SHORT REFINANCE FHA SECURE, HOW TO GET THE BANK TO DISCOUNT YOUR MORTGAGE
August 16, 2008
Tucson AZ – In Arizona we have been seeing record numbers of foreclosures, record numbers of bank repos and record numbers of short sales. Homeowners are faced with rising mortgage payments when their once low adjustable rate mortgages reset and climb. A short sale has been a common answer to losing a home through foreclosure.
But now there’s a new answer; the short refinance FHA Secure. The short refinance works exactly the same as a short sale with the exception that the homeowner remains a homeowner. In a short sale, once an offer comes in it gets presented to the bank along with an application package from the seller to the bank asking to take a discount on the current mortgage. Once the bank accepts the offer for less than what the seller owes the bank they have agreed to a short sale. A short refinance works in much the same way as a short sale only in the case of a short refinance the “offer” presented to the bank is actually a copy of the homeowner’s brand new short refinance FHA Secure approval. The short refinance approval, along with all the supporting documentation, is then submitted to the bank requesting a discount. Once the bank accepts the discount, they have accepted a short payoff and agreed to a discount on the loan allowing for the short refinance.
A major benefit of the short refinance is that it allows borrowers to keep their homes. The short refinance delights homeowners because they get a new start with a lower mortgage payment and a lower mortgage balance.
Why would the bank agree to a short refinance and not just foreclose on the property? Simply put foreclosing on a property requires large amounts of legal fees and then the home is typically sold at a substantial discount off of the fair market value. The short refinance allows the bank to avoid the majority of the legal fees and let’s the new lender make its largest loan based on the fair market value.
To read about how the Short Refinance FHA Secure Helps 200,000 families.
To apply for a Short Refinance FHA Secure loan visit Short Refinance Application.
For more information on the Short Refinance FHA Secure contact:
Paul Dunn
FHA Lending Specialist
First Priority Financial
520-225-0380
tucson-fha-loans.com
usdaruralhomeloans.com
Nationwide Mortgage Services Introduces Virtual Loan Department for Maryland Mortgage Customers
August 4, 2008
Nationwide Mortgage Services, based in Rockville, MD, has introduced a new Virtual Loan Department to help consumers navigate the programs and products available in the current mortgage market. With fewer lenders and strict lending guidelines, fewer options have become available to consumers. Nationwide Mortgage Services has introduced this streaming audio and video to simply the process for the consumer.
Rockville, MD (PRWEB) August 4, 2008 — Nationwide Mortgage Services, a Rockville, MD company, has introduced a new Virtual Loan Department to help consumers navigate through new lending guidelines, practices and procedures. The new site developed in July will educate consumers on a variety of programs and products available in the “new” mortgage environment, while allowing the ability to shop for a mortgage program 24 hours a day. The Virtual Loan Department can be accessed at www.tmmortgagegroup.com.
Nationwide has built a strong reputation as an outstanding mortgage brokerage firm and lender serving the lending needs of real estate professionals, builders and individual homebuyers throughout Maryland, Virginia, DC, Pennsylvania, South Carolina, and Florida.
Nationwide is a full service mortgage broker with an experienced staff offering expertise in every area of mortgage lending…from purchase to refinance to construction lending. Nationwide has access to a full range of mortgage sources and all lending specialists are dedicated to finding the right loan-with the best rates, terms and costs-to meet the borrowers unique needs. Throughout the lending process, Nationwide provides loan updates and progress reports to consumers and real estate professionals alike.
Now all of our mortgage services are available online through the Virtual Loan Department. The consumer will have access to the best loans available in the marketplace simply by submitting a secure application online. Customers can fill out a form and be given several real-time quotes through the virtual loan department. Borrowers will now have access not only to the best loans available in the marketplace, but you can also review loan alternatives, 24 hours a day.
“The mortgage industry has changed so drastically over the past year that many borrowers are unclear of options available to them. Our goal is to help educate the borrower, provide an assortment of options available, and provide the most competitive rates in the industry. Our Virtual Loan Department will allow the consumer to shop on their terms and their time table” - Tim Marose, Vice President of Residential Lending, Nationwide Mortgage Services.
For additional information on the news that is the subject of this release, please contact Tim Marose or visit www.tmmortgagegroup.com
Contact:
Tim Marose
Vice President of Residential Lending
Nationwide Mortgage Services
4 Research Place, Suite 140
Rockville, MD 20850
301-217-5858 x637
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Reverse Mortgage Industry Tips on Successful Internet Marketing and Lead Incubation Strategies
July 29, 2008
Gretchen Williams of Reverse Mortgage Directory, LLC (RMD) shares Internet marketing and lead incubation tips with industry professionals in the feature article of The Reverse Review, “Why Internet Marketing?” The article addresses website design tips, strategy, general online marketing terminology and keys for successful lead incubation.
