This week’s update will be dedicated to the ‘ones I love’ (realtors). In the spirit of working together, and making transactions smooth, here are some tips for the New Year. You can call it ‘Survival in 2010’ if you like!
APPRAISALS (HVCC)
Yes, it’s still in effect, and no sign of a moratorium. Did you know that Patriot has its own ‘short list’ of appraisers that we choose from? We do NOT use Appraisal Management Companies (AMC’s) as does some of our competition. AMCs pad fees, and they pad turn times on appraisals. Beware.
TIP: Interview the lender once you receive the approval letter! Whether you are the buying or selling agent, you have the RIGHT to know!
Sample Questions to Ask a Lender:
· How does your company order appraisals? Do you use an appraisal management company?
· How many days on average to receive the appraisal once ordered?
· When will you order the appraisal?
· What are your underwriting turn times?
· Do you release documents early on average? How early?
· How many files does your processor work on at one time?
· Where does the loan get processed? Local? Out of state?
· Where is the loan underwritten?
· Are you a broker or the lender?
CONDOS (not Townhouses)
Investors, first time home buyers and empty nesters LOVE them! Lenders cringe at them. This is because condos are a haven for foreclosure. Heavily investor-owned, it is the first investment to go bad, especially when dues are not being paid and the property begins to deteriorate. We have seen this happen in Houston! There are entire buildings around town that were foreclosed upon as the result of ‘straw’ buyers and dishonest developers. You know which ones they are.
Questions to ask the HOA at the time of listing OR if you are buyers agent (before showing) ****if we wait until contract, it could be too late, and buyer and seller have wasted their time – not to mention you!
· Owner Occupancy rate (50% for FHA, 70% for Conventional)
· Are >15% of the owners delinquent on HOA monthly dues
· Is there a min. of 1 mm fidelity bond insurance in place? (***this is addressed on the ‘master’ policy, and can often be missed until closing **)
· Are there and pending lawsuits (if so, what are the details)
· Does the budget allow for deferred maintenance (meaning….there is none, right?) *we will want to see reserves on their operating statement too- to avoid deferred maintenance
· Does more than 1 entity (aka, person, bank, etc….) own >10% of the units? **Bank foreclosures are NOT exempt from this equation!
DEBT TO INCOME maximum allowed is 45%
In the heyday, we could go up to 65% debt to income ratio if the client had 10% down, and an excellent credit score. That is taken from gross income! Very generous indeed. Then last year, that went to 20% down in most cases. Well, as of Dec 12, it is 45% debt to income, regardless of who you are, or how much money you have in the bank. End of story.
But good ole FHA is still our friend at 55%, at least for now.
Tip: Buyers to get qualified EARLY, EARLY, EARLY! But you already knew that!
GOOD FAITH ESTIMATE (GFE)
The joys of change... The biggest take away is that now the good faith estimate discloses ALL charges, no matter who pays them (buyer or seller). So at first glance, and left without interpretation, the buyer can be in the dark and confused and hesitant to buy the home.
Tip: Ask questions to the buyer, or be prepared for their questions.
· Did they know that a good faith estimate will not likely be given until they are under contract?
· Have they received a ‘cash to close’ and/or a ‘monthly payment’ summary in conjunction with the good faith estimate?
· Prior to having a contract /property, they will get a summary, likely called a ‘Fee Worksheet’ (just a change in terminology)
· They need to be prepared that they will not receive fees/rate unless they have given the lender documentation and pulled credit
· Rate is 90% dependent on credit score! (a lender credit score, NOT a ‘myfreecreditreport.com’ credit score )
I hope you found this information helpful. Enjoy the glorious weather, and as always, you can count on us for all your mortgage questions!
Friday, January 22, 2010
Wednesday, January 20, 2010
All shook up
For the last 2 weeks, my papers have been piling up at home. “Why have I not read them? “My husband asks, saying that I am wasting money. The truth is, I have not missed much. Do you ever get that feeling? Maybe it was the holidays, or maybe I just needed a break, to get that feeling of newsworthiness back again. I think I’ll start reading tomorrow and get back on track.
I even went online to cruise msnbc.com, and I still feel I not missed much. However, the earthquake in Haiti is horrible and my heart goes out to those people. Is it a sign of global warning? All this extreme weather is making me nervous! Does this have much to do with mortgages? No and Yes. Feelings and the habits of traders are what make the bond prices go up and down.
