26 Feb 2018

Can You Close a Home With No A/C Unit?

Can You Close a Home With No A/C Unit?


The answer is … no,  and this can be a major problem for you and your business. House has had the A/C unit/ pool pump/ water heater stolen or broken and the lender will not close the loan until the equipment is fixed.

Seller or buyer agrees to pay for the repair but will not do so until closing.

This is understandable because the seller does not want to waste money and the buyer does not want to improve a property that he doesn’t own yet.

We have a solution that will allow the property to close, loan to fund, and the repairs to be done within 10 days of funding. We require that you get 2 estimates from licensed contractors. We will stipulate that 1.5 times the amount of the highest bid be put into escrow at closing. Example: highest bid is a $1,000. We will require 1.5 times ($1,500) held in escrow.

Schedule the work to be done shortly after closing. Once work is completed we send out an appraiser for final inspection and then release the funds to the contractor. This program is for minor repairs like the A/C unit, water heater, pool pump etc. It is not to be used on a new roof, kitchen/bath remodel etc. It is not a renovation loan.

Hopefully this information helps you in with you’re A/C Closing questions.

28 Nov 2017

Confirming Loan Limits Have Been Raised for 2017!

Confirming Loan Limits Have Been Raised for 2017!

Good morning!

Hopefully you had a great Thanksgiving!

On 11/23/16, the Federal Housing Finance Agency increased the conforming loan limits for 2017.

The loan limit was increased from $417,000 to $424,100 for Lee and Charlotte County.

Collier County increased to $450,800 from $448,500.

Hopefully this information helps you and your clients

Have a great day!

15 Apr 2017

‘Massive’ Shortage of Appraisers Causing Home Sales Delays

‘Massive’ Shortage of Appraisers Causing Home Sales Delays

I saw this article and wanted to share it with you. One of the longest parts of the mortgage process is waiting for the appraisal, and having the appraisal underwritten and approved.

This article explains why the process is taking longer than normal.

The original article was written by Diana Olick with CNBC Click Here to take a look.

Housing demand is rising rapidly, but a key cog in the wheel to homeownership is in deep trouble. The people most needed to close the deal are disappearing. Appraisers, the men and women who value homes and whom mortgage lenders depend upon, are shrinking in numbers. That is causing growing delays in closings, costing buyers and sellers money and in some cases even scuttling deals.

The share of on-time closings has dropped from 77 percent last April to 64 percent today for loans backed by Fannie Mae and Freddie Mac, according to Campbell/Inside Mortgage Finance. Appraisal-related issues in these delays jumped by 50 percent in that time.

“The appraisal shortage is massive. You’re seeing significant delays, you’re seeing cost increases, you’re seeing rate [locks] expire,” said Brian Coester, CEO of Rockville, Maryland-based CoesterVMS, a national appraisal management company.

Since 2007, when the U.S. housing market came crashing down, the number of appraisers has shrunk by 22 percent, according to the Appraisal Institute, an industry association. With so few new cadets, the current population of appraisers is aging. More than 60 percent are over the age of 50.
Ironically, the decline in new appraisers is largely due to new regulations designed to safeguard both banks and borrowers. They were put in place at the end of 2008 by Fannie Mae, Freddie Mac and the FHA, as the entire mortgage banking community was under strict scrutiny after the financial crisis. They changed the rules that would allow appraiser apprentices to do full appraisals and instead require the licensed appraiser to be on-site for the inspection.
The result is that appraisers no longer see a need to pay apprentices, but at the same time, licensing requirements to become an appraiser include 2,500 hours of appraisal experience to be completed in two years as an apprentice.
“The typical appraiser, he’s going to do approximately 10-15 appraisals a week. For him to be able to take a trainee, he needs the ability for the trainee to go ahead and inspect the property for him,” said Coester. “The rules have changed now, and you cannot do what you used to be able to do 10 years ago, which is hire three to four trainees and really have them go and inspect the properties, go and do work for you and really function as an apprentice. That market has been completely eliminated.”
At 1 p.m. on a Monday in Frederick, Maryland, appraiser Joyce Smith has already valued three homes and is walking into the fourth. A 23-year veteran of the business, she said she has never been this busy.
“I get calls five, six, seven, eight times a day. I used to go far away to do appraisals, but there are so many, I don’t have to go very far anymore,” said Smith.

