The Austin American-Statesman (our local paper) recently created the Texas Social Media Awards, and I was pleased and flattered to have been nominated!  There are 125 nominees, and the judges will be choosing the Top 25 and announcing this "short list" on February 18th.  I also see this as another potential burst of exposure for ActiveRain, since most of the nominees are not in the real estate industry, so they are not members here.

What would I actually win if selected?  Great question!  According to the official site:

Each person on that list will be recognized by the Statesman with an award, a badge for that winner's blog and free tickets to a bash that we're throwing around the same time as South by Southwest (these awards are not affiliated with SXSW). An overall winner will be named at that time, too.

Here's where you can help.

Since they are taking the comments into consideration for each nominee, I would love it if you took a minute to stop by and leave a couple of remarks here about my social media/social networking involvement:

http://budurl.com/jasoncrouch

In other words, the comments that will matter are those left at the URL above.  Of course, you can feel free to comment here, too!

 

I don't want to give too much prompting with regard to the comments, but you could mention any or all of these topics:

• My blog here on AR
• Twitter, Facebook, LinkedIn, etc.
• My BlogTalkRadio show ("Twitter Tuesday") - http://blogtalkradio.com/jckc
• Any help that I have provided for you in the social media/online realm

Unfortunately, I can't offer you a proper bribe at the moment, but please know that I greatly appreciate any kind remarks that you are willing to leave at the link provided above. 

I don't know what my actual chances are of winning the whole thing, but I would love to make it into the Top 25!

Thanks so much for your time and support.  Have a great day! 

Everybody needs to Move it, Move it, Move it!!!

'Cause minimum credit scores are going UP! 

I'm not talking about folks having BAD credit and having trouble buying a home... but I have a borrower right now that has a 618 score - NO LATE PAYMENTS.  He has 20 years of credit history...

He owes Best Buy and Macy's and Room to Go (And Amex, and Bof A for 2 cars, and Wachovia for a mortgage or 2).  NO LATES. But his middle score is 618.

Well, according to our friends at Wells Fargo - pretty soon this borrower (who makes over 150K a year) will not QUALIFY to purchase a home!  Even though he has $98,000 liquid.  His ratios are 18 / 31.

SunTrust has ALREADY put this rule into play - and now Wells.  PLUS, the pricing for these borrowers (at other places) is already AWFUL!

This is SIGNIFICANT.  This is not just for Conventional loans.  I'm talking USDA, VA, FHA -

NOBODY RIDES if their score is less than 620!

(at least not if they are getting their loan with SunTrust or Wells Fargo!)

I know it won't make any difference, but I still called my Congressmen yesterdayand let them know this is a HUGE part of the homebuying market that is now EXCLUDED from purchasing a home!

If you want more information on how to raise your FICO / Credit Score, check out our site dedicated to helping you out! Steve and Eleanor Thorne, Meridian Residential

A few months ago while testifying before Congress, lenders praised the government's foreclosure prevention program but indicated that they preferred to use their own modification programs.  As part of the housing rescue bill passed by Congress in July (not to be confused with the bailout bill passed in October), homeowners in trouble have been able to refinance their mortgages with the backing of the Federal Housing Authority (FHA) starting October 1^st. 

However, after 8 weeks fewer than 100 applications have been made for the Hope for Homeowners program.  A main reason lender's are not enthusiastic is that the program calls for them to reduce loan balances to 90% of a home's current market value.  In addition, the lender has to pay an upfront mortgage insurance fee of 3% of the loan balance to the FHA. 

A Senior Vice President for JP Morgan Chase Home Lending, testified about the drawbacks of Hope for Homeowners.  "Under the Program, [investors in the loans] will take a loss when the principal balance is written down," she testified, adding that they won't have a chance to make up that loss if home prices recover.  Sheehan added that Chase can help many borrowers' by reducing their interest rates, thereby making their monthly payments more affordable.

Other lenders such as Bank of America, Wells Fargo and IndyMac (which was taken over by the FDIC in July) agreed and stated that they prefer to use the FHA program as just one of several options.  When directly asked whether the program would be considered a last resort, all the members of the panel agreed that it would be.

