Gil Kerbashian - Illinois Home Loans

The U.S. Housing Market: Are Happy Days Really Here Again?

FHA April 1 Changes: $1000 Collections Rule Reversed

The Federal Housing Administration (FHA) previously had plans to implement a new rule requiring those with $1,000 or more in disputed or unpaid collections account to pay them off or make three months worth of payments before they can qualify for an FHA loan.

The planned rule, which was set to be implemented on April 1, was heavily criticized by lenders, citing that it would significantly decrease those that could qualify for an FHA loan. Some reports estimated that as much as 10 percent of borrowers could be denied an FHA loan because of the restrictions applied.

In the face of scrutiny and under the realization that the unemployment rate remains high, the FHA has decided to postpone its implementation of its new rule until July.

Potential homebuyers continue to benefit from historical low costs and with the delay of the imposing FHA restrictions, many can still benefit from a beneficial mortgage loan with as little as 3 percent down payment.

Illinois Home Sales Continue to Increase

Illinois Home Sales Continue to Increase

For the eighth consecutive month, Illinois has recorded a year-over-year increase in home sales, according to a report from the Illinois Association of REALTORS.

The report - which indicated that 6,487 home sales in February of 2012, a 15.1 percent increase from a year before - reflects the best home sale numbers since February of 2008 when over 7,000 homes were sold.

Though a number of factors can be attributed to the spike in home sales, historically low interest rates and selling points continue to attract consumers. The general upswing of the once frugal economic conditions has also provided potential consumers with a comfort level that was previously out of reach.

According to the report, more than half of Illinois counties showed a year-over-year home sales increase in February of 2012 as well, while approximately 41 percent of counties showed year-over-year median price increases of 7.1 percent, up to $135,000.

First-time home buyers have continued to thrive as well, with sellers more determined than ever to close on their homes and premium investment opportunities, the current housing market provides an opportune time for first-time home buyers to find the house of their dreams.

Strong Jobs Report Results in 4.4 Percent Rise in Home Purchases

Strong Jobs Report Results in 4.4 Percent Rise in Home Purchases

Wed, 2012-03-14 12:47 — NationalMortgag...

Mortgage applications decreased 2.4 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending March 9, 2012. The Market Composite Index, a measure of mortgage loan application volume, decreased 2.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 1.8 percent compared with the previous week. The Refinance Index decreased 4.1 percent from the previous week to its lowest level since Jan. 6, 2012. This is the fourth consecutive weekly decline in the Refinance Index. The seasonally adjusted Purchase Index increased 4.4 percent from one week earlier to its highest level since Jan. 13, 2012. The unadjusted Purchase Index increased six percent compared with the previous week and was 0.4 percent lower than the same week one year ago.

The four week moving average for the seasonally adjusted Market Index is down 2.12 percent. The four week moving average is up 2.92 percent for the seasonally adjusted Purchase Index, while this average is down 3.29 percent for the Refinance Index. The refinance share of mortgage activity decreased to 75.1 percent of total applications from 77 percent the previous week. This is the fourth consecutive weekly decline in refinance share, which is at its lowest level since Nov. 25, 2011. The adjustable-rate mortgage (ARM) share of activity increased to 5.8 percent from 5.4 percent of total applications from the previous week.

"Applications for home purchase increased again last week, coinciding with another strong job market report. Purchase applications are now almost 12 percent above the level one month ago, even after adjusting for typical seasonal patterns. However, this level of purchase activity, adjusted or unadjusted, was essentially unchanged when compared to the same time last year. Purchase activity remains subdued and within the narrow range we have seen since the expiration of the homebuyer tax credit in 2010," said Michael Fratantoni, MBA's vice president of research and economics. "Refinance application volume fell last week. Although rates were unchanged on average, they trended up through the course of the week, and this likely discouraged many potential refinance applicants. HARP volume continued to grow as a share of total refinance volume, reaching roughly 30 percent of refinance activity in the last two weeks. Typical HARP loans had loan-to-value ratios above 90 percent, indicating that lenders are reaching out to underwater borrowers."

