Every industry has its no no's.  Home inspecting as a profession is no different.

Certainly, no list of anything is definitive, but can I suggest seven deadly things a home inspector can do?

1. MISINTERPRET - Home inspecting is about gathering information.  It is very important that the information one gathers is correctly interpreted.  A leak stain can sometimes come from many different things.  A stain in an upstairs bedroom ceiling might manifest in one spot, but the source can be far away.  Or it might be an exploded soda can!  Tools, like a Thermal Infrared Camera, can reveal colors that may or may not indicate a problem.  A home inspector has to be thoroughly trained in many things and understand many industries in order to properly interpret a finding during an inspection.
2. MISUNDERSTAND - Closely related to the first sin, things aren't always as they appear.  What you see might not be what you get.  But very important - the client is the process during a home inspection.  It is very important to understand the client's needs and concerns.  And clients aren't always as understanding of what they see or what the inspector says as a home inspector might think, so communication is crucial.  Communication is a two-way avenue.
   
3. MISTAKE - Even something as small as a typo on the report can become something big.  Words mean things and so, during the inspection, what is said must be said properly.  That "sump pump" might be an "ejector pump" for the bathroom, and has to be explained for what it is.  If the amperage is not stated clearly on the panel box or main breaker, be sure what is said to be the amperage is correct.  Which leads to the next sin:
4. MISSTATE - one very important aspect of a home inspection is what happens after wards.  The report is probably one third of the home inspection (after construction knowledge and client education).  It has to be right.  It has to be understandable.  It has to accurately describe what it is trying to convey.  Be sure that when something is an inspector's opinion, it is expressed as such and/or reported the same.  Like it says above, words mean things, so the proper words and proper wording is essential.  And we inspectors put down our reports electronically and on paper for all to see and for all time.  It has to be right.
   
5. MISQUOTE - Again referring to the report, if an inspector is going to quote a code, or a phrase from a manual and cite the reference, it has to be correct.  References to websites or other URLs have to be exact!  Some builders are getting finicky and are requiring a code reference to be included in the report when something on their house is cited by an outside inspector.  I notice they don't require that of the County Inspector, but that is just me.
6. MISREPRESENT - An inspector needs to truthfully state who he is, what his certifications are, his licensing agencies or organizations.  If not, that is something that will bite quickly and hard.  His appearance and professionalism should also represent who he is, reflect well on his industry and even the Realtor who referred him!  An inspector wants to be referred to others and be called on again and again.  We are all missionaries for something and certainly professionalism should be one of those things we convey!
7. MISS - Nobody is 100%.  No where and no how.  But, unfortunately, a home inspector is expected to be!  Don't miss anything!  Anything!  Sometimes a little thing can blow up to become a bigger-than-it-needs-to-be thing.  There is always somebody looking to blame others for whatever happens later and a home inspector has a big target on the back of his logo-festooned shirt!  Most people are in their house for a long time.  So don't miss anything!  This is a very hard sin not to commit however...
   

My recommendation:  While this might not be THE definitive list of seven home inspector sins, it sure is a good start!  These lists could go on for a while.  After all, this list just describes the M's!!  If any of these seven sins is a problem for you, may I suggest sincere repentance and a change of heart or mind.  Seek out an industry professional in the know and learn how corrections can be made!  And let's be careful out there!

WOW! There are changes, and then there are changes. FHA Commissioner David Stevens announced today a bunch of policy changes designed to strengthen FHA’s Capital Reserves. Those changes range from raising down payment requirements, to raising upfront and monthly mortgage insurance premiums to lowering the seller concessions. These are changes that can make huge differences in a person’s ability to actually get an FHA loan in the future.

FHA, like the banking sector, must also maintain capital ratios. Since they now insure about 30% of all new loans, FHA is nearing the limits of loans they can make based on their capital ratio. The loss of FHA as a lender in today’s market place would be hugely detrimental to the recovering housing industry. So, in an effort to fix this problem, FHA will be raising their upfront mortgage insurance premium fees from 1.75% to 2.25% and have requested approval for an increase in the monthly fee as well. They will also limit the high LTV financing to borrowers with a 580 credit score; a score under 580 will now require at least a 10% down payment. This will probably have the least effect on the market as the majority of lenders do not make FHA loans under a 620 credit score.

