Pam Marron Home Lending

HIGH RECOMMENDATION for Attorney Chae DuPont with Morris and DuPont

May 22, 2013 by · 1 Comment 


For all real estate loss mitigation, #1 recommendation for “to the point” services!

HIGH RECOMMENDATION FOR ATTORNEY CHAE DUPONT! For the last 2 yrs, I have been advocating for short sellers, underwater homeowners and those who are going through really hard problems trying to get modifications.
Yesterday I was able to sit in on 4 meetings with clients who need modification/loss mitigation help with attorney Chae DuPont. These were the initial FREE appointments that Morris and DuPont offers clients. During all mtgs., I witnessed Chae look at paperwork, listen to incredible stories and give a recommendation of where to go, what to do, right there in the meeting. Often, Chae told homeowners how to do tasks if they desired to try themselves. A road to recovery was given during each of these 1 hour FREE consultations. Morris and DuPont Law firm is a well rounded real estate attorney service firm that looks at all aspects of real estate law: the challenge of getting through the problem and EVEN MORE IMPORTANT, how the homeowner lands when they come out of these horrific situations. I would recommend Morris and DuPont as the #1 law firm to get help with any real estate loss mitigation problems. Call Morris and DuPont at 305-444-3437.

Click on link to hear the Home Mortgage Law Show with Morris and DuPont every Saturday from 2-4pm on WFLA 970!


Problems Surrounding Underwater Homeowners and Short Sellers

April 13, 2013 by · Leave a Comment 

Click title to view document taken to Washington, D.C. on April 8-10th.

Problems Surrounding Underwater Homeowners and Short Sellers

For short-sellers, some good news, by Kenneth R. Harney, Washington Post

February 6, 2013 by · Leave a Comment 


Friday, Sept. 6, 2013

For short-sellers, some good news


WASHINGTON — Policy changes by two of the biggest players in the mortgage market could open doors to home purchases this fall by thousands of people who were hard hit by the housing bust and who thought they’d have to wait for years before owning again.

Fannie Mae, the federally controlled mortgage investor, has come up with a “fix” designed to help large numbers of consumers whose short sales were misidentified as foreclosures by the national credit bureaus. Under previous rules, short-sellers would have to wait for up to seven years before becoming eligible for a new mortgage to buy a house. Under the revised plan, they may be able to qualify for a mortgage in as little as two years. Homeowners who are foreclosed upon generally must still wait for up to seven years before becoming eligible again to finance a house through Fannie. Industry estimates suggest that more than 2 million short-sellers might be affected by credit bureaus’ inaccurate descriptions of their transactions.

Meanwhile, the Federal Housing Administration (FHA) has announced a new program allowing borrowers whose previous mortgage troubles were caused by “extenuating circumstances” beyond their control to obtain new mortgages in as little as a year after losing their homes instead of the current three years. They will need to show that their delinquency problem was caused by a 20 percent or greater drop in income that continued for at least six months, and that they are now “back to work,” paying their bills on time and earning enough to qualify for a new FHA-insured mortgage.

Fannie Mae’s policy change came after months of prodding by the federal Consumer Financial Protection Bureau, Sen. Bill Nelson, D-Fla., the National Consumer Reporting Association, the National Association of Realtors and Pam Marron, an outspoken Florida consumer advocate. They all sought fairer treatment of borrowers who had participated in short sales in recent years. Marron, a mortgage broker, spotted the erroneous reporting of short sales on credit reports and mounted a campaign to correct the problem.

In a short sale, the lender approves the sale of a house to a new buyer but typically receives less than the balance owed. In a foreclosure, the bank takes title to the property and seeks to recover whatever it can through a resale. Though the two types of transactions are distinct and involve significantly different losses for banks — foreclosures are far more costly on average — the nation’s major credit bureaus have no special reporting code to identify short sales. As a result, say critics, millions of people who have undertaken short sales in recent years may have their transactions coded as foreclosures on their credit bureau reports.

That matters — a lot — because Fannie Mae and other major financing sources have mandated different waiting periods for new loans to borrowers who have completed short sales compared with borrowers who were foreclosed upon — in this case, two years versus seven. Under the new policy, which takes effect Nov. 16, short-sellers who find that their transactions were miscoded on their credit reports, and are able to put 20 percent down, should alert their loan officers and provide documentation on their transaction. The loan officer should advise Fannie Mae about the credit report coding error. Fannie will then run the loan application through its revised automated underwriting system.

Freddie Mac, the other government-administered mortgage investor, continues to require a four-year waiting period for short-sellers who cannot demonstrate “extenuating circumstances” as having caused their problems. If they can do so — documenting income reductions beyond their control that wrecked their credit — they may be able to qualify for a new Freddie Mac loan in two years.

