August 7th, 2008 8:59 PM

Dear Friends,

During the past several months, there has been a steady stream of disconsolate financial events threatening the US economy on all fronts. Such news has taken its toll in numerous ways upon the psyche of all Americans. We are beginning to see a change in behaviors due to these circumstances.

Collectively, one of the ways we have been forced to change, perhaps for the better, is conserving energy. In large part, by using less gas, prices have come down recently to less than $4 per gallon in some parts of the country. We are also driving less and beginning attempts to try public transportation. We are becoming aware of every last dollar spent. These reactions are understandable due to the reality of the 'roller coaster' effect of the present economy that 'takes no prisoners'.  There's no need to be reminded of the hazards Americans face daily in making the right decisions in order to keep food on the table, a roof over one's head and the ability to get around town.

In an attempt to correct the outbreak of foreclosures and to lift confidence levels of the 2 major mortgage financing concerns in this country, President Bush signed into law the "Housing and Ecomonic Recovery Act of 2008" last week.

This provision provides additional funds for FannieMae & FreddieMac. These institutions are quasi-governmental agencies which have enormous power in the mortgage banking industry. Their underwriting guidelines and recommendations are standard. Any hint of monetary problems in its operations is tantamount to an 'earthquake' in the financing sector. A few weeks ago we had a 'tremor' of sorts, due to investors fears of funding problems. If you recall, in order to alleviate investor anxiety, the President and the Treasury Secretary immediately outlined plans and reassured the public the government will provide additional monies for these institutions.This new legislation provides a sigh of relief.  


The new law also helps homeowners facing foreclosure. The government estimates the ability of helping up to 400,000 homeowners save their properties through new loans insured by FHA beginning October 1st. The loans offered under this program by FHA is for a fully amortized 30 year fixed rate loan. Please check our rates at for more information.

A homeowner is able to refinance their owner occupied property up to 90% of the appraised value. If the mortgage on the property is more than the house is currently worth, the cooperation from your current lender is needed. In order to make this work, your current lender needs to agree this is the best course of action under the circumstances. Your lender's participation is voluntary as they are likely to lose hundreds of thousands of dollars.

Another detail of this loan, is the homeowner has to provide the FHA 50% of any equity over 90% Loan To Value/LTV accrued since the signing of the loan agreement. For example, if your loan was appraised at $500,000 when you signed up with FHA today and let's say the value of your home in 2 years is worth $600,000 - FHA is entitled to 50% or $50,000 of equity once you refinance or sell your home. 

There are also provisions to help first time homebuyers by providing 'tax credits' of up to $7500. This 'credit' is basically a loan, as this money has to be given back to Uncle Sam within a 15 year period.

Updating loans for Veterans, fine tuning underwriting guidelines and requirements of all mortgage financing operations and new laws to help curtail fraud in financial transactions, these are the newest provisions signed into law. The next edition of the TEAMBLOG will discuss these matters at length.

While TEAMBLOG is a column devoted to events and issues surrounding the mortgage banking industry and the economy as a whole, there are times in which other topics have been discussed in an attempt to end the monotony of depression and gloom Americans have been experiencing recently. Moreover, at this time in the US where the economy is the major topic of conversation, it's always healthy to escape such discussions of financial doldrums and pursue stories of a philosophical or a spiritual nature in order to understand the beginnings of the conflicts Americans are involved in. We truly appreciate your continued readership.


Our MORTGAGE APPRECIATION SALE is  extended until Friday, August 29th. Please see our previous TEAMBLOG for more information or call us at 323-936-3232. We value your business!

Thanks Again


Posted in:General
Posted by Jesse Dorado on August 7th, 2008 8:59 PMPost a Comment

Subscribe to this blog



My Favorite Blogs:

Sites That Link to This Blog: