Refinance Free Credit

Wilbur Ross, the billionaire investor that last year snapped up the servicing platform of failed mortgage lender American Home Mortgage, has committed up to $1 billion in capital to AAA-rated bond guarantor Assured Guaranty Ltd.

WL Ross & Co. LLC will purchase $250 million in common shares of Assured, with a company option to purchase up to an additional $750 million should the monoline decide to add further capital within the next 12 months, the bond insurer said in a press statement Friday.

The investment is an opportunistic one by Ross, rather than an investment into a troubled monoline, and is contingent on Assured maintaining its AAA-rated status.

“We believe that Assured has an excellent opportunity during this time of uncertainty in the financial markets to provide investors with credit enhancement products in both the public and structured finance markets,” Ross said.

Assured has managed to steer clear of much of the ratings stress that has plagued most of the bond insurance industry, with all three rating agencies affirming the company’s AAA rating in the past few months; Assured did not underwrite meaningful volumes of ABS CDOs in recent years, as it exited the mortgage guaranty business in 2005.

As the bond insurance industry faces historic upheaval, some insurers are seeing an opportunity to buld market share as industry leaders MBIA and Radian falter amid questionable structured finance deals. Ross’ investment comes as Assured looks to capitalize on its relatively more stable ratings presence, and as Warren Buffet’s Berkshire Hathaway has recently entered the market for munipal bond insurance.

For more information, visit http://www.assuredguaranty.com.

How does $11 billion roll off your lips? I find it a little sickening to try saying the words “lost $11 billion” and it’s not even my money. AIG reported today that not only did it find a way to lose $5.29 billion bucks this quarter; but it also reported a charge of $11.12 billion for credit derivatives going bad - like really bad.

From the Market Watch story on the massive AIG credit derivative charge down:

 

American International Group reported a $5.29 billion fourth-quarter net loss late Thursday after the insurance giant took a big charge related to the estimated market value of credit derivatives.
AIG shares fell 2.9% to $48.70 during late trading after the results.

The net loss was $5.29 billion, or $2.08 a share, vs. net income of $3.44 billion, or $1.31 a share, a year earlier, the company said. The adjusted net loss for the fourth quarter of 2007 was $3.20 billion, or $1.25 a share.

AIG was expected to make 60 cents a share, according to the average estimate of 17 analysts polled by FactSet. The estimates varied widely though, ranging from a loss of $1.20 a share to a profit of $1.68 a share.

The fourth-quarter result included a pre-tax charge of roughly $11.12 billion from a net unrealized market valuation loss related to the super senior credit default swap portfolio of the company’s AIG Financial Products Corp. derivatives unit.

AIG said these unrealized valuation declines aren’t indicative of the actual losses the unit may realize over time. Any credit losses that do occur in future won’t have a big effect on AIG’s overall financial condition. However, the insurer also noted that credit losses that may be realized by its derivatives unit could have a material effect on operating results in specific future reporting periods.

Indeed, AIG’s fourth-quarter results included realized pre-tax losses of $2.63 billion from its investment portfolio and another $643 million of pre-tax losses related to securities that were held for sale by its derivatives unit.

I’ll be your huckleberry. The net operating loss dwarfs the losses posted by Freddie Mac and are a far cry from the paltry $3 billion in write downs that UBS first took back in August that everyone said were “conservative” and meant to “clean out the system in one fell swoop.” Yeah right. Look for more of this.

I’ll have more later on this weekend once I pick my jaw up off the floor.

photo credit: Darcy Knoll

Freddie Mac, the nation’s second-largest government-sponsored enterprise, said Thursday that it lost a record $2.45 billion, or $3.97/share, during the fourth quarter of 2007. The loss pushed the GSE to a $3.1 billion net loss, $5.37/share, for the full year.

“Today’s economy represents one of the most severe housing downturns in American history,” said Freddie CEO Richard Syron, in a press statement.

“We remain extremely cautious as we enter 2008,” he said. “If the economy weakens substantially from here–a possibility for which we need to be prepared as a company–it will have a further negative effect on homeowners across the country and drive credit costs higher.”

Credit costs are already high at Freddie, which reported realized credit losses at an annualized rate of 5.4 basis points of the total mortgage portfolio, or $236 million, during the fourth quarter, as more borrowers found themselves defaulting on their mortgage obligations. Total credit costs stood at 3.0 basis points, or $126 million, one quarter earlier.

Beyond the effect of increasing credit costs, Freddie also absorbed $1.3 billion in losses on its credit guarantees, primarily related to higher expected future credit costs, it said.

As a result of the continuing deterioration in the U.S. housing market, the GSE said Thursday that it had revised its estimate of total credit losses for 2008 and 2009 to $2.2 billion and $2.9 billion, respectively. By way of comparison, total credit losses for all of 2007 were just $499 million.

