Bye Bush Hello Change...

Well, I give our new President a lot of credit for taking this enormous Trillion dollar economic comittment on. At least the days of blaming Bush for everything will be over. We are the United States of America and are sure acting like a divided country.

One steady aspect of America is our committed and selfless military force. Amen.

As temporary as it may be, this Refinance Boom has been a blessing for many. Today I saved a soldier $300 per month by simply refinancing his Ewa Beach condo with a Streamline VA Refinance. Now when he is transferred after his 3 year stay on the Hawaiian Islands he will be able to rent his property out and break even on his payment. Exit strategy is the best sales angle these days. Another borrower that closed this week was able to pay off debt and lower her total monthly housing payments over $550 per month as well.

On the flip side, due to tightened regulations (tightened in the wrong areas) many are not able to take advantage of todays low interest rate environment. For example, I visit numerous Real esate agents who wish and pray that they could refinance their properties, but their loans have a snowballs chance in hell of getting approved due to their self-employment status and their soft sales income . I am working with a Major who has significant income, adequate assets but low equity. The original Loan Officer sank him into an 80/20 loan and values have moved laterally. Ideally we would like to get him into a VA loan but the guidelines require 10% equity in order for the switch from Conventional to VA to happen. We can't get the Conventional loan because PMI companies have restriced Insurance on properties with < 75% owner occupancy.

Today I had Wells Fargo deny a 20% down purchase loan for my client, a well qualified nuclear engineer, due to the owner occupancy of the building being less than 75% a new Fannie guideline. I can understand that the PMI companies require a 50% owner occupancy but 75% with 20% down!? How is the housing problem going to be fixed if lending on condos is not possible?

Lenders are taking 30 days to process refinances and about 10 days for purchases. I have three banks that have been able to get a loan approved in 48 hours recently but it did take some constant pressure on my account executives.

Look for rates to flirt with 4.5% again, and when they do be sure to call me to have me lock your loan! Do not let greed let you wait too long. Inflation is bound to rear its ugly head again.

Peace be with you...

A Hui Hou

With this monumental rise in mortgage applications both purchase and refinance it is not suprising that the banks are taking an extreme amount of time even to look at a Clean file...

December 17th I locked 4.375% with a slight rebate for a client then within 2 hours the rates were back up to 4.625%. Now the week leading up to 1/9/09 we are ready to slide a little lower due to the enormous instability that these horrendous jobs reports and other economic fiasco (bailout) news.

All systems are a go with the Team! Rachel, former bank underwriter is my processor and she is mentally and organizationally prepared to handle the flow of PDf's and Docs to and from the Banks. Chase, Wells Fargo, Plaza, SNMC and numerous other account executives are primed up and ready to compete for our business to give our clients the best possible rates... These bank professionals earn their healthy pay when times are good. Locks are made frantically and ...

Thats where the bottle neck begins...

Eventually the bombarded appraisers type the finishing touches on the report, days even weeks after they inspected the property.  

Slowly the files pile up; paper.... loads and loads of paper wrapped into folders to make them thick and more anonymous; the underwriter who peels one maybe two before lunch then three, four, maybe five off of the endless stack per day. Yesterday they officially require all files to extend to a 45 day lock at the expense of the client.

I call daily only, once maybe twice, at a strategic moment to kindly and very gently (with respect to their time) ask the underwriter which files she/he has looked at and if she/he has a need for anything at all that would help them approve the file. When I worked at a larger Banker I had to be even more careful around the underwriters as they had 9 - 12pm quite time.

Fortunately our relationships are solid and loyalty to those banks even in slow times now pays off.

Although I sound frustrated with the delays in this boom (caused by a panic response to economic catastrophe of undefinealble proportions),  I am actually overwhelimingly grateful and am on a mission to help as many families and individuals save as much money as possible with the lowest rates ever and realistic and fair costs.

 If I can help anyone you know with their mortgage I will make sure that they thank you sincerely for sending them my way. (808) 393-0707 (949) 874-2145

How was your Christmas/ Hannukah and New Years?!

Happy New Year 2009 from our family to yours!

The Year started off fantastic for my lovely wife Yuka, and baby Ai (now 15 months) and myself.

Rates in the 4% range!!! Perfect Christmas present!!!

Fortunately we were able to give back a lot this year as well; the first five refinances of December 2008 I was able to save my repeat clients over $260 each ($880 mo. on one) on their monthly mortgage payment!

Just tonight  1.5.09 I recieved this New Years note from a customer that is closing tomorrow:

Thank you so much Jay, you are really getting us off to a good new year and I appreciate that. I feel really good about what you have helped us to accomplish, especially because we are dealing with a local bank and that's what we wanted to do for the longest time.

