Inspired by Phil Faranda

As I gobbled some crazy good pizza Phil lectured me that I need to be blogging again.

I had lunch with my good pal and Realtor Extraordinaire Phil Faranda the other day. As I gobbled some crazy good pizza Phil lectured me (kindly, as it were) that I need to be blogging again.

In between chomps on the pizza I responded.

GULP. “Been there done that Phil. I used to blog on tcurranmortgage a LOT.” BITE. CHOMP. GULP. YUM.

“Do it again,” says the JPhilip man.

So he got me to thinking. Not just about Pizza, but about blogging again. Then he drew me in ever so craftily when I responded in a rather lengthy way to his posting on his Facebook blog. You can read for yourself how my pizza-enabling-pal became my new blogging-enabling-friend. And I quote: “Trevor, you just wrote a blog post! See how easy?”

I did it again this morning. Got on my soapbox and came real close to ranting and raving in reply to one of Phil’s eloquent and passionate blogs about our interesting business we all work in.

Am I back to blogging BIG-TIME? Since I’m crazy busy in my new role as Director of Business Development for a busy mortgage company, I truly don’t believe I have the time, but I’ll try to come back here to more often and enlighten y’all with my thoughts and information on mortgages, real estate and the homebuying experience.

Speaking of blogs, do check out Phil’s and also my good friend Gary’s (also known as Dedicated WebMaster of this here tcurranmortgage blog) blog about his search for a home in Babylon.

Hey Phil, here’s a re-cap of a bunch of articles I done blogged “back in the day” about the negotiating process. These are the lessons I’ve learned over my 20 year career as a mortgage professional and the distillation of the advice I have given (and continue to give) my HomeBuyer clients:

How To Make An Offer: Redux 2009

Asking Price Doesn’t Matter To Realistic Buyers

When Is The Best Time Of Year To Buy A Home?

FSBO’s: For Sale By Owner

And, in a more-detailed response to Phil’s FaceBook posting this morning about the Seller who didn’t counter-offer, an excerpt from a rather old blog entry here on, Negotiating An Offer In A Changing Market. The excerpt from that article is posted here to further illuminate Phil’s point that a Seller should ALWAYS counter-offer a Buyer’s offer no matter how low it is. Phil says that Buyers are so hard to come by that, when you have one in front of you, you (The Seller) must react with more than a “NO” to a lowball offer.

My personal spin on that is the Seller isn’t really serious about selling the house. See more below.

Serious Sellers. Oh boy there are a lot of houses on the market. Don’t let that fool you into thinking they are all ready for the taking by smart Buyers like you.

Assume there is a percentage of Sellers out there who are not serious about selling their homes. They still think it’s last year and the prices are still mega-millions. Note to Sellers: the market has changed!

You want to discern who is serious about Selling and who is standing there thinking their homes are cash cows waiting to be milked by an unsuspecting Buyer. Note to Buyer: that’s not YOU!

Some folks don’t need to move. The job is not relocating to Arizona; it’s not time to retire; they don’t need to buy a bigger house to accommodate the elderly Mom who is moving in with them. Some folks just have this idea they can sell their home and make tons of money. That’s not “serious about selling” in my book.

You can ask a lot of questions to get at the “truth” behind a Seller’s motivations to sell. You may not get answers to your questions, or the answers may reveal nothing of the Seller’s intentions, or, worse, you may be lied to.

In my long experience I have found the best way to get at the secret of whether or not a Seller really wants to/needs to sell a home is to make an offer.

The person who doesn’t respond to an offer probably thinks he’ll just sit tight to get his price. That’s fine, but if the house isn’t worth that price anymore, then you, educated Buyer, will be moving on to greener pastures.

If your original offer is seriously low, and there is no response, try raising it. If still there is no reaction—a counter offer from the Seller is what I consider a reaction—then this Seller probably isn’t serious.

Time for you to move on. There are plenty of houses out there. Keep going until you find a Seller who really is serious about selling their home.

These are just basic suggestions to help you chart the mysterious waters of a cooling market.

You really must be out there looking, looking, and looking some more, making offers, and making more offers in order to develop a good sense of where the market is going and how you can achieve your goal of homeownership.

