Pam Marron Home Lending

Tampa Bay Homeownership Fair March 3rd!

February 5, 2018 by · Leave a Comment 

 

Tampa Bay Homeownership Fair Sat., March 3 from 10-2pm at Crowne Plaza-Tampa Westshore

Learn about Down Payment Assistance programs. Understand your credit score and credit report. Work with HUD approved housing counselors and credit counselors to get credit issues fixed to enable future homeownership. Housing counseling is most often at no cost or on sliding scale basis. Discover homes for purchase across Tampa Bay. Connect with homeownership counselors, lenders, real estate agents and more. Register here.

Homeownership flyer rev. SPANISH - Homeownership Fair Flyer - 2.4.2018

Remembering CFPB’s Laurie Maggiano

January 9, 2018 by · Leave a Comment 

We lost a wonderful, powerhouse of a woman who has served at the U.S. Treasury and the CFPB. “Laurie has worked to make sure that policies translate into actions that help homeowners, while laying the foundation for sustainable change on how delinquent loans are managed. She is a tireless champion for homeowners across our country.” We will miss you, Laurie…

Remembering CFPB’s Laurie Maggiano

Laurie Maggiano

Laurie Anne Maggiano, Servicing and Secondary Markets Program Manager at the Consumer Financial Protection Bureau (CFPB) has passed away. She is survived by her children and grandchildren.

“Laurie dedicated her life to the service of both consumers and lenders in the residential mortgage market. Her expertise and passion had a profound impact on our industry and our ability to meet the challenges posed by the worse financial crisis in generations. Most importantly it was her desire to find reasonable balance among the various interests that was so beneficial, particularly in her role at CFPB. However, it is Laurie’s endearing smile and friendship I will miss the most,” said Ray Barbone EVP of Mortgage Services at BankUnited.

Laurie had served at the CFPB for more than four years and is a nationally recognized authority on default management and foreclosure prevention. She was previously Director of Policy, Office of Homeownership Preservation at the U.S. Department of the Treasury and Acting Director of Single Family Asset Management at the U.S. Department of Housing and Urban Development. Laurie was one of the original architects of the administration’s mortgage relief and foreclosure prevention programs.

“I am deeply saddened by the news of Laurie’s passing,” said Five Star Institute President & CEO Ed Delgado. “She was a gifted and talented professional, dedicated to public service. But more importantly she was a loving mother and grandmother. I am proud that we shared a special friendship. She will be missed.”

Caroline Reaves, CEO at MCS also offered prayers for Laurie’s loved ones, saying, “Although Laurie is well-known for her tireless dedication to our industry, I had the privilege of knowing her as an amazing friend who shared many personal moments with my family. We shared many hours of laughter as well as tears. I will miss her terribly.”

In 2011 The Five Star Institute honored Laurie with their Lifetime Achievement Award. To mark the occasion, her colleague Phyllis Caldwell, then Chief of the Homeownership Preservation Office at the U.S. Department of the Treasury, said of Maggiano:”Laurie has worked to make sure that policies translate into actions that help homeowners, while laying the foundation for sustainable change on how delinquent loans are managed. She is a tireless champion for homeowners across our country.”

To view Laurie’s Lifetime Achievement video, click here.

Better Details Needed for FHA Back to Work, Conv “Extenuating Circumstances”

May 6, 2015 by · Leave a Comment 

Better Details Needed for FHA Back to Work Program and Conventional “Extenuating Circumstances”

 

By Pam Marron

For past short sellers who have gone through the loss of a home and are eligible to return, criteria needed for a new mortgage is vague. The result is a partial story.

Proving “extenuating circumstances” and confining the timeline for an economic event is a struggle for loan originators and underwriters trying to comply with vague criteria. Because of so many variables, lenders deny new loans for borrowers with a short sale or foreclosure in their past even when they may be eligible to repurchase again.

We HAVE to get this right. Detailing WHY the loss of a home is the hardest thing for affected consumers to provide… not because they can’t remember, but because they relive it.

In attempting to originate the FHA “Back to Work” loans, it would seem the process is simple. The criteria for “Back to Work” is to show a 20% reduction in income sustained for 6 months minimum that resulted from a loss of employment or reduction in income, which is considered the “economic event”.

Here’s the bigger problem. Most who had an “economic event” tried to hang on, wiping out assets along the way. But, while trying to hang on, homeowners accumulated more debt to stay solvent and in most cases, to stay current on their mortgage. Then, another “economic event” hit, assets were gone and debt is so excessive that there is no choice but to short sell.

