Can you believe I just put under contract my client that I have had on my database and working with since April 21, 2008. She was looking for a condo or townhome close to her work and we would go out and see homes and then she would disappear for three months or more with no communication. I called her my Hudini Client.
We finally got her pre-qualified and went out and looked at a condo project in NSL this last week that I have been trying to show her for the last year and found a great buy on an existing condo/townhome that was one of the first in this project division built in 2006.
I have never seen such a happy client. She is walking on cloud nine and is so excited it is fun to watch. It is perfect for her and her current life style and this way she is building equity instead of paying out her hard earned money to a landlord.
I got her a sensational price for the area with sellers paying closing costs so she is set to go for many years.
Such a wonderful way to end the day in writing up a contract that is accepted several hours later and just in time since another offer came in right after ours! I love when the magic seems to flow and everything falls into place.
If I can say anything to my clients and those first-time homebuyers, you better buy now and if you see a home you like, make an offer immediately because it will not be there when you decide you do, as homes that are reasonably priced are selling very fast.
The 8K tax incentive ends December 1st, 2009 and that means that you have to have your HUDS and all funded and recorded before this date. It is taking a minimum of 45 days for close and it is going to get really touchy and a scranble this next month as Lenders are going to be bogged down again with all the buyers rushing to get their home closed before the deadline!
A word to the wise.
All in the Day of a Realtor- Real Estate Happenings in Salt Lake City and Beyond...
Tuesday, August 18, 2009
Tuesday, August 11, 2009
Just another day
Well after having a fun and unusal settlement yesterday, I have been busy catching up this morning with all my clients on my RE farm and platform and preparing for a listing appointment for this afternoon. Such a busy week it makes my head spin!
Just learned that another client will be closing a month earlier so that is great!!!! Four more on the burner to close over Sept - Oct. So lots of irons in the fire.
After that I am going to take a break then start in on my clients who will be ready to buy the first of the year. It is never ending but always a lot of fun and very rewarding to see my clients happy.
Just learned that another client will be closing a month earlier so that is great!!!! Four more on the burner to close over Sept - Oct. So lots of irons in the fire.
After that I am going to take a break then start in on my clients who will be ready to buy the first of the year. It is never ending but always a lot of fun and very rewarding to see my clients happy.
Thursday, August 6, 2009
Things You Shouldn't Do During a Recession
Here is an excellent link to read regarding what not to do during a recession
http://finance.yahoo.com/banking-budgeting/article/107477/things-you-shouldnt-do-during-a-recession.html?mod=banking-budgeting
http://finance.yahoo.com/banking-budgeting/article/107477/things-you-shouldnt-do-during-a-recession.html?mod=banking-budgeting
Wednesday, August 5, 2009
Taylor Bean Suspended From Making FHA Loans
By JAMES R. HAGERTY and LINGLING WEI
The Federal Housing Administration suspended Taylor, Bean & Whitaker Mortgage Corp. from making loans insured by the federal agency, and raised questions about the company's business practices and financial disclosures.
The move, coming a day after federal investigators raided Taylor Bean headquarters in Ocala, Fla., could hamper the company's operations and deal a setback to hundreds of mortgage brokers and community banks that originate loans through Taylor Bean.
More
Colonial and Taylor Bean Offices Raided
The Department of Housing and Urban Development, which oversees the FHA, said it took action against Taylor Bean because the company failed to submit a required annual financial report and to disclose "certain irregular transactions that raised concerns of fraud." Officials declined to provide details about the possible fraud. Taylor Bean has 30 days to appeal the suspension, which took effect immediately.
HUD also proposed to bar two Taylor Bean executives -- Paul R. Allen, chief executive officer, and Ray Bowman, president -- from any dealings with the U.S. government for 18 months. The department said Mr. Allen submitted false or misleading information to Ginnie Mae concerning a delay in submitting financial reports. It said Mr. Bowman submitted two false certifications regarding information lenders are required to verify each year. Neither Mr. Allen nor Mr. Bowman could be reached for comment. They have 30 days to contest the proposed penalty.
Taylor Bean's headquarters in Ocala, Fla., were raided Monday by federal investigators. The company is the 12th-largest mortgage lender in the U.S.
