by Brian Short, CMC, CRMS, GMA
Tennessee Mortgage Professional, Brian Short, demonstrates why it is important for mortgage loan customers to use a mortgage professional who will not be simply guessing when it comes to very important final numbers on any mortgage transaction. www.ProMortgageMatters.com
Leave a Comment » | 
Closing costs, Monthly payment, Professionalism in the Mortgage Industry | Tagged: Brian Short, closing costs, down-payment, home purchase, mortgage professional, Professional Mortgage Moment, Professionalism in the Mortgage Industry | 
Permalink
Posted by Web Administrator
Last Thursday, just before the long Memorial Day weekend marking the beginning of the 2011 summer, the US Department of Housing and Urban Development (HUD) released a 23 page proposal outlining loan limit decreases in 669 US counties – 13 of them in Tennessee and all of these located in middle Tennessee.
Unless Congress prohibits these proposals, beginning October 1, 2011, each of these 13 counties, including Cannon, Cheatham, Davidson, Dickson, Hickman, Macon, Robertson, Rutherford, Smith, Sumner, Trousdale, Williamson, Wilson, will see their maximum FHA loan limit decrease $39,200 to a new lower maximum FHA loan limit of $393,300.
Counties Affected by Possible Decrease in FHA Loan Limits for Loans
The current FHA maximum loan limit in these 13 counties was set at $432,500 in 2008 as a part of the Housing and Economic and Recovery Act during the waning days of the Bush administration in an attempt to stabilize the fragile housing and credit industries.
This 9% decrease in FHA maximum loan limits in middle Tennessee will affect less than .5% of all of the FHA loans being originated in these middle Tennessee counties. HUD decision to lower these maximum loan limits is an attempt to ward off the Republican critics in the US House of Representatives who are proposing changes to the FHA mortgage insurance program to limit the expansion of the risk of taxpayer supported programs in hope that private players and investors will re-enter the mortgage industry to replace what the Federal Government discontinues subsidizing.
Last year 32,126 FHA loans were closed in these 13 middle Tennessee counties and the new decrease in loan limits would have affected 138 of those transactions. The argument could be made that Tennesseans borrowing more than $393,300 to buy or refinance a house would have been able to use other loan programs or that other non-government programs would be developed if FHA would move out of this particular high-end market. Statistically, these higher-end mortgages have preformed much better than the lower-end mortgages but HUD would argue that these loans are not part of their stated mission to target “lower and middle-income borrowers” when they are using taxpayer money to operate a program insuring home mortgages at more than 150% higher than the Area Median House Price.
What is the expected outcome of such a move if Congress does not block these proposals for home buyers in Tennessee?
Minimal. Most first-time home buyers or home buyers with a scarred credit profile are not buying homes $400,000+ homes with only a 3.5% down payment as currently required by HUD for FHA insured loans.
The initial potential panic caused by news reports of such proposals may cause a handful of buyers to get off the fence to get approved for their high-end FHA insured mortgage in order to beat the October 1, 2011 deadline but because so few Tennesseans will be affected by this proposal, only 138 in 2010, the Tennessee Congressional Delegation would likely not support any legislation thwarting efforts by HUD to continue to solidify the government supported mortgage insurance program – especially if these changes will affect only a few wealthy Tennessee home buyers.
2 Comments | Buying a new home, Federal Government Intervention, FHA Loan Limits | Tagged: Brian Short, down-payment, FHA, First-time home buyers, home ownership, housing market, mortgage, Mortgage industry, refinance | Permalink
Posted by Web Administrator
Sgt. Joe Friday (Jack Webb) from 50's & 60's hit TV show Dragnet
Buying a home has always been a big decision. But for some people today it’s a difficult decision because of all the conflicting information coming from the media. To make matters worse, that information is often outdated…or even inaccurate.
If you know anyone who is thinking of purchasing a home this year, please share the following information with them:
FACT 1. Mortgage options are still plentiful for borrowers with good credit scores and documented income. All assets & income will need to be fully documented in most all cases for the past 2 years.
FACT 2. There are still programs available, like FHA, that allow as little as 3.5% down payment, and many others that allow less than 20% down. VA Loans still allow an eligible Veteran to buy a house up to $417,000 with $0 down payment!
FACT 3. Jumbo mortgages are still available on loan amounts even in excess of $2 million dollars.
FACT 4. Vacation/second home financing can be obtained with as little as 25% down, even with jumbo mortgages.
FACT 5. There are FHA Renovation (203k) Mortgages available which can be used to update or repair an existing home. Small projects (under $35,000) can usually be done in such a way where the homeowner or buyer can use up to one-half of this money upfront to purchase materials and then pay the contractor once the project is completed.
