Treasury Launches Mortgage Help for Unemployed

Treasury Launches New Mortgage Help for Unemployed in July « HousingWire.

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Matt Steinmetz

NMLS# 221315

Envoy Mortgage- Hiring experienced Loan Originators, Ask me for info.  

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Concord, CA 94520

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FHA Update

Housing Report
House Passes FHA Reform Bill

By a very strong bipartisan vote of 406 – 4 the House passed H.R. 5072, the “FHA Reform Act of 2010″. This bill, sponsored by Rep. Waters (D-CA) and Capito (R-WV) strengthens the FHA mortgage insurance program while keeping the program affordable and available for responsible homeowners. The bill will allow FHA to increase the annual (monthly) premium. This is a victory for homebuyers. In February, FHA increased the upfront premium from 1.75% to 2.25%. With this new authority, HUD will DECREASE the upfront premium to 1% and increase the annual premium from .55% to .85%. This will reduce the upfront burden on homeowners while most quickly restoring FHA’s reserves to the congressionally mandated level. The bill also included an amendment to increase the FHA multifamily loan limits in multi-story (elevator) buildings. The House defeated amendments to raise the FHA downpayment requirement, decrease the loan limits, and cap the market share for FHA. The NAR-supported bill now moves to the Senate.

Thank you,

Matt Steinmetz
NMLS#221315
Envoy Mortgage -Voted Top 25 Tech Savvy Lenders by Mortgage Technology Magazine 

2151-A2 Salvio St
Concord, CA 94520

Phone 925-671-9501 x119

msteinmetz@envoymtg.com

Governor Schwarzenegger Signs $10,000 Homebuyer Tax Credit Legislation

Governor Schwarzenegger Signs $10,000 Homebuyer Tax Credit Legislation.

Starting May 1st, the very day after the federal tax credit ends, California’s tax credit kicks in!!!

This time it’s not just for new homes either.  First time buyers, purchasing new or existing homes can apply for the lesser of 5% of the sales price or $10,000.  This is good for accepted purchase contracts from May 1st through Dec 31, 2010. 

Post a comment and let me know what you think about this.  Is it going to help?  Do you know anyone who needs to know this?  Please pass this along by using the share button, or copy the link in your browser.

I’m here to help, let me know what I can do for you, or someone you know.

Thank you,

Matt Steinmetz

NMLS# 221315

Envoy Mortgage- Voted Top 25 Tech Savvy Lenders by Mortgage Technology Magazine

2151-A2 Salvio St.

Concord, CA 94520

Phone 925-671-9501 x119

Follow me on Twitter

Learn When to Pay Points

Apply for a loan online

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A Little Fed and a lot of FHA

I heard the Tavern on the Green in Central Park is or has just closed. Here is a picture I took while there last September. Many people remember this place by the manicured animal shapes like this one.

The Fed says that the Fed’s Mortgage Backed Securities purchase program (see previous post), will end March 31st.  Overall this news was taken bad as rates got a little worse yesterday.

Also in a previous post, I commented on FHA changes.  Well it looks like the date for the increase in up front mortgage insurance (UFMIP) is April 5th.  The increase, just days after the Fed stops buying MBS’s, takes the UFMIP from 1.75% of the loan amount to 2.25%.  If you look at a $300,000 purchase price, and use FHA with the minimum 3.5% down, after April 5th your UFMIP will be $1,582 higher!  This is can be a problem for a lot of people.  I know, because I see how people struggle to save just enough for a down payment and closing costs.

It is true that UFMIP can be, and usually is financed into the loan amount, how ever that means higher payments.  While the impact to payments is low, those buyers who are already on the border for qualifying will be affected.

At some point the cap for seller credits will come into play as well.  Currently a seller can credit 6%, but FHA will shrink that to 3% sometime soon.

