WSB Mortgage Services

100 Day Challenge

2009-09-16T10:43:00.000-07:00

Interest Rates for 9-3-2009

2009-09-03T10:09:00.001-07:00

30 year fixed conventional 4.625 with 1 point origination

30 year fixed conventional 4.875 with no origination

15 year fixed conventional 4.25 with no origination

30 year fixed FHA 4.875 with 1 point origination

30 year fixed FHA 5.125 with no origination

“All rates and programs are subject to change without notice. This information is intended for mortgage professionals only and is not an

advertisement to extend consumer credit as defined by REGZ. The above rate represents a consumer on a rate and term refinance transaction with a credit score above 740 with 40% or more equity in their home, a minimum loan amount of $125,000 , a maximum loan amount of $417,000 and establishing an impound/escrow account."

Details on the Amortization Schedule

2009-09-03T08:22:00.000-07:00

The question was if you take the total interest charged and divide it by the interest rate it does not seem to equal the beginning debt. I replied that the interest is compound and this CPA did the math to back that up so I thought you should see it.

You were right; the difference in the first line of the amortization
schedule was due to the compound interest.The interest rate listed was 5.685%, compounded monthly works out to
5.836..%.

If you take the beginning balance of the mortgage, $189,509.42, and add the
annual service fee,$360, and the annual MIP, $976, and multiply that sum by
the interest rate, 5.685% divided by 12 and raised to the 12th power gives
you a total ending balance of $201,983 which is $42 over the amort. schedule.

If you just take the beginning balance and multiply it by the interest rate
compounded and then add the service fee and the MIP, you end up with a
balance of $201,905, which is $35 short.

So the difference is multiplying each month's fees, $30 plus $81.33, by the
compound rate raised to the 12th power, followed by the next month's fees
raised to the 11th power, and so forth.

That calculation should get us to the correct ending balance.
Thanks for your help.

2009-08-31T11:19:00.000-07:00

on using the RM to buy new home.

1. Do both the sale and the purchase of the new home need to be done simultaneously?
A. You can sell your home anytime and then purchase a home using a reverse mortgage to finance it at any time. If you do not have a home that you need to sell then you can just show that you do have the money necessary to pay your portion of the purchase and use the reverse mortgage to provide the balance.
You cannot get a home using a reverse mortgage without putting some of your money into the transaction, no seller financing or gifts of the down payment.

2. Assume a home was sold netting $100,000. Money is in money market fund. What value of new home might one look for to finance the new home with RM and the $100K to be the down payment. Assume the youngest buyer is 75. What formula can you use to determine this new home value considering age and down payment as variables.
A. There is no formula we can give you, it must be run on the lender provided software. You can request a quote from us and we will figure it out for you. On the 75 year old asked about they could buy a $300,000 house with $103,000 down payment using the fixed HECM.

Some Good Questions

2009-08-31T08:26:00.000-07:00

Sent in from a Loan Officer in GA.

I appreciate this opportunity. I hope I can remember the questions I have but never seem to quite understand.

Some of my questions are as follows:

1. Since the amortization schedule is drawn out to age 85, what happens with the loan anyway if/when the borrower lives past that age?
A. Some of the software we use shows to age 100 and some does not, either way the interest keeps accumulating until the loan is paid off at the time the borrower moves, sells or dies.

2. What is the average time a loan package is in-house before it gets to the lender? Who are the key individuals in the process?
A. WSB processes the loan until it is ready to go to the underwriter at the lender of choice, that normally takes around 2 to 3 weeks at which time we send it to the lender and they determine if there is anything else needed (conditions) if not then we are clear to close in a few days (except MetLife) and the closing takes place.

3. How soon is the loan officer commission paid after the close?
A. WSB pays all payroll each week, our cutoff for receiving checks is Wednesday at Noon Pacific, so if we get the check from the Escrow by Noon Wednesday then we cut your check that day and if you are set up to receive them electronically you will receive it by Friday if you want a paper check we send them UPS on Thursday so it could take up to five days for the East Coast delivery.

4. Why are leads so expensive from WSB? It seems like sales resources are a major income bucket for WSB. Wouldn't it be more lucrative to see as many qualified people as possible, at the lowest cost to the agent? Commercial standard mail is relatively cheap. Recycled documentation is low overhead, etc. How are your rates justified?
A.Postage rates are 44 cents per piece mailed and our leads are $500.00 per 1,000 so I am not sure why you think that is expensive? If you have a vendor that can get a good response for less we want to know about them. WSB is not a mail house or lead company, we search out companies that promise to deliver, we try it ourselves first and then if we get a good result we offer it to our Loan Officers. We just completed a test that cost us $1,600 and we wrote 1 Reverse Mortgage out of that, we will not be recommending that one to you. We have offered lists of prospects for 15 cents per name and have had good results with those and the reply card mailer is working very good, in fact if you get just 30 leads back then each lead cost you $16.00 which is the real number you should pay attention too. The Robert Wagner Leads cost $150.00 each when they were available.
If you know of a lower cost lead generation then we would like to know about it as well, and if you know of one that works prove it with production.

These are just a few of the pressing questions I've had. If I have more, I'll send them.

I hope that answers your questions and to all of our Loan Officers I welcome them, keep them coming.

Jeffrey Bangerter

Honest Selling

2009-08-25T06:48:00.000-07:00

With no reservation whatsoever, I can confidently say that 90 percent of all problems with salespeople can be solved if you can just get them to shut up and listen.

I’ve worked with hundreds of salespeople – from rookies to seasoned veterans to entrepreneurs that have started several successful companies – and if there’s one skill set that must be improved every time, it’s listening. If you choose to do only one thing I tell you in this entire book, then learn how to apply the interview concepts I’m about to explain.

Before I get to the concepts of how to interview, I need to get back on my soapbox for a few minutes, so I can explain one key reason why you should interview, and, once again, voice my disdain for much of what I’ve heard about this particular subject.

Decision-makers buy from people they trust. If there is one indisputable law of sales, it’s that, when all else is equal, and most times even when things are unequal, trust is the #1 factor that controls purchase decisions.

I have no way to actually prove this, but it’s an assumption I’m willing to make, simply because I’ve seen what the lack of trust can do to any relationship, whether it be in sales or any other aspect of life. Besides, decision-makers rarely have all the facts when making final decisions – unknowns always remain – so in the final analysis, trust in what a salesperson says is the key that actually locks a deal.

So if trust is essential to the sales process, it stands to reason that salespeople would want to know how to create trust – right?

In an earlier chapter, you learned about supply and demand – that to sell you must offer stuff that people want. Sales trainers know that salespeople want to learn how to establish trust, so most of them offer training in accomplishing that goal.

Throughout my sales career, I’ve read dozens of sales books, taken almost a dozen sales courses and participated in a few one-on-one coaching and mentoring programs. With few exceptions, the experts giving the advice told me about the importance of trust, and then how to establish “strong,” “profound” or “deeply held” trust. The thing I found curious was that all of them claimed their techniques could produce this level of trust in not more than 15 minutes – an astounding accomplishment, and a little outlandish. The only people I have ever trusted deeply are those who behaved in a trustworthy manner over a long period of time. I give new acquaintances, such as salespeople, the benefit of the doubt when it seems they’re being straight with me. But strong, profound and deeply held trust? That never happens in only 15 minutes.

Nevertheless, I listened carefully to what I was told, and even practiced some of the techniques – the ones that weren’t totally outrageous. And, after 25 years of analyzing what others had to say about establishing trust, I’ve managed to finally find the key.

Yes, I’m serious, I’ve actually landed on the one and only way to establish trust. No, I did not invent this idea, nor did I learn it from an expert. But learning from these experts is what gave me the insights I needed to arrive at my conclusions.

Are you ready to learn what it takes to establish deeply held trust with prospects? Are you truly prepared to have this question finally answered? Then brace yourself, because I’m about to give you the secret to this age-old question. [Drumroll please …]

To establish trust, you must behave in a manner that is worthy of trust.

Imagine that! All that is required to establish trust is to be trustworthy! Whew! I’m glad that question is finally answered – aren’t you?

This is taken from the book Honest Selling, I recommend you read it.

How to Identify Diminished Capacity

2009-08-18T19:21:00.000-07:00

I just finished a requirement of my Broker/Dealer and I thought this part of the course was important for you as Loan Officers of WSB Mortgage to also realize. Please focus on the best interest of our clients and prospects, if it was your Mother or Father, how would you like them treated?

How to Identify Diminished Capacity
A critical aspect of doing business with seniors is being able to identify signs of diminished mental capacity in senior investors. The ability to observe changes in investors' behavior places representatives in a unique and challenging position. There is widespread concern among Financial Professionals and their Firms about taking appropriate steps when an investor shows signs of diminished capacity, about Financial Professionals' responsibilities in these instances, and about their potential liability in instances where the Financial Professional does not address the issue.
Regulators have noted that Financial Professionals cannot take advantage of investors in a manner that would violate either an investment adviser's fiduciary duty to the investor or a representative's responsibility to follow just and equitable principles of trade. Firms have an obligation to supervise employees to prevent this behavior. In circumstances where the investor appears to lack capacity to understand an investment or to provide informed consent, you may want to consider taking certain steps, such as seeking advice from supervisors about contacting a trusted family member or the person designated in the investor's power of attorney.
Experts on the elderly who have studied this subject, as well as regulators as of late, have referred to the importance of identifying signs — or “red flags” — that may indicate that an investor may have diminished capacity or a reduced ability to handle financial decisions. Examples of signs of diminished capacity include, but are not limited to, the following:
• The investor appears unable to process simple concepts;
• The investor appears to have difficulty speaking or communicating;
• The investor appears unable to appreciate the consequences of decisions;
• The investor makes decisions that are inconsistent with his or her current long-term goals or commitments;
• The investor's behavior is erratic;
• The investor refuses to follow appropriate investment advice. This may be of particular concern when the advice is consistent with previously-stated investment objectives;
• The investor appears to be concerned or confused about missing funds in his or her account, where reviews indicate there were no unauthorized money movements or no money movements at all;
• The investor is not aware of, or does not understand, recently completed financial transactions;
• The investor appears to be disoriented with surroundings or social setting; and
• The investor appears uncharacteristically unkempt or forgetful.

How to Identify Elder Financial Abuse

Elder abuse comes in a variety of forms. It can be physical or emotional and can be in the form of neglect, abandonment, or through financial exploitation. Elder financial abuse is generally referred to as the misuse of a person's money or belongings by a family member or a person in a position of trust.
Similar to detecting diminished capacity, representatives are on the front lines of seeing indications of possible financial abuse and would benefit from being able to identify signs — or “red flags” — that may indicate that an investor may be subject to elder abuse. Examples of these signs include, but are not limited to the following:
• The investor gives a power of attorney to someone that, to the investor's Financial Professional, appears inappropriate;
• Indications that the investor does not have control over or access to his/her money;
• The investor's mailing address has been changed to an unfamiliar and unexplained address;
• Inability of the representative to speak directly to the investor, despite attempts to do so;
• The investor appears to be suddenly isolated from friends and family;
• There is a sudden, unexplained or unusual change in the investor's transaction patterns;
• There are unexplained disbursements made in an investor's account that are outside of the norm; and
• The sudden appearance of a new individual involved in the investor's financial affairs.

Here is a very good article

2009-08-17T07:00:00.000-07:00

This is a good article and worth reading.

By John P. Napolitano
GateHouse News Service
Posted Jul 20, 2009 @ 11:30 AM

--------------------------------------------------------------------------------
.Typically used for income during retirement, reverse mortgages are finding their way into the affluent marketplace as a vehicle for advanced planning.

Paul Savery, a reverse mortgage consultant with Wells Fargo Home Mortgage in Sandwich, says some people have used reverse mortgages to buy or improve a second home. With the substantial slide in real estate prices throughout the Sun Belt, some wealthy homeowners are going bargain-hunting with their reverse mortgage line available to quickly close on beautiful second homes being sold by distressed sellers.

Reverse mortgages can be used as an estate-planning tool. When working with retirees about reducing their estates and the subsequent estate tax, retirees are often reluctant to part with their hard-earned cash.

Whether it is fear of running out of money or thinking that they'll spend their way down to an untaxable level for their estate – this reluctance to make gifts is common even for the very wealthy.

The concept is that making gifts reduces your gross estate, which, in turn, will reduce any estate or death taxes that may be due. One of the most utilized techniques with estate reduction gifts is the purchase of life insurance in an irrevocable trust.

This later creates a very large amount of cash from the ultimate death benefit that can be received by beneficiaries both income-and estate-tax free. Using the proceeds from a reverse mortgage to pay life insurance premiums is in effect using double leverage for a very low-risk move. The biggest risk here is the policy itself - make sure that you buy a policy that is guaranteed for life from a highly rated life insurance company.

A similar approach would involve using the proceeds from your reverse mortgage to acquire long-term care insurance. Both the mortgage and the long-term-care insurance may protect your home from long-term illness and health-care costs.