FACT 6. Senior citizens can use their current equity in their home and actually relocate and buy a house and have NO MONTHLY PAYMENT on their new home for the REST OF THEIR LIVES. The FHA Reverse (Home Equity Conversion) Mortgage can be used by those 62 years of age or older to refinance their currnet home or buy their idea retirement home.
FACT 7. As of today, rates on most mortgages are still at historically low levels when compared to the last 30 years. Every indication is that rates will likely begin to increase before the end of 2011 – so delay if low interest rates are desired.
FACT 8. Most homes are selling at a big discount relative to 5 years ago.
Make sure your friends and family know the facts! Owning the home of their dreams may not be as hard as they think. Send your friends and family this link and let them know I would be happy to meet with them and help them determine what options are available in their personal situation.
Getting pre-approved for a mortgage BEFORE speaking to a Realtor could help make them a much stronger buyer in the eyes of a seller.
If there’s anyway I can lend a hand, I’ll be happy to do so. Thanks for your help and continued support, and if you have any questions about your own situation call or email me anytime!
Leave a Comment » | Buying a new home, College Graduates buying houses, New Rules for Refinancing, Reviving the Housing Industry | Tagged: Brian Short, credit score, debt, down-payment, FHA, FHA 203(K), First-time home buyers, home ownership, home purchase, low interest rates, rehabilitation loan | Permalink
Posted by Web Administrator
by Brian Short, CMC, CRMS, GMA – Certified Mortgage Professional
The US Senate just approved another $2 Billion for the auto industry’s stimulus program referred to as “Cash for Clunkers” after the first $1 Billion was used up last week in only 3 days. It seems, at first glance, that this auto industry bail-out program might be having
some positive affect on another ailing US industry. At least the players are allowing the program to work. The Feds are giving away money (whether you agree with this approach or not), the dealers are accepting the qualifying vehicles and giving a $4,500 trade-in allowance toward a new qualifying car, and US consumers are using up the allowed funds to work this program.
The housing industry has witness many attempts by the Feds to “jump-start” the stalled industry for the past 12-18 months. One of the first was the FHA Secure Program with “impossible to qualify” underwriting guidelines for those who had made late payments on their adjustable mortgages. Most of the national wholesalers were not participating and none of the FHA participating lenders would approve these borrowers for this program.
The Troubled Assets Recovery Program (TARP) initiated by then Treasury Secretary Henry Paulson and President Bush and expanded by the Obama administration attempted to infuse cash into the ailing national and regional banks so they would be more willing to free up credit to business owners, home owners and borrowers. However, with the expansion of this TARP program came the announcement that the Feds could jump into the books of any bank who received these funds to determine if they were “financially solvent enough” to avoid a federal government take over. Some banks refused the money, others returned it and most who received it held on to it to bolster their bottom line figures. Either way, no credit was freed up and no home owners, home buyers, home builders or Real Estate industry players have received any relief from such a misguided and over funded Federal effort.
The recent announcement by President Obama to design a federal loan modification program has been met with delays and unresponsiveness by Bank of America and Well Fargo – the nation’s two largest remaining banks holding the largest number of servicing rights on most of America’s residential mortgages. On the one hand, these banks appear very unwilling to work with their customers to write down loan balances or interest rates to keep the existing home owner in the home, and yet on the other hand, they are all saying that they do not want any more foreclosed properties and the process of foreclosing on US homes is causing home values to dive bomb unlike anything we have ever experienced.
The one program still being promoted – “$8,000 tax credit of first-time homebuyers” – is far too limited in its scope. This author was calling for this approach long before the Feds rolled out their version. However, we were calling for a tax credit for any down-payment and closing costs used to buy a house by ANY buyer. Only this breadth of a program which would include Real Estate investors, buyers of second homes and “move-up” or “move-down” buyers will truly have any effect of the most critical industry in our downward spiraling US economy.
Again, I am calling for the inclusion of those solid borrowers, experienced buyers and business owners to be enticed to get off the sidelines and risk THEIR capital (rather than the future Federal tax revenues for generations to come!) to help get the housing industry out of the dumps.
The average first-time homebuyer is still too scared and too inexperienced to be a major player in rescuing the ailing housing industry. They are fearing for their own job security and seeing house prices plummet causes them to be squeamish about investing what little cash they can scrape together to buy something which may be worth less than what they paid in 2-3 years when they might be ready to sell and buy something bigger or in a different location. This group of buyers does not have the “staying power” to be the key to a housing industry recovery. Bring in the Pros! We need the seasoned home buyers and investors to be encouraged to buy up the housing inventory busting at the seams so builders will be enticed to start building again.
