Jeremiah's Positive Mortgage Experience Blog

Your Payment isn't what it seems . . . Thanks Uncle Sam

Lakewood Lending Group, LLC — Tue, 08 Dec 2009 14:53:03 -0600

Through the benefit of tax deductibility of mortgage interest and property taxes the amount you pay to own a home ends up being a lot less.

Savings can be approximately $200 on a $180,000 loan. You can also start the savings earlier than the end of the year.

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The Journey to Homeownership

Lakewood Lending Group, LLC — Tue, 08 Dec 2009 14:07:29 -0600

There are Six items that you must know on your journey to homeownership. To help in realizing the dream of owning your own home you should schedule a "Pre-Approval" Consultation with Jeremiah Wean at Lakewood Lending Group, LLC. I will answer all your questions and concerns about:

1. Credit....

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The Benefits of a USDA Guaranteed Loan to Purchase a Home

Lakewood Lending Group, LLC — Mon, 16 Nov 2009 12:27:15 -0600

The U.S. Department of Agriculture (USDA) offers a guaranteed home loan program that helps people who want to buy homes in rural communities find lenders. The USDA will work with all qualified borrowers looking for homes in rural communities – not just first time homebuyers. The program requires NO money down.

While the U.S. Department of Agriculture assists home buyers obtain a loan through easier qualifications and financing options than the traditional mortgage, they do not actually fund the loan. In all states, the USDA has partnered with a few lenders who provide the mortgages because of the repayment guaranty from the USDA. The guaranty means if the mortgage defaults, USDA pays it – which gives lenders more confidence to provide home loans to candidates they may not otherwise lend to, but who still meet the USDA underwriting guidelines and qualifications.

For individuals and families looking for rural property within the state of Indiana – there is only one county in the entire state that does not qualify for USDA guaranteed home loans!

U.S. Department of Agriculture Home Loan Benefits

There are a number of benefits of using a USDA guaranteed loan to purchase your rural home, including:

· Borrowers can finance up to 100% of the appraised home value, and are not required to put a down payment on the home. The USDA guaranteed mortgage program is one of the few 100% financing options for home loans available.

· Borrowers can receive gifts or grants and use it toward closing costs.

· The US government guaranty's the loans which means lenders can offer lower interest rates on 30 year fixed home loans.

· Flexible guidelines that allows individuals with imperfect credit to qualify for home loans.

· No expensive mortgage insurance premiums (PMI – Private Mortgage Insurance) such as those required by the FHA guaranteed home mortgage programs.

· If purchasing a handyman special or homes that need repairs, you may qualify to include the cost of those repairs in the home loan mortgage.

· No maximum purchase price for home mortgages – the amount you can borrow will be based on your ability to repay.

Who is Eligible for an Indiana USDA Guaranteed Loan?

Any individual or couple looking to buy and live in a home that is located in a USDA eligible rural area can qualify for a USDA Rural Development mortgage, if income verification is sufficient. While you don't need to have a spotless credit history, you will need to show you have the ability and willingness to make your mortgage payments, yet be considered to have insufficient financial resources to qualify for a traditional home loan.

If you have previous foreclosures or bankruptcies on your record, they need to be at least 12 months old to qualify for a USDA mortgage.

In addition to the borrower meeting certain criteria for eligibility, the property itself must also be eligible for a USDA loan. Generally, to be considered a rural property, it will be located in open country and in a town with a population of less than 10,000 people.

You can determine if the property or location you are considering is considered USDA eligible by visiting http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do and reading under Property Eligibility for the type of property you hope to purchase.

How to Apply for a USDA Guaranteed Mortgage in Indiana

If you are interested in purchasing a home in a rural area, you will want to contact an approved lender. Visit www.lakewoodlendinggroup.com/usda to start the process of getting qualified for a USDA loan.

Don't Let This Opportunity Pass You By

Lakewood Lending Group, LLC — Thu, 16 Jul 2009 16:42:09 -0500

It's Time to Get OFF the Fence!

Picture by: Dan Barak

Two very big considerations that would lead me to say it is time to buy right now.

First Time Home Buyer Credit - Lesser of $8,000 or 10% of purchase price - this amount reduces after a Modified AGI of $75,000 for a Single Return and $150,000 for Joint Returns, and is completely eliminated at $95,000 for Single Return or $170,000 for a Joint Return. Modified AGI - just add some foreign income back to the AGI. This credit is set to Expire December 01, 2009. So, you need to move quickly to ensure you don't miss out on this free money by purchasing now.

The Federal Reserve is set to stop buying Mortgage Backed Securities on December 31, 2009. This is in a large part what has kept interest rates artificially low to this point. After the Federal Reserve stops buying the rates could head back up to the mid 6's very quickly.

With typical supply and demand, as demand rises so does prices. Bonds have both a price and a yield. A bonds price and yield (rate) move in opposite directions. As the price goes up, the yield (rate) goes down. So, the Fed purchasing Mortgage Backed Securities has increased demand, thus increasing the price and because of the relationship between price and yield decreased the yield (rate).

