This, as the expression goes, should be interesting.

Teutul is likely to be a strong competitor because — whether a fan or not — he’s an actual, real-life entrepreneur, someone who started with nothing and went on to create several working businesses as well as a TV franchise. His American Chopper series on Discovery has been a major cable TV hit and ended the season strongly with a three-way bike build-off between Jesse James, son Paul Jr. and himself. In the end, Paul Sr. and his Orange County Choppers finished a distant third in the motorcycle design contest with the winner being his son and PJD Designs

Teutul has also known his share of adversity, including an impoverished and difficult childhood, as a mortgage borrower who faced the foreclosure of his headquarters building by the lender, and as a father who has been publicly estranged from his sons Dan, Paul, Jr., and Mikey.

As much as his successes, it’s probably his faults and failures which make Teutul interesting — and human.

Each of the contestants vies not only for Trump’s adoration but also for a charity. Teutul will use his winnings to support the Make-A-Wish Foundation, an organization which provides grants to support the wishes of children with life-threatening medical conditions.

Questions

Having Paul Sr. on Celebrity Apprentice raises several questions.

First, did the Celebrity Apprentice get the right Teutul? There’s an argument to be made that Paul Jr. would have been the better contestant because of his popularity and success.

Second, does the appearance on the Trump program signal that Paul Sr. will have a different role on the next edition of American Chopper; that is, will the program be more focused on his son? Will there be an expanded role for Jesse James or no role?

Third, which program benefits more — American Chopper or Celebrity Apprentice — from the appearance of Paul Sr?

Fourth, can anyone see a Trump cycle in the future? Even better, can anyone imagine Trump riding down Fifth Avenue on such a creation, hair blowing in the wind….

Fifth, what happens if Trump gets involved in a contentious political debate? How will that impact Celebrity Apprentice? Will there be higher instant ratings but less long-term appeal?

Contestants

For the 2012 edition of the show, NBC Entertainment says the new cast will be the largest ever with 18 contestants waiting to hear who will be fired by Trump on each segment.

The men are: late-night legend Arsenio Hall, pop star Clay Aiken, radio host Adam Carolla, the “Incredible Hulk” Lou Ferrigno, magician/comedian Penn Jillette, rock star Dee Snider, actor George Takei, IndyCar legend Michael Andretti, and star of “American Chopper,” Paul Teutul, Sr.

The women are: supermodel Cheryl Tiegs, pop star Debbie Gibson, actress and multi-Grammy winner Tia Carrere, author and reality star Victoria Gotti, comedienne Lisa Lampanelli, former Miss Universe Dayana Mendoza, singer and actress Aubrey O’Day, actress and model Patricia Velasquez, and star of “Real Housewives of New Jersey,” Teresa Giudice.

American Chopper’s Paul Sr. To Join Trump’s Celebrity Apprentice is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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After years of dispute and conflict that was some of the most interesting — if painful — broadcasting on television, Paul Sr. and Paul Jr. seem fairly settled as rival bike builders who now churn out theme bikes and custom cycles. As well, Paul Sr. has somehow worked out his dispute with his lender, a dispute which at one point lead to mortgage loan foreclosure notices for his newly-built headquarters.

But with the end of a massive lawsuit between the son and father and with the headquarters property no longer distressed, the story of the battling Pauls has cooled and with it some fan ardor. One way to rev-up their long-running American Chopper series is to bring back Jessie James.

James, like the Teutuls, is a bike builder, TV personality and businessman. While Paul Sr. may yell and Paul Jr. may be collegial in the workplace, James is a different story. He is arguably the least vocal of the bunch, but plainly a shrewd planner and strategist, something which could be seen when he appeared on the second season of the Celebrity Apprentice and came in third under the watchful eye of Donald Trump.

Live and from Las Vegas

The build-off programs will run live on Discovery on December 5th and 6th and as I read the promo the end result will be three bikes. Viewers will then have a chance to vote for a winner, probably in the same way as viewers rated the two bikes built by the Tuetuls for Cadillac.

All three builders have strengths: Paul Sr. has a huge facility and is backed by a large number of mechanics, machines and craftsmen, most notably metalworker Rick Petco. Paul Jr. has a far-smaller shop and a much smaller crew but a vastly-better sense of design along with help from show regulars Vinnie, Brendan and Cody. As to Jessie James, he’s now centered in Austin and we’ll have to see what he can do.

So who will win? Viewers will likely enjoy the fireworks, bike building and verbal sparring among the three main rivals. Also, it will be interesting to see how much — if at all — Paul Sr. and Paul Jr. cooperate in the face of a common rival.

