Philadelphia Area Mortgage Blog

RESPA Section 8 – What’s a Smart Business Practice and What’s a Violation?

Above All Financial Services -Pennsylvania Mortgage Broker — Fri, 12 Sep 2008 18:16:46 -0500

Just when I think I've seen it all something else comes along to amaze me. Today's topic: Can a Mortgage Broker give a loan to a Realtor for free or at reduced rates in exchange for the promise of future business? To myself and some other educated members of ActiveRain this is a clear violation of RESPA Section 8 which prohibits anyone from giving or accepting a fee, kickback or any thing of value in exchange for referrals. To others, especially those in the state of Texas, this is just smart business. Well, it may be, but I certainly wouldn't want to chance a $10,000 fine in order to save a 1/2point on my mortgage loan nor would I put this offer out there in writing for the whole world to see.

For those who don't know (which I hope is none of us) RESPA stands for Real Estate Settlement Procedures Act and was first passed in 1974. The purpose of the law is to help consumers become better shoppers by requiring certain disclosures and forms and to eliminate kickbacks and referrals among those involved in the real estate transaction. This includes real estate agents, title companies, mortgage brokers, home inspectors and the like.

Here are some FAQ's straight from HUD's website:

Can a lender set up a contest for real estate agents under which the agent who provides the lender with the most business will win a trip to Hawaii?

No. Under RESPA, the trip itself, and even the opportunity to win the trip, would be a thing of value given in exchange for the referral of business.

Can a lender give a borrower an incentive, such as a chance to win a trip or a rebate, for doing business with the lender?

RESPA does not prohibit a lender or other settlement provider from giving the borrower an incentive for doing business with it as long as the incentive is not based on the borrower referring business to the lender.

Can a mortgage banker and a real estate broker advertise their services together, for example, on the same brochure or newspaper advertisement?

Nothing in RESPA prevents joint advertising. However, if one party is paying less than a pro-rata share for the brochure or advertisement, there could be a RESPA violation

Can a lender give a real estate agent note pads with the lender's name on it?

Yes. Such note pads with the lender's name on it would be allowable as normal promotional items. However, if the lender gives the real estate agent note pads with the real estate agent's name on it for the agent to use to market clients for its real estate business, then the note pads could be a thing of value given for referral of loan business, because it defrays a marketing expense that the real estate agent would otherwise incur.

Now, I know some of you astute observers will correctly point out that HUD doesn't say anything about brokering a loan for free or even less than what the average consumer would pay, but I think if something as minor as notepads with the Realtor's name on it are questionable, and just the opportunity to win a trip and not the trip itself is a violation, then why on earth wouldn't the prospect of saving perhaps thousands of dollars in loan fees in exchange for future referrals not be a violation? After all aren't loan fees something of value? Personally, losing a license or being fined is not worth it to me, but I guess some people would do anything to make or save a buck.

I'd wager a free or reduced price home loan that HUD would side that this scenario is indeed a violation. Any takers?

Honk if You're Paying My Mortgage

Above All Financial Services -Pennsylvania Mortgage Broker — Wed, 04 Mar 2009 00:02:11 -0600

I have a lot to say about the President's new plan to help homeowners who can no longer afford their home. I am sure I will have even more to say once the full details of the plan are released. This was originally posted on my own mortgage information blog but I am reposting it here. Plus, I really like this bumper sticker.

Via www.mortgage411center.com

On March 4, 2009 the complete details of the Homeowner Affordability and Stability Plan will be released. I have previously expressed my opinion on the plan, based on what has already been publicized, particularly objecting to the incentives and rewards included in the program to both banks and homeowners. Though, this plan is predicted to help between 7 and 9 million homeowners keep their home, through low interest refinances, loan modifications, and even principal reductions, The President stated in his televised speech last week that the program will only be available to help "responsible borrowers". Though this statement was met with a round of applause in the audience, it of course leads to the following question: Exactly who are the responsible borrowers?

First some facts:

1) It is estimated that about 93% of Americans are not behind on their mortgages. So this plan is geared toward only 7% of the population.

2) According to the fact sheet: This is a "new program that will provide the opportunity for 4 to 5 million responsible homeowners who took out conforming loans owned or guaranteed by Freddie Mac and Fannie Mae to refinance through the two institutions over time".

3) There are lenders and companies that are already successful in getting loans modified for homeowners without the intervention of the government and do not leave tax payers responsible with the tab.

My main problem with the plan is that the government should not be involved in the business decisions of banks and lending institutions and that the true responsible homeowners (the 93% who are not behind on their payments) should not be footing the bill. However, that is only a matter of opinion. The fact of the matter is that those who may truly need assistance may not be able to get it, and those who did make bad decisions may still be able to get bailed out.

