For Sale By Owner Program

An active for sale by owner program can really help you find good mortgage leads and it is a real value to the home seller. Actually, if you know your stuff it can really get the homeowner off to a great start and amplify his chances of selling his home by himself. You can't get more Win - Win than that.

Most programs consist of a fsbo manual with good information about advertising, appraisals, preparing the home, home warranty, and most importantly a guest register or sign in log. The manual will usually also contain a blank sales contract and real estate disclosures required for that state.

Your most important investment is the time you spend with the home seller going through the manual and teaching them about the contract and disclosures.

During that time you should also explain about the different loan types and the ramifications to the seller. You know, like VA paper work and inspections or tricky FHA appraisal stuff. There is also a good side to VA and FHA an that is that the seller can help the buyer get into the home with seller concessions, paying closing costs and in helping with the down payment.

You can teach them that is it better to pay closing costs and/or the down payment than to lower the selling price. This approach will cost them less and will actually find more qualified buyers. If you don't understand this concept and the numbers you need to view it at for sale by owner advantage.

It is very important to put these options in the advertising. It will help to bring out the serious qualified buyers. These are the buyers that will sign the guest register, ... and you will follow up on to pre-qualify for the home seller.

You know, I say this all the time and maybe you have heard it before but it is so absolutely true that I have to keep saying it. Fifty buyers may view this home, ... only one will buy it. The other 49 will still need financing. If you can't turn some of these potential home buyers into future clients, you are in the wrong line of work. I really mean this.

I put together a program for a company I used to work for. This program was enormously successful.

I have that manual in pdf format that you may download free. Take a look at it, give it some though, and think about how you would adjust it to fit your level of commitment.

The pdf format manual is free. If you like it and want the MS Word files so you can quickly modify it for your letter head or what ever, we do charge a small fee for those files. But hey, this pdf file will give you lots of ideas and you can develop your own program. FSBO Programs really work if you commit to working them.

Download the pdf for sale by owner manual and give it some thought.

I'll be happy to coach you on your program or answer any questions. Good Luck!

Converting Existing Homes To Rentals

All of the new mortgage programs and guidelines have got everyone feeling uneasy. Underwriters are leaning conservative and over document. Consumers are just baffled at some of the new documentation requirements. Here is a question I just received from a consumer that illustrates just that.

My question has to do with the Underwriter of a Home mortgage loan. This will be our second home. The mortgage is a couple of days from closing and the underwriter is now asking for a list of items before final approval. The items requested are not items at all, they're questions such as: Must provide an acceptable motivation letter stating why we would move from a higher price house to a lower price home? and must explain what we are going to do with the first home? (these questions really seem out of line to me for the simple fact that we were already pre-approved and frankly what bearing does it have on their decision). The last statement from this item list is the one that made me feel like i am being walked on and lead by the noise: Must be reasonable and the underwriter must be satisfied that the move makes sense for these borrowers. Can these people really play god like this? Any advice/input would be great.

I have a lot of empathy for these people and I'm sure if I were in their place I would feel that this information is none of the underwriters business too.

The guidelines have tightened up and underwriters are overwhelmed with all the new documentation requirements. These people are having to deal with the Mortgagee Letter that came out in September of 2008. It's kind of scary. You can read the letter at this link: http://va-guidelines.blogspot.com/2008/10/fha-debt-to-income-rental-income.html

see ya.

Financial Crisis - Mortgage Failure

We have been in the mortgage and financial industry for a long time. We are asked, everywhere we go, "What really caused this financial crisis?".

We stumbled across this video the other day and thought we should share it with you because it covers the cause very well. Our intent is not to offend, but to help you understand the "how we got here" question.

This video moves very fast but it covers the facts on how we got in this financial mess. You may not like what you will see here, ... but it is all true. You can google it.

So ... watch it twice. Send it to your friends.

There are so many lies out there how can anyone know what is real.

This is real.

Jerry and I are in the mortgage business and we have watched it unfold.






