What does the internet say about you?

FHA Credit Score Requirements Now a Reality

Ken Stampe iBrandPlan (iBrandPlan.com - Grow your e-Profile & Brand) — Fri, 13 Jun 2008 11:37:54 -0500

Hud released mortgagee letter 08-16 on June 11^th, 2008. In this letter, Hud is changing the FHA requirements for calculating both the Up Front Mortgage Insurance Policy (UFMIP) and the Annual / Monthly Insurance Premium (MIP).

This impact brings both an improvement in these costs for higher FICO score borrowers and/or higher down-payment transactions AND an increased cost to lower FICO score borrowers and/or lower down-payment transactions. This brings 2 definite impacts to FHA borrowers:

1) Some borrowers with FICO scores 499 and below who are not putting at least 10% down-payment will be unable to get FHA insuring and thus no FHA mortgage.

2) Borrowers with FICO scores at or above at any amount of down-payment will benefit from less expensive Up Front Mortgage Insurance Premium

If you look at the chart, I'll walk you through how to read it. The sample below is for 30 year fixed, FHA loans:

LTV

850-680

679-640

639-600

599-560

559-500

499-300

NON-TRADITIONAL

> 95

125/55

150/55

175/55

200/55

225^a/55

n/a

200/55

If the loan to value is ABOVE 95%, and you look at the FICO score range of 680-850 you see it says "125/55". What that means is the UFMIP is 125bps (1.25% of the loan amount) and the Annual MIP is 55bps (.55%). So on a $150,000 loan the UFMIP would be 1.25% or $1,875 and the Annual MIP would be .55% or $825 (so the monthly is $68.75). Currently, this loan would have a HIGHER UFMIP at 1.50% of $2,250 and a LOWER Annual/Monthly MIP at .50% of $750 annual / $62.50 monthly.

A couple of key bullet points about this change:

UFMIP will range from 1.25 percent of the loan amount for lower-risk borrowers to 2.25 percent for riskier borrowers.

No borrower who qualifies for a FHA-insured mortgage will pay more than 2.25 percent on the upfront mortgage insurance premium (UFMIP) and 55 basis points for the annual premium.

Borrowers with credit bureau scores must be risk-classified by FHA's TOTAL Mortgage Scorecard.

Those in risk categories without a premium shown are not eligible for FHA-insured mortgage financing.

The borrower representing the greatest risk to the Department will determine the premium charged. For example, if the decision credit score for one borrower is between 559-500 and the other borrower is in the non-traditional credit category, the decision credit score between 559-500 is used to determine the premium. However, if the decision credit score for one borrower is between 639-600, and the other borrower is in the non-traditional credit category, the non-traditional credit category is used to determine the premium.

First-time homebuyers (as defined below) who will be obtaining a mortgage with an LTV greater than 95 percent and whose decision credit score is in the 559-500 range are entitled to a reduction of their upfront mortgage insurance premium from 2.25 percent to 2.00 percent provided the homebuyer completes HUD-approved pre-purchase counseling.

Make sure to read regarding the FHA Streamline refinancing impacts. These are worthy of knowing which Mortgage Insurance rates to use depending on when the original loan was created.

With FHA growing from less than 3% in 2004 to an estimated 30% for 2008, the higher FICO scoring consumers who perhaps could have gone conventional in the past can now benefit from lower Up Front Mortgage Insurance Premiums in the present.

©Ken Stampe 2008

Ken Stampe is a Mortgage Lender and Author located in Dallas, TX. Read more about him at www.kenstampe.com or at www.homeloan-officer.com

Subprime Mess? Capitalize on it...Write a Book! Make a Buck!

Ken Stampe iBrandPlan (iBrandPlan.com - Grow your e-Profile & Brand) — Thu, 13 Mar 2008 02:20:39 -0500

In all fairness, I actually like the excerpts from "Greed, Fraud & Ignorance: A Subprime Lender's Look at the Mortgage Collapse". Daniel McGinn, a correspondent writing for Newsweek.com wrote a reviewof this new 'from-the-trenches' tell-all about the subprime industry. Written by Richard Bitner who co-owned Kellner Mortgage Investments, it is a review and perspective of the subprime lending mess from the inside. Kellner, a sub-prime mortgage company who took loans from mortgage brokers, went out of business in mid-2007. Richard Bitner reviews his companies experience and the lessons that can be learned and issues corrected.

feel free to click here to buy the book....

The most refreshing perspective about the subprime mess is summed up in this excerpt from the book. On a loan that Kellner was required to buy back from an investor because the borrower defaulted in the first 3 payments, Mr. Bitner reviewed the file to see what went wrong.

"As I went down the list, my thought was someone must've made a mistake. Aside from a good property value, there was not one redeeming factor to this loan. The credit stank, income was light, employment was spotty, and there was no rental history or savings to fall back on. Put all this together and it was a foreclosure waiting to happen. What the hell were we thinking closing this loan?"

Have you heard that one before? Finally, a reality check. He continues,

"I checked everything in the file against the investor's guidelines, trying to figure out the mistake. Then it hit me. We did nothing wrong. Our underwriter approved the deal, we funded it, and the investor purchased it from us because it fit their guidelines. There was nothing manipulative or fraudulent about the loan. Everything from the income to the appraisal was accurate."

There it is. In simple, straight-forward truth. Loan officer's in many cases weren't to blame nor were customers at fault. Mortgage lenders like Kellner probably should have figured it out, but relied on a perception of security because so many larger lenders and banks were doing these same loans....giving a false sense of stability. Bitner's reaction to his discovery?

"I was pissed off but I didn't know who to blame. It's not like the guidelines suddenly appeared. We'd been closing loans with similar borrower profiles for over a year. In fact, the 5% down payment product was a niche we'd been promoting to our brokers. For the first time I was seeing this product pushed to the extreme, and from a risk standpoint, it made no sense at all."

As Bitner describes it, sub-prime lending started off as a means of providing financing to a higher-risk client whereas before there was no means of financing for those people. It was still a choice. My first boss in my first job once taught me 2 things about sub-prime lending.

1) Always offer a customer choices. Don't give them one option for a 30 year fixed rate loan at 8.00% but show them a 30 year fixed rate at 8.00% OR a 3 year fixed rate at 7.50% and ask which did they feel more comfortable with.

2) In addition to rule #1 (above), always include the third option. What's the third option? That they don't have to do any loan today.

It was ingrained upon me and many others that did sub-prime lending 10+ years ago (when 10% down-payment was the LEAST a buyer could put into a transaction) that customers could and often should choose to wait and improve their credit. But ultimately, it's the consumer's choice. Otherwise, who in their right mind should be buying $70,000 SUVs? Who should be purchasing $30,000 media room packages?

Like erosion, the edges of acceptable risk and sound standards were gradually pushed until people like Mr. Bitner reviews a loan as described above and realizes things have gotten beyond acceptable risk and common sense lending.

So does Richard Bitner have a unique perspective on the situation? Perhaps. Does he have ideas and solutions for how to FIX the industry? Buy the book. One thing I do know....he has a blog....but then, who doesn't?

Ken Stampe is a Mortgage Loan Originator, Mortgage Author and Mortgage Loan Officer Instructor living in Dallas, TX. Ken provided his first client a mortgage loan in 1996 and writes about home buying and mortgages to help clients make smart home mortgage loan decisions. Contact by email at Ken@KenStampe.com

What resource do SMART home buyers use?... Mortgage Calculator Bank.com

The Best Borrowers Now Feel Interest Rate Pain

Ken Stampe iBrandPlan (iBrandPlan.com - Grow your e-Profile & Brand) — Thu, 06 Mar 2008 10:48:27 -0600

Bloomberg.com on 3/5/08 reported that the economic stress from both sub-prime mortgage loan failings and decreasing housing values is now being felt by all borrowers. The people taking out mortgages who have excellent credit and qualifications, the best borrowers, now feel interest rate pain due to investors requirements for yield on mortgage-backed securities.

"...[the] yield that investors demand to own agency mortgage-backed securities over 10-year U.S. Treasuries reached the highest [spread] since 1986, boosting the cost of loans for homebuyers considered the least likely to default.

The difference in yields on the Bloomberg index for Fannie Mae's current-coupon, 30-year fixed-rate mortgage bonds and 10- year government notes widened about 12 basis points, to 215 basis points, or 79 basis points higher than Jan. 15." read full article here

If that paragraph is confusing, let me provide some basic definitions and background to assist you in understand.

