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Home Buyers

Information and news for home buyers, especially first time homebuyers

Top two myths about Real Estate Agents

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With millions of web sites to look at for home for sale listing, it is becoming more and more common for people to feel they don’t need the help of a licensed Real Estate Agent.

More specifically, people seem to ONLY be calling listing agents for the properties you want to see. The thought behind this I suppose is “I can get a better deal if I don’t involve another agent and contact the listing agent directly.”

While the listing agent loves you only calling them, here is why is is usually a costly mistake for home buyers.

Myth # 1- I will get a better deal if I call the listing agent directly.

That listing agent is contractually bound to do what is in the best interest of the seller, and that means getting the highest dollar amount for the sale of the home. NEVER disclose your top dollar or financial ability to get a bigger mortgage loan to them because by law they have to go back to the seller with this information.

Remember…your goal is to pay as little as possible, while the seller’s agent’s goal is to get as much as possible for the seller. No matter what a Real Estate agent claims, this is a clear conflict of interest.

Myth # 2- I can find more homes for sale by calling more than one agent, or looking at multiple web sites.

The days of each real estate office having big books of only their companies listing are long gone. It is mutually beneficial for all Real Estate Agents to have all properties in the same database (call the MLS – or Multiple Listing Service)

All Real Estate Agents in the same area therefore pull the same list of homes available  for sale from the same multiple listing service database. Local agent sites typically interface with the local MLS site a minimum of once per day. If a new house for sale gets added today, EVERYONE local should have it listed tomorrow.

If you saw a home on Zillow, or some other national site, but that particular home didn’t come up in the local agent’s site, remember sites like Zillow & Trulia are NOT updated as often as the local MLS database real estate agents can pull from are. If it is not on the local MLS…  chances are the house that you saw has already been sold or is already under contract.

More importantly, the opposite is more often true. You find a home on a local real estate web site but NOT on the national sites. This is because some local companies do NOT report to the national systems. In my area (Minneapolis / St Paul, MN), the biggest player in the market (Edina Realty) recently stated they will no longer let their listing be show on the big national sites.  This means if you are looking at home for sale here, but on a national site versus a local site, you a NOT seeing over 20% of this areas listing!

The bottom line is the smart move for home buyers, and especially first time home buyers in MN and WI, is to use the services of a good, licensed local real estate agent in any home purchase transaction, and save yourself a lot of time by only looking at one LOCAL REALTOR web site.

Can you qualify for a mortgage with bad credit?

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Can you qualify for a home mortgage loan with bad credit?

FACT: The mortgage and credit crisis which exploded onto the scene in 2007 has eliminated bad credit and bruised credit mortgage loans. Lenders simply don’t offer bad credit sub-prime home loans anymore.

What’s Your Credit Score?
Every lending facility uses guidelines to determine your credit worthiness. Upon reviewing your application, you’re given a credit grade and a determination regarding your loan’s approval or denial. Lenders DO NOT give loans to those with bruised credit anymore. If you are denied by a one lender, contacting 10 more probably won’t help. Click here for some general criteria used within the lending industry to determine credit.

What credit score do I need for a home loan?
Generally speaking, in today’s mortgage world, if your middle credit score is below 640, it is very unlikely that you will qualify for home loan financing no matter what anyone tells you or you see elsewhere on the internet. With a score below this level, you really should save yourself the hassle. Stop attempting to find mortgage loans, and work on improving your scores instead.

Review your credit score?
If you are not sure what your credit score is, you should officially find out. Apply for the mortgage loan, and let the mortgage lender review your exact situation. DON’T ASSUME YOU CAN’T QUALIFY!

CREDIT PROBLEMS & ANSWERS

Late Payments
If your credit has multiple RECENT 30, 60, or 90 plus day late payments, you probably won’t qualify. Especially if those late payments occurred LESS THAN than two years ago. Lenders want a clean recent payment history. Check HERE for some general criteria used within the lending industry when you have late payments.

Credit score graphCollections, Judgements, Tax Liens
If your credit history indicates unpaid collection accounts, most “A” grade loan lenders will require these amounts to be paid off before the loan is funded. FHA typically will ignore them if they are under $500, and more than 2 years old. Medical collection “usually” are ignored. Judgments’ (you got taken to court & lost), are almost always REQUIRED to be paid off before approval.