This week, retail sales showed that 09 dropped -6.2 total, and furthermore, unemployment is on the rise, higher than expected. A total of 4.6 million people. In addition to that, there are still 10 million that have part time jobs that want full time jobs.
As long as the unemployment is high, and other economic factors look grim, the FED should keep rates steady. They have a difficult game to play, and not rising too soon, or the economy may tumble. But be careful what we wish for. Economic recovery and good news will surely bring higher rates, and probably quickly.
As we have said before, the time is now. I do feel like somewhat of a broken record, but it’s true! Have your clients get their finances in order, talk to a lender immediately and run their credit (did you know that the score on Equifax online is different than what a mortgage company generates? Drastically different! We are measuring risk of you defaulting on the mortgage. Equifax is not. They just spit out a general score to ‘satisfy’ the curiosity of the consumer).
Enjoy the weekend, and call us when you need anything at all. We remain your trusted friends in the mortgage industry!
I even went online to cruise msnbc.com, and I still feel I not missed much. However, the earthquake in Haiti is horrible and my heart goes out to those people. Is it a sign of global warning? All this extreme weather is making me nervous! Does this have much to do with mortgages? No and Yes. Feelings and the habits of traders are what make the bond prices go up and down.
This week, retail sales showed that 09 dropped -6.2 total, and furthermore, unemployment is on the rise, higher than expected. A total of 4.6 million people. In addition to that, there are still 10 million that have part time jobs that want full time jobs.
As long as the unemployment is high, and other economic factors look grim, the FED should keep rates steady. They have a difficult game to play, and not rising too soon, or the economy may tumble. But be careful what we wish for. Economic recovery and good news will surely bring higher rates, and probably quickly.
As we have said before, the time is now. I do feel like somewhat of a broken record, but it’s true! Have your clients get their finances in order, talk to a lender immediately and run their credit (did you know that the score on Equifax online is different than what a mortgage company generates? Drastically different! We are measuring risk of you defaulting on the mortgage. Equifax is not. They just spit out a general score to ‘satisfy’ the curiosity of the consumer).
Enjoy the weekend, and call us when you need anything at all. We remain your trusted friends in the mortgage industry!
Wednesday, January 13, 2010
Welcoming the new year
Looking back on 2009, I wore many hats other than the obvious loan expert: marriage counselor, lobbyist, financial advisor, mediator, and I am sure there are others not listed here. You see, in this new real estate environment we live in, it has forced a new set of standard for us professionals. We need to truly be experts in our field. We need to anticipate, forecast, and work together more than ever before!
January 1 produced new legislative compliance changes for lenders and title companies. The result: The good faith estimate has gone from 1 page to 3, and if left on its own with no explanation, will leave the borrowers confused more than ever before. Even experienced ones! But don’t have fear- embrace the change! Some good will come out of this, I just need another week to think of what it is! Really, we will adjust, and all will be fine in a few months. The takeaway here is that it is IMPERATIVE that you EDUCATE buyers like never before to get with a lender early. Know the lender, like the lender, and trust the lender, because once they have chosen, it is very difficult to change without closing and monies being affected. So choose wisely.
Rates have started to rise. Some say that in the final countdown to March of the government waning down the purchase of the mortgage backed securities, that it has already started. Once we see the ‘true’ and ‘unsubsidized’ rates….what will we find? I have heard many predictions, but 6.5%-7.0% seems to be sticking out more than most of what I hear. Who really knows?
This year, 2010, look for continued regulation of lenders. We will see fallout like never before. Lenders that will not survive, due to financial constraints imposed by the FDIC, HUD, Fannie Mae, and others. More reason for you to know your lenders, and fine tune your list of trusted mortgage professionals now.
At Patriot Bank Mortgage, we are owned by a regional bank, Patriot Bank. We are stronger than ever, and have the financial net worth, and cash to meet the stringent requirements surely to come. Our goal for 2010 is to give the best service ever, create raving fans of our clients and realtors, and become the best mortgage company in Texas.
The best is yet to come……………..and I look forward to seeing you at the top!
January 1 produced new legislative compliance changes for lenders and title companies. The result: The good faith estimate has gone from 1 page to 3, and if left on its own with no explanation, will leave the borrowers confused more than ever before. Even experienced ones! But don’t have fear- embrace the change! Some good will come out of this, I just need another week to think of what it is! Really, we will adjust, and all will be fine in a few months. The takeaway here is that it is IMPERATIVE that you EDUCATE buyers like never before to get with a lender early. Know the lender, like the lender, and trust the lender, because once they have chosen, it is very difficult to change without closing and monies being affected. So choose wisely.
