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Archive for the 'Mortgage Industry News' Category

Important news for New Jersey Home buyers… Big FHA mortgage changes soon to be in effect.

There were big changes announced by FHA this week, aimed at strengthening their capital reserves and at minimizing risk…..

1. Effective April 5, 2010, the up front Mortgage insurance premium (MIP) will be increased by 50 bps to 2.25% (from the current level of 1.75%.)

2. FHA plans to request legislative authority to increase the maximum annual MIP.
If this authority is granted, then the second step will be to shift some of the premium increase from the up-front MIP to the annual MIP.
This shift will allow for the capital reserves to increase with less impact to the consumer, because the annual MIP is paid over the life of the loan instead of at the time of closing.

3. New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA’s 3.5% down payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10%.

4. Reduce allowable seller concessions from 6% to 3%.
This change will bring FHA into conformity with industry standards on seller concessions. and will minimize incentives to inflate appraised value.

 
I personally think this is great. Appraisals will no longer be such an issue from large seller concessions,  and if a borrower’s FICO score requires them to put 10% down, that is actually protection for the buyer if the market drops further or even if the market stays flat and the buyer needs to sell within a year or two.  Your thoughts?

$8,000 First Time Home Buyer’s Tax Credit Deadline Countdown to November 30th

If you’re eligible for this $8,000 tax credit, please keep in mind that you need to be under contract for your new home realistically by October 15th. Feel free to call us for details. (973)464-9129

Yours to count on,

The Sue Adler Teaam

Understanding The Home Valuation Code of Conduct

By Richard Hirsch, Mortgage Masters

 

 

What is the HVCC?

The HVCC is the Home Valuation Code of Conduct. The HVCC is the result of a joint agreement between Freddie Mac, the Federal Housing Finance Agency (FHFA), and the New York State Attorney General. The agreement was formed in an effort to enhance the independence and accuracy of the appraisal process. Unfortunately, that has not been the case. This past year, the HVCC has quietly transitioned from a mere proposal into concrete national policy which has altered the core aspects of real estate appraisals.

 

As a result of the HVCC, many appraisals are now being outsourced to 3rd parties, many of whom do not have a working knowledge of the geographical areas they are appraising. As a result, buyers are being subjected to higher appraisal costs, inaccurate valuations, and the elimination of the longstanding benefits of one-on-one business relationships with local Realtors, mortgage originators, and appraisers. Because of the formation of the HVCC, local market value decisions have now been shifted to unfettered and often uninformed appraisal management companies located hundreds, if not thousands of miles away. Read the rest of this entry »

Mortgage Guidelines for purchasing a NJ home without selling your existing home first

 

Interested in purchasing a home in New Jersey, but have not sold your existing property? 

 

 

I’m not an advocate of buying before selling in today’s market unless you understand and are comfortable with the risks involved, but if you insist on going this route, according to Rich Hirsh, from Mortgage Masters, here are Fannie’s guidelines:

 

If you are applying for a conventional loan, Fannie Mae requires that you either have 30 percent equity in your CURRENT residence OR 6 months cash reserves for BOTH homes. 

 

 

  Home Buying Scenarios

 

     #1 – Current Home is SOLD but not CLOSED prior to purchasing other one.

 

o   Must qualify for BOTH house payments and have 6 months worth of payment reserves for BOTH homes

 UNLESS

o   There is an executed purchase contract and all finance contingencies have been cleared on the home you are selling

    OR

o   Have 30 percent equity in current residence (Appraisal/BPO) PLUS 2 months worth of payment reserves for both homes

 

     #2 – Existing Home Converts to Second-Home Status

 

o   Must qualify for BOTH house payments

 

AND

o   Have 6 months worth of payment for BOTH homes

 

 OR

o   Have 30 percent equity in home being converted to 2^nd home

 

(Appraisal /BPO) PLUS 2 months worth of payment reserves on BOTH homes.

 

     #3 – Existing Home converts to Rental Property

 

o   Must qualify for both house payments AND have 6 months cash reserves for BOTH homes

UNLESS

o   Rental income can be used to offset monthly payment ONLY if home being converted to rental has 30% equity (Appraisal /BPO) AND home is leased AND security deposit has been verified.

 

The bottom line:  If you are buying a home without selling your current home, there will always need to be cash reserves after closing in the amount of 6 months PITI unless there is 30 percent equity in their current home.  Then you will need 2 months reserves! 