In an email response, Lee B. Farkas, chairman of Taylor Bean, said he was unaware of the FHA action. He didn't return repeated requests for comment.
FHA officials said Taylor Bean, which originated and purchased nearly $30 billion in mortgages last year, is the largest lender ever to be suspended from FHA lending. The company is private, but Taylor Bean was the 12th-largest U.S. mortgage lender in the first six months of this year, according to Inside Mortgage Finance, a trade publication. Though Taylor Bean makes most of its home loans through independent brokers and smaller mortgage banks, the Florida lender also owns a small savings-and-loan company, Platinum Bancshares Inc., of Rolling Meadows, Ill., acquired last year.
Among originators of FHA loans, Taylor Bean was the third largest in June, with a market share of 3.3%, according to the publication. Only Bank of America Corp. and Wells Fargo & Co. were larger.
The crackdown on Taylor Bean comes as the FHA is straining to cope with an increase in the number of loans it backs and rising delinquencies on those loans.
"Today, we suspend one company but there is a very clear message that should be heard throughout the FHA lending world: Operate within our standards or we won't do business with you," said HUD Secretary Shaun Donovan. In an interview this year, Mr. Donovan didn't rule out the possibility that the FHA eventually may have to seek money from Congress for the first time to cover losses on defaults. The number of loans delinquent more than 90 days or more backed by the FHA rose in May to 7.42% from 6.47% a year earlier.
Ginnie Mae, a government agency that guarantees payments to holders of securities backed by FHA loans, said Taylor Bean will no longer be allowed to issue securities backed by Ginnie.
On Monday, federal agents raided the Florida offices of Colonial BancGroup Inc. and Taylor Bean. The special inspector general for the Troubled Asset Relief Program said its agents had executed search warrants at the two offices in conjunction with the Federal Bureau of Investigation and the inspector general for HUD. A spokeswoman for the TARP watchdog said the warrants were sealed and she couldn't provide details about the probe.
Taylor Bean had proposed to lead a group of investors that were to provide $300 million of capital to Colonial, allowing the Montgomery, Ala., bank to become eligible for a $550 million federal bailout. But Colonial said Friday that the proposed rescue fell through. Also on Friday, Colonial reported a loss of $606 million for the second quarter and said there is "substantial doubt about Colonial's ability to continue as a going concern." Taylor Bean has depended on short-term "warehouse" loans from Colonial. Warehouse lenders are big banks and others that make short-term loans to mortgage banks.
HUD officials and the TARP watchdog teamed up in the federal investigation when they found they both had concerns about Taylor Bean and Colonial. HUD said Taylor Bean had failed to disclose to the FHA investigations into its business practices by state authorities. In July, Taylor Bean signed an agreement with 14 states requiring it to pay fines totaling $9 million for alleged improper lending practices, including alterations of information about borrowers' incomes and assets to allow loans to be approved.
A person involved in the federal probe said Taylor Bean had told Ginnie Mae that a delay in filing was due to the planned investment in Colonial. Later, however, Ginnie Mae discovered that Taylor Bean hadn't disclosed that its independent auditor, Deloitte LLP, had resigned because of "irregular transactions" that raised concerns about fraud. A spokesman at Deloitte declined to comment.
Colonial's financial problems have stirred worry in the mortgage market because the bank is one of the nation's largest providers of short-term credit to small, independent mortgage banks. These mortgage lenders have found it hard to obtain the short-term loans they need to allow them to fund home mortgages. If Colonial exits the warehouse-lending business, that would be "devastating" for many mortgage banks, said Scott Stern, chief executive officer of Lenders One, a St. Louis cooperative that provides services to about 135 mortgage banks across the U.S.
James Lockhart, director of the Federal Housing Finance Agency, said in an interview Monday that he expects an announcement this month that Fannie Mae and Freddie Mac will provide support to "warehouse" lenders. Mr. Lockhart said the aid would involve the use of commitments by Fannie and Freddie to purchase loans that serve as collateral for warehouse lines of credit.
The Property Report
Deal of the Week: Pension Funds Jump Into Real Estate
Plots & Ploys: Trumping Bondholders?
