A very good and talented friend of mine plays in a band (BBC) that will be
perfoming with other performers at Durty Nellie’s in Palatine, IL, on
Sunday January 31, 2010 from 2:00pm until 8:00pm. This is an organized
relief drive for the survivors in Haiti. Please come and join us and offer your support!

Details in flyer below

In recent weeks, I have discussed the glut of new guidelines and their effect on the consumer’s mortgage application.  I have also discussed some of the adverse effects that credit cards and their rule changes have had on the consumer’s flexibility in obtaining a mortgage.  Well… there are a few new changes that are coming that actually might benefit the consumer and there’s actually been a bit of advance notice, for once.

There will be some key changes that you can look forward to from your credit card company and they will be enacted on February 22, 2010.

Two of the biggest changes to expect are:

• You must be notified within 45 days prior to any increase in interest rate.
• There must be some form of disclosure as to how long it will take you to pay off your balance, given certain payments made.

There will be more changes occurring in August of 2010… I’ll go into those in the future.

If you’d like to read more about some of the changes coming on February 22, please click here.  This will lead you to the website for the Federal Reserve Board of Governors.

Have a great day!

This news came across my desk yesterday evening (Jan. 14, 2010).  WE’RE HALF-WAY HOME, PEOPLE!!!

Read the article from Realty Times here:  HVCC Demise???

It’s not time to do the Happy Dance yet, but we can at least go out and shop for some shoes!

While it doesn’t necessarily apply to mortgages, I had to share this video. This is a great organization that needs as much exposure as they can get.

As we have explored in an earlier post, one of the basic rules of improving your credit score is to NOT close a credit card account when you pay it off.  This process applies to the “Credit Saturation” threshold that we’ve previously investigated.  This is a procedure that I try to impress upon all of the borrowers that refinance and use proceeds to pay off credit cards.

Well… the banks have caught on and are now beginning to see profits dwindle as consumers no longer want to be saddled with credit card balances, and have now compensated by creating new fees.

As unpleasant as opening the mail might be for some individuals, you must do so with a renewed awareness now.  Within those mailings, whether they be statements or addendums to your contract with the company, you must be vigilant of the following:

• Items you may have already seen…
  • Increased interest rates
  • Increased minimum payments
  • Increased fees for exceeding your limit
  • Increased penalty fees for late pays (be very careful in reading your contract… some companies can increase your rate if you make a payment late at ANOTHER company!!)
• NEW charges that you may be seeing soon…
  • Annual fees on cards that might have previously not had an annual fee
  • Inactivity fees on cards you hold, but don’t use
  • Processing fees (basically a junk fee disguised as a fee for sending out a paper statment)

To sum this all up… OPEN your mail… STUDY your statements for changes and anything out of the ordinary or different from what you signed up for… OPT OUT of any changes that are being proposed, if given the option (you may have to search for the ability to opt out)… CALL your provider and verbally negotiate out of the changes… if all else fails, go to one of the credit card resources such as www.lowcards.com to find a replacement card.

IMPORTANT:  If you are forced to replace a card that just will not give you what you want, DO NOT close the existing card prior to opening the new account!  This will almost certainly result in a credit score hit.  Additionally… DO NOT replace more than one card in a 60-90 day period of time.  Also, DO NOT do anything that will result in an additional inquiry to your credit… applying, en masse, to a number of credit card companies WILL result in inquiries!  Do your homework first and apply to one company at a time!

As always… please feel free to contact me should you have any questions or comments.

Happy New Year and good morning!

sim⋅pli⋅fy
/ˈsɪmpləˌfaɪ/ [sim-pluh-fahy]
–verb (used with object), -fied, -fy⋅ing.
to make less complex or complicated; make plainer or easier: to simplify a problem.

Welcome to the first business day of the newest chapter in RESPA “reform”… the introduction of the new and “improved” Good Faith Estimate (GFE), HUD I form and Truth In Lending disclosure. To be honest… through all the webinars, all of the printed material, all of the conference calls and all the flyers we have experienced, there is still a lot of fog surrounding these new documents, what is required and how it will be implemented! It also seems that each lender has their own spin on how the regulation is to be interpreted and what will be required of the broker (and borrower).  Just this past Friday, I received a 62 page training deck to prepare for a 1.5 hour webinar this Tuesday (a day after day one!)

“The proposed Good Faith Estimate (GFE) is lengthy, complex, and cannot be easily compared by a borrower with the HUD-1 Settlement Statement at closing to determine whether the actual costs exceed the estimate provided at the time of the loan application.”

“The proposed GFE contains terminology that conflicts with other disclosures consumers receive under the Truth-in-Lending Act (TILA) and the Equal Credit Opportunity Act (ECOA), which will add to the borrower’s confusion during the loan application process.

“HUD’s proposed new GFE and mortgage application process would overlap and conflict with the broader federal mortgage regulatory framework under TILA and ECOA, which would further add to the borrower’s confusion.” — quote from David Stevens,  current Assistant Secretary for Housing/FHA Commissioner before the U.S. House of Representatives Subcommittee on Oversight and Investigations of the Committee on Financial Services.

I will be doing my best, this week, to gather as much information as I can to relay the concrete aspects of these changes and how they will be affecting borrowers and Realtors.

Suffice to say, at this early date… be prepared for a bit of confusion and, as usual in our industry, changes of this magnitude can potentially result in delays in the processing and closing of loans.

Stay tuned.