The next time a Republican tells you that raising taxes on the super-rich is raising your taxes, you might wish to not accept the statement as Gospel. American families, those at the bottom 90 percent of earnings are not making it so well through the crisis. And God, Sarah Palin and Glenn Beck are not so very concerned. The only question is: How President Obama? Where does he come down on this?

From Seeking Alpha:

This graph was an eye opener for me (not that I should be surprised):

My Take:

What a time to be an oligarch! All I wanted to do was vomit when I saw this.

Folks, there is no way we can have economic prosperity in this country when the top 1% has all of the money. The middle class is basically being destroyed right in front of our very eyes. Consumption economies die when the consumers have no money to consume!

I see growing signs of desperation and anger as the wealth of this nation continues to get transferred to the elite of this nation.

People are starting to “lose” it as a result. This past week’s airplane event in Austin was a disturbing developement. I must admit that I really am not surprised. The government shouldn’t be either.

Things are only going to get worse in the violence department as the taxpayers continue to get violated and more desperate as a result of this economic cataststrophe. The news media tried to downplay the actions in Austin.

I think Washington was both surprised and concerned about what took place in Texas.

I have to ask: Should the government really be surpised that an American flew a plane into an IRS building in a fit of rage as we all get repeatedly fleeced by the political and social elites of this country?

Let me preface all of this by saying violence is not the answer here. However, why shouldn’t every American infuriated by what has ocurred since this crisis began?

All the government has done is bail out Wall St. continuosly since 2008. My guess is the disparity of wealth in this chart would look even worse if it included 2009. The rest of America has basically been ignored minus a few housing programs to help lower mortgage payments.

That’s what been so frustrating about this whole crisis and America is finally starting to get it. Just about ALL of the steps that have been taken by the government to help fix this crisis have involved throwing more and more money to the financial elites of this country. I mean, the examples are endless: TARP, AIG, Bank of America (BAC), Citi (C), Freddie (FRE), Fannie (FNM)….Need I say more?

The sheeple are finally realizing that the money is not trickling to them like Washington had promised when they threw billions to the banks. The people have only seen things get worse while Wall St. has prospered. They now want to know where their friggin bailout is!

They are also realizing that the goverment’s actions since this all started in 2007 have done nothing but drop the yields on their CD’s to 0%. Gee thanks!

Let’s not forget that the sheeple/middle class were also victimized by Wall St. as they were gamed into buying homes they couldn’t afford. When this fantasy came crashing down they were again violated as they saw their 401k’s get cut in half.

The people of this country can only take so much before they start going postal!

In fact:

The Wall St Journal had an article out yesterday around the increasing threats of violence against the IRS:

WASHINGTON—The federal agency charged with ensuring the safety of IRS employees said it has seen an uptick in the past several years in threats against agency personnel.

In the past four years, there appears to have been a “steady, upward trend” in the number of threats against IRS employees, said an official with the Treasury Department’s Inspector General for Tax Administration. That assessment, offered in response to an inquiry from Dow Jones Newswires, is based on preliminary data, the official cautioned.

The middle class in starting to feel like that pledge in the movie Animal House who says “thank you sir may I have another” after getting repeatedly paddled by his brothers.

Here is the reality that America has realized: If you are not part of the 1% club in this country you are nothing but a victimized pawn as the elite continue to line their pockets with our nations income.

The middle class now finds themselves struggling to survive as the economy continues to plunge. Nothing has gotten any better despite what the media pundits tell you. Jobs continue to evaporate and foreclosures continue to soar as the the middle class in this country continue to get pummeled.

Meanwhile, Wall St. is busy counting their year end bonuses after making billions gambling the taxpayers money in 2009 as the sheeple find themselves on the brink of collapse.

The citizens of this country are slowly reaching their breaking point. When Ted Kennedy’s Senate seat goes to a Republican you know the people have had it. The poor fellow is now probably rolling over in his grave after seeing a guy from the right take over his office.

The Bottom Line

We are now three years into this crisis and nothing the government has tried has worked. The market may have recovered (for now) but THE PEOPLE haven’t . How much pain do these people in Washington think we can take before we start rising up and begin hanging bankers from the lamp posts?

They need to remember that EVERYONE has a maximum threshold of pain. If there was no such thing then you wouldn’t see a MMA fighter “tap out” in the UFC. This country is just about there.

The plane crash in Texas should be taken as a shot across the bow in Washington. I am getting really concerned that we are going to see severe social issues in this nation if we continue down the same path in the very near future.

I would hate to see this because violence is not the answer folks. We need solutions and fast. I don’t have all the answers but I know where we can start.

We can start by putting an end to the bailouts of the financial elite. Washington needs to start listening to Main St. instead of top 1%’ers on Wall St. If this creates an economic crisis so be it. At least it will keep this country solvent.

The government needs to realize that SELLING $118 BILLION IN T-BILLS NEXT WEEK IS NOT THE ANSWER!This simply cannot be maintained over a long period of time. Ponzi schemes never work and they don’t solve financial crisis. They end in tears.

Washington needs to wake up because we are headed straight off a cliff. Take one more look at the chart above and look what happened the last time the disparity in wealth in this country got this high.

Can you say Great Depression? Remember, the only way an economy can thrive is when the majority of people involved in it are prospering. We are about to drive off the same cliff that we did in the 1920’s as the middle class is turned into a group of SERFS. Be prepared.

I need to end it here because I feel my blood pressure rising.

VA Mortgage applications surge as rates tumble

While home refinancing loans dominated demand, the appetite for applications to buy a home, a tentative early indicator of sales, hit its highest level since early January. The overall trend bodes well for the hard-hit U.S. housing market, which has been showing signs of stabilization.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended Sept 4 increased 17.0 percent to 648.3, the highest level since the week ended May 29.

"It is hard to make an argument with lower wages, less hours and higher unemployment that people will be upsizing into their dream home," he said.

To be sure, the Labor Department last week said the unemployment rate reached a 26-year high of 9.7 percent in August.

While low mortgage rates, high affordability, and the government’s $8,000 tax credit, part of the stimulus bill, for first-time home buyers have helped pave the way for stabilization, the move-up buyer has been mostly absent. The move-up buyer is a homeowner who chooses to move to a larger home due to a lifestyle change such as a marriage, an addition to their home, a job promotion or a job transfer.

With the tax credit set to expire in several months and distressed properties making up a high proportion of sales, the recent uptick in activity may be masking uncertainty about the long-term outlook.

"The inventory of existing U.S. homes for sale remains elevated," Greenberg said.

Furthermore, a wave of upcoming interest rate resets on adjustable-rate mortgages may negatively impact the market, he said.

"If the U.S. government pulls some of its support for the housing market too early, it would not bode well for home prices," he said.

Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 5.02 percent, down 0.13 percentage point from the previous week, the lowest level since the week ended May 22. However, the rate remained above the all-time low of 4.61 percent set in the week ended March 27. The survey has been conducted weekly since 1990.

Nevertheless, interest rates were well below year-ago levels of 6.06 percent.

The MBA’s seasonally adjusted purchase index rose 9.5 percent to 304.1, the largest gain since early April, with the index at its highest level since the week ended January 2.

The four-week moving average of mortgage applications, which smooths the volatile weekly figures, was up 7.0 percent.

The Mortgage Bankers seasonally adjusted index of refinancing applications increased 22.5 percent to 2,651.2, the biggest jump since mid-March, with the index at its highest level since the week ended May 29.

The refinance share of applications increased to 59.8 percent from 56.5 percent the previous week, but remained significantly lower than the peak of 85.3 percent in the week ended January 9. The adjustable-rate mortgage share of activity increased to 5.8 percent, up from 5.6 percent the previous week.

The U.S. housing market has suffered the worst downturn since the Great Depression and its impact has rippled through the recession-hit economy, as well as the rest of the world.

The housing market, however, has been showing signs of stabilization, with sales rising and home price declines moderating in many regions of the country. In fact, home prices in some regions have risen.

Some analysts, however, say prices may fall again, with a wave of more foreclosures in the pipeline.

Fixed 15-year mortgage rates averaged 4.45 percent, down from 4.57 percent the previous week. Rates on one-year ARMs decreased to 6.69 percent from 6.71 percent.

APPLY FOR A VA HOME LOAN NOW at Equity VA Loan 

"The sacrifices military families make for our country – in terms of deployments, but also moving several times in their career – are immense," Vice President Biden said. "They often don’t get to choose when they move and may be forced to sell their homes when they don’t want to.  The Department of Defense, with funds from the Recovery Act, is expanding its program to help its military families who have been forced to sell their homes at a loss.” 

Several times during the average military career, Service members are ordered to change duty stations to meet the mission requirements for their respective branches of service. Duty calls on them to relocate their family and establish a new home as often as every two to three years. 

The expanded program will assist families forced to relocate due to base closures or normal assignment rotations.  But, the most important aspect is that priority access to the funds will go to survivors of those killed during deployment, and those who were wounded, ill or injured during deployment.

“I’d like to thank my good friend, Senator Tim Johnson, who has worked tirelessly on this issue.  He is a champion for military families and working on innovative ways to improve their quality of life,” said Vice President Biden. 

The announcement was made as part of the Vice President and Dr. Biden’s visit to Naval Base Coronado in San Diego. Following the announcement, the Vice President toured the base and met with Navy SEALS, while Dr. Biden met with local military spouses and community volunteer groups to discuss issues facing military families.

Click for more information on DoD and the Recovery Act

Laurie Lopez is exasperated with her family’s home search.

She and her husband John, a 4-year veteran of the United States Navy, are both in their early 30s, have good credit, good jobs and have already been approved for a $225,000 home loan by their mortgage company.

Problem for them is, they’re trying to use a VA Loan to purchase the family’s first home.

“We’ve probably looked at over 100 homes,” Lopez said of the family’s five-month search in the Corona. “We lost out on the last property we bid on because we were using a VA Loan,” Lopez said. And they had the highest bid according to Lopez.

“People don’t want to mess with the inspections,” Lopez said of seller’s disinterest in selling to buyers using a VA Loan, “too much red tape.”

Lopez said they decided on a VA Loan because, for starters, John earned the VA benefit as part of his service to the United States and was honorably discharged. The VA loan is available to veterans, active duty service members and reservists.

