In September 2012 people breathed a collective sigh of relief when USDA (U.S. Department of Agriculture) postponed the review of eligible boundaries for Snohomish County cities. The review period was set to change the boundaries and exclude many homes from qualification. To our relief we thought were out of the woods.
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“Having a mortgage” is the most common saying for what is technically a “deed of trust”. Mortgage is to deed of trust what Kleenex® is to tissue paper. For this blog we’ll be using mortgage in place of deed of trust.
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Understanding who owns your loan is more important and more challenging than someone may think. It is common place to assume that since a payment is made to Chase, Wells Fargo, Bank of America or Green Tree that that company owns the loan when in fact those companies are loan services. In rare cases, those fore mentioned companies may in fact own the loan but that’s typically not the case.
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In every real estate transaction, whether it be buying or investing, someone has to consider financing to purchase property. None of us are strangers to the term mortgages or home loans but what many don’t realize is the complexity of the financing world. Since the real estate collapse of 2007 and the fiscal cliff debate, real estate financing has become tighter and more demanding on the borrower. However, time and time again I hear frustrations from borrowers who think obtaining a home mortgage should be a casual walk in the park.
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Back in August, the USDA announced three Snohomish County cities where under review due to the 2010 Census population increases. The review period put many, real estate brokers, lenders and buyers alike, into a frenzy because if the those cities (Arlington, Lake Stevens, and Monroe) were disqualified from the USDA program then many first time homebuyers and or buyers needing zero down financing would be ineligible to purchase a home.
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If other financial vehicles are not an option for you or you would like more flexibility with your financing then a Conventional home loan or multi-family home loan maybe the right answer. Conventional financing has a variety of downpayment options and most common are 5%, 10%, 15%, or 20% – higher downpayments can always be achieved depending on individual situations. Also, it should be noted that Conventional loans can be either conforming or nonconforming based on loan amount and area which are governed by Fannie Mac (Fannie Mae & Freddie Mac guidelines).
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FHA financing is a home loan program offered through The US Department of Housing and Urban Development. FHA financing allows borrowers to purchase a home loan using a 3.5% downpayment. 3.5% of what? When calculating the downpayment mortgage officers use the purchase price of the home. Example: the home’s price is $100,000 and the downpayment is 3.5% then the downpayment is $3,500. If the home is $400,000 then the down payment is $14,000.
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Are you currently serving, have served, and/or retired from the Army, Navy, Marines, Air Force, or Coast Guard? If so, then you may be eligible to purchase a home with zero money down. The United States Department of Veterans Affairs offers service members their Loan Guaranty Service, Home Loan Program which real estate brokers and mortgage officers abbreviate as VA financing.
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USDA financing has been hot since it is one of the last 100% zero down loan programs. USDA made it easy to qualify with a 640 credit score and with the biggest stipulation being the location of the home. The borders are pretty easy with just about everything in Arlington and Monroe qualifying and some pockets in Marysville and Lake Stevens qualifying as well.
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Customer service is one business practice that can unmistakeably build or break a business’s reputation. In the mortgage servicing industry, a huge disconnect between service and corporate goals is undeniable true and most notably with Green Tree Servicing LLC. Since the bubble burst of 2007, the nation has been rocked with high unemployment rates, rapid and improper foreclosures, and the prominence of short sales. With that being said, the economy has to work through these issues while trying grow and create jobs for long term stabilization.

The other day I spoke to someone who will be listing their home as a short sale due to employment changes and a upcoming relocation. After the wife’s hours where greatly reduced the couple is no longer able to make both their first and second mortgage so they stopped making their second. Unfortunate Yes. Uncommon no.

