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Lethbridge, AB

My Mortgage Application was.....DECLINED! :(

Robert W. May, Realtor/Mortgage Expert Lethbridge Mortgage & Real Estate Info: Loan Officer in Lethbridge, AB

As a mortgage associate in Lethbridge with Canada First Mortgage, as well as being a licensed Realtor and Broker of Rainbow Realty, I have been an active fixture of the local real estate community since 1993.  I have helped many others obtain mortgages, home equity line of credits, consolidation loans, and even second mortgages.  Many of these clients were a bit of a challenge, having poor credit or non-traditional jobs or income streams, so imagine my suprise when I submit my own personal application for financing on a property and am declined by the lender.

Now let me start by saying that I am self-employed, have strong credit, and no debt.  On paper I appear to be a strong applicant.  However, sometime in the recent past during the mortgage and lending crisis which we are enjoying, my favorite lender decided to change their policies.  The new policy now requires that all properties that they lend on be listed MLS.  That means that no private transactions, no exclusive listings, no FSBO, etc.  This is great news for organized real estate and may put a single nail into the coffin of the fsbo companies, but for me it was devastating.

I contacted my lender and stated that if they would like, the property I was buying could be listed MLS within 5 minutes, however they have another curious policy which states that every mortgage submission gets one chance, and once chance only.  So my file was declined and would not be reconsidered.  Totally absurd logic, but those are the rules which I am bound to follow.

The good news was that there is a whole host of other lenders who do not as of yet have similar bizaar policy and my application was able to be resurrected and redirected to a different lender.  Financing approved, funds advanced, mortgage completed, all withing a weeks times. 

 

For future mortgage applicants, it is of great importance that you work with a mortgage associate who has this sort of flexibilty available to them.  It is important to have access to multiple lenders, multiple products, and to have as many options available as possible.  This personal experience has reinforced to me to keep my streams of communication with ALL lenders open and active.  It reiterates to me the importance of knowing which lenders offer which type of products to keep abreast of where to direct each unique application.  It is the reason that I continue to meet with various lenders weekly, track their products daily, and remain an active member of the industry.

 

Robert May

 

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Robert May is the broker and owner of Rainbow Realty of Lethbridge Alberta. He is also a licensed mortgage associate and financing expert with Canada First Mortgage of Calgary Alberta. He has been in the real estate industry since 1993 and offers full MLS real estate services to Lethbridge and surrounding area, as well as mortgage financing, refinancing/renewals, preapprovals, and home equity financing to Lethbridge and Southern Alberta. He can be found online at www.LethbridgeLoans.com



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Lethbridge Mortgage Update Dec. 4/08

Robert W. May, Realtor/Mortgage Expert Lethbridge Mortgage & Real Estate Info: Loan Officer in Lethbridge, AB

Genworth, the mortgage insurance company, recently sent out this update.  Much of the information is valuable information for consumers and real estate professionals.  The informed Realtor will be advised to know this information and/or to have a great mortgage associate at your disposal.  Here is Genworths update:

 

Commonly Asked Underwriting Questions Answered:
 
Rent to Own - Genworth asks that the "rent to own" agreement was signed prior or same time as lease.  We only apply the dollar amount that exceeds the fair market rent towards the down payment 
 
Agricultural property - Zoning must allow for residential development; property must meet guidelines as per Acreage Property requirements; confirm applicant(s) income is not derived in any way from the land; the land will not be used by the applicant(s) or any other entity, for farming; maximum acreage to be included in property value has been increased from 10 to15 acres

Square Footage Minimum Genworth does NOT have square footage minimum but property size has to be the "norm" for the area.  For example; there is a lot of very small condos in downtown Toronto so that is normal for area

NOA Verification -  If you go to CRA website www.cra.gc.ca. and request Quick Access, follow the prompts and have available SIN, DOB, TAX YEAR and AMOUNT ON on LINE 150, when you hit continue and if Line 150 is correct, you will get the Name of filer, and statement "your 2007 was assessed on (date on return) " and then you can also confirm the RRSP limit by clicking on that box.   If you do not get this information, the NOA presented to you has discrepancies.   This is currently good for 2006 and 2007. 

If you have further questions attached is the link to Genworth's Underwriting Guidelines for your reference: http://www.genworth.ca/mi/eng/industry_professionals/underwriting_guide.html

    ***Please Note: Lender's internal underwriting guidelines continue to take precedence***
     
    Genworth General Observations of High Ratio (Cutback/Decline) Submissions:
    • Alt A BFS documentation not in line with T1’s/NOA’s (reasonability)
    • Excessive debts remain after consolidations/refi’s in past year-no improvements
    • Overextended applicants (credit bureau available debts over $400k)
    • Co-signor applications requesting to offset poor credit
    • Step father non- occupying; gifted down payments, average credit 589, $171k in consumer debts
    • Instability of income/employment; stated income exceeds $100k-more than gross business income
    • Weak employment stability/limited established credit
    • Covenant salaried-does not meet BFS program guidelines/maxed ratios
    • Current I9's with other weak/excessive credit
    • Excessive obligations remain after refinance request
    • Recent refinance approved in past 12 months/limited or no improvements
    • Business for self as daycare provider, maxed ratios, income high and required to support, commercial aspects to home
    • Limited assets/net worth, Business for Self tenure not met, excessive ratios
    • Real estate declined-post tension cable construction
    • Limited ability to verify income, requested decline, also property on negative property database
    • Outstanding mortgage balance is higher than appraised value can be supported

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    Robert May is the broker and owner of Rainbow Realty of Lethbridge Alberta. He is also a licensed mortgage associate and financing expert with Canada First Mortgage of Calgary Alberta. He has been in the real estate industry since 1993 and offers full MLS real estate services to Lethbridge and surrounding area, as well as mortgage financing, refinancing/renewals, preapprovals, and home equity financing to Lethbridge and Southern Alberta. He can be found online at www.LethbridgeLoans.com



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    Lethbridge Real Estate - Market Report for November 2008

    Liz Toles, REALTOR® - Lethbridge Real Estate: Real Estate Agent in Lethbridge, AB

    Balanced Real Estate Market in Lethbridge, AlbertaNovember statistics continue to reflect the balancing of our local market. The number of new listings each month continues to decline from previous months as only those "serious" about selling are putting their homes on the market. Prices have stabilized considerably with a 12 month average sale price of $259,774 across our board.

