Roger's Blog

First Time Home Buyer Extension??? Not yet!

Roger Howell (Trinity Home Mortgage, Meridian Idaho) — Thu, 29 Oct 2009 08:34:59 -0500

With the deadline for the tax credit approaching, I have heard all sorts of rumors and untruths regarding its extension and expansion. I even saw an article from a well know personal finance magazine that suggested that the buyer only had to be under contract by Nov. 30Th to claim the tax credit. One look at the IRS web site told differently. The point is, we're hoping for this to be extended or expanded and some of us will delude ourselves or others that it has already happened.

To extend this, congress has to agree to it and set the terms. Right now, the climate in Washington is less than perfect for this as they are all fighting on how best to take over the health care industry. As a result our industry concerns; HVCC, Seller funded DPAs, and the first time home buyer tax credit have all been pushed aside. Yes, some in Congress have brought this issue up, but until recently, its been lost in the shuffle.

Yesterday there was some action on the much hoped for extension of the first time home buyer tax credit. The Senate voted to extend the tax credit until April 30Th of 2010. They also clarified that you just have to be in contract by then, and have a further 60days to close. They also provided for a move up buyer tax credit of $6500 for homeowners who have lived at their present homes 5 years or more.

This extension/revision of the first time home buyer tax credit is attached to an unemployment insurance bill, so it should get through, but you never know. The House still has to approve it and any differences reconciled by committee. I wouldn't expect the president to veto it. I'll believe it when I see it.

In the meantime, I'm cautioning everyone who makes application that lenders are not promsing to close on or before the 30th of next month, so be advised.

Useful links re: First Time Home Buyer Tax Credit

Roger Howell (Trinity Home Mortgage, Meridian Idaho) — Tue, 25 Aug 2009 15:13:21 -0500

Here in Idaho, the First Time Home Buyer Tax Credit program has been a God send. It has stimulated Idaho home sales over last year and I'm sure its kept plenty of Idaho Real Estate Professionals in business.

Even though the First Time Home Buyer Tax Credit is not new, I still get many questions regarding the program. when it first started, we had few resources to call on. I recently found the official IRS site and form that I have been forwarding to all my Idaho First Time Home Buyers.

The links are http://www.irs.gov/pub/irs-pdf/f5405.pdf (the form)

and http://www.irs.gov/newsroom/article/0,,id=206291,00.html (the guidelines)

Remember, the home must be occupied by November 30th to be eligible for the First Time Home Buyer Tax Credit program. For those who are building a home in Idaho, it might be getting too late to take advantage of the program if you don't finish and occupy the property by then.

Hopefully, Congress will extend the tax credit when they get back in session.

Changes are coming to the Reverse Mortgage Program

Roger Howell (Trinity Home Mortgage, Meridian Idaho) — Wed, 19 Aug 2009 18:11:01 -0500

Some details are emerging on the changes that will probably happen to the FHA HECM (reverse mortgage) program.

Both the House of Representatives and the Senate have bills in front of them to cover the requested 798 million dollar subsidy that the program will require.

The House bill doesn't provide any funds to subsidize the HECM program(reverse mortgage), while the Senate bill reportedly covers only 200 million of the subsidy and requires HUD to reduce the available loans by 5% loan to value.

There are alternate suggestions by NRMLA to adjust the mortgage insurance premiums to cover the shortfall, but it remains to be seen if that will be included in the bill.

Right now, there is an effort by some in congress to kill the program or at least make it even more regulated. Some such as Sen. McCaskill, are making the outrageous claim that reverse mortgages are the next subprime. When challenged by the media for her to produce specific instances where there was abuse of the program, she could not. It will take take vigilance on the part of the industry to see that such misinformation is not allowed to go unchallenged.

In the meantime, the need for the FHA HECM is expected to grow as more baby boomers are reaching retirement and find they don't have the funds to cover their needs. By making minor adjustments, we can ensure that the program remains viable and a useful tool for our growing senior population.

Bottom line is if you are considering a Reverse Mortgage or know someone who is, they should move quickly before Congress reduces the program.

As always, I can be reached for information at 208-861-7579. To receive a quick quote on your reverse mortgage scenario, go to: http://www.fastidahohomeloans.com/forms/reverseMortgage.html

You know you had a good vacation when you come back and can't remember how to check your voice mail.