FHA’s policy change may prove to be an even more generous deal for some previous homeowners. Like Freddie Mac, FHA wants to see hard evidence of what economic events beyond the borrowers’ control — loss of a job, serious illness, or death of a wage earner, for example — led to the delinquency or loss of the house. Applicants must be able to show 12 months of solid credit behavior, participate in a housing counseling program and get through the agency’s underwriting hoops. But unlike either Fannie or Freddie, if you qualify under FHA’s revised rules, which are now in effect, and your lender approves, you might be able to buy a house with a new, low-down-payment mortgage in as little as a year.

It’s worth checking out.

Ken Harney’s email address is

(c) 2013, Washington Post Writers Group

Coming Out of a Tunnel

August 23, 2012 by · Leave a Comment 

Just received the press release from Senator Nelson’s office stating that Fannie Mae will be making a fix to their computer system to correct the erroneous foreclosure code that has resulted in a new mortgage denial for eligible past short sellers. Also read the new Fannie Mae release that will show a simple input after proof of the short sale is received, before the loan is run through Fannie Mae. It is a brilliant way to correct the problem, and allows past short sellers the ability to prove the short sale to their lender prior to running the Fannie Mae underwriting engine!

To say I am the greatest cheerleader of the Consumer Financial Protection Bureau, Senator Bill Nelson, and Fannie Mae is an understatement. This fix will make a difference for millions of past short sellers and millions more that will come after them.

There have been so many that have been along this path, and since this is my website, I am going to publicly thank them all.

To Brian Webster at the Consumer Financial Protection Bureau, who organized all of the parties working on this to come to a brilliant solution, and kept all in check to insure this was a real fix… and to Corey Stone and Richard Cordray, who showed genuine concern about the impact of this problem on consumers.

 To Senator Bill Nelson, who was impassioned about this little known code problem and took it directly to the Senate Committee on May 7th with a challenge to get it fixed in 90 days! Your tenacity to get to the bottom of this was heroic, and your staff, Counsel Stephanie Mickle and Regional Director Shahra Anderson, have been invaluable in quickly getting this handled!

Shahra Anderson…. you are an incredible regional director for Senator Nelson… if it wasn’t for you, data needed and getting the white paper to President Obama’s staff last year would not have happened.

Terry Clemens, Executive director of… the best “mentor” one could ever have … who showed me how to get to the right people from the start as we visited representatives, the CFPB, the U.S. Treasury, and then saw many great places in Washington, D.C. YOU are truly the reason this got this far. I would not have known where to start. I am eternally grateful for all that you have done.

Renee Erickson, Acranet Credit Mgr.…. the most tenacious credit fixer I have ever met! You were that at the start, and you are still helping to get this done at the end! You “got it” from the beginning and introduced me to so many, including your whole National Consumer Reporting Association group!

To my son, Jake, who patiently spent days making the Power Points for, debating with me hours on end so we could make problems into 8 quick videos…. problems too complicated but had to be shown in 90 seconds. I learned how to communicate quicker (and that’s a problem for me!:) by our lively discussion and enjoyed our time!

To Marilynn Dechant, DeChant Public Relations… who proofed my overly detailed writings into press releases and introduced me to so many folks we have engaged with for help, and who has kept me on a positive keel even when it didn’t feel that way.

To Chae DuPont, the best attorney that I know, who helped me to see sides of this problem I could not. Showed me how to qualify people for a modification and a short sale, to know it was approvable at the beginning… PRICELESS.

To Joe Gendelman, Regional Director at National Credit Federation… who patiently found the first solution of an attorney letter requesting a credit downgrade if the loan was not a foreclosure. Joe helped our first two clients two years ago and continues to help folks today.

To Christie Johnson, a realtor with Remax Advantage, who agreed to help with short sellers who want to short sale and stay current, and who just closed the first clients who did so. Christie, we are learning a new path, and I can’t thank you enough for your patience with this. You introduced me to our friends at, a great title company who has also agreed to help us make this new path for short sellers.

To all of my realtor friends and others who have put up with my incessant obsession with this problem. There is an end to this tunnel and I am coming out.

To my wonderful boss, John Kulwicki… who has not questioned when I needed to get a new vendor approved, and just did what was needed so I could keep looking for answers…. Thank You.

To my incredibly patient husband, both of my sons, and my parents…. Thank you for listening even when you did not want to.:)

And most of all… to the many, many past short sellers, and those needing to short sale but terrified of what required late mortgage payments would do to your credit and not wanting to go late in the first place… thank you for sharing your REAL stories with me. Every time a new case was looked at, another problem to be aware of came up.  Allowing that snapshot, and sharing the painful past that so many of you went through and sometimes had to go through again because we needed the information…. I know is the hardest…. Thank You.

