"It is well worth remembering that the customer is the most important factor in any business. If you don't think so, try to get along without him for a while". Napoleon Hill
I know my posts have been few and far between lately, but this is a quote that spurred me to share it.
Fortunately, I have been too busy to take time to write any articles. I realize that meeting my customer's needs is the most important aspect in my business. While I love to educate on the numerous changes in our industry, I can not lose site of the most important person in my job ... the Customer.
Wednesday, September 30, 2009
Tuesday, August 25, 2009
Augusta, The Stable Real Estate Market
In a recent report in Business Week, Augusta, GA is ranked as the 21st best markets in the United States, in regards to the stability of the real estate market.
"Augusta is a hub for military, manufacturing, and medicine. It is also home to the Masters Golf Tournament held in April. The city's educational institutions include Augusta State University, Augusta Technical College, Georgia Military College-Augusta, and the Medical College of Georgia".
Despite all the gloom and doom we read about in the national news, Augusta is a great place to own a home.
"Augusta is a hub for military, manufacturing, and medicine. It is also home to the Masters Golf Tournament held in April. The city's educational institutions include Augusta State University, Augusta Technical College, Georgia Military College-Augusta, and the Medical College of Georgia".
Despite all the gloom and doom we read about in the national news, Augusta is a great place to own a home.
Friday, June 19, 2009
My closing will take how long?
Interesting article about the lenght of time it is taking to process and close mortgage loans.
While it's true we are required to do more behind the scene processing, we are a local community bank with local processing, local underwriting, and local closing.
What that means to you: Faster closings.
While it's true we are required to do more behind the scene processing, we are a local community bank with local processing, local underwriting, and local closing.
What that means to you: Faster closings.
$8,000 Tax Credit
A lot of questions have arisen about HUD's approval of the $8,000 tax credit being approved for use PRIOR to closing; i.e., as a source of down payment. Here's an article from http://www.fhaloanpros.com/
FHA Deals With No Money Down To Be Rare
Posted: 15 Jun 2009 12:27 AM PDT
A lot has been made of the $8,000 tax credit and how it can be combined with FHA financing to buy a home with nothing down.
If you would dearly like such an arrangement to be widely available, that just isn’t the case today and won’t be the case tomorrow.
To understand why, you have to look at several realities.
First, the FHA is insistent that homebuyers purchase with 3.5 percent down, money which must come from either their own pocket or in the form of a gift.
Second, you can only use the tax credit for a downpayment when the money is advanced to you by a state housing agency or an approved nonprofit. Otherwise the tax credit will go into your bank account sometime after your purchase.So to buy with FHA financing and no money down several things have to happen. You have to be able to get a “bridge” loan from an approved third-party — that state housing agency or approved nonprofit — AND you can’t borrow more than $228,571.42.
Call me for ideas on how to make this work for you.
FHA Deals With No Money Down To Be Rare
Posted: 15 Jun 2009 12:27 AM PDT
A lot has been made of the $8,000 tax credit and how it can be combined with FHA financing to buy a home with nothing down.
If you would dearly like such an arrangement to be widely available, that just isn’t the case today and won’t be the case tomorrow.
To understand why, you have to look at several realities.
First, the FHA is insistent that homebuyers purchase with 3.5 percent down, money which must come from either their own pocket or in the form of a gift.
Second, you can only use the tax credit for a downpayment when the money is advanced to you by a state housing agency or an approved nonprofit. Otherwise the tax credit will go into your bank account sometime after your purchase.So to buy with FHA financing and no money down several things have to happen. You have to be able to get a “bridge” loan from an approved third-party — that state housing agency or approved nonprofit — AND you can’t borrow more than $228,571.42.
Call me for ideas on how to make this work for you.
Thursday, April 30, 2009
HVCC is here.
Conventional mortgage loans - those originated per Fannie Mae and Freddie Mac guidelines - are about to get a little more complicated. As if the tighter lending guidelines, increased credit score requirements, and program restrictions were not enough, along comes HVCC, which stands for Home Valuation Code of Conduct.
You can send your thank you notes to NY Attorney General Andrew Cuomo, who was instrumental in getting HVCC passed.
The purpose of HVCC is to provide a separation of the appraisal process between the lender and the independent appraiser. Lenders, or other related parties in a real estate transaction, such as the real estate agent, are no longer allowed to have contact with the valuation process. There are good intentions with this concept, but there are also potential problems. Click here to read about them.
The primary objective is to prevent fraud by eliminating coercion between the appraisers and mortgage lenders to "hit the number" and "make a deal work". Effective May 1, 2009, mortgage lenders are required to use an appraisal ordering process, free of any influence from anyone related to the production side of the mortgage process, to assign the appraisal. Most lenders, fearful of appearing to not have the proper separation in the process, are contracting with appraisal management companies to oversee the process.
