WILL THE NEW MORTGAGE DISCLOSURE ACT CHANGE YOUR CLOSING TIMES?

This news just in courtesy of one of our trusted lenders, Aaron Gordon at Bank of America: In an effort to provide consumer protection and transparency when the buyer gets a mortgage, the Government has made law changes to mortgage loan processing and disclosures that take affect on July 30, 2009. Referred to as the MORTGAGE DISCLOSURE IMPROVEMENT ACT OF 2009, it is part of the Government’s commitment to making sure borrowers completely understand the terms and conditions of their mortgages and are given ample time to review what they are agreeing to.

If you are a homebuyer, here is what you need to know about it.

These changes will affect the processing times of loans. By being proactive and understanding the new Act, your closing dates should still occur in the usual 30 to 45 day timeframes that it takes for a transaction to complete, thereby minimizing the added stress of delayed closings.

Initial disclosures must be provided to an applicant within three days of loan application. No fees can be collected during this three-day waiting period, except for a reasonable credit report fee.

When a borrower makes an application, the lender will present them with initial disclosures. The disclosure package includes the Good Faith Estimate, Truth in Lending disclosure, and other legal forms as required by law.

The lender will not be able to collect any fees for appraisals until the borrower has had at least three days after getting the disclosures for review. This means that the appraisal report cannot be ordered until after the three-day waiting period after initial disclosures.
The borrower must get these disclosures again at least seven business days before he signs his loan documents. If he doesn’t, the closing will be delayed until he does get them and the seven-day period for review has passed.

The borrower must be provided a copy of his appraisal a minimum of three days prior to his loan closing. If he doesn’t, your closing will be delayed until he does get a copy and the three-day window for review has passed.

Any increases in fees that result in an APR change of 0.125% of the loan amount require re-disclosure. The borrower must then get his new disclosures and wait at least three days for review to close. Once again, this is being done to make sure the borrower has time to review what he is getting and be comfortable with it.

What if there are “surprise” costs at closing time? When that happens now, if the numbers are too far off from what was disclosed, he will have to leave the closing table, get new disclosures, get time to review, and will be unable to return for three days.

The only exception to this will be if it’s an emergency, such as if the home will be foreclosed on.

Also, keep in mind that if you change lenders in the middle of the process, the new lender will have to start the disclosure process once again. Changing lenders in the middle of the transaction could result in lengthy extensions.

Many borrowers today are often too busy to come to the office to make the application. These borrowers do it conveniently by phone or online. In these cases, the disclosures are mailed to them. As a result, the timeframes and wait period will be slightly longer.
Most lenders are estimating these changes could add three to 10 days to your closing times. Please plan accordingly.

So, let’s say you want to close as quickly as possible. What can you do to be proactive and make sure the closing time is fast as possible?

1. Make the application with your lender in person.
2. Get a fully executed, clearly legible copy of the purchase agreement as soon as it’s available from the lender.
3. Be ready to pay for the appraisal when asked.
4. Prepare and be ready to submit all requested documentation (pay stubs, W2’s, bank statements, etc.) within a day or two of application.
5. Carefully review the disclosure package and notify your lender of any corrections immediately.
6. Lock your loan at the time of application or early in the transaction.
7. Choose a credible, reputable, ethical lender you can trust to honor the rates and fees they disclose. Surprises at the closing table will result in lengthy delays.
8. Choose a lender whom you have confidence in. Changing lenders while in escrow will result in a lot of these disclosure clocks starting over.
   

If you do all of the above, there is no reason that your 30 to 45 day closing times should be affected by this Act.

It’s important to understand that this Act has been put in place so the buyer has sufficient time to make good, sound, responsible decisions about his loan. It is not meant to delay the process but rather, when taken into consideration, should justify that the loan is for his best interest. If you need straightforward real estate advice or a referral to any of our trusted lenders, please contact The Dulcie Crawford Group at 702-285-1990.

HOW TO TAKE ADVANTAGE OF THE $8,000 TAX CREDIT BEFORE IT EXPIRES FOR 1ST TIME HOME BUYERS!

Not many first-time homebuyers are aware that there is a considerable tax credit that is available for them. And if they know about it, they probably don’t know the details and how it can benefit them in their home search.

We have compiled the following information from trusted sources (i.e. mortgage lenders and escrow officers) to explain how the tax credit can be used to one’s advantage.

Highlights:

Timeframe: Must purchase a home (close and receive title) on or after January 1, 2009 and before December 1, 2009.

