FHA Home Affordable

HUD/FHA announced today that struggling FHA borrowers can now qualify for assistance through the Making Home Affordable program. The new FHA version of the Home Affordable Modification Program helps make monthly mortgage payments more affordable through the use of a HUD "claim program" which puts off the repayment of mortgage principal through an interest only second lien.

Borrowers up to 12 months in arrears may be helped with a defferment of up to 30% of the principle. Again, loan servicers will receive incentives to taking part. Possibly anothter stupid misconceived program from HUD: "we’re bringing another important tool to the table to help struggling families who are desperate to keep their homes,” said HUD Secretary Shaun Donovan.

FHA borrowers are expected to be able to apply for assistance beginning August 15 and should contact a loan counselor to determine eligibility.

Let’s hope the goofs in Washington can get it right with this new scheme. They sure blew it with the Hope for Homeowners program which literally helped NO ONE.

Posted by gilkerk ( General, FHA, Government Home Loans, Crystal Lake Real Estate Agents, Agonquin Real Estate Agents, Cary Illinois Real Estate Agents, Mortgages, Mortgage Interest Rates, FHA Appraisals, FHA Appraisers, HUD Owned Homes, HUD Homes, HUD Foreclosures, McNeil Financial Group, Lake in the Hills Mortgage, McHenry Home Loans, realestateloans.com, mcneil financial group, (847) 458-8700, Integra Mortgage Schaumburg Illinois, Mortgage Buydowns, Mortgage Modifications, FHA 2-1 Buydowns, 203ks, fha 203ks, 203k, Gil Kerbashian ) :: Permalink :: Trackbacks (16)

Mortgage Terminology

1031 Exchange - A tax free sale and purchase of investment property

Adjustable Rate Mortgage - a mortgage with a variable interest rate, which adjusts monthly, biannually, or annually.

Amortization - The simple way a loan is payed down over a period.

Annual Percentage Rate (APR) - the interest rate you pay on your mortgage in relation to fees, points, and other costs associated with the loan.

Appraisal - a value report that determines the value of your property based on a number of comparable sales factors.

Assumption - the act of assuming responsibility for the payment of a mortgage lien.

Balloon Mortgage - a mortgage with a large lump sum payment due at within a certain period during the loans life.

Biweekly Mortgage - A mortgage that is paid every two weeks.

Bridge Loan - A loan used for short term purposes.

Broker - a company who assists a borrower in find the best funding for a mortgage.

Buy Down - the act of securing a lower interest rate by paying the bank a lender additonal points or fees.

Caps - caps limit how much and how frequently an interest rate can change on an adjustable rate mortgage.

Closing - the final step in the loan process when loan documents are signed.

Conforming Loan - a loan that meets Fannie Mae and Freddie Mac guidelines for loan amount and guidelines.

203ks loan - a loan given to a homeowner during intervals of the building process which is due upon completion of the project.

 

Debt-to-Income Ratio - the ratio of monthly liabilities and housing expenses divided by the monthly gross income of the borrower.

Deed of Trust - a security instrument between the borrower and the lender,

Deferred Interest - the amount of interest added to the principal loan balance when a borrower pays the interest only portion of a loan.

Down Payment - an upfront payment to the seller of a property for a portion of the sales price.

Earnest Money - a deposit paid to the seller by the buyer as a pledge to complete a real estate transaction.

Equity - the value of a property less any and all existing liens.

Escrow - a third party and neutral intermediary who holds and allocates funds.

Federal Home Loan Mortgage Corporation FREDDIE MAC- one of the largest home loan financiers of conventional mortgages on the secondary market. Government owned.

Federal National Mortgage Corporation FANNIE MAE - same as Freddie Mac

FHA Loan - a mortgage insurance program that helps borrowers obtain money with the governments backing.

Hard Money Loan - high interest rate loans for non conventional financing.

Hazard Insurance - insurance which protects a property owner from damages.

Home Equity Line of Credit - an loan based on the equity of your home. Usually adjustable.

Impound Escrow Account - an account established by the issuing bank or lender to automatically pay a borrower’s property tax and homeowners insurance when payments are due.

Jumbo Loan - a loan amount above the conforming loan limits- fannie mae and freddie mac limits.

Lien - a claim against a property by the issuing bank or lender to secure repayment of a debt.

Loan Officer - someone that originates loan applications.

Loan-to-Value - the percentage of the property's value that is borrowed from a bank or lender.

