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MORTGAGE MODIFICATION INFORMATION FOR C.A.R. MEMBERS, CONSUMERS NOW AVAILABLE November 19, 2008 - C.A.R. has created consumer information sheets detailing the various mortgage modification programs available through the larger lenders and government entities, and also has created an easy-to-use reference chart about available programs. The consumer sheets contain information such as eligibility requirements, who to contact to apply, costs associated with the program, and other vital data. The sheets are formatted in Microsoft® Word, enabling REALTORS® to print and e-mail them to their clients. In general, the loan modification programs on the chart and consumer information sheets are intended for primary residences only. Mortgage loan modifications typically are handled on a case-by-case basis. Homeowners having difficulty meeting their mortgage obligation or interested in finding out more about a loan modification program should start by contacting their lender. Prior to calling a lender or loan servicer, homeowners should have the following information available: loan number; income information and documentation; most recent mortgage statement; bank statements; and a letter demonstrating financial hardship. For further information, please visit the California DRE Web site at http://www.dre.ca.gov/mlb_adv_fees.html. REALTORS® also may direct clients to work with a U.S. Dept. of Housing and Urban Development (HUD)-approved counselor. For a list of HUD-approved counselors in California, visit the HUD Web site at http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm?webListAction=search&searchstate=CA. More info

FHFA ANNOUNCES "NEW" CONFORMING LOAN LIMITS November 12, 2008 - The Federal Housing Finance Agency (FHFA) on Friday announced that the "new" conforming loan limit for 2009 will remain at $417,000 for most areas in the U.S., unchanged since 2006. Loan limits for high-cost areas, including California, are capped at $625,500, down from the previous $729,750 limit. Loan limits for many areas of the state do not reach this lower threshold and are dramatically reduced from 2008. "Although price declines mean that the total number of homes eligible for conforming financing has increased, we're disappointed that the $729,750 limit stipulated in the Economic Stimulus Act of 2008 signed in February was not made permanent," said 2008 C.A.R. President William E. Brown. "The reduction in the loan limit to $625,500 will negatively impact both the interest rates and the availability of funds for jumbo mortgages. We hope Congress will make the $729,750 limit permanent before the end of the year as one of the provisions in an economic stimulus package." The conforming loan limit determines the maximum size of a mortgage that Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac can buy or guarantee. Non-conforming or jumbo loans typically carry a higher mortgage interest rate than a conforming loan, increasing the monthly payment and negatively impacting affordability for households in California.

Fannie and Freddie will have lower loan limits in 2009 Be aware that the maximum loan limits for 2009, are changing by county– lower in most cases: Alameda, Contra Costa, San Mateo: $625,500     1 unit $800,775     2 units $967,950     3 units $1,202,925  4 units San Joaquin, Solano, Stanislaus: $417,000     1 unit $533,850     2 units $645,300     3 units $801,950     4 units It is not clear what the exact deadline will be to fund loans above these figures to $729,750, the current "agency jumbo" limit.  Some lenders are saying they won’t fund loans past 12/10/08.  We hope some will fund through the end of December 08.

HPS Program The Homeownership Preservation Subsidy (HPS) Program provides grants that member financial institutions can use to restructure or refinance mortgage loans for eligible low- and moderate-income homeowners at risk of foreclosure because of unaffordable increases in their monthly payments for adjustable rate mortgage loans. Only members of the Bank may submit HPS applications. Funds may be used to: Provide relief to customers when an existing loan held by the member can be restructured or refinanced to remain affordable for the homeowner Facilitate homeownership preservation for low- and moderate-income households - Income Limit Chart Maintain existing customer relationships Achieve community investment goals The Bank will match up to $1 for every $2 contributed by the member for mortgage loan restructuring or refinancing, up to a maximum of $25,000 per homeowner.   Nonprofit or community-based organizations may participate by identifying eligible homeowners and by offering post-purchase homeownership or credit counseling programs, which all HPS participant homeowners are required to complete.  Call Joanne at 510-429-4800 for more information and assistance in utilizing this program for a home purchase.

WISH Program The Workforce Initiative Subsidy for Homeownership (WISH) Program provides grants to qualified homebuyers through our members. The program is designed to help people living in high-cost areas to purchase homes near their work. Only Bank members may submit applications. Participants must complete a mortgage assistance program administered by a public or private entity. The household income of the homebuyer at the time of approval in the mortgage assistance program is 80% or less of the HUD area median income. Income Limit Chart Homebuyers must contribute at least 1% of the purchase price from their own funds. Participants must complete homebuyer counseling. Under the WISH Program, the Bank will provide up to $15,000 per household, matching up to $3 for every dollar contributed by the homeowner toward the purchase of the home. Call Joanne at 510-429-4800 for more information and assistance in utilizing this program for a home purchase.

