Dan Magstadt's Mortgage Blog

USDA Runs out of funds!!

Dan Magstadt (Main Street Financial) — Fri, 12 Mar 2010 15:06:27 -0800

There have been quite a few rumblings about the USDA program over the last few weeks, and I just got some concrete news – USDA is on track to run out of funds by the end of April. Following is a portion of the letter from them:

This message is to notify you that program funding for the Single Family Housing Guaranteed Loan Program will likely be exhausted by the end of April, 2010. Once funding is exhausted, the Agency will not issue Conditional Commitments “subject to receipt of appropriated funds." This is because it is not certain when additional funding will be available.

USDA’s fiscal year ends on September 30^th, and there’s no indication that there will be any interim funds allocated for the program. Previously when USDA had funding shortfalls wholesale lenders would continue to fund loans, being assured that funding was coming – That’s not the case right now because of a 5-6mo gap.

I got an email earlier today stating that Wells Fargo (Probably the largest USDA lender) has ceased accepting USDA loan application effective immediately. We have other lenders that are continuing to fund USDA loans until funds run out, but I’m sure they’re going to be slammed with last minute volume.

I would say that to be guaranteed funds the loan needs to be clear to close with USDA’s sign-off by April 23^rd.

Obviously this is the only program that you can get 100% financing, other than VA – If you have anyone that needs 100% there’s not much time left & they better move quickly!!

Please call me if you are in the market for a home loan. I can get it done!!

=============================

Add as an Associate Subscribe to my Blog LinkedIn Profile

I specialize in working with first-time homebuyers across the state of Florida. I know FHA, VA, USDA Rural Housing loans inside & out and would love to answer any questions you might have.

I can be reached at the following:
*Phone: 386-754-8500
*Email: dan@meridianFL.net

Twas the night before Christmas

Dan Magstadt (Main Street Financial) — Wed, 23 Dec 2009 16:53:44 -0800

I had to post this after the two marathon loans I just got to closing - Enjoy!!

'Twas an hour before closing and the agents were tense,
to close Christmas Eve just didn't make sense.
But the seller was booked on the 6 o'clock flight
and had warned "THERE WILL BE A CLOSING TONIGHT!"
The agents agreed because business was dead,
and visions of commission checks danced in their heads.

The loan was approved by the lender's good grace,
Everyone knew 'twas a borderline case.
The buyers divorced, remarried again,
Divorced once more, and now were just friends.
The loan package complete to the closer was carried,
With instructions to close before they remarried.

The title policy arrived via UPS,
From page One through Sixteen, a terrible MESS!
An improper legal, 3 judgments, a lien,
But a few lines on page seven, looked pretty clean.
The title was cleared and the closing was set,
But to finish today was not a sure bet.

The closer dashed in waving her HUD,
It was covered with whiteout, coffee and crud.
But down in the corner you barely could see,
that the buyer still owed a buck thirty-three.
So the closer extracted a bill from her compact,
And the agents agreed to the rest on the contract.

To add some interest, the seller revealed,
to everyone's horror - the well wasn't sealed.
And, oh yes, he wanted to change the disclosure,
His mother just died of RADON EXPOSURE!
Everything else in his house was O.K.
(his cracked floors and walls were always that way)

About that time the buyer chimed in,
"we'd like to continue, but before we begin,
I noticed these papers - I'm likely to blame,
But I gave my agents the wrong legal name,
And one more thing I had hoped to avoid,
Does it really matter if I'm self-employed?"

About this time the closer exploded.
She pulled out a gun and said it was loaded.
Everyone froze and sat there amazed,
She frothed at the mouth and her eyes were both glazed.

More rapid than eagles, her curses they came;
she bristled and spouted and called them BAD names.
"THE CLOSING IS OFF, DO I MAKE MYSELF CLEAR??
MERRY CHRISTMAS TO ALL - NOW GET OUT OF HERE!"

$8,000 Tax Credit Update

Dan Magstadt (Main Street Financial) — Wed, 04 Nov 2009 10:56:51 -0800

Probably the biggest question I get these days is "Has the $8,000 tax credit been extended??"

The short answer is NO. There are bills in the Senate right now that are anticipated to be approved in the coming days, but nothing is concrete at this point.

A few points about the proposed extension:

The tax credit would still be $8,000 for first-time home buyers, but would allow $6,500 for move-up buyers.
The new tax credits will be available from December 1, 2009 to April 30, 2010.
The tax credit will end on April 30, 2010, but as long as you have a binding contract by that date, you will still qualify as long as you complete the transaction within 60 days.
Move-up buyers are eligible, as long as the home they’re leaving has been used as their principal residence for 5 years or more.
Income limits for both first-time home buyers and move-up buyers would be $125,000 for individuals and $225,000 for married couples.
The maximum price of the home being purchased is $800,000.
For purchases made in 2010, taxpayers can claim the tax credit on their 2009 income tax return.
Home buyers would not have to repay the credit, provided the home remains their principal residence for 36 months after the purchase date.
The amendment includes a military waiver provision, meaning the recapture provision would not apply in the case of a member of the Armed Forces, military intelligence or Foreign Service who is on qualified official extended duty.
In addition, members of the military who have been deployed overseas for 90 days or more in 2008 or 2009 would have until April 30, 2011 to claim the home buyer tax credit.
The amendment also includes anti-fraud language that gives authority to the IRS to do greater oversight during the processing of the return rather than waiting for an audit situation. The amendment requires the taxpayer claiming the credit to be 18 years of age or older (no more 4-year olds filing for the tax credit), as well as requiring a HUD-1 settlement statement to be attached when claiming the credit.

