Michael Mergell

by Michael Mergell, Managing Broker RE/MAX Ability Plus-Fishers

I have been given some VERY good news that just can't wait till monday

Here are some some-what detailed and tentative guidelines for Fannie Mae's return to a 10 financed property limit. I was tipped off early this week that Fannie was going to make this move, but I had seen nothing yet from within Countrywide. I did find that Fannie Mae is indeed working on rolling this out. This is tentative, but I like to try to be on the leading edge of things as much as I can be...

1. The projected date for the first loans eligible for purchase by Fannie Mae looks to be March 1st, though we & other lenders may not be working in "real time" with that date. These things can be complicated.

2. There are serious strings attached when you get to the 5 - 10 range of financed properties. If the property being purchased (or refinanced) is for investment there will be limited loan-to-values, credit score requirements, and some SERIOUS reserve requires. Reserves are liquid funds verified that are looked at as the number of months those dollars would translate into making mortgage payments on the properties owned by the borrower. It looks like they would need to document assets to cover about six months of payment on essentially all their mortgages, not just on the subject property.

3. I do not see ANY allowance for Cash-out refinances in these guidelines, so don't expect to be cashing out homes under these limits. That includes getting a home paid for with cash to make the purchase happen quickly & expecting to get your cash back with a mortgage after the fact...not going to happen.

4. For single unit homes, it looks like the LTV max is 75%. It appears to be 70% for 2-4 unit homes. Both require a minimum 720 credit score.

5. Other notes: NO bankruptcy or foreclosure for 7 years. NO mortgage lates (30 days or greater) in the last 12-months. Everything fully documented, regardless of what the automated underwriting says...treat it like a manual underwrite with MAXIMUM documentation.

In other words, yes, Fannie Mae is planning to go back to the 10 financed properties limit, but you had better get your borrower prepared for a ride, and they had better bring their "A game". Investors better be ready to jump through hoops on this one and be prepared for probable price adjustments.

None the less, 10 is better than 4. Sell On!!!

MICHAEL MERGELL (317) 645-8717 MICHAELMERGELL@REMAX.NET

RE/MAX Ability Plus-Fishers

Opening Doors for you all across Indy and Hamilton County.

by Michael Mergell, Managing Broker RE/MAX Ability Plus-Fishers

FHA's Streamlined 203(k) program permits homebuyers to finance up to an additional $35,000 into their mortgage to improve or upgrade their home before move-in. With this new product, homebuyers can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or FHA appraiser.

Practically the only home repair or renovation program out there for those with less than perfect credit .Borrower up to 110% of the homes after-improved value.

Call me for more details.

MICHAEL MERGELL (317) 645-8717 MICHAELMERGELL@REMAX.NET

RE/MAX Ability Plus-Fishers

Opening Doors for you all across Indy and Hamilton County.

by Michael Mergell, Managing Broker RE/MAX Ability Plus-Fishers

FHA's Streamlined 203(k) program permits homebuyers to finance up to an additional $35,000 into their mortgage to improve or upgrade their home before move-in. With this new product, homebuyers can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or FHA appraiser.

Practically the only home repair or renovation program out there for those with less than perfect credit .Borrower up to 110% of the homes after-improved value.

Call me for more details.

MICHAEL MERGELL (317) 645-8717 MICHAELMERGELL@REMAX.NET

by Michael Mergell, Managing Broker RE/MAX Ability Plus-Fishers

Renting a home or apartment is commonplace. It's clear that some people simply just can't afford to buy their own home because of the down payment required. With FHA financing back in the mainstream, as little as 3.5% down payment can get you into your home!

My key mortgage partners have invested a lot of time learning the ropes of FHA financing and have taught me to understand that it represents an unprecedented opportunity for first time homebuyers RIGHT NOW. Most renters don't realize how easy the cost justification is for owning versus renting. Once I'm able to clear up the down payment challenge by introducing FHA financing, then the next hurdle is to show the $ justification for buying. I am pleased to say that I can confidently turn any renter into a homeowner by showing how much more money they are really spending by renting versus owning. Just let me know if you'd like me to take you through this.

The problem with renting is two-fold: you will never get back what you pay towards your rental property since you don't own it (and you're simply paying the landlord's mortgage) and secondly you will have restrictions imposed on you that you would not have if you owned your own home. The cost of buying a home isn't cheap. We all know and appreciate this fact. Depending on the location that you choose within the Indy area, the costs can vary. But the market is so soft right now that there are some amazing deals to be had.

