What is a Certified Distressed Property Expert

Written by Noel Padilla

http://activerain.com/np1000

Before we can define what a Certified Distressed Property Expert is, we need to define what a distressed property is. A property can become distressed for a variety of reasons but the most common is a foreclosure. Any situation that has caused a property owner to have difficulty making mortgage payments or even selling the property is said to be in a distressed state. Basically any property which has foreclosure looming.

Now that we have defined a distressed property, what is a Certified Distressed Property Expert (CDPE)? This is not only a designation earned by a licensed Realtor but it is also an acronym that signals to the public that the person displaying it has gone through extensive training to successfully mitigate a foreclosure. This can be done by negotiating mortgage terms, helping to negotiate a refinance or the most likely-help sell the property.

Sometimes these properties have lost significant value either by physical damage, changes in the zoning, lack of curb appeal or host of other factors one of which occurring today is market conditions. If the value of the property drops below what one could sell the property for then the property is said to be short and any sale would be considered a “Short Sale“, which has become very common lately. Negotiating a short sale is where a CDPE really shines.

These transactions are extensively time consuming and tedious. They require diligent follow-up, tons of paperwork and detailed analysis. Not to mention all the work that goes into drafting market reports and gathering all the information to convince the bank to accept a sales amount that will net them less. Not an easy task. Some of these sales can take anywhere from 3 to 12 months to close, depending on the complexity of the transaction.

All this is done in addition to the normal marketing efforts required to sell the property. You can see why less than 1% of Realtors nationwide have the training and knowledge to successfully negotiate a short sale. I am one of those in the less than 1% that has dedicated my time, effort and finances to educate myself in this sector of the market.

In March of 2008 50% of all homes sold were in some sort of distressed state…….Half! If you have a distressed property you can’t chance your home sale on someone who doesn’t have the tools to get things done. This market is going to be here for sometime. Experts predict 2 to 3 years, I predict closer to 10 years which began in 2006 so we are 2 years in to the 10 year cycle.

Buyers are not immune to the phenomenon. They are getting great deals on these distressed properties but guess what, if they are dealing with someone who doesn’t know the mechanics of a short sale, the deal will fall apart after waiting months. It is equally important to buyers and sellers of distressed property to use a person who can get these transactions to the closing table.

Thank you Noel Padilla for allowing me to post this on my webpage.

July 28, 2009

WASHINGTON – As part of an ongoing effort to expand relief to struggling homeowners, Treasury released today the Supplemental Directive for its Home Price Decline Protection (HPDP) program, a component of the Home Affordable Modification Program (HAMP).  HPDP provides additional incentive payments for modifications on properties located in areas where home prices have recently declined.  The purpose of the program is to encourage additional lender participation and HAMP modifications in areas with recent price declines by helping to offset any incremental collateral loss on modifications that do not succeed.  HPDP will help ensure that borrowers in areas with recent home price declines have the opportunity to stay in their homes, thereby minimizing foreclosures, which further depress home values.

“This is an important next step in our multi-faceted efforts to bring relief to struggling homeowners and stabilize the housing market,” said Assistant Secretary for Financial Institutions Michael Barr. “Home price decline protection can help homeowners who may not have been reached otherwise.”

All HAMP loan modifications begun after September 1st, 2009 are eligible for HPDP payments. 

HAMP offers incentives to investors/lenders, servicers, and homeowners for successful mortgage modifications.  The “pay-for-success” structure of HAMP provides incentives to create sustainable mortgage modifications in a manner most cost effective for taxpayers. 

Treasury has allocated a total of up to $10 billion for the HPDP program, but the actual amount spent will depend on the home price trends.  The funds available to individual servicers to pay HPDP and all other incentives on HAMP modifications will be capped according to the Program Participation Cap included in their Servicer Participation Agreement.  Treasury will establish each servicer’s initial cap by estimating the number of modifications that servicer is expected to perform during the term of HAMP. 

The Home Affordable Modification Program (HAMP) commits $75 billion dollars, including $50 billion of funds from the Troubled Asset Relief Program, to encourage loan modifications that will provide sustainably affordable mortgage payments for borrowers.

HAMP is one component of Making Home Affordable, the Administration’s comprehensive plan to stabilize the US housing market and offer assistance to millions of homeowners by reducing mortgage payments and preventing avoidable foreclosures.  Making Home affordable includes: (1) the $75 billion HAMP program, (2) the Home Affordable Refinancing Program providing increased refinancing opportunities for borrowers with high loan-to-value ratios and (3) a $200 billion commitment to increase confidence in the GSEs and support increased refinancing generally.

