Randy Mitchelson, of Estero, Florida, is a licensed mortgage professional with 15 years experience in financial services.

Mortgage by Randy

monthly update to our clients, colleagues, family & friends

By: Randy Mitchelson, February 2010

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In Issue 23 We Touch On:

New Mortgage Fee Rules

New Credit Card Law

Hug Your Bride Contest

Cold seems to be a theme lately.  Our government was shut down due to cold and snow.  The President’s goal of health care reform is getting a cold reception from many.  The southern United States, including Florida has seen an unprecedented streak of cold temperatures and snow.  While we all deal with our own version of cold, there are signs that things are heating up in the economy.  More and more people are trying to buy houses. Job losses are still happening but at a slower rate than 2009.  Savings rates continue to heat up as Americans have reduced their credit card balances for 15 consecutive months. Regardless of what story the news media focuses on, there are two sides to every coin so just keep it all in perspective. 

The current newsletter and all prior newsletters are archived at the Mortgage by Randy blog. Bookmark it and share with your friends and family.  You can make your own comments and feedback as well.  Time for the news…

Mortgage Market: New Mortgage Fee Disclosure Rules Benefit Consumers

In response to reports about inadequate and difficult to read disclosures about mortgage fees, the U.S. Department of Housing and Urban Development (HUD) implemented new disclosure forms and rules effective Jan 1, 2010.  Already, I have personally witnessed some mortgage brokers failing to comply with these new forms.  For consumers shopping for a property and mortgage it is critical that you become aware of what to expect from your mortgage provider.

Good Faith Estimate (GFE)

The form required to disclose an initial estimate of fees for a mortgage has become easier to read.  It must be provided to you within 3 business days of providing a mortgage professional a loan application or enough information for the loan officer to pull your credit (i.e., social security number).  Click here to see what the correct form looks like.  Upon locking your interest rate, a revised GFE must be given to you within 3 business days.  If a mortgage provider issues you anything other than this form, they are not compliant with the law. Unless there is a material change in your ability to qualify for a loan or if you switch to a new loan program, most of the critical fees on the GFE cannot be changed after the form is issued.  This protects consumers from the unpleasant surprise of experiencing major increases in fees at the closing table.

HUD-1 Statement

At closing, the final numbers for the mortgage are provided on a statement called a HUD-1.  This form has been changed so that it is easier to compare the final fees with those originally disclosed on the Good Faith Estimate. Click here to see for yourself.  Certain fees that are impossible to disclose exactly at the beginning are allowed a 10% tolerance to increase by closing.  For example, the cost of a title insurance policy is allowed a 10% tolerance. Broker fees and origination fees are not allowed to change.

Personal Credit: Obama Credit Card Law Becomes Effective February 22

In May 2009 President Obama signed a law that regulates credit card companies.  A portion of the law is going to become effective this month on February 22.  Over the past nine months, banks and other credit card issuers have been scrambling to implement the required technology changes and revise their marketing programs to become compliant.  The intent of the law is to protect consumers from devious tactics, but no law is perfect.  Consumers must pay attention to mail that arrives from credit card companies announcing changes to account rules. 

Key Rule Changes

1)     Credit card companies must now give 45 days notice before they can increase your interest rate, start charging you new fees, or make other big changes that affect the terms of your card unless it is a variable rate card.

2)     If you do not like those new changes the credit card company must give you the option to cancel your card before they take effect. If you cancel your card they might increase your monthly payment.

3)     Credit card companies must display on your statement how long it will take you to pay off your card if you only make minimum payments.  Your monthly statements will look different now.

4)     When you get a new credit card account, credit card companies cannot increase your rate for the first 12 months unless you have a variable rate, are more than 60 days late paying your bill, or set-up a special repayment plan with your card company and then fail to comply with it.

5)     Credit card statements must be mailed 21 days before the payment due date. Also, the due date must be the same day each month, and your payment not classified as late until 5 p.m. on the day it is due.

6)     If your credit card company requires you to pay fees (such as an annual fee or application fee), those fees cannot total more than 25% of the initial credit limit.

Economy & Financial Insights: Opa! How the Greece Financial Crisis Might Affect You

Debt and out of control deficits are a problem all over the developed world. In recent weeks Greece has become the poster child for this problem.  Their debt needs to be rolled over in the next 2 months and other European countries are struggling to figure out how or if to help. There is a limit to the amount of debt a sovereign country can handle without a crisis developing. Many countries are approaching this threshold including the United States.

