Avoid MI - Get a HELOC

We can now help borrowers who are putting down 10% avoid Mortgage Insurance by helping them qualify for a 80/10/10 Combo Loan.

   80% of the Sales Price - 1st Mortgage
   10% of the Sales Price - Home Equity Line of Credit (Fixed or Variable)
   10% of the Sales Price - Down Payment

This will definitely help borrowers who would normally be in a JUMBO loan range (loans > $417,000 in Utah County). 

Now you can purchase a home for up to $833,333 by doing a 1st Mortgage for $417,000 and getting a 2nd Mortgage for $333,000 - down payment of 10%, or $83,333, would be required.

A few more details:

• Not all borrowers will qualify
• 700 Mid-Score for Primary Wage Earner Required
• Debt Ratio up to 38/45% of Gross Income
• HELOC has 10-yr Draw, 20-yr repayment, 30-yr term
• 30-yr amortization for qualifying
• Condos and Town Homes: 89.99% for purchase / 84.99% for refinances; 75% owner occupancy required
• $50 annual fee
• Appraisal desktop review may be necessary

Call me at (801) 901-8490 and I'll walk you through each scenario to see what options are best for your individual circumstances.

Today the FOMC announced that it will continue purchasing $85 Billion of Bonds for at least one more month while it awaits more evidence that the economy is strengthening before it begins tapering off its Quantitative Easing (QE3) program.

Since the program began in 2008 the US Government has purchase approximately $3 Trillion of its own debt in efforts to stabilize the housing market and in turn the economy.

The FED expects to begin tapering off soon and end the program entirely by the end of 2014.  

What does this mean for you?

If you have been putting off refinancing, purchasing a move-up home, or looking into rental real estate - you've been given at least another month to re-consider before rates tick up as anticipated.

Contact us with any questions or scenarios you'd like to consider but just haven't fully explored yet.  We are always available to help you and your friends and family.

Call (801) 901-8490direct or email curtis@curtisprice.com for a fast response TODAY!

Underwater?

Home Affordable Refinance Program - HARP II

With the new Home Affordable Refinance Program (HARP) loan, you may be able to refinance no matter how upside-down your mortgage is!

Are you worried about making your payments? Would you like to have more cash in your pocket every month? Do you want to try to pay off your loan quicker?

Freddie Mac and Fannie Mae have adopted changes to the Home Affordable Refinance Program (HARP) and you may be eligible to take advantage of these changes. If you currently have a mortgage held by Fannie Mae or Freddie Mac, the HARP II refinance loan can help you lower your interest rate, decrease your monthly payments and help you start turning your finances around.

• Appraisals may be waived
  
• No LTV/CLTV restrictions on fixed-rate loans of 30 years or less
  
• Only 620 FICO required
  
• Loan was sold to Fannie or Freddie before June 1, 2009

If your mortgage is owned or guaranteed by either Freddie Mac or Fannie Mae, you may be eligible to refinance your mortgage under the enhanced and expanded provisions of HARP. The refinance must benefit you in one of four ways:

• Reduction in the borrower's monthly principal and interest payment
  
• Reduction in the interest rate
  
• Reduction in the amortization term
  
• Movement to a more stable product (i.e., interest-only to fully amortizing, ARM to fixed, 30-year to 15-year, etc.)

Call (801) 901-8490 today 

HUD $100 Down Program

Key Points to Consider:

1. This program will run through October 2012.

2. Must be Owner-Occupied Home.

3. Earnest Money Requirement (< $50,000 sales price) = $500 / (> $50,001 sales price) = $1,000.

4. Earnest Money must be in the form of a cashier's check or money order, made out to the Department of Housing and Urban Development.

5. Seller can pay for up to 3% of the sales price toward your closing costs.

6. HUD Home Search Site.

7. Normal FHA approval is required.

8. The $100 down payment incentive is only available if the purchase price of the home is equal or less than the appraised value of the home. If you have an accepted bid for over the appraised value of the home you must bring the difference as down payment to the closing. In other words, don’t over bid.

