090328 re presentation
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Seminar Credit Repairs by Indriati Oei, in IndonesianTRANSCRIPT
REAL ESTATE DI DALAM
“BAIL OUT” Tips and tools for navigating today’s economy
Who We AreAPRIL is a professional services group that specializes in three major industries: real estate (INTERO), mortgage, and insurance. We’ve been in the business since 1984. Our mission is to create lasting relationships within a “customers first!” environment based on mutual respect, trust, and integrity. Since our inception, we have partnered with our clients in their pathways to success and self-fulfillment.
Insurance & Mortgage Services
Bagaimana… Mencegah Foreclosure Membeli atau Menjual Rumah yang
Short Sale Membeli Rumah yang Bank Owned UU baru akan Membantu Anda Mendapatkan Bantuan dari
Pemerintah untuk membeli Rumah Mengurangi Mortgage Payment Anda
tanpa menjual rumah (no fee) Memberbaiki Kredit Anda Invest Rumah di Sacramento
How to Avoid the Foreclosure Trap – Limin Tjandrajati
Bagaimana Mencegah Foreclosure
BYMBA Statistic
Tips for Avoiding Foreclosure
Don’t ignore the letters from your lender Contact your lender immediately Know your mortgage rights Contact a HUD-approved Housing Counseling
Agency Prioritize your spending Avoid foreclosure prevention companies Don’t lose your house to foreclosure recovery
SCAMS! Equity Skimming Phony Counseling Agencies
What are your alternatives?
Special Forbearance
Mortgage Modification
Partial Claim
Pre-Foreclosure Sale
Deed in Lieu of Foreclosure
Short Sale
How to Buy or Sell Short Sale Homes – Ronny Budiutama
Bagaimana Membeli atau Menjual Rumah yg Short Sale
Short Sale Properties
DEFINITION
A real property sales transaction wherein the seller’s mortgage lender agrees to accept a loan payoff of less than what is owed.
Why Lenders Accept Short Sales
Lenders want to minimize its losses
When Lenders receive Properties, they incur costs and responsibility for property taxes, maintenance and other fees
Timeline to foreclose a property requires at least 6 months after seller’s first missed payment (Short Sales might be completed within 2 months)
It’s costly for lenders to foreclose on properties
Disadvantages
Takes more time than a regular sale (approx. 2 months more)
Lenders are not obligated to agree to a short sale They may opt for a foreclosure if they
believe they can get more money Accepted offer by the Seller may not be
accepted by the Lender. Seller might continue to send higher and more attractive offers.
Advantages
Property is maintained when Seller Occupies the property.
You can get the property at a discounted price.
Short Sale Process
Things to Know About Short Sale
The Lender may or may not approve offers. The lender will appraise the property.
The decision on prices will be up to the lenders/short sale negotiators.
Buyers need to wait from 1 months to 3 months to get lender’s approval.
Offers to be submitted with pre-approval letter and proof of funds.
How to Buy Bank Owned/REO Properties – Joachim Bucker
Bagaimana Membeli Rumah yg Bank Owned (REO)
BANK
Definition
REO = Real Estate Owned
It is a property which is in the possession of a lender as a result of foreclosure.
Advantages of buying a REO
Fast answer from Lender Short Turnaround Low Price
Disadvantages of buying a REO
Property may be in poor condition Few Disclosures, if any Property could stay active as a listing through the
process Some Lenders can reserve the right to cancel anytime Some Lenders have their own contracts (in their favor) Lender chooses its own Title/Escrow Company After acceptance, short contingency period (5 to 7 days) Removal of all contingencies within 10 days
REO Buying Process
Buyer-Agent-Agent-Lender. Acceptance within 48 hours Buyer has 48 hours to review and accept Lender’s contract 7 days to do Home Inspection, remove Contingency After 7 days, remove Loan and Appraisal Contingency All Contingencies removed within 10 days The process is done within 30 days net, any extra day may
be fined $150 to $350/day
Issues
Buyer must be prepared and pre-approved with a Lender
Financing must be ready to go because within 7 days, the Loan Contingency will be cleared
How the government can help you buy a home – Jackie Oei
Bagaimana Pemerintah Baru Akan Membantu Anda
Stimulus Bill 2009 Overview Passed through Congress and signed into law by
President Barack Obama on February 17, 2009 Various provisions including:
Tax relief for individuals and companies Healthcare Education Infrastructure Investment Aid to low-income, unemployed, and retirees Energy Housing Scientific Research
Housing Provisions Included in Tax Relief for individuals Homebuyer Credit: $8000 credit for First Time
Homebuyers if home is bought between 1/1/2009 and 12/1/2009
Home Energy Credit: For homeowners who make their homes more energy efficient in 2009, they can receive credit for 30% of the cost up to $1500 i.e. Installing energy efficient windows, doors,
furnaces and air conditioners $12.7 Billion for Other Housing Provisions
Who qualifies for the Credit?
