I May Stir Up a Controversy Here……

As one of the approved lenders on HUD’s Hope 4 Homeowner’s website, we have been inundated with phone calls from homeowners who are either (a) in foreclosure, (b) close to having a foreclosure action filed on them, or (c) struggling to pay their mortgage because of the current economic CRISIS we are experiencing here in the US and abroad.  This program appears, on the surface, to be a possible solution to many of these people but at this point, nobody in the country is even able to do it because HUD isn’t yet set up to insure the loans.  It’s very depressing – you have no idea of the stories we hear day in and day out.  “I lost my job”, “My husband left me”, “My wife passed away”, “My hours were cut at work”, and one that I understand, “I’m in the mortgage business and my pay is now about 20% of where it was 2 years ago”.  I don’t think that people outside of our industry really understand just how bad it is and may get to be in the not too distant future.

Yesterday, I was contacted by a national news program that is reporting on the state of the housing industry, and Florida in particular, by “putting a face to those people that are struggling”.  They wanted me to provide them with the name of a family that I knew of that they could focus.  I had the perfect family: a friend of mine and her husband and their 4 kids.  They bought their house in February, 2007 for $208,000 and did a conventional, 100% fully-verified 30 year fixed rate mortgage.  At the time, she was making between $75 and $90k a year as a salesperson at a furniture store – she is a decorator and sold condo packages (I’m in a resort area in Florida).  He is a liquor salesman and was making good money, as well.  In February of this year, their income had come down by about 35% from where they were at the end of 2006 and they tried to refinance (they didn’t come to me because of pride and I could kick them for that now.)  The mortgage company they were using told them the loan was approved, to not make their mortgage payment, and to use the $2,000 that was earmarked for the mortgage to pay down some credit card debt, which they did.  UNFORTUNATELY, this mortgage company wasn’t aware of our declining market status, evidently, and put the cart before the horse.  They hadn’t received the appraisal when they told them this, and it came in at $168,000 – 20% less than they purchased the house for 12 months prior and 20% less than they owed.  “Sorry – your application is denied” was what they next heard.  Since that time and now, their 14-year old son, who was the #1 athlete in our county for baseball, basketball and football, was seriously hurt in a boating accident this summer, her husband was involved in a car accident that totaled his car and the other driver had no car insurance, and their 16 year old son was involved in a car accident.  They have been trying to work with their investor and are 60 days late as of right now, but to no avail at this point.  Hopefully, getting them on the national news and having them mention their mortgage company may help not only them, but others whose circumstances are the same.

Now to the controversial part: There are an estimated 750,000 homes in the US in foreclosure.  The number of foreclosure actions being filed was 71% higher last month than the same time frame last year.  There was a total of $850,000,000,000 ($850 billion) earmarked for a bailout.  Why in the WORLD did/is this money going to banks, investment companies, etc???  If these funds had been allocated to 17 MILLION distressed homeowners, they could have each gotten $50,000, had it applied to their mortgages, and had their mortgages recast (reamortized over the remainder of the term based on the new principle) to help lower the payments of many and keep many more in their homes.  The banks and lenders would STILL have gotten the money, but the way it would have been done would have made a HUGE difference.  Do I have a suggestion as to how to determine what homeowners would have gotten this money?  I have suggestions, but definitives would be hard to come up with, I’m sure.  Would it have been “fair” across the board?  No, but neither is the way it is being handled now.  Would this amount ($50,000) satisfy all of the foreclosure actions?  Probably not.  BUT WHY WASN’T IT EVEN AN OPTION ON THE TABLE???  Instead, we have given this money to banks who are not willing to help out most “Joe the Plumbers” at a time when our housing industry crisis needs to be resolved to help aid in the recovery of our entire economic system.  John McCain is right: we have to get the housing industry repaired ASAP to help with the rest of our economy.  Barack Obama had it right – recovery starts at the bottom with the little person (although he wasn’t talking about the housing market – I think it was an entire other subject to which he was referring but this statement is true as it relates to fixing the housing market).

