New, Tougher Appraisal Guidelines Are Coming Soon, Courtesy Of Fannie Mae And Freddie Mac!

February 28, 2014

Taken from an excerpt written by Hank Miller, SRA

   

While you slept, the appraisal industry had yet another “check” placed upon it: Collateral Underwriting. Weeks into it appraisers are adjusting, but the warnings are clear; appraisers must have justification for everything in the report. Opinions? Fuggettaboutit – did you agents and sellers hear that?

Regulations state that appraisal adjustments cannot be based upon an appraiser’s opinion. According to federal and state law, adjustments must be based on support and evidence – proof if you will, and an appraiser’s opinion is not considered to be “support.” Many appraisers have failed to support their adjustments and as a result have had their licenses revoked, penalties assessed and lawsuits lost, all because the they failed to understand a single but important requirement. – Richard Hagar, SRA

So what’s the impact on home buyers and sellers AND agents? It’s pretty simple and the basic tenant hasn’t changed – provide tangible data to support value and adjustment positions. What has changed, is the noose that’s even tighter on appraisers. Fannie Mae defines Collateral Underwriting as:

Collateral Underwriter (CU) is a proprietary model-driven tool developed by Fannie Mae that provides an automated appraisal risk assessment to support proactive management of appraisal quality. Fannie Mae will make CU available in 2015 to provide transparency and help lenders more effectively and efficiently identify issues with appraisals.

In case you missed it, reread the first sentence and note the word “automated”. The marble mouthed government speak is best said as “appraisals will be reviewed by software to validate adjustments and comparable selection”.  Boil it down even further, most understand a “zesstimate” and most are also annoyed when they complete one on their home. A zestimate is an AVM – defined as:

Automated valuation model (AVM) is the name given to a service that can provide real estate property valuations using mathematical modelling combined with a database. Most AVMs calculate a property’s value at a specific point in time by analyzing values of comparable properties.

Right. In simple terms, it’s a computer program that “analyzes” data to arrive at an estimated market value. There are obvious fundamental flaws using computers for this – real estate is perhaps the most unique entity in the world, no two parcels or homes are alike and conditions behind a sale are never the same.

So if you as a seller or your agent feel that changing the cabinet pulls adds $7500 or replacing the gold “brass look” ’88 bathroom strip light adds $2000, bring something to support that. That condo on the 10th floor is worth $75000 more than the same exact units on the 5th and 6th floor? Support it.

The idea that “checks” are going to be made by computer programs is completely asinine – the unique nature of real estate precludes this type of blanket research. However, the appraisal organizations allowed this to occur and this has been in motion for years. Collateral Underwriting involves more than this but the end result is clear: an appraiser’s opinion, agent’s opinion or seller’s opinion is not considered to be “support”.

 

Kristen Haynes, Broker In Charge, Realtor, NC / SC, GC, CMRS

Says Kristen from New Home Buyers Brokers / Realty Pros, www.NewHomesNC-SC.com: “I would argue appraisals in truth serve no purpose in residential real estate transactions. Market value is and should be defined as what a ready, willing and able buyer will pay for the property. Appraisals have always served only one, true purpose: to supply the bank a scapegoat if they end up foreclosing and then can’t get the property sold for what’s left outstanding on the mortgage. Yet, “Automated Appraisal “reviews are allowed, and even encouraged? Don’t make me laugh- they are as pointless as automated estimates of value (think Zillow’s Zestimates)-utterly worthless. Just sayin’. we have been fighting low ball appraisals for years after the banking fall out, due to Appraisers not wanting to get in trouble with the feds due to what was the new federal HVCC rules (we call in HAVOC in the business). We have a socialistic system that doen’t allow lenders to choose the best, local or most experienced appraisers- we have appraisers sfrom Salisbury chosen to come down into Indian Land, or appraisers who don’t know how to value new construction doing appraisals that they can’t “find comps” for (call the builder, most “to-be-builts” never hit the MLS, as they are built for a particular homeowner, unless they are a “spec” or cancelled contract. So now, more regulations, when we are just starting to see Appraisals get more realistic?” What’s your opinion?

          

FREE DOWN PAYMENT ASSISTANCE AND GRANTS ARE NOW AVAILABLE FOR NC RESIDENTS TO HELP YOU BUY A HOME!

FREE DOWN PAYMENT ASSISTANCE PROGRAMS ARE NOW AVAILABLE IN NORTH CAROLINA FOR QUALIFIED HOME BUYERS!

If your income or the need for down payment assistance has kept you out of the housing market, our home buyer programs can give you the boost you need to own a piece of the “American Dream”!