In a recent call to collect back payment, Green Tree Servicing LLC used scare and threat tactics to force payment. Our client said “Green Tree told me its illegal to not pay on the debt”. This phrase scared the the living-bajesus out of her and made her quite frantic and rightfully so. Who wouldn’t be scared if someone said its illegal not to do something especially when that person is perceived to know correct information?
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I would like to say thank you for all who have served in the past and who are currently serving. It is quiet the honor to work with you as your lifestyle is far from a civilian’s. I have heard stories from Marines, Navy Chiefs, Ex-Army, retirees, and private security officers still in Afghanistan and I can only imagine the daily routine. Next week though I get to go on a Tiger Cruise aboard the USS Nimitz which I’m really excited about. So in honor of Armed Forces Day here is a infographic from LowVARates.com showing the evolution of the American soldier’s uniform – I find it quite cool.
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This morning, in Falls Church Virginia, President Obama announced his Refinancing Plan for responsible homeowners. From the press conference, it was mentioned that homeowners can qualify for historically low interest rates while potentially saving homeowners $3,000 annually on their mortgage payment. The keyword is qualify and historically the government has not made it super easy for responsible homeowners to take advantage of programs.

The refinancing plan will not help anyone who’s decided that walking away from their home is the best option – it is unclear how being behind payments will affect qualification. With that said, if a homeowner has been adversely affected by job loss that this plan will be able to help those folks, that is my understanding anyways. According to the HuffingtonPost.com:
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The New Year is right around the corner and this will be the final post of 2011. People promise to make little and big changes. Losing weight, traveling more and buying a new home are among the popular resolutions. Sadly, the “buying a home” resolution proves difficult to accomplish.

Some people don’t even try because of the misconceptions of home buying. Homeownership is not unachievable, even for people with bankruptcies on the report or low credit scores. Conventional loans have gotten a bad rep for a reportedly extreme down payment requirement—as high as 20%. When in actuality, lenders are accepting 5% on down payments all the time. The Federal Housing Administration Loan requires 3.5%. Other government-backed loans such as the VA loan for active duty and veteran soldiers and the USDA home loan do not require a down payment at all.
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The majority of homes I’ve sold over the past two years have been banked owned properties (REO) and those properties, or HUD homes, are appealing due to their greatly discounted price. Banked owned properties typically need a large injection of LOVE to get them back up to standards and ready to live in. On the flip side, there are some bank owned homes which are move-in ready and need virtually nothing done to them.

More so on the financial note, personal experiences have shown people, whether be an individual or a family, are being more conservative when it comes to their upcoming purchase. Instead of purchasing at their qualifying limit, buyers are leaning towards staying in a comfort zone as it applies to their payments. The short of the long is: my buyers don’t want to have to work just to live in a house. It’s no longer about keeping up with the Jones but living inside their means so they can have savings and extra spending cash for fun. And who doesn’t like to have fun?

So How Do You Get the Most from a Real Estate Purchase?

Planning. Actualizing gains starts at the very beginning of the home buying process. It is not earth shattering news that residential real estate prices are the lowest they have been in many years. In addition, the near future we will not see external forces exploding home values at a massive 20% monthly increase – those increases will likely never happen again.
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Under the Emergency Homeowners Loan Program, or (EHLP), homeowners who are not covered by Treasury’s Innovation Fund can possibly qualify for HUD’s EHLP program. Being the 11th of July, there is only a few days left to submit an application with the deadline being July 22, 2011.

States that Qualify for EHLP

Alaska, Arkansas, Colorado, Hawaii, Iowa, Kansas, Louisiana, Maine, Massachusetts, Minnesota, Missouri, Montana, Nebraska, New Hampshire, New Mexico, New York, North Dakota, Oklahoma, Puerto Rico, South Dakota, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.
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Have you ever wondered what it would take to purchase a new construction home with zero money down? Think it is impossible to buy because financing is so difficult to obtain? If you’re are curious then read on about 3 new construction developments that qualify for the Rural Development USDA Zero Down Financing program: Marysville Meadows, Copper Station, and Claridge Point (There are actually 4 more but couldn’t receive permission to blog about them – their loss).

Marysville Meadow

Nestled in the north end of Marysville, Shoultes, The Marysville Meadows is a new construction community which offers homeowners 6 different models to choose from starting in the mid $160′s.

