You’re Invited!

To Our,

“We can’t believe we moved

after 17 years celebration!”

Stop by and enjoy food, drink

and tour our new home

Monday February 13th

1:00pm through 4:00pm

Open House

9180 S Kyrene Rd,

Suite 101

Tempe, AZ 85284

Our NEW Office is located in the Kyrene Corporate Center

Directions from I-10: Take Warner Road exit and head East. Turn south on Kyrene Road. Building entrance is the 2nd driveway after La Vieve Road and make a right.

Directions from Loop 202: Take Kyrene Road exit and head North past Ray Road. Building entrance is the first driveway after Knox Road and make a left.

Directions from Loop 101: Take Warner Road exit and head West. Turn south on Kyrene Road. Building entrance is the 2nd driveway after La Vieve Road and make a right.

What I’ve Learned So Far In 2012 (and it’s only January)

1. The new mortgage tax added to today’s interest rates, implemented by Congress to help pay for the payroll tax extension, will aid the housing market. If that is what they are telling us it must be true.

2. The sinking cruise liner in Italy is a parable to the European markets. Much of the crew,

including the Captain jumped ship (oops, I meant tripped) before the passengers. So much for women and children first or paying customers.

3. These candidates are the best the Republicans have to offer? Really?

4. Do not drive under the influence of cold medicine in Arizona. If stopped you could get a DUI (driving under the influence). That Nyquil on the seat beside me? It’s not mine, man.

5. The “first-time” home buyer tax credit from 2009/2010 may be contributing to the FHA defaults. The borrowers received cash from Uncle Sam, but when the money ran out and their homes continued to slide underwater, they began to bail. No skin in the game. No wonder I still drink boxed wine.

6. Fannie/Freddie are considering selling blocks of homes to investors (including buyers from Canada, China, Australia, Mexico), therefore the new foreign landlords can rent them back to Americans. What happened to revitalizing neighborhoods with the American Dream of Home Ownership?

7. Canada is not in a housing bubble although their housing prices continue to rise and the interest rates are low. If that is what they tell us, it must be true, eh.

8. Do not judge entertainment by its black and white, silent cover. “The Artist” is a good movie.

9. Moving a company is painful. A bonfire would have been easier, but it was a no-burn day. Hopefully we will not need to do it again for another 17 years.

10. HARP 2 will roll out the Fannie/Freddie refinance program with no appraisal and no income verification….if that is what they tell us it must be true.

Ten Reasons We LOVE VA Loans (yes, we said VA).

There are unfounded rumors swirling around the real estate community regarding VA loans: they are difficult to underwrite, appraisals come in undervalue and the turn times are unreasonable. That is so 2007.

Originating a home loan for our Veterans is an honor, in any market. But not long ago VA loans got a bad rap and sellers were hesitant to accept VA offers.

What’s changed over the past couple of years with VA loans? Are you ready? Very little. VA loans today have a default rate of less than 4%, compared to 10% on other programs. It is the real estate/lending market that has evolved (or regressed depending on who you are talking to).

The following are the top ten reasons we love VA loans:

10. It is an honor to originate loans for our Veterans.

09. Typically, banks will allow lower credit scores, 620 is the norm.

08. Lending after a conventional or FHA foreclosure is two years. If it was a VA foreclosure, and the new home financed is over $144,001, VA may allow the veteran another VA loan (No, it doesn’t make sense). Foreclosed VA loans stay on the Veteran’s record forever. But this “bonus eligibility” has helped many Veterans to reenter the housing market and reuse their VA.

07. Ratios are not considered. VA calculates residual income. But the banks may implement their own ratios. Ratios as high as 63% have been approved.

06. VA will accept rental agreements on current homes if the buyer is moving up. Check with the lender to verify any over-lay criteria.

05. Short sales are considered a market issue, not the Veteran’s (Direct quote from their West Virginia office). But the Veteran is at the lender’s mercy. And banks’ over-lays trump VA guidelines.

04. VA may decrease their upfront funding fees, a direct reflection of the lower default rate.

03. VA is truly zero down and the seller can pay up to 4% concessions towards buyers closing costs.

02. VA Appraisals are still using their same old system. Appraisers contact agents when there is a value issue and encourage their input. Lenders can call and beg for the updates and quicker turn times.

01. It is an honor to originate a home loan for our Veterans.

It is the least we can do.

Question:  My clients visited a national builder who insisted that their lender can immediately approve mortgages to previous homeowners after a short sale with lates.  Can they really lend on a home after a short sale?

Answer:  Beam me up! Wouldn’t it be awesome if everyone who had a short sale could turn around and purchase another home?  But that would stimulate our housing market therefore it must be sci-fi.

After calling the national builder to inquire about their mortgage programs, and as suspected, we all drink from the same pond.

For instance one of the most popular loans today is offered by the Federal Housing Administration.  FHA Mortgagee Letter 09-52, is very specific on their guidelines. (I know, it shocked me too… a government mandate that is clear and concise).

FHA Short Sale Highlights:

• The borrower must have been current on their mortgage at the time of the short sale and for the 12 months prior.   But the lenders that do not require lates before a short sale are as rare as the haboob we experienced in July.

