Jeff Belonger -- The FHA Expert.com -- FHA Loans -- FHA mortgages - USDA loans

A lot of chatter about the First Time Homebuyers Tax Credit

Let's start with the basics about the First Time Homebuyer's Tax Credit....

• Yes, it has helped some that might not have bought.
  

• It has given people money after buying to help fix up their homes, pay off debt, or save for emergencies.

• And ___________. ... wait, I really can't think of anything else.

Has the Tax Credit been a mechanism that has artificially stimulated the economy? Some will say yes and some will say no. I will be one of those yes people.

People, we are printing money at record paces that our checkbooks will never be able to pay off. The ATM has crashed…..

From day one, I have been against the tax credit for the most part. I have had my reasons, several of which are starting to show now than later. Yes, it has helped home buyers and it has helped the economy some. But is the damage greater than the good that it was suppose to have done? Yes and there are now news reports giving startling facts. Here is an excellent article from USA Today.. - Home buyer tax credit fraud called 'disturbing' Here are 3 disturbing facts mentioned in the article....

**Costing the government $10 billion. I don't think the government are the ones that write the checks from their own bank accounts. Shouldn't it say, this will cost the American Public $10 billion?***

***Gee, an additional $17 billion. I thought the first time homebuyers tax credit was suppose to stimulate the economy, not weaken it. People, who pays for this? We the tax payer.***

***Apparently our kids haven't learned much in school about fraud. Could these be are next wave of harden criminals? And a 4 year old? I would have to assume that a parent filed that on behalf of their child.***

_______________ _______________

Here is another article by Jackie Calmes with similar answers, but that she also shares some more cold facts that seem scary to me. Home tax credit audit shows abuses -

***Claimed the tax credit, yet didn't buy a house yet. I wrote about this in May of 2009. Fraud Alert on the First Time Homebuyer Tax Credit - Do you chance it? - There have been some realtors that basically told me that nobody would commit fraud on this. I even had one realtor tell me that they had a woman that worked for the IRS that got her money before she bought her house. I truly respect this realtor also. But he was very protecting of his buyer, stating that she would never commit fraud because she worked for the IRS. People, I don't care who you work for, greed will get the best of you at times.***

***Now the government is saying that we still have a weakness in the housing market. Yet they will go on and get the media to state that the recession is over? Jim Crawford brought this to our attention in his blog post, I'm so happy the recession is over! Aren't you? - I am tired of misinformation and politics. Will we ever get the truth? People, I think we don't need to hear it, because the writing is on the wall. Have we forgotten how to read? Or do we need people to tell us what we want to hear? hhhhmmmm***

***Imagine that, a politician needing to be re-elected again and possible trying to push something that might actually hurt our economy instead of helping it. now, this is based on my opinion, but I didn't see this tax credit getting us out of the mess or even truly helping the housing market for the most part.***

Conclusion : What crawls under my skin is not only do the lawmakers on Capital Hill want to extend the Tax Credit, but that they want to increase it to $15,000. Why? What is really wrong with $8,000??? And why can't we go back to the re-payment schedule that was applied in the very first tax credit, when the $7,500 first time homebuyers tax credit was introduced. Seriously, what is so wrong with this? Free is not free. One way or another, we will be paying for this anyhow. Some of you scream about people having skin in the game, when buying a home. Yet some of those same people don't seem to be screaming about having skin in paying back the tax credit.

What about those politicians that just want to sign bills and pass them, just for the sake of getting votes for when re-election time comes around. Yet these same people don't take the time to do proper studies to see if this is actually working as planned. Is this all smoke and mirrors for the most part? Do many of you actually pay attention to this? Or do we just go along with the crowd, because it seems better than what we currently have? We need to think about this and not just roll over in our graves, which could be sooner than later. What say thee?

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_________________________________________________________________________________________

For more information on FHA loans, please go to this link. The FHA Expert

For more information about the 2009 Tax Credit for First Time Homebuyers : 2009 Tax Credit

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags!

