Connecticut

Tis it nobler to put your Borrower into a “Subprime Loan” or have them wait to clean up their credit? I have done a few Subprime Loans, but not many. They definitely a place in the Lending Industry, and it is an option that I feel should only be looked at after everything else has failed.

Some people think that Subprime is an automatic. Can’t do a conventional loan, do Subprime. Peace of cake, I don’t think so. The people that I have been able to put into a Subprime Loan are generally those that are selling a house, but their credit has gone down the shut. People that don’t have a house to sell, those Subprime Loans have been much tougher, and I will explain why.

Subprime candidates have bad credit, now there is a revelation. The reason why they have bad credit is because they don’t pay their bills. The reason why they don’t pay their bills is either because they don’t want to, or more likely don’t have the money to pay them. And there lies the Subprime dilemma, no money. Maybe other Loan Offers on here like Jeff or Brain, can inform me of Subprime Venders that don’t have the same limitation as the ones I have, I welcome that input. So my comments are based on the Subprime Venders I deal with.

Subprime with no money = no loan most of the time in my world. If I have to have at least a 560 score before I can usually offer them a loan with a 10% downpayment. If they are selling a home, that is normally no problem, but if they are not selling a house, rarely is there money to do 5% much less 10%. As we go up the score ladder the need for downpayments start to go down, but so does their chances of me getting them into a conventional or government loan improve.

When I get to that point I give them the choice, Subprime or wait for their credit to improve enough for us to do a conventional or government loan. Once I show them what they still need to do to get their credit score up, the choice is usually to wait, instead of paying the higher rate, points, and being stuck with a prepayment penalty for two years. Some can’t wait because they have to get into a house, or love a house they have found and don’t want to lose it. In those cases I work as hard as I can to get the deal done, but there are rules and regulations that have to be met. If they chose to wait I work with them to get their credit cleaned up, and the company that runs my credit reports has a great credit dispute department that has been a great help.

I know that some people specialize in the Subprime Loan market, and probably have ways of getting around the down payment requirement on the really low scores. 80/20’s are not an option for me with the real low scores, it does become an option as I start to approach the conventional end of things. But again, waiting is a lot of times the better choice when they get that close.

I would be interested in hearing ways that any of you have found to get around this dilemma. For those of you who are not Loan Officers, your comments are welcome as well, especially what do you do as a Realtor in these cases. Do you continue to work with them even though they might not be ready to buy right now, or do you feel that it is a waist of your time?

Long blog and no solutions on my end, but maybe there will be one from your end.

THE END, BUT HOPEFULLY YOUR BEGINNING.

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Info about the author:

George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com

I am sure that most, if not all of us have told a "Redneck Joke" at least one time in our lives, but nobody does it better than Jeff Foxworthy. Jeff has been picking on the "Rednecks" for a long time. Well now he has decided to expand his horizons to us New Englanders. So for those of you who have not heard them yet, I thought that you might get a kick out of them. What is sad is that just like the blogs that I posted on When I Was Growing Up and My MotherTaught me I can identify with most of his New Enlander jokes.

If your local Dairy Queen is closed from September
through May, you live in New England

If someone in a Home Depot store offers you assistance
and they don't work there, you live in New England.

If you've worn shorts and a parka at the same time,
you live in New England.

If you've had a lengthy telephone conversation with
someone who dialed a wrong number, you live in New
England

You know you're a New Englander when: "Vacation" means
going anywhere south of New York City for the weekend.

You measure distance in hours. . well, of course!

You know several people who have hit a deer more than
once.

You have switched from "heat" to "A/C" in the same day
and back again.

You can drive 75 mph through 2 feet of snow during a
raging blizzard without flinching.

You install security lights on your house and garage,
but leave both unlocked.

You carry jumpers in your car and your wife knows how
to use them.

You design your kid's Halloween costume to fit over a
snowsuit.

The speed limit on the highway is 55 mph -- you're
going 80 and everybody is passing you!

Driving is better in the winter because the potholes
are filled with snow.

You know all 4 seasons: almost winter , winter, still
winter and road construction.

You have more miles on your snow blower than your car.

You find 10 degrees "a little chilly."

You actually understand these jokes, and forward them
to all your New England friends &others!

If we can't laugh at ourselves who can we laugh at? I couln't help myself, I had to throw in a "Redneck Picture".

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Info about the author:

George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com

There are people that make a very good living, telling other people how to be successful. Success seems to be treated as some great mystery, but I fail to see what the great mystery is. To me the formula is pretty simple, but doing it is NOT.

All the successful that I know have these thing in common:

1) They have a plan.

2) They work their plan

3) They don't let other things distract them from their plan

4) They do all the little things that others are not willing to do

5) They are constantly in touch with their customer base

6) They make their clients feel like they are the only client they have

7) They always have the time

8) They return their phone calls right away

9) They are always up to date in what is happening in their field

10) And the most important one to me they enjoy what they are doing, it isn't work to them.

I am sure that there are other things that you feel could be added to this. Please comment on them and add them to this Blog.

My question is to the Realtors on AR. Why do you do business with the Loan Officer that you use?

- Is it the service that he or she provides?

- Is that availability?

- Is because they get back to you right away?

- Is it knowledge of the product?

- Is it the way he or she gets back to and treats your buyers?

Maybe it isn't any of these things, but what ever it is I would like to know what it is, and what is most important to you.

Even though FHA made major change to their appraisal requirements, some Realtors are still concerned about Loans that require an FHA Appraisal. Most of these Realtors still have concerns because they are not aware of the changes that occurred in January of this year, or they have not seen these change first hand yet.

I have done several CHFA, and FHA Loans since these change and I can truly say that there is very little difference between an FHA Appraisal and a Conventional Appraisal today. Since Januare I have only had one CHFA Loan that need repairs, and they wer minor. Here are some of the major changes that occurred in January:

Examples of MINOR property conditions that no longer require AUTOMATIC repair for existing properties are:

• Examples of Missing handrails;

• Cracked or damaged exit doors;

• Cracked window glass;

• Minor plumbing leaks (such as leaky faucets);

• Defective floor finish or covering (badly soiled carpeting);

• Rotten or worn out counter tops;

• Crawl Space with debris or trash;

• Defective paint surfaces in homes constructed Post 1978

Examples of tests that may no longer be REQUIRED:

• Wood Destroying Infestation Report-required if there is evidence of READILY OBSERVABLE ACTIVE infestation;

• Well (Individual Water Test)-Required if there is knowledge that well water may be near sources of contamination;

• Septic Test-required if evidence of system failure.

As you can see these were major changes!!