Kevin's Blog

Wanted - Participants for the Relay for Life of Chelan and Douglas County 2008

Kevin Nelson (Discover NCW Mortgage) — Wed, 14 Nov 2007 01:44:14 -0600

We are actively seeking captains and participants for the Relay for Life of 2008. Information can be found at http://www.wenatcheerelay.com/.

Relay for Life is an American Cancer Society fundraiser with over 3.5 million participants worldwide who help raise money for cancer research and are committed to eliminating cancer in our lifetime. At events in 4,800 communities nationwide, teams of families, friends and coworkers join together to CELEBRATE the lives of those who have battled cancer, REMEMBER those lost and FIGHT BACK against a disease that takes too much.

If you are interested in participating, I can be reached directly at 509-860-7197 or kevin@kevinnelsonbiz. I am the Online Chair committee member for both the 2007 and 2008 Relay for Life.

Relay for Life of Chelan and Douglas County Info

Kevin Nelson (Discover NCW Mortgage) — Wed, 10 Oct 2007 16:58:05 -0500

I am the Online / Technical Chairperson for the Relay for Life of Chelan and Douglas County, WA., set to take place in May of 2008. This is an American Cancer Society sponsored event.

Our event is set to kickoff October 18th form 6:00 to 9:00 PM at the Red Lion Hotel in Wenatchee. The kickoff is a great place to get together if you would like to learn about the Relay for Life and have any questions about participation. We will also have a guest speaker and plenty of entertainment.

We are currently seeking corporate sponsorships and recruiting teams as well. Sponsorships include your branding on all of our marketing material.

Last year, we had our most successful event to date and raised over $150,000 in donations and nearly 700 participants!

I have posted most of the information and an event calendar on a site I built for the cause, www.wenatcheerelay.com.

Please email or call with any inquiries!

"It's About Being a Community that Takes Up the Fight."

What, me worry? No!!! And you shouldn't either!

Kevin Nelson (Discover NCW Mortgage) — Thu, 27 Sep 2007 23:50:33 -0500

You've all hear the news by now. There has definitely been a change to mortgage lending, but is it really that bad?

Nearly every day, I receive a call from clients or business partners asking "How does this affect me?" My answer? It doesn't. My business partners tell me, "this banker or loan officer was in the other day to tell us what kinds of loans we can not do anymore and it has the entire office worried."

In my experience as a loan originator, or a salesperson if you will, what is accomplished by this approach? I don't understand it. My response is just the opposite. The positive approach is the only way. Anyone knows, whether it's is sales or just an outlook on life, a positive attitude is always the best. Is it really a coincidence that your doctor tells you better outlooks and better health endure? It's not.

I am committed to my career, clients and associates. When they have concerns, it's my turn to come out ahead, and better yet on top. Need some encouragement? Call me. Tough loan or problems with another lender? Call me. Take a step in the right direction.

P.S. I have some great referral partners with similar goals and attitudes if you need them.

How Much Of A Mortgage Can I Afford?

Kevin Nelson (Discover NCW Mortgage) — Fri, 10 Aug 2007 12:16:32 -0500

This seems to be a question that I hear very often. Here are a few tips:

For most homeowners, the monthly housing costs should run no higher than 28% of your gross annual income - this is commonly referred to as the 'front end' debt ratio. This payment would include the principal and interest amount of your mortgage, the monthly real estate taxes, hazard insurance and mortgage insurance, if applicable. All of these payments can be bunched into one payment.
The second guideline is the 'back end' ratio, or the mortgage plus all other debt like credit cards, vehicle loans, student loans, etc. This ratio is 36%.

When looking for a new home, it is always best to save some money for a down payment and closing costs as well. Typically, a lender or bank would like to see a minimum of 5% down although there are many first time home buyer programs available that offer 100% financing.

Also remember when looking at a home there may be other factors to consider besides debt ratios:

How much will closing costs be?
How many payments will I have in savings when the loan closes?
Are there any repairs that would need to be done to the home after the sale?
Are there any major purchases that would need to happen after closing, such as appliances?

I hope this answers a few questions and please feel free to contact me if you have any specific requests. For your convenience, I do have mortgage calculators located on my website. Click here to try them out:

http://kevinnelson.biz/calculators.php

Mortgages and liquidity - ALT A Loan Problems Explained

Kevin Nelson (Discover NCW Mortgage) — Mon, 06 Aug 2007 12:26:51 -0500

Anyone who has been watching the media withing this last week saw some big changes in the mortgage industry, including the all of a large national mortgage lender - but then again, we all like placing our loans twice, don't we? If we are lucky, we won't have to do it a third time.

You can read about the lender here:

http://www.msnbc.msn.com/id/20144277/

The articles refer to 'liquidity' of the loans, which I thought I would offer a little insight to.