One change that I see having the biggest effect on the market will be limiting the seller contribution to 3 percent that will go into effect in early summer. Taken in conjunction with the new Good Faith Estimate changes that require credits for seller title insurance and yield spread premium for brokered loans, this could quickly become a major problem in an FHA transaction. Here is the announcement from FHA:

Announced FHA Policy Changes:

1. Mortgage insurance premium (MIP) will be increased to build up capital reserves and bring back private lending
   • The first step will be to raise the up-front MIP by 50 bps to 2.25% and request legislative authority to increase the maximum annual MIP that the FHA can charge.
   • If this authority is granted, then the second step will be to shift some of the premium increase from the up-front MIP to the annual MIP.
   • This shift will allow for the capital reserves to increase with less impact to the consumer, because the annual MIP is paid over the life of the loan instead of at the time of closing
   • The initial up-front increase is included in a Mortgagee Letter to be released tomorrow, January 21st, and will go into effect in the spring.
2. Update the combination of FICO scores and down payments for new borrowers.
   • New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA's 3.5% down payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10%.
   • This allows the FHA to better balance its risk and continue to provide access for those borrowers who have historically performed well.
   • This change will be posted in the Federal Register in February and, after a notice and comment period, would go into effect in the early summer.
3. Reduce allowable seller concessions from 6% to 3%
   • The current level exposes the FHA to excess risk by creating incentives to inflate appraised value. This change will bring FHA into conformity with industry standards on seller concessions.
   • This change will be posted in the Federal Register in February, and after a notice and comment period, would go into effect in the early summer.
4. Increase enforcement on FHA lenders
   • Publicly report lender performance rankings to complement currently available Neighborhood Watch data - Will be available on the HUD website on February 1.
     • This is an operational change to make information more user-friendly and hold lenders more accountable; it does not require new regulatory action as Neighborhood Watch data is currently publicly available.
   • Enhance monitoring of lender performance and compliance with FHA guidelines and standards.
     • Implement Credit Watch termination through lender underwriting ID in addition to originating ID.
     • This change is included in a Mortgagee Letter to be released tomorrow, January 21st, and is effective immediately.
   • Implement statutory authority through regulation of section 256 of the National Housing Act to enforce indemnification provisions for lenders using delegated insuring process
     • Specifications of this change will be posted in March, and after a notice and comment period, would go into effect in early summer.
   • HUD is pursuing legislative authority to increase enforcement on FHA lenders. Specific authority includes:
     • Amendment of section 256 of the National Housing Act to apply indemnification provisions to all Direct Endorsement lenders. This would require all approved mortgagees to assume liability for all of the loans that they originate and underwrite
     • Legislative authority permitting HUD maximum flexibility to establish separate "areas" for purposes of review and termination under the Credit Watch initiative. This would provide authority to withdraw originating and underwriting approval for a lender nationwide on the basis of the performance of its regional branches

As a mortgage banker, it will be easier to navigate some of the pitfalls that will come with the implementation of these policies. The announcement by FHA gave implementation time frames of these changes and a mortgagee letter will be issued tomorrow, so, now really is the right time to buy. Give me a call and lets see what we can do to qualify and put you into a home with an FHA loan. You can reach me at 541-342-7576/541-221-3455 cell or e-mail me. Alpine Mortgage Planning is located at 1200 Executive Pkwy. Ste. 100, Eugene OR 97401.

As I write this there is only 40 days left to be under contract for the purchase of a home and qualify for the tax credit.  For first time home buyers that amount is $8000.00 and for previous homeowners it is $6500.00.

  There has been a lot written on what constitutes a first time home buyer and a repeat home buyer on the Internet.  In essence if you have not owned a home in the past three years you are considered a first time home buyer.  To qualify for the repeat home buyer you have had to owned and lived in as your primary residence the home you are in for five of the past eight years.

