Ruth's Blog: WR Starkey Mortgage (LMB#100023827)

Home Foreclosures in Castle Rock, Colorado

Have you ever wondered what might spur home foreclosures in Castle Rock? There are the obvious reasons for home foreclosures, like not making your monthly mortgage payments. Or not paying your county taxes. But what you might not realize, is that home foreclosures can be generated by your Home Owners Association!

Here is an interesting blog about what happened in Maryland! Makes you think twice about home foreclosures!

There are many experts in the industry that can help prevent home foreclosures. For more information, call me and I can refer you to an expert in your area.

Ruth Vogt

www.MyLenderOfChoice.com

Phone: 720-489-0712

Today I was working with one of my loan officers on a file ... an extremely qualified borrower I might add that was getting quite frustrated with having to document his income and identify his deposits in his bank account. Here was my response back to the loan officer:

"I know it is tough to ask a buyer as qualified as Mr.XXXX for all this documentation. Unfortunately, it's the world we live in today. Investors don't care about common sense, and for some reason the risk factor seems to have been completely eliminated for the time being. The crack down by the Federal Reserve has forced investors into a CYA mentality (don't mean to be crude, but it seems to be the best way to describe it.)

All move up and relocation buyers are going through the shock of what is being asked of them, because "the last time" they didn't have all these hoops to jump through. And they didn't. And WE didn't have to ask them to jump in those days either. Our industry as a whole has been put in a sort of "time out" being punished for the stupidity of following our instructions a decade or so ago, when the government's call to action for our industry was "every American DESERVES a home" (started during the Clinton administration, actually). Thus came stated income and then stated income, stated asset loans along with 125% LTV loans, and let's not bring up those self-destructing option ARMS! Doing these high risk loans, resulted in high returns for those lenders and investors... but not for long. And even though WRSM did not participate or fund those types of loans, we are not exempt from the national punishment which is bestowed on not only the lender, but our buyers as well.

Is it ugly? ABSOLUTELY! And I hate it, too. But there's nothing we can do about it right now. And to wonder if it's going to get worse is a concern I hope we all have. But that's another discussion. For right now, our buyers just need to know: THIS IS NOT ABOUT THEM and to try and not take this personally. And to be honest, I have to wonder if this is part of the "big plan": make it difficult; make us all become so frustrated, that government run housing is welcomed as another change in our nation.

So, do I feel for what Mr. XXXX is going through? Most definitely. But it's not too far fetched to be concerned that a day may come in the not too distant future that wanna-be buyers won't even have the option to jump through all these hoops.

Now that I've completely depressed myself, I'm going to go and pull those never ending weeds that like to invade my flower gardens, except today I'm going to be thankful that I have a house and a yard of my own to worry about. And hope and pray my grandkids do, too."

I seldom, if ever, write any blogs having to do with a political edge to them. But right now, I'm frightened. We ALL need to be!

I'm sure we've all heard that expression. But there isn't a better time to recognize the impact of that saying than right NOW!

The clock is ticking on the home buyer credit, yet it amazes me how many buyers and sellers are still letting a few thousand dollars keep them from getting a contract signed!

I read a recent blog by my AR friend, Jane Peters, written on the subject of buyers nickel and diming the sellers to death. Over a $5000 roof (a roof, I might add, that wasn't expected to cause inspection or appraisal issues, by the way).

Now let's think about this: a $5,000 roof or the $8,000 first time home buyer tax credit??

Simple math points out that if the buyers make the offer with the roof as is (remember, no inspection or appraisal issues are expected) and the sellers accept it before the end of the month, the buyer is $3,000 to the good anyway.

But to take this one step further: let's say they continue to hold off hoping to get the seller down another $5,000, all for a roof that doesn't need to be replaced currently anyway, only to miss the contract deadline date and lose out on the $8,000 credit, they will pay for that mistake for over 25 years!

Here's how I figured that:

The monthly "savings" on a $5,000 lower price/lower loan amount is about $27 per month. If they mess around and don't come to terms on the contract by month end, they lose the $8,000 tax credit. If I divide the $8000 they stand to lose by the monthly "savings" they are hoping to gain of $27, the break even is over 296 months, or over 25 years!