This would be a good bill & would continue to stimulate the housing sector - I hope they pass this soon.

Please call me if you are in the market for a home loan. I can get it done!!

=============================

Add as an Associate Subscribe to my Blog LinkedIn Profile

I specialize in working with first-time homebuyers across the state of Florida. I know FHA, VA, USDA Rural Housing loans inside & out and would love to answer any questions you might have.

I can be reached at the following:
*Phone: 386-754-8500
*Email: dan@meridianFL.net

New FHA Appraisal Requirements

Dan Magstadt (Main Street Financial) — Wed, 04 Nov 2009 09:12:35 -0800

Many people are talking about repealing HVCC...the law stating that mortgage brokers cannot be involved in choosing the appraiser or ordering an appraisal on a conventional loan.

I truly hope they do repeal this, however the real news of the day is that FHA is now following in Fannie & Freddie's footsteps - As of Jan 1 2010 all FHA appraisals are required to be ordered through an independent third party with no loan officer involvement.

A couple notable points:

FHA is saying that AMC's must pay appraisers normal market rates for their appraisals, which is good for appraisers, however the buyer will end up paying a higher price when the AMC adds in their fee.
Appraisal reports will only be good for 4 months rather than 6 months.
The only way another appraisal can be done if there is a value issue is the original report will have to be proven to be flawed in some way.

Many brokers were sending their loans FHA vs conventional because they could still choose the appraiser, so it was inevitable that FHA would also change over - They don't want any additional layers of risk than they already have.

There's never a dull day in this industry!!

Please call me if you are in the market for a home loan. I can get it done!!

=============================

Add as an Associate Subscribe to my Blog LinkedIn Profile

I specialize in working with first-time homebuyers across the state of Florida. I know FHA, VA, USDA Rural Housing loans inside & out and would love to answer any questions you might have.

I can be reached at the following:
*Phone: 386-754-8500
*Email: dan@meridianFL.net

Lake City, Florida's top plumber is Plumbing Now!!

Dan Magstadt (Main Street Financial) — Mon, 03 Aug 2009 10:24:57 -0700

Lake City, Florida's top plumber is Plumbing Now!!

I recently needed a plumber to handle a plumbing emergency in the Lake City, FL area, and called Plumbing Now - I was thouroughly impressed with the experience.

The name Plumbing Now describes their service perfectly. Their friendly office manager was a delight to work with & answered all my inital questions while scheduling the service call. They lived up to their name, Plumbing NOW, & sent a plumber out within minutes, not days.

The plumber that came out, Jake was extremely knowledgable, and fixed numerous other issues while he was there. Their prices were extremely reasonable & their professionalism far surpassed any other plumbing company I've dealt with in the past.

I've used other plumbers from Lake City Florida before, and was sorely disapointed - From plumbers not showing up on time, leaving a huge mess, or charging outrageous prices, the plumbing industry has not been at the top of my list of favorite service professionals. I'm very happy I came upon Ken Roche & the team at Plumbing Now.

Ken Roche has been in the plumbing business for 30 years, and the level of experience along with their commitment to their customers shows. They consistently get voted Best of the Best by the local community. Click here for an map of their coverage area.

I was very impressed to find out that all service repairs are warranted for one year - I don't know of another plumber that offers that kind of commitment to quality work. They also offer an unconditional 100% money back satisfaction guarantee. You know a company is commited to customer service when they are willing to say that they will give you your money back if you're not completely satisfied.

They also have a new construction division that handles much of the plumbing for new custom & spec homes built in the Lake City and Gainesville area.

Plumbing Now can also handle the following plumbing issues in the Lake City, FL & surrounding areas:

Drain Cleaning
Bio-Clean
Remodeling and repiping
Electronic Slab leak detection
Water heaters
Instant hot water dispensers
Dishwasher install
Disposals
Filters
Faucet repairs all brands and replacement
Toilet repairs and install
Ice makers and refrigerator water lines
Commercial Plumbing Projects

Give Ken Roche and his team a call for any plumbing need you might have:

352.372.3911 | 386.755.9243
www.callplumbingnow.com

144 SW Waterford Ct.
Lake City, FL 32025

Ken Roche Plumbing Now currently services the following areas:

Lake City
Alachua
Gainesville
Ft.White
Wellborn
Live Oak
Lulu
White Springs
High Springs
Branford
Obrien
McAlpin
Providence
Lake Butler

Please call me if you are in the market for a home loan. I can get it done!!

=============================

Add as an Associate Subscribe to my Blog LinkedIn Profile

I specialize in working with first-time homebuyers across the state of Florida. I know FHA, VA, USDA Rural Housing loans inside & out and would love to answer any questions you might have.

I can be reached at the following:
*Phone: 386-754-8500
*Email: dan@meridianFL.net

Gainesville, Florida's top plumber is Plumbing Now!!

Dan Magstadt (Main Street Financial) — Fri, 31 Jul 2009 17:05:03 -0700

Gainesville, Florida's top plumber is Plumbing Now!!