  But with only 40 days left to find a home there is no better time than now to be out looking.  The market in Charlotte area is filled with a lot of homes priced to sell as people are looking to take advantage of the tax credit.

The one common misconception I have heard from people is they believe they have to be closed by April 30, 2010 to qualify for the tax credit.  No, you have to have found a home and have an executed sales contract to purchase the home no later than April 30, 2010.  You must close by June 30, 2010 to still receive the tax credit.

But with choices out there for just about every price range in the Charlotte area you want to give yourself some time to look around and make sure you find the right home for you now. Another problem I see coming up is the short sales.  With the influx of homes on the market being short sales the longer you wait may cost you on the tax credit if that is the home you want to purchase.

On average it is taking the banks from as little as three weeks to six months to get an answer on a short sale.  And just becasue you have an offer in by April 30th does not mean you will get the tax credit if the bank has not accepted the offer by the deadline.    

The tax credit is a benefit to any person or family looking to buy a home.  I personally took advantage of the move up tax credit back in November and my bank account was grateful when the IRS deposited in my tax refund which included the additional $6500.00 home buyer  tax credit. 

  Who of us today could not use an extra $6500.00 to $8000.00 money?  So,  if you are thinking of buying a home but maybe wanted to wait to the kids were out fo school you can buy now and close in June and still have the rewards of the tax credit.   

Dave diCecco

Realtor/Agent

www.davedicecco.com

You're probably up to your neck by now in forms and paperwork as the April 15th income tax deadline approaches. Maybe you've already completed your taxes, paid your bill, or are awaiting your refund check. Either way, now is the perfect time to revisit the extended and expanded Home Buyer's Tax Credit.

Why? Because now, as you calculate your tax bill or your refund, you can finally see in real terms just how beneficial a tax credit of up to $8,000 can be to your bottom line.

Here's the basics:

Qualified 2009 and 2010 first-time home buyers can get up to 10% of the home's purchase price or a maximum of $8,000. In November 2009, legislation extended a tax credit of up to $6,500 (or up 10% of the home's purchase price) to long-time residents of the same primary residence if they purchase a new main home. To qualify, eligible taxpayers must show that they lived in their previous homes for a five-consecutive-year period during the eight-year period ending on the closing date of the new home.

Important details to remember:

1) You don't have to pay it back (as long as you stay in your qualified home for at least 36 months).

2) If you qualify for the credit, you can still apply it to this year's taxes, even if you've already filed your returns, or save it for your 2010 returns.

3) This is a true tax credit, not a deduction. If you qualify for the full credit, there will be an actual dollar-for-dollar reduction of up to $8,000 (or up to $6,500 for qualified repeat buyers) on your tax bill now or in 2010.

4) New income qualification limits have been put in place that expanded the pool of qualified buyers.

5) If you purchased a qualified home or plan to after reading this article, you must have a contract in place by April 30, 2010 (with closing to take place by June 30, 2010), so don't wait!

There are, of course, other details and qualification requirements and restrictions that you'll need to consider. But don't hesitate to give us a call if you have any questions.

 

Dave Rosenmarkle

Broker/Owner

Highland Realty

Arlington, VA  22207

703-538-2566

davidrose@mris.com

www.HighlandAgents.com

 

An FHA Mortgage loan is a loan that is insured by the Federal Housing Administration (FHA). FHA does not actually provide the loan; it insures the mortgage for the lender. Should the borrower on an FHA mortgage default the lender may receive payment from FHA for their losses. This insurance coverage reduces the lenders risk and makes them more able or likely to offer a borrower a loan. An FHA mortgage loan may be for the purchase of a home that the borrower plans to live in, or the refinance of a home they already live in.

FHA Mortgage Loans are popular with first time buyers and those who do not have large amounts of money to put down on their home purchase since the required down payment can be as low as 3.5%. This makes it possible for many first time buyers to actually buy a home without saving a larger down payment which is typically required in a conventional loan. A borrower will need to document an income sufficient to support the repayment of the mortgage. Some of the documentation to support a borrower’s income often includes pay stubs, prior year W2 or 1099's, and copies of Federal 1040 tax forms. How much of a borrowers income may be used to purchase a new home is usually limited to ratios of 31/43. That means up to 31% of a borrowers gross wages may be used to repay the mortgage, and up to a total of 43% may be used to repay all debt including the mortgage, car loans, student loans, credit cards and other debts.

