FHA to tighten up lending

In an announcement today, FHA is going to update regulations to strengthen the financial outlook of the agency:
"These new regulations strengthen the process by which FHA requires certain lenders to indemnify the U.S. Department of Housing and Urban Development (HUD) for insurance claims paid on mortgages that are found not to meet the agency's guidelines. In addition, the final rule requires all lenders with the authority to insure mortgages on HUD’s behalf ("Lender Insurance" mortgagee) to meet stricter performance standards to gain and maintain their approval status..."
Further in the announcement the regulations discussed fraud, fraud detection, and having lenders be responsible for such fraud. I completely support that idea, but in the past 12 months FHA, Fannie Mae, and Freddie Mac have been able to find what they call fraud on a majority of the files that they own or insure.
I wonder if this is just a way to push unwanted debt onto the banks. If that is the case, the lending world just got a lot smaller.

Step Four

It's now time to take the next step. You are confident that your credit is good "enough", your income is stable, and you have been saving a little at a time and have a modest nest egg. You may need help from one of the down payment assistance programs, family or the seller, but you don't want to wait any longer with where rates and housing prices are.
Pick up the phone and call! Preferably, call me! 209-825-9383 or email: dromero@abilitymortgage.com.
You will not know your next step until you talk to a professional. For my clients, this is a free consultation. It can be done over the phone, in person, or online at our website: http://www.abilitymortgage.com/. It takes about 10 minutes for the application process. Don't worry about account numbers or that you won't have everything you need. This is what you will need for the initial application:
Name, Social Security Number, Date of Birth, Address, and Last pay stub or W-2. That's it and I bet most of that information is in your head. If you are calling and applying with a spouse or co-signor, then the W-2 will be helpful because it will have that person's social security number on it.
Stop waiting, start 2012 off right and call!

Step Three: How much is a down payment?

When purchasing a home you will need to have some money for a down payment. There are all types of loans even 0% down, but no matter which loan, you will need to have assets in the bank or someone able to give you assets to purchase your home. When making an offer on a home the seller will want a good faith deposit. This is money that you give to the escrow company to be held until the property is ready to be transferred to you at sale. The seller wants to know you are serious and can ask for as little as .5% to 10%. Most commonly we see a minimum of $1000. That $1000 will be credited to you and will reduce the amount of money you need for your down payment and/or closing costs.
Typically if you do not receive or qualify for 0% down or any second mortgage or grant programs and you are a first time home buyer, you will need 3.5% of the purchase price plus closing costs to purchase your home. If you are purchasing a home for $150,000 you will need $5,250. This can be in your bank account, your 401k or retirement account, or can be gifted to you by an immediate family member. But that is not all you will need, there are the fees to pay the bank/lender, the title/escrow company, the notary, appraiser, pest inspector, etc...also, you will need to set up your impound account, the account that holds the funds to pay your taxes and insurance when due. These costs can reach 4-4.5% of the sales price (depending on time of year and current rates). That could be an additioanl $6750. Now, you can ask the seller to help you with closing costs, but there is no law stating that they have to.
Don't let these figures scare you, there are programs and loans available to help, but if you can start saving some of the money today, getting your loan in the future will be much easier. Contact me for more information and to get onto the road of home ownerhsip

Time for New Resolutions!

I believe I am going to take a new turn with my blog. Instead of just posting opinions and ideas about the mortgage industry, I am going to make it an online educational course. For those of you who are looking to purchase your first home, move into a bigger home, downsize into something smaller, invest in real estate, or buy that second home you have always wanted, I am going to put the how to on this website. If you want to know about a particular topic, comment or email me. I will address it in my next blog.
This will be the blog for the do it yourself, Internet savvy, real estate driven person. I hope that my knowledge will help you grow and achieve your dreams.

Tomorrow's Blog: Where Do I Begin?

The Effect a European Leader has on our market

The Bond market started the day to the upside and just recently has lost traction and is in negative territory. Why??? News (rumors) out of Italy today that their prime minister is going to resign has our Stock Market doing the Jig. It appears that the Stock Market views this move as proactive and in the right direction to stave off the volatility that could be coming in their capital markets.
For those of you in contract to purchase a home, lock today, who knows how long this slide will last and the rate you can get today is terrific. For those of you refinancing, just depends on when you really want to close. Sooner rather than later? Then lock, stop the stress and take advantage of what the market has given you. For those of you waiting to see 3%, keep waiting, but my crystal ball is not sure if we will ever see that 30 year rate come to light.