7 Places Your 2013 Down Payment Might be Hiding

If buying a home is on your New Year's Resolution list for 2013, know this: your biggest challenge will almost certainly be coming up with your down payment and closing costs.

Whether you're trying to scrape by with 3.5 percent for an FHA loan or you're planning to put down a full 20 percent, saving for a down payment might be the largest savings endeavor you ever undertake, after retirement planning.

But don't let that daunt you. Look at it as more of a challenge or a game than a slow-slogging deprivation-driven chore. In fact, I suggest that you add something to your scrounging and saving: scavenging. Finding your down payment money hidden in resources that are right in front of you can be a fruitful and fun angle to take on an otherwise overwhelming goal.

Use this short list of oft-untapped down payment treasure troves to open your eyes to funds that might be hidden in plain sight:

1. Your budget's biggest line items. I like to get maximum bang for my buck. And I like to enjoy my life, too, so depriving myself of little luxuries without getting much mileage toward my goal is definitely low on my savings strategies list. But I've often found that if you take your top 10 or so monthly expenses, there are almost always at least one or two that you could slash significantly or totally do without, push come to shove: all without feeling as deprived as you would if you cut your daily coffee.

Home buying is one of those push-meet-shove-type situations. If you're serious about coming up with your down payment funds, sit down during your holiday off-days, and backtrack over your monthly budget (if you have one) or your last month's checking account statements. Isolate your top 10 budgetary line items and do an internal gut check on whether there is anything on this list that you can slash or eliminate.

If this seems obvious or silly to you, don't scoff before you give it a chance. I have seen buyers do this exercise and decide to:

•move home or to a cheaper place to eliminate rent

•go from two cars to one to eliminate a car payment

•cancel cable or switch cell phone service providers to get rid of a hundred bucks or more every month,

pressing fast-forward on their down payment savings and home buying plans by many months, even years.


2. Your bad habits. Have you heard yourself say - out loud or internally - I've got to stop:

•smoking

•drinking so much

•eating out so much

•eating so much junk

•watching so much TV

•drinking so many sugary coffee drinks

•impulse shopping

•OSUI: Online Shopping Under the Influence (it's a real thing - I promise!)

- or anything in that vein? Well, each of these are bad habits that cost. And because they are often engaged in compulsively, they can cost much, much more over time than you have any idea you're actually spending.

Again, far be it from me to suggest that someone who works hard every day shouldn't treat themselves to a coffee or lunch here or there. The fact is, if you deprive yourself too severely, there's a good chance your efforts to cut back and save will be very short-lived, and possibly even backlash into binging behavior. But if there's a habit you've been wanting to change for health or other reasons that also costs you a pretty penny, you might find it easier to make those changes when you know you're doing it in service of your vision of owning a home.

So, make a project of it. Figure out roughly what you're spending on your bad habit, and set up an automatic saving transfer from your checking account into your down payment savings account. Then, get and leverage some habit-changing resources, like those at ChangeAnything.com or in one of my favorite books this year, The Power of Habit: Why We Do What We Do in Life and Business. Then, when you feel the compulsion to engage in your bad habit, come to Trulia instead and peruse new listings in the price range and neighborhood of your own target dream home - that will help you stay on track by staying mindful of what's really important.

3. Your stuff. When you need to save money, there are really only two levers you can pull: you can spend less, or you can make more. Selling stuff you have and don't use or need is a relatively painless way to make more money to go toward your down payment. If you're really serious about home buying, put everything on the table.

I've known buyers-to-be who sold any and everything, including:

•cars and motorcycles

•clothes, costumes, shoes and handbags

•hobby-related gear (bikes, tools and even costumes)

•furniture and antiques

•and electronics, CDs and even books (think: TVs, computers, old smart phones, etc.)

to fund their down payment and home buying-related debt elimination plans.

Don't underestimate the amount of cash you can bring in from the stuff you already own. Millions of home owners worldwide are now renting out rooms or floors of their current homes for short periods of time on sites like Airbnb and VRBO. Sites like Getaround and Zimride allow you to rent out the extra seats in your car - or the whole vehicle, if you're not too faint of heart!

