A New Chapter Begins

Yesterday, I accepted a new position as VP of Sales and Marketing at LandmarQ Lending. LandmarQ currently has 7 locations around the Twin Cities with lots of exciting plans in the works. I am excited to make the transition and begin this new chapter in my career.

In addition to getting back on track with regular blog posts about the state of the housing and mortgage industry, I will also be on WCCO 830 AM every other week on Saturdays from 11 AM - 12 PM discussing pertinant topics.

Until then, please feel free to contact me if you need assistance while I go through this transition.

By Ronny Loew - Ronny is the Regional Sales Manager of LandmarQ Lending. Whether you are buying your first home, moving up, downsizing, relocating, keeping your home as an investment to buy a new primary residence, buying investment real estate or refinancing, Ronny has specific strategies to make it easy and a financial win. He can be reached at 612-251-4030 or ronny@ronnyloew.com

Moving (Up) in a Down Market - Seminar

We have scheduled our next Moving (Up) in a Down Market seminar for Tuesday, May 12th, 6:30 PM at Cornerstone Mortgage in Burnsville.

Come and see how the numbers play out!! With rates at lifetime lows, home prices re-set to 2002 values and payments in some cases at HALF of what they were 2 years ago, you can't afford to sit on the sidelines! Even if you have a home to sell, there is a potential win for you too.

The greatest wealth transfer of our lifetimes is taking place NOW. In 10 or 20 years, we will all be looking back at this period and either applauding or scolding ourselves for our actions. Spend an evening learning how you can be the next success story.

Click Here for More Information

Click Here to Register

By Ronny Loew - Ronny is the Next Home Specialist with MN Home Loan Partners. Whether you are moving up, downsizing, relocating, keeping your home as an investment to buy a new primary residence or refinancing, Ronny has specific strategies to make it easy and a financial win. He can be reached at 952-808-2815 or rloew@houseloan.com

Interesting Explanations

Preparing for this Tuesday's seminar, Moving up in a Down Market, I have been doing a ton of research.

I have come across some very interesting and easily digested translations of concepts such as inflation and Keynesian Economics. I am sharing them here.

Video: Keynesian Economics Is Wrong: Bigger Gov't Is Not Stimulus

Blog: Politics In Plain English - Who is going to pay for this stimulus package?

I hope you find this interesting!

The seminar is Tuesday night, March 31st at 6:30 PM. Click here to sign up.

You may also register by calling Sandra Loew at 952.808.0042 or by e-mailing her at sloew@houseloan.com

By Ronny Loew - Ronny is the Next Home Specialist with MN Home Loan Partners. Whether you are moving up, downsizing, relocating, keeping your home as an investment to buy a new primary residence or refinancing, Ronny has specific strategies to make it easy and a financial win. He can be reached at 952-808-2815 or rloew@houseloan.com

Moving Up in a Down Market - Seminar

Afraid to move up in this market? Learn the math behind buying a home at a great price and with a great interest rate! Take advantage of the opportunities to enhance your current financial stability in today’s low mortgage interest rate environment by joining us for our upcoming seminar and Q&A forum.

Topics include:

• Eye-opening financial benefits of buying a home now versus waiting for economic recovery
• Pricing and preparing your home to sell in this market
• How a loss on your sale may be recouped with a good buy
• Cost effective services to rent and manage your home if it doesn’t sell

Tuesday, March 31 at 6:30 p.m.
Cornerstone Mortgage Company
436 Gateway Blvd., Burnsville, MN 55337

Featured Speakers:
Ronny Loew - MN Home Loan Partners
John Stenroos - MN Real Estate Team
Greg Nelson - Olsen Thielen CPA
Lisa Atkinson - Set to Show Homes
Nina Haugen - NTH Enterprises

RSVP: 952-808-0042 or sloew@houseloan.com

By Ronny Loew - Ronny is the Next Home Specialist with MN Home Loan Partners. Whether you are moving up, downsizing, relocating, keeping your home as an investment to buy a new primary residence or refinancing, Ronny has specific strategies to make it easy and a financial win. He can be reached at 952-808-2815 or rloew@houseloan.com

Refinance Opportunities Now Available to Those Who Lack Sufficient Equity

The Obama Administration unveiled the final details of its "Making Home Affordable Program," which is designed to help up to 9 million American families refinance or modify their loans to a payment that is affordable now and into the future.