    With this said, I continue to hear buyers say they will wait. My feeling is that the perfect storm has brewed and it is time to take action for these reasons:

    1. Inventory is still high, meaning there is a great selection of homes for sale in Lethbridge and the surrounding areas. Although the inventory has passed its peak, there are still many well priced homes to choose from.

    2. Interest rates are low. "The Bank of Canada has cut the Target for the Overnight Rate by a total of 225 basis points since December 2007, bringing the rate down to 2.25 per cent."(Source: Housing Market Outlook - Canada Edition - Date Released: Fourth Quarter 2008)

    3. CMHC is forecasting modest growth in the real estate market in 2009. "After a 0.8 per cent decline in 2008, Alberta’s average resale price will advance 0.7 per cent in 2009".(Source: Housing Market Outlook - Canada Edition - Date Released: Fourth Quarter 2008)

    Timing the Real Estate MarketTrying to time the cycles of the real estate market to perfection is difficult and the exact right moment only becomes clear once it has passed. To take advantage of the opportunities that exist today, visit us at Lethbridge Real Estate.

    Lethbridge and District Association of REALTORS®

    MLS ® Statistic Report

    [NOVEMBER 2008 ]

    200820072006%INC/DEC [ 2007 - 2008 ]
    Total # of Listings [Month] 354 337 325 5%
    Total # of Listings YTD 5980 4859 4196 23%
    Total # of Expired Listings [Month] 167 118 68 42%
    Total # of Expired Listings YTD 1599 644 626 148%
    Total # of Sales [Month] 107 174 224 -39%
    Total # of Sales YTD 2479 3002 3351 -17%
    Total Sales Dollar Volume [Month] $25,047,605 $41,558,763 $40,426,470 -40%
    Total Sales Dollar Volume YTD $612,130,134 $700,059,190 $570,170,815 -13%
    Greg  Toles, Mortgage Associate: Mortgage Company in Lethbridge, AB

    Zero down is actually completely impossible... why? You will always have to put down a deposit (of good faith) when you write up a purchase contract and you always have to prove that you have closing costs available (which lenders typically calculate at 1.5% of the purchase price depending on where you are purchasing).

    However, I can show you how to obtain mortgage approval through other means. Maybe a down payment that is "gifted", sweat equity or a rent own option?.

    For more information, please contact me, your

    CUBA bound again!

    Robert W. May, Realtor/Mortgage Expert Lethbridge Mortgage & Real Estate Info: Loan Officer in Lethbridge, AB

    Today we booked another trip to Cuba for Christmas.  This will be our 5th trip to Cuba in the past 3 years, we try to go every 6 months.  Our vacation is a little different then most people's, and most are suprized to discover how exactly we spend our time there.  The truth of the matter is that we take down suitcases full of charitable aid and donations for Cuban families in need.

     

    In the past 3 years we have taken suitcases full of medicine, clothes, toys, eye glasses, school supplies, car parts, electronics, shoes and socks, tools, motorcycle helmets, solar equipment, and bicycles.  We have delivered to schools, orphanages, old age homes, churches, families, and even the El Alba University where we sponsored an art contest.

     

    We are not Cuban, we are pastey white canadians.  We don't do this because we are part of any church or charitable organization.  We don't gain any financial benefit from doing this.  We spend the 6 months between trips buying and gathering things wherever we can.  My dentist donates toothbrushes, we buy summer footwear on clearance each fall, we shop at liquidation centers and dollar stores, etc.  On the previous two trips we were accompained by relatives who came with us because they wanted to participate in the adventure too.  It is so much fun and the people that we help are so appreciative.  We do stay in 4 star all inclusive hotels, but spend our days travelling to specific locations to deliver our donations directly to the people.  The last trip we went on we didnt even set foot on the beach or in the ocean in the 7 days we were there, lol.  Most of our clients, coworkers, friends, and relatives have no idea that we do this, and that is fine with us as we don't do it for that reason.

     

    This trip will be a little bit different then the past few as we are taking our kids with us.  While we know that it will limit the distance we can travel, we hope that they will gain a unique perspective on their lifestyle here at home if they get to see how people in poorer countries live.  Even our christmas shopping this year will include purchasing and wrapping gifts for needy Cuban children, which has our kids completely excited.  I am sure we will end up spending more time at the hotel pool and the beach then ever before, but I think this will be one of our best trips yet and hopefully a life changing experience for our kids.

     

    So I am trying to cram my way through spanish for dummies for the 5th time, still not going to fast and procrastingating like crazy.  I will no doubt have it with me on the plane and be reading right up to the time we check in, lol. 

     

    Robert May

     

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    Robert May is the broker and owner of Rainbow Realty of Lethbridge Alberta. He is also a licensed mortgage associate and financing expert with Canada First Mortgage of Calgary Alberta. He has been in the real estate industry since 1993 and offers full MLS real estate services to Lethbridge and surrounding area, as well as mortgage financing, refinancing/renewals, preapprovals, and home equity financing to Lethbridge and Southern Alberta. He can be found online at www.LethbridgeLoans.com



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    Lethbridge mortgage real estate financing alberta mortgages blog