Congress has passed H.R. 5981 - FHA Mortgage Insurance Changes...

This bill gives FHA the authority to adjust its annual mortgage insurance premiums.

While there is both good news and bad news for FHA mortgage applicants, this premium restructuring will help to keep FHA stable in the long run. The up-front mortgage insurance has been lowered considerably. This will mean a smaller bite out of consumer wallets in order to close the loan they have applied for. With todays stricter underwriting to qualify, there is less risk of default by new mortgage holders so this move makes sense. Now for the trade-off...

On the other side of the equation, the cost of the monthly amount of mortgage insurance will increase. This could be interpreted as FHA reserves being replenished at a slower rate than before passage of this bill. With the more stable underwriting lowering the risks, consumers can save some of that money that was needed just to close their loan. You will still end up spending that money but, it will be as a slightly higher monthly payment amount. While this is a fair trade off for many, some folks who are right at the limit for the maximum monthly payment they can qualify for, will have to find a way to lower their loan amount to offset the impact of the higher monthly mortgage insurance premium. This change will be effective for all FHA loan applications started on or after September 7th, 2010. While President Obama has not officially signed the bill into law, no veto is expected.

House Extends Closing Date for Homebuyer Tax Credit!

Homebuyer Tax Credit Update Effective 6/30/2010 - Waiting for the Bill to be signed!

The U.S. House of Representatives has voted to extend the Home buyer Tax Credit.

The National Association of Realtors said that over 180,000 people would lose their Tax Credit if the extension didn't come through, now we have confirmation that the House of Representatives has extended this closing date to September 30th.

According to the National Association of Realtors what tipped the balance was the people who followed the rules and were still going to be caught without the Home Buyer Tax Credit due to the June 30th closing date. These transactions included some 75,000 short sales, or homes being purchased for less than the existing debt on them.

Dust off those April contracts that could not close by the June 30th deadline! All that remains for the Bill to extend the deadline for closing to September 30th, is one signature!

(from earlier post on 06/16/2010)

If you haven't been informed yet, the Homebuyer Tax Credit has almost ended with less than a month left for First Time Home Buyers and Current Homeowners to close their deals and qualify for the Tax Credit. While this opportunity was a great chance to get hefty Tax Credit from the government ($8,000 for First Time Home Buyers and $6,500 for Home Owners buying and moving into another home), it may be a problem for those who applied near the end of April and are still trying close their loans. Right now, those Tax Credits were set to expire for any loans that had not been closed and funded by June 30th of 2010. You had to have a signed Purchase Contract in place by April 30th. As a result, some Purchases are starting to fall apart because they are "In Contract" before April 30th but they are not able to close by the end of this month.

Many mortgage lenders have been experiencing hard times closing deals that suddenly appeared in April, and many Mortgage Brokers know "some deals just won't close before June 30th."

There is talk of Harry Reid possibly having a proposal which will allow those who have already signed sales contracts, to close and fund by September 30th as an amendment to a Bill already in Congress that would extend jobless benefits for the unemployed through the end of November.

The National Association of Realtors has been pushing very hard for an extension out of an awareness of the difficulty Mortgage Brokers are having with the current deadline of June 30th. Since the entire process of getting a Mortgage now takes a bit longer than it used to, Mortgage and Real Estate Professionals view an extension of the Tax Credit Program as essential.

First-time buyers are eligible for a tax credit of up to $8,000. Current Homeowners who bought and moved into another home can qualify for a credit of up to $6,500.

Alan Greenspan, Former Federal Reserve Chairman on Rates...

Last week, Greenspan wrote an Op-Ed for the Wall Street Journal in which he warns of an inevitable rise in interest rates.

Here is a link to the WSJ's online excerpt for non-subscribers. The second paragraph should be more than enough to tell you that rates will rise and not only that, they MUST rise. To read the entire piece, take advantage of the subscriber link at the end of the excerpt.

So what does this mean to those who want to want to buy or refinance a home?

Rates are not likely to go any lower and home prices are still low. All indicators are pointing to taking action now or missing out! If you are currently in an ARM Loan, you need to refinance now into a fixed rate mortgage. If you are buying and you have been waiting for better rates or better prices, it's time to make a decision!

To get started now, give our professional staff at Valley West Mortgage a call at (888) 931-0007.

Possible Extension to Homebuyer Tax Credit... Or Not?

Rumors of a Possible Extension of the Homebuyer Tax Credit now appear to be short lived! This Tax Credit may be back on hold as of 06/25/2010. When we know more, we'll post it right away!

(from earlier post on 06/16/2010) If you haven't been informed yet, the Homebuyer Tax Credit has almost ended with less than a month left for First Time Home Buyers and Current Homeowners to close their deals and qualify for the Tax Credit. While this opportunity was a great chance to get hefty Tax Credit from the government ($8,000 for First Time Home Buyers and $6,500 for Home Owners buying and moving into another home), it may be a problem for those who applied near the end of April and are still trying close their loans. Right now, those Tax Credits were set to expire for any loans that had not been closed and funded by June 30th of 2010. You had to have a signed Purchase Contract in place by April 30th. As a result, some Purchases are starting to fall apart because they are "In Contract" before April 30th but they are not able to close by the end of this month.