And that's just simple math without taking other tax or financial factors into consideration like the value of current money (the $8k tax credit) vs borrowed money.

Mortgage Insurance for Littleton Colorado Homes

Makes Low Down Payment Loans Possible!

Simply put, mortgage insurance protects the mortgage company against financial loss if a homeowner stops making mortgage payments. Mortgage companies usually require mortgage insurance on low down payment loans for protection in the event that the homeowner fails to make his or her payments. When a homeowner fails to make the mortgage payments, a default occurs and the home goes into foreclosure. The homeowner, lender and the mortgage insurer lose in a foreclosure situation. The homeowner loses the house and all of the money put into it. The mortgage insurer will then have to pay a percentage of the mortgage company's loss on the defaulted loan.

The mortgage company's decision to use mortgage insurance is driven by the requirements of investors in the mortgage market. Because of the losses that could occur, major investors require mortgage insurance on all loans made with low down payments. Although the cost of the mortgage insurance is paid by the borrower, the mortgage insurer works directly with the mortgage company.

Low down payment mortgages can be insured in two ways -- through the government or through the private sector. Mortgages backed by the government are insured by the Federal Housing Administration (FHA), the Department of Veterans Affairs (VA) or the Farmers Home Administration (FmHA). Although anyone can apply for FHA insurance, the other two government mortgage guarantee programs are much more targeted. The VA program is limited to qualified, eligible veterans and reservists. The FmHA insures loans for the construction and purchase of homes in rural communities. Conventional financing is the alternative to obtaining a home loan backed by the government.

Some government insured financing places maximums on the loan amounts which can vary from county to county, and state to state. Private mortgage insurance is available on a larger scale of home loan types and there is no pre-set limit on the loan amount. Although variances between government loans and conventional loans are evident, all are based on the same concept:  allowing families to get into homes with less cash down.

Another option to loans requiring mortgage insurance would be to obtain a 1st and 2nd mortgage combination. With the wide variety of loans available, home buyers can find the financing process quite overwhelming! That's why I encourage clients to meet with me early in the home buying stage so that together we can find the right mortgage that best suits THEIR personal needs!

Title Insurance Centennial Colorado

Once you find the property you wish to call "home", you AND the lender want to be given a full disclosure of ownership and liens associated with that property before the purchase transaction is completed. That information is provided in the form of an ALTA (American Land Title Association) policy. Unlike other forms of insurance that focus on possible future events and charge an annual premium, title insurance is purchased for a one-time payment expense and is a safeguard against loss arising from hazards and defects already existing in the title.

Prior to being issued a title insurance policy, a close examination of all public records that involve title to the real estate is done. The person, who is a licensed and bonded agent, conducting the search looks at past deeds, wills, and trusts to make sure the "chain of title" has passed correctly to each new owner. The examiner also tries to verify that all prior mortgages, judgments, and other liens have been paid in full.

If a problem (called a "defect" or "cloud" on the title) is found it must be corrected prior to closing. For instance, a previous owner sold the property 15 years ago. His wife was listed on the deed but for some reason did not sign-off at closing. Her interest in the property must be removed to clear the title. A title search should uncover other potential problems or nuisances, such as rights another may hold (right of ways, view easements, power line easements, mineral rights), claims by prior undisclosed heirs, and pending legal actions.

Title insurance protects you against problems that did not show up during the title search or were missed by the examiner, or errors in public records. A title insurancepolicy does not cover defects that occur after you purchase the property. Also, policies often exclude issues having to do with easements, mineral and air rights, and liens. As your lender, we'll be sure to review all exclusions and exceptions before you ever go to closing. After all, as the lender, we have an interest in the property as well! That's why there are actually TWO policies issued -

• A lender's title insurance policy will be issued for the amount of the mortgage. It pays the lender if a problem surfaces.  
• An owner's title insurance policy covers the property's full sales price and insures the owner against loss.

