Mortgage Loans Blog

Real Estate Mortgage Shoppe 1-21-12Real Estate and Mortgage Industry Updates 1-20-12

Our topic today is “Keep Your Lifestyle: How To Make Your House Pay YOU!”
Here are the industry updates taken from the radio show scripts.
Below is the link to the full podcast of the 1-21-12 radio show:

http://www.600wrec.com/cc-common/podcast/single_page.html?more_page=1&podcast=jogarner&selected_podcast=Jo_and_Ken_Bolie_Aaron_McD

There is so much in real estate and mortgage news this week….what do we talk about? What do we leave out?
Okay, well since we’ve had numerous calls about the mortgage rates, why don’t we start there? We saw a weakening market this week which caused rates to bump up just a hair but they are still at neutral buoyancy around 3.875% to 4.25% for the fixed rate 30 yr and 3.125% to 3.5% fixed for the 15 year. The 5-1 ARM is a great deal for a few folks in the low 3’s .
Word to the Wise: If the rate and terms you are being quoted today give you something to brag about, lock it to today. Better to commit on a low rate today and have some bragging rights and be a little disappointed when the rates go lower, than to NOT lock the rate and be angry & frustrated when the rates jump higher. Read the rest of this entry »

Few things that you must know before opting for loan modification

Loan modification program has become very popular these days. In this program, you, the borrower, are allowed to modify the terms and the conditions related to your original mortgage. Usually, if you find it difficult to afford your existing mortgage payments, you can opt for mortgage loan modification program. This is regarded as an excellent way to deal with your mortgage problems. From the lender’s point of view, you opting for loan modification program, is a far better option than you filing for bankruptcy.

Loan modification program can be done in several ways. It can be done through by reducing the rate of interest, changing the terms of the loan and by sometimes changing the principal loan amount. In case the rate of interest on mortgage loan is reduced, the mortgage payment mount is lowered down. This reduction in the rate of interest may be permanent or temporary in nature. Sometimes, your lender may be interested to forgive a part of your mortgage loan amount. The aim of all these is to lower down your monthly mortgage payment amount.

If you are facing difficulty in making mortgage payments, you are required to contact your lender so as to discuss about various options available before you. Generally, you will not be asked for loan modification program unless you ask for this program. In case you receive a foreclosure or default notice, it would be wise not to ignore that notice. You can also show your willingness to opt for mortgage modification program. One of the important factors that your lender will take into consideration while allowing you mortgage modification program is your equity in your home. Your equity in your home can be calculated by the difference between the market price of your home and the amount that you owe. If you have comparatively less equity in your home and in case your lender would lose more in case you opt for foreclosure, then your lender will be more interested to modify your loan. Again, in case you have sufficient equity in your home, in that case, a foreclosure will cover the loan amount plus fees. In that case, your lender will be less interested to allow you to opt for mortgage loan modification. In other words, your lender will allow you such solution, for which loss to the lender will be less.

Before opting for mortgage loan modification program, it is however important to get to know about the basic ingredients in a loan modification program. You can opt for this program on your own even without taking the help of an experienced attorney. Here we discuss amount some factors that you must take into consideration, before applying for mortgage modification.

Legitimate hardship letter

One important component in mortgage modification program is the legitimate hardship letter. Your lender will always look for a legitimate hardship letter from your side. Merely because of the fact that you want a low mortgage payment amount, your plea for mortgage modification will be allowed. All of you would want low mortgage amounts. Unless and until your lender is convinced that there is a genuine reason, your mortgage modification application will not be entertained. A legitimate hardship letter will provide detailed information about your present financial situation, the underlying reasons behind reaching such situation and the steps that you have taken to remedy the situation.

Means to pay

One important thing that your lender will take into consideration is whether or not you will be able to repay the loan even after modification. Generally, if you have lost your job or if you are unemployed, bank will not be interested with you.

Before opting for mortgage modification, you must take into consideration the above discussed factors.

