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090328 Re Presentation


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Credit Repairs by Indriati Oei,
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090328 Re Presentation

  1. 1. REAL ESTATE DI DALAM “BAIL OUT” Tips and tools for navigating today’s economy
  2. 2. Who We Are <ul><li>APRIL is a professional services group that specializes in three major industries: real estate (INTERO), mortgage, and insurance. We’ve been in the business since 1984. Our mission is to create lasting relationships within a “customers first!” environment based on mutual respect, trust, and integrity. Since our inception, we have partnered with our clients in their pathways to success and self-fulfillment. </li></ul>Insurance & Mortgage Services
  3. 3. Bagaimana… <ul><ul><li>Mencegah Foreclosure </li></ul></ul><ul><ul><li>Membeli atau Menjual Rumah yang Short Sale </li></ul></ul><ul><ul><li>Membeli Rumah yang Bank Owned </li></ul></ul><ul><ul><li>UU baru akan Membantu Anda </li></ul></ul><ul><ul><li>Mendapatkan Bantuan dari Pemerintah untuk membeli Rumah </li></ul></ul><ul><ul><li>Mengurangi Mortgage Payment Anda tanpa menjual rumah (no fee) </li></ul></ul><ul><ul><li>Memberbaiki Kredit Anda </li></ul></ul><ul><ul><li>Invest Rumah di Sacramento </li></ul></ul>
  4. 4. <ul><li>How to Avoid the Foreclosure Trap – Limin Tjandrajati </li></ul>Bagaimana Mencegah Foreclosure
  5. 6. BYMBA Statistic
  6. 7. Tips for Avoiding Foreclosure <ul><li>Don’t ignore the letters from your lender </li></ul><ul><li>Contact your lender immediately </li></ul><ul><li>Know your mortgage rights </li></ul><ul><li>Contact a HUD-approved Housing Counseling Agency </li></ul><ul><li>Prioritize your spending </li></ul><ul><li>Avoid foreclosure prevention companies </li></ul><ul><li>Don’t lose your house to foreclosure recovery SCAMS! </li></ul><ul><ul><ul><li>Equity Skimming </li></ul></ul></ul><ul><ul><ul><li>Phony Counseling Agencies </li></ul></ul></ul>
  7. 8. What are your alternatives? <ul><li>Special Forbearance </li></ul><ul><li>Mortgage Modification </li></ul><ul><li>Partial Claim </li></ul><ul><li>Pre-Foreclosure Sale </li></ul><ul><li>Deed in Lieu of Foreclosure </li></ul><ul><li>Short Sale </li></ul>
  8. 9. <ul><li>How to Buy or Sell Short Sale Homes – Ronny Budiutama </li></ul>Bagaimana Membeli atau Menjual Rumah yg Short Sale
  9. 10. Short Sale Properties DEFINITION A real property sales transaction wherein the seller’s mortgage lender agrees to accept a loan payoff of less than what is owed.
