Easy Mortgage Calculator on Your Cell Phone

I have a great new widget for your cell that keeps you in constant contact with mortgage news, a way for client pre-approval, rates, and more. Just go to the FREE site for yours: http://garywsmith.mortgagemapp.com/mobile and I will see you there!

New Marketing: County and Military Home Buyers Guides

For several years, I have been using a County specific and VA Military Home Buyers Guide to provide to my clients. It has been a great way to obtain leads from craigslist and backpage and to use as handouts at open houses.
I have decided to co-brand this item with local area real estate agents wanting to network to increase leads and build upon client relationships. I have produced these guides:
King
Pierce
Snohomish
North Puget Sound
Olympic Penninsula
SW Washington
Kitsap
Thurston
Tri-Cities
Spokane
Additionally, I have Western WA Military Installations and JBLM specific.
Rates are great right now, the market is rich with houses at great prices, and buyers can get good loans. This is one of the best times for buying I have seen since I started in this business in 1987. If you are serious about finding a new way to reach buyers, let's talk! Call me at (253) 536-5626; ext.304 or email me at gwsmith@lendscape.com and let me know your thoughts.

More Product, More Choices

If your buyers are looking for manufacured housing, condos, more reverse purchase loans, along with FHA 203k and 203k streamline, we now have them all! My former company had made the decision to limit many of these choices so I decided to change to First Priority Financial.
One big change is that the normal 1% loan fee or higher that your clients are used to seeing on their Good Faith Estimates is greatly reduced on many loans we now have thereby beating the major lenders. With rates near 70 year lows, you owe it to your clients and yourself to check us out and see just how good a lender can be. You will like the fast closings too. Call us today, I'll be happy to show you the difference in having a loan originator with the right product mix, experience, and skills to make things happen.

Warn Your Past Clients About Facebook

A recent report indicated that there have been several home burglaries committed by individuals using Facebook to get information from people talking about going on vacation. Facebook is a wonderful way to share your memories about that great vacation, but to share the details of when you may be gone from your home opens the door (no pun intended) to thieves looking for that vacant home.
This is a great little contact point for your database, especially during these holiday travel times. Send out a quick email letting your past clients know you care about their safety.
Have a wonderful holiday season and get ready for a wild yet potentially fruitful next year!

Report Shows Loan Costs RIse

With all the hoopla surrounding the new disclosures, RESPA, and new GFE (good faith estimate) changes, it is interesting that a new report indicates that nationwide loan closing costs have risen 37% over this time last year.

HUD had touted that these new regulations would help the borrower reduce closing costs. But with HVCC, new title and escrow charges, changes with YSP (yield spread premium), etc., the fact remains that everytime you find more paperwork involved and more stringent guidelines imposed, everyones costs to get the job done rise and the end result is the consumer pays more.

HUD has been looking at reducing the seller paid closing cost percentage on a FHA loan from 6% to 3%. The National Mortgage Bankers Association has asked HUD to think more along the lines of only going down to 4% in light of these raised closing costs.

HomePath Loans Provide New Buyers

Imagine the tax credit going away. Oops. Happens tomorrow. What do we have in our marketing arsenal to get buyers? How about a loan that has a lesser down payment than FHA, has no mortgage insurance, no appraisal needed, and allows for up to 6% for buyers closing costs? Interested yet? The FannieMae Homepath loan program may be just what will bring you more buyers when you start to get the word out on this great product.
Tied to properties that are FNMA foreclosures, (there are 117 currently in my county alone), the details are as follows:

• Low down payment
• 5% down on DU Approve/Eligible findings with buyers own funds
• 3% down on DU Flex Approve/Eligible findings using buyers funds, a gift, a grant, or a loan from a non-profit, state or local government, or employer
• Available for Owner Occupied, 2nd home and investment properties
• No MI required! No appraisal needed (LTV based on FNMA sale price)
• Available for Conforming High Balance loan limits
• Up to 6% seller contributions up to 97% LTV
• Owner occupied = minimum 660 credit score - High Balance = 90% LTV & 700 credit score
• 2nd home = 95% LTV and 700 credit score
• Investment = 85% LTV and 700 credit score

A list of homes allowed under this program are readily available for your buyers. Add this to your marketing and watch the phone ring off the hook! You may contact me for further details.

Tax Credit Continues for Some Beyond April 30!

Question - Does the tax credit end for everyone that has not signed an offer to purchase by April 30?

