Darren Stewart

The rates today for USDA loans are approaching the lowest that I have ever seen, this program is one of the 2 programs that are still around that require no down payment and seller can pay closing costs. We have area and income limitations but this is a great opportunity for you and your clients!

100% financing available with no down payment and no MI -and right now there are record low interest rates on this program.

Please feel free to contact me if you want any more information on how to utilize the USDA program to help clients get into homes with 0 down on a great loan program!

Darren Stewart

Metropolitan National Bank

We wanted to thank our business partners for their participation in our Realtor Round Table discussion, meeting face to face with underwriter and an appraiser along with representative from the Home Builders Association we were all able to come together to have a frank discussion concerning today's market and the challenges we all face. We believe communication among from all parties in each stage of the real estate transaction allows us to see what each of us face and come up with solutions and tools to help each other. Thank you so much for your participation and we wanted to recap the discussion here for the benefit of those business partners that could not make it to the discussion. We will continue having these roundtable discussions if you are a realtor in our area who is interested in attending our next round table please feel free to email us or comment on this blog. Thanks again so much for your participation and input!

APPRAISALS and UNDERWRITING:

1. Vapor barriers

2. Issues with property prior to appraisal (avoiding multiple trips i.e. delays to closing)

3. Criteria for certain programs may have changed

4. Seller preparation - an ounce of prevention worth a pound of cure

5. Communication with appraisal under new rules (YES! you can speak with an appraiser)

6. The importance of comparable sales and the challenge in today's market

7. The effect of appraisal service companies vs. doing business locally

8. Certain products (VA, Bond Loans) require the use of an appraisal service company to be used

9. How the appraisal fee is determined

10. The final inspection after repairs and report to realtor

11. Repairs - what we are underwriting

12. Inspection - when it may be asked for by the lender / underwriter

13. The climate in today's market in underwriting

Matt Morrow brought us updates on the construction side of the market and the challenges and hope for the builders moving forward.

Vapor Barriers- this is a USDA requirement - if the home is being listed and noted as USDA eligible financing it must have a vapor barrier according to USDA guidelines. It is noted that there is not a consensus among builders whether this is something that is good to have or not, USDA leaves no room for compromise on this topic.

Property conditions and possible issues at appraisal begin with the first listing appointment. Having a tool that is updated on what is exactly required for FHA, VA, USDA would prove invaluable to both agent and homeowner as this would avoid delays and allow the seller to be better prepared on what could be asked for by a buyer or by the buyers lender. We are working on a tool that will help our business partners at their listing appointments to communicate these items to their potential clients. Property condition requirements and what FHA, USDA and VA might focus on may have changed. Knowing where they are focusing will be addressed in the tool we are working on.

Communication with the appraiser, once the value has been established and the report is produced any party is allowed to contact the appraiser to discuss what is in the report, or get something clarified.

Remember the comparables that are required to be used have very strict limitations being placed on the appraiser by Freddie/Fannie guidelines. Adhering to those standards ensures that the appraisal will be accepted by the investors and underwriting.

Metropolitan National Bank utilizes a select small group of local appraisers for each of the locations. We do NOT hire an outside appraisal service company, which allows us to adhere to current guidelines while knowing the strength of the appraisers we do business with. There are 2 exceptions; VA - where VA will hire the appraiser, and MHDC First time home buyer bond loans where the appraisal will be ordered through the service company of the Bond Servicer for the state of Missouri. Metropolitan National Bank's process allows for appraisal fees to be the lowest cost and not inflated due to middle agents tacking on fees for the service.

We discussed communicating with the realtor after a final inspection is completed by the appraiser, and possibly sending the report to the real estate agent. This report is part of the appraisal that is paid for by the borrower and the borrower will always get a copy. We cannot send the full report to the agents, but can send an e-mail indicating the appraisal received final approval from under-writing.

When it comes to repairs - health and safety issues are going to stand out, and will be reviewed and potentially a requirement to be remedied may be issued. There has been a shift in FHA underwriting requirements that may have the property inspection report be reviewed if repairs are mentioned in the contract.

More now than ever, knowing who you are doing business with is imperative and can make a world of difference in how smooth a transaction can occur for you and your clients. Navigating the rules, understanding the lending climate and the market information takes greater communication between knowledgeable professionals. We hope that we have added value to you by bringing a group together to discuss the challenges we each face on a daily basis while working together to provide the best home buying experience for your clients.

