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Realtor Business Building

News and information to assist real estate agents build their business

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

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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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

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.

You DON’T need 20% down to buy a home!

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Do I need 20% down payment to buy a home?

I saw it again on the news this morning.  Some talking head “Real Estate Expert” was telling the national audience that lenders require 20% down payment.

Generally speaking, this couldn’t be further from the truth, and needing 20% down is a huge misconception in the marketplace today. For the average home buyer, there are numerous options for obtaining financing with less than 20% down.

DON”T ASSUME! Contact a local licensed mortgage loan officer and let them professionally review your individual situation. Click here to learn how to shop for a lender.

NO DOWN PAYMENT OPTIONS:

VA Financing – Here is a big thank you from the government. As a Vet, you are eligible for zero down payment, 100% financing on a home purchase. You either need to be an active or honorably discharged member of the armed forces or national guard. The seller can pay your closing costs and there is no mortgage insurance, saving you a lot of money monthly on your home. Click here for more information on VA home loans.

USDA/Rural Development – The Guaranteed USDA program offers zero down payment 100% financing for qualified borrowers purchasing a home in a rural area.  There are many locations just outside of major metropolitan areas that are eligible for this program.  The program has household income restrictions for their program, so Click here to see if the area you’re looking is USDA Rural Development eligible and if you income qualify.

LOW DOWN PAYMENT OPTIONS:

FHA Financing – FHA offers home loans with as little as 3.5% down.  FHA has no income limits for the household, but does have loan limits, based on the county in which you are purchasing the home.  Click here to check on the limits for your area.  FHA is one of the more lenient programs in regards to qualifying, and the down payment can be received as a gift from an eligible source (parents, state or local program, etc).

Local and State Bond Money Programs – Many states and even some larges cities have down payment assistance programs that can be used in conjunction primarily with an FHA loan. These programs vary widely, but if available in your area, are a great tool for those who qualify. Contact a local lender to inquire what programs may be available in the area you want to buy a home.

Conventional Financing – Fannie Mae and Freddie Mac both still offer programs with as little as 3% down.  For example, FannieMae offers HomePath financing on eligible FannieMae foreclosures.  For those with acceptable credit, many conventional loans are available with just 5% down.

WHO NEEDS 20% DOWN?

  • Investment properties typically require at least 20% down
  • JUMBO loans, which are loans generally over $417,000, generally require at least 20% down

Mortgage Payment Calculator App

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Wouldn’t it be nice to have a handy Mortgage Calculator App on your phone to quickly calculate payments while out looking at homes
or figuring out a refinance payment?

Realtors, wouldn’t it be nice to quickly calculate a payment for the client?

Never again will you have to guess your monthly payment when you’re shopping for homes because you can calculate your payment on the spot…even if you’re in the house you might want to buy! This calculator gives you the confidence you need to make a decision on the affordability of any house.

Install this Complimentary Smartphone app now to eliminate uncertainty that surrounds buying a home and pin point your monthly payment with laser-like focus.

USDA Rural Development loans to have PMI

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USDA loans in MN and WIIt is hard to move the economy, and especially the housing market forward when they keep making it more difficult and expensive to buy a home..

The USDA Rural Housing Loan will implement a new Annual (monthly) Fee of 0.30% charged on all loans with a Conditional Commitment issued on or after October 1, 2011. This fee will be added to the borrower’s monthly payment and will remain for the life of the loan.

One of the (now former) great benefits of the Rural Development Loan was the lack of mortgage insurance.

The initial Annual Fee, for the first year of the loan, will be calculated based upon the guaranteed loan amount (initial loan). For the remaining years of the loan, the Annual Fee will be calculated on the average annual scheduled unpaid principal balance of the loan, not the actual unpaid principal balance.

The good news is the Upfront Guarantee Fee will be reduced from 3.5% to 2% for purchase transactions. This fee can be financed into the loan amount with an LTV up to 102% or paid in cash.

The Upfront Guarantee Fee for refinance transactions will remain at 1%.

FHA 203k fix up loan in MN

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Found that dream home… but it needs a little work? Is it a fixer-upper?

