Chris's Blog

Credit Score Factors

Chris Goulart (All California Lending) — Fri, 06 Nov 2009 12:33:47 -0600

Today I'm going to take a brief look at credit score factors. As hard money lenders, credit did not used to make a big difference. Today things have changed, and even in the hard money world, credit is playing a part in lending decisions.

Most people are in the dark when it comes to the factors that determine their credit score. Here is a basic rundown on credit score factors:

35% of your credit score comes from payment history. Late payments, collections, charge offs, repossessions, foreclosures, tax liens, bankruptcies and judgements all fall under this category.

30% of your credit score comes from accounts owed. Credit cards, mortgage loans, auto loans, lines of credit and installment loans all factor into this area.

15% of your credit score comes from the length of credit history, how long your accounts have been open in other words.

10% comes from new credit. This includes credit inquiries, both soft and hard.

Finally, the last 10% comes from types of credit used. A mortgage loan, auto loan, credit cards, etc. The mix of credit used.

IF you would like more information, take a look at our in-depth write up of credit score factors.

Home Staging in California

Chris Goulart (All California Lending) — Wed, 02 Sep 2009 13:42:24 -0500

There are many home staging companies in California. However, if you are interested in selling your property, but you don't want to incur the cost for a professional consultation, you have the option of attempting to stage your property on your own.

Home staging in California is quickly growing in popularity, especially among those flipping houses for profit. A well staged home can help the property sell more quickly, and for more money. This is due to the fact that a properly staged home gives a better first impression. Through a good first impression and excellent curb appeal, it makes sense to spend some effort on staging your home.

If you are planning a home staging project in California, there are several things you will want to keep in mind. First, the goal of staging a home is to make it appeal to the widest range of buyers possible. What you believe is in good taste may not be what the majority of people feel is sophisticated, elegant, or in good taste. This is one of the toughest hurdles to overcome, and is one reason to consider hiring a professional for consultation, even if you do the work yourself.

Staging companies are intimately familiar with what works well in the current market, and can make a wide variety of suggestions to ensure your property appeals to the largest amount of homebuyers. In addition to this, home staging companies in California are familiar with what buyers in specific price ranges like as they usually work closely with real estate agents in the markets they target.

If you are planning on doing your own home staging in California, there are a few things that you will want to keep in mind. A clean home shows much better than one that has not been thoroughly cleaned, and this needs to be at the top of your list. In the case of home sales, a clean property is one that has been cleaned from top to bottom. A good suggestion is using a cleaning service for this, there is some cost involved, but the property will be cleaned properly.

We're talking about cleaning the grout between the tiles in the bathroom, cleaning under any and all furniture and more. After a complete cleaning has been done, it is much easier to then work on the actual staging of the property.

There are many resources on the web for staging your own property. You can start by taking a look at this free home staging checklist, it will give you the basics in a short, concise manner.

Commercial Loans

Chris Goulart (All California Lending) — Fri, 24 Jul 2009 18:15:00 -0500

Commercial loans are in the hot seat these days. As the real estate problems expand into the commercial loan segment, we are seeing a change in how commercial loans are made.

Accourding to Realpoint Research, delinquencies on commercial loans hit almost $29 billion, that is a $10 billion dollar increase in June alone. This has been led by delinquencies in California commercial loans.

This is a huge increase in delinquent commercial loans year over year, close to 600%, and promises to put an additional damper on new commercial loans being funded. To compound the issue, at the same time of rising delinquencies, vacancies are also increasing, making it more difficult for borrowers to obtain institutional financing for a refinance of their commercial loans. With debt coverage ratios skewed, many find themselves in a situation where there is no take out loan for the existing financing.

One area where commercial loans are still moving is the hard money segment. With the huge downturn in residential real estate, commercial loans are still seen as a "safe" investment by many private investors. With institutional lenders tightening standards, and with commercial properties unable to meet the strict debt coverage ratio guidelines of many banks, hard money commercial loans have become a viable alternative to many borrowers in need of commercial financing.

While hard money lenders typically do not underwrite based on the debt coverage ratio, it is a consideration these days in the tightening lending environment. Many banks will require a 1.25 debt coverage ratio, but a hard money lender may be willing to work with DCR's even slightly below 1, depending on the property type and strength of the borrower.

I specialize in private money financing, and can help property owners find a creative source for their commercial loans. If you are in need of commercial loan financing, and are having problems with institutional lenders, feel free to call or email me to discuss your situation.

New bankruptcy law could lead to more loan modifications

Chris Goulart (All California Lending) — Mon, 09 Mar 2009 19:33:15 -0500

There is a lot of buzz going around right now regarding the new bankruptcy legislation. If you have not heard, this legislation is set to allow bankruptcy judges the authority to modify loans on primary residences. While the banking industry is opposed to this legislation, I don't see any way it does not get put into effect.

