Good morning Memphis! You are on the Real Estate Mortgage Shoppe program with me, Jo Garner, Mortgage Officer with Evolve Bank and Trust and today we are talking with R Attorney Ron Cohen affiliated with the Memphis Law Firm of Ballin, Ballin & Fishman and an owner of Premium Title. Ron? We also have Don Swogger of Homevestors in the studio talking with us today. Don? Our topic today is “Preparing For A Smooth Real Estate Closing: Tips To Prevent The Pitfalls.”
Our big news in the real estate mortgage world is still the HARP program. If you or anyone you know owes more on their home than the current value, the HARP 2 program is working very well to help these underwater borrowers. If your mortgage loan is backed by Fannie Mae or Freddie Mac and has been backed by them since before May 31.2009 and if you do not have any over 30 day mortgage late payments in the last several months, you should be able to lower your mortgage interest rate and improve your terms without the appraisal in most cases.
My assistant Susan Belew and I have been having fun working with our customers refinancing to the HARP program. Everyone likes a happy customer and there is a lot to be happy about when you are saving $200–$300—–$400 or more per month on your mortgage payment OR shortening the number of years on your mortgage and eliminating a few years of making payments—THAT’s where you can easily save 10’s of thousands of dollars overall. .
If you would like for us to do a free evaluation to see if you or someone you know qualifies for the special HARP program give Susan and me a call directly off air at (901) 482 0354. That number again to talk privately and not on air is (901) 482 0354.
The White House has made a proposal which would allow homeowners whose mortgages are NOT backed by the federal government–and who have fallen outside the scope of previous government refinance initiatives–to take advantage of low interest rates by locking into a government-backed loan. This program is rife with problems and has not made it off the ground yet and may take several months. So if the deal on the table works for you today—do it today.
Foreclosures and shortsales are still one of the more predominant type real estate sales right now. Most everyone knows that a foreclosure is when the homeowner falls behind on payments and the bank takes the house back. (the NO PAY NO STAY rule). Short sales , however, happen when the homeowner convinces the mortgage company to reduce the amount required to pay off the mortgage so that the home can be sold for the lower market price without the homeowner having to pay the extra mortgage balance over and above the lower sales price. ( in other words, you are selling the home short the full balance owed on the mortgage).
Fannie Mae this week established new timelines to expedite residential short sales for these homeowners needing to sell their homes for a lower price than the mortgage balance..”Expediting short sales and avoiding foreclosure is in the best interest of borrowers, communities and taxpayers,” said Fannie senior vice president Leslie Peeler.
“By requiring quicker reviews and improving servicer reporting requirements Fannie Mae will make the process more efficient and transparent” she added. You know, Don and Ron, we’ve been saying for a while now that there is nothing “short” about a short sale. Maybe now Fannie Mae will be able to help more of the distressed homeowners needing to sell their homes using the shortsale method.
Word to the wise: If you are going sell a house or buy a house involving a shortsale, please review the special requirement by your lender.
The Federal Reserve said they would continue buying mortgage backed securities–and what that really means to you is our rates should stay low for a little while longer.
Mortgage rates fell for the third week in a row, and the rate on the most popular mortgage hit a record low, thanks to the Fed and the ongoing European debt crisis.
The benchmark 30-year fixed-rate mortgage fell to 4.09 percent, compared to 4.1 percent the previous week. The benchmark 15-year fixed-rate mortgage fell to 3.28 percent from 3.32 percent the previous week, and the benchmark 5/1 adjustable-rate mortgage fell to 3.03 percent from 3.05 percent.
If you are trying to refinance or purchase a home, the traffic lights along your way are all green. You got the lowest mortgage rates in 50 years along with the best Affordability Index since 1970. Lenders have plenty of down payment assistance programs for qualified borrowers too. Susan and I want to help you. Call us directly to talk personally at (901) 482 0354. That’s (901) 482 0354.
Now if you want to talk with us today about your mortgage, getting preapproved to buy a house, planning for a smooth real estate closing, or any OTHER real estate related question, please call us on the air at (901) 535-9732 . That’s (901) 535 WREC. Let’ talk.
