Dustin's Blog

Free Speech Has Consequences

Dustin R. Burke (MassMutual - Levin Financial Group) — Mon, 07 Jul 2008 16:09:33 -0500

In January 2000, John Rocker, a former relief pitcher for the Atlanta Braves, made controversial remarks to Sports Illustrated. Since that time, he has littered his career with one unpopular slur after another. His comments ignited a firestorm of debate concerning freedom of speech in America that continues to this day. Rocker's most well-known remarks from the Sports Illustrated interview are:

[New York is] the most hectic, nerve-racking city. Imagine having to take the [Number] 7 train to the ballpark, looking like you're [riding through] Beirut next to some kid with purple hair next to some queer with AIDS right next to some dude who just got out of jail for the fourth time right next to some 20-year-old mom with four kids. It's depressing. (Pearlman par. 5)

Since 1791, there has been a continuous dialogue in this nation regarding the rights the U.S. Constitution provides its citizens, and, more specifically, to what degree free speech is afforded them. Although Rocker's remarks are laced with bigotry and hatred, is he open to make those remarks without consequence? And, if his statements are considered protected speech, should he exercise that right liberally and without restraint? Does this great right carry with it even greater responsibility?

While I have a cursory knowledge of the legal system, it is still easy to see there are many conflicting views regarding freedom of speech. Cornell University Law School offers this commentary:

Probably no other provision of the Constitution has given rise to so many different views with respect to its underlying philosophical foundations, and hence proper interpretive framework, as has the guarantee of freedom of expression-the free speech and free press clauses. (par.5)

The idea goes further to show that there are several schools of thought concerning free speech. Some believe that there should be limitations on free speech based on a complex of values or limited only to political speech. Another school of thought, considered a broader-grounded view, argues that liberal freedom of speech promotes liberty, the concept of self-realization, and individual self-fulfillment (Cornell University Law School par. 5). Another quote from Cornell University Law School states, "...the writings of Milton and Mill [argue] that protecting speech, even speech in error, is necessary to the eventual ascertainment of the truth..." (par. 5). From a legal perspective, I agree with the broader-based view. The Constitution has given citizens, even Rocker, a liberal amount of protected speech, no matter how unpopular.

Although I believe that Rocker has the legal right to say almost anything without recourse from the government, I do not believe Rocker, or anyone else, is protected by the Constitution from the consequences of exercising that free speech. Indeed, I believe that the Constitution only limits federal powers when regulating speech but does not limit the actions other can take in response to that free speech, such as individual or corporations. The Constitution states "Congress shall make no law... abridging the freedom of speech..." (U.S. Const. amend I). It does not limit Joe Citizen, the Atlanta Braves, the media, Major League Baseball, or anyone else.

Although the Constitution restricts congressional actions that curb free speech, and while there is no federal mandate for personal responsibility when using free speech, the American society has responded to fill the void. In response to Rocker's remarks and in true American fashion the nation reacted. Relentlessly, media pundits made Rocker a villain by chastising him publicly and putting a spotlight on his litany of unpopular comments. Also in 2006, Rocker was banned from baseball by MLB commissioner Bud Selig, who also imposed a $20,000 fine and ordered Rocker to attend sensitivity training for the remarks he made to Sports Illustrated ("Report: Rocker calls sensitivity training a ‘farce'" par. 11). In addition to receiving flack from the media and the punishment imposed by MLB, it became dangerous for Rocker to play baseball in New York. His comments enraged Mets fans so much that 700 police officers were assigned to Shea Stadium instead of the normal 60 ("Rocker ranckles fans, retires Mets" par. 27). These are some of the consequences Rocker faced because of his choice to exercise unbridled free speech.

Just because Rocker has the legal right to say whatever he feels doesn't mean he should. In fact, Rocker, being in the public eye must act in a manner that will not be offensive to the public. I like the way an article on Askmen.com sums it up by stating:

Baseball teams work hard to play a positive role within society, with the fans, and especially with children... [t]he bottom line is that as an Atlanta Brave, he should not be affecting the team's relationship with the public. ("Athletes & Freedom of Speech" pars. 10 and 11)

The article on Askmen.com is right; if Major League Baseball, more specifically the Atlanta Braves, want to be a viable organization they, as an organization, must act in a collective manner that is agreeable to fans. Since Rocker is a member of that organization he must yield his tongue to those that control the purse strings - the Atlanta Braves, and ultimately the fans - or be ready to accept consequences. Most organizations care about their reputation: whether a church, a corporation, or the Atlanta Braves. In order for an organization to promote its best image to the public, it will many times restrict the speech or actions of its employees (or members if a church).

In addition to Rocker restricting his speech to promote a better relationship with the Atlanta Braves and his fans, he should also restrict his speech for spiritual reasons. Jesus said, "The good man brings good things out of the good stored up in his heart, and the evil man brings evil things out of the evil stored up in his heart. For out of the overflow of his heart his mouth speaks." (New International Version, Luke 6:45). When Rocker spews venom of hate and bigotry, he shows the world the darkness that is in his heart. Words from James' epistle are eerily prophetic for Rocker:

It only takes a spark, remember, to set off a forest fire. A careless or wrongly placed word out of your mouth can do that. By our speech we can ruin the world, turn harmony to chaos, throw mud on a reputation, send the whole world up in smoke and go up in smoke with it, smoke right from the pit of hell. (The Message, James 3: 4-5)

The wrongly placed words of Rocker threw mud on his reputation and turned harmony to chaos when he stirred up an angry mob in New York. And in Matthew's Gospel, Jesus said, "But those things which proceed out of the mouth come from the heart, and they defile a man." (New King James Version, Matt. 15:18). When Rocker misguidedly practices his legal right to freedom of speech, he defiles himself.

In conclusion, John Rocker is protected by the Constitution to say almost anything he desires, however he should not expect to be able to walk away from those statements unscathed. Rocker not only has the right to free speech, but also the responsibility to use that speech wisely. As a public figure, one to whom much has been given, much is required. The effects of his wrongly placed words are severe and long lasting. Yes, Rocker has the right to be a dope, but he has a greater obligation to his fans, to Major League Baseball, and even to himself to choose his words wisely.

Works Cited

"Athletes & Freedom of Speech." Askmen.com. 5 July 2008 <http://www.askmen.com/sports/fanatic/fanatic7b.html>.

Cornell University Law School. "First Amendment Religion and Expression Freedom of Expression - Speech and Press." CRS Annotated Constitution 05 July 2008. <http://www.law.cornell.edu/anncon/html/amdt1bfrag1_user.html>.

New International Version. Holy Bible. Colorado Springs: International Bible Society, 1984.

New King James Version. Holy Bible. Nashville: Thomas Nelson, 1982.

Pearlman, Jeff. "At Full Blast." CNNSI.com 23 December 1999. 2 July 2008 <http://sportsillustrated.cnn.com/features/cover/news/1999/12/22/rocker/>.

"Report: Rocker calls sensitivity training a ‘farce'." ESPN.com 26 June 2006. 6 July 2008 <http://sports.espn.go.com/mlb/news/story?id=2499926>.

