May 18, 2012


All the brokers are not gone, and we were never the problem!

January 12, 2012

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iStock Couple houseXSmall Top 5 Reasons to Buy a Home in 2012The American dream of homeownership is a very feasible aspiration for 2012.
There are many benefits of owning a home.  Yet some first-time buyers are skeptical of purchasing with the uncertainty surrounding the housing market.
The uncertainty many reference when speaking about the housing market involves a specific date when home values will increase. Since no one can pinpoint this date, the word uncertainty (when paired with the housing market) often reveals a negative connotation.
There are some factors we can be certain about in this housing market such as home values rebounding.  This is true; the housing market often moves in cycles.
It’s safe to assume that many Americans harbored the same uncertainty during the George H. W. Bush administration in the early 1990s when the national homeownership rate fell from its previous historic high of 64.4 percent in 1980 to a low of 64.1 percent in 1991.
In the 1960s Lyndon Johnson illustrated a correlation between homeownership and accountability by stating “owning a home can increase responsibility and stake out a man’s place in his community…The man who owns a home has something to be proud of and reason to protect and preserve it.”
This statement is still true more than 50 years later.  There are many reasons to take pride in homeownership such as:
  • Appreciation – Buying a home now (at the current rates) can almost ensure your home’s appreciation in the future.  Mortgage rates are near historic lows and home prices in many parts of the country are down.  This is the perfect recipe for home appreciation.  Additionally, many foreclosed homes are available for a fraction of the original cost.  This can translate to a higher profit if you decide to sell once the market rebounds.
  • Property Tax Deductions – For income tax purposes, real estate property taxes for a vacation home and first home are fully deductible.  The IRS (Publication 530) provides detailed tax information for first-time buyers that may answer many questions about what deductions homeowners are eligible for.
  • Preferential Tax Treatment – If you own your home for more than a year and receive more profit than the allowable exclusion after the sale of your home, the profit will be considered a capital asset.  Capital assets are given preferential tax treatment.
  • Equity Building – Many factors such as credit qualification, loan flexibility, and annual percentage rate (APR) contribute to the final decision of what type of mortgage loan best fits your goals.  Yet, a new trend being used by some homeowners is to actually add money to their monthly payment to decrease the principal balance of their loans at a much faster pace.  This trend is called equity building.  Equity builders usually select a home loan with a lower interest rate (and a shorter term loan such as a 15-year fixed) to help build equity faster.  This rapid payment process allows borrowers to:
  • Pay off the principal balance faster
  • Lock in near-record-low interest rates
  • Shorten the length of their home loan
  • Own their home faster
  • Pay substantially less mortgage interest
Equity building is a beneficial trend that’s becoming more and more popular with fiscally responsible homeowners.  Also, home equity is the largest single source of household wealth for most Americans.
  • Pride – Homeownership offers many benefits to many different types of people.  For some homeowners, playing your music as loud as you want and painting the walls the color of your choice is a perk.  For me, homeownership will permit me to build an NBA regulation size basketball court on my own property.  For my coworker Joel Jarvi, home ownership may allow him to build the indoor slide of his dreams.  No matter who you are, homeownership is a purchase, commitment, and journey that’s sure to bring you pride.
Furthermore, when the uncertainty surrounding the housing market fades and the market rebounds, homeownership may in fact transform that pride to profit through a home sale.

Posted by Joseph P. Mazzei at

August 18, 2011


SAN FRANCISCO, August 16, 2011 – Trulia today released its Summer 2011 Rent vs. Buy Index, which compares the cost of buying and renting a two-bedroom apartment, condominium or townhouse in America’s 50 largest cities based on population.

Homeownership Affordability Remains HighBased on current market conditions, buying a home is cheaper than renting in 74 percent of major U.S. cities. Meanwhile, it is clearly better to rent in New York, Fort Worth, Omaha, Seattle, San Francisco and Kansas City. In between both sides of the rent versus buy spectrum, there is a grey area. Depending on personal circumstances, such as one’s tax bracket, it may make more sense to buy a home in Oakland, Austin, San Jose, Memphis, Boston, Los Angeles and Portland, even though it is still relatively cheaper to rent.