  10. 11. Why Lenders Accept Short Sales <ul><ul><li>Lenders want to minimize its losses </li></ul></ul><ul><ul><li>When Lenders receive Properties, they incur costs and responsibility for property taxes, maintenance and other fees </li></ul></ul><ul><ul><li>Timeline to foreclose a property requires at least 6 months after seller’s first missed payment (Short Sales might be completed within 2 months) </li></ul></ul><ul><ul><li>It’s costly for lenders to foreclose on properties </li></ul></ul>
  11. 12. Disadvantages <ul><li>Takes more time than a regular sale (approx. 2 months more) </li></ul><ul><li>Lenders are not obligated to agree to a short sale </li></ul><ul><ul><li>They may opt for a foreclosure if they believe they can get more money </li></ul></ul><ul><li>Accepted offer by the Seller may not be accepted by the Lender. Seller might continue to send higher and more attractive offers. </li></ul>
  12. 13. Advantages <ul><li>Property is maintained when Seller Occupies the property. </li></ul><ul><li>You can get the property at a discounted price. </li></ul>
  13. 14. Short Sale Process
  14. 15. Things to Know About Short Sale <ul><ul><li>The Lender may or may not approve offers. The lender will appraise the property. </li></ul></ul><ul><ul><li>The decision on prices will be up to the lenders/short sale negotiators. </li></ul></ul><ul><ul><li>Buyers need to wait from 1 months to 3 months to get lender’s approval. </li></ul></ul><ul><ul><li>Offers to be submitted with pre-approval letter and proof of funds. </li></ul></ul>
  15. 16. <ul><li>How to Buy Bank Owned/REO Properties – Joachim Bucker </li></ul>Bagaimana Membeli Rumah yg Bank Owned (REO) BANK
  16. 17. Definition <ul><li>REO = Real Estate Owned </li></ul><ul><li>It is a property which is in the possession of a lender as a result of foreclosure. </li></ul>
  17. 18. Advantages of buying a REO <ul><li>Fast answer from Lender </li></ul><ul><li>Short Turnaround </li></ul><ul><li>Low Price </li></ul>
  18. 19. Disadvantages of buying a REO <ul><li>Property may be in poor condition </li></ul><ul><li>Few Disclosures, if any </li></ul><ul><li>Property could stay active as a listing through the process </li></ul><ul><li>Some Lenders can reserve the right to cancel anytime </li></ul><ul><li>Some Lenders have their own contracts (in their favor) </li></ul><ul><li>Lender chooses its own Title/Escrow Company </li></ul><ul><li>After acceptance, short contingency period (5 to 7 days) </li></ul><ul><li>Removal of all contingencies within 10 days </li></ul>
  19. 20. REO Buying Process <ul><li>Buyer-Agent-Agent-Lender. Acceptance within 48 hours </li></ul><ul><li>Buyer has 48 hours to review and accept Lender’s contract </li></ul><ul><li>7 days to do Home Inspection, remove Contingency </li></ul><ul><li>After 7 days, remove Loan and Appraisal Contingency </li></ul><ul><li>All Contingencies removed within 10 days </li></ul><ul><li>The process is done within 30 days net, any extra day may be fined $150 to $350/day </li></ul>
  20. 21. Issues <ul><li>Buyer must be prepared and pre-approved with a Lender </li></ul><ul><li>Financing must be ready to go because within 7 days, the Loan Contingency will be cleared </li></ul>
  21. 22. <ul><li>How the government can help you buy a home – Jackie Oei </li></ul>Bagaimana Pemerintah Baru Akan Membantu Anda
  22. 23. Stimulus Bill 2009 Overview <ul><li>Passed through Congress and signed into law by President Barack Obama on February 17, 2009 </li></ul><ul><li>Various provisions including: </li></ul><ul><ul><li>Tax relief for individuals and companies </li></ul></ul><ul><ul><li>Healthcare </li></ul></ul><ul><ul><li>Education </li></ul></ul><ul><ul><li>Infrastructure Investment </li></ul></ul><ul><ul><li>Aid to low-income, unemployed, and retirees </li></ul></ul><ul><ul><li>Energy </li></ul></ul><ul><ul><li>Housing </li></ul></ul><ul><ul><li>Scientific Research </li></ul></ul>