This bankruptcy legislation is referred to as a "cram down" by the banking industry, but truly it will help to stabalize the real estate markets. Currently homeowners are at their lenders mercy when seeking a loan modification. From my experiences and conversations, the lenders are not easy to work with, and are very reluctant to offer a true modification.

What's more, the modifications that are being offered are more like band aids, short term fixes. Without long term fixes, there is certain to be more foreclosures on the way.

This next wave of foreclosures, however, will be different than the first. So far we have seen people who could not afford to make their payments, people who maybe should not have owned a home. We have also seen the adjustable loans and option arm/neg-am loans that have reset to much much higher payments that are not affordable. This new wave of foreclosures, however, is people making business decisions to walk away from their homes.

When homeowners make a business decision to walk away from their home, it produces a foreclosure that is not on anyones radar. These are people who do have jobs, good credit and the income to make payments on their homes. The business decision, however, comes when they owe more than their home is worth, or maybe they have a long term adjustable loan that the bank will not renegotiate. This wave of foreclosures is the wave that can be prevented with the new bankruptcy legislation.

By allowing bankruptcy judges to adjust the principal balance of a loan, and adjust the payment, it forces the idea of a loan modification to work. It may not be the best solution, but we are in a terrible mess right now, and the only way out is to slow the foreclosures. This legislation has the potential to do just that.

I work with hard money lenders, and talk with people in all types of situations every day. I truly believe that something of this nature is needed.

Check back in, I will be looking at the legislation in more detail as it takes shape!

Loan Modification Resources

Chris Goulart (All California Lending) — Tue, 02 Dec 2008 15:59:34 -0600

With all the talk about loan modifications, I decided to start putting together some resources for those looking to do their own loan modification. There are a number of companies out there today that will attempt a loan modification on your behalf for a fee, but for those who want to do it themselves, I've found resources to be somewhat slim.

I've put together a list of loss mitigation contacts and phone numbers. This is a pretty good sized list, with many of the major lenders included. Phone numbers change for these loss mitigation departments, and I have listed multiple numbers for many of the lenders included. If you are having problems finding a number for your lenders loss mitigation department, take a look to see if they are on this list.

I have also put together a sample hardship letter. This is a basic format to use if you are behind on your mortgage and are looking for a loan modification to help. You can copy the text to a word doc and simply change the sample to meet your needs.

For more information on loan modification check back in. I will be adding and updating resources over the coming days and weeks as I am able. There should be free resources for people who are looking to modify their own home loan. Take a look at my posting about loan modifications, and check out the loan modification resource links in the right hand navigation links.

Loan Modifications

Chris Goulart (All California Lending) — Thu, 13 Nov 2008 19:58:50 -0600

Loan modifications are the new buzz among real estate professionals and homeowners in distress alike. With the current financial mess, and the continued slide in the real estate markets, banks are now starting to ramp up efforts to keep homeowners in their homes.

Financial institutions don't want to foreclose on your house. It costs them time and money, and they would greatly prefer to have a borrower who can make their mortgage payment. With the recent destruction of the housing market, though, many borrowers don't have options previously available. If you lost your job three years ago and could not make your mortgage payment, you could simply sell your house and buy something smaller or rent. If your company transferred your job, you would just sell your home and move. With one in seven homes in the United States underwater (there is more owed on the property than it is worth), those options simply are not there today.

These days, many are stuck with the loan they have, the home they have, and it really seems overwhelming to try and work with your financial institution. Don't feel that way. It can be a tedious process dealing with the bank, but if you work at it, you can succeed in working out a loan modification with your bank or lender.

The first thing to do is actually contact your financial institution. It would amaze most people to know how many people get in trouble, and simply do not ever contact their bank. Call the customer service number that is located on your monthly statement and ask for the loss mitigation department. Keep this number, along with your loan number, handy, you will be using it often if you are traveling this path. The loss mitigation department is who you want to talk to, whether you are looking for a lower rate, a principal reduction, a short sale or any other loan modification. When you call them, you should have a call log as well. Log each call, who to spoke with, and what was discussed.

When you call, they will ask for some paperwork from you in order to review your file. I suggest having a good game plan before moving forward from here. Decide what you want. You need to know what you want, and ask for it. Do you want a principal reduction, a short sale, a reduced interest rate? There are many options, and how you decide to proceed can impact on the outcome of your request. This brings me to the next topic. When you call, they will want some paperwork. Usually this includes an expense itemization, hardship letter and income documentation. When they start asking for paperwork, many people think they need professional help. I'm not a huge fan of this, but that is my personal opinion.

There are many loan modification companies out there, they employ attorneys, and will go through the loan modification process for you. Most charge between $1,200 and $4000 for their services, payable upfront. I really do not encourage clients of mine to take this step, unless there is something amiss with your original loan paperwork, or some legal aspect that you need to correct. For the most part, I believe you can do this yourself. What I do suggest, though, is to get yourself informed so you understand what you are doing and what you should expect. Take a look at this group, they have a loan modification package that gives you the information you need to do this yourself, saving thousands of dollars upfront. In addition, they have been around for a while, and have been doing modifications for their clients even before this current downturn. Many of the loan modification companies you might hear about have just sprung up to take advantage of the market. I would undertake this loan modification process myself, with some research and work, you can have a do it yourself loan modification..

