You Are Referred to a Trusted Loan Officer...IT DON'T FEEL SO TRUSTY...thanks to New RESPA rules

Most Loan Officers, the ones that work outside the large call center type organizations, are entrepreneurial or self employed in nature. What I mean by that, for this message, we do not have a huge research staff that tells us why our numbers are falling, or when there is a major change, how to combat that. Therefore, most of us do what we feel is right and wonder if everyone else is doing it the same way. I read an article that backed me up on the feelings I had with regard to the RESPA changes and how to get conveyance to my borrower correctly without looking suspicious.
Unlike the majority in the industry, I do not despise the new rules under RESPA. On the other hand, I have wondered if I was "doing it right" or doing it like everyone else. I was reading an article from Tracey Ramsey, the Staff Writer for MortgageCurrency.com, and she really said it right. All of the changes that were designed to help the borrower on the new Good Faith Estimate or GFE 2010 do not help the borrower unless they know how to use it, and if they are not aware of the changes, they may not feel comfortable in the shopping process.
To see a little of what changes and when they occurred for the RESPA guidelines, go to my Active Rain Blog here. After reading this article from Tracey that I linked you to above, return for the remainder of this message.
I further suggest that a home loan shopper use their ability to recognize a trusty person rather than their ability to crunch mortgage numbers when shopping for a mortgage person. Use the one Loan Officer you LIKE the most until you are contracted or ready to lock your loan, and then shop by comparing others to him. In the end, you want to try to work with who you feel is most trustworthy if all possible...do not let a matter of $100-$300 in fees be the deciding factor or you may end up with $thousands$ worse over the life of the loan. Trust me shopper, you do not know what is best for you unless you take the advice of a professional...that includes you folks who are working on your 3rd, 4th, or 5th loan transaction too.

RESPA Reform Changes...New GFE and HUD-1

Are you ready for the changes that the Federal Government have for us in the mortgage industry under RESPA reform effective January 1, 2010? The new version of the Good Faith Estimate or GFE as we speak in the mortgage business (Martian Language), and the HUD-1 HUD 1 settlement statement or 2010 is what I'm speaking more specifically about.
If you are in or have originated your loan before January 1st, you can continue to close the loan after January 1st under the old GFE/Good Faith Estimate, but the title company will close it on the new HUD-1.
What if you are using two loans to buy or refinance your home...like a piggy back and a first for example? You will issue a GFE for both loans and the title company will have two HUD-1's as well. No biggy there.
The Loan Officer AND the borrower will likely benefit from this if used properly. The design of the change is to empower the borrower a little more by "force", to be more accountable in their process of shopping, and in the same, hold the Lender/Loan Officer accountable for their GFE quote in the beginning. In my opinion, the change is a positive for the lender, but that is because I have never bait and switched or mislead intentionally. In the past, I have had a hard time getting through to borrowers that were a little suspect in the entire shopping process as a whole because of the reputation that comes with mortgage. Therefore, my explanation of how to shop, when they were doing it all wrong, was in one ear and out the other. NOW, the honest loan officers in the industry can relax and let the system force the borrower to shop properly.

The lenders and loan officers that have built their business on smoke and mirrors sales tactics with the GFE's and survived on selling rather than consulting will feel haunted now. Here is why. The GFE, the official one governed by RESPA, is not allowed to be issued unless there is a property...this is good because the uneducated shopper (speaking of buyers and not refinance prospects here) would many times spin their wheels shopping lenders before they ever found a home and then months later when they found the home, they would use which ever company they found the months before. That makes no sense, because a lot can change in a week, must less a month or more down the road. Now, when there is a property and a borrower asks for a Good Faith Estimate, that lender is held accountable at closing by the "system" in the new law. The final documents at closing will put the numbers from the GFE side by side with the final numbers on the HUD-1. If these numbers do not match up, or stay within variance by law, the lender is held accountable for the difference. You see where the dishonest loan officer here will not like the new style? I like it, and many of the loan officers in this industry I am friends with like it because now we don't have to worry about "frisbying" out our GFE wondering if some dishonest sales type is our competition where we'll lose a prospect to a lesser deal and lesser loan officer.
Lets get clear on something. There are circumstances in a transaction process that would require rates or fees to change midway through, and the new laws have made room for those and defined the circumstances that will allow a lender to change the settlement variables from the original GFE. Just make sure that you the borrower, or you the loan officer have your client sign the "Change of Circumstance Affidavit" at least 3 days before you want to close the loan...that is part of the new law. If the APR or fees change from the originally disclosed Truth In Lending or Good Faith Estimate (no called the 2010), you will need to redisclose and sign the GFE and Truth In Lending 3 days before close.