The Lopez’s also liked the idea that there was no down payment required – although they have money for a down payment – and there’s no private mortgage insurance, which they would incur unless they put 20 percent down when purchasing a new home with a conventional mortgage.

They’ve also been approved for an FHA loan, however an FHA loan requires a 3.5 percent down payment as well as monthly mortgage insurance – both of which are not required with a VA loan.

Bryant Lacey, who works in the loan administration department at the VA Regional Loan Center in Phoenix, which includes California in its jurisdiction for regulating VA Loans, admits he’s heard complaints that the VA Loan involves too much “red tape” and that it’s too bureaucratic, but he said those critiques are outdated.

Lacey said the problem with sellers is a lack of information about the VA Loan product.

“Realtors and lenders don’t know the guidelines,” Lacey said.

Over the past 18 months, Lacey said the VA has converted to an electronic reporting system that is accessed by loan servicers, which, in theory, are supposed to help expedite the loan process.

“We’ve tried to streamline the process,” Lacey said.

But Richard Gregg, a real estate agent and loan officer in Corona, said he’s not so sure. He points to a borrower that his company, Oreoit LLC, was working on a VA loan with that finally closed last week – after they started the process in February.

“It usually takes 30-40 days,” Gregg said of closing a deal without using a VA loan.

Gregg said he doesn’t have anything against the VA loan, and he’s seen a few working as a seller’s agent, but has never been through the process himself working as a buyer’s agent. However, from his ten years of experience in real estate and working with others at his company who have dealt with the VA loan, a seller accepting a VA loan comes down to preference.

“They can be very cumbersome,” he said of the loan, “and with a VA appraisal, if repairs are necessary, the seller has to ask themselves, ‘Do I want to put any more money into this property?’”

And in a case like the Lopez’s, where they put down a higher bid on the home they wanted, Gregg said the seller probably received either a cash offer or a conventional loan offer, meaning they wouldn’t have to go through a VA appraisal and they could close the deal on the house faster.

“Without knowing the property, the sellers were probably done putting money into the property,” Gregg said. “Bringing a house to VA or FHA standards can be frustrating.”

In Northern California, the VA loan still has its quirks, but it appears they’re getting a bit more traction than they are in Corona.

In San Leandro, 20 miles southeast of San Francisco, real estate agent Shokoofeh Nowbakht has also been working with a client since February on closing a VA loan. While Nowbakht confirms that it’s taken “a little longer” than she’s used to, she’s glad to be helping a veteran become a homeowner.

“We’ve run into a couple things along the way, but it’s been a team effort the whole time in getting this loan to close,” Nowbakht said, referring to the seller, in this case a bank, plunking down $25,000 in repairs to fix termite damage and the house’s foundation. “You don’t see that very often,” she said of the bank paying to fix the repairs.

Nowbakht said she expects to see the loan close next week, even though she’s had to extend the closing date twice in light of repairs needed to the older 2 bedroom home in San Leandro that went for $250,000, a very low price for a home that size in the Bay area. Now she’s waiting on the appraiser to come back and give a thumbs up to the re-painting of the fence, which is the final obstacle before closing.

“I like the VA loan,” Nowbakht admits, “but I would like to see the VA lighten their guidelines. I know they’re protecting the buyer, and I have no problem with that, but sometimes you run into problems where a repair is needed and it’s uncertain who is supposed to pay for it.”

In Nowbakht’s situation, both she and her client have had to pay for repairs out of pocket on a house that technically isn’t the buyer’s yet, and that can be a problem if the loan doesn’t go through. While that doesn’t appear to be the case this time for Nowbakht, she said that this experience with a VA loan – her first – will better prepare her for the next VA loan.

“I’ll have to be more selective with the houses I show to someone using a VA loan,” she said. “I hope it doesn’t get impossible for people to use a VA loan around here.”

The VA loan limits for San Francisco and San Mateo counties is $1,094,625. The VA loan limit for Riverside County, where Corona is located, is $417,000, the standard VA loan limit.

 Brian LeBars, a mortgage broker in Pleasanton, just southeast of Oakland, has been doing business in the Bay area since 2001. He said he’s seeing more VA loans in the last year as more and more veterans are returning to the area.

“The business is shifting back towards government-backed loans,” LeBars said, adding he originates both VA and FHA loans.

LeBars said the VA loan is a good product, although it may not be the best product for everyone. In terms of seeing VA loans getting turned away, he said it can happen but that it really depends on what the lender or seller is looking for.

“It could be a poorly-written pre-approval letter, the buyer may have a low (credit) score, the agent might not be used to VA, it could be a number of things,” LeBars said as to what can lead a seller passing on a VA loan offer.

As for Laurie Lopez, the family continues their house search and the plan is to be in a home by this summer, but a lot will depend on whether a seller accepts a VA Loan.

“I want to be in a home this year,” Lopez said with a tinge of desperation in her voice. She adds that she and her husband will continue to shop with their VA loan, but if the search drags on, they may consider using an FHA loan. But Lopez is hoping it doesn’t come to that.

“I just wish somebody would show the VA loan some love,” she said.

Mortgage rates have hit historic lows, enabling home owners to slash their monthly payments by locking in a new rate.

But many people don’t qualify to refinance – either because they don’t have enough equity in their homes, their income has dropped or they’re behind on payments – and those are often the people who need help the most.

That’s when loan modifications come into play.

Loan modifications, which change the terms of a loan to keep the property out of foreclosure, used to be fairly rare but have jumped in recent months as the government takes steps to keep people in their homes and banks try to avoid acquiring more properties.

"I’d never heard of a loan modification, really," until last year, said Leigh Reid, who has been in the mortgage business for 20 years.

That’s when her customers, especially those in the real estate, building and tourism industries that have been hard hit by the recession, started asking her for help.

One client wanted to refinance but couldn’t. She had a 9 percent mortgage rate and owed $210,000 on her home but it only appraised for $200,000, Reid said.

"There’s no help for you in that kind of situation besides getting your lender to modify," Reid said.

Data from the Federal Housing Finance Agency show that many more homeowners are qualifying for modifications. Fannie Mae and Freddie Mac made almost 24,000 modifications during the fourth quarter of 2008, up 76 percent from the third quarter.

That was before the Obama administration announced the Making Home Affordable program in February, which includes a plan to modify first lien mortgages for up to 3 million or 4 million troubled homeowners.

That program was expanded this week, so that people who get a modification through Making Home Affordable on their first mortgage will automatically get reduced payments on the second mortgage if their servicer agrees to participate, according to the U.S. Department of Housing and Urban Development.

Twelve servicers, including the five largest, are doing modifications under the umbrella of the program, the department’s Web site says.

Debbie Kidd, director of the Homeownership Resource Center in Charleston, said the government support behind modifying has helped, and many lenders are being more lenient.

The homeowner doesn’t always need to be behind on their payments to qualify like they used to, she said.

"I’ve never seen it as easy as it is right now," Kidd said. "Lenders don’t want any more of these homes, they don’t want to take them."

Trippett Boineau, vice president of BB&T’s mortgage services at the branch on Oak Street, said new government programs should help the bank lower monthly payments for more people.

"If somebody can’t afford to stay in the house, maintain the integrity of the house, then you might foreclose. If, on the other hand, you think that the valuation may come back or it’s a temporary job loss, I would say banks are certainly leaning towards trying to work with people as opposed to trying to kick them out in the street," Boineau said.

There are many ways the loan terms could be modified, by lengthening the term of the loan, lowering the interest payment or tacking the past-due amount onto the principal.

One Realtor couple that Catherine Richardson, an independent agent with United First Financial, was doing a financial analysis for had a 6 percent rate on a 30-year jumbo loan that they had trouble paying because their commissions had been cut, Richardson said.

"When the loan modification came back, the loan extended to 40 years from loan modification," and the interest rate was 2.25 percent for the first three years and was scheduled to increase periodically to cap at 6 percent in 2017, she said.

Still, nobody is a shoo-in. The Homeownership Resource Center, a nonprofit that has professionals who help homeowners from across the state negotiate the modifications with their lenders, has about a 68 percent success rate, Kidd said.

Craig Daniel, a self-employed engineer in Pawleys Island, said he has four mortgages on two condos that he rents out. He’s been talking to his lenders for five or six months in hopes of getting lower monthly payments, but with no luck.

"My work has dried up of course so I have not been able to sustain all the mortgages," Daniel said. "My debt-to-income ratio is so high that they consider me a lost cause, so they don’t help me out at all."

It doesn’t help that they’re investment properties, not his primary residence, he said. Foreclosure proceedings have already started on one of the condos, but he hopes to sell both of them.

Lending professionals recommend that those seeking loan modifications be wary of companies that charge money to negotiate the modification with the lender.

People can contact their lenders directly or seek help from a nonprofit for free, they said.

Reid also recommends persistence, keeping all paperwork and financial documents organized, jotting down notes from conversations with the lender, and cutting out luxuries to show every effort is being made to pay the bill.

"You want to be showing them that you’re trying to do everything to eliminate some of the frills that you used to have," she said.

People should contact their mortgage servicers for more information.

Source: www.makinghomeaffordable.gov

by Nancy Farghalli

Military families are beginning to take advantage of falling home prices. A military salary has never been enough to buy into the overpriced housing markets in this part of the country, but that is changing because….

Bad news for the economy may mean good news for some homebuyers. Median home prices across the country have continued to fall. In March, western states like California, Arizona and Nevada saw home prices drop by 11 percent, according to the National Association of Realtors.

For first-time homebuyers, that’s great news. Many people who were priced out of the housing market for the past few decades are now able to buy in, especially in markets with an excess of distressed and foreclosed properties.That’s the case in Southern California, where military families are beginning to take advantage of falling home prices. A military salary has never been enough to buy into the overpriced housing markets in this part of the country, but that is changing because the region has led the nation in foreclosures in the past few months.Take Murrieta and Temecula, inland communities about 45 miles east of Camp Pendleton in San Diego County. In Murrieta alone, nearly 7,000 foreclosure filings occurred in the last year. That’s where Marine Sgt. Chris Gibson, 22, and his wife, Danyell, 21, just bought their first home.

They bought a two-story house on a street with cookie-cutter homes that range in color from brown to beige to peach.

The price was $193,000 and the picture isn’t perfect just yet. They don’t have a fridge, a stove or a lawn. They have weeds. And they are a bit wiped out from the move.