 I hope all of your customers know what a great job you can do for them and appreciate you and all your staff that makes it happen.  It is very hard to find honest people like you and especially people who deal with your finances.  I feel very blessed and honored to have crossed path's with you on a personal level as well as professionally.  

Many thanks - Erica

So as the refinance pipeline fills up more and more each day I always take a mintue to reflect on how fortunate we are to be able to help people in the midst of the worst precipitous economic decline since the Great Deppresion. Those of us who held on when things looked real grim are now able to come back up and breath again; to thrive again. I am especially grateful for relationships with friends and business associates like David and Tonya Kucic of Re/max Honolulu who maintain the most optimistic and always positive attitudes. They have consistently validated me as their loan officer to their clients and I appreciate it. If you are in the market to purchase real estate in Hawaii you definitely want to visit their website; you will be WELL looked after. 

Last but not least I just want to thank the Active Rain Community for its positive outlook and support throughout this crazy point in history. Just having this community make tough days better.

and Very Lastly but most importantly... Thank you to our troops and their families for making sacrifices so we can carry on our lives in saftety! Bless you all and come home safely!

Happy New Year and keep up the great work.

A Hui Hou!

J Oku

If you have your Loan Officer (LO) lock in an interest rate on your approved loan and find out that rates dropped another .75% from 5.5% to 4.75% would you urge he/she to change banks to get the lower rate?

Are you aware of Rate Lock Renegotiation (RENO) and is your Mortgage Broker/Banker proactively looking to save you money by renogotiating your rate? This applies to VA and Conventional Loans.

As a mortgage broker this recent drop in rates has been both a blessing and a challenge. Fortunately, refinance applications have increased substantially, yet although rates have hit all time lows (4.375% with no points 12.17.08 and now back up to 4.875% at the time of this blog 12.29) many people are anxious to lock but are sitting on the proverbial fence nervously waiting for bonds to move higher and interest rates to drop further.

The major challenge to (ethical) Loan Officers is presented when we lock a rate, per the request of the client, and then interest rates continue to fall. If the bank the loan is approved with has a RENO Policy then RENOgotiate it is (See Below for example). If not, do I maintain the rate or switch banks and lock elsewhere to save the client money? 

Many of the nefarious types have been weeded out of this business, however you may be working with a Loan Officer who keeps the same rate and tells you that once you are locked there is nothing he can do (meanwhile he switches banks and harvests a much larger rebate from the bank). On the other hand you could be working directly with a bank that simply does not have a RENO policy in place which requires you to maintain the higher rate. One more scenario that I must succumb to as a broker is an internal bank/broker rating system. We Brokers are rated with each bank on our pull through ratio ( # of locks that actually close), and once your ratio drops below 70% the lender could terminate the business relationship. The practice of locking in an interest for safety then pulling that loan and submitting and locking with another bank on price is now "extremely" frowned upon and is becoming difficult. I am forced to start favoring banks that have RENO policies in place even if there rates are slightly higher.

If rates drop during the rate lock period and the broker requests a lower rate, the loan can be renegotiated for a 0.375% - .625% fee. This fee can be built into the discount/premium quoted. This policy cannot be used to increase the compensation for the broker.
Broker may raise the premium to cover the 0.375% fee, but may not make more than the original premium.

Depending on the amount of market movement, the new premium may be lower than the original premium. If the increase in premium is insufficient to cover the 0.375% fee and provide the broker their original premium, the full 0.375% fee will still be charged and the broker will receive a lower premium.

Here's the rules:

* Market rate is lower compared to rates at the time of rate lock (improved market).
* Loan will maintain original lock period and expiration.
* Only available on loans with locks of 60 days or less.
* The broker rebate will be capped at the original price.

* Limit one renegotiation per loan.
* File must be received
* Expired locks are not eligible for renegotiation (loans that have been extended prior to original expiration
are eligible).
* Loans that have been Worse Case Priced for any reason are not eligible for renegotiation.

(Lock Renegotiation Policy, CitiMortgage Wholesale Lending 2008)

Currently Citi, Wells Fargo, Metlife, BOH, Plaza and a few other large banks are accepting Rate Renegotiations. Other banks sush as Central Pacific Bank, FHB, SNMC have yet to introduce a RENO policy and furthermore are some are threatening to charge the broker approximately $2000 if the client who the broker helped get a loan within 6 months refinances for any reason!!!?

Homeowners and home buyers are expecting me to help them lock the best rate possible to save them as many pennies as they can in this constricting economy and I will do everything in my power to help them do just that. If I can help... call me anytime 808-393-0707. 

VA HOME LOAN TOOL

This is a tool that helps identify the maximum (conservative 40% dti if debt is low) loan amount that each rank can qualify for in Hawaii and Alaska. This tool uses Basic Housing Allowance (BAH) only and does not factor in COLA or BAS (if it did the loan amounts would be much higher).

