As if the debt crisis hasn’t hurt Arizonans enough.  For those Arizona residents who have lost their homes due to foreclosure; be on alert for sneaky creditors and lenders who attempt to collect on a debt that is secured by the foreclosed property.  Unfortunately Arizona’s residents fall victim to the economic times and are threatened by these creditors into thinking that they still owe the bank the money for the second mortgage or equity line of credit.

If you or someone you know finds yourself in this situation, call an Arizona  real estate attorney immediately if any creditor attempts to collect on a debt secured by the foreclosed property. These lenders may try to collect when in reality they have no right to do so.   As in all things, each situations can be unique.  If the consumer is a casualty of foreclosure, they should contact an attorney and have the attorney take a look at their specific situation and/or potential liabilities as soon as possible.

In a foreclosure proceeding, the first mortgage is given preference over the subordinate or subsequent mortgages. In today’s Arizona home market this process frequently leaves subordinate mortgages entirely unpaid after a foreclosure. Understandably, these lenders are pursuing all means possible to recover their losses, but often times they have no legal recourse.

In fact, I had read an article written on a case where an Arizona attorney had counseled a homeowner who lost their home to foreclosure.  The homeowner’s second mortgage lender filed a lawsuit trying to recoup over $40,000 it claimed that the homeowner owed.   Their attorney filed a Motion to Dismiss the lender’s lawsuit pursuant to A.R.S. § 33-729(A), which states that “a lender is barred from pursuing any action against a borrower if the mortgage was obtained to purchase the home”. After receiving the attorney’s Motion to Dismiss, the lender soon figured out that this wasn’t going down the way they had planned.  They immediately dismissed their case and even paid the client’s attorneys’ fees.

***Now pay attention because this is the fine print to the story.    Even though this and other legal statutes may rule out certain actions post-foreclosure, in some cases, a lender can be entitled to obtain a deficiency judgment. There are strict rules and time limitations, however, that vary from state to state for such actions.  Since every situation is unique, the best thing you can do is contact an experienced real estate attorney and get the right answers that pertain to your situation.

Allow me to introduce Academy Mortgage’s “Buying After a Short Sale Program” In Arizona. 

This may sound too good to be true but nonetheless, its true.  We are now accepting and approving families who have a short sale in Arizona.   To be very clear, this is not a program to incite or encourage people to bail on their homes with a short sale.   Academy Mortgage understands that due to Arizona’s extreme economic situation, families have experienced hardships that have forced them to have to short sale their homes in Arizona.   The following is exactly our guidelines and requirements.  If you or someone you know has a short sale and fits the following criteria, please call us for a free, no hassle credit evaluation.

There is no time limit after the completion of the short sale (title is transferred to the new owner) to the credit approval date on a new loan as long as the file meets the following requirements:

Must be able to indicate and document to the best of the borrowers’ ability:

1. Evidence that the borrower did not Short Sale their previous property to take advantage of declining market conditions, and / or

2. To purchase another property, at a reduced price, a similar or superior property within a reasonable commuting distance. (No less than 100 miles as directed from HUD)

3. If the purchase is happening under 100 miles from previously short sold property, the underwriter must confidently address that the new property being purchased is due to standard FHA requirements for employer relocation requirements or outgrew previous property for family size, etc.  ******Documentation from 3rd parties is the key to fulfilling these requirements; an LOE independently will not satisfy the due diligence required by the underwriter to support their decision.

4. Proceeds from the short sale serve as payment in full.

5. Concurrent short sale transactions are not eligible and must be unrelated to the current transaction.

6. Letter of explanation from the borrower(s) that lead to circumstances of the situation.

7. Must have AU approval, may not be manually underwritten

8. Minimum FICO requirement of 680

9. New purchase must be at least 100 miles per HUD from borrower’s previous residence (see ‘c.’ above).

10. 0×30 mortgage lates in previous 12 months leading up to Short Sale

Borrowers in default on their mortgage at the time of the short sale (or pre-foreclosure sale) are not eligible for a new FHA-insured mortgage for three years from the date of the pre-foreclosure sale. Borrowers who sold their property under FHA’s pre-foreclosure sale program are not eligible for a new FHA-insured mortgage from the date that FHA paid the claim associated with the pre-foreclosure sale. Lenders may make exception to this rule for borrowers in default on their mortgage at the time of the short sale if:

1. The default was due to circumstances beyond the borrower’s control (such as death of a primary wage earner, long term un-insured illness, etc.), and

2. The review of the credit report indicates satisfactory credit prior to the circumstances beyond the borrower’s control that caused the default.

