The Negative Equity Carryover Model: A Practical and Effective Solution to Our Housing Crisis and the Epidemic of Negative Home Equity
Negative home equity for America’s Homeowners has become an epidemic problem. Nationwide, homeowners are chained to their homes unable to sell due to the shackles of negative equity. This lack of mobility comes at a cost to society and at a time when the public’s need for mobility is at its greatest.
Industry needs this mobility to balance labor requirements, labor needs this mobility to find and create job opportunities, families need mobility to consolidate households and care for aging relatives and others to simply downsize into homes that they can manage and afford financially.
Banks are resistant to negotiate short sale settlements for the fear that the losses on these mortgages will spiral out of control and bring the banks to their knees. Many borrowers are choosing to strategically default in an effort to break the chains of negative equity in order to get on with their lives.
Negative equity, short sales and foreclosures have become a lose-lose situation for both homeowners and lenders.
The Federal Government needs to create legislation making it practical and feasible for banks to offer a safe and equitable alternative.
The “Negative Equity Carryover Model” proposes that negative equity be carried forward to the purchase of a subsequent home purchase or as a personal loan to the homeowner after the property sale.
Homeowners and banks won’t need to negotiate the loss of equity as is currently being done through short sales and foreclosures. Negative equity can be “carried” by a homeowner as a second lien into the purchase of another home or onto a credit report as a personal line of credit. The Model suggests that rather than write the loss off at time of sale through a short sale or foreclosure, the negative equity can be carried into the future as an independent debt/lien and slowly forgiven over an amortized timeframe. The homeowner’s credit would be saved and we as a nation could avoid the wholesale destruction and lockout of a future homeownership class due to damaged credit. Lenders could amortize the negative equity over years while still maintaining some lien position just in case homeownership equity returned.
Gil Kerbashian (847) 873-7295
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gilkerk
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Government Home Loans,
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ARC Loans
The term ARC Loans is another name for a regular mortgage refinance. The difference is that with ARC Loans the fee's for the refinance are usually buried in the rate, which means a borrower will usually pay a higher rate in order to defer loan fees. Paperwork is still required and if the borrower doesn't qualify for a streamline, as most do not due to declining value markets, a new appraisal will have to be ordered.
ARC loans can be executed by any mortgage lender or broker. for the purposes of arranging a plan to reduce a borrowers mortgage interest rate at specific intervals.
ARC stands for Automatic Rate Cut.
This is not a Fannie Mae, Freddie Mac nor an FHA designated program. This is not a government program nor an industry wide secondary market type regime. This is a marketing effort to repackage refinances into an easy to remember package or hook.
Each time a homeowners mortgage rate drops by a .25% as the rate market improves, the or a lender will notify the borrowers that the rate can be refinanced into a lower rate. It's really more a reminder system than anything else and its most effective with loan amounts greater that $150,000. Trying to do an ARC Loan with smaller loan amounts is not profitable for the lender and usually not all to attractive for the lender to execute.
Some lenders have set up automatic triggers for each of their loans in their system to let the lender and the borrower know that it may be time to look at refinancing.
If a borrower is saving $150 a month, a refinance may be worth looking at. The con's are that the loan term will restart and the borrower will lose the months or years they've already paid into the loan.
Most borrowers are looking for a convenient way to save money on their monthly mortgage payment, and a way to refinance that isn't as intense as most big banks make it. Borrowers should look for someone that is local and can offer the service they need.
Borrowers shouldn't fool themselves into thinking that a lender will lend 100 of 1000's of dollars on a property that they haven't re-appraised or lend to a borrower that the bank hasn't verified income or assets on.
There's just too much risk in lending today to think that easy money or easy qualifications is a smart thing to fool around with.
Who Owns My Loan?
Here are two links and phone numbers that you might find useful. Many
borrowers are getting the run-around when they call their mortgage
servicer to find out if their loan is a "Fannie or Freddie" loan and if
the loan might qualify for a loan modification. Call or email the below
numbers to Fannie Mae and Freddie Mac to find out if your loan is "held"
by the government sponsored loan agencies.
