If you are planning to use an FHA loan, here is some important information you need to know.A property must be FHA eligible. That means it cannot have any “health and safety issues.” Your real estate agent should be able to advise you as to which properties will not qualify. This will save you a ... [Read More]
If you are planning to use an FHA loan, here is some important information you need to know.A property must be FHA eligible. That means it cannot have any “health and safety issues.” Your real estate agent should be able to advise you as to which properties will not qualify. This will save you a lot of time and disappointment. If your agent is not sure, s/he should consult with your lender. FHA does not require a pest report or section 1 clearance unless the appraiser makes negative comments about the property that would cause the lender to want to know more information. So, if your agent knows, going into the loan process, that there is going to be a potential issue, then s/he needs to make sure that it’s possible to get a section 1 clearance or to get the repairs done prior to the appraisal process.
I was very surprised to learn that industry estimates find that half of all homeowners who lose their homes to foreclosure have no contact with their loan servicers. If you are at risk of default or already behind on your mortgage payments, I recommend that you contact your servicer at the first sign of trouble. ... [Read More]
I was very surprised to learn that industry estimates find that half of all homeowners who lose their homes to foreclosure have no contact with their loan servicers. If you are at risk of default or already behind on your mortgage payments, I recommend that you contact your servicer at the first sign of trouble. Ask to speak with someone in the home retention department.
You may be able to work out a loan modification, short-sale, or repayment plan. Servicers will ask you to explain the reasons why you can no longer make the mortgage payments. You should be honest and realistic. The servicer also will need to verify your current income, unemployment benefits (if any), household expenses, tax returns, property taxes, hazard and flood insurance premiums, and condo or HOA dues.
Whether the loan servicer requests it or not, you should include a letter authorizing the servicer to speak with your REALTOR®, another family member, or perhaps your attorney, as this can help speed up the process.
If you have any questions about this process, please don’t hesitate to contact me. I’m here to help.
Approximately half of all mortgage loans are sold from one lender to another, often because the original lender is not equipped to collect payments, manage escrow accounts, pay taxes and insurance, respond to questions, and prepare payoff statements when the home is sold or refinanced. Some borrowers may receive letters in the mail alerting them ... [Read More]
Approximately half of all mortgage loans are sold from one lender to another, often because the original lender is not equipped to collect payments, manage escrow accounts, pay taxes and insurance, respond to questions, and prepare payoff statements when the home is sold or refinanced. Some borrowers may receive letters in the mail alerting them of the sale of their loan a few days after closing, while others may not receive a notice for years.
In the mortgage-industry, this is called a “transfer of servicing,” and is a common practice. Borrowers should not be concerned about these changes, as the majority of lenders transfer their servicing rights to loans. Generally, the selling of a mortgage loan from one lender to another is a smooth transition and does not impact the borrower. Every so often though, there is a misstep by either the loan buyer or the loan seller.
Under the National Affordable Housing Act, when a mortgage loan is sold, the borrower is required to receive a “goodbye” letter from their current servicers at least 15 days before their next payment is due. The letter must state the name, address, and telephone number of the new servicer; the date the old company will stop collecting payments; and the date the new company will start accepting them. Under the Helping Families Save Their Homes Act, signed by President Obama on May 20, the new owner of the loan—which may or may not be the servicer—also must notify the borrower of the transfer within 30 days, known as the “hello” letter.
The “hello” letter should outline the same information as the “goodbye” letter sent from the former loan servicing company. Borrowers should be cautious if they receive a “hello” letter without receiving a “goodbye” letter, as they may be the intended victim of a scam by someone who is hoping to unlawfully receive the monthly mortgage payments. Concerned borrowers should contact their current loan servicer to verify if their loan has been transferred. If it hasn’t, authorities should be notified immediately.
In most cases, a mortgage payment sent to the old servicer automatically will be forwarded to the new servicer for a brief amount of time, typically 60 days. However, if payments are not sent to the correct servicer, they could become lost, and the homeowner may incur late fees.
For mortgages, 620 is the new magic number
Near historic low mortgage rates, favorable home prices, and the federal tax credit for first-time home buyers have contributed to home purchases in the past year. However, the onset of the credit crisis, new regulations for home appraisals, and more stringent guidelines for purchases and refinances have resulted ... [Read More]
For mortgages, 620 is the new magic number
Near historic low mortgage rates, favorable home prices, and the federal tax credit for first-time home buyers have contributed to home purchases in the past year. However, the onset of the credit crisis, new regulations for home appraisals, and more stringent guidelines for purchases and refinances have resulted in confusion for some potential home buyers.
While using a mortgage broker to find the best loan may work for some buyers, it may not always be the best route. In the past, mortgage brokers could “shop” a loan to multiple lenders to help find the best deal. However, new practices and procedures under the Home Valuation Code of Conduct (HVCC) have hampered mortgage brokers’ abilities, namely that lenders may no longer accept home appraisals commissioned by brokers. As a result, consumers may have to pay for new appraisals with each lender, which costs time and money. However, consumers who are very busy or need guidance may find that working with a mortgage broker is the easiest solution.
Qualifying for a mortgage under current lender standards is more difficult nowadays than in years past. Beginning Nov. 1 or Dec. 12, depending on the type of loan, Fannie Mae is tightening its lending standards to the 620 credit score benchmark—including loans backed by the Federal Housing Administration and Veterans Affairs. Borrowers with credit scores of less than 620 will find it very difficult to qualify for a mortgage. However, to qualify for the best rates, consumers generally need credit scores of 720 and must have verifiable, steady income.
To save yourself time and money, be sure you work with an experienced mortgage broker who knows the latest changes in regulations and underwriting practices. A top-notch broker is able to anticipate potential problems and come up with solutions in advance so you can be confident that you will be able to finalize the sale. This affects seller’s also. Your agent should be sure that the buyer is working with a reliable broker.
If you would like a referral to some excellent local brokers, just let me know.