If for some reason this video does not play here, you can watch it at: http://www.youtube.com/watch?v=1RZVw3no2A4


Wishing you the best.

Connie

Non-Purchasing Spouse - FHA

The mortgage guidelines on a FHA loan regarding a non-purchasing spouse are ambiguous and difficult to understand. I get questions on this topic month after month.

There are many reasons why a spouse would/should be left off the mortgage application. One is bad credit. Another reason would be income. The primary borrower is determined by the largest income. If that person has poor credit the only way around it is to leave them off the application.

However, this could be a catch 22 if the other spouse does not have enough income to pay all the debt. Is the non-purchasing spouse's credit examined or used in the DTI calculation? The answer is no and yes.


Does the non-purchasing spouse go on the title? The answer is yes, no, maybe. Confusing??

The answers lie around the state the property is in and if it is a community property state. That helps a little but it is still confusing. Remember, confusing or not, right or wrong, you always follow what the underwriter or closing instructions determine.

You can take a look at the actual guideline wording at FHA Guidelines.

Hope for Homeowners - H4H - Good? - Bad? - Ugly!

Hope for homeowners! I can't believe they picked that title because it is so deceiving! In fact, I would say it is just the opposite.

The homeowner who goes for this is totally screwed because he gives up all future appreciation. (he may as well rent) I guess what he gets out of it is, ... is, ... well, I guess he doesn't have to move. I would like to say that there is no foreclosure on his credit report but my gut says that this product will show on his report and he will be dinged for it. (Any bets here?)

Let me clarify future appreciation. This program creates artificial equity for the new mortgage lender at the expense of the old mortgage lender which must take a 10% bigger loss and accept the new loan payoff as paid in full.

This new loan essentially "mortgages" the new/created 10% equity and any (?) future equity to the government and to any subordinate lien holder that agreed to release their lien. If he stays in the home for the rest of his life, or at least 7 yrs he will get the benefit of appreciation after that point. Most people move every 4 to 7 years. Do the math.

OK, but look at the math this way. If the homeowner had a 2nd mortgage for $30,000 and gave up their lien for a promise of future equity from the new loan, how long would it take for the home to appreciate $30,000?

Oh, and this lender really only gets a "portion of the equity". What does that mean?? I haven't found the fine details yet. Understandably hidden if they even exist at this stage!

So, ... the original lender takes the major hit here because he not only takes the loss from the equity in the declining market, he also takes an additional 10% loss because he has to give it to the new lender. Remember, the new loan is only 90% LTV. And, he is suppose to smile about this.

The home owner is screwed but doesn't have to move. The old lender gets the royal work over but maybe that is justice although I think the blame is placed in the wrong place here as this lender was only following government direction!

The BIG looser is the American people because all our brilliant elected officials have done is spread the loss into the future to cover their ass and given the government "owner rights" to our equity into the future. The government is now in our nickers!!!

WE LET THIS HAPPEN!! Wow, I am really up set about this stuff.

I have added to our site the underwriting guidelines to the Hope for homeowners program. Please go and review this information and then please comment here and change my mind about the smoke and mirrors the politician are using to destroy our Independence and freedom. Please, tell me that I am wrong.

We have also put up the guidelines for the FHA Secure program. I wasn't a big fan but when I compare it to the H4H it is a great program. Few will qualify for it but at least it doesn't sell our children down the road! Review it here: FHA Secure - Rescue Program

Please come back and comment.

Connie

Emergency Economic Stabilization Act of 2008 - HR 1424

I don't know how you feel about all this economic bail out stuff but it really gets me angry. I'm not going to share my opinion because it doesn't matter. However, I think everyone should read the bill and develop their own opinion based on facts, not media hype.

I did some research and have links below of the pdf files so you can read it for yourself, or download it and read it later. I would like to say that in my opinion all bills going up for vote should be available to the public BEFORE they vote. Unfortunately, that is not the case. Maybe we can change that.

IF you want to just download the files to read later you only have to right click with your mouse and select "save target as", then tell it where you want it saved on your computer. I usually just put the stuff on my desktop.

This link is to the pdf file on HR 3997, the Emergency Economic Stabilization Act of 2008 that was voted on in the house of representative on the 28th. This is the original version. HR 3997

This is HR 1424 which is the revised version of the bill (HR 3997) and was actually passed. HR 1424

This link is a one page summary of the Act. One Page Summary

This link is for the section by section summary. It is much better than the one page summary. section by section summary


This stuff is worth the read. Post your thoughts.

Economic crisis - we will survive

What actually created this economic crisis? I guess it depends on who you ask. I will say though that I'm really tired of all the spin everyone is putting on it.

The facts are in our history and you can trace it back or chart it if you would like. Does it matter which political party contributed to this disaster? I don't think it really matters as far as the past is concerned but you need to understand the party platforms so we get the right people in office to fix it.

Here is a short but very fast moving account of how we got here. It moves pretty fast, I actually had to watch it twice.

Before you watch it I want you to understand that I am not pushing politics here. It's a good video because of the facts. I am an independent and don't support either party but that is a different subject.



Incase the video has been taken down, you can watch it here on YouTube.

Or, you should be able to view it here on this blog.

My personal opinion is that we should not have a Bail Out. Let the pieces fall and it will clean out all the bad guys.

I think a lot of "how bad it will be" is hype too. Do I have any facts to base that on? Just my gut because they are not giving us any real information so we can make an intelligent decision. You know about the mushrooms, right?

Mortgage Melt Down - Who's Fault?

The Real Culprits In This Meltdown from Investor's Business Daily

FHA Gift Funds - HR 6694 - New Hope

I'm sure everyone is aware that on Oct 1st, HR 3221 will put an end to seller funded gifts for a buyers down payment on an FHA mortgage. The gifts are generally channeled through Nehemiah or Ameri-dream. There are strong arguments on both sides of this issue and I won't bore you by going into them here.

I was about to update my websites when I ran across an article on inman.com: Congress weighs reprieve for seller-funded gifts. HR 6694 would allow builders to continue providing down payment assistance.

I'm not sure how I feel about this yet but I will say the proposal does add more control or safe guards if you will, for the program. HR 6694 will allow borrowers with credit scores of 680 or more to use seller-funded down payments. A credit score of 620 to 680, if using down payment assistance would pay higher insurance premiums.

Borrowers with scores lower than 620 will not be allowed to use these gift funds until sometime in 2009 if HUD wants to expand the program. The issue here is FHA's insurance requiring taxpayer subsidies. The article goes into more detail so you should go read it.

I do like the controls they are trying to apply. I would do one more thing if I had a voice. I would make these gifts direct to the borrowers at closing and eliminate channeling it through Nehemiah or other such organizations. These organizations charge a large fee which helps to inflate the loan amount. Put it in the guidelines and eliminate the unnecessary middle man.

Home buyers with good credit need access to mortgages with no down payments. If HR 6694 does not go through median income families do have another choice that many people don't know exist. That option is the 100% LTV Rural Housing Loans. It is a very good loan and easy to qualify for. Go to this website and review the benefits and guidelines. 100% housing loans.

Zero Down Payment Mortgage

100% financing is still available in the mortgage market. I know, you listen to all the financial doom and gloom from the media and you would think every lender just locked their doors and went home. It's not a good situation but it is not as bad as the media wants you to think.

Remember, it is also an election year and every election year, both political parties talk about how bad the economy is until we believe them. Then one is elected and they save the day, ... and the economy. Don't ya just love it!!

Here is a news flash. People are still buying homes. Yes, mortgages are available and everyone should realize that this is the best time to invest, or purchase a home. (When the price is low.) Have you ever heard the term "A Buyers Market"? That is what we have here.