Another creative use comes next year with the repeal of limits for Roth IRA conversions. Making a Roth IRA conversion is an expensive move for current income taxes - but for the wealthy, it is an opportunity to create a financial legacy for the next generation with tax-free Roth IRA assets. The ability to obtain a reverse mortgage could make utilization of the Roth conversion opportunity coming our way for 2010 even sweeter.

John P. Napolitano is the CEO of U.S. Wealth Management in Braintree, Mass. He may be reached at jnap@uswealthcompanies.com. For online discussion and more information, go to www.makingcentsblog.com.

The Negative Press is at it again.

2009-08-17T06:54:00.000-07:00

This is a TV News program in Southern California and it is negative, but I think it is important that you see the complaints so you can address these issues when you talk to a prospect. We need to make sure they understand how this will look in the future. You will also note that the real complaint is the broker sold her some investment with the money she got from the reverse mortgage, don't do that.
http://abclocal.go.com/kabc/story?section=news/consumer&id=6961766

What's New in Sales - Nothing!

2009-08-12T06:59:00.000-07:00

Some people have stuff and want money. Some people have money and want stuff. Occasionally, both parties find each other, communicate and agreed to trade stuff for money. Provided both parties remain happy about the previous trade, they might trade again in the future.

Believe it or not, in those 44 words you learn the bottom line concepts of the six components to sales:
1. Supply and demand - have stuff want money, want stuff have money.
2. Marketing-find each other.
3. Sales-communicate and agreed to trade.
4. Fulfillment-exchange stuff for money.
5. Buyer-seller relationship-both parties remain happy.
6. Repeat-business generation-trade again in the future.
Just like there is nothing new in sales, there is also no silver bullet sales system that makes all salespeople successful. It doesn't exist, it never has existed and never will exist, because it's not the system that creates success-it’s the person.
You are the only person keeping you from achieving success at sales. And you are the only person who can change that. I can tell you how. Other experts can tell you how. But only you can make it happen.

To become the best-sales person possible, you must assume full and complete responsibility for your success. That means that the only person you ever blame for failure or congratulate for success is the person looking back at you in the mirror. All top salespeople assume total responsibility for their successes and failures, and none of them used the words I can’t. Because they all know the key to success lies within the words. I can and I will.

The above was taken from Honest Selling by Gill Wagner

Common Questions Under MDIA/TILA Amendments

2009-08-04T10:04:00.000-07:00

American Bankers Association:
Common Questions Under MDIA/TILA Amendments

For the benefit of our Members, ABA is issuing the following set of FAQs relating to the recent amendments to the Truth in Lending Act, as published in by Federal Register Notice (74 FR 23289) on May 19, 2009. The new requirements will become effective on July 30, 2009.

The following item represent the more common questions posed by ABA members. ABA offers this guidance for purposes of general information only, and does not intend anything contained herein to be used or referenced as legal advice.
--------------------------------------------------------------------------------
In a situation where the applicant is floating the rate, do we have to redisclose each time there is a rate movement?
No. Creditors are not required to redisclose every time there is a market shift. Rather, the creditor would wait until consummation, and then reach the determination of whether to redisclose. Generally, lenders are required to redisclose (and follow the three-day waiting period) prior to closing when the annual percentage rate that will be offered to the borrower at closing is off by more than 1/8 of 1% from the initial disclosure given to the borrower. Interim changes in market interest rates and fees need not be disclosed to the borrower.

What risk do banks face for allowing waivers of the waiting periods before consummation?
The sole waiver expressly authorized by the Federal Reserve Board (Board) is a waiver of the post closing three business day waiting period prior to disbursement in a refinance transaction when the borrowers will lose their primary residence before the waiting period expires due to expiration of a mortgage foreclosure redemption period. Other waivers must meet the standard of constituting a "bona fide personal financial emergency," as per comment 19(a)(3)-1. No further specific example is set forth under the final rules. The Board specifically warns that "waivers should not be used routinely to expedite consummation for reasons of convenience." 74 FR 23296. Without further guidance from the Board, banks will therefore face considerable uncertainty, and the risk the potential for regulatory violations and court action about whether the waiver was appropriate or properly executed.

Does the Board allow banks to consider e-mailing the corrected TILA disclosures as a faster method of delivery? Do the new rules require the bank to follow the waiting periods regardless of the delivery method, i.e., fax mail; email etc.?
If a creditor places corrected disclosures in the mail, the consumer is deemed to receive the corrected disclosures three business days after they are mailed. Creditors that use e-mail may (but are not required to) follow that approach. Creditors may instead rely on actual proof of receipt of the disclosure to begin the counting of the required waiting period. For example, if a creditor provides disclosures through e-mail, the creditor may presume that the consumer receives the disclosures three business days after they are e-mailed, OR, if a creditor delivers corrected disclosures electronically (consistent with the E–Sign Act), the creditor may rely on evidence of actual delivery (such as documentation that the mortgage loan disclosure was delivered by e-mail, if documentation is available) to determine when the three-business-day waiting period begins.

Under the new redisclosure requirements, is the TIL form the only disclosure that needs to be redisclosed, or do any other disclosures need to be sent to borrower?
This rule amends TILA, and only TIL-related disclosures are affected. No other corrected disclosure form is required to be delivered to the consumer upon redisclosure. (Note, however, that if you add or change a variable rate feature to a residential mortgage loan, the ARM loan disclosures required by Section 19 of Regulation Z must be provided as soon as possible. Likewise, changing loan programs will trigger a requirement to provide a new GFE disclosure under rules effective in January, 2010.)

Please clarify, in instances where the loan is a "brokered" transaction, does the GFE/TIL have to come from the lender, or would the disclosures provided by the broker suffice?
The creditor, not the mortgage broker, is responsible for providing TILA disclosures. See the comment 3 to Section 19(b) of Regulation Z. Banks should not rely on the broker to provide disclosures for on behalf of the institution (unless the broker is a captive entity described in Comment 19(b)-3). In short, banks should provide their own disclosures regardless of what the independent mortgage broker does.

If the APR decreases before consummation, and it decreases by more than allowed by tolerance, is the lender required to redisclose and wait an additional three days to close?
The result of ABA discussions with Board staff supports the following analysis. However, there continues to be some disagreement among industry members, so ABA will seek written guidance on this subject.

The final rules sets forth that in instances where the disclosed APR overstates the actual APR, the corrected disclosures are not required where the APR previously disclosed is considered accurate under the tolerances in § 226.22. See 74 FR 23293; § 19(a)(2)(ii)-1. Under § 226.22, over-disclosures shall be treated as accurate (therefore voiding the need to issue corrected disclosures) if the finance charge is greater than the amount required to be disclosed. Specifically, section 226.22(a)(4) (which is a section that was not affected by the MDIA final rule) states that the APR is accurate if (i) disclosed APR "results from" disclosed finance charge; and (ii) the disclosed finance charge is accurate under 226.18(d)(1). Section 226.18(d)(1)(ii) (also unaffected by the MDIA final rule) provides that a finance charge shall be treated as accurate if it is greater than the amount required to be disclosed.

As ABA has consistently advised, however, that the new regulations do not sanction a pattern and practice of over-disclosures as an allowable means of avoiding the redisclosure requirements under 19(a)(2)(ii). Rather, creditors must structure their systems to arrive to accurate APR figures, and in the specific instances that they over-disclose, such over-disclosures may be considered accurate by following the rules of elements outlined under § 226.22.

Please clarify how the waiting periods are measured differently for initial disclosures as opposed to re-disclosures.
On the initial disclosures, the seven-business day waiting period before consummation begins when the creditor delivers or places the early disclosures in the mail, NOT when the consumer receives them. On re-disclosures, consummation may not occur until three business days after the consumer receives the corrected disclosure (either by evidence or presumed delivery). In terms of imposing fees, however, the lender may impose fees three business days after mailing the initial disclosures, unless the lender can prove that the disclosures were received earlier. If the disclosures are delivered to the borrower face-to-face, the creditor can impose a fee when the disclosures are handed over to the borrower. The same rule applies to faxes, FedEx and email – if lender can prove the borrower received the disclosure before the three business days expires, lender may impose a fee at the time of delivery of the disclosure.

Is there anything expressly written in the new regulations that prohibit the practice of obtaining pre-authorized credit card information and not processing the charge until the required timeframe to collect a fee has passed in accordance with the MDIA?
The MDIA regulations prohibit the imposition of fees prior to the borrower's receipt of estimated TILA disclosures. Even if the borrower agrees to have his credit card charged, many legal experts that we have spoken with are interpreting the rule so that obtaining pre-authorized credit cards would be deemed to be "imposing a fee" (whether or not it is paid later). Although there is no express regulatory language prohibiting the practice, current thinking suggests that this practice poses significant risk of regulatory violation and/or litigation.

Does an application taken for a property address that is "To Be Determined" count as a "complete application" under the new regulations? Is "To Be Determined" a valid property address for purposes of triggering the new TILA early disclosure requirements?
The term application under TILA is defined by Section 2 of HUD's Regulation X (RESPA), which states that the application is a submission of a borrower's financial information in anticipation of a credit decision. 24 CFR 3500.2(b). Until January 1, 2010, Regulation X provides that if a submission does not state or identify a specific property, the submission is an application for a prequalification and not an application under Regulation X. Since changes to the RESPA regulations are now finalized, and further clarifications are pending, ABA recommends that banks stay alert to HUD pronouncements on this issue.

Can you clarify whether the MDIA rules apply to construction loans?
The Board regulations state that the MDIA early disclosures apply to a mortgage transaction subject to the Real Estate Settlement Procedures Act (RESPA) that is secured by the consumer's dwelling (other than a home equity line of credit or mortgage loan secured by a time share). See § 226.19(a)(1)(i). RESPA applies broadly, but does not apply to "temporary financing such as a construction loan." That exemption is explained in the RESPA regulations (24 C.F.R. 3500.2), which sets forth:

"The exemption for temporary financing does not apply to a loan made to finance construction of one- to four-family residential property if the loan is used as, or may be converted to, permanent financing by the same lender or is used to finance transfer of title to the first user. If a lender issues a commitment for permanent financing, with or without conditions, the loan is covered. Any construction loan for new or rehabilitated one- to four-family residential property, other than a loan to a bona fide builder (a person who regularly constructs one- to four-family residential structures for sale or lease), is subject to RESPA if its term is for two years or more. A "bridge loan" or "swing loan" in which a lender takes a security interest in otherwise covered one- to four-family residential property is not covered by RESPA."
Who must receive the disclosures under the new TILA requirements?
The answer depends on whether the loan is a rescindable transaction. In accordance with 226.17(d), if there is more than one borrower, the disclosures may be made to any borrower who is primarily liable on the obligation. However, if the transaction is rescindable, the disclosures must be made to each person who has the right to rescind.

Can mortgage brokers collect upfront fees, or do MDIA restrictions apply to creditors and brokers alike?
Under the new MDIA-TILA regulations, no creditor or other person may impose a fee on a loan applicant in connection with a mortgage loan application before the applicant receives the early disclosures. Disclosures are considered "received" 3 full business days after mailing or after evidence of delivery, such as return receipt or if delivery is done in person. (The only exception is the credit report fee which can be collected at application.)

Do the new regulation's disclosure "wait periods" begin when the mortgage broker provides disclosures or when the lender issues the applicable disclosures?
The new disclosure wait periods, both for initial disclosures as well as re-disclosure, begin when the "creditor" issues (by mail, electronically, or in person) the disclosures to the borrower. The requirement to disclose and the related "wait periods" will depend on whether the mortgage broker is considered a "legal agent" (i.e. acting on behalf) of the creditor. If the broker is not acting on behalf of the creditor, compliance with the new disclosures and related requirements would be required.

Can the loan be locked at the time of application?
Yes, so long as no fees are imposed or collected. The only restriction under the new regulation is that the no fees, other than a bona fide and reasonable fee to obtain a credit report, may be charged before the delivery of the initial disclosures. Remember that "delivery" requires actual delivery, evidence of delivery, or the 3-business day "mail" presumption as defined by the rule.

Verification of Funds on Reverse Mortgages

2009-07-31T13:18:00.000-07:00

The purpose of the memo is to clarify the documentation requirements in
circumstances where the borrower is required to bring funds to closing for
payoff of liens, closing costs, down payment, short-pays, etc.

All required funds for the borrower’s investment in the property, either to
purchase a new property or to payoff existing liens and closing costs on
current residence, must be verified and documented.
Prospective mortgagors must use their own money (money obtained from
sale of assets, and/or sale of current home) or gift for the required monetary
investment.