4. Your skills and time. One way to make more money, as discussed above, is to liquidate the things you have lying around. Another way is to get to work! Spend your off-time, your evenings and weekends leveraging your professional skills or personal hobbies to bring in some extra cash. A friend of mine recently had a savings target she was trying to reach and actually sent her whole circle of friends an email detailing (a) what she was selling and (b) what sorts of projects she was willing to do to get there - she earned well into the four figures, in less than a month.

Maybe you can sew or knit stuff to sell on Etsy, grow things in your backyard to sell at the farmer's market or, like one enterprising Mom I know, use your baking and cake decorating skills to monetize your kids' classmates' birthday parties. Or maybe you're more interested in cooking, house cleaning, babysitting or dog walking - in fact, another acquaintance of mine has earned thousands of "extra" dollars dog sitting while she works at home. If that sort of thing is not up your alley, think about whether you can help people you know with their small business projects, like research, bookkeeping or office organizing projects.

Once you get serious about coming up with your down payment cash and decide to be creative about where to find that money, using your skills and your time creatively is a power-packed way to open the financial floodgates. Consider starting out with a simple email to your circle of acquaintances or by listing your services on a site like TaskRabbit.

5. Your loved ones. Some folks are fortunate enough to have cash-flush loved ones who would love nothing more than to help you have a home of your own. The best case scenario is to have some idea of what sort of gift money you can count on as far in advance as possible, as it will impact your own savings targets and your lender's documentation requirements. If you have a parent, sibling or auntie who has mentioned their interest in giving you this sort of gift, it's not bizarre to bring the subject up, express your gratitude and let them know that you're planning to buy in 2013 so you can have a detailed conversation about logistics - including their financial, tax or estate planning pros, if it makes sense.

Alternatively, if your home buying plans are timed alongside your wedding plans, graduation plans or new baby due date, consider opening a down payment registry, so well-wishers can funnel their gift funds right into your real estate savings. For example, the federal Dpeartment of Housing and Urban Development (HUD) allows small gifts to be combined in a single savings account and eliminates otherwise onerous gift money documentation requirements with the FHA Bridal Registry program, which is available around weddings and "other legitimate occasions where substantial gifts are typically received by an individual or individuals."

Touch base with your lender and agent to see whether there are any registry programs that might make sense for your situation.

Finally, buyers who decide to team up with their BFFs, siblings, parents or other loved ones to buy a place they can jointly own and/or live in might be able to structure things so that they have to come up with less down payment money than they would otherwise - the co-buyer comes up with the rest! Think about whether this sort of arrangement might help you and your loved one accomplish your respective financial and real estate goals, in one fell swoop.

6. Your employer. Believe it or not, some employers actually offer down payment and other forms of mortgage assistance to employees. In particular, universities and governmental agencies that employ first responders who are required to live locally for their jobs (e.g., police, fire and other emergency personnel) often have housing assistance programs that can include down payment funds or access to mortgage programs with lower down payment requirements.

Even if you don't work for one of these sorts of agencies, if you are relocating for work, touch base with your HR department to find out whether there are any relocation benefits that can help you make up the difference between the cash you have and the down payment you need to make your move.

7. Your city, county or state. What you've heard is true: there are few, if any, down payment assistance programs still available on a national level. But many states, counties and cities offer their own down payment assistance programs, which are generally available to folks falling into one or more of the following categories:

•first-time buyers (people who haven't owned a home in the area in the last 3 years)

•buyers in low- or moderate-income brackets

•or those buying homes in a particular part of town.

Your mortgage pro and real estate agent should be able to help you track down any such local programs applicable to you. In fact, this is one great reason to touch base with them at the beginning of your down payment savings adventure versus waiting until the end. But make sure you read up on the programs extensively before you decide to opt into one. Many of them run out of cash over the course of the year, so shouldn't be counted on; others may require you to repay any assistance received if and when you sell or move - things you should keep in mind at the outset.