Thanks Phil for dragging me back here! Let’s see where it goes from here…

I welcome Comments for all my blog entries. I will be happy to review and approve all legitimate comments provided by readers of I do not permit unfettered access to comments for obvious reasons: mortgage spammers and their ilk. If you wish to Comment on any entry, please do so and I will quickly review and approve. Thanks for reading Hope that helps!

Mortgage Modification Murder: Homeowner Beware!!!

The lowlife mortgage modification scam artist has committed financial “murder.” The crook has taken not only this homeowner’s hard-earned cash, but caused the loss of a home and a substantial financial asset for the family.

I received a call yesterday at our office from a homeowner in Virginia. He was looking for some kind of FHA mortgage modification company and found us instead in his Google Search. Our company is not licensed in Virginia; neither do we do mortgage modifications. We just do plain old-fashioned mortgage originations, helping people buy homes and doing some refinance work, too.

I spent a few minutes with this gentleman on the phone cautioning him against mortgage modification fraudsters. I told him about the many scams being perpetrated by modification companies seeking to take money from unwitting homeowners while delivering zero satisfaction or assistance. I pointed him instead to the website to seek out a mortgage counsellor who might better assist him with his dilemma. I told him, too, that an attorney was probably his best option.

One of our Loan Officers told us of a man he met who is losing his home to foreclosure. A little over a year ago this man had a perfect mortgage payment history. For whatever reason, he decided he needed to modify his mortgage. He hired one of these mortgage modification murderers and paid thousands of dollars in fees to the fraudster. The crooked scam-artist told the man to stop paying his mortgage; upon the advice of his paid-professional-mortgage-modification-expert, the man did indeed cease paying his mortgage.

There was no modification; no call was ever made the the Lender to negotiate on the homeowner’s behalf. Money was stolen from this man and his family; now they are losing their home to foreclosure. The lowlife scam artist has committed, IMHO, financial “murder.” The crook has taken not only this man’s hard-earned cash, but caused the loss of a home and a substantial financial asset. Disgusting.

Homeowners beware. Too many of you who I speak to or hear of are doing exactly what too many of you did during the boom years: you’re following a dangerous path, ignoring the advice of seasoned professionals, and you’re allowing yourselves to be duped out of your homes the same way many of you allowed yourselves to be duped into bad mortgage loans.

If you feel you need help modifying your mortgage, contact your Lender directly. If at first you don’t succeed, try, try, TRY again. If you don’t have the time for that because you are busy working hard to pay your mortgage and your bills, then hire an attorney. Pay your attorney a retainer fee and let a licensed legal professional work on your behalf. If you don’t have an attorney, get a referral from family or friends, or consult your local bar association. You can find local help here, on the American Bar Association website.

President Obama and Congress have provided Homeowners with an opportunity to refinance or modify as part of the 2009 Stimulus Package. Find United States Government help here: Making Home Affordable.

A list of HUD Approved mortgage counsellors can be found here: Foreclosure Avoidance Counselling

I welcome Comments for all my blog entries. I will be happy to review and approve all legitimate comments provided by readers of I do not permit unfettered access to comments for obvious reasons: mortgage spammers and their ilk. If you wish to Comment on any entry, please do so and I will quickly review and approve. Thanks for reading Hope that helps!

No Credit Does NOT Mean “Bad” Credit

No credit means just that: here’s a person who has no established credit history.

I heard it again tonight from a client who’s looking to buy his first home for his family: he thought because his wife had no credit that meant she had “bad” credit.

This is NOT TRUE. False. Fallacy. Myth. Mis-Information. Incorrect assumption. Bad Medicine (oh, wait, this blog is NOT “Dances With Wolves!” Scratch that last part)

If a person has no credit that just means the person has no credit score and no established credit history that a financial institution can use to determine credit-worthiness for approving a car loan, student loan, personal loan, credit card, line of credit, checking account, car insurance, or a mortgage loan. No credit means just that: here’s a person who has no established credit history.

