My Home Loan With Jay

Are You An Influence Agent?---The Science Of Influence

Jay Williams, Mortgage Loan Officer Getting You The Right Loan (Greenville, NC) — Sun, 19 Apr 2009 13:20:16 -0500

A couple of years ago I read an interesting book by Dr. Robert Cialdini. A Regents Professor at Arizona State University, Dr. Cialdini is a social psychologist..

I decided recently to re-read his book, “Influence: Science and Practice”. This work centers on influence triggers that help someone to say yes.

Like it or not we, in the real estate industry, are influence peddlers. We are trying to help people make good decisions. Yet many of us struggle with making decisions.

In particular we often hesitate when making big decisions. The assessment of buying or selling real estate is a major event. The process of choosing the best financing option is equally complex.

Even the process of who to work with can be difficult for homeowners. Which agent do I work with? How can I find a lender I trust?

Equally we have to make decisions within our business partner referral networks. Building these referral networks causes us to develop principles of influence.

What are the influence concepts that Dr. Cialdini identifies:

Reciprocity
Commitment and Consistency
Social Proof
Liking
Authority
Scarcity

Dr. Cialdini spent three years working with a variety of sales related organization in research for this book. He went through numerous sales trainings and shadowed sales practitioners evaluating the tolls used to influence people to saying yes.

The result of this research led him to identifying these six key influence tools. He points out that when we have the time and inclination to conduct a thorough analysis to reach a decision we will.

However, in today’s fast paced mode of living, we tend to use short cuts to make these decisions. Dr. Cialdini asserts the element of influence of: reciprocity, commitment and consistency, social proof, liking, authority and scarcity provide the shortcuts for decision making.

For those that are interested I am including a link to amazon where you can order the book, “Influence: Science and Practice”. You can also navigate to Dr. Cialdin’s web site by clicking Influenceatwork.com.

Stay tuned and come back as we provide more thoughts and opinions on each of these six factors of influence.

What are your thoughts on developing influence techniques as part of your sales process? Can you think of how you have utilized these principles?

Jay Williams

A Collage From The Greenville, NC Tea Party

Jay Williams, Mortgage Loan Officer Getting You The Right Loan (Greenville, NC) — Sat, 18 Apr 2009 09:35:40 -0500

It seems the tea parties held this week are driving the left nuts. They just don’t know what to make of ordinary people taking time out of their day to register their disdain with politics as usual.

This was not about Republicans vs Democrats. What is misunderstood is there is a growing disgust for both parties.

Things must change all right. The change we need is to return to adhering to the Constitution.

Hope you enjoy this pictorial collage from our local tea party.

Feel free to post a picture of your tea party in the comment section.

Jay Williams

“We Do Not See Ourselves As A Christian Nation”---Pandering Or A Proclamation?

Jay Williams, Mortgage Loan Officer Getting You The Right Loan (Greenville, NC) — Sat, 11 Apr 2009 11:04:11 -0500

I must admit that when I first learned President Obama stated the “we do not see ourselves as a Christian nation” I was quite distressed. Why would he say this during Holy Week while in a predominately Muslim nation?

I kept asking myself, what was the point? The two conclusions my feeble mind deduced is he is either pandering or he is making a proclamation.

Pandering

Was he just pandering to the Muslims, Agnostics, Atheists, secularists, etc? This is certainly possible. He spent most of the week in Europe pandering by apologizing for American arrogance. His perception not mine!

If this was the case, again what was the point? Are the militant Muslims going to like us better? Are the radical atheists and secularists going to exhibit less vitriol towards Christianity?

The President is more naïve than even I think he is, if he believes making this statement will help us to all just get along.

Why would he feel the need to downplay his nation’s historical roots? This is a nation that was settled by those seeking religious freedom. And yes, almost all of those early settlers seeking religious freedom were some form of Christian sect.

Religious freedom is, or at least has been constitutionally protected in the United States! Although Christians in America are being increasingly tread upon.

We need not look to far and wide in many Muslim countries to understand there is an extreme lack of religious freedom and tolerance. In many of these countries they will persecute and perhaps kill you if you are another faith. Muslim sects will kill each other over their beliefs.

I know you secularists and atheists are jumping up and down saying centuries ago Christians have persecuted and killed non-believers and those of varying Christian sects. There is no denying that historical fact. But it has not been the case in the United States of America!

If President Obama was pandering what did he hope to accomplish? Share with me your thoughts.

Proclamation

My other thought is Obama was making a Presidential Proclamation. Declaring to all the world that the United States was not a Christian nation. This has no historical basis, and would serve as a departure.

Albeit, it is a departure that has been building for the past couple of generations. It reminds me of the Emancipation Proclamation. This nation struggled with the scourge of slavery for two or three generations. President Lincoln finally ended slavery with his proclamation.

President Lincoln’s proclamation was just and long overdue. If President Obama statement was a proclamation I feel tread upon!

I know, I know you secularist and atheists out there are again jumping up and down out there. You are screaming how it is just not true that most of the founding fathers were not Christians. But this is simply not true!

Let’s just lift a few quotes, as a representative sampling, from those that are considered deists or secularists:

John Adams:
“ The general principles upon which the Fathers achieved independence were the general principals of Christianity… I will avow that I believed and now believe that those general principles of Christianity are as eternal and immutable as the existence and attributes of God.”
• “[July 4th] ought to be commemorated as the day of deliverance by solemn acts of devotion to God Almighty.”
–John Adams in a letter written to Abigail on the day the Declaration was approved by Congress

Benjamin Franklin:
“ God governs in the affairs of man. And if a sparrow cannot fall to the ground without his notice, is it probable that an empire can rise without His aid? We have been assured in the Sacred Writings that except the Lord build the house, they labor in vain that build it. I firmly believe this. I also believe that, without His concurring aid, we shall succeed in this political building no better than the builders of Babel” –Constitutional Convention of 1787 | original manuscript of this speech

John Jay:
“ Providence has given to our people the choice of their rulers, and it is the duty, as well as the privilege and interest of our Christian nation to select and prefer Christians for their rulers.” Source: October 12, 1816. The Correspondence and Public Papers of John Jay,

Thomas Jefferson:

“ The doctrines of Jesus are simple, and tend to all the happiness of man.”

“Of all the systems of morality, ancient or modern which have come under my observation, none appears to me so pure as that of Jesus.”

"I am a real Christian, that is to say, a disciple of the doctrines of Jesus."

James Madison:

“We have staked the whole future of American civilization, not upon the power of government, far from it. We’ve staked the future of all our political institutions upon our capacity…to sustain ourselves according to the Ten Commandments of God.” [1778 to the General Assembly of the State of Virginia]`

Excerpt from Supreme Court Ruling Church of the Holy Trinity v. United States, 143 U.S. 457 (1892)

“But, beyond all these matters, no purpose of action against religion can be imputed to any legislation, state or national, because this is a religious people. This is historically true.”

For those you that still doubt Christianity in America let me invite you to this site from the Library of Congress. Click Here.

If this was a Presidential Proclamation then I reject it. I will not be tread upon. It’s time for the Christian community to rise up and not take it any more. What do you think?

Happy Easter, from a citizen that does consider this a Christian nation.

Jay Williams

Win Or Go Home!—The National Championship

Jay Williams, Mortgage Loan Officer Getting You The Right Loan (Greenville, NC) — Sun, 05 Apr 2009 14:12:55 -0500

It’s that time of year. The first Monday in April marks the men’s basketball NCAA National Championship Game.

This year will be one of great interest to me and the hometown hero’s of the University of North Carolina with take on the Spartans of Michigan State.

I have always considered March Madness to be the hardest college national championship to win. Many years as you come to this weekend your team is out of the tournament.

One and done. Teams are so evenly matched and any game can go any way. Win or go home!

I’ve lucky however. I live in North Carolina. Did you know there are only 14 schools that have ever won more than 1 national championship, yes that’s right. Three of those are from the state of North Carolina.

The Wolfpack of NC State have won 2, Duke has emerged victorious 3 times. The official record book only counts 4 National Championships to the Tarheels. But according to UNC they have won 5 as they count 1924 as a championship year. This was before the NCAA started keeping track in 1939.

One must give credit to Michigan State as being on of the 14 schools with multiple championships in 1979 and again in 2000.

But this blog is about the Tarheels of the University of North Carolina. Did you know?

