There was lots of interesting news this week, so I will get right to the point:
Corrections from my last post:
· The SAFE ACT (requiring seller financiers to be licensed to be a mortgage lender) is actually delayed until August 31. This means that for 2 more months, sellers can finance to their hearts content. Once and If the SAFE ACT does come into play, sellers will have to be licensed in their state to be a mortgage lender for anything other than a primary residence. The commissioner of the Texas Dept of Savings and Mortgage Lending is also taking significant steps to allow property owners to seller finance up to five transactions in a 12 month period. Not reality yet, so I am sure more is to come.
· Extension of Homebuyer Tax Credit: This is NOT reality. There has been proposals in the House to pass a bill , but because it is grouped together with other legislation, it is getting caught up in red tape. Will it make the 30th deadline? Not sure. If passed, it applies ONLY to those persons already under contract.
More news you can use:
· What do you think about the 1200 prison inmates that were able to defraud the government of 9.1 million total in tax credits reserved for 1st time buyers? It’s a shame, for such a generous move on our parts (via our legislators!), that people still find a way to take advantage. There will always be fraud, it just moves from product to product. Sad.
· Fannie Mae is seriously considering ‘cracking down’ on homeowners that walk away from their homes even if they have the ability to pay. (ex: the values are less than the loan balance). After a default/foreclosure they would not be able to get another Fannie or Freddie mortgage for at least 7 years AND could be receiving a judgment for the full loan balance amount. Many homeowners have the attitude of ‘why should I pay?’. So they walk.
· Well, how about because it’s the right thing to do? Reading the blog comments on this one was interesting. Responses varied from ‘it’s the right thing to do’, to ‘can’t believe Fannie has the nerve to make homeowners pay (once again) for the bad products they created that started this whole mess. It was all very interesting, to say the least.
· Unemployment benefits were NOT extended. Millions of unemployed are about to lose benefits. Congress did not pass the bill, wary of increasing the deficit further.
Rates are still at record lows….best time to be looking if you are a buyer!
Monday, June 28, 2010
Monday, June 21, 2010
Counting down
As I count down my due date to 3 weeks, everyone assumes that I am ready for this pregnancy process to be over with. HECK NO! Once my second son is born, out the window will fly my excuses for weekly massages, nightly footrubs from Fernando, cutting in line at the grocery store, and stork parking at Kroger. Who are we kidding? I want to milk this timeline for all its worth!!!!!!! On a serious note, I would like to also assure all of you, my trusted referral partners, that even as I enjoy the first few weeks of my new baby at home, my team (Kenny and Sarah) will be at the office slaving away! Waiting for your calls, and ready to qualify your clients quickly and close our loans efficiently! There will be absolutely no disruption in the service we provide.
This week there are several points of 'News You Can Use":
Changes to Seller Financing: On May 1, 2010, the SAFE Act was passed into law (Secure and Fair Enforcement for Mortgage Licensing Act) which has within it a small provision that expands licensing requirements to owner finance transactions (1-4 family residential) where the property is not the primary residence. The seller/financer must be licensed as a residential mortgage loan originator. The process involves education, background checks, fingerprints, and the payment of fees. If your buyers/sellers are considering this in the transaction, be sure that you are aware of the new limitations.
Home Buyer Credit Deadline Extension: until 9/30/2010 (for contracts already executed before April 30. This gives more time for delays that have arisen in short sales, etc for buyers to close their loans.
Flood Insurance: Congress today once again could NOT reach an agreement on a budget for flood insurance. So......the moratorium on new policies still stands. Lets hope the legislators can get it together. AT PATRIOT, we will accept a prepaid policy with application for closing.
Have a great weekend! Rates are still fantastic, presenting a wonderful opportunity for your clients to buy a new home!
This week there are several points of 'News You Can Use":
Changes to Seller Financing: On May 1, 2010, the SAFE Act was passed into law (Secure and Fair Enforcement for Mortgage Licensing Act) which has within it a small provision that expands licensing requirements to owner finance transactions (1-4 family residential) where the property is not the primary residence. The seller/financer must be licensed as a residential mortgage loan originator. The process involves education, background checks, fingerprints, and the payment of fees. If your buyers/sellers are considering this in the transaction, be sure that you are aware of the new limitations.