In the meantime, those who desire to take advantage of the $8,000 tax credit have less than 4 months to get their first-time home purchase selected, financed and closed. This is not much time in light of heightened underwriting requirements, appraisal delays and turn times in wholesale approval processes. Those who can benefit from this limited time tax credit must move quickly to get the benefit of the $8,000 “give-away” by the Feds.
If you or someone you know has not owned a house in the past 3 years and desire to buy a house before the end of the year to take advantage of this $8,000 refund of all tax withholdings during 2009 and an outright rebate of whatever the difference is between what has been withheld and $8,000, they must get into the game quickly by contacting a Certified Mortgage Professional to get pre-qualified before going out to shop for houses with a Realtor. The clock is ticking. There is no promise that the Feds will extend or revamp this program once it expires on December 1, 2009, regardless of how many housing experts, like this author, call for a program which will really help the struggling housing industry. Sellers are motivated to sell, there is a record-breaking level of houses included in the existing home inventory, and Realtors and Certified Mortgage Professionals have time to give a first-time buyer the time and attention they need to make a great choice to get into (or back into) the housing market.
The good news is – no “clunker” trade-in is required to participate in this cash give-away. You can buy anything you want and still get the $8,000 tax credit – a cottage, a castle or a condo! COME ON DOWN! You’re already a winner!
Leave a Comment » | $8000 tax credit, Federal Government Intervention, Professionalism in the Mortgage Industry, Reviving the Housing Industry | Tagged: Bank of America, Brian Short, Bush, Cash for Clunkers, certified mortgage professional, down-payment, FHA Secure, First-time home buyers, Henry Paulson, Obama, Real Estate investors, TARP, US Senate, Wells Fargo | Permalink
Posted by Web Administrator
-> Sales price
-> Appraised value
-> Loan amount
-> Borrower’s employment status and history
-> Credit scores and payment history
-> Amount and source of down-payment
-> Date of closing
-> Immigration or citizenship status of the borrower
-> The housing type and location (Single family dwelling, Duplex, Condo, Townhouse, PUD, suburban, rural, urban, etc.)
-> The county where the home is located
-> Mortgage Interest Rate
-> The Term (length) of the Loan
-> The Title Company being used to close the loan
I have worked for several mortgage companies during my mortgage career and even owned my own company for 5 years. I know that some “loan guys” will “low-ball” the initial estimate, only to pull out the “surprise” at the closing table when your options for making any changes are very limited. Of the 21 separate line-item fees on the “Good Faith Estimate” I give to my borrowers when they sign their loan application forms and disclosures, only one of those fees is the same for every loan and is not dependent on any of the variables listed above.
Mortgage interest rates change daily (sometime, even more often!). I could simply print off a “Good Faith Estimate” with made up numbers as some customers request (as other ”loan guys” may do) but it will not be accurate because of all of these variables I have mentioned. That process of collecting “Good Faith Estimates” prior to having all of the above variables identified will very time-consuming and wasted effort by the borrower and “loan guys” passing out worthless forms with inaccurate numbers.
My goal is to take the worry and uncertainty out of the process of originating, processing, underwriting and closing the loan. I help guide my borrowers through their negotiations with their seller by providing honest numbers as they become available rather than simply making up numbers to get “my hook set”.
I have been in the business for over 11 years and nearly 100% of my business comes from referral and repeat business. A businessman can not build that kind of business by being a con-man, cheating others or participating in the bait-and-switch tactics that have riddled this industry for years.
This helps my my borrowers understand how I have built my business and how I provide a level of confidence and professionalism which will make my borrower’s Real Estate purchase a very smooth and cost effective transaction over the next.
So, you ask, how should I select the Mortgage Professional to close my loan for me? I’m glad you asked. Allow me to give you a few guidelines for starters:
1. Choose a Mortgage Professional who is EXPERIENCED. Was he selling shoes or washing cars last week and then some buddy of his talked him into “trying out the mortgage business”? Does he really know what he’s doing? Has he been originating mortgage for 5-10 years? Does he do this full-time or this just a hobby or part-time gig?
2. Choose a Mortgage Professional who is CERTIFIED. Has proven to anyone that he knows the laws, the process, the programs and theory and mechanics behind the mortgage industry. Has he taken courses and exams to measure his competency? Is his certification a national designation? Is his certification from a professional association who can objectively measure and monitor his expertise or from some mail-order outfit looking to make few bucks?
