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...

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

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

Can I buy a house if I just declared bankruptcy?

I have heard this question over and over again, and until now, I was unable to say yes.  The old tried and true method of approval is: 2 years out of bankruptcy, 3 years from short sales or foreclosures.  With this new program from FHA called "Back to Work", it enables an individual with a bankruptcy/ foreclosure/ short sale, to purchase a home after 1 year.  If they lost their job and earned much lower income while collecting unemployment, or had to take a much lesser paying job, they may be eligible for this program.  The catch is that a borrower must be able to show that they had good credit prior to their loss of job, and good credit reestablished for the past 12 months since this life changing event.  This program has and will open many new doors for home-ownership in 2014 and beyond.

For more information please contact me at 610 837 1600 or 484 695 5972

Andy Williams 118317
President
Abacus Regional Mortgage 113984
www.abacusmort.com

Ask the "Mortgage Man": END TO AN OLD TRICK

Ask the "Mortgage Man": END TO AN OLD TRICK: Have you or anyone you know ever moved into a different home without selling the current residence?   Did you claim to be renting your resid...

END TO AN OLD TRICK

Have you or anyone you know ever moved into a different home without selling the current residence?   Did you claim to be renting your residence or selling it, all to get the best terms for a mortgage on an investment property? For years, many people used this ploy to get better terms for their loans.  This went on for years before lenders became smart.  When I got into the industry in 1986 as an underwriter, I was taught what to look for to determine true occupancy in a property.  With a few general questions you can determine a borrower's intentions with regards to the property.  If their commute distance from their current job to the subject property is 2- 3 hours away from the property, it is obvious that they are looking at the property as either a 2nd home or an investment property.  If they claim that the home will be a 2nd home, but it is located in downtown Allentown, you can conclude that it is to be used for investment.  To be considered as a 2nd home, the property must be located in a resort area or community where it is common for home owners to use them on weekends. If a buyer is moving from a home in which they owe more than the total price of the new home being purchased,  you can assume that the are either going to let their current home go into a short sale or foreclosure.  In 1983 in Houston Texas, the oil industry suffered a bad slump.  Many workers in that area were effected by the slump, and may lost their jobs.  Prices of homes dropped significantly, where many builders went bankrupt.  Buyers were purchasing the exact same home to theirs, in the same development, for 60% less money.  Why pay on a mortgage for a home that is worth 1/3 of what they owe on the home? Many claimed they were renting their current home and purchasing a new home.  When they completed the sale, they walked away from their old mortgage; therefore, the banks lost significant amounts of money. This trick worked well for a time, but the banks eventually put a stop to that.

Since the mortgage crisis of 2008, Fannie and Freddie Mac implemented changes in underwriting
guidelines which help to keep these fraudulent activities from happening.  If a buyer states that they will be vacating their current home and buying a new one, they must qualify with the new home mortgage as well as the old home, too.  If they brandish a lease, underwriters will not count any of the rental income until a borrower can provide proof that the home has been rented for 6 months.  This means that the buyers will have to vacate their home and rent for a minimum of 6 months before they can look to buy unless they qualify with both properties in their name.  Furthermore, if their current home doesn't have at least 30% equity, the borrowers must provide proof that they have 6 months mortgage payments on both properties saved in reserve.  Depending on the cost of the new home, you can be looking at tens of thousands of dollars needing to be shown in savings, 401k plans, IRAs, etc.  What seemed to be a fool-proof plan years ago, is becoming more and more difficult to pull of in today's market.

Andy Williams #118317
President
Abacus Regional Mortgage NMLS #112984
484 695 5972