One of the initiatives in this program is aimed at helping responsible homeowners "refinance" their loans to take advantage of historically low interest rates. Here are some common Questions and Answers about the Refinancing Initiative in the program.

REFINANCING INITIATIVE

Who is eligible?

You may be eligible if:

• You own and currently occupy a one- to four-unit home.
• Your mortgage is owned or controlled by Fannie Mae or Freddie Mac.
• You are current on your mortgage payments.
• The amount you owe on your first mortgage is about the same or slightly less than the current value of your house.
• And, you have a stable income sufficient to support the new mortgage payments.

How do I know if my loan is owned or controlled by Fannie Mae or Freddie Mac?
Simply call or email me. I'll help you determine if your mortgage is backed by Fannie Mae or Freddie Mac.

I owe more than my property is worth. Do I still qualify to refinance under the Making Home Affordable Program?
Eligible loans will include those where the first mortgage will not exceed 105% of the current market value of the property. For example, if your property is worth $200,000 but you owe $210,000 or less, you may qualify. The current value of your property will be determined after you apply to refinance.

If I am delinquent on my mortgage, do I still qualify for the Refinance Initiative?
No. But the good news is, you may qualify for the Modification Initiative. Contact me to discuss your situation and review your options.

I have both a first and a second mortgage. Do I still qualify to refinance under Making Home Affordable?
As long as the amount due on the first mortgage is less than 105% of the value of the property, borrowers with more than one mortgage may be eligible for the Refinance Initiative.

Will refinancing lower my payments?
That depends. If your interest rate is much higher than the current market rate, you would likely see an immediate reduction in your payment amount.
However, if you are paying interest only on your mortgage, you may not see your payment go down. BUT... you will be able to avoid future mortgage payment increases and may save a great deal over the life of the loan.

What are the terms of the refinance and what will the interest rate be?
All loans refinanced under the plan will have a 30- or 15- year term with a fixed interest rate.
The interest rate will be based on market rates at the time of the refinance. Currently, interest rates are at historical lows, which makes this a good time to examine your refinancing options.

Will refinancing reduce the amount that I owe on my loan?
No. Refinancing will not reduce the principal amount you owe. However, refinancing should save you money by reducing the amount of interest that you repay over the life of the loan.

Can I get cash out to pay other debts?
No. Only transaction costs, such as the cost of an appraisal or title report may be included in the refinanced amount.

How do I apply for the Refinance Initiative?
Call or email me today to discuss your specific situation and to examine your options. If this plan is right for you, we can begin working on your refinance immediately.

• As part of the discussion, we may need to look at the following information:
• Recent pay stubs to help determine your gross (before tax) household income.
• Your most recent income tax return.
• Information about any second mortgage on your house.
• Account balances and minimum monthly payments due on all of your credit cards.
• Account balances and monthly payments on all other debts, such as student loans and car loans.

As always, if you have any questions or would like to discuss how this may specifically impact you, I'd be happy to sit down with you. Just call or email me to set up an appointment.

By Ronny Loew - Ronny is the Next Home Specialist with MN Home Loan Partners. Whether you are moving up, downsizing, relocating, keeping your home as an investment to buy a new primary residence or refinancing, Ronny has specific strategies to make it easy and a financial win. He can be reached at 952-808-2815 or rloew@houseloan.com

Becoming the Wild West. Don't Go it Alone...

A quick wrap of what is taking place out there in the real estate and mortgage world right now. It's a roller coaster, to say the least. A statement of the obvious for some. But for those who are focusing on the positive news of low rates, low home prices and tax credits as this blog points out, it is also important to understand the realities we are also facing.

All the way from the individual to small and large corporations, even the federal government, everyone is scrambling for solutions. But the more solutions, bailouts and stimuli are rolled out, the more confusion they cause. Those ready to finally take action are questioning their decisions with each new headline.