Example of Your Purchasing Power with a 1% increase in Rates:

Rate are presently at 5.375% so let's say that you can presently qualify a house that costs $180,000, if interest rates are to jump just 1% when the Fed stops buying Mortgage Backed Securities (which is very likely) at that point with a 6.375% rate you would only be able to qualify to purchase a house that costs $161,565. If you wait the home you qualify to purchase may be smaller with an increase in rates.

Make It Easy on Others To Share Your Blog Post on Twitter

Lakewood Lending Group, LLC — Mon, 06 Jul 2009 18:28:22 -0500

Below are the easily repeatable steps on how to create a hyperlink for your blog that will allow someone else to share your blog on Twitter with your personal description.

You need to ensure that your entire message is within 140 characters. The easiest way to do this is by typing it in on Twitter, but don't hit submit.

You'll need a URL shortner or sweetener, my favorite is bit.ly found at: www.bit.ly. You'll need to sign up for it, but it's free. Bit.ly gives you some tracking and reporting ability, there are many other Shortner's out there. One user pointed out that if you have google apps on your website you can have your own shortner.

You'll want to shorten the URL to your blog post, since you only get 140 characters.

After writing your retweet you'll need to make it compatible as a URL. URL's don't seem to like spaces. :-) You can do this manually by typing, "%20" without the parenthesis everywhere you typed a space making sure there are no spaces. For example: The Quick Brown Fox; would change to: The%20Quick%20Brown%20Fox

or a much easier way is to copy the information you typed into Twitter, and convert using a URL encoding converter at: http://www.blooberry.com/indexdot/html/topics/urlencoding.htm The converter is at the very bottom of the page.

After you have converted your text that you want in your retweet you'll put the following in front of the URL acceptable info, http://twitter.com/home?status=

You can get a free icon's to use to let people know to share your blog on twitter at:

http://www.webdesign.fm/free-twitter-icons-happy-birds/

The steps:

1. Create your blog posting

2. Post in Edit format to Active|Rain or your favorite blog hosting format.

3. Copy the URL for your posted blog

4. Sweeten the URL to your blog using bit.ly or your favorite sweetener

5. Go to twitter, write a brief description of your post and add the sweetened URL from Step 3. Make sure the total is under 140 characters. After you get the information down to 140 characters copy the entire information.

6. Convert your typed message from step 5 into a compatible URL. Using http://www.blooberry.com/indexdot/html/topics/urlencoding.htm Copy the resulting output.

7. Go back to your original blog post, and put in a hyperlink starting with, http://twitter.com/home?status= "followed by the copied information from Step 6.

8. Post your new easy tweetable blog.

Here is a screen shot of what someone else would see when they click on my Share on Twitter:

Try mine out below. Just click on the Share on Twitter bird.

Let me know how it works out for you.

After writing this I found what may be an even simpler approach in www.tweetsmarter.com

First Time Home Buyer Seminar (Indianapolis)

Lakewood Lending Group, LLC — Fri, 26 Jun 2009 14:54:27 -0500

Learn why now is the perfect time to buy!

Don't miss out on this excellent opportunity to get your questions answered. Hurry the $8,000 tax credit ends December 01, 2009; and the Federal Reserve is scheduled to stop buying Mortgage Backed Securities December 31, 2009 (which could lead to rates in the mid 6's).

Call to Action - HVCC

Lakewood Lending Group, LLC — Tue, 09 Jun 2009 17:44:38 -0500

The National Association of Mortgage Brokers recently sent out a call to action in attempt to get the industries voice heard. I want to make the mortgage brokers that are not in the association know, as well as appraisers, Real Estate Brokers, Consumers, and Title Agents know what they can do to have help the situation.

NAMB has set up a HVCC Resource Center, which can be found at: NAMB HVCC Resource Center

NAMB also wants to receive emails detailing specific issues that have been created by HVCC (delays in closings, cost to consumer, lost rate lock, etc.). This information can be sent to NAMB at the specific email address: hvcc@namb.org

If you believe HVCC has caused issues in your business then please let let your voice be heard. Whom to contact from NAMB release:

" Who will you be contacting?

NY Attorney General Andrew Cuomo's Office: (212) 416-8000, Internet Complaint
Federal Housing Finance Agency (FHFA): (866) 796-5595, director@fhfa.gov
Fannie Mae: (202) 752-7000, headquarters@fanniemae.com
Freddie Mac: (703) 903-2000, Internet Complaint
Senators, Representatives and Governors: Click here for contact information. "

The problems I've seen so far:

Each lender is requiring their own Vendor Management company
It is taking 2 - 3 times longer to get an appraisal
After the appraisal is ordered through one lenders "preferred" Appraisal Management Company, you cannot take the appraisal to another lender.
Quality appraisers with years of experience and industry knowledge are leaving, because these unregulated Appraisal Management Companies are taking 20 - 30% of the appraisal fee.

Articles Illustrating the Effects of the HVCC from NAMB email

    A. The Appraisal Bubble - The Center for Public Integrity
    B.   The Cure is Worse than the Disease - Appraisal Press
    C.   Appraisals Roil Real Estate Deals - The Wall Street Journal

Don't forget to sign the petition for a Reconsideration of HVCC

Rhonda Porter at "The Mortgage Porter" wrote an excellent post on "HVCC: Why Should YOU Care?" Go check it out.