Word on Extending Tax Credit for 2010

Have you been wondering, will the First Time Buyer Tax Credit stimulus package really go away as the timeline by law defines, or will they extend it?
Without disclosing the name of the person who forwarded the letter to me, and who was addressed on the letter, I did see the official letter from Washington that was written on October 5, 2009 that talked about this. My understanding of the letter lead me to believe that it would be possible that as the current tax advantage opportunity expires, there is possibility that a new one would be set forth including not just First Time Buyers. The new one MIGHT increase the amount one might get for the tax credit, and it would include anyone buying a primary residence rather than just the first time buyer.
Keep your fingers crossed!

Find the Lowest Interest and the Best Business Alliance

The home buyers in Frisco, McKinney, Plano, and the cities surrounding Dallas Texas are benefiting from interest rates that are still at historical lows and patience to find the right home with the right price. Buying Real Estate right now is a great opportunity. Foreclosures are still available in large volume and if you plan it right, you can be patient and leave your "feelers" out for the next great home to come on the market for a great value. Maybe you sell your home and move into a nice apartment or rental so that you are not under the gun to hurry and find another home by the time your buyers need to move into yours. With a little patience, you may jump into a home with 15% savings from the day you close. When the market moves up in the next 3-8 years, you stand to all of the sudden be sitting neck high in equity.
To have the best luck in your home buying process, align yourself with a mortgage guy who is not desperate for business, so that you are not strategically rushed into a deal that is not the best one for you. Additionally, contact a couple Realtors and let them know you are NOT interested in rushing into a home and that you'd like to be put on a automatic email list for homes that come on the market as foreclosures, and have them make the search specific...city, subdivision, choose a square mile radius, bedrooms, square footage, age, and one level or two level home. Yes, Realtor systems can do all that for you and many successful Realtors are willing to be patient with you.
The biggest mistake many folks have in crafting such a plan is by using a family member or friend for their mortgage or Real Estate alliances, just because they think they should or will get a good deal by using them. WRONG!!! A good deal is accomplished in the negotiation experience, and the research and structuring ability of your Real Estate agent or Loan Officer, and the small dollar amount you MIGHT save on a Realtor or Loan Officer friend or family member can offer you for their services is nothing compared to the dollar value experts bring to the table as a whole.
Interview your Loan Guy and Realtor, don't ask them where they are going to cut their costs. You'll find out right away what caliber your prospective alliance measure.

Frisco Texas Home Buyers See Interest Rates Increase In Their Real Estate Purchase In and Around Dallas

Why do mortgage rates seem kind of high?
One answer is that in order to fund the rescue and the new government guarantees, our Treasury must sell more new Treasury securities to raise money. And the Treasury has to offer higher interest rates to sell them. On top of that, mortgage related bonds always trade at a slightly higher yield due to the prepayment and delinquency risk. Lastly, the cost of financing mortgages has increased for Freddie and Fannie due to the plan for the FDIC to back the newly issued, unsecured debt of some banks. Obviously by guaranteeing bank debt, the government is making that debt more attractive for investors, and consequently creating more competition for Fannie and Freddie when they look to sell their own securities. To compete for buyers, the mortgage giants will have to raise their own yields - and to pay for that they'll have to charge borrowers higher interest.

Down Payment Assitance and Credit Certificates

Is down payment assistance gone? No, there are plenty of areas around Dallas, Frisco, Plano, McKinney, and Irving that have available "moneys" that are qualified to use as down payment assistance with FHA loans. On Jan 1st of 2009, FHA is increasing their requirement for down payment. Don't wait if you are ready, or you'll need more down payment to qualify...you might want to save that money for fix ups when you move in. The mortgage credit certificate is available too. It is more than likely that anyone buying a home for more than $100,000 using a mortgage credit certificate will receive $2,000 cash over an above what you normally get back at tax time, for the first 8 or more years you own your home, and continue to get money for every year you own that home. THAT'S AN AWESOME DEAL. Call me lets get you set up on that.
469-450-2723
Brad