IF IT SOUNDS TO GOOD TO BE TRUE……

I was perusing some online info the other day and came across this article on the new York Daily News Site:

RADIO ‘FORECLOSURE SPECIALIST’ LAVETTE BILLS HELD IN $800G MORTGAGE CON

BY Melissa Grace and Edgar Sandoval
DAILY NEWS STAFF WRITERS  Thursday, March 19th 2009, 10:16 PM

A Bronx real estate broker who hosted a radio show on WBLS and WLIB inviting distressed homeowners to contact her for help was charged Thursday with ripping them off instead.  Lavette Bills, head of MTC Real Estate, was charged along with Kirk Lacey, a Jamaican who lives in Florida, in a brazen $800,000 mortgage fraud scheme that allegedly preyed on people fearful of foreclosure.  In one case, Bills, 36, persuaded a Bronx homeowner who had called the show for help to put Bills’ name on the deed to her house on Tinton Ave. by promising to get the homeowner a loan to pay off the $38,000 mortgage. Bills sold the home to a straw buyer, according to the U.S. attorney’s office and the FBI. Bills allegedly made $150,000 on the crooked deal, including taking a $50,000 broker’s fee for the bogus sale. The homeowner, who just wanted to pay off the small mortgage, is now in foreclosure. Thanks to Bills, the new mortgage on the house totals $337,500, prosecutors said.  Antoine Brown, 34, the homeowner’s grandson, said he was unaware of the pair’s arrest, but was glad other people would not fall victim to their scheme. He first learned about the pair in a radio commercial. Bills’ business cards describe her as a “foreclosure specialist,” and she hosted a program on WBLS (107.5 FM) and WLIB (1190 AM) in 2007 on which she discussed mortgages and foreclosures, prosecutors said. Her Web site warns customers who go elsewhere “you have a right to feel cheated.” Bills and Lacey, 36, were each charged with conspiracy to commit bank fraud and face 30 years in prison and $1 million in fines. At an arraignment in federal court, Bills was freed on $250,000 bond. Lacey was freed on $150,000 bond and was ordered to surrender his passport and handgun.

Interesting article, eh?  Just proves the point that if it sounds to good to be true it is.  There is an entire industry of investors and scammers out there who focus on “distressed” homeowners for the sole purpose of separating a homeowner from their equity.  I had a case once where one of these “investors” offered the seller a great deal, they would catch up her mortgage payments and when they found a buyer pay her $1,000 and she got to walk away clean (oh, and she got to live in the house till it sold).  She thought it was awesome, until I did a CMA and marketing plan and at the end of my efforts to sell she walked away with about $12,000.  So, this so called investor who was going to save her was actually just taking away $11,000 of her money.  See all those handwritten signs and ads that say something like “we buy houses”?  Why do you think they are buying houses?  It is to make a profit, not for the goodness of their souls,

Don’t get me wrong, these people are not all evil and there is nothing wrong with making a profit.  I just believe payments for services rendered do not have to include taking advantage of poorly educated homeowners in distress.  Here’s what to do if you are behind on your mortgage and thinking of selling:  Call up a reputable real estate agent.  As a matter of fact, call 3 or 4 of them.  Get competing opinions.  Compare their service, compare their ideas, compare their estimates of the market value of your house.  If you want to, call up those investors to.  Some of them actually do a nice job, with a positive resolution for the homeowner.  Above all else, COMPARE and GET SECOND OPINIONS!  Remember, the activities of real estate agents are regulated by law, by ethics rules, by broker policies, etc.  Who is regulating the investors preying on the distressed homeowner?

As always, you can call me Direct at 717-371-0557 or at the Office 717-490-8999, email me atJason@JasonsHomes.com or send me a text message using the tool to the right of this post!

Your Friend in Real Estate,
Jason

Search for Lancaster County Homes for sale by clicking here!

FANNIE MAE SAYS NO TO LENDERS WHO WANT TO CUT YOUR COMMISSION IN SHORT SALE SITUATIONS!

