North Carolina Mortgage

It seems like the market is dropping lenders like a bad habit!

It's really bad for those who are losing their jobs in this market.

It's becoming harder and harder for a Loan Officer & Realtor to survive in this market.

The worst part of it is that most employees received no indication that their company was going to go 'under'.

Apex on the other hand has been having problems paying their employees for loans that were funded months ago! Now they plan to file bankruptcy, and the loan officers will not be paid!

American Home Mortgage warned their employees of a possible closing a 'few days' before they actually closed their doors.  

Countrywide might be one of the worst offenders yet.....Since the beginning of the year, their CEO has been dumping all his stock options.  If this isn't a bad indication, I dont know what is. I'm sure their Sr. Managers are promising the 'stars' in hoping to retain their employees.  Former Countrywide employees have been mentioning to me that it is 'common' to have layoffs every year, and it wouldnt be something new.

Mortgage Companies that have Imploded Mortgage Implode 

Mortgage North Carolina

How can a Realtor determine which Loan Officer is right for his/her book of business?

Is it the one that buys you lunch? Maybe. ;)  The one that offers new sales tactics to build your book of clients? Plus.  Offers to 'help' pay for future ad? Plus. 

There are few 'smart questions' that every Realtor should ask a potential partner. You will need to understand their business in order to ask the 'right' questions. 

1. Do you offer FHA mortgages? a) How long have you been doing FHA mortgages? b) How many lenders do you work with that offers FHA? c) How much does a borrower need to put down for an FHA loan? (Correct Answer is 2.25%, inexperienced professionals will say 3%) d) Does your lender offer 'manual underwrite'? (This is a HUGE QUESTION to ask. If the lender only looks at the automated underwriting then your loan can be dead in a few seconds. Manual Underwriting allows the Underwriter to review files that have No Credit Score/No credit report, credit scores around 400, and can use letter of explanation for past derogatory remarks.) e) How many FHA appraisers do you have? f) What is the turnaround time for your FHA approvals? g) what is the county loan limit for FHA?

2. Do you offer zero down programs? a) Do you offer MyCommunity or HomePossible loans? b) How long have you been working with these programs? c) What is the minimum middle credit score to avoid High PMI payments with most loans? (Correct answer 620, product knowledge question) d) How many lenders do you work with that offers these programs?

3. Do you offer VA loans? a) What is the minimum down payment for VA? b) How many VA lenders do you work with? c) How long have you been doing VA loans? d) How many VA appraisers do you work with?

4. Do you offer Jumbo Loans? a) What is the highest residential mortgage loan amount you can offer? b) How many Jumbo lenders do you work with? c) What is the highest Loan-to-Value you can offer? d) What is the lowest credit score you can use?

4. What are your work hours? a) Do you work on weekends? b) Do you work on holidays? c) What is the best way to contact you? d) How fast can you offer a PreApproval letter? e) What is your turnaround time for returning a phone call? e) Do have a work website where my clients can see the types of programs you offer? f) Do you have a fax/printer AT HOME?

5. Are you a lender, bank, or broker? Bank originates, buys, sells, or services loans. Mortgage lender originates, sells, and may service the loan. Mortgage Lenders may work with more than 1 lender. Brokers doesnt buy, sell, or service loans. They originate the loans, and can work with a large amount of lenders (Carteret Mortgage works with over 440lenders). Asking these questions will give you OPTIONS for future clients.

6. Do you offer credit advice or credit repair? a) What is the average turnaround time for credit repair? b) How long have you been working with credit repair? c) Do you charge for your services? d) Do you offer Rapid Rescore for your borrowers? (If the answer is no, you can visit Free Rapid Rescore Information to learn how to do it yourself.)

7. How often do you call with new loan updates whether bad or good? Do you have a setup program that can help US retain new/former clients?

Most of the product questions MAY change as the market shifts.  Do not ask the loan officer to pay for a whole ad. (RESPA Violation) Do not ask for anything in return for your clients. (kickbacks) This is a common RESPA violation. Some loan officers will be annoyed and others will report you. It's not worth losing your license for a few hundred dollars.

I will post more questions as they come up....

These are a couple of first time home buying programs that can assist borrowers with their first home. These programs have different requirements, and can be beneficial to bad credit borrowers, no money down, low credit score, no credit score, and borrowers who just acquired a full time job. 

MyCommunity Mortgages have been gaining popularity with the new terms that have been released.  This mortgage program was designed by Fannie Mae for low and moderate income borrowers. This 1st time home buying program is also considered a 'zero down mortgage program'. It has a 'no minimum borrower contribution'.  Here are the key features of the MyCommunity mortgage program.

1. No minimum borrower contribution.
2. Up to a 40-year mortgage term.
3. Lower monthly payments with a 5-year or 10-year ARM interest-only period.
4. Funds for closing costs, and down payment can be received from a wide range of sources, such as a gift from a family members, gifts, grants or loans from a nonprofit organization, municipality or employers, or the borrower's own funds.
5. Loan-to-value (LTV) ratios up to 100% for 1-unit properties.
6. Flexibility on credit histories, including nontraditional credit histories.
7. Flexibility on sources of income including boarder income even if boarders are not related to the borrower.
8. Cash reserves for closing not required in most cases.
9. Part-time & overtime income is considered.
10. Purchase a single family home (including a condo or co-op), a two-, three-, or four-family home to live in one unit and rent out the others (minimum 3 percent borrower contribution for two- to four-unit properties).