July 1, 2011

Despite Fears, Owning Home Retains Allure, Poll Shows

On Wednesday June 29, 2011, 6:45 pm EDT
Owning a house remains central to Americans’ sense of well-being, even as many doubt their home is a good investment after a punishing recession.
Nearly nine in 10 Americans say homeownership is an important part of the American dream, according to the latest New York Times/CBS News poll. And they are keen on making sure it stays that way, for themselves and everyone else.
Support for helping people in financial distress over housing is higher than support for helping those without a job for many months.
Forty-five percent of the respondents say the government should be doing more to improve the housing market, while 16 percent say it should be doing less. On the politically contentious issue of direct financial assistance to those having trouble paying their mortgages, slightly more than half of those polled, 53 percent, say the government should help. And almost no one favors discontinuing the mortgage tax deduction, a prized middle-class benefit that has been featured on some budget-cutting proposals.
President Obama, who has been criticized for both doing too much to help the housing market and for not doing enough, was given poor marks. Only 36 percent of those polled approve of what Mr. Obama has done, while 45 percent disapprove.
In assessing blame for the housing crash, people are increasingly seeing financial institutions as the central culprit. Amid the swirl of recent disclosures about banks following improper and illegal procedures in pursuing foreclosures, 42 percent blame lenders, while 29 percent blame regulators. When the question was asked in early 2008, as the crisis was still building, the numbers were reversed, with 40 percent blaming regulators and 28 percent blaming lenders. Only a handful of respondents at either moment blamed the borrowers themselves for taking loans they could not afford.
“I believe the financial institutions willingly and knowingly allowed people to apply and receive credit at a rate higher than they could afford and this has degraded our economy,” said Steven Goode, an environmental health manager in Las Vegas, in a follow-up interview.
Making an offer for a house, something often done in past generations with little apprehension, is now riddled with worry. Only 49 percent call it a safe investment, while 45 percent feel it is risky. In a market where prices are consistently dropping, there is no easy exit.
“For the average person, it might not be a good idea today to buy,” said another respondent, Beth Lovcy of Troutdale, Ore., who bought a year ago. The value has already shrunk, but Mrs. Lovcy is unfazed. “It works out better financially than renting now because we can claim the interest on the mortgage.”
As the housing market slumped over the last few years with a speed and magnitude not seen since the Great Depression, aspects of homeownership have been debated as never before. There are tough questions about the role the government should take. These include how much of a down payment lenders should demand, whether lenders should be restrictive or expansive in granting new loans, how much assistance to give those on the verge of foreclosure, and whether real estate will ever again be the retirement savings vehicle it once was.
While the debate has been loud, there was little evidence of people’s views that went beyond the anecdotal. This poll offers a window onto widespread opinions at a critical juncture.
Before the crash, housing was widely deemed one of the safest possible investments. Few experts thought there was the possibility of a nationwide downturn. But after it happened, the effects were widespread and painful.
Diane Sherrell, a substitute teacher in North Carolina who retired on disability, traded up to a bigger house four years ago to accommodate an adopted son. “It’s been very difficult since then and we’re barely making it,” she said.
Half of those surveyed say the market’s continuing downward spiral has affected their long-term plans. One in five people say the crisis has prevented them from moving to another city or taking a different job. Nearly one-quarter of homeowners say their home is now worth less than what they owe on their mortgage, a condition known as being underwater. Families in this predicament are much more prone to foreclosure if they suffer job losses or other setbacks.
Over all, people are bleaker about the economic outlook than those surveyed in October. While most still think the current downturn is temporary, those saying it is permanent rose to 39 percent, up from 28 percent.
In the last two years, the stock market has recovered strongly while house prices have gone sideways at best. Yet those polled dismissed stocks as a long-term savings vehicle in favor of a savings or money market account (22 percent), a house (26 percent) or a 401(k) or individual retirement account (41 percent).
Who should be helped to buy is another contentious issue. Whether buyers need to come up with a 20 percent down payment — the standard for decades, but beyond the reach of many families now — is hotly debated. Fifty-eight percent of respondents say lenders should require this, while 36 percent say they should not.
People who cannot pay their mortgage are foreclosed upon. If they can pay but feel that doing so is pointless on a property that has lost so much of its value, it is called strategic default. While two-thirds of Americans say strategic default is not justified, 28 percent think that it is.
When houses are abandoned for any reason, it causes trouble for the neighbors. Three-quarters of those surveyed say foreclosures are a problem in their communities.
“Our home is worth much less now because houses are foreclosing around us,” said William Mack, an assembly line worker in Taylor, Mich.
Beyond all these ills, however, a persistent belief endures that the market will eventually improve and housing will regain its traditional importance.
Donna Boyd, a transportation supervisor in Cuyahoga Falls, Ohio, acknowledged “it might take a long time” for property values to go back up.
“But I don’t think I’m throwing my money away,” she said in a follow-up interview. “I rented for years when I was younger, and I just don’t like the idea of putting money in someone else’s pocket for something I will never own.”
The nationwide telephone poll was conducted June 24-28 with 979 adults and has a margin of sampling error of plus or minus three percentage points for all adults.