Los Angeles, CA (PRWEB) July 29, 2008 — RMD Director of Sales and Customer Relations, Gretchen Williams, shares web design tips and online reverse mortgage marketing and lead incubation strategies in the June issue featured article of The Reverse Review, “Why Internet Marketing?” The Reverse Review is a reverse mortgage business-to-business publication that educates reverse mortgage professionals and those originators seeking to learn about the reverse industry.
The belief among many reverse mortgage professionals is that the senior demographic is not online and, therefore, there is no need to get involved in Internet advertising. “We hear this from reverse mortgage professionals all the time. The fact of the matter is that that comment just points to the fact that the online senior community is an untapped market. Not to mention that online marketing affords the opportunity to speak to third-party decision makers (like adult children)”, says Williams. “Earning the trust of these individuals early on in the process has proven to increase the lead-to-loan close ratio of our clients. The best part is that in these deals those third parties tend to take on a lot of the legwork.”
A marketing strategy is only as good as its follow up strategy. Persistence and continued follow up are among the keys to success, especially since seniors interested in a reverse mortgage lack that sense of urgency that one might find when working with a new homeowner. “I regularly discuss lead incubation tips with our clients so they can get the most out of every lead”, said Williams who has spent the last 4 years advising mortgage and real estate professionals on Internet lead follow up. “Creating a schedule for continued follow up is particularly important in the reverse mortgage industry since it helps originators to build the rapport and relationship that senior consumers are looking for.”
Gretchen Williams is the Director of Sales and Customer Relations for Reverse Mortgage Directory, LLC and focuses on advising industry professionals on Internet marketing strategy and successful lead incubation. Every month RMD provides thousands of guaranteed reverse mortgage leads to hundreds of Lenders across the United States through its consumer site, ReverseMortgageAdviser.com. The site also offers consumer access to its National Lender Directory. RMD is a member of the Better Business Bureau, National Aging In Place Council and National Reverse Mortgage Lenders Association.
For more information on reverse mortgage leads contact:
Gretchen Williams, Director of Sales & Customer Relations
RMD, LLC
888.412.5557
www.ReverseMortgageAdviser.com
More Bad News for Financial Institutions
July 27, 2008
Mike Larson takes a closer look at the declining second quarter earnings of both big and small financial institutions. In this issue of Money and Markets, Mr. Larson discusses how although there is bad news for financial institutions, finance and real estate companies aren’t doing that badly.
Jupiter, FL (PRWEB) July 27, 2008 — Mike Larson takes a closer look at the declining second quarter earnings of both big and small financial institutions. Mr. Larson discusses how although there is bad news for financial institutions, finance and real estate companies aren’t doing that badly.
American Express recently reported a 38% year over year plunge in second-quarter profits. Earnings per share of 56 cents were far below the Wall Street consensus of 83 cents. According to the company’s CEO Kenneth Chenault, “Consumer spending slowed during the latter part of the quarter and credit indicators deteriorated beyond our expectations. The scope of the economic fallout was evident even among our longer term, superprime cardmembers.”
Megabank Wachovia recently recorded a loss of $8.9 billion, or $4.20 per share, in the second quarter. Analysts were looking for a loss of just 78 cents per share. The bank said it plans to slash almost 11,000 jobs. It also cut its quarterly dividend down 87% to just 5 cents a share.
Even the smaller regional banks are seeing more bad news. Regions Financial turned in a 55% drop in profit. Fifth Third of Cincinnati lost $202 million, a huge swing from 2007, when it generated $376 million in net income. KeyCorp of Cleveland did much worse. Its quarterly loss: $1.13 billion versus the income in 2007of $334 million.
Despite the news, shares of finance and real estate companies haven’t been doing that badly. In fact, they’ve been surging. Wachovia was up as much as 148% from its recent intraday low to intraday high. Bank of America surged 86%, while JPMorgan Chase gained 47%.
According to Larson, investors are ignoring all the bad news for a few different reasons. They figure that the Fannie Mae and Freddie Mac rescue program being put into place will be enough to backstop those firms. The Treasury Department is getting authority to extend an unlimited amount of credit to the two Government Sponsored Enterprises, and to buy an unspecified amount of their shares.
