CHRIS CARTER

Good news on the refinance side or mortgage lending!

HARP 2.0 will help. HARP 1.0 and DU Refi Plus programs were widely criticized as well, but in the end many bankers/brokers were able to market this program to better serve their clients and increase production. Nothing out of Washington is perfect, or even close to it, but HARP 2.0 is a step in the right direction and will help those who are ready to embrace (i.e. market) it. Lenders and investors alike are already operating at increased capacity and scrambling to improve efficiencies and turn times in order to turn over their lines. Many bankers/brokers are already overwhelmed with business and have pipelines that will keep them more than busy for the next few months.

HERE’S WHAT WE KNOW… It will still take some time to actually have HARP 2.0 hit the market. Loan Prospector won’t be updated for a month or two and correspondent investors have yet to announce their overlays, pricing, and when they’ll be accepting submissions. I am not sure anyone with agency approvals would be comfortable manually underwriting a HARP 2.0 loan today at say 125 ltv. May it take a while? Sure. Will there be overlays? Count on it. But will you be able to market and originate a new program to help a client base which would have no hope of improving their situation? Yes!

We’re going to be hit with a lot of details over the next month or two so stay tuned…I hope everyone is ready to help potential clients take advantage of higher ltv’s!

I think early/mid-early 2012 you will see many of these changes. I welcome any email questions about these products!

Did you know that TJC Mortgage now has updated their funding fees for VA loans?! I am committed to bring you the most update lending laws and policies and you should know about this 100% purchase program for America’s veterans! Recently in the below memorandum, the VA has updated their costs to perform a VA loan.

FUNDING FEE UPDATE AS OF NOVEMBER 22, 2011

1. Purpose. On November 21, 2011, the President signed H.R. 674. Section 265 of the law raises funding fees to the pre-November 18, 2011 levels. The fees specified in Section 265 are valid through September 30, 2016.

2. Proper Funding Fee Charges

a. Loans closed November 18 through and including November 21, 2011: Funding fees for loans closed during this period will be the lower fees cited in the Department of Veterans Affairs (VA) Circular 26-11-12, dated September 8, 2011.

b. Loans closed November 22 through and including September 30, 2016: Funding fees for loans closed during this period will be the same as those that existed prior to October 1, 2011. See Exhibit A attached for a complete breakdown of current fees.

c. Interest Rate Reduction Refinancing Loans and Assumptions: Funding fees for these loans remains at .50 percent.

3. Rescission: This circular is rescinded on October 1, 2012.

Circular 26-11-19 November 22, 2011

If you should have any questions about the new VA funding fees or any other specific VA loan questions, please call as I am a specialist!

I was just wondering because I thought about advertising in the newspaper.

Why is my credit score different from what the lending is seeing?

There are a few misunderstandings happening recently concerning the credit rating range that usually happens when consumers pull their own credit opposed to when a lending institution pulls a credit report. I think this really is brought on by the recent introduction from the VantageScore as well as the FICO rating which we all have been accustomed to using over the years. I’ll briefly describe the primary variation between the two in order to clean up these particular misunderstandings.

VantageScore range vs. FICO score range
VantageScore range: 501-990
FICO range: 300-850

With viewing this, you can see the two ratings overlap. This really is exactly where, I think, the actual issues about the existence of FICO scores over 900 are coming from. When a borrower is given their own FICO ratings through the loan provider, many people don’t give consideration which brand they are getting simply because they don’t know there is a difference. It’s easy to understand the frustration; however it’s always best to have a FICO score when talking to a lender. I don’t want to misquote an individual because a borrower is using a VantangeScore instead of our FICO score.

With this being said, if you have any more questions as to why your credit score is different from the lenders, give me a call at 205-776-8402.

Just a thought...Today's the last day to close on refinances! Usually I am ready to kill someone because I’m trying to get a file out the door. But not today! Usually we clear off about 1/3 of our active pipeline. Today’s closing slate is slammed full. But the great news is the amount of loans in the pipeline is about twice as full right now as it would be on a normal “start” of the month. Basically, we clean house at the end of the month and usually have to reload, but not this month! Thank you Mortgage Gods for the blessing!