We don’t know at this writing who will win the bike build-off, but it’s certain that Discovery will have a huge ratings hit on its hands.

American Chopper Vs. Jesse James: Who Really Wins? is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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The general answer largely depends on when you buy the property.

“If the property was foreclosed and possessed by the bank, the bank will have to pay the back taxes to sell the property with clear title,” says RealtyTrac spokesman Daren Blomquist. “However, if you purchase the property at the public foreclosure auction (on the courthouse steps) then you will be responsible for any senior liens, and property taxes fall into that category.”

With a short sale the situation is different. A short-sale is not a foreclosure. It’s a transaction where the lender agrees to allow a sale without a foreclosure even though the entire mortgage debt is not being repaid. In terms of property taxes a short sale is simply a sale with property taxes to be paid at closing. Who pays the property taxes? In some jurisdictions there is a tradition that the buyer will pay or that the seller will pay, but the issue can typically be negotiated.

For local practices speak with a nearby real estate broker or attorney who specializes in foreclosures.

Who Pays Foreclosure Property Taxes? is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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The answer as derived from the American Chopper TV show and public information is very simple: Both.

Let’s start with foreclosure. It’s plain that a foreclosure action was initiated by the lender, the GE Commercial Finance Business Property Corp.

The matter is openly discussed by Paul Sr. on the show. He raises such ideas as renting another facility, moving to another building he owns or building a new structure nearby. The local Times Herald-Record explains that loan payments of more than $100,000 had been missed as of June 1, 2010. (See: Orange County Choppers’ HQ faces foreclosure, Nov. 18, 2010)

Minutes from the Orange County Industrial Development Agency discuss the possibility of a smaller replacement building.

So if a property is foreclosed doesn’t that mean the borrower is soon tossed out?

Actually, no. Not always.

It’s in the interest of neither the lender nor the borrower to go through with a foreclosure, especially in many of today’s major foreclosure centers. The fact that a property has been “foreclosed” — that payments have been missed and foreclosure notices sent out — does not mean it will be lost.

There are a number of possible solutions to the foreclosure problem. For instance:

1. The lender and borrower can attempt to “cure” the loan. As one example, HUD reported that for fiscal 2009 the FHA had a “82.7 percent cure rate for properties 90 days or more delinquent.”
2. A cure can be created by bringing the loan current or moving unpaid money to the back of the mortgage; that is, making the loan term longer.
3. Another approach is to modify the loan by reducing the interest rate, forgiving principal, waiving penalties and fees or some combination of changes. Modifications have been used successfully by more than 720,000 residential borrowers under the government’s Making Home Affordable program.
4. If the lender will go along, the borrower can give up title — and then rent back the property. A deed-in-lieu of foreclosure with a rent-back allows the borrower to stay in place while generating income for the lender. This is the system behind Fannie Mae’s Deed for Lease progrtam. (When values are rising and foreclosure is not an issue, the better strategy is to sell the building and then rent it back — a sale and leaseback.)

Lenders would like to avoid foreclosures if possible because they can produce the most expensive outcome. To avoid that high-cost outcome lenders will sometimes agree to a short sale if the loss will be less than with a foreclosure.

For borrowers, foreclosure is a lousy choice, especially if the lender can go after not only the property but also your equipment and other assets. Credit will be damaged and the ability to get another loan will be impacted.

What happened between OCC and its lender is thus far a private matter. The objective fact is that something was worked out, maybe one of our options, maybe something else. (And, as I have mentioned elsewhere online, maybe there will be a lender theme bike to settle the matter…).

Meanwhile, at Paul Jr. Designs the approach is different. The property is rented.

Was it better for Junior to rent or for Senior to own? It’s years too early to answer that question, but Paul Sr. has been smart to have a world headquarters building that could showcase his custom motorcycle business and TV show while Paul Jr. was right to start with a rental since he may need more space in the future for his bikes, trikes and designs.

American Chopper — Foreclosure Vs. No Foreclosure is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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Search the Internet and you can find an endless volume of postings which dissect and analyze the program’s leading players, first at Orange County Choppers and later at Paul Jr. Designs. Paul Sr., Paul Jr., and Mikey all come under the microscope and in many cases, harshly.

Within these discussions are the seeds of a huge conflict — and while conflict is good for literature, legends and TV ratings you wonder if it’s any good for the Teutels.

