More Bank Changes

Fannie Mae, over the weekend, sent out changes that apply to conventional loan case files submitted, and all existing DU Version 7.0 case files resubmitted, on or after August 16, 2008. Titled “Support for jumbo-conforming mortgage loans”, they set forth automation of the eligibility guidelines previously announced, which include minimum credit score requirements, maximum total expense ratio, max LTV/CLTV/HCLTV, reserve requirements, mortgage delinquencies, eligible property types, eligible amortization types and terms, and eligible mortgage products.

 

CitiMortgage, who sent out a 7 page list of changes, “will now accept loans for the Conventional Economic Stimulus Act of 2008 that have been underwritten and approved via DU. Fannie Mae has updated DU with the necessary Conventional Economic Stimulus criteria. When an Approve/Eligible finding is received from DU all DU recommendations may be followed for Income, Assets, and Ratios. (In the cases of a “Refer” decision, the loan will revert to a manual underwrite and all applicable requirements will apply.)” CitiMortgage will purchase VA loans per VA guidelines, up to a cap of $1 Million, inclusive of the VA funding fee.

 

Chase, also in a lengthy statement,announced changes to their Non-Agency Fixed and ARM products (Amortizing and Interest Only). These include reducing the maximum LTV/CLTV to 85%/85% on Non-Agency products and programs, including their Premier Program, reducing the maximum cash back on LTVs 80% from $500,000 to $250,000. For Chase’s Agency Interest Only Fixed and ARM products, they will be requiring a DU approval on 1 unit/Condo/PUD transactions, revising the maximum LTV/CLTV on Co-ops, and adding minimum credit score criteria on Co-ops. Chase also clarified the down payment assistance programs that they ceased accepting.

U.S. Bank Home Mortgage Correspondentgroup stated that “Due to the imminent termination by HUD of the Seller Funded Down payment Assistance Programs, they have determined that loans utilizing Down payment Assistance Programs will no longer be eligible for purchase by USBHM.”

 

Franklin American Mortgage, “Due to current changes in the marketplace is implementing changes to the My Community 97 and Home Possible 97 products and providing additional policy clarification for FHA Down Payment Assistance loans.  The product changes are effective for all loans locked on or after August 19, 2008.”

 

Is your entire 401k in Fannie & Freddie? I hope not. Shares of Fannie Mae and Freddie Mac plunged yesterday to their lowest points in twenty years. Fannie fell 22% and Freddie lost 25% after a Barron’s report, which I mentioned yesterday, suggested that a government takeover of the troubled companies is inevitable. Both of them are down 80% in the last 8 months!

If your on the fence about a refinance or a purchase of a new home, Do your self a favor and get informed.

Thanks Rob Chrisman for the updates, your a genius.

 

 

Check your credit 2X a year

I recommend checking your credit at least twice a year so you know who is reporting what.  I had a client in yesterday that knew her credit changed due to a medical collection; but didn’t know by how much.  Well that wasn’t the only thing that changed, she had a car loan that she traded in and the dealer didn’t pay off the loan in a timely manner.  It marked as a 30 day late.  With those two incidences her score went down over 80 points.  We quickly called the car loan company and explained the situation and the late was removed.  We went one step further that is a must…. Get a letter stating what the company is doing, in this case removing the 30 day late.  We then negotiated the medical collection to 50 cents on the dollar.  Her score went up 60 points overnight.  That could have taken 6 months and she could have spent thousands of dollar but this is a free service we offer.  To get your free credit report log on to www.BuyorRefi.biz  We’ll give you a free report and go over the myths and facts of credit reporting.  Or call us directly at 1-800-517-2311 Ext 2 for your confidential report.

Tax Credit for 1st time Buyers

First-Time Home Buyer Tax Credit Fact Sheet

 Who is Eligible

• The $7,500 tax credit is available for first-time home buyers only.
• The law defines a first-time home buyer as a buyer who has not owned a home during the past three years.
• All U.S. citizens who file taxes are eligible to participate in the program.