If you need help with the down payment and closing costs, you may qualify for interest-free, deferred, forgivable second mortgages up to 3% of your down payment or other benefits by using a Qualified Realtor / Broker and Lender, or other assistance programs!

Our Real Estate firm, New Home Buyers Brokers and Realty Pros is one of the qualified Brokers in North Carolina who has the knowledge and experience to help you get FREE Down Payment Assistance to stop throwing your money way in rent and to help you buy the home of your dreams! To see if you qualify for one of the programs, call: Kristen Haynes, Broker In Charge, GC, CMRS at New Home Buyers Brokers: 704-905-4062 (Direct) or 1-877-372-2252 (Toll Free).

   ”Helping You Find Your Way HOME”!

www.NewHomesNC-SC.com or khaynes@newhomesnc-sc.com

 

Here are some of the available programs that you may qualify for:

• The N.C. Home Advantage Mortgage™ offers competitive interest rates along with down payment assistance and reduced PMI rates to save you money on your mortgage payment every month, on top of the down payment, which is up to 3% of the mortgage loan amount for FHA borrowers (which normally will cover almost all of the required down payment), and 2% for Conventional borrowers. This down payment is fully forgiven after 15 years. This can be combined with the Mortgage Credit Certificate, for a “double home buyer bonus”!

• The Mortgage Credit Certificate (MCC) enables first-time buyers to save up to $2,000 a year on their federal taxes.
• For both first-time and move-up home buyers, the NC Home Advantage Mortgage™ provides qualified individuals with stable, fixed-rate mortgages and down payment assistance up to 5% of the loan amount. Even better, repayment of the down payment is required only if you sell, refinance or transfer your home before year 15—the down payment assistance is forgiven at 20% per year after 10 years in the home.

  As an added bonus, if you are a first-time buyer or a military veteran, you may also be eligible to combine this program with aMortgage Credit Certificate (MCC) to increase your savings even more! We offer these products statewide through participating lenders.

• The House Charlotte Program provides 10-year, deferred, forgivable loans to qualified Funds can be used to cover your down payment, closing costs, as well as for interest rate buy downs.

• NACA provides credit counseling services, home ownership classes and grants for those who qualify.

• The Good Neighbor Next Door Program is a federal housing program administered by HUD, for Police Officers, Firefighters, EMTs, and K-12 Teachers that offers up to a 50 % discount on the appraisal value of homes in specially designated “revitalization areas”,  as well as “One Hundred Dollar Down” homes that qualify for FHA financing.

The N.C. Home Advantage Mortgage™ 

Available with 30-year, fixed rate FHA, VA, USDA and conventional mortgages, the N.C. Home Advantage Mortgage™ is a perfect match for buyers looking for safe, affordable financing. The mortgages offer competitive interest rates, lower PMI and MIP mortgage insurance rates (saving you more in your mortgage payment every month in MIP and PMI fees), AS WELL AS the FREE down payment assistance. These programs can be STACKED with other assistance programs for eligible borrowers (Charlotte Housing Partnership or NACA funds, VA loans, or other programs and grants available statewide in North Carolina.

Repayment is required only if you sell, refinance or transfer the home before year 15 of the loan – the down payment assistance is forgiven at 20% per year after you live in the home for 10 years, and fully forgiven at 15 years.

For more information on the Home Advantage Mortgage, click here: http://www.nchfa.com/home-buyers/interest-rates

Am I Eligible For The NC Home Advantage Mortgage With Down Payment Assistance?  

You may be eligible for an N.C. Home Advantage Mortgage™ if:

• you are buying a new or existing home;      
• you are a first-time OR a move-up buyer;
• you buy a home in North Carolina and occupy it within 60 days of closing (this is not for investors who will not occupy the residence as their principal home;
• you don’t exceed the income limits for the person on the loan (not the entire household, as in MCC);
• you are applying for a FHA, USDA, VA or conventional loan through a Participating Lender and meet the sales price limits of the loan type;
• you are a legal resident of the United States, and;
• your credit score meets the basic requirements for the program.
• If you choose an FHA, VA, or USDA loan, you will get 3 % towards your down payment. With conventional loans, you will receive 2 % towards your down payment.
• The down payment can be “stacked” with other federal and state programs and with additional seller concessions towards closing costs, if you qualify, Seller concessions are limited to 3 % with Conventional loans, and up to 6 % with FHA loans.
• Click the link below to see if you qualify via the income limits in your area: http://www.nchfa.com/home-buyers/income-limits

What Properties Are Eligible For This Free ‘Down Payment Assistance’ Program?

• New and previously owned single family homes
• Townhouses
• Condominiums*
• Duplexes*
• Manufactured Homes (only new, never occupied, doublewide or greater manufactured homes on permanent foundations)*

*These property types are only available for FHA, VA and USDA loans, not conventional loans.