Indiana's Good Fund's Law - Don't get caught off guard

Lakewood Lending Group, LLC — Mon, 08 Jun 2009 10:50:55 -0500

Effective July 01, 2009 - HEA 1374 - requires that money for a purchase or refinance be "Good Funds."

Among the requirements:

Closing Agents must deposit all funds received in connection with a real estate transaction into an escrow account unless all the parties involved agree to another arrangement.

All funds in the amount of $10,000 or more, in the aggregate, received from any party to a real estate transaction must be wired, irrevocably credited to the closing agent's escrow account. Checks for $10,000 ore more are prohibited. This is to guarantee that funds are immediately available.

Funds less than $10,000 in aggregate, received from any party to the transaction, must be in the form of "good funds" defined in the act.

Closing agents are permitted to advance up to $500 from an escrow account to pay incidental fees

Good funds for those amounts under $10,000 - in lieu of wiring, keep in mind if the amount is over $10,000 IT MUST be wired:

Currency

Certified or cashiers check drawn on an existing bank account

A check drawn on the trust account of a real estate broker

A personal check not to exceed $500

A check drawn on the escrow account of another closing agent

A check issued by a farm credit service

You can read the entire Act HERE.

Get the Right Angle on Listing Photos

Lakewood Lending Group, LLC — Wed, 07 Jan 2009 21:16:33 -0600

I have just a few quick pieces of advice that will help ensure excellent listing photos:

1. Make sure the mini van is not in the foyer

2. Remove the Police Danger "Red Tape"

Sometimes a picture is worth a thousand questions.

1. Did they put up the available sign after the Mini van was in the foyer?

2. Where are the tire tracks?

3. When did the person realize this wasn't their garage?

4. If the sign was up how did they avoid it and avoid actually parking in the garage.

5. What kind of decorating allowance can you get for having the engine of a van in your living room?

6. Is this the new "drive-by" appraisal called a "Drive-In"?

No Down Payment Loans are Still Available

Lakewood Lending Group, LLC — Tue, 06 Jan 2009 11:01:25 -0600

Rural Housing is still doing 100% financing. With the added incentive of no Private Mortgage Insurance.

Contrary to some opinion Rural Housing loans are available even if the home you are looking at is in a subdivision. The loans are Census based, and are typically offered in areas with 25,000 or less residents.

We offer the Loan Guarantee Program which does not have a recapture, if you refinance or sell your house.

For more information on how you can get into your new home for zero down call me at: 317-348-4268, or Toll-Free at: 866-566-1951.

You can also apply now to get pre-qualified. Click Here to start the quick process of finding out exactly how much home you can own.

Jeremiah M. Wean

Partner

Lakewood Lending Group, LLC

Phone: 317-348-4268

Fax: 317-436-0126

jwean@lakewoodlenders.com

http://www.lakewoodlenders.com

How Bush Got it all Wrong with the Auto Industry

Lakewood Lending Group, LLC — Sat, 20 Dec 2008 21:14:14 -0600

Bush approved a $17 billion dollar auto bailout.

At least now that we've given the Automaker money, they have the money needed to file bankruptcy.

WHERE'S THE MONEY COMING FROM:

Picture by: Ian Britton - FreeFoto.com

The constantly tapped ATM (First USA Bank of Taxpayers).

The TARP (Troubled Asset Relief Program) fund, if you remember was to be used to purchase troubled mortgage servicing loans. And ultimately it comes from us, the taxpayers. But in reality doesn't it just come from the AIG Slush party fund. AIG has already burnt through 123 Billion, and that is just one company.

There is nothing like throwing good money after bad. Let's crunch some numbers here. First a little background. Of the money promised it is only going to two car companies: GM and Chrysler, with the Lions share going to GM. GM for the past year has been burning through cash at a rate of $3.0 billion per month. So, in 3 months GM will have gone through almost all the money, just from normal operating expenses. To truly restructure a company your expenses are going to soar, for simplicity sake let's just assume that they only double normal operating expenses, or 6 billion per month. At the end GM will not have even gotten around to fixing the real problem.

In a similar post please visit: http://www.mortgagemarketingcommunity.com/twas-the-night-before-the-bailout/#more-848 to read all about "Twas the Night Before the Bailout".

The worst part of the whole bailout is that there have been no terms in place. Both companies just have to show that they are working towards becoming a viable company.

Terms of the Loan:

Compensation must be commiserate with non union US Workers
No more "job banks" for laid off workers
Retiree benefits must be funded in part through company stock
Bondholders have to accept company stock
Bow down to an appointed "Car Czar"
Submit a business plan by the middle of February
Be a viable company by the end of March

Beginnings

“Endings are the seeds to beginnings. Tomorrow will come in time. Even in hopelessness lies a seed of hope, and even small seeds can climb. But the little seed has to give up its past on its voyage to the sprouting tree. Didn’t you ever transcend your life, previous visions of who you could be? Every cloud opens up to the smiling sun, and the low will soon reach high tide, exits and entrances are at the same gate. Moving through is your ticket to pride. And two triangles have to surrender themselves to ever become a square. And every simple discovery in life makes you give up what you thought was there. Caterpillars will butterfly off the ground. Give up your past to be king. Horses run best when not looking back. Let go to reach higher things. You have to give up your discomforts to ever soar in flight. But isn’t the end of something that’s wrong The beginning of something that’s right? So, you stand at the spot where endings begin, handcuffed by the past or freed. One path will take you to where you have been, the other will set you free. So pick yourself up like the rising sun, like the wind lifting the silent sea. Plant a hope in your heart like a seedling in spring and step forward to your new destiny.” --Anonymous