In February 2012, United States purchase application volume increased by 18 percent from January 2012 and decreased two percent from the same time last year. Only three states saw a monthly decrease in purchase activity from January to February. Montana had the largest monthly purchase volume decrease of 7.1 percent, followed by the District of Columbia (down 3.1 percent from last month), and New Mexico (down 1.6 percent from last month).

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) remained unchanged at 4.06 percent, with points decreasing to 0.43 from 0.50 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) increased to 4.39 percent from 4.33 percent, with points decreasing to 0.39 from 0.40 (including the origination fee) for 80 percent LTVs. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.82 percent from 3.87 percent, with points decreasing to 0.55 from 0.70 (including the origination fee) for 80 percent LTVs. This is the lowest 30-year FHA rate of the year. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages remained unchanged at 3.36 percent, with points decreasing to 0.34 from 0.38 (including the origination fee) for 80 percent LTVs. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs increased to 2.81 percent from 2.78 percent, with points increasing to 0.37 from 0.35 (including the origination fee) for 80 percent LTVs. The effective rate increased from last week.

Veterans and Military Home Loan Financing in Illinois

Veterans and Military Home Loan Financing in Illinois

Created to honor those who safeguard our freedom, Welcome HeroHOmes is open to all qualified Illinois veterans, active military personnel, reservists and Illinois National Guard members.

Gil Kerbshian's homebuyer financing package includes:
- a $10,000 forgiveable loan over two years for down payment and closing cost assistance
- a 30-year fixed rate mortgage that has an affordable interest rate
- an optional mortgage credit certificate to reduce federal income tax liability.
Eligibility

Flyer: www.realestateloans.com/herohomes.pdf

Gil Kerbashian can be reached at 847-873-7295

FHA Mortgage Insurance Premiums go up on April 1, 2012 (not an April fools joke, just a date the government picked)

The FHA will raise its mortgage insurance premiums on April 1, 2012.

IMPORTANT NOTE: This information is subject to final review by the FHA. It's based on an initial FHA announcement made February 27, 2012. It's unofficial until the FHA releases its mortgagee letter on the matter.

FHA Mortgages:

Most people call them "FHA mortgages" but the Federal Housing Administration (FHA) doesn't lend the money. FHA insures them for lenders that do. The better name for FHA mortgages would be "FHA-insured mortgages". FHA charges borrowers for its insurance just like an auto insurer or life insurer.

FHA has determined that its mortgage insurance premiums is too low to cover projected losses (poor payers cause good payers problems again). Beginning April 1, 2012, for the fourth time in 3 years, the FHA will raise its mortgage insurance premiums. The change applies to new loans registered on, or after, April 1, 2012. FHA mortgage insurance premiums that register for a case number prior to April 1, 2012, and for loans already closed, are exempt from the changes.

Get "grandfathered in" today.

New FHA Mortgage Insurance Premium Schedules

FHA mortgage insurance is paid in two parts.

The first part is the "Upfront Mortgage Insurance Premium"- abbreviated as UFMIP. Upfront mortgage insurance premiums will rise from 1.000 percent of your FHA loan size to 1.750 percent of your FHA loan size.

For example, if you live in Chicago Illinois and you borrow up to the FHA's local loan limit of $410,000, your upfront mortgage insurance premium will rise 75% from $4100 to $7175. This amount is added to your loan size. FHA upfront MIP is not paid via cash. You'll pay interest on this amount for the life of your loan.

The changes in the FHA's annual mortgage insurance premiums are less extreme, a little.

The new schedule, for loans with case numbers assigned on or after April 1, 2012 :

• 15-year loan terms with loan-to-value over 90% : 0.60 percent annual MIP
• 15-year loan terms with loan-t0-value under 90% : 0.35 percent annual MIP
• 30-year loan terms with loan-to-value over 95% : 1.25 percent annual MIP
• 30-year loan terms with loan-to-value under 95% : 1.20 percent annual MIP

FHA mortgages made for $625,500 or more will be subject to an additional 0.25 percent annual mortgage insurance fee. These are mortgage rate changes for what FHA calls HIGH COST areas.

