FHA/USDA/VA and Conventional Mortgage Loan News

BIG PRINCIPAL LIMIT REDUCTION NEEDED

WITHOUT $250 MILLION HECM SUBSIDY

David H. Stevens, Assistant Secretary of Housing for the Federal Housing Administration (FHA) recently testified to the House Financial Services Subcommittee on Housing and Community Opportunity. He voiced his strong support of the administration’s reverse mortgage program. What happens there can have some major consequences to those Seniors contemplating an Oregon Reverse Mortgage in the future.

The need for this type of program is greater now than it’s ever been, due to increasing medical costs, declining employment/incomes, and less ‘savings’ in various types of pension funds/retirements accounts.

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Offered to Employed Clients

On Home Purchase Loans

We (Alpine Mortgage Planning) are offering involuntary unemployment coverage that will make the house payment of up to $1,500 per month in the case of involuntary unemployment directly to the mortgage holder for our clients in Eugene/Springfield and Lane County Oregon.

Job Loss Assurance Benefits: Benefits of up to $1,500 per month Provides up to six months of payments Does not affect unemployment income eligibility 12 month job loss protection Minimizes financial stress

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Those that follow my blog know that I have written several times about the trials and tribulations of having a Taylor Bean & Whitaker loan at the time that HUD came in and closed them down. The last post had to do with Form 1098s and how to get them on your mortgage but I have recently found out that the information given by TBW on their website and from Bank of America are wrong. WRONG! WRONG! WRONG!

I refinance my VA loan with a streamline refinance last year and when I did so, I paid a funding fee to VA to do so. That funding fee is considered the same as mortgage insurance and should be reported on the Form 1098. In my case, this didn’t happen. I did calculate that the Form 1098 that I received from Bank of America did include the interest I paid in my one payment to TBW, but didn’t include the interest I paid as prepaid interest on my loan.

The following is from Publication 936 from the IRS:

You can treat amounts you paid during 2009 for qualified mortgage insurance as home mortgage interest. …….Qualified mortgage insurance is mortgage insurance provided by the Department of Veterans Affairs, the Federal Housing Administration, or the Rural Housing Service and private mortgage insurance….

Mortgage insurance provided by the Department of Veterans Affairs is commonly known as a funding fee…….Rural Housing Service….as a guarantee fee….can be either be included in the amount of the loan or paid in full at closing….reported in box 4 of the Form 1098.

So, if you got a new FHA, VA or USDA loan during 2009 and Taylor Bean and Whitaker was the lender, you may not have all of your deductible interest reported on your Form 1098 from Bank of America or other lender that took over servicing of your loan when HUD closed TBW. The amount of this funding or guarantee or up front mortgage insurance can be found on your closing statement (HUD1) from the title company. I hope this information helps with your tax return filing.

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If you have questions about your current loan or are looking to refinance, contact me (Fred Chamberlin, the Eugene Loan Guy). If you have a VA loan, let’s discuss the possibility of a streamline refinance, rates are doing well. I would be happy to help you mortgage needs. If you have questions about mortgage loans please contact me at 541-342-7576/541-221-3455 cell or by a-mail. I am a Senior Mortgage Advisor at Alpine Mortgage Planning, 1200 Executive Pkwy., Ste. 100, Eugene OR 97401. I am here to help you with your mortgage needs.

Is all of your interest reported on your 1098? Maybe not if you had a Taylor Bean & Whitaker mortgage is a post from: Eugene Loan Guy

SUBJECT: Increase in Upfront Premiums for FHA Mortgage Insurance Effective for FHA loans for which the case number is assigned on or after April 5, 2010, FHA will collect an upfront mortgage insurance premium of 2.25 percent. This policy change will increase premiums for purchase money and refinance transactions, including FHA-to-FHA credit-qualifying and non-credit qualifying streamlined refinance transactions.

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Many of the homes for sale today – as many as half in some markets – fall under the category of “distressed properties.”

