Jeff Engum

What is so evil about a 100% Loan?

What we have learned in the whole sub prime debacle is the 100% loans are bad, evil and scary. The borrower needs blood in the transaction or they will just walk away. I have been doing FHA and VA for a very long time while others were doing 100% sub prime loans because they are easy. I was doing FHA and VA loans because I thought it was the right thing to do. This is an amazing fact that I just found out. That VA loan has the lowest default rate of any other loan! VA loans are 100% loan with no HVCC for appraisals. How can that be? With all the wonderful changes implemented to protect the banks from defaults and foreclosures, the evil 100% loan has the lowest default rate of any loan. Maybe the Fed and congress should look at the VA loan for what works.

What is shadow inventory?

Shadow inventory is the inventory of homes that will be soon on the market.

Sub prime and adjustable mortgages homes will soon be on the market with loan modification not working. We will see a ton of new inventory coming soon. With all borrowers in the US, 12% of all homeowners are late on there mortgage. That is a scary number! The market is very confusing today. The economist say we are out of the recession. The foreclosures are going up. Home sales are up but when you hit bottom you can only go up. What is really going on in the housing industry?

A CALL FOR ACTION ON R-1366

R-1366 is open for comment. Below is the definition of the Amendment from the Federal Reserve Board.

Proposed amendments that would revise Closed-end mortgage disclosures to highlight potentially risky features such as adjustable rates, prepayment penalties, and negative amortization and prevent mortgage loan originators from "steering" consumers to more expensive loans.

The amendment to Regulation Z has a lot great changes except for one small change that is the small print. The elimination of Yield Spread Premium. YSP is the premium paid to banks and broker for doing a loan. This will remove the ability to do a no closing cost loan and creative lending. This will handicap the lenders and eliminate competition. Increased fees to borrowers and again slow the housing market down. Below is a link to the Federal Reserve Board-Proposals for comments. Please voice your opinion!

Submit Comments Under:
Regulation Z - Truth in Lending - Closed-end Mortgages [R-1366]

http://www.federalreserve.gov/generalinfo/foia/proposedregs.cfm

Should Realtors increase there commission?

I believe that Realtors should move up their commission rates. Below are reasons why it should be moved up.

1) The increased amount of short sales, foreclosure and HUD homes.

2) Dealing with banks, asset management companies, Fannie Mae and Freddie Mac.

3) Lending becoming more and more difficult.

4) HVCC-need I say more.

All these variables have made it very difficult for Realtors to earn a good income. I am not a Realtor but I have seen many friends and colleges leave the industry. They are working hard for the commissions. They deserve a pay increase!

<A href="http://www.mortgageeauclaire.com">eau claire mortgages</A>

Big changes to FHA-January 1, 2010

1) The funding source of any FHA loan must have one million dollars in funds verified by FHA.

2) Brokers will no longer need to be individually certified by FHA to do FHA loans.

3) The streamline refinance as we know it today will no longer by available to borrowers.

Item number two concerns me. Opening the door to all brokers to do FHA does not sound like a good idea. I have been doing FHA and VA loans for a very long time. FHA and conventional mortgages are a world of difference and opening FHA to everyone scares me.

<A href="http://www.mortgageeauclaire.com">FHA</A>