Ruth's Blog: October 2009

How many times have we heard or read over the past couple of weeks the GREAT NEWS about the 1st Time Homebuyer Credit being extended? A dozen, or more, maybe?? Yet, is it? NOPE!

We need to be very, very cautious about spreading "good news" that is premature, and becoming known as the Realtor that is crying "Wolf, Wolf" one too many times!

Do I personally think the tax credit will be extended? Probably. But has it been? NO. So why all the confusion? There is a great post by Tiffany of California that I read last night on Active Rain that gives clarification of the process: Proceed with Caution.

But today a letter came out from the President of the National Association of REALTORS that helps put the irregularity of what is going on into perspective: 

FROM: Charles McMillan, NAR President

Jerry Giovaniello, NAR Senior Vice President Government Affairs

DATE: 30 October 2009

RE: Tax Credit Extension and Expansion

Although the Senate was not able to reach a procedural agreement to schedule a vote on the Unemployment Insurance extension, the Dodd-Lieberman-Isakson Amendment to extend and expand the Tax Credit is contained in the bill.

The Senate is expected to vote, Monday evening, for a 'Motion to Invoke Cloture' if 60 Senators vote yes on the cloture motion, the Senate will then be able to schedule a vote on the bill that contains the Dodd-Lieberman-Isakson Amendment.

Once the Senate acts, the tax credit must still go to the House of Representatives for action.

Please urge your REALTORS® to respond to our Call for Action

Additionally, we ask that you, NAR's leaders, call your United States Senators and ask them: 'To vote yes on the motion to invoke cloture on the Unemployment Insurance Extension.' This will keep the legislative process moving.

NAR will continue to provide updates on the tax credit as events warrant.

There was an additional development in the Senate yesterday:

The FHA, Fannie and Freddie Loan Limits at the $729,750 level through December 31, 2010 was passed by the Senate and is now being sent to President Obama for his signature into law. Since the provision is part of the Continuing Resolution, which is necessary to keep the government operating, it is expected to be signed into law quickly. This was important victory for market stability across the board.

SO, if it's at all important to you to turn this hope to extend the homebuyers tax credit into a reality, call your Senators and ask them to vote yes on the motion to invoke cloture on the Unemployment Insurance Extension.

With all this talk about proposed legislation dealing with HVCC and the first time homebuyer credit, is anyone even noticing that we are in serious danger of having our maximum FHA and conforming conventional loan amounts reduced?? If you remember, it was the American Recovery and Reinvestment Act of 2009 (ARRA) that was signed into law on February 17, 2009 allowing our FHA loans to be increased to 125% of local area median costs and increased FNMA, Freddie maximums to $417,000. These increased maximums are due to expire December 31, 2009.

So, if you have a conventional preapproval letter for $417,000 you better get those buyers under contract. And pay attention to the FHA amounts which are established by county. I know it's a couple of months off, but just don't get caught off guard!

Getting FHA loans in Denver may be easier than the media wants you to think. That is, only if you are an owner occupant... as it is true that FHA no longer offers investor financing, and actually hasn't for some time . However, buyers can get an FHA loan in Denver, for instance, to purchase two to four family dwellings, provided they intend to occupy one of the units as their primary residence. It is important to recognize that it might be easier to get an FHA loan in Denver now than it will be after December 31^st. That is if you want the advantage of the higher FHA loan amounts established by the American Recovery and Reinvestment Act of 2009 (ARRA) signed into law on February 17, 2009. These higher FHA loan limits in Denver were only approved to remain in effect until December 31, 2009. At this time there is no discussion of whether the maximum FHA loan amounts will revert back to pre- ARRA limits. Thus, if you want to take advantage of the current maximum FHA loan in Denver County for a single family dwelling of $406,250.00 you might want to take action before the end of the year!

Is it no down payment that is making you hesitant from applying for an FHA loan in Denver?

The rumor that down payment assistance for FHA loans is dead is probably the second biggest mistruth that has been circulating in Denver. There are many FHA approved down payment assistance programs available that can be used in conjunction with FHA loans in Denver. Probably the most popular program available is CHFA, or Colorado Housing Finance Authority. There are income limits based on family size, but there is no longer a requirement that buyers must be first time homebuyer to use a CHFA loan in conjunction with an FHA loan in Denver. Check it out today, before the maximum financing amount for FHA loans in Denver are lowered!

I wrote a blog previously about HR 3126, and for those of you following that bill, there is really good news:

IT PASSED THE COMMITTEE REVIEW!