Down payment or closing costs: Qualifying buyers can use these funds upfront as a down payment or for closing costs.

FHA-approved lenders only: At this time, only FHA-approved loans are required if tax credit is used as a down payment.

Need 3.5% upfront: While the $8,000 tax credit can be used for the down payment or closing costs, home buyers must still come up with FHA's required 3.5% down payment on their own.

If you are buying a home this year, it's important to know whether you qualify for the $8,000 tax credit for first-time home buyers. Read on for details.

Qualifications for $8,000 tax credit:

• Must purchase a home (close and receive title) on or after January 1, 2009 and before December 1, 2009.
• Must be a first-time home buyer, which means you cannot have owned a home for the past three years prior to purchase.
• Must use as a primary residence. The home cannot be used as a vacation home or rental property.
• Cannot purchase a home from a close relative such as your spouse, parent, grandparent, child or grandchild.
• Must make less than $75,000 for a single taxpayer or less than $150,000, if filing jointly.

About the $8,000 tax credit:

• Use as downpayment or closing costs -- Initially, the tax credit was designed as a refundable credit on buyers' tax return next year -- either up to $8,000 or 10% -- whichever came first. Now, a new HUD initiative allows qualifying first-time home buyers to receive these funds upfront to be used as a down payment or money towards closing, as announced by U.S. Housing and Urban Development Secretary Shaun Donovan. This has been referred to as a bridge loan.
• FHA-approved lenders, only -- At this time, only the Federal Housing Administration (FHA) has issued guidance regarding the monetization of the first-time home buyer tax credit. Home buyers using FHA-approved lenders can apply the tax credit to their down payment.
• Home buyers must pay the 3.5 percent -- While the $8,000 tax credit can be used for the down payment or closing costs, home buyers must still come up with FHA's required 3.5% down payment on their own.

For more information on the $8000 tax credit, review these Q&A's from the IRS: http://www.irs.gov/newsroom/article/0,,id=206293,00.html

More relevant information can be found on the following links:

http://www.federalhousingtaxcredit.com/2009/home.html

http://portal.hud.gov/pls/portal/docs/PAGE/FHA_HOME/LENDERS/MORTGAGEE_LETTERS/2009_MORTGAGEE_LETTERS/09-ML-15%20USING%20FIRST-TIME%20HOMEBUYER%20TAX%20CREDITS.PDF

As in any financial transaction, we of course recommend consulting with your financial or tax advisor for implications specific to your situation. Call us today if you need referrals to any of our lenders, or for any real estate question, at 702.285.1990.

100% FINANCING WITH NEVADA BOND PROGRAM - FAST FACTS

First time homebuyers may not be aware that there is still 100% financing still available for well-qualified applicants, through the Nevada Housing Division’s Down Payment and Closing Cost Loan Program. The NHD offers the program to provide homebuyers under its First Time Homebuyer Program with down payment and closing cost assistance. This statewide initiative offered in every county in the state is one of the only 100% financing options left.

One of our preferred lenders, Aaron Gordon at Bank of America Home Loans, has provided us the following information:

Please bear in mind that this is a loan and a second mortgage - not a gift - which can provide up to $10,000 for down payment and closing costs.

The interest rate on a 30 year bond loan is 6.2000% today. As of 5/18, it’s 4.750% on FHA when you don’t use the bond.

The second mortgage of 3.5% to cover your down payment comes with an 8.20% interest rate and is a 20 year loan.

When is this good? If you have no other way to get the 3.5% down payment on an FHA loan.

On a $165,000 purchase, the Bond loan will cost the borrower an extra $150 - $175/mo. It makes a lot more financial sense to try and get the 3.5% or $7,000 down on this loan, as it will pay for itself within three years.

EXAMPLE:
Scenario 1
$165,000 sales price
3.5% REGULAR DOWN PAYMENT – 4.75% RATE
$845.00/month

VS.

Scenario 2
$165,000 sale price
0% DOWN PAYMENT – 6.20%
$992 + $49 for 2nd = $1041/month

This loan is not available for everyone and is based on qualifying guidelines. Although there are some strict eligibility requirements, this program may work for many first-time homeowners.

There are limited lenders in Nevada; Bank of America Home Loans is the main servicer.


Qualification Guidelines for the Nevada Bond Program
A first-time home buyer is defined as someone who has not owned or co-owned their own residence within the past three years. So even if you owned a home a few years back, if it’s not in the last three you may still qualify.

