Happy Father’s Day!

Happy Father’s Day!

If you like real-time updates follow me on my http://www.twitter.com/seanlarue. I’m constantly updating it and getting the latest information out to you. This week’s rate sheet is attached.

Quick Tip:
If you’re in escrow on a property, and the buyer is using an FHA loan advise your seller not to transfer title in any way, shape, or form during the escrow process. FHA has a 90 day flip rule in place that prevents a sale if the title is passed from one person to another… even changing it from a single owner to joint ownership. This does not apply for REO properties. If you don’t follow this rule it will stall your escrow. Call me with questions.

Mortgage Hotline:
Tune in to AM 970, 1140, or 1250 on Sunday 11:00am to 12:00pm to here me talk about your credit report. What you need to know about getting your score up or keeping your score up. Also, I’ll be talking about the 203k rehab construction loan and some of the details and opportunity that lies within. You can also listen online at http://www.knewsradio.com

I’m never too busy for any of your referrals and I’m looking forward to hearing from you.

What is the expected impact of HOPE for Homeowners (H4H)?

What is the expected impact of HOPE for Homeowners (H4H)? Per HUD.gov

The Congressional Budget Office estimates that as many as 400,000 homeowners could avoid foreclosure through this program over the next three years.

What is the value of the HOPE for Homeowners program to lenders?

Only FHA approved mortgagees can originate H4H loans. H4H loans may benefit lenders by helping them avoid foreclosure expenses. Although the lender will likely have to write down their existing loan in order to originate an H4H loan, it is still less expensive than foreclosure and disposition of property.

Why should existing lien holders accept the short payoff that is required under the terms of the law?

HUD understands that it will be a challenge to encourage lien holders to accept short payoffs in order to participate in this program, especially when there are other loss mitigation tools available that may provide a more suitable solution. However, in instances where those tools are ineffective, we believe that the holders of these mortgages should accept the short payoffs in lieu of the tremendous losses associated with foreclosure. Similar challenges exist with subordinate lien holders but by offering them the opportunity to have an interest in FHA’s share of future appreciation in the property, we hope to entice these lien holders to participate as well.

What advice should loan servicers/lenders give borrowers who are facing difficulties fulfilling their obligations on their existing mortgage(s)?

The H4H program is another loss mitigation option to keep borrowers in their homes on sustainable and affordable terms. Lenders should provide information to borrowers on possible options include contacting a HUD approved counseling agency. Borrowers may call 1-800-569-4287 or visit http://www.hud.gov/offices/hsg/sfh/hcc/hccprof14.cfm

When can I start originating H4H loans?

The program is effective from October 1, 2008 to September 30, 2011.

Eligibility and Underwriting issues

How does the H4H program differ from FHA Secure?

Under H4H:

• Any type of first mortgage as long as it was originated on or before January 1, 2008.

• All existing lien holders must waive prepayment penalties and late charges, as well as extinguish all liens against the property.

• Existing first lien holders are required to accept the proceeds of the H4H mortgage as payment in full.

• Borrowers will be required to share both the initial equity created with the H4H loan, and future appreciation.

• The maximum loan amount is $550,440, nationwide.

How does the appreciation sharing piece work?

To entice subordinate lien holders to participate in the negotiation process and release their liens, FHA has the authority to share its future appreciation entitlement with them. At settlement, subordinate lien holders will receive a certificate that evidences their interest as an obligation backed by HUD, with payment conditional on the value of HUD’s appreciation share.

Are there special underwriting requirements for the H4H program?

Yes, in addition to standard underwriting procedures, the underwriter must:

• Determine that the borrowers existing total monthly mortgage payment is in excess of 31% of their gross monthly income in March of 2008.

• Determine the borrower’s total monthly mortgage payment on the new H4H loan is less than the borrower’s total monthly mortgage payment on existing loans.

• Determine that the DTI’s are at or below 31/43. However, if the borrower has successfully completed a 3 month trial modification, ratios can be expanded not to exceed 38/50.

• Review income as reported on the transcript or copy of the borrower’s income tax returns for the previous two years.

How is the total monthly mortgage payment on the existing loan(s) calculated for the purpose of qualifying the borrower for the H4H program?

The total monthly mortgage payment is defined as the fully indexed, fully-amortizing Principal, Interest, Taxes and Insurance (PITI) payment. This includes homeowner’s association dues, grounds rents, special assessments, and all subordinate liens as of March 1, 2008.

Can I add a non-occupying co-borrower to help qualify?

No, however you may add a non-occupying ,co-signer who does not have any ownership interest in the property.

What if there is currently a non-occupying co-borrower on the loan?

The non-occupying co-borrower will need to quit claim their interest in the property prior to the occupying co-borrowers applying for the H4H program.

What loans are eligible for refinance under the H4H program?

Any type of mortgage is eligible for refinancing under the H4H program, including conventional (prime, Alt-A, subprime), or government backed (FHA, VA, or Rural Development), fixed or adjustable rate mortgage.

The loan must have originated on or before January 1, 2008, the borrower must have made at least six (6) payments on the existing mortgage, and the total monthly mortgage payment exceeds 31% or the borrower’s March 2008 gross monthly income. The borrower may be current or delinquent at the time the new H4H mortgage is originated.

What properties are eligible?

The property to be refinanced must be the borrower’s primary and only residence in which the borrower has an ownership interest.

Only 1-unit properties are eligible, including condominiums, cooperative units and manufactured housing permanently affixed to realty.

Does the borrower have to be delinquent on their existing loans to be eligible for the H4H program?

No, the borrower may be current or delinquent at the time of application for the H4h mortgage.

What must the existing lienholders do?