The Mortgage Credit Certificate (MCC)

If you are a first-time buyer and meet certain income and sales price limits, you may be eligible for a Mortgage Credit Certificate (MCC) worth up to $2,000 a year in tax savings. This federal tax credit can lower your income-tax liability, dollar-for-dollar, leaving you more money to use toward your mortgage. If you qualify, you will be able to claim 30% of the interest you pay on your mortgage if you purchase an existing home or 50% of the interest for a new home (never occupied) – up to $2,000 for every year you live in your home – as a tax credit on your federal income taxes.

MCCs can be combined with the N.C. Home Advantage Mortgage™ and other “stacked, eligible programs”, increasing the savings on your new home – as well as with any other qualifying lender mortgage program, including some adjustable rate mortgages.

How Does The MCC program work?

Suppose you qualify for an MCC and obtain a 30-year, 4% fixed-rate mortgage of $97,000 for the purchase of an existing home (not new construction). The first year’s interest payment is approximately $3,880. The MCC allows you to take a federal income tax credit of $1,164 ($3,880 x 30%) for that year.

If your federal income tax liability is $1,164 or more after you have taken all other credits and deductions, you receive the entire benefit of the MCC tax credit – $1,164. In figuring your taxes, you also claim a deduction for the remaining 70% of your mortgage interest.

If your federal income tax liability is less than $1,164—for example, $800—your tax is reduced by only $800 that year. However, the remaining credit can be claimed on tax returns for the next three years, if tax liability increases. Note that depending on your individual tax situation, the MCC may not always provide a tax credit benefit to you in a given year depending on your overall tax liability.

You can receive an immediate benefit from your MCC tax credit by filing a revised W-4 (Employee’s Withholding Allowance Certificate) with your employer. In this example, your federal income tax liability would be reduced by $97 a month ($1,164 ÷ 12). The extra $97 increases your take-home pay and helps make your house payments affordable.

The House Charlotte Program

Who Is Eligible For The House Charlotte Program?

Families with incomes that are 110% or less of the HUD Area Median Income are eligible for assistance. Participants must complete a pre-purchase homebuyer education program. The home must be a family’s primary residence and be located in one of designated House Charlotte eligible areas. Maximum purchase price of home is $155,000.

How The Program Works:

You must use a Registered Broker / Realtor and Lender to find and finance a home. Banks apply for the program on behalf of qualified buyers. To find out if you are qualified, contact your approved Broker / Realtor, who can also set you up with an approved lender.

The selected home must be located in one of the approved Charlotte Neighborhood Statistical Areas (NSAs). Each Charlotte neighborhood is further broken down into Neighborhood Profile Areas.  To determine if the property of interest is eligible, and address search must be completed through the mapping application.  Generally, these homes are located in disadvantaged areas that are “up and coming” but still have some growing to do.

Once your Realtor finds you a house in an eligible area, you will then ask your approved lender to apply for the House Charlotte program. You also must complete a homebuyer education program. In order to register for a home buying course, buyers may contact the Community Link or any other HUD-approved Counseling Agency to register for the program. There are income limits and area limits to be approved for this program.

• Provides funding up to $5,000 for families with income above 80% AMI, up to 110% Area Median Income (AMI)House Charlotte Program Image.
• Provides funding up to $7,500 for families with income at or below 80% (AMI)
• Provides funding up to $10,000 for families with income at or below 60% AMI in select House Charlotte areas.
• Provides funding up to $10,000 for buyers who are employed as sworn CMPD police officers. This is a 5-year deferred, forgivable loan.

NACA:

The Neighborhood Assistance Corporation of America (“NACA”) is a non-profit, community advocacy and homeownership organization. NACA’s primary goal is to build strong, healthy neighborhoods in urban and rural areas nationwide through affordable homeownership.

NACA has made the dream of home ownership a reality for thousands of working people by counseling them honestly and effectively, enabling even those with poor credit to purchase a home or refinance a predatory loan with far better terms than those provided even in the prime market.

The NACA homeownership program is one answer to the huge subprime and predatory lending industry. NACA has conclusively shown that when working people get the benefit of a prime rate loan, they can resolve their financial problems, make their mortgage payments and become prime borrowers. NACA’s track record of helping people who have credit problems become homeowners or refinance out of a predatory loan debunks the myth that high rates and fees are necessary to compensate for their “credit risk.”

 NACA has access to billions of dollars of mortgage funds for primarily low- and moderate-income people and people purchasing in low to moderate-income communities.

