Mortgage Blog

If you currently own your home and think it may be time consider options to look at selling(even if you have NO Equity), we work with professional experienced real esate brokers that will give you the best advise and options.

Do you think you may need to do a Short Sale?
After completing a comparative market analysis of your property, to determine the potential sales price of your property, we may need to look at alternative options on the sale of your home, such as a Short Sale.  A Short Sale may be an option, if the potential net proceeds from the sale of your home (sale price, minus existing mortgages and liens, closing costs and other fees on the sale of your home) does not cover the amount owed, and the lender(s) is(are) willing to accept a payoff that is less than the actual payoff of the mortgage(s).   During the listing and sale  process, the lender(s) will review the short sale package (that we have assisted you to prepare for submission) to prove the hardship in order for the lender to approve the payoff at a lessor amount. 

FHA Signals Efforts to Manage Risk

In an effort to secure its financial health, the Federal Housing Administration plans to require borrowers to have more “skin in the game” soon. Over the past three years, FHA’s market share has boomed from about 2 percent of all new loans to about 30 percent of all new loans this year and 20 percent of refinances. The escalading volume that the administration is currently handling calls for stricter requirements as evidenced by FHA’s capital ratios falling to nearly 0.5 percent well below the minimum of 2 percent.

The agency is still analyzing the levels and time frames it wishes to tighten its standards but they expect to:

1. Increase minimum down payments
2. Increase minimum credit scores
3. Increase insurance premiums
4. Lower the amount of seller concessions

As one of the major players in the mortgage market, the health of FHA is imperative to the housing market and flow of credit to home buyers, as well as to the health of the overall economy. Taking measures to safeguard the agency from needing a government tax payer-funded bailout is a notable risk management measure.

According to a Keller Williams research study, the typical first-time buyer put down 3.5 percent this year. Those who want to take advantage of the tax credit before the April 30 contract, June 30 closing deadline may want to beef up their savings and check their credit report now in anticipation of any changes.

Sources: National Association of Realtors, KW Research First Time Home Buyer Survey

Topics For Buyers & Sellers

First Time & Distressed Property Home Buyers

What are other first time buyers doing?

The tax credit extension and expansion in November has fueled new discussion about home buyers and the housing market in 2010. Here’s a look at first-time buyers in 2009.

1. The median age is 28, significantly down from where it was in 2005 at 32.
2. Location or Neighborhood was the No. 1 “must-have” for 36% of buyers.
3. 2 out of 3 sellers paid at least part of the buyer’s closing costs.
4. 76% used their own savings for the down payment.  
5. 1 in 4 had help from their family for the down payment.

As elevated levels of distressed properties are expected to continue for the next few years, here is a glimpse of buying a distressed property:

1. 27% of foreclosures* were purchased by investors.
2. 47% of  distressed* properties were purchased by first-time buyers.
3. 89% of those first time buyers that purchased a distressed property were motivated by the $8,000 tax credit.
4. 7 in 10 agents have seen an increase in multiple offers. 
5. Approximately 3 out of 5 agents discuss the differences between buying distressed and traditional properties at the buyer consultation.

          * Distressed – Short Sale and REO, Foreclosure – REO Only

NOTE: If you are looking to buy a new home with FHA's 3.5% down payment, and you are limited on funds. FHA may change the minimum down payment required to 5% effective January 1, 2010.  There may also be changes to the maximum amount that the seller can pay for a buyer for closing costs.  Now it is 6%, it may now be limited to 3% effective January 1, 2010. 

This will effect many that have been budgeting for the 3.5% Down on FHA.  Contact me so we can get you pre-approved and shopping for your new home. 

David Rosenstein at 360-480-3516.

If you own a home and are experiencing the pressure of not being able to make your mortgage payments, please be careful that you may think that you are being saved with the "Making Home Affordable" program where you are paying a reduced amount thinking that your mortgage company will modify or adjust your mortgage payment for the long term. 

This last week I meet with a client that was told in writing to pay a reduced payment as the program calls as the trial period.  She did exactly what the details of the program required, made the payments, followed the application process.  All this time she was able to function working hard taking care of life etc.  All of a sudden she got a letter from her mortgage company telling her that she does not qualify due to not making enough money, which was known to the lender at the beginning of the process.   The harsh part is that the letter now states that she needs to bring all the past due amounts that were not made under the reduced payments current otherwise they will start to foreclose on her home.   I read over the initial agreement.  NO where does it say that if she is turned down she will have to bring all the past due or reduced past payments current.  Now she is feeling the pressure of having to list and sell he home or file bankruptcy. 