These are homes that have either gone through foreclosure or are being marketed as “short sales.” In a short sale, the homeowner can’t afford to maintain the mortgage, but the lender – rather than foreclosing – agrees to the sale of the property for less than the balance of the loan. These types of sales have different dynamics than traditional sales – with more paperwork, often a longer transaction process and, in some cases, more frustration. For these reasons, many buyers shy away from foreclosures or short sales. However, if you understand the potential pitfalls of purchasing a distressed property – and work with an agent who has a thorough knowledge of this market – you can get a great home at a great price. Many agents have been specially trained in working with foreclosures or short sales through the Certified Distressed Property Expert class or a similar course. It is important to work with a CDPE that can guide you through the process and help you locate and purchase just the right home for you. This is an outstanding time to buy a home – distressed property or not. With historically low interest rates, and a glut of homes on the market in most areas, there are bargains to be found. And the U.S. tax credit of up to $8,000 for first-time buyers – good for a home purchased before Dec. 1, 2009 – makes purchasing a home even more attractive. Is a distressed property for you? Here are pros and cons of buying one:

These types of sales take much of the emotion out of the process. You won’t be insulting anybody, for instance, if you make an offer that’s lower than the asking price. (That’s not to say that the low offer will necessarily be accepted, of course.)

Lenders are extremely interested in getting these homes sold and off the liability side of their balance sheets. Many foreclosed properties can be purchased for only a percentage of what they would have commanded five years ago. (This situation is beginning to change, though; bidding wars are breaking out on some foreclosed properties these days, especially those that are moderately priced. It is important to work with an agent that knows what is going on in this area and will be able to help you arrive at a reasonable strategy for making an offer.)

If you’re looking at a short sale, you’re not likely to get quite as good a deal as on a foreclosure. But there are definite advantages to purchasing one of these homes. For one thing, since the homeowners want to get the home sold quickly, they are likely to keep it well-maintained and in good move-in condition.

 

 

 

I have offered restaurant reviews for my readers in the past, but this time, I have a guest reviewer, my son Steven that reported on a recent performance of the Eugene Symphony at the Hult Center as part of his school work. I thought the report was excellent and gave me a real feeling of being in the audience. I convinced him to let me share it on my blog. So here is Steve Chamberlin’s report on Beethoven’s Fourth Concerto for Piano. Enjoy!

The Arrival

I attended the performance of Beethoven’s Fourth Concerto for Piano at the Hult Center in Eugene. I chose this performance for my first classical concert experience because I really had no idea what to expect. By choosing a professional performance, I felt my odds of actually liking the performance would go up significantly. I was not disappointed.

Originally I had intended to take my wife so we could have a ‘date night’, but due to a work conflict, I ended up taking my seven year old daughter. My daughter enjoys the ‘Celtic Women’ performances so I was hoping she might enjoy a live concert. As it turned out, there was only one other child at the performance. I think having the two children in the audience brought the average age of attendees down to about 65 years old.

We arrived at the Hult Center a little early in order to have enough time to find our seats and to have a look around the center before the concert. I purchased box seats so I would reduce the chance of disturbing anyone while I took notes during the concert. What I did not take into consideration was how high these seats are above the audience. Once I found our seats, it took a few minutes to get over my fear of heights. My daughter, on the other hand, loved the seats and immediately went to the rail to look over at the rest of the audience. We settled in and waited for the performance to start.

The Performance

As we sat waiting for the concert to start, the orchestra was busy tuning and reviewing the music they would be playing that night. What a cacophony. The sound was everywhere. I tried to focus on a couple instruments but it was impossible. It was like a runner preparing for a marathon, all the players warming up their muscles and getting ready to play for the next couple hours.

I looked away for just a couple moments and everyone in the orchestra except the string section had disappeared. The lights dimmed and I thought, ‘Finally we are going to start.’. I was wrong. What came next was a commercial from the President of the Hult Center acknowledging the commercial sponsors of the nights performance. Did I really just pay $88 dollars for a commercial? I was not impressed. After the commercial, she introduced the Conductor who came out and presented yet another commercial for upcoming events. This is not going well and I started wondering what I just wasted my money on. Finally the commercials are over and both the President and Conductor leave the stage.

The next person to enter the stage was a violinist who was greeted with cheers and applause. She acknowledged the crowd and took her seat. Following her was the Conductor, again greeted by applause and cheers. He stopped to acknowledge three people, first and second chair violin and what I assume was first chair viola. This just seemed odd to me for some reason, why just those three people? He took his place on the podium and raised his hands. What happened next was a complete surprise.