Fannie Mae released a new rule in their lender servicing guide published February 24, 2009. Part VII, Section 504.02 states:

“Effective March 1, 2009, closing of preforeclosure sales may not be conditioned upon a reduction of the total commission to be paid to real estate agents to a level below what was negotiated by the listing agent with the borrower, unless the fee exceeds 6 percent of the sales price of the property in aggregate. Servicers are reminded that they must continue to obtain any approvals that may be required by interested third parties in connection with preforeclosure sales.”

While I must point out that in accordance with state law all commissions are negotiable between sellers and brokers individually and in no way set by a fixed standard, it is welcome news that Fannie Mae is requiring servicers to honor our contracts with our clients. I have always found it troubling that lenders feel it is necessary to cut our commissions in a short sale situation. After all, the agents are usually doing a herculean amount of work just to push these things through. Loan servicers should be thanking us, not trying to punish us!

This rule should help put an end to this unreasonable and unnecessary practice. On the other hand, there are certainly a large number of short sales that are not Fannie Mae loans. In those cases, I was thinking about this and struggling with a way to express my thoughts in a way you could use to make lenders understand why this is, in my opinion, an unacceptable practice. I came across a blog posting by Walter Sanford (www.WalterSanford.com/blog) that articulates a suitable response fairly well, so with attributing the following text italicized in quotations to Mr. Sanford, here you go:

This is the letter that I would send:

Date

Name
Company
Address
City, ST  ZIP

Name:

Today, I received your request to lower the commission I require my sellers to pay for my help in determining whether a short sale will solve or mitigate damage toward achieving their goals.  I also have presented a marketing plan and determined value.  I have made suggestions to enhance value in addition to marketing and showing the property to buyers who I develop from my marketing.  My sellers are happy with this arrangement.  I will not adjust my commission.

The contract that I have with the sellers is in writing.  It has been dated and signed.  Substantial monies have been expended by my company to execute my promises.

As you must know, you have no right to interfere in my listing contract, because you are not a party to it.  You are the lender, and we have offered you a reduced amount on your payoff in return for a full reconveyance.  This has been necessitated due to the market and poor lending practices.

Your interference in my contract in tortuous interference in the relationship that I have with my seller, and I request you cease and desist in any further attempts to modify the existing contract between my seller and me.

After taking into consideration the market indicators that I have sent to you and if you find that you need more money, please request more money.  Please do not try to modify a contract with which you have interest.

Sincerely,

Name
Company Name

***As always, this is my opinion.  If you want a green light on implementation, go see your attorney.”

So there you go, Walter says it better than I could have. He is correct; the lender has no business sticking their nose into your contract. It is, in my opinion, a suitable response to a ridiculous request. It may work, it may not, but next time I am involved in a short sale I am going to take Mr. Sanford’s advice!

FINALLY, AN EASY TO USE OPEN HOUSE INTERFACE FOR CONSUMERS IN LANCASTER COUNTY!

Here at Weichert, we have been at the forefront of open house marketing for a long time.  Our websites [ www.JasonsHomes.com , www.WeichertEH.com & www.Weichert.com ] have always featured all of our open houses information online, with photos, customizable tours, printable brochures, mortgage info, you name it.

Unfortunately, while consumers benefited from this, if they wanted to see open house listings from other brokers, they had to wait until Sunday to look at the paper.  Oh, sure, we have listings from all the brokers on our sites, you can search that info anytime, but due to the nature of the technology we simply couldn’t host all the open houses.

Well, that is all changing now.  On January 1st there will be a new website for consumers to search open houses in real time, “24/7”!   Consumers can go online and search for upcoming open houses by any member of the Lancaster Association of Realtors (LCAR).  Any home that is listed in the MLS and being held open on any day of the week will be here.  Consumers can search by price, by area, by date, they can get maps and directions, see multiple photos, it’s all there!

The new site is www.LancasterOpenHouses.com and LCAR is beginning a multimedia campaign in the next week or so featuring signs, billboards, print and online ads.  So, when you are planning your open house visits for this week, stop by the website and check this easy to use resource for buyers and sellers in Lancaster County!  If you don’t want to shop open houses and want to visit homes for sale on your schedule, you can always call me, I’ll be happy to help!

As always, you can call me Direct at 717-371-0557 or at the Office 717-490-8999, email me at Jason@JasonsHomes.com or send me a text message using the tool to the right of this post!

