Yes, I said it!  Too many times we experience very anxious buyers, sellers, mortgage originators and well….. real estate agents who believe that the loan process needs to be faster and easier.  As a mortgage advisor, I will agree that on many given days, I wish it was easier and that things ran much smoother however when you take a step back and think about it..  “If I was the actual lender (lending out my money), I may sure want to know what that MIDDLE INITIAL stands for if I ever have to cover my tracks when its time to collect the money I lent out”.

CLICK FOR A RATE QUOTE

The truth is this.. Banks lend out money to make money. It is simple although some may (even I) say that banks are at times evil;  the truth is they are not only protecting their money but the millions of American families that invest their money into their stock and buy into bonds.  The bank has every right and also the fiduciary responsibility to protect their investors from financial loss. It is not as simple as just throwing out the money like Robin Hood.

CLICK FOR A RATE QUOTE

The point of this article is to remind ourselves that signing a real estate contract does not solidify that the deal is done.  Believe me, I DO UNDERSTAND that wheels have turned, gas has been spent, the most valuable commodity “TIME” has been used up and the last thing a lender; specifically a mortgage advisor” wants to do is decline a client.  It simply STINKS!  Not only since we don’t earn any money but simply we are humans too. We know what it feels like to be turned down.  It’s not fun and contrary to some beliefs out there, WE REALLY DO CARE about the client and their ability to get into the home. Internalize it as you wish, it is what it is; a missed opportunity for all parties involved.

CLICK FOR A RATE QUOTE

Unfortunately, lending practices have tightened up and buckle up because the ride is not over.  Due to Federal and State regulatory commissions, departments, and bureaus, lenders are shuddering at the prospect of being audited and possibly fined for the most minor items such as the misspelling of a name. The Fed’s have set up the CFPB – Consumer Financial Protection Bureau who’s; some would say; primary purpose is to fine, penalize, shut down as many lending institutions as it can.   They believe that this will clean up the banking industry and while it is unknowingly forcing banks to tighten up the guidelines even more.  Some would say, “Well good, serves them right” but then those very same people are complaining as to why someone like me is poking and prodding into their personal life as a result of asking to borrow $200,000.   The point is, guidelines will continue to test the ceiling of tolerance and we; mortgage advisors, real estate agents, home-buyers, escrow companies will need to adapt and practice a hard word to swallow: PATIENCE.

CLICK FOR A RATE QUOTE

You’d think 13 years in this career, I could tell you how to qualify for a loan as if it was 2nd nature.. Well the truth is I can’t.   I can’t just like a ship’s captain can’t tell you if the water has frozen up and an iceberg is up ahead.  What the right lender can do is help navigate the sea and prepare everyone for some rough waves.  So much has changed and continues to change.  It is; in effect; a moving target and your best bet is someone who is a pretty good shot because that is all you have.  I also understand that lenders need to also set an expectation that can be met however with all the changes we are still trying to figure out what that exactly is.

CLICK FOR A RATE QUOTE

In short, lets be kind and patient to each other.  There are a lot of forces working for the common goal of home ownership and there are times when those very same forces seem to be working against you; remember they are not.

Continuing our series, this month we’ll be reviewing “Buying (A Home) Again After A Bankruptcy” with an FHA loan.  I will be covering Conventional guidelines but I wanted to cover FHA since it is; overall’ more lenient than conventional after a BK.

CLICK FOR A FHA RATE QUOTE

As we all know the economy has not been short on affecting Arizona and California’s households who have experienced a loss of employment, loss of income, loss of their home, bankruptcies and yes, also divorce.   This said, most consumers don’t know where to or how to start again in the home buying process after these events.  In this article, we’ll be covering several key points to consider when trying to buy again after in particular to Chapter 7 and Chapter 13.

CLICK FOR A FHA RATE QUOTE

FHA After A Chapter 7

According to FHA guidelines, FHA requires Arizona and California Home-buyers to wait at least two years as of the discharge date of the borrowers’ Chapter 7 Bankruptcy. Make sure you don’t confuse this with the date in which you file your paperwork; its not the date of your “discharge”.