Good luck, next I will be looking at BPO jobs and services in more detail, check back in!

Hard Money Loans - 100% Acquisition and Rehab Loans

Chris Goulart (All California Lending) — Tue, 14 Oct 2008 01:03:10 -0500

Hard money loans are a good way to take advantage of the opportunities created by the downturn in today's housing market. I get a lot of calls from real estate investors looking for hard money loans to purchase and rehab property they can purchase below market value. Many are looking for 100% financing, which is a tough thing to find in today's lending climate. With that being said, there are programs that do allow for 100% acquisition financing on these rehab transactions.

The guidelines for these 100% acquisition and rehab loans are pretty straight forward. You will need cash or additional collateral in order to qualify, if you have no cash or additional property with equity in it, you should find a partner. How much cash you will need depends on your particular transaction. Very basic guidelines for this program allow for 100% financing on the acquisition of real estate provided you are able to bring in cash or additional collateral to cover the cost of rehab, 4-6 months of interest reserves and points and fees.

Depending on the particular property, acquisition cost and after repair value, we can sometimes fund more than the sales price. This program does not require an appraisal, but appraisals and/or comps will help us in determining the ARV. These hard money loans typically are written for 12 months, no prepayment penalty, at 12.5%. There is no minimum credit score to qualify for this program, but major credit delinquencies will need to be explained. Recent foreclosures, bankruptcies, etc. are items that may require mitigating factors. Experience with rehab projects are a plus, but also not required.

Hard money lenders have a reputation for being quick, but with the recent credit issues, many hard money loans are taking much longer to fund than they have in the past. This program usually has a 2 week turn time to funding from application, but can close quicker if need be.

Feel free to contact me with any questions. 877 462 3422. This is primarily a California program, but we can help in other Western US states.

Hard Money Lenders

Chris Goulart (All California Lending) — Wed, 23 Jul 2008 12:17:45 -0500

America is going through tough financial times; it is no secret that many Americans have fallen victim to unscrupulous lending practices and that the most important terms and conditions were not disclosed during the negotiation of a home loan. We are going through a financial bubble and because of reforms to lending practices home owners are desperate because they no longer qualify for new loans, either because of lower property values or more stringent lending guidelines.

As the saying goes, desperate times call for desperate measures but, the measures that most people are taking are definitely not the best ones. A few years ago property owners counted with their home equity to bail them out of any financial problem. Because of the current situation, properties have lost tremendous value and there might not be enough equity to refinance a loan. Due to this, many Americans are turning to credit cards to maintain their lifestyle.

But the solution to a tight financial situation is not to turn to credit cards because their interest rate can go as high as 30% (compounded daily) and they will just add to the problem. Hard money loans on the other hand, are better financial instruments which provide more affordable interest rates and terms that can help a property owner sail through this economic recession.

Hard money loans can go as high as 70% LTV (loan-to-value), although most would like to keep the LTV below 65%. Hard money loans are available on almost any property type, commercial, land, investment properties etc. Hard money loans can also be issued on an owner occupied property to relieve financial stress. These types of loans can be amortized over a period of 30 years according to the borrower needs. Even with hard money, however, it is important to be able to show the ability to repay the loan. The huge advantage with hard money these days is the flexibility with which you can show that ability. Bank statements for self employed borrowers, contracts and other creative ways to show the money being made that will enable the loan to be repaid.

Stopping Foreclosures with Hard Money Loans

Because of the banking crisis more and more home owners are losing their properties to foreclosure, the sad part is that many of those foreclosures can be stopped or avoided if the homeowner takes appropriate action. In California alone foreclosures have been up 260%, this figure is based on market analysis performed on July, 2008 by housing authorities. Hard money lenders often times are the only option for homeowners who no longer qualify for institutional loans under the new and more stringent lending guidelines.

Hard money loans can be used in order to salvage a property and avoid foreclosure. However, a property owner needs to act as fast as possible in order to avoid interest and penalties from accruing and worsening the situation. Additionally, hard money loans offer the ability to cross collateralize multiple properties. If there is not enough equity in one to get the job done, you still have options for financing.

Hard money basics for today's market

Chris Goulart (All California Lending) — Fri, 13 Jun 2008 19:14:29 -0500

I deal almost exclusively with hard money lenders, working with both borrowers and brokers to match a particular transaction with an investor. In addition, I do have access to in house funds and serve as a direct hard money lender as well. This is my business, I do conventional loans for family, friends, referrals, but my main source of business is hard money.

