Monday Minutes 072808 with Tracy Reece and Mark Hall

Monday Minutes @ RE/MAX Communities

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Quick Notes

Please welcome Wade Hunt of Covenant Mortgage fame . . .our special guest star this week and part of our RE/MAX Communities team!

FMLS to Add "Contingent - Due Diligence" as a Status August 7th

In response to Member requests, on August 7, 2008, FMLS will add a new option to the Status field ("Contingent - Due Diligence") in 1st Connection.  In addition to the new status of DD, FMLS will also add a new field titled "Due Diligence Ends."  This will be a required date field - like other 1st Connection date fields, the correct format will be MM/DD/YYYY.

Please note that at the end of the day (midnight) the Due Diligence period ends, the Status of that listing will automatically revert to "Pending" at midnight.  Manual changes are not necessary unless the buyer gives notice to the Seller that the contract is void.  In that case, the listing broker should immediately change the status back to "Active".

Be sure when you're turning in your contract to the office that you put the due diligence end date on the contract processing sheet so the staff can enter that info correctly.  This is really going to help correctly identify the status of listings which are in the due diligence period.

Mark Your Calendars - FMLS Advanced Photography Class

FMLS Advance Photography Class at the FMLS Northwest Center July 12th and 28th.
Please visit www.FMLS.com to register.  (It's coming up soon - be ready!)

NAR Ethics Class

Be on the lookout for the NAR required ethics class here at RE/MAX Communities starting at the end of August.  The classes will be free, free, free and count for the required NAR training PLUS 3 hours of CE.  Mark Hall and Tracy Reece will instruct so it should be entertaining and fun too!

Real Estate Question of the Day

Has FNMA (FannieMae) made any updates to their guidelines?

Answer

Absolutely . . . Lots of guideline changes have come down the way in the last 30 to 45 days.  Most recently, FannieMae updated the bankruptcy and foreclosure policies.  They updated the conversion of principal residence to second home or investment property, and the last update was representation of warranty requirements.

The big question that Wade's gotten recently has to do with investment property.  A lot of borrowers, if they're going to convert their primary home to a second home or investment property and buy another home, usually have one of three choices:

1)  Sell their current home, or
2)  Convert it to a second home provided they qualify with two mortgages, or
3)  They can convert it to an investment property.

If they choose to convert it to an investment property, usually the lender obtains a copy of their current lease agreement and uses 75% of that to offset their mortgage debt and 25% goes to vacancy absorption. 

The new requirement is still going to allow the use of the lease agreement for 75%, but it's going to require the borrower to have a minimum of 30% equity in that property which will have to be validated through an appraisal, an AVM (Automated Valuation Model), or BPO (Broker Price Opinion) less any liens against the property.  The lender will also need a copy of the lease and a copy of deposits made from the tenant.

Follow Up Question

Will that make the underwriting process any longer?

Answer

No.  It won't make the underwriting process any longer . . . it will remain the same.  The only thing that will happen is validating the equity in the current property in order to use that lease to offset that debt.

Should you have additional questions, please contact our Covenant Mortgage Partners . . . Wade Hunt, Debbie Bennett, or Richard Staley.  They'll be happy to answer all your mortgage questions!

Tech Tip(s)

If you are posting listings on CraigsList or Postlets.com, be sure you include a link back to your website . . . it's very important that you do that so people will have a way to get back to you!

Website(s) of the Week

www.WordPress.org  - WordPress is a state-of-the-art publishing platform with a focus on aesthetics, web standards, and usability.  WordPress is both free and priceless at the same time.  More simply, WordPress is what you use when you want to work with your blogging software, not fight it.  New to blogging?  Learn more about WordPress, or, for the ultimate in ease of use, get a free blog on WordPress.com.

www.ActiveRain.com  - ActiveRain.com is the social networking site for Realtors.  It's got great information and lots of great posts there.  You can find out valuable information from your peers all around the country.  Welcome to the Community!  Please contact Mark or Tracy with any questions and check it out!

Motivational Quote

"It's not the size of the dog in the fight, it's the size of the fight in the dog."
Mark Twain

Together We Offer More!

Have a great RE/MAX Week!