Many of us in the mortgage brokerage business understand borrower
frustration, we've been dealing with it for years when trying to get
mortgages approved.
Does
Freddie Mac have my mortgage online request form 1-800-FREDDIE (8am
to 8pm EST)
Does
Fannie Mae have my mortgage online request form 1-800-7FANNIE (8am
to 8pm EST)
Fannie Mae's New Loan Quality Initiative
Fannie Mae's Loan Quality Initiative
Fannie Mae's New Loan Quality Initiative, effective july 1, 2010... How does it impact you?
Lenders and Realtors can expect increased quality control (QC) measures on the pre-closing (and post-closing) sides of loan transactions. The big news here is the pre-funding QC and how it will impact purchase transactions timelines. In an effort to increase loan quality and decrease non-prime borrowers, Fannie has introduced additional review requirements.
I have in the last 60 days been experiencing a higher level of "nuisance conditions" which tells me that the QC process has already commenced with some lenders prior to the proposed rollout date.
The proposed changes:
1. Two different underwrites on not all but many files
2. Resolution of defects prior to closing with a possible second set of borrower/property conditions before the loan funds
3. Numerous back office reporting and management issues that LO and Realtors may feel but won't directly see
And don't forget about the new credit report pulling change.. new credit reports to be pulled on all borrowers before closing.. this starts JUNE 1.
Expect delays. Be mindful that you may see a 2nd set of closing condition prior to funding.
DON'T OVER SIMPLIFY THE LOAN PROCESS WITH ANY OF YOUR BUYERS/BORROWERS. TELL THEM THE TRUTH AND ENCOURAGE A REALISTIC COMMITMENT TO THE PROCESS.
Do I Have a Fannie Mae or Freddie Mac Mortgage?
Does Freddie Mac have my mortgage online request form 1-800-FREDDIE (8am to 8pm EST)
Does Fannie Mae have my mortgage online request form 1-800-7FANNIE (8am to 8pm EST)
Freddie Mac Important Internet Links
Freddie Mac Email Subscriptions
http://www.freddiemac.com/news/alerts/newscenteremail.html
Choose the Freddie Mac Bulletins, Announcements
and Publications you would like to receive notifications
of via email
Freddie Mac Forms & Guide Access
http://www.freddiemac.com/sell/guide/
Access Freddie’s Single Family Selling & Servicing
Guides as well as forms
Freddie Mac Learning Center
http://www.freddiemac.com/learn/
This website includes links to Quick Reference
Summary Charts on LP, Condominiums, Residency
and Citizenship, Various products, LTV/CLTV/HLTVs,
Refinances, New Construction, Income/Assets,
Collateral., Credit, and Super Conforming- just to name
a few!
Single Family Mortgage Products Page
http://www.freddiemac.com/singlefamily/mortgages/
This website includes links to Product Summaries,
Overviews, Marketing Materials, Affordable Income &
Property Eligibility Lookup Tool, FAQs, Links to live
product training opportunities and much more!
Training Events Page
http://www.freddiemac.com/learn/edu/train/
This page provides links to Live and Web Training
Events on LP, Underwriting, Product, Selling, Servicing
and Delivery-Related topics.
Loan Prospector Main Page
http://www.loanprospector.com/
This is the home page for all things LP! Features,
Benefits, documentation requirements, products, credit
report vendors, LOS vendors, news & highlights, best
practices, as well as login access to LP itself!
Loan Prospector Functionality Page
http://www.freddiemac.com/learn/uw/
This page provides resources and training associated
with documentation and underwriting-related topics
Loan Prospector Helpful Tips & Best Practices
http://www.loanprospector.com/getthemost/bp.html
This page provides links to guides that are very
detailed and well-written for originators, processors,
underwriters and quality control functions within an
organization. These are great reads for everyone!
Loan Prospector Training Page
http://www.loanprospector.com/learn/index.html
This page provides links to recorded training sessions
divided out by topic and category. These short
sessions are excellent educational resources that new
and even experienced LP users can benefit from!