Hard money today is taking the place of what sub-prime used to be. The glaring difference, however, is the loan to value requirements. In today's hard money lending environment, 65% loan to value is typically the maximum you will find. I do have some San Francisco hard money sources still going to 70% in San Francisco and Marin counties, but for the most part, that is a thing of the past.

Residential hard money loans have taken on a different face than they had only 12 months ago. Gone are the days of owner occupied anything goes lending. Today, not only is the loan to value important, but it is also important that the borrower can show the ability to repay the loan. Typically there are no DTI ratios per say that need to be met, and we can get creative if the situation warrants. The benefit of working with hard money is the flexibility in underwriting. If the requested loan is truly going to help the borrower's situation, there is typically a way to document that benefit.

Non owner occupied residential hard money loans are a bit less heavy on the documentation of income. These loans are still primarily loan to value driven. The topic to touch on with non owner occupied residential is the fix and flip scenario. Unless you have excellent credit and some money in the bank, there is not much financing available that will provide 100% acquisition. I do have access to some 100% hard money programs in the San Francisco Bay Area that will use appraised value vs. purchase price, but this financing is slowly drying up, not to return until this market sees some kind of rebound.

Additionally, land loans are becoming increasingly difficult to place. In today's market, you can expect to find money for 40-50% loan to value of your land. That value can be very subjective as well. Additionally, if you are building, you can usually expect some type of fund control on any cash out for land.

Hard money commercial loans are also loan to value driven, capping out around 65% (except in the San Francisco and Marin Counties, where 70% is still realistic). The good thing about hard money commercial loans comes down to the debt coverage. Banks are pretty tight on that debt coverage number, wanting to see 1.1 - 1.25. Hard money commercial loans are more concerned about the collateral value of the commercial property, and even with a debt coverage below one, can make sense.

If you are looking for a hard money loan, please feel free to contact me for more information. We are direct lenders of funds, and I also have resources and relationships with many hard money lenders. As a hard money specialist, I can work with you to package your loan properly and help you get it funded. Feel free to contact me with any scenarios or questions.

100% Financing Options On The Table With FHA

Chris Goulart (All California Lending) — Sun, 27 Apr 2008 18:09:09 -0500

With all the tightening guidelines, there is still one bright spot in the mortgage lending world. FHA loans are expanding their offerings, with higher conforming loan limits (see these higher conforming loan limits by California county here), down payment assistance programs and other legislation in the works to expand these programs, FHA loans are fast becoming the loans of choice.

One of the largest benefits of FHA loans these days is the potential for 100% purchase financing. FHA loans cap out at 97% loan to value on a purchase, but with down payment assistance programs, and allowable seller credits up to 6%, it is realistic to be able to structure a purchase loan for no money down, or very little money down. Essentially, 100% purchase financing.

Additionally, for many borrowers who have seen the value of their homes decrease, all the while watching the date creep closer and closer to when their adjustable note is going to adjust, FHA loans offer high loan to value refinance options. FHA loans offer refinances up to 95% loan to value. Additionally, FHA loans do not automatically cut the LTV in markets deemed declining as Fannie Mae and Freddie Mac loans do.

This offering of high LTV loans for refinancing allows many homeowners the ability to refinance out of their adjustable rate mortgage, even though their loan to value may be higher than when they originally took out that loan. Pair this with the increase in loan limits, and this has opened the door to many California homeowners to use these FHA loans, whereas their loan amount may have been too large to fit under the limit before.

For those looking for a California refinance, FHA loans offer a great option to take advantage of the historically low fixed rates that are still on the table. Feel free to contact me for more information on FHA loans, or if you are in the market for a purchase or refinance in California.

Visit my real estate blog for more information on various loan options and current events in the real estate and mortgage world.

Direct Hard Money Lenders

Chris Goulart (All California Lending) — Fri, 11 Apr 2008 00:34:29 -0500

Looking for direct hard money lenders can be a difficult task if you have not already built the relationships this type of lending requires. It can be even more challenging to find the right fit if you are a borrower looking for a hard money loan.

If you need a conventional loan, your choice of broker or representative probably will not impact your ability to obtain a loan. Conventional lenders advertise their rates and programs, underwriting is usually black and white, and any number of professionals can get the job done for you. The hard money lending environment, however, is a different story.

Hard money lenders come in all shapes and sizes. Most do not advertise, and many do not have black and white guidelines. It is extremely important to have someone who is knowledgeable and has relationships built represent you. Working with a loan officer who has done conventional loans and is just getting their feet wet in the hard money world can be detrimental, and can even keep you from obtaining the loan you need. You wouldn't ask your dentist to perform heart surgery simply because he or she is a doctor, make sure you use the correct specialist when dealing with your financial needs as well.

In today's lending world, money is extremely tight. It is more important than ever to have your loan packaged well if you are in need of a hard money loan. I have been in the business for a number of years, doing hard money loans almost exclusively. I have access to in house money; we are hard money lenders specializing in San Francisco properties and properties in the surrounding areas. Additionally, I have built the relationships necessary to match your loan with a direct hard money lender should your loan fall outside of our guidelines. In fact, many brokers contact me to place hard money loans for them.