The purchase of a house that needs repair is often a catch-22 situation, because the bank won’t lend the money to buy the house until the repairs are complete, and the repairs can’t be done until the house has been purchased.

The FHA 203(k) program can help you with the purchase or refinance of a property by allowing you to roll-in the costs of repairs and improvements up to 110% of the after improved value of the home with a minimum 3.5% down payment.

Download 203k handbook

 Who does 203k loans in MN?

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Technology for Realtors – Are you being left behind?

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Are you an old dinosaur Realtor, or do you use all of today’s advanced technology? Watch today’s video, then get you own free gift of technology for your iPhone, Blackberry, or Android phone from Joe Metzler at Cambria Mortgage.

Don’t risk losing your Real Estate License

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STOP risking your real estate license

Do you unintentionally give legal advice to your clients? Most real estate agents are very aware, and try to stay clear of giving any legal advice. Unfortunately, there are plenty of agents who have crossed that line, and are now facing plenty of headaches and lawsuits.

Have you ever instructed a client to stop paying their mortgage? You’ve given legal advice.

Legal advice is one thing… and rightfully most agents successfully avoid putting themselves in trouble, yet everyday they violate RESPA and the Truth in Lending (TILA) laws by giving mortgage advice.

Yes, mortgage advice. Punishable by a $10,000 fine and jail time!

If you have ever directed a client to a specific mortgage program? Maybe a program offered from “your guy” versus a program from another lender because you simply want to work with your guy versus the unknown loan officer??? Then you are walking a very dangerous line.

Have you ever given mortgage advice simply because you believe you are looking out for the customers best interests? Again, you are walking a fine line.

I have a mortgage originators license. I work 50 hours a week, and have for the last 17-years taking full applications, properly analyzing the clients financial situation, and directing them to the product that I believe best fits them. Even with that, a client can sue me for “putting them in the wrong loan.” You don’t have a mortgage license, and spend most of your time helping people buy and sell homes. Ask yourself. Do you really have any business giving mortgage advice?

The Real Estate Settlement Procedures Act, (RESPA) was enacted to help protect consumers when they buy and sell real estate, and to teach them to be better shoppers.

Prohibited practices for agents include many items. One of the most commonly violated section involves “shared expenses”. RESPA does not prevent joint advertising between two settlement service providers, such as a mortgage company and a real estate broker advertising their services on the same brochure or newspaper ad. However, each advertising party must pay for his share on a proportionate basis.

Another common violation has to deal kickbacks. Kickbacks of any kind are prohibited. Even small promotional items with the agent’s name on them can be considered a thing of value for the referral of business as it offsets the agent’s marketing expenses.

My advice? Learn the phrases “consult a lawyer”, and “consult a licensed mortgage professional” to avoid risking a legal headache and your license.

For more information regarding the Act, you can find it in Title I of the Consumer Credit Protection Act. The act is enforced by the Federal Reserve Board via Regulation Z (12 C.F.R. Part 226).

The newest NEW Good Faith Estimate for 2011

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On January 1, 2010, the government came out with a new Good Faith Estimate document for home buyers. The new document, supposedly designed to help consumers better shop for a mortgage, was and is a complete flop.

A year later, they are testing a new, new Good Faith Estimate from the new Consumer Financial Protection Bureau. You can give your input to the CFPB… Watch to learn how.

What do YOU think? Is this one a flop too? Post below!

Are you a pop tart agent?

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Are you a pop tart Real Estate Agent? Do you instantly jump when a new buyer calls? Stop wasting your time, set proper expectations. Is your buyer really pre-approved for a home mortgage loan? Learn more with Joe Metzler and Dave Harvey of Cambria Mortgage, and the MN Real Estate Daily Show.

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NAR fees are up, and I’m on a budget

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NAR fees are up, advertising costs are up, real estate sales are down, but as a Real Estate Agent, you need to find more clients, and you need to do it on a budget. Here are a few simple tools to increase your business and make more money from Joe Metzler at Cambria Mortgage, and the Mn Real Estate Daily Show.

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Zero Down Home Loans Are Back

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Zero down payment home loans are back. Actually, some of them never went away. VA and USDA Rural Development are two very popular home loan options. Learn more by watching this ROYAL performance… CG LIVE from London!

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