The bank executives said that their responsibility to maximize profits for the investors would probably limit the number of cases in which the Hope for Homeowners program would be used.  All of the lenders also stressed that their efforts with loan modification programs and the increasing number of workouts that they have been doing. 

Because of this disappointing response, the US Housing and Urban Development Secretary Preston announced that major changes were being made to help more home borrowers.  The major change is increasing the loan to value to 96.5% from the previous 90% for some situations.  This means that lenders will not have to write down the balances as much and make them more likely to participate in the program.  Other changes include changing the way 2^nd mortgage holders are paid off, making the process simpler and again increasing the chances that lenders will assist home owners.

Together, these changes will hopefully help more homeowners avoid foreclosure and offer another solution if a loan modification alone will not work.  Despite these relaxed terms, the FHA will still use the same standards to ensure that home owners will have enough income and the ability to repay the loans.  Although its mission is to help provide affordable financing, the FHA needs to make sure that it does so in a responsible way that is sustainable.

______________________________________________________

Roland Carrillo, PhD
Branch Manager
VanDyk Mortgage in Cary, NC
Email: rjcarrillo@gmail.com
Website: http://www.mymortgageanalysis.com/ 

Our branch specializes in affordable lending options including FHA / VA and the Community Heros program.  As both a banker and a broker, you have access to a full menu of products including all Fannie Mae and Freddie Mac Conforming loans, Reverse, Jumbo and Commercial financing on a variety of property types.  We are located in Cary, North Carolina and are within easy reach of the entire RTP Area including Wake, Durham and Orange Counties.

 

Consumer Advocate Ralph R. Roberts Reveals the Top Five Dos and Don'ts of Loan Modification

 

Federal Loan Modification Law Center, LLP Spokesperson Embarks on Crusade to Prevent Unnecessary Home Foreclosures

DETROIT--(activerain)--Ralph R. Roberts, consumer advocate and spokesperson for Federal Loan Modification Law Center, LLP, today revealed the top five do's and don'ts of loan modification. Since losing one of his own homes to foreclosure in the late 1970s, Roberts has made it his life's mission to prevent unnecessary home foreclosures. The following do's and don'ts are intended to dispel common myths about loan modifications, which typically manifest in the form of a rate reduction/adjustment to an existing mortgage.

#1. DO TELL YOUR SPOUSE OR SIGNIFICANT OTHER: It's tempting to hide bad news from your partner, but this can actually work against you. For example, in most cases, you cannot legally negotiate a loan modification without your spouse. You and your partner are in this together and are stronger as a team. Regardless of the reason, disclose it to your partner, put it behind you, and work together to resolve the crisis.

#2. DON'T ASSUME IT's TOO LATE TO ACT: As long as you are still residing in your home, you have opportunities to keep your home.

#3. DO REALIZE THAT YOUR LENDER WANTS TO RESOLVE THE ISSUE. The only way the lender makes money is if their loans perform-modifying a loan through loan modification makes it perform for the lender. Banks and other lending institutions make more money and lose less money if you can make your payments. When they foreclose, they not only lose your monthly payments, they also have the expense of foreclosing (attorney fees), rehabbing the home, and then selling it (agent commissions).

#4. DON'T GO INTO HIDING: As hard as it is, failing to pick up the phone, return phone calls, or respond to notices is one of the worst things you can do. Your lender needs to know from you or your legal representative that you are aware of the delinquent payments and are working on a solution.

#5. DO SEEK PROFESSIONAL REPRESENTATION: You may be able to negotiate a loan modification yourself by working directly with your lender, but an experienced attorney or loan modification expert can properly represent your case to your lender that your loan is modified to a level of affordability. Homeowners who represent themselves often overestimate what they can afford to pay and end up in the same situation months after they receive their modification.

 

We have now had our first full week of a new year and I wanted to tell you "Happy New Year" and I hope that 2009 will be awesome for you.

As you are aware, there were many changes implemented in 2008 and at the beginning of 2009, and will be more forthcoming.  I wanted to give you a run down on them since it affects all of us and how we can get buyers to the closing table.  I feel it is a lenders' responsibility to keep you, the Realtor®, abreast of what is happening to help you to keep and grow your business and I take that responsibility extremely seriously! 