In many cases, lender will transfer a mortgage by selling to another lender. With a non-conforming, or ALT-A loan, these mortgages don't always fit the mold of conventional financing. Myabe the loan amount is too large, it might be an interest only adjustable mortgage or non traditional documentation, llike stated income or no income and asset disclosure.

When these loans are sold to an invester, a 200k mortgage may be bought for 202k. With the increase in foreclosure rates, a liquidity problem has arisen, which means that 200k loan is being bought by the investor for less than the principal amount, like 198k, resulting in a loss for the initial lender.

As a result, rates spike, programs are restructured, and credit and down payment requirements are greater.

For example, I received an email that says they will no longer finance first time home buyers without a minimum of 10% down. In my opinion, this is one extreme and will level out in the future.

Keep watching my blog for updates and please email or post with any questions or comments.

2 Year Adjustable Mortgage Getting the Boot?

Kevin Nelson (Discover NCW Mortgage) — Wed, 18 Jul 2007 17:02:09 -0500

Is this the start of a trend?

My inbox is full today - mostly with subprime lending news. Do to market conditions, lenders are starting to drop their 2 year adjustable programs and extending them to at least three years.

I have heard many different reasons. Lack of profit, lack of time to build equity, etc. Really it's simple. Why would a lender want a loan that can't be sold on the secondary market?

Here is the article:

http://blownmortgage.com/2007/07/16/option-one-eliminates-the-228-subprime-arm-loan/

This just shows one lender. I have a short list I could add to it as well.

Take a quick look and leave some comments. I really don't see how this could be a bad thing. After all, it is the interest of our clients that we focus on. Sure it's nice getting a new loan every two years from another refinance, but what value does this offer to a homeowner? I don't see any.

Vista & Encompass

Kevin Nelson (Discover NCW Mortgage) — Thu, 07 Jun 2007 15:42:28 -0500

Finally back to business and the blog with a little advice for those of you thinking about uprading to Vista.

MAKE SURE YOUR LOS SUPPORTS IT. Most don't, and I found that one out the hard way. Our company is moving from Genesis to Encompass. Genesis is absolutely supported with Vista and Encompass is on the way. The newest release, version 3.0, will take care of the issues.

I first received the CD to install the software, which does not work for compatibility. It needs to be downloaded from the Ellie Mae website through a link and patched with another couple of downloads.

Even after all of this, I could still not access EPass and Desktop Underwriter. It took three weeks from there until a fix was available. The fix is an ocx file download to replace another within Vista and then registering the file. No problems since.

I know others will have the same problem I did, and if you are into the tech stuff like I am, hop on board and email me if you have any questions. Good luck to all!

Life Is too Short...

Kevin Nelson (Discover NCW Mortgage) — Wed, 07 Mar 2007 16:55:18 -0600

So today I was reading throught a few blogs and came across one titled "9 reasons why I hate people".

I don't understand it - it was a list of comments that people do out of nature, and every comment ended with slander. This person does this, so he's a #$%#. This person asked me this, he's a loser.

What is the point in treating others this way? Are you entitled? Are you holier than thou? I've burnt personal relationships before on many occasions due to racial comments. Always have, always will. Talking sh#t about someone because you think you are better is just as bad in my opinion. There's just no need for it.

Here's a thought - why don't you come up with nine reasons to appreciate other people. Here are mine:

Everyone is an individual - what fun would it be if we weren't?
Other people have helped me to succeed and be where I am today.
I have learned from negative relationships, both professional and personal (that's a good thing).
Some of my best friends are not the most intelligent - however, I am not the one to judge, and these people seem to be the most loyal. Sure wouldn't think of calling them losers.
I have a great place to work - thanks to the people I work with.
Good friends offer to help when you've had a bad day - nothing more to say about that.
Other people make me laugh.
Other people make you laugh.
Other people motivate me to help people who are less fortunate.

Maybe I took the blog I read too seriously - besides, I did receive a rebuttal saying it was posted in the joke section.

Maybe it was intended to be a joke. Seemed a little too cynical to be one. Perhaps it is just not my kind of joke.

Guess I'm the dumba$$ for not noticing, huh?

Overstated Home Values Not as 'localized' as You May Think - A Follow Up...

Kevin Nelson (Discover NCW Mortgage) — Tue, 06 Mar 2007 12:06:36 -0600

This information comes from the National Association of Realtors for Quarter 4 of 2006:

NAR 4th quarter 2006 home prices
Metro Area		Median Price 4Q 2005 (000s)	Median Price 4Q 2006 (000s)	% Change (1-yr)

U.S.	$225.3	$219.3	-2.7%
NORTHEAST	$281.7	$274.6	-2.5%
MIDWEST	$168.9	$161.8	-4.2%
SOUTH	$188.7	$181.7	-3.7%
WEST	$353.6	$355.1	0.4%

As part of its quarterly survey, the National Association of Realtors reported a 2.7 percent decline in prices in the fourth quarter compared to the fourth quarter of a year earlier. That's the biggest year-over-year drop on record.