It is unfortunate that so many of the sweeping changes our industry has experienced in the past year has been caused by the actions of those with fraudlent intentions. My concern is we may lose our best and most trusted appraisers because of increased work loads, higher expectations, while receiving a lower compensation. click here to read more from an appraisers prespective.
Like a DVR, I wish I could fast forward through this mess, rid the system of people looking for the easy buck, then make it more difficult for the "evil ones" to jump back in the business when the smoke clears from this mortgage crisis.
My message to my co-workers, fellow ethical competitors, and trusted real estate appraisers: (As the auto industry is advertising) Let's put the rally caps on, buckle down, and weather the storm.
It's a great time to buy a home. Contact your favorite Realtor and buy one today!
You can send your thank you notes to NY Attorney General Andrew Cuomo, who was instrumental in getting HVCC passed.
The purpose of HVCC is to provide a separation of the appraisal process between the lender and the independent appraiser. Lenders, or other related parties in a real estate transaction, such as the real estate agent, are no longer allowed to have contact with the valuation process. There are good intentions with this concept, but there are also potential problems. Click here to read about them.
The primary objective is to prevent fraud by eliminating coercion between the appraisers and mortgage lenders to "hit the number" and "make a deal work". Effective May 1, 2009, mortgage lenders are required to use an appraisal ordering process, free of any influence from anyone related to the production side of the mortgage process, to assign the appraisal. Most lenders, fearful of appearing to not have the proper separation in the process, are contracting with appraisal management companies to oversee the process.
It is unfortunate that so many of the sweeping changes our industry has experienced in the past year has been caused by the actions of those with fraudlent intentions. My concern is we may lose our best and most trusted appraisers because of increased work loads, higher expectations, while receiving a lower compensation. click here to read more from an appraisers prespective.
Like a DVR, I wish I could fast forward through this mess, rid the system of people looking for the easy buck, then make it more difficult for the "evil ones" to jump back in the business when the smoke clears from this mortgage crisis.
My message to my co-workers, fellow ethical competitors, and trusted real estate appraisers: (As the auto industry is advertising) Let's put the rally caps on, buckle down, and weather the storm.
It's a great time to buy a home. Contact your favorite Realtor and buy one today!
Friday, March 6, 2009
Thank Goodness We Live In Georgia
I realize housing prices are down in Georgia but we are very lucky that we have not been affected like other parts of the country. Everyone has heard of the problems in California and Florida, but here's a story you will not believe.
Post your comments on your thoughts.
Post your comments on your thoughts.
Wednesday, March 4, 2009
My New Home, my piles of new mail.
You recently closed on your new home, the boxes are not yet unpacked, but the mail is piling up. What is going on and why does everyone need me immediately?
All these official looking letters, with their very important messages, demanding me to "complete and return immediately" or "requires your prompt attention" are really scaring me.
They must be real. If not, how would they know all my private information? Like my legal name, the name of my lender, how much I borrowed, how many years I financed my home? I need to fill this out right away, all 79 of them.
STOP. Put down your pen, walk around that huge stack of "important notices", and fire up the shredder. That's right, the shredder.
Unless those documents came in a envelope from your lender, not someone using your lender's name, it's just junk mail.
All the information from your largest investment is public record, at the court house, where ANYONE can look it up. Marketing companies are targeting new home purchasers and they are quite clever with the tactics they are using. They are using official looking letterhead with information you think is confidential, so it is natural to think you need to respond.
Be very, very careful before you complete anything because some are not just junk mail, they could be a scam.
Three that I am aware of:
Bi-weekly payment - A third party wants to collect your payment every two weeks and promises to pay your mortgage payment for you. The concern is they will take your money but not pay the mortgage payment. Bi-weekly plans are fine, just make sure your payment is to the mortgage servicer, not a third party.
Insurance - They want an upfront "processing fee" for credit life insurance. If you want to purchase additional insurance to cover your mortgage, fine, but contact an agent of your choice. Most will not require an upfront fee and you will likely be able to purchase it at a lower cost.
Homestead filing - They want a fee to handle the homestead tax exemption filing for you. It would likely come in a mailing that would make you think it is from the local tax office. The tax offices in our area require that you file it in person and that you bring in a copy of the recorded deed. It is not necessary to pay a fee because it needs to be filed by the homeowner, in person.
The bottom line is this: If you have any question as to the legitimacy of a mailing you receive, do not hesitate to contact your lender, or more specifically, your loan officer.
All these official looking letters, with their very important messages, demanding me to "complete and return immediately" or "requires your prompt attention" are really scaring me.
They must be real. If not, how would they know all my private information? Like my legal name, the name of my lender, how much I borrowed, how many years I financed my home? I need to fill this out right away, all 79 of them.