Eligibility and Program Details:

Purchase and Rehab loans

DOWN PAYMENT: None

CLOSING COSTS: None (paid by lender)

INTEREST RATE: One percent below the prime market rate

Current Interest rate:  30 year fixed (as of )

BUY-DOWN: Funds to Permanently Reduce Interest Rate

One percent of mortgage amount reduces interest rate by one quarter of a percent (.25%). This is a tremendous added benefit.

APPLICATION FEE: None (paid by lender)

POINTS & FEES: None (paid by lender)

Lender Grants: Lenders with NACA provide a grant for low and moderate income (“LMI”) homebuyers and those purchasing in LMI communities that matches a down payment with funds for an additional buy-down. You must become a member, attend Home Counseling sessions and the property must be located in a NACA, Urban Designated Housing area to utilize this program. You lso must use a NACA approved lender and Realtor / Broker.

CREDIT HISTORY:

Perfect Credit Not Required

Member’s personal payment history evaluated without consideration of his/her credit score.

P.M.I.: (Private Mortgage Insurance) None

Membership: (Neighborhood Stabilization Fund) None

OTHER TERMS: No yield spread premium; No pre-payment penalty; No balloon payment; No required credit life, or other unnecessary or overpriced insurance.

The Good Neighbor Next Door Program: 

Law enforcement officers, pre-Kindergarten through 12th grade teachers and firefighters/emergency medical technicians can contribute to community revitalization while becoming homeowners through HUD’s Good Neighbor Next Door Sales Program. HUD offers a substantial incentive in the form of a discount of 50% from the list price of the home. In return you must commit to live in the property for 36 months as your sole residence.

How the Program Works: 

Eligible Single Family homes located in revitalization areas are listed exclusively for sales through the Good Neighbor Next Door Sales program. Properties are available for purchase through the program for seven days.

How to Participate in The Good Neighbor Next Door Program: 

Call a HUD- Approved Broker in North Carolina who will help you check the available listings for your state. Follow the instructions from your Realtor to submit your interest in purchasing a specific home. If more than one person submits on a single home a selection will be made by random lottery. You must meet the requirements for a law enforcement officer, teacher, firefighter or emergency medical technician and comply with HUD’s regulations for the program.

Eligibility Details:

This program is only available to Police Officers, Firefighters, EMT’s, and K-12 Teachers.

Those buyers can get a 50 percent discount off the HUD appraised value of a home in specially designated ares. For example, if HUD lists a home at $100,000, you can buy it for $50,000 provided, you occupy the home as your personal residence for the required occupancy period. If you qualify for any FHA-insured mortgage program, your down payment is only $100 and you may finance closing costs.

You must live in the home for 36 months after the purchase.

The program is available for those with cash or using Conventional, FHA, VA financing.

This program can be “stacked” and combined with FHA financing (even with 203 K or 203 B “Rehab” loans.

If the buyer uses and qualifies for FHA financing, they also might qualify for the “$100 Down Payment” plan. Call your Realtor to see what you qualify for and what is available on the market with this $100.00 Down Payment program (areas are limited).

HUD requires that you sign a second mortgage and note for the discount amount. No interest or payments are required on this “silent second” provided that you fulfill the three-year occupancy requirement.

CREDIT REPAIR COUNSELING COMPANY:

In need of credit repair? Our lenders like www.HOPE4USA.com. They are excellent  and very price conscious compared to other similar companies. They are  for-a fee service provider, but used by many major lenders for credit repair, and are very economical compared to other companies.

Here’s a FREE, informative guide for you from Hope 4 USA, so you can start taking steps to rebuild your credit score so you can purchase the home of your dreams:

 http://www.hope4usa.com/free-credit-repair-toolkit

Ready To Start Searching For Your Next Home? See What’s Out There Today!

Start your FREE Home Search today by calling Kristen Haynes at new Home Buyers Brokers at 704-905-4062 or by downloading this new, FREE App on your Smartphone or Tablet!

To Use This 100 % FREE, “Home Scouting” Home Search App:

1. Go to your phone’s App Store and download the “Home Scouting” application.
2. Enter VIP Code: 7049054062 (no dashes).
3. Create your own anonymous User Name And Password- then you can use it to log in on a desktop, too! It’s that easy!

We are also MILITARY FRIENDLY and support our Armed Forces and Veterans!

Contact Us To See What Programs that YOU Qualify For! It’s 100 % Confidential- and it’s always 100 % FREE!

