Mortgage Blog

As part of our ongoing effort to expand the services we offer to our clients; we have now added foreclosure listings to this website.

By visiting our Foreclosure Listings  you can search for forclosed properties in Florida and throughout the United States.

There is a membership fee for this service but we have negotiated a free 7 day trial offer for our clients. Start today and save thousands on your new home.

According to figures released by the census bureau, most Americans who move don't go very far.

Between the years 2006 and 2007, 38.7 million people in the United States. A surprisingly high 65% stayed in the same county they had previously resided in. Another 19% of movers remained in the same State, 13% moved to another State and approximately 3% moved out of the country.

The main reasons giving for moving were

1. Housing Related Issues 42%– such as desire to own a better home or live in a better neighborhood
2. Family related Issues 30% – such as the desire to live closer to other family members
3. Employment Issues 21% - change of job or relocation

30% of renters moved between 2007 and 2008 compared to only around 7% of Home Owners.

The largest group of movers by age were those between 20 and 24 (27%) and those between 25 and 29 (26%).

Movement from the urban core to the suburbs continued with major cities losing just under 2 million people and the suburbs growing by a similar amount.

1. Not shopping enough. Hard as it is to believe many people only obtain one quote when looking for a mortgage. Sometimes they go to their Bank or Credit Union and sometimes they use the lender recommended by the realtor or builder. This is a big mistake. I recommend you look for 3-4 quotes. Be fair and let everyone know you are shopping. Don’t necessarily go for the lowest bid. Be sure to take reputation into account. Otherwise it could come back to bite you later.
2. Shopping too much. If you shop around too much you greatly increase your likelihood of coming across the bad actors in our industry. Look too hard for the “lowest” rate and you are sure to find someone willing to say anything to get your business. They know you are unlikely to walk away at closing – so it works for them – at least in the short run.
3. Choosing the wrong loan. If you are on a fixed income don’t pick a high risk loan such as the “Option ARM”. This type loan gives you a low teaser rate – often around 1% - but can pile “negative equity” on your mortgage balance. Know your risk level and stick with it. A reputable mortgage professional won’t steer you in the wrong direction - which brings up number four.
4. Not doing your homework. This goes hand in hand with the first two. Research the companies you are considering doing business with. The Better Business Bureau and your States financial regulatory body are good places to start. If you are dealing with a Mortgage Broker – make sure they are a member of the NAMB (National Association of Mortgage Brokers). Ask for references. Look for someone who returns your calls, is pleasant, informative and knowledgeable.
5. Not telling the whole story. Don’t hold relevant information back from your loan officer. For example, if you are self-employed and have difficulty proving your income – tell him/her in advance. It will ensure you get an accurate quote and make the loan process run smoothly.
6. You like to look them in the eye! Don’t select a Lender just because they have an office near you or because you have your checking account there. That local office may add to overhead and mean a higher rate. Once again get 3-4 quotes and check reputations.
7. Not Reading the paperwork. Read the paperwork! Your Lender will send you loan disclosures within 3 days of your application. Pay special attention to the “Good Faith Estimate” (GFE) which will show your closing costs and the “Truth in Lending” (TIL) Form which shows your APR. At closing pay attention to the “HUD1” form which will show your final closing costs. Also important the “Note” (which shows your interest rate) and look for any mention of a “prepayment penalty”. This could cost you thousands if you plan on moving or refinancing in the near future. If you have any questions ask your loan officer right away.

One final note: I have been in the mortgage industry for 8 years. I have a financial industry background going back over 20 years. In my experience most mortgage people are honest and want to help you. Avoiding these seven mistakes should make your next mortgage experience an enjoyable one.

All homeowners who do not itemize their income taxes can deduct between $500 and $1,000 from their 2008 federal taxes. Anyone buying a first home between April 9, 2008, and July 1, 2009, will receive up to $7,500 in federal income tax credits. The bill includes an estimated $15 billion in housing tax breaks. 

Homeowners struggling to make payments on high-interest mortgages can contact their banks and transform their loans into government-backed, 30-year fixed-rate mortgages.
To qualify, homeowners must have a mortgage debt-to-income ratio greater than 31 percent. To see if you qualify: Multiply your gross monthly salary by 31 percent. A homeowner earning $75,000 a year, for example, must owe a monthly mortgage payments of at least $1,938.The new loan cannot exceed 90 percent of the home's value and borrowers must prove they can repay the loan.

Congressional budget analysts project that this $300 billion program would help 400,000 homeowners facing possible foreclosure. The program begins in October but officials recommend homeowners begin the process now.

