Ivory Homes just announced this morning that any buyer that is wanting to buy a new home, but can’t because they owe more on their existing home than what it is worth, can now buy an Ivory Home!

Ivory will lease their existing home for them for up to 3 years!! We will pay their lease, maintain their yard, fix up any problems in their home, and take care of utilities. This way, your buyer can have the home of their dreams NOW, and sell up to 3 years down the road, when the market recovers. Also, anyone that is looking to purchase a new home now, to get the low interest rates and best deals, can hold on to their existing home for up to 3 years with this lease option, and sell their home in a better market. This gives your buyers the best of both worlds!

The buyer needs to be able to qualify for a loan with their existing home and their new Ivory Home, or have 30% percent equity in their home. My loan officer can call your clients right away, if your clients are upside down on their home, to see if they qualify. This is an opportunity no other builder can provide!!

Contact me for more information!

Most Vets and most loan officers are not aware of the info I am sharing with you—

1. If a Veteran has an existing VA Loan, he/she can still qualify for a second VA loan in most cases. That second loan can be used for a new primary residence or a second home.
2. You already know that there is no down payment or mortgage insurance required on a VA Loan. VA does charge a funding fee (similar to UFMIP). That is waived if the Veteran receives service related disability income. It can also be paid by the seller.
3. If they are in a current Chapter 13 bankruptcy for at least 12 months they can buy a home using a VA Loan with court approval.
4. They can buy a home with 30 and 60 day lates.
5. Sellers can contribute up to 4% in seller concessions to the buyer.
6. Only 20% of Veterans are  on active duty.  The other 80% live all around us.

Article provided by Mark Spongberg, Mortgage Banker

We often point out that a buyer should be more concerned about the COST of a home rather than the PRICE. Price obviously is a component of cost. However, unless you buy all-cash, you must also be concerned about the financing of the purchase. The price and the financing together determine the cost of a home. Today, we want to look at only the financing piece.

An opportunity exists today because of recent government involvement; an opportunity that may never again be available in our lifetimes. There has been much discussion about what role the federal government should have in supporting homeownership. We will leave our opinions on the debate for another time. However, we want to alert you to two advantages available to a purchaser today that may disappear in the future:

• Historically low interest rates
• The ability to lock in these rates for thirty years

Interest Rates

Because of the financial crisis, the government stepped in and instituted a series of programs which pushed mortgage interest rates to historic lows. If we look at 30 year mortgage interest rates before and after government intervention we see the impact these programs had (see chart below).

According to Freddie Mac, from 2006 to the start of the financial crisis (the fall of 2008), the average rate was 6.29%. Since then, the average rate has been 4.92%.

A purchaser can still get a 30 year-fixed-rate-mortgage at approximately 5%. However, interest rates this low may soon disappear. The government has questioned its role in supporting homeownership. In the administration’s REFORMING AMERICA’S HOUSING FINANCE MARKET: A REPORT TO CONGRESS, they are very strong in voicing their thoughts on this issue:

…our plan also dramatically transforms the role of government in the housing market. In the past, the government’s financial and tax policies encouraged housing purchases and real estate investment over other sectors of our economy, and ultimately left taxpayers responsible for much of the risk incurred by a poorly supervised housing finance market.

Going forward, the government’s primary role should be limited to robust oversight and consumer protection, targeted assistance for low- and moderate-income homeowners and renters, and carefully designed support for market stability and crisis response…

Under our plan, private markets … will be the primary source of mortgage credit and bear the burden for losses.

What are the probable results of this decision?

The Royal Bank of Scotland:

“The (government) currently provides 95% of housing finance in the U.S.; any reductions of their involvement in supporting mortgages mean interest rates will have to go up to induce private lending.”

AnnaMaria Andriotis, writer for SmartMoney:

“In the proposals were changes that will mean more expensive mortgages, with higher fees and, probably, higher interest rates, larger down payments and, in the near term, fewer lenders to choose from.”

The day of a 5% rate seem to be coming to an end.

Locking in a rate for thirty years

We must also realize that having the ability to lock-in a rate for 30 years may soon be a thing of the past.