History shows that Real Estate and our economy runs in cycles. Back in the late 70's and 80's it was a 4-5 year cycle. You could graph it. Then, when the sub-prime loans were forced on lenders (early to mid 90's) by government regulation the cycle changed. They became longer and were more intense until it all caught up with us and here we are, like it or not.

I don't like it either but more than that I am tired of all the finger pointing and blaming, and dreading, and media hype. I don't believe a "bail out" is the answer but obviously, it is not my choice or yours, or we the people's choice. Our elected officials will make the decision and base it on "no stronger ground" than what you and I base our own opinion on.

Alright all ready! So do it, what ever it is, so We The People can get over it and move on. We have been through worse times and we will survive and prosper. I think it is in the DNA of the USA. (sorry, that was really bad) We survive in spite of the people we have elected to office.

If you must have 100 Percent financing it is available, ... just not in the form of previous no-doc, no-verification sub-prime loans. You have several options. FHA, VA, Rural Development, or special products based on perfect credit and stability. The USDA Rural Development product is one that few remember or know about.

USDA Rural Development has two programs: Direct and Guarantee. Their Direct program is a mortgage provided directly though the rural development office and your income can only be 80% of the median income for that area.

The Guarantee program on the other hand is provided by USDA approved lenders and Broker originators. It is a guarantee program, there is no subsidy or recapture, and the income restrictions allow up to 115% of the median income after special adjustments.

This is a 100% LTV mortgage based on the APPRAISED value, not the purchase price. The credit guidelines are very flexible and the guidelines have no minimum buyer commitment and no maximum on seller concessions. Note: some lender policies may be stricter here and USDA will always respect the lenders prerogative.

OK, so let all of us get over the failure of our market, roll up our sleeves and move on to a brighter future. Remember, NOW is the best time to purchase, during a buyers market!

You can read more about the guidelines for the rural housing mortgage at: zero down payment

FHA Rescue Program - FHA Secure

The Housing Recovery Act of 2008, H.R. 3221 has the consumer and mortgage professional in a state of total confusion. This recovery act is suppose to be the answer for all the wrongs in the mortgage industry. It is so over hyped and misunderstood. My personal opinion is that it is a total boondoggle put together by a bunch of politicians to further their own agenda or make themselves out to be hero's, or to get their names in the headlines.

I get questions every day like the following: "I have a $40,000 tax lien on my home, can I get the FHA Rescue program??"

This individual was actually referring to the FHA Secure Program which was available in September of 2007 and will terminate December 31, 2008. (Mortgagee Letter 2007-11)

This is a good program but it too is overstated and misunderstood. FHA Secure does NOT modify or waive FHA underwriting guidelines and requirements. For a better understanding of this program you should read the mortgagee letter here.

Always,

Connie

102% LTV Government Guarantee Mortgage

I just came from a training class on a mortgage product I was totally unaware of. It is the USDA Rural Development Loan. Wow, those of you that follow my blog know that I am an advocate for the FHA Mortgage. It is a great loan and always has been.

But this loan product I have to say is better than the FHA program. The USDA Rural Development program is focused right on median income families. Here are some of the highlights:

• Funding up to 100% of the APPRAISED Value, not purchase price, or 102% if financing the 2% guarantee fee.
• There is no private mortgage insurance. (this is a big deal)
• Purchase loans only
• Flexible credit guidelines and income ratios
• There are income and property location restrictions.
• no reserves required
• no maximum seller concessions or gifts

Income restrictions mean if you make too much money you can't have one of these loans. Yes there is a debt ratio standard and that is 29/41 or if the home was built to 2000 energy code that can go to 31/43.

Property restrictions are based on location. This is a rural development program so as you can imagine, homes in large cities don't qualify.

The credit guidelines flexibility is totally unreal. If you have a credit score higher than 620, trade line information is irrelevant and not considered. Yes, that means late pays, collections and judgements. Bankruptcy and foreclosures don't have a timeline if there is a substantial reason.

Another great thing about this loan is that it is not an FHA loan and the lender does not have to be HUD approved. That means a lot of independent brokers now have a terrific loan product, better than an FHA product, they can offer to their customers.

