The new SAFE ACT laws went into effect on July 1st 2010 in the state of Arizona and if you are in a position to talk to a consumer about loan products, interest rates and fees or negotiating financing on residential real estate transactions, you are required to be licensed by the state as a Loan Officer. This does not mean you can continue to operate as such just because you have completed part of the requirements and you are waiting for the state to process the backlog of applications. You must have a fully processed and approved license in your possession to originate loans and talk to customers.

What happens if you continue to illegally originate loans without the license? Its a $5000 per day, per file fine. The Arizona Department of Financial Institutions has done a great job at making all of the information available and having the proper educated staff to explain and handle assistance for all interested parties. If you still didn't get your license, it is no one else's fault and you won't be able to say, "I didn''t know!" anymore.

Licensed loan officers are no longer able to fall back stupidity as a reason for breaking the law. It's now their responsibility to know all of the laws and operate within them and can no longer throw their broker under the bus.

I obtained my license on July 2, 2010!

If your loan officer is not licensed, do not refer business to him/her or your transaction could be held up in court! here is a good way to see if loan officers are licensed. Go to NMLS Consumer Access and input the name of your loan officer to see if they have a license, or call me and I'll do it for you.

Michael Manfredi is the CEO of Mortgage Concepts, LLC and Arizona Licensed Loan Officer #150754

 

Reverse mortgages are a good idea for some but for others who have more of a "want" than a "need" to do a reverse mortgage, the costs have always been the culprit that have kept them from doing the loan. Until now, that is, because the costs are being whittled down, left and right, by every lender in the game. That's right, the lender's themselves are picking up the fees and making a lot less money doing so, for the benefit of the borrower. Wow, pinch me, is this a whole new way of doing business? Have mortgage lenders finally realized that they need to take care of their customers first, or they won't have any? Ok, fantastic, but what does it mean to the borrower? How much are these fees? What can I expect to pay and what will the lender pay on my behalf? You know I'm going to tell you....check out my post called "Reverse Mortgage Lenders Pitch In."

 

The Senior Lending network announced today that they will be ready to start accepting applications for HECM for home purchase in March. Some additional details of the program will include:

The HECM For Home Purchase program mimics an FHA purchase with the following nuances:
• No seller concessions or credits
• No seller paid closing costs
• No gifts allowed
• No secondary financing
• No bridge loans
• Asset Seasoning – large deposits will require a letter of explanation and documentation to support that the funds are those of the applicant(s) only.

For more information contact:
Michael A. Manfredi
480-306-4432

I have been recently challenged by some readers (originators) who feel they should not have to discount fees on reverse mortgages. They have questioned my knowledge of the program, accused me of non compliance and have been downright offended at my desire to give my customers a better deal. I can understand why, of course, these mortgage originators come from the old school and the forward mortgage world where they were used to making a killing on each and every loan. Not me, I started in this business in reverse mortgages only, in 2003 when the average origination fee was much lower than today and I made just a percentage of that fee after the split with my employer. Well, I am still 100%, a reverse originator and derive all of my income from reverse mortgages. Unlike the others, today I feel fortunate to make more per loan and usually discount my fees. Maybe I am just more generous but I remain curious. If you don't discount the fee, are you also recommending the borrower pay the higher servicing fee of $35? C'mon, tell the truth, your paper trail will always be there as evidence. Ok, so if you've said yes, then I expect you are of the thinking that your time, knowledge and advise is worth all of that money and you don't discount and probably sell the higher servicing fee as well to assure you will also receive a little yield spread or service premium bonus. While I don't think you are doing anything wrong, I do believe you could do better. After all, if you are giving your borrowers such good (expensive) advise, why not advise them to select the lower servicing fee of $30? That is what they are paying you for. The mortgage business has changed and we should no longer expect to make as much as possible on every loan. If you do business by charging the higher of both fees, you are what is wrong with the mortgage business and you are contributing to higher regulation and the collapse of the industry as we know it. FHA no longer allows originators of forward mortgages to make large origination fees or any yield spread whatsoever if the borrowers are buying the rate down. FHA also believes that yield spread premiums should be used to discount borrowers up front fees. It's just a matter of time before it becomes more than a suggestion. It's also just a matter of time before reverse mortgages come under the same scrutiny and we are forced to do some discounting or just take another pay cut. Why not come over to my side and just do it! Just give them a discount, they are good people and they deserve it. If you are planning to do a reverse mortgage, go ahead and ask for a discount. You'll end up with more money in your pocket if you can get one. Please also ask if the $30 servicing fee is available for the type of loan you have selected or have been advised to do. While not a guarantee, you should at least ask. If you don't receive any discount and are presented with the higher servicing fee, give me a call. I'll see what i can do to help out. Michael Manfredi Mortgage Concepts, LLC 480-306-4432

