NMLS - Loan Officer Look Up Service

Do you know your Loan Officer? I mean do you really know your Loan Officer?  Has he/ she have any pending litigation?  Have committed fraud or have scammed anyone?  Better or worse, are they licensed?

You may or may not know but the Federal requirement to become licensed under the NMLS (The Nationwide Mortgage Licensing System) expired July 1, 2010.  This means that any "Former" Loan Originator who is not licensed, is unable to discuss any financial matters with a potential client nor take a loan application.  They are prohibited from advertising, sending emails, and any form of communication that conveys that they are a Loan Officer.

This now allows professionals and consumers alike the ability to verify license status and check whether or not the Loan Originator has anything that would prevent the consumer from working with that person. 

As a real estate professional, you want to ensure that, if, you are currently working with a Loan Officer, that they be licensed accordingly and are able to complete your clients' loans. More interestingly, up to 60-70% of Loan Officers filed 3 weeks prior to the deadline.  This means a backlog of license applications that will take some governmental departments up to 2-4 months to review, process and approve or reject license applications.  These figures do not represent the number of applicants that have failed the state and national requirements. 

How do you know if the Loan Officer is licensed?  You can go to The NMLS Consumer Access Website located at http://www.nmlsconsumeraccess.org/Home.aspx/MainSearch and learn more.  Do keep in mind that the site is not fully updated and the frequency it is updated may be determined by the backlog of agencies reporting in a timely manner.

Homebuyer Tax Credit Extended

It's OFFICIAL!!  They finally agreed on something and were able to do something right!

The Senate and Congress has finally sent President Obama a plan to give home buyers an extra three months to qualify for up t0 $8,000 in federal tax credits. Buyers who already have executed contracts prior to April 30th will now have until Sept. 30 to complete their purchases. Under the current terms, buyers had until April 30 to get a signed sales contract and until June 30 to complete the sale.

The House approved the measure on Tuesday. Legislation in the Senate was approved Wednesday night by unanimous consent. Talk about pulling a rabbit out of the hat!

Now breathe and relax and make sure that your loan gets closed by Sept. 30th.  Also check to see if your Loan Officer is licensed and bonded as it will be a requirement as of July 1st.

For more market information go to:  www.tedcanto.com

USDA Has Funds Available For Home Financing 

Effective 06/1/2010

Effective June 1, 2010, USDA Home Loan financing is available to homebuyers.  However there are some major changes to the program.

First: The USDA Funding Fee is no longer 2.00% (two percent)

Second: The "NEW" USDA Funding Fee is 3.50% (three and a half percent)

Third: The GUS System (Guarantee Underwriting System) is currently turned off.  This means that the homebuyer's qualification will be strictly adhered to the USDA Guidelines.

**With GUS; the homebuyer can potentially qualify for a higher sales price

If you have any questions, please call us at 480.344.3671

Academy Mortgage - Mesa, AZ

Ted Canto, Mortgage Consultant

www.academymortgage.com/tedcanto

www.tedcanto.com

www.tendayclose.com

www.arizonamortgageteam.com

USDA Running Out of Funds   As of 06/10/2010 - USDA now has funds available.  For more info go to : USDA Has Funds

It is well known that USDA is running out of money in May 2010.  However, one should consider the consequences to the depletion.  USDA has informed us that they are now leaning on $24 million dollars. When considering how much the program has gained in popularity, this amount will not go very far, if at all last until May. 

There is some cause for concern, however knowledge is king and it is not the problem rather the solution we must focus on. 

FHA is raising the Upfront Mortgage Insurance Premium from 1.75% to 2.25%.  Although this doesn't necessarily affect the qualifcation, it is indicative that the industry is gauging their previous losses with a magnifying glass.  On another change, FHA has announced that come early summer, the maximum seller contribution will become 3% compared to the current 6%. This means buyers will need to not only bring in their 3.5% required down payment but also another 1-3% depending on the loan amount and the hard costs associated with it.  This may very well lock out buyers who cannot come up with 5-6%, especially in these hard times. 

Another thing to consider are the homes under contract that are depending on USDA financing. What happens to those sellers and buyers if they fail to secure the necessary USDA financing?  How many of those borrowers have sufficient funds to initiate a Plan B (Placing 3.5% as a down payment)? 

This information is not to be alarmist rather inform both professional and consumer that they will need to weigh their options and form a Plan B in the event these changes and future changes affect the outcome of finalizing the purchase of a home. 

One tip is to seek a lender that is known for closing quickly and try to lock in either an FHA Case Number before April 5th or underwrite the USDA loan quickly and solidify what is known as USDA's Final Commitment.  A company that can offer a Ten Day Close and that has their own underwriting and funding under one roof. 

Ted Canto

Sr. Mortgage Consultant

Academy Mortgage - Mesa, AZ

www.academymortgage.com/tedcanto

www.tedcanto.com

www.tendayclose.com

www.arizonamortgageteam.com

FHA Changes on April 5th, 2010: 3% Seller Contribution Maximum

And if you think things could get any tougher for an FHA borrower!