Your Friend in Real Estate,
Jason

Search for Lancaster County Homes for sale by clicking here!

NEW MORTGAGE RULES TO PROTECT CONSUMERS IN PENNSYLVANIA

Check out the press release from the Department of Banking I posted below.  Great changes, putting things into law that should always have been there, hopefully this puts an end to the predatory lending practices that the recent licensing law changes may have missed.

If you’d like to read the complete Code Changes, check out this PDF

PA Bulletin Rules & Regulations

If you’d like to read the correspondence from the Secretary of Banking to the Mortgage Lenders explaining these changes, check out this PDF

Letter to Lenders

As I have said before, there is no substitute for an educated second opinion, so before you get a mortgage or refinance, call me at 717-371-0557, I’ll be happy to review your mortgage terms with you to make sure you are protected!

FOR IMMEDIATE RELEASE COMMONWEALTH OF PENNSYLVANIA
Dec. 22, 2008
Department of Banking
Commonwealth News Bureau
Room 308, Main Capitol Building
Harrisburg, PA 17120
BANKING DEPARTMENT ISSUES NEW REGULATION TO PROTECT HOMEBUYERS

Defines Proper Conduct for Mortgage Lenders, Brokers

HARRISBURG – Secretary of Banking Steve Kaplan today announced that new rules for the mortgage industry will help to ensure that Pennsylvania borrowers receive affordable loans with clear, up-front terms. The regulation was published in the Pennsylvania Bulletinon Dec. 20. “The major thrust of the regulation is two-fold: to restore sound underwriting practices to the licensed mortgage industry and improve disclosures,” said Kaplan. “The lax lending standards and increasingly complex loans that were commonplace during the housing boom helped to create the wave of foreclosures we are facing today.”

Under the new regulation, mortgage lenders and brokers must document and verify a borrower’s income, fixed expenses and other relevant factors in order to reasonably determine whether the borrower will be able to pay back an offered loan. This requirement will restrict low- and no-documentation mortgages in which applicants do not have to provide proof of income, employment and other information.

The regulation also requires mortgage companies to clearly disclose in a one-page summary whether a loan has any of the following features:

Variable interest rate,

Prepayment penalty or balloon payment,

Property taxes and hazard insurance included in the monthly payment, or

Negative amortization feature in which the payments are set so low they do not cover the interest, let alone principal, of the loan.

The new disclosure form will also note whether the lender has the ability to directly lock-in an interest rate. The form will be available to mortgage companies early next year.

The ability to repay and disclosure requirements will go into effect March 20. The regulation also contains new rules regarding loan funding, payoff statements, advertising and advice to borrowers, all of which take effect immediately.

“There is ample evidence that many borrowers do not understand the disclosures currently provided to them under federal law and that these disclosures have failed to keep up with product innovation in the marketplace,” said Kaplan. “The form developed by the department for use in Pennsylvania will go a long way towards bridging these gaps.”

The regulation is based on recommendations from the Department of Banking’s 2005 study, “Losing the American Dream: A Report on Residential Mortgage Foreclosures and Abusive Lending Practices,” which documented foreclosure trends and lending practices that are abusive to consumers.

The study also provided the blueprint for the five-bill mortgage reform package Governor Edward G. Rendell signed into law in July. The new laws require loan salespeople working for mortgage companies to be licensed by the Department of Banking and allow the department to share information on enforcement actions against licensees with the public sooner. The laws also prohibit prepayment penalties on loans of $217,823 or less, require lenders to notify the state when they intend to foreclose on homeowners, and increase penalties for misconduct by real estate appraisers.

###

As always, you can call me Direct at 717-371-0557 or at the Office 717-490-8999, email me at Jason@JasonsHomes.com or send me a text message using the tool to the right of this post!

Your Friend in Real Estate,
Jason


Search for Lancaster County Homes for sale by clicking here!

CALIFORNIA DOES IT AGAIN!