In addition, 73 markets of 149 tracked reported a decline in prices. That decline was far more widespread than in the third quarter, when only 45 markets reported drops.

But I'm just a lender...

Another One Bites the Dust - Get Your Loans Funded NOW!!! (and a great link).

Kevin Nelson (Discover NCW Mortgage) — Mon, 05 Mar 2007 17:34:45 -0600

Here is the great link: http://ml-implode.com/

31 Lender Under - How Many More Can We Lose?

Same story when I come in to work everyday. One lender calls to tell me of three others shutting down for business or being bought out. He wants my to pilfer my pipeline. I usually give the same canned answer. "all of my loans are conforming. Thanks anyways".

The interesting thing to me is the effect this has on all of the advertising we hear about - as a lender I constantly get emails and calls regarding the current boom of adjustable rate mortgages setting to expire. You've all heard the ads.

A large amount of these buyers are subprime (not all). So what happens when this subprime buyer doesn't make his payment on time? The statistics say 10.1% of these loans are participants in mortgage lates. This buyer can no longer refinance his loan in most cases (investors don't like late payments).

I have seem adjustments increase mortgage payments by over $400.00 on numerous occasions. It is very difficult for homeowners to adjust and in many cases this leads to foreclosure.

To make things even more difficult, the value of homes is dropping in many areas of the US, also making it difficult to refinance with timely payments. We should all be thankful we live where we do. #2 city in the nation in home value appreciation (haven't you read today's Wenatchee World?).

I must say thanks to Fannie Mae and Freddie Mac for making my job a little easier. They seem more than willing to adapt their loan programs and make it easier for both the lender and the consumer - adding 40 year terms, interest only loans, etc.

Now I just need to figure out how to replace the 4 subprime lenders I lost from this list...

http://ml-implode.com/

Before You Lose Track of Time...

Kevin Nelson (Discover NCW Mortgage) — Mon, 05 Mar 2007 15:48:04 -0600

Don't forget to update your computers for the change in Daylight Savings Time.

With this event occuring 4 weeks earlier than usual this year, it will throw off the clock on you computer. Not a big deal until you are an hour early for your next appointment (it will put your calenders / Outlook out of sync as well). Maybe this would be a blessing for some...

Here is the link for the updates: http://support.microsoft.com/gp/cp_dst

And just in case someone in here uses a Mac: http://docs.info.apple.com/article.html?artnum=305056

If you have any questions, please post or email. Thanks everyone!

Finally...The Secret to Success in Real Estate in Wenatchee...

Kevin Nelson (Discover NCW Mortgage) — Wed, 28 Feb 2007 23:55:24 -0600

...and it takes a local mortgage originator to figure it out.

If you read the Seattle PI on Sunday of this past week you learned this:

Chelan and Douglas County are in the top 5 areas of growth for Washington State
Chelan and Douglas County populate approximately 105,000 people
Our growth has been approximately 14% (mostly retirees)
Our median home sale price is $239,000
Almost all of the growth areas contributed new construction as a large growth factor

So I have to ask this...our valley's median income does not support a $239,000 loan.

Where do we get our down payments?

Retirees? (Most are not from here...good luck. Heard of a reverse mortgage?)
Premium pricing? (please forgive me brokers)
Seller Paid Costs and Prepaids (sorry sellers, just seems to come up more and more in conversation. Don't blame your Realtor).
Interest only loans (thank you Fannie Mae for the recent enhancements)
Forget down payment...I want a $1200 rent payment (works for some people...I need as many tax deductions as I can find).

The solution is simple and I will start it right away. For all of the general contractors I work with I will call them and tell them to lower their prices...last August you could buy new for $185,000. I recently closed ~6 new construction for ~$190,000 and the are being flipped for a profit. Is our market overpriced? You're the professional you tell me.

Lesson for the Week - Listen to Your Clients (Buyers and Professionals)

Kevin Nelson (Discover NCW Mortgage) — Tue, 20 Feb 2007 13:02:33 -0600

One of the first things we learn as professionals in our business is to listen to our clients. If that is true, then why is it not done by so many?

Here is an example: In a recent dealing with a Realtor, the process was moving along on schedule until the closing. At this point, I found myself answering the same questions over and over (regarding closing date) and thinking to myself...I hope my clients don't think that I don't listen to them.

It is very easy to get wrapped up in the day to day happenings and neglect things that require attention, whether it is remembering a name, a closing date, a phone call - what may not be a top priority for you may be to someone else and it is our job to treat it that way. Pen and paper works very well.

