The idea behind this moratorium on foreclosures is that it should give these service members the breathing room they need to reestablish themselves. The housing industry wants to make sure that those that can get back on their feet do, and that those that have not prevented it, inevitably still end up in the foreclosure. Some lawmakers believe this will also give the housing recovery some time to straighten itself out on its own.

There have been a record number of foreclosures the past few years. In 2009 around 2.8 million homes faced foreclosures, with a similar number following in 2010. Foreclosures among veterans do not have a specific disclosed number, but it is rather high according to a few sources. Of course, if lenders would consider reducing their principle balances the country may see less foreclosures in general. Unfortunately the lenders have not done so yet. There are a few other solutions to try. Some lenders will agree on a repayment plan or “forbearance”. This is when the loan is suspended while the borrower accumulates sufficient fees or time to sell the property. They may also be able to obtain a loan modification, where the delinquency is added to the loan and a new payment plan is established. The VA also provides certain safeguards for a VA home loan. First, the VA prevents the lender from discriminating against the borrower in any way and can suspend the loan if any such discrimination is discovered. Second, the VA regulates the amount of closing costs that can be charged to the borrower. Third, the VA prevents any prepayment penalty. All three of these safeguards prevent against foreclosure or seizure.

This current suspension of foreclosure for veterans applies only to those loans that are backed by Freddie Mac. During the member’s active duty service there will be a six percent interest rate cap. This will also apply for up to a year after they are released from duty. This is just an additional benefit to help veterans out during this time.

Fannie Mae recently initiated a program to help prevent foreclosures as well. This one is for members who are injured or for the families of a member killed during active duty.  Fannie Mae presented a new forbearance plan, where service members can have their payments “reduced or simply eliminated” for up to six months.

Both of these government enterprises are striving to help veterans and service members. The executive vice president of Single Family Portfolio Management at Freddie Mac said, “Our military makes sacrifices every day to protect our homes and families. This small act will protect financially trouble service members when they return from active duty by giving them more time to work with their lender to stay in their home.” They are hoping to prevent foreclosures, but as stated before, this is for those willing to do their part also. The struggling service members will receive the nine months in order to get their payments on time and the mortgage stable, and if they do not use that time wisely, they will still be headed for foreclosure.

As always, any service member who is having difficulty making their payments should contact their mortgage provider as soon as possible to try and find a solution that will work the best for them. The Department of Veterans Affairs offers help and counseling to those who need it as well. Financial counselors can also work directly with lenders to set up repayment plans, loan modifications, and etc. Service Members do not have to have a VA loan to use these resources at the VA, but this does limit what they can do for those without a VA loan.

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Last year in a press release dated 1-28-09 (Mortgage Industry Faces Huge Bottleneck), LowVARates tried to educate and explain to all military and veteran home owners and buyers that the amount of time needed to process, underwrite and approve VA loans would be substantially longer than normal.

Due to recent drops in VA mortgage rates that have hit historically low levels, the mortgage industry is now facing similar issues to those in early 2009.  One approved VA lender, Flagship Financial Group branch 403 has said the following recently, “In the last 2 weeks we have seen our big lenders like Wells Fargo, Freedom Mortgage and Met Life all drastically slow down in the amount of time it is taking them to get our VA loans approved.”  It is tough because the home owner normally does not normally want to hear excuses and just wants the loan to get done quickly!”  “In all honesty our hands are tied.” said Nate Burt, Loan Officer.

All Veterans and military home owners should understand that patience is needed at times like this.  We looked into the published VA underwriting turn times from some lenders and they have almost tripled from where they were just a month ago.  It is important that loan officers educate and communicate with their clients so as to make sure everyone’s expectations and set correctly.

The number one reason to consider purchasing home security is personal safety. If someone is going to break into your house, they are not going to be concerned whatsoever with the wellbeing of anyone in your house. Protect yourself and the people in your home by installing an alarm system to deter anyone trying to break in or attack anyone in your home.

Along the same lines as personal safety, is the safety of your property. Thieves may break in at any time. They may take things of obvious value, such as a TV or jewelry, but also things you may not realize were valuable. Having a security system is going to save you money in this case.

Did you know that having a home security system will also increase the resale value of your home? It is one of the top things that people look for when looking to purchase a home. Adding financial value to your home is a great bonus!

Another way a security system can actually help you save money is that it can lower your insurance! In some cases just having the monitoring device, has been known to lower a monthly payment up to 20 percent. If your home has already been broken into, insurance companies suggest that installing a security system will help lower your rates.

