Credit Reporting Changes May Improve Mortgage Approvals

Dean-Hayes

Content provided by Dean Hayes, Bay Equity Home Loans

There are some changes coming to credit reporting guidelines, and it could help more people qualify for a home mortgage.

Already, qualifying for a home mortgage is getting easier each year. Guidelines are being loosened, debt-to-income ratios raised, co-signed debt is easier to disregard, and reserve requirements lowered. It’s worth noting, however, that guidelines are no where near as Mortgage Credit Availability Index July 2017 loose at they were in 2006, which is a good thing. Yes, it’s harder to get a mortgage today, but it should be.

Click here to view the blog in its entirety.

For all of your real estate needs, contact Jean Groesbeck & Assoc. LLC, Licensed under Coldwell Banker Bain, in Old Town Anacortes: (360) 941-3734 or Jean@JeanGroesbeck.com.

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Reverse Mortgage Checklist and Self-Evaluation

Home Reverse Mortgage money concept as gold house symbol

Photo credit and blog content from Dean Hayes, Bay Equity Home Loans

There are several important questions you need to ask yourself when considering a reverse mortgage.

The answers to these questions will help determine if a reverse mortgage is right for you, and how you should structure it. These questions also help prepare you for the time when you no longer need the reverse mortgage (you and your spouse pass away, you move out of the home, or you sell the home).

Click here to view Dean’s questions and the full article.

Should I talk to a lender Before Making an Offer?

The first step for many people looking to buy a home is searching what the current real estate market has to offer.

It is not the first step that new home buyers should take, especially first time buyers.  Getting pre-qualified and even pre-approved on a home loan is the best way to get started.

With the excitement of looking to buy the perfect home, forgetting to talk to a lender about a home loan is a common mistake for new buyers. The advantage of completing both of these steps, pre-qualification and pre-approval, before you start to look for a home is that you’ll know in advance how much you can afford. Getting pre-approved for a mortgage also enables you to move quickly once you find the perfect home.

Getting pre-qualified is the initial step in the mortgage process, and most of the time it is fairly simple. You supply a bank or lender with your overall financial picture, including your debt, income and assets. After evaluating this information, your lender can give you an idea of the mortgage amount for which you qualify. Having a pre-approved home loan provides the new buyer with the specific mortgage amount for which they are approved and how much payments would be on a certain loan amount. Also, a pre-approval will give real estate agents and home sellers the proof that a buyer has the ability to secure a mortgage.

The process of getting a pre-approved loan takes time and as a buyer it is the best place to start when searching for a new home. If you are a new home buyer or a first time buyer and would like more information on the home buying process, please click here.

Feel free to Contact Us to answer any questions you may have regarding getting pre-approved for a home loan! We are here to help!  Call Jean Groesbeck at 360-941-3437 or email Jean@JeanGroesbeck.com

809 7th Street Anacortes, WA 360-941-3734

FHA ISSUES ANNUAL FINANCIAL STATUS REPORT TO CONGRESS

The following is from HUD.gov.

WASHINGTON – The U.S. Department of Housing and Urban Development (HUD) today released its annual report to Congress on the financial condition of the Federal Housing Administration (FHA) Mutual Mortgage Insurance (MMI) Fund. In reporting on findings of the independent actuarial study, HUD indicates that while FHA continues to be impacted by losses from mortgages originated prior to 2009, this report does not directly affect the adequacy of capital balances in the MMI Fund.

The independent study found that as the housing market continues to recover, the capital reserve ratio of the MMI Fund used to support FHA’s single family mortgage and reverse mortgage insurance programs fell below zero to -1.44 percent. This represents a negative economic value of $16.3 billion. This does not mean FHA has insufficient cash to pay insurance claims, a current operating deficit, or will need to immediately draw funds from the Treasury. The need to draw on Treasury funds is determined not by the economic assumptions of this actuarial review but those used in the President’s FY 2014 budget proposal to be released in February, with a final determination on a potential draw made in September. Also, the actuary’s estimate of the Fund’s economic value excludes $11 billion in expected capital accumulation through the end of FY 2013. Finally, HUD’s report includes additional actions designed to contribute billions of dollars in added value to the MMI Fund over the next several years.

“FHA has weathered the storm of the recent economic and housing crisis by taking the most aggressive and sweeping actions in its history to reform risk management, credit policy, lender enforcement, and consumer protections,” said HUD Secretary Shaun Donovan. “During this critical period in our nation’s economic history, FHA has provided access to homeownership for millions of American families while helping bring the housing market back from the brink of collapse to a point where the outlook is positive and recovery is underway.”

