Leo's Blog

For Sale... To a Good Home
August 2nd, 2008 11:14 AM
For Sale... To a Good Home

A typical dog's tale...

Author: Unknown

I was born in the Summer a few years ago.
Quite why I was born, I'll never know.
Some folk who owned my mother, decided to breed.
No reason I know of except for their greed;
I know I was hungry, I know I was cold;
They sold me quite early at just five weeks old.

My number one owners seemed friendly at first,
And life was quite good till my bubble burst;
They started to argue, their marriage split up;
And in the AD: "For Sale - 4 months old pup".
Some folk arrived, the next ones in line.
They treated me kind and life was just fine.
But Master dropped dead, and she couldn't cope.
So she sold me again (I'll soon give up hope).

I now had a new home right up in the sky;
We went up in the lift fourteen floors high!
The new folk were kind but they left me all day;
I was bursting to wee and had nowhere to play.
It was boredom, I think, when I chewed up the chair;
They agreed I should go as it just wasn't fair.

The next home was good and I thought "this is it"!
They started to show and I won....well, a bit.
Then somebody told them that I had no bone.
And in went the AD: "For Sale...to a good home".
The next lot were dreadful, they wanted a guard;
But I didn't know how, although I tried hard.
One night they got burgled and I didn't bark;
Tied up in that shed and alone in the dark.
For four months I lay in that cold and dark shed;
With only an old paper sack for a bed.
A small dish of water all slimy and green;
The state I was in, well, it had to be seen!

I longed for destruction, and an end to the pain;
But some new people came and I went off again.
Well now I'm with Rescue and this home is good;
There's walks in the country and lots of good food;
There's kisses and cuddles to greet me each day;
But I dread the time they will send me away.
But for now here I stand, skin and bone on all four;
PLEASE......don't let "ME" happen to any of yours!!
 
..... As a Realtor and a Papillon Rescuer, I am hearing about a lot about people giving up their pest because their house has gone into forclosure and the owners are forced to rent. Many places will not allow dogs or cats...
It's a sad time in real estate history.
 
Leo
Posted by Leo Clark on August 2nd, 2008 11:14 AM

Review of Confessions of a Subprime Lender
August 28th, 2008 10:18 AM

I recieved this article from the National Association of Realtors.

Book Review: Confessions of a Subprime Lender

 

Quick Skim
Slowing home sales, a tightening credit market, record-high foreclosures — how did we get to this point? Richard Bitner's book Confessions of a Subprime Lender (Wiley, 2008) gives a close-up look at how the worst credit crisis in modern history came to be. Bitner, who founded a subprime mortgage company in 2000, left the business in 2006 after foreclosing on a subprime borrower that never should have been approved for a loan in the first place. While being careful not to blame any single source, Bitner gives an interesting view on what went wrong in the subprime mortgage market and how to fix it.

              Buy the Book

From the Book: 5 Reasons the Subprime Market Crumbled

In 2000, as housing prices grew out of reach for buyers, more creative financing crept in and subprime lending became big business. Wall Street wanted its hands on more of these loans, and the hot housing market spawned a wave of new subprime companies. By 2004, 75 percent of borrowers were buying a home without using a down payment or proving income.

But by 2006 the subprime market started falling apart; Borrowers were defaulting on loans and subprime companies were going out of business. Bitner says these are some factors that caused the subprime market to crumble:

1. Greed. Mortgage brokers made more money if they sold loans with higher fees and interest rates. So borrowers would often be steered toward riskier products, even if a more traditional (and less risky) loan were available. "My income was directly proportional to the revenue I generated, and subprime was three to five times more profitable than any other type of loan we securitized," Bitner says. "I saw no logical reason to sell something that made less money and carried no competitive advantage."

2. Rampant fraud. Bitner estimates that more than 70 percent of all brokered loan applications submitted to his company were in some way deceptive, which meant everything had to be double-checked and verified. "The practice of massaging loans, making them appear different

from what they are, became standard operating procedure," Bitner says. "With little accountability for their actions, brokers [were] left to decide how far they're willing to go."