Answer - NO!! Any member of the military, Foreign Service, or intelligence community that has been assigned on extended duty outside of the U.S. for a period of at least 90 days from January 1, 2009 to April 30, 2010, can still take advantage of the tax credit until April 30, 2011. Qualified official extended duty is any period of extended duty while serving at a place of duty at least 50 miles away from the taxpayer’s principal residence (whether inside or outside the U.S.) or while residing under government orders in government quarters. Extended duty is defined as any period of duty pursuant to a call or order to such duty for a period in excess of 90 days or for an indefinite period.


Agents should be constantly marketing this fact! Little has been said by the media. Now is your time to shine with knowledge and grab more clients. There is a website devoted to the tax credit for first time and certain long term home owners. See http://www.giveme8000.info/ for all the details.

Alert Your Buyers -FHA Loans to Get More Expensive

Perfect time to contact those fence sitting buyers. FHA will see added costs to obtain the loan starting on April 5th. All FHA case numbers assigned after that time will have an Up Front Mortgage Insurance Premium (UFMIP) of 2.25%, up from 1.75%. This increase added to the anticipated rise in interest rates as the Fed pulls out of buying Mortgage Backed Securities (MBS) will make loan more costly. In addition, the tax credit is going away unless the purchase and sale agreement is signed around by April 30.
A good article explaining interest rates and the MBS can be found here:
http://www.mortgagenewsdaily.com/03182010_mbs_purchase_program.asp

WARNING: 2010 Census Cautions from the Better Business Bureau

Be Cautious About Giving Info to Census Workers

With the U.S. Census process beginning, the Better Business Bureau (BBB) advises people to be cooperative, but cautious, so as not to become a victim of fraud or identity theft . The first phase of the 2010 U.S. Census is under way as workers have begun verifying the addresses of households across the country. Eventually, more than 140,000 U.S. Census workers will count every person in the United States and will gather information about every person living at each address including name, age, gender, race, and other relevant data.
The big question is - how do you tell the difference between a U.S. Census worker and a con artist? BBB offers the following advice:

**If a U.S. Census worker knocks on your door, they will have a badge, a handheld device, a Census Bureau canvas bag, and a confidentiality notice . Ask to see their identification and their badge before answering their questions. However, you should never invite anyone you don't know into your home.

** Census workers are currently only knocking on doors to verify address information. Do not give your Social Security number, credit card or banking information to anyone, even if they claim they need it for the U.S. Census.

While the Census Bureau might ask for basic financial information, such as a salary range, the Census Bureau will not ask for Social Security, bank account, or credit card numbers nor will employees solicit donations.

Eventually, Census workers may contact you by telephone, mail, or in person at home. However, the Census Bureau will not contact you by Email, so be on the lookout for Email scams impersonating the Census..

Never click on a link or open any attachments in an Email that are supposedly from the U.S. Census Bureau.

For more advice on avoiding identity theft and fraud, visit http://www.bbb.org/ .

SHARE THIS INFO WITH FAMILY AND FRIENDS.

WARNING: 2010 Census Cautions from the Better Business Bureau

Be Cautious About Giving Info to Census Workers

With the U.S. Census process beginning, the Better Business Bureau (BBB) advises people to be cooperative, but cautious, so as not to become a victim of fraud or identity theft . The first phase of the 2010 U.S. Census is under way as workers have begun verifying the addresses of households across the country. Eventually, more than 140,000 U.S. Census workers will count every person in the United States and will gather information about every person living at each address including name, age, gender, race, and other relevant data.
The big question is - how do you tell the difference between a U.S. Census worker and a con artist? BBB offers the following advice:

**If a U.S. Census worker knocks on your door, they will have a badge, a handheld device, a Census Bureau canvas bag, and a confidentiality notice . Ask to see their identification and their badge before answering their questions. However, you should never invite anyone you don't know into your home.

** Census workers are currently only knocking on doors to verify address information. Do not give your Social Security number, credit card or banking information to anyone, even if they claim they need it for the U.S. Census.

While the Census Bureau might ask for basic financial information, such as a salary range, the Census Bureau will not ask for Social Security, bank account, or credit card numbers nor will employees solicit donations.

Eventually, Census workers may contact you by telephone, mail, or in person at home. However, the Census Bureau will not contact you by Email, so be on the lookout for Email scams impersonating the Census.

Never click on a link or open any attachments in an Email that are supposedly from the U.S. Census Bureau.

For more advice on avoiding identity theft and fraud, visit http://www.bbb.org/ .

SHARE THIS INFO WITH FAMILY AND FRIENDS..