Partly because of a plunge in the number of providers of warehouse credit lines, small mortgage banks have found it more difficult to compete with big banks in making home loans. The top three mortgage lenders accounted for 52% of the market in the first quarter, up from 40% a year earlier, according to Inside Mortgage Finance.
If small mortgage lenders continue to abandon the business, "it will mean fewer choices for the consumer and higher mortgage rates," said Glen Corso, a spokesman for the Warehouse Lending Project, a group of about 35 mortgage banks pushing for federal aid to encourage more warehouse lending.
An increase in FHA lending has raised concerns in Congress and elsewhere that the agency will lose large amounts of money through mortgage defaults. FHA officials depicted the crackdown on Taylor Bean as a sign they are being vigilant.
Taylor Bean hasn't been an approved lender by Fannie Mae for more than five years. Colonial had a loss of $880.5 million in 2008, hurt by its exposure to Florida's real-estate collapse. When the bank said on Dec. 2 that it had preliminary approval for as much as $536 million in federal aid, it didn't tell investors it needed to raise $300 million privately to secure the government funds. That disclosure came on Jan. 27.—Nick Timiraos and Dan Fitzpatrick contributed to this article.
The Federal Housing Administration suspended Taylor, Bean & Whitaker Mortgage Corp. from making loans insured by the federal agency, and raised questions about the company's business practices and financial disclosures.
The move, coming a day after federal investigators raided Taylor Bean headquarters in Ocala, Fla., could hamper the company's operations and deal a setback to hundreds of mortgage brokers and community banks that originate loans through Taylor Bean.
More
Colonial and Taylor Bean Offices Raided
The Department of Housing and Urban Development, which oversees the FHA, said it took action against Taylor Bean because the company failed to submit a required annual financial report and to disclose "certain irregular transactions that raised concerns of fraud." Officials declined to provide details about the possible fraud. Taylor Bean has 30 days to appeal the suspension, which took effect immediately.
HUD also proposed to bar two Taylor Bean executives -- Paul R. Allen, chief executive officer, and Ray Bowman, president -- from any dealings with the U.S. government for 18 months. The department said Mr. Allen submitted false or misleading information to Ginnie Mae concerning a delay in submitting financial reports. It said Mr. Bowman submitted two false certifications regarding information lenders are required to verify each year. Neither Mr. Allen nor Mr. Bowman could be reached for comment. They have 30 days to contest the proposed penalty.
Taylor Bean's headquarters in Ocala, Fla., were raided Monday by federal investigators. The company is the 12th-largest mortgage lender in the U.S.
In an email response, Lee B. Farkas, chairman of Taylor Bean, said he was unaware of the FHA action. He didn't return repeated requests for comment.
FHA officials said Taylor Bean, which originated and purchased nearly $30 billion in mortgages last year, is the largest lender ever to be suspended from FHA lending. The company is private, but Taylor Bean was the 12th-largest U.S. mortgage lender in the first six months of this year, according to Inside Mortgage Finance, a trade publication. Though Taylor Bean makes most of its home loans through independent brokers and smaller mortgage banks, the Florida lender also owns a small savings-and-loan company, Platinum Bancshares Inc., of Rolling Meadows, Ill., acquired last year.
Among originators of FHA loans, Taylor Bean was the third largest in June, with a market share of 3.3%, according to the publication. Only Bank of America Corp. and Wells Fargo & Co. were larger.
The crackdown on Taylor Bean comes as the FHA is straining to cope with an increase in the number of loans it backs and rising delinquencies on those loans.
"Today, we suspend one company but there is a very clear message that should be heard throughout the FHA lending world: Operate within our standards or we won't do business with you," said HUD Secretary Shaun Donovan. In an interview this year, Mr. Donovan didn't rule out the possibility that the FHA eventually may have to seek money from Congress for the first time to cover losses on defaults. The number of loans delinquent more than 90 days or more backed by the FHA rose in May to 7.42% from 6.47% a year earlier.
Ginnie Mae, a government agency that guarantees payments to holders of securities backed by FHA loans, said Taylor Bean will no longer be allowed to issue securities backed by Ginnie.
