It is my belief that we will see more Government loans in response to the "Credit Crisis", that the Mortgage Market is currently going through. Here are some great highlight about the FHA product:

While FHA does require a 3 % down payment, they are also flexible as to where that down comes from. It is allowed to be gifted from a family member, and it is also able to come from a down payment assistance

program.

Most conventional loans only allow the seller to contribute 3% of the sales price to the closing costs, but FHA allows 6%!

A major reason why we will see it more an more in this market is because FHA does not have a minimum FICO Score requirement. This is ideal for First Time Home-buyers who may not have a lengthy credit history.

Another perk is that you are allowed to have a non-occupyingco-borrower! In fact in some cases, if the borrower does not have a job and all the income is from a non-occupying co-borrower, thats OK!

Down payment assistance programs are often used with FHA loans. These are non profit organizations who "gift" the money to the borrower and get repayment from the seller at closing. One of the most commonly used programs is "Ameridream." For more information about their program visit: http://www.ameridream.org/

Find a lender in your area who does FHA loans:

http://www.hud.gov/

Color is one of the most important, yet most challenging decisions you will make for your home. Here are some tips:

Yellow, Red, and Orange are all very warm colors and make objects appear closer than they really are. Use these when you want to make a large room appear more intimate.

Cool colors (Violet, Blue and Green) will do just the opposite. These are best for very small rooms that you want to appear larger, like say the bathroom.

When deciding on colors it's important to know what effect that color will have on your moods. Loving a color and living with it are two different things

Red is pretty intense, physiologically speaking, increasing blood pressure, heartbeat and energy in most people. It instills feelings of intimacy and passion. Red also increases the appetite, which explains why it is used so often in restaurants, and why it can be a good choice for a formal dining room

• Orange warms a room, but in a more friendly and welcoming way than red. As a result, paints in various shades and tints of orange work well in living rooms and family rooms.

• Yellow is cheery and welcoming, but it is more attention- getting than either red or orange. For this reason, it is a good paint color to use in poorly lit foyers or dark hallways.

• Blue, makes us feel calm and tranquil, so it is ideal for use in bedrooms. But since blue works as an appetite suppressant (perhaps because there are few blue foods) it is not the best option for a dining room ... unless you're on a diet.

• Violet is a funny one, Many adults dislike purples, but are fond of the rose family, which can work in many rooms, including dining rooms, bedrooms and libraries. Young children, on the other hand, respond favorably to violet, so this color can be used successfully in children's bedrooms and play areas.

Who wouldn't want to get money to make their new home more energy efficient? FHA  insures Energy Efficient Mortgages.

What this means is that you can wrap the cost of of energy repairs to your new home into your mortgage. Before you start to fret about a higher loan amount meaning higher payments, think of reduced utility bills and helping our planet!

The average U.S Family spends $1,300.00 per year on home energy bills. electricity generated by fossil fuels for a single home puts more carbon dioxide into the air than two average cars.

	And who knew that you could save energy through LANDSCAPING? Landscaping your home for energy efficiency can reduce your heating and cooling bills, the largest component of your home's energy use. Your overall landscaping strategy will depend on your regional climate. Plant trees to shade your home, reducing your cooling costs in the summer months. Typically, newly planted trees will begin shading windows in their first year and will reach your roof in years 5-10. Planting shrubs, bushes, and vines next to your house creates dead air spaces that insulate your home in both winter and summer. Plant so there will be at least 1 foot (30 centimeters) of space between full-grown plants and your home's wall. During winter, dense, low-lying trees and shrubbery on the north and northeast sides of your home can help protect your home against wind chill. Happy Energy Saving!

So earlier this week I received a request from a Realtor to remove him from my "Relentless Marketing Efforts". Usually when Realtors ask to be removed from our list, I might be a little discouraged, but I was too busy focusing on the word "Relentless". Actually, this Realtor's e-mail made my day.

The definition of Relentless is: "Steady and persistent; unremitting" Wouldnt you want a Loan Officer working for you that you could count on, that would be on top of your file, ready for anything?

Then today, a Realtor that I work with called me "Persistent." The definition of Persistent is:

"persisting, esp. in spite of opposition, obstacles, discouragement", also : "lasting or enduring tenaciously"

I must say that as a Loan Officer, I am THRILLED that I am viewed that way. Both by those who work with me, and those who do not. I think in this industry, especially in this market it is so easy to get "tired" and just want to bag the whole thing. Those two comments I received this week will definitely help me keep it up!

 What helps the rest of you in this industry push through?

Who wouldn't want their closing costs to be lower? Here are three tips to have a little cash left in your pocket when you buy your home:

1) Ask the seller to contribute to your closing costs

Lenders typically allow 3% (Of the purchase price) for sellers concessions, as long as the 3% is not more than the amount of the nonrecurring closing costs.

2) Close loans later in the month

Because lenders collect interest for the remainder of the current month when you close. If there are only a few days left in the month, you'll only pay a few days worth of interest.

3) Raise your insurance deductible

You can reduce the amount of cash needed to close by increasing the amount of the deductible on your homeowner's insurance policy. The larger the deductible amount, the lower the premium. Most lenders require buyers to pay their first year's homeowner's insurance premium in advance.

Always review your HUD settlement statement prior to closing, this breaks down everything that you are paying for at close. Review your HUD in order to compare it with your Good Faith Estimate, and to catch any "surprises" before your sitting at the closing table.

In our industry, its hard to imagine turning away business. Yet, thats just what we decided to do with an individual who called us yesterday.

She was unbelievably combative. She had just been through two lenders.