Mortgage - a pledge of property to a creditor as security for an obligation or repayment of a debt.

Mortgage Insurance - required insurance on a mortgage if the down payment is less than twenty percent.

Mortgagee - the mortgage bank or lender.

Mortgagor - the mortgage borrower or homeowner.

Negative Amortization - when a mortgage payment received is below the interest or principle payment, the difference will be added onto the principal balance of the loan.

Note - a written promise to repay the mortgage plus interest.

Origination Fee - a percentage of the loan amount charged by the bank or broker for completing the loan process.

PITI - the total monthly housing expense, expressed as principal, interest, taxes, and insurance.

Points - stands for a percentage of the loan amount. 1% is 1 point.

Prepayment Penalty - if a loan is refinanced or repaid prior to a certain date as agreed upon in the loan documents a fee will be charged by the bank or lender.

Principal - the balance on the liens on a property.

Quitclaim Deed - a document by which a person either releases interest in a property or transfers interest to another person.

Real Estate Short Sales - when a house is sold for less than what is owed and the bank accepts.

Refinance - the act of replacing your existing loan with a new loan on the same property.

Reverse Mortgage - loans made to persons 62 and older with no payments required. Based on their current homes equity. Equity mining.

Right of Rescission - a law which allows a homeowner to rescind a contract to refinance their primary residence within three days of signing loan documents .

Second Mortgage - a mortgage that comes secondarily after the primary mortgage on a home has been established.

Seller Carryback - seller becomes a lender and carry's a mortgage for the buyer.

VA Mortgage - a home loan that is guaranteed by the veterans administration.

Posted by gilkerk ( FHA, Lender Gossip, Government Home Loans, Home Loan application, VA, Home Appraisals, Credit Scores, USDA Loan, Credit Repair, Tax Credits, Refinance, Downpayment, Homeownership, Housing Bottom, Closings, Crystal Lake Real Estate Agents, Agonquin Real Estate Agents, Cary Illinois Real Estate Agents, Mortgages, Mortgage Interest Rates, Treasury, Federal Reserve, Fannie Mae, Freddie Mac, Housing Recovery, TARP, FHA Appraisals, FHA Appraisers, HUD Owned Homes, Fannie Mae 105%, Fannie Mae Refi Plus, HUD Homes, HUD Foreclosures, McNeil Financial Group, Lake in the Hills Mortgage, McHenry Home Loans, Home State Bank IL, Harris Bank IL, realestateloans.com, mcneil financial group, (847) 458-8700, Integra Mortgage Schaumburg Illinois, Mortgage Buydowns, Mortgage Modifications, 2-1 buydown, FHA 2-1 Buydowns, Consumer Financial Protection Agency, Mortgage loan application, mortgage application, fnma 1003, HVCC, 203ks, fha 203ks, 203k, Gil Kerbashian ) :: Comments (0) :: Permalink :: Trackbacks (0)

Mortgage Disclosure Improvement Act

Mortgage Disclosure Improvement Act – 2 Months Early

by Richard Triplett, CMB

Effective on July 30, 2009, some of the provisions in the final rule for revisions to the Truth-in-Lending Act (TILA) become effective – 2 months earlier than the original date of October 1, 2009. The specific provisions effective by this “new” rule implement the Mortgage Disclosure Improvement Act (MDIA).

How did this happen? The final rule issued by the Federal Reserve Board on July 30, 2008 regarding the Truth-in-Lending Act and Home Ownership Equity Protection Act has an effective date of October 1, 2009. On July 30, 2008, Congress enacted the Housing and Economic Recovery Act which included provisions regarding MDIA. On October 3, 2008, Congress enacted the Emergency Economic Stabilization Act which amended MDIA. On May 8, 2009 the Federal Reserve Board approved final rules to implement the provisions of MDIA, as amended by the Emergency Economic Stabilization Act and applied an effective date of July 30, 2009. MDIA amends TILA, codifies early disclosure requirements and expands regulatory provisions. Confused yet?

The requirements that become effective for all loan applications received on or after July 30, 2009 are detailed below. These requirements are not applicable, and there have been no changes at this time to Home Equity Lines of Credit requirements. Additionally, MDIA requires additional language for adjustable-rate loans; however, this provision is still forthcoming by the Federal Reserve.

