Andrew Bleyer

After the incredible events of this past weekend, record setting rainfalls and major flooding in our community, water conservation in Nashville is no longer just about being green. It's our civic responsibility. The state has ordered a mandatory water conservation effort. One of Nashville's two water treatment facilities is still underwater. For more details, read this article.

The statistic I just read says the average household in the US uses 100 gallons (enough to fill 1600 drinking glasses) per day. Clearly being a little more conscious and making a few small changes would help. While our current situation is a little more severe...our Mayor has asked that we only use tap water for consumption (drinking/cooking), the following suggestions should be easy for anyone to apply regardless of your location.

1. Rainwater collection - Rainbarrels are perfect for watering the yard, plants, and any low-pressure hosing jobs. I've heard (but haven't tested) that you can get a submersible pump for your rainbarrel to use the water you've collected for high pressure jobs (like washing cars).

2. Turn off the faucet - Don't leave the water running for things like brushing your teeth, shaving, cleaning/peeling fruit and vegetables. Fill up a small bowl, or the sink basin with just enough water to get the job done.

3. Catch/Recycle/Reuse - Instead of wasting a bunch of water waiting for the shower to get hot, put a bucket or watering can under the shower and use that for watering plants, boiling for tea, etc. Similarly, rather than wasting water while waiting for the water in your tap to get cold to fill your drinking glass, fill a pitcher or reusable plastic jug and keep it in the fridge.

4. Shorter showers - Taking showers uses alot less water than taking baths... as long as you don't stay in too long. I have a tough time with this one, but if you take ten minute showers and can cut your shower time down to 3 minutes or less, that's a lot of drinking water you've conserved.

5. Check your meter - Leaks can waste a lot of water (and cause lots of other problems for homeowners like mold, water damage, etc). To use your meter to see if you have leaks, simply check it before and after a two hour period when no water is used. If it doesn't read the same, you've got a leak somewhere.

Hope these are helpful. If you have any additional tips that you use to conserve water, please share them with me!

I have clients buying a home in Williamson County in a community with a home owners' association which strictly deals with the maintenance of a couple of commonly owned amenities (tennis court, playground). The monthly fees for the HOA are minimal.

I call the property management group who manages the association in order to determine how much they were going to charge my clients for a transfer/setup fee and how many months they collect on the front end. They directed me to their website in order to download the information. At the website you need to first create an account and then pay a hefty fee (more than the monthly dues for the association) in order to obtain this basic information.

We want to know how much we should be collecting on their behalf, and they're saying we're not going to give you that information... you have to buy it from us!

There are three large property management groups in middle Tennessee doing the same thing for at least the past year and a half... One of them charges $200 for a copy of their by-laws which anyone can go down to the county clerk's office and look up for themselves!

It's disgusting and I can't believe it's legal. If there's not a law against this practice there ought to be. Are any of you aware of anyone working on this one already?

Just spent the past 2 days completing the 20 hours of education required by the SAFE Mortgage Licensing Act.

For those unfamiliar with the SAFE Act, here is a nutshell version. Part of the Housing and Recovery Act (HERA), the Secure and Fair Enforcement (SAFE) for Mortgage Licensing Act was passed in July of 2008. Again this is the nutshell version (I encourage you to click on the link above to see HUD's summary which is much more detailed): the purpose of the Act was to create national standards for mortgage licensing which includes mandatory education and testing requirements for loan originators.

The SAFE act also created a national database called the National Mortgage Licensing System (NMLS) that is good in a number of ways, but primarily for centralizing the data so it's easily accessible by consumers, prospective employers, regulators, etc.

In my opinion, like much of the regulations we've seen arise over the past couple of years, the idea here is to protect consumers, get rid of the bad apples in the mortgage business, and create more knowledgeable loan originators.

By and large, this is a good thing. I've been complaining for years that there were no education requirements for loan originators here in Tennessee. When I got into this business in 2003 they didn't even require licensing for all loan originators, we were allowed to operate under the managing partner's license. That changed back in 2006 for all of us except for those working under a federal depository institutions charter (FDIC). They're still allowed to originate under their employer's charter without obtaining individual licensing. These individuals are required now to register with the NMLS, but aren't required to complete the education or testing as these are only requirements for obtaining individual licensing.

But I digress... getting back to my original topic, I just spent the past 2 days sitting in a small classroom completing my initial 20 hour education portion of the requirement in 2 10 hour sessions. Here's what we reviewed in all that time:

1. All Federal and State (Tennessee) legislation which apply to the mortgage business (old and new)
2. A brief overview of the mortgage business, primary and secondary markets, and recent developments that have impacted our business.
3. The Mortgage Lending Process
4. Conventional Financing
5. Government -Sponsored loan programs
6. Non-Traditional mortgage products (which now seems to apply to everything other than the 30 year fixed rate loans)
7. Understanding Appraisals (& HVCC)
8. Ethics in the Mortgage Lending profession.

