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There are stipulations to this waiver:

Lenders develop concerns when the sales price of the property is 20 percent or more over and above the seller's acquisition cost. Because of it, most lenders will require (2) full appraisals (starting 2-15-2010 the appraisers will be ordered through the lenders directly).

All transactions must be arms-length transactions, with no identity of interest between the buyer and seller or other parties participating in the sale transaction. Some ways to ensure that there is no inappropriate collusion or agreements between parties is to assess and determine the following:

• The seller holds title to the property;
• LLCs, corporations, or trusts that are serving as sellers were established and are operated in accordance with applicable state and Federal law;
• No pattern of previous flipping activity exists for the subject property, as evidenced by multiple title transfers within a 12 month time frame (chain of title information for the subject property can be found in the appraisal report);
• The property was marketed openly and fairly, via MLS auction, For Sale by Owner offering, or developer marketing (any sales contracts that refer to an "assignment of contract of sale," which represents a special arrangement between seller and buyer may be a red flag).

In cases in which the sales price of the property is 20 percent or more over and above the seller's acquisition cost, the waiver will only apply if Originator:

• Justifies the increase in value by retaining in the loan file supporting documentation and a second appraisal which verifies that the seller has completed sufficient legitimate renovation, repair, and rehabilitation work on the subject property to substantiate the increase in value or, in cases where no such work is performed, the appraiser provides appropriate explanation of the increase in property value since the prior title transfer, AND
• Orders a property inspection and provides the inspection report to the purchaser before closing. The lender may charge the borrower for this inspection. The use of FHA approved inspectors or 203(k) consultants is not required. The inspector must have no interest in the property or relationship with the seller, and must not receive compensation for the inspection from any party other than the lender. Also, the inspector may not compensate anyone for the referral of the inspection. Additionally, the inspector may not receive any compensation for referring or recommending contractors to perform any repairs recommended by the inspection, and may not be involved with performing any repairs recommended by the inspection.

At a minimum, the inspection must include:

• The property structure, including the foundation, floor, ceiling, walls and roof;
• The exterior, including siding, doors, windows, appurtenant structures such as decks and balconies, walkways and driveways;
• The roofing, plumbing systems, electrical systems, heating and air conditioning systems;
• All interiors; and
• All insulation and ventilation systems, as well as fireplaces and solid fuel burning appliances.

Every month ForeclosureRadar.com releases a foreclosure report showing foreclosure activity.

Click here to view the report.

Are you a direct lender?

I received a call the other day asking me this same question and i wanted to share my opinion on the matter. The difference between a direct lender and a brokerage is that a direct lender uses their own money too lend. They are bound by their own set of rules, unlike a brokerage who acts as a mediator between wholesale lenders and the consumer. Direct lending has it's benefits, but it also has it's disadvantages. The main advantage is that they have an underwriter, a doc department and funding team in-house, but at the same time technology has come along way. Underwriters, doc drawers, funders, etc.. are an email or phone call away now. Some wholesale lenders have even set shifts in which underwriters take turn taking calls from loan officers working for a brokerage to answer any questions they may have. One of the disadvantages of a direct lender versus a wholesale lender is flexibility within their guidelines. 
Also, the uncompromising policies of the underwriters. Unlike a brokerage, if for some reason guidelines are not met initially, another lender can be quickly contacted to fit that particular scenario.

As a brokerage... relationships are created with several banks (Mountain West Financial, Wells Fargo, PMAC, PMC, American Equity, CMG Mortgage, Flagstar, Trust One, and a few more). If one bank doesn't want the loan, the loan officer can pick up the phone and call another until a match is made. It sounds easier than it really is and I must address the fact that some guidelines are industry standard and must be followed. Other guidelines are bank specific and because of that, brokers can be an ideal solution.

What else is different between a direct lender and a broker? Fees are a big one. A broker's fees are usually higher than a direct lenders, but the rates may be a little lower. A broker obtains rates at a wholesale amount and passes the savings to the customer. Brokers must disclose the yield spread premium (YSP) or rebate as it is known in the industry. Where as a direct lender has no obligation to disclose that same information leaving you in the dark. The consumer will always know how much the compensation is to monitor if predatory lending is present. The fees that a broker charges can be negotiated and reduced to a certain point to match a direct lender.

We are a Rancho Cucamonga based brokerage working with people that are highly motivated to buy a home. If credit is a problem we take the steps to improve it, if showing income is a problem we usually find more within your documents. Hire us if you want someone to fight for you and to work diligently to get you the financing you need to buy your home.

Bringing the Dream of Homeownership Within Reach

As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed new legislation that:

• Extends the First-Time Home Buyer Tax Credit of up to $8,000 to first-time home buyers until April 30, 2010.
• Expands the credit to grant up to $6,500 credit to current home owners purchasing a new or existing home between November 7, 2009 and April 30, 2010.

Here is more information about how the Extended Home Buyer Tax Credit can help prospective home buyers become part of the American dream.

Who Qualifies for the Extended Credit?

• First-time home buyers who purchase homes between November 7, 2009 and April 30, 2010.
• Current home owners purchasing a home between November 7, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.