What most homeowners do now know is to qualify for this program you still have to income qualify.   You will not be approved if you don't debt to income qualify. 

If you have any questions or fall into this situation and your home is in the state of Washington, please contact me at 360-480-3516, or drosenstein@acceptancecapital.com. 

I have about 20 years or mortgage and real estate experience, and work with a great team of realtors and attorney's that can give you the best possible advise.

Below you will find an excerpt about the Making Home Affordable Program.

Making Home Affordable

Update: Foreclosure Alternatives and Home Price Decline Protection Incentives

On Feb.18th the Obama Administration announced the Making Home Affordable (MHA) Program, a comprehensive plan to stabilize the US housing market and offer assistance to up to 7 to 9 million homeowners by reducing mortgage payments to affordable levels and preventing avoidable foreclosures.
As promised, two weeks later on March 4th, the Administration published detailed program guidelines and authorized servicers to begin modifications and refinancing under the plan immediately. On April 28th, the Administration announced additional details related to the Second Lien Program and strengthening Hope for Homeowners. Fourteen servicers, including the five largest, have now signed contracts and begun modifications and refinancings under MHA. Between loans covered by these servicers and loans owned or securitized by Fannie Mae or Freddie Mac, more than 75 percent of all loans in the country are now covered by the MHA program.
Today we are providing a program update, including additional details on Foreclosure Alternatives and Home Price Decline Protection Incentives. Foreclosure Alternatives will help to prevent costly foreclosures by providing incentives for servicers and borrowers to pursue short sales and deeds-in-lieu of foreclosure in cases where a borrower is eligible for a MHA modification but unable to complete the modification process. This program will assist homeowners who cannot afford to stay in their homes by helping them to avoid foreclosure and relocate to a home they can afford. Building on insights developed by the FDIC, Home Price Decline Protection Incentives will provide additional payments based on recent home price declines, and therefore will incentivize additional modifications in areas where home prices have been falling. By increasing MHA modifications and the use of alternatives to foreclosure, we will reduce the negative impact of foreclosure, minimizing damaging costs for financial institutions, borrowers and communities.
Home Price Decline Protection Incentives and Foreclosure Alternatives, together with the other comprehensive elements of the Making Home Affordable program, will help to stabilize property values for homeowners in neighborhoods hardest hit by foreclosures. Based on estimates of the relationship between foreclosures and home prices, the Home Affordable Modification program could help to bolster home values for the average homeowner by as much as $6,000.
Foreclosure Alternatives and Home Price Decline Protection Incentives
1. Foreclosure Alternatives for Borrowers Eligible for MHA
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Short Sales/Deeds-In-Lieu Program to Facilitate Foreclosure Alternatives
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Incentives for servicers to pursue alternatives to foreclosures
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Borrower incentives to cover relocation expenses to homes that are affordable
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Streamlined process combining short sales and deed-in-lieu transactions
2. Home Price Decline Protection Incentives to Protect Against Falling Home Prices
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Incentives to support modifications in markets hardest hit by falling home prices
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Provides incentives for modifications by providing payments based on recent declines in home prices to reduce the risk of loss to lenders from modifications compared to alternatives that could result in the loss of homeownership
1.
Foreclosure Alternatives for Borrowers Eligible for MHA but Unable to Sustain a Modification: For eligible borrowers unable to retain their homes through a Home Affordable Modification, MHA will provide incentives to borrowers, servicers and investors to encourage short sales and deeds-in-lieu. Both allow families and servicers to avoid the costly foreclosure process, and to minimize the negative impact of foreclosures on borrowers, financial institutions and communities.
Short Sales/Deeds-In-Lieu Program to Facilitate Foreclosure Alternatives
When a borrower meets the eligibility requirements for a Home Affordable Modification (HAMP) but does not qualify for a modification or cannot maintain payments during the trial period or modification, the servicer may consider a short sale, and if that is unsuccessful, a deed-in-lieu (DIL).
Both a short sale and a DIL provide an opportunity for borrowers and servicers to avoid the foreclosure process. In a short sale, a servicer allows the borrower to sell the property at its current value, even if the sale nets less than the total amount owed on the mortgage. Approval of a short sale requires the borrower to list and actively market the home at its fair value. The sale must be an arms length market transaction with all proceeds (after selling costs) applied to the discounted mortgage payoff. If the borrower actively markets the property but is unable to sell it within the agreed upon time period, a servicer may consider a DIL. With a DIL, the borrower voluntarily transfers ownership of the property to the servicer – provided the title is free and clear.
Short sales and DILs are complex transactions involving careful coordination and close cooperation among a number of parties -- servicers, appraisers, borrowers, purchasers, real estate brokers, title agencies and often mortgage insurance companies and junior lien holders. A short sale or DIL usually provides a better outcome for borrowers, investors and communities. However, due to the complexity of and time required for completion of these transactions, servicers historically have often opted to pursue foreclosure instead, even where a short sale or DIL would have provided a substantially better outcome for borrowers, investors and communities.
The MHA Foreclosure Alternatives Program simplifies and streamlines the short sale and DIL process by providing a standard process flow, minimum performance timeframes and standard documentation. To compliment a standardized approach, Treasury provides incentives to borrowers, servicers and investors to pursue short sales and DILs.
How The Home Affordable Short Sale/DIL Program Works:
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Borrower Eligibility. Borrowers will be eligible for the Foreclosure Alternative Program if they meet the minimum eligibility criteria for a Home Affordable Modification but did not qualify for a modification or were unable to sustain payments under a trial period plan or a modification. Prior to proceeding to foreclosure, participating servicers must evaluate each eligible borrower to determine if a short sale is appropriate. Considerations in the determination include property condition and value, average marketing time in the community where the property is located, the condition of the title including the presence of junior liens and a determination that the net sales proceeds are expected to exceed the investor's recovery through foreclosure Incentive Payments.