"Rocker ranckles fans, retires Mets." Associated Press. 27 June 2000. ESPN.com. 29 June 2000. 5 July 2008 <http://espn.go.com/mlb/news/2000/0627/607141.html>.

The Message. Holy Bible. Colorado Springs: NavPress Publishing Group, 2002.

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Soft Market Policies| They Don't Work

Dustin R. Burke (MassMutual - Levin Financial Group) — Mon, 30 Jun 2008 14:43:13 -0500

Since the recent real estate boom went bust, banks and lending institutions have implemented credit and underwriting policies that have acted as an accelerant to the free fall of property values. These policies, intended to protect the financial organizations, are causing a great deal of harm to those same financial institutions and to the public at large. One such plan adopted by the majority of loan committees has been the primary catalyst for stricter lending procedures causing degenerative cash flow positions for the financial markets. The idiom used to justify that vehicle, a vehicle that siphons much needed liquidity from the parched equity markets, has become a well established phrase in the vernacular of real estate professionals: soft market.

A definition for soft market cannot be found on Merriam-Webster Online, and the results from searching Google (www.google.com) and Librarians' Internet Index (www.lii.org) are less than satisfactory. As a finance professional, I define soft market as a real estate expression, an idiom, used by the collective lending community to describe a region where property values are in decline. A market is said to be in decline when the current property values in a specific area are presently less than the values reported in the preceding calendar quarter. If property values in a particular area have decreased from one calendar quarter to the next that area is identified as a soft market. Typically, these market conditions are caused by supply and demand, when there are more people selling real estate than buying real estate. When an area has too many people selling or not enough people buying it creates a surplus of property for sale on the real estate market. Many sellers become desperate to sell; to motivate buyers to buy, sellers lower their asking prices causing further decline in property values.

Lending institutions have specific procedures for soft markets called soft market policies, which include tightening lending guidelines for the area considered a soft market. These soft market policies may require borrowers to have a larger down payment, require borrowers to provide additional income documentation, limit the type of loan a borrower may obtain, or any combination of procedures with the purpose of providing the lending institutions an additional level of comfort. When lending guidelines are tightened it removes borrowers, consequently buyers, from the market causing an even greater imbalance in the buyer-seller ratio. This imbalance causes property values to fall even further, and fall at a quickened pace. As home prices continue to fall, lenders tighten guidelines again and again removing more and more borrowers, fostering a degenerative cycle.

The impoverished neighborhoods are the first to feel the affects of soft market policies while the affluent may not realize the impact. For example, when compared to the affluent or the middle class, those with lesser means have minimal savings, if any at all, and disposable income is an unknown luxury. Logically, stricter guidelines that require additional down payments or greater disposable income remove more lower-income borrowers from the market. This elimination puts additional strain on the sellers in those neighborhoods, forcing prices even lower while raising the risk of foreclosure for those sellers who are in dire need. The middle class is also affected, but it is those with the least in society who areharmed the most. While the poor drown and the middle class struggles to tread water, the wealthy float along without great concern. As such, the wealthiest in society have the greatest means to withstand the additional requirements imposed on the market, but others do not.

Sellers are not the only individuals affected by soft market policies. A homeowner may have qualified to refinance his/her home last quarter, but not now. Due to shrinking home values compounded with the lending institutions soft market policies of reduce loan amounts, the borrower cannot refinance. Borrowers who are stuck in their current loans may be damaged if their current loans include a feature called an adjustable rate and their interest rate adjusts to a higher rate. If this borrower is unable to refinance they may be forced to sell, thereby continuing the cycle by adding yet another seller to a market already glutted with sellers. Removing borrowers from the market not only removes buyers from the market, but also adds sellers throwing the buyer-seller ratio further out of balance.

Soft market policies were designed to curb the financial losses to lending institutions, and to alleviate potential risk in the market. Not only do these policies hurt homeowners by evaporating home equity, they are also causing greater losses to those same financial institutions implementing these procedures. A bank tightens guidelines to mitigate risk; not to be undone other banks quickly follow the same trend. Again, the cycle is degenerative.

In conclusion, soft market policies have damaged, and continue to damage, lending institutions and individuals alike. The process of removing buyers from the marketplace again and again through additional requirements has not helped to curb falling home prices, and it has only caused additional strain on the property market. The American financial markets are the most innovative in the world, capable of producing a more viable option to protect the interest of corporations and individuals while promoting the best interest of both. Simply stated, soft market policies don't work.

Do you think soft market policies are working? Is there a better solution? Please let me know by sending me an email to dustin.burke@adonaifinancial.com.

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Florida Mortgages | Uniform Residential Loan Application (Form 1003)

Dustin R. Burke (MassMutual - Levin Financial Group) — Wed, 19 Mar 2008 14:54:35 -0500

By Dustin R. Burke, Adonai Financial

The Uniform Residential Loan Application, most commonly known as Fannie Mae's Form "1003", is the standard mortgage form used for residential mortgage applications in the US.

The lender uses this form to record relevant financial information about an applicant who applies for a residential mortgage loan. The 1003 is broken into several parts:

Section I | Type of Mortgage and Terms of Loan: is the section of the 1003 that records the proposed loan amount, interest rate, number of months, etc.

Section II | Property Information and Purpose of Loan: is the section of the 1003 that records the property address, how the title will be held, whether the transaction is purchase or a refinance, etc.

Section III | Borrower Information: is the section of the 1003 that records basic information about the borrower which includes name(s), address(es), phone number(s), social security number, birth date, current address etc.

Section IV | Employment Information: is the section of the 1003 that records the borrower's employment information. It typically includes the employers name, borrower's title, years of employment, etc.

Section V | Monthly Income and Combined Housing Expense Information: Is the section of the 1003 that records the borrowers monthly income from all income sources and compares the current monthly housing expense to the proposed (or new) monthly housing expense.

Section VI | Assets and Liabilities: is the section of the 1003 that records all assets and liabilities of the borrowers which include all bank accounts, real estate, stocks, bonds, mutual funds, IRA, etc. and all mortgages, loans, credit cards, etc.

Section VII | Details of Transaction: is the section of the 1003 that records the funds needed for closings or the funds received from excess funds of a refinance. This section includes adds the sum of all costs of the transaction minus the loan proceeds and credits to give the borrowers an estimated figure for closing.

Section VIII | Declaration: is the section of the 1003 that records the borrowers responses to specific declaration required to be answered. These declarations include items such as bankruptcy, litigation, government debt, foreclosure, etc.

Section IX | Acknowledgment: is the section of the 1003 where the borrower signs the document and acknowledges the legal disclosure required by the lender.

Section X | Information for Government Monitoring Purposes: is the section of the 1003 used monitor the borrower(s) ethnicity, race, and gender.

As you can imagine there is way too much information to place here about the Uniform Residential Mortgage Application, but its easy to get more information. If you'd like more information or have a question about the 1003 please feel free to contact our office at 863-680-2700 or send me an email to dustin.burke@adonaifinancial.com.

"Adonai Financial, your friends in the mortgage business!"

