From Bankrate.com - 3 ways to mess up a home mortgage closing

Here's some practical advice from Holden Lewis writing on Bankrate.com on how to botch your mortgage closing.

"Want a lender to delay or even cancel your mortgage closing? Then change your "borrower circumstances" between the day you apply for and the day you close a home loan."

"Lenders have gotten stricter in response to the mortgage meltdown. The latest tightening of the screws comes from Fannie Mae. The mortgage titan's Loan Quality Initiative, which went into effect June 1, requires lenders to track "changes in borrower circumstances" between application and closing."

It seems kind of silly to have to point this out to buyers, but there are certain no-no's when it comes to getting that mortgage loan closed on time.

Here are the 3 ways:

No. 1 -- Get a new credit card or auto loan

"Lenders have long admonished mortgage applicants to avoid getting new credit cards and auto loans while home loans are in underwriting. Fannie's Loan Quality Initiative adds urgency to this request."

"So at the eleventh hour, most lenders check credit for new accounts."

No. 2 -- Charge up credit cards

"Charging up credit cards with thousands of dollars' worth of appliances, tools and yard equipment is another surefire way to muck up a closing."

"Mortgage approval is based partly on debt-to-income ratio. The lender looks at the borrower's minimum monthly debt payments and compares them to income. If the ratio of debt payments to income is too high, the borrower could be turned down for a mortgage. Fannie encourages mortgage lenders to recalculate debt-to-income ratios just before closing."

No. 3 --  Change jobs

"Changing jobs is another good way to derail a mortgage before closing. Other potential deal-breakers include staying with a current employer, but switching from a salaried position to one where primary income comes from commissions or bonuses."

Not scared?  Then, read the full article.  Being forewarned is being forearmed!

If you have questions about what you see here, contact 

Stephen M. Flatow 

Stephen's Title Agency, LLC 

StephensTitle@comcast.net 

973-556-1628 Fax

Freddie Mac suffers six billion dollar quarterly loss

 Just when you thought it couldn't get worse at Freddie Mac here's news about its six billion dollar quarterly loss. As a result, Freddie asked the U.S. Treasury for another 1.8 billion dollars to cover the loss.

"We recognize that high unemployment and other factors still pose very real challenges for the housing market," said Freddie Mac chief executive Charles Haldeman.

So where's the Congressional criticism? How will America's home buyers cope if Freddie is taken out of the picture? Not well, I think. Talk about being too big to fail.

If you have questions about what you see here, contact 

Stephen M. Flatow 

Stephen's Title Agency, LLC 

StephensTitle@comcast.net 973-556-1628 Fax

The Third Rail, Talking about Fannie Mae and Freddie Mac – a subject too hot to handle

Those of us who grew up near subway lines remember their parents' warning-- stay away from the third rail, the super-electrified source of energy for the subway cars.  The third rail is an appropriate metaphor for all dangerous subjects.  In her column in Sunday’s New York Time, Housing Policy’s Third Rail, Gretchen Morgenson discusses a taboo, Fannie Mae and Freddie Mac.

WHILE Congress toiled on the financial overhaul last spring, precious little was said about Fannie Mae and Freddie Mac, the mortgage finance companies that collapsed spectacularly two years ago.

Indeed, these wards of the state got just two mentions in the 1,500-page law known as Dodd-Frank: first, when it ordered the Treasury to produce a study on ending the taxpayer-owned status of the companies and, second, in a “sense of the Congress” passage stating that efforts to improve the nation’s mortgage credit system “would be incomplete without enactment of meaningful structural reforms” of Fannie and Freddie.

No kidding.

With midterm elections near, though, there will be talk aplenty about dealing with the companies precisely because Dodd-Frank didn’t address them. Unfortunately, if past is prologue, this talk is likely to be more political than practical.

Those in the residential real estate industry know that Fannie and Freddie provided the fuel to the housing boom.  Talk about an upset stomach when the bust arrived.  The only medicine for these behemoths was a federal rescue.

The Treasury’s study on Fannie, Freddie and housing finance must be delivered to Congress by the end of January 2011. In a speech last week, Timothy F. Geithner, the Treasury secretary, told a New York audience that resolving the companies isn’t “rocket science.”

According to Morgenson,

“attaining genuine remedies for our housing finance system could actually be harder than rocket science. That’s because it would require an honest dialogue about the role the federal government should play in housing. It also requires a candid conversation about whether promoting homeownership through tax policy and other federal efforts remains a good idea, given the economic disaster we’ve just lived through.”

Understanding how Fannie and Freddie did business requires a dialogue.  “Alas, honest dialogues on third-rail topics like housing have proved to be a bridge too far for many in Washington.”

Morgenson outlines how the nation’s largest buyers of mortgages did business.  Understanding that process, and not repeating it is the key to overcoming the problems the housing market faces.

“Understanding how these companies operated is crucial if we want to avoid repeating the mistakes of our recent past. So, when you hear about Fannie and Freddie reform this fall, remember that we still don’t know the half of it.”

If you have questions about what you see here, contact 

Stephen M. Flatow 

Stephen's Title Agency, LLC 

StephensTitle@comcast.net

Have an insurance claim? Watch what you say.

 According to The New York Times blog, bucks, how you speak to your insurance company may affect the way you avoid getting off on the wrong foot with the handling of your claim.

According to the latest tip of the month from United Policyholders, a nonprofit group focused on educating consumers about insurance, certain words set off alarm bells among insurance representatives, who often automatically think “excluded” and delay or deny your claim when they hear those words. And, the group says, those particular words may not even adequately describe your situation.

What words to avoid?  When it comes to your house, flood and mold head the list.

Read the full report.

If you have questions about what you see here, contact 

Stephen M. Flatow 

Stephen's Title Agency, LLC 

StephensTitle@comcast.net 

973-556-1628 Fax