FHA/USDA/VA and Conventional Mortgage Loan News

Want a lower mortgage payment? Want a lower interest rate? Got an FHA mortgage? Property value an issue? FHA Streamline Refinance is the answer.

Up until now, the FHA streamline program was a hard product to use because of having to bring money in to close. This was due to establishing a new impound/escrow account for taxes and insurance while your current lender held your escrow account until after they were paid off. However, that changes in October as do some other things.

In October, the current lender will be paying the taxes from the current impound account. In October, FHA will be increasing (probably) the price of yearly (paid monthly) mortgage insurance. However, in regard to the mortgage insurance, any loans in process (FHA case numbers assigned) will be on the old rate.

I love giving examples, take this one for instance:

Now is the perfect time to think about an FHA to FHA refinance. Mortgage insurance rates are going up. Taxes will soon be paid. No appraisal or income qualification. As long as your mortgage is, and has been, current, it can be done. Why not save money on your monthly mortgage payment while saving thousands of dollars on interest over the life of the loan? If your rate is higher than this or you owe more on your loan than this, your savings could potentially be a lot higher. Let’s talk!

It is time to start the process to get that case number assigned and the rate you need to make the process work. We need to get going to take advantage of the window of opportunity being provided. I can help you with your refinance in either Oregon or California.

Contact me

Navigating the mortgage approval process can be daunting. You need someone on your side. I am available right now to help you with the loan process and know the ins and outs of FHA, VA, USDA and conventional financing. If you want to buy a home using an FHA loan or refinance using VA, I am here to help. Contact me at Alpine Mortgage Planning, 1200 Executive Pkwy., Ste. 100, Eugene OR 97401, 541-342-7576/541-221-3455 cell or by e-mail. Only you can make the choice it is time to get the process started.

Save on monthly payments

USDA announced the official change in program guidelines for the 100% USDA Rural Guaranteed Home Loans officially raising the up front fee to 3.5%

A side benefit to USDA Rural Development is that they now have the authority to charge a new annual fee of up to .5 percent. This is similar to the yearly mortgage insurance premium currently charged by FHA and will make the loan very comparable to FHA if, and when, this fee is included.

According this week’s announcement from USDA, “Based on current usage, sufficient funds should be available for the remainder of the FY to fund all guaranteed refinance loans at a 0.5 percent guarantee fee.” This should be very good news for those companies funding the loans while waiting for the reauthorization of the program, like us. It wouldn’t be nice to have several of these loans on the books and then find out you need to be charging for a yearly fee also.

The darker areas above show the portion of Lane County that is not eligible for the USDA Rural Guaranteed Home Loan Program. Basically, the program is available in nearly all of Lane County that is not in the Eugene/Springfield urban growth boundary.

Rural Development is also working on a system upgrade to the “GUS” automated underwriting system that will, once again, underwrite the USDA loans online. The current system is still set with the 2% up front fee, instead of the new 3.5% fee. This is not expected to happen before October. “While the 3.5 percent up-front fee is sufficient at the current subsidy rate, we must be prepared to make adjustments in later years using the new authority for an annual fee to maintain a zero cost program.”

Low Income and Very Low Income borrowers will continue to be accommodated with a waiver of fees through the USDA Direct Loan Program.

Contact me

Navigating the mortgage approval process can be daunting. You need someone on your side. I am available right now to help you with the loan process and know the ins and outs of FHA, VA, USDA and conventional financing. If you want to buy a home using an USDA loan or refinance using VA, I am here to help. Contact me at Alpine Mortgage Planning, 1200 Executive Pkwy., Ste. 100, Eugene OR 97401, 541-342-7576/541-221-3455 cell or by e-mail. Only you can make the choice it is time to get the process started.

USDA No Money Down Program changes is a post from: No Money Down OR & CA

Today is one of those days that I feel like expressing a bit of outrage at those websites that purport to give out information about mortgages and real estate loans that you have no idea who they are or what they are trying to do.

I get Google alerts for postings that have to do with several key mortgage words, so I am often looking at other websites to see what they have to say and am very often disappointed to find out that it is a site’s primary focus to collect money through Google Ads, is a link farm, or is gathering names to sell to third party lenders, or all three.

Beside those sites, there are the national lenders that may be posting their “deal of the day” or some such tripe and as I look at the various sites, I am constantly amazed at the number of them that are not in the least bit compliant with national and state regulations.

