Obama administration to send $112M to N.J. for mortgage assistance

Some New Jersey residents stand to benefit from mortgage assistance coming out of Washington, D.C.

Staying out of foreclosure in this economy can be tough enough. Try keeping up with the mortgage after losing a paycheck.

To try to help prevent more defaults, the Obama administration today said it will send $112 million to New   Jersey to design a program to help unemployed homeowners stay in their homes while looking for work.


New Jersey is one of 17 states with persistently high unemployment rates to share $2 billion in funding through the program, dubbed the "Hardest Hit Fund."

The state still has to come up with a plan on how the money will be dished and no one is predicting, yet, how many people will actually benefit from the program.  Of course, there’s a risk of abuse—money going to the wrong people—but this is New   Jersey, after all.

In any event, hats off to the folks in Washington for sending this money our way.

Read the full report from the Star-Ledger.


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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!

For your next title order or 

if you have questions about what you see here, contact 

Stephen M. Flatow 

Vested Title Inc. 

648 Newark Avenue, P.O. Box 6453, 

Jersey City, NJ 07306 

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E-mail vti@vested.com - www.vested.com

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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.

For your next title order or
if you have questions about what you see here,
contact Stephen M. Flatow
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Housing Policy's Third Rail

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.”

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Stephen M. Flatow

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Jersey City, NJ 07306

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FDIC takes down 5 more banks - Forbes.com

Forbes.com is reporting that the nation has seen 108 banks closed this year by the FDIC.  Five more were closed at the end of July.

  As a result, The July failures drained the FDIC Deposit Insurance fund by $1.3 billion bringing the year-to-date total to $18.9 billion, well above the $15.33 billion prepaid assessments for all of 2010.

When will the takeovers cease or, at least, slow down?

Bank failures during “The Great Credit Crunch” began slowly as the FDIC only closed 25 banks during all of 2008. In 2009 the FDIC picked up the pace with 140 bank failures with a peak of 50 in the third quarter of 2009. So far in 2010 the FDIC closed 41 banks in the first quarter, another 45 in the second quarter, and so far 22 for the third quarter with two months to go.

The common denominator for weakness at the failed banks seems to be a high percent of non-residential and non-farm mortgage loans.  Construction and commercial loans did them in.

Yet, bank failures provide some good investing opportunities according to Richard Suttmeier, the Chief Market Strategist for ValuEngine.com.

Read the full report.

For your next title order 

or if you have questions about what you see here, contact 

Stephen M. Flatow 

Vested Title Inc. 

648 Newark Avenue, P.O. Box 6453, 

Jersey City, NJ 07306 

Tel 201-656-9220 - Fax 201-656-4506 

E-mail vti@vested.com - www.vested.com

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