June 11, 2011

Housing Shortage Is Likely Coming, Report Says

Within the next decade, 16 million new housing units will be needed to meet population growth and shifting demands, according to Harvard University’s Joint Center for Housing Studies in its latest annual "State of the Nation's Housing" report.

That means household growth, which has dropped drastically in recent years, will need to greatly reverse its trend to meet the forecasted spike in demand. From 2007-2010, household growth averaged about 500,000 per year--less than half the 1.2 million annual pace averaged prior from 2000-2007.

To absorb the current rate of foreclosed and distressed homes plaguing most markets, a more normal rate of household formation is critical, according to the report. However, household growth partially has stalled as young adults have delayed home ownership and immigration has slowed.

As such, in recent years, builders have drastically cut production of new homes.

"With inventories of new homes at historic lows, a turnaround in demand could quickly result in tighter markets," the report notes. "Over the longer term, the number of younger households is set to rise sharply, supporting growth in the population that fuels growth in both new renters and first-time buyers. The path of the economy and evolution of the mortgage market will determine when and if this increased demand materializes."

The report predicts a need for greater housing units for several reasons. For example, the report projects demand for 1 million new homes a year is needed to meet population growth in the coming decade. The report also predicts a surge in smaller homes, estimating that 3.8 million baby boomers will be looking to downsize their homes within the next decade. Also in adding to the increase in housing units needed, Immigration growth, the need to replace existing homes, and demand for second homes will contribute to rising demand, the report notes. Therefore, researchers conclude at least 16 million new housing units will be needed over the next decade.

Source: "Harvard, Real Estate Recovery Hinges on Return of Demand" Inman News (June 6, 2011)

April 4, 2011

Banks, credit-card issuers warn of email breach - Yahoo! Finance

Banks, credit-card issuers warn of email breach - Yahoo! Finance

Posted by Joseph P. Mazzei at

Awesome Groupon!!

Groupon Deal of the Day!

Posted by Joseph P. Mazzei at

April 1, 2011

March 29, 2011

March 2, 2011

Tax Refund!!!

In case you were wondering were your tax refund was, you can track it on the IRS' website by clicking this link: Where's My Refund?

Posted by Joseph P. Mazzei at

October 7, 2010


That's right, you heard correctly. You can still get a loan without getting an appraisal. How do you do that you might ask? It's called the FHA streamline refinance. Without an appraisal.