When a home owner takes out a mortgage loan, that loan ultimately is packaged with others and sold as a mortgage-backed security. A comparison can be made that investing in a mortgage backed security is very much like buying a government (US Treasury) bond. You invest $10,000 and receive a guaranteed rate of return, but the return is a lower percentage then one would expect putting money into stocks or mutual funds because there is a perception of less risk. You are supposed to get the 4% return on your investment with a bond, there are no guarantees when buying stock, but there is more potential upside.

Note the word "agency" in the first sentence? When you see "agency mortgage-backed securities" the term agency means that those securities are created either BY Fannie Mae or Freddie Mac or by another entity but the security includes loans underwritten to Fannie Mae and/or Freddie Mac underwriting guidelines. Today, with the exception of "government" loans such as the FHA, VA, USDA rural housing, etc. programs the only conventional loans to make up a mortgage-backed security that investors are willing to buy are "agency" loans.

So the article quote above is saying that "investors" - meaning those who buy "shares" of AGENCY mortgage-backed securities (bonds) are requiring a HIGHER rate of return than the US Government is paying on 10-year US Treasury Bonds. For the last dozen years, the same type of investor purchased mortgage-backed securities that purchased 10-year UST bonds. Because we are talking about agency mortgage-backed securities, the investors believed that those securities were as safe and secure as a 10-year UST bond. Therefore, the rate of return was fairly similar between the two.

A quick explanation of the term YIELD is appropriate here. Yield is the percentage earned from investing in a bond or security. If you invest $10,000 in a bond with a 4% yield you expect to earn $400. Your $10,000 "yields" $400. Mortgage industry professionals have used the 10-year UST bond yields as an indicator of interest rate movement. If the yield on a bond is HIGHER today then yesterday that is an indicator that the yield on mortgage-backed securities will also be going up.

If you can follow the mathematics that if investors require a higher return (yield) for putting their money in a mortgage-backed security then consumers have to pay a higher rate of interest. If a loan being made today at 6.00% and the yield is 3.50%, but tomorrow investors require the yield to be 3.75% you can assume interest rates for a loan being made tomorrow will be higher.

The current spread, as reported by Bloomberg of 215 basis points, is more easily understood if expressed as a percentage (2.15%). In other words, a 10-year UST bond is being purchased by investors at 3.69% yield and the Fannie Mae MBS is having to pay 5.84% in order to attract investors. This is the highest spread between the 2 since April of 2000 and is nearly the highest ever which was seen in 1986.

What this means to consumers is that even having excellent credit, job stability and money in the bank is not enough to offset concerns of securities investors. Partly this is due to a fear of further declining real estate property values. Another cause is a lack of investor trust in Fannie Mae and Freddie Mac as being equally safe as the US government. Although both agencies enjoy a status of "government sponsored entity" that's a status without definition. Investors aren't fully sure they know what the government would do if either agency were to actually fail. So when investors feel there is increased risk in an investment, they demand increased yields. On mortgage-backed securities, that means increased interest rates to the best consumers.

What resource do SMART home buyers use?... Mortgage Calculator Bank.com

Apparently I need a GROUP Therapist. Is a Doctor IN?

Ken Stampe iBrandPlan (iBrandPlan.com - Grow your e-Profile & Brand) — Thu, 28 Feb 2008 23:59:13 -0600

I'm a mortgage lender in Texas and want to be able to promote my blog articles and read other Texas oriented blogs. So I now currently belong to....

Lone Star Real Estate Professionals

Texas Real Estate

All Thing's Texas

I'm needing help with understanding how to manage my group participation and here's why. For example, take the group "description" for each group:

Lone Star Real Group = A place for those in the real estate industry and affiliated business's to network within the state of Texas.

Texas Real Estate = For the Real Estate Community of The Great State of Texas ...EVERYTHING posted here has to be about Texas or at the very least have Texas woven into the post

All Thing's Texas = A place to discuss issues, listings, trends, football ( all things Texas).

Does that help anyone? I'm still in need of some guidance because to me it seems that a post on "The Bluebonnet Festival in Nowhere, TX" would be posted in all 3 groups. Trends on coastal market values? Still all 3. Updates on the next Texas down-payment grant program?

So I read some of the articles to try and get a feel or "vibe" for each group. Apparently I'm not alone in this confusion. Take for example, the really good article by Carl Winters on Greune, TX which is posted in....

Lone Star Real Estate Professionals Group

Texas Real Estate Group

All Thing's Texas Group

or the really great article by Marchel Peterson on Property Taxes in TX which is also posted in all 3 groups. To add to my confusion, Marchel is a co-moderator of the Texas Real Estate Group!

Please understand, that I mean absolutely NO disrespect to any of the group moderators or participants. But if you read the featured article on the Lone Star Real Estate Group titled "Important Group Announcement" by Judi Morgan you see that this group in particular has suffered from lack of leadership and Judi is kindly volunteering to moderate and lead the group. Am I the only one that thinks a merger of these groups would make more sense?

So can somebody write me a scrip for prozac and help me understand why we need 3 groups that are seemingly the same?

What resource do SMART home buyers use?... Mortgage Calculator Bank.com

Wylie ISD and Cox Elementary have TRULY gone to the D.O.G.S.

Ken Stampe iBrandPlan (iBrandPlan.com - Grow your e-Profile & Brand) — Sat, 16 Feb 2008 00:33:59 -0600

On Monday February 11th, I took the day off from work and spent it at Cox Elementary School as a Watch D.O.G.S. volunteer. This spring, Wylie ISD in Wylie, TX added the program to Cox Elementary after success on other campuses last year in the district. The program which is sponsored by the National Center for Fathering was launched in 1998 by Jim Moore in response to a middle school shooting in Jonesboro, AR.

The purpose of the program is to get fathers, grandfathers, uncles, and any other male father-figures to participate on the campus of their child's school. The program firmly believes that more fathers and father-figure involvement in the student population cuts down on bullying and harrasment and most pointedly school violence. Fathers have historically taken a "back seat" to mother's involvement in PTA and other school activities. The Watch D.O.G.S. program provides an opportunity to remind their children and their kids' peers that Father's care about school and about the students.

When I arrived in the morning I was met by the school counselor, given my t-shirt which signifies to the students and faculty that I have passed a complete background check (every volunteer must complete this prior to their volunteer day). The really neat part was my son got a matching t-shirt so everyone in school knows who's dad is the D.O.G. that day. We got our photo taken and I was given a very thorough agenda for the day.

My time was spent in 45 minute increments with my sons kindegarten class assisting them in a project to write their numbers from 1-100. From there I visited a 4th grade class and worked with 5 students on converting fractions to decimal points which you KNOW the math geek I am just loved that! From there I helped a 2nd grade class do creative writing and a 1st grade class practice learning how to tell time. (that one seemed kind of odd to me because I figure most of these kids are going to live in a digital world and probably don't "need" the skill of knowing the little hand from the big hand, but hey....I'm not the teacher). I also helped 2 3rd graders with reading comprehension.

The best part is the time spent assisting with lunch and recess. Most of the adults kids see at school are obviously faculty who are there to work. Recess and lunch is a much-needed break time for teachers. So for the kids to have an adult there that was excited to be there was a big lift for them. I had so much fun during the day that I really am tempted to do it again next month. It certainly makes me excited about the things I'll be able to do once I retire.

So fathers, if your school has the program you need to suck it up and take the day off of work. You have no idea how cool your kid really is until you see them in their normal school day. Just like you should take them to your work once a year so they can see how cool you are at work.

Ken Stampe is a Mortgage Loan Originator, Mortgage Author and Mortgage Loan Officer Instructor living in Dallas, TX. Ken provided his first client a mortgage loan in 1996 and writes about home buying and mortgages to aid clients in making a smart home mortgage loan decision. Contact by email at Ken@KenStampe.com

What resource do SMART home buyers use? Mortgage Calculator Bank.com

Should Rental Properties be Titled in My Personal Name?

Ken Stampe iBrandPlan (iBrandPlan.com - Grow your e-Profile & Brand) — Fri, 15 Feb 2008 15:27:46 -0600

Great question posted on LinkedIN Answers today.