• Make sure to re-establish a couple of lines of credit (car loan and a credit card is a good start)
• Make all your payments on time
• Provide the FHA Mortgage Lender with a full explanation as to what caused the bankruptcy
• Click here> If you filed Chapter 7 with a home include

CLICK FOR A FHA RATE QUOTE

FHA After a Chapter 13

According to FHA guidelines, FHA will allow a lender to approve a borrower; who is still paying on a Chapter 13 Bankruptcy;

• If the Chapter 13 payment history has been satisfactory
• Good payment history of 12 plus months
• Must obtain the court appointed trustee’s written approval proceed with the loan.
• Make sure to re-establish a couple of lines of credit (car loan and a credit card is a good start)
• Provide the FHA Mortgage Lender with a full explanation as to what caused the bankruptcy
• Click here> If you filed Chapter 7 with a home include

CLICK FOR A FHA RATE QUOTE

Next in the “Buying Again After” series, I will be going in depth into Conventional guidelines after a bankruptcy. In the mean time, make sure to keep a good filing system, have your credit reviewed to identify any potential lingering information that can prove troublesome later on, work on re-establishing credit and make sure your payments are on time.

CLICK FOR A FHA RATE QUOTE

If there are any questions, concerns or comments, please do share them as it can help others who are looking to buy a home again after a bankruptcy in Arizona and California.

Before you begin browsing through real estate listings, you should consider getting preapproved for a home loan. Getting preapproved for a mortgage is a relatively simple process that involves a quick review of your financial picture, including your credit history, income, assets, liabilities, and expected loan amount. This is a very important first step for a number of reasons, such as:

1. It can help determine your budget.

Getting preapproved will allow you to have a rough idea of how much money you may qualify to borrow. This will help you determine a price range, which can narrow down your home search. Of course it’s also important to take a careful look at your budget when deciding how much you can afford to spend on a new home. You may find that you are pre-approved to borrow more than you could comfortably afford.

2. It can help you prepare for making an offer.

When your offer is accompanied by a pre-approval letter from an experienced Arizona mortgage professional it signals that you are a serious, qualified buyer. The seller is likely to give your offer much more attention and consideration, and be open to negotiations, when compared to an offer from a potential buyer that has not been preapproved for a mortgage.

3. It can help you determine the best mortgage for your situation, without being under pressure.

While going through the preapproval process you can take the time to ask about different loan programs, and compare the pros and cons of each without a looming closing date.

4. It can help you achieve peace of mind.

It’s nice to know where you stand when it comes to qualifying for a mortgage loan. You’ll have the chance to review your credit history and if you uncover any errors clear them up before making an offer on a home. When armed with a preapproval you can feel more confident in taking the next step towards finding your new home.

About the author:
Steph Medeiros writes for the mortgage rate research website ForTheBestRate.com, covering trends in the Virginia mortgage rates and real estate markets.

FHA Postpones “Collections Need To Be Paid” Requirement

It is only my educated guess that the real estate, mortgage industry along with some consumer advocacy groups yelled loud enough so that the FHA would actually postpone the requirement that would have forced FHA home buyers in Arizona and California to either pay off their collections accounts or be in a payment arrangement with the collection company for a minimum period of 3 months/ payments before being able to qualify for an FHA mortgage in Arizona and California.

CLICK FOR A RATE QUOTE

The FHA felt that the idea needed additional time to consider industry feedback and determine whether this policy was (in my opinion) of sound mind.  The reality is that many hard working Americans have suffered setbacks and especially with medical care and lack of health insurance.  Collections have soared and FHA was the last place where someone with a few medical collections but good credit could buy a home.

CLICK FOR A RATE QUOTE

In short, this is great news but of course I will now need to call my clients back who I scared their hair off with this new policy and inform them that they can relax and not have to worry about paying them off or waiting for a period of 3 months.   You can count on me to provide you with any updates that may affect the ability to qualify for an FHA Home Loan in Arizona and California.

CLICK FOR A RATE QUOTE

If there are any questions that are not addressed in this article, please email, text, facebook, twitter, leave a comment below or simply call me to discuss your personal  situation or specific questions.

If you find this information to be useful, I ask that you please share this with your family, friends and clients. Please use the social networks to distribute this information.

CLICK FOR A RATE QUOTE

OK, OK!!  I will be the first to admit!  I didn’t think that the Home Affordable Refinance Program in Arizona and California was actually going to work. Lets face it, most times when our politicians get involved things just didn’t materialize the way in which they promise.   The program actually has hit some bumps depending what lender you speak with however at Academy Mortgage as well as several other mortgage companies, we have been able to help homeowners who have a loan-to-value (LTV) near 200%.  Keep in mind, the LTV has no bearing on your loan but I am just trying to illustrate the point.

CLICK FOR A RATE QUOTE

Although many of the homeowners who have called me have been sincere about wanting to stay in their home, some have realized that under their economic situation, the HARP 2.0 Program in Arizona and California will not do enough to lower their payment thus allowing them to keep their home.  Some of them have talked about possibly considering a short sale but for the most part, many were thrilled to learn that we could save them anywhere from $150 to $600 off their current mortgage payment.  Yep!  No appraisal, no value, little documentation and low closing costs and best of all lower rate meaning lower payment.