An FHA mortgage loan may be more forgiving credit wise than a conventional loan. Bankruptcies, foreclosures, short sales, collections, repossessions in the past do not mean a borrower cannot get an FHA mortgage loan. A borrower must prove that prior credit troubles are in the past if they have had troubles in the past.

There are no income limits in FHA mortgage loans, but there are maximum loan amounts. These vary by county, if you would like to look up the maximum loan amount in the area you would like a loan, check here.

The mortgage insurance on an FHA mortgage loan is comprised of two parts. There is an up-front payment, and a monthly payment. The up-front is called the UFMIP, the Up-Front Mortgage Insurance Premium. Almost every borrower finances this in their loan. The monthly payment is paid as a part of the monthly mortgage payment to the lender.

There has been a great deal of conversation recently about changes that FHA has either proposed or actually made:
- There is talk if increasing the down payment from 3.5% to 5%, just talk right now. 
- There is talk of reducing the maximum concession from a seller which is currently at 6% to 3% of the sales price, there is just talk about this change right now. 
- There is talk of an actual credit score minimum for maximum financing (putting down just the minimum down payment).  Currently there is no official minimum credit score by FHA for any FHA mortgage loan although it is a common practice among lenders to require a 620 credit score for any FHA loan.  No formal change yet.  The talk of a formal score requirement is a rumor here even though the industry practice is already in place.
- Troubled loans are now weighing on FHA's capital reserve fund, which has fallen to below its Congressional mandated minimum of 2 percent, from over 6 percent two years ago.  To replenish these funds on case numbers issued after April 5, 2010 the Up Front Mortgage Insurance will increase from 2.25% from 1.75%.  This is more than talk and is now policy. 
- There is talk of increasing the monthly mortgage insurance premiumas well, this is just talk right now.
- There is a temporary waiver in place for 1 year from 2/1/2010 on the waiting period for resale of homes owned by a seller for less than 90 days.  There are several requirements to this waiver, but this should help in moving recently renovated previously foreclosed homes.
- Last year FHA instituted some major changes it condo approvals basically eliminating all standing condo approvals and requiring a complex become re-approved and do so every 2 years.  There are 2 methods of obtaining condo approvals now, one where the lender approves the complex, and one where FHA approves the complex.  This change is in effect already, any talk about it is just grumbling from lenders about the lender condo approval process.

The Federal Housing Administration was created in 1934 and became a part of Department of Housing and Urban Development in 1965. FHA has insured over 34,000,000 loans since its inception and currently insures more than 4,800,000 loans. It has helped increase the home ownership rate in the United States of America from about 40% to almost 70%. It is a Federal program that does not cost the American taxpayer. All costs of the insurance are paid for by borrowers who obtain FHA mortgage loans.

This article is meant to talk in general terms and provide an overview of an FHA mortgage loan. Every borrower has their own situation, to discuss specifics of your situation please call or email.

_____________________________________________________________________

If you or someone you know is thinking of buying or selling property in Connecticut or is looking to refinance their home in Connecticut -Please give Jon Sigler, Mortgage Banker (NMLS#119288) a call at 860-306-8029. Be sure to check out Jon's website www.4fhaloan.com and his blog.

What is an FHA Mortgage Loan?

 

This is not an offer or commitment to lend. Articles, information and commentary are offered for informational purposes only, and should not to be relied on as legal, tax or financial advice. Consumers should retain their own legal, tax and financial professionals for such advice.

Residential and Commercial Rehabs - Prepare for the Worst but Hope for the Best

In all my years of investing if I could summarize my experience as a real estate investor and pass it on the next investor behind me I might say to him, "Prepare for the worst but hope for the best." We never expect to walk into our own project to find the walls stripped for copper or an HVAC unit missing after we close a deal with a distressed seller and we are nice enough to give them a few extra days to move out (an absolutely no-no by the way which I learned the hard way). However, an investor can plan ahead and make efforts to protect themselves and their property with the proper insurance coverage for their needs.