Loans made prior to April 1, 2012 will use the old FHA mortgage insurance schedule :

• 15-year loan terms with loan-to-value over 90% : 0.50 percent annual MIP
• 15-year loan terms with loan-t0-value under 90% : 0.25 percent annual MIP
• 30-year loan terms with loan-to-value over 95% : 1.15 percent annual MIP
• 30-year loan terms with loan-to-value under 95% : 1.10 percent annual MIP

Why Democrats and Republicans Have Failed America on Housing

  but..

The Focus Should be on Increasing Home Sales and Purchase Transactions!

  Let American Homeowners take their negative equity with them to another home.

 Maria and Robert have good credit, good jobs and $30,000 in savings. The problem?: Their home is worth $60,000 less than what is currently owed (they bought in 2005). Today in 2012, Maria and Robert have another child and Robert’s Mom is living with them. They need to move from a 3 bedroom home to a 5 bedroom home. They can’t sell because they have negative equity and they don’t want to damage their credit with a short sale. Why isn’t Fannie Mae, Freddie Mac, FHA and VA administrations, along with Congress, allowing Maria and Robert to carry their Negative Equity to a new larger home?

Maria and Robert would be happy to Carryover their Negative Equity!

The Answer: Allow Maria and Robert and other Americans to Carry Their Negative Equity out of their current home.

The “Negative Equity Carryover Model” proposes that negative housing equity be carried forward to the purchase of a subsequent home to be repaid over a longer term. The equity carryover could also, if regulators wanted, be amortized down over an extended period (and totally forgiven over X years) slowly alleviating current pressure on both banks and homeowners.

Reduce disposition expense: Homeowners and banks would be able to reduce and defer the high cost of real estate disposition due to the inefficient short sale and foreclosure process.

Save consumer credit: Negative equity can be “carried” by a homeowner as a second lien onto the purchase of another home or onto a credit report as a personal line of credit. The Model suggests that the negative equity can be carried into the future as an independent debt/lien resulting in benefits to both the banks and homeowners. 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 reduce hits to their balance sheets and reserve requirements: Lenders could amortize the negative equity over years while still maintaining some lien position just in case homeownership equity returned.

Simply put, these “carryover” mortgages could be a hybrid between regular mortgages and equity sharing mortgages.

Gil Kerkbashian (847) 873-7295

$10,000 Down Payment and Closing Costs Assistance for Veterans

$10,000 Down Payment and Closing Cost Assistance to Veterans
 
I am extremely proud to announce to Illinois military families an exclusive, comprehensive finance package of $10,000 in down payment assistance and closing cost assistance.

This program is a special promise to those men and women who recently served in Iraq and Afghanistan, safeguarding our freedom.

The “Welcome Home Heroes Finance package” features:
·         First Mortgage
·         A Program grant of $10,000 for down payment and closing cost assistance, in the form of a second mortgage with a minimul 2-year recapture - no payments.

·         An optional Mortgage Credit Certificate (MCC) can be applied for to save the Veteran additional monies.

Active military, reservists, and National Guards are eligible -- but must be first time homebuyers. Retired Veterans need not be first-time homebuyers.

Who Holds My Loan? Fannie or Freddie? Find out Here.

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)

FHA Loan Limits Chicagoland

1 unit: $410,000

2 unit: $524,850

3 unit: $634,450

4 unit: $788,450

IHDA Illinois Down Payment Assistance Program

Basics:

620 Credit Score, income and purchase price limits per county (call for details), couldn't have owned a home in the last three years, up to $6000 ($10,000 for Veterans), no payment, zero % interest.

HARP II Refinance Program Update

Breaking Down The HARP II Refinance Program and what homeowners should expect from the Fannie Mae, Freddie Mac refinance program.

This program is available for those homeowners that:

1.Currently have a mortgage backed by either Fannie Mae or Freddie Mac (no FHA or VA)
2.Their current mortgage must have been securitized prior to June 1, 2009

HARP II is a reworked version of the original HARP I refinance program, first launched in 2009. The original HARP program was positioned to assist more than 9 million U.S. households. However, less than a million homeowners were able to utilize the program. The revised HARP II incorporates some key changes.