Bad credit means just that: BAAAAADDDDD CREDIT!!! When a finance professional reviews a credit report with bad credit we encounter such things as charge-offs, collection accounts and judgments. Maybe the person owes money to a former landlord or a utility in the form of a judgment. Maybe the person had a checking overdraft account that went unpaid and ultimately wound up with a collection agency. Maybe the person borrowed a book from the library and never returned it thus racking up late charges eventually resulting in a collection account (yes, I’ve seen it), or, MAYBE the person didn’t show up for jury duty and has a judgment for a fee incurred as a penalty for not reporting to jury duty from the County Clerk’s office (I can’t believe I capitalized that for a person that sues people for not showing up for jury duty).

All of that stuff is what you can easily see is BAD CREDIT. It’s NOT “no credit.” There’s some form of credit in there and it’s bad. And it’s on the person’s credit report.

Those other folks—like my client’s wife—who don’t have any credit appearing (whether Good, Bad, or Ugly), those folks have NO CREDIT.

There’s a difference. And with FHA mortgages, a person with NO CREDIT has a chance of building an alternative credit profile and getting approved for an FHA Insured mortgage loan.

The person with BAD CREDIT (and no other credit) has less of a chance of getting approved for such a mortgage loan. Let’s say “zero” chance, and leave it at that.

But get that idea out of your head right now about No Credit meaning “Bad” credit.

Hope that helps!

How-To Make An Offer: Redux 2009

Check out my Re-Posted article on making offers and you, too, can get the home you want at the price you want to pay.

I like to share my professional and personal experience with HomeBuyers. To that end, I created this blog four years ago. I’ve written extensively about the experience of buying a first home, especially with regards to negotiating with Sellers.

As the Spring Buying season gets underway (and it is DEFINITELY doing so as witness recent activity within my market), I thought I might Re-Post one of my blog articles about how-to make an offer to buy your first home. There is a definite process to making an offer as you will see in the article. Not only did I present information from the “old-fashioned” way of buying a home through a Realtor, but I seeded the article with much that I had learned as a mortgage professional. In my experience, this is a technique that is tried and true and it WORKS.

When Buyers ask me, “Hey Trevor, how do I get a sense what the Seller’s “real” price is?” I respond: “MAKE AN OFFER!”

When Buyers like a house but realize it needs updating, or, the house location is great for their needs but the house itself isn’t quite right, thus leading in both instances to a desire to pay substantially less than the asking price, I recommend those Buyers, too, use the Offer technique described in my article.

Too often Buyers look at homes they really like but walk away without making an offer. In New York State, until you sign a contract of sale, you can make as many offers on as many houses for whatever prices as you like without being committed to a danged thing. Use the Offering technique to get what YOU want. In today’s Buyer’s market this technique is useful to get unrealistic Sellers shaken loose from the idea that their home is still worth what it was in 2005.

Try it and you’ll find you get results when you are dealing with what I consider to be “serious” Sellers and Realtors. The method also helps you weed out unrealistic Sellers from your search for a home. It’s true, there are Sellers out there who aren’t serious. By using my offer method you discover quickly and avoid wasting your time dealing with them.

Let’s talk about Realtors for a moment. With the market in such disarray, many, many Realtors have departed the real estate business; they could not earn enough to pay their bills. They have moved on to take salaried jobs elsewhere. You would think this cleansing process would leave only serious real estate professionals, those who are earnest in their desire to adhere to professional standards and ethics. Too, you would think the part-time Realtor, the “dabbler” if you will, couldn’t possibly survive. In both cases your thinking would be wrong. I’m sorry to report that I’m still coming across situations where Buyers are working with less-than-professional-Realtors. Unfortunately, this can affect a Buyer because you don’t get the high quality of professionalism that you deserve. In a difficult market where Sellers are unsure of their course of action the results can be disastrous. The Realtor’s role is to bring Buyers and Sellers together. A seasoned professional does so ethically and with quality sales techniques. The Pro doesn’t use sales “mumbo-jumbo” instead adhering to the idea that a good salesperson listens to the needs of the customer/client and finds a way to satisfy those needs. The Seller wants the best price in a “Buyer’s Market” and the Buyer wants the home they love without over-paying. Quality Realtors make that happen.