________________________________________________________________________________________

Adonai Financial Corporation

http://www.adonaifinancial.com/

---The content of this blog is my opinion---

Florida Mortgages | Understanding the role of your broker

Dustin R. Burke (MassMutual - Levin Financial Group) — Wed, 19 Mar 2008 13:39:44 -0500

Adonai Financial is a correspondent mortgage lender that sometimes transacts business as a mortgage broker. It is important for consumers to understand our role as a mortgage broker and understand how we are compensated.

An important role of a mortgage broker is to arrange for your loan to be funded by an independent investor or lender ("lender"). Sometimes Adonai Financial will close loans in our own name, while at other times we will close loans in the name of the lender funding the loan. In any event, we are not an employee or representative of the lender.

Adonai Financial and the lender are independent parties.

The lender's role is to provide financing. Therefore, you should look to Adonai Financial for information and assistance concerning your loan and any associated fees and costs.

The cost of your loan: Your loan transaction will involve a variety of different fees and charges. Some of these are charged by the lender, some are charged by our office, and some are charged by third parties such as closing agents, title companies, insurers, appraisers, home inspection services, etc. Your Good Faith Estimate is an estimate of these fees and charges. At or before closing, you will receive a final statement showing actual fees and charges for your transaction. The amount of any particular fee or charge can vary depending on many factors, such as the lender's or any out-of-pocket costs and internal administrative expenses, competitive factors, industry standards and practices, and third party charges. The costs of your transaction may also vary depending on the loan program you select, and any changes you decide upon during the loan process. Do not hesitate to ask your Adonai Financial representative if you have any questions about specific fees or charges.

Broker compensation: In today's lending environment, we will work together to structure your loan to best meet your goals and objectives. If you would rather pay less up front, or if you do not have much cash available, you can often finance your fees and costs through a higher interest rate. If you would rather pay a lower interest rate, you may pay higher upfront points and fees. You should review the options with your Adonai Financial representative and agree upon the terms of the loan (including the interest rate, points, and fees) and the amount to be paid. If you choose to finance some or all of the fees and costs, the we will receive part of the broker's compensation from the lender. This is in addition to, or in lieu of, up-front fees or points (sometimes called "discount points") paid directly by you. You pay indirectly for this lenderfinanced broker compensation through a higher interest rate.

The lender-financed broker compensation is commonly referred to as a "premium." Usually, the specific amount of any broker compensation financed by the lender will not be known until we lock in your loan with the lender, which will be after you have received your initial Good Faith Estimate. The final amount of any such compensation will be shown on your loan closing statement, known as a HUD-1 or HUD-1a. Upon request, you may review this statement one business day before closing.

You should discuss with your Adonai Financial representative how to structure the interest rate and the amount of fees and charges in the way that best suits your particular circumstances. Any questions you may have concerning broker compensation and other fees and costs during the loan process can be answered by our office.

American dreams can come true with the right home loan that's why many borrowers today look to someone who understands home financing and can guide borrowers through the process step by step, an expert who knows your area, the homes, and the available lenders; someone who takes pride in turning dreams into reality.

For years, your professional mortgage broker has been making home financing more convenient for borrowers, offering such valuable services and information as:

• Same-day pre-qualifications

• A professional viewpoint

• Competitive rate shopping

• Convenient application process

• Pre-underwriting

• Access to a variety of lender programs

• Professional loan processing

• Industry knowledge

• Good Faith Estimates of closing costs

• The ability to re-direct the loan if needed

• Relationships with lenders

• Alternative solutions when needed

As you can imagine there is way too much information to include here, but its easy to get more information. To find out more about our role as a mortgage broker or how we are compensated please contact our office at 863-680-2700 or send me an email to dustin.burke@adonaifinancial.com.

"Adonai Financial, your friends in the mortgage business!"

________________________________________________________________________________________

Adonai Financial Corporation

http://www.adonaifinancial.com/

---The content of this blog is my opinion---

Will the Fed Rate affect my mortgage?

Dustin R. Burke (MassMutual - Levin Financial Group) — Wed, 19 Mar 2008 08:01:09 -0500

By Dustin R. Burke, Adonai Financial

As recently as yesterday the Federal Reserve lowered the Fed Funds Rate another 75 basis points (or .75%) and the misconception from consumers is that mortgage rates will soon go down too. Unfortunately, it's not really that simple because the Fed does not raise or lower interest rates offered to individuals.

The Fed Funds Rate is the overnight target rate for the costs of bank to bank lending. And the rate is just that: a target rate that will wax and wane depending on demand.

Comments from HSN state: Mortgage borrowers need to be conscious of the fact that fixed mortgage interest rates often rise after the Fed has trimmed short-term interest rates. Why? If one of the tonics for a weak economy is lower short-term interest rates, and the Fed obliges, a growing economy becomes that much more likely to occur. A growing economy -- especially at a time of firm or rising inflation pressure -- will tend to press long-term interest rates upward.

So, what does that mean? It means long term rates will probably be on the rise. In addition to inflation working to keep long term mortgage rates higher, perhaps more important is that mortgages remain out of favor to investors. In order to persuade investors to buy mortgage back securities (with affect long term mortgages) higher yields, resulting in higher rates, are required.

Short term rates are likely to move lower depending on the index used to determine the rate. Lower overnight rates have served to move short term mortgage rates lower. Most notably, the LIBOR has benefited for the fresh cash injected into the markets. Treasury values also remain at multi year lows.

The Prime Rate will most likely move lower as a result of the most recent Fed action, however the banks may not pass the savings to the consumers right away. A report by CNN stated that many banks are using the money (and savings) from the Fed Funds Rate to purchase Treasuries, which have a higher yield. The banks are doing this to improve the appearance of the balance sheets after being hit hard by the mortgage crisis. So, the savings on the prime rate may not be felt right away.

As you can imagine there is way too much information to include here, but its easy to get more information. If you would like more information on mortgage rates, or how the Fed Funds Rate affect you please let me know. You can reach me at 863-680-2700 or by sending me an email to dustin.burke@adonaifinancial.com.

"Adonai Financial, your friends in the mortgage business!"

________________________________________________________________________________________

Adonai Financial Corporation

http://www.adonaifinancial.com/

---The content of this blog is my opinion---

Good Faith Estimate (GFE) | Title Charges

Dustin R. Burke (MassMutual - Levin Financial Group) — Mon, 10 Mar 2008 23:33:35 -0500

By Dustin R Burke, Adonai Financial

Title Charges is the section of the Good Faith Estimate where fees associated with the title of the property and closing of the purchase/refinance of the property. The Good Faith Estimate is a RESPA required document.

The most common title charges are listed below.

1101 - Closing or Escrow Fee: are fees charged by the settlement agent for the collecting and dispersing all the monies exchanged between the parties to a real estate purchase or refinance transaction.

1105 - Document Preparation Fee: are fees charged by the settlement agent for reviewing and preparing the documents needed to complete the transaction.

1106 - Notary Fees: are fees charged to have certain required documents notarized.

1107 - Attorney Fees: are any legal fees charged in relation to the loan or closing of the property.

1108 - Title Insurance: are fees charged for the cost of insuring the title of the property. Title insurance is required by most banks to insure that the bank's lien is in the property lien position. Having a residential real estate transaction without title insurance is rare.

As you can imagine, there more information than I can put here. If you would like more information about fees on a GFE or items discussed in this section please send me an email to dustin.burke@adonaifinancial.com.

