Illinois Mortgage Lender Greg Zaccagni

The 203(k) loan is a fully disbursed loan which allows a borrower to purchase or refinance a property and finance the cost of rehabilitation with one loan. Because it is fully disbursed at closing, the 203(k) loan can be insured by HUD as soon as the loan closes. The mortgage amount for these loans is based on the projected value of the property with the work completed, taking into account the cost of the work. HUD has taken a strong position to encourage this program and the loan is now easier to originate and close than ever before.

203(k) Advantates:

•· No up-front MIP

•· Non-profit organizations are eligible with only 5% down payment and can buy multiple properties

•· Finance up to 6 months mortgage payments

•· Special HUD down payment programs

•· Most closing costs can be financed

And all FHA Mortgage loans are assumable!

www.MortgageAdvisor.info & www.GregZaccagni.com

Due to FHA's concern that some homebuyers in these transactions may attempt to provide misleading information regarding the rental income of the property being vacated to qualify for the new mortgage, FHA is instituting underwriting guidance designed to assure that the homebuyer can make payments on the full debt service of both mortgages.

until further notice, the underwriting analysis may not consider any rental income from the property being vacated except under circumstances described herein.

Rental income on the property being vacated, reduced by the appropriate vacancy factor as determined by the jurisdictional FHA Homeownership Center (see http://www.hud.gov/offices/hsg/sfh/ref/sfh2-21u.cfm) may be considered in the underwriting analysis under the following circumstances:

•· Relocations: The homebuyer is relocating with a new employer, or being transferred by the current employer to an area not within reasonable and locally recognized commuting distance. A properly executed lease agreement (i.e., a lease signed by the homebuyer and the lessee) of at least one year's duration after the loan is closed is required. FHA recommends that underwriters also obtain evidence of the security deposit and/or evidence the first month's rent was paid to the homeowner.

•· Sufficient Equity in Vacated Property: The homebuyer has a loan-to-value ratio of 75 percent or less, as determined by either a current (no more than six months old) residential appraisal or by comparing the unpaid principal balance to the original sales price of the property. The appraisal, in addition to using forms Fannie Mae1004/Freddie Mac 70, may be an exterior-only appraisal using form Fannie Mae/Freddie Mac 2055, and for condominium units, form Fannie Mae1075/Freddie Mac 466.

The guidance in this Mortgagee Letter applies solely to a principal residence being vacated in favor of another principal residence. This Mortgagee Letter is not applicable to existing rental properties disclosed on the loan application and confirmed by tax returns (Schedule E of form IRS 1040).

www.MortgageAdvisor.info & www.GregZaccagni.com

Dow Jones industrials went up 400 points today following a report that the federal government may create an entity to absorb banks' bad debt.

It's reported that Treasury Secretary Henry Paulson is considering the formation of a vehicle like the Resolution Trust Corp. that was set up during the savings and loan crisis of the late 1980s and early 1990s.

"It's going to take a lot of the bad debt off the balance sheets of these companies," said Scott Fullman, director of derivatives investment strategy for WJB Capital Group in New York, commenting on the possibilities of an entity akin to the RTC. "It could alleviate many of the pressures causing the credit crisis, he said, and reopen credit markets." But Fullman noted, "the devil's in the details."

www.MortgageAdvisor.info & www.GregZaccagni.com

Related Articles:

Continued decline of financial giants increases pressure on Federal Reserve to cut Discount Rate

1st it's Countrwide being sold to Bank of American

Then it's the Feds taking over Fannie Mae & Freddie Mac

Then it's Chase preparing to buy Washington Mutual

Then Lehman Brothers files Chapter 11

Then Bank of America closes in on Merrill Lynch

What's Next?

Many of the remaining financial institutions are not that solid themselves and they are purchasing the assests of insolvent MAJOR INSTITUTIONS. It's cheaper for the federal government to bulster their bottom lines then worry what to do if/when the purchasers become insolvent themselves. This point was driven home now that there is NO BUYER FOR LEHMAN. What happens if there is no buyer for the next one to fall? What if the deals don't close with Chase/WaMu & BOA/Merrill?

The best thing for the federal government to do is continue reducing the federal funds rate making the loans these remaining institutions have more profitable. Don't be surprised if the funds rate drops this week triggering a mini refinance boom for the mortgage industry. That will also put more disposable income in the pockets of americans and help keep the economy going...

Are you ready to refinance?

www.MortgageAdvisor.info & www.GregZaccagni.com

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The credit reporting bureaus have forms you can use when disputing negative marks on your credit. Using their forms can makes things easier on them. You want them to have to work as hard as possible. They only have 30 days to resolve your claims or remove the items from your record.

You don't have to explain why something is in dispute. You just have to state what is in dispute.

Start your letter saying something like:

"I reviewed my credit report and found the following errors. Please delete them within 30 days as required by law and send me a copy of the corrected report."

Include a list of the contested items. List the creditor, account number, and amount for each item.

You will need to include an explanation. Keep it short & simple like: "account never late" "duplicated account" or "reported in error." The more words you use, the more they may use it against you. Do not report that a negative mark is a result of fraud or criminal activity unless it really is.

Send the letter certified mail with signature required. This gives you proof on when the 30 day clock starts ticking.

www.MortgageAdvisor.info & www.GregZaccagni.com