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Via Elvin Lorenzo:
During the Christmas and New Year's Holiday I got a chance to catch up with a lot of my old friends and family and of course we got to talking about the mortgage and lending industry! Yes, believe it or not, this is still a very popular topic these days! : ) We got to talking about horrible loans and the dishonest practice that took place in the past and other not so great experiences that they themselves and their co-workers experienced. I allowed them to vent and express their thoughts and opinions. After a good 30 minutes or so of people just taking turns of bashing the lending industry, the Obama Administration and all this bailout hooplah, I told them these magical words that caught everyone's attention: "In today's lending environment and the many reforms that have taken place in the industry, I couldn't give you a bad loan if I even wanted to!" This statement opened up a great discussion and informing everyone of how mortgages are done today and why people who are thinking of getting a new home or a new mortgage, should not be so scared. Here are a few key reasons why getting a mortgage today is not only safe but to your advantage: You have a choice of vanilla, vanilla and....vanilla! Would you like vanilla sprinkles with that? Mortgage Programs today are pretty straight forward - 30 Year Fixed, 15 Year Fixed and a few other terms in between. There are still a few ARM Programs hanging around but they're definitely not the exotic programs of the previous years and are actually a bit tougher to qualify for in some cases. Interest Rates are still at all time lows! I really didn't want to use this line because it sounds so generic and "salesy" but I'd be lying if it wasn't true! Interest rate are still very low. How long will they last for? If I knew, I sure as heck wouldn't be doing this for a living! But take advantage of them while they're here! The NEW FORMAT of Disclosing to Consumers. Folks, with the new disclosures and rules implemented with them, there are no more surprises at closing (and if there are you will know about it and you will be given time to think about it). Whatever amount of fees are disclosed to you up front (from the very begining), that amount has to stay the same or if it is different you will be given up to 7 days to think about it! Tax Credit for Homebuyers has been extended! As the media has done a very good job informing everyone of this, the tax credit for homebuyers has been extended - just in time for tax season!!! Today's homebuyers will not only enjoy the benefits of buying a home at a very low price, enjoy tax benefits of being a homeowner but also have an additional tax credit of $8,000, too! (ask your tax advisor for further details). Implemented Investor and Lender Overlays = Stable, New Generation of Homeowners and Mortgage Industry! Though this can be extremely annoying to the customer and everyone involved in the transaction, the good news in the midst of all the mayhem and scrutiny is that it does 2 things: (1) minimize risk for the lenders and investors which keeps the flow of lending, credit and cash throughout the whole system and (2) If you're able to get through all the scrutiny of underwriting, approvals, re-approvals and hoops required to jump through to obtain a loan - not only do you deserve to have that loan, YOU DESERVE A MEDAL!!! You're a solid and ideal customer to get a home and chances are, everyone else who got their home about the same time as you are solid and ideal JUST LIKE YOU! This is a start to what we all hope will be a stable, new generation of homeowners in America! Again, for more specific information on your situation, please contact your tax advisor and local real estate and mortgage professional.
During the Christmas and New Year's Holiday I got a chance to catch up with a lot of my old friends and family and of course we got to talking about the mortgage and lending industry! Yes, believe it or not, this is still a very popular topic these days! : )
We got to talking about horrible loans and the dishonest practice that took place in the past and other not so great experiences that they themselves and their co-workers experienced. I allowed them to vent and express their thoughts and opinions. After a good 30 minutes or so of people just taking turns of bashing the lending industry, the Obama Administration and all this bailout hooplah, I told them these magical words that caught everyone's attention:
"In today's lending environment and the many reforms that have taken place in the industry, I couldn't give you a bad loan if I even wanted to!"
This statement opened up a great discussion and informing everyone of how mortgages are done today and why people who are thinking of getting a new home or a new mortgage, should not be so scared.
Here are a few key reasons why getting a mortgage today is not only safe but to your advantage:
Again, for more specific information on your situation, please contact your tax advisor and local real estate and mortgage professional.
"As a result of the tightened credit market, FHA-insured mortgage financing is often the only means of financing available to potential homebuyers," said Donovan. "FHA has an unprecedented opportunity to fulfill its mission by helping many homebuyers find affordable housing while contributing to neighborhood stabilization."
With certain exceptions, FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. This temporary waiver will give FHA borrowers access to a broader array of recently foreclosed properties.
"This change in policy is temporary and will have very strict conditions and guidelines to assure that predatory practices are not allowed," Donovan said.
In today's market, FHA research finds that acquiring, rehabilitating and the reselling these properties to prospective homeowners often takes less than 90 days. Prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition adversely impacts the willingness of sellers to allow contracts from potential FHA buyers because they must consider holding costs and the risk of vandalism associated with allowing a property to sit vacant over a 90-day period of time.
The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. This will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.
"FHA borrowers, because of the restrictions we are now lifting, have often been shut out from buying affordable properties," said FHA Commissioner David H. Stevens. "This action will enable our borrowers, especially first-time buyers, to take advantage of this opportunity."
The waiver will take effect on February 1, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner. To protect FHA borrowers against predatory practices of "flipping" where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver is limited to those sales meeting the following general conditions:
Specific conditions and other details of this new temporary policy are in the text of the waiver, available on HUD's website.
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33 Wentworth Ave E Suite 290, St Paul, MN 55118
Phone: (651) 552-3681
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