Renovate with Tate

There are 4 less foreclosed homes to sell in NC

2011-08-31T13:24:00.000-04:00

During the past two months I've been traveling around North and South Carolina speaking to Allen Tate Realtors about the benefits and processes of the FHA 203k Renovation Loan program; about 14 presentations to over 280 agents. The feedback has been great and our results are gaining traction. This month alone we closed 4 renovation loans. Each was a foreclosure sale; the average sale price was approximately $83k and the average amount of the borrower's renovation was $27k.

It is exciting to be a part of a buyer's vision for improving a property, making it their own, and turning a vacant REO property into a home all at the same time....one house at a time.

But remember, this loan program is NOT just for foreclosed properties. If you've found (or have) the perfect house that just needs updating, we can help! Call me today to learn how.

So, what is a renovation loan anyway?

2011-07-29T15:52:00.000-04:00

An FHA 203k renovation loan is one FHA mortgage loan used to purchase (or refinance) a property and renovate it. The most common form of the loan is classified as a “streamline” 203k which caps the amount of the renovation at $35k and the scope of the work to non-structural & eligible improvements (eligible repairs below).

Let’s take a home purchase of $100k, for example. The buyer would like to remodel the kitchen, bath rooms, and flooring throughout the house for a total of $25k in improvements. The purchase contract is executed with the seller for $100k. The buyer would then apply for his/her mortgage with a renovation loan specialist (me). The interest rate is slightly higher than a regular FHA loan, a contingency reserve for potential cost over-runs is added and there are some other minor fees associated with the renovation aspect of the loan.

Purchase price: $100,000

Renovation:                                       $25,000
Contingency reserve & fees:      $2,980
Total acquisition cost:                   $127,980

The borrower's required down payment of 3.5% of the acquisition cost equals $4,480. Assuming he/she negotiates with the seller to pay all or most of the closing costs, he/she won’t need much more money than that.

At closing, the seller receives their proceeds, ½ of the renovation is funded to the buyer and contractor jointly, and the renovation begins within 30 days of closing. The project must be completed within 6 months (generally done much sooner) and the final disbursement is made after a final inspection, title update, and loan review are complete.

These loans are for owner occupied borrowers with the expectation that the home will remain occupied by the owner for at least one year. FHA may be rolling out an option for investors in the near future.

Simple, right?

Call your Allen Tate Realtor and Mortgage Consultant for additional information and assistance!

Eligible Repairs
•       Repair/replacement of roofs, gutter and downspouts
•       Repair/replacement/upgrade of existing HVAC systems
•       Repair/replacement/upgrade of plumbing and electrical systems
•       Repair/replace flooring
•       Painting both interior and exterior
•       Weatherization, including storm windows and doors, insulation, weather stripping, etc.
•       Purchase and installation of appliances, including free-standing ranges, refrigerators, washer/dryers, dishwashers and microwave ovens ($3k max)
•       Accessibility improvement for persons with disabilities
•       Lead based paint stabilization or abatement of lead based paint hazards
•       Repair/replace/add exterior decks, patios, porches
•       Basement finishing and remodeling, which does not involve structural repairs
•       Basement waterproofing
•       Window and door replacements and exterior wall re-siding
•       Septic system and/or well repair or replacement
•       Minor remodeling, such as kitchens, which does not involve structural repairs

Simple steps to a successful renovation loan

2011-07-22T16:34:00.000-04:00

1. Get pre-qualified and consider a full pre-approval. This statement is true for any type of loan. If you are a well qualified buyer, a pre-qualification is sufficient from the right loan officer. But if you have a couple issues that require review from an underwriter (loan decision maker), get fully pre-approved. The difference is that with a pre-approval you supply your supporting documentation (W2's, pay stubs, etc.) and sign an application disclosure package. The result is a loan commitment and much stronger negotiating power with sellers.

2. Get organized. Once you find the right house and negotiate the contract the real work begins. For most buyers, you'll need to turn your pre-qualification into a loan approval/commitment and lock your rate. At the same time, you will need to begin working with your general contractor(s) to specify the scope of work and cost of renovations. These need to be nailed down prior to ordering the appraisal so we can determine the "after improved" value.

3. Give plenty of time. Try to negotiate a 60 day contract to close period to give yourself and us the time needed to coordinate the financing and renovation. We may be able to close faster but there are many variables at play and you don't need the extra stress of a quick closing.

4. Be decisive. If you have trouble picking the toppings to put on your pizza, this may not be the right loan program for you. Identify what you want to renovate and make it happen.

