Archive for March, 2009

Beware of Foreclosure and Mortgage Rescue Scams

Sunday, March 22nd, 2009

You may have seen the stories in the paper and on television of the rise in foreclosure scams.There are new and different scams born constantly, and with the changing laws and offers of help to homeowners, you are all the more vulnerable if you are facing foreclosure or a change in your ability to continue paying your mortgage. You need to know what to watch for so you can beware.

In my book, Mortgage Walkaway Options (sold at www.MortgageWalkawayOptions.com) my co-author and I discuss some of the scams that have been recognized. But there have been new scams lately that have arisen in response to the new Obama legislation to help struggling homeowners.

The most common scam is a promise by someone or by a company to help with a loan modification. Many times these companies ask for fees up front and tell you that they can get your loan modified. In severe cases they ask you to make monthly payments to them instead of to your mortgage holder. This is illegal. Note that it is ILLEGAL in California for licensed brokers to ask for money upfront in exchange for obtaining a loan modification UNLESS you are hiring a law firm to do so. The one exception is if the company asking for the fee has met the qualifications required by the state Department of Real Estate (DRE). You can go the the DRE website and see a list of companies that have met these qualifications. http://www.dre.ca.gov. Look under the “Consumers” tab.dreamstime_4284009

Another scam involves companies (like those mentioned above) telling you that they will get you a loan modification if you quit claim your home over to them. They explain that if they have title to your home it is much easier for them to work with the lenders. This is simply not true. The lenders need to work with the homeowner who has a history with the mortgage. The problem is that a quitclaim does not transfer your mortgage with your property, so you will still be liable for the mortgage but will not have the property as collateral to get a work out plan.

Recently the Federal Trade Commission warned consumers about a new scam related to the new economic stimulus package. It involves a promise to help people qualify for a payment from the stimulus package in exchange for a small fee. Mostly this is done on the web and by use of email. The scammers tell you all you have to do is provide them with your bank account number so that they can deposit the money directly into your account. They then drain your accounts and disappear. Many times the information obtained is used for identity theft.

A variation of the above scam involves the scammers asking for a very small fee in order to obtain a list of economic stimulus grants that they can apply for. Sometimes this fee can be as little as $1.99. The credit card is then used for identity theft or to charge even larger sums of money. OR the small fee can be used as a down payment on a ‚Äúnegative option‚Äù agreement, which can charge hundreds or thousands of dollars unless the consumer cancels the account (which they usually don’t know about).

dreamstime_1960863Finally, there are websites that look legitimate and provide consumer links to information that promises to help with loan modifications or stimulus grants. Many of these sites look extremely legitimate, but when consumers click on the links they are downloading a virus that allows access to their computers. Scam artists then have access to personal information and use it to commit identity theft. Surprised that people would fall for all this? They do, and the numbers are rising. Fear and helplessness cause people to do desperate things.

Here are a few basics to remember:

1. NEVER quitclaim your home to anyone without consulting an attorney

2. DO NOT pay a fee to anyone to help you with your loan modification (unless it is your attorney). You can do most of the work yourself, and in my opinion with a much better chance at resolution‚but you need to educate yourself first. For help you can download my book at www.MortgageWalkawayOptions.com.

3. Do not pay money with your credit card on websites that promise to help or open links on such sites that say they can help you. All the help you need is available on the web at sites run by legitimate helpers like HUD (www.HUD.gov) or HopeNow (www.HopeNow.com, 888-995-HOPE). I also personally have links to some White House sites that provide a great deal of information about the current programs, so feel free to contact me if you would like that information.

4. GET EDUCATED‚know your options and how you can help yourself before you let anyone else help you (besides your lender, of course).

There are a lot of legitimate resources out there to help you. Best of luck to you!

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Stated Income Loans are Back For Those Who Qualify

Sunday, March 15th, 2009

You may have thought they were a thing of the past but there are some people who may qualify for the new stated income loans, and they are available now. Lenders who provide this type of loan are not plentiful and you will need to do some research to find a mortgage house that has a relationship with them. They are very strict with the requirements and you must have very good credit and a sufficient down payment, but for those of you who meet the requirements this is a great way to get a loan if you are self-employed or an independent contractor with a variable income.dreamstime_4613470

Here are the requirements:

1. 30% minimum down payment,

2. 700+ FICO score,

3. You must be self-employed (but CANNOT be in the real estate industry in any way),

4. Have cash reserves of 6-12 months of PITI

Note that only adjustable rate mortgages are available…there are NO 30-year fixed mortgages under this program. Still, if you qualify it may be the difference between getting a loan or not in this difficult market, where the overwhelming majority of lenders simply WILL NOT issue loans to those who cannot document steady income. Please remember that these types of loans are only available through certain private lenders, not mainstream lenders. If you need a reference to a mortgage broker who has a relationship with these types of lenders and can answer your specific questions, please feel free to contact me.

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First Time Homebuyer Tax Credits

Saturday, March 14th, 2009

Good news for first time homebuyers! If you purchase a home in 2009 you will be eligible for a federal tax credit of up to $8,000. For those of you who have been waiting to buy a home this news, combined with low interest rates and some nice sales prices, makes it a great time to start shopping. Here are the requirements:

1. You must be a first time homebuyer, meaning that you have not owned a principal residence in the last three years. Current or previous ownership of vacation or rental homes does not count and will not disquallify you.