Danyell Gibson says it’s all worth it: "We have been renting for so long. When you have a house, we feel like we have taken a step up. And you know for a military family, that’s kind of a big deal."

Their mortgage is $1,150 — that’s nearly $500 less than the rent on the apartment at Camp Pendleton. Chris Gibson says they were sick and tired of living on base.

"You can’t customize your own house at all" on the base, he says. And they are paying less for their new house — with three bedrooms, three baths, a two-car garage and pool — than they did for their two-bedroom, one-and-a-half bath apartment.

The couple represents a growing trend of military families buying into the region’s real estate market for the first time. Chris Gibson says it’s probably the only time in the past 10 years that an active-duty sergeant could afford a nice home in San Diego County.

The Gibsons were able to afford this home because they bought a bank-owned foreclosure, which usually means a below-market price. In addition, they had some help from the military in the form of a Veteran Affairs "no-no loan" — no down payment, no closing costs.

Their real estate agent, Francisco Lopez, explains that the VA rolls its fees into the loans: "They basically don’t have to come out-of-pocket and generally we negotiate the closing costs with the bank."

According to USAA, a financial services company helping military families nationwide, the number of VA loan requests has doubled since 2008. Lopez says he has helped 25 military families buy homes in the last year and says the VA system is already getting overloaded.

Lopez says it is taking more time than usual for the VA to close loans and to get an appraiser to properties because more people are applying for the loans.

"They would not be able to buy in this market three years ago," he says. "You know, good for our military, the people who can now be homeowners. They deserve it."

One downside in a neighborhood like this one in Murrieta, however, is that there are dozens of foreclosed homes on every street. That depresses housing prices even further and degrades the neighborhoods.

Danyell Gibson says she’s already noticed that many of her neighbors are in the process of refinancing or getting their loans modified because they are having difficulties paying their mortgages. Some are even losing their houses.

“The brave men and women fighting to protect America overseas should never worry about coming home without a roof over their heads,” said Sen. Kerry.  “Providing relief during this mortgage crisis is the least we can do for those who have served our country and their families who have felt the strain of repeated deployments.”

Senator Kerry’s Military Families and Veterans Homes Protection Act of 2009 builds on provisions the senator included in the 2008 Foreclosure Prevention Act.  Kerry’s legislation amended the Service Civil Relief Act (SCRA) by extending the limit on foreclosure from 90 days to 9 months after service members have returned from active duty.  It also extended the existing 6% mortgage interest rate for one year, a provision that was set to expire in 2011. 

Due to the success of this provision, Kerry’s new legislation will extend the 6% capped interest rate indefinitely.  This change will provide service members and their families with the continued protections they need to ensure they do not lose their homes due to their service to our nation.

1. Obama Announces Joint Electronic Record System For Vets.  
2. University Of Hawaii Nursing School Selected For VA Program.  
3. Ribbon Cutting Ceremony To Be Held For Clinic In New York.  
4. Caregiver Sentenced For Mistreating Vet.  
5. VA Helping Provide Adult Day Care To Vets.  
6. American Indian Memorial Planned At Riverside.  
7. VA Employee Plays on High School Team  
8. Going Fishing For Recovery.  
9. Rolling Thunder Veterans’ Group Helps Pay Former Soldier’s Bill.  
10. Illinois Man Awarded Medal Of Honor Dies At 89.  

1.      Obama Announces Joint Electronic Record System For Vets.   The AP (4/10) reports, "President Barack Obama on Thursday promised a more efficient record system to ease delays" in healthcare "for wounded veterans, as the government copes with more than 33,000 military personnel injured in wars in Iraq and Afghanistan." Under the new system, an "electronic record would follow a service member in the military and then later in the Veterans Affairs Department’s medical system." The White House "said the program being undertaken by the Pentagon" and the VA will be the "next leap to delivering seamless, high-quality care, and serve as a model for the nation." Reuters (4/10), Star And Stripes (4/10, Shane), and the Fox News (4/9) website take similar note of this story.
      Federal Computer Week (4/10, Mosquera) notes that when he announced the record initiative, Obama "said it was time ‘to give our veterans a 21st-century VA,’ adding that there is no comprehensive system that enables a smooth transition of health care records between" the DOD and the VA. According to Obama, this "results in extraordinary hardship for an awful lot of veterans, who end up finding their records lost, unable to get their benefits processed in a timely fashion."
      Lawmakers Stress Importance Of Joint Record System.   NextGov (4/10, Brewin) notes US Rep. Bob Filner (D-CA), the chairman of the House Veterans Affairs Committee, "said he views development of joint electronic health records as a ‘matter of life or death.’ Without a complete record, VA clinicians might not have the information from Defense needed to properly treat a patient," Filner said. Meanwhile, US Rep. Steve Buyer (R-IN), "the committee’s ranking member, said he hoped Obama’s announcement would put an end to what he described as ‘20 years of bureaucratic infighting’ over development of joint records."
      President Also Backs Two-Year VA Funding.   CQ (4/10, Johnson) reports Obama "signaled Thursday that he will ask Congress to provide" VA funding "two years ahead and will push for a system that streamlines the transfer of medical records between the Defense Department and the veterans’ health system. ‘The care our veterans receive should never be hindered by budget delays,’ Obama said Thursday, adding" that he and Shinseki "have worked together to support advanced funding for veterans medical care." CQ adds, "Obama also called for multibillion-dollar increases to the VA’s budget, including the expansion of education benefits and programs for homeless" vets. US News And World Report (4/10, Ruggeri) publishes a similar story.
      In a related story, the Fayetteville (NC) Observer says, "Legislation working its way through Congress could improve veterans care by planning" the VA "budget two years in advance." The "Senate version of the bill has wide bipartisan support." Meanwhile, the advanced funding idea itself is supported by the President "and others" in his Administration.
      Advocates, Lawmaker Praise Obama.   After noting that the White House said the Joint Virtual Lifetime Record program will be part of the DOD’s 2010 healthcare budget, the Washington Times (4/10, Weber, Lengell) reports, "Joe Violante, the national legislative director for Disabled American Veterans," who attended Thursday’s White House event, "said Mr. Obama…reiterated a promise to get the additional money for veterans through advanced appropriations so officials could plan better. ‘I’m really excited to see him keep the promise,’ said Mr. Violante," who added, "I think he is really paying attention to what the needs are."
      The Helena (MT) Independent Record (4/10, Kidston) says veterans have been a top priority for US Sen. Jon Tester (D-MT) "for the past two years, dating back to when" the Senate Veterans Affairs Committee member "began holding field hearings across the state with Montana veterans." And on Thursday, "Tester praised" Obama, saying his "commitment to the sacred trust we have with those who serve is clear in both the DOD and VA budgets, and in the strong leadership of secretaries Gates and Shinseki."
      Obama Budget Increases Spending On Vets By $25 Billion.   The New York Times (4/10, A16, Alvarez), which says the President’s "announcements are part of a larger effort to improve services for veterans," points out that Obama’s "budget for 2010 increases spending for veterans by $25 billion and funnels more money into programs for those who suffer mental health problems" and traumatic brain injury (TBI).
      Budget Said To Contain "Substantial" Mental Healthcare Funding Boost.   The Washington Post (4/10, A2, Brown) notes that in his remarks Thursday, Obama "noted the toll" of TBI and post-traumatic stress disorder (PTSD) on Iraq and Afghanistan veterans. He "said his 2010 budget contained the largest single-year increase in VA funding in 30 years, with substantial increases for mental health screening and treatment."
      US Military Making "Broad Effort" To Better Treat Head Injuries.   The AP (4/10, Hall) reports, "Every soldier who’s gone to war in the past year paused before leaving to take" a series of brain tests. And now that "some of these troops have returned, they’re taking a fresh round of tests" that became mandatory in all branches of the US military last year. The tests are "part of a broad effort by the military to better treat head injuries." Funding for such treatment "is expected to increase under" President Obama, "who said Thursday his new military and veterans affairs budget will focus on diagnosing brain injuries and psychological disabilities that have gone untreated."

2.      University Of Hawaii Nursing School Selected For VA Program.   The AP (4/10) reports, "The University of Hawaii School of Nursing and Dental Hygiene has been selected to be a funded site for the Department of Veterans Affairs’ Nursing Academy’s Enhancing Academic Partnerships Program. Hawaii Democratic Sens. Daniel Akaka and Daniel Inouye said Thursday in a news release that VA Secretary Eric Shinseki informed them of the selection." The lawmakers "say the partnership will benefit UH nursing students and veterans across the Pacific." The Pacific Business News (4/10) and the Honolulu Advertiser (4/10) publish similar stories.

3.      Ribbon Cutting Ceremony To Be Held For Clinic In New York.   The Elmira (NY) Star-Gazette (4/10) reports the Bath Veterans Affairs Medical Center "will hold a ribbon-cutting ceremony at 11 a.m. Monday for its new primary care clinic." The facility "is a culmination of renovation and construction work in the main hospital building, and combines what used to be two primary care teams."

4.      Caregiver Sentenced For Mistreating Vet.   The AP (4/10) reports, "A former employee at a veterans nursing home" in Pueblo, Colorado, "has received a two-year deferred sentence for mistreating a Medal of Honor recipient in his care. Fifty-two-year-old Donald Morton of Las Animas pleaded guilty to misdemeanor neglect of an at-risk adult, " veterans Raymond Murphy, "and was sentenced last week by Pueblo County Judge Ernest Ruybalid." Murphy "died two years ago at age 77 while living at the Veterans Affairs nursing home in Pueblo, where Morton was employed. Another employee, 56-year-old Darrel McTaggart of Ordway, was charged with assault on an at-risk adult for allegedly harming another resident of the home," but that "charge was later dismissed for lack of evidence."

5.      VA Helping Provide Adult Day Care To Vets.   The North Andover (MA) Eagle Tribune (4/10, Moffett) says, "New Hampshire elderly veterans are getting out and socializing," playing "indoor basketball, bowling, even working out at SarahCare Adult Day Services. The facility received a five-year Veterans Administration contract to provide day care services for eligible veterans at no cost to their families. It is one of 10 facilities" in the New Hampshire "to have VA-approved and funded day health care services, said Jim Thompson, the public affairs officer for the Manchester Veterans Administration. ‘Day health care services are part of the VA’s benefits program under the umbrella of home and community-based care,’ said Sandra Munsschell, the communications officer for VA New England. ‘We’re trying hard to raise awareness about those programs.’"

