Well have you thought about this? If not, why not?
If you have clearly defined written goals than the process probably lead you down the path towards the following question.
What am I trying to accomplish?
Here's Success, by definition, Webster's style;
success 1. favorable result 2. the gaining of wealth, fame
Personally, I'm okay with the first one, but have some issues with the second.
Let's try some questions;
If you reach your financial goals, but have problems with your spouse or children, will you consider yourself successful?
Please give that some serious thought!
If you reach your financial goals, but ignore your health, and feel poorly, are you successful?
If you reach your financial goals, but haven't had any time off to enjoy it, are you successful?
These types of questions are endless and I could go on forever, but won't.
Is that applause I hear?
When you're working on your goals for 2010, STOP and THINK, what would I consider a successful year?
Is it JUST about business?
I think, not.
So take some quiet time, if you're in Southwest Florida, try walking on the beach. If you're in upstate NH, try sitting in front of a quiet fire in the fireplace.
These days I just keep hearing Bowie over and over and over.
Ch-Ch-Ch-Changes, Turn and face the strain, Ch-Ch-Ch-Changes
In about a little over a month FNMA is scheduled to release Desktop Underwriter 8.0.
I'm just soooooo excited!
Why you may ask? What's the BIG deal?
Well here you are.
The maximum allowable total expense ratio in DU will be revised to 45%, with flexibilities to 50% for certain loan cases with strong compensating factors. Deals exceeding the ratio will be given an ineligible.
Just a couple of thoughts which immedikately come to mind;
I used to feel I had a real good handle on what an Underwriter would consider as a compensating factor, but i don't necessarily feel so confident these days. Yesterdays compensating factor may not be accepted today.
They are now effected by mood swings, the location of the planets, things like that!
Fewer buyers will qualify under the new guidelines!
Get em while they're hot! Today's buyers may be looking at less house next month. That may make them very unhappy.
Watch out for this one!
Buyers currently preapproved may no longer be able to exercise their current preapproval.
If you didn't like preapproval letters before, you may like them less next month.
Check the date on the preapproval letter!
Now let's look at the BIG picture!
From a lenders standpoint the changes are prudent, responsible, and should have been implemented sooner.
Just my opinion? I don't think so.
Well let's get ready for this now, as it'll be upon us before we realize it. Those buyers who just must have the home that they will no longer qualify for need to enter into contract now and close in a timely fashion.
Look out! those sneaky lenders are apt to start making these type of changes now, in anticipation of Fannie's doing so.
Maybe Bowie shouldn't get all the glory, how about Bobbie Dylan,
will 1. wish; desire 2. strong purpose 3. power of choice 4. attitude
Let me make a very strong suggestion to start off with;
Forgive yourself for everything that you have done in the past!
Forgive yourself for what didn't work, for that which you didn't try, for the mistakes that you may have made, everything.
Forgive yourself; clean slate, go forward!
So where do you start?
According to Chris Gardner, the author of "The Pursuit of Happyness,"
"Start Where You Are"
That's his new book, and quite frankly where else can you start from? If you have any familarity with his story you know that he got knocked on his butt, got up, and did quite well for himself. For most of us we're not starting off quite that bad, but some may be. Just remember, anything's possible if you have the will to succeeed.
Do you have clearly defined written goals?
Despite the fact that over and over again studies tell us that the most successful business people have "clearly defined written goals,"most of us ignore this. Why? Why? Why? I don't know. Is it we don't want to be held accountable? Writing things down seems to do this.
The Power of Choice!
You will choose to succeed, or not. Sounds pretty simple, doesn't it. Make each and every choice wisely.
Finally, determine what success means to YOU, not what it means to someone else. How can you achieve it, if you haven't defined it.
Okay we know that just having a pulse doesn't work any more. And we know that the programs are no longer tailor made to meet evey applicants individual needs. BUT;
What are the guidelines now, anyway?
Conventional;
We still have Fannie Mae and Freddie Mac guidelines as a basis, and we still use automated approvals as an approval basis, but they don't stand alone as approval criteria anymore. Now we also have guidelines which are established by and enforced by the individual lenders. Company policies, so to speak. A Loan Officer or Underwriter may state that, that's a Fannie Mae guideline, but that may often not be the case.
Also, in many cases we have guidelines/requirements attached to our warehouse lines. A warehouse line is used to fund a loan, while it is waiting to be sold. Because some companies failed, and still had millions on their warehouse lines, the warehouse lenders put on additional restrictions, so they would be could be sold, in the event that the warehouse lender was stuck with the loan.
The adding of guidelines is often referred to as layering and varies from one entity to another. In my opinion, this practice of, and by itself supports the need for more sources, such as mortgage brokers, to sift through the layering and identify a lending source that fits, or feels comfortable with a buyers needs.
Government;
FHA, VA, USDA/RD are all govern(mental) lending systems and as such you would think that they would be more consistent. You would be thinking wrong.
They do all offer a low and/or no downpayment option, which is greatly needed in todays market.
They do have different ways of looking at the property, which in my market specifically, has played an important role. We've had a lot of foreclosures, so on an FHA loan look out for;
Flipping
There will be no FHA loan in most cases unless the property has been held for 90 days. Then we need two appraisals up to 120 days.
For whatever reason VA and USDA/RD do not have that guideline. Why not? You figure it out, because I don't know.
What about their other guidelines? Let me sum it up as nicely and as simply as possible.
The govern(mental) guidelines are whatever the underwriter says they are!
That's it in a nutshell!
Is it consistent? No. Fair? No. Insane? Maybe (yes came close as an answer).