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Servicers may receive incentive compensation of up to $1,000 for successful completion of a short sale or DIL.
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Borrowers may receive incentive compensation of up to $1,500 to assist with relocation expenses.
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Treasury will also share the cost of paying junior lien holders to release their claims, matching $1 for every $2 paid by the investors, up to a total contribution of $1,000 by Treasury.
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Standardized Documentation: The program will publish streamlined and standardized documentation, including a Short Sale Agreement and an Offer Acceptance Letter. These documents will outline specific marketing terms, describe the rights and responsibilities of all parties and establish clear timeframes for performance. Creating one standard set of documents that the industry can use is expected to minimize the complexity of these transactions and significantly increase use of the short sale option.
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Property Valuation: The servicer will independently establish both property value and the minimum acceptable net return in accordance with investor guidance and will provide instruction to the borrower regarding the list price and any permissible price reductions. The price may be determined based on either: (1) an appraisal performed in accordance with USPAP and/or (2) one or more Broker Price Opinions either of which must be dated within 120 days of the Short Sale Agreement.
•
Minimum and Maximum Duration: Under the program, servicers will allow borrowers at least 90 days to market and sell the property, with possibly more time based on local market conditions. The property must be listed with a licensed realtor experienced in selling properties in the neighborhood. Marketing of the property may run concurrently with the foreclosure process, however no foreclosure sale can take place during the marketing period specified in the Short Sale Agreement as long as the borrower is acting in good faith to sell the property. There will be a maximum marketing period of 1 year for the property, provided any longer period not otherwise delay foreclosure sale, to ensure diligence by servicers and borrowers in moving as quickly as possible to complete the short sale and deed-in-lieu process.
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Selling Commissions and Fees: Reasonable and customary real estate commissions and selling costs that may be deducted from the sales price will be specified in the Short Sale Agreement. The Servicer will agree not to negotiate a lower sales commission after an offer has been received.
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Fees and Charges: Servicers may not charge borrowers fees for participation in the Foreclosure Alternative Program.
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Property Eligibility: Any junior liens, mortgages or other debts against the property must be cleared for the property to be sold as a short sale or deeded to the servicer. The servicer can proceed with a short sale or deed-in-lieu if there is a reasonable belief that all liens on the property can be cleared.
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Program Expiration: Eligible borrowers will be accepted until December 31, 2012. Program payments will be made upon successful completion of a short sale or DIL.
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Deed-in-Lieu: At the servicer’s option, the Short Sale Agreement may include a condition that the borrower agrees to deed the property to the servicer in exchange for a release from the debt if the property does not sell within the time specified in the Agreement or any extension thereof. In this case the borrower would have 30 days to vacate the property and would be entitled to $1,500 to assist with relocation expenses, in addition to any other funds the servicer may provide to the borrower.
2.
Home Price Decline Protection Incentives to Protect Against Falling Home Prices: This initiative provides lenders additional incentives for modifications where home price declines have been most severe and lenders fear these declines may persist. These incentives will encourage servicers to undertake more modifications by assuring that incremental investor losses will be partially offset.
To encourage the modification of more mortgages and enable more families to keep their homes, the Administration, building on insights pioneered by Chairman Bair and the FDIC, has developed an innovative payment that provides compensation based on recent home price declines, structured as a simple cash payment on every eligible loan. Home Price Decline Protection (HPDP) incentives are designed to address investor concerns that recent home price declines may persist. Together the incentive payments on all modified homes will help cover the incremental collateral loss on those modifications that do not succeed. HPDP payments will be linked to the rate of recent home price decline in a local housing market, as well as the average cost of a home in that market.
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Increases Number of Loans that Are Modified: Making Home Affordable will make payments totaling up to $10 billion to to encourage lenders, servicers and investors to modify rather than foreclose by addressing concerns that home price declines will persist in the future. This should increase the number of modifications completed under the MHA program in markets hardest hit by falling home prices.
How The Program Works:
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Payments will be based on the total number of modified loans that successfully complete the modification trial period and remain in the modification program.
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Each successful modification will be eligible for a HPDP incentive, up to a cap for HPDP incentives of $10 billion.
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If the trial modification remains successful, 1/24th of the HPDP incentive will accrue to the lender/investor each month for up to 24 months. HPDP incentive payments will be made at the end of the first and second year of the modification.
•
Calculation of HPDP Incentives: HPDP incentive amounts will be calculated based on a formula incorporating:
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Declines in average local market home prices over recent quarters prior to the quarter in which the loan was modified based on housing price indices; and
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The average price of a home in each particular market, since the potential loss due to a given rate of home price decline will be larger in higher cost areas

