Gene's Bit of Blogging
Mortgage & Transaction Processing
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Gene Mundt, Sr. V.P./ Mortgage Lender - The Federal Savings Bank: Posted on Wednesday, April 18, 2012 2:06 PM
New Changes to Mortgage Rules
and Regulations Don't Have to be
This Summer's "Beanball" and Knock Buyers Out of Their Home Buying Game
 The ever evolving mortgage business requires an expertise and personal commitment by its professionals to provide excellence in service and quality, not to mention results. And part of that commitment includes education and the imparting of knowledge to the public, their clients, and referral partners to industry guidelines and changes to those guidelines.
A recent announcement from HUD, on the processing of those loans intended to be insured with an FHA loan, indicates that further credit tightening is warranted when a Borrower owes more than $1,000 in bills in collection.
In the past, an Underwriter could use discretion and approve such credit scenarios. Now, that is no longer the case ... and that scenario is NOT approvable. Now a Borrower MUST pay-off that debt to qualify, or at minimum, have established a sufficient past history of paying back their creditors on a monthly basis, if not in full. And that includes medical collections, an area where some leniency was also applied in the past.
Now debate may rage about the intelligence or need for this new HUD decision, but the debate changes nothing. The bottom line is: This new ruling is in effect. And that means further education of the home buying public is absolutely necessary regarding it at this time, for it WILL impact Buyers who:
- Have the required minimum Credit Score, but have outstanding, past due collection accounts.
- Do NOT have the funds needed to pay-off debts/collections in their entirety ... but still have the necessary savings for Down Payment and Closing Costs.
The above just points out one more huge reason we in the real estate industry need to educate the public about the home buying and mortgage process better ... and the importance of getting ALL Home Buyers, not just some ... "pre-approved" for their purchase and/or mortgage financing (sooner than later)!
 So Buyers, please take note: This new ruling recently "pitched" at us by HUD does NOT mean your "beaned" and out of your home buying game. It just means this ...
Since HUD is stating that a 3 month payment history, or longer, is needed to approve a scenario with Collections totaling $1,000 or higher ... if you're looking to buy a home in a projected time frame of 6 months from this date, you should absolutely get "pre-approved" NOW!
If you're hoping to become a home buyer, contact me (or your own lender). Take action to stay in the game! Don't hesitate or wait any longer. It's
best to start the "pre-approval" and mortgage financing process
earlier than later. Give yourself, and your mortgage lender, the time to work-out any
credit issues that might be present ... and start collecting the financial
information and documentation needed for mortgage application.
If an agent/broker, pass
this advice on to ALL your potential buyers and everyone else you know so they too can pass it on. Educate as many as possible to these new changes. Save
home buyers, and yourself, the disappointment of starting the home buying and "pre-approval" process "too
late".
As a matter of policy, it is my opinion that it is extremely important that ALL home
buyers talk with a mortgage lender to be "pre-approved". That this should
be established as a priority and absolute necessity.
Home Buyers should know, and respect, the
fact that Agents/Brokers invest much time, effort, and dollars into
their services and those receiving them ... and respect that fact.
These facts together dictate that (in the over-riding cases) ALL Home
Buyers be "pre-approved" prior to their Agent showing them homes.
In the long-run, Buyers are much better served adhering to a "pre-approval" rule.
There are fewer surprises and last-minute issues to see to once actual
mortgage processing begins. The entire process will run more smoothly
and be more enjoyable.
HUD, and other governmental agencies, can "pitch" us new rules and regulations now and in the future ... but it does NOT mean
they have to be "bean balls", knock Buyers out, or keep them from buying a home.
Good, complete
preparation by Home Buyers, their Mortgage Lender, and all their real estate professionals, can mean
these changes are addressed and handled fully to the satisfaction of HUD. Successful home buying and Mortgage Closings can be a result ...