9. The $100 down incentive must be on the executed contract. That means you have to specifically request the incentive.

10. FHA 203k loans CAN be used with $100 down homes.

Why Are Mortgages For GOOD Borrowers Going to Get More Expensive??

If you are going to buy a house or refinance your own home, or if you know someone who is going to buy or refinance (I think we all fit into one of these 2 categories)... The rules going into effect April 1st are actually going to affect EVERY ONE.

FHA Loans Get Expensive

One of the benefits of FHA loans over the years was the low monthly mortgage insurance premiums required. Well, that's changing yet again. The monthly Mortgage Insurace was raised last year from 0.55% to 0.9% and starting with case #'s pulled in April of 2011 it will go up again to 1.15%

What does this mean for someone buying a home?
Say you want a home for $250,000 - FHA requires a down payment of 3.5% and the monthly mortgage insurance will go up from $184.64 per month (at 0.90% factor) to $231.20 (at a 1.15% factor)per month.

The net result is that borrowers will pay $46.56 more per month for the same loan.

I'm not arguing that the premium shouldn't be higher. After all, FHA is the only institution that provides the kind of financing they do at the low rates they offer. If these loans made sense, banks would already be doing them. The fact of the matter is they don't make sense - therefore, the government is the only "bank" doing them.

What I find frustrating is that the government is simultaneously claiming to do all they can to fix the housing mess, but they raise the mortgage insurance on FHA loans which comprise a LARGE part of all lons being closed these days.

Why don't they get to work and fix the "loan modification" scham that's funneled billions from government coffers and produced minimal results.

Please post any comments below!!

Frank Dodd Legislation

Everything changes in the mortgage industry on April 1st… AGAIN!!!

1) Loan Officers will be under contract to make the same amount on every loan.
(i.e. they will make 1%, or 2.5% or 3% or whatever they agree to on EVERY loan).

2) Will not have the ability to give Lender Credits at closing… but as Branch Managers we can.

3) Compensation can only come from either Borrower or Lender... not both (most of the time the compensation will come from the lender… so either you will have lower closing costs and higher rates, or lower rates and higher closing costs).

This could become a BIG issue at closing. Let's say a loan officer is purchasing a home with a loan of $100,000 and he is one a 1% contract for his compensation ($100,000 x 1% = $1,000).

Now, suppose the borrower is planning on bringing in $5,000 at closing. They have an emergency and only have $4,500 available when they go to close on their new home. Under normal circumstances a loan officer could just give them a credit for $500 to get the loan to go through, so their agent can be paid and they can make a little.

Since the loan officer is under contract to make 1%, the company he works for is required by contract to still pay him 1% or $1,000 on that transaction even though he would be fine only making $500. He still must make $1,000 or his company is violating the new Dodd-Frank law.




They are such geniuses, all this will do is increase costs passed on to the consumer because the lenders are going to pad their profits for contingencies like this and pass it along to the consumer. I guess the real winner in all this are the banks... oh, and Frank and Dodd. You may have heard of Senator Dodd's "sweetheart" loan he got with Countrywide (huge lobby group). He lost all his paperwork and so did Countrywide, so no one really knows how he got the loan from them.

Politics at it's lowest. Brace yourselves because the housing recovery is now going to take a bit longer to recover from thanks to these 2 Yahoo's!!

What is "Split M.I.?"

All loans above a 80% Loan to Value have some kind of Mortgage Insurance. FHA loans charge 1% up front, and then 0.9% each year ($200,000 loan would be $1,800 or $150 per month). The only wait to avoide this with FHA is to put down at least 10% and do a 15 year loan, then you’d save the $150 per month but still be charged up front.

Conventional Loans have more options: Monthly / Split / All Up Front (a.k.a. Single Premium)

Let’s say a borrower is purchasing a home for $250,000 and they can put down 5% and has a 680 credit score and DU requirement of 30% Coverage. They have 3 different options for Mortgage Insurance:



As you can see borrowers have many choices when it comes to Mortgage Insurance options. As trusted mortgage professionals, Ben and I can help navegate them through the confusing options to help them find the best solution at the lowest cost.

Non-Arm's Length Transaction

An identity of interest transaction is a sales transaction between parties with family or business relationships.