I am really excited about this loan product because after all the mortgage crisis fall out there just are not many options for lower income families. This is a Great program and unless you are a total dead-beat you can still get into a home. The funny thing is this is such a great loan that the majority of home buyers actually have credit scores higher than 620. It's their best option and the interest rates are low!

Oh, these loans are only 30 year fixed rate. This is a hoot, I love it. If you have any questions about it send an email or ask in a comment.

Oh, I almost forgot. If you live in the state of GA there is a lender that specializes in this loan. I recommend you contact Peach State Mortgage for your USDA mortgage. This program is nation wide so contact me and I'll turn you on to the USDA office nearest you.

Always,

Connie

New Housing Law HR-3221 VA impact

The new housing recover act that was signed by President Bush is just jam packed with all kinds of great stuff. Well, maybe not all of it is so great but indeed some of it I was unaware of. I had no idea it made changes to some of the Veteran issues.



I'll be posting more about the other issues in the coming days but today is just about the Veterans Administration Changes. I think these are all good!

• It increases VA home loan limit for high cost housing areas


• It increases the time a Lender must wait before beginning foreclosure proceeding from three months to nine months after a service member returns from service AND gives returning soldiers one year relief from an increase in their mortgage interest rate.


• The act expands eligibility and increases the amount for special adapted housing benefits for the disabled. This is about money paid by the VA to help Vets make structural changes to their home to accommodate their disability.


• It also requires the Department of Defense to put together a counseling program for veterans and service members facing financial difficulties. It also establishes a moving benefit to service members who are forced to move out because their RENTAL housing was foreclosed on.

YEA!! I can really identify with the last bullet. This actually happened to my son. He was renting a lovely home in San Diego. He went to sea for 6 months. While he was at sea the house was foreclosed on and he was, ... up that well know creek. He lost his last month rent, security deposit and 50% of his household goods due to theft. When he got home, there was no home. He didn't even know where his stuff was.

This just happened in June of 2008. The stress he went through was unbelievable and he still has not recovered financially. I wonder if this benefit is retroactive and if so, to when?

He is back at sea again and I pray the home he is in now will be there when he gets back.

Always,

Connie

FHA Changes for 2008

The Housing and Economic Recovery Act of 2008 was signed by President Bush on July 30th but many people in the industry don't understand just what the changes are and how they will be impacted by them.

If those of us in the industry are confused just think how the consumer feels. Part of the problem is that there is so much information and it is hard to research because it is contained in many "ACTS" that were folded into the final ACT. Are you confused yet?

It may be the final ACT that means curtains for many of us. Sorry, that was really bad!

I have put together a page that covers what I have been able to unravel to this point. You'll find it here at Housing Recovery Act. I am still researching so that page will be updated as time goes by.

Here are some of the FHA changes and when they become effective:

• Minimum down payment has increased to 3.5%. effective Oct. 1, 2008
• Prohibits down payment assistance that is financed by the seller. (Nehemiah etc..) Oct. 1, 08
• Places a 12 month hold on HUD's implementation of risk-based premiums.

There are many other issues so visit Housing Recovery Act.

Good Luck

Bush Ready To Sign Mortgage Bailout

An article titled 'Homeowner Rescue Awaits President Bush's Signature' written by Julie Davis, an Associated Press Writer, covers the mortgage bail out better than most articles I have read.

WASHINGTON (AP) -- Congress approved mortgage relief for 400,000 struggling homeowners Saturday as part of an election-year housing plan that also aims to calm jittery financial markets and bolster the sagging economy. President Bush said he would sign it promptly, despite reservations. Read the article here

I'm not familiar with Julie Davis or past articles by her but this one is really on target.

The foreclosure rescue program has some good stuff and some not so good stuff.