As stated above the President's new program is only available to homeowners with loans owned or guaranteed by Freddie Mac and Fannie Mae. Now I don't expect the average homeowner to understand the significance of that statement, and I would guess that our government doesn't really understand it either. However, the fact that the program is only limited to loans guaranteed by those two institutions means that that there will be no help to borrowers who have non-conforming loans also known as subprime mortgages. Subprime mortgages were often given to borrowers with credit problems and carried higher interest rates. While one can make the argument that perhaps these borrowers should not be helped out, one must also note that there are many cases of borrowers who were placed into so-called subprime mortgages when they really could have qualified for a conforming loan. It has also been stated that the reason it is important to prevent foreclosures, is that even borrowers who are able to pay their mortgage suffer when foreclosures in their neighborhood cause declining home values. Yet, this program does nothing to offer assistance to borrowers that perhaps have a much greater risk of facing foreclosure, which seems a little contradictory .

Furthermore, I notice that the statement equates Fannie Mae and Freddie Mac loans with responsible borrowers and conforming loans. This is misleading as well. A loan can still be considered "conforming" yet still be a stated income, low down payment or an adjustable rate mortgage. That is, it is entirely possible that a borrower who has a conforming mortgage was not really "responsible" and bought more home than he could afford.

As you can see determing the "responsible borrowers" is not as easy as the government's plan makes it out to be. However, even if we are operating on the assumption that only borrowers with conforming loans should be able to take advantage of the program, should all conforming borrowers be classified as responsible? Should a person who lost his job and wants to continue to collect unemployment checks be included as part of the responsible borrowers simply because he as a Fannie Mae loan? Should the Realtor or Mortgage Loan Officer whose income greatly dropped because of the economy yet refused to get a part-time job to make ends meet be helped out as well? What about those who took the path to homeownership even though they had no savings to rely on or emergency funds set aside in case the they lost their jobs or income?

Which leads me to wonder, why the sudden government interest in helping "responsible" people anyway. Should we now overlook the fact the foreclosure problem in the housing market was caused in part by the government insisting that banks make loans to less than qualified borrowers? Should we all be picking up the tab for other people bad luck or bad decisions? One thing is certain, we are probably going to see a lot more of these bumper stickers going around:

You can get your sticker too at www.tngop.org

Stimulate your Mortgage or Real Estate Business - The Federal Government Shows You How

Above All Financial Services -Pennsylvania Mortgage Broker — Fri, 27 Feb 2009 21:27:47 -0600

We've all heard the saying "It takes money to make money" meaning that in order to sucessfully grow your business you have to be willing to invest in it. Our federal government has recently taken this theory to heart with the passing of a massive government spending plan aka the Stimulus Plan in some circles and the Porkulus Plan and the Generational Theft Act in others.

The government's "it takes money to make money approach" is based on an economic theory of the spending "multiplier effect". That is for every dollar the US government spends in a certain sector the economy will grow by a multiple of that amount. Here are the spending areas that one economist states will give the government the most bang for the buck:

Extend Unemployment Insurance Benefits 1.64

Temporarily Increase Food Stamps 1.73

Issue General Aid to State Governments 1.36

Increase Infrastructure Spending 1.59

As you can see for every $1 the government spends to incease food stamps the economy will grow by $1.73. So if the government spends $100 million dollars to increase the amount of food stamps, the economy will grow by $173 million.

This should lead those of us who are protesting the amount of government spending to reconsider. I mean why spend only a trillion or so dollars? If it is so easy to spend our way to prosperity, let's just spend a gazillion dollars, which when the multiplier efffect is taken into account, willl take the term "economic superpower" to a whole new level.

While, I'm not an economic expert, I am guessing that this mulitplier effect can also be applied to small businesses as well. For instance you may have found that for every dollar you invest in direct mail marketing you can grow your real estate or mortgage business by 1.49. Or perhaps you know that for every dollar you invest in internet marketing your business grows by 1.32. New office furniture or carpeting for the office may increase your revenue by 1.2.

As you can see, what every small business owner needs to do is come up with their own stimulus plan, spend a few million on their businesses, and take full advantage of this spending muliplier effect. Don't be afraid to spend even if it seems frivolous. So if you've always wanted say, a frisbee golf course, go for it! If all goes as planned ( and why wouldn't it?) , we should all be able to retire early to some foreign country where the cost of living is cheap. (Probably since they haven't yet figured out how to spend their way to a prosperous economy).

Now I know what you are thinking: I don't have a few million dollars lying around, and unlike the US government I can't just print my own money, so how can I get this stimulus plan to work for me?

Well I listened to the president's address to Congress earlier this week, and he stated that in order to get this economy moving the banks need to start lending money again. In fact he went as far as to say that "if we do not restart lending in this country, our recovery will be choked off before it even begins". He also stated that our economy is based on credit, which is true, and if you overlook the fact that our credit based economy collapsed because of the fact that banks lent money to people to couldn't afford to pay it back, I don't see any reason why the banks would be unwilling to lend you a few million dollars in order to create a stimulus plan of your own.

However, in the event the loan officer at the bank turns down your application for a small business loan just remember "Yes We Can!". And if all else fails, we will always have Hope and Change You Can Believe In.

cartoon courtesy of www.townhall.com.

