Since one of the last blog post on my site from June 2007  “Buying a second home in the United States as a Canadian” things in the mortgage industry have changed drastically.  Along with all the changes and tightening of  the lending guidelines Loan Programs for Foreign Nationals buying Real Estate in the US have either completely disappeared, or the few programs remaining have down payment requirements of at least 50%.  

But now borrowers from Canada with a strong profile and no credit blemishes and significant reserves have the option to get a mortgage in the US with 35% down.

Yes, there are still a couple of hoops to jump through:

• Non US citizen with a valid passport and visa
• Purchase & rate and term refinance; no cash out
• Up to 65% LTV max
• Up to 55% LTV on rate/term refinance
• Max $650,000 loan amount
• Standard Debt to Income Ratios 35/45
• Borrowers must pass OFAC’s SDN list
• Borrowers must show a minimum of liquid reserves for 24 months Principal and Interest, 12 months reserves must be held in a US Bank
• 90 days seasoning requirement for all assets. Can be domestic or foreign.
• Self employed borrowers require a letter from an accountant/CPA verifying income figures for the last two years and providing a year to date income figure.
• Borrower’s who are politically exposed (PEP) are ineligible
• Salaried borrowers must provide a letter from the employer stating their current monthly salary and a current valid pay stub for a two year look-back. Bonus income may only be used with a 2 year history.

Finally there is an option available for our Canadian and other Foreign friends who would like to purchase a second or vacation home in sunny Arizona without having to have to pay all in cash.

Any Questions?

Distressed Arizona Homeowners to get more Help!

Click here to get a HARP refinance rate quote.

Today we got good news from the Federal Housing Finance Agency that changes to the Home Affordable Refinance Program (HARP) are coming.

When HARP was announced in 2009 it was very limited to situations where the first mortgage is no more than 105% of the current value of the home. Needless to explain the limitations with the falling home prices and help did not reach too many homeowners. Even with the present 125% Loan to Value ceiling many homeowners are still too far under water.

But very soon there will be a much stronger lifeline available to troubled homeowners and the new improved HARP Program will reach and help more borrowers.

The biggest improvements include:

• The 125 Loan To Value Ratio Ceiling for fixed-rate mortgages will be removed.
• No Appraisals (Fannie Mae and Freddie Mac will use automated valuation models where available, if it is not available you still will need a new appraisal)
• Less fees for borrowers who refinance into shorter terms, Lower Fees for other borrowers

Now you probably ask what the requirements are and who may be eligible for HARP:

• Fannie Mac or Fannie Mae must own your current Mortgage (you can check here and here)
• Your mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31st, 2009
• Your current Loan To Value Ratio must be greater than 80%
• You must be current on your present mortgage at the time of refinance, no late payments in the past six month and no more than one late payment in the past 12 months
• Your mortgage cannot have been refinanced under HARP previously – unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009

These changes and enhancements will become available as early as November 15th 2011 and are set to expire on or before December 31st, 2011.

With no LTV requirements, no appraisal and fewer loan fees, folks there is hope!

 Related articles

• US announces help for underwater homeowners (bottomline.msnbc.msn.com)
• White House to Announce Fannie/Freddie Mortgage Refinance Plan (news.firedoglake.com)
• Obama to bypass Congress on mortgages (cbsnews.com)
• Twelve Questions on Obama’s Refi Plan (blogs.wsj.com)

Mortgage Interest Rates Hit Historic Lows for 2011:

I am going to spare you with all the details why mortgage interest rates hit historic lows for this year.  By now most of us are already numb to the fact that mortgage rates have been historically very low for a while and we are getting bombarded with all kinds of  advertisements reminding us that rates are low. The most annoying one in my book are automated phone calls I receive at dinner time promising me that if don’t press “1″ now then the Federal Reserve will blow up  and my chance lowering my rate is gone forever.

We all get it: Mortgage Rates are very very low! And if you don’t believe me, check out the freshly updated Historical Mortgage Rate Charts over at Jay Thompson’s blog aka The Phoenix Real Estate Guy.

Regardless if you a first time home buyer going through the process qualifying a mortgage or a veteran home owner considering refinancing an existing home loan – Dont listen to the hype about low rates! One media outlet contemplates whether the American Dream is over or not, another writes that it is time to buy again.

For most home owners who think about refinancing the first thing to consider is whether there is enough equity or value present in the real estate owned. In this declining real estate market most consumers would be just happy to do a rate and term refinance. Lowering the interest and changing the term of the loan can tremendously impact the cash-flow situation  and positively impact the overall financial picture. But be careful, just a super lower rate may or may not be the way to at all because you have to put closing costs of the new loan and how long you plan to stay in your home into the equation. For those of you who have been in your home for a long time, perhaps a cash-out refinance may be doable to pay some other higher interest debts.