You can always contact me www.directnationallending.com to get prequalified because approvals do vary based on credit worthiness and residual income as well.

Rates are hovering around 5.875% at Par and should stay at or below 6% until the election.

The VA homeloan still allows 100% financing and the maximum conforming loan limit has been increased up to $729,750 per the Dept. of Veterans Affairs until the end of the year.

If you need a knowledgeable, strong negotiating real estate agent (retired First Sergeant) to help you find a home in the price ranges listed below you will be doing yourself a favor by contacting he and his wife Tonya at www.davidkucic.com. Team Kucic and I have helped dozens of our Nations Finest secure sound real estate investments on Oahu.

May God Bless our Troops!

2008 BASIC ALLOWANCE FOR HOUSING (BAH)

BAH  (W/DPNDNTS) PP$   BAH  (W/O DPNDNTS) PP$

E9 $2868 $475k   E9 $2201 $370k
E8 $2650 $440k   E8 $2148 $350k
E7 $2460 $410k   E7 $1993 $325k
E6 $2286 $375k   E6 $1873 $310k
E5 $2114 $350k   E5 $1794 $300k
E4 $1985 $320k   E4 $1669   $270k
E3 $1985 $320k   E3 $1669 $270k
E2 $1985 $320k   E2 $1669 $270k
E1 $1985 $320k   E1 $1669 $270k

W5 $3064 $510k   W5 $2502 $410k
W4 $2906 $480k   W4 $2329 $390k
W3 $2769 $460k   W3 $2206 $370k
W2 $2538 $420k   W2 $2147 $350k
W1 $2289 $375k   W1 $1935 $320k

03E $2930 $480k   03E $2286 $385k
02E $2734 $450k   02E $2189 $365k
01E $2497 $420k   01E $2114 $350k

07 $3455 $575k   07 $2824 $470k
06 $3415 $570k   06 $2769 $450k
05 $3387 $560k   05 $2593 $425k
04 $3130 $520k   04 $2477 $400k
03 $2760 $450k   03 $2234 $370k
02 $2282 $375k   02 $2069 $340k
01 $2134 $350k   01 $1855 $310k

Friday October 3, 2008

Aloha Friday!

I will be available by telephone and e-mail all weekend for your mortgage needs! I look forward to your call.

"The only function of economic forecasting is to make astrology look respectable." John Kenneth Galbraith

Below I have rates (on average) from the top 5 National and Local Banks; I recommend floating while we await the reaction to the rescue bill that was voted on favorably this afternoon:

5.875%               30 year Fixed Rate at Par

5.625%               5/1 ARM

5.875%               VA 30 year Fixed Rate at Par (with a .125% rebate towards your closing costs)  

6.5%                  Jumbo Rate at Par

CA Cel (949) 874-2145  HI Cel (808) 393-0707
Fax (888) 327-2085
jay@mortgage808.com
www.directnationallending.com

 " The finest compliment I can ever receive is a referral from my friends and past customers."

Needless to say stress levels are running high if you are in the Real Estate industry. 

For me, there is nothing a smile from my 1 year old, a little excercise or a good surf won't fix.

But sometimes it takes more than that.  Sometimes you just need to be reminded that while there are always reasons to be grumpy, there are a million more reasons to be grateful and positive.

 Take a look at this guy...

Take a look at his smile...

God Bless out Troops!

Best wishes to you and yours...

A Hui Hou

This is a terrific way to show your VA clients that you are sincerely looking after their best interests.

The Interest Rate Reduction Refinance Loan aka IRRRL is a low cost way to help your VA clients refinance their home with ease and save money on their monthly mortgage. This week par Rates on the VA IRRRL were 5.5%. At 6% - 6.25% all closing costs can be paid through the Bank Rebate if you have a willing/generous mortgage originator (if not call me):

IRRRL Facts for Veterans*

"IRRRL stands for Interest Rate Reduction Refinancing Loan.  You may see it referred to as a "Streamline" or a "VA to VA."  Except when refinancing an existing VA guaranteed adjustable rate mortgage (ARM) to a fixed rate, it must result in a lower interest rate.  When refinancing from an existing VA ARM loan to a fixed rate, the interest rate may increase.

No appraisal or credit underwriting package is required by VA.  You should be aware, however, that lenders may require an appraisal and credit report anyway.

A certificate of eligibility is not required.  Your lender may use our e-mail confirmation procedure for interest rate reduction refinance in lieu of a certificate of eligibility.

An IRRRL may be done with "no money out of pocket" by including all costs in the new loan or by making the new loan at an interest rate high enough to enable the lender to pay the costs.  (Remember: The interest rate on the new loan must be lower than the rate on the old loan unless you refinance an ARM to a fixed rate mortgage).

