Category Archive : Mortgage

Many borrowers believe that when they purchases a property by obtaining mortgage financing, they also own their home. Technically speaking, full ownership on a property only happens once the mortgage loan amount has been paid in full.

To break this down in more detail, there are a few components of a mortgage:

A Promissory Note is a document signed by the borrower acknowledging their commitment to pay the mortgage back with interest in a specific period of time.

In addition to the terms of repayment, the Note also contains provisions concerning the rights of both parties involved in the agreement.

In some states, a Deed of Trust is used instead of a Mortgage Note.

The main difference is that on a Deed of Trust there is a Trustee, which the legal title is vested to in order to secure the repayment of the loan.

There are three parties involved with a Deed of Trust:

1. Trustor – This is the borrower.
2. Trustee – This is the entity that holds “bare or legal” title, and is usually the title company which holds the Power of Sale in the event of default and re-conveys the property once the Deed of Trust is paid in full.
3. Beneficiary – This is the lender that is getting repaid

Deeds of Trust are easier for lenders to foreclose on than a mortgage because there is no need for a judicial proceeding. Mortgages on the other hand, have to go through judicial proceedings, which can be expensive and time consuming.

Time frame for foreclosures of a deed of trust is about 3 months after the notice of default compared to a year for mortgages. Basically, until you have your promissory note paid in full, you are not the only one with an ownership interest in your property.

_________________________________

Related Articles – Mortgage Payments:

• Mortgage Payment Basics
• Who Owns My Home If I Have A Mortgage?
• Why Do I Need Mortgage Insurance?
• Understanding An Amortization Schedule
• Shopping For A Hazard Insurance Policy
• Understanding the FHA Mortgage Insurance Premium (MIP)
• Do I Have To Continue Making My Mortgage Payment If My Lender Goes Bankrupt?

VA Loan Basics For Las Vegas Veterans

If you’re a Las Vegas Veteran, a VA Mortgage may be an excellent option to consider when pre-qualified for new home loan.

What Are VA Loans?

As a way to honor and serve those who served the nation in World War II, the U.S. government created the VA Loan Guaranty program.

Since then, the Department of Veterans Affairs has helped more than 18 million veterans and their families achieve the dream of home-ownership.

Faced with deployments across the globe and frequent domestic relocation, active duty military members and veterans have struggled at times to build the financial stability necessary to secure reasonable lending options. VA loans have served as a crucial bridge for this deserving demographic.

VA loans are guaranteed by the federal government. In essence, the Department of Veterans Affairs agrees to cover about one quarter of a borrower’s mortgage in the event of default. That fiscal safety net gives VA-approved lenders a greater degree of security, which often translates into excellent rates and loan terms for qualified borrowers.

VA loans are also one of the few remaining ways for borrowers to purchase a home without putting any money down. The no-down payment feature is routinely cited as the program signature benefit as it is also a cornerstone of the program’s mission to make home-ownership possible for as many veterans and military members as possible.

The VA Loan Guaranty Program backed more than $68 billion in single-family loans for the fiscal year ending Sept. 30, an 80-percent increase from last year.

Some Key Benefits of VA Loans:

VA loans feature some of the most powerful financial benefits of any loan product on the market, in large part as a tribute and service to America’s veterans and active duty military members.

VA loans are one of the few remaining avenues for qualified borrowers to buy a house without a down payment — that no-cost option is routinely cited by veterans as the program’s most compelling benefit. In most parts of the country, veterans who qualify can purchase a home worth up to about $729,000 without putting down a single dollar.

There are also several other key benefits that can make a huge financial difference for military members and their families:

• No private monthly mortgage insurance, which is a staple of conventional loans when the buyer puts down less than 20 percent
• No penalties for loan pre-payment
• Higher debt-to-income ratio allowed than for most conventional loans
• Sellers can pay up to 6 percent of closing costs

Veterans often have an easier time qualifying for a VA loan. In fact, about 8 in 10 VA borrowers could not have obtained a conventional loan. The program does not have income or credit restrictions.

