Jerry's Blog

FHA and VA refinance

Jerry Wright (Mortgage Advisory Group) — Mon, 23 Nov 2009 14:07:24 -0600

If you know of anyone in your data base that has a FHA or VA loan, now is the time to make a call to them. If their interest rate is at or above 6% then they should consider a refinance. With FHA and VA there is a "Streamline Refi" available. What this means for the custormer is that even if the home value has gone down there is no need for an appraisal and they could lower their monthly payments. I have saved many of my clients hundreds of dollars per month with these loans. Interest rates are close to historic lows and when the government stops buying up the treasury bonds the rates will rise and people will misss out on these low rates.

Jerry Wright

425-238-2095

Fed Funds

Jerry Wright (Mortgage Advisory Group) — Wed, 04 Nov 2009 13:40:47 -0600

The fed funds were left unchanged today. On that news the mortgage bond have seen some pressure and are off aobut 19bp's. This should move rates up slightly in the afternoon and tomorrow morning. Applications rose in the last week by 8.2% though. The next big event will be the auctions on the 9th of $40B 3 yr bonds, $25B 10 yr bonds and $16B of 30 yr bonds.

Jerry Wright

Mortgage Advisor

$8000 tax credit

Jerry Wright (Mortgage Advisory Group) — Tue, 27 Oct 2009 14:35:56 -0500

Well the Senate has the bill now to vote to extend the tax credit. Lets all hope they do. If they fail to extend this I believe the housing market will come to a crawl. This would be for two reasons. First the consumer confidence would be shot. Consumers would see the government bailing out all the big banks and pulling back from the consumers who need most of the help. Secondly I think that the first time home buyers would stop buying anticipating a renewal of the bill early next year after the winter break. The best that could happen is to expand the tax credit to all home buyers and the least that should happen is to renew what is in place.

Jerry Wright

Mortgage Advisor

Over regulating again

Jerry Wright (Mortgage Advisory Group) — Mon, 03 Aug 2009 14:11:43 -0500

Now the government has implemented the Housing and Economic Recovery Act (HERA). Basically if the APR changes for the better or worse by .125% then new disclosures would need to be signed by the borrowers and the loan could not close for up to 6 days after signing it. I can see if the APR goes up then having them sign and wait the required days. But if the rates go down and I get my clients a better interest rate? The APR would go down and the borrowers would benefit from that. Why should the clients be punished and have to wait the additionals days?

This is just about as bad as the HVCC the act that makes it so that the lenders can't contact the appraisers. Just to get a re-inspection is now taking about a week. This over regulation is slowing down the closing times.

Credit Repair should not cost any money

Jerry Wright (Mortgage Advisory Group) — Mon, 02 Mar 2009 12:30:12 -0600

In these times there are going to be companies that will charge money to fix a persons credit. That is a waste of time and most people don't realize it. There are ways that a person can fix their own credit for free. It just takes time a effort. If a person takes the time and puts in the energy they can save money and make sure that the job is getting done properly.

With all of the changes in lending guidelines it is very important to have a decent credit score. There are websites out there where a person can get a free credit report to make sure that nothing is reporting incorrectly. If something is they just need to put forth the effort to make the calls and write the letters to get them removed. If there are collections or judgements then make the calls to set up terms for repayment and satisfy those trade lines.

I have a FREE Credit Aid packet that I can email to anyone looking to save themselves the money if they are willing to put forth the time and effort to fix it themselves. Interest rates are great if you have the score so if you need to get your score up then let me know and I will email you the packet.

Jerry Wright

Mortgage Consultant

425-355-1052

jwright@metrocitiesmtg.com

Tougher lending is not always a bad thing

Jerry Wright (Mortgage Advisory Group) — Wed, 29 Oct 2008 09:18:31 -0500

Some of the program changes are not all bad for us. Back in about 2002 and before when you got a home loan you had to provide 2 years of w-2's, a month of pay stubs, bank statements, show job stability and have decent credit. Then you sat down with a mortgage person and decided how much you were going to put down and what type of program was best for you.

Then the change in the industry started to happen. The stated income/stated asset, no-doc and 0-down loans started to show up. Not long after that first time home buyers could by 0-down stated income and investment properties were close to follow. Obviously this was a drastic error for some. Around that time the running joke was "if you can fog a mirror you can get a loan". What was the industry thinking?

Now the guidelines have changed back and those who have started in the last few years are so shocked at how the banks are being "unrealistic" in there guidelines. A borrower must actually have a job, decent credit, prove the income and have a little down payment. How will we ever survive?

When I first started a co-worker of mine said "if you will not put your family or your best friend into a loan program, then don't do it to a client". How profound is that statement when we are building relationships for life with our clients.

Jerry Wright

425-335-1052

Save the Down Payment Assistance Programs

Jerry Wright (Mortgage Advisory Group) — Tue, 26 Aug 2008 21:57:59 -0500

Congress has this bill on the floor when they return from the Summer Break. We all need to voice our opinion to keep the Down Payment Assistance programs alive.

Congress introduced bipartisan legislation, H.R. 6694 that would reauthorize and reform charitable downpayment assistance. This bill would remedy a harmful provision in the new housing law which limits homeownership opportunities for low and middle-income Americans. The legislation, sponsored by U.S. Reps. Al Green (D-TX), Gary Miller (R-CA), Maxine Waters (D-CA), and Christopher Shays (R-CT) reauthorizes and reforms charitable downpayment assistance funded in part by sellers, which has helped over one million families and individuals become homeowners since 1999. The program was eliminated by legislation signed by President Bush on July 30, 2008.