The original press release can be found here: http://www.makinghomeaffordable.gov/pr_07312009.html

Service Performance Report through July 2009 for the Making Home Affordable Program

Making Home Affordable Program on Pace to Offer Help to Millions of Homeowners

Public Release of Data Provides Transparency on Servicer Performance

WASHINGTON – Today, the Obama Administration released its first monthly Servicer Performance Report detailing the progress to date of the Making Home Affordable (MHA) loan modification program.  The purpose of the report is to document the number of struggling homeowners already helped under the program, provide information on servicer performance and expand transparency around the initiative.

On February 18, the Obama Administration announced its comprehensive plan to stabilize the U.S. housing market.  Two weeks later on March 4, the Administration published detailed program guidelines and authorized servicers to begin modifications immediately.  MHA provides $75 billion for sustainable mortgage modifications through the Home Affordable Modification Program (HAMP). 

MHA has made rapid progress in a few short months.  Servicers covering more than 85 percent of loans in the country are already modifying loans under the program. More than 400,000 modification offers have been extended and more than 230,000 trial modifications have begun.  This pace of modifications puts the program on track to offer assistance to up to 3 to 4 million homeowners over the next three years, our target on February 18.  

Today’s report discloses performance on a servicer-by-servicer basis in order to increase transparency for participating institutions.  The data show that servicer performance has been uneven.  The Administration has asked servicers to ramp up implementation to a cumulative 500,000 trial modifications started by November 1, 2009. This would more than double in three months the number of trial modifications started in the first five months of the program.    

The Administration is taking additional steps to improve performance.  On July 9, Treasury Secretary Tim Geithner and Housing and Urban Development Secretary Shaun Donovan wrote the CEOs of participating servicers calling upon them to redouble their efforts to increase staffing, improve borrower response times and streamline the application process.  Senior Administration officials discussed the importance of these steps in a face-to-face meeting with servicer executives on July 28.  The Administration will develop more exacting metrics to measure the quality of borrower experience, such as average borrower wait time for inbound inquiries, completeness and accuracy of information provided applicants, and response time for completed applications.  As an additional protection for borrowers, the Administration has asked the program compliance agent, Freddie Mac, to develop a “second look” process to audit MHA modification applications that have been declined on an ongoing basis.

1.      Program On Pace to Help up to 3-4 Million Homeowners Over the Next Three Years

• More Than 230,000 Trial Modifications Started

No program has previously attempted to modify so many mortgages at such affordable terms for borrowers.  The Administration is seeing real results – modifications that provide long-term solutions for borrowers.

o    In 2008, 42 percent of modifications by the largest servicers lowered monthly payments.  Under the MHA modification program, 100 percent of borrowers starting trial modifications have had their payments reduced.

• More Than 85 Percent of Mortgage Market Covered by Participating Servicers

o Thirty-eight servicers have signed Servicer Participation Agreements (SPAs) to participate in the program.  These 38 servicers service many types of loans, including Fannie Mae and Freddie Mac loans, private label loans and loans in portfolio.

o Approximately 2300 servicers that service Fannie Mae and Freddie Mac loans are automatically participating in HAMP. 

2.      Performance Metrics Aimed at Improving Consistency of Servicer Performance

• Description of Metrics Used to Measure Servicer Performance

The Administration has established a servicer-by-servicer performance metric to enhance overall program performance.

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    • The report includes the absolute number of trial modifications begun by each servicer. 
    • The report also includes a simple performance metric which measures each servicer’s performance relative to an estimate of the servicer’s HAMP eligible loans.
      • The performance metric used in the report is trial modification starts as a share of estimated HAMP eligible loans. 
      • Many loans are eligible for HAMP that are not included in the estimated HAMP eligible loans in the public report, including current borrowers in imminent default.
      • This measure of estimated HAMP eligible loans was developed solely to provide a common denominator across which to compare performance of servicers. 

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  • Servicer Performance Metrics Show Uneven Progress in Implementation

The metric measuring comparative servicer performance shows uneven ramp-up, and substantial variation in the pace of modifications.  To improve performance, the Administration has asked servicers to commit to starting 500,000 trial modifications by November 1, 2009 and to establishing exacting metrics to monitor servicer specific program performance.

