The Clock is Ticking...

For prospective homebuyers who are on the fence about making a home purchase, the next few months represent a countdown of sorts as
huge tax credits are about to expire. Here are important details for you to know:
Tax Credit for First-Time Homebuyers (FTHBs)
FTHBs (that is, people who have not owned a home within the last three years) may be eligible for the tax credit. The credit for FTHBs is 10%
of the purchase price of the home, with a maximum available credit of $8,000. Single taxpayers and married couples filing a joint return may
qualify for the full tax credit amount.
Tax Credit for Current Homeowners
The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes
in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five
consecutive years during the last eight years. Single taxpayers and married couples filing a joint return may qualify for the full tax credit
amount.
What Are the New Deadlines?
In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010. Those in
the military do have some special extensions on the timelines available.
What's So Great About a "Tax Credit"?
The benefit of a tax credit is that it's a dollar-for-dollar benefit, rather than a "tax deduction", or reduction in a tax liability that would only save
you $1,000 to $1,500 when all was said and done. So, if a first-time homebuyer who qualified for the entire benefit were to owe $8,000 in
income taxes and would qualify for a tax credit of $8,000, she would owe nothing.
Better still, the tax credit is refundable, which means the homebuyer can receive a check for the credit if he or she has little or no income tax
liability. For example, if a first-time homebuyer is eligible for a tax credit of $8,000 but is liable for $4,000 in income tax, she can still receive a
check for the remaining $4,000!
Higher Income Caps
The amount of income someone can earn and qualify for the full amount of the credit has been increased. Single tax filers who earn up to
$125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who
earn $145,000 and above are ineligible. Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more
than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.
Maximum Purchase Price
Qualifying buyers may purchase a property with a maximum sales price of $800,000.
It's also important to note another upcoming deadline as the Federal Reserve winds down a program that has been keeping home loan rates
artificially low. The fact is that the lowest rates of 2009 were driven down to their attractive levels because of the Fed's Mortgage Backed
Securities (MBS) purchase program, which the Fed once again emphasized in its January 27, 2010 Rate and Policy Statement will end on
March 31, 2010. As the Fed's program winds down and ends, rates could rise over time since MBS will have less support from the Fed.
If you have any questions regarding the tax credit, pick up the phone and call me. I'm here to help you take advantage of one of the greatest
opportunities homebuyers may ever have.

Rate and Term Refinances are up

Freddie Mac said Thursday that record low numbers of homeowners Cash Out the equity for their home. Most homeowners who are refinancing now are taking advantage of the record low rates and are using Rate and Term refinances. A Rate and Term refinance allows homeowners to lower their interest rate and or terms on their mortgage without taking out any cash. A Cash Out refinance is one where the homeowner uses the equity in their home to pay off debt and or take the cash out for other uses. There are several reasons for the record low numbers including lower home values, tighter lending guidelines, and homeowners who are trying to make more financially sound decisions. Reuters reported on Jan 28, 2010, Freddie Mac Chief Economist Frank Nothaft said that "in aggregate, the lower interest rates translates into about $2 billion in payment savings for these homeowners over the first 12 months of the new loan". They did not report, however, how long the average homeowner extended out the term of their loan by doing this rate and term refinance. Most homeowners believe that the they have to save 1% in interest rate to make a rate and terms refinance worth doing. This is really not true since the rate is only one part of the puzzle.

The best way to look at what you need to save is to first determine how long you plan to be in the home. Then, determine the costs of the refinance. You need to only look at the lender, title/escrow and appraisal/inspections costs. Prepaid taxes and insurances are not a costs, these are your funds. Then figure out what is the monthly savings you are receiving from the refinance. Next figure the number of payments you have left on your current mortgage payments and multiply that by your principle and interest payments. Then figure the total of payments on the new loan. If you are planning to be in your home for long term, then do not close on the new loan if its total payments are greater than your current loans total of payments. If you're not sure how long you are going to be in the home, the best way to find out if the new loan is going to help you is to take the monthly saving on the principal and interest for the old and new loan. Divide that into the costs of the refinance. This number will represent the number of months you will need to be in the home before you start seeing actual savings. Please see the examples below.