The Green-Miller-Waters-Shays plan would re-authorize and reform non-profit downpayment assistance and secure it as an allowable source for FHA borrowers. The bill seeks to ensure that providers of the downpayment assistance operate in a transparent manner to guard against conflicts of interest. The bill also includes language to ensure that FHA maintains its financial stability by permanently authorizing the Secretary to assess higher premiums to higher risk borrowers.

It is important that you contact your elected officials in Congress and tell them that you support downpayment assistance and urge them to support H. R. 6694. To reach your elected officials, please call the US Capitol Switchboard at 202.224.3121.

To learn how you can support it, visit http://www.supporthomeownership.com.

Jerry Wright

Washington Metro Mortgage

425-238-2095

Down Payment Assistance, know it for 2008

Jerry Wright (Mortgage Advisory Group) — Wed, 04 Jun 2008 12:23:50 -0500

With all the tightening in the lending industry lately. FHA and VA loans are definately on the upswing. Did you know that you can get the 3% down for FHA and the closing costs for both paid by the seller. If it is your seller than you should look into all the DPA programs. The Down Payment Assistance programs make the seller concessions tax deductible. Why would your seller just give the money to the borrower and not take advantage of the tax deduction? If you don't know about these programs then to be the best source of information to your sellers, you should learn about them. Ameridream is one of my personal favorites but there are a bunch of them out there. You can just search for Non-Profit Down Payment Assistance and they should appear. We need to be educated to help out all of the potential buyers out there.

Jerry Wright

425-355-2095

100% financing is going away

Jerry Wright (Mortgage Advisory Group) — Thu, 20 Mar 2008 18:55:30 -0500

The only true 100% financing left will be VA.

FHA is still at 3% down payment. This program allows 6% to come from other parties. So the 3% down payment and the closing costs can be covered through seller concessions.

All other first time homebuyer programs will be with a 3% down payment. Most of these products have a maximum of 3% that can come from the seller to cover down payment and/or closing costs.

Product Updates:

· Effective 3/31/08 the Flex 100, My Community Mortgage 100%, and Home Possible 100% are being discontinued. The MI companies will no longer insure these products at 100% LTV.

· Due to MI restrictions maximum LPMI is limited to 97% LTV.

· The Stated Income/Stated Asset program is now limited to maximum 90% LTV.

Jerry Wright

Conforming Loan Limits for 2008 left unchanged

Jerry Wright (Mortgage Advisory Group) — Tue, 27 Nov 2007 12:49:25 -0600

With the state of our markets it suprises me that they left the loan limits alone. Here in Washington it is very easy to surpass the loan limits and the underwriting for Jumbos is more strict. Well atleast the rates are great right now with a 30 yr fixed just below 6% and 100% loan at 6.5%. Good Luck to all.

Freddie Mac conforming loan limits are unchanged for 2008

Today Freddie Mac is announcing that for 2008, our loan limits will remain unchanged from their 2007 levels. Through December 31, 2008, Freddie Mac will continue to purchase home mortgages up to the following loan amounts:

For properties in the United States (except Alaska, Hawaii, Guam & U.S. Virgin Islands)

$417,000 for mortgages on one-family properties
$533,850 for mortgages on two-family properties
$645,300 for mortgages on three-family properties
$801,950 for mortgages on four-family properties

Sound Fundamentals Promise Improved Housing Market

Jerry Wright (Mortgage Advisory Group) — Wed, 14 Nov 2007 09:42:25 -0600

It was a mystery that only the crack investigators at RSI - the REALTOR® Scene Investigation - could uncover.

Faced with the conundrum of consumers staying on the homebuying fence in the midst of solid U.S. economic performance, NAR President Pat V. Combs, in a spoof of the hit TV show "CSI: Crime Scene Investigation," dispatched her "trusted advisors" to gather the facts behind this inexplicable consumer behavior.

During a spirited presentation at the 2007 REALTORS® Conference & Expo in Las Vegas, she revealed the investigation's findings: The national media, seduced by a few vocal but misinformed analysts, have been painting the U.S. housing markets as one huge national market in the clutches of a meltdown, even though the facts paint a very different picture.

Solid Fundamentals Help, Subprime Problems Hurt

Using undercover investigative work that would make CSI's Dr. Albert Robbins proud, NAR Chief Economist Lawrence Yun reported that other national sales downturns in the last 30 years were spurred by broad economic problems. This year, by contrast, economic fundamentals remain solid, with the U.S. gross domestic product expected to grow by a respectable 2 percent, supported by 2 million job gains in the last two years and continuing low interest rates.

Yun said 2007 existing-home sales will exceed 5.5 million, close to the level in 2002, a record-setting year. At the same time, home prices remain near record highs despite drops in a few markets.

Yun told Combs' lead investigator (played by President-Elect Dick Gaylord) that much of the cooling in real estate markets over the last year is attributable to risky subprime loans. A tightening in credit standards, though much needed, has made it harder for some borrowers to close on their financing in a timely manner.

Help on the Way for Lending Troubles

Posing as undercover agents, NAR Chief Lobbyist Jerry Giovaniello and Vice President of Regulatory Affairs Joe Ventrone, told "investigator" Charles McMillan (2007 First Vice President) that these difficulties are having less of an impact than analysts thought they would. That's thanks in part to the increased attractiveness of federally backed FHA loans. More help is on the way, too.