FHA Acting Commissioner Carol Galante added, “While the loans made during this Administration remain the strongest in the agency’s history, we take the findings of the independent actuary very seriously. We will continue to take aggressive steps to protect FHA’s financial health while ensuring that FHA continues to perform its historic role of providing access to homeownership for underserved communities and supporting the housing market during tough economic times.”

Three factors are driving the change in FHA’s position compared to last year:

First, the house-price appreciation forecasts used for this actuarial review are significantly lower than those used in last year’s report, as the actual turnaround in the housing market occurred later than was projected last year. These house-price appreciation estimates do not include improvements to home prices that occurred since June and were depressed by a high level of refinance activity.

Second, the continued decline in interest rates, while good for the overall economy, costs the FHA revenue as its borrowers pay off their mortgages to refinance into lower rates. Again, this is clearly a positive, but it impacts the actuary’s estimate of the value of the Fund. In addition, the actuary predicts that borrowers with higher interest rates who are unable to refinance will default at higher than normal rates, increasing losses from foreclosures for FHA.

Third, based on recommendations made by the Government Accountability Office (GAO), HUD’s Inspector General and others, FHA directed the actuary to employ a refined methodology this year to more precisely predict the way losses from defaulted loans and reverse mortgages are reflected in the economic value of the MMI Fund.

HUD is announcing a series of changes that are designed to build on previous steps that have improved the health of the Fund. Coupled with the actuary’s expectation of $11 billion in additional capital from new business in fiscal 2013, these changes are intended to return FHA’s capital reserves to a positive position within the year and also reduce the likelihood that FHA would need to exercise its authority, which all federal loan and loan guarantee programs have, to draw funds from the Treasury in September to cover estimated losses. To do this, FHA will:
•Continue to sell expanded pools of defaulted mortgages headed for foreclosure through the Distressed Asset Stabilization Program (DASP), offering investors and borrowers the opportunity to avoid costly foreclosures – and even giving homeowners an additional chance at staying in their homes – while reducing costs to the Fund. The FHA is committing to sell at least 10,000 distressed loans per quarter over the next year;
•Revise its loss mitigation program to target deeper levels of payment relief for struggling borrowers, allowing more families to retain their homes and avoid foreclosure, reducing associated losses to FHA;
•Expand the use of short-sales, which will provide opportunities for distressed borrowers who have been unable to get out from under hundreds of thousands of dollars of mortgage debt to move to a new job or start anew while improving recoveries for FHA. Foreclosures are expensive, for families and the Fund. By reducing the likelihood that a family will be foreclosed upon, we reduce costs for the Fund;

•Continue to streamline policies to increase efficiency and decrease losses associated with the sale of foreclosed properties;

•Reverse a policy made in a prior Administration to cancel required premium payments after a certain periodthat effectively meant that while FHA’s 100% insurance guarantee remained in effect for the 30-year life of a loan, borrowers were only required to pay premiums for less than ten years. FHA has been left without premiums to cover losses on loans held beyond the period for which it collects premiums. This change will apply to new loans.
•In 2013, enact an increase of 10 basis points or 0.1 percent to the annual insurance premium paid by borrowers on new FHA loans. This premium increase is expect to add $13 per month for the average borrower and will strengthen FHA’s capital position without limiting access to credit for qualified borrowers.

Losses on loans insured between Fiscal Years 2007 and 2009 continue to place a significant strain on the Fund with $70 billion in FHA claims attributable to loans insured in those years. Though they were prohibited in 2009, the ongoing effect of “seller-funded downpayment assistance loans” is still significant. The net expected cost of those loans, as projected by the independent actuaries, is more than $15 billion. By contrast, the actuary found that the FHA’s books of business since FY2010 are expected to be very beneficial, providing billions of dollars in net revenues to offset losses on earlier books. Under the base-case projection of the independent actuary, FHA’s FY2013 book should add an additional $11 billion in economic value to the Fund.

Since taking office in 2009, the Obama Administration has instituted sweeping reforms to strengthen the MMI Fund. New policies have improved loan quality, strengthened lender enforcement, and improved premium revenues. This has been the most comprehensive update to FHA credit policies, risk management, lender monitoring, and consumer protections in its history, adding more than $20 billion in value to the Fund.