Example 1. Current loan balance $150,000. Current rate 6.5% 29 years left. Payments $960.74
Proposed New loan 5.% interest rate 30 year mortgage $2354 in cost for home loan. New Payment $817.87
Savings $142.87 monthly / costs of $2354 = 16.48 months to start having true savings.
Using the total of payments method the new loan with the lower interest and including the costs of the loan the savings in payments would be $49,079.
Since this home owners is planning to be in the home for more that 17 months this would be a smart refinance to do.

Example 2. Current loan balance $398,000, current rate is 6.00% with 28.5 years left, and payments of $2356.23.
Proposed new loan 5.125% interest, 30 year mortgage and $5232 in closing costs. New payment is $2195.55 monthly.
This saves the borrower $160.68 monthly / costs of $5232 = 32.56 months to start having true savings.
If this home owner plans to be in the home for more than 33 months then this loan would a smart refinance to do.
The total of payments savings are $52,612.80

Example 3. Current loan was a 30 year fixed with 20 years left to pay. Current balance is $160,981 rate is 6.25% and payments of $1176.67. Total of payments are $432,601. Borrowers has paid $141,200.40 in payments so far.
Proposed new loan is $164,081 at a 30 year rate of 5.125%. New Payments are $893.40 saving the customer $283.27 monthly. Closing costs were $3100.00
If this home owner just pays the minimum payment on the new loan the total of payments will be $321,623 but the customer has already paid $141,200 in payments. The total cost of this home would be $462,823 adding $30,000 to the total. The customer should not do this refinance unless they have to save the $283. monthly but fully understand the total of cost of this savings.
If the customer was to put the $283.27 in savings back into the new mortgage just pay the old payment amount of $1176.76 the new loan would be paid off in 17.7 years saving the clients 28 months in payments from their current loan or $31,770 in total of payments. It would make sense for the borrower to refinance in this scenario.

It is important to talk to a mortgage professional about all of your options. I recommend talking to your lender on the phone once a year. There are so many different loan programs available that you should explore all of your options. You might be surprised to find you could save money with a better loan.

Fed said the rate will stay low!!

Today the Fed Policy Statement said rates will stay low "for an extended period" and the Feds MBS purchase program will end on March 31st. Bad news for MBS because this gives the green light to stock traders, thus there will be money leaving the bonds moving into stocks. This will help the Carry Trade for a while. MBS are currently trading down over 12 bps. across the board.

The end of the Fed's MBS programs means there in no more government influence in the pricing of mortgage loans. Before the Fed decided the purchase MBS rates were in the low to mid 6's. Expect them to be there shortly. Could be the end of a great ride for super low rates. Lock in your rate as soon as you can. Rate are going up.

No more 90 Day seasoning rule for FHA loans

On January 15th 2010, the Federal Housing Administration (FHA) temporally waived their rule of a 90 day seasoning rule for sellers. Starting February 1st 2010, FHA will allow sellers who have owned properties for less than 90 days to sell these properties to buyers who are using FHA for their financing. Prior to this waiver, FHA required the sellers to own the property 90 days before a buyer could enter into a contract to purchase using FHA financing. In 2009, FHA changed the 90 day policy to allow banked-owned properties to be exempt from the 90 day rule. FHA now feels they can help the future housing market by allowing investors to sell properties before they have owned them 90 days, thus speeding up the time properties are on the market. Here are some of the FHA requirements that we know about currently:



· This waiver is available for one year, from February 1st, 2010, unless extended.

· All transactions must be at arm-length - meaning no identity of interest can exist between buyer and sellers.

· If sales price is 20% or more of the seller's acquisition cost, the lender must provide supporting documentation and/or a 2nd appraisal and order a inspection of the property and provide it to the buyer.

· Waiver is only for forward mortgages, not reverse mortgages.