Bankruptcy & Foreclosures

  • If your bankruptcy is more than two year old, you can usually be approved for an FHA loan with as little as 3.5% down.
  • If your foreclosure was recorded is OVER least three old, you may qualify for an FHA loan with as little as 3.5% down payment.
  • If your bankruptcy is older that 4 years, and you have good re-established credit, you may now qualify for an standard conforming loan.

    • High Debt Ratios
    If your income-to-debt ratios are too high, you can either reduce your personal debt (i.e., pay down your debt), obtain a debt consolidation loan, pay down your debt with funds from the sale of personal assets (boat, camper, etc.), select a lower interest rate ARM loan, or add a co-mortgagor. 

    Is a debt consolidation loan for you?
    If you have any late payments on your record, part of the reason may be because of high credit card debt. If you qualify, you can pay off all of your high-interest credit cards into a low debt reduction refinance loan which may be tax deductible (unlike credit cards, which are NOT tax deductible).

     

    What is your home worth? Find out for free

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    What is your home worth today? Wish you could get a free appraisal?

    Many homeowners are curious about the appraised value of their home. An actual appraisal is expensive, and county tax records do NOT always reflect true market value. As you may be aware, home values are constantly fluctuating, and with the decline in average values, it is important to have an accurate idea of what your home is worth.

    There are many sites that claim to give you are idea, including Zillow, Trulia, and more. It is also a well known fact those sites have very questionable data, giving values that range from close, to crazy far off. The big problem is, where is the data they use coming from and how accurate is it?

    There is a better free tool to answer the estimated appraised value of your home question. This system uses the Freddie Mac Home Price Index ( FMHPI ). FMHPI is calculated using a repeat-transactions methodology. Repeat transactions indexes measure price appreciation while holding constant property type and location, by comparing the price of the same property over two or more transactions. The change in price of a given property measures the underlying rate of appreciation because basic factors such as physical location, climate, housing type, etc., are constant between transactions. Averages of appreciation rates for different geographic areas and time periods are calculated using statistical regressions and the index values are derived from these averages

    While the estimate may not be the actual or appraised value of your property, it can be a much more accurate than Zillow to gauge fluctuations and trends in your market which affect your home’s value.

    CLICK HERE FOR A FREE HOME VALUE ESTIMATE (MN and WI properties only)

     

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    Mortgage Interest Rates about to go up due to new HIDDEN tax

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    All home mortgage interest rates are about to go up due to new hidden tax congress buried into all new mortgage loans.

    As part of the deal to extend a temporary reduction in payroll taxes, Congress last month approved a permanent increase in the fees borrowers pay on mortgages backed by Fannie Mae, Freddie Mac and the FHA.
    The increase is an annual charge of at least 10 basis points – equal to one-tenth of one percent of the loan amount. That’s equal to an additional $300 a year on a $300,000 mortgage, or an additional $25 a month. The increase is proportional, so a borrower with a $150,000 mortgage would pay another $150 a year, one with a $400,000 loan would pay an additional $400, etc.        LOCK NOW

    Watch the video from Frank and Brian to learn more, and be sure to COMPLAIN to Washington. Of course this is also a great time to mention the importance of who you select to be President…  DO YOUR HOMEWORK!

    Thanks Washington…  Nice move

    LendingTree Settles lawsuit over misrepresentations to consumers

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    Minneapolis, MN: Out-state online lender LendingTree must pay penalties to Charleston and Berkeley counties of South Carolina as part of a $3 million statewide settlement over misrepresenting “When banks compete, you win”.

    Ninth Circuit Solicitor Scarlett Wilson announced Wednesday the settlement with LendingTree. In 2008, Solicitor Wilson and other solicitors from across the state sued LendingTree for failing to make the required disclosures for mortgage brokers who do business in South Carolina.

    “LendingTree misrepresented to consumers their mortgage applications would be competitively shopped for the best rates,” said Solicitor Scarlett Wilson. “This led consumers to believe that LendingTree was working for them and not against them. Whether prosecuting criminals or bad corporate citizens, I’m going to use every option available to help protect the citizens of Charleston and Berkeley counties.”

