Archive for the ‘ Financing, Mortgage and Home Loans ’ Category

A Tale of a Refinance That Almost Wasn’t…

So, we’ve all been reading about the changes that have occurred…and continue to occur…in the lending industry as a result of the backlash caused by subprime/no money down loans.

market-recovery-challenges-bridgeThe process of getting a loan has become more and more complex and lenders will tell you that every day brings a new regulation (or two…or three…or more) that puts obstacles in the way of approving loans.

Don’t get me wrong.  I think the industry needed to change…but the pendulum has obviously swung much too far.

This hit home last week when I heard from past clients/friends who were trying to refinance their current loan.

Here’s the story:

This couple (let’s call them The Jones’), with a combined income of over $300,000 a year, impressive credit scores, no ongoing debt except for their current mortgage and current liquid savings of abut $800,000 had applied to refinance their $700,000 mortgage.

The Jones’ filled out all the required paperwork, supplied two years of tax returns and provided a check for the appraisal and application fee.  The lender/investor said that there was only one appraiser who was acceptable to them and, since that appraiser was only available on a date when the homeowners were going to be out of town, the Jones’ made special arrangements for a friend to meet him.

And then they waited….for over three weeks for the appraiser to come up with a value on the property. Continue reading this post

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Posted by: Kevin Koitz on September 17th, 2009 under Financing, Mortgage and Home Loans

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September, 2009 Mortgage Rates About as Good as They Get

We ended August and started September with a little rally in the mortgage-backed securities market. Economic figures, while better than the last few months, aren’t pointing to a sustainable economic recovery.  The Fed noted that inflation is hardly at the top of their list in the near future:

After accounting for these factors, the underlying pace of core inflation seemed to be running a little higher than the staff had anticipated. Survey measures of inflation expectations showed no significant change. Nonetheless, with the unemployment rate anticipated to increase somewhat during the remainder of 2009 and to decline only gradually in 2010, the staff still expected core PCE inflation to slow substantially over the forecast period; the very low readings on hourly compensation lately suggested that such a process might already be in train.

That should be good for mortgage rates but there is a tempest in the teapost-a-brewin’.  The Fed might pull back on its mortgage-backed securities purchase program:

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Posted by: Brian Brady on September 5th, 2009 under Financing, Mortgage and Home Loans, Market Trends

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Mortgage Brokers Need To Shut Up

Mortgage brokers need to stop complaining because customers think we have something to hide.

mortgage-brokers-shut-upForget how non-disclosure of yield spread premium gives direct lenders an advantage; the consumer thinks you’re trying to hide something.

Don’t complain about the Home Valuation Code of Conduct interfering with the transaction; the consumer thinks it gives her an unbiased valuation of the property she’s buying.

Definitely stop complaining about the new truth-in-lending disclosure law (enacted last month); ‘ consumers want to know what their rate and fees might be and how they change… immediately, when it happens.

NEVER complain about how lenders favor their retail sales forces over their wholesale channels; the consumer thinks the banks give better service when they read that.

Who cares if bank sales representatives don’t have to be individually licensed?  Consumer might and that gives us an opportunity.

Don’t even THINK about complaining about the new good-faith-estimate (due next year).  That document is one of the best sales tools I’ve ever seen.  An originator who explains that disclosure document properly, wins the loan engagement.  The consumer won’t even THINK about filling out the last page because he trusts YOU. Continue reading this post

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Posted by: Brian Brady on September 1st, 2009 under Financing, Mortgage and Home Loans

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A Functioning Market Niche

The Home Equity Conversion Mortgage is  a  product created by Congress in 2008 to provide some liquidity to the struggling home market. The amount you can borrow depends on age, current interest rates, and the appraised value of your home or FHA’s mortgage limits,whichever is less. Generally, the more valuable your home is, the older you are and the lower the interest, the more you can borrow.

  1. No payments are necessary as long as the house is your principal residence.
  2. No need to repay the loan as long as you or one of the borrowers continues to live in the house
  3. You can never owe more than the value of your home at the time you or your heirs sell the home.
  4. When you sell your home, you or your estate will repay the cash you received from the reverse mortgage plus interest and fees.
  5. The rest is yours.

The Rules Just Changed

More seniors are turning to reverse mortgages to supplement their retirement savings, which have been decimated by market losses. Continue reading this post

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Posted by: Howard Sobel on June 19th, 2009 under Financing, Mortgage and Home Loans

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The June 2009 Mortgage Rates Massacre

Mortgage rates, prior to June, were stabilizing after a volatile first quarter.  Potential home buyers and existing homeowners were settling in to the fact that a 4.5% conventional mortgage rate could be had; some days you had to pay a couple of points, some days only one.  FHA and VA loans were about an eighth of a percentage point higher.

Brighter days in the real estate market seemed inevitable.

Volatility hit the mortgage rates market like an unexpected tsunami.  Here’s how it unfolded:

What does this mean to you, the professional real estate agent?

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Posted by: Brian Brady on June 8th, 2009 under Financing, Mortgage and Home Loans

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A Brighter Side of Homeowner Taxes

As we rapidly progress toward tax time, April 15, in an atmosphere of economic doom and gloom, there are still some positive situations from which a homeowner can benefit in dealing with homeownership. This article offers a variety of suggestions on tax deductions for homeowners over the 2008 and 2009 tax seasons that you may want to pass along to your clients.

Due to the current economy, homeowners will want to be aware of these important tips, and know whether they qualify for specific deductions, when it is time to submit their tax return.

These tips will provide a focus for current year taxes as well as years going forward.

1. New Home Due to Relocation Tax Deductions

If you purchased a home due to a transfer or new job, you may also have some deductions based on the following requirements: the new location must be 50 miles (one way) or further from your new job than if you had not moved. So, you cannot take this deduction if you are moving within the same city or neighborhood.

The move has to have occurred within a year of starting the new job. You must have worked full time (for any employer) for 39 weeks during the year following the move as long as the location of your new employer is in the general neighborhood of your new home.

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Posted by: Peter McCullough on March 27th, 2009 under Financing, Mortgage and Home Loans

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