Some of the banks that have reported earnings have said they don’t need to raise capital immediately. Many have opted instead to sell off assets. Merrill Lynch unloaded its stake in the Bloomberg news service for $4.43 billion, for instance, while SunTrust Banks is liquidating 40 million shares of Coca-Cola.
“A housing support bill is finally making it into law. The bill has several provisions, including a tax credit of as much as $7,500 for first-time home buyers and a property tax deduction for certain homeowners. It will also authorize a mortgage program that requires lenders to recognize some losses on their existing loans, but that gives them an out by allowing them to then be paid off with new, lower-balance loans backed by the Federal Housing Administration,” Larson states.
To read this issue online, please visit:
http://www.moneyandmarkets.com/Issues.aspx?Wall-Street-in-Financial-Stock-Fantasyland-2015
About Mike Larson and Money and Markets
Mike Larson joined the company in 2001, and has more than 10 years of experience researching and writing about personal finance, investing, and the housing and mortgage industry. In 2003, Mr. Larson was named associate editor of the company’s monthly Safe Money Report. In this role, he is responsible for writing and editing as well as analyzing trading opportunities for clients. Mr. Larson is also a regular contributor to the company’s daily e-letter, Money and Markets.
Before joining Weiss Research, Mr. Larson was a personal finance reporter for Bankrate.com, where he wrote extensively on mortgage lending, banking, residential real estate, and Federal Reserve Board policy. His responsibilities included analyzing economic data and interest rate trends for a weekly column and developing rate forecasts for a regular index feature. Previously, Mr. Larson held positions at Bloomberg News and the Boston Herald.
Recognized as an interest rate and mortgage market expert, Mr. Larson’s views have been quoted in the Washington Post, Chicago Tribune, Dow Jones Newswires, Reuters, Sun-Sentinel and the Palm Beach Post. He has also appeared as an investment expert to discuss the housing market on CNBC, CNN, and Bloomberg Television. His writing has been acknowledged by both the National Association of Real Estate Editors and the Massachusetts Press Association.
Among the first analysts to call the housing slide, Mr. Larson’s new policy paper, “How Federal Regulators, Lenders and Wall Street Created America’s Housing Crisis: Nine Proposals for a Long-Term Recovery” has received broad media coverage following its July 2007 submission to the Federal Reserve and FDIC. Mr. Larson holds B.A. and B.S. degrees from Boston University.
Money and Markets (www.moneyandmarkets.com) is a free daily investment newsletter from Dr. Martin Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Weiss Research, Inc. is located in Jupiter, Florida. For more information about our editors, or to set up an interview, please contact Jennifer Moran at 561-627-3300 or visit www.moneyandmarkets.com.
Oxford Funding Predicts More to Come for Mortgage Crisis
July 24, 2008
HOUSTON, TX–(Marketwire - July 24, 2008) - The current mortgage situation isn’t bad for everyone, at least from Bob Dunn’s perspective.
A new Fox Business News poll just released shows that 55% of those polled do not believe that the “worst of the subprime-mortgage mess” is over for major U.S. banks.
“With banks continuing to increase their reserves for bad loans, Oxford Funding Corporation is in an excellent position to continue to increase its position in mortgage portfolios at significant discounts,” says Bob Dunn, President of Oxford.
The company recently began selling individual mortgage loans to accredited investors. This type of opportunity had been reserved exclusively for banks and institutional investors.
Oxford Funding (PINKSHEETS: OXFD) is a publicly traded asset resolution company specializing in the purchase, sale, and management of individual and bulk mortgage loan portfolios.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This news release contains forward-looking information within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements that include the words “believes,” “expects,” “anticipate” or similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the company to differ materially from those expressed or implied by such forward-looking statements. In addition, description of anyone’s past success, either financial or strategic, is no guarantee of future success. This news release speaks as of the date first set forth above and the company assumes no responsibility to update the information included herein for events occurring after the date hereof.
MN Mortgage Broker Interprets Pending “Housing Rescue” Legislation As Killing Off The First Time Home Buyer And Extending The Housing Crisis
July 24, 2008
Mortgage industry veteran shares her knowledge as it applies to Section 113 of the “Housing Rescue” Legislation eliminating down payment assistance (DPA) that is pending before congress this week. Our fragile real estate and mortgage markets will be impacted extremely negatively if this bill passes and is signed into law. FHA loans are now providing up to 40% of new loan originations and up to 30% of those loans are using DPA programs. It is estimated that between 300,000-500,000 families will be unable to purchase a home next year if this change becomes law. First time buyers will remain renters and homes will stagnate on the market unless we maintain the use of down payment assistance with existing FHA mortgage programs. Working class families and minorities are projected to be the groups most affected.