Typically here in Centennial, it is the responsibility of the seller to provide you with the owner's title insurance policy. And as a part of the agreement in assisting you with the financing of the property, you provide the lender with the lender's title insurance policy.

For more information on closing procedures on properties in Centennial or in the Denver area, please feel free to contact me!

Homeowners Insurance Centennial Colorado

When shopping for homeowners insurance in Centennial, or most any other area for that matter, there's much more to consider than how much your coverage will cost. You need to buy the right type of policy AND be sure to get the proper coverage. For instance, the needs of a buyer of a condo or townhome will differ from the needs and costs of homeowners insurance for a single family homeowner. We, as the lender, require that you have sufficient insurance to cover exposure determined only by the amount of your loan. You, on the other hand, may desire increased coverage on your home and you may want to consider provisions for personal valuables such as jewelry, your computer equipment and other possessions. That is why it's so important to take time to visit with your agent or homeowners insurance company about your personal situation.

When you apply for homeowners insurance, the insurance agent will sometimes ask you about your current occupation and employment history, marital status, previous addresses, date of birth and Social Security number. It is standard for the insurer to check your criminal, credit, and insurance history to see if you are a "good risk." The homeowners insurance company also will look at your "loss history" to see what kinds of home insurance claims you've made in the past.

In addition to gathering personal information, the insurer will need information about the home. The age of your home, the materials used to build it, where it's located, square footage, and the number of rooms all play a role. How do you heat your home? What's the overall condition of the house? How many people live in your home? How close is your home to the nearest fire station and fire hydrant?

Lastly, your homeowners insurance agent will need to determine how much it would cost to replace your home. Once you have decided what type of homeowners insurance policy best fits your needs, if special coverage is required for personal items that may not be covered under the basic policy, and what deductible you are comfortable with, your insurance agent will be able to give you a quote. Typically, the premium for the first year plus three months escrow for the following year will be included in the amount of money you are asked to bring to the closing of your new home.

Be sure to shop around when looking for the right homeowners insurance company as rates do vary widely. For instance, some companies offer discounts when you have both your home and auto insurance policies with them or have been insured by them for several years. Larger deductibles will also have a huge effect on your premium. Other discounts may be offered if you don't smoke, or if you qualify for senior rates. And remember, it's always a good idea to check the financial ratings of the companies with AM Best or Standard and Poor's. Let me know if you need a couple of recommendations of agents in your area.

I heard on the news tonight that every tweet since the inception of Twitter four years ago is now being archived by the Library of Congress.

Why?

They say it's not because they are trying to make fun of twits who choose to randomly brag about their unexceptional life. Rather there is the claim that tweets are documenting history! With 50 million tweets a day you'd hope there is bound to be one or two that might really be worth repeating or sending a RT in twalk (twitter talk).

But what about all the others?  REALLY? The Library of Congress? I don't know about you, but I haven't seem very many tweets today, or yesterday, or even last week that warrant sufficient value to be achived in my memory, much less that of the Library of Congress!

So think about that the next time you decide to slam someone with a #BAD slam!

Mortgage Rate Indicators for Denver

Rates are still inviting home buyers to buy. Especially a good time for first time homebuyers to get under contract and take advantage of the home buyer credit. Move up buyers might qualify, too. Call today! Must be under contract by the end of the month! Ask me to discuss mortgage rate indicators when you call so we can decide if now is the time to lock in your interest rate!

