Mortgage Secrets…Learn What the Experts Say

FUNDS TO CLOSE for FHA

As the up and downs continue, many of my clients call wondering how they are going to get the funds needed to purchase a home. There are many alternatives available depending on their own particular situation but FHA may be the answer they are looking for. ***Some of these FHA guidelines may have additional investor and industry restrictions so verification per loan is necessary.

After today’s election, I believe that many people are wondering if the market will return to “normal”. Personally I think we are in for a very long hall in regards to the ups and downs of not only the real estate market but the economy in who. Regardless of anyone’s personal views, it is always prudent that to meet with your client to determine how much and from where they are going to get their down payment and closing cost funds. Below are just 3 of the 22 Important Ways to know well ahead of the closing date before your client starts shopping. Make your transactions smooth sailing from start to finish by being knowledgeable from day 1.

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FUNDS TO CLOSE for FHA

With the extreme ups and downs of the current market, I know many of my clients are wondering how they are going to get the funds needed to purchase a home. But within the FHA guidelines, there are many alternatives. ***Some of these FHA guidelines may have additional investor and industry restrictions so verification per loan is necessary.

As we approach the end of the year, there are many people who are wondering if they should scramble to buy a home now or wait until early next year. Whether your client decides to purchase now or wait, it is prudent that you meet with them to determine how much and from where they are going to get their down payment and closing cost funds. Below are just 3 of the 22 Important Ways to know well ahead of the closing date before your client starts shopping. Make your transactions smooth sailing from start to finish by being knowledgeable from day 1.

1. Collateralized Loans~
   Funds can be borrowed for the total required investment as long as satisfactory evidence is provided that the funds are fully secured by investment accounts or real property. Such assets may include stocks, bonds, real estate (other than the property being purchased), etc. We can also use funds that have been borrowed against collateralized assets such as a car, boat, etc.In addition, certain types of loans secured against deposited funds, such as signature loans, the cash value of life insurance policies, loans secured by 401(k)s, etc., in which repayment may be obtained through extinguishing the asset; do not require consideration of a repayment for qualifying purposes. However, in such circumstances, the asset securing the loan may not be included as assets to close or otherwise considered as available to the borrower.An independent third party must provide the borrowed funds. The seller, real estate agent or broker, lender, or other interested third party may not provide such funds. Unacceptable borrowed funds include signature loans, cash advances on credit cards, borrowing against household goods and furniture and other similar unsecured financing.

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Article Written by Teresa Boardman of Inman News

I rarely put up articles that others have written but, in this case, it was so well written that I felt it necessary to give credit where credit is due!  Enjoy!

I am writing this today from Main Street America, the very same street that we have heard about on the news as the $700 billion financial rescue package was being discussed. I can almost see the street from my desk, but not quite.

It is lined with trees and brick buildings with shops in them. There are several restaurants, some bars, coffee shops and antique shops. The business owners I have talked to tell me that business is slow, it has been for months, and will continue to be slow in the coming months.

Our country is in the midst of an economic catastrophe, fueled by huge amounts of consumer debt that cannot be paid back to the financial institutions that lent the money. I know this is an oversimplification, but it gets at the heart of the problem. If borrowers cannot pay back the loans, the banks that lent the money are in jeopardy of insolvency, which puts our global economic system at risk.

The Republicans blame the Democrats, who blame the Republicans, and we all blame the lenders. They lent money to people who could not pay it back. There were subprime loans, no-doc loans, interest-only loans, exotic loans and no-down-payment loans, as well as widespread mortgage fraud.

There are a lot of people in this country who are financially overextended. Our national government is overextended to the tune of $10 trillion. We are nation of borrowers. For some, it starts with student loans. They seem to be the gateway loans that kick off a future of borrowing for cars and houses and using credit cards to buy everything else.

Americans are in debt before they are old enough to legally drink. The credit industry has a role in all of this, as they mail credit-card applications to children, but they would be out of business if people did not want to borrow money.

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FUNDS TO CLOSE for FHA

With DAPS (Down payment Assistance Programs like Nehemiah) going away and the increased requirement of 3.5% buyer contribution, I wanted to share with you the FHA guidelines of FUNDS TO CLOSE. ***Some of these FHA guidelines may have additional investor and industry restrictions so verification per loan is necessary.

So how is your client going to get the necessary funds to qualify for an FHA loan and close their loan on time? After all…they’ve been looking for months and months and now they finally found the right home, got their offer accepted and you’re ready to help them move right on in.