Income Limits

• Home buyers who file as single or head-of-household taxpayers can claim the full $7,500 credit if their modified adjusted gross income (MAGI) is less than $75,000.
• For married couples filing a joint return, the income limit doubles to $150,000.
• Single or head-of-household taxpayers who earn between $75,000 and $95,000 are eligible to receive a partial first-time home buyer tax credit.
• Married couples who earn between $150,000 and $170,000 are eligible to receive a partial first-time home buyer tax credit.
• The credit is not available for single taxpayers whose MAGI is greater than $95,000 and married couples with an MAGI that exceeds $170,000.

 Effective Dates for the Tax Credit

• First-time home buyers would receive a $7,500 tax credit for the purchase of any home on or after April 9, 2008 and before July 1, 2009. To qualify, you must actually close on the sale of the home during this period.

 Tax Credit is Refundable

• A refundable credit means that if you pay less than $7,500 in federal income taxes, then the government will write you a check for the difference.
• For example, if you owe $5,000 in federal income taxes, you would pay nothing to the IRS and receive a $2,500 payment from the government.
• If you are due to receive a $1,000 tax refund from the government, your refund would grow to $8,500 ($1,000 plus $7,500 from the home buyer tax credit).
• Buyers can take the tax credit in their 2008 or 2009 tax return.
• If you purchased the home in 2008, the tax credit is taken on your 2008 tax return. If you buy in 2009, you have the option of taking the credit on your 2008 or 2009 tax returns.

 

 Types of Homes that Qualify for the Tax Credit

• All homes, whether single-family, townhomes or condominium apartments will qualify, provided that the home will be used as a principal residence and the buyer has not owned a home in the prior three years. This also includes newly-constructed homes.

 Payback Provisions

• The tax credit essentially serves as an interest-free loan to be repaid over 15 years.
• For example, a home buyer claiming a $7,500 credit would repay the credit at $500 per year. However, the buyer doesn’t have to start repaying the credit until two years after the tax year in which the credit is claimed.
• If the home owner sold the home, then the remaining credit would be due from the profit of the home sale.
• If there was insufficient profit, then the remaining credit payback would be forgiven.

 For more details on the tax credit, go to www.federalhousingtaxcredit.com

DON’T ZERO DOWN IS GONE OCT 1 ACT NOW www.BuyorRefi.Biz

Tax FREE money for Seniors (REVERSE MORTGAGES)

TOP TEN THINGS TO KNOW ABOUT REVERSE MORTGAGES.
Reverse Mortgages are becoming popular in America. The U.S. Department of Housing and Urban Development (1-IUD) created one of the first. HUD’s Reverse Mortgage is a federally-insured private loan, and it’s a safe plan that can give older Americans greater financial security. Many seniors use it to supplement social security, meet unexpected medical expenses, make home improvements, and more. You can receive free information about reverse mortgages by calling AARP at: 1-800- 209-8085, toll-free. Since your home is probably your largest single investment, it’s smart to know more about reverse mortgages, and decide if one is right for you!