Borrower in default at the time of Short or Pre-foreclosure Sale, or not meeting above criteria:

Only Eligible if initial loan application is dated:

•  3 years following completion of the short or pre-foreclosure sale (non-FHA loan), or
• 3 years following FHA’s payment of the claim for pre-foreclosure sales on FHA loans.

Call us today for a credit consultation on your Buy After a short sale program!

As the year kicks off to its start, it is a good time to ask your Arizona mortgage lender questions as to any changes in regulatory and guideline requirements. As we have all experienced in the last couple of years, home loans have had changes after changes. Being we have just entered 2012, you can bet your wallet that more changes are coming and some have already arrived. The changes have mortgage advisors, real estate agents and consumers heads spinning.

One program that has its share of restrictions is The USDA Guaranteed Home Loan Program.  One of its requirements is that a family’s total household income must be included to determine if the borrower is eligibile for the USDA Guaranteed Home Loan Program in Arizona.

The USDA Guaranteed Home Loan Program requires that a family’s total household income not exceed 115% of the median income***; which varies from county to county in Arizona.  Apparently, the Department of Housing and Urban Development (HUD) was supposed to release its annual Income Limits dataset in March or April 2012 but instead this year’s data was released in December 2011.

So what does this mean for you?

Beware that USDA looks and considers almost everything as income except child support.   For example,

• you are overseas on a company project your company pays you an overseas stipend and it reports on your paystub, ITS INCOME!
• If you were paid for training before you started a position or assignment and it reflects on your paystub, ITS INCOME!
• If you are given an auto allowance, ITS INCOME!
• If your employer pays you some form of bonus, shift differential, stipend, etc and does not reflect on your paystub and if the lender learns of it by way of an “Employment Verification”, ITS INCOME!

Why so important? 

The amount of income will determine your eligibility for a USDA Guaranteed Home Loan Program thats why.  As a consumer, if you do not fully disclose to your mortgage advisor any and all forms of income you can; possibly later in the loan process; experience problems getting a loan.

If you receive any payments and/ or income that falls outside of what you are paid on your weekly, bi-weekly or monthly check or you are not sure, bring it to your home loan advisors attention allow them enough time to research whether it will be required to count as income.  This will help you and your home loan advisor avoid any pitfalls and disappointment in your process.

If you are looking for or considering a USDA Guaranteed Home Loan Program in Arizona, feel free to contact me directly with your questions and I will return you an answer as promptly as possible.  I can be reached at 480.650.8602 or ted@tedcanto.com

Below you will find the 2012 USDA HOUSEHOLD INCOME Matrix. USDA has the Arizona counties and family size listed in the columns.

***(HUD is required by law to set annual income limits for participation in federally assisted housing programs such as the USDA Guaranteed Home Loan Program, to name a few. These income limits are determined by calculating a median family income for areas all across the country, and then adjusting the median based on the number of people in the household. Different federal programs have different requirements.)

Click here for the:  2012 USDA MAX. TOTAL HOUSEHOLD INCOME LIMITS MATRIX

Every year HUD releases the country’s median income which can vary state to state and county to county.  The USDA Guaranteed Home Loan Program requires that a Arizona home buyer’s total household income not exceed 115% of their county’s median income in Arizona.  If you are looking into USDA financing, you want to ensure that you look up your county, family size and total household income to determine your eligibility for the USDA Guaranteed Home Loan Program in Arizona.   If you have questions you can always call me, Ted Canto, @ 480.650.8602 or your local lender. 

PROGRAM                                                          1-4 PERSON        5-8 PERSON

FHA Less Than 90 Day Flip Rule Waived In Arizona and California for 2012

As of today 12/23/11, FHA announced that the 90 Day Flip rule be waived and extended through 12/31/2012, unless otherwise withdrawn or extended by FHA in Arizona and California. 

As you can imagine many Arizona and California investors, agents and buyers are relieved to know that the less than 90 Day FHA Flip Rule has been extended.  Let’s hope that FHA comes to their senses and gets rid of the less than 90 Day FHA Flip Rule in Arizona and California, all together.   The fact is that the less than 90 Day FHA Flip Rule was originally put in place to prevent the predatory practice of property flipping in Arizona and California; in which properties are quickly resold at inflated prices to unsuspecting Arizona and California borrowers and where the property is does not meet FHA‘s standards that protects Arizona and California home buyers from possibly costly repairs and a hazardous ability to live in the house; however with FHA‘s less than 90 Day FHA Flip Rule waiver, FHA have enough safe guards in place that this would prove to be very difficult to do.  