But remember that the VA doesn’t issue loans – it guarantees them. Prospective borrowers should expect VA-approved lenders to examine an applicant’s financial standing and credit history. In general, borrowers with a credit score below 620 may struggle initially to obtain financing.

Who Is Eligible For VA Mortgage Loans?

Millions of American veterans and active duty military members are eligible for the VA Loan Guaranty Program. But fewer than 10 percent of the country’s 24 million veterans have taken advantage of their entitlement.

Many veterans think they’re ineligible for benefits. Others don’t know how to apply or where to look for information. In fact, a 2004 VA survey found that 20 percent of veterans weren’t even aware of the home loan program’s existence.

The sad reality is millions of military members who bravely served our country are still missing out.

Anyone who meets the following criteria is eligible to qualify for a VA loan:

• Military members who have served 181 days on active duty or three months during war time may be eligible.
• People who have spent at least a half-dozen years in the National Guard or Reserves
• Spouses of those killed in the line of duty

Prospective borrowers who meet the criteria must first obtain a Certificate of Eligibility from the VA. The COE is a formal military document that essentially verifies an applicant’s entitlement to participate in the program.

These forms can be found online at the VA website or through qualified VA lenders and brokers.

Not everyone who qualifies will wind up obtaining a VA loan. But those who do qualify have access to one of the most flexible and powerful lending options in the country.

What Can VA Loans Be Used For?

VA loans are surging in popularity nationwide, as more and more veterans turn to these low-cost loans in the face of a hardened credit market and a declining economy. Qualified buyers can purchase a home with no down payment and enjoy an array of significant financial benefits, from no private mortgage insurance to closing costs paid by the seller.

While VA loans are flexible, there are some limitations. These government-guaranteed loans can be used for a range of purposes that fit the needs of most military members and their families. But veterans and active duty military cannot use their VA entitlement for certain types of purchases.

First, here’s a look at the acceptable uses of a VA loan:

• To buy, build or refinance an owner-occupied residence
• To refinance an existing VA-guaranteed or direct loan
• To repair, alter or improve a veteran-owned residence
• To simultaneously purchase and improve a home
• To buy a single-family residential unit in a VA-approved condominium development
• To buy a farm residence owned and occupied by the veteran

So, VA loans are applicable for a range of uses for military members and their families. The main thrust of the program is home purchasing and refinancing. There are options for purchasing manufactured homes, but there are specific criteria regarding the units and lending institutions have become increasingly wary of these types of loans.

Now, here’s a look at the non-acceptable purposes of VA Loans:

• Land loans
• Investment properties
• Buying or building a combined residential and business property unless
• The property is primarily residential, with no more than one business unit and a nonresidential area that doesn’t exceed 25 percent of total floor space
• Buying more than one separate residential unit or lot unless one is owner-occupied and there’s evidence that:
• The units are not available separately
• The units have a common owner, were considered one unit in the past or are assessed as one unit

How Much Can I Borrow With My VA Loan?

As with any home loan, the final loan amount will vary based on a number of factors, including an applicant’s financial standing and credit score.

Underwriters will generally seek to identify and verify income that can be used to cover the mortgage payment; other shelter expenses; debts and obligations; and family living expenses. They will also seek to verify that the income is stable, reliable and likely to continue.

The VA has a lending limit in place that varies by geography. In most parts of the country, the loan limit is $417,000. There are higher limits in some of the nations’ more expensive real estate markets. In those markets, the VA Loan limit is $1,094,625.

In essence, qualified buyers who want to purchase a home above the loan limit are on the hook for covering the difference. There are also jumbo loan options available.

Call me crazy but I don’t understand why there aren’t any lending programs for Foreign Investors.  Right now in Las Vegas, home prices are at historic lows and it’s drawing the interest of real estate investors from all over the world.  I get numerous emails and phone calls every day from people outside the United States inquiring about Las Vegas Home prices and the process of buying a home in Las Vegas.  Unfortunately, I have to inform them that if they don’t have cash for the entire purchase, they won’t be buying an investment property in Las Vegas.