Common cases of fraud included altering income documentation, giving a borrower an adjustable rate mortgage without explaining how it works, or disclosing lower rates and fees to a borrower but then increasing the figures right before closing.

3. No standards. Everyone wanted to cash in on the subprime business, even if they didn't know how the business worked. "With few rules and minimal consumer protections, abusive behavior flourished," Bitner writes. The number of mortgage broker companies increased by 50 percent between 2001 and 2006, peaking at 53,000 in 2006. Meanwhile, the number of new loan originators working for mortgage brokers grew by 100,000.

Yet no national standard existed for licensing mortgage brokers and loan originators. Bitner says the industry needs to raise its standards and develop a system for accreditation. "The recent debacle has given brokers a reputation similar to used car salesmen," Bitner writes. "Although the bankers and brokers associations don't have a history of working together on issues, a collaborative effort to accredit loan originators would be a key step to rebuilding credibility for the industry."

4. Securitization of mortgages. Mortgage securitization fragmented the industry, Bitner says. Previously, banks would provide the money to fund a mortgage, but with securitization, the funding got divided into several components.

Here's how it works: Brokers originate the loan, a mortgage lender funded it, and a lender then sold it to another financial institution or used an investment bank to package it into a mortgage-backed security. Investors then bought them for their portfolio. "The problem in today's housing market exists because the investment banks packaged high-risk loans into securities and the rating agencies assessed them as investment quality," Bitner writes. "If the investors who purchased the securities understood what they were buying, the outcome would likely have been different."

5. Ultra-relaxed underwriting standards. As the subprime market took off, a pricing war among subprime lenders emerged. In order for lenders to keep their revenues up, they needed to fund more borrowers, leading to less restrictive underwriting. "It's easy to lose sight of what constitutes a good credit risk when you spend all day looking at marginal deals," Bitner writes.

Indeed, riskier products emerged, such as loans that required no down payment, proof of income, or even a history of paying rent. One loan product even allowed borrowers with credit scores of 580 and a 90-day-late payment in their housing history to qualify for 100 percent financing.

Sneak Peek

"During the first six months in business, I felt no more qualified to pilot the Space Shuttle than to be the president of a subprime lending company. Seven years in mortgage banking provided a solid foundation, but coming from the ranks of companies like GE Capital, my schooling was largely driven by a conservative mind-set. Lending money to borrowers with bad credit was never a part of the curriculum. When I first learned about subprime mortgages, the high-risk nature of the business made me think it was best suited for those who suffered from low morals or head trauma. Lending money to people with bad credit just seemed like a terrible idea. It wasn't until I got a taste for this business that my feelings started to change."

About the Author

Richard Bitner has more than 14 years in the mortgage industry. In 2000, he founded Kellner Mortgage Investments, a subprime mortgage company with 65 employees and $225 million in annual loan volume. Bitner got a distaste for the business in 2006, leaving his business about a year before Kellner closed and the subprime market started to crumble. He is now the managing director of Housing Wire. Visit his blog: www.lendingsanity.com

Listen to a podcast with author Richard Bitner >

Posted by Leo Clark on August 28th, 2008 10:18 AM

Mortgage Apps Fall to Lowest Level in Nearly Eight Years
August 24th, 2008 7:04 PM

Even as housing prices drop across the country, fewer people appear close to buying a home.

The Mortgage Bankers Association reports that the volume of mortgage applications fell last week to the lowest level in nearly eight years. Additionally, the group says applications are down 61 percent from this year's peak in February.

The decline in new home construction is a major factor in the drop in activity, the association says. On top of that, fewer people are refinancing existing mortgages.

On Tuesday, the U.S. Department of Commerce said construction of new homes and apartments in July fell to the lowest level in more than 17 years.