-Trulia

Contact Your Congressman

Last week I mentioned a couple of things that homeowners should contact their Congressman and/or Senator about.  That was the mortgage interest deduction and the deductibility of PMI.  Hopefully you have done that.  By the way, I just learned that only about 25% of the folks that could use these write offs actually take advantage of the write off.  Surely you don't want to give Uncle Sam more money than you have to.  I'm just sayin.

There is another bill that is expiring that really needs to be renewed.  If you know someone that is selling on a short sale or is or has been foreclosed on they are at risk.  The amount of loss is taxable income after Jan 1.  That is just piling on.  If someone could afford that tax they probably wouldn't have trouble keeping their home.  So I encourage you to contact them again.

Housing Market Comeback

By any measure, almost everyone would agree that the housing market is finally making a comeback.  It is an ideal time to buy if you have a need.  The prices are great (at least if you are buying) and the interest rates are even better.  The bottom line is that housing affordability is amazing.  You can buy much cheaper than you can rent in most cases.


Here is the problem.  Various groups in Washington are wanting to take away the mortgage deduction and not wanting to renew the deductibility of PMI.  And there are other issues that would hurt.  The country doesn’t need to do anything that hurts the housing industry.  We all know it has been difficult enough to get it back on the right track.  Please let your Representative or Senator know.

Condo Closing Fees

Last week I wrote about the problems with getting FHA approval for your condo associations. Today we address the fees that are charged at closing. I am told that the associations get some of them, but I think in most case the fees are accessed and kept by the management companies. One again the offenders are the large three or four management companies in Nashville. They have all kinds of creative names like transfer fees. But the bottom line is that someone's name is added to the roll and someone is taken off. The cost has to be almost nothing. I have seen $500 and more charged. I am sure they correctly believe they can do this and though they may grumble, no one walks away from the closing. These things should be addressed by the associations. That is my thought for the day.

Do you need or want to move?

Is it proving difficult to sell or are you upside down?

You have to be able to qualify for both payments, but you may be able to rent your present home and then buy a new one. So even if your present home is under water (so to speak) you may be able to get a great buy on a new one. You may be able to rent out the home for more than your total mortgage payment and have an investment that not only pays for itself, but pays you dividends every month for the next 30 years or more.

Your rental property will slowly build equity for you and can probably give you a tax advantage. For more details shoot me an email or call at 777-4663.

Why should one own a home?

Here are five reasons. Many people across our nation are finding their dream home, but many are still on the sideline in spite of record low interest rates and great prices on the potential new homes.


•Build Equity---You can build equity rather than pay for a home for your landlord. If you rent you are giving him your money to pay his mortgage. If you pay your own mortgage, you gain a little principal each month and in the long run the home should continue to grow in value.

•Predictability--- Other prices will go up over time. But the principal and interest portion of a fixed rate mortgage remains the same over time.

•Tax Breaks---You may deduct the interest and property taxes. Even energy-efficient upgrades may be tax deductible.

•Appreciation---Home prices are again rising. Over our history (though there have been some bumps) the long term trend is definitely up.

•Social Benefits---Homeowners generally rate themselves happier and healthier than their renting counterparts.

3.8% Tax: What's True, What's Not

Rumors about the 3.8% Medicare tax continue to circulate. Here's the definitive word on what's true and what's not on how the tax impacts real estate.

Ever since health care reform was enacted into law more than two years ago, rumors have been circulating on the Internet and in e-mails that the law contains a 3.8 percent tax on real estate. NAR quickly released material to show that the tax doesn't target real estate and will in fact affect very few home sales, because it's a tax that will only affect high-income households that realize a substantial gain on an asset sale, including on a home sale, once other factors are taken into account. Maybe 2-3 percent of home sellers will be affected.

Nevertheless, the rumors persist and the latest version that's circulating falsely say NAR is advocating for the tax's repeal. But while NAR doesn't support the tax (it was added into the health care law at the last minute and never considered in hearings), it's not advocating for its repeal at this time.

