One of the results of the mortgage crisis is the movement to reform the agencies and GSE's - primarily Fannie Mae, Freddie Mac, and FHA. Much of this push worries me a good bit about the potential to harm a system that for decades was successful in building home ownership in the US.  The FHA Reform Act though seems to provide some flexibility and tools to enable FHA to manage more effectively its risk and its insurance funds. 

In the bill there are provisions to:

1. Allow FHA to ncrease the Annual Mortgage Insurance premium.
2. Allow charging annual mortgage insurance premiums to be discretionary
3. Authorize HUD to require that lenders indemnify for mortgage insurance claims if the "Mortgage was not originated or underwritten in accordance with HUD requirements."
4. Allows HUD to set up additional controls and systems to manage and address credit risk and early defaults and claims and lender compliance with underwriting standards - with the goal of safety and soundness of the "Mutual Mortgage Insurance Fund."

The annual  mortgage premium is the portion of the FHA mortgage insurance that is in the monthly mortgage payment. FHA has requested this flexibility to modify monthly premiums. There is the possibility that this will allow the up front mortgage premiums to be reduced.

These changes are in response to the reviews subsequent to the insurance fund reserve falling below Congressional mandated levels. The reviews seemed to point to a concentration of delinquency problems with select lenders, a need to revamp some of the underwriting standards, and a need to monitor more closely application of underwriting standards at the origination level.

These changes seem to be mostly positive for the agency and for the industry.

 

Richard Smith NMLS 184479 Cell: 423-280-0345 Toll Free: 888-474-9920 Office: 423-899-6898

American Acceptance Mortgage, Inc NMLS 132505, TN/GA Licensee Email: rsmith@aamonline.com

FHA, VA, Rural Development, Conventional, Jumbo,
Reverse Mortgages, FHA 203k Renovation

Home financing in Tennessee and Georgia.

Apply Here

Begin your Home Search here

Reverse Mortgage Calculator

www.RichardSmithHomeLoans.com

Ten Best Buyer Behavior Practices

Many things we read in the blogosphere inspire creative writing ideas.  I recently read a blog post about an agent who felt so abused by the actions of a buyer she thought a "Buyer Code of Ethics" should be initiated.  I too, have felt the sting of a buyer not thinking the real estate agent was a "human being" so decided to create a  Best Buyer Behavior Practice list.  

If you are a serious buyer and would like the BEST agent in the area to help you find the property of your dreams, then take a look at some of the Best Buyer Behavior Practices. Following the suggested behavior list can help you find the right agent to work with and be prepared to have a pleasant real estate experience.  When you find the right individual and treat them with professional respect, they will do everything within their power to help you achieve your purchase goals.

Once you connect with the right person, you will have found your "agent for life" who will help you with more things that you can ever image. You  will have a relationship on a higher level than just a "salesperson" and their knowledge of the community and people connections will be invaluable as you invest in the biggest asset of your life.  You will have a friend you can call and ask any questions and if they don't know the answer, they will probably know someone who does.

1. Determine if you are a serious buyer or just a looker.                                                                    It is perfectly fine to "look" just be HONEST with the agent so they can help you create a plan of action and decide together what the best steps might be to start looking for a home. Honesty HAS to be the basis of the new relationship with a real estate broker.
2. Remember you are creating a "team" to help with the purchase of a home.                                  There will be many players so you need to have a great captain.  You will need a lender, insurance agent, title company, several inspector possibly and in some states an attorney. You need to select someone who can be there through the entire process letting you know what to expect and who can interact with the entire team to get you to the finish line.
3. Make the purchase of the property a BUSINESS decision.                                                              Buying real estate is one of the biggest investments most people make.  Be sure you use all your business decision making skills and take the emotion out of the process.  You can fall in love with the home you select (after the inspection) but be sure you remember the entire process is still a business transaction.
4. Down payment and qualifying.
Before you even start looking you have to come to grips with the fact you will need a down         payment and closing costs.  If you do not have any down payment then selecting a real estate agent who has knowledge of the down payment assistance programs and a lender who has access to those programs is paramount in going forward. Qualifying for the loan is a MUST before house shopping!
5. Identify What You Want.                                                                                                                      Actually make a list you will be giving to the agent you will be selecting to help meet your needs: Location, Size, Bedrooms, Bathrooms, Condition, Garage size, timing for closing, Special conditions.
6. Selecting an agent.                                                                                                                                If you know the area you are wanting to purchase in, start with a search of that particular area to try and find a specialist.  The process for selecting a real estate agent requires more business skills and link above should give information for that aspect of the transaction.  
7. Commit to working with one agent.                                                                                                        Once you select the agent you connect with on a personal communication level then make a business plan of the shopping process and commit to that agent with a buyer agency relationship.  What does this mean to the buyer?  That you are going to purchase any real estate with the agent you have selected.  What does that do for you?  It makes you the employer and that agent is going to do everything possible to make your real estate goals come together in the form of a successful closing.
   