5. Consider hiring a HUD consultant. Usually HUD consultants are used for larger renovations and ones that include structural items. However if you could use help identifying the scope of work and working with contractors, a HUD consultant may be right for you.

Most importantly, work with a real estate and mortgage company that is committed to your success now and in the future: The Allen Tate Company.

Call or email me if you are interested in learning more about our renovation lending program.

Financing a Distressed Sale

2011-07-10T11:52:00.000-04:00

Depending on which news story you read on which day, somewhere around 30 percent of today's sales are classified as distressed. A distressed sale is a foreclosure or short sale and often in some form of disrepair. As a buyer you may be able to buy the property at a substantial discount to other sales in the neighborhood.

But how do you finance the fix-up on your fixer-upper?

Consider an FHA 203k loan. This renovation/rehab loan program combines a traditional home mortgage with a home repair loan, giving you the flexibility to buy a property that needs repair and fold the cost of those repairs into a single mortgage.

With a Streamline 203(k) loan, you can borrow up to $35,000 for improvements such as repair/replacement of roofs, flooring, siding and windows; electrical, plumbing, painting, weatherization, basement finishing and appliances. You can even use the money to improve energy efficiency or to make a home accessible for a disabled person.

Work must begin within 30 days of closing and be completed within six months. Funds are placed in escrow and contractors are paid as the work is completed.

To get the most from your 203(k), it’s important to find the right property as well as a Realtor who knows and understands the program. At Allen Tate Mortgage, we’ll help you navigate the renovation loan process and turn that fixer-upper into your dream home.

The Shirmeyer Report / Sigma Research Inc.

2011-04-08T16:57:00.000-04:00

My company subscribes to David Shirmeyer's daily market report which provides commentary on mortgage interest rates and the news and political events that affect them. His style is sometimes brash and to the point. After almost 4 years of reading his twice daily reports, this has got to be my favorite paragraph read during that time:

"Still no budget agreement but getting closer; apparently the main issue now is Republicans wanting to end funding for Planned Parenthood while Democrats stand firm that America needs abortions paid for by tax payers. The fumbling in Washington should make all of us wonder if our "leaders" actually have a clue about what their jobs are and the increasing need to cut spending and increase revenues. According the latest news both have now agreed to cut $38B from the budget, a pittance compared to what has to be cut in 2012. We continue to believe the government will not shut down, that a deal will be met at the 11th hour; its what politicians do---play with themselves."

How could you not love this guy?

Here is the rest of his commentary from this afternoon:

"The stock market didn't appreciate the foot-dragging, the bond market also with increasing interest rates. The third week in a row that interest rates have moved higher.The dollar is taking a hit on the way our leaders lead and that most all countries have now or will shortly begin to increase rates. IN the US Bernanke and the Fed still hang on QE and are sending the message that it will not increase rates because Bernanke doesn't believe inflation is an issue now or in the near term. Meanwhile gold continues to increase as a hedge against inflation and crude oil continues to increase. Crude now at $113.00 and gold at $1474.00.

The Fed messed up under Greenspan keeping rates too low for too long triggering among other things the sub prime mortgage collapse that brought the US at the door step of depression. Bernanke seems to be headed down the same road, he admits he didn't get it that making mortgages to anyone breathing would be a problem. The end of it all has torn the mortgage markets apart and lead to the government telling private businesses how much they can pay employees."

If you're interested in more from Mr. Shirmeyer, here is his web site: http://www.shirmeyer.com/

Homebuyer Financing Methods

2011-03-29T14:24:00.000-04:00

I received an interesting newsletter from a real estate agent partner the other day. It was Campbell/Inside Mortgage Finance's Housing Trends Update and it contained a graph depicting how buyer's paid for their homes (nationally) over the past 12 months; cash, FHA, or Conventional Conforming loans (Fannie/Freddie).

Cash Buyers:
Feb 2010 -- 27.5%
Feb 2011 -- 33.7%

FHA Loans:
Feb 2010 -- 33.3%
Feb 2011 -- 27.8%

Fannie/Freddie Loans:
Feb 2010 -- 14.2%
Feb 2011 -- 13.6%

The article makes a couple points. One, there are more investors in the market paying cash for distressed properties. And two, mortgage financing is becoming increasingly difficult.

In my last blog post I discussed how FHA was increasing fees in an effort to promote a more balanced mortgage market. However, Fannie and Freddie also continue to raise fees and tighten lending restrictions hindering any market share increases in Conventional/Conforming lending and doing little to improve the real estate market.