Listen to the show “Getting Started In Real Estate–Your Real Estate Journey”REAL ESTATE MORTGAGE SHOPPE
ON NEWS RADIO AM 600
9A-10A Saturdays
January 7, 2012 show

The topic for the Real Estate Mortgage Shoppe program on January 7, 2012 is “How To Get Started In Real Estate—Your Real Estate Journey with Jo Garner, Mortgage Officer with Evolve Bank and Trust and co-hosts Richard Scarbrough, buyer and broker for First National Realty and Kevin Perk, investor with Kevron Properties and www.smarterlandlording.com
The Real Estate Mortgage Shoppe radio show airs every Saturday 9A to 10A CST on News Radio AM 600 in Memphis, TN. You can also listen live online at http://tunein.com/radio/WREC-600-s22371/
The Real Estate Mortgage Shoppe radio show covers a variety of topics including the latest mortgage news and rates and how it affects the homeowner or aspiring homeowners. Also covered on the show is helpful information about niche real estate mortgage products like the FHA 203K renovation and repair loan, the 100% VA loan, the 100% Rural Housing loan, Down Payment Assistance programs, Conventional combination loans, the My Community Mortgage and refinancing products.

The Real Estate Mortgage Shoppe radio show is led by Jo Garner with Evolve Bank & Trust, a mortgage officer with over 20 years experience and a passion for listening and helping her customers accomplish what they set out to do with the right mortgage product. Jo Garner, Mortgage Officer Evolve Bank & Trust (901) 482-0354 www.MoneyShoppe.NET and www.MortgageLoansBlog.com

In the real estate news this week, Jo Garner shared the highlights.
There sure is a lot going on for a short first week of 2012. . For starters, the Fed sent Congress a little missive on how to fix the housing and mortgage market. The large inventory of foreclosed properties owned by the bank, is keeping the house prices low and keeping households poor. The rent rates on houses are rising as more people leave homeownership and shift to renting. Here’s some ideas the Fed shared with the White House. They said “Try
#1.Creating a bank-owned property to transition from a home-to-rental program that relies on sales to third-party investors. This could work by(a) structuring competitive auctions; (b) making a more attractive deal to investors, or (c) providing investors with the debt financing.

2. Remove some of the obstacles preventing creditworthy borrowers from accessing mortgage credit.
3. Step up efforts to aggressively pursue loan modifications and work out plans for homeowners in money trouble instead of dumping larger numbers of foreclosures on the market
Other big news that will affect homeowners purchasing a home with a mortgage or refinancing one. Tongues are wagging and speculating about the Fannie & Freddie guarantee fee increase adding 10 basis points for each loan closed. Fannie Mae and Freddie Mac will increase their guarantee fee on all residential loans being pooled by 10basis points on April’s Fool’s Day. Many experts believe that this increase should start to reflect on mortgage applications in February, if not sooner. What that means to you, the homeowner, is that if you close on a mortgage for $200,000, you are going to pay over $200 more for cost at closing. If you were borrowing $100,000, you will be paying over $100 more in costs.
Rates are curiously still at their low mark. The 30 yr mortgage rate is around 3.875% to 4.25%. The 15 yr rates are running in the low 3’s to mid 3’s.
My assistant, Susan Belew, and I have a list of customers who are waiting on the new HARP 2 mortgage refinance program to fully roll out. This is the new government program to help homeowners who are making their house payments on time but who owe more than the value of their house. This program has some restrictions. –one of them is that the loan must be backed by Fannie Mae or Freddie Mac. Lenders are waiting for Fannie Mae and Freddie Mac to update their computerized underwriting systems with the new guidelines. The updates are expected in March.
If you want to take advantage of the extra low mortgage rates available, my very capable assistant, Susan Belew and I would like to review your mortgage terms to see if we can save you some money, call us at 901 482-0354. Susan is standing by our phone right now.

The Real Estate Mortgage Shoppe radio show has a mission to inspire and inform the public about relevant topics concerning real estate and real estate financing. Our purpose is to help homeowners achieve their goals in an economical and satisfactory manner.

This radio show covers answers to the questions on rent vs. buy, when does it make sense to refinance my loan, and more. Every week listeners get tips from the Real Estate Tip Of The Week and tips from the host and co-hosts of the program.

By clicking and listening to the podcast below you can catch some of the profitable ideas Richard Scarbrough and Kevin Perk offer to real estate investors starting out.

If you are planning a mortgage loan refinance and mortgage loan for purchase financing of real estate in the Memphis area and across the country, contact Jo Garner at Evolve Bank and Trust (901) 482 0354.

REAL ESTATE MORTGAGE SHOPPE

ON NEWS RADIO AM 600

9A-10A Saturdays

The news for mortgage loans and credit on home loans this first week of 2012 is hot from Jo Garner, Mortgage Loan Officer with Evolve Bank & Trust in the Memphis, TN area.  On the radio show today we discussed the Federal Reserve’s missive to the White House on how to fix the real estate and mortgage market. We talked about the new government imposed Guarantee Fee added to each Fannie and Freddie mortgage loan closing. And we gave updates on the phased roll-out of the government HARP 2.0 refinance program for borrowers underwater.