Do I say this to you because I feel that in getting the market fixed it will help me to grow my income?  NO.  Unless you are talking to a great number of people who wind up crying on the phone and feel that they are going to lose their homes (I am doing these in Alabama, Georgia, and Florida, with the higher number so far coming from Georgia) you can’t even imagine how horrible and how extremely widespread this issue is.  I am sure that all of us know someone in this situation and our heartstrings are tugged continually.  When you talk to the number of them that we, and those other lenders listed on HUD’s Hope 4 Homeowners website have talked to, it’s like a humongous ache that stays in your heart and eats at you trying to figure out how to help these people.

I am not in this business for philanthropic reasons - this is my career –  but I have to tell you: I have NEVER IN MY LIFE done more work for clients that I know I will never get paid on in my life.  It’s an embarrassment to our country, in my opinion, that we think so much of banks and those entities who’s entire purpose in being created was to “protect our money” <cough cough>.  In doing so, they have cost many of our brethren their homes. 

 

USDA Rural Housing Mortgage Eligibility Information

If you are a Realtor® with a client, or you are a prospective real estate buyer, the USDA Rural Housing loan is a great program!  It is one of the last truly “no money down” program and allows closing costs the the seller isn’t paying to be included in the loan amount!

 

 

The areas that are eligible will probably surprise you.  Their maps haven’t been revised in nearly 10 years and, as this program is based on the full-time population in an area, much of the Florida urban maps  are still considered in this program.  The maps won’t be revised until 2012, or later, so they will remain as they are today but after that time, the elibility restrictions will be tighter on location.

Feel free to contact me if you or your client is looking for financing at 100% in Florida, Alabama, Georgia, North Carolina, South Carolina or Tennessee.  We underwrite these loans in our office and can issue a prequalification within 30 minutes!

 

Choose the Right LOAN OFFICER, as well as the right Lender!

While it may be tempting to choose a loan officer and lender strictly based on the lowest-quoted interest rate, it is recommended that the decision be prioritized by a different standard – their reputation. As the loan officer to provide you with testimonials from past clients, as well as ancillary-related professionals (you can see mine here). Google your prospecitve loan officer’s name and see what type of information that they are contributing to help buyers and sellers and Realtors®. (It is suggested you google the first and last name of the loan officer, the word “mortgage” and the city and state in which their office is located – put this information all in quotation marks, ie: “Sue Botelho Mortgage Destin FL”) Ask local title companies of their experience in working with the loan officer – were the closing packages sent in time for the contractual closing date, was the package sent complete and correct, etc.

The process of finalizing a loan has many steps. A lot of paperwork must be drawn up, verified, processed, and signed by all of the parties within a relatively short time frame. Mistakes made by a loan officer can delay, and in sometimes completely end, the transaction completely. As a result, most Realtors® have horror stories about buyers that picked a loan officer and lender based only on their low-rate quote, only to have not only something in the transaction blow up, but the rate at closing to be higher than promised!

An irresponsible loan officer or lender can ruin your purchase. Keep yourself alert: start you loan officer/lender search by shopping reputation, not rates. Or course, rates and fees do matter – a lot! A good loan officer will let you know ahead of time what the current rates and fees are for their loan produces so you will know if they are fair and competitive. A GREAT loan officer will have a pulse on those markets that drive interest rate direction and choose to either lock or float their clients’ interest rate to assue that they get the benefit of the loan officer’s expertise and knowledge and that they get the lowest payment/rate available during the processing of the clients’ application.

In the end, having the right loan officer working for you can assure you that all of the details will be handled accurately and timely and that the clients are getting sound financial advise. Peace of mind is the number one priority!

Real Estate is Still A Good Investment!

Everywhere you turn, there is bad news – on TV, in the paper, standing in a checkout line at the grocery store as the guy behind you talks about how bad things are. I’m not going to try to be Suzie Sunshine and say that it’s all good(which is what I usually am), or that things will be better tomorrow (of course, they probably will be, says Suzie Sunshine!), because there truly are some scary things happening on the economic front, both nationally and internationally. But what I do want to advise you is that the “credit freeze” in the mortgage industry is a term that is being tossed around and it is NOT TRUE.