You may have heard of the FHA streamline without an appraisal, it is certainly not new, but with the current state of the mortgage market and home values, this loan matters more now than ever before. Most people are familiar with the streamline that requires an appraisal. An appraisal is required when a borrower is looking to included their closing costs in the new loan amount. Actually, an appraisal is mandatory when doing that. Because closing costs are not being included in the loan amount, there is no appraisal required.

Now I know what you are thinking. If you can't include closing costs and prepaid expenses in the loan amount, the borrower will have to come out of pocket for thousands of dollars for closing costs, money which most borrowers don't have to spare. I say wrong. Allow me to explain. This is where being a broker gives me a distinct advantage over other lenders out there.

Because I am a broker, I get wholesale interest rates. And believe it or not, yield spread premium still exists, its just not called that anymore. It is now called a borrower credit. Fair enough, call it what you will. The way I structure the loan, I use the credit from the lender to pay not only my broker fee, but to also pay the closing costs and prepaid expenses on the new loan. All that I ask of the borrower is that they bring their mortgage payment to closing. This helps defray some of the costs, and this is money that was already budgeted to make the payment on the existing mortgage. It's a win-win.

The borrower gets a lower mortgage payment, does not increase their loan amount (although in some cases the loan amount does increase a little), and I close a loan that is all benefit and no downside. This loan was created for this very reason; to make it easy for someone to take advantage of lower mortgage rates with incurring a lot of expense. Well, mission accomplished.

I urge anyone that has an FHA loan with an interest rate above 5% to consider this loan. There is no cost or obligation when looking into getting this loan. Like the title says, you dont need an appraisal.

If you haven't done it yet, become a fan of wholesale mortgage services on facebook!

Posted by Joseph P. Mazzei at

August 15, 2010

4.25% 30 year Fixed! No Points or Origination Fees!!

That's right, now you can get a 30 Year Fixed Rate Loan @ 4.25% (apr 4.299)!! Here are some of the requirements to get this loan: Primary Residence, Rate and Term Conventional refinance, LTV 80% or less, Loan Amount $150,000 or greater, credit score 720 or greater, No Origination, NO discount points, and No processing fees. Other restrictions may apply, please call for details.

Posted by Joseph P. Mazzei at

May 24, 2010

A Simple 10 word email that will revive dead deals from months past.

Here is a simple 10 word email that will revive dead deals from months past.

First, I read a study and it said that over 50% of people that inquire about a purchase, will proceed with what they asked about, within 18 months.

But get this, only 15% of them will do so in the first 90 days.

That means it's crucial to stay in contact with them.

Of course the only way to do that is to have an automatic system in place to stay in
contact with them.

Ok, we all know how important it is to stay in contact, but I am going to give you a
simple email to send out to capture the dead leads that haven't taken action yet, even if you haven't stayed on contact with them.

Here is the email to send out, and then I'll explain why it is so effective.
Subject Line: A quick question for you
Body of email: ‘'Are you still wanting to buy a house in <:put city here>?'’
You may be tempted to add to this email, but don't. It already has 3 key things going for

1. It's short
2. It's personalized
3. It's expecting a response

Send out this email and then tell me how well it worked out for you.
This is a simple strategy that costs nothing to implement!!!

Posted by Joseph P. Mazzei at

March 2, 2010

4% 15 Year Fixed Officially Available!! No Points!

That's right, now you can get a 15 Year Fixed Loan @ 4% (apr 4.228). Here are some of the requirements to get this loan: Primary Residence, Rate and Term refinance, LTV 80% or less, Loan Amount $150,000 or greater, credit score 720 or greater, and 1 % Origination fee, NO discount points or processing fees. Other restrictions may apply, please call for details. P.S. If you would like to eliminate the origination fee, the rate would be 4.25% (apr 4.329) with a possible credit back to you towards closing costs.