Fraud & Quality Control
http://www.freddiemac.com/learn/uw/qc.html
This page provides links to Quick References
regarding predatory lending, property flips, appraisal
underwriting, documenting citizenship and residency,
rental income, standard income, Freddie’s
Exclusionary List, and standard quality control best
practices
Freddie Mac Homebuyer/Homeownership Page
http://www.freddiemac.com/corporate/buying_and_owning.html
This page includes various resources, tools and
information for both homebuyers and homeowners
Freddie Mac Loan Look-Up
https://ww3.freddiemac.com/corporate/
Determine if Freddie Mac currently services your own
or your borrower’s existing mortgage
Freddie Mac Marketing Kits & Materials
http://www.freddiemac.com/singlefamily/kits.html
Freddie offers excellent marketing materials in the form
of fillable flyers, mailers, post cards, door hangers,
brochures, and stuffers and some are even offered in
languages in addition to English! These are some of
the most professional-looking materials out there! Very
easy to sign up for access and easy to use!
Posted by
gilkerk
(
FHA,
Home Loan application,
Home Appraisals,
Refinance,
Downpayment,
Homeownership,
Crystal Lake Real Estate Agents,
Agonquin Real Estate Agents,
Cary Illinois Real Estate Agents,
Mortgages,
Mortgage Interest Rates,
Fannie Mae,
Freddie Mac,
FHA Appraisals,
FHA Appraisers,
HUD Owned Homes,
Fannie Mae 105%,
Fannie Mae Refi Plus,
HUD Homes,
HUD Foreclosures,
Lake in the Hills Mortgage,
McHenry Home Loans,
realestateloans.com,
Mortgage Buydowns,
2-1 buydown,
FHA 2-1 Buydowns,
Mortgage loan application,
mortgage application,
fnma 1003,
HVCC,
203ks,
fha 203ks,
203k,
Gil Kerbashian,
Home Affordable 125%,
FHA Gift Letter,
Condominiums )
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Loan Program Changes
Changes phasing in or already here without much fanfare:
Debt to Income Ratio: Many FHA lenders will soon be or have started in the last few weeks introducing their own maximum debt to income ratios limits. This DTI limit resembles the same one Fannie/Freddie implemented in December. Please double check your buyer pre-approvals.
Where once it was ok to have a borrower with a max total debt to income ratio of 55-60%. Some lenders have compressed that number to as low as 45%. Some of the seasoned Realtors will remember the 28/36 ratio limits of the 90's. 45 is still more tolerant than the old 36.
FHA lenders were relying on findings from their "FHA Total Score Card" system to determine what a specific borrowers maximum approvable debt to income ratio is after running the borrowers credit data through the FHA automated system (aka FHA Total Score Card)- this is no longer the standard. Many lenders have now created their own guidelines (FHA overlays) and are disregarding what FHA tolerates, resulting in lender specific tighter tolerances.
The impetus for the above change may be stemming from an important date in April 2010. HUD will soon be requiring all HUD/FHA approved lenders to maintain an increased minimum "net worth". It is estimated that 60% of the HUD approved lenders across the country can't meet the new net worth test. Other lenders that are on the fringe may be tightening their guidelines to reduce loan buybacks in order to maintain their net worth capacity so that they can pass the test.
Many of the lenders that have reduced their max DTI tolerance haven't promoted their specific change in fear that notification would drive business away to lenders with higher tolerances. Be mindful of debt to income ratios when receiving pre-approval letters.
See my blog at www.gilkerk.realestateloans.com to learn more about Debt to Income Ratio's.
FHA HVCC: Feb 15. Appraisals for all FHA case numbers assigned to a property transaction on or after this day will require the appraisal to be ordered through an Appraisal Management Company (AMC). Same as conventional loans, FHA will require a neutral third party to "manage" the appraisal order process.
PURCHASE TAX INCENTIVE TIMELINE WARNING: April 30th is the last day for inked contracts. If you now have buyers/borrowers that are still waiting to make an offer, please let them know that they are shooting themselves in the foot. As the deadline nears, underwriting turn times will slow down substantially. If your buyers property shows an appraisal or inspection concern in the last few weeks of April, what time does it give you or the home buyer to correct the deficiency or start looking for another property? DON'T PROCRASTINATE!
