Jeff Rickard

Okay, I have been very bad and not doing my posts.  Many things have been happening of late and it is time to start in earnest again.  This time around I am still going to be doing Motivation Monday but Motivation Monday may fall on another day.  The mortgage business is still a roller coaster but I am glad to report that business is good.  First time home buyers - BUY NOW!  Refinancers - REFI NOW (however the rates are not as good as the News channels are reporting), they are still GREAT!  Washington - Stop talking and start helping all of us that are not in foreclosure.

Back to school. Seems like summer just started and it’s time, once again, to make the trip to the store for all those school supplies. Can buying school supplies actually hurt your credit? Do the kinds of items we purchase really have any affect on our credit score? Read on….

Credit card companies are feeling their own pain with the credit crunch. According to American Express and several other companies they are seeing more and more consumers falling behind on their credit card payments. They are also seeing higher balances than before with people being driven to use their credit cards for paying some monthly bills. Their way of combating this though could hurt the average consumer. Continue Reading »

I took a little sabbatical from the blog over the summer but I am back and publishing again. A lot is going on in the mortgage business, as usual, and I will start posting again immediately.

     Just an FYI to Realtors out there.  Last week we were doing an owner occupied loan and the mortgage insurance company (other player now involved in underwriting) ran a check and found out that the borrower had another property that had mortgage insurance issued for owner occupancy.  They then would not issue new owner occupied mortgage insurance.  At that point the deal died.

     What was the explanation?  The borrower had been transferred to Tennessee and did buy an owner occupied home.  Before he got there the company decided for business reasons against the transfer and now the client was faced with buying his home in Denver as a rental property.  Are you kidding? 

When it comes to your credit score, don’t be caught by surprise!

April showers may bring May flowers but those storms may not be over yet.  The key is to protect you from the possible damage that may come from an unexpected storm.  Protecting your credit is somewhat the same.

Up until now lenders have always considered a 680 credit score as “A” paper.  If you had a score above 720 you were practically gold.  This is all about to change.  Fannie Mae and Freddie Mac have recently announced some major changes.

Imagine having to pay 2.75% in points and you’ve never had a late payment on anything!  As of June 1st on loans with LTV’s about 70% Fannie Mae will penalize borrowers by 50 basis points for a score below 720.  And Freddie Mac will penalize borrowers 30 basis points for a score below 740.  This is on top of the loan level pricing they have both implemented for borrowers with scores below 680.

What does this mean?  It means borrowers could pay hundreds of dollars more each month or thousands more at closing.  For example – on a $250000 loan, if a borrower has a score below 620 they would pay a 2.75% delivery fee at a cost of $6875.  More then ever it is important for borrowers to get their scores as high as possible. Continue Reading »

It has come to our attention that some sellers who are in trouble on their mortgages and are in pre-foreclosure or foreclosure are being advised to set up a “Land Trust” to avoid having other creditors attach liens to the property.  After reviewing the documents with our attorneys, we have determined this will be unacceptable and will in fact trigger the FHA 90 day flipping rule among other things.

In the example provided, the seller transfers the title to the property from him/her personally to this Land Trust which may or may not be in the Seller’s name.  Many times, this is put not only into the seller’s name but into the name of another individual or entity as well which is what will trigger the FHA flipping rule.

Please make sure when you are reviewing the contracts or title work that there is no reference to a Land Trust being the seller of the property.  If you find an instance of this then the 90 day rule must be applied. 

Remember you can not use FHA financing to buy the house unless the seller has been in title for at least 90 days.  There is an exception to this on bank owned properties and some non profit organizations.

Continued from Monday February 25th. ( Remember I am going to go through the exercises from The Seven Minute Difference to develop a story of how my service is different from my competitors)

Part 4 creating a unique positioning statement.

     Remember this whole exercise is to help me realize how I am different in the market place as well as help me create a “unique positioning statement” that allows me to tell others in one or two sentences “here is what I do and here is why that information might interest you.”  We are finished with the exercises and now it is time to create the statement.

     “I am a residential mortgage lender with Universal Lending.  I run my business differently than most mortgage professionals.  I would love to show you what I do.”

That statement always elicits the required question, “how are you different?”

Now is the time for the unique positioning statement:

“I do everything I can to make the mortgage process understandable and to make my clients feel that all their questions and concerns are important and need to be addressed to their satisfaction.  At the end of the process my clients feel they made a wise and safe choice.”

I am interested in your input, what do you think of my unique positioning statement?

     I have just spent the last few weeks fielding several calls that have started out with the phrase “last year I qualified for $300,000″ or “last year a mortgage guy said I could get a loan for $300,000″.     Well let me tell you, last year was a long time ago. 

     There is no more stated income, there are a lot less “bad” loan officers, there are no more “B” paper lenders and the concept of just saying yes and we will see what sticks is finally over.  

     The key is that these people who I have been talking to who are saying they qualified for $300,000 (a payment of about $2100/month) only made $2500 a month gross.  They NEVER “really” qualified for $300,000 but they are in total shock when I tell them they can only qualify for about $140,000. 

     You may ask how can they be that *&%$#@, but the truth is, the mortgage industry and certain Realtors not only said it was possible but actually closed the clients friends and coworkers, who made exactly what they made, on the $300,000 house.

     So what do we do now?  Start over, get the correct answers and instead of being angry about how much you qualify for be thankful that you did not buy last year!

     This is a great time to be a first time home buyer.  Prices are right, FHA rates are low and down payment assistance from the Colorado Housing and Finance Authority (CHFA) is easier than ever to get.  That is why my business and the business at Universal Lending is BOOMING.  

     So what is the problem?  The mortgage industry.  All the fall out from the past that actually has brought FHA and CHFA back from the dead is now bringing other players into the mortgage decision process.  This time it is the companies that provide mortgage insurance, at one time a mortgage service that was taken for granted is now part of the decision process. 

     If you are doing a 100% conventional CHFA loan in a declining market (almost all of the front range), such as My Community or Home Possible you now need to supply the mortgage insurer the following: the loan application, credit report, income documentation, sales contract and appraisal for their review. 

     What does that mean?  Best case scenario -more time (4-5 days as of today).  Worst case scenario - they say no.

     It appears that we will be able to go to $362,790 on FHA loans without a price hit.  The FHA increased limit for most of the front range is now $406,250.  So, if you are over the $362,790 you will experience increased cost to get that loan.  That cost is still undetermined but best guess is that it will be between 2.5 - 4 points.  WOW!