Below are just 3 of the 22 Important Ways to know well ahead of the closing date and quite honestly, you should know these before you start looking for a home or helping a client look for a home. If your mortgage broker or lender does not know these restrictions and possibilites, it’s time to look for someone who is informed and can help to make your transacitons smooth sailing from start to finish.

1. Earnest Money Deposit~
   If the amount of the earnest money deposit exceeds 2 percent of the sales price or appears excessive based on the borrower’s history of accumulating savings, the lender must verify with documentation the deposit amount and the source of funds. Satisfactory documentation includes a copy of the borrower’s cancelled check. A certification from the deposit-holder acknowledging receipt of funds and separate evidence of the source of funds is also acceptable. Evidence of source of funds includes a verification of deposit or bank statement showing that at the time the deposit was made the average balance was sufficient to cover the amount of the earnest money deposit. Read the rest of this entry »

What is going on with the LIBOR index? 

First, LIBOR stands for London Interbank Offered Rate.  It’s often been associated with those who have “sub-prime” mortgages but, they are quite popular amongst those with “A” paper loans as well.

If you have a loan that is tied to the LIBOR index, you should keep reading!

LIBOR as well as the actual Fed Fund Rate are rates that banks charge each other.  And while the Fed has set the Fed Funds target rate at 2%, banks are jacking this up closer to 6%.  The same is happening to LIBOR, which is jumping like the chicken.  The reason is due to a lack of confidence that banks will make good on funds borrowed from each other.

If you want a pro-active review for your home loan, which only takes a few minutes by telephone or email, you can download our mortgage review form at www.silverstarfinance.com/annual_review. Just fill out the form and fax it to me with a copy of your most recent mortgage statement(s). 

Of course, valuations and qualifications are not the slam dunk they used to be, so I will do as much research as possible for those of you who call or for those you care enough about to refer. You know someone that owns a home, right? Even if everything is ok now, you can’t put a price on the peace of mind in knowing that everything will be ok in the future.

Hope you are trying to have a great day!

Warmest regards,

Kurtis Kooiman, CMPS
Certified Mortgage Planning Specialist
Silverstar Finance, Inc.
Society of Financial Awareness
Kurtis’s Active Rain
Kurtis’s LinkedIn
Bus: (714) 892-1002 Ext. 313
Fax: (714) 892-1092

P.S.  So you think Loan Modification requests don’t work?  Think again!

Loan modifications by banks and thrifts rose substantially in the second quarter, but delinquency and default rates also increased, according to data compiled by the Office of the Comptroller of the Currency and the Office of Thrift Supervision. Combining their data for the first time, the OCC and the OTS said new loan modifications by banks and thrifts increased by 56% from the first to the second quarter of this year. Repayment plans on home loans serviced by banks and thrifts also increased, but by just 8%. All told, banks and thrifts servicing nearly 35 million home loans engaged in some form of loss mitigation on 208,250 mortgage loans in the first quarter and 252,508 loans in the second quarter. Of the total, 92.6% of the loans were performing, down from 93.4% in the first quarter. The share of loans in foreclosure rose from 1.4% in the first quarter to 1.6% in the second

“Small opportunities are often the beginning of great enterprises.” ~ Demosthenes

If you thought last Monday was wild on the news from Fannie and Freddie, the headlines that lead us into this week are even crazier. First, Mortgage Bonds are up sharply, which should lead to
much better home loan rates, especially for home purchases - time to get off the fence, and also for great refinance opportunities, just what we have been expecting, call me to see if this makes sense for you. Remember you can utilize your equity to purchase more real estate.

The week begins with more fallout in the financial sector. Lehman Brothers is done after 158 years, thanks to their over exposure to sub-prime mortgages. Another casualty that was narrowly avoided was Merrill Lynch, which is being acquired by Bank of America, again due to their greed and over exposure in the risky mortgage business. Also on the ropes is insurance giant, AIG, as they try to raise cash quickly to stay afloat.

So where is the good news you’re asking??? What do all these headlines mean to YOU? It’s a time to look for opportunities. There are many and where do you begin?

To start, there are MANY smaller opportunities or shall I say tools to utilize that are now available by way of The Fed. working on bailing out the American public.

“HOPE for Homeowners Act of 2008″

$7,500 Home Purchase Tax Credit

Seller Interest Rate Buy Down = Easier Qualifying

Fannie & Freddie Bail Out = lower interest rates

FHA loan limits & 100% financing

The huge opportunity is of course simply the shear number of homes that are “On Sale”. Can you remember the last time Southern California property was this cheap?