"Adonai Financial, your friends in the mortgage business!"

________________________________________________________________________________________

Adonai Financial Corporation

http://www.adonaifinancial.com/

---The content of this blog is my opinion---

Good Faith Estimate (GFE) | Reserves Deposited with the Lender

Dustin R. Burke (MassMutual - Levin Financial Group) — Mon, 10 Mar 2008 23:27:52 -0500

By Dustin R Burke, Adonai Financial

Reserves Deposited with the Lender is the section of the Good Faith Estimate that details the prepaid fees that are collected by the lender to pay at a later date and are typically called escrow items. The GFE is a RESPA required document. The servicer (or the institution that collects the monthly mortgage payment) collects these items at closing and in your mortgage payment each month. Escrow payments are usually required when a borrower has less than 20% equity in the property they have secured the loan.

The servicer typically collects 1/12 of the anticipated tax bill, insurance invoice, etc. and then places that amount into a separate account called an escrow account. When the appropriate escrow bill is due the servicer will pay that cost from the funds available in the escrow account.

If there is not enough to pay the amount due there is an escrow deficiency. When this happens the servicer will often pay the deficiency and then increase the escrow amounts to cover their expense and start saving again for the next escrow bill.

Common escrow fees are:

1001 - Hazard Insurance Premiums: are portions of the future hazard insurance expense. Typically one full year is expected to be in force at the time of closing and is not collected by the servicer at the time of closing. What is typically collected is an additional 2 - 3 months cushion that will be used to open the escrow account.

1002 - Mortgage Insurance Premium Reserves: are prepayments of future mortgage insurance expense. The servicer typically collects only 2 - 3 months of premium at closing.

1003 - Real Estate / Property Taxes: are prorated prepayments of future real estate / property taxes. The amount collected at closing often depends on when the next tax bill is due plus an additional 2 - 3 month cushion. For example: If the tax bill is due in 8 months the servicer will collect 4 months plus the extra cushion. The remaining 8 months will be collected in the monthly mortgage payments.

As you can imagine, there more information than I can put here. If you would like more information about fees on a GFE or items discussed in this section please send me an email to dustin.burke@adonaifinancial.com.

"Adonai Financial, your friends in the mortgage business!"

________________________________________________________________________________________

Adonai Financial Corporation

http://www.adonaifinancial.com/

---The content of this blog is my opinion---

Good Faith Estimate (GFE) | Items Required by Lender to Be Paid in Advance

Dustin R. Burke (MassMutual - Levin Financial Group) — Mon, 10 Mar 2008 14:42:40 -0500

By Dustin R. Burke, Adonai Financial

Items Required by Lender to Be Paid in Advance is a section of the Good Faith Estimate that lists the items that are required to be paid in advance. The Good Faith Estimate is a RESPA required document. These items are identified with a number in the 900s. Because of the numbering this section is often called the 900 Section.

***This is a list of the most common fees listed in the 900 Section of the GFE. The fees associated with a specific loan may change. Actual fees may be more or less depending on the time of year, or even time during the month, that the loan closes.

901 - Prepaid Interest: is prepaid interest charged for the loan. This fee will vary and depend on the date of the month the loan is closed.

902 - Mortgage Insurance Premium: is prepaid mortgage insurance premium (MIP). This fee is only charged if the borrower has to pay MIP, usually charged for loans with very little equity in the property being used as collateral.

903 - Hazard Insurance Premium: is the hazard insurance, or homeowner's insurance, being prepaid. Most lenders require that the insurance policy be in force one full year from the date of closing.

These are only a sample of the most common fees and costs in the 900 Section of the GFE.

"Adonai Financial, your friends in the mortgage business!"

________________________________________________________________________________________

Adonai Financial Corporation

http://www.adonaifinancial.com/

---The content of this blog is my opinion---

Good Faith Estimate (GFE)| Items Payable In Connection With Loan

Dustin R. Burke (MassMutual - Levin Financial Group) — Sun, 09 Mar 2008 13:00:45 -0500

By Dustin R. Burke, Adonai Financial

Items Payable In Connection With Loan, often referred to as the 800 Section of the GFE, is typically the first section listed on the Good Faith Estimate (GFE), a RESPA required document, and includes most fees directly associated with obtaining the loan from the lender, broker, or bank.

Loan charges and costs listed in this section are typically identified with a number in the 800 and most charges associated in this section are figured into the Annual Percentage Rate (APR) on the Truth-in-Lending Disclosure.

***This is a list of the most common fees listed in the Items Payable In Connection with Loan section of the GFE. The fees associated with a specific loan may change from program to program. Actual fees may be more or less depending on the loan program.

801 - Loan Origination Fee: a fee charged by the lender or bank for originating or creating the loan. Many times this fee and the Loan Discount Fee are referred to as "points". Please review an article called Florida Mortgages |When Paying Points Makes Sense for more information on paying points.

802 - Loan Discount Fee: a fee charged to the lender or bank to get a lower mortgage rate. Many times this fee and the Loan Origination Fee are referred to as "points". Please review an article called Florida Mortgages |When Paying Points Makes Sense for more information on paying points.

803 - Appraisal Fee: a fee charged to pay the cost of an independent appraiser.

804 - Credit Report Fee: a fee charged to pay the cost of the credit report.

805 - Lender's Inspection Fee: a fee charged by the lender for the cost of inspecting a property. Some lenders call this an appraisal field review where the appraisal is double checked by the lender for accuracy.

808 - Mortgage Broker Fee: an upfront fee charged by a mortgage brokerage business. In rare cases this fee is identified as points and has the same effect as points. Please review an article called Florida Mortgages |When Paying Points Makes Sense for more information on paying points.

809 - Tax Related Service Fee: a fee charged by the lender to pay the costs of handling tax related matters. This fee is typically very small.

810 - Processing Fee: an administration fee charged for processing the loan (i.e. collecting application details, collecting underwritings requirements, ordering inspections, title, etc.)

810 - Underwriting Fee: an administration fee charged for underwriting the loan.

812 - Wire Transfer Fee: a fee charged for the costs of wiring money on the borrowers' behalf.

These are only a sample of the most common fees and costs in the 800 Section of the GFE. Other fees may include courier fees, MERS registration fees, electronic storage fees, etc.

"Adonai Financial, your friends in the mortgage business!"

________________________________________________________________________________________

Adonai Financial Corporation

http://www.adonaifinancial.com/

---The content of this blog is my opinion---

Florida Mortgages | Good Faith Estimate

Dustin R. Burke (MassMutual - Levin Financial Group) — Sun, 09 Mar 2008 00:13:57 -0600

By Dustin R Burke, Adonai Financial

The Real Estate Settlement Procedures Act (RESPA) requires that mortgage lenders and brokers provide a Good Faith Estimate (GFE) to customers who apply for certain RESPA regulated loans. A GFE is a itemization of expected loan costs and fees associated with the loan and must be provided to the customer within 3 business days of application.

The GFE is only an estimate and the final costs and fees may be different. The GFE itemizes the fees and costs into six basic headings with each line item cost having a specific number associated with the fee or costs.