• It includes $3.9 billion in funds to lenders (that caused the problem!) to purchase and fix up foreclosures so neighborhoods would not be dragged down in value. With this funding, won't they be more likely to foreclose than to work with the homeowner?
• $180 million for pre-foreclosure counseling
• The Federal Reserve will oversee Fannie Mae and Freddie Mac
• $15 billion in tax cuts and tax credits for first time home buyers
• $800 increase to the limits set on national debt

There are other issues with the program, one of which is that the tax payers will be the ones paying for Fannie and Freddie bail out. This is just wrong in my opinion. I don't think they should be bail out at all or by any means.

Here is another quote from the article and I include it because it cannot be said better:

Conservative Republicans were vehemently opposed to the bill, particularly
the help for Fannie Mae and Freddie Mac. Critics charge the companies enjoy
lavish profits in good times and wield their outsized political clout to resist
regulation while depending on the government to bail them out should they
falter.

Sen. Jim DeMint, R-S.C., delayed the final vote because Democrats refused
to allow him a vote on a proposal to ban the companies from lobbying or making
political donations to lawmakers.

"We can't have the people who are supposed to watch over these
organizations getting money from these organizations," DeMint said. "At least if
we're going to ask the American taxpayer to be on the hook for billions,
possibly trillions of dollars, let's stop this."

You should really read entire the article. I have the Foreclosure Rescue Program in pdf format if you would like a copy of it. Just send an email to questions@fha-mortgageunderwriters.com and I'll send you the file.

Always,

Connie

The Credit Crisis Explained

I found and article posted on Telegraph.co.uk that totally pissed me off. Sorry for being so blunt but there really is no other way to to express how I felt. It was an article in cartoon format that attempts to explain the mortgage crisis in layman's terms.

This cartoon actually explains it very well except for the first entries blaming Mortgage Brokers for making Bad loans to people that didn't qualify. This is so incredibly wrong, false, untrue, and a total misconception of how mortgage brokers operate.

The captions labeled "Mortgage Brokers" should have been labeled "Subprime Lenders, lenders, or Fannie Mae and Freddie Mac"! Let it be know to all ... that mortgage brokers do not determine or set underwriting guidelines or loan qualification requirements. The guidelines or qualification requirements or lack there of are set by the lender or investor!!

The Mortgage Broker is obligated and required to follow those rules and they do not have an option to deviate from them!! HELLO ... !! In today's market crisis the independent mortgage broker is as much a victim as the consumer.

Yes, a few dirt bag Brokers, lenders, and investors may have committed fraud, which is falsifying documents and misrepresenting products, but that is not what this cartoon is about. Fraud is found in every industry that involves man. Fraud is not what created the mortgage crisis.

In all fairness I might add that perhaps the author of this article is not familiar with the role of a mortgage broker in the united states.

So, take a look to see a good explanation of the credit crisis. Just remember it's not the mortgage broker, it's the lenders. The Credit Crisis Explained in Black and White.

Always,
Connie

Underwriters Originating Loans - Good or Not So Good?

I received the following question from an underwriter. I do not know what mortgage lender she works for nor do I want to know.

I did not respond to her question for several reasons, the main one being I do not give legal advice. However, I do have an opinion and perhaps this is a good place to put it. Here is the question:

What, if any, are the ramifications to the Lender if the Lender requires the
mortgage underwriter to originate loans to walk in clients, then underwrite
and approve and/or deny those said loans? thank you...

Wow, that is a loaded question and if it is indeed a common practice me thinks it is an accident waiting to happen. I see that there are at least two ways to look at this.

An underwriter should be totally unbiased when underwriting a loan. That may be difficult if they also originated the loan and liked or disliked the borrower. It would take very strong character to not be influenced one way or the other.

On the other hand, as a person with years of management experience in balancing budget and controlling overhead and costs, I can see why the lender would need for employees to take on duel roles ... especially in today's market. Is it a conflict of interest? What do you think?

Are there legal ramifications? ... I don't have a clue!

Please, leave your opinion.