WHY WE WON’T LET THIS HAPPEN TO YOU

There are 3 major credit reporting agencies in the United States: Equifax, Transunion & Experian. When most lenders run a free preliminary credit report for you, they will run 1 of the 3 agencies listed above. The problem is that not every creditor will report to the same credit agency. For example, your VISA card may report to Experian; your store charge card may report to Equifax; and your Credit Union may report to Transunion. During our meeting, we will want to run a FULL 3 agency credit report. The cost of this report is less than $20.00 and will allow you to know exactly what will be on your credit record. This is the same report that could be used when you purchase your home, so you many not need to pay for it again.

WHO AM I AND WHY SHOULD YOU LISTEN TO ME?

I know you receive tons of mail promising you all sorts of incredible offers. You are probably very skeptical and you should be.

Over the past 16 years, I have originated thousands of mortgage loans and millions of dollars of mortgages. It doesn’t cost you more to work with the best!

Call Now to Schedule 1 Hour Free Consultation

360-480-3516 or www.newloansforhomes.com

Secrets You Need To Know When Shopping

The right knowledge is essential!

Here are some new things to think about:

1. Pre-approved mortgages

Did you know that you could be approved for a mortgage, and not just be pre-qualified for a loan?

Most banks and mortgage companies do not offer you this option. They have you pay the entire application fee up front.

With the pre-approval, your credit and income are checked out ahead of time and your financial information is sent to the underwriter who will be approving your mortgage.

You will then know –

How much you can spend for a home

How much money you will need to close

If you need to consolidate your debts

If your credit is good enough

The best mortgage for you and your family

Should you buy or build a home

How much money you are actually saving by owning instead of renting

What I am talking about here is a real, honest to goodness mortgage approval. Not one of those “approval cards” that when you read the fine print, you find out that you are not really approved. Without pre-approval, you can buy your home, and not worry about financing.

2. Beware of banks and mortgage companies that do not offer you their “best deal” first.

The conversation would go something like this…

You: What are you rates and points?

Bank: They are “such and such.”