CONDO COMPLEXES: The new FHA guidelines on condos has been revised and is now being implemented. Please pay close attention to one of the provisions -
the new 15% rule. No more than 15% of the unit owners in a complex can be delinquent with their association dues. In this foreclosure and shortsale environment, you will want to ask the association delinquency question of the listing agent or association manager prior to paying for a property inspection or appraisal.
IHDA: Down payment assistance program seminar at McHenry County Association of Realtors open to all. Feb 24th 10am. Call now to reserve your seat. Seating is limited. MCHCAR: 815.893.5100
Please call me at (847) 873-7295 to discuss nuances with the above information. Here to help you get homes financed.
Posted by
gilkerk
(
FHA,
Crystal Lake Real Estate Agents,
Agonquin Real Estate Agents,
Cary Illinois Real Estate Agents,
Mortgages,
Fannie Mae,
Freddie Mac,
FHA Appraisals,
FHA Appraisers,
HUD Owned Homes,
HUD Homes,
HUD Foreclosures,
Lake in the Hills Mortgage,
McHenry Home Loans,
realestateloans.com,
2-1 buydown,
FHA 2-1 Buydowns,
203ks,
fha 203ks,
203k,
Gil Kerbashian,
FHA Gift Letter )
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Home Buyer Fliers
Below is a list of my top programs:
Posted by
gilkerk
(
FHA,
Crystal Lake Real Estate Agents,
Agonquin Real Estate Agents,
Cary Illinois Real Estate Agents,
Mortgages,
Fannie Mae,
Freddie Mac,
FHA Appraisals,
FHA Appraisers,
HUD Owned Homes,
HUD Homes,
HUD Foreclosures,
Lake in the Hills Mortgage,
McHenry Home Loans,
realestateloans.com,
2-1 buydown,
FHA 2-1 Buydowns,
203ks,
fha 203ks,
203k,
Gil Kerbashian,
FHA Gift Letter )
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Understand Home Buyer Closing Costs
Understanding Home Buyer Closing Costs:
Processing Fee Estimate: $350
This fee is charged by us to pre-approve, pre-underwrite and make sure the home buyers loan fits program guidelines prior to us submitting the loan to an underwriting unit for full approval. We will review all documents, submit the package, insure compliance, attend closing and maintain support all the way to closing. Fee paid directly to us at closing. This fee also includes credit reports, approval certificates and document gathering expenses.
Discount Points to Buydown Rate:
Normally not charged unless a buyer requests or needs to buydown an interest rate in order to qualify for the loan.
Appraisal Fee Paid to Independent Appraisal Company Estimate: $275-$450 Upfront Cost
This fee is paid directly to an independent appraiser to determine the maket value of the property. The appraiser is chosen by a neutral third party and you must pay this fee at the start of the loan process once a property is determined.
Underwriting Fee Paid to Independent Undewriting Unit Estimate: $600-$800
This fee is paid by the home buyer directly to the loan underwriting entity at loan closing. Once we have pre-underwritten the loan and we have determined the best lender able to actually fund the loan, we submit it to them for review, approval, legal documents and funding.
Homeowners Insurance Paid to Your Insurance Company Estimate: $300-$600 Upfront Cost
The home buyer will contact their personal insurance provider two weeks prior to the closing date to determine the cost of a homeowners insurance policy. This will be paid in advance of closing directly by the home buyer to the company they have picked. A one year policy must be paid for in advance of closing. If the property is in a flood zone, the home buyer will also be required to get flood insurance also.
Mortgage Interest Payment at Closing Estimate: Depends on closing date.
Depending on the day of close, the home buyer will pay for the days of homeownership from the day of closing to the last day of the month. Example: if we close on the 15th of the month home buyer will pay from the 15th to the last day of the month for each day they own the home.