CLICK FOR A RATE QUOTE

What I have learned in the last few weeks:

• No appraisal means no loan to value requirement:  Although this is true, some of the large lenders are limiting this requirement.  We are not – “sky is the limit”
• Short sales:  If a client has had a short sale that is (obviously) not your primary residence, you can refinance under HARP 2.0 so long as you have not had any mortgage lates in the last 6 months and the loan being refinanced is owned by Fannie Mae.  Freddie Mac is not eligible under this scenario.   **Note:  9 out of 10 lenders do not know this and will tell you “NO!” at the drop of the term “Short Sale”.
• Mortgage Insurance:  You can refinance even if you have MI.  Some lenders are limiting which MI companies they will accept.  Check with your current lender and see of your MI Company qualifies.  FYI.. We take most of them.
• The bigger the bank, the better:  I have outperformed most of the big 4 in terms of rate, costs and especially requirements.  Most big banks are not equipped to train their call center representatives to fully understand the guidelines therefore most will turn you away before they go out of their way to help you.
• Taking a co-borrower off the loan:  This will depend on the lender.  Many lenders will not allow you to do so.  We allow this so long as the person refinancing the loan provides a 12 month history of making their payments from their bank account.
• If it is conventional, is has to be Fannie or Freddie:  This would be easy to assume but if you did, you are wrong.  There are loans out in the loan’sphere that were originated using conventional (i.e. Fannie and Freddie) guidelines but were never sold to the Fannie Mae or Freddie Mac.  These are not eligible for HARP 2.0 in Arizona nor California.

CLICK FOR A RATE QUOTE

If there are any questions that are not addressed in this article, please email, text, facebook, twitter, leave a comment below or simply call me to discuss your personal  situation or specific questions.

If you find this information to be useful, I ask that you please share this with your family, friends and clients. Please use the social networks to distribute this information.

CLICK FOR A RATE QUOTE

Buying A Home After

With the, so obvious, economic meltdown of the century staring us in the face, I found that as a mortgage advisor in Arizona and California with Academy Mortgage, a slurry of American homeowners from across the United States were contacting me for some good ole’ fashioned advice.  When talking with people whether it was on the phone or online, it became pretty clear that there is a lot of conflicting information out there, when it comes to buying after a short sale, foreclosure, bankruptcy, divorce, and other catastrophic events brought on by the economic hardships.

CLICK FOR A RATE QUOTE

All the conversations got me thinking,! What can I do to best serve my clients and the community who have lost wages, jobs, homes, lifestyle, families, etc?   I was on a trajectory which started exactly in June of 2008 when I conducted a seminar on “FHA: The Next Real Estate Boom”.   At the time, I had been in the business long enough to know that FHA had historically served as a tool to balance out the housing market.  Boy was I right!  Over 600 real estate agents attended the seminar kicking the door down.  I obviously had pushed a button that would change my life and that of many others in the real estate industry.

CLICK FOR A RATE QUOTE

Today, as a well-known (at least that is what they tell me) mortgage blogger, speaker and advisor, (as I said earlier) I’ve had the fortune to speak to so many hard working Americans across the country who are struggling to pay their bills and just want to do the right thing.  They’ve fielded questions that often kept me sharpening my pencil for days trying to get them the right answer or solution to some complex; if not legal; mortgage, real estate, and/ or financial questions.  The experience has not only helped me become great at what I do as a mortgage advisor but also reaffirmed my commitment to provide honest, solid and informative articles that affect millions of Americans. In many ways, it has helped me to grow as a person as well.  I have often found myself unselfishly assisting families in which I had nothing to financially gain.  One day, after assisting a woman from Virginia (mind you I am not licensed in Virginia and do not do loans in that state), who had sent me several GOD BLESS YOU’s my way, she told me with her gentle , Southern accent, “Why don’t you make a series of articles talking about this stuff?”.   The light bulb went on and just like that I decided to write a series “Buying After…”.   It wasn’t necessarily original, (I will admit) but definitely the shoe fit.

CLICK FOR A RATE QUOTE

For the next several weeks, in spirit of helping and being a resource to so many people, I will be writing and posting information based on the several sub-topics that pertain to “Buying After…”.   My hope is that you will share this information with your friends, family and clients.  In fact, if there are any specific topics you would like to see, read or hear about, I welcome your requests and questions.  I will do my best to investigate and report them to you in a concise and accurate manner and share the information with the rest of my friends and colleagues.  Until the next time!

