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First Time Home Buyer Tax Credit Assistance and Federal Government Home Loan Program with Low Down Payment on FHA Mortgages. Buy Bank Foreclosed Homes at a Discount. Go To http://RealEstateMarketingThisWeek.com

Part 2 (Excerpt)

The median income family can afford twice the median priced home; prices drop over 50%

And now I mentioned Dan Havey is back in the studio with us, Dan has done a lot of great things in the mortgage industry. He left us about a year and a half ago, is that right Dan?

Yes, I left the mortgage industry in October of 2007. Tell us a little bit more about yourself.

As you know I came originally from Wisconsin, where I got a degree in Business Finance and I came out here in 1989 and started working with my brother selling real estate owned-REO, bank owned properties for Fannie Mae, Countrywide, and the Resolution Trust Corporation-RTC which was the government entity that was put in charge of disposing of all the real estate owned by the 1800 S&Ls that had failed. I did that until about 1995 when I moved into the mortgage industry and there for 12 years I worked predominately with bankruptcy attorneys helping their clients get out of bankruptcy and foreclosure. I left the mortgage industry in October of 2007. Now I am working predominately in the arena of marketing for real estate and mortgage companies, helping out companies, just like Im here helping out Michael today, to get people to realize that right now actually is a really good time to buy.

There are a couple of points I want to make and it was something that Michael had said earlier. The first one was that 4% interest rate. Originally Obama said a couple of weeks ago, when he rolled out the mortgage plan, that they were going to take the $200 billion and use it to buy mortgage backed securities, well the article I was reading today said it appears that plan may have changed. Instead of buying the mortgage backs they were actually buying the stock of Fannie and Freddie to help support the company and keep these companies going under. I dont quite understand why being how they own them now.

Well youve got to hand it to the government they have really done a heck of a job helping Fannie Mae out, for instance today the stock is up to $0.41. Wow, doing so well, I remember when it was $150 or so, where it was at the top of the market.

Today, right now is definitely the best time even if rates dont get down to the 4% point. The beauty of it and were going to talk more about this in a later segment, is that we have seen a 51% decline in home values from the peak of the market. So you dont have to have the absolute greatest interest rate in order to be able to buy a house today. The median home price right now is $130,000 in Maricopa County, it was $264,000 just two years ago.

So the median home price is $130,000? We are going to talk a little bit about what a person has to make to actually qualify for that. Well it is definitely well within the means of a median income family. Right now a median income family makes about $64,000 in the state of Arizona according to the US Census Bureau and HUD. I ran some numbers today, I think at 6% interest and at that rate they can buy a $280,000 house. So you can buy twice the median home price if you are making just what the median income family would be in the state of Arizona. So the median household income buys double the median priced house in Maricopa County. That is correct, at 6% interest.

And the reality of it is interest rates are not even that high right now. So for people to be waiting for that perfect interest rate of 4% it doesnt really matter if it gets here or not because right now is such an incredibly fabulous time to be buying a house. There are so many foreclosures out there on the market right now, there are so many short sales out there on the market right now, and the point you made earlier is very important, that people have to get in and get prequalified, know exactly what they can buy. Now in many cases you are going to need a down payment, so get with your mortgage broker, get with Velocity Financial and start working on that program of getting those funds together for the down payment as well.

Dan Havey we talked in the past about whats available for financing these days, interesting to give little pat on the back for Velocity Financial is one of less than 15% of all of the lenders in the state of Arizona that are qualified to do FHA financed homes. Now FHA financing, people used to think it was only for first time home buyers, thats no longer the case. The FHA loan which only requires 3.5% down payment it doesnt matter if you have owned a home before and in many cases you can own another home now so long as your new purchase is going to be your primary residence you can utilize FHA financing and put only 3.5% down.

Duration : 0:6:42

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Meet Logan Landers, president of the company, as he talks about the advantages of doing business with his Los Angeles-based brokerage.