Tax Escrow Paid Directly to Lender Estimated: Monthly property taxes times two. Most loans require borrowers to have the lender pay the property taxes on behalf of the buyer. Unless the home buyers are putting in 10-20% downpayment, expect to "escrow" for taxes. Lenders typically require a 2 month cushion placed into an escrow account. Ex: $500x2=$1000
Homeowners Insurance Escrow Paid Directly to Lender Estimated: $60-$120
Like taxes above, lenders will want to pay for the homeowners insurance when it comes due. Most lenders will require a 2 month cushion placed into the escrow account at closing.
Settlement Costs- Closing Attorney, Title Insurance, Closing Company, County Recording
Fees Paid Directly to Providers Pre-Chosen by Others Estimate: $1500-$2500
These are standard fees required to purchase a home. Refinances are much lower. These fees are not chosen by us but rather chosen by the sellers attorney.
Home Purchase Transfer Tax Stamps Estimated: Call the city to see if buyers pay these
Most common in the city of Chicago and a few others. Not all cities or villages charge buyers a transfer stamp tax. Usually a sellers expense. Can be expensive for buyers if they are charged.
**** In a home purchase transaction the home buyer may have the Seller of the Property pay for some, most, or possibly all of the above expenses. This is called a "Seller Paid Closing Contribution". This is highly recommended if the home buyer is short on funds to close or currently only has the downpayment and no other funds available. Seller can pay up to 3% of the purchase price towards closing costs.
If the Seller picks up yclosing costs, any monies paid up front other than the home inspection (appraisal and homeowners insurance up front) will be applied to the downpayment commitment.
Please call me at (847) 873-7295 to discuss nuances. Here to help you get homes financed.
Posted by
gilkerk
(
FHA,
Government Home Loans,
Homeownership,
Crystal Lake Real Estate Agents,
Agonquin Real Estate Agents,
Cary Illinois Real Estate Agents,
Mortgages,
Mortgage Interest Rates,
Fannie Mae,
Freddie Mac,
FHA Appraisals,
FHA Appraisers,
HUD Owned Homes,
HUD Homes,
HUD Foreclosures,
Lake in the Hills Mortgage,
McHenry Home Loans,
realestateloans.com,
2-1 buydown,
FHA 2-1 Buydowns,
203ks,
fha 203ks,
203k,
Gil Kerbashian,
FHA Gift Letter )
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FHA Foreclosures Rising
Rising FHA default rate foreshadows a crush of foreclosures
|
David H. Stevens (Andrew Harrer - Bloomberg)
|
Washington Post Staff Writer
Tuesday, February 2, 2010
The share of borrowers who are falling seriously behind on loans backed by the Federal Housing Administration jumped by more than a third in the past year, foreshadowing a crush of foreclosures that could further buffet an agency vital to the housing market's recovery.
About 9.1 percent of FHA borrowers had missed at least three payments as of December, up from 6.5 percent a year ago, the agency's figures show.
Although the FHA's default rate has been climbing for months and eating into the agency's cash, the latest figures show that the FHA's woes are getting worse even as the housing market shows signs of improvement. The problems are rooted in FHA mortgages made in 2007 and 2008. Those loans are now maturing into their worst years because failures most often occur two to three years after a mortgage is made.
If the trend continues and the FHA's cash reserves are exhausted, the federal government would automatically use taxpayer money to cover the losses -- a first for the agency, which has always used the fees it charges borrowers to pay for its losses.
As these loans from 2007 and 2008 go bad and clear off of the FHA's books, agency officials said, losses are expected to taper off, aided by the housing market's anticipated recovery and an influx of more creditworthy borrowers, who have flocked to the FHA's home-buying program in the past year.
Agency officials said they have cracked down on poorly performing lenders and announced higher qualifying fees for borrowers. On Monday, the agency projected that the fees should generate $5.8 billion in fiscal 2011, up from $2 billion this year. That would fatten the FHA's cash cushion, used to cover unexpected losses.