1. What is a reverse mortgage?
A reverse mortgage is a special type of home loan that lets a homeowner convert a portion of the equity in his or her home into cash. The equity built up over years of home mortgage payments can be paid to you. But unlike a traditional home equity loan or second mortgage, no repayment is required until the borrower(s) no longer use the home as their principal residence. HUD’s reverse mortgage provides these benefits, and it is federally-insured as well.
2. Can I qualify for a HUD reverse mortgage?
To be eligible for a HUD reverse mortgage, HUD’s Federal Housing Administration (FHA) requires that the borrower is a homeowner, 62 years of age or older; own your home outright, or have a low mortgage balance that can be paid off at the closing with proceeds from the reverse loan; and must live in the home. You are further required to receive consumer information from HUD-approved counseling sources prior to obtaining the loan. You can contact the Housing Counseling Clearinghouse on 1-800-569-4287 to obtain the name and telephone number of a HUD-approved counseling agency and a list of FHA approved lenders within your area.
3. Can I apply if I didn’t buy my present house with FHA mortgage insurance?
Yes. It doesn’t matter if you didn’t buy it with an FHA-insured mortgage. Your new HUD reverse mortgage will be a new FHA-insured mortgage loan.
4. What types of homes are eligible?
Your home must be a single family dwelling or a two-to-four unit property that you own and occupy. Townhouses, detached homes, units in condominiums and some manufactured homes are eligible. Condominiums must be FHA-approved. It is possible for individual condominiums units to qualify under the Spot Loan program.
5. What’s the difference between a reverse mortgage and a bank home equity loan?
With a traditional second mortgage, or a home equity line of credit, you must have sufficient income versus debt ratio to qualify for the loan, and you are required to make monthly mortgage payments. The reverse mortgage is different in that it pays you, and is available regardless of your current income. The amount you can borrow depends on your age, the current interest rate, and the appraised value of your home or FHA’s mortgage limits for your area, whichever is less. Generally, the more valuable your home is, the older you are, the lower the interest, the more you can borrow. You don’t make payments, because the loan is not due as long as the house is your principal residence. Like all homeowners, you still are required to pay your real estate taxes and other conventional payments like utilities, but with an FHAinsured HUD Reverse Mortgage, you cannot be foreclosed or forced to vacate your house because you “missed your mortgage payment.”
6. Can the lender take my home away If I outlive the loan?
No! You do not need to repay the loan as long as you or one of the borrowers continues to live in the house and keeps the taxes and insurance current. You can never owe more than your home’s value.
7. Will I still have an estate that I can leave to my heirs?
When you sell your home or no longer use it for your primary residence, you or
estate will repay the cash you received from the reverse mortgage, plus interest
other fees, to the lender. The remaining equity in your home, if any, belongs to
or to your heirs. None of your other assets will be affected by HUD’s reverse mortgage loan. This debt will never be passed along to the estate or heirs.
8. How much money can I get from my home?
The amount you can borrow depends on your age, the current interest rate, and
appraised value of your home or FHA’s mortgage limits for your area, whichever
less. Generally, the more valuable your-home is, the older you are, the lower the interest, the more you can borrow.
9. Should I use an estate planning service to find a reverse mortgage?
I’ve been contacted by a firm that will give me the name of a lender for a “small percentage” of the loan? HUD does NOT recommend using an estate planning service, or any service that charges a fee just for referring a borrower to a lender! HUD provides this information without cost, and HUD-approved housing counseling agencies are available for free, or at minimal cost, to provide information, counseling, and free referral to a list of HUD-approved lenders. Call 1-800-569-4287, toll-free, for the name and location of a HUD-approved housing counseling agency near you.
10. How do I receive my payments?
You have five options:
• Tenure – equal monthly payments as long as at least one borrower lives
continues to occupy the property as a principal residence.
• Term – equal monthly payments for a fixed period of months selected.

More great news to help people buy homes

Guaranteed Rural Housing Loan Program – New Product!

I’m happy to announce a great new program for people looking to buy a home on the outskirts of town.  This product is designed to help low-income individuals or households purchase homes in rural areas.  Funds can be used to build, repair, renovate or even purchase and prepare sites.

Properties (or sites) must be located in a Rural Development (RD) eligible area.  Applicants for loans may have an income of up to 115% of the median income for the area.  Please visit the following website for income limits and eligible areas:

http://eligibility.sc.egov.usda.gov

Below are just some of the program highlights:

Ø      Up to 102% financing available based on appraised value

Ø      No monthly Mortgage Insurance payments – One-time guarantee fee of 2.00%

Ø      No reserves required

Ø      No downpayment required

Ø      First Time Homebuyers welcome – no additional requirements

Ø      No maximum seller contributions (if > 6%, comment from the appraiser is required)

Ø      Gifts allowed – donor must be disinterested third party

Ø      No minimum credit score

Ø      Previous housing history is not required

Ø      Non-traditional credit is allowed like cell phones or insurance

Ø      Ratios: 29/41

Feds hold rates steady

WASHINGTON  – The Federal Reserve on Tuesday kept its benchmark federal funds rate unchanged at 2.0% — as expected by traders and economists on Wall Street — and gave no sign that it plans to change policy in the foreseeable future.

The next move is still likely to be a rate hike, but there was no sign of increased worry about inflation.

There was one dissent from Dallas Fed Richard Fisher, who wanted to hike rates.

The Fed’s Federal Open Market Committee pointed out that at the moment there were downside risks to growth, as well as upside risks to inflation, but gave no indication of which risk was more important. That would have been a clue of the possible direction of rates.