What has happened in the mortgage industry is a TIGHTENING. As many of you know, over the last 5-6 years, mortgage programs were introduced that truly enabled some people to get a mortgage if they could fog a mirror. We were able to finance a buyer for an investment property (the highest risk occupancy type) up to $1,250,000 with absolutely no money down (100% of sales price) and a 650 or higher credit score even if they didn’t have a job! This was a “no doc” program and a buyer didn’t list income, assets, or employment; the only thing on the application was the identifying information (name, address, social security number), the real estate owned section, and the liabilities. The only “file” submitted for underwriting was the application, signed disclosures, contract, appraisal, and credit report. Everybody is familiar with the other types of mortgages we were doing, as well: stated income (everything is stated, nothing verified), no ratio (employment and assets were verified but income wasn’t even listed), and NINA (no income nor assets were listed nor were verified).

In today’s mortgage environment, the loosened guidelines for qualifying have been tightened. This means that a buyer or an owner that is refinancing has to qualify. All that means is that they HAVE TO PROVE THAT THEY ARE ABLE TO AFFORD THE PROPERTY. While there may be those people who think this is horrible, it’s really how it should have been all along! I am not going to go into all of the reasons why these programs were developed (I’m not going to get political on you!) but by allowing these programs, we (the mortgage industry as a whole, along with Wall Street and the Government Sponsored Enterprises, like Fannie Mae and Freddie Mac) weren’t acting responsibly and certainly didn’t do any favors for people. Some of those same people are now winding up in foreclosure, bankruptcy, and, in some cases, homeless.

However, in today’s market, we are still able to secure financing for purchases and refinances to those buyers and owners who can really afford their property. There is not a credit freeze on mortgages as the media is telling us. There is a lot of opportunity for people who really weren’t able to purchase when values were increasing as rapidly as they did earlier this millennium. There are great opportunities for qualified buyers who want to secure 100% financing – rates are still at historical lows, prices are more in line with what people can afford, and with the decline of both the stock and bond markets, real estate is something that you can touch, feel and live in and will never decline to such a point that it will be gone forever, as we have seen some stocks do in the past!. Markets are cyclical and, with time, we all know that real estate will once again appreciate and those people who “bought low” will see their values increase.

Florida Real Estate Foreclosures: Inflated Fact or Fiction?

Florida has gotten the reputation for being “the foreclosure capital of the nation”.  What they don’t tell you is that the basis of this “fact” is the the Lis Pendens filing, which is the first step in the foreclosure process.

A Lis Pendens is file and it can take 6, 8, 12 8, and even 24 months in some cases to actually get to foreclosure.  During this time (after the filing of the Lis Pendens and prior to the foreclosure), many of these properties are being sold (either as a short sale or a regular sale), or some of the homeowners are getting loan modifications and restructuring their mortgages or some owners are getting a deferrment of payments.  When one of these solutions occurrs, the foreclosure is stopped, thus the number of “foreclosures” in Florida is actually less than what is being reported as fact.

Another piece that is being reported incorrectly is that “there are a disproportionate number of people being left homeless in Florida” due to this “high number of foreclosures”.  In some areas of our state, over 70% of the properties on which Lis Pendens are being filed were purchased by speculators as investment properties with the sole intention of selling them fast for a profit.  The majority of these speculators are residents of other states who took advantage of exotic loan products (Ie: stated income or no doc).  As these products have gone away, so have the speculators.

Due to this distortion of the number of foreclosures in Florida, investors have tighted their guidelines concerning loan to value and property and/or occupancy type that they will finance in Florida.  Several years ago, it wasn’t uncommon for investors and banks to allow a mortgage lender or broker to secure 100% financing on a 2nd home or investment property for their clients and we are now limited to 75 – 80%.  Some investors, including Chase and Suntrust, have recently gone so far as to make the decision to get out of the condo and investment financing markets altogether in the state.  Chase has even ceased financing 2nd home properties in Florida, regardless of the property type (single-family detached, attached, condo, etc.) and are limiting primary home purchases of detached properties to 90% and of attached properties (townhomes, duplexes, etc.) to an 80% loan to value!