NAR is keeping several initiatives on the front burner in Congress, including reforms that will make FHA more competitive in markets throughout the country and a tax law change that would make it easier for troubled borrowers to refinance into more appropriate financing. Congress is also looking at raising the Fannie Mae and Freddie Mac conforming loan limits, which have been too low to help buyers in high-cost markets like many in California.

"Reports of real estate's demise have been greatly exaggerated," said Combs at the spoof's denoument. The performance took place during "59-1/2 Minutes," the member forum that opened NAR's 2007 meeting, the association's 100th. "All of the evidence points to one conclusion: Real estate is alive and well and there are plenty of opportunities for consumers and our members."

REALTORS® in their local markets can help keep the media from perpetuating the bad-market myth by conducting their own investigations, Combs said. "Take time during the conference to consider the evidence and gather the information you need to help REALTORS® in your state refute inaccurate stories and build confidence in the market," Combs said.

NAR's Plan for Its Second Century

In addition to watching the sleuthing of RSI, REALTORS® learned of the association's plans for helping its members succeed into NAR's second century through a number of large-scale initiatives, including the launch of a federal credit union and efforts to reach out to home owners and educate them on the issues they share with REALTORS®.

The credit union, which has been more than a year in planning and will be presented at the Board of Directors meeting for approval, is intended to make member-friendly financing available to REALTORS®. Among other things, it would seek to offer financing options that aren't typically available from other lenders because of real estate professionals' irregular, commission-based income.

Some 30,000 members, guests, and vendors are in Las Vegas to attend governance meetings and educational sessions, and to learn about the latest products and services available to the industry from hundreds of vendors at the REALTORS® Expo.

Jerry Wright

HUD Defeated on Down-Payment Assistance

Jerry Wright (Mortgage Advisory Group) — Thu, 01 Nov 2007 11:40:09 -0500

HUD's ban on seller-financed mortgage down-payment assistance programs has been temporarily blocked by U.S. District Court Judge Paul Friedman. In a four-page ruling, Friedman said the rule threatens to put nonprofit organizations offering such programs out of business and added that HUD "failed to supply a reasoned analysis for its departure from its long-standing policy of approval" of the initiatives. AmeriDream in Gaithersburg, Md., and Nehemiah in Sacramento, Calif., were among the groups that had filed suit to contest the rule, which was scheduled to take effect on Oct. 31; and they say their programs help put minorities and first-time buyers in homes. HUD had argued that borrowers who receive assistance from sellers are more than twice as likely to default on their mortgages or become delinquent on their payments than other buyers with mortgages guaranteed by the Federal Housing Administration.

Pitches to fix bad credit can be a scam

Jerry Wright (Mortgage Advisory Group) — Thu, 25 Oct 2007 13:14:04 -0500

By Michelle Singletary

Every day, consumers pay untold sums to companies that promise a quick credit fix. Most of the time, that money is wasted.

I understand why these offers might seem so enticing. Good credit can get you much better interest rates for a car or home loan. A bad credit history can leave you stuck with loans carrying high rates and other onerous terms. In some cases, bad credit can even cost you a job.

But make no mistake about it. While there are some legitimate credit-repair companies, many of the claims you hear advertised are usually false and a con to get your cash.

On my XM satellite radio show, a couple called in recently to ask if they had done the right thing in signing up with a company that said it could remove negative information from their credit files.

Now mind you, the information was correct. It included, among other things, a bankruptcy filing by the couple about five years ago.

In a move to clean those blemishes from their credit record, the couple hired the company, agreeing to pay it a $200 upfront fee. And -- this nearly made me fall out of my chair -- they agreed to allow $100 to be withdrawn from their bank account each month for ongoing efforts to fix their credit.

I asked the couple for details of the services they were getting. I found out that the so-called credit-repair company wasn't doing anything for them that they couldn't do for themselves.

I urged them to immediately cancel the contract, telling them they were being scammed. But their response was frustrating. Despite my warnings, I could hear in their voices that they didn't believe me. They wanted -- maybe even needed -- to believe the company.

"But they guaranteed they could get the bankruptcy removed," the wife argued.

"They promised they could improve our scores," the husband said.

"You know what, you might as well take a $100 bill every month and light a match to it," I said.

How could I tell that this deal was no good for the couple? There were several signs of trouble.

The first was the upfront fee. Under the federal Credit Repair Organizations Act -- enacted to address deceptive and abusive credit repair business practices -- it is illegal for companies to charge consumers money before performing the promised credit-repair services. Credit-repair companies cannot seek payment from you until they have completed the services they have promised.

Next, the company said it could permanently delete accurate, negative information from the couple's credit files.

That's a lie.

While you can dispute information in your files that you believe to be false, no credit-repair company or individual has the right to remove accurate, current information from a credit report. If the information in your file is correct, only the passage of time can reduce the impact of a negative report. Negative information such as late payments can stay on your credit file for seven years. In the case of a personal bankruptcy filing, it can take 10 years. But don't despair. The impact of that information on your credit scores decreases as the years go by.

Finally, after much discussion, the couple said they would cancel the contract, though I wasn't totally convinced they would.

If you're thinking about responding to a credit-repair offer, you should at least know your rights. To avoid being scammed, the Federal Trade Commission says consumers should look for the following warning signs and avoid any firm using these terms:

The company requires an upfront fee.

The company says it will dispute all information in your file, including things you know are correct. On that last point you should know better. If the company's strategy is to lie or dispute accurate information, it's not a reputable operation.

