Friday, February 27, 2015

Ask the "Mortgage Man": Does Going With Conventional Financing Avoid Havin...

Ask the "Mortgage Man": Does Going With Conventional Financing Avoid Havin...: If FHA/ USDA/ VA loans require repairs to be completed prior to closing, why not just switch to a Conventional Mortgage? As long as the buye...

Does Going With Conventional Financing Avoid Having To Make Required Repairs?

If FHA/ USDA/ VA loans require repairs to be completed prior to closing, why not just switch to a Conventional Mortgage? As long as the buyers qualify, we won't have to worry about doing any repairs to the home.  Besides, many of these homes are foreclosures, and many banks, Freddie Mac, Fannie Mae, HUD, and others won't allow the properties to be touched prior to closing.  Wrong!

The appraisers have been going through a scrutiny as of late.  The level of responsibility to report accurate and concise information of the homes, has increased exponentially.  Appraisers are being told that they can be held liable for any unreported issues, so appraisers are now required to take pictures of every room in the house, and they must note any unusual abnormalities that can effect the marketability of a home.

They must give the home a Quality rating, too.  They are given a rating of  C-1 to C-5. A rating of C-3 is considered average.  When the Conventional appraiser reviews the home, they are still taking pictures and making notations of things like: Stains in the carpet, water stains in the ceiling, holes in the wall, missing molding, broken windows, water in the basement,etc.  Even though none of these is structural in nature, banks are requiring these items to be fixed because they are concerned about safety and soundness issues with the property.  The average quality rating is expected, and anything below that rating requires repairs to be made before the buyer can take possession of the home.  Once these repairs are completed, the appraiser must go back out to the property and reinspect it for the bank.  The appraiser verifies that the Quality rating is up to average.

There are two ways that this situation can be dealt with.  Either the buyer does the repairs on a home that they don't own, which can be time consuming and unacceptable to a seller, or they can apply for a rehabilitation loan.  A rehab loan is one where a buyer obtains an estimate of repairs from a contractor, our bank holds the amount of money in an escrow account.  Once the required repairs are complete, the bank pays the contractor direct for the repairs, or reimburses the buyer once they have been shown that have been completed.  Most lenders can't do any type of Rehab loans, or they offer the FHA 203K, which is arduous and expensive.  I can do a standard conventional rehab loan, requiring as little as 5% down payment.  Regardless which way you want to go, please know that switching the type of financing to Conventional doesn't promise any different outcome.

Andy Williams
President
Abacus Regional Mortgage
484 695 5972
NMLS # 118317
www.abacusmort.com

Saturday, November 15, 2014

Ask the "Mortgage Man": BUYERS WITH CREDIT SCORES BELOW 620 ARE FINANCABLE...

Ask the "Mortgage Man": BUYERS WITH CREDIT SCORES BELOW 620 ARE FINANCABLE...: Does your lender finance anything  below a 620/640? FHA/VA/ USDA loans are all regulated by the government.  They don't truly have minim...

BUYERS WITH CREDIT SCORES BELOW 620 ARE FINANCABLE

Does your lender finance anything  below a 620/640? FHA/VA/ USDA loans are all regulated by the government.  They don't truly have minimum credit scores, but lenders have what is called overlays.http://www.thetruthaboutmortgage.com/what-is-a-lender-overlay/  These overlays are a set of rules specific to each lender.  Most lenders sell their mortgages in large pools to investors.  These investors set minimum credit score requirements for loans that they will purchase from these lenders.  Since each lender has different investors, there are different minimum score requirements per lender.

I deal with many different lenders, and I have a very reputable one who will go as low as a 550 score on all three types of mortgages: VA,USDA, and FHA.  Other lenders are required to receive approvals from an automated software system specific to the type of loan requested, in order to close and fund these types of mortgages. My lender underwrites the loan manually, which means that  they don't have to receive an automated approval through any of the government software systems. This allows me the ability to finance many more ready, willing, and able buyers.