Posted by Leo Clark on August 24th, 2008 7:04 PM

State Farm Seeks a 47.1% Statewide Average Rate Hike
August 15th, 2008 9:28 AM
tampabay.com

State Farm faces some angry officials

By Tom Zucco, Times Staff Writer

Published Tuesday, August 12, 2008 12:26 PM

TALLAHASSEE — When State Farm officials appeared before Florida regulators Tuesday to seek a 47.1 percent statewide average rate hike, Office of Insurance Regulation general counsel Steve Parton zeroed in on why State Farm averaged the results of three hurricane models.

A key component of a company's rate need, the computer models estimate the dollar amount of losses from a storm.

Parton argued the models cannot be tinkered with, and State Farm was "taking three wrong answers and averaging them together to get a right answer."

"Aren't you now creating a fourth model?" Parton asked.

"I don't intend to be confrontational," answered Jeff McCarty, a State Farm vice president. "But each model is approved."

In a sometimes tense three-hour hearing, Florida's largest private home insurer said it needs the 47 percent rate hike to remain in business. State Farm's revenue has dropped 33 percent year to date, officials said, because of low premiums and a doubling of discounts it must give policyholders who harden their homes.

"The profit picture for State Farm Florida is nonexistent," said company president Jim Thompson.

But regulators questioned how State Farm could show huge losses even though it bought reinsurance from its parent company, is dropping 50,000 coastal policyholders, and stopped writing new policies in Florida.

"Enough is enough," said Gov. Charlie Crist. "I think he (Insurance Commissioner Kevin McCarty) will handle this case appropriately, and I think you know what I mean by that — rejecting it, the increase."

Parton said the hearing "certainly verified some our of suspicions" about how the company derives its numbers.

If regulators don't approve the hike, State Farm can refile or appeal to an administrative law judge. Or drop more policies.

But Thompson said the company has no plans to do that. "The plan is to get the 47.1 percent increase," he said, "and then consider our options."

Tom Zucco can be reached at zucco@sptimes.com or (727) 893-8247.


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Posted by Leo Clark on August 15th, 2008 9:28 AM

Per Forclosures Hit Record High
August 12th, 2008 8:04 AM

Maybe you missed this article. It was posted yesterday on my main page from the Jacksonville Journal.

Pre-foreclosures hit record highs in July 2008 both nationally and in 14 states and the District of Columbia, according to new figures from ForeclosureS.com.

Alexis McGee, president of ForeclosureS.com, said the Southwest and Southeast regions have been hardest hit, with three and four times the number of pre-foreclosures in July 2008 than in the Northeast and Midwest. The Southwest region had 86,625 pre-foreclosures and the Southeast, 65,458, compared with 20,541 in the Northeast and 19,640 in the Midwest.

The states with the most pre-foreclosure filings per 1,000 households year to date through July include:

  • Nevada (59.1 per 1,000, up 126.44 percent from year to date 2007)
  • Arizona (54.9 per 1,000, up 403.67 percent from YTD 2007)
  • Florida (48.3 per 1,000 up 176 percent from YTD 2007)
  • California (25.2 per 1,000, up 119.13 percent from YTD 2007)

The 14 states with monthly record totals for July pre-foreclosure filings for 2008 include:

  • Nevada, 7,993
  • New York, 5,157
  • North Carolina, 4,888
  • Tennessee, 3,499
  • Oregon, 3,199
  • Missouri, 2,561
  • Utah, 1,973
  • Pennsylvania, 1,520
  • Nebraska, 820
  • New Mexico, 495
  • Montana, 371
  • Hawaii, 373
  • District of Columbia, 206
  • Louisiana, 30

California-based ForeclosureS.com bases its analysis on the number of formal notices filed against a property during the foreclosure process, including a notice of default, a foreclosure auction and/or lender-owned real estate after a foreclosed property reverts back to the lender.

Pre-foreclosure filings are the first notice and not all such properties end up foreclosed.