UNC can move into a tie with Indiana with 5 championships with a win Monday night
The Tarheels have moved into a tie for third with Duke for number of championship game appearances at 9
Carolina is ranked # 1 in Final Four Appearances with 18
The Heels have won the most NCAA tournament games, 102

This promises to be a good game between two basket ball schools with great tradition.

In case you missed the games Saturday or just want to watch the highlights, enjoy

If you are a Tarheel supporter weigh in with your comments-------OK, if you are a Spartan fan we would like to hear from you as well.

Go Heels!

Jay Williams

Finally A Bit Of Sanity—Help May Be On The Horizon For The Financial Crisis

Jay Williams, Mortgage Loan Officer Getting You The Right Loan (Greenville, NC) — Sat, 04 Apr 2009 09:49:43 -0500

One of the major culprits of the current financial crisis, in my opinion, has been a complex and little understood accounting principle. This accounting principle is called “mark to market”.

I am no accountant and will be the first to admit I don’t fully understand this hideously complex financial accounting standard. So I have to think of it in terms I understand.

For the purpose of this prose let’s suppose you live in a sub-division. You bought your home for $250,000. Your current mortgage balance is $200,000. You are paying your mortgage payments on time and you have no intention of selling your home.

However, the terms of your mortgage is such that every three months the value of your home and your outstanding mortgage balance is subject to “mark to market” accounting.

During the most recent three months your neighbor had to relocate due to a job change and she sold her home for $200,000 or 80% of the prior market value. Your mortgage holder contacts you and says “Your home is worth 20% less than it was three months ago and under the terms of our agreement we need for you to reduce your mortgage balance by 20%.” By the way we need this $40,000 today. Somehow you make this payment and you now owe $160,000.

Another three months goes by and one of your neighbors has lost their job, went into foreclosure and the property was sold for $160,000 or 20% less than the last sale. Your mortgage holder comes to you requesting $32,000 and again yes you need to pay this today. You drain your resources and now you owe $128,000.

Over the next three month there were no sales in you neighborhood. Your mortgage holder makes some calls asking investors what they would pay for homes in your neighborhood. Due to the uncertainty they receive indications that investors would only pay $80,000 if they were to purchase today. You mortgage holder then contacts you and tells you we need for you to reduce your mortgage by another $64,000. You pick up the phone and call your Uncle Sam and scream help I need a bailout.

Do you think this is insane?

This is an oversimplification of what has been happening to the financial institutions with the huge holdings of mortgage backed securities. You don’t hear much about this in the media. It is much more fun to talk about evil lenders and irresponsible home owners.

Much of this financial crisis could have been averted and cost a whole lot less money if action had been taken on this financial accounting principle. But why did this happen in this cycle? The rules on this accounting principle were set by Congress just a few years ago; A legislative overreaction after the fall of Enron, WorldCom, etc.

The good news is this week the Financial Accounting Standards Board, this week, has announced some relaxing of these “mark to market” accounting rules.

Crisis leads to Congressional and regulatory over reach that yields huge unintended consequences down the road. What will we reap in the future? Only time will tell.

One imminently facing us on the horizon is the new appraisal requirement for the Market Conditions Addendum. Read my blog on this subject.

Comments are always welcome. I would like to hear your opinion.

Jay Williams

You Better Price Your Listings Right----Appraisal Changes

Jay Williams, Mortgage Loan Officer Getting You The Right Loan (Greenville, NC) — Sat, 28 Mar 2009 11:55:10 -0500

This week FHA issued a mortgagee letter to respond to declining markets. These changes go into effect for all FHA appraisals beginning April 1, 2009. This aligns the FHA appraisal requirements with FNMA which also requires new reporting as of April 1.

Appraisers are currently expected to note the trend of property values. Are property values increasing, stable of declining? They are to provide conclusions as to the supply of properties in the subject neighborhood. Is there a shortage, in-balance or over supply of homes for sale? Additionally appraisers are to provide data of the marketing time for properties for sale. Is it taking under three months, three to six months or over six months to sell the property?

All appraisals performed beginning April 1 must include the Fannie Mae for 1004/MC, the market conditions Addendum. This form addresses the following data points to determine the current market conditions:

At least 2 comparable sales must be within 90 days of the appraisal date
A minimum of 2 active listings or pending sales in addition to the three closed comparables
Bracketed listing using both dwelling size and sales price when possible
Adjust active listings to reflect the list to sales price ratio
Adjust pending sales to reflect contract sales price when possible
Include original list price and any revised list prices
Reconciliation of adjusted values of active or pending sales with adjusted values of closed comparable sales
Absorption Rate Analysis
Known or reported sales concessions on active and pending sales

As a real estate professional let me encourage you to learn about the market conditions addendum. I am including a link to Fannie Mae’s training for this.

Also included is another link to a video presentation for the explanation and training for this addendum. Click here to view the video presentation.

It strikes me that pricing your listings correctly may be more important than ever. Part of this analysis includes (a) the ratio of list price to sales price and (b) the tracking of include the original list price, any revised list prices, and total days on the market (DOM).

My opinion is this, do not contribute to you market area being deemed a declining market by allowing your sellers to over price their property to today’s market. This will have the effect of decreasing the ratio of list price to sales price as well as increasing the number of days on the market.

An additional opinion, if you are working with low ball buyers, let them know this is having a detrimental effect on the market. Paying a fair price is appropriate, but taking advantage of sellers is hurting everyone and is contributing to the housing difficulties. Maybe you should think of not representing those that continue to make low ball offer after low ball offer.

Real estate agents, I welcome your thoughts and comments on the impact this additional analysis by appraisers may have in your market.

Appraisers, please weigh in on this topic. I am interested in what you know and think.

Jay Williams

www.myhomeloanwithjay.com

Oh I’m Outraged Over the AIG Bonuses—But Not Over Them Being Paid

Jay Williams, Mortgage Loan Officer Getting You The Right Loan (Greenville, NC) — Sun, 22 Mar 2009 13:09:48 -0500

As the news this week unfolded over the retention bonuses being paid to AIG executives I found myself becoming increasingly outraged. My outrage however, has not been directed over the bonuses being paid. This post is not about the merits of paying the bonuses.

No, rather my outrage is over:

The government has known about these bonuses all along
This week, they have lied through their teeth about not knowing
That Congress would seek an unconstitutional measure to correct their incompetence

The Bonuses Were Known

There is no way I believe the powers that be did not know about these retention bonuses before hand. These were pre-existing contracts. It is not uncommon for business to utilize end of year bonuses. Government agents are now on the board of AIG. For Congress and the Administration to feign this outrage as if they did not know is disingenuous. Let me say it again, these were pre-existing employment contracts! If they did not know, are we to think them incompetent? If they did know, are they playing us for fools? Maybe, I should temper my thoughts. After all, Congress passed a stimulus package they never read. Could it be they did not know?

Lying Through Their Teeth

Everyone is ducking for cover now that the payments of the retention bonuses have been completed. Geithner, says he did not know about the bonuses until March 10^th. BS! Is this possibly parsing of words and this really means that on March 10^th he learned the checks were being distributed? Please don’t lie to my face!

The worst, however, is Sen. Christopher Dodd. He has the gall to stand before us and tell us he did not know the language was inserted about exempting restrictions on bonuses if contracted before February 11, 2009. Senator Dodd is it too much to ask, if you are not going to read the entire bill you might at least read the amendment that has your name on it?

Fast forward! Then Dodd backtracks and admits he had conversations with the administration about inserting the language. A plea to the people of Connecticut PLEASE HELP THIS MAN FIND OTHER EMPLOYMENT!

Unconstitutional Measures

Now to continue the fakery of Congress’s outrage there are two bills being considered to tax the bonuses. One has already passed the house that will tax the bonuses at 90%. This is a bill of attainder and is unconstitutional! Article I, Section 9; No Bill of Attainder or ex post facto Law shall be passed. You can not single out a group for punishment.

While I am disgusted that our elected officials think us such idiots to believe they did not know in advance of this situation or that they would so blatantly lie to us this is not my biggest concern. My biggest concern is the move to tax the bonuses at a rate of 90%.

The figure of $250,000 has come up a number times during the Presidential campaign and since. This has now become the definition of rich. “Everyone making less than $250,000 will receive a tax cut” “Those making more than $250,000 will have their taxes increased”

Let me state for the record I have never made $250,000 or more a year, but I do not begrudge those that do. What I see as the end result of this unconstitutional attempt on AIG bonuses is the passage of exorbitantly high taxes on those making more than $250,000 per year. The only question is will this just be for certain groups or will it be for everyone in those income brackets and above?