To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

If you or your client purchased a home between January 1, 2009 and November 6, 2009, please see: 2009 First-Time Home Buyer Tax Credit.

Which Properties Are Eligible?

The Extended Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

How Much Is Available?

The maximum allowable credit for first-time home buyers is $8,000.

The maximum allowable credit for current homeowners is $6,500.

How is a Buyer's Credit Amount Determined?

Each home buyer’s tax credit is determined by additional factors:

1. The price of the home.
2. The buyer's income.

Price

Under the Extended Home Buyer Tax Credit, credit may only be awarded on homes purchased for $800,000 or less.

Buyer Income

Under the Extended Home Buyer Tax Credit, which is effective on November 7, 2009, single buyers with incomes up to $125,000 and married couples with incomes up to $225,000—may receive the maximum tax credit.

These income limits have changed from the 2009 First-Time Home Buyer Tax Credit limits. If you or your client purchased a home between January 1, 2009 and November 6, 2009, please see 2009 First-Time Home Buyer Tax Credit.

If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?

Yes, some buyers may still be eligible for the credit.

The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $145,000 for singles and over $245,000 for couples are not eligible for the credit.

Can a Buyer Still Qualify If He/She Closes After April 30, 2010?

Under the Extended Home Buyer Tax Credit, as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.

Will the Tax Credit Need to Be Repaid?

No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.

Starting January of 2010 FHA will require that lenders(banks) take full control of the appraisal process, meaning that loan officers can only initiate the order. Here some other changes to the appraisal process:

• The fee for the appraisal will be regulated to ensure that appraisers are not charging beyond a reasonable rate for that particular market area. Appraisers can not charge based on distance, management, or anything beyond the activity of the actual appraisal.
•  Commission based loan officers can not communicate with the appraiser in relations with the valuation of the property. To simplify things, the loan officer can not influence the appraiser to value the home at a certain price.
• Appraisal turn times can be delayed by a few days due to the lack of control and depending on the amount of work that particular appraiser has.

Due to the Mortgage Insurance (MI) companies reducing their product coverage Conventional lenders have been forced to abide to the MI’s newly revised guidelines. The following are the new changes:

For purchases of primary residences the minimum down payment required is 10% (90% LTV). The max loan amount is set to $417,000 and the minimum FICO score is 720. The Debt-to-Income (DTI) ratio must not exceed 41%. (To figure out your DTI add all your monthly debt that appears on your credit report and divide it by your monthly qualifying income.)

These recent changes make FHA financing a feasible option. Here are the advantages of FHA financing:

•  3.5% Minimum down payment
• Competitive Interest Rates
• Lower Monthly PMI Rate
• 620 Minimum FICO
• No Cash Reserves Required
• Gifts allowed
• Cosigners allowed
• Flexible Guidelines
• Home Rehabilitation Feature
• Eligible for Streamline Refinancing

For more information on these and other guideline changes call (951) 662-3389. For a mortgage planning consultation please fill out an online application or call me direct.

Here are some quick ways (in less than 30 days!):

1. Pay down your credit cards. Paying off your installment loans may can help your score, but typically not as dramatically as paying down -- or paying off -- revolving accounts like credit cards. The FICO model and even (from what we understand) the Vantage scoring system now used by the Big 3 weight credit card debt more heavily. Each individual card as well as your total revolving line should be below 25%. If your goal is to increase your credit score - forget about paying down your high interest rate cards first. Work on getting those balances down over higher interest rates to reap the most improvement in credit score.

2. Don't use your whole credit line every month, even if you pay your balance in full. Your available credit is averaged over your billing cycle, which is sometimes less than 30 days. If your limit is say, $5000 and you charge $5000, even if you pay it off each month, your credit balance is still going to show $2500 (a 50% usage limit), which is going to make your score plunge.

   For most small business owners, their credit cards are the way they purchase goods and supplies every month. If the card's limits are used to the hilt - this can hurt. But wait you say, these are business cards. Yes, they are and most small business owners still have to personally guarantee their business cards, which means they show up on personal credit reports. If you need to use all of the available credit line on your cards, you may want to consider getting a new card to spread out the credit lines a little.

3. Is your credit report correctly reporting your credit limits for your cards? If not, you can call your credit card issuer and ask them to update the list. You can also challenge the limits with the credit bureaus.

4. Don't use credit card issuers who don't report your credit limit. Usually this is a problem you only run into with secured credit cards, but were you aware that American Express cards and Capital One do not report credit limits? In this case the bureaus typically use your highest balance as a proxy for your credit limit, which is going to make you look like you are maxed out.

5. Ask a trusted friend or family member to add you to one of their old cards as an authorized user, maybe one that hasn't been used in awhile. The older your credit history, the better. If your mother agrees to put you as an authorized user on a card that she; had for 20 years, you could see your score increase dramatically. And with the authorized user plan, you don't even have to have the card in your possession if "Mom" feels better about this plan. (You'll have to work things out with her on this).

6. If you've been a good customer for years, but had a rough patch and missed a payment - you might be able to ask your creditor to "erase" a negative listing. You can do this with a goodwill letter. There is no guarantee that a lender will do this, but this method has had lots of success. Contact me for a FREE sample letter.

