Your Fort Lauderdale Mortgage Banker Wants To Say “YES!”

The timing of this article couldn’t be better because my main goal going forward is to educate everyone involved in the real estate transaction about what is needed for a loan and how we as mortgage professionals don’t want to ask for it as much as a borrower doesn’t want to give it.  But it has to be done.

The sooner we all accept this the smoother the transaction will go.  It’s hard enough getting an FHA or Conventional loan in Fort Lauderdale and South Florida to have to add arguing back and forth about why something is needed.  There is a reason for everything, believe me.

Many don’t understand why a borrower’s tax transcripts are pulled and why it must be done or why they must be stamped by a local IRS office.  It’s because you can give me a tax return with higher income and get that return Amended or file a different return with less income and a larger tax refund.

Make sure to read this Blog post “Does Your Lender WANT to Say “Yes?”

Fort Lauderdale Mortgage Shopping

So many have been told and believe it is best to “shop around” for a mortgage and when doing that they are looking at the interest rate and closing costs.  Times have changed in my opinion and what might have been the case or what you are told doesn’t hold true today.  Just as at one point in time a credit score indicated a borrower’s willingness to pay and we have seen so many people with perfect credit stop paying their mortgages.

I have a friend who is buying a property outside of Florida and asked me to look over his estimate to make sure he is getting a good deal.  I looked at it and the rate was competitive and fair and the fees were normal.  He asked me if he should “shop around” and my question to him was whether or not he thought the person who gave him his estimate was knowledgeable and trustworthy.  He felt she was so I said there is no reason to call anyone else because it’s just going to confuse you and you are going to get stressed out having other people call you about your mortgage.

The next day he called me to tell me he called another mortgage professional and they said that the lender paid mortgage insurance counts as seller contributions and I explained that was not the case.   He helped to validate my point, calling someone else did nothing but confuse and stress him out.

I cannot stress enough how important this is.  There is so much more involved in a mortgage that you should be worried about then just your interest rate and closing costs.  It is even more difficult to determine what to do if you are trying to get a mortgage in Fort Lauderdale or South Florida because there is so much fraud.  That is all the more reason to follow my advice.

Luxury Home’s Market Report

I am a very visual person and I am sure many are too.  The link below has numerous charts that show how the luxury real estate market is doing.  I feel there is more liquidity coming back to the market for Jumbo mortgages (loan amounts above $417,000) which could be helping sales of these higher priced homes.

The supply of luxury homes is coming down, the percent of price decreases is stabilizing, etc.  Make sure to take a look at the charts of the different cities.  Miami isn’t looking too bad.  I know in Fort Lauderdale, Broward County, we are along the same lines as Miami due to the steep price reductions over the 12 months. 

http://www.luxuryhomemarketing.com/real-estate-agents/ILHM-Luxury-report.html 

A Million Dollars Gets You More Home Now

It is a good time to buy luxury real estate as the article below points out.  Prices are down substantially and you can get a lot more for $1 million than you could a couple of years ago.

“In the 20 largest U.S. metro areas, about 2,800 homes sold for more than $1 million in July — down by more than half from July 2005, according to MDA DataQuick. Nationwide, overall home sales  were down about 27 percent, according to the National Association of Realtors.”

http://www.msnbc.msn.com/id/33045568/ns/business-real_estate/ 

High End Homes Look Attractive

There are so many deals out there right now but the higher end homes have really come down in value.  Now you could argue that they were never worth what they were back in the boom but regardless the prices are very attractive. 

The luxury market is seeing a lot of price reductions.  Here are some very interesting statistics.  “Such homes only account for about 2% of the properties listed on the site, but represent 25% of the total price reductions by value. Overall, sellers listing homes for more than $2 million have dropped their asking prices by a total of $7 billion, with an average price reduction of 14%. The average for all properties tracked by Trulia is only 10%.”

Many people think it is hard to get financing on these properties because they fall into the Jumbo loan category which is above $417,000.  That isn’t necessarily true.  The only difference is that they require larger down payments and the rates are higher than market rates but are still very low compared to historical standards.  The reason for the larger down payments is because these properties do not sell as fast so if they foreclose it takes the bank longer to sell the property. 

http://online.wsj.com/article/SB10001424052970204488304574429311693264646.html?mod=rss_PJ_Main

Will The Government Start Buying Jumbos?

There are some good reasons why they should.  One of the great points the article makes is that people who are buying lower priced homes can do that with less than perfect credit and very little down when in the Jumbo market you have to have large down payments and perfect credit.  The one thing you need to keep in mind is that the more expensive homes don’t sell as quickly.  That is where some of the risk comes into play, the marketability. 

“The National Association of Realtors is lobbying the government to do just that, by purchasing mortgage-backed securities that consist of jumbos, which are too large to qualify for government backing from Fannie Mae or Freddie Mac. They’re pushing for the government to scoop up the securities through the Term Asset-Backed Securities Loan Facility, or TALF.”

http://blogs.wsj.com/developments/2009/05/15/should-the-government-start-buying-jumbo-mortgages/ 

Jumbo Mortgages, Jumbo Headaches

Jumbo loans have been a problem for quite some time now.  The loan to values are restricted, there isn’t much of a secondary market for them anymore, and the rates are not very good unless you are doing a 5, 7, or 10 year ARM. 

 

“President Barack Obama’s housing stability plan, announced last week, excludes such borrowers from nearly all of its mortgage-bailout provisions. Instead, it focuses on middle-income consumers who have lower, so-called conforming loans. Such loans top out at $417,000 in most parts of the country, though they can run as high as $729,750 in certain pricier markets, such as parts of California, New York and Hawaii.

 

Anything bigger is called a “jumbo” loan — and not only is the government ignoring this segment of the market, so are lenders, few of whom are originating or refinancing jumbo mortgages. The reason: Jumbo loans are too large to be guaranteed by a government-backed mortgage agency, such as Fannie Mae or Freddie Mac, meaning banks assume the risk if the loan goes bad. In the current lending environment, few banks want to take on any risk.”

http://online.wsj.com/article/SB123543726577454673.html?mod=todays_us_personal_journal 

Jumbo Mortgage Troubles

You have to love this article on how defaults are increasing on Jumbos.  The 3 banks that did the most jumbos were Chase, Wells Fargo, and Bank of America.  Chase’s CEO James Dimon states “We were wrong.  We obviously wish we hadn’t done it.”

 

A jumbo mortgage is a loan amount greater than the conforming loan limits for Fannie Mae and Freddie Mac of $417,000.

 

http://online.wsj.com/article/SB123310421416822271.html?mod=todays_us_money_and_investing