Call:  New Home Buyers Brokers / Realty Pros, Realtors / Brokers in NC / SC: 704-905-4062 or Toll Free: 1-877-372-2252

Do you have further questions about what programs you qualify for? Call or email us, below:

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Brought to you by:

       Kristen Haynes, Broker In Charge, GC, Certified Military Residential Specialist

Direct: 704-905-4062  or Toll Free: 1-877-372-2252

 Email: khaynes@newhomesnc-sc.com

Web: www.NewHomesNC-SC.com

Copyright © 2016 New Home Buyers Brokers / Realty Pros

Lender’s Credit Score Requirements May Be More Strict Than Necessary

Lenders’ Credit Score Requirements May Be More Strict Than Necessary

FICO scores run from 300 to 850. Wells Fargo recently lowered in minimum acceptable scores for conventional loans to 620 from 660. Could this signal the start of some fresh thinking on credit scores? As Realtors, we certainly hope this is the case. As much as stricter credit scoring models were needed after the banking crash in late 2007, credit has been unreasonably tightened to the point that “good borrowers” were still unable to get loans. This includes First Time Home Buyers, the Self-Employed, and Move-Up Buyers who had to switch jobs or careers due to downsizing during the recession.

Are lenders’ credit score requirements for home buyers this spring too high — out of sync with the actual risks of default presented by today’s borrowers? The experts say yes. We agree.

What experts are we talking about here? The actual developers of the credit scores used by virtually all mortgage lenders. Executives at both FICO, creator of the dominant credit score used in the mortgage industry, and up-and-coming competitor VantageScore Solutions, confirmed that mortgage lenders could reduce today’s historically high score requirements without raising their risks of loss. In the process, many prospective buyers who currently can’t qualify might get a shot at a loan approval. This will be a good thing for buyers and sellers alike, and will help keep the housing market going in the right direction.

Consider this: Consumer behavior in handling credit is subject to change over time, often keyed to regional or national economic conditions. Credit scores that were acceptable risks in the early 2000s — say FICOs in the 640-to-680 range — turned into larger-than-anticipated losers when the recession hit. Now that the housing rebound is well underway and federal regulators have imposed tighter standards on income verification and debt ratios, the high credit score “cutoffs” that virtually all mortgage lenders imposed in the scary aftermath of the crash are stricter than necessary.

FICO scores run from 300 to 850. Lower-risk borrowers have high scores, and higher-risk consumers have low scores. Early in the last decade, a FICO score of 700 was good enough for an applicant to get a lender’s best deals or close to it. Today a 700 FICO just barely makes the grade — 50-plus points below the average score for home purchase loans at Fannie Mae and Freddie Mac, the big investors. Banks now need to package and sell their loans on the secondary market, and if a homeowner defaults on the loan and the Underwriter review team finds something potentially amiss, the bank or lender now has to “buy back” the bad loan. Not something lenders want to do in the aftermath of such past, big bank failures due mainly to bad loans.

  

Joanne Gaskins, senior director of scores and analytics for FICO, said that statistical studies by her company have demonstrated that “the risk of default on more recent mortgage vintages is better than at the onset of recession” — essentially real risk has reverted to the early 2000s. A lot more people pay on time. As a result, she said, lenders can afford to “take a look” at their current strict scoring requirements and consider lowering them without sacrificing safety.

To illustrate how consumer behavior has improved, Gaskins cited one internal study that examined mortgage default data through 2011. At a FICO score level of 700 in 2005, roughly 36 borrowers paid their loans on time for every one who went into serious default. In 2011, by contrast, for every one defaulting mortgage borrower, roughly 91 paid on time. That’s a huge decrease in risk to the lender.

VantageScore Solutions has documented a similarly dramatic improvement in mortgage borrower payment behavior. In an article scheduled for publication this week in Mortgage Banking, a trade journal, Barrett Burns, president and chief executive of VantageScore, offers an analysis based on scores of 680 and 620 from 2003 through 2012. VantageScore’s latest scoring model uses a high risk to low risk scale of 300 to 850.

According to Burns, the probability of default at both score levels was lowest in 2003-05, then soared between 2006 and 2008 as the economy began deteriorating. By 2012, both scores were just slightly higher than 2005’s.

Burns notes that although auto lenders and credit card banks have adjusted their underwriting standards to these important changes in borrower risk, “the mortgage industry has been hesitant.” In an interview, Burns emphasized that mortgage lenders could expand home purchase possibilities for large numbers of consumers simply by lowering score cutoffs. They wouldn’t have to loosen up on their standards on down payments or debt ratios — just their scores.

A study last year by the Urban Institute and Moody’s Analytics estimated that every 10-point reduction in mandatory credit scores on mortgages increases the pool of potential borrowers 2.5%. A 50-point cut in score requirements, researchers found, would increase potential home purchases 12.5% — more than 12.5 million households.

At least one major bank has concluded that lowering scores is the way to go. Wells Fargo , www.wellsfargo.com, recently announced reductions in minimum acceptable scores for conventional loans to 620 from 660. They are joining other major banks in lowering the acceptable score threshold for FHA loans to 600. See the article here from Bloomberg News.