Family Dynamics

It’s difficult to believe that Senior and Junior originally planned or wanted a public airing of their family “interchanges” — that’s a nice term for lots of yelling and hurt feelings.

It’s something of a national therapy session and it’s compelling TV — look at the ratings. But in the end we’re talking about real people, a family and difficult struggles. How many of us would trade the wealth and fame of the show’s main characters for the cost of their personal battles and insecurities? The contrast with Vinnie and Rick is enormous, individuals who are insightful and clearly understand the tragedy around them.

Family dynamics are endlessly tricky. Armies of therapists are employed in an effort to heal childhood wounds and even the best parents will say there were instances where things went wrong. It’s some of the stuff that makes us human, imperfect and fallible.

Of course, today’s parents were once children and who knows that they went through, yet much online commentary suggests little or no sympathy for Paul Sr.

With American Chopper there are overt and open discussions of rehab and therapy, past drug use, sobriety, regret and alcohol. It’s gritty stuff.

Did fame and fortune — the by-products of a long-running national TV series — make things better or worse? Or neither? There’s no way to know.

Rich & Famous

It’s impressive to see the progression of homes, shops and buildings that have evolved with the show — inevitably bigger and better, part of the American dream. And then for OCC a business drop-off, foreclosure filings and resolution.

From a business and real estate perspective, the issues with the mortgage on the new OCC building and the lender’s decision to file foreclosure papers reflect the fate of too many small businesses. OCC is in many ways a metaphor of our time. Our economy is contracting. The money that was once there is too often gone and with it opportunities for growth and jobs. Such economic changes also impact people and the way they deal with one another.

The success enjoyed by PJD is great to see, but the context is that across the country such achievement is increasingly difficult and infrequent. Maybe that’s one reason so many people watch.

American Chopper — Family Values, Family Conflict is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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You could see this coming for much of the past year.

In November 2010, the local Times Herald-Record newspaper reported that the company had failed to make mortgage payments of more than $100,000 due by July 1st, 2010.

“The Choppers,” said the paper, “stopped making mortgage payments in order to put pressure on the lender to modify the terms of the loans, according to Choppers’ lawyer Richard Mahon. Mahon said that when the headquarters was built in 2007, it was valued at about $12 million. Because of the economic downturn, the building is now worth between $7 million and $8 million, he estimated.” (See: Orange County Choppers’ HQ faces foreclosure, Nov. 18, 2010)

According to public records, the property consists of a two-story building with 98,172 square feet that was erected on 3.3 acres of land in 2008. For 2011 the property is valued at $11,248,600

If the idea was to force the lender to accept a lower mortgage rate or give up principal because the value of the property declined then foreclosure of the new building was inevitable. Here’s why:

First, financing on the property was held by GE Commercial Finance Business Property Corp. according to the Times Herald-Record. The company is enormous with 2008 revenues of $26.7 billion. The $12.5 million provided to Orange County Choppers means the motorcycle builder has no leverage because it can’t materially impact the lender by withholding payments. Alternatively, by foreclosing GE can force OCC out of the building. This is no contest.

Second, GE is a lender, not a partner or co-owner. Think about it this way: If the value of the building increased would Orange County Choppers then voluntarily agree to pay additional money to GE?

Third, a savvy point is made by Digits over at Clutch & Chrome:

“Could anyone who bought an Orange County Chopper and is still paying for it with a loan go back and ask the motorcycle building company for a discount, or at the very least help with the monthly payments? Would there be some recourse for the different dealerships around the country reselling Orange County Choppers over their costs compared to a difference in selling prices during these tough economic times?”

Fourth, how much business has been lost to a new custom bike builder that recently set up shop nearby: Paul Jr. Designs? Is the market for theme bikes big enough to support two local companies — or to support two local companies well? Could the companies prosper without TV exposure?

Paul Senior and Paul Junior have now settled their lawsuit though personal relations between father and son are clearly strained. The good news, at least, is that all OCC employees will keep their jobs even if the physical plant is downsized — that’s enormously important at a time when unemployment is high and rightsizing and outsourcing are too common. Meanwhile, PJD is growing and that’s a great success story to watch.

American Chopper: Why Foreclosure Had To Happen is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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This is good news in the sense that it’s not comfortable watching a dynamic father and a talented son wrangle and wrestle. In basic terms Paul Jr. left his father’s bike building company, Orange County Choppers, and then was told he had to sell his 20 percent interest in the company back to his father, an interest Paul Sr. valued at zero.

What’s It Worth?

