Jay Oku

USDA UPDATE for HAWAII 2010

Fiscal Year 2009 USDA Shattered all Records
133,045 Loans Guaranteed and $16.2 Billion Obligated Nationally

The US Depratment of Agriculture has an outstanding loan program available and if you are not aware of it then you are missing a golden opportunity to help families (that would be declined by FHA or Conventional progams) into a home in this Buyers Market.

· November 8th $55 million in Funds were replenished and are available

USDA Loan Facts

USDA Rural Home Loans have some outstanding benefits over ANY other type of mortgage loan you will find for Hawaii. USDA Loan Benefits include:

· True Zero Down Financing - USDA Rural Home Loans let you keep your cash in your bank account

· The program is available for FHA/VA approved Condos in Kapolei/ Ewa Beach etc. These were considered rural areas in the 2000 census and will most likely be removed after 2010 census results in 2011.

· Zero To Move In - If properly set up, you wont need to bring any cash to closing. The average is just about $158 or so to close with a USDA Rural Home Loan in Hawaii

· Down Payment Assistance - Seller assisted Down Payment Assistance has been eliminated for FHA but is still available for USDA Home Loans.

· No Monthly MI - On a $200,000 home you could save up to $11,000 in mortgage insurance payments over the next 10 years as compared to FHA

· A Good Portion of Honolulu County qualifies for USDA Rural Home Loans - Ewa Beach, Makakilo, Kunia Kapolei, Waianae, North Shore and Waimanalo http://eligibility.sc.egov.usda.gov/eligibility/welcomeaction.do

· Generous Qualifying Ratios - Due to low rates, No MI and superior performance of the USDA Rural Home Loan it is much easier to qualify than for Conventional or FHA Mortgage Loans

· Not just for First Time Home Buyers

· No HVCC Appraisal Backlog (like there are for Conventional or even VA loans)

· Income Limits for Honolulu County (115% of Median Income)

1-4 Person $109,400 5-8 Person $144,400

Bye Bush Hello Change...

Well, I give our new President a lot of credit for taking this enormous Trillion dollar economic comittment on. At least the days of blaming Bush for everything will be over. We are the United States of America and are sure acting like a divided country.

One steady aspect of America is our committed and selfless military force. Amen.

As temporary as it may be, this Refinance Boom has been a blessing for many. Today I saved a soldier $300 per month by simply refinancing his Ewa Beach condo with a Streamline VA Refinance. Now when he is transferred after his 3 year stay on the Hawaiian Islands he will be able to rent his property out and break even on his payment. Exit strategy is the best sales angle these days. Another borrower that closed this week was able to pay off debt and lower her total monthly housing payments over $550 per month as well.

On the flip side, due to tightened regulations (tightened in the wrong areas) many are not able to take advantage of todays low interest rate environment. For example, I visit numerous Real esate agents who wish and pray that they could refinance their properties, but their loans have a snowballs chance in hell of getting approved due to their self-employment status and their soft sales income . I am working with a Major who has significant income, adequate assets but low equity. The original Loan Officer sank him into an 80/20 loan and values have moved laterally. Ideally we would like to get him into a VA loan but the guidelines require 10% equity in order for the switch from Conventional to VA to happen. We can't get the Conventional loan because PMI companies have restriced Insurance on properties with < 75% owner occupancy.

Today I had Wells Fargo deny a 20% down purchase loan for my client, a well qualified nuclear engineer, due to the owner occupancy of the building being less than 75% a new Fannie guideline. I can understand that the PMI companies require a 50% owner occupancy but 75% with 20% down!? How is the housing problem going to be fixed if lending on condos is not possible?

Lenders are taking 30 days to process refinances and about 10 days for purchases. I have three banks that have been able to get a loan approved in 48 hours recently but it did take some constant pressure on my account executives.

Look for rates to flirt with 4.5% again, and when they do be sure to call me to have me lock your loan! Do not let greed let you wait too long. Inflation is bound to rear its ugly head again.

Peace be with you...

A Hui Hou

With this monumental rise in mortgage applications both purchase and refinance it is not suprising that the banks are taking an extreme amount of time even to look at a Clean file...

December 17th I locked 4.375% with a slight rebate for a client then within 2 hours the rates were back up to 4.625%. Now the week leading up to 1/9/09 we are ready to slide a little lower due to the enormous instability that these horrendous jobs reports and other economic fiasco (bailout) news.

All systems are a go with the Team! Rachel, former bank underwriter is my processor and she is mentally and organizationally prepared to handle the flow of PDf's and Docs to and from the Banks. Chase, Wells Fargo, Plaza, SNMC and numerous other account executives are primed up and ready to compete for our business to give our clients the best possible rates... These bank professionals earn their healthy pay when times are good. Locks are made frantically and ...

Thats where the bottle neck begins...

Eventually the bombarded appraisers type the finishing touches on the report, days even weeks after they inspected the property.

Slowly the files pile up; paper.... loads and loads of paper wrapped into folders to make them thick and more anonymous; the underwriter who peels one maybe two before lunch then three, four, maybe five off of the endless stack per day. Yesterday they officially require all files to extend to a 45 day lock at the expense of the client.

I call daily only, once maybe twice, at a strategic moment to kindly and very gently (with respect to their time) ask the underwriter which files she/he has looked at and if she/he has a need for anything at all that would help them approve the file. When I worked at a larger Banker I had to be even more careful around the underwriters as they had 9 - 12pm quite time.

Fortunately our relationships are solid and loyalty to those banks even in slow times now pays off.