If you are a real estate agent and would like more information about the article you can go to www.campbellsurveys.com.

FHA is increasing the monthly mortgage insurance charges...again

2011-03-01T16:12:00.000-05:00

Back in October I posted a positive blog about FHA's increasing charges and the hope that they would lead the mortgage industry back towards a more balanced market. Well apparently the increases were not enough.

Effective with FHA case numbers issued on and after April 4th, 2011, FHA is increasing the rate of monthly mortgage insurance.

For a typical 30 year borrower that is putting the minimum allowable down payment, the current factor used to calculate the fee is going from 0.9% per year to 1.15% per year.

Let's look at the monthly payments that would have resulted during 3 time periods: before 10/4/10, present time, and on or after 4/4/11 (assuming equal interest rates of 4.75% and 5.547% APR, 30yr fixed mortgage, 3.5% down payment, $150k purchase price, excluding property taxes and home owner's insurance).

Before 10/4/2010: Principal & Interest =   $772.07
                              Pmi =                          $  66.34
                             Total =                        $838.41

Present:                  Principal & Interest = $762.63
                              Pmi =                         $108.56
                              Total =                       $871.19

April 4, 2011 & After:
                              Principal & Interest = $762.63
                              Pmi =                        $138.72
                              Total =                      $901.35

Stay tuned, I'm sure more changes are coming.

Due Diligence Checklist for Real Estate Agents

2011-02-01T10:27:00.000-05:00

The North Carolina Offer to Purchase real estate contract has adopted a due diligence period which gives the buyer the opportunity to investigate the property and determine if they will proceed with the transaction. Buyers must also have their mortgage in place prior to the expiration of the due diligence date or risk losing their earnest money deposit.

Here is a checklist for agents and buyers and some things to keep in mind about the time periods involved.

Check list for agents for Due Diligence time frame:
______Client makes loan application – typically within 5 days
______Loan app submitted to Processing – 24 hours after receipt of complete application
______Appraisal ordered within 24 hours of receipt of complete loan application
______Appraisal delivered to Lender – 5-7 business days
______Appraisal reviewed and cleared – 5 business days
______Give Attorney name and contact information to loan officer
______Title Work ordered/Title work received and reviewed by Lender
______Homeowner’s Insurance verified/binder received for closing
______Condo/Townhome – Provide Lender with contact information for HOA/questionnaire/master policy
______Inspections completed and repairs negotiated
______Survey ordered/received by attorney
______Loan Approval (minor conditions can exist)

Loan types/processes that require additional time:
• Funds to close : Gift funds/Stock Liquidation/Bonus Check/401k loan or liquidation. Borrower needs to check up front to find out how much time is required.
• Property is unique or has very few comps – appraiser may need additional time.
• USDA Loan - Add additional time for USDA review (add 3 weeks)
• NC Housing Loan - Add additional time for NC Housing review (add 1 week)
• VA Loan – appraisal can take longer
• Jumbo loan - Typically need 45 days for approval
• Self-employed
• Second Mortgage – If borrower is getting a first and second mortgage, the second mortgage is typically a separate process and may require a 2nd appraisal.

Feel free to contact me as soon as you're thinking about buying a home in North Carolina!

Interesting Article...and perhaps some foreshadowing?

2011-01-16T18:14:00.000-05:00

I read an interesting article in the Charlotte Observer this morning. The link is below. It's any ones guess what will happen with regard to Fannie & Freddie, the mortgage interest deduction, and the future direction of the US mortgage industry, but I found two things about Canadian mortgage industry quite interesting.

One is that mortgage loans in Canada are "full recourse" loans. Which means that if the borrower defaults, he/she is still on the hook for the deficiency balance after the home is sold in foreclosure. Can you say, "no more strategic defaults?" I can think of a few other possible benefits to such an arrangement.

The second is that their is no secondary market for mortgage backed securities in Canada. I'm certain there are multiple pros and cons to this scenario.

Here are a few possible pros to the Canadian differences:
1. Perhaps the bank working with a delinquent homeowner might have more options and incentives to help their borrowers.
2. Perhaps banks might be able to make more logical lending decisions rather than only lend to those who fit into Fannie & Freddie's box. (Govie loan underwriters often impress me with flashes of logic)
3. Perhaps borrowers would give their budgets a second or third review before signing on the "dotted line" if they knew they'd be responsible for the debt; house or no house.
4. Perhaps, and perhaps best of all, it might eliminate Wall Street gambling on the future of so many American citizens who identify home ownership as a part of our American Dream.

