Date: Dec. 26, 2007
Tags: Fha
FHASecure Refinance - you have likely heard of it. Perhaps you have even studied it wondering how it can help you. Obviously, by the name, you can tell it is not designed to help those of you looking to purchase a home or sell a home because it is a refinance. If you are, however, looking to refinance your home and you meet the proposed criteria the FHASecure Refinance may be just what the doctor, or President, ordered.
Contrary to popular belief the FHA ecure Refinance is not the total salvation needed to stem all of the blood flow but it certainly is not hurting. Some lenders are still confused as to the guidelines to be announced by FHA and have already begun advertising these loans but in reality they are not yet available through them. One notable lender continually says, "Yes, we are doing the FHASecure Refinance now." Yet when questioned on the guidelines they do not have any!
It is beyond the scope of this short article to give an expose on the full guidelines but the outline looks generally better than the original proposal. Originally it had been proposed that the borrower would have to be in default but only have entered default after the adjustment period. This is not the case. It was also originally proposed that the existing loan would have to be an FHA insured loan--this also is no longer true and any loan may be refinanced using the FHASecure provided the loan, property and borrower meet all other criteria.
FHA property value limits and qualifications do still apply as well as FHA borrower qualifications. As with any loan the best way to know for sure is to call. In Georgia and Florida the FHASecure Refinance is available from Novation Mortgage at 678-946-0100.
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Date: Dec. 22, 2007
Tags: None
I recently read a blog which seemed to excite real estate agents and cause loan officers, especially those who work for lenders, to say "huh?" The author titled his post "DO NOT ACCEPT PRE APPROVAL LETTERS!!!!" And that's a cut and paste so the emphasis is his.
The premise of the article is that loan officers just plug in a name and date and print off a pre-approval like some mass production facility churning out worthless documents. Now in all consideration of this blogger he is a loan officer at a mortgage broker and may have some first hand knowledge of this practice. On the opposing view I am Director of Operations for a direct lender and have a completely different take. My issue with the blog is it confused real estate agents and they took the low road--the wrong viewpoint.
The writer suggests that agents do not accept a pre-approval letter. What, then, should they ask for? An underwriting approval.
NOT GOING TO HAPPEN. First of all the author works for a broker that has a contract underwriter for a lender in their office who works for just one lender most likely. That underwriter is probably very slow right now and has time to thumb through a file and provide a thumbs up or thumbs down on the borrower. There can never be an approval until there is a full package. Chances of getting a real underwriter to look at a file without full documentation and liking the person who submitted it? Very slim.
Take a brief look at my blog on Active Rain at a post about one hour in the morning of the life of an underwriter and you'll understand why there is almost no chance they are going to stop for even an hour and verify documents, income, assets, job, etc., to give an underwriting approval on a borrower.
Unfortunately this loan officer's post did more damage than good because he gives a false impression to real estate agents that they may request, or even demand, an underwriting approval before they accept an offer. Worse yet he may have lead agents to believe that underwriting is a simple, quick operation. Nothing could be farther from the truth. Yes, an underwriter can review the documents sent in from the borrower but verifications can often take days.
Ultimately the thing an agent needs to do if they want to play hardball on pre-qual letters is to do exactly as most prequalification letters say and call the issuing party with additional questions. Have you reviewed the applicants income and asset documents? Have you verified their employment? Have you received verification from the depository institutions about the documents provided by the borrower? Have you completed the mortgage payment verification for the current months payments?
No agent with a taste of reality is going to do all of that. This means the author of the blog which raised my ire needs to turn his fingers back at himself and make sure he is sending pre-qualification letters as good as mine.
My parting shot is this, if you are a real estate agent and you receive an offer it is not up to you to determine whether or not to accept an offer--it's the seller's prerogative. If you were representing me and an offer came in with a pre-qualification letter and you did not accept the offer and never spoke to me about it you and I would have a bone to pick!