Okay, so at this point I understand that she is obviously frustrated due to the other lenders she has dealt with. Its not uncommon that our clients come to us after being frustrated with another lender. Notice I said LENDER in the singular. Its very rare that someone has been through multiple and they have a doable scenario. (Don't get me wrong, it can happen)

After telling Clint (My business partner and husband), that she was a strong feminist, Clint asked her is she would rather work with me. Her reply was : "Oh no, I don't like women."

Out of nowhere she asked Clint's age. (What this has to do with financing, I'll never know) He told her and she replied: "Thats my age. I have no faith in you."

Wow.

Clint was empathetic and explained that he was sorry she was frustrated, but he was not comfortable working with someone who did not trust him.

She responded by saying that "Well, you might as well give it a shot."

The entire conversation was colored by her disrespect and cursing, not to mention constantly reiterating that she did not trust us.

I understand that some people are "rough" around the edges, however this person took it to a whole new, most unprofessional level.

We decided that we would be unable to assist her and apologized.

This person was a referral from a Realtor, and we were worried about the reaction.

Has anyone else had a similar experience?

I am finding that more and more latley my borrowers will ask during the initial interview: "So, what if I say I'm going to live there, but I want to rent it out instead?"

About this point in the conversation my stomach turns. Occupancy is a BIG issue. I thought these statements from a Mortgage Blog I was reading today were sobering:

The Wall Street Journal quotes The Federal Bureau of Investigation as stating that mortgage fraud led to losses of $1 billion last year, more than twice that recorded in 2004.

Chip Burrus, assistant director of the FBI's criminal division states that some criminal gangs involved in drug dealing and other street crimes have been attracted by the large sums involved in mortgage fraud. "It's more profitable and less risky," he said.

In the past it was usually borrowers who were the target in mortgage scams, but more and more the target now is the lender.

With just one California Agency, Occupany fraud accounted for over 53% of the claims filed with them.

Some consumers, and even some Realtors & Loan Officers we have encountered seem to have the belief that telling a "white lie" about occupancy is no problem, a slap on the wrist at most.

So unless Jail time sounds fun..

Borrowers: Dont lie abour your occupancy!

Realtors and Loan Officers: Dont encourage your borrowers to lie about your occupancy!

Clint and I are trying to think of ways to help the Realtors we want to work with drive more traffic to their open houses.

A new idea we just tried was a food drive. Heres how it worked:

We advertised via PSA's, Print, and Radio that we were holding a food drive at the following locations : (Each Open House)

To add incentive we offered that for everyone who brought a donation, we would give them a certificate for a free appraisal to use with us in the next 60 days.

So we had FOOD For Lane County supply us with some food barrels, and we created our own signage. Clint and I even knocked on some doors in each neighborhood to make sure they knew what was going on.

Unfortunately, we did not get very many donations. For one thing it so happened that FOOD for Lane County was having two major drives themselves that same day. Also, We implemented the idea two weeks from when we thought of it. In the future, I think we need to give ourselves at least a  month.

However, it was not in vain because we did get a great lead from it. It was so great to work with Realtors who were more than happy to participate.

 We were not really expecting to get any direct leads ourselves from the drive, just hoping to get more activity into those open houses. I was also expecting alot more food! Just goes to show you never know!

I thought this update on the suprime mess was interesting:

http://www.mortgagenewsdaily.com/532007_Subprime_Mess.asp

Here's a quote:

A second part of the proposed legislation is designed to "seal the cracks in our regulatory system to prevent future widespread lending abuses." The bill seeks to regulate mortgage brokers and lenders under the Truth in Lending Act. Among the proposals is a standard for originators to assess a borrower's ability to repay a mortgage and holds lenders responsible for brokers and appraisers.

Isnt that what our job as lenders is? To assess whether or not a mortgage would be a hardship to our borrowers?

I personally feel that the subprime market tightening up is a very beneficial thing. Loan officers need to stop pushing loans that shouldnt be made, and those who can't afford a mortgage shouldnt have one.

A product that Clint and I are really pushing latley is the "My Community Program" from Fannie Mae.

With the market tightening up latley, its much more difficult for those who lack the perfect situation to get financing.

Dont get me wrong, I strongly feel that only those who can truly afford a mortgage should have one. I have never been one to yell: "Bad Credit, No Credit, No Problem!"

The worst thing I could do as a Loan Officer is assist someone in setting themselves up for failure. I think I have mentioned this before, but 14% of the recently done sub-prime loans are now in foreclosure. 14%! 

Unfortunatley, I am sure a large number of those could have been prevented if the Loan Officer's first priority was their client...not their pocket.

There are however, those who may not have funds for a down payment, or may have bruised credit, that can absolutley afford a home. Things are definatly more difficult for these individuals due to the recent industry changes.

Thats where "My Community" comes in.

With financing available for those with credit scores down to 575, and no down payment, it supports those borrowers who just have a few hurdles to overcome.

Its one loan, so the borrower doesnt have to deal with the stress of keeping track of two seperate mortgage payments each month.

Mortgage Insurance is required. Now before you stop reading this, listen up:

With the rates on second mortgages escalating, your likely to SAVE money by going for the MI as opposed to avoiding it with a second.

I have even better news.....

At Frontier Home Mortgage, we have discounted Mortgage Insurance Premiums due to the fact the we are Credit Union owned!

In some situations, we save borrowers HALF of what they would pay somewhere else!

 Other things to keep in mind about MI: A portion of it is now tax-deductible, and when you pay down the loan to 80% loan to value...it goes away, saving you EVEN MORE.

If anyone would like more information, just let me know!