Tax Credit Extended and Expanded

Good news for those feet draggers that waited until the last minute to buy. The first time home buyer credit has been extended through June 30, 2010. Buyers will have to be under contract before April 30, 2010 and the loan must close by the end of June. First timers will still get the $8000 and the income limtis have been raised to $125000 for single persons and $225000. Income above those limits begins to be phased out as it increases until no tax credit is available.
In addition, the program has been expanded to move up buyers that have resided for 5 consecutive years over the last eight years in their same residence. This tax credit follows the same income guidelines but the tax credit is limited to a maximum of $6500. This program is exceptionally good for any senior planning to make a move. They can use a reverse mortgage to purchase their new residence instead of paying all cash or using a new forward mortgage and still bank the $6500 if they qualify. Call my office for details or visit our website at: http://www.cme4loans.com/8000.  Cobranded flyers are available.

Congressman Drafts Bill to Increase FHA Downpayment

Republican congressmen are becoming more concerned about the Federal Housing Administration's financial plight and they want to increase FHA's downpayment requirement to 5%. Rep. Ed Royce, R-Calif., said FHA is operating at the same dangerous leverage ratios that led to the takeover of Fannie Mae and Freddie Mac. Rep. Scott Garrett, R-N.J., said he has drafted a bill that would increase the FHA downpayment requirement to 5% from the current 3.5% level. "There are increasing reports of the likely necessity of a taxpayer bailout for the FHA and this legislation aims to implement reforms to try to prevent such a bailout from occurring," Rep. Garrett said at a House Financial Services Committee hearing. The Garrett bill also calls for a General Accountability Office study to determine the appropriate leverage ratio for FHA. In the early 1990s, Congress mandated that FHA maintain a minimum 2% capital ratio. A recent audit shows that the federal mortgage insurance fund has fallen below the 2% minimum. But FHA officials say the insurance fund should be able to maintain a positive capital position and FHA will not need taxpayer assistance.

I must say that should this occur, it will further damage a fragile housing growth as home buyers already stuggle to provide the current 3.5% down payment.  What we really need is a zero-down FHA product with strict guidelines such as increased up-front mortgage insurance, higher credit score, stable income, and adherance to standard ratio guidelines. Given that, the success of an FHA zero down product would more likely.

I suggest a preemptive letter to your congressman and/or senator expressing your feeling how an increase to 5% in down payment would affect the housing industry. Currently, almost 50% of all loans closing are FHA and my feeling is there would be a significant drop should buyers need to come to the table with more cash.

Seller Mandated Use of Title Company

Many have expressed concern regarding the steering of title companies by sellers of residential property. This includes many REO companies. See below the actual rule from RESPA Section 9.

RESPA: SECTION 9 - WHY WAS I REQUIRED TO BUY TITLE INSURANCE FROM A SPECIFIC TITLE COMPANY BY SELLER?

The Real Estate Settlement Procedures Act's (RESPA) Section 9 (12 U.S.C. §2608) and Regulation X (§ 3500.16) prohibits, either directly or indirectly, a seller from requiring a purchaser to buy title insurance from a specific title company in any transaction as a condition of the sale.
Section 9 of RESPA (12 U.S.C. §2608) states that:
1. No seller of property that will be purchased with the assistance of a federally related mortgage loan shall require directly or indirectly, as a condition to selling the property, that title insurance covering the property be purchased by the buyer from any particular title company.
2. Any seller who violates the provisions of subsection (a) of this section shall be liable to the buyer in an amount equal to three times all charges made for such title insurance.

The only way a Seller can mandate that purchaser use a particular title company is if the seller paid 100% of all title insurance and related title costs. HUD's RESPA Division has stated on numerous occasions that unless the seller pays 100% of the title related costs then the seller has violated RESPA. REO companies need to pay particular attention to Section 9 because required use practices by REO companies are on the HUD's radar right now.

Lately, many builders and REO sellers (banks) have been steering and mandating the use of their preferred title companies in their addendums. Unless they pay for it, it is a clear violation of RESPA.

Additionally, there are several local real estate purchase agreements that are in use in parts of the United States where the language in the purchase contract states that Seller picks the title company but purchaser pays for title costs. It should be clearly noted that you can not contract out of a RESPA Section 9 violation. Just because the purchase agreement is signed by the borrower doesn't prohibit the borrower from coming back and suing the seller for required use if the borrower is stuck with any of the title related fees.

Another clever technique that is in use is where the seller (quite often found in builder addendums) says they will pay for the owner's title insurance policy but that purchaser has to pay for the lender's title insurance policy and all other costs. This does not pass the smell test nor does it pass HUD's smell test. The practice while novel in its approach is still considered a Section 9 violation.