Doesn’t real estate play an important role in the economy?  I think we all know the answer to that question is an emphatic “Yes”!  So why aren’t there Loan Programs for Foreign Investors?  Many of these large Banks like Wells Fargo and Bank of America could easily create Loan Programs for Foreign Investors that required Foreign Investors to put down at least 30%, open a bank account in the US and anything else they would need to lower their risk.  In most real estate markets like Las Vegas, home prices have pretty much bottomed out thus minimizing the risk for the Banks if the Foreign Investor defaulted, especially if they required 30% down.

Creating loan programs for Foreign Investors will benefit local real estate markets and the economy in several ways.

1. More buyers will enter the local real estate markets absorbing many of the foreclosures that are plaguing neighborhoods.
2. Requiring a minimum of 30% down will generate a large cash infusion for banks, increasing their ability to lend money.
3. It will generate much needed tax revenues for local and state governments.

I am sure we could list numerous reasons as to why there should be loan programs for Foreign Investors but what I want to know is “why aren’t there any loan programs for Foreign Investors.”  What am I missing?

Purchasing a new Las Vegas property can be an overwhelming process between the various contract negotiations, mortgage approvals, inspections, and new appraisal guidelines.

The following outline will help buyers with the overall time line:

1. Loan Application –

The loan application should be one of the first places home buyers start, especially if you are planning to apply for an FHA mortgage.

This is where the loan officer can spend a little time with a potential borrower to discuss their unique lending scenario, financing goals, and qualifying guidelines.

Depending on the amount of information requested by both parties, a typical loan application generally can take between 15 minutes to an hour.

It is highly beneficial to get all of the required documentation submitted at this time as well so that any potential underwriting challenges can be addressed.

2. Pre-Approval Letter –

A pre-approval lets the borrower and seller know how much they can qualify for, and is issued once the loan officer has verified income, assets, and credit.

As lending guidelines continue to change, most loan officers will take the pre-approval a step further and run a full online Fannie Mae (DU) or Freddie Mac (LP) automated underwriting approval to make sure the borrower has an additional layer of confidence prior to shopping for a new home.

Most sellers are requiring a full approval be submitted with a purchase offer.

Keep in mind, DU or LP approvals are not considered full underwritten approvals, unless an underwriter has physically analyzed the submitted documentation.  Every bank has their own quality control systems for this process, but the average time it should take for a full underwritten approval is 48-72 hours.

So basically, it is a good idea to get everything in and wait an extra day or so for an underwriter to issue a full approval.

3. Loan Search / Good Faith Estimate –

Once a pre-approval has been issued, it is important that the lender and borrower agree on the actual terms of the new mortgage prior to submitting offers on a new property.

A Good Faith Estimate is a form that outlines the interest rate, down payment, purchase price / loan amount, and other estimated closing costs so that the borrower can make an educated decision.

Even though the GFE is an “Estimate” based on the disclosed costs of the new loan, there are several things that the loan officer does not have control over.  Make sure you ask your loan officer what specific line items you can expect to be consistent or change at the time of closing.

4. Purchase Offer –

Depending on which market you are in, the purchase offer and acceptance process can be an entirely new beast to deal with.

Short Sales, Bank Owned (REO), and Rehab properties may take several weeks of negotiation before a perceived win / win deal is reached. It is important to hire a full-time real estate professional who is familiar with the landscape and knows how to navigate these types of transactions.

Recent neighborhood sales, pending foreclosures, and the actual terms of the purchase agreement are a few things that you need to pay close attention to before you commit to putting a sizable earnest money deposit down.

4. Due Diligence Period –

This is the time, as defined in the purchase agreement, that the borrower and seller have to complete all inspections, appraisal, review HOA / title documents, and anything else that may have an impact on the successful closing of the purchase transaction.