Documentation Requirements:
The documentation requirements are as follows:
A. Borrower providing funds:
1. Checking/Savings Account
The following may be used to verify savings and checking accounts1:
• Purchase - An original verification of deposit, along with the most
recent bank statement (all pages, stamped certified true copy) OR
the three most recent and consecutive original bank statement(s) (all
pages, stamped certified true copy), belonging to the borrower, which
cover the most recent three-month period and previous month’s
balance. Cash on hand is not allowed.
• Refinance - The most recent bank statement (all pages, stamped
certified true copy) , belonging to the borrower, which covers the
most recent one-month period and previous month’s balance. Cash
on hand is not allowed.
If there is a large increase in an account, or the account was opened recently,
the lender must obtain a credible explanation of the source of those funds. A
large deposit is defined as a deposit that exceeds borrower’s monthly income
or customary monthly deposits.
2. 401K
If the borrower is obtaining money from their 401K, the following documents
are required:
• Most recent quarterly statement (all pages).
• Proof of withdrawal from 401K.
• Copy of the Cashiers check at closing.
3. Stocks, Bonds and Mutual Funds
Verify existence of stock/bond/mutual fund via
• Current statement from stockbroker or financial institution, OR
• Photocopies of stock/bond certificate with updated newspaper stock
list.
• Stock/bond certificate must be reduced in size when photocopied and
the word "COPY" must be written or stamped across the face of the
copied certificate.
• Verify receipt of funds realized from sale/liquidation.
4. Proceeds from Sale of Existing Home
• A copy of the HUD-1, Purchase Contract executed by all parties and
cashiers or certified check bearing the name of the borrower can be
used to verify funds from the sale of a home.
• A wire transfer statement showing Settlement Agent as sender and
Borrower as recipient can also be used.
B. Borrower receiving partial or total funds as a Gift:
1. Copy of donor check made out to our borrower. If the donor makes check out
to the Closing Agent (which is not recommended), a copy of the gift check is
required and funds should be certified.
2. Proof that funds were deposited into our borrower’s account
3. Proof that borrower has the required additional funds, if applicable. (if partial
gift received)
4. Gift Letter/Affidavit from donor containing the following information:
a) The dollar amount of the gift
b) Name of the donor
c) The donor's signature
d) The donor’s address
e) The donor’s telephone number,
f) The donor’s relationship to the borrower (must be a family member)
g) The name of the borrower
h) The borrower's signature(s)
i) The letter must state that no repayment is required.
j) Language asserting that the funds were not made available to the donor from
any person or entity with an interest in the sale of the property.
k) Statement from donor that funds were gifted to our borrower to go towards
this Reverse Mortgage transaction.
Note: Gifts of Equity are not permitted.

New Disclosure Rules on Fixed HECM's

2009-07-31T08:19:00.000-07:00

There are changes to the disclosure rules on fixed rates products. Since WSB provides you with the required documents we will take care of this but you need to let your clients know they will be getting disclosures several times between the time you take the application and the time we close the loan.

Here are some of the issues:

The questions and answers below have been compiled to help you better understand the Mortgage Disclosure Improvement ACT (MDIA).

Q. When do the MDIA rules go into effect?

A. The new rules are effective for applications dated on or after July 30, 2009.

Q. How does the new Mortgage Disclosure Improvement Act impact applications taken/received prior to July 30, 2009?

A. Applications with a property address taken/received prior to July 30, 2009 are not impacted by MDIA.

Q. What is the effective date for wholesale applications?

A. The effective date is the date of broker’s application. MLHL will not be required to provide the initial TIL for MDIA compliance for applications received by brokers prior to 07/30/09. However, all applications received prior to 07/30/09 by the broker must close on or before 09/30/09.

Q. Does MDIA apply to purchases and refinance transactions?

A. Yes, the same rules apply to both.

Q. Does MDIA apply to a HECM ARM?

A. No. MDIA is only applicable to Closed-End transactions. Currently, the HECM Fixed is the only Closed-End product offered by MLHL.

Q. Who has to receive the initial or corrected Truth-in-Lending Disclosure Statement?

A. The initial Truth In Lending Disclosure Statement must be provided to all buyers(s) (purchase transaction) AND all owner(s) of record in title to the subject property (refinance transaction) at each individual applicant/owner's mailing address, (delivered or placed in the mail).

Q. If owners of record are transferring interest of property, are they required by MDIA to receive initial and re-disclosed TIL’s?

A. No.

Q. If a party to the transaction is relinquishing ownership to the property, must a Truth-in-Lending disclosure be provided to them?

A. No.

Q. How do you determine when a borrower has actually received the Initial or corrected Truth-in-Lending?

A. A TIL is considered to be received by the borrower (3) three business days after delivery regardless of the method of delivery with the exception of face-to-face hand delivery. (Regular mail, overnight mail, courier, electronic transmission all use (3) business days.) The TIL is considered received the same day it is delivered for face- to- face hand delivery as long as a copy of the signed disclosure dated the same day as delivery is in the file.

Q. How do you determine when the (3) business day waiting period begins?

A. For all delivery methods, except face-to-face hand delivery, the waiting period begins three business days after delivery. Face- to- face delivery is only allowed on an exception basis and in these cases, the waiting period begins immediately as long as a copy of the signed disclosure dated the same day as delivery is in the file.

Q. How long after receipt of the initial TIL (early disclosures) do we have to wait to close a loan?

A. MDIA requires a (7) seven business day waiting period after the early disclosures are delivered or placed in the mail before a closing can occur. Therefore, closing may occur on the seventh business day, as long as there are no changes to the loan terms that effect the APR by .125% or more.

Q. How do I determine if a corrected TIL is required?

A. To determine if a corrected TIL is required:

· Compare the APR on the last TIL provided to the borrower to the APR now – or-

· Complete the Truth-In-Lending Compliance Worksheet (completion of this form is mandatory prior to closing)

If the APR is over or under by .125% (1/8th of 1%), a corrected TIL is required. If the corrected TIL is mailed, the closing can occur on or after the 6th business day after the corrected TIL is mailed to all borrowers. If the corrected TIL is delivered in person, the closing may occur on or after the 3rd business day after delivery.

Q. Should I re-disclose a corrected TIL more than once?

A. A corrected TIL is required when the APR changes by more than .125% (1/8 of 1%). The closing may occur on or after the 6th business day after the corrected TIL is mailed to all borrowers.

Q. What things can cause the APR to change?

A. If fees change (up or down) or the initial rate used to disclose the loan is different than the locked rate at closing or the loan amount changes, the APR will be impacted. However, a corrected TIL is only required if the APR changes by more than 1/8^th of 1% or more.

Q. How much of a change to the GFE Fees does it take to effect the APR by more than 1/8 of 1%?

A. It depends on the loan amount. For instance, on a $300,000 value it takes about a $3,500 increase or decrease in fees to change the APR. On a $150,000 value, it takes about $1,600.

Q. If a corrected TIL is required, how long after receipt of the corrected TIL do we have to wait to close a loan?

A. MDIA requires a (3) three business day waiting period after borrower receipt of the corrected TIL before a closing can occur. Therefore, closing may occur anytime on the third business day after receipt, as long as the (7) seven business days waiting period has also expired.

Q. Can a corrected TIL be sent with-in the (7) seven business day waiting period from when the initial disclosures are issued?

A. Yes, the required re-disclosure can be sent within the first (7) seven day waiting period.

Q. What is considered a business day?

A. A business day is considered “All days except Sundays and designated federal holidays.”

Q. Can loan documents be printed prior to the expiration of the mandatory waiting periods?

A. Yes, but the closing date must be after waiting period has expired. The date closing documents are executed is the key.

Q. Is the (3) three business day right of rescission still in effect?

A. Yes, the right of rescission is still in effect for refinances and certain purchase transactions. The loan can close (7) seven business days after any TIL re-disclosure is issued, then the right of rescission period begins. The loan can fund after the rescission period expires.

Q. What if the broker collects an appraisal fee prior to the mandatory waiting period on an application taken by the broker after 07/30/09?

A. In order for the loan to close, any fee collected prior to the mandatory waiting period cannot be collected from the borrower or charged to the borrower in any form of a fee on the HUD.

Q. Can the broker pay for the appraisal prior to the mandatory waiting period?

A. No, the broker cannot pay for the appraisal until after the mandatory waiting period.

Q. For wholesale transactions, if the application is dated on or after July 30th, but the appraisal was ordered prior to July 30th, do MDIA mandatory waiting periods apply?

A. If the appraisal was ordered prior to July 30th and the loan closes on or before September 2, 2009, MDIA mandatory waiting periods do not apply.

Note: Throughout this document, the term, ‘mailed,’ references email, regular mail, fax, express mail, and overnight mail. In other words, any delivery method other than in person.

And, the term, ‘business days,’ excludes Sundays and federal holidays.

Interest Rates for 7-30-2009

2009-07-30T13:17:00.001-07:00

30 year fixed conventional 5.0 with 1 point origination

30 year fixed conventional 5.25 with no origination

15 year fixed conventional 4.50 with 1 point origination

15 year fixed conventional 4. 75 with no origination

30 year fixed FHA 5.00 with 1 point origination

30 year fixed FHA 5.375 with no origination

“All rates and programs are subject to change without notice. This information is intended for mortgage professionals only and is not an

advertisement to extend consumer credit as defined by REGZ. The above rate represents a consumer on a rate and term refinance transaction with a credit score above 720 with 40% or more equity in their home, a maximum loan amount of $417,000 and establishing an impound/escrow account."

Manufactured Home Checklist

2009-07-27T10:58:00.000-07:00

Manufactured Home Checklist for Reverse Mortgages

All of the following items MUST be satisfied prior to loan funding:

Built after June 15, 1976.No exceptions are allowed.

Engineer’s Certification Report. Must state property meets the guidelines published in the Permanent Foundations Guide for Manufactured Housing, dated September 1996.

Structural modifications or additions. Engineer’s report indicating that the structural changes or additions to the property were made in accordance with the HUD Manufactured Home Construction and Safety Standards

The home has never moved off original site. The manufactured unit must not have been installed or occupied previously at any other site or location. Manufactured units may be moved only from the manufacturer’s or dealer’s lot to the site on which the unit will be insured.

All HUD tags are indicated. All manufactured homes must have an affixed HUD label (tag) located on the outside of the home. If the home is a multi-wide unit, each unit must have a label. For assistance in obtaining information for a request of label verification, contact Pam Billhart at (703) 481-2010 or fax at (703) 437-6432 for help on finding HUD tags. See IBTS form attached.

Taxed as Real Property. The manufactured home must be taxed as real property. Also Title should provide the manufactured home endorsement applicable to subject property’s state: CLTA 116.5, ALTA 7, FL 7, TX T-31.

If the title reflects title elimination has been recorded on the manufactured home and the tax section of title verifies it as being taxed as real property, no additional conditions are required.
However, if the manufactured home is not taxed as real property the Title Company must provide the recorded title elimination, evidence property is being taxed as real property and applicable endorsement. In some states, title may not be purged prior to paying off the lien attached to it. In this case please provide copy of front and back of title to be purged at closing to verify liens attached.

Home is in a Flood Zone. The finished grade elevation beneath the manufactured home, or if a basement is used, the lowest finished exterior grade adjacent to the perimeter enclosure, shall be at or above the 100 year return frequency flood elevation. A LOMA/LOMR or elevation certification showing finished grade elevation below the manufactured home is at or above the established 100 year flood plain will need to be provided. *NOTE- Flood insurance is still required regardless if property is above the 100 year Flood plain.

Condominium Project. All manufactured homes located in condominium complexes must be approved by HUD’s Review and Approval (HRAP) process. Appraisal form 1073 should be used for these properties. For more information for this approval process, please see Handbook 4150.1 Chapter 11.

New Construction Manufactured Housing. New Construction Manufactured homes are required to meet all of these guidelines, and are subject to additional guidelines. For properties delivered to a site within the past 1 year the following additional documentation will be required:

o NPCA 99a and 99b Soil Treatment
o Certificate of Occupancy
o Manufacturer’s Warranty
o Document purchase price and delivery/setup expense (sales contract)
o Additional documentation may be required at UW discretion.

Service is the Key to Success

2009-07-26T15:58:00.000-07:00

"The people who receive the most are the ones who give the most. This is true of individuals, but also for businesses. If the focus is on how we can give the absolute best service, then the profits will follow. If a company is only focused on profits, they miss the big picture and will always be scurrying for business instead of having clients chasing them."
Susan Bagyura, Author of The Visionary Leader: How To Inspire Success From The Top Down

This is so true for the Reverse Mortgage Business!

Thank Ed Wood for this one

2009-07-23T07:11:00.000-07:00

A New Orleans lawyer sought an FHA loan for a client who lost his house inHurricane Katrina and wanted to rebuild. He was told the loan would begranted if he could prove satisfactory title to the parcel of property beingoffered as collateral. The title to the property dated back to 1803, whichtook the Lawyer three months to track down.After sending the information to the FHA, he received the following reply.

(Actual letter)"Upon review of your letter adjoining your client's loan application, wenote that the request is supported by an Abstract of Title. While wecompliment the able manner in which you have prepared and presented theapplication, we must point out that you have only cleared title to theproposed collateral property back to 1803. Before final approval can beaccorded, it will be necessary to clear the title back to its origin."Annoyed, the lawyer responded as follows.