If you are purchasing in a "Targeted Area" there are no restrictions on former home ownership. Please contact Aaron if you think the home may be in a targeted area. These are usually areas where this is not as much resale activity and the State wants to stimulate its growth.

Total gross household income must fall within the Maximum Income Limits. In Clark County, if you have a 1-2 person household, income cannot exceed $78,480. If you have a 3 person or more household, it cannot exceed $91,560.

In Washoe County it can be a bit higher. In Elko County a bit lower. See the website for details at http://nvhousing.state.nv.us then click “NHD – Down Payment Assistance Program”.

The purchase price of the residence you wish to buy may not exceed the Maximum Purchase Price Limits for the area in which it's located.

Those maximums currently look like this:

• Clark: $349,515
• Nye: $283,981

Keep in mind: on a $349,515 sales price, the 3.5% down payment requirement would be $12,233 plus closing costs. Therefore, the $10,000 max bond help won’t quite cover that. Keep it under $300,000 if you cannot come up with anything.

Income must support the repayment of the loan pursuant to the underwriting criteria applied by FHA, VA, or Fannie Mae, as applicable. This simply means your loan has to be able to be approved by FHA, Fannie Mae, Rural Housing, or VA.

Also, if you require that assistance, you will have to prove that your assets, after closing, are $5,000 or less including, without limitation, cash, savings accounts, stocks, bonds and equity in real property. 401K is exempt, which is great news!!

You will also be required to successfully complete a First Time Home Buyer Education Course in person.

This is a fantastic loan program for first-time homebuyers who find themselves unable to qualify because they lack a minimal down payment.

However, due to historic low interest rates, they will want to exhaust all gift possibilities first.

LAS VEGAS SHOWS HEALTHY SIGNS OF RECOVERY

In a recent report from the Greater Las Vegas Association of Realtors through an article published in the Las Vegas Review Journal, Las Vegas’ home sales is continuing its upward trend for 13 consecutive months, although the trend in falling home prices continued in April.

As reported in the RJ:

“Realtors sold 3,198 single-family homes in April, a 78.3 percent increase from the same month a year ago. Overall, sales have more than doubled for the first four months of the year.

However, the median price dropped 39.9 percent to $141,720 as bank-owned properties dominate the market, accounting for about 80 percent of all sales and driving prices down.

The inventory of homes for sale, which peaked above 24,000 in 2007, has steadily declined to 22,112 in April, down 3.6 percent from a year ago.”

You can read the full story here: http://www.lvrj.com/business/44634067.html

The increase in home sales is largely attributed to unbelievably low mortgage rates and the abundance of homes for sale on the market. This is a golden opportunity for homebuyers because the bargaining power is in their hands. But one word of caveat: in today’s market where bank-owned and foreclosed homes flood the market, you need to work with a trusted Realtor who can guide you through the myriad choices and decisions you have to make, especially when it comes to the due diligence which includes home inspections. You need to have the best qualified professionals to assist you in identifying the potential problems that may arise with distressed properties that have been neglected or is in dire need of maintenance, as these can cost the homebuyer extensively in future repairs. It can be a time-consuming process so patience is indeed a virtue.

With the continued decline in home prices, the existing market is paving the way for a more affordable Las Vegas, although it will take a little more time for normalcy to set-in. For homeowners who are considering selling their home, it will be a case of what caliber of Realtor you have. Listing agents are a dime-a-dozen, and finding someone who can actually help you sell your home is like finding a needle in a haystack.

It doesn’t matter which side of the fence you are on. The Dulcie Crawford Group can help you whether you are a first time homebuyer or a homeowner who wants to sell your property. Call us today for real sound advice – we thrive in a market like this!

UPSIDE DOWN REFINANCE NOW AVAILABLE -THE OBAMA PLAN IS HERE!!

We are once again in high spirits to share this piece of good news that the Homeownership Affordability and Stability Plan (HASP), also referred to as “The Obama Plan” by some, has finally become available. This should bring some relief for homeowners whose financial situation are upside down and are left out in the cold because the value of their homes have significantly decreased, leaving them on a reluctant wait-and-see predicament. However, a word of caution from our preferred lenders Paula Clark of Wells Fargo Home Mortgage and Aaron Gordon of Countrywide Home Loans: this isn’t for everyone. Some will be too far upside down. Some won’t be eligible for a number of other reasons as we will outline below.

Still, this is very exciting news for those who are timely with their payments, want to refinance, but haven’t been able to take advantage of low rates due to valuation challenges.

