ATTENTION! Mortgage insurance companies are adapting a similar rule as FHA in regards to flipping properties. This will impact the mortgage market starting 10/12/2009, not leaving us with much time. If you have Conventional buyers above 80% loan to value, please make sure the mortgage insurance has been ordered prior to this date. This is coming out at rapid speed 3 out of 5 mortgage insurance companies have adopted this rule. The other two are in the process and have strict requirements to do a loan under 90 days and I believe they will be changing their rules as well within the next couple of weeks.  Also, ALL are requiring restrictions up to 180 days much like FHA does with requiring improvement details, appraisal reviews & extra underwriting requirements.  Please prepare your buyers and sellers, this is something that will impact all of us. If you have sellers/investors, make sure they are making sound upgrades and keeping ALL receipts of services performed. Fannie Mae & Freddie Mac have not adapted this rule YET, but there are talks of doing so. Please be prepared.

Below are a few guidelines of what is NOT a flip.

•·         A lender, mortgage investor or a mortgage insurance company that acquired the property as a result of a foreclosure or deed in lieu of foreclosure

•·         A spouse who acquired the property through a divorce settlement

•·         An employer that acquired the property through its relocation program

•·         An administrator, executor, or personal representative selling property of an estate

I'm here to be a resource for you, if you need anything please do not hesitate to call me!

Catherine Eusea

Selling Branch Manager

Eusea Team at Prospect Mortgage

2032 Caribou Drive, Suite 102

Fort Collins, CO 80525

720-300-6777 Direct

866-598-0647 Fax

As the month of August ends I regroup and think of what could I have done to improve my business and the communication with my clients? It then dawned on me that this was an unusual month. I was working with three buyers and no matter how much I encouraged them to work with agents that I knew was competent and proficient at their job, the buyers went with a family friend. I knew this was going to be trouble, not only was this dealing with family in the 2 out of 3 cases, all three of them worked full time jobs!

In this day and age, the business is far too complicated and forever changing that to do this job part time is an injustice for not only the buyer but everyone working with them. I can handle new agents who are putting 120% effort toward learning and executing but not part time agents or professionals who want the mad money of real estate and the stability of their jobs.

All three transactions were a mess, unorganized and because none of them had experience with FHA & VA loans did not know what to do. They took the most of my time, I remember conversations with a Realtor that lasted 1.5 hours trying to go over inspection items because she didn't know what would and would not be a problem with the FHA appraiser....even after I sent her the link. Not to mention, I got that 7-9pm call from one of them every night to go over the file because they were at work all day.

2 out of the 3 buyers were extremely dissatisfied; with one buyer it cost them an additional $300 for a survey that was not needed because agent didn't pay attention to the title commitment. 2 out of the 3 buyers have already sent me an e-mail on how they would never do this again, with family or a part time agent and why. I'm going to frame it and next time a buyer says "I want to use a friend of the family's that is also a part time agent" I'm going to have them call these very disappointed buyers or read the letters.

I read a great saying today that says "IF YOU DON'T RISK ANYTHING, YOU RISK EVEN MORE!" Erica Jong. It is so relevant here!

So here I go, I was asked to help the Womens Council of Realtors to learn a bit more about social networking. At first I thought "hmmm I can do this, I'm on this thing all the time" and then it dawned on me that I still have a lot to learn.

So I need your help, can you please help me shed some light on what your best starting tips would be for a group that has little exposure to Active Rain and Social Networking.

Think of this as a Social Networking baby shower and you have to write on the little index cards to provide the soon to be parent of Social Networking your best tips, tricks, alerts, and advice you have.

Who better to turn to than the KING/QUEEN of Social Networking!! I will be covering Active Rain & Facebook so feel free to throw them both out there!

Catherine Eusea

I'm struggling, I have two credit repair companies that I have been working with for a while now. I send them business, they accept the business I send by signing up the clients, take their money and then time goes buy...nothing.  I have a client that 18 months later (at $69 a month) he is told by the repair company that his credit is 50 points higher and I then pull the borrowers credit and the score is lower than before and nothing has been done.

Unfortunately, I do not have the time to help these folks clean up their credit....this is what these companies get paid for.

So I ask the real estate world out there, are you working with a competent credit repair company and if so send me their contact information. Or do you feel it's all a big scam?

Thanks for your help....as always.