Roger Howell (Trinity Home Mortgage, Meridian Idaho) — Tue, 11 Aug 2009 22:33:08 -0500

Warning, this post has nothing much to do about real estate or mortgages!

One of the things I love about my job is that I can take time off whenever I want. Back in my w2'd slave days, I had to beg to take my 2 weeks of vacation and God forbid that I asked for it off over a holiday.

This most recent vacation was a camping trip to Glacier National Park. We had never been and were totally blown away by the magnificent scenery, the wildlife, and just how fast one could forget the outside world.

(Never mind the date stamp, I forgot to reset it after changing the camera's batteries)

While it was hot back home, we enjoyed the cool mountain air.

Anyway, this has nothing to do with Real Estate, although I did pick up a few RE Guides for Kalispel and the Flathead Lake area. I just wanted to share a few photos of a true national treasure, Glacier National Park.

Maybe tomorrow I can remember how to take a loan application!

How do you help a client who says they have "no credit"?

Roger Howell (Trinity Home Mortgage, Meridian Idaho) — Thu, 30 Jul 2009 15:03:32 -0500

I have gotten several clients in the last few weeks who are without a credit score and think they cannot get financed. Furthermore, there is a certain radio talk show host who brags about haven a "zero fico score". I expect to see more of this, so here's how to get financed if you don't have a score.

We collect the information on your alternative creditors such as the water, power, gas, and telephone companies and get them to report your payment history to the credit bureaus.

We also get the information from your landlord and get it to report as well.

When we have 4 sources that will verify that you've paid on time for the last 12 months, we can ususaly get a lender to accept your loans applications.

Now, here's some misconceptions about using alternative credit.

Alternative Creditcannot be used to offset bad credit. So say you have some unpaid bills and they have gone into collection and they show up on your credit report, you cannot use Alternative Credit. At that point, you need to establish some traditional credit and wait for it to establish a credit score for you.

The rate you receive may not be the same as someone who has established traditional credit. It runs as much as .375% higher to use non traditional credit at some lenders.

Your loan will not process as fast without traditional credit scores. You cannot get an automated approval without credit scores. Furthermore, it takes a few days to collect the information and get the credit reports to report your Alternative Credit.

Alternative Credit can be useful for those who are not using the system, but wish to purchase a home. Just be prepared for a little bit more work and possible higher rate. If you want a list of acceptable sources of Alternative Credit, just email me.

MDIA, What does it mean?

Roger Howell (Trinity Home Mortgage, Meridian Idaho) — Thu, 30 Jul 2009 14:38:48 -0500

The new Mortgage Disclosure Improvement Act (MDIA)of 2009 goes into effect today. It is designed to prevent borrowers from getting incorrect information at application and then being surprised at closing with un expected and undisclosed fees. the main provisions of the act are:

No fees other than a credit report fee may be charged up front.

An appraisal fee cannot be charged for 3 days after receiving a good faith estimate and Truth in Lending Statement(TIL).

A mandatory 7 day waiting period is required for the borrower to examine the fees.

If the Annual Percentage Rate changes by more than .125%, a new disclosure is required and a 3 day waiting period is required. The law also requires 3 business days for mailing the new Truth in Lending Statement.

This is supposed to keep the borrower from being surprised by unscrupulous lenders who will low ball a good faith estimate in order to get the loan, but then charge what ever they feel like at close. Many times borrowers have felt pressured to go ahead and sign when they should have gotten up at closing, and refused to sign until they got a good explanation of the charges.

It has been hard competing with unethical lenders, usually out of state or online only, who do this. I think the small waiting period is more than worth the protection it offers borrowers.

What are your most important tasks?

Roger Howell (Trinity Home Mortgage, Meridian Idaho) — Wed, 08 Jul 2009 22:02:03 -0500

As a loan officer, i struggle many days to fit everything into my 9-5 world. Sometimes there's jsut too many tasks to fit and I have to prioritize. I break my tasks down into those which are high payoff, low payoff, can be delegated, and cant/shouldn't be delegated. From there, I set each days schedule.

