League City Home Trends

"Operation Twist" = Lower Houston Mortgage Rates

Phillip Himes, Selling Homes in The Houston Bay Area (Century 21 Paramount) — Wed, 21 Sep 2011 14:26:45 -0700

Houston Mortgage Rates go down after "Operation Twist" announcement The federal reserve is trying to start the engine of our stalling economy by using a strategy from the 1960s. Ben Bernake plan is toThe Federal Reserves’ “Operation Twist” was unveiled today, but the big question is how it will affect Houston Mortgage rates. Under the plan, the Fed would sell $400 billion in shorter-term Treasury debt in its portfolio and use the proceeds to buy an equal amount of longer-term bonds by the end of June 2012. This is specifically designed to bring stability to the market by pulling down mortgage and longer-term interest rates. I believe we will see a number of people refinance their mortgage in the months to come due to the action of the Federal Reserve. The real question is will home buyers be enticed enough to purchase a new home. In my last article, I wrote how purchasing a new home today was a smart thing to do. I even quoted Donald Trump who was calling for people to purchase a new home. In his usual fashion he said, that people would thank him in 10 years. I am telling you that you will. If you have the means to purchase a new home, I am just going to bust out and say it. You are crazy not to take advantage of the best stimulus for the consumer in the history of our country. It is not a buyer’s market it is a super buyers’ market on steroids. Houston Mortgage rates give move-up buyers $50,000 increase in home. Lower Houston Mortgage rates have increased the home buyer’s purchasing power by 25%. That means if you purchase a $250,000 home today your monthly payment would be the about same as buying a $200,000 home just a few short years ago. That is a $50,000 dollar windfall. I can’t stress the enough the difference between a $250,000 home and a $200,000 here in Houston. One has granite counter tops, hardwood floors, bonus/game room, crown molding, and possibly a pool. The other has no upgrades at all and no pool. First-time Home buyers- It is time to apply for your Houston Mortgage? If you are renting and paying more than $1000 a month, you could purchase a $120,000 home for $1056.23. That includes your taxes, insurance, mortgage insurance, and principal and interest. That is the whole enchilada. Your down payment would only be $4,200 and we can have the seller pay all your closing costs. If you are a veteran you don’t have to put any money down. Got Bad Credit? No problem, I can refer you to a firm that has been featured on Fox Business News that can repair your credit. The key is to start now. I am screaming right now. This is as good as it gets. I am going out on a limb here by saying you will never again have an opportunity like today to purchase a new home. Don’t be the one that regretted not taking advantage of these low Houston mortgage rates.

Breathtaking Home for sale Friendswood, TX 77546

Phillip Himes, Selling Homes in The Houston Bay Area (Century 21 Paramount) — Sun, 11 Sep 2011 14:02:12 -0700

Contact:	Terry Dawson
Phone:	832-435-1311

Breathtaking Home for sale Friendswood, TX 77456

Listed at $899,500

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Subdivision	The Forest
Category	Homes
Type	Single Family Re-Sale
Sq Footage	5019
Bedrooms	5
Bathrooms	4
Half Bathrooms	1
Lot Size	21801
Short Sale	No
Year Built	2000
Home Address	603 Royal Oaks Drive Friendswood, TX 77546

Home Description Breathtaking Kustom Kastle Home for sale, located in Friendswood, TX,is true entertainers dream! 78K gal pebble rock pool w/sparkling waterfalls, babling brook down to huge swimspa, putting greens curve around pool, customized lighting best viewed at night. So many details incldg 45kw built-in generator, mosq sys, 750 sf exer Rm above grge,top-of-line water filter sys, imported cstm drapes, Mstr retreat w/4 head shower, bidet, Panoramic views of pool thru stunning frameless windows. See agent for long list of features!