My experience with many part-time Realtors is they don’t have the resources to find the right home for their Buyer. Neither do they have the time nor the inclination for lengthy negotiations.

Many of those “Boom-Time” Realtors who made a killing selling homes to anyone with a pulse just don’t care to understand the finer points of being a good salesperson. In an attempt to survive they are still using the methods that sold homes four years ago. For example, I had a Realtor tell one of my clients at an open house that he had “…better hurry up and make an offer because there are 3 other really good offers on the table.” WHAT!?! In this market that cannot possibly be true. That’s “Boom-Time” selling, not Buyer’s Market professionalism.

My Buyer tested the waters using my offering technique. The offer was neither accepted nor countered. We do not believe the Realtor even presented the offer to the Seller, a violation of New York State law. My client’s offer was very reasonable considering the market conditions, their seriousness as qualified homebuyers, and the fact the house needed $30,000 of updates. The Buyer used the offering technique to discern if the Seller was serious about selling the home. Clearly the Seller was not, or, as I suspect, the Seller’s Realtor was a substandard salesperson. The house is still on the market a month later. I guess the other “really good offers” just didn’t work out (if they existed at all).

My client, on the other hand, has gone on to find a superb and experienced Realtor after using my offering method to walk away from a good house with a bad situation.

Check out the article and you, too, can get the home you want at the price you want to pay. As I have often said around the internet after posting advice on one forum or another, “Hope that helps!”

The Miracle Rehabilitation Loan known as the FHA 203k Loan

A fundamental look at the miracle program known as FHA 203k.

So many Buyers today are eager to purchase homes at below market prices. Often these homes are in need of serious repairs or improvements to update the property. The 203k Program handily meets the needs of Buyers today. I personally have originated and closed dozens of these loans back
in the early 1990’s in Harlem and Bedford-Stuyvesant under President Clinton’s Inner City Rehabilitation Initiative. Often we were financing a complete gut renovation of an abandoned Single Room Occupancy (SRO) residence. The Buyers usually paid a price around $50,000 and I would find FHA 203k Financing in the range of $250,000 to cover the purchase and the renovations. Under the provisions of the rehabilitation, the Buyer of such an SRO would convert the Certificate of Occupancy from rooming house to legal 2, 3 or even 4 Family home. The 203k allowed for just such a change and the costs involved, including Architectural fees, Plans and Permits, not to mention the construction costs.

Toay this miracle program allows a Buyer to purchase a home and obtain the monies for repairs or home improvements all rolled into a single loan with a SINGLE monthly FIXED RATE payment. The repairs can cost as little as $5,000 or can run as high as necessary to gut-rehab a home. The limit on
the repair monies that can be included in the loan is the Loan-To-Value (LTV) Limit based on statutory FHA Loan Limits in your area (see below). And this LTV percentage is calculated based on the value of the house AFTER improvements.

The 203k program even has a provision allowing the Buyer to request that up to 6 months worth of mortgage payments be included in the loan so they don’t have to pay two monthly housing
expenses—rent and mortgage—while the house is under construction.

With more and more bank-owned “REO” properties offered for sale, Buyers will need the 203k
Program more than ever before.

203k Interest rates run higher than market, usually about 1% higher, but this is still an ideal program to help Buyers achieve their goals of homeownership while simultaneously updating or renovating a home for the lowest possible cost.

Highlights of the 203k Program:

>Buyer can obtain the cash needed to conduct improvements on a home
purchase folded into the same mortgage loan needed to purchase the house.

>Borrower must qualify according to regular FHA Underwriting criteria with regards to Income, Assets and Credit.

>The Program is only open to Owner-Occupants; no investors permitted. BUT you do NOT have to be First-Time Homebuyer.

>No Income Limits; no minimum income requirements. No geographic limitations, with the exception that the property is here in the good ol’ USA!

Purchase + Improvements = ONE Mortgage and ONE Monthly Payment

Current FHA LOAN LIMITS under the 2009 Stimulus Bill for the New York Metropolitan Region:

1Fam: $729,750

2Fam: $934,200

3Fam: $1,129,250

4Fam: $1,403,400

FHA Basics:

* No Reserves on 1 and 2 Family homes (but it helps!)
* 3 Months Reserves required on 3 and 4 Family homes
* 3.5% Downpayment
* 6% Seller’s Concession
* Credit Scores down to 620 (down to 580 with some Lenders)

There you have a good fundamental look at the miracle program known as FHA 203k.

