Sunday, November 9, 2008

Re-Finance Program for Vets


For the past year or so, the economic condition of our nation has been splashed all over the Paper News Media, TV, Radio, the WEB and heck... I even think I saw a courier pigeon delivering some bad economic news the other day. Not really... but it has been nuts, not only on Wall Street but on Main Street as well.

We are always on the hunt for new finance platforms for our members and clients. Add... to that end, we have some really cool information to share with our Vets, active duty and retired in all branches who qualify for a VA Guaranteed Home Loan. This is a national finance tool that could help thousands, perhaps hundreds of thousands of Vets, who are stuck in adjustable rate sub-prime mortgages.

For our Vets!

There has been much ballyhoo over all of the economic stimulus packages that have been pushed through Congress over the past few months. But... there was very little fanfare given to one of the most useful VA Loan tools our nation has ever seen. Finally, Congress did something to help Vets... before they go down in flames.

Sponsored by Senator Daniel K. Akaka of Hawaii - House Armed Services Committee, in December 2007, the bill was originally simply a resolution supporting the goals and ideals of a National Medal of Honor and to celebrate and honor the recipients of the Medal of Honor on the anniversary of the first award of that medal in 1863. The original bill did not contain any provisions for VA Loan Modifications. However around May of 2008 Senator Akaka introduced S. 2961 a bill to amend title 38, United States Code, to enhance the refinancing of home loans by veterans. Finally in June of 2008 the bill was passed unanimously by the Senate and subsequently signed into law by President Bush on October 10th 2008.

So what is the new law? Simply put the new law states;

*** SOURCE
"...The new law makes changes to VA's home loan refinancing program. Veterans who wish to refinance their subprime or conventional mortgage may now do so for up to 100 percent of the value of the property. These types of loans were previously limited to 90 percent of the value.

Additionally, Congress raised VA's maximum loan amount for these types of refinancing loans. Previously, these refinancing loans were capped at $144,000. With the new legislation, such loans may be made up to $729,750 depending on where the property is located.

Increasing the loan-to-value ratio and raising the maximum loan amount will allow more qualified veterans to refinance through VA, allowing for savings on interest costs or even potentially avoiding foreclosure..."

Click here for a complete copy of the new VA Instruction Letter. (PDF format)

What a GREAT tool for our Vets to have at their disposal. Now... the next thing in my cross hairs is to see if Vets with mortgages that encumber the home for more than current market value, will be successful in getting the banks who hold those notes to release and discharge their debt and allow the Vet to secure a VA loan at the current market value. If this can happen, tens of thousands of Vets could finally find relief in this collapsing economy.


We'll report on more GREAT finance options for non-military buyers in our next post. Lori & G-II are licensed REALTORS® with Coldwell Banker Residential Brokerage. They can be reached by cell phone at either 602.574.5674 for Lori or 602.796.5674 for G-II or via eMail at mailto:Lori.and.G-II@RealEstateInPhoenix.net. If you would like to CHAT with us LIVE, simply
click the Goggle Talk icon.

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Saturday, April 26, 2008

FHA & VA Home Buyers Have A Golden Opportunity

Consider this; new figures out today on the continued housing market slump making news, yet again, with new construction brining in national number of an 8.5% drop in sales for the first three months of this year and the National Association of Realtors sites a continued lag in March 2008 real estate sales of just under 17% of the March 2007 figures. These numbers are equal to figures we saw over a decade and half ago, back in 1991. Your FOX 10 MLS-Experts have the right answers to help educate sellers about selling in today's real estate market environment. Buyers also need to learn why buying in today’s market is a good idea.

THE NEGATIVE

In April 2008, new underwriting guidelines were published to most, if not all, of the major lending investors, such as FlagStar, IndyMac, Provident, Countrywide, BofA, Wells Fargo and the other mortgage lenders, still in business (check out http://www.mortgageimplode.com/ where you can read about 252 mortgage lenders and/or investors that have gone out of business since the middle of 2006)

The major MI (Mortgage Insurance) companies, Genworth, MGIC, RMIC and Radian have all increased limitations on mortgage insurance requirements. The MI parameters are even more restrictive in markets that are characterized as “declining”. Oh yes… and BTW… Maricopa County, Coconino, Yavapai, Gila, Pinal, La Paz, Yuma, Mohave and Pima are all considered to be DECLINING markets.

MORTGAGE INSURANCE IS NOT AVAILABLE FOR THE FOLLOWING:

  • Any LTV (Loan To Value) with FICO below 620
  • Any LTV above 97%
  • All Stated Income Loans LTV’s over 95% with FICO below 680
  • Loans with potential negative amortization
  • Cash Out Refinances on Investment properties FICO less than 680 on LTV’s over 90% in a declining market
This means that purchases that do not fit the parameters above are INELIGIBLE for conventional insured loans.

Also in April, the Maricopa County Tax Assessor published his expected value window for properties, across the county. The Assessor is projecting devaluation of as high as 41% in the West Valley with an average devaluation of property values hovering around 15%.

THE POSITIVE

The Temporary Loan Limit Increase for FHA loans, passed by President Bush’s economic recovery act, has altered (only until December 31st 2008) the maximum FHA loan limit from just over $263,000 up to, in Maricopa County, $346,250. According to the Arizona Regional Multiple Listing system, nearly 70% of the homes that sold, and closed, within the past 150 days, sold for under $346,250. Only a micro-fraction of the closed transactions took advantage of the FHA loan platform. Single family residential home existing inventory currently hovers right around 57,000 units. Nearly 65% of that inventory will fit the FHA finance platform.

Even better news! About two or three years ago, FHA/HUD implemented a hybrid of the popular FHA 203(k) financing platform. Today, qualifying buyers and homes can take advantage of what FHA refers to as their FHA 203 “Streamlined (k) loan platform. These types of loans allow a buyer to finance up to $35,000 for minor repairs and upgrades and these repairs and/or upgrades can be completed AFTER the transaction closes.

The use of FHA loans has been dormant since the beginning of this millennium. With lenders tightening lending parameters for conventional loans, the “Govies” FHA and VA loans, are going to be the product of choice, a staple of the lending arena and a necessity.

FHA loans are not, in and of them selves, FICO driven, although many lenders are placing FICO requirements of not less than 620 on borrowers. Again, this FICO requirement is not HUD/FHA driven. It is simply lender’s, and major investors, showing their nervous feelings about lending any money to anyone who cannot demonstrate a somewhat solid credit worthiness.

VA loan limits, for Maricopa County, are currently set at $417,000 and… what most vets don’t know, is that the vet can use their VA loan privileges again and again, once the previous VA loan has been paid off. Additionally, many… if not most… vets don’t know that if they have used their VA loan privilege in the past and still have an active VA loan… if that existing loan has not consumed their entire VA entitlement of $417,000 they can use the balance to purchase a new/additional home with the remaining entitlement.

Please feel free to give us a call at (602) 796-5674 if you have any questions.

PS:
Feel free to eMail this post to your friends and family... and let them know that you learned about this at
www.GoAirForceHomes.info and Lori & G-IIs eTeam, aka Lori & G-II

Bye for now,

Lori & “G-II”

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