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Mortgage Loan Modification

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I have just attended an initial introductory briefing on Mortgage Loan Modifications.

I still have a lot to learn, but over the next few days, I will be writing on my understanding of the program - what is likely and unlikely to fly, etcetera. I have training scheduled to learn all of the nuts and bolts a professional needs to know in order to participate meaningfully, at which point I will be offering one such program.

For now, I have a "What the consumer needs to know plus the executive summary of what a professional needs to know" level of knowledge.

But the important thing for consumers to know right now is that for the first time, I am going to have a tool that I can use to keep people from being foreclosed upon.

I can't stay in business doing Loan Modifications. But it is a tool that I can use to make the problem better without suffering through a year or more of problems and short sale or foreclosure first.

I will be giving this talk, which I expect to last approximately 45 minutes, depending upon questions.

Thursday, November 15, 2007 at 7pm

Action Realty, Inc
9143 Mission Gorge Road STE A
Santee CA

If you want to buy real estate, the best time historically has been when there are a large number of sellers and not many buyers. Furthermore, there are currently a large number of lender owned properties and properties in foreclosure on the market.

Come Learn the basic issues of foreclosures and buying properties without cash, and how to take advantage of the current state of the market!

Cost: FREE to the public.

No reservation required but space is limited. Reserve now to get guaranteed seating.

Action Realty

(we're planning an entire series of seminars on the second Thursday of every month. Next month, I get to pick the topic)

Here's something useful, with many properties worth less than their purchase price. If you're one of those who paid more than the property is now worth, you can have your property re-assessed downwards in value - if you file by September 15, 2007.

Application For Changed Assessment - PDF Version

Application For Changed Assessment - Microsoft Word Version

If for some reason, one of the links doesn't work, here's the page I found it on: Assessment Appeals Board

Or, Some Are Born Scum, Others Achieve Scum-hood, and others have scumminess thrust upon them.

I spent several hours Thursday "house-fishing". Kind of like people hunting for a house to buy for themselves, but I'm looking on behalf of clients. This eliminates embarrassing moments in front of clients, taking them to a place that may look great on the MLS, but has one or more factors about it that renders it a waste of the time I have with a particular client. I want the time a client gives me to be productive, and show them that I'm on the ball and know what I'm taking them to and that I won't waste their time. I really don't like taking clients to properties I haven't previewed. I won't do it without what I consider an over-riding reason, and there aren't many of those. But while out there, I had two really strong, "Some people are scum!" moments.

The first was mid-afternoon. I'd looked at several properties already and had half a dozen left to do. A little dog, maybe a Shelty or maybe a Corgi limped up to me when I parked. Poor creature looked dirty, bedraggled and hurt, but seemed friendly enough, so I petted her and got her calmed down. She had a license, so I called animal control, and the automated system gave me the owner's number. "Cool!", I thought, "I get to do a good deed today!" Called the number, left a message, left my phone number. She seemed willing to stay, so I was going to take a quick two minute look at the house while I left her outside, give the owner one more call and take her to the shelter. I've even got a couple bites of sandwich left in the car. Well, up drives an older man and the first words out of his mouth are "Bad dog!" That should have set alarm bells ringing, but it didn't, I'm ashamed to say. He apologized to me for her having run off, and she went off with him willingly. All was happy with the world, or so I thought. It wasn't until they were gone that I thought there were maybe some signs of, if not necessarily abuse, at least neglect. She was so happy to get some positive attention.

Then about twenty minutes and two houses later, my cell phone rang. Yes, they had owned a female Corgi - she was stolen about two years ago. I was standing there thunderstruck at what a idiot I had been. I hadn't even written down the license plate of the car the guy was driving. Imagine: Your dog is stolen. Two years go by, and you get a message on your answering machine that maybe, against all odds, someone has found your dog. Then the dimwit (that would be me) lets the thief make off with the dog again without even writing down the license plate of the car. I apologized, told the lady what neighborhood I found her in, and offered to at least describe the car and the man, and meet her and whomever else she wanted to bring at the corner closest, and we could all walk the neighborhood and look. If there ever is a next time, I'll write down the plate at the very least, even if the dog is wriggling in excitement and the six year old is happily crying that they got their doggie back.