  23. 24. Housing Provisions <ul><li>Included in Tax Relief for individuals </li></ul><ul><li>Homebuyer Credit: $8000 credit for First Time Homebuyers if home is bought between 1/1/2009 and 12/1/2009 </li></ul><ul><li>Home Energy Credit: For homeowners who make their homes more energy efficient in 2009, they can receive credit for 30% of the cost up to $1500 </li></ul><ul><ul><li>i.e. Installing energy efficient windows, doors, furnaces and air conditioners </li></ul></ul><ul><li>$12.7 Billion for Other Housing Provisions </li></ul>
  24. 25. Who qualifies for the Credit? <ul><li>Homebuyer Credit </li></ul><ul><ul><li>First time homebuyers meaning you have not owned a home for the past three years </li></ul></ul><ul><ul><li>Home bought between 1/1/2009 and 12/1/2009 </li></ul></ul><ul><ul><li>Credit phases out as your income increases starting at $75K for singles and $150K for couples </li></ul></ul><ul><ul><li>Apply by filing your income taxes and claim it on your tax return </li></ul></ul>
  25. 26. California Tax Credit 2009 <ul><li>New Homes/New Construction bought between March 1, 2009 – March 1, 2010 </li></ul><ul><li>$10,000 Tax Credit </li></ul><ul><li>No Income Restrictions </li></ul><ul><li>Anyone can apply, does not have to be a FTHB </li></ul>
  26. 27. Below Market Rate Units (BMR) <ul><li>New construction required to set aside 15% as BMR units for more than 5-unit developments </li></ul><ul><li>Must be sold to low to moderate-income households </li></ul><ul><li>Price is restricted by City if you resell (lower appreciation) </li></ul><ul><li>Works on a lottery system </li></ul>
  27. 28. Below Market Rate Units (BMR)
  28. 29. Down payment Assistance Loan Program <ul><li>Financed through Mayor’s Office of Housing (MOH) </li></ul><ul><li>DALP will act as a second loan to an approved first mortgage lender </li></ul><ul><li>Term will be deferred for 30 years, due on sale or title transfer </li></ul><ul><li>Maximum loan amount is up to $150,000 or 30% of the purchase price, whichever is less </li></ul><ul><li>Only for market rate units, does not include BMR </li></ul><ul><li>Size of household must be compatible with size of property being purchased </li></ul><ul><li>Repayment proportional to amount borrowed </li></ul>
  29. 30. Applicant Eligibility <ul><li>Borrower Must: </li></ul><ul><li>Be a First Time Home Buyer purchasing a Single Family Home in San Francisco </li></ul><ul><li>Meet Income Limits </li></ul><ul><li>Qualified Household Member </li></ul><ul><li>Minimum 2.5% Down payment, not including Closing Cost </li></ul><ul><li>Asset/Reserve Limitation </li></ul><ul><li>Qualify for First Mortgage with an approved lender </li></ul><ul><li>Homebuyer Education Certificate </li></ul><ul><li>Owner Occupied </li></ul>
  30. 31. DALP Income Limits Household Size 1 2 3 4 5 6 7 80% AMI $52,800 $60,350 $67,900 $75,450 $81,500 $87,500 $93,550 90% AMI $59,400 $67,900 $76,350 $84,850 $91,650 $98,450 $105,250 100% AMI $66,000 $75,450 $84,850 $94,300 $101,850 $109.400 $116,950 110% AMI $72,600 $83,000 $93,350 $103,750 $112,050 $120,350 $128,650 120% AMI $79,200 $90,550 $101,800 $113,150 $122,200 $131,300 $140,350
  31. 32. Maximum Loan Limits Maximum DALP loan amount is up to $150,000 or 30% of purchase price whichever is less. The loan amount will be determined based on the applicant’s income, assets, size of household and debt to income ratio Purchase Price capped at $625,000 Loan must be 30 years fixed, fully amortizing Household Income 80% AMI and under 81%-90% 91% - 100% 101%-110% 111% - 120% Subsidy Up to $150,000 Up to $135,000 Up to $120,000 Up to $105,000 Up to $90,000
  32. 33. Next Steps
  33. 34. List of Approved Housing Counseling Agencies Asian, Inc. Mission Economic Development Association (MEDA) San Francisco Consumer Credit Counseling Service of San Francisco (CCCSF) San Francisco Housing Development Corporation (SFHDC) San Francisco Urban Community Housing Corporation (SF Urban CHC)
