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

Saturday, September 6, 2014

Ask the "Mortgage Man": COULD THIS BE THE TURNING POINT IN CREDIT SCORING...

Ask the "Mortgage Man": COULD THIS BE THE TURNING POINT IN CREDIT SCORING...: FICO scores will be rescored as of the fall of 2014.  For a long time, unpaid collection accounts have been the thorn in the sides of many b...

COULD THIS BE THE TURNING POINT IN CREDIT SCORING?

FICO scores will be rescored as of the fall of 2014.  For a long time, unpaid collection accounts have been the thorn in the sides of many borrowers looking to purchase their first home.  They have unknown unpaid bills appearing on their credit report causing their scores to plummet.  Many of these are final utility bills that have never been forwarded to the borrower's new address, and more are from hospital bills that were never paid by their medical insurance carriers. Some collection accounts are called charge-offs, because they may have had a car loan or a revolving charge card that went unpaid for a long period of time. After this period of non payment, the creditor places the account in an inactive status, and they write the debt off their books as being "unable to be collected".
As of this fall, the scoring agencies are revamping their scoring models, and changing the way that borrowers will be assessed.

Medical collection accounts will  not count against a person's credit score.  For years, whenever mortgage underwriters saw medical collection accounts on a person's credit report, they overlooked them in determining a borrower's willingness to pay bills.  When underwriters had the ability to overlook these, regardless of their impact on a borrower's credit scores, loans continued to get approved, and subsequently many buyers purchased homes.  Since the real estate market contraction in 2008, many lenders haven't had the ability to approve these types of buyers. This is due to the fact that these same underwriters who were approving borrowers manually, who had decent credit but outstanding medical bills, were unable to approve them with a lower credit score.  As soon as a medical collection appeared on a report, the credit score would drop anywhere between 50-125 points, depending on the number of bills and good credit references appearing on a person's overall credit report.  For instance, if a buyer has 12 references, all good, with low balances on their credit cards, but one medical collection account suddenly appears on their report, I've seen scores drop from 725 to 650 and lower. Needless to say, this inability to overlook these accounts took many potential buyers out of the market. From this point forward, any medical bills appearing on the credit reports will not affect a borrower's credit score at all.

Up until now, paying off other types of collection accounts have had no impact on a person's credit score.  I have been heavily involved in helping people rehab their credit in the hopes of turning them into future home buyers.  I've seen people improve their scores very rapidly, with the help of paying down debt, disputing late payments, etc. The frustrating part has always been that paying off collection accounts, and charge-offs haven't had a positive affect on their credit scores.  Even though the potential buyers were doing the right thing, doing so didn't benefit them in any way.  With the latest changes to the credit scoring algorithms, paying off collection accounts and charge-offs will boost their scores by as much as 50 points.  This affirms to a borrower that by doing the right thing they will benefit, and eventually realize the dream of becoming  homeowners.

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

Monday, May 19, 2014

My most challenging scenario has been matched. I was recently asked if I can finance a Mobile Home that sits on piers.  First of all, most conventional lenders won't finance mobile homes, whether they are on a permanent foundation, or they are situated in a mobile home park.  Given that this home is also resting on piers with the original axles and wheels underneath, makes this a nightmare to finance.  When the question was posed, I told the agent that only a very small local lender would consider financing such a property.  I gave a few names as suggestions based on the proximity of the subject property in relation to these lenders.  When I saw the agent last week, during my routine weekly visit,  lo and behold he told me that he tried all of my suggested banks, and Mauch Chunk Trust has agreed to finance this property.  If you have a mobile home, or a house that sits on piers located in Carbon, Monroe, or Northern Lehigh Counties, Mauch Chunk Trust will finance it for you.

Any questions, please call me at 484-6985-5972.

Andy Williams
President
Abacus Regional Mortgage
NMLS # 118317