Wayne's Blog

Rural Development Loan Income Limits Modification

Wayne Frazier (Capital Mortgage) — Fri, 17 Apr 2009 11:44:24 -0500

Income limits will change effective April 20, 2009. It will be revised for the Single Family Housing Guaranteed Loan Program (SFHGLP). Instead of eligible adjusted income limits based on households ranging from 1-8 persons, a two tier income structure consisting of a 1 - 4 member household and a 5 - 8 member household will replace the original 1 - 8 person structure. The present add on limits for larger households will remain unchanged.

The new Income Limits will be posted on their eligibility website April 20, 2009

"MUST READ" for those with FHA MORTGAGES!

Wayne Frazier (Capital Mortgage) — Sat, 13 Dec 2008 10:52:03 -0600

If yo have an FHA mortgage I urgently advise you to speak with (ME) a loan officer to see if there is a benefit to possibly doing a Streamline Refinance into a better rate and or term. Rates are low right now and there is no telling how long they will stay down.

These loans are a specialty type loan with FHA that enables you to reduce your rate and/or term with NO INCOME or CREDIT QUALIFYING. These can be done WITH or WITHOUT a New Appraisal.

There is very little needed to qualify for this loan product.

Also, these loans can be processed very quickly.

I'm working this weekend. So, please feel free to contact me to further discuss.

Have a Merry Christmas and a Happy New Year ALL!!!!!!!

Wayne Frazier or Dawn Frazier

Captial Mortgage

MD License # 11525

(O) 410-288-4834

Wayne's (C) 410-627-6653

Dawn's (C) 410-627-6654

Mortgage Rates are SMOKIN' right now!!!!! Don't miss out!

Wayne Frazier (Capital Mortgage) — Fri, 12 Dec 2008 17:32:48 -0600

Rates are great right now. If you're thinking about purchasing or refinancing, DON'T DELAY! No telling how long this will last. 5% on a 30 year fixed rate mortgage was doable today.

Nows a great time to get'r done.

So yes y'all, there is a Santa Clause.

Feel free to drop me a line if you wish to discuss your financing options and possibilites. I'll be working the weekend to help those interested in taking advantage of these HISTORICAL LOW INTEREST RATES.

Gotta go! Phone won't stop ringing:-)

I'd rather give myself a root canal with my dewalt drill than to go thru....

Wayne Frazier (Capital Mortgage) — Mon, 20 Oct 2008 19:04:11 -0500

another computer crash. I'm finally back up an fully operational after nearly 3 weeks of we think it's this, we think it's that, the parts we brought were bad, yada, yada, yada!!!!!

I was reduced to working off of nothing but my laptop which is not completely set up to run an office.

I also found out that my back up external hard drive was not BACKING UP like it was supposed to. Got that fixed now also, hopefully.

I was seriously contemplating throwing the entire computer and the technicians in the pool.

But, then I would have had to paid for data recovery and human rescue services...lol

So this is my rant and now it's time to get back to work.

I want to buy a Home, what's the process and what should I do to get prepared?

Wayne Frazier (Capital Mortgage) — Wed, 17 Sep 2008 08:27:04 -0500

There are many things that you can do to prepare yourself for one of the most important financial dicision most people will make in their lifetime.

1. Self Analysis - Take a good look at where you are in your life and decide if you are truly ready for the responsibility of becoming a homeowner. This is a typically a long term Monetary Commitment and requires financial maturity.

2. Budget Analysis- This goes hand in hand with #1. Really analyze (write out) your entire monthly budget including ALL repetitive expenses. Don't forget the things that are paid for quarterly, semi annually, and annually. Also, make sure you factor in fun / entertainment money and such. This will help you to really determine what it is that you can comfortably afford. You want to enjoy your home, not look at it as a ball and chain dragging you down.

3. Homeowners Education- Although not normally mandatory for a loan, in some instances it is and I believe it will be required more as time goes by. There are many Home Ownership Counseling programs available, some are free, others have a nominal cost. This is well worth it for the (FTHB) First Time Home Buyer. You should be counseled in the various aspects of what being a homeowner entails, finances, the Home Buying Process and how to react should a crisis rear its' ugly head. You will usually be given a Certificate of Completion, keep it in a safe place because you may need it for your home financing. Also, make sure the agency providing the counseling is HUD approved. This can be done by going to http://www.hud.gov/offices/hsg/sfh/hcc/hccprof14.cfm for an updated list covering your area.

