Yesterday was one of the biggest days of American and world history.  Barack Obama was the first African-American elected as President of the United States.  Many young people voted for the first time, and many Republicans voted Democrat.  Barack Obama gives millions of Americans a new hope for the future of America as the world looks on.  It proves that any person, no matter of race or background, has the opportunity to achieve what he or she sets their mind on.

I tried to explain to my four and five year old sons the significance of what has taken place.  They do not understand yet.   Yesterday Charlie said he hoped Barack Obama wins, and Jack, the little brother, said he hopes the Rockies win.  I was amazed when I visited kindergarten class and had lunch with the kids that they were asking me who I was voting for when the time came.  That means parents have been talking about this election for quite some time as the country faces one of the biggest financial crises of our times.  I am happy that my children will grow up in a world where an African American is President and it will be normal.  I hope this helps with race relations in America and across the world.

Barack Obama will inherit a Presidency riddled with challenges.  The stock market lost almost 500 points today and will continue to be volatile.  The housing market has a long way to recover and many changes are probably coming to the financial industry.  It will be interesting to see how the changes will affect America and if it will be enough to get us out of the current crisis.

My business partner and I get the opportunity to communicate with our HomeAssume.com customers and get a better understanding of how many people need help.  We hope to assist by allowing people to transfer real estate with low mortgage rates, good terms, and minimal cost.  We are starting a campaign to help real estate agents have a value add website to list their properties with assumable mortgages.

The coming months we have the holidays and the hope of a new future.  I hope that our website will grow to help millions of people and be a part of the change that is coming to America and the world.

It is a beautiful Saturday morning, and I am enjoying the after effects of a good run.  The sun is out, the skies are blue and the mountains are beautiful.  It is college football season and the boys have a soccer game at noon.  Does it get any better? Roll Tide by the way.

It is so easy to get caught up in daily life that we fail to appreciate our surroundings.  Today, get outside and take a look around.  We also have the modern conveniences of computers and the internet.  It is changing the way the world works, and how we can communicate instantly to share information.  In the past few months I have gotten back in touch with friends and fraternity brothers I have not seen in over a decade.

With all the applications available such as Facebook, Linked In, and Skype, we can stay in touch and feel connected no matter how far we live away.  It feels good to be connected to people you have not seen in a long time.

The world is ever evolving and it changes the way people do business.  New ideas are created everyday to help people improve the quality of life.   We at HomeAssume.com hope to help change the way real estate is transferred.  We can help solve the current crisis without billions of dollars being paid out by the government at the cost to the taxpayer.

By using assumable loans no new capital is necessary.  Financing is already in place.  The new buyer just needs to credit qualify and take over the payments.  All FHA and VA loans are assumable and more than likely have a lower than current market interest rate.  For loans not currently assumable, Fannie Mae and Freddie Mac could change that and make millions more properites available for assumption.  Currently there are over 15 million assumable mortgages in the United States, and that number is growing rapidly with FHA financing becoming more common.

We are in the process of partnering with some national relationships such as title agencies, realtors, etc and will be incorporating those to our site soon.  Our goal is to help you save money on your transactions.  We are excited to see the business grow and I am attaching a link of our latest interview in Denver on WB2 News.  This will give you a better idea of what we are about.

http://www.kwgn.com/pages/video/?clipId=2998283&topVideoCatNo=74636&c=&autoStart=true&activePane=info&LaunchPageAdTag=homepage&clipFormat=

The state of the current economy and real estate market is in a total crisis.  It seems everywhere I go at least one family has a primary residence, second home, or investment property for sale.  In the past years it has not been hard to get rid of a property because financing was available and housing prices were appreciating.

Now, it is not the case.  People moving and needing to sell may have to carry two mortgages for a long time or maybe rent out the house when they really do not want to.  Financing has all but dried up for these people unless they have at least 25-30 percent equity and plenty of liquid reserves.  For people carrying two mortgages this quickly eats up their reserves.  People are losing jobs and there is not a lot of stability in the markets.

I read a posting by Roberta Murphy and she talks about bringing back assumable mortgages.  You can enjoy her posting at:  http://sandiegopreviews.com/2008/09/29/lets-resurrect-assumable-loans/

She is correct that with all the turmoil in the real estate and credit markets that lenders, banks, the government should start taking action to get properties moving again.  Roberta mentions that currently banks balance sheets are being affected and that the values of neighborhoods are falling because of foreclosures.

The fed bailout did not pass the House yesterday.  The stock market dropped 777 points in one day.  This is a serious problem.  The government and banks must take action if we are to calm the real estate and housing market crisis.   What candidates and leaders must discuss is making loans assumable.  I welcome comments and feedback and would love to hear what other solutions people have in mind.  No matter what your political preferences are, the country must work together to get us back on the road to prosperity.

I have spoken and written to several real estate agents in the past couple weeks.   I have also reached out to some banks regarding properties that are bank owned.  In an effort to help the country out of the real estate and mortgage crisis I hope that our company can play a small part.

