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Sunday, January 31, 2010

Future of the Home Buying Market in Lead Air Polluted Frisco

The Frisco Real-Estate market has enjoyed national rankings in home purchase ratings and new home builds in the last 10 years. As a Frisco homeowner, I think most other Frisco residents will agree, we hope that the return of the economy will soon bring big gains in our home values as well. On the contrary, if Frisco isn't taking priority in the cities air pollution, national news may read a completely different story in years to come in which could have a very negative affect on our values moving into the future. (It's only fitting that I write this Blog entry in GREEN...things that make ya wanna say hmmmm?)

At the Frisco Chamber of Commerce years ago, when I was building my mortgage business, I met today's City Council Member, Matt Lafata. When I was concerned of my family's health in relation to the lead pollution so publicized in the Dallas Morning News recently, I contacted Matt for his thoughts. I was very pleased to receive his response. Matt also is worried of the effects and urges Frisconians to stay on top of this issue and demand the city to stay on top of it as well. You can see Matt's Blog on this by clicking here. From the beginning where time spent together at the Frisco Chamber during the time I was building my mortgage business
In my Activerain Real-Estate network, I wrote a blog with the below story:
For months now, my wife and I, residents of Frisco for over 6 years now,
have been reading about the pollution by the recycling plant near downtown
Frisco. The news is not sounding good, and I am scared to death that my
two babies, daughters 2 and 4 that were raised here, are going to have learning
issues similar to previous children that proved to have high levels of lead in
their systems.
Some of the research studies gathered regarding this topic
where thought provoking. A couple children from the same Frisco family
near downtown Frisco both had issues that could possibly be a result from the
mother transmitting lead to her babies. One daughter has had learning
disabilities attributed to her spinal meningitis and the other can't walk today
do to her spinal issues.
The citizens of Frisco, and homeowners to be in
Frisco deserve easy to reach knowledge on the future governing and real effects
of this lead pollution issue. I think that if anyone has hard evidence on
this issue, or if there is someone studied in the area in which this topic
targets, they might reflect publicly their views on this
It would be VERY heartbreaking for any family to have a child
that grows up with learning disabilities that could have been controlled from
the beginning by a better maintenance or governing of our city's pollution
levels. It hits home for me and my wife because we have two children here,
and we actually moved to Frisco because of it's attention to detail
regarding the focus and education of children.
Just a disclaimer, I am
not stating that this is a State of the City Emergency, but just wishing to hear
more educated opinions on what is going on to protect the citizens of Frisco,
and my daughters.

Please don't be afraid to voice your opinion and lets get this issue resolved sooner rather than later.

In closing, I wanted to quote Matt on a paragraph from his Blog that really brings this issue "home"...Matt said, "One source of pollution that continues to haunt Frisco and its residents however, is the Exide battery recycling plant. This plant, located just south of downtown Frisco, has been polluting the Frisco air and ground for decades. It extracts lead from old batteries and despite their best efforts in filtering systems, or whatever they do to reduce emissions, they continue to contaminate the area (and with the way the wind blows around here, who knows how far the contamination spreads)."

Saturday, January 30, 2010

Using the Owelty of Partition During a Divorce

When is an Owelty Lien used, and why can it be a better option than a Texas Equity or Texas Cashout Refinance? First, here is a couple definitions from different resources, so you can "get your hooks in" on exactly what an Owelty is? For further reference in this Blog, Texas Equity, Texas Cashout, Texas Home Equity, and Texas 50(a)(6), are all terms that can be used synonymously in this Blog for generalization purposes for the specific purpose of this Blog. There are variations of Texas Equity loans, but determination between those variations are not applicable to the specific focus here. defines "Owelty"- Noun[Anglo-French oelté equality, from Latin aequalitat- aequalitas]: a lien created or a pecuniary sum paid by order of the court to effect an equitable partition of property (as in divorce) when such a partition in kind would be impossible, impracticable, or prejudicial to one of the parties. For the laymen, that means, when parties to a divorce own a home that in which there is substantial equity, one party will often be awarded the home as their separate property and the party receiving the home in the divorce decree will be ordered to pay a cash sum to the other spouse to compensate for that spouse’s community interest in the property.

