There has been a lot of commentary by industry experts on why a short sale is not better than a foreclosure in impact on your credit score.   The problem with the commentary is that the level of inconsistency in how the mortgage lenders are actually reporting short sales does make the short sale a better option from a credit scoring perspective than foreclosure, deed in lieu of foreclosure, or bankruptcy. To understand what is actually going on requires knowledge of the options available to mortgage lenders for reporting, and what is recommended that they report in ... << MORE >>

I'm embarrassed to say that for years I have taught credit scores impact employment and insurance rates in my first time home buyer classes. In the last 30 days I have learned that both statements are myths.

An insurance agent who attended my class corrected me and explained that:  two states completely prohibit the use of credit-based insurance scores (California and Massachusetts) and two ban its use for specific lines ...

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For anyone who attended the San Francisco Urban CHC first time home buyer seminar in October 2010, or for anyone interested in first time home  buyer information in general, go to this location and feel free to download any of the documents to help supplement the seminar.  Below is a list of the documents available for download.

 

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HUD will announce guideline changes on the single family residence lending program tomorrow, Wednesday, January 20th, 2010, that will dramatically affect the ability of low money down borrowers to purchase property.

The up front mortgage insurance premium (UFMIP) will be raised to 2.25%
Monthly Mortgage Insurance (MMI) will also be raised to amount unknown
Credit scores below 580 will now be forced to put down 10%
Seller contributions will be reduced to 3.5%

The biggest issue wil be the UFMIP. In prior years, ... << MORE >>

Attached are the recent documents from SF Urban's first time home buyer seminar in January 2010. I've added a few additional documents of importance.

The documents are here   They include...

Area Median Income for San Francisco County - Here are the area median income limits, updated last year in April 2009. These maximum income amounts define income limitations for below market rate units, limited equity program, and down payment assistance programs in San Francisco. The numbers should change in late March or early April.

Good Faith Estimate - The new ...<< MORE >>

 

 

For the first time ever, HUD has given a specific definition of exactly WHEN you must disclose to a consumer in writing, of the interest rate and closing costs associated with completion of an “application” with a mortgage broker or mortgage lender.   And this definition of time, of when a consumer is due information from a broker or lender about interest rate and closing costs, ...

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I’ve just finished my San Francisco first time home buyer seminar for the month of December. The class is imposed on those who want to qualify for those who want to purchase Below Market Rate (BMR) properties in San Francisco, or who want to qualify for the city of San Francisco down payment assistance programs available. You come to the class, or you don’t get a certificate which explained the large number of participants. I had few handouts to give, and promised to download additional information for those whose interest ...

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December 10, 2009

Two programs for the purchase of affordable housing exist in the city of San Francisco. One program is through the San Francisco Mayors Office of Housing (MOH), and the other is through the San Francisco Redevelopment Agency (SFRDA). Both agencies supervise affordable single family for sale called below market rate units (BMR).

Mortgage down payment loan assistance programs generally are reassessed at year end, as funds usually run out or run low. For BMR’s in San Francisco, the MOH has run ...

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What are the different types of property that I can buy as a first time home buyer under the City of San Francisco Mayors Office of Housing (MOH), and San Francisco Re-Development (SFRDA)
agencies Below Market Rate program (BMR)?

As a first time home buyer in San Francisco, you are limited to a one unit single family residence.  A single family residence is defined as real property that is an attached or detached
dwelling of 1 to 4 units suitable for a family.  2 to 4 unit properties are considered income producing properties as the additional units ...

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The city of San Francisco has two agencies that oversee the ability of current residents, and those employed in San Francisco County to purchase an inventory of affordable housing.  The two
agencies are the Mayors Office of Housing (MOH) and the San Francisco Redevelopment Agency (SFRDA).  The affordable housing properties are called below market rate units (BMR).

BMR’s consist of 1 unit single family residences, condominiums, and common interest developments (CID).  Other types of properties in San Francisco such as co-operatives, TIC’s and single
family residences consisting of more than 1 unit, are not allowed in the BMR, MOH, San Francisco Mayors Office of Housing, SFRDA, San Francisco Redevelopment Agency, affordable housing san francisco, MOH SF...

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Re: article - http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/11/07/REDA1AE0PH.DTL

I have a great deal of respect for many of your articles Mr. Harney, but your statement about the pending RESPA changes, "….in about eight weeks the situation should change dramatically" is just wrong.  Little changes except an increase in the amount of documentation required for review by the consumer and a perception that new legislation will give a white collar criminal pause when there is existing legislation in place that currently allows for criminal indictment and substantial penalties.  The mortgage banking lobby is voicing a great deal of concern over the pending ...<< MORE >>

With the 700 billion dollar bailout, H.R. 3221, and other pending legislation that hopes to help consumers in need of assistance out of Option ARM’s and subprime payment increases, it is easy to lose sight of what you can do with the tools you are given.  The biggest issue facing consumers in need of help now is not the lack of options, but who is making use of the options at each decision point.