    As part of the settlement, Charlotte-based LendingTree will pay more than $400,000.00 in statutory penalties to both Charleston ($284,447) and Berkeley ($121,904) counties as part of a more than $3 million statewide agreement.

    The South Carolina General Assembly passed laws protecting consumers that required mandatory disclosures from mortgage brokers. These laws require mortgage brokers to work for the borrower. At the time, LendingTree was using the slogan in their commercials “When banks compete, you win.‟

    “Despite this settlement of the statutory fines, the actual borrowers, who are not known to us, may be able to pursue their own claims for damages against Lending Tree.” said Solicitor.

    Contrary to what many home owner think, you really can NOT get anything better from some out-state online mortgage company than you can from your local Minnesota based mortgage lender.

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    How people find a Real Estate Agent

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    The two most important people in a real estate transaction is your Loan Officer, and your Real Estate Agent.

    Having an experienced person in these two positions will make for smooth, rewarding, successful transaction. So how do people pick this very important person?

    Referral by friend, neighbor or relative is the most commonly cited method sellers used to find their real estate agent.

    Thirty-nine percent (30%) of sellers used a referral to find their agent, and an additional twenty-two percent (22%) used an agent they had worked with before.

    The typical seller only contacts one agent during the selling process, further emphasizing the importance of personal relationships in real estate.

    Sixteen percent (16%) of sellers contacted two agents before selling their home and eighteen percent (18%) contacted three or more agents.

    Among recent sellers who used an agent, eighty-five percent (85%) reported they would definitely (69%), or probably (16%) use that real estate agent again or recommend to others.

    For buyers, the average person talks to 9 agents over the typical 9 month long period from the time they start thinking about buying a home until they actually close on a home.

    Mortgage Interest Rate Prediction for 2012

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    ST PAUL, MN: As the new year begins, there are no shortage of so called “experts” telling us what to expect for mortgage interest rates in 2012.  Mortgage interest rates closed out 2011 at some of the the lowest rates of all time. Some expect those interest rate trends to continue through the first quarter and beyond. Others expect a rapid increase in mortgage rates.

    Who’s right and who’s wrong? A quick look through the newspapers, websites and business television programs reveals “experts” with opposing, well-delivered views. It’s tough to know who to believe.

    For example, here are some predictions for 2012 :

    • Home prices will rise in 2012 (Freddie Mac)
    • Home prices will fall in 2012 (CBS News)
    • Mortgage rates will rise in 2012 (American Banker)
    • Mortgage rates will fall in 2012 (LA Times)

    The issue for buyers, seller, and those wishing to refinance their existing mortgage loans in Minnesota and nationwide is that for many people, it can be a challenge to separate a prediction from fact.

    When an argument is made on the pages of a respected newspaper or website, or is presented on some financial cable show by a well-dressed, well-spoken talking head, we’re inclined to believe what we read and hear. This is human nature. However, we must force ourselves to remember that any analysis about the future — whether it’s housing-related, mortgage-related, or something else — are based on a combination of past events and personal opinion.

    Remember, predictions are simply guesses about what might come next, nothing more.

    I am constantly amazed to hear politians, reporters, and other “so called experts” who have never written a mortgage loan ever in their life tell me how things work in the mortgage business. More annoying yet, is that are a lot these are the same people who makes the laws!

    DON’T HOLD OFF buying a new home or refinancing your existing home because some “expert” says interest rates may drop sometime in the future. Mortgage interest rates are CURRENTLY at all time historic lows. Forget the experts! Jump in today, take the deal, and smile!

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    New Condo Insurance rules put the squeeze on home buyers

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    Buying a Condo or Town Home? Better understand the insurance rules.

    Minneapolis, MN: Currently on Condominiums and attached Town home units (PUD), Fannie Mae requires insurance coverage of the lesser of 20% of the unit’s appraised value or replacement cost.

    HO-6 condo townhome insurance in MN
    Insurance Company for HO6 policy in MN - Click to Apply

    For applications dated on or after January 1, 2012, 100% replacement insurance coverage of the exterior and interior of condominiums, or attached PUD (Town home) units will be required.

