Good morning, Memphis! Welcome to the Real Estate Mortgage Shoppe program with me, Jo Garner, Mortgage Officer with Evolve Bank and Trust. With us this morning we have Richard Scarbrough, experienced real estate investor and a Realtor with First National Realty here in Memphis.

Richard, you are well known around town but tell us a little about yourself and what you do in the real estate business?
Kevin Perk is with us at the coffee table too. Kevin Perk is an experienced real estate investor with Kevron Properties and blogger on www.smarterlandlording.com Kevin we were talking about you last week on the show. You are a great resource for real estate investors who are also landlords. Tell us a little about yourself.

Our topic today is “Grow Your Wealth By Getting a Smarter Mortgage AND Purchasing Real Estate Foreclosures”
Grab your cup of coffee and join us at the coffee table by dialing 901 535 WREC.

The mortgage news was mixed this week but with plenty of opportunities to build some wealth for those of you looking for the silver lining in the cloud.

Mortgage rates stayed low, sinking just a little this week on the weaker job market, the European financial trouble, China’s recession and our Federal Reserve’s efforts to keep our mortgage rates low with Operation Twist.
The benchmark 30-year fixed-rate mortgage fell to 3.87 percent from 3.89 percent. This is the lowest the 30-year has reached in the 20+ years I have been in the mortgage business. This downward trend has lasted three months. The last time the fixed rate increased was May 4.
The benchmark 15-year fixed-rate mortgage fell to 3.13 percent from 3.16 percent, while the benchmark 5/1 adjustable-rate mortgage fell to 2.96 percent from 3.02 percent.
The job market was less than stellar and consumer confidence is sagging but for homeowners refinancing, aspiring homeowners and real estate investors, the silver lining in the cloud is very shiny. Take advantage of the opportunities while they are still here, because existing home sales are seeing gains and some more desirable areas of Memphis have switched from a buyer’s market to a seller’s market. Tick Tock Tick Tock
The Home Affordable Refinance Program better known as the government HARP program is going full guns right now. If you or someone you know owes more on a home than the current value, the HARP program requiring no appraisal, may be the very solution to an nagging challenge. There are some restrictions on this plan and other “no appraisal” required loan programs. My very capable assistant Susan Belew and I would like very much to talk with you to see what options could be open to save you quite a bit of money. Call us directly at (901) 482 0354. Our direct number again is 901 482 0354.
The FHA streamline program is another great program that does not generally require an appraisal. If your current FHA loan was originated prior to May 31, 2009, you may qualify for the greatly reduced mortgage insurance version of the FHA Streamline . This is new, so if you have talked with your loan officer a few months ago and decided the high mortgage insurance was a show stopper on your refinance, try again today.
This week FHA delayed stricter restrictions on borrowers with collection accounts on their credit report. FHA, another government loan, has mandated that loans are not considered eligible for FHA financing if existing tax liens haven’t been paid off or the borrower isn’t in a repayment plan. Unless a fully executed payment arrangement and proof of 12 months’ timely payments can be provided, tax liens should be paid in full before closing. Satisfied tax liens should be removed before closing, and for cash-out refinances, outstanding liens may be paid off using proceeds if an underwriter approves the decision.

The current rule for FHA is that judgments must be paid off, but collection accounts are not required to do so. Disputed credit accounts or derogatory credit on public records showing on a credit report will not be approved using the computerized underwriting system but for accounts of less than $500 and more than two years old, the computerized approval will suffice.
Word to the Wise: If you are planning on purchasing a home or refinancing one, if the deal works for you today, do it today. Tighter restrictions are continuing to clamp down on the number of borrowers qualified to get a loan. More and more mortgage companies are adding their own set of tighter loan restrictions. Buy that house or refinance that house while you are still qualified to do so.
Here’s a special word to our homeowner friends in south Cordova and Lakeland. Your property taxes are going up. The silver lining in the cloud? You may be amazed at what terms on a refinance would look like today. It may just be the fix to keep your payments at a more comfortable level. Make sure you use an experienced loan officer. Of course Susan and I would like VERY much to work with you. Call us directly in private at 901 482 0354. Other contact information for me you can find along with our past podcasts on my blog mortageloansblog.com
Our topic today is “Grow Your Wealth By Getting a Smarter Mortgage AND Purchasing Real Estate Foreclosures” But there is plenty of room around the coffee table this morning. You can call us and talk about anything concerning real estate or real estate financing.
Richard and Kevin, why don’t you get us started by talking about what you do so well—buying foreclosures….