Do we really want to choke off the entrepreneurial spirit? Do we really want to strip out the talent needed to run our corporations? Do we really want to see talented people leave the country? Do we really want to see corporations move off shore more than they already are? If you do, let Congress continue down this path.

Concerned? Yes!

Outraged? With out a doubt!

Jay Williams

www.myhomeloanwithjay.com

How St. Patrick’s Day Came To Have Special Meaning For Me

Jay Williams, Mortgage Loan Officer Getting You The Right Loan (Greenville, NC) — Tue, 17 Mar 2009 17:25:29 -0500

I confess that growing up I didn’t get the whole idea of St. Patrick’s Day. I suppose that growing up in the South and being Protestant probably had a lot to do with my apathy for this holiday.

I was vaguely aware that far off places like New York and Chicago had big celebrations, parades and such. I had some knowledge of snakes or potatoes I wasn’t sure which, nor did I know what it meant.

I knew that shamrocks looked like four leaf clover to me. My concept of leprechauns came primarily from the cereal, Lucky Charms.

I learned quickly, while in elementary school, that if you did not wear green on March 17 you would have a miserable day. One day of being pinched all day was enough reinforcement to pay attention to the calendar in March!

While I was at the University of Georgia I had several fraternity brothers that were from Savannah. St. Patrick’s Day was a big deal in Savannah. I did not even know that until my acquaintance with those guys.

Since that time I’ve learned that St’ Patrick’s Day was established to commemorate the death of Patrick on March 17, 460. Wow, that was a long time ago!

St. Patrick is the patron saint of Ireland. We spent six years in captivity and later escaped and went back to England. While back in England he spent 15 years preparing for the priesthood. He then returned to Ireland as a missionary.

There is the story of St. Patrick banishing snakes from Ireland. This is now considered a legend and it is thought that snakes never inhabited the island.

One thing I did not know is that that are approximately nine times more Irish living in the United States than currently live in Ireland. The Irish immigrated in large numbers to the United States during the potato famine of 1845. This must have been where as I child I thought St. Patrick’s Day had something to do with potatoes.

I recently learned that the traditional meal on St. Patrick’s Day, in the US, is corned beef and cabbage. I like corned beef and cabbage, so that is OK with me.

So that tells you how little I knew and the few things I learned about St. Patrick’s Day. However, that does not tell you how St’ Patrick’s Day came to have meaning for me.

March 17, 1979 was the day that brought meaning to this day for me!

That was the day in the small chapel of Northwood Temple in Fayetteville, NC I walked down the aisle with my bride. Now that was a day to remember and commemorate!

This year, March 17, 2009, marks our 30^th anniversary. For 30 years now, ole St. Patrick’s Day has held a special meaning for me. Not snakes, shamrocks, leprechaun’s green rivers, green beer, corned beef and cabbage or even potatoes. Just 30 years of a lifetime.

Happy Anniversary Sarah, I love you!

Jay Williams

www.myhomeloanwithjay.com

The Doctrine Of Unintended Consequences—Currently In Play For The Mortgage Market

Jay Williams, Mortgage Loan Officer Getting You The Right Loan (Greenville, NC) — Sat, 14 Mar 2009 10:22:51 -0500

I recently completed a six part review the Homeowners Affordability and Stability Plan. In many of these posts, I mused about the Unintended Consequences that may be associated with elements of this plan.

As a disclaimer I must inform you this six part series was written between the time of the announcement of the plan and the March 4^th date of details being released. I will need to conduct further review now that details have been released. I took a break and wrote about other subjects last weekend and Good News I’ve been really busy with my day job, originating mortgages in Greenville, NC.

The Obama administration, in the Affordability, section of the plan advanced the concept that borrowers with loan to value exceeding 80% could not benefit from the current refinance environment. This left me scratching my head, because this was, in large part, untrue. Then the light went on, there will be unintended consequences!

In the conventional lending space changes aplenty are occurring for both pricing and loan program guidelines. Let me share with you just a few! This is by no means an all inclusive list. It would take too long to detail them all. In fact, I haven’t even absorbed them all. Good News, I’ve bee too busy booking loans ahead of the changes!

Coming Soon To A Lender Near You, If Not Already Implemented
*Change*	*Old Guidelines*	*New Guidelines*
LTV’s > 95%	Allowed under certain conforming programs	The maximum LTV is 95%
LTV’s > 80%	The minimum credit score was 620 on conforming programs	The minimum credit score is now 680 on conforming programs for LTV’s > 80%
Second Homes	The maximum LTV was 90% on conforming programs	The maximum LTV is now 80% for second homes
Cash-Out	The maximum LTV was 85% on conforming programs	The maximum LTV is 80% for cash-out loans on conforming programs. And paying off subordinate liens (second mortgages) is now deemed as cash out and is not allowed above 80%
Maximum Debt to Income Ratio	The maximum DTI was 45% for LTV’s > 80% or determined by automated underwriting systems	The maximum DTI is now 41% for LTV’s above 80% on conforming loans regardless of the automated underwriting system findings
Reserves	Were determined by automated underwriting	Minimum two months reserves and stricter requirements may apply for all conforming loans above 80% LTV

Well, I’m no longer scratching my head! What was untrue is becoming true. I haven’t even touched pricing changes and I think I will save that for another day.

I will share additional changes for soft markets. Any of you ever heard of the soft market policies? I thought so!

Soft Market Guideline Changes Coming Soon To A Lender Near You, If Not Already Implemented
Credit Score	The minimum credit score was 680 for LTV’s between 80.01%--90%	The minimum credit score will be 700
Condominiums	Condos were allowed up to 95% LTV	The maximum LTV is now 85% for condos in soft markets
Interest Only	Previously, interest only was allowed for LTV’s 80.01%--90%	Interest only no longer allowed for LTV’s > 80% in soft markets

Mortgage clients, now more than ever, you will need to be working with a knowledgeable home loan professional!

Realtors and builders, if you are not firmly aligning your business model to include a true partnership with a trusted mortgage professional, then you can expect messy and difficult transactions.

So here we go, expect more Unintended Consequences! Wait a minute are the consequences intentional? You be the judge!!!

As always, your comments are welcome.

Related Posts

Jay Williams

www.myhomeloanwithjay.com

Is News Of Declining Home Prices Keeping YOU From Buying?----Dig Deeper!

Jay Williams, Mortgage Loan Officer Getting You The Right Loan (Greenville, NC) — Sun, 08 Mar 2009 18:20:55 -0500

The news media reports tell you that home values have experienced the largest declines in many, many years. Has this become an obstacle in your decision for purchasing a home?

I can understand your anxiety. Who wants to purchase a home when you believe it will immediately decline in value?

Understand this, real estate is local!! The new media reports national trends. Very rarely, if ever, do they dig deeper through the report.

Just a few days ago the Federal Housing Finance Agency published the latest Housing Price Report for the quarter ending December 31, 2008. Yes, this report disclosed that the purchase-only price index fell 3.4% in the fourth quarter. This is the largest quarterly decline in the 18 year history of this index. The all-transactions index, which includes appraised values deriving from refinance activity, fell 4.5% during 2008.

To view the entire Federal Housing Agency report click here.

What about your local area? How have home values performed in your location? Is anyone reporting to you this information?

Let me share with you the statistics in my location. Let me first share with the data for my state, North Carolina. The purchase only index reflects that home prices declined 3.66% in 2008. But did you know that over a 5 year period that home prices in North Carolina have increased 21.64%? Would you believe that since 1991 that home values in my state have increased 93.87%?. This is the data contained in the report.

Let me take you a bit deeper and give you information for my home location. In Greenville, NC home values declined 0.38% in 2008, but have increased 18.25% over the most recent 5 year period, according to the all transactions home price index.

Why don’t we look at this in terms of dollars rather than percentages? For every $100,000 in values home prices declined $380 in the last year. In Greenville, NC home values have increased $18,250 over the last 5 years per $100,000 in value.

Data I don’t have is what is occurring in the sub-division that you are interested in. Contact your real estate agent and request information by sub-division. What were homes selling for in your chosen sub-division a year ago, two years ago? What have homes been selling for recently? After all, all real estate is local.

The phrase, “this is a buyers market”, should tell you it is time to buy! With proper research you can find homes at a good value in neighborhoods that historically do well.

