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March 2011 Archives

No More MERS Foreclosures?

Freddie Mac bulleting 2011-05 states No More MERS foreclosures.
MERS must transfer the interest it holds as indentured trustee (or whatever) to the actual loan services.

Help for HAMP Applicants?

Mortgage borrowers who are turned down for loan modifications may now get additional information that could help them understand why they didn't qualify under the so-called "HAMP test."

How Many Points in Your Wallet?

According to Fair Issac Company (My FICO) a company that provides analytic, decision making, and credit scoring services for financial service companies a credit score will go down by 40 to 110 points after being 30 days late. Further, the scoring drop will increase to 70 to 135 points after 90 days late on a mortgage payment.

'Assumumptions' are 'Subject to' all Kinds of Factors...

This article analyzes the unspoken stifling effect the due-on-sale clause has on the California real estate market. It was published by firsttuesday online - and is one of the best, plain language, explanations of the due-on-sale clause I've seen in a long time. first tuesday posits that the due-on-sale restrictions hampers California's real estate recovery. It may well be right. Read on!

Fed’s New Compensation Rules: Ouch!

The Federal Reserve Board has amended Regulation Z, which implements the Truth in Lending Act and Home Ownership Equity Protection Act, with new policies for how loan originators may be compensated.
Effective April 1, 2011, all loan originators will no longer be able to receive compensation based on the interest rate or other loan terms, but instead be compensated based on a percentage of the loan amount.
The final rules protect mortgage borrowers from unfair, abusive, or deceptive lending practices that can arise from loan originator compensation practices.
The final rules, which apply to closed-end loans secured by a borrower’s home, will:
·Prohibit payments to the loan originator that are based on the loan's interest rate or other terms. Compensation that is based on a fixed percentage of the loan amount is permitted;
·Prohibit a mortgage broker or loan officer from receiving payments directly from a consumer while also receiving compensation from the creditor or another person;
·Prohibit a mortgage broker or loan officer from "steering" a consumer to a lender offering less favorable terms in order to increase the broker's or loan officer's compensation; and
·Provide a safe harbor to facilitate compliance with the anti-steering rule.
This policy eliminates yield spread premium as of April 2011, and will be a very significant change to the lending business. There will be a drastic reduction in mortgage broker profitability unless they increase their loan origination fees to cover the change.

The MERS Mess - Continued...

The California court of appeal has spoken!  No more of the nonsense about MERS not having the ‘right’ to foreclose because it doesn’t hold the note.

Markets Up or Down?

"There is no consistency," says Lawrence Yun, chief economist of the National Association of Realtors.   "In one quarter, a market may see a price increase and the next quarter a price decrease."

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