As salespeople, our high payoff activities are prospecting, working our presentations or appointments, and following up with leads and people we have presented to. Other tasks, such as status updates, paperwork, and scheduling closings are low payoff activities and should be delegated to our processors, assistants, or transaction coordinators.

I'm at my best in the morning, so I try to set my prospecting time then. Its kind of like excercise in that if the days gets going before you do it, something will come up that gets in the way, so do it first. If its 30 minutes, an hour, or 2 hours, schedule it and don't let anything interfere with it.

The next most important, high payoff activity is actually selling. Those appointments and presentations lead to applications. The actual setting up of the loan file is actually an important, but low payoff activity that I do, but I'm considering handing that off to an assistant when volume warrants it.

Finally, the last high payoff activity is following up. Many sales people fall short in this task. They call the lead, leave messages, maybe follow up a second time and if there's no response, they give up. Do you know that most sales happen after the 5th contact? You need to have a systematized follow up to convert those leads that don't immediately become your client. Where do think next months and next years business is coming from?

Other activities such as status updates can be accomplished with a quick email early in the morning. My processor can answer my questions with minimal intrusions into her work flow. Other tasks such as call backs can be grouped into a block of time for better efficiencies. As long as you get to them the same day, you'll be fine. I set aside 2 blocks of time for call backs, one in the morning after prospecting and appointments, and the other towards the end of the afternoon after the afternoon appointments. similarly, emails can be used effectively for things such as program questions and loan scenarios.

By prioritizing your activities and scheduling them, you can go home knowing that you've done all the important task that are vital to your business.

What kind of credit is needed to get an FHA loan?

Roger Howell (Trinity Home Mortgage, Meridian Idaho) — Fri, 03 Jul 2009 11:36:49 -0500

I get asked more questions about credit than I do about interest rates. Many times its from someone with a credit issue or perceived credit issue and they're looking for reassurance about their credit.

The FHA Mortgage program doesn't have a minimum credit score, instead it looks at the credit history as a whole. The biggest one is that a borrower must have a clean credit history for the last 12 months. That means anyone with a 30 day late payment on their credit report is ineligible. Also, FHA Mortgages have a 2 year waiting period after a bankruptcy discharge.

Now the lack of a minimum credit score doesn't stop the individual banks and lenders from having their own requirements on top of FHA Mortgageguidelines. Right now, most lenders and banks are requiring a 620 minimum fico score. They are also requiring that the borrower have a minimum established number of credit lines, usually 3 to 5. This can be a problem for the first time home buyer or someone who doesn't use a lot of credit.

In my next post, I'll go into detail about how one can overcome a skinny credit profile and get approved for one of my Idaho FHA Mortgages.

Don't be afraid to say "no"

Roger Howell (Trinity Home Mortgage, Meridian Idaho) — Tue, 23 Jun 2009 21:50:51 -0500

In today's market I see lots of Loan Officers and Realtors who seem to have the mentality of "work with everyone", it might lead to a closing. They spend their time and energy with "clients" who are high maintenance, marginally qualified, and sometimes just plain disagreeable. When the deal either quietly dies, or blows up suddenly, they have just made a very expensive mistake.

I have found that I can't work with certain types of people and made a decision some years ago to say no and turn down a potential client if I think I cant work with the person, or they are not likely to close.

The advantages to being choosy about your clients are: More energy, More enjoyable work, Better utilization of your time, and when you finally close, a client who is happier and more likely to refer clients to you.

Now, there are some disadvantage to saying no, such as straining a referral relationship. If your relationship is strong, you should be able to explain why the lead is not a good fit for you.

Its tough the first time you have to do this, but the more you do it, the stronger your resolve becomes. You are in control of your business and your work day. The payoff is your sanity and work/life balance.

Remember, a fast "no" is better than a long "maybe".

Another Refinance solution that doesn't require a new appraisal

Roger Howell (Trinity Home Mortgage, Meridian Idaho) — Thu, 04 Jun 2009 22:22:57 -0500

Save Money on your Veteran's Administration Loan every month with a "Streamlined Refinance" No new appraisal required.

The VA Streamline Refinance doesn't require a new appraisal, nor does it require proof of income or assets. It does require that we verify that you're employed, a quick phone call can take care of that.