3.      Public Report Increases HAMP Program Transparency

Today’s report will provide transparency into program results on a servicer specific basis. 

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  • Reports Will Be Issued on a Monthly Basis

The Administration expects to issue reports detailing the progress of modifications under the HAMP program each month. This report will be updated to include additional metrics and results as the program progresses and more data becomes available.

The Servicer Performance Report is available here: http://www.treas.gov/press/releases/docs/MHA_public_report.pdf

The Original Press Release can be found here: http://www.treas.gov/press/releases/tg252.htm

Written By: Kristin Duff

A Certified Distressed Property Expert® (CDPE) is a real estate professional with specific understanding of the complex issues confronting the real estate industry. Through comprehensive training and experience, CDPEs are able to provide solutions for homeowners facing hardships in today’s market.

The prospect of foreclosure can be financially and emotionally devastating, and often homeowners proceed without guidance of any kind. The developers of the CDPE Designation believe that in almost all cases, the best course of action for a homeowner in distress is to speak with a well-informed, licensed real estate professional. They have the tools needed to help homeowners find the best solution for their situation.

While enduring financial difficulties is challenging for any family, the process of finding a qualified real estate professional should not be. Selecting an agent with the CDPE Designation ensures you are dealing with a professional trained to address your specific needs. For more information, contact a CDPE in your area.

CDPEs don’t merely assist in selling properties, they serve and help save their clients in need.                     

http://www.cdpe.com/what-is-a-cdpe.html

The Fine Line between Good Negotiating and Bluffing

Written By: Kristin Duff

In the past, claiming to have multiple offers on a property was a realistic claim in the real estate market, but after the market crashed, this was a sad dream of what used to be. As the market starts picking back up, however, it is becoming more prevalent again. Now, the problem with this is that some realtors are using this fact to their bargaining advantage, bluffing to try to get more from the buyer. Unfortunately, this tactic sometimes drives prospective buyers away leaving the house vacant longer with the seller accruing more debt, or it prevents the seller from moving on to their new home. Another “game” currently being played in the real estate market is the game of submitting offers that don’t go through. This damages both the buyer and the seller. First of all, submitting offers that the buyer isn’t committed to takes the house off the active market for others to buy. Now, having multiple offers on a property is probable if the house is priced well and in good condition, but once an offer is accepted, all other offers go into standby mode and the house is basically taken off the market until the offer fails. Some agents are known for telling their buyers it’s ok to write up an offer if you aren’t really sure you want the house.the problem in this is that most other realtors don’t like to work with them because they have “earned” their bad reputation.  The only way to prevent this is to research well before you commit yourself to a realtor. If your realtor has been in the “game” for a substantial period of time, then he/she should have plenty of knowledge as far as how each other “player” plays the game. Not to mention the fact that most experienced realtors have numerous contacts and one of them has most likely worked with any prospective realtor in the area. Weather your realtor is accepting offers on your behalf as a seller or negotiating your offer as a buyer, you are placing your trust 100% in your realtor to do what’s best for you.  If you do not have a good standing relationship with your realtor with a good open dialogue can you really be sure that they aren’t “gambling away” your money?

Article written by Kristin Duff

Financially challenged property owners have become a huge target for scam artists and loan modifications can be especially risky. If your Realtor doesn’t have the proper training to assist you, you may find that, in some cases, the advice given isn’t up to par. It is legal for a Realtor to give you advice about loan modification, Short Sales, and Foreclosure, but as the number of people seeking this advice grows, the active number of real estate agents able and willing to give this advice becomes sparring. Loan Modification Assistance is a very risky business for any licensed real estate agent or broker, simply because it has not been a part of the realtors job description until now, and even now it only applies to those certified to take on the responsibility. Most agents and brokers are not trained or skilled in loan modification and giving advice on the topic may violate the scope of their license. The structure of a loan and the servicing required to complete a loan modification is very detailed and has to be very precise. Before the Real Estate Market crashed due to the economic crisis in our country, in order to seek advice about loan modification, one would have to speak directly to a loan officer. With so many people losing their homes, most realtors have had to pick up at least a few hardship cases. The opportunities for these people to keep their homes or at least reduce their home debts have multiplied. Given that fact, some agents have become comfortable giving loan modification advice. Without the proper training on this avenue, this can be a very dangerous situation for the homeowner. A vast majority of agents have to send a prospective home buyer to a loan officer for a simple price range pre-qualification. The scary thing is that some of those same agents have become omfortable with giving homeowners in mortgage distress loan modification advice. In the Realtors Code of Ethics it specifically states that “REALTORS^® shall not undertake to provide specialized professional services concerning a type of property or service that is outside their field of competence.” Given this factor, make sure that the person you seek advice from on loan modification is certified to give this advice. A Certified Distressed Property Expert is guaranteed to know more about the subject than an average real estate agent.