The update on the government tracking screen states: "This bill was considered in committee which has recommended it be considered by the House as a whole."

Most bills are killed before this step! BUT it's not time to celebrate yet!

We have to keep the heat on... and here's how you can do your part: SIGN THIS PETITION:

STOP HVCC

The House needs to understand what HVCC has done to our business. We need them to approve this bill and get it sent to the Senate! Pass this info on. PLEASE!

Mortgage Lenders in Colorado are required to retain licensing with the Department of Regulatory Agencies since the passage of HR Bill 1085. This bill went into affect August 5, 2009, subject to company exemptions from the mortgage loan originator licensing requirements for employees of certain mortgage lenders in Colorado. On August 31^st, 4,560 loan officers were notified their licenses were officially deactivated. Today only 4310 loan officers in the State of Colorado have active mortgage lender licenses according to the Department of Regulatory Agencies. (Incredible, isn't it? In one day our loan officer population dropped about 50%!)

Even though licensing is required few sellers, buyers, or even real estate agents think to verify the licensing of their mortgage lender. This is especially true in the case where the lender is being referred by a past client or because of a past business relationship. For instance if a buyer purchased a home last year, there would have been no state licensing required.  If that same buyer decided to refinance their home during the recent refinance market this year, there is a good chance they would go back to their original lender who may or may NOT have adhered to the licensing requirements for mortgage lenders in Colorado established in the past year. Similarly, if a real estate agent has been doing business with a loan officer for the past several years, they might just assume their preferred lender complied with the states licensing laws.

What's the risk of not working with a licensed mortgage lender in Colorado? It is the Department of Regulatory Agencies, known as DORA, actually holding the individual loan officer responsible for minimum educational requirements and assures they maintain various types of insurance protecting consumers. Remember, too, this licensing is based on an INDIVIDUAL basis, not company licensure.

Think of it this way: would you even think about working with a real estate agent that was not licensed? Then why would you not verify that you are working with a mortgage lender in Colorado that is licensed?

Links are listed below for the following:

Exemption List

Approved Mortgage Lender List

Interesting blog, so much so that I decided to reblog. If you follow the links in this blog you will see that two of the banks are now one, and the third bank referenced is today referred to as one of "The Big Four Banks". Should I say interesting or frightening???

We've been hoping and watching HR 3044, which was a proposal to put an 18 month moratorium on HVCC but suddenly there is a new and better one out there: HR 3126. This bill is currently being reviewed by the Housing Finance Committee and is expected to go before the House for a vote within a couple of weeks!! And before Senate for a vote maybe by year end???

There are amendments to this bill that will:

1) nullify HVCC because it has "dramatically damaged the home mortgage process across the nation

2) request a more gradual implementation period of the new TILA requirements allowing HUD and the Federal Reserve to coordinate their regulatory efforts between RESPA and TILA (it really IS ridiculous right now, isn't it???)

3) and prohibit the government from capping the amount of compensation paid to mortgage lenders regardless if they are state chartered or federally chartered, big or small.

There is hope that someone out there is still sane. I, for one, had begun to question that!

What can YOU do? KEEP THE PRESSURE ON!! It seems, someone is listening to our pleas to stop the madness!! Call your representatives and tell them we need them to support HR 3126!

To track of the status of the bill, click here: HR3126.

I don't really reblog many things... and never do I reblog jokes, but his one has some merit worth consideration:

This September, our company closed $70 million more than any other September in our history! BUT the really great news is that 80% of our production resulted from purchase money transactions!! Yet, we only have offices in 9 states (by choice, obviously!)

How exciting is that? And, I for one, believe we have found the perfect solution to the balance between the product and security of working with a mortgage banker vs the service and pricing of a mortgage broker: It's called a correspondent lender, which you really don't hear a lot about.

A correspondent lender differs from a mortgage broker because we underwrite our own loans and fund with our own money. This allows us to provide service limited only by our internal systems. "Dual accountability" is the term our owner, Bill Starkey, uses to keep production and service both working toward the common goal that supports our tag line: "... a different kind of company where people come first."

Yet we are able to have product diversity that limit products (and guideline interpretations of) mortgage bankers. Let's face it, there are many mortage bankers that are very good at SERVICING loan payments, but not as focused on the service it takes in ORIGINATING loans. Why is that? Maybe because they know they can buy all the new loan originations they want!

Yes, we do have the best of both worlds, which is a very good reason to take another look at doing business with a correspondent lender. I think correspondent lenders could be the upset in the "which is best" race between "mortgage bankers" vs "mortgage brokers"! Just something to think about...