Stay tuned for actual investors guidelines for this. As with any change to FHA guidelines, individual investors will have their own over lays (rules).

Changes comming for FHA

FHA has always had some of the lowest credit score requirements for mortgage loans. FHA was designed to promote homeownership for Americans who might not have been able to obtain traditional bank financing. Lately, FHA lenders have been increasing the minimum credit scores from no score to 620 for most lenders. There is talk now that FHA is going to start requiring higher credit scores maybe up to 640. FHA will do this because there are higher losses for credit score under 640 and they are being adversely selected for loans with lower credit score. Fannie Mae and Freddie Mac had loans similar to FHA but required higher scores. Over the last few years, Fannie and Freddie have stopped doing similer loans to FHA and have completely stopped doing any cash out loan above 80% loan to value. Until last year, FHA still allowed 95% cash out loans. Now FHA will limit borrowers from taking more than 85% of their property value out as a cash out mortgage. Since FHA was the only source for these types of loans, they were given all these loans and all the losses that came with them. Now FHA is getting in line with Freddie and Fannie and will be requiring higher scores and lower loan to value requirements for cash out loans.

Is this good? I think it is. What this will do is force borrowers to have better credit to have a home loan and also not tap into all of their home equity. Here at NOVA Home Loans we have a staff of credit analysts that will work with our applicants to educated them on how to increase their credit scores so they can be approved for home loans and to understand how to keep good credit scores. This is a free service that NOVA Home Loans provides. Contact me or your NOVA Loan Officer for more information.

Most lenders make their lending decisions on how well the loan will perform in the 1st 12-24 months. If a home loan performs well for the first 24 months, then the likelihood of the loan going bad is very little. Lenders know the biggest reason for home loans not performing is due to loss of employment. NOVA recognizes this and is the only lender that offers the SafeHouse Mortgage Protection Plan to our homeowners. SafeHouse is a program that assists homeowners in making their mortgage payments if they lose their employment. The program will also provide monetary assistance to members who experience a negative event that impacts their ability to pay their mortgage. Please contact me for more details.

These changes will not prevent people from being approved for a home loan. It will force buyers and homeowners to ensure that they are in a stable financial situation before they are provided mortgage financing.

Mortgage rates have come down a little today!

Mortgage rates have come down slightly today from their levels last week. The MBS are trading better today which in return have given us better rates today. Check back tomorrow to see what MBS are duing.

4.55% Pima County Bond Mortgage is Here!!

We are now offering a 4.55% 30 year fixed mortgage for First Time Home Buyers to purchase homes in Pima County. There are no zip code restrictions on where these homes can be purchased. These rates are for FHA and VA loans only. This is a great opportunity for first time home buyers to take advantage of these great low 4.55% fixed rates.

We also offer Down Payment Assistance programs to assist qualified home buyers in taking advantage of up to 4.5% of the Sales Price. The Sales Price Limits for existing homes are $276,334 for a 1 unit homes and $353,752 for a 2 unit homes. For new homes $337,741 for 1 units and $432,363 for 2 units. There are income limits to qualify for these loans. For non-targeted areas in Pima County for a family of 1-2 adults, the income liimits are $69,000 and for 3+ the income limit is $79,675. Targeted areas are parts of Pima County that HUD is trying to increase home ownership in. These income limits are higher to promote home ownership and these income limits are $72,480 and $79,675 for 3+ members.

These loans are underwritten to normal FHA and VA guidelines and the current allotment for these loans is currently $25,000,000 for Pima County. These loans will go fast!!! Contact me or your Loan Officer for more details for this loan program today.

The New Good Faith Estimate is here.

Starting January 1st 2010, lenders will start using a new Good Faith Estimate(GFE). The 2010 GFE is HUD's attempt to make it easier for borrowers to understand the fees and terms of their home loan. There is only one thing it has really done, made it more confusing for borrowers.