Over the past year, FHA has been:
•Critical to our Housing Recovery, insuring 1.2 million single-family mortgages with a principal balance of $213 billion. This was slightly less than activity in the prior Fiscal Year; purchase loan activity was down seven percent while refinance activity grew by seven percent;
•An Essential Source of Credit for First-Time Homebuyers. Endorsed approximately 734,000 purchase mortgages, with 78 percent to first-time homebuyers;
•Helping Families Refinance and Save. Facilitated over 451,000 refinance transactions, allowing homeowners to take advantage of low interest rates and saving them $220/mo. while reducing risk of the fund;
•Providing Stability to Seniors. Insured 54,000 reverse mortgage transactions for seniors seeking to age in place;
•Essential to Minority Homebuyers. FHA accounted for 50 percent of home purchase mortgages for African American borrowers and 49 percent for Hispanic/Latino borrowers.

To see the original article please visit
http://portal.hud.gov/hudportal/HUD?src=/press/press_releases_media_advisories/2012/HUDNo.12-171

For information on Anacortes real estate or homes for sale anywhere in Skagit County please visit
http://www.anacortesliving.com/
For more information on Anacortes Living visit
http://anacortesliving.com/communities/anacortes

For information on Skagit County, La Conner, Samish Island, Bow and the San Juan Islands, please visit http://anacortesliving.com/communities/

Navigating Short Sales: What to Do When the Sale Price Leaves You Short

If you’re thinking of selling your home, and you expect that the total amount you owe on your mortgage will be greater than the selling price of your home, you may be facing a short sale. A short sale is one where the net proceeds from the sale won’t cover your total mortgage obligation and closing costs, and you don’t have other sources of money to cover the deficiency. A short sale is different from a foreclosure, which is when your lender takes title of your home through a lengthy legal process and then sells it.
1. Consider loan modification first. If you are thinking of selling your home because of financial difficulties and you anticipate a short sale, first contact your lender to see if it has any programs to help you stay in your home. Your lender may agree to a modification such as:

  • Refinancing your loan at a lower interest rate
  • Providing a different payment plan to help you get caught up
  • Providing a forbearance period if your situation is temporary

When a loan modification still isn’t enough to relieve your financial problems, a short sale could be your best option if

  • Your property is worth less than the total mortgage you owe on it.
  • You have a financial hardship, such as a job loss or major medical bills.
  • You have contacted your lender and it is willing to entertain a short sale.

2. Hire a qualified team. The first step to a short sale is to hire a qualified real estate professional* and a real estate attorney who specialize in short sales. Interview at least three candidates for each and look for prior short-sale experience. Short sales have proliferated only in the last few years, so it may be hard to find practitioners who have closed a lot of short sales. You want to work with those who demonstrate a thorough working knowledge of the short-sale process and who won’t try to take advantage of your situation or pressure you to do something that isn’t in your best interest.

Coldwell Banker Island Living can: 

  • Provide you with a comparative market analysis (CMA) or broker price opinion (BPO).
  • Help you set an appropriate listing price for your home, market the home, and get it sold.
  • Put special language in the MLS that indicates your home is a short sale and that lender approval is needed (all MLSs permit, and some now require, that the short-sale status be disclosed to potential buyers).
  • Ease the process of working with your lender or lenders.
  • Negotiate the contract with the buyers.
  • Help you put together the short-sale package to send to your lender (or lenders, if you have more than one mortgage) for approval. You can’t sell your home without your lender and any other lien holders agreeing to the sale and releasing the lien so that the buyers can get clear title.

3. Begin gathering documentation before any offers come in. Your lender will give you a list of documents it requires to consider a short sale. The short-sale “package” that accompanies any offer typically must include 

  • A hardship letter detailing your financial situation and why you need the short sale
  • A copy of the purchase contract and listing agreement
  • Proof of your income and assets
  • Copies of your federal income tax returns for the past two years 

4. Prepare buyers for a lengthy waiting period. Even if you’re well organized and have all the documents in place, be prepared for a long process. Waiting for your lender’s review of the short-sale package can take several weeks to months. Some experts say: 

  • If you have only one mortgage, the review can take about two months.
  • With a first and second mortgage with the same lender, the review can take about three months.
  • With two or more mortgages with different lenders, it can take four months or longer.  

When the bank does respond, it can approve the short sale, make a counteroffer, or deny the short sale. The last two actions can lengthen the process or put you back at square one. (Your real estate attorney and real estate professional, with your authorization, can work your lender’s loss mitigation department on your behalf to prepare the proper documentation and speed the process along.)