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Thank you,
Matt Steinmetz
Envoy Mortgage- Voted Top 25 Tech Savvy Lenders by Mortgage Technology Magazine

2151-A2 Salvio St.
Concord, CA 94520
Phone 925-671-9501 x119
Fax 925-940-9639

Learn When to Pay Points
Information about the $8,000 First Time Buyer Tax Credit
Information about the $10,000 New Home Tax Credit in CA
Apply for a loan online

FHA* VA * CALPERS * CALVET * FHA 203K Rehabilitation Loans * Energy Efficient Mortgages

FHA Making Changes

Currently when someone purchases a home using a FHA loan, they are required to pay an upfront mortgage insurance premium.  This fee can be paid or financed, and is currently at 1.75% of the loan amount.  FHA will be increasing this premium up to 2.25% of the loan amount.

In an effort to have purchasers put more skin in the game, many ideas were discussed, including raising the down payment minimum from 3.5% to 5 %.  It would appear the insurance premium was the victor instead…  For now!

Other changes include limiting seller concessions, like paying closing costs to 3% instead of the current 6%.  Once again requiring more skin in the game from the buyer.

The reason for these changes?  FHA has become so popular over the last year that it insures thousands of loans per day.  With that it’s foreclosure rate has increased, which means its insurance payouts have also increased.  Not to mention that there are minimum requirements for reserves as compared to the amount of insurance FHA issues.  The FHA has been said to have fallen below these requirements and needs cash.

In addition, FHA will attempt to hold lenders more accountable by reporting each lenders FHA performance rating to the public.  The belief is that a borrower will want to go through a lender with a positive rating.

These changes will leave many borrowers out of the market, as they will not be able to save for the additional insurance premium and additional 3% in closing costs, that can now be paid by the seller.

Whether you believe this is a bad idea, since some would be home buyers will be left out, or a good idea, as it keeps FHA in a good position for future use, this is the reality of changes to come.

I did not see a specific date as of yet, but read “this summer” in one article.

Click here to go to the FHA site and read the press release.

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Thank you,
Matt Steinmetz

Envoy Mortgage- Voted Top 25 Tech Savvy Lenders by Mortgage Technology Magazine
2151-A2 Salvio St.
Concord, CA 94520

Phone 925-671-9501 x119
msteinmetz@envoymtg.com

Learn When to Pay Points
Information about the $8,000 First Time Buyer Tax Credit
Information about the $10,000 New Home Tax Credit in CA
Apply for a loan online

FHA* VA * CALPERS * CALVET * FHA 203K Rehabilitation Loans * Energy Efficient Mortgages

Changes to the Good Faith Estimate

January 1st marks the start of a new year, new decade and among other things the start of a new good faith estimate.  New laws require lenders to use the 2010 version of this form.  Created to allow easier shopping for consumers, this form is 3 pages instead of 1 and does not even show the consumer how much cash is needed to close, or any credits that may be given from Realtors, sellers or the lender.  This rules are very strict as to when it must be presented to the borrower and to what fees can change after it has been given to the borrower.  In short, it is a disaster for lenders and will result in higher fees, as lenders try to understand the changes and fear they will be stuck footing the bill of estimated 3rd party fees that change or were not disclosed properly at the beginning. 

For example, let’s say a lender put a $400 fee for an appraisal and later that fee is really $450.  Basically the lender is stuck paying the difference as they had only disclosed $400.  Adding up the amount of fees that this can happen to means the lender could potentially be responsible for thousands.  I don’t need to tell you that lenders will not want to do this and therefore will be padding fees from the start.  Expect this as a new norm, at least until several loans are under the belt and lenders get used to the changes.