This is a list of the six sections of the GFE and link with extensive descriptions on each section and many of the fees included in those sections.

Items Payable In Connection With Loan is typically the first section listed on the Good Faith Estimate and includes most fees directly associated with obtaining the loan from the lender, broker, or bank.

Items Required by Lender to Be Paid in Advance are items that are required to be paid in advance.

Reserves Deposited with the Lender are prepaid fees that are collected by the lender to pay at a later date and are typically called escrow items.

Title Charges are fees associated with the title of the property and closing of the loan

Government Recording & Transfer Costs are fees associated with government costs of the transaction which may include recording fees, stamps on the deed and mortgage, etc.

Additional Settlement Charges are charges that do not appear in the other fives sections of the Good Faith Estimate.

Articles have been (or soon will be) written regarding each section of the GFE with their respective costs. As you can imagine there is a lot of information available through the links above. If you need assistance with a specific fee on the GFE please send me an email at dustin.burke@adonaifinancial.com.

"Adonai Financial, your friends in the mortgage business!"

________________________________________________________________________________________

Adonai Financial Corporation

http://www.adonaifinancial.com/

---The content of this blog is my opinion---

Florida Mortgages | Directory of Mortgage Application Forms & Disclosures

Dustin R. Burke (MassMutual - Levin Financial Group) — Sun, 09 Mar 2008 00:10:53 -0600

By Dustin R Burke, Adonai Financial

When an individual applies for a mortgage loan the bank, lender, or mortgage broker is required to provide the borrower with certain disclosures. This is a directory of many of those disclosures. Some forms have a link where you may view the form with a detailed description.

In alphabetical order:

Borrower Authorization

Borrower Certification & Authorization

Credit Score Information Disclosure

Equal Credit Opportunity Act (ECOA)

Disclosure Notices

Flood Insurance Disclosure

Florida Lender Disclosure

Florida Mortgage Brokerage Business Contract

Good Faith Estimate (GFE)

Good Faith Estimate Provider Relationship

Mortgage Loan Origination Agreement

Patriot Act

Residential Loan Application: Form 1003

Right to Receive Appraisal

Tax Return Request - Copy of Return: Form 4506

Tax Return Request - Copy of Transcripts: Form 4506-T

Truth-in-Lending

Servicing Disclosure Statement

This list is a basic summary of the most common mortgage forms used in the Florida market. External links are consistently being added to update the descriptions on these forms. If a link is not currently available for a form you are interested in please email me for to get more information at dustin.burke@adonaifinancial.com.

"Adonai Financial, your friends in the mortgage business!"

________________________________________________________________________________________

Adonai Financial Corporation

http://www.adonaifinancial.com/

---The content of this blog is my opinion---

Florida Mortgages | Real Estate Settlement Procedures Act (RESPA)

Dustin R. Burke (MassMutual - Levin Financial Group) — Fri, 07 Mar 2008 11:15:39 -0600

By Dustin R Burke, Adonai Financial

The Real Estate Settlement Procedures Act, (also known as "RESPA"), was an Act passed by Congress in 1974.

RESPA was created because various companies associated with the buying and selling of real estate, such as lenders, real estate firms, appraisers, and title insurance companies, etc., were often engaging in providing undisclosed kickbacks to each other.

It is believed that these kickbacks inflated the costs of real estate transactions and obscured price competition by promoting bait and switch tactics.

For example, a lender advertising a home loan might have advertised the loan with a 5% interest rate, but then when one applies for the loan one is told that one must use the lender's affiliated title insurance company and pay $5,000 for the service (whereas the normal rate is $1,000). The title company would then have paid $4,000 to the lender. This was made illegal.

Section 8 of the Act forbids kickbacks between lenders and third-party settlement service agents in the real estate settlement process. The Act, among other things, requires lenders to provide a good faith estimate for all the approximate costs of a particular loan and finally a HUD-1 (for purchase real estate loans) or a HUD-1A (for refinances of real estate loans) at the closing of the real estate loan. The final HUD-1 or HUD-1A allows the borrower to know specifically the costs of the loan and to whom the fees are being allotted.

The acts full text can be viewed here:

http://www.law.cornell.edu/uscode/html/uscode12/usc_sup_01_12_10_27.html.

The Department of Housing and Urban Development has a RESPA FAQ site that can be viewed here:

http://www.hud.gov/offices/hsg/sfh/res/resconsu.cfm

If you have any general questions on what acts RESPA requires of mortgage business please feel free to send me an email to dustin.burke@adonaifinancial.com.

"Adonai Financial, your friends in the mortgage business!"

________________________________________________________________________________________

Adonai Financial Corporation

http://www.adonaifinancial.com/

---The content of this blog is my opinion---

Florida Mortgages | Foreign Nationals Underwriting Guidelines / LTV Update

Dustin R. Burke (MassMutual - Levin Financial Group) — Thu, 06 Mar 2008 17:03:08 -0600

By Dustin R. Burke, Adonai Financial

We are very excited and please to announce we are now able to offer STATED INCOME loans to Foreign National clients with a down payment of 30% in central Florida. This includes loans secured by condotels. This is an increase in loan to value of 10% over our previous product offering. Stated income loans to foreign nationals were previously restricted to 60% LTV in central Florida on most loan amounts.

Full documentation loans are still available at 75%. Condotel loans are not available on this program.

If you have any questions about the new loan guidelines please contact our office at 863-680-2700 or send me an email to dustin.burke@adonaifinancial.com.

***Disclaimer: this is not an offer or commitment to lend by Adonai Financial Corporation - the borrower must meet all underwriting conditions required prior to the issuance of a loan commitment.

"Adonai Financial, your friends in the mortgage business!"

________________________________________________________________________________________

Adonai Financial Corporation

http://www.adonaifinancial.com/

---The content of this blog is my opinion---

Florida Mortgages | When Paying Points Makes Sense

Dustin R. Burke (MassMutual - Levin Financial Group) — Wed, 05 Mar 2008 01:09:59 -0600

By Dustin R Burke, Adonai Financial

I recently read a post by Christopher Hill titled “Do I pay a point or not?” I work with clients from all over the world and the American’s have been taught NOT to pay points, while the remainder of the clients I work with WANT to pay points. I posted a blog on “ARM or not to ARM?” where I also stated that Americans wanted a 30 year fixed and not an ARM while clients from abroad wanted the opposite.

Points, just like ARM loans, must be used correctly. Here are SIX real life examples - three on fixed rate mortgages / three on ARM mortgages.

***When a borrower chooses NOT to pay points then we will apply what he/she would have paid for the point(s) and place it toward the loan amount.

Fixed Rate Mortgage Examples: this real life example is based on a 30 year fixed.

Option 1 – In this option the borrower is paying 2 pts and getting the lowest rate.

		Interest paid after:	Total Cost w/ points	Costs vs. Option 2	Costs vs. Option 3
Loan Amount:	$300,000	12 mo: $17,899	$23,899	+2094	+4150
Rate:	6%	24 mo: $35,572	$41,572	+1154	+2292
Points:	2 ($6000)	36 mo: $53,003	$59,003	+211	+425
Payment	$1,798	48 mo: $70,178	$76,178	-735	-1448
		60 mo: $87,082	$93,082	-1683	-3325

Option 2 – In this option the borrower is paying 1 pt and taking a slightly higher rate.