I recently needed a plumber to handle a plumbing emergency in the Gainesville, FL area, and called Plumbing Now - I was thouroughly impressed with the experience.

I've used other plumbers from Gainesville Florida before, and was sorely disapointed - From plumbers not showing up on time, leaving a huge mess, or charging outrageous prices, the plumbing industry has not been at the top of my list of favorite service professionals. I'm very happy I came upon Ken Roche & the team at Plumbing Now.

They also have a new construction division that handles much of the plumbing for new custom & spec homes built in the Lake City and Gainesville area.

Plumbing Now can also handle the following plumbing issues in the Gainesville, FL & surrounding areas:

Drain Cleaning
Bio-Clean
Remodeling and repiping
Electronic Slab leak detection
Water heaters
Instant hot water dispensers
Dishwasher install
Disposals
Filters
Faucet repairs all brands and replacement
Toilet repairs and install
Ice makers and refrigerator water lines
Commercial Plumbing Projects

Give Ken Roche and his team a call for any plumbing need you might have:

352.372.3911 | 386.755.9243
www.callplumbingnow.com

144 SW Waterford Ct.
Lake City, FL 32025

Ken Roche Plumbing Now currently services the following areas:

Lake City
Alachua
Gainesville
Ft.White
Wellborn
Live Oak
Lulu
White Springs
High Springs
Branford
Obrien
McAlpin
Providence
Lake Butler

Please call me if you are in the market for a home loan. I can get it done!!

=============================

Add as an Associate Subscribe to my Blog LinkedIn Profile

I specialize in working with first-time homebuyers across the state of Florida. I know FHA, VA, USDA Rural Housing loans inside & out and would love to answer any questions you might have.

I can be reached at the following:
*Phone: 386-754-8500
*Email: dan@meridianFL.net

THIS IMPACT'S YOU!!! In-Depth information on the Mortgage Disclosure Improvement Act of 2008 - MDIA

Dan Magstadt (Main Street Financial) — Thu, 30 Jul 2009 12:03:28 -0700

In-Depth information on the Mortgage Disclosure Improvement Act of 2008 - MDIA

This is a lot of reading, but it's all important information!!

Well, the government's done it again! They're trying to streamline & improve mortgage disclosure for borrower's and in the process they've made life a lot more difficult for everyone (Think HVCC).

The federal government has recently issued final guidelines & enacted MDIA which regulates how & when mortgage brokers & lender disclose the APR on a loan. In theory, it is a good thing to require brokers to properly and accurately disclose, however as usual, they've taken this way too far.

The biggest impact the general real estate industry will realize from MDIA is below:

No one (creditor, broker or third party) can collect a fee for anything associated with the loan application and transaction other than for the credit report until after the borrower receives the initial TIL disclosures.
- This means that the broker can not collect the appraisal fee until MDIA guidelines have been met.
- Post-dated checks are not permitted.
- Appraiser's will typically not perform the appraisal until the fee has been paid, so this will add significant time delays to the transaction.
- The regulation states that fees may be collected once the borrowers have received the initial TIL. Many lenders are requiring that they mail out the disclosure - MDIA assumes borrower receipt on the third business day (not counting the mail date).
- So basically, best case scenario, you can order the appraisal on the 5th day after taking the application.
If the APR has increased more than .125% points from the most recently issued TIL, a new TIL must be issued and the borrowers must receive it at least 3 business days before signing closing documents.
- Including mail time this adds seven days to the transaction

Borrowers cannot sign closing documents until the later of:
- The 7^th businessday after the initial TIL was provided <OR>
- The 3^rd business day after the borrower received the most recent/the last amended TIL.
- Business days are the same as for rescission: Monday-Saturday except for federal public holidays
- In the instance of the initial TIL, a business day is Monday-Friday, and Saturday is not included

Several other notes:

Without proof of other means of receipt (signed and dated TIL, or paper acknowledgment) it is assumed the TIL is received 3 business days after mailing.
Loans submitted to underwriting that are not documented or the documentation indicates that fees were collected prior to borrower receipt of the TIL will be rejected by the lender.
None of the waiting periods may be waived by the borrower.

Summary of the changes which take effect July 30, 2009:

New regulations are effective with loan application dates on or after 7/30/09.
The lender must issue initial TILs on purchase, refinance and equity loans on primary residences and second/vacation homes.
The clender, mortgage broker, or any other party to the transaction may not collect any fee other than the credit report fee until the fourth business day (rescission definition) after the initial TIL was issued, or until after receipt of the initial TIL has been documented, if received earlier.
Post-dated checks may not be used.
The borrowers may not close until at least the 7th business day after the initial TIL is issued, or the 6^th business day after an updated TIL is issued when the APR changes more than .125% fixed or .25% ARM, whichever is later (6 days assumes 3 days from mailing to receipt, and 3 days from receipt to signing).
A TIL reissued solely because of an increase in a finance charge, a change in loan program, etc., does not impose the new three-day waiting period before closing PROVIDED the new APR is not more than .125% points greater than the most recently disclosed APR.

Frequently asked questions:

How do the new requirements impact applications taken prior to the effective date? -As long as the initial application is dated before July 30, there will be no impact.