The main topic of the radio program was “How To Get Started Investing—Your Real Estate Journey.”  The co-hosts were experts Richard Scarbrough, buyer and broker from First National Realty and Kevin Perk, owner of Kevron Properties and www.smarterlandlording.com

Read the rest of this entry »

The mortgage loan business in Memphis and every city around the nation is about to go into high gear with record numbers of mortgage loan refinances.
The government on Monday October 24, 2011 announced a federal loan program that will make it easier for struggling homeowners to refinance to today’s near-record low rates. The revised Home Affordable Refinance Program will not require an appraisal. The final guidelines for this program will be released on November 15, 2011 and the program goes into effect December 1, 2011.
Homeowners who refinance into 30-year mortgages will pay some fees even though the costs on the new HARP program will be lower than the current risk-based fees. For borrowers who refinance into shorter term mortgages of 20 years or less, all risk-based originations fees will be waived.
Here are some of the stipulations:
(1) The mortgage being refinanced under the new HARP program must be owned by Fannie Mae or Freddie Mac.
(2) The mortgage must have been sold to Fannie Mae or Freddie Mac BEFORE May 31, 2009.
(3) The mortgage must not have been refinanced within the last 2.5 years.
(4) The homeowner must be current on the payments with no more than one payment over 30 days late in the last 6 months and no more than 2 payments over 30 days late in the last 12 months.
Jo Garner and Susan Belew and their team are gearing up to help their customers get ahead of the herd by getting the customers’ loan applications completed BEFORE November 15, 2011 when the regulations will be released. Once the mortgage team determines that the homeowner is qualified for the loan under the final loan regulations, then the customer can lock in terms and begin the process to closing.
Jo Garner, Mortgage Officer (901) 482-0354 jgarner@getevolved.com www.MoneyShoppe.NET www.mortgageloansblog.com
For more information about mortgage loan refinances in the Memphis area and around the nation, contact Jo Garner.

FHA 203K Home Repair Refinance

The FHA 203k renovation and rehabilitation mortgage clears the way for numerous homeowners to get the very best buy on purchasing their home.    In my career as a mortgage loan officer for the past 20 years, I have seen my customers seal some of the very best deals buying real estate in Memphis using the FHA 203K Repair and Renovation loan.

My customer, Mr L, called me when they put the last finishes on their repairs on the house they purchased for just cents-on-the-dollar.   Here’s how he snagged the “deal of the century” as we are calling it.

Mr. L knew that his family needed to purchase a home that would more than meet their needs but still remain within their budget. They had been on the hunt for their perfect home for about 2 years.  I could hear the excitement in his voice when  Mr L called me to get the loan application completed and the preapproval letter drafted so that his contract could be accepted by the seller.

“This is the perfect house for us, Jo.  It is so unbelievable that we getting this house in this neighborhood for so little money.  Not only is our payment going to be within our budget, but is going to leave room for other stuff.  What a deal!”

Here is the process we went through to get the perfect house for Mr. L.

(1)   First he looked at the house with his contractor and got an idea of how much it would costs to repair

(2)   I gave him an estimate of what terms would be on the loan

(3)   He and his realtor wrote an offer to purchase the home and it was accepted.

(4)   I set up an appointment for the appraiser, the HUD consultant and the homebuyer to meet at the property.   The HUD consultant reviewed the specifications and cost estimates from the contractor who would do the work.  The appraiser gave us a value for the property.  Later the HUD consultant delivered the “official” reasonable costs estimate that the mortgage office would use to calculate Mr. L’s loan amount.

(5)   Mr. L submitted his income and asset documents and loan disclosures to the mortgage office and we submitted the loan to underwriting for approval.

(6)   Mr. L closed on his loan leaving the money for repairs in escrow to be pulled out little by little as the repair on the house gradually came to completion.   The HUD consultant came out 4 or 5 times to inspect the work as they would get to a certain stage in repairs.  At each inspection, a draw was made on the repair money sitting in the escrow account to pay the contractor until the work was completed.