- 3 to 4 Bedrooms (depending on Model)
- 2, 3, and 4 Car Garages (depending on Model)
- Granite Counter Tops & Backsplash in Kitchens
- Cement Planked Siding w/ 50 year Warranty
- Hardwood Floors in Main Entry
- Walk-In Closes in all Models
- Energy Efficient Insulation Packages
- Community Soccer Field, Basketball Court
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Sometimes purchasing a single family home is just not a financial option for people but they still want the pride of home ownership. Manufactured homes are solution for that exact dilemma but manufactured homes face their own unique challenges. One challenge in particular is financing. I am pleased to announce there are options for people wanting to purchase a manufactured home, we currently have 2 manufactured homes for sale.

There are two different kinds of mobile home parks, 55+ and Family Parks. 55+ an older community are just what they sound like; the main qualification is to 55 years or older. Family parks are just the opposite, where children and everyone under the age of 55 can be accepted (55+ are not disqualified from application). Here are some of the financing qualifications.

Basic Financing Qualifications for Manufactured Home

- Double wide manufactured homes as old as June 15, 1976.
- Single wide manufactured homes up to 12 years old.
- Minimum down payment depends on age of home. New to 15 years ca do as little as 5% down, 16 years to June 15, 1976 minimum down of 15%.
- Rates vary depending on down payment percentage and credit score; will range from about 7.5% up to about 10%.
5. Minimum 660 credit score, no bankruptcy in the past 5 years, must have established credit of at lease 3 years with installment (ex: auto loan) debt established.

Curious about qualifying? Contact us and we’ll get you started.

Purchasing a home can be one of the most exciting, and at the same time, the most stressful decisions a family can make. I tell my clients is to check with a lender and verify the amount in which they qualify. One is sets the expectation of what can be purchased and as well as help identify if there are bruises on their credit report. Know the financial health prior to looking at homes is more than helpful for the buyer as well as the agent assisting that buyer.

I’m of the opinion, that qualifying and obtaining financing is thee most important piece. No sense in looking for homes and writing a Purchase and Sale if financing can’t be obtained or the home is out of the qualifying price range. On a side note, most sellers won’t even accept or entertain an offer without a pre-approval letter attached to an offer.

You can check a credit score online, as seen on TV, but it is different from having a credit report pulled when making application for a mortgage. A recommended post is by Jeff Belonger and is titled Your Credit Score is more than just a number. The blog post has a easy to read description on the various differences. Even though there are differences, which in his examples the borrower’s credit score numbers were lower when applying for a mortgage, it doesn’t remove the fact that the credit score is an essential piece when determining the financial stability of a borrower.
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The blog title is correct and if you, or you and your spouse, have a combined income of $15 hour it is possible to qualify for a home loan. Skeptical? I will guess and say that you are but lets run through the scenario and see how probable owning is in today’s economic client.

Home Buying Scenario for a $175,000 Home

- $15 single or combined hourly income
- 40 hour work week w/ no over time
- Need a Zero Down home loan
- Need to Wrap Closing Costs into the payment
- New Construction is NOT Mandatory

The hourly wage times the hours worked translates in $2,400 of gross monthly income. Minus out some taxes, a few bills and it’s probable to have $1,200 of net income to apply towards a house payment – see the mortgage fee worksheet below. The current real estate market has made extremely cheap housing available which includes new construction (due to builders purchasing bank owned lots) and the abundance of bank owned properties still coming on the market.
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Since the last lender report in January 2009, the national lenders, Wells Fargo and Bank of America, have further increased their market share over local and less well recognized lenders. Wells Fargo and Bank of America issued 43% of all the loans in Snohomish County last month and with the next closest lender, JP Morgan Chase Bank, only issuing 6.7% of loans. A substantial divide but is it just because these companies are larger national brands or is there more to it?

Yes, I do believe brand recognition plays a vital big role in sales volume but another aspect is these two brands have a lot of toxic assets to liquidate. Originating loans and having a lot of properties to sell is directly related to an emerging real estate trend – in order to submit a purchase and sale agreement on one of their properties, a buyer must first be pre-approved by the bank holding the property. In all the bank owned purchases I’ve represented clients in, the buyer was required to provide an pre-approval letter from that bank 100% of the time – no doubt frustrating buyers. This leads me to believe that some buyers where and are willing to use these larger banks because buyers perceived it may make financing the property easier. I am not a fan of this emerging trend and fortunately buyers are not required to use that lender.
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House Key State Bond is a Washington State sponsored first time home buyer financing program that focuses on educating potential mortgagees so the mortgagees are able to qualify for government subsidies. These subsidies can then be used to buy down mortgage points. This is excellent news for Washington residents that are looking to purchase their first home with little money down, similar to the USDA program.