Although I sound frustrated with the delays in this boom (caused by a panic response to economic catastrophe of undefinealble proportions), I am actually overwhelimingly grateful and am on a mission to help as many families and individuals save as much money as possible with the lowest rates ever and realistic and fair costs.

If I can help anyone you know with their mortgage I will make sure that they thank you sincerely for sending them my way. (808) 393-0707 (949) 874-2145

How was your Christmas/ Hannukah and New Years?!

Happy New Year 2009 from our family to yours!

The Year started off fantastic for my lovely wife Yuka, and baby Ai (now 15 months) and myself.

Rates in the 4% range!!! Perfect Christmas present!!!

Fortunately we were able to give back a lot this year as well; the first five refinances of December 2008 I was able to save my repeat clients over $260 each ($880 mo. on one) on their monthly mortgage payment!

Just tonight 1.5.09 I recieved this New Years note from a customer that is closing tomorrow:

Thank you so much Jay, you are really getting us off to a good new year and I appreciate that. I feel really good about what you have helped us to accomplish, especially because we are dealing with a local bank and that's what we wanted to do for the longest time.

I hope all of your customers know what a great job you can do for them and appreciate you and all your staff that makes it happen. It is very hard to find honest people like you and especially people who deal with your finances. I feel very blessed and honored to have crossed path's with you on a personal level as well as professionally.

Many thanks - Erica

So as the refinance pipeline fills up more and more each day I always take a mintue to reflect on how fortunate we are to be able to help people in the midst of the worst precipitous economic decline since the Great Deppresion. Those of us who held on when things looked real grim are now able to come back up and breath again; to thrive again. I am especially grateful for relationships with friends and business associates like David and Tonya Kucic of Re/max Honolulu who maintain the most optimistic and always positive attitudes. They have consistently validated me as their loan officer to their clients and I appreciate it. If you are in the market to purchase real estate in Hawaii you definitely want to visit their website; you will be WELL looked after.

Last but not least I just want to thank the Active Rain Community for its positive outlook and support throughout this crazy point in history. Just having this community make tough days better.

and Very Lastly but most importantly... Thank you to our troops and their families for making sacrifices so we can carry on our lives in saftety! Bless you all and come home safely!

Happy New Year and keep up the great work.

A Hui Hou!

J Oku

If you have your Loan Officer (LO) lock in an interest rate on your approved loan and find out that rates dropped another .75% from 5.5% to 4.75% would you urge he/she to change banks to get the lower rate?

Are you aware of Rate Lock Renegotiation (RENO) and is your Mortgage Broker/Banker proactively looking to save you money by renogotiating your rate? This applies to VA and Conventional Loans.

As a mortgage broker this recent drop in rates has been both a blessing and a challenge. Fortunately, refinance applications have increased substantially, yet although rates have hit all time lows (4.375% with no points 12.17.08 and now back up to 4.875% at the time of this blog 12.29) many people are anxious to lock but are sitting on the proverbial fence nervously waiting for bonds to move higher and interest rates to drop further.

The major challenge to (ethical) Loan Officers is presented when we lock a rate, per the request of the client, and then interest rates continue to fall. If the bank the loan is approved with has a RENO Policy then RENOgotiate it is (See Below for example). If not, do I maintain the rate or switch banks and lock elsewhere to save the client money?

Many of the nefarious types have been weeded out of this business, however you may be working with a Loan Officer who keeps the same rate and tells you that once you are locked there is nothing he can do (meanwhile he switches banks and harvests a much larger rebate from the bank). On the other hand you could be working directly with a bank that simply does not have a RENO policy in place which requires you to maintain the higher rate. One more scenario that I must succumb to as a broker is an internal bank/broker rating system. We Brokers are rated with each bank on our pull through ratio ( # of locks that actually close), and once your ratio drops below 70% the lender could terminate the business relationship. The practice of locking in an interest for safety then pulling that loan and submitting and locking with another bank on price is now "extremely" frowned upon and is becoming difficult. I am forced to start favoring banks that have RENO policies in place even if there rates are slightly higher.

If rates drop during the rate lock period and the broker requests a lower rate, the loan can be renegotiated for a 0.375% - .625% fee. This fee can be built into the discount/premium quoted. This policy cannot be used to increase the compensation for the broker.
Broker may raise the premium to cover the 0.375% fee, but may not make more than the original premium.

Depending on the amount of market movement, the new premium may be lower than the original premium. If the increase in premium is insufficient to cover the 0.375% fee and provide the broker their original premium, the full 0.375% fee will still be charged and the broker will receive a lower premium.

Here's the rules:

* Market rate is lower compared to rates at the time of rate lock (improved market).
* Loan will maintain original lock period and expiration.
* Only available on loans with locks of 60 days or less.
* The broker rebate will be capped at the original price.

* Limit one renegotiation per loan.
* File must be received
* Expired locks are not eligible for renegotiation (loans that have been extended prior to original expiration
are eligible).
* Loans that have been Worse Case Priced for any reason are not eligible for renegotiation.

(Lock Renegotiation Policy, CitiMortgage Wholesale Lending 2008)

Currently Citi, Wells Fargo, Metlife, BOH, Plaza and a few other large banks are accepting Rate Renegotiations. Other banks sush as Central Pacific Bank, FHB, SNMC have yet to introduce a RENO policy and furthermore are some are threatening to charge the broker approximately $2000 if the client who the broker helped get a loan within 6 months refinances for any reason!!!?

Homeowners and home buyers are expecting me to help them lock the best rate possible to save them as many pennies as they can in this constricting economy and I will do everything in my power to help them do just that. If I can help... call me anytime 808-393-0707.