If you are looking for San Francisco hard money, or hard money in the San Francisco Bay Area, please don't hesitate to contact me directly. Additionally, I can help with California hard money throughout the state. Give me a call today to discuss your scenario. I'm happy to talk with you about the options available, and you can rest assured that you are dealing with a specialist.

Washington Mutual Closes Their Wholesale Lending Division

Chris Goulart (All California Lending) — Fri, 11 Apr 2008 00:01:41 -0500

Today Washington Mutual accepted it's last loan from a broker. As of April 11, Washington Mutual will be shutting down their wholesale lending division, with up to an anticipated 3,000 job cuts. This after securing $7 billion in new capital and reducing their quarterly dividend to a penny.

In emails this week, Washington Mutual set the time table for existing loans in their pipeline to close. April 10 will be the last day to submit loans to their wholesale division. Any loan not submitted by close of business will not be accepted.

Washington Mutual anticipates closing all wholesale sales centers by May 31, and are setting a cutoff date of June 13 to fund any loans, however they state that they will honor any commitments with expirations after June 13 up until the expiration date of those commitments.

By June 30, all wholesale loan fulfillment centers will be closed. These centers are located in San Diego and Pleasanton CA, Downers Grove IL and Jacksonville FL.

This comes a few months after Bank of America stopped accepting loans from brokers, and highlights the current mortgage industry issues. For more information on this and other topics, please follow the links below.

Visit my California real estate blog, learn about California hard money Lenders or search Contra Costa Real Estate.

How to Buy Real Estate With No Money Down - Real Estate Investing

Chris Goulart (All California Lending) — Fri, 28 Mar 2008 17:54:31 -0500

Real Estate Investing secrets, how to buy real estate with no money down, how to find the deals on foreclosures, short sales and REO's. I get calls every day from investors looking for no money down real estate opportunities. Many times I cannot help, but there is a niche area where I can.

I specialize in San Francisco hard money, and can help you finance investment property with no money down. I can only help in the immediate San Francisco Bay Area, and only on purchases where the purchase price is 60% or less of the as is value. If your deal fits these guidelines, it is very likely that I can show you how to buy real estate with no money down. Please visit my California hard money home page for my contact information and give me a call today to talk about your scenario.

If you are not in the San Francisco area and are looking for a real estate investing course, or education on real estate investing that can show you how to buy real estate with no money down, you might want to c heck this guy out. He is a very well know real estate investor, and has proven time and time again that he knows how to buy real estate with no money down. I believe he offers a wide variety of materials and information. I have not taken his courses, but I do receive calls very regularly from students of his looking for financing on various types of properties in the San Francisco Bay area.

I don't really have many other resources for no money down real estate acquisitions. In today's market, it can be difficult to find. Again, my primary business is California hard money, but take a look at what Robert Allen has to offer as well. It looks like he is able to help nationwide, and specializes in showing you how to buy real estate with no money down. He is very well known, worth the time to take a look at what he has to say if you are not in an area I can help. Leave me your feedback, and feel free to share additional resources for funding real estate with no money down.

FHA Loans and FHA Loan Requirements

Chris Goulart (All California Lending) — Thu, 20 Mar 2008 23:12:42 -0500

FHA loans are back in the spotlight. Created back in the 1930's to help pull the nation out of a severe housing crunch, FHA loans are once again ready to help stabilize the mortgage and housing world.

In the 1930's, the foreclosure rate was as high as 50%. We are nowhere near that level today, but things are bad, and there are no sub prime lenders willing to lend at 100% on stated income programs to bail out homeowners. There is, however, FHA loans.

Many in the mortgage industry are not overly familiar with FHA loans, especially here in California. There have been many other options in recent years, but now with the credit crunch, FHA loan requirements are looking very attractive.

If you are unfamiliar with some of the FHA loan requirements that make them an attractive choice over Fannie Mae and Freddie Mac backed conforming products, please read my FHA loans Vs. Fannie Mae & Freddie Mac conforming loans post. There are many advantages, from down payment and fico score requirements to seller contributions and allowable co-borrowers.

FHA loans are set to become a mainstay again. Additionally, there is legislation in the works that could further relax the FHA loan requirements in the form of HR 1852. Among other items being discussed are making the new, temporary FHA limits permanent and allowing for no down payment financing, or as little as 1.5% down payment.

Be sure to check in often, I will be keeping tabs on the progress of HR 1852, as will as talking more about FHA loans and FHA loan requirements.

Visit my real estate blog, learn about California hard money or search Contra Costa Real Estate.

New Conforming Loan limits

Chris Goulart (All California Lending) — Mon, 10 Mar 2008 13:37:18 -0500

The much anticipated new conforming loan limits are now off and running. These new conforming and FHA loan limits are good through the end of 2008 unless the program is extended. This is excellent news for homeowners and potential buyers in high cost areas such as California.