Do you have questions?  Click on ASK TREVOR and I’ll respond to any and all inquiries, even if you’re not buying a home in
New York State.

Check out my Trulia profile HERE

Check out my Zillow profile HERE

Find me on TWITTER: @tcurranmortgage

Happy House Hunting!

FHA Is Good For New York

Given the high hurdles for potential purchasers to overcome with regards to credit and cash in the New York Metro Region, the FHA program eases the path to homeownership.

The FHA is the Federal Housing Administration, a division of the United States Department of Housing and Urban Development (HUD). The FHA has been one of the single best ways for homebuyers to purchase a home since its inception in 1934 under FDR’s New Deal.

FHA guidelines make the experience of homeownership more accessible to more people. The guidelines are designed in such a way as to provide Lenders with more flexibility. The FHA is an insurance program whereby the mortgage loan is insured by the United States government. Further, FHA is the only Federal agency that is totally self-funded; FHA does not take any taxpayer money!

Some of the many wonderful features of FHA Insured mortgage loans:

-Low downpayment requirements: 3.5% of the purchase price

-Purchaser’s can use more of their monthly income to qualify for a loan

-Downpayment can be 100% gifted by a family member or employer

-Credit score requirements are lower than for Conventional loans

-FHA Loans are fully assumable (subject to the new purchaser’s ability to qualify for the loan)

-A Seller can contribute up to 6% of a Purchaser’s closing costs. This is especially useful in the NY Metro region where closing costs average 6%. This allows a potential Purchaser to own a home with a substantially lower cash requirement than Conventional loans. (See Closing Costs In NY for more information about closing costs in NY)

1. Cash requirements lower: If a Purchaser obtains conventional financing with a 5% downpayment, the total cash required on a $475,000 Single Family purchase would be approximately $60,000 (downpayment, closing costs and 2 months PITI reserves). The same Purchaser using an FHA loan would need approximately $20,000 (3.5% downpayment; Seller can pay the Purchaser’s closing costs and no reserves are required).
2. FHA allows for a higher “Debt-To-Income” ratio. Also, FHA allows on a single family or condo that the Purchaser can have Non-Occupying cosignors from the Purchaser’s family assist in qualifying for the mortgage loan.
3. Credit scores lower: FHA does not have a credit score requirement. However, Lenders are permitted to overlay their own Underwriting criteria on FHA guidelines. Currently the credit score standard among most Lenders for an FHA loan is a minimum credit score of 620 (some Lenders go down to 580). For a Conventional loan with PMI (Private Mortgage Insurance) a Purchaser need have at least a 720 credit score.
4. Expanded Opportunity to Purchase: On any given day there are many people wishing to purchase a home who don’t have the money for a large downpayment PLUS closing costs. Living in New York is expensive. For the average New York family earning approximately $100,000 annually to save $60,000 is an extremely difficult undertaking considering the high housing expense and other high cost of living expenses. Saving a $20,000 downpayment is an easier exercise thus making the dream of homeownership more accessible.
5. After Purchase Marketability: The FHA Purchaser in today’s market is effectively locking in today’s interest rate for a future homebuyer in the resale of the home. For example, if a Purchaser of a Single Family home closed today at a 30year fixed rate of 5.375%, that purchaser/owner could conceivably resell the home seven years from now to a person who would assume the FHA loan at today’s rate. If rates are higher in the future, this makes for a more opportune marketing potential.

In conclusion, the FHA program surprises potential homebuyers with its accessibility. These are people who never thought they could own a home. Specifically to the New York market, given the high hurdles for potential purchasers to overcome with regards to credit and cash, the FHA program eases the path to homeownership.

More about FHA and where to find an approved FHA Lending Institution at The FHA Website.

Beware Using Non-FHA Approved Mortgage Brokers

Work only with an FHA approved mortgage broker with a Mini-Eagle or an FHA approved Lender with a Full Eagle.