An IRRRL can be done only if you have already used your eligibility for a VA loan on the property you intend to refinance.  It must be a VA to VA refinance, and it will reuse the entitlement you originally used.  You may have used your entitlement by obtaining a VA loan when you bought your house, or by substituting your eligibility for that of the seller, if you assumed the loan.  If you have your Certificate of Eligibility, take it to the lender to show the prior use of your entitlement.

The occupancy requirement for an IRRRL is different from other VA loans.  When you originally got your VA loan, you certified that you occupied or intended to occupy the home.  For an IRRRL you need only certify that you previously occupied it.

The loan may not exceed the sum of the outstanding balance on the existing VA loan, plus allowable fees and closing costs, including funding fee and up to 2 discount points.  You may also add up to $6,000 of energy efficiency improvements into the loan."

*Courtesy of http://www.va.gov/

VA Streamline Check List

Forms to be signed/filled out prior to submission

-URLA (1003)

-No Income, asset or liabilities listed (current lien holder and

account number listed)

-VA addendum to the URLA

-Nearest living relative form

-Certificate of Eligibility Form 26-1880

-VA Benefit-Related Indebtedness Form 26-8937

-Federal Collection Policy Notice Form 26-0503

-Borrower's authorization form for us to order credit supplement

-IRRRL loan worksheet

 For a limited time we can waive the .5% Funding Fee and all Non Allowables.

Show your VA homeowner clients that you are looking out for them and tell them about this program.

Good Luck!!!

There once was a day, not long ago, when it seemed as though lenders would simply check to feel if a borrower had a pulse before they would print loan docs for a $600,000 home purchase. Mortgage Company owners in 2003 - 2005 attempted to entice some of us mortgage originators to join their companies from the cockpit of their new Ferrari or with partnerships in their luxury yachts or Private Jets. Money was being given away and nearly all metropolitan hubs were buzzing to the hum of soaring equity and their mental cash registers.

Well now that the days of the 1% teaser rates with a 580 FICO score, No Income - No Assets and 125% financing are over and we are back to common sense underwriting, I am glad to see that many of the Riff Raff mortgage unprofessionals will be jumping the mortgage banking ship in 08. 

With the entire global economy feeling the shockwave of our mortgage industry, 2008 is going to be a year of slow recovery and eventual (fingers and toes crossed that the Feds injections of liquidity help) US economic resilience similar to the dexterity that was displayed months after Black Monday 1987 or the days of "Irrational Exuberance" of the .com crisis. 

In 2008 we, the Active Rain Real Estate Community along with the rest of the real estate professionals should be excited to educate our current databases and the new generation of real estate investors  that real estate is still a sound long term investment with todays low conforming rates, the time to invest in a second home for Baby Boomers (in Hawaii (o:) has never been better and that getting back to the traditional basics of saving for a down payment, keeping debts in control  and monitoring credit should be the focus of all first time homebuyers. Although many are in a position where they are leveraged by their current real estate and can not fathom purchasing right now, there will be many opportunities for first time home buyers and investors in 2008. 

Last but not least we must remember that we are still at War, and that thousands of our friends, daughters, brothers, fathers, mothers and loved ones are in the Middle East protecting the Freedom that we enjoy each and every day. Write a soldier in 2008! I am committed to helping our Veterans with their VA Home Loans and helping them obtain their well deserved piece of the American Dream in 2008! 

Happy New Year!!!

With all of the drastic changes in the mortgage lending arena, tightening of guidelines and panicked clients our baby could not have chosen a better time to enter this world 9.20.07 at 18:18pm.

The last week has been an experience that I am trying to hang onto for years to come. My life, more appropriately, my priorities have changed so dramatically that I feel like a new person. It comes from waking up to a little mini-me and looking into her wonderous eyes and at her tiny little fist of fragile fingers. I feel so connected to my family now from having two lives completely dependent on me and my real estate finance career for their well being.

Now as I work with clients I am more precise, more compelled to do an exceptional job and more excited than ever to get home to hold our baby after a productive day.

At a signing yesterday I met with my clients and their 3 month old and it dawned on me how my profession is so directly related to helping families with their immediate and long term goals.

This retired air force veteran and his wife were sold into an Option Arm with a 9% fully indexed rate and a $15,000 prepayment penalty. They intend to hang onto and pay off their property and said that they were not aware of the dynamics of the loan which is designed for short term investors.

I always new that providing people with sound mortgage advice was helpful and made for a meaningful career, yet now I see the need to help as many families as possible before some Hack of a loan officer sells a family a loan that only serves his pocketbooks best interest not theirs.

With so many concerns in life the last thing someone needs to worry about is a greedy finance professional to sabotage their goals. 

I look forward to be more active in this incredible community now that I am into my third week of parenthood!

Aloha