The scenario is that a military serviceman has been purchasing homes as a primary residence, with primary residence mortgage terms. In 2-3 years, the military relocates him and instead of selling that house, he keeps it as investment property. But now he is at a point of needing some real estate investment strategy and asking a very good question.

Perhaps you or someone you know is in the same situation or plans to start investing in rental real estate.

As can be seen from the responses so far, the answer varies depending on the perspective of the person answering. There is a tax perspective, a liability protection perspective, and a financing strategy perspective and perhaps others.

As mentioned by Greg Nagel in his response, by purchasing the homes as he has done in the past as owner-occupied transactions there is the benefit of getting the lowest cost mortgage financing. But the caution provided by Brian Sajdak is not to be taken lightly. When purchasing a home with a conventional mortgage you are going to sign either a mortgage document or a deed of trust depending on the state. That document is going to describe conditions under which the lender is giving you a loan. If you violate these conditions, you default on the loan even if you are paying on time.

The actual "trigger" term involved is called the "Alienation Clause" which typically states if a transfer in ownership of the property to another entity is considered as having "sold" the property and that brings about the "due-on-sale" or “acceleration clause”. The lender is within their right to demand you repay the loan upon learning of a title transfer. For clarification, an "Acceleration Clause" means the payoff of the loan can be accelerated to happen NOW and that can happen for several different reasons, not just alienation.

Some people may advise you to still transfer the property claiming that if the loan payments are made on time, the lender will "never know" about the title transfer. That advice contains a definite risk because if the transfer IS "caught" the loan will need to be refinanced or otherwise paid in full in a very short time period.

All I'm experienced to give advice on is the financial perspective, and I believe the way it is being done now provides the best overall mortgage loan terms. One last thing to keep in mind is that once a borrower has 10 conventional mortgages, that person is capped out. Conventional loans that meet Fannie Mae or Freddie Mac guidelines limit the total financed properties for a borrower at 10. Once an investor reaches that size of a real estate portfolio it is required that they come up with a commercial financing strategy.

What resource do SMART home buyers use?… Mortgage Calculator Bank.com

7 Mortgage Related Details in the Economic Stimulus Bill You Should Know

Ken Stampe iBrandPlan (iBrandPlan.com - Grow your e-Profile & Brand) — Wed, 13 Feb 2008 00:47:31 -0600

1) The new loan limits go into effect on CONVENTIONAL mortgage loans originated beginning on July 1, 2007 and ending on December 31, 2008

2) Conventional Loans can be made to the HIGHER of the current conventional loan limit ($417,000) or 125% of the area median home price as determined by HUD Secretary. So unless the area median home price in your area is greater than $333,600 you will see no increase to the conventional loan limits.

3) FHA loan limits are available for loans "for which the mortgagee (lender) has issued credit approval for the borrower on or before December 31, 2008. So it appears the FHA limit changes go into effect immediately upon enactment of the legislation.

4) FHA loans for 1-unit, Single-Family Homes, can be made up to the LESSER of 125% of the area median home price OR 175% of the dollar amount limit for HUD loans for 2008. So again, this will mainly impact only those areas with a high median home price

5) FHA loans, however, WILL be eligible to a loan amount not LESS than 65% of the conventional loan limit for 2008 which is $417,000. So 65% would be an FHA loan limit of $271,050.

6) The HUD secretary will publish a list of area median home prices and mortgage principal loan limits NO LATER than 30 days from the enactment of the stimulus package legislation

7) The HUD secretary maintains the authority to make future changes to the loan limit nationally or in targeted markets as he determines is necessary.

For a full transcript of the HR 5140 you can click HERE

What resource do SMART home buyers use?... Mortgage Calculator Bank.com

Will the Government Change FHA to Help?

Ken Stampe iBrandPlan (iBrandPlan.com - Grow your e-Profile & Brand) — Mon, 27 Aug 2007 10:45:05 -0500

Lawmakers continue to push the current administration to find more ways to help out homeowners facing foreclosure. Debate continues regarding the foreclosure rate as to the responsibility of government to step in and aid home owners who took out sub-prime adjustable rate loans. While not consistently divided among party lines, a majority of Republicans in congress feel personal accountability on the part of consumers is key and government's role is not to "bail out" consumers who made poor choices. Whereas democrats continue to avow that consumers didn't understand their choices and were victims of a mortgage industry pushing adjustable rate programs on unaware and under-informed homebuyers.

The latest push by Senator Chris Dodd (D-CT) who is Chairman of the Senate Committee on Banking, Housing and Urban Affairs was made in a letter sent August 23^rd to Treasure Secretary Henry Paulson and Alphonso Jackson the HUD Secretary. In it, Dodd urges them to allow FHA to insure home loans for people currently facing foreclosure.

"Many of these families have been victimized by ‘bad lending practices', and every effort must be made to ensure that these abusive mortgages do not result in needless foreclosures," Dodd wrote in his letter. "In addition to [FHA programs] being an engine for creating new homeowners, the program could play a very important role in saving from foreclosure American homeowners who have been taken advantage of by unscrupulous subprime lenders and brokers".

The issue at hand is changing FHA insuring guidelines to provide for FHA loans to be originated refinancing homeowners who are currently past due on their mortgage. By providing, in effect, a new sub-prime mortgage with federal government insurance guaranteeing lenders against the default of the loan.

While anyone with sensitivity can agree with Senator Dodd's desire to help people who have been "abused" by an "unscrupulous lender", the trouble with this solution is obvious.

1) Subprime delinquencies by lending to people with an inability to pay their credit obligations on time is the PRIMARY reason for the subprime market disintegrating.

Using government funds to insure loans that the REALITY turned out to be that the consumer either wasn't creditworthy or bought too much home or both seems an unsound way to use the FHA insurance fund.

2) How can you define whether a consumer was "victimized" by a lender or given full disclosure of their options, chose a bad loan for their circumstances? Who gets to make the determination as to whether we are helping Americans who were abused or enabling Americans to avoid the consequences of their choices?

It remains to be seen whether this type of change will come about. I for one am contacting my Senator asking her to speak sensibly about pushing the FHA modernization legislation but not to supplant those efforts with ideas of radically changing FHA guidelines as a "stop-gap" measure.

©2007 Ken Stampe
Ken Stampe is a Mortgage Loan Originator, Mortgage Author and Mortgage Loan Officer Instructor living in Dallas, TX. Ken provided his first client a mortgage loan in 1996 and writes about home buying and mortgages to help clients make smart home mortgage loan decisions. Contact by email at Ken@KenStampe.com
What resource do SMART home buyers use?... Mortgage Calculator Bank.com

Property Flippers – Time to REFINANCE and think Buy & Hold

Ken Stampe iBrandPlan (iBrandPlan.com - Grow your e-Profile & Brand) — Thu, 23 Aug 2007 13:36:01 -0500

Over the years I have been blessed to work with many seasoned and knowledgeable real estate investors. At the same time I've met many people starting out on the Carlton Sheets plan to wealth....or perhaps not to poverty....but either way I've met some that made it and some that lost it all.

LEGAL property "flipping" is the concept of financial investing 101....buy low, sell high. But if you don't keep in mind economics 101....supply vs. demand...you will get burned.

Right now in the Texas market foreclosures are up over 50% over last year. That means...more foreclosures, short sales and homeowners selling to avoid foreclosure. In other words...supply is UP. That drives prices down on buying these properties.

HOWEVER, foreclosure rates means the number of buyers with eligible credit is DOWN. Add to that the erasure of sub-prime loan programs and you have a marked decrease in demand or at least demand from qualified buyers.

So just because you can buy that home for $125,000 and comparable sales tell you the market value of $170,000 is that enough information? If you are only using 4 or 5 comparable sales does that really take into account the increased number of homes on the market today vs. the past 6 months? Does it really predict future market stability with changes in the mortgage business?

Here's a strategy that several of my top clients are executing with their own specific tweaks but overall the same basic perspective.

1) Cash-out refinance existing properties now to take out equity. Create as much liquidity to handle vacancies and also to take advantage of cash sales that are more available then ever.

2) Refinance existing properties with little to no equity to improve cash flow. Create a positive cash flow situation

3) Restructure rental agreements. Offer longer term agreements with incentives for staying in the property or renewing. One such idea I heard last week was that every year the tenant renews the lease, the owner will completely repaint and refloor one room of the house. So if you renew your lease at the end of that year, the investor will repaint and replace carpet in one room that both the landlord and tenant agree to. Start creating a stable of happy renters.

