This is the end. This is the end, my friend. Jim Morrison, The Doors
This is the end of MyMortgageInfo.net and the MyMortgaeInfo Blog. I am shutting down this web site so that all our web energies can be maximized at www.MetFund.com and our new portal, www.NorthernVirginiaHomeFinder.com.
I wouldn't be honest if I didn't say second thoughts and misgivings hadn't entered my mind. This was where I could rant and rave about the inconsistencies in the mortgage market. The inconsistencies between our fragile democracy and what free market capitalism has become. And in complete defiance of what the creators of this fine nation had in mind, the raising of corporate oligarchies on pedestals while individual rights suffer.
The challenge will be to put voice into effective action. Wish us all luck.
• No matter what is being said in the popular media and especially CNBC, credit for the mortgage markets is not getting better. Guidelines are tightening.
These are just a few of the recent changes for some of our lenders (please note that each change does not necessarily apply to all of the lenders we use):
1. Elimination of lending to partnerships, S-corps, LLCs or life estates;
2. One lender has stopped lending in California all together.
3. Maximum of 4 properties besides the primary residence (still, only one primary residence is allowed).
4. The security instrument or Deed of Trust here in Virginia, requires a pledge to use property as a primary residence within 60 days of purchase and "occupy the property as their primary residence for at least one year after the date of occupancy."
5. Borrowers are permitted to have only one second home.
6. If rental income from the subject property is used to qualify, the following requirements must be met:
Landlord History: Borrower must have a two-year history of managing rental properties. Two years tax returns are required for verification. Rent Loss Insurance: Property must have a minimum coverage of six months rent loss insurance. (with certain income strength we can get these requirements waived)
7. One lender has a max 70% LTV for investor 30 year fixed rate mortgages.
8. The applicant’s income must be reasonably expected to continue for at least the next three years.
9. An IRS-4506-T must be signed on all files. This gives the lender the ability to request copies of your tax returns directly from the IRS.
10. Handwritten pay stubs or W-2s are no longer acceptable.
11. Lottery winnings are still acceptable as long as you can expect to receive it for another 3 years.
12. For a self employed individual a profit and loss's income can be used for generating income history as long as it accompanies audited financials for at least one year and is consistent with that prior year.
Not a lot has changed but it is still changing and it is getting tighter - not less restrictive.
And for all that this article, Risk-taking is back for banks 1 year after crisis. So the risks are being taken, just not with mortgage origination.
• I believe Geithner said this in the first few moments of his town hall meeting. I was stunned. CNBC does not have transcript. Does anyone have a video recording to verify this?
He was head of the New York Federal Reserve. He should know the privately owned Fed was started in 1913, long before the last depression.
Transparency is the new buzz word flying around Capitol Hill and joint conferences dealing with new financial oversight legislation. With this push for transparency the dry and academic topic of financial literacy becomes all the more important.
Financial literacy is the individual's commitment to be aware of and responsible for all aspects of a contemplated financial transaction. This most certainly includes mortgages.
You can help yourself prior to the transaction by preparing to qualify for the best loan terms by investigating the following:
Examine Your Credit Scores. Find out what your current scores are and what can be done to improve them.
Set Realistic Expectations. If your credit scores are poor and you have little for your initial investment don't expect the best rate and terms. Should you already have good credit be sure to maintain those scores until the report is pulled for the purpose of getting your mortgage.
Study the FICO Web Site (www.fico.com). Review the information there and at www.MyFICO.com to see how the scoring principles apply to you. Having a revolving balance that is close to your high credit limit is a common problem. The biggest negative is not paying your minimum amount due on time.
Get Pre-Approved. You've taken the time and energy to become aware – now it's time for action.
Being financially literate makes you informed and optimistic. And it makes you a better consumer.
"US private debt is at a record high, somewhere around $44 trillion. Compared to that, the federal government's $11 trillion of official national debt doesn't seem so bad. And consider this: in addition to the fed's 'official' debt, there's some $100 trillion more of unfunded liabilities, commitments and obligations. Those are mostly things such as Social Security and health care commitments that the government has sworn to honor. If all those "debts" are put together...well, it comes to one helluva number - about $157 trillion of debt in America, or more than 10 times total annual GDP. Bill Bonner The Daily Reckoning
"US private debt is at a record high, somewhere around $44 trillion.
Compared to that, the federal government's $11 trillion of official national debt doesn't seem so bad.
And consider this: in addition to the fed's 'official' debt, there's some $100 trillion more of unfunded liabilities, commitments and obligations. Those are mostly things such as Social Security and health care commitments that the government has sworn to honor. If all those "debts" are put together...well, it comes to one helluva number - about
$157 trillion of debt in America, or more than 10 times total annual GDP.
Bill Bonner The Daily Reckoning
• Construction loans are beginning to falter reports the NYTimes. At the end of June about one in six loans were in default. The problems seem to be especially likely to rise for commercial real estate construction. Right now, Foresight Analytics, a research firm based in Oakland, CA, believes 10.4% of the loans are in trouble.
“On the commercial side,” said Matthew Anderson, a partner, “I think we are fairly early in the down cycle.”
• "I guess I ended up in the wrong career," said Mark Benson, 39, a restaurant manager in downtown Chicago. "It must be nice to work on Wall Street, when you profit you get a bonus, when your company fails you get a government bailout then a bonus.
"I'm all for free enterprise, it's what built America. But when Wall Street screws up so badly that the government has to print money to bail them out, I confess the bonuses they're still paying themselves make me feel sick." Reuters
• Virginia's Governor Tim Kaine may look back at his state's unique limitation to one term as a silver lining in otherwise hard times. Indiana's Governor Mitch Daniels' op ed in today's WSJ is a clear statement of the difficulties that lie ahead for state governments.
• According to government officials the Federal Housing Adminstration (FHA) has been hit by increasing mortgage related losses. It is in danger of seeing its reserves fall below the level demanded by congress. (WSJ)
• Glad to have a three day weekend in front of us. It will be One More Satirday Night...
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