Additional flexibilities provided to:
1. Community Solutions^TM for teachers, police, firefighters, and healthcare workers.
2. Community HomeChoice^TM for disabled borrowers or a family member with a disability.

HomePossible Mortgages is another home buying source for 1st time home buyers.  This mortgage program was designed by Freddie Mac to provide a 1st time home buyer's program equal to the MyCommunity Mortgage program. It isn't widely known as the MyCommunity mortgage products, but it has helped many homeowners with their first home purchase. The four HomePossible Mortgage programs are: Home Possible 100, Home Possible 97, Home Possible Neighborhood Solution 100, and the Home Possible Neighborhood Solution 97. Designed to help the home financing needs of borrowers looking for low down payments, flexible sources of funds, 1st time home buyers, move up borrowers, retirees, families in undersved areas, and new immigrants. Here are a few key features of the HomePossible Mortgage programs.

1. Borrower Contribution not required on 1 unit Primary residences. (Excluding Manufactured Homes.
2. Flexible credit terms, included expanded ratios and options for low credit borrowers.
3. Low mortgage insurance coverage levels.
4. Flexible sources of funds.
5. 15, 20, 30, and 40 year fixed rate mortgage programs.
6. 5/1, 7/1, 10/1 CMT & LIBOR Indexed ARMs (2/2/5 caps)
7. 1 to 4 unit Primary Residences.
8. Secondary Financing including Affordable Seconds.
9. Rate/Term Refinances to 100% LTV (No Cash Out)
10. Seller contributions to 6% in most cases.

Additional flexibilities for teachers, firefighters, law enforcement officers, healthcare workers, and military personnel. (US Army, Navy, Air Force, Marines, Coast Guard, and National Guard).

Normally, if the borrower has a 620+ middle credit score they can receive the 'low PMI payments' with 20% coverage compared to the regular 35% coverage. Believe me..there's a huge difference in payments! Most realtors wonder if these programs are still alive, and I'm here to say they are being used FREQUENTLY. A lot of these programs were around for a while, and I dont know why lenders were putting borrowers in to SubPrime Mortgages...instead of FHA, MyCommunity or HomePossible programs.

FHA loans are still around and helping borrowers with low scores (400's) obtain mortgages. The catch is that they need 2.25% down, and they cant have any lates on the credit report for the last 12months. Also, you will need a lender that does 'manual' underwriting.  Most underwriters follow the automated underwriting certification only. If they receive a refer/eligible, then they will decline the loan.  With manual underwriting the lender can approve a borrower who has 'no credit score'. They can use utilities bills, rental payments, car insurance, phone bills, etc.  They will require 3 'nontraditional tradelines' that have been open for 12months and no lates!

Mortgage North Carolina

There are a lot of professionals that are misinformed of what credit score is used in a mortgage transaction.

This applies to MOST conventional/conforming mortgages. ALT-A & SubPrime have other guidelines, but may have also gone extinct.

Husband has 600 640 630

Wife has 720 710 750

Husband makes 50,000 annually, and Wife makes 70,000 annually.

Believe it or not...the LOWER of the TWO scores are used REGARDLESS of who makes more money.

In this scenario the 630 will be used in the mortgage.

Representative score is considered the middle of one borrower. If the borrower has only 2 scores then the lower of the 2 is used.

AllRegs is used by many mortgage lenders.  

X, 802.02: "Representative" Credit Score

Credit scores are based on a single credit file for the borrower that is obtained from one of the three major credit repositories-Equifax, Experían, or TransUnion. Because the models used by each repository differ slightly and the amount of information in an "in-file" report may differ among the repositories for any given borrower, it is possible for a borrower to receive a different credit score from each repository. Therefore, we recommend that a lender obtain a minimum of two credit scores for every borrower. This enables the lender to select a single applicable score for underwriting each borrower-the lower score when two credit scores are obtained or the middle score when three credit scores are obtained.

When there is only one borrower, the single applicable score used to underwrite that borrower is the "representative" credit score for the mortgage. If more than one individual is applying for the same mortgage, the lender should determine the single applicable credit score for each individual borrower and then select the lowest applicable score from the group as the "representative" credit score for the mortgage. The "representative" credit score for the mortgage should be used to underwrite and evaluate the comprehensive risk for the mortgage application.

Mortgage Approvals

The U.S. House of Representatives today passed
H.R. 5121, the "Expanding American Homeownership Act of 2006."

This bill contains six reforms to the FHA single-family insurance program.

The changes include:

higher FHA loan limits nationwide, and especially in high cost areas.
taking away the  3% downpayment requirement
no caps on FHA reverse mortgages
streamline FHA condo loan programs
loan terms to 40 years for lower monthly payments
FHA to charge risk-based premiums to borrowers.

This is great news for new home buyers, and anyone looking to refinancing from a high interest rate with a high loan amount!

FHA Mortgages