You may think that as a real estate investor and homeowner it is enough to have insurance coverage. this could not be further from the truth. You need to understand your insurance coverage and be sure that it meets your needs and provides the proper amount of coverage. There are three main policies an investor should understand are builder's risk insurance, umbrella policies and rental properties.

Builder's Risk Insurance
A builder's risk insurance policy is was created to address the exposures usual to an unoccupied structure under rehabilitation, construction or renovation. It also takes into account the progress and ongoing change in the market value of a property as it is being rehabilitated, constructed or renovated. The policy can include your workers' equipment and tools on site at the property. It can also cover the theft of your building materials such as copper, fixtures, etc.

A standard fire or hazard policy cannot establish a future value for the property. A standard fire or hazard policy applies to the property only as it exists, without completed repairs. Investors with standard fire or hazard policies are putting their profit at risk by not being properly insured. Builders risk insurance is a rehab investor must have.

A builder's risk policy will apply to the total as renovated or as completed end value of the property.

The completed value of property is comprised of the following items:

• Acquistion/Purchase price of the property
• Cost of the repairs and/ or improvements
• Soft Costs
• Profit

Umbrella Policies
An umbrella policy is designed to cover any gaps that occur when you reach the limit on the underlying liability coverage in a homeowners, renters, condo or auto policy. If you are ever sued, your standard homeowners or auto policy will provide you with some liability coverage, paying for judgments against you and your attorney's fees, up to a limit set in the policy.

The basic everyday homeowner's insurance policy will provide up to a maximum of $500,000 of personal liability coverage. O fcourse what if your total combined assets, including your primary resience, are more than $500,000? the answer for this is to have an umbrella liability policy. Typically, a $1,000,000 umbrella policy will cost only a few hundred dollars a year. Depending on how much property you own and/or the level of risk you feel you are exposed to make sure you purchase enough insurance to address these issues. Insurance is about economies of scale, so the more you purchase the less it costs per $100, or $1000 dollars. Always make sure that you are NEVER underinsured.

Rental Properties
An insurance policy for a rental property assumes an occupied status of your property and includes landlord liability and loss of rents coverage (very handy). If a rental property is insured as occupied when in fact it is not occupied, this could result in issues if a claim is filed. In many cases, all your properties can be bundled into one policy which will save you the investor lots of time and money.

You should work with an insurance agent that you can trust. Many times it is often best to work with an independent agent or broker who can shop for the best insurance policy to meet your needs.

 

TVM Funding Group represents many private equity firms, lenders, and investors nationwide.

We welcome any commercial or residential loan scenario nationwide.

www.TVMFunding.com
Niche Private Money Commercial and Residential Lending
& Hard Money and Rehab Loans for Real Estate Investors

Making Home Affordable Refinance Program Extended - Denver Colorado Refinance

The Making Home Affordable Refinance Program or HARP for short, has been extended to June 30, 2011.  The announcement came as the old deadline of June 10, 2010 was quickly approaching.

The Making Home Affordable Refinance Program was designed to help up to 5 million home owners who were underwater on their homes to refinance into a low fixed rate loan.  Since the program was initiated, however, only 200,000 families have taken advantage of the program.  The extension has likely been granted as home values have not begun to rise in most areas, so families need accessibility to refinance programs.

The program allows refinancing up to 125% of your home's value and is available in every state nationwide.  Previously, the Making Home Affordable Refinance Program only allowed up to 105% financing, but the maximum was increased last fall when it was realized that in many areas, home owners were much farther under water than previously thought, so 105% financing wasn't enough.

Your mortgage must be currently serviced by Fannie Mae or Freddie Mac in order to qualify for the program.  The Fannie Mae version of the Making Home Affordable Refinance Porgramis called Fannie Mae DU Refi Plus and the Freddie Mac version is called Freddie Mac Open Access.  Does Fannie Mae or Freddie Mac own your mortgage?  We can help you find out.