4) Any properties you have that you wouldn't want to keep for a year or more, now is the time to try and move them to other investors. Perhaps location, perhaps the size of the property (too small....or too large). Get other investors interested in buying it from you now. Once other investors are tapped out you may not be able to move the property.

5) Take slightly stricter review of tenants before leasing. Credit guidelines are going to be tighter for some time. Just having them rent from you for 12 months to create a positive rental history probably won't be enough in and of itself to qualify them for a home loan next year. Be more selective and don't expect a return of sub-prime programs as part of your exit strategy.

This is a great opportunity to grow your real estate investment business and when the market comes back you will be sitting on a ton of real assets and equity. Develop a strategy for today's market, not last years.

Mortgage Loan Officer Licensing Getting Tougher in Texas

Ken Stampe iBrandPlan (iBrandPlan.com - Grow your e-Profile & Brand) — Thu, 09 Aug 2007 23:37:37 -0500

For those people interested in getting a mortgage loan officer or mortgage broker license in Texas, the requirements are getting tougher....in fact they are doubling in many respects.

Effective 09/01/2007 the educational requirements for a mortgage loan officer increase from 30 hours of coursework to 60 hours. Below is a summary of the changes for loan officer licensing:

License application fee increasing from $175 to $275
Loan officers with experience can apply for an expedited license, requires a $100 additional fee
Loan officers who change their name, now have 10 days from the date of the legal name change to submit a name change request to the commissioner and pay a $25 fee

One significant change applies to applicants who have prior mortgage experience. The current code states that an applicant must have one of the following:

completed the 30 hour course
can document 18 months experience as a mortgage loan officer.

The new requirements change this to the following:

applicants requesting an exception to the 60 hour course requirement are considered applying for an "expedited license"
expedited license applicants must pay an additional $100 application fee
expedited license applicants must verify 18 months experience in the past 20 months
applicants who submit an incomplete application will not be allowed to reapply but will be declined for the expedited process and must take the 60 hour coursework.

Another change for mortgage brokers is that unless in cases of a sole proprietorship, mortgage brokerage COMPANIES must now be approved. The company itself will now be approved with a designated approved mortgage broker, duly licensed by the state. There is a $175 processing fee and a $50 fee per branch location. This goes into effect 1/2008.

I'm very pleased with the change in licensing to include the mortgage company. Under the present rules, if a mortgage broker lose his license for violating the state rules, the company continues and in fact, the same individual often stays in an ownership and management of the company getting another individual to get a mortgage broker license in order for the company to stay compliant. This has been a loophole in the past that hopefully this new legislation can close.

As an instructor, I can tell you that when the state changed from 15 hour course requirements to 30 hour courses it took about 5 months for us to get approved course materials. So if you are looking at getting your loan officer license or mortgage broker license there will be no way to fulfill the 60 hour requirement come 9/1/07 and there may not be an approved course by the end of the year.

To read all of the changes you can go to the Texas Savings and Mortgage Lending website at http://www.sml.state.tx.us/Licensing_Changes_80th_Leg.htm

What resource do SMART home buyers use?... Mortgage Calculator Bank.com

Funny YouTube Real Estate Clips? Share Them!

Ken Stampe iBrandPlan (iBrandPlan.com - Grow your e-Profile & Brand) — Thu, 09 Aug 2007 22:54:43 -0500

I teach mortgage loan officer courses at Champion's School of Real Estate in Dallas. Primarily I teach the preparatory course for loan officers getting ready to take the loan officer or mortgage broker licensing exam. It's a 10 hour, one day course and so I like to break up the sections coming back from a break with a video clip.

I came across the clip below about a year ago and while it isn't uproariously funny, it's a nice diversion and mixes up the style of course content. The clip was shot by Bill Woodall who is a local real estate investment club president.

So my question to the AR community is....do you know any more funny real estate oriented clips? Link them in the comments if you will please. I would like to find a couple of others to use for class.

Thanks in advance,

Ken

The Daily Lesson in My Daily Life

Ken Stampe iBrandPlan (iBrandPlan.com - Grow your e-Profile & Brand) — Wed, 08 Aug 2007 12:05:42 -0500

"For I have learned to be content in whatever circumstances..."

One of my favorite passages both for its promise of the reward of contentment and the descriptiveness of the situations in which I can find contentment is this passage in Phillipians 4.

I have learned that at the root of my stress and anxiety is often discontent. When you find yourself sharing your latest frustration with a co-worker or friend what are you really doing? What's really going on in my life that like a pressure cooker I need to bleed off steam when I get riled up?

Upon analyzing this it seems clear to me that I am discontent with my life. I do NOT want to be where I am right this minute. Instead, I want my relationship with God not to bring me contentment "in any and every circumstance" but rather to bring me ONLY those circumstances in which I am always content.

I've diminished God's plan for my life by rejecting and rebelling against it because it's too inconvenient, fraught with uncertainty and often beyond my ability to control the outcome. Is this faith? I think perhaps it's a glaring exposure of the thin veneer my faith actually is.

But I am encouraged when I'm reminded the passage starts with "For I have learned to be..." because it is clear that contentment....the REALITY of deep faith...is not something I am born with. It is also not something which came to me as a free gift with the holy spirit when I first believed. Instead, contentment is learned. It is the proof of putting our trust in God and finding he is trustworthy.

So every time I allow myself to consciously continue in my discontent I am delaying the lesson to be learned. I'm making it harder to be content and also requiring I continue to face the same dilemma again in the future in order for me to learn from it.

"I know how to get along with humble means, and I also know how to live in prosperity; in any and every circumstance I have learned the secret of being filled and going hungry, both of having abundance and suffering need."

What an acknowledgement of the reward of a life spent learning how to trust in the Lord. This did not come to Paul overnight and it won't come to me in capsule form either. What I must do on a daily basis is realize that when I feel worry, anxiety, stress, anger, and frustration I am being given a choice. It is up to me to recognize the emotions as an outward sign of a situation I can learn contentment in and trust in the Lord.

But can I do it? I seem to fail so consistently at this lesson.....

"I can do all things through Him who strengthens me."

Paul gives us the how at the very end, lest you should think Paul is superhuman and deceive yourself into thinking you aren't capable of learning this level of contentment. You can and you can't. With Christ's strength you can learn to trust the Lord with small and big things, to acknowledge his pre-eminence in both good things in your life and struggles. On my own, I cannot do it....but "through Christ".....

Ken Stampe

Subprime then AltA...what's an LO to do?

Ken Stampe iBrandPlan (iBrandPlan.com - Grow your e-Profile & Brand) — Wed, 08 Aug 2007 11:55:46 -0500

This will work itself out. Performance on mortgages in Alt-A securities combined with their already higher yields will draw investors back but make no mistake, the process of determining what is in a security will be different for a time and investors are going to expect more, not less or even the same information about the credit criterion of the loans in this type security.

Ultimately, who gets hurt by this spread from Sub-prime to Alt-A is those homebuyers who want to purchase a home but can't meet conventional guidelines. Without doubt, the industry had spread beyond acceptable risk, however, the result at times like these is to over-correct. The market becomes too conservative and ultimately there are underwriting guidelines that come into play which restrict homebuyers from owning.

It is important now, more than ever, for mortgage loan officers to take the approach of educating the consumer, of helping them PLAN for homeownership instead of searching high and low for that loan program that will accept them TODAY....credit warts and all. Perhaps waiting until that self-employed business is up and running is SOUND and PRUDENT advice and if we need underwriting guidelines to REQUIRE loan officers to make prudent decisions then those guidelines will restrict more than they will help.

Loan officers need to focus on their clients lack of savings and encourage them to work on creating a savings plan not only for closing costs, but also for replacing that water heater that breaks 3 months after buying the house.

If the industry proactively moves towards client planning, we will ultimately win more consumers and place better performing loans in all of the securities that we issue.

In the meantime, prepare for continually changing guidelines, lower LTV, lower DTI, and more reserve/asset requirements. Don't be surprised to see our business reach a point where manual underwriting becomes MORE valuable then it has been in the recent age of automated efficiency. The AUS just doesn't test reasonability as well and I think it is safe to say that the more non-conforming programs are going to have to stand up to the question of "does this make sense"?