Following aggressive rate cuts, this is the second consecutive meeting at which rates have held steady. The Fed cut rates from last September through April to 2% from 5.25% — one of the sharpest reductions in history.

At 2% the Fed feels that rates are low enough to eventually stimulate the economy. But some are nervous that inflation pressures may build with rates at such low levels.

Tax credit for first time buyers

By Kenneth R. Harney, Washington Post Writers Group
August 3, 2008

WASHINGTON — Anyone who’s been sitting on the sidelines hesitant to jump into the housing market until conditions settle down should know these dates: April 9, 2008, through June 30, 2009.

They mark the eligibility period for the home purchase tax credit created by the housing bill enacted last week. If you have not owned a house during the last three years — or are considering buying a first home — and you close on a purchase before the end of next June, you may be eligible for a credit of as much as $7,500 against your federal taxes for 2008 or 2009 ($3,750 if you file taxes as a single person).

The new tax credit is expected to benefit hundreds of thousands of buyers. Here’s an overview of the specifics.

* The basic idea: To jump-start housing sales and clear out stocks of unsold real estate, Congress is offering tax credits to encourage new purchasers. Buy any house — new, old, in any location or condition for any price — within the designated time period and the IRS will cut as much as $7,500 off your tax bill this year or next.

For example, if you’re an eligible buyer of a home this year and you owe the IRS $4,000 on your total 2008 income tax bill, your $7,500 tax credit could wipe out everything you owe plus get you a $3,500 refund.

* Eligibility rules: If you own a home now, you’re not eligible. If you sold your home more than three years ago and now rent, you are eligible. The same is true if you’ve never owned a home. Close on a house before next June 30 and you can claim a credit of up to 10% of the purchase price to a maximum of $7,500.

If your adjusted gross income exceeds $150,000 ($75,000 for singles), the credit maximum begins to phase down. You cannot claim the credit if you financed the property using a state or local housing agency’s tax-exempt bond mortgage, or do not plan to use the house as your principal residence.

* Payback: Unlike some past tax credits, this one must be repaid over an extended period. Starting in the second tax year after purchase and continuing for up to 15 years, taxpayers are expected to make pro-rata repayments to the government on their federal filings. Over a 15-year payback period for the full $7,500 credit, the cost would be $500 a year.

If you sell the house before the end of the repayment period, and you have no gain on the sale, you won’t be expected to repay the remainder of the credit from the proceeds. If you have a net gain, the “recapture” cannot exceed the amount of your gain. In other words, the federal government is taking on all or much of the risk that the value of your new house won’t increase over time.

At its core, the new tax credit works very much like an interest-free loan. You pay the principal back in increments over time, but there’s no interest charge to you.

Rob Dietz, an economist for the National Assn. of Home Builders, says the credit not only will pull first-time buyers into the market but also will have a powerful “multiplier effect” as thousands of sellers of these credit-assisted houses go out and purchase replacement homes for themselves — extending the effect of the credit into the move-up segment.

How do you claim the credit? If you qualify, you simply request the credit on your tax return for either 2008 or 2009, which will be modified for that purpose.

Even if you purchase in 2009, you can take the credit against your 2008 taxes by filing an amended return. The home builders group is launching an educational website, at www.federalhousingtaxcredit.com, with additional information for consumers.

 

Thank you for that great info

Housing Bill to help

A solid article on the nitty-gritty details on the Housing Bill: http://money.cnn.com/2008/07/23/real_estate/housing_rescue_guide/?postversion=2008072321 The legislation the Senate passed 72-13, and is due to go to the president, who says he’ll sign the bill when it reaches his desk, early this week. As best I can tell, it puts a cap of $625,500 on the loans Fannie Mae and Freddie Mac can buy in certain high-priced areas, and a cap in other areas of up to 15 percent above the median home price.

Down Payment Assistance going away

Well this may be the bad part on the housing bill, but I’m sure there is a good reason for it.  Down payment assistance have helped many buyers that haven’t saved for down payment let the seller gift it.  So in essence their is a true zero down loan.  Also part of the bill that was passed yesterday says loan limits will be raised and FHA will need a 3.5% down payment not 3%.  If anybody is on the fence to buy do it now.