There are a growing number of people who think that our mortgage industry should imitate those of other industrial countries around the world. If we do start limiting government support for the mortgage process, the 30-year-fixed-rate mortgage may disappear. Other countries, like Canada, only allow a purchaser to lock in a rate for a five year term. After that, the borrower must renegotiate a new mortgage at current rates. Could that happen here?

Mark Zandi, Chief Economist of Moody’s Economics.com addressing the administration’s recent report:

“A private system would likely mean the end of the 30-year fixed-rate mortgage as a mainstay of U.S. housing finance. A privatized U.S. market would come to resemble overseas markets, primarily offering adjustable-rate mortgages. Based on the experience overseas, the fixed-rate share in the U.S. would decline to an average of between 10% and 20% of the mortgage market compared with a historical average of closer to 75%.”

Bottom Line

The COST of a home is dramatically impacted by the mortgage component. Today, we can get a 5% mortgage and lock it in at 5% for the next thirty years!! Both of these opportunities may disappear in the future. You should take this into consideration if you’re looking to purchase a home.

Thank you to our good friends at KCM Blog for this great article.

This article was provided by Josh Mettle.
Check out his blog here

Learning how your credit score is determined can save you thousands of dollars a year, by getting the best interest and insurance rates. Unfortunately, getting good credit scores has been a big challenge for many people lately. Whether you are just trying to qualify to buy a home, refinance, or simply wanting to better your credit, here are some helpful tips.

Your credit score is calculated on information obtained from your personal credit file. This information is then analyzed in five different categories to produce your three-digit FICO® score.

 
Payment History: 35% of your score is based on paying your credit related accounts on time. Late payments or slow pays can/will drop your score quickly.

Credit Utilization: 30% of your score is based on how much credit you have and how you are using it. If you are close to utilizing the entire amount of your credit limit on a credit card or line of credit, it can/will reflect negatively on your credit score by as much as a hundred point drop.

Length of Credit History: 15% of your score is based on good payment history over a long period of time. It takes 4 years to mature a new account and 7 years and more to add significant points to your credit score. Keep the credit you have for as long as possible.

New Credit and Inquiries: 10% of your score is based on the number of recent inquiries and opened accounts coming from creditors. If you want to minimize the damage from credit inquiries, make sure that when you shop for a mortgage you do so in a fairly short period of time. The FICO® score treats multiple inquiries in a 45-day period as just one inquiry and ignores all inquiries made within 30 days prior to the day the score is computed. (this is correct but only in highly unused scoring modules and will make most people lose points. I have added what will work.) shop for credit by going to www.MyFICO.com and getting your credit scores and report. Take the report to your lending and ask for best rates and terms. DO NOT, I repeat, do not let them pull your credit for any reason until you have decided that they are the ones you are going to do the loan with. You have “shop” with any lender you like if you do it this way… and it will only cost you 1 inquiry on your credit report.

Types of Credit: 10% of your score is based on having a variety of credit accounts such as a home mortgage, auto loans, credit cards, etc.Choosing National Bank Credit Cards will also add points to your profile. Using Finance Companies will cost you credit points… a lot of credit points. Avoid them like the plague.
Overall the best way you can improve your credit score is to:

1. Correct errors.
2. Pay your bills on time. Two weeks or more before the “Due” date. Never be late again.
3. Pay down your debt at least below 45% debt to credit limit ratio. Below 15% is a lot better.
4. And apply for credit sparingly. 2 times a year max.

Lawrence M. Law
CEO – Vantage Credit Alliance – Credit Repair by Attorneys
Regional Director – National Credit Federation
Executive Level – Wake Up Now

In a business that is changing from hour to hour, knowledge is priceless

2011 Forecast

The past couple of years have been challenging for the mortgage and housing industries, As we begin the new year it’s always interesting to take a stab at and attempt to make some economic projections that will effect both of our industries, jobs, and potential incomes. Before offering some predications, this exercise reminds me of a joke. It goes, “why do mortgage loan officers drive around with their mortgage licenses on their dashboards?” Answer: It’s so we can park in handicap parking! After my predications on last year’s interest rates, many of you are probably agreeing. Okay, so how was I to know that the government would step into the market and force down rates to unrealistic levels? For this coming year I will break down my thoughts and projections into specific areas.