Home Features

Central AC	Central heat	Fireplace
High Valuted ceiling	Walk-in closet	Tile floor
Family room	Living room	Bonus room
Office/Den	Dining room	Breakfast nook
Dishwasher	Stove/Oven	Microwave
Granite countertops	Attic	Balcony
Swimming pool

Additional Links

Home Search	Property Resume	Apply Online
Blog Address	Virtual Tour

Property Description

This home for sale is located in The Forest! This Friendswood community has homes for sale ready for immediate move in but none match the ammenitites this home offers. If you are looking for a one of a kind home in The Forest, please review this unique home above. In addition, to schedule a showing be sure to email me and take advantage of this great home for sale in The Forest. This home for sale in The Forest, located in Friendswood, wont last long and in today's volatile real estate market. Finding the perfect home to fit all your needs is just a phone call away. Why spend hours looking through online websites for homes for sale in The Forest, contact me today for all your real estate needs! I'm happy to assist you in finding your dream home in The Forest

I am Blown Away by the Stupidity

Phillip Himes, Selling Homes in The Houston Bay Area (Century 21 Paramount) — Thu, 16 Dec 2010 13:05:16 -0800

I am a Mortgage Profession who owns his own Augusta Mortgage here in Houston, Texas and I am blown away at how my industry continues to surprise me on just how stupid things have progressively gotten. Prior to Automated underwriting the main goal of an underwriter was to determine the risk of nonpayment from a loan applicant. The would review the client's income and debt to ensure they could afford the new home. Review the credit report to see how they have treated other creditors in the past and finally check to see if the borrower was gainfully employed and that his employment was stable. If everything was good they would approve the loan and we would have a very happy client. Then came automated underwriting. Automated Underwriting is great because it allowed the loan officer to gather the borrowers information, push a button and a few minutes later you got your answer. You could immediately give feedback to the client and real estate professionals and everyone was happy. Well this step removed the brain from the underwriter and they no longer skillfully looked at the borrowers financial situation. It wasn't important if the client paid all his bills on time, they now just looked for the credit score. Yet, they would approve loans with debt to income ratio's exceeding 60% even though the client could not afford it. All because the automated underwriting decision said they could. Underwriting at this point became more about meeting the requirements of the Automated Underwriting and less about the client's ability to repay the loan. Then we had the subprime crisis in 2006 which was followed by the mortgage meltdown in 2007. This caused lenders to start creating thier own rules to go along with the ones of the Automated Underwriting Decision Engine used. Now it doesn't stop there, the mortgage insurance companies had to put their 2 cents in and create their rules. So the Automated Underwriting Decisions now mean absolutely nothing. So guess how confused loan officers are today. Foreclosures are at an all time high and Fannie Mae is on a rampage trying to get Mortgage Companies to buy loans back at a record pace. Underwriters are now scared out of their minds. I call it "Scared Stupid". Here is an example; I have a client were the underwriter removed the dividend income because she couldn't verify that it would continue for 3 years. When she told me this I wanted to scream into the phone and say, "What about the million dollars in stock". I didn't do that because it is unprofessional. I simple stated that all she needed to do is divide the clients annual income into the Million dollars and that would more than prove 3 years of continued income. In this case it was 8.19yrs. Yes, the client could draw down his entire annual salary for 8 years and still have money in the bank. She is still scared to make the decision, so we are having a meeting with her manager tomorrow. If you are a Real Estate Professional having a extremely knowledgeable Mortgage Professional is hugely important in today's market. If you have a great one give them a pat on the back. If you don't have a good one, get one you success may depend on it. I want to end this by saying, Underwriter's aren't evil because I have been one and I realize the pressure they are under. The mortgage industry is just in a slump and like always things will settle down and normalize. Lastly, I love being in the mortgage industry, but every once in a while you just have to vent. Thanks for listening.

FHA Mortgages Are Good For your Kids?

Phillip Himes, Selling Homes in The Houston Bay Area (Century 21 Paramount) — Fri, 26 Nov 2010 19:11:12 -0800

FHA mortgages provide financing for many Americans today. Since the mortgage crisis, we have seen a huge number of mortgage programs eliminated and conventional loans have drastically tightened up their lending guidelines. making it more difficult for families to obtain financing for a home. Although, FHA loans now require a minimum credit score of 640 and the down payment has increased to 3.5% it is still much easier to get approved on an FHA Mortgage than a conventional loan program. More importantly, the interest rates are currently lower than conventional mortgages allowing more people to qualify and get approved. So how is FHA loans good for your kids? Well a recent study shows that children of renters are 40% more likely to give birth as unmarried teenagers, and almost twice as likely to be idle at age twenty and rely on food stamps. In addition, thier high school graduation rate is 19% lower and they are half as likely to acquire any post-secondary education. They tend to make $1.00 less per hour than children of parents that own a home. What is truly amazing is homeownership had a more positive effect on lower income families than higher income homeowners. FHA Mortgages have a variety of ways to help families purchase a home. They can get 100% gift from a family member, non-profit organization, or employer for their down payment and closing costs. They can use "Mattress Money" (money saved at home and not seasoned in a bank account) submitted with a monthly budget demonstrating that the client could have reasonably saved the needed funds. Also, a client can close on a loan using income from a job he/she has not yet started as long as the offer letter states that the client will start no later than 60 days after closing and can provide an offer of employment letter. This is great for relocation buyers who are trying to purchase a new home prior to moving and starting their new job. So as you can see FHA Loans help clients purchase homes and that helps their children be more successful.