VA Clarifies New Loan Limits:   The Department of Veterans Affairs has published a notice clarifying the Veterans' Benefits Improvement Act of 2008.  This legislation changed the VA home loan guarantee program including permanently increasing the VA loan limits. According to NAR, the VA has determined that beginning January 1, 2009 the high cost loan limit price in high cost areas including California will be $1,094,625.  For more information please refer to the VA circular about loan limits by clicking here.

$7,500 Tax Credit October 1, 2008 - In response to President Bush having signed the Housing and Economic Recovery Act of 2008, the website www.federalhousingtaxcredit.com was created by the National Association of Home Builders (NAHB) to further the consumers’ education on the Bill, explaining in detail what it could mean to home buyers. One of the main aspects of the law allows a temporary $7,500 tax credit for the purchase of a first home, when specific qualifications are met.  The tax credit is among several provisions included in the landmark housing legislation, which takes affect on October 1, 2008, that will help get housing and the economy back on their feet. The website contains useful information on how the tax credit works, including eligibility requirements. Tax Credit at a Glance. This provides a brief overview on how the credit works. Frequently Asked Questions. A clear to read question and answer format contains basic information about the tax credit, including the definition of a first-time home buyer, what type of homes qualify for the tax credit, what are the income limits to qualify, payback provisions and more. The Law’s Other Provisions. In addition to the tax credit, this section summarizes a number of provisions in the Housing and Economic Recovery Act of 2008 that will help prevent foreclosures, reinvigorate the housing market and strengthen the nation’s economy. Home Buyer Resources. Provides online resources to make the buying process smoother.  A few of the main aspects of the law that should be remembered are that the Tax Credit is in the form of an interest-free loan from the government, and must be paid back over a period of 15 years, and that the opportunity to apply for the credit, if eligible, ends on June 30, 2009. Visit  www.FederalHousingTaxCredit.com  for complete information.

Fannie, Freddie to Announce 2009 Conforming Loan Limits:  This week NAR reported that the FHFA, the regulator and conservator of Fannie Mae and Freddie Mac, will announce the 2009 conforming loan limits by November 7. According to NAR conforming loan limits in some high cost areas could be reduced in 2009 unless Congress takes action.  Legislation passed earlier this year increased the conforming loan limits to $729,750.  This increase was not made permanent and could drop to $625,500 in January. NAR supports making the 2008 limits permanent.  Meanwhile, the FHFA will consider the feasibility of making the increases permanent.

State of the Mortgage Market There is nothing more important for REALTORS® to know today than the availability of mortgage financing for their clients. With all the misinformation rampant in newspapers and magazines and on the radio, TV and the internet many, many people believe that there are no mortgage loans available or that qualification requirements are so tough that hardly anybody can qualify. Nothing could be further from the truth. However, in this market every REALTOR® needs a loan officer who can offer all the products that are still available in order to maximize their opportunities to earn a commission. It is true that underwriting standards have tightened and that many conventional loan programs, especially for loans over $729,750 require more down payment. Here is the rundown on the mortgage loan programs that we see as being the most REALTOR®/client friendly in today’s real estate market: FHA:  Loans to $729,750 with only 3% down and make sense underwriting guidelines. You MUST understand and make use of FHA financing. VA:Nothing down to $729,750, a small down payment required to $1,000,000 and reasonable underwriting you should ask every potential client if they are a veteran. There will be lots of veterans returning over the foreseeable future so this is a niche you must consider. CalHFA:A great program until 9-23-08 when CalHFA eliminated the HiCAP, 35 and 40 year loans, and raised their interest rate considerably above FHA and conforming conventional loans. We can still use the ChDAP 2nd combined with an FHA first to do 100% financing for those borrowers who are under the ChDAP income limits. CalSTRS:A great program for teachers that only requires 3% down with an 80% first and a 17% second (the 2nd’s payments are deferred for 5 years.) 1. Conforming Conventional Loans to $417,000: interest rates are still attractive for borrowers with a minimum of 15% down in declining markets. 2. Jumbo Conforming Conventional Loans between $417,000 and $729,750: Available at slightly higher interest rates to 85% LTV in most cases in declining markets. 3. Jumbo Conventional Loans Above $729,750 to $1,000,000: Available with generally 25% down and to $1,500,000 with 30% down. Interest rates are considerably higher. 4. Non-owner Occupied Investor Loans: Still available to 80% (but costs are high – both rate and fees). 5. Reverse Mortgages (for prchase transactions): This is a new and important niche for you to know about. Cherry Creek is having a Reverse Purchase Mortgage Seminar on Thursday October 9th at 9:30 A.M. in Pleasanton. Call me if you would like to attend. Please give me a call if you would like more details on any of these programs!   Claudia Kim, Loan Officer, Cherry Creek Mortgage Claudia has more than 30 years experience originating Conventional, FHA and VA loans Call Claudia at 925-474-1115 or toll-free at 800-325-2062 X 1115           Click image to visit Claudia's web site 4301 Hacienda Dr. Ste. 120 - Pleasanton, CA 94588