Homebuyer Credit First time homebuyers meaning you have
not owned a home for the past three years Home bought between 1/1/2009 and
12/1/2009 Credit phases out as your income increases
starting at $75K for singles and $150K for couples
Apply by filing your income taxes and claim it on your tax return
California Tax Credit 2009 New Homes/New Construction bought
between March 1, 2009 – March 1, 2010 $10,000 Tax Credit No Income Restrictions Anyone can apply, does not have to be a
FTHB
Below Market Rate Units (BMR)
New construction required to set aside 15% as BMR units for more than 5-unit developments
Must be sold to low to moderate-income households
Price is restricted by City if you resell (lower appreciation)
Works on a lottery system
Below Market Rate Units (BMR)
Down payment Assistance Loan Program
Financed through Mayor’s Office of Housing (MOH) DALP will act as a second loan to an approved first
mortgage lender Term will be deferred for 30 years, due on sale or title
transfer Maximum loan amount is up to $150,000 or 30% of the
purchase price, whichever is less Only for market rate units, does not include BMR Size of household must be compatible with size of
property being purchased Repayment proportional to amount borrowed
Applicant Eligibility
Borrower Must: Be a First Time Home Buyer purchasing a Single Family Home in San
Francisco Meet Income Limits Qualified Household Member Minimum 2.5% Down payment, not including Closing Cost Asset/Reserve Limitation Qualify for First Mortgage with an approved lender Homebuyer Education Certificate Owner Occupied
DALP Income Limits
Household Size
1 2 3 4 5 6 7
80% AMI $52,800 $60,350 $67,900 $75,450 $81,500 $87,500 $93,550
90% AMI $59,400 $67,900 $76,350 $84,850 $91,650 $98,450 $105,250
100% AMI
$66,000 $75,450 $84,850 $94,300 $101,850 $109.400 $116,950
110% AMI
$72,600 $83,000 $93,350 $103,750 $112,050 $120,350 $128,650
120% AMI
$79,200 $90,550 $101,800 $113,150 $122,200 $131,300 $140,350
Maximum Loan Limits
Household Income
80% AMI and
under
81%-90% 91% - 100%
101%-110%
111% - 120%
Subsidy Up to $150,000
Up to $135,000
Up to $120,000
Up to $105,000
Up to $90,000
Maximum DALP loan amount is up to $150,000 or 30% of purchase price whichever is less. The loan amount will be determined based on the applicant’s income, assets, size of household and debt to income ratio
Purchase Price capped at $625,000
Loan must be 30 years fixed, fully amortizing
Next Steps
List of Approved Housing Counseling Agencies
Asian, Inc.
www.asianinc.org
Mission Economic Development Association (MEDA)
www.medasf.org
San Francisco Consumer Credit Counseling Service of San Francisco (CCCSF)
www.housingeducation.org
San Francisco Housing Development Corporation (SFHDC)
www.sfhdc.org
San Francisco Urban Community Housing Corporation (SF Urban CHC)
www.sfurbanchc.org
How to lower your mortgage payment without selling – John Oei
Lower your Mortgage Payment
What is Loan Modification?
1. Lower the Interest Rate (by 1/8%)2. Reduce or Defer the Principal3. Extend the amortization period4. Soon…..Mortgage Credit Certificate
(MCC)Part of the Stimulus Plan 2008
Who Qualifies?