I will tell you this, if you are planning to buy with the intent to sell within the next two years, then this many not be the market for you. If you are planning to purchase a home and intend to continue to own that property for longer than 5 years, there may be no better time than now to purchase that home.

Remember, you are considering purchasing a home. A place to protect you from the cold and rain.

Just some quick advice:

Meet with a trusted knowledgeable mortgage lender to determine both your pre-approval and comfort level for the price range of the home you are looking to buy

Engage a professional real estate agent to provide you with market data in your location. Have them provide you with sales information for the past couple of years for your desired neighborhoods.

Be patient, be selective and dig deep. You will be OK.

This is your moment. It is a buyers market!

Jay Williams

http://www.myhomeloanwithjay.com

Facebook Business Pages---Is This The Change We’ve Been Looking For?

Jay Williams, Mortgage Loan Officer Getting You The Right Loan (Greenville, NC) — Sat, 07 Mar 2009 10:49:34 -0600

I’ve been spending some time this morning reviewing the changes Facebookhas made to its business page application. I think I like what I see!

Essentially the Facebookbusiness page will have the same look and feel as your facebookuser page. Business pages will now have customizable tabs, which were not available previously.

A HUGE enhancement is that soon posts by your business page will appear in the News Feed of you “fans”. And comments by your fans will go to their friends News Feeds. This, in my mind, will accomplish a couple of things:

Drive more traffic to your business page, by including the hyperlink to your page
Assist with the conflict of, is facebookfor personal use or does it include business promotion?

Assist with the conflict of, is facebookfor personal use or does it include business promotion? An example of how this could work is, I post a personal status update from my user profile and of course that is personal. If I want to post a business related status update I do so from my business page and it is then clear this is business related. This can be a great tool in delineating the merging of the personal and business in this popular social networking site.

Your business page will include:

A wall tab
An info tab—this allows you to share key information about your business
Boxes tab—where you can add applications to your business page

Your business page may also have:

Discussion boards
Video
Photos
Events
Flash Player
Reviews
Additional application that you may choose or develop

I still feel it is cumbersome to build a fan base for your business page.It is not as easy as adding friends. However, I’ve not been aggressive in building the fan base with the share application as I possibly should be. I think I’m going to start using the share feature more frequently.

If you are interested in creating you own business page click here for the facebookbusiness page guide.

As a “community” I think we can learn how each other may be using the facebookbusiness pages.

I invite you to become a fan of my page!

If you have a facebook business page or if you create one post your link in the comments and I will gladly become a fan of your page.

Related Facebook Posts

Build a Fan Base

Facebook Controversy

Jay Williams

www.myhomeloanwithjay.com

Looking For Acorns---Homeowner Affordability And Stability Plan---Part 2(E)

Jay Williams, Mortgage Loan Officer Getting You The Right Loan (Greenville, NC) — Sun, 01 Mar 2009 09:00:01 -0600

The final component mentioned in the Stability section of the White House housing plan has a stated goal of supporting local communities. Information concerning this in the Executive Summary is, at best, sketchy. We will want to review the details, once they are released March 4^th.

Strengthening FHA Programs and Providing Support for Local Communities

Ease restrictions in Federal Housing Administration Programs, Including Hope for Homeowners
Strengthening Communities Hardest Hit by the Financial Housing Crisis

The current Hope for Homeowners, as I understand, has experienced limited success. This initiative was designed to assist struggling homeowners with an avenue for refinancing. Under the Obama plan, the following issues are to be addressed:

Reduce fees paid by borrowers
Provide greater flexibility for lenders to modify loans in trouble
Allow for borrowers with higher debt ratios to qualify
Allow payments to servicers of existing loans

The “strengthening communities” is an area for which, in my opinion, we should keep a watchful eye. At first blush, you may think “this sounds like a worthy goal”. As with most government programs the devil will be in the details.

HUD will award $2 billion in competitive Neighborhood Stabilization Program grants for innovative programs to reduce foreclosures
Provide and additional $1.5 billion to provide renter assistance to “reduce homelessness and entry into shelters”

I have not had any direct experience with the Hope for Homeowners program. Therefore, I am unfamiliar with why it has not been more effective. For those of you that have worked with Hope for Homeowners, I am interested in you sharing your experiences.

I find myself viewing the Neighborhood Stabilization Grant program with suspicion and curiosity. If programs are made available in my market area I think it will be incumbent to become familiar with the programs. If for no other reason than being a professional resource to home owners.

My suspicions arise from what will be the underlying or hidden agenda from the groups that will receive these funds. I know I have not seen the details yet, but this is one for which I am going to keep a watchful eye.

I am imagining “community organizations” here. I don’t know about you, but I am going to be looking for ACORN. This has all the possibility of government corruption. Pay offs to groups that assist legislators win elections and re-elections.

We as voters need to be ferreting out where this money is going. What is the connection between the community organization and the congressmen in that particular district?

Maybe I’m being too cynical. Nonetheless, I am looking for ACORNS!

What are your thoughts? Am I being too cynical? Do you know of worthy community organizations, in your area that can apply funds like this appropriately?

Comments Welcome!

Related Posts

Affordable refinancing

Stability

Loan Modifications

Consistent Guidelines

Here Comes the Judge

What the Fed

Jay Williams

www.myhomeloanwithjay.com

Here Comes The Judge—Homeowner Affordability And Stability Plan----Part 2 (D)

Jay Williams, Mortgage Loan Officer Getting You The Right Loan (Greenville, NC) — Sat, 28 Feb 2009 10:15:26 -0600

I have been breaking down the Homeowner Affordability and Stability Plan and providing a review of the plan’s various components. We are awaiting more details to be provided by the Administration, due to be released March 4^th. The source of this review comes from the White House.

The component I am reviewing today is one for which I have great trepidation. I’m interested in hearing what you think.

Allowing Judicial Modifications of Home Mortgages During Bankruptcy for Borrowers Who Have Run Out of Options

This provision will allow bankruptcy judges to modify mortgages. (OH MY!)

The portion of mortgage loan balances in excess of mortgage balances will be treated as unsecured debt
The judge will then develop an affordable plan for homeowners to continue making payments
Homeowners must have first requested loan modifications from their lender and substantiate they have complied with request to furnish essential information
Legislation will be forthcoming to incorporate loans guaranteed FHA and VA loans
Last, but certainly not least and I quote “This provision will apply only to existing mortgages under Fannie Mae and Freddie Mac conforming loan limits, so that millionaire homes don’t clog the bankruptcy courts”

I don’t know about you, but the idea of granting the power to modify loans to judges scares me to death. I don’t have tremendous faith in our judges. I often hear of goof-ball decisions being handed down.

I can just see the bankruptcy lawyers celebrating over this. Will this have the unintended consequence of encouraging homeowners to file bankruptcy? Judges can reduce the balance and establish a repayment plan for the remaining balance? Isn’t this where a number of people will actually want to end up?

If you are going to have this provision, what’s up with limiting this option to those at or below the conforming loan limit? Does this administration just hate people of greater means? What about those states where property values, several years ago, had climbed to the point that a large number of mortgages were above the conforming limit? Is there going to be no assistance in some the hardest hit areas?

Can someone out there calm my fears? Or do you anticipate something else that will make me pull my hair out? I’m looking forward to hearing from you!

Gird up your loins!

Next Up

Looking for acorns

Related Posts

Affordable refinancing

Stability

Loan Modifications

Consistent Guidelines

What the Fed

Jay Williams

www.myhomeloanwithjay.com

Homeowner Affordability And Stability Plan----Loan Modifications----Stability Parts 2(B&C)

Jay Williams, Mortgage Loan Officer Getting You The Right Loan (Greenville, NC) — Fri, 27 Feb 2009 22:31:13 -0600

The details of the President’s Homeowner Affordability and Stability Plan are to be announced on March 4^th. I have been reviewing the executive summary and fact sheet for the plan which is posted on the White House web site. Click here for your reading enjoyment.

Under the stability section components 2 (B&C) read as follows

2(B) Clear and Consistent Guidelines for Loan Modification

2(C) Requiring All Financial Stability Plan Recipients to Use Guidance for Loan Modifications

Clear and Consistent Guidelines for Loan Modifications

The premise for this component is that mortgage servicers, in some cases, have not common sense loan modifications for fear of incurring lawsuits. The fact there have not been consistent guidelines that pertain to everyone opens the servicers up to litigation based upon the potential disparity of modifications offered.