Posted by
gilkerk
(
General,
FHA,
Government Home Loans,
Home Loan application,
VA,
Home Appraisals,
Downpayment,
Homeownership,
Closings,
Crystal Lake Real Estate Agents,
Agonquin Real Estate Agents,
Cary Illinois Real Estate Agents,
Mortgage Interest Rates,
Fannie Mae,
Freddie Mac,
FHA Appraisals,
FHA Appraisers,
HUD Owned Homes,
HUD Homes,
HUD Foreclosures,
Lake in the Hills Mortgage,
McHenry Home Loans,
realestateloans.com,
FHA Gift Letter,
(847) 794-5000,
Condominiums )
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Cash / Mattress Money is a Deal Killer
- Cash / Mattress Money is a Deal Killer-
AHEAD OF THE CURVE ARTICLE BELOW
Below is a list of my top programs that should be in every agents resource
folder:
-FHA closed on time: [http://www.realestateloans.com/fhadonewell.pdf]
[http://www.realestateloans.com/fhadonewell.pdf]
www.realestateloans.com/fhadonewell.pdf
-100% Rural Development: [http://www.realestateloans.com/usda.pdf]
[http://www.realestateloans.com/usda.pdf] www.realestateloans.com/usda.pdf
-$100 down for HUD owned homes:
[http://www.realestateloans.com/100hudhome.pdf]
[http://www.realestateloans.com/100hudhome.pdf]
www.realestateloans.com/100hudhome.pdf
-Deferred maintenance homes:
[http://www.realestateloans.com/uglyhomes.pdf]
[http://www.realestateloans.com/uglyhomes.pdf]
www.realestateloans.com/uglyhomes.pdf
-100% pre-approval to closing ratio:
[http://www.realestateloans.com/concierge.pdf]
[http://www.realestateloans.com/concierge.pdf]
www.realestateloans.com/concierge.pdf
-VA 100% financing: [http://www.realestateloans.com/va.pdf]
www.realestateloans.com/va.pdf
-Home Buyer job protection mortgage:
[http://www.realestateloans.com/rainydays.pdf]
www.realestateloans.com/rainydays.pdf
CASH IS KILLING DEALS:
I recently had a borrower call me and state she deposited $6000 into her
bank account from an unsecured loan. Without telling the Realtor or myself
she used this money for the contract deposit. Some form of outside monies
has been interjected into four of the last ten deals I've done and the
borrowers did it after reading
[http://gilkerk.realestateloans.com/condominiums/2009/05/07/i-need-to-make-a-home-loan-application-help.html]
my home purchase introduction link which clearly states that cash and large
deposits should be avoided.
Why isn't cash allowed into a transaction? It's the borrowers money right?
Several obvious reasons: Patriot Act/Banking Laws, Drug Money, Cash
Laundering, Straw Buyer considerations, Under the Table Seller Concessions,
Realtor or Loan Office contribution, Unsecured/unreported loan, Gift from
an unacceptable source, etc..
Loan officers and Realtors should never allow or encourage customers to
deposit or use cash for ANY part of the transaction nor turn a blind eye if
they know a client is borrowing money from credit cards or personal loans.
This type of mistake will certainly cause problems and create needless
tension. Now more than ever, loan files are being looked at with a fine
tooth comb. More and more careful verifications are being done a day before
closing- be prepared and don't let your deal die for dumb reasons.
Remember, FHA case numbers follow these loans. If one underwriter declines
a loan, the disposition will follow that loan. Realtors and Loan Officers
must work closely to prevent problems from day one.
Please call me at (847) 873-7295 to discuss nuances. Here to help you get
homes financed.
Is your loan officer less responsive than you'd like? Cut yourself free
from bad service, poor communication and start enjoying incredible support
today.
Could your team use an updated presentation to get agents up-to-speed on
loan program changes? Lending is a huge part of transactional business,
consider scheduling my lunch and learn for your team.
Gil Kerbashian
Mortgage Lending Since 1997
Gil's Loan Answer Hotline: (847) 873-7295
Posted by
gilkerk
(
General,
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,
Donald Brewer,
Gil Kerbashian,
Crystal Lake IL Teachers,
Northwest Suburbs Il,
Northwest Young Scholars Foundation,
Home Affordable 125%,
FHA Gift Letter,
(847) 794-5000,
OFAC,
Condominiums,
Allied Mortgage Capital Corp,
Allied Mortgage )
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FANNIE MAE'S NEW DEBT TO INCOME RATIO'S
Ahead of the Curve
For Active Real Estate Marketing Professionals...