Written by Michelle Chamberlain

For mortgage and business financing information visit:

www.mortgage411.com

www.aboveallmortgage.com

www.ezmerchantadvance.com

$8000 Tax Credit Available to First Time Home Buyers

Above All Financial Services -Pennsylvania Mortgage Broker — Mon, 23 Mar 2009 22:37:11 -0500

This information on the $8000 Tax Credit for First Time Buyers was originally posted on my mortgage information blog. I know the tax credit is generating a lot of inquiries so I am reposting the information here. This is a great incentive for those who may be looking to buy, but are still on the fence.

If you are in the market to buy your first home you may be able to take advantage of a new federal tax credit for first time homebuyers. Here are some facts about the tax credit:

The tax credit is for first-time home buyers only, a first-time buyer is defined as someone who has not owned a home in the past three years .
The tax credit does not have to be repaid. This is a change from last year's tax credit which was basically an interest-free loan, repaid over 15 years.
The tax credit is equal to 10 percent of the home's purchase price up to a maximum of $8,000. So someone purchasing a $60,000 home would only receive a $6,000 credit, while someone purchasing a $300,000 home would only receive the $8,000 maximum.
The credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009.
Single taxpayers with modified adjusted gross incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit. Those with incomes over that amount may still qualify for a partial tax credit.

As you can see this is a great incentive for those who are considering purchasing a home this year, but are unsure if now is the right time to take the path to homeownership. For more reasons why 2009 may be a great time to buy, please read:

Why 2009 is the Time to Buy

Why 2009 is the Time to Buy - Part 2

Remember, before you even begin to look at houses you should contact a mortgage professional to get pre-approved for a loan, so that you will be sure you qualify and so you will know exactly how much home you can afford.

Please contact us with any questions or to get started today.

Information courtesy of Pennsylvania Mortgage Professional Michelle Chamberlain. For more mortgage related information visit www.mortgage411center.com. For information of small business loan alternatives visit www.ezmerchantadvance.com.

Help! I Can't Afford to Pay My Mortgage

Above All Financial Services -Pennsylvania Mortgage Broker — Sat, 21 Mar 2009 13:34:53 -0500

Many homeowners today are finding themselves in a situation where they can no longer afford to pay their mortgage. Perhaps they lost their job or because of the economy their income has been greatly reduced. Perhaps they had an adjustable rate mortgage and could no longer afford to make the payments once their interest rate increased. Or perhaps they simply bought more home than they were realistically able to afford. If you are a homeowner in this situation, where should you turn?

In my opinion there are a lot of folks out there that are in over their heads and may not be able to keep their homes no matter how hard they try. However, I also think there are a lot of homeowners who can be helped, but they just do not know who to contact or what to do. To read more about the different options available if you can no longer afford your home click here.

Written by Michelle Chamberlain

Homeowners who would like more information on mortgages please visit www.mortgage411center.com

Business owners who like information on small business loan alternatives visit www.ezmerchantadvance.com.

Keep the Change

Above All Financial Services -Pennsylvania Mortgage Broker — Wed, 04 Mar 2009 14:15:17 -0600

No matter what your political persuasion, I don't think you can deny the power of the graph posted above. Just wondering, who is going to make whole all the shareholders that lost their savings and retirement money in the stock market. Why stop at bailing out homeowners who have lost equity? Will we be bailing out 401(k) plans next?

Next time, Keep the Change

Pennsylvania Senator Arlen Specter - Your Tax Dollars at Work

Above All Financial Services -Pennsylvania Mortgage Broker — Sun, 01 Mar 2009 22:12:23 -0600

A few weeks ago I sent an email to US Senator Arlen Specter letting him know that I opposed the massive spending bill that was about to be voted on in Congress. Specter was one of three Republican Senators who was considering voting for the bill and being a resident of Pennsylvania, the state which he represents, I wanted to let him know that I opposed this bill and that he should as well. Today I finally received a response back from the Senator. Here it is:

Dear Mrs. Chamberlain:

As a senior member of the Appropriations Subcommittees on Foreign Operations and Defense, I have been uniquely engaged in foreign affairs while serving in the U.S. Senate. The 110th Congress is faced with many important international issues: the reconstruction of Iraq, the spread of nuclear technology, state sponsorship of terrorism, human rights, and global epidemics. To examine the challenges faced by the U.S. internationally, I have traveled extensively and entered into dialogue with the leaders of friendly and adversarial countries alike. My experience has led me to the conclusion that active engagement, open dialogue, and the strategic use of America's position on the United Nations Security Council is critical to achieving international peace and security.

With respect to our foreign aid budget, I believe it is important for the U.S. to give valuable assistance overseas while keeping with our national interests. On December 18, 2007, I joined many of my Senate colleagues in writing to President Bush, to urge that in Fiscal Year (FY) 2009 the Administration's continue its past efforts to increase U.S. investment in the International Affairs Account.