Before you sign a contract, the company does not provide you with a copy of the FTC's "Consumer Credit File Rights Under State and Federal Law," which outlines what is permissible.

You are told not to directly contact the credit reporting agencies.

You are told that the company can get you a new credit identity by applying for an employer identification number, or EIN, from the Internal Revenue Service. The pitch is that you can use this number instead of your Social Security number. If you don't own a business, this is not a legitimate way to repair your personal credit history. It is a federal crime to obtain an EIN under false pretenses.

If you've got some credit issues, the best thing to do is go to http://www.ftc.gov/ and get the agency's free publication, "Credit Repair: Self Help May Be Best." You can also call toll-free 877-382-4357.

I'll tell you what I told that couple. Don't waste money on a credit-repair service.

© Washington Post Writers Group

Good news for short term rates.

Jerry Wright (Mortgage Advisory Group) — Mon, 22 Oct 2007 13:49:39 -0500

The Federal Reserve will do whatever is necessary to prevent damage to the economy from the credit crunch that has gripped Wall Street, a Fed official said Monday, warning it will take time for financial markets to fully recover from the strains.

Fed Governor Randall Kroszner's remarks came as fears about the credit crunch and a painful housing slump have gripped investors in recent months, causing stocks to nosedive. Wall Street took another sharp plunge -- 366 points -- on Friday. The Dow Jones industrials was up in trading on Monday afternoon, after being down more than 100 points early in the session.

Some economists believe the Fed will lower an important interest rate at the end of a two-day meeting next Wednesday, to help bolster economic activity. But others, citing the economy's resiliency and worries about an inflation flareup, think the Fed will leave rates alone. Oil prices, which had surged to record highs in recent weeks, have eased a bit but are still hovering above $86 a barrel.

Jerry Wright

Washington Metro Mortgage Everett

buying down the rate. A sellers carrot!

Jerry Wright (Mortgage Advisory Group) — Thu, 18 Oct 2007 18:15:01 -0500

To make their homes more attractive and more affordable to prospective buyers, sellers have options. From a purely financial point of view, the obvious way that comes to mind is to simply lower the asking price. Another way that has been discussed recently in this column is to agree to pay all or part of a buyer's closing costs.

Perhaps the best way of all is to offer to pay to lower the buyer's interest rate. This is called an interest rate buy down. This type of financing combines the advantage of a low initial interest rate with the stability of a 30-year fixed rate. This tool allows the borrower to qualify for a more expensive home by offering lower payments in the first two years while providing a fixed rate for the next 28 years.

Here's how it works. Let's say a buyer needs a $500,000 mortgage to buy a home and he believes that since rates are going up, he wants a 30-year fixed rate. At 6.25 percent, the principal and interest payments are $3,079 per month. A buy down will drop his rate to 4.25 percent for the first year and his payments will be $2,460 per month. The second year the rate will be 5.25 percent and the payments will go up to $2,761. The rate will then go up to 6.25 percent for the remaining 28 years.

The lower rate in the first year will either allow the buyer to afford a larger loan or it will allow him to buy the home with lower income. Either way, both the buyer and seller will benefit. The two years of reduced payments will save the buyer $11,244 in payments. The buyer can either pay this additional cost up front as part of the closing costs or he can ask the seller to pay for it at the time the offer is presented.

Seller's agents may get more action on their listings if they advertised that the seller is willing to pay for the buyer's interest rate buy down. Mortgage consultants will be able to help more buyers qualify for loans using this same concept. Write or e-mail me if you would like my special report on interest rate buy downs.

The seller may also want to offer a permanant buy down. This would save the new borrowers thousands of dollars through out the loan term which is another point to put in a listing.

Jerry Wright

Another helpfull listing tool

Jerry Wright (Mortgage Advisory Group) — Thu, 11 Oct 2007 11:55:43 -0500

Payment Abatement -No Payment For Up to 6 Months!

The interest abatement program is a feature available on many purchase programs.

With payment abatement a special escrow account is set-up to pay a portion or all of the borrower's monthly payment during the first 3 to 6 months the loan is open.

The escrow account is typically funded by allowable seller contributions. Maximum contribution limits are based on loan to value and program.

Each month when the payment is due, the escrow account is debited to make that portion of the payment that is called for. A specific disclosure outlining the type of payment abatement (Interest only, principal and interest or principal, interest taxes and insurance) is signed with closing documents.

Conforming (up to 417,000.00) Fixed or Arms
•·        Purchase Transactions. New Construction or Resale
•·        Make No Payment for 3 to 6 months
•·        Choose to Abate Interest, P&I, or PITI
•·        Funded by Normal Seller Concessions

Jumbo Fixed or Arms
•·        Purchase Transactions. New Construction Only
•·        Make No Payment for 3 to 6 months
•·        Choose to Abate Interest, P&I, or PITI
•·        Funded by Normal Seller Concessions

FHA and VA Fixed
•· In the works!
This is a great marketing tool to help sell your listings. Please give me a call or stop by with any questions. Jerry Wright 425-355-1052.

FHASecure could help many of your clients

Jerry Wright (Mortgage Advisory Group) — Tue, 02 Oct 2007 15:38:16 -0500

WHAT IS FHASecure?

FHASecure is a refinancing option that gives credit-worthy homeowners, who were making timely mortgage payments before their loans reset but are now in default, a second chance with a FHA insured loan product.

WHO IS ELIGIBLE

Eligible homeowners must meet the following requirements:

•1. Have a non-FHA insured ARM that has reset;

•2. Sufficient income to make the mortgage payment; and

•3. A history of on-time mortgage payments before the loan reset.