First, the old GFE was one page, 2010 GFE is now 3 pages long.
Second, the old GFE gave the borrower all the information needed to see how much the closing costs are, the rate, the amount needed for closing and the total of payments on the new loan. 2010 GFE requires additional disclosures to tell the borrower how much the down payments are, how much the total payments are, a signature disclosure for the borrower to accept the terms of the 2010 GFE, but (if you can believe it) the 2010 GFE does not have a signature line.

There are some good changes that the 2010 GFE offers.
First, the fees cannot change more than 10% (zero change on some fees) from the first time the 2010 GFE is given to the borrower. The GFE will only be issued once a property address is established. For purchases NOVA Home Loans will issue a disclosure that is very similar to the old GFE so borrowers have all the details of the transactions. Once a property is established, the 2010 GFE will be issued within 3 days. For refinances the new GFE will be issued within 3 days of the application date.

Second, any changes to the loan must be requested by the borrower in writing. If the lender needs to change the loan terms, it must be because of a change in legitimate circumstance. Lenders and Loan Officer cannot just make changes in order to charge more fees closer to closing.

Third, the 2010 GFE has a section that allows the lender to show 3 different pricing options for the borrower to choose from. The first option will be a proposed loan, the second will be a option for lower settlement cost/a slightly higher rate and the third will be for a lower interest rate/slightly higher closing costs. These options will show the borrower the difference in the payments for paying a discount or premium for their loan. This will be very help full for the borrowers in choosing the right loan for them.

Economic Stimulus Plan for Housing and Mortgage Industry

Economic Stimulus Plan Benefits the Housing and Mortgage Industries
Revised February 17, 2009

Just signed and sealed…a $787 Billion Stimulus Plan made up of tax cuts and spending programs aims at reviving the US economy. Although the package was scaled down from nearly $1 Trillion, it still stands as the largest anti-recession effort since World War II.

Home owners and potential homebuyers stand to gain from key provisions in this stimulus plan. Here is what we know as of today...


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Tax Credit for Homebuyers
First-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit. Remember a tax credit is very different than a tax deduction – a tax credit is equivalent to money in your hand, as opposed to a tax deduction which only reduces your taxable income.

The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000. Buyers will have to repay the credit if they sell their homes within three years.


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Additional Housing-Related Provisions
Tax Incentives to Spur Energy Savings and Green Jobs — This provision is designed to help promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.

Landmark Energy Savings — This provision provides $5 Billion for energy efficient improvements for more than one million modest-income homes through weatherization. According to some estimates, this can help modest-income families save an average of $350 a year on heating and air conditioning bills.

Repairing Public Housing and Making Key Energy Efficiency Retrofits To HUD-Assisted Housing—This provision provides a total of $6.3 Billion for increasing energy efficiency in federally supported housing programs. Specifically, it establishes a new program to upgrade HUD-sponsored low-income housing (for elderly, disabled, and Section 8) to increase energy efficiency, including new insulation, windows, and frames.

Expanding Housing Assistance—This provision increases support for several critical housing programs. It includes $2 Billion for the Neighborhood Stabilization Program to help communities purchase and rehabilitate foreclosed, vacant properties.


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More Help for Homeowners in the Future
Another thing to keep an eye on in the coming weeks is President Obama’s plan to help struggling borrowers before they are faced with a default on their mortgage.

According to reports, the Obama administration is discussing plans to help borrowers who are struggling to stay afloat, but who have not yet fallen behind on their payments. At this point, details are scarce; however, reports indicate that President Obama is looking to spend approximately $50 Billion to directly help homeowners before they face foreclosure and financial disaster.

While this is good news for individual homeowners, it will likely be good for the housing industry as a whole. That’s because, assisting struggling borrowers before they default should help stop the wave of foreclosures, which are estimated to top two million this year. That, in turn, will help stabilize home prices.

The Economic Stimulus Plan is huge, and impacts a number of industries. I’ve highlighted some of the major provisions that may impact you now and in the future.

As always, if you have any questions or would like to discuss how this may specifically impact you, I’d be happy to sit down with you. Just call or email me to set up an appointment.

New Tax Credit for Buyers

TAX CREDIT OVERVIEW

Who Gets What?