Do the timing requirements for the issuance of the initial disclosures and re-disclosure, and fee collection apply to investment property?-No. These requirements only apply to primary residence and second home transactions.

The final TIL must be received 3 business days prior to closing. Is that 3 full days?-You must allow 3 business days for mailing, then the homebuyers have 3 business day review period required to determine if they are comfortable with their loan choice. Closing can occur on the 3rd business day AFTER receipt PROVIDED this is also at least 4 business days after the borrower received the initial TIL (if it is mailed, we can assume it was received on the 3rd business day after it was mailed).

Does the broker have to get the Lender TIL to the borrower within 3 days of application? -No. The lender is responsible for sending out the TIL to conform with MDIA. The broker must disclose the GFE and TIL within 3 days of application to meet RESPA requirements.

Can credit report fees be collected at time of pre-qualified applications?-Yes. The credit report is the only fee that can be collected before the applicant receives the initial TIL.

When a phone application is taken, can a post dated check, credit card or other payment information be collected and held until upfront fee payment is collected?-No. Fees or payment information cannot be collected prior to the allowed fee collection date, which is a minimum of 4 business days after the initial disclosures are mailed (if mailed) or before the applicant receives the initial TIL disclosure if it is not mailed.

If a broker orders an appraisal prior to collecting fees---can this appraisal order continue, appraisal delivered and used to evaluate the loan?-Yes, if the broker pays for the appraisal upfront and does so at their own risk. If the borrower decides not to proceed with the transaction once they get the TIL, they can be under no obligation to reimburse the broker for the cost of the appraisal.

If two borrowers are applying for a loan, and only one person is present at the application, can upfront fees be collected at the time that the one borrower is present?-YES. If there is more than one consumer, the initial disclosures may be made to any consumer who is primarily liable on the obligation.

Does this regulation only impact purchase transactions, or are refinances subject to the same guidelines?-Both purchases and refinances are impacted.

Is the 3 Day Right to Cancel still in effect?-Yes, the right of recision is still in effect for refinance transactions.

Can Lender accept an appraisal that was performed for another lender? Yes, lenders can accept a transferred appraisal and loan as long as no other fees are collected or imposed until the borrower receives the new lenders TIL disclosure. File will need to be adequately documented that the initial TILA process was complied with original lender.

What happens if it is apparent to lender that broker collected fees prior to borrower receiving a copy of the Initial TIL?-If this is apparent, the loan will be rejected and not able to close with this Lender. Lenders cannot close a loan that is not in compliance with this regulation as well as all other federal, state and local laws and regulations.

Please call me if you are in the market for a home loan. I can get it done!!

=============================

Add as an Associate Subscribe to my Blog LinkedIn Profile

I specialize in working with first-time homebuyers across the state of Florida. I know FHA, VA, USDA Rural Housing loans inside & out and would love to answer any questions you might have.

I can be reached at the following:
*Phone: 386-754-8500
*Email: dan@meridianFL.net

Record month for FHA loans

Dan Magstadt (Main Street Financial) — Mon, 27 Jul 2009 18:11:51 -0700

More FHA loans were originated in June than ever before.

FHA guaranteed almost 186,000 mortgages in June, a monthly record for the agency in its 75-year history. The total number of FHA loans originated last month surpasses the previous record of 157,000 set last October. Having never crossed the $40 billion threshold in a month’s span, the mortgage association issued $43.5 billion in mortgage-backed securities in June.

Currently nearly 36% of all mortgage applications are FHA loans and are guaranteed by Ginnie Mae, a government backed agency.

With conventional loans becoming ever more difficult to obtain (They now require a 720 credit score & minimum of 10% down payment), and alternative loan products having disapeared in recent months many borrowers have turned to FHA.

FHA is not strictly a first-time homebuyer program, but with low down payment requirements (3.5%), and flexible credit & qualifying factors, it has definitely become the program of choice for first-time homebuyers as well as seasoned homeowners looking to make a move.

One cause for concern is that the percentage of seriously delinquent loans has risen in May to 7.42% from 6.47% just one year ago. Taxpayers are ultimately responsible for the bad loans & could end up footing the bill in the long run.

Please call me if you are in the market for a home loan. I can get it done!!

=============================

Add as an Associate Subscribe to my Blog LinkedIn Profile

I specialize in working with first-time homebuyers across the state of Florida. I know FHA, VA, USDA Rural Housing loans inside & out and would love to answer any questions you might have.

I can be reached at the following:
*Phone: 386-754-8500
*Email: dan@meridianFL.net

THE MARKET VALUE OF YOUR HOME IS DETERMINED IN SEVERAL WAYS:

Dan Magstadt (Main Street Financial) — Tue, 21 Jul 2009 17:18:11 -0700

Via Ralph Gorgoglione (EcoBroker Certified - John Aaroe Group, Inc.):

The market value of your home is not:

• What you have in it

• What you need out of it

• What it is appraised for

• What you heard your neighbor’s house sold for

• What the tax office says it is worth

• What it is insured for

• Based on memories and treasures

• Based on prices of home where you are moving

The true market value of your home is….what a Buyer is willing to pay for the property TODAY:

• Based on today’s market

• Based on today’s competition

• Based on today’s financing

• Based on today’s economic conditions

• Based on the Buyer’s perception of property condition

• Based on location

• Based on normal marketing time

As a seller, you control:

• The price you ask

• The condition of the property

• Access to the property

As a seller, you do not control:

• Market conditions

• The motivation of your competition

• Value

Warning Signs:

AGENT Elimination – If agents are not previewing or if they preview but do not show your home, they are eliminating your property

BUYER Elimination – If your home is being shown repeatedly with no results, buyers are finding better properties in your price range. In either case, this is an indication that your home is not priced at current market values.