Copyright © 2009 by Jeff Belonger of Infinity Home Mortgage Company, Inc

What is in a name? - Honesty? Integrity? Knowledge? Trustworthy? Creativity? Being reliable?

What is in a name designation? - In most cases, the same that would be attached with any name?

Some of you might be asking yourself, "what am I talking about." How about those names that come with such designations as :

Certified planner - Certified Technician

Mortgage Specialist - Real Estate Specialist

In the mortgage and real estate world, many realtors and loan officers have special designations attached to their names. You will usually find these designations on their business cards or on their web site.

Realtor -

CRS - Certified Residential Specialist

ABR - Accredited Buyers Representative

CNS - Certified Neighborhood Specialist

SRS - Seller Representative Specialist

Loan Officers -

CMPS - Certified Mortgage Planner Specialist

UMB - Upfront Mortgage Broker

CLA - Certified Liability Advisor

My Example : Just last week, I wrote this post about basic information on FHA loans and what you should be careful of. FHA loans 101- The basics of FHA mortgages & mortgage shopping - I truly pride myself on numbers, giving out very accurate figures, and not just my opinions based on assumptions. But to prove them with real numbers, not numbers that can be manipulated to make me look right.

I had a loan officer disagree with my opinion and my figures. Hey, I have no problem with people disagreeing. I might actually learn something. Yet he told me that I wasn't correctly comparing apples to apples and that the upfront mortgage insurance was still a cost to the borrower. That part is true, but he didn't read my whole post and review my comparison examples, which detailed this. And if you know how to compare FHA loans vs conventional loans, you understand the whole mortgage insurance issues. You don't have a specific designation for this.

I mentioned several types of designations, which many of them give that realtor or loan officer more knowledge and education. But there is one type of designation that sells costs and that is an upfront mortgage broker. If you read many sites by upfront mortgage brokers, they sell their costs, telling you that they will negotiate your costs, making them usually sound very affordable. This is great for the average consumer. But what is not mentioned is the service or advice that one might receive or in this case, the lack of. Meaning, my comparisons were sound and flawless. But if you deal with someone that sells costs, but might give you the wrong advice, do you think a cheap loan will still be cheap if they gave you the wrong advice?

Conclusion :

My whole point to this post? To make the average consumer understand that not everyone is as knowledgeable or ethical as they may sound just because they have one of these designations. Yes, many of these designations mentioned require for that person to take classes and a test in order to receive that designation.

How many of you remember going to school and passing a test to a class that you didn't fully pay attention to? How many of you were good at winging things? How many have a photogenic mind, are able to remember what they read or hear, yet might not comprehend what was said?

So, who are you really? Just because you say that you a CMPS, certified mortgage planner, does it mean that you have my best interest at hand? Do you know exactly what you are doing?

In regards to the loan officer in my example. This person advertises lowest cost loans. I have an old saying..."the cheapest loan on paper might cost you more in the long run." If this person doesn't know how to compare specific loans, how can this be the cheapest for you? The best? What happens if that person's choices aren't accurate? Wrong? Misleading? Many loan officers sell costs, but can't give you accurate or reliable comparisons when it comes to specific programs. Just keep this in mind when shopping for a mortgage.

PS... don't get me wrong. In many cases, designations are good. One of the mortgage designations, CMPS, and many real estate designations are great educational tools. But if someone preaches it or slams it don't your throat, that might be their only selling feature to you. A desgination should not be verification for that person to be credible. Just be careful...

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Experience & Knowledge at its BEST !!!

_________________________________________________________________________________________

For more information on FHA loans, please go to this link. The FHA Expert

For more information about the 2009 Tax Credit for First Time Homebuyers : 2009 Tax Credit

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags!