To ensure you that it is not just congress that doesn't listen to the everyday person, here is a link to a letter opposing the auto industry bailout signed by House Republicans to the President: http://www.americanobjective.com/letter.pdf

A do-over for the automakers is what they need. A fresh slate. The ability to move away from the unions, the one's that kept the automakers in the last decade, and kept them from being competitive. The ability to start small and build back up. If they start small they can slowly regain people's trust that they make a decent car, this sentence was hard to write. Then people will feel comfortable buying a US auto.

Another thought to ponder, is this a vote of confidence in the automakers, or is it a vote for nationalized healthcare? Since, almost $1,600 of every car goes to pay for healthcare. My thought it is the government's way to move the automakers away from providing so much health benefits and keep from dealing a crushing blow to Medicaid.

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Bagging The Elephant

Lakewood Lending Group, LLC — Mon, 23 Jun 2008 21:58:59 -0500

Networking is an excellent way to get where you want to go without all the effort. There is an excellent tool on the Internet that helps facilitate networking, it's calling LinkedIn.com. LikedIn allows you to see the contacts of your contacts, and as such approach them, e-mail, and otherwise. It even lets you go a step further; you can see the contacts associated with the network of your network; however, you cannot directly see them. It is all very similar to 7 degrees. The pharmacist in New York can reach out to the Doctor in California, through 7 or less people.

Manager-tools.com had an excellent podcast on the subject of networking. Loantoolbox.com had Iven Misner of BNI. If you haven't seen or heard of any of these you need to check them out.

Networking is a matter of getting out there and making a commitment to meet people without expecting or looking for anything. The simplest way to network is to simply ask what can I help you with. After you add someone to your network you need to stay in touch with the person at least once a quarter. Manager-tools suggests contacting everyone in your network at least once a quarter to make some kind of contact with the person. The easiest way to do this is to remind yourself through a recurring task in outlook.

If you are traveling you should set a goal of adding at least one person to your network every time you travel. If you don't travel a lot then your goal should be to add 1 person a week. While over time some of the people in your network will attrition, in five years you'll have 200 people in your network. And guaranteed one of those 200 is the elephant. And if they aren't then maybe they are the Lion.

But you must build your network before you need it and not after.

You don't want to meet someone and go into the relationship with the idea of what can they provide me, that puts a damper on the whole network, that is sales, not networking.

So, go out and bag your elephant.

One step at a time.

A Loan Officer and an Underwriter: How to Tell Them Apart

Lakewood Lending Group, LLC — Sat, 21 Jun 2008 22:38:07 -0500

A balloonist is floating along and suddenly realizes he is lost. He lowers his altitude and notices a man in the field below him. He calls out to him saying: "Excuse me, but I am lost. Could you tell me where I am?"

The man below answers, "You are 50 feet in the air hovering above a field."

The balloonist says: "You must be an Underwriter."

"I am," says the man. "How did you know?"

"Well, everything you said is technically correct, but it is of no use to anyone," says the balloonist.

"You must be a Loan Officer," says the man.

"How did you know that?", asks the balloonist.

The man answers: "You are floating around with no idea where you are or where you are going, and you expect me to help. You are in the same position you were when we met, but now its' my fault."

Comment Now Before FHA Takes Another Bullet Out of Your Gun

Lakewood Lending Group, LLC — Tue, 17 Jun 2008 20:57:54 -0500

DPA Killer The Storm is Coming.

Hud is trying to deliver another knockout punch to the housing industry. Round 2 at eliminating Down Payment Assistance. The proposed rule has just been published and has a 60 day comment period ending on August 15, 2008.

HUD's topline motive is that loans carrying down-payment assistance have a higher default rate. I don't think there is any way to logically argue against that fact; a borrower with no money involved is likely to walk away. HUD manages this higher default rate the same way they manage all defaults. A default is considered any loan that is 60 days or more delinquent, and still considered a default for a two-year period, even if the customer becomes current during that time. If a mortgagee exceeds a 200% default rate of other mortgages in the same field office area, then their origination approval rate can be terminated. An example would be a FHA lender (Lender A) that has originated 300 FHA loans in 2 years, and had 30 loans default (60 days or more delinquent) would hae a 10% default rate. Now if the other FHA lenders in the area average 300 FHA loans in the 2 years period as well but only have 15 loans in default, a 5% default rate. Then Lender A would use their ability to do FHA loans. This is significant because it doesn't matter if they are the only lender doing purchases in the market, or if all their loans carry down payment assistance or not, or all their loans came from an employor that is now defunct. So, while Down payment assistance loans may default more often, HUD by their own policy is elminating the Lenders that close these loans.