Ken Cook is Director of Operations at Novation Mortgage in Georgia. Novation Mortgage specializes in real estate investment finance, FHA home loans, jumbo mortgages, and small commercial financing to 97%
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Those of you who read my posts on other blogs know I'm always to the point and try to keep it upbeat while spewing facts. It seems it has been a year and 2 months since I last posted an article on RealTown and that's because I've been kind of busy! If you read that post you know I was going on about ridding my industry, the mortgage industry, of uneducated and unwilling to be educated loan officers. I was calling for mandatory licensing of all loan officers including those employed at FDIC and other regulated national and federal banks.
In the same breath I was calling for more educated borrowers. I was concerned that we would, well, be where we are today. Actually and honestly I didn't think it would get this bad. I underestimated the fallout. The trouble is when I estimated problems last year I thought we would be down 20-30% in volume at this point and continue to drop to mid-2009.
Well ...
Dropping continuously in many markets until 2009 doesn't appear to be a problem. The fact that we are down in volume as much as 50% today means we're headed even farther down. This could get tough.
Fear not, I have the answer.
Feds - hands off. States - hands off. Your job is to educate and by that I mean the public. We want licensed and credentialed loan officers. We want borrowers who know how to read a HUD-1 and manage their own credit. Why are we not examining the consumer credit on these people who are defaulting on their home loans?
When I was younger you only found wealthy people living in mansions and driving luxury automobiles, eating at the finest restaurants and going on shopping sprees. Not today! Today you have hundreds of thousands of people who are living so far above their means there is no possible way they can afford a home that they may otherwise have been able to afford.
The industry has learned a lesson that will not stick. The legislation of today will not be the cure of tomorrow. The legislation being tabled today will only cure what happened yesterday. The same type of people who ruined all this for us all today will find new ways to do it again in the future.
Therein lies the problem. It's a vicious cycle and yesterday cannot see tomorrow. Unfortunately neither can today.
Having said all that there is a way we can cure it. We need reasonable and common sense finance solutions. We also need tighter rains on CONSUMER CREDIT. I submit that consumer credit is far more the problem today than mortgage credit. Why aren't we jumping up and down about consumer credit? People with $400 monthly credit card bills could easily afford their house payment if they didn't have the credit card bill!
People - STOP CHARGING, START SAVING and LIVE WITH YOUR MEANS!
Other than that if you are in need of FHA or Fannie Mae financial solutions for your real estate and you live in Georgia or Florida or if you need help with your Commercial Financing Nationwide give us a call at 866-946-0120
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What a wonderful opportunity we have! In the real estate industry we can help families find the right home for their needs, we
can help individuals acquire the best property for their purposes and we can help investors become and stay successful. In
today's economy (bubble schmubble) opportunity abounds for homeowners and investors alike to succeed at a high rate. What
lacks in this industry is not ethics and morals as some members of the press complain. Real estate agents and loan officers
are both plagued by predators inside their own industry but it's the exception not the norm.
What we most lack is educated buyers. Knowledge is power and in this case it's the power to negotiate a deal that can help you
build wealth or put you in the financial tomb.
My primary objective is to provide the best services at the best realistic pricing in the industry. By offering A Paper and
Non-Prime lending solutions I can do as much as anyone else. By displaying high moral character and employing ethical tactics
and people this is easily accomplished. Going beyond the norm and offering free education with no strings attached it is my
goal to be the number one lender in the world by the end of the decade.
My secondary objective is to fight true predation and fraud. Unfortunately this requires as much time and effort to accomplish
as my Primary Objective. But with your help we can all reach both objectives with time to spare by providing honest, fact
based education to our client and prospective client base. The war we wage is, unfortunately, fought on many fronts but
perhaps no more powerful front than the press - or at least the uneducated, inexperienced faction therein - which has more
respect than deserved, less intelligence than required and an agenda which it it's core is pure negativity.
My Mission is to rid my industry of uneducated mortgage "professionals" and to rid the world of uneducated buyers through the
singular method of Factual Education.
I'll post here as often as possible with fresh, unduplicated entries in an effort to pull industry insiders and prospective
clients together with the same knowledge and understanding of the process which ultimately should end with everyone being
satisfied.
If you are from the press don't call me. I've had my words twisted for the last time. If you are an elected official working
on a FLA or APLL in your area you need more information than you have - please call me a 678-946-0101.
Sincerely,
Ken Cook
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