Roy Paeth - Illinois - 100% USDA - FHA/VA Loans

I will admit that I can be a very tough customer to please but I only expect the same kind of service that I provide to my clients. In this very crazy mortgage industry it seems that service for many companies has become a lost art. I have worked with several title companies over the past eight years and the level of service always seems to fluctuate between good and bad. I know you can never expect every closing to be perfect but when things go bad is when you get to see a company's true colors. Let's just say that most every time an issue has reared it's ugly head I have found out that I am just a number to these title companies.

About a year and a half ago one of my loan officers had mentioned that a title rep she had worked with in the past had moved to a new company and that I should give them a try. I told her I was happy with my current title company but I would keep them in mind. Low and behold a few days later I have a file that is funding and I get a call from my client. Mrs. Client was supposed to pickup a check but cannot seem to get a hold of the title company. She decided to take a drive over and the office is closed. I start making calls to find out what the heck has happened. After several calls I get someone who says that they just closed the office my client was supposed to pickup her check at. After a couple of more calls I am told that my client's check will be mailed in a couple of days and they will not overnight the check.

Wow talk about great service!!

Enter Acquest Title Services and my account rep Denise Friel...

I decide maybe it is time to give Acquest a try. I call to find out what their pricing is like and they are competitive with the other title companies in the area. I speak with our account rep and she tells me what I want to hear, "we have great service, just give us a try." Well I decide to place an order and am shocked at how quickly I get the order. Okay so far so good. I order a closing protection letter and some changes to the title which I receive back in about 30 minutes. Finally I call to schedule a closing for the next day because I have a lock that is going to expire and there are no issues even when I need the closer to go to the client's home for the closing after 7pm. Well time moves along and everything continues moving like a well oiled machine. A couple of minor issues have come up but they have been taken care of professionally and with an apology. No matter how many orders I place I am always treated like Acquest Title's most important customer.

I just wanted to take the time to thank everyone at Acquest Title for a great year and a half. If i listed specific names I am sure I would miss someone. I really appreciate everything that you have done to take care of me and my loan officers in these trying times.

For those of you in the Chicagoland area in need of reliable title company please contact Denise Friel with Acquest Title Services at 708-774-0731 or go to their website at www.acqt.com.

Reverse mortgages have gotten a lot of publicity over the past couple of years both good and bad. A reverse mortgage allows seniors (62 and older) to tap into the equity in their home while eliminating their mortgage payment. In order to qualify for a reverse mortgage senior must be 62 or older and own a home. How much the homeowners can borrower depends on the age of the youngest borrower, the appraised value of the home, where the home is located along with which rate option the homeowners choose. The rate options the borrower may choose from are the fixed rate along several different variable rate options.

In the past the only way to use a reverse mortgage to purchase a home was by using the now extinct Fannie Mae Homekeeper program. The problem was that the Fannie Mae Homekeeper was very limited and thus was retired. In 2008 HUD announced that the HECM (Home Equity Conversion Mortgage) would be eligible for purchase transactions in 2009.

Let's take a look at some of the guidelines of the HECM for purchase program.

General Guidelines:

Any repairs that are required by FHA guidelines must be performed before closing. The seller is responsible for all repair costs.

FHA flipping rules apply. The resales of a property may not occur 90 days or fewer from the last sale. Re-sales that occur between 91 and 180 days where the new sales price exceeds 100% of the previous sales price will require additional documentation validating the property's value.

The borrower must occupy the property within 60 days of closing.

No subordinate financing is allowed.

Property Types:

Existing one-unit properties where the construction has been completed and the property is habitable. This means no Cooperatives, newly constructed residences must have a certificate of occupancy, no boarding houses, or bed and breakfasts. No manufactured homes built before 6/15/1976 and existing manufactured homes built after 6/15/1976 that fail to conform to the Manufactured Home Construction Safety Standards and/or lack a permanent foundation.

Funds to close:

No gift funds, grants, seller contributions, or secondary financing is allowed. The funds to close must be the borrowers own money (cash on hand, money obtained from the sale of assets, or sale of current home.