Initial Fee Restrictions – collection of fees from a mortgage applicant are limited to a reasonable credit report fee prior to the issuance of early disclosures. Although the industry was preparing for this requirement due to TILA changes effective October 1, and the RESPA final rule, it is being applied early based on MDIA. This is one of the fairly significant changes of MDIA that will require a change in policy and potentially revisions to advance fee disclosures for lenders and brokers.

Early Disclosures – though nothing is changed in terms of initial timing of the disclosure (3 business days from application), the issuance of the initial TIL Statement now extends to “any extension of credit secured by the dwelling of a consumer”. It has been my experience that for the most part, lenders and broker alike have generally been issuing the TIL Statement in accordance with this requirement already. However, there are new requirements in terms of disclosure timing versus consummation, covered below. Keep in mind that “business days” referenced for early disclosures is based on a general definition of business days, which is a day in which the

creditor’s offices are open to the public for carrying on substantially all of its business functions. The business day definition differs on the requirements for the waiting periods prior to consummation.

No Requirement to Complete Statement – early disclosures and subsequent disclosures must contain a clear notice stating “You are not required to complete this agreement merely because you have received these disclosures or signed a loan application”. This language is already required on high-cost loan disclosures, but now applies to any extension of credit secured by the dwelling of a consumer.

Seven Business Days Prior to Consummation – MDIA requires a seven business day waiting period prior to consummation from delivery or mailing of the TIL Statement to the consumer prior to consummation. This timing begins when a creditor mails or otherwise delivers the TIL Statement to the consumer. It is not based on receipt date or assumed receipt date by the consumer but rather mailing or delivery by the creditor. For purposes of both this seven-day waiting period and the three-day waiting period (indicated below), “business day” is defined as meaning all calendar days except Sundays and legal holidays. This is a significant change particularly for wholesale lenders. As a wholesale lender, I would recommend you review your processes and procedures to determine whether (based on the way you do business) the mortgage brokers in which you do business will or will not meet the definition of creditor under TILA.

Remember the timing starts from the issuance of the TIL Statement by the creditor. This is likewise a significant change due to MDIA requirements.

Three Business Days Prior to Consummation – Although creditors are already required to re-disclose the TIL Statement to a consumer when the APR is out of tolerance under TILA, it is typically done at the time of consummation. MDIA now changes this to a three business day time period prior to consummation using the definition of business day the same as the seven day waiting period. In this case, the consumer must receive the re-disclosed TIL Statement prior to consummation. Additionally, in this case, until you have receipt of a TIL Statement within this three-day time period prior to consummation by the consumer that is not out of tolerance, you must re-disclose until this requirement is met. This is also a significant change to the issuance of the TIL Statement.

Time Shares – for time share transactions, the early disclosure requirements apply but the seven-day and three-day waiting periods do not apply. The timing on early disclosures for time shares is applicable based on the receipt of the consumer’s application or before the credit is extended. Subsequent changes to terms beyond tolerance for time shares can be disclosed no later than consummation.

Waiver of Seven and Three-Day Waiting Periods – both the seven-day and three-day waiting periods regarding TIL Statement disclosure can be shortened or waived if the extension of credit is necessary to meet a bona fide personal financial emergency. If subsequent to this waiver the TIL Statement is again out of tolerance, the waiver is no longer effective. Once the TIL Statement is redisclosed again, if necessary, a waiver must be requested again. In order to request this waiver, a pre-printed form cannot be used. The consumer must prepare a dated written statement, signed by each consumer that will be legally obligated and entitled to receive the TIL Statement, detailing the specific emergency and specifies that request for waiver of the waiting period. This waiver should follow the regulatory requirements for waiving rescission rights and waiving a waiting period prior to consummation of a high cost loan under HOEPA.

The Board of the Federal Reserve has also indicated a future proposal containing model disclosures and clauses regarding closed-end credit.

Disclaimer: The information presented in this article represents the opinion of the author and not that of AllRegs. This article is not meant to be nor should it be construed as advice of legal counsel. The applicability of the information contained herein will vary based on the nature of each lending institution's business, under what law it was created, and its loan products and procedures. Readers are strongly urged to consult with their legal counsel and/or contact local counsel as appropriate in the various states and jurisdictions to determine the applicability of the materials contained herein to the specific facts and circumstances of each organization's programs and products and to identify other law applicable to its business operations. The information contained herein was not reviewed or approved by counsel in the respective jurisdictions.

Read Previous articles in our Article Archive.