For some originators, this is the time for them to leave the industry, decide upon another career. Times aren't going to improve overnight. Change has always been a constant but Rapid Change is going to become the new "norm". For those originators who choose to stick it out and work through this, the industry needs you. Your realtors and builders need you and while the end result will probably be less loans made per year, more education and licensing requirements to enter the business and more regulation and disclosures, there is one thing you can be reassured by.

Owning a home is STILL the american dream......there WILL be customers

What resource do SMART home buyers use?... Mortgage Calculator Bank.com

Gift Getting and Mortgages – A How-To

Ken Stampe iBrandPlan (iBrandPlan.com - Grow your e-Profile & Brand) — Fri, 20 Jul 2007 11:32:16 -0500

So you are going to buy that first home. You found the right house, a little fixing up and painting required, but the layout and location are just right. The sales price is in your range and you know you can handle the new payment. Now it's just a matter of calculating the cost of buying.

You sit down with your lender to understand clearly the closing costs on your transaction. Title company fees such as escrow settlement, recording, warranty deed, tax stamps, and courier expenses. Property survey, home warranty, homeowner's association transfer fee, it seems the list goes on and on. You learn that the final tally is nearly $4,000 just in costs not including the down-payment you have been saving. But you aren't concerned because your parents are giving you a $3,000 gift to help you on your new adventure of home ownership.

The $3,000 gift...while a blessing...there are steps to take in making sure the mortgage company will accept the gift and that the gift giver is prepared for the documents that will be required.

1) Determine if the $3,000 will be transferred to your account PRIOR to closing on the home or AT closing. This is very important to have determined ahead of time as it alters the documents required.

Funds transferred PRIOR to closing, follow these steps:

1) Make the date of transferring the money at least one week prior to closing. It's understandable that the gift giver wants to make sure you are going to buy this home but waiting until the day before closing will cause you fits.

2) If the giver withdraws the money into cash or a money order, they will need to provide a copy of the withdrawl showing their name. There has to be a paper trail to show who the money came from.

3) If the giver writes you a check, then you will need a copy of the check and it also needs to show the givers name on the check.

4) The gift getter, you, need to provide proof of the deposit into your account.

5) If the money is electronically transferred, you need to make sure that the wire transfer CLEARLY shows the giver's name.

6) Your lender will have a sample gift letter to use which must be signed by all parties.

Funds transferred AT closing, follow these steps:

1) A completely filled out and signed gift letter will be required prior to closing

2) The gift giver MUST provide proof they have the funds to give the gift. If they are giving you $3,000 then they need to provide a bank statement or some other proof they have that amount to give to you. Make sure the gift giver is aware of this and is comfortable supplying their bank statements to your lender.

3) Confirm AHEAD of time with the lender AND title company if the money should be sent to the gift recipient or to the title company. Some lenders will want the money given directly to the title company since it is being given AT time of closing and the recipient may not be able to get the check cashed.

While lenders can certainly have more or less requirements and some programs have restrictions on being able to use a gift, who a gift can come from, and/or the amount of the gift, these guidelines above will help you and the gift giver be prepared for the paperwork of using gift funds.

What resource do SMART home buyers use?... Mortgage Calculator Bank.com

Knee-jerk Reactions?

Ken Stampe iBrandPlan (iBrandPlan.com - Grow your e-Profile & Brand) — Tue, 03 Apr 2007 12:41:47 -0500

One of my pre-approved clients called yesterday to say that her Realtor wanted to know if I can approve her for a loan with 5% down-payment. It seems that there are increasingly more listing on the MLS with comments that 100% financing offers will not be considered. She has found 2 homes she liked but they didn't tender an offer due to that seller condition. While I appreciate the seller has the right to qualify a buyer and only wants to work with qualified offers, blanket decisions in our market seem like a major knee-jerk overreaction. This is still a buyer's market in Dallas.

I received a call yesterday from a listing agent who is calling to discuss a client of mine who submitted an offer on one of his listings. My client, the buyer, is pre-approved for 100% financing and this is NOT a sub-prime loan approval. Notice I said pre-approved and not pre-qualified. The underwriter has already reviewed and approved the client's credit, income, employment and assets.

The listing agent asked me questions which I am comfortable answering up to a point. Where did it get uncomfortable? When he asked me to disclose my clients' credit score. I told him I couldn't do that because I can't. Furthermore, what good is that information to him, other than to be PREJUDICIAL? He has no idea what programs Bank of America can offer and what our credit score requirements might be. This client could be pre-approved with a 565 credit score or a 765 credit score, but the only difference I can see in the listing agents' knowing the actual score is to prejudice the offer.

I think that Realtors need to understand that 100% financing is NOT dead. In my opinion, we've seen maybe a reduction in 15% of approvable mortgage customers due to the changes in sub-prime lending. That means that 85% of those who could have been pre-approved for 100% financing in January are STILL APPROVED. The majority of pre-approved buyers you see with 100% financing are solid, pre-approved buyers.

Now please understand that I'm comfortable talking to listing agents and in fact, think it is the listing agents' job to qualify the offer for his client. That's just smart business. Just be careful not to cross into territory where you pass on a qualified buyer due to your own misunderstanding of current mortgage availability.

100% financing is still very much alive and homebuyers shouldn't be concerned that their opportunity to own a home has gone away with the recent collapse of subprime financing. It is my job as a mortgage professional to approve my clients. It takes real estate professionals and mortgage professionals working together to make home-ownership a reality. Let's work towards the goal without bias and without eliminating qualified home buyers from the market.

What resource do SMART home buyers use?... Mortgage Calculator Bank.com

It's OK to Feel Good. It's About HomeOwnership

Ken Stampe iBrandPlan (iBrandPlan.com - Grow your e-Profile & Brand) — Sun, 01 Apr 2007 18:04:50 -0500

Subprime crumbling got you down? Foreclosure rates making you blue?

NOT ME!

I tell you, I feel great! This was a really fun month for me. Not because it was the most profitable financially but it wasn't bad. Nah, I feel great because I helped 5 families become homeowner's for the first time. This is why I went into the mortgage business 11 years ago. If you will indulge me a minute, I'd like to introduce you to one family I helped this month.

I introduce to you Okoro & Josephine and their 4 children who are now proud homeowner's in Plano, TX.

Say Hi!

Okoro called me back in November because he and Josephine had been approved by the suburban city of Plano, TX (just north of Dallas) for a grant to for first-time home buyers. Furthermore, they were looking at a home being renovated near old town Plano by a group called the Plano Housing Commission. The city had obtained a grant from the Department of Housing and Urban Development (HUD) to purchase and rehabilitate a 2,000 square foot home and re-sell it to a city resident who qualified as a first-time homebuyer.

Okoro and Josephine came to America 4 years ago from Nigeria and are both United States Citizens as are their 4 children. Okoro works in a hospital while studying for a divinity degree at night school. It is his hope to become a minister. Josephine is attending community college towards a degree as well. Their 4 children are all under 10 years of age.

Okoro and Josephine started the application process with me which included a home buyer education seminar. They gave me their paperwork and while we waited for the home renovations to be complete, we put together a loan for them to purchase the home.

The house was sold to them for $140,000 and they received a loan for $100,000 at 5.75% fixed for 30 years from Bank of America, my company. The city of Plano gave them a grant for $39,500 which they don't have to repay if they stay in the home for 5 years. The Plano Housing Corporation then gave them an additional $4,500 grant to pay all closing costs involved in financing the purchase.

So Okoro and Josephine moved into their home 2 weeks ago having paid $500 TOTAL! The final real estate appraisal was for $152,000 so they start off with over $12,000 in equity NOW and after 5 years will have over $55,000 in equity on their first home purchase. WOW!

The day after they closed on the purchase, Okoro called me at work.

"Ken, I just wanted to say thank you."

"You're welcome, Okoro"

"What do we do now?", he said.

We had talked several times weekly over 4 months and despite assurances he still thought something would go wrong and they wouldn't be able to get the house. In that time frame, paperwork expired and we had to get updated copies. Their apartment caught fire and they had to move. It seems all sorts of things took place. But on the 15^th, they bought this fantastic home and now...he wasn't sure what to do.

"Is that it? We own it?", he asked.

"Yep...that's it. Feels pretty good, huh?"

"I just can't believe we own a home".

To Okoro and Josephine, BELIEVE IT! Welcome to the "club".