Why are mortgage pre-approvals broken today?

Phillip Himes, Selling Homes in The Houston Bay Area (Century 21 Paramount) — Thu, 08 Jul 2010 22:47:38 -0700

I was talking with one of Houston's top listing agents who has had several transactions fall out due to the client not being able to get approved for a mortgage. She asked me why so many lenders issue a client a preapproval letter and then turn around and deny the loan. I could tell by the tone in her voice that it was extremely frustrating for her and I imagined that if she had this question many other real estate agents might also. So I decided to make it the topic of my first blog. When I first started in the mortgage industry nearly 15 years ago Loan Officers were much more responsible for the viability of the loan. We were required to field underwrite each loan application to determine if it made sense to move forward or to coach the clients on the requirements to get approved and point out their short comings. We couldn't deny a loan or keep any one from applying, but we could help the client save time and the embarrassment of getting denied. Field underwriting did a couple of things it filtered out many of the applications and allowed underwriters to focus on loans that could get approved. The other thing it did was force loan officers to look at each loan with the eyes of an underwriter. As a field underwriter we didn't just look for a credit score we reviewed the credit. We looked a pay history, type and age of accounts, the aggregate amount of debt, and we looked at the public records to see if anything showed an unwillingness to repay the loan. We reviewed the bank statements and tax returns with the same diligence. The application was thoroughly reviewed and job history meant something back then. If you were a good field underwriter your prequalification was solid and that skill is why you were referred by real estate agents. Also, if you issued a client a prequalification and you shouldn't have there was hell to pay as a loan officer. If you did it too many times you got fired. So what has changed in the last few years that has made preapprovals so unreliable. In one word, Technology. Point of sale decision engines like Fannie Mae's Desktop Underwriter and Freddie Mac's Loan Prospector has made it easy to let a program take on the responsibility of telling a client they are approved or not. Today most loan officer's don't even review income or asset documentation before they issue a preapproval. They just take the information right over the phone and run it through the decision engine and poof they get an approval. Believe it or not many people embellish their income or honestly believe they make much more than they do and when that happens your preapproval is broken. It amazes me how often this happens and I wonder why so many loan officers do not learn their lesson. Another factor is the way we used to do mortgages. Prior to the meltdown, most people could get a mortgage especially if they had decent credit. Loan Officer learned to base a preapproval based solely on the credit therefore reviewing anything else was just a waste of time. If the client's recollection of his income was low you just did stated income. If his assets were not seasoned then you did stated assets. All these things made loan officer's lazy and most have lost the skill of field underwriting. In addition, mortgage companies no longer relied on their loan officers to field underwrite so they were not being held accountable for their preapproval letters. I know that doesn't make sense, but it is true. Things have come fulls circle. Clients have to qualify for a mortgage and everything is verified. I think most loan officers realize this but either do not have the skill to field underwrite a loan or they haven't adjusted to the times. I believe that is why many more preapprovals are broken then in years past. A combination of strict guidelines with no products to help you if you make a mistake and a bad habit of relying solely on the credit report to make a judgment on a clients ability to qualify for a loan. So how do you as a real estate agent fix this portion of your business. First make sure your financing partner is knowledgeable and receives all the documents prior to issuing a preapproval. Second, give your financing partner enough time to get the documents from the client and review them before you require a preapproval. Third, if you get an offer on a listing require the buyer to get pre-approved with your financing partner. Clearly explain to them that they do not have to use your financing partner, but to accept an offer on your home a trusted lender needs to review your ability to purchase the property. These three steps will drastically reduce the time and money lost on dead deals.