Does Fraudulent Activity Still Occur in the Mortgage Business?

A woman thought she had one over on me this week.  She didn't qualify on her own so I suggested she find a suitable cosigner to help her purchase a  home.  She suggested her ex-husband as a viable and willing candidate to go on the mortgage with her.  She had all of his information including his social security number, bank accounts and income figures, so I processed the application and ordered the appraisal for the subject property.  Since neither she nor her ex-husband live locally, I sent all of the papers by way of Federal Express to her home address.  As part of the normal requirements, I requested copies of financial information on both parties as well as drivers licenses for each borrower.  The entire package came back via the mail but her ex's drivers license was missing.  I requested it again and still she didn't send it back.  After much ado, I found that he never agreed to cosign the loan, and she was using his identification to help her get the mortgage. WRONG!  http://www.ssa.gov/employer/ssnv.htmIt is amazing to see just how far people will go to try and fool you.

Andy Williams
President
Abacus Regional Mortgage
484 695 5972
andrew.williams@abacusmort.com
NMLS # 118317

Who is the King of 15 Year Mortgages?

If you have been living under a rock or on a deserted island you may not know about the historic low mortgage interest rates.  Since statistics have been kept in 1933, never before have mortgage rates been this low in our nations history.  The lowest fixed rates of all are the 15 year variety.  They are below 3 and quite possibly dropping further.  A little know fact about 15 year mortgages is that only 1% of the population actually obtains a 15 year mortgage.  Most people want the comfort of the lowest payment available to them, thus they choose the 30 year option.  I am drawn to the fact that the interest rates are as much as .75% lower for a 15 year than a 30 year mortgage.  You would think that the payments would be comparable to each other, but they are not.  The payment is roughly
$ 200 higher for a 15 year mortgage for each $ 100,000 borrowed.  It scares most borrowers to death. But if you compare the current rates of people who have purchased their homes in 2007 and are still making payments based on interest rates in the 6% range, the 15 year payment at today's rates are comparable to what they are currently paying. If you can afford the payment now you should be able to afford the new payment at 15 years in the future.  Most borrowers can shave off 10 years on their mortgage and still be at a comparable payment to what they are currently paying.  Since I show this analysis to most customers, I have seen a dramatic increase in the number of borrowers obtaining 15 year mortgages.  My percentage of customers getting 15 year mortgages is 600% higher than the national average.  Did you know that there is no credit score requirement for a 15 year mortgage other than the minimum 620.  There is no effect on the interest rate charged.  Maybe you should consider a 15 year mortgage.  Come to the King of 15 Year mortgages for your next loan.

Andrew Williams
NMLS # 118317
Abacus Regional Mortgage
484 695 5972

FHA Streamline Refi NO DOC ?

FHA Streamline refinances are available to anyone who has a current FHA mortgage, though not everyone is eligible to partake in them.  First of all,  the interest rates currently offered must be signicantly low enough to save the customer at least 7.5% on their monthly payment.  Second, with the ever increasing Monthly Mortgage Insurance Premiums added to the loan, the monthly savings from the lower interest rates must more than make up for the higher insurance premiums, as well.
Third, borrowers must be current with their present mortgage payments for at least the past 12 months.  In addition, most lenders are requiring a minimum score of at least 660-680.  Some require as much as 720.  If you are one of the fortunate ones who fit all of these criteria, you may still not be eligible based on some other factors.

What if you have recently changed employment? I have had borrowers turned down by many lenders because they have become newly self employed?  They don't have a 2 year track record of earnings for their new business endeavor, thus they don't qualify to get any kind of a mortgage, let alone a streamline refinance through FHA.  What do these people do for a loan? In the past, we had mortgages for the self-employed borrower who couldn't produce the needed income necessary to qualify.  These loans were known as NO DOCS ( No documentation required ).  They came in many forms of loans.  They were called NIV ( No income verification), Stated, No Ratio, SISA ( Stated Income, Stated Assets) and NINA ( No income , No assets ).  All of them were a form of a NO DOC in some way or another.  Many economists felt that these types of loans were the main reason our economy took such a tumble.  These loans allowed un qualified people to buy homes that couldn't afford them.  Many are the foreclosures you see today.  In March of 2009, the governor of Pennsylvania Ed Rendell signed a bill outlawing these types of mortgages in any form.  All loans require some form of verification of assets and employment.   

I do have a lender that doesn't require any documentation regarding employment other than stating it on the mortgage application.  Even if someone is newly self-employed, they can qualify for the FHA streamline refinance as long as all of the above criteria are met.  The income section of the application is left blank.  All current and previous employers must be listed on the application going back two years.  A bank statement showing the money needed for closing is required from the borrower. 

In some cases, we as the lender can pay most of the closing costs for the borrower.  If you are one of the individuals who purchased your home in the height of the market prior to May 29, 2007, you are eligible to receive the discounted monthly mortgage insurance and no up front premium.  In addition, the streamline refinances don't require an appraisal of the property, so even if you have little or no equity in your current property, you will still be eligible for this loan. 

For more information please go to www.abacusmort.com and use the link "Full Application".

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

Have any of you purchased your home between 2005-2008?

Many people have bought during the height of the market.  Did you purchase your home with an FHA mortgage, or with some sort of combination mortgage ( 80/20 )?  Perhaps you found 100% financing at the time of the sale.  Either way, I have a mortgage refinance to lower your monthly payments.  The government allotted many billions of dollars toward the HARP program.  Up until now, you may have been told that your home doesn't have enough equity to qualify, or they can't do anything for you due to the combination mortgage attached to your house. This program allows homeowners who have paid their mortgage faithfully, but who haven't been able to refinance and take advantage of the lower interest rates, to refinance into the current interest rates.  They estimate over 45,000 families in the state of Pennsylvania are eligible for this program.  While rates are low, you should contact me for a free consultation and we'll see if the HARP loan is right for you.