Conforming loans are loans that can be purchased by Fannie Mae and Freddie Mac. They do not need to be sold on the open secondary market, and as such, they carry favorable terms and some expanded approval criteria. FHA loans are in a similar boat, and the higher loan limits open the door to many more borrowers to take advantage of the low rates of today.

Now is a fantastic time to look into loan options, whether looking to buy or refinance. If you currently have an adjustable rate loan, or even a fixed rate loan, there are many options available today that were not on the table last week, at terrific terms. Please call me directly at 877 462 3422 for your California home loan needs and I will be more than happy to discuss the options available to you.

If you would like to view the new FHA and conforming loan limits by county in California, you can do so here.

Visit my real estate blog, learn about California hard money or search Contra Costa Real Estate.

Fannie Mae & Freddie Mac Changes on the Horizon

Chris Goulart (All California Lending) — Fri, 29 Feb 2008 00:25:09 -0600

If you have been paying attention to the recent news surrounding the economic stimulus package, you know that conforming loan limits are set to rise. Old limits of $417,000 are being changed on a county by county basis, based on the median home prices for that particular county. That is good news for the housing market, but more changes are on the horizon.

Just raising the conforming limit (the maximum loan amount Fannie Mae and Freddie Mac can purchase) is a good first step, but more needs to be done to get us out of the current housing crisis. An additional issue is the liquidity of the credit markets, especially in the mortgage lending world.

As banks take back more and more properties, they are slashing their asking prices to get them off their books. So not only do we have a glut of homes on the market, but we have a large percentage of them as bank owned. Banks don't want to own property, and are willing to take the large losses that come with the reduced price they must market them at to sell in a timely manner. In the local East Contra Costa real estate market, over 50% of homes currently on the market are either foreclosure or bank owned properties.

More liquidity in the mortgage markets will help by allowing more people to buy these homes. With the recent changes, it is anticipated that refinancing activity will increase as borrowers with adjustable rates resetting higher will be able to qualify for more affordable fixed rate mortgages. A couple of proposed changes on the horizon should help out with those liquidity issues as well. These upcoming changes are not a cure all, but they are surely a step in the right direction.

If you would like to read more details on the proposed changes, please read the rest of this post on my personal real estate blog.

If you have questions regarding the new limits, guidelines or rates, or if you are in the market for a California home loan, please feel free to contact me for more information.

Commercial Lending - Understanding Income Calculations

Chris Goulart (All California Lending) — Wed, 27 Feb 2008 15:46:44 -0600

In commercial lending, whether hard money commercial loans or conventional, it is important to understand and know how to evaluate the income of a commercial property. Below I will outline some of the fundamentals to help you evaluate a commercial properties income.

There are two basics for evaluating income on a commercial piece of property. The two basics are contract rent and market rent. Contract rent is the actual rent collected per the lease or rental agreements. Market rent is what would be paid for your space if you were to rent it on the open real estate market, and is based on current rents for comparable space, substantiated by an appraiser and/or rent surveys for the property.

Using the contract rents for space currently rented, and market rents for vacant space, you can then figure out the effective gross income (EGI), net operating income (NOI) and the debt coverage ratio (DCR). These are all very important numbers to know how to calculate when talking about commercial loans.

To figure these numbers, you also will need to know the operating expenses (OE), and the annual debt service (ADS). For a more in depth discussion on how to calculate these figures, please read the rest of this article, Commercial Lending - Evaluating Income on a Commercial Property.

Please feel free to visit my web page for information on hard money lenders, and feel free to contact me with any questions that I may be able to help you with.

How to Find BPO & REO Listings and Leads

Chris Goulart (All California Lending) — Tue, 26 Feb 2008 02:00:48 -0600

BPO Jobs & REO listings are becoming a larger niche market today. With the downturn in the housing market, and influx of bank owned properties, many real estate agents are tapping these niche market income streams. Here is a quick overview of what a BPO and REO are, and where to go to find that business.

The BPO market is a way to make some money between closings. A BPO is a broker price opinion, and are used by banks and hard money lenders to value properties either without having to order a full appraisal, or in addition to a full appraisal. There are a number of BPO companies out there, and you can make $50-100 per BPO done typically.

Another niche market that many agents are taking advantage of is the REO market. Listing REO property, or bank owned property, often times gives you the leverage to price a property at a price point that will allow it to sell. Additionally, you can also get repeat business from the bank. Both are a benefit of listing REO and bank owned property.

Knowing where to find these listings is key, Click Here to check out a pretty informative guide that can help you get started with REO listings, BPO assignments, or to build your resource list.

Visit my real estate blog, learn about California hard money or search Contra Costa Real Estate.

How to Package Your Residential Hard Money Loans

Chris Goulart (All California Lending) — Sun, 24 Feb 2008 01:41:00 -0600

If you're a broker in today's market, you know that money has tightened up dramatically. Hard money has become the new subprime, and many brokers are finding themselves placing hard money loans for the first time. To make things more difficult, hard money lenders are inundated with loan requests. If you don't already have relationships with individual lenders, you need to package your file properly to ensure it gets a fair shake.