HUD's secondary motive is that the seller benefits. That is a shock as well isn't it? The seller got their house sold. But didn't the borrower get into a house, that they could afford, but didn't have the means to put 3% into the downpayment. The seller while they got their house sold did just contribute 3.75% to a charitable organization. While every party benefits, I do not feel that down payment assistance allows the seller to sale their house at more favorable terms. What we have seen in our market is that sales typically happen at 97% of list price, but with down payment assitance it is closer to 98-99%. Not a real measurable benefit to the seller there.

Most FHA programs require that a borrower put a 3% investment in the property. The 2nd round publushed regulation would prohibit the borrower from receiving seller-funded downpayment assistance to meet the 3% requirement. The regulation would not aloow downpayment assistance that comes from the following parties, "before, during, or after closing of the property sale: (1) the seller, or any other person or entity that financially benefits from the transactions; or (2) any third party or entity that is reimbursed directly or indirectly by the seller, or any other person or entity that financially benefits from the transaction." The only difference in this re-published regulation and the original published last year, is that HUD is now offering evidence to address concerns raised in the District Courts. Specifically HUD's rationale for the regulations, see Topline Motive and Secondary Motive above. T

This 2nd round regulation does not eliminate all privately-funded downpayment assistance, just like the original. A borrower may receive downpayment assistance from: family, employer, state, local, or tribal government, or charitable organizations that do not have a financial interest in the sell of the property.

I think HUD needs to offer an alternative, a little higher upfront mortgage insurance premium. Higher monthy mortgage insurance premium and 100% financing.

I'll show you how to have your voice heard in 4 easy steps.

Step 1:

Go to: http://www.regulations.gov/search/index.jsp
Type in USMS 102, then click Go.

Step 2:
You may need to go to the 2nd page or back further. You are looking for: FR-5087-N-04: Standards for Mortgagors Investment in Mortgaged Property: Additional Public Comment Period

Once you find that, click on the Send a Comment or Submission.

Step 3:

You will need to fill out a little information about yourself.. Here is where you type up your comment. I also recommend having your comment in a Word document format to upload as well. Enter your comments, and upload your word document, then click next Step.

Some key points to consider when writing out your comments:

Significant impanct on minority homebuyers, low-income homebuyers, and first time homebuyers. The very people HUD is charged with increasing homeownership for.
Significant impact on the already impaired mortgage industry. There are 2 primary products availble presently: Convention and FHA. This would elminate a large portion of those FHA purchases.
Alternatives: 100% Financing, higher upfront mortgage insurance, and higher monthly mortgage insurance to offset the increased risk.
Alternatives: Set allowable levels of loans carrying down payment assistance by FHA lender.

Step 4:
Finally to the easy Step, click Submit.

Just like I said, as easy as 1, 2, 3, 4. Make your voice heard.

E-mail Signaturs: How much is too Much?

Lakewood Lending Group, LLC — Thu, 12 Jun 2008 09:26:04 -0500

How Much Is Too Much

More people are having their email pushed to a mobile phone. Which creates the need for emails to be brief. I have to admit I was one of the offenders in the past. I had:

Name
Title
Address
Phone
Toll-Free Phone
Fax
E-mail
Website
E-mail Footer - warning that a squirrel will leave random food in your car if you do not delete this email if I sent it to the wrong person. Consisting of 164 words

This entire footer was included on sent emails as well as responded to emails.

I have seen emails go as far as including .jpg's of their signature, and a quote.

First do you think anyone ever reads the warning at the bottom of your email footer?

I would have to say 99.9997% of people barely even pay any notice to it at all, let alone read it. With that being the case why do so many people feel the need to include this warning. Do people think that the CIA will show up at your doorstep and watch over you to ensure you delete emails that you received by accident.

Where should everyone draw the line.

I feel there are 3 seperate e-mail signature lines needed:

Sending an e-mail to someone for the first time that you have never dealt with in the past
Sending e-mail to someone you know and continuiously work with
Responding to an e-mail. That you have previously sent so it contains the information in item #1 or 2.

Sending an e-mail to someone for the first time that you have never deal with:

I feel these e-mails should include, only these items and nothing else for the email signature:

Name
Title
Phone
Email
Website

Sending e-mail to someone you know and continuiously work with:

I feel these e-mails should include, only these items and nothing else for the email signature:

Name
Phone

Responding to an e-mail. That you have previously sent so it contains the information in item #1 or 2.:

I feel these e-mails should include, only these items and nothing else for the email signature:

Name

If we all follow these general guidelines the size of our email messages will be greatly reduced. Thus not taking as long to open, and increasing the change of a quick read and response.

Washington - Clears up the Terms for Borrowers

Lakewood Lending Group, LLC — Wed, 11 Jun 2008 17:39:18 -0500

Washington House Bill 2770 goes into effect tomorrow, 06-12-2008.

Some main points:

New material terms disclosure - 1 page loan summary
No negative amortization loans (not a lot of these in the market place presently)
No reverese mortgages (This needs to be revised) - and it appears the state is working that way.

Disclosure Required:

The present model disclosure can be found on the States website at: http://www.dfi.wa.gov/resources/2770_disclosure_rulemaking.htm

• A disclosure must be provided to the consumer by whoever is taking the application (Broker or Lender) within 3 days of application.