On Monday, federal agents raided the Florida offices of Colonial BancGroup Inc. and Taylor Bean. The special inspector general for the Troubled Asset Relief Program said its agents had executed search warrants at the two offices in conjunction with the Federal Bureau of Investigation and the inspector general for HUD. A spokeswoman for the TARP watchdog said the warrants were sealed and she couldn't provide details about the probe.
Taylor Bean had proposed to lead a group of investors that were to provide $300 million of capital to Colonial, allowing the Montgomery, Ala., bank to become eligible for a $550 million federal bailout. But Colonial said Friday that the proposed rescue fell through. Also on Friday, Colonial reported a loss of $606 million for the second quarter and said there is "substantial doubt about Colonial's ability to continue as a going concern." Taylor Bean has depended on short-term "warehouse" loans from Colonial. Warehouse lenders are big banks and others that make short-term loans to mortgage banks.
HUD officials and the TARP watchdog teamed up in the federal investigation when they found they both had concerns about Taylor Bean and Colonial. HUD said Taylor Bean had failed to disclose to the FHA investigations into its business practices by state authorities. In July, Taylor Bean signed an agreement with 14 states requiring it to pay fines totaling $9 million for alleged improper lending practices, including alterations of information about borrowers' incomes and assets to allow loans to be approved.
A person involved in the federal probe said Taylor Bean had told Ginnie Mae that a delay in filing was due to the planned investment in Colonial. Later, however, Ginnie Mae discovered that Taylor Bean hadn't disclosed that its independent auditor, Deloitte LLP, had resigned because of "irregular transactions" that raised concerns about fraud. A spokesman at Deloitte declined to comment.
Colonial's financial problems have stirred worry in the mortgage market because the bank is one of the nation's largest providers of short-term credit to small, independent mortgage banks. These mortgage lenders have found it hard to obtain the short-term loans they need to allow them to fund home mortgages. If Colonial exits the warehouse-lending business, that would be "devastating" for many mortgage banks, said Scott Stern, chief executive officer of Lenders One, a St. Louis cooperative that provides services to about 135 mortgage banks across the U.S.
James Lockhart, director of the Federal Housing Finance Agency, said in an interview Monday that he expects an announcement this month that Fannie Mae and Freddie Mac will provide support to "warehouse" lenders. Mr. Lockhart said the aid would involve the use of commitments by Fannie and Freddie to purchase loans that serve as collateral for warehouse lines of credit.
The Property Report
Deal of the Week: Pension Funds Jump Into Real Estate
Plots & Ploys: Trumping Bondholders?
Partly because of a plunge in the number of providers of warehouse credit lines, small mortgage banks have found it more difficult to compete with big banks in making home loans. The top three mortgage lenders accounted for 52% of the market in the first quarter, up from 40% a year earlier, according to Inside Mortgage Finance.
If small mortgage lenders continue to abandon the business, "it will mean fewer choices for the consumer and higher mortgage rates," said Glen Corso, a spokesman for the Warehouse Lending Project, a group of about 35 mortgage banks pushing for federal aid to encourage more warehouse lending.
An increase in FHA lending has raised concerns in Congress and elsewhere that the agency will lose large amounts of money through mortgage defaults. FHA officials depicted the crackdown on Taylor Bean as a sign they are being vigilant.
Taylor Bean hasn't been an approved lender by Fannie Mae for more than five years. Colonial had a loss of $880.5 million in 2008, hurt by its exposure to Florida's real-estate collapse. When the bank said on Dec. 2 that it had preliminary approval for as much as $536 million in federal aid, it didn't tell investors it needed to raise $300 million privately to secure the government funds. That disclosure came on Jan. 27.—Nick Timiraos and Dan Fitzpatrick contributed to this article.
4 Reasons to Update a Bathroom
4 Reasons to Update a Bathroom By E. E. Kane
Bathrooms may not hold the most glamorous spot in your home, but they must remain functional or everyone suffers. Remodeling can be very expensive, so how do you know when it's time to invest money in your bathroom?
The following four reasons explain why remodeling may be worth the expense.
1. Signs of Water Damage.Leaks in the plumbing can easily lead to problems like mold, loose tiles, and structural damage to the floor underneath. Water damage can wreak havoc on a bathroom, and in some cases will require tearing everything out. If you simply have a mold issue, you may be able to resolve it with ventilation. Install an exhaust fan or a new window, and then kill the mold with a bleach-and-water solution. Finally, use primer and paint that specifically hinder mold growth.