All lenders are undergoing training on this form and I have as well, with a 2nd session next week.  Though the above is already a conclusion taken by most lenders.  Leave it to the Government to take a 1 page form and turn it into a 3 page form, in order to make it easier, but only to make it more convoluted.  *sense the sarcasm*

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Thank you,
Matt Steinmetz
Envoy Mortgage- Voted Top 25 Tech Savvy Lenders by Mortgage Technology Magazine
2151-A2 Salvio St.
Concord, CA 94520
Phone 925-671-9501 x119
msteinmetz@envoymtg.com

Learn When to Pay Points
Information about the $8,000 First Time Buyer Tax Credit
Apply for a loan online

 FHA* VA * CALPERS * CALVET * FHA 203K Rehabilitation Loans * Energy Efficient Mortgages

Tax Credit Signed by President

Tax Credit for Homebuyers

First-Time Homebuyers (FTHBs): First-time homebuyers (that is, people who have not owned a home within the last three years) may be eligible for the tax credit. The credit for FTHBs is 10% of the purchase price of the home, with a maximum available credit of $8,000.

Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

Current Owners: The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.

Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

What are the New Deadlines?

In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.

Tax Credit Versus Tax Deduction

It’s important to remember that the tax credit is just that… a tax credit. The benefit of a tax credit is that it’s a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if a first-time homebuyer were to owe $8,000 in income taxes and would qualify for a tax credit of $8,000, she would owe nothing.

Better still, the tax credit is refundable, which means the homebuyer can receive a check for the credit if he or she has little income tax liability. For example, if a first-time homebuyer is eligible for a tax credit of $8,000 but is liable for $4,000 in income tax, she can still receive a check for the remaining $4,000!

Higher Income Caps

The amount of income someone can earn and qualify for the full amount of the credit has been increased.

Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible

Joint filers who earn up to  $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.

Maximum Purchase Price

Qualifying buyers may purchase a property with a maximum sale price of $800,000.

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Remember, the new tax credit program includes a number of details and qualifications. For more information or answers to specific questions, please call or email me today.

In addition, you may be able to benefit from additional housing related provisions, including the following:

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Tax Incentives to Spur Energy Savings and Green Jobs

This provision is designed to help promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.

Landmark Energy Savings

This provision provides $5 Billion for energy efficient improvements for more than one million modest-income homes through weatherization. According to some estimates, this can help modest-income families save an average of $350 a year on heating and air conditioning bills.

Repairing Public Housing and Making Key Energy Efficiency Retrofits To HUD-Assisted Housing

This provision provides a total of $6.3 Billion for increasing energy efficiency in federally supported housing programs. Specifically, it establishes a new program to upgrade HUD-sponsored low-income housing (for elderly, disabled, and Section to increase energy efficiency, including new insulation, windows, and frames.

Expanding Housing Assistance

This provision increases support for several critical housing programs. It includes $2 Billion for the Neighborhood Stabilization Program to help communities purchase and rehabilitate foreclosed, vacant properties.

As always, if you have any questions about your specific situation or would like to discuss how you may benefit from this program, please call or email me. I’ll be happy to sit down with you.

Thank you,
Matt Steinmetz
Envoy Mortgage- Voted Top 25 Tech Savvy Lenders by Mortgage Technology Magazine
2151-A2 Salvio St.
Concord, CA 94520
Phone 925-671-9501 x119

Learn When to Pay Points
Information about the $8,000 First Time Buyer Tax Credit
Information about the $10,000 New Home Tax Credit in CA
Apply for a loan online

FHA* VA * CALPERS * CALVET * FHA 203K Rehabilitation Loans * Energy Efficient Mortgages

Homebuyer Tax Credit Extended!

The House and the Senate have passed the extension of the Homebuyer tax credit and made some changes.  The President is expected to sign it into law tomorrow.

For 1st time buyer’s or those who have not owned a home in the last 3 years, the tax credit is $4,000 for singles and $8,000 for couples, with income restrictions maxing out at $125,000 for singles and $225,000 for couples.

Current homeowners, who have owned a home for 5 of the previous 8 years, can now also get a credit of $3,250 for singles and $6,500 for couples with the same income restrictions. 