With all of the changes we've seen over the past two years, I've had to build reading into my daily schedule, just to stay on top of all of these things (I realize that probably puts me in a minority). I'll be honest, 20 hours going over material I was largely familiar with was tedious, but I would have benefited greatly from a class like this when I first got into the industry. Overall, I believe that education and testing with mandatory minimum score requirements for all loan originators is good for our business.

Tennessee won't release the state test until next week (2/22), but I'm planning to take the national test at my earliest opportunity, so wish me luck. 75% is the minimum passing score. I'll let you know how it goes.

OVERDUE UPDATE: I've taken the National exam and scored an 88%. There were 100 multiple choice questions. Honestly, a handful of them left me scratching my head wondering what they were asking. I suppose that's "standard" for standardized testing. Next week the state exam.

Had a couple apply the other day so they could prequalify for financing towards the purchase of their first home. They were in a unique situation in that the primary breadwinner has no credit history and the full-time student has excellent credit history.

While I was able to get them pre-approved with this scenario, alternative credit is becoming an issue with a lot of investors in this tightening market. My primary investor, Bank of America Home Loans, won't work with someone anymore without a credit score.

So that I'm clear, the recommendation I made to them isn't a solution for everyone, but for their specific scenario it makes sense. Because the co-borrower has got several revolving tradelines with more than 2 years of perfect payment history, and the borrower has never opened a credit account, adding the spouse to one of these accounts in good standing will help jump start their credit.

If either borrower had a derogatory history, I wouldn't advise doing this.

It's also important whenever you're adding another person to one of your revolving credit accounts (I would strongly suggest only sharing your credit with immediate family) to make sure that you're on the same page about how the credit will be used. Particularly if that individual has never had access to credit before. You may want to visit the Federal Trade Commission's website (get the links from one of my previous posts here) to print out some basic information on good credit practices. You can also call or email me (615-850-4295, ableyer@myeliteloans.com) for a free copy of my Credit handbook.

SIDE NOTE: The best way to use revolving credit cards is to use them for things you need (and can afford)like gas or groceries and pay them off in full each month. If you can't afford it now, don't buy it on credit, start saving. Some revolving credit cards have absolutely ridiculous interest rates, the highest I've seen was 32%... you'd be crazy to carry a debt load and pay interest at that rate!!!

The following guidelines have been put in place by my underwriters, some in response to, some in anticipation of changes from our investors.

Credit Scores: The minimum credit score for all borrowers on the loan is now 640 (from 620). The only exception to this is a Bank of America to Bank of America streamline refinance.

Debt Ratio: The total debt ratio (housing plus all other consumer credit vs. income) for all "accept" and "approve" FHA loans can not exceed 48% regardless of AUS response. All "refer" or manually underwritten loans can not exceed 35% for the housing ratio and 45% total debt ratio.

Gift Funds,Grants or Eligible Down Payment Assistance: If any portion of a borrower's funds to close is derived from a gift, grant, community second program or eligible down payment assistance program, the
loan must meet the following guidelines:

1. Loan must receive an "approve" or "accept" response.

2. Maximum Housing ratio is 31%.

3. Maximum total debt ratio is 43%.

4. Borrowers must have two months reserves after funding- These reserves may not be gifted.

For the most part, I think these changes will be for the best. I've always been of the mind that people should have to work for what they want, and I have often felt that credit has been given too freely for too long. I do think I will see clients who will have to work for it over the coming months. Hopefully I'll be able to get more people to educate themselves about their credit, learn how to correct errors and how to mend and maintain their credit over time. I believe we're already seeing more people with a savings plan built into their budgets, but hopefully some of the changes will get more families working on this too.

Other FHA News: They have extended the temporary waiver excluding bank foreclosures from the FHA 90 day seasoning requirement through May 10 of next year (2010).

Last summer (2008) FHA came out with risk based pricing for their mortgage insurance premiums and then placed a one year moratorium on them on October 1, 2008. They also set the current pricing structure at that time. Given that half of the risk based pricing affected people with scores that no longer qualify (credit scores below 640) it really comes as no surprise that they've announced that no changes will be made to the current pricing when the moratorium ends on October 1 of this year.

****Amending this post on 8/28 (originally posted 8/26). I've discovered since posting that at least 2 local outlets still have less conservative score requirements. Haven't wrapped my head around this yet. It seems just as likely that these investors are asking for trouble as it is that others (including mine) are being overly conservative... I know that RLCA (Residential Loan Centers of America who imploded when they had their correspondent lines shut off back in February for having an awful default ratio) allowed scores down to 550 long after everyone else had gone to 580. It could be argued this is the reason they're no longer in business.