If you have any questions about the following information, please do not hesitate to contact me!  I am going to use bullet points for these changes but please know that there may be a lot of information in regards to each one so this may be a little lengthy.  However, I feel it is so important that you should take some time and make sure you read it so that you know how your business has been or will be affected!

·        USDA Rural Housing Loan - Increased Income limits/Availability of Funds: Effective January 20, 2009, the income limits for this program are being INCREASED for those persons/families that have 1-3 in the household and for those that have from 5-7 in the household.  This will help a larger number of people qualify for this program!  **PLEASE NOTE: MANY OF YOU ARE HEARING THAT USDA IS OUT OF MONEY - While they are not currently insuring loans (they do not EVER lend money, only insure the mortgage), we are STILL DOING THEM AND EXPECT NO INTERRUPTION OF THIS PROGRAM!  I am a national trainer for this program and have been in contact with personnel at the national level of USDA and we see this continuing uninterrupted for us based on how we are set up with the USDA so please, if you have any current loans in process somewhere that were going USDA and have been told they can't do it, which IS happening, have your client call me and let's get them closed before their contract expires!

·        Maximum Mortgage Amounts: FNMA has kept their conforming loan limits in our area to $417,000.  FHA has DECREASED the maximum loan limit in Okaloosa, Walton, and Bay Counties as follows: Okaloosa: $271,050 (was $312,500 in 2008), Walton: $325,450 (was $362,790 in 2008), and Bay: $271,050 (was $396,250 in 2008).  In Santa Rosa County, it remains in 2009 where it was in 2008, which is $271,050.

·        Repairs to Properties that Are Being Purchased: Many properties being sold are short sales or foreclosures and are being sold "as is".  In some cases, the condition of the property isn't such that a lender can do a mortgage secured by the property and sales are falling by the wayside.  Please note that there are programs available where a buyer can finance in costs of repairs and close prior to those repairs being completed.  On an FHA loan, the maximum amount of the repairs is $35,000; on a USDA Rural Housing loan, the maximum amount of the repairs is $6,650.  In the case of the USDA, these most be repairs that are noted by the appraiser on the appraisal; in the case of the FHA, a buyer can purchase a home and remodel the kitchen (amongst other allowable projects) and finance the costs and they do not have to be noted in the appraisal!

·        Conversion of primary residences to investment property or 2^nd home: (This is used for FNMA, FHLMC, FHA, USDA, and VA currently; the only exception is if the buyer is transferring or moving a long distance.)  If you have a buyer that is purchasing a new primary home but who will still own their current primary home when they go to closing, there are restrictions as far as being able to approve the new mortgage.  In order for a client to rent their old home AND use the rental income to qualify, they MUST HAVE 30% equity in the old home.  No ifs, ands or buts on this.  If they do, and we have to verify that they do, we can use 75% of the lease amount to count against their mortgage payment.  We would have to have the lease, a copy of the deposit check from the tenant, AND a copy of the receipt where the buyer deposited the security deposit into their bank account.  If they don't have the 30% equity, the buyer must qualify for both payments AND have documented reserves (money in the bank) after closing of 6 full months of PITI (principle, interest, taxes and insurance) for BOTH PROPERTIES.  If they are converting their current primary to a 2^nd home, the same applies as far as qualifying with both payments and having the 6 months' reserves for both properties.

·        Ordering of appraisals: Currently, we are able to select the appraisers from our list of approved appraisers.  On May 1, 2009, there are new guidelines in place referred to as the "Home Valuation Code of Conduct", or HVCC for short.  Here is a link to this code but, in essence, mortgage lenders, brokers and bankers will no longer be allowed to be involved in the selection of the appraiser, nor to have contact with them or even give them an estimated value of the property past sending them a copy of the sales contract for purchases.  We are still learning about this code and how it will affect us and I will keep you abreast as I find out more.  You can read the code here to see it in its entirety and how it may affect you and your clients.