Remember: Price Overcomes all Objections!

Interest Rates Are Coming Back Down

Dan Magstadt (Main Street Financial) — Mon, 20 Jul 2009 16:56:01 -0700

Mortgage rates fell to the lowest level since May as home-loan refinances surged. Rates had reached record lows of 4.5% for a 30yr fixed rate loan in April until the end of May where they spiked over 1½% in two days time.

Since then they've slowly edged back down - Today the average 30-year rate fell to 5.14 percent, down from 5.20 percent. The 15-year rate was 4.63 percent.

Some more technical data:
    - Overall home loan applications rose 4.3 percent this week:
            * Purchase applications fell 9.4 percent
            * Refinance applications rose 18 percent
     - The global mortgage crisis has cost the world's financial firms almost $1.5 trillion in losses so far.
     - The Federal Reserve kept the federal funds rate at between zero and 0.25 percent last month.
            * Their statement at the time was "The rate will stay at "exceptionally low levels" for an "extended period".

At this point the Fed is pleased with how their programs have positively affected the financial system and economy as a whole, so the general concensus is that we're going to see "more of the same" out of the Fed.

=============================

Add as an Associate Subscribe to my Blog LinkedIn Profile

I specialize in working with first-time homebuyers across the state of Florida. I know FHA, VA, USDA Rural Housing loans inside & out and would love to answer any questions you might have.

I can be reached at the following:
*Phone: 386-754-8500
*Email: dan@meridianFL.net

Don’t Wait-Only 138 Days to Claim Your Share of the Tax Credit

Dan Magstadt (Main Street Financial) — Thu, 16 Jul 2009 17:05:00 -0700

Via Cindy Jones-Northern Virginia Real Estate & Military Relocation Services (RE/MAX Allegiance #1 RE/MAX Company in the World):

The rush is on. The deadline for purchasing a home using the $8000 tax credit is November 30, 2009. You might be surprised to find out how quickly the remaining days left to take advantage of the "free" money from the government will click away.

Let's take a look at how you might use up your time remaining.

Before you even head out the door to look at houses you need to have made contact with a lender and start the pre-approval process. The further you get along in this process before you get in a car to look at a home the better. For timing we will say that this process will take you a week because you are super organized and have all of the documents on hand that your lender needs. (7 Days Gone)

Now you are ready to actually head out and look. With lower inventory (below $250,000) than a year ago, it would be realistic to think that it will take you 30 days to find a house. Then there is the contract ratification process. If you are lucky and you have focused on seller owned properties you may be able to get a ratified within 7 days. (37 Days Gone)

With the new appraisal rules (HVCC) and the new lender rules (HERA) going into effect you can expect that getting your final loan approval will be 30-45 days. For our calendar we will take the longest number just to be safe. (45 days Gone).

How are we doing so far? Looks like we have knocked 89 days off the calendar leaving 49 days left until the deadline. Whew looks like you have plenty of time to get this done.

Wait we forgot to add in the days that FHA is going to require for a second appraisal (it is happening more and more) or the processing time at the settlement company. So let's pad those 89 days with an extra 7 to be on the safe side. Now we have taken a total 96 days off the calendar. Leaving you 42 days to move in and enjoy your new home.

If you take longer to find a home, if the lender takes longer to approve your loan or you think you want to buy a short sale....then you may have waited to long!

Are you still thinking about whether the market might decline a bit more making your dream home just a bit more affordable? Or are you waiting for the interest rates to come down to 4.5% again? If you are then every day you wait is one less day that you have to deal with any issues in your schedule. If you are serious about buying a new home this year and are eligible for the $8000 tax credit then time is of the essence. Don't sit on the fence much longer or you may find yourself looking at the calendar on December 1st and wondering what you were waiting for.

Home Sales Are UP Across Florida

Dan Magstadt (Main Street Financial) — Wed, 15 Jul 2009 10:30:35 -0700

Below are May's Florida home sales numbers. You can see that sales are up pretty significantly over 2008's numbers.

This is due to the large number of bank owned & foreclosure/pre-foreclosure properties out there - Investors & homebuyers looking for a good deal are snatching the properties up.

I've had numerous situations in the last 4-6 weeks where a buyer was looking for a house in the $125,000-$175,000 price range. After putting offers on 5-10 properties over the course of a month they got beat out of every one of them, many times the home selling for tens of thousands of dollars above the list price.

Many times the homes have only been on the market for a day or two & get 10-20 offers.

This is a great thing though...it's clearing out the inventory & will help get the housing market back to normal.

Rates are still in the low 5's, and with prices at this level, there's never been a better time to buy a home.

Ever feel like giving up???