• Any changes to those terms a new disclosure must be provided within 3 days and no later than 3 days prior to closing. Changes include a change to the loan amount or any other term disclosed on the form.

• The State is drafting a Model disclosure. The form will be continually modified until the committee meets again to finalize the form. The Present Draft Model form must be used effective 06-12-2008.

• Items Disclosed

o 1^st or a re-disclosure of the terms

o Loan Amount

o Fixed or Adjustable Loan

o Monthly Income

o Principal and Interest Payment

o Cost of Taxes and Insurance monthly

o Whether Taxes and Insurance are escrowed

o Interest Rate

o How loan that rate is in effect for, when it could adjust that the highest it can go and how many months until adjustment, also listing the maximum monthly payment

o Origination Charges

§ Loan Origination

§ Discount

§ Broker Fee

§ Other (Processing Fee)

o If the loan contains a prepay, and the amount of that prepay and how long it will last for

o If the loan contains a balloon payment provision, when the balloon is due in.

o Amount of YSP, as a dollar figure

o Disclosing the increased cost of the loan because of reduced documentation as either a Dollar or percentage

o Signed by Borrower(s) and Loan Officer

Important Facts:

• No Negative Amortization loans

• No Reverse Mortgages

• Loans with an Interest Only Feature that do not carry a negative amortization feature can still be closed.

• Subprime loans that do not carry a negative amortization feature can still be closed.

• Prepayment penalties on Adjustable Rate mortgages must expire 60 days prior to the first interest rate adjustment.

• Must provide the borrower with the best possible Rate and Terms they qualify for.

• Fraud is Class B Felony.

FHA Risk Based Pricing Rears it's Ugly Head

Lakewood Lending Group, LLC — Wed, 11 Jun 2008 09:42:04 -0500

Starting July 14, 2008 FHA will go to Risk Based Pricing to Determine the UP-front and monthly MI. While overall it will not have a huge impact, it will increase some consumer monthly payment, and thus decrease the amount they will be able to borrowl

The pricing is based on 3 factors:

1. "Decision Credit Score" - more about this later

2. Loan to Value

3. Amortization Term - either 30 year or 15 year

The only item outside these 3 is if it is a first time homebuyer, with HUD counseling.

Another notable point; to go above 90% LTV the decision credit score must be above 500. I believe must lenders have put a floor at 620. As you can see everyone with a score of 640 or above is getting a break on the UFMIP, except on the 95% or greater financing on the 640 - 679 category. And monthly MIP is raising across the board for max financing. The non-traditional category refers to non-traditional credit, those people that have no credit or credit score, yet are able to meet the guidelines for non-traditional guidelines

Greater Than 15 Year Matrix

15 Year or Less Matrix

The decision credit score is based upon:

1. Middle of 3 scores for each borrower

2. Lower of 2 scores for each borrower

3. If more than 1 borrower the lowest resulting score from either item 1 or item 2.

For Example:

Example 1:

Both Jane and Joe Borrower apply for a loan, they both have 3 credit scores as illustrated below.

Joe Borrower:

Equifax: 750

TransUnion: 810

Experian: 787

Jane Borrower:

Equifax: 450

TransUnion: 410

Experian: 487

The middle score for Joe Borrower is: 787

The middle score for Jane Borrower is: 450

The decision score to use in this example is: 450

Because the decision score is under 500, the max FHA Financing LTV they qualify for is 90%

They would have 1.75% UFMIP and 0.50 monthly MIP

Example 2:

Joe Borrower applies for a loan solely, he has 3 credit scores as illustrated below.

Joe Borrower:

Equifax: 750

TransUnion: 810

Experian: 787

The middle score for Joe Borrower is: 787

The decision score to use in this example is: 787

The max FHA Financing LTV they qualify for is greater than 95%

They would have 1.25% UFMIP and (0.55 monthly MIP, if they go for max financing)

Example 3:

Both Jane and Joe Borrower apply for a loan, they both have 2 credit scores as illustrated below.

Joe Borrower:

Equifax: 750

TransUnion: 810

Jane Borrower:

Equifax: 450

TransUnion: 410

The lower of two scores for Joe Borrower is: 750

The lower of two scores for Jane Borrower is: 410

The decision score to use in this example is: 410

Because the decision score is under 500, the max FHA Financing LTV they qualify for is 90%

They would have 1.75% UFMIP and 0.50 monthly MIP

Illinois Gears Up to Slow Down Home Sales in Cook County

Lakewood Lending Group, LLC — Wed, 11 Jun 2008 09:20:50 -0500

Yes, you read it correctly. The Lending Database Program is set to go into effect, July 1. This will be the 3rd attempt at doing this. The newest iteration is from Senate Bill 1167.

Plan on all loans in Cook County taking at least one week longer than usual, and if the borrower is required to go through counseling count on two weeks. Keep in mind virtually all parties to the transaction will have a role to play.

The following will be required to go through counseling no matter what: First Time Homebuyer, Negative Amortization, Interest Only, Adjustable Rate Mortgage, Points and Fees greater than 5%.