Countrywide, which will soon be Bank of America Home Loans, is one of the first lenders nationally to market the new Homeownership Affordability and Stability Plan (HASP). Some call this “The Obama Plan.” This initiative is for borrowers who have demonstrated an acceptable payment history on their current mortgage but due to declining home values have been unable to take advantage of historically low interest rates to refinance or stabilize their payment.

Please read the rest very carefully. This will help many but not everyone.

THE GUIDELINES BELOW IS FOR CURRENT COUNTRYWIDE CUSTOMERS ONLY WHOSE LOANS ARE HELD BY FANNIE MAE AND FREDDIE MAC AS INVESTORS.

If you are not a Countrywide customer, contact your own bank and ask about your eligibility for HASP.

Here is a quick look at the highlights for the refinance piece of the plan:

• The maximum loan amount is $417,000 in Clark County.
• Your FIRST MORTGAGE cannot be upside down from the home's value by more than 105%. Your second mortgage may not count.
• The value of your home is NOT determined by an appraisal but by Fannie Mae and Freddie Mac’s automated systems. No appraisal is necessary.
• Your second mortgage does NOT count to determine your eligibility if that second mortgage is held by Countrywide or Bank of America. So let’s say your home is worth $200,000 today. You owe $210,000 on the first and the rate is 6.500%. You have a $70,000 second mortgage that’s held by Countrywide or Bank of America. This program allows you to refinance up to 105% of your first mortgage. This means you can refinance the first for $210,000 at close to today’s rates. The second mortgage will stay intact.
• If your second is with Countrywide or B of A, we will very likely re-subordinate our second mortgage to allow this refinance to happen.
• The investor on your loan has to be Fannie Mae or Freddie Mac.
• There is no cash-out. You cannot consolidate a first mortgage and a second mortgage.
• In this first phase, you are ineligible if you currently have mortgage insurance on your loan. If you bought your house using a first and second mortgages, you can still qualify.
• You are still eligible so long as you have no more than one late mortgage payment in the last 12 months. You may be permitted more than one late payment in the last 12 months on your Countrywide or B of A second mortgage.
• Your current loan cannot be VA, FHA, or a subprime loan.
• It's a streamlined loan. No income documentation and no appraisal. It’s a stated income loan. You won’t have to prove income again. You will sign a 4506-T however which is a form that allows the lender to obtain a copy of your tax return.
• Debt-to-income ratios may not matter if you are not increasing your current payment by more than 20%.
• There is no minimum credit score if your new payment is no more than 20% higher than your current one. 620 is the minimum if it’s 20% or more higher.
• Rates are slightly higher than current market but still very competitive.
• If you didn't have mortgage insurance before, you won’t have it now, regardless of your loan to value.
• Prepayment penalties on your current loan will be waived by Countrywide and Bank of America to make this program work for you if you are eligible.

If you are a Countrywide customer, give Aaron a call or send him an email to determine your eligibility. Please have your loan number ready when you call or email it to him so he can research your eligibility for you.

If you are interested in this program and are not a Countrywide customer, please contact your bank and ask them about their participation in HASP.

Aaron Gordon can be reached at:
Countrywide Bank, FSB
Cell: (702) 283-2333
Office: (702) 304-8900
Secure eFax: 1-866-905-7922
10190 Covington Cross Drive #190
Las Vegas, NV 89144
Email: aaron_gordon@countrywide.com
Web: http://countrywidelocal.com/aarongordon

Existing Wells Fargo clients need to call their lender and ask if their loan is a FANNIE MAE or a FREDDIE MAC loan. If they have a NON-Wells Fargo loan FREDDIE MAC insured loan- then they must go back to their existing lender to do the refinance loan. If they have a FANNIE MAE loan, then they can go to any lender that they want to do the refinance.

The important thing to remember is that relief is finally coming soon for existing homebuyers that are underwater!

Please feel free to contact Paula Clark at the following:
Wells Fargo Home Mortgage
8337 West Sunset Road, Suite 270
Las Vegas, NV 89113
Office: (702) 868-3920
Cell: (702)277-3554
eFax: 1-866-609-2470
Email: paula.l.clark@wellsfargo.com
Web: http://paulalclark.com/

MORTGAGE RATES REACH HISTORIC LOWS!

Many homebuyers are still on the fence whether to buy now or wait for rates and prices to go down further. The big question is: have we reached rock-bottom yet? That’s a question that no one can predict, and it is not going to be a simple answer as market conditions change on a daily basis.