By refinancing into a FHA insured mortgage, you can expect to pay lower monthly mortgage payments. FHASecure can improve the quality of life for many communities by helping to reduce the number of mortgage defaults and bringing greater stability to local housing markets.

Refinancing Non-FHA Adjustable Rate Mortgages Following Resets

FHA is currently doing a significant business in refinancing non-FHA mortgages for borrowers who are current under their existing mortgage. This mortgagee letter extends eligibility to borrowers who became delinquent under their current mortgage following the reset of the interest rate.

This mortgagee letter explains credit policies for refinance transactions involving non-FHA adjustable rate mortgages where the homeowner's mortgage payment history during the 6 months prior to the reset showed no instances of making mortgage payments outside the month due.

These instructions are designed to permit homeowners, who previous to their reset demonstrated an ability to meet their mortgage obligations, an opportunity to refinance into a prime-rate FHA-insured mortgage. In many cases homeowners may be permitted to include mortgage payment arrearages into the new loan amount, subject to existing geographical mortgage limits and the loan-to-value limit shown below.

Eligibility Highlights of the FHASecure Initiative

The mortgage being refinanced must be a non-FHA ARM that has reset.
The mortgagor's payment history on the non-FHA ARM must show that, prior to the reset of the mortgage, the mortgagor was current in making the monthly mortgage payments, i.e., the homeowner's mortgage payment history during the 6 months prior to the reset showed no instances of making mortgage payments outside the month due.
If there is sufficient equity in the home, FHA will insure mortgages that include missed mortgage payments.

Mortgagees must determine, as part of the underwriting process, that the reset of the non-FHA ARM monthly payments caused the mortgagor's inability to make the monthly payments and that the mortgagor has sufficient income and resources to make the monthly payments under the new FHA-insured refinancing mortgage.

10 Ways to profit in a difficult market

Jerry Wright (Mortgage Advisory Group) — Tue, 25 Sep 2007 12:29:34 -0500

Even though in Washington our market has not seen the woes of the national market I thought that I would put out here what I tell the people in my office. Below are a few things to consider in this market.

1) Pick a Niche: Choose a market that you want to specialize in and hit it hard. Offer a FREE Finding Your Niche Special Report to learn some ways to get started and successfully market to your chosen target market.

2) Show Your Clients You're Still Here: It is crucial to contact your clients and prospects now more than ever before. Offer them "peace of mind" that you are secure and still able to serve them, as well as their referrals.

3) Learn How Other Professionals Get (and stay) at the Top: Check out interviews with top professionals discussing marketing strategies and ways they have gotten, and stayed, at the top of their profession.

4) Target the FHA Market: With the recent approval of FHASecure, now is the perfect time to target clients and prospects who may benefit from getting an FHA loan.

5) Stand Out From the Crowd: Keeping in touch with your clients doesn't have to cost you a bundle, and being unique increases the chance people will remember you. A package of "forget me not" seeds will do.

6) Respond Quickly to Changes in the Market: With the decrease in interest rates this week, it is a fabulous time to target those who could benefit from refinancing into a fixed rate loan.

7) Partner Up: Cut your marketing costs in half, double the size of your database and be the one-stop-shop for clients. The benefits can be endless when you joint market- so what are you waiting for?

8) Be The Expert: Host an Educational Seminar in your community to show that you are the expert they can count on. Don't forget to invite your favorite referral source to present with you.

9) Establish a Corporate Affinity: Corporations are an untapped and potentially profitable market! Now is a great time to approach companies (both large and small) and offer classes to their employees- thus increasing business for you!

10) Stay Visible...and Consistent: No matter what you do, you need to stay visible to your clients, prospects, professional referral sources, and community constantly. It can be as simple as sending a delicious recipe Postcard each month, or sending an Educational Brochure about the current Mortgage Crisis to your database.

Remember to always be the "ONE" that your clients call for advise, direction and answers to their housing needs.

Over 40 funny stuff to lighten your day.

Jerry Wright (Mortgage Advisory Group) — Thu, 06 Sep 2007 15:59:02 -0500

Mom used to cut chicken, chop eggs and spread mayo on the same cutting board with the same knife and no bleach, but we didn't get food poisoning.

My Mom used to defrost hamburger on the counter, AND I used to eat a bite raw sometimes, too. Our school sandwiches were wrapped in wax paper, in a brown paper bag, not in icepack coolers, but I can't remember anybody getting e.coli.

Almost all of us would have rather gone swimming in the lake instead of a pristine pool (talk about boring), no beach closures then.

The term cell phone would have conjured up a phone in a jail cell, and a pager was the school PA system.

We all took gym, not PE . . . and risked permanent injury with a pair of hightop Ked's (only worn in gym) instead of having cross-training athletic shoes with air cushion soles and built-in light reflectors. I can't recall any injuries but they must have happened, because they tell us how much safer we are now.
Flunking gym was not an option . . . even for stupid
kids! I guess PE must be much harder than gym.

Speaking of school, we all said prayers and sang the National Anthem, and staying in detention after school caught all sorts of negative attention. We must have had horribly damaged psyches.

What an archaic health system we had then. Remember school nurses? Ours wore a hat and everything, and she could even give you an aspirin for a headache or fever.

I thought that I was supposed to accomplish something before I was allowed to be proud of myself. I just can't
recall how bored we were without computers, Play Station, Nintendo, X-box or 270 digital TV cable stations.