Some of the things to remember when getting a VA Streamline Refinance, is that you cannot pull a lot of extra cash out, maybe $500 max. You also cannot pay off a second mortgage or equity line with the VA Streamline Refinance. You must be lowering your payment (exception for a shorter term) and generally improving your financial picture to qualify. You also must be current on your loan to qualify for a VA Streamline Refinance

To see if you qualify for a VA Streamline Refinance, call me at 208-861-7579. Or you can go directly to my website and start the application today.

Get Your Head in the Game!

Roger Howell (Trinity Home Mortgage, Meridian Idaho) — Wed, 20 May 2009 14:31:53 -0500

I treat each day of work like a sporting event. It is game day. I have a morning routine that includes spiritual quiet time and exercise, and that feeds an energy that carries into the day. I dress for success, I get in a positive mindset and I attack the day with high energy. When I walk into the office, I am entering the arena and I have my game face on.

This leads to increased sales. It is critical I believe to operate like that. Even if you work at home you can operate like that. There is a great commercial where the man is dressed in his suit, kisses his wife and children good bye, gets in his car and drives down the street, turns around and comes back into his own house! Saying hello to his family like he just came to work, he heads to his own office in the house and gets on with his work day. Though working from home, he is treating it like game day. If you are working from home and you have Opra on the TV while you are working, you are not really working. Change up your routine and watch the sales start to soar. Sales takes effort, focused, concentrated effort. You can't do that when kids are screaming, the TV is on, your focus is elsewhere.

So here are some tips to getting "in the game".

First, have a separate place to work. Go there when you work, when you are not working, leave. At work I don't think about my family, I leave that at home. When I get home, I don't think about work. The two remain separate and so I remain married to both.

Second, take care of yourself physically. Exercise and watch what you eat. Take vitamin supplements to offset the lack of real vitamins in most food. You cannot be high energy when your health is bad.

Third, take care of yourself spiritually. Find a quiet place, a quiet time, and connect to the higher power.

Finally, take this seriously. Your business, your income, your success is a serious game. A lot of people depend on you. Go at it with 110% effort. A half hearted effort gets half-hearted results.

The good news is, the people actually doing this is few and far between. By doing these 3-4 things you will be moving yourself to the upper echelon of sales people in your industry and the results will soon follow!

Don't think you have the value to refinance? You might!

Roger Howell (Trinity Home Mortgage, Meridian Idaho) — Sat, 16 May 2009 07:45:55 -0500

In the Boise area our home values have dropped for the last 2 years. Some experts are saying our values are at 2001 levels. This leaves many people feeling that they cannot take advantage of today's low rates.

If you have an existing FHA loan, you are in luck. FHA Streamline Refinance loans allow a home owner to refinance a loan in good standing with out having to get a new appraisal, verify income, or assets.

The FHA Streamline Refinance loan assumes that if you have made your payment on time for the last 12 months, then you're a good borrower and they don't need to reverify everything.

The application process is similar to a regular loan except we don't have to verify as much, just the mortgage payment and a verbal verification of your employment. I can do this in person, over the phone, or with my online secure application.

The FHA Streamline Refinance loan will not let you pull extra cash to pay off bills. It will not allow you to exceed the original loan amount without an appraisal. If you haven't paid down your mortgage very much, then you will probably have to bring some funds to close. Usually, its $1500-$3000 and that is quickly recouped by your savings.

There are 2 other programs that allow homeowners to refinance and take advantage of the low rates even if their home value has dropped. I will post those on the next posting. In the meantime, gather your last mortgage statement and then give me a call at 208-861-7579.

New Appraisal Rules are increasing costs for borrowers

Roger Howell (Trinity Home Mortgage, Meridian Idaho) — Tue, 12 May 2009 14:37:43 -0500

The new Home Valuation Code of Conduct that became de facto law on May 1st has already started to increase the appraisal costs to the borrower. One of my lenders is now asking for $450 for an appraisal that used to cost $375. Another one of my lenders, Idaho Housing is asking for a $500 check up front to order the appraisal. In one case we have an appraiser quote $675 for her fee on one of our loans.