Duration : 0:4:33

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Tax Credit for First Time Home Buyer Program, with Low Down Payment and Interest rates thru Government Loan Assistance and FHA Mortgage. Buy Cheap Bank Foreclosures. Go To http://RealEstateMarketingThisWeek.com

Part 7 (Excerpt)

FHA Guidelines regarding foreclosures and first time home buyers; incredible home buying value

Ok I was just checking because I thought this was a story about all the mortgage backed securities that were going under. It started at the top and it worked its way down. The reality of it is that people were buying homes, not reading what they were signing, not understanding how it worked and shame on the people who were putting it in front of them, knowing that they didnt know and we all need to take a little responsibility here for this past crisis. It is not just the Wall Street firms; its not just the mortgage companies and banks, the brokers have little in fact to do with it, we didnt create the loan products that people were buying, we were merely disseminating it to the public. I am glad to say I was not a part of any of that. I was able to stay away and do traditional, conventional type financing for people. So luckily I didnt have a lot of clients who got stuck into that nightmare.

Speaking of that nightmare, Dan when we talk about the people who have had foreclosures, their lives have been turned around, turned over and they think that there is no where for them to go. One of the nice things about the Federal Housing Administration loan, the FHA loan, thats the first time home buyer type loan, the minimum down payment loan, its only 3 years after you have had a foreclosure that you can qualify to purchase a home again. So it is important if you have had a foreclosure, you need to point your future away from the flame, you need to save your money, do your best, work as tightly as you can on a budget and look forward to that time when you can go back out and buy a home again.

Property values are going to be up from where they are today, but there is still going to be plenty of great value out there and there are not going to be loan products that are going to get you in trouble again. They wont exist. What really caused the great inflation in home values starting in about 2002 was the financing was just getting crazy. I wont get into a whole lot of technical stuff about mortgage backed securities and all that, but the lenders were creating products, selling them off their books, thinking that they would never have to worry about them again. They sold trillions of dollars worth of these loans and those are the ones that are going bad.

Ones that were toxic in the first place: the stated incomes, the option ARMs, all those loans are all gone now. I was saying earlier today that we are back to where we were in financing in 1992-1993, back when the median home price was $75,000. Now I dont think we are going to go anywhere near that again, I think at $130,000 we are getting real close to the bottom of the market and what I was thinking was when I got into the business in 1995 and you were in at about the same time I was, and I remember talking to a guy who comes into our office to sell us loan programs, now this is the very beginning of the really crazy stuff, and he was saying we can do 70% no doc loans.

We go, what do you mean? If somebody puts down 30% they dont have to verify anything, they dont have to verify their employment; they dont have to verify taxes, anything. We were absolutely floored, but by the peak of the market we were doing 100% no doc loans. If you were breathing they gave you a loan and the credit scores didnt have to be that high, I think I saw them as low as 600…

Duration : 0:5:36

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$8000 Tax Credit for First Time Home Buyers with Low Down Payment. Lender Finance Program with Low Payment and Fixed Interest Rate on FHA Mortgage and Government Assistance. Go To http://RealEstateMarketingThisWeek.com

Part 8 (Excerpt)

Analyzing tax returns for self employed and small business owners; Use a Mortgage Planning Expert

Credit scores now are a major factor with interest rates. You see the liars up on the internet with interest rates being at 4.625% and all this kind of hocus pocus, its not true. You are never going to qualify for that rate today. They are going to lie to you, once you sign and see the fine print you are going to realize that it is a ridiculous idea to pay that amount of money in fees.

Credit scores have to be significantly higher than they used to, but again I have to tell you, its my opinions that a 70% no doc loan with someone who has a 720 or higher credit score I believe is a good loan. I personally believe that at some point it will be brought back.

I am not arguing with that, with a good FICO score I can agree with a 20% down for a stated income loan. People are encouraged through our tax system to write off all of their expenses and so often we have small business people who really are making money but because they take advantage of our tax system they are not able to get a loan. They cant qualify based upon their income.

In a lot of cases yes, but once again I definitely want to point his out just because someone is self employed and owns a small business and they do write everything off, that does not mean that they will not qualify. They may have been told now that they have to go stated income because of tax returns, but most people, the small business owner, the consumer doesnt know how to analyze his taxes, whether or not he is going to qualify for financing thats not his area.

Most CPAs dont even know how to analyze taxes to extrapolate enough income back out where we can use it as income, so just because a person is self employed does not mean that they cant qualify for financing and honestly nothing could be further from the truth. Plenty of people self employed, small business owners will qualify using their tax returns.

I think that anyone right now who doesnt own a home should be giving you a call getting pre-qualified. If nothing else give you a call and see what you can do. So you say, I wrote off a bunch of stuff last year and I am not going to be able to buy a house well maybe you can. But get in there, have a professional, have someone who knows what to do, whos been in the business for 15 years, have them take a look at it and decide whether or not you can really get that loan.