In an effort to tighten up its latest embarassment, (FHA's balance sheet and dwindling capital reserves), the Federal Housing Authority is rolling out sweeping financial changes that can affect you or your customers. FHA borrowers will need to look better on paper and be better credit risks moving forward in 2010.

To boot, Mortgage insurance premiums are rising from 1.75% to 2.25%.

Click for major FHA Changes on April 5th.

You may or may not have heard, USDA has announced that they anticipate funding for the guarantee program will be exhausted by the end of April.   This announcement is different from the past announcements regarding exhaustion of funds, in that this time new funding is not certain.  USDA will not be issuing conditional commitments with the conditional statement “subject to appropriation of funds”.  Click here for USDA  Update

USDA Rural Development Home Loan Program - Running out of funds

Appraisals:  FHA vs. Conventional

Once upon a time, there was a difference between an FHA appraisal compared to a Conventional appraisal.  For many years, real estate professionals, investors and motivated buyers avoided an FHA loan out of the fear that the appraisal, known for it's vigorous inspection of the condition of the property, would complicate the transaction and therefore opening preference to a contract offer involving a conventional loan program versus accepting an offer with an FHA loan. 

To say it bluntly:  That was then, this is NOW!  In today's lending industry, there is no difference between a conventional appraisal when compared to an FHA appraisal.  It is an industry wide fallacy that has corrupted the minds of real estate professionals and consumers alike.  

The reasons are simple!  Click here for -> Differences on FHA and Conventional Appraisals

Fannie Mae: You can now choose your own Title Insurance and Escrow Company 

You and Many homebuyers have encountered the typical experience when dealing with an REO deal.   After driving around for days and putting in countless offers, you get one of your offers accepted to only have the listing agent tell you that you have no choice in who you and your client can use in regards to their title insurance and escrow company. 

Once you sign the contract you are told to open escrow by depositing an agreed amount known as an Earnest Money Deposit, as you well know.  This company happens to be on the other side of town or sometimes out of state.  It is rare that someone will get an title insurance and escrow company that is close by.  Call it Murphy's Law! 

Here comes the fun part! Click Here Fannie Mae allow you to choose

Short Sale And Home Loan Modification Assistance: Help is on the way, starting on April 5th

November 30, 2009, the Treasury Department released the guidelines and forms for its Home Affordable Foreclosure Alternatives Program also known as HAFA.  HAFA's intention, based on qualifying factors,  is to make it easier for homeowners, who do not qualify for a Home Loan Modification, to have the alternative of selling their home as a "Short Sale".  This will dramatically speed up the often long and drawn out process of having the lender approve the owner for a short sale.  By streamlining the process, HAFA will help to stabilize inventory levels and also home prices.  How so?  There is an easy answer.  The cost/loss of quickly approving a short sale out weighs the cost and markdown of price of placing a home into a foreclosure.  Consumers, the banks and the real estate market will win.  HAFA works by providing monetary incentives connected with a short sale or a deed-in-lieu of foreclosure (DIL) in order to avoid foreclosure on a loan eligible for modification under the HAMP program. Servicers participating in HAMP are also required to comply with HAFA. In other words, if a client fails to qualify for a home loan modification the bank/ lender will counter the loan modification applicant with an approved Short Sale Agreement with a predetermined price based on the market value.  This allows the client to go to market immediately allowing for a motivated buyer to purchase the property quickly without further eroding home values. 

A list of servicers participating in HAMP is available at MakingHomeAffordable.gov.  HAFA applies to loans not owned or guaranteed by Fannie Mae or Freddie Mac, which will issue their own versions of HAFA in coming weeks.

Learn More about the Home Affordable Foreclosure Alternatives Guidelines

For more real estate information you can trust, please visit www.tedcanto.com

Improving your FICO Scores

For a long time, longer than I care to remember, FICO Scores aka credit scores have been an super secret formula where only the credit reporting bureaus (Experian, Transunion, Equifax) knew how they worked.  This, of course, is because they are the ones who created the system.  For too long, we all wondered how to improve our credit scores while mortgage professionals tripped over themselves trying to provide a homebuyer a logical answer.    However, it still remains a complex formula based on factors that we likely will never know how they actually work. 

Getting and maintaining good credit isn't rocket science, we just need to pay our bills on time, keep our balances low and sparingly take on new debt.

Bankruptcy

FICO's information demonstrates that a bankruptcy tends to do the most damage to a person's scores.  I can damage scores up to 240 points.

Credit Card/ Revolving Debt

Those with good or excellent credit - aka Prime Borrowers - put their scores at risk with a simple mistake. For example, someone with an average score of 680 who might make a payment 30 days late can experience a 60 to 80 point drop in their score.  However, someone with an excellent score of 780 - that same late payment can plummet their score by 90 to 100 points. (Read More)