Due to new HVCC and FHA Appraisal guidelines, it may take a few extra weeks before an appraisal can be delivered.

5. Appraisals / Inspections Completed –

Typically, the appraisal and home inspection are paid for in advance by the borrower and have to be completed within 10 days of an accepted offer.  Obviously, an extended period of time will have to be given if the mortgage falls under HVCC guidelines.

The mortgage company will have to order the appraisal through a third party Appraisal Management Company, but the buyer’s agent generally handles the logistics of the property inspection.

Most borrowers like to be present at the time of the home inspection, however, the appraisal is handled privately by an appraiser.

6. Final Conditions Submitted to Bank –

The appraisal, preliminary title report, and any addition borrower documents are submitted to an underwriter for final approval.  This process takes 48-72 hours and is the final step, other than a loan lock, needed to order closing documents.

Proof of hazard insurance is also required prior to ordering loan documents.

Some mortgage programs allow a borrower the option of including their quarterly real estate tax payments and annual hazard insurance premium in the monthly mortgage payment by establishing a separate escrow (impound) account.

Make sure that you know what your total monthly mortgage payment is before ordering documents.

7. Loan Lock –

Mortgage rates have a tendency to change a few times a day depending on market conditions and adjusting credit / bank guidelines.   It is important to regularly communicate with your loan officer to make sure you get the rate and closing cost scenario that you have budgeted for.

Some brokers have the ability to change banks or negotiate a lower rate if things change for the better, but you are ultimately putting full trust in your loan officer when it comes to the rate game.

Rates can be locked between 7 – 90 days. A good rule of thumb, the shorter the lock period, the lower the interest rate.

Since a .125% adjustment in rate may only impact your monthly payment by a few dollars, it is a good idea to find a rate you are comfortable with and lock as soon as possible.

With the rapid fluctuations in pricing due to the turbulence on Wall Street, rates could move .5% in a matter of hours causing monthly payments and closing costs to significantly change.

8. Final Loan Documents Signed –

The final loan documents are delivered to an escrow or title company for preparation.  The borrowers will either sign with an escrow officer or meet an approved notary at a convenient location.

Sinings can take between 1-2 hours, depending on the amount of questions the borrower has about the transaction.

If there is additional funds to close, like a down payment or closing costs not covered by the seller, the borrower will bring a certified check to the escrow company.

*Make sure your loan officer knows where these funds are coming from so that there is a documented paper trail for the underwriter to approve.

The final property inspection is also completed during this time. If there are things that still need to be fixed before the you agree to close on the purchase, let your loan officer know if you want to hold off on funding, unless the rate or documents are set to expire.

9. Funding / Recording-

Once the final documents have been signed by the borrowers they are shipped back to the bank for a quick inspection and then set in line for funding.

A wire is sent from the lender through a few places and eventually ends up at the escrow company.

Since this process may take a few hours, it is common to hear about a delay between the time a bank “Funds” a loan and an escrow company “Records” a closing.

The first question home buyers want to know generally revolves around how much mortgage money they can borrow or get qualified for.

Simply looking on a search engine for “Mortgage – how much can I borrow” will more than likely only produce a bunch of mortgage calculator results vs real information that describes the entire process.

While an online mortgage calculator may be a decent tool to use as measurement, there are several other factors that play a part in a full mortgage approval.

Banks look at a few things when qualifying a borrower for a new mortgage:

• Credit

The most common measure of a borrower’s credit standing are the three scores which can range between 300 and 850.

A minimum 620 fico score is required for most FHA lenders, and anything higher may increase your chances of getting approved with a lower rate.

There is other criteria that banks look at regarding a borrower’s credit standing, such as payment history, total balances and limits, type of credit borrowed, and recent inquiries.

Since mortgage rates are also tied to credit scores on some loan products, knowing where you stand or how to improve this rating could make a significant impact on your monthly payment.