Questions answered by Richard and Kevin
1. Why are foreclosures great to buy?

2. How do you go about buying real estate foreclosures?

3.Where is the best place to look for a good deal on buying a foreclosure?

4. What if the property needs a lot of repairs?

Questions answered by: Jo Garner:
1/ Jo what is Freddie and Fannie and what kind of guidelines do they offer real estate investors buying the property as a rental property?

2. Jo , what kind of mortgage programs do you have for real estate investors buying a house that needs a lot of repairs

< Mortgage financing on a different house owned by the potential buyer so the buyer can pay cash to purchase the newest property and do the repairs.>

3.

Announcements by Richard and Kevin:
1. This Thursday at MIG on July 12, at the Memphis Hilton we will have a panel of local realtors that specialize in foreclosed properties. They will be talking about what you need to know to buy the properties. It all starts at 6 PM at the Memphis Hilton at Poplar and I-240. First time visitors are free.

2. Plus on Saturday, July 14th myself and another MIG member Curt Davis will be hosting a MIG deals tour. This is when we do a little classroom time on how to analyze properties and then go out and actually look at foreclosures currently on the market to see if they are a deal. This is a popular class and space is limited. $29.95 for members and $49.95 for non-members.

Annoncements by Jo :

Radio show – 7/7/12 – Buying Foreclosures

Foreclosure properties can be a great investment. I buy them all the time. Today we are going to tell you what they are, why they are a great investment and how to buy them!

What is a foreclosure? A foreclosure is a property that has been taken back by the lender usually because the borrower has stopped paying the mortgage. Usually is a doing the foreclosing. Also called REO for Real Estate Owned.

Richard – Talk about the process at the courthouse steps. Ever bought one there?

To date in Shelby County there have been over 4,200 foreclosure notices. Over 3,000 properties in foreclosure that is almost 2% of all homes in the Memphis area.

Why are foreclosures great to buy?
Buying is often easier – there is no homeowner, there are generally no liens, no other mortgages
Buying is often quicker – make an offer and know generally in 24 hours or so
Can often get a deal – Often priced below market because banks do not want them, especially if they need work. Richard has stories
As opposed to a short sale which can drag on forever and often do not work out.

How to buy? Do you need a realtor? Where would you recommend people look? Freddie and Fannie take back most of them. Jo what is Fredie and Fannie? These properties get put on the HUD list, Richard what is that. Can get a great deal if you buy one to live in. Kevin did that and has story.
Also on the MLS and there are a number of realtors in town that specialize in REOs. We will have some of them at MIG next Thursday night – Either way it is best to work with a realtor to buy an REO.
You also need to have your money lined up – Jo what kind of loans do you have for investors.

Beware that these properties are bought as is. You need to go in and look at them before you put your offer down. If you try and back out because of the repairs, you may lose your earnest money.
Utilities are often not on, so budget for plumbing, electrical and sewer issues because you can’t test the air conditioner of see if the sink leaks.

Foreclosures are a great way to start in real estate investing. I think we all may have started that way for the reasons we outlined above.

Remember real estate is now on sale and there is no better time to buy plus interest rates are very low right now but rents are holding steady or creeping up a bit. So you can do really well. To start, pick a part of town you are interested in and begin looking around there, talk with a realtor like Richard, he can show you what is one the market and you can meet him this Thursday night at MIG

Jo Garner, Mortgage Officer with Evolve Bank and Trust (901) 482 0354 www.MoneyShoppe.net.
Richard Scarbrough, Investor and Realtor with First National Realty (901) 753-3491
Kevin Perk, Investor with Kevron Properties and real estate blogger www.smarterlandlording.com

If you want to know how to purchase real estate foreclosures and how to finance foreclosure homes, contact us and we may be able to help you with real estate solutions.