Catherine Eusea

Did you know that the Home Buyers Scouting Report is one of the top home searching websites? It was never open to the puplic and in order to get on the system you needed to be referred to it.

You can log on now to see what is out there or get the upgraded to the PREMIUM SERVICE for free that does all the work for you.

Don't miss out what the site can do to help you find your next home!

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Your FREE membership includes:

• Detailed photos, school information, maps and directions
• A notebook is provided for you to track your favorite homes
• Email updates on your favorite homes whenever there is a change
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Always FREE. Never any spam. No obligation. CLICK BELOW TO GET STARTED

Catherine Eusea

Senior Loan Officer

National City Mortgage,

2032 Caribou Drive, Suite 101

Fort Collins, CO 80525

720-300-6777 Cell

970-212-2228 Direct

970-266-1076 Fax

catherine.eusea@ncmc.com

APPLY ON-LINE

www.ncmc.com/catherineeusea

So do to an accident I had a period where I was not as active on ActiveRain. Now three months later I realize my basic blog needs an upgrade but where do I start?

I think pictures are valuable but I see that there are links to key words and so much more. I have picked up my speed to catch up with this crazy boat but I'm really starting to flounder a bit. Maybe because I'm just frolicking in the ocean and just haven't seen the value of these details.

What type of classes are there to help me catch up?

• Is it essential to have all the details?
• Where do you get all the great pictures?
• What is the deal with the Tags and linking them?
• My home page is boring how do I spruce it up?
• What is the value of paying for ActiveRain?
• What other things do I need to know?
• Please tell me what I'm missing in my blogs, I don't get many comments anymore.
• Are there people available who have an expertise  

I know successful people love to share their success, ActiveRain is the breeding place for that. So with that said, please help a girl out.

Thanks,

Catherine Eusea

Fannie Mae & Freddie Mac change requirements for condos, are your listings ready?

Read these changes below and make sure your condos are listings are ready for the changes before your closings are held up.

FIDELITY Insurance Coverage Requirement (for projects larger than 20 units)

The owners' association must have blanket fidelity insurance coverage for anyone who either handles funds that it holds or administers, whether or not that individual receives compensation for services. The insurance policy should name the owners' association as the insured and the premiums should be paid as a common expense by the association. The policy for a condominium project must include a provision that calls for ten days' written notice to the owners' association before the policy can be canceled or substantially modified for any reason. This same notice also must be given to each service that services a Fannie Mae-owned or Fannie Mae-securitized mortgage in the condominium project.

A management agent that handles funds for the owners' association should be covered by its own fidelity insurance policy, which must provide the same coverage required of the owners' association

****The fidelity insurance policy should cover the maximum funds that will be in the custody of the owners' association or its management agent at any time while the policy is in force. A lesser amount of fidelity insurance coverage is acceptable for a project if the project's legal documents require the owners' association any management company to adhere to certain financial controls. Even then, the fidelity insurance coverage must at least equal the sum of three months of assessments on all units in the project.

To break down the math, if there are 140 units and the HOA is $150 a month there needs to be enough coverage for three months of the HOA times the number of units. In this case the coverage amount would need to be $63,000. (140 units X $150 = $21,000 X 3 months = $63,000)

Hazard Insurance Requirements

Fannie Mae & Freddie Mac now require that lenders verify that hazard insurance for all condominium projects with attached units, including two- to four- unit projects, covers fixtures, equipment, and other personal property inside individual units if they will be financed by the mortgage.  Although this is something you want to encourage your buyer to get either way, this is now a requirement. The updated policy now requires that the borrower obtain a Wall to Wall coverage unless the lender it can be shown that the master policy provides the same interior unit coverage.  Please note this insurance will NOT be escrowed and will be paid separate from the monthly payment.

Delinquent HOA Dues for Units in Attached Condominium Projects

Fannie Mae is updating its delinquent HOA dues policy to require that no more than 15 percent of the total units in a project can be 30 days or more past due on the payment of their association fee payments. This new policy applies all condominiums.

Clarification of Owner-Occupancy Ratio Requirements

Fannie Mae requires that established condominium projects consisting of attached units have an owner-occupancy ratio of at least 51 percent at the time the loan is originated (purchase or refinance) if the mortgage loan being delivered is secured by an investment property. Established projects where borrowers will occupy the unit or use the unit as a second home are not subject to any owner-occupancy ratios.