Market Comment - Week of April 12th, 2010 Mortgage bond prices rose last week, which helped mortgage interest rates improve slightly. The first portion of the week was generally bond friendly as the Fed minutes showed real concern about the economy's ability to recover with so many job losses. Stocks and bonds generally traded inversely as the DOW tested the 11,000 mark a few times during the week in up and down trading. Unfortunately a large portion of the improvements was erased as oil prices traded around $87/barrel and inflation fears emerged. Despite this, rates still managed to improve by about 1/4 of a discount point for the week. The consumer price index Wednesday will be the most important release this week. The abundance of important economic releases has the potential to result in a very volatile week for mortgage interest rates. If the data shows signs of weakness we could see rates improve. Economic Factors Economic Indicator Release Date Time Consensus Estimate Analysis Trade Data Tuesday, April 13, 2010 $38 billion Important. Affects the value of the dollar. A falling deficit may strengthen the dollar and lead to lower rates. Consumer Price Index Wednesday, April 14, 2010 Up 0.1%, Core up 0.1% Important. A measure of inflation at the consumer level. Weaker figures may lead to lower rates. Retail Sales Wednesday, April 14, 2010 Up 0.2% Important. A measure of consumer demand. A smaller than expected increase may lead to lower mortgage rates. Business Inventories Wednesday, April 14, 2010 Up 0.1% Low importance. An indication of stored-up capacity. A significantly larger increase may lead to lower rates. Fed "Beige Book" Wednesday, April 14, 2010 None Important. This Fed report details current economic conditions across the US. Signs of weakness may lead to lower rates. Industrial Production Thursday, April 15, 2010 Up 0.2% Important. A measure of manufacturing sector strength. A lower than expected increase may lead to lower rates. Capacity Utilization Thursday, April 15, 2010 72.5% Important. A figure above 85% is viewed as inflationary. Weakness may lead to lower rates. Housing Starts Friday, April 16, 2010 Down 2.1% Important. A measure of housing sector strength. Larger than expected decreases may lead to lower rates. Oil Inflation fears tied to rising energy prices have reemerged. At one point oil prices rose near $87/barrel last week causing many analysts to revise forecasts. Goldman Sachs and Morgan Stanley both predict oil prices will rise above $100/barrel next year. The concern is that rising energy costs could permeate through the markets and damage economies around the globe that are struggling to regain footing. Inflation, real or perceived, generally erodes the value of fixed income securities causing prices to fall and rates to rise. This could pressure mortgage interest rates higher further stifling a recovery in the US housing sector.

WR Starkey Mortgage, LLP - A different kind of company...where people come first!

6025 South Quebec, Suite 110 Englewood, CO 80111      rvogt@wrstarkey.com www.MyLenderOfChoice.com    Ruth Vogt Business Development Manager (LMB100023827) Work: 720-489-0712 Fax: 720-489-0273 Other: http://www.dora.state.co.us/real-estate/index.htm

©2010 Design by WR Starkey Mortgage, LLP NMLSR #2146. This is not a guarantee of financing. All borrowers must meet certain underwriting guidelines and credit criteria. Rules and Regulations may apply.

Short sales might be the only way out for many. But taking that direction may haunt sellers for years (and dollars) to come.

First there is the obvious financial impact of a short sale. The waiting period to buy a new home is at least two to three years and also depends on the loan type. For instance, a new FHA loan can be applied for after two years as long as they were current on their other installments and the mortgage of the previously owned home.

But wait... don't most banks require you be delinquent before they even consider a short sale?? Therefore you need to plan on a minimum of three years after a short sale to even hope to assist them in purchasing another home.

But here's something that may be even more surprising. Despite the Mortgage Debt Relief Act of 2007 some may still owe IRS after all! There were a few exemptions to this act to include:

• homebuyers that took a cash out refinance and spent the money on something other than home repairs will most likely need to claim the amount of the short sale as if it were earned income.
• investment or second homes are still subject to the tax liability.
• multi-million dollar homes are also not covered by the Mortgage Debt Relief Act.

Interesting how this information is suddenly coming to light now that we're deep into tax season, isn't it???

NOTE: always contact your accountant or CPA for issues requiring tax advice.

If the law of gravity is, "What goes up must come down", then the law of mortgage interest rates has to be, "What comes down must go up". No one can argue that rates have recently been the lowest we've seen for a long, long time. And we knew it wasn't going to last forever, but somehow we got lulled into a false sense of "low rate security". Even though the recent incline has been slight thus far, experts are suspecting rates will continue to rise. But no one is sure how long or how fast they'll go up.

Why the expectation of a rate increase? Because last Thursday was the last day since 2009 the Fed would be buying mortgage backed securities. If this is all "mortgage mumbo jumbo" to you, listen to this brief video from MSS to help you get a better understanding of why mortgage rates are so volatile.