Many mortgage lenders have been experiencing hard times closing deals that suddenly appeared in April, and many Mortgage Brokers know "some deals just won't close before June 30th."

There is talk of Harry Reid possibly having a proposal which will allow those who have already signed sales contracts, to close and fund by September 30th as an amendment to a Bill already in Congress that would extend jobless benefits for the unemployed through the end of November.

The National Association of Realtors has been pushing very hard for an extension out of an awareness of the difficulty Mortgage Brokers are having with the current deadline of June 30th. Since the entire process of getting a Mortgage now takes a bit longer than it used to, Mortgage and Real Estate Professionals view an extension of the Tax Credit Program as essential.

First-time buyers were eligible for a tax credit of up to $8,000. Current Homeowners who bought and moved into another home could qualify for a credit of up to $6,500, that may last until September 30th. When we hear of any confirmation on such a proposal, we will be sure to let you know!

New Quality Control Measures from Fannie Mae

In May our big Brother or "Sister", the largest purchaser of home loans, announced a new requirement prior to the funding of a Mortgage. Posted on Mortgage News Daily, May 10th. Fannie Mae introduced a quality control measure which is for the purpose of the safekeeping of the investors against the future home buyer assuming more debt than they can manage and as a preventative measure to prevent possible future defaults.

This quality control measure makes the lender re-verify the borrower's credit history by obtaining a new in-file credit report for loans which are to be underwritten manually and through the underwriting process.

Note: The credit report must be a source other than the original credit reporting agency.

When a lender has this information it allows them to find out if you've tried to take another loan out on the same property, which isn't favorable by any means.

How should you proceed?

Simple, If you are in the housing market it is very necessary not to apply for additional consumer credit without consulting with your mortgage professional first.

Mortgage Loan Modification Vs. Refinance

What is the difference? Which one is right for me?

Loan Modification, or more specifically, Mortgage Modification is a tool that you may be able to use to stay in your home rather than loose it to Foreclosure. It differs from a Refinance in that Modification programs are designed to modify the terms of your existing Mortgage. A Refinance replaces your existing mortgage with an entirely new one. Since 5% of all Adjustable Rate Mortgages are going to "Reset" in the next 10 months, you could be in real trouble if you have one of those ARM loans. Ideally, you want to refinance into a low, Fixed Rate Mortgage before your current mortgage resets and before Rates on Fixed Mortgage Loans start to rise!

The Obama Administration has put forth a government mandate to Lenders called the "Federal Home Affordable Modification Program" or HAMP. Many lenders have their own guidelines under which they would agree to a Modification of your existing Mortgage but the Obama program, HAMP has specific guidelines under which a Lender must allow a Mortgage Modification if you meet the criteria. The Obama Making Home Affordable Program may be available if your loan is owned by Fannie Mae or Freddie Mac. If not, check with your Lender or Loan Servicer to find out what Mortgage Modification programs they might have available.

You can apply to your Lender on your own for a Modification of your Mortgage but, the process can be quite daunting. Just here locally, in Las Vegas, many Loan Modification companies or consultants have popped up in the past two years. While many have been reputable, many have been taking advantage of desperate homeowners by charging high fees in advance and then not providing the service. Some have even collected as many fees as they could and then just disappeared after stringing along as many people as possible while they collect fees from as many "clients" as they can. For this reason, the State of Nevada and many other states have enacted laws requiring any person or company engaging in Loan Modification services, to be licensed and regulated just as Mortgage Brokers and Lenders are currently.

At the end of this post, you will find important links to resources that you can and should use to educate yourself on the Loan Modification Programs that are available to you. It is important to be very well informed and know your rights before you contact one of these Mortgage Modification companies. First and foremost, check to see if your State requires Licensing for Loan Modification Companies or Consultants. Then make sure that the company you choose is licensed!

So which one should I choose?

That depends on your current situation. Generally, if you are current on your mortgage and not owing more than your home is valued at, i.e. "upside down", you should look at Refinancing first. Even if you have had a few late payments in the past two years, you may qualify so don’t tell yourself that you can’t before consulting with our Mortgage Professionals here at Valley West Mortgage. If you are not sure that you are “upside down” or have too many late payments, not enough income or a long enough employment history, etc., we will help you to determine your exact situation so that you can make an informed choice.

Here at Valley West Mortgage, we do not provide Loan Modification services. We don’t charge any fees in advance so it will cost nothing to talk to us and find out which choice makes sense for you. We can provide you with a true picture of your situation so that you will be comfortable in the knowledge that either, you can qualify to refinance and would gain a significant savings in your Monthly Payment by doing so or, you will know that you should seek a competent and trustworthy Loan Modification Specialist who is properly licensed (if required in your State). You may also choose from many non-profit homeowner counseling services in your area. Please check with your States regulatory agency for Mortgages or Real Estate and with your local Better Business Bureau before you sign a contract or pay a fee to any Loan Modification Consultant or Company!