It’s hard to see how a big stake in a successful venture could not have a significant price tag, but what is such an interest really worth? A minority interest in a small business is typically difficult to value because it does not control the company and, of all things, the $12.5 million OCC headquarters has faced foreclosure, not a sign of great inherent value.

A court, however, did not buy such arguments so the father was effectively forced to buy out the son in a private settlement. How much was paid is unstated on the show, but in the settlement Paul Jr. got a payment of some sort plus the symbolic Black Widow bike, the first bike built on the series.

As to the Cadillac build-off which began with the last show of the 2010 season, there’s no doubt that Paul Jr. won — and by a landslide.

• Dollars: The high bid for the bike from Paul Jr. Designs was $113,000 while the OCC bike drew a best bid of $51,000.
• Members: 146,914 people joined the Paul Jr. team while 10,412 signed on with Paul Sr.
• Photo views: 5,578,177 for Paul Jr. versus 3,171,980 for Paul Sr. Both numbers, it should be said, are huge.

The money raised by the sale of the Cadillac bikes goes to benefit the fight against Duchenne’s disease, a form of muscular dystrophy. As well, you can bet that a ton of additional donations came in.

So what’s next?

Future episodes can surely feature new bikes from both companies. There will be continued scrapping between father and son and it would not be surprising if some of the OCC builders — say Rick and Christian — drifted over to Paul Jr. Designs.

Foreclosure

There’s also the matter of the foreclosure, which ScreenRant reports has already taken place. Where will OCC re-locate and how will they get a mortgage? Could they move in with Paul Jr? And, of course, what does the mortgage lender do with a structure specifically designed to house a motorcycle builder?

What do you think?

American Chopper Is Back With Settlement & Foreclosure is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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Don’t believe it? Let’s look at some facts:

Lender Fees

With most forms of mortgage financing lenders have been able to extract such fees as the market would bear — except for FHA loans. HUD rules limited lender fees to 1 percent for most mortgages insured under the program.

All of this changed in November 2008 — two weeks after the presidential election — the outgoing Bush Administration announced that it had decided to “remove the current specific limitations on the amounts mortgagees presently are allowed to charge borrowers directly for originating and closing an FHA loan.”

Translation: A gift to lenders.

FHA Refunds

The FHA was originally established as a “mutual” insurance fund. This means that borrowers — the equivalent of policyholders in a private mutual insurance company — would benefit when the program made a profit. In the case of the FHA, the way this was done was to pay borrowers a refund after their loan was paid off (perhaps when the home was sold).

Unfortunately, the FHA refund program ended with loans originated after December 8, 2004. The government now pockets any profit from the program.

Is this a big deal? You bet. An estimated $9.76 billion in FHA borrower premiums will be added to the FHA’s Mutual Mortgage Insurance in fiscal 2011 — what the government calls a “negative subsidy.” That’s in addition to the $2.65 billion generated in fiscal 2010 and $5.01 billion surplus that’s expected in fiscal 2012.

A “subsidy” is something you put into an account, a “negative subsidy” is — in plain language — something you take out. And where does the money go? As past FHA Commissioner David H. Stevens explains: the “FHA is projected to generate approximately $9.8 billion in receipts for the U.S. Treasury in FY 2011, a significant increase compared to the $565 million of receipts generated in FY 2009.”

Excess Insurance Fees

On April 18, 2011 the FHA’s annual mortgage insurance premium (MIP) for new loans was increased by .25 percent. Doesn’t sound like much, but for most new borrowers the annual cost for FHA insurance will rise from .90 percent to .115 percent or around $30 a month.

That’s $360 extra a year.

So why was the fee increased? There certainly is no financial reason in the sense of insurance program shortages — remember the FHA is shuttling billions of dollars to the Treasury and has never had a taxpayer bailout according to Ron Phipps, president of the National Association of Realtors.

What the fee increase really does is make the FHA mortgage program less attractive to borrowers. That’s good news for private-sector lenders, the very folks who plainly have needed a taxpayer bailout and now worry that the FHA program will be over-utilized.

Of course, private lenders could assure that the FHA program would be less popular by offering better loan products or cheaper ones, a market-based solution that everyone can support.

Exit Fees

Mortgage interest is paid on a per-diem basis, a fair arrangement because for each day money is rented the lender gets compensation. The exception to this concerns the last month of an FHA loan: No matter what day of the month you pay off an FHA mortgage under current rules, the lender gets a full month’s interest.