Edina, MN (PRWEB) July 24, 2008 — Mortgage Broker-Venture Development shares salient points and opinions regarding the government proposed solution to the housing crisis. In an article today in the Washington Post, Chairman Barney Frank of the House Financial Services Committe is quoted as saying that “the House will yield to the Senate on the termination of seller participation in down payment assistance programs.” Down Payment Assistance will end as we know it if this is signed into law by the president. Down payment assistance under the current guidlines allows the private sector to provide the solution. The Bill as proposed presents no government alternative or any alternative suggestion on how to keep the program intact.
The progression of home sales within the housing market is dependent on first time home buyers starting the domino affect. Their home purchases are the catalysts that allow people to sell their existing home and then move into a new property such as a larger home, condo or townhouse. In order to keep the housing market moving forward, we need to encourage home ownership at the beginning of the cycle. Mortgage programs that are underwritten with greater flexibility regarding credit, income and down payment will create more homeowners. We need mortgage loan programs that allow you to buy a home with as little money down as possible. This law will make buying a home more difficult with the elimination of a loan financing option.
As recently as March of 2008, there were conventional loans that allowed for 100% financing such as the Home Possible, My Community, and 80/20 combination first and second mortgage programs. Declining property values coupled with high mortgage delinquencies in all real estate markets have all but eliminated investors for these types of high LTV loans. In addition, due to large losses by private mortgage insurance companies (PMI) there is an unwillingness of mortgage insurers to insure these loans. Hence these loan programs have either been eliminated or now require a down payment. With Fannie Mae and Freddie Mac’s current financial problems and the overall state of the mortgage markets, don’t expect that they will be creating any new high loan to value zero down mortgage products anytime soon. The Housing Crisis will get worse-not better-by eliminating mortgage programs that work. We are bearing witness to that today.
Herein lies the problem. Most first time home buyers lack sufficient resources for the down payment and closing costs. They often have good credit and the ability to make a payment. Until they save enough money, they are left out the housing market. FHA loans currently allow buyers to obtain down payment assistance (DPA) from a relative or from a qualified down payment assistance provider. This means that buyers without enough current resources may be able to obtain enough funds to buy a home today. There are a number of approved down payment assistance providers-some of the largest names are Nehemiah, Genesis, and Ameridream. In a nutshell, these non-profit organizations issue down payment assistance to a prospective home buyer and then collect funds from the seller of a home who has agreed to participate in this program at the time of closing. The non-profit charities charge an administrative fee of between $300 and $500 to facilitate with the assistance of this funding. FHA sometimes refers to this arrangement as seller funded down payment-which they don’t allow. Although the funding is coming from a non-profit, the FHA perception is that it is actually from the seller, albeit indirectly. The problem stems from losses. According to FHA, they have experienced larger losses on portfolios of loans that were funded with DPA funds. Further studies are needed. HUD has provided statistics that are open to interpretation.
In fact, FHA hopes to eliminate these programs altogether through the fast tracked housing bill going through congress now. Time is of the essence as the Senate and House are fast-tracking this bill.! The senate version-which is the supported version-will eliminate DPA. What would this mean? Let me make this clear-if this bill passes fewer houses will be sold. More qualified homeowners will remain as renters. More homes will stay on the market and the real estate and mortgage crisis will get worse. DPA funding offers a solution to our crisis by making homeownership possible.
Mortgage foreclosures can be addressed with better underwriting rather than through legislation. If there are problems with the way things are being done within the current DPA program then let’s work on modifying them. Let’s identify solutions-such as raising the minimum required credit score on DPA funded loans. This would probably lower the defaults and match the underwriting to the risk. Elimination or outright banning of DPA programs that are currently helping our ailing housing market is foolish. As a Minnesota FHA mortgage broker who works in the market on a daily basis, I can tell you about clients who are good people who want to become homeowners. Their shot at owning a home depends on these programs. Get involved and learn more. The consequences of making the wrong decision about the fate of DPA’s will affect our entire economy.
Many mortgage brokers and banks are not offering FHA financing. Twin Cities mortgage broker Venture Development provides FHA mortgages and works with buyers that wish to utilize down payment assistance. We encourage all borrowers-not just first time buyers- to consider FHA financing and compare it to conventional or veteran financing options. The interpretations and opinions expressed herein are those of the Principals of MN mortgage broker Venture Development.