To find out more about how Loan Modification Programs work you can go to:

Making Home Affordable: Set up specifically for educating consumers about the HAMP program enacted by the Obama Administration: Making Home Affordable

Check to see if your loan is owned by Fannie Mae: Fannie Mae Loan Look Up

Check to see if your loan is owned by Freddie Mac: Freddie Mac Loan Look Up

The Federal government also provides free resources: Call the Homeowner's "HOPE™ Hotline at 1-888-995-HOPE (4673) for information about the Making Home Affordable Program and to speak with a HUD approved housing counselor. Assistance is available in English and Spanish, and other languages by appointment.

HUD.gov is a free website: To find a local counselor in your region: HUD.gov

Lastly, if you are in the State of Nevada, here is a link to check the license status of Mortgage Brokers, Lenders, Modification Companies and Individuals: Nevada Mortgage Lending Division Licensee Data . Most States are now required to have all of their licensed Mortgage Professionals registered through a recently created National Database called the "National Mortgage Licensing System" or NMLS for short.

While the State of Nevada will be one of the last States to join the NMLS System in October of 2010, your State probably already has. Here is a link to the NMLS Consumer Search for Licensees . In their search box, you can enter a Company name or an Individual (first then last name) and any location information. Once the result is displayed, you will be able to filter the results if you got too many John Smiths for example. Then check on the status of the Professional that you are thinking of working with once you are looking at the correct record.

Military Benefit: Tax Credit Extended!

Service members who were deployed overseas between Dec. 31, 2008 and May 1, 2009 and for a minimum of 90 days; can still get the $8,000 tax credit on a First Time Homebuyer Purchase! Or you could qualify for the $6,500 tax credit for current homeowners buying a new home! All you have to do to take advantage of this tax credit is sign a purchase contract before April 30, 2011 and close by June 30, 2011! Remember, you must live in the home for at least 3 years to keep the tax credit or you will have to repay the credit to the IRS. Even that has an exception for military families if they must relocate on orders!

A First Time Homebuyer is defined as anyone who has not owned a home in the past 3 years so, even if you have owned a home before, you could qualify under this guideline if it was sold more than 3 years ago!

For current homeowners, there are also special benefits to allow you to sell your current home. The first $250,000 ($500,000 if married filing jointly) of profits on the sale of your current home can be tax free if you have lived in that home for at least two of the preceeding ten years, as long as you were on qualified extended duty and living at least 50 miles from your home or in Government Quarters.

To find out more, contact Valley West Mortgage at (888) 931-0007. We can help you get started on your VA or Active Duty Mortgage Application right now! Detailed information on Military Tax Benefits are also available at the IRS website, www.irs.gov . Just search "Armed Forces Tax Guide".

Prequalify for a Mortgage

Want to prequalify for a mortgage?

Sometimes applying for a mortgage loan can be the most practical way when deciding to purchase a home. However, this experience can soon become a problem when trying to get your application approved. For better chances of getting your mortgage loan approval, we have provided these simple guidelines.

If you have a low credit score, fix it.
The very first thing that a lender will do is review your FICO Score. So if you don’t have a good credit score, you will have less options or a low chance of getting an approval. Make sure, before calling your lender that you have your most recent credit score, from each of the 3 major reporting agencies. If you see any erroneous information, dispute it.

Pay down your credit card balance
It’s always good to start with a clean slate. If you are a First Time Home-Buyer one very important thing to know is how to budget your cards. Keep a very low balance on your cards. This can greatly improve your chances of approval when applying for a home loan.

Prepare your money for the 20% down payment.
The hardest part is the most valuable part, right? And that’s getting the money you need for your down payment. But when you actually start paying on your mortgage, a great chunk of your monthly payments are towards your (PMI) Private Mortgage Insurance if you have less than a 20% down payment. So save until you are ready!

These steps relieve the most important and daunting experiences when attempting to purchase a home. Now when approaching a lender it’s going to feel a bit better.

Here are some documents that will come into play during the pre-qualification process:

The pre qualification letter is an indication that you are serious in purchasing a home or property. The seller will also pay more attention to your application if you have a pre qualification letter.

Once you prequalify and your loan is approved you should make sure that you don’t change anything important in that profile, don’t buy a new car, try not to lose your job, etc. Reportedly, there are many instances where people change things. Work with your loan officer; tell them everything about your financial situation that can impact your credit score.

Now, all your documents are in place, you have a beautiful set of FICO Scores and soon you’ll have your new home!

Mortgage Rates Falling

Now is the time to purchase your new home while mortgage rates stay low.

According to Freddie Mac in an article released by MSN:
Mortgage rates fall to lowest level of the year! In April, mortgage rates were dropping and a month later they're still dropping. So, If you are ready to buy a home, don't wait too long. Rates may be dropping but, realistically that may not last too much longer.

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Real estate downturn forces industry cooperation

Las Vegas Business Press :: News : Real estate downturn forces industry cooperation.