Gene Mundt

In the course of doing business in the first quarter of 2009, I have been pleasantly surprised by the amount of buying interest I have experienced. While it's true the path to borrowing money is a little more tricky to navigate and lending programs are more restrictive than in the past, there is still an abundance of lending monies available for purchases and more than just a few buyers able to qualify for those funds. It's also true though, that having seasoned advocates and knowledgeable real estate and mortgage professionals at your side while trying to navigate that path has never been more crucial.

Much has taken place within our financial markets over the last year, but buying a home is still possible. With just "fair to average" credit and a down payment of 3.5%, you can qualify for a home loan thanks to FHA. And from now until November 2009, you can receive a tax credit of up to $8,000 for buying that home, if you meet certain perameters. Add the present low interest rates to the mix and it sounds like a fantastic time to buy. (How does a fixed rate for 30 years in the 5% to 5.5% range sound?)

Now I know you are saying ... "Okay, okay, I get your drift! But, what do I buy? How do I go about finding my dream home at my dream price? What professionals will prove to be of assistance to me?"

Probably my biggest suggestion to buyers is this ... now, more so than ever before, you need to know who the SELLER of the property is. Why? Because the difficulty level of buying a home will be dictated by whom the seller is. Yes, you want a great deal, but remember ... it's only a great deal if you actually close! Otherwise, it's a waste of your time, emotions, and dollars.

What do i mean? Even if you are a well-qualified buyer, certain properties (and the transactions required to buy them) can increase the odds of your failure to close. I've seen many deals, (offers, contracts, etc.) fall apart because BANKS and LAW FIRMS representing those banks have become sellers of properties (short sales). This can cause great frustration for a potential buyer.

Time delays can occur while banks and law firms make final determination as to whether they will allow the seller to enter a sales transaction owing more than the agreed-upon price. With the inventory and many great deals available in the present market, why would you possibly want to face the frustrations associated with these transactions or wait months for a bank's decision? The stress and disappointment that can ultimately be connected to these deals can be excruciating for would-be buyers.

My suggestion? Pass on these properties and continue your home search. If a listing identifies the property as a "short sale" or "pre-foreclosure" ... move on. Find a property already foreclosed upon, actually owned by the lender, and being disposed of by their REO (Real Estate Owned) Department. That department's sole purpose is to "unload" properties, so they're going to make sure transactions and closings are successfully completed. These are the "best" deals out there as far as price is concerned, as these departments have the ability to negotiate a deal and get it closed! They are motivated to close because they wish to "limit additional expenses" for themselves.

As a lender, I naturally monitor the real estate markets. I am in constant contact with buyers, sellers, Bank/REO Departments, and other real estate-related professionals. More importantly, I work on all types of transactions from start to finish, and know what makes for a smooth and successful one. Garnered from those experiences, I have compiled a list of my observations for home buyers to be aware of. To accomplish your successful purchase and closing, I suggest that you try to find property sellers in this order of preference:

1. Relocation Companies
2. "Estate"-owned Properties
3. Private Investors (Flips)
4. Reasonable Sellers (with equity)
5. HUD-owned Properties (FHA Foreclosures)
6. Bank-owned Properties in REO Departments
7. Short Sales (Needs Bank/Lender Approvals)

If you want to obtain a great deal, face the least amount of stress, and close ... consider the sellers of the property you are looking at. Avoid the situations found at the bottom of the list above, unless you have the time and the patience to wait. And remember, by utilizing trained, licensed real estate and mortgage banking professionals, you will avoid homes that present these obstacles and be assisted through the processing of your loan to a smooth and successful closing.

If I can answer any questions you have on any type of transaction, please contact me. I will be more than happy to assist you in whatever manner I can! Best of luck to you in your home search ...

Gene Mundt, Professional Mortgage Banker www.genemundt.com Chicago Bancorp

Historically, there has always been a rise and fall in popularity of particular lending programs. An example of this can be proven with the Adjustable Rate Mortgages (ARMs) that were so popular just a short time ago and are so terribly unpopular now. Merely whispering their existence makes heads spin, something akin to Linda Blair in the Exorcist.