I supported the FY08 Foreign Operations Bill. This measure included $1.03 billion for the Migration and Refugee Assistance account, with $45 million designated specifically for the Emergency Refugee and Migration Assistance Fund, a funding level that reflects America's fundamental commitment to helping those who have been forced to flee their native countries. I also supported the inclusion of $1.56 billion in funding for the Millennium Challenge Account, an innovative foreign assistance initiative that provides assistance to countries committed to pursuing healthy political and economic policies. Additionally, the bill included an important contribution of $550 million to the Global Fund to Fight AIDS, Tuberculosis and Malaria.

I believe that a U.S. emphasis on international diplomacy and development is critical to achieving global security. Rest assured that I will continue to advocate for dialogue with the international community and robust funding for vital U.S. international assistance programs.

Thank you again for contacting me. The concerns of my constituents are of great importance to me, and I rely on you and other Pennsylvanians to inform me of your views. Should you have any further questions, please do not hesitate to contact my office or visit my website at http://specter.senate.gov.

Sincerely,

Arlen Specter

Honestly, do you think that whoever took the time to send me this canned response could have at least bothered to address my concern? Could they at least have read it and pretended to care? Needless to say, guess who I will NOT be voting for next election?

Written by Pennsylvania Mortgage Professional Michelle Chamberlain

For mortgage information visit www.mortgage411center.com and www.aboveallmortgage.com.

For small business financing visit www.ezmerchantadvance.com.

Why 2009 is the Time to Buy - Part 2

Above All Financial Services -Pennsylvania Mortgage Broker — Thu, 15 Jan 2009 01:15:57 -0600

Personally I hate it when everyone in the real estate business talks about how "It's a great time to buy!". Of course they are going to say that, they are trying to sell you a house or a mortgage loan, or they somehow make their money in Real Estate, what do you expect them to say? (Donald Trump are you listening? Have you ever once stated that it was NOT the time to buy???) However, I do think that those who are saying it this time, taking into account the combination of low interest rates and low home prices, may actually be right. Here's why.

As a mortgage professional, I am seeing a large increase in the number of homeowners looking to refinance their mortgage loan. They have all heard about the current low interest rates and want to take advantage of them. Right now, I have enough refinances to keep me busy for the foreseeable future. I have no need to market to prospective homebuyers, but I am. There are a lot of great incentives to buy right now and I don't want anyone to miss out on these opportunites. To learn why read the previous post, A New Home For the New Year - Why 2009 is the Time to Buy.

However, I am not the only mortgage professional who thinks it is time to buy. Tennessee Mortgage Professional Danny Thornton thinks it is Time to get off the fence, and shares with us the new commercial from the National Association of Realtors with the same message. I like the commercial so much I have posted it on my own website and am sharing it here as well.

My only complaint is that the commercial should have advised potential homebuyers to get preapproved for a mortgage loan, before talking to a Realtor. What good is convincing potential homebuyers to get off of the fence and buy a home only to find out they don't qualify for a mortgage loan in the first place?

If you think 2009 is the time to buy and are ready to get off the fence and into your own home visit www.aboveallmortgage.com.

Pre-Approval Letters. Are They Worth the Paper They're Printed on?

Above All Financial Services -Pennsylvania Mortgage Broker — Mon, 07 Jul 2008 16:59:26 -0500

It's no secret. Buying a home is not as easy as it used to be. Gone are the days when you could NOT have perfect credit, NOT document your income, NOT put any money down and still get a loan. As a result, real estate agents are starting to notice that what would have once been a slam-dunk deal is now falling through because the buyer cannot get approved for the loan. Being educating about the mortgage pre-approval process can help minimize the effects of losing deals and this means both happier buyers and sellers.

First, let's clear things up. I've noticed some comments about lost deals recently that have left me a little bit confused. One agent commented that he recently lost a deal because his buyers were "prequalified for a certain amount" and they put an offer on a home at the high end of the buyers' price range. The deal never closed in the end because based on his income, the buyer couldn't get a mortgage for the higher amount. Other agents comment that they will not even show a client a home unless they have a "pre-qualification letter" from the mortgage company. Still others wonder, "What good is having a buyer pre-approved if the mortgage company decides in the end that the buyer is not really qualified?" The confusion here? It seems that the terms "pre-approved" and "pre-qualified" are often use inter-changeably, when in fact they are different.

Here's how a pre-qualification works:

Mortgage Company: What is your yearly income?

Buyer: About $125,000

Mortgage Company: And how is your credit?

Buyer: Great!

Mortgage Company: And how much money do you currently have in the bank?

Buyer: About $25,000

Mortgage Company: In that case, you are prequalified for a loan in the amount of $400,000 at our best interest rate.

Now here's how the pre-approval process works. Same questions as above but in this case the mortgage company will actually verify the information by:

•· Ordering a credit report to see whether the buyer's credit is actually "great" or if they actually have a lower credit score that would put them in a higher interest loan or worse, credit problems that would prevent them from getting a loan at all.

•· Verifying the income with copies of the buyer's paystubs and W2's so we can be prove that the buyer's income is actually $125,000 and that this is not just the figure he hopes to make if he works a lot of overtime, gets that large commission or bonus check, or works "under the table".

