Lenders are freezng home-equity accounts

In a bid to curtail further loses, many of the lenders such as Countrywide, Wells Fargo, Chase, and Bank of America are freezing second mortgages that are home-equity line-of-credit accounts (HELOC). They have sent notices to their borrowers stating the account is frozen and no additional money can be withdrawn. It appears this will be an on going event until every loan file is reviewed. They will be analyzing the borrower’s payment history, debt factors, and the value of homes in the immediate vicinity of the property. If they find that the borrower’s credit scores have dropped, slow or late payments, or increasing debt, the HELOC account could be frozen. This is also the case if the value of the properties in the area are showing a decline and pushing the loan-to-value (LTV) above the lender’s allowable percentage.
The majority of the HELOC loans were approved during a time when second mortgages were granted up to 95% of the home’s value. Today, most lenders will only allow a maximum of 85% LTV, and if the area is considered a severely declining market, the LTV could be set as low as 65%.
As the value of homes decline and foreclosures increase, lenders holding second mortgages are experiencing an increase in losses. Many times after a foreclosed home is sold or auctioned off, there is barely enough money to pay off the first mortgage, let alone the outstanding balance on the second mortgage.
This freeze will have a negative effect for many borrowers who were planning to withdraw from their HELOC to complete a home improvement project or pay for a child’s college tuition. There are also those who opened their HELOC account to use as a cushion in case of major set backs such as losing their job or a long term illness.
Until the housing market heals from this latest slump, HELOC accounts will be more difficult to obtain, even for the A+ borrower. So, if you are hoping to keep your home-equity account open, watch your credit closely and keep an eye on the value of homes in your neighborhood. One web site to check for home values is Zillow.com. Another source for this information is to contact a real estate agent who is familiar with the value of homes in your area. The LTV is calculated by dividing the outstanding loan balance(s) by the value of your home.
If your are planning to take a withdrawal in the future, it may be to your advantage to take the money out now and place it in an interest bearing savings account until you need it.

Denise Wing, C.E.O.
Certified Mortgage Lender
Academy National Mortgage Corporation
303-987-0622
dwing@academynational.net

Homes that hold their value even in a market slump

If you are in the market for buying a home or if this dream is a ways off, the following tips on choosing the right home will be helpful to you. Even as homes prices in many areas are taking a nosedive some homes are selling above the asking price.

Location, location, location. We have all heard this expression and it still holds true. A house can be replaced, remodeled or renovated, but the land it sits on is permanent. There is far more to location than the views it offers. First and foremost buyers are also looking for a neighborhood that offers good schools and safety for their family.
This is followed by proximity to public services and cultural amenities such as libraries, parks, theaters and coffee shops. One caution though; you want close proximity to these amenities, but not so close that the noise level coming from the busy streets or schools detracts rather than adds to the value of your home.
Canvas the neighborhood. Are the streets and sidewalks well maintained? Open potholes and uneven sidewalk will detract from the desirability to live in this area even if the house itself is attractive.
Choose a house with the broadest market appeal. Do your homework. Find out which homes are selling the quickest and why. A real estate agent familiar with the neighborhood would be your best source of information. He or she could tell you what type of home is selling like hotcakes and which ones are sitting on the market for months on end without a showing. Is a deck an expected amenity or is a covered porch more desirable? Do potential buyers care if the homes in the area have a finished basement, pool, state of the art kitchen, etc.? At this time ranch style homes with low maintenance are weathering the housing slow down quite well.
Up dating your present home. If you already own your home these are still good questions to ask if you are considering remodeling or upgrading your home. Don’t spend $60,000 on an expensive kitchen, if adding a third bedroom would give your home a larger market base for re-sale. Yes, your desires for a home matter, but keep in mind that a home designed with only your wants in mind could end up being very difficult to sell in the future. Making your home more energy efficient by adding additional insulation, high efficiency windows, new siding or appliances can add value and appeal to a potential buyer.