The bows came up and took their first draw across the strings. They had me at hello! The sound produced was, to say the least, awe inspiring. Being able to compare the dissonance of the warm-up with the powerful consonance of the opening note was just awesome. I instantly forgot the height of the seats, the $88 dollars I paid for the commercials and just enjoyed the feeling of awe that rose through my body as the strings began to play ‘Fantasia on a Theme’.

This was a great opening piece. The sound was playful and vibrant, consisting of only the string section. All of the instruments seemed to be talking to each other, either as group or individually. Both my daughter and I enjoyed the energetic chatter between the first chair violin and viola. The piece wrapped up with a resounding crescendo that was met with much applause and well deserved hoots and hollers from the audience. Being able to see the complexity of playing the music combined with hearing the sounds produced really made this performance well worth the price of admission.

The second performance started with another surprise as the Conductor introduced the composer of ‘Second Concerto for Orchestra’, Steven Stucky. The introduction gave way to a short Q&A between the Conductor and Mr. Stucky about the music we were about to hear. Apparently the title of the piece was lost on me at first. I did not realize that concertos were typically written for specific instruments and not for the whole orchestra. Mr. Stucky explained that he wrote the piece to include all of his friends in the LA Philharmonic Orchestra with the theme being friendship, fun and love.

The Conductor’s next question filled my head with the sound of a record player needle being scratched across the record violently. He asked Mr. Stucky to explain how the audience should interpret the music we were about to hear. Why would he do that? I wanted to experience the music from an ‘Unlistening’ perspective. I did not want someone telling me how to hear the music. Thankfully Mr. Stucky quipped, “Music is like a joke. If you don’t get it, I can’t explain it to you.”. Great answer! Mr. Stucky did point out that in the second movement he wanted to play a game with his friends throughout the orchestra but left it up to the audience to discover and interpret the game.

The piece started with more or less of an introduction of the orchestra. The ‘Overture’ began by introducing each section of the orchestra, moving from left to right through the strings,

into the brass and woodwinds, percussion and finally the piano and harp. Once everyone was playing together, the movement built to an abrupt end signaling the start of the second movement.

Surprisingly, about one third of the audience responded with applause! Wait a minute. The audience is supposed to wait to the end of the entire concerto before applauding, right? That explains why the other two thirds of the audience responded with grumbles and gasps. This was noticeably awkward for the Conductor and orchestra. Yes, I laughed to myself and thought ‘Whew. I’m not the only newbie here.’.

The second movement started and I began searching for ‘The Game’. To me it was not as simple as someone might think. It took listening to the entire piece to form an idea of what Mr. Stucky was trying to accomplish. I found it odd that throughout the piece we were treated to some non-typical solo’s. I never expected to hear a bassoon or a french horn or even a xylophone solo in a classical music piece, but they were there. In between the solo’s, there was a lot of ‘dream sequence’ flute playing which seemed to be building in dynamics throughout the piece. Eventually, everyone played together in a what I can only describe as a crescendo to beat all crescendos, or so I thought.

To me the game was more than just bouncing a ball around the orchestra. The game incorporated not only instrumental sound but spacial arrangement. The sounds produced not only a unique arrangement but a spacial visualization to the music. Those odd solo’s are there for a reason. They allow your ear to see the music as it moves from one place to another, bridging the hard boundaries between the sections. The game was like being only able to only hear a tennis match as the ball moved from side to side, front to back and sometimes all places at once.

As promised during the Q&A, the finale was a “fasten your seat belts” kind of performance. The sound was everywhere, very fast and very loud. The ending crescendo of the second movement paled in comparison to that of the third. A very clear and distinct ending to a memorable concerto which received appropriately timed applause, standing ovations, hoots and hollers and I even heard some yelling ‘Bravo!’. Mr. Stucky returned to the stage to receive the praise and even some flowers while acknowledging the performance of the orchestra and Conductor.

Time for the intermission. My daughter and I ventured to the lobby to stretch our legs and get something to drink. It was amazing to me how many people stopped her to ask if she liked the performance. Being one of the only children in the audience, made her a bit of a novelty and people could not get over how well behaved and attentive she was to the music. Being a girl, she enjoyed the attention along with some apple juice and a cookie during the break.