Connie

Global Funding Crisis

I read an article on the Telegraph.co.uk that was titled: "US faces global funding crisis, warns Merrill Lynch". I personally found this article disturbing in that we, the US, have placed our financial stability in the hands of countries that in my opinion are not considered good allies and would like nothing more than to see us destroyed.

Here is a short quote from the article:

The US Treasury is running out of time before foreign patience snaps,
writes Ambrose Evans-Pritchard.

Merrill Lynch has warned that the United States could face a foreign
"financing crisis" within months as the full consequences of the Fannie Mae and
Freddie Mac mortgage debacle spread through the world.

The country depends on Asian, Russian and Middle Eastern investors to fund
much of its $700bn (£350bn) current account deficit, leaving it far more
vulnerable to a collapse of confidence than Japan in the early 1990s after the
Nikkei bubble burst. Britain and other Anglo-Saxon deficit states could face a
similar retreat by foreign investors.

This was a very interesting article that every one should read. The comments were even more enlightening.


Always,
Connie

FHA Debt Ratio

I received the following question from a mortgage company yesterday. I'm sure many of you may have, or will encounter the same issue someday. I hope this helps.

To Whom It May Concern,

I've got a guy that I'm trying to get approved thru FHA, but I'm having an issue with his debt ratio since the underwriter is telling me that we have to count a child support payment against his ratios even though we've documented that the child turns 18 in less than 10 months and he'll no longer have to pay that obligation at that time.

Since it's less than 10 months my argument is that it shouldn't count against him. If I were trying to do a loan for the lady receiving the child support she wouldn't be allowed to use that as income since it won't continue for 3 years. The underwriter is
saying that the government counts this as a debt regardless of the amount of time left, which doesn't seem right to me.

According to the Child Support section in the credit guidelines on your website it looks like I'm correct. Can you please give me some clarification on who is right here and if it's me if you could provide some type of documentation that I could show the underwriter I would greatly appreciate it.

Thanks for your help.

Pete, You are right to a point. Below is a link to the 4155 and an exert. Note the red...

Good Luck

http://portal.hud.gov/fha/reference/4155-1.doc page II-51

SECTION 4: LIABILITIES

2-11 TYPES OF LIABILITIES. The following are types of liabilities that must be considered in qualifying borrowers:

A. Recurring Obligations. The borrower's liabilities include all installment loans, revolving charge accounts, real estate loans, alimony, child support, and all other continuing obligations. In computing the debt-to-income ratios, the lender must include the monthly housing expense and all other additional recurring charges extending ten months or more, including payments on installment accounts, child support or separate maintenance payments, revolving accounts and alimony, etc. Debts lasting less than ten months must be counted if the amount of the debt affects the borrower's ability to make the mortgage payment during the months immediately after loan closing; this is especially true if the borrower will have limited or no cash assets after loan closing.


Always,

Connie

Housing Aid Bill Clears Key Senate hurdle

I found this article on the Drudge report titled: "$300b Mortgage rescue" and the article was from My Way. Sorry, the article does not provide the authors name or I would provide it here. You need to read it.

Here is a quote from the article:“The Senate voted 83-9 to speed up work on the $300 billion mortgage aid plan, putting it on track for a final vote as early as the end of the day”.

Chris Dodd, D-Conn., and friend of Angelo’s (the Banking committee chairman), calls it a gift on independence…. What a play on words! Independence means Sufficient income for comfortable self-support; a competence.

This is nothing more than election year idiocy to buy votes. This bill provides $300 billion in new, cheaper mortgages for distressed homeowners that don’t qualify for government insured, fixed rate loans.

They were financially risky when they obtained their mortgage and in a lot of cases have no investment in their home. Credit guidelines were relaxed and loan programs were created to make home ownership more affordable. Home ownership has been at an all time high and more than 95% of homeowners pay their mortgage on time.

Mortgage rates have been low for a long time. Low rates naturally brought high appreciation in real estate and higher home ownership. Wall Street had a growing appetite for mortgage-backed securities. Lenient programs were created to feed that appetite.

Your comments are welcome!

Connie