Dan Magstadt (Main Street Financial) — Thu, 02 Jul 2009 16:16:34 -0700

Ask yourself if you would have continued fighting if faced by the following set of circumstances. For someone to meet such obstacles & continue on is amazing:

· 1832 Failed in business- Bankruptcy

· 1832 Defeated for Legislature

· 1834 Failed in business- Bankruptcy

· 1834 Defeated for U.S. Congress

· 1835 Fiancée died

· 1836 Nervous breakdown

· 1836 Defeated in election

· 1848 Defeated for U.S. Congress

· 1855 Defeated for U.S Senate

· 1856 Defeated for Vice President

· 1860 Elected President of the United States of America

Abraham Lincoln

How's your day going??

Fourth of July Event - Fireworks Over Lake City - North FLorida's Best Fireworks Display

Dan Magstadt (Main Street Financial) — Thu, 02 Jul 2009 10:07:25 -0700

Everyone be sure to come down to beautiful Lake DeSoto for the July Fourth celebration in Lake City, FL on Saturday.

The night is going to kick off at 6 PM with live music, great food, and lots of friends & family!

Bring your lawn chairs or blankets and gather around the lake's edge for this magnificent display.

The kids are sure the enjoy the evening as well with free balloons & lots of hot dogs, barbecue, & ice cream for everyone!

The fireworks display is scheduled to begin at 9:15 & is sure to be North Central Florida’s best and brightest yet. There will be extra fireworks added this year in an effort to top last year’s grand finale that showered the still waters of Lake DeSoto.

There is estimated to be 20,000-25,000 people at the event, so be sure to show up early!!

Have You Signed the HVCC Petition? Only 40,178 people have

Dan Magstadt (Main Street Financial) — Fri, 26 Jun 2009 15:30:40 -0700

This is extremely important & something every members in the real estate community needs to participate in (including consumers!).

HVCC is ultimately hurting the consumer & is not solving any of today's real estate or appraisal issues.

Take a few minutes of your time and let the politicians know that this is a bad rule & they need to stand against this!!

Via Donna Harris, REALTOR® & ASP - Austin TX Real Estate (RE/MAX Austin Skyline):

Have you signed the petition for the HVCC? Have you seen the petition?

It's amazing that so many people are complaining about the HVCC, there's a petition to do something about it, however, only 40,178 people have signed it.

Aren't there 1.3 MILLION REALTORS® out there? With that number alone, there should be several hundred thousand signatures already... but there aren't.

Aren't there like 5 appraisers for every Realtor? Ok, I know there aren't that many, but there have to be several hundred thousand appraisers across the country.

Why aren't they all signing this if they're that upset? Have most given into the "lowest bidder" for the appraisal mentality?

I heard an appraiser was finally questioned when he kept winning the lowest bid, because he had done 3 appraisals in a week within a 150 mile radius... how does a "good" appraiser complete a "good" and valuable appraisal being knowledgeable of all those different areas being 150 miles away? This appraiser, in no way, could be knowledgeable about all those different areas... but he was the lowest bidder!!

I'm not saying that I condone what some appraisers were doing in the past, but we need to move forward. I don't believe the HVCC is the way to move forward. It's creating a backlog in underwriting and it's getting really ridiculous.

Please sign The Petition here, and then post which number you were when you signed it.

**Are You Packed Yet?**

Donna Harris, REALTOR®
RE/MAX Austin Skyline
www.DonnaHomes.com
Donna@DonnaHomes.com

Austin, TX real estate and the surrounding areas of Lakeway, Bee Cave, Westlake Hills, Cedar Park, Round Rock, Spicewood, Circle-C, Steiner Ranch, and everywhere in between... Whether you're buying or selling, I'll be with you through the entire process.

The Evolution of Math in the United States

Dan Magstadt (Main Street Financial) — Fri, 29 May 2009 11:34:54 -0700

This is pretty much spot on:

Last week I purchased a burger and fries at McDonalds for $3.58. The counter girl took my $4.00 and I pulled 8 cents from my pocket and gave it to her. She stood there, holding the nickel and 3 pennies. While looking at the screen on her register, I sensed her discomfort and tried to tell her to just give me two quarters, but she hailed the manager for help. While he tried to explain the transaction to her, she stood there and cried. Why do I tell you this; because of the evolution in teaching math since the 1960's...

Teaching Math In 1970: A logger sells a truckload of lumber for $100. His cost of production is 4/5 of the price. What is his profit?

Teaching Math In 1980: A logger sells a truckload of lumber for $100. His cost of production is 4/5 of the price, or $80. What is his profit?

Teaching Math In 1990: A logger sells a truckload of lumber for $100. His cost of production is $80. Did he make a profit?

Teaching Math In 2000: A logger sells a truckload of lumber for $100. His cost of production is $80 and his profit is $20. Your assignment: Underline the number 20.

Teaching Math In 2009: A logger cuts down a beautiful forest because he is selfish and inconsiderate and cares nothing for the habitat of animals or the preservation of our woodlands. He does this so he can make a profit of $20. What do you think of this way of making a living? Topic for class participation after answering the question: How did the birds and squirrels feel as the logger cut down their homes? (There are no wrong answers.)

The skinny on HVCC

Dan Magstadt (Main Street Financial) — Mon, 11 May 2009 14:49:00 -0700

The Attorney General of New York (Andrew Cuomo) started quite an uproar with an investigation into the appraisal process and the mortgage industry. Fannie Mae & Freddie Mac quickly moved to appease him & subsequently agreed to huge changes to the way appraisals are handled.