3. Choose a Mortgage Professional with a GOOD REPUTATION. Is your selection a true professional who is respected and well-known in his industry. Who knows him and what kind of work he does? Who has ever closed a loan with him? Who can speak for his level of trustworthiness, honesty and attention to detail? What do you know of his character and personality?
4. Choose a Mortgage Professional who is a PROFESSIONAL. Does your choice know the market, the industry, the community, the history, the trends and your desires? Is he a member of his professional association? Has he been awarded and recognized by his peers and fellow business associates for his contribution to the industry and community?
During the month that your loan is supposed to close it is the most important transaction in your Mortgage Professional’s office. “Getting it cheap” doesn’t mean much when your “loan guy” drops the ball and makes a mess of the whole deal simply because he has “never seen anything like this before.” That stack of bogus ”Good Faith Estimates” collected 30-60 days prior to your closing will mean very little when you find out that returning phone calls, diligently following up on underwriting conditions, and working long hours to insure that all of the bases are covered on your deal are not his priority or part of his work ethic.
Paper is cheap, and ink toner to print fictitious loan estimates is even cheaper. Experience, Certification, a Good Reputation and Professionalism are priceless life-long attributes and qualities you want in your Mortgage Professional. Leave the spreading of such worthless papers to those lying, low-balling, bait-n-switching, short-termers who do not deserve to work with someone like you who, understandably, expect it to get done right the first time.
1 Comment | Professionalism in the Mortgage Industry | Tagged: appraised value, Brian Short, Certified Mortgage Consultant, certified mortgage professional, Certified Residential Mortgage Specialist, condo, credit score, down-payment, duplex, employment, experience, Good Faith Estimate, good reputation, home purchase, immigration status, loan amount, loan guys, mortgage interest rates, mortgage professional, Professionalism in the Mortgage Industry, PUD, refinance, rural, sales price, suburban, title company, townhouse, urban, WJ Bradley Mortgage Capital Corp. | Permalink
Posted by Web Administrator
By Brian Short, CMC, CRMS, GMA
What else can you do to help you prepare for home ownership in the next 12 or 24 months? Work on these things:
1. Pay your bills on time. Utilities, cell phone, car insurance, student loans or other debt your are paying off quickly – make you payments on time and in full. Put them on an auto pay through your bank if you have your paycheck on an auto deposit. It all goes in and out every month – on time and in full – even if you are out of town, covered up at work or just distracted for some reason.
2. Keep your check book reconciled and up-to-date. This may seem unnecessary in the age of “online banking” but even the “best of us” forget to enter a debit card payment once in a while and it comes back to bite us where it hurts. Overdraft charges of $35-50 each will add up quickly and cause a blemish on your banking history when applying for a new mortgage in the months to come. Mortgage underwriters like to see very clean banking history and prefer to loan to those who demonstrate the ability to manage their money – no matter how much or how little they make.
3. Save some money for a down-payment and for your closing costs. Depending on the loan program you desire, you will need to save 3%, 5% or 20% of the sales price of the home you desire to buy. Any loan for which you qualify for more than 80% of the sales price will require a monthly mortgage insurance premium which will cost you $50-$250 per month depending on the size of the loan in addition to your monthly property taxes and home owners insurance payments.
FHA loans will let you buy a house with only a 3% down payment but you will have an up-front and monthly mortgage insurance premium figured into this loan. If you bring a 20% down payment, you will avoid this mortgage insurance premium. In addition, your closing costs and pre-paids will average about 3% of the sales price with most loan programs. Therefore, if you desire to buy a $150,000 house in 2 years and you want to use an FHA loan you should need $4,500 for your down payment and about $4,500 for your closing costs or a total of $9,000 to close the sale. That should give you a good goal to shoot for!
3. Keep your paperwork in order. You need to keep the following financial records. If you don’t have 
them, start keeping them – THIS WEEK!
a. Pay stubs – Keep in order for 1 year until you successfully file your tax return for that year.
b. Sales Receipts and Debit Card transaction receipts- Keep in an envelope or file folder for each month for the year until you have filed your tax return for that year. You may decide to keep them for as long a five years for warranty purposes for items you have purchased.
c. Bank Statements (Print off hard copies every month) - Keep in file folders in order for 5 years. The IRS can audit you for any year for the past 5 years.
d. W-2′s and Tax Returns- Keep until you die. (Let your kids or grand kids throw these away.) Do not throw away you tax returns – always keep a copy of the exact return you filed with the IRS. I keep an electronic (pdf) copy and a hard copy.
e. Insurance documents – Keep your most recent copy of your health insurance, auto insurance and renter’s insurance in their own file folder in your file cabinet for easy reference.
f. Auto service receipts- Keep all of you oil change, tire purchase and auto repair receipts in the glove box of your car along with your insurance card and annual registration if there is room. It your glove box becomes too full, start a separate file for this information. You will need this information for warranty purposes and for documenting the service on your car if you ever sell it someone who wants to know how well you have taken care of it.