When there are other alternatives to meet a person's needs in a loan that bring a similar outcome as a Home Equity or Texas Cashout Refinance, many times those are taken. The reason can be for various reasons. To avoid having to delve in too deep about all the specific unique laws of the Texas Equity, I'll try to make a general statement that could be elaborated upon in a number of ways. Once a Texas Equity, or the legal term for it, Texas 50(a)(6), always a Texas Equity...this means, if you refinance your home or current home loan into a Texas Cashout/Texas Home Equity, any refinance you make on that loan from then on out must also fall under the Texas Cashout loan guidelines. Texas Cashout guidelines are more restrictive, and many times lender charge a bit higher interest rate for them. To see a good definition of a Texas Cashout or Texas 50 (a)(6), click here. Lastly, the state of Texas will only let you have a loan to value on your home of up to 80% when you have a Texas Home Equity, and that means you lose the opportunity to use the remaining equity if needed...contrary to many state in the U.S.

In an Owelty Lien, you can get cash/equity out of your home to pay off a spouse in the process of a divorce. You can go over an above the Texas Cashout limit of 80%, and you get the best of the best market interest rates as if you were doing a regular rate and term refinance. In addition, you can Quit Claim Deed the spouse that is moving out of the residence from the property to remove their interest in that property and remove their influence or rights on the loan attached to that property if they were on the loan.

Tuesday, January 26, 2010

203K Rehab to Purchase a Fixer Upper or Help List Your Fixer Upper

Frisco and the Surrounding Collin County home buyers should look into the FHA 203K home loan when trying to buy that short-sale or foreclosure...refinances are elgible too!!! When trying to establish the appraised value, the value will be "subject to completion". So for example: A home that has a market value of $150k because it's at the lowest end of value of it's "like" sqr footage among comparables, may get an appraisal value on the 203K loan program for $175k when it has the most upgrades and updates for the homes similar in age and square foot in it's market, even if the sale price was $150k. Now you can use that difference in $150k sale price and expected appraised value to determine the loan to value.

Maximum LTV
• Purchase: Maximum LTV is 96.50%.
• Rate/Term Refinance: Maximum LTV is 97.75%. Maximum CLTV is 100%.
HUD's $100 Down Payment homes are also eligible for this program.

Requirements for 203K purchase or 203k refinance loans below:

• All improvements must be performed by a third-party builder. Self-Help is not allowed. (builder or contractor...must be insured contractor)
• The builder’s contract must not be signed before the 5th day after the written application.
• A 10% statutory retainer must be withheld from each advance to cover any claim notices from subcontractors or suppliers. The entire retainer, representing 10% of construction costs, will be retained for 30 days after final completion. (Subcontractors and suppliers have only 30 days after completion to notify the borrower of nonpayment claims) This money is also rolled into the loan with other costs if requested by borrower, and the 10% is calculated off the amount used for fix ups and 203k specific closing fees...EXAMPLE: IF $10,000 is the amount request for fees and fix-ups, you take 10% of $10,000, which is $1,000, and roll that into the loan. If it is not used, the 10% retainer fee will be used to pay down principle of the loan.
• Subject property must be used as the primary residence...this loan IS NOT DESIGNED FOR FLIPS OR INVESTMENT PURCHASE!