(Actual Letter)"Your letter regarding title in Case No. 189156 has been received. I notethat you wish to have title extended further than the 194 years covered bythe present application. I was unaware that any educated person in thiscountry, particularly those working in the property area, would not knowthat Louisiana was purchased, by the U.S., from France in 1803, the year oforigin identified in our application. For the edification of uninformed FHA bureaucrats, the title to the landprior to U.S. ownership was obtained from France, which had acquired it byRight of Conquest from Spain. The land came into the possession of Spain byRight of Discovery made in the year 1492 by a sea captain named ChristopherColumbus, who had been granted the privilege of seeking a new route to Indiaby the Spanish monarch, Isabella. The good queen, Isabella, being a piouswoman and almost as careful about titles as the FHA, took the precaution ofsecuring the blessing of the Pope before she sold her jewels to financeColumbus' expedition.Now the Pope, as I'm sure you may know, is the emissary of Jesus Christ, theSon of God, and God, it is commonly accepted, created this world. Therefore,I believe it is safe to presume that God also made that part of the worldcalled Louisiana. God, therefore, would be the owner of origin and Hisorigins date back to before the beginning of time, the world as we know itand the FHA.I hope you find God's original claim to be satisfactory.Now, may we have our damn loan?"

He got the loan!

Interest Rates for 7-21-2009

2009-07-21T16:10:00.001-07:00

30 year fixed conventional 5.0 with 1 point origination

30 year fixed conventional 5.25 with no origination

15 year fixed conventional 4.50 with 1 point origination

15 year fixed conventional 4. 75 with no origination

30 year fixed FHA 5.00 with 1 point origination

30 year fixed FHA 5.375 with no origination

“All rates and programs are subject to change without notice. This information is intended for mortgage professionals only and is not an advertisement to extend consumer credit as defined by REGZ. The above rate represents a consumer on a rate and term refinance transaction with a credit score above 720 with 40% or more equity in their home and establishing an impound/escrow account."

Interest Rates for 7-20-2009

2009-07-20T14:51:00.000-07:00

30 year fixed conventional 5.125 with 1 point origination

30 year fixed conventional 5.375 with no origination

15 year fixed conventional 4.675 with 1.25 point origination

15 year fixed conventional 4.875 with no origination

30 year fixed FHA 5.25 with 1 point origination

30 year fixed FHA 5.50 with no origination

FREE LEADS!

2009-07-17T08:13:00.000-07:00

WSB Mortgage Services, Inc. is giving away Lead Lists!

Here is how it works:

For every complete Loan you submit from July 16th 2009 to August 14th 2009 we will give you a Lead List of up to 500 prospects in your area. The Loan must be a complete package including HUD Counseling Certificate on Reverse Mortgages.

For every Direct Mail order you purchase from July 16th 2009 to August 14th we will give you a Lead List of up to 500 prospects as well.

You could have thousands of prospects to call at no cost to you!

Congratulations to Barry Fine for writing 12 Reverse Mortgages in just over 30 days from calling his list of 1,000 seniors.

Even if we look the least amount of money you can make on Reverse Mortgages Barry would make around $12,000.00, not a bad month. Those of you in higher home value areas would make over $32,000 for those 12 deals.

The Lead Lists are 15 cents per name and we can get you a list in a day. Are you ready to get making some money? Get a list today and earn some free lists for your production.

Interest Rates for 7-9-2009

2009-07-09T13:13:00.000-07:00

30 year fixed conventional 4.875 with 1 point origination

30 year fixed conventional 5.125 with no origination

15 year fixed conventional 4.375 with 1 point origination

15 year fixed conventional 4.75 with no origination

30 year fixed FHA 5.00 with 1 point origination

30 year fixed FHA 5.25 with no origination

Check Out This Video of How A Reverse mortgage Works

2009-07-08T14:51:00.000-07:00

http://www.youtube.com/watch?v=KYaZbY5bBCM

Valid Date of Birth and Social Security Verification Sources:

2009-07-08T08:59:00.001-07:00

Valid Date of Birth Verifications include:
• State-issued Driver’s License or ID Card
• Birth Certificate
• Passport
• Letter from the Social Security Administration (acknowledged by SSA if applicable)
• Military ID
• Voter ID Card
• Certificate of United States Naturalization (form N-550 or N-570)
Valid Social Security Number Verifications include:
• Social Security Card issued by the government (ie; not plastic or metal)
• Printout from the Social Security Administration (acknowledged by SSA if applicable)
• Medicare Card with any of the following codes: A, J1, J2, J3, J4, LM, M, M1, T, TA
• W2 form
• Form 1098 or 1099
• 401k statements or bank statements where earned income must be reported to the IRS
• Military ID
• Current pay stub
• Railroad Retirement Board Card
• Voter ID Card
Certain Social Security Verification sites are also acceptable as SSN verification:
• Interthinx/Sysdome
• Inco-check
• National Verification Services
• Rapid Reporting

FHA ARM product to open to the Loan Officers!

2009-07-07T14:42:00.000-07:00

We have received a huge influx of ARM submissions since introducing this product. Many are taking advantage of the 4% rate. Streamlines are a large percentage of the closings as well as purchases. Having the option to qualify a borrower at 4% is HUGE. This opens back up the potential for you to generate a ton of streamlines right now as well as stimulate Realtor referral business. I wanted to make sure everyone fully understands the potential you have to write more loans with this ARM product.

1. The Caps are very conservative (1/1/5)

a. 2% Margin on the 1 Yr Treasury (currently approximately 0.5%)

b. With a Start Rate of 4% the Highest your borrowers rate could be in 5 years would be 6%

2. It can be streamlined to a Fixed at anytime

a. At the end of the 3 years there will be enough paid down on the loan to streamline without an appraisal with no cash to close

b. The fact that you can streamline without an appraisal makes the borrower’s home value irrelevant

c. Streamlining from an ARM to Fixed is a benefit in itself and the payment does not have to decrease

d. With any streamline there will be no income or credit qualifying

3. There is a tremendous opportunity right now for you to streamline your clients you put in an FHA loan at 5-6% over the past few years

a. Not only will your borrowers save money each month but will pay down their principal faster just based on the rate

4. Realtors are loving this product!

a. We have seen a spike in purchase loans submitted and closed as ARMs

b. Use this as a tool to gain more referral business

1. Ratios must be within 31/43 (does not apply to streamlines)

2. The borrower is qualified off the start rate

THERE IS A HUGE MARKET FOR THIS ARM PRODUCT RIGHT NOW

IF YOU ARE NOT USING IT TO EXPAND YOUR BUSINESS YOU ARE MISSING THE BOAT

Please do not hesitate to contact me if you have any questions

Interest Rates for 7-7-2009

2009-07-07T12:31:00.001-07:00

30 year fixed conventional 5.00 with 1 point origination

30 year fixed conventional 5.375 with no origination

15 year fixed conventional 4.625 with 1 point origination

15 year fixed conventional 4.875 with no origination

30 year fixed FHA 5.125 with 1 point origination

30 year fixed FHA 5.50 with no origination

Happy Independence Day

2009-07-04T09:43:00.000-07:00

Click here for a history of Independence Day!

Problems associated with ARM’s don’t apply to Government Backed ARM’s

2009-07-03T08:43:00.000-07:00

There is no reason you shouldn’t feel good about selling Government backed ARM’s

Let’s examine the reasons why ARMs became a problem.

· Subprime Arm’s had large margins and jumped up as much as 6% or more in the first adjustment period. This problem does not apply to Gov. ARM’s! UWM’s Gov. ARM only has a 2% margin and can only adjust up or down 1% per year and 5% lifetime.

· Subprime Arms had pre-payment penalties that prevented borrowers from refinancing to lower rates. This problem does not apply to Gov. ARM’s. Government ARM’s have no pre-pays and allow you to streamline into a fixed rate any time and as many times as the borrower wants. You can even streamline into a better ARM rate.

· Home values went down preventing refinancing. This problem does not apply to Gov. ARM’s. Streamlines don’t require an appraisal. After 3 years your borrower will be able to roll in their costs on a streamline without and appraisal.

· Income decreased and the borrower didn’t qualify for a refi. This problem does not apply to Gov. ARM’s. Streamlines only verify employment, not income. Even if the borrower lost his/her job, all they need is to be employed anywhere, with any income. Even if they retire, they can still streamline.

· Many ARM’s are “Interest Only” and borrowers balances never went down. This problem does not apply to Gov. ARM’s. Government ARM’s are always Principal and Interest payments. In fact, your borrowers will pay more Principal in an ARM since it’s at a lower rate. Which means, when it comes time to streamline, you won’t have to share your yield spread with the borrower. You will have room to roll in their costs, even with out an appraisal.

Don’t let the misguided stigma of the ARM stop you from educating your borrowers on the Government Backed ARM’s. ARM’s are an effective tool to help your FHA borrowers save real $$$$$ and to help you write more loans!

Interest Rates for 7-1-09

2009-07-01T14:04:00.001-07:00

30 year fixed conventional 5.125 with 1 point origination

30 year fixed conventional 5.375 with no origination

15 year fixed conventional 4.625 with 1 point origination

15 year fixed conventional 4.875 with no origination

30 year fixed FHA 5.25 with 1 point origination

30 year fixed FHA 5.50 with no origination

Creditline Issues

2009-07-01T13:19:00.000-07:00

Why Creditlines Are Decreasing

The reason why some HECM creditlines are decreasing is that HECM servicers are growing the loan’s servicing fee set aside (SFSA) at a different rate than the rate they are using to grow the principal limit (PL), and then subtracting the SFSA from the PL to obtain the remaining creditline amount. Specifically, they are growing the SFSA by the loan’s expected rate (plus 0.5%), but growing the PL by the loan’s current note rate (plus 0.5%), and then subtracting the SFSA from the PL to obtain the remaining creditline.

This “subtraction” method violates HUD regulation 206.25 (d) and HECM Loan Agreement section 2.6.1, both of which state that “The line of credit amount increases at the same rate as the total principal limit increases.” It also violates a requirement of section 2.7.3 of the HECM Loan Agreement, which explicitly says that the creditline will increase “independently at the same rate as the total Principal Limit increases” (emphasis added).

The pro forma tables below illustrate the incorrect “subtraction” method by which HECM servicers are deriving creditline growth. Instead of applying the same percentage increase to the loan’s PL, SFSA, and remaining creditline each month, they are increasing the principal limit by one rate (the current note rate on the loan), increasing the SFSA by what is generally a higher rate (the loan’s initial expected rate), and then subtracting the SFSA from the principal limit to derive the creditline.

Source of the Problem

Why are servicers growing their PLs and SFSAs by different rates? Prior to 4/24/97, servicers grew their PLs and SFSAs by the same rate, so when they subtracted a SFSA from a PL the result was a creditline that had grown by the same rate as the PL and SFSA. On 4/24/97, however, HUD Mortgagee Letter (ML) 97-15 changed the rate at which the HECM PL and its constituent parts (including the SFSA and the creditline) grow. On HECMs closed prior to the ML’s effective date, the PL, SFSA, and creditline all increased each month after closing by each loan’s fixed expected rate (plus 0.5%). On HECMs closed after the ML’s effective date, the PL, SFSA, and creditline were all required to grow each month after closing by each loan’s then-current variable rate, that is, the rate currently being charged on the loan balance each month (plus 0.5%).

But servicers did not follow this new directive. They did increase the total PL by the new rate, that is, by the variable current rate actually being charged on the loan balance each month. But they continued increasing the SFSA by each loan’s fixed expected rate. So when they subtracted this incorrectly calculated SFSA from the correctly calculated PL, the result was an incorrect creditline amount. And since the expected rate was generally larger than the current rate, the resulting SFSAs were too large, and the derived creditlines were therefore too small. In loans with relative small creditlines, increases in the “too large” generated actual reductions (that is, negative growth) in creditlines.
The servicers misinterpreted the 1997 ML for several reasons. First, they confused the calculation that determines the initial amount of the SFSA at closing with the calculation used to grow the creditline after closing.
· In the first calculation, the loan’s fixed expected rate is used to project a future value for the SFSA when the borrower would reach age 100. This figure is then discounted back to a present value, which equals the SFSA amount at closing.
· The second calculation then grows the SFSA each month after closing as the loan actually elapses using the actual variable rate being charged on the loan each month.
The misinterpretation led HECM servicers to calculate both the initial SFSA amount and all actual SFSA growth after closing by the same fixed expected rate. But the fixed expected rate mistakenly used to grow the SFSA each month after closing was generally greater than the current variable rate on the loan. So the SFSA calculated by the servicers each month was too large and – when this “too large” amount was subtracted from the loan’s principal limit – the resulting creditline amount was too small. For loans with very small creditlines, the remaining creditline could decrease from one month to the next even if the borrower made no creditline draws in that month.
The other reasons for the servicers’ misinterpretation were that the HECM program is complicated, very few people understood its workings in detail, and the 1997 ML could have been written more clearly and precisely. Most importantly, HUD’s own accounting contractor, Lockheed Martin, misinterpreted HUD’s 1997 ML in the same way as the servicers had. As a result, servicers reconciling their figures to Lockheed Martin’s received what they took to be official confirmation that they were making the calculations correctly.