Happy MLK Day.

http://www.charlotteobserver.com/2011/01/16/1983796/canada-avoids-us-mortgage-crisis.html

The Pest Inspection, from a lender's perspective

2010-12-22T11:24:00.000-05:00

As a general rule, I always recommend that a home buyer in North Carolina have a licensed pest inspector perform an inspection when purchasing a home. The pest inspector will issue the, "Official North Carolina Wood-Destroying Insect Information Report" to document his/her findings. We commonly refer to this document as the Termite Report or the WDIR.

There are more than just termites that we look for in this report. Here are the 3 main areas that I focus on as a lender.

1. Live bugs. Termites are just one of a few "wood destroying" bugs that can damage your home's structure. If there are live bugs they need to be treated.
2. Location of found bugs or previous infestation of bugs. The fine print of the WDIR states, "if there is evidence of a previous or an active infestation of subterranean termites and/or other wood-destroying insects in the wooden members it must be assumed that there is some damage to the wooden members caused by this infestation, no matter how slight. If this is the case, the structural integrity of this property should be evaluated by a qualified building expert." In other words, if the bugs are eating or have eaten some wood, the wood should be repaired. We will ask that a licensed general contractor or structural engineer inspect the integrity of the damaged areas and repair any damage.
3. Moisture. Bugs love wet wood. If the moisture readings are 20% or higher we will require that the conditions causing the excessive moisture be corrected. This may be as simple as re-routing gutter drains or installing a vapor barrier. Every situation is different but it is important to correct the situation and monitor moisture in the future.

Although a pest inspection should be important to any home buyer, it is only required to be given to your lender if it is a requirement of your loan (FHA & VA), an appraiser recommends a pest inspection, or if the cost of the inspection is included in your settlement charges at closing.

Please contact me if I can be of any assistance with your home buying and financing needs. Thank you.

Another great reason to be a homeowner

2010-11-30T10:58:00.000-05:00

Real estate expert Pat Zaby blogs about one of the many reasons home ownership trumps renting. Enjoy his article.

http://blog.patzaby.com/post/2010/11/22/Youll-Be-Worth-More.aspx

The Responsible Choice Will Never Pull Us Down

2010-11-09T11:38:00.000-05:00

The link at the bottom of this post is to an article on the front page of the Sunday "Money Wise" section of the Charlotte Observer. The main premise of the article is that for homeowners "underwater" on their mortgages, those who owe more than the house is worth, making the responsible choice to continue to pay their payments on time is more harmful to the economy than walking away from their home.

I disagree!

While it is true that the couple referenced in the article will be "left out" of the current refinance market, their current interest rate is likely well below rates at other times during the past 40 years. I talk to responsible people like this everyday. After their initial disappointment of being "left out," they continue about their business and choose to make the best of the situation. Sure, they may be more frugal but when their roof needs repaired or replaced they will call a local roofer. When they feel that their kitchen is outdated and that by remodeling it they will improve their quality of life and pride in their home, they will call a local remodeling company.

Rather than look for a government handout or choose to walk away from their contractual agreement with their bank, responsible citizens may choose an alternative way to capitalize on the interest rate market. Here are two suggestions.

1. Buy an investment property. Non-owner occupied mortgages require more down payment and carry slightly higher interest rates but have long been used as a part of successful wealth building strategies.

2. Buy a new primary residence and convert their existing home into a rental property.

With either option buyers can capitalize on the current interest rate environment and reduced housing prices. Such a strategy can deliver a long term profit as a renter helps pay down the principal loan balance and housing prices will eventually return appreciation.

The responsible choice is often not the easy choice but it is the right choice. And when people make responsible choices they pull us all up.

http://www.charlotteobserver.com/2010/11/06/1816037/underwater-and-pulling-us-down.html

And the value is…?

2010-10-17T23:01:00.000-04:00

The first question I receive from agents and borrowers alike when learning that our company has received the appraisal report is….........wait for it…....… “What’s it worth?”

You may be surprised to learn that there is more to the appraisal report than just the appraiser’s opinion of value. When my processor receives the report she sends it to the customer and me with a note stating that the report will be sent to the underwriter for review. The underwriter has the job of determining the risk of the loan application which includes analyzing the collateral securing the loan. Value is only one component of overall report. One of the largest private mortgage insurance companies in the U.S., PMI Mortgage Insurance Co. lists these other factors to review during the approval process.