Why should you care?  Although most of these events are out of our control, we will certainly feel effects.  The effects depend on what choices are made by the U.S. and other countries to manage the debt challenges.  One outcome is inflation which will devalue our savings and make products more expensive relative to our incomes.  Another potential outcome is default.  For example, if Greece (or any other country) defaults on their debt, any investments that we hold will be paid at 50 cents on the dollar or worse.  If this happens, the mutual funds we own in our retirement plans may have holdings that are affected.  The stock market hates uncertainty.  When countries have unstable financial predicaments, the stock market will actively reduce exposure to risk.  There are no good outcomes – we can only hope that that whatever decisions are made turn out to be the lesser of several evils.

Question of the Month: Can My No Fee Credit Card Begin Imposing New Fees?

Credit card issuers can choose to change the terms and conditions of your account.  In the past, there was very little protection in place for consumers as to how quickly and via what kind of communication the credit card company could impose changes.  The new credit card law effective February 22, 2010 regulates these changes.  It is possible that a no fee credit card could become a fee based credit card.  However, the new rules require credit card companies to a) provide 45 days notice of changes to fees and rates and b) give consumers the chance to cancel their card before the new fees and rates take effect.  It is important that consumers pay attention to any mail that arrives from credit card issuers which may contain announcements about changes to the terms and conditions.

Giving Back: Supporting Our Communities – 2nd Annual Gentlemen Hug Your Brides Day 3/3/10

On March 3, the Michelle’s Angels Foundation is sponsoring Gentlemen Hug Your Brides Day.  Cancer and other deadly illnesses can take away our better halves much too soon.  Husbands all over the world will take a few minutes to honor their bride on March 3, even if it is a simple hug.  This year, the day is commemorated with a theme song, “You Can Count On Me”, written and performed by Nashville artist Ken Harrell.  In addition, there is a contest to submit a verbal hug and win! Submit a verbal hug of 200 words or less describing what your special person means to you and why you love them.  Contest details will be posted at www.michellesangels.com. Let the hugging begin!

Need volunteers? Do you have a fundraising event upcoming?   Do you have a personal web site where you are raising donations for your cause?  Submit the information to randy@mortgagebyrandy.com by the 5^th day of each month and we will do our best to include your information in the next issue.

Thanks to the Estero Rotary for inviting me to speak about credit scores.  Based on the amount of questions people had after the talk the topic definitely hit home for a lot of the audience. Pitchers and catchers report this week and we are looking forward to spring training baseball throughout March.  The parents have finally arrived in Florida to try out the snowbird lifestyle for the first time so we are squeezing in as much fun time with them as possible. Go U.S.A. !

Randy

Mortgage by Randy newsletter, Copyright 2010 Randy Mitchelson.  All Rights Reserved.

Randy Mitchelson is a licensed mortgage professional. All material presented herein is believed to be reliable but we cannot attest to its accuracy. All material represents the opinions of Randy Mitchelson.  Recommendations may change and readers are urged to check with their financial advisors before making any decisions. Opinions expressed in these reports may change without prior notice. Mitchelson can be reached at 239-851-6738.

__________________________________________________________________________________________________________________________________

You have permission to publish this article electronically or in print as long as the following is included:

Randy Mitchelson, of Estero, Florida, is a business professional, entrepreneur and author with over 15 years experience in financial services.  Mitchelson has served in leadership roles for Global & Fortune 500 firms like Bank of America, KeyBank and CIBC.

As a member of National Association of Mortgage Brokers, Randy has earned the Lending Integrity Seal of Approval.  He educates both individuals and groups about credit scoring by conducting personalized credit report reviews, action plans and one on one consultations. He is author of the free monthly newsletter, Mortgage by Randy as well as the Daily Dollar newsletter. A licensed mortgage professional, Mitchelson also founded Trinity Home Financing, LLC.

He is owner of Estero, Florida based National Web Leads, LLC, an internet lead generation service matching consumers with lenders for auto, cash advance and other financial products.   Through its network of partners, National Web Leads delivers innovative Web 2.0 performance marketing solutions to advertisers and affiliate marketers.

Mitchelson earned his BS and MBA at Rensselaer Polytechnic Institute in Troy, NY.  He is a founding member and Finance Chairman of the Southwest Florida Regional Technology Partnership Inc. and Vice President for the Michelle’s Angels Foundation Inc.  He is married to Susan, a Pharmacy Supervisor in the Lee Memorial Health System in Fort Myers, Florida.

Mortgage by Randy
monthly update to our clients, colleagues, family & friends
By: Randy Mitchelson, January 2010
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In Issue 22 We Touch On:
Florida Condo Rules
Appliance Rebates
Options For Creditor Disputes

As I ponder the decade that has passed I realized something neat.  When the decade began I was in the financial and mortgage industry and at the end of the decade I am still here in the same field. Although I have had worked with six (yikes!) different international, regional and local companies in the past ten years, I am still fulfilling my career interests, just in different ways.