Consequences

As a result of industry-wide use of the incorrect “subtraction” method, HECM servicers are using a de facto creditline growth formula that
· is so complicated that it cannot be reasonably explained to consumers;
· violates HUD regulations and the HECM Loan Agreement; and
· generally shortchanges borrowers on the amount of growth stated in the regulations and loan agreement.
HUD and HECM servicers have been aware of this problem since 2004. In 2005, the servicers proposed a draft HUD Mortgagee Letter (ML) to resolve the matter. Separately, HUD developed its own ML draft directing servicers to correct their HECM creditlines. Neither ML was ever issued, however, in part because HUD found that its own accounting contractor, Lockheed Martin, was using the same complicated formula as the servicers. In addition, the servicers were concerned about potential liability for insufficient creditline growth.
HECM servicers have made it clear that they will not correct the problem unless directed to do so by HUD. Recently, a private consultant determined for HUD that Lockheed Martin has all the data that would be needed to correct the problem from a systems standpoint. Still unresolved, however, is the matter of servicer liability for insufficient creditline growth. But since this problem remains unresolved,
A) HECM lenders cannot reasonably tell consumers the rate at which their creditlines will grow;
B) HECM servicing statements clearly show creditline growth that violates HUD regulations and the HECM loan agreement; and
C) the aggregate shortfall in creditline growth is most likely substantial and growing.
A) Growth Rate Disclosure
Basic tenets of full disclosure and transparency require that lenders tell loan applicants how their loan will work with specificity, but in an understandable manner. On the one hand, loan terms must not be so vague that the precise meaning is unclear. On the other, they must not be so complex that hardly anyone could understand them. For example, it would be insufficiently precise to tell consumers that “your interest rate will change” or that “your interest rate is generally likely to be somewhat similar to the 1-year Treasury rate.” On the other hand, it would be overwhelming to tell them that
your rate each month will be tied to the 1-year Treasury rate at that time, but will also depend on the 10-year Treasury rate at the time of your loan’s closing and each month hereafter, the amount of your loan’s original principal limit and servicing fee set aside, and the amount of your monthly servicing fee, although the precise formula for determining this rate is highly complex and may be very difficult or impossible for you to understand.
A very attractive feature of the HECM program is that the amount of creditline funds remaining available to a borrower grows larger at the end of every month, until all such remaining funds are drawn down by the borrower. Although this creditline growth feature does not mean that creditline funds are “earning interest,” the effect is similar, but unlike interest earnings, this growing availability of credit is not taxable.
Understandably, many consumers want to know the rate at which their unused creditline funds will grow. But the de facto formula being used by HECM servicers defies disclosure. It is so complicated that it roughly matches the description in italics above and, according to a knowledgeable industry source, precisely equals the following:
Monthly increase in creditline = (PrincipalLimitLastMonth* (1+(NoteRateThisMonth+OngoingAnnualMIP)/12)-SFSALastMonth*(1+(ExpectedRate+OngoingAnnualMIP)/12)-LoanBalanceLastMonth*(1+(NoteRateThisMonth+OngoingAnnualMIP)/12))/(PrincipalLimitLastMonth-SFSALastMonth-LoanBalanceLastMonth) – 1
B) Creditline Miscalculations
HUD never intended that the HECM creditline growth rate should be so bizarrely convoluted, and virtually impossible to disclose or explain. To the contrary, as noted in a never-issued corrective HUD Mortgage Letter (ML) draft in 2005, HUD intended for the creditline to grow each month at the same rate as the growth in each loan’s “principal limit” – which is also the rate at which each loan’s balance (amount owed) grows. This growth rate would enable lenders to tell consumers that “your creditline will grow by the same rate as the one being charged on your loan balance.” HUD regulations at 24 CFR 206.25 (d), 206.3, and section 2.6.1 and 2.7.3 of the HECM Loan Agreement support this intent.

As explained in the 2005 ML draft, however, HECM servicers since 1997 had not been growing their creditlines by the same rate as the growth in each loan’s principal limit, as required by the citations in the previous paragraph. Instead, the draft said, they had been indirectly deriving each month’s new creditline amount by

1) increasing each loan’s principal limit (PL) by the loan’s current rate;
2) increasing each loan’s servicing fee set aside (SFSA) account by the loan’s original “expected” rate; and then
3) subtracting the new SFSA and the loan balance from the new PL amount to obtain the new creditline amount.
(Converting this subtraction method into a precise formula for creditline growth results in the formula above.)
C) Insufficient Creditline Growth
Generally, the incorrect servicer calculations discussed above generate creditline growth that is less than the correct calculations would produce. This occurs because fixed HECM expected rates are generally greater than current variable HECM rates. So when the resulting “too large” SFSAs are subtracted from PLs, the resulting creditlines are too small.
From 1997 to 2004, the average HECM expected rate exceeded the average HECM current note rate by about 150 basis points. So it is highly likely that the aggregate creditline reduction for the approximately 100,000 HECMs insured by HUD during that time was substantial. From the beginning of 2005 until the end of 2008, about 325,000 additional HECMs were closed. It is likely, however, that the per-loan reduction during this time was less than in the 1997-2004 period because the average HECM expected rate exceeded the average HECM current rate by about 50 basis points during this period.
Although the aggregate reduction since 1997 is a matter of speculation, there is no doubt that HECM creditlines and principal limits are growing by different rates, which directly contravenes the HUD regulations and HECM loan agreement sections cited above. The evidence of this fact can be found in the monthly servicing statements of major HECM lenders. Actual statements sent to HECM borrowers clearly show that the loan’s principal limit is growing at a different rate than its creditline.

Interest Rates for 6-29-09

2009-06-29T11:50:00.000-07:00

30 year fixed conventional 5.00 with 1 point origination

30 year fixed conventional 5.25 with no origination

15 year fixed conventional 4.625 with 1 point origination

15 year fixed conventional 4.875 with no origination

30 year fixed FHA 5.00 with 1 point origination

30 year fixed FHA 5.25 with no origination

2009-06-24T13:59:00.000-07:00

Interest Rates for 6-24-09

2009-06-24T12:43:00.000-07:00

30 year fixed conventional 5.25 with 1 point origination

30 year fixed conventional 5.5 with no origination

15 year fixed conventional 4.75 with 1 point origination

15 year fixed conventional 5 with no origination

30 year fixed FHA 5.375 with 1 point origination

30 year fixed FHA 5.75 with no origination

Your FHA Fact of the Day!

2009-06-24T08:07:00.000-07:00

DID YOU KNOW

What types of compensating factors must exist to approve loans that exceed FHA's ratio guidelines?

The borrower has successfully demonstrated the ability to pay housing expenses equal to or greater than the proposed monthly housing expense for the new mortgage over the past 12-24 months.
The borrower makes a large down payment (ten percent or more) toward the purchase of the property.
The borrower has demonstrated an ability to accumulate savings and a conservative attitude toward the use of credit.
Previous credit history shows that the borrower has the ability to devote a greater portion of income to housing expenses.
The borrower receives documented compensation or income not reflected in effective income, but directly affecting the ability to pay the mortgage, including food stamps and similar public benefits.
There is only a minimal increase in the borrower's housing expense.
The borrower has substantial documented cash reserves (at least three months' worth) after closing. In determining if an asset can be included as cash reserves or cash to close, the lender must judge whether or not the asset is liquid or readily convertible to cash and can be done so absent retirement or job termination.

Funds borrowed against these accounts may be used for loan closing, but are not to be considered as cash reserves. "Assets" such as equity in other properties and the proceeds from a cash-out refinance are not to be considered as cash reserves. Similarly, funds from gifts from any source are not to be included as cash reserves.

The borrower has substantial nontaxable income (if no adjustment was made previously in the ratio computations).
The borrower has a potential for increased earnings, as indicated by job training or education in the borrower's profession.
The home is being purchased as a result of relocation of the primary wage-earner, and the secondary wage-earner has an established history of employment, is expected to return to work, and reasonable prospects exist for securing employment in a similar occupation in the new area. The underwriter must document the availability of such possible employment.
These do not apply to FHA Reverse Mortgages.

No More MetLife

2009-06-23T15:44:00.000-07:00

We will not be using MetLife Bank anymore to fund Reverse Mortgages. (until they can close a loan) We will still have access to them so in extreme cases where their fixed product is absolutely necessary we can use it. The time to fund a loan at MetLife is embarrassing! Sun West has almost the same product, it will get your borrowers within a few thousand dollars and we feel that processing time is more important to most borrowers than the little extra money they will get.

If the money IS more important to them please let them know it will more than likely take more than 2 months to fund.

Thank you

Interest Rates for 6-23-09

2009-06-23T11:52:00.001-07:00

30 year fixed conventional 5.25 with 1 point origination

30 year fixed conventional 5.5 with no origination

15 year fixed conventional 4.75 with 1 point origination

15 year fixed conventional 5 with no origination

30 year fixed FHA 5.25 with 1 point origination

30 year fixed FHA 5.5 with no origination

Questions with Answers from Chandra

2009-06-19T13:55:00.000-07:00

"GFE's" look viable. I've never gone beyond this with forward mortgage so I have some question on process:
1. Next step- Get Forward Loan Form" completed YES THAT IS STEP 1

2. Credit card authorization and signature.
YES BUT IT IS ON THE FORWARD LOAN FORM
(You do not have to get a signature as long as you put "Per Phone Authorization" and date it)

3. Your review to establish eligibility. Does she submit: W-2? 1099- for how many years? 2 months banking statement pay stub Soc. Sec award letter

SHE WILL SUBMIT ALL THAT AND SOME BACK WITH THE APPLICATION PACKAGE. I DO NOT NEED IT ALL BEFORE UNLESS YOU HAVE A CONCERN WITH THEIR INCOME. I WILL EMAIL YOU THE APPLICATION PACKAGE AFTER I GET THE CREDIT RUN. 4. You order appraisal- she pays appraiser? FOR A CONVENTIONAL LOAN WE ORDER BUT SHE MUST PAY UP FRONT AT TIME OF SCHEDULING. WE WILL HAVE HER COMPLETE A FORM WITH THE APPLICATION PACKAGE.FOR AN FHA LOAN THEY WILL PAY THE APPRAISER AT THE DOOR AT TIME OF INSPECTION.

5. You order loan doc's- you contact notary?
YES AND YES What do I tell the time frame is?
AT THIS TIME I WOULD SAY 30 TO 60 DAYS. IT DEPENDS ON THE LOAN PROGRAM AND LENDER.

Interest Rates for 6-19-09

2009-06-19T13:52:00.000-07:00

30 year fixed conventional 5.375 with 1 point origination
15 year fixed conventional 5.00 with 1 point origination
30 year fixed FHA 5.50 with 1 point origination

“All rates and programs are subject to change without notice. This information is intended for mortgage professionals only and is not an advertisement to extend consumer credit as defined by REGZ. The above rate represents a consumer on a rate and term refinance transaction with a credit score above 720 with 40% or more equity in their home and establishing an impound/escrow account."

Whatch this video

2009-06-18T10:47:00.000-07:00

Follow the link and watch a 6 minute video. It changed my life!

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If you have already joined Local Ad Link with us, you NEED to attend our next webcast, we have perfected the sales pitch and I can close 9 out of 10 business owners!

Interest Rates for 6-18-09

2009-06-18T10:46:00.000-07:00

30 year fixed conventional 5.25 with 1 point origination

15 year fixed conventional 4.875 with 3/4 point origination

30 year fixed FHA 5.375 with 1 point origination

Interest Rates for 6-17-09

2009-06-17T12:18:00.000-07:00

30 year fixed conventional 5.00 with 1 point origination

15 year fixed conventional 4.75 with .625 point origination

30 year fixed FHA 5.25 with ¾ point origination

New Condo Rules for FHA & Reverse Mortgages

2009-06-16T16:28:00.000-07:00

June 12, 2009 MORTGAGEE LETTER 2009-19

TO: ALL APPROVED MORTGAGEES
ALL FHA ROSTER APPRAISERS

SUBJECT: Condominium Approval Process – Single Family Housing

In accordance with the passage of the Housing and Economic Recovery Act (HERA) of 2008, the Federal Housing Administration (FHA) is implementing a new approval process for Condominium Projects to insure mortgages on individual units under Section 203(b) of the National Housing Act. FHA will now allow lenders to determine project eligibility, review project documentation, and certify to compliance of Section 203(b) of the NHA and 24 CFR 203 of HUD’s regulations. HUD will continue to maintain a list of Approved Condominium Projects. The requirements of this Mortgagee Letter are effective for all case numbers assigned on or after October 1, 2009 except as noted.

The purpose of this Mortgagee Letter is to provide guidelines and instructions on options available to lenders to receive mortgage insurance on condominium units which are located in a project. The lender will be required to retain all the project legal documents, contracts, conveyances, plats, plans, insurance coverage, presale and owner occupancy conditions and other documentation in connection with their review and approval of the condominium project. When requested, the lender must provide such documentation to HUD staff for verification of compliance with HUD’s regulations.

