Category: Mortgage

24 Feb 2011

The Government’s Future Role in Mortgage Financing

Over the past few weeks there has been a lot of discussion about the future of Fannie Mae and Freddie Mac, along with the direction of FHA.   This is important to all of us in the Housing Industry, as currently the US Government either insures/guarantees or purchases about 90% of all Mortgages originated today. I think we are all in agreement that we would like to see Private Capital come back into the marketplace, but at this time that is coming very slowly.   There is no doubt that some changes should take place, but timing is going to be critical.   Having the Government pull back to soon and the Housing Recovery would be slowed even further.

21 Jan 2011

Loan Approval…What’s Involved?

Everyone has heard that mortgage financing is more difficult to obtain these days. What people may not be aware of, however, is the “why” behind the time it takes to get a loan approved and closed in the mortgage industry today.

Typically, your offer to purchase contract is written for a 30-day closing. In most cases, you would have already spoken to your Mortgage Consultant/Loan Officer (MC/LO)  to handle the prequalification for your loan.  Well, prequalification and full loan applications are two different things.

The most important thing you can do following prequalification is to meet with your MC/LO to complete the formal loan application. Make sure to have with you all your required documentation of income, employment and assets. In some cases you will also need to provide information on credit such as explanations for any late payments, inquiries, etc.

30 Dec 2010

See What Others See: Pull Your Credit Report Annually

As we near January 1st, we start to think about things we do at the beginning of each year, like making resolutions or changing the batteries in our smoke detectors.  This year, we are recommending you add one more thing to do at the beginning of each year and that is to review your own credit report.

Being in the mortgage industry, we see day in and day out the impact that a person’s credit can have on their ability to purchase or refinance a home.  While most people may know what they need to qualify, many don’t understand that even small positive changes to their credit score can result in a better rate.

14 Dec 2010

Mortgage Rates Increase

Rates have been rising over the past few weeks and although they are still at very low levels (the mid to high 4 percent range) they have jumped ½ a percent.  This is the most significant consistent increase since the lows that we experienced in October.

Why has there been an increase you ask? Well, rates typically move on stronger economic news which we have had in the form of some resolution of the European debt issues as well as stronger indications in the US economy. Keith Gumbinger, Vice President of HSH Associates, state in a recent article on that, “General improvement in the economy over the last couple of weeks has also had an influence on the rise in rates.”

17 Nov 2010

A Drop in Foreclosures … But Why?

This just in: foreclosures dropped 9% nationally in October.

At first glance, this sounds like it would be good news right? A closer look however, will show that it all seems to directly relate to the freeze in foreclosures from the robo-signing scandal. Last month, when it came to light that many of the Banks Loss Mitigation Departments had not properly reviewed foreclosure documents, there was a lot of pressure on banks to suspend foreclosures.

Initially, many banks did just that which, in turn, interrupted scheduled closings of foreclosed properties. After two weeks however, many banks decided that they had properly reviewed their procedures and felt confident that they had taken the appropriate steps to right “their wrongs.” Soon after, the foreclosures resumed.

14 Oct 2010

Foreclosure Freeze: What Buyers and Sellers Should Know

In the past 3 days there has been a lot in the press about the foreclosure freeze and its affect both globally and locally.  Here is an update from Monday’s blog post.

Banks and mortgage services are working at a fast pace to determine if they have any internal processing issues.  Some banks, such as Bank of America, have completed their initial review in judicial states and have found the “underlying facts supporting foreclosures to be accurate.” 

Banks are also reaching out to buyers under contract on previously foreclosed properties and asking for 90 day contract extensions while they ensure that the paperwork is in order and the title is clear.

The majority agree that buyers of foreclosed properties will face delays and sellers in the foreclosure process will have to both modify their loans and reside in their homes for a longer period of time.  But it appears that the banks are moving quickly to get issues resolved so they can keep the processes moving forward. The potential cost to the banks for delays could be in the billions so it is in their financial interest to get the investigations underway and completed.

8 Sep 2010

Is FHA’s 203k Streamline Loan For Me?

Listen up buyers! The FHA has an underutilized program that could be a good option for many of you.  I am sure that when you are looking at houses to purchase you find some that would be perfect if only the outdated kitchen was updated or maybe it would be great if only it had a deck off the back of the house.  Other times you look at properties that may be short sales or foreclosures that need some basic sprucing up such as painting, carpeting, new appliances etc.

There was a time not so long ago that you would have just closed and gotten a home equity line of credit  at the same time, which would allow you to take care of improvements or repairs.  With Home Equity lines requiring much more equity in the property, those buyers with limited down payments may think they have limited choices.

26 Aug 2010

Move Up Buyers and the Mortgage Process

If you ask many loan officers, although dealing with first time homebuyers is challenging, it is easier to set the right expectations on the mortgage process as they have not been through it before. Today’s first-time homebuyer never experienced the easy mortgage process prevalent in the late 1990’s to 2007.

The most difficult group to set expectations with are move up buyers or refinance customers.  Most of them bought homes during the 1990’s to 2007 and in many cases did not have to provide anything in terms of documentation.  At the most they provided paystubs and bank statements and usually just the first page of their bank statement.   They did not have to write explanations for recent inquiries or address old credit issues.   As for the requirement for all loans to have tax transcripts pulled( what is called a form 4506), this entails the lender getting confirmation back from the IRS that the tax returns given were indeed filed and are accurate.

17 Aug 2010

Why use a Licensed Loan Originator?

July 31st 2010 was a very important date for all Mortgage Bankers and Mortgage Brokers.  This date was the last day for Loan Originators to register with the new National Mortgage Licensing System(NMLS), take 20 hours of Continuing Education,  go through a background checks, fingerprinting and pass both the National Mortgage Exam, as well as any State exams where they lend in.

This is a new requirement set forth by the S.A.F.E. Act, to ensure that the standards of mortgage lenders remain increased and consistent.  What you need to know about this is that this does not apply to Loan Originators who work at Banks, they were exempted from this law.

6 Aug 2010

Shopping for the Best Home Loan for You

Comparison shopping can be tedious and time consuming, which means that consumers often put it at the end of their to-do list (I’m as guilty as the next person). When it comes to Mortgage Financing however, comparison shopping needs to be at the top of the list. We all know it is a daunting process once you get started, but for the largest purchase of any consumer’s life, there are many people who contact just one lender.

A recent article in Origination News stated:

“A survey for Zillow Mortgage Marketplace conducted by Harris Interactive found that consumers spend on average just five hours researching their home loan. The same finding was determined in a 2008 survey that Zillow conducted.


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