Platinum Realty Group

What Type Of Mortgages Are Still Available?

2007-09-01T13:56:00.000-05:00

Well….August 2007 is over.... let us all give a big sigh of relief. Do you realize that you have sat on the “front row” of history this month (whether we wanted to be there or not!)? The lending industry as we knew it 30 days has changed forever (or as long as memory will serve as a boundary). Per www.ml-implode.com, we have lost 144 medium/large retail or wholesale lenders as of today. So what type of mortgages are still available? As of today (and subject to change), read below…..

FHA- Still an awesome loan!

No minimum FICO score- FHA allows “common-sense” decisions.

Maximum loan amount for Dallas, Kaufman, Collin, Denton, Rockwall and Hunt Counties is $200,160 (Sales price of 204,760 with the 2.25 downpayment)

Minimum Down Payment is 2.250%, but can roll in all cost with $0 out of pocket.

Buyer must make a 3% investment unless down payment is paid as a Grant/Charity (DAP) contribution.

Seller can contribute up to 6% of the Sales Price without using a Charity (DAP) contribution.

No Termite Inspection Required.

No Non-Allowables required for the seller.

Buyer can currently be in a Chapter 13 Bankruptcy.

It is an assumable loan (important when rates go to 8% and they are at 6%).

Buyer can have Federal Tax Liens and not have to pay them off!

FHA is now using the standard Fannie Mae appraisal form- No more VC sheets!

(Did you know that we are #4^th Team in the industry for FHA purchase closings last year? Don’t let inexperienced loan officers “practice” on your clients- let us help!)

Freddie/Fannie-

Conforming up to $417,000.

AU (Automatic Underwriting) has tightened significantly.

Lender paid mortgage insurance and/or Buyer/Seller paid mortgage insurance becoming a popular option for borrowers.

Investment Properties up to 90% LTV (10 % down)

$0 Down Mortgage Programs Still Available:

Fannie Mae My Community Mortgage

House America Mortgage

Flex 100

Freddie 100

Freddie Mac Home Possible

Dream Maker Mortgage

Home Run Mortgage

Home Opportunities Program

Expanded Financing Alternatives Program

Emerging Market Programs

80/20 (Note that the criteria for 2^nd liens has tightened significantly)

USDA-

No Down Payment to Qualified Borrowers

No Monthly Mortgage Insurance

Seller can pay UNLIMITED toward closing costs and prepaids!

$0 Move-In Possible for Qualified Borrowers

No Cash Reserve Requirements

Must Purchase in an Eligible Rural Area* (Contact us for the complete list- this is one of our specialty loans!)

VA-

NO Minimum FICO score is required*

There is NO downpayment required!

Seller can pay any/all of reasonable buyer’s closing cost!

Buyer CAN currently be in chapter 13 BANKRUPTCY*

Sales Price can go up to $417,000*

Can have unpaid collections

Can go as low as an 4.20 Fixed Rate if used in conjunction with a Texas Veterans Land Board program.*

*Some limitations apply

VA and TVLB loans are unique- trust them only to loan teams who know them well- we are experts in these- let us help!

Reduced Doc Loans-

This is one of the areas that has had the most changes. A large majority of the “Alt A” market has practically gone away. Stated loans are still available with excellent credit at 5% down and 10% down with FICO scores 620 or above. Stated loans below 600 typically does not exist regardless of downpayment.

Investor Financing-

$417,000 for qualified full doc borrowers w/ 10% down (Freddie/Fannie)

95% investor financing still available for extremely qualified borrowers

Remember the 100% investor financing, stated income loans?…… As Kelly Clarkson sings…. Never Again!

Jumbo Loans-

Earlier in the month rates shot up over night. We are now seeing an improvement to pricing. Loans up to 2,000,000 will require anywhere from 5%-30% down (depending on multiple factors)

2^nd Liens-

80/20 and 75/25 financing is still available, however, minimum FICO scores has increased, as well as requirements for reserves and debt-to-income requirements. This is a very shaky market, so buyer (and seller) beware before closing.

Reminder that PMI is tax deductible as of January 2007 for borrowers making less than $100,000 yearly.

GOOD NEIGHBOR NEXT DOOR PROGRAM

2007-09-01T13:49:00.000-05:00

Did you know that HUD has a wonderful program that allows specific clients to purchase a HUD home at 50% of value? Below you will find information on this as well as web links.

Law enforcement officers, pre-Kindergarten through 12th grade teachers and firefighters/emergency medical technicians can contribute to community revitalization while becoming homeowners through HUD's Good Neighbor Next Door Sales Program. HUD offers a substantial incentive in the form of a discount of 50% from the list price of the home. In return they must commit to live in the property for 36 months as their sole residence.

How the Program Works

Eligible Single Family homes located in revitalization areas (http://www.hud.gov/offices/hsg/sfh/revite/abtrevt.cfmare) listed exclusively for sales through the Good Neighbor Next Door Sales program. Properties are available for purchase through the program for five days.

How to Participate in Good Neighbor Next Door

Check the listings for your state (http://www.hud.gov/homes/index.cfm). Follow the instructions to submit interest in purchasing a specific home. If more than one person submits on a single home a selection will be made by random lottery. Buyer must meet the requirements (http://www.hud.gov/offices/hsg/sfh/reo/goodn/particip.cfm) for a law enforcement officer, teacher, firefighter or emergency medical technician and comply with HUD's regulations for the program.

HUD requires that buyer sign a second mortgage and note (http://www.hud.gov/offices/hsg/sfh/nsc/gnndserv.cfm) for the discount amount. No interest or payments are required on this "silent second" provided that they fulfill the three-year occupancy requirement (http://www.hud.gov/offices/hsg/sfh/nsc/gnndserv.cfm).

The number of properties available is limited and the list of available properties changes weekly.

Q&A: Good Neighbor Next Door Sales

Question: What Is the Good Neighbor Next Door (GNND) Sales Program?

Answer: HUD wants to strengthen America's communities. The Good Neighbor Next Door Program offers HUD owned single family (one-unit) homes to eligible participants at a 50% discount.

Question: Am I Eligible for the GNND Sales Program?

Answer: Law enforcement officers, teachers and firefighters/emergency medical technicians and who meet all other requirements of the program are eligible to purchase an available home.

Question: How Much of a Discount Can I Get on a HUD Home?

Answer: You can get a 50 percent discount off the HUD appraised value. For example, if HUD lists a home at $100,000, you can buy it for $50,000 provided, you occupy the home as your personal residence for the required occupancy period. If you qualify for any FHA-insured mortgage program, your downpayment is only $100 and you may finance (roll in) closing costs.

Question: What Kind of Mortgage Financing Do I Need?

Answer: You may use FHA, VA, or conventional mortgages, or cash. HUD requires you to sign a Second Mortgage and Note on the discounted amount (which is $50,000 in the example above). No interest or payments are required on this "silent second" mortgage if you live in the home for the entire 36 month occupancy period. You may be required to pay a pro-rata portion of the discount to HUD should you fail to fulfill the three year occupancy requirement.

Question: What is the Occupancy Period?

You must live in the home as your sole residence for a full 36 months. The purpose of the program is to strengthen communities by encouraging employed, professional law enforcement officers, teachers and firefighters/emergency medical technicians to live in the community. You will have 30, 90 or 180 days to move into the home you purchase, depending on HUD's determination of the condition of the home and the level of repairs that may be required, if any. The 30th, 90th or 180th day is the start date for the occupancy period. Your are released from all obligations under this program at the end of the 36th month following the start date. HUD views the occupancy obligation seriously and vigorously pursues violators to the fullest extent of the law.

Question: What Is an FHA Rehabilitation Mortgage and How Can It Help Me Buy a HUD Home?

Answer: The FHA 203(k) mortgage program helps homebuyers buy a home and have enough money to rehabilitate or repair it. Repairs must cost more than $5,000. The cost of the repairs and the mortgage are combined into a single monthly payment. Consider FHA’s 203(b) program if needed repairs are under $5,000. FHA also has a new Streamlined 203(k) program which may be useful.

Discuss these financing options with your lender!

Question: Can I Sell the GNND Home after 3-years and Keep the Profit?

Answer: Yes. After you live in the GNND home 3 years, you can sell the home and keep any equity and/or appreciation.

Question: Do I Have to Use a Real Estate Broker or Agent to Buy a GNND Home?

Answer: Yes.

Question: Do I Have to Be a First Time Homebuyer to Take Advantage of the Program?

Answer: No. However, you may not own any other residential real property at the time you submit your offer to purchase a home and for one year previous to that date. For example, if you submit an offer to purchase a home on August 1, 2007, you may not have owned a home during the period from July 31, 2006.

Question: Where Are These Homes Located?

Answer: The HUD homes are located in designated Revitalization Areas. There are hundreds of Revitalization Areas located in the United States.

Question: Does HUD Provide a Home Warranty?

Answer: No. All GNND homes are sold "as is," without any kind of warranty.

Question: Can I Buy Multiple Unit Properties (E.g., Duplexes, Triplexes, Etc.) through the Officer Next Door Program?

Answer: No. You can only buy single unit homes, townhouses, and condominiums through the GNND Program.

Question: Do I Have to Pay Earnest Money or Other Deposits in Order to Submit a Contract for a GNND Home?

Answer: Yes. The amount of the earnest money deposit required is an amount equal to one percent of the list price, but no less than $500 and no more than $2,000. HUD considers all offers to be a commitment to purchase a home if you are awarded the sale. Therefore, please carefully consider your offer and be aware of HUD's policy on earnest money as stated here: If an offer is accepted, the earnest money deposit will be credited to the purchaser at closing. If the offer is rejected, the earnest money deposit will be returned. Earnest money deposits are subject to total forfeiture for failure of the participant to close a sale.

Question: Can I Bargain with HUD on the Price of a GNND Property?

Answer: No. You must offer the exact HUD list price when bidding on any GNND property. Then you get a 50 percent discount off of that list price.

Question: What if I Leave the employment, that made me eligible, for Any Reason, during the Mandatory 3-year Residency Period?