Here are a few more highlights of the Making Home Affordable Refinance Program:

• If you have no mortgage insurance now, you won't have it on the new mortgage, even if you exceed 80% of your home value.
• If you currently have mortgage insurance, you must refinance with your current lender in order to qualify.
• Rates are great on this program, but increase with higher loan-to-value ratios and/or lower credit scores.
• You must still fully qualify for the Making Home Affordable Refinance Program, but document waivers are granted in some cases.
• Full appraisal usually is required, but appraisal waivers or "drive by" appraisals sometimes allowed.
• If you have a 2nd mortgage, it can't be rolled into the new mortgage, but it can be "subordinated" which means the 2nd mortgage holder agrees to stay in 2nd lien position.

Call us to find out if you are eligible for the Making Home Affordable Refinance Program!  No obligation consultation.

RJ Baxter First Mortgage Corp

Branch Manager

303-670-0137 (direct)

Email Me

27902 Meadow Drive, Suite 120

Evergreen, Colorado 80439

Evergreen, Colorado Mortgage Blog

Denver Home Loans

Lots of Carlsbad buyers are seeking REO (real estate owned; bank owned; foreclosed) properties in our area. True all over I suppose. More so in some areas than others 

There are some things I like to know when starting to work with REO buyers since they have some hoops to jump through, and I am learning more all the time. Part of this comes from past experiences as well as my own thinking, but also from a recent CRS 111 class and working on my SFR certification.

 

I decided it made sense to formalize my questions as a starting point for a good discussion with Carlsbad buyers. But I'd be interested in what others have to say. This is a partial list but a good beginning. 

WHY DO YOU WANT TO BUY AN REO? WHAT IS THE MOTIVATION? 

Getting at motivation is important in any real estate purchase, and understanding what is truly driving someone in a certain direction is essential. It can be a good indicator of seriousness, or lack of. And in the case of REOs it may, in some areas at least, be more an issue of budget and what's available, versus having a keen desire to snare one of these properties. 

CAN YOU PROVIDE PROOF OF FUNDS? 

This is almost always requested with an offer - certainly so for cash buyers - but it makes sense. Buyers need to be able to provide this (I do upfront even if not asked). If they can't or don't want to, well, that's a big red flag. No POF, no offer. 

ARE YOU FINANCIALLY PREPARED AND ABLE TO GET TO CLOSING? 

This is NOT just about being pre-approved (that's a given before getting started). It also has to do with additional expenses the Carlsbad buyer might need to pay at closing because the REO lender will not (e.g., termite repairs, escrow fee, title insurance).  What if you need or want to lock in your loan, or relock it? What about the costs of repairs you will need to do? How about those missing appliances, fixtures and more you might need to buy? 

ARE YOU WILLING TO BUY "AS IS?" 

Knowing how squeamish the Carlsbad buyer is about a property that may need cosmetics, repairs or more is kinda important. Many REOs are not exactly in move-in condition, and it is unlikely the seller will do any repairs if asked. The inspection (which in my book is mandatory) may be more informational and educational for the buyer rather than to develop a repairs list. If the buyer wants only a turn-key home, we have a major challenge ahead because of supply. It may simply not be realistic. 

ARE YOU FLEXIBLE WITH REGARD TO CLOSING TIME FRAME AND POSSESSION? 

Delays are not uncommon, and you can, of course, never be 100% sure an REO closing will happen the day it is supposed to. If you have a drop dead date (e.g., end of a rental) and no alternative plan or option, this could be a problem. And delays mean other issues - changes in moving trucks, utilities, insurance and more. 

Is this all to ask? Heck no. 

• How about understanding how patient the buyer is?
• Or if they are prepared to make an offer the day the right REO comes on the market? 
• Are they willing to make an offer based on comparables and not take the "I want a home for 75 cents on the dollar."

You get the idea. 

Any great questions YOU like to ask?

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 If I can provide more information about Carlsbad real estate and surrounding areas, or the housing market in general, or otherwise assist you in your homes search, please contact me by phone or text at (760) 840-1360 or email me at JDowler@remax.net.

All content copyright © 2010 Jeff Dowler Carlsbad Homes and Real Estate Tidbits