8. Respect the agents time.                                                                                                                         You are a peson and so is the agent.  When doing business with a real estate agent you should think about how you would do business with any professional.  If you are calling an accountant or an attorney you have to wait for an appointment most of the time. If you are connecting with a producing real estate agent who you have interviewed to help you with a purchase, you need to realize they have other clients and commitments so be understanding about your turn when it comes to looking at homes.  If you are ready to buy today, have your loan approved, and want to sign a contract NOW, most agents will be prepared to meet those needs. However if that is NOT your status then take a breath and please wait your turn and be considerate of your team.      
9. Disclose your agency agreement.                                                                                                         Many times a buyer gets excited and wants to call on an ad or a sign because they might not be able to talk to their buyers agent the minute you want to know an answer.  If you are tempted to call on your own.. PLEASE disclose to the listing agent you are calling that you are working with a buyers agent and just wanted to know the price or ask the question you may have. Full disclosure keeps everything honest and above board.  If the property you call on is the one you end up buying and you alienate the listing agent by not disclosing you are working with an agent it will be bad vibes you will have to deal with that in the transaction.  Honesty is ALWAYS the best policy.  If you are tempted to go to a new home development without your agent, PLEASE stop and ask the on site policy for coming to the project without your agent.  If they do not pay your agent a fee if they are not there, then do not go in.  Remember, you are on a team so make the plan with your agent before you go out running around without them.  A buyers agent works for YOU and has a fiduciary responsibility to protect you and your interest so let them do their job.. make a plan and work the plan.  
10. Listen to your real estate agent.                                                                                                             If you have done your job right in interviewing an agent to work with on a real estate investment then listen to what they have to say.  You can always have respectful conversation about any subject but they are in the real estate business and have the experience needed to help steer you in the right direction to coming together with resolutions on any conflict.                                                                           
    

Buyers, if you are looking for a DEAL, select the best real estate agent then remember:

• If the home is a good value and other people might be interested in it, you might not get the property with the lowest offer.
  
• Large earnest money deposits speak to the seller and the listing agent showing you are serious about purchasing the property.
• Short sales can take a LONG time to process and lots of games could be going on in the process.
• Every transaction needs to be a win/win.  Find out what some of the things the seller wants and include them in the offer. 

Every real estate transaction has waves..... that is almost a guarantee!  If you are in the same boat rowing with your buyers agent you will navigate the waves to a smooth closing.

Implement the ten best buyer behavior practices and you are sure to be on the A team!

 

 

       

Cosmic Cow Pie

Carra Riley

Fannie Mae came out with new underwriting guidelines for borrowers who have a history of pre-foreclosure, deed-in-lieu foreclosure, and short sales.

The guidelines make it easier for some to get financing on a new home ... but more difficult for others.

 

Deed-in-Lieu

Those who previously went through a ‘deed-in-lieu foreclosure’ ... i.e., turned in the keys of their house before the bank could officially foreclose ... have it easier by being able to buy a new home in as little as 2 years. Before, they would have had to wait 4-7 years.

Pre-Foreclosure Sale

It looks like there’s no change for pre-foreclosure sales, i.e., those who were able to avoid final judgment by selling first. Two years before and 2 years now.

 

Short Sale

The biggest punishment comes for those who did a Short Sale without ever defaulting on their loans. Before, there was no waiting period to qualify for a new purchase per se, though most lenders had been reluctant to approve new loans. Now ‘Short Sellers’ must wait at least 2 years, no exceptions.

 

Many, though, have also been stating that those who have gone through a Foreclosure with a capital ‘F’ can also purchase in as little as 2 years. This isn’t true.

It’s important to delineate between the words ‘pre-foreclosure’ and ‘foreclosure’.

• ‘Pre-foreclosure’ means before the foreclosure or final judgment has happened.
• ‘Foreclosure’ means the house has been taken by the bank and title has transferred.

As you’ll see in the Fannie Mae Announcement, only a ‘pre-foreclosure sale’ is addressed.

• A pre-foreclosure sale is one in which the homeowner defaulted and foreclosure proceedings had been initiated ... but a successful Short Sale stopped final foreclosure.
• A Short Sale, it would appear, is a short sale in which the homeowner has not defaulted.

Confused yet? So are we all!

Since these new guidelines do not address Foreclosure with a capital ‘F’, former homeowners must still wait at least 5-7 years before they can purchase a new home.