If you have any questions or concerns regarding your ability to keep your house during this economic crisis, please feel free to contact Pearl Ahlquist at (916) 708-3851. She is a Certified Distressed Property Expert.

In our continuing efforts to keep you up-to-date on the latest developments on the Stimulus Package and how it will affect homeowners, we are now providing you the highlights of the latest guidelines on loan modifications.  There are actually more details than we are providing in this edition of “Success Tips” but these provide the basic components to help determine if a distressed homeowner is eligible.  This is a Governmental trial program and will be reevaluated in 90 days. 

The trial loan modifications consistent with these guidelines may be offered to homeowners as of March 4, 2009 and may be considered for acceptance into the Home Affordable Modification Program with other conditions upon completion of the trial period.  These guidelines, however, do not constitute a contract offer binding on the Department of the Treasury.

PROGRAM ELEMENTS DESCRIBED IN GUIDELINES:

Monthly Payment Reduction Cost Share:  The Treasury will partner with the financial institutions to reduce the homeowners’ monthly mortgage payments.  The lender will have to first reduce payments on mortgages to no greater than a 38%.

Front-End Debt-to-Income (DTI) ratio.  The Treasury will match further reductions in monthly payments dollar-for-dollar with the lender/investor, down to a 31% Front-End DTI ratio for the borrower.

Servicer Incentive and Pay for Success Fees:  Servicers will receive an up-front Servicer Incentive Payment of $1,000 for each eligible modification meeting guidelines established under this initiative. Servicers will also receive Pay for Success Payments for as long as the borrower stays in the program, with further incentives up to $1,000 each year for up to three years.  Similar incentives will be paid for Hope for Homeowner refinances which should motivate lenders who have been reluctant to participate in this program before now.

Borrower Pay-for-Performance Success Payments: Borrowers are eligible to receive a Pay-for-Performance Success Payment that goes straight towards reducing the principal balance on the mortgage loan as long as the borrower is current on his or her monthly payments.  Borrowers can receive up to $1,000 for Pay-for-Performance Success Payments each year for up to five years.

Current Borrower One-Time Bonus Incentive: One-time bonus incentive payments of $1,500 to lender/investors and $500 to servicers will be provided for modifications made while a borrower is still current on mortgage payments.  The servicer will be required to maintain records and documentation evidencing that the Trial Period payment arrangements were agreed to while the borrower was less than 30 days delinquent.  The servicer must comply with any express pooling and servicing contractual restrictions for modifying current loans.

Program Payment Conditions:  No payments under the program to the lender/investor, servicer, or borrower will be made unless and until the servicer has entered into the program agreements with the Treasury’s financial agent.  Servicers must enter into the program agreements with the Treasury’s financial agent no later than December 31, 2009.

ELIGIBILITY REQUIREMENTS:

Pooling and Servicing Agreements: The program guidelines reflect usual and customary industry standards for mortgage loan modifications contained in typical servicing agreements, including pooling and servicing agreements (PSA’s) governing private label securitizations.  Participating servicers are required to consider all eligible loans under the program guidelines unless prohibited by the rules of the applicable PSA and/or other investor servicing agreements.  Particular servicers are required to use reasonable efforts to remove any prohibitions and obtain waivers or approvals from all necessary parties.

Origination Date of Loan Subject to Modification:  The mortgage to be modified must have been originated on or before January 1, 2009.

Program Expiration:  New borrowers will be accepted until December 31, 2012.  Program payments will be made for up to five years after the date of entry into a Home Affordable Modification.  Monitoring will continue through the life of the program.

