JD Terry - IHaveMoney2Lend

I recently attended my local Home Builders Assoc. Installation Banquet for the new officers. This was a very nice dinner with many different speakers. The one that caught my attention and the attention of everyone in the room was an older gentlemen who has been a builder for over 40 years.

His speech was geared around how to survive a down market and to come out on the end better than you went into it. He talked about how he started building homes in the early 60's after he got out of the Army. He went through the many ups and downs he had in his personal and business life. He matched up those hard times to what was going at that point in the national and global economy as well.

One of the key points that I took away from his emotional and moving speech was that every hard time seems like the hardest of time, that is until the next hard time comes around. Think about that for a minute.... Meaning that no matter how hard you have it right now there will be more hard times ahead, sooner or later. It is not the event that determines the outcome, it is your attitude and positive outlook during the event that determines YOUR outcome.

However, this was this quote that still resounds within me everyday, and I wanted to share it with you as the wrap up of this blog,

"IF ALL OF YOUR PROBLEMS CAN BE SOVLED BY MONEY, THEN YOU ARE DOING BETTER THAN YOU KNOW"

We may not be making as much money as we did last year, or even as much as we did at the beginning of the year but I am sure we all can find something in this down market that we are thankful for.

Finally, at last, it is done! I have completed my personal web page. To most folks reading this they will think that I may be a bit slow on the times, or that a webpage is not that great of a feat. That may be true, but web design and creative layout is not my strong suite.

If I can ask a favor of anyone that reads this blog, please check out www.JDTerry.com. I would welcome your feedback, thoughts and all around comments. I am hoping you enjoy it and feel that buyers, sellers and clients looking to refinance will find value in it as well. It is a site that is very functional, not too flashy, and I think provides a lot of great information.

As with any website it is a piece of art in the making. Again, I would welcome any thoughts, suggestions, ect.

Thank you!

Today the US govt. announced more sweeping changes in the mortgage industry. Together with Fannie Mae, Freddie Mac, and the Federal Housing Finance Agency (which oversees Fannie and Freddie now) have put in place provisions to help troubled homeowners. This new policy is the most aggressive yet.

The plan is to help current homeowners who cannot afford to make their monthly mortgage payments and curb the steep rise in foreclosures nationwide. The ways that were announced are as follows:

• Modify the borrowers loan into a fixed product from an ARM
• Extend re-payment terms out to and up to 40 years at most
• Reduce the interest rate on their mortgage as low as 3%
• Possibly allow a lump sum principal reduction of the balance of the loan in areas where housing values have plummeted
  • Portions of this reduction could be required to be repaid by the borrower at time of sale if there is enough money from the sale, but in the meantime the new payment would be based off of the lower principal

The main goal is to get the borrowers DTI (Debt to Income) to 38% by one, or a combination of the above provisions. The Federal Housing Finance Agency (FHFA) feels that a 38% DTI is optimal for most borrowers to be able to live and make regular payments on their mortgage.

You might be saying, this sounds like a good idea and how can I take advantage of a possible 3% interest rate. As with any assistance there are requirements, as there should be.

• The borrower must currently be behind on 3 months worth of payments
• The home must be their primary residence
• The borrower must owe more that 90% of the homes current value

This new policy will take effect December 15^th of this year. It is unclear how long the provisions will last. What is known is that it should be able to help over 1 million homeowners in the next year avoid foreclosure based off of current and projected stats.

I cannot express how important this announcement is. Not only will it help save homeowners who cannot pay their mortgage, it will also help keep our home values up across the US. This has been something that needed to be done according to the govt., I have my own personal opinions but we will keep those for a later entry.....

Since this announcement just came out today at 2 pm EST, there are still a lot of blanks to be filled in. Stay tuned....

On Halloween I got a treat instead of a trick at work. Yes, I am going all the way back to Oct. 31^st. I wish I had a chance to write since then, but this last week has been very busy. I have received 3 purchase contacts for Nov!!!! Not too bad for this market and it only being the start of the second week of the month.

Sorry, I digressed there for a moment. Let me get on topic here. As I mentioned, the 31^st was a great day for me, one of my clients and one of my Realtor referral partners. We all got a treat instead of a trick. On this day we would go to the closing table to finalize a 7 month home shopping extravaganza. That is right, I said 7 MONTHS! My client was referred to me way back in March of this year. He is a first time buyer and a very cautious one at that. Needless to say we are all like family now, and that is how I prefer to do business. Too often I think lenders and realtors can get too deep into the machine of our industry and loose sight of the human factor.

After many, many GFE's and many, many loan structure options over the 7 months my client and I agreed that an FHA loan would be best. This loan would minimize is out of pocket expense for the down payment and would allow him to get a great interest rate with reduced mortgage insurance. I must admit there was a very scary few days about half way though the loan process. My client was very payment sensitive and every dollar counted. When we got the office insurance and tax figures they were about $27 higher than what I estimated initially. This $27 threw my client into a frantic mess, not good! I asked him to come in and go over the hard figures and see where we may be able to save him some money. One of the things that I recommended was to group his home and auto insurance together. I think this saved him $15 when he did. We still had $12 to overcome. By this time my Realtor partner and I were getting nervous. We had worked with him for 7 months and $12 could make our break us. When we drilled down even further into his personal financial situation I found out that he was spending about $48 a week in gas commuting to and from work. His new house was only about 3 miles from his work vs. the 28 mile commute he was used to. I showed him how the savings in mileage and gas money on a weekly and monthly basis would be way more than the $12 he was worded about he found his happy place so to speak. We got the green light to finish the purchase transaction and closing.

After 7 months of hard work I was not going to let my client walk away from this great house, which by the way appraised for $15,000 over the sales price, even if it meant talking about gas and mileage. After all, I feel it is my job to look at all costs and financial obligations that my clients have. Their mortgage product, structure, and payment has to integrate with their overall monthly debt. Needless to say this closing was a very exciting one for all parties involved. Trick or Treat.....I will take a Treat thank you!

Today we received news that the conforming loan limit will remain at $417,000 throughout 2008. Now, there are some areas whose conforming loan amounts will be larger than the national $417,000 benchmark. In most areas the conforming loan limit is determined by 125% of the median sales price. For those areas where $417,000 in not reached by this calculation the expressed limit is imposed.

To backtrack real quick, any loan amount over $417,000 is classified as a Jumbo loan. For the last year Jumbo loan money has gotten pretty expensive, to the tune of around 8% vs. around 6% (avg.) for loans at the $417,000 limit and under. It is vital that clients understand this limit and the increased rate for exceeding $417,000.

Despite all of the other wild news in the banking and mortgage industry, this did not come as a surprise. Actually this is a some welcome stable news in a year that has been anything but volitale.