STOP. Put down your pen, walk around that huge stack of "important notices", and fire up the shredder. That's right, the shredder.
Unless those documents came in a envelope from your lender, not someone using your lender's name, it's just junk mail.
All the information from your largest investment is public record, at the court house, where ANYONE can look it up. Marketing companies are targeting new home purchasers and they are quite clever with the tactics they are using. They are using official looking letterhead with information you think is confidential, so it is natural to think you need to respond.
Be very, very careful before you complete anything because some are not just junk mail, they could be a scam.
Three that I am aware of:
Bi-weekly payment - A third party wants to collect your payment every two weeks and promises to pay your mortgage payment for you. The concern is they will take your money but not pay the mortgage payment. Bi-weekly plans are fine, just make sure your payment is to the mortgage servicer, not a third party.
Insurance - They want an upfront "processing fee" for credit life insurance. If you want to purchase additional insurance to cover your mortgage, fine, but contact an agent of your choice. Most will not require an upfront fee and you will likely be able to purchase it at a lower cost.
Homestead filing - They want a fee to handle the homestead tax exemption filing for you. It would likely come in a mailing that would make you think it is from the local tax office. The tax offices in our area require that you file it in person and that you bring in a copy of the recorded deed. It is not necessary to pay a fee because it needs to be filed by the homeowner, in person.
The bottom line is this: If you have any question as to the legitimacy of a mailing you receive, do not hesitate to contact your lender, or more specifically, your loan officer.
Saturday, February 28, 2009
Why Bankrupcty Bill Would Be Bad For Housing Industry
Let's hope the bankruptcy provision in H.R. 1106, The Helping Families Save Homes Act, does not pass as presented. If so, the credit tightening the mortgage industry has experienced over the past year would worsen, making home ownership more difficult.
While the bill may have good intentions ( because we all know a politician would never present something to only make himself look good) there are too many problems with this bill. Obviously, the intent is to help struggling homeowners stay afloat, and to keep our sagging economy and housing industry from taking more of a hit, but this bill would actually hurt potential home buyers.
The primary concern is the provision allowing judicial modifications to be made by the bankruptcy judge, allowing the judge to arbitrarily make changes to the original terms of the mortgage: i.e., lower the remaining balance, lower the interest rate. While your first reaction may be, "Great", let me point out the downside.
If you have applied for a mortgage in the past 6-8 months, you have noticed the increased documentation requirements, higher credit score requirements, and lower loan-t0-value availability. Guess what? If H.R. 1106 were to pass as submitted, it would get worse. The capitol markets, which provide funding for mortgage loans, would become so restrictive, it would not surprise me for minimum down payment requirements to be 20% or more and minimum credit scores to be 700 or higher.
Doesn't sound so great, does it? Think of it this way, would you want to lend your money if someone could come in and modify the terms? See why even a large down payment still may not help? If a judge could come in a lower the balance, the once "large down payment" would disappear.
The mortgage bankers association is working hard to help legislators understand the negative impact this bill could have. In fact, earlier this week, The House pulled the bill, sending it back for revisions.
Let's hope cooler heads prevail and this bill does not pass as presented.
Click here to read more about the bill.
While the bill may have good intentions ( because we all know a politician would never present something to only make himself look good) there are too many problems with this bill. Obviously, the intent is to help struggling homeowners stay afloat, and to keep our sagging economy and housing industry from taking more of a hit, but this bill would actually hurt potential home buyers.
The primary concern is the provision allowing judicial modifications to be made by the bankruptcy judge, allowing the judge to arbitrarily make changes to the original terms of the mortgage: i.e., lower the remaining balance, lower the interest rate. While your first reaction may be, "Great", let me point out the downside.
If you have applied for a mortgage in the past 6-8 months, you have noticed the increased documentation requirements, higher credit score requirements, and lower loan-t0-value availability. Guess what? If H.R. 1106 were to pass as submitted, it would get worse. The capitol markets, which provide funding for mortgage loans, would become so restrictive, it would not surprise me for minimum down payment requirements to be 20% or more and minimum credit scores to be 700 or higher.
Doesn't sound so great, does it? Think of it this way, would you want to lend your money if someone could come in and modify the terms? See why even a large down payment still may not help? If a judge could come in a lower the balance, the once "large down payment" would disappear.
The mortgage bankers association is working hard to help legislators understand the negative impact this bill could have. In fact, earlier this week, The House pulled the bill, sending it back for revisions.
Let's hope cooler heads prevail and this bill does not pass as presented.
Click here to read more about the bill.
Wednesday, February 25, 2009
Ch-ch-ch Changes
Oh how the times have changed.
A year ago, a high credit score would get you pretty much any loan program, regardless of your down payment, and very likely without private mortgage insurance. Documentation was very simple for the customer, and for the mortgage company processing the loan.