Oh yeah . . . and where was the Benadryl and sterilization kit when I got that bee sting? I could have been killed!

We played 'king of the hill' on piles of gravel left on vacant construction sites, and when we got hurt, Mom pulled out the 48-cent bottle of Mercurochrome (kids liked it better because it didn't sting like iodine did) and then we got our butt spanked! Now it's a trip to the emergency room, followed by a 10-day dose of a $49 bottle of antibiotics, and then Mom calls the attorney to sue the contractor for leaving a horribly vicious pile of gravel where it was such a threat.

We didn't act up at the neighbor's house either, because if we did, we got our butt spanked there, and then we got our butt spanked again when we got home. I recall

Paul Piotte coming over and doing his tricks on the front stoop, just before he fell off. Little did his Mom know that she could have owned our house. Instead, she picked him up and swatted him for being such a goof.

It was a neighborhood run amuck.

To top it off, not a single person I knew had ever been told that they were from a "dysfunctional family". How could we possibly have known that we needed to get into group therapy and anger management classes? We were obviously so duped by so many societal ills, that we didn't even notice that the entire country wasn't taking Prozac! How did we ever survive?

LOVE TO ALL OF US WHO SHARED THIS ERA, AND TO ALL WHO DIDN'T -- SORRY FOR WHAT YOU MISSED. I WOULD'NT TRADE IT FOR ANYTHING!

Pass this on to someone (over age 40, of course), and brighten their day by helping them to remember that life's most simple
pleasures are very often the best!

Investors were spoiled with 100% loans

Jerry Wright (Mortgage Advisory Group) — Mon, 20 Aug 2007 14:19:40 -0500

For the past few years it was a snap to get 100% financing on a Non Owner occupied property. Those days are about gone. I have 1 investor that I can still do them through. The only issue it that the interest rate is about 13.6%. There is a very slim chance that you could get this property to cash flow. Then you have the complaint about how they are getting robbed with that rate. We have to look at what is happening out there and realize that the public has to be aware that some sort of down payment is going to be required for Non Owner properties. In this changing market the underwriters are reviewing each loan with a very strict eye and anything that looks questionable is being conditioned for proof. Actually to get any investment property to cash flow a person would need 20% down and be able to ride out the times like we are seeing at this time. How are you other lenders out there explaining this situation to your clients? Are you realtors being overwelmed with questions by your clients?

As a quick reminder, Owner Occupied loans are still available with no money down. The borrowers just have to prove what they put on the loan applications. Here in Everett, WA there seems to be a lot of rumors about this product being gone, but is NOT.

Good luck to all as we ride out this temporary storm.

Jerry Wright

Understanding the Credit Crunch in lending.

Jerry Wright (Mortgage Advisory Group) — Fri, 17 Aug 2007 13:13:06 -0500

The media has coined the phrase "Credit Crunch". Most people that I talk to have no idea what this is or what it means. All they see is on every news station that more lenders are going bankrupt or cutting programs. What I will attempt to do here is explain what happened and how it affected our markets. But first I need to take it back a few years and explain a bit about the system.

We will start about 3 years ago. Appreciation of homes in the nation was growing rapidly. I will use some very conservative figures and say they were appreciating at a rate of 15%. So lenders had very loose restrictions of the loans. They did this because if they loaned on a house at 100%, after year 1 they were only at risk to 85%. At the end of the 2^nd year the risk to the lender was only 70%. This means that if they had to repossess the property and sell it at auction they could recoup their initial 100% financing. This was the reason that the guidelines eased and we started seeing financing for lower credit scores, no down payments and investment properties with 0 down.

Another thing that needs explaining is how lenders make there money on the back end. Lenders make loans to their credit line. So let us use $100,000,000. When they had that block of $100 million they would take it to the trading floor and get bids to buy that bond. In this same time frame when the lenders would take that line to the floor they would have 35 to 40 groups bidding to buy that line at around 102%. They would pay premium pricing for that line because of the interest they would collect on the line down the road. So that lender would get bids of around $102 million for the $100 million in loans that they had. That $2 million profit is what kept that company in business and made the profits for the company. At this time homes were appreciating across the board and the default rate was low so the risk of buying those bonds was very low.

Now we need to jump ahead to the middle of 2006. The default rates of those high risk loans started to climb and the housing appreciation started to level off and in some areas started to drop. I will not even include the billions of loans that defaulted due to hurricane Katrina. So those investors that bought those loans are repossessing some of the houses and sell them at auction. Since the rate of appreciation had leveled off they were and are taking losses. This made the buyers of the bonds start to rethink their positions about the amount of premium that they would buy future bulk mortgage notes. Now those same lenders that bring $100 million to the floor for bids are getting different offers. Now instead of 35-40 bidders there may be 5-10. The amount of the bids had decreased on the credit lines to .96 to .97 for that $100 million. So to free up the lenders credit line they would have to take a loss of $3-$4 million. Not many of the Alt A or Sub-Prime lenders could sustain those types of losses for any period of time.

Now is a good time to explain that these are NOT all loans. The government insures loans in conforming amounts. Those are loans that are at $417,000 and below. Those loans also provide documentation of income, credit and assets. The loans that are considered Alt-A and Sub-Prime were loans that are commonly known as "Stated Income", "No-Doc", "Reduced Doc", "No-Ratio", and are jokingly known as "liars loans". The other types of loans that are at issue are the "Negative Amortization" loans. These types of loans were broadcast though different media sources saying that you could get loans for 1-2%. Few consumers realized that this type of loan was a Negative Am type loan. For an example the loan balance at the beginning of the year may have been $200,000 and they made the minimum payments on that loan for a year. At the end of that year their loan balance might be $208,000. They were eating away at their equity without even realizing what was happening. Then as appreciation slowed they could potentially owe more than the house is worth.