4. Familial Requirements - What do you and your family require in a home. From Bedrooms to Bathrooms and room sizes to yard size, nearby educational facilities, available recreational facilities / areas, to every day storage, specialty needs/ requirements, etc... Better to think this out now then to have to live with a not so adequately equipped home, or to have to modify the home. Unless this was taken into consideration before hand.

5. Credit Analysis- Get copies of your Credit Reports from the 3 main Credit Repositories, Trans Union, Experian, and Equifax. Go over them with a keen eye for inaccuracies and dispute any information that you feel is not reported accurately or is not yours. Don't wait until the last minute to do this because it takes time to get things resolved if need be. Do this early in the process, months ahead of time if possible. Trust me, this could have huge consequences when applying for a home loan regarding your ability to qualify and your interest rate among other things.

Many times you can obtain them for free from www.annualcreditreport.com, or you can contact the Bureaus directly via the phone, internet, or in writing. Different States have different laws regarding the requirements for Free Credit Reports to be provided by the Repositories. In Maryland you are entitled to one FREE Credit Report from each of the Bureaus, once per year.

The three main Bureaus contact info is as follows:

Trans Union - P.O. Box 2000 Chester, PA 19016 --- (P) 800-916-8800 --- Website: www.transunion.com

Equifax - P.O. Box 740256 Atlanta, GA 30374 --- (P) 800-685-1111 --- Website: www.equifax.com

Experian - P.O. Box 2002 Allen, TX 75013 --- (P) 888-397-3742 --- Website: www.experian.com

6. Get Pre-Qualified - Seek out a competent professional Loan Officer. Whether it be a referral from a family member or friend, or just good old fashion research and homework.

A good Loan Officer spends time assessing your situation and NEEDS thru extensive questioning. Answer truthfully and don't try to hide anything. They can't properly advise you unless THEY are fully informed.

They should be willing to tell you bad news just a quick as good, be in tune with the CURRENT market conditions, NOT necessarily what you hear on T.V. or the radio, and be accessible. They should respond to your attempts at contacting the within a reasonable amount of time. Bare in mind, you aren't their only client but they should be fairly easy to communicate with.

Getting pre-qualified will enable you find out what type(s) of loan(s) and terms you are able to obtain and assist you in determining what price range you should stay with-in. No point in looking at things you can't or won't buy. Saves yourself and your Real Estate Agent time, gas, and emotional distress. Remember what I said earlier, it not just what you qualify for, it's what you're comfortable paying. See more on this in my blog at http://activerain.com/blogsview/687453/Just-because-you-can.

7. Pick a Real Estate Agent- A good knowledgeable Agent can be of immense help throughout the Home Buying process. Take the time to find an Agent via referrals from Family, Friends, or your Loan Officer. Loan Officers work with agents all the time and should be able to offer up some assistance in this matter, or as I said above, good old fashion research and homework.

A good Agent will have knowledge of the area, keep your desires in mind, show you homes you're interested in and NOT just what they're interested in selling, help you evaluate asking prices, facilitate negotiations, draw up contracts, and help with inspections etc...

One final note, a Real Estate Agent should NEVER quote an Interest Rate or Closing Costs to you. I can't tell you how often I've seen this happen throughout the years and it is NEVER accurate. This is the job of your Loan Officer. Hence, the Pre-Qualification.

I hope you've found this information helpful and informative.

If you have any further questions, feel free to ask.

Just because you can, doesn't mean you should.

Wayne Frazier (Capital Mortgage) — Fri, 12 Sep 2008 09:16:30 -0500

When speaking with potential Home Purchasing borrowers one of the first things I always ask after gathering some basic financial info is "What do YOU feel you can comfortably afford for a monthly housing payment?".

Because it matters not what I can qualify you for, it only matters what you can afford. This question also serves to tell me if the borrower has realistic expectations from the start.

You see, If I can qualify someone for a $1800 per month house payment but they feel they can only handle a $1400 per month payment, it will allow me to better assist them by ringing out the numbers and to advising them as to the Price Range that they should not exceed. I say price range because several other factors will effect the TOTAL payment. (i.e. Condo Fees, HOA Fees, Ground Rent, Taxes, and Insurance etc...)

This assists their Real Estate Agent as well, because there is no point in showing someone a home that they could never comfortably afford. Thereby saving time, emotion and fuel for everyone involved.