When I work with first-time homebuyers, I always try to set a framework for homeownership. It's not uncommon that first-timers that come to me, have it in their heads that the house they buy has to be their ideal house...like the one they grew up in. A house they will live in for a zillion years. Here's the paradigm shift I try to instill: your first property will more than likely be deficient. Buy something you love that's imperfect. The key is to get in sooner than later so you can enjoy the tangible and intangible benefits of homeownership. Wait out the market cycle. Can you live in it for 3-5 years? Then buy it! In the meantime, save as much money as you can, build equity passively and proactively, and get lots of raises or bonuses at work. What I mean by building proactive equity refers to what I mentioned earlier-buy a place that's imperfect. This way, you have the opportunity to enhance the property's value by making improvements. Owning your own home is about benefiting from long term personal and financial satisfaction. Ownership means security and having the opportunity of creating the dream home the way you have always wanted it. Home ownership is also about benefitting from the freedom of having your own adult-person investment.

A key point of emphasis lies in being armed with the right kind of help to assist you in choosing which home is right for you. Talking to someone who can help you know what your options of owning are, without a doubt, is the right step to take. In the Indy area there is an abundance of houses and condos to choose from. Property prices during '08 and 09' have steadily dropped, and it's truly an ideal time to buy your dream home. Normally the best thing to do is to talk to a great Realtor who can give you a realistic idea of what's possible for you. Naturally, what's most important are your own needs and wants. Let's see if it's realistic for you to be a homeowner! Give me a call or drop me an email! The type of lifestyle you envision will help us determine if buying is a feasible option.

MICHAEL MERGELL (317) 645-8717 MICHAELMERGELL@REMAX.NET

by Michael Mergell, Managing Broker RE/MAX Ability Plus-Fishers

When a company falls on difficult times, one of the things that seems to happen is they reduce their staff and workers. The remaining workers need to find ways to continue to do a good job or risk that their job would be eliminated as well. Wall street, and the media normally congratulate the CEO for making this type of "tough decision", and his board of directors gives him a big bonus.

Our government should not be immune from similar risks.

Therefore: Reduce the House of Representatives from the current 435 members to
218 members and Senate members from 100 to 50 (one per State). Also reduce remaining staff by 25%.

Accomplish this over the next 8 years. (two steps / two elections) and of course this would require some redistricting.

Some yearly monetary gains include:

$44,108,400 for elimination of base pay for congress. (267 members X $165,200 pay / member / yr.)

$97,175,000 for elimination of the above people's staff. (estimate $1.3 Mil in staff per each member of the House, and $3 Mil in staff per each member of the Senate every year)

$240,294 for the reduction in remaining staff by 25%.

$7,500,000,000 reduction in porkbarrel ear-marks each year. (those members whose jobs are gone. Current estimates for total government pork earmarks are at $15 Billion / yr)

The remaining representatives would need to work smarter and would need to improve efficiencies. It might even be in their best interests to work together for the good of our country?

We may also expect that smaller committees might lead to a more efficient resolution of issues as well. It might even be easier to keep track of what your representative is doing.

Congress has more tools available to do their jobs than it had back in
1911 when the current number of representatives was established. (telephone, computers, cell phones to name a few)

Note:
Congress did not hesitate to head home when it was a holiday, when the nation needed a real fix to the economic problems. Also, we have 3 senators that have not been doing their jobs for the past 18+ months (on the campaign trail) and still they all have been accepting full pay. These facts alone support a reduction in senators & congress.

Summary of opportunity:

$ 44,108,400 reduction of congress members.

$282,100,000 for elimination of the reduced house member staff.

$150,000,000 for elimination of reduced senate member staff.

$59,675,000 for 25% reduction of staff for remaining house members.

$37,500,000 for 25% reduction of staff for remaining senate members.

$7,500,000,000 reduction in pork added to bills by the reduction of congress members.

$8,073,383,400 per year, estimated total savings.

Big business does these types of cuts all the time.

If Congresspersons were required to serve 20, 25 or 30 years (like everyone else) in order to collect retirement benefits there is no telling how much we would save. Now they get full retirement after serving only ONE term.

MICHAEL MERGELL (317) 645-8717 MICHAELMERGELL@REMAX.NET