Now it is true that in many many cases, these ARM programs were promoted and utilized in lending situations that were definitely wrong or ill-advised. Some of the current mortgage predicament can be directly linked to their flagrantly inappropriate usage, but the unpopularity that currently surrounds them doesn't alter or disprove the fact that once-upon-a-time they were extremely popular and in great demand. (It also can be argued that if used properly and by the correct borrower, they can provide the perfect lending opportunity and be a helpful financial tool.) But for now, what was once "up" is "down". We experienced the rise and fall of a program.

Until recently, FHA loans were another example of this phenomenon. They had been taking a back seat in many cases to other lending programs, most notably the Conventional Loan which was viewed as more preferable. The pendulum has now swung back to FHA as the preferred source of financing for many home buyers and owners. Because of the current economy, the ability to borrow monies through them at higher loan-to-values (meaning lower down payment requirements) is now seen as one of the biggest advantages the FHA-insured mortgage can offer.

Another advantage seen within FHA programs is the lower costing monthly mortgage insurance available with these loans. Just the fact that you actually have the ability to obtain mortgage insurance is astounding. Furthermore, FHA products allow "gifts" for use in down payment, which is only an amazing 3.5%. Conventional borrowers have to demonstrate and document a minimum of 5% down payment of their own money before any gift monies can be accepted and utilized within the loan.

Perhaps the greatest advantage of an FHA loan today is the pricing of the loan. The rate and fees of a FHA loan are NOT CREDIT SCORE DRIVEN. That means that all FHA approved buyers (from 620 FICO scores to 800 FICO scores) can presently receive the same interest rate. With Conventional Loans this is not true. Conventional Loans are "tiered" every 20 points. An example of this would be, a borrower with a credit score of greater than 740 would get a lower interest rate or fees than the borrower with 720. The same "tiering" would occur on down the FICO scores at 700, 640, 660, 640, and etc.

Lastly, FHA loans are arm-wrestling conventional loans down to the ground in regards to their view on past credit issues. FHA is definitely more forgiving on these issues, the lack of credit, and also the lack of "reserves" (money retained by a borrower after a down payment is made at closing). Simply put, in today's financing environment more loans are going FHA because they demand the lowest down payment, offer lower monthly payments, and increase chances for approval.

The pendulum is presently moving towards FHA loans. As borrowers needs change and the economic climate improves, will the direction change again? What lending programs will best address those future needs? Will it be some conventional form of lending that already exists or some newly introduced program? Watch ... and be alert to the swing of the pendulum.

Ever since joining ActiveRain, I've been amazed at the amount of great information and exciting content there is to read, enjoy, and learn from within it. It truly has become an online university which I attend daily.

The number of many and varied professionals that take the time to write and share their ideas and innovations is endless. At any given time I can cherry-pick my "classes" for the day from a plethora of topics. I can pick-up tips on networking, relating to my customers better, new lending programs, referral techniques, technological wizardry, and much much more. I had obviously hoped that I would benefit from my time and membership on ActiveRain, but nothing prepared me for the avalanche of ideas, products, and suggestions that awaited me.

Beyond what is found directly on the AR site, I have found many nuggets of wisdom are to be gained just by researching the many additional sites and links provided by its members. I now know of other networking programs and their membership professionals from which I can gain even more. The dialogue and exchange of ideas with the contacts made possible through these wonderful inventions, (the computer and internet), have virtually opened up the world to me. The scope of the input and feedback that can be bounced back and forth between the members and attendees here is limitless and knows no boundaries. It's absolutely true ... online we all attend one big university!

The questions raised and conversations started as a result of my membership have taught me much. I have not only broadened my scope of information, but deepened my understanding of others' experiences. Seeing things from the the eyes of another branch of the real estate industry has given me a whole new perspective on the entire sales process and how it all flows together. It definitely restores empathy for your fellow industry-related professionals.

The number of students and professors involved in this AR university continues to widen and grow and the additional possibilities for further education and growth that exist within it are staggering ... if everyone contributes and has continuing conversations with one another. I know that I plan on continuing my education through the benefits to be found and the ideas to be exchanged here for a long long time.