Copyright © 2009 by Jeff Belonger of Infinity Home Mortgage Company, Inc

FHA loans & their misconceptions/myths

The number one myth - FHA loans are more expensive than conventional loans!! - FALSE -

Protection of your family & home purchase will always be with a loan officer with knowledge & integrity… not telling you what you want to hear to make a sale!!

PS… this might be a tad long & boring, but worth it if you are buying/refinancing a home.

I received this e-mail from a borrower yesterday buying in WA. Here are some parts of his e-mail.

Borrower #1

"My real estate agent simply told me there would be more closing cost if I chose FHA, which I don't think true."

A major gripe of mine. When comparing a FHA loan to a conventional loan, you need to compare apples to apples. The only difference would be the upfront mortgage insurance premium (UFMIP). Some loan officers and realtors would like to call this a closing cost. It really isn't. First off, you can roll it into your loan. Hence another myth that some FHA closing costs can be rolled into the mortgage. Still false, because this is not a lender fee. It's a fee from HUD. Yet some will debate this as a closing cost. It's like the VA funding fee or the USDA's guarantee fee.

Same person goes on to say...

"XXXXXXX mortgage is the preferred lender to the property and now offering 4.25% for 30 years. Since my house won't be ready til next spring, XXXXXXXX mortgage can't lock the rate that far. I was told they were not sure how much the rate would be then. This part is very scary to me as a first time home buyer without any previous experiences....!!!"

Rut row.... first off, you can't get a 30 yr fixed rate that low. And even if you could, it would cost you like 8 points. So, this loan officer plays the trump card per say. Knowing that settlement won't be until next spring. This lender is giving an awesome rate that can't be locked in... hhhhmmm

Borrower # 2 -

I have a borrower that was referred to me by a realtor. She gives out 3 names to her clients. (there is a reason for this that I don't totally agree with) I shouldn't have a problem with this, but I do. In most cases, most loan officers can be very competitive, especially when they know you are shopping. This realtor prides herself on giving good referral sources that close on time and give good rates with fees. Okay for now, but I have a point to this.

This borrower wants a 30 yr fixed and a 5/1 arm. I give him several good faith estimates and find out that mine are in the top two. I then get an e-mail from the borrower who wants me to be lean on mine, because he was able to get the other lender to cut a few fees. Huh? First off, I had a $100 fee and this other person had close to $1,000 in fees. Secondly, I will never be the cheapest, but I will be better than average. In many cases, I will give more knowledgeable information than the other loan officers involved. Okay, sounds like I am full of myself. But after years of asking the borrowers questions and getting feedback, so many things aren't mentioned.

Example - I ask this person their goals, how long they think they will be in the house, baring any work related changes. He tells me that I bring up some excellent points to think about. Because I bring up current rates, the future of rates in 3 to 5 years, home values, the cost of refinancing, etc,etc. Gee, from his answer, it doesn't sound like the other loan officers bring this up.

FHA myth - the monthly mortgage insurance will never fall off. It does just like on conventional loans.

FHA fact - No matter how much you put down, you will have the mortgage insurance for 5 years no matter what. He said, well, I hope to have more equity in 3 years. Good for you, but if you refinance into another FHA mortgage, you will then have the MI for 5 more years. Okay, so I will go conventional. Good for you, again. But there are many new rules regarding private mortgage insurance. In many cases, the PMI companies want to now see a 2 year history of payments. If late, this could influence their decisions. Again, just so many unknowns to risk.

Onto round 2.... In the beginning, I just give him a 5/1 arm and not details of how an adjustable works, because I want to see if my competition does. After about 4 days of him shopping, I have him call me Sunday night around 7 pm. I ask him if he was told how adjustables work and if he was told the margin on this adjustable. What is a margin Jeff.. hhhmmm.. Just a fact that could have an impact on his decision and his future.