What is a credit inquiry? ...an item on a credit report that shows a business with a "permissible purpose"...   Improving Your Score -  It's important to note that raising your FICO credit score is a bit like losing weight: It takes time and there is no quick fix.   We've taken credit education to a whole new level with videos. Now you can watch recently recorded webinars on timely topics such as credit in today's climate and signs of looming credit problems. Stop and start as you need, skip through the presentation to the sections that interest you. View webinars   Find the latest credit videos from around the web – from funny to functional, you're sure to find videos on the credit management tools you need. Watch more videos

Lending Limbo: Can Any Borrowers Qualify In Today's Market? Despite legislative efforts to ease the home loan credit squeeze, mortgage professionals say the lending environment remains extremely tight--even for people with excellent credit scores--and shows no signs of relief. Particularly troublesome developments range from dried-up lending for second mortgages and home equity loans to higher down-payment requirements and condominium loan restrictions. While the self-employed and those with investment income are finding this lending marketplace especially hostile, even those who do provide documentation of income are being put under a microscope. Finally, mortgage insurers now have a greater say on down-payment requirements for some loans, even going so far as to reject certain loan packages put together and approved by lenders.  More

Congress preps for credit crackdown The Federal Reserve recently proposed tough new rules for the credit card industry. Now Congress wants its turn. Tess speaks with Congressman Barney Frank. Click here to listen to interview

Fair Isaac Insights: How Much Credit is Too Much? Read the Fair Isaac Insights paper, "In a credit-hungry economy, how much is too much?" As lenders grapple with these questions in a sour economy, Fair Isaac has researched the issue of predicting credit capacity. Our new Insights white paper will give you the gist of our research, and tell you how you can assess US consumers' credit capacity today. This paper explains: Why measuring capacity is different from standard risk measures How a new predictive analytic technology, future action impact modeling is used to determine the effects of a consumer taking on more credit How you could use the new Fair Isaac Credit Capacity Index™ with a FICO® score for more targeted lending decisions For more information, please contact MyFico at  cbhelpline@fairisaac.com or 1-800-777-2066, then press 1

Get ready to buy by learning how to build your credit. 1) Make a budget This is a first step in learning how to monitor your finances and avoid making costly mistakes, like bouncing a check or paying lots of interest on credit cards because you can't pay off your balance. List all your expenses, including tuition, books, school supplies, food, gas (if you have a car), your cell phone bill, entertainment, and miscellaneous costs. Then decide if you're going to get a job to help offset your costs. If you do decide you will work and take classes, move quickly - the best part-time jobs usually go fast. Aside from the money a part-time job pays, it also helps you avoid having too much unstructured free time - time which tends to go to waste. 2) Learn how credit works If you have ever watched a two-year-old child at play, you know that people are more vulnerable at some ages than they are at others. Just as two-year-olds are prone to touching hot stoves because they don't know the danger, so too are 18-24 year olds vulnerable to causing pain by using credit unwisely. Students, do yourself and those who care for you a favor and learn how credit works before you start using it. There's plenty of useful and free information available in the credit education section of myFICO.com. 3) Use credit with care Students are vulnerable to developing bad spending habits and abusing credit cards. If you're a parent or a student, you should know that credit card trouble is common among college kids these days. Don't let yourself fall into this trap. A Nellie Mae survey of college undergrads in 2000 revealed some disturbing numbers: Average credit card debt per student was $2,748 Thirteen percent had credit card debt between $3,000 and $7,000 Nine percent had more than $7,000 in credit card debt Credit cards are the most expensive way to buy on credit if you consistently carry balances from one month to the next. Use your new card sparingly and get a feel for how interest charges affect the balance from month to month. After a month or two it will become clear that if you can't pay off the balance in full, you should at least limit it to an amount you can pay down quickly so as to minimize interest charges. Once you understand this basic concept, your odds of getting into credit card trouble will be greatly reduced. If you find yourself running up balances on credit cards to pay for everyday expenses, you should probably consider getting a student loan (or some other form of longer-term loan) to pay these expenses instead. You'll still be living on borrowed money, but at least you'll be paying less to do so. Finally, when starting out, try to limit the number of credit card accounts you open. This will make it easier for you to manage your credit card use and cut down your odds of getting into trouble. By using credit cards responsibly, you'll minimize your borrowing costs, get a good start on building your credit history and be more financially secure when you graduate. 4) Check your FICO scores at least once a year Once you've built enough of a credit history, you will have FICO scores. Lenders will use your FICO scores to determine the interest rates you'll pay when you borrow. If you're college-bound or in college now, get used to checking your FICO scores and credit reports at least once a year. myFICO offers two products that give you instant online access to all three of your FICO scores and credit reports - FICO Deluxe and Suze Orman's FICO Kit Platinum. Either product will help make you a more savvy consumer and build awareness of how your money habits affect your FICO scores.  Reprinted with permission © 2005 Fair Isaac Corporation. 901 Marquette Avenue, Suite 3200. Minneapolis, MN 55402. (612) 758-5200. All rights reserved. Fair Isaac, FICO, and myFICO are trademarks or registered trademarks of Fair Isaac Corporation in the United States and/or in other countries. Other products and company names herein may be trademarks of their respective owners.