The most notable change is that the loan to value limit has been waived (I'm sure some lenders will still require a maximum loan to value). Therefore, no matter how far underwater you are, you are still eligible for HARP. That means the program is now in reach for homeowners in states such as Nevada, Michigan and Arizona where LTVs can exceed 200 percent.

HARP II is expected to be rolled out by most lenders sometime in mid to late November. The process starts with a loan application.

Rates Remain Calm Post Fed Comments

The Federal Open Market Committee voted to keep the Fed Funds Rate static at this time. The vote was nearly unanimous with only one dissenting voter. In its press release, the Federal Reserve presented an improved outlook for the U.S. economy since its last meeting in September. There's new evidence that the economy "strengthened somewhat" in the third quarter, led by consumer and business spending. The economy remains hampered by a number of factors including :

1. Continuing weakness in the labor market
2. Weakness in commercial real estate
3. A depressed housing market

The good news is that inflation remains stable which will help keep mortgage rates in check.

HARP Homeowner Refinance Program II Introduced

HARP Phase II Announced to Rescue Underwater Mortgages

Fair Housing FAQ's

Among the most important documents ever written is the Declaration of Independence, which proclaims that all people of the United States have the right to pursue happiness. For most Americans, that means the right, within our means, to work and live where we desire without discrimination, and the document is viewed as the first in our country’s history to declare equal rights for all.

 In 1866, the Civil Rights Act further specified  that all people in every U.S. state and territory, had the right to inherit, purchase, lease, sell, hold, and convey real and personal property without regard to race. Not until the 1960s, however, was any significant governmental action implemented to help all people achieve that right. Before then, several decisions were made and laws passed, but they lacked any significant impact that would provide protection or remedies.

In 1962, President Kennedy issued an executive order entitled "Equal Opportunity in Housing." The cause languished, mired in debate until the assassination of Martin Luther King on April 4, 1968 . Shortly afterward, the Fair Housing Act of 1968 was passed and signed into law by President Johnson. Since then, there have been revisions to the Fair Housing Act of 1968 to include various classes of people who are now protected.

It has been a long, difficult struggle from the date the Declaration of Independence was signed to provide all of us, regardless of race or creed, "the unalienable right to pursue happiness." Remembering our history and knowing the details of the Fair Housing Act of 1968 can help us avoid making the same mistakes in the future.

Knowing the answers to these questions and acting accordingly assist you in obeying the law in the course of your real estate duties.

Knowing the answers to these questions and acting accordingly assist you in obeying the law in the course of your real estate duties.

1) Was the Fair Housing Act the first place that provided equal rights for all? Y or N    No. The Declaration of Independence.

2) Are nonresidents of the United States protected under the act?  Y or N

 Yes, nonresidents of the United States are protected. The law clearly states that all people are to be treated equally. Whether or not a person has attained citizenship does not excuse unfair treatment.

3) Does the act allow for any discrimination on the basis ofofagainst race?   Y or N

 No. This is unequivocal.

4) Does the Fair Housing Act contain any exemptions?  Y or N

 Yes. The Fair Housing Act contains seven exemptions:

1) A religious organization may discriminate with respect to its noncommercial property provided that the religion itself doesn't discriminate on the basis of race, color, or national origin;

2) The act does not prohibit a private club, not in fact open to the public, from limiting the rental or occupancy of noncommercial lodgings to members. (Note that this does not address the issue of whether a private club may discriminate when admitting members. That type of claim falls under the Civil Rights Act.);

3) The act does not limit the applicability of any reasonable local, state, or federal restrictions regarding the maximum number of people to occupy a dwelling;

4) The act does not prohibit conduct against a person because such a person has been convicted in a court of law for illegally distributing or manufacturing controlled substances;

5) Discrimination based on familial status will not apply to housing qualifying for exempted status as housing for older people;

6) The sale or rental of a single-family house by the owner will be exempt from coverage, providing the following conditions are met: The owner does not own or have any interest in more than three single-family houses at any one time, and the house is sold or rented without the services of a real estate licensee or the facilities of any person in the business of selling or renting dwellings. The exemption will apply to one sale within a two-year period unless the owner was the most recent applicant. (Note that the Civil Rights Act still applies.);

7) The act does not cover owner-occupied dwellings designed for occupancy by no more than four families living independently of each other (Mrs. Murphy's Exemption).  Note:  The Civil Rights Act of 1866 prohibits discrimination on the basis of race in every case, without exception.