The FDIC, FHA, the Federal Housing Finance Agency and banking and credit union regulators are to be working with the President Obama’s administration to “bring order and consistency to foreclosure mitigation”.

Fannie Mae and Freddie Mac are to use these loan modification guidelines on all loans they guarantee. All loans owned or guaranteed by the Federal government will apply the same guidelines. This will include loans guaranteed or owned by Ginnie Mae, FHA, the FDIC, Federal Reserve, the Treasury Department, VA and the Department of Agriculture. It is the Administrations intent to apply these loan modification guidelines across the entire mortgage industry.

My opinion: As with most things I can see the pros and cons with this. On one hand it does seem appropriate to have a set guidelines so they can be applied evenly across the board. On the other hand guidelines that are to rigid, can prevent the kind of flexibility that may be needed. There will need to be the ability to deal with exceptions.

An issue that his developing with new loan applications is that underwriters all too often are unwilling to underwrite except under strict application of loan program guidelines. Exceptions are not allowed in cases where it makes sense.

Requiring All Financial Stability Plan Recipients to Use Guidance for Loan Modifications

It’s my way or the highway. Plain and simple and don’t you forget it!

What is your opinion? What have you heard of the loan modification process to this point? What do you see as possible unintended consequences? Is this the change we’ve been looking for?

Next Up

Judicial Modifications

Related Homeowner Affordability and Stability Posts

Jay Williams

www.myhomeloanwithjay.com

Reaching Up To 4 Million At-Risk Homeowners—Housing Affordability And Stability Plan—Part 2 (A)

Jay Williams, Mortgage Loan Officer Getting You The Right Loan (Greenville, NC) — Sun, 22 Feb 2009 23:18:40 -0600

Reviewing the Housing Affordability and Stability Plan I intend to dig a little deeper in the leg directed toward stability. This initiative creates $75 billion to reach up to 3 to 4 million at-risk homeowners. Oh my!!!

I wrote about the affordability section earlier and you can view that post by clicking here. I also have written an overview of the stability component. You can view the entire plan by going to the White House web site.

Section A of the stability component is an initiative to reach up to 3 to 4 million at-risk homeowners. This is being presented as a shared partnership to help people “struggling” to meet their mortgage payments. It also strives to help stabilize home prices. Sounds noble, but how is it supposed to work?

Who is this program designed to reach?

At-risk homeowners—focusing on borrowers that have high mortgage payments as it relates to their gross income. It also intends to address in someway those that owe more than their home is worth. These borrowers may be eligible for loan modifications. Eligibility for the loan modifications will end in three years.
Homeowners that have not missed payments—the premise is to try and reach homeowners that have not yet gone delinquent, but may be in danger of doing so. This, in my opinion, is a welcome agenda. Up to this point to be eligible for loan modifications or short sales you must be at least 30 days delinquent. By then there is little incentive for the homeowners to fight it out. You may as well give up and go into foreclosure.
Restrictions—this is for owner occupied homes only and is limited to mortgagesless than or equal to the conforming loan limits of Fannie Mae and Freddie Mac. This is generally $417,000. This restriction to the conforming loan limit concers me. In many areas there are high levels of mortgage balances above that limit. Where is the help for that homeowner?
Provisions for people that have high total debt levels—for this you are eligible if your total debt ratio (housing payments plus other monthly debt payments/monthly gross income) is 55% or greater. You will be required to enter a HUD certified debt counseling program as a condition to the loan modification.

How does the program work?

Reduce monthly payments—If identified and accepted for loan modification the first target is to reduce the PITI payments down to a level of 38% of gross monthly income. Want to know what PITI means, click here. If the lender will further reduce the PITI to 31% the government will share in the cost of that reduction with the lender. Reducing from 38% to 31% the government pays half. The lender could also opt to reduce the principal and as such the government would share in the same cost as described above. Modified payments would be in effect for 5 years
Incentives for servicers—Mortgage servicers that negotiate loan modifications under this program, will receive $1,000.00. They will continue to receive $1,000 for up to three years if the homeowner remains current. Expect a lot of call if you are running a few days late!
Additional incentives—If the modification is negotiated while the borrower is still current mortage servicers will receive an additional $1,500.00 and mortgage holders will receive $500.00. Will the servicers and holders focus on smaller loan balances first? Greater percentage of income received on smaller loan balances.
Additional borrower incentives—After modification if the homeowner will remain current on their payments the will receive a $1,000.00 credit to their principal balance for each of the five years. Lower payments and a possible $5,000.00 principal reduction, uh what are we doing for homeowners that are not overextended?
Home price decline reserve payments—Set up with the FDIC a $10 billion insurance fund that will tied to a housing price index. On modified loans if home prices continue to decline holders or mortgages will be provided insurance payments. Payments can be set aside as reserves against potential losses. Any one see the possibility of the costs on this running away with us?

Measuring Effectiveness

Protecting taxpayers—The program states that if the expected cost of the loan modification for the lender is higher than the direct cost of foreclosure, the borrower will not be eligible. Sounds like a catch here! The Treasury will not provide subsidies to reduce interest rates below 2%. Is there any one out there that would like a 2% mortgage?
Counseling and Outreach—HUD will make available funding for non-profit counseling to improve outreach and communications. Focusing on disadvantaged communities. Can anyone say ACORN?
Oversight and tracking data—A standardized data gathering and reporting system that will be reviewed quarterly. The quarterly meetings will be with the Treasury, FDIC, the Federal Reserve, HUD and the Federal Housing Finance Agency. I wonder how much the oversight reporting will cost, what’s left of, private industry? Is this going to be another Sarbanes-Oxley? A system with such high cost that the financial institutions (those not nationalized) will just opt out?
Incentives to take alternatives to foreclosures—Lenders to receive incentives to completing short sales and deed in lieu of foreclosure. No cost estimates or provisions listed on this one. We all know how well the short sale provision has been working.

Well there you have it, fleshing out details now available addressing stability of the Obama plan. More details are to be made available from the government on March 4^th.

Unintended consequences, there will be many. Do you think this is a good thing? What questions do you have? What problems or opportunities do you see?

I would like to hear from you!

Stay tuned for additional posts on the Homeowner Affordability and Stability Plan

Affordability

Stability

What the Fed is the Treasury Department doing?

Jay Williams

www.myhomeloanwithjay.com

Homeowner Affordability And Stability Plan—Part 2—Stability

Jay Williams, Mortgage Loan Officer Getting You The Right Loan (Greenville, NC) — Sun, 22 Feb 2009 12:53:47 -0600

This week President Obama announced the Homeowner Affordability and Stability Plan. You can view a summary of this plan on the White House web site. Additional details are to be forthcoming on March 4^th.

The three legs of this plan are:

Refinancing for up to 4 to 5 million responsible homeowners to make their mortgages more affordable
A $75 billion homeowner initiative to reach up to 3 to 4 million at-risk homeowners
Supporting low mortgage rates by strengthening confidence in Fannie and Freddie Mac

Earlier I wrote a blog on the 1^st leg, refinancing. Now I would like to share with you information on the second leg, stability! This component actually includes 5 sections. I will further elaborate on some of these sections in future posts.

A $75 billion homeowner stability initiative to prevent foreclosures and help responsible families stay in their homes

A homeowner stability initiative to reach 3 to 4 million at-risk homeowners
Clear and consistent guidelines for loan modifications
Requiring all financial stability plan recipients to use guidance for loan modifications
Allowing judicial modifications of home mortgages during bankruptcy for borrowers who have run out of options
Strengthening FHA programs and providing support for local communities

President Obama declares that this is designed to reach out to homeowners that are struggling to afford and make their mortgage payments. Further this will focus on subprime borrowers and those that took out exotic loans. It is an attempt to help those that will commit to making “reasonable” payments to stay in their homes.

These initiatives are for owner occupied properties. The programs will not be available for owners of second home or investment properties. Also, your loan balance cannot exceed current Fannie Mae and Freddie Mac loan limits. This does concern me for those areas where jumbo loans were prevalent. Where will the help come from in those areas?

The premise is that the plan will aid in stabilizing home prices. Certainly, this would be one the best consequences if successful, in my opinion.

Loan modifications will be available to homeowners even before they become delinquent on their mortgage. This is another premise that I find myself in agreement with. Currently, in many cases, if you are not behind on your mortgage you run into a dead end trying to modify your loan or negotiate a short sale.