Existing first mortgage lien holders must waive any and all prepayment penalties and late payment fees, agree to accept the proceeds from the H4H mortgage as payment in full, and release their outstanding mortgage liens.

Existing subordinate lien holders must waive all prepayment penalties and late payment fees as well as release their outstanding mortgage liens.

Will I have to get a new appraisal or can I use an AVM?

In all cases a new FHA appraisal must be ordered specifically for the H4H transaction and the appraisal should be no more than 3 months old at the time of closing.

What are the rates for the Upfront Mortgage and Annual Insurance Premiums (UFMIP)?

The Upfront Mortgage Insurance Premium (UFMIP) is 3% and the Annual is 1.5%

Can the UFMIP be financed?

Yes, however the maximum LTV under the H4H program is 90% regardless of whether or not the UFMIP is financed.

Will there be additional disclosure requirements?

Yes, the originating lender must provide the HOPE for Homeowners Consumer Disclosure and Certification form at the time of initial application for the Program.

Are there additional lender certifications?

Due to the statutory requirements and the unique nature of the program, lenders and underwriters will execute a certification assuring HUD that they have underwritten and closed the loan in accordance with the H4H program guidelines.

What is the maximum LTV for the H4H program?

The maximum LTV for the Program is 90%, including any financed UFMIP.

Who can pay closing costs?

Standard FHA policy regarding closing costs is applicable, including the 1% cap on origination fees.

• Borrowers may pay closing costs from their own assets,

• They may be financed into the mortgage provided the 90% LTV limit is not exceeded,

• The servicing lender, originating lender and/or a third party (e.g. a Federal, state or local Program) and/or

• The originating lender my pay the borrower’s closing costs and prepaid items through premium pricing.

Is subordinate financing allowed to pay closing costs, like under FHASecure?

No. Subordinate financing is not allowed in the first 5 years of the mortgage except in when necessary to ensure maintenance of property standards.

Will Wall Street be receptive to purchasing these new loans?

These loans can be securitized in Ginnie Mae FS Pools, making them attractive to Wall Street and other investors.

Changes in Loan Programs – There is change afoot!

Dear Friends and Clients!

Happy October! Wow another great week of change! I know you are getting busy out there! I am NEVER too busy for any of your referrals!

Changes in Loan Programs – There is change afoot!

Mortgage guidelines are changing for conventional and FHA financing. I am keeping up with these to keep you informed. See the bullet points below:

· Turning a primary residence into a rental requires 30% equity for conventional and 25% for FHA to count rental income toward qualifying ratios.
· Investment properties require a 20% down payment.
· Second Homes require only 10% down!
· FHA now requires 3.5% down payment as of October 1, 2008.
· Down Payment assistance (Seller Paid) – like Nehemiah, HART, etc is not allowed as of October 1, 2008.
· Down Payment assistance – Gift funds from a family member, non-profit, employer still ok.
· Bankruptcy Seasoning – Discharged = 2 years with re-established credit Dismissed = 4 years with re-established credit.
· Short-sales – two-year seasoning period with re-established credit.

NOTE: MOST FIRST TIME HOMEBUYERS WILL QUALIFY FOR A LOAN!! IT IS NOT DOOM AND GLOOM! Let’s take a dream of homeownership and make it a reality and focus on what we can do!

Market Update
The Labor Department reported this morning that 159,000 jobs were lost in September. This is much worse than the 105,000 lost jobs that economists were expecting.

Normally, Bonds would move higher on the news; however, speculation that rate cuts may be coming in the future has Bonds bouncing around a bit.

Attached you will find my current rate sheet for the weekend. These rates have been accumulated from, Chase, Wells Fargo, IndyMac, Countrywide, Citi Mortgage, Wachovia, and Everbank. I have handpicked the best rates from all these banks for the most popular loan programs, so that I can ensure you and your clients the very best deal.

I am your FHA expert!

Friends,

We are off to a great start this week with the up-coming reports for the market. The Fed will be talking about plans to maintain the fed funds rate where it is or to hike it hedging inflation. Remember, if the Fed increase the rates it is good for mortgage pricing and interest rates will go down.

How often do you need to change your oil for the car? It depends, so see the newsletter below.

Oh by the way, I’m never to busy for any of your purchase or refinance mortgage referrals! I am your FHA expert! Make it a great week!

June’s monthly newsletter

Dear Clients, Family & Friends,

The summer is here can you feel it? The real estate market is not slowing down this summer so if you’re thinking of buying a property I can get the financing ready for you! There are many programs for 1st time home buyers and FHA is a great way to get lowest monthly payments and low to little money down.

June’s monthly newsletter can give you some tips to save money with retailers on how to use your stimulus check. It’s all about the plastic… credit cards! See this issue to get money saving tips!

Jobs Report

Attached you will find my current rate sheet for the weekend. These rates have been accumulated from, Chase, Wells Fargo, IndyMac, Countrywide, Citi Mortgage, Wachovia, Everbank, and Washington Mutual. I have handpicked the best rates from all these banks for the most popular loan programs, so that I can ensure you and your clients the very best deal.

Market Update:

Rates ended down for the week by 0.25% on Conforming Loans 30 Fix and stayed about the same for Jumbo 30 yr Fix

Today the jobs report came out with a revision of 80,000 job losses for March. This allows mortgage pricing to stay lower longer. It reported the biggest job loss in five years with the unemployment rate eclipsing the 5% mark.

The jobs report is the economic number with the biggest impact on mortgage rates.

Do you know someone who wants a mortgage at less than 5%? Call me for details.

100% financing to $500,000? Ask me how.

Have a great weekend and by the way, I’m never too busy for any of your mortgage referrals!