Posted by Joseph P. Mazzei at

Interest Rate Update: 4.5% 30 year Fixed

4.5 % Percent is available again, although, as usual with certain restrictions. But, if you are a borrower with excellent credit that has been waiting to refinance, now is the time. Here is a sample of the requirements to obtain this rate: Primary Residence, Rate and Term refinance, 70% Loan to Value, Middle Credit Score of 720 or better, and a loan amount of 200K or more. The Cost for this rate would be approximately 1 percent of the loan amount. I say approximately because rates change every day, sometimes they change several times throughout the day. So if you would like to know if you qualify for this rate or better, please feel free to give me a call. There is never any obligation and it doesn't cost a dime to talk to me.

Posted by Joseph P. Mazzei at

January 27, 2010

Rate Update: 30 Year Fixed Rates Still in the 4% Range

That's Right Folks, 30 Year fixed rates are still in the 4 percent range. Its true that not everyone can qualify for these rates, but if you are waiting to refinance or buy a home, wait no longer. The Federal Government has extended the First Time Home Buyer Credit until April and now a non first time home buyer (repeat buyer) can get a credit of up to $6500 until April as well (you just have to close by June of this year). Just as these programs are limited, rates are not going to stay this low forever. The Fed is scheduled to stop buying mortgage backed securities (the major thing that is keeping rates at an all time low) in a couple months. So if you are undecided, now is a great time to buy or even refinance. I even still have rates available in the 3 percent range.

Posted by Joseph P. Mazzei at

October 14, 2009

Rate Update: 3.49% is Available! Thats Right, I said 3.49%!

Heres the catch: In order to get this rate, you gotta have at least a 750 middle fico score, an ltv of 80% or below, a loan amount of $200,000 or more (up to 417,000.00) and its gonna cost you 1.5 points total. One last thing, this is a 5/1 adjustable and these rates are for Florida only (other states could be more or less, but i mainly do loans in florida). If you want a little more security, i can do a 7/1 arm at 3.99, same cost. Get em' while they're hot, these rates wont last long! (apr 3.6 and 4.09 respectively and obviously not everyone will qualify for these rates)

Posted by Joseph P. Mazzei at

August 3, 2009


Does this blog title sound like a desperate lover who has just been dumped? A jilted lover begging for forgiveness and to be given one more chance? Well, its not about that at all. Its about a borrower trying to convince their lender to modify their loan, only to be shunned like yesterdays news. Trying to get your lender to take you back can be awful similar to trying to get back with your ex. And we know how that usually ends, don't we?.

I've have been doing loss mitigation (loan mods) for some time now, and i am beginning to hear the same story over and over from borrowers who were declined for a loan modification by their lender. That's when it occurred to me that trying to modify seemed a lot like trying to mend a bad relationship, especially when only one of you wants to get back together. C'mon, you know we've all been there! I think it could kinda go like this:

You: "Remember the good times? I was making plenty of money and never missed a payment? I even paid extra!"

Your Lender: "Yeah, but you lost your job and now you have stopped paying all your bills. I cant trust you anymore!"

You: "You're the only one i want to be with!"

Your Lender: "Your just saying that cause no one else wants you!"

You: "But I was faithful. I paid you on time every month!"

Your lender: "But what about all those inquiries with other lenders? You were thinking about leaving, weren't you?!

You: "I promise, if you take me back, i will never be late again!"

Your Lender: "I found some one else, you should too. Plus, i got tarp money, i don't need you anymore!"

I think you get the point. For a lot of people, the lender has just moved on, outgrown you, and is ready to start anew. They just don't care about you anymore (they never did). Its all about the benjamins now. Perhaps it would be best if you moved on too. Besides, there's plenty of fish in the sea, right?

Posted by Joseph P. Mazzei at

You can also visit me on

July 16, 2009

Will The Real criminals Please Stand UP!

Charges filed against Beazer; settlement reached

By HARRY R. WEBER Associated Press

July 2, 2009, 12:05AM

ATLANTA — Federal prosecutors in North Carolina filed criminal fraud conspiracy charges against Beazer Homes USA on Wednesday, but they agreed to dismiss the case if the company complies with an agreement accepting responsibility for certain wrongdoing and pays millions to victims.

