Roger Howell

I've been trying to wrap my head around the changes 2009 will bring. Numerous changes for borrowers and mortgage originators. Some of The changes are:

If a loan is considered a "higher priced mortgage loan", based on a FHLMC published average prime offer rate more than 1.5% over this published rate or for a second mortgage, over 3.5%. What this rate is determined to be has yet to be published. I guess it will seriously affect the ability to offer no closing cost or reduced closing costs loans.(more than it already has) We'll have to wait and see what that "FHLMC Prime Offer Rate" turns out to be. IF you have a higer priced mortgage loan, then the following applies:

Regulation Z, creates 4 new "consumer protections".

First, the lender must take into account the borrowers ability to pay from income and assets instead of solely on the homes value. (I thought we were already doing this)

Second the income and asset information must be verified-NO MORE STATED INCOME LOANS! (believe it or not, I still get calls for those)

Third, escrow accounts for property taxes and home owner's insurance are required.

Fourth, Pre payment penalties are restricted, no more than 2 years if the loan can change in the first 4 yrs.

It appears to me that the above is in response to the sub prime loan crisis. By the time all this came into affect, sub prime lending is largely a thing of the past. In a couple of years it will be a memory but we will still have the following regulations in affect.

For all loans, it requires a good faith estimate with in 3 days after the customer applies for a loan. The customer cannot be charged for anything up front other than a reasonable amount for a credit report. The days of a lender charging a $400 application fee are gone. I never do this, but have had clients come to me that got hooked by an on line lender for this. When they found out the rate they were quoted was not accurate, they were stuck for the application fee. This is a good thing!

I will get into the other regulation changes in other posts, there's plenty of them!

It seems the latest hot product is loan modifications. Many former mortgage companies and others in the business have tried to supplement their falling incomes by getting distressed borrower's to pay them a hefty fee upfront to modify their loan. I have seen prices form $2500 and up, usually due upfront with no guarantees of results. Up until now, there has been little or no regulation of this activity.

I have a moral issue with charging someone a fee for something they can easily do themselves. In the last few months i have faced this situation with past clients, friends, or simply people calling in and finding they cant refinance their way out of a bad mortgage situation. In all cases I have explained what they need, how to get it, and then referred them back to their lender. In the event they are having difficulty, I ask them to call me, and I will help them further.

We just got notice yesterday from the Idaho Department of Finance that anyone offering to preform a loan modification and charge a fee, is considered to be in the activity of credit counseling and therefore must be licensed as a credit counselor and must also register any and all business locations. Its about time the state got more involved on this issue. To find out more on this subject, go to: http://finance.idaho.gov

You may also call the Depart of Finance to report illegal loan modification companies at 208-332-8000.

For home owners in distress, The Department of Finance has resources at : http://finance.idaho.gov/mortgage/foreclosureresources.aspx

I think I will be posting more on this subject with more self-help information in the future.

Yes, it is possible to get into a HUD home with only $100. It has to be a HUD owned home and eligible for the special program. You can find those homes in your area at HUD.GOV and then search for hud homes in your state. Here in the Treasure Valley, we have approx. 25 homes listed and most are eligible for this program.

Some of the details include:

$100 Down Payment! Financing is available on most properties through participating FHA Approved Lenders.

. $500 Broker Bonus! The selling broker will receive an extra $500 for securing and closing a full price owner occupant sale regardless of Financing type.

. $1,000 Sales Allowance! An additional $1,000 sales allowance will be credited at closing to the owner occupant purchaser for full price offers regardless of Financing type.

I am an FHA approved lender, and I would love to discuss the program and get you approved for one of these homes.

Since we're coming up on a new year, I thought it might be helpful to publish loan limits again.

Basically, they haven't changed for 2009 vs 2008, except we now have the HOPE for Homeowners program.

Here in Idaho, we have a couple of counties that carry a higher conforming and FHA limit. Those counties are Blaine ($457,700) and Teton ($625,500).

Since I dont make residential loans outside of Idaho, I don't keep up on other states' limits. You can find them by going to www.hud.gov and then searching your state and they will give you the loan limits.

Anyway, I can't beleive how fast this year is going. I'm looking forward to 2009!

We recently got the ability to pair FHA loans with grant money for Idaho home buyers. The new grants are actually called "deferred loans" with zero interest and no payments due. There are income limits, you have to earn 80% or less of the median income, currently $60,900. This means your client will have a maximum income of $48720 for the Boise-Nampa MSA.

The grants are maxed at $20,000 and your income needs to be 60% or less of the median income to qualify for that.

Here's the breakdown:

The grants are subject to availability of funds, so the earlier you get your funds reserved, the better.

Now, since there is no such thing as a free lunch, here's the catch.

* The grant is due on sale, or a cash out refinance.

* the property cannot be converted to a rental, that would trigger a repayment.

If you know someone who would benefit from this grant program, or simply want to know more, call me at 208-955-1234.