  34. 35. <ul><li>How to lower your mortgage payment without selling – John Oei </li></ul>Lower your Mortgage Payment
  35. 36. What is Loan Modification? <ul><li>Lower the Interest Rate (by 1/8%) </li></ul><ul><li>Reduce or Defer the Principal </li></ul><ul><li>Extend the amortization period </li></ul><ul><li>Soon…..Mortgage Credit Certificate (MCC) Part of the Stimulus Plan 2008 </li></ul>
  36. 37. Who Qualifies? <ul><li>Must have Financial Hardship </li></ul><ul><li>Owns a Home as a Primary Residence </li></ul><ul><li>More solutions for Homeowners, less for investment properties. </li></ul>
  37. 38. Laws & Regulations <ul><li>CA ABX2 7 Foreclosure Moratorium </li></ul><ul><li>1. Imposes a 90 day foreclosure moratorium to allow distressed homeowners time to work out loan modifications with their lenders. </li></ul><ul><li>2. Allows lenders to avoid the moratorium if they have a comprehensive loan modification program based, in part, on criteria set forth by the Federal Deposit Insurance Corporation. Loans may be modified several ways, including interest rate reductions, extension of the loan term, or principal reduction. </li></ul><ul><li>3. Provides oversight and accountability by requiring regular reports to the legislature on loan modifications and foreclosure reductions, and coordination with appropriate state regulators. </li></ul>
  38. 39. Foreclosure Timeline <ul><li>If Owner occupied: </li></ul><ul><li>3 Days notice to pay rent or quit </li></ul><ul><li>5 Days Summon </li></ul><ul><li>May take more than 1 month to be evicted </li></ul>Intent for Notice of Default Sent 30 Days Notice of Default Recorded 90 Days Notice of Trustee’s Sale 2 weeks Trustee’s Sale If no bid, forecloses and becomes REO
  39. 40. What is Hardship? <ul><li>Divorce </li></ul><ul><li>Loss of Income / Loss of Job </li></ul><ul><li>Sickness </li></ul><ul><li>Disability </li></ul><ul><li>Others…. </li></ul><ul><li>Need to make Hardship Letter </li></ul>
  40. 41. Lower Interest Rate <ul><li>Lower to 1/8 % and compare if you have 31% of your income for paying PITI, principal, interest, tax, insurance. </li></ul>
  41. 42. Reduce / Defer Principal <ul><li>Reduce principal amount to Market Value of the House </li></ul>
  42. 43. Extend Amortization Period <ul><li>Extend to 50 years or more to reduce the monthly payment </li></ul>
  43. 44. Mortgage Credit Certificate <ul><li>Qualify only if you have Mortgage Credit Certificate </li></ul><ul><li>First Time Home Buyer (does not own a home for 3 years). </li></ul><ul><li>Annual tax credit of 15% of the annual interest paid on the mortgage. </li></ul><ul><li>Income Limit and Purchase Price Limit </li></ul>
  44. 45. Income Limit Size of Household Non-Targeted Area Targeted Area For 2 persons $ 135,720 $ 135.720 3 or More $ 158.340 $ 158.340
  45. 46. Purchase Price Limit Type of Property Non-Targeted Area Targeted Area Existing Home 696,118 850,810 New Home 601,950 735,716
  46. 47. Example of Reduce the Interest Rate 4.58% 5.75% Effective Interest Rate $1,535.09 $1,750.72 Effective Monthly Mortgage Payment $215.63 N/A Monthly Credit Amount 15% N/A MCC Rate $1,437.50 $1,437.50 Interest $313.22 $313.22 Monthly Mortgage Payment Principal 30 30 Term 5.75% 5.75% Mortgage Interest Rate $300,000 $300,000 First Mortgage Amount With MCC Without MCC Effective Interest Rate
  47. 48. Intake Form <ul><li>Information on Home Being Foreclosed: </li></ul><ul><li>(Yrs Purchased, Mkt Value, Loan Bal, Int. Rate) </li></ul><ul><li>Take Home Income Plus Other Income (Rental Income) </li></ul><ul><li>Monthly Expenses </li></ul><ul><li>Net Income after paying expenses (-$ 400)= Available to pay the mortgage. </li></ul><ul><li>Mortgage Debt to Income Ratio (31-38%) </li></ul><ul><li>Living Expense Ratio (41-48%) </li></ul>