6.      American Indian Memorial Planned At Riverside.   Indian Country Today (4/9, Morales) said that when it "comes to honoring those who served and died, the Riverside National Cemetery memorializes in dramatic fashion; and the next one will no doubt measure up to its antecedents. Its elaborate design, although presently conceptual, has been drawn, vetted and waiting final funding and approvals. But it will also be striking because it will be the only one" of the "country’s 144 national cemeteries" to "collectively memorialize…American Indian veterans." The VA, however, "must still approve and oversee planning and construction" of the American Indian Memorial.

7.   VA Employee Plays on High School Team - Here’s a quick trivia question — How many VA employees are leading their high school basketball team in scoring while also serving as team captain? The answer: only one. Brandon Gleason, a senior at Frederick Douglass High School in Columbia, Mo., is completing his second year in a unique "partnership in education" program between his school and the Columbia VA Medical Center. A straight “A” student, Gleason works as a medical supply aide in the medical center’s sterile processing department. Begun in 1998, the partnership allows up to 10 students to spend half a day in the classroom and the rest in a paid, part-time job. In exchange, the VA employee association assists with scholarships and students volunteer time at community events, such as Veterans Day activities. To date, more than 100 students have participated in the partnership, including some who later became permanent VA employees. 

8.      Going Fishing For Recovery.   The CNN (4/9) website.

9.      Rolling Thunder Veterans’ Group Helps Pay Former Soldier’s Bill.   The Pittsburgh Tribune-Review (4/10, Bowling).

10.    Illinois Man Awarded Medal Of Honor Dies At 89.   The AP (4/10, Suhr).

WASHINGTON – Declaring "good news" in the midst of an economic meltdown, President Barack Obama on Thursday urged families to take advantage of record low mortgage rates by refinancing their homes.

"We are at a time where people can really take advantage of this," Obama said, seated with a handful of homeowners who have already lowered their bills.

According to Betty Roberts, VA Home Loan Specialist at VA Home Loans Today, rates on a 30-year VA Mortgages have fallen to 4.78 percent, the lowest on record. Rates are down by more than a full percentage point from a year ago.

"The main message we want to send today is there are 7 to 9 million people across the country who right now could be taking advantage of lower mortgage rates," Obama said in a photo opportunity in the Roosevelt Room. "That is money in their pocket."

The president encouraged people to take advantage of a government Web site — http://www.makinghomeaffordable.gov/ — to see how they can get help.

In just a handful of minutes of addressing reporters, Obama read the Web site address aloud five different times.

The president credited his own government’s efforts, in part, for contributing to a recent surge in refinancing. The collapse of the inflated housing market helped contribute to a meltdown in the financial sector and the broader economy, and millions of people have lost their homes or been at risk for foreclosure.

Obama also warned people to watch out for scam artists.

"If somebody is asking you for money up front before they help you with your refinancing," Obama said, "it’s probably a scam."

Questions and Answers for Borrowers about the Homeowner Affordability and Stability Plan from the U.S. Department of Housing and Urban Development.

Borrowers Who Are Current on Their Mortgage Are Asking:

1. What help is available for borrowers who stay current on their mortgage payments but have seen their homes decrease in value?

Under the Homeowner Affordability and Stability Plan, eligible borrowers who stay current on their mortgages but have been unable to refinance to lower their interest rates because their homes have decreased in value, may now have the opportunity to refinance into a 30 or 15 year, fixed rate loan. Through the program, Fannie Mae and Freddie Mac will allow the refinancing of mortgage loans that they hold in their portfolios or that they placed in mortgage backed securities.

2. I owe more than my property is worth, do I still qualify to refinance under the Homeowner Affordability and Stability Plan?

Eligible loans will now include those where the new first mortgage (including any refinancing costs) will not exceed 105% of the current market value of the property. For example, if your property is worth $200,000 but you owe $210,000 or less you may qualify. The current value of your property will be determined after you apply to refinance.

3. How do I know if I am eligible?

Complete eligibility details will be announced on March 4th when the program starts. The criteria for eligibility will include having sufficient income to make the new payment and an acceptable mortgage payment history. The program is limited to loans held or securitized by Fannie Mae or Freddie Mac.

4. I have both a first and a second mortgage. Do I still qualify to refinance under the Homeowner Affordability and Stability Plan?

As long as the amount due on the first mortgage is less than 105% of the value of the property, borrowers with more than one mortgage may be eligible to refinance under the Homeowner Affordability and Stability Plan. Your eligibility will depend, in part, on agreement by the lender that has your second mortgage to remain in a second position, and on your ability to meet the new payment terms on the first mortgage.

5. Will refinancing lower my payments?

The objective of the Homeowner Affordability and Stability Plan is to provide creditworthy borrowers who have shown a commitment to paying their mortgage with affordable payments that are sustainable for the life of the loan. Borrowers whose mortgage interest rates are much higher than the current market rate should see an immediate reduction in their payments. Borrowers who are paying interest only, or who have a low introductory rate that will increase in the future, may not see their current payment go down if they refinance to a fixed rate. These borrowers, however, could save a great deal over the life of the loan. When you submit a loan application, your lender will give you a “Good Faith Estimate” that includes your new interest rate, mortgage payment and the amount that you will pay over the life of the loan. Compare this to your current loan terms. If it is not an improvement, a refinancing may not be right for you.

6. What are the interest rate and other terms of this refinance offer?

The objective of the Homeowner Affordability and Stability Plan is to provide borrowers with a safe loan program with a fixed, affordable payment. All loans refinanced under the plan will have a 30 or 15 year term with a fixed interest rate. The rate will be based on market rates in effect at the time of the refinance and any associated points and fees quoted by the lender. Interest rates may vary across lenders and over time as market rates adjust. The refinanced loans will have no prepayment penalties or balloon notes.

7. Will refinancing reduce the amount that I owe on my loan?

No. The objective of the Homeowner Affordability and Stability Plan is to help borrowers refinance into safer, more affordable fixed rate loans. Refinancing will not reduce the amount you owe to the first mortgage holder or any other debt you owe. However, by reducing the interest rate, refinancing should save you money by reducing the amount of interest that you repay over the life of the loan.

8. How do I know if my loan is owned or has been securitized by Fannie Mae or Freddie Mac?

To determine if your loan is owned or has been securitized by Fannie Mae or Freddie Mac and is eligible to be refinanced, you should contact your mortgage lender after March 4, 2009.

9. When can I apply?

Mortgage lenders will begin accepting applications after the details of the program are announced on March 4, 2009.

10. What should I do in the meantime?

You should gather the information that you will need to provide to your lender after March 4, when the refinance program becomes available. This includes:

· information about the gross monthly income of all borrowers, including your most recent pay stubs if you receive them or documentation of income you receive from other sources

· your most recent income tax return

· information about any second mortgage on the house

· payments on each of your credit cards if you are carrying balances from month to month, and

· payments on other loans such as student loans and car loans.

Borrowers Who Are at Risk of Foreclosure Are Asking:

1. What help is available for borrowers who are at risk of foreclosure either because they are behind on their mortgage or are struggling to make the payments?

The Homeowner Affordability and Stability Plan offers help to borrowers who are already behind on their mortgage payments or who are struggling to keep their loans current. By providing mortgage lenders with financial incentives to modify existing first mortgages, the Treasury hopes to help as many as 3 to 4 million homeowners avoid foreclosure regardless of who owns or services the mortgage.

2. Do I need to be behind on my mortgage payments to be eligible for a modification?

No. Borrowers who are struggling to stay current on their mortgage payments may be eligible if their income is not sufficient to continue to make their mortgage payments and they are at risk of imminent default. This may be due to several factors, such as a loss of income, a significant increase in expenses, or an interest rate that will reset to an unaffordable level.

3. How do I know if I qualify for a payment reduction under the Homeowner Affordability and Stability Plan?

In general, you may qualify for a mortgage modification if (a) you occupy your house as your primary residence; (b) your monthly mortgage payment is greater than 31% of your monthly gross income; and (c) your loan is not large enough to exceed current Fannie Mae and Freddie Mac loan limits. Final eligibility will be determined by your mortgage lender based on your financial situation and detailed guidelines that will be available on March 4, 2009.

4. I do not live in the house that secures the mortgage I’d like to modify. Is this mortgage eligible for the Homeowner Affordability and Stability Plan?

No. For example, if you own a house that you use as a vacation home or that you rent out to tenants, the mortgage on that house is not eligible. If you used to live in the home but you moved out, the mortgage is not eligible. Only the mortgage on your primary residence is eligible. The mortgage lender will check to see if the dwelling is your primary residence.

5. I have a mortgage on a duplex. I live in one unit and rent the other. Will I still be eligible?

Yes. Mortgages on 2, 3 and 4 unit properties are eligible as long as you live in one unit as your primary residence.

6. I have two mortgages. Will the Homeowner Affordability and Stability Plan reduce the payments on both?

Only the first mortgage is eligible for a modification.

7. I owe more than my house is worth. Will the Homeowner Affordability and Stability Plan reduce what I owe?

The primary objective of the Homeowner Affordability and Stability Plan is to help borrowers avoid foreclosure by modifying troubled loans to achieve a payment the borrower can afford. Lenders are likely to lower payments mainly by reducing loan interest rates. However, the program offers incentives for principal reductions and at your lender’s discretion modifications may include upfront reductions of loan principal.

8. I heard the government was providing a financial incentive to borrowers. Is that true?

Yes. To encourage borrowers who work hard to retain homeownership, the Homeowner Affordability and Stability Plan provides incentive payments as a borrower makes timely payments on the modified loan. The incentive will accrue on a monthly basis and will be applied directly to reduce your mortgage debt. Borrowers who pay on time for five years can have up to $5,000 applied to reduce their debt by the end of that period.

9. How much will a modification cost me?

There is no cost to borrowers for a modification under the Homeowner Affordability and Stability Plan. If you wish to get assistance from a HUD-approved housing counseling agency or are referred to a counselor as a condition of the modification, you will not be charged a fee. Borrowers should beware of any organization that attempts to charge a fee for housing counseling or modification of a delinquent loan, especially if they require a fee in advance.