I. Approval Processing Options

A. The lender will have two condominium project approval processing options. The applicable documentation requirements will be the same for each option:

1. HUD Review and Approval Process (HRAP).
2. Direct Endorsement Lender Review and Approval Process (DELRAP), outlined in this Mortgagee Letter. This option is only available to lenders who have unconditional Direct Endorsement authority and staff with knowledge and expertise in reviewing and approving condominium projects.

B. The processing options stated above will be applicable to condominium developments that are:

1. Proposed/Under Construction;
2. Existing Construction; or
3. Conversions.
II. Eligible Projects

The Condominium Project has been created and exists in full compliance with applicable State law requirements of the jurisdiction in which the Condominium Project is located, and with all other applicable laws and regulations.

III. Ineligible Projects

A. Condominium Hotel or “Condotels”
B. Timeshares or segmented ownership projects
C. Houseboat projects
D. Multi-dwelling unit condominiums [i.e. more than one dwelling per condominium unit]
E. All projects not deemed to be used primarily as residential

IV. General Requirements

A. Site Condominiums

Site Condominiums are single family detached dwellings encumbered by a declaration of condominium covenants or condominium form of ownership. Condominium Project approval is not required for Site Condominiums; however, the Condominium Rider (Attachment D) must be included in the FHA case binder submitted for insurance endorsement. Manufactured housing condominium projects (MHCPs) may not be processed as site condominiums; these projects will require approval under HRAP.

NOTE: Site Condominiums requirements are effective immediately with issuance of this Mortgage Letter.

B. “Spot Loan” Approval Process

The Spot Loan Approval process as defined in Mortgage Letter 1996-41 is eliminated with issuance of this guidance. The DELRAP and HRAP processes have been streamlined to allow for uncomplicated condominium project approvals eliminating the need to approve units on a “spot loan” basis.

C. FHA-to-FHA Transactions

Project Approval is not required for:

a. FHA‑to‑FHA streamline refinance transactions; or
b. FHA/HUD Real Estate Owned (REO) Division sales.

D. Environmental Review Requirements

If a lender elects to use the HRAP option, then environmental reviews will not be
required for projects that, at the time that condominium project approval is requested,
have progressed beyond that stage of construction where HUD has any influence over the
remaining uncompleted construction. This occurs when:

· a condominium plat or similar development plan and any phases delineated therein have been reviewed and approved by the local jurisdiction and, if applicable, recorded in the land records, and
· the construction of the project’s infrastructure (streets, stormwater management, water and sewage systems, utilities, facilities (e.g., parking lots, community building, swimming pools, golf course, playground, etc.) and buildings containing the condominium units has proceeded to a point that precludes any major changes.

Environmental reviews will not be required for condominium projects approved using the
DELRAP option. If the appraiser identifies an environmental condition or the lender is
aware of an existing environmental condition through remarks provided on the Builder’s
Certification, form HUD-92541, the appraisal or other known documentation, the lender
must avoid or mitigate the following conditions before completing its review process:

1. The project is located in a Special Flood Hazard Area designated on a Federal Emergency Management Agency flood map.

2. Potential noise issues, where the property is located within 100 feet of a highway, freeway, or heavily traveled road, within 300 feet of a railroad, or within one mile of an airport or five miles of a military airfield.

3. The property has an unobstructed view, or is located within 2000 feet, of any facility handling or storing explosive or fire-prone materials.

4. The property is located within 3000 feet of a dump or landfill, or of a site on an EPA Superfund (NPL) list or equivalent state list, or a Phase I Environmental Site Assessment indicates the presence of a Recognized Environmental Condition or recommends further (Phase II) assessment for the presence of contaminants that could affect the site.

5. The property has any hazards or adverse conditions listed in Section 1.f. of the Builder’s Certification, including, but not limited to, high ground water levels, unstable soils, or earth fill.

6. The project is located in a wetland designated on National Wetlands Inventory maps or designated by State or local authorities.

7. The project is on the National Register of Historic Places or is within a historic district listed on the Register.

8. The appraiser or DE lender is aware of any other condition that could adversely affect the health or safety of the residents of the project.
V. Project Eligibility Requirements

A. The following requirements apply to all Condominium Project approvals:

· Projects consist of two units or more.
· Projects must be covered by hazard and liability insurance and, when applicable, flood insurance.
· Right of first refusal is permitted unless it violates discriminatory conduct under the Fair Housing Act regulation in 24 CFR 100.
· No more than 25 percent of the property’s total floor area in a project can be used for commercial purposes. The commercial portion of the project must be of a nature that is homogenous with residential use, which is free of adverse conditions to the occupants of the individual condominium units.
· No more than 10 percent of the units may be owned by one investor. This will apply to developers/builders that subsequently rent vacant and unsold units. For two and three unit condominium projects, no single entity may own more than one unit within the project; all units, common elements, and facilities within the project must be 100 percent complete; and only one unit can be conveyed to non-owner occupants.
· No more than 15 percent of the total units can be in arrears (more than 30 days past due) of their condominium association fee payment.
· At least 50 percent of the total units must be sold prior to endorsement of any mortgage on a unit. Valid presales include an executed sales agreement and evidence that a lender is willing to make the loan.
· At least 50 percent of the units of a project must be owner-occupied or sold to owners who intend to occupy the units. For proposed, under construction or projects still in their initial marketing phase, FHA will allow a minimum owner occupancy amount equal to 50 percent of the number of presold units (the minimum presales requirement of 50 percent still applies).
· Legal Phasing is permitted for condominium processing. It is recommended that developers submit all known phases for initial project approval. For purposes of calculating the owner-occupancy percentage:

a. On multi-phased projects the owner-occupancy percentage is calculated on the first declared phase and cumulatively on subsequent phases if the ownership of the condominium project remains the same;

b. If multi-phasing includes separate ownership per phase, each phase is calculated individually; or
c. Single-phase condominium project approval requests must meet the owner-occupancy percentage requirement.

· FHA Concentration

a. Projects consisting of three or less units will have no more than one unit encumbered with FHA insurance.
b. Projects consisting of four or more units will have no more than 30 percent of the total units encumbered with FHA insurance.

· Reserve Study - a current reserve study must be performed to assure that adequate funds are available for the funding of capital expenditures and maintenance. A current reserve study must be no more than 12 months old – if recent events or market conditions have affected the finished condition of the property that information must be included. When reviewing the reserve study, consideration must be given to items that have been replaced after the time that the reserve study was completed.

VI. Manufactured Housing Condominium Projects

Pursuant to HERA, manufactured housing condominium projects are now eligible for FHA mortgage insurance. Accordingly, all outstanding and current FHA Manufactured Housing individual unit requirements remain applicable for both Home Equity Conversion Mortgages (HECM) and forward mortgages, including elevations in flood zones and foundation requirements. MHCPs must be submitted to the applicable Homeownership Center for review and approval – these projects are ineligible for DELRAP processing. MHCPs may not be processed as site condominiums; these projects will require approval under HRAP.

1. Appraisal reporting requirements for condominium manufactured homes:

a. Appraisal must be reported on the Manufactured Home Appraisal Report (Fannie Mae Form 1004C).
b. Subject condominium project must be inspected and the Project Information section of the Individual Condominium Unit Appraisal Report (Fannie Mae Form 1073) must be completed and included as an addendum to the appraisal report.
c. Comparable sales must be condominium manufactured homes. Detailed explanations must be provided when search parameters are expanded due to the lack of comparable sales in subject market area.

VII. Condominium Conversions

Conversion to condominiums occurs in those projects which involve changing the title of an existing structure generally under one title, to property that is separated into units so that the title to most units can be held separately. Changes to condominium conversion requirements are defined below:

1. The one-year waiting period requirement for conversions is eliminated;
2. In the event that FHA is insuring a mortgage on a unit and an undivided interest in the common elements on a project undergoing remodeling or rehabilitation, the entire condominium project, including the common facilities, must be 100 percent completely built before any mortgage may be endorsed. Escrow provisions will be permitted for weather related delays for common areas only.

VIII. FHA Connection (FHAC)

System modifications will be made to capture additional information, remove obsolete fields, and identify points of contacts. Major planned system modifications are:

1. Establishment of a Condominium Project Approval screen in FHAC that will be used by DE lenders and HUD staff to enter approval, rejection and recertification data.
2. System generated condominium project identification numbers based on the HOC of jurisdiction.

NOTE: While major system modifications have been identified, other modifications will be made and released as necessary to ensure collection of all valid information.

IX. Condominium New Construction Pre-approval and Inspection Requirements

Mortgagee Letter 2001-27 prohibited condominium processing under those guidelines. This Mortgagee Letter now permits condominium processing under the policy as established below.

In cases where a building permit and a certificate of occupancy (or its equivalent) are issued by a local jurisdiction that performs a minimum of three inspections (typically the footing, framing and final) neither an Early Start Letter nor a HUD approved ten-year warranty plan is required. For those jurisdictions that do not issue a building permit (or its equivalent) prior to construction and a Certificate of Occupancy (or its equivalent) upon completion of construction, a condominium unit that is one year old or less must have either an Early Start Letter (with a minimum of three inspections by an FHA Roster Inspector) or be covered by a HUD-approved ten-year warranty plan (with a final inspection by a FHA Roster Inspector) to be eligible for high-ratio mortgage insurance. All condominium types are eligible to follow this process (e.g. Multi-family). Projects are still required to be on the FHA-approved condominium list.

FHA will require the completion and retention of the following documents when processing new construction condominium project approvals:

· Builder’s Certification of Plans, Specifications and Site, form HUD-92541
· Builder’s Warranty, form HUD-92544
· Building Permit (or its equivalent)
· Final Certificate of Occupancy (or its equivalent)

FHA will not accept a temporary Certificate of Occupancy; all units within the building
(where the specific unit that is security for the insured financing is located) must be complete.

X. General Processing Steps for DELRAP or HRAP

A. Determine acceptability of the site and location of the project. Refer to Attachment A, Condominium Project Approval Matrix.

B. Review the project’s financial and legal documents; if acceptable, authorized personnel will sign and date the Lender Certification of Condominium Requirements
(Attachment B).

C. Place the Lender Certification of Condominium Requirements and other required certifications in the FHA case binder.

D. Retain and maintain all documents used to review and approve the project for a period of three years from the date of project approval.

E. Mixed condominium review and processing is not permitted. If a lender opts to participate in the DELRAP process, all future processing submissions must be processed, accordingly, in that sole and particular manner with the exception of manufactured housing condominium project approvals (these must be submitted to the applicable Homeownership Center for review and approval).
F. If a project is listed as Rejected or Withdrawn on the FHA-approved condominiums list, the only approval process accepted is HRAP.

G. Second and subsequent lenders that submit a unit for insurance in a project that is listed on the FHA-approved condominium list are not required to complete any further approval process. At the lender’s discretion, they may seek any additional information to satisfy their own requirements and/or perform their own due diligence. FHA will require the lender to certify it has no knowledge of circumstances or conditions that might have an adverse effect on the project or cause a mortgage secured by a unit in the project to become delinquent.

H. Subsequent phases being approved by a different lender must follow the general procedures listed here in Section X. The original lender must also follow these general procedures but will have already satisfied some of the steps listed.

I. All required certifications, as applicable, must be included in the FHA case binder submitted for insurance endorsement.

J. For both new construction and conversions if the developer intends to market five or more units within the next 12 months with FHA mortgage insurance, an Affirmative Fair Housing Marketing Plan (AFHMP) or a Voluntary Affirmative Marketing Agreement (VAMA) must be in place. Form HUD-935.2C, Affirmative Fair Housing Marketing Plan – Condominium or Cooperatives, is to be used for condominium projects. This completed form must be submitted to the Director of the Processing and Underwriting Division in the jurisdictional HOC for approval. If “a, b, c, or d” is checked on response to Question 2 in the Applicability section, the developer is not required to complete an AFHMP. The developer should complete block 11 on form HUD-92541, Builder’s Certification of Plans, Specification and Site.

K. Environmental reviews will be required for proposed and under construction project approvals submitted under the HRAP option consistent with the Environmental Review Requirements listed in Section IV. D. Environmental review is not required under DELRAP, but the lender must take necessary actions to avoid or mitigate identified environmental conditions prior to completing its project review.

L. Transfer of control of the Homeowners Association shall pass to the owners of units within the project no later than the earlier of the following:

1. 120 days after the date by which 75 percent of the units have been conveyed to the unit purchasers, or

2. One year after completion of the project evidence by the first conveyance to a unit purchaser.

XI. Certification for Initial Approval

Lenders must provide certifications on company letterhead signed by a company authorized representative (signature stamps or electronic signatures are not authorized) that:

1. The eligible condominium project complies with applicable FHA requirements addressed within this Mortgagee Letter;
2. All condominium legal documents meet HUD regulations, state and local condominium laws; and
3. Pre-sale and owner occupancy ratios per loan are met.

NOTE: FHA will not require an attorney's certification; however, lenders may obtain this as part of their due diligence process. Lenders are reminded that this document will not replace other condominium certifications required from the lender.