•· Verifying assets with copies of bank or other account statements so we can prove that the buyer really has these assets and didn't just make a large deposit because he took a loan elsewhere or got a large cash advance from his credit cards.

Once all the information is verified, the loan is put through computerized or "desktop underwriting" and the pre-approval letter can be issued to the buyer. The buyer and the agent can then use this information to look for a home. Some buyers like to find their home first and then get a preapproval, but this can lead to disappointment if the buyer finds that he cannot really qualify for the home of his dreams.

Does this mean the pre-approved loan is 100% guaranteed? Well, no. The loan will still be subject to an appraisal, and will still have to go through regular underwriting as the desktop underlying is only preliminary. The underwriters will check once again that the information that was provided by the buyer is correct and legitimate, so if the buyer submitted recent paystubs for his job but "forgot" to mention he just quit his job the loan is NOT going to be approved. Also, if the buyer has some credit problems or is a non-conventional borrower, he may be preapproved for a loan program that the lender decides that, due to stricter guidelines, they no longer want to offer and the deal may never make it to closing. This is unfortunate and cannot really be avoided but fortunately is also rare.

Is the process of prequalification or preapproval worthless? Of course not. The prequalification process may be useful if a buyer wants to begin a preliminary home search online or wants to get an idea of what they can afford because they are thinking about buying a home. However, the best chance you have at making sure you have a qualified buyer is to have a pre-approved buyer and not one that is just pre-qualified. The pre-approval means that not only is the buyer serious he is also able to get a loan. And for anyone involved in the transaction of buying and selling a home, that is not worthless at all!

Written by Michelle Chamberlain of Above All Financial Services, a Delaware County Mortgage Broker. To apply for a Pennsylvania Mortgage loan or to learn more visit www.aboveallmortgage.com or www.mortgage411center.com.

The Mortgage Bailout Reward Program

Above All Financial Services -Pennsylvania Mortgage Broker — Mon, 23 Feb 2009 00:21:06 -0600

By now you are probably well aware of the massive spending stimulus bill that was just signed into law. You also may have heard that the President also has a plan to help homeowners that cannot afford to pay their mortgage. Known as The Homeowner Affordability and Stability Plan, the White House says that it contains 4 key goals:

Refinancing help for four to five million homeowners who receive their mortgages through Fannie Mae or Freddie Mac
New incentives for lenders to modify the terms of sub-prime loans at risk of default and foreclosure
Steps to keep mortgage rates low for millions of middle class families looking to secure new mortgages
Additional reforms designed to help families stay in their homes

This plan has sparked outrage from responsible citizens who see this massive mortgage entitlement plan as unfair to homeowners who pay their bills on time, and who live within their means. What is really outrageous about this plan however, is the rewards and incentives which are built into the program. Yes, not only is the government (read: taxpayer) subsidizing the lower interest rates and principal reductions which will be given to borrowers under the program in order to mortgage payments more affordable, but also extra incentives such as:

"Pay for Success" Incentives to Servicers: Servicers will receive an up-front fee of $1,000 for each eligible modification meeting guidelines established under this initiative. They will also receive "pay for success" fees - awarded monthly as long as the borrower stays current on the loan - of up to $1,000 each year for three years.

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.

Yes, you are reading that correctly. The government will now pay lenders $1,000 up-front to modify a loan, despite the fact that the government is also subisidizing the interest rate and principal reductions. This is supposed to be an incentive for lenders to participate in the program, but isn't the fact that the government is now subsidizing any losses the lenders would be taking by modifying the loans incentive enough? The lender also gets a $1000 a year bonus for up to three years if the borrower remains current on the loan because... Um, I really don't know what the rationale for this is other than the fact that the government likes spending OPM (Other People's Money).

But that's not all. The borrower also gets an incentive to stay current on the mortgage, in the form of a $1000 per year principal reduction on the mortgage for the next five years. Excuse me, but what happened to the old days when the incentive to stay current on the mortgage was that you get to keep your house? Are we actually paying people not to be deadbeats? What's next? Free gas for life as long as you make your car payments on time? Free groceries as long as you promise to feed your hungry children? At some point aren't we crossing the line between helping to fix the economy and just being plain old stupid?

Written by Michelle Chamberlain and originally posted at www.mortgage411center.com.

To apply for a mortgage online visit www.aboveallmortgage.com.

For an alternative to a small business loan visit www.ezmerchantadvance.com.

Refinancing Your Mortgage Loan - A New Year's Resolution You Can Keep

Above All Financial Services -Pennsylvania Mortgage Broker — Tue, 06 Jan 2009 00:19:14 -0600

It's the New Year again and that means lots of promises and plans to change for the better. If you are like most Americans you are probably telling yourself that now that 2009 has arrived you will either: lose a few pounds, get back into shape, take up a new hobby, get organized, take control of your finances, or some other resolution that will probably become abandoned before Valentine's Day. This year, why not start the New Year off right and cross one of these items off the list right now? If you have resolved to take control of your finances, then refinancing your mortgage loan may be in order, and there has never been a better time to do so then now. (If you don't yet own a home and would like to make homeownership a goal for 2009, stay tuned. I'll be covering that next.)