1. Must have Financial Hardship2. Owns a Home as a Primary Residence
More solutions for Homeowners, less for investment properties.
Laws & Regulations CA ABX2 7 Foreclosure Moratorium 1. Imposes a 90 day foreclosure moratorium to allow
distressed homeowners time to work out loan modifications with their lenders.
2. Allows lenders to avoid the moratorium if they have a comprehensive loan modification program based, in part, on criteria set forth by the Federal Deposit Insurance Corporation. Loans may be modified several ways, including interest rate reductions, extension of the loan term, or principal reduction.
3. Provides oversight and accountability by requiring regular reports to the legislature on loan modifications and foreclosure reductions, and coordination with appropriate state regulators.
Foreclosure Timeline
Intent for Notice of Default
Sent
30 Days
Notice of Default
Recorded
90 Days
Notice of Trustee’s
Sale
2 weeks
Trustee’s Sale If no bid,
forecloses and becomes REO
If Owner occupied:
□ 3 Days notice to pay rent or quit
□ 5 Days Summon
□ May take more than 1 month to be evicted
What is Hardship?
Divorce Loss of Income / Loss of Job Sickness Disability Others…. Need to make Hardship Letter
Lower Interest Rate
Lower to 1/8 % and compare if you have 31% of your income for paying PITI, principal, interest, tax, insurance.
Reduce / Defer Principal
Reduce principal amount to Market Value of the House
Extend Amortization Period
Extend to 50 years or more to reduce the monthly payment
Mortgage Credit Certificate
Qualify only if you have Mortgage Credit Certificate
First Time Home Buyer (does not own a home for 3 years).
Annual tax credit of 15% of the annual interest paid on the mortgage.
Income Limit and Purchase Price Limit
Income Limit
Size of Household Non-Targeted Area Targeted Area
For 2 persons $ 135,720 $ 135.720
3 or More $ 158.340 $ 158.340
Purchase Price Limit
Type of Property Non-Targeted Area Targeted Area
Existing Home 696,118 850,810
New Home 601,950 735,716
Example of Reduce the Interest Rate
Effective Interest Rate Without MCC With MCC
First Mortgage Amount $300,000 $300,000
Mortgage Interest Rate 5.75% 5.75%
Term 30 30
Monthly Mortgage Payment Principal
$313.22 $313.22
Interest $1,437.50 $1,437.50
MCC Rate N/A 15%
Monthly Credit Amount N/A $215.63
Effective Monthly Mortgage Payment
$1,750.72 $1,535.09
Effective Interest Rate 5.75% 4.58%
Intake Form
Information on Home Being Foreclosed:
(Yrs Purchased, Mkt Value, Loan Bal, Int. Rate) Take Home Income Plus Other Income (Rental
Income) Monthly Expenses Net Income after paying expenses (-$ 400)=
Available to pay the mortgage. Mortgage Debt to Income Ratio (31-38%) Living Expense Ratio (41-48%)
Documentation
□ Hardship Letter□ Financial Statement & Intake Form□ W2, 1040, 1 month of Pay Stub□ Bank Statements to all account□ If Self Employed:
□ Personal tax Return and Corporate tax return
□ Profit & Loss Statement
Program Requirements
Buyers Eligibility: First time Homebuyer (Non-Targeted
Area), For Targeted Area, not required be first time homebuyer.
Meet Income Limits Owner Occupancy Homes must be in San Francisco Pay $ 400.00 to the City & County of San
Francisco
How to Increase your Credit – Vonny Oei
Bagaimana Memperbaiki Kredit Anda
CREDIT CONTROLS LIVES
Limit or expand our financial stability
Increase or decrease the quality of life you are living
Open or close doors to employment opportunities
Affect your income by way of interest rates
Limit or expand your purchase choices
What is a credit report? Your credit report is a snapshot of your credit
history It, almost by itself, will determine your eligibility
for future credit One of the main determinants on the report is
your credit score, a distillation of your credit history into a three digit number
This number is called the FICO score. It is named after the Fair Isaac Corporation, who invented the computer software used to derive it.