Yesterday, clients of mine were headed to a closing on a home they had waited for a long time. They originally wrote the offer on a short-sale property in mid-October, 2008. The offer was finally accepted the first week of February but the sellers insisted on closing at the end of the following week, a very fast closing. On closing day, the sellers informed all parties that it was now too fast for them and they needed until the end of the month. Yesterday was the new closing date. We were informed first thing in the morning that the sellers side had filed papers in court to halt the sale and they were seeking to cancel the sheriff's sale and reinstate their mortgage.

After a full day of banter and saber rattling between agents, closers, bank reps and attorneys, the closing went through shortly before 5:00 PM.

It turns out, the sellers and the bank holding their mortgage were concerned that they might be taking an unnecessary loss by proceeding with the short sale when new details are coming out in a week on the new stimulus bill. So they were trying to sabotage the closing.

If I have said it before, I will say it again, NO ONE can afford to go into a real estate transaction in this market without proper representation. The buyer's agent on this purchase saved it from falling apart by knowing the law, knowing what to say and to whom to say it.

Certainly people are trying to save money on the sale of a home by selling For Sale by Owner when they are underwater. Buyers perceive they may save a few bucks if they make an offer directly to the seller and cut real estate commissions. Investors now seeing higher financing costs are paying cash and cutting corners on necessities like title insurance. It is only a matter of time until these savings turn into nightmares.

It is no different in getting mortgage advice. Though it used to be rare to see guideline changes more than a few times a year, this market is bringing change at an alarming rate. Numerous announcements are sent daily announcing sweeping changes taking effect immediately or within days. Those dragging their feet waiting for lower rates are missing the point that appraisal values and changing guidelines may make a drop in rate worthless if they are no longer qualified for the loan.

Bloomberg published a great article about the realities in the mortgage world this week. Even for well qualified borrowers, it can be difficult to get financing right now as banks try to write only the best loans and restore investor confidence in their institutions:

Low Mortgage Rates a Mirage as Fees Climb, Eligibility Tightens

It is going to take a while, to say the least, for this crisis to calm down. We believe things will get worse before they get better. So be sure to have the right advisors around you to help protect you and resist the urge to be penny wise, pound foolish.

By Ronny Loew - Ronny is the Next Home Specialist with MN Home Loan Partners. Whether you are moving up, downsizing, relocating, keeping your home as an investment to buy a new primary residence or refinancing, Ronny has specific strategies to make it easy and a financial win. He can be reached at 952-808-2815 or rloew@houseloan.com

Obama Unveils Homeowner Affordability and Stability Plan

President Obama unveiled his plan to help stabilize the housing market and keep millions of borrowers in their homes.

The Homeowner Affordability and Stability Plan includes two initiatives to help struggling homeowners. One is a refinancing program for homeowners with less than 20% equity in their homes, or who owe more than their home is worth. The second program attempts to lower monthly payments for homeowners at risk of losing their home. In addition, the plan includes a third initiative to support low mortgage rates by strengthening confidence in Fannie Mae and Freddie Mac.

Many of the plan’s details are still being worked out and will not be announced until March 4, here is an overview of the plan’s main components.

Refinancing Initiative
Under current rules, those families who own less than 20% equity in their homes have a difficult time refinancing and taking advantage of the historically low interest rates. Therefore, the refinancing initiative in the new plan provides refinancing help for homeowners with less than 20% equity in their homes or who owe more than their home is worth. This initiative is open to homeowners who have conforming loans which are guaranteed by Fannie Mae and Freddie Mac, and who owe up to 5% more than their home is worth. According to the plan, “credit-worthy” or “responsible” homeowners can refinance their mortgage into a 30- or 15-year, fixed-rate loan based on current market rates. The refinanced loan, however, cannot include prepayment penalties or balloon payments. For many families, this low-cost refinancing may help reduce their mortgage payments by up to thousands of dollars per year.

As with the rest of the plan, details about this initiative will be released at a future date—including what, if any, credit score requirements will be included.