Knowing your FICO score: one is good, three are best. Reprinted with permission from MyFico.com Do you know all three of your FICO® scores? You should. They’re the credit scoring numbers lenders use to decide which interest rate to offer you on mortgages, auto loans, charge cards and other credit. A FICO score is a three-digit number, ranging from 300 to as high as 850. Based on a current snapshot of your credit history, your FICO score is used by lenders to estimate whether you will repay a loan or other credit obligation as you agreed. In fact, most mortgage lenders look at all three scores when evaluating your credit application. Why you have three different FICO scores. There’s only one FICO score, the industry standard developed by Fair Isaac Corporation. But it is calculated separately by each of the three major credit bureaus—Equifax, Experian and TransUnion. Those bureaus receive information about your credit history from the various businesses they serve, such as credit unions, banks, retail stores, auto finance companies, cellular phone companies and other creditors. They may also gather public records about bankruptcy filings or liens, along with records from debt collection agencies. While some businesses provide information to all three credit bureaus, others may report to just one or two. Also, they may report information at different points in time—daily, weekly, monthly, quarterly, or whenever a reportable event occurs. Finally, as independent businesses that must comply with federal law protecting your privacy, the three credit bureaus don’t share your credit information with each other. Those are the main reasons why each bureau has its own version of your credit history on file—and why you have three FICO scores at any one moment. Raising your FICO scores overall, over time What’s important is not that all of your FICO scores match. Rather, you should give yourself the opportunity to attain the highest FICO score that you can at each bureau. And the way to do that is by practicing good credit management and making sure that your credit histories at all three bureaus are up-to-date and error-free. Higher FICO scores can save you money When you have higher FICO scores, lenders consider you a better credit risk and will offer more attractive interest rates. That’s why it’s so important for you to make sure that all three of your credit reports are accurate. Over time, maintaining clean credit reports can help you: Raise all three of your FICO scores Lower the interest rates you pay on mortgages, charge cards and other lines of credit Save money by spending less on interest payments Check your FICO scores and credit reports regularly Once you’ve seen all three FICO scores and credit reports for the first time and eliminated any credit reporting errors, check your reports regularly to be sure they’re current—and still accurate. The only place you can get all three FICO scores with the corresponding credit reports is at MyFICO. Managing your credit wisely can help raise your FICO scores over time—saving you thousands of dollars in lower interest payments over the years. Important Phone Numbers Following are phone numbers you will need to call if your wallet, etc is ever stolen:  Equifax: 800-525-6285  Experian formerly TRW 888-397-3742  Trans Union 800-680-7289  Social Security Administration fraud line 800-269-0271