Now the other reason for this question regarding expectations is as follows. All to often I speak with clients that when asked" What can you afford." they give me an answer that on some occasions is clearly out of the realm of their financial capabilities. I've been told, "I don't want to go over $1500 per month." when in reality they will not be able to qualify for anything close to that number. I then have to educate them regarding debt to income ratios and enlighten them about a budget plus the additional cost of home ownership. When finished we go over what the max is that I am able to qualify them for, but none the less, THEY still must be comfortable with the monthly payment. Which in this scenario, usually is a problem because it is less than they initially anticipated.

The moral to this story is simple, You can only afford, what you can afford. Typically everybody has the ability to stretch themselves a little bit when purchasing something they really want. But in most circumstances you are looking at a LIFETIME financial decision and would serve yourself well to really evaluate ALL of your finances to make sure that 18 months down the road you are not regretting your previous financial decision.

You want to enjoy your new home, not worry about losing it every month.

I would encourage anybody interested in seeking financing to first sit down and thoroughly fill out a Financial Statement / Budget, so you can better decide as to what it is that you really can afford.

If anyone needs a budget form to fill out just email me and I will be more that happy to send it to you.

9/11 May we Never Forget!

Wayne Frazier (Capital Mortgage) — Thu, 11 Sep 2008 08:42:36 -0500

Please take a moment today to think about the great loss and suffering so many endured on that tragic day.

My heart goes out to all those effected.

God Bless each and every one of them.

I leave you with a favorite quote of mine.

"I pray that our Heavenly Father may assuage the anguish of your bereavement, and leave you only the cherished memory of the loved and lost, and the solemn pride that must be yours, to have laid so costly a sacrifice upon the altar of Freedom. Yours, very sincerely and respectfully, A. Lincoln."

Chairman Frank and HUD Secretary Preston Negotiate DPA Agreement

Wayne Frazier (Capital Mortgage) — Wed, 10 Sep 2008 06:58:57 -0500

Chairman Barney Frank and HUD Secretary Preston have come to an amicable agreement regarding the continuation and use of Down Payment Assistance Programs.

HUD never liked Down Payment Assistance, but did want Risk Based Pricing to allow them to better manage FHA's overall security when Insuring Mortgages. This risk based pricing was and still is, to go away October 1st, 2008. Reverting back to the original standards set for insuring FHA mortgages.

Barney Frank has always supported Down Payment Assistance Programs (DPA's) and thought they had a place in the market to help those desiring to purchase a home of their own and live the American Dream, even when it seemed to be out of reach due to the lack of neccessary funds, i.e. Down Payment, needed to close / settle.

It appears that they have agreed to some terms that will allow Risk Based Pricing and the use of Down Payment Assistance.

Chairman Franik said he believe the New Bill will pass the House with know problem since it is now supported by the HUD Secretary Preston.

It must still be submitted to the Senate and Passed, then reconciled, and ultimately signed into law by the President.

None the less, this is some great news regarding the future of Down Payment Assistance.

Trans Union LLC and Acxiom LLC settle a $75 million Class Action Lawsuit...

Wayne Frazier (Capital Mortgage) — Thu, 14 Aug 2008 22:05:37 -0500

that claimed they violated State laws and the (FCRA) Fair Credit Reporting Act. The claims involved the selling of list containing personal and financial comsumer data to third parties for marketing purposes.

If you had an open line of credit, consumers credit (i.e. Credit Cards, Auto loans, Store Credit Cards, Finance Company Loans, Mortgage Loans, or Student Loans), from January 1st, 1987 to May 28, 2008, you may be included in this Settlement.

You have several different options to choose from and Free Credit Monitoring is one of them.. Your rights are outlined in this Legal Notice.

If you wish to receive any benefits you must register by September 24th, 2008.

Go to List Class Action for more information regarding this Lawsuit.

I hope you've found this info useful and please pass it along.

Potential Tax implications of the New Housing Law

Wayne Frazier (Capital Mortgage) — Mon, 04 Aug 2008 08:44:56 -0500

There are many things about this New Housing Law that are still being analyzed by the masses to detrmine its entire scope. I would encourage ALL Mortgage and Real Estate Professionals to take some time and at least skim over this Law that has far reaching effects regarding our business as a whole.

A good article regarding the possible Tax implications for Homeowners as was established by the law can be found at MND.

More food for thought.

Nehemiah is already pushing for a New Bill that...