10. Is my lender required to modify my loan?

No. Mortgage lenders participate in the program on a voluntary basis and loans are evaluated for modification on a case-by-case basis. But the government is offering substantial incentives and it is expected that most major lenders will participate.

11. I’m already working with my lender / housing counselor on a loan workout. Can I still be considered for the Homeowner Affordability and Stability Plan?

Ask your lender or counselor to be considered under the Homeowner Affordability and Stability Plan.

12. How do I apply for a modification under the Homeowner Affordability and Stability Plan?

You may not need to do anything at this time. Most mortgage lenders will evaluate loans in their portfolio to identify borrowers who may meet the eligibility criteria. After March 4 they will send letters to potentially eligible homeowners, a process that may take several weeks. If you think you qualify for a modification and do not receive a letter within several weeks, contact your mortgage servicer or a HUD-approved housing counselor. Please be aware that servicers and counseling agencies are expected to receive an extraordinary number of calls about this program.

13. What should I do in the meantime?

You should gather the information that you will need to provide to your lender on or after March 4, when the modification program becomes available. This includes

· information about the monthly gross income of your household including recent pay stubs if you receive them or documentation of income you receive from other sources

· your most recent income tax return

· information about any second mortgage on the house

· payments on each of your credit cards if you are carrying balances from month to month, and

· payments on other loans such as student loans and car loans.

14. My loan is scheduled for foreclosure soon. What should I do?

Contact your mortgage servicer or credit counselor. Many mortgage lenders have expressed their intention to postpone foreclosure sales on all mortgages that may qualify for the modification in order to allow sufficient time to evaluate the borrower’s eligibility. We support this effort.

By John W. Schoen

The White House is considering a proposal to head off potentially millions more home foreclosures by using federal funds to buy up at-risk loans and then refinance them with more affordable terms.

Treasury Secretary Timothy Geithner and other Obama administration officials met Wednesday with a group of top bankers, community groups and financial industry representatives to discuss the plan.

So far, government efforts to prevent foreclosures have focused on pressing the lending industry to work with at-risk homeowners voluntarily and provide them with more affordable payment terms. But the new proposal signals a shift to a more direct government approach, according to John Taylor, president of the National Community Reinvestment Coalition, who attended the meeting with Geithner, Housing and Urban Development Secretary Shaun Donovan and other Obama administration officials.

“What they heard from all segments of the industry is nearly universal support for going in and purchasing these loans,” said Taylor.

The proposal is one of several being discussed as the White House completes the details of its comprehensive plan to stabilize the financial system and limit a wave of new foreclosures expected over the next few years. Others include legislation to speed up loan modifications and efforts to make new mortgages more affordable.

Under the proposal, the government would draw on $50 billion in funds already approved for the financial bailout to buy up millions of mortgages at a discount. A $300,000 mortgage on a house now worth $200,000, for example, might be bought at a 30 percent discount.

The homeowner then would be able to refinance the smaller mortgage with lower monthly payments. The government could then sell the loan back to investors, freeing money to buy more loans.

The new approach could eliminate one of the biggest roadblocks that has stymied the government efforts to buy up so-called “toxic assets” that are clogging the financial system. Trading in these securities — backed by thousands of loans — has all but shut down because banks, investors and potential buyers are unable to predict their future value. But individual loans are much easier to value, making government purchases more practical, according to the plan’s proponents.

Taylor estimates that of the roughly 10 million to 12 million households facing foreclosure over the four years, about 4 million to 5 million would be able to keep their homes. The plan would also help clear distressed mortgages from the financial system and free up more lending, said Taylor.

“These investors have suffered this loss — they just haven’t realized it yet,” he said. “It’s an unrealized loss that the government takes and then converts it into a gain for millions of homeowners.”

White House officials this week stressed the urgency of acting to shore up the nation’s banking system to avert a potential “catastrophe.”  But slowing the pace of foreclosures is essential to reducing the glut of homes on the market and resolving the crisis, according to Columbia University economics professor Christopher Mayer.

“We’ve got to deal with housing,” he said, ”because, look, if housing drops another 20 to 25 percent, I can promise you a lot more of these mortgages are going bad, and we’re going to have a much bigger problem.”

Some 275,000 foreclosure filings were reported in January — or about one in 466 households — an 18 percent increase over January 2008, according to data released by RealtyTrac Thursday. The pace slowed 10 percent from December, largely because of a temporary freeze on new foreclosure filings by several states and mortgage giants Fannie Mae and Freddie Mac, RealtyTrac reported.

On Wednesday, the Office of Thrift Supervision urged lenders under its regulation to suspend foreclosures on owner-occupied homes until the White House completes its mortgage relief program. As of the third quarter of 2008, the roughly 800 lenders regulated by the office had an outstanding mortgage portfolio of more than a half-trillion dollars.

To date, industry efforts to halt the pace of foreclosures have proved inadequate. In congressional testimony Wednesday, CEOs of the nation’s top banks told of hundreds of thousands of loans modified to date.

But according to the Office of the Comptroller of the Currency, more than half of the 287,755 mortgage workouts in the third quarter of 2008 involved repayment plans that, in many cases, increased the monthly cost of the loan to make up for missed payments. That’s one reason more than half of borrowers who had worked out new mortgage terms redefault within six months, according to the OCC, which regulates nationally charted banks.

As the housing market has collapsed, roughly one in five homeowners now owe more on their mortgage than their house is worth. That’s created one of the thorniest problems in the debate over foreclosure relief: Who should bear the loss when a mortgage is bigger than a home’s value? Various proposals have been floated, including having the government share some of the loss in return for a stake in the possible appreciation of the home after it’s refinanced.

Until recently, the hardest-hit were borrowers who were sold loans with low “teaser” interest rates that later reset to unaffordable levels. As the recession has deepened, the rapid pace of job losses has put millions more homeowners at risk.

For the past two years, Congress has considered a number of proposals to try to keep struggling homeowners in their homes. Much of the debate has centered on how much taxpayer money — if any — should be applied to the problem. That debate continues to slow progress on adopting these proposals.

“I think there are a whole variety of plans on the table, and there’s no consensus,” said Paul McCulley, a portfolio manager at PIMCO, a large bond fund. “We also have to remember this is in a political context: The taxpayer is truly ticked off about this whole thing. Congress has to consider that as well.”

But some longstanding proposals are advancing slowly through Congress.

One of those provisions would overhaul the Hope for Homeowners program Congress set up last year with the goal of helping more than 400,000 homeowners swap unaffordable adjustable mortgages for 30-year loans with fixed rates. Tight restrictions and high fees left that program out of reach for all but 25 homeowners who have been approved to date.

The House bill also attempted to break the logjam at the heart of the problem with mortgage modifications: the enormous legal complexity created when trillions of dollars worth of mortgages were bundled into pools and sold off to investors. Loan servicing companies — originally hired to collect payments from homeowners and distribute them to investors — have been slow to respond to modification requests, in part because they fear being sued by investors.

Under a program overseen by Federal Deposit Insurance Corp. Chairwoman Sheila Bair, standard guidelines were developed to speed the modification of mortgages held by the failed IndyMac Bank, which the government seized last year. Bair has proposed expanding that program, which would provide financial incentives to servicers to modify loans and give them legal protection if they follow certain guidelines.

Both the Treasury and the Federal Reserve have been exploring ways to make mortgages more affordable to help stimulate demand for housing. A provision in the economic stimulus package provides tax credits to some home buyers.

By far the most controversial proposal to break the loan modification logjam would change bankruptcy law to allow judges to modify loans from the bench — as they’re able to do for all other forms of consumer debt. This so-called “cramdown” idea has been floated several times since the crisis began but has been vigorously opposed by the financial services industry.

Lenders argue they would have to charge higher rates to offset the increased risk that a judge would forgive part of a loan in bankruptcy court. Proponents counter that the risk is no higher than for any other form of secured credit subject to modification, and that any increased borrowing cost would be relatively small.

But the proposal is getting another look. On Tuesday, Geithner told Congress changes in the bankruptcy law “will be an important part of the president’s plan."

“At that same time, we want to do it very, very carefully,” Geithner testified, “because this is a delicate situation, complicated balance. And we want to make sure we’re not making the process worse as we go forward.”

URL: http://www.msnbc.msn.com/id/29146768/page/2/

by John P. Allen

Many Military Veterans have adjustable subprime mortgages and are now desperately seeking solutions to their increased payments.  I take phone calls all day long from Veterans that say stuff like “I am Scared” “What a Mess I Got Myself Into” and “What an Expensive Lesson I Just Learned – Never Again.”

The great help the lenders claim to be offering the troubled borrower does not appear to be what the borrower is actually getting. When borrowers attempt to modify their loans they are met with resistance from poorly informed “loan modification departments.” While help from the government seems promising, nothing tangible has been passed yet in the congress that provides relief and there’s not much on the horizon yet.

There are now hundreds of thousands of Veterans with home loans whose monthly payments are about to rise over the next eighteen months?

If you have found yourself facing a mortgage payment you cannot afford, and are contemplating asking your lender for a loan modification, you must know the economic reality. Lenders and their investors are only concerned with profitability. That is, they base their decisions solely on monetary return. They want to see that modifying the loan will be more profitable than foreclosing on the subject property. The lenders want to know you can make the modified monthly payment without fail.

Because the majority of borrowers who are faced with unaffordable payments are victims of teaser rates becoming expired, the modified payment will be higher than the teaser rate. This means that if the borrower could barely afford the teaser payment, there is little chance of paying a higher amount, no matter how small the increase. For borrowers with the ability to slash their living expenses, do without an extra automobile or cell phone, and come up with extra money for the mortgage payment, the lender may be willing to accept less than the full increase in payment. The borrowers with the ability to pay close to what the lender requires are the ones most likely to get a loan modification.

All economic indicators project that for many subprime borrowers with adjustable rate mortgages, default will eventually occur. Capitalistic wisdom should dictate that financial institutions will cut their losses now and not want to be taken down in the spiral as real estate values plummet over the months to come. The lenders knew that the subprime loans were made to high risk borrowers, but they took the risk. Now that they are faced with defaults on their investments, they may be willing to lose some profit to avoid further loss.