Many people are still unaware that all FHA and VA loans are assumable.  Borrowers must still credit qualify, but it is a very viable option for thousands of people.  Many of these loans will have a lower than current market interest rate, which in itself will make a property more attractive if the mortgage terms are good.

In an effort to help educate the general public I feel it will be necessary to partner with trusted real estate agencies and agents across the country.  We can allow them to utilize HomeAssume.com and make our site available to post their listings that have assumable loans here for potential buyers.  I welcome any comments or suggestions on my blog postings to this effect.

I also feel that banks can help as well.  Banks are sitting on thousands of properties that have been foreclosed upon or about to be foreclosed on.  Banks do not want to own real estate.  They depend on the servicing value of a customer making monthly payments.  With thousands of bank customers getting in trouble we would like to offer assistance to the banking community.

I invite them to contact us and discuss how we can help them post properties on HomeAssume.com.  If they can control if the loan is assumable, then they could help thousands of people assume loans and get these non-performing assets off their balance sheets and start receiving monthly servicing income again.  Obviously in some cases some loan modifications may be necessary, however I strongly feel that this is another way to help the consumers of our country and the banks, agents, borrowers, etc.

We are all in this together and not too many people have not been affected by the current economy, real estate downturn, higher energy prices, and in an election year.

No matter what our beliefs I feel it is out duty to try and work together and navigate our way through this environment and in the end it will all be okay.

HomeAssume.com was featured yesterday in The Denver Post. You can read the article, “When the house won’t sell, sell the mortgage”, by Aldo Svaldi at:

http://www.denverpost.com/economy/ci_10280749

It mentions one of our customers, Judith Smith, who has a FHA assumable loan at 5.75%. A potential buyer can qualify to assume her loan and get a low interest rate of 5.75% vs. the current market rate of 6.5%

She also only has 26 years left on the term of the mortgage which is a 30 year fixed rate. She and the buyer will save thousands of dollars on the transaction. She has several people now interested in the property and I am confident she will have a qualified buyer very quickly. I am excited to be able to help her and many more people, especially in the current state of the real estate market.

Yesterday my business partner, Dana Hall and I were in downtown Denver at Civic Center Park as the city gets ready to host the Democratic National Convention. We had a booth down there and talked to several people about HomeAssume.com. We got such a favorable response and it was great to talk to so many interested people.

I spoke to one gentleman who may be getting transferred to Las Vegas because of a job transfer. He was excited because he has a VA assumable mortgage, and our website is perfect for him. His interest rate is 6% and would be very attractive to a potential buyer.
As co-founder of the company it was satisfying to see our name in the paper and hopefully we will get more press as more and more people find out about us. Thanks to our friends and family who have supported us in starting the company and we look forward to helping as many people as possible.
I encourage any comments and feedback to let us know how we are doing.

An article came out today by the Associated Press about the increase in FHA loans. It states, ” The share of home loan applications backed by the government more than tripled last month from a year earlier as funding for home loans dried up from private lenders.”

This data came from the Mortgage Bankers Association (MBA) , and is in reference to the growing popularity of FHA loans. FHA loans made up more than 29 percent of all loan applications last month, compared with 8.4 percent last July.

We are seeing the government’s market share increasing every month. As financing gets harder and credit requirements get tighter we are going to see more and more FHA loans. This is a good thing as they are great loans and are all full documentation.  This means the lender is qualifying based on true income, verified with paystubs and verification of employment for salaried borrowers, and with tax returns for borrowers who are self employed.  This will help eliminate people getting into homes they can not afford.

If a crisis happens, such as job loss, injury, or some other unforeseen happenstance that affects their ability to make payments the loan is assumable.  Instead of having to face foreclosure because the owner is behind on paying and has little equity, they can have potential buyers assume the loan.

The government reported Friday that employers cut payrolls by 51,000 jobs. That is the seventh consecutive month we have seen significant job losses, 463,000 since January. The losses will continue until the housing market stabilizes and stops dragging down the rest of the economy.

People are not buying new cars and other higher ticket items as they used too. It feels as if we are already in a recession, however that is debated depending on who you are speaking with. Over 270 mortgage lenders have gone out of business and 15 to 20 percent of residential builders have gone out of business according the National Association of Home Builders. Many of these builders are defaulting on loans and causing a halt in construction and new neighborhoods that sit almost empty.

Lending requirements are getting stricter and it is harder for buyers to qualify to buy a home. There are millions of homes for sale in the United States and several thousand facing foreclosure every day. FHA is about to change the down payment requirement for 3 percent to 3.5 percent. Fannie Mae and Freddie Mac is requiring even more. For the people that need to move and have little or no equity this makes listing their house for sell on HomeAssume.com more attractive.

It will help buyers more easily qualify for a good FHA or VA loan at a low interest rate and will help the sellers move, avoid foreclosure, and save both parties thousands of dollars. Currently lenders have thousands of homes that have gone into foreclosure and if they would let potential buyers assume a mortgage that might not normally be assumable we could help the country reduce the amount of inventory of homes on the market. If the terms of the mortgage are not favorable they could adjust so that it could be a win win for everyone involved. A house sitting empty owned by a bank does not help the bank or the economy.