2. Electrical Safety.Do the lights flicker? Does the outlet sizzle when you plug in the hair dryer? Has the exhaust fan stopped working? Whether you need to overhaul the electrical circuits or simply change a few receptacles, don't ignore electrical problems in the bathroom. Every bathroom should have a GFCI outlet, which prevents electrocution should a shaver or hair dryer drop into water.
3. Just Plain Gunky Issues.Stained carpeting, cracked vinyl flooring, broken or missing tiles, a bathtub or sink that never looks clean no matter how much you scrub, Pepto-Bismol pink tiles—these are all reasons to feel ambivalent about your bathroom. If "gross" is the first word you think of to describe your bathroom, it's time to remodel.
4. Planning to Sell in a Few Years.If you know you'll be moving within the next five years, remodeling an outdated bathroom can increase the value of your property. Although you may not recoup everything you spend, bathroom remodels have shown a greater return on investment than most other areas of the house. Focus on functionality, storage, and neutral palettes. Resolving the issues and making repairs should always come before cosmetics like paint or wallpaper. Remodeling a bathroom can be very disruptive to family life, so if you can't make the repairs yourself, find a reputable contractor who will work with your budget and your time frame.
Bathrooms may not hold the most glamorous spot in your home, but they must remain functional or everyone suffers. Remodeling can be very expensive, so how do you know when it's time to invest money in your bathroom?
The following four reasons explain why remodeling may be worth the expense.
1. Signs of Water Damage.Leaks in the plumbing can easily lead to problems like mold, loose tiles, and structural damage to the floor underneath. Water damage can wreak havoc on a bathroom, and in some cases will require tearing everything out. If you simply have a mold issue, you may be able to resolve it with ventilation. Install an exhaust fan or a new window, and then kill the mold with a bleach-and-water solution. Finally, use primer and paint that specifically hinder mold growth.
2. Electrical Safety.Do the lights flicker? Does the outlet sizzle when you plug in the hair dryer? Has the exhaust fan stopped working? Whether you need to overhaul the electrical circuits or simply change a few receptacles, don't ignore electrical problems in the bathroom. Every bathroom should have a GFCI outlet, which prevents electrocution should a shaver or hair dryer drop into water.
3. Just Plain Gunky Issues.Stained carpeting, cracked vinyl flooring, broken or missing tiles, a bathtub or sink that never looks clean no matter how much you scrub, Pepto-Bismol pink tiles—these are all reasons to feel ambivalent about your bathroom. If "gross" is the first word you think of to describe your bathroom, it's time to remodel.
4. Planning to Sell in a Few Years.If you know you'll be moving within the next five years, remodeling an outdated bathroom can increase the value of your property. Although you may not recoup everything you spend, bathroom remodels have shown a greater return on investment than most other areas of the house. Focus on functionality, storage, and neutral palettes. Resolving the issues and making repairs should always come before cosmetics like paint or wallpaper. Remodeling a bathroom can be very disruptive to family life, so if you can't make the repairs yourself, find a reputable contractor who will work with your budget and your time frame.
Buy Now and Get an $8,000 Tax Credit - Time Running Out!
Buy Now and Get an $8,000 Tax CreditBy Deanna Lynn
With only a few more months to take advantage of the tax credit, now is the time for serious buyers to purchase a home. Until December 1, 2009, first-time homebuyers can receive a tax credit of 10% of the home's value up to a maximum of $8,000 if the sale of the home closes before the deadline.
In this buyers market of low interest rates and an abundance of homes for sale at affordable prices, the extra incentive of the tax credit gives first-time homebuyers the chance of securing the home of their dreams at a price they can afford.
What homes qualify?
Buyers who haven't owned a principal residence home in three years can qualify for the tax credit. Any home purchase qualifies, including single-family homes, townhouses, condominiums, manufactured homes and houseboats. Qualifying homes may be an existing home, new home or a home the owner contracted to build. Those who own a vacation home or rental homes that are not their principal residence are also eligible for the tax credit if they buy a principal residence.