I think it’s sad, though, that homeowners who have borrowed and scraped and gone into debt to keep those foreclosure papers from being served are being lumped together with homeowners who defaulted. The distinction is a fine line but a valid one.

Adding to the woes of ‘pure’ Short Sellers is Fannie Mae’s requirement that they must be in default at least 30 days before the Short Sale can be approved. Doesn’t this punish the homeowner who is just trying to do the right thing? And doesn’t this deplete the available number of homebuyers ... homebuyers that the real estate market desperately needs for a recovery?

With 3 million homes predicted to be foreclosed this year ... and maybe next year ... and  maybe into 2012, at the end of this long road, there won’t be any homebuyers left.

 *  *  *  *

JUDY CHAPMAN | “Your House ... Your Future ... My Job”

 

HOMES OF DISTINCTION  | WATERFRONT | GOLF COURSE

NORTH SUBURBS | DOWNTOWN ORLANDO | EAST ORLANDO

NEW HOME CONSTRUCTION

 

Oviedo · Winter Springs · Winter Park · Maitland

Baldwin Park · Lake Nona

Downtown Orlando · East Orlando 

 

Ask the Queen of Short Sales about ...

The #1 Way to Avoid Foreclosure

or "How to Sell Your House in an Upside-Down Market"

 

 

 

Coldwell Banker Residential | 521 E Mitchell Hammock Rd | Oviedo FL 32765 | Judy@OrlandoHouseSales.com | (407) 227-7763           

© 2007-2010 www.activerain.com/blogs/OrlandoforSale by Judy Chapman ALL RIGHTS RESERVED. Portions of this content may be used with attribution.

 

But I want to look at the house before I get pre-approved….just in case I don’t like it…

 

How many times has a Real Estate Agent listed a home and then gets a call from a prospective buyer that goes something like this,

 

  “Hi, this is Bob and I want to take a look at the house you have on Kengsington Ave.”

     “Great, I’d love to show it to you the house on Kengsington is a great house,” says Mr/Mrs Real Estate Agent.  “I just need to ask you a couple of questions first.  Have you been to a Lender and have been pre-qualified?”

     “Um…No I haven’t, but I have great credit and money down so I know I’ll qualify.  I just want to see the house to see if I really like it and if I want to buy it I’ll meet with a Lender then.”

  

   That’s what they all say, thinks the Agent…..

 

     So, what is the problem with the above conversation between a person who really wants to see the house and the Agent?  Let’s try another example…..

 

     “Hi, this is Roberta and I am standing in front of your house on Ball Street and it looks like a great house, can you meet me here so I can get inside and see if I want to buy it?”

     “Sure,” says Mr/ Mrs Agent, “The house on Ball Street is a great house and I’d love to show it to you, let me just ask you a couple of questions first.  I only show homes to people who can qualify for the loan, have you been to the Lender yet to get pre-approved?”

      “Um, no, I haven’t. But, I’m not sure how my credit looks, my boyfriend just left me and said he was going to make the truck payments and I just found out he didn’t, and I co-signed for him, and when he left he emptied out the bank account..the jerk.”  Tears start to roll down her cheeks.   “I just got kicked out of our apartment because once again, he said he left a check for our landlord before he left and now I found out he didn’t and the check he wrote last month bounced. I don’t have a job.  So, you see I really need a place to live.”

 

The Agent politely gets off the phone…..

 

In both of these cases it is so important that you get pre-qualifed from a professional Loan Officer. The Agent need to know they have a ready and willing buyer, one that can put the offer in if they like the house.  The reason is below:

     “Hi, this is John and I just saw the house you have listed on Kengsington Ave and I would like to get inside, when can we set an appointment to see it?”

     “Yes, the house on Kensgington is a great house.”  Says Mr/ Mrs Agent.   “I’d love to show you, I only show my listings to people who can qualify for a loan, have you been to a Lender yet?”

     “Yes, as a matter of fact I just left my Loan Officer’s office, I have the pre-qualification letter in my hand.”

     “Great, how about we meet at 4:00 this afternoon, does that time work for you?”

 

Debi Copfer 801-897-3324 Loan Officer, Salt Lake City,UTAH,  FHA, Conventional, First Time Home Buyers, Pre-Approvals, The Utah Mortgage Blog

What is meant by "Title?"
"Title" is the foundation of ownership property. It means that you have a legal right to possess that property and to use it within the restrictions imposed by authorities or limitations on its use-superimposed on the basic right to possession by previous owners.

What is Title Insurance?
The legal answer is "the application of insurance principles to hazards inherent in real estate titles."

Do I need Title Insurance?
Most definitely! Title insurance is a means of protecting yourself from financial loss in the event that problems develop regarding the rights to ownership of your property. There may be hidden title defects that even the most careful title search will not reveal. In addition to protection from financial loss, title insurance pays the cost of defending against any covered claim.