The maximum LTV factor for identity of interest transactions on principal residences is restricted to 85 percent.

1) A family member purchases another family member's home as a principal residence. If the property is sold from one family member to another and is the seller's investment property, the maximum mortgage is the lesser of sales price or appraised value.

2) An employee of a builder purchases one of the builder's new homes or models as a principal residence.

3) A current tenant, including a family member tenant, purchases the property where he/she has rented for at least six months immediately predating the sales contract.

4) A corporation
a. transfers an employee to another location
b. purchases the employee's home, and
c. sells the home to another employee.

How we BUMP up your Credit Scores!!

Here's the latest video from our YouTube Channel for buyer's. Feel free to share the link on Facebook or embed the video on yoursite. - CP



You can also direct them here to my YouTube Channel. I will be making several videos over the next few weeks on important topics your buyer's may find useful. Let me know if you have any suggestions.

New Housing Drops - 2 Builder Stocks Increase... HUH??

It's a strange reaction to say the least. The broad market is down because of more gloomy housing data. But the companies that are most directly tied to the health of the housing market are up?

It doesn't make a heck of a lot of sense. It may be a case of traders betting for the umpteenth time that this is finally a bottom for housing.

That's a mistake. Now that the tax credit for homebuyers has expired, it's difficult to imagine what can juice the real estate market again in the near-term.

So traders may be banking on the fact that the worst is really over for housing. But one fund manager who owns shares of Pulte said he's holding the stock for the long haul, not because he expects immediate improvement on the horizon.

Property Tax Notice

Utah County has started sending out property tax notices this past weekend. These notices can create confusion, and many property owners have questions about where these numbers come from and what this information means.

You may be confused at how your property value might go down, but your taxes stay the same (or even go up). The property taxes are calculated using a certified tax rate and the taxable value of each home and property. The tax rate is calculated based on adopted budgets of the various entities, while the property value is determined by a review of the property and current market data.

Between now and the last valuation period home prices have declined typically 5 to 9 percent. Owners should not be surprised if they notice a drop in value with no corresponding drop in taxes, given the process of how the tax rate is calculated.

Each tax entity (city) determines its own tax rate, and the Utah County Assessor’s Office determines property value. The Assessor's office has worked hard to consider valuation changes in neighborhoods and communities for the upcoming year, but residents should also be aware of the process to appeal their valuation notice.

Property owners who wish to appeal their notices must contact the Utah County Board of Equalization within 45 days from the date of their notice (click here for details). Owners will set an appointment for a hearing in an informal setting with a County real estate appraiser to reevaluate the property value.

I hope this helps!!!

Condo Approvals

Ben Bernanke's Comments Help Rates Improve

Strategic Foreclosures

(trend of 30-yr Bond)

Did you know 1/3 of all foreclosures are strategic defaults: where the borrowers can afford to make their payment, but chose to abandon the property in search of greener pastures? Fannie Mae announced plans to get tough with strategic defaults. Fannie said that borrowers who default when they are able to pay won’t be able to get another Fannie Mae loan for seven years. The current wait is five years. While that might sound like an empty threat, in an environment where Fannie Mae and Freddie Mac are providing most home financing, it may have some teeth.

Fannie also threatened to sue home owners who walk away from their home loans in states where such deficiency judgments are legal (and YES they are legal in Utah). The announcement attracted some criticism because of Fannie Mae's refusal so far to allow hard-pressed borrowers to negotiate a lowering of their principal amount, which is something lenders are now agreeing to after prodding by the federal government. Critics contend the company should try principal write-downs before it penalizes borrowers for choosing to walk away.

FICO Inc update

HUD REO $100 Down Loan

Con 30-yr Fixed - 4.5%
FHA 30-yr Fixed - 4.5%



HUD REO sales with $100 down payment incentive: HUD properties with the $100 down payment incentive will be permitted as follows:

1. The maximum loan amount after adding UFMIP may exceed 100% of the lower of the sales price or appraised value.

2. The maximum LTV with the inclusion of Repair Escrow is 110%.

3. Repair escrows are permitted (line 4 of sales contract indicates 203b with Repair Escrow).

4. The maximum amount of allowable repairs is $5000.

5. Maximum DTI 45% (DTI > 45% must have compensating factors plus a 2nd signatu e) regardless of AUS approval.

6. Where a discount on the sales price is being provided, the mortgage amount must be based on the lesser of the “as-is” value or the discounted sales price, not the contract sales price.