		Interest paid after:	Total Cost w/ points	Costs vs. Option 1	Costs vs. Option 3
Loan Amount:	$297,000	12 mo: $18,835	$21,805	-2094	+2056
Rate:	6.375%	24 mo: $37,448	$40,418	-1154	+1138
Points:	1 ($2970)	36 mo: $55,822	$58,792	-211	+214
Payment	$1,852	48 mo: $73,943	$76,913	+735	-713
		60 mo: $91,795	$94,765	+1683	-1614

Option 3 – In this option the borrower is not paying points and will take the highest rate of the three Fixed Rate options.

		Interest paid after:	Total Cost w/ points	Costs vs. Option 1	Costs vs. Option 2
Loan Amount:	$294,000	12 mo: $19,749	$19,749	-4150	-2056
Rate:	6.750%	24 mo: $39,280	$39,280	-1138	-1138
Points:	0	36 mo: $58,578	$58,578	-425	-214
Payment	$1,906	48 mo: $77,626	$77,626	+1448	+713
		60 mo: $96,407	$96,407	+3325	+1614

Fixed Rate Assessment: It appears that Option 1 is best if the borrower is going to keeping the loan for 3+ years. Option 3 appears best if the borrower is going to keep the loan for less than 3 years. And Option 2 will save the borrower on upfront expenses vs. Option 1 and give the borrower a lower monthly payment than Option 3.

From my vantage point, for an investment longer than 3 years Option 1 appears to be the best of the Fixed Rate Mortgage Options. For a short term investment Options 3 appears to be the best choice.

Adjustable Rate Mortgage Examples: this real life example is based on a 5/1 ARM.

Option 4 – In this option the borrower is paying 2 pts and getting the lowest rate.

		Interest paid after:	Total Cost w/ points	Costs vs. Option 5	Costs vs. Option 6
Loan Amount:	$300,000	12 mo: $13,775	$18,775	+313	-1601
Rate:	4.625%	24 mo: $27,327	$32,327	+1403	+1798
Points:	2 ($6000)	36 mo: $40,654	$46,654	+2106	+4185
Payment	$1,542	48 mo: $53,727	$59,727	+3813	+7576
		60 mo: $66,533	$72,533	+5523	+10968

Option 5 – In this option the borrower is paying 1 pt and taking a slightly higher rate.

		Interest paid after:	Total Cost w/ points	Costs vs. Option 4	Costs vs. Option 6
Loan Amount:	$297,000	12 mo: $15,492	$18,462	-313	-1288
Rate:	5.25%	24 mo: $30,760	$33,730	-1403	+395
Points:	1 ($2970)	36 mo: $45,790	$48,760	-2106	+2079
Payment	$1,640	48 mo: $60,570	$63,540	-3813	+3763
		60 mo: $75,086	$78,056	-5523	+5445

Option 6 – In this option the borrower is not paying points and will take the highest rate of the three ARM options.

		Interest paid after:	Total Cost w/ points	Costs vs. Option 4	Costs vs. Option 5
Loan Amount:	$294,000	12 mo: $17,174	$17,174	+1601	+1288
Rate:	5.875	24 mo: $34,125	$34,125	-1798	-395
Points:	0	36 mo: $50,839	$50,839	-4185	-2079
Payment	$1,739	48 mo: $67,303	$67,303	-7576	-3763
		60 mo: $83,501	$83,501	-10968	-5445

ARM Assessment: It appears that Option 4 is best if the borrower is going to keeping the loan for 1+ year(s). Option 6 appears best if you are going to keep the loan for less than 1 year. And Option 4 has not real substantive advantage over Option 4 or 6.

From my vantage point Option 4 appears to be the best of the ARM Options. For a very short term investment Options 6 appears to be the best choice.

Best overall: Given that most mortgage loans are paid off every 3 – 5 years either by refinances or the sale of the property Option 1 and Option 4 seems to be the best. Both options also pay the most points.

And, after further evaluation Option 4 offers savings over Option 1 of $12,349 after 36 months, $16,451 after 48 months, and $20,549 after 60 months. So, if a borrower can risk the rate adjustment I would typically recommend Option 6 – an ARM with points.

What are you thoughts on points? Do you agree or disagree? Let me know by sending me an email to dustin.burke@adonaifinancial.com.

"Adonai Financial, your friends in the mortgage business!"

________________________________________________________________________________________

Adonai Financial Corporation

http://www.adonaifinancial.com/

---The content of this blog is my opinion---

Florida Mortgages | Soft Market Policies

Dustin R. Burke (MassMutual - Levin Financial Group) — Tue, 04 Mar 2008 20:53:10 -0600

By Dustin R Burke, Adonai Financial

Since the real estate boom went bust a new term has reared its head into the real estate professional’s vernacular. It’s the term soft market. Soft markets are often the result of having too many sellers and not enough buyers in real estate market which often drives home prices lower. When prices drop from one calendar quarter over another the market is defined by banks as a depreciating market or a soft market.

When a specific MSA or even ZIP code is labeled with the stigma of being soft banks and mortgage typically implement lending policies that are more restrictive such as requiring a higher down payment on a house, etc.

From my observation soft market policies typically impact the less affluent first. A potential buyer in an economically distressed area typically has less liquidity proportional to their income than a potential buyer purchasing a home in a more affluent area. Therefore the buyers with lesser means are often pushed out of the market whereas a buyer with greater means isn’t so drastically affected by the soft market policies. The end result is the markets with less means are often hurt more.

We already know that soft markets are a direct result of too many sellers and not enough buyers. When banks and mortgage lenders implement soft market policies that restrict the number of potential buyers it further accelerates the problem with declining values.

These soft market policies act as a double edged sword. They are put in place to curb the banks and mortgage lenders exposures to potential risks but they also hasten the problem of declining values. So, what to do? Well, we’ve all heard of these huge write downs that major banks have taken as losses on mortgages. Since the banks have already written down the “bad debt” and I think they should take action that would work to stabilize the market rather than destabilize it.

Mortgage companies and banks made billions during the boom and have suffered severe losses because of the bust. I’m not sure exactly what to do about the declining values in certain areas, but don’t think that restricting liquidity further is the answer. If anything, easier money would start to curb the problem.

What do you think should be done to help curb the problem in declining markets? Do you think soft market policies are the answer? Feel free to let me know by sending me an email to dustin.burke@adonaifinancial.com.

"Adonai Financial, your friends in the mortgage business!"

________________________________________________________________________________________

Adonai Financial Corporation

http://www.adonaifinancial.com/

---The content of this blog is my opinion---

Florida Mortgages | Foreign Nationals

Dustin R. Burke (MassMutual - Levin Financial Group) — Tue, 04 Mar 2008 20:08:23 -0600

By Dustin R Burke, Adonai Financial

Foreign Nationals are individuals from other countries who purchase or refinance property in the United States. The property can be a commercial property or a residential property. Domestically the foreign national market has grown due to the weakened US dollar. The cheaper dollar makes US property very attractive to individuals from abroad.