Advertising

For instance, if offering mortgages, are you aware that the loan officer on the site must be licensed and regulated through NMLS and the state? My NMLS number is 271072 and my Oregon and California license numbers are the same, just expressed differently. Take a look at the majority of the websites out there with mortgage information and tell me if you can find that anywhere on the site.

Also, when advertising mortgages, and blog posts are often advertisements, the Equal Housing Opportunity symbol must be present. It doesn’t have to be very big, but it needs to be there. Mine is on every page of my blog sites in the sidebar along with my license information.

How about contact information? I have so many ways to contact me, you can get overload, but so many of those websites out there don’t have a real person that you can get in touch with unless you fill out one of their forms and then that information will probably be sold to a third party. Is that what you want, or do you want a real person? Check out some of the places you find on a Google search and let me know if you find the EHO logo or license or contact information. Even national lenders have the Equal Housing logo on their websites. They also have contact information, but I personally think you are better off contacting me.

Basically, I am suggesting that it would be wise to check out the site you are on before committing to filling out a form, they may be gathering your information just to sell it. Know who you are dealing with. Watch out for masks. My smiling (although not too handsome) face is all over my websites.

Contact me

Navigating the mortgage approval process can be daunting. You need someone on your side. I am available right now to help you with the loan process and know the ins and outs of FHA, VA, USDA and conventional financing. If you want to buy a home using an FHA loan or refinance using VA, I am here to help. Contact me at Alpine Mortgage Planning, 1200 Executive Pkwy., Ste. 100, Eugene OR 97401, 541-342-7576/541-221-3455 cell or by e-mail. Only you can make the choice it is time to get the process started.

Last week I posted information about the new FHA refinance program that is targeting non FHA home owners that are upside down on their mortgage equity. FHA has come out with more information about the program and how it will work.

Here are the eligibility requirements:

• Existing loan to be refinanced is not FHA insured;
• Must owe more on their mortgage than the value of the property;
• Must be current on the existing mortgage to be refinanced;
• Must have a “FICO based” decision credit score greater than or equal to 500;
• Existing first lien holder must write off at least 10% of the unpaid principal balance (UPB);
• Loan-to-value (LTV) ratio of no more than 97.75%;
• Combined loan-to-value (CLTV) ratio must be 115% or less; and
• For manually underwritten loans, the qualifying ratios can be no greater than 31/50.

Additionally, standard FHA underwriting requirements apply. That should be interesting since nothing about this program is “exactly” standard. Also, homeowners are not eligible for the program if they have a conviction for (a) felony larceny, theft, fraud, or forgery; (b) money laundering; or (c) tax evasion within the past 10 years.

One of the parts of the program I thought would be most helpful is for those that have a 1st and 2nd mortgage on their property because it allows a CLTV (combined loan to value) of 115%. However, when looking over the program details, I think this may become very complicated. For instance, the first mortgage holder must reduce the principal by a minimum of 10% and a maximum LTV (loan to value) of 97.75% and they receive payoff of that amount. The second mortgage holder will have to reduce their loan amount to the 115 percent CLTV mark and they will receive a “refinance compensation” from the Treasury and HUD for the amount they forgave and payments on the remainder. This is a complicated formula.

I am very interested in seeing how this plays out. As the Realtors® I have talked to can attest, second mortgage holders can be a source of annoyance on a short sale transaction and this is a “short” refinance transaction. It can take several months to get an answer from the 2nd mortgage holder and in this scenario, they aren’t getting paid up front, they will still have to take payments. They also have to register with Fannie Mae to be able to receive the compensation from HUD.

Contact me

This is still in its preliminary stages, but if you are interested in applying for this program, it is not too early to start the process, it will probably take some time to get the proper approvals from current lien holders. Navigating the mortgage approval process can be daunting. You need someone on your side. I am available right now to help you with the loan process and know the ins and outs of FHA, VA, USDA and conventional financing. If you want to buy a home using an FHA loan or refinance using VA, I am here to help. Contact me at Alpine Mortgage Planning, 1200 Executive Pkwy., Ste. 100, Eugene OR 97401, 541-342-7576/541-221-3455 cell or by e-mail. Only you can make the choice it is time to get the process started.