Answer: Nothing happens, but you must continue to live in the home for the full 36-month mandatory occupancy period. If you move out of the GNND home, you will have to repay HUD on a prorated schedule. In addition, you must certify that it is your good faith intention to remain employed as a law enforcement officer, teacher or firefighter/emergency medical technician for one year beginning with your purchase. Do no attempt to participate in the program if you know in advance that you will not be employed as required for at least one year.

Question: Some Agencies Have Other Homebuying Programs. Can the GNND Program Work in Conjunction with These?

Answer: Yes, as long as you can meet all the GNND program rules while participating in these other programs.

Question: What Happens if a Participant Fails to Honor the 3-year Occupancy Requirement?

Answer: HUD can demand repayment of the discounted amount on a prorated basis. That means you would have to repay 1/36th of the discount you received for each month that you did not occupy the home. HUD also may initiate administrative sanctions including, but not limited to, barring the officer from participating in any HUD/FHA programs, as well as other federal programs. In any case of fraud or abuse, HUD will refer the case to HUD's Office of the Inspector General for investigation and possible criminal prosecution. HUD may also notify the officer's employing agency. Criminal prosecution and conviction for fraud and abuse concerning the GNND Program can result in a fine of up to $250,000 and/or two years in federal prison.

Question: How Does HUD Enforce the 3-year Residency Requirement?

Answer: The participant must certify he or she is living in the GNND home as a sole residence at the time of purchase and each year after that. HUD can conduct spot checks to make sure the GNND home is your sole residence at any time during the 3-year period. You also must sign a note and mortgage for the discount amount. HUD may foreclose this mortgage if you do not comply with the 36-month occupancy requirement

Putting a Stop To A Credit Ruse

2007-06-22T23:13:00.000-05:00

I've have a lot of discussions over the last couple of months concerning the “Renting” of FICO scores to obtain a mortgage that is credit score driven. I have had multiple phone calls on how the mortgage industry is combating this fraud… and here it is below. The sad part (as in a lot of things), innocent people will be affected.

"Putting a Stop To a Credit Ruse"
By Kenneth R. Harney

The days may be numbered for dozens of Internet-based companies that promise to quickly boost FICO credit scores by 200 to 300 points.

Fair Isaac, the developer of the widely used FICO score, plans to introduce key changes designed to derail schemes that transplant high-quality credit card histories to the files of people with low FICO scores.

The credit-boost companies, easily found on the Web by searching for "credit trade line," claim that they violate no federal laws and are not seeking to defraud mortgage lenders. But mortgage industry groups, federal and state regulators, and credit industry leaders say the programs represent significant threats to the home lending system -- opening the door to fraudulent home loan applications.

Using a FICO-boost service, for example, a mortgage applicant with a history of late and missed payments and a FICO score in the 500s could puff up his or her score well above 700 and be eligible for the best interest rates and fees.

How could that happen? Check out the online pitch of one promoter: "Rent your credit and earn thousands," it proclaims. The company offers cardholders with sterling payment histories on cards with high balances "as much as $10,000 a month or more" simply by accepting unseen borrowers with poor credit backgrounds as "authorized users" on their card accounts for 90 days.

Although the add-on users receive no access to the credit card and cannot rack up charges, Fair Isaac's FICO model allows the cardholders' excellent payment histories to flow directly into the credit files of all authorized users on the card. The addition of the high-quality credit quickly raises the scores of any authorized users -- even though the add-on users may still be poor credit risks.

Authorized users traditionally have been cardholders' children, close relatives or friends with little experience with credit and insufficient histories to generate FICO scores. Many parents allow their high school or college family members to tag on to Visa or MasterCard accounts as authorized users to help them learn about and build their credit skills. But under federal law, there are no limitations on who can become an authorized user or on the number of authorized users. Nor are there bars to treating payment histories as financial commodities and renting them out.

One Web site promoter claims that some cardholder "investors" are "able to accommodate as many as 99" authorized users simultaneously and have "as many as 22 qualifying cards" for rental, creating "thousands of dollars per card" of extra income monthly.

Fair Isaac, worried that its credit scoring system is being gamed to facilitate fraud, is readying a crackdown. Starting in September, the updated version of the FICO software available to lenders -- the "FICO 08" model -- will no longer consider authorized-user accounts in computing credit scores, said Craig Watts, Fair Isaac's public affairs manager.

That, in effect, will block holders of good credit from renting their account histories to authorized users to artificially boost scores. Watts said that once fully implemented, Fair Isaac's change should eliminate much of the problem.

However, some credit experts say there could be a downside: Children and other legitimate authorized users no longer will get the benefits of their sharing of their parents' or grandparents' high-quality credit. Their FICO scores will be depressed or might even disappear.
As an illustration, a college student with little credit history on file might get a 100-point increase by virtue of being an authorized user on her mother's Visa card with perfect payments stretching to the 1980s. Those 100 points, in turn, might lower the student's cost of auto insurance premiums, help in job applications and show her to be a creditworthy potential tenant when she seeks to rent an apartment.

If FICO score calculations ignore all authorized-user accounts, however, the student's score could be 100 points lower.

Terry Clemans, executive director of the National Credit Reporting Association, said that while he understands "Fair Isaac's need to solve the [application fraud] problem, I would think there must be some less drastic ways to filter out" legitimate authorized-user accounts from the new breed of rented credit card accounts. Credit card companies also need to get involved, Clemans said, and "should not approve authorized user accounts" where the cardholder is clearly participating in some form of rental scheme for profit.

Bottom line: If you depend on an authorized-user account to elevate your FICO score -- whether legitimately or with cheating in your heart -- don't bank on it after September.

Lender Market Watch

2007-05-24T10:30:00.000-05:00

Last week, Steroid-pumped Stocks kicked sand in the face of the 97-pound weakling Bond market, and home loan rates worsened by about .125% across the board. What happened?

Here's the story - money invested out in the financial markets generally flows back and forth between Stocks and Bonds. This means that when Stocks are doing well, money is flowing out of Bonds as investors move their "safe" holdings into what they hope are winning positions in the Stock market. On the other hand, when the Stock market takes a turn for the worse, money flows right back out of Stocks and right back over into "safe haven" Bonds. This happens over and over, and is true on a large and small scale; from individual investors on up to massive institutional investors...the mindset is exactly the same.

As the Stock market has rocketed higher in recent days, investors want to get in on the action, and that money has to come from somewhere...and that's right, it's coming from Bonds. And when money is pulled out of Bonds, it means that Bond prices worsen, and home loan rates move higher like they did last week.

What should have helped Bonds was a friendly Consumer Price Index report, showing that inflation appears to be moderating. Inflation is the arch-enemy of Bonds, which deliver an investor a fixed return - the value of which is eroded by inflation. But just like the 97-pound weaklings wimpy friend at the beach, the good news on inflation wasn't strong enough to help Bonds or home loan rates regain their legs.

SPEAKING OF THE BEACH...EVER SEE THOSE DUDES GOING AROUND WITH METAL DETECTORS, AND WONDER JUST WHAT THEY'RE UP TO? MIGHT BE SEEKING OLD WAR RELICS, OR PERHAPS A VALUABLE COIN - BUT YOU WON'T NEED A MACHINE TO FIND A NEW COIN THAT'S WORTH ROUGHLY 50 TIMES IT'S FACE VALUE DUE TO A MINT ERROR. IT COULD BE IN YOUR POCKET RIGHT NOW, SO DON'T MISS THIS WEEK'S MORTGAGE MARKET VIEW.

Lender Forecast, May 20-26

2007-05-24T10:29:00.000-05:00

What's in store for the week ahead? First, a short - but relevant - history lesson. World War I was sometimes called the "War of the Trenches", because of the unique way that ground battles were fought. A long trench was dug by each opposing force, and they would fight between the two trenches, using the trench itself for cover as needed. Whichever side won that particular battle would advance forward, taking over their opponent's trench and proceeding to fight forward. Now - look at the chart below, and imagine you are in a hot air balloon, looking down over a WWI battlefield. C'mon, use your imagination.

You can see that the 200-day Moving Average has been a very tough "trench" held firmly by the Bond Bulls, who have kept Bond prices above this level for the past nine months running and subsequently, kept home loan rates low. But just this week, the Bond Bears have finally penetrated and defeated this tough trench. And as Bond prices have fallen, home loan rates have risen. And in the past, this particular trench - the 200-day Moving Average - has been a real tough one to beat. In fact, last time Bond prices fell below this level, it took an eighteen month battle to win the trench back, and help home loan rates improve!

This means that the overall trend for home loan rates doesn't look too positive in the coming months, unless some very Bond-friendly news makes its way to the front lines. And with a thin economic calendar in the week ahead - don't expect any significant improvements in the near term.

HAIL TO THE CHEF!

2007-05-24T10:26:00.000-05:00

Oops...meant to say "Chief!" Errors are common, but generally not for the US Mint. Because they rarely make a mistake, their recent mishap is causing the value of some newly minted - yet flawed - coins to skyrocket.

The United States is honoring our nations Presidents by issuing Dollar coins, which feature their images. And as a side bonus, the US also saves money, because coins stay in circulation longer than paper currency - yet it remains to be seen if we will adapt to clunky coins instead of paper in our pockets. The new coins will feature four different Presidents each year, appearing in the order in which they served, beginning in 2007 with Washington, Adams, Jefferson, and Madison.

The Dollar coins will be unique in design with each having the name and likeness of the President, the term of office, and a number indicating the order in which the President served. Additionally, the standard inscriptions traditionally found on the face of coins have been moved to the edge. The inscriptions "E Pluribus Unum (out of many, one)", "In God We Trust", the year of minting, and the mint mark have all been moved to the edge of the coin.

And with any big change to design...there is always room for error. Sure enough, some of these new coins will quickly come off the market, because the US Mint made a mistake. The value of these rare coins is now up 5000%, and still climbing.

Here's what happened.

The U. S. Mint placed a significant, but undisclosed, amount of new dollar coins into circulation without the inscriptions around the edge. These $1 coins are now worth $50 a piece to collectors! That's right, fifty times the actual face value. Obviously, something went wrong during the six-step process to allow this to happen.