    If the “master” or “blanket” policy for the condominiums or attached town home development does not provide full coverage of the interior or is a “bare walls” policy, then an individual HO-6 “walls in” insurance policy must be obtained to reach the full 100%  replacement requirement.

    The owners HO-6 policy must be sufficient to repair the interior of the unit, including any additions, improvements and betterments to its original condition in the event of a loss. The HO-6 policy is required to cover 100% of the insurable replacement cost of the unit’s interior improvements and betterments, including kitchen cabinets, lighting, flooring and plumbing fixtures. This updated insurance requirement will apply to all products and program types including Conventional Conforming, Non-Conforming, FHA and USDA Rural Development loans.

    Recent changes in “Fidelity Bond Coverage” has created huge problems on Condo and Town home financing, and this new insurance requirement is going to add another wall to financing these type of homes.

    The only saving grace is that for most people, a walls in HO-6 Condo or Townhome Insurance policy should only run +/- about $160 per year.

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    What does YOUR credit score say about you?

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    What does your credit score say about you?

    Everyday I am looking at credit reports, and making credit decisions. It amazes me sometimes the people who call and say they have good credit, when they don’t. It also amazes me the people who have good credit, and fear they can’t get a loan.

    So What’s Your FICO Credit Score?
    Every lending facility uses basic guidelines to determine your credit worthiness, including your FICO credit score. Upon reviewing your mortgage application, you’re given a credit grade and credit scoreand a determination regarding your home mortgage loan approval or denial.

    There are no hard-and-fast rules for determining your specific credit score grade.  Each lender’s criteria may vary slightly, but generally speaking, if you have a mix of credit type (mortgage, revolving, car loans), you have had it for awhile, and you make your payments on time. You have nothing to worry about.

    800 + Credit Score: AAA+ A credit score of 800 plus is basically flawless credit. This is usually obtained only with a long history of unblemished credit. You will get the best of the best anything credit related, from mortgage loans to car insurance. Scores in this bracket represent about 13% of the population.

    740-799 Credit Score:  AA+ A credit score of 740-799 is considered great credit, and will typically result in the best interest rates and approval rates for anything credit related. You have nothing to worry about if you scores fall in this category. In fact, roughly 27% of the population has a credit score of 750-799 alone.

    700-739 Credit Score: A+ A score in this bracket is considered good credit. Although it’s not perfect, you should still be able to qualify for most home mortgage loans and auto or rental leases. You may be offered a slightly higher interest rate than offered to borrowers with excellent credit for mortgage loans, credit cards, car insurance, and homeowners insurance.

    680-699 Credit Score: B+ Credit scores from 680 – 699 are considered average. You should never have any problems getting basic financing, but you are now in the area where you may pay a slightly higher rate, be required to have a bigger down payment, or be offered less favorable terms. There will be situations where a credit score in this range may prevent you from getting certain types of financing, such as an zero down mortgage loan, the lowest auto insurance premium, or a zero down car loan.

    620-679 Credit Score: C Credit scores from 620-679 are still considered “good” or “ok” by many creditors, though you may see further restrictions and fewer approvals when attempting to get a car loans, credit cards, or a mortgage. For example, you can still get an FHA mortgage with this score, but a lot of conventional loan lenders would deny you with a score below 660. Large numbers of people have score in this range.  It would be very wise to evaluate why your score is in this range and try to improve it. In this range, you are NOT getting the best deals in the market.

    580-619 Credit Score: D Credit scores in this range are bad, and clearly below average. If you are on the lower end of this range and someone asks, you can answer “I have bad credit“. You will have a difficult time securing a loan, or applying for a credit card. If you are able to secure financing, you’ll find higher interest rates for your low credit scores. If your credit score falls in this range, you definitely need to take a hard look at your credit report and take measures to raise your credit score. Many consumers with credit scores in this bracket are considered “subprime” and may have to work with bad credit banks and lenders to secure financing. You’re basically throwing money away at this point because of your poor credit.

    500-579 Credit Score: F

    No discussions, no glossing over it. Credit scores in this range are just flat out bad. If you’ve got a credit score in this range, there’s a good chance you have a major derogatory items on your credit report  such as as major late payments, court judgements, collections, foreclosure, or a bankruptcy. There is no question that your credit score is in need of serious credit repair. You will almost always be denied for credit with this score range, or pay such a premium for the credit, it usually is not worth it. You’re clearly paying higher interest rates and making credit mistakes that will impact your life for years to come.