5) Name the seven protected classes.  

 A good way to remember them is the sentence, "REALTORS® can really sell houses fast now." The first letter of each word stands for one of the classes: race, color, religion, sex, handicap (disability), familial status, national origin.

Realtors should exercise caution at this part: many communities have additional laws which specifiy protected classes, so the list of seven should be checked against any laws existing in a state or municipality.

6) Is sexual orientation a protected class?

 No.

7) Can a HUD tester file a claim of discrimination and seek the same remedies as a member of the general public?  Y or N

 Yes.

8) How long does an aggrieved party have to file a claim of discrimination under the Fair Housing Act?

1.      One week

2.      One month

3.      Six months

4.      One year.  

One year. That’s why it’s important to routinely keep records of your showings and business interactions so that events can be recreated long after they have happened.

9) Are publications available that enable you to comply with provisions of the Fair Housing Act in advertising? Y or N

Yes.

Another publication is the Fair Housing Manual, which can be ordered from The Oregon Newspaper Publishers Association by calling (503/624-NEWS).

10) Do the Fair Housing Act and the regulations under it apply to commercial properties?  Y or N

Yes. 

11) Is it legal to advertise only in geographical areas populated by particular racial, ethnic, or religious groups of people as long as you prepare the ads in the language of that particular ethnic group? Y or N

No. Exclusive marketing that is targeted to one protected class when no other marketing efforts are made is potentially discriminatory.

12) Is it legal to target-market housing that has been found to meet the requirements for the Housing for Older Persons exemption under the Fair Housing Act?  Y or N

Yes. As long as the housing is qualified for exempt status as housing for older people, targeting older persons is not discriminatory. Make certain, however that the housing does meet the guideline. The key requirement for an exemption to the Fair Housing Act's family-status provision is that "at least 80 percent of the occupied units [be] occupied by at least one person who is 55 years of age or older." The housing facility or community also must publish and adhere to policies and procedures that demonstrate an intent to provide housing to persons who are 55 years old or older.

16) If you have listed a smaller home in an area in which predominately senior citizens live that is not qualified as exempt for housing for older people, is it acceptable to exclusively advertise the listing in a magazine whose primary readership is senior citizens?  Y or N 

 No. If the advertisement is the only form of advertising, this could be interpreted as discriminatory and appear to be an attempt to exclude families with children from responding.  

17) When presenting an offer to the seller, must you, under agency laws, answer questions your seller-client asks about the ethnic background of prospective purchasers? Y or N

 No. You may answer with factual information pertaining to the qualifications of the prospective purchasers but nothing based on any of the seven protected classes.

18) Is it steering if your customer or client wishes to be shown houses only in an area made up of his own ethnic background?

No. It is steering when you make the decision based on that person’s ethnicity and show them houses in certain areas based on their ethnic background. A REALTOR^® must exercise caution, however, and document that the REALTOR® acted specifically at the prospect's instructions.

In 1995, HUD, the Fair Housing Council of Oregon, and the Portland Metropolitan Area Boards and Associations of REALTORS^® Multiple Listing Service, Inc. entered a conciliation agreement that identified words and phrases that potentially violate the Fair Housing Act. The list was the product of a negotiated settlement and not a ruling by a court or HUD, and HUD has not endorsed this list. Words not appearing on this list could be used to discriminate. Conversely, words appearing on the list will not always violate the law.

Some of the words are included here: as you write advertisements or MLS descriptions, be alert for this language and use it carefully.

able bodied
adults only 
bachelor
blacks

Caucasian
no colored
couples only
crippled
no drinkers
no employed
must be empty nesters
handicapped
Indian
married
mature couple
mature individual
mentally handicapped
older person(s)
one child one person
Oriental
physically fit
retarded
no seasonal worker
singles only
single person
no Soc. Sec. Ins. (SSI)
unemployed
no white
white only

Review the following web pages:

Fair Housing and Equal Opportunity Web pages

The National Fair Housing Advocate Online