Here's the procedure:

Blanking - The U.S. Mint buys strips of metal rolled in a coil that are about 13 inches wide and 1,500 feet long. The coil is fed through a blanking press which punches out round disks called blanks.

Annealing, Washing and Drying - The blanks are then heated in an annealing furnace to soften them and then run through a washer and dryer.

Upsetting - The blanks go through an upsetting mill to raise the edges of the coins.

Striking - Coins go to the coining press and they are stamped with the designs and inscriptions.

Inspecting - Press operators use magnifying glasses to spot-check struck coins.

Counting and Bagging - Coins are dropped into bags, sealed shut, and held in a vault until shipped to the Federal Reserve.

Nabbing one of these could turn a tidy profit for you with an even greater price tag in the future. But be careful - The US Mint has issued a warning on their website that scam artists are actually grinding the rims of Presidential $1 Coins to remove the inscriptions, then marketing them as US Mint "error coins".

In Philadelphia or Denver, you can actually take a fascinating tour of a US Mint location. To learn more - or take a virtual tour - click here: Tour the US Mint

Two Major "Did You Knows" about Short Sales.

2007-05-09T09:36:00.000-05:00

Important Read!!!

1) Did you know….

That if the seller has an FHA loan , HUD is not allowing lenders to negotiate a short sale and pay closing cost for the buyer. If the lender allows closing cost paid for the buyer, FHA will not cover that part of the cost in the insurability/ reimbursement of the loan back to the lender.

2) Did you know…

The IRS can tax the amount forgiven on a short sale? Read below. For homeowners who are seriously delinquent on their mortgages and hoping for relief, the Internal Revenue Service has bad news: If your lender agrees to modify your loan and forgive any of your debt, you could owe federal income tax on the amount forgiven.

Think of it as the tax code's "kick 'em while they're down" rule. When personal debts are canceled by a creditor, the amount forgiven is treated as ordinary income under the Internal Revenue Code, except in some situations such as insolvency. Worse yet, the lender is required by law to report the canceled amount to the IRS. Ouch!

This is especially bad news for the growing numbers of credit-impaired subprime borrowers who find themselves "upside down" in the current real estate market: They owe more on their mortgage than the value of their house, thanks to noxious combinations of zero down payments, declining property values and hefty payment increases they can't afford.

Diane Thompson, a lawyer with the Land of Lincoln Legal Assistance Foundation in East St. Louis, Ill., tells of one client who learned about the tax code's Catch-22 the hard way. After the homeowner negotiated a loan modification agreement with her lender, she assumed that she was done with the matter. But a year later, the IRS came after her, demanding a large tax payment on the amount the lender forgave -- a tax bill that was equal to her annual income. As required, her lender had dutifully submitted a Form 1099-C to the IRS, alerting the agency to the woman's extra "income" from the loan modification.

The homeowner never received that income in any tangible way; she couldn't deposit it in her bank account. But under federal law, the IRS had every right to come after her for unpaid taxes.
Similar situations are likely to pop up around the country in the coming year as lenders bend over backward to modify thousands of troubled loans to prevent foreclosure. Proposed legislation on Capitol Hill could soften some of the impact on financially stressed homeowners, however. The Mortgage Cancellation Tax Relief Act of 2007 (H.R. 1876) would amend the tax code to exclude debt forgiveness on principal home mortgages from treatment as income.

Introduced in mid-April by Reps. Robert E. Andrews (D-N.J.) and Ron Lewis (R-Ky.), the bill would allow lenders to restructure delinquent mortgages without worrying about income-tax hand grenades hitting their borrowers the next year. The legislation could assist many other homeowners in financial trouble who negotiate pre-foreclosure "short sales" or deeds in lieu of foreclosure, or those whose foreclosure proceeds are insufficient to pay off their mortgage debt.

Short sales are increasingly commonplace. Say you are seriously behind on your mortgage payments, and a loan modification or rate reduction won't solve the problem because you have lost your job. As an alternative to foreclosure, your lender might suggest a quick sale of the house, often to an investor who will buy it as-is at a discounted price. If the short sale proceeds are $10,000 less than the outstanding mortgage balance and your lender agrees to forgive that amount, the Andrews-Lewis bill would allow you to obtain that relief tax-free.

Under current law, your lender would be required to report the $10,000 in phantom income to the IRS. Ditto if you went to foreclosure and the sale proceeds yielded $10,000 -- or $50,000 -- less than the outstanding debt owed to the lender.

Proponents of the debt-relief bill argue that short sales, mortgage delinquencies and foreclosures are painful situations for most homeowners and that there's no public policy purpose served by smacking them with tax penalties that make things even worse. In the case of below-market short sales, for example, most homeowners have already suffered sizable capital losses that are not tax-deductible. They've lost thousands of dollars in equity.

Why pile on?
The outlook for the bill: It's currently before the House Ways and Means Committee, Congress's primary tax legislation body. Because most of the majority-Democratic housing and banking committee leaders have called on banks and mortgage companies to work out solutions to keep troubled homeowners out of foreclosure, a bipartisan tax fairness bill like this one should have a reasonable chance of passage. Stay tuned…..

Lending Forecast, Week of May 7th

2007-05-09T09:35:00.000-05:00

This week's economic calendar is front and back-end loaded with potentially high impact reports. Right out of the gates, Monday brings the Personal Income and Spending report with the imbedded Core Personal Consumption Expenditure Index, the Federal Reserve's most favored gauge of inflation. Expectations are for Core Inflation to be reported at 2.2%, inching closer to the Fed's target of 2% or lower. Not to be outdone, Friday is launch-day for the potentially explosive monthly Jobs Report with the latest data on new job formation, hourly earnings, and the unemployment rate. Estimates for new job creations are presently around 100,000.

If either of these reports are out of line - showing more inflation than expected or markedly more jobs than expected - this could cause Bond prices and home loan rates to suffer. And on the flip side - if the reports show low inflation or fewer job creations than anticipated, this could help Bond prices and home loan rates improve.

Mortgage Bonds are now trading within a few whiskers of a very important technical floor of support at the 200-day Moving Average. Why is this floor so important? The chart below shows that Bonds have traded above this floor for eight months - and the last time Bonds traded beneath this level, the 200-day MA became a tough overhead ceiling of resistance, putting a lid on Bond prices or home loan rates improving for one and half years. So...if the news of this week forces the Bond beneath this 200-day MA floor of support, it may mean higher home loan rates for a while.

Lender's Corner

2007-05-09T09:34:00.000-05:00

"THE ONE FUNCTION THAT TV NEWS PERFORMS VERY WELL IS THAT WHEN THERE IS NO NEWS - WE GIVE IT TO YOU WITH THE SAME EMPHASIS AS IF THERE WERE." David Brinkley

No kidding...and although the week did start out with little real economic news for talking heads to deliver with drama, the calendar picked up steam in a hurry. Mixed news arrived for both New and Existing Home Sales - and on the heels of the recent strong housing starts and building permits that had the bad-news loving media choking, they attempted to paint a very dismal picture on housing - but it should be taken with a grain of salt. Most closings in March were likely originated in February, which was an incredibly cold month across the US - not the best month to be out home shopping or mucking around construction sites. With spring on the way, there could be some strength in housing in the upcoming months.

This week also brought an interesting report called the Employment Cost Index - one of former Fed Chair Alan Greenspan's favorites - which measures the change in employment costs like wages and benefits. This report showed that costs are increasing, with wages increasing by 3.6% and benefit costs increasing by 3.1% over the past year. So not only are employers having to pay more in salaries due to a tight labor market, but the benefits they are providing to their employees are costing more too.

What's a business owner to do? You got it - consider raising the price of their goods and services to cover the rising costs of their employees...and higher prices means inflation. Not good news for inflation-hating Bond prices and home loan rates, which lost the improvements made earlier in the week and ended unchanged to slightly worse for the week overall.

THE JOB MARKET IS TIGHTENING, AND A COLLEGE EDUCATION IS MORE IMPORTANT THAN EVER - YET 97% OF AMERICAN FAMILIES HAVE NOT PLANNED PROPERLY FOR THEIR CHILD'S COLLEGE FUND. THINK YOU'VE GOT ALL KINDS OF TIME BECAUSE YOUR KIDS ARE YOUNG? WAITING COULD COST YOU...READ THIS WEEK'S MORTGAGE MARKET VIEW FOR A CAUTIONARY TALE OF TWO PARENTS, AND LEARN WHY YOU SHOULD GET STARTED SAVING RIGHT AWAY.

A TALE OF TWO PARENTS...

2007-05-09T09:24:00.000-05:00

In today's world, a college education is more important than ever. Many of the jobs that do not require a college degree have been outsourced to workers in other countries, or replaced by a computer or machine. And according to Fed Chairman Ben Bernanke, the income disparity between college grads and non-grads is growing every year. In 1979, college grads earned 38% more than those with only a high school diploma - but today, college grads earn 75% more than those without degrees.

But let's face it, college is expensive, and becoming more so every day, inflating at around 5% per year historically. If anything, the cost will continue to rise as the upcoming high school graduating classes are expected to be the largest in history. The demand for four-year colleges will likely increase and with the number of seats in the classrooms still the same, expansion of space will probably not be an option for colleges and universities, but bumping the price tag certainly will be. And the type of college your child attends can have a big effect on the cost too - for just one year of tuition, room and board, an average private college runs just over $30,000, a public out of state college around $19,000, and even a public in state college is close to $13,000.
So as a parent who wants your child to have the chance to attend college - what can you do? Plan early.

Let's look at a tale of two parents to illustrate how important it is to get started right away.

The preschool open house was in full swing, and two parents were chatting over the punchbowl, remarking on how they knew time would fly, and before you know it - their kids would be off to college. Taylor's parents are prepared, having recently sat down with a mortgage professional and learning that to completely fund Taylor's four year education at the local college would cost either $300 per month in savings - or by being able to tap into the equity in their home, only $133 per month after tax. "What a relief to know it's all taken care of!" they commented to Max's parents. But Max's parents replied, "Hey, what's the rush? Look, the kids are only knee-high right now...we'll worry about this later."