In most, if not all, cases the FHA Less Than 90 Day Flip guidelines ensure that Arizona and California buyers are purchasing a home that is not only worth the sales price but that has been upgraded or fixed to FHA‘s strict liveable requirements.  Arizona and California home buyers of a property that is a less than 90 Day FHA Flip property can rest assured that their investment is well worth it and that the lender and FHA will ensure that they are not buying a money pit. 

The great news is that most Arizona and California investors in today’s market know and understand that their properties need to be in great shape to sell it, especially with an FHA loan. 

The information has been included for your convenience.

Requirements 0-90 Day Flip w/ less than 20% Increase from Last Sales Price originated on or after 3/2/10

• Maximum DTI Required N/A 50% Regardless of AUS Findings
• Minimum FICO Score Required 640, All Borrowers
• Owner Occupied Only
• Non Arm’s Length
• One (1) Appraisals No
• No Property Inspection Required
• Non-Occupant Co-Borrowers Not Allowed

0-90 Day Flip w/ greater than 20% Increase from Last Sales Price

• Minimum FICO Score Required 640, All Borrowers
• Owner Occupied Only
• Non Arm’s Length
• Two (2) Appraisals*
• Property Inspection Required
• Non-Occupant Co-Borrowers Not Allowed

ALL HOMEBUYERS:

1. Copies of W-2’s for the last two years;
2. Copies of paycheck stubs for the last 30 days (most current);
3. Copies of checking and saving account statements for last three months (all pages);
4. Copies of quarterly or semi-annual statements for checking, savings, IRA’s, CD’s, money market fund, stock, 401k, profit sharing, etc.;
5. Copy of sales contract when ratified;
6. Employment history for the last two years (address any gaps of employment);
7. Residency history over the last two years, with name, phone number, address and account number of Land or Mortgage Company. Rental property copies of leases plus mortgage information.
8. Canceled earnest money check when it clears or corresponding bank statement, if applicable;
9. Commissioned or bonused income — if 25% or more of base, must have tax returns;
10. Check for the expense of appraisal & credit report;
11. Refinance Copy of Note, Deed of Trust, Settlement Statement, Survey, and Insurance information;
12. Any assets used for down payment, closing cost, and cash reserves must be documented by a paper trail;
13. If paid off mortgage in the last 2 years, need copies of HUD1;
14. Copy of drivers license for applicant and co-applicant.
15. Copies of your most recent 2 years tax returns
16. Copy of social security card for each applicant and co-applicant

SELF-EMPLOYED HOMEBUYERS:

1. Copies of most recent 2 years tax returns (with all schedules including k-I’s if applicable);
2. Copy of current profit & loss statement and balance sheet;
3. Copy of corporate/partnership tax returns for most recent 2 year period if owning 25% or more of company — copies of W-2’s and/or 1099 forms.

DOCUMENTS WHICH MAY BE REQUIRED:

1. Relocation Agreement if move is financed by employer, i.e. buyout agreement plus documentation outlining company paid closing costs benefits;
2. Previous bankruptcy, need copies of petition for bankruptcy and discharge, including supporting schedules;
3. Divorce Decree if applicable;
4. Documentation supporting moneys received from social security/retirement trust income, i.e. copies of direct deposit bank statements, awards letter, evidence income will continue.
5. Mortgage payment statement on properties owned
6. Homeowner’s Insurance Agent contact information
7. **Non-Purchasing spouse’s personal information (name, social security number and income)

DOCUMENTS NEEDED FOR FHA/VA LOANS:

1. FHA: Copy of social security card and drivers license for each applicant and co-applicants;
2. VA: Original Certificate of Eligibility and copy of DD214 Discharge Paper;
3. VA: Name and address of nearest living relative

Here we go again!  The House passed HR 674 and the Senate is waiting to get the President’s signature.   This bill will help to keep the VA Funding Fee at the current higher level through at least 2016.   Real estate professionals will experience a lapse of the VA Funding fee until the President signs the bill.

If this happens, Academy Mortgage will be requiring that all loans continue to close / fund and for new loans disclosed at the higher VA funding fee structure.  If the delay causes the veteran to overpay the VA funding fee during the lapse, Academy Mortgage will refund the difference via a Principal Curtailment if the VA Funding Fee was financed into the loan, if paid in cash, then a check will be issued for the difference.

This information is to inform you better on how to consult your clients when they are applying for VA Home Loan in Arizona and California.

Finally U.S.  lawmakers have used their heads and reached an agreement to increase the size of home loans backed by the FHA (Federal Housing Administration) over opposition from some of the “Don’t get it” House Republicans and free-market interest groups.