What resource do SMART home buyers use?... Mortgage Calculator Bank.com

The difference between Alt-A and subprime? Understand where they go after closing

Ken Stampe iBrandPlan (iBrandPlan.com - Grow your e-Profile & Brand) — Wed, 14 Mar 2007 12:18:45 -0500

Mortgage Backed Securities PRIMER - to understand where the different 100% financing programs go...

A Mortgage Backed Security (MBS) is essentially a group of loans (often called a pool) that have similar characteristics. 500 Fixed-Rate, FHA loans would be pooled together and issued into a MBS but you wouldn't see a couple of JUMBO loans thrown in just for fun. The MBS is then rated by a third party company who audits the files, writes up a prospectus of the history of the company issuing the MBS and the type of MBS issued by that company in the past. The MBS then gets a rating which tells investors how "secure" the pool is and what rates of return to expect on their investment.

My purpose here is to share with you the different places 100% financing programs end up so you can understand the news articles you read...

It helps to keep in mind there are multiple CATEGORIES of mortgage programs that are sold into MBS:

Government Loans - FHA and VA have not changed in the past 2 weeks. FHA still offers 97% financing and VA 100% These loans are pooled into government MBS which are issued with a GNMA (Ginnie Mae) guarantee that investors won't lose money. That's why these loans continue to have investors and offer low rates of interest.
'A' Paper 80/20 Loans - These are for clients with 660 and higher credit scores (generally). The first lien is sold in a normal conforming MBS(mortgage backed security) and the second is typically held in portfolio by a large lender and in some cases sold into a MBS of equity loans. The 80% loan which is sold into a MBS is grouped with other 80% loans, 90% loans, etc. Not every loan in that MBS has 100% financing which offsets the risk. Because the lender with the second mortgage for 20% is the one most likely to lose money in a foreclosure, higher risk on these loans is usually offset by higher rates for the second lien.
Alt-A Paper 80/20 - Typically, these are 80/20 loans and include one or more non-conforming characteristics such as stated income, no income, investment property, etc. These loans are sold into Alt-A MBS and require credit scores typically 640 and up. In some cases, the first liens are even sold into conforming MBS.
100% Single Loans - These loans carry private mortgage insurance which is an insurance policy to protect against loan default. Often the charge of this insurance is paid by the borrower but sometimes is paid by the lender usually resulting in higher closing costs or interest rate to the borrower.
Sub-prime Paper 80/20 or 100% Loans - These loan programs are sold into sub-prime mortgage backed securities and there is a lot of diversity in this category. There are no standards other than those set by the market and rating agencies. If you put together a sub-prime MBS pool and it performs, then you can write more of these loans and the likelihood is that investors will buy your next MBS.
Buyers of these MBS in recent years have included Fannie Mae and Freddie Mac....no more. Also, due to a down-turn in real estate values combined with many of these loans being 2 year fixed rates, defaults are up and early payoffs are up. In other words, those that INVESTED in these securities are losing money. When that happens, it's harder to find new investors. Take FNMA & FHLMC out of the picture and you can see the crunch.

On 3/12/07 - Fitch (which is a rating agency) rated a 1.7 billion ALT-A Mortgage Backed Security of Countrywide and Indymac Bank paper and upgraded 1 class and affirmed all of the rest. What does this mean? It means that 1 year after this MBS was issued, the security is performing at or even a little above investor expectations. In other words...ALT-A paper seems ok at the moment.

Hopefully this will help you to better understand the news articles you read about the performance of mortgage backed securities. When someone says, "Lender B is still doing sub-prime 100% loans with a 680 score" you now know they aren't doing sub-prime paper because at that FICO they are probably doing ALT-A. If another person claims, "Countrywide no longer does 100% loans" you can know that isn't true. They may have stopped offering 100% sub-prime loans but they still do Alt-A, A paper and Government.

Lastly, keep in mind that not all lenders put loans into a MBS. Some lenders, mainly banks like Bank of America, Chase, Wells Fargo, have some loans they keep in "portfolio" meaning they keep them in the bank. Because of this, they can make any underwriting decision they want on these loans as only the bank and the bank's stockholders have to be comfortable with the decision to lend.

Be informed....be aware....and be prepared so you can face the changes this market is bringing us all.

What resource do SMART home buyers use?… Mortgage Calculator Bank.com

100% financing is alive and well, just not for sub-prime lenders

Ken Stampe iBrandPlan (iBrandPlan.com - Grow your e-Profile & Brand) — Tue, 13 Mar 2007 22:43:05 -0500

On Friday, Countrywide announced their maximum loan to value for sub-prime is 90%. This morning Option One announced the same limits. Also last week, New Century halted all loan operations and they were the 3^rd largest sub-prime lender nationally. So what to do with your less than stellar credit clients?

FHA loans are still a viable and competitive product. Interest rates are low and there are no pre-payment penalties or other goofy stuff which lands home owner's in trouble with changing loan payments 2-3 years down the road.
Conventional 80/20 still exist. They have more stringent qualifying criteria (680 credit scores) then what many people have been using the sub-prime loans for. ***
Conventional 100% in the My Community is a Fannie Mae program for qualifying buyers above 95% but the private mortgage insurance can sometimes be cost prohibitive. The Freddie Mac version is called Home OpportunitiesThe credit scores don't have to be as high as the conventional 80/20 but they also can't be as low as FHA will allow. Furthermore, both programs have limitations on the household income of the home buyer unless the property is located in an eligible census tract.

***update 2/15/2008 - Conventional 80/20 programs are very close to extinction. 80/15 appears to be the maximum financing going forward.

Other 100% financing options that still remain are listed below: (information below also updated on 2/15/08)

Teacher/Fire fighter/Policeman/healthcare worker - 100% financing options for people in certain professions. These programs do have PMI.

Some banks still have Low-to-Moderate Income mortgage programs for 100% financing. Because banks are required to meet government standards per Community Reinvestment Act(CRA) guidelines, there are still some programs out there for home buyers who are below certain household income limits. Some banks have pulled back from these programs providing 100% financing.
My Community and Home Opportunities which were listed above are still viable 100% financing options but again, are limited as to household income or property location.
VA loans continue to provide a much deserved benefit to our military personnel. It is more appropriate to think of the VA guaranteed loan as an entitlement or "reward" for serving our country instead of a loan program as it is very specific in who is eligible to use this program.

These are changing times and it is difficult for everyone to accept the speed at which loan programs are changing. Not only is there volatility in the interest rate markets, but also in what programs are available to consumers. Now, perhaps more than ever before, a real estate professional should be aligned with ONE mortgage broker / loan officer AND ONE direct mortgage banking loan officer. The mortgage broker has the flexibility to move the transaction between lenders in response to sudden changes. The direct mortgage bank loan officer is going to have access to portfolio and/or CRA programs that the broker is not able to access. By utilizing a dual strategy, realtors can give their clients great service in recommending a mortgage loan professional.

What resource do SMART home buyers use?... Mortgage Calculator Bank.com

Waiting on that new home to be built? 5 things you should do

Ken Stampe iBrandPlan (iBrandPlan.com - Grow your e-Profile & Brand) — Mon, 12 Mar 2007 12:24:47 -0500

For many home-buyers, a new property is an exciting way of going into a new home. There has been a tremendous increase in first-time homebuyers who started with new construction homes. Because of this, you may not be sure of what to do while the home is being built. Here are 5 steps you need to take during construction:

1) - Call homeowner's insurance companies. You have the extra time, so shop around for your homeowner's insurance. I'm in Texas and that is especially good advice here. Many companies got out of the homeowner's insurance business 4-6 years ago during the "black mold" scare and are recently adding new and improved policies. Call around to more than one company and make sure you know the size of the home, number of fireplaces, how much of your home will have carpet vs. tile, and if you will have a security system.

2) - Call your mortgage loan officer weekly. If you are making a 10% or greater down-payment then perhaps every other week is appropriate. If not, and especially if you are doing 100% financing, call your loan officer every week. Why? Loan programs are changing very rapidly right now. If your loan officer is a broker who is placing your loan with a mortgage lender you want to make sure that the loan is still available. When lenders change their guidelines it can happen suddenly. When you talk to your loan officer, ask what interest rates are doing, ask what conditions remain on your loan, and ask if there is anything you can help the loan officer get to further your approval with the undewriter.