Provides risk assessment software to the 3 bureaus –
Equifax, Trans Union, & Experian
FAIR ISAAC COMPANY
Let’s Remember the Names
There are now FOUR credit bureaus:
Experian Equifax (TRW) – they had the first database TransUnion PRBC
□ Relatively new, about FIVE years old
□ Reports Non-Traditional Credit such as rent, cellphone, and insurance bills
□ Has its own 3 digit score
http://prbc.com
The credit bureaus will assemble data reported to them from utility companies, credit card companies, banks, credit unions, mortgage companies, and other lenders
When an account is started at a lender, it is reported to the credit reporting agencies
Each month the account is open, the lender sends a report to the credit reporting agency
Lenders, landlords and employers then purchase reports to assist them in assessing credit risk
Usually all three credit reporting agencies get the same information but not all the time
On occasion, an entry will show on one agency’s report that is absent on the others
You can now receive a free copy of your credit report from each of the three credit reporting agencies once a year. You should take advantage of this opportunity
Stagger your requests so you can receive a report about once every four months.
Note any changes or incorrect entries and evaluate them. If they are incorrect, take action at once.
What is on your Credit Report?
Your Address and past addresses Your Social Security Number Your Telephone Number
Credit items that are reported include both positive and
negative credit activity
Negative Credit Items:
Late payments Foreclosures Judgments Collections And any other negative factors
FICO Credit Scores
Credit scores and risk levels perceived by lending institutions:
Excellent: Over 750 Very Good: 720 to 749 Acceptable: 680 to 720 Uncertain: 620 to 679 High Risk: less than 620
Note: FICO scores are viewed differently by individual institutions according to each institution’s internal policy
How Many Points Do I Lose?
Trade Line Payments (8-20 Points) Late Payment on Mortgages (15-45 points) Paid/Unpaid Collections (15-30 points) Judgments (20-30 points) Federal and State Tax Liens (20-30 points) Foreclosure (45 points or more) Bankruptcy (70-100 points)
How Many Points Do I Lose?
Trade Line Payments (8-20 Points) Late Payment on Mortgages (15-45 points) Paid/Unpaid Collections (15-30 points) Judgments (20-30 points) Federal and State Tax Liens (20-30 points) Foreclosure (45 points or more) Bankruptcy (70-100 points)
□ 35% Payment History
□ 15% Length of Credit History
□ 30% Amounts Owed
□ 10% New Credit
□ 10% Types of Credit in Use
How do “Inquiries” count? HARD INQUIRIES
Only “permissible use” credit inquiries count against you including credit card offers
SOFT INQUIRIES
Credit reports you pull yourself or from a consumer site do not count
For Mortgage or Auto Loans: FICO counts multiple inquiries during a 14 day period as just once inquiry
- You should secure an account ASAP
How long does it stay on report?
BK 7, 11, 13 10 Years
Collections 7 Years
Public Record 10 Years
(Except Trans Union) 7 Years
Inquiries 2 Years
Know Your Rights!
Homework: Look for the following:1. Fair Credit Reporting Act
2. Fair Debt Collection Act
3. Fair Accurate Credit Transaction Act
4. Fair Credit Billing Act
5. HIPPA Act - Health Insurance Portability and Accountability Act
We are an affiliate office of:□ Over 15 years’ combined training and experience in specialty industries:
real estate, mortgage, debt management, and credit enhancement
□ Offers financial solutions and financial recovery strategies
□ Simplifies and deconstructs the complexities of credit-related and business growth issues.
□ Assesses the clients’ needs and recommends alternative choices and customized solutions packages
□ New York Times’ bestseller, “Debt Cures,” by Kevin Trudeau, mentions some of Clear Credit Exchange’s advice for the credit-challenged
□ CCE’s President and CEO also wrote the foreword to Jamaine Burrell’s book on “How to Repair Your Credit Score Now.”
□ The Clear Credit Exchange and Corporate Genesis offices are located in Santa Clara, California
You can do this on your own
OR
You can ask the Professionals for help!
How Can We Help You?
1. Call us with your questions
2. When appropriate, you will give us permission to pull your credit report. A dedicated April Financial Processor will work with you
3. We will have a strategy session for the next steps