Could this signal the start of some fresh thinking on credit scores, a trend that other large lenders will pick up on? Let’s see. If they do so, it should be a win-win for everybody involved.

Copyright  2014 New Home Buyers Brokers, Inc. / Realty Pros. With excerpts from: Kenneth R. Harney, Washington Post Writers Group

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NEW FICO ‘SCORE NINE’ CREDIT SCORING SYSTEM ANNOUNCED, AND AN FHA LOAN MARKET UPDATE

NEW FICO SCORING SYSTEM ANNOUNCED AND FHA LOAN MARKET UPDATE March 18, 2014 Breaking News. FICO has announced that it will release the next broadly available version of the FICO Scoring System beginning this summer. INTRODUCING FICO ‘SCORE NINE”: Using a new, multi-faceted modeling approach, which combines sophisticated in-house analytic technology with insights gained over 50 years of building credit risk models, FICO ‘Score Nine’ will provide the best-in-class predictive power across all of the major credit product lines—home loans, auto loans, credit cards and personal loans—from loan originations, all of the way through managing and servicing the loan. FICO has also addressed lenders’ concerns regarding score consistency across the three major credit bureaus, and compatibility with previous FICO Score versions to ease adoption. The FICO Score continues to help keep lenders aligned with key compliance objectives and relevant government regulations. The FICO Score is the most widely used credit score in North America. Lenders purchased more than 10 billion FICO Scores in 2013, and 90 percent of all U.S. consumer lending decisions use the FICO Score. WHO WILL UTILIZE THE NEW FICO SYSTEM?: The 25 largest credit card issuers, the 25 largest auto lenders and tens of thousands of other businesses rely on the FICO Score for consumer credit risk analysis and federal regulatory compliance. “To become a widely adopted industry standard, a credit score must work well across industries, across all lending product lines and across the entire credit lifecycle,” said James Wehmann, executive vice president of Scores at FICO. “The major changes in the lending environment over the last few years demanded that we take a different approach to building a score that will continue to perform consistently well in various situations. We devised an innovative approach to developing FICO Score Nine that enabled us to leapfrog our own industry-standard benchmark. Our goal is to continue to support a financial ecosystem that includes lenders, securitization investors, rating agencies, regulators and other stakeholders who need a common risk benchmark.” Source: NAMP Daily – www.nampdaily.com HOMEPATH AND HOME STEPS OFFER FREE CLOSING COSTS AND OTHER INCENTIVES: Government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac recently introduced new incentives to bolster home sales through their HomePath and HomeSteps programs, respectively, which are designed to help the firms liquidate the real-estate owned (REO) properties they hold in their portfolios. Specifically, Fannie Mae is offering up to 3.5% in closing cost assistance on HomePath properties available in 27 states during the FirstLook period. During the FirstLook period, owner-occupant or public entity buyers are able to submit offers on HomePath properties, giving them the opportunity to purchase homes without competition from investors. Fannie Mae recently announced the extension of the FirstLook period from 15 days to 20 days. To be eligible for the incentive, the initial offer must be submitted between now and March 31, 2014, so there’s not a lot of time left to utilize this program (unless it’s extended). Homes using this incentive must also close on or before May 31, 2014. The incentive will offer qualified buyers up to 3.5% of the final sales price to pay closing costs. In addition, home buyers have a choice of $500 incentives they can use towards condominium association dues, flood insurance premiums or the home warranty of their choice. To qualify for these additional incentives, the closing must settle on or before May 30, 2014. The promotion does not apply to investor purchases, auction sales, sealed-bid sales and bulk sales, Freddie Mac reports. Source: MortgageOrb, www.mortgageorb.com For a list of available properties, call your local Realtor or go to: http://www.homepath.com.   AN FHA UPDATE AND PREDICTIONS FOR THE UPCOMING YEAR: Following the first-ever Treasury draw required by the Federal Housing Administration this year, the agency says it is back on stable footing and does not anticipate requiring Treasury assistance in fiscal year 2015. As reflected in the Obama Administration’s proposed budget for the coming fiscal year, both FHA’s forward and reverse lending programs are expected to be cash flow positive with the Home Equity Conversion Mortgage program anticipated to have a negative subsidy rate at -0.23%. A positive credit subsidy indicates the program would require cash to cover losses. In this case, however, the HECM program is expected to perform on its own, slightly above its break-even point. The earlier bailout to the tune of $1.7 billion was largely attributed to losses in FHA’s reverse portfolio. “The budget estimates the Mutual Mortgage Insurance Fund will have a positive capital reserve balance of $7.8 billion,” said FHA Commissioner Carol Galante of the entire fund outlook following the budget release. “We will not require a mandatory appropriation from the Treasury this year.” FHA touted its performance and positive outlook in the coming year, pointing to achievements such as reducing chronic homelessness by 16% and assisting 450,000 homeowners facing foreclosure through loss mitigation assistance in the midst of last year’s budget sequester. “This is more remarkable given the context in 2013,” Housing Secretary Shaun Donovan said. “Given the sequestration that cut across the entire federal government budget, HUD was faced with finding ways to cut 5% from our budget with very little time to prepare and just seven months left in the fiscal year. We made some extremely difficult choices. We’re proud of what we did to provide best possible outcomes.” Source: Reverse Mortgage Daily – www.reversemortgagedaily.com Congress’s lack of progress on reforming the U.S. housing-finance system shouldn’t be “an excuse” to delay rebuilding the market for private-label mortgage securities, a senior U.S. Treasury Department official said recently. “Many investors have told us that they can and want to take mortgage credit risk,” said Michael Stegman, housing-finance counselor to the Treasury secretary, in prepared remarks at a research conference in New York. Adding simplicity and transparency is a key first step, he said. “To get back to an efficient, responsible, and sustainable level of complexity, and to rebuild trust, the new issue non-agency market must first follow a path of greater standardization and transparency,” Stegman said. Federally controlled buyers Fannie Mae and Freddie Mac have been in a conservatorship since 2008, an arrangement that has lingered with U.S. lawmakers disagreed over the appropriate role for government in housing finance. Source: Market Watch – www.marketwatch.com. EASIER QUALIFYING EXPECTED FOR FHA MORTGAGE BORROWERS: First-time and low-income borrowers may have an easier time qualifying for a Federal Housing Administration loan. Ginnie Mae, a government agency that issues bonds backed by FHA loans, reports that the average credit score on FHA-backed loans fell to 680 in 2013, and the average debt-to-income ratio rose to 40.3 percent — both indicators that credit may be easing. In comparison, Ginnie Mae reported in January 2013 that the average score was 701 and the debt-to-income ratio was 38 percent. “The FHA theoretically allows scores as low as 580,” the L.A. Times reports. “But lenders, buffeted by defaulted loans and demands that they buy back troubled loans that they sold, generally have set standards higher since the financial meltdown.” Source: The Los Angeles Times – http://www.latimes.com A Note from Kristen: Actually FHA allows scores down to 500, but requires a down payment of 10% below 580. But many lenders do not want to underwrite loans under 640 (580 is the absolute minimum I have seen here in Charlotte, NC, and those loans also come with higher loan origination fees and interest rates). While many lenders have lowered minimum scores, FHA’s quality assurance initiatives ensure that lenders will still be underwriting their files under a microscope and looking at the loans carefully, because lenders now have to buy back their “bad” or defaulted loans if any errors are found in the original underwriting process.  Copyright © 2014 Realty Pros / New Home Buyers Brokers, Inc. Kristen Haynes, Broker In Charge, GC, CMRS  Web: www.NewHomesNC-SC.com         Name(required) Email(required) Website Comment(required) Submit Δ