Fannie Mae has implemented the new debt to income ratio for borrowers in conventional loans: Starting December 1st or thereabouts for most lenders, conventional loan total debt to income ratio's have been brought down to 45%. Up to this point the average TDTI has averaged in the low 50's.
NOW: 45% is the guideline for borrowers that put down 20% or more. For conventional loans with less than 20% down the ratio is restricted to 41%. Please see my above article on debt to income ratios for clarification of what a DTI is.
Why is this change important to real estate professionals? You have pending offers, pre-approvals and deals in the pipeline that currently have ratios above 45%. These deal may have problems closing. Take a moment to inquire about these offers or pre-approvals and make sure the home buyers will be able to close.
Please call me at (847) 873-7295 to discuss nuances. Here to help you get homes financed.
Posted by
gilkerk
(
General,
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,
Donald Brewer,
Gil Kerbashian,
Crystal Lake IL Teachers,
Northwest Suburbs Il,
Northwest Young Scholars Foundation,
Home Affordable 125%,
FHA Gift Letter,
(847) 794-5000,
OFAC,
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FHA Discount Points
Discount Points
Discount points fill the gap between interest rates and allowing the lender to make the loan at a lower rate. A lender has a choice of making a loan at 7 percent or at 7½ percent interest rate. Points allow lenders to lower rates while maintaining their profit margins. One point is equal to 1 percent of the amount of a loan. For a $150,000 mortgage loan, one point would be equal to $1,500.
The value of points can vary depending on current financial markets, lenders generally consider that it takes roughly 1 point to lower a loan's interest rate by .25 percent.
If the lender offers an option of paying points for a certain rate of interest, the borrower must consider several important factors. One of the main issues to regard is the length of time that the borrower will own the property and keep the mortgage. At some point in time during the loan, the points will have paid for themselves and begin to save the homebuyer money.
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USDA Homeownership Website Links
Subscribe to receive Single Family Housing News for GUS & GRH: http://www.rdlist.sc.egov.usda.gov/listserv/mainservlet
USDA Rural Housing Home Page: http://www.rurdev.usda.gov/RHS/
Rural Development Contacts Page: http://www.rurdev.usda.gov/RHS/Admin/contact.htm
Rural Development Regulations Page: http://www.rurdev.usda.gov/regs/
Rural Development FAQ Page: http://www.rurdev.usda.gov/rd/faqs.html
Rural Development Income & Property Eligibility Site: http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do
Single Family Housing Guaranteed Loan Income Limits: http://www.rurdev.usda.gov/rhs/sfh/sfh%20guaranteed%20loan%20income%20limits.htm
Loan Application Package Checklist: http://www.rurdev.usda.gov/regs/an/an4470.pdf
Rural Development Regulations: http://www.rurdev.usda.gov/regs/
Rural Housing Origination Handbook 1980-D: http://www.rurdev.usda.gov/regs/regs/pdf/1980d.pdf
GUS Lender User Guide 2008: https://usdalinc.sc.egov.usda.gov/docs/rd/sfh/gus/lender/GUSLenderUserGuide.pdf
GUS Login Page: https://pws.sc.egov.usda.gov/login/login.aspx?TYPE=33554433&REALMOID=06-f8405ea7-471f-474d-8a4e-731f76f1e536&GUID=&SMAUTHREASON=0&METHOD=GET&SMAGENTNAME=-SM-S3%2fpukYCkOnlZ%2feImVktFvcBZTmcxsBEbQyvAIf2sN6XculadBu%2f5WF4TmWxHg2x&TARGET=-SM-HTTPS%3a%2f%2fgus.sc.egov.usda.gov%2faus%2findex.jsp%3fcallingPath%3dusdalinc.sc.egov.usda.gov%2fRHShome.do
Administrative Notices for Loan Origination and Underwriting: http://www.rurdev.usda.gov/wi/programs/rhs/sfhg/handbook/originating/ans.htm