Seven years later, the kids are in 5th grade, and the parents meet up again at a birthday party. College comes up in the conversation, as Max's parents just learned that for him to attend the very same college as Taylor, it will now require them to save $835 per month to be ready on time, which is not something they are prepared to do. Taylor's parents recommend that they meet their trusted mortgage professional, who advises them that by using the mortgage wisely, it will only cost them $260 per month after tax. Much easier to swallow - but it's twice as much per month as Taylor's parents, who planned ahead and started earlier.

The moral to this story?

If you want to save for a college education for your child, start the investment early. And encourage your children to invest and save too, with a portion of funds from their allowance or a side job like mowing the neighbors' lawn or babysitting. They will see how the value of their savings grows over time, and most importantly, will help instill the importance and value of a college education to your child. And as the college years approach, explore scholarships, financial aid, or federal direct aid, which is money that does not have to be repaid. When your child is young - you just don't know if they will be a star athlete or straight A student - so always better to plan ahead, and if scholarship money does become available, what a wonderful problem to have more than enough money in savings, due to your good planning.

The scoop on AMT (Alternative Minimum Tax)

2007-04-23T13:41:00.000-05:00

Remember the old tag line from the show "Lifestyles of the Rich and Famous", as Robin Leach wished us all "champagne wishes and caviar dreams"? And sure enough, these days more and more people have the trappings of the rich. But is it the new home, maybe a shiny BMW, or more vacations? No. It's getting hit by the AMT or Alternative Minimum Tax, originally designed to hit only the ultra-wealthy. Not really the "you have arrived" feeling you had hoped for.

The nasty AMT isn't just for the wealthy anymore, as it is trapping an alarming amount of the middle class, especially those who own homes and live in states with high income tax rates. And it's getting worse. Pretty soon, over half those with incomes between $75k - $100k will be victimized by the AMT.

So what's the scoop with AMT, and what do we need to watch out for?

The AMT was first enacted nearly 40 years ago to ensure that wealthy taxpayers pay at least some federal income tax versus sheltering their entire income with big write-offs. This strategy worked at the time, but AMT has never been indexed for inflation, resulting in more middle-income taxpayers owing the additional tax.

All of us go through the AMT test each year. Our income is matched up with the tax brackets it falls into and the tax owed is calculated. But we also go through a second calculation - The AMT calculation. Many deductions are eliminated and the tax brackets are reduced. The tax owed under AMT is then compared to the tax owed under the bracket calculation. And guess which one you owe? The higher tax, of course.

More individuals will pay the higher AMT tax since it does not allow deductions such as certain interest on some home loans, property taxes, state and local income taxes, standard deductions, or personal exemptions for children and dependents that are normally deductible under the regular tax brackets. As stated earlier, certain interest on some home loans will be wiped out under the AMT. There are two types of home loans that can be eligible for tax deductibility.

First, there is Acquisition Debt, which allows interest to be deductible on a loan used to acquire or improve your primary or second home, with a loan limit of $1 million dollars. The good news about Acquisition Debt is that it remains deductible, even if you are subject to AMT. This makes Acquisition Debt very valuable. But once you pay off or reduce the balance of your Acquisition Debt, it is gone and only the interest on the remaining portion is deductible. So taking out a new loan at a higher amount will not give you that precious Acquisition Debt back.

The next best thing to Acquisition Debt is Home Equity Debt. Home Equity Debt has a limit of $100,000, which can be used over and above the Acquisition Debt Balance. And Home Equity Debt is flexible in that you can pay it down and pull it back out, which is not allowable for Acquisition Debt. But Home Equity Debt is eliminated under AMT...ouch. And with so many people being trapped by the AMT and also having loan amounts higher than what was used to acquire the property, the lost deduction is significant.

"ANYTHING THAT BEGINS WITH 'I DON'T KNOW HOW TO TELL YOU THIS' IS NEVER GOOD NEWS"

2007-04-23T13:40:00.000-05:00

After a trend of gradually worsening over the past month, Bond prices and home loan rates finally got the good news they'd been waiting for...that pesky inflation rate finally appears to be moving lower. Early last week, the Consumer Price Index (CPI) showed core consumer price inflation as better than anticipated, falling to a year-over-year 2.5% rate, down from 2.7% reported last month. While lower prices on goods and services are certainly good news for all of us, the consumers; it was especially welcome for inflation-hating Bonds and home loan rates.

Following the news, home loan rates improved by .125%, and appeared destined to improve even more.

But this wasn't to be - what happened? Bond prices were feeling the love, home loan rates were improving - but right in the middle of the party, Bonds ran dead into a tough ceiling of technical resistance, stopping them cold and turning them back, causing them to lose some of the nice ground they'd made in the first part of the week. The path of least resistance ahead appears to be that Bond prices and home loan rates may worsen before they get better...but it all depends on the flavor of the news ahead.

Things to consider when buying a home using FHA loans.

2007-04-17T14:18:00.000-05:00

Maximum loan amount for Dallas, Kaufman, Collin, Denton, Rockwall and Hunt Counties is $200,160 (Sales price of 204,760 with the 2.25 downpayment)

Minimum Down Payment is 2.250% Buyer must make a 3% investment unless down payment is paid as a Grant/Charity (DAP) contribution.

Seller can contribute up to 6% of the Sales Price without using a Charity (DAP) contribution.

No Termite Inspection Required.

No Non-Allowables required for the seller.

FHA is now using the standard Fannie Mae appraisal form- No more VC sheets!

Any contributions that the seller is contributing should be included in 12A1B on your contract UNLESS they are using a Down Payment Assistance Program (DAP).

If any monies are being paid as a contribution towards buyer’s down payment, DO NOT include those fees in 12A1B . Instead, add that to your “Special Provisions” #11. You will need to verify with your mortgage lender the amount of the contribution to be specified. Special Provisions to read “Seller to contribute $____ towards a Down Payment Assistance Program”.

FHA Mortgage Insurance is paid upfront (1.50%) rolled into the mortgage amount and .5% paid monthly in the payment. The .5% can be cancelled once the buyer has a 78% LTV and a minimum of 5 years (which ever is the later) has been paid towards the mortgage and the mortgage history has been satisfactory.

A 30 year Fixed Rate mortgage for a Single Family Residence is a Section 203B. A Condo has a 234C Section (the section is a part of The Third Party Financing Addendum #C for FHA).

A Condo does not require upfront FHA Insurance added to the mortgage and a survey is not required. A Condo must meet the FHA guidelines of no less than 51% Owner Occupied and be an FHA Approved complex.

Make sure the executed date is on the contract.

THIS BLOG IS HEREBY CERTIFIED AS BEING 100% "IMUS FREE"

2007-04-15T08:30:00.000-05:00

But just in case you didn't get enough of the Don Imus story that seemed to infiltrate every minute of news time last week...just turn on the television or radio for 30 seconds and you're sure to catch an update. The market had a busy week on its own...and the Fed took center stage, with the "Minutes" from the last Fed meeting being released, as well as several members out and about on the speaking circuit.

While the Fed speakers didn't give any market-rattling comments, the Fed Meeting Minutes were a different story. Remember that the Minutes are the "Fed Unplugged", giving all the commentary between voting and non-voting members, before the carefully crafted formal Policy Statement is released to the public. The Fed intentionally delays the release of the Minutes, so the market has time to interpret and adapt to the Policy Statement itself, before they throw the "off the record" discussion into the mix for review and analysis.

The Minutes revealed that although the decision at the meeting was to leave the Fed Funds Rate unchanged, Fed members remain concerned about inflation, as recent indicators show that inflation is stubbornly remaining at a level above the Fed's comfort zone of 1 - 2%. Bonds didn't like the inflationary concerns, and lost some ground...with home loan rates worsening just slightly. The Fed is leaving an open door for more hikes ahead - as well as the possibility of cuts - completely dependent on what the incoming economic data tells them in the coming months. And a highly watched measure of inflation is due out next week - read on to know what to be looking for.

PLEASE MISTER POSTMAN, LOOK AND SEE...IF THERE'S A LETTER, A LETTER FOR ME...

2007-04-15T08:26:00.000-05:00

Perhaps the reason neither the Beatles nor the Marvelettes hadn't received that important letter was simply incorrect postage. And with the postage increases that seem to come more and more frequently, it's not a crazy assumption to make. So here it comes again - starting May 14th, new higher postal rates will go into effect. If you don't want your loved ones - not to mention your creditors - waiting by the mailbox, now is the time to prepare.

The cost of postage for a standard one ounce first class letter is increasing from 39 cents up to 41 cents. And you know the drill - each time the post office bumps up the rates by a penny or two, it requires an annoying trip to the post office to purchase a book of one or two cent stamps.

But now - you can wave goodbye to those pesky one and two cent stamps that clutter up your desk or your wallet...the post office has finally created a stamp that will last "FOREVER".

The new stamp is called the "Forever" stamp and was created to do just what the title states....last forever. Once the stamp is purchased, the stamp can be used forever to mail one-ounce First-Class letters anytime in the future regardless of postage increases. The current price of each Forever stamp is 41 cents, and you can buy Forever stamps at that rate until the next postage increase. When the postal rates increase in the future, new Forever stamps sold at that time will go up in price too - but you can use up all your previously purchased Forever stamps without having to deal with buying and using the inconvenient make-up stamps for the difference. Forever stamps can now be purchased online at http://www.usps.com/ or at post offices nationwide.

FHA "FLIPPING" Guidelines

2007-04-12T09:56:00.000-05:00

Because FHA is rapidly becoming the "IN" loan, I am getting phone calls because some lenders didn’t know about the flipping guidelines until the last minute. Below you will find the guidelines on flipped properties when pertaining to a buyer that is using FHA to purchase the property.

Remember, “Flipped Properties” are defined as those properties that have been acquired within a twelve (12) month period.

If sold in a 0-90 day period after acquisition:
According to FHA guidelines, a property of re-sale occurring 90 days or less from the date the seller acquired the property is not eligible for FHA insurance.