 

FANNIE MAE IS NOW GIVING AWAY A FREE 3.50 % DOWN PAYMENT FOR A LIMITED TIME TO HOME BUYERS WHO QUALIFY!

 FANNIE MAE IS OFFERING A FREE 3.50% DOWN PAYMENT (AND OTHER INCENTIVES) FOR A VERY LIMITED TIME!

Please distribute to your network, so as many people as possible have the opportunity to benefit from this unique, one-time deal, never before offered by the federal government!

To reduce its inventory of foreclosed homes, Fannie Mae is now offering qualified owner-occupant purchasers cash incentives toward closing costs in the amount of 3.5% of the purchase price of a home!

By Kenneth R. Harney February 27, 2014, 5:00 a.m.

WASHINGTON — If you’re planning to shop for a home in the next few weeks, here’s an early spring buying season come-on that just might save you some money if you qualify. Fannie Mae, the largest mortgage investor in the country, has a bulging portfolio of houses acquired through foreclosures nationwide. About 31,000 of these properties are listed on its resale marketing site.

To move them quickly out of inventory, Fannie Mae temporarily is offering qualified owner-occupant purchasers — but not investors until after a waiting period — cash incentives toward closing costs of 3.5% of the purchase price. But you have to submit your initial offer no later than March 31 and close by May 31.