• Writing like Shakespeare is a requirement because a letter of explanation to document the ‘great’ reason for the short sale is a must.  “I dumped my house so I could buy the identical floor plan with a pool for $200,000 less across the street,” is not acceptable.

• Borrowers who were late on their mortgage at the time of the short sale are not eligible until three years from the date of the sale.

Extenuating circumstances could shorten the term.  Examples: relocation for employment with the same employer (moving from Mesa to Goodyear is not acceptable), or a drastic change in family dynamics such as a death or severe illness.  Divorcing your cheating spouse probably will not count unless you have pictures.

Fannie Mae is the main guru for conventional loans.   Guidelines for borrowers with short sales are outlined in announcement SEL 2010-5.  But we are finding it doesn’t matter what the guidelines state, it appears every bank proposes their own overlay or guideline, tougher than Fannie (or FHA) originally proposed.

It is recommended before re-entering the housing market that a lender blesses the file with a written approval.  Be prepared: The last file we closed with a recent short sale was almost two feet high in paperwork.

Keep in mind, a strong credit rating will help your chances.  And as with all things in our slippery lending landscape, all guidelines are subject to change.   Let’s pray for the better.

The summer blockbuster isn’t Planet of the Apes but the U. S. Economy vs. Standard and Poor’s.  It has everything you would want in a thriller: stupid rich bankers, European bad guys, trillions of dollars changing hands, and the girl crying lots of tears. (That would be me)
Standard and Poor’s rattled their saber for months threatening our treasury with a downgrade.  Last Friday they reduced our coveted rating, citing our Congress’s inability for adequate action; and not shaving enough off of our debt.
Who is this big bully? According to their website Standard and Poor’s strives to provide investors who want to make better informed investment decisions with market intelligence in the form of credit ratings, indices, investment research and risk evaluations and solutions. They are owned by McGraw-Hill (the big publishing company) and include J.D. Powers in their stable of companies. Their employees are not held accountable nor can you dispute their stance once you are blessed with a rating. There is so much CYA verbiage attached, why would anyone give credence to their rating machine?  And does anyone else wonder how much money these gorillas made in the stock market if they sold high to buy back low?
What is a credit rating?   They indicate it is their opinion of the stability of a country, municipality, or stock.  The rating is based on the likelihood of default.  I guess we should be grateful they don’t rate the housing market as a whole. By the way, this is the same company that gave all those sub-prime mortgages glorious ratings.  My question is who is rating them?
And, as with other Wall Street Firms, they are above the law. Just days after the Treasury Department criticized Standard & Poor’s for “a $2 trillion mistake” in the math it used to justify its credit downgrade of the United States, the ratings firm sent a letter to securities regulators urging them to keep some proposed regulations as vague as possible on a provision that would require the firm to report “significant errors.” The letter was first noticed by Reuters. And is posted on the Security and Exchange Commission’s website and reported at Clusterstock.com.  (Great website even if you don’t like the name)
The drama continues to unfold, with our very own documentary of shocking errors in judgment.  We all need to pray for a happy ending where Main Street (us) and Wall Street (them) live happily ever after.  Or coming soon could be a scarier version of 2012.

Last week, our leaders of the Western World were shocked, shocked that the number of Americans who wanted to
work but couldn’t find a job increased in June, slamming our already fragile economy.
How can this be?  According to our government there are jobs out there if people really want to work.
The only logical conclusion is that our leaders live in a different dimension than the one we live in.  They
continue to ignore the fact, and it is a fact, that their demolition of the housing market has left our
economy in tatters and will continue to affect the employment numbers.
Turning their backs on the housing market initiated a domino-type tumble that has yet to stop.  Let’s start
with the obvious: No more trucks barreling down Interstate 10 piled with construction stuff and filled with
workers, eager to get to their destination to help build a new subdivision or mall.  Tile, granite, marble,
appliances, and furniture distributers have scaled back or closed up shop.  Ma and Pa restaurants, many of
which have been in business for decades, shut their doors.   There is not much of a demand for architects,
commercial developers and, dare I mention, home builders.
The tentacles are far reaching: New graduates with degrees in once desirable fields of city planning, social
work or law enforcement are finding with all of the government cuts, jobs are scarce.
And please, feel free to write your own paragraph on the employment fields that no longer need your
life-long skill set.
So what is a country to do?  Why, ignore it of course!  Our American Financial Guru’s continue to offer rock
bottom low rates to the big boy banks so they can spend the money on their toys, like credit derivatives and
other risky investments, to keep their bonuses at the level to which they have become accustomed.
Our Leaders continue to refuse to mandate that the Banks offer real options for homeowners to keep their
homes (instead of the past pretend programs).  FHA introduced a program last week allowing for up to twelve
months of deferred house payments for those out of a job.  But it is another volunteer program for lender
participation.   Why not lower principal balances and payments for current underwater home owners? It would
free up money to spend in the economy.   But that would not help the banks continue their march for world
monetary domination.
The restriction on families who short sold their home and making them wait long years is ridiculous.  Reduce
it to one year and let them re-enter the housing market.   Another suggestion is to reinstate a purchasing
incentive for first time home buyers.
Many of the foreclosed homes are going to out of country cash buyers.  It that what our leaders want, houses
owned by foreign investors?
But again, our government continues to talk around the employment and housing issues hoping it will just go
away.  Is Hope the new strategy for economic solutions?