I came across some interesting info the other day on realtor.com.  They republished some info from Zillow that showed the Top Ten Areas where home prices have either Decreased or Increased.  Here is the break down:

Top 10 Increases

Ithaca, NY                     +5.6%
State College, PA          +4%
Jacksonville, NC            +3.9%
Winston-Salem, NC       +3.4%
Bay City, MI                   +3.2%
Rochester, NY                +3.1%
Greenville, SC                +2.8%
Anderson, SC                +2.7%
Burlington, NC               +2.6%
Spartanburg, SC            +2.0%

So, overall our top ten areas of growth are posting small single digit appreciation rates.  Pretty typical stuff.  Interesting that 9 of them are in or pretty close to the Mid Atlantic region.

But even more interesting is where the values have gone down:

Las-Vegas-Paradise, NV                -24.6%
Bakersfield, CA                               -24.9%
Madera, CA                                   -26.2%
Gainesville, GA                                 -26.4%
Riverside/San Benardino, CA         -30.4%
Modesto, CA                                  -31.0%
Salinas, CA                                    -32.4%
Merced, CA                                    -32.5%
Vallejo-Fairfield, CA                       -33.2%
Stockton, CA                                  -35.5%

8 out of 10 of the biggest decreases in the country are in California, which coincidentally had the most over-inflated markets.   I have a message for the great State of California.  Stop screwing it up for the rest of us!  It is no wonder people are confused about the real estate market when California, the state where many people live in a constant state of excess, isn’t just keeping the roller coaster going but I are extending the track to make new highs and lows every day.  Most of the negative media coverage of the real estate market is negative because in places like California it really is bad.  Who can argue with declines of 25% to 35%?

But that isn’t Lancaster County.  In Lancaster, our average sales price as of the end of October is down about 3.5%, not bad considering that for the most part we were holding steady this year.  We never had an over-inflated market though like California did.   Much of our recent decrease is attributable more to the economic uncertainty than market conditions.  Our prices are declining slightly because the activity is down 9units closed is down in the neighborhood of 25% to 29% depending on how you look at the data), many buyers are sitting on the sidelines waiting to buy because they aren’t sure if their jobs will be there next year.  That has nothing to do with home prices and I can’t fix it here.

All I can do is spread the word.  Here in Lancaster, activity levels are pretty normal (historically), rates are low and there are deals to be had.  If you are waiting on the side of the pool trying to decide whether to jump in, all I can say is come on in, the water’s fine!

As always, you can call me Direct at 717-371-0557 or at the Office 717-490-8999, email me at Jason@JasonsHomes.com or send me a text message using the tool to the right of this post!

Your Friend in Real Estate,
Jason


Search for Lancaster County Homes for sale by clicking here!

LANCASTER COUNTY IS THE 9TH MOST SECURE MID SIZE CITY IN THE US!

We are also the 21st Most SecureMetro area of any size in the US!

According to www.bestplaces.net “Health, prosperity, safety and security are all desirable aspects when it comes to seeking a place to live, work or raise a family…..The rankings took into consideration crime statistics, extreme weather, risk of natural disasters, environmental hazards, terrorism threats, air quality, life expectancy and job loss numbers in 379 U.S. municipalities. The study divided the communities into three groups: large metropolitan areas, mid-size cities and small towns.

Here is the breakdown for Mid Sized Cities:

Mid-Size Cities (150,000 – 500,000 residents)

  1. Olympia, Wash.
  2. Rockingham County-Strafford County, N.H.
  3. San Luis Obispo-Paso Robles, Calif.
  4. Sioux Falls, S.D.
  5. Bellingham, Wash.
  6. Fargo, N.D.
  7. Naples-Marco Island, Fla.
  8. Las Cruces, N.M.
  9. Lancaster, Pa.
  10. Bremerton-Silverdale, Wash.
  11. Binghamton, N.Y.
  12. Lynchburg, Va.
  13. Burlington-South Burlington, Vt.
  14. Rochester, Minn.
  15. Santa Barbara-Santa Maria, Calif.
  16. Charlottesville, Va.
  17. Santa Rosa-Petaluma, Calif.
  18. Salinas, Calif.
  19. St. Cloud, Minn.
  20. Medford, Ore.

For more infomation, visit www.bestplaces .net and search recent studies!

As always, you can call me Direct at 717-371-0557 or at the Office 717-490-8999, email me at Jason@JasonsHomes.com or send me a text message using the tool to the right of this post!

Your Friend in Real Estate,
Jason


Search for Lancaster County Homes for sale by clicking here!