That brings us to the collapse of some of the lenders. Some lending institutions relied heavily on the types of loans talked about above. They did very little "Conforming" loans and the blocks of mortgage notes they sold were the risky ones. As the default rates rose some foreign investors stopped buying the mortgage backed securities. Some lenders could not sell off those notes and their credit lines were full. The issuers of those lines started to call the margins and they had no money to pay them down and had to file for bankruptcy. This started to affect all lenders because the buyers of the bonds were scrutinizing all the loans that are being sold. So lenders had to tighten guidelines requiring document and higher credit scores so that the investors would buy those notes and free up their credit lines.

There are still 100% financing options available out there. The criteria just became a little tighter. The borrower must prove income, assets and have a credit rating that is above 620 and have no late payments. The borrowers who have some late payments or need reduced documentation loans can still get them also. They just need some sort of down payment. The amount down would depend on what the issues are. Refinancing a mortgage follows basically the same standards.

I hope this has clarified some of the confusion out there and if I can be of any assistance please don't hesitate to call.

Jerry Wright

Washington Metro Mortgage Everett

Unique open house idea

Jerry Wright (Mortgage Advisory Group) — Tue, 14 Aug 2007 15:04:42 -0500

I was at an open house with an agent of mine last Thursday in Everett, WA. We were talking about how 3-4 months ago there might be 10-15 open houses on the tour date. This particular day there was 39! Granted our listings in the area are up about 51%. So we were talking with some agents throughout the day about how to attract buyers, and a suggestion came up that I had not heard of.

He said "we use to hold rush hour opens". So I had to ask what that was. He said everyone has their open houses on Saturday and Sundays. He use to hold his from 4-6 pm on a Wednesday or Thursday afternoon. Especially if it is on a good traffic route or close to it. I thought that this was a great idea and wanted to share it. Because the more information we share out here the better the industry becomes. Good luck to all! Jerry Wright

Ways to improve your credit and great info for your clients

Jerry Wright (Mortgage Advisory Group) — Fri, 10 Aug 2007 13:59:24 -0500

With all the stuff happening out in the mortgage industry higher credit scores are needed on a variety of loans. So I wanted to give some basic information to help people out there maintain there own credit and gives more information to pass on to your clients. I was teaching a class yesterday in Everett, Wa and every time I teach this class it amazes me how much people don't know about credit.

So lets start off with the basics;

In the 1980s, Fair, Isaac and Company devised a mathematical model to predict the credit risk of consumers based on the data collected from an individual's credit report. Today, the Fair, Isaac (or FICO®) system is the scoring model most widely used by lenders. The score ranges from 300 to 850, with a higher score indicating a lower credit risk. Potential lenders will usually review your credit report and use various methods to determine your credit risk. In other words, they will determine your ability and likelihood to repay debt.

Then some common facts about credit and the scoring;

Scores Range From About 350 - 850

Credit Score Is Calculated Each Time Your Credit Report Is Pulled

Married People Do Not Share A Score

Mortgage Companies Go By The Middle Score Of The Three Major Credit Bureaus - Experian, Equifax and Trans Union

Your credit history is reviewed every time you apply for credit. A poor credit rating can result in a denial of a request for credit

Good credit stays indefinitely

Negative information stays for up to 7 years

If You Have Had Credit For At Least Six Months, You Should Have A Credit Score.

Bankruptcies can stay on your report for up to 10 years

What Makes Up a Credit Score

Payment history - 35%

Amounts owed/Types of Credit - 30%

Length of credit history - 15%

Types of credit used - 10%

New Credit - 10%

Payment History (35%)

Payment history is based on paying bills as agreed and on time.

The majority of the payment history is based on the most recent six months and the highest weight is on the highest pay history.

For example, a mortgage loan would be rated first and then the next biggest payment, whether it is an auto loan or credit card with a high payment, would rate next.

Balances Carried (30%)

Balances carried are rated based on the balance to limit ratio. It is best to keep the balance to limit ratio low. Let's take a look at an example:

Let's say a borrower has two credit card accounts, one Visa with Citibank and one Visa with Bank of America, and both accounts have credit limits of $10,000 but, one is maxed out and the other has a zero balance.

If the credit accounts are left as is, it will result in a lower credit score because balance to credit limit ratio is 100%.

On the other hand, if the borrower spread the balance between the two accounts and owed $5,000 on each, the balance to credit limit ratio would only be 50% resulting in a positive affect to the credit score and would create a higher credit score.

It is important to note, mortgage and/or installment loans do not require the same approach as they have less of an impact with the balances carried component.

Pay your cards online before the statement closing date, since it's the statement information that gets reported to the bureau.

Paying your bills before the statement closes, results in a lower balance to limit ratio. This helps people who use one card and charge all of their items and pay it in full monthly but the monthly reported balance is significantly less when you pay it this way thus resulting in a higher score.

Please note that this excludes single payment American Express Cards as they are not reported as revolving credit lines.

Also note that if you have a business American Express this is never reported to your personal credit bureau unless you have a late pay.

