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Fannie Mae's New Streamlined Modification Program
Thursday, 15 January 2009 19:42
Bruce
Norton
In an attempt to assist homeowner in danger of losing their homes to foreclosure, Fannie Mae has created a new Streamlined Modification Program. In this program, the loan is lengthened, the the interest rate dropped in 0.125% increments to achieve a payment ratio (front end debt-to-income ratio) of 38%, and / or a forbearance of principal is given to finish bringing the payment ratio down to 38%. If the resulting interest rate is at the current market rate and the original loan was an ARM, the rate is locked in at that rate for the remaining life of the loan. If the resulting interest rate is below the current market rate, the new rate is effective for 5 years, then increases 1% per year until the maximum rate is achieved. At that time the rate is locked in as a fixed rate for the remaining life of the loan. According to Announcement 08-33, to be eligible for this program, the following conditions must exist: - The mortgage loan is a first lien conforming conventional mortgage loan that was originated on or before January 1, 2008. Jumbo-conforming mortgage loans are also eligible.
- The mortgage loan is at least three full payments past due (or at least six payments in the case of a biweekly mortgage loan). This may include loans in foreclosure.
- The mortgage loan is secured by a one-unit property that is the borrower’s principal residence (two- to four-unit properties are excluded).
- The current mark-to-market loan-to-value (LTV) ratio is equal to or greater than 90 percent based on a valuation provided by Fannie Mae or an appraisal, or an estimated sales price from a broker’s price opinion (BPO). (Refer to the “Determining Mark-to-Market LTV” section for additional information.)
- The borrower documents a financial hardship by completing the Streamlined Modification Program Hardship Affidavit (Form 1023) and by providing income information. The documentation supporting income may not be more than 90 days old (as of the date the servicer is determining SMP eligibility).
- The borrower agrees to set up an escrow account for taxes and insurance prior to the beginning of the trial period if one does not currently exist and, in the event the escrow analysis uncovers a shortage, the servicer shall fund the shortage. The borrower agrees to pay the servicer any shortage amount over a 60-month period.
- The mortgage loan is not insured or guaranteed by a federal government agency (FHA, HUD, VA, and Rural Development mortgage loans).
- The mortgage loan is not a daily simple interest mortgage loan.
- The property securing the mortgage loan must not be abandoned, vacant, condemned, or in a serious state of disrepair.
- The borrower on the mortgage loan is not currently subject to a performing repayment plan or a loan modification or other workout relating to the applicable mortgage loan.
- The borrower must not be currently involved in litigation regarding the mortgage loan other than a routine foreclosure action.
- The borrower must not be currently involved in a bankruptcy proceeding.
- Borrowers who have received a Chapter 7 bankruptcy discharge in a case involving the first lien mortgage are eligible, but if the borrower did not reaffirm the mortgage debt under applicable law, the following language must be inserted in Section 1 of the SMP Agreement: “I represent that I was discharged in a Chapter 7 bankruptcy proceeding subsequent to the execution of the Loan Documents. Based on this representation, Lender agrees that I will not have personal liability on the debt pursuant to this Agreement.”
- Regular servicing option MBS pool mortgages and portfolio mortgage loans subject to lender recourse are ineligible for a Fannie Mae SMP. (Servicers are encouraged to offer the SMP for these mortgages; however, when a servicer decides to use the SMP for such mortgages, the servicer will be expected to obtain any third-party approvals and Fannie Mae will not be responsible for any losses or expenses the servicer incurs and will not pay incentive fees for these mortgages.)
The entire announcement can be found under Documents and Downloads.
Last Updated on Thursday, 15 January 2009 20:13
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Take Bruce's Challenge
Monday, 24 November 2008 18:40
Bruce
Norton
Let's face it. If you are not interested in owning your own business, or at least in doing some advanced kinds of investing you wouldn't be here. Every worthwhile endeavor requires some planning. And in order to plan, you need to know as much about as possible about the environment, and variables within which you will be working. It is a no-brainer that you need to know your market, your competition, the needs of your potential customers or clients, and your product better than everyone else. But there is one variable that is integral to your success that you have taken for granted. You have done this because you think you know about this variable better than anyone else. But do you? This final variable is YOU. You think you know yourself really well. Well, I would argue that you don't know yourself as well as you think you do. Please, for your sake, keep an open mind here. There is a reason most businesses in America fail. Every small business in America is started by someone who would tell you that they know themselves better than anyone else. The vast majority of those businesses will fail not because of a lack of trying, and not because of a lack of expertise, and not because of hard economic times, but because the person who started that business thought they were someone they were not. It is because of this exercise that I changed my entire business model. This is the most profound and meaningful thing you will ever do in your business. I invite you to take Bruce's Challenge™. Bruce's Challenge™ - You need the ability to move words and sentences around. If you want to do it on a computer, you can use Word, Excel, or OneNote(preferred). If you want to stick to pencil and paper, you can use Post-It notes and a large board to move them around. Regardless, you will want to be able to change the order of what you write or type.
- Start putting down concepts. One concept per line (Word), Cell (Excel), or Post-It.