In the deferred prosecution agreement, the company accepted responsibility for fraudulent mortgage originations and accounting practices and agreed to pay $10  million immediately toward restitution to victims. Beazer also agreed to pay up to $50 million as the company, which has been battered by the housing downturn, recovers financially, according to prosecutors and court records.

The deferred prosecution agreement is in effect for five years. A spokeswoman for prosecutors, Suellen Pierce, said that the charges against the company will be dismissed if it complies with the agreement.

Beazer said Wednesday that it also reached a settlement agreement with the Department of Housing and Urban Development and the civil division of the Department of Justice.

The company also said several of its subsidiaries have entered into a settlement agreement with the North Carolina Real Estate Commission.

Under the terms of the settlement agreement with HUD and the civil division of the Department of Justice, the company said it will make an immediate payment of $4  million to HUD to resolve civil and administrative investigations.

In addition, on the first anniversary of the agreement, the company will make a $1  million payment to HUD.

“We deeply regret these matters and have used what we have learned to strengthen our control and compliance culture and reinforce our absolute commitment to act according to the highest standards of ethical conduct throughout our organization,” Ian McCarthy, Beazer’s president and chief executive officer, said in a statement Wednesday.

In February 2008, Beazer left the mortgage business, and in May 2008 it completed the restatement of certain prior period financial statements and implemented changes in its internal controls over financial reporting.

The company said Wednesday’s settlements will allow it to close “an unfortunate chapter in its history.”

The Atlanta-based home builder has been under scrutiny for certain business and financial practices.

Earlier Wednesday, the Securities and Exchange Commission said it had filed civil charges against the former chief accounting officer at Beazer Homes, accusing Michael Rand of committing fraud and misleading company auditors.

June 20, 2009


That's right people, its time for another episode of the "Attack of the Phantom Guideline"! What's that you say, you're not familiar with that show? Me neither, but apparently it comes on whenever i am trying to close a cream puff of a loan. You know, it's the show where lenders make up underwriting guidelines that no one (me) has ever seen or heard of before, and then have no way of backing them up.

This week's episode: "The 20% Square footage guideline."

Our show begins with our mild mannered mortgage broker, Moe Jazzei, who we find has just received his conditional loan approval from his preferred lender, Nuntrust Mortgage, who has taken eight days to underwrite his loan. Eager to close his loan, Moe quickly reviews his approval. Loan to value: 46% -check. Credit score: 795-check. Loan term: 15 year - check. Interest rate: 4.375 - check.

Now, on to the underwriting conditions. Great Scott! There is only one. But what's this? OH NO!! It's the PHANTOM GUIDELINE!!! The underwriter is requesting two new comparable sales due to square footage being off by more than 20%!!! That's right, unbeknown to our intrepid mortgage broker, apparently the square footage of the comparable can not be 20% greater or less than that of the subject property!! To make matters worse, she is quoting guideline!!

This can't be, Moe says to himself. I have never heard of this. They must be mistaken. Trying to keep his composure, Moe decides to contact his appraiser, as he realizes even though he is a very knowledgeable broker, perhaps this is a section of the Fannie Mae underwriting guide he just plain missed. But much to his dismay, his appraiser of twenty years experience is also puzzled. "Never heard of that one", he quips.

Getting no satisfaction from his appraiser, Moe decides to contact the underwriter. After several phone calls and messages (shocker) to the lender, Moe finally reached the underwriter.

He asks, "Is this a Fannie Mae guideline or a Nuntrust guideline?" "Fannie Mae", she says. Moe quickly responds, " I cant find it in the guide, do you have a copy?" " No, I don't", she quickly replies." "How am i supposed to get it then?" "Check with Fannie Mae." " I did, and i could not find it." " Well, if you don't have it, and Fannie Mae doesn't have it, how am i supposed to know it exists?" "I will have to get back to you on that one".