For those not yet familiar with the HVCC, it requires the loan officer to be disconnected from the appraisal ordering process. Most wholesale lenders have taken this a step further and have a separatedepartment or an appraisal management company that orders the appraisal for the loan. This eliminates the ability to choose known appraisers who have demonstrated a level of competence and service in the past. The appraisal may not be assignable to other lenders should the loan have to be moved. It is possible that a borrower will get stuck paying for multiple appraisal on a property.

How do we plan on avoiding this? On purchase transactions, the bulk of my business, we submit the loan with out an appraisal. If the lender doesn't like it, too bad. The appraisal will be ordered after we have underwriting conditions back and have reviewed the conditions. This will slow down the process as I have typically sent in a complete package to the lender.

It sounds like a mess, but as ususal we will rise to the new challenges that our industry faces.

Expect lots of confusion over the Home Valuation Code of Conduct

Roger Howell (Trinity Home Mortgage, Meridian Idaho) — Thu, 16 Apr 2009 22:33:19 -0500

Effective May 1st, 2009 the Home Valuation Code of Conduct will be in place for loan that are sold to Fannie Mae and Freddie Mac. This new "code" is designed to eliminate influence by loan officers and anyone else who has a vested interest in the value of the home. What dose this mean?

One, Appraisals cannot be ordered by the loan officer. They will most likely be ordered through a clearing house called the appraisal management company. The lender ordering it would have no say in who is selected as the appraiser. VA has used a similar system, but the VA acts as the clearing house.

Two, the Appraisal Management Companies are going to require the appraisal be paid up front before it is ordered. This means the client will be putting up a credit card number when time comes to order the appraisal. this is not a new thing for Banks, but the broker community has a mixed record in requiring up front payment for appraisals.

Three, while the code is supposedly only for Fannie/Freddie loans, some lenders are requing it for all loans to include FHa and RD. Idaho Housing and Finance and Wells Fargo have indicated it will apply to all loans. I expect that to be the norm.

Finally, most lenders are still putting their systems in place here at the 11th hour. I have numerous webinars, training classes, and email bulletins to get through between now and the end of the month.

It's jsut one of the many changes that have happened and will continue to happen as our industry evolves into something sustainable. The value of education cannot be understated.

As always, you can call or email me with any questions about the new Home Valuation Code of Conduct.

They got their just deserts, was it worth it?

Roger Howell (Trinity Home Mortgage, Meridian Idaho) — Mon, 16 Mar 2009 23:02:51 -0500

Just last week, the courts gave prison time and restitution to a builder and two loan officers who were part of a mortgage fraud scam here in the Treasure Valley. Two more men, Realtors who had parts in the scam are awaiting sentencing. To read the story, see:

http://www.idahostatesman.com/westada/story/697916.html

The sentences seemed a little bit light in my opinion, but I wasn't sitting on the jury. For a 20 million fraud, the restitution stated is only $758,634. Where did the rest of the money go? Maybe is not recoverable.

Today on the radio, I hear that reports of mortgage fraud are up 27% from 2007 to 2008, so stories such as the above will probably continue.

That is so sad, there are so many ways to make an honest living.

Details Emerging on the Home Owner Affordability and Stability Plan

Roger Howell (Trinity Home Mortgage, Meridian Idaho) — Wed, 04 Mar 2009 17:35:40 -0600

Details have been surfacing all day about the new mortgage relief efforts under the Home Owner Affordability and Stabilty Plan that was signed into law on February 17th. So far, It seems to have 2 components:

One, "encourage" loan servicers to modify loans where the homeowner has some sort of distress through loan adjustment, job loss, or otherwise in danger of foreclosure. This program is voluntary (just like the 2 previous programs), so there is no guarantee the servicer will agree to modify the loans.

Two, Fannie Mae and Freddie Mac will have a refinance program for those who are current on their mortgage but cannot refinance due to declining home values. The maximum loan to value on the new loans would be 105%. This new refinance will not allow new secondary financing on the property, but would allow the existing second mortgage to subordinate to the new loan. (good luck getting that)

It will take the lenders a little time to asses the new programs and then decide how and if they are going to participate. I will post more as it becomes available.

For those of you with the time and energy to read and decipher it all, I found detailed information on Fannie Mae's website: https://www.efanniemae.com/home/index.jsp

Also:https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2009/0904.pdf

and finally: https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2009/0905.pdf

I've been optimistic with the two previous programs, but was disappointed over what actually came to be available. I hope this doesn't happen with this latest mortgage relief plan.