CLICK FOR A RATE QUOTE

The unfortunate pitfall of having a bankruptcy attorney that doesn’t understand mortgage lending guidelines in Arizona and California is that most bankruptcy attorneys advise their clients to file the chapter 7 bankruptcy and include their mortgage and then hand in the keys. The problem with this advise is that mortgage lenders will not consider anyone for a home loan until 3 years from the foreclosure date. The 3 years is assuming that the new loan will be an FHA mortgage. If considering another program, it could take up to 2 to 5 years depending each homeowner’s unique situation.

CLICK FOR A RATE QUOTE

[youtube]http://www.youtube.com/watch?v=NIBNARmF4DM&list=UUw0YR7iiVIyKpAQSed_YxZg&index=1&feature=plcp[/youtube]

CLICK FOR A RATE QUOTE

Did I just confuse you? You were thinking Chapter 7 bankruptcy but I am talking about a FORECLOSURE! As a mortgage lender in Arizona and California, I am not so concerned with the Chapter 7 bankruptcy however I am more interested or concerned about the foreclosure. Unfortunately, most homeowners are led to believe that the Chapter 7 bankruptcy eliminates the loan. In effect it does release you of the financial liability however the legal manner (the title of the property) in which the home is taken off the homeowner’s name is through the process of a “TRUSTEE SALE aka Foreclosure”.

CLICK FOR A RATE QUOTE

Once the foreclosure process is finalized, that is the date in which the 3 year waiting period to buy another home after begins. It can be very frustrating as well as confusing therefore allow me to show you an example:

1. Homeowners files for a Chapter 7 Bankruptcy on January 1, 2012
2. Chapter 7 Bankruptcy wipes out your debt (suppose to anyways..)
3. House is not foreclosed (Bank does not take the property to the “Trustee Sale”) until January 1, 2015
4. On January 1, 2015, your name is taken off the title
5. You are not eligible (per FHA) for a loan until January 2, 2018..
6. Yes, you read correct. You had to wait 6 years before buying again after a Chapter 7 Bankruptcy.

CLICK FOR A RATE QUOTE

If you are wondering what you can do to prevent this, contact me and we can talk about your personal situation and how to preempt this or resolve this matter. If you are not sure if the house has been foreclosed on yet, you can contact me and I will gladly assist you with the research. Of course for any legal questions or concerns, you should always consult with an attorney. This information is only to be used for lending purposes.

I hope you find this information useful! If you have any questions that I can assist you with, please call me, text me, Facebook me, twitter me, email me or leave a comment, I am the Mobile Mortgage Pro, after all!

Click here for a rate quote

On March 15th, 2012 the lending industry will be launching the much anticipated Home Affordable Refinance Program also known as HARP 2.0.  This program is set to help millions of responsible homeowners who have made their payment on time and would like to lower their payment.  The program is designed to people who do not have the equity to refinance due to the down turn of the housing market.

Click here for a rate quote

[youtube]http://www.youtube.com/watch?v=1fC7tbjF6Ko[/youtube]

What are the changes in the HARP 2.0 program?

• No loan to value limits which now allows home owners to refinance their homes whose homes have drastically fallen in value.
• HARP 2.0  will eliminate appraisals and ease up on the underwriting requirements. This will allow the Arizona and California lender to approve the loan faster and easier for homeowners looking to refinance under the program.
• Fannie and Freddie’s risk based pricing and fees are eliminated or modified to ensure that the homeowner gets the maximum benefit from the historic low rates without the high costs of refinancing.

Click here for a rate quote

To find out who holds your mortgage

In order to be eligible for the HARP 2.0 Program, your home loan must be held by Fannie Mae or Freddie Mac.  Below you will be able to find out who your loan is held by.  If you do not locate your home under one, click on the other to search again.

The Freddie Mac loan look up took allows you to see if you loan is a Freddie Mac loan and eligible for HARP 2.0

The Fannie Mae loan look up took allows you to see if you loan is a Fannie Mae loan and eligible for HARP 2.0

Click here for a rate quote

[youtube]http://www.youtube.com/watch?v=grxicvkkTzc&feature=youtube_gdata[/youtube]

Click here for a rate quote

As if it has not gotten harder enough, FHA is now requiring that lenders enforce that collection accounts be paid prior to closing on an FHA home loan.   I tell you folks, the mortgage business has gotten real tough and we are still facing other waves of rules and regulations that make it tougher (not impossible) to obtain a home loan.  A positive to the new guidelines is that they no longer require we chase our tail getting rid of accounts in “DISPUTE STATUS” if under $1,000.