Above article written by Richard Triplett, CMB  ALLREGS

Posted by gilkerk ( Government Home Loans, Home Loan application, VA, USDA Loan, Credit Repair, Downpayment, Homeownership, Crystal Lake Real Estate Agents, Agonquin Real Estate Agents, Cary Illinois Real Estate Agents, Mortgages, Treasury, Federal Reserve, Fannie Mae, Freddie Mac, Housing Recovery, Lake in the Hills Mortgage, McHenry Home Loans, realestateloans.com, (847) 458-8700, Integra Mortgage Schaumburg Illinois, Consumer Financial Protection Agency, Mortgage loan application, HVCC ) :: Permalink :: Trackbacks (40)

203ks Buy a Home and Rehab All in One

203ks (SIMPLE) Yes, for your clients..........

203ks MADE SIMPLE by Gil

FHA loans were just not utilized over the past 10 or so years because of the FHA Maximum Mortgage limits  But now that the limits have been increased and the prices have decreased, FHA loans have become the most utilized loan in recent months.  Because it was not a popluar loan you would be amazed at how many lenders brokers do not know what they are doing.  Especially when it comes to the 203ks loan. 

Realtors and borrowers have been given so much mis-information it makes me cringe. Apparently other loan officers have told the client that 203k loans were no longer being done (Gee, you think it was after realizing that they had no idea what they were doing?) and they tried to flip them into another loan. This was after telling clients that their loan amount would be for the contract price and the extra money would just be separate and sit in an impound account to be disbursed over the next 6 months. 

So what is a 203k loan and why use one?

When a buyer wants to buy a home that needs repairs utilizing FHA financing, normally the repairs would have to be completed prior to the close of escrow. The repairs would normally fall on the responsiblity of the seller.  With so many foreclosures in today's market, the bank is usually the seller. Many times the home is in need of repair is listed "as is".  Which in the past would require a cash buyer or conventional financing.  This is another reason that people in the business decided to shy away from FHA loans. I believe it was pure ignorance of the programs that were available by the brokers and the realtors couldn't properly prepare their seller for what to expect that gave FHA loans a bad name. 

 Details please..

-Down payment is based on the sale price PLUS the final cost of the repairs at 3.5% downpayment of total loan amount:

Sale price is 200,000 (DO not calculate 3.5% on this)  PLUS 30,000 in repairs/costs (which includes certain costs and reserves the lender will require) 230,000 x 3.5% =  Down payment

The fee charged for this loan can range anywhere between $ 400 to $1200 depending on the repairs required.  Please check with your loan consultant prior to scheduling your appointment.

www.realestateloans.com/203ks.ppt

-Buyer will obtain estimates from several licensed contractors for the work to be completed depending on how extensive the repairs.

Three estimates are recommended for each contractor but not necessary.  The buyer can act as their own general contractor only if experienced and licensed.  (FHA says experienced, but most investors require the buyer to be licensed)  The contractors must provide documentation to be approved by the lender prior to approval.

Once the borrower is approved and the contractor/reparis are approved we take the loan to closing.

* Closing occurs, and the work begins within 30 days of closing/funding. (This is when your mortgage payments start since this is when you started borrowing the money)

* Disbursments are made throughout the following 3 months from the escrow account 

Remember you paid the seller for the price of the home, and then you borrowed an additional amount which is sitting in an escrow account to pay the contractors (your total loan is the total amount you borrowed)

Once the last disbursement is made and the final inspection showing COMPLETED AS PER THE CONTRACT........you are done! Simple as 1 2 3  - okay maybe not, but that's why having an experienced lender on your side is crucial!

There are specific properties and repair requirements for this type of loan, so please call me for specific details if this sounds like the right loan for your new home.  Happy Rehabbing!

Posted by gilkerk ( FHA, Government Home Loans, Crystal Lake Real Estate Agents, Agonquin Real Estate Agents, Cary Illinois Real Estate Agents, FHA Appraisals, FHA Appraisers, HUD Owned Homes, HUD Homes, HUD Foreclosures, McNeil Financial Group, Lake in the Hills Mortgage, McHenry Home Loans, realestateloans.com, (847) 458-8700, Integra Mortgage Schaumburg Illinois, 2-1 buydown, FHA 2-1 Buydowns, 203ks, fha 203ks, 203k, Gil Kerbashian ) :: Permalink :: Trackbacks (0)

Northwest Young Scholars Foundation : Spelling Bee

 
Crystal Lake IL:  The Northwest Young Scholars Foundation is coordinating a Northwest Suburbs Regional Spelling Bee for 7th and 8th grade students. This wonderful family and community event is scheduled for the first quarter of 2010.  

