Apparently HVCC is a means for Appraisal Management Companies (A.M.C.'s) to gouge my valued clients.
We are doing mostly FHA purchase and streamline refis at this time, so I hadn't yet had the occasion to experience the HVCC appraisal ordering process. Boy was I in for a shock! Taylorbean has contracted with an AMC called Security One. I submitted my loan, locked the rate and went to order the appraisal via there on line system. When it came to the cost, my jaw hit the ground. My mortgage practice is located in an area where appraisals typically cost $325-$350 for single family homes. When I finished the order form, and $450 was the indicated price, I thought I had done something wrong. I started over 4 times, getting the same result before I contacted my A.E. I was doing it right. I then called Security One, to let them know I would not allow them to GOUGE my client, and that I would no longer do business with Taylorbean or any other lender they were associated with.
Are any other Mortgage Brokers finding similarly high prices with this new system? I hope this is isolated, but then again I don't as I'd like some more amunitiion to get rid of this assinine rule.
Housing was hoping to get a big boost from the latest addition to the mammoth stimulus bill working its way through Congress. Senate legislators unanimously approved a proposal earlier this month that would allow a tax credit for home buyers of 10 percent of the value of new or existing residences, up to a $15,000 limit. However, it did not make it in to the recent "stimulus package". Current law provides for a $7,500 tax break but only for first-time homebuyers. "It is time to fix housing first," said Sen. Johnny Isakson, R-G. Isakson's office said the proposal would cost the government an estimated $19 billion. In all, the stimulus reached a total of just under $800 billion. Proposals to move rates on real estate loans down to 4.0% did not carry in the Senate. (Thanks guys, I'd rather have pork anyhow!) Source: The Associated Press.
The U.S. House will vote on a bill to overhaul the Hope for Homeowners program, which by many accounts, has been a flop so far. Congress approved the program in July with the hope that it would aid 400,000 home owners. So far the program has attracted only 451 applicants and just 25 loans have closed. (That's 25! Out of how many millions of homeowners!!!) "HOPE for Homeowners, was designed to help families refinance into safer, more affordable loans, in many cases helping those families avoid a devastating foreclosure," says NAR President Charles McMillan. "Despite being well-intentioned, the HOPE for Homeowners program has had limited success. Lenders have found the program difficult to participate in because of many of the program's constraints." The proposed revision to the program will lower participation standards, cut costs for consumers and reduce the cost of implementation for lenders. The proposed reform will also provide a safe harbor for loan servicers that modify loans and make permanent the increase in deposit insurance to 250,000. Source: Reuters News
So what can we conclude? Politicians like to grand stand and reporters like a good scoop (whether its the truth or not)! It is generally agreed upon that the housing market is exceedingly important to our economy and consumer sentiment, however, the powers that be have (to date) essentially ignored it. The proposals so far, when projected out in to the future, would appear to do more damage than good...
My $.2: Increase the tax credit to $15,000, do not require it to be paid back over 15 years as is currently is required, pressure Fannie and Freddy to slightly loosen underwriting guidelines for well qualified buyers and investors, and to get rid of their Loan Level Price Adjustments (which increase rates significantly when greater than 70% of a home's value is borrowed and the credit score is under 740), and most importantly find a way to keep rates around 5% or lower for as long as is needed!!!
PS: FHA is still doing a great job approving folks with verifiable income and credit over 620. USDA still allows for 100% purchase financing in the less populated areas and for low to moderate income families. For us RhodeIslanders, most of the western part of the state meets that guideline. For more info please visit www.myRImortgage.com
Sean Wheelan Personal Mortgage Consultant The Mortgage Group, Ltd 401-965-9384 Cell SWheelan@TMGLtd.biz Email www.myRImortgage.com Web Site 508-276-0171 Fax
Have a great day!
PS: While my business is good and growing steadily, it is important for you to know that I am NEVER too busy to help those you refer to me: your family, friends, neighbors, and coworkers.
Residential Loan Application: This document (when complete) gives us an accurate picture of your whole financial situation. By signing this form you are stating what you know to be true regarding all pertinent information regarding your financial status.
Good Faith Estimate: This document breaks down the costs of obtaining the mortgage, the required pre-paid items, and the required amounts to be deposited in the escrow account. When comparing costs between lenders it is always best to compare interest rate and closing costs (not including escrow and pre-paid items) to get a more accurate picture of the lender's program.