Many borrowers still do not understand that they are allowed by law to use any title insurance company they want to and if the seller dictates that they must use the sellers preferred title company, it is in violation unless seller is going to pay all costs for title insurance.

Finally, with the rapid approach of the new good faith estimate that has tolerance limits, sellers and real estate agents should be aware that the buyer is going to see the difference in title and escrow charges that the loan officer originally quotes and any variance in actual costs of the agent or seller directed title and escrow company. When forced to pay more, is the buyer going to be happy with your choice? I would encourage all agents to consider learning about the new good faith and HUD-1 Settlement statement coming out January 1, 2010. Education on how it is going to affect your transaction could mean the difference between a happy buyer and a disgruntled one.

I would be happy to schedule a meeting with agents to go over the new rules. Just call my office at (253) 536-5626 or email me.

Reverse Purchase Now HOT!!

So far, every agent I have spoken with has not heard about how a senior can buy a home using a reverse mortgage. This is a great loan program for seniors over 62. Here are three ways to consider how to use this for a home purchase:

1. You plan on selling your home and want to downsize - The sale of your existing home is going to net you about $180000. You had planned to use this all to buy your new $180000 home. You are 72 years old. Instead of paying all cash, you find out your maximum benefit for a Reverse Purchase is about $88700. You put down $91300 and keep the $88700 working for you in other investments. No monthly payments!
2. You want to buy a second home to use as a vacation home. You use a normal reverse mortgage on your existing residence and with the lump-sum of equity you get, you go and pay cash for your vacation home.
3. Things have changed in your life and you need to up-size your home because it is too samll to accomodate the live-in help you want to have. You use the proceeds from the sale of your home; let's say that same $180000 as in example #1, and you use it all and add a reverse mortgage to it to come up with the ability to buy a $360000 home with still no monthly payment! Your reverse benefit allowed you to put the $180000 down and have a Reverse Purchase mortgage for the remainder.

The above examples were all estimates using the age of 72 and existing HECM interest rates. As each age is different and rates change, you need to find out what you purchase abilities would be by getting a maximum prinicple benefit analysis so that you can determine how this program will help you. Visit http://www.Reverse4HomeBuying.com for details.

We are scheduling meetings with are real estate offices using our Powerpoint Presentaion and handouts. We will be happy to meet with you and set up a meeting. Just email gary@cme4loans.com or call me at (866) 350-6140.

New Rules Increase Closing Times

Now that the new TILA rules have gone into effect, all lenders are scurrying to determine how they are going to interpret this new bit of legislation. Suffice it to say, all lenders agree at one thing: Deals are now going to take longer to close. Most lenders are now reporting that they view the minimum time to close on a transaction to be 30 days, but tell us that the minimum they really think is going to be 45-60 days. The smallest change in a good faith estimate and how it affects the truth in lending statement can pootentially retrigger an additional disclosure time and further delay a deal. Some lenders are saying that the time starts after 7 days, while others say 10 days. When matched up with the conventional loan HVCC rules, delays are becoming commonplace.
Now more than ever before, an agent needs to be keenly aware of how these changes will affect the style of transactions they are doing. Those agents selling distressed or REO properties need to allow more time for there borrowers. The banks know these rules and are trying to use them to their advantage by still shortening closing times knowing full well that some of these dates cannot be met and will potentially cause additional fees to the borrower.
IMPORTANT - All lenders must follow these new guidelines. You need to be very wary of any loan officer touting a faster than 30 day closing on conventional transactions. Remember that after the signing around of a purchase and sale transaction, the clock starts ticking and it will be a minimum of 7 days before the appraisal is allowed to be ordered and with some lenders, it is 10 days. With HVCC taking up to 2 weeks to get the appraisal done, you can quickly see how 30 days comes and goes in that short time.
Protect your buyers! Learn how these new regulations affect your business model and make the necessary changes to work within the new rules. Use them to your advantage by informing and educating your buyers. You do not need an unhappy buyer that finds out about closing delays that you should have known about!
If you are interested in a meeting at your office, please call us. We have powerpoint and visual information about these new regulations and would be happy to share them with you.

HVCC is a Disaster! Sign Petition Today

HVCC (Home Valuation Code of Conduct) is turning out to be costing buyers hundreds of dollars in additional fees and closing costs (average of over $700) and the appraisal management companies are forcing good appraisers to leave the industry and costing thousands in home values and lost deals! I encourage each of you to view for yourself what this BAD law is producing, sign the petition and then contact your government representatives to vote yes on the House Bill.

