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Wednesday, February 24, 2010

FHA nixes the 5% down proposition

HUD had been considering a change to the down payment requirement for the increasingly popular FHA loan. Currently at 3.5%, they were considering raising the down payment to 5%. Perhaps realizing that this would hurt an already fragile housing market and slow the recovery, they decided against this idea.

They are, however, considering another change which would increase the annual mortgage insurance premium to .85%. Currently the rate is .55% for loans over 90% LTV, which is the majority of FHA loans. Recently, the up-front mortgage insurance premium was increased from 1.75% to 2.25%.

If you are interested in a home that doesn't qualify for FHA financing because it needs repairs, the FHA 203(k) rehab loan is a great way to go. The streamline version allows for up to $35,000 in repairs and the full 203(k) allows for repairs up to the total FHA loan limit. Additional benefits may be realized because there may be fewer people bidding on a home that needs repairs and the improvements that are done to the home would customize that home to the buyer's taste.

I'd love to know your thoughts on this post or any of my other posts - agree, disagree, or indifferent. If you have any questions, please feel free to contact me by checking out my website at

Friday, February 19, 2010

Tick tock tick tock tick tock - that's right, the time is running out on the free money the government is offering to first-time home buyers as well as move-up buyers. If you want to qualify for the homebuyer tax credit (up to $8000 of FREE money) then you need to be in contract by April 30, 2010 and you need to close by June 30, 2010. Don't miss this opportunity to get a house at a great price with great rates and have the government 1) reimburse you for all or most of your down payment, or 2) pay for some new appliances or furniture, or 3) fund your Roth IRA.

If you are in the Las Vegas area and would like your own password-protect home search website with real-time access to the MLS and lots of other great information like school information, shopping, satellite imagery and a host of other great features for free, please email me and I'll be happy to contact you to get you set up - no other home search website compares to the Home Buyers' Scouting Report.

If you or a friend are renting / leasing a home from an individual and that home gets foreclosed, the lender is obligated to honor the lease. Make sure you are protected by 1) having a lease and 2) paying your rent on time and with either a check or money order to prove your on-time payments. This way, if the lender wants to get you out, they will more than likely have to incentivize you to move - that usually means a nice chunk of cash!!

Finally, the new lending laws that HUD implemented on January 1, 2010 provide for the borrower to get a credit toward closing costs via the YSP / SRP that brokers and bankers get. If you or a friend are in the need of a mortgage, make sure that you understand the complete workings of the new HUD / GFE combo by using a reputable, competent mortgage professional who can fully explain everything in great detail so that you will fully understand all of your options.

I'd love to get your ideas, thoughts, comments, etc. Please feel free to leave them by clicking on the comment link. Have a great weekend.

Thursday, February 11, 2010

Game on...sort of

Typically I write stuff that pertains to the mortgage industry in an effort to keep my clients and Realtor partners informed of things that might impact them. Today, however, is a different story since I am writing about what I love to do when I am not working as a Certified Mortgage Planner / Loan Officer.

There are lots of things I love: 1) family, 2) music, 3) sports, etc. However, this weekend I'll be traveling with my family to Palm Springs to participate in the Palm Springs Century ride. I've been doing a fair amount of riding over the last several months and I've always had an affinity for riding but I've never done a century ride. For those who don't know what that is, it's a ride of 100 miles or more. The ride in Palm Springs is 102 miles and the weather is supposed to be wonderful. My goal is to do it in less than 6 hours but I really hope to average about 18 miles per hour which would put me across the finish line at 5 hours 40 minutes. Since this is a first, I can't say that I have any real idea of how I'll do. I can tell you that I'm committed to doing my second one to raise money for the American Diabetes Association - this ride will take place in Las Vegas in the beginning of April. My hope is that I can get many of the Realtors I work with (and anyone else who wants to) to contribute to the ADA.

At any rate, the Palm Springs Century starts at 7:00 a.m. on Saturday morning which means I hope to be finishing sometime between 12:30 and 1:00. If for some reason you happen to be in the area, I'd love to see you. Otherwise, you may look at your clock around 1:00 and think that I have hopefully finished the ride and have dismounted under my own power:)

I'll be back next week with a report on how it went as well as more insight into the mortgage / real estate industries. Ciao for now.

Friday, February 5, 2010

Just be honest with us, please.

The media is at it again: trying to put a positive spin on the jobs numbers. The facts are these: 1) unemployment did drop from 10% to 9.7% which is good on the surface; 2) initial jobless claims unexpectedly rose 8,000 from the previous month's figures to a seasonally adjusted 480,000 - experts expected 460,000; 3) a person is no longer counted in the unemployment statistics after six months; and 4) six months ago the initial jobless claims number was north of 600,000 so it makes sense that since that number falls off and is replaced with a lower number, the unemployment rate would fall.

Economists estimate that the real unemployment rate is probably above 17%. This figure includes those who are counted in the unemployment statistics as well as those who have fallen off the chart because they filed for unemployment insurance more than six months ago. It also includes under-employed people - those who need to work full time but have had their hours cut back to part-time, and many of those people have also lost their benefits (many of our local casino workers are in this situation). The estimate also includes people who were not employed and would like to get a job but can't - my wife, for instance.

While it's important to be positive and to act in a manner that will help our country - spend if you need something, don't hoard your money - it is also important for the media to report the truth. Too many people in our country take what our media says as gospel. When they distort the truth, as they have since the credit markets froze in July of 2007, they will lose all credibility when the citizens of our country learn the truth. Then it will be like the boy who cried wolf - when the media really needs to get a message out, no one will listen because they weren't honest with us all the time.

I'd love to get your comments, ideas, and opinions. Please feel free to leave any of these by clicking on the "comment" link.

Thursday, February 4, 2010

Calling all cars...please respond to a CRASH

I'm a pretty positive guy and I like to try to find the silver lining in the dark clouds. Sometimes it's pretty tough, though. Today, for instance, we see that there was an increase in the number of initial jobless claims. In fact, it is now estimated that this recession (are we still in it or are we out - I'll get to that in a minute) will probably cost us another 1,000,000 jobs before it's all said and done. As for the recession, there is a group of economists that officially declare whether the recession is over and they have not done that yet.

As for me, I think it's pretty clear that we are still in it despite the recent GDP reading of close to 6% annual growth. I personally think that figure was (highly) skewed by the bailout money and the holidays. However, the silver lining is that we are more than 2.5 years into the crisis that began the recession when the credit markets froze and the housing bubble popped. Each day we are in it is one day closer to getting out of it.

On an even more positive note, the free money from the government that is the homebuyer tax credit is still in play - at least until April 30th for getting a house under contract and June 30th to close on the house. Free money is a great thing and the more people buy homes and use that money for stuff for their homes (and perhaps to invest a little for retirement), the better we are going to be relative to getting out of the recession. There is no simple solution to a complex problem; ultimately we will all be hurt by this and make sacrifices (many of us already have). But we are a resilient country and our citizens are behind that resiliency. I believe that sooner rather than later we will right this ship and get back on the path to growth.

I'd love to hear your comments and ideas. Feel free to leave them.