Denise Wing, C.E.O.
Certified Mortgage Lender
Academy National Mortgage Corporation
303-987-0622
dwing@academynational.net

Feds throw out a new lifeline

The government’s latest program nick named “Project Lifeline” has been enacted to help curtail the one million plus foreclosures that is estimated to take place between now and the end of the year. Six of the largest mortgage lenders have joined forces under this program. They are Bank of America Corp., Citigroup Inc., Countrywide Financial Corp., J.P. Morgan Chase and Comp. Washington Mutual Inc., and Wells Fargo & Comp.
These lenders will be contacting their customers who are 90 days or more pass due on their mortgage payment and offering a 30-day reprieve before foreclosure proceedings are initiated. During this time period, the lenders will be working with the homeowners to restructure their mortgage loan in hopes of lowering the monthly payment enough to stop the foreclosure altogether.
Homeowners who have already entered into foreclosure, within 30-days of being foreclosed upon, or the loan is for an investment or vacation home will not qualify under this program.
Officials are also encouraging homeowners to call Hope Now Alliance, which is an organization that is helping homeowners during this difficult time. Their toll free number is 1-888-995-HOPE (4673).



Denise Wing, C.E.O.
Certified Mortgage Lender
Academy National Mortgage Corporation
303-987-0622dwing@academynational.net

Stimulus package scam

Stimulus package scam

Before Congress had fully developed and passed the economic stimulus package, scam artists were at work with a new devious plan.
Over 20 people in South Carolina have reported receiving calls asking for bank account information so that the tax refund from the stimulus package could be directly deposited. The callers are pretending to be an employee of the IRS or from the tax department with the Social Security Administration.

Keep yourself and your hard earned money safe.

1. Stay informed on the progress of the stimulus package and when the government plans to begin sending the money. The latest information I have heard is that the checks will not be mailed out until May or later. The IRS needs to get through the tax season before they can begin working on the tax refund from the stimulus package. No information is available at this time as to whether the refund will be mailed or directly deposited. One thing is sure though, the only people who will have it directly deposited are those who have already provided the IRS with their account information. Neither the IRS nor the Social Security Administration will call and ask you for this personal information.

2. No matter what, never give your personal information to anyone over the phone no matter whom they claim to work for.

3. If you happen to receive a call from a stranger asking for your account information, hang up and call your local district attorney’s office or police department and report the incident.




Denise Wing, C.E.O
Certified Mortgage Lender
Academy National Mortgage Corporation
303-987-0622
dwing@academynational.net

Part VI: Teaching your children to be financially wise

Exposing your children to the world of investments.

This lesson, I must admit, is a longer process than the previous suggestions, but it is as important for your children’s financial stability.
As a family, choose a mutual fund you can deposit a small amount into on a monthly basis. When the statements arrive you can use them as a tool to teach about earning interest on an account. Similar to planting a seed and watching it grow into a mature plant that bears fruit.
Investing in stocks can also help teach your children to become familiar with how the financial markets work. The more you can teach them the better their chances are at becoming good managers or their money as adults. Instead of paying another person to do their investing they could save large sums of money over their adult life by doing their own investing.
If you have any suggestions on teaching children to be financially wise, please email them to me at dwing@academynational.net.


Denise Wing, C.E.O.
Certified Mortgage Lender
Academy National Mortgage Corporation
303-987-0622

Part V: Teaching your children to be financially wise

5. Setting expectations when it comes to helping your children financially.
Laying all the cards on the table when it comes to what you will and will not help your children with financially alleviates misconceptions and misguided expectations. The amount you will have to set aside for each of the needs depends on your financial situation. I suggest making a list starting with whatever area you feel is the most important for their future. The following is an example.

1. College education: I will pay for 1, 2, 3, or all 4 years; tuition, books, room and board, but you will need to work and provide your own spending money.
2. Graduate studies: You will need to get student loans to cover the cost.
3. You will receive $5000 upon graduation of college to get you started in life.
4. Wedding: I will contribute $5000 towards/or pay for your wedding celebration.
5. Down payment on first home: $10,000 has been placed in a timed account.
6. I will purchase your first car, but you will need to pay your own insurance coverage.