Don Swogger of Homevestors is also here to talk with you. Don has lots of experience buying and selling real estate. I met Don almost 10 years ago when he was saying “We Buy Ugly Houses.” He buys pretty ones too.
Attorney Ron Cohen, affiliated with the Memphis Law Firm of Ballin, Ballin & Fishman and an owner of Premium Title is on our hotline today to talk with you about “Preparing For A Smooth Real Estate Closing: Tips To Prevent Pitfalls”. So Ron, what are some of the most common pitfalls homebuyers experience when they go to close on a home?
Questions for Ron to answer:
Estates: The Title Insurance Perspective
Tips To Avoid Closing Snafus
(Alternatively: Confused Minds Say)
Alternatives to Court Proceeding
Jointly Owned Property
Decedent owns property with other(s) and there is a right of survivorship.
Trusts
Property is conveyed to trustee to hold for the benefit of another.
Court Proceedings
Probate
Existence of a Will
Property sold pursuant to will (generally, with court approval)
Non-Existence of a Will
Property sold pursuant to intestacy statute.
Affidavit of heirship required.
Pitfalls:
Incomplete affidavit of heirship
Claims against the estate such and tax liens.
Questions for Jo Garner to answer: What are some of the most common delays you are finding for borrowers going to closing.
1. For refinances AND for home purchases–the most common delay in getting to closing is misjudging how long it takes to get a loan processed and through underwriting and closing. We have a great team behind us but mortgage companies around the country are operating way over normal capacity. The key to success to getting to closing on time is to get your supporting documents and lender requested items to the lender within 24 hours of their request. Every hour counts
2. If you are refinancing and have a 2nd mortgage that needs to be resubordinated behind the new first mortgage, go ahead and get the 2nd mortgage holder to agree to resubordinate to the new first. Don’t wait til close to closing day. Some companies take up to 2 weeks to get the subordination agreement worked out.
3. Another common delay to closing is old paid off liens that have never been released from the title. These can take time too–sometimes up to 3 weeks or more. Get help from the attorney or closing office as soon as the title work comes back early in the loan process. Jenett Rochester, the Memphis manager of Premium Title does an excellent job helping our customers get old liens cleared off.
4. The other common closing pitfall is when we have a clouded title due to an estate situation where there are heirs and other interests who remaining on the property that have never been released. Ron can speak more on this.
Question for Jo Garner to answer: What are some ways you and Susan prepare your customers to prevent pitfalls when you begin the process with them?
1. One of the most important questions we ask a customer is ” Are you married, not married or separated. Believe it or not, we have actually had borrowers who did not disclose to us that they were married because they knew their spouse would not be supportive of the home purchase or refinance. Go ahead and let us know your legal status. Other documents turn up during the loan process that can indicate your marital status. In the State of Tennessee, (in most cases with some exceptions) your spouse is required to sign 3 documents at the loan closing even if they are not on the loan nor the title. There is nothing more frustrating that for a customer to spend their money on an appraisal and all the time it takes to process the loan, only to get to closing to discover that their estranged spouse will not cooperate. Talk about a pitfall. That would certainly be one.
2. Closing with a property belonging to a trust. If the borrower is using a trust to hold a property, the lender will need all pages of the trust agreement. The terms of the trust must meet underwriting guidelines. It is best to have the trust agreement approved by underwriting long before closing time.
Real Estate Tip of the Week: if you are buying a house and you choose to pay for a home inspection, it is usually better to get the home inspection report back before paying another several hundred dollars to get the mandatory appraisal. If the information you see on the home inspection is a show-stopper—you will not want to spend the several hundred additional dollars to get the mandatory appraisal.
Jo Garner, Mortgage Officer Evolve Bank & Trust (901) 482-0354 www.MoneyShoppe.NET
The mission statement for the Real Estate Mortgage Shoppe program on AM 600 is to offer you financial solutions to your real estate needs. This podcast features Ron Cohen of Premium Title talking about real estate title issues.