Home Loan Interest Rates (always a hot topic of discussion)

Having been in the business a long time and dealing with interest rates, I have learned not to try to outguess the direction of interest rates. All the academia fundamentals learned in my economic classes are of little value in today’s ever-changing environment. No longer is it possible to analysis economic data and make a forecast. The new big gorilla on the block (federal government/Fed Reserve political agenda) has altered the landscape. The markets are no longer free to work out solutions to problems. Our elected officials very much believe, they are more knowledgeable and better equipped to solve our nations financial woes. This coming year the Fed’s influence and polices will continue to play havoc with interest rates. Since Nov. 4^th, mortgage rates have climbed almost a full percentage point…not based of economic reasons but due to the Fed’s Quantitative Easing II program. There is more room for rates to rise than to fall. Based on a weak but improving economy interest rates should hover between 5-6% for the year. There has been a lot of talk about the concern over ARM resets. Most ARM’s adjusting in 2011 are tied to the LIBOR index and right now all of the indices are at bottom levels. Most borrowers on ARMS will see a decrease in their rate and payment.

Mortgage Environment.

Many believe that mortgage guidelines will continue to tighten. How is this possible? The large banks will continue to struggle with the foreclosure problem and the extra scrutiny on them will make lending more difficult as the minimum requirements continue to rise. We will continue to see appraisal issues as more and more lenders continue to worry about declining values.

Beginning April 1, 2011 Loan Officer’s Compensation is being regulated and restricted. Lenders are struggling to interrupt what the new regulation requires and prohibits. Loan Officers are in limbo until their employers clarify and make policy changes. Right now the industry seems to be in a  “hold your breath” to see what happens mode. I anticipate a lot of loan officer movement between entities before and after this date as everyone tries to figure out how to make a living.

Beginning Jan. 1, 2011 all loan officers not working at a federally insured depository had to transit over to the new National Mortgage Licensing System. The additional new requirements of licensing have resulted in a dramatic decrease in our numbers. In Utah the number of LO’s is down about 50%. I have completed this transition.

The new law is also making changes to the Home Valuation Code of Conduct. Unfortunately, what we are hearing is that the new changes are related to regulating appraisal cost/fee and not on how to improve the quality of the appraisal report. The quality issue and appraisal compensation are directly tied together. One reason for poor reports is the lack of reasonable compensation for services performed. We will continue to see valuation problems throughout the year.

Principal-Reducing Loan Modification will remain a non-factor. Homeowners need to realize that very few modifications are successful. Despite the fact the Obama Adminstration has urged the Federal Housing Finance Agency (that group who now oversees Fannie Mae and Freddie Mac) to do more, the fact is only 1 in 12,000 loan modifications reduces the principal owed. Homeowners who have been waiting for more need to realize that more probably will not come. Tough decisions will need to be made about staying or letting the home go.

I see more homeowners staying put. The days of the “get rich with real estate” infomercials are over. Using the home as your personal ATM, of refinancing on an endless loop to fund vacations, new cars, college tuitions etc. is in the past. There is a new rebirth of the American Dream of Home Ownership. Yet this time the dream is not to only own your home in deed, mortgaged to the rafters, but to truly own it – free and clear. This past year the intent of most of the refinancing I completed was to reduce the loan term and not debt. The new goal for many is to pay off the mortgage before retirement.

Housing

Don’t expect housing to get any better during the year. Unemployment is still very high and real estate and lending are tied to job stability. Even with the record low interest rates, lots of people can’t qualify with the tight credit standards. Foreclosures are still having a major impact in a lot of markets. Banks are struggling with how to deal with the huge inventory of properties. Banks are trying to figure out how to protect their balance sheets against potential huge losses stemming from foreclosures. Many banks are purposely forestalling the foreclosure process because a delinquent borrower doesn’t have the same impact on the balance sheet as a foreclosed property. Many Americans will simply stay put and be content. As home prices stabilize, many will be happy to be in a position to make their monthly payments and not be upside down. Others will stay put and get to work on transforming their existing home into the one they want. They will remodel, upgrade and even add square footage.