First-Time Homebuyers (FTHBs): First-time homebuyers (that is, people who have not owned a home within the last three years) may be eligible for the tax credit. The credit for FTHBs is 10% of the purchase price of the home, with a maximum available credit of $8,000

Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

Current Owners: The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.

Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.


What are the New Deadlines?

In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.

What are the Income Caps?

The amount of income someone can earn and qualify for the full amount of the credit has been increased.

Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible

Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.

What is the Maximum Purchase Price?

Qualifying buyers may purchase a property with a maximum sale price of $800,000.

What is a Tax Credit?

A tax credit is a direct reduction in tax liability owed by an individual to the Internal Revenue Service (IRS). In the event no taxes are owed, the IRS will issue a check for the amount of the tax credit an individual is owed. Unlike the tax credit that existed in 2008, this credit does not require repayment unless the home, at any time in the first 36 months of ownership, is no longer an individual’s primary residence.

How Much are First-Time Homebuyers (FTHB) Eligible to Receive?

An eligible homebuyer may request from the IRS a tax credit of up to $8,000 or 10% of the purchase price for a home. If the amount of the home purchased is $75,000, the maximum amount the credit can be is $7,500. If the amount of the home purchased is $100,000, the amount of the credit may not exceed $8,000.

Who is Eligible fort FTHB Tax Credit?

Anyone who has not owned a primary residence in the previous 36 months, prior to closing and the transfer of title, is eligible.

This applies both to single taxpayers and married couples. In the case where there is a married couple, if either spouse has owned a primary residence in the last 36 months, neither would qualify. In the case where an individual has owned property that has not been a primary residence, such as a second home or investment property, that individual would be eligible.

As mentioned above, the tax credit has been expanded so that existing homeowners who have owned and occupied a primary residence for a period of five consecutive years during the last eight years are now eligible for a tax credit of up to $6,500.

How Much are Current Home Owners Eligible to Receive?

The tax credit program includes a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.

Can Homebuyers Claim the Tax Credit in Advance of Purchasing a Property?

No. The IRS has recently begun prosecuting people who have claimed credits where a purchase had not taken place.

Can a Taxpayer Claim a Credit if the Property is Purchased from a Seller with Seller Financing and the Seller Retains Title to the Property?

Yes. In situations where the buyer purchases the property, even though the seller retains legal title, the taxpayer may file for the credit. Some examples of this would include a land contract or a contract for deed.

According to the IRS, factors that would demonstrate the ownership of the property would include:

1. Right of possession,
2. Right to obtain legal title upon full payment of the purchase price,
3. Right to construct improvements,
4. Obligation to pay property taxes,
5. Risk of loss,
6. Responsibility to insure the property, and
7. Duty to maintain the property.

Are There Other Restrictions to Taking the FTHB Credit?

Yes. According to the IRS, if any of the following describe a homebuyer’s situation, a credit would not be due:

They buy the home from a close relative. This includes a spouse, parent, grandparent, child or grandchild. (Please see the question below for details regarding purchases from “step-relatives.”)
They do not use the home as your principal residence.
They sell their home before the end of the year.
They are a nonresident alien.
They are, or were, eligible to claim the District of Columbia first-time homebuyer credit for any taxable year. (This does not apply for a home purchased in 2009.)
Their home financing comes from tax-exempt mortgage revenue bonds. (This does not apply for a home purchased in 2009.)
They owned a principal residence at any time during the three years prior to the date of purchase of your new home. For example, if you bought a home on July 1, 2008, you cannot take the credit for that home if you owned, or had an ownership interest in, another principal residence at any time from July 2, 2005, through July 1, 2008.


Can Homebuyers Purchase a Home from a Step-Relative and Still be Eligible for the Credit?

Yes. As long as the person they buy the home from is not a direct blood relative, the purchase would be allowed.

If a Parent (Who Will Not Live In The Property) Cosigns for a Mortgage, Will Their Child Still be Eligible for the Credit?

Yes, provided that the child meets the other requirements for the tax credit.