If sold in a 91-180 day period after acquisition:
A property re-sale occurring between 91-180 days from the date the seller acquired the property is subject to additional documentation ONLY if the re-sale price is 100% or more over the purchase/acquisition price (example: the house was sold to the investor for $50,000 and they are selling it for $100,000)

A second FHA appraisal is required from another approved FHA appraiser. The cost of the second appraisal CANNOT be charged to the homebuyer. If the seller is paying for the second appraisal, the real estate contract should reflect the seller is paying for the second appraisal.

If there is an increase in value and it is the result of rehabilitation, the lender must require documentation to support the increase is directly linked to rehabilitation of the property.

If both appraisals supported the increased valuation of the property, the conditional commitment will be issued based on the lowest value of the two appraisals.

If the increased value is NOT supported, the previous sales price is to be used in performing the maximum mortgage calculation.

If sold in a 181-360 day period after acquisition:
A property re-sale occurring between 181-360 days from the date the seller acquired the property is subject to additional documentation ONLY if the re-sale price is 100% or more over the purchase/acquisition price (example: the house was sold to the investor for $50,000 and they are selling it for $100,000)

If there is an increase in value and it is the result of rehabilitation, the lender must require documentation to support the increase is directly linked to rehabilitation of the property.
If the increased value is NOT supported, the previous sales price is to be used in performing the maximum mortgage calculation.

IT'S IN THE "FINE PRINT"...

2007-04-08T08:46:00.000-05:00

Credit card companies do a great job at disclosing all of their terms and conditions...but do so in an exceptionally hard to read font and verbiage, designed to dissuade you from really reading the infamous "fine print". But failing to understand the terms can be costly.

Most people know that when your bill arrives, it needs to be paid on time or you'll be hit with a hefty late fee - but many don't know that paying late usually entitles the credit card company to raise your rate immediately and significantly. And worse yet - did you know that paying late on one of your credit cards also entitles all your other credit card companies to raise the rates you are paying them as well? You bet - it's called the "Universal Default Clause", and it basically means that if you are late on one credit card account, all other credit card companies that you have accounts with can increase the interest rate too, even if their accounts have been paid completely on time.

But the plot thickens further - this goes beyond late payments on credit cards alone.
If one of your credit card companies has the Universal Default Clause noted in their disclosure - and most of them do - this clause states that they have the right to penalize a consumer with an increased interest rate if a late payment is reported to ANY other creditor, including utilities, car loans, and home loans. Better believe that credit card companies with this clause sit back and wait for the opportunity to increase the interest rate...and continually monitor their customer's credit reports, just waiting for the opportunity to do so.

And just when you thought it couldn't get any worse...

...it's not just late payments that trigger the Universal Default Clause; interest rates can be increased if a consumer exceeds a credit limit, bounces a check, or applies for additional credit. All of these signs may be read by the credit card company that a consumer is "high risk". The penalty? You guessed it - a higher interest rate.

Further, if an offer seems too good to be true, it probably is. This popular phrase rings true for many consumers that sign up for zero percent interest offers. Although these offers sound great and every consumer goes in with the best intentions of paying the balance in full before the zero percent interest term expires, the vast majority of people do not pay off the bill before the offer ends. And what consumers do not realize is if the account is not paid in full, the creditor does not start charging interest from the date the deal expires, the creditor goes back to the day the purchase was made and charges interest on the balance for the entire period.

Or - back to the Universal Default Clause, if you are late on another credit card payment during the introductory time period with the zero percent rate offer - the card issuer of that sweet deal could prematurely break it off and force a steamed up interest rate, retroactively charged back to the original date of purchase. That smoldering rate could mean paying double or even triple for the purchased merchandise.

Try your best to only charge what you can afford to pay off in full, on a monthly basis.

Beyond being just good advice, here's another little known credit card fact that could cost you.
If you charge and then pay the account in full, there is no interest due. But if you charge and choose to only pay half of the bill when it arrives, guess what - you get charged interest not just on the remaining balance, but for the entire charged balance, regardless of your paying half the bill in full. If the bill is not paid in full the following month, this game continues until the account is paid in full.

So although the fine print can be a real snoozer to read, taking the time to become familiar with credit card terms and conditions can save you some serious dollars. Review your current credit card terms and conditions and take the time to find a credit card company that truly matches your spending habits and needs. You will save yourself a few sleepless nights - and more importantly, save yourself a lot of money too!

Forecast, Week of April 9th

2007-04-08T08:14:00.000-05:00

What's on the docket this week? A few reports of note - and one of the more interesting items on the calendar will be the Federal Reserve Board's "Meeting Minutes" from the March 21st meeting, due for release this Wednesday afternoon. Why so intriguing? Because unlike the carefully crafted Policy Statement released just following the actual Fed Meeting, the Meeting Minutes is like the Fed "unplugged"...where all the commentary and discussion between Fed members is unbridled and unleashed to the public. Not all members vote at each meeting - but they all have a voice. Was the decision to keep the Fed Funds Rate in a paused position unanimous? Or did non-voting Fed President Jeffrey "the Dissenter" Lacker raise his voice in favor of more hikes? We'll all find out later this week - and the comments could be market movers, so stay tuned.

The chart below shows that Bond pricing has been skidding lower of late, meaning home loan rates have worsened right along with them. And the next "floor of support" to catch them is lower still - indicating that Bond pricing and home loan rates will likely get a bit worse before they get better.

The market may see some added volatility early in the week, as last Friday's trading session was condensed into just a few hours of trading before a market close in observance of Good Friday. Stocks should improve off the strong Jobs Report, which could hurt bonds and home loan rates.

Reality. TV.

2007-04-08T08:11:00.000-05:00

"TELEVISION IS NOT REAL LIFE. IN REAL LIFE, PEOPLE ACTUALLY HAVE TO LEAVE THE COFFEE SHOP, AND GO TO JOBS." Bill Gates

Right on Bill...and last Friday, the Department of Labor reported that another 180,000 Americans left the coffee shops and found jobs during the month of March, with another 32,000 jobs added to prior month's reports. The Unemployment Rate dropped to 4.4%, matching the lowest rate in six years - and Average Hourly Earnings were up as well, rising to $17.22 per hour. So it was all good news for the US job market...but bad news for home loan rates, since a strong labor market can lead to inflation, the arch-enemy of Bonds and home loan rates. On the release, Bond prices slipped lower, causing home loan rates to rise slightly across the board.

And the Fed was watching too...remember that the pop in new job formations and stronger wages creates that risk of further inflation ahead, and this news comes on the heels of a higher read on inflation from the Fed's most closely watched indicator - The Personal Consumption Expenditure Index. So, despite the media and many "so called" experts saying the Fed has to cut rates soon - don't expect a cut in the near future, as the Fed's main priority is controlling inflation.

Some great things about FHA Loans

2007-04-04T14:37:00.000-05:00

NO Minimum FICO score is required
There are NO “non-allowables” for sellers any longer
FHA now uses the same appraisal forms as Freddie and Fannie
Buyer CAN currently be in chapter 13 BANKRUPTCY
Sales Price up to $206,000 (and should be up to $275,000 by year end)
It is an assumable loan (important when rates go to 8% and they are at 6%).
There are NO prepayment penalties (unlike many 80/20 High Risk loans)
Can have federal tax liens and not have to pay them off
Can have unpaid collections
Experienced Loss Mitigation staff dedicated to help homeowners avoid foreclosure

…And all this with a market interest rate!

BASEBALL BEEN BERRY, BERRY GOOD TO ME...

2007-04-02T15:17:00.000-05:00

BASEBALL BEEN BERRY, BERRY GOOD TO ME..." Garrett Morris as Chico Escuela on Saturday Night Live

And as the first pitch of the 2007 baseball season is thrown, Bond Players could be saying the same thing about Fed Chairman Ben Bernanke. Big Ben halted the long string of rate hikes even though inflation is a bit higher than the Fed wants, so Ben has "played ball" by patiently waiting for inflation to settle down to the desired range between 1% - 2%. But while "Ben-Ball" has been "berry berry" good to bonds so far, all that may change after last week's economic data.

The Fed closely watches the rate of inflation and uses the Core Personal Consumption Expenditure (PCE) Index as its favorite gauge. And last week the Fed was thrown a curve, as the PCE increased more than expected during February for the largest monthly spike since August. As previously mentioned, the Fed wants inflation no higher than 2%, and the annual rate of PCE just rose to 2.4% from the previous reading of 2.3%.

Also of note, the Personal Savings Rate remains negative at -1.2%. It appears that achieving a meaningful amount of savings for many Americans is as tough as hitting a pitch from Mariano Rivera. Mortgage Bonds worsened during the week, causing Home Loan Rates to increase modestly.

SLOWER BASE RUNNERS ARE NOT THE ONLY ONES CAUGHT STEALING - THE BIGGEST CREDIT CARD SCAM IN HISTORY WAS UNCOVERED - AND YOU COULD HOLD ONE OF THE 45 MILLION CREDIT CARD NUMBERS STOLEN. LEARN HOW TO PROTECT YOURSELF IN THIS WEEK'S MORTGAGE MARKET VIEW.

The Secrets To Purchasing A HUD Home

2007-03-31T16:10:00.000-05:00

HUD is the largest owner of single family homes in the US and is trying to sell them as quickly as possibly.

The Government is the listing agent's client, you are just another buyer, and they can always sell the property to someone else.

Its HUD’s way or the highway.

You purchase the property as is, with no repairs and no guaranties. However, Countrywide does offer, if disclosed by HUD, 203k loans, which roll in repairs into the loan.

There is a minimum price HUD will consider on all properties (typically, 92% of offer price)

You must have a Real Estate Agent place a HUD bid. The agent must have a HUD NAID number that is currently registered and active.

You must close within the allotted time frame. If not you risk having to pay extra extension fees
The biggest mistakes buyers make is not using a good lender that has experience closing HUD property loans or they don't meet HUD requirements.

First Time Home Buyer's: Free Money Available!

2007-03-31T16:03:00.000-05:00

The list below, are cities in the DFW area that currently offer grant programs (free money!!!) for the first time home buyer.

