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Mortgage Loans and Interest Rates

VA Loan Limits Rise In High Cost Areas – New Rules Help Veterans And Their Families

The Honoring America’s Veterans and Caring for Camp Lejeune Families Act of 2012 was recently signed into law. The act provides for the needs of veterans, their families, and survivors through improved healthcare, housing, education, and memorial services. For Veterans who own a home or are considering buying a home the act has several benefits. A major change has been made to the VA Loan Limits in high cost areas. Late last year the were reduced by significant amounts in some areas. Read the rest of this entry »

New FHA Program Lowers The Cost of Refinancing!

Attention home owners in Maryland, Virginia, the District of Columbia and the other 48 states. Now may be the time to refinance if you have a mortgage guaranteed by FHA. For the past year of so the Federal Housing Administration (FHA) has been increasing the Mortgage Insurance Protection (MIP) premiums. The increase in premiums has made it unattractive for people who have loans guaranteed by FHA to refinance because the increase in the MIP has more than offset the lower interest rates. Effective June 11, 2012 the rules have been changed and it will make sense to refinance your FHA loans to a lower interest rate. Read the rest of this entry »

Thinking of Buying a New Home? Why Wait? Residential Real Estate Is Ready to Recover!

Thinking of Buying a New Home? Why Wait? Residential Real Estate Is Ready to Recover! The news in residential real estate hasn't been good for the past few years but things are starting to change. If you've been sitting on the sidelines thinking about buying a new home now may be the time to jump into the game. Read the rest of this entry »

What’s In The President’s Plan To Help Responsible Homeowners and Heal The Housing Market?

What's In The President's Plan To Help Responsible Homeowners and Heal The Housing Market?

I make my living in the housing industry. The whole country has suffered the past few years because of the problems created by the mortgage mess. The housing industry is still struggling to get back on it's feet.

In his State of the Union address and in subsequent speeches President Obama has been talking about his "Blueprint for an America Built to Last."

I got a copy of the plan to see what it is all about. To see a copy click on:

President Obama's Plan to Help Responsible Homeowners and Heal the Housing Market

While I want as much as anyone for the housing market to come back reading the plan I have to wonder if it's a plan for recovery or a political document to help with getting elected.

A big talking point has been the Homeowner Bill of Rights.

The first two points are:

Access to a simple mortgage disclosure form, so borrowers understand the loans they are taking out.

In 2009 the government designed and mandated that the lending industry use the current Good Faith Estimate now given to borrowers. I took hours of classes learning to complete it correctly and real estate agents took hours of classes learning the new HUD1 form. I'd welcome a simple form but blaming the industry for the current confusion is just wrong.

Full disclosure of fees and penalties.

It seems they don't know they also passed legislation holding lenders responsible for the fees that are disclosed to a borrower at application. A lender is financially responsible for under disclosingfees (even fees they don't control) including those charged by title companies and state and count recording fees. Anyone who has been to a settlement is familiar with "Charges That Cannot Increase, Charges That in Total Cannot Increase More Than 10% and Charges That Can Change."

The plan also calls for Moving the Market to Provide a Full Year of Forbearance for Borrowers Looking for Work.

Now don't get me wrong. This crisis has created a lot of pain for a lot of people and they need help. But is letting them not pay their mortgage for a year a solution to the problem or are we "kicking the can down the road" for someone else to worry about.

Who hasn't heard Congress and the President rail against the abusive loans that caused the crisis. (A side note: all the loan types weren't bad. They just got to liberal in underwriting and approving them)

The plan calls for Providing Non-GSE Borrowers Access to Simple, Low-Cost Refinancing. It has been proposed that "The refinancing program will be open to all non-GSE borrowers with standard (non-jumbo) loans who have been keeping up with their mortgage payments. The program will be operated through the FHA."

Simple and straightforward eligibility criteria. Any borrower with a loan that is not currently guaranteed by the GSEs can qualify if they meet the following criteria:

* They are current on their mortgage: Borrowers will need to have been current on their loan for the past 6 months and have missed no more that one payment in the 6 months prior. (Sounds reasonable to me.)