ABS exposure, delinquency and defaults
Freddie Mac’s $154.1 billion ABS investment portfolio is highly exposed to subprime RMBS, with $100.3 billion of the total portfolio invested in subprime — the GSE reported that 21 percent of the subprime loans backing the senior positions it holds are 60 or more days delinquent.

The portfolio has seen quick deterioration to start the new year: 96.7 percent of the subprime MBS held by Freddie were rated ‘AAA’ at the end of 2007. As of February 25, however, less than 82 percent of those same bonds retained that same ‘AAA’ rating, underscoring that the credit crisis affecting mortgage markets nationwide has yet to subside.

Non-performing assets at Freddie jumped 93 percent during 2007, Freddie said, while REO volume jumped 63 percent. At the end of 2007, Freddie Mac reported 14,394 properties in REO inventory, compared to 8,785 one year earlier.

Freddie Mac’s shares closed down 2.4 percent, to $24.49, on the New York Stock Exchange on Thursday.

Notes

Much like sister GSE Fannie Mae, Freddie Mac buried analysts under a mountain of financial reporting data that had one remarking “if this is what regulators have mandated, I want a new mandate for brevity” … despite the losses, Freddie Mac CFO Buddy Piszel said the GSE is well capitalized to ride out an extended downturn in the U.S. housing market.

Disclosure: The author held no positions in FRE when this story was originally published. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.

Believe it or not, many people do not understand equity and the power it provides.In its purest form, equity is money. With regard to real estate (specifically, your house or other investment property), equity is measured in terms of the value of the property minus what you owe. So, if... Read More

And along with the tax man come the inevitable new breed of scam artists. Be on guard - criminals who want your personal information use this hectic and confusing time of year to prey on unsuspecting individuals.

Watch out for unscrupulous scammers, who are sending emails that appear to be from the IRS. The content of the emails are often written to persuade you to link to a website that will allow you to update your data or receive important information. Remember, these phony emails are quite sophisticated, and the links send you to what usually appear to be legitimate IRS or government websites. In reality, they are not. These sites will prompt you to divulge private information under the guise of the IRS requiring it, to offer a larger refund, or sometimes, ironically, to protect you from identity theft or loss of privacy.

There are some simple steps you can take to avoid falling prey to one of these scams.

Always Be Suspicious of Emails. Remember, the IRS does NOT initiate communication with taxpayers through email, but rather through the regular mail. If you receive an email that says it's from the IRS, you should immediately be suspicious and should forward it in its entirety to the IRS, so that they can take steps to shut down the fraudulent and bogus websites. The IRS requests that you forward all questionable emails to phishing@irs.gov.

Double Check the URL Address. Keep in mind that all IRS websites begin with the following web address: http://www.irs.gov/. So, if you ever click a link in an email or visit a website that you believe is related to the IRS, the first thing you should do is confirm the website begins with the correct URL address. Remember, sometimes it may "look" legitimate, but is actually an imposter site that is "phishing" for information. So always, always double check the actual URL address before you type any information in the site.

Exercise Extreme Caution with Attachments. When it comes to questionable emails, the best practice is to never open any attachments. That's because attachments are an extremely common method that hackers use to infect your computer with programs that may harm your computer or steal your personal information--often without you even knowing!

In today's technological environment, electronic communication offers us tremendous speed and convenience. But it can also be used for unethical purposes by scammers. Most organizations have worked very hard to put strict privacy policies in place. As a result, government agencies and financial institutions will rarely, if ever, ask you to divulge personal information via email.

If you receive any email asking for personal information of any kind, you should immediately be suspicious. When in doubt, call the customer service lines listed on your statements or documents and discuss the email that you received.

Within the past month or so, I have received numerous calls concerning this question.  Simply put, the answer is "YES!" I've taken the time to read some other posts and articles online and I'm amazed at the misinformation that exists on this topic.  It amazes me how misinformed the general public is on this topic.  What've even worse, it seems most mortgage and real estate professionals alike lack a great deal of knowledge on understanding bankruptcy as well.  Many of the borrower's that I have worked with in the past and am currently working with have expressed that they've applied or consulted several other mortgage professionals.  They were all turned down cold or told to come back 2 years after their Bankruptcy was discharged.  

Imagine experiencing temporary loss of sight or pain in your eyes.  Would you consult a foot doctor or an eye doctor? Keep in mind, they are both Doctors. Most of us wouldn't dare visit a foot doctor for a problem with our eyes.  We'd make sure to consult  a qualified optometrist (eye doctor).  Now ask yourself, why people don't seek mortgage professionals who specialize in Bankruptcy, Foreclosures or ARMs (Adjustable Rate Mortgage).   They most often just call any mortgage company or professional.  What's worse most mortgage professionals don't specialize in dealing with Bankruptcies.