Truth In Lending: This is a Federal form that was created for the consumer to help them better understand the effective rate of borrowing money with closing costs included (A.P.R) and the amount of interest paid over the life of the loan. This document also sets forth any special clauses like whether the loan has a pre-payment penalty or if the mortgage is an assumable mortgage.
Servicing Disclosure Statement: This document explains that we are a broker not a bank. Most banks will service their loans that includes taking your monthly payments, handling your escrow account, and answering your specific loan related questions after your loan has closed. Up until your loan closes we will be your point of reference for any loan related questions. After the loan closes however, we transfer all the rights to your loan to the specific lender we chose for you. From this point on you may contact your lender directly. We transfer 100% of the servicing to the specific lender we approve you with, but please remember if you have any problems with your loan and the lender is not handling it to your standards, feel free to contact us and we will intercede for you.
Borrower Signature Authorization: This gives us your permission to verify the information you've given us with your mortgage lender(s), employer(s), creditor(s), landlord(s), bank(s), and any other source we may need to obtain information from. In other words, this is your written consent that we send to let them know you (their customer) is the person ultimately requesting they respond.
Mortgage Loan Origination Agreement: In some circumstances the lender may offer the opportunity for the customer to pay less up front costs in trade for a slightly higher interest rate. However, this program may not always be available. By paying points or origination fees you may obtain a lower interest rate and save more money over time. Please request more information from your loan officer to determine what type of interest rate and closing cost scenario would best suit your needs.
Right to Receive a Copy of Appraisal: Every borrower has the right to receive a copy of his/her appraisal once it has been completed and paid for.
Equal Credit Opportunity Act: This document discloses the fact that we do not discriminate against borrowers based on race, color, religion, national origin, sex, marital status, age, or for any other matter.
Request for Copy of Transcript of Tax Form (4506): This form allows the lender to get a copy of the taxes you filed with the Federal Government and compare them with the copy of taxes we've submitted to them for quality control purposes. This form is typically only required for self-employed borrowers or customers who are paid on commission.
Rate Commitment Option: This form explains our rate lock policy and confirms our conversation with you at the time of application.
Many states also have unique disclosures. For example, my home state of RI has 5 state specific disclosures. Their intent is to make sure transactions have a tangible net benefit, borrowers are educated, they do not participate in "flipping" and that they understand what a "high cost" and sub prime loan consists of.
Lots of good points, and I begrudgingly agree with the blogger on most counts. In my area (southern New England) we are seeing bidding wars on some properties which gives me some hope! To be fair though, it is on the REO's that are in good condition and freshly on the market. Many bank owned properties are about to enter year 2 on the market, making it increasingly difficult to move them. This has caused a certain segment to get out and grab their home at a good value, but for those homes with a lengthier time on the market, it only hurts the bigger picture.
If you are looking to buy a home be prepared to make your offer at list price (you will still be getting a good deal). The good ones are moving quickly. If you are looking to refinance, A bird in hand (5%) is worth 2 in the bush (4.5%). Market speculating simply does not work. If it makes sense to refinance or buy a home TODAY, do it today and you'll be happier tomorrow!!!
All and all, we have some positive blips, but 2009 will be another very challenging year. I'm up for the challenge, how 'bout you?!
* * * * DANGER! HARD CORE REAL ESTATE TALK AHEAD. * ** *
REAL ESTATE IN 2009 WILL BE . . . . . ?
It appears that we've seen fewer year end predictions for the coming year, 2009, it's understandable since:
The economy is like a moving target.
Many predictions are more like a wish list.
The government is rearranging the deck chairs and a few passengers are going to go overboard.
Inspired by Jim Crawford who asks 10 questions about our predictions for 2008, this writing continues this series to have a comparative look-back for January 2010. Of course, the below are my thoughts and although I haven't been able to shake the negative predictions from a year ago, I realize that the economy and our business must be given the attention that it will take to survive and profit by concentrating on what is working and focusing on where the real estate business is.
1. Mortgage Rates Lower or Higher? Higher. Eventually, inflation will have to cause a reduction in the money supply and cause rates to go up for everything. With the mortgage mess and the concomitant losses by our foreign investors, sovereign wealth funds, etc., unless the government stops printing money, rates will have to go up. Now that worldwide investors have learned what happened to their money, they will be loathe to invest in U.S instruments and particularly any type of mortgage backed security.