At first I felt frustration with the situation and decided to take advantage and use it as a lesson and learn from it. Maybe someone else could do the same.

And yes, the loan closed on time. The title had all of the required documents three days earlier - I don't believe in late closings.

Realtor Update on the Previous Blog (Very Common Loan Officer Frustrations)

Kevin Nelson (Discover NCW Mortgage) — Thu, 15 Feb 2007 13:32:42 -0600

Regarding #2 and not paying off charge off and collections;

Many LO's will agree, this is a tough point to get across to your clients - do not pay off charge offs and collections.

As if our job wasn't detailed enough, why add more paper work to the mix? Here is an example that I came up with on a refinance loan - a family member.

At origination my client says "we would like these three credit cards paid off at closing."

Sounds easy. A couple of days before close, they inform me they decided to write a check and pay off two of the accounts to 'make things easier'.

Easier? Hardly. This is why. We now need proof of payoff. Cancelled check, statement showing no balance, etc. It make a lot more work for the client and the originator, and if this loan is a purchase loan over 100% LTV, the odds are closing is delayed and the originator now becomes the bad guy in the eyes of the Realtor. Believe it or not, we like to get our paychecks as soon as possible also (not everyone applies to this).

There is one other thing to be aware of: when a credit report is pulled, as a buyer, you are usually safe from any more credit inquiries before your loans closes unless, but there are exceptions.

Marginal Credit or a tough loan to close? By the time your loan gets the the lender, probably subprime, they may and probably will pull their own credit report to compare to yours. This can be a big problem if you decided not to make you last mortgage payment (it happened recently at my office).
"But I have good credit, so I should be safe". Good theory. Some conforming lenders require their own reports as well.

My advice? Apply first, don't waste a Realtor's time, and listen to your broker.

Good luck to all!

Applying for a mortgage? Here are the do's and don'ts of the loan process...

Kevin Nelson (Discover NCW Mortgage) — Thu, 15 Feb 2007 12:37:54 -0600

•1. DON'T APPLY FOR NEW CREDIT OF ANY KIND. Including those "You have been pre-approved" credit card invitations that you receive in the mail. Every time that you have your credit pulled by a potential creditor or lender, you lose points from your credit score immediately. Depending on the elements in your current credit report, you could lose anywhere from 2-50 points for one hard inquiry.

•2. DON'T PAY OFF COLLECTIONS OR CHARGE OFFS during the loan process. Paying collections will decrease the credit score immediately due to the date of last activity becoming recent. If you want to pay off old accounts, do it through escrow, and make sure that 1) you validate that the debt is yours, and 2) that the creditor agrees to give you a letter of deletion.

•3. DON'T CLOSE CREDIT CARD ACCOUNTS. If you close a credit card account it will appear to the FICO that your debt ratio has gone up. Also, closing a card will affect other factors in the score such as length of credit history. If you have to close a credit card account, do it after closing, and make sure it is a more recent account.

•4. DON'T MAX OUT OR OVER CHARGE ON YOUR CREDIT CARD ACCOUNTS. This is the fastest way to bring your score down 50-100 points immediately. Try to keep your credit card balances below 30% of their available limit at all times during the loan process. If you decide to pay down balances, do it across the board. Meaning, make an extra payment on all of your cards at the same time.

•5. DON'T CONSOLIDATE YOUR DEBT ONTO 1 OR 2 CREDIT CARDS. It seems like it would be the smart thing to do, however, when you consolidate all of your debt onto one card, it appears that you are maxed out on that card, and the system will penalize you as mentioned above in 4. If you want to save money on credit card interest rates, wait until after closing.

•6. DON'T DO ANYTHING THAT WILL CAUSE A RED FLAG TO BE RAISED BY THE SCORING SYSTEM. This would include adding new accounts, co-signing on a loan, changing your name or address with the bureaus. The less activity on your reports during the loan process, the better.

•7. DO JOIN A CREDIT WATCH PROGRAM. If you join a credit watch program, you can check your reports weekly, or even daily depending on the program you select. (When you pull your own reports, you don't get dinged for a hard inquiry.) This way, if something does show up on your reports that has caused your score to go down, you'll know it immediately, and you may be able to take care of the problem before closing.

•8. DO STAY CURRENT ON EXISTINGING ACCOUNTS. Like your mortgage and car payments. One 30-day late can cost you anywhere from 30-75 points.

•9. DO CONTINUE TO USE YOUR CREDIT AS NORMAL. Red Flags are raised easily with the scoring system. If it appears that you are changing your pattern, it will raise a red flag, and your score could go down.

•10. DO CALL YOUR BROKER if you receive something in the mail from a creditor or collection agency that you believe may affect your score during the loan process. Your broker may be able to supply you with the resources you need to stop any derogatory reporting to the bureaus.