We at the NWYSF expect to promote this not-for-profit event and its sponsors to approximately 20,000 community leaders, parents and children through internet and print.  We would like your organization to become a sponsor of this very unique and worthwhile event. Families and teachers from all over the area will have an opportunity for their 7th and 8th grade student’s to compete and win an educational scholarship.

It’s for the kids but we want to bring value to our sponsors too. You, as a scholarship and event sponsor, will be highlighted on all literature and advertising for this event. But it’s more than advertising: When you attach your name to a community event such as this you will be building incredible Goodwill.

All of our staff and support personnel will be volunteering their efforts to this event so none of your sponsorship dollars will go to administration expenses. 100% of your sponsorship will be directed to the students solely.

Your contribution will positively impact our local children while promoting you as a community leader and a thoughtful advertiser. Because we are a full volunteer organization, the educational sponsorships are very affordable with three levels to choose from: Platinum sponsorship is $1000, Gold $500 and Silver $250.

Please take a moment to consider this worthwhile event and call us today to secure a level. Remember, all your dollars go to the children. We need your support today so that we can start executing the remainder of the events activities.

Gil Kerbashian and Donald Brewer

Directors 

Gil Kerbashian (847) 873-7295

Don Brewer (847) 217-7126

We are currently seeking Prounouncers and other volunteers to help us with this wonderful project.

 

Posted by gilkerk ( General, Crystal Lake Real Estate Agents, Agonquin Real Estate Agents, Cary Illinois Real Estate Agents, McNeil Financial Group, Lake in the Hills Mortgage, McHenry Home Loans, realestateloans.com, mcneil financial group, (847) 458-8700, Integra Mortgage Schaumburg Illinois, Donald Brewer, Gil Kerbashian, Crystal Lake IL Teachers, Northwest Suburbs Il, Northwest Young Scholars Foundation ) :: Permalink :: Trackbacks (41)

203ks

203Ks : FHA Streamline Rehabilitation Loan by Gil Kerbashian

HUD is offering an FHA streamlined mortgage, called the “Streamline K" Limited Repair Program that

permits home buyers to finance up to an additional $35,000 into their mortgage to improve or upgrade

their home before move-in.

Home buyers can quickly and easily pay for property repairs or improvements, such as those identified by a home inspector or FHA appraiser. All basic FHA underwriting guides apply as they do for regular FHA loans in regards to credit, income & asset documentation, etc.  This is a perfect product for foreclosures or distressed properties that need repaires. 

Repairs can be made for lots of items including upgrades to the home such as:

  • Repair/Replacement of roofs, gutters and downspouts
  • Repair/Replacement/upgrade of existing HVAC systems
  • Repair/Replacement/upgrade of plumbing and electrical systems
  • Repair/Replacement of flooring
  • Minor remodeling, such as kitchens, which does not involve structural repairs
  • Painting, both exterior and interior
  • Weatherization, including storm windows and doors, insulation, weather stripping, etc.
  • Purchase and installation of appliances, including free-standing ranges, refrigerators, washers/dryers, dishwashers and microwave ovens
  • Accessibility improvements for persons with disabilities
  • Lead-based paint stabilization or abatement of lead-based paint hazards
  • Repair/replace/add exterior decks, patios, porches
  • Basement finishing and remodeling, which does not involve structural repairs
  • Basement waterproofing
  • Window and door replacements and exterior wall re-siding
  • Septic system and/or well repair or replacement

For a more detailed reference on this program click the link below.

203Ks Quick Reference Guide.pdf

Posted by gilkerk ( FHA, Government Home Loans, Crystal Lake Real Estate Agents, Agonquin Real Estate Agents, Cary Illinois Real Estate Agents, Mortgages, FHA Appraisals, FHA Appraisers, HUD Owned Homes, HUD Homes, HUD Foreclosures, McNeil Financial Group, Lake in the Hills Mortgage, McHenry Home Loans, realestateloans.com, mcneil financial group, (847) 458-8700, Integra Mortgage Schaumburg Illinois, FHA 2-1 Buydowns, 203ks, fha 203ks, 203k, Gil Kerbashian ) :: Comments (0) :: Permalink :: Trackbacks (0)