Onto round 3.... The good faith estimate. I always tell the client how long that rate is good for when giving a GFE, showing their rate and fees. Many loan officers don't point out that it's good for 30 - 90 days. And if they do barely mention this or they don't bring it up again a few days later, when they give you an updated good faith estimate. I know this because I question and quiz these borrowers. Overall, until you are ready to proceed with the mortgage application and lock-in, some of these good faith estimates don't mean squat.

Overall, there are more loan officers than one would think that don't properly educate the borrower. As a borrower, you don't need a Harvard education, hence why you want to speak to a good loan officer an excellent loan officer. I found many holes in my questioning of this borrower, telling me that he wasn't properly educated with buying a home and shopping for a mortgage. My 30 yr fixed rate with fees were better than the other two. Yet one offered a very good price for the 5/1 arm. I later refused to give him an updated quote, because after speaking to him and getting to know his goals, it wasn't in his best interest. He was suckered into the lower payment. Don't get me wrong, adjustables have their place, especially with today's rates. But again, the best rate on paper is not always the best in the long run, no matter if it can be offered or not. Knowledge is power!!!

Just don’t be that shopper that shops themselves out of that good mortgage.

For some more good reading :

The Basics of FHA Loans - Mortgage 101 for FHA Mortgages - 08/24/09

Credit scores - FICO scores for mortgages - I need a 700 credit score?

Is pre-qualifying a borrower like rocket science??? - Important questions that should be asked by all loan officers.

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- FHA Loans - USDA Loans - VA Loans -

- Energy Efficient Mortgages -

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- Mortgages -

Experience & Knowledge at its BEST !!!

_________________________________________________________________________________________

For more information on FHA loans, please go to this link. The FHA Expert

For more information about the 2009 Tax Credit for First Time Homebuyers : 2009 Tax Credit

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags!

Copyright © 2009 by Jeff Belonger of Infinity Home Mortgage Company, Inc

Give it to me all..... the more that you have down, the more things will work out, that you won't leave your home. And as an investor, I will feel much better. Give it to me, every dime.

Here is my point. There have been a few articles written in the last week or so and several of the comments are screaming for more skin in the game. These comments aren't just coming from realtors and loan officers, thinking that this will help correct the foreclosure market and the housing market, but this is also coming from the government.

There was an article written last week titled : Proposal would boost FHA Down-payment requirement. Some Congressman wanted to raise the FHA downpayment to 5%, adding 1.5%. Hence what propelled me to write : FHA loans to 5% down?

Now, do we really think that an extra 1.5% down will correct and or help the foreclosures? In my opinion, I don't think so. Lenn Harley gave a good comment in my FHA 5% down article. Here is a snap shot of what she stated...

"ZERO down payment loans are no riskier than 20% down loans IF THE MORTGAGE COMPANY HAS FULLY DOCUMENTED THE BORROWERS INFORMATION AND DETERMINED THEIR ABILITY TO REPAY. - Ability to repay. What a concept."

Bingo... and here is what angers me with those on Capital Hill that apparently have no clue and or just don't do their research. Did anyone read this article by Kenneth R. Harney. Who's most likely to walk away from their mortgage? -

Wow, someone actually did some research that might blow your socks off per se. Yes, common sense says that more skin in the game would be best, more practical. I don't mind opinions, but assumptions without doing your research and or putting 1 and 1 together does get my blood boiling. Besides, here is a hint to who might walk away: "It's probably not who you think."

Let's take it a step further. Howard Sumner wrote : deliquency and foreclosure study. In this article they talk about the different types of real estate markets and where they see foreclosures most.

Real Estate SOLUTIONS ???

So how can we help correct this real estate market and keep foreclosures from happening? There will be many that will say more money down, because that is how it was done 20-30 years ago. 2 things on that blind statement. First off, this is 2009, not 1970 or even 1990. The cost of living is more expensive now. Secondly, FHA still allowed for less money down than your conventional loans in the 70's and 80's. So how come there weren't tons of foreclosures then? Is it the down payment? I don't think so, just an excuse.

Solutions?

-- Maybe lower debt to income ratios a little?