A break in is going to take more than just valuable items. It is going to take away the feeling of safety in your home as well. Giving you peace of mind is one of the main reasons to get an alarm system installed in your home. Knowing that you and your family will be safe at night, and during the day will bring you a great comfort. Even knowing your possessions will be safe while you are away from your home should make you feel safe.

Now it is up to you to decide which kind of security system is right for you. There are many kinds. They vary from a basic alarm that usually include, sensors on the doors and windows, an outdoor lighting motion sensor, and a link to a monitoring service, to the more high tech systems. Some systems include fire detection as well. Many of these can be researched online or you can call a local company. It is important to research based on where your live, what kind of home you have, and what you can afford. Now that you have seen all of the benefits, don’t waste anymore time, and get a security system today!

If you are a veteran home owner we invite you to visit Protect Our Troops, a military charity that is attempting to bring free security alarms to Troops and their families across the nation.

The new Good Faith Estimate that arrives in 2010 is a way to allow you as the consumer to see exactly what your settlement charges are and will be. It provides much greater transparency to the consumer. The problem with the new GFE is that it advocates shopping for the lowest cost loan, which we all know doesn’t always come with the best available service. I believe this new good faith is going to lead to a lot of heartache for borrowers interested only in pricing. Having an educated, experienced loan officer that can discuss your goals and objectives for the given loan is a critical component of loan shopping. Here at Flagship Financial you will get great customer service along with very competitive pricing. Nobody has spent more time and energy becoming nimble to the changes in this marketplace than Flagship Financial.  I anticipate that we will continue to adapt and show resilience in this ever changing market. If you look at our track record it is quite compelling when you see the number of Veterans and FHA homeowners we’ve helped thru the years. The one area of the GFE that makes complete sense to me is the tradeoff table. Using the table will allow a borrower to see exactly what the tradeoff is between lower interest rates and lower costs. However it doesn’t compare the overall savings associated with these changes. The new GFE is longer (3 pages) and will provide more disclosure and seems easier for the consumer to identify what settlement charges will be at closing. It will require a further inquiry as pertaining to qualifying before quoting an interest rate. There will be no more GFE shopping taking place among competitors until a thorough investigation has been done to determine eligibility. The consumer will have to realize before receiving a quote from a broker or lender he/she may be asked to provide authorization to pull credit prior to receiving this new GFE. Initial quoting of interest rates will be given in a range, understanding that there are number of factors that determine pricing.

I alluded to being a fool at the beginning if one should choose to be a Loan Officer.  I have found out the if you have a niche market and a good business model you can be successful.  Being a mortgage broker has its benefits over working for a lender.  Look at Countrywide, Taylor Bean & Whitaker, etc.  They serviced mortgage loans and they are out of business.  Being a mortgage broker you don’t service your own loans and you are set up with multiple lenders which makes brokering loans more flexible and adaptable to an ever changing market.

Here are my own top 5 reasons to choose a Mortgage Broker as a career:

1.  Job Security – You are not a liability to the company (salaried employee).  If you don’t close loans then you don’t make money and you end up by costing the company nothing.  No one goes to work and says, “I’m not going to make any money today” which is the entire reason we work, so work hard.

2.  Schedule – You can make your own schedule.  Its up to you.  If you take more time off you make less money due to a lack of prospects.  The difference is you are in control, not your boss.

3.  Satisfaction of doing good – Seriously, its great to help Veterans and other families obtain a home.  Its much better than paying rent and its something they can call their own.  Knowing you played a very important part of that gives a certain sense of purpose and satisfaction.

4.  Money opportunity – Once again this is not like a salaried job where no matter how many hours you put in and how hard you work you end up by making the same.  Actually in a salaried position the longer hours you work the less you are actually making per hour.  Being a Loan Officer the harder I work the more opportunity there is to make money.  There is no ceiling, no cap on how much you can make.

5.  Industry Knowledge – Having a full understanding of how mortgages work can actually save you a lot of mortgage interest money.  If you understand how interest works, escrow and your loan program on your own home loan then you can apply the principles you learn and probably tell others to your own loan.

I have recently read on other blogs that mortgage brokers contributed to this house mess and that we have no place in the industry.  I will admit that there were probably many brokers who engaged in predatory lending, but to say that all mortgage brokers caused this would be ignorant.  As a Veteran prospective home owner please do some due diligence to avoid less than reputable brokers.  I owe a lot to this industry and Veterans.  My company specializes in VA home loans and this is our niche market which has been able to keep us busy and in business through all the difficult and uncertain times.

In summary – I would not have changed my career path what so ever.  The last 7 years have been very rewarding.

In April of 2009 the Treasury Department officially launched their effort to help distressed families keep their home and avoid foreclosure. They recruited several loan servicers (JP Morgan Chase, Wells Fargo, Citigroup etc.) and offered $75,000,000,000 to the banks to pass along to homeowners in need.   Click here to read the article from Cnn.