Later on, something about the last house on today's route seemed a little familiar. No, I hadn't been there before. I couldn't put my finger on it, hard as I tried, and then I saw a picture, left behind on the floor. It was a guy I'd been working with about four months ago; he had been screwed badly by an unscrupulous lender. So badly that there was nothing I could do to salvage the loan situation. I priced him out with over seventy lenders, and the only place that would do the loan, the rate wasn't enough lower to help, and with the drop off in prices, then an appraiser I asked for a ballpark said the value had gone down so much that it was below that one lender's guideline. I felt rotten about it, but the only realistic solution was a quick sale. Comps suggested $455,000 as a realistic price, but the guy couldn't make the payments so I estimated the quick sale price was most likely about $430,000. Well, he was talking to other folks also, which was good and smart and I couldn't argue with the logic, and that other guy swore he could get the guy the loan. Well, the guy wanted to save his long-time home if he could, so I did the ethical thing: Told the guy while I sincerely doubted that a loan would actually be consummated given the situation (low credit score, high loan to value, and inability to document sufficient income), but if this other guy was certain, I understood and I wasn't absolutely certain it was impossible, just very unlikely. I basically got the heck out of the way of the guy's attempt to save his house.

Well, it's on the market now with a pending Trustee's Sale. It took me about five minutes to confirm the whole story when I got back to the office. This clown wasted the entire summer - peak buying season - trying to do a loan that I should have been more certain could not be done, while prices started to collapse, and then was rewarded for his perfidy with the listing, and since prices are further down now, and the guy trashed the place during the move out, I really don't think it will sell for more than $390,000 at the very most, and that's if it sells. If it doesn't, he gets a full-on foreclosure which is not something he can recover from at retirement age. Even if it sells for top possible dollar, it will end up with the guy having a net liability of several tens of thousands of dollars to the lender, or a tax bill to match for debt forgiveness if the lender forgives it. And I scored an assist for doubting myself, for not speaking out more strongly, for thinking that maybe someone else might be able to help where I couldn't, despite the evidence I get every day about what f-ing sleazeball incompetents out for a bigger commission no matter what it does to the client that so many people in my profession are.

(One of the earlier houses had a card with the agent's name, and the title was "Attorney/Realtor." Impressive enough, but he had left a Loan Worksheet there, promoting a thirty year fixed at 6.5% for "only" one point, or a 3/1 at 6.375 for "only" one point. Ladies and gentlemen, I have a 30 year fixed at 5.875% for that cost today, and a 5/1 at 5.625% for that cost. Last week, I had the thirty year fixed at 5.75% for that cost. The Dread Pirate Attorney's quoted loans have two points of yield spread on top of the point of origination he's charging. With the same assumptions he's using and no pre-payment penalty, I could do a literally zero cost loan - pay all the loan costs out of what I make and still come away with my usual compensation, if not more. That's the kind of difference shopping around can make.)

So I'm feeling lower than the repository of whale excrement right now, but lesson learned. From now on, no enabling the scum-meisters. I may not have been in it long enough to know everything, but I've spent enough time and effort looking for ways to make it happen, and systematizing everything such that I shouldn't be afraid to communicate in much stronger terms that something just isn't possible, and I'm going to start writing up contracts - simple written promises on a piece of paper - to give to people so they can ask the scum-meisters who promise something I know isn't going to happen. Sign it, or admit you can't do it. That way there's no pretense about it. If you really think you can do it, there's no reason why you shouldn't sign. I couldn't have saved the guy's house, but I sure could have kept the situation from being quite so bad - if I hadn't thought that just maybe somebody else might be able to do what I knew I couldn't and wouldn't pretend that I could. Yes, I am angry. Yes, I am disgusted. But I'm going to turn that around right now and start doing something positive about the situation. From here on out, nobody else gets victimized if I can do something reasonable about it.

Caveat Emptor.

What I Do

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Loan Officer: I do all sorts of residential and most sorts of commercial real estate loans. I work with over 80 lenders of all sorts, and all sorts of credit from the very best to the very worst. Even if nobody else can do it, I can usually think of a way to make it work. Please contact me for a free consultation as to the best loan for you.

Buyer's Agent: I am also a Realtor®. I love going around finding bargain properties. Whether it's a fixer, a foreclosure, owned by the bank, or just a wonderful opportunity, I go out and spend several hours looking two or three times a week, with clients or without. I believe in educating clients about everything they need to know and why, but you don't have to be Sherlock Holmes to benefit. You don't have to read everything I ever wrote, or anything at all, but it's there if you want to. There is no such thing as a perfect property, but there are better bargains and not so good ones. Let's talk about what you're looking for, and chances are I can find it pretty quick even if I haven't already. Best of all, the sellers pay me for this! I've never had to charge my buyer clients a penny!