Home Buyer Credit Deadline Extension: until 9/30/2010 (for contracts already executed before April 30. This gives more time for delays that have arisen in short sales, etc for buyers to close their loans.
Flood Insurance: Congress today once again could NOT reach an agreement on a budget for flood insurance. So......the moratorium on new policies still stands. Lets hope the legislators can get it together. AT PATRIOT, we will accept a prepaid policy with application for closing.
Have a great weekend! Rates are still fantastic, presenting a wonderful opportunity for your clients to buy a new home!
Monday, June 14, 2010
Mixed Signals
Another week survived in the mortgage industry! Actually, its not that hard to survive. You just do the right thing, return calls ALWAYS, and give bad news early. Communicate. That can’t be that hard, can it? At Patriot Bank Mortgage, we like to think we do that exceptionally well. My team and I proactively call /email borrowers and both agents on the transaction once per week, to update them on the progress. If you could use that kind of service from your mortgage lender, call us, we are happy to talk to you about how best to work together.
I had lunch with Mike Inselmann this week. A rare treat to have one on one time with the most well known Houston economists (in my opinion a pure genius). We talked of course about the business (after kids and grandkids). He was very interested to hear a lenders story on what we go through, and I naturally got his take on things. Bottom line, we concluded that the pendulum has swung in the complete opposite direction, BUT ….things will lax. It may take a few years, but shouldn’t lenders have cared about proving income years ago? I mean really, does it make much sense to say to a borrower ‘OK, we are just going to take your word for it that you make xxx dollars and have xxx in the bank’. Where did we as a society think that was ever fair to take a ‘just because you said so’ attitude?
Congress passed an increase in the FHA monthly premium this week from .55% to .9%. On a $170,000 transaction, that will cost a borrower $42/month. For some borrowers, that will make the difference between qualifying and not qualifying. The increase is due to the fact that FHA needs revenue. They are losing money due to foreclosures, and this is one way to get it. Make the innocent consumers to pay. I think I will stop here, because being 35 weeks pregnant, I can’t get all riled up on this issue. Don’t get me started.
Retail sales came out today the lowest in 8 months (1.2% decline). However consumer sentiment has improved. Once again, mixed signals. Time will only tell how the stock market and bond market will react. For now, rates remain low, and if your buyers are sitting on the fence, they might want to consider buying now while rates are still low. They most surely will eventually go up. That is for sure….like taxes.
I had lunch with Mike Inselmann this week. A rare treat to have one on one time with the most well known Houston economists (in my opinion a pure genius). We talked of course about the business (after kids and grandkids). He was very interested to hear a lenders story on what we go through, and I naturally got his take on things. Bottom line, we concluded that the pendulum has swung in the complete opposite direction, BUT ….things will lax. It may take a few years, but shouldn’t lenders have cared about proving income years ago? I mean really, does it make much sense to say to a borrower ‘OK, we are just going to take your word for it that you make xxx dollars and have xxx in the bank’. Where did we as a society think that was ever fair to take a ‘just because you said so’ attitude?
Congress passed an increase in the FHA monthly premium this week from .55% to .9%. On a $170,000 transaction, that will cost a borrower $42/month. For some borrowers, that will make the difference between qualifying and not qualifying. The increase is due to the fact that FHA needs revenue. They are losing money due to foreclosures, and this is one way to get it. Make the innocent consumers to pay. I think I will stop here, because being 35 weeks pregnant, I can’t get all riled up on this issue. Don’t get me started.
Retail sales came out today the lowest in 8 months (1.2% decline). However consumer sentiment has improved. Once again, mixed signals. Time will only tell how the stock market and bond market will react. For now, rates remain low, and if your buyers are sitting on the fence, they might want to consider buying now while rates are still low. They most surely will eventually go up. That is for sure….like taxes.
Thursday, June 10, 2010
The Oil controversy and more
Should I dare mention the oil spill? Its on everyone's topic of conversation, just like the OJ simpson trial, or Monica Lewinsky, or....I don't know, just about anything the press can get their hands on. The fact is that this oil spill will affect our Houston economy. Somehow, someway.