2. Credit Loosen or Tighten? See #1.
3. Numbers of Agents in Your Market Up or Down?Down!!! Let me say it again -Down!!! The condition of the real estate market is no longer a secret although the NAR has tried to keep it so. While prospective new agents don't understand the business of real estate, they do hear the news and since the condition of the real estate industry is now on YouTube, FaceBook and the family next door was foreclosed. The growth of Buyers Agents will continue.
4. Real Estate Inventory Levels in Your Market Increase, or Decrease? Increase. I've seen them increase for the past 4 years and until the economy begins to grow again, what would cause foreclosures and short sales to decrease? I do expect foreclosures and short sales to begin to be a larger percentage of the overall inventory in areas where they have just begin to grow. Resetting 3-5 year ARMs and negative equity will cause more foreclosures.
5. Better Real Estate Market or Worse? Worse. Overall slowing of the economy, higher unemployment, higher taxes, more restrictive and expensive mortgage financing will worsen the real estate industry in 2009. Slower auto sales will impact many segments of the economy causing middle class home buyers to stay where they are.
6. Buyer's Market or Seller's Market? Buyer's Market. By the classical definition, "more sellers than buyers", we have a buyer's market. This will make pricing increasingly harder as comparative sales become harder to find. Home owners with negative equity will not be able to sell NOTE: There is some movement on the bankruptcy code, but that will help only a small percentage of home owners.
7. More Foreclosures or Less? More. As ARM mortgage instruments reset and payments increase beyond many home owners' ability to pay, natural relocations for employment and inability to sell for what is owed will send more homes to the foreclosure market.
8. Homes Sales Prices Flat, Rise, or Fall? Fall. Foreclosure sales, short sales, relocation sales and other market forces will force prices down. As unemployment continues to grow, the median incomes will qualify fewer buyers.
9. Condo Sales Prices Flat, Rise, or Fall? Free Fall!!! As the price of town homes and single family detached homes fall, condominium homes will return to their historical position as the "last resort home" available for lower price buyers. Defaults on condo fees will cause higher overall condo fees and disqualify many prospective condo purchasers.
10. Commercial Real Estate Stay Strong or Start to Soften? Continue to Soften. General slow down in the overall economy will cause a retraction in commercial real estate investment. Commercial real estate is sensitive to the world economy. That's already happened and continues. Shopping centers have increased vacancies, retailers are consolidating locations and closing shops. About the only REITs that might show a profit are those that invest in medical and health facilities.
I have recently taken some good information found right here on A.R., and put it to use!
In today's challenging market we need every tool available. I have recently gotten some very good results from my FaceBook page. My concentration has always bent towards deepening relationships both new and old via my facebook account. My "friends", for example, consist almost 75%, of people I've known for 20 years or more. I use other sites like, LinkedIn for my professional associations. From time to time, however, I insert a business related status update or industry comment. This has yielded 7 inquiry calls and 3 applications over the last 3 weeks, one of which is scheduled to close in 2 weeks. All of the activity was from old friends who I've known for 2 decades or more.
In a nutshell, over a very short period of time, I've built a small personal network that is beginning to pay dividends by rekindling old friendships via a convenient permission based interface. This is a low impact way to market myself, with the primary goal of "friends first". The trust is there, I just want to subtly remind them I'm one of the most trusted and reputable Mortgage Consultants in the area.
I just launched my FaceBook Blog to enhance my presence in the FaceBook community. Please click on it: Sean's FaceBook Blog and help to verify me as an author. Thanks in advance as I need 11 readers to verify me as the author!
The next phase is to launch a Community Page (RI Real Estate Financing, Neighborhood News and Real Estate Group), so that I can facilitate my friend's ability to network and highlight their skills within our combined networks. All things being equal, wouldn't it be great if you could support your friends by supporting their businesses? I hope to facilitate that via communities both on line and off!
Happy New Year!
PS: While my business is good and growing steadily, it is important for you to know that I am NEVER too busy to help those you refer to me: your family, friends, neighbors, and coworkers.
The government is handing out money as a long term loan. Take advantage of this!!!
The Housing and Economic Recovery Act of 2008 produced the tax credit for First Time Homebuyers. In this case, to be eligible for the tax credit, a first time homebuyer is defined as : someone who had not owned a home from July 2, 2005, through July 1, 2008. In order to become eligible, you have to buy your home after April 8, 2008, and before July 1, 2009. I will go over some of the other guidelines later.