All files are going to require the same basics, 1003, credit report, appraisal, signature authorization, mortgage statements and hazard insurance. Make sure you have these items before trying to place your loan. Once you have these items, save them as PDF's, label them so their label matches the contents, and make sure they are clean and legible. If your 1003 looks sloppy or cannot be read, you're going to have a tougher time securing a loan for your client.

In addition to the basics, you really need to put together a loan summary. This does not have to be long, in fact you should try to keep it as short and concise as possible. For SFR transactions, there are a number of important pieces of information that will allow an investor to quickly analyze your deal. Putting it together in an easy to read copy will ensure it goes to the top of the pile.

Additionally, in today's market, you want to ensure your file gets the attention it deserves. With many private money loans to evaluate every day, the hard money lenders won't waste their time trying to make sense of a package put together poorly.

Read the rest of this article on how to package your residential hard money loans.

30 Year Fixed Mortgage? Here's a new option.

Chris Goulart (All California Lending) — Tue, 19 Feb 2008 18:50:40 -0600

30 year fixed mortgages have been very popular lately. With the low rates and the backlash against the adjustable loans, it makes a lot of sense. There is an interesting product out, though, that has not been getting a lot of press lately, and could be a very good option for many borrowers.

This new program goes by a number of names, most common is the home ownership accelerator program. It works by applying your income, cash reserves and receivables against your mortgage. It basically combines your checking account with your home loan, like a line of credit in a manner, but with much better rates and options.

The bare bones overview of this program is simple. You take out a new loan, just as you would a 30 year fixed mortgage. This is set up as a revolving line of credit. You also run your checking account, and your income via direct deposit through this line of credit. The balance of your checking account offsets the loan amount you are paying interest on, as does the income from your direct deposit. Even if you direct deposit your paycheck on day one, then write a check on day ten, you are reducing the principal amount you are paying on for those 10 days.

Under this plan, your income lowers your monthly balance. The lower balance, in turn, saves you interest, and the saved interest becomes an extra principal payment. This extra principal payment, in turn, further lowers your balance, saving you more interest. This cycle continues each month, and compounds your interest savings, allowing you to pay down your mortgage more quickly than if you took out a traditional 30 year fixed mortgage.

This is just a quick overview of the program, please feel free to contact me for more details, or to find out if this program is right for you.

Visit my real estate blog, or learn about hard money lenders.

Rehab Loans - 100% Hard Money Rehab Loans Do Exist

Chris Goulart (All California Lending) — Sun, 17 Feb 2008 11:50:07 -0600

With the downturn of the real estate market, I get a lot of inquiries into acquisition and rehab loans. No money down, no cash out of pocket for the rehab, can you use the appraised value of the property and finance everything else? Well, yes I can.

Now before you get excited, let me tell you that in order to make this rehab loan a reality, there are some stringent qualifications. A borrower with a 500 credit score, recent bankruptcy and no money to their name is not going to qualify for a 100% rehab loan. Not a chance. A good credit borrower, with assets to their name, however, and even in today's market, it is possible to get in with no money out of pocket.

These acquisition and rehab loans are hard money loans. They are costly, but all the fees can be rolled into the loan. In addition, 6 months worth of payments will be rolled into the loan as well, so there will be no payments for 6 months while the rehab work is being done. I'm typically a California hard money lender, but this is a program that I can offer in many states around the country. Take a look at my rehab loans page for the requirements on this acquisition and rehab loan program. There is also a rehab loan quick application if you or your client fit the requirements. Complete that form and we can get the ball rolling.

Check out my home page real estate blog for more information on rehab loans and other real estate related topics.

Commercial Hard Money Loans

Chris Goulart (All California Lending) — Fri, 15 Feb 2008 14:00:51 -0600

Hard money commercial loans are a good option for many of today's borrowers. Many banks and institutions are putting greater restrictions on the commercial lending they will provide, and often times even the most well qualified borrower can have a tough time obtaining financing for their commercial property. If you are in this situation, you may want to look into a commercial hard money loan.

Commercial hard money loans come in many shapes and sizes. Depending on the investor, you will have different requirements. For most hard money loans, the main concern in making the loan is the loan to value. If the loan to value is good, you can typically get a loan funded. This is true even if your debt coverage ratio is not the 1.15 or better that many institutions are looking for these days.

This can be especially helpful if you are looking to refinance an existing commercial building that is under-performing. If you are looking to take cash out for tenant improvements to improve the debt coverage or attract more tenants, many times your property is not going to meet the debt coverage ratio required by a bank. With a commercial hard money loan, or even a bridge loan, you will find hard money lenders more willing to work with your situation.