Will the underwriter be able to obtain the Phantom Guideline in writing? Will our broker be able to get this loan closed before his locks expires? Tune in next week kids for the exciting conclusion of " Attack of the Phantom Guideline!"

Posted by Joseph P. Mazzei at

March 16, 2009

Refi Plus - The New Refinance Loan

Here are some of the finer points of the new refinance program being offered to lenders by Fannie Mae, and hopefully offered by lenders to brokers. That information is still forthcoming.

Maximum LTV Ratio

The maximum LTV ratio for DU Refi Plus and Refi Plus is 105 percent. There is no maximum CLTV or HCLTV; however, new subordinate financing is not permitted in conjunction with a DU Refi Plus or Refi Plus transaction.

MI Requirements (private mortgage insurance)

For new refinance transactions with an LTV ratio that exceeds 80 percent, MI may or may not be required depending on the current MI coverage on the existing loan. New refinance transactions with an LTV ratio less than 80 percent do not require mortgage insurance.

Eligible Borrowers

The borrower on the existing mortgage must be identical to the borrower(s) on the new mortgage. Borrower(s) may be added to the new loan, providing the existing borrower(s) is retained.

Ineligible Existing Mortgage Loans

Reverse, Second, and Government mortgage loans.

Loan Purpose

Limited cash-out refinances only, however, existing purchase money subordinate financing may not be satisfied with the proceeds of the Refi Plus mortgage loan.

All existing subordinate financing must be subordinated to maintain first lien priority of the new Refi Plus mortgage loan.

Credit History

No minimum credit score, but the borrower must meet the requirements for a Fannie Mae loan; and credit score will still be a factor in determining the interest rate.

March 2, 2009

Hope For Homeowners - Hopeless for brokers?

I think a lot of us brokers were looking forward to the H4H loan last year as a possible life line to help us stay in business. Oh yeah, and there's that helping the borrower thing too. Well, i think on both accounts, this program is a bust. This program was seriously flawed from the beginning, and it seems after some minor tweaking by the powers that be, it is still just as undesirable.

I know that I thought this could be a way to keep afloat in this horrific market all the while helping borrowers keep their homes. I am in the Tampa Bay area, what i call ground zero for declining values (i realize there are other areas that are probably worse, but i live here). With rates still being relatively high last year, this seemed like a viable way to keep doing business in spite of the lack of value, credit, and income.

Well, as most of you know, no wholesale lender has made this program available to brokers, and I don't think they are going to. Here is a quote right from FHA's website in regard to how a borrower is to obtain this loan:"It is envisioned that the primary way homeowners will initially participate in this program is through the servicing lender on their existing mortgage". I can't help but think this was the intention right from the word go, a subtle way of saying" brokers beware, your days are numbered". We brokers have targets on are backs, and scarlet letters on our chests. All i can say at this point is fellow brokers beware, cause the winds of change are a blowin'. I just hope they don't blow us out of the industry!

Posted by Joseph P. Mazzei at

December 5, 2008

Treasury Department Considers Plan to Lower Mortgage Rates

I think the FDIC is beginning to get finally get it. Either that, or they are reading my blog.


WASHINGTON -- Financial industry lobbyists are urging the Treasury Department to take steps to lower mortgage rates in an effort to stabilize the housing market.

Under the proposal, Treasury would seek to lower the rate on a 30-year mortgage to 4.5 percent, Scott Talbott, a vice president at the Financial Services Roundtable, said Wednesday.

That's about one percentage point below the current rate of 5.6 percent.

Treasury would do so by purchasing mortgage-backed securities from Fannie Mae and Freddie Mac, Talbott and other industry sources said. While details of the proposal are in flux, the program could be similar to the effort announced last week by the Federal Reserve to purchase up to $500 billion of mortgage-backed securities from the two mortgage giants, Talbott said.