• Debt-to-Income Ratio

The (DTI) is calculated by dividing a borrower’s total monthly liabilities (minimum credit payments, auto loans / leases, child support, mortgage payments…) by the verifiable monthly income.

* Verifiable income includes pay stubs, W2’s, Tax Returns, and in some cases 1099’s and bank statements.

Example Scenario:

Current liabilities + new mortgage payment = $1,500 a month

(divided by)

Gross Monthly Income of $3,500

The DTI would be 42%.

Most mortgage guidelines require a 45% or lower Debt-to-Income ratio.

• Loan-to-Value

The (LTV) is calculated differently depending on whether the new transaction is a purchase, refinance, or rehab loan.

Basically, it is the amount of the new loan in comparison to the total value of the property.

When qualifying for a Las Vegas FHA loan on a purchase, a 3.5% down payment would equal a 96.5% LTV.

Keep in mind that banks will verify a paper-trail of the assets used for the down payment, so it is important to communicate with your loan officer about your current financial position.

There are a few factors to consider when deciding on the amount of your new mortgage:

1. Desired Down Payment

2. Budgeted Monthly Payment

3. Length of time you want to own the property

Updated Clark County Nevada lending limits will also play a role in determining the type of mortgage program and amount you are qualified for.

Since Las Vegas mortgage rates may also have an impact on your monthly mortgage payment, it is important to pay attention to the market.

Schedule a strategy session with our professional Las Vegas Mortgage staff by phone or at our office to discuss the best lending solution for you and your family.

Your credit reports are a key factor in determining whether or not you can get a mortgage. There are three different bureaus that collect and report information regarding your overall credit situation. They are Equifax, Experian and Transunion. They all rate you by using a scoring system called F.I.C.O, which stands for Fair Issac Credit Organization. Your F.I.C.O score can range anywhere from 400 to 850 (a higher score is more desirable). Only F.I.C.O employees know exactly how they calculate their scoring system, but recent external pressure has forced them to reveal some of their secrets. I will pass what information I have learned on to you latter in this Blog.

When you are ready to buy a house, you need to shop for a mortgage first. After you have found a lender, they will pull your credit reports. They are looking for three basic things. First, they will look at your F.I.C.O scores from each of the three bureaus (if you are applying for a conventional mortgage). They usually take an average of the three scores or your mid F.I.C.O score. Most conventional mortgages have a F.I.C.O score minimum requirement, if you don’t make it up to that number, you don’t get that particular mortgage. There is generally no room for negotiation on this point. Second, they are looking for any derogatory credit. Derogatory credit are things like late payments, car repos, foreclosures, bankruptcies, tax liens, back child support, bounced checks, collection accounts, etc. Any one of these can be a deal breaker or the lender might accept a letter of explanation as to what caused the derogatory credit to occur. Third, they are looking at all your debt (as reported on your credit reports) and calculating your debt to income ratio. The amount of money you spend on bills vs. the amount of money to take in as income. They have various percentages (based on different loan products) that they deem to be acceptable. If you exceed these ratios, they may be willing to negotiate a little if you are strong in other areas (ie. if you have been at your job for a long time or if your F.I.C.O scores are high).

If you find information on your credit reports that is inaccurate, you can request that it be corrected. You need to send a letter to each credit bureau (that has incorrect information reported) and ask that it be corrected. Write one letter identifying yourself and the information you think needs to be corrected. Make sure you send any evidence you have that supports you request. Photo copy the letter/evidence and sign your original signature to each copy. The bureaus usually have 30 days to investigate your claim. If they can’t verify the information they have reported, they have to delete it from your file. This process also works well if you want something added to your credit. If you have limited credit, send in information that shows you pay your bills on time. For example, if you have a department store charge card and it doesn’t show on your credit reports (ask that it be added to your file).