It seems that the new housing bill is about to become law. It looks like it will probably be the federal governments most expansive effort to try and stabilize the the mortgage and financial markets.

However it comes at a massive cost to the United States government in the amount of 300 billion dollars. Several Republicans are hesitant to sign the bill, however with the housing crisis as bad as it is they see it as some relief. I am not sure how many people it will really help. Time will tell.

One of the main things it is aiming to do is allow the lender or investor holding the loan to accept at least a 15% writedown of the previous loan. Lenders, however are not required to participate. The bill will also end the seller funded down payment assistance programs for FHA loans.

Fannie Mae, Freddie Mac, and FHA accounted for more than 90% of U.S. home mortgages in the second quarter according to Inside Mortgage Finance. This is mainly due to the lack of Alt A, sub-prime, and jumbo loan products. We may never see the Alt A loans and sub prime that was available in the last few years ever again. That is the reason for several lenders going out of business and some large banks. However it is a shame that the jumbo mortgage market has dried up. Because of the credit squeeze lenders are not taking risks on these loans ($417,000 and higher) that more than likely perform as good or better than conventional loans, and in some cases are paying much higher interest rates.

President Bush is slated to sign the bill without much fanfare at the request of Henry Paulson, and the bill will become law. It will be interesting over the next couple of quarters and next year to see what effect it has on our nations current housing and mortgage crisis.

One last thing they should consider is making all loans assumable. If the quality of new loans going forward are more strict and are considered good loans the banks should make them assumable. When someone wants to move, having a low interest rate on a good loan will make it much more attractive as interest rates rise from their historical lows. It will alleviate several thousands in costs for both parties and gives the consumer more power. The lender still keeps a good loan in their portfolio and everyone wins.

I am writing this post after reading an article by Jonathon L. Kempner, president and CEO of the Mortgage Bankers Association. You can read the article at: http://www.freep.com/apps/pbcs.dll/article?AID=/20080627/OPINION02/806270336

The article talks about lending laws that may wipe out non prime lending in the state that he feels would have negative consequences in the form of reduced credit availability, increased loan costs to consumers, and the possibility of mortgage companies not willing to do business in Michigan.

I do believe that in certain instances non prime or subprime lending has its place. However I have worked in prime lending in my career and believe it is a better alternative. If a borrower can not qualify to buy a home in a normal conventional Fannie Mae/Freddie Mac loan, then they have the option of getting an FHA mortgage.

FHA mortgages are the key to homeownership. In my experience if a borrower can not qualify for a FHA mortgage they may be better off renting and improving their credit until they do qualify. FHA loans have a low interest rate that even if doing an ARM it can not exceed 1% increase per year, whereas in subprime loans the increase in rate and payment far exceeds that. Most of the subprime loans had a prepayment penalty as well that FHA loans do not have.

FHA currently requires a 3% down payment. If the borrower does not have that there are down payment assistance programs that can help them obtain the 3% or it can be gifted by a family member. That borrower will have a good loan at a market interest rate which they have to qualify by having debt ratios of 31/43 or less. FHA loans are assumable and that means that if the borrower wants to move out then a new borrower can assume the mortgage as long as they qualify. That is a great tool that will be used more often in real estate transactions.

One of the comments to Mr. Kempner’s article says that several people can’t sell their home without bringing a checkbook to closing and there aren’t too many viable options. One option is HomeAssume.com. We allow homeowners with assumable mortgages to list their homes for sale on our website. I agree that the Michigan economy is in trouble because of the auto industry layoffs and many people have to find work at lower wages. These are good people who are in difficult times and have exhausted their savings trying to hang on. Several people have lost or will lose their homes in the current market environment.

I agree with Mr. Kempner and not sure that passing a lot of laws will help that. The bottom line is that the consumer needs to be more educated in mortgages and professional mortgage brokers can help. In my experience the mortgage companies that offer FHA loans do a good job of that and help people become homeowners.

Fathers Day Weekend is one of my favorites, especially now that I am a father of two boys. I am lucky to have healthy, beautiful children. They are so full of energy and wonderment. It is fun to teach them about sports and the lessons that come with that, such as being a good sport, be a team player, and to never give up.

One of my favorite golf tournaments is the US Open which is always on Father’s Day weekend. My boys, ages 5 and 3 love Tiger Woods and cheer him on with me. It is a blast to watch him play. Tiger never gives up and grinds through every round and every shot. That is why he is the number one player in the world.

We are in an bad real estate martket now and still not sure if we have hit the bottom yet. However, we have to remember that we will get through this and we are lucky to have people like Tiger who can inspire us.

I am glad to be able to share golf and sports with my kids. It teaches us all to never give up, and know that even if we lose the game today, we have the opportunity to play again. Never give up.