-- Possibly qualify borrowers just as we do for VA loans? In the calculations, we have to find out family size and to use utility/electric costs also.

-- Esko Kiuru wrote this article : Mortgage Lenders now more inclined to lower principal. Please read this, because this can be a good solution.

-- Claudette Millette shares this article with us : New Housing bill will force loan modifications. At least the lenders will have to explain specific options. Claudette states - "All lenders will be required to perform what the bill terms as a "net present value" test for all seriously delinquent borrowers." - Bravo... it's a start.

-- I wrote this article 3 months ago, Call To Action - We must fix this real estate market ourselves. I made a pledge and I am still working on this. We need to put our heads together and make the gov't realize more issues and not the common sense approaches.

Food for thought to a main solution….

Did we ever come to realization that a lot of these messes are because of unemployment? The loss of jobs and income? Our government spending habits? And that we need to focus on small businesses, which are a large part of America's work force.... Besides, if we ask for 1.5% more upfront, doesn't that deplete the savings of a borrower that could use that extra money for fixing up the house? For moving? For emergencies?

My main reason for writing this blog? Please read this, which was mentioned above : Who's most likely to walk away from their mortgage?

Lenn Harley wrote this : Raising the downpayment for FHA insurred loans to 5% is ok?

Lenn adds some good insight to this with some good discussion. People, we need to stand up and fight this, letting the gov't know not only how we feel, but what they could possibly do to the real estate market.

All pictures from www.istockphoto.com

FOLLOW ME ON FACEBOOK

- FHA Loans - USDA Loans - VA Loans -

- Energy Efficient Mortgages -

- Conventional Loans - 203 k loans -

- Mortgages -

Experience & Knowledge at its BEST !!!

_________________________________________________________________________________________

For more information on FHA loans, please go to this link. The FHA Expert

For more information about the 2009 Tax Credit for First Time Homebuyers : 2009 Tax Credit

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags!

Copyright © 2009 by Jeff Belonger of Infinity Home Mortgage Company, Inc

AMERICA's Pastime begins…

2009

Baseball Playoffs are here, starting tomorrow, October 7th. Who do you think will win? Who has been hot? Whose been slumping? Who will win the World Series?

As much as I despise the New York Yankees, they have played the best baseball in the 2nd half and in the last month. But just because Steinbrenner buys a team, doesn't mean that they will always succeed. They have the most pressure, with the New yankees stadium being played in this year, and the highest payroll.... they have the pressure of winning it all. The Philadelphia Phillies have some pressure also. Not only to repeat, but to be the first National League team to repeat, winning the World Series back to back since the Cincinnati Reds did in 1975 and 1976.

Here are my picks for the first round winners....

AT AND AT

Who will be in the World Series? I would love to see the Red Sox play the Phillies, but this is what I think..

AT

WINNER?

Philadelphia

Phillies

Now.. yes, part of my heart is hoping for the Phillies. But from a sports perspective, if the Phillies pitching gets back on track, what it did for a whole prior to the last 2 weeks of baseball, they can win it all. And I am hoping for that and some good hitting. There are so many things to at. What could hurt the Phillies the most is their closing issues. Phillies were second to the Yankees in the long ball, home runs. The Phillies have great defense and what usually helps in the play offs is defense and pitching. Time will only tell. Who do you think wins it all and why?

GO PHILADELPHIA PHILLIES 2009

FOLLOW ME ON FACEBOOK

- FHA Loans - USDA Loans - VA Loans -

- Energy Efficient Mortgages -

- Conventional Loans - 203 k loans -

- Mortgages -

Experience & Knowledge at its BEST !!!

_________________________________________________________________________________________

For more information on FHA loans, please go to this link. The FHA Expert

For more information about the 2009 Tax Credit for First Time Homebuyers : 2009 Tax Credit

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags!

Copyright © 2009 by Jeff Belonger of Infinity Home Mortgage Company, Inc