Stability Initiative
This initiative aims at providing help to individual families as well as entire neighborhoods by helping reduce foreclosures and stabilize home prices. It is intended to help homeowners who are struggling to afford their mortgage payments, but cannot sell their homes because prices have fallen significantly. The goal of this initiative is simple: “reduce the amount homeowners owe per month to sustainable levels.” To accomplish this, lenders are encouraged to lower homeowners' payments to 31 percent of their income by lowering their interest rate to as low as 2% or by extending the terms of the loan. In addition, lenders can also lower the principal owed by the borrower, with Treasury sharing in the costs.

Homeowners who are current on their mortgages but are struggling can still apply for this program. As such, this is one of the few programs designed to help homeowners who may face delinquency soon, but are current at the moment.

Since the focus of this initiative is on helping families and neighborhoods, investment properties do not qualify.

This initiative also includes a number of additional elements and incentives that benefit homeowners and lenders alike, including:
Incentives to Help Borrowers Stay Current: To provide an extra incentive for borrowers to keep paying on time, the initiative will provide a monthly balance reduction payment that goes straight towards reducing the principal balance of the mortgage loan. As long as a borrower stays current on his or her loan, he or she can get up to $1,000 each year for five years.

Reaching Borrowers Early: To keep lenders focused on reaching borrowers who are trying their best to stay current on their mortgages, an incentive payment of $500 will be paid to servicers, and an incentive payment of $1,500 will be paid to mortgage holders, if they modify at-risk loans before the borrower falls behind.

Supporting Low Mortgage Rates
As part of the Homeowner Affordability and Stability Plan, the Treasury Department is increasing its funding commitment to Fannie Mae and Freddie Mac to ensure the strength and security of the mortgage market and to help maintain mortgage affordability. This portion of the plan will use using funds already authorized in 2008 by Congress for this purpose.

The increased funding will enable Fannie Mae and Freddie Mac to carry out ambitious efforts to ensure mortgage affordability for responsible homeowners, and provide forward-looking confidence in the mortgage market.

Again, the government plans to unveil the final details of the plan on March 4, 2009.

For now, you can download a sheet of common Questions and Answers produced by the government at: www.treas.gov/initiatives/eesa/homeowner-affordability-plan/ConsumerQA.pdf

I will continue monitoring the plan as new information becomes available. If you have any questions or would like to discuss how this may specifically impact you, I’d be happy to sit down with you. Just call or email me to set up an appointment.

By Ronny Loew - Ronny is the Next Home Specialist with MN Home Loan Partners. Whether you are moving up, downsizing, relocating, keeping your home as an investment to buy a new primary residence or refinancing, Ronny has specific strategies to make it easy and a financial win. He can be reached at 952-808-2815 or rloew@houseloan.com

Economic Stimulus Plan Benefits the Housing and Mortgage Industries

Just signed and sealed…a $787 Billion Stimulus Plan made up of tax cuts and spending programs aims at reviving the US economy. Although the package was scaled down from nearly $1 Trillion, it still stands as the largest anti-recession effort since World War II.

Home owners and potential homebuyers stand to gain from key provisions in this stimulus plan.

Here is what we know as of today...

Tax Credit for Homebuyers
First-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit. Remember a tax credit is very different than a tax deduction – a tax credit is equivalent to money in your hand, as opposed to a tax deduction which only reduces your taxable income.

The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000. Buyers will have to repay the credit if they sell their homes within three years.

Additional Housing-Related Provisions

Tax Incentives to Spur Energy Savings and Green Jobs — This provision is designed to help promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.

Landmark Energy Savings — This provision provides $5 Billion for energy efficient improvements for more than one million modest-income homes through weatherization. According to some estimates, this can help modest-income families save an average of $350 a year on heating and air conditioning bills.

Repairing Public Housing and Making Key Energy Efficiency Retrofits To HUD-Assisted Housing—This provision provides a total of $6.3 Billion for increasing energy efficiency in federally supported housing programs.Specifically, it establishes a new program to upgrade HUD-sponsored low-income housing (for elderly, disabled, and Section 8) to increase energy efficiency, including new insulation, windows, and frames.

Expanding Housing Assistance—This provision increases support for several critical housing programs. It includes $2 Billion for the Neighborhood Stabilization Program to help communities purchase and rehabilitate foreclosed, vacant properties.