One of the things with my mortgage education; I am a certified mortgage planner. I am a certified mortgage analyst and a certified mortgage planning specialist. The significant part of that training and those certificates is in analyzing complex tax returns and we analyze complicated tax returns for professional athletes, for professional musicians, all the time. There is income always, it is just a matter of knowing how to get all of it out there. So I think we have kind of hit that.

So yes if you dont own a home today and you have been told NO, you need to find out if the person who told you no is qualified to tell you no, #1, and #2, less than 15% of the lenders in Arizona are qualified to do FHA loans. Those are the loans we are talking about, $100 down to buy a HUD-home, less than 3.5% down to buy a house with the best interest rates that we have seen in my career, its crazy not to look at your options.

If a lender does tell you no, it would be like going to a doctor and he says you have to have your arm amputated because you have a pimple on it. I think you are going to go get a second opinion, maybe even a third. To make sure you dont have to have it cut off. And that is exactly what we have here, if you go to a lender and he says, Well you are going to have to put down 20% you know he is not an FHA lender. So run out of there and call Michael at Velocity Financial and get yourself pre qualified.

Dan Havey, you have a great website, its called http://discountdreamhome.com and why dont you talk real quick about that. Its real simple, if you are looking to buy a foreclosed home, and as we discussed earlier they are many times the best homes to buy right now, they are vacant, they obviously have a highly motivated seller. You dont have to deal with all the troubles you would have to deal with from a regular or as we refer to them, an organic seller, because a lot of these people are upside down.

Duration : 0:7:49

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Tax on 1099C, Cancellation of Debt Income; Short Sale, Loan Modification & Foreclosure. Exception; Mortgage Forgiveness Debt Relief Act, Bankruptcy & Insolvency. Go To http://RealEstateMarketingThisWeek.com

Part 4 (Excerpt)

1099 C is for Cancellation of Debt Income Only, not for Interest Rate and Payment Reduction

So for people who find themselves in a very difficult situation considering these options whether it’s a loan modification or a short sale, whatever they need to do to relieve themselves of this particular burden of a mortgage, that for whatever reason they’re no longer able to maintain, they are not always considering the tax ramifications associated with taking a specific course of action, like this example the short sale option.

Right there is actually two pieces of tax component here, you have the forgiveness of debt income that we talked about, they still have the fact that you sold your house and you have to see if there was a gain on that. Over and above the cost basis of the home.

We talked about the 1099Cs a few moments ago, did you say that the lender sends a copy of the 1099C to the IRS? Absolutely.

Now I’m the guy for a few minutes ago who bailed on $400,000 and sold it for $300,000 am I going to get a copy of the 1099C if I haven’t given my lender my new address. Well that could be a problem, they will send it to the last address they have on record for you. And as a homeowner it’s my problem.

The IRS will get a copy, so they will look for it on your return, if you forget to put it on then you’re going to get a friendly notice from the IRS.

If somebody is going to do a short sale, its a fairly civil transaction and when I say civil I mean going for a short sale is horrible for them and their family, but it beats the alternative which is foreclosure, and I think the real problem is when there’s a foreclosure and the guy just walks away and moves off to El Centro California, he’s the one who’s really getting hurt.

So in the event that somebody takes a course of action, and I know that Velocity financial and Michael Barnes, youre not necessarily advocates for that short sale approach. It’s not normally the best course of action, we’ve been talking about loan modifications and it would help me when I talk to clients, or people who call from radio broadcasts who asked questions about loan modification process as part of a financial strategy, help me with some of the tax ramifications. Let’s say that I have a loan and I know the best thing for me is a loan modification, am I going to be faced with a 1099? A tax bill at the end of a loan modification?

Yes, the first of the two tax implications will apply which will be the debt forgiveness part.

I didn’t mean to interrupt you Mike, well I said there are several different types of loan modifications, I believe are you asking about when the loan modification is where they actually do forgive some of the debt?

Thats a point, I know there’s been a lot of discussion on the use of the TARP funds especially from the federal government regarding these banks that qualify for some of these funds, they have to do principle reductions for their mortgages. So let’s say there isn’t a principal reduction involved, from that aspect, its not a taxable event that could take place, since I’m not reducing my principal, I’m simply getting a reduction in my term or my rate.