As a mortgage broker in Florida where it is common to see Boomerang Buyers (those eligible to re-enter the housing market after a short sale or foreclosure), I often hear the full story for those who have lost a home and want to re-try home ownership again. An economic event followed by a prolonged period of trying to stay put, finally ended with another event where funds were no longer available and the only choice was to short sale, occurred in a great deal of these cases.

Proof also exists to show a good number of these folks had excessive debt that pushed up debt to income ratios incredibly high prior to the sale of their underwater home.

But, it gets confusing for a new mortgage. For the FHA “Back to Work” program, HUD approved counselors are able to determine hardship and can provide those who attempt a re-purchase one year after a short sale, foreclosure or bankruptcy with a housing counseling certificate.

However, that doesn’t mean the mortgage company will approve the mortgage. Because the economic event may have occurred years ago and short sale processes took months or years, documentation such as tax returns and bank statements needed to show a lack of assets may stretch over the previous five to seven years rather than the most recent two years that lenders are accustomed to evaluating.

Mortgage companies who offer FHA “Back to Work” are reluctant to promote this almost two year old program due to few of these loans getting approved. Part of this is because loan originators don’t provide enough documentation, and the other problem is that there seems to be wide discrepancy between underwriting opinion on these files.

Varying opinion also exists for “extenuating circumstances” noted in Fannie Mae and Freddie Mac guidelines for eligibility of a new mortgage under four years. Underwriting interpretation of these guidelines vary greatly from lender to lender for the few mortgage companies who offer these loans.

For loans submitted with what seems to be an iron clad “extenuating circumstance” or proof of the 20% reduction in income for 6 months minimum for FHA’s “Back to Work” program, underwriter opinion seems to vary widely. Some underwriters think the decision to short sale was too soon, while others wonder why homeowners waited. It seems they are trying to justify the sale was “not strategic”.

The income, current credit and assets of borrowers who have gone through a short sale and are trying to re-enter the housing market is more than acceptable per current guidelines. They have to be next to perfect, and they know it. Other than knowledge of the past short sale, these are loans that any lender would want to have on their books.

Those who make policy need to talk directly with affected past short sellers. They need to come to where underwater home problems still exist and see for themselves what is really happening. This can truly help the housing industry recover.

 

 

 

 

Short Sale Code Problem and Workable Solutions

May 28, 2014 by · Leave a Comment 

 Short Sale Credit Code Problem: HOW Changing BOTH the “Root” of the Problem and “Current Short Sale Code” will Help 11.3 Million Past and Future Short Sellers

Download/read the full report below.

2.Short Sale Code Problem.Change BOTH Root and Short Sale Code.probs.workable soluts.5.12

WHY Specific Short Sale Code for 11.3 Million Who Were or Are Underwater is Worth It

May 28, 2014 by · Leave a Comment 

For a long time, a battle has been waged to get a short sale credit code for past short sellers. Almost all  who have short sold will tell you that they were told upfront that the only way to get short sale approval was if they were delinquent on their mortgage first… told to them by their short sale lender, a realtor or an attorney.

Why the need for a specific short sale credit code?

Getting a specific short sale code will stop the mortgage denial that most short sellers face when they apply for a conventional mortgage two years after the short sale when a foreclosure code shows up on past short sale credit. This is because mortgage credit that goes past 120 days late is coded as a pre-foreclosure or foreclosure.

A specific short sale credit code could be the alternate code used by lenders to change a short sale coded as a foreclosure to a true short sale. And, this specific short sale code could be applied to all short sales going forward.

Why there is great worth for a specific short sale credit code

In almost every single case I see, credit was pretty good before the short sale, until the homeowner had to go delinquent, most often a lender requirement for a short sale approval. Credit is also pretty good after the short sale, and eagerness to improve credit after the short sale is apparent as consumers point out how they are “making it better”.

The ironic flip side to this is that the rebuilt good credit and the ability to come up with 20% down two years later for a conventional mortgage prompts those who have not gone through a short sale to to speculate that “maybe there wasn’t a real hardship”, and fuels the fire of “strategic default”.

From personal experience, I will attest that those who don’t believe these folks are “having hardship enough” need to take a closer look. The hardship is there and painful for most to relay again, as they convince the new lender of why a short sale will never happen again. You may be surprised at the reality of what happened, and be prepared that most will not expose this unless prodded to do so.

A unique difference that is apparent in almost every short sale case is the presence of a dangerously high back end debt to income ratio (DTI), often over a period of time, when underwater homeowners grapple with how to exit their home. Homeowners hang on for as long as possible, borrowing against other credit to stay solvent. A great number of these consumers have wiped out retirement assets and borrowed from others, until there is nothing left to do but short sell.