* Get the professional mortgage information and service you need to buy your home, whether in Will County, IL, Chicago, Chicagoland, or across the U.S. in any of the 50 states. Work with a "big league"
mortgage professional that knows and understands how to guide and
assist you through today's challenging mortgage processing and home buying experience. Contact me today! I'll be glad to hear from you and happy to have the opportunity to earn and win your trust and business. I can be contacted through any of the following:
Direct: 815.277.4036 Cell/Text: 708.921.6331
Conveniently at Skype: 630.219.1316
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Buying a Home, Credit Reports/Fico Scores, Mortgage Banker, Mortgages, Real Estate, Working with a Mortgage Professional, Credit and Financial Counseling, Mortgage & Transaction Processing, First-Time HomeBuyers, Obtaining Mortgage Quotes, Pre-Approvals, & Info, Debt, Education, Asking credit and mortgage questions, Home Buyers, home buying, FHA Mortgage Lending, Closing Costs, Pre-Qualification/Pre-Approval, HUD
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Gene Mundt, Mortgage Lender: Posted on Monday, March 19, 2012 5:52 PM
Experience Your Own Home Buying "March Madness"  Ever try to guess when the best day of the week is to buy gas for the car? Ever try to predict the stock market? Second-guess Presidential primary winners? How about NCAA "March Madness" Tournament winners?
I bring this up, not only because the season of "March Madness" is upon us, and guessing "winners" of any kind is currently on a lot of people's minds ... but because I'm hearing lots of questions from clients regarding the timing of locking interest rates.
And although I agree that guessing the winner of primaries, the NCAA tournament, etc., can be fun and rewarding ... and I also believe securing a great interest rate is of importance ...
I also think that:
If all the positives currently available in housing and mortgage financing aren't enough to get you off that home buying fence and in the game now ... there is most likely something else contributing to your NON-decision to buy.
If: - The current interest rates for a 30-year fixed-rate mortgage (4% +/-) don't get you off the bench ...
- A 15-year fixed-rate mortgage (3% to 3.5% range) doesn't make you lace-up your home buying high-tops ...
- Or your not hearing the roar of the crowd cheering "ARMs!!" ... (under 3.5%), "FHA!!" (3.5% down) ... or other special financing programs attributes ...
It's time to go back to the clipboard, re-examine your game plan, and reflect intently.
Also consider this. Taking your home buying game into overtime now may cost you more money when you finally buy too.  In the last week alone ...interest rates went up a 1/4% ... and ... for the same interest rate quoted prior to that increase ... a borrower will have to pay 1 "point" (1% of their loan amount) as additional Closing Costs. (See my article regarding mortgage "points") A 1 "point" increase in costs?? Oooooo ... Foul! Somebody blow the whistle!! Penalty!
Listen up if you're considering entering the home buying market. My message is a timely one. The NCAA isn't the only thing experiencing "March Madness". These are the current "stats" being found in many March 2012 housing markets and present financing terms ...
Approvable Credit
+ Stable Employment
+ Great Interest Rates + Fantastic Housing Prices + Attractive Down Payment Requirements ='s A Winning and Happy Home Buyer!
Don't focus so intently on only one aspect of your mortgage financing game, that you're blinded or unintentionally "double-dribble" on another.
Find a professional and experienced big league home buying "coach" (your mortgage lender). Ask them questions, including, "If I postpone buying a home now ... how long will it take me to regain the monthly interest rate savings I will pay/lose in EXTRA "point" fees at my Closing later? What's my financial tipping point? When is it a "losing" proposition for me to wait further to buy?"
My suggestion is this. The time to prepare and enter the game is now, if you want to buy a home and your credit and finances are in good shape. This is especially true in many housing markets where they currently are returning to pre-recession good health.
Don't let the opportunity to take part in the winner's bracket slip away. Surround yourself with skilled team members. Expect to work a little at this game. Grab your gear. Sharpen your focus ... and your home buying elbows.
Do all this, and YOU will be a "March Madness" winner!
* Work with a team player with the skills and knowledge to guide you to the winner's circle in all 50 states. Contact me today. I'll put my 35 years of experience and expertise to work on your behalf. I can be contacted at any of the following: Direct: 815.277.4036 Cell/Text: 708.921.6331 Skype: 630.219.1316
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Buying a Home, Credit Reports/Fico Scores, Mortgages, Mortgage & Transaction Processing, First-Time HomeBuyers, Obtaining Mortgage Quotes, Pre-Approvals, & Info, Mortgage Closing Costs, Asking credit and mortgage questions, Seeking Advice, Home Buyers, home buying, Right Time to Buy a Home, Home Ownership, Down Payment, Mortgage Costs, Closing Costs
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Gene Mundt, Mortgage Lender: Posted on Thursday, March 01, 2012 6:10 PM
How to Best Prepare Your
Credit and Financial Position BEFORE Beginning a Home Search Part 2
 Yesterday, I wrote Part 1 to this post. In that portion of this blog, I covered WHY it's important to Plan and Prepare for your home buying/mortgage financing well in advance to actually seeking your mortgage pre-approval or home search.