2. Income limits: $75,000 for each unmarried borrower and $150,000 for married couples.

3. If you own and occupy the home for at least three years there is no requirement to pay back the credit (unlike the previous $7500 credit, which was required to be repaid).

4. The tax credit may be claimed on your 2008 returns…yes, that’s right.

There is one more great piece of news if you live in California: California has allocated $100,000,000 in tax credits to first time home buyers who purchase NEW CONSTRUCTION homes. The homes can be single family detached or attached but must never have been occupied. If you purchase one of these properties and you are one of the first 10,000 buyers to do so, you will receive a $10,000 tax credit from the state. Here are the requirements:

1. Property must be new construction (never occupied)

2. Buyer must live in the home for two years

3. The credit is allocated over a period of three years and cannot exceed $10,000 total

4. This program works on a first-come, first-served basis…if 10,000 people buy before you, you are out of luck.

One more So, happy house hunting! There are a lot of great deals out there.

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Fountain of Youth in Encinitas

Thursday, March 12th, 2009

I have always lived by the adage that if you discover something amazing you should share it with others. That is why I have to tell you about the Fountain of Youth Juice in Encinitas. Yes, I said ‚Äújuice,‚Äù and no, this is not your chain smoothie store where sugary frozen concoctions are mixed up (although they DO have delectable healthy smoothies and delicious sandwiches). You don’t have to be a health nut like me to fall in love with this place.

Owners Abdul and Tania took over this juice store from previous owners just two and a half years ago, and they have a cultish following that brings dedicated customers to them from as far as El Cajon, Mexico and Orange County. Once you visit them you will understand why.dreamstime_6915001

Ironically, one week after acquiring the business Abdul was diagnosed with Lymphoma. He opted to go through chemotherapy, which as most people know depletes nutrients from the body and causes many people to feel ill. Abdul combined daily fresh juice treatments with his chemotherapy‚he never felt sick or tired and he is now cancer-free. This is because the nutrients in the fresh vegetable mixtures he drank restored those in his body that the chemo dissolves.

Tania was diagnosed a while ago with adult onset diabetes and had to endure two insulin injections a day. Along with exercise and making better food choices, she began juice therapy‚she drinks 64 ounces a day of their green juice (a mixture of various vegetables like spinach, celery, parsley, and cilantro). She has cured her diabetes and no longer requires insulin shots or any medication.

Fountain of Youth juice provides many different types of juice therapy, helping those with cancers, candida and irritable bowel syndrome, for example.

stockvault_8084_20070703One of the most popular choices is the three day body cleanse. It consists of drinking 64 ounces of fresh juice for three days (a different juice each day, which you pick up beforehand). You simply drink 8 ounces every hour, with 8 ounces or more of water in between, and eat a healthy dinner (protein and vegetables)‚no sugars or starches. I personally have tried this and I can’t tell you how great you feel. You DON’T feel hungry because you are putting nutrients into your body, not starving yourself, so you actually have a great deal of energy. You cleanse your organs (liver, colon, intestines, bladder), lose a few pounds and just feel better. You can do this every few months if you like, or whenever you want a great cleanse. Abdul does it once a month.

If you are feeling sluggish or feel a cold coming on you can try a ginger shot. It is a concoction of fresh ginger, carrot, other veggies and fresh cinnamon. When you drink it your whole body warms up instantly and you will feel better…it is one of my favorites.

If you find yourself in Encinitas and want to stop by you will find that Abdul and Tania are a wealth of information on the role different vegetables, fruits, spices and supplements play in our bodies and their benefits to different organs. They are located at 168 N. El Camino Real, in the Baja Fresh/Daphne’s (old Albertson’s) shopping center, in the back. The number is 760.943.6862. Let me know what you think‚ĶSalute!

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Good News for Unemployed Citigroup Mortgage Holders

Wednesday, March 4th, 2009

If you hold a mortgage with Citigroup and are unemployed, the announcement made March 3 can help you with your payments. Citigroup has created a new program whereby it will temporarily lower mortgage payments for borrowers who have recently lost their jobs. dreamstime_5165617

Qualifications:

1. Recent job loss (you must provide proof of unemployment and sign a form indicating you are seeking new employment)

2. Borrower must be at least 60 days behind in payments

3. The home must be your primary residence (you must live there)

4. The program applies only to loans lower than or equal to $417,500

The payments will be lowered to an average of $500 a month for up to three months, and interest and penalties will be waived during this time. Citigroup currently holds over 1.4 million mortgages and services four million additional loans which will NOT qualify under this program.

Citgroup indicated that they believe this new plan will assist thousands of borrowers, and help prevent more foreclosures as the downturn in the economy leads to job losses. They are also hopeful that their program will prompt other lenders to follow in their footsteps. This big announcement follows Citigroup’s earlier news in November that it planned to modify loan terms by as much as $20 billion for borrowers who are at risk of falling behind on loan payments, but are currently not in default as of yet (how effective this program is remains to be seen). Both plans on Citigroup’s table were created from within the company, and the company denies the federal government had any role in it’s programs.

This appears to be a good faith effort on Citigroup’s behalf to assist troubled borrowers. It is a win-win situation to attempt to help borrowers in any way, as foreclosures effect not only the borrowers but have a great financial impact on the lender as well. With unemployment rates climbing monthly (the Labor Department figures show an increase to 7.6% in January, up from 7.2% in December 2008), this may be a lifeline to Citigroup mortgage holders to buy them some time for find alternate employment. Let’s hope other lenders follow their lead in the coming days.

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