* They meet a minimum credit score. Borrowers must have a current FICO score of 580 to be eligible. Approximately 9 in 10 borrowers will have a credit score adequate to meet that requirement. (If you want to get a new loan most loan programs want a minimum 640 FICO score. By meeting certain criteria you can lower the FICO score to 620.)

Streamlined application process: "To determine a borrower's eligibility a lender need only confirm that the borrower is employed." (Sound's like the no-doc or no-income loan they have said were bad and don't allow any more.) "Those who are not employed may be eligible if they meet other requirements and present limited credit risk." (I'd love to know what those requirements will be.)

The program will be funded by "Creating a separate fund for new streamlined refinancing program. This will help FHA better track and manage the risk involved and ensure that it has no effect on the operation of the existing Mutual Mortgage Insurance (MMI) fund." (So were taking loans that were made in the private sector and giving them a government guarantee and if they lose money well take it out of the left pocket instead of the right pocket? To me a loss is a loss)

Now to pay for the program the Refinancing Plan Will Be Fully Paid For By a Portion of Fee on Largest Financial Institutions: The Administration estimates the cost of its refinancing plan will be in the range of $5 to $10 billion, depending on exact parameters and take-up. The cost will be fully offset by using a portion of the President's proposed Financial Crisis Responsibility Fee, which imposes a fee on the largest financial institutions based on their size and the riskiness of their activities - ensuring that the program does not add a dome to the deficit. (And do you thing "the largest financial institutions" are going to absorb that fee or is it more likely to be passed on to all consumers through higher fees and other cost. Are you aware the "Two month tax holiday passed in December is being paid with higher fees being charged by Fannie Mae, Freddie Mac and FHA. The new fees will be in effect for 10 years to pay for a 2 month thx holiday.)

I've been getting a lot of questions about HARP2 refinancing program which was announced in November. It's my understanding that the automated engines used to underwrite these loans will be ready in mid-March. I still an waiting to get details of what the requirements will be.

I'd love to hear your feedback on the proposed Plan To Help Responsible Homeowners and Heal The Housing Market.

 

Google Me Whats In The Presidents Plan To Help Responsible Homeowners and Heal The Housing Market?

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Alan Gross

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Home Prices and Affordability – Is Now The Time To Consider Buying A New Home?

Home Prices and Affordability – Is Now The Time To Consider Buying A New Home? I've been saying for the past 6 months or so that we have been in the "Perfect Storm" to buy a home with the combination of low home prices and low interest rates. It seems that the storm is starting to subside. Home prices in many markets are starting to show appreciation. Read the rest of this entry »

Why Are Mortgage Interest Rates Going Up? It’s Not What You Think!

Effectively, that means that all Conforming loans will increase almost 0.125% in interest rate. With FHA you will see and increase in the Mortgage Insurance Premium (MIP). It could be in the monthly MIP, Upfront MIP or both. Read the rest of this entry »

Where Do I Find Information About VA Mortgage Loans?

Where Do I Find Information About VA Mortgage Loans? Am I eligible for a VA mortgage loan? How much can I borrow? What does a VA Loan cost? How do I get a Certificate of Eligibility? What are the advantages of a VA loan? Read the rest of this entry »

Are Home Prices Going Up In The Washington DC Area? Has Housing Finally Bottomed Out?

Are Home Prices Going Up In The Washington DC Area? Has Housing Finally Bottomed Out? In the New York and Portland areas, prices edged up 0.1 percent. Prices rose 1.2 percent in the Washington, D.C., area. Read the rest of this entry »

Is Buying A Home Really Cheaper Than Renting? The Answer Will Surprise You!

Is Buying A Home Really Cheaper Than Renting? The Answer Will Surprise You! With all the problems the economy has had in the past few years, one piece of good news has surfaced for those wanting to buy a home. In 74% of of the country's 50 largest cities buying was cheaper than renting in July. This was reported by the real estate web site Trulia. Read the rest of this entry »

How Low Can Mortgage Interest Rates Go?

One of the effects of the downturn is stock prices has been to reduce long term interest rates. Mortgage interest rates are now dropping towards record low levels. The question is how low will they go. And will the mortgage interest rates stay low for very long? In the past year they have hit low levels only to rebound quickly. Read the rest of this entry »
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