Rates have started to rise. Some say that in the final countdown to March of the government waning down the purchase of the mortgage backed securities, that it has already started. Once we see the ‘true’ and ‘unsubsidized’ rates….what will we find? I have heard many predictions, but 6.5%-7.0% seems to be sticking out more than most of what I hear. Who really knows?
This year, 2010, look for continued regulation of lenders. We will see fallout like never before. Lenders that will not survive, due to financial constraints imposed by the FDIC, HUD, Fannie Mae, and others. More reason for you to know your lenders, and fine tune your list of trusted mortgage professionals now.
At Patriot Bank Mortgage, we are owned by a regional bank, Patriot Bank. We are stronger than ever, and have the financial net worth, and cash to meet the stringent requirements surely to come. Our goal for 2010 is to give the best service ever, create raving fans of our clients and realtors, and become the best mortgage company in Texas.
The best is yet to come……………..and I look forward to seeing you at the top!
Tuesday, December 15, 2009
Understanding Change
My closest friends have told me that I have chilled over the years, and that my college nickname of ‘wiggie’ might no longer apply. However, lately, the feeling has resurfaced. Today, I attended a training for the Jan 1 changes that will take effect in our industry regarding the good faith estimate. Lenders and Title agents have new forms, new rules, new deadlines, which boils down to one thing: CHANGE. It will be cumbersome, unfamiliar and take time to retrain staff, clients, realtors, and title agents. We will get through it, that is for sure. Yet another reason that I advise my realtor friends (such as yourself) to know and love your lenders (like me!). We will hold your hand, coach your clients, and be sure that every detail is uncovered to a tee, and assure the transaction closes on time.
RATES have been low! It is hard to pinpoint one reason why. Who can keep up? Could it be that the media is so consumed with Tiger that they don’t blast economic news for traders to overreact? Or is it our plight in Afghanistan? Or that Goldman Sachs will not pay bonuses (cash) this year, but replace them with stock, a sign that the industry is regulating. Or that the FED will keep rates low for the near future? There is so much news in one week, it is hard to say. What I do tell clients, is that change is inevitable. Rates are low, prices are reasonable, and the time is right. Take the low rates for what they are, and Let’s go!
I’ll be finishing my shopping this weekend, hard to believe its almost Christmas! Whatever you will be doing, stay warm, and relax. You deserve it!
RATES have been low! It is hard to pinpoint one reason why. Who can keep up? Could it be that the media is so consumed with Tiger that they don’t blast economic news for traders to overreact? Or is it our plight in Afghanistan? Or that Goldman Sachs will not pay bonuses (cash) this year, but replace them with stock, a sign that the industry is regulating. Or that the FED will keep rates low for the near future? There is so much news in one week, it is hard to say. What I do tell clients, is that change is inevitable. Rates are low, prices are reasonable, and the time is right. Take the low rates for what they are, and Let’s go!
I’ll be finishing my shopping this weekend, hard to believe its almost Christmas! Whatever you will be doing, stay warm, and relax. You deserve it!
Monday, November 16, 2009
The Best is yet to come!
Have you had an AHA moment lately? Well, I just had 10 of them. As I sat writing on this wifi laptop at the JW Marriott in Orlando, Florida, taking in a gorgeous sunset, I renewed my purpose in life, in business and to the planet. My goals for 2010 are set, my vision is clear, and execution is on the horizon.
In case you are wondering, I just attended the CORE seminar (thecore.tv) for Realtors/Lenders this past week. A group of high producing, driven producers, that have the inspiration every 6 months at these 'summits' to do better. Do better for my clients, for my team, for my company, and the planet. We watched clips from 'Pay it Forward' and 'Braveheart.’ We discussed how to create relevance and purpose. We shared strategies to build better teams, delegate, and take control of our day. We talked about feelings, and about when we die, what will people say about us?
We all need a spark, an inspiration. You may find it in a seminar, a mentor, a book, or a movie. Whatever it is, own it. THERE IS NO TOMMORROW. SUCCESS IS NOT AN ACCIDENT. And most importantly, EXCUSES ARE UNACCEPTABLE.
Have a fabulous week, and may we continue to work together toward our continued success and prosperity, whatever you define that may be.