Find out why, when, how, and what. Get your questions answered. Make smart financial decisions. Come to our FREE educational workshop. That’s right, I said FREE. Invite Your Friends & Family this Saturday the 20th at 10am

Sneak Preview

Just wanted to share with you some GOOD NEWS out of all this crazy, roller-coaster-of-a-ride we call a market. What a GREAT time to be looking to buy a home!

be+DO=have

“My greatest point is my persistence. I never give up in a match. However down I am, I fight until the last ball.” ~ Bjorn Borg, tennis player

Washington has been busy lately. In one of the most rapidly approved bills in memory, the Housing and Economic Recovery Act was passed into law, and could have significant implications on the housing and mortgage industry. The constant volatility in the market requires constant change and A LOT of persistence and perseverance. You can count on me to stay ahead of the game. And while there is a lot to share with you, I wanted to reach out to let you know a couple of things that could impact you or someone you know and care about right away.

The first thing that stands to impact many homebuyers is the elimination of what is known as seller down payment assistance for FHA loans. Seller down payment assistance is where a home seller contributes money to a down payment assistance company who in turn provides a legal grant to the homebuyer. This has helped over 900,000 families obtain homeownership since 2000.

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Quote of the Week:

Know What You Don’t Know

“The doors of wisdom are never shut.”

Benjamin Franklin
~ Inventor    

Good Afternoon!

Please take a moment to watch this very quick video about something I’m going to try out, Question and Answer emails / videos:

http://www.vimeo.com/1610110

Forward this email to your friends and family so that they can watch the video, too.

QOTW - Q & A Introduction http://www.vimeo.com/1610110“This week I talk about how doing the opposite of what we’re taught or what we think we should do is usually the right thing to do, surprisingly. Also, I’d like to introduce my new Question and Answer idea that I hope will be useful to all of my viewers. If you have any questions that you would like me to address by video, email, or privately, send them to me via email at kkooiman@silverstarfinance.com.

Here is an example of a recent Q & A that I read online through one of the companies I learn from: Read the rest of this entry »

Right now we are in a Different time…right?  And like any rough time in our economy, being positive and truthful is necessary.  Most of what you are hearing and seeing is negative and down right depressing.  But I have to say, if you’ve been reading my weekly emails [ come on, I know you have =) ], you will have noticed that there are a lot of positive things happening not only at Silverstar but in the real estate market as well.

When was the last time that you could buy a home in Southern California at such a discount?  And when was the last time you could buy cash flowing investment real estate?  And think of how much lower your property taxes will be or could be?  Like I said, Better is Always Different.

Well Guess What???  The time is now, even Alan Greenspan agrees.

Alan Greenspan told the Wall Street Journal last week that we are witnessing a 100-year event. That could possibly mean that in his opinion our housing crisis surpasses that of the great depression of the 1930s. (Different)

“The truth is, this problem will not be fixed from the top down. It will only be fixed from the bottom up. Courageous positive individuals need to take action now to clear excessive inventory (one house at a time) before pricing will normalize.” (Better)

Even though the government is trying to implement new policy to help homeowners survive, the market turn around will ultimately come from homes being bought by people who are qualified to buy their first home and investors who are purchasing rental properties.  Everyone needs a roof over their head so don’t think that real estate is a bad investment or it’s a bad time to buy.

True, this is a different (better) time to buy that and requires different strategies and qualifications.  I know what it takes to buy a foreclosure or an auction property based on experience, not based on what someone else is saying.  I also know the importance of financial security and how to help you develop a road map to manage your debt and cash flow.  We have been helping our clients for years develop their blue print.  Change is good, working with someone who changes is even better.

How Silverstar is Different
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With foreclosures steadily on the rise, one of the questions that has been surfacing is the possibility of homeowners simply walking away from their mortgage because they owe so much more than someone who just bought a foreclosure on the same block.

I’ve heard the term “buy & burn” used lately to describe someone who goes and purchases a new home that could even be in the same neighborhood at a cheaper price and then turn around and walk away from their current home and loan. The resulting default or foreclosure wont matter to them at this point because they’ve already closed escrow on a new less expensive home. I guess they just have to make sure they are set for a few years while their credit takes a huge hit.

Yes this is fraud and it is definitely NOT the right thing to do but people are doing it. I’m not sure if it is desperation or simply they don’t feel obligated to stick to what they originally agreed on. Either way, I think people that are doing this will definitely get what’s coming to them down the road and I don’t know how they could sleep at night.

What happened to personal responsibility? I guess if these people were lending out their money, they’d be ok with someone sticking it to them as well?!! ha ha. It’s just sad that so many people made really bad choices and now they are just dumping their problems onto everyone else across the board! Okay, Ok enough with my personal tirade….back to the point.

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