I talk to people every day that are interested in seeing if it makes sense for them to refinance and sometimes I actually tell them no. I know that it is hard to believe but everyone that wants to refinance, should not do it.

There are some “rule-of-thumb” guidelines out there that people have been hanging on to over the years. For instance, “If you can’t get at least 2% reduction in rate, it isn’t worth doing.” Sometimes that is correct and sometimes it isn’t. If you have a $50,000 loan, it probably will not be cost effective to reduce your rate by 2%, whereas, if you have a $350,000 loan, it may be worthwhile to reduce your rate by 1%.

Every circumstance is different, and that is why you should work with a knowledgeable loan consultant. Maybe it would be the right thing for you to refinance to a shorter term. Maybe it would make sense to take cash out of your home, assuming you have any left in it. Take a look at this discussion from Fox Business News:

http://video.foxbusiness.com/v/4312379/home-refinancing-rates-surge/?playlist_id=87185

Also, it is a good idea to shop around, not only for rate and fees but also for the right company and loan consultant. Just because someone promises the lowest rate, doesn’t mean that you will get the best deal, but if someone is promising you something that sounds too good to be true, it probably is. Then there are those companies that are advertising out there that make what they are offering sound so wonderful that you should jump right on it when in reality, it isn’t even competitive in the market place. Watch out for adjustable rates masquerading as fixed rates in advertising.

Look before you leap and find out what you can about your choice. Are they established? Are they local? (National telemarketers and advertisers have to pay for that somehow.) Are they competitive? Are they honorable? Can they close in the time they want to lock? Will they tell you that you shouldn’t refinance when it doesn’t make sense to you? Or are they only after that next loan? Are they licensed? Do they have references? Do they know what drives interest rates?

Contact me

Navigating the mortgage approval process can be daunting. You need someone on your side. I am available right now to help you with the loan process and know the ins and outs of FHA, VA, USDA and conventional financing. If you want to buy a home using an FHA loan or refinance using VA, I am here to help. Contact me at Alpine Mortgage Planning, 1200 Executive Pkwy., Ste. 100, Eugene OR 97401, 541-342-7576/541-221-3455 cell or by e-mail. Only you can make the choice it is time to get the process started.

I don’t know if this is a good deal or not, I am often not certain about the usefulness of government programs until I see them in action, but assuming that it is good, HUD has a new program coming out that will assist underwater NON-FHA home owners. This means negative equity position is the first requirement for the program.

 Making Home Affordable Program

This is an enhancement to the existing Making Home Affordable Program (MHA) and should give a greater number of responsible borrowers an opportunity to remain in their homes. “These enhancements are designed to maintain homeownership by providing borrowers, who owe more on their mortgage than the value of their home, opportunities to refinance into an affordable FHA loan.” according to HUDs’ mortgagee letter 2010-23. “The opportunity allows borrowers who are current on their mortgage to qualify for an FHA refinance loan provided that the lender or investor writes off the unpaid principal balance of the original first lien mortgage by at least 10 percent.”

Who is helped?

The question that immediately came to my mind was, “Who will this help?” Answer, anyone that got a first and second to buy a home and haven’t been able to qualify for the Fannie Mae or Freddie Mac refinance programs due to the existence of the second mortgage. Rather than having to sell on a short sale, home owners may now get the same benefit and retain their home while getting into a lower cost FHA loan.

Fine Print

As with all things, these loans are not for everyone and not everyone will qualify. For example, the first mortgage has to be current and no behind in payments. The loan to value on the first mortgage can not be any higher than 96.5% based on current value. So, if you owe $300,000 on you home and it appraises at $250,000, you could get a loan for $241,250 and the lender would need to agree to write off $58,750 which would probably still net them more than a short sale or foreclosure would.

But if there is a second in place and they won’t negotiate balance, there could be some difficulty. In a case where there is a second involved that was used to purchase the home, the maximum CLTV (combined loan to value) is 115%, “Non-extinguished existing subordinate mortgages must be re-subordinated and the new loan may not have a combined loan-to-value ratio greater than 115 percent.”

The home owner must still qualify for the new loan, but there may be some latitude on credit scores, but that will depend on the lender’s overlays. These enhancements are effective for loans with case numbers issued on or after September 7, 2010, which are closed on or before December 31, 2012.. These enhancements include loss coverage to be provided from funds under the Emergency Economic Stabilization Act of 2008, as amended (EESA). If the availability of such coverage is delayed beyond September 7, 2010, implementation of these enhancements will also be delayed.