XII. Certification of Projects Previously Approved

If a project has been previously approved, lenders must certify that they are not aware of any change in circumstances since initial approval of the project that would result in the project no longer complying with FHA requirements.

XIII. Recertification of Project Approvals

Condominium Project approvals will expire two years from the date it has been placed on
the list of approved condominiums. This will also apply to all projects currently on the list of approved condominiums. Further participation in the program after this two-year period has expired will require recertification to determine that the project is still in compliance with HUD’s owner-occupancy requirement and that no conditions currently exist which would present an unacceptable risk to FHA. Items that should be given consideration are:

1. Pending special assessments,
2. Pending legal action against the condominium association, or its officers or directors,
3. Hazard, liability insurance and when applicable flood insurance.

XIV. Quality Assurance

Monitoring the condominium approval process is critical to the success of the program. Lenders who approve condominium projects utilizing the DELRAP option will be required to submit a copy of the complete condominium project approval package to the applicable Homeownership Center within five business days of approval. Lenders are required to submit the first five DELRAP approvals for review. Further, to manage FHA’s risk, and ensure compliance with all condominium project policy requirements, additional condominium project approvals will be selected for review. The criteria for selection of the additional approvals will be determined and lenders will be notified in future guidance.

XV. False Certifications

Title 18 U.S.C. 1014, provides in part that whoever knowingly and willfully makes or uses a document containing any false, fictitious, or fraudulent statement or entry, in any matter in the jurisdiction of any department or agency of the United States, shall be fined not more than $1,000,000 or imprisoned for not more than 30 years or both. In addition, violation of this or others may result in debarment and civil liability for damages suffered by the Department.

XVI. Insurance of Individual Units

All applicable, outstanding and any additional FHA insurance requirements not defined in this guidance must be met for individual units.

Sincerely,

Brian D. Montgomery
Assistant Secretary for Housing-
Federal Housing Commissioner

For Reverse Mortgage or FHA questions call WSB Mortgage Services, Inc. 866-309-6626

Interest Rates for 6-16-09

2009-06-16T12:00:00.000-07:00

30 year fixed conventional 5.25 with 1 point origination

15 year fixed conventional 4.75 with 1 point origination

30 year fixed FHA 5.25 with ¾ point origination

Interest Rates for 6-15-09

2009-06-15T13:46:00.000-07:00

30 year fixed conventional 5.125 with 1 point origination

15 year fixed conventional 4.875 with 1 point origination

30 year fixed FHA 5.375 with ½ point origination

Get Paid for Survey's

2009-06-12T15:46:00.000-07:00

Online Companies Will Pay YOU $5 to $125 for Each Survey!

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Get Paid $5 to $95 Per Hour to Take Surveys Offline!

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Get Paid to Drive Your Car $1000 to $3000 per month! Plus They Pay For Your Gas!

This is Pretty cool! I have had 3 friends who have lost their job's do this and in the first week each made $225.00. Now I know that isn't much but they are making more and more as they utilize this program.

Since the unemployment rate is so high I figured I would post this.

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Letter to the Comptroller of the Currency

2009-06-12T13:32:00.000-07:00

Ed Wood

508 NW Lambrusco Drive phone: 772/785-6174
Port St. Lucie, FL 34986 cell: 772/618-5288 FAX: 772/785-8164
e-mail: edandterri@bellsouth.net

June 15, 2009

Mr. John C. Dugan
Comptroller of the Currency
Administrator of National Banks
Washington, DC 20219

Dear Mr. Dugan:

I have read the transcript of your presentation, Consumer Protections for Reverse Mortgages, delivered before the American Bankers Association Regulatory Compliance Conference, on June 8, 2009 in Orlando, Florida.

Your background and experience is very impressive, but your knowledge of the Reverse Mortgage is sadly lacking.

1. You state that reverse mortgages, “…have some of the same characteristics as the riskiest types of subprime mortgages.” But you fail to enumerate comparable characteristics. The problems involved with subprime mortgages were the result of unscrupuously aggressive marketing by the private sector, and an apparent lack of regulatory oversight.

Don’t you know that the reverse mortgage is not a product of the private sector, but is the result of the Home Equity Conversion Act, created and passed by Congress and encacted into law on February 2, 1988? This legislation produced the Home Equity Conversion Mortgage (HECM) which by your own statement constitutes over 90% of all reverse mortgages. (The other 10% being “jumbo” loans for properties too large to qualify for the mandatory FHA mortgage insurance coverage for HECM loans.) These jumbo loans no longer exist.

Don’t you know that HECM reverse mortgages are totally controlled by the Department of Housing and Urban Development (HUD), and insured by the Federal Housing Administration (FHA)? HUD controls every aspect of the marketing of reverse mortgages; origination fees, interest rates, commissions, insurance costs, everything. No other form of indebtedness is so rigidly controlled by the Federal Government.
2. You state that, “This substantial pot of cash can tempt lenders to simultaneously and aggressively market investment, insurance, or annuity products, or worse, attempt to condition loan approval on the purchase of such products.”

Don’t you know that both the application documents and the the final closing documents require notitized statements, signed by both the applicant and the sales representative, specifically prohibiting such solicitations? You should know this, since you twice make reference to it further into your presentation. So the previously quoted statement contradicts your own further conclusion.

3. You state, “these loans can be more costly than other types for mortgages because… lenders need to be compensated for the risk in proprietary products that the outstanding balance may exceed the value of the collateral over time.”

Don’t you know that the mandatory FHA mortgage insurance policy protects the applicant, his/heirs, and the lender, from responsibility should the amount borrowed exceed the value of the property at the end of the loan period? There is no risk to the lender, as long as the FHA remains viable.

4. You state, “a HECM borrower may draw down his or her line of credit in a single lump at any time, and…HUD has estimated that borrowers choosing a line of credit typically withdraw at least 60% of their funds as soon as the loan is closed.” This statement is confusing, at best. But…

Don’t you know that if the lender is required by HUD to “expand the line of credit” (meaning tax-free interest) on any funds left with the lender at a rate of 0.5% greater than the interest charged on the funds the applicant chooses to withdraw? Why is this not mentioned?

There are many other mis-statements or omissions of fact that I could mention. There is a wealth of unbiased information on reverse mortgages available on-line from the Department of Housing and Urban Development, the Federal Housing Administration, the AARP, and others. Perhaps your staff can provide more thorough research before you further embarrass yourself.

Sincerely,

Ed Wood

Interest Rates for 6-12-09

2009-06-12T11:05:00.000-07:00

30 year fixed conventional 5.375 with 1 point origination

15 year fixed conventional 5.125 with 1 point origination

30 year fixed FHA 5.5 with ½ point origination

“All rates and programs are subject to change without notice. This information is intended for mortgage professionals only and is not an advertisement to extend consumer credit as defined by REGZ. The above rate represents a consumer on a rate and term refinance transaction with a credit score above 720 with 40% or more equity in their home and establishing an impound/escrow account."

What is taking so long!?

2009-06-11T16:27:00.000-07:00

With the low fixed rate Reverse Mortgage that Met Life has been offering they are slammed and Underwriting is taking multiple weeks. This is a problem! We have a solution. Sun West Bank has a fixed rate Reverse Mortgage with a little higher interest rate but 24 to 48 hour turn around on Underwriting versus the 1 month we are seeing at Met Life. We will now be sending all Fixed Rate HECM's to Sun West. If you have already written a Fixed HECM with Met Life you and your client need to decide if a little less money available is worth the loan being closed a month faster. In most cases the difference is minimal. (a couple thousand Dollars) In some cases that couple thousand Dollars can make a deal not happen. If you have already written a Met Life Loan and would like to pull it to go to Sun West for faster turn around we will need to have new disclosure docs signed before we submit.

If you have any questions give me a call

Riley
866-309-6626

Interest Rates for 6-11-2009

2009-06-11T10:15:00.000-07:00

30 year fixed conventional 5.75% with 1 point origination
15 year fixed conventional 5.125% with 1 point origination
30 year fixed FHA 5.75% with 1 point origination

“All rates and programs are subject to change without notice. This information is intended for mortgage professionals only and is not an advertisement to extend consumer credit as defined by REGZ. The above rate represents a consumer on a rate and term refinance transaction with a credit score above 720 with 40% or more equity in their home and establishing an impound/escrow account."

Consumer Protections for Reverse Mortgages

2009-06-10T09:35:00.001-07:00

This is a government regulator perspective, take a minute and check it out.
Click here!

Foreclosure Defense Secrets

2009-06-09T08:55:00.000-07:00

We all have come across someone who has faced foreclosure at some point in our lives. Now more than ever this is a fact. It may be a family member, friend, colleague, it may even be you. Here is a great book on how to stop foreclosure. This has nothing to do with the Reverse Mortgage. I thought this may be a good thing to share as it stopped my sister in law from losing her house!

Click Here! To learn more about this book.

Referral Approach

2009-06-09T08:33:00.001-07:00

Gil Gray gave this to me, I think it is worth sharing with everyone.

LEADS SCRIPT FOR REVERSE MORTGAGE
After the sale and the reverse mortgage has been completed
Joe and Jan, it’s been a real pleasure in getting to know you folks. I’m sure the benefits such as (describe to them in detail.) will have very positive effect on your life and lifestyle. And, I was wondering if you might be willing to do me a favor (When you have done something for someone and you ask them for a "favor" you make them feel important as they can now do something for you that you need or you wouldn’t be asking. And always remember "Ask and you shall receive" and if you don’t ask you seldom receive.

You probably know a number of people that would probably appreciate the opportunity to learn how a reverse mortgage might benefit them as it has done for you. I would like to meet some of these people but before you mention any names, let me emphasize two things (this last phrase in italics needs to be said quickly and emphatically)

One, (Lift one finger in the air for emphasis) anything I know about you, your finances or anything else you might have told me is strictly and emphatically confidential. And this is as it should be and with me everything I know about you is absolutely confidential. Right?
And Two, Any names you suggest to me are simply as an introduction. Under no circumstances are you recommending me or the idea of a reverse mortgage. That is only for them to decide. Right? (and nod your head as you say "right")

Here are some ideas that may be helpful for you. . . .
(immediately suggest names of the categories of people they might choose from as this prevents them from saying "I can’t think of anybody at the moment but if I do I’ll be sure to let you know". This statement knocks you out of the box and you just lost the opportunity to get new prospects. So suggest categories such as neighbors. Ask questions that avoid a Yes or No response. For example, who lives in that two story house across the street. Other categories: family members, church, clubs, non profit activities, sports –golf, bridge, poker) and the coup de grace – the Christmas Card List or membership lists.

Have an attitude of positive expectation and remember . . .getting the first name is like pulling teeth. After the first one others come naturally. GOOD LUCK ON THIS SCRIPT. LIKE ANY GAME, PRACTICE MAKES PERFECT. AT LEAST IMPROVEMENTS.

Internet and Social Marketing

2009-06-08T20:50:00.000-07:00

More lenders are turning to social marketing on the web to promote their reverse mortgage business using tools like Facebook and Twitter. Even the NRMLA started hosting marketing panels on social media tools during its road show and as someone who is a believer, it’s clear that people in our industry are interested… but is Facebook the place to be?

In March, Inside Facebook released data which showed that seniors were among the fastest growing demographic of users. However, new data shows that while the social network saw a surge in the 55+ crowd earlier this year, in April and May the number of active users over 55 decreased by over 650,000.

In the comming weeks we will be showing you a better way to link your website if you have one to ours. We will show you how we can even build you your own network of sites that promote you!

Stay tuned for more on this.

Help yourself get more leads!

2009-06-08T14:49:00.000-07:00

The internet is a strange thing, and we know more than most but not as much as many. A way to help us out is by clicking the google ad words links on the right side of the page. Most of these are links to competitors and lead generators but by doing so you will learn more about the Reverse Mortgage business. When you have a few minutes to spare click on those links to check out other websites and see what's happening in the industry!

Our new client BLOG

2009-06-08T14:47:00.000-07:00

This is a BLOG with information for Reverse Mortgage Clients or Prospects or people who just want to learn about the Reverse Mortgage.

If you have someone that is interested in learning more about the Reverse Mortgage and how it works send them HERE

A message from Chandra about Interest Rates

2009-06-08T08:24:00.001-07:00

Let’s make the rest of this year a great one. I have had many questions about how long the quotes are good for. RATES CHANGE DAILY AND ARE ONLY GOOD THE MINUTE THE QUOTE IS PREPARED. However rates can go up or down, and since the rate is not locked, if rates happen to go down then the borrowers get a better deal. It is best to let them know that we watch rates daily and try to lock them on the rate quoted or better. If rates happen to go up and they want to close on the higher rate then we will do that. They just need to get the application in process so we can have it ready to lock when they are agreeable to the final rate and/or fees. WE DO NOT LOCK A LOAN WITHOUT CONSULTING YOU, THE LOAN OFFICER, FIRST! Which means you really need to know your clients desires for the loan. Get to know them and their needs and all will be well.

We DO NOT call your borrowers for any reason. You are the sole contact between WSB and your client. If you need help understanding something we are here to help. We do not call your clients because that is a relationship you need to maintain. If they start hearing from someone other than you they skip you and call that person the next time. You lose touch with your client.