  48. 49. Documentation <ul><li>Hardship Letter </li></ul><ul><li>Financial Statement & Intake Form </li></ul><ul><li>W2, 1040, 1 month of Pay Stub </li></ul><ul><li>Bank Statements to all account </li></ul><ul><li>If Self Employed: </li></ul><ul><ul><li>Personal tax Return and Corporate tax return </li></ul></ul><ul><ul><li>Profit & Loss Statement </li></ul></ul>
  49. 50. Program Requirements <ul><li>Buyers Eligibility: </li></ul><ul><li>First time Homebuyer (Non-Targeted Area), For Targeted Area, not required be first time homebuyer. </li></ul><ul><li>Meet Income Limits </li></ul><ul><li>Owner Occupancy </li></ul><ul><li>Homes must be in San Francisco </li></ul><ul><li>Pay $ 400.00 to the City & County of San Francisco </li></ul>
  50. 51. <ul><li>How to Increase your Credit – Vonny Oei </li></ul>Bagaimana Memperbaiki Kredit Anda
  51. 52. CREDIT CONTROLS LIVES <ul><li>Limit or expand our financial stability </li></ul><ul><li>Increase or decrease the quality of life you are living </li></ul><ul><li>Open or close doors to employment opportunities </li></ul><ul><li>Affect your income by way of interest rates </li></ul><ul><li>Limit or expand your purchase choices </li></ul>
  52. 53. What is a credit report? <ul><li>Your credit report is a snapshot of your credit history </li></ul><ul><li>It, almost by itself, will determine your eligibility for future credit </li></ul><ul><li>One of the main determinants on the report is your credit score , a distillation of your credit history into a three digit number </li></ul><ul><li>This number is called the FICO score . It is named after the Fair Isaac Corporation , who invented the computer software used to derive it. </li></ul>
  53. 54. Provides risk assessment software to the 3 bureaus – Equifax, Trans Union, & Experian FAIR ISAAC COMPANY
  54. 55. Let’s Remember the Names <ul><li>There are now FOUR credit bureaus: </li></ul><ul><li>Experian </li></ul><ul><li>Equifax (TRW) – they had the first database </li></ul><ul><li>TransUnion </li></ul><ul><li>PRBC </li></ul>
  55. 56. <ul><li>Relatively new, about FIVE years old </li></ul><ul><li>Reports Non-Traditional Credit such as rent, cellphone, and insurance bills </li></ul><ul><li>Has its own 3 digit score </li></ul> PRBC
  56. 57. <ul><li>The credit bureaus will assemble data reported to them from utility companies, credit card companies, banks, credit unions, mortgage companies, and other lenders </li></ul><ul><li>When an account is started at a lender, it is reported to the credit reporting agencies </li></ul><ul><li>Each month the account is open, the lender sends a report to the credit reporting agency </li></ul><ul><li>Lenders, landlords and employers then purchase reports to assist them in assessing credit risk </li></ul>
  57. 58. <ul><li>Usually all three credit reporting agencies get the same information but not all the time </li></ul><ul><li>On occasion, an entry will show on one agency’s report that is absent on the others </li></ul><ul><li>You can now receive a free copy of your credit report from each of the three credit reporting agencies once a year . You should take advantage of this opportunity </li></ul><ul><li>Stagger your requests so you can receive a report about once every four months . </li></ul><ul><li>Note any changes or incorrect entries and evaluate them. If they are incorrect, take action at once. </li></ul>
  58. 59. What is on your Credit Report? <ul><li>Your Address and past addresses </li></ul><ul><li>Your Social Security Number </li></ul><ul><li>Your Telephone Number </li></ul><ul><li>Credit items that are reported include both positive and </li></ul><ul><li>negative credit activity </li></ul>
  59. 60. Negative Credit Items: <ul><li>Late payments </li></ul><ul><li>Foreclosures </li></ul><ul><li>Judgments </li></ul><ul><li>Collections </li></ul><ul><li>And any other negative factors </li></ul>