If you have tried to take advantage of current low rates to refinance but haven’t been able to do so because of negative equity, they may be an ideal solution for you. The roll out of the program is less than a month away and negotiations are going to need to be done with the lien holders, so it is not too soon to start planning for the program.

Contact me

Navigating the mortgage approval process can be daunting. You need someone on your side. I am available right now to help you with the loan process and know the ins and outs of FHA, VA, USDA and conventional financing. If you want to buy a home using an FHA loan or refinance using VA, I am here to help. Contact me at Alpine Mortgage Planning, 1200 Executive Pkwy., Ste. 100, Eugene OR 97401, 541-342-7576/541-221-3455 cell or by e-mail. Only you can make the choice it is time to get the process started.

Although I have heard of several lenders that are not processing and funding USDA Rural Guaranteed Loans until Congress re-authorizes funding for the program, we at Alpine Mortgage Planning are funding USDA loans.

There are hoops that have to be jumped through for any lender that funds USDA loans under the current circumstances and they must fund the loan and keep it on their books until USDA is in the guarantee market again. That is what we are doing. Our USDA loans are processed, underwritten and funded “in-house.”

Contact Me

If you would like more information about USDA Loans, give me a call. Even if you are already working with a mortgage lender, call me. You wouldn’t have back surgery without a second opinion, why would you buy a home without one. Call me for the second opinion. We can discuss your specific information and if you are in the best product for you, I will tell you so. I am Fred Chamberlin, Senior Mortgage Consultant at Alpine Mortgage Planning, 1200 Executive Pkwy., Eugene OR 97401. I am here to help you with the mortgage loan process and also help you avoid stress. The mortgage process is changing rapidly, make certain you are working with someone that can keep up with the changes. You can reach me at 541-342-7576/541-221-3455 cell or by e-mail. Trust experience to help you with your Eugene/Springfield mortgage questions. One final note, my offer is not limited to Lane County but can be used anywhere in Oregon or California that qualifies for a USDA loan.. Call today!

Here is a Lane County map. Any area outside of the dark part should fall under the USDA guidelines:

Given the amount of advertising being done for reverse mortgages in Oregon and nationwide, it is surprising but the number of reverse mortgage is actually down.  “This article explains a lot of the reasons behind reverse mortgages actually being off nearly 40 percent so far this year. Not only that, but the annual pace translates to only 70,000 transactions nationally for the entire year.

Wholesale and retail lenders active in the reverse mortgage market are less than half of past year’s lenders, according to Reverse Mortgage Insight, watching industry trends.”

In my opinion, reverse mortgages should be on the rise as interest rates are at all time lows, fees are lower than they have been on reverse mortgage, stock portfolios are oftentimes cut in half or worse and baby boomers reach retirement age. So, the question is, Why?

The first answer has to do with property values. A lot of seniors that still owe money against their home no longer have enough equity to qualify for a reverse mortgage due to falling property values, but that doesn’t explain the large number of seniors that own their homes outright. It may be for them that they believe they can’t get enough from their home now, with the reduced values, but in reality, with the changes in the program to mostly fixed rates from the primarily adjustable reverses in the past, more money is often available.

Some may think waiting for the recovery of the housing market may be their best bet, however, there are possibilities that FHA will change maximum mortgages for reverse mortgages in the future (down) and make this the wrong choice. There are others that are taking advantage of historic low rates on forward mortgages, but this still leaves them with monthly payments.

So, what does that leave? I think it is a lot of an public relations problem. A number of critical reports in 2010, from the National Consumer Law Center, Consumer Reports, US News & World Report, and the Comptroller of the Currency, put a lot of people off of reverse mortgages. The report from the Comptroller of the Currency even compared reverse mortgages to subprime mortgages which I believe is a injustice to the program. I believe sentiment on reverse mortgages has swung too far in the opposite direction – from complacent acceptance to paranoid rejection – and will at some point swing back.

One bright spot for reverse mortgages was reported in Reverse Mortgage Daily in that for the first time since December 2009, reverse mortgage were on the rise in July. This could mean that the market has hit bottom. Continued erosion of retirement accounts and low rates and fees on reverse mortgages could be just the ticket for many seniors in the days to come.