Wayne Frazier (Capital Mortgage) — Wed, 30 Jul 2008 18:21:59 -0500

would allow for Down Payment Assistance Programs indefinitely. Lest we forget Hart, Ameridream, Grant America, etc...

I was in a conference call regarding it today and they are rallying the troops to get it done. You can rest assured that they will not go quietly into the night, this is their lively-hood.

They've fought some pretty impressive battles to date that ultimately ended up with Court rulings in their favor.

So, I guess for now we have to stay tuned.

We're from the Government and we're here to Help.....

Wayne Frazier (Capital Mortgage) — Wed, 30 Jul 2008 11:01:31 -0500

This my friends, is by definition, an Oxymoron.

Although I beleive there is a place for government regulation in the Mortgage Industry, all to often they create feel good legislation that causes more problems than it's intended to solve. The biggest problem being politicians are so consumed with being able to say that they took on an issue and got SOMETHING done that ultimately what is produced is a mangled conglomeration of verbage that usually does more harm than good and is not a thouroughly thought out, concise, piece of legislation that's able to be clearly comprehended by the masses it regulates or governs. I cite the "Housing and Economic Recovery Act of 2008’’ 694 pages of legislative bliss. Which as of this morning, July 30th, 2008, has been signed into law by the President and is to take effect October 1, 2008.

A great site I use for tracking various Mortgage and Real Estate Legislation / Bills is GovTrack

Some parts of the Bill are good, but I have issues with other parts. I have serious concerns about the Section 257 of the legislation "Hope for HomeOwners Program". In a nutshell if you receive a loan under these guidelines the Government (FHA /HUD) becomes your Equity Partner. It breaks down as follows if you Refinance or Sell the property.

FIVE-YEAR PHASE-IN FOR EQUITY AS A RESULT OF SALE OR REFINANCING.—

For each eligible mortgage insured under this section, the Secretary and the mortgagor of such mortgage shall, upon any sale or disposition of the property to which such mortgage relates, or upon the subsequent refinancing of such mortgage, be entitled to the following with respect to any equity created as a direct result of such sale or refinancing:

‘(A) If such sale or refinancing occurs during the period that begins on the date that such mortgage is insured and ends 1 year after such date of insurance, the Secretary shall be entitled to 100 percent of such equity.

‘(B) If such sale or refinancing occurs during the period that begins 1 year after such date of insurance and ends 2 years after such date of insurance, the Secretary shall be entitled to 90 percent of such equity and the mortgagor shall be entitled to 10 percent of such equity.

‘(C) If such sale or refinancing occurs during the period that begins 2 years after such date of insurance and ends 3 years after such date of insurance, the Secretary shall be entitled to 80 percent of such equity and the mortgagor shall be entitled to 20 percent of such equity.

‘(D) If such sale or refinancing occurs during the period that begins 3 years after such date of insurance and ends 4 years after such date of insurance, the Secretary shall be entitled to 70 percent of such equity and the mortgagor shall be entitled to 30 percent of such equity.

‘(E) If such sale or refinancing occurs during the period that begins 4 years after such date of insurance and ends 5 years after such date of insurance, the Secretary shall be entitled to 60 percent of such equity and the mortgagor shall be entitled to 40 percent of such equity.

‘(F) If such sale or refinancing occurs during any period that begins 5 years after such date of insurance, the Secretary shall be entitled to 50 percent of such equity and the mortgagor shall be entitled to 50 percent of such equity.

APPRECIATION IN VALUE.—For each eligible mortgage insured under this section, the Secretary and the mortgagor of such mortgage shall, upon any sale or disposition of the property to which such mortgage relates, each be entitled to 50 percent of any appreciation in value of the appraised value of such property that has occurred since the date that such mortgage was insured under this section.

ALL this in addition to an UFMIP of 3% plus a monthly MI calculated at 1.5%

This entire piece would qualify as Predatory by any means if implemented by a Lender / Investor as a portfolio product. Ring the numbers out on a $200K deal that is sold 12 years into this NEW Mortgage with an assumed $90K increase in value over that time. The Government get's nearly $101K total when adding together the UFMIP, the Monthly MI, and the EQUITY (Stripping) SHARING. AMAZING

Something else you should know about this Laws effects on FHA Mortgage Insurance.The changes implemented in Mortgagee Letter ML 2008-16, dated June 11th, 2008, that went into effect on July 14th, 2008, will have a 1 year moratorium imposed on them starting on October 1st, 2008.