Here’s an illustration: If you sell your home and closing is on April 5th, you must pay interest for the entire month if the property is financed with an FHA loan. If the total interest cost for the month is $1,000 then you would pay the entire $1,000 — even though you only had use of the money for five days or one-sixth of the month. If you had a conventional loan your cost would be just $166.67.

In other words, in this example the borrower pays $833.33 in excess, unearned interest.

Translation: Another gift to lenders! Multiply by a large number of closings and you have real money.

Sen. Benjamin Cardin (D-MD) and Sen. Johnny Isakson (R-GA) have now proposed an end to this gross overpayment policy. They have introduced a bill — S.488, the Reduce Excessive Interest Payments Act — legislation that would prohibit FHA interest charges on anything but a daily basis, just like all other forms of mortgage lending.

Will this bipartisan bill pass? Not without a fight.

How The FHA Is Sinking Mortgage Borrowers is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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Did you ever wonder why you get so many letters and emails from lenders who offer low mortgage quotes and seem to be affiliated with the FHA or HUD? The answer, very simply, is that you ought to wonder. Why? Lenders are not supposed to imply or infer any endorsement from the federal government.

Those strange communications which seem so “official” are simply tricks to gain attention from prospective borrowers, not much better than claims you’ve won a lottery or that a seductive encounter awaits your attention.

In the world of HUD-speak a “device” can be a letter, email, ad, or channel “soliciting, promoting or advertising FHA products or programs.”

Now, says HUD, FHA-approved lenders “are strictly prohibited from displaying the official FHA Approved Lending Institution logo(s) in a location or manner within a Device that creates the false impression that the Device is an official government form, notice or document or that otherwise conveys the false impression that the Device is authored, approved, or endorsed by the Department or FHA. Furthermore, alteration or modification of the FHA Approved Lending Institution logo(s) is strictly prohibited. Non-approved mortgagees, including Third Party Originators, are prohibited from using the official FHA Approved Lending Institution logo(s) on any Device. Moreover, use of the FHA logo is strictly prohibited. No person, party, company, or firm, including FHA-approved mortgagees, may use the FHA logo.”

Because of the new rule, starting in May you’re likely to see a whole new class of messages from lenders, messages which plainly state that the missive is not authored, approved, or endorsed by HUD or the FHA.

When looking at lender letters which hint or suggest some sort of government affiliation there are some question to be asked:

1. Is the sender an approved FHA lender?
2. Is the sender affiliated with your current lender? This is important because letters often contain the name of your current lender in big and bold type — but the senders actually have nothing to do with your lender.
3. No matter how seemingly “official” are you looking at a government form or some concoction churned out by a lender’s art department?
4. Is some sort of official sounding program mentioned? Is there actually any such program? Look up the program by name on the Internet and see if you find any government sites which explain the program in detail.
5. How can you get those low, low rates featured in the letter? That is, how do you qualify? (Beware, in some cases you can only get the lender’s touted rate by completing your loan application on the skin of a unicorn….)
6. Is there a minimum loan amount? How about a maximum?
7. Are the rate mentioned in the “device” subject to change?
8. Does the letter tout monthly payment savings? Does it also say that if you refinance with the lender it’s possible that your interest rate or overall loan costs could actually rise over the life of the loan?
9. Does the letter include some legal-sounding jargon about interfering or obstructing the mail? Does it make the letter seem more important? Is it anything but nonsense?
10. Does the letter make any reference to borrowers with bad credit? If you have damaged credit do you really think the lender has some magical way to offer a discounted interest rate?

Of course, when looking for a mortgage always protect your interests — shop around, speak with several lenders and get written Good Faith Estimates (GFEs).

New HUD Rule Goes After Fake Mortgage Loan Letters is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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In terms of financing, real estate is real estate. The fact that it’s a foreclosure, distressed property or home for sale under normal conditions makes no difference. The important point is that the economic sins of the last owner do not transfer to the new one. What matters is that at the time of financing the property has good, marketable and insurable title and that it also has a given market value.

Once the value of a foreclosed property has been determined through a sale agreement or appraisal, whichever is less, the real estate can then be financed in the same way as any other property.

There is, however, one difference with foreclosed properties which should be of interest to would-be buyers: In some cases lenders will finance the sale of the properties they’re selling.

Leverage

This is both good news and not-so-good news. The good news is that the lender is one more source of financing in addition to all the other mortgage sources that are out there. The not-so-good news is that the willingness of the lender to finance the sale may bring in other bidders and it may stiffen the lender’s negotiation stance.

Can I Get A Foreclosure Mortgage? is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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