Lack of Short Sale Code in Credit Reporting System Creating Hardship for Many Consumers

February 11, 2012 by · Leave a Comment 


Mon, 2013-03-11 15:13 — Terry W. Clemans

The system used by the American credit reporting industry to report the history of consumer payments to creditors to the national credit repositories has a serious flaw, according to some members of the mortgage industry. This flaw is the lack of a specific code for short sale mortgage transactions. With the current mortgage climate of millions of short sale consumers needing properly documented accounts of their previous mortgage problem so they can re-enter the housing market, this problem is reaching epidemic proportions in some of the hardest hit regions of the country. There is speculation that this flaw could be holding back the recovery of the housing market, as many short sellers are prohibited from re-entering the housing market for a longer period of time than required by lenders.

Metro2 is the coding format used by the national credit repositories and the creditors to set the operating procedures for the data in the credit reporting system. It was created by the Consumer Data Industry Association (CDIA), a trade association dominated by the three credit repositories: TransUnion, Experian and Equifax. Anyone working with credit reports much will quickly identify most of the Metro2 codes. In looking at a tradeline for a consumers payment history shown as an “R-1” for example; the “R” stands for Revolving Accounts like credit cards, “I” for Installment, etc., and the number portion representing the last payment status. As in the “R-1” example, the “1” represents the account being paid as agreed, a “2” represents paid 30 days late and higher numbers steadily indicate later payments on up to the dreaded “9” rating, which indicates the account is in collection. While this is just a portion of the many codes in the system designed to handle all of the various scenarios possible in every aspect of lending covered by the American credit reporting system, as of today there is no specific code for a mortgage transaction via short sale.

Short sales are difficult to deal with due to the complexity of the transaction, and are reported with a foreclosure status. Historically this worked, as a short sale transaction was traditionally in conjunction with foreclosure activities. In today’s mortgage marketplace, especially in light of the Federal Housing Finance Agency’s (FHFA—the government agency regulating Fannie Mae and Freddie Mac) short sale policy statement of Nov. 1, 2012, that allows homeowners to short sale without ever being late on their mortgage, the old system of reporting short sales needs updating. Some in the industry believe this is a problem and are working on it; others seem to believe that the status quo is the best route and reporting short sales with a tie to a foreclosure is accurate. Considering the mortgage crisis we are struggling to overcome, and the numbers of consumers who were put into extraordinary circumstances, I believe that the system needs to be carefully reviewed and altered as many consumers who short sell today are much better credit risks that the pre housing crisis foreclosure consumers. It seems that others in the industry have similar beliefs.

In a May 2011 report by Steven Chaouki, a group vice president at TransUnion, titled “Life After Foreclosure and Hidden Opportunities,” he presents a hypothesis that would indicate:

1. Defaulting on a mortgage causes temporary excess liquidity. This excess liquidity masks the true risk of the consumer as he goes through the foreclosure process, and

2. Certain consumers who defaulted on a mortgage in the recent recession only did so because of the recession—they are otherwise good credit risks.

Another person who is very critical of the current system is Pam Marron of Bankers Mortgage who has spent the past 24 years originating mortgages in the Tampa, Fla. market. This is one of the regions devastated by the housing crisis and she sees this issue as “one of the greatest problems facing the housing market in its struggle to rebound.” In working with Tampa area homeowners who have been plagued with this reporting problem over the past couple years she has documented two major problems for homeowners:

1. With no short sale specific code the reporting of a foreclosure status results in a denial of a mortgage in both Fannie Mae and Freddie Mac automated underwriting systems. This stalls past short sellers from re-entering the housing market, even after the required timeframes for reentry after the short sale have passed.

2. Many lenders are still telling underwater homeowners that they must be delinquent on the mortgage to get short sale approval, contrary to the new FHFA short sale policy. This enables the continuation of the current system of reporting short sales as a foreclosure.

Since over the past couple years Pam has had to deal with more short sales in the Tampa market than mortgage originators in most other parts of the country, she has identified two solutions to the problem. One a quick term band aide type approach to help consumers right now, then the long term fix that may require government assistance to ultimately provide the correction needed on a systemwide basis.

The quick fix is to get the short sale lender to provide a letter at closing to the underwater homeowner that simply states “this mortgage closed as a short sale, not as a foreclosure. Any credit markings reflective of a foreclosure should be deleted.” This letter can be used by the mortgage credit reporting agency to correct the repository data to more accurately reflect the short sale status.

The long term fix, and the one that brings much greater challenges, is the creation of a specific short sale code added the Metro2 system so that this manual step is no longer needed. This would allow the lenders to properly track the short sellers in the automated underwriting systems. It would also set up the proper tracking to determine if the short sellers created from the housing crisis are a different credit risk than traditional foreclosures so that this category of transactions can be properly evaluated for their true credit risks. That will require system changes, analysis and those take time when talking about systems as large as those that operate the United States credit reporting industry.

