A lot of interest has been bubbling up about the $750 billion dollars that the Obama Administration has earmarked for loan modifications for borrowers who are under water on their home values. And, lots of homeowners around Atlanta are underwater, so it affects a lot of us.

The way it works is that it is a true loan modification, not a refinance.  And those eligible are those who are current on their mortgages, but owe more of the home than the home is worth, AND the mortgage is owned by either Fannie Mae or Freddie Mac.

That’s where most people stop.  ”How do I know if my mortgage is owned by Fannie or Freddie?”  Well, now it has been made simple.  You can look it up online or by a simple phone call.

Fannie Mae has set up this website to check if your mortgage is owned by Fannie.

And, to check with Freddie Mac, just call 1-800-Freddie, and press option 5, then option 4.  Then ask.

If the answer is positive, then you can contact your current servicer to ask them to begin the process of modifying your mortgage.

Good luck!

Housing starts, or the number of new residential properties that began construction, jumped 22.2% last month.  That is a big jump, especially in the midst of a housing crisis.  

So, could this spell the bottom of the housing crisis?  Well, it probably points to something close to a bottom.  However, the majority of the gain, 82.3% in fact, came in multi-family housing starts, not is single family construction.

It is still good, but indicates a rise in demand for rental properties as opposed to a rise in the demand for homes to purchase.  

So, good news comes where it will.  And we will take this bit of news as good for buyers around Atlanta and around the country, as the bottom of the housing market is in sight.

A lot of people used to use their homes as ATM machines, cashing out every so often to consolidate the debt that they used to finance their lifestyles – which demanded more money than their incomes provided. 

Those days, thankfully, are over.  Yet, I am meeting a lot of people around Atlanta who, for whatever reason, have credit card and other debt that is holding them back from getting ahead.  They want to move forward and start saving, but the minimum payments due are not allowing them.  So, they look to consolidate that consumer debt into a new, low interest mortgage to help the household cash-flow.

Deadline: March 31

Conforming loans have been more and more difficult to do high Loan-to-Value debt consolidation loans.  First, because the days of adding a Home Equity Line of Credit (HELOC) were over.  Then, because Fannie Mae and Freddie Mac cut back debt consolidation mortgage loans to 85% of the appraised value of the property.  Then, because Mortgage Insurance Companies (read: PMI) refused to insure those loans in markets they considered “declining markets”.

So, for the average homeowner around Atlanta, the only option for a debt consolidation refinance was and FHA Mortgage Loan.  FHA would go to 95% of the appraised value of the home in a cash-out refinance.  But even FHA got tougher.  If you were to exceed 85% of your property’s value, then you would now need two appraisals.

And now, things are getting even more difficult.  For mortgage applications taken on or after April 1, 2009, the max cash-out refinance for even FHA mortgages will be limited to 85% of the home’s value – and then only if you have owned the home for 12+ months.

So, if you have been considering a cash-out refinance, and you will need a high loan-to-value, act this week to make sure that we can do it for you.  Call me if you have been considering an FHA debt consolidation refinance, and your home is in Georgia.

Jamie Dimon, the CEO of J.P. Morgan Chase, gave a talk to the US Chamber of Commerce meeting today.  And, what a breath of fresh air!  I have not heard the whole speech, so I cannot comment on it globally.  But, he was an avid proponent of a change in the “Mark-to-Market” accounting rule, something instituted by Congress after the Enron scandal, but that has proved far, far over-reaching.

And, the mark-to-market comment was covered here by CNBC. And here is an excerpt from that article:

Dimon, speaking at a U.S. Chamber of Commerce economic conference, also supports mark-to-market accounting, but banks may have applied the fair value rule “to a ridiculous point.”

The mark-to-market accounting rule, which requires assets to be valued at market prices, is defended by investor advocates and some lawmakers as giving a clear picture of the assets held on banks’ books. But the banking industry, which has been forced to write down billions of dollars’ worth of hard-to-value assets in illiquid markets, has pleaded for a suspension or modification of the rule.

For a long time, I have advocated a change, not an abolishment, of the mark-to-market rule.  In valuing financial instruments, they should be valued on cash performance, not on comperable sales.  I have a short video on that concept here.

Watch that video, entitled “Refinance Now”.  The SEC met in January to explore changing or doing away with ‘mark-to-market’, and did nothing.  But the video explains what will happen if, indeed, there is a significant change to the flawed accounting rule.  And, a wave is growing that suggests there will be that change, and quite soon.

Be ready.  If you are up for a refinance, lock today.  If you are not in the stock market, be ready, because when (if) the ‘mark-to-market’ rule is changed, we could well see a 1000 point bounce that day.  You will want to be ‘in’ at that point.

Could it be a simple as a mathematical formula that expresses only optimism?  This article from Wired Magazine explains rise and fall of the CDO and CDS markets, and the ensuing pain for all Western economies, possibly better than I have read before.

We’ve all heard that Credit Default Swaps (CDS) were at the root of the problem.  But when the one offering the explanation begins to define CDS and the WHY of the problem, our eyes glaze over and we begin drifting off, wondering who will be voted off American Idol this week.

This is a bit technical, but this article by Felix Salmon is well thought-out to be a good, palitable explanation.