Real Estate Marketing Website YourKasa.com Now Offers Mortgages and Loans from 100 Lenders
July 22, 2008
Purchasing a House Has Never Been Easier with Helpful Home Buyer Packages.
Atlanta, GA (PRWEB) July 22, 2008 — YourKasa.com, an online real estate marketing company, is pleased to announce that it is now offering mortgages and loans from 100 lenders on its website. While many consumers may find a similar offering on other websites, the difference is clear with its home buyer packages that make purchasing a house a much simpler venture. First-time buyers will appreciate this innovative service that lets them research and choose the right mortgage lender for their individual needs. Consumers no longer need to wait anxiously for an answer - each company on the real estate marketing company’s extensive list of lenders does all the work and contacts a potential home buyer if a match is made.
“YourKasa is interested in opening up opportunities to everyone who is thinking about buying a home for the first, second, or even third time,” said Neil Terc, president of YourKasa. “We’ve created unique home buyer packages that assist individuals in the detailed process of purchasing a house or other type of real estate.”
YourKasa’s home buyer packages - mortgage and loans services included - provide the best terms and rates possible, and if needed, down payment (as low as 3%) and closing cost assistance programs. Trained specialists at YourKasa, who are experts in the real estate industry, will guide interested consumers through the process and are personally able to find out if they qualify in just minutes. A bad credit score does not necessarily exclude certain consumers from loans - an FHA mortgage can still help home buyers purchase property. 100% financing is offered in addition to rates as low as a 30-year fixed 5.80% loan. Other mortgage options include 203k loans for rehabbing a property and upfront monetary assistance. For more details on this unique real estate marketing service, please visit apply for a mortgage and loans through the website today.
About YourKasa.com
YourKasa.com is a feature-rich online real estate property listing service that connects home sellers with home buyers. Packed with resources and easily navigable, the site provides sellers with the ability to market their homes to a large, targeted audience and enables potential buyers to view thousands of real estate property listings online via detailed profiles, pictures, and maps. For more information, visit www.yourkasa.com.
How To Protect Yourself From Unscrupulous Mortgage Lenders
July 16, 2008
Joseph Gross, host of America’s #1 mortgage talk show “Your Home - Your Future”, will have as a guest NY State Assemblyman Darryl Towns. He will discuss the new law that NY State just passed to protect consumers from unscrupulous mortgage lenders.
Teaneck, NJ (PRWEB) July 16, 2008 — National Mortgage Expert, Joe Gross and host of America’s #1 Mortgage Talk Show, “Your Home - Your Future” on 1160 AM WVNJ, will be interviewing on Thursday, July 17, 2008 at 2:00 PM Assemblyman Darryl Towns who sponsored the recent New York Law to prevent New York residents from losing their homes to foreclosure. The radio show, “Your Home - Your Future”, is all about helping listeners get the tools and information they need to protect their home today and the future.
Joseph Gross - Radio Host of “Your Home - Your Future”
New York State Assemblyman Darryl Towns the Chair of the New York State Assembly Banking Committee will breakdown all the aspects and facts each consumer need to know of how to protect their most valuable asset, their home. He has worked very hard to get this Bill passed and now it’s up to each consumer to understand it and do what’s necessary to save their house from foreclosure. He will share the information what every consumer needs to know on “How To Protect Yourself From Unscrupulous Mortgage Lenders”.
“What we found were a large number of questionable lending practices such as interest-only mortgages made with little or no income verification. While these schemes have helped drive the home-ownership rate in the United States to a record 70 percent, they have also placed millions of Americans, particularly in low-income communities and communities of color, at risk for foreclosure,” Assemblyman Towns says.
New York has been suffering from a 25% increase in foreclosures and over 50,000 people will be foreclosed on this year. As a result, Assemblyman Towns took the initiative to bring forward this Bill so all New York citizens can, and will, be protected.
“It is very important in this Mortgage Market Collapse to provide consumers with all the information they need so they can make an informed decision,” says Joe Gross, host of “Your Home - Your Future”.
“This is a very important time for all people that own a home, or those that want to become homeowners, to do the proper research and get into a loan that will work for them today and the future. With the Mortgage Market Collapse lenders have been going out of business and constantly changing their guidelines so every consumer needs to be updated and kept informed as to what’s happening,” Gross says.
Joe just finished writing his book titled, “How the Greed of Wall Street, and your Mortgage Lender are destroying America’s Credit.” If you own a home, you must have this book. In the book he discloses the secrets every consumer must know to protect themselves. This book will be released very soon and will hopefully benefit all those that are suffering from this Mortgage Market Collapse and are in danger of losing their home.
