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If you know a loan officer, I am sure you have heard him complain about the new Good Faith Estimates…if you don’t believe, just ask my friends, family and co-workers!! It is a lot of what people have said, very detailed, even more complicated when every bank has its own addition or twist, extra requirement. It is now 3 pages, and any loan originated after 01/01/2010 is required to use the new version. There many boxes and sections that ask for specific fees for all charges, including YSP.... Read Full Post

Fannie Mae has new underwriting guidelines that will go into effect on 12/12/2009. The changes have been documented in their announcements over the past few months. I will try to go over some of the most important changes. For a copy of the Release Notes, please contact me, and I can email them you. The biggest change will be the max debt ratio will now be 45%. There is a little flexibility to go to 50% debt ratio, with strong compensating factors. This change will not apply to DU refi plus f... Read Full Post

I know that Fannie and Freddie say they are maxing 4 mortgages to individual borrowers, but there are portfolio banks that will allow you to go to more than 4 mortgages. Portfolio banks are banks that do not sell their loans to Fannie or Freddie. That allows them to set their own guidelines, and limits. We have one portfolio bank that will let a borrower own up to 10 properties. You still need to qualify, and the rates are very competitive, so it’s a great option for those investors with mu... Read Full Post

If you are looking to buy in DC, please be aware of the real estate taxes on vacant properties. The DC government raises the real estate taxes drastically on vacant properties. The reason being, is that they want the owners to either sell them or rent them, therefore minimizing the over vacant properties in the DC and hurting home values. This applies to all residential homes. The DC taxes are usually based on the sales price, minus the Homestead exemption (which is $67,500), times the rate o... Read Full Post

There are some areas that have a high number of manufactures homes, and borrowers who are either looking to buy or refinance these types of homes, should know some of the conditions and documents that banks will ask for. First, a great program for manufactured homes is FHA. With FHA you can go to max financing which is 96.5% loan-to-value for a purchase or a rate and term refi. On a cash-out, you will be maxed at 85%. A lot of banks will also go down to a low loan amount, I have seen as low a... Read Full Post

Right now buyers believe that buying a short sale home is a great bargain, and for the most part, they are wrong. When an offer is made on a short sale, the banks are taking up to 120 days to approve it. As a buyer, you need to wait for that third party approval, and therefore you cannot lock a rate until then. You are taking a big risk by missing out on historically low rates. What potential buyers should be looking at, is homes for sale by individual owners. You can still get a great bargai... Read Full Post

A great investment opportunity that buyers are over-looking are multi-unit homes. Multi-units are considered 1-4 unit buildings. Anything over 4 units is considered a commercial property. You can purchase these properties using an FHA loan. FHA offers awesome advantages. The first being a 3.5% down payment. The second being, on 3-4 multi-units, you can use projected rental income on the remaining units, you will NOT be occupying. This will be calculated by, “The appraiser’s estimate for f... Read Full Post

In this very strict market, underwriters are flagging everything. One item I have seen a lot of recently is customers turning in bank print-outs. There is nothing wrong with them, as long as they have a few key items. If they can printed on letterhead, that would be great. If not, please make sure you have a bank representative stamp, date and sign it the print-out. Also, please make sure they circle key information, like your account number, or your SS number. If you are using the print out ... Read Full Post

A lot of self-employed borrowers don’t pay them selves a salary and only take draws. If you have an S corporation, you need to pay yourself a reasonable salary it is required per their rules. If you only take out draws, as an S Corporation, and you get audited, you will have a lot of problems with the IRS, which no one wants. Also, when you pay yourself the reasonable salary, it must be documented. If you transfer money from a business account to a checking account, that will not suffice. Y... Read Full Post

On November 18th, FHA will be implementing new guidelines. Here are some of the highlights. Also, for the complete FHA announcement, please read the, FHA Streamline letter ML-09-32. On Streamlines, there will be a 6 month payment seasoning period required. If you have had your loan less than 12 months, you cannot have any late payments. If you have had your FHA loan over 12 months, “you cannot have more than one 30-day late payment in the preceding 12 months, AND have made all current payme... Read Full Post