Since the FHA Insurance program is pretty much the only way to get a mortgage these days, I’d like to caution you against working with any mortgage professional that is not approved by HUD to originate FHA Insured Loans.

The process of obtaining such an approval is difficult and expensive. When a mortgage broker is approved, the office receives what is known as a “Mini-Eagle.” The Mini-Eagle is the permission from HUD to originate FHA loans. A Direct Lender, approved by HUD, has a Full-Eagle.

As we become more and more aware of the excessive lengths some unscrupulous mortgage people will go to in order to make money without paying any attention to legalities, ethics, or professional conduct, we need also understand these same lowlifes will try to jump on any bandwagon in order to make a buck.

Fact is the regulation is in place to prevent anyone from jumping on the FHA bandwagon. That regulation is the Mini-Eagle and Full-Eagle.

FHA does allow in certain instances a Non-FHA Approved mortgage broker to recommend a client to a Full-Eagle Lender and to act as a consultant for the client. This permission is limited to consulting and the fee is limited as to how much the consultant can earn. The consultant is paid by you, the client. Consultant means exactly that: advice, counseling and consulting. The Non-FHA approved mortgage professional cannot originate the loan, cannot write the loan application or become involved in any aspect of the process for loan approval. For that you will work directly with the Lender.

Think of the Non-FHA approved mortgage person as a facilitator who connects you with a Lender, is available to answer your questions and offer advice on the program, but cannot do anything more than that.

Beware of the mortgage people walking around saying, “I can do FHA loans.” More often than not these lowlifes are not FHA approved and they plan on convincing you to doing a loan application with them for an FHA loan. “I’ll find an FHA Lender for you. Sign here.” This is ILLEGAL.

Further, this consultant doesn’t have any real standing in terms of accessing information about FHA products or interacting with the Lender to get your loan processed timely for an approval.

Why should you pay one of these people when you can easily find and work with an approved and experienced FHA mortgage professional?

These folks are just trying to take your money by joining in the current mortgage market opportunity without making the proper professional investment (in time and money) to obtain the proper licensing.

Work only with an FHA approved mortgage broker with a Mini-Eagle or an FHA approved Lender with a Full Eagle. You can find listings of both types of Mortgage Company in your area by visiting and entering your zip code.

Why You Need To Look At Your 401k Statement

One of the prime methods to getting a mortgage loan approval during the current mortgage-underwriting climate is proving you have reserves: those dwindling 401k accounts might be useful after all.

Mortgage Loans are difficult to obtain these days.  Underwriters at Banks are about the craziest I have ever seen in 20 years as a mortgage professional.  Arguments over the interpretation of an underwriting guideline—the kind I used to win back in the 90’s—are frequently Cold-War-style standoffs: there is no clear winner, you see it your way, and I see it mine.

Folks think Underwriting a mortgage loan application is some kind of objective exercise.  It’s not.  Underwriters are human and they are subject to the same day in and day out challenges all the rest of us humans face, with one difference.  If the Underwriter is having a bad day, or, in our current market, a BAD YEAR, that Underwriter is making obtaining a loan approval an impossible endeavor.

As a mortgage originator, I have to “pre-underwrite” each and every client’s situation.  I have learned to “roll with the punches” as it were to find strengths in any given loan application and help my client get the loan approval for the home they wish to buy or refinance.  I’m watching how Underwriters are reacting to market conditions or the directives they are receiving from their bank employers (too often confused and muddled) to gauge the best path to loan approval for my clients.

Thus I look for every little bit of ammunition I can find in order to fight the good fight when I’m prequalifying a client.

One nice bit of artillery is the ubiquitous 401k or retirement account.  Underwriters like “reserves” on a loan application.  Reserves is the money you have left over after closing on a mortgage loan; it’s the money you didn’t spend on downpayment and closing costs.  In the event you experience some life catastrophe in the future, like a job loss, you can use the reserves to pay your mortgage every month while recovering from said catastrophe (finding another job).