Are there income restrictions?
Income limitations of $75,000 for single taxpayers and $150,000 for married taxpayers who file a joint return apply to this tax credit. However, taxpayers who earn slightly more than the limits can apply for a reduced tax credit.
Is it difficult to claim the tax credit?
Claiming the tax credit is easy. When filing your 2009 income tax return simply complete IRS Form 5405 and then enter the amount from the bottom of that form on line 67 of Form 1040. The tax credit will be deducted from the income taxes you owe. If you do not owe any taxes, you will receive a refund check for the full amount of your tax credit.
What if I need the tax credit immediately?
For homebuyers who wish to collect or use their anticipated tax credit before filing their 2009 taxes there are some alternate options available. Buyers can adjust their tax withholding amount on their W-4 through their employer so fewer taxes are taken out of their paycheck. This will allow them more money in pocket for the remainder of the year. Buyers purchasing through the Department of Housing and Urban Development (HUD) or a Federal Housing Authority (FHA) approved loan can get a short-term loan for their anticipated tax credit to use for closing costs or as a portion of the down payment. Buy now and take advantage of this tax credit. It is the perfect way to afford a home you might otherwise have not been able to purchase.
With only a few more months to take advantage of the tax credit, now is the time for serious buyers to purchase a home. Until December 1, 2009, first-time homebuyers can receive a tax credit of 10% of the home's value up to a maximum of $8,000 if the sale of the home closes before the deadline.
In this buyers market of low interest rates and an abundance of homes for sale at affordable prices, the extra incentive of the tax credit gives first-time homebuyers the chance of securing the home of their dreams at a price they can afford.
What homes qualify?
Buyers who haven't owned a principal residence home in three years can qualify for the tax credit. Any home purchase qualifies, including single-family homes, townhouses, condominiums, manufactured homes and houseboats. Qualifying homes may be an existing home, new home or a home the owner contracted to build. Those who own a vacation home or rental homes that are not their principal residence are also eligible for the tax credit if they buy a principal residence.
Are there income restrictions?
Income limitations of $75,000 for single taxpayers and $150,000 for married taxpayers who file a joint return apply to this tax credit. However, taxpayers who earn slightly more than the limits can apply for a reduced tax credit.
Is it difficult to claim the tax credit?
Claiming the tax credit is easy. When filing your 2009 income tax return simply complete IRS Form 5405 and then enter the amount from the bottom of that form on line 67 of Form 1040. The tax credit will be deducted from the income taxes you owe. If you do not owe any taxes, you will receive a refund check for the full amount of your tax credit.
What if I need the tax credit immediately?
For homebuyers who wish to collect or use their anticipated tax credit before filing their 2009 taxes there are some alternate options available. Buyers can adjust their tax withholding amount on their W-4 through their employer so fewer taxes are taken out of their paycheck. This will allow them more money in pocket for the remainder of the year. Buyers purchasing through the Department of Housing and Urban Development (HUD) or a Federal Housing Authority (FHA) approved loan can get a short-term loan for their anticipated tax credit to use for closing costs or as a portion of the down payment. Buy now and take advantage of this tax credit. It is the perfect way to afford a home you might otherwise have not been able to purchase.
New Mortgage Disclosure rules may delay closings: MDIA-08 Effective 7/30/09
Mortgage Disclosure Improvement Act of 2008
Effective July 30th ,2009; the Federal government has put in place new regulations which will dramatically affect how real estate closings are scheduled!!!
Currently when a consumer applies for a mortgage loan, the Lender is required to send out various disclosures within 3 business days, which contain the details of the loan the consumer has applied for. Should there be any changes to the terms of the loan for which the consumer has applied; the Lender typically re-discloses the amended terms during the processing of the loan. There is currently no time frame for redisclosure. As such, should there be any changes just prior to closing, a previously schedule closing can typically continue as planned. The new regulations will mandate various waiting periodsif redisclosure is required. Even though the regulations provide for a ‘hardship" waiver, you can expect that Lenders will not grant these during the normal course of business. Specifically, the new mandated time frames are:
No closing can be scheduled for at least 7 business days from the initial disclosure of the loan.
