Fannie Mae’s Foreclosure and Short Sale Waiting Periods Updated

Fannie Mae’s Foreclosure and Short Sale Waiting Periods Updated Fannie Mae recently changed their policies regarding the purchase of a home after a major credit event like a foreclosure, short sale and bankruptcy. The changes are both positive and negative, but seem to focus on reducing the wait times for those that encountered an “extenuating circumstance” or in layman’s terms a one-time or temporary event that led to the negative credit event. These changes show Fannie Mae’s focus on helping those that were hit hard by the recession. Derogatory EventWaiting Period RequirementsWaiting Period with Extenuating Circumstances Bankruptcy Chapter 74 Years2 Years Bankruptcy Chapter 132 Years from discharge date 4 Years from dismissal date 2 Years from discharge date 2 Years from dismissal date Foreclosure Included in Bankruptcy4 Years2 Years Short Sale or Deed in Lieu4 Years2 Years Foreclosure7 Years3 Years Requirements After bankruptcy, foreclosure, or short sale a borrow must re-establish credit in order to meet minimum Fannie Mae guidelines. For specific down payment and documentation needed please contact me directly. Questions What’s considered an extenuating circumstance? Extenuating Circumstances must be verifiable hardships that are considered out of the borrower’s control that significantly reduce income or expense. This can be anywhere from job loss to health issues. I foreclosed when my property lost substantial value, is that an extenuating circumstance? Unfortunately no, that falls under a strategic default and is exactly why Fannie Mae is drawing a line in the sand. If you fall into this category waiting 3 years and using FHA may be the best option for... Read More

Buying a Home After College

Buying a Home After College

Buying a home after college is easier than you think. Providing school transcripts can replace the 2 years work history requirement. Low FICO and Asset programs available.

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The FHA Mortgage Migration – Buyers are searching for greener pastures

The FHA Mortgage Migration – Buyers are searching for greener pastures Since the beginning of the financial crisis in 2007 HUD’s FHA loan has been the go-to option for home buyers due to relaxed credit requirements and minimal down payment.  Over the past few years FHA has molded into an expensive unrecognizable product that essentially encourages borrowers to avoid it.  FHA has increased both the upfront MIP and yearly MIP requirements and decreased maximum loan limits in many of the areas where FHA is predominately used. The Mortgage Insurance Premium (MIP) not to be confused with hazard/ fire insurance is a required insurance policy to protect lenders from losses.  MIP is required on all FHA loans regardless of down payment while providing the borrower with ZERO benefit.   In the past FHA’s MIP was considered an inconvenience, but wasn’t a big enough factor to push borrowers into a different type of loan. The migration away from FHA has been gradual and seems to have coincided with the five MIP price hikes over the past 6 years. In 2008 the upfront MIP was 1.5% and yearly was .50% In 2014 the upfront MIP is 1.75% and the yearly is 1.35% In 6 short years the financed upfront premium increased 16% while the yearly premium increased by 270%.  The increases roughly translate into an extra $66.83 per $100,000 per month.  That itself is hard to swallow, but FHA further changed the rules to make MIP permanent.  Prior to the last MIP hike in 2013 MIP could be removed after 5 years if the home had an equity footing of 22% or more, but borrowers must now pay off the loan or refinance out of FHA to remove it. The latest change from FHA that’s persuading borrowers to migrate is the reduction in FHA loan limits. According to HUD, 89 counties will see an increase in 2014, but 652 counties will experience a decrease in loan limits. California leads the nation with a loan limit decrease in 59 Counties and has an average decrease of 14.2% statewide.  I was provided with stats from a Realtor in a previous post concerning the loan limit impacts on San Joaquin County and the impacts of the changes were staggering. FHA has changed drastically and buyers are taking notice.  According to HUD’s Monthly Snapshot FHA origination’s have shown a 26% decline when comparing  Dec 2010 and Dec 2013. Borrowers with limited funds and needs only FHA can fulfill... Read More

7 Mortgage Interest Rate Pricing Factors That You Should Know

7 Mortgage Interest Rate Pricing Factors That You Should Know 7 Mortgage Interest Rate Pricing Factors Looking for the best mortgage interest rates?  It’s time you learned how to weed out the nonsense and find the best mortgage deals around. Mortgage companies constantly bombard you with “teaser” advertisements that offer unobtainable and/or manipulated information that’s intended to draw your interest.  The advertised deal may sound fantastic, but it’s unlikely you’ll qualify for it. The fine print typically negates your eligibility with multiple requirements like 760 credit scores, 50% LTV, 10yr loan term, and minimum 400K loan value. Once a borrower makes the call they typically state the borrower is outside the advertised program guidelines and shift them into a loan program they actually qualify for.  These lenders are using a legal form of bait and switch.  As long as the program actually exists they have the right to advertise it, even if less than 1% of consumers can qualify for it.  If this happens to you, don’t walk…RUN! The only way to weed through rates and pricing is to know what pricing factors are used to determine your interest rate. 7 Mortgage Interest Rate Pricing Factors Pricing can shift depending on a borrower’s credit profile, loan program, loan term, LTV, occupancy, loan amount. Loan Program – pricing differs completely from program to program so this is considered a starting point. Loan Term – shorter term loans like 10yr/15yr/20yr are cheaper than long term loans. Down Payment or LTV – large down payment can significantly reduce rate/ price Credit Score – the higher the cheaper Loan Amount – higher and lower loan amounts (loans below 55K or over 417K) Occupancy – non-owner occupied loans can be costly Units – multi-unit properties are more expensive than single family residences The various loan programs have a significant difference in rates, and fees.  You should have a firm understanding of what loan program you want and shop rates based on that.  For instance FHA rates are very different than conventional rates. Trust is a major factor to consider when shopping for a mortgage and choosing a trustworthy lender will help secure you honorable and fair pricing.  I suggest sitting down face to face with a lender to ensure you are comfortable working with them; after all they will have access to some very personal credit and financial information.  Why would you trust someone who lured you in under deceptive circumstances? As a lender... Read More