Your Way Home Arizona is running low on Money!

In 2009, Arizona Department of Housing started Your Way Home Arizon to help homeowners purchase forclosed homes. Over the last month Your Way Home Arizona has cut off several Arizona Counties form the progam and last week started limiting zip codes in the remaining counties. Your Way Home Arizona started out with $22 million for 2nd mortgages for buyers of forclosed propertes in Arizona. Hundreds of Arizona homeowners took advantage of this program to purchase these home but now this program is running out of money. Check with your loan officer for up to date details for Your Way Home Arizona.

How Credit Scores are being lowered by your Credit Limits. Rescoring to the Rescue!!

Over the last 6 month, I have seen an alarming problem for borrower’s credit scores in which they have no control over. Many credit card companies are lowering the credit limit for card holders as the balances are being paid down. I have written several times about how the ratio of a credit card balance to the credit limit can affect your credit score negatively. One way to increase your credit scores is to have less than 30% usage of your credit limit. For example if you have a credit card that has a balance of $300 and your limit is $1000 your credit scores are not going to be affected. If your balance is $900 and your limit is $1000 then your scores are going to be lowered because you are “close to being Maxed” Credit Scores don’t like you being “Maxed Out”


With the “credit crunch” we are currently in many banks are lowering the credit limits on some of their card holders as the balances are being paid down. Banks are doing this to limit their credit exposure, reduce their risk. In doing this, it is directly having a negative effect on the card holder’s credit score because it looks as if they are maxed out even when they are paying down their balances. I am not sure how credit card companies decide on how to reduce theses card holder’s limits but if it is based on credit scores they are adding to the problem.


For several of my clients who are trying to increase their credit scores by paying down their credit usage to under 30%, I have figured out a solution that is not effected by the credit card companies attempts to lower balances.


Rescoring is a process that updates information on credit reports with current information. I pull a credit report on a client who has a credit card (more than one) with a balance that is above 30% usage of credit limit. We then ask the customer to pay down the balance to less than 30%. The customer provides us a statement (usually an on line statement) that show the new balance less than 30%. We take that statement and provide it to our credit reporting company and they forward it to the Credit Bureaus. They Credit Bureaus verify the balance and adds the new balance to the credit report. Then a new credit report is pulled with the new, higher scores. We do not update the credit card limit, so it is not reduced, only the balance is.


This process takes less than a week and can make the difference in receiving an approval or getting a lower rate on your home loan. I have had great success with this process, just yesterday I was able to issue a First Time Home Buyer an Approval after months of trying to pay down balances only to have the banks lower his credit limits. It is very important to work with a loan officer who is experience in this process. There are very specific steps that have to be followed and if they are not your scores will not increase.

Two Very Important Updates

I have two important announcements for you!

First, I am thrilled to announce that I can offer your qualified clients a 95% LTV on conventional primary residence financing and 90% LTV on conventional second home financing. Clients must meet certain requirements but this is an option that they will not be able to find anywhere else! Call me for more details.

Also, as you know, I am committed to keeping you up-to-date with all of the changes in the mortgage industry. Recently, Fannie Mae released an announcement that may affect your clients. The following changes will be implemented on new loan files submitted on December 12th.

• The minimum credit score required for loans underwritten using DU has increased from 580 to 620.
• The maximum debt to income ratio allowed for loans underwritten using DU is lowered to 45%, with flexibilities offered up to 50% for certain loan casefiles with strong compensating factors.
• Borrowers with foreclosure completion dates of more than 5 years, but less than 7 years from the credit report date will need 10% down and a minimum credit score of 680 to purchase a principal residence; the purchase of a second home or investment property will not be permitted; and cash-out refinances will not be permitted for any occupancy types.
• If a deed-in-lieu of foreclosure is reported within 4 years of the credit report date, the loan will receive a Refer with Caution recommendation; additionally, a principal residence, purchase transaction submitted to DU with an LTV or CTLV greater than 90% on a loan that has a deed-in-foreclosure action that was completed more than 4 years, but less than 7 years from the credit report date will receive an Ineligible recommendation.
• Loan files where DU identifies a Chapter 13 bankruptcy discharged within the last 24 months, dismissed within the last 48 months or filed within the last 48 months will receive a Refer with Caution recommendation. Loan files where DU identifies a non-Chapter 13 bankruptcy that was filed, discharged or dismissed within the last 48 months will receive a Refer with Caution Recommendation.
• Two-unit owner occupied property purchases or limited cash-out refinances must have an LTV less than or equal to 80%.
• Two Unit non-owner occupied property purchases and limited cash-out refinances must have an LTV less than or equal to 75%. Two Unit non-owner occupied property cash-out refinances must have an LTV less than or equal to 70%.