The goal of the program is to reduce the monthly payments, for those that qualify, to levels they can afford. There are a series of financial incentives to the homeowner, mortgage servicers and mortgage holders to participate in the plan. I will discuss those incentives in greater detail in later posts.

So this concludes the overview of the stability leg the latest housing plan. I will provide additional detailed information on some of the components soon.

What do you think? What questions do you have? I am interested in your observations. What will be the unintended consequences?

Next

The $75 Billion

What The Fed Is The Treasury Department Doing

Jay Williams

www.myhomeloanwithjay.com

The President’s Homeowner Affordability and Stability Plan---Part 1

Jay Williams, Mortgage Loan Officer Getting You The Right Loan (Greenville, NC) — Sat, 21 Feb 2009 10:28:15 -0600

The White House, this week, announced the Homeowners Affordability and Stability Plan. An executive summary of the plan may be viewed on the White House web site.

President Obama’s plan for the housing market consists of three components:

Refinancing for up to 4 to 5 million responsible home owners to make mortgage payments more affordable
A $75 billion homeowner stability initiative to reach up to 3 to 4 million at-risk home owners
Supporting low mortgage rates by strengthening confidence in Fannie Mae and Freddie Mac

Today I want to address the first component of Obama’s plan. Understand that the final directives of this plan are to be announced on or around March 4^th. Specifics and changes to the plan are to be addressed then.

This writing expresses my views, opinions, agreements and concerns. You should not take these as facts because at this point in time we don’t have all the facts. Further details, again, are to be announced on or around March 4^th.

Part 1---Affordability: Provide low cost financing for responsible home owners to refinance.

This has been occurring prior to the announcement of this plan. Everyone in the mortgage lending industry is gleefully aware that we have been experiencing a refinance boom since mid December 2008. And the plan acknowledges this.

I wrote a post last month titled What The Fed Is The Treasury Department Doing discussing my opinion that the government wanted everyone that could possibly refinance to do so. So this component of the plan is not a surprise and has been in play for a few weeks.

What is interesting about the executive summary is that it specifically targets home owners that currently have conforming loans with Fannie Mae and Freddie Mac. This begs the question what if your current loan is not with Fannie Mae or Freddie Mac?

This part of the plan focuses on those home owners that current owe greater that 80% of the current value of the property up to as high as 105% of the current value. These are home owners that are not currently in default and they are paying their mortgage payments.

There are two premises stated for which I take issue:

That this group is having a difficult time securing refinancing
The program will provide the opportunity to refinance through the two institutions, Fannie Mae and Freddie Mac.

This group is having a difficult time refinancing?

The White House executive summary is declaring that if your loan to value is greater than 80% you are having a difficult time refinancing. This is a faulty premise!

I and other lenders are assisting customers like this every day now. There are programs available at today’s low rates. One of the examples uses in the President’s material is a borrower that would have a 90% loan to value for a refinance. It states they would be ineligible for Fannie Mae refinancing. I’m sorry this is just not true! This person can refinance and if they are using a conforming loan product it will require mortgage insurance. But it can be done.

One of the primary loan programs today for those with loan to value greater than 80% and less than or equal to 97.75% for a refinance, has been in existence since the 1930’s. This program is FHA.

So to say that a home owner can not take advantage of today’s low rates because they owe more than 80% of the value of the property is, in my opinion, factually inaccurate!

What I do agree with within the language of component 1, in the executive summary, is providing assistance for home owners with current loan to value between 97.75% and 105%. Component 2 does address those homeowners that have seen declines in value that place their current loan to value greater than 105%. I will be discussing that component in a later post. So stay tuned.

The program will provide the opportunity to refinance through the two institutions, Fannie Mae and Freddie Mac?

I really want to hear what this means. Does this mean that the borrower will go directly to Fannie Mae and Freddie Mac?

Does this mean that those of us that are loan officers directly dealing with the public everyday are going to have that source of business taken away from us?

Again, my opinion, what I read into this causes me concern. I can see a delivery system developed that retail mortgage loan officers working for direct lenders will not be able to participate. I can see a delivery system developed that will prevent loan officers working for correspondent lenders from participating. I can see a delivery system devised that will block mortgage brokers from entering this playing field. I can see a complete government takeover of the mortgage industry.

I hope I am wrong!!!

I do intend to address the other two components of the Homeowner Affordability and Stability Plan is subsequent posts.

I will also come back to this component as further details are made available.

In the mean time I am interested in your thoughts, praise or concerns with this program, at this time. A dialogue is in order. Our goal is and always has been to assist home owners. Let me know what you think.

Jay Williams

http://www.myhomeloanwithjay.com

The Chattering Class And Porky Amendments

Jay Williams, Mortgage Loan Officer Getting You The Right Loan (Greenville, NC) — Mon, 16 Feb 2009 09:28:10 -0600

I have been fuming for days now over Senator Charles Schumer’s comments regarding the American Recovery and Reinvestment Act. Arrogance is on full display and you can view this for yourself.

I suppose this and other blogs make me part of the “chattering class”. And I do care. I have tried to be fair with this new administration. However, I find myself being thoroughly disgusted.

In the effort of fairness the license to pass this omnibus spending bill was granted by the Bush Administration. The passage of TARP both in its size and speed by which it was passed laid the groundwork for what we have just received.

How many more times will we see huge spending bills passed? How many more times will we be told we must pass this now, we are facing an emergency? How many more monumental pieces of legislation will be passed without a single member of Congress reading the bill before voting?

I have continued to find the language of this legislation for myself. The day after the bill cleared the conference committee and was passed by both the House and the Senate I went to the White House web site to find the bill. At first, I thought I had found the bill. After clicking on the link here is what I found!

I would like to see the language pertaining to the home buyer’s tax credit for myself. I would like to drill down to provisions that I may support or not for myself. I would like to know more about this legislation without the media filter. I don’t know what to believe!

Today is President’s Day. I am deeply troubled with where this country is heading. We must continue to communicate with elected officials. If they continue to classify us as the “chattering class” then we must vote them out of office.

If anyone has found where this legislation is published please send me the link.

Your comments and dialogue are welcome.

Related Posts

The situation could not be more serious

Obama’s American Recovery and Reinvestment Plan

Obama-You have to give credit where credit is due

Jay Williams

http://www.myhomeloanwithjay.com

Your Home Loan Application----Series 5----Assets and Liabilities

Jay Williams, Mortgage Loan Officer Getting You The Right Loan (Greenville, NC) — Sun, 15 Feb 2009 16:30:23 -0600

This review of the Residential Loan Application addresses your assets and liabilities. Quite simply what do you own and what do you owe.

Liabilities

For the most part this information will be populated with data gathered from your credit report. I find that many are very cautious about having their credit report pulled. This is primarily driven by a concern that credit inquiries will reduce your credit score.

I’m not going to go very deep, in this post, about the credit report, because this subject will be best addressed by separate postings in greater detail. However, let me inform you that the credit scoring models have been revised, for several years now, as it pertains to credit inquiries. If you are shopping for a mortgage all credit inquiries pulled by various home loan providers within a 14 day period will be treated as just one credit inquiry.

Today, depending on the type of loan that is most suitable for you, your credit score will determine the interest rate and fees your mortgage provider will be able to offer you. A credit score will need to be obtained to give you an accurate rate quote and/or to determine loan program suitability.

You will need to grant permission for your home loan lender to pull your credit report. What you do not want to do is go out and seek credit from other types of credit providers while you are shopping for a home loan. Do not seek credit for an automobile or credit cards while you are trying to obtain residential financing, these inquiries will affect your score.

You will want to review the credit report with your lender to determine accuracy. Assuming the information is accurate and complete the credit report will provide the necessary information. Your creditors, the type of credit issued, outstanding balances, and required monthly payments and payment history will all be listed.

This is all I’m going to say about the credit report, at this time. Look for additional postings regarding the credit report.

Assets

The assets your lender is going to be mostly focusing on are liquid assets. Savings, checking, money market accounts, mutual funds, investment accounts, 401k, 403b. etc are all of interest to you home loan lender.

As a general rule, your lender will be requesting statements for all of these accounts covering a two month period. If a particular account provides a monthly statement then you will need to provide the most recent two months. An account that only provides statements quarterly, then the most recent statement will suffice.

Gather all of your statements in advance of your application interview. Your loan officer will be recording the type of account, the ending balance, name of institution and account numbers for all of these accounts. Make sure you provide all pages. If your account statement says 1 or 7 pages, then bring all seven pages even if the page is blank.