Subject Property:
1. Does the appraiser appropriately and completely describe the subject property’s features, amenities, quality of interior and exterior finishes, fixtures and materials?
2. Does the appraiser accurately report the subject property’s neighborhood value trends (increasing, stable or declining)? If the subject property is in a distressed market, the appraiser should use comparables that are not older than 3 months and provide a current listing.
3. Is there support for the subject property’s effective age?
4. Does the appraiser report and analyze the subject property’s current and prior listings and sales activity?
5. Does the appraiser disclose and analyze negative features and/or characteristics of the subject property?

Comparables:
6. Does the appraiser consistently support the adjustments assigned to the comparables?
7. Are the subject and comparables consistent with the neighborhood boundaries as shown on the location map?
8. Are the comparables similar to the subject property in relation to style, sales price and square footage, and explained if not?
9. Does the appraiser use non-MLS or non-verifiable comparables, and if so, do they explain why?
10. Does the appraiser report, analyze and appropriately adjust for seller concessions?

When an appraiser believes that a property's sales price is supported by the value, you are only half way home. The underwriter has to believe it too.

Behind the Math of FHA's Newest Changes

2010-10-01T07:08:00.000-04:00

By now you've probably heard or read that beginning with new case numbers issued on October 4, 2010, FHA is changing how two key charges are calculated. For the most typical FHA transactions the changes are:

1. The Up Front Mortgage Insurance Premium (FHA's revenue generated by loan) is being reduced 1.0% of the base loan amount (formerly 2.25%).
2. The Annual (collected monthly as part of your payment) Mortgage Insurance is increasing to 0.90% of the base loan amount (formerly 0.55%). The mortgage insurance is the insurance set aside to cover some of the loss in the event of default.

While the net effect to borrowers is a higher monthly payment, I believe the change will result in a positive impact on our business and hopefully our country. This is what I am reading behind the math:

1. By making the change, U.S. Department of HUD Secretary Shaun Donovan is acknowleding that his government agency will operate better with a higher rate of monthly income (the new math) rather than hope to manage it's budget under the old math. The old math required FHA to save some of the up front revenue in reserves. Clearly that strategy wasn't going to last much longer.

2. The resulting higher payment to borrowers will result in a shift towards more Conventional financing. FHA lending has dominated the marketplace for the past 2 years and the change signals a start to return to a more normal lending environment. The key word is "start." Private mortgage insurance companies have already begun enticing borrowers back to Conventional financing with lower PMI rates. It remains to be seen if the big banks will also help by beginning to use some common sense in the lending process. We don't need them to relax underwriting guidelines, we need common sense, rational decision making.

Since I don't hold out a lot of faith that the big banks will adopt common sense thinking, perhaps it is best left in our hands. You can voice your opinion to the banks by taking your business elsewhere. And of course you can voice your opinion on November 2nd during the mid-term elections.

Perhaps FHA's newest changes will lead to more and bigger changes. But that will be up to us.

3 reminders of WHY?

2010-08-18T22:20:00.000-04:00

After 3 grueling days in the trenches of mortgage origination, I am compelled to share 3 reminders of why I love helping people achieve the American dream.

1. About a week ago I submitted a customer's VA loan application to buy a home for which they thought they had little chance of approval. Yesterday we received the underwriter's initial loan approval and she was THRILLED by the news that they are well on their way toward home ownership.

2. About a month ago I began working with someone who said she wanted me to be "brutally honest" about her and her husband's chances to buy a home. I was not able to prequalify them initially but reviewed some strategies to improve their situation. She put some of the advice into action and yesterday I delivered her a prequalification letter. I thought I heard tears through the phone. I'm expecting them to make an offer on a house today.

3. This morning connected on Facebook with a past first-time homebuyer client who closed on their house in March. I was able to see pictures of the work they've already completed and read their expressions of excitement and joy to be home owners!

Thank you for allowing me to be a part of your American Dream!

Are you a buyer on the fence?

2010-08-12T22:02:00.000-04:00

I just crunched some numbers for a customer who has been in the market to buy a home for a few months. Her current favorite house is priced about $220k and she would be applying for an FHA loan with 3.5% down payment. At the current rate (which is hitting lows not seen since the 1960's) her total monthly payment would be about $1400 (principal, interest, taxes, insurance, and pmi). So the question is, "For what is she waiting?"

I believe there are 3 market influences that should help her jump off the fence and land in her new backyard.

1. FHA is going to change both the "up front mortgage insurance premium" and the "annual mortgage insurance" sometime in next couple months. The upfront premium calculation is to be lowered but the annual mortgage insurance is increasing by about 60% for most borrowers. The net effect will increase my customer's payment about $50 per month; even if the interest rate stays the same.