Keep Your Identity Safe Contributed by: Ms. Linda Jo Lawson Bruton Read this and make a copy for your files in case you need to refer to it someday. Maybe we should all take some of his advice! A corporate attorney sent the following out to the employees in his company. 1.  The next time you order checks have only your initials (instead of first name) and last name put on them. If someone takes your checkbook, they will not know if you sign your checks with just your initials or your first name, but your bank will know how you sign your checks. 2.  When you are writing checks to pay on your credit card accounts, DO NOT put the complete account number on the "For" line. Instead, just put the last four numbers.   The credit card company knows the rest of the number, and anyone who might be handling your check as it passes through all the check processing channels won't have access to it. 3.  Put your work phone # on your checks instead of your home phone. If you have a PO Box use that instead of your home address. If you do not have a PO Box, use your work address. Never have your SS# printed on your checks. (DUH!) You can add it if it is necessary. But if you have it printed, anyone can get it. 4.  Place the contents of your wallet on a photocopy machine. Do both sides of each license, credit card, etc You will know what you had in your wallet and all of the account numbers and phone numbers to call and cancel. Keep the photocopy in a safe place. I also carry a photocopy of my passport when I travel either here or abroad. We've all heard horror stories about fraud that's committed on us in stealing a name, address, Social Security number, credit cards.  Unfortunately, I, an attorney, have firsthand knowledge because my wallet was stolen. Within a week, the thieve(s) ordered an expensive monthly cell phone package, applied for a VISA credit card, had a credit line approved to buy a Gateway computer, received a PIN number from DMV to change my driving record information online, and more. But here's some critical information to limit the damage in case this happens to you or someone you know: a. We have been told we should cancel our credit cards immediately. But the key is having the toll free numbers and your card numbers handy so you know whom to call. Keep those where you can find them. b. File a police report immediately in the jurisdiction where your credit cards, etc. were stolen. This proves to credit providers you were diligent, and this is a first step toward an investigation (if there ever is one). But here's what is perhaps most important of all : (I never even thought to do this.) c. Call the 3 national credit reporting organizations immediately to place a fraud alert on your name and Social Security number. I had never heard of doing that until advised by a bank that called to tell me an application for credit was made over the Internet in my name. The alert means any company that checks your credit knows your information was stolen, and they have to contact you by phone to authorize new credit By the time I was advised to do this, almost two weeks after the theft, all the damage had been done. There are records of all the credit checks initiated by the thieves' purchases, none of which I knew about before placing the alert. Since then, no additional damage has been done, and the thieves threw my wallet away.  It seems to have stopped them dead in their tracks.

~ Ask myFICO ~

Q. Does the number of inquiries shown in my credit reports affect my FICO score? A. Each of your credit reports show all the times that businesses have asked to see your credit report. But the only ones considered by FICO scores are credit checks by lenders in response to your own credit requests, such as a mortgage application. Businesses also check your credit before sending you promotional offers and in the normal course of managing your account with them. Those types of inquiries, as well as your own credit report checks, are ignored by the FICO score. Q. How does the "middle score" idea work? A. Many lenders want to see your FICO score from all three national credit bureaus before approving your loan application. Since the credit bureaus don't share information, your credit report information can differ between the bureaus, causing your FICO scores also to differ. Some lenders may look only at the lowest FICO score, while others may look at the highest FICO score. Accepting the middle score is a compromise that many lenders choose to make. Q. Do credit repair companies really work? A. No one can "repair" your credit rating or your credit report. Services that claim they can fix bad credit or artificially raise your credit score are promising results they can't deliver. You can review your own credit reports, identify any incorrect information, and contact the credit bureaus directly to have your reports corrected or updated—without paying anyone. If you purchased a FICO Score Report and believe there is an error in your credit file, just login to the myFICO.com Member Center and open your report. At the bottom of any page of your report, you’ll find instructions to file your request for investigation with the credit bureau. The bureau must investigate and respond to you within 30 days.

For information on buying or selling east bay homes, please contact me at 510-429-4800 or send me a note on the Contact Joanne form.  Sign up for email alerts Thank you, Joanne P.S.  Be sure to add us to your favorite places. ~ Joanne L. Gardiner, Broker, e-PRO Realtor "For Old-Fashioned Service in Cyberspace" Advantage Realty Advantage Mortgage Associates 3205 Whipple Road - Union City, California 94587 (510) 429-4800 San Francisco Bay Area  ~ San Francisco East Bay Real Estate web site: http://www.joannegardiner.com Contact Joanne Our primary realty service areas in the San Francisco Bay Area: Hayward, Castro Valley, Fremont, Newark, Niles, San Leandro, San Lorenzo, San Ramon, Sunol, Oakland, Foster City, Burlingame, and San Mateo. The types of real estate in which we specialize are:  single family homes, detached homes, attached homes, duets, condominiums, townhomes, garden homes, PUDs, manufactured homes, mobile homes,  income property, investment property, tri-plexes, four-plexes, apartment property, and special use properties such as churches for sale.