That’s right, the only time that taxes would come into play is when the principal gets reduced because thats forgiveness of debt.

So let’s take that one step further, whatever mortgage interest I’m able to deduct on my taxes may be impacted if it’s a lower percentage, right because youll be paying less interest, but there’ll be no surprise 1099 coming your way if its just an interest modification.

One of the things that I like to make thing clear is that were trying to do the best for you the homeowner so you can stay in your home. The situation I’m talking about, the $400,000, the lender is more likely than not is not going to forgive $100,000, however the same lender is more than willing to reduce your interest rate so that your payment would be the same if they have done the principal reduction, because it’s not a permanent loss for the bank. If there is someone out there who’s telling you that they can have your mortgage reduced by tens of thousands or hundreds of thousands of dollars, it’s not going to happen and I doubt it’s going to happen anytime soon.

Duration : 0:5:58

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http://www.bruceoliver.com,stop foreclosure,mortgage advice,online mortgage advice,mortgage down payment assistance,foreclosure stop fha home mortgage loan california refinance,home equity loan,current mortgage rates

Duration : 0:1:3

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First Time Home Buyers use FHA Mortgage and Seller Paid Closing Costs to Buy Real Estate Now. Best Market Conditions for Foreclosures and Short Sales in Decades. Go To http://RealEstateMarketingThisWeek.com

Part 7 (Excerpt)

The old rules no longer apply and Suze Ormond should know that.

We have Dan Havey the author of Real Estates Future in the studio today.

Michael, I was just curious, back when I got into the industry many, many years ago there used to be a rule of thumb that if you were going to refinance you had to lower your interest rate by at least two percent and I know as time went along and products changed that really became unnecessary, but I am just curious in todays mortgage market its a lot different than we were dealing with even two years ago. Is that still true that there is a 2% rule? Whats going on now?

I happened to catch Suze Orman on television and she was talking about mortgages, the caller who called in to the program, the question became I believe similar to what Dan just asked, her comment was that basically if you’re in 6% interest rate or above now is the time to re-fi. That is what she said, a blanket recommendation. I know a lot of people put a lot of credence into what she says, maybe you could speak to that, the lowest interest rates you’ve seen in your career, you have been doing this for a while.

I have, and they are. You know there was a lot of speak the last couple weeks about the Fed, the Fed funds rate by the way is the lowest it’s ever been in history. As of this week the discount rate is to the point that banks are lending money to each other at nothing, the Fed funds rate for intrabank lending is at zero, the problem is the banks don’t have any money.

To be serious about the refinancing, because its a serious topic, I think people are starting to see their mail boxes filled with lots of advertising crap about refinance. I believe that doing the refinance is no different from doing a loan modification or buying a house, you need to sit down with the human being that’s local, that you can know is a legitimate source. You’re going to give all this personal information about you, your family, your kids, your Social Security number, you want to make sure you have somebody there that you know whos legit.

In regard to the old rule of thumb 2%, nothing could be further from the truth, and I will expand, but to the point of Ms Ormond that if youre at 6% or higher, that is a blanket statement and blanket statements never work. We just did a refinance for a guy who was at 5 1/2%, and it makes sense. Every situation is different, as far as how much do I have to lower my interest rate to make it work? It depends on the type of mortgage that you get.

The only type of loan to get today in December of 2008 is a 30 year fixed. I know that one of the things that was really interesting to me, and that you and I have referred clients to one another for several years, so we share a number of clients, were familiar with those families and those households, and this is Wednesday, on Monday and Tuesday of this week I’ve had seven phone calls from clients who you’ve already done loans for, refinances for, asking if this is the time to refinance a loan that is only a couple years old.

And I know in several of those cases the answer is yes you’re actually helping families right now with that process. I am and we do. To answer the question, you need to determine what the payback term is, in other words when your refinance is done it’s a new loan, there’s the title insurance, appraisals, lots of different things may need to be done, not in every case, but in most cases there are costs associated with that. The cost has to be offset by the amount of savings. Its a breakeven analysis

Absolutely it is, the shorter the breakeven the better the loan. I am working on a case right now which is going to be done in the next couple of days where the guy lowered his interest rate by an1/8 of a percent and it made sense for him. It’s not for everybody, 2 percent or lower, 2% is significant, now you’re talking about really significant savings in terms of cash flow…

Duration : 0:6:31

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