As your file proceeds through underwriting the account statements will be reviewed in detail. An underwriter will be looking for unusual deposits. You will be asked to explain any large deposits. The underwriter is trying to determine if any of the money is borrowed, or from gifts or the sale of assets. If you have funds that have been deposited such as just described, you will be asked to provide supporting proof for the origin of those funds.

Notices of insufficient funds in an account will require explanation. Common sense should tell you this is not a good sign.

Loan program guidelines differ on the treatment of the source of funds available. As we’ve stated previously in this series, share everything with your loan officer. This information may be critical for the loan program recommendation your home loan officer will provide.

The residential loan application also contains areas to record asset information for cash value on life insurance policies, net worth of businesses owned automobiles and other assets. The schedule of real estate owned will be considered in a later series.

The reason the focus will be on liquid assets is that this is where your funds for down payment, buyer paid closing costs and reserves will be verified.

The better prepared you are at the beginning of the application process the more reliable and smoothly the process will be.

Please feel free to use the comment section for your questions and observations. Realtors and lenders as always your comments are welcome.

Next in series

Details of Transaction

Previous Series

Property Information and Purpose of Loan

Borrower Information

Employment Information

Monthly Income and Combined Housing Expense Information

Jay Williams

www.myhomeloanwithjay.com

The History of Valentines Day--A Valentine Blog Card

Jay Williams, Mortgage Loan Officer Getting You The Right Loan (Greenville, NC) — Sat, 14 Feb 2009 10:18:21 -0600

This morning I determined to check out where this idea of Valentines Day came from. With a little quick research let me share with you what I found. Isn’t Google amazing? Sometime you just have to do some fun stuff.

In 496 Pope Gelasius declared February 14 a feast day honoring a Roman martyr St. Valentine. Amazingly, there are three Christian saints bearing the name Valentine. More surprisingly all three are purported to have been martyred on February 14^th. Go figure!

Merging these legendary figures together develops this story. The Roman emperor Claudius outlawed marriage for young men because he believed single men made better soldiers. Valentine defied the decree by secretly marrying young couples.

Of course, his defiance was discovered and he was arrested and sentenced to death. Gosh, it didn’t take much to get the death penalty back then!

While awaiting his fate Valentine fell in love with the jailors daughter. Prior to his fateful day wrote a letter to his admirer with the salutation “From Your Valentine” Ah yes, the first valentine card.

Now as it often the case, early Christian holidays or feast days were established to counteract pagan holidays. The Romans celebrated a fertility festival, called Lupercalia on February 15^th. This festival honored the Roman god, Faunus the god of agriculture, and the founders of Rome, Romulus and Remus.

One of the reported practices during Lupercalia was that the young women would place their names is a large urn from which the bachelors of the day would draw out a name. This would match the enchanted couple for the next year. An early version of eharmony.com I guess!

During the 1700’s hand made cards and gift giving became a common practice on Valentines Day. One of the earliest cards, still in existence was written in 1415 by the Duke of Orleans to his wife, while he was imprisoned in the Tower of London. What’s up with the linkage of being in jail and Valentines Day? That’s one to think on!

Commercial Valentines Day cards came into being in the 1840’s, credited to Esther A. Howland. Did you know that 25% of all greeting cards purchased each year are done so on Valentines Day? Further, that 85% of Valentine Cards are purchased by women? No surprise with that, right?

So there you have it. A quick history lesson on what the day, February 14, Valentines Day is all about. Go out and impress someone with your new found knowledge.

Next month will mark 30 years of marriage to my Valentine. No question I have received much more than I have deserved. My Valentine is one of the hardest working people I know. She is a great mother to our children; Jamison, Natalie and Allison. She has always been there for all of us.

Happy Valentines Day, Sarah! From your Valentine.

That’s the history I care about most!

May all of you have a nice Valentines Day with your loved ones!

Source material

http://www.history.com/content/valentine/history-of-valentine-s-day

http://www.theholidayspot.com/valentine/history_of_valentine.htm

Jay Williams

www.myhomeloanwithjay.com

“The Situation Could Not Be More Serious”

Jay Williams, Mortgage Loan Officer Getting You The Right Loan (Greenville, NC) — Sun, 08 Feb 2009 09:14:43 -0600

"It is inexcusable and irresponsible to get bogged down in distraction and delay while millions of Americans are being put out of work; It is time for Congress to act. It is time to pass an Economic Recovery and Reinvestment Plan to get our economy moving again...” President Barack Obama in a speech on February 6, 2009

I am becoming dismayed with the speed at which the American Recovery and Reinvestment Plan is moving toward passage. We all would like to see something done to help revive our economy. But, exactly what is in this legislation?

I decided to spend some time yesterday attempting to find out. I searched for about two hours and never could find an understandable summary of what has been passed by the House and being debated and amended by the Senate.

I did go to the House of Representatives web sit and pulled up a copy of HR-1, American Recovery and Reinvestment Act of 2009. You can search the bill on The Library of Congress—Thomas.

I then searched on the US Senate web site. There are no less than 468 possible amendments listed to HR-1.

Again, exactly what is in this legislation?

I continued searching for specifics, a summary if you will. Then I came across a blog written by Michelle Malkin, which as of yesterday afternoon the specifics of the Collins/Nelson compromise amendment was not even available for any one to see.

Within a few minutes I heard Kay Bailey Hutchinson, Senator from Texas, on TV. She stated she had not even seen the language of the amendment. Oh my God!

Then just this morning I found an update, again on Michelle Malkin’s blog, with the amendment. This is a 778 page document!

How can we possibly know exactly what is in this legislation?

This is an omnibus spending bill. This is not an economic stimulus package.

Why can’t Congress just deal with Economic Stimulus items and then deal with other spending initiatives later?

We know why. This is their opportunity to load us up with pork and agenda that the American people would not support.

Are you aware that 50% of the TARP money has not even been distributed!

What is the rush? Beware folks; we are being sold down the river.

I agree with President Obama, that the situation is serious. But I believe it is inexcusable and irresponsible to rush through a $850+ billion spending bill.

I have emailed my representative and senators the following:

What in the world are you people thinking? I've just spent a few minutes looking at HR-1

Why can't Congress deal with the issues at hand? This is not about economic stimulus. This is an omnibus spending bill.

There may well be provisions that are worthy. But are they not worthy of debate and public scrutiny?

Congress is going to rush through close to a trillion in spending under the guise of a crisis. Didn't we do this just 4 months ago?

Vote no.

Your Comments Are Welcome!

Jay Williams

www.myhomeloanwithjay.com

FHA 203(K)----OK----Contingency Reserves

Jay Williams, Mortgage Loan Officer Getting You The Right Loan (Greenville, NC) — Sat, 07 Feb 2009 12:46:24 -0600

The FHA 203(k) program is the loan program to assist you with repairing/ rehabilitating your primary residence. In other posts we’ve discussed improvements that are required, eligible improvements and improvements that are ineligible for the loan program.

By now you have selected your property. You have determined you offer price for the property, as is. Or perhaps you are repairing/ rehabbing your existing home.

You have been working with your real estate professionals to determine your cost estimates for your project. You are meeting with your lender and she tells you we must include a contingency reserve.

What is a contingency reserve, you ask? The contingency reserve is used to cover any extra work not included in the original proposal.

There may be some cases where HUD does not mandate a contingency reserve, but plan on your lender requiring a reserve. HUD’s rules do state that for properties over 30 years old and estimates over $7,500, the cost estimate must include a contingency reserve. HUD goes on to state at the mortgagee’s discretion a contingency reserve may be set up. Trust me, plan on including a contingency reserve.

The contingency reserve must be a minimum of 10% of the cost of rehabilitation. If the utilities were not turned on for the inspection, a minimum of 15% is required. The reserve may not exceed 20% of the cost of rehabilitation where major remodeling is contemplated.

I have found that the concept of a contingency reserve requirement can be confusing. Quite simply, this is established to cover unforeseen expenditures and is for the benefit of everyone involved in the project. Why is that, you ask?

Let’s say, for example, your estimate for rehabilitation costs is $50,000.00. The project begins and somewhere along the way it is discovered that it is really going to costs an additional $5,000.00. Without a contingency reserve what are you going to do?

· Are you going to pay this out of your own funds? You may not have it available

· Are your contractors going to say, just pay me later when you can? Don’t count on it

· Is your lender going to say, it’s ok the project has not been completed? Absolutely not!

· Are you going to be happy the project is unfinished? You know not.