First Time Home Buyer: Money Available Currently*

Arlington
Balch Springs
Hutchins
Cedar Hill (Dallas County Part)
Lancaster
Cockrell Hill
McKinney
Coppell (Dallas County Part)
Plano
Dallas
Rowlett (Dallas County Part)
Farmers Branch
Sachse
Frisco
Seagoville
Garland
University Park
Glenn Heights (Dallas County Part)
Wilmer

*subject to change

First Time Home Buyer: Money Coming Soon!

Allen
Carrollton (Dallas County Part)
Duncanville
Grand Prairie (Dallas County Part)
Irving
Mesquite
Richardson (Dallas County Part)

First Time Home Buyer!
There is also money available for anywhere in Texas provided that the buyer’s total household income is less than $39,900 and they have not owned a home for over three years.

Teachers!
Money is also available for anywhere in Texas provided that the buyer’s household income for a family of two is a maximum of $66,000 and for a family of three the maximum is $76,000.

My goal is to be a part of your team as well as a resource of information to realize your dream of owning a home. Call today! (214) 244-3146

HOMESTEAD EXEMPTIONS

2007-03-29T11:31:00.000-05:00

Reduce your taxes by utilizing "Homestead Exemptions" through your appraisal district, you can reduce a portion of property taxes assessed against your home. The best part...It's simple!

For example, visit http://www.dallascad.org and click "resources and forms" then choose "application for residential homestead exemption" Print. Fill out and sign. Mail in.

***DO NOT FALL FOR SCHEMES THAT ADVERTISE THAT A 3RD PARTY WILL SAVE YOU TIME AND MONEY BY DOING IT FOR YOU FOR $30, $40, OR EVEN $50.

THIS IS A TOTALLY FREE PROCESS AND SHOULDN'T COST YOU ANYMORE THAN THE PRICE OF A STAMP!!!

Appraisal District Websites:

Denton County http://www.dentoncad.org/
Dallas County http://www.dallascad.org/
Tarrant County http://www.tad.org/
Collin County http://www.collincad.org/

How To Buy A HUD

2007-03-26T14:37:00.000-05:00

With all the HUD foreclosures in the area, there have been multiple phone calls from folks who are not familiar with buying foreclosed properties. In my continual quest to provide you with information, I hope that you find the following helpful:

To find foreclosed properties:

www.southwestalliance.com

(HUD homes only)

www.homesales.gov

(Consolidated listing of foreclosures available from HUD, VA, and USDA)

Helpful HUD Tips:

THREE TYPES OF HUD HOMES

An independent FHA-approved appraisal and an inspection are generally completed without two weeks of acquisition of the property, and the reports are sent to the Regional Office. A Property Condition Report (PCR) is then listed and available in the bidding system for buyers and brokers to download.

Important: The PCR should not be used in place of an inspection performed by a licensed inspector.

A Disposition Plan is determined, and the house is initially listed at the appraised value, according to the FHA financing category that is appropriate, given the current condition of the property. It is important to understand the listing codes and how financing is affected.

Insurable (IN)- Properties listed in this category appear to meet FHA 203(b) financing requirements. No obvious repairs are necessary for HUD to insure an FHA loan to a qualified Purchaser.

Insurable with Repair Escrow (IE)- Properties listed in this category are eligible for a 203(b) FHA loan with required “minimum property standard” (MPS) repairs totaling less than $5000 to be made by the Purchaser, financed by the FHA lender. If a 203(b) FHA is the financing, the repair escrow must be use for the needed work specified in the listing. In completing the Sales Contract (HUD-9548), the escrow amount is NOT deducted from the net to HUD to derive the amount that will be entered on line #7, NOR is it added to line #3, the purchase price. There is a separate line in Item #4 for the repair escrow amount to be noted.

The lender making the new FHA 203 (b) loan establishes an escrow account for the amount of the repairs. The amount given with the listing includes a 10% contingency. After close of escrow, the lender will inspect work as it is completed on the house and distribute the repair monies as appropriate within ninety (90) days. The cost of the repairs are included in the loan amount and repaid by the borrower as part of the house payment. Any funds in the escrow account not used for the repairs will reduce the unpaid principal balance of the loan.

Note that the repair escrow only applies to FHA 203(b) financing. If non-FHA financing is used, or if a cash purchase is made for an IE property, the repair escrow does not apply.

Uninsurable (UI)- Properties listed UI, uninsurable, need more extensive repairs after close of escrow and are deemed not eligible for FHA mortgage insurance in their “as-is” condition. Cash, or other financing not involving FHA, is often used to purchase UI properties. However, a special acquisition and rehabilitation FHA loan program called 203(k) is frequently an excellent source of financing for homes in the owner-occupied category.

Note on FHA 203(k) Financing: UI properties are generally eligible for the FHA 203(k) loan program (most condos are excluded, unless specifically noted otherwise). Also, any IN or IE property may be purchased subject to 203(k) financing, instead of 203(b), if the house and the owner-occupant Purchaser’s credit justify making improvements in excess of $5,000. Through this program, their lender can provide funds for rehabilitation along with the purchase mortgage.

Did You Know? More HUD Home Tips

v There are currently 3000 Foreclosures in D/FW per month (that is 100 per day). Dallas is currently #5 in the nation for foreclosures.

v FHA loans (when purchasing a HUD Home)- Can ONLY use the HUD appraisal. Do NOT bid above the listed price unless the buyer wants to pay the difference out of pocket.

v FHA Insured with Escrows- Need bids/Invoices prior to closing. Escrow repair $ is rolled into loan.

v NO DAPS. Can use FTHB programs, but not recommended! Trust me J

v VA- Watch about repairs. If VA appraisal calls for repairs, HUD will not allow them to be fixed prior to closing so your buyer is in a “Catch 22” situation.

v Conventional – Must have a new appraisal. Can ask original appraiser to do so, but will cost.

v Time Line of Purchasing and papers to the title company- 45 days max from time HUD signed on the contract. Lender must have papers at the title company 10 days at the title company

v Investors Buying Uninsured- Will lose earnest money if back out.

Subprime Loan Meltdown Engulfs Even Borrowers With Good Credit.

2007-03-23T11:52:00.002-05:00

Okay! I promise that I will not bombard you with gloom and doom, but this article that came across the wire this morning was very good at explaining the changes that we are seeing in the Alt A (the loans between A and subprime).

The subprime credit crunch is beginning to ensnare even borrowers with good credit.
Lenders are increasingly refusing to lend to homebuyers who can't make a down payment of more than 5 percent, especially if they won't document their income. Until recently such borrowers qualified for so-called Alt A mortgages, which rank between prime and subprime in terms of risk. Last year the category accounted for about 20 percent of the $3 trillion of U.S. mortgages, about the same as subprime loans, according to Credit Suisse Group.

``It's going to be very difficult, if not impossible, to do a no-money-down loan at any credit score,'' said Alex Gemici, president of Parsippany, New Jersey-based mortgage bank Montgomery Mortgage Capital Corp. Companies that buy the loans ``are all saying if they haven't eliminated them yet, they'll eliminate them shortly.''

Tighter lending standards may slash subprime mortgage sales in half this year and Alt A mortgages by a quarter, according to Ivy Zelman, a Credit Suisse analyst in New York who covers homebuilders. The new requirements will force some prospective homebuyers to save more money for a down payment or risk being denied credit.

Pulling Back
Bear Stearns Cos., General Electric Co.'s WMC Mortgage, Countrywide Financial Corp., IndyMac Bancorp Inc., Goldman Sachs Group Inc., Lehman Brothers Holdings Inc. and Credit Suisse have all said in the last two weeks they're pulling back from buying Alt A mortgages sold with no down payment or in a refinancing of the house's entire value. Such companies facilitate the mortgage market by buying loans and repackaging them for sale as bonds to buyers such as insurers and hedge funds.

``We've been warned,'' said Cheryl Hand, manager of Prudential New Jersey Properties' office in Manalapan, New Jersey. She said she's hoping a client of her realty brokerage who's been approved to buy a home with nothing down won't have the loan quashed before the closing.
Mortgages are categorized as Alt A when they fall just short of the typical standards of Fannie Mae and Freddie Mac, the two largest U.S. mortgage companies. Besides some loans requiring no down payment or proof of income, they are often made to buy a second home, a rental unit or to speculate on real estate. Also often falling into the category are loans that are ``option'' adjustable-rate mortgages, whose minimum payments can fail to cover the interest owed.

Defaults Rising
Consumers borrowed 100 percent of their home's value on about 18 percent of Alt A loans made last year, according to Bear Stearns, the largest mortgage-bond underwriter. Another 16 percent had loan-to-value ratios above 90 percent as well as limited documentation, they say. The category comprised about 5 percent of new loans in 2002, according to Credit Suisse.
Late payments of at least 60 days and defaults on Alt A mortgages have risen about as fast as on subprime ones, to about 2.4 percent, according to bond analysts at UBS AG. Loans in the category made to borrowers with low credit scores, equity and documentation are doing about as badly as subprime loans, according to Citigroup Inc. and Bear Stearns analysts.
Rapid credit tightening that's ``been isolated to the subprime world has really migrated'' in the past two weeks to Alt A offerings that involve borrowing nearly all of a home's worth, said Brian Simon, senior vice president at Mount Laurel, New Jersey-based mortgage bank Freedom Mortgage Corp. ``We're just hopeful it will settle down soon.''

California Prices
A borrower would have to come up with $23,750 to make a 5 percent down payment on a typical home in California, based on a $472,000 median price estimated by DataQuick Information Systems in La Jolla, California. She'd have to show enough income to pay $2,730.87 a month with a 30-year fixed-rate mortgage at 6.15 percent.

``It doesn't help somebody to get into a home when they can't afford to make the payments and continue living there,'' said Ann McGinley, owner of Action Mortgage, a brokerage in Santa Rosa, California, that's turned away a ``few buyers'' with good credit who may have been able to get loans last year.

While loans issued only on the basis of the borrower's ``stated'' income can be abused, they're appropriate for a divorcee with alimony who ``doesn't want to show an underwriter her paperwork because it's private'' or a borrower with a reliable roommate, she said. ``I personally have made a couple of real estate agents angry by advising people to not buy.''

Limits Welcomed
Some lenders say it's high time that buyers are discouraged from buying real estate with no money down.