·        Stated Income Loans: There are many schools of thought as to what caused the mortgage meltdown last year and a lot of people feel that the stated income and no doc loans were the biggest cause.  Investors, for the most part, have done away with these loans and those that still offer them require the buyer to sign a Form 4506-T.  This form is the Request for Copy of Tax Forms that is sent to the IRS to determine that a borrower's income qualifies them for the loan.  These are being executed prior to closing so, in essence, a stated income loan these days is ONLY FOR CONVENIENCE TO A BORROWER - their income is going to be verified before closing.  The sole purpose of a stated income loan these days is so that a client doesn't have to find and send their tax returns to the lender; the lender will still be verifying their income.

·        How Bankruptcy and Foreclosure (including deed in lieu and short sales) Affect the Ability to Buy a Home in the Future: In August, FNMA developed new guidelines for how long a potential buyer must wait after certain actions that are reported on their credit report.  For instance: There was no existing policy on how long a person had to wait if they had multiple bankruptcy filings, except the 2-year that WAS required for a Chapter 13; now, a person with multiple bankruptcies must wait 5 years from the most recent dismissal if they have had more than one BK in the last 7 years.  It used to be that they had to wait 4 years after the date the foreclosure sale was completed it is now 5 years with additional requirements that apply after 5 years and up to 7 years.

·        Down Payments and FHA: The downpayment assistance program, ie: Nehemiah and Ameridream, that were used to help buyers using the FHA mortgage program have a gift of the downpayment from a charitable organization was completely done away with.  Also, effective January 1, 2009, the down payment required on an FHA mortgage went from 3% to 3-1/2% in all cases.

·        Condos or Attached Properties in Florida: Most investors, and certainly FNMA, FHLMC, FHA, VA, and USDA will no longer allow mortgages on properties that have one or more of the following: the word "resort" in the title of the project, the availability of nightly or weekly rentals within the project, an on-site rental desk, a large percentage of delinquent HOA dues, housekeeping services, electricity that is not on an individual meter, etc.  Because of this, we are unable to offer fixed rate mortgages in projects that exhibit one or more of these traits.  HOWEVER, we have found alternative lenders offering portfolio programs, which are ARMs in all cases, and CAN STILL FINANCE THESE CONDOS AND CONDOTELS!  There are larger down payment requirements that in the good old days, but we are able to assist your buyers and get these units closed.  These days, underwriters are googling the name of the project and if they find these traits, we are dead in the water except with these portfolio programs.  Also, many investors have stopped allowing above 80% financing on attached units in Florida, and some cap that at 70%!  These are townhomes, not condos, and we are able to still finance them up to 100% in many cases so please make sure to have any buyers you have that need financing call us.

·        Mortgage insurance - Mortgage insurance, or PMI as many refer to it, has changed tremendously.  There are currently no mortgage insurers that will insure a 2^nd home or investment property in the state of Florida.  This is why it has become basically impossible to find a 2^nd home or investment property mortgage with less than at least 20% down, and in some cases even more.

·        Maximum Number of Financed Properties: Effective in 2008, most investors have now limited the maximum number of financed properties a buyer can have to FOUR, including their primary home.  This includes properties that are owned in a trust or LLC and properties that they own with someone else personally.  This does not include commercial or multi-family housing properties above 4 units but does include 1, 2, 3 and 4-unit properties.  **This is one of the biggest points I made during my interview with Good Morning, America - if they would allow those people who truly  qualify for more than 4 to purchase, there would be a lot more sales nationally as many people would love to scoop up the great deals but are unable to secure financing.  If they have good credit, good (and deep) reserves, a history of having rented property, and their debt to income ratio including all of their properties is under 45%, is, in my eyes, ridiculous to not allow them to purchase a property!  They should allow this and, to insure themselves, set up a fund, much like the upfront mortgage insurance on an FHA loan, that keeps funds available should any of these buyers default!

 

While these do not represent all of the changes made and upcoming, these are the ones that most affect us at this time.  I will make sure to keep you informed of any and all changes that come out so that you are better able to perform your job and get your buyers to closing.