3) - Schedule a visit with the builder weekly. Due to liability issues, most home builders will not allow you to show up on the worksite unescorted and without protective headgear. Many people may break this rule, but understand that you have liability if something breaks while you are there. A homebuilder friend of mine told me of a client who came to look at the house and broke the stair-rail which was not fully set. They charged the home-buyer the cost of the repair because he shouldn't have been in the home unescorted at that time. So weekly, have your builder or sales person walk you through the home. Look at EVERYTHING. It is appropriate for you to have lots of questions and ask them until you understand the answer. Consider bringing someone with you who is knowledgable in construction. By showing an active and on-going interest in the home's construction you can catch issues early, you can make changes (for a fee) if you see something that isn't exactly how you want it, and you can enjoy the PROCESS of this home you will someday move into.

4) - Hire a home inspector. You should do this before the foundation is poured. If you didn't, then hire one right now before the sheetrock is up. Too late for that? Hire one anyway. If you hire a property inspector early on, they will make sure the work was done correctly BEFORE the foundation is poursed, BEFORE the sheetrock goes on the wall, BEFORE the final city inspection is done, and BEFORE you close on the home. You may think the city inspector will take care of these things for you, but that is often not true. City inspectors vary tremendously from city to city and you have no recourse if they don't do a thorough job. Hire someone who sees you as their client to look for the things that need to be corrected, changed, etc. If nothing else, you will get a lot of piece of mind from knowing things were built well.

5) - Meet the future neighbors. Why not? You are going to live next to these people for years. Now is the time to find out if you can't stand them. Knock on doors and introduce yourself, if you find out the person next door is someone completely freaky you can still get out of this home. After closing....it's too late.

Lastly, remember to enjoy the process and not be too stressed out by it. Keep in mind that if you built a pre-existing home it has many of the same flaws but you just can't seem them because the roof, brick and sheetrock is already there.

What resource do SMART home buyers use?... Mortgage Calculator Bank.com

My Top 7 Christian Books List

Ken Stampe iBrandPlan (iBrandPlan.com - Grow your e-Profile & Brand) — Mon, 15 Jan 2007 14:54:46 -0600

I know lists are usually top 10 or 3, but 7 is a biblical number so here's my top 7. Broker Bryant Tutas and I are commenting back and forth about our preferred books on his MLK Tribute blog and I thought a "top list" was in order. Please comment and add your favorites!
•1.       What's so Amazing About Grace by Philip Yancey - I've read this book at least 4 times as it grounds me in the reality that there is "nothing I can do to make God love me any more and nothing I can do to make God love me any less".
•2.       The Case for Christ by Lee Strobel - an investigative reporter and jew, Lee Strobel is shocked when his wife becomes a Christian and relates his own path to believing in Christ using the investigative approach he used as a crime reporter.
•3.       Your God is Too Safe by Mark Buchanan - This book challenges a mature Christian to question if they have possibly marginalized God into being a "pet" God who is there just to answer our prayers like some kind of magic genie. Don't think this is you? I didn't either until I read the book.
•4.       More Than Meets the Eye by Dr. Richard Swenson - Both a Physicist and Medical Doctor, this book uses both disciplines of science to prove the existence of God. Heavy reading but awesome proof.
•5.       Blue Like Jazz by Donald Miller - told in a journal format, this is a folksy, modern-era view of Chrisitianity. Mr. Miller strips suburbian pretense and gives a real-world view of Christian discipleship
•6.       Living on the Ragged Edge by Dr. Charles Swindoll - This study of Ecclesiastes reveals the myths in believing we need more...more money, better jobs, etc. Solomon had more of every worldly item then any other human ever to live and wrote Ecclesiastes as his summation of all he learned.
•7.       The Bible by God, through his people - Divinely inspired, the bible is the most important book in a Christian's bookcase. Most people are bothered by those passages of Scripture they do not understand, but the passages that bother me are those I do understand. --Mark Twain
Like I said, please comment and add your favorites.
Ken

My Favorite Christian Audio

Ken Stampe iBrandPlan (iBrandPlan.com - Grow your e-Profile & Brand) — Mon, 15 Jan 2007 12:53:17 -0600

Perhaps you have heard this before, perhaps not. Either way, It's worth listening to at least once a month. This gets my juices flowing more than anything else. Enjoy!

link to the audio in either RealPlayer or MP3 format

My King

Dr. S.M. Lockridge

My King was born King. The Bible says He's a Seven Way King. He's the King of the Jews - that's a racial King. He's the King of Israel - that's a National King. He's the King of righteousness. He's the King of the ages. He's the King of Heaven. He's the King of glory. He's the King of kings and He is the Lord of lords. Now that's my King. Well I wonder if you know Him. Do you know Him? Don't try to mislead me. Do you know my King? David said the Heavens declare the glory of God, and the firmament show His handiwork. My King is the only one whom there are no means of measure can define His limitless love. No far seeing telescope can bring into visibility the coastline of His shore of supplies. No barriers can hinder Him from pouring out His blessing. Well, well, He's enduringly strong. He's entirely sincere. He's eternally steadfast. He's immortally graceful. He's imperially powerful. He's impartially merciful. That's my King. He's God's Son. He's the sinner's saviour. He's the centrepiece of civilization. He stands alone in Himself. He's august. He's unique. He's unparalleled. He's unprecedented. He's supreme. He's pre-eminent. Well, He's the loftiest idea in literature. He's the highest personality in philosophy. He's the supreme problem in high criticism. He's the fundamental doctrine of proved theology. He's the carnal necessity of spiritual religion. That's my King. He's the miracle of the age. He's the superlative of everything good that you choose to call Him. Well, He's the only one able to supply all of our needs simultaneously. He supplies strength for the weak. He's available for the tempted and the tried. He sympathizes and He saves. He's strong God and He guides. He heals the sick. He cleanses the lepers. He forgives sinners. He discharged debtors. He delivers the captives. He defends the feeble. He blesses the young. He serves the unfortunate. He regards the aged. He rewards the diligent and He beautifies the meek. Do you know Him? Well, my King is the key of knowledge. He's the wellspring of wisdom. He's the doorway of deliverance. He's the pathway of peace. He's the roadway of righteousness. He's the highway of holiness. He's the gateway of glory. He's the master of the mighty. He's the captain of the conquerors. He's the head of the heroes. He's the leader of the legislatures. He's the overseer of the overcomers. He's the governor of governors. He's the prince of princes. He's the King of kings and He's the Lord of lords. That's my King. Yeah. Yeah. That's my King. My King, yeah. His office is manifold. His promise is sure. His light is matchless. His goodness is limitless. His mercy is everlasting. His love never changes. His Word is enough. His grace is sufficient. His reign is righteous. His yoke is easy and His burden is light. Well. I wish I could describe Him to you, but He's indescribable. He's indescribable. Yes. He's incomprehensible. He's invincible. He's irresistible. I'm coming to tell you, the heavens of heavens cannot contain Him, let alone a man explaining Him. You can't get Him out of your mind. You can't get Him off of your hands. You can't outlive Him and you can't live without Him. Well, Pharisees couldn't stand Him, but they found out they couldn't stop Him. Pilot couldn't find any fault in Him. The witnesses couldn't get their testimonies to agree. Herod couldn't kill Him. Death couldn't handle Him and the grave couldn't hold Him. That's my King. Yeah. He always has been and He always will be. I'm talking about He had no predecessor and He'll have no successor. There was nobody before Him and there'll be nobody after Him. You can't impeach Him and He's not going to resign. That's my King! That's my King! Thine is the kingdom and the power and the glory. Well, all the power belongs to my King. We're around here talking about black power and white power and green power, but it's God's power. Thine is the power. Yeah. And the glory. We try to get prestige and honour and glory for ourselves, but the glory is all His. Yes. Thine is the Kingdom and the power and glory, forever and ever and ever and ever. How long is that? And ever and ever and ever and ever. And when you get through with all of the evers, then, Amen.

Belated Self-Report of Lunch with Texas' Top ActiveRain Blogger

Ken Stampe iBrandPlan (iBrandPlan.com - Grow your e-Profile & Brand) — Thu, 11 Jan 2007 22:38:05 -0600

Two weeks ago I had the pleasure of sharing sushi with Donna Harris, ARs top real estate blogger in Texas. I often enjoy her passion and energy on her blog and she is the same dynamo in person. Lunch was great and it was fun to convert an on-line acquaintance to a face-to-face industry partner.