Qualification Terms:

• The home must be owner-occupied, single family 1-4 unit property including condominium, cooperative and manufactured home affixed to a foundation and treated as real property under state law.
• The home must be a PRIMARY RESIDENCE verified with tax returns, credit reports, and other documentation such as a utility bill.
• The property may NOT be investor-owned.
• The home may not be vacant or condemned.
• Borrowers in bankruptcy are not automatically eliminated from consideration for a modification.
• Borrowers in active litigation regarding the mortgage loan can qualify for a modification without waiving their legal rights.
• First lien loans must have an unpaid principal balance (prior to capitalization of arrearages) equal to or less than $729,750 for one unit, $934,200 for two units, $1,129,250 for three units and $1,403,400 for four units.

In Foreclosure Process:  Any foreclosure action will be temporarily suspended during the trial period, or while the borrowers are considered for alternative foreclosure prevention options.  In the event that the Home Affordable Modification or alternative foreclosure prevention options fail, the foreclosure may be resumed.

Current Loan-to-Value (LTV) Ratio:  There is no maximum or minimum LTV ratio for eligibility purposes.

Loan Type Exclusions: Loans can only be modified under the Home Affordable Modification program once and only once.

Subordinate Financing: Subordinate liens are not included in the Front-End DTI calculation, but they are included in the back-end DTI Calculation.

Solicitation to Borrowers/Incoming Inquiries: Service Providers should follow any existing express contractual restrictions with respect to solicitation of borrowers for modifications.

UNDERWRITING ANALYSIS:

Front-End DTI Target: Front-End DTI is the ratio of PITIA to Monthly Gross Income.  PITIA is defined as principal, interest, taxes, insurance (including homeowners insurance and flood & hazard insurance) and Homeowner Association Fees.  Any monthly mortgage insurance premiums are excluded from the PITIA calculation.  The Front-End DTI target is 31%.  The Standard Waterfall step that results in a Front-End closest to 31% without going below 31% will satisfy the Front-End DTI target.  There is no restriction on reducing Front-End DTI below 31%, however any portion of the reduction below 31% will not be covered by the Payment Reduction Cost Share.

Property Value: The service provider may use, at its discretion, either one of the government sponsored enterprises (GSE’s) automated valuation model (AVM) provided that the AVM renders a reliable confidence score or a Broker Price Opinion (BPO).  The consensus is that in most cases the servicers will be utilizing BPO’s most often.  With whatever pricing model that the servicer uses in the modification, the valuation may not be more than 60 days old.

Income and Asset Validation:  The borrower’s income will be verified by requiring a signed Form 4506-T (Request for Transcript of Tax Return) and obtaining the most recent tax return on file for each borrower on the note.  For wage earners, the two most recent pay stubs for each wage earner on the note will also be required.  For self-employed borrowers or for non-wage income, the borrower’s income will be verified by obtaining other third-party documents that provide reasonably reliable evidence of income.  Borrowers must also represent and warrant that they do not have sufficient liquid assets to make their monthly mortgage payments.  The Hardship (SAD) letter will be very important here.

Monthly Gross Income:  The borrower’s Monthly Gross Income is the amount before any payroll deductions includes wages and salaries, overtime pay, commissions, fees, tips, bonuses, housing allowances, other compensation for personal services, Social Security payments, including Social Security received by adults on behalf of minors or by minors intended for their own support, annuities, insurance policies, retirement funds, pensions, disability or death benefits, unemployment benefits, rental income and other income.  Monthly net income can be used for preliminary screening and qualification.  If used, the servicer will need to multiply net income by 1.25 to get an estimate of the Monthly Gross Income.

Back-End DTI:  The Back-End DTI is the ratio of the borrower’s total monthly debt payments (such as Front-End PITIA, any mortgage insurance premiums, payments on all installment debts, monthly payments on subordinate liens on the property, spousal/child-support payments, car lease payments, aggregate negative net rental income from all investment properties owned, and monthly mortgage payments for second homes) to the borrower’s Monthly Gross Income.  The servicer must validate monthly installment, revolving debt and secondary mortgage debt by pulling a credit report for each borrower or a joint report for a married couple.  The servicer must also consider information obtained from the borrower orally or in writing concerning incremental monthly obligations.

Borrowers who otherwise qualify for a modification under this program, but who would have a post-modification Back-End DTI greater than or equal to 55%, will be provided with a letter stating that they are required to work with a HUD-approved counselor and the modification will not take effect until they provide a signed statement indicating that they will obtain counseling.