It has always been Laurie and my belief that an informed consumer can make a better decision than one that is making their decision based on feelings. These articles and reports are worth reading and should be considered before taking out a reverse mortgage. Reverse mortgages are not for everyone, but they are for more people than are taking advantage of them currently.

Contact Us

If you have questions about a Reverse Mortgage we will not pressure you to take one out, but it may be in your best interest to check out one now, rather than later. Please contact one of us today at 541-342-7576. Alpine Mortgage Planning is located at 1200 Executive Pkwy., Ste. 100, Eugene OR 97401. You can also e-mail Laurie here or Fred here. We are here to help you make the decision that is right for you. Reverse Mortgages are not for everyone, but they are an excellent choice for some people. Isn’t it time that you checked out the advantages of a Reverse Mortgage?

August 1, all loan officers have to be licensed through the National Mortgage Licensing System (NMLS) and the state they are doing business in unless they work for a national bank. So, if you are working with a loan officer you should find out if they are licensed. The NMLS now has an easy way to search for a mortgage company or one of its loan officers by using this link.

 The website will show licensing status and employment history of the loan originator. Loan originators in Oregon now must meet strict criteria, including 20 hours of education before receiving a license, 10 hours of continuing education per year, passing both a national and a state test, passing a criminal background check, and being covered by a surety bond.

The website and stronger licensing standards are part of the new national mortgage lending licensing system required by the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008. The “SAFE” Act requires all mortgage lenders and loan originators to be licensed through the national system by July 31, 2010, and meet stringent requirements. The database does not yet include loan originators who work for banks or credit unions, but they are subject to similar federal oversight and will be in the database soon. (no date on this yet) I do know of some loan originators that could not pass the tests went work for the banks instead. This would cause me some concern when dealing with a bank loan originator as to their professional quality.

Oregon Division of Finance and Corporate Securities has been working long hours to bring the state into compliance with the new laws. “Being part of the national licensing system with uniform requirements enables us to better protect Oregonians by ensuring anyone doing business here is also following the law in other states,” said David Tatman, administrator of the department’s Division of Finance and Corporate Securities.

For the information of my readers, I am currently licensed in Oregon and California. My NMLS and MLO (Mortgage Loan Originator) number is 271072. Anyone you do business with should be able to give your their MLS number. For more information about mortgages or just to discuss your current situation, give me a call at 541-743-2966 to set up an appointment. You can also reach me by e-mail.

This week after passing the House and Senate and signed by the President, the closing date for the First Time and “Move Up” Home Buyer tax credit was extended to September 30. I want to make this perfectly clear, the closing date for those purchases qualifying for the tax credit has been extended. The tax credit has not been extended!

There has been a lot of misinformation making the rounds about an extension of the Home Buyer Tax Credit, but this is not an extension of the Tax Credit, it is an extension to the length of time available to close loans entered into contract before the April 30, 2010 deadline for the Tax Credit. This time to close extension is from June 30 to September 30.

The NAR (National Association of Realtors®) estimated that the number of people nationally that would not be eligible for the Tax Credit due to delayed closing could be between 180,000 – 200,000 people. Many of them were probably trying to purchase a home on a short sale, which can take significantly longer than a normal buyer/seller transaction due to the bank involvement in the negotiation. If you are involved in a fairly straightforward transaction and haven’t closed yet, you might want to consider finding another lender – someone with local processing, underwriting and doc drawing – LIKE ME!

It is my opinion that the likelihood of another tax credit is pretty low, although I said the same thing the last time that it was extended. Sales did fall off after the expiration of the April 30 tax credit and we are waiting to see what happens to the market going forward. Lower interest rates could be another reason to bring people into the market actually saving more than the $8,000 (tax credit amount) over the course of the loan in interest.

Lower prices on homes, significant inventory of homes, negotiable sellers and low interest rates make for an excellent climate for purchasing a home. If you need a home, this could be the right time to look.

Contact me

Navigating the mortgage approval process can be daunting. You need someone on your side. I am available right now to help you with the loan process and know the ins and outs of FHA, VA, USDA and conventional financing. If you want to buy a home using an FHA loan or refinance using VA, I am here to help. Contact me at Alpine Mortgage Planning, 1200 Executive Pkwy., Ste. 100, Eugene OR 97401, 541-342-7576/541-221-3455 cell or by e-mail. Only you can make the choice it is time to get the process started.