While the pendulum on financing properties in Florida has swung in an entirely opposite direction from where it was several years ago, there are still programs available to buyers of ALL property types in Florida and of all occupancy types (primary, 2nd home, or investment) if you work with the right lender or broker.  No matter what you may be hearing in the media, 100% financing for primary homes is alive and well (VA Mortgage, USDA Rural Housing Mortgage, Community Assistance Programs, Community Second Mortgages) and there is also an FHA Mortgage, which only requires a 3% down payment (3.5% after December 31, 2008).

With the tax advantages offered with home ownership, as well as the new tax credit created with the signing of HR3221 for up to $7,500 for those individuals who haven’t owned a home in the last 3 years, now is an advantageous time to buy and get the benefits of these tax credits/deductions.  Interest rates are still low and purchase prices have dropped.  Florida residents who are considering buying a primary home and keeping it for a long time (over 4 years) should jump in with both feet.  BUY NOW OR KICK YOURSELF LATER!

 

USDA Rural Housing Mortgage – 100% Financing – No Down Payment – Direct Loans

Most of my posts are on the USDA Guaranteed Rural Housing Mortgage program.  This is a mortgage program that gives 100% financing, including, if necessary, the funding fee, closing costs, and prepaids to enable a buyer to get in a house with absolutely no money down.  This program is one in which the client goes to a mortgage lender (such as Northstar Mortgage Group!), a bank or a mortgage broker to get their financing.  If a client makes less than a specified amount for a specific purchase area, and the property fits the geographical requirements, we can assist a buyer with financing.

However, what happens to those people who don’t make enough money to qualify for a home traditionally, whose income levels probably won’t qualify them for any house in the area based on traditional guidelines?  Those that are between 50 and 80% of the area median income (AMI) are considered low income, or those that make less than 50% of the AMI are considered very low income.  Most of the time, these buyers can’t qualify for a USDA Rural Housing Guranteed Mortgage.  What happens to them?

Most lenders, bankers and brokers won’t tell you or your client this because they won’t get paid on it, but USDA has another program to help these people obtain homeownership.  It’s the USDA Rural Housing Direct Loan program.  These are directly funded by the Government and are available for low and very low income households.  These loans are commonly referred to as Section 502 Direct Loans.

Recently, I have had two calls from prospective buyers who wanted to purchase a home; both of them fit the low to very low income guidelines of the USDA Direct program and I referred them to the USDA to apply for that program.  One of them purchased a house and his total payment, including taxes and insurance, is $475.  The other has a payment of $437! 

USDA Direct loans are for terms up to 33 years (38 years for those with incomes below 60 percent of AMI and who can’t afford 33-year terms).  The interest rate is based on the Government’s cost of money and is modified by payment assistance subsidies.  Applicants must have reasonable credit histories and the housing must be modest in size, design and cost. 

If you or someone you know is without adequate housing but would be able to pay monthly mortgage payments, contact either your local USDA office (there is typically one in each county) or you can contact me and I can point you in the right direction.

It’s not always about the income we get from originating mortgages; sometimes it’s about helping our fellow humans get the most basic of needs!

 

Florida FHA Loan Limits

 