When it comes to buying a home, you can't borrower money to use as a down payment or for closing costs. And you can get county or state assistance under certain programs or grants, to use for your new home purchase. But when it comes to FHA loans, you can actually get 100% gift monies from a relative. It's called a gift because HUD doesn't want the burden of you having to pay back a loan after buying a new home. Hence why this tax credit is still a great way to help you get into a new home prior to July 1, 2009. And you can still get up to 6% seller help even if you were to get a 100% gift from a family member.
So, how does this tax credit work? Please read below for some details :
The maximum tax credit is $7,500 for either a single taxpayer or a married couple filing jointly. It is 10% of the purchase price. So in order to get the maximum credit, the purchase price must be $75,000 or more.
This credit is an interest free loan and the credit must be repaid over a 15 year period. This loan must be paid back by including one-fifteenth of the amount credited, or $500, as an additional tax on their 2010 return.
There are income restrictions which can range from $150,000 to $170,000 for a joint return or from $75,000 to $95,000 for a single return. There are other factors involved when determining the actual income restrictions.
This credit can't be used if you are buying a home from a close relative, which is to include a spouse, a grandparent, child, or even a grandchild.
You can only use this tax credit for your primary home, not for a second home or an investment property.
There are some other restrictions, examples, and explanations to how this tax credit can work. For more information, please read : Tax Credit for First Time Homebuyers
An example of how this tax credit could work :
If you were to receive a $2,000 refund when filing your return, and you were eligible for an additional $7,500 if you choose to receive this credit, this means that your refund will now be $9,500 instead. On the flip side of things, if you were to owe $2,000, you would actually get back $5,500 instead of owing money.
One thing to keep in mind.... you can use this money for anything. How could you use this money?
You could use it to repay other loans or debts.
To invest in the market or CD's.
To buy another property such as an investment property. But you would need to understand the seasoning requirements when putting this kind of money into your bank account.
Use the money to fix up your new home that you just bought.
To start a business.... to help a business grow.
And as mentioned, FHA loans allow for 100% gift monies from a relative. Maybe you could thank them later on and give them the money back down the road. I know I wouldn't want this hanging over my head. As of January 1st, 2009, when buying a home with a FHA mortgage, you now need 3 1/2 percent down of your own money (gift monies allowed).
Lastly, talk to your tax accountant when it comes to the specifics of this tax credit and in regards to gifts and what is allowed before being taxed.
Happy house hunting. For a creative way to help you finance your new home, please don't hesitate to contact me. There are so many options out there and you need a creative loan officer that knows more than just the basics.
The details below outline the new 2009 FHA loan amounts for RI as well as transition dates for the temporary FHA Jumbo Loan program.
2009 FHA Loan Limits
Effective November 14, 2008, FHA loan limits are calculated at 115% of the area median sales price.For 1-unit, the FHA floor remains at $471,050 and the ceiling is now calculated at 150% of the conventional floor, or $625,500.
FHA Mortgage Limits List
MSA Name
MSA Code
Division
County Name
County Code
State
One-Family
Two-Family
Three-Family
Four-Family
Last Revised
Limit Year
PROVIDENCE-NEW BEDFORD-FALL RIVER, RI-MA (MSA)
39300
BRISTOL
001
RI
$475,000
$608,100
$735,050
$913,450
03/05/2008
CY2008
PROVIDENCE-NEW BEDFORD-FALL RIVER, RI-MA (MSA)
39300
KENT
003
RI
$475,000
$608,100
$735,050
$913,450
03/05/2008
CY2008
PROVIDENCE-NEW BEDFORD-FALL RIVER, RI-MA (MSA)
39300
NEWPORT
005
RI
$475,000
$608,100
$735,050
$913,450
03/05/2008
CY2008
PROVIDENCE-NEW BEDFORD-FALL RIVER, RI-MA (MSA)
39300
PROVIDENCE
007
RI
$475,000
$608,100
$735,050
$913,450
03/05/2008
CY2008
PROVIDENCE-NEW BEDFORD-FALL RIVER, RI-MA (MSA)
39300
WASHINGTON
009
RI
$475,000
$608,100
$735,050
$913,450
03/05/2008
CY2008
To determine the maximum loan amount for a given property, go to
Give your MORTGAGE and CREDIT REPORT an annual once over.
If the last time you looked at your mortgage was when you closed on your loan, it’s time to take it out for an annual once over. New loan programs and opportunities to leverage your home equity can bring you lower mortgage payments and new investment opportunities.
