Posts Tagged: ‘mortgage products’

Little Known Mortgage Underwriting Guideline Exception

August 1, 2013 Posted by Andre Hemmersbach

Over the last several years the news about lending and lending guidelines has for the most part been pretty negative so when there is something positive to highlight it makes my job a bit easier.

One of Fannie Mae’s (FNMA, the government institution that buys almost all the fixed rate mortgages made today) little known rules that could help certain individuals is how they look at borrowers who are purchasing, refinancing or doing a cash-out refinance for and elderly parent or disabled child.

If the elderly parent, or in the case of a disabled adult child, is unable to work or does not have sufficient income to qualify for a mortgage on his or her own FNMA will allow the borrower of the elderly parent or disabled child to purchase or refinance the home as the owner occupant at the owner occupant rates, loan to values and guidlelines even if they are not going to occupy the property.

There would be several additional documentation requirements but as a whole it pretty simple. More astonishing than the fact that FNMA allows this as an exception is that not all lenders follow the rule or even know about it.

If i can be a resource to you on any real estate matters please call me.

New Law To Help Los Angeles and Orange County Real Estate?

November 19, 2011 Posted by Andre Hemmersbach

On Friday morning November 18th, President Barack Obama signed a bill that among other things will specifically aid real estate sales in high cost areas of Los Angeles and Orange Counties. In fact this is quite a surprising move by the administration and congress seeing all the rhetoric coming from Washington about the federal government getting out of the mortgage business.

The last two years  have seen the mortgage industry get very conservative as a whole. There have been a barrage of “take-a-ways” from Fannie Mae (FNMA), Freddie Mac (FHLMC) and the Federal Housing Administration (FHA), the institutions that are guaranteed by the US Government and purchase the majority of all mortgages today. These changes have made getting a home mortgage more difficult. One such recent change that just took effect on October 1, 2011 was the decrease in the temporary loan limits from $729,750 to $625,500. The law that went into effect today, returned the maximum loan limit for FHA to $729,750 for single family residences and condos until the end of 2013. No changes were made to the maximum loan limits of FNMA or FHLMC.

After the drop in the maximum loan limits sales of properties in Orange and Los Angeles counties with loans between $625,500 from $729,750 fell sharply, to 102 last month, according to San Diego real estate firm DataQuick. That was a 71% decline from 350 in September and down 71.5% from 358 sales in October 2010

How successful this move will be in stabilizing the real estate market will have to be seen. FHA is predominately used by first time homebuyers because it is less restrictive in income qualification and credit requirements, only requires a minimal 3.5% down payment (all of which can be a gift) and allows for non occupant borrowers such as parents trying to help their children qualify for a home. One of the few draw backs of FHA financing is that all FHA loans regardless of down payment require mortgage insurance. Besides how many first time homebuyers purchase a home in the $675,000 range?

 These institions are backed by guarantees made by the US government. As financial losses from the real estate implosion have mounted and regulations from the financial reform acts have become constrictive  other sources for mortgage money has become very scarce.

 . . Currently the Federal Government guarantees loans purchased by FNMA, FHLMC and FHA and over the last 3 years other sources for mortgage money has become very scares.

This is something that will help buyers using using FHA ) financing. F

Creative Financing

February 14, 2011 Posted by Andre Hemmersbach

Home buyers and sellers are turning back to creative financing methods in today’s competitive real estate markets. One of the “old standbys” in tough markets has been a lease with an option to buy or “Lease Option” for short.
A standard lease option allows a buyer to rent a sellers home with an option to buy that home at a set price sometime in the future. Typically an option price or down payment is given at the opening of an escrow which will be forfeited to the seller in the event that the purchaser/renter does not consummate the transaction at the end of the lease period. A monthly rent payment is paid by the purchaser/renter to the seller of the house during the option period.
The beauty of a lease option is that it can be written in any combination of creative ways. The amount of the upfront option payment, final sales price, length of the option contract, rent amount and the amount of monthly rent that will go towards the eventual purchase can be negotiated, which could create a win-win for both parties.
Take for example, a borrower who has issues securing a home loan due to the fact that he is just starting his own business and a seller who has had his property on the market for several months at a price that may be a little unreasonable at this time, could both be aided by a lease option. The buyer may be willing to pay the extra premium in price if he can lock in that price for a period of two years while real estate values correct and his business get established. He additionally negotiates for 25% of the monthly rent to go towards the eventual purchase price of the home. The seller accepts the offer of the higher than market sales price for a 7% option fee that will go towards the sales price if the option to purchase is exercised or forfeited to the seller if the deal falls through. He agrees to the buyers request to credit 25% of the rent toward the purchase price but negotiates to have the rent be $150 higher a month than previously requested.
As you can see, a lease option is extremely flexible and be the financing tool to make your real estate deal come together. It is extremely important to discuss all of the variables with an experienced real estate agent, mortgage professional, tax accountant and your attorney.

Temporary Loan Limits Extended

October 11, 2010 Posted by Andre Hemmersbach

President Obama signed yet another bill that will make a push to help stabilize our housing market. The bill extends the temporary loan limits until the end of 2010. The regular loan limits vary from area to area and are at $417,000 for single family residences in Los Angeles and Orange Counties. Loans greater than the conforming loan limits “Jumbos” or “Non Conforming Loans” generally carry a higher interest rate and therefore make those types of loans less affordable.

The extension has received praise from N.A.R. (National Association of Realtors) and C.A.R. (California Association of Realtors) as the higher conforming ca mortgage loan limits combined with the tax credit have helped stabilize the real estate markets.

The maximum temporary loan limits are as follows:
■1 Unit – $729,750
■2 Units – $934,200
■3 Units – $1,129,250
■4 Units – $1,403,400

All About Impound Accounts

June 5, 2010 Posted by Andre Hemmersbach

Many aspects of a mortgage are confusing to borrowers, and impound accounts (or escrows) rank high on that list.