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/
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
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
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
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
Any questions, please call me at 484-6985-5972.
Andy Williams
President
Abacus Regional Mortgage
NMLS # 118317
Saturday, February 8, 2014
Ask the "Mortgage Man": Effective Financing for Foreclosures with NO PMI i...
Ask the "Mortgage Man": Effective Financing for Foreclosures with NO PMI i...: Do you ever see a property cheap enough to buy, but needs thousands of dollars in minor cosmetic repairs? You don't have much money for...
Effective Financing for Foreclosures with NO PMI insurance!
Do you ever see a property cheap enough to buy, but needs thousands of dollars in minor cosmetic repairs? You don't have much money for a down payment because you want to save some of your money to fix up the home. Usually an FHA loan is the best way to finance a property so that you can keep your down payment to a minimum. FHA requires certain repairs and defects to be completed prior to a new buyer taking ownership of a property. Perhaps it is a bank-owned property who won't allow you to make any repairs or alterations to the property prior to taking ownership. A simple solution would be an FHA 203K loan. This product allows a buyer to finance the required repairs into the mortgage, with all of the work being done after the closing.
Lately, more and more people are upset about FHA's version of PMI insurance. It is called Risk Premium. It is the most expensive monthly PMI insurance on all types of mortgages. The cost is anywhere between 125% to 250% higher than PMI insurance on conventional mortgages. We offer conventional loans with as little as 5% down with NO PMI insurance. Since most conventional mortgage underwriters normally don't call for cosmetic repairs to be completed prior to closing, this is a better alternative with properties that don't need major structural repairs. So if you don't want PMI insurance on your loan, and wish to do as little as 5% down payment, this is a better alternative for many buyers.
Andy Williams
NMLS #118317
President
Abacus Regional Mortgage
NMLS # 113984
(484) 695 -5972
www.abacusmort.com
Lately, more and more people are upset about FHA's version of PMI insurance. It is called Risk Premium. It is the most expensive monthly PMI insurance on all types of mortgages. The cost is anywhere between 125% to 250% higher than PMI insurance on conventional mortgages. We offer conventional loans with as little as 5% down with NO PMI insurance. Since most conventional mortgage underwriters normally don't call for cosmetic repairs to be completed prior to closing, this is a better alternative with properties that don't need major structural repairs. So if you don't want PMI insurance on your loan, and wish to do as little as 5% down payment, this is a better alternative for many buyers.
Andy Williams
NMLS #118317
President
Abacus Regional Mortgage
NMLS # 113984
(484) 695 -5972
www.abacusmort.com
Saturday, February 1, 2014
USDA loans are quicker than normal
As of last week, USDA has not only caught up in their underwriting department, but they are way ahead of their normal time frame. They are taking only 2 business days from the time the final files are submitted to them for a final approval. Most loans are closed within 4 business days of final loan submission. This means that buyers can move in to their home in much less time than usual.
For your next USDA loan, please call me.
Andy Williams
President NMLS 118317
Abacus Regional Mortgage NMLS 113984
484 695 5972
For your next USDA loan, please call me.
Andy Williams
President NMLS 118317
Abacus Regional Mortgage NMLS 113984
484 695 5972
Monday, January 13, 2014
Ask the "Mortgage Man": What is with this QM change to lending?
Ask the "Mortgage Man": What is with this QM change to lending?: I've been in the lending business since 1986 and I've found out that things are always changing in this industry. Although guideline...
What is with this QM change to lending?
I've been in the lending business since 1986 and I've found out that things are always changing in this industry. Although guidelines sometimes change, we adapt and find new ways to help people buy homes. In 1980-1982, the interest rates were a staggering 18%+ yet buyers still purchased homes. In March 2009, the Governor abolished all types of "No income verification" loans to be written in the state of Pennsylvania. The latest change is the new QM changes in effect since January 10, 2014. This QM ( Qualified Mortgage)
change means all lenders must prove that anyone they are lending to must qualify for the mortgage. Certain protocol, verifications, and other steps must be followed in order to comply with this new law. For those of us who've always performed these steps there is not going to be any significant change in our day to day operations. More importantly, the buyers who now are buying will continue to be able to buy. Very few people will be affected by the new guidelines. The hilarious part is that there is a period of adjustment where the government will allow status quo with no changes. The deadline is the year 2021! This means that they can revamp the guidelines again or abolish them anytime within the next 7 years. We've been able to overcome high interest rates, major program changes, a current glut of foreclosures and short sales, and we will continue to prosper in the future.
Andy Williams NMLS 118317
President
Abacus Regional Mortgage
NMLS 113984
484-695-5972
change means all lenders must prove that anyone they are lending to must qualify for the mortgage. Certain protocol, verifications, and other steps must be followed in order to comply with this new law. For those of us who've always performed these steps there is not going to be any significant change in our day to day operations. More importantly, the buyers who now are buying will continue to be able to buy. Very few people will be affected by the new guidelines. The hilarious part is that there is a period of adjustment where the government will allow status quo with no changes. The deadline is the year 2021! This means that they can revamp the guidelines again or abolish them anytime within the next 7 years. We've been able to overcome high interest rates, major program changes, a current glut of foreclosures and short sales, and we will continue to prosper in the future.
Andy Williams NMLS 118317
President
Abacus Regional Mortgage
NMLS 113984
484-695-5972
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