It is time for homebuyers and owners to get “real.” Locally, sellers have reached a point where they are not willing to drop prices further. Buyers need to realize that home affordability is at an all time high. With the low rates and low prices now is the time to buy. Many are holding off believing home prices will continue to drop. This mentality creates a stagnant market with very little buying and selling. The good news is that local economists are predicating an actually housing shortage by 2012 This forecast is based on pent up demand along with natural growth. So the key for this coming year may be to simply hang on. 2011 could be the year of confusion and reconciliation. The general public will continue to buy into national trends instead of learning about local trends and markets. This leads to confusion. Many Americans hanging on will give up waiting and reconcile their own situations.

Unemployment

Our government is using all means to try and reduce the high unemployment numbers. It appears hiring will improve as 2011 progresses and unemployment will fall. However, getting companies to hire back is no easy task. Large and mid-size companies are currently very profitable. It is no longer a question of whether businesses can hire and invest more strongly; but are they willing? The U.S. economy needs to produce 125,000-150,000 every month simply to keep up with national growth. The economy needs to double this amount of job creation before we start seeing a noticeable drop in unemployment. There are really two economies in the U.S – the big money economy and the Average Working family economy. Corporate profits will continue to rise as will the stock market. But I expect typical wages to go nowhere, joblessness will remain high and the ranks of the unemployed could actually increase. The gap between the two economies seems to be growing. Corporate America is earning more profits outside of the United States. General Motors is now making more cars in China than the U.S. Two thirds of totals sales are coming from abroad. When GM went public it boasted that soon almost half its cars will be made around the world where labor is less than $15 an hour….good for profits but terrible for the American worker. Big Money is in a V-shaped recovery. Most likely the bottom was reached and is now increasing. This is good news for investors and those with money in the stock market. But most American families are trapped in a L shaped recovery and it’s going to take a long time to come out of it. At some point the Government needs to recognize the need to reconnect these two economies. (Sorry, just a little political comment)

Inflation

Per the Fed’s, inflation now and in the near future doesn’t appear to be a concern. In fact QE2 was meant to increase the level of inflation in order to avoid deflation. The Fed’s target rate for inflation has always been around 2.00% annually. Assuming energy prices behave – inflation should remain contained. Inflation at the consumer and wholesale levels should remain within the targeted range of 2%. There is very little pressure to raise prices and wages. But remember, it is very difficult to control inflation once it takes hold. Inflation is the enemy of all bonds. If it does rear it’s ugly head, look for the Fed’s to hike rates immediately to attempt to keep it at bay

Other Potential Areas of Concern

-Some forecasters see an upcoming municipal finance crisis. Municipals have their own budget woes as they struggle to provide services with less revenue stemming from both property owners and the Fed’s.

-Large banks could very well ask for additional government bailout money as they struggle with more foreclosures.

-Out of Washington we might see fiscal policy consideration of two ideas previously thought untouchable –(a) cutting the corporate income tax rate, and (2) slowing the rate of Social Security benefit growth for upper-income households. The former is being cast as being pro-jobs; the latter as a means of cutting the nation’s long term budget problems.

-The European Union will face it’s own problems as several more members financial difficulties are announced.

Overview

Overall, I believe 2011 will be very similar to 2010. There will be some glimpses of hope and progress in the economy. Most Americans will probably feel better at the end of 2011 then 2010. As for us in Housing and Lending, I believe 2011 is the turning point. Our unemployment rate is much better than the national average. Our job market is growing. Interest rates should remain very favorable. Both buyers and sellers will return to the market and once again create a normal market based on traditional market factors of supply and demand and not sorely on short sales and foreclosures. Both industries have noticed a considerable reduction in the number of licensees. For those who survive, business, though down, should still remain profitable.