This is just the basics;

I could go on and make this so long that most people would not want to read it. But I have a great 20 page pamplet directly from FICO. It is not branded by any company other than them. It is a great tool to give to your clients that are asking about credit and how it works. Just email me and I will reply back and attach the PDF file. In this market we can and should be helping out others and that is the philosiphy that I have at Washington Metro Mortgage. Thanks for reading and if you have any input please let me know.

Jerry Wright

100% financing is still there

Jerry Wright (Mortgage Advisory Group) — Wed, 08 Aug 2007 19:00:49 -0500

At my office in Everett Washington, I heard these realtors saying that the only loan that was close to 100% was FHA. This week alone lenders like Countrywide, National City, US Bank and Washington Mutual are all scaling back some of their programs. There is still a great program or 2 out there that the general public in unaware of. This program have very good interest rates and can even be interest only! Below is a little blurb that I sent out to the realtors that I work with. It would definately help the industry out if the news media would not hype this more than needs to be. So if you are in Everett, Lake stevens or anywhere else that offers the My Community Mortgage, read up on it and offer it as a solution.

I have received multiple inquiries today regarding the status of 100% financing loans. Please be assured that Washington Metro Mortgage has a variety of 100% financing loans available with flexible guidelines. We are approving loans with high debt to income ratios and less than perfect credit. These programs have favorable interest rates and come in a variety of terms including interest only. The existence of mortgage insurance on these programs enhances financing opportunities and buying power. Also, please don't forget that as January 1, 2007 mortgage insurance became tax deductible.

As most of you already know, product guidelines have been changing almost daily so we all need to be quick on our feet to assure closed transactions. I encourage you to call the lenders involved in your transactions to be sure the loans are still on track. Also, for those of you representing sellers please be sure to contact lenders providing pre-approval letters to be sure approvals are still valid.

Program Cuts and the fed

Jerry Wright (Mortgage Advisory Group) — Tue, 07 Aug 2007 15:25:19 -0500

National City Home Equity and Washington Mutual are among the big lenders that are scaling back their no-money-down mortgage offerings, and some lenders have decided to stop making zero-down mortgages available altogether. The move comes at a time when the number of bad loans continues to increase, with lenders now equating the likelihood of default to the amount of cash put down on a home. "No-down-payment loans are just about near impossible to get right now," says Jennifer Bridges, a real estate agent in Woodbridge, Va.; and the trend threatens to keep millions of consumers out of the housing market, especially first-time buyers. Research by the National Association of Realtors indicates that 40 percent of first-time buyers used zero-down mortgages in 2005 and 2006.

The Fed's assessment accompanied its decision to keep the nation's benchmark interest rate, the fed funds rate, stable at 5.25 percent; that decision was widely expected and so had no impact on stock trading.

Wall Street, which has been shaken by two weeks of volatility over the more difficult conditions in the credit markets, had looked for more soothing words -- at least a leaning toward an interest rate cut -- from the Fed. But the statement, while noting credit problems and continuing weakness in the housing market as well as the market's turbulence, stood fast by the Fed's inflation policy.

With all of these changes in our current market, make sure that if you have any 100% deals going, that you stay in touch with that lender to make sure the deal closes. There is nothing more frustrating to us loan officers and realtors when a deal implodes. Currently Washington Metro still has 100% programs available in a variety of programs. This may be subject to change if the market stays this volitile. All of the articles that I have been reading say the the Full-Document 100% loans will stay alive and that the government is looking into the 100% FHA loan that has been talked about for over 2 years now.

Jerry's Blog

FHA and VA refinance

Fed Funds

$8000 tax credit

Over regulating again

Credit Repair should not cost any money

Tougher lending is not always a bad thing

Save the Down Payment Assistance Programs

Down Payment Assistance, know it for 2008

100% financing is going away

Conforming Loan Limits for 2008 left unchanged

Sound Fundamentals Promise Improved Housing Market

HUD Defeated on Down-Payment Assistance

Pitches to fix bad credit can be a scam

Good news for short term rates.

buying down the rate. A sellers carrot!

Another helpfull listing tool

Conforming (up to 417,000.00) Fixed or Arms •· Purchase Transactions. New Construction or Resale•· Make No Payment for 3 to 6 months•· Choose to Abate Interest, P&I, or PITI•· Funded by Normal Seller Concessions

Jumbo Fixed or Arms •· Purchase Transactions. New Construction Only•· Make No Payment for 3 to 6 months•· Choose to Abate Interest, P&I, or PITI•· Funded by Normal Seller Concessions

FHA and VA Fixed •· In the works!This is a great marketing tool to help sell your listings. Please give me a call or stop by with any questions. Jerry Wright 425-355-1052.

FHASecure could help many of your clients

10 Ways to profit in a difficult market

Over 40 funny stuff to lighten your day.

Investors were spoiled with 100% loans

Understanding the Credit Crunch in lending.

Unique open house idea

Ways to improve your credit and great info for your clients

100% financing is still there

Program Cuts and the fed

Conforming (up to 417,000.00) Fixed or Arms
•· Purchase Transactions. New Construction or Resale
•· Make No Payment for 3 to 6 months
•· Choose to Abate Interest, P&I, or PITI
•· Funded by Normal Seller Concessions

Jumbo Fixed or Arms
•· Purchase Transactions. New Construction Only
•· Make No Payment for 3 to 6 months
•· Choose to Abate Interest, P&I, or PITI
•· Funded by Normal Seller Concessions

FHA and VA Fixed
•· In the works!
This is a great marketing tool to help sell your listings. Please give me a call or stop by with any questions. Jerry Wright 425-355-1052.