Information provided by Franklin Financial Group

After months of negotiations between the House and Senate, as well as an initial veto threat by the White House, the President dropped his opposition and signed H.R. 3221 into law. The new bill is more commonly referred to as the Housing and Economic Recovery Act of 2008.

H.R. 3221 is perhaps the most significant piece of housing-related legislation we have seen in recent years. It implements necessary consumer protections while promoting stabilization of the current market and industry through reforms to the Government Sponsored Enterprises, Fannie Mae and Freddie Mac, (GSEs) and the Federal Housing Administration (FHA) program.

Here are some of the Bills most significant provisions:

• All-Originator Registry: Establishes a nationwide loan originator licensing and registration system that will set minimum standards for loan originator licensing substantially improving the oversight of all originators. In addition, all loan originators - lenders, banks, credit unions and mortgage brokers - must register with the Nationwide Mortgage Licensing System and Registry and go through a criminal background check (except loan originators working for Federally-chartered institutions).
• First Time Homebuyer Credit: Allows first-time homebuyers of a principal residence in the United States to take a tax credit of 10 percent of the purchase price of the residence (not to exceed $7500). The credit will begin to phase out if single taxpayer's income exceeds $75,000 per year or the couple's income exceeds $150,000. The credit will be paid back over 15 years and applies to residences purchased between April 9, 2008 and July 1, 2009.
• FHA Modernization: Effective January 1, 2009 it increases FHA loan limits for single-family residences to the lesser of 115 percent of the local area median home price (but no lower than a floor of 65 percent of $417,000) or 150 percent of the GSE high cost loan limit of $417,000 or $625,500 (similar increases for other 2-4 unit single-family properties); establishes a 12-month stay on FHA's proposal for risk-based premiums; sets the down payment requirement at 3.5 percent; and prohibits seller-funded down payment assistance (both direct or through a third party). Authorizes a $25 million appropriation to improve technology, processes, program performance, eliminate fraud and provide appropriate staffing.
• GSE Loan Limit Increases: The loan limits were set at the greater of 115 percent of the local area median home price or $417,000 for a mortgage secured by a single-family residence, $533,850 for a 2-family residence, $645,300 for a 3-family residence, and $801,950 for a 4-family residence. These limits will take effect January 1, 2009. For high-cost areas, the loan limits are adjusted to a cap of 150 percent of the GSE limit of $417,000 for a one-unit property or $625,500. These limits will take effect January 1, 2009.
• GSE Oversight Reform: Creates a new regulator (five-year term, appointed by the President, confirmed by the Senate) with oversight authority similar bank regulators, establishes a new affordable housing fund and capital magnet fund to be funded by a 4.2 basis point fee on all new loans, significantly changes the affordable housing goals and raises the conforming loan limit to the higher of $417,000 or 115% of the local median home price, not to exceed $625,500 (effective January 1, 2009).
• FHA Rescue: Creates a voluntary program for lenders to write down the loan balance in exchange for an FHA guaranteed loan not to exceed 90 percent of the newly appraised value of the home. The lender would pay a 3 percent FHA loan origination fee. To qualify, the borrower must have a debt-to-income ratio above 31 percent on the original loan. The program is capped at $300 billion.
• GSE Stability: Authorizes the Treasury Secretary to temporarily increase the GSEs' line of credit and to, if necessary, buy equity in the GSEs in order to provide confidence to credit markets. Also provides a role for Treasury and the Federal Reserve in GSE oversight to ensure safety and soundness.
• TILA Reform: Requires Truth in Lending Act disclosures to be delivered seven days prior to loan closing, requires that disclosures include examples of how payments would change based on rate adjustments in addition to disclosing the maximum possible payment under the loan terms and mandates that the consumer receive early disclosures before paying anything more than a nominal fee that covers the cost of a credit report.

We are hopeful that this Bill will benefit the majority of American homeowners and help to stabilize the nation's housing market.

Information provided by National Association of Mortgage Brokers (NAMB)

The HUD-1, also known as the settlement statement, is a prescribed form from the U.S. Department of Housing and Urban Development (HUD). This form itemizes all charges imposed on the borrower and all charges imposed on the seller in connection with the settlement of your real estate transaction. One business day before the settlement, you have the right to inspect your HUD-1 Settlement Statement.

The HUD-1 is filled out by the settlement agent who will conduct the settlement. The fully completed HUD-1 Settlement Statement generally must be delivered or mailed to you at or before the settlement. In cases where there is no settlement meeting, the escrow agent will mail you the HUD-1 after settlement.

Ever since the housing market started to turn sour increasing emphasis has been placed by the authorities on combating the various scams that target consumers. We have set out to list some of the most common types of mortgage fraud below in the hope that we might warn the unsuspecting.