FOLLOW UP with them every 24 to 48 hours after you give them a quote. Do not let them forget about it. Sometimes they get busy and forget. The best thing is to get them to decide that YES, they at least want to do one of the loan options you suggested. Let’s get that credit card number, run the credit, pick a lender and get the appraisal in the works. This is a commitment on your clients side to pay for that appraisal.

Letting that lead slip away is throwing money out the window. KEEP ON TOP OF THEM! Sometimes a client will pick you over a broker with less fees due to the fact that you called them back or returned their call promptly. In this market is does not take much to gain that client or lose them.

If you closed one forward loan per month your income growth is huge so let’s get them closed!

Chandra Butcher

WSB Mortgage Services, Inc.
Nationwide Forward Mortgage Division Manager
Nevada State QE
PO Box 488

Virginia City, NV 89440
775-847-7779 Phone
775-847-7782 Fax
Email chandra@wsbrm.com

Get your CRMA Designation

2009-06-04T16:18:00.000-07:00

With so many things changing in the mortgage industry give your clients the piece of mind of knowing you have gone the extra mile. Get your CRMA designation. You will write more business. When you are competing against other Loan Officers that are NOT CRMA's you will outsell them every time!

CLICK HERE to learn more

If you are interested and a contracted loan officer with WSB we can get you a HUGE discount on this course! Call us if you are interested!

WSB is on top of the World!

2009-06-04T16:07:00.000-07:00

Well almost! We ARE on top of google though! Click the image below to see us at the top of google!

Texas Loan Modification

2009-06-04T16:06:00.002-07:00

There is much discussion among the state regulators regarding the necessity for licensure of loss mitigation providers, loan modification consultants, or foreclosure consultants (herein "loss mitigation providers"). Fortunately there is no ambiguity in Texas: any activity that meets the definition of a mortgage loan as defined in the Mortgage Broker License Act Regulation, 7 Texas Administrative Code, Chapter 80, does require a license unless exempt under the Mortgage Broker License Act, Finance Code Chapter 156.202.

80.2(5) "Mortgage Loan" means any indebtedness secured by a lien against, or security interest in, one-to-four family residential real property when the property is intended to be occupied for residential purposes whether or not the property is acquired for investment purposes or acquired for owner occupancy. It includes new loans and renewals, extensions, modifications, and rearrangements of such loans. The term does not include a loan which is secured by a structure that is suitable for occupancy as a one-to-four family residence, but is used for a commercial purpose such as a professional office, beauty salon, or other non-residential use, and is not used as a residence.
It is not the intent of the department to stop the valuable work loss mitigation providers are doing during this period of financial uncertainty. If a loss mitigation provider voluntarily comes forward to apply for licensure, the department will work with the provider by issuing a provisional license so that the provider may continue to conduct business while meeting the educational and examination requirements of the license. The provider should contact the Division of Licensing at licensing@sml.state.tx.us for details.

Helping Seniors

2009-06-04T16:06:00.001-07:00

We've been able to help many seniors with their medical bills, long term health care, paying off mortgages. But can a Reverse Mortgage help when the homeowner owes more than the property is worth? Sometimes it can! Here's a recent example:

We were approached by a couple in their sixties. He had been out of work for over two years, and then his wife developed lymphatic cancer. In their desperation, they were talked into a "sub-prime" mortgage, which was subsequently sold, re-sold, and then sold again. Their variable interest rate doubled, and the owners were facing immediate foreclosure. They didn't want to lose their home, and the bank didn't want a foreclosed property. The WSB Reverse Mortgage provided a win-win opportunity.

With our assistance, the bank soon realized it would be in its best interest reduce the balance owed to a level that would permit this senior couple to pay off their loan with a Reverse Mortgage... and it worked!

The bank avoided foreclosure on the property, and the senior couple is now able to live securely for the rest of their lives, with no further mortgage payments... ever!

Ed Wood,
Loan Officer
WSB Mortgage Services, Inc.

Manufactured Home Rules Changed for Reverse Mortgages

2009-06-04T16:04:00.000-07:00

This Mortgagee Letter provides guidance on manufactured housing eligibility requirements for Federal Housing Administration (FHA) mortgage insurance under Title II of the National Housing Act. Changes to manufactured housing requirements for new and existing construction were made by the Housing and Economic Recovery Act of 2008 (Public Law 110-289, approved July 30, 2008) (HERA). This mortgagee letter addresses those changes that can be implemented immediately.

Manufactured Homes: Eligibility and General Requirements - Title II

A manufactured home is a structure that is transportable in one or more sections, and is designed and constructed to the Federal Manufactured Construction and Safety Standards and is so labeled. To be eligible for FHA mortgage insurance, all manufactured homes must comply with the following:

1. have a floor area of not less than 400 square feet;
2. be constructed after June 15, 1976, in conformance with the Federal Manufactured Home Construction and Safety Standards, as evidenced by an affixed certification label in accordance with 24 CFR 3280.11(manufactured homes produced prior to that date are ineligible for insured financing);
3. be classified as real estate (but need not be treated as real estate for purposes of state taxation);
4. the mortgage must cover both the manufactured unit and its site and shall have a term of not more than 30 years from the date amortization begins;
5. built and remains on a permanent chassis;
6. designed to be used as a dwelling with a permanent foundation built to FHA criteria; and
7. the finished grade elevation beneath the manufactured home or, if a basement is used, the grade beneath the basement floor shall be at or above the 100-year return frequency flood elevation.

Condominium Project Approval

Under authority granted by enactment of HERA, individual manufactured housing units in condominium projects are now eligible for FHA insurance. Until updated guidance on the processing of condominium project approvals is published, manufactured housing condominium project approval is subject to the requirements of HUD Handbook 4150.1, Chapter 11. The Spot Loan Approval process as defined in Mortgagee Letter 1996-41 is not applicable. All manufactured housing project approval requests must be processed by the Homeownership Center that has geographical authority over the property to be insured.

Prospecting and Converting

2009-06-04T16:03:00.001-07:00

When all is said and done, sales boils down to two realities.
1. You must prospect.
2. You must convert.
Prospecting is initiating first contact with persons who can do business with you. Converting is working with an eligible prospect until they come to a place of agreement with you about your product or service.
Prospecting is 80% motivation and 20% ability, while converting is 20% motivation and 80% ability.
Prospecting is the primary predictor of sales success.
Are you going to carve out some time every day to initiate first contact with someone who can help you build your business? Your success in sales depends on it.
Prospecting requires raw resources such as motivation, energy, and movement. Converting utilizes refined resources such as skill, precision, and deftness of touch. In either activity, the foundation of success is proper insight and knowledge of the rules of engagement.
This week’s sells meeting I will focus on how to get to the kitchen table, which will incorporate ideas in prospecting, and then in future meetings, how to convert. I hope you'll join me for this week sells meeting.

Learn more about Local Ad Link

2009-06-04T16:00:00.000-07:00

The first sale is YOU

2009-06-04T15:56:00.000-07:00

The relational sale gives you an opportunity to make a friend. You're going to authentically affirm your prospect. You're going to display empathy. You're going to illustrate credibility.

This sale provides the foundation for the resultant conversation. This component gives you, the salesperson, and the customer, time to develop trust. It's the time for the salesperson to create an atmosphere of authentic concerned. This paves the way for deeper, probing questions that uncover the customer's true needs and interest.
The relational component consists of three critical elements: affirmation, empathy, and credibility.

Authentic affirmation is the opposite of a condescending comment. I'm asking you to authentically of affirm the prospect. You are an invited guest. Treat the invitation as a privilege.

Then give a compliment that can be as simple as “You gave me great directions. I didn't get lost. I struggle with this all the time and I want to thank you for your help.”

Or you can find something in their life, home, or neighborhood that you can compliment them on. “You keep your home so well. The yard just looks great. You must have a green thumb." Whatever it is, that allows you to say something that is truthful and encouraging, you want to take the opportunity to do so.

You want to practice the five rules of being a credible person: likability, composure, dynamism, competence, and reliability. Be honest and don't over qualify your firm or yourself. You sometimes might even say, “You know, there are several organizations or people that provide the same service that we provide. I want to work with you to tailor a strategy that addresses your specific situation and your needs."

The goal of the relational phase of the kitchen table conversation is to establish trust and then to find out what business you're in. (more on that later)

You want to learn about your prospects goals and objectives. You want to find out, ultimately, what is the transcendent objective. Is it peace of mind? Is it connecting with their family? Is it to see the world because they saw the world when they were just out of college and want to go back to some fabulous place to see how things have changed? You want to be able to work through all of these areas and find out what it is the customers really need.

Mortgage Fraud

2009-06-04T15:24:00.001-07:00

Did you know that in addition to your state penalties for violating regulations pertaining to fraud, actions constituting mortgage fraud can be criminally prosecuted at a federal level and result in fines up to $1,000,000.00 and/or 30 years in prison?

Loan Officers and Borrowers should take care to provide truthful information and be completely forthcoming.

Know what you're selling!

2009-06-04T15:17:00.000-07:00

When I first meet a new sales recruit I asked what business are you in? They always say the reverse mortgage business. To which I respond, you don't know until you meet the prospect. You're in, the problem solving business. You're in the planning business. You're in the pleasure business. You're in the strategic use business. You're a client advocate. You're in the solutions business. The product you're bringing to the table is simply a tool to get them where they want to go.

Don't get caught up in thinking that your business is to sell a reverse mortgage. Your business is to enhance the quality of somebody's life. The vehicle, which is your product or service, is not your business. That's just the mechanism. Moving beyond features and benefits is the first step toward owning your real business.

You need to connect the dream dots. Show them how your product or service can make their dream come true. You begin with the destination and work back to where you are today. Then, uncover the options that will deliver their ultimate dream. Help them imagine being there.

The word picture opportunity in sales is often overlooked. That's where you cement the cell: when you can help them visualize the fruit of finishing the transaction. The sizzle of finishing isn't finality, but the opportunity that finishing makes available. That's when Hope comes alive. That's when you have a true energized client.

We made it to the top of Google!

2009-06-04T15:13:00.000-07:00

The image below shows our site www.reversemortgage4u.com at the top of google!

We have been working hard to be at the top of google and anyone who knows the internet knows this is a big accomplishment!

Amazing new lead program

2009-06-04T15:10:00.000-07:00

If you know WSB you have probably heard us talk about our new "Courtney Miller" lead program. We are still having amazing success with this lead program! The average response is still up around 12% with an average of 7 mortgages being written!

We have never seen a direct mail lead campaign work this well, so now is the time to take advantage of it while we can! Nothing is ever guaranteed to stick around long in the mortgage industry so we all must "make hay while the sun shines"

If you would like to learn more about this program call Riley at WSB at 866-309-6626

Thank you
Riley

Remember

2009-06-04T15:05:00.001-07:00

Many agents in the Reverse Mortgage business are licensed to sell other financial products such as Life Insurance, Long Term Care Insurance, Annuities, Securities, and so on. Selling your client any other financial product with the proceeds of a Reverse Mortgage that you helped them secure is illegal! We have heard from clients that they have received calls from the DOJ yes the Department of Justice asking if they were solicited to buy an annuity. Insure that you don't get in trouble by not offering to do this.

If you have any questions please feel free to call us.

Laws Target Senior Market Abuse

2009-06-04T15:04:00.000-07:00

In Laws Take On Financial Scams Against Seniors, Jennifer Levitz writes that investigators from the Arkansas Securities Department last year staged an undercover sweep of one of what they call “hucksters” favorite showcases — free lunch seminars.

The investigations uncovered enoughshady practices and lead to legislators passing a law, effective July 1, that doubles the civil penalties for financial securities violations when the victim is 65 or older. Though the state securities department can’t bring criminal complaints, it can refer such cases to the attorney general’s office.

Similar legislation is expected to be proposed in Congress next month by Democratic Sens. Bob Casey of Pennsylvania and Herb Kohl of Wisconsin, chairman of the Senate Special Committee on Aging.

Do the right thing for your client and never be dishonest, the reverse mortgage is a great product for the right person in the right situation.

Fannie Mae Discontinues CMT Based Reverse Mortgages

2009-06-04T15:03:00.000-07:00

Fannie Mae announced that effective September 1, 2009, they will discontinue offering commitments to purchase CMT-indexed HECMs. The government sponsored entity will continue to offer commitments to purchase monthly adjustable rate LIBOR based HECMs and fixed rate HECMs.

According to the announcement, FNMA’s decision to discontinue CMT based reverse mortgages is intended to help standardize and simplify HECM product offerings, build liquidity for the product, and encourage a market shift toward securitization.

Most originators that I’ve spoken to are closing almost all LIBOR based products because the pricing is so much better. A quick look at today’s rate sheets show LIBOR based HECM’s are priced about .50% better in rate compared to CMT based products.

Lenders will be able to obtain pricing and commitments for CMT based HECMs in eCommitting until August 31, 2009.

New Blog

2009-06-04T15:02:00.000-07:00

New Blog