The resulting settlement agreement, the Home Valuation Code of Conduct or HVCC makes the following changes:

All appraisals must be ordered through a third party, called an Appraisal Management Company (AMC). A broker can no longer order an appraisal from a specific local appraiser that is an established professional, well versed in their local market....The order goes to an AMC & they choose the appraiser, usually an appraiser that is not nearly as qualified, but is willing to work for a reduced fee (The AMC keeps a good part of the appraisal fee).
The mortgage broker/loan officer & realtor is banned from any communication with the appraiser. Until now many problems/potential pitfalls were able to be avoided by good communication with the appraisers...not anymore

These new changes will seriuosly hurt the mortgage industry. There will be no accountability for appraisers & the consumer will have no control in ensuring that a true valuation is done on a property.

Currently VA appraisals are ordered this way & I can say that the wort appraisal experiences I've had to date have been with VA appraisals. The appraiser knows that they will continue to receive orders directly from the third party system & feels no responsibility to convey a positive experience to all parties involved.

HVCC applies to all conventional, single-family loans originated on or after May 1, 2009. Thankfully this doesn't apply to FHA loans, currently the majority of loans originated today.

We'll see how this new way of doing business...There is a large movement working to get this repealed which I'm strongly supporting.

Are you a veteran??

Dan Magstadt (Main Street Financial) — Fri, 17 Apr 2009 09:45:03 -0700

Are you sitting down?? The government has actually gotten something right for once!!

For any veteran that is in the market to purchase a home know this - A government backed VA loan is superior to any loan product available today.

VA loans are the absolute best way to go in today's mortgage environment.

Some benefits:

No down payment
No monthly mortgage insurance
The seller can usually pay all of your closing costs
Loan amounts up to $417,000 (higher in some cases)
No min/max income requirements to qualify
Flexible debt-to-income ratios (Up to 60% w/ good credit)
Credit scores as low as 580 allowed

In the past VA loans were more difficult to originate than conventional loans: more paperwork, inspections, hoops to jump through, etc. Recently however, guidelines/requirements have been modified & the process is quite easy, especially if the mortgage broker is familiar with the process - Our VA loans go as smoothly & close as quickly as a conventional loan.

As a mortgage broker or realtor you should be asking all your buyers if they are VA eligible...you'd be surprised at how many veterans there are out there!

February FL Sales Numbers

Dan Magstadt (Main Street Financial) — Thu, 02 Apr 2009 17:04:45 -0700

February's home sales were up 20% statewide which is great news!! At the same time there was a 29% decline in prices. You can see the regional breakdown from the chart below.

Once again, you can see a pattern of the areas with the greatest price reductions saw the highest growth in sales...Obviously this is to be expected, and the quicker sellers drop their prices back to reasonable levels (pre-2005, 2006) the quicker the market will level itself out.

Great Florida Home Sales News

Dan Magstadt (Main Street Financial) — Wed, 25 Feb 2009 16:25:50 -0800

I just got Florida's January home sales numbers & the statistics are very good:

January, 2009 had 8,450 closed transactions across Florida vs. 6,810 in January 2008 - This is a 24% increase in home sales over last year's numbers.

The downside is that the median sales price was down to $139,500 from $206,900, a 33% decline. This is primarily based on the huge amount of foreclosures & short sales as well as sellers having to slash their prices to sell their homes. The decline has to be expected due to the unreasonable levels prices got to during the 04, 05, 06 craziness.

It is painful for homeowners to see values continuing to drop, but it is a very good thing that sales are up so much - Buyers are out there cleaning up the excess inventory. As soon as the oversupply of homes is removed from the market home prices will stabilize - Good ol' supply & demand economics.

It's great to see some good news out there!!

Rates will HAVE to go up!!

Dan Magstadt (Main Street Financial) — Tue, 24 Feb 2009 16:05:02 -0800

Based on all economic indicators interest rates will HAVE to start moving upward in the relatively near future.

In the recent months/years there have been several factors that have kept interest rates low: Starting on 2001 after the Sept 11 slowdown the Fed started cutting interest rates which brought down mortgage rates & helped stimulate the housing market.

At that time there was a feeding frenzy & everyone knows about the resulting housing boom that lasted 5-6 years. During this time interest rates stayed low mainly due to the insane amount of real estate transactions happening during those years.

In early 2005 the Fed started raising the key interest rate again, but that was in the midst of the housing boom & interest rates were only slightly affected.

Throughout all this China's voracious demand for American bonds helped keep interest rates low as well.

Once the housing boom started slowing down & the economy came to a screeching halt the Fed once again started slashing the funds rate & is now effectively at 0%.

What's happening now is China has a severely reduced enthusiasm for buying our T-Bills, there is a huge amount of debt that needs to be funded, & the Fed is going to have to raise their rates to make it more attractive for investors to fund the deficit.

In the midst of all this, mortgage lenders aren't going to be satisfied with a paltry 5% return on their investment & in order to keep pumping money into the mortgage market they'll want a higher return on their investment aka higher interest rates.

No one knows when this shift will come, but know it will & when the upward trend begins I believe it will be a steady uphill climb & will last for an extended period.

If you look at the last 30 years you'll see a history of dramatic rises: Interest rates well into the teens.