I hope everyone that takes part within ActiveRain continues to graciously share their ideas, suggestions, questions, and expertise with me either through their blog writing or direct contact. Even after 30 years within the real estate and mortgage industry, I know that I want and need to continue my education and better myself.

I look forward to hearing more from each of you at ActiveRain University!

Gene Mundt, Professional Mortgage Banker www.genemundt.com Chicago Bancorp

It's a sad fact, the beleaguered economy is taking a toll on many relationships. The stresses of diminished income, lost employment, rising prices, and decreased housing values have broken many american couples apart.

Divorce is a very difficult time for parting couples in many ways. Emotionally and monetarily it leaves no stone unturned. It's probably the worst time to expect someone to make important financial decisions, but many times it is exactly during this time of upheaval that settlement of homeownership must be made.

Divorcing couples must always remember one thing. Marriage and its' dissolution remains a business deal. It sounds cold to categorize it as such, but steps must be taken to insure that a fair and equitable ending is reached financially. That way both parties involved can move into their future satisfied and prepared monetarily.

As hard as it may seem, regaining control of your life is possible. By taking small careful steps and seeking advisors that will guide and assist you in making wise choices, you can lay the groundwork for a healthy financial future. Creating a "team" of advisors, one that includes a trustworthy and knowledgeable banking professional, should be the first crucial step taken towards finding the peace of mind you so richly deserve and so greatly need. This is especially true if their is a marital home involved.

Here are some questions and guidelines to consider if you are involved in the dissolution of your marriage:

• Settle the agreement regarding the marital home, i.e. ... Do we sell the property or will one party remain in the home?
• If retaining the marital property, a quit-claim deed must be prepared by legal counsel transferring the title and rights to the property to the remaining spouse.
• If there is outstanding debt on the marital property, the remaining or residing-party must refinance to his/her name only, allowing the exiting spouse to be relinquished of the mortgage debt.
• Any joint debt or assets to be split must be evidenced in the Divorce Decree and the creditors advised in writing of the removal of one of the parties to affect the Credit Report property.
• Consult your attorney and professional mortgage banker/advisor before taking any actions, such as listing the property or buying another property.

If you have any questions regarding the status of your loan and its payments during the divorce proceedings, do not hesitate to contact or question your lender regarding your concerns. Divorce can affect your credit, so make sure you cancel all joint accounts held with your spouse. After the divorce is final, it's also very wise to re-check your credit report. That way you make sure all issues are in order. Please remember, most mortgage counselors/lenders are happy to perform this credit check free or at a reduced cost.

When a marriage ends, it is a disquieting time emotionally. Protect your finances by getting the professional guidance and assistance you need. You will be glad that you did for the rest of your life.

Gene Mundt, Professional Mortgage Banker www.genemundt.com Chicago Bancorp

More and more each day I am becoming increasingly sold on the idea of home staging. The benefits for sellers and those of us within the real estate industry can be amazing. If the home sells everyone prospers, and right now we're all searching for ways to increase the likelihood of that happening.

Not too long ago, someone sent me an article that seemed to really offer some valuable and timely advice for sellers looking to motivate buyers while viewing their homes through the use of music. Everyone has heard of subliminal messaging and mood settings. Music can be used to create and enhance both, playing on the emotions and senses while stirring the listener. Who among us hasn't been moved by a movie soundtrack or intensely motivated by the music they are listening to?

The argument that this article made was so powerful to me that I created a flyer for my realtors to consider and utilize with their home listings. I also emailed it to those within my own customer database that I knew were thinking of or in the process of selling their home. The tips and information offered within the flyer just might prove to be the catalyst that assisted them towards a more rapid home sale.

Unfortunately, the article did not contain the author or place of origin. I offer my sincerest apology to the creator of this strongly written piece and thank you for your efforts in writing it. I have stayed true to your original as closely as possible within the following flyer.

I do hope that this flyer provides the assistance that you, or your sellers, need to obtain a sale. Feel free to print it for your personal use or the benefit of customers. The faster and more efficiently we all help create sales for homeowners looking to move on, the more financially healthy we and the whole real estate industry will become.

Gene Mundt, Professional Mortgage Banker www.genemundt.com Chicago Bancorp