It just  really depends on the unique situation of each individual.

For those of you who are thinking of buying a home my biggest advice to you is not to put the buggy in-front of the horse. Nowadays a 720 Fico score doesn’t necessarily mean that you automatically qualify for a home loan and having no credit at all doesn’t necessarily mean that you automatically will be turned down.

So what is one supposed to do with stricter mortgage guidelines and interest rates going lower and lower.

Jeff Belonger who writes on MortgageMythBusters.com hits the proverbial Nail on the head:

buying a home should not be a split second thought, that you get up and do it now. As a buyer, if you know you don’t have the best credit now, get with a true professional to help you get to that point

Remain calm but stay enthusiastic, don’t listen to the media hype and seek advice from trusted professionals

And now it is time for a little Friday-Humor:

I am not a rapper, but if you have any questions regarding how to go about getting pre-qualified or if you are thinking about refinancing you home I am just one click away.

Your  MyCityLender

Why I moved to MyCityLender:

Wow it has been almost a year and you probably wondered what happened since my last blog post? Yes, I am still around…

The most exiting thing was (and still is) my move to MyCityLender last August. That was just after licensing for loan officers went into effect July 1st 2010 but before the changes how loan officers are compensated for a home purchase or refinance transaction.

These are turbulent times in the mortgage and real estate arena therefore it is very important to have a partner who is willing and capable  to adapt in this challenging lending environment and economic climate. Ten years ago when I first started with Lund Mortgage, the mortgage-industry was very different, and even more so when I changed gears, REALTOR® to Loan Originator, with Sunstreet Mortgage in 2010.
The average consumer most likely does not understand that small lenders are facing a lot of hurdles to stay in business. One example is that HUD eliminated the independent approval for Mortgage Brokerages (Non-Supervised Loan Correspondents).  In doing so, they also changed the minimum net-worth requirement for Non-Supervised Mortgagees (Mortgage Lenders) from $250,000.00 to $1,000,000.00+. As a result, small lenders, small brokerages, and stand-alone mortgage brokers are disappearing.  With that, opportunities for personal customer service keep also disappearing. I don’t know about you – but I really prefer to experience and provide internal and external customer service versus being just another number in line…

With MyCityLender I found a new home where I am enabled to provide my clients with great personalized service. MyCityLender.com  is a small company (about 20 employees) however MyCityLender is a Full Eagle Mortgage Lender, which means that we process and underwrite loans in-house with full HUD approval status.

Fast forward to today:

There is more exiting news to come… but I just wanted to make sure that you all know that I am still around originating mortgage loans!

July 1st is approaching fast and that is the deadline for Arizona Mortgage Loan Originators who do not work for big Interstate Chartered Banks to obtain their Loan Originator License which is mandated by the Secure and Fair Enforcement for Lending. Act of 2008.

In other words, if your Loan Officer does not work for a big retail bank then he or she cannot originate a mortgage loan after June 30th, 2010.

Quick Facts as of June 10th 2010:

• 1200 Loan Originator Licenses have been issued (yep, including mine)
• 200 Loan Originator License Applications have been reviewed and submitted back to the applicants to resolve outstandindg deficiencies AND the applicants have  responded back to the request
• 800 Loan Originator License Applications have been reviewd and submitted back to the applicants to resolve outstanding deficiencies but have not responded back back (yet).
• 1100 Loan Originator License Packages have yet to be reviewd.

Amazingly, that is only a total of 3300 individuals who have sent in an application package to the Arizona Department of Financial Insitituions to get licensed; and 800 of them haven not bothered to respond with the reequest to provide additional information and/or to clear any outstanding deficiencies.

Here is a video of Paul Klimke, Vice President of the Arizona Association of Mortgage Professionals, presenting the latest staticstics about how many loan originators applied; what there license status is; and what and individual with or without a loan originator license can or cannot do.

Finally, we are entering a new era in mortgage lending and this industry has been elevated to higher standards. It is about time…

photo credit: Nicholas_TI just received confirmation from one of our investors that it looks like that funding for the USDA Guaranteed Rural Housing Program is back!

“In view of the information we have received today from USDA Rural Development regarding the Agency’s ability to issue loan approvals (Conditional Commitments: RD Form 1980-18) that are subject to Congressional action, standard interest rate lock and lock extension policies have been reinstated effective immediately.”

This means, in plain English, that USDA funding is back and we are able to originate USDA Home Mortgages and operate like the previous year.

Please share the good news, especially if you know anybody who is considering buying an eligible home in one of the designated areas in the Phoenix metro area such as the City of Maricopa, parts of Queen Creek and all of Casa Grande, Arizona.

If you are looking to own a home in these areas, you have good credit; however, you feel you don’t have enough reserves or down payment don’t wait any longer!

