Blue Crossed?

Late in 2008, Blue Cross of Michigan pushed a last ditch plan on lame duck legislators to raise rates on individuals. The plan failed, but Blue Cross is at it again. They've proposed a 56% rate increase on individuals, a plan they say is necessary due to an increase in individual policies as more people lose their jobs and their employer covered insurance. Because that's just what the unemployed residences of Michigan need, a significant increase in expenses and unreasonable health care costs. Didn't we just have a huge conversation about affordable health care during this latest election year? Way to kick people when they're down. The Blues indeed...

The Value Of A Thank You

Just loved this post from Tina Biggers
(re-posted with permission):

The value of a thank you card has more power than most will fully understand. People tend to keep them for the visual reminder of how you made them feel. It's not so much what you say, but the feelings that you invoke when they read it. In general, our society seems to be quickly moving away from the handwritten word.

Most people enjoy receiving the handwritten card, but few actually do it themselves for other people. Every time you make a personal connection, you are networking. When someone goes the extra mile for you, send him a card. But when you send that thank you card remember to never, ever include your business card! The thank you card should be all about your gratitude, and never about pushing your business on someone who has not asked for it. The minute you include your business card, it becomes all about YOU and not the other person.

When loan signings started to drop off, I started another business that helps people to target market. Become an Appreciation Specialist and watch your businesses grow.

President Obama Announces Mortgage Relief Plan

And it's a whopper. Another $75 billion in spending. Details are still coming out, but much of the plan seems to be focused on incentives for lenders to assist borrowers who are underwater (owe more than the home is worth) and on principal reduction options. With more than 25% of Americans currently owing more than their home is valued, a principal reduction plan is a key component of the bill. The plan is much more ambitious than expected, and hopes to keep between 7 to 9 million people from foreclosure.

Is The Fed Chairman Paying Attention Now?

Ben Bernanke's childhood home sold in foreclosure sale.

A Few More Positive Signs

Home sales rose 6.5% for December, the Pending Home Sales Index rose to 6.3% (signed contracts scheduled to close in 2 to 3 months) thanks to 13% gains in the Midwest and the South, and several major lenders have postponed any further foreclosure proceeding while the U.S. federal government works out a banking stabilization plan.

You've Got (Jingle) Mail

No, it's not a Christmas card. Robert Franco at Source of Title recently posted about jingle mail. I have to admit I'd never heard the term before. It was coined to describe homeowners who walk away from their homes and mail the key back to their mortgage company. With the feeling that they're out of options, many homeowners in financial despair who owe more than their property is worth are choosing to simply allow their lenders to foreclose on them. But that choice comes with repercussions. A foreclosure causes serious long term damage to credit scores, which can affect your ability to rent an apartment, purchase a vehicle, affect your insurance rates, hinder your ability to purchase another home in the future, etc. And what many don't realize is that lenders may still have legal recourse for pursuing the mortgage balance. You may not be walking away from a thing.

Moody's estimates that about 12 million Americans (about 1 in 5 mortgage holders) are currently upside down on their mortgage.

Objects Are Smaller Than They Appear

Driving through Ypsilanti last week, I couldn't resist snapping a picture of the world renowned water tower. If you can't tell what it's famous for, you're not paying attention.

The world's most phallic building.

Oh, You Said Bailout, Not Blowout

After collecting $25 billion in bailout money, Wells Fargo thought it would be hunky dory to have a 12 night Las Vegas shindig starting this weekend at the Wynn and Encore Hotels for its top employees (previous all-expense-paid trips included helicopter rides, wine tasting, horseback riding in Puerto Rico and a private Jimmy Buffett concert in the Bahamas for more than 1,000 of the company's top employees and guests). Shockingly, the news of plans to continue the merrymaking tradition didn't go over so well (whodathunkit?). Wells Fargo has suddenly (and wisely) decided to cancel its party plans.

Are Appraisers Being Fair?

I don't pretend to know the intricacies of being an appraiser, but I continue to hear unsettling stories from borrowers about their appraisals on a daily basis. Appraisers that use bankrupt homes as comparables instead of making an effort to find non-bankrupt homes a few streets down or appraisers that value a home and then automatically apply an artificial 20% cut to that value.

This week a borrower told me their home was appraised at 40% less than it was just 12 months ago. Another showed me the comparables that were used and it was clear from even a layman's eye that these homes weren't anywhere in the same ballpark. Still another showed me how an appraiser used three comparables that were all much smaller and much older, then instead of taking the average of the three they just took the lowest one. How can that be? What's worse, many borrowers have said that the mortgage companies have a take it or leave it policy. The appraiser's word is final and indisputable. Should one individual wield that much power in the process without any checks or balances? Two or three years ago, many appraisers were throwing out any figure the lender wanted, now they're cutting values like it's a half off sale at K-Mart. Why can't we settle on a reasonable middle ground?

While President Obama talks about lowering mortgage costs, I can't help but feel that he's completely missing the mark. The fees I've seen since the subprime crash have been reasonable. This is not a shot at appraisers. I understand some of the difficulties they face. I understand that foreclosed homes are sometimes all they have. But it's the diminishing appraisals that are making it so difficult for people to sell or refinance their homes. That's what needs to be addressed.