  60. 61. FICO Credit Scores <ul><li>Credit scores and risk levels perceived by lending institutions: </li></ul><ul><li>Excellent: Over 750 </li></ul><ul><li>Very Good : 720 to 749 </li></ul><ul><li>Acceptable: 680 to 720 </li></ul><ul><li>Uncertain: 620 to 679 </li></ul><ul><li>High Risk: less than 620 </li></ul><ul><li>Note: FICO scores are viewed differently by individual institutions according to each institution’s internal policy </li></ul>
  61. 62. How Many Points Do I Lose? <ul><li>Trade Line Payments (8-20 Points) </li></ul><ul><li>Late Payment on Mortgages (15-45 points) </li></ul><ul><li>Paid/Unpaid Collections (15-30 points) </li></ul><ul><li>Judgments (20-30 points) </li></ul><ul><li>Federal and State Tax Liens (20-30 points) </li></ul><ul><li>Foreclosure (45 points or more) </li></ul><ul><li>Bankruptcy (70-100 points) </li></ul>
  62. 63. How Many Points Do I Lose? <ul><li>Trade Line Payments (8-20 Points) </li></ul><ul><li>Late Payment on Mortgages (15-45 points) </li></ul><ul><li>Paid/Unpaid Collections (15-30 points) </li></ul><ul><li>Judgments (20-30 points) </li></ul><ul><li>Federal and State Tax Liens (20-30 points) </li></ul><ul><li>Foreclosure (45 points or more) </li></ul><ul><li>Bankruptcy (70-100 points) </li></ul>
  63. 64. <ul><li>35% Payment History </li></ul><ul><li>15% Length of Credit History </li></ul><ul><li>30% Amounts Owed </li></ul><ul><li>10% New Credit </li></ul><ul><li>10% Types of Credit in Use </li></ul>
  64. 65. How do “Inquiries” count? <ul><li>HARD INQUIRIES </li></ul><ul><li>Only “permissible use” credit inquiries count against you including credit card offers </li></ul><ul><li>SOFT INQUIRIES </li></ul><ul><li>Credit reports you pull yourself or from a consumer site do not count </li></ul><ul><li>For Mortgage or Auto Loans: FICO counts multiple inquiries during a 14 day period as just once inquiry </li></ul><ul><li>- You should secure an account ASAP </li></ul>
  65. 66. How long does it stay on report? <ul><li>BK 7, 11, 13 10 Years </li></ul><ul><li>Collections 7 Years </li></ul><ul><li>Public Record 10 Years </li></ul><ul><li>(Except Trans Union) 7 Years </li></ul><ul><li>Inquiries 2 Years </li></ul>
  67. 68. Know Your Rights! Homework: Look for the following: <ul><li>Fair Credit Reporting Act </li></ul><ul><li>Fair Debt Collection Act </li></ul><ul><li>Fair Accurate Credit Transaction Act </li></ul><ul><li>Fair Credit Billing Act </li></ul><ul><li>HIPPA Act - Health Insurance Portability and Accountability Act </li></ul>
  68. 69. We are an affiliate office of: <ul><li>Over 15 years’ combined training and experience in specialty industries: real estate, mortgage, debt management, and credit enhancement </li></ul><ul><li>Offers financial solutions and financial recovery strategies </li></ul><ul><li>Simplifies and deconstructs the complexities of credit-related and business growth issues. </li></ul><ul><li>Assesses the clients’ needs and recommends alternative choices and customized solutions packages </li></ul><ul><li>New York Times’ bestseller, “Debt Cures,” by Kevin Trudeau, mentions some of Clear Credit Exchange’s advice for the credit-challenged </li></ul><ul><li>CCE’s President and CEO also wrote the foreword to Jamaine Burrell’s book on “How to Repair Your Credit Score Now.” </li></ul><ul><li>The Clear Credit Exchange and Corporate Genesis offices are located in Santa Clara, California </li></ul>
  69. 70. We are dedicated to your success! You can do this on your own OR You can ask the Professionals for help!
  70. 71. How Can We Help You? <ul><li>Call us with your questions </li></ul><ul><li>When appropriate, you will give us permission to pull your credit report. A dedicated April Financial Processor will work with you </li></ul><ul><li>We will have a strategy session for the next steps </li></ul>Our phone number: (415)242.8100