The great news is, mortgage rates have reached an all time low and it would be most sensible to lock in the rates now if it fits within your budget. We have not seen rates like these in 52 years – and we don’t know how long this opportunity will be available to well-qualified borrowers. The bottom line is, do not take a chance and play a waiting game if you are ready to buy and has found a property you like.

The following information is provided by one of my preferred lender Aaron Gordon of Countrywide Home Loans:

“As the government announces more purchases of mortgage-backed securities, rates continue to plummet.

Interestingly, if you are still sitting on the sideline waiting for rates to drop further, the head of Freddie Mac came out this week and said he believes rates are at the bottom and any further drop will be minimal.

Plan on around:

• 4.375% WOW! (APR 4.508) FOR A 30 YR FIXED CONVENTIONAL LOAN with ONE POINT, NO ORIGINATION!
• 4.750% (APR 4.862) FOR A 30 YR FHA / VA LOAN, WITH ONE POINT, NO ORIGINATION!
• 5.750% (APR 6.024) ON A 30 YR JUMBO LOAN OVER $417,000 with ONE POINT, NO ORIGINATION!
• 5.125% (APR 5.262) ON A 5 YR JUMBO AR M with ONE POINT, NO ORIGINATION!

NO ORIGINATION FEE ON ANY OF THE LOANS ABOVE. These rates are for purchases only. Refinance rates are slightly higher.

NEW GUIDELINE ANNOUNCEMENTS THIS WEEK:

FHA announced new limits to cash-out refinances. They used to allow cash-out up to 95%. It’s now been lowered to 85%. Here are the rules:

• Must have owned the property at least 12 months
• You cannot be behind in your mortgage.
• You cannot have a non-occupying co-borrower to qualify for the new cash out limits.”

Here are more good news from Paula Clark, also a preferred Home Mortgage Consultant from Wells Fargo Home Mortgage:

“Friday's news showed that consumers are being understandably cautious with their finances, as the Personal Savings rate remained above 4% once again in February and among the highest savings levels seen in a decade.

Meanwhile, the government continues to make bold moves to help our economy. On Monday, Treasury Secretary Geithner unveiled a plan to remove toxic assets from financial institutions by using money from the $700 Billion TARP fund. The government will help mitigate the risk by offering private investors Billions of dollars in low-interest loans to help finance the purchases. Indeed, it's a bold strategy - let's see if it pays off!

And...there's room for cautious optimism on the economy, as good news was noted on several fronts last week. The housing market received good news when both Existing Home Sales and New Home Sales came in stronger than expected. Additionally, Durable Goods Orders for February came in better than expected, showing the first increase in six months, and the Core Personal Consumption Expenditure Index (Core PCE) showed inflation is presently at tolerable levels. Plus, the US Dollar received a boost when China said it will continue to purchase US Treasuries.

Bonds were jostled around mid-week, but home loan rates ultimately ended the week very close to where they began...near historic lows.”

You can read Paula’s full bulletin at http://www.mmgweekly.com/w/w.html?SID=81ca0262c82e712e50c580c032d99b60

Paula can be reached at tel. 702.868.3920, Cell 702.277.3554, email at paula.l.clark@wellsfargo.com, or on the web at http://paulalclark.com/.

Overall, the market is showing some robust activities in the last weeks. We at The Dulcie Crawford Group are always at the forefront to bring you the latest updates and will be happy to answer any questions you may have and assist you in your homebuying process. Call us today!

NEVADA BOND PROGRAM/100% FINANCING - LOWERS RATES!

Today, the Nevada Bond Program, the only active program with 100% financing, announced lower rates. Effective with new loan registrations on or after March 12, 2009, the Nevada Housing Division will adjust rates for the 2008 program as follows:

30 YR-FIRST MORTGAGE IS NOW 6.67% (it was 7.250%)

20 YR-2nd MORTGAGE, WHICH IS USED FOR THE DOWN PAYMENT ASSISTANCE, IS NOW 8.50% (used to be 9.250% )

The NHD bond program offers a first mortgage along with a second mortgage for down payment assistance of up to $10,000. Restrictions apply.

For details, please feel free to contact my preferred lender:

Aaron Gordon
Home Loan Consultant / Sales Manager
Countrywide Bank, FSB
Cell: (702) 283-2333
Office: (702) 304-8900
Secure eFax: 1-866-905-7922
10190 Covington Cross Drive #190
Las Vegas, NV 89144
email: aaron_gordon@countrywide.com
web: http://countrywidelocal.com/aarongordon