Why refinance your mortgage in the New Year? The reasons are many:

1) Mortgage interest rates are at an all time low and lower rates mean lower payments.

2) If you still have an Adjustable Rate Mortgage (ARM) you can refinance and enjoy a low fixed rate.

3) If you have equity in your home you can get cash out to use for other purposes.

4) Mortgage guidelines are tightening so you may not qualify for a loan progam when you finally do decide to refinance.

5) No one knows if home prices will continue to decline and waiting to refinance may mean losing equity and not being able to qualify in the future as well.

Visit www.aboveallmortgage.com to learn more about the loan process and to apply online. Then with that out of the way, you'll have the rest of 2009 to work on achieving you other goals. Happy New Year!

Written by Michelle Chamberlain, Above All Financial Services

Homeowners, get the mortgage loan you need at www.aboveallmortgage.com

Business owners, get the cash you need at www.ezmerchantadvance.com

A New Home for the New Year. Why 2009 is the Time to Buy.

Above All Financial Services -Pennsylvania Mortgage Broker — Thu, 08 Jan 2009 00:14:20 -0600

Since, I previously posted on making refinancing your current mortgage a goal for the New Year, I now would like to address why those who are looking to purchase a home should do so in 2009. First, let's be clear, the real estate market of today is a lot different than it was a few years ago, where almost anyone could get approved for a loan, regardless of credit, income, or assets. However, assuming your credit is in good shape, you have a steady income which you can document, and you have sufficient savings there is still money to lend. If you are not quite ready to buy, I will be writing next about coming up with a plan to help realize your dream of homeownership.

Why should you buy in 2009?

1) Mortgage interest rates are at an all time low and lower rates mean lower payments.

2) Home prices have dropped making homes more affordable. In some areas there are real bargains.

3) Excess inventory make this a buyer's market, and sellers may be more willing to negotiate.

4) First time homebuyers may be eligible for a tax credit of up to $7500 on homes purchased before July 1, 2009.

5) The combination of these factors actually make buying a home now a wiser choice than at the peak of the market when there was a frenzy to outbid other potential buyers on already overpriced homes, no additional incentives to buy, and the lingering fear that the bubble would one day burst.

6) Waiting for the market to reach the bottom is a bad idea. The only way to know when we've truly reached the bottom is when home prices start to go back up.

For those who are thinking about buying but may still be "on the fence", you may need to ask yourself "Is It Time to Develop a Sense of Urgency?", and consider taking advantage of these opportunities before it is too late. For those who are ready to act, the first step to purchasing your new home is to contact a mortgage professional to learn more about the loan process, find out how much you can afford, and to get pre-approved. Getting pre-approved before you start looking for homes will show that you are a serious and qualified buyer and will give you an advantage when you decide to make an offer on a home.

Visit www.aboveallmortgage.com to take the first step to becoming a homeowner in 2009.

Upper Darby Township Single Stream Recycling Program Begins in 2009

Above All Financial Services -Pennsylvania Mortgage Broker — Sun, 28 Dec 2008 00:23:29 -0600

A few weeks ago I opened my front door to find a new larger recycling bin on my porch with a pamphlet inside introducing the new recycling program in Upper Darby Township. Ironically, I received the exact same pamphlet in the mail a few days later (so much for wanting to save trees). However, I was pleased to see that Upper Darby has expanded the recycling program to include glass and plastic bottles and that items to be recycled now can be placed all in the big blue container instead of having to separate everything.

Items to recycle now include:

Cardboard
Food Boxes
Glass and Cans
Plastic Bottles (numbers 1 and 2)
Mail, Magazines & Newspaper
Phone Books

Items NOT to be recycled are:

Lightbulbs or Windows
Dishes, Pyrex or Ceramics
Foam Packing or Styrofoam
Plastic Bags
Unmarked Plastic, Toys, Chairs, Laundry Baskets.

Unfortunately, recycling is still collected every other week. The schedule and map can be found in the 2009 calendar distributed by the township to residents. Additional information on the Upper Darby Recycling Program can be found online, although the website is not yet updated to reflect all of the changes for 2009.

Additionally here are some other resources I've used for recycling in Upper Darby Township:

Primos Elementary School collects paper (newspaper, mail, magazines) in a bin which is located in the side parking lot of the school. The paper collected helps to raise money which benefits the school. This is a great alternative to the every other week at home collection since you can drop off paper 24 hours a day and it benefits the students. Check to see if your neighborhood school participates in this type of progam as well.
The Clifton Heights Acme has a bin for the collection of plastic bags inside the front entrance. Although I try to reuse plastic bags whenever I can I sometimes end up with more than I could ever use and drop them off here. Other supermarkets in your area may possibly collect plastic bags as well.
Also outside of the Clifton Heights Acme is a mailbox for the collection of eyeglasses that are no longer needed. This collection bin is sponsored by the Lions Club , contact your local branch for a collection box nearest you..

A complete list of Pennsylvania Recycling Drop Off Locations can be found on the Pennsylvania Department of Environmental Protection website.