Why underwater homeowners and past short sellers should fight for a specific short sale credit code

A great majority of underwater homeowners aren’t the “strategic defaulters” that the press and so many others have made short sellers out to be. It is apparent that many stayed in negative equity homes longer than they should have, not quite sure what to do. Every one of them has a story of trying to “do the right thing”, and almost all didn’t tell the real story in their hardship letter to the bank. There seemed to be confusion, as if they were trying to convince the lender that they were worthy of being approved for the short sale, with very little said about the hardship.

Many in this unique financial meltdown were affected simply because they were in an area of the United States where home values plummeted.  Though there are those who tried to scam the banks, the majority did not and have been humiliated by this process, keeping silent even afterwards.

Why this is important for those affected

This is now a fight for those affected, for a credit standing that many of you have built over a lifetime. Erroneous credit can affect interest rates and program eligibility for you in the future. You did the right thing by working with the bank on a short sale and not going into foreclosure. Your credit should not reflect a foreclosure.

underwater_homes_top_states_march_2014

 

9.1 Million U.S. Residential Properties Seriously Underwater in First Quarter, Lowest Level in Two Years/RealtyTrac/April 15, 2014/ http://www.realtytrac.com/Content/foreclosure-market-report/q1-2014-home-equity-and-underwater-report-8037

 

And here’s a news flash. Those who were approved for a short sale and are paying back on the deficiency…. they can’t get back into the housing market either.

Why the mortgage and real estate industries need to fight for a specific short sale credit code

There’s a pattern here, a good one, where importance of credit is apparent, except for the stint of late payments required to exit an underwater home. For a conventional loan, you can re-buy a home 2 years after the short sale with 20% down. Most of the time, past short seller loan files are impeccable, a loan that any lender would jump at.  Short sellers have often been maligned as “strategic defaulters” who willingly stopped making payments. This is often far from the truth, and it can be proven that many lenders, or “investors”, still require underwater homeowners to be delinquent on their mortgage before a short sale approval will be granted, to this day.

There are [1]2.2 million past short sellers across the U.S., many ready to come back into the housing market.

And quietly, another 9.1 million still underwater homeowners are inquiring about what will happen to them when they have to exit their home.

Yes, values are finally rising again. But in many areas, the increase is not enough to pull negative equity homeowners above water, and we are starting to see a new trend of short sellers coming into the real estate market. Many must sell because they have to, not because they want to. Many are calling to inquire about what their credit will look like, preparing for problems they hear and read about after a short sale. These are not deadbeats, but homeowners who are preparing to go through the arduous short sale process with the lender.

Others are already helping

There is already good dialogue between credit reporting agencies who are aware of the foreclosure code being placed on past short seller credit and who are trying to help affected consumers. The National Consumer Reporting Association (NCRAinc.org), a nationwide trade organization of credit reporting agencies, has helped to bring this problem to the forefront.

In May 2013, Senator Bill Nelson of Florida, was made aware of the problem, saw the credit impact and demanded a solution for the problem from the Consumer Financial Protection Bureau (CFPB). The CFPB, already aware of this problem, worked diligently with the Fannie Mae Desktop Underwriter (DU) system on a fix, but the “fix” has posed confusion. Lenders are supposed to be able to instruct DU of an erroneous foreclosure. Instead, the Fannie Mae system must see a conflict in credit code on their end first, and provide a message to the lender for entry to Fannie Mae’s DU system to correct the problem. In other words, Fannie Mae must give permission to do the correction, but only when they see a problem.  Fannie Mae permission to correct the erroneous foreclosure code is given only occasionally, and lenders across the country have given up on this fix.

A few solutions have come out of this problem, often stumbled upon when comparing data.

Full directions for two of the solutions can be found at Directions to SUBMIT A COMPLAINT to the Consumer Financial Protection Bureau and Lender Letter

An intro video to the short sale credit code problem and the two working solutions can be found on the YouTube video “2 Working Solutions for past Short Sellers with FORECLOSURE on short sale credit” at   https://www.youtube.com/watch?v=D2YMtM3ILa4

2 working solutions

 


[1]Boomerang buyers return to market after foreclosure/By Les Christie  @CNNMoney March 11, 2013 http://money.cnn.com/2013/03/11/real_estate/foreclosure-homes/

Why NOT TO DISPUTE Erroneous Foreclosure on Credit Report

November 25, 2013 by · Leave a Comment 

When the erroneous FORECLOSURE account is disputed, it drops off of the automated Fannie Mae or Freddie Mac underwriting report. However, the findings notate the account as a “dispute” and lenders must delete dispute from credit report, obtain new credit and rerun Fannie Mae AUS. Then, the FORECLOSURE account comes back with the date of un-dispute as the new “date reported” making the account look like the erroneous foreclosure (that is a short sale) just occurred! Now you have THREE problems:

1) deleting the dispute

2)correcting the date of the short sale (noted as a FORECLOSURE) 

3)getting the FORECLOSURE code corrected to a short sale!