Due to current market conditions, many condominium projects are experiencing higher numbers of financial institution- owned REO units, which many lenders may be counting as non-owner-occupied under Fannie Mae's current requirements. 

Fannie Mae is clarifying its condominium project owner-occupancy ratio policy to include REO units that are for sale (not rented) as owner-occupied units in the owner-occupancy ratio. 

If you have any questions or need further details please call or e-mail, I look forward to chatting with you.

Catherine Eusea

Senior Loan Officer

National City Mortgage, A Division of National City Bank

2032 Caribou Drive, Suite 101

Fort Collins, CO 80525

720-300-6777 Cell

970-212-2228 Direct

catherine.eusea@ncmc.com

APPLY ON-LINE

www.ncmc.com/catherineeusea

Here is the latest web update on using the $8,000 tax credit as a bridge loan. It's amazing what happens in a week from being released, pulling the mortgagee letter to not really going to happen at all. Please read below on the details.

Feds reverse rule to assist first-time home buyers

J. Craig Anderson - May. 19, 2009 12:00 AM
The Arizona Republic

Federal officials on Monday reversed an earlier decision to allow first-time home buyers to use an $8,000 tax credit to borrow the down payment on a home.

A week earlier, U.S. Department of Housing and Urban Development Secretary Shaun Donovan had told the National Association of Home Builders that HUD would let banks and local governments offer short-term "bridge loans" to cover the down payment for first-time buyers eligible for the tax credit. The loans would have been available to applicants for federally insured mortgages such as Federal Housing Administration loans.

Lenders, home builders and real- estate agents had reacted favorably to the bridge-loan proposal, saying it would open up the housing market to more first-time buyers.

However, not everyone was in favor of using the tax credit as collateral on a down-payment loan.

"That tax credit should be savings, not debt," said Patricia Garcia-Duarte, executive director of Neighborhood Housing Services in Phoenix.

Garcia-Duarte said the proposal too closely resembled a now-illegal practice known as seller-funded down-payment assistance, which allowed a home's seller to "gift" the down payment to a specific buyer through a non-profit organization.

Phoenix loan originator Dean Wegner was among the housing-industry professionals who had expressed enthusiasm about the bridge-loan plan.

Wegner said the program would have boosted local home sales, but he added that the bridge loans likely would have come with a high interest rate.

The loans also could have created income-tax issues, according to the IRS officials who shot down HUD's plan.

There is more talk among Active Rain and local Realtors about the fall out on their files.

I would say your seasoned and new Loan Officers right now are relearning our jobs. ( I have never had a decline in my 7 year in the industry and then I had two in two weeks!) We have all had it way too easy for the past 7 years and now lenders are back to the old fashion way of doing business BUT with modern technology! Underwriters are overturning automated approvals; they are also running smart systems that search records everywhere for inaccuracies. (Ever see that movie Eagle Eye? Kind of feels like that) the things that this system catches are something we typically miss or can't see and it happens at the very end. Even your best of the best buyer might have hidden issues that will kill the deal. Even more so, your borderline deals are taking twice as long going through underwriter after underwriter with monumental conditions. Your typical Loan Officer, even your good seasoned Loan Officer is scrabbling to adjust to the new requirements. As my processor puts it underwriters are picking lint right now.

So now it's all about setting expectations, with the buyers, with lenders and with the agents by pulling everyone out LaLa Land. We have had it way to easy in the past!

Buyers: For my 1st Time Home Buyers I start with summary of... I do everything I can to catch everything up front but for the next 30 to 45 days it's going to be rough. I'm requesting items, my processor will request items and when it gets to underwriting there may be even more things we need.  Do not get out of your lease, do not buy anything for the house, and do not schedule movers until you have signed on the dotted line. If they cannot wait to do this because they can't afford an extra rent payment then they should wait to buy a home. Do not deposit cash or money not earned above $500 (yes we are back to the $500 rule), do not charge anything above $500 and do not borrower any money especially from a credit card. We also have underwriters randomly pulling credit at the very end. Underwriters make us source every check above $500 that is not direct deposited. On your borderline deals underwriters do not want to see you dip low in your accounts, no negative balances (very common) and if your payment is going up dipping low in your bank accounts is a huge issue. I have also seen underwriters over turn approvals do to lack of reserves (gift money doesn't count). From there I remind them that they are going to get an $8,000 tax credit for 45 days worth of work, it might be some work and then again it might all go okay. I GIVE EVERYBODY A QUICK RUN DOWN OF THE TOP 88 THINGS THAT MIGHT CAUSE TURBULANCE IN THE PROCESS. Right now 3 out of 5 deals are running smoothly. With your move up buyers I'm explaining the same but reminding them that things have changed from the last time. Since doing this things are going much better as they were aware from the get go.