Why does buying a home differ from all other purchases?
No other property has a useful life that compares with that of land. Owners die, new ones succeed, but land goes on forever. Owners of goods may change their locations at will, but land is immovable, it lends itself to the absorption of innumerable rights. Over the ages, this so impressed lawyers and jurists that they formed a separate body of laws for land. These laws, creating many types of rights in land, are so numerous and so complex it is impossible for there to be a mathematical certainty of ownership.

But the lender already requires Title Insurance, won't that protect me?
Not necessarily. There are two types of Title Insurance. Your lender likely will require that you purchase a Lender's Policy. This policy only insures that the financial institution has a valid, enforceable lien on the property. Most lenders require this type of insurance, and typically require the borrower to pay for it.
An Owner's Policy on the other hand is designed to protect you from title defects that existed prior to the issue date of your policy. Title troubles, such as improper estate proceedings or pending legal action, could put your equity at serious risk. If a valid claim is filed, in addition to financial loss up to the face amount of the policy, your owner's title policy covers the full cost of any legal defense of your title.

What is meant by a title defect?
Anything in the entire ownership of a piece of real estate which may encumber the owner's right to the "peaceful enjoyment" of the property or which may cause the owner to lose any portion of the property.

The contract I signed makes the sale subject to title to the property's being good. Doesn't that protect me?
If anything should happen to defeat the title, your cause of action would be against the seller, and his ability to pay. Attorney's fees and expenses would not be covered.

The real estate broker said the title is good. Isn't that good enough?
No one can be sure the title is clean.

What happens if my home is protected by title insurance and it's challenged?
You notify the title insurance company and they defend the title, even if it goes to court. The title company bears all expenses.

How much does Title Insurance cost?
The one-time premium is directly related to the value of your home. Typically, it is less expensive than your annual auto insurance. It is a one-time only expense, paid when you purchase your home. Yet it continues to provide complete coverage for as long as you, or your heirs, own the property.

Should I shop around for the best Title Insurance deal?
Florida regulates the rates on the premiums for title insurance. The only costs that may differ would be the actual fees, such as search and examination, closing, and miscellaneous fees such as wire transfers, FedEx or courier fee and endorsements.

Can Infinite Title handle the closing?
Yes. We act as a central clearinghouse for the parties involved-collecting necessary documents, insuring adherence to the lender's title instructions, making arrangements for proper payment and distribution of funds. We are fully prepared to work with you from the beginning of your transaction all the way through to conclusion.

What items are needed at closing?
You will want to have these items complete or in hand when you come to the closing (please confirm with your escrow officer prior to closing):

Buyer
Buyer's copy of purchase agreement
Cashier's check for amount needed to close
Proof of purchase of insurance for fire, casualty, etc.
Photo identification (passport, driver's license, or state-issued identification card)

Seller
Seller's copy of purchase agreement
Any unrecorded instruments that affect the title
Proof of satisfaction of any mechanics' liens, chattel mortgages, judgments, or mortgages that were paid prior to the closing
Photo identification (passport, driver's license, or state-issued identification card)

One comment I hear regularly from agents is that they have clients who are able to buy a home but are afraid to do it.  The agents remind their clients that this is a great time to buy-that rates and home prices are both low, there are tax benefits or even that tax credits are available (here in California at least).  But these buyers are securely perched "on the fence" and don't appear to be budging any time soon. 

Most of us are feeling the pinch of the current economy ourselves so we can certainly understand buyers' fears.  My guess is that many of them are concerned about the security of their jobs, particularly in areas where unemployment is high.

This week I learned about a tool that might give those folks on the fence a little nudge.

 

The Homeowner Education and Loan Protection (HELP) Program is offered through the Rainy Day Foundation, a 501(c)3.  The HELP Program offers counseling and education to new homeowners that encourages an on time relationship with their lender and a successful long-term home ownership experience. 

The HELP Program also includes a Job Loss Protection benefit which protects homeowners if they experience an involuntary loss of employment and qualify for state unemployment benefits.  The Program provides up to six months mortgage payments, principal and interest to a maximum of $2,000 per month, during the first 24 months of the loan.  The program is underwritten by an insurance company.  There is a one time fee of $500 paid at close of escrow.  The fee can be paid by anyone EXCEPT the buyer (e. g. seller, agent, family member).

Borrowers who are employed full-time, between the ages of 18 and 66 and U S residents are eligible.  Those who are self-employed, aware of a pending layoff, independent contractors or active military are not eligible. 

For more information about this program and its benefits to home sellers and buyers, visit http://www.myhelp-connection.com/certification.asp.