Examples of eligible home repair, replacement, or improvements under the FHA 203K are listed below, however, this is not an all-inclusive list:
• Repair/replacement of roofs, gutters and downspouts.
• Repair/replacement/upgrade of existing heating, ventilation & air conditioning systems.
• Repair/replacement of plumbing and electrical systems.
• Repair/replacement of flooring.
• Minor remodeling that does not involve structural repairs, such as kitchens
• Exterior and interior painting.
• Weatherization, including storm windows and doors, insulation, weather stripping, etc.
• Purchase and installation of appliances, including free-standing ranges, refrigerators, washers and dryers, dishwashers and microwaves.
• Improvements for accessibility for persons with disabilities.
• Lead-based paint stabilization or abatement of lead-based paint hazards.
• Repair/replacement/addition of exterior decks, patios, porches.
• Basement waterproofing.
• Replacement of window and doors and exterior wall re-siding.
Most improvements are eligible provided they add value and are permanently affixed to the foundation. Improvements to detached structures and luxury items are not allowed.
Luxury items include: Swimming pools, hot tubs, tennis courts, gazebos, barbecue pits, etc. Repair work to these items is also not allowed.

For more questions regarding the 203K loan, email Brad Lynch directly at or find me on Twitter at Frisco_Mortgage

Wednesday, January 20, 2010

Policy Changes With FHA Guidelines for Underwriting...Will It affect first time buyers?

Have we reached the top of the "mountain" in regards to tightening of underwriting guidelines in the mortgage industry in hopes to reconstruct, and specifically speaking, in FHA lending, so we can take the easier ride down the "mountain" now? Guess not. FHA announced today that there is to be changes in the MIP fee that is charged up front in an FHA mortgage transaction. It was moved originally from 1.5% to 1.75%, and they are not moving it up to 2.25%. In a loan scenario of say $150,000, your up front MIP fee, that is rolled into your loan in most cases, is $2,250 when it was 1.5%, and would have been $2,625 at the 1.75%, and now would be $3,375. That is $1,125 higher than the original amount for this scenario.

Why is FHA doing this? With the higher than normal claims rate (on default of an FHA loan, the lender is insured by a pool of funds that is built by FHA borrowers that pay this MIP fee), the pool of money has been reduced and needs to be replaced. The extra money that will be charged to the new FHA borrowers moving forward will help recoup what has been lost in the recent falling of the industry.

When do the new January 20th FHA changes become effective? The Truth About Mortgage reported, "The proposed changes will go into effect in either spring or summer, giving
lenders time to speed applications through the system under the current

Additional changes by this FHA policy change include change in FICO, seller concessions/allowable contribution to closing costs, and down payment requirements. The lowest FICO that someone using an FHA loan will be able to have and still enjoy the minimum 3.5% down payment requirement is 580. Anyone with a FICO below 580 will be required to put 10% down payment. This means ultimately, poor credit borrowers are still able to get an FHA loan with a minimal down payment of 3.5%. Presently, the seller can pay up to 6% in contribution toward the buyers costs, but that will be reduced to 3% when this goes into effect.

My look on the matter is simple. The FICO score was invented and does a very good job of providing the lender with a risk grade of a prospective borrower of money, and it's important to the overall growth and recovery of our economy to make the necessary changes to protect our nation's economy from those who are not financially ready to it because they are not disciplined enough to deserve a mortgage loan, or they have fallen on hard times and the timing is not right. This change in constriction of lending practices is comparable to the old adage "mom" would say, "this is for your own good", even though you do not like it.

Wednesday, January 13, 2010

Brad Lynch You Tube Mortgage Clip Introduction


Who is Brad Lynch, and at what angles does he go about business as he works with First Time Home buyers, Move Up buyers, VA prospects, and FHA prospects in Frisco, Plano, McKinney, and North Dallas to best help families buy or refinance their home?

It's a first time "go round", and the video and audio didn't match up when I uploaded it to You Tube.