The elusive 4.5% interest rate, I finally closed one!

Roger Howell (Trinity Home Mortgage, Meridian Idaho) — Tue, 03 Mar 2009 19:41:33 -0600

It seems like everyone is expecting the mortgage markets to drop to 4.5% and anything higher is "just so high". Whenever we have rates showing 4.5% on a 30 yr. fixed, it stays there for less than a day and by the time we call everyone in our pipeline, the rate has already moved up. It makes us look bad when we call to give them the good news and then "oops, the rates have gone up."

Furthermore, our appraised values have dropped due in large part to the short sales and reo properties setting the market values, so someone who thought they had sufficient value to qualify, now finds they don't. Fannie Mae and Freddie Mac have drastically increased their delivery fees and risk based pricing. Bottom line is, you might not see 4.5% unless your situation is perfect.

How did my clients get that magic 4.5% rate? first off, it was a par rate, so it was a below market deal. They've been good clients over the years and I don't mind giving a repeat client that kind of a deal. Second, they had almost 800 ficos. third, they weren't pulling extra cash out, just wanted a lower payment. Finally, they had 20% equity in their home, albeit, it was much less than they originally thought they had. My lender required a second appraisal and cut the value but it still left them with 20% or so.

Now the average call I have been getting since Thanksgiving for a refi usually goes like this: "I bought my home in 2006 with zero down. I hear the government has lowered the interest rates to 4.5% and I want to refinace and lower my rate and get some extra money to pay off my credit cards." I've gotten pretty good at letting them down without being too hard on their expectations.

My fellow loan officers have file cabinets full of loans with unrealistic expectations. I certainly won't turn down an application for a refinance, but I do make it a point to manage expectations. I find myself working mostly on first time home buyer loans, as that seems to be the best use of my time.

Have you every thought about the signals you send?

Roger Howell (Trinity Home Mortgage, Meridian Idaho) — Wed, 25 Feb 2009 17:39:15 -0600

I am often asked "how's business?" My stock answer is "busy, very busy or extremely busy" I do this because I am usually busy doing something, albeit not always closing a loan. I can fill up my day with many other activities to include other businesses I operate or simply self improvement activities.

I have to wonder some times if I am sending the signal that I'm too busy. You know, when you rush to answer the phone and sound out of breath, or mention that you have 10 more calls to make. Could you be sending the signal that you don't want anymore referrals right now?

I'm trying to work up the proper posture to prevent this, as we all need referrals. I tell people that referrals go to the "top of the stack", but even that might sound like I'm too busy. I'm thinking of something like: "Its busy, but not too busy to take care of you or anyone you refer to me." If anyone has a good response and would like to share, I would appreciate it.

I believe that the good people will always have some business during slow times and an abundance during the good times. Its important to reflect that in my business posture. After all, if you want something done, give it to a busy person!

Rates have moved up, but there's still good rates to be had

Roger Howell (Trinity Home Mortgage, Meridian Idaho) — Sat, 31 Jan 2009 00:58:07 -0600

I know everyone who didn't lock in a 4.5% is probably kicking themselves. Rates have moved up since the inauguration, now their in the high 5'sand some lenders are posting FHA rates close to 7%. In spite of the hype, I think very few people locked in at 4.5%. Some weren't ready and some got greedy and were holding out for 4%.

Here in Idaho, we have Idaho Housing Loans, and they are still in the low 5's for purchase and rate and term only refinances. Their rates don't change as often, it has to do with the bonds they issue and what they have to pay.

this morning, their 5% down first time home buyer loan is at 5.18, and their 3.5% down FHA is only 5.70%.

Their refinance loan, called the advantage is at 5.25%, not too bad!

The point is, if you think you want to refinance, get your pay stubs, w2's and bank statements together and run down to your local mortgage broker. Loans are taking longer to close, so there's no time to waste. If you're sitting on the fence about purchasing a home, jump off that fence, call me and your Realtor. If you don't have a Realtor, I can recommend one.