We returned to our seats to find a completely different looking stage. The stage had been set for Beethoven’s Piano Concerto No. 4. Only the strings remained with the exception of the kettle drums and of course the piano which took center stage. First violin joined the rest of the strings and played a quick tuning note for the rest of the strings to follow before taking her chair. The Conductor was the next to come out followed closely by the featured pianist Angela Hewitt. Both were met again with much applause and excitement.

As the Conductor raised his hands, there was an almost deafening silence in the hall followed by the strings section playing as one voice. The first movement progressed and it took some time before the piano joined in. I was beginning to wonder if she would ever start playing but then she did.

Generally I am not a big fan of piano music but in this case it was very pleasant. I found myself distracted by what I think are over exaggerations of movement while she played the piano but she actually seemed to be lost in the music. Throughout the three movements she would finish a large section of music and then look at the orchestra as if to say, “Did you hear that?! I rocked it! Now keep up!”.

Even though I am not a fan of the piano, I can appreciate the amount of talent Ms. Hewitt displayed. Moving through the complex notes and steps and she worked her way from one end of the piano to the other was simply amazing and she truly seemed to be enjoying the music.

As expected, the second movement claimed my daughter as she fell asleep on my lap. I almost expected that to happen as the concerto followed the fast-slow-fast format. She woke up as the vivace pace of the third movement kicked in and rounded out the concerto.

Again, the audience was on its feet as the last note played and Ms. Hewitt stood to receive the applause and acknowledge the Conductor and orchestra for an excellent performance. But when do you stop applauding? This was the question I began to ask myself after Ms. Hewitt left and returned to the stage three times. Apparently the answer to the question is; when the performer starts the encore. Ms. Hewitt treated the crowd to an encore performance. I have no idea what the name of the piece was, but as expected she rocked it. After which she returned to the stage two more times for applause and flowers. I had no idea the symphony could be filled with so much energy.

The Breakdown

Overall it was a fun night. I was very surprised at how much I actually enjoyed listening to the music and experiencing the live performance. Being able to see the amount of talent it takes to play the instruments and the percussionist running their butts off back and forth between various items to bang on, helps me to appreciate what it takes to not only perform something like this, but to even compose it in the first place. Taking all of the individual pieces into account and coming up with a single coherent sound is amazing.

So where does this experience leave me? I will definitely attend the symphony again. We are planning to attend next months performance of Beethoven’s 5^th to include Handel’s “Royal Fireworks” and Mozart’s Mass “Coronation”. Although I enjoyed the symphony with my daughter, I think this time I’ll take my wife for what should prove to be a very memorable date night.

This is the third and last in a series about the FHA Good Neighbor Next Door (GNND) program Frequently Asked Questions (FAQs). The Good Neighbor Next Door Program is designed to help law enforcement, firefighters, emergency medical and teachers purchase HUD foreclosed homes in targeted areas to assist in the revitalization of those areas. You can check out HUD property listings here.

Question: Do I Have to Pay Earnest Money or Other Deposits in Order to Submit a Contract for a GNND Home?

Answer: Yes. The amount of the earnest money deposit required is an amount equal to one percent of the list price, but no less than $500 and no more than $2,000. HUD considers all offers to be a commitment to purchase a home if you are awarded the sale. Therefore, please carefully consider your offer and be aware of HUD’s policy on earnest money as stated here: If an offer is accepted, the earnest money deposit will be credited to the purchaser at closing. If the offer is rejected, the earnest money deposit will be returned. Earnest money deposits are subject to total forfeiture for failure of the participant to close a sale.

Question: Can I Bargain with HUD on the Price of a GNND Property?

Answer: No. You must offer the exact HUD list price when bidding on any GNND property. Then you get a 50 percent discount off of that list price.

Question: What if I Leave the employment, that made me eligible, for Any Reason, during the Mandatory 3-year Residency Period?

Answer: Nothing happens, but you must continue to live in the home for the full 36-month mandatory occupancy period. If you move out of the GNND home, you will have to repay HUD on a prorated schedule. In addition, you must certify that it is your good faith intention to remain employed as a law enforcement officer, teacher or firefighter/emergency medical technician for one year beginning with your purchase. Do no attempt to participate in the program if you know in advance that you will not be employed as required for at least one year.

Question: Some Agencies Have Other Homebuying Programs. Can the GNND Program Work in Conjunction with These?