More Help for Homeowners in the Future
Another thing to keep an eye on in the coming weeks is President Obama’s plan to help struggling borrowers before they are faced with a default on their mortgage.

According to reports, the Obama administration is discussing plans to help borrowers who are struggling to stay afloat, but who have not yet fallen behind on their payments. At this point, details are scarce; however, reports indicate that President Obama is looking to spend approximately $50 Billion to directly help homeowners before they face foreclosure and financial disaster.

While this is good news for individual homeowners, it will likely be good for the housing industry as a whole. That’s because, assisting struggling borrowers before they default should help stop the wave of foreclosures, which are estimated to top two million this year. That, in turn, will help stabilize home prices.

The Economic Stimulus Plan is huge, and impacts a number of industries. I’ve highlighted some of the major provisions that may impact you now and in the future.

As always, if you have any questions or would like to discuss how this may specifically impact you, I’d be happy to sit down with you. Just call or email me to set up an appointment.

By Ronny Loew - Ronny is the Next Home Specialist with MN Home Loan Partners. Whether you are moving up, downsizing, relocating, keeping your home as an investment to buy a new primary residence or refinancing, Ronny has specific strategies to make it easy and a financial win. He can be reached at 952-808-2815 or rloew@houseloan.com

10 Hidden Details You Must Know if You Are Considering a Refinance Right Now

There has been a deafening buzz about low rates and refinancing lately. The phones are ringing off the hook and loan applications are up 124% according to the MBA.

Jubilation has been felt by those who have decided to hunker down and ride out the mortgage industry. This has been the sign many have been waiting for that they were right for sticking it out when 70% of the competition has left for other careers.

Once again, there are many factors that the media are not covering that are very important to be aware of when considering whether a refinance makes sense or if it is even possible. What follows is a quick heads up on many of these factors. If you are not hearing about them from your lender, you might want to ask and/or get a second opinion, which we'd be more than happy to provide.

10 Hidden Details You Must Know if You Are Considering a Refinance Right Now

1. The lowest rate quotes are usually on 15 day lock periods. The time needed to get an appraisal, title work, processing, underwriting, closing and funding normally takes 21 to 30 days. Overload at big players are making loans take 45+ days to complete. So this is all but a fallacy.
2. Appraised values and comp checks are coming back very low. This refinance wave is forcing a number of home owners still in denial about drops in value to have a brutal reality check. 42% of homes in the US are upside down right now, meaning the debt on the home is greater than the value. Due to the drop in value and equity, many will now need private mortgage insurance, eating up the savings of a rate drop. This reality check is expected to bring about a new wave of defaults as people lose hope.
3. Tangible Net Benefit Requirement in MN. The State of Minnesota has a requirement that there must be a tangible net benefit to refinancing. This is a good thing as it is keeping many unnecessary loans from closing.
4. Get the whole quote. Cost and timing are every bit as important as rate. As stated earlier, rate lock periods and the cost associated with extensions and re-locks for missed closings can make all the difference. Make sure you are getting a rate quote for a realistic time period. Also ask about the "break even" point on a refinance. That is the monthly savings divided into the cost to refinance. The number of months it takes needs to be less than the time you expect to remain in the home.
5. Big Banks offering the best rates can't handle the volume. A source at Wells Fargo told me that they are so short staffed right now that they have an average of 1500 people on hold for rate quotes at a time. They are letting anyone who has time take the calls. This loan originator had 49 loans in process at once as a team of one. They typical loan originator without a team can handle 4 to 8 loans a month. The fallout from missed rate locks will be enormous. Work with a lender that has the capacity to handle your loan and deliver an on-time, stress free closing.
6. When the lowest rate hits, it is too late to begin. There are two dates in recent memory where I can recall a low in rates being hit. One was in January 2008, when 30 year fixed rates hit 5.375%. The entire country was trying to lock in. Computers jammed from the overload and by the time they unjammed, rates had come back up to 5.75%. The second was a week and a half ago when it hit 4.75%. Two hours later, traders were taking profits and the rate was back above 5%. The following several days, the media was bust creating false expectations by talking about what had happened on that one day. If you are interested in refinancing, get started now and give your loan officer marching orders on what you want and permission to get it for you if it happens. We are providing this service at the Adopt My Mortgage, mortgage management page on www.themortgagescoop.com.
7. Paying points can help but may not be right for everyone. Paying points and staying with the same loan for many years can have a defined and consistent return on investment. But that is also placing a speculative bet on the fact that rates will never be lower. In a previous post on this blog, I talked about the return on investment a client earned by buying his rate down. At that time, no one knew we would see rates get to where they are today. For that person to refinance now would be throwing those buydown costs away and in retrospect, they were unnecessary. Having said that, how much lower can rates go? I don't have an answer to that. But most say rates will stay low for a while and then rise as we come out of this crisis never to get this low again. So to place that bet now might be a winning strategy.
8. FHA Streamline requires no appraisal, no income or asset verification and no credit report. One of the most successful refinance options right now is only available to people already in an FHA loan. The FHA Streamline is very simple. If your rate is going down, you are approved! Also, since rates are expected to be higher in the future and FHA loans can be assumable, this might be a great strategy to sell in the future.
9. Private Mortgage Insurance is not currently available for cash out transactions or investment properties. Any loan for more than 80% of a property's appraised value requires mortgage insurance. A loan that results in more than $2000 in cash back or if it is combining a second mortgage or equity line (that was not used to buy or improve the home) into a new first mortgage is considered cash out. Since Minnesota is still considered by the mortgage insurance companies to be a "declining value marketplace," there is no private mortgage insurance available at this time. FHA is available for cash out loans over 80% in Minnesota, but with a maximum loan of $318,000 as of 1/1/09.
10. FHA Secure is over 12/31/2008. This was a program introduced by the Bush Administration that allowed a new FHA mortgage even if a 2nd mortgage on the property made the debt total more than the value. This was helpful for ARMs that were resetting or Balloon loans that were due. The program ends 12/31/09. But loans that have an "FHA case number" before the end of '08 can still utilize the option if approved. Translation - you have the first 2 days of next week to act if this applies to you. GO!