The pendulum has now swung the other way, to the extreme. There have been so many loan defaults, institutional failures, and fraudulent activities that the mortgage process has become a "guilty until you prove your innocence" process.
We are now required to do numerous fraud prevention checks in addition to the normal processing we perform on a file. In addition, every detail of the transition is being scrutinized to the point it may seem like overkill. I want you to understand why this is taking place. Trust me, we do not like it, and it is extremely time consuming on our part. Fannie Mae, Freddie Mac, and investors who purchase loans in the secondary market, have been forced to tighten their guidelines to create a marketable security in secondary market. Let's face it, the beating mortgage back securities have taken in the market, would you invest YOUR money in anything to do with real estate as collateral?
Funds are plentiful if you are looking to buy a home, but "Borrower Beware", the process may seem like a visit to your doctor for the dreaded annual exam, including a DNA and blood sample until you prove who you say you are. (yes, this is tongue-in-cheek)
Grin and bear it for a while, understanding your loan officer is NOT picking on you, and certainly not making up the rules as we go.
A year ago, a high credit score would get you pretty much any loan program, regardless of your down payment, and very likely without private mortgage insurance. Documentation was very simple for the customer, and for the mortgage company processing the loan.
The pendulum has now swung the other way, to the extreme. There have been so many loan defaults, institutional failures, and fraudulent activities that the mortgage process has become a "guilty until you prove your innocence" process.
We are now required to do numerous fraud prevention checks in addition to the normal processing we perform on a file. In addition, every detail of the transition is being scrutinized to the point it may seem like overkill. I want you to understand why this is taking place. Trust me, we do not like it, and it is extremely time consuming on our part. Fannie Mae, Freddie Mac, and investors who purchase loans in the secondary market, have been forced to tighten their guidelines to create a marketable security in secondary market. Let's face it, the beating mortgage back securities have taken in the market, would you invest YOUR money in anything to do with real estate as collateral?
Funds are plentiful if you are looking to buy a home, but "Borrower Beware", the process may seem like a visit to your doctor for the dreaded annual exam, including a DNA and blood sample until you prove who you say you are. (yes, this is tongue-in-cheek)
Grin and bear it for a while, understanding your loan officer is NOT picking on you, and certainly not making up the rules as we go.
The HPI Cometh
The Office of Federal Housing Enterprise Oversight (OFHEO) is out with the latest edition of its Housing Price Index (HPI). For those of us in the Augusta area, there's good news and there's not-so-good news. (For those of you who aren't mortgage/real estate geeks like me, the HPI is a quarterly measurement of average home prices for more than 280 metro areas across the U.S.)
The not-so-good news is that after ranking #2 in the country for 1-year home price appreciation in the 3rd-quarter HPI numbers, we've slipped to 97th for 4Q 2008. Our year-over-year home price appreciation was -0.14% from 2007-2008. In other words, essentially flat.
The good news is that:
1) We still rank in the top one-third of OFHEO's list of metro areas
2) Area home prices held steady during the worst quarter of home price declines in the HPI's 18-year history.
3) On average, Augusta-area homes are worth almost exactly what they were worth a year ago.
That last point should be of particular comfort to anyone who can't stop hearing about how home prices nationally are dropping like an untethered stone. I've said it before and I'll say it again: When you hear about the "average price of an American home" in the media, the key word is "average." Of the 25 markets with the worst home price declines in the country over the past year, 24 are in either California or Florida (Las Vegas is the other). That's bad for folks living in those places, but it doesn't directly affect us in Augusta.
The bottom line is that during the worst period for home prices in decades, the Augusta market stayed steady. Mortgage rates are low. Prices are reasonable. It's still a great time to buy a home here...
The not-so-good news is that after ranking #2 in the country for 1-year home price appreciation in the 3rd-quarter HPI numbers, we've slipped to 97th for 4Q 2008. Our year-over-year home price appreciation was -0.14% from 2007-2008. In other words, essentially flat.
The good news is that:
1) We still rank in the top one-third of OFHEO's list of metro areas
2) Area home prices held steady during the worst quarter of home price declines in the HPI's 18-year history.
3) On average, Augusta-area homes are worth almost exactly what they were worth a year ago.
That last point should be of particular comfort to anyone who can't stop hearing about how home prices nationally are dropping like an untethered stone. I've said it before and I'll say it again: When you hear about the "average price of an American home" in the media, the key word is "average." Of the 25 markets with the worst home price declines in the country over the past year, 24 are in either California or Florida (Las Vegas is the other). That's bad for folks living in those places, but it doesn't directly affect us in Augusta.
The bottom line is that during the worst period for home prices in decades, the Augusta market stayed steady. Mortgage rates are low. Prices are reasonable. It's still a great time to buy a home here...
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