By now you have heard...January home sales were waaaayyyy down. By my calculations, sales in ALL sectors - homes, condos, beach, mainland, etc - were down 40%-50%.

What does this portend?? Well, that "V"-shaped recovery is an extended "U". I think is was a typical post-holiday lull complicated by record low temps (man, was it cold showing houses) coupled w/ a slowly declining market. I think we'll see more "normal" (a term I use very loosely) numbers in Feb and beyond.

The bugger in the covers are now the appraisals. Arms length sellers and buyers are watching their dreams evaporate thanks to new mortgage rules that require ZERO communication between sellers, buyers, realtors, mortgage brokers, etc. This rule would have been great 4-5 years ago but there are few who believe they can get away with mortgage fraud these days...which is what these rules aim to eliminate. Now, it's the regular joes like you and me who can't move on with their lives because some appraisers are UNWILLING to correctly value our homes.

I recently had a client with an existing VA loan receive a notice in the mail concerning refinancing their loans with a company called Mortgage Investors Corporation. The company claimed they could save them thousands of dollars with an easy re-finance – all they needed to do was listen to a 15 minute in-home presentation. Following a hard pitch session at the owners home that lasted 4-5 hours, my clients were asked (and consented) to give the MIC rep a "good faith deposit" of $1000. HUGE RED FLAG!

IF YOU RECEIVE ONE OF THESE NOTICES, PLEASE READ THE FINE PRINT AND DO YOUR OWN RESEARCH!

Initial investigation finds that homeowners will have their loan converted to a HYBRID loan, which has a fixed rate for approximately 38 months and then slowly rises over the next 5-7 years, with a cap of 8% (this was told to my clients). This is in addition to fees and other costs put on the back end of the loan.

I am not saying what MIC is doing is illegal or fraudulent. Basically, they are taking a loan guaranteed by the government (VA loan) and modifying the terms for the homeowner. It’s a win-win for MIC…should the owner default, the government will cover the loan. Should the seller not default, they will have had upfront savings but back-end costs and possibly an interest rate much higher than their original rate. There are risks with this hybrid loan and homeowners contemplating this refinance would be well-advised to work the numbers thoroughly.

My local Better Business Bureau (http://www.bbb.org/west-florida/business-reviews/mortgage-bankers/mortgage-investors-corporation-in-saint-petersburg-fl-52003613) has recorded 114 consumer complaints against MIC.

Please remember, nothing is free. If it sounds too good to be true, it probably is. CAVEAT EMPTOR!