The characterization of the 3.8 percent tax as a tax on real estate is an example of an Internet rumor, says Heather Elias, NAR's director of social business media. Elias and Linda Goold, NAR's director of tax policy, sat down for a discussion of how the tax works and how Internet rumors work.

Goold says the tax will affect few home sellers because so many different pieces must fall into place a certain way for the tax to apply. First, any home sale gain must be more than the $250,000-$500,000 capital gains exclusion that's in effect today. That's gain, not sales amount, so you really have to reap a substantial amount for the tax to even come into play. Very few people are walking away with a gain of more than half a million dollars today, even in the high-end home market, so right off the bat only a few home sellers would be a candidate for the tax.

For the few households that do see a gain of more than the $250,000-$500,000 exclusion (that's $250,000 for single filers and $500,000 for joint filers), only the amount above the exclusion would be factored into the tax calculation, and that would still only apply to high-income households, which the law defines as single people earning $200,000 a year and joint filers earning $250,000 a year.

So, if you are a household with annual income of $250,000 or more and you earn a gain of more than $500,000 on your house (again, that's after the $500,000 exclusion), any amount of gain above the exclusion would be plugged into a formula to see if it's taxable. If it turns out that it's taxable, then the amount could be subject to the 3.8 percent tax. If the household had a gain of more than $500,000 but only earned $249,000 a year in income, the tax wouldn't apply.

(Note that these are just hypothetical examples. To know if a case would really be subject to the tax, a professional tax preparer or tax attorney has to look at all the particulars of the tax filer's case. Only a tax professional is in a position to say the tax is applicable, but the examples cited here could help you get a sense of how the tax works.)

The other thing about the tax worth noting is that, although it takes effect in 2013, any impact on taxes wouldn't happen until 2014. That's because the tax filer would do the calculation in 2014 for the 2013 tax year. Because it's not a tax on a real estate sale but rather on a capital gain, it's not calculated at the time of an asset sale, whether that asset is a house or something else. It's calculated at the time the filer figures his or her tax.

October 2012
By Robert Freedman

Know the pitfalls of refinancing....

The TV and radio ads make it all seem so easy. Walk into a lender's office, refinance your home loan at a rock-bottom rate, and walk out with a lower monthly payment.

Here's a little tip: It's not so easy.

If you know the pitfalls, you can at least prepare for them - and perhaps chart a wiser course. A few issues that could have your application earmarked for the ‘Rejected' pile:

1. Heightened credit score demands

If you're refinancing, that means you've successfully secured a home loan already. But since then, lenders have started to demand near-pristine credit scores. "Now to get access to the lowest rates, you need a FICO score above 740," says Keith Gumbinger, VP of mortgage information site HSH.com.

Not quite the perfect score of 850, but still quite challenging to achieve. Credit scorer FICO does not break out the average number for refi applicants, but the national average is 690 -- well below what will get you prime lending rates.

2. Low appraisal

While interest rates have gone down, so have U.S. home values. The average home value dropped a third from the start of 2007 to the start of 2012, according to housing analytics firm Fiserv. For refinancing, that's a problem.

Chicago's Jesse Raub and his wife have owned a home for about three years, and recently started the refi process. But then the appraisal came in low.

"Beware that the appraised value of your home may not be what you think it should be," says Raub, 27, who's a trainer and educator for Intelligentsia Coffee. "Our new mortgage amount was close to the total value of the home - which required us to get mortgage insurance as well."

3. A home equity line of credit

You may have forgotten that you once took out a home equity line of credit. You may have not even touched a penny of it. But it could still derail a refi, because it means another lender has a claim on the value of the home.

"If you're refinancing your first mortgage, the lender of the home-equity line has to agree to that," says Mike Fratantoni, vice president of research for the Washington, D.C.-based Mortgage Bankers Association.

Essentially, that lender needs to sign off on being second in line, and agree that the primary mortgage will always be paid off first (in the event of a foreclosure, for instance). "There may be fees associated with that, and so a home-equity line of credit is one more thing that could make a refi more difficult."

4. Condo or co-op troubles

If lenders are going to fork over hundreds of thousands of dollars