Here are three other tips that may improve your F.I.C.O scores. One, don’t close open credit card accounts/liens of credit just because you paid off the balance. The fact that you have access to (but are not using) credit/money shows you have some reserves if you need them in a pinch. Two, if you do carry balances on your credit cards/liens, try to pay them down below 50% of your available credit line. There is no set reason as to why this works, it is just one of F.I.C.O’s quirky methodologies. Third, avoid allowing to many companies to pull your credit. In general, each time you have your credit pulled your F.I.C.O score drops. The logic being that a company that pulls your credit MAY extend credit to you and you could run up your debt (before it actually shows on your credit report). The exception to this rule is having companies that are designated mortgage companies pulling your credit. In a 30 day period, mortgage designated companies can pull your credit and your F.I.C.O hit will only be from the first mortgage company.

My name is Greg Hoffman. I have live in Las Vegas since 1990 and I have been a Realtor here since 1999. I also have worked in forward and Reverse Mortgages with major national banks.

There is a bankruptcy bill that is being pushed by Democrats that would give Judges the power to dictate mortgage terms.

If this bill were to pass, a homeowner could file bankruptcy and the Judge could change the terms of his primary residence mortgage to make it more affordable for the homeowner so one they can afford their monthly mortgage payment and two to bring the mortgage down to market value.

The Mortgage Bankers Association, American Bankers Association and the U.S. Chamber of Commerce oppose this bill and have spent millions to try and prevent it from being passed.  According to the chief lobbyist for the Mortgage Bankers Association, Steve O’Connor, said “new homebuyers would end up paying higher interest and bigger down payments if lenders are saddled with the risk that a judge could change mortgage terms.”  Why would homebuyers end up paying a higher down payment and interest rate?  The lending guidelines are very stringent now and you can’t buy a home anymore without at least 3.5% down so I would imagine that the default rate on these new home loans would be very small?  So the risk for Lenders and Banks have dropped considerably compared to loans they gave out back in 2003-2006.

I can see why the Mortgage Bankers Association and American Bankers Association would want to prevent this bill from passing because it certainly would harm the bottom line for lenders and investors holding mortgages or would it?  How much harm would it really cause Lenders and Banks with the Government bailout?  Bank of America just received a 2nd bailout of $20 billion dollars!  Banks appear to be using their bailout money to acquire other banks so I am not too concerned with them complaining that they would lose money if this bill passes.  What I am concerned with is Lenders and Banks requiring homebuyers to come in with a higher down payment and increases in interest rates.

We need a solution to the foreclosure mess since Banks and Lenders can’t get short sales or loan modifications approved in a timely manner.  The passing of this bill would help streamline the process and allow homeowners to keep their homes by bring their mortgage down to market value and giving them a payment they can afford.  This will prevent more homes from going into foreclosure which helps keep inventory levels from increasing and should help prices begin to level out.  When there is confidence again in the real estate market, it will begin to spill over to other industries which will help lead us out of the recession our Country is facing.

What is a Loan Modification and does it fit the needs of homeowners who cannot afford their mortgage payment and who owe  more on their mortgage than the home is valued?

“A Loan Modification is a permanent change in one or more of the terms of a mortgagor’s loan, allows the loan to be reinstated, and results in a payment the mortgagor can afford.”

In the State of Nevada, an Attorney should negotiate on the behalf of a homeowner to get a loan modification approved.  There are those that aren’t Attorneys that attempt to help homeowners, which is fine,  but it’s against the law for them to charge you any up front fees.

A Las Vegas Homeowner does not have to be late on a payment in order to be approved for a loan modification.  However; I have seen some Lenders deny a Loan Modification because the homeowners weren’t late on their mortgage, so it does come down to who your lender is.

We work with several reputable Attorney’s in Las Vegas they we can recommend to you if you are in need of a Loan Modification for your Las Vegas Home Loan.  We can be reached at 702.838.7522 or complete our contact form and one of our representatives will contact you for a private consultation.

As home prices continue to decline in certain markets, home owners with adjusting interest rates face the obstacle of not being able to refinance due to their mortgage balance exceeding the value of their property.