Click here for a rate quote

My attitude is that knowledge is power and the best way to ensure that clients like you have a chance at owning their own home is by bringing you accurate and useful information.  No apple recipes here!  Just concise industry information.

Click here for a rate quote

So here are the new FHA Guidelines in regards to paying off collection accounts:

1. Disputed accounts will no longer trigger an automatic review by an underwriter if BOTH of the following requirements are met:
1. The outstanding balance of all disputed accounts is less than $1,000 and
2. Two years have elapsed since the date of last activity listed on the credit report for all disputed accounts.
2. If this aggregate dollar amount of disputed accounts exceeds $1,000, ALL of the disputed accounts must be resolved.  In other words, the accounts must be paid in full at or before closing OR a payment agreement must be in effect on the accounts and the borrower must show that a min of three months of payments on the agreement has been made in a timely manner.  All payments to be added to DTI for qualifying purposes.
3. Furthermore, regardless of whether or not the account is disputed, if the aggregate total of ALL COLLECTION ACCOUNTS exceeds $1,000, they must ALL be resolved, paid in full or a payment agreement established with a min of three months of timely payments.  If the total of collection accounts is less than $1,000, they are not required to be resolved/paid.  All payments to be added to DTI for qualifying purposes.
4. These collections include medical and CANNOT be paid down or under the aggregate to avoid paying off the total amount.  Example, borrower has 2- $600 collections, he cannot pay off one of the $600 collections to come in under the $1,000.00.  Both of these collections would need to be paid.
5. This does not include charge offs.  Charge offs should reflect accurately on the credit report and will not be treated as a collection.
6. FHA requires all judgments to be satisfied or an acceptable payment agreement established with 3 months of on time payment before a loan can be insured. All payments to be added to DTI for qualifying purposes.

Click here for a rate quote

I hope you find this information useful!  If you have any questions that I can assist you with, please call me, text me, Facebook me, twitter me, email me or leave a comment,  I am the Mobile Mortgage Pro, after all!

[youtube]http://www.youtube.com/watch?v=us9rLa1dbZM[/youtube]

The pinnacle and driving force of an FHA loan in Arizona and California is simply the Mortgage Insurance.  Many people never make the connection with what is different from any other loan  in Arizona and California.  FHA‘s flexible guidelines enables lenders to underwrite loans to its segment of the market is simply because the loans are insured by the Federal Housing Administration which is funded by the mortgage insurance that an Arizona and California homeowner pays monthly and the Upfront Mortgage Insurance Premium the FHA charges and finances into the loan.

Click here for a rate quote

As of April 9th, 2012, FHA is increasing it’s Annual Mortgage Insurance Premium as well as the Upfront Mortgage Insurance Premium.   The FHA states the following:

“after careful analysis of the market and the health of the MMI fund, we have determined that it is appropriate to increase mortgage insurance premiums in order to help protect our capital reserves and to continue encouraging the return of private capital to the housing market,” said Galante.  “These modest increases are one of several measures we are taking towards meeting the Congressionally mandated two percent reserve threshold, while allowing FHA to remain a valuable option for low- to moderate-income borrowers.”

Click here for a rate quote

So what does this all mean to you the  in Arizona and California consumer?  It simply means you will be paying more and this can affect your ability to qualify.

Annual MIP Changes for Case Number Assignments on or after April 9th, 2012

Loan Amount                                                   LTV                       Effective                  Annual MIP                         

Any Amount                                                    ≤ 95.00%                April 9, 2012            1.20% (currently 1.10%)

Any Amount                                                    > 95.00%                April 9, 2012            1.25% (currently 1.25%)

Increase to UFMIP
As of April 9th FHA will also be increasing the UFMIP from the current rate of 1 percent to 1.75 percent of the base loan amount. The  increase will apply regardless of the loan term or LTV ratio.  FHA, as always, will allow the Arizona and California borrower to finance this charge into the mortgage and will continue to calculate actual premium charges against the base loan amount and will continue to calculate actual premium charges against the base loan amount before the UFMIP.   This will be for any case number assigned on or after April 9th, 2012.

Click here for a rate quote

Example:

Annual/ Monthly MI

$100,000 base loan amount (96.50% of sales price) x 1.25% Annual MI = $1,250 Annual which is paid at a monthly rate of $104.67

Upfront Mortgage Insurance Premium

$100,000 base loan amount (96.50% of sales price) x 1.75% UFMIP = $1,750 which financed into the loan amount for a total of $101,750 as the total loan amount financed.

Click here for a rate quote

If you have any questions that I can assist you with, please call me, text me, Facebook me, twitter me, email me or leave a comment,  I am the Mobile Mortgage Pro, after all!