Okay so now you are probably wondering why would someone use a reverse mortgage to purchase a home. By using a reverse mortgage and couple that may be downsizing may not want to have a mortgage payment which would require them to pay cash or the home. By using a reverse mortgage our senior couple would only need to pay for part of the house in cash thus freeing up some of their money for future needs. Since the reverse mortgage does not require a monthly payment our example seniors have got the best of both worlds.

What's the catch?

Okay as many of my senior clients ask, what is the catch? First off the reverse mortgage is not a cheap loan. The closing costs are typically higher than those for a normal mortgage so this is not a short term fix.

The other downside of a reverse mortgage is that it is a negative amortization loan. What this means is that since no payment is required on a reverse mortgage the balance of the loan increases each month. For many seniors this means their heirs will stand to inherit less from the proceeds of the sale of the home.

I have really just scratched the surface on how a reverse mortgage works but the point is that this loan may very well make sense for some of your senior clients looking to downsize or just move closer to their family. A reverse mortgage is not for everyone and it is more complicated than your normal loan but it is another option to consider when you are working with senior clients.

With many baby boomers becoming seniors every day the reverse mortgage is increasing in popularity every year, why not mention it the next time one of your senior clients is shopping for a home?

Wow, in time where we have become so used to bad news from the media about our industry it is nice to get some good news. As many of you know the Shaun Donovan, secretary of the US Department of Housing and Urban Development on Tuesday announced that the Federal Housing Administration is going to permit it's lenders to allow home buyers to use the $8000 tax credit as a down payment. This is something that Congress wanted to allow in the first place but no one could figure out how to implement it. While I am very excited about this news as many or you are as well. The only problem with the announcement is the details. As you and I both know HUD can take a while to get things like this rolled out. Here is a link to the actual article.

http://www.realtor.org/press_room/news_releases/2009/05/re_summit?lid=ronav0019

Will this be new life for the down payment assistance companies? How will lenders deal with this new development? Will some lenders decide not to allow this while others endorse the idea? Will this borrowed money be counted as a lien against the property and how will this affect the loan to value calculations?

While there are still many questions to be answered the bottomline is that this new way to use the $8000 tax credit could be just what the doctor ordered to get some of those buyers of the fence and into a new home.

Okay i am not a Realtor nor do I play one on TV. I have a lot of respect for what you Realtors do and in this market I cannot imagine the BS you have to go through. Yes on the lending side we have had some nasty hurdles to jump over and hoops to jump through. Okay enough about us let's talk about the banks.

I have several buyers who are out there looking for homes who have made offers on multiple short sale/foreclosure/REOs, whatever you want to call them. My borrower makes an offer the bank of $150,000 for a home that is listed at $175,000 but my appraiser says the home based on comparable sales will only appraise for $158,000. So the bank says no they have to have $175,000 or maybe they come down just a bit. Well unless my borrower has a boat load of money put down there is no way that a lender is going to give them a mortgage for this home. So rather than selling a home and getting a bad debt off their books the bank stand their ground and does not sell the house. Who knows when or if the bank will get a better offer. Heck unless someone comes along with cash it won't matter because the value is not there. Let's not even talk about how HVCC has completely thrown things out of whack already.

So this whole housing, mortgage and economic meltdown thing is nothing new. I know the banks are overloaded with short sales and foreclosures but hasn't everyone had enough time to get something figured out by now? Shouldn't there be some system in place to deal with these homes? I am no financial whiz but isn't getting a bad loan off their books now better than keeping that loan on the books and push things off for later? A client I was talking to the other day had an idea about how to deal with the foreclosures. Rather than modifying a loan why doesn't a lender do the following?

"Mr. Borrower looking over your financials we see that you cannot afford this home but we have another home that is a foreclosure in your area that fits your budget?" So you take someone out of a house they cannot afford and place them into a home they can afford. Now instead of two non-perfoming loans you have one loan that you are receiving payments. This also would help to stabilize the housing prices in areas since you now have less foreclosures. I know there are probably some legal and accounting complications to this but this is some outside the box thinking that could help.

I could go on and on about how the system is definitely messed up right now as I am sure many of you could. I truly wonder what the banks are thinking these days, or are they?

????????????????????????????????????????????????????????????????????????????????????????????????????