If you have any clients that have not yet been pre-approved and may be challenged by any of the issues above or if you have any clients that have been approved and an LSR has been issued, but they are still looking for a home, they may be affected by these new guidelines. Please have them call me immediately. If we open a loan file for them before December 12th, we may be able to avoid these new changes. Should you have any questions, please don't hesitate to contact me.

USDA loans finance 100% of the purchase price or appraised value, which ever is more. Yes which ever is more. Current rates are in the low 5's for 30 year!

Mortgage rates are still low and it's a great time to refinance or buy a new home!!

Nova Home Loans now offers Escrow Holdbacks

NOVA Home Loans is offering escrow holdbacks for purchases that require repairs and is the only mortgage company offering this. These escrow hold backs are for repairs that the appraiser requires and are not financed as they are on HUD $100 down FHA loans. Examples of escrow hold backs NOVA Home Loans are approving are for missing Heating and AC issues, Pool and other repair. These are great for homes that need a little “love” but the seller cannot do the repairs prior to closing. Buyers or Sellers can pay for the escrow holdback. This is a great opportunity for a seller to make their home more attractive and for buyers to purchase a home that might have otherwise had to be financed with a renovation loan. The repairs that are required will have to be completed within 7 days from closing. NOVA will have to approve the escrow hold back for repairs on a case by case basis.

Important Changes to new Fannie Mae Loans

On December 12th 2009 Fannie Mae will make some changes to the underwriting of many loans. Fannie Mae will now require a minimum of 620 FICO score for all borrowers. This will have a little impact on business since we have been helping our borrowers increase their credit score to 640 and above in order to receive better pricing. The major change will affect the maximum debt to income ration. The debt ratio will now be limited to 45% for the borrower’s gross income and for strong borrowers this will be expanded to 50%. Before, Fannie Mae has allowed ratios that were much higher. These changes go into effect for all new loans that are approved through using DU/DO automated findings. It is very important that all borrowers who are looking at buying or refinancing and have high debt to income rations contact their loan officer and get pre- approved before the 12th to insure they receive the finding before December 12th.
Realtors, this is a perfect time to remind your buyers who are on the “fence” that these changes could affect their buying ability. Loans under the old findings will need to be closed before January 30, 2010. Please contact your loan officer to learn about the other changes that go into effect on the 12th.

Please Join me for the SAMLA (Southern Arizona Mortgage Lenders Associations) 2010 Installation Lunch

I will on the Board of Directors for SAMLA in 2010. Please join me for this luncheon to see what SAMLA is doing in 2010. We will also have Barry Habib speaking at this event. Barry is one of Americas top Loan Officer. Please see the flyer below for more details.
SAMLA January Lunch Flyer

Looks like the $8,000 first time home buyers tax credit will be extended to April 30, 2010!!!

http://www.bloomberg.com/apps/news?pid=20601087&sid=aoI9KTlHpwzI

Come see me this weekend at the SAHBA Home and Garden Show!!!

Come see me at the Nova Home Loans booth this weekend at the SAHBA Home and Garden Show. I will be there Friday Oct. 9th between 4pm and 8pm, Saturday Oct. 10th 4pm to 8pm and Sunday Oct. 11th 12pm and 6pm.

I look forward to see you there!!