According to the Sacramento Bee, the 3^rd Quarter 2011 Mortgage Fraud Index from MortgageDaily.com came in at 1170. The index represents activity on civil and criminal cases. Victim lenders were deceived by fraudulent documentation or inflated appraisals. Cases were tracked from the mortgage fraud blog FraudBlogger.com. According to Mortgage Daily founder Sam Garcia, “The Mortgage Fraud Index reflects current efforts by law enforcement officials to prosecute defendants who typically committed mortgage fraud three to five years ago.”

The number of cases with activity in Florida climbed, giving it the worst state fraud index. California had the second-highest index, followed by Minnesota.

Top States by Index

Based solely on the dollar amount of cases with 3^rd quarter activity, California’s $204 million was highest. MLV reported an increase in New York mortgage leads in 3^rd quarter as well.

Top States by Total Amount

What does this mean for lenders? If mortgage fraud decreases then likely banks will losen their home loan guidelines which could help increase loan origination. It also means that lenders and brokers should be investing in mortgage leads from a trusted source.  Read more: Mortgage Reform Article Published by the Sacramento Bee

There are several criteria that must be met to qualify for the updated Home Affordable Refinance Program, though. For instance, your current loan-to-value ratio must be greater than 80%. The new HARP program has no loan to value restrictions so more underwater homeowners have a new opportunity to refinance their mortgage.

The Lead Planet announced they were generating HARP leads and this is a good indication that the lenders are seeking underwater mortgage leads. We will be working with several lead generators in addition to the Lead Planet in an effort to improve mortgage marketing leads for lending sources across the country.

The changes to HARP mortgage program are intended to help homeowners who are current on their loans but have been unable to take advantage of historically low interest rates by refinancing because they are “underwater” on their mortgages.

At a time when foreclosure rates are sky-rocketing and the process for funding a loan has become ridiculous — Is this what we need to escape the housing crisis? I think not, but nonetheless, the article puts forth the home loan programs they see playing a role in financing and home mortgage refinancing in 2011.  When buying mortgage leads consider these trends and adjust your marketing accordingly.

• FHA Loans – These government home loans will continue to help new home buyers because of the small down-payments needed to buy a home. Forget about the rising insurance costs and FHA rates, FHA is the only program the average consumer has available to buy a home.
• VA Loans – This program remains accessible to vets and active military personnel with flexible guidelines that can’t be beat.
• Conventional Mortgages – If the rates continue with their current trend, most mortgage lenders will be bored in 2011 for the lack of business.

Loan professionals may have some challenges ahead of them, so buying mortgage leads that perform is more important than ever.  Make sure that you are evaluating marketing and mortgage lead performance more than ever. Read the complete article from the Home Loan Wholesale Blog > 2011 Home Loan Programs

A soft economy means investors buy U.S. Treasuries for their safety, which drags down their yields and indirectly leads to lower fixed mortgage rates. California borrowers with good credit today can get a 30-year conforming, VA, or FHA mortgage as low as 4.875% with 0.625-point fee, said Jeff Lazerson, head of online brokerage Mortgage Grader in Laguna Niguel. That’s for “conventional” loans up to $417,000 that can be sold to Fannie Mae or Freddie Mac.  In most cases, these mortgage loans carry the lowest rates on the mortgage market. “Interest rates are lower because putting lipstick on a pig only works until you take a closer look…it’s still a pig,” Lazerson said. “In other words, the government and the Wall Street gatekeepers have been hyping that the economy is getting better. It’s not getting better. Some say, California consumers aren’t spending because they are worried about their jobs, if they haven’t already lost their jobs.” 

Focus on FHA Mortgages and Foreclosure Prevention

According to Bryan Dornan, founder of the Lead Planet, a mortgage lead generation company that provides real time internet loan modification, refinance and FHA leads said, “Mortgage lead volumes are up again, with interest rates hitting record low’s and borrowers becoming more comfortable taking out home loans as the real estate market is getting near the bottom.”