Answer: Yes, as long as you can meet all the GNND program rules while participating in these other programs.

Question: What Happens if a Participant Fails to Honor the 3-year Occupancy Requirement?

Answer: HUD can demand repayment of the discounted amount on a prorated basis. That means you would have to repay 1/36th of the discount you received for each month that you did not occupy the home. HUD also may initiate administrative sanctions including, but not limited to, barring the officer from participating in any HUD/FHA programs, as well as other federal programs. In any case of fraud or abuse, HUD will refer the case to HUD’s Office of the Inspector General for investigation and possible criminal prosecution. HUD may also notify the officer’s employing agency. Criminal prosecution and conviction for fraud and abuse concerning the GNND Program can result in a fine of up to $250,000 and/or two years in federal prison.

Question: How Does HUD Enforce the 3-year Residency Requirement?

Answer: The participant must certify he or she is living in the GNND home as a sole residence at the time of purchase and each year after that. HUD can conduct spot checks to make sure the GNND home is your sole residence at any time during the 3-year period. You also must sign a note and mortgage for the discount amount. HUD may foreclose this mortgage if you do not comply with the 36-month occupancy requirement.

I already purchased a home under the GNND Program. Where can I get information about my second mortgage?

Information is available on the Good Neighbor Next Door Loan Servicing page.

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If I can help with pre-approval or getting the loan done for you, give me (Fred Chamberlin) a call at 541-342-7576/541-221-3455 cell or let’s get together at my office, Alpine Mortgage Planning, 1200 Executive Pkwy., Ste. 100, Eugene OR 97401. I am always reachable by e-mail.

Yesterday started a series about the FHA Good Neighbor Next Door (GNND) program Frequently Asked Questions (FAQs) about how certain individuals could purchase a home in Portland Oregon and only pay half of the offered price. This is the second in a series that will answer several frequently asked questions (FAQ) about the GNND program. Here is the link to the currently offered properties but these are only available for the GNND program through today.

Question: Can I Sell the GNND Home after 3-years and Keep the Profit?

Answer: Yes. After you live in the GNND home 3 years, you can sell the home and keep any equity and/or appreciation.

Question: Do I Have to Use a Real Estate Broker or Agent to Buy a GNND Home?

Answer: Yes. Specifically, you need to use a Real Estate Broker that is approved with HUD for HUD Home purchases. Contact me if you have questions as to who you can use.

Question: Do I Have to Be a First Time Homebuyer to Take Advantage of the Program?

Answer: No. However, you may not own any other residential real property at the time you submit your offer to purchase a home and for one year previous to that date. For example, if you submit an offer to purchase a home on August 1, 2007, you may not have owned a home during the period from July 31, 2006.

Question: Where Are These Homes Located?

Answer: The HUD homes are located in designated Revitalization Areas. There are hundreds of Revitalization Areas located in the United States. According to the most current list, only Portland has homes that qualify for the GNND program, but that list is constantly updated.

Question: Does HUD Provide a Home Warranty?

Answer: No. All GNND homes are sold “as is,” without any kind of warranty.

Question: Can I Buy Multiple Unit Properties (E.g., Duplexes, Triplexes, Etc.) through the Officer Next Door Program?

Answer: No. You can only buy single unit homes, townhouses, and condominiums through the GNND Program.

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I will continue this series tomorrow, but in the meantime, take a look at the properties available right now in Portland and check back to the site as these will change often. There is only a five day window when properties are available for the Good Neighbor Next Door purchase program, so keep on it. If I can help with pre-approval or getting the loan done for you, give me (Fred Chamberlin) a call at 541-342-7576/541-221-3455 cell or let’s get together at my office, Alpine Mortgage Planning, 1200 Executive Pkwy., Ste. 100, Eugene OR 97401. I am always reachable by e-mail. Check back tomorrow for the final part of the series.

Do you know the ins and outs of mortgage lending? Do you know the difference between an FHA and an FmHA loan? Do you have a trusted advisor to help you buy your new Eugene or Springfield home? Have you been disappointed with the knowledge base of those you have talked to about a loan in Cottage Grove or Creswell or Florence?