So for those Veterans who are pursuing a negotiation for loan modification with their lender, here are my suggestions:

1. LEARN YOUR LENDER POLICIES

Become knowledgeable and familiar with your lender’s loan modification policies. For rate modifications, know if the lender will accept an application before the rate becomes adjustable or increases. Some lenders require a borrower to be delinquent for at least three months before they even accept an application for loan modification. Lenders often have different policies for borrowers who can no longer pay due to job loss or health issues.

2. GET YOUR LENDERS LOAN MODIFICATION PACKAGE BEFORE YOU START NEGOTIATING

Before calling and giving all your information, ask for a written loan modification package from your lender. If they are willing to send you an application, you will see what information they need and what their policies are. You will then have time to reflect on your answers and not be pressured into answering over the telephone. Additionally, when lenders have their own unique forms, any applications which are not submitted on those forms will fall to the bottom of the pile and face delay in processing.

3. KEEP YOUR COOL

Keep in mind that you are dealing with a department staffed with people who are swamped with calls from irate borrowers, each with the same sad story. These employees become callous to the plights of the borrowers. Furthermore, their employer, the lender, changes the policies and procedures almost daily. In addition, the employees are worried that they will lose their jobs when the lender makes additional job cuts. They may be calling their own mortgage company’s loan modification department next week. You are stressed, and so is the person on the other end of the telephone.

4. DOCUMENT EVERY COMMUNICATION MADE

Keep a log of every telephone call or letter made, and every telephone call or letter received. Include emails and faxes in your log. Make certain that your log contains dates, times, names, and titles. This information may be necessary to document what has been promised by the lender.

5. CREATE AN ACCURATE AND DETAILED EXPENSE REPORT

Lenders base their decisions on your monthly budget which includes your income and expenses. They are not interested in your hardship story, only in learning whether the hardship is over. They are interested in knowing exactly how you are going to make your monthly payments. They want to see a sensible, realistic, and reasonable monthly budget. For example:

a. If you are applying for a rate modification, your lender will want to see that you have a negative residual income. This shows that you cannot afford a rate increase. You will also need to that you have discharged all possible expenses that are considered “excess” or “luxury living.” You must provide evidence that you have done all you can to lower your monthly expenses. They do not want to see expenses for multiple cell phones, premium cable television, designer clothes, or extravagant dining and entertainment expenses. They want to see that your car payment matches a frugal lifestyle, meaning you do not drive a new Hummer.

b. A string applicant will have a monthly budget with a residual income about 25% greater than the monthly mortgage payment. This means that if your mortgage payment is $2,000 per month, you have an income of $2,500. These numbers must be verified by your bank statement or other documentation.

c. If you lose your source of income due to unemployment or medical reasons, the lender will want to know whether such loss is permanent or temporary. If temporary, the lender will need to be assured that your income will return in the near future. A permanent loss of income will result in denial of your loan modification.

6. HAVE A GOOD FAITH DEPOSIT

I saved this point for last, because most borrowers do not understand its importance, and I want to make sure that it gets attention. Imagine being the lender and a borrower who has missed several months of payments calls you. That borrower tells you that he has not been able to make any payments because the adjustable rate kicked in and the payment was too high. This borrower filled out all the application forms and has begged for a loan modification. The borrower has explained that he can pay a certain amount, but not the whole amount. You immediately think to yourself, “Well then, why has this borrower not made any payment at all?” More to the point, you wonder what this borrower has done with the money he would have used to make the mortgage payments had the rate not increased. Can you see the problem here? This borrower better have the mortgage payments in his savings account and be ready to tender that amount to the lender as a good faith deposit. Failure to do so will likely result in a denial of the loan modification.

In summary, lenders will modify loans only if the borrower can convince them that it is in the lender’s best financial interest to do so. That is what they want to see. They want to be assured that, no matter what, you want to keep your home and will do everything you can to make your payments.

Loan Forensic Audits: How To Legally Get Out Of Your Bad Loan

by John P. Allen, General Manager of the Veterans Today Network

Leverage!  Remember that buzz word!  You see when Veterans look for a mortgage, whether it be a VA Home Loan, FHA, or conventional, they rely on professional advice and the aid of a mortgage broker or lender. The loan process is complicated and most everyone places their trust in the professional that is guiding them through the process.

Unfortunately, many of these professionals placed thousands and thousands of borrowers in loans that they could not afford or in just down right exotic mortgages, that now have become extinct.

Predatory lending is a buzz word that is floating around the blogosphere right now and for good reason. There are thousands and quite possibly maybe a million plus people that have mortgages where the Truth in Lending Act was violated, thus falling under the predatory lending statue. Many can stop foreclosure if they only knew what to look for and how to defend themselves.

LOAN AUDIT DOCUMENT
This report is a very specialized and imperative in identifying if a borrower is a victim of predatory lending. A professional review is made of all loan documents and a thorough investigation for miscalculations are made to determine if the loan terms are accurate, truthful, and met the requirements of the applicable federal statutes.

The # 1 goal is to determine whether there were violations of federal law. If these violations are found, then the borrower may be eligible for complete relief of the predatory loan. This is known as a loan rescission. Meaning the lender takes back the "predatory loan" and awards or credits back to the borrower all interest made on payments thus far, loan origination fees, all applicable lenders fees, penalties and attorney’s fees.

This can be done by means of a Loan modification or a new affordable loan. This allows the borrower to get a new loan with a smaller principle, meaning that the mortgage can be affordable and non-predatory.

FORENSIC LOAN DOCUMENT AUDIT
What is contained in a Forensic Audit?

• A complete client interview is made and all applicable parties are interviewed
• A complete loan document and disclosure audit using the Truth in Lending Act (TILA) and Real Estate Settlement & Procedures Act (RESPA)
• A reverse engineering of your loan terms and Annual Percentage Rate (APR) for possible TILA violations are made
• A complete multi page report is made with all violations and findings and a summary that is accepted by the courts

CONSTRUCTIVE FRAUD
Material facts include the terms of the loan, whether there is a prepayment penalty, or any other information which a reasonable borrower would want to know before accepting the loan. Did the broker or loan officer or anyone working for the broker or loan officer fail to disclose any material facts to the borrower?

FRAUD AND NEGLIGENT MISREPRESENTATION
Were any representations, statements, or comments, written or oral made by the loan officer, broker, notary or anyone else which contradicted the terms of the documents?

NEGLIGENT MISREPRESENTATION
When a mortgage professional makes errors which a reasonably diligent mortgage professional would not have made, he or she may have made a negligent misrepresentation.

BREACH OF CONTRACT
The note and its attachments are a contract. The broker must follow all the terms of the contract such as the way the interest is calculated, and the penalties it assesses. Were there any terms in the contract which the lender failed to follow?

All of these things above can be found by taking the time and effort to do a FORENSIC AUDIT of your loan. With this information, it’s like having a loaded gun. It gives you leverage in the negotiations. You don’t have to fire, you just have to politely point it as the assailant and ask them nicely to rethink their hard line.  In the lending business, most people at the lenders are just employees doing their jobs. It’s not a personal thing or some fanatical reason they are not talking to you.  No, it’s just that are simply doing what makes profits for their employers.  The only way to get anywhere with them is to use leverage!

So, the key is to raise the cost of them NOT negotiating with you by getting a Forensic Loan Audit and bringing it to their attention and then start negotiation.  It’s that simple!

John P Allen is General Manager of the Veterans Today Network.  He is an experienced professioanal negotiator and teacher.  He has a B.A. in Finance from California State Unversity at Fullerton.  He has been counseling Veterans for over 25 years on financial issues and helps Veterans get Loan Modifications.  He can be reached via email at gm@veteranstoday.com or by phone at 1(619) 819-9360

 

Veterans with Hardships Get Help on their Home Loans with Loan Modification

by Jerred Bulstrom, USMC

Recently, in the media, you may have heard the phrase "Loan Modification" and it sounded intriguing.  But what is it and can it benefit you and your family.

Loan Modification is arguably the most effective tool you can use if you are behind on your mortgage and in midst of a financial hardship to save your home from entering foreclosure. With a loan modification, the mortgage loan is restructured so that it is affordable and can fit comfortably into your budget rather than being an overwhelming monthly drain on already tight finances.

Loan modification agreements come in different forms but quite frequently they involve the reduction of mortgage’s interest rate for a specified period of time so the homeowner can continue to make payments and stay in the home. Loans can also be modified so they have a longer amortization term (e.g. 40 year instead of 30 year) which will cause the payments to decrease.  In addition, principal writedowns can be obtained and are more common now, especially in this very rough market. The lenders are now willing write off some of your principal to keep you in the home.  Why?  Because, it’s stil less expensive for them to work with you than to take back the home and if writing off some of the principal will make it work, then they do it.

But what is the lenders incentive to work with you?  Why do the banks want to renegotiate with you?  What leverage do you have?

Well, that’s a great question.  The short answer is that they will NOT negotiate with you until you have real leverage.  Not the bluffing kind that you hear about but real genuine leverage that forces them to the table to renegotiate.

In most cases, the real leverage is that you have a true hardship that is causing you to be unable to meet the original terms of the loan agreement and its’ forcing your hand. 

In addition, professional forensic audits can also bring you leverage. 

Audits find errors and omissions or even, and now more common, fraud committed by one one or more of the vendors who were involved in the origination of the loan causing the loan to be placed in "hey this needs to go to court" status which is a the worst thing a lender wants to hear.  Why?  If a lender truly believes that a fraud may have been committed, they know that they will lose massive amounts of money and lost revenue while you get to stop making payments and stay in the house while the court drags on for months and months – many cases years.  In other words, its costly to them and that gives you even more leverage to say "hey, let’s talk about this".

The point of this article is that loan modification is a real tool for you to use to put yourself back in the game.  And it could be for you.

For U.S. Veterans, the type of loan you have, whether it be a current VA Home Loan, FHA, Conventional or other, will define your best strategy on how to structure your game plan and making it happen.

So if you love your home and know you can afford it, but the current mortgage is threatening a loss of both home and good credit, contact me and I will listen and then counsel on what is the best strategy for you to get it going now! 

Working with lenders can be a real pain, I know.  But their is help out there for you now. 