If the loan requires redisclosure, there is a mandatory 3 day waiting period.
Whereas the above may not seem to be a big change, there are a number of issues which can be expected to arise: The minimum time frame to close a transaction will now be at least 7 business days.
Closing dates will now be subject to possible delays if the loan has to be re-disclosed based revised APR calculations.
As you know, the final "numbers" for a typical real estate transaction are generally not available until just prior to closing when the settlement agent (Attorney, Title Company) prepares the preliminary HUD-1 Settlement statement. Since there are many parties to a typical transaction, there is no way to definitively know what the actual charges on a transaction are until this time. However, the Lender, by law, has to estimate these charges up front on the borrower's Good Faith Estimate and Truth-In-Lending Statement.
The new regulations have mandated re-disclosure if the final numbers on the transaction differ by more than:
a) An increase of .125% in rate on the APR
b) An increase of $100.00 in finance charge (includes attorney and title charges)
The key to successfully managing your transactions will be to understand what can "trigger" a re-disclosure and a mandatory waiting period. Below are some examples:
The borrower chooses to pay points on a loan for a lower rate after the initial disclosure
The borrower chooses to lower their down payment and increase the loan amount
The borrower chooses a buy down of their rate
The per diem interest changes based on the actual closing date
The borrower opts to "float" their rate and locks in close to the closing date, however the rates have risen and their final rate is higher
In the past we have often allowed a borrower to float up until the last few days prior to closing, this will force us to limit the time they are allowed to float to assure a timely closing
The initial estimated charges which impact the APR increase by more than $100.00. (includes attorney and title charges)
A new borrower is added to the loan after the initial application
The borrower decides to change the type of loan for which they are applying
The above are but a few of the situations which are normally encountered during a typical transaction which can affect a closing date.
In response to the above you can expect that lenders will begin to impose strict time frames on real estate transactions. As the industry absorbs these changes I will make sure to keep you informed. In the meantime, I strongly suggest that you begin discussions with your service providers to make sure that they are aware of these changes and plan accordingly. It is much better to anticipate problems and avoid them, than to have to call a borrower with the news that their closing has to be delayed. Customer service is what should drive all of us. There is no better way to guarantee future success than to take care of our current customers!!!
This is a case of regulations that are coming into play that may actually hurt the consumer, much the same as the Appraisal changes this year. There is a fight going on in DC over each of these since the seem to do more harm than good, but for now we have to deal with higher appraisal costs along with potential delays. But if we manage it well up front we can avoid some of the pain
Mortgage Disclosure Improvement Act of 2008
Effective July 30th ,2009; the Federal government has put in place new regulations which will dramatically affect how real estate closings are scheduled!!!
Currently when a consumer applies for a mortgage loan, the Lender is required to send out various disclosures within 3 business days, which contain the details of the loan the consumer has applied for. Should there be any changes to the terms of the loan for which the consumer has applied; the Lender typically re-discloses the amended terms during the processing of the loan. There is currently no time frame for redisclosure. As such, should there be any changes just prior to closing, a previously schedule closing can typically continue as planned. The new regulations will mandate various waiting periodsif redisclosure is required. Even though the regulations provide for a ‘hardship" waiver, you can expect that Lenders will not grant these during the normal course of business. Specifically, the new mandated time frames are:
No closing can be scheduled for at least 7 business days from the initial disclosure of the loan.
If the loan requires redisclosure, there is a mandatory 3 day waiting period.
Whereas the above may not seem to be a big change, there are a number of issues which can be expected to arise: The minimum time frame to close a transaction will now be at least 7 business days.
Closing dates will now be subject to possible delays if the loan has to be re-disclosed based revised APR calculations.
As you know, the final "numbers" for a typical real estate transaction are generally not available until just prior to closing when the settlement agent (Attorney, Title Company) prepares the preliminary HUD-1 Settlement statement. Since there are many parties to a typical transaction, there is no way to definitively know what the actual charges on a transaction are until this time. However, the Lender, by law, has to estimate these charges up front on the borrower's Good Faith Estimate and Truth-In-Lending Statement.