Lawmakers drafted the bill to reconcile a package of spending bills agreeing to increase a higher limit of $729,750 (in some high cost areas) to FHA-insured loans, while leaving the conforming loan limit by mortgage companies Fannie Mae and Freddie Mac at the current level of $625,500

The limits, which vary by locale, currently apply to loans backed by the FHA and Fannie Mae and Freddie Mac, which together buy or guarantee about 90 percent of all residential home loans.

Bipartisan Support

If the legal talking heads approve the final measure, FHA‘s loan limit would be raised a little more than a month after it was reduced to $625,500.

The Senate in October backed the increase to FHA and GSE limits with bipartisan support. The resulting debate has split housing and financial services industry trade groups and has brought the opposition of groups like the Club for Growth and Americans for Prosperity.

Lawmakers who back the higher limits are concerned that any withdrawal of federal support could undermine the frail housing market, which I agree with… DUH!!   Too bad they don’t live on earth like the rest of us.   As real estate professionals, we know what is actually happening on the street and we know that this is a huge benefit to the real estate recovery.

Academy Mortgage

Once FHA issues the official Mortgagee Letter, Academy Mortgage will issue a more formal announcement once the following occurs:

1. President signs the bill
2. HUD issues a Mortgagee Letter addressing this topic
3. Our primary investors distribute their guidance on this change

We are not currently aware on how quickly this will all move.  We want to encourage you that we will advise you the moment we get our clarity from HUD and our investors.

HARP Refinance For An Upside Down Mortgage in California

The upcoming HARP program; that will help American families like you on their upside down/underwater mortgages; will be released tentatively on November 15^th. The HARP Program (Home Affordable Refinance Program) is designed to help home owners like yourself; who are opting to stay in their home in San Diego County, Orange County, Los Angeles County, Riverside County, San Bernadino County, Santa Clara County and San Francisco County; to refinance their upside down / underwater mortgages into historical rates and great terms which will help also assist in lowering your payment.

This video has the U.S. Housing and Urban Development Secretary Shaun Donovan speaking about the upcoming changes to the program.

The old HARP Program?

The old HARP refinance program had a loan-to-value cap of 125%, many lenders imposed their own overlaying guidelines which limited the program to somewhere between 95% to 105%.

What is the new HARP Phase 2.0?

The newly updated HARP Phase 2.0 Program has been revised to help Americans like you, who have experienced a dramatic decrease in their home value. While this sounds very optimistic, keep in mind that the initial implementation of the first phase of this program did not help many homeowners. In fact, HARP Phase 2.0 was implemented as result of it’s own failure. Until they come out with full details, no one is going to know exactly how it will work and as to who will benefit from the program. The major change in the program was mainly (not all) to allow lenders to refinance your home without regard to the value on your home. Of course you will still need to qualify and there will be costs involved but the appraisal seems to be the key element. This was achieved as a result of the HFHA or Federal Housing Finance Agency eliminating the ceiling of 125% of the loan to value cap it had previously.

How Can HARP Help you?

No matter how upside-down you are, if you have a Fannie Mae or Freddie Mac loan, you will have an opportunity to qualify for the program. If you are currently employed, have made your payments on time, have a good credit score and your income qualifies for the new mortgage payment combined with your debt, you may be a candidate for the new HARP Program.  The program will help you capture some of the awesome rates and lower your monthly payment which I am sure we can all use in this economy and put money back in your pocket. 

How does it work?

The difference in the new HARP Program difference is that FHFHA took away Fannie Mae & Freddie Mac’s provision that held lenders accountable on the default rate of those loans. Most lenders would have to ‘buy back’ a loan if the homeowner defaulted (didn’t continue making payments on time) or went into foreclosure thus costing the lender thousands of dollars if not millions over the long term.

The Federal Government realized that many American homeowners like you; who made their payments on time and have no intention of buying and bailing on their current home; needed assistance in improving their financial position by taking advantage of the historically low rates.  Homeowners in the San Diego County, Orange County, Los Angeles County, Riverside County, San Bernadino County, Santa Clara County and San Francisco County will now have an opportunity to speak to a lender and explore their options of lowering their rate and improving on the terms of their loan. Please keep in mind that this is not a loan modification, it is a refinance and you will need to qualify and there will be closing costs associated with the transaction just like any other refinance.

If you are not sure if your home loan is owned by Fannie Mae or Freddie Mac?  Fannie and Freddie have an online site where you can input your address and it will tell you whether or not your loan is owned by them. Go to : Fannie Mae Lookup or Freddie Mac Lookup

For more information you can contact me -> Here

or

To apply for a HARP Refinance Rate Quote, you can click > APPLY