5. Don’t expect a short sale to solve your financial problems. Even if your lender does approve the short sale, it may not be the end of all your financial woes. Here are some things to keep in mind:

  • You may be asked by your lender to sign a promissory note agreeing to pay back the amount of your loan not paid off by the short sale. If your financial hardship is permanent and you can’t pay back the balance, talk with your real estate attorney about your options.
  • Any amount of your mortgage that is forgiven by your lender is typically considered income, and you may have to pay taxes on that amount. Under a temporary measure passed in 2007, the Mortgage Forgiveness Debt Relief Act and Debt Cancellation Act, homeowners can exclude debt forgiveness on their federal tax returns from income for loans discharged in calendar years 2007 through 2012. Be sure to consult your real estate attorney and your accountant to see whether you qualify. 
  • Having a portion of your debt forgiven may have an adverse effect on your credit score. However, a short sale will impact your credit score less than foreclosure and bankruptcy. 

Note: This article provides general information only. Information is not provided as advice for a specific matter. Laws vary from state to state. For advice on a specific matter, consult your attorney or CPA. 

 

U.S. extends Fannie, Freddie conforming loan limits

Higher maximum conforming mortgage loan limits for Fannie Mae and Freddie Mac will be extended through September 2011, the housing finance entities’ regulator said on Friday.

The Federal Housing Finance Agency said the maximum for the conforming loans – generally $417,000 for a single-family home but up to $729,750 in certain high cost areas — will remain unchanged in the first nine months of next year compared with 2010 levels.

The conforming, 30-year fixed loans must meet certain underwriting standards for loan-to-value and borrower credit scores and are put into Fannie’s and Freddie’s pools of guaranteed mortgage-backed securities.

The extension was dictated by a recently enacted Congressional resolution. The limits for high cost areas, generally on the east and west coasts, had been increased in a housing recovery bill passed in July 2008.      WASHINGTON (Reuters)

To search for homes for sale in Anacortes, La Conner, or Oak Harbor, Please call us @ (360)-293-4511.  
We would love to help you with your real estate needs whether you are looking to buy or sell your home.

The Right Time To Buy Real Estate

Is the right time for you to purchase a real estate to investment or new home?
 
There are certainly many reasons to purchase real estate now.  Real estate has always been an excellent long term investment, but the key to making money in real estate, like the stock market, is to buy low (which would be now) and sell high.  However, unlike the stock market, a purchase of real estate is more dependant on interest rates.
 
If you are currently renting or thinking of moving up or downsizing, you have a unique opportunity as interest rates for mortgages are at historical lows.  30-year fixed loans have dropped to a 38-year lowgiving home buyers more advantages to purchase a home now, or to refinance their current home to reduce their mortgage payment.
 
Home buyers certainly have a lot of incentives: low interest rates, plenty of aggressively priced homes for sale, IRS tax advantages, and an  expanded federal tax credit that will expire this spring.  (You must have a signed around contract by April 31, 2010 to take advantage of the home stimulus plan…. and that is only a little over 18 weeks away!)

When it comes to purchasing a place to live keep in mind that you are purchasing a home, a place that should bring you enjoyment.  The home buying process should also be fun, and you should be provided with relevant information to assist you make a wise purchase.  Let one of our experienced real estate agents help you through the process.  Our full time professional real estate agents provide real estate information while also making the process stress free and simple.
 

Steve Copson Joins Coldwell Banker

Coldwell Banker Island Living  is pleased to announce the addition of Steve Copson with Coldwell Banker Mortgage Services.

Steve’s 35 years of experience in the home loan industry have given him the ability to create a seamless loan process for whatever client needs might exist.  He has an in depth knowledge of conventional, FHA, VA, and USDA loans.  He is able to match you with the loan will meet both your needs and your budget.  The use of a “no pressure” approach while consulting with client, has earned him the reputation of being a thoughtful, caring loan officer willing to go the extra mile.

 Steve’s goal is to offer Coldwell Banker Island Living clients an honest, knowledgeable, and stress free experience when either financing or refinancing their home. His main objective is to make his client comfortable with the loan process, as well as, the end result.  He also offers a “close on time” guarantee!

 Steve earned his bachelor’s degree in science and mathematics from California State University, and his MBA in finance from Santa Clara University.  He has continued his education and interest in finances and continues to be on the cutting edge of both new programs and current market trends.

Before you start to look for a home, contact Steve.  He has more loan programs to offer, exceptional rates, and unbeatable service!

 Steve can be contacted for assistance with any questions or concerns about the home loan process at 360-920-6900 or Steven.Copson@Mortagefamily.com.