Price Reductions Average 10.4%

Real estate research site Trulia.com says 24.6 percent of current homes on the market in the United States as of July 1, have had at least one price cut, totaling $27.1 billion in reductions.
The average price-reduced home has had a 10.4 percent reduction, down slightly from 10.6 percent as of June 1. Some areas appear to be stabilizing quickly with the overall number and percentage of price reductions declining, including Las Vegas, Los Angeles, Dallas, Washington, D.C., and Baltimore.
“All real estate is local and we’re seeing glimmers of hope as price stabilization occurs in major cities across the nation, including some of the earliest hit cities that have experienced huge declines in the past few years,” says Trulia CEO Pete Flint.
The top-10 cities with the most price reductions as of July 1 are:

1. Jacksonville, Fla., 39 percent
2. Boston, 35 percent
3. Minneapolis, 33 percent
4. Milwaukee, 33 percent
5. Honolulu, 33 percent
6. Tucson, Ariz., 31 percent
7. Chicago, 31 percent
8. New York, 31 percent
9. Austin, Texas, 31 percent
10. Raleigh, N.C., 31 percent

Increase exposure for your listings by getting them their own individual website. Uploaded to all major real estate search engines and posted to craigslist a minimum of 2 times a week, this website is proving to increase your listing successes and provide buyer leads! The cost for this is only $24/year through our participation partnership! For details, go to http://www.AgentSignIn.com

May Day Brings Changes

A whole new world started May 1 as all lenders scurried to form their new appraisal ordering policies for conventional Fannie Mae and Freddie Mac loans. Even at the last hour, lenders were hoping for a reprieve which never materialized. Here are the new rules, and they WILL affect your buyers:

1. No loan officer will be able to order an appraisal. All appraisal orders will go through the lender.
2. Payments for the appraisal will be paid for by the buyer immediately. No more waiting for the closing date to come around.
3. Appraisal Management Companies (AMC's) will assign appraisers and make up to half the fee charged. (Interesting fact - Some AMC's are owned by Banks)
4. The industry is expecting delays in the appraisal process.
5. A lot of great appraisers are refusing to sign up for this. They see it as the AMC's taking half their fee and having to do twice as much work to make the same money. This leaves the AMC's using appraisers that are new to the business, less-experienced, or maybe not very good. (Good luck with those values!)
6. Borrowers will get a copy of the appraisal sent to them 3 days prior to closing.
7. If you change lenders, you may not be able to use the appraisal and your buyer will have to pay for another one.
8. Although geared towards conventional only right now, some lenders are already saying they will use the same system for FHA loans. (Again - some AMC's are owned by banks).
9. VA buyers will still have appraiser assigned by VA.
10. Your loan officer will have NO contact with the appraiser!
11. The appraiser assigned may come from outside the immediate market area.
12. PLAN NOW! - Consider extending closing dates by 15 days as lenders struggle to work through the growing pains of this new system.

Lenders Begin to Tighten FHA Loans

Mortgage banks are further tightening FHA loans. The first item to notice is that the previous lending limit of $417,000 between FHA normal limits and FHA Jumbo limits now has to include the UFMIP (up-front mortgage insurance premium) while previously it could be added to the $417,000 maximum normal limit. The next item to change is that a 660 (up from 620) credit score will now be required on FHA Jumbo loans and it must include a DU approve eligible through the FHA Total Scorecard Underwriting System. Purchases with a loan-to-value above 95% will require a FULL 2nd appraisal. Your buyers will need to be prepared also for an anticipated raise in FHA appraisal prices as the industry moves to a nationalization of appraisal ordering on May 1st. We have already been advised by some of these companies that they will be charging up to $600 for an FHA appraisal. That would be $1200 for 2 on FHA Jumbos.

These guidelines are effective immediately with several lenders and it will run through the rest of them as days go by. Rest assured, we will keep you informed here in this blog of any agency guideline changes.

Do other agents a favor and suggest this blog.
For marketing tips and tools, go to http://www.AgentSignIn.com

UPDATE ON THE $8000 TAX CREDIT!

A website listing all the details concerning the $8000 first time buyer credit can be found at http://www.GiveMe8000.info and it includes program guidelines and links to the IRS forms necessary to obtain your credit. Make sure all of your past clients know of the firstime buyer credit of $7500 for last year and the new one for this year. This is a great reason to call past clients and then ask if they know anyone that wants the tax credit too!