Not everyone has the knowledge to help you with finding the right loan for you. Not everyone has the skills to make a borderline loan work. Not everyone is willing to take the take to help you get to the point where you can become an Oregon home owner. I believe I can and do on a daily basis.

I am Fred Chamberlin and have been a mortgage consultant for over 20 years, most of it in the Eugene/Springfield area. I have many satisfied and happy clients around the state and would like to help you in your quest for the right mortgage loan. I am always looking forward in the mortgage business because things are changing rapidly, not like some of my colleagues that seem to be looking in the mirror (like below) instead of working through the next challenge:

The mortgage business is TODAY! Yes, there are a lot of changes but that is why you need someone that is on top of the changes. I am not telling you that because of what I did yesterday, you should come to me for your mortgage needs. I am telling you that because of what I am doing tomorrow, you should come to me for your mortgage needs.

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Find out today what you can afford to purchase. Get pre-approved before you start looking for your new home. FHA and FmHA (USDA) is a great way to purchase a home but have the experienced help you need to get it done. You can reach me (Fred Chamberlin) at 541-342-7576/541-221-3455 cell or by e-mail. Alpine Mortgage Planning is located at 1200 Executive Pkwy., Ste. 100, Eugene OR 97401. I am your local lender. Call today.

Saturday I posted information about the FHA Good Neighbor Next Door (GNND) program and how you could purchase a home in Portland Oregon and only pay half of the offered price. Today, I am starting a series (this is part 1) that will answer several frequently asked questions (FAQ) about the GNND program. Here is the link to the currently offered properties.

Question: What Is the Good Neighbor Next Door (GNND) Sales Program?

Answer: HUD wants to strengthen America’s communities. The Good Neighbor Next Door Program offers HUD owned single family (one-unit) homes to eligible participants at a 50% discount.

Question: Am I Eligible for the GNND Sales Program?

Answer: Law enforcement officers, teachers and firefighters/emergency medical technicians and who meet all other requirements of the program are eligible to purchase an available home.

Question: How Much of a Discount Can I Get on a HUD Home?

Answer: You can get a 50 percent discount off the HUD appraised value. For example, if HUD lists a home at $100,000, you can buy it for $50,000 provided, you occupy the home as your personal residence for the required occupancy period. If you qualify for any FHA-insured mortgage program, your down payment is only $100 and you may finance closing costs.

Question: What Kind of Mortgage Financing Do I Need?

Answer: You may use FHA, VA, or conventional mortgages, or cash. HUD requires you to sign a Second Mortgage and Note on the discounted amount (which is $50,000 in the example above). No interest or payments are required on this “silent second” mortgage if you live in the home for the entire 36 month occupancy period. You may be required to pay a pro-rata portion of the discount to HUD should you fail to fulfill the three year occupancy requirement.

Question: What is the Occupancy Period?

You must live in the home as your sole residence for a full 36 months. The purpose of the program is to strengthen communities by encouraging employed, professional law enforcement officers, teachers and firefighters/emergency medical technicians to live in the community. You will have 30, 90 or 180 days to move into the home you purchase, depending on HUD’s determination of the condition of the home and the level of repairs that may be required, if any. The 30th, 90th or 180th day is the start date for the occupancy period. Your are released from all obligations under this program at the end of the 36th month following the start date. HUD views the occupancy obligation seriously and vigorously pursues violators to the fullest extent of the law.

Question: What Is an FHA Rehabilitation Mortgage and How Can It Help Me Buy a HUD Home?

Answer: The FHA 203(k) mortgage program helps homebuyers buy a home and have enough money to rehabilitate or repair it. Repairs must cost more than $5,000. The cost of the repairs and the mortgage are combined into a single monthly payment. Consider FHA’s 203(b) program if needed repairs are under $5,000. FHA also has a new Streamlined 203(k) program which may be useful.

Discuss these financing options with me!

I will continue this series tomorrow, but in the meantime, take a look at the properties available right now in Portland and check back to the site as these will change often. There is only a five day window when properties are available for the Good Neighbor Next Door purchase program, so keep on it. If I can help with pre-approval or getting the loan done for you, give me (Fred Chamberlin) a call at 541-342-7576/541-221-3455 cell or let’s get together at my office, Alpine Mortgage Planning, 1200 Executive Pkwy., Ste. 100, Eugene OR 97401. I am always reachable by e-mail.