2. Perhaps she is waiting for home prices to fall further. Well let's do some math! If her current favorite house price drops 5% to $209,000 but interest rate jumps 1%, her payment will actually increase by about $69 per month, or almost $25k over the life of her loan. In a nutshell she pays $25k more for a less expensive home.

3. What if the rates go up and the price stays the same? An increase in the rate by 1% increases her payment about $130, or a little more than $47k over the life of the loan.

I'm by no means predicting rates will rise soon (see previous post in May about not predicting rates); but come on! The time is NOW. Make an offer and call me to lock the rate.

A credit repair story

2010-08-08T22:01:00.000-04:00

For about 18 years or so I've been looking at other people's credit reports for one reason or another. And probably more than a couple hundred times I've remarked to people about the injustice of the medical collection business. Well it has finally struck home.

My wife had all three of her reports run and learned that the Equifax report contained a $20 medical collection from our pediatrician in Florida. The doctor's office was always very nice and either collected our co-pay upfront or sent us a bill if they failed to charge us at the time of service. We always paid immediately when asked. The $20 collection pulled down her Equifax score about 100 points.

Since my oldest son has some mild asthma issues we had been to see this doctor many times. We even discussed our move to North Carolina and he provided some advice on choosing a new doctor. I figured that we probably owed the $20 but there was never any attempt by the doctor or the collection agency to collect the money. They would rather charge it off and damage an otherwise perfect credit history. I was not pleased and immediately logged onto the Equifax website to dispute the collection. After all these years of talking about medical collections and credit, I was about to embark on my own dispute story.

Logging on and submitting the claim was a piece of cake. The automated email response read that our dispute had been received and we would be notified of the status within 30 days. It seemed much too easy.

But about a day or so later, I received a phone call at work from my wife. I had used her email address when submitting the claim. She doesn't check her email every day so we were lucky that she happened to receive it in time. It read that we had 24 hours from the time the email was sent to fax her social security card, driver's license and a utility bill statement with a matching address to Equifax to verify the legitimacy of the dispute. Fortunately we had time to copy the three documents and fax them first thing in the morning; an hour before the deadline. Again, an automated email response indicated receipt of our fax and instructed us to wait for approximately 30 days.

So every day she checked, and checked, and checked her email for another surprise. Then one day the email came that the dispute was resolved and the collection would be removed. That was about two months ago. Just yesterday I logged onto www.annualcreditreport.com to find out if it was removed or not. Low and behold it was gone. We saved the email and the "collection free" report, just in case.

I guess the moral of the story is that medical collections are still a racket but they CAN be removed. Be patient, follow the dispute instructions to the letter, check your email every day and go to the http://www.annualcreditreport.com/ to receive the only true free copy of each of your reports once per year.

Good luck!

A closing table story

2010-07-29T22:19:00.000-04:00

At a purchase closing transaction this morning I was a part of an interesting conversation. The attorney, the buyers, the real estate agent, the second mortgage lender, and I (1st mortgage lender) all shared experiences of different parts of the country where we've lived, worked, or visited. Cities and states such as Chicago, Indiana, Ohio, Philly, Dallas, Florida, Missouri, Buffalo, and Mississippi were all mentioned. Of course, every location has it's pros and cons and we are no different. But the overwhelming consensus of our discussion reminded me of how fortunate we are to live in the Carolina's.

We have a moderate climate with four seasons, close to mountains, beaches, city life, an active cultural scene, and a beautiful countryside. CNBC recently ranked the state #4 in it's overall business rankings.
I am consistently amazed by the number of people moving to the area; each with a laundry list of reasons for their move: lower property taxes, more job opportunity, climate, landscape, etc.

Sometimes a little perspective from a relocating buyer is all it takes to remind us.

Have a great weekend.

Golf.....Real Estate....Life

2010-07-10T19:11:00.002-04:00

This article pertains to all three.

http://www.apexperform.com/uploads/Carolina%20Golf%20Journal%20Summer%2010.pdf

What are you saying to yourself?

10 Tips to Avoid Foreclosure

2010-06-28T07:02:00.004-04:00

I just learned of a web site with a lot of good information for all. Here is a post about foreclosure prevnention and a link to the site below. I hope you find it useful.

We have all read the facts related to foreclosures and how they are rapidly increasing. In 2009, 2,824,674 properties nationwide were in default and that number appears to be increasing. This is alarming and can be devastating for families that find themselves in this situation. Avoiding foreclosure is not easy and there is nothing that will make it feel any better to those that are going through it. It’s a difficult and challenging time of life that can only be described as something that you have to force yourself to get through. Knowing that there are millions of others going through the same thing is not overly helpful as in the end, you and your family are directly impacted and need help. We put together this list of 10 tips to avoid foreclosure in an effort to try and offer some advice that you may not have thought of if you find your home in jeopardy.