 

 

Rich Hirsch Mortgage Master Inc. Phone: 908-410-9066  eFax: 908-325-0018 rhirsch@mortgagemasterinc.com

 

This Month in Real Estate ( January 2009)

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Bryon Ellington and Jay Papasan give a great overview of the current real estate market and are right on as far as their advice to buyers and sellers.  The rates are even lower at this moment ( Feb 16th) than when this video was done- today they are 4.75% 

To find out about each micro market, visit www.sueadler.com and check out the home sale stats pages for each of our midtown direct trainline towns. Or,  just call me! (973)464-9129

Yours to count on,

Sue

Housing and the Obama Stimulus Package- Status Report from the National Association of Realtors ( NAR)

	Dear Fellow REALTOR®, Here’s our take on the Stimulis Bill and Treasury announcements made this week. We look at the Stimulis package AND the Treasury’s package holistically, in compliment with each other – mostly because that’s how the Obama team is looking at it. Your representatives, the NAR Board of Directors, asked us in November to do 4 things (with an unspoken but clearly understood mandate to PRESERVE what we already have). Here they are: 1) get loan limits raised for high cost areas, 2) make the $7,500 tax credit NOT a loan, 3) try to find ways to push interest rates down (which are higher than they should be due to systemic risk right now) by 200 basis points, and 4) help provide solutions to the foreclosure/short sale problem. So here’s what we have achieved: 1) the loan limits will be raised to $727,000 in high cost areas, 2) the tax credit will be raised to $8,000 with NO payback [a true credit], 3) interest rates have come down 125-150 basis points, and 4) the bill has over $50 billion in it for foreclosure mitigation, with Geitners Treasury plan signaling that the second half of TARP and TALF will be used to mitigate foreclosures through a government guarantee, drive down interest rates by buying another $200-300 billion of mortgage paper from the GSES’s thereby freeing them up to do the same with new mortgages, and Fannie has just agreed to lift the cap of 4 investment properties eligible for loans and raise it to 10. In addition, we preserved what we have – which some tend to forget is always on the table when these negotiations start up again – mortgage interest deductability, real estate tax deductability, and the $250,000/$500,000 cap gains exclusion (an overall package worth more than $100 billion and for some a very attractive funding source for their pet projects). We did make a run at the $15,000 credit — and we would have loved to have gotten that or the Homebuilders $22,000 credit idea as well as their 5 year loss carryback deal, but they were considered too rich for this program. What it did do though is totally take the debate off of whether a tax credit should be reinstated at all (it expired last year) and whether it was a true credit or a repayable loan, and kept the conversation on how much it should be. It also kept the debate off of ‘what we are willing to give up to get a $15,000 tax credit’ and kept the debate again, on how much it should be. It’s pretty hard to complain when they give you what you ask for and you lose something you never had. While we study the Treasury specifics on their major role in providing the rest of the housing solution — there is much more to come and we are working diligently with the Administration to help ‘unclog the pipeline’ and get capital flowing into housing again. Sincerely, Charles McMillan, CIPS, GRI 2009 NAR President

Get the REAL scoop on Down Payments for NJ home purchases

The following is a re- post from the Realtor.org website:

Media Advisory: Downpayment Clarification
Washington, December 31, 2008

There is some misinformation in the media lately about the required size of a down payment for a mortgage in today’s market, and the blog world is abuzz with misperceptions. Not all so-called experts are knowledgeable in this area, and some experts are being misunderstood.

The facts:

An individual may be required to put down 20 percent based on that person’s financial situation. But that is not an across-the-board requirement for all borrowers.

A borrower who puts down less than 20 percent is required to obtain mortgage insurance.

Even in a declining market, a borrower is required to make at least a 5 or 10 percent down payment.

FHA requires a 3.5 percent down payment by borrowers, so long as they meet a 31 percent housing cost-to-income ratio. In other words, anyone who stays within their budget and who can afford a 3.5 percent down payment (even with family help) can become a homeowner.

For your own individual situation, just give me a call and i can help you navigate through this process.

Yours to count on,

Sue Adler  (www.SueAdler.com) 973-464-9129

Trying To Make Sense of Today’s Mortgage Guidelines for NJ Home Purchases and Refinances

Take the Fear Out of Mortgage Financing
by Drew McKenzie

My advice is to avoid the aspirin, do not make assumptions, do NOT read the dramatic press.

Interest rates are the lowest they’ve been in 3 years and true opportunities exist, so make sure you communicate your specific circumstances to your mortgage broker early in the process. There has never been a better opportunity for buying a home.
A few recent changes to be aware of in order to manage your expectations: Read the rest of this entry »

Attention Homeowners! Conditions for second mortgages have changed!

A NJ mortgage banker, Rich Hirsch, has been a tremendous wealth of information to me every step of the way through this credit crunch. I wanted to share his latest regarding Home Equity Line Of Credit :

October 17, 2008

Mortgage Master continues to be an industry leader in residential mortgage lending. We have had no disruption in 1st mortgage lending since the credit squeeze began.
Conditions for 2nd mortgages have changed. Read the rest of this entry »

Sue’s Thoughts On Our NJ Real Estate Market

In these uncertain times, I’d like to share my thoughts and address concerns you may have about our local real estate market in Short Hills, Summit, Maplewood, Livingston, Chatham and surrounding NJ towns. I’ve included links to interesting articles that you may find helpful and of course I’m available if you’d like to discuss your own personal needs confidentially. Read the rest of this entry »