Joe will offer on his radio show an opportunity for those that want to get the Book before its release, so tune in in Thursday, July 17 at 2:00 PM on WVNJ 1160 AM or at www.saveyournewyorkhome.com.
Joe is available for interviews and welcomes your mortgage-related questions. He can be reached at 800-653-2684 or at http://www.saveyournewyorkhome.com.
Media Contact:
Please contact Theresa Consoli with any questions or interview requests at 800-653-2684
Fax: 201-837-1128
theresa.consoli @ qualifiedmortgage.com
Qualified Mortgage Inc.
1086 Teaneck Road
Teaneck, NJ 07666
Indymac Issues Stakeholder Letter
July 7, 2008
PASADENA, Calif., Jul 07, 2008 (BUSINESS WIRE) — Indymac today issued the following letter to its stakeholders:
Dear Indymac Stakeholders:
In this very difficult and challenging environment, any of the actions that we take to keep Indymac safe and sound unfortunately have negative consequences to some important constituency. As we stated in our financial update on May 12, 2008, we have been working with our investment bankers to raise additional capital. To-date, we have not been successful with these efforts, and, while we will continue these efforts with our bankers and others, we don’t expect to be able to raise capital until there is more stability and less uncertainty in the housing and mortgage markets. While some shareholders may believe it is in their best interests that we not raise capital right now given the significant dilution that it would cause, there are consequences of not being able to raise more capital and, therefore, actions that we now must take.
Given the continued downward trend in home prices and a resulting increase in our forecasted credit losses and the related downward trend in the pricing of all mortgage related assets in the capital markets, especially mortgage-backed securities where we have experienced significant rating agency downgrades this quarter, we expect our loss for the second quarter to be larger than Q108, but it is difficult at this time to be more precise given the significant uncertainty surrounding accounting estimates, fair value accounting and other accounting matters.
In light of the current environment and related deterioration of our financial position since last quarter, we have been working closely with our federal banking regulators with respect to the actions that they and we must take to meet our mutual goal of keeping Indymac safe and sound through this crisis period. In that respect, based on information we have provided to our regulators, they have advised us that we are no longer “well capitalized”, which we stated on May 12 was a possible scenario. Our regulators have also asked us to submit to them a new business plan for their review and approval, something on which we have been working with them for some time. We have agreed on the basic elements of the plan, and the regulators have directed us to begin executing on it. An important element of our plan is to improve our capital ratios. Without an external capital raise, the traditional way to improve safety and soundness is to sell assets and shrink the balance sheet, which in normal times generally has the effect of improving capital ratios and bolstering liquidity. Yet in this environment, where either there are no bids for most of IMB’s mortgage loans and securities or the bid/ask spreads are abnormally wide, “fire-selling” assets would actually deplete capital further. As a result, the most realistic and cost-effective way to shrink both our balance sheet and our servicing rights asset (which, as discussed in previous communications, is up against the regulatory cap limit), is to curtail most new loan production.
In addition to needing to shrink our assets to improve our capital ratios, we also need to do so to ensure that we maintain prudent operating liquidity. A consequence of falling below well-capitalized is that we are no longer permitted to accept new brokered deposits or renew or roll over existing ones, unless we get a waiver from the FDIC. While we have submitted a waiver application, it is uncertain as to whether such a waiver will be granted.
As a result of the above, we have made the difficult decision, effective July 7, 2008, that we will no longer accept any new loan submissions or rate locks in our retail and wholesale forward mortgage lending channels, except for our servicing retention channel. We plan to honor all of our existing rate-locked loans and will continue to fund these loans in the coming weeks. While the managers and employees in these units have worked incredibly hard, these units are not currently profitable due to the continuing erosion of the housing and mortgage markets. At the same time, these operations take up significant balance sheet capacity and “feed” growth in the servicing asset, an asset we need to shrink given its size relative to our existing capital.
In closing our forward mortgage business, we will refocus our lending efforts on supporting and building within regulatory constraints Financial Freedom, our reverse mortgage unit (FHA production only), and on continuing the retention activities associated with our servicing portfolio. Combined, we currently expect these units to produce roughly $5 billion to $10 billion per year of new FHA/GSE loans. Thus, our core business model will include (1) Financial Freedom, one of the largest reverse mortgage lenders in the Country; (2) a top ten mortgage loan servicing operation, with a solid retention production unit; and (3) a Southern California retail bank branch network, including 33 branches and roughly $18 billion in deposits, of which over 96% is fully covered by FDIC insurance. In addition, when this housing and mortgage crisis abates and we return to health, we would also hope to be an investor in mortgage loans and mortgage-backed securities and might re-enter the national forward mortgage production business with a low-cost, non-commissioned-based business model.
