Wednesday, January 20, 2010

NEW improved FHA Policy Changes:Tougher to get a FHA loan.

Here's the lowdown:

Mortgage Insurance Premium... which you may see as MIP is going from 1.75% to 2.25% ! I am of the understanding that this will go into affect in the spring.

Seller Concessions... FHA has allowed up to 6%... This will be reduced to 3%. This change could happen in the early summer.

Credit scores... Used to be the minimum credit score was 620... the change will be 580. If the score is above 580 the applicant may qualify for the 3.5% down payment. If the applicant's credit score is below 580 they will be required to put at least 10% down. This change may take place in early summer of 2010.

Those of you that have read my blog or know me personally know that I have had my own humble opinion of how mortgages in the past have been handled and even whom I felt should shoulder the blame. In my view the government's "involvement" and regulating, while well intended (remember our parents' generation expression? "The road to Hell is paved with good intentions!" ?) was the biggest contributing factor toward bad loans all across the fruited plain. Banks were encouraged/forced to extend credit to people that had no business buying a home on credit. I see here the advertisements and commercials: "No credit? No problem!" The government promoted home ownership as the "American Dream". And we, as a society, well how could we keep anyone from their dream?

I'm sorry... I'm getting a little off track here. The bottom line here is that the federal government is going to change the way FHA gives out mortgages. I suspect that in the short run it will be somewhat painful. I hope in the long run it will keep us from running into trouble again. But you know what? Our politicians will fix that!

Rock on my friends!

Tuesday, January 19, 2010

I MIGHT be talking to you....

This is a "stab in the dark". I am never real certain as to why people do or do not read a blog. But nevermind. You're reading this one so I'll get right to it.

Today I want to throw an invitation out to someone... maybe you... who knows?

The invitation is this: Call me and talk about a career in real estate.

Here's the deal. I'm not going to tell you it's easy. I'm not even going to call it fun. I'm here to tell you that it's a great profession that like anything else in life has it's pluses and minuses. But I am also here to tell you that you can make a pretty nice living being a Realtor. I'm also here to tell you that it does not happen over night. So if you're the kind of dreamer that wants to get their license and immediately start raking in the dough... well, don't bother calling me.

I'm on a new hunt. I want sincere enthusiasm. I want an agent that is going to be hurt, when they hear about a person who bought a house and had a horrible ordeal with their agent. I want people who don't like it when they hear detrimental things about their profession. I want agents who are going to take the job of representing clients seriously. I want agents who are looking at the big picture. I want people who are willing to work at improving our image. I want people with vocational pride.

And if you're lazy... and prone to taking the easy way out... and persuaded to cut corners... don't bother. And I think people who are like that really know they are like that. So be real honest with yourself. In fact I would ask you, if you are like that, to not only skip contacting me to help you get started, but to stay out of our profession all together. We don't need that.

If you want to make up your mind that you are going to treat it like a business... you are going to dedicate yourself to be the best you can possibly be... you are planning on putting in the time.... you are planning on making every day productive and gratifying, not only for you, but for your clients and everyone around you... then call me. I want to help you. I want to invest in you.

But just remember... this real estate business is not for everyone. And as far as the people who can't or shouldn't be in... it doesn't mean they are bad people... I just happen to know, it takes a few special attributes to do this and do it right.

Want to know more: email me a note: I'll shake it down straight for ya!

Friday, January 15, 2010

New Mortgage Rules... how does that affect YOU?

If you are taking the time to read a real estate blog you are, no doubt, aware there are many changes in the real estate business... more specifically in the financing end of it. One of the most notable is NO MORE PRE-APPROVAL LETTERS. Sort of.

Based on the new federal banking rules mortgage brokers cannot issue a pre-approval letter without also submitting a binding Good Faith Estimate. They may, however issue a pre-qualification without disclosing a new binding Good Faith Estimate to the borrower. No pre-qualification letter can have a property address without issuing a binding Good Faith Estimate. The word I am getting is that every single issue must be addressed before the bank can say. "pre-approved" or "approved".

So what does this mean to us Realtors and our buyers and sellers? Well, it may mean more time. It takes time to get all the information gathered. If you want to shorten the amount of time it will take, the professionals (read: Realtors) must be sure the seller has ALL their documents ready and completely up to date. Contracts must be tight. That means no changes and/or adjustments. If there are changes and/or adjustments they MUST be communicated to the originator and this will often mean a re-opening of the file and re-consideration of the factors previously reviewed.

I suspect that once the loan originators and lending institutions get further along with these changes things will settle down. Right now they are all very "uptight" about how to properly execute the loan documents. They have been spending hours in classes just to get up to speed, and I am hearing that they are being told that these regulations are extremely rigid and that I believe is causing a lot of anxiety!

So the bottom line is this... If you are a seller... have all your documents and pertinent information regarding your real estate in order and close at hand. If you are entertaining an offer be certain that the proper steps have been taken by your buyer and their lending company. If you are a buyer... ask your loan originator if they are completely familiar with the 2010 GFE/HUD Settlement Statement and the new RESPA regulations. And as always do NOT hold back any information or documents from your loan expert. That will only slow down the inevitable.

When this sort of change occurs in any industry, it is even more important to utilize the services of a professional that you know and can trust. If you don't know someone, I bet you know someone who does... call them!

Good luck! And don't forget... if you are going to take advantage of the new home buyer tax credit, you need to be under contract by April 30th!