Here is how the 203k loan structure looked approximately for Mr. L. :

Sales price:  $80,000

Cost of renovations:  $38,000

15% reserve on renovations: $5,700

$123,700

X           96.5 (to subtract 3.5% mandatory down payment)

$119,371 (FHA base loan amount)

X            1.01 (adding 1% upfront FHA mortgage insurance)

=    $120,564 (total loan amount with upfront MIP added)

Mr. L’s money needed to close:

Down payment  3.5%  $4,339

Closing costs including $800 HUD consultant fee & 3 inspections $5,000

Escrowing property taxes and insurance $2,700

Seller agreed on contract to pay $2,400 of closing costs for buyer. (FHA allows the seller to pay up to 6% of the closing costs if it can be negotiated on the contract)

$4,339 dp + $5,000 closing costs + $2,700 tx & ins=$12,039 minus seller pd $2,400=Mr L to pay $9,639 to close.

The house value was assessed at over $200,000.  What a deal for Mr. L!  What a deal for anyone who can buy a house that far below market price, fix it up and walk into an instant 40% equity position!

Jo Garner, Mortgage Office

Evolve Bank & Trust

(901) 482-0354 jogarner@mindspring.com

www.MoneyShoppe.NET

The FHA 203K mortgage loan financing was a great real estate home purchase  for Mr. L living in Memphis.

Terry Kerr, a successful real estate investor and rehabber from the Memphis area, got a call from someone ready to sell a multi-unit property at a cut rate price. The deal was too good to let go, but Terry had a big problem. He and his family were going out of state the next day on a much needed week-long vacation.  In order to grab this deal Terry had to arrive at the closing table with cash the day after he returned from vacation.

A good number of people would resign themselves to kissing this sweet deal good-bye.  But Terry had a plan.  He punched in the telephone number for his private lender. It didn’t take long for Terry to give his private lender the details of the deal, the value, the cost to repair and the projected profit once the property was completely rehabbed.

The private lender did a quick check on the value of the property and the estimated repairs to be done. She had already done a credit and background check on Terry from previous transactions.  Her last words to Terry before he left town went something like this, “Go have a great time on your vacation, Terry.  I’ll have the money ready for your closing when you return.” These quick money lenders are sometimes pictured as sinister hoodlums lurking in dark alleys waiting to break borrower’s kneecaps when they can’t repay. However, professional hard money lenders are NOT the Mob, but they are not Mama either. Interest rates can go well into the double digits with upfront points depending on the risk factors.

Generally the hard money loan is a temporary loan until the borrower can secure permanent financing or other method of payoff. The main difference between a professional hard money lender like Terry Kerr’s lender and the unscrupulous predatory lender is the design of the loan terms and the type of borrower. The unscrupulous lender structures the loan so that borrowers inevitably fail and the lender/predator can take the house in foreclosure.

On the other hand, the professional hard money lender structures reasonable terms because he wants his money and fees—not the borrower’s house.

There are probably as many different hard money lending loan terms as there are hard money transactions. Terry Kerr’s private loan structure looked something like this:

Sales price on “AS IS” multi-unit:              under $ 20,000
Cost to repair property:                                              $ 50,000

Value of property “AS IS”                approximately  $108,000
Hard Money Loan 65% LTV:                                           $  70,000

Points paid by Terry to his private lender at time of payoff:   $  7,200 (plus interest paid monthly)

Term of hard money loan:  6 months
Terry’s PROFIT at the end of the deal:  !!!!!$ 60,000 !!!!!

Terry Kerr shares his knowledge and experience regularly at the Memphis Investors Group meetings. He shared in a recent interview, “I have done 35 real estate investment deals this year and plan to do 50 next year.”   (quoted in 2005)

Hard money lenders fill a niche in mortgage lending, helping consumers who have specialized needs.  They can be found all over the United States and the world. .