"I'll just call this old home a rental so I can buy a new home"

Roger Howell (Trinity Home Mortgage, Meridian Idaho) — Sat, 31 Jan 2009 00:42:28 -0600

In response to the growing number of "buy and bail" scenarios, lenders have implemented new rules when someone wants to call their old home a "rental" and use the rent income to qualify for a new one. If you can qualify for both payments with your income, then the following doesn't apply.

First, lenders have been requiring a 2 year history of managing rental properties in order to count rental income. This has been the case for several years.

Second, the lenders are now requiring you to have 6-12 months of verified reserves to pay the mortgage on your "rental" property.

Third, the lenders are requiring you to have a lease in place, and prove that you deposited the tenants rent and deposit checks. No vacant rentals allowed.

Lastly, Lenders are requiring up to 30% equity in the property considered a "rental". they have been requiring the borrower to pay for a new appraisal to prove they still have equity.

By doing this, they will cut down on the number of people who buy an new home and after closing, stop paying on the old home.

If this sounds like your situation, call me and I'll work the numbers and determine if you can call your old home a rental. Its better to know now than to put money down on a new home you can't qualify for.

What loan can I get with out a down payment?

Roger Howell (Trinity Home Mortgage, Meridian Idaho) — Mon, 26 Jan 2009 15:36:01 -0600

I get this question every day. Considering a couple of years ago, we could get someone a zero down loan without much more than a name and a 580 fico score, it can be very frustrating.

Right now, there are still a few options available for zero down loans.

VA loans are available for Veterans. Today even the Reserves and National Guard qualify. This loan will go to 100% and allow the seller to pay the closing costs.

IHFA (Idaho Only) has a second mortgage program that will go behind their first mortgages to get to 100% combined financing. You need a 700 or higher fico, and it is needs based.

Note: If you're in another state, look at your "Housing Agency", they might have a similar program.

Rural Development Loans. You must buy in an "eligible area" for this program, but most counties in Idaho are entirely eligible. Here in the Treasure Valley, we have Star, Kuna, and Middleton as eligible areas. This loan doesn't have a minimum credit score, but the clients need good credit for r the last 12 months.

Lastly, FHA has a $100 down program for HUD owned homes. There are some nice bonuses for the agent and client. To see what homes are eligible for this, go to: http://www.tenmanagement.com/listings/property-list.do

There it is, 3 programs that go to 100% and one that only requires $100 down.

Right now is the best buying opportunity we've seen in years! Homes are selling for much reduced prices, the rates are low, and the first time home buyer can get a $7500 tax credit if they buy before July 30^th of this year. I am actually getting people into homes for less than what they're paying in rent.

If you need more information about any of these programs or want me to qualify your client, call me at 208-861-7579.

P.S. When you call, ask me about my "unused leads" system. It will double your business at no cost to you.

Trying to understand the mortgage regulation changes in 2009

Roger Howell (Trinity Home Mortgage, Meridian Idaho) — Tue, 06 Jan 2009 11:36:26 -0600

I've been trying to wrap my head around the changes 2009 will bring. Numerous changes for borrowers and mortgage originators. Some of The changes are:

If a loan is considered a "higher priced mortgage loan", based on a FHLMC published average prime offer rate more than 1.5% over this published rate or for a second mortgage, over 3.5%. What this rate is determined to be has yet to be published. I guess it will seriously affect the ability to offer no closing cost or reduced closing costs loans.(more than it already has) We'll have to wait and see what that "FHLMC Prime Offer Rate" turns out to be. IF you have a higer priced mortgage loan, then the following applies:

Regulation Z, creates 4 new "consumer protections".

First, the lender must take into account the borrowers ability to pay from income and assets instead of solely on the homes value. (I thought we were already doing this)

Second the income and asset information must be verified-NO MORE STATED INCOME LOANS! (believe it or not, I still get calls for those)

Third, escrow accounts for property taxes and home owner's insurance are required.

Fourth, Pre payment penalties are restricted, no more than 2 years if the loan can change in the first 4 yrs.

It appears to me that the above is in response to the sub prime loan crisis. By the time all this came into affect, sub prime lending is largely a thing of the past. In a couple of years it will be a memory but we will still have the following regulations in affect.