Click to learn more about Loan Modification

ABOUT THE AUTHOR: Jerred Bulstrom is a loan modification specialist with the Veterans Today Network and VA Home Loans Today.  He served in both the U.S. Amry and United States Marine Corp based at Camp Pendleton serving combat duty in Iraq.  He can be reached via email at jerred@veteranstoday.com or by phone at 1 (619) 819-9360

MCLEAN, Va. – VA Mortgage rates are falling as this week’s dramatic action by the Federal Reserve provides a boost to the dismal housing market, but the nation’s unemployment rolls are stuck at historically high levels amid a deepening recession.  Jason Jabloski with Equity VA Loan says "rates are the lowest I have seen in my 25 years in this business".

Mortgage giant Freddie Mac on Thursday reported that rates had fallen to the lowest level on records dating back to 1971. Average rates on 30-year fixed-rate mortgages dropped to 5.19 percent, down from the year’s previous low of 5.47 percent, set last week.

Jobs data from the government, while better than expected, was still sobering. The Labor Department on Thursday said its tally of initial jobless benefit claims fell to a seasonally adjusted 554,000 from an upwardly revised figure of 575,000 the previous week. The new tally was slightly below economists’ expectations of 558,000 claims.

Another slight improvement was seen in the number of people who continue to receive jobless benefits, which declined to 4.38 million from 4.43 million the previous week. Economists expected a slight increase to 4.45 million.

Still, claims remain near the highest level since 1982, though the labor force has grown by about half since then.

The cuts continue
And the cuts continue. Water treatment and storage systems maker Pentair Inc. said Thursday that it will cut more than 10 percent of its work force, or about 1,600 jobs, due to a faster-than-expected drop-off in demand and consumer spending. One day earlier, hard drive maker Western Digital Corp., managed-care company Aetna Inc., and Newell Rubbermaid Inc., maker of products including Rubbermaid storage containers and Sharpie pens, announced mass job cuts.

Meanwhile, President-elect Barack Obama is laying the groundwork for a giant economic stimulus package, worth possibly $850 billion over two years, which Democratic congressional leaders say could be passed within two weeks of Obama taking office.

The Federal Reserve, aiming to free up lending and jolt the economy back to life, on Tuesday cut the federal funds rate from 1 percent to a target range of zero to 0.25 percent and pledged to keep funneling money into the market for mortgage investments.

On Wednesday, some mortgage brokers were quoting mortgage rates of close to 4.5 percent for people with strong credit and hefty down payments.

"This is beautiful, oh my gosh!" said Patti Mazzara, a mortgage broker in the Minneapolis suburb of Edina, who was surprised when she looked up rates and found them well below 5 percent, down at least three-quarters of a percentage point from earlier in the week. "This is a whole new game now. Hopefully it’s going to give people some relief."

The national average rate on 30-year, fixed mortgages was 5.06 percent on Wednesday, according to financial publisher HSH Associates — the lowest since the 1960s and down from 5.3 percent Tuesday.

It was the best news in months for anyone looking to lock in a 30-year, fixed-rate mortgage. But it was not expected to be a cure-all, and borrowers already in danger of foreclosure probably won’t be able to take advantage.

"It’s a call to action for homeowners looking to get out of adjustable-rate mortgages," said Greg McBride, senior financial analyst at Bankrate.com. "Unfortunately, it’s not an equal-opportunity party."

Falling interest rates mean Americans could suddenly find billions of extra dollars in their pockets at a time when consumers have sharply cut back on spending amid rising unemployment and declining household wealth. But many experts believe that the interest rate cuts alone won’t be enough to jump-start the economy.

"It’s a tall order to get (people) to go out and spend again," said Joseph LaVorgna, chief U.S. economist at Deutsche Bank. "That’s why you also need a stimulus."

The New York-based Conference Board’s index of leading economic indicators for November fell 0.4 percent, which was slightly better than the 0.5 percent decline economists expected. The index, which posted a 0.9 percent decline in October, is designed to forecast economic activity in the next three to six months based on 10 economic components, including stock prices, building permits and initial claims for unemployment benefits.

Also Thursday, President-elect Barack Obama named a veteran of the Securities and Exchange Commission to lead the agency as it faces growing criticism for its failure to protect investors and detect trouble on Wall Street.

Mary Schapiro, who currently heads a nongovernment regulatory group for securities firms, is also a former head of the Commodity Futures Trading Commission and former member of the SEC. She has been appointed to government posts by two Republican presidents and one Democratic chief executive.

VA Home Loan Mortgage rates at lowest level since January

Average now 5.49 percent — and further cuts could be on the way

by Ezell Johnson

WASHINGTON – Rates on 30-year VA Home Mortgages plunged this week to the lowest level since January after the government launched a sweeping new effort to aid the U.S. housing market.

Average rates on 30-year fixed-rate mortgages dropped to 5.49 percent in the largest one-week drop in 27 years. That was down from 5.97 percent last week, and the lowest since the week of Jan. 24, when it was at 5.48 percent.

Further drops could be on the way if the government launches an industry-backed plan to lower the rate on a 30-year mortgage to 4.5 percent by spending hundreds of billions to buy mortgage-backed securities.

That would follow an effort announced last week by the Federal Reserve, which is planning to purchase up to $600 billion of mortgage-backed securities and other debt issued by Fannie and Freddie and the Federal Home Loan Banks. Those institutions don’t make loans directly to consumers, but provide money to the mortgage market by packaging loans into investments.

The Fed’s move caused rates to immediately drop by about a half-point, and many in the real estate industry hope rates will keep dropping as the government increases efforts to battle the credit crisis.

Rates “are now almost a full percentage point lower since the last week in October,” Freddie Mac Chief Economist Frank Nothaft said in a statement.

Bringing mortgage rates down is positive, but it “doesn’t help people that currently have unaffordable mortgages because it doesn’t help them refinance,” Sheila Bair, chairman of the Federal Deposit Insurance Corp., said Thursday. “Low interest rates help some consumers, but the ones that really need help and can’t refinance are not helped.”

"The VA Interest Rate Market is also following the downward path of FHA and Conventional Loan financing" says John P. Allen, VA Loan Specialist at Equity VA Loan. "If this continues, these times will see the lowest rates ever in my lifetime."

Meanwhile, Federal Reserve Chairman Ben Bernanke said the government can take steps to improve the functioning of the mortgage market, which would allow more people to secure home loans and help stabilize the housing market. Currently, he said, “the mortgage market is dysfunctional.”

Mortgage rates are sinking as Treasury yields, some of the most sensitive barometers of investor sentiment, have dropped to record lows this week as a torrent of bad economic news continues. But as investors send yields down, they’re also influencing the economy — driving interest rates so low that savers get punished and borrowers get a break.

Treasury buying has picked up and sent yields down because the economy is in a recession that investors believe will be long and deep.

Consumers already are taking advantage of the situation. New mortgage applications more than doubled last week, according to the Mortgage Bankers Association’s weekly survey released Wednesday. Refinance volume more than tripled, and made up nearly 70 percent of all applications.

Rates on other types of mortgages also fell, according to Freddie Mac’s survey. For 15-year, fixed-rate mortgages, rates averaged 5.33 percent, down from 5.74 percent last week.

Rates on five-year, adjustable-rate mortgages dipped to 5.77 percent, compared with 5.86 percent last week. Rates on one-year, adjustable-rate mortgages dropped to 5.02 percent, from 5.18 percent last week.

The rates do not include add-on fees known as points. The nationwide fee for 30-year and 15-year mortgages averaged 0.7 point last week. The fee on five-year, adjustable-rate mortgages averaged 0.6 point, while the fee on one-year adjustable-rate mortgages averaged 0.5 point.

A year ago, the nationwide average rate on 30-year mortgages stood at 5.96 percent, 15-year mortgage rates averaged 5.65 percent, five-year adjustable-rate mortgages were at 5.75 percent, and one-year adjustable-rate mortgages stood at 5.46 percent.

The rate on Fannie Mae 30-year mortgage-backed securities fell to about 4.25 percent Thursday, said Kevin Giddis, managing director of fixed income at Morgan Keegan. That is down from about 5.5 percent in mid-November.

Fears of a protracted recession are slamming Treasury yield, which is good for borrowers with mortgage rates tied to Treasurys, but bad for people invested in money market funds that have been buying up Treasurys for safety.

In the final analysis, the VA Mortgage Market is outstanding now for new borrowers getting in.  Combined with low rates, lower housing prices, and the price of gasoline dropping to what some say could be $ 1 per gallon by summer of 2009, well, looks like we are all in for a turnaround and Veterans will be the beneficiaries.

WASHINGTON — Veterans with conventional home loans now have new options for refinancing to a Department of Veterans Affairs (VA) guaranteed home loan.  These new options are available as a result of the Veterans’ Benefits Improvement Act of 2008, which the President signed into law on October 10, 2008.

“These changes will allow VA to assist a substantial number of veterans with subprime mortgages refinance into a safer, more affordable, VA guaranteed loan,” said Secretary of Veterans Affairs Dr. James B. Peake.  “Veterans in financial distress due to high rate subprime mortgages are potentially the greatest beneficiaries.”

VA has never guaranteed subprime loans.  However, as a result of the new law VA can now help many more veterans who currently have subprime loans.

The new law makes changes to VA’s home loan refinancing program.  Veterans who wish to refinance their subprime or conventional mortgage may now do so for up to 100 percent of the value of the property.  These types of loans were previously limited to 90 percent of the value.

Additionally, Congress raised VA’s maximum loan amount for these types of refinancing loans.  Previously, these refinancing loans were capped at $144,000.  With the new legislation, such loans may be made up to $729,750 depending on where the property is located.

Increasing the loan-to-value ratio and raising the maximum loan amount will allow more qualified veterans to refinance through VA, allowing for savings on interest costs or even potentially avoiding foreclosure.

Originally set to expire at the end of this month, VA’s authority to guaranty Adjustable Rate Mortgages (ARMs) and Hybrid ARMs was also extended under this new law through September 30, 2012.  Unlike conventional ARMs and hybrid ARMs, VA limits interest rate increases on these loans from year to year, as well as over the life of the loans.

Since 1944, when home loan guaranties were offered with the original GI Bill, VA has guaranteed more than 18 million home loans worth over $911 billion.  This year, about 180,000 veterans, active duty servicemembers, and survivors received loans valued at about $36 billion.