You: Great, thanks. I am checking around with some other banks and mortgage companies.

Bank: Well, after you check around, give me a call back because maybe we can meet or beat the deal they give you.

This kind of makes you wonder that if you didn’t mention you were shopping around, that you may have ended up paying a higher rate, or more closing costs.

Wouldn’t it make you suspicious as to why that bank did not give you their best deal first?

3. Consider using a Buyer’s Agent

Most real estate agents represent the seller, they do not represent you as a home buyer.

There is a fairly new type of real estate agent called a “Buyer’s Agent.”

They work for you, not the seller.

You do not pay their commission.

The buyer broker can disclose things to you about the seller (or the home) that they would not be able to if they represented the seller.

If a real estate agent will not offer you a buyer brokerage agreement, ask “Why Not”... or better yet, find another agent!

4. Utilize a Lender With Established Ties to an Agent

Lenders are much more flexible with the real estate agents who have done business with them previously. This relationship then establishes them as a team. The lender and agent work effectively together, referring each other business. That’s why a good agent can make substantial difference in setting up the most economical financing. And the right financing can, literally, save you tens of thousands of dollars over the life of your loan!

5. Don’t Attempt Paperwork Alone

All the paperwork required to complete the purchase of a home can be quite

intimidating and frustrating for a home buyer. Make sure you have your lenders help you with all the paperwork. Get help from your team, your lender and agent. Their expertise will help alleviate the stress and it will prove to be invaluable before you sign your mortgage.

6. Don’t Wait for the Bottom of the Market

The odds of you hitting the bottom of your market are about the odds of you hitting your state lotto! You will almost never hit the bottom of a market. And trying to time it exactly right is often costly. It usually causes a person or family to miss out on the opportunity to purchase a very nice property. You’re better off simply negotiating the best rate and terms you can at the time you find a property. If interest rates go down, you can refinance. This is a much better approach because you won’t miss out on the property you’ve spent so much time locating.

7. Be Honest With your Lender

Your lender wants to help you with your loan. The only time they get paid is when you get approved. The more information (good or bad) you provide your lender, the easier it will be for them to get an approval. It helps them present the loan in the best light. This in turn helps the loan get the highest approval rating.

8. Become Completely Educated

Pick your lender’s brain. Lenders will teach you all about your various options, even if you haven’t found the right property yet. They will be very patient with you while you are looking, especially if you have aligned yourself with the right agent. They understand all the up-front work will pay off in future business. Your agent will then continue to refer people to the courteous and service–minded lender down the line.

The information you now have will help you make the right choice. Take the first step to becoming a homeowner now!!

Please call 360-480-3516 to schedule your free 1 hour consultation.

I look forward to helping you turn your dream of owning a home into a reality.

Sincerely,

David Rosenstein

Mortgage Expert

DRosenstein@acceptancecapital.com

Acceptance Capital Mortgage Corporation

1601 Cooper Point Road NW

Olympia, WA 98502

An Equal Housing Lender.

State License Information WA 510-LO-31970

There are many potential homeowners that do not know that they can still buy a home with zero down.  If you are a Veteran you may be able to qualify for the  VA zero down program.  Otherwise you may want to pesure the USDA Rural Housing loan.  This allows you to purchase a home in areas that qualify for this loan program.  They do have income limitations on how much you can make per household.   The USDA program along with the 3.5% down FHA program has been helping many purchase homes. 

I have posted the link that will take you directly to the USDA eligibility web site to assist you help you in determining if you and or your potential home is eligibible.  

http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do?NavKey=home@1

Please call, or write me to get your loan pre-approved.  We have a team of excellent Reators that we work with that will give you the best personal professonal service.

Attached is a copy of the daily email update about FHA loans.  If you are looking to purchase or refinance now is the time to start the process. 

If you would like to be pre-approved with no obligation, please contact me at drosenstein@acceptancecapital.com, or www.newloansforhomes.com.  My direct number is 360-480-3516.  If you are having problems with your currently loan, call me, I may be able to help.

If you were trying to sell your home, or recently did and your listing expired, I may have alternatives for you.

I do have programs that if you decided not to sell for now that we may be able to refinance your home.  Call me at 360-480-3516 or write me at drosentein@acceptancecapital.com. 

If you still wish to sell your home I can refer you to a great team of agents.  Call for details.