This Law also eliminates the use of Down Payment Assistance programs that assist borrowers to obtain a home. I feel this rabbit hole goes much deeper than FHA would have us believe. The last time they were in court over this their arguement was blown apart resulting in a loss for them and a Victory for the DPA's. The problem with their arguement is that it's just to easy to say DPA's in and of themselves are causing a disproportionate amount of Defaults / Foreclosures. Especially when they FHA was trying to hash outl plans for their OWN 100% mortgage product. I think a comprehensive THIRD Party audit / investigation should be done that really analyzes the cause(s) of the foreclosures FHA currently relies on for their arguement. I'm talking income, assets, occupation, local economy, evaluate local inflationary problems such as ever increasing energy costs, plant shut downs, natural disasters etc...My feeling is they would find out that just as now, the type of mortgage one receives isn't necessarily the only defining factor pushing people into foreclosure.

I also fear that this will have severe negative consequenses for the Housing Industry do to the fact that DPA's were used by a fairly large amount of Home Purchasers, estimates I've heard are as high as 30%, to assist them with getting into a home. With continuosly increasing lending restrictions and an ever tightening Credit Market this will further disqualify good , hardworking, honest people that want to live the AMERICAN DREAM of Homeownership.

They have also increased the minimum Cash Investment required by the borrower(s) to 3.5% of the Appraised Value, not a huge increase, but an increase none the less.

So in conclusion, I'm not overly impressed with this law by any means based on what I've discussed. Not to mention the astronomical spending associated with it.

So you OWE MORE than your Home is WORTH!

Wayne Frazier (Capital Mortgage) — Thu, 03 Jul 2008 16:31:37 -0500

Some Marylanders are finding this to indeed be true do to the recent downturn in the housing market. Although, this doesn't necessarily mean that you can't refinance. Many of the Subprime and some of the Prime lenders are in quite a pickle right now. They are sitting on loans that are considered upside down regarding the pledged properties value and the projections for at least the near term market are indicative of an even greater and more widespread loss as the market works thru this crisis.

Now this doesn't mean that everyone's home is worth less that what they paid for it when they originally purchased the property or last refinanced it, but there are some areas where property values have decreased thus making the pledged collateral in those particular areas possibly worth less than what is owed on it.

Most, if not all States at this point have some areas that would fit into this category. While Maryland for the most part has faired pretty well through this strained Real Estate and Mortgage Market, some States, such as California, Arizona, and Florida have taken significant value hits. Don't get me wrong, Maryland Real Estate is not entirely immune to the effects of this market and we definitely have our fair share of equity loss in the residential real estate sector. There are some value issues with certain areas, neighborhoods, and even down to subdivisions across the State, just not quite on the scale as these other States. None the less, Equity Loss is Equity Loss regardless of where your property is located.

This obviously has had the most profound effect on those that purchased or refinanced at, or near, 100% of the value of there home at the time, not to mention the borrowers that took out loans in excess of the home value at that time (i.e. 125% Home Equity Lines). It's had an even more dire effect on purchasers / borrowers that took out Adjustable Rate Mortgages that are now beginning to RECAST, most significantly upwards, thus making their monthly payments escalate and placing further strain on an already strained budget due to rising costs across the board on nearly everything these days. This in turn has caused qualifying issues, namely Debt to Income Ratio problems, for people trying to obtain Home Financing.

But all is not lost; working with a knowledgeable and qualified Mortgage person such as myself or Dawn Frazier of Capital Mortgage, you may still be able to Refinance your home into a more affordable mortgage product while reducing the amount owed to the original lender. This is a specialized home financing mechanism that very few in the industry have the knowledge or contacts to facilitate and even fewer lenders are willing to lend on a property that is considered Upside Down in value. Each of these transactions are put together on there own merits, there is no cookie cutter template for getting them done. Just good old fashioned know-how, proper structuring, and a desire by all involved to make it happen. As is typical with most Home Financing transactions, time is of the essence. Not only because people needing these are typically teetering on Financial Disaster or Hardship, but also because in an area where Home Values are continually dropping it further complicates the process. Does this mean everybody will qualify? NO, but many will and would be wise to pursue this avenue.

I have the knowledge and contacts to assist people with this particular issue. So, if you've been TURNED DOWN by others due to value issues please feel free to contact us so we can further discuss your situation. (O) 410-288-4834 * Wayne's Cell 410-627-6653 * Dawn's Cell 410-627-6654