Part of the reason for this comes from the encouragement and support I receive from you.  Readers of this newsletter are family, friends, clients, colleagues, peers.  Without your loyalty and input, I would probably be back to my first “real” job of stocking shelves at a supermarket.  2010 will be a tremendous year – partly because I choose it to be – and partly because I know that collectively we will all continue to prosper.  There will be bumps in the road and sad news along the way but all in all our culture of each generation leaving behind a better life for those that come after will continue to propagate. 

The current newsletter and all prior newsletters are archived at the Mortgage by Randy blog. Bookmark it and share with your friends and family.  You can make your own comments and feedback as well.  Time for the news…

Mortgage Market: Help Is Coming - Florida Condos May Be Easier To Finance
Florida’s condo market has been particularly hard hit by the housing downturn. During the boom, condos were overbuilt and apartment complexes rushed to convert their properties to condos to cash in on the buying frenzy.  Those projects still in development or newly completed when the bubble burst are now mostly vacant.  Lending criteria for condos has become so tight that most transactions are with cash buyers.  Help is on the way from Fannie Mae, the quasi-government institution charged with buying mortgages from lenders to stimulate liquidity in the market.

A team of six Fannie Mae assessors in Florida will review hundreds of condo properties across the state that do not currently meet Fannie Mae eligibility guidelines and will review requirements like occupancy rates and financial stability. These are projects where the homeowners association is run by actual owners rather than developers. Existing projects deemed eligible will be listed on www.eFannieMae.com as project reviews are completed. Qualified borrowers wishing to purchase units in these projects will be eligible for financing. 

Although this is a good step, it is not an ultimate solution to the condo inventory problem.  Banks still control the loan dollars and the criteria under which they will lend.  Consumer with large downpayments and strong credit profiles will certainly be able to get a condo mortgage but many buyers will find that banks are still gun shy to invest loan dollars in these types of properties.

Personal Credit: How To Submit Credit Report Disputes To A Creditor
Trying to communicate with one of the three major credit reporting agencies (Experian, TransUnion or Equifax) can be time consuming and frustrating, especially when you are trying to get inaccurate information removed. Another option available to consumers is to dispute inaccurate information directly with the creditor (the company that reported the information to the credit reporting agency).  Examples of creditors would be credit card issuers like Capital One, mobile phone companies like Verizon, and medical offices.

Instant disputes of negative items are available through Score Assist, a service that makes it easier for consumers to submit disputes directly with creditors.  A free trial is available to Mortgage By Randy readers (full disclosure: my company is compensated for referrals of new customers). Benefits of this convenient, subscription based service include:

-saves time
-avoids inconvenience of typing dispute letters
-saves expense of mailing letters via registered or priority mail
-eliminates manual tracking of the number of days the creditor is taking to respond

Mailing your own disputes remains an option. Written disputes can be submitted on your own if you are willing to invest the time.  Email me for a template of a Creditor Dispute Letter. Some people feel that it is worth the small expense to use an online service like Score Assist to submit and track creditor disputes at the click of a button.

After your disputes are submitted, remember that the Fair Credit Reporting Act (FCRA) protects consumers and their credit.  The law mandates that creditors respond to disputes within 30 days.  Score Assist makes it easy to track the dates when all your disputes were submitted.  If any disputes not resolved within 30 days (unless one 15 day extension is requested by creditor), FCRA allows consumers to request that credit bureaus remove the contested information from your report.

Economy & Financial Insights: 2010 Version Of Cash4Clunkers – Appliance Rebates
In the coming months you may be eligible to receive rebates from your state or territory for the purchase of new ENERGY STAR-qualified appliances. These rebates are being funded with $300 million from the American Recovery and Reinvestment Act of 2009. Under this program, eligible consumers can receive rebates to purchase new energy-efficient appliances when they replace used appliances.

Each state and territory will choose dollar amounts for the products selected. Amounts could range from $50 to $250, depending upon the product being purchased, the purchase price, and other potential market factors. Each state will decide if consumers will be eligible for more than one rebate when purchasing appliances covered in the program.

For full details and to find out what the plan is in the state that you live in, visit the Department of Energy.

