The Bergen County Homes Blog

JP Morgan Chase announced this week that they will be hiring 1,200 new mortgage loan officers by the end of 2010.  This means that Chase will increase their loan officer numbers by 60% which is huge because the bank is one of the major players in mortgage loans in the US. 

JP Morgan Chase said that the bank sees early signs of stabilization in the US real estate market and believes that the housing market has bottomed out .  Expecting the real estate market to recover after next year, JP Morgan is hiring new loan officers to put themselves in the best competitive position by making sure it has the best market share coverage for home loans. 

CNN’s article on this is at  http://tinyurl.com/New-Chase-Loan-Officers

When the Home Valuation Code of Conduct went into effect by Fannie Mae and Freddie Mac on May 1st, appraisal protocols for mortgage loans changed. To protect consumers, loan officers, mortgage brokers and real estate agents can no longer choose appraisers.

Why is this so important? Because the mortgage bank and the home buyer rely on an appraiser’s determination of value; a lot of abuse and fraud has been uncovered. If, for example, an appraiser sets a home value to fit the sales price, that’s obviously wrong.

I just had a short sale listing close; the bank took nearly a 50% loss on a $1.8 million loan. The homeowner had been building a new home for himself. When he gave me his loan amount, I was stunned. There was no way to justify that mortgage loan and yet it happened.

To comply, banks no longer have their own appraisers; they use real estate appraisal services with pools of appraisers from which appraisers are randomly selected. This creates an added expense for the mortgage process and increasingly results in appraisers valuing homes who’ve never been to the area before and aren’t members of the local MLS. Recently my office experienced this.

An office listing had an appraisal that was ridiculously low. Both buyer and seller knew this but the bank, which had to use the appraisal, could no longer justify the mortgage. The appraiser had never been to the area before and used the wrong MLS. Bergen County homes are listed in the New Jersey MLS; the appraiser used the Garden State MLS which has only a few Bergen County listings. Without expert knowledge of the local inventory and no access to all the data, he wasn’t able to do a correct valuation.

Eventually things will straighten out but until it does, there will be higher costs to obtaining a mortgage for home buyers and for both buyers and sellers, there will be appraisals that unfairly cancel mortgages.

Bergen County homes have done better than most in the US real estate market but like elsewhere, our home values have depreciated over the past few years. For many homeowners this has created a horrible situation where they are facing a short sale or foreclosure.

For those who have seen their mortgage rates reset to a loan they can’t afford, the situation soon deteriorates to a short sale or foreclosure because their loss of equity makes it impossible to get the appraisal needed to refinance to today’s low interest rates. This is why the Federal Government stepped in to help.

On July 1st HUD Secretary Shaun Donovan announced that Fannie Mae and Freddie Mac will begin refinancing mortgages with loan-to-value ratios as much as 125%. This means you can be 25% negative in the value of your house and still refinance. The idea is to try to match the loss of equity so that homeowners who’ve been paying their mortgages and have good credit can stay in their homes.

While this is just part of the Bergen County housing market, it allows many people to keep their home and helps stabilize real estate values by avoiding foreclosures and short sale transactions.

If this works for you or someone you know, get in touch with a licensed mortgage banker. You need a top level loan officer’s help to qualify for this program; if you need a recommendation, just let me know.

There is a new thief who preys upon homeowners who must put their home on the market as a short sale. Simply put, a short sale occurs when a homeowner can no longer pay his mortgage, has no other assets and the loan amount is greater than the home is worth. As a result there is a shortage between what’s owed on the home and it’s market value. The only way a homeowner can sell his home is by getting the bank to accept this shortage, thus the term “short sale.”

These new thieves market themselves as having all the solutions to your problems because they have a “special” ability to negotiate a short sale with the bank. Nothing could be farther from the truth. What really happens is that a desperate homeowner is taken advantage of by these horrible people because the truth is that they are completely unnecessary.

Realtors do short sales all the time. If you must put your home on the market as a short sale, your listing agent can do the work and negotiate with the bank on your behalf. You can also ask your attorney to do this for you and many people do. What you don’t need is to encumber yourself with an unnecessary expense by hiring one of these charlatans. They are today’s version of the proverbial “snake oil salesman.”

I have worked on short sale transactions successfully. It is a tremendous amount of work and takes a long while. Everyone involved needs a lot of patience but eventually things do work out. Buying a home that is a short sale means a long wait for the buyer. Sometimes a buyer will cancel his contract out of frustration – it takes months and months to see if the mortgage bank will accept the buyer’s offer. But, hiring one of these thieves will not help you – it only wastes your money on these frauds. Every bank has it’s own unique process and no one can make a bank move any faster.

Don’t allow a predator to hurt you – if you have any questions, email me and if I don’t know the answer, I’ll find someone who does.