Coldwell Banker Island Living is located at 3110 Commercial Ave. #101 Anacortes, WA.  Coldwell Banker Island Living is a full service real estate company with exceptional real estate specialists in new construction, pre-owned homes, commercial real estate, property management, waterfront homes, luxury estates, staging, first-time home buyers, seniors downsizing, short sales, fixers, bank owned properties, and relocation.  Coldwell Banker Island Living also provides a vast list of other concierge services.  Please call (360) 293-4511 or visit www.CBIslandLiving.com for all of your real estate needs in Skagit County, Whidbey Island, Guemes Island, and the San Juan Islands.

Make Homeownership Dreams a Reality

 

 

There’s a home loan program many lenders and home buyers are not aware of that allows for zero down home purchases. It’s called the USDA Rural Development loan. Tim Kammer, Loan Originator for Direct Home Loans in Anacortes says it’s based on the appraised value. He says other mortgage programs work on the lower of the either the appraised value or the purchase price, but this loan is a better deal for everyone.

 

“This is a big advantage to the seller because it increase the possibilities of finding a qualified buyer. It’s also an advantage to the buyer because the seller is allowed to help with all closing costs and fees.”

The Guaranteed Rural Housing Loan Program offers 100% financing. In many cases there’s no down payment. There’s no expensive private mortgage insurance (PMI). Closing costs, pre-paid items and repairs may be included. New construction or existing dwelling financing is available and loans are 30-year fixed at today’s rates. Kammer says it’s a really good loan.

 “I don’t want you to get the wrong impression. This is not a sub-prime loan, a place for people with bad credit or people that won’t be able to pay the mortgage on a long term basis. It also can’t be used for second homes or investment properties. It’s a good loan that can help the housing market in Anacortes.”

Kammer says the USDA Rural Development eligible area includes all of Fildalgo Island and most of Skagit, Island and San Juan Island Counties. There are limitations though. Households of up to four people can’t make over $73,600 per year in Skagit County. The Island County maximum is $89,550 and the San Juan County income limit is $76,850. The income limits increase for larger families. Kammer says the loans are based on the mortgage debt to income ration of 29%.

 

“For example, the mortgage debt-to-income ratio of 29% means a family of four making the maximum allowed in Skagit County can purchase a home with payments of about $1800 per month. That’s about a $300,000 loan at today’s rates.”

 

Tim Kammer can be reached at 360-395-8681. Direct Home Loans is in Anacortes, WA located next door to Coldwell Banker Island Living at 3110 Commercial Avenue Suite D-2. You can also apply online at www.YourApplicationOnline.com.

To find the home of your dreams contact your Coldwell Banker Island Living real estate agent at 360-293-4511 or visit www.CBIslandLiving.com

Buying a home with a FHA Loan

 

The first time home buyer tax credit is due to end in just 76 days!  “First-time home buyers” includes anyone who hasn’t owned a home in the past three years.

Only 76 days left to take advantage of the first time home buyers tax credit!

Only 76 days left to take advantage of the first time home buyers tax credit!

Since it takes 45 days to close most loans, and may take longer once we near the deadline and lenders get backlogged, we are seeing first time home buyers scrambling to purchase affordable homes for sale in Anacortes, La Conner, and throughout Skagit County.

Many of these home buyers are taking advantage of FHA loans.  Some of the advantagews of FHA loans include

  • Only 3.5% Down Payment for an FHA Mortgage Loan to purchase a house.
  • Credit Scores are NOT used to determine eligibility. Perfect credit NOT required. 
  • Money for a down payment can be gifted from a friend or relative.

 

FHA loans are loans that are guaranteed by HUD (the Department of Housing and Urban Development.) HUD will guarantee the loan, or ensure that if you default on the loan that HUD will pay part of the loan amount to the lender.
FHA loans are recommended for those borrowers who are first-time buyers, have little money to put down, have a short credit history, or are having trouble qualifying for a Conforming loan.
If you think you don’t qualify to purchase a home, consider investigating a FHA loan.  Our Coldwell Banker Island Living real estate agents can help you find your dream home and help walk you through the home loan and the home buying process.  But hurry, TIME IS RUNING OUT for the first time home buyers tax credit!
To shop on line for homes for sale go to:  WWW.CBISLANDLIVING.COM or call 360 293-4511.  We are open 7 days a week!
Coldwell Banker Island Living  (360) 293-4511  IslandLiving@ColdwellBanker.com
3110 Commercial Ave. #101  Anacortes, WA  98221