What sort of houses are we talking about? Have your Realtor send you information or go to: www.homepath.com and you’ll see. They run the gamut — from a one-bedroom condo in San Diego to a four-bedroom, four-bath single-family home in suburban Montgomery Village, Md. Some states have thousands of HomePath listings online: Florida has nearly 12,000; Illinois, 4,360; Ohio, 2,800; California, more than 2,300; Washington state, nearly 1,800; and Nevada, about 1,400.

Asking prices range from $30,000 to $600,000 or more. On a $400,000 house, the 3.5% closing cost incentive would amount to $14,000. • Also • Finding ways to help young adults make their first home purchases • Strategies for getting a mortgage amid tougher federal rules • Mortgage servicer shenanigans keep consumer watchdogs busy. To ensure that buyers who intend to occupy its homes get an opportunity to fully check them out and bid without competition from investment groups offering all-cash deals, Fannie has instituted what it calls a First Look program. It essentially prohibits bids from investors on properties during the first 20 days after listing (30 days in Nevada).

After that, investors are free to jump in. Each First Look listing has a countdown clock attached to it that indicates the number of days remaining before bidding is opened to all comers. The new 3.5% closing cost offer is available only during active First Look periods from mid-February through March, so there’s not a lot of time to get involved. Bidders will need to indicate upfront that they want to be considered for a closing-cost discount. Who is eligible? First, you’ve got to be a bona fide owner-occupant purchaser and commit to live in the house as a primary residence for at least a year.

You’ll need to fill out a certification to that effect that can be found on the site. Properties are not available in all states. You don’t have to be a first-time buyer, though the Fannie program is likely to attract substantial numbers of them. The 3.5% closing cost discount helps with one of the biggest problems faced by first-timers — upfront cash. As with most home purchases, you’ll need to be able to qualify for mortgage financing. Though Fannie may end up owning or securitizing the loan you obtain, it won’t be financing you directly.

On HomePath purchases, you shop for a mortgage just as you would on any other house. Ideally, you nail down a financing source and get prequalified for mortgage money up to a specific dollar limit at current interest rates. If you’ve already located a First Look property and qualify, the lender is likely to take the 3.5% closing cost incentive into consideration in evaluating your application.

While you shop on HomePath, however, keep this important factor in mind: These are foreclosed, previously occupied homes. Though some of them are repaired, painted and spiffed up before they are listed, many could use some additional work. They are sold “as is” and that’s built into the pricing. Fannie identifies what it calls “improved” properties on the HomePath site — those that have undergone significant repairs — with either the “Home Depot” logo (when repairs have been made by contractors from that company) or a hammer and roof symbol (when repairs have been completed by independent contractors hired by Fannie).

Your Realtor will help you make a bid on the property of your choice. It’s best to use the service of an experienced Realtor due to the myriad of contract provisions that need to be met throughout the process (like home inspections, de-winterizing a property for inspections, using an approved lender and attorney, etc). You may also want to check out other sources for distressed properties with your Realtor, such as HUD homes: www.HUD.gov.

Your Realtor / Broker will be experienced with distressed properties, such as foreclosures, pre-foreclosures, and HUD homes, and will be a vital resource to help you navigate through the maze of these type of purchases (one thing is for sure- these deals do not work like “normal” home purchases).

If you can’t find the First Look house you want, don’t give up. Freddie Mac, the other giant federal mortgage investor, also has thousands of foreclosed homes that it’s trying to dispose of — and its own First Look program — at its Home Path marketing site. Though Freddie Mac currently has no closing cost incentive offer, it does provide a $500 allowance toward the purchase of a home warranty policy, and it promotes special mortgage financing options on houses in some areas. If you qualify, that could mean a loan with no mortgage insurance, no appraisal and a 5% maximum down payment.

Want to know how much home you can qualify to buy? Contact Jenny Stoner or Kim Venable of Fairway Independent Mortgage Corporation: http://fairwaync.com

These are definitely worth checking out, whether you are on the fence about buying a home, or you are a seasoned investor looking for an extra-special deal!

Contact me for a list of properties in your area:

Direct: 704-905-4062 or Toll-Free: 1-877-372-2252.

Kristen Haynes, Realtor, BIC, GC, CMRS New Home Buyers Brokers / Realty Pros

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Email: khaynes@newhomesnc-sc.com

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http://www.youtube.com/watch?v=0VT-dxbePQs&feature=youtu.be

Broker In Charge, Unlimited Building General Contractor, Certified Military Residential Specialist
Boards: 2009-2014, Professional Standards Committee, Charlotte Regional Realtor Association
2008-2009, Independent Broker Owner Council, Charlotte Regional Realtor Association
Member: Charlotte Regional Multiple Listing Service,Charleston-Trident Multiple Listing Service, National Association of Realtors, National HUD Broker, Charlotte Regional Realtor Association, NC Licensing Board for General Contractors, BBB. EHO