Information courtesy of Pennsylvania Mortgage Broker, Michelle Chamberlain.

To recycle your current mortgage into a low fixed rate visit www.aboveallmortgage.com

For small business financing visit www.ezmerchantadvance.com

Test Driving AnnualCreditReport.com

Above All Financial Services -Pennsylvania Mortgage Broker — Mon, 22 Sep 2008 10:53:35 -0500

With lenders tightening guidelines even for well qualified mortgage borrowers, it is now more important than ever for potential mortgage applicants to have good credit. Part of every consumer's mortgage plan should be checking their credit report for errors and outdated information. Reviewing your credit report will also give you a snapshot of how the lender will see your finances and show you any outstanding loans, credit card balances and perhaps most importantly your payment history.

The easiest way for a consumer to get copies of all three credit reports - Equifax, Transunion, and Experian - is to go online to www.annualcreditreport.com, a site set up by the credit bureaus to provide consumers with a copy of their report once per year free of charge. Since credit can sometimes be a confusing subject for consumers I decided to "test drive" the website to get a better gauge of the experience. Now keep in mind that I am a mortgage professional, so it is my job to review and to understand credit reports, but this review is written wearing my "consumer hat" and not my "mortgage professional hat" - that is I wanted to see how the site works for someone who may understand little or nothing about credit, credit reports or credit scores.

The site is easy enough to use. You can select to view your report from one, two or all three of the bureaus. Though you enter your personal data through the main website, you will then be transferred to each credit bureaus own site to get the individual reports. (Note - If you've ever ordered your credit report online from the individual bureaus you may have a user name and password already associated with that site and you will need to use than log in information. ) I was able to obtain my reports from Experian and Equifax with no problem. For some reason I was told I would need to order the Transunion report through the mail. I used annualcreditreport.com when the site was launched a few years back and had the same problem. I could not get a clear answer as to why from the Transunion representative I spoke to back then. Apparently it was just something on my account that still has not been figured out. No worries for me though, because I receive my Transunion credit score for free each month through my credit card company so I know there is nothing suspicious on that report.

I reviewed the two reports I did manage to obtain and they are fairly uneventful- nothing negative and no errors. But what does this mean to me as a consumer? It is entirely possible to have an error free and completely positive credit history yet not have a high enough score - generally 720 or better - to qualify for the best mortgage programs. In fact, as a mortgage professional I was not even sure what my score would be based on the reports I was looking at. Not a problem, because although annualcreditreport.com is the site for "free" credit reports, it is also an opportunity for all three bureaus to market products that you do have to pay for, like credit scores or credit monitoring.

I ordered by score from Experian for $5.95 since it was $10 cheaper than ordering a score from Equifax. Here is where things get confusing. Experian now uses the VantageScore, which was developed as a direct competitor to the more well-known FICO score. The particular score used doesn't really make a difference (you should have great credit with one model and poor with another), except for the fact that VantageScores can range from 500 -990 while FICO scores range from 300 to 850. What does this mean? Well remember that high score of 720+ we all hope to obtain? That is only for the FICO model. A 720 on the VantageScore model would be equivalent to a C grade (think school report cards) and you would actually need to have a score of 900 or better to qualify for the best mortgage rates.

When you purchase your credit score you will also get a list of factors that are lowering your score - such as having high balances on your revolving accounts (credit cards), recent late payments, or history of collection accounts. This information can be helpful in determining what a consumer should do to raise his or her score. For instance if the main factor for the score is high balances on credit accounts, paying down the balances can help to increase scores but if you have a good payment history and use credit wisely, but haven't had credit established for a long period of time, then you will see that noted as well. Unfortunately, the only fix for that situation is time.

The Bottom Line.

AnnualCreditReport.com is easy enough to use, but the free reports do not contain enough information to understand if your credit is actually great, poor or somewhere in between. In order to get a true picture of your credit, especially for those who wish to raise their score, you are probably going to need to purchase one or more of the products from the different companies. This can cost from $5.95 for a VantageScore at Experian to $39.95 for a 3 in 1 credit report and score from all three bureaus available from Equifax. Transunion also offers unlimited access to your reports and scores from all 3 bureaus for $14.95 a month but this may be overkill unless your reports contain multiple errors or problems.

I would recommend AnnualCreditReport.com for those consumers who are already aware of the status of their credit and wish to monitor their report yearly for errors or fraudulent activity. If you truly have no idea what type of credit you have, or you have had some credit problems and wish to bring up your score you are going to want to purchase additional products. With all this being said, having you credit report and score is useless if you do not actually understand how to build and maintain stellar credit. Stay tuned, in my next post I will shares tips for cleaning up inaccuracies, building credit, and keeping your report error free.

Credit Information courtesy of Michelle Chamberlain, a Pennsylvania Mortgage Specialist in Delaware County, Pennsylvania. For mortgage financing needs in Pennsylvania visit www.aboveallmortgage.com.