Andy Williams NMLS # 118317
President
Abacus Regional Mortgage NMLS # 113984
484 695 5972

Can this be the turning point in this Real Estate Market?

      There has been a definite up tick in the level of volume not seen for many years.  Starting in mid-October, the level of new phone calls, pre-approvals, mortgage applications, and closings has increased, for me.  All of the real estate offices I visit weekly have seen a dramatic increase in the number of sales and closings within this same time-frame.  Since the vast majority of my business comes from realtor referrals, I have been the recipient of this influx of new business.  From time to time, throughout the past several years, there are short bursts of activity, only to wane and have home buyers go back into hibernation.  But this time, there is a certain sustenance to this market, the likes of which appear to be just like old times. 
      Each of the past six months, I have seen my personal loan volume increase dramatically from last year, but in most cases, I haven't had this kind of volume in many years.  This reminds me of the mid-90's when we were coming off of a bad market, and things were starting to turn around ever so slightly.  Hopefully this is the bottom of the market.  Although foreclosures and short sales continue to dominate the market, it appears that many other homes are selling too, with multiple offers occurring on some properties.  Perhaps we are over the worst of this.  Better days are yet to come!

Andy Williams NMLS # 118317
President
Abacus Regional Mortgage NMLS # 113984
484 695 5972

CAN YOU REFINANCE EVEN IF YOU DON'T HAVE ANY EQUITY?

The answer is YES!  The government just rolled out the new HARP loan.  This program allows people with Good Credit, but no equity in their home, a chance to refinance and take advantage of these low rates! 

Here's how it works: Any homeowner can take advantage of this program if they:

1. Have purchased and settled on a home before June, 2009,
2. Have a Fannie Mae (FNMA) or Freddie Mac (FHLMC) held mortgage,
3. Don't owe more than 105% of the home's value (If home is a Row or a Twin),
4. Don't owe more than 150% of the home's value if the subject property is a (Single),
5. Have not been 30 days late on any mortgage payments,
6. Have a minimum of a 660 credit score.

If you or anyone you know meets all of the above criteria, you or they can take advantage of this program.
The interest rates for this program are slightly higher than normal rates, so you need to make sure that this program will work for you.

If your loan has PMI insurance included in the monthly payment, we need to determine who the PMI insurance company is just to make sure that they are participants in this program.  Participating PMI companies have special rates for these loans where their premiums won't increase over what you are currently paying on your existing mortgage.

Many of the loans acquired during the years of the peak housing prices are combination loans such as: 80/20s, 80/10/10s or 80/15/5s.  As many of you know, this meant that you were given a 1st mortgage, as well as a home equity loan, in order to avoid having to pay PMI insurance.  This refinance WILL NOT include the payoff of any junior liens ( Home Equity loans, Lines of Credit or 2nd Mortgages ).  These secondary lenders will have to agree to Subordinate their liens.  This means that they will have to allow the current 1st mortgage to get paid off with the refinance.  They will have to step back into a 2nd lien position on the property, once again.  Most lenders are willing to do this given the circumstances surrounding the current state of the housing market. 

This loan offers a chance for someone, who were told they can't take advantage of these low rates, to refinance their mortgage and either reduce their monthly payment, or reduce the remaining term of their loan.   You can't borrow any additional money to do any repairs or consolidate bills.  This program is only for those looking to get a better interest rate.  Closing costs can be rolled in to the mortgage to a maximum of 4% of the total loan amount.  This should cover most if not all of the closing costs. 

Please contact me for more details regarding the specifics of this program.

Andy Williams NMLS # 118317
President
Abacus Regional Mortgage NMLS # 113984
484 695 5972

Why don't more people listen to me?

I have told you before that you can't believe what you read, unless it comes from what I write, of course.  The word has been going around that FHA would be lowering the amount the seller can pay toward the buyer's closing costs.  Doing this would have a http://blog.american.com/2012/01/five-reasons-president-obamas-mass-refinance-plan-deserves-to-be-a-non-starter-and-two-modest-alternatives/catastraphic effect on the entire housing market.  With the government doing everything they can do to jump-start the housing market, they realize that a change like this could be detrimental to an improving economy.  They aren't stupid!  Just last year there was talk that the President was proposing changes to the conventional mortgages where they would finance only 70% of a home purchase price.  In other words, they were going to require a 30% down payment.  I read this too, but I have been in the business long enough   (4 decades ), that I knew that this would never come to fruition.  This too has little chance of happening.  Rest easy, better days are here, and they will continue to improve.

Andy Williams NMLS # 118317
President
Abacus Regional Mortgage NMLS # 113984
484 695 5972

Is this the beginning of the end?

Interest rates rose this past week for the first time in months. With no real apparent reason, we received higher rate increases, sometimes multiple times throughout the day. Whatever the reason, I sure hope this trend doesn't continue. Friday they got better, so I hope with this being an election year, they stay low for at least the next 9 months. Already, there has been an increase in activity, with many more sales compared to last year at this time. The amount of housing inventory, even with the short sales and foreclosures, is shrinking. Good bargains
are going quickly, with multiple offers on some houses. Since the housing
market is showing some signs of improving,we need to keep this momentum going!

Andy Williams NMLS # 118317
President
Abacus Regional Mortgage NMLS # 113984
484 695 5972