- Ethics - "Do what is right."
- Products - "Widget"
- Business Objectives - "Make a profit."
- Morals - "Treat others well."
- Faith - "Keep the Sabbath."
- Personal Goals - "Spend more time with family."
- Things To Avoid - "Hurting Others."
- Now here is the really tough part: Arrange all of these things in order of priority based on your wants and needs right now. You can only have one list. It is NOT one list per category, but one list period. So you have to decide what is more important to you right now keeping the Sabbath or making a profit? Is it more important to make a profit or avoid hurting others? Is the Widget more important or doing what is right?
- Now take a look at your list of priorities. What does it say about you?
- How do you think the list should look?
- Now, if you want to make some adjustments in your list of priorities do it.
- Hold on to this list. As you have to make decisions in your business, refer back to this list to help you make the decisions that will correctly reflect what is most important.
- What have you learned about yourself? Please email me at
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with what you learned. I would love to know.
As you work in and on your business, this list may change slightly. Feel free to adjust it as your priorities and needs change. Thank you for taking Bruce's Challenge™. I hope it makes a huge difference in your business. Bruce..
Last Updated on Saturday, 06 December 2008 19:10
The Inner Circle Document Repository Is The Largest In The Industry
Thursday, 20 November 2008 17:28
Bruce
Norton
In research we recently conducted regarding the Document Repository available to "Dr. Preforeclosure's" Inner Circle members, we were able to conclude that we have the largest repository of documents in the industry. The library of documents has grown to more than 52 documents and forms and is still growing. While some documents are specific to the State of Maryland, most are not. Most of the documents are usable across the country and most are free to our Inner Circle members. As you know from listening to conference calls, reading my blogs, and hearing me speak publicly, I am a firm believer in community. The "Dr. Preforeclosure" Inner Circle community is no exception. This is a growing community of real estate investors who believe in making money honestly and ethically and in doing so make a difference in the lives of the people they touch while they become wealthy. There is no better evidence of the commitment of the community to teamwork and success than the huge growth of our document repository. I want to personally thank Michelle Schoen, my assistant and Inner Circle member; Lisa Wood, Inner Circle member; and Arnold Politzer, Esq. one of our attorneys for the work they put in to create this repository of documents. Their commitment to teamwork and their willingness and eagerness to share resources is astounding. Without their help, this resource would not be as valuable as it is. Thank you.
Last Updated on Thursday, 20 November 2008 17:48
Welcome To Our New Look
Thursday, 23 October 2008 20:22
Bruce
Norton
Hopefully you see a major change as you look at the Exclusive Member Only Website today. As I was adding menu items to the previous website it occurred to me that it was getting more difficult to navigate. As a result, I decided to do some work on infrastructure and make the website easier to use. This is the result. I still have some tweaks to do, but from a functionality standpoint I hope you will agree with me that this new site is easier to navigate. Please provide me with your feed back by voting in the poll to the right. Also, check out the documents and downloads section of the Inner Circle Resources. You will see a new category under short sales where you can find documents that are lender specific that they will require in your short sale packages. Don't forget to visit the Community Forum and look at the hands on training section. When you can answer the question, please post the answer as a reply to the topic thread. Enjoy the new site. Bruce..
Last Updated on Thursday, 23 October 2008 20:41
"Dr. Preforeclosure" Launches Inner Circle - Bronze
Thursday, 18 September 2008 02:12
Bruce
Norton
Dan is an Inner Circle member. Click here to hear what he has to say about the Inner Circle. The Inner Circle - Bronze membership is our entry level membership in the Inner Circle membership program. It is designed for the beginning investor who wants to learn the fundamentals of real estate investing. The focus on the program is to build the foundation on which the beginning investor can build all future real estate investments. Inner Circle - Bronze training is completely self paced so the beginning investor can learn at a rate that is appropriate for his learning ability. It is designed so that the investor who is still learning the fundamentals can build a foundation of quality education and skills that create income and is the key to all future investing while the investor is still learning while keeping an eye on affordability. As an Inner Circle - Bronze member you are rewarded with the following privileges: Exclusive access to Inner Circle - Bronze training Exclusive access to Inner Circle - Bronze areas on "Dr. Preforeclosure's" member website Monthly teleconference calls to discuss the latest events that affect your pre-foreclosure investing activities A monthly newsletter mailed to your door with timely hints and strategies to make you more successful You will get unlimited email access to me so you can get your specific questions answered privately and confidentially by me **NEW** You will get the electronic versions of our physical course work INCLUDEDSpecial access by referral to my team (Often with a discount in service fees)**NEW** "DR. PREFORECLOSURE'S" LENDER INTELLIGENCE REPORTS PUBLISHED EVERY SIX (6) MONTHS!
This Membership Automatically Renews Monthly
Membership has its privileges. Activate your Inner Circle - Bronze membership today!
Your membership dues are only $19.97 per month with a monthly subscription through PayPal or $29.97 per month using offline payment methods Otherwise, login for more information
Last Updated on Tuesday, 15 June 2010 17:02
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