In theory, the program was designed for distressed homeowners to contact lender’s modification counselors and build their case for loan modification. Banks were instructed to offer modification resources on loans where the cost of foreclosure would be higher than the cost of modification.

For families that qualify:

• Interest rates can be lowered by the banks to bring the borrower’s monthly mortgage payment to no more than 38% of their pre-tax income.

• Loan amounts can be reduced by banks to bring the monthly mortgage payment down to the 38% of pre-tax income

• Additionally, the federal government would offer resources to lower the borrower’s interest rate to bring the payment down to 31% of pre-tax income

• $1000 per year is given to families that keep current with their modification program

In theory this program is a fantastic solution for families in trouble.

In practice, the program doesn’t seem to be working. Where I work the phone rings all day long with veteran families looking to take advantage of lowering their interest rate. Every day that passes the number of families that have fallen behind or will fall behind on their mortgage payment increases. Nearly 90% of the families we speak to are struggling to make their payment. We ask these families if they have spoke to their current lender in regards to a loan modification.

Most of the families I have spoken with have had the modification conversation with their lender but few have succeeded, if any. They hear banker’s excuses such as, “We can only talk to you if you are more than 60 days late on your mortgage payment (a lot of good that does-isn’t this program supposed to keep people from being late on their payment).” Or, “Send in your paperwork to a phoneless team who will review your file within six months and we will decide if you qualify.” Or, the lenders make the process to apply so complex and drawn out that families give up in desperation while drowning in a sea of red tape. Or noone answers the loan modification phone at all. http://www.cnn.com/2009/LIVING/04/15/foreclosure.phones/

Shouldn’t the first question that is answered be, “Will the cost of the foreclosure outweigh the cost of the modification?” Can’t it be that simple? Can’t there be a two week process, with a clear application and definition of items needed to be included with the application? Why are banks making it so difficult? This is the question noone can seem to answer or influence.

At the end of the day families that really need modifications are not getting the help they need while Wall Street Bankers are padding their profits with government subsidies.

LowVARates.com
Lehi, UT –

LowVARates.com announces its plans to exhibit at the Soldier Equipment & Technology Expo & Conference to be held at the Crown Expo in Fayetteville, North Carolina, from November 17-18. Soldier Equipment & Technology Expo & Conference is the most extensive dedicated soldier equipment product exhibition of the year. The products and services displayed at this event are essential to providing the mission-specific equipment required to meet current and future threats.

For the past 20 years LowVARates.com has been dedicated to serving veteran homeowners. We specialize in providing VA loans to qualified veterans for mortgage purchases and refinances. These loans provide lower interest rates and monthly payments than other traditional loans. VA loans are currently the only program left that allows no-money-down loans providing a secure mortgage option guaranteed by the Federal Government. Our professional staff and loan officers will assist you to lock in low interest rates and take advantage of the unique opportunity provided through VA loans.

“We are delighted that LowVARates.com is joining us for the most extensive product exhibition focused on the needs of Special Operations and the Fort Bragg community, at IDGA Exhibitions’ Soldier Equipment & Technology Expo & Conference,” says Michael Gallo, Managing Director of IDGA Exhibitions. “LowVARates.com provides piece of mind to our war fighters through issuing specialized VA mortgages. We look forward to helping them further connect the LowVARates.com brand to the community.”

Press Contact: Craig Walton

email: craig.walton@lowvarates.com

About IDGA

The Institute for Defense & Government Advancement (IDGA) is a non-partisan information based organization dedicated to the promotion of innovative ideas in public service and defense. IDGA brings together speaker faculties comprised of military, government, vendors and academia while attracting delegates with decision-making power from military, government and defense industries. For more information, please visit http://www.idga.org.

Press Contact: Alison Sperling

email: alison.sperling@idga.org

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I would like to offer some advice and history as to what rates have done in the past few years and hopefully with this information you can make and educated decision about what to do for your family and situation.

Not since May of this year have we seen available 4.5% 30 yr fixed available for VA refinancing.  That being said, it was on the rate sheets last Friday the 10th of September.  Because of the volatility of the market it isn’t available today- that is how quickly the markets turn and rates move.  I have seen rates repost differently 4 times in the same day.  What does it all mean?  It means, if you have a VA loan right now, then it is time to refinance if you haven’t already- if it makes sense.  Anytime your refinance there are costs- prepaid taxes and insurance, title insurance, the payoff to your current mortgage company and that is fine- so long as the overall savings outweigh the costs involved.