USDA Rural Development Forms Library: http://www.rurdev.usda.gov/regs/formstoc.html
Rural Development State Office/Service Center Locator: http://www.rurdev.usda.gov/recd_map.html
USDA Live WebEx Training Schedule: https://rurdev.webex.com/mw0305l/mywebex/default.do?siteurl=rurdev&service=7
USDA LINC Training and Resource Library: https://usdalinc.sc.egov.usda.gov/USDALincTrainingResourceLib.do
Guaranteed Rural Housing Consumer Marketing Brochure: http://www.rurdev.usda.gov/RHS/sfh/GSFH_Information/Common/09_2009_Website_%20Hooray%20For%20Housing%20GRH%20Brochure.pdf
Guaranteed Rural Housing Consumer Marketing Booklet: http://www.rurdev.usda.gov/rd/pubs/pa1501.pdf
Rural Development Lender Information Page: http://www.rurdev.usda.gov/rhs/sfh/GSFH_Information/lenders.htm
Digital Rights and Copyright
Most information presented on Rural Development's website is considered public domain information. Public domain information may be freely distributed or copied, but use of appropriate byline/photo/image credits is requested. Attribution may be cited as follows: "USDA Rural Development."
Some materials on the Rural Development site are protected by copyright, trademark, or patent, and/or are provided for personal use only. Such materials are used by Rural Development with permission, and they have made every attempt to identify and clearly label them. You may need to obtain permission from the copyright, trademark or patent holder to acquire, use, reproduce or distribute these materials.
Posted by
gilkerk
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FHA,
Government Home Loans,
Home Loan application,
Home Appraisals,
Credit Scores,
USDA Loan,
Downpayment,
Homeownership,
Crystal Lake Real Estate Agents,
Agonquin Real Estate Agents,
Cary Illinois Real Estate Agents,
Mortgages,
Mortgage Interest Rates,
Fannie Mae,
Freddie Mac,
FHA Appraisals,
FHA Appraisers,
HUD Owned Homes,
HUD Homes,
HUD Foreclosures,
Lake in the Hills Mortgage,
McHenry Home Loans,
realestateloans.com,
Mortgage Buydowns,
2-1 buydown,
FHA 2-1 Buydowns,
Mortgage loan application,
mortgage application,
fnma 1003,
203ks,
fha 203ks,
203k,
Gil Kerbashian,
FHA Gift Letter,
Condominiums )
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IHDA.ORG Down Payment Assistance
Two down payment assistance programs: There are two down payment assistance programs that I currently offier: IHDA and ADDI. Many of you have heard about CAHMCO which is really an extension of IHDA.
Here are the highlights to the most popular one- IHDA. As of this writing ADDI has ceased taking any more applicants due to volume. They expect to be back on line in January.
-Income limits
-$6,000 down payment assistance in the form of a second mortgage
-45 days typical to process through IHDA
-Homebuyer classes must be taken
-Additonal $300 to underwrite the second
-First time home buyers only-Veterans exempt from the first time buyer rule
-Purchase price limits are lower than current FHA limits
-Debt ratios are 31/41
-Income from everyone over 18 in the household will be counted (must provide 3 years tax returns)
-640 min fico
-Buyer must contribute 1% to the transaction
Please call me at (847) 873-7295 to discuss nuances. Here to help you get homes financed.
Posted by
gilkerk
(
FHA,
Government Home Loans,
VA,
Downpayment,
Homeownership,
Crystal Lake Real Estate Agents,
Agonquin Real Estate Agents,
Cary Illinois Real Estate Agents,
Mortgage Interest Rates,
Fannie Mae,
Freddie Mac,
FHA Appraisals,
FHA Appraisers,
HUD Owned Homes,
HUD Homes,
HUD Foreclosures,
Lake in the Hills Mortgage,
McHenry Home Loans,
realestateloans.com,
2-1 buydown,
FHA 2-1 Buydowns,
203ks,
fha 203ks,
203k )
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