7. Follow 4155 guidance and HUD requirements.

8. Standard program only, fixed rate. ARMS not permitted.

$5,000 for down payment

Today’s Rates = Conventional: 4.625 % FHA: 4.50%

You may or may not know of a Utah County Grant program called Housing Services of Utah County. Their loan to own program has been very helpful for us over the years when funds are available. Here are details to help you know what your clients can and can't qualify for.

#1 Funds are limited: check http://housingservicesut.org/loantoown/ to see if funds are available.

Who Qualifies?
1. First Time Home Buyers
2. With Credit Score > 700, then DTI is 35% / 45%
3. With Credit Score > 650, then DTI is 33% / 43%
4. There can be no co-signers involved.
5. Borrowers must complete a Community Action Pre-Purchase Counseling Class ( which is free)

Income Limits

Family Size / Income Limit

1 / $35,200
2 / $40,250
3 / $45,250
4 / $50,300
5 / $54,300
6 / $58,350
7 / $62,350
8+ / $66,400

1. The client’s debt to income ratios meet HSUV guidelines (which is in the application packet)

Property Limits

1.Single Family Residence (single homes, condo’s, twinhomes etc. but no accessory apartments)
2.The purchase price of the home cannot exceed $ 232,305
3.Eligible Cities:
Orem
Lehi
Lindon
Payson
Pleasant Grove
Spanish Fork
Springville
Unincorporated Utah County (Rural farmland, not in an incorporated City)

4.If the home is NEWER than 30 years the client is eligible for $ 5,000 toward 2 the required down payment and the one time closing costs (does not include pre-paid items or reserves).
5.If the home is OLDER than 30 years the client is eligible for $ 15,000 which will pay for the one time closing costs (does not include pre-paid items or reserves) and the balance will go toward down payment.

Repayment

1. After the 1st 5 years the loan is forgiven at a rate of 20% per year until the end of the 10th year and the entire 0% interest loan is forgiven.
File goes through a loan committee and funds are awarded based on (a) availability and (b) need. In other words, just because a client may fit all the criteria funds could be awarded to a “more needy” applicant.

Time to Close

Process takes 2 to 3 weeks.

(share this link with your clients and have them call us if they have questions)

Only 41,000 new jobs from Private Sector

Click here for KSL's article

Looks like we'll have good mortgage rates for a while now that the numers show that of the 431,000 jobs last month but only 41,000 of those jobs were not government jobs. This shows that the economy isn't recover quite as fast as people would have hoped and investors are sticking to Mortgage Backed Securities again.

As a result, mortgage interest rates remain low at 4.5% for an FHA 30-yr Fixed Rate mortgage as of this morning.

One analyst from PIMCO said the US Economy is facing a "new normal" which means the recovery and economic future of the US will not rebound to the levels seen in the past 10 or 20 years.

We'll see what next months payroll shows.

Mortgage Minute 6-01 Credit Monitoring

We have already informed you of Fannie Mae’s “LQI” – Loan Quality Initiative which begins today where Conventional Mortgages will be double-checked just before closing on several areas. One worry comes from what could happen if credit scores change just before closing. Undoubtedly, there will be services spring up that offer you credit monitoring and there are many who actually do a good job, but buyer beware.

The pitch: The FTC is cracking down on sites that mislead people into thinking they're getting a free credit you lost your wallet. And even then, it doesn't stop someone from opening a new account in your name.

The only way to do that is by freezing your credit reports at all three bureaus through a service like TrustedID (typical cost: $20 to $40).



That will keep new lenders from looking at your reports and prevent accounts from being opened by anyone -- including you. The downside: To take out a loan, you'll have to pay $15 to unfreeze your reports.

The exception: If you have a financial goal (like buying a home) in the months ahead and want to know what actions boost your score as well as when it hits a certain threshold, Equifax's Score Watch may be worth the price.