Unfortunately, the above actions will necessitate the reduction in our present workforce from approximately 7,200 to roughly 3,400 or so over the next couple of months, which should reduce our operating expenses by roughly 60%. We will retain about 1,100 employees in loan servicing in Kalamazoo and Austin; 350 in our servicing retention group in Irvine and Kansas City; 800 at Financial Freedom, primarily in Irvine, Sacramento, and Atlanta; 400 in our Southern California retail and web bank; 500 in portfolio management and administration, largely in Pasadena; and 250 in discontinued businesses. In building Indymac up from 4 employees in 1993 to its present size, we have had to retrench and then rebuild several times over the past 15 years, but clearly these are the largest and most difficult staff reductions we have ever had to make. If we had another alternative, we clearly would have chosen it, as we understand how painful these workforce reductions can be for the affected employees and their families. Given Indymac’s current financial position and these significant layoffs, I strongly believe it is appropriate that I further materially reduce my own compensation. As a result, I have requested of Indymac’s Board of Directors that they reduce my base salary by 50%.
With respect to severance, our policy has always been that the fair and right thing to do is to provide our departing employees with a generous severance program to ease their transition to the next stage of their career. Our severance program, which provided one month of pay and one month of Indymac-paid COBRA insurance coverage for each year of service, was clearly the most generous in the mortgage industry, if not among most of the Fortune 500. I very much regret that the reality today, however, is that we can no longer afford this program given our need to preserve capital and return to profitability. Therefore, we will be providing employees with a minimum 30-day notice of the termination of their employment (effectively, 30 days severance), with employees covered under the Federal WARN Act and similar state statutes (”WARN”) receiving 60 days of advance notice prior to the effective date of the their termination. Affected employees with five or more years of service will receive a minimum $20,000 severance, including any compensation payments made during the notice period.
With all of the above said, in this environment plans can change often and quickly (e.g. ability to raise capital and/or liquidity, regulatory actions, etc.). All we can do is continue to work hard and do our very best to keep Indymac safe and sound, so that we can rebuild our workforce and shareholder value when the housing and mortgage markets stabilize. We will be providing more information on our plans and prospects when we release Q208 earnings.
Very truly yours,
Michael W. Perry
Chairman and Chief Executive Officer
About Indymac Bank
IndyMac Bancorp, Inc. (NYSE:IMB) (Indymac(R)) is the holding company for IndyMac Bank, F.S.B. (Indymac Bank(R)), the 7th largest savings and loan in the nation. Indymac Bank provides single-family home mortgage financing, FDIC-insured banking products and through its Financial Freedom subsidiary is one of the largest providers of reverse mortgage loans to seniors.
For more information about Indymac and its affiliates, or to subscribe to the company’s E-mail Alert feature for notification of company news and events, please visit http://about.indymacbank.com/investors. To visit Indymac’s corporate blog, please visit http://www.theimbreport.com.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this press release may be deemed to be forward-looking statements within the meaning of the federal securities laws. Examples include our forecasts relating to the second quarter 2008 losses and capital ratio declines, our expectations about the inability to raise capital in the near term, our ability to take the necessary actions with our regulators to keep Indymac safe and sound, our ability to honor and fund existing rate-locked loans, the expected long-term viability of our revised business model, our projections of a return to profitability and strong capital levels, and our ability to rebuild our workforce and shareholder value. Words such as “anticipate,” “believe,” “estimate,” “expect,” “project,” “plan,” “forecast,” “intend,” “goal,” “target,” and similar expressions, as well as future or conditional verbs, such as “will,” “would,” “should,” “could,” or “may,” identify forward-looking statements that are inherently subject to risks and uncertainties, many of which cannot be predicted or quantified. Actual results and the timing of certain events could differ materially from those projected in or contemplated by the forward-looking statements due to a number of factors, including: the effect of economic and market conditions including, but not limited to, recent disruptions in the housing and credit markets, including the level of housing prices, industry volumes and margins; the level and volatility of interest rates; Indymac’s ability to down-size its business and reduce costs expeditiously; Indymac’s hedging strategies, hedge effectiveness and overall asset and liability management; the accuracy of subjective estimates used in determining the fair value of financial assets of Indymac; the implementation of new accounting pronouncements and guidance; the various credit risks associated with our loans and other financial assets, including increased credit losses due to downward trends in the economy and the real estate market and increased delinquency rates of borrowers; the adequacy of credit reserves and the assumptions underlying them; the actions undertaken by both current and potential new competitors; the availability of funds from Indymac’s lenders (in particular, Federal Home Loan Bank and the Federal Reserve Bank), loan sales, securitizations, deposits and all other sources used to fund reverse mortgage loan originations and portfolio investments; and the execution of Indymac’s business and restructuring plans in a significant and turbulent market transition. Additional risk factors include the impact of disruptions triggered by natural disasters; pending or future legislation, regulations and regulatory action, or litigation, and factors described in the reports that Indymac files with the Securities and Exchange Commission, including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and its reports on Form 8-K. Indymac does not undertake to update or revise forward-looking statements to reflect the impact of circumstances for events that arise after the date the forward-looking statements are made.