In order to finance any of these buyers with sub 620 scores, they are required to provide 12 months rent checks evidencing they've paid all of the payments on time.  The lender will not accept rent receipts, money orders, or letters from a landlord/apartment complex.  In addition,  the buyer will have to furnish 12 months checks or a printout from at least one utility company to evidence timely payments.  The most common types are cable, internet, cell phone, electric, heat, and car insurance. Any of these will work, and the lower the score, the more utility references we may require.

If you know of anyone who may fit the description of a buyer who is capable of owning a home please have them call me.  I will give them an answer within 48 hours one way or another.

Andy Williams
President
Abacus Regional Mortgage
NMLS # 118317
(484)-695-5972
www.abacusmort.comhttp://www.abacusmort.com/

Friday, October 3, 2014

3 DAY MANDATORY BUYER REVIEW OF HUD-1

Is this another way of slowing down our turnaround times?  It is bad enough that the government enacted so many lending changes in the past few years, much too late to avoid the kinds of loan fraud which were prevalent in the mid 2000's.  Now they are continuing to find more red tape that slows down the lending process.  They changed the good faith estimate, requiring that the lenders would have to eat any fees being over charged to the buyers at settlement.  This was a novel idea which kept the predatory lenders from using bait and switch tactics to take advantage of consumers.  They required licensing for individual loan officers,  mandatory continuing education, testing, criminal background and credit checks.  All of these have been effective in eliminating the less than desirable loan officers from continuing to originate loans.

Why are they requiring a minimum of a 3 business day review of the HUD-1?  As of August 1, 2015, there is a mandatory 3 business day review  in which a buyer can cancel their contract to buy a home after receiving a copy of the HUD-1. This is an example of an overkill.  Any discrepancies at closing fall within the 10% tolerance, meaning that the lender or loan officer will have to absorb any additional lender  charges incurred by the buyer.  Since the fees cannot be changed from what the borrower was shown at the time of application and/or within 3 business days from the date of application, there is no need to delay the closings an additional 3 business days.  Many lenders take until the day of closing to do the final preparations of closing papers.  They wire the monies needed, and email the papers to the title company within 24 hours of the closing.  With these changes, they will have to have everything to the title company at least 4 business days before the closing so that the title company will have the time they need to complete the final HUD-1 and get it to the borrower.  This is doing nothing to help anyone, because the culprits who changed the fees at closing are long gone, and only the remaining experienced and reputable loan officers remain.  All this does is provide another reason why the government agencies are too late to act, and often overreact to problems. Tack on another 3 days to your real estate contracts!

Andy Williams
President
Abacus Regional Mortgage
484 695 5972

NMLS #118317

Friday, September 19, 2014

SATISFYING JUDGMENTS ON YOUR CREDIT

Have you ever heard of someone paying their judgment and it still is being shown as unpaid?

This is a common occurrence.  Creditors are eager to take your money, but they have no incentive to go to the trouble of removing the judgment, or at least showing it as being paid.  Once you pay them it is too late to negotiate with them.  They can still continue to show the judgment as being unpaid for up to 10 years!  If a potential home buyer is attempting to purchase a home, and a judgment shows as being unpaid, even if the lender is willing to give a mortgage, the title company can't get clean title for the borrower without proof the lien is paid and satisfied in the courthouse.

You owe it to yourself to follow these simple steps if paying off an old judgment:
1. Contact the creditor who filed the judgment against you. ( Don't call the magistrate or courthouse)
2. Get a bank or cashier's check for the entire amount owed, made payable the plaintiff.
3. Set up a time to meet with the creditor at the courthouse in the county in which it was filed.
4. Pay them at the same time they go to the clerk of courts to file the "Satisfaction Piece".
By following these simple steps insures that your lien will show as satisfied anywhere from 30-90 days after it is filed.

Andy Williams
President
Abacus Regional Mortgage
NMLS # 118317
(484) 695-5972