Reserves are required for two months’ worth of mortgage payments for Conventional (Non-Government) financing. The FHA does not require reserves for 1 or 2 family home financing; 3 and 4 family homes require 3 months’ reserves. Those are the guidelines, but let’s talk about getting your loan approved during the toughest mortgage underwriting era I’ve ever seen. Reserves count a lot; the more you have, the higher the probability of a loan approval, especially if your application is weak in any of the other areas of loan underwriting (IAC, or Income, Assets, Credit).

Often, my clients come to me for prequalification with their standard documentation in hand: paystubs, Tax returns, bank statements.  I always request but never seem to encounter proof of any retirement accounts, like 401k statements.  And when I ask my clients, “Okay, you don’t have the statement with you, but how much is in your account right now?”  I am often met with blank stares.

Folks just don’t know. Considering how much money they may have lost in those retirement accounts in recent months, they don’t want to know.

I understand a lot of us don’t want to face the bad news of dwindling retirement funds due to markets falling and investments failing.  But you need to open up that 401k statement if you’re planning on applying for a mortgage.  Those monies, eviscerated by market forces though they may be, can be very useful on a loan application.

In fact, I’d be so bold as to say that right now, one of the prime methods to getting a mortgage loan approval is proving you have reserves.  So get out those statements this chilly Sunday afternoon and face the music. Put your 401k statment together with your other documents you’ll need for the loan application.  Doing so might be the difference between getting a mortgage approval, or not.

FHA: Mortgage Solution for 2009

The FHA program was created to make it easy for families to acquire their own homes. I say this often these days, “The FHA is the ONLY game in town.”

When I started in the mortgage business in 1989 I was introduced to the FHA Insured mortgage loan. As a Mortgage Banker, the loans I made were typically FHA as this had long been the province of mortgage bankers in general.

During the Sub-Prime “Boom” I found myself often confronted with clients who, in my professional opinion, were prime candidates for FHA financing. The problem with the boom times and FHA was simple: there is a limit to FHA loan amounts, and during the boom, those limits were far below what was needed in the marketplace. FHA loan limits had not kept up with market price advances.

Now, the FHA limit here in the NY Metro region is $625,500 for a single family home. This is something we can work with.

The FHA loan program was created in 1934 during The Great Depression as part of the New Deal. The concept was simple: turn a nation of renters into a nation of homeowners. At the time, 70% of the United States population rented. The FHA program was created to make it easy for families to acquire their own homes. To this end, the FHA was spectacularly successful.

I like that there is so much rich American history associated with the FHA. I have always loved helping my clients obtain their dreams of homeownership with the FHA program. And I am thrilled that during these terrible economic times the FHA has once again come to the forefront to create possibilities of homeownership. I say this often these days, “The FHA is the ONLY game in town.”

And I like that.

I’ll write more about FHA, in the meantime, visit FHA’s website for more information about this wonderful loan program.

A New Hope…just like the Old Days

As a new sense of optimism sweeps into the housing market, the old-fashioned way of getting your mortgage comes once again into vogue.

There’s a feeling of hope we’re seeing from new clients; they want to buy homes. Monthly payment leads the day when it comes to determining if they can buy a home, not the rate, not the state of the economy, not the state of the housing market. And that’s just like the old days.

The hope is driven by the idea there will be a new President, a new administration, and a new attitude in Washington.

These people are coming out in the cold, looking at homes, asking questions, making offers and ultimately buying a home. Many of them are being qualified using another traditional mortgage “standard” the FHA Insured mortgage loan.

FHA has been around since The Great Depression and is still, in my humble opinion, the best way for a family to purchase a home. FHA financing allows for a more “human” understanding of a borrower’s qualifications; lower credit scores (not “deadbeat” credit, just the stuff life throws at you), lower cash required for downpayment (important in the NY Metro region where the cost of living and closing costs are so high), and the ability to use more of your income to qualify for the loan.

I’ve performed miracles using FHA loans throughout my career; and a lot of plain old boring loans that didn’t require a miracle, just a human touch.

FHA is a government insurance program; it’s not a bailout. The bank makes the loan, Uncle Sam insures it against foreclosure. So an old program comes into it’s own just in time. As a new sense of optimism sweeps into the housing market, the old-fashioned way of getting your mortgage—with some help from the government through the FHA—comes once again into vogue.

Yay for that.