Purchase agreements must be signed by 4/30/2010 and close by 6/30/2010

Those in the armed forces, stationed outside of the U.S. on official duty for 90 days during the period of 1/1/2009 – 5/1/2010 have an extended time frame for signed purchase agreements to 5/1/2011 and closing to 6/1/2011.
 

Thank you,
Matt Steinmetz
Envoy Mortgage- Voted Top 25 Tech Savvy Lenders by Mortgage Technology Magazine
2151-P Salvio St.
Concord, CA 94520
Phone 925-671-9501 x119

Visit my blog for my most recent mortgage related update.

Learn When to Pay Points
Information about the $8,000 First Time Buyer Tax Credit
Information about the $10,000 New Home Tax Credit in CA
Apply for a loan online

FHA* VA * CALPERS * CALVET * FHA 203K Rehabilitation Loans * Energy Efficient Mortgages

FHA changing to minimum 5% down?

HR3706- A new bill was proposed, which would change the FHA minimum down payment from 3.5% to 5%. This bill is backed by Fed Chairman Ben Bernanke.  Let’s hope that doesn’t pass.

HERA – Housing and Economic Recovery Act

On July 31st, 2009 a new regulation published by the Federal Reserve Board will begin that will drastically change the process of obtaining a home loan.  At least on the originators side of the transaction that is.  Even though the changes have no new hoops for the borrowers to jump through, the hoops the originator will jump through will certainly affect the borrower and everyone else attached to the transaction.  These regulations will impact your closing dates on all transactions for primary and 2nd homes that require financing.

The New requirements dictate to lenders and brokers the following:

• When up front fee’s can be collected
• When an appraisal can be ordered
• When a new Truth in Lending Disclosure must be re-issued
• When a copy of the appraisal must be delivered to the borrower
• When a loan can close

The earliest a transaction can close is 7 business days from when the initial disclosures are received by the borrower.  With that said even 15 days will be difficult to do.

After the Initial application is taken the lender must mail the upfront disclosures and wait 3 business days before collecting any fees aside from a credit report fee.  After the 3rd business day the appraisal may be ordered and the fee collected.  Once the appraisal is received, the borrower must be given a copy and time to review.  This means another 3 days if mailed and 3 days to review for a total of 6 business days.  On the 7th business day the loan may proceed.

If at any time the APR increases from the initial disclosure by more than .125%, a new Truth in Lending must be re-disclosed to the borrower and again start a 3 day clock, if mailed, and 3 days for review.  The estimation of up front fee’s is crucial.  Getting to the closing table andadjusting escrow fee’s will delay your loan by 7 business days as a new Truth in Lending is mailed and reviewed.

Note: For applicable refinances the 3 day rescission is in addition to this, so that makes the wait 9 business days.

Some Potential impacts to the APR:

• Unlocked rate and rate changes from initial disclosures
• Change in loan amount
• Loan product change
• Change in closing date
• Change to any fees

The only time period that can be waived is the appraisal review period of 3 days, and must be done so in writing by the borrower.  The only other way to speed up the process is to hand deliver the appraisal and disclosures, and get a signed receipt from the borrower to include in the loan file.  This will save the 3 days you have to wait when mailing the items.  Even still you can see how days begin to add up. 

30-45 day escrows will become even more common than they are today, as closing early becomes more and more difficult.  Add in lender turn times, and one mistake in timing can easily cost you a week or more. 

Bankers (like myself) have an advantage over brokers here as brokers have to wait for the lender they are submitting to, to send out the disclosures.  So Bankers may have a 3-4 day advantage in this example.

If you have any questions or comments please feel free to email me or use the comment feature below.  If you are a Realtor I would  be happy to present this information to you or  your office in person, whether we work together or you already have a lender relationship, we all need to understand the new requirements, as our clients depend on this. 

Matt Steinmetz

Envoy Mortgage

Concord, CA Contra Costa County