A 15% contingency reserve established and added to your $50,000.00 cost estimate would provide $57,500.00 to cover rehabilitation costs. The $5,000.00 additional cost is covered from the loan proceeds drawing from the contingency reserve.

You are happy the project is completed without draining additional resources being drained.
Your contractors are happy, they are getting paid
Your lender is pleased the project is completed
You are admiring what you have accomplished, and how well your new home looks and how functional it is.

The key point is, your loan documents must provide for these unforeseen costs. The loan documents are drawn for a specific amount and that amount can not be exceeded. Without a contingency reserve you could be stuck. Any unspent funds, from your loan proceeds, after the final work item payment is made, must be applied to the mortgage principal. In other words, you will not be making payments on funds you did not use to repair/rehab you home. For the example we have used your loan balance is reduced by $2,500.00. ($7,500 contingency reserve less the $5,000 in unforeseen additional costs)

I hope this and other posts will be helpful as you prepare to utilize FHA’s 203(k) program.

As always, I welcome comments. What has been your experience with the 203(k) program? Do you have any questions? What observations or opinions do you have toward this financing vehicle?

Tip for real estate agents and contractors: review listed properties needing repair/rehabilitation; develop the estimates for work to be done; partner with a knowledgeable and trusted lender familiar with the FHA 203(k) program; have a turnkey project list to share with prospective buyers

Coming Soon

Specification of Repairs/Work Write Up

Related Posts

Ineligible Improvements

Eligible Improvements

Required Improvements

Want to buy a fixer-upper

FHA 203(k) poised for revival

Jay Williams

www.myhomeloanwithjay.com

Super Bowl Sunday---Oh The Memories

Jay Williams, Mortgage Loan Officer Getting You The Right Loan (Greenville, NC) — Sun, 01 Feb 2009 09:24:39 -0600

It is Super Bowl Sunday, one of my all time event days during the year. The Super Bowl games hold many memories for me.

Games I watched with my dad, my son, friends and parties I’ve been to. I’ve decided to recap a game a decade and a short memory of the game. Well except for the 60’s where I will include 2 games.

Super Bowl I—Green Bay Packers 35 Kansas City Chiefs 10

It wasn’t even called the Super Bowl then. I was a kid and was forced to go to friends of may parents for after church Sunday dinner. The game was just and after thought, bit I squirreled away to the living room while the adults socialized.

Super Bowl III---New York Jets 16 Baltimore Colts 7

How can anyone forget this one? I watched this one with a childhood friend while living in Georgia. It was what made the Super Bowl the Super Bowl. Joe Willie Namath walking off the field with his hand held high. Number 1

Super Bowl X---Pittsburg Steelers 27 Dallas Cowboys 17

The catch by Lynn Swann and one of the great games. I had just moved to Oklahoma and remember watching this one with my dad.

Super Bowl XXII---Washington Redskins 42 Denver Broncos 10

I did not actually watch this one I heard it on the radio. How can you forger Doug Williams’ tremendous performance. My wife and I were driving a U-Haul truck as we were finalizing our move from Oklahoma back to North Carolina.

Super Bowl XXXIV---St. Louis Rams 23 Tennessee 16

One of the great nail biters going down to the last play of the game, one yard short. I enjoyed this one watching from home with my son.

Super Bowl XXXVIII---New England Patriots 32 Carolina Panthers 29

It was a tremendous disappointment that my beloved Panthers did not win, but what a game. Back and forth scoring in the second half. This one I witnessed at a party my wife’s cousins had. I was so nervous during the game I circulated from TV to TV. I finally found a TV where I watched the last two minutes by myself. Oh, the agony.

Today new memories will be made. I’ve been trying to decide who to pull for. I like the Steelers. A Steelers victory will give them the honor of being the franchise with the most Super Bowl wins.

The Cardinals have always been a terrible franchise, one of the worst. I think I’m going to pull for the underdog. Go Cardinals!!!

For your viewing pleasure, here is a link to a video from NFL.com

Top 10 Super Bowl Plays

Please leave comments with your favorite Super Bowl memories.

I hate it when football season ends.

Jay Williams

www.myhomeloanwithjay.com

Facebook---Controversy Erupts Among My “Friends”

Jay Williams, Mortgage Loan Officer Getting You The Right Loan (Greenville, NC) — Sat, 31 Jan 2009 12:53:10 -0600

I’ve been on Facebook about three months, which is more or less how long I’ve been here on ActiveRain. I’m finding, not surprisingly, people view their Facebook experience differently.

It will be fascinating to see how we, as individuals, manage this merging of the personal and business on this forum.

Back to the story! I was browsing through Facebook and my eye caught a comment posted between one “friend” to another. Both of these friends are professionals in the real estate industry, but in different capacities. All three of us have a number of mutual friends.

Posted on Johnson’s Wall was a statement from Smith to the effect that that he enjoyed Facebook as a diversion, allowing him to see what was going on the lives of his “friends” and he did not appreciate the forum being used for business solicitations. A little later Smith issued a status update wishing everyone would quit using Facebook for advertising.

A few minutes later Johnson fired back telling Smith this the is way social networking works for him. He is careful to have a mix of personal and business related communication. If Smith didn’t like it he could just remove Johnson from his friend list.

My perspective is that Johnson is an active Facebook member, but the majority of his posts are of a personal nature, with a number of updates on the kids and family. However, Johnson has recently made a job change and his most recent updates have centered on this change.

Additionally, in our area, we have seen a lift in activity in various sectors of our real estate industry. A number of status updates, including mine, have been celebrating this pick up in activity. So collectively, it probably has been a bit much.

Smith actually is one of the most personable individuals you will ever meet. He is the life of the party and the kind of guy you can’t help but like. I will have to say I was a little surprised at his reaction.

I can see that this conflict of the merging of personal and business is a dilemma here on ActiveRain from post I am reading.

Examples of posts I have recently read:

Sara Bonert wrote “Do You Have 302 Friends”

Michael Fontana has written “Less Is More For Facebook Friends”

Heather Goodwin posted “Please Don’t Hate Me Because I Removed You From My Friends List”

It strikes me that Facebook means different things to different people and I am sometimes surprised how “friends” react.

How are you managing the merging of personal and business as it comes to Facebook? What does being on Facebook mean to you?

As for me I enjoy the experience and my business is part of who I am personally. If you look me up in Greenville, NC and make a friend request, let me know how we may be networked/acquainted (eg. ActiveRain) I will confirm you. I am interested in how you are using Facebook.

Jay Williams

www.myhomeloanwithjay.com

Obama’s “American Recovery and Reinvestment Plan.”

Jay Williams, Mortgage Loan Officer Getting You The Right Loan (Greenville, NC) — Sun, 25 Jan 2009 09:20:37 -0600

I’ve been spending a little time, this morning, reviewing email I receive from Boone Pickens group and Barack Obama.

Bear in mind, I am a lifelong Republican, yet it intrigues me that I am receiving weekly emails from Obama’s operation. I have never had this happen from candidates that I actually support. I wrote an article about this a few weeks back. You can view this post by clicking here.

I thought I would share an appeal from Boone Pickens site regarding proposed legislation regarding energy policy contained in the American Recovery and Reinvestment Plan.

“there are parts that will help us and for that reason I ask for your support. Specific examples include:

- Extension and Increase of the Alternative Energy Production Tax Credit
- Implementation of a Renewable Energy Loan Program for Alternative Energy Manufacturers and Producers
- Implementation of a Natural Gas Tax Credit and possible increase in gas taxes for anything other than Natural Gas
- Implementation of a Battery Credit for Cars

Let's tell Congress that we want this bill as a step in the right direction. You can do so by making a phone call to your Congressional Representative this coming Monday and Tuesday. You can use (202) 225-3121 starting around 9 AM and ask for your Representative. We need to let them know that we care about this issue.”

I would also like to share a couple of video’s from Obama’s websites outlining provisions of the American Recovery and Reinvestment Plan

The second video is President Obama’s weekly video address on January 24, 2009.

The purpose of this post is NOT one of advocacy, but to share information.

However, this is my call to action: if you are in strong agreement or disagreement with provisions of the American Recovery and Reinvestment Plan communicate with your elected officials NOW!

I welcome your opinions. Please comment and share your thoughts!!!!

Do not let the talking heads of the media determine the agenda. You can be part of setting the agenda.

Jay Williams

www.myhomeloanwithjay.com

become a fan of my facebook page