Agents: Please listen to your lender but more importantly it is about asking the right questions. I think if we can accurately describe an excellent borrower vs. a borderline borrower will help you set the right expectations in the transaction. Your excellent buyer can easily close in 30 days your borderline borrower give us 45 day, we may not need them all but this has been helping. If we don't have this you're going to run the risk of extending contracts, spending more time and possibly putting the earnest money at risk.

What is an excellent buyer? Credit above 680 with only a few blemishes but paid credit history, coming to the transaction with their own money down, same line of work for 2 years (typical salary) without any breaks, good reserves and no prior bankruptcy's, foreclosures or short sales.

What is your borderline buyer? Shaky credit history with late payments & collections within the past 2 years and credit score of 580-679. Prior bankruptcy, judgments, foreclosures and short sales in their credit history, if there are negative incidents since any of those happened this is enough for an underwriter to overturn an automated decision. Break of employment, part time employment, change of jobs, commission or self employment. Deposits that we can not source, negative items in bank history, maxed out credit cards, less than 1 month of reserves in the bank and child support income received or paid. If they currently have another home and we need rents to qualify. I'm sure there is more that I'm missing.

Just being nosey and find out these things will let you know what type of deal you have on your hands. My agents knowing this have really been supportive throughout and things are going so much better. Please note that we follow your contract and if things are delayed in the beginning like inspection issues this can set everything further back, please adjust accordingly.

Now a word to Lenders...I think it's time to quit sugar coating things, not all transaction are messy but I'm sure those that "might  be" would rather know than not know. Yes I'm sure there are lenders who can do it faster, cleaner and without any issues but as the industry changes things across the board will change with it. I think it's time to get the support from the real estate community by setting accurate expectations. Basically if you're living in LaLa land you will be pulled into reality pretty soon.  I have spoken to title companies and as rosy as it seems now they have informed me that 4-5 deals out of 10 are not closing and being pushed out.

Please note this is not a bashing session but a wake up call for all, plus I think we would be doing each other a favor by changing the way we think.

If you have ran acrossed things that don't make sense or your wondering why it happened and was caught up front let me know and I can help. Anything else I can help with please just call or e-mail. I would love to know that this blog is helpful or that we are not alone in these issues.

Thanks for listening!-

Catherine Eusea

Senior Loan Officer

National City Mortgage, A Division of National City Bank

2032 Caribou Drive, Suite 101

Fort Collins, CO 80525

720-300-6777 Cell

970-212-2228 Direct

970-266-1076 Fax

catherine.eusea@ncmc.com

APPLY ON-LINE

www.ncmc.com/catherineeusea

As the OBAMA plan rolls out we are getting information on how it works. The Loan Modification plan looks good and will help many people. I hope that the banks can keep up with the demand. There are many, many loose ends and I will keep you posted. There will be many posts to come on the different products rolled out.

The Obama Administration unveiled the final details of its "Making Home Affordable Program," which is designed to help up to 9 million American families refinance or modify their loans to a payment that is affordable now and into the future.

One of the initiatives in this program is aimed at helping struggling homeowners "modify" their loans to avoid foreclosure. Here are some common Questions and Answers about the Modification Initiative in the program. 

MODIFICATION INITIATIVE

Who is eligible?

To apply for a Home Affordable Modification, you must:

• Own and currently occupy a one- to four-unit home.
• Have an unpaid principal balance that is equal to or less than $729,750 (for one unit properties).
• Have a loan that was originated before January 1, 2009.
• Have a mortgage payment (including taxes, insurance, and home owners association dues) that is more than 31% of your gross (pre-tax) monthly income.
• And, have a mortgage payment that is no longer affordable, perhaps because of a significant change in income or expenses.
• If you answered YES to all of these questions, you may be eligible for the Modification Initiative.

Am I eligible if I missed some mortgage payments?