Please use these two fixes:

pict dispute for WP

pict 2 disp for WP

 

 

Fannie Mae Fix out Nov.16, 2013 and Two Fixes for Erroneous Foreclosure Code on Past Short Seller Credit Working Now!

October 27, 2013 by · 8 Comments 

Fannie Mae Real fix3

Effective Nov. 16, 2013, Fannie Mae “Fix”!

FNMA Horizontal

Desktop Originator/Desktop Underwriter  Release Notes DU Version 9.1

Updated October 22, 2013

During the weekend of Nov. 16, 2013, Fannie Mae will roll out automated underwriting changes to Desktop Originator/Desktop Underwriter to allow lenders to make a correction when past short sales are erroneously coded as a foreclosure. This will allow past short sellers now eligible for a new mortgage to obtain an approval through the Fannie Mae automated underwriting system (AUS)!

Underwriting when Conflicting or Inaccurate Foreclosure Information Provided on DIL or PFS Tradeline

Fannie Mae has been made aware that there are often inconsistencies in the credit data when Deed in Lieu (DIL) and Pre-Foreclosure Sale (PFS) events occur, and in an effort to assist borrowers in obtaining a new loan in an appropriate timeframe, DU will be updated to disregard the foreclosure information on the credit report when instructed to do so by the lender on the online loan application.

Here’s how to correct the problem:

a. The past short seller needs to have proof of past short sale available (commonly received from listing realtor) and a HUD 1 closing statement to show date of the short sale (both commonly retrieved from short sale realtor or title company). Provide to lender.

b. Lender should run the Desktop Underwriter and get finding first. If Refer with Caution received (shown below), go back into 1003 loan application.

 Rfer with Caut

When DU identifies a foreclosure on a credit report tradeline that appears to be one that was subject to a DIL or PFS, the lender may instruct DU to disregard the foreclosure information on the credit report by entering “Confirmed CR DIL” or “Confirmed CR PFS” in the Explanation field for question c. in the Declarations section of the online loan application and resubmitting the loan casefile to DU. When DU sees this indication, the foreclosure information on the credit report tradeline that also has a DIL or PFS Remarks Code will not be used.

The following is a screen shot of the Desktop Originator® (DO®)/DU User Interface that shows question c., the Explanation field, and examples of how the data should be entered on the online loan application after Nov. 16, 2013:

CR: Credit

DIL: Deed in Lieu

PFS: Pre-Foreclosure Sale/Short Sale

DU fix.12.17

c. After the correction is made, lender should rerun Desktop Underwriter again.

For questions regarding the support of this field by a lender’s loan origination system, lenders should contact their technical support team, and may also contact their Fannie Mae Account Team for additional assistance.

Please Note:

    •  FHA and VA loan approvals are not commonly resulting in loan denials for past short sellers through eitherFannie Mae DU or Freddie Mac LP systems.
    • For short sales that are over 4 years ago, have your lender run through Freddie Mac LP automated underwriting system.

 

And, try these two solutions which are working right now, resulting in an approval:

checkmarkEffective NOW: “Submit a Complaint” at CFPB.gov now.

This prompts a response from your lender typically within 3 days. (A visual of the 5 steps to complete and a list of documents to have ready to attach is at http://closewithpam.com/directions-to-submit-a-complaint-to-the-consumer-financial-protection-bureau/).

CFPB Bank ltr pg 1

bank ltr pg 2

Bank Ltr pg 3

bank ltr pg 4

bank ltr pg 5

The resulting letter from your past short sale lender will have a CFPB case#.

Kelly CFPB letter

checkmark Effective NOW: Call your past short sale lender and ask for the “Executive Mortgage Complaint Escalation” phone number. Call this phone # and ask for a letter stating that your past mortgage closed as a short sale.

a. Have your HUD-1 Closing Statement and the short sale approval letter(s) for the 1st (and 2nd ) mtg. ready upon this call. Make sure to ask how long it will take to get this letter.

b.  Forward the resulting letters from CFPB and your past short sale lender to your new mortgage lender and ask them to re-pull a new credit report.