For more information, or to obtain help from a VA Loan Specialist, veterans may call 1-619-819-9360 or visit www.va-home-loans-today.com

1. Authority to guarantee adjustable rate mortgages (ARMs) and hybrid adjustable rate mortgages (HARMs) has been extended through September 30, 2012.

2. The maximum guaranty for cash-out refinance loans has been made the same as purchase loans – they are no longer limited to $36,000. In addition, cash-out refinance loans may now be made up to 100% of the appraised value of the home.

3. The temporary increase to the maximum guaranty has been extended through December 31, 2011. When combined with new locality-based Freddie Mac conforming loan limit in January 2009, VA’s maximum county “loan limit” will be $1,094,625 ($1,641,937.50 in Alaska, Guam, Hawaii, and the Virgin Islands). This results in unique county "loan limits" for VA.

This notice below is meant to provide general information regarding the major impacts of the recently passed legislation.

Veterans Benefits Administration Circular 26-08-19
Department of Veterans Affairs

Washington, D.C. 20420

IMPLEMENTATION OF LOAN GUARANTY PROVISIONS OF PUBLIC LAW 110-389

1. PURPOSE: On October 10, 2008, the President signed Public Law 110-389, the Veterans’ Benefits Improvement Act of 2008. This circular addresses the changes to VA’s Loan Guaranty Program that were included in that law.

2. EXTENSION OF ADJUSTABLE RATE MORTGAGE AUTHORITY: VA’s authority to guarantee adjustable rate mortgages (ARMs) and hybrid adjustable rate mortgages (HARMs) was scheduled to expire on September 30, 2008. Section 505 of Public Law 110-389 extended this authority through September 30, 2012. All VA program requirements related to ARMs and HARMs remain in effect.

3. ENHANCEMENT OF REGULAR REFINANCING LOANS: Section 504 of Public Law 110-389 made changes to VA’s regular (“cash-out”) refinancing loans. Effective immediately, the maximum guaranty amount for regular refinancing loans is the same as the maximum guaranty amount for purchase loans. Regular refinancing loans are now available for up to 100 percent of the appraised value of a home, which is an increase from VA’s previous threshold of 90 percent. All other VA program requirements for regular refinancing loans remain the same.

4. GUARANTY AMOUNTS: Section 501 of Public Law 110-389 provides a temporary increase in the maximum guaranty amount for loans closed January 1, 2009, through December 31, 2011. During this period, the “maximum guaranty amount” set forth in this circular should be substituted for the maximum guaranty amount specified at 38 U.S.C. 3703(a)(1)(C), 38 CFR §§ 36.4302(a)(4) and 36.4802(a)(4), and in the VA Lender’s Handbook. Please note that, if a veteran has previously used entitlement that has not been restored, the guaranty amount for that veteran must be reduced accordingly.

a. Loans for $417,000 or Less Are Unaffected: The guaranty amount for loans where the original principal loan amount is $417,000 or less remain unchanged. On these loans, VA will continue to guarantee the amounts specified at 38 U.S.C. 3703(a)(1) and the VA Lender’s Handbook.
b. Loans for More Than $417,000: If the original principal loan amount is greater than $417,000, VA will guarantee 25 percent of the original principal loan amount, up to the maximum guaranty amount. The maximum guaranty amount varies depending upon the location of the property.

(1) For all locations in the United States other than Alaska, Guam, Hawaii, and the U.S. Virgin Islands, the maximum guaranty amount is the greater of 25 percent of (a) $417,000 or (b) 125 percent of the area median price for a single-family residence, but in no case will the guaranty exceed 175 percent of the Freddie Mac loan limit for a single family residence in the county in which the property securing the loan is located. This translates to a potential maximum loan amount of $1,094,625.

(2) In Alaska, Guam, Hawaii, and the U.S. Virgin Islands, the maximum guaranty amount is the greater of 25 percent of (a) $625,500 or (b) 125 percent of the area median price for a single-family residence, but in no case will the guaranty exceed 175 percent of the Freddie Mac loan limit for a single family residence in the county in which the property securing the loan is located. This translates to a potential maximum loan amount of $1,641,937.50.

c. Annual Adjustments: The maximum guaranty amounts set forth above will be adjusted annually. The first adjustment will affect loans closed on or after January 1, 2010.

5. CALCULATING THE MAXIMUM GUARANTY FOR LOANS OVER $417,000: The applicable maximum guaranty amount may be calculated using data available online from the Federal Housing Administration (FHA). To calculate the maximum guaranty amount for a particular property:

a. go to www.fhaoutreach.com;
b. scroll to the bottom of the page;
c. select the state where the property is located;
d. type the name of the county where the property is located in the box labeled “County”;
e. click “Submit”; and,
f. multiply the resulting “Median Price” for the appropriate county by 1.25.
g. If the resulting figure is:

(1) less than $417,000, use $417,000 to calculate the maximum guaranty amount;

(2) greater than $417,000, but less than $1,094,625 (or $1,641,937.50 in Alaska, Guam, Hawaii, and the U.S. Virgin Islands), use the result to calculate the maximum guaranty amount; or,

(3) greater than $1,094,625 (or $1,641,937.50) use $1,094,625 (or $1,641,937.50) to calculate the maximum guaranty amount.

6. RESCISSIONS

a. Effective immediately, Circulars 26-08-15 and 26-08-16 are rescinded.
b. This circular is automatically rescinded January 1, 2010.

by Carla Douglin
 
More and more military families are finding themselves in the middle of a mortgage nightmare. Soldiers are returning after several tours of duty, only to find they are on the verge of losing their homes. While trying to rebuild their lives, they face the additional pressure and stress of a looming foreclosure.

According to one recent study, the number of foreclosures in military towns are four times the national average. Why? Because military families were targeted as customers during the boom in subprime lending. Their frequent moves, overseas stints, and low pay meant they were likely to have weak credit ratings. The initial low rates and easy terms of these loans made them more attractive than the traditional route of taking out a Veterans Administration (VA) loan. In fact, at the peak of the U.S. subprime lending, the number of new VA loans fell to their lowest level in 12 years.

With that in mind, it is not surprising that a large number of military families are being caught in the subprime mortgage collapse. Fortunately, there is some help in the form of the Servicemembers´ Civil Relief Act (SCRA). The SCRA was created to protect soldiers and sailors from losing their homes for nonpayment of mortgages while they are on active duty and for 90 days after they return home.

Those who qualify for the SCRA include members of the Army, Navy, Air Force, Marine Corp and Coast Guard. Also included are members of the public health service, commissioned corps of the National Oceanic and Atmospheric Administration and National Guard members who were called to active service during a national emergency and authorized by the President or Secretary of Defense for more than 30 consecutive days. In addition, citizens ordered to report for induction under the Military Service Act, and those serving with the Allied Forces are also covered under the bill.

If you are covered under the SCRA, a court ruling must be made before a foreclosure sale or seizure can occur to your property. Military personnel can ask for a court delay and be issued a 90-day adjournment. If the court denies the delay request, an attorney must be appointed to represent the service member in absentia.

If the lender forecloses without a court order, the sale is invalid. If a foreclosure sale was conducted lawfully, there is still some recourse. Foreclosed property cannot be seized until the service member completes active duty. In addition, the SCRA grants military personnel the right to revisit a default foreclosure judgment that was issued during active duty and also gives them the right to ask that it be overturned.

For veterans facing foreclosure, it is critical they understand the process and take action. There are two types of foreclosures – judicial and non-judicial. Judicial procedures are followed by states that use mortgages as the security instrument for property loans. Non-judicial procedures are used by states that use deeds of trust as the security instrument. For veterans who live in non-judicial foreclosure jurisdictions, lenders can foreclose on a property very quickly and without court proceedings.

For questions about the SCRA contact the Judge Advocate General´s office at your local military base or the local Veterans Administration regional office.

Agency Sees Significant Increase in Loan Volume over Past Year

WASHINGTON – More servicemembers and veterans are using their Department of Veterans Affairs (VA) home loan guaranty benefit, as VA’s loan program remains a strong option in today’s housing market.

VA is experiencing a significant increase in home loan volume, with more than 162,000 home loan guaranties provided this year, an increase of more than 31 percent over the same period last year.

“VA attributes this increase to the favorable terms traditionally offered with VA loans and the elimination of many no-downpayment products in the conventional mortgage market,” said Secretary of Veterans Affairs Dr. James B. Peake.

No-downpayment loans are increasingly difficult to obtain with conventional financing.  Under recently enacted legislation, VA now uses a locality-based approach in determining ceilings on its no-downpayment home loans.  VA no-downpayment loans are available for as much as $729,000.  Larger VA loans may be obtained with relatively small down payments.

Not only is the VA program one of the few remaining no-downpayment programs in the market today, but lenders and veterans using the program are finding that it provides a timely and user-friendly product.

Focus in recent years on improvements in information technology has helped streamline the loan process and has made the program more accessible.  Veterans no longer need to obtain a VA Certificate of Eligibility prior to contacting a lender.

Lenders can access the program’s web portal to use VA’s online Automated Certificate of Eligibility (ACE) system and obtain the certificate for the veteran.  Many times, lenders can receive the certificate within seconds.

VA lenders have the authority to process and approve veterans’ loan applications. Lenders can order appraisals online, review and determine the appraised value of the property themselves, electronically submit the information VA needs to process a loan guaranty, and then receive the guaranty electronically within 24 hours.

VA is also revolutionizing its loan servicing activity through implementation of a new web-enabled and rules-based "smart" system called VALERI (VA Loan Electronic Reporting Interface).  Standardized servicing criteria on par or ahead of industry norms and instant access to acquisition and claim payment status make it easier for servicers to work and communicate with VA.  It also allows servicers to help veterans who are experiencing financial difficulty avoid foreclosure.

VA-guaranteed home loans are made to eligible veterans, servicemembers, and surviving spouses through private mortgage lenders throughout the United States.  Since 1944, when home loan guaranties were first offered with the original GI Bill, VA has guaranteed more than 18 million home loans worth over $965 billion.

Last year, about 135,000 veterans, servicemembers and surviving spouses received loans valued at nearly $24 billion.  More than 90 percent of VA loans were made without any down payment.

To obtain more information about the VA Loan Guaranty Program, visit www.DirectVAloan.com