House Key State Bond has some requirements as well as restrictions.

1. Home buyers must attend a free home buyer education seminar.
2. Home buyers can get receive downpayment assistance.
3. Home buyers must stay within a maximum acquisition cost limit.
4. Home buyers maybe subjected to a recapture tax.
5. What are the targeted areas for acquisition cost limits.
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To my surprise over $466 million dollars in loans where originated in Snohomish County for the first month of 2009. The total value of loans originated is no where near as high as the booming real estate times of the early millennium but since it is the first time seeing this particular report I have no data to compare it with. But I am sure the reduction in loans originated is significantly lower in early 2009 than it was in 2005 – 2007.

Wells Fargo topped the list with over $46 million dollars in loans originated and averaged out over 178 loans equates to approximately $261,000 per loan; almost equal to the median home price in Snohomish County. Rounding out the top 5 was Mortgage Advisory Group, one of Barnett Associates Real Estate, LLC’s preferred lenders.
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It’s certainly not something you would want to think about or plan for, but when you’re in danger of losing the roof above your head, it’s best to be armed with the facts that could save you from foreclosure or help you to go through the process with as much dignity as you can. Foreclosure laws vary from state to state in the United States, so if you’re falling behind on mortgage payments and facing the threat of losing your home in Washington State, here’s what you need to know:
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When most people hear the about the United States Department of Agriculture (USDA) it is usually associated with standard of beef and not a rural and community development program. The Rural and Community Development “provides homeownership opportunities to rural Americans, as well as programs for home renovation and repair.” Programs like this are getting some new interest since the days of creative lending are over. A similar program, House Key State Bond, is only open to first time home buyers but that is not the case with the Rural and Community Development programs.
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As the lending industry continues to implode frustrations between buyers and sellers are on the rise. With the collapse of the Subprime market shockwaves flow through the industry. Subprime loans were made and packaged into groups and then were rated and insured by bonding companies and then sold on the stock market. As the housing market slowed down and values dropped in certain segments of the market many people were upside down with their loan to value ratios. The bonding companies were forced to re-evaluate what they had insured as “A” product and then downgrade some of the packages thus unable to insure them and therefore sending ramifications throughout the stock market. This could be the first time we have seen the decline in the housing industry have such an affect on our global market.
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There are many myths running around, mostly pushed by the national media, that there is no more money to be lent out for first time home buyers. But that is not the case for the first time buyer in Washington State.

Washington State has a plan, which has been around for many years to assist the first time buyer, called House Key State Bond. This program allows first time buyers get government subsidies to buy down their points. Those subsidies do have to be repaid in a recapture tax and what I can tell most first time buyers will not actually have to pay the recapture tax back. [Read more...]

The mortgage loan has to be currently late or in arrears

FHA’s rescue program for distressed homeowners is finally here! Here’s how it works: The homeowner’s current loan has to be an ARM. It must have been paid on time for the previous six months, prior to the loan’s adjustment in rate and payment. The mortgage loan has to be currently late or in arrears. The qualifying process must show that the homeowner could not afford their mortgage payment, once their interest rate adjusted higher. [Read more...]

There have been many blogs discussing and pointing fingers on who is to blame for the subprime collapse; the lenders, loose restrictions, over inflated home prices, rising interest rates and so on. But what there has not been a lot of, is the discussion around a workable solutions for people caught between a rock and a hard place. Opinionated bloggers have been really quick to point the finger, analyze faults and make everyone’s mistake public knowledge but maybe it is just me; once the problem is known the next move is create a workable solution so people can get on with their lives, is this off the mark? I do not think so. [Read more...]

In the wake of the recent lending industry crisis, President Bush announced this morning, from the Rose Garden and reported by AP, that the United States Government would be their to assist homeowners. [Read more...]