1. Don’t just ignore your problems hoping that they will go away. Unfortunately problems with credit (credit cards, loan, etc.) and especially a mortgage don’t go away they simply get worse if you attempt to ignore them. So first you have to be committed to tackling this problem head on.
2. Contact your mortgage company as early as possible when you realize you have a potential problem making your payments. This is the quickest way to get relief even if you have to really work hard to convince them to work with you. You want to ask them about any deferred payment programs or anything else they might have in place that could help you at least temporarily.
3. Refinance your loan if possible. If you have equity in your home, then refinancing your loan over a longer period can dramatically reduce your payments. You may also want to consider a home equity loan or a debt consolidation loan to try to reduce your total monthly payments (credit cards and other loans can be rolled together).
4. Be responsive to your lender by opening and responding to all correspondence and taking their phone calls as difficult as that may be. Don’t be tempted to throw away those letters, screen calls, or delete those phone messages as it won’t make them any more likely to work with you.
5. Leverage other assets as best you can (jewelry, a second car, etc.). As difficult as these can be to part with, what is more important than your home and providing shelter for yourself and your family?
6. Look to friends and family for any monetary assistance they can provide especially if this is a temporary problem. They are the most likely to understand and be willing to help you through this difficult time.
7. Get a roommate if that is an option or see if other friends and family are facing a similar situation and are willing to live together at least for a while to help reduce expenses for all involved.
8. Avoid foreclosure prevention companies. Most of these are simply going to try to get money from you to act on your behalf with your lender(s), which you can already do for yourself.
9. You need to learn your rights under federal and/or State law. Know whether or not your State protects your home in a bankruptcy, etc. Just be clear as to what your options are to get out from under your debts in the event you exhaust all other possibilities.
10. Look into a short sale and see if your lender will work with you to satisfy the home debt that way (of course you still end up looking for a new home). However, it can be a way to avoid bankruptcy and still salvage your credit.

http://www.changeofaddress.org/blog/2010/10-tips-to-avoid-foreclosure/

Get prepared to make written application

2010-05-30T21:31:00.007-04:00

The key documents and information needed for written loan application:

Most recent pay stubs to cover 30 consecutive days.
W2s and 1099s from the past three years.
Tax returns from the past three years.
Bank accounts, CD account, Money Market, Retirement “paper” statements for 2 months (ALL PAGES of each statement are required). Provide evidence of the source of funds for any Non-Payroll deposits or funds transfers.
Name of current landlord and contact information for past two years (if renting).
Employer names and addresses for the past two years

Key questions to answer during the pre-qualification:
Do you have any un-reimbursed business expenses (expenses you write off on your tax returns)?
Do you or your spouse have any side businesses where you show a negative income (loss)?
How are you paid (hourly, weekly, salary, commission, over-time) (1009 or W2)?
All derogatory credit and credit inquiries will need to be explained.
Do you have any child support or alimony obligations?

It's a great time to buy a house! Call me and I will help you get from pre-qualified to the closing table.

Top 10 Things NOT To Do When Buying a Home

2010-05-28T14:16:00.004-04:00

1. Financing any type of out of the ordinary purchase. In fact, once you apply for your loan do NOT let anybody run your credit until AFTER closing. Your mortgage lender will re-pull credit before closing!

2. Changing Jobs. You must be on your current job long enough to show 30 days worth of pay history to get a loan in today's market.

3. Opening or closing old credit accounts. Similar to number 1, don't open new credit. But don't close anything either unless it is at the direction of the underwriter.

4. Moving funds between accounts or major withdrawals or deposits--all asset accounts and funds in those accounts must be verified.

5. Take your time gathering loan documents. Lending has gotten very restrictive so get your ducks in a row and submit all the paperwork your loan officer requests as quickly as possible.

6. Give incorrect information. Make sure the information you provide is accurate, list all your previous residences, jobs, landlords, etc.

7. Depositing gifts without consulting your loan officer. Or worse yet, CASH. Non-payroll deposits must be properly sourced.

8. Waiting until the last minute to convert stocks or mutual funds into liquid funds. Funds for closing will need to be documented in advance of closing.

9. Waiting until the last minute to deposit gift funds. Consult your loan officer, complete the steps he/she asks you to complete and get the funds into your account and ready for closing.