``Could we have a little skin in the game from the borrower, please,'' said Rick Soukoulis, chief executive officer at LoanCity, a San Jose, California-based lender that stopped making mortgages last week to customers who want to borrow more than 95 percent of the value of their house due to the shrinking secondary market. ``Something to lose if you go into default?'' LoanCity, which made about $6 billion in mortgages last year, went out of business on March 20.
The slump in subprime loans has ``drastically eroded'' appetite for bonds backed by Alt A loans, according to a March 9 report by Credit Suisse. The extra yield that investors typically demand on the parts of the securitizations with the lowest investment-grade ratings have risen to 3.50 percentage points over the one-month London interbank offered rate from 2.15 percentage points in September, according to Bear Stearns.

Resale Woes
``If you couldn't sell something, you wouldn't do it either,'' UBS analyst David Liu in New York said. Part of the problem is falling demand for ``piggyback'' home-equity loans used to make down payments, he said.

New York-based Citigroup will no longer buy home-equity loans made to borrowers who won't prove their incomes and want more than 95 percent of their home's value, according to e-mails from salespeople. Mark Rogers, a spokesman, declined to comment.

New York-based Bear Stearns, the third-largest Alt A lender according to newsletter National Mortgage News, last week stopped buying such loans without down payments of at least 5 percent. For borrowers not fully documenting incomes or assets, the maximum loan-to-value ratio will be 90 percent.

Bear Stearns' EMC Mortgage unit told loan sellers of the changes on March 13, giving them a day's notice. On Feb. 26, EMC said it would start requiring down payments of only 5 percent in the low-documentation category, giving sellers until March 12 to submit loans under the old standards. On March 1, the deadline moved to March 6. EMC didn't change ``full documentation'' programs then.

People with poor or limited credit records or high debt burdens can take out only subprime mortgages, and typically pay rates at least two or three percentage points above prime loans. Subprime lenders have been increasingly raising their standards since mid-2006, and started cutting out nothing-down lending in late January, Montgomery's Gemici said. People who qualify for prime mortgages don't experience any trouble getting a loan.

Lower Standards
Bear Stearns will finance 25 percent to 30 percent fewer non-prime mortgages this year as it tightens credit, Chief Financial Officer Sam Molinaro said on the company's earnings call last week.

``Last year, we did about 50 percent less in subprime than we did the year before,'' Mary Haggerty, co-head of Bear Stearns' mortgage finance department, said in an interview, adding that it has been tightening Alt A standards since December. ``We always try to be ahead of the market.''

Countrywide Financial, the nation's top home lender, this month stopped making any loans with down payments of less than 5 percent when borrowers are ``stating'' both income and assets.
Since they have good credit, most borrowers able to take out loans with little down and high monthly payments relative to their pay or potentially rising ones knew the risks, Countrywide Financial CEO Angelo Mozilo said in an interview.

``People are adults and made choices in their lives because they wanted to own a home of their own,'' Mozilo said. ``America's great because people can make those decisions for themselves. The complaints about the loans only came when the opportunity for enrichment was gone'' because home prices flattened out.

By Jody Shenn

Recent Changes in Lending.

2007-03-23T11:52:00.001-05:00

The last couple of weeks has been really crazy in the mortgage industry, but I did not want you to think that the mortgage lending world has come to an end. In my quest to keep you updated, I wanted to clarify what we are seeing in the industry.

Subprime Companies- These companies will continue to tighten their guidelines. No longer will we be see anyone who "fogs a mirror" get a loan. Most 100% financing has gone away in the subprime world in the past 30 days, unless the buyer has a 640 credit score or higher, going full documentation (i.e., paystubs, w2s, etc). It will become harder and harder to find stated subprime without 5-10% down.

Alt A- (These are the "boutique" type of loans, i.e., stated income/stated assets, no doc, etc). Because of the market turn and the foreclosures, we will see these types of programs become very high credit score driven. We are already seeing the No Doc loans at 100% disappear rapidly and the guidelines for stated assets become extremely strict.

FHA- We will see FHA become much more strong in our industry due to the subprime industry decline. This is not a bad thing because many of those buyers could have been FHA buyers anyway, but the loan officer did not understand how to work with FHA and it was easier to put them in subprime. What we will see is inexperienced loan officers trying to work FHA and really messing them up. Make certain that you trust a lender who knows FHA.

Freddie/Fannie- We have not seen yet a lot of changes in the A world other than the 2nd liens have become expensive and more strict on their guidelines. I feeling is that we will see a tightening in the DU and LP approvals (Fannie Mae and Freddie Macs auto-approval services) very quickly.
*Source: Linda Davidson of The Davidson Group at Service 1st Mortgage (972) 278-3400
www.davidsongroup.net

Remodel With Care*

2007-03-08T09:30:00.000-06:00

Some remodeling jobs certainly pay off better than others, according to the 2003 Cost vs. Value Report published by Remodeling magazine. Adding a 300-square-foot deck might add more value to a home than the cost of the job, while other improvements may not be worth the trouble.

Overall, midrange bathroom renovations paid off well for homeowners (90% of costs recouped), while kitchen remodels paid for about 75% of their costs. Whatever project you may embark on, stay within the scale and value of the neighborhood. Nobody wants the most expensive house on the block, nor should they shoehorn a five-bedroom house on a street of bungalows. Also, stay true to the style of your home. If a future sale is even remotely in your plans, avoid renovations that compromise a home’s selling points. For example, a two-car garage may indeed be the perfect size for a kids’ playroom, but is it worth losing the selling power of the garage?

*Soure: TexarRealtors.com

One Buyer Away From Retirement!

2007-01-01T08:00:00.000-06:00

In Texas, everything is big. Even our homes! If you know the super-wealthy you can help me achieve the goal of an early retirement. This truly magnificent estate is located here in the Dallas/Ft. Worth area.

Priced at just under $60,000,000 this exquisite estate home can be yours. The magnificent Champ d'Or was inspired by Vaux-le-Vicomte, a grand chateau near Paris, France. Located just 15 minutes north of DFW International Airport near Lake Lewisville, the 48,000 sq. ft. main house sits on 140 acres, which includes a private lake, pool, pool house, tennis court and a 16,000 sf contemporary home. The attention to detail will impress even the most discerning taste.

Complete with an exercise room, gameroom, library,
study, media and music room. This fine home also features a sauna/steam room, second master and
solarium and sunroom. Plus a wine cellar and extra storage space.

Interior features include: bay windows, decorative lighting, dry and wet bar, elevator, intercom, multiple staircases, paneling, sound system wiring, vaulted ceilings, custom wood work, wainscoting, water softener, custom window coverings, and last but certainly not least, the home is cable TV ready!

The exterior of the home offer the owner a private balcony, covered porch(es), guest quarters,
lighting system, open and covered patios, sprinkler system, and yes, there are tennis courts.

With over 48,000 sqaure feet sitting on over 100 acres, horses are welcome and you'll have plenty of room for play.

The estate features a 9 car garage with iron fences and an automatic gate, indoor pool area and separate accommodations for when the in-laws are visiting.

With the right financing and good credit you can get your monthly payment in the neighborhood of $60,000 a month. A pre-approval letter would be appreciated with your offer.

As far as my retirement goes. As a real estate agent that collects a mere 3% on the buyer's side, my commission on this grand home would be roughly 1.8 million dollars. And with the right investing...I am one buyer away from retirement!

If you or anyone you know is interested in purchasing this marvelous estate, please don't hesitate to call. Seriously, I want to talk to you...Really I do!!

Allow Me To Introduce Myself...

2006-12-07T23:44:00.000-06:00

My name is Justin Huggins and I am the buyers agent for the Chris Arnold Premier Group at Keller Williams Realty in Grand Prairie. What exactly is a buyers agent? Well, just that. I work only with buyers. That doesn't mean we don't sell real estate, because we sell lots of it! We currently have over 30 homes in our inventory and we add to that each and every day.

What sets me apart from most other agents is my knowledge of homes. As a licensed real estate agent and a certified professional real estate inspector through AHIT, American Home Inspectors Training Institute, I am able to offer a deeper understanding of the buying aspects of real estate as well as the integrity of the property itself. It is that knowledge that allows me to capture many of the issues that may arise before a real estate transaction, not during or after. I have a regid schedule of training that place myself on that allows me to improve my communication and negotiation skills on a regular basis. It is those skills that are such a valuable tools for my clients.

Those who work with me know that I am always responsive to their needs. Routinely, my clients continue to refer their family, friends, and co-workers because they have seen firsthand the unparalleled way in which our team sells property and I expertly find just the right home for my buyers. I can save my clients money by using competitive lenders, knowing the aspects of an inpection and what repairs are vital, spot the rights details to make a good negotiation, and stand strong behind the desires of my clients.

Our clients know that there is no better metroplex Realtor group. Once the transaction is complete, I continue to be available to my clients for any needs or questions they have. Our group prides themselves on having clients for life and we would not have it any other way.

Visit our main website today to see what we can do for you. It doesn't matter if you're buying or selling, we offer the best in service. You'll find us at http://www.chrisarnoldpremier.com

Roses are red, Lumber is ...blue???

2006-09-27T12:43:00.000-05:00

That's right! There is a new building material that is sure to have home owners and builders, seeing less red and more green. It's called BluWood and it is the creation of WoodSmart Solutions of Boca Raton, Florida.

What makes BluWood the next best thing? Well for one, the worst thing you can do to your home is add water. If that isn't enough, the second worst thing you can do to your home is add wood destroying insects. Those two combinations are a receipe for destruction on any home. BluWood helps to eliminate both!

BluWood works in two ways. First, using the technology of "Infusion-Film" to form a water-repellent semi vapor permeable film that strengthens the wood fibers to provide moisture absorption. BluWood is also formulated to resist mold growth on the cured surface of the film.

The second way BluWood works is through the use of "Perfect Barrier DOT Wood Preservative," a proven fungicide and insecticide that gives protection from rot fungi and wood ingesting insects, including termites.

"Mold requires three things to grow: organic matter (such as wood), mold spores and water. Mold is everywhere, it always has been . . . . In a new building, mold will start to show up within months."