Mortgage rates dropped steeply in the wake of the Fed's announcement. Additional purchases could drive mortgage rates down further, and enable Fannie and Freddie to purchase or back more home loans. Fannie and Freddie, which were seized by federal regulators in September, own or guarantee about half of the $11.5 trillion in U.S. outstanding home loan debt. Treasury is strongly considering the proposal and could announce a decision as early as Monday, industry sources said.

Treasury spokeswoman Brookly McLaughlin said she would not comment on speculation about actions the department may take in the future.

Treasury could make the proposal as part of a request for the second $350 billion of the $700 billion financial rescue fund, industry sources said.

Treasury Secretary Henry Paulson has been criticized by members of Congress for using the bailout money to shore up Wall Street banks, while doing nothing for homeowners facing foreclosure.

The proposal was reported Wednesday on The Wall Street Journal's Web site.

In recent weeks, a diverse set of industry groups from real estate agents to carpet makers have called on lawmakers and the incoming administration of President-elect Barack Obama to subsidize lower mortgage rates and beef up tax credits to help stimulate housing demand.

The National Association of Realtors has been pushing a plan under which the federal government would spend $50 billion to lower mortgage rates. It says doing so would yield about 500,000 more home sales.

The National Association of Home Builders is leading a new "Fix Housing First" coalition to push for aid to the ailing housing sector, including a tax credit of up to $22,000 for anyone who buys a home before the end of 2009.

"The goal is drive mortgage rates so low that home prices not only stop falling but begin to rebound," said Greg McBride, senior financial analyst at

While the plan, if enacted, will help anybody looking to buy or sell a home, or refinance out of an expensive mortgage, it may not help those whose credit is so damaged that banks don't want to lend to them.

"It may change the number of borrowers seeking loans but it won't change the qualifications for who gets those loans," McBride said.

December 1, 2008

VA Loan Update - You Can Now Go To 100% LTV on a Cash Out Refinance

That's right folks. The VA has recently changed it's guidelines to allow a veteran borrower to borrower 100% of their home's value on a cash out refinance loan. This is an increase from the previous maximum of 90%. You gotta love the VA, especially when FHA is decreasing their max ltv to 85% on a cash out.

October 21, 2008

My Solution to the Housing Crisis

Let me start off by saying that this is not the only solution, but a simple one that will not cost the government billions of dollars. My approach is a 3 pronged attack:

1. Government Subsidized/Mandated Mortgage Interest Rates

Lower Thirty Year Fixed Rate to 4%

All of the people who want purchase a home but haven't yet -1st time home buyers, procrastinators, people still waiting for prices to come down - would seriously reconsider if they new they could get a rate of 4%. Even the people who were responsible and have good credit and equity would pick up the phone to refinance their loan. This will last for 18 months - anyone that wants to refinance into this and can qualify, can apply.

2. Government imposed 18 month moratorium on all primary residence foreclosures. This will help to put a stop to plummeting housing prices due to short sales and foreclosures. I think we can all agree that for the most part, the lenders don't want these houses back anyway; so they are not losing buy not taking back these houses. Also, this will keep people from abandoning their house after receiving a foreclosure notice.

3. All lenders must modify all primary residence loans (1st and 2nd mortgages) to an affordable payment for the borrower (for those who apply). We will use 31% debt to income ratio as definition of affordable. (monthly p.i.t.i payment divided by monthly gross income)

If modification results in principal reduction - so be it - no future shared appreciation. My reasoning: if they will short sell and take the loss, then they will modify and take the loss, end of story. Go out and make new loans to recoup the money. That's what I'm gonna do.

This is about as simple as it can get, and this will get the economy going again. If people see that they can get a rate of 3.5-4% on a 30 year fixed, they will start to buy and refinance again. This will create jobs through a ripple effect, as well as help to put a bottom in on the housing market by creating demand.

Posted by Joseph P. Mazzei at