 

When we are showing homes to prospective buyers, one of the biggest considerations, aside from price, is the condition of the home. No matter what price it is, if a home appears to be neglected and poorly maintained, the quality of the home is immediately suspect, and the perceived value (how much a buyer would be willing to pay) is immediately lower. In the eyes of a buyer, if the most basic maintenance issues have not been done, it's a short leap to assuming that the bigger issues, things can could end up costing the buyer big bucks,  haven't been taken care of either.

Before you put your home on the market, there are a number of pre-emptive approaches you can take to make sure your home is making the best possible first impression and that you get top dollar.

1. Hire your own home inspector. Once an offer has been made on a home, it's very typical for the buyer to pay for a home inspection which almost always results in a Repair Request and sometimes, credits to compensate the buyer. But, by having your own home inspection done first, you can take care of any issues that might otherwise be a stumbling block for buyers. Prices vary, of course, but generally speaking you can plan to spend around $350.00 for a thorough home inspection by a license and insured home inspector. Here are just a few of the things you can you expect from a home inspection:

• Investigation of all household systems including the heating and cooling (electric and gas), plumbing, and electrical to identify their efficiency and if they are operating properly.
• Identify any safety issues including some things that may no longer be up to code. This may include a wobbly hand rail or faulty electrical wiring.
• Examination of the roof, including gutters and soffits, to identify any leaks or failing roofing materials.
• An interior and exterior (including basements and attics) examination for any prior water damage

2. Another alternative is to ask a friend to walk through your home as a buyer would to help you "see" things you may be overlooking. It won't be as thorough or technical as a home inspector, but it will give you a fresh set of eyes. When we live in our homes for any length of time, it's only natural to not see flaws and problem areas.  You can do this on your own, of course, but another set of eyes is always helpful.

Whether you decide to hire a professional or rely on the advice of a friend, here are some other things you should look for in your home before opening the doors to potential buyers:

- Make sure all interior and exterior doors, especially bi-fold closet doors work smoothly and properly.
- The same goes for windows. Make sure all your windows open smoothly.
- Clean the gutters around your home. This a good time to shore up any sagging sections.
- If you have pets, get an objective "sniff" test.
- Patch and paint/stain any damage to chair rails, wood work, or walls
- Caulk around windows and doors. If you plan to paint, it's a great time to create a seamless look around any molding. And don't forget the bathrooms.
- De clutter as much as possible. Nothing makes a room look small like tons of clutter and too much furniture.
- Clean the carpet.

In a buyers market, there is a lot more competition so it's important that your home leave a positive and lasting impression. For more information or helpful hints, give the Clay Team a call, or visit us online!

Being an inspector equipped with a highly advance thermal camera I have been called upon to find quite a few leaks.

   Leaks can be very frustrating and challenging.  Our modern, climate controlled, super insulated and immaculately finished homes do not respond well to storm water on interior surfaces.  Window sills swell, drywall turns brown, and wood floors crack.  How rude it is when Mother Nature invites herself into the world we control.

   A very interesting pattern has developed after a few dozen, "....help me find where this leak is coming from," calls.  A majority of the calls that were related to storm water had three significant things I common: the leakage could be noted in a window opening, the window was on the south side of the home and the siding was a lap type.

   With properly installed flashing homes should not leak.  However it is nearly impossible to ensure contractors install something properly especially if it is above and beyond those minimum building standards some call 'codes'.  Caulking is always a good first line of defense but if the openings are flashed properly, caulking should not even be needed to keep the home water tight.

  Before all of our modern, space aged materials it was common knowledge to crack open a leeward window in windy and wet conditions.  With a modern understanding of hydro-dynamics we now understand that when wind hits a home a low pressure vortex is actually created inside the home.  This means that in windy, wet conditions water is not necessarily blown-in but pulled-in.  When the window on the leeward side of the home is cracked open, the pressures are able to equalize.  Many intermittent leaks can be slowed, stopped or completely prevented.

   If you do have a leak around a window or door, your flashing is not adequate and should be repaired.  This can potentially mean thousands of dollars.  In the mean time, if the wind is blowing rain at your home, try cracking a window on the other side of the home.