SOURCE: IndyMac Bancorp, Inc.
Sun West Mortgage: Reverse Mortgages Help With Everyday Expenses
July 5, 2008
For Immediate Release
CERRITOS, Calif./EWORLDWIRE/July 3, 2008 — The rising costs of everyday items, such as gas and food, are creating financial hardship for many retired seniors. Meeting expenses such as mortgage payments, utility bills, and credit card bills can be difficult in a slowing economy, particularly for seniors. Many are seeking relief by opting for a reverse mortgage. A reverse mortgage may be the key to living comfortably in retirement, allowing seniors to pay for everyday expenses without worry.
According to a recent survey conducted by NRMLA/Hollister Reverse Mortgage Market Index, senior homeowners age 62 and older have an average home equity of about $230,000[1]. The average yearly income of a senior 65 and older is just $25,336[2]. A reverse mortgage allows seniors to access a significant portion of their wealth, by converting their home’s equity into cash to supplement their income. They can receive this cash without obligating themselves to a monthly mortgage payment. This loan is available to senior homeowners 62 and older who live in their home. A reverse mortgage is due only when borrowers no longer occupy the home, and they can never owe more than their home’s value.
Seniors everywhere are discovering that a reverse mortgage allows them to live without financial burden. “I encourage all of my friends to learn more about reverse mortgages,” says Barbara Gibson, a homeowner from California. When researching lenders, Gibson found Sun West’s customer service to be a significant factor in deciding who to partner with. “Sun West was so friendly, I decided that I should change over to them,” she says. Barbara used her reverse mortgage to pay off many of her bills, as well as to rid her life of monthly mortgage payments. “Overall, my reverse mortgage has had a very positive impact on my life.”
Reverse mortgages continue to show significant growth as seniors become better educated and attitudes change towards incorporating this loan in long-term financial planning.
Interested seniors should talk to an experienced lender to learn more about the federally insured reverse mortgage program. Sun West Mortgage has over 27 years of experience in the mortgage banking industry, with an ongoing commitment to educate and enrich the lives of seniors.
NOTE TO EDITORS: This is the seventh release in a series of articles on how Reverse Mortgages are improving seniors’ lives. To view past articles, go to http://www.swmc.com/swmc/press.htm.
Sun West Mortgage Company Inc. is a FHA, VA, Freddie Mac, Fannie Mae and Ginnie Mae approved full-service mortgage banker. It is an approved Ginnie Mae HMBS Issuer, Servicer and Master Servicer. Sun West has been serving its nationwide client base since 1980. Its diversified loan programs include FHA Reverse Mortgages, FHA Single Family and Multi Family, VA, Conventional and Home Equity mortgages. Sun West is one of the few direct lenders to provide in-house underwriting, funding, and servicing for reverse mortgage products. Based in California and doing business nationally, Sun West is dedicated to offering exceptional customer service coupled with integrity, reliability, strength and stability.
Learn more about:
. Sun West Mortgage at http://www.swmc.com
. ReverseSoft Online at http://www.reversesoftonline.com
. Reverse Mortgage Calculator at http://www.simpleHECMcalculator.com
[1] Hollister Group LLC - “Reverse Mortgage Market Currently at $4.3 Trillion, Less than 1% Penetrated”
[2] U.S. Census Bureau - “Income, Poverty, and Health Insurance Coverage in the United States: 2005″
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CONTACT:
Sydney Fernandez
Sun West Mortgage, Inc.
18308 Gridley Road
Cerritos, CA 90703
PHONE. (800) 453-7884
FAX. (562) 924-6057
EMAIL: sydney@swmc.com