IMPORTANT: Ask your lender if they can pull credit through Kroll Factual Data or Acranet. I am having various results with different credit agencies and the greatest success has been with both of these agencies.

c. Then, have your lender rerun your loan with the new credit report through Fannie Mae Desktop Underwriting. This results in an Approve/Eligible, or an Approve/Ineligible that can be fixed with proof of the short sale date.

Letters from Lender:

Bank letter

Albright WF letter

Underwater Florida Residents: Be Prepared on 10/1 at 9am for $50,000 Principal Reduction through HHF!

September 28, 2013 by · Leave a Comment 

REPEAT: Underwater Florida Residents: Be Prepared on 10/1 at 9am for $50,000 Principal Reduction through Florida’s Hardest Hit Funds! Only 25,000 applications will be processed initially!

Chris Chmura, Fox 13 WTVT   9/27/13

Fl HHF slider revised

And, on 9/23/13, this article on Hardest Hit Funds came out thanks to Beth Kassab in the Orlando Sentinel.

Hardest-Hit Fund finally helps those underwater on their homes

September 23, 2013|Beth Kassab, Local News Columnist

http://articles.orlandosentinel.com/2013-09-23/news/os-hardest-hit-housing-fund-beth-kassab-20130923_1_principal-reduction-homeowners-hardest-hit-fund

However, this is what the Florida Hardest Hit Funds application page on their website showed: NO ABILITY TO MAKE APPLICATION until Tuesday, Oct. 1 at 9am! 

Fl HHF applic website

So get ready, underwater Florida homeowners! Here’s some homework to do before Oct. 1 at 9am:

1.      Go to Principal Reduction page under Florida Hardest Hit Funds and review eligibility criteria at http://www.principalreductionflhhf.org/

Fl HHF website

HHF Prin Reduct criteria  

2.    Read Fact Sheet at http://www.principalreductionflhhf.org/rfv-77.aspx.

3.    Check your income, per eligibility.

Income level Cris Chmura

 

 

Check your family income per Florida county. If you believe that you are over 125% underwater, are current on your mortgage payment and think that your income level will fall into eligible criteria, prepare to apply for up to $50,000 in principal reduction through the Florida Hardest Hit Fund on Tuesday, October 1st at 9am.

Please make sure to review all criteria at http://www.principalreductionflhhf.org/.

Why this is so important:

Percentage still underwater in area Florida counties:

Polk 43%

Pasco 43%

Pinellas 31%

Sarasota 25%

Sumter 10%

Tampa bay still Underwater 9.28

 

 

 

Fannie Mae Desktop Underwriter (DU) Vers. 9.1 Release Webinar Available!

September 19, 2013 by · Leave a Comment 

Lenders, loan officers, credit companies;

Sign up for Desktop Underwriter (DU) Version 9.1 Release Webinar dates at https://www.fanniemae.com/s/more?query=webinar+on+version+9.1

This session will provide an overview of instruction on how to confirm past consumer short sale data in Fannie Mae Desktop Originator/Underwriter automated system, scheduled for update the weekend of November 16, 2013.

FNMA Vers 9.1 training

Pasco man gets around home lending glitch

September 15, 2013 by · Leave a Comment 

8 on your side

Posted: August 28, 2013

By Shannon Behnken

PASCO COUNTY, FL -In 2010, George Albright’s Trinity home lost half its value, and he lost income. His lender agreed to allow the house to sell for less than Albright’s mortgage and write off the rest. This foreclosure alternative is supposed to help distressed homeowners get back on their feet.Albright knew the short sale would be a black mark on his credit, but he wanted to buy a home again in a few years.”The bank approved it, so I thought I’d be okay in a couple of years and get back in the market.”

One of the benefits to a short sale is that most lenders require only a two-year waiting period before you can buy again. A foreclosure, on the other hand, sticks on your credit report for seven years. But Albright, and thousands of others who have waited their two years, are finding that a computer glitch resulted in foreclosure, the “kiss of death” in lending, on their credit anyway.

“Again, I thought I did the right thing, and I’m getting linked in with other foreclosures, and I didn’t think that was fair because I thought I did the right thing, as best I could at that time.”

The problem is that credit agencies don’t have a code for “short sale” and so many just mark foreclosure. Fannie Mae is working on a fix to its computer system that would flag this problem. The new system is supposed to launch Nov. 16. In the meantime, the Federal Housing Administration is working to change its guidelines, too.

Instead of waiting three years for an FHA loan, a distressed seller can now jump back into the market after one year of good credit.

Until all of the computer fixes are in place, experts recommend obtaining a letter from your former lender to prove your short sale situation.

This is what Albright did, and now he has been approved to buy a home again.

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