Memphis Investors Group   www.memphisinvestors.com

HomeVestors (Don & Holly Swogger) www.pleaseclose.com/Holldongroup

J. Garner, Mortgage Officer
Evolve Bank & Trust
www.MoneyShoppe.NET

Coming In Within Budget On Real Estate Flooring Project

He was a high echelon real estate broker with a high class office building that was sorely in need of carpet quick. The prospective tenant was almost in the bag. The pressure was mounting to complete the renovation by the drop dead time limit and within budget. He stood in the entrance hall looking at bare concrete floors, as the echo of his cell phone ringing echoed off the empty walls. The call was from his interior decorator. He let it go to voicemail. He could still hear her reminding him about the high quality, well-designed carpet that would look nice and hold up in heavy traffic in the hallway. But the price—the price was sending him tumbling over the budget. Stuffing the cell phone in the pocket of his blazer, his fingers fumbled across a folded advertising flier. Pulling open the folds, he saw an ad that promised expert flooring advice and flooring products at wholesale prices. Little did he know that he was about to meet his flooring champion, Gwen Christensen of Builder’s Floors and Interiors. (more) Gwen Christensen answered his call and offered to come over to the office building that very day. “She sounds like she may be able to find the same quality carpet for less, and she seems to understand what I want. I am feeling better already,” he thought to himself. Gwen listened to Mr. Broker’s wants and the decorator’s suggestions, inspected the area where the carpet would be installed, and begin searching for the same quality carpet for a better price. With her vast knowledge of flooring products she found a Staylock carpet that would not ravel at the seams on high traffic areas. The interior decorator’s flooring company was charging $32.95 per yard. Gwen came in at $23.95 per yard, saving Mr. Broker $9 per yard. Once the decorator was satisfied with the design, everyone was happy and within budget. Do you need carpet, vinyl, or tile? Would you like free expert advice like Mr. Broker that will give you the best quality carpet, made to last for its location at the best price you can find? Visit Gwen Christensen at Builder’s Floors and Interiors 3085 Stage Post Bartlett, TN 38133 (901) 382-2155 or go online www.buildersfloorsandinteriors.com Blog post by Jo Garner, Mortgage Loan Officer Evolve Bank & Trust (901) 482-0354 jogarner@mindspring.com

Wouldn’t you agree that it is easier to win at a game when you know the rules?   Once you know the rules, you can plan your offensive and defensive strategies to get to the goal faster.  A mortgage originator’s game plan takes him to the goal of getting loans approved quicker and with the least amount of resistance. Read the rest of this entry »

Real Estate and Mortgage Financing Updates for Purchase or Refinance 2-19-11

From Jo Garner, Mortgage Loan Officer   (901) 482-0354 www.MoneyShoppe.NET

(1) www.cnn.com  Mortgage-backed securities are back, but Moody’s, Standard & Poor’s, and Fitch are approaching their job rating them with very different tactics. More

(2)  www.cnn.com Mortgage bankers says borrowers with at least one payment past due down to the lowest level since 2008. More

(3) www.cnn.com The Obama administration on Friday officially unveiled its plan to remake the mortgage market and reduce the government’s role in housing finance by winding down Fannie Mae and Freddie Mac. The highly anticipated “white paper” outlines steps the administration says will help draw private capital back into the mortgage market, curb unfair lending practices and make federal support for borrowers more targeted.

(Send in your comments and suggestions to www.mortgageloansblog on the topic of Phasing out Fannie Mae and Freddie Mac. )

(4) www.bankrate.com Mortgages fall back after previous gain. Mortgage interest rates backed off a bit this week in the aftermath of a steep run-up that began a month ago and had continued through the week before. Rates remained higher, but “improved somewhat” compared with a week ago, says Jim Sahnger, a mortgage consultant at FBC Mortgage in Jupiter, Fla. The benchmark 30-year fixed-rate mortgage fell 7 basis points this week, to 5.16 percent. The benchmark 15-year fixed-rate mortgage fell 5 basis points, to 4.43 percent. The benchmark 5/1 adjustable-rate mortgage swam upstream, rising 4 basis points, to 4.05 percent. The benchmark 30-year jumbo fell 1 basis point, to 5.73 percent.

Where do YOU see mortgage rates heading and what information leads you to believe the trend?  Comment on www.mortgageloansblog.com

 (5) www.mortgagebankers.com Quote from MBA:  “We are gratified to see that one of the concepts they articulate closely tracks MBA’s proposal, released eighteen months ago, that visualizes a workable, commonsense system driven by private capital.  Our proposal envisions an explicit, but limited, government guarantee of lower-risk mortgage-backed securities.  The guarantee would be paid for by fees used to build a fund to protect taxpayers.  We continue to believe that this is the most prudent approach, one that places the primary risk on private investors and ensures sufficient liquidity during times of economic stress in order to provide affordable mortgage finance in all types of mortgage markets.  Our proposal directly addresses the problems that caused the failure of the Fannie Mae/Freddie Mac system.”

What are some specific concerns you have with the eventual change in mortgage secondary marketing?   What do you see good or bad about these changes.  Comment on www.mortgageloansblog.com