In some of the nation’s hottest housing markets, where sales are up double digits compared to a year ago, the shortage means searching far and wide for an appraiser.
“We’ve been hearing from our agents in Colorado about significant delays in getting appraisals done,” said Alina Ptaszynski, a spokesperson for Redfin. “Our Denver market manager said for one deal, the appraiser came in from Cheyenne, Wyoming. She reported it taking up to seven weeks to get an appraisal done. Valuations aren’t the concern as much as the delays.”
Valuations are, however, becoming increasingly important, as home price gains accelerate, and competition in the market heats up. Prices could change in the course of two months, the delay time it is now taking in some markets to have an appraisal done. Mortgage rates are also starting to move in a wider range, and that makes rate-locks ever more important. It can cost significant cash to extend a rate lock.

Changes in the appraisal system are being considered, but there is currently no short-term fix.

“When they removed the trainee to be able to inspect the property, I don’t think they understood the trickle-down effect it would have on the entire mortgage market nor did they understand how trainees were used by the appraisers within the mortgage market,” said Coester.

15 Mar 2017

Tax Liens vs Back Taxes

Tax Liens vs Back Taxes

“I have a tax lien/back taxes. Can I get an FHA mortgage?”

I get this question often and wanted to share with you the difference between the two and how they are treated in regards to an FHA mortgage.

Tax Liens: IRS has been trying to collect their money for a long time. A lien now shows up on their credit. They need to have a payment plan in place. There must be at least 3 monthly payments made and those payments can’t be prepaid. Payment plans will need to be included into the Debt to Income Ratio. The tax lien will subordinate automatically to the FHA mortgage.

Back taxes: This is normally tied to a more current tax year. They will need an established payment plan from the IRS. There is no established time frame required for payments so we only need the payment plan from the IRS. Monthly payment must be included in the Debt to Income Ratio.

Hopefully this helps you in your business, or Home Search.

27 Feb 2017

Selling & Buying a House on the Same Day

Selling & Buying a House on the Same Day

I got this question a few times this week so I wanted to share this with you. Your potential seller can sell their house and buy another on the same day if financing is involved.

We would underwrite the entire file of the home being purchased as if the house has already been sold. We will have the file Clear to Close even with the house still not being sold. Closing package would be sent out and worked on. The fully executed Closing Disclosure for the sale would be all that was needed to fund the loan.

Sell their house in the morning, and close on their new one in the afternoon. It’s a beautiful thing!

Let me know if I can be of any help to you or your buyers.

P.S. Using the same title company for both transactions will make it easier on everyone.

11 Jan 2017

FHA Cuts Mortgage Insurance Premiums Again

FHA Cuts Mortgage Insurance Premiums Again

According to the FHA, it will cut the annual mortgage insurance premiums most borrowers will pay by one-quarter of a percentage point, or 25 basis points.

The FHA said that it projects that its new premium rates will save new FHA-insured homeowners an average of $500 in 2017 alone.

According to the FHA, the cut applies to new mortgages with a closing or disbursement date on or after Jan. 27, 2017… Click Here to read the entire article from Housing Wire.

Please reach out to me if you need any help or have any questions.

Have a great day!


02 Jan 2017

What Year Tax Returns and W-2’s Does My Borrower Need to Provide?

What Year Tax Returns and W-2’s Does My Borrower Need to Provide?

We are now in 2017 and some of our borrowers are confused on which W-2 and tax returns we need.

As long as the loan application date is before 1/31/17 AND the loan closes prior to 4/17/2017 we will need the following:

  • 2014 and 2015 W-2 and tax returns

Application date between 2/1/17 – 4/17/17 & the loan closes prior to 4/17/2017 we need the following:

  • 2016 return filed- 2015 & 2016 W-2 & tax returns
  • 2016 NOT filed – 2014 & 2015 tax returns along with 2014,2015 & 2016 W-2

After 4/17/2017 we will need 2016 and 2015 tax information OR the proof of extension filed.

As always, please call me with any questions or concerns. This is just some information to help your business.