After our lunch it really made me wonder why more people in the Dallas real estate and mortgage business aren't involved in Active Rain. Both Donna and I have people we invited to join AR who either never joined or never even got their profile setup.

What does that say about you as a professional to not even setup a profile? If a consumer went on-line and found your profile what would that say about you?

Nonetheless, I'm still at a loss to understand why people visit AR and don't want to get involved. There are plenty of different personality types here. We have members from all over the country, in all different professions. And look at the opportunity to get internet exposure! Whether you care about blog rankings, there's value to the geographical ratings. Right now, Dallas County has 99 members and 5th place is 3,549 points! I'm pretty sure that by creating my profile, linking Active Rain to my other sites and writing 5 blog posts I was at or near that point total. How could someone join and NOT see the potential?

Florida has 2,111 members in ActiveRain and Broward County is the largest with 285 members. and you don't even need 10,000 points to be in the top 10. Wyoming is the other end of the spectrum. Want the top spot? It'll only take you 1,708 points to be the top blogger in the state. Don't you get 1,707 points just for reading and commenting on Bryan Tutas' posts for what...1 week? (25 points x 10 per day x 7 days = 1,750...I know I'm a math geek).

So while Donna and I enjoyed our cajun rolls at BlueFish, we will continue to blog and post and post and blog. We'll continue to scratch our heads wondering why so many of our peers just don't get it.

What resource do SMART home buyers use?... Mortgage Calculator Bank.com

UPDATE Banco Popular Closing Wholesale Lending Unit

Ken Stampe iBrandPlan (iBrandPlan.com - Grow your e-Profile & Brand) — Thu, 11 Jan 2007 10:31:26 -0600

Banco Popular, the largest lender of ITIN loans has announced Tuesday they will no longer be making mortgage loans in the United States. As part of a restructuring effort, the Puerto Rican based bank is closing wholesale lending operations in January 2007.

I called my friend who owns a mortgage company that caters primarily to hispanic customers and asked his impression and it was news to him. He hasn't heard anything directly from Banco even though the announcement was made on Tuesday.

Brokers catering to the hispanic client will find this a blow to their mortgage lending program selection. Currently, Citibank through its retail lending channel is the largest source of financing ITIN lending available once Banco departs the market place.

Ken Stampe

**UPDATE** - 1/12/2007 - it appears I overreached in my assumption that there was only one Banco Popular wholesale lending division as the on that is closing never had operations in Texas.

"I just heard from Carlos Sanchez, the owner and president of Maxima Financial, a mortgage brokerage firm in Dallas, TX who specializes in ITIN lending. Mr. Sanchez' email is included below:

"OK here is the scoop....

Banco Popular ITIN program actually represents a significant percentage of BPPR profits and not only they are not closing but they are rolling out more aggressive program I February.

BP does not have Sub-Prime wholesale program (non-ITIN) here in Texas but it does in other states, it is these operations they are closing. The division head is retiring and about 600 out of 2500 employees in the division are being offered severance packages.

From my experience with BP in PR, they will be either offer alternate jobs or a nice severance package.

Anyways, ITIN program is alive and growing.

Regards and thanks for the heads up!"

Carlos J Sanchez

President

What is an ITIN loan?

Ken Stampe iBrandPlan (iBrandPlan.com - Grow your e-Profile & Brand) — Thu, 11 Jan 2007 10:25:31 -0600

In the aftermath of 9/11, Congress passed the Patriot Act which changed a lot of little things in a multitude of areas. One significant impact was the merging of databases between the IRS and the Social Security Administration. The result of that merge was an identification of the vast number of illegal immigrants in this country and a better insight into their financial situation.

Prior to the merger, an illegal immigrant would pay for a fake social security card or borrow someone else they knew in order to get employment. If the employer deemed the information to be valid, they put that person on the payroll. Each pay period, the employee has social security withholding taken out of their check and the employer pays the required matching funds. This money was sent to the social security administration who kept a database of money paid into them and by whom.

Taxes were also taken out of those checks and paid by the employer to the IRS. The result of the merge was that the IRS found out how many people had been paying taxes using social security numbers that didn't exist. From that pool of people they could further deduce who were homeowners, but the mortgage company reporting interest paid for that same person.

The IRS didn't want to tell tens of thousands of tax payers to stop paying because of their use of an invalid social security number so they sent a notice to employers requesting their employees with invalid social security numbers fill out an application for an Individual Tax Identification Number (ITIN). This way people who had been using invalid social security numbers to work in the US could continue working under a valid ITIN number.

Another off-shoot of this discovery was that the IRS sent notices out to mortgage loan servicers telling them which borrowers they have were using invalid social security numbers and requesting them to get with their clients to get the ITIN number so that the mortgage interest statements sent to homeowners and the IRS were done under a valid ITIN number. Now mortgage servicers could see how many clients they had who were potentially illegal immigrants and better understand the types of homes they owned, where they lived, what they earned, etc. This information continues to be analyzed today.

Banco Popular is a bank based in San Juan, Puerto Rico who has made mortgage loans to people based on their having ITIN numbers and not valid social security numbers. Banco is by far the largest lender in this segment. While often criticized as supplying home ownership opportunities to people illegally in the United States, mortgage brokers and lenders claim that there is no law against lending to people of foreign citizenship. There are no laws forbidding foreign ownership of property in the United States and thus, Banco Popular through their wholesale mortgage division has expanded their loan portfolio.

Applicants have to show a 2 year history of employment and of filing a tax return to the IRS, but do not have to have established credit histories. Alternative payment history such as cancelled checks for apartment rents, utilities, etc. can be used in lieu of a credit report.

ITIN lending is primarily used in the Hispanic community and it's no secret that a majority of these home buyers are living and working in the United States illegally. Still, it remains a lawful activity to provide home loans to these applicants.

Added for clarification - I do not offer ITIN home loan programs and this article is not an endorsement of those programs, nor is it a solicitation for applicants.

Kim Boyko and Ken Stampe Announce the Launch of HomebuyerCoaches.com

Ken Stampe iBrandPlan (iBrandPlan.com - Grow your e-Profile & Brand) — Sat, 06 Jan 2007 11:14:04 -0600

We are pleased to announce the launch of our new website at HomebuyerCoaches.com to help promote the homebuyer education seminars we host in Dallas, TX. The site initially is designed to promote and inform potential attendees of class dates and times and allow for easier registration for the FREE Home Buyer Education Event.

Eventually, we hope the website will be a place that past attendees continue to visit for informaiton, to ask questions and to share their stories on buying a home. "We chose a blog format instead of a static webpage format to promote more opportunity for discussion and exchange of information", according to Ken Stampe.

Attendees to the Home Buyer Education Seminars are given an overview of the home buying process and home financing process which should prepare them to shop for an select a Realtor and Lender. "Someone who completes our course should have a great idea of the next 5-10 things they need to do to buy a house", states Kim Boyko.

If you are interested in buying a home in Dallas, TX or the surrounding DFW area we encourage you to attend our seminars. Please visit us on-line for more information at HomebuyerCoaches.com

Kim Boyko, Realtor Ebby Halliday Realtors

The Realtor with a Heart! Among other things, Kim is a conscientious person. Every time Kim assists someone in buying or selling a home, she donates 5% of her commission to charity. Which one? She asks her client to pick the charity of their choice. It's Kim's listening skills that really delight her clients. She is passionate about working with homebuyers who have lots of questions. That doesn't mean just first-time homebuyers! Anyone buying or selling a home who wants a counselor and advisor as their Realtor is a great fit with Kim.

Ken Stampe, Mortgage Lender

Ken is a teacher and coach whether it be boys soccer, real estate finance, or sunday school. He has coached over 200 families in purchasing a home. Ken feels that coaching is the best description for what he does, "Coaching involves understanding the needs, strengths, and goals of your client and then putting them in the best position to succeed." Helping clients involves listening AND understanding where people are coming from. "While there are basic principles of finance you can follow, it takes a real comprehension of where a family is at and where they plan to go financially to give them the best mortgage."

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**UPDATE** Banco Popular Closing Wholesale Lending Unit

What is an ITIN loan?

Kim Boyko and Ken Stampe Announce the Launch of HomebuyerCoaches.com

UPDATE Banco Popular Closing Wholesale Lending Unit