First 15 Banks That HUD Accounts for High Claims Rate for FHA Loans

Yesterday, The Truth About Mortgage lists the first 15 Banks in America that have received a subpoena for a high claims rate on their FHA mortgages. These banks were recognized first because of their high number of failed loans that resulted in the FHA mortgage insurance fund to be debited. quoted Inspector General Kenneth M. Donohue saying, “The goal of this initiative is to determine why there is such a high rate of defaults and claims with these companies and whether there is wrongdoing involved”.
Between the fallout list on America's renown Imploded-O-meter , and the number of banks that have been brought under indictment by the federal government, and the mergers of major banks, Americans had started to think that the surprises within this industry were over. Maybe this is a sign of, "oh contrar mo frar".
The Inspector General did say that they have no evidence in this situation of 15 targeted lenders, but if this story/investigation follows in the footsteps of other investigations that have become the long arm of the law, and literally reached into the deep pockets of America's lending establishments that were figured to have deeper roots than a 100 year old Red Wood, OH there will be casualties!
To read more on this list of banks, go directly to the source that I picked it from.
Below is the list of banks that were served subpoenas:
These lenders and banks are not guilty and there is no hard evidence to say that they have done anything wrong. HUD has only "smelt smoke" and is doing it's investigation to see if there truly is a "fire".
The following companies were served subpoenas today:
First Tennessee Bank N.A., Memphis, TNAlethes LLC, Lakeway, TXSecurity Atlantic Mortgage Co., Edison, NJPine State Mortgage Corporation, Atlanta, GABirmingham Bancorp Mortgage Corporation, West Bloomfield, MIAlacrity Financial Services, LLC, Southlake, TXAssurity Financial Services, LLC, Englewood, COD and R Mortgage Corporation, Farmington, MIWebster Bank, Cheshire, CTMac-Clair Mortgage Corporation, Flint, MIAmericare Investment Group, Inc., Arlington, TX1st Advantage Mortgage, Lombard, ILAmerican Sterling Bank, Independence, MOSterling National Mortgage Company Inc., Great Neck, NYDell Franklin Financial LLC, Columbia, MD

Tuesday, January 05, 2010

Sell Your Home Before Spring This Year Says Experts!

If you have even considered to sell your home to the extent that you took a moment to share the thought with just about anyone in the last couple years, you probably got an ear full. You heard things like; it's a buyers market, don't sell in a buyers market...home prices are depreciated and you are going to lose your tail-end if you sell now. All of that could be right, but Real Estate forecasters and experts are starting to see the positive side. Francesca of makes it clear what her expectations are when she says, "Homeowners should buck the idea of selling in the Spring".

Typically it has seemed most reasonable to prepare to sell in the late winter so that you can be first on the board for the rush of buyers that show up in the Spring and early Summer...thought to be brought on by the school breaks for children and lively atmosphere of the fresh weather of the season.

This year, experts predict that selling your home early in the year, rather than waiting for Spring, may bring the quickest and best desires that sellers strive for.
That means, if you are ready and just waiting for the right moment, prepare your home now to be listed by end of this month or next by calling your trusted and loyal experienced Realtor to effectively stage your home to the extent that buyers choose your home rather than the one your neighbor lists "For Sale By Owner". Staging your home leaves no question unanswered to what the buyer is suppose to do with the different amenities and rooms of your home. The key to selling ANYTHING is easy and simple when you prepare for it. Sell benefits, not features...customers/buyers don't want to know how it works as much as they want to know how it will benefit them. Example, if you have a raised area/stage in your 2nd living area and do not put anything on it, the buyer may think that is wasted space...your Realtor/expert stager will know to stage that area so the buyer doesn't ask to himself subconsciously, "what is this wasted space for", but rather will say, "that is a good idea, we can put our ???? there also."
Best of luck selling or buying this year! GO win in 2010!

Testimonials & About Me

My photo
Frisco, Texas, United States
In 2002, Brad Lynch began energetically consulting families in finding the right mortgage plan for their needs. In the beginning years, he was trained by a mentor who led by example, and this example was the epitome of integrity. Brad learned in the beginning by his mentor that many prospects may not consciously see what good intentions he has for them, do to the “wrap” many have caused w/in this industry, but always do what is right for the customer and in the end it will payoff. Integrity coupled with an energetic nature to nurture relationships, Brad has created clients for life. Through these clients for life, referrals have become the lifeblood of his business.