The FHA Short Refinance program may be able to help if you are in this scenario. Read More

In response to the new “HOPE for Home Owners Act” (HR 3221) that was recently passed by the House of Representatives, FHA announced new Mortgage Insurance Premiums starting October 1, 2008 through September 30th, 2009.

Up-front Mortgage Insurance Premiums:

• Purchase Money Mortgages and Refinances = 1.75%
• Streamline Refinances (all types) = 1.5%
• FHA Secure (Delinquent Mortgagors) = 3%

Monthly Mortgage Insurance Premiums:

• 30 yr mtg. –  LTV > 95%, monthly will be @ .55%
• 30 yr mtg. –  LTV < 95%, monthly will be @ .50%
• 15 yr mtg. –  LTV > 90%, monthly will be @ .25%
• 15 yr mtg. –  LTV < 90%, monthly will not be required.
• FHASecure – LTV > 95%, monthly will be @ .55%
• FHASecure – LTV < 95%, monthly will be @ .50%

* This information was provided by Jeff Mifsud @ FHAGamePlan.com

Meeting with a loan officer for the first time can be a quick and painless experience if you are prepared.

The following is a list of the general borrower information and conditions that need to be presented at the time of the initial mortgage application process for a full approval:

Personal Information

1. Full Name
2. Date of Birth
3. Social Security Number
4. 2 Yrs Residence History – monthly payment, rent or own, payment method
5. List of all Real Estate Owned – values, balances, monthly payments, taxes, and insurance
6. 2 Yrs Employment History – job title, yrs in industry, income / structure, contact information

Subject Property Information

1. Type of property purchasing – Condo, Single Family Residence, Las Vegas High Rise, New Construction, Re-sell
2. Residence Status – Primary, Second Home, Investment Property
3. Budgeted Down Payment
4. Budgeted Monthly Payment
5. Desired Program Type – Fixed, ARM, Negative Amortization, Reverse Mortgage
6. Names to be listed or left off of title
7. Estimated time in property
8. Goals with property

Conditions

1. Most recent 2 pay stubs
2. Most recent 2 Yrs. W2’s
3. Most recent 2 Yrs. Tax Returns
4. Most recent 2 Bank Statements, 401k, Mutual Fund, or other Investment Accounts

The application process is a time where your loan officer can help you structure the best mortgage plan of action that will fit with your long and short term financial goals.

Will the new federal housing bill help the Las Vegas Real Estate Market?  Without a doubt!  The federal housing bill should stop future foreclosures, stabilize home prices, encourage a wave of more home buyers and reduce the housing inventory.

The federal housing bill will allow distressed homeowners who might be facing an eminent foreclosure to refinance out of their existing mortgage and into more attractive terms.  According to the bill, financially distressed homeowners have the opportunity to reduce their mortgages to 90 percent of their home’s current appraised value. The newly created mortgage will be a 30-year fixed FHA loan at the prevailing interest rate.  In exchange for refinancing, the homeowner agrees to share a substantial portion of any future appreciation with the original lender and the FHA.

So this gives a homeowner two choices.  They could either go through with foreclosure and destroy their credit or refinance their home at 90% of the appraised value and share any future appreciation with the original lender and the FHA.  I think this is an easy choice, don’t you?

The Federal Housing Bill will reduce the amount of future foreclosures on the market, which is significant.  This means the current housing inventory will decrease at a quicker rate and home prices should stabilize because of the decline in inventory.  We have had 6 straight months of increased home sales and it has been making a small dent in the standing inventory because of the increase in foreclosures.  So with foreclosures decreasing because of the new bill, we should see a decrease in the inventory over the next 8 to 10 months.  With the decrease in inventory comes with the stabilization of home prices.  Home prices should start to level out over the same period.

I think this bill was exactly what we needed to help the Las Vegas Real Estate Market which will ultimately have a positive effect on the Las Vegas Economy.