These simple habits, developed early in your adult life, will help you be a stellar mortgage applicant and allow you to qualify very soon for the best possible mortgage loan programs available.
1 Comment | College Graduates buying houses | Tagged: auto insurance, auto receipts, bank statements, Brian Short, car insurance, cell phone, check book, closing costs, debit card, debt, down-payment, FHA, health insurance, home ownership, insurance premium, IRS, mortgage, mortgage applicant, mortgage insurance, online banking, overdraft, pay stubs, property taxes, renter's insurance, sales receipts, student loans, tax returns, utilities, W-2's, warranty | Permalink
Posted by Web Administrator
There seems to be a rush to bail out, yet, another industry. Banks, Insurance companies, Fannie and Freddie and now, the “Big Three” auto makers. How can this be “good” for our country and economy?
The mortgage industry applauded the bailout of the GSE’s (government sponsored enterprises) Fannie Mae and Freddie Mac. They were already quasi-government agencies with directors and CEOs appointed by Congress (for better or worse!). Unlike the insurance industry, no other company - government run or private - does what they do. Unlike the auto industry, no other company – domestic or foreign - keeps our banks fluid and the housing market flowing. Without Fannie and Freddie the wholesale banks, which buy the mortgages originated by mortgage brokers, would have no more money to fund the new loans. Fannie and Freddie were put in place by the federal government to keep the market fluid.
The Federal Government determined, over fifty years ago, that fluidity in the housing market was the key to keeping Americans buying their homes. This strategy has worked for our country for the past several decades and has given this generation unprecedented opportunity to own a house (or two) when our grandparents seldom owned property and certainly did not buy without a 25%-30% down-payment.
Fannie and Freddie (whether there should still be two of them is a topic for another day!) have played a key role in the “ownership society” announced by President Bush nearly 8 years ago prior to this recent unprecedented growth in home ownership among all Americans – including minorities, women and young people. No one else has done or could do for our economy what Fannie and Freddie have done in giving Americans ownership, equity, property and a vested interested in a community.
So, many are now saying, “let’s take all hurting industries to the Feds and let them bail them out, too!” Insurance companies (AIG is back for a SECOND round?!?), Wall Street Banks, the Auto Industry…. Why stop there? Circuit City just announced the closing of 155 stores and that they will ask for Chapter 11 protection from their creditors as they reorganize and attempt to restructure their debt. We’re losing our Circuit City (only 4 months old!) in the city where I live.
Other retail chains are hurting, as well. Starbucks was in the news earlier this week for posting a worse than expected earnings report. Starbucks recently forced the closing of a Saxby’s coffee shop in our 
humble city when they built theirs one block away from the newly finished Saxby’s. Is the over-priced coffee industry hurting and should the Feds step in a bail out the Grande’s, Latte’s and Espresso’s of the world because many teen-aged multi-pierced, messy-haired servers and “Espresso-Masters” will be displaced? I tend to believe that, as John McCain took a beating for saying, the fundamentals of the US economy will work themselves out – in the insurance industry, the banking industry, the auto industry and, need I say, the gourmet coffee industry. We must let the free market do its work and not let the Feds try to convince us that they know how to run a business and to micro manage these selected industries and our economy.
Is the mortgage industry really that different? YES. When it comes to competition and product availability, the secondary market of the mortgage industry is very different. Fannie and Freddie play a role that no other private or foreign company or agency play and that is why it is not inconsistent to support the limited propping up of Fannie and Freddie (already quasi-government agencies) and be opposed to the Federal government picking and choosing which private company or industry to bail out. Unions have made the US auto industry what they are today – unresponsive to market changes, overpriced, less efficient, dependent on foreign fuel, and not environmentally friendly. The US auto industry must change at their core or they deserve to fade into the history books along with their union-thug bed-fellows.
1 Comment | Federal Government Intervention | Tagged: auto industry, Brian Short, Congress, debt, down-payment, Fannie, Fannie Mae, Freddie, Freddie Mac, government bailout, GSE's, home ownership, homes, housing market, mortgage broker, Mortgage industry, mortgages, new loan, ownership society, quasi-government agencies, Tennessee mortgage | Permalink
Posted by Web Administrator
|
Fox News Fox Business News Greta Wire Tennessean.com Tennessean Business USA Today Headlines USA Today Money Headlines