LendingTree is offering Reverse Mortgage advice and contact to Reverse Mortgage Lenders.

Keith Moore, Senior Vice President of Emerging Businesses for LendingTree.com said, "One of the defining characteristics of LendingTree is our dedication to helping consumers. With baby boomers nearing and entering retirement age, a larger population than ever before is now eligible for reverse mortgages and LendingTree, as always, is here to help. LendingTree is exactly the resource for consumers looking to obtain all types of home, car, and education loans - and we're pleased to expand our offerings to benefit senior homeowners."

About LendingTree LendingTree, LLC is the nation's leading online lending exchange, providing a marketplace that connects consumers with multiple lenders that compete for their business. Since inception, LendingTree has facilitated more than 25 million loan requests and $185 billion in closed loan transactions. LendingTree provides access to lenders offering mortgages and refinance loans, home equity loans/lines of credit, auto loans, personal loans and credit cards via www.lendingtree.com and 800-555-TREE.

 

In order to prepare for a Reverse Mortgage, you should understand that there are a few important factors involved in the equation used to determine the amount of money you will end up with. This could be particularly important if you need every dime, like most of us do these days, or if you are trying to pay off an existing mortgage.

First, decide whether or not it makes sense to have one or two borrowers on the loan. The reverse mortgage will yield a higher dollar amount with the older borrower, only, on the loan but you have some risks by leaving a trailing spouse/borrower. If the older borrower is no longer able to live in the home, the trailing spouse/borrower will be forced to sell or refinance. In some cases this is acceptable and in other cases it is definitely not. The benefits should be considered and the likelihood of the older borrower staying at home for a long period of time should be heavily weighed. If there is just one borrower, this does not apply.

Make sure you are using a reputable mortgage company with a lot of reverse mortgage experience, like Mortgage Concepts. Most experienced reverse mortgage companies offer discounted fees, free appraisals and/or free reverse mortgage counseling. These discounts will apply right to the bottom line and end up putting more money in your pocket.

The appraisal is a key factor. The higher the value, the more money you will get (up to the FHA lending limit cap). Although there is little you can do to influence an appraisal, I believe that every little bit helps, so don't overlook the following items.

DO NOT:

Leave small obvious repairs undone. Loose roof shingles, broken windows, snagged carpet, peeling paint and floor tiles can usually be fixed for little to no expense, prior to the appraiser's visit. When you work with an experienced Reverse Mortgage Loan Officer like Michael Manfredi of Mortgage Concepts, he will assist you on finding solutions to these minor inconveniences and make sure they do not affect the outcome of your appraisal.

DO:

Strike up a conversation with the appraiser when he comes to visit. Don't waste your time asking him how much he's going to appraise the home for, he probably won't know yet. Make a point to emphasize the positive aspects of your home. If you installed new, dual pane windows last year, speak up about it. He'll be interested to know about any additions to the home's square footage and the quality of the construction of the addition. Did you use a licensed contractor and get a building permit? Is the addition heated and cooled from the main system? Or was it an enclosed porch with a step down from the main house and a wall mounted A/C unit? These are the things that matter greatly. The value will be affected mostly by the comparable sales in your area but you can't do a thing about that so just concentrate on what you can do. If all else fails and the value is just not acceptable, you can pay for another appraisal. Most likely, it won't be too different than the first but in some cases it could be worth a try.

Finally, a word about rates and fees. If you are looking for the lowest interest rate, you will end up with a monthly adjustable rate. The most important factor about an adjustable rate is the "margin." This is the amount of "points" added to the loan's index. The lower the margin, the better. Ask for a low margin loan and not a low rate loan, there is a difference. Today's rates are so low, however, it makes perfect sense to get a fixed rate.