(If you come to me having already settled on a property you want to make an offer on, I will rebate a portion of the buyer's broker fee. Legally, this money can only be used to pay closing and loan costs, or to reduce the sale price - it cannot take the form of cash in your pocket unless you're paying all cash for the property)

Seller's Agent: I am a Realtor®. My service starts well before the property hits the market. I help you price the property correctly and get it ready for sale, and market it effectively for a fast sale for a very competitive price. I don't tell you to price below the market, nor do I promise a high sales price to get the listing and pressure you to drop it two weeks later. I do help you price it to the market and then I go out and sell your property! Please contact me and we'll figure out the option that makes the most sense for your sales situation.

For Real Estate Buyers and Sellers, I specialize in the urban areas around La Mesa (Zip Codes 91941 and 91942), Santee (Zip Code 92071), El Cajon (Zip Codes 92020, 92021, and 92019) and adjacent areas of San Diego (Zip Code 92119, with parts of Zip Codes 92120 and 92115). I was born here, I grew up here, I've watched the area grow and mature. I know the neighborhood markets. I work upon request in other areas of the county. Sorry, but I do not engage in sales work outside of San Diego County. There are only 24 hours per day, and I do not believe I can maintain the level of knowledge necessary, nor provide the level of service necessary

I am able to do loans anywhere in California. Extremely competitive quotes, Guaranteed at time of lock. If it costs more than I say it will, you don't pay the difference - I do.

I am quite happy to be judged by the yardsticks and with the tools for evaluation I put out here for you. That way there is no question in your mind how great of a job I'm doing!

Ask for your free consultation today!

Dan Melson Loan Officer and Realtor®
Clarion Mortgage Capital/Clarity Real Estate Network

danmelson (at) danmelson (dot) com (no vendors)
619-300-7425 (no vendors)

Do You Have a Bad Loan?

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If so, the odds are excellent I can put you into a better situation.

If your agent or loan officer took advantage of you by putting you into a Negative Amortization loan (also known as Option ARM, Pick a Pay, and many other pleasant sounding nicknames), and it's making you crazy, odds are good that I can put you into a thirty year fixed rate loan at a rate that is lower than the real rate on the Option ARM. Your minimum payment will be higher, but it'll be a real payment, cheaper than your current 30 year option, and your loan balance will stop increasing.

If you have a short term interest only option that's about to adjust and suddenly require higher payments than you can make, I can help there also. Chances are excellent that I can move you to a thirty year fixed rate loan at a lower rate than you are paying, and I also have a variety of interest only options, both on thirty year fixed rate loans and others.

If interest only isn't an idea that works for you but you can't quite make the payments on a thirty year loan, I also have forty and fifty year loans available. These have somewhat lower payments than a thirty year fixed rate loan, but you're still making progress on the loan and building equity.

If you have an ARM that has or will adjust to something you don't like, please call or email. I can do home loans for bad credit, low to no equity, and many other problems that people have in the real world.

So you know how I do business, I hereby promise all my clients:

I will always put your interests before my own, even if it means advising you that, were I in your situation, I would not buy, sell, or refinance. If I don't think I can make your situation better, I will tell you straight out.

I will never work both sides of the same transaction. I'm working for your best interest, and no one else's. Whether I am representing the buyer or the seller, I represent them only, and will refer the other side of the transaction to another agent. I do not engage in dual agency.

I will never quote you anything but the full costs and correct rate for a loan I have reason to believe I can really deliver. I will guarantee in writing the cost and terms of my quotes, contingent upon underwriting approval. No low balls, no pretending costs don't exist or aren't my responsibility to tell you about. If you would rather, you may choose the terms of the Upfront Mortgage Broker's guarantee instead of my own. Only an underwriter can approve a loan, but that's no excuse for pretending I can deliver something I know I can't.

I will always tell you the complete truth as I understand it. I may be wrong, but I will not lie or obscure the truth.

If I see something that may be a problem with a property as a buyer's agent, I will bring it to your attention immediately, not bury the matter in the fine print of disclosures. I can always find you another property. Once breached, nobody can recover trust or credibility.

If I think I see a better way to do something, or a way to put you into in a better situation, I will advise you of it, but the final decision must be the yours, and I promise to respect that.

I never lose sight of the fact that once you're in the property, you are going to have to actually make those payments, and I want to make certain that you can. I will remain within your budget for buying a property. I will not show you properties which cannot realistically be obtained within your stated budget on a stable and sustainable loan for which I believe you will qualify.

I will work under non-exclusive agency agreements to the extent possible. I will not ask for an exclusive buyer's agent agreement unless I am giving you something that costs significant money otherwise. Exclusive buyer's agent agreements do not benefit the client, they benefit the agent by locking up your business for a given amount of time no matter what the agent does or doesn't do. Non-exclusive agent agreements are better for clients. They motivate the agent to work, because if someone else fulfills that buyer's needs that someone else gets paid and the agent gets nothing.