"COMING TOGETHER IS A BEGINNING

KEEPING TOGETHER IS PROGRESS

WORKING TOETHER IS SUCCESS"

-Henry Ford

To Our Success!

The Metropolitan National Bank Mortgage Team

I wanted to revisit the bond money program again because of the current market situation and the fact that we may be needing to find a plan B for some USDA loan requests. If you have not heard USDA may or may not be running out of funds in April currently they are scheduled to deplete the funding of this program. The reason for this is because of the popularity of the program and the fact that consumer demand has increased exponentially.

IF there is an interruption of being able to provide this program I wanted to make sure that each first time home buyer was aware of the MHDC Cash Assistance Loan - this program provides cash assistance to first time home buyers that meet eligibility and income guidelines. Keep in mind THIS IS NOT 100 % financing the buyer is required to come up with some down payment but it is minimized by cash assistance provided by MHDC- or Missouri Housing Development Commission.

Under this program cash assistance is provided in the form of a soft forgivable second mortgage, at a 0% interest rates with no payments as long as the buyer of the home occupies the home for at least 5 years. The amount of the assistance is simply divided by 60 and each month that portion is forgiven, should the buyer decide to sell their home within 5 years the amount is prorated on what needs to be paid back and however many months left in the 5 year time frame is the amount that would have to be paid.

Since the monthly payment on the 5 year loan is not made as long as the buyer is living in the residence it is considered forgiven but is also considered taxable income by IRS standards and this amount the owner of the home would receive a 1099 on.

Sample calculation - on the purchase of a $100,000 home. How to calculate the amount of cash assistance you will receive as a first time home buyer.

$100,000

-$96,500- financable amount on the FHA program

= $3500 needed for down payment along with closing costs

- $2,895 amount of cash assistance (calculated by multipyling loan amount x .03)

$605.00 down payment needed + closing costs.

Closing costs on this program can be paid by the seller making the amount that the client would need at closing approximately $605.00.

Income guidelines and Purchase price limits can be found at www.mhdc.com.

While this is a great program current interest rates are also posted at www.mhdc.com, and the rate is set by MHDC and the bond issue that is being utilized.

This can sometimes be lower than market or higher than market depending on the timing of the issue and what the market does after the bond rate is set.

Should you have any questions regarding this loan program please feel free to email me at my active rain site or at dstewart@metronationalbank.com

Darren Stewart

I wanted to take a moment and thank my business partners for trusting me with their clients and the business, March is roaring like a lion and April looks like it is surpassing those numbers, despite what I thought was going to happen this is all not due to the tax credit I have a good mix of first time home buyers and repeat buyers all under contract. Right now 70% of my business is purchases these next 2 months and 30% is refinances.

Thank you again to the Southwest Missouri area community for your continued business and your business partnership, I really appreciate your business and our working relationship, I look forward to the future and meeting any home finance needs you or your friends may have.

Darren Stewart

Metropolitan National Bank Mortgage Center

3550 S National

Springfield MO 65807

The word change has been the topic in many of my blogs for 2009 and it looks like that trend may be continuing in 2010. We definitely have been seeing changes in the market, in underwriting, interpretation of guidelines and then other rules as investors tighten a few things.

Having the ability to have multiple investors and having underwriting and processing and closing done at in house allows us to have multiple choices for our clients even in these times when it seems like that some choices are being eliminated.

We are still bringing on new investors and opening up other channels to other business partners to serve our clients needs and deliver the best service possible. Metropolitan National Bank's Home lending team is dedicated to assisting our clients in the purchase or refinance and dedicated to serving our business partners as well.

In the vein of keeping everyone informed of important dates coming up in the mortgage industry:

Tax credit deadlines- under Contract by April 30- closed by June 30-

(soldiers serving over seas may have a later deadline please check with an accountant for detailis)

FHA changes and upfront PMI charges are going up effective with case numbers assigned April 5, 2010 and thereafter.

USDA funding - these funds are dwindling and this program may experience delays however we are working with the top investor in the US who is keeping us updated on exactly where this issue is and we will continue to communicate those messages here on my blog.

Darren Stewart

Loan Officer

Metropolitan National Bank Home Lending Team