Posted by Leo Clark on August 12th, 2008 8:04 AM

New housing law full of areas of no help
August 11th, 2008 11:20 AM

South Florida Sun-Sentinel.com

New housing law full of trapdoors for borrowers and lenders

Harriet Johnson Brackey

Personal finance

August 10, 2008

I took a hard look at the new federal housing law and I had trouble seeing past all the strings attached to its offers of help for troubled homeowners.

Such as: If you use its provisions to refinance your mortgage and then sell your home at a gain, you'll have to share that gain with the government.

And this new program won't help anyone who can't pay off a home equity loan, either.

But — and this isn't easy for many who are in mortgage trouble — if you're a qualified borrower and could have gotten a mortgage before the lenders went crazy and stopped checking anything, then there may be something in this law to help you.

For now, I'm only going to focus on the question of how to refinance a mortgage using the Hope for Homeowners Act of 2008, to take effect Oct. 1. The Congressional Budget Office has estimated this new program will help as many as 400,000 struggling homeowners to avoid foreclosure.

From what I see, they'll be the lucky few, if there are that many who succeed in saving their homes. Here's what I learned:

Who can refinance?

The Hope for Homeowners Act won't work for an investor. You can only refinance a mortgage on your primary residence, not an investment property.

So much of South Florida's property sales were to speculators, but the law is designed to prevent them from being bailed out.

It won't work for someone who has a second lien on their home, such as a home equity loan. That has to be satisfied before this refinancing can take place.

It will work for borrowers who are a bit more heavily in debt than lenders generally recommend. The homeowner must be spending 31 percent of gross monthly income on housing (usually the definition includes the monthly money set aside for property taxes and insurance, as well).

How Will refinancing work?

Lawmakers expect borrowers will essentially have to meet the same guidelines as for a Federal Housing Administration mortgage. If you bought more house than you could afford, then you won't qualify.

Borrowers' income will be verified, something that wasn't done for some of the strange lending practices during the housing boom.

The trouble is that people who couldn't qualify for a traditional loan during the boom may not qualify today.

"That's where a lot of borrowers are banging their heads against the wall," says Ritch Workman, a Melbourne mortgage broker who is president of the Florida Association of Mortgage Brokers.

The lender side of the deal is even trickier.

The lender has to agree to accept a payoff that is less than the full value of the current mortgage. This is a voluntary program.

The payoff, according to the House Financial Services Committee, will be 85 percent of the home's current value.

Who profits?

Banks are expected to save billions of dollars by reducing their mortgage loan losses.

Here's how it would work: If you had a $200,000 mortgage on a property that is now worth $100,000, the lender would have to agree to accept $85,000. The lender would be taking a huge cut, "but they would get out. If they let the house go into foreclosure, they'd be lucky to get 35 to 40 cents on the dollar," said Steven Adamske, a spokesman for Rep. Barney Frank, D-Mass., who is chairman of the Financial Services Committee. The borrower gets a new mortgage that is guaranteed by the FHA.

If the homeowner then quickly sells the refinanced home in the first year for more than $100,000, the homeowner has to pay 100 percent of that gain to the FHA. This equity-sharing arrangement continues, but the percentage going to the FHA goes down over the next few years. After five years, it is 50 percent, for the next 25 years.

Will the lenders accept more losses?

That's the big question.

Already, about a third of real estate sales are either foreclosures or short sales, in which the lender accepts less than the mortgage amount, according to an informal survey conducted recently by the National Association of Realtors.

"It's very clear they passed this bill because everybody wants to help borrowers stay in their homes and stabilize the market," said Francis Creighton, vice president of legislative affairs at the Mortgage Bankers Association of America.

Other analysts aren't sure.

"It's all carrot and no stick," said James Lardner, a senior fellow at Demos, a think tank. "But they think the carrot is pretty good."

Just in case it isn't, the House Financial Services Committee plans to monitor the progress on the refinancing issue, including holding over the lenders' heads the prospect of tighter regulations on the mortgage servicing industry.

Harriet Johnson Brackey can be reached at hjbrackey@sun-sentinel.com.

New housing law

Takes effect Oct. 1.