Can a foreign national still get a dollar mortgage for a property the desire to purchase or refinance in the US? Yes, and it is easier than one may think.

Residential mortgages for foreign nationals are available on terms similar to the terms available to those with legal status in the US. Both fixed rate mortgages and adjustable rate (variable rate) mortgages are offered to citizens abroad. Interest rates are competitive starting as low as the high 5’s on some programs.

The documentation required on residential mortgages will vary from bank to bank and bank program to bank program. The larger the down payment the less documentation that may be required. The minimum down payment required is typically 20 – 25% and requires proof of employment, income, assets, etc.

If an individual prefers they may choose a program that does not require documentation of employment, income, assets or even a credit report. These loans are called state, limited, reduced, or no documentation loans. These loans facilities typically require a down payment of 30% or more (rarely more than 40%). Down payment and documentation requirements can even depend on the type of property (house, condo, etc.) and even the specific neighborhood. An area that is considered a “soft market” may require a higher down payment.

As you can imagine there is a lot more information available than can be placed here. If you would like to get more information or have any specific questions on loans for foreign nationals, or any residential mortgage loan, please feel free to contact me -- I’d be glad to answer any questions you have.

Contact our office at 863-680-2700 or send me an email to dustin.burke@adonaifinancial.com.

"Adonai Financial, your friends in the mortgage business!"

________________________________________________________________________________________

Adonai Financial Corporation

http://www.adonaifinancial.com/

---The content of this blog is my opinion---

Lakeland, FL Restaurants - The Antiquarian

Dustin R. Burke (MassMutual - Levin Financial Group) — Mon, 03 Mar 2008 08:44:15 -0600

By Dustin R. Burke, Adonai Financial

As a local and small business owner I tend to try and support the same hoping that other small business owners will return the favor. Its my way of putting that “Do unto others” mentality into practice. I am also one of those people who like to find those special hideaways that few people know about.

The Antiquarian Restaurant at 211 E Bay Street in downtown Lakeland is just one of those places. The menu is continental and the atmosphere is eclectic. The food is always unmatched in preparation.

The portions are not over filling and leave you satisfied – not stuffed. You can expect to spend $10/person at lunch at $25+/person for diner. Its a friends, white table cloth environment. There is live jazz music on Friday nights and the ambience offers just what you need to enjoy a 5-star dinner.

It is well worth the price and you’re investing back into the downtown Lakeland community. They also have an extensive wine selection that raises the bar and a friendly staff and ownership.

Have you dined at the Antiquarian? Do you know of any hideaways in Lakeland? Let me know by sending me an email to dustin.burke@adonaifinancial.com.

"Adonai Financial, your friends in the mortgage business!"

________________________________________________________________________________________

Adonai Financial Corporation

http://www.adonaifinancial.com/

---The content of this blog is my opinion---

NLP: Technology of Achievement

Dustin R. Burke (MassMutual - Levin Financial Group) — Mon, 03 Mar 2008 08:02:20 -0600

By Dustin R. Burke, Adonai Financial

I recently started a personal study on the science of NLP: Neuro-Linguistic Programming. I’ve been a real amateur with it for several years, so I thought it was time to take things to a higher level.

The book I am reading defines NLP as:

… the study of human excellence.

… the ability to be your best more often.

…the powerful and practical approach to personal change.

…the new technology of achievement.

NLP has several presuppositions but if they could all be summarized in one phrase it would be people work perfectly. I recently posted a faith based or religious topic called Faith Speak. To oversimplify we summarize the words we speak should reflect the outcome we expect.

While I believe this is true, NLP raises the bar in this type of thinking. When the theory states the people work perfectly it means our specific thoughts, feelings, and actions will consistently produce the same results. These results consistently give us a positive (happy) result or a negative (un-happy) result. If we want better results we need to change our actions, feelings and thoughts. The NLP Suppositions are:

*** The map is not the territory.

*** Experience has a structure.

*** If one person can do something, anyone can learn to do it.

*** The mind and the body are part of the same system.

*** People already have the resources they need.

*** You cannot NOT communicate.

*** The meaning of your communication is the response you get.

*** Underlying every behavior is a positive intention.

*** People are always making the best choice(s) available to them.

*** If what you are doing isn’t working, do something else, anything else.

So, there begins my new quest for achievement in excellence. I’ve already gone through a few techniques and have seen amazing results in myself. Have you ever studied NLP? What are your results? I’d like get more feedback so send an email to dustin.burke@adonaifinancial.com.

"Adonai Financial, your friends in the mortgage business!"

________________________________________________________________________________________

Adonai Financial Corporation

http://www.adonaifinancial.com/

---The content of this blog is my opinion---

My Wachovia AE

Dustin R. Burke (MassMutual - Levin Financial Group) — Thu, 28 Feb 2008 16:29:37 -0600

By Dustin R Burke, Adonai Financial

Its hard to find an AE in today’s market who’s worth their salt. Well I’ve got one at Wachovia. I’ve posted a couple blogs on Wachovia / World Mortgage (Part 1 / Part 2). What I failed to mention was the excellence of their Account Executives. Mine is Steve Corn and he has always gone above and beyond what most other AEs do. He will take the time to work every angle possible to get your deal approved. Sometimes the underwriting and appraisal results are less than desirous but the extra effort is noticed and appreciated.

Although I’ve detailed what I believe are severe problems with how the bank determines value and applies risk to certain neighborhoods, Steve makes the unbearable palatable.

So, if you need a wholesale AE with Wachovia I highly recommend Steve.

Do you have an AE who goes above and beyond the normal call? I’d like to hear about it. Please send me an email to dustin.burke@adonaifinancial.com.

"Adonai Financial, your friends in the mortgage business!"

________________________________________________________________________________________

Adonai Financial Corporation

http://www.adonaifinancial.com/

---The content of this blog is my opinion---

Lakeland, Florida

Dustin R. Burke (MassMutual - Levin Financial Group) — Wed, 27 Feb 2008 21:57:06 -0600

By Dustin R Burke, Adonai Financial

This is the first blog on Lakeland and is being put out there as an "icebreaker".

Lakeland is a city in Polk County, Florida with an estimated population of 89,108 (according to the 2006 Census Bureau). Lakeland is the spring home to the Detroit, Tigers, headquarters for Publix Supermarkets, and the first Red Lobster Restaurant.

Lakeland has one local newspaper, the Ledger (owed by the New York Times), and five local radio stations.

The median family income is $40,468 with $19,760 per capita. Lakeland was recently rated in CNN Moneyline for one of the best real estate markets in the US. The expected population at 2020 is 115,000.

Please share information you have on local business, real estate, events or anything else relative to the City of Lakeland. Or, send me an email to dustin.burke@adonaifinancial.com.

"Adonai Financial, your friends in the mortgage business!"

________________________________________________________________________________________

Adonai Financial Corporation

http://www.adonaifinancial.com/

---The content of this blog is my opinion---

Florida Mortgages | New FNMA Loan Limits - Who Will See An Increase?

Dustin R. Burke (MassMutual - Levin Financial Group) — Wed, 27 Feb 2008 16:45:19 -0600

By Dustin R Burke, Adonai Financial

The buzz is all about the new FNMA loan limits. Yes, the new limits will be $729,750, but is not a carte blanche solution for all markets – not everyone will benefit. To find out what the changes mean to you check out FNMA New Loan Limits – What does it mean.