Tax season is rapidly approaching, the time is right to review your overall financial picture. Your mortgage is a pivotal piece and should be viewed as a financial instrument that can help or hinder your goals. What role is your mortgage palying?
For a FREE no obligation consultation, contact me and set up an appointment today!
Read on...
Is a fixed rate mortgage the best choice for you?
Many of us opt for the certainty of a 20 year or 30 year fixed rate mortgage when we get our first mortgage. If you anticipate selling your home within the next 10 years, an intermediate ARM loan may be a better financial fit for you. These loans typically have a lower fixed rate than a traditional 20 or 30 year mortgage.The savings you receive can well be worth the switch and the rate can be fixed for as long as 7 or 10 years with NO prepayment penalty.
Are you paying for Private Mortgage Insurance (PMI)?
There are loan programs available that can help you eliminate PMI, even if you have less than 20% equity in your home.The monthly savings adds up quickly.This money can be put to better use to help you achieve other short-term and long-term financial goals.
Are your taxes and insurance up to date?
Even though your mortgage servicer is responsible for paying your taxes and insurance out of your escrow account, it just makes sense to periodically check to see that these payments are being made properly.While you’re at it, you’ll want to review your homeowner’s insurance policy.It’s a good idea to review your policy atleast every two years (though I recomend yearly) to make sure it covers recent home improvements, replacement costs for the contents of your home, and that its reconstruction coverage is keeping pace with inflation.
Do you have a Home Equity Line of Credit (HELOC) for emergencies?
Many homeowners are making the proactive choice to secure a Home Equity Line of Credit (HELOC) for emergencies.A HELOC is a revolving line of credit that only charges interest when you actually draw money from the line of credit.As you repay the balance of the draw, the credit becomes available again.Securing a HELOC in advance can be a great help if you’re ever laid off or have an unexpected medical or other emergency. They are typically based on the prime rate and adjust accordingly, or they can be fixed for a slightly higher rate. They can be a useful tool.
How’s your credit report?
The information in your credit report has a huge impact on whether or not you will again qualify for a mortgage loan. That’s why it’s important to periodically check your credit report.
Now it’s even easy to do so.A recent amendment to the federal Fair Credit Reporting Act (FCRA) mandates that each credit reporting company provide you with a free copy of your credit report, at your request, once a year.To request your free credit report, visit http://www.annualcreditreport.com.(Free reports are being phased in over a nine-month period, rolling from the west coast to the east beginning December 1, 2004. As of September 1, 2005, free reports are accessible to all consumers.)
Is it time to refinance?
The timing might be right to refinance your mortgage loan.New rates may help you significantly lower your monthly payment.Or you might want to “cash out” some of the built-up equity in your home, which you can use to consolidate debt, improve your home, take a vacation - whatever! Perhaps by refinancing you can even pay off your mortgage sooner!
We'll work with you to determine if the timing is right to change your loan program, considering your cash on hand, how likely you are to sell your home in the near future, and what effect refinancing or other strategies might have on your future plans.
Any plan involving your home, requires great attention to detail. I work with a team that includes respected CPA's, CFP's and Financial Advisors. Let me be your first source for Mortgage Planning.
Foreclosures, Preforeclosures, Sheriff Sales, FSBO's and Deals!!!
Today's Real Estate Market offers many unique buying opportunities. It's important that as a potential buyer, you explore all of your options. The best way to do this is by working with an EXPERT. You can find all of the above on my site: Foreclosure Listings You can also find links too many local experts here: Great Local Resources!!!
When looking for the perfect property the most important piece is working with a dedicated Realtor. I'd love to make that referral to you. As a 3rd generation Rhode Islander, and a Personal Mortgage Consultant for 9 years, I can make great referrals in every community in RI and the surrounding communities in the bordering states. I am an avid networker and very active in several of RI's chambers of commerce. I feel very qualified to make this kind of referral. No matter what community you are targeting for your new home, I can help!
I highlight that I bring a TEAM to serve my current and future clients. Let me prove how good they are!!!
Have a great day!
The highest compliment I can receive is a referral from a friend or client.
PS: While my business is good and growing steadily, it is important for you to know that I am NEVER too busy to help those you refer to me: your family, friends, neighbors, and coworkers.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
Do you have a Home Equity Line of Credit (HELOC) for emergencies?
Is it time to refinance?
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