Dr. Mani Skaria, Ph.D
Professor
Texas A&M University Kingsville Citrus Center

BluWood is an application to lumber being used. It is something to consider when building the the biggest investment of your life. Not to mention the added protection this product gives to your investment. Be sure to visit BluWood's website for more information.

*Source, Information from the BluWood website.

DIY-Staging Tips For Sellers

2006-08-12T09:24:00.000-05:00

Do ...

Pick up recent home-decorating magazines. If you’re not up to speed on current decorating trends, magazines will help you familiarize yourself with the latest in interior design styles. Flag pages with low-cost ideas that will make homes look more in tune with today’s styles, and share these magazines and ideas with your sellers.

Give a second opinion. Explain to your seller how difficult it is for a homeowner to be objective. You can provide a second pair of eyes to help accent the best and edit the worst in the client’s home. But let the seller know to prepare for some constructive criticism. The point is to hear the shortcomings before putting the home on the market, not as feedback from prospective buyers who decide to look elsewhere. Go room-by-room with a worksheet and take notes. Depending on how much time is available for an update or a makeover, you can help the homeowner prioritize and figure out what will bring the biggest return. If possible, perform this review well before you put the house on the market.

Stage a home office if one doesn’t yet exist. They’re not a trend; they’re required for homebuyers these days. Many people now work from home part- or full-time or want a space where they can organize their life and park a computer. Find an extra bedroom, walk-in closet, or an unused corner and convert it into a home office. Make sure there are convenient connections for electricity, telephone, and cable.

Focus on living spaces. These areas are where the majority of homebuyers will spend their time. Reduce the amount of furniture and accessories in every room. Explain to sellers that less is more; buyers are looking to purchase real estate, not personal furniture and knickknacks. Place a side table and a floor lamp next to a comfortable chair as a reading corner. Move sofas and coffee tables away from walls for a designer look. Use area rugs to anchor furniture groupings on bare tile and wood floors.

Living spaces should have matching table lamps. Scale way back on family photos. Add green plants to the room. Place groupings of candles and clear glass bowls filled with natural potpourri on side and coffee tables. Substantial wicker baskets can organize magazines, remote controls, and toys.

Clean up the kitchen. The seller need not undergo a major kitchen remodel to make this room more appealing to buyers. Put away in a handy drawer all dish towels and rags. Create cleaner visual lines and open up counter space by removing recipe boxes and reducing caddies with cooking utensils, cooking machines, and cookbooks by two-thirds. For a quick update, put new hardware on cabinets. Clean off every magnet, schedule, and art project from the refrigerator. Remove throw rugs scattered around the kitchen. Clean off windowsills to open up exterior views.

Organize cabinets with clear containers. If you can’t see the back wall of a cabinet, buyers will think the kitchen doesn’t have enough storage space. (Ditto for closets.) Keep a variety of fresh fruit in a glass bowl on the counter. Edit family bulletin boards. Remove old curtains and install new wood blinds on windows.

Keep it coordinated in bedrooms and bathrooms. Often overlooked in the frenzy to get a home on the market, these spaces can make or break a home. A matching set with a bed skirt, bedspread, pillow covers, and blinds can make a big difference. So will a new shower curtain and separate liner. (The liner must be washed if mold develops.) Add complete sets of towels that coordinate with the new shower curtain. Clear all cosmetics off the vanity.

If the bathroom includes an over-the-toilet cabinet, the seller may want to consider removing it and placing a piece of artwork in its place. Stress with your sellers the importance of keeping items in the “too much information” category out of view.

A king-size bed in a small room makes the entire room seem small, so it’s best to switch it out for a smaller bed. Dressers should be cleared off. Make sure the bedroom receives the maximum natural light. Eliminate wall and door hooks for clothes, and install closet organizers in closets. Let your clients know that buyers might look under the bed, so no surprises please.

Make a great first impression. Paint the front door, polish the hardware, and illuminate the entry area and house numbers. A simple console table with a mirror over it makes a nice entranceway. Make sure this space is well-lit day or night. Place adhesive under rugs so buyers don’t trip or slide.

Don’t ...

Decorate with inexpensive silk flowers. Silk flowers that are past their time, inappropriate for the season, or inexpertly thrown together distract buyers. Throw them out.

Forget Fido’s bowl. An unhealthy-looking pet-food bowl, watering station, or litter box turns people off quickly. Plus, a message that the homeowner doesn’t take great care of his beloved pet suggests that he doesn’t look after his house, either.

Overlook window coverings. Buyers today think less is more in window fashion. They want the most light and the least embellishment on windows. That means no layered treatments with sheer panels.

Use low-wattage light bulbs. Dark, dim rooms are unappealing to homebuyers. They want to see what they might buy. Replace all burned-out bulbs and put in the highest manufacturer-recommended wattages in all fixtures.

Think that everyone loves wallpaper. Few people share the same taste in instant decorator finishes. If the wallpaper is more than three years old, take it down and paint the walls a neutral color.

Paint with commitment colors. If you’ve determined the seller needs to paint (and the seller agrees), strongly discourage bold “commitment” colors. Commitment colors are those that people either love or hate. It can be difficult for buyers to imagine their style when all they see is a room overwhelmed by a color they can’t stand.

Confuse cleaning with staging. Cleaning is what you do before staging. Everything should shimmer and shine, and don’t forget the windows.

By knowing these basic strategies, you can help your sellers understand how to invest a little time and not too much money that will pay big dividends in the interest they generate for their home.

*Source: Texas Association of Realtors, August 2006.

Any Skeleton's In Your Credit Closet?

2006-08-03T18:14:00.000-05:00

Entering into a real estate transaction can sometimes open a Pandora’s Box. This isn’t meant to scare you out of buying a piece of property. This is meant to give you information to better arm yourself against one of two possible situations that we hope never happen, but can. These two scenario’s have to do with your personal credit.

Let me play out the first scenario, it is more common than you might think. You’re shopping for a house, you find the perfect place and you’re ready to make your offer. You visit your bank to get pre-qualified and surprise, surprise you find a skeleton in your credit closet. Only this skeleton is not a phone bill that you forgot to pay when you were in college. This skeleton was created by someone else, someone you don’t even know and most likely, they don’t even know you-nor do they care. You have just found out that you have been a victim of identity theft and it’s keeping you from buying the house of your dreams.

The second scenario is common and typically our own fault, even if we weren’t aware it was our own doing. That is simply neglecting our own credit. Slow pays and no pays will adversely affect your credit and the worst part about it, you may no even be aware of the effects until years after the initial “oops!”

When considering the purchase of a new home save yourself and your Realtor a headache and run your own credit. Know for yourself what others will eventually learn about you. Doing this could also help you explain any items that might raise some concern with possible lenders, not to mention, you’ll know what your score is and won’t have to rely on someone else’s interpretation.

Visit the website of the three major credit reporting agencies (Experian, Equifax, and TransUnion) for more information about your credit score. Also visit www.flippingfrenzy.com for information about mortgage fraud and how you can protect yourself from unscrupulous lenders.

Welcome!

2006-07-31T15:44:00.000-05:00

Welcome to "Your KEY to Real Estate!"

The purspose of this blog is simple, to be a "KEY" for you in real estate. I want this blog to help answer questions about real estate transactions, whether they are commerical, residential, or investments. It is my vision to see "Your KEY to Real Estate" being used as a tool for those who are actively participating in the real estate market in Texas and elsewhere.

The real estate market is much like the stock market. Most of us wouldn't go buy stocks on a whim, why should real estate be any different? Real Estate in Texas is a highly regulated area of commerce, it's important to be informed with the changes in laws and regulations. Selling and/or buying property is tricky, it's important to know the trends that Realtors are using everyday. Last, since real estate changes almost as frequently as the Texas weather, it's important to know the lastest news.

As a visitor and hopefully a participant to this blog, you'll see items posted from such sources as the National Association of Realtors, the Texas Associations of Realtors, local boards, publications, my own experience as a Realtor in the Dallas/Ft. Worth area. What you won't find a painfully annoying advertisments, marketing hooplah from every Realtor in the state, and listings. Yes, listings. If you want to see listings, find a local Realtor. If you like what you see hear and you'd be interested in my services, please contact me outside of this arena and I'd be more than happy to speak with you.

Thank you and enjoy!

Six things you didn’t know about residential service contracts

2006-07-31T14:42:00.000-05:00

Residential service contracts—also called “home warranties”—have become a common part of many real estate transactions. Before you encourage your sellers to offer one as part of the sale or advise your buyers to purchase one, here are a few things you may not know about residential service contracts.

1. Pre-existing conditions are not covered. Residential service contracts don’t cover defects present at the time of the contract’s purchase. If your buyer’s inspector finds a leak in the roof, make sure you tell your client that the residential service contract included by the seller won’t pay to have it fixed.

2. Homeowners shouldn’t try to fix covered items. Most service companies won’t cover improperly modified or installed items or those that have been damaged by an attempted repair.

3. Residential service companies are regulated in Texas. Under Chapter 1303 of the Texas Occupations Code, the Texas Real Estate Commission licenses and regulates companies that offer residential service contracts in the state. A current list of companies licensed to do business in Texas may be found at www.trec.state.tx.us/licenses/rsc_licensed.asp. Home warranties on new construction, however, are usually handled by risk-retention groups and are not regulated by any state agency.

4. Residential service contracts are optional. A seller cannot
condition the sale of his property on the buyer’s purchase of a home warranty.

5. A homeowner can purchase a residential service contract at any time. Service companies prefer to sell their product to homebuyers at closing because most buyers have a home inspected prior to purchase—and pre-exisiting conditions are not covered under their contracts. However, if your buyers aren’t ready to purchase a warranty now, most companies will sell one to them a year or two down the road.

6. The home warranty’s terms must be clear. By law, the service contract must be understandable and free from misleading language. The systems and appliances covered and not covered, the length of the contract, and the charge for service visits should be spelled out clearly. Advise your clients to make sure they carefully read and understand a home warranty’s terms before they agree to it, so they aren’t surprised in two months when they learn that their broken hot tub isn’t covered.

*source Texas Association of Realtors, Texas Realtor-July 2006