Predatory Lending Database Program:

Important information:

o ARM - Closed-end mortgage allows for adjustments of the interest rate during the first 3 years of the loan

o If 2 scores must report the lower score. If 3 scores report the middle score.

o First Time Homebuyer - not held ownership interest in a residential property

o The Predatory Lending Database is established within Cook County.

o The following parties will be entering data into the Database:

§ Broker

§ Originator

§ Counselor

§ Title Insurance Company

§ Closing Agent.

LO Duties under the Database Program:

o 10 days of taking application submit "required information" to the database. Within 7 days the Department will issue a determination if counseling is required or not. The borrower may not waive counseling.

o If after submitting the information (new commitment to the borrower, change the terms) then within 5 days must submit all information to the database. Within 4 days of the new information the Department will issue a determination if counseling is required or not. The Department will require counseling if the terms have been modified to meet another counseling standard or the interest rate has increased by more than 2.00%

o Pay the cost of the counseling not to exceed $300.

Loan Officer Information on Borrower to be submitted to Database:

o Borrower's Name, Address, Social Security Number, Date of Birth, Income, Expense information

o Property address, description of the collateral, loan terms (rate, fixed or adjustable, terms, and other material terms)

o Borrower's credit score

o Originator's License #

o Fees being charged, whether charged up front or as YSP. Charged payable to affiliates

o Information about affiliated service providers including name and address of appraisers, title insurance companies, and closing agents. Including any money received from the broker or originator in connection with the transaction.

o All information from the Good Faith Estimate

o Annual Real Estate taxes

o Proposed Principal and Interest Payment

o Information on how obtained the client and name of referral source.

o Information on disclosures given to the borrower and when given

o All financing by the borrower for the subject property in the past 12 moths

o Loan information including interest rate, term, purchase price, down payment, and closing costs

o Whether a first-time buyer or refinancing a primary residence

o Whether the loan is interest only or has a negative amortization feature.

o Whether the total points and fees exceed 5%

o Information on prepayment penalty

o Whether the loan is an ARM

Department Duties under the Database Program:

Notify borrower of all participating HUD certified counseling agencies.

Direct the borrower to interview with a counselor

Standards for Counseling:

Borrower shall be recommended for counseling if any of the criteria is met:

o First-time homebuyer

o Refinancing a primary residence and the mortgage includes any of the below characteristics:

§ Interest only payment

§ Negative Amortization

§ Total points and fees greater than 5%

§ Loan includes a prepayment penalty

§ The Loan is an ARM

Borrower Duties under the Database Program:

Within 10 days of receipt of notice borrower shall select a counselor

Counselor Duties under the Database Program:

Within 7 days after interviewing the borrower the counselor must submit all required information.

A counselor shall not recommend or suggest that a borrower contract any specific mortgage originator, company to obtain another quote

The counselor will either recommend

o The Loan should not be approved due to indications of fraud

o Should be approved not material problems

o Borrower does not understand the transaction

o Borrower does not understand the costs associated with the transaction

o Borrowers monthly income and expenses have been reviewed and disclosed

o The rate of the loan is above market rate

o Borrower should seek a competitive bid from another broker

o Discrepancies between the borrower's verbal understanding and the originators completed form

o Borrower is close to not being able to afford the loan

o Borrower understands the true cost of the debt consolidation and the need for credit card discipline

o Information borrower provide the originator has been amended by the originator.

Title Company Duties under the Database Program:

Within 10 days of closing the title company must submit all required information.

Attach to the mortgage a certificate of compliance with the requirements of this Article

With the Title insurance company fails to attach a certificate of compliance then the mortgage is not recordable.

Freeze on Subprime ARM's

Lakewood Lending Group, LLC — Thu, 06 Dec 2007 17:55:50 -0600

Today was the announcement of a Freeze on Subprime ARM's.

To qualify they must meet the following criteria:

Loan taken out between January 2005 and July 2007
Rate will adjust between January 2008 and July 2010
Less than 3% equity in their home
No more than 60 days late
Able to handle current payment, but not the adjusted rate

The program is voluntary, so there is no guarantee that the lender will freeze there interest rate.

If you are in this situation, you should contact your lender immediately. If they cannot or will not adjust your loan, your next step is to contact a Broker or Mortgage Banker to see if you can qualify for a FHASecure loan or to see what other refinance options are available to you.

More Lipstick for the Pig

Lakewood Lending Group, LLC — Thu, 06 Dec 2007 17:53:24 -0600

Today was the announcement of a Freeze on Subprime ARM's.

The goal is applaudable; however the solution

To qualify they must meet the following criteria:

Loan taken out between January 2005 and July 2007
Rate will adjust between January 2008 and July 2010
Less than 3% equity in their home
No more than 60 days late
Able to handle current payment, but not the adjusted rate

The program is voluntary, so even if a homeowner can jump through all these hoops their is no guarantee that the lender will freeze there interest rate.

So, who will it help, the estimates are at best 250,000 people. While that is a lot of people that will not be forced out of there house. It still does not do enough to address the problem.

Information You MUST Know About Declining Market Areas

Lakewood Lending Group, LLC — Thu, 29 Nov 2007 12:47:22 -0600

Per Fannie Mae Part XI of the Selling Guide, Lenders are responsible for the accuracy of the appraisal, and the assesment of the marketability of the property.