I hope this is helpful. Call me with questions. We are here to help!

By Ronny Loew - Ronny is the Next Home Specialist with MN Home Loan Partners. Whether you are moving up, downsizing, relocating, keeping your home as an investment to buy a new primary residence or refinancing, Ronny has specific strategies to make it easy and a financial win. He can be reached at 952-808-2815 or rloew@houseloan.com

A Day for Action - A Thanksgiving Gift

The markets are reacting very favorably to recent announcements by Barack Obama and The Federal Reserve. As a result we are going to see very good mortgage rates today! This could be great news for those planning to purchase or hoping to refinance into a lower rate in order to hunker down during this economic crisis.

Yesterday's announcement of President Elect Obama's economic team and this morning's announcement of a new plan by the Federal Reserve to purchase securities backed by mortgages and other assets. The plan is designed to improve the flow of credit, which is like the oil that helps the gears of our economy to turn.

This news has given Mortgage Backed Securities a big bump in value. Most mortgage rates are derived from the value of MBS so this is very good news!

We mentioned last week on our radio show that the value of MBS was being squeezed between two powerful factors. One was the 200-day moving average which was keeping the value from dropping too far. The other was a "falling trend line" which was keeping the value from going too high. The two lines were converging toward the end of last week and we knew there was going to be a break out to one direction or the other.

Rates were either going to get much better or much worse very soon. Of course, we were hoping for good news but the volatility of late has made it tough to predict much of anything. We are very happy to see it go this way. Having said that, we never know how long a rally like this will last so we are most likely going to encourage our clients to lock in to these rates while we know they are here.

We take our clients mortgages under management. Then, we watch and wait ready to pounce on opportunities like these. We are currently querying our database for those who will benefit.

Please do not hesitate to contact us so we can see if we can improve your payment and/or get you into a stable, more favorable loan.

By Ronny Loew - Ronny is the Next Home Specialist with MN Home Loan Partners. Whether you are moving up, downsizing, relocating or keeping your home as an investment and buying a new primary residence, Ronny has specific strategies to make it easy and a financial win. He can be reached at 952-808-2815 or rloew@houseloan.com