7. If you have a student loan that you have defaulted on or have missed payments, you can enter into a "rehab program" which will get your account back on track after 12 months (ok, so it's not a short-term strategy.) Sallie Mae regularly upgrades your loan status to "Paid as Agreed" if you make a series of 12 or so on-time payments.

8. Dispute old negatives. Say your insurance company never paid a medical bill and now you have a collections account. You can continue protesting that the charge was unjust, or you can try disputing the account with the credit bureaus as "not mine." The older and smaller a collection account, the more likely the collection agency won't have bothered to update good ole eOscar with the correct info and the credit bureau won't be able to match up computer records.

9. Get a collection agency to agree to remove a debt from your report if you pay it. This method is called "pay for delete" and it works like a charm on smaller amounts of $500 and under, especially medical collections. Remember to get the agreement in writing before you pay them anything, and only send a money order after you get them to agree. Check here for more info on settling debts.

10. Disputing with original creditors really works, especially accounts which have been purchased by other banks or are currently with a bank who has gone through some of those massive mergers in the last 10 years. And you have the cases (more common than you think) where some banks just don't keep good records at all. This method is relatively quick.

11. Target "easy" errors on your credit report that have a bang for the buck.

    • Negatives that truly are not yours: Late payments, charge-offs, collections
    • Any Accounts listed anything other than "current" or "paid as agreed" if you paid on time and in full.
    • Accounts that are still listed as unpaid that were included in a bankruptcy.
    • Negative items older than seven years (10 in the case of bankruptcy) that should have automatically fallen off your report.
    • Any account that is listed as "Closed by the credit grantor" when it wasn't should be fixed as this is definitely a negative

If you'll notice the first 3 items concerned paying down credit balances. This is for a reason - high credit balances can kill the credit score of someone who otherwise has perfect credit. It is weighted HEAVILY in your credit score. Get those balances down!

Picture having an extra $8,000 to furnish your home, landscape your yards, pay back money that you borrowed for your down payment, pay off debt, increase your savings, or even to do some home improvements around the house.

For a limited time, first-time homebuyers can take advantage of as much as an $8,000 tax credit. The American Recovery and Reinvestment Act of 2009 established this credit for buyers who purchase a principal residence on or after January 1, 2009 and before December 1, 2009.

The credit does not require repayment and can be claimed on a tax return to reduce the buyer's income tax liability. If the credit amount exceeds the amount of taxes owed, the excess will be refunded as a check to the buyer.

Fill out a loan application to get started. I will go over your full financial situation and I will put together a well thought out plan to help you achieve wealth from your purchase. You will learn what the bottom line is for your new investment and you will also learn how to increase equity in your property by simply adjusting your monthly cash flow. You can also call me direct to schedule a free consultation.

Happy Father's day to all you dads out there. I attended The Vine Church this Sunday with my dad, brother who is a dad, my girl friend, and the rest of my family. Pastor Jeff Evans gave an awesome sermon and i wanted to share it with everybody.

Take some time and listen to the message and i guarantee you will learn something or at least gain a little inspiration and motivation to become a better person.

http://www.thevinerc.com/downloads/SS_06_21_09.mp3

SB economist says housing bust bottoming out

Andrew Edwards, Staff Writer

Created: 05/21/2009 08:14:12 PM PDT

The Inland Empire real-estate market appears to be bottoming out, according to regional economist John Husing.

Home prices over the past few months appear to be stabilizing as home sales volume continues to increase, Husing said Thursday, adding that the economy will still take some time to pull completely out of the recession.

"When we start looking at construction, 2011. Maybe," Husing said.

Husing, speaking at a real-estate summit sponsored by The Sun, said his chief concern as an economist is that the region's economy will roll along the bottom rather than bouncing back quickly and vigorously.

Husing attributed the increased volume of home purchases to lower prices and greater affordability.

If there is a benefit to the bust, Husing said, it's that people can afford to buy homes because prices have returned to earth and that the market is closer to a point where developers will be able to build new homes again.

In order for that to happen, however, he noted that government agencies will need to give builders breaks on fees to keep building costs in line with what the market will bear.

He blamed the housing bubble in part on legislative impediments to construction that artificially hiked prices, which attracted speculators and led to the explosion of ill-advised mortgage products as people bought homes they couldn't afford.

He said municipalities will need to lower their development fees to allow for new

construction of modest homes.

"They've got to downsize. The big McMansions aren't going to be built until we get to a different phase," Husing said.

Despite such bad news, Husing said he figures that the residential real-estate market has bottomed out.

In giving his economic overview, Husing pointed out that the region remains mired in the worst recession in decades, citing statistics showing the Inland Empire has lost more than 340,000 jobs this year.

Among American metropolitan areas with more than 1 million people, the Inland Empire's unemployment rate of 11.8 percent is second only to Detroit's rate of 11.9 percent.

Building-permit valuations dropped from $12.5 billion in 2005 to $3.9 billion in 2008. Husing said that means an equivalent amount of money has been lost in retail and other industries that serve those who made their living in construction-related work.