Many of my mortgage clients who are self employed simply cannot qualify for a mortgage in our current loan environment.
Decades ago, stated income and low documentation loans were created for self employed buyers who were legitimately earning high wages and had great assets; but whom also took advantage of legal tax deductions, business write-offs, and complicated real-estate investment trusts [which produced positive income while also generating tax "losses"].
As we know, over the years these programs were bastardized and created a “low-doc” environment in which anyone with a decent credit score could get virtually any purchase loan or refinance. Since the real estate meltdown which started in 2007… banks are showing no interest in ever again providing the stated income lending programs that self employed buyers have come to count on.
Here is an explanation of the problem, and what self employed borrowers can do to find out if they are eligible for a loan. Read the rest of this entry »
Over the last 10 years I have heard friends and clients predict and prognosticate endlessly about what the housing market is going to do. Some guessed correctly, some guessed incorrectly.
However, the most common excuse I have heard over the last three years from friends, family, and clients about the purchase of new property is this:
“I’m waiting for the market to go down, I’m waiting for the bottom of the market, I think prices are going to drop another 10%”
The new Case-Shiller’s U.S. National Home Price Index shows that for those who continued to wait on the sidelines for the last year may have just missed the bottom of the housing market.
Below is a reprint of an article regarding the Case-Shiller’s U.S. National Home Price Index which is the most closely watch gauge of housing prices in America. The index estimates that for the first time in 3 years, prices are on the rise. It appears that in major metropolitan areas like Southern California, supply and demand, and price to income ratios may have finally struck and equilibrium.
Additionally, for clients who bought over the last year and may have experienced a small decline in value of approximately 5%; the tax advantageous of being a home owner versus a renter will generally off-set this short term loss in property value. Read the rest of this entry »
In the last few weeks I’ve seen several deals fall apart at the last minute due to in-properly documented “gift funds”.
If a buyer is going to receive gift funds in order to cover their down payment, closing costs, or underwriter required reserves, these are a few points to remember: Read the rest of this entry »
Attached is a great article on how the good intentions of the Home Valuation Code of Conduct is actually making it more difficult to close loans and is encouraging seasoned appraisers to leave the business.
This is a reprint from the NY Times. Read the rest of this entry »
In today’s market, many banks and asset management companies selling foreclosed property are requiring buyers to sign bank drafted contracts or adendums in addition to the standard real-estate contract.
Surprisingly, most clients sign off on this paperwork expecting it to be the same type of boiler-plate wording as your state approved real-estate contract. Over the years, state approved contracts drafted by the local department of real-estates have become more buyer friendly and extend additional consumer protections for the buyers of real property. In contrast to the standard buyer friendly contract, these new bank drafted contracts and addendums do not carry the same favorable terms for a buyer. Read the rest of this entry »
I’m back to blogging after some much needed travel, catching up on personal appointments, and finalizing some other business projects. If you’re interested, check out my new venture at www.CypressParkBoxingClub.com
Today I want to talk about the importance of locking in the terms and conditions of a purchase transaction much sooner then the industry is accustomed to. Read the rest of this entry »
Currently the $729,750 high balance conforming loan limit is set to expire for deals that do not close by December 31st, 2009. The industry is expecting a $100,000 drop in the conforming loan limits. This reduction to the conforming loan limit will substantially decrease the purchasing power of FHA buyers and those borrowers who only qualify for a conforming loan.
With many transactions taking 60 days or more to close escrow, we basically have a 2 month window of time in which to originate these high balance loans up to $729,750.
If you are a buyer whose price point or loan approval require you to take advantage of the temporary high balance loan limits; or, if you are a client who is trying to sell your home in the $750K – $900K range, it is imperative you act quickly before these loan limits expire.
As always, if you need information on starting a new loan for the purchase or refinance of your home, contact me at TrustYourLender@gmail.com
*** From my Partner Thomas while I’m out of town camping in Portland ***
In today’s environment we are seeing more & more conditions being added prior to closing. Whether it is getting the first page of a financial statement into underwriting or needing one last signature on a document, you can expect a condition to come up at the 11th hour that requires your attention.
Due to this I would advise buyers to keep their schedule as open as possible for the week leading up to closing. All too often buyers try to plan a tight and very hectic before the deal has closed and the loan has funded. Tightening time-lines and carrying a heavy work load prior to the close of escrow is a recipe for headache and heartache.
As a buyer, keep in mind that this is one of the most complicated transactions you will face and is not something to leave unattended.
We advise our clients to expect the unexpected & be on your toes before closing on your new home. This may sound cliche, however, it will undoubtedly save you the stress & wrinkles that would occur otherwise.
Many home buyers are confused by the current housing market. On one hand there is report after report, article after article regarding the declining housing market and how this is a buyer’s market.
Yet, as many of my clients who are searching for homes between $350,000 – $550,000 already know, there is now an ultra-competitive markets in certain areas. There are several key price points on mortgages which are affecting this level of competitive pricing. Read the rest of this entry »