In case you are wondering, I just attended the CORE seminar (thecore.tv) for Realtors/Lenders this past week. A group of high producing, driven producers, that have the inspiration every 6 months at these 'summits' to do better. Do better for my clients, for my team, for my company, and the planet. We watched clips from 'Pay it Forward' and 'Braveheart.’ We discussed how to create relevance and purpose. We shared strategies to build better teams, delegate, and take control of our day. We talked about feelings, and about when we die, what will people say about us?
We all need a spark, an inspiration. You may find it in a seminar, a mentor, a book, or a movie. Whatever it is, own it. THERE IS NO TOMMORROW. SUCCESS IS NOT AN ACCIDENT. And most importantly, EXCUSES ARE UNACCEPTABLE.
Have a fabulous week, and may we continue to work together toward our continued success and prosperity, whatever you define that may be.
Tuesday, November 10, 2009
The Credit is Officially Extended!!!
If you are a Desperate Housewives junkie like me, you would have seen last week when Lanette Scavo busted her husband cheating on his college mid term (he went back to school at 40). His response was how is that different than her not telling her boss at a recent promotion that she is pregnant with twins? This show is soooo juicy! Then, his next statement made me wonder .................Sometimes we are all doing the best we can in order to survive. Well, isn't that the truth! However, where do we draw the line? Whether telling a white lie to your toddler that the Halloween candy is gone, or the teacher that the dog ate your homework, or that you cheated on a spouse, or forgot to tell your husband about the 50K in debt you have accrued on your private credit card, or that your income is $10,000/month on your mortgage application (the old stated income). Isn’t a lie a lie?
This is certainly an interesting debate. I bring it up, because of the mixed signals that exist in our society every single day. Including the ones we (the lenders, Fannie Mae, legislators) are creating with new rules an regulations. Reward in one category, punitive in the next. I could give you examples, but you would stop reading, the list is so long. How quickly will we forget this mess, and recover, and begin to live again as we did in the past. Should we, would we? I love to keep you hanging.
The First Time Homebuyer Credit has OFFICIALLY PASSED. No more Nov 30 deadline. It is now extended to April 30th (signed contract) closing by July 2010. The income limits have increased. Now you can be a single wage earner of $125,000, or household of $250,000. The max purchase price is $800,000. And now, if you are a current homeowner, and have been in your current home >5 years, you can get up to $6500.
The Federal Reserve this week left rates unchanged. They hold at 0 - .25%. There is fear that the economy really has not turned around yet. Well, one would think after the unemployment numbers jumped last month. I personally believe the worst is yet to come as unemployment benefits run out (despite the recent 20 week extension), and people cannot make mortgage payments. I believe the Spring will be difficult as well. More foreclosures and short sales, just what we need. Actually, I prefer foreclosures. Short sales, however, take 4-5 months for the contract to even be accepted! That takes patience.
Rates are low. Check out the 5/1 and 7/1 ARMS. Perfect for borrowers that will be in their homes less than 5 years. Get them while you can.
We are about to close a loan in 14 calendar days. I just received a frantic call here at my desk on a Saturday. What are the chances I would be here? At Patriot, we can do that: close quickly, service your customer. Large enough to serve you, and small enough to know you.
This is certainly an interesting debate. I bring it up, because of the mixed signals that exist in our society every single day. Including the ones we (the lenders, Fannie Mae, legislators) are creating with new rules an regulations. Reward in one category, punitive in the next. I could give you examples, but you would stop reading, the list is so long. How quickly will we forget this mess, and recover, and begin to live again as we did in the past. Should we, would we? I love to keep you hanging.
The First Time Homebuyer Credit has OFFICIALLY PASSED. No more Nov 30 deadline. It is now extended to April 30th (signed contract) closing by July 2010. The income limits have increased. Now you can be a single wage earner of $125,000, or household of $250,000. The max purchase price is $800,000. And now, if you are a current homeowner, and have been in your current home >5 years, you can get up to $6500.
The Federal Reserve this week left rates unchanged. They hold at 0 - .25%. There is fear that the economy really has not turned around yet. Well, one would think after the unemployment numbers jumped last month. I personally believe the worst is yet to come as unemployment benefits run out (despite the recent 20 week extension), and people cannot make mortgage payments. I believe the Spring will be difficult as well. More foreclosures and short sales, just what we need. Actually, I prefer foreclosures. Short sales, however, take 4-5 months for the contract to even be accepted! That takes patience.
Rates are low. Check out the 5/1 and 7/1 ARMS. Perfect for borrowers that will be in their homes less than 5 years. Get them while you can.