In closing I'll say, Buyers need to get off the fence & purchase a home now - These are ideal conditions for a buyer....extremely low interest rates along with home prices that have fallen dramatically. Now's the time to move!!

Don't let there be a feeling of regret in looking back to these days & wishing that you had moved on 5.5% interest rates.

Evil Lenders

Dan Magstadt (Main Street Financial) — Fri, 16 Jan 2009 11:07:44 -0800

I was motivated to write this after reading Elizabeth Weintraub's post: Shocking News About Countrywide's New Shortsale Demands - It's Below the Belt, Even for CW.

There are going to be strong feelings on both sides of this argument, so let me first put this disclaimer out there: There are most definitely circumstances where foreclosure is unavoidable - When someone has a serious unexpected hardship & absolutely can't make their mortgage payments any more, foreclosure is inevitable & unavoidable. In times like these there are many more situations like this than in past years.

There's my disclaimer.....Now to the point of my post:

It has become all too common for borrower's to walk away from their home just because it's not comfortable to make the payment anymore, or their value isn't where it was at some point.

Many people (as I detected in the tone of Elizabeth's post) feel that the "evil lenders" have created the current housing mess & any actions they take are justified as such. The lenders absolutely have played a part in getting us to where we're at today, but ultimately it's the borrower that decided to purchase the home & sign the mortgage.

It's dangerous territory to develop a victim mentality & start to believe that it's not your fault. Ask the inmates in prison how many of them actually committed a crime....every one of them has an excuse of how they were wronged.

Once too many people get together talking about the "evil lenders" a mob mentality can easily develop & it becomes very easy to walk away from your obligations due to what the evil lenders have done to you.

In Elizabeth's post the sellers had perfect credit & lots of room on their credit cards, they just decided they weren't going to make the payments any more due to unexpected circumstances.

What was once a last resort option that was a horrific experience has now become an accepted practice if a mortgage payment becomes too inconvenient.

At some point we have to own up to the decisions we've made & make some sacrifices instead of leaving the lenders holding the bag.

I just quoted 4.25%!!

Dan Magstadt (Main Street Financial) — Wed, 14 Jan 2009 10:45:21 -0800

Rates right now are the best I've ever seen them, including the drop in the last couple weeks.

I just quoted a borrower 4.25% for a 30yr fixed loan - They were paying 1.5 points to get this rate, but that is still the best it's been in decades!!

I know there's a tendency with many borrowers to say "If they're this low now, they may even go lower!". That could be true, but the opposite is more likely - Usually when there is a temporary downturn, a sharp upturn follows soon after.

Get it while it lasts!!

New DPA Legislation

Dan Magstadt (Main Street Financial) — Wed, 14 Jan 2009 10:04:31 -0800

Here's some great news that would get home purchase cranking in a hurry! Everybody talks about 4.5% rates & great deals on home prices, but if a borrower hasn't saved up the necessary 3.5% down payment they can't buy a house whether rates are 4.5% or 8.5%!

Last October all seller funded down payment assistance was banned by FHA. At that time a large percentage of purchase transactions were using that program in order to help buyers that were qualified for financing, but hadn't saved the necessary 3% down payment, get into a home.

HUD's contention when trying to eliminate the program was that a much larger percentage of borrowers that used down payment assistance defaulted on their loans vs. those that did not.

The actual fact is this: FHA's guidelines were MUCH more lax at the time these programs were being used: Loans with 500 credit scores, high debt-to-income ratios, & minimal assets were being approved. There was a tendency for these buyers to use down payment assistance & naturally there was a higher default rate - Not strictly because they used DPA, but because they were a higher risk borrower in the first place. In the past 6-9 months FHA guidelines have tightened to where they should be: 580 minimum score, reasonable DTI's, etc. Just these steps have eliminated many of the loans that used DPA & defaulted.

I argue that the default rate would be similar between loans that fit today's guidelines using DPA vs those that had a borrower paid down payment.

There's my support of the program - Now the good news!

A bill to reinstate down payment assistance will be introduced as early as tomorrow. The bill is expected to be introduced by Congressman Al Green (TX) with support from both sides of the aisle.

The bill will have the same language as unanimously passed last year by the House Financial Services Committee.

Let's all put our support behind this bill - Believe me, if re-instated this bill would help the housing market much more than any other stimulus being discussed right now.

The Length & Depth

Dan Magstadt (Main Street Financial) — Mon, 12 Jan 2009 16:02:37 -0800

I'm an eternal optimist & by no means a preacher of doom & gloom. I'm actually usually the one coaxing people out from underneath their desks & encouraging them that they can still be successful in today's real estate market.

Having said that, there's no question that the economy has slowed down from where it was 1-2 years ago and many people, both directly in the real estate business & not are asking how deep and far it will reach.

Following is an extremely comprehensive report that Fannie Mae produced explaining what created today's slowdown. It also compares this slowdown to slowdowns of the past.

I think the following completely & simply explains what got us to where we're at & why this is continuing:

The central player in the current recession has been excess leverage within both household and business balance sheets. This excessive level of leverage is being unwound across the entire credit market.

They also have some very good projections of the timing of the market improving, based on past slowdowns.

The report can be found here: http://www.fanniemae.com/media/pdf/economics/2008/Summary_121908.pdf