MSA Name	County Name	Single-Family
GAINESVILLE, FL (MSA)	ALACHUA	$204,440
JACKSONVILLE, FL (MSA)	BAKER	$294,500
PANAMA CITY-LYNN HAVEN, FL (MSA)	BAY	$251,750
NON-METRO	BRADFORD	$200,160
PALM BAY-MELBOURNE-TITUSVILLE, FL (MSA)	BREVARD	$221,350
FORT LAUDERDALE-POMPANO BEACH-DEERFIELD BEACH, FL	BROWARD	$362,790
NON-METRO	CALHOUN	$200,160
PUNTA GORDA, FL (MSA)	CHARLOTTE	$224,209
HOMOSASSA SPRINGS, FL (MICRO)	CITRUS	$200,160
JACKSONVILLE, FL (MSA)	CLAY	$294,500
NAPLES-MARCO ISLAND, FL (MSA)	COLLIER	$362,790
LAKE CITY, FL (MICRO)	COLUMBIA	$200,160
ARCADIA, FL (MICRO)	DE SOTO	$200,160
NON-METRO	DIXIE	$200,160
JACKSONVILLE, FL (MSA)	DUVAL	$294,500
PENSACOLA-FERRY PASS-BRENT, FL (MSA)	ESCAMBIA	$200,160
PALM COAST, FL (MICRO)	FLAGLER	$218,500
NON-METRO	FRANKLIN	$200,160
TALLAHASSEE, FL (MSA)	GADSDEN	$200,160
GAINESVILLE, FL (MSA)	GILCHRIST	$204,440
NON-METRO	GLADES	$200,160
NON-METRO	GULF	$200,160
NON-METRO	HAMILTON	$200,160
WAUCHULA, FL (MICRO)	HARDEE	$200,160
CLEWISTON, FL (MICRO)	HENDRY	$200,160
TAMPA-ST. PETERSBURG-CLEARWATER, FL (MSA)	HERNANDO	$222,300
SEBRING, FL (MICRO)	HIGHLANDS	$200,160
TAMPA-ST. PETERSBURG-CLEARWATER, FL (MSA)	HILLSBOROUGH	$222,300
NON-METRO	HOLMES	$200,160
SEBASTIAN-VERO BEACH, FL (MSA)	INDIAN RIVER	$213,750
NON-METRO	JACKSON	$200,160
TALLAHASSEE, FL (MSA)	JEFFERSON	$200,160
NON-METRO	LAFAYETTE	$200,160
ORLANDO-KISSIMMEE, FL (MSA)	LAKE	$268,850
CAPE CORAL-FORT MYERS, FL (MSA)	LEE	$270,750
TALLAHASSEE, FL (MSA)	LEON	$200,160
NON-METRO	LEVY	$200,160
NON-METRO	LIBERTY	$200,160
NON-METRO	MADISON	$200,160
SARASOTA-BRADENTON-VENICE, FL (MSA)	MANATEE	$336,100
OCALA, FL (MSA)	MARION	$200,160
PORT ST. LUCIE-FORT PIERCE, FL (MSA)	MARTIN	$276,640
MIAMI-MIAMI BEACH-KENDALL, FL METROPOLITAN DIVISIO	MIAMI-DADE	$362,790
KEY WEST-MARATHON, FL (MICRO)	MONROE	$362,790
JACKSONVILLE, FL (MSA)	NASSAU	$294,500
FORT WALTON BEACH-CRESTVIEW-DESTIN, FL (MSA)	OKALOOSA	$237,405
OKEECHOBEE, FL (MICRO)	OKEECHOBEE	$200,160
ORLANDO-KISSIMMEE, FL (MSA)	ORANGE	$268,850
ORLANDO-KISSIMMEE, FL (MSA)	OSCEOLA	$268,850
WEST PALM BEACH-BOCA RATON-BOYNTON BEACH, FL METRO	PALM BEACH	$362,790

 

 

USDA Rural Housing Mortgage Loan Pro!

My title on ActiveRain says that I am a “USDA Rural Housing Mortgage Loan Pro”. I am licensed to originate USDA loans in Florida, Alabama, Georgia, Tennessee, and the Carolinas.

The media tells you that 100% financing does not exist today for your buyers today.  This is not true.  Of course 100% financing is available to Veterans but it is also available through the USDA via their Rural Housing program.

 

If you are going to place your commission check in the hands of a loan officer where your client needs 100% financing, send them to an expert.  When LoanToolbox, a company that educates over 10,000 mortgage professionals across the country, wanted to educate their membership on benefits of the USDA, they sought out an expert to help them.  That expert was me, Sue Botelho.

 

Not only did LoanToolbox interview me for the benefit of their members, they also requested sales presentation materials I use when educating the real estate community, including the PowerPoint presentation you may have already seen. (If you see someone else present something similar, plagiarism is the greatest form of flattery!)

 

Bottom Line.  If you had to place your commission check in the hands of the student or the teacher, who would you choose? When the mortgage industry seeks expert advice, they sought out Sue Botelho.  When you have clients needing expert advice and your commissions are at risk, who will you seek out?  Call me, I will get your deal done and get you paid.  I get deals done others can not.

 

Read below where you can see Loan Toolbox turned to me for information I can provide you every day.  