One closing thought that has been provided by many mortgage originators recently on how to help the mortgage market improve, for lenders that do not follow the FHFA Short Sale policy effective Nov. 1, 2012 be held accountable for their disregard of the policy. They report to many consumers still being told that they must be delinquent on their loan to short sale. With the CFPB and Congress looking at the credit reporting industry and the mortgage market closely, it’s possible that the forces to create these changes are in place and help may soon be on the way for the estimated 16 million still underwater American homeowners.

Terry W. Clemans is executive director of the National Consumer Reporting Association (NCRA). He may be reached at (630) 539-1525 or e-mail

Link to article at National Mortgage Professional Magazine:

Making Sure Your Cash-To-Close Comes From The Proper Source

March 28, 2010 by · Leave a Comment 

Providing proper asset documentation and the actual source of the funds is a critical element of the loan closing process.

There’s nothing worse in a real estate purchase than making it all the way through the hoops and hurdles just to have a loan denied after the final documents have been signed due to the borrower using the wrong checking account for the down payment.

Seasoning of the down payment money is just as important as the source, which is why underwriters typically require at least two months bank / asset statements in the initial mortgage approval process.

A Few Acceptable Sources Of Down Payment Include:

  • Bank Accounts – checking / savings
  • Investment Accounts – money market, mutual funds
  • Retirement Funds – keep in mind that borrowing against a 401K plan will require a repayment, which will be calculated in the Debt-to-Income Ratio
  • Life Insurance – Cash value and face amount
  • Gifts – Family members can gift down payment funds with certain restrictions
  • Inheritance / Trust Funds
  • Government Grants – Many state, county and city agencies offer special down payment assistance programs

It is extremely important to make sure your loan officer is aware of the exact source of your down payment as early in the process as possible so that all necessary questions, documentation and explanations can be reviewed / approved by an underwriter.

A good rule-of-thumb to remember is that whatever funds you’re using as a down payment have to be pre-approved by an underwriter at the beginning of the mortgage approval process.

Basically, if you accidentally forget to deposit money in your checking account on the way to the closing appointment, it is not acceptable to get a cashier’s check from a friend’s account until you have a chance to pay them back later.


Frequently Asked Questions:

Q:  What if I don’t have a bank account and cannot properly source my funds to close?

Cash on hand is an acceptable source of funds for some loan programs, but make sure you bring that detail up at the application stage

Q:  Can I use a bonus from my employer for my down payment?

Yes, but generally this needs to be a bonus you regularly receive

Q:  Can I borrow the money from a friend?

No, any money that needs to be repaid is typically an unacceptable source of funds


Related Articles – Closing Process / Costs

Talk the Talk – Know the Mortgage Lingo at Closing

March 28, 2010 by · Leave a Comment 

What the heck are they talking about?

Many borrowers go through the closing process in a haze, nodding, smiling, and signing through a bunch of noise that sounds like Greek.

Even though you may have put your trust in your real estate and mortgage team, it helps to understand some of the terminology so that you can pay attention to specific details that may impact the decisions you need to make.

Common Closing Terms / Processes:

1. Docs Sent

Buyers sit on pins and needles through the approval process, waiting to find out if they meet the lender’s qualification requirements (which include items such as total expense to income, maximum loan amounts, loan-to-value ratios, credit, etc).

The term “docs sent” generally means you made it!! The lender’s closing department has sent the approved loan paperwork to the closing agent, which is usually an attorney or title company.

Keep in mind that there may be some prior to funding conditions the underwriter will need to verify before the deal can be considered fully approved.

2. Docs Signed –

Just what it implies.  All documentation is signed, including the paperwork between the borrower and the lender which details the terms of the loan, and the contracts between the seller and buyer of the property.

This usually occurs at closing in the presence of the closing agent, bank representative, buyer and seller.

3. Funded –

Show me some money!

The actual funds are transferred from the lender to the closing agent, along with all applicable disclosures.

For a home purchase, if the closing occurs in the morning, the funds are generally sent the same day. If the closing occurs in the afternoon, the funds are usually transferred the next day.

The timing is different for refinancing transactions due to the right of rescission. This is the right (given automatically by law to the borrower) to back out of the transaction within three days of signing the loan documents. As a result, funds are not transferred until after the rescission period in a refinancing transaction, and are generally received on the fourth day after the paperwork is signed.

(Note – Saturdays are counted in the three day period, while Sundays are not). The right of rescission only applies to a property the borrower will live in, not investment properties.

4. Recorded –

Let’s make it official. The recording of the deed transfers title (legal ownership) of the property to the buyer. The title company or the attorney records the transaction in the county register where the property is located, usually immediately after closing.


There you have it – an official translation of closing lingo.

As with any other important financial transaction, there are many steps, some of which are dictated by law, which must be followed.


Related Articles – Closing Process / Costs

« Previous Page