Along the same lines, if you are looking to acquire a commercial property that is not perking, hard money commercial loans can offer money for that acquisition. Hard money also offers the flexibility to work with seller carry back situations, cross collateral opportunities, and other creative ways to put together financing that may be able to meet your needs.

If you are interested in exploring your options, please contact me. I can help with California hard money, and commercial hard money nationwide.

Shopping for a Home - Prequalification

Chris Goulart (All California Lending) — Fri, 15 Feb 2008 00:36:12 -0600

Before going out to shop for a home, you really should have a good idea of what you can afford. In fact, if you are working with a real estate agent, chances are they will require you to be pre-qualified before looking at homes. You can get a ballpark idea of what you can qualify for by using our mortgage calculators and calculating your debt to income ratio, but there is no substitute for working with a mortgage professional.

During the prequalification process for a home loan, your mortgage professional will take an application and look at your financial situation. You will typically want to provide income and asset documentation. There are stated loan products available if you cannot or do not want to provide documentation, but your rate is typically going to suffer a bit, especially in today's mortgage market. I would not recommend stated programs these days unless you are self employed. Many lenders are starting to put heavy restrictions on these loans, and usually a stated loan for a W-2 employee means inflated numbers. If you cannot qualify for a loan with your true income, you should probably rethink your price point.

In addition to income, your mortgage broker will take a look at your credit. Your credit will be a factor in qualifying for a loan, and will play a large part of the rate and terms offered. If you are looking to purchase a home, you may want to look at your credit and see if there are any major issues that need to be resolved. Read my article on credit for some information on how to obtain a free credit report and manage your revolving debt. It is a good idea to keep tabs on your credit, and if you are going to be purchasing a home, it is even a better idea.

Visit my home page to read more on prequalification and shopping for a home.

The New 30 Year Fixed Rate Mortgage

Chris Goulart (All California Lending) — Fri, 08 Feb 2008 11:39:33 -0600

30 year fixed rate mortgages are set to become easier to obtain and priced better. The much talked about economic stimulus package has cleared the necessary hurdles, and the president is ready to sign off on it next week. What does this mean to you?

It could mean a whole lot. It could mean the difference between qualifying for a loan and not. It could also mean a much lower rate, better terms and even the ability to buy a more expensive home with 100% financing. This is the best thing to happen to the real estate market in some time, and is a huge opportunity for both existing homeowners and potential home buyers.

If you are an existing homeowner, and have been having difficulties qualifying for a refinance, now is the time to get back in the saddle. Higher loan limits are on the horizon, which means expanded approvals for loans that used to be jumbo, but can now be classified as conforming. Also, if you are a potential home buyer, it means you can re-qualify, possibly for 100% financing, on a larger loan amount today. Get in touch with your real estate agent and mortgage professional today to see what this exciting opportunity can do for you!

Read the rest of this story here.

Hope on the Horizon for the Real Estate Market?

Chris Goulart (All California Lending) — Wed, 06 Feb 2008 01:01:27 -0600

I see a glimmer of hope in this economic stimulus package that is on the verge of being passed. It brings about the best news for the housing market in some time. In addition to the tax refunds that everyone seems to be focusing on, the increase in the conforming loan limits have been overlooked as a small matter. It most certainly is not. Currently, you have a secondary market with very little demand for jumbo loans. Except for the portfolio lenders, most companies who write your loan turn around and sell it on the secondary market. With less demand, and a large supply of people trying to get loans, these lenders can be, and must be, very picky, taking only the best loans submitted. Not only that, they must sell them at higher rates in order for the secondary market to buy them (the higher the rates, the better the return for the investors on the secondary market).

Now with the proposed increase in the conforming loan limit, we can accomplish a few things. First, we take a good portion of the loans off of those jumbo markets that depend on the secondary market outside of Fannie Mae, Freddie Mac and government insured agencies. With less loans to have to sell on the open secondary market, the pricing is going to come back into line with the conforming loans. Not only will the pricing get better, but the liquidity will improve. You will have the same demand, but less product. We all know what happens when supply decreases and demand stays the same, right? A win for loan applicants is what happens in this situation.

Secondly, this increase is going to allow more people to qualify for loans in general. Loans bought by Fannie Mae and Freddie Mac don't have to fit in the same tiny box that a jumbo loan being sold on the open secondary market may have to. You can have a higher debt ratio, and you can even still obtain 100% financing. What's happening on the open secondary market is that people who shouldn't be getting loans aren't. That is not a bad thing, but the down side is that people who should be getting loans also aren't. This is going to open the door for many people who were on the cusp, oh so close to qualifying, but in the end being denied. People who almost qualified. People who qualified for $417k, but needed $425k or $475k. This is going to allow people who really should be getting loans to do so. A big win for homeowners, home buyers and really, the housing market in general.

Come read the rest of my outlook on the economic stimulus package and other current events at http://www.aboutcaliforniahomeloans.com/blog/

Visit my real estate blog, learn about California hard money or search Contra Costa Real Estate.