Well here's some additional info that you may find useful when it comes to Refinancing your home while in Bankruptcy.  It is possible to refinance your home while in Bankruptcy.  It's also possible to refinance your home while in Bankruptcy and get a mortgage rate that is comparable to current market rates.  No double digit or SubPrime rates necessary.  I thought many of you might like to hear that as well :)

The moral of this story is... Yes it is possible to Refinance your home while in Bankruptcy.  Whenever possible, make sure you accept, receive or seek Bankruptcy mortgage advise and/or counsel from a mortgage professional that specializes in working with Buyers or Homeowners who have a Bankrutpcy or other credit issues. 

As always if you have questions, comments or concerns feel free to post a response here, email via my website, instant message or call me via the information directly below.

Professionally yours,

Steph Love - www.StephLoveTV.com
Steph’s Blog - www.StephLove.wordpress.com
E Pluribus Unum - Out of Many, One
Toll Free Phone # (800) 985-1827 ext. 88
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Who has the best mortgage rates in Charlotte? The answer to that is not so easy. Everyone claims to have the best mortgage rates, but that is very subjective.

A mortgage rate is more than just a number. Often times there are additional fees and charges associated with obtaining a mortgage rate. You must consider the costs associated with a rate to determine if it is a realistic offer. These fees could include discount and origination points, application fees, processing fees, document fees, and a host of other fees.

Many "experts" and consumer advocates suggest that you should "shop" rates. They instruct you to call several mortgage companies and ask for their "best rate." Unfortunately, this tactic can backfire. When speaking to most loan officers, if you ask for the best rate without going through the qualification process, you may not get the real deal as it applies to you. After talking to several loan officers, you can easily come away with conflicting and confusing information and feel lost.

Add to that the current mortgage marketplace is in a constant state of flux. Rates are changing 3 to 4 times a day. And to make it more confusing, it may go up and down in the same day more than once. So you call the first mortgage company and they give you a good number. You call 4 more and the rates just seem to be higher, so you finally call the first one back and they can no longer offer the same rates. Now you are frustrated, confused and in many cases you could feel tricked or lied to.

My advice is to find a loan officer that actually stops and interviews you. A loan officer that will take the time to get to know who you are, what your goals are, and how you would like to accomplish those goals is the loan officer that will get you the best mortgage rate in Charlotte. This loan officer knows that they must be competetive with rates, but also has your best interests at heart. That's why they ask the questions.

So when "shopping" for the best rate, focus on finding the best loan officer. This person will get to know your circumstances and can become a partner for life in achieving your goals.

Ed Nailor

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Brought to you by the Ed Nailor Mortgage Team. Apply online to get the best advice to fit your needs. Or call 704-651-8704

Ameristar Mortgage, your local Wisconsin mortgage broker, offers fha loans, va loans, first time home buyer, jumbo loans, refinance, cash out refinance to 100% with no PMI, rural housing, my community mortgage, home possible, no money down, 100% financing, stated income stated asset.

 Visit www.AmeristarMadison.com for detailed program information or to apply online:

Contact Information:

Ameristar Mortgage
Dennis Hardy
dhardy@ameristarmadison.com
(608) 242-0826
www.AmeristarMadison.com

Every person in life has unique needs, so it goes with the different payment options available with a reverse mortgage. Some individuals prefer getting their entire dispurement up front, while others prefer the option of receiving a steady monthly payment to supplement their retirement income. Regardless of which distribution plan you pick, you are able to adjust your plan as often as you wish to accommodate changing needs.

Outlined below are the different reverse distribution plans to fit your needs and desires.

Term - Equal monthly dispursement that is fixed for a predetermined period of months.
Lump Sum  - Cash immediately available in a lump sum (often to payoff an existing mortgage)
Tenure - Equal monthly payments as long as at least one homeowner lives and continues to occupy the property as a principal residence.
Combination - An immediate cash advance in addition to monthly allotments.
Line of Credit - A credit line which the customer can draw upon as he or she wishes.
Interest Rate

Most are adjustable rate mortgages. The following options and factors apply:

Choose between a monthly or annually adjusting rate.
Rates are tied to the one-year U.S. Treasury Security Rate.
Interest rate adjustments has no effect on the amount of or number of loan advances you can receive, it however causes the loan balance to grow at a faster or slower rate.
Loan Repayment

The loan is due and payable when you no longer occupy the property as your principal residence or fail to comply with the loan agreement.

The only requirement is that the loan be repaid in one payment. There is no requirement that the property be sold, only that the loan is repaid. This may occur either through the sale of the home or through other resources (such as savings or possibly applying for a new mortgage).

Effect on Public Benefits

Loan proceeds are not considered income and will not affect Social Security or Medicare benefits because these programs are not based on need.

However, your monthly reverse mortgage advances may affect eligibility for some programs. Consult your local program offices to determine how, or if, monthly reverse mortgage payments might affect your specific situation.

Previous posts in this "Reverse Mortgage" series:

The Specifics - Part 2 of Reverse Mortgages

What The Heck Is A Reverse Mortgage? - Part 1 of Reverse Mortgages