SunTrust Bank put out a statement today detailing who will benefit from the recent announcement.

Who will see an increase in limits?

The new FNMA loan limits are restricted to 125% of the area’s median home prices. SunTrust estimates that only 20 of the larger MSA counties will see an increase in loan limits and only six will see the limits reach the maximum of $729,750 -- of those six counties five are in California and one in Hawaii.

If is also estimated that 15% of all non-conforming loan will be affected.

What do you think about the new conforming loan guidelines? Do you think it will help? Send me an email to dustin.burke@adonaifinancial.com.

"Adonai Financial, your friends in the mortgage business!"

________________________________________________________________________________________

Adonai Financial Corporation

http://www.adonaifinancial.com/

---The content of this blog is my opinion---

Florida Mortgages | New FNMA Loan Limits - What does it mean?

Dustin R. Burke (MassMutual - Levin Financial Group) — Wed, 27 Feb 2008 16:23:20 -0600

By Dustin R Burke, Adonai Financial

The Associated Press announced that federal regulators will allow Fannie Mae and Freddie Mac to raise loan limits on conforming loans to $729,750. Is this something we should be excited about? It sounds great, but there are several things we don’t know yet.

SunTrust Bank put out a statement today about what we know and who will see the increase:

What we know today (expect to see changes)

• The bill sets the FHA and conforming (FNMA/FHLMC) loan limits to the lesser of $729,750 or 125% of an area’s median home sales price. If 125% of an area’s median home sales price is below the current conforming loan limit of $417,000 the $417,000 still applies. You may not feel the benefits, but you will not be any worse off than you are today.

• The FHA and conforming limit changes are meant to be temporary and are set to expire on Dec 31, 2008 (unless extended – which is doubtful).

• The new limits will apply to 30 year and 15 year fixed rate, fully amortizing, and owner occupied.

• ARMs are being considered, but if allowed, the increase will likely apply to one ARM type (forexample, 5/1s).

• FNMA will have other credit overlays including LTV limitations (probably 90% or less).

• The limits will be effective as soon as the bill is signed, FNMA determines pricing.

What do you think about the new conforming loan guidelines? Do you think it will help? Send me an email to dustin.burke@adonaifinancial.com.

"Adonai Financial, your friends in the mortgage business!"

________________________________________________________________________________________

Adonai Financial Corporation

http://www.adonaifinancial.com/

---The content of this blog is my opinion---

Central Florida Foreign National Mortgages

Dustin R. Burke (MassMutual - Levin Financial Group) — Mon, 18 Feb 2008 13:44:59 -0600

By Dustin R Burke, Adonai Financial

***This text has been updated. An new article describing Foreign National mortgages is available at:

Florida Mortgages | Foreign Nationals

***Updated underwriting guidelines are also available at:

Florida Mortgages | Foreign Nationals Underwriting Guidelines / LTV Update

Original article below:

There have been a lot of loan guidelines changes for foreign nationals in recent months. The most common question I keep getting is, “Are banks still lending to foreign nationals?” The answer is, “Yes, banks are still lending to foreign nationals in central Florida.”

The requirements are somewhat “stiffer” than they were 1 year or even 6 months ago, but still very reasonable. In central Florida, a foreign national can get a loan with as little as 25% down. Most banks require the borrower to document their income with this amount down.

If the borrower cannot document their income they may need to put down 30, 35, or even 40%, depending on the bank and the specific neighborhood (neighborhoods determined to be higher risk by the bank).

Rates are also very competitive starting in the mid 6’s on a 3 or 5 year fixed ARM and in the low 7’s on a 30 year fixed mortgage.

These are the basics for a foreign national buying a single family home to use as a vacation home. If you’re looking for more exotic type properties (i.e. condo-tels) then expect the guidelines to tighten a bit more.

What are your experiences working with foreign nationals? Send me an email at dustin.burke@adonaifinancial.com

Florida Mortgages | ARM or not to ARM?

Dustin R. Burke (MassMutual - Levin Financial Group) — Fri, 15 Feb 2008 16:15:53 -0600

By Dustin R Burke, Adonai Financial

ARM or not to ARM? I work with clients from all over the world, from New York to London to Tampa to Dubai. And, there are basically two contrasting views on ARM loans: the “middle class” American view and then everybody else.

It’s my observation that overwhelming middle class American clients prefer, if not demand, a fixed rate mortgage for the entire term of their loan. Contrast this with international clients, who prefer, if not demand, a variable rate mortgage (as they call it), or adjustable rate mortgage (ARM, as we call it).

Why is there a difference? Douglas Duncan, chief economist at the Mortgage Bankers Association of America stated that the average mortgage life is three to five years, but 83% of mortgages are taken out for 15 years or more. Adjustable-rate mortgages have lower start rates than fixed rate loans, but most American borrowers remain skeptical. Why? I believe it is overwhelmingly because the loan facility options have not been properly explained to them.

When is an ARM right for me? If this is your first home with expectations of building additions or future upgrades an ARM may make more economic sense. If you’re an investor who only plans to hold a property for a couple years, then consider an ARM.

You also need to be willing to stomach the risk. The risk protection isn’t free on fixed rate loans, but you might be better off without, unless you absolutely cannot handle an increase in future payments.

An ARM loan worked for me. I’m in mortgage business and I don’t have a fixed rate loan. Why? Because, I know the statistics that I will either sell my home or refinance within 5 years. Currently, I am two years into a five year fixed and I am very glad I did. I saved over $100/mo in payment verses a fixed rate loan and as expected my wife and I will be ready to upgrade in a year or so.

The ARM worked for me, and used properly it may be a better option for you.

What do you think about adjustable rate mortgages? Send me an email at dustin.burke@adonaifinancial.com.

"Adonai Financial, your friends in the mortgage business!"

Florida Mortgages | Foreign Nationals

Dustin R. Burke (MassMutual - Levin Financial Group) — Fri, 15 Feb 2008 15:18:00 -0600

By Dustin R Burke, Adonai Financial

Foreign National loans are loans made to international clients, or clients who do not keep their primary residence in the United States. In recent years foreign national loans have become increasingly popular because of the waning US dollar. The weaker dollar makes Florida real estate, and other US real estate, very appealing to purchasers from other countries.

It is relatively simple for foreign nationals to obtain competitive dollar financing in the US for a property secured in the US. The borrower cannot have diplomatic immunity and it’s preferable if they participate in the Visa Waiver Program (most countries do).

The current mortgage market requires that the borrower put at least 25 percent deposit, document their income via an accountants or employer letter, and verify the funds for deposit belong to them.

If a borrower cannot provide income documentation and need to do what is called a “stated income” loan, then the borrower can place an extra 5 percent down towards the deposit.

The bank requires an appraisal or valuation report on the property and some banks require an international credit report. It takes anywhere from two to four weeks to complete the loan paperwork and is very simple process.

What are your thoughts on loans to foreign nationals? Send me an email at dustin.burke@adonaifinancial.com.

"Adonai Financial, your friends in the mortgage business!"