to educate us all about the "shell game" that the US Congress is playing with your tax dollars and and future home sales and values.


This bill stealthily past the House last week, without a "peep" from the media. Now the Senate looks at HR 1728. Please call your Senators TODAY, and let them know that you KNOW, and that you are expecting them to vote "NO" on HR 1728!! Phone the Capitol switchboard at (202) 224-3121. The Capital operator will connect you directly to your Senators.