I will keep my list of active clients short enough that I can handle all the work myself. I owe you my personal attention, not a clueless unlicensed assistant who was working fast food two weeks ago. Where I do involve assistants, they will be behind the scenes. You get my personal best efforts on your behalf.

Dan Melson, Realtor and Loan Officer (no vendors)
619-300-7425 (no vendors)

Hello and Welcome!

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Welcome to Dan Melson's San Diego Real Estate and Mortgage Tips Website. I've been running Searchlight Crusade for about a year, and it's up to getting an average of over 2000 visits per day due to the fact that I tell the truth as I see it about the markets and everything else. This site will have the same real estate and mortgage articles, but with a local San Diego bent.

I am a very experienced loan officer and somewhat new real estate agent. It's the same license, but the skills and knowledge involved are very different. Most real estate agents who do loans just started because they could make more money off the same number of clients. I spent time with an internet loan house and did more loans than most loan officers do in twenty years in the space of two before I started learning real estate. I also have a background in the financial services industry. I know what works and what doesn't, and why.

I am not going to try to bring anyone up to a professional level of knowledge in either real estate or loans. What I am going to try to do is educate you in the mindset and what you need to know to protect yourself from the less than ethical operators out there. I am also going to have some articles of strictly local nature.

There should be a link to the MLS service off my office's website before too long; the website is currently being redone. I'm putting it up for the folks who will want that sort of thing, but the main attraction of this website will be straight talk about San Diego real estate and mortgage loans. Since I started writing about my knowledge, I've often been asked why more loan officers and agents don't have the same sort of information on their site. The answer to this is twofold. First, many of them don't know this stuff. They got into this business "shake and bake" style because they were told it was an easy way to make money, and they really don't understand what is going on, particularly not the economic factors. Second, for those who do know, if they told you the unvarnished truth it might make it harder for them to make money off of you. I'm not afraid of that. I'd rather tell you straight off if I believe it is not in your best interests to buy, sell, or refinance at this time. I believe you'll respect me for it, and quite likely send me your friends, family, and anyone else you know who would like an honest answer to the situation. Furthermore, I believe you'll likely come back to me yourself when it is a good time. Finally, for those who could do well to buy, sell, or refinance, the fact that I'm willing to give a straight "I don't think it's in your best interest" makes my recommendation carry a lot more weight when it is in favor of doing something.

Over the next couple of days, I'll have a market outlook article publish, as well as my promise to all my clients and a piece on where I believe there are significant opportunities remaining. Then roughly one hundred already written consumer knowledge essays, at a rate of one per day. I will be writing more. Strategies to protect yourself, what folks in the business really mean when they say something, how to come out as well as possible. Perhaps even a bit of humor. They are written for the generally intelligent layperson, and they pull no punches. Most of them can be read in a break at work.

As I said, my background is very strong on the loan side. I also act as an agent. I specialize more in working with potential buyers than with sellers, but I am set up for both. If you have a property you wish to sell, you could do a lot worse than bringing it to me. I'll ask you what your needs and wants are and do an honest analysis of your situation before I start making recommendations, and the recommendations I make are always tailored to your individual situation. If you're wanting to buy, even better, because I know better than almost anyone else what kinds of loans can and cannot be done, and I'll stick to showing you properties within your budget. Buyer or seller, I'm always working to get you the best possible price, and I never work both the buyer's side and seller's side of the same transaction. That way I'm always doing my best for whomever I'm representing. When I find a buyer for a property I listed, I'll refer them over to another agent. My loyalties are never split.

I do my loans, both purchase money and refinance, on a much tighter margin than almost anyone out there, and I guarantee my quotes. This means that not only am I going to give you a cheaper tradeoff on the rate and cost of the loan, but that what I tell you at the start is going to be what you end up with. I'll tell you about a loan I can deliver, not a teaser quote just to get you to sign up. You won't suddenly be paying $150 per month more than I said, or have $12,000 added to your loan above my quote. When I guarantee a quote, I'll pay the difference, not you (there are some limitations that I'll be happy to explain). I also further discount my rates if I'm acting as your agent on the purchase. It means nobody is really going to beat my rates on a purchase, and it saves both of us a lot of aggravation. I work with over eighty lenders, and most of them give me better rates than they give their own loan officers, because they don't have to pay me when I'm not doing loans. This also means I can really find the loan program that best fits your needs.

Dan Melson


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