Direct Mail Marketing – What NOT to Do

Above All Financial Services -Pennsylvania Mortgage Broker — Wed, 10 Sep 2008 00:08:09 -0500

OK, I'll admit, I am by no means a marketing expert. I do however, use direct mail to market my business and have been somewhat successful. While, I don't feel I am qualified enough to tell you exactly what you should do in order to have a killer direct mail marketing campaign, I am fairly certain I have enough experience to tell you what you shouldn't do.

Now, some of these things may seem obvious, but these examples are all based on actual direct mail pieces I have received, read, and subsequently trashed. You know the saying "one man's trash is another man's treasure"? Well maybe it really is true. See, I've since found a new use for this "marketing garbage" and have recylced it to help you improve your own marketing campaigns.

Learn from these examples and soon you too will be a quasi marketing expert:

1. Don't Be Deceptive. Now, I know that deceptiveness and marketing sometimes go hand and hand however if you want to uphold your reputation, it is best to honest. Sure, obscuring the truth may generate more calls, but when the client finds out what you are really selling, or what you really charge, that call is not going to result in a sale. I recently wrote about a letter I received from ING Direct, and how they were marketing adjustable rate mortgage loans, which were cleverly disguised as being better alternatives to fixed-rate mortgages. Sure the real information was included in the fine print on the back, but how many people actually read that? The low advertised interest rate was sure to generate a ton of calls, but how many people would back out once they found out what kind of loan this really was? Bottom line. Honesty is still always the best policy, even in marketing.

2. Don't Target Your Market if You Don't Target Your Lists. Marketing experts will tell you it is better to market to a smaller pool of qualified prospects than a larger pool of people you know nothing about. Previously, I wrote about another mortgage letter I received, this one from Wachovia, which seemed to be targeted to a very specific type of customer. Among other things, the bank was looking for someone who wanted to purchase a home and offered an incentive of a $500 gift card to those who applied before a certain date. Now this would have been a perfectly acceptable letter - if they were targeting refinance customers - but searching for a customer who happened to be buying a home, within that particular timeframe, and meets all of the other criteria is like searching for a needle in a haystack. Eventually you may find what you're looking for but it is hardly worth the effort.

3. Don't Forget Your Message. The other day I received a postcard which I am assuming was a joint market effort between a Realtor and a Mortgage Company. I'm not certain because although the Realtor's information was on one side and the Mortgage Company' s on the other, there was really no indication that these people even knew each other, let alone worked together. Now joint marketing can be effective, and it can certain reduce costs but it has to look like collaboration and not like you were too cheap to pay for your own postcards. Not only that, but on the mortgage side it only had pictures of the two loan officers along with their names and telephone numbers and some silly slogan about "doing what's right". Were they selling mortgages or looking for volunteers for charitable causes? I don't know. The message was lost and I couldn't help but wonder why they wasted that space with a cliché instead of using those lines to sell their products or services. Which brings us to the other side of the postcard...

4. Don't Forget Your Customer. The Realtor actually had a message on her side of the card (she got the side without the address and postage) but the message was WRONG. She wanted to let me know that she sold a house in my neighborhood, she has no more inventory left, and that I should contact her if I wanted to list a house or if I knew anyone else who did. She included a picture and the address of the house she sold but that was about it, no sales price, no days on the market, no boast about selling in one day, nothing else that would have made someone say "Wow! What an Impressive Agent!" and give her a call. You sold a house? Congratulations, but I thought that was your job? You're low on inventory? Not my problem. Think the customer really cares that now that you were finally able to make a sale you are wondering where your next paycheck is going to come from? Marketing should focus on the customer, not the commission.

5. Don't Forget to Follow Up. This is for those who follow the rest of the rules and actually send out a good direct mail marketing piece, only to manage not to lose the sale in the process. A few months ago I received a different postcard, this time from a contractor. Now this was a nice postcard and a costly one - jumbo sized, glossy, color printing on both sides. I liked the message that the contractor was sending, something along the lines of us being neighbors which implied some sort of reliability- you wouldn't screw over a customer that lived down the street right?

I've dealt with contractors before who have been less than reliable and not very professional and this guy seemed just the opposite. I decided to give him a call to get some work done and left a message on his voicemail. It took him almost a week to return my call. Now I know that contractors often cherry pick jobs but this guy had no idea whether I needed a whole house remodeled or a nail hammered into the wall. When he finally did call, he agreed to come over and give me an estimate but never showed up. For some reason, I called him yet again. He apologized, sounded sincere, and tells me he'll come out the next day, only to not show up again. Why bother to solicit new business if you are never going to follow through with any leads generated? Kind of defeats the purpose doesn't it? Guess he really wasn't neighborly after all, or interested in growing his business.

Let's be honest, direct mail has a pretty low response rate compared to other types of marketing. Sometimes, you simply cannot get people to respond, even if they are interested. But, if you sabotage your efforts by making mistakes like the ones mentioned above, you don't stand a chance of making any new sales. Direct mail can be effective, and it can be successful, if implemented correctly.

(Another customer,... another sale...)

So now that you've learned What Not to Do, you just need to get out there and not do it!