The above examples cover some of the mile stones in life that I find cause a majority of the misguided expectations from children. When a child dreams of going to college or having a $30,000 wedding only to find out shortly before the event that their parents are not able or willing to pay, can be devastating to your relationship with them. Letting them know where you stand in advance also gives them the opportunity to work out a strategy to fulfill their dreams by other means.


Watch for part VI coming soon


Denise Wing, C.E.O.
Certified Mortgage Lender
Academy National Mortgage Corporation
303-987-0622

Part IV: Teaching our children to be financially wise

4. Exposing conspicuous consumption.
Encourage your children to be suspicious of overt displays of opulence albeit an expensive car, fancy house, or designer clothing. This type of spending can create more debt than a person can handle causing stress and frustration, but never happiness. We have all heard the stories of friends or family members who blew their money on high living and ended up broke and depressed. Family fortunes have been squandered away leaving future generations without the financial ability to get a college education, buy their first home, or receive the slightest hand-up in life.
It is far better to drive an older car that is fully paid for, or to live in a home where the mortgage payment does not exceed 25% to 30% of your monthly income. This will free up your money so you can invest in a retirement account, build a savings and still take a small vacation with your family. This is the type of financial planning your children need to hear and encouraged to follow.




Watch for part V coming soon.


Denise Wing, C.E.O.
Certified Mortgage Lender
Academy National Mortgage
303-987-0622

Part III: Teaching your children to be financially wise

3. Family stories can teach volumes.
Along with teaching your children sound financial lessons, talk to them about the struggles you experienced in your early adult life. Most of us lived through those times, unless of course, our parents were extremely wealthy and provided us with a trust fund.
Your first apartment, as with mine, was probably furnished using hand-me-downs from family and friends. The local Goodwill and garage sales helped me fill in the household items needed to make life as comfortable as possible. Dinner could be mac n’ cheese, hot dogs, or a cheap frozen dinner. Tales of your first car held together by duct tap, fishing line, and many prayers. Even stories about the struggles experienced by grand parents, aunts, uncles and cousins can bring home a lesson they could carry with them their entire life. There are as many stories as there are personalities in the world and as varied. Sharing your past can be a time of laughter, conversation, and closeness with your children.
Going through this experience can be enjoyable and challenging at the same time. This is not brought about by wrong financial decisions, but merely a progression of life from graduating college, starting a career and gradually moving up to a better salary and job advancements. Let them know it is ok to live within their means and not to have the large home, new car and vacations early on. These luxuries will hopefully come, but they need to be patient and content with what they have and where they are at in their lives.


Watch for part IV coming soon.

Denise Wing, C.E.O.
Certified Mortgage Lender
Academy National Mortgage Corporation
303-987-0622

Part II: Teaching your children to be financially wise

I could not imagine turning my back on one of my children if they were deep in debt and needed my help. By teaching your children to make sound decisions can save you from being financially drained by an adult child; call it financial self-defense.

2. Making wise decisions.
One trick a friend of mine used, especially when going on vacation or to an amusement park, was to give each of her daughters their own spending money. The money was theirs to do with as they pleased which helped make the outing enjoyable for everyone involved. She was not nagged and harassed for trinkets and they were content knowing they could buy whatever they could afford with their own money.
She found this to be so successful; she began using this trick with her oldest grand child when he was about 6 years old. This tradition has continued with each additional grand child and has produced the same successful results.
As your children get older, you can open a savings or checking account in their name and give them a debit card. Each month deposit a set amount into their account for pocket money, school lunches, entertainment, etc. In their early teens a clothing allowance can be added. In most cases, if they spend the money before the month is up, they will not come to you asking for additional funds. If they do you will need to be firm; replenishing their account will only teach them to be financially irresponsibility.

Watch for part III coming soon.

Denise Wing, C.E.O.
Certified Mortgage Lender
Academy National Mortgage Corporation
303-987-0622