Jo Garner’s Real Estate Mortgage Shoppe program on January 28th, 2012 covered topics about mortgage loan programs for refinance and home purchases using traditional financial program and also private lending programs. Jeremy Veldman and Alex Craig with Memphis Turn-Key Properties talked about “How To Make Money Buying Real Estate Using Private Lending; Making Money LENDING Private Money.” Click on the link to the podcast for the audio of this program.
And now for the small print: “The content of this program is intended for educational and informational purposes only.
Please consult with your attorney or licensed financial advisor regarding potential legal and financial implications to you.”
Now for the top real estate news this week.
Our phones are ringing with people wanting to know when does the new government HARP 2 program get fully released. The big date for the new automated underwriting system supporting HARP is projected to be released on March 17. This is great for homebuyers whose values have dropped. There will be an appraisal on this program but no loan-to-value limit. If you know anyone who has told you they need to refinance but their value has dropped and they don’t think they can, please let my very capable assistant Susan Belew and I talk with them. We may be able to offer them a solution. Call us right now on our business line (901) 482 0354 Susan is standing by to talk with you. That number for our business line is (901) 482 0354
A new national refinancing program unveiled by President Obama earlier in the week will rely on the Federal Housing Administration to refinance private and GSE mortgages, according to a report from Federal Financial Analytics in Washington. To get it off the ground, Congress must remove the 97% loan-to-value cap on FHA loans and approve a tax on banks to cover losses to the FHA mortgage insurance fund. Obama has been talking about this new program but for now it is only in the talking phase.
Moving on to the news on the Guarantee fee or G-fees that is the 10 basis points charged on every Fannie Mae or Freddie Mac loan closed from April 1 2012 onward. Some lenders are already charging these G-fees ahead of the effective date. The 1–basis point fee equals about $200 on a $200K loan . It equal about $100 for a $100K loan. Why do we have a G-fee now added to our mortgages for the next 10 years? Get this—to pay for just a 2 month payroll tax holiday. Now they are talking about raising it again to cover a 10-month payroll tax holiday. This is raising the costs of borrowing on mortgages but the G-fees are not helping solidify Fannie or Freddie’s capital reserves at all.
Rates this week should still be at about 3.875% to 4.25% on the 30 yr but we are seeing more and more investors raising their rates partly to cover the extra G-fees but mostly because their loan pipelines are full and they are raising their interest rates to try and keep the volume manageable.
Word to the wise: Jump off the fence and get your refinance loan or purchase mortgage done now before the cost of borrowing and more stringent regulations prohibit you from having the opportunity.
And with record low mortgage rates, decreasing home prices and relatively mild weather throughout the country, many states are experiencing home sale increases this winter compared to previous years.
Jeremy and Alex, I have heard about your company and what you do for real estate buyers and lenders. Since it IS private money, it IS very intriguing. What got you into this business? Why is there a need for private lenders?
Hear answers to the questions below by clicking the link to the 1-28-12 radio show:
Jo_and_Mphs_Turn_Key_1-28-2012_1327960702_22390 http://www.600wrec.com/player/?station=WREC-AM&program_name=podcast&program_id=jogarner.xml&mid=21774482
1. Why is there a need for private lenders?
2. Why would someone want to become a private lender? What’s in it for them?
3. Can you tell me a little bit more about how the process works and what programs you have available?
Questions covered by Jo Garner :
1. Is owner financing allowed behind FHA and Conventional loans? Not usually The CLTV max would be no more than the maximum LTV on a transaction. No prepayment penalties, fixed rate. Most 2nds on FHA loans are provided by city, county or state government down payment assistance programs. On conventional 2nd position loans are usually provided by HELOCs or bank piggy back loans up to 90% CLTV.
2. What kind of scenarios do you see come across your desk where private financing might be a better option rather than traditional financing?Some are where the house is in such bad shape and the seller owns it free and clear and can finance the property. If the seller is not in a position to finance, then the FHA 203K is usually a great loan that will allow the homebuyer to borrow both the price of the house and some of the repairs.
Real Estate Tip of the Week Don’t fall prey.
Fraudsters are targeting distressed homeowners with “deals” that can sound perfectly legit. Some offer loan modifications for upfront fees while others offer fee-based “help” in navigating government housing assistance programs, sometimes claiming they’re attorneys.
There are also con-artist “investors” compelling desperate owners to sign over their homes with quitclaim deeds in return for a typically empty promise to remain there indefinitely. Others are telling former owners they can get their homes back for a lump sum. Be forewarned: Never sign blank documents or documents with blank lines.
If you’re unsure of an offer, have an attorney or other trusted adviser look it over. Keep in mind that a law barring firms — except attorneys — from charging upfront fees for mortgage relief or mortgage modification took effect in 2011. It’s called the Mortgage Assistance Relief Services Rule.
Also featuring the original song “Bail Me Out” by
Pam and Terry at www.pamandterry.com
Jo Garner, Mortgage Officer Evolve Bank & Trust (901) 482-0354 www.MoneyShoppe.NET and www.MortgageLoansBlog.com
The Real Estate Mortgage Shoppe radio show has a mission to inspire and inform the public about relevant topics concerning real estate and real estate financing. Our purpose is to help homeowners achieve their goals in an economical and satisfactory manner.