Rescue Scams: This may be the most despicable of all types of mortgage fraud. In this case the scammers contact homeowners in distress promising to assist them. Instead of helping them they have them sign a “quit claim deed”. Then the home is taken from the owners and resold for a profit.

Fraudulent Flipping: This is one of the most common types of fraud; although the downturn in the housing market and greater diligence by Lenders has made it much harder to execute. A property is purchased at a low price and little or no renovation work is done. Next an appraisal is falsified to make it appear that the property value is much higher than the true value. For example a home worth $150K may be “appraised” for $250K. When the home is sold the fraudsters pocket the profit.

Straw Buyers: A “straw buyer” is offered a payment or fee to put their name on a mortgage application. The purpose is to hide the identity of the real buyer and after the loan closes the criminal assumes ownership of the home. In some instances the straw buyer may not be aware that their name is being used on the mortgage application, in which case they are victims of identity theft.

Silent Second: In this scam a Lender is led to believe that the borrower is making a downpayment from their own funds when in fact the money is borrowed from another party. This misleads the Lender as to the true financial risk of the loan.

Double Sales: A swindler can record a deed and arrange a mortgage before those transactions show up on record, file another deed and arrange another loan. Weeks can pass between the filing of a property record and its appearance in computerized registries used by title-search companies.

Air Loans: This is the ultimate con in mortgage fraud. “Air Loans” are mortgages on non-existent properties. Usually everything involved in the transaction is fraudulent. The perpetrator may set up phones and pose as borrower, employer, appraiser and credit agency when the lender calls to verify.

Don’t get caught up in any of these scams. Criminal prosecution will usually follow and jail terms can be lengthy. Never lie on a loan application and don’t sign something you know to be untrue. If you feel you have been scammed or that someone is attempting to scam you, contact a real estate attorney or your State Attorney Generals office. And remember the vast majority of people involved in the real estate industry are honest so just do your homework. The old adage applies; if it sounds too good to be true it probably is.

Deductible Homeowners Expenses

One of the advantages of owning your own home is that the home mortgage interest and real estate taxes paid can be deducted from your federal income tax*. To do so, youll need to comply with current tax laws and complete the appropriate federal tax forms and itemized deduction schedules.

Home Mortgage Interest

For your home mortgage interest to be deductible, it must be for a first or second mortgage, a home improvement loan or a home equity loan. Additionally

• The mortgage loan must be secured by your main home or a second home
• Only interest paid for that tax year can be deducted

The amount you can deduct can be limited if your mortgage balance is more than $1 million ($500,000 if married filing separately) or the mortgage was taken out for reasons other than to buy, build or improve your home.

Points

Points (aka loan origination fees, maximum loan charges, loan discount, or discount points) are generally treated as pre-paid interest and, as such, the full amount cannot be deducted in the year paid. Rather, the deduction must be taken over the term of the loan.

Real Estate Taxes

State or local real estate taxes can be deducted from your income if they are paid in the tax year. To qualify, the tax must be levied on the propertys assessed value, the taxing authority must charge a uniform rate for properties in its jurisdiction, and the tax must not be for your special privilege but for the benefit of the general welfare.

Restrictions on Itemized Deductions

The amount of itemized deductions you can take are restricted by your adjustable gross income. In 2003, the limits were $139,500 for single persons, persons filing as head of household or qualified widow(er), or married persons filing jointly; and $69,750 for married persons filing a separate return.

Non-deductible items

Many of the expenses related to owning your own home cannot be deducted from your income tax. These non-deductible items can include:

• Most settlement costs, including (but not limited to) appraisal fees, notary fees, VA funding fees, and mortgage preparation costs
• Insurance
• Local assessments that generally add value to your home, such as sidewalks, sewers, etc.
• Utilities
• Domestic help
• Depreciation

Check with the IRS

*The information contained in this article is for informational purposes only and may not reflect current tax year rules and regulations. Youll need to consult with your tax attorney, CPA, or the IRS for current tax year rules, restrictions and regulations.

As a result of the distressed real estate market there are many great deals available for those interested in investment property. We recently came upon one buyer who snapped up a desirable home for almost half its appraised value. The challenge up until now has been that financing is difficult to come by. The credit crunch has seen financing for investors dry up especially when a large downpayment is not possible.

However, things have just changed. We are pleased to announce that we can now offer investor financing for the State of Florida up to 95% of the purchase price.

The important detail is that the buyer must be purchasing the property well below market value and that is not so unusual these days. We can also do refinance loans including "cash out" loans on both investment and owner occupied properties

Our Lender has money ready to lend and they are looking for the right borrower today. Don’t miss the bottom of the market! For more information on this program please call 1-800-461-2986. Inquiries from Real Estate Professionals are welcome.