10. Waiting until the last minute to shop for home owner's insurance.

Rates are low, prices are down, call me to get pre-qualified and go buy a house!

Two things I won't predict again

2010-05-28T13:22:00.006-04:00

At sales meeting presentations over the past few months I have predicted two things and been wrong both times.

1. I said rates would go up. Well, they went down. And since I'm resolving not to predict them again I will just say that I hope they stay down.

2. I said that we may be at the end of the underwriting tightening. I thought this was a pretty safe bet since I couldn't imagine lending restrictions could get tighter. Well, I was wrong again. Underwriting has continued to get tougher.

But no worries here! My team and I successfully reached the closing table 9 times this month (all purchases). Bring on to June! Where we will be back to double digit purchase transactions!

Happy Memorial Day Weekend.

Condo Financing

2010-05-20T10:20:00.005-04:00

As many of you know, financing for a condo purchase can be challenging in the aftermath of the financial crisis. Lenders have always reviewed the condo association status before providing loan approval but the burden of project approval and resulting liability of potential inadequate approvals have shifted to the lender. So the process has become more difficult and time consuming. Here are some issues to be aware of:

1. FHA changed the approval requirements back in February. In the past, lenders checked FHA's web site for approval. If it showed the condo as "approved," we were good to go. If it was not "approved" we submitted a spot approval request and hoped the underwriter would approve it. There are NO more spot approvals.

To make matters more confusing, FHA has gone back and forth regarding the approval status of condo associations on the website. The most current information out of FHA's regional center in Atlanta is that if a condo association was previously approved prior to the February change, then the approval will expire on 12/7/10. Lenders may want to recertify that the investor concentration in the community is still below the maximum percentage before granting approval. Associations that were not approved or have not been recertified will require new certification and approval; a process which will take at least 60 days to complete. If the condo has already gone through the new approval process then a different expiration date will appear. But it is up to the each borrower's lender to again certify that the community meets FHA requirements. And that process can be just as lengthy.

Fun stuff, eh?

2. Conventional loans require the condo project to be approved through a project management review system. The process is not as time consuming but much of the same information will be reviewed for approval.

3. VA loans haven't changed the requirements. Check for approval status using the following link: http://condopudbuilder.vba.va.gov/2.2/frames.html

Either way it is clear that the lender and real estate professional will need to work together in an effort to expedite condo association approvals. Here is a list of some of the items that we will be gathering:

1. Completed FHA Condo Questionnaire.
2. Copy of the recorded Declarations, Covenants, & Restrictions.
3. Copy of the By-Laws.
4. Copy of the Articles of Incorporation.
5. Copy of the master insurance policy.
6. Copy of current and previous year's budget outlining income, expenses, and reserve amounts.
7. Copy of current reserve plan and balance sheet showing reserve balances.
8. Copy of the preliminary title report.
9. Appraisal.
10. Copy of Recorded Plat.
11. Flood Certification and/or copy of FEMA map for location.

Issues to be aware of: investor concentration, percentage of FHA loans in the community, any future additions or special assessments, pending legal actions, single entity ownership, adequate reserves.

Please contact me directly if I can help you with your real estate or mortgage related need. Thank you!

Information to help the "contract to close" phase of home buying

2010-04-29T10:01:00.005-04:00

1. Ask your buyer to get their homeowner's insurance in place and a binder issued as soon as possible after they are under contract. Underwriters are now asking to view the binder before issuing a final "clear to close."

Underwriters want to make sure the coverages are adequate and the actual monthly cost is not higher than the estimate at time of conditional loan approval. A difference in the premium amount can affect the borrower's debt ratio and therefore could affect the loan approval.

2. If your buyer is getting a pest inspection (and I highly recommend that they do), please provide the front and back page of the Wood Destroying Insect Report (aka WDIR) to your loan officer as early as possible in the process. If there are issues that need to be addressed you want to ensure enough time to address them.

Partnering with the right mortgage professional is more important than ever! I have a process in place to stay on top of these details. Call me anytime. Thanks.

HUD Official going over “How to Properly Complete the new GFE”

2010-04-24T07:17:00.002-04:00

Foreclosure / Short Sale and Credit Score

2010-04-23T10:57:00.000-04:00

Here is an excellent article from CNN Money.com that provides some insight of the effect a short sale or foreclosure has on your credit score.

http://money.cnn.com/2010/04/22/real_estate/foreclosure_credit_score/index.htm

If at all possible, a seller should try to avoid a short sale and, of course, a foreclosure. Either will greatly impact your ability to buy a home in the future.