A few topics for today:
There is another reason why you should claim all your income on your taxes and not fudge write offs! (other than the obvious, it’s the right thing to do). (1) You need to show income to get a mortgage loan (2) if you want BP to reimburse you for lost wages, like they are doing in Florida to realtors that have claimed lost wages on beach rental. You see, BP is reimbursing fisherman, restaurants, realtors, just about anybody. So to prove wages, if you are self employed, many of them have to shore up tax returns to show income. Uh oh, you say! Where is the income? Good for BP, bad for the person wanting the handout.
Boy these RATES are nice. I am not sure if they are going anywhere soon. Between the European crisis, the oil spill, and unemployment tanking the stock market today, seems that troubled times and uncertain times are ahead. Making investors skiddish, and looking for the safe haven of bonds to put their cash. Remember, when the stock market is not doing well, bonds are, so that pushes mortgage rates down.
If you have a closing at the end of June that is NOT expecting the tax credit, beware! Lenders and title companies are swamped trying to meet deadlines for the flood of business that needs to make the deadline of June 30. Would you want your buyer to miss the credit? So when push goes to shove, look for lenders and underwriters to choose the tax credit files over yours to push to the head of the line. TALK WITH THE BUYERS LENDER NOW. Be on top of them on the timeline. Most of all, prep the buyers and sellers that there may be delays. Hopefully you thought ahead and did not schedule your closing for June 30 anyway.
Flood insurance is temporarily unavailable - AGAIN! Until Congress reconvenes next week, there are no approved funds. Many lenders (like Patriot) are allowing closings where the application and premium have been paid. Hopefully your transactions are not affected. My only lingering question is (1) How could Congress leave session without approving funds AGAIN! and (2) Why did they only approve flood for 45 days the last time this happened? Will we be going through this every 60 days? What a dilemma. Once again, we are powerless against these forces which we cannot change (in the short term). As I have mentioned before, get involved with your lobby, or the topics you believe in. It’s the only way we will change things. If we don’t get involved, than can we ever expect change?
A few topics for today:
There is another reason why you should claim all your income on your taxes and not fudge write offs! (other than the obvious, it’s the right thing to do). (1) You need to show income to get a mortgage loan (2) if you want BP to reimburse you for lost wages, like they are doing in Florida to realtors that have claimed lost wages on beach rental. You see, BP is reimbursing fisherman, restaurants, realtors, just about anybody. So to prove wages, if you are self employed, many of them have to shore up tax returns to show income. Uh oh, you say! Where is the income? Good for BP, bad for the person wanting the handout.
Boy these RATES are nice. I am not sure if they are going anywhere soon. Between the European crisis, the oil spill, and unemployment tanking the stock market today, seems that troubled times and uncertain times are ahead. Making investors skiddish, and looking for the safe haven of bonds to put their cash. Remember, when the stock market is not doing well, bonds are, so that pushes mortgage rates down.
If you have a closing at the end of June that is NOT expecting the tax credit, beware! Lenders and title companies are swamped trying to meet deadlines for the flood of business that needs to make the deadline of June 30. Would you want your buyer to miss the credit? So when push goes to shove, look for lenders and underwriters to choose the tax credit files over yours to push to the head of the line. TALK WITH THE BUYERS LENDER NOW. Be on top of them on the timeline. Most of all, prep the buyers and sellers that there may be delays. Hopefully you thought ahead and did not schedule your closing for June 30 anyway.
Flood insurance is temporarily unavailable - AGAIN! Until Congress reconvenes next week, there are no approved funds. Many lenders (like Patriot) are allowing closings where the application and premium have been paid. Hopefully your transactions are not affected. My only lingering question is (1) How could Congress leave session without approving funds AGAIN! and (2) Why did they only approve flood for 45 days the last time this happened? Will we be going through this every 60 days? What a dilemma. Once again, we are powerless against these forces which we cannot change (in the short term). As I have mentioned before, get involved with your lobby, or the topics you believe in. It’s the only way we will change things. If we don’t get involved, than can we ever expect change?
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