As for the servicing fee, ask for the lower fee. Be aware, though, that it is not always available and changes day to day due to market conditions and the amount of margin added to your loan index. For a more in depth explanation of reverse mortgage interest rates, margin and fees, subscribe to Reverse Mortgage Concepts. 

If you follow these simple steps and find a good, honest Reverse Mortgage Originator, you'll have a good experience and get the most out of your loan.
Michael Manfredi 9915 East Bell Road Suite 114 Scottsdale, AZ 85260 480-306-4432 phone 480-306-4839 fax Explore your mortgage options and sign up for our newsletter at Mortgage Concepts Keep up on Reverse Mortgage industry news. Join my Blog: Reverse Mortgage Concepts Follow me on Twitter. Meet new people and expand your resources. Join my Facebook Group. Get connected and join my personal network on Facebook. Join my LinkedIn Group Reverse Mortgage Concepts on LinkedIn View my profile or recommend me on LinkedIn

According to the National Reverse Mortgage Lenders Association (NRMLA) there is a new Bill containing a provision to raise the HECM (Reverse Mortgage) limit through the end of 2009 to $625,500 which has been introduced in the House of Representatives. The current nationwide limit is $417,000 with the exception of a few high price/value areas. This would give millions more access to the program due to a current lack of jumbo reverse mortgage in the marketplace which is due to the current credit crisis. The lending limit is the limit of value that would be considered in the reverse mortgage equation and not the loan amount. That is why the limit increase is crucial and if passed, senior borrowers with mortgage balances greater than $300,000 will qualify. In most cases, it has been my experience, that seniors with jumbo mortgages and high balances have been negatively affected by a decrease in net worth and losses in investment portfolios, creating a need for more options like a reverse mortgage. Unlike the traditional reverse mortgage borrower whom might have a life changing event that distrupts normal income these high balance mortgage holders are faced with a retirement, nest egg or legacy crisis. There are many sophisticated financial planning strategies that can be put into place with a reverse mortgage and higher limits would make the outcome of those strategies more worthwhile for potential reverse mortgage candidates with higher value homes. For maore information on these strategies, sign up for my newsletter at www.loan62.com.

Michael Manfredi

9915 East Bell Road Suite 114

Scottsdale, AZ 85260

480-306-4432

Explore your mortgage options and sign up for our newsletter at Mortgage Concepts Keep up on Reverse Mortgage industry news. Join my Blog: Reverse Mortgage Concepts Follow me on Twitter. Meet new people and expand your resources. Join my Facebook Group. Get connected and join my personal network on Facebook. View my profile or recommend me on LinkedIn

All FNMA and Freddie Mac loans will be required to comply with the Home Valuation Code of Conduct (HVCC) effective May 1, 2009. The HVCC is anticipated to become an industry standard.

For the full story or to view the HVCC in PDF format please visit www.reversemortgageconcepts.com.

 

Michael Manfredi

Reverse Mortgage Concepts

 

9915 East Bell Road Suite 114
Scottsdale, AZ 85260

480-306-4432 phone
480-306-4839 fax

James A. Heist, assistant inspector general for HUD, testified before the Committee on Financial Services about concerns throughout the FHA program as the volume of insured single-family mortgages tripled from $59 billion in fiscal year 2007 to more than $180 billion in fiscal year 2008, which ended Sept. 30, 2008.

He cited a critical need for more personnel and resources for the FHA. The increased demand is having "collateral implications for the integrity" of the Ginnie Mae mortgage-backed securities program. HUD "needs to consider the downstream risks to investors and financial institutions" Heist added.

Increased demand on the Federal Housing Administration could lead to fraud and collateral risk in the HECM program, a HUD assistant inspector general warned a Congressional committee on Jan. 9.

From our partners at Ameridream:

January 12, 2009

We have been informed that a bill to reinstate reformed downpayment assistance will be introduced as early as tomorrow. The bill is expected to be introduced by Congressman Al Green (TX) with bipartisan support. The bill will have the same language as unanimously passed last year by the House Financial Services Committee.

We will keep you informed as we continue to support efforts to reinstate downpayment assistance.

AmeriDream