I also explained and listed what credit/debt, financial documents, and information you will need to gather and then supply to me/your lender when you reach that stage of seeking your mortgage pre-approval.
In this, Part 2 of my continuing blog, I reiterate the importance of adhering to the guidelines provided, especially if you're a first-time home buyer, never having been through the home buying/mortgage financing process before.
Following this pro-active guideline WILL improve anyone's home buying and mortgage financing experience ... streamlining it and enhancing the likelihood of your receiving better interest rates (saving money), more and better mortgage options to choose from, and a less-stressful/more successful mortgage processing.
So after collecting those things listed in Part 1 of this post, what's next?
Credit
- Always Remember: Call/Contact your Mortgage Lender, if you need ANY advice. If considering a purchase in the next 90 days, or in the next year (if you have credit issues especially,) contact me/your mortgage lender for a FREE tri-merge credit report. Find out just what/where you stand credit-wise, then take action!
- Manage your credit cards, making sure ALL balances are kept BELOW the maximum credit available (at worst), and below 10% of the limit (ideally).
- Know the ABC's of your TOTAL debt, from the following criteria:
 - Mortgages (Know the name and address of the Lender, Amount Still Owed, and Your Monthly Payment Amount)
- Home Equity Lines (Again, Know the name and address of the Lender(s), Amount(s) Still Owed, and Your Monthly Payment Amount(s).
- Student Loans (Again, Know the name and address of the Lender(s), Amount(s) Still Owed, and Your Monthly Payment Amount(s).
- Auto Loans (And finally, the same as above. Name, Address(es), Amounts Owed, and Monthly Payments)
- Installment Loans (Meaning: Boat financing, Recreation Vehicles, Motorcycles, Secured Loans, etc.)
- Credit Cards of ALL Types (Know who holds/offers the Card, Account Number(s), What is the Outstanding Balance on Each, and the Minimum Monthly Payment of Each)
Attending to the above IN ADVANCE of entering the mortgage pre-approval process or home search, negotiating a Real Estate Contract, and getting your loan documents together ... not to mention the home inspection process, finding a Real Estate attorney, and shopping for the Homeowners Insurance ... can make your life much easier and eliminate many of the stresses of home buying and financing.
Following these guidelines, can also be the difference between a smooth mortgage approval process ... and failure to be approved for the loan you need.
Invest in yourself and your future. Spend the time needed to get organized. Give yourself the time needed to polish-up those credit scores to the best they can be. Be prepared!
Successfully do the things I suggest above and in Part 1 of this blog ... and you can thank me when we talk about the financing for that new home you're dreaming of ...
* Contact me with your credit and mortgage financing questions and needs. Whether in Chicago, Chicagoland, or across any of the 50 states, I can help. With 35 years of mortgage experience and expertise, I can answer your questions, and assist and guide you successfully throughout your credit enhancement and mortgage process ... and into becoming a new home buyer. I can be contacted through any of the following means: Direct: 815.277.4036 Cell/Text: 708.921.6331
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Credit, Credit Repair, Buying a Home, Credit Reports/Fico Scores, Mortgage Lender, Mortgages, Mortgage & Transaction Processing, First-Time HomeBuyers, Choosing a Mortgage Lender, Debt, Asking credit and mortgage questions, Seeking Advice, Home Buyers, home buying, Pre-Qualification/Pre-Approval
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Gene Mundt, Mortgage Lender - Chicago Bancorp: Posted on Tuesday, February 07, 2012 10:24 AM
Locking-In Your Interest Rate For Your Mortgage Financing
What You Should Know ...
One of the most confusing aspects of the mortgage financing process comes when it's time to "lock-in" an interest rate on a loan.
 Purely trying to explain the "hows, whens, and whys" of enacting a "lock-in" of a rate ... especially while talking over the phone or communicating via technology ... can confuse the heck out of most clients. Nevermind when you start to add multiple mortgage programs comparisons ... or several different mortgage lenders into the mix.
I presently have a potential client that is struggling through this portion of her initial financing inquiries right now. She's narrowed her mortgage lender choice down to myself and one other lender. It's my opinion, that she is getting a bit of a shell-game played on her by this other lender she is talking to.
Time will tell, but the lower interest rate she says she is being quoted by them, just doesn't seem to hold water to me. And they are rather evasive when asked about whether that rate is truly "locked-in" for her.