    Below 500 Credit Score

    Credit scores below 500 are very bad. You almost have to get up everyday and ask yourself “how can I further wreck my credit today” to be in this category. You will usually have current, or very recent major issues, such as a bankruptcy or foreclosure. Improving credit from this level will usually take years to repair (but it can be done). Credit will universally be denied, and you will be paying a major premium on things like car insurance.

    FHA Extends Waiver of Anti-Flipping Regulations – Why it doesn’t matter in the real world

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    FHA Extends Waiver of Anti-Flipping Guidelines Through 2012.

    Minneapolis, MN: In an effort to continue stabilizing home values and improve conditions in communities experiencing high foreclosure activity, the Federal Housing Administration (FHA) will extend FHA’s temporary waiver of the anti-flipping regulations.

    With certain exceptions, FHA regulations prohibit insuring a mortgage on a home owned by the seller for less than 90 days.  In 2010, FHA temporarily waived this regulation through January 31, 2011, and later extended that waiver through the remainder of 2011.  The new extension will permit buyers to continue to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. It will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.

    The extension is effective through December 31, 2012, unless otherwise extended or withdrawn by FHA.  All other terms of the existing Waiver will remain the same.  The waiver contains strict conditions and guidelines to prevent the predatory practice of property flipping, in which properties are quickly resold at inflated prices to unsuspecting borrowers.

    Sounds great, BUT too bad it doesn’t really matter in the real world because of the difficulty in meeting the “strict guidelines” and lender overlays, MOST FHA lenders DO NOT offer this exception.

    Remember, FHA does not lend money, lenders do. FHA only insures loans lender make. Regardless of what FHA says they will “allow”, it is still up to the individual FHA lenders to decide their ultimate underwriting guidelines. Most FHA lenders find this exception too difficult to meet the strict guidelines, and too risky, so they simply WILL NOT ALLOW any FHA transaction less than 90-days.

    While we are talking FHA here, lender overlays also are common on Fannie Mae and Freddie Mac programs.

    The Waiver continues to be limited to sales meeting the following conditions:

    • All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
    • In all cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the Waiver will only apply if the lender meets specific conditions and documents the justification for the increase in value

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    Stop Renting – First Time Home buyer myths

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    STOP RENTING. No more excuses. Go buy a home!

    The housing market has changed dramatically, and everyone should be taking advantage of some of the most affordable home prices, and lowest mortgage rates in history. You may be hearing a lot in the news today that in some markets it is cheaper to own than it is do rent. It’s true!

    Stop listening to the doom and gloom drum beat the media plays. Bad news sell newspapers, so that is the spin they like to portray.

    Common myths and misconceptions may be holding you back but shouldn’t.

    • My credit is not the best at this present moment: OK then stop delaying and start on the path to improve your credit scores. The vast majority of people can turn bad credit to good credit in less than a year – IF YOU WORK ON IT.
    • I do not have money for a down payment. Did you know you can buy a home worth $100,000 with just $3500 down payment?   There are many acceptable sources of down payment. Savings, 401k retirement plan, sale something, tax refund, or even a gift from a relative.
    • I do not feel comfortable with the economy:  WHO DOES?  But you have to live somewhere, so make that somewhere a place of your own?
    • I don’t think I will qualify for a mortgage: It takes just a few minutes for a licensed mortgage Loan Officer to review your basic information. There are no obligations, and you are committing yourself to nothing by talking to a Minneapolis, St Paul, or Duluth MN area mortgage lender. It really isn’t  as scary as some people think being a first time home buyer.

    FED leaves Funds Rate Unchanged

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    THE FED LEAVES RATES UNCHANGED

    Minneapolis, MN: Today the FED (Federal Open Market Committee) voted to leave the Fed Funds Rate unchanged within its current target range of 0.000-0.250 percent.

    Mortgage bonds are mostly unchanged since the Fed’s announcement, giving mortgage rates in Minnesota and Wisconsinlittle reason to move significantly in any direction.