Encourageslenders to refinance troubled home loans in exchange for a federal guarantee on the new loan.

Aims to help 400,000 troubled homeowners.

Money matters

For personal finance information, go to Sun-Sentinel.com/brackey or check Harriet Johnson Brackey's It's Your Money blog at Sun-Sentinel.com/itsyourmoney

Copyright © 2008, South Florida Sun-Sentinel

Posted by Leo Clark on August 11th, 2008 11:20 AM

Due to Forclosures, Animal Services Can't Handel Pets
August 8th, 2008 11:00 AM

It's not just happening in Fort Myers..... Click for the video..

Fort Myers
Animal services can't handle abandoned pets from foreclosures

It's raining cats and dogs at Lee County Animal Services -- and the agency just can't keep up.

It's dealing with more abandoned pets than it can handle. Familes who are being forced into foreclosure are leaving the animals behind because they can't afford to feed the pets anymore.

Animal services is holding a food drive right now to help families keep their pets at home.

"We're collecting donations from the public here to assist people in the hard times they're going through with the foreclosures and loss of jobs and that the main purpose of this is to keep the pets in the home so they don't surrender them here to us," Lance Raiche with Animal Services said.

If you want to donate dog or cat food to Animal Services, or give some money, you can drop it off. It's next to The Lee County Sheriff's Office on Six Mile Cypress.

 

Posted by Leo Clark on August 8th, 2008 11:00 AM

Forclosure Pets
August 7th, 2008 10:51 AM

I am not only a Real Estate agent, I am also a dedicated Papillon Rescue person. The following are a few emails concerning one of the problems Realtors are seeing... I am sorry the pictures weren't able to transfer.

Date: Wednesday, August 6, 2008, 11:11 PM

Someone sent this email to me and it just broke my heart.  I can not understand why someone would just get rid of the their pets.   I should be use to it but I am not.    I was hoping for a miracle that you would have room for these 2 babies.  If not maybe you know of some other rescue you could send it to.  Thank you very much for your time.  Claudia(animal lover in GA)




FL:2 Senior Foreclosure pets FRID 2 n> n> Pound 2 b PTS.Please see their pics.
 
Please Please help the Senior dogs and the Foreclosure pets......so sad this world.

---
----- Original Message -----

CONTACT:
Carol Robertson
 
cell: 321-508-5101
 
email: carolrobertson@cfl.rr.com (cfl.rr.com)
-----------------
Forwarded Message:
Subj: Fw: Two dogs Will Be Dropped Off At EG Shelter this Friday 
Date: 8/5/2008 11:06:19 P.M. Eastern Daylight Time
From: rnestor@cfl.rr.com
To:
Sent from the Internet (Details)
 
A friend of mine is a realtor & the family who is losing their home has 2 senior dogs they are going to leave at the shelter this Friday if a home or rescue can not be located. It is very unlikely the shelter will adopt them out due to their ages.
Please forward this message to anyone who may be able to help these poor souls. They need a loving place to live out their last years-
Her contact number is listed below- Carol Robertson 321-508-5101.
thanks!
christina
----- Original Message -----
Sent: Tuesday, August 05, 2008 3:31 PM
Subject: Two Pups Will Be Dropped Off At EG Shelter this Friday

Christine and Kim:
 
Help! these two unfortunate souls have owners that are losing their home, so they are being dropped off at the Eau Gallie Kennel this Friday Aug 8th.
 
the Pekinese is 12 yrs old, her name is "Baby" and she is blind in one eye.
 
the beagle/hound mix is Miss Beansy, she is 11 yrs old and has an open sore on her leg as you can see. also very thin.
 
both are sweet, obedient, loving, and just want a clean, safe home to spend their final years in. I am so hoping to help them.
 
Carol Robertson
 
cell: 321-508-5101
 
email: carolrobertson@cfl.rr.com (cfl.rr.com)
 
 
Posted by Leo Clark on August 7th, 2008 10:51 AM
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