But her plight, which is not an unusual one, brings the dilemma surrounding "lock-in", and the confusion it causes, into light once again. So I thought perhaps addressing this confusing step of the mortgage process here might be of some help.
Let's answer some of the questions I hear most often ... and provide some basic steps to help you get the information you need regarding "locking-in" interest rates ...
First ... What exactly IS the process of "locking-in" an interest rate?
"Locking-In" is the making of an agreement (confirmed in writing) between the Borrowers and the Lender's Representative (Loan Officer) as to the interest rate and mortgage type and term of loan, and a subsequent guarantee of that rate for a specific period of time. The "lock" is typically done at the time a formal loan application is taken and/or another agreed upon time between the application and a week before closing.
Second ... What exactly does this "lock-in" process accomplish for a mortgage client?
"Locking-In" secures a current interest rate for the duration of the lock period, typically as long as the closing date. It protects the Borrower in the event of "changing" markets and "changing" interest rates.
Third ... How long does a "locked-in" interest rate typically last?
As a rule, rate locks are available for 30, 45, and 60 days. Variances can be obtained for longer term locks.
Fourth ... Why does this process sometimes get so darn confusing?
Not every bank, not every loan officer, deals with the discussions on rates, rate locks, fees, and points in the same manner, leading to differences that can become overwhelming for the borrowers. And each bank varies in fees that they charge, contributing to further confusion of borrowers.
Fifth ... If I am speaking to multiple mortgage lenders regarding interest rates, closing costs, and "lock times", what information do I need to acquire from each to accurately do my comparison?
 Most importantly, compare apples to apples. Make sure that the "lock-in" periods you are comparing are the same, that each mortgage lender has the same information (i.e. credit report, down payment ability, employment information, purpose of the loan, etc). To ensure that each mortgage lender is understanding your situation fully, compare Good Faith Estimates prior to "locking-in" with anyone.
Sixth ... Is there a "Lock-In" fee?
There can be ... so ask this upfront. Every mortgage lender varies on this policy, but typically there is no "lock-in" fee. "Lock-In" fees are typically associated with longer "lock-in" terms.
I also recommend strongly, that you do what you did in school. Take notes! Write things down for future reference and recall. Trying to remember all the information you are given without taking this measure will be almost impossible.
And I want to add one more important piece of information for you here ...
In today's mortgage financing, it's virtually impossible to compare the mortgage scenario and background of one client to another's. Mortgages ... and the quoting of interest rates and mortgage program options ... have become increasingly detailed and personal to each client.
Like winter's snowflakes, you will not find two financial scenarios 100% alike. So comparing your experiences and the information you have received to another's is a waste of time and will only serve to add to your confusion.
I cannot stress enough just how much a client's personal financial details contribute to the outcome of their mortgage financing, their closing costs, and the interest rate they will receive. You may get a ballpark idea of each from plugging information into an online mortgage calculator ... but then again, you may not. Mortgage financing is much like a recipe. Working with all the right ingredients in the exact amount needed makes a huge difference to the outcome.
In the present financial climate, it takes an experienced and knowledgeable mortgage professional to correctly work with all the variables related to your personal financial situation. Only someone that has the needed expertise and experience can discover and arrive at the beneficial mortgage options that lie before you ... and then "lock" you in.
Also remember that it takes dedication, attention, and work on the client's part too.
I hope that the information provided here on interest rate "lock-in" will assist those presently pursuing mortgage financing. Should you need further information or explanation regarding this part of the mortgage process, please do not hesitate to contact me. I'll be glad to assist you further and in every way I can.
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Buying a Home, Financing, Mortgage Lender, Mortgages, Mortgage & Transaction Processing, Obtaining Mortgage Quotes, Pre-Approvals, & Info, Choosing a Mortgage Lender, Helpful Hints, home buying, Mortgage Costs, Closing Costs, Interest Rates, Pre-Qualification/Pre-Approval, Interest Rate Lock-In
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Gene Mundt, Sr. Vice President - Chicago Bancorp: Posted on Monday, January 23, 2012 1:01 PM
The Appraisal Process ... Chances to Learn More, Share, and
Be Happy When the Stars All Align
I believe the topic being highlighted at this luncheon greatly influenced members' decision to attend ... as it was a topic that touches upon all of us within our industry frequently. The topic in question??
Appraisals!