    Check live Minnesota Mortgage Insterest RatesWHAT IS THE FED FUND RATE? It is the interest rate at which a depository institution (Bank) lends immediately available funds (balances at the Federal Reserve) to another depository institution (Bank) overnight.  It has NO DIRECT BEARING on what you the consumer will get as a mortgage interest rate.

    WHAT ARE MORTGAGE INTEREST RATES BASED ON?  The primary answer is mortgage-backed bonds, better known as Mortgage Backed Securities (MBS). Bonds issued by Fannie Mae and Freddie Mac (MBS) and the trading performance of those bonds will determine the direction of mortgage rates. Finding the catalyst that causes mortgage bonds to move will give you the keys to finding out what makes mortgage rates rise or fall.

    Mortgage rates remain bouncing near all-time lows. If you’re thinking of buying or refinancing a home, it’s a good time to lock a great mortgage rate.

    In its press release, the Federal Reserve said that the the U.S. economy is improving, noting that since its November 2011 meeting, the economy has been “expanding moderately”. The Fed also added that domestic growth is occurring despite some “apparent slowing in global growth” — a nod to ongoing uncertainty in  Europe.

    The Federal Reserve expects a moderate pace of growth over the next few quarters, and believes that the jobs market will continue to improve, but slowly.

    Other potential soft spots within the economy include :

    1. A slowdown in business investment
    2. A “depressed” housing market
    3. Strains in global financial markets

    The Federal Reserve added no new policies at its December meeting, and made no changes to existing ones. It re-iterated its plan to leave the Fed Funds Rate within its current range of 0.000-0.250 percent “at least until mid-2013″ and re-affirmed “Operation Twist” — the stimulus program through which the Fed sells Treasury securities with a maturity of 3 years or less, and uses the proceeds to buy mortgage bonds with maturity between 6 and 30 years.

    Adjustable Mortgage Rates Hit New Low

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    Adjustable Mortgages Hit New Low

    Historically in the United States, adjustable rate mortgages have always accounted for a small portion of overall mortgage loan choices. During the boom a few years ago, they jumped up dramatically, but still held just a small portion of the market.

    Today, they hold an even smaller portion of the market share due to many factors, but most of them resulting from a misunderstanding, or lack of education on the borrowers part before taking one. For most people, they are considered too risky. Funny thing is, the rest of the world is just opposite. Almost everywhere else, the adjustable loan is the only product available, and if they offer a fixed rate loan, it is rarely over 20-years. The 30-year fixed exists primarily just in the United States.

    It might be time to rethink the adjustable loan, as the Monthly Treasury Average has just set another record low. A review of Federal Reserve data indicates that the MTA was just 0.19583 percent in November. It was the lowest level ever for the index based on data back to 1953.

    Today, we are seeing a spread of about 1.25% between a 30-year fixed loan and the most popular adjustable, the 5/1 ARM. On a $200,000 loan, that is about $130 per month difference.

    The MTA index is determined based on the daily average for the yield on the one-year Treasury note for each of the past 12 months. The one-year yield averaged 0.11 percent during November.

    Why is this important? Because adjustable loans all have a margin and an index. The margin is permanently set based on the loan, while the index can change. The lower the index, the lower your adjustable loan.

    If you currently have an adjustable mortgage loan, you should be very happy right now.

    FHA and IRS finally to allow Electronic Signatures

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    Amen…  FHA and the IRS decide to finally move into the 1980’s… in 2012

    The Mortgage Bankers Association said one of its recent priorities has been to get FHA and the IRS to finally accept electronic signatures, which both currently do not for mortgage related activities. Loan application documents, per FHA, must currently have wet signatures, which seriously slows down the loan process in the digital age.

    The IRS refuses to accept digital signatures on a mortgage loan application document called a 4506-T (also known as the Request for Transcript of Tax Return), which all lenders must get signed and send in to the IRS to verify a home loan applicants W2, or tax return income, for fraud. Because of this, many mortgage lenders have not moved to more efficient e-signature technology.

    It has been reported that  the Federal Housing Administration and Internal Revenue Service will begin allowing electronic signatures on FHA loan documents and the 4506-T form in 2012, according to the Mortgage Bankers Association.