Don't these buyers know the economy is in the toilet.
Don't they have accountants?
Where's the $$$$$ coming from?
Stopped in to see the "bus driver" today. Lots of sales, mostly cash, probably as high as 95%. The team mostly solicites $$$$$ buyers. Well as a Loan Officer I think that, well mom told me not to talk like that or she'd wash my mouth out with soap.
I can't help mentioning having seen a lot of writings about teams, that the Lagace-Whitt Team may be a good prototype. Small, professional, firing on all cylinders. You just don't need 10-15 people to have a successful team.
Susan Milner, at Florida Future Realty, agrees Cash is King!
I've been involved in this marketplace for over 15 years and cash has always been a part of our market, but never to this extent, that I can remember. The market needed a boost and this certainly is accomplishing that.
Also this should help our appraisal situation by providing real comperable sales that are closer to where the market truly is?
But, what about me?
Well just send me some cheese to go along with the w(h)ining.
There's a new sheriff in town, actually it's the same old sheriff attempting to flex his/her muscles, if he/she has any.
The US Department of Housing and Urban Development has been working on a new GFE (Good Faith Estimate) for over a year, maybe closer to two and beginning Jan. 1, 2010 we're going to be using this new disclosure, or the new version of the old disclosure.
You can tell it's outdated as it addresses neg am programs, which the market has essentially banned.
You know closing the gate after the horse got out!
The new disclosure is 3 pages long as opposed to the previous one page document.
You know, more is better!
The beauty is that the Total Estimate of Settlement Charges is on the bottom of page one.
Personally I do expect many/most of the buyers to fall asleep somewhere on page 2.
The area currently drawing the most interest is in regards to the disclosure of yeild spread premium.
If you are a bank or an institution with a banking license, that being in most cases a mortgage company funding their own loans, but selling them at some point in time, you will not need to disclose ysp (yield spread premium) on the HUD.
This to me seems to be sneaky!
Where's the openness, the transparency? Apparently that's not necessary for the Banks.
You know how upfront they've been, now don't you!
If you are a Broker, you will pile all origination costs of your own, as well as the actual lender, into the origination fee. That's your point, processing, underwriting, etc. plus the lenders processing, underwriting, etc.
That could be a fairly big number! BUT
Yield Spread Premium to the rescue!
Now it will be shown as a credit to the buyer as opposed as a payment to the broker. The effect on the bottom line, disclosed on page 1;
NONE!
Page 3, which may turn out in practical application to be fairly useless, will disclose particular fees which may not change, those that can change up to 10%, and others which can change at random.
Does anyone really believe that a "good broker" will not be able to deal with this?
Ultimately little has changed. The bottom line should remain the same, so
I just got a new "rate sheet supplement" for adjustments and fees. I wish you could see these things. You'd really be surprised that a Loan Officer can accurately quote rates at all. Take a look at this, it's for FHA/VA Loans;
Loan Size
$90,000-$417,000 no adjustment
$60,000-$89,999 subtract .125 from price
$40,000-$59,999 subtract .250 from price
less than $40,000 not accepted
The obvious conclusion; smaller loans cost more money to the consumer.
Credit Scores
Fico 720+ no adjustment
Fico 660-719 subtract .125 from the price
Fico 620-659 subtract .375 from the price
Fico <620 and no score not accepted
The obvious conclusion; lower scores cost more money to the consumer.
Look out for the olde DOUBLE WAMMY!
Small Loans with Low Scores are MUCH more costly to the consumer!
So, John Q. Homebuyer calls and nicely asks, "can you tell me what your rates are today on an FHA purchase." I ask if he has any idea what the mortgage amount will be and does he happen to know what his score is. He answers no.
I can can give him the basic rate today with a verbal disclosure that it is subject to change, depending on the market conditions, his score, and the size of your loan.
When I respond I'm not being nasty, I'm being truthful.
For those of you who remember Bowie the answer would be anywhere, probably on a "Space Odyssey!"
If you're invovled in the Real Estate industry today that's what you're doing, going through an "odyssey."
odyssey; long journey with adventures
Bowie's take on changes;
Ch-ch-ch changes,
Are you ready for the next line?
Turn and face the strain.
For the last year, maybe two, they've been firing one major change after another at us!
HVCC, MDIA, RESPA, new TIL's, new GFE, new HUD's, that's just for lenders.
Foreclosures, Short Sales, Strategic Defauts, for Realtors.
I know there's more!
Meet the new mortgage underwriting guidelines. Well I'll tell you that I'd like to, if anyone could clearly tell me what they are. Every lender now has their own version. So I'd explain them to you, if I could.
The way we do business today elicits every type of emotion possible; anger, laughter, smiles, frowns, tears and
"You've got to be kidding me!
Connie Podesta is a Life Coach, Speaker, whatever we call what she does today. I saw her in a short video where she states that she was asked to do a presentation for a company about change. She told them to get everyone together and the semenar would be 3 words.
Change;
Deal with it!
Pretty good advice, and I may add, try to be nice about it,
Barring a change or extension of the statue, the tax credit will soon cease to exist, as of the last day of Novemeber. With the implementation of HVCC (Home Valuation Code of Conduct) and MDIA (Mortgage Disclosure Improvement Act) it has become difficult, but not impossible to close transactions involving financing in 30 days or less.
Therefore;
Buyers hoping to receive the credit need to be under contract now! or certainly no later than the end of this month to have any realistic hope of receiving this benefit.
Do you think that there will be a last minute rush? Well that's certainly possible. That could slow the process further.
Please share this with the buyers that are currently looking for properties, and hoping to receive the credit.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
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