Here is an overview on loan modification, FHA mortgage lending and foreclosure prevention legislation: Lender loan workouts have helped hundreds of thousands of homeowners renegotiate a lower rate in an effort to make their home loan more affordable.  The banks are overloaded with foreclosures and the uncertainty in the housing market has made the lenders debate on loan modifications, a no brainer.

California Mortgage and Loan Modification Law Updates

In November 2007, Gov. Arnold Schwarzenegger and several lenders announced a voluntary agreement meant to encourage loan modifications for borrowers facing foreclosure.

SB 1137: Created a 30-day waiting period before lenders could file a notice of default; required lenders to maintain foreclosed properties; notification for renters in foreclosed properties.

AB/SB 7 (Second Extraordinary Session): Enacts a 90-day foreclosure moratorium, except for mortgage lenders and loan servicers that have entered into a loan modification program.

Government level

FHA Secure looked good on paper but failed miserably because mortgage lenders refused to adapt to the FHA refinance program that was designed to bail out distressed homeowners who could not afford their adjustable rate mortgage.

Hope NOW: Program created in 2007 to encourage lenders to work with struggling borrowers. A mortgage industry group said the program has helped 2.3 million people avoid foreclosure.

President Obama’s plan: The $75 billion program aims to help 9 million struggling buyers refinance or obtain loan modifications. But many Inland homeowners may not qualify.

Pending state bills

AB 34 (Nava, D-Santa Barbara): Contains new licensing and regulation requirements for mortgage originators.

AB 260 (Lieu, D-Torrance): Imposes restrictions on subprime loans and new rules for mortgage brokers and real-estate lenders.

AB 329 (Feuer, D-Los Angeles): Creates new disclosure rules for reverse mortgages.

AB 603 (Price, D-Inglewood): Prevents for one year the eviction of renters living in a foreclosed property.

SB 94 (Calderon, D-Montebello): Prohibits advance fees for loan modifications.

SB 120 (Lowenthal, D-Long Beach): Creates protections for renters living in foreclosed homes, such as return of security deposits.

SB 239 (Pavley, D-Agoura Hills): Creates a new crime of mortgage fraud.

Voice broadcasting leads are available from companies like the Experian and the Lead Planet.  The former mortgage broker runs a growing loan modification company and recently tested “Press 1” leads for foreclosure prevention. They advertise using the Voice Broadcasting method and it is a communication technique to reach more number of customers in a simple way. This is a fast and cost effective method and many of the lead generation companies have reported conversion rates in double digits. Black says that this lead generation system enables easy management for the loan modification leads. The voice broadcasting leads are available from companies like the Experian and the Lead Planet.  Read more at Live Transfer Leads Offer High Conversions When Voice Broadcasting.

www.youtube.com/watch?v=JI-_Na169js

The Fed has agreed to purchase up to $300 billion in Treasury securities over the next 6 months. The move, which follows similar efforts in Britain and Japan, is designed to bring down longer-term mortgage interest rates that influence mortgage lending and home financing.  The Federal Reserve also committed to purchasing another $750 billion in bad credit mortgage securities issued by mortgage giants Freddie Mac and Fannie Mae which became government properties during the 2007 mortgage bail-out.

Bloomberg reported in a recent article that mortgage fees may become making it harder for people to seek refinancing. However, it is expected that the mortgage refinancing will hit a two year high. I am kind of contradicting myself, am I not? “David Rapaport, a professor at the University of California San Diego Medical School, is paying an upfront fee of $3,500 to refinance his mortgage at 5.13%. A year ago, his rate was 6.25% and there were no fees. “I’m happy just to be able to get a refinance and lower my mortgage payment,” said Rapaport, 57, who owns a 2-bedroom townhome in San Diego, where home prices have dropped 32% since June 2006. He is saving $264 a month with the new mortgage from CMG Mortgage, meaning it will take about a year to recoup the fees he paid.”  The Chicago Sun warned that homeowners need to be careful when getting a refinance loan.

www.youtube.com/watch?v=eoHmAa0WE78

Loan Modification Leads Transferred Live

Loan Modification leads are critical for mortgage brokers and loan modification companies to succeed.  The foreclosure prevention marketplace has become saturated so the need for quality loan modification leads is stronger than ever.