100% financing with USDA is back!!!

photo credit: Allie_CaulfieldUSDA is out of Funds – No conditional commitments!

Times are turbulent in the mortgage business and the latest news about whether  or not the USDA has funds left, and also if the USDA will be able to continue to fund (subject to conditional commitments) is just another example that things are constantly changing.

Just a couple of days ago we got news that USDA will continue to fund loans but as of today I have confirmation that USDA is officially out of money.

At this time the USDA is out of money and will not be issuing funds subject to conditional commitments.

Subsequently there is not a really a viable 100% financing solution out there unless you qualify for a VA loan or you manage to find a $100 down Hud Home without getting outbid.

The USDA home loan has been such a great program for the Phoenix Metro area since not-so-rural areas like the City of Maricopa, Casa Grande and parts of Queen Creek,  Arizona are designated by the Rural Housing Service (RHS) and qualify for USDA loans.

Needless to say that in these areas property inventories remain extremely high and having no access to USDA funds surely won’t help the sales activity.

Until Congress passes legislation (and there are currently three pieces of legislation int he works) the only thing we really can do is to address and share the urgency of  this concern with our congressmen and senators.

photo credit: visualpanicPhoenix Mortgage News: USDA Home Loan Funds will Continue

First the Good News! I just got word that the USDA Home Loan Program will continue.

The not-so-good news however is that the currently available USDA  funds are running very low and perhaps there is one or two more days left for the old allocation.

Once these SFHGLP (502 Guaranteed) funds are exhausted, USDA will be able to issue conditional commitments “subject to the availability of funds and Congressional Authority” to charge a 3.5% guarantee fee for purchase loans and a 2.25% guarantee fee for refinance loans.

This means that any loan that did not get funds allocated on time will be subject to the new USDA Loan Guarantee Fee.

More information to come soon!

Update 5/14/2010

USDA has rescinded their announcement from May 11th, 2010.

USDA is  officially out of funds at this time and are not funding any new loans.

The saga continuous…

photo credit: openDemocracyArizona USDA Home Loans Mortgage Update!

Yesterday, USDA funds were already below the one-billion-mark and apparently the money is going fast.  I found out this morning that USDA is expecting to run out of funds next week  (May 7th 2010).

Even though a bill was passed in the House of Representatives to appropriate more funds for loans, it may take some time to go through the red tape in Washington. With the new funding bill comes an increase in the Loan Guarantee Fee to approximately 4%.

There are two versions of the bill:

One is calling for a 4% Loan Guarantee Fee and the other has a 3.5% Loan Guarantee fee with an additional monthly fee of .50%.

USDA stated that they “may” continue to approve loans pending receipt of the funding, as they have in the past 2 years, but I wouldn’t bank on this until we have Senate approval.
As FHA guidelines are tightening, the USDA Home Loans Program is presently the only viable 100% financing solution. The only other option would be to take advantage of VA benefits (if you qualify).  USDA is seeing an upswing in delinquency rates and defaults and we should not be surprised to see higher Loan Guarantee Fees and perhaps required mortgage insurance.

Let’s just hope the bill passes  and the guidelines aren’t  getting too strict to make the American dream possible.  There are plenty of homes available in and around Phoenix that are located in areas designated by the Rural Housing Service (RHS). These eligible properties are located mainly in parts of Queen Creek, all of Casa Grande, and the City of Maricopa, Arizona.

If you are not certain whether or not a property qualifies for USDA check http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do

photo credit: Tracy Available Available USDA Home Loan Funds now under one Billion!

Back in March the Rural Development’s national office in Washington DC released a notice projecting that the money to issue guarantees for USDA Rural Home Loans will be depleted by the end of April.

It seems like we go through the same phenomena every year…remember, USDA ran out of money in March last year. As history tends to repeat itself, there will be a lot of investors pulling the plug on loan applications for USDA mortgages. From what I hear, some major banks are no longer accepting USDA home loan applications coming in through their broker channels since March.

As of right now, we’re still taking applications for USDA home loans in Arizona, however we are closely monitoring how much is left in the kitty. With available funds (at the moment I am writing this) being less than a billion dollars I would urge any REALTOR® and home buyer to hurry and also to have a contingency plan in the event that the anticipated closing occurs after USDA is out of money.

Even though House Bill HR 5017 (a measure to correct the Section 502 Single Family Housing Guaranteed Loan Program to make it self-funding was introduced to the house) passed April 23rd, it will still need to make it through the Senate. Yes, there is a very good chance that USDA Guaranteed program funds will be extended for 2010 and beyond, however I wouldn’t roll the dice until the Senate approves it.

So don’t procrastinate, get your applications in fast if you need 100% financing, or be prepared to go with an FHA Mortgage Loan and scrape up the 3.5% down payment.