Yes. If you missed two or more mortgage payments and answered "yes" to the Modification Initiative requirements above, you may be eligible for a loan modification.

Do I need to be behind on my mortgage payments to be eligible for a Home Affordable Modification?

No. Responsible borrowers who are struggling to remain current on their mortgage payments are eligible if they are at risk of imminent default. Examples of being "at risk" include facing a significant increase in your mortgage payment or a reduction in your income. Contact me to discuss your specific situation.

I have a second mortgage. Am I still eligible?

Yes, but only the first mortgage is eligible for a modification.

I have an FHA loan. Can it be modified under this program? Are all loans eligible?

Most conventional loans including prime, subprime, and adjustable loans; loans owned by Fannie Mae and Freddie Mac as well as private lenders; and loans in mortgage backed securities are eligible for a modification. Contact me to discuss your specific situation.

I have a mortgage on a duplex. I live in one unit and rent the other. Will I still be eligible?

Yes. Mortgages on two, three and four unit properties are eligible as long as you live in one unit as your primary residence.

What does the Modification Initiative do?

If you are eligible for this plan and are approved, you will be put on a trial modification for three months at a new interest rate and payment.

If you successfully make the payments and are current at the end of the three-month trial period, your servicer will execute a permanent modification agreement that will lower your interest rate to a fixed rate for five years.

What happens after five years?

Beginning in year six, the rate may increase no more than one percentage point per year until it reaches the "rate cap" in your modification agreement, which is basically the market interest rate on the date the modification is finalized.

That means your rate can never be higher than the market rate on the day your loan is modified. This is great news because rates are currently at historic lows... and you can lock in now.

How low can my interest rate go?

Treasury is providing incentives to your investor to write the interest down as low as 2%, if necessary to get to a payment that you can afford based on your income.

What happens if that is not enough to get to an affordable payment?

If a 2% interest rate is not enough to bring your payment down to 31% of your gross monthly income, your servicer can extend your payment term--for example, give you a 40-year loan rather than a 30-year.

If that is still not sufficient your servicer will defer repayment on a portion of the amount you owe until a later time. This is called a principal forbearance. A portion of the debt could also be forgiven. This is optional on the part of the investor. There is no requirement for principal forgiveness.

Are there any other benefits to this program?

Yes. For every month you make a payment on time, Treasury will pay an incentive that reduces the principal balance on your loan. Over five years the total principal reduction could add up to $5,000.

How much will a modification cost me?

There is no cost to borrowers for a Home Affordable Modification. You will not be asked for any money.

If there are costs associated with the modification--such as payment of back taxes--your servicer will add those costs on to the amount you owe. Your servicer will also forgive any late fees.

Is housing counseling required under this program?

Borrowers are strongly encouraged to contact a HUD-approved housing counselor to help them understand all of their financial options and to create a workable budget plan.

However, housing counseling is only required for borrowers whose total monthly debts are very high in relation to their incomes (55% of your gross monthly income).

If you would like to speak to a housing counselor, call 1-888-995-HOPE (4673).

How do I apply for the Modification Initiative?

If you meet the general eligibility criteria for the program, you should gather the following information:

• Recent pay stubs to help determine your gross (before tax) household income.
• Your most recent income tax return.
• Information about your assets.
• Information about any second mortgage on your house.
• Account balances and minimum monthly payments due on all of your credit cards.
• Account balances and monthly payments on all other debts, such as student loans and car loans.
• A letter describing the circumstances that caused your income to be reduced or expenses to be increased (for example: job loss, divorce, illness, etc.).

Once you have this information, call your mortgage servicer and ask to be considered for a Home Affordable Modification. The number is on your monthly mortgage bill or coupon book.

My loan is scheduled for foreclosure soon. What should I do?

If your mortgage has been scheduled for foreclosure or if you have missed one or more mortgage payments, should contact your servicer immediately.

You may also want contact a HUD-approved housing counselor by calling 1-888-995-HOPE (4673).

As always, if you have any questions or would like to discuss how this may specifically impact you, I'd be happy to sit down with you. Just call or email me to set up an appointment.

Catherine Eusea

Senior Loan Officer

National City Mortgage, A Division of National City Bank

720-300-6777 Cell

970-212-2228 Direct

970-266-1076 Fax

catherine.eusea@ncmc.com

APPLY ON-LINE

www.ncmc.com/catherineeusea