Last time I received one of these real estate notices in the mail, a group of others did, too. This was when there was a scam going on for a service to "negotiate" your property taxes down to current values for a small fee. This company ended up with a lawsuit filed.

Today I got a "Form 77748-I" Predatory Lending Notice with an 800# to call because they "have determined that your loan may have violations of Truth In Lending Act (TILA) and or the Real Estate Settlement Procedures Act (RESPA)."

Now I haven't called, and don't plan to, but I am pretty sure this is more of the same.

A loan officer directed me to this site years ago, as an easy way to eliminate annoying and unsolicited credit card offers and stabilize my credit score. Apparently these companies hit up your credit to "prequal" you for their unsolicited product. They don't count as a "hard" hit, but after 15 or 20 it will affect your score by a few points.

It's like the do not call registry and works for 5 years before renewal is required (if you do an online registration). For more info:

http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt063.shtm

And a link to the site:
https://www.optoutprescreen.com/?rf=t

Why is this important? Not only will it help your credit score stabilize, but if helps reduce the risk of credit/identity theft. How many of these offers do we throw in the garbage? It's definitely beneficial to eliminate a possible problem at the source.

New Freddie Mac policy will help real estate agents obtain "reasonable" compensation for short sales. Effective Aug. 1, 2009, Freddie Mac states:

Unless a real estate broker's sales commission exceeds 6% of the property sales price, Servicers must not,
as a condition of the Servicer's acceptance of an offer, renegotiate the real estate broker's sales
commission to an amount that is lower than the amount that was originally agreed upon between the
broker and the Borrower. In the event the sales commission exceeds 6%, the Servicer must renegotiate the
commission to limit it to 6% of the property sales price.

Click here to view news release in its entirety.

Prior, rarely did a lender allow more than 5% comission to be shared by cooperating brokers, but often any shortage not anticipated when the approval process began then fell to the agents to pay out of comissions. Basically, if your short sale took 6 months from submission of offer to close of escrow, and the seller accumulated expenses and debt against the property during that six months, any expenses not made aware to the bank at the start of that 6 months wouldn't be provided for or authorized by the bank. For example: On a $500K transaction, if the bank limited the commission to 2.5% maximum, this allowed a $12,500 maximum commission for the agents to share. Then, if the sale expenses/debt exceeded the authorized net by $5,000, either the transaction could not close or the agents sacrificed $5,000 of their commission.

There still may be deficit on short sales, but with the ability to obtain a minimum of 5 to 6% commission per transaction, it definitely helps agents successfully close transactions and remain in the black.

Are they really helping the buyers? July 30 new regulations are affecting buyers now…who went into contract thinking that a 17-day financing contingency would be plenty of time. Now there are hold periods in effect due to Reg Z, and lender has to review signed seller disclosures before the loan process can move forward, including ordering the appraisal. That's the summary. So one week into the contract, the lender may not yet be able to order the appraisal due to the disclosure review period.

What if the appraiser brings the file in under sale price? There's an appeal board. How does this affect the buyer? Say the appraisal comes in $35K under the sale price due to an appraiser unfamiliar with the area…..or comps that are all trashed REOs…..real estate agents and loan officers can't go to bat for their clients and provide supporting data to help the appraiser.

So the laws to help "guide" the loan process keep the honest people honest, but it seems like they're going to put unnecessary burden on buyers and sellers alike. Thirty-day escrows may be a thing of the past.

Click here for some details about July 30 regs.

It appears lenders are implementing a new policy that will affect "flipped" homes. While there is money to be made fixing up REOs and reselling them, there may be less money made if you can't sell them immediately. Why? The income of house flipping is typically based on speed. The faster you can flip it and unload it, the more you profit.

So enter the latest fly in the ointment: lenders are beginning to refuse to loan on a property that hasn't been off the market for six months.

As it is, most REOs aren't in the best condition, so often the purchase is made with cash. And now that the house is rehabbed and will qualify for a loan…..well….HUMMM.

Buyers, do some research on your prospective purchase first and check with your lender on their policies!