 

 

New USDA Presentation and Marketing Kit

What if there was a loan product available that offered 100% financing to your buyers – and they don’t have to be veterans to qualify? What if rates for this product were not only attractive, but it also didn’t require monthly mortgage insurance? And finally, what if this same loan didn’t require any additional licensing on your part to originate?

Does this sound like something your clients and REALTORS® would like to know about?

Listen to today’s business tip from LTB faculty member Jim Sahnger and learn how USDA loans – that’s right, the US Department of Agriculture – can help you close more deals and put even more in your pipeline. More importantly, listen as Jim announces a new USDA Marketing Kit LTB will release this week with everything you need to take advantage of this great opportunity, including a new conference call with Jim and LTB member Sue Botelho and MBP speaker Linda Davidson, a new PowerPoint presentation, and all the necessary handouts.

To learn more about this incredible opportunity, listen to today’s voice broadcast..

USDA Rural Housing 100% Financing – 30 Year Fixed Rate 5.5% No Points, No Origination Fee

Today’s rate on a USDA Rural Housing loan is at 5.5% with no points, no origination fee. There is a 2% financed funding fee but no monthly mortgage insurance. AND THIS IS FOR 100% FINANCING IN WHICH YOUR CLIENT CAN FINANCE ALL OF THEIR CLOSING COSTS IF THE SELLER ISN’T PAYING THEM!

What does this mean to a person who is currently renting? They can buy a home at a sales price of $155,400 and have a payment less than $900, not including taxes and insurance. This $900 payment DOES include the 2% fee.

Here are the sales prices that can be purchased to keep principle, interest and financed funding fee under a renter’s current rent; these figures do not include taxes and insurance:

Payment under $600 = Sales price of $103,500

Payment under $700 = Sales price of $120,800

Payment under $800 = Sales price of $138,000

Payment under $900 = Sales price of $155,400

Payment under $1,000 = Sales price of $172,650

Payment under $1,100 = Sales price of $189,900

Payment under $1,200 = Sales price of $207,200

Payment under $1,300 = Sales price of $224,450

As a reminder: USDA rural housing loans (mortgages) have an income cap depending on the county and the number of people that live in the property and geographical limitations. There are many areas that are qualified that a lot of people aren’t aware of so be sure to check with us if you have a client looking to purchase a primary home to see if the property qualifies.

Today’s rates on an FHA loan, which requires 3% down payment, are at 5.75% with no points, and no origination fees. FHA loans do not allow the buyer to finance closing costs, which USDA does, so the buyer will have to have money at closing above and beyond their 3% contribution unless the seller is paying all of their closing costs (on an FHA loan, the seller can pay up to 6% of the sales price towards closing costs).

If you have a buyer looking to purchase a primary home, please have them contact me even if they have already been approved with another lender. We may be able to save them a LOT of money on their purchase. Also, a client can apply online and we can have a prequalification within minutes!

Don’t let yourself or your client, if you are a Realtor, pay more than they have to to purchase their primary home!

First Time Buyer? Buy a House with NO MONEY DOWN and get the $7,500 Tax Credit for 2008!

HR3221, the bill signed into law about a month ago, allows for up to $7,500 in tax credits to be given to first time homebuyers that purchase a home between August 9, 2008 and July 1, 2009. This credit will be deducted from your 2008 tax return. It does have to be paid back but it is paid back over 15 years, which would be $500 a year added to your tax liability for the next 15 years as it is interest-free when repaying it.

If you couple this with a USDA Rural Housing Loan (mortgage), you can get into a property with no out of pocket money AND get $7,500 taken from your tax liability for this year! Instead of waiting until you file your tax return next year, you can actually change your withholding for this year and start reaping the benefit of the credit right away.

The increased amount of your take home pay can help with buying furniture for your home, upgrading the appliances, replacing flooring, etc. What a great time to buy a home!

USDA Rural Housing loans can be used on new construction or new homes and the rates are VERY low (5.5% for a 30 year fixed rate with no money down as of yesterday!)

If you are looking to purchase a home in Florida, Alabama, Georgia, North Carolina, South Carolina, or Tennessee, feel free to apply here or you can email me. Northstar Mortgage is guiding you home!