Three Rivers had arranged for 3 local, independent Appraisal firms (one of which is on my Chicago Bancorp "approved Appraiser" list) to be on-hand and provide presentations regarding the current market, the challenges presented by the lack of sales, and the "type" of sales occurring and needing to be appraised.
One Appraiser addressed the recent changes to the Appraisal report itself. He talked of the "exactness" that is required in certain categories where adjustments are made. He drove home the point that Realtors can help Appraisers greatly by providing detailed information within their listings.
How does that more detailed information help the Appraiser? It was pointed out that it most certainly assists from an accuracy standpoint ... but it also greatly improves the ability of the Appraiser to provide a more timely turnaround on the completed Appraisal too.
The second Appraiser discussed the need to satisfy mortgage lenders' Underwriters with detailed and accurate reporting ... sometimes with as many as 6, 7, or 8 Comparables being utilized within an Appraisal report. All the Appraisers on-hand for the Learning Luncheon agreed that 4 Closed Sales and 2 Active Listings were the starting point for most of their Appraisals.
When asked if they avoided using "Short Sales" or foreclosures as Comparables, to a person they said, "no one wants to have to use "distress" sales, but name a housing market that is "free" of them? This is especially true when needing to use Comparables that SOLD in the last 6 months, were in the same neighborhood or marketplace, and were similar to the Subject Property."
Many of the Realtors in attendance wanted to know the "magic formula" that Appraisers use to "adjust" for all the above factors? Unfortunately, the reply was, "There is none".
Again, all 3 Appraisers stated that only adjustments for true differences in the properties were being allowed. Condition of the Comparables, if inferior or superior to the Subject Property, could be considered and adjusted for. But there should NOT be expectations that a Comparable that was sold as a Short Sale or Foreclosure should ... or would ... get a "bump up" in value because of the terms of that Sale ... ESPECIALLY if there were no "traditional" market sales to be found.
 Of much interest to those in attendance, was the discussion of the new Appraisal Requirements recently enacted. Discussion regarding those ratings of C1 to C6 (Best to Worst), and Quality of Construction Ratings, also from Q1 to Q6 (Highest to Lowest), with specific definitions for these ratings from 1 to 6, raising many questions for clarification.
All of the Appraisers indicated that the time involved in completing an Appraisal had doubled or tripled in the last few years. They noted that the ability to satisfy a Mortgage Lender or Underwriter has become increasingly difficult in recent times. Someone wondered aloud, "Why is that"?
A variety of answers were provided by the Appraising viewpoint, but I (as a Mortgage Lender) believe the real answer is: that Appraisals, which are the support for the Value Estimate arrived at, and the "completeness" and "accuracy" of the Appraisal Report, remain the biggest hurdle for a Loan Originator and Underwriter to get past when a loan file gets SOLD in the secondary market. You simply must have a logical, defensible, and solid Appraisal Report to satisfy Quality Controls of End Lenders ... Fannie Mae, Freddie Mac, and independent loan servicers.
The end result of the Appraisal itself must be that the Buyer pays a fair price for their home. But the Mortgage Lender must retain the right to know the "true market value" of the property being purchased or lent upon. And thirdly, the "Agencies" themselves need to know that the value was arrived at without any undue pressures or influences.
These days that happens when the stars are all aligned ... a truly beautiful thing to behold when it occurs.
The Three Rivers Association of Realtors is to be commended for hosting this important and timely topic for discussion and education at this month's Learning Lunch. The more everyone involved within our industry knows and understands of each other's contributions to the process of buying, selling, and financing homes, the better. It makes the entire transaction flow much more smoothly and easily toward successful conclusion. And ultimately is what we all want ...
 * Looking for an experienced Mortgage Lender within the Will and Grundy County Area? Or a Referral Partner that has the expertise, knowledge, and wide program of services to satisfy and successfully close the transactions of your clients? I have over 35 years of mortgage lending, appraising, and financial planning service and expertise that will accomplish that and more.
Contact me today ... I'll love hearing from you and also cherish the opportunity to earn your trust and mortgage business. I can be contacted through any of the following means: Direct: 815.277.4036 Cell/Text: 708.921.6331 Skype: 630.219.1316 Available via Your Mobile Phone/Devices Now!
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Mortgage Lender, Mortgages, Real Estate, Appraisals, Localism Posts, Conducting Business, Mortgage & Transaction Processing, Education Opportunities, home buying, Appraisal changes, Grundy County, Three Rivers Association of Realtors - Will and Grundy Counties
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