Take some time to click on the link below download the latest release and see if any of the declining areas are in an area you are considering purchsing. If there are any make sure you inform the appraiser to comment on it and justify and sales or significant amounts of foreclosures in the area. Expect a 5% reduced LTV, and possibly a second appraisal and an AVM.

The deals can still be done, they just require a much more thorough appraisal and are a little more time consuming.

"The subject property has been identified as being located in either an area of declining home prices or in an area where it may be difficult to assess home values. The lender should carefully review the appraisal to ensure that the appraiser has appropriately analyzed property value trends and overall market conditions to arrive at the value provided. The lender should request additional support from the appraiser if it determines that the appraisal does not accurately reflect current market conditions, (e.g. the declining property values field is not checked when market conditions suggest otherwise). Please refer to our Property and Appraisal Guideling in Part XI of the Selling Guide."

The OFHEO website was used to determine the following list of declining or moderately declining states. Subject properties in the following states require a full appraisal: Arizona, California, Colorado, Connecticut, Florida, Illinois, Indiana, Maine, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New York, Ohio, Rhode Island, Vermont, West Virginia, and Wisconsin.

http://www.ofheo.gov/hpi.aspx?Nav=275

If you go to the OFHEO website at: http://www.ofheo.gov/

Click on House Price Index, Click on Latest HPI Report

Information You MUST know about Decling Market Areas

Lakewood Lending Group, LLC — Thu, 29 Nov 2007 12:45:08 -0600

Per Fannie Mae Part XI of the Selling Guide, Lenders are responsible for the accuracy of the appraisal, and the assesment of the marketability of the property.

Take some time to click on the link below download the latest release and see if any of the declining areas are in your area. If there are any make sure you inform the appraiser to comment on it and justify and sales or significant amounts of foreclosures in the area. Expect a 5% reduced LTV, and possibly a second appraisal and an AVM.

The deals can still be done, they just require a much more thorough appraisal and are a little more time consuming.

Lesson's Learned from the Credit Crisis

Lakewood Lending Group, LLC — Tue, 27 Nov 2007 10:00:33 -0600

Education - For everyone

Everyone needs to be aware of all the products being offered in the marketplace. By having depth of the marketplace you can better advice your clients on the positives and negatives of the particular financial vehicle they are considering.

This would cause a lot of people to have to be forceful and to have a well thought out reason why the particular mortgage does not fit there overall short and long term goals.

How many people would be thanking you right now had they been talked out of there present loan.

It's not that I'm advocating a fixed rate loan for everyone; what I'm saying is there re a lot of variables that should be considered before placing them in any particular loan. The consumer should be aware of all the features benefits, negatives, indexes, escrows and how they are calculated, prepay, etc.

Reign Yourself in - Or the government will do it for You

We have already seen this happening over the last three to four months. Many more restrictions on the products: virtual elimination of stated income, attempts to outlaw YSP, Extra disclosures, E&O Insurance for all LO's, Bonds for all LO's, and that's just what we know about so far.

Attitude determines Altitude

Lakewood Lending Group, LLC — Tue, 27 Nov 2007 09:56:41 -0600

While on vacation we stopped in one of the tourist traps. You know the one with a little bit of every kind of knickknacks you can imagine. With the t-shirts with al the crazy sayings. My favorite, "The beatings will continue until morale improves." It has a very interesting corollary to today's market.

Last year when the market was soaring with no downside in site, and everyone without a care in the world. The top producers for the most part only controlled 1% of the market. The top producers have the same market and the same amount of time to work with as everyone else. It's what you do with that time that matters.

So, while some people sit around thinking the market is down. The top producers are out expanding there market share. They continue to have the attitude it takes to succeed that by working harder now it will pay large dividends in the future. Even though the market may be down a little, let's say volume is down 20%, there is 50% less competition. This means more business for those of us that want to capture it. It takes a positive attitude. No one wants to work with someone that has a bad attitude. By sitting around talking about how bad the market is isn't going to accomplish anything.

With the right attitude we will be out beating our competition that has a bad attitude. And so, "The beatings will continue until morale improves."

In a Future post I plan on posting advice on how to take advantage of this market.

The Extra Degree - How to Increase Your Business

Lakewood Lending Group, LLC — Tue, 20 Nov 2007 10:49:11 -0600

If you haven't seen the 212° short movie, you should take some time to watch it. You can view it at: http://www.212movie.com/

It holds a very simple yet powerful message. That the one extra degree of effort in business, and in life, that separates the good from the great.

At 211° water is hot

At 212° it boils

With boiling water, comes steam.

And steam can power a locomotive.

It's the One Extra Degree that makes all the difference.

Now is not the time for anyone to sit back and relax. Now is the time for everyone to go out and grow their business. Think about it while some areas the average selling price is decreasing, the competition is also leaving. With the selling price decreasing this has opened up the door to some of the first time homebuyers that thought just a year ago they couldn't afford a house, and the move up buyers have an ever greater opportunity to get the house they wanted at an excellent price.

By working just a little harder now, it will pay big dividends down the road.

Henry Ford said it best, "Whether you think you can, or think you can't ... you'r right."