Over the last 30 years, one of the more difficult loans to get approved as a consumer has been the assumption.  Let’s say you have a ...<< MORE >>

There is a process for originating mortgage loans that begins with the receipt of the guidelines for a new program.  HUD has begun that process for their new program HOPE for Homeowners by issuing a document called a mortgagee letter (here).  If you want to begin originating mortgage loans under this program, you must decipher the guidelines in this mortgagee letter and begin the process of making loans.

When I was a mortgage banker, long, long ago, we used to get a group of the staff together, have some pie, a little apple juice (usually Glenlivet or Macallan, that’s ...<< MORE >>

"No one has any money” was the statement I heard from a mortgage loan broker recently When you listen to the words, and read the paper currently, you would think that he was talking about the bankers.  He was not, he was speaking of the consumer When it comes to mortgage lending, there is no liquidity crisis What we suffer from currently is the demise of creative mortgage loan product.  If you have the money for the down payment there is a mortgage loan for you If you have equity in ...<< MORE >>

To lose your home to foreclosure is a nightmare experience that tends to stay with you years after the event.  During the foreclosure process, feelings of rejection, failure, and fear all confuse and disorient causing you to make bad decisions when the repercussions can affect your family for many years beyond the loss of your home.  The recent bill H.R. 3121 gives consumers more options in ways of getting out of foreclosure, or ways of avoiding foreclosure, but nothing is being offered to the consumer after the loss of their home.  What is unique in this malaise are the real ...<< MORE >>

The HOPE for Homeowners Act of 2008 The “HOPE for Homeowners Act of 2008” H4H part of bill H.R. 3221 took effect on October 1st, and many consumers, non-profit agencies, and lenders who see the possibilities implicit in its’ structure are hoping to help a great many consumers out of potential foreclosure using the program. H4H is now a HUD approved program, allowing approved lenders to make FHA-Insured loans. The biggest problem with the structure of H4H, is the lack of incentive for lenders to utilize the program on clients not in their own portfolio. For mortgage lenders, HUD is<< MORE >>

The basics you need to understand what it means to be a first time homebuyer<< MORE >>

MCC stands for Mortgage Credit Certificate. MCC is a federal tax credit that may be equal to 15% of the total mortgage interest deductible in a taxable year. The remaining 85% of the federal mortgage interest is deducted from gross income as usual. MCC is for first time homebuyers with low to moderate income. Rather than lowering your gross income which is the base number for how much you pay in taxes, a federal tax credit is a direct deduction from what you actually owe in taxes. ...<< MORE >>

Currently, the guidelines that allow lenders to make the loans necessary to help the people who can be helped out of the subprime quagmire, are in place.  With the exception of some tweaks proposed by Barney Frank (seemingly the only intelligent man in Congress who somehow has seemed to grasp the complexity of mortgage lending), tweaks that address the loss of equity with tax proposals for consumers, and benefits for lenders who are willing to take hits on existing product, the guidelines are unambiguously  loose enough, and tight enough, for mortgage lenders to make responsible decisions to help those who ...

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Fair Credit Debt Collection Act

How long does a collection account or charge off stay on your credit report?  The answer is as long as the debtor decides to place the debt on your credit report.  But legally, the bad debt can only stay on your credit report for 7 years (and at times an additional 6 months) from the initial date delinquency occured.  Creditors can and will keep bad debt on your credit report longer than legally allowable.  One method is to assign your account to multiple collection agencies.  Another is by putting erroneous information on your report that incorrectly ...

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I was contacted by Ms. P through an attendee of a first time homebuyer seminar that I was facilitating for SF Urban CHC.  At the time, Ms. P was working with another non-profit and had a loan pending approval through a depository institution referred by the non-profit.  Ms. P purchased her property in August 2003 with a

loan through New Century Mortgage.  Between 2003 and 2006 Ms. P’s monthly principal and interest payment increased 44%.  Upon my review of her loan documents I discovered; Between 2003 and 2006 Ms. P paid at least $48,000 in points and prepayment penalties ...

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HUD is currently floating proposals to lawmakers about rule changes in how lenders and brokers disclose closing costs and prepayment penalties. The goal appears to be an attempt at making the documentation easier for the consumer to understand, and harder for the lender or broker to confuse the borrower and pad their fees with excessive and unreasonable profit.

HUD is an arm of the Federal Housing Administration, and sets the national policy for lenders and brokers. A state can be tougher than HUD in its’ mortgage regulation, but not looser in compliance of federal law. California, as it turns out, ...<< MORE >>

Mark D invited me to an FHA Seminar on "Why FHA", a program for realtors, lenders, and brokers (seriously, brokers were allowed in the room... they were not allowed to drink coffee or eat food though).  A representative from HUD was there, and she was good.  Real good.  I was stunned.  The seminar was actually informative.

If you click here FHA Seminar on Thursday, February 21st, 2008 I have separated the seminar into 19 mp3 files for your listening pleasure.

Go to the seminar overview for a current breakdown of where the FHA modernization changes stand.  One of the holdups appears to ...<< MORE >>