Reasonably Foreseeable/Imminent Default: Every potentially eligible borrower who calls or writes to their service provider in reference to a modification must be screened for hardship.  This screen must ascertain whether the borrower has had a change in circumstances that causes financial hardship, or is facing a recent or imminent increase in the payment that is likely to create a financial hardship (Payment Shock).  If the borrower reports a material change in circumstances, the sevicer must ask about current income and assets, and current expenses as well as the specific circumstances relating to the claimed financial hardship.  Each of these elements must be verified through documentation.  Again the Hardship (Sad) Letter will be very critical in this process.

If the servicer determines that a non-defaulted borrower facing a financial hardship is in Imminent Default and will be unable to make his or her mortgage payments in the immediate future, the servicer must apply the NPV Test (Net Present Value).

A standard NPV Test will be required on each loan that is in Imminent Default or is at least 60 days delinquent under the MBA (Mortgage Bankers Association) delinquency calculation.  This NPV Test will compare the net present value (NPV) of the cash flows expected from the modification to the net present value of the cash flows expected in the absence of modification.  If the NPV of the modification scenario is greater, the NPV result is deemed positive.  If the NPV Test result is negative and Home Affordable Modification is not pursued, the lender/investor must seek other foreclosure prevention alternatives, including alternative modification programs, deed-in-lieu of sales and short sales programs.

COMMENTS & CONCLUSIONS:

There is much more information available on this program which you can find by going on www.hud.gov.  What you can conclude is that this program has placed a much greater emphasis on such instruments as a Broker Price Opinion and the Hardship (SAD) Letter.  This has also placed a greater emphasis on your role as a Consultant to your client. 

Good Luck & please let us know how we can help you.

In the last five years the borrowers have been falling behind in their mortgage payments and this has been the highest climb in the 4 to 6 years the number of approved “Short Sales” has climed 130 from 40 a little more than a year ago, according to the multiple-listing service.

In this process their is no equity in the home and the lender pays for all the fees involved including the Realtors , back taxes and some leins on the property. In some cases the lenders will forgive the entire second and almost half of the first.

When mortgage deliquencies were low the banks were not very respondant to Short Sales but as we see more and more banks closing their doors almost on a weekly basis they have no choice but to look at them.

For more information about this or any of my blogs please contact me at

Pearl Ahlquist the “Realty Doctor”

916-708-3851

Hi Pearl,

First of all, I’d like to THANK you for helping Danny and I all throughout our Short Sale transaction.

You are indeed the Realty Doctor!

I’m so relieved that I don’t have to worry about foreclosure no more. I may not have been in direct contact with you most of the time, (thanks to Danny!) so I’d like to take this opportunity and let you know how much I value and appreciate your consistent motivation, timeless efforts, positivity and strong drive not only to market our property but to help us stay involved and worry free…

You are awesome and I want to be like you when I grow up
Sincerely, Claire K.

It seems to me that every time I turn on my radio or TV, now that the New Year has arrived, there are tons of advertisements for debt consolidation loans out there. You can combine your mortgage and all your credit cards for one low fee and one lower payment! Let me give you a word of advice�� Be careful!

Here are a few things to keep in mind when you are considering a consolidation loan.

• Is the interest rate that much better? Take a look at the interest rates and compare carefully. If you roll everything up onto one loan, you are going to take longer to pay the entire loan off versus paying them off separately.
• Do you have enough equity in your home? Make sure you have enough equity in your home to apply for a combo loan. The last thing you want is to get tied to a loan that eats up your equity and then not be able to have room for emergencies.
• Can you make the payments on time? Dont be late on your mortgage payments. This can, in some instances, cause you to default on your mortgage and your lender can sue you for bankruptcy. You dont want that.
• Will you be there long enough o justify the loan? Dont get tied up in a longer payment process if you are planning to sell your property in 3 years or less. You wont bet your investment back and you will owe more than you do now. Better to take a credit card payment with you and make more on your home than to take a hit when you sell your home.
• Can you make a bigger payment on your principle with a combo loan than if you kept them separate? If you can, then go for it! Getting ahead is the name of the game.

I just want you to be smart when you refinance your home. Getting several loans rolled into your mortgage is one of the fastest ways to get yourself into trouble. Most people just think that deducting interest on their taxes is the best way to go. In many ways, it is. But putting your ability to keep your home in jeopardy is never smart. That is how you get into a foreclosure situation to begin with. I would rather be selling resale homes with no pre-foreclosures involved than to see more people fall into the foreclosure trap in the first place.

So be smart with the biggest investment you have and enjoy a stress free New Year.