For all loans, it requires a good faith estimate with in 3 days after the customer applies for a loan. The customer cannot be charged for anything up front other than a reasonable amount for a credit report. The days of a lender charging a $400 application fee are gone. I never do this, but have had clients come to me that got hooked by an on line lender for this. When they found out the rate they were quoted was not accurate, they were stuck for the application fee. This is a good thing!

I will get into the other regulation changes in other posts, there's plenty of them!

Happy 2009 to my fellow active rainers

Roger Howell (Trinity Home Mortgage, Meridian Idaho) — Sat, 03 Jan 2009 10:44:39 -0600

Well its been an interesting year for those of us who have survived 2008. I am an optimistic person and never thought that the market would crash like it did. Oh, well, its time to get busy making 2009 a better year than 2008.

I put together my action plan for the year. It have many of the same tasks as last year, a few new ones, and systematizes what I do so as to be more effective.

Last year about half way through, I quit focusing on refinance business and turned more towards the first time home buyer market. The values in my area have dropped so much, that anyone who put less than 25 % down in 2005-2007 doesn't have the equity required to refinance. Purchases kept me busy with FHAs. VAs, RDs, and Idaho Housing Loans. The home purchase business will be key to staying busy this next year. That means more Realtor calls, meetings, and above all, continuing education.

The other area I feel really bulish on is Reverse Mortgages. With the current economic situation and the decline of 401ks and IRAs, many seniors need the help of a reverse mortgage. I am surprised how many seniors try to get by on so little income. Many of them even have a mortgage and try to live on $1000 per month income or less. In those cases, a reverse mortgage can be a life changing event.

The last area of my 2009 plan is systems. I am putting more activities into time blocks, scheduling other activities at times that make them more likely to get done, and putting realistic time limits on other activities that may or may not always equal a pay check.

That does it for now, I'm off to a new year and a better 2009. Good Luck to my fellow active rainers with your 2009 goals.

I can't believe they would ruin their lives like this!

Roger Howell (Trinity Home Mortgage, Meridian Idaho) — Tue, 09 Dec 2008 22:00:24 -0600

Just last week, we had 5 local people who were involved in a mortgage fraud scheme plead guilty to various charges that could get some up to 30 yrs in prison. All took some sort of plea bargain reduced to a single charge each. We get to find out next year what kind of time they will get.

The fraud involved a Builder, a Banker, a Loan Officer, and 2 Realtors. In their scheme, the builder would get construction loans and straw borrowers to sing for the loans. The builder paid kickbacks to all parties involved in order to get the buyers and loans for homes that were never built. The builder pocket draw funds and left the homes unfinished. Eventually, the bank took back uncompleted homes and reported it to the FBI.

The Banker involved had left the bank and started with another construction lender prior to her arrest, she had even called on our office before anyone knew what she had done. I am so glad we never sent any business to her new company.

I hear rumors about other fraudulent activities being investigated right here in Idaho. I am sure we will hear more stories like this as they work themselves out.

Loan Modifications in Idaho

Roger Howell (Trinity Home Mortgage, Meridian Idaho) — Wed, 03 Dec 2008 22:27:30 -0600

It seems the latest hot product is loan modifications. Many former mortgage companies and others in the business have tried to supplement their falling incomes by getting distressed borrower's to pay them a hefty fee upfront to modify their loan. I have seen prices form $2500 and up, usually due upfront with no guarantees of results. Up until now, there has been little or no regulation of this activity.

I have a moral issue with charging someone a fee for something they can easily do themselves. In the last few months i have faced this situation with past clients, friends, or simply people calling in and finding they cant refinance their way out of a bad mortgage situation. In all cases I have explained what they need, how to get it, and then referred them back to their lender. In the event they are having difficulty, I ask them to call me, and I will help them further.

We just got notice yesterday from the Idaho Department of Finance that anyone offering to preform a loan modification and charge a fee, is considered to be in the activity of credit counseling and therefore must be licensed as a credit counselor and must also register any and all business locations. Its about time the state got more involved on this issue. To find out more on this subject, go to: http://finance.idaho.gov

You may also call the Depart of Finance to report illegal loan modification companies at 208-332-8000.

For home owners in distress, The Department of Finance has resources at : http://finance.idaho.gov/mortgage/foreclosureresources.aspx

I think I will be posting more on this subject with more self-help information in the future.