Question of the Month: How Much Does Title Insurance Cost?
Title insurance is not for the homeowner.  The insurance is for the mortgage lender (bank), but you get to pay for it on their behalf.  A good estimate for title insurance is $5.00 - $5.75 per each thousand dollars borrowed.  For example, a $250,000 mortgage may require a title insurance policy in the amount of $1,325.  When it comes to fees for title work on a mortgage there are several fees to be aware of.  A title insurance policy is just one of them.  Other typical title related fees include: settlement/closing fee ($300), title search fee ($35), title exam fee ($75), endorsements and messenger fees ($35).  In addition, a homebuyer should always purchase an owner’s title policy.  The cost is negligible when factored in to the overall cost of a mortgage and provides you, the property owner, proper insurance protection in the event that the title company makes a mistake or if there is ever a future claim against the property you are purchasing.

Giving Back: Supporting Our Communities – National Kidney Foundation
I recently had the opportunity to interact with the National Kidney Foundation.  I learned a lot of surprising information.  For example, did you know that if you donate a kidney that the surgical procedure is only invasive to the point where on average you may miss about a week of work?  Medicine has come a long way.  The sad news is that nearly 83,000 people are waiting for a kidney right now!

The first step to learn if you are eligible to donate a kidney is to take a confidential telephone questionnaire.  If you successfully pass that stage, then the next step is to visit a local clinic or lab to have some blood drawn for testing.  The kidney foundation covers all expenses of this.  That’s it!  It is very little time investment to know the big answer whether you are eligible to save a life with your kidney.  Although there may not be someone in your life today that is in need of a kidney you never know what tomorrow will bring.  Having the test now will save some time later in the event of an emergency.  Check out this brief video on YouTube where a friend of mine, Herb Knoll, quizzes holiday shoppers at Wal*Mart about donating kidneys.

Need volunteers? Do you have a fundraising event upcoming?   Do you have a personal web site where you are raising donations for your cause?  Submit the information to randy@mortgagebyrandy.com by the 5th day of each month and we will do our best to include your information in the next issue.

Off to Vegas this week for a tradeshow and then looking forward to welcoming my parents to Florida as they embark upon their first year of being snowbirds. Yankee spring training tickets are on sale so my March social calendar is booking fast. Virginia and Colorado are already on the 2010 Mitchelson travel schedule as we plan to celebrate some significant family milestones.

Randy
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Mortgage by Randy newsletter, Copyright 2009 Randy Mitchelson.  All Rights Reserved.

Randy Mitchelson is a licensed mortgage professional. All material presented herein is believed to be reliable but we cannot attest to its accuracy. All material represents the opinions of Randy Mitchelson.  Recommendations may change and readers are urged to check with their financial advisors before making any decisions. Opinions expressed in these reports may change without prior notice. Mitchelson can be reached at 239-851-6738.

__________________________________________________________________________________________________________________________________________
You have permission to publish this article electronically or in print as long as the following is included:

Randy Mitchelson, of Estero, Florida, is a business professional, entrepreneur and author with over 15 years experience in financial services.  Mitchelson has served in leadership roles for Global & Fortune 500 firms like Bank of America, KeyBank and CIBC.

As a member of National Association of Mortgage Brokers, Randy has earned the Lending Integrity Seal of Approval.  He educates both individuals and groups about credit scoring by conducting personalized credit report reviews, action plans and one on one consultations. He is author of the free monthly newsletter, Mortgage by Randy as well as the Daily Dollar newsletter. A licensed mortgage professional, Mitchelson also founded Trinity Home Financing, LLC.

He is owner of Estero, Florida based National Web Leads, LLC, an internet lead generation service matching consumers with lenders for auto, cash advance and other financial products.   Through its network of partners, National Web Leads delivers innovative Web 2.0 performance marketing solutions to advertisers and affiliate marketers.

Mitchelson earned his BS and MBA at Rensselaer Polytechnic Institute in Troy, NY.  He is a founding member and Finance Chairman of the Southwest Florida Regional Technology Partnership Inc. and Vice President for the Michelle’s Angels Foundation Inc.  He is married to Susan, a Pharmacy Supervisor in the Lee Memorial Health System in Fort Myers, Florida.

Mortgage by Randy

monthly update to our clients, colleagues, family & friends

By: Randy Mitchelson, December 2009

========================================================================================================================

In Issue 21 We Touch On:

2009 Year In Review

Homebuyer Tax Credit Extended/Expanded

Short Sale Pros & Cons

Wow!  Another year is coming to an end and many people are saying, “good riddens” to 2009.  No matter what your lot in life, if you and your family have your health there is a lot to be grateful for.  Without your health, you have nothing.  In this issue we reflect on 2009 and provide information to help you in 2010 and beyond. 