Last year in October 2008 and 2007 rates were great and during the early fall.  They tend to move up towards the end of the year but you can expect 4.75% to be available for refinances in October 2009, so long as the market remains steady and nothing out of the ordinary happens.  Do not delay the process though if you are considering a VA refinance for October.  It is time now to get your paperwork into processing because with the low rates there will be a backlog of many people trying to get in for a refinance in October.  So plan ahead and get moving on it now.  Finally, that really is the trouble with rates today, is no one can explain why they do what they do, and with America in a really difficult financial position right now the markets are just plain crazy.

Traditionally, the standard for guaranteeing mortgages under the VA streamline Refinance program or IRRRL (Interest Rate Reduction Refinance Loan) did not require borrowers to have a particular credit score in order to qualify.   Rather, of chief concern was a veteran’s clean mortgage history, i.e. no late mortgage payments to suggest potential loan default.  Taylor, Bean & Whitaker (TBW) was one of the last banks to offer these “no minimum credit score” VA streamlines.  It’s important to note here the distinction between the VA’s standard for guaranteeing a mortgage, and a banks standard for underwriting it.   Contrary to popular belief, the VA is not, in fact, a lender.  The VA acts as a guaranteeing agent to a lender who agrees to finance the mortgage.  The standards by which the VA will guarantee the loan do not necessarily have to parallel the guidelines by which a lender agrees to finance it.   Loans guaranteed by the VA are not guaranteed to 100% of the loan amount.  In a more stable housing market, with a less severe degree of loan default and foreclosure, lenders have been willing to accept the risks associated with loan guidelines based off VA loan guarantee guidelines.  The times have changed however, and now the risk exposure associated with approving a loan without considering a borrower’s credit score, an appraisal of the property, or verifying financial stability are becoming too great for a bank to take.

TBW had created a name for itself by bucking the trend and displaying a willingness to lend to financially distressed veterans.  The logic seemed to be centered around the reasoning that the volume of good loans funded would far outweigh those that would end up defaulting.   Most veterans, they thought, wanted to stay in their homes and would eventually be able to return to good standing even if they had encountered some temporary financial setbacks.  Since they were the only game in town for low credit veterans, they had the market relatively cornered.  TBW’s departure from the lending world means there are fewer alternatives for distressed borrowers.  Fewer alternatives for distressed borrowers mean there is less competitive pressure on those lenders offering similar loan products and rates, which should be a call to action to any veterans with blemished credit still sitting on the fence.

This “competitive pressure” issue, extends beyond loan guidelines and influences interest rates as well.  For example, TBW was one of the first lenders to offer competitive rates on VA Hybrid Adjustable Rate Mortgages.  Because they had a larger pool of lending dollars to draw from, they were able to offer the best available rates on these loans.  Veterans by the thousands were calling in to take advantage of these rates.  This put pressure on other lenders to lower their rates on VA Adjustable Rate mortgages, lest they concede all of these loans to TBW.  With TBW out of the marketplace, the pressure on the competition has decreased, which gives the lenders still standing the ability to scale back their risk.

While this may sound unfair to veterans, this phenomena represents the essence of capitalism.  Many veterans believe that the Federal Reserve alone controls interest rates.  For the most part, the Fed only indirectly influences mortgage rates by regulating the rates at which banks lend to one another.   In doing so, the Fed mitigates the cost of financing for a bank, which reduces a banks margins and frees them up to lower their interest rates without a commensurate hit to their bottom lines.  However it is the field of competition among other banks that (along with the perceived value of the underlying real estate investment) have the most influence on where rates are going- supply and demand at its finest.  TBW represented the 5^thlargest government (FHA & VA loans) lender in the country and, recently, the largest purveyor of government ARMs as well.  With their departure from the market, the total available lending dollars in the country available to veterans has shrunk.  Since the number of veterans that need to refinance don’t go away simply because TBW went out of business, there is now an artificial “increase” in demand for VA loans even though there is now a “decrease” in the lending supply.  Higher demand and smaller supply means that lenders can be much more discriminating about their lending dollars and much more particular about their loan guidelines.

The bottom line:  The writing is on the wall with regard to interest rates.  Federal Reserve Chairman Ben Bernanke released a statement last week in Wyoming, stating that he believed the economy’s downward spiral has leveled off, and that recovery, while distant, has already begun.  TBW’s departure represents a call to action for those veterans still waiting to time the market.  While it is unlikely rates will return to the levels we saw in Feb/Mar of this year, they are still low enough to help stabilize the monthly expenses of most veterans.  The question veterans should ask themselves shouldn’t be simply, “Are rates low enough for me to consider refinancing?”  I would argue that they should also be asking “Is a VA loan the best/only financing option available to me, and if so, how long will they stay that way?”