We are about to close a loan in 14 calendar days. I just received a frantic call here at my desk on a Saturday. What are the chances I would be here? At Patriot, we can do that: close quickly, service your customer. Large enough to serve you, and small enough to know you.
Monday, November 2, 2009
We're all doing the best we can
This week was brutal. From a personal standpoint, I have a loved one with cancer returned, another loved one pending foreclosure in NJ and unemployed for 1 year, and my assistant fell down the stairs taking the mail in our building. In the midst of complete personal, emotional chaos, I was once again reminded of those things I hold most dear. My reason for bringing this up, is that we all have our personal ups and downs, good days and bad, but it is those persons we surround ourselves with, personal as well as in business, that will get us through all challenges. If you are on this email blast, it means I am grateful for you!
The small gestures are the ones that count. I would like to extend heartfelt thanks to a realtor (you know who you are) that assured me yesterday, that he knew that if anyone could close our deal (that almost blew up), that I could. He knew I was working hard, and had faith that I would try my best. You made my day! I so needed that, you have no idea. Isn't that what we are all doing, the best that we can?
Speaking of best we can. It is all we (the lenders) can do to keep transactions together. I read a blog yesterday that was (so) true: Why is the government still trying to push low to moderate income households through (ex: FHA, 3.5% down, 620 credit score, 55% debt ratio, and seller closing cost credit), when there are many well qualified persons that can barely get by on approval, if at all. So many twists and turns, verify this and that, blah, blah, blah.
The latest policy change in mortgage that is , in my opinion, HUGE, is that we have to audit via the IRS EVERY CLIENTS' tax return, and if they are married, and the spouse is not on the loan (let’s say they have bad credit), and we pull the audit with IRS, and the spouse has negative income from a business they own, for example, we have to deduct that from total income. FULL DOCUMENTATION has a new meaning, and mandates full transparency. In every way. But oh, wait, you have perfect credit, and one little $60 collection with Time Warner, and your credit score lowered to 619, Sorry, no loan for you. Give me a break.
The first time homebuyer credit is in the House, yet to be approved, but hanging by a string. If passed at its current proposal, it would extend to contracts executed to April 15, Income levels to $250,000 household, and available up to $6500 to NON first time buyers. Lets wait and see………
What is the market doing? Rates rallied hard this week, but ended on a positive note. Unemployment is still depressing, and home sales declined for the first time in months. The t-bill auctions ended on a sour note Thursday. By the way, this was the last round of 3, 5 , and 7 year tbills that will be gobbled up by the US Government (buying their own debt). We should be thankful, you know. Because it is that one move, that has kept rates low. We should be thankful, folks.
The small gestures are the ones that count. I would like to extend heartfelt thanks to a realtor (you know who you are) that assured me yesterday, that he knew that if anyone could close our deal (that almost blew up), that I could. He knew I was working hard, and had faith that I would try my best. You made my day! I so needed that, you have no idea. Isn't that what we are all doing, the best that we can?
Speaking of best we can. It is all we (the lenders) can do to keep transactions together. I read a blog yesterday that was (so) true: Why is the government still trying to push low to moderate income households through (ex: FHA, 3.5% down, 620 credit score, 55% debt ratio, and seller closing cost credit), when there are many well qualified persons that can barely get by on approval, if at all. So many twists and turns, verify this and that, blah, blah, blah.
The latest policy change in mortgage that is , in my opinion, HUGE, is that we have to audit via the IRS EVERY CLIENTS' tax return, and if they are married, and the spouse is not on the loan (let’s say they have bad credit), and we pull the audit with IRS, and the spouse has negative income from a business they own, for example, we have to deduct that from total income. FULL DOCUMENTATION has a new meaning, and mandates full transparency. In every way. But oh, wait, you have perfect credit, and one little $60 collection with Time Warner, and your credit score lowered to 619, Sorry, no loan for you. Give me a break.
The first time homebuyer credit is in the House, yet to be approved, but hanging by a string. If passed at its current proposal, it would extend to contracts executed to April 15, Income levels to $250,000 household, and available up to $6500 to NON first time buyers. Lets wait and see………
What is the market doing? Rates rallied hard this week, but ended on a positive note. Unemployment is still depressing, and home sales declined for the first time in months. The t-bill auctions ended on a sour note Thursday. By the way, this was the last round of 3, 5 , and 7 year tbills that will be gobbled up by the US Government (buying their own debt). We should be thankful, you know. Because it is that one move, that has kept rates low. We should be thankful, folks.
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