    An electronic signature, or e-signature, is any electronic means that indicates either that a person adopts the contents of an electronic message, or more broadly that the person who claims to have written a message is the one who wrote it (and that the message received is the one that was sent). By comparison, a signature is a stylized script associated with a person. In commerce and the law, a signature on a document is an indication that the person adopts the intentions recorded in the document. Both are comparable to a seal.

    Increasingly, encrypted digital signatures are used in e-commerce and in regulatory filings as digital signatures are more secure than a simple generic electronic signature. The concept itself is not new, with common law jurisdictions having recognized telegraph signatures as far back as the mid-19th century and faxed signatures since the 1980s. In the United States, electronic signatures have the same legal consequences as the more traditional forms of executing of documents.

    Currently we use e-signature technology for our MN mortgage loan application documents on conventional loans, which people can just sign on their computers. Then we must send them the 4506-T separately to get a real signatures, seriously slowing down the application process, and increasing consumer costs. On an FHA loan, we must send everything out to the client for real signatures.

    Moving into the 1980’s, streamlining the application and processing of mortgage loans is long overdue, will reduce client costs, improve processing times, reduce lost paperwork, reduce signature fraud, and generally make the process more satisfying for everyone.

    UPDATE

    January 2014.  FHA finally has officially announce and OK’d electronic signatures on FHA Mortgage loan Applications effective immediately

    What do you know about your Mortgage Loan Officer?

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    What do you know about your Mortgage Loan Officer?

    All Mortgage Loan Officers are required to register with the Nationwide Mortgage Licensing System (NMLS) & Registry. The Registry assigns each Loan Officer a unique identifier number that stays with them throughout their career. Using this number you can review professional background information for a Loan Officer through the NMLS database prior to doing business with them.

    The display of an NMLS number tends to lead most people to believe all Loan Officers are licensed. This is far from the true. Only about 20% of Loan Officers are actually licensed, the rest are simple registered.

    Licensed Loan Officers are required to have pre-employment mortgage education, must pass criminal background checks, must pass a difficult Federal Licensing test, must pass a difficult State Licensing test in EACH state they wish to do business, and must complete yearly continuing education requirements.

    Simply registered Loan Officers could have been flipping burgers last week, and doing Loans today. While their employer may have some sort of internal hiring and training system, there are no mandatory state or federal licensing requirements, and no educational requirements.

    Now I am not saying that simply registered Loan Officers are bad people, but when you are working on the largest financial transaction of the average persons life, who would you prefer? Licensed or unlicensed? Another way to look at it is to assume you are sick. Sure, you can go online to WebMD, self-diagnose your illness, go to the pharmacy, buy a scalpel, and attempt self surgery. Or you can go to the Doctor.

    So how do you verify if a Loan Officer is Licensed or simply Registered? It only takes minute to find out.

    1. Simply go to www.NMLSConsumerAccess.org.
    2. Enter the Loan Officers Name, or their NMLS #
    3. Click on their name

    Scroll to the bottom of the page.

    • If it says STATE LICENSES/REGISTRATIONS, then lists one or more States – They ARE A LICENSED Loan Officer
    • If it says FEDERAL REGISTRATION, then says Federal Mortgage Loan Originator – They ARE NOT LICENSED.

    Licensed or simply registered? I think the choice is clear for smart homeowners.

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    Minnesota home sales jump higher

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    Minnesota Home sales jump dramatically higher

    Minnesota first time home buyersIt appears the things are changing in the housing market as Minnesota’s home sales shot up 24 percent in October from a year earlier.

    It appears the pent up housing demand, combined with historically low mortgage interest rates in Minnesota, and home prices that are (on average) about equal to 2002 values, has finally gotten home buyers off the fence.

    Another recent report indicated that first time home buyer numbers have begun to fall off as many of those people have already taken advantage of their buying opportunities, so who is buying the homes? Clearly move up buyers – those selling an existing home and buying something different have surged the last six months.

    Surpassing most areas of the state, sales in the seven-county metro area jumped 34 percent.

    For the sixth month in a row, statewide pending sales have increased, rising 33 percent versus October 2010.

    In October, homes were on the market an average of 120 days. Inventory is decreasing, with new listings down 10 percent versus October 2010.