The new regulations have mandated re-disclosure if the final numbers on the transaction differ by more than:
a) An increase of .125% in rate on the APR
b) An increase of $100.00 in finance charge (includes attorney and title charges)
The key to successfully managing your transactions will be to understand what can "trigger" a re-disclosure and a mandatory waiting period. Below are some examples:
The borrower chooses to pay points on a loan for a lower rate after the initial disclosure
The borrower chooses to lower their down payment and increase the loan amount
The borrower chooses a buy down of their rate
The per diem interest changes based on the actual closing date
The borrower opts to "float" their rate and locks in close to the closing date, however the rates have risen and their final rate is higher
In the past we have often allowed a borrower to float up until the last few days prior to closing, this will force us to limit the time they are allowed to float to assure a timely closing
The initial estimated charges which impact the APR increase by more than $100.00. (includes attorney and title charges)
A new borrower is added to the loan after the initial application
The borrower decides to change the type of loan for which they are applying
The above are but a few of the situations which are normally encountered during a typical transaction which can affect a closing date.
In response to the above you can expect that lenders will begin to impose strict time frames on real estate transactions. As the industry absorbs these changes I will make sure to keep you informed. In the meantime, I strongly suggest that you begin discussions with your service providers to make sure that they are aware of these changes and plan accordingly. It is much better to anticipate problems and avoid them, than to have to call a borrower with the news that their closing has to be delayed. Customer service is what should drive all of us. There is no better way to guarantee future success than to take care of our current customers!!!
This is a case of regulations that are coming into play that may actually hurt the consumer, much the same as the Appraisal changes this year. There is a fight going on in DC over each of these since the seem to do more harm than good, but for now we have to deal with higher appraisal costs along with potential delays. But if we manage it well up front we can avoid some of the pain
Sunday, August 2, 2009
A new month
Can you believe that July has come and gone and now we are starting into the early fall months. August will be a good month as I have one closing and made two sensational friends in the process. Should close in another week. I am not going to start building my listings. I took a sabbatical from my last short sale as that just about did me in and was so much work. I'm going to work the listing side to build my listing up and have in place for fall and the first of the year sales.
The market is good and we are seeing a slow up trend in the housing market here in Utah. The whole problem is being able to keep your present job and of course not taking out equity in your home that makes you go topsy turvy in what it is worth and what you owe.
I have two out of state clients I am working with, one is under contract and will close in October and the second is getting all their documents together for the lender for a VA. Once that is in place we will look for a home and get them under contract also which will be an October closing as well.
ZipRealty is the best company I have ever worked for and they are always striving to better their customer service and the way we do business. Our website is the best there is in the Real Estate market.
Saturday I went to the RPAC summer party and it was a lot of fun and met many new Realtors, Lenders and Escrow officers that look like they might be part of a great team. The best part besides our donations going to RPAC to help Realtors in Utah keep an eye on legislation that is passed that would hinder our careers as Realtors and not in the best interest of the housing market as a whole. They had lots of drawings and I won the Apple IPOD - ALRIGHT!!!! I usually do not win in drawings so this was a first and it is really neat. I have to get busy and download some of my favorite albums and pics.
Next week is going to be busy and also have lots of fun events planned for the weekend!
The market is good and we are seeing a slow up trend in the housing market here in Utah. The whole problem is being able to keep your present job and of course not taking out equity in your home that makes you go topsy turvy in what it is worth and what you owe.
I have two out of state clients I am working with, one is under contract and will close in October and the second is getting all their documents together for the lender for a VA. Once that is in place we will look for a home and get them under contract also which will be an October closing as well.
ZipRealty is the best company I have ever worked for and they are always striving to better their customer service and the way we do business. Our website is the best there is in the Real Estate market.
Saturday I went to the RPAC summer party and it was a lot of fun and met many new Realtors, Lenders and Escrow officers that look like they might be part of a great team. The best part besides our donations going to RPAC to help Realtors in Utah keep an eye on legislation that is passed that would hinder our careers as Realtors and not in the best interest of the housing market as a whole. They had lots of drawings and I won the Apple IPOD - ALRIGHT!!!! I usually do not win in drawings so this was a first and it is really neat. I have to get busy and download some of my favorite albums and pics.
Next week is going to be busy and also have lots of fun events planned for the weekend!
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