The current newsletter and all prior newsletters are archived at the Mortgage by Randy blog. Bookmark it and share with your friends and family.  You can make your own comments and feedback as well.  Time for the news…

Mortgage Market: Details About Extension & Expansion of Obama Homebuyer Tax Credit

Last month it was announced that the Obama first time homebuyer tax credit was being extended.  The $8,000 perk was originally set to expire on November 30, 2009.  Not only did prospective homebuyers gain an additional five months to shop and get a home under contract, but the pool of eligible buyers has been increased.  If you are not a first time homebuyer and have lived in your current residence for five consecutive years out of the last eight, you can upgrade or downsize to a new primary home and qualify for a $6,500 tax credit.  The law does not require that you sell your current home – it may be retained as a rental property or second home.  The legislation prohibits taxpayers from claiming the tax credit if the sale is between “related parties” (example: between parents and children).  There is an $800,000 purchase price cap to qualify for the tax credit for both facets of this program.

How Can You Qualify?

Single tax filers who earn up to $125,000 are eligible for the total credit amount. Joint filers who earn up to $225,000 are eligible for the total credit amount.

Personal Credit: Use It Or Lose It – Credit Is Not A Spectator Sport

Do not let someone try to tell you that you have to carry a balance on a credit card to build your credit score.  That is bad advice.  However, not using your credit cards at all is not going to help you build a high credit score either.  Credit scores are based on activity.  No activity – no score.  If you are working on building your credit score, use all of your active credit cards at least once per month and then pay your bill on-time and in full.  Repeat this behavior every month.  Use your gas cards, department store cards, etc.  The dollar amount doesn’t matter.  Buy ten bucks of Mobil gas or a soda at Target.  If you are already carrying balances, continue using those accounts at least once per month and work on paying down the balance as fast as possible.  Email your credit questions anytime.

Economy & Financial Insights: 2009 Year In Review

The housing and mortgage landscape has changed dramatically in 2009.  A hands-on government approach to stimulate spending in struggling industries like housing and auto has resulted in program after program of hand-outs and tax breaks.  New legislation designed to protect consumers from misleading loan programs and disclosures has been enacted including:

Nationwide Mortgage Licensing

The federal SAFE Act established a nationwide loan originator licensing and registration system that will set minimum standards for loan originator licensing. This will help provide effective consumer safeguards by requiring background investigations, testing, and continuing education for all originators and rid all mortgage origination channels - banks, lenders, credit unions and mortgage brokers - of bad apples.

Real Estate Settlement Procedures Act (RESPA) Reform

In an attempt to simplify the mortgage process for consumers, the government revised the look of the closing statement that buyers and sellers sign at closing.  However, one possible point of confusion is that the rules for banks are different than the rules for mortgage brokers in how certain mortgage costs are disclosed.  Whereas brokers must disclose their fees earned the lender underwriting the loan, a bank is not required to disclose the same type of fee to their customers.  Also changed was the Good Faith Estimate form.  Expanding this important consumer disclosure from a one-page, totally itemized document, to a three-page, all inclusive, one number disclosure may actually create more consumer confusion.

Home Valuation Code of Conduct (HVCC)

The government enacted new rules to address the problem of lenders and brokers exerting influence over appraisers, but may have done more damage than good.  Many of the complaints received over the HVCC consistently describe out-of-area appraisers unfamiliar with the neighborhood being contracted to appraise homes.  Also, transferability of loans between lenders has been severely hampered by the HVCC and is causing the consumer to pay additional fees for new appraisals.  Also, because of slow turnaround times, consumers are forced to pay additional fees for rate lock extensions so they can keep the more affordable rate

Other Government Action

The government continues to print money at break neck speed to prop up the sluggish economy.  Federal stimulus action in 2009 included:

-Extended unemployment benefits

-Cash for Clunkers program and an extension

-First Time Homebuyer Credit and extension

-Stimulus money for infrastructure projects

-Payroll tax reductions

-Bailout funds for banks

Here is the irony.  As a nation and as individual consumers, we are in too much debt.  In order to resolve this we must spend less and use that “savings” to pay down our debt.  Government action to stimulate spending is contradictory to what we need to do to improve the overall financial condition of our households and our country.

Question of the Month: What Are Some Pros and Cons Of A Short Sale?

Homeowners that are struggling to make their monthly payments often try to sell their home for less than what they owe on the mortgage.  This is called a short sale.  There are buyers out there that seek out short sale opportunities, many of whom pay cash or have solid credit and asset documentation to quickly qualify for financing.  Although this strategy is superior than falling into foreclosure, pulling it off is challenging for several reasons:

Tax Implications: Former President G. W. Bush signed into law in 2007 Mortgage Forgiveness Debt Relief Act.  This law eliminated federal tax liability for taxpayers that execute a short sale on their primary residence.  This law is in effect until at least 2012.  Normally, the debt forgiven by the lender would be reported as taxable income to the seller.  This law does not apply to investment properties.  Also, not all states have waived state income tax reporting so a homeowner should explore potential tax consequences for their specific situation.

Lender Cooperation:  Lenders must approve a short sale before it can happen.  Not all lenders are motivated to do this.  Some lenders are overwhelmed with troubled loans and do not have enough trained staff to handle the case volume.  Some situations make more sense for the lender to allow the property to fall into foreclosure.

To encourage lenders to be more proactive, the federal Making Home Affordable act provides financial incentives to offset the banks’ losses. Under the plan, the government will also share the cost of extinguishing second liens on the property, such as those for second mortgages.

If the short sale fails, the borrower can turn over their house keys in a process known as "deed in lieu of foreclosure," transferring ownership to the lender without a foreclosure. At the end of the process, the homeowner could be eligible for $1,500 for relocation expenses.

Time:  In this slow housing market that has a lot of inventory to be absorbed, most short sale situations take a long time to get resolved.  Time is not a luxury that most struggling homeowners have.

Giving Back: Supporting Our Communities – ‘Tis The Season For Charity SCAMS

This is the time of year when the spirit of giving inspires us to open our hearts and wallets to help those in need.  We help the bell ringers from the Salvation Army, we purchase Secret Santa gifts for  adopted families, and we write tax deductible checks before December 31.  Fraudsters also get in the holiday spirit and start dialing for dollars for “charities” that sound perfectly normal, but in many cases are just clever marketing companies that make a lot of money for their own wallet.  If you receive an unsolicited phone call for a donation this time of year, chances are it’s a scam or best case, is a legal non-profit entity that allocates less than 20 cents of your dollar toward the cause. The rest is spent on “administrative” costs which are a fancy way of saying “salaries”.  There are no laws that require charities to use a specific percentage of your donations on charitable purposes. Here are some tips to follow to protect your wallet and ensure your financial gifts go to the right places:

1)     If you receive an unsolicited phone call for a donation, it’s probably a marketing scheme. Even if the name of the organization is impressive and has to do with cancer relief or helping families of police officers, do not let the telemarketer guilt you or intimidate you.

2)     Check out these watchdog web sites: www.give.org and www.charitynavigator.org

3)     Give to organizations that you know (local food pantry, nationally known non-profits like Red Cross, American Cancer Society, St. Judes, etc)

Need volunteers? Do you have a fundraising event upcoming?   Do you have a personal web site where you are raising donations for your cause?  Submit the information to randy@mortgagebyrandy.com by the 5^th day of each month and we will do our best to include your information in the next issue.

Have a wonderful holiday season and a safe New Year.  After a quiet Christmas at home we will join friends in Houston for New Year’s.

Randy

Mortgage by Randy newsletter, Copyright 2009 Randy Mitchelson.  All Rights Reserved.

Randy Mitchelson is a licensed mortgage professional. All material presented herein is believed to be reliable but we cannot attest to its accuracy. All material represents the opinions of Randy Mitchelson.  Recommendations may change and readers are urged to check with their financial advisors before making any decisions. Opinions expressed in these reports may change without prior notice. Mitchelson can be reached at 239-851-6738.

_________________________________________________________________________________________________________________________________________

You have permission to publish this article electronically or in print as long as the following is included:

Randy Mitchelson, of Estero, Florida, is a business professional, entrepreneur and author with over 15 years experience in financial services.  Mitchelson has served in leadership roles for Global & Fortune 500 firms like Bank of America, KeyBank and CIBC.

As a member of National Association of Mortgage Brokers, Randy has earned the Lending Integrity Seal of Approval.  He educates both individuals and groups about credit scoring by conducting personalized credit report reviews, action plans and one on one consultations. He is author of the free monthly newsletter, Mortgage by Randy as well as the Daily Dollar newsletter. A licensed mortgage professional, Mitchelson also founded Trinity Home Financing, LLC.

He is owner of Estero, Florida based National Web Leads, LLC, an internet lead generation service matching consumers with lenders for auto, cash advance and other financial products.   Through its network of partners, National Web Leads delivers innovative Web 2.0 performance marketing solutions to advertisers and affiliate marketers.

Mitchelson earned his BS and MBA at Rensselaer Polytechnic Institute in Troy, NY.  He is a founding member and Finance Chairman of the Southwest Florida Regional Technology Partnership Inc. and Vice President for the Michelle’s Angels Foundation Inc.  He is married to Susan, a Pharmacy Supervisor in the Lee Memorial Health System in Fort Myers, Florida.

Licensed mortgage professional Randy Mitchelson shares tips on how to prepare for a mortgage finance in Jeff Wuorio's article at CBS MoneyWatch:

5 Refinacing Killers...and How to Avoid Them

http://moneywatch.bnet.com/saving-money/article/how-to-refinance-now-and-avoid-rejection/370914/?tag=fd-must-read;main-promo

Underwriters have a lot of time on their hands these days to scrutinize loan files. Consumers should work with a licensed mortgage professional ahead of applying for a loan to review the entire scenario. This will allow red flags to surface ahead of time.

How do you know if the mortgage person you are dealing with is licensed and reputable? Consumer can enter their zip code at http://www.namb.org/assnfe/SearchBroker.asp?TYPE=LENDING_INTEGRITY&SnID=1647248346 and find a local broker that has earned the Lending Seal of Integrity from the National Association of Mortgage Brokers.

Mortgage by Randy

monthly update to our clients, colleagues, family & friends

By: Randy Mitchelson, November 2009

=========================================================================================================================

In Issue 20 We Touch On:

Appraisal Rule Hurts Homeowners

Secret Behind “Positive” Economic News

Foreclosure Prevention Tool Kit

As we enter the holiday season our government is doing its best to deliver gifts in the form of packages of stimulus cash.  Since the American consumer has wised up and undertaken a strategy of paying down credit card and home equity debt and stashing any extra into savings, the government is trying to pick up the spending slack.  The fact that there are so few prudent protectors of taxpayer money in Washington is a sad state of affairs.  BREAKING NEWS:  at the time of this writing, Congress has extended the First Time Homebuyer Tax Credit which was set to expire on November 30, 2009.  The tax credit is now extended to home purchases put under contract prior to next April 30.  Homeowners who have owned their current residence for at least five years are now eligible  for a tax credit if they choose to sell their current home. We will focus more on this money saving opportunity in future newsletters.

The current newsletter and all prior newsletters are archived at the Mortgage by Randy blog. Bookmark it and share with your friends and family.  You can make your own comments and feedback as well.  Time for the news…

Mortgage Market: New Regulatory Rule Is Hurting Consumers and Home Values

The Home Valuation Code of Conduct (HVCC) was implemented on May 1, 2009. The rule was created by the New York Attorney General Andrew Cuomo as an agreement between Fannie Mae and Freddie Mac (GSEs), their new regulator the Federal Housing Finance Agency, and the NY Attorney General’s office. The intent of the rule is to reduce coercion of appraisers.  However, the rule is overreaching, and has negatively impacted consumers across the country. The HVCC was never reviewed or voted upon by Congress, has failed to follow necessary regulatory procedure, and has the following effects on our income, home values and local property taxes:

1. The HVCC increases costs for those refinancing or purchasing a home. If a consumer changes lenders while shopping for a mortgage, multiple appraisals will be needed.

2. Because lenders are picking out-of-area appraisers to conduct appraisals, the appraisals are inaccurate and are lowering home values.  This causes two negative results:  it lowers home equity value even if you are not refinancing a home and, more importantly, these appraisal inaccuracies are lowering the tax base of your community.  This requires taxpayers and voters in your area to either pay more taxes or experience reduced funds for schools, roads, and other service expenditures.

3. This single agreement, not voted on by Congress or issued by any Regulatory Agency, is costing consumers billions of dollars and making it harder than ever to refinance or purchase a home.

Personal Credit: Time For Year End Credit Report Inspection

One of the credit report strategies we coach people on is to spread out your access to free credit reports over an entire year.  All consumers are legally entitled to receive one copy of their credit report from each of the three major credit bureaus (Experian, TransUnion and Equifax) one time per year.  Reminder: this entitlement does not include free access to your credit score.  Instead of inspecting all three versions of your credit history at one time, you can check one every four months.  For those of you that already follow this strategy or even if you want to implement it now, this is a great time to do it.  The distractions of the holiday season may cause you to delay doing this so why not cross it off your “To Do List” now?  The only truly free web site that you can use to do this is www.annualcreditreport.com. Get a detailed credit analysis, including all three credit scores, and personalized action plan and consultation for only $99 by contacting me.

Economy & Financial Insights: Beware Of Happy Headlines About Economic Growth

A series of cause and effects is leading our national economic statistics to return to positive territory.  However, there is another story behind the numbers so consumers and investors should remain cautious.  Follow along with this sequence of economic facts:

Consumers have been scarred by “The Great Recession” and continue to retrench, lowering their spending and increasing their savings (including paydown of debt)…

Less spending by consumers leads to higher inventory levels for manufacturers (i.e., more washer/dryers sitting in the warehouse)….

Higher inventories force manufacturers to slow production of new goods and accelerate consolidation via mergers and closures of plants and warehouses….

Closures and mergers leads to higher unemployment….

(Here’s where it gets ironic)

Inventory levels have already been cut to the bone so manufacturers have to produce a little something.  They can do this without hiring new staff.  This small increase in production will lead to a higher Gross Domestic Product (GDP) which is the headline grabbing statistic we often hear about.  The lesson here is to not get excited about rising GDP.  Until we see a reversal in the unemployment trend our economy will continue to teeter.

Question of the Month: Where Can I Get Reliable Mortgage Help To Avoid Foreclosure?

The FDIC recently launched a new Foreclosure Prevention Initiative for consumers. For a free tool kit of valuable information on how to avoid unnecessary foreclosure, options to stay in a home and guidance on avoiding foreclosure scams, contact the FDIC at 1-877-ASK-FDIC (1-877-275-3342) or through the web at Foreclosure Prevention Tool Kit.  Available at this link is an informational tool kit that includes:

1) "Is Foreclosure Knocking at Your Door?" brochure

2) "Beware of Foreclosure Rescue Scams" brochure

3) FDIC Consumer News, Spring 2009, with articles on getting a loan modification and avoiding foreclosure "rescue" scams

4) "Your Own Home" module in the FDIC's Money Smart adult financial education curriculum

Giving Back: Supporting Our Communities – Cash Back Program For Holiday Shopping

We all know about the constantly rising costs of college.  Recent reports reveal that despite the economy, institutions of higher education continue to raise tuition rates.  You may have your own kids to plan for or you might have nieces, nephews, cousins or friends with kids.  Have you visited Upromise.com?  This service provides a way for you to turn your everyday shopping into college savings which you can assign to any child in your life.  Even people without their own kids can use Upromise.com to donate college savings to their friend’s kids.  This service is free, easy and secure.  If you have ever purchased something on the Internet you should definitely check this out.

Most of us already go online to shop at Barnes and Noble or order from 1-800 Flowers and by linking to these sites through Upromise.com you will earn these rebates.  That's it! No special codes or downloads.  There are offline earnings too like at Mobil, Staples and McDonalds.  Rebates are there for the taking at restaurants in your area and you also earn money back for buying everyday groceries at supermarkets and stores like CVS.  The list of participating stores is huge and continues to grow.

Need volunteers? Do you have a fundraising event upcoming?   Do you have a personal web site where you are raising donations for your cause?  Submit the information to randy@mortgagebyrandy.com by the 5^th day of each month and we will do our best to include your information in the next issue.

Have a wonderful Thanksgiving.  After celebrating a World Series win in New York City, including a ticker tape parade, it’s nice to be settled at home again.  We will get a rare chance to see our beloved Syracuse Orange play the Florida Gators in Tampa Dec 10 and then off to Disney for a few days of holiday magic.

Randy

Mortgage by Randy newsletter, Copyright 2009 Randy Mitchelson.  All Rights Reserved.

Randy Mitchelson is a licensed mortgage professional. All material presented herein is believed to be reliable but we cannot attest to its accuracy. All material represents the opinions of Randy Mitchelson.  Recommendations may change and readers are urged to check with their financial advisors before making any decisions. Opinions expressed in these reports may change without prior notice. Mitchelson can be reached at 239-851-6738.

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You have permission to publish this article electronically or in print as long as the following is included:

Randy Mitchelson, of Estero, Florida, is a business professional, entrepreneur and author with over 15 years experience in financial services.  Mitchelson has served in leadership roles for Global & Fortune 500 firms like Bank of America, KeyBank and CIBC.

As a member of National Association of Mortgage Brokers, Randy has earned the Lending Integrity Seal of Approval.  He educates both individuals and groups about credit scoring by conducting personalized credit report reviews, action plans and one on one consultations. He is author of the free monthly newsletter, Mortgage by Randy as well as the Daily Dollar newsletter. A licensed mortgage professional, Mitchelson also founded Trinity Home Financing, LLC.

He is owner of Estero, Florida based National Web Leads, LLC, an internet lead generation service matching consumers with lenders for auto, cash advance and other financial products.   Through its network of partners, National Web Leads delivers innovative Web 2.0 performance marketing solutions to advertisers and affiliate marketers.

Mitchelson earned his BS and MBA at Rensselaer Polytechnic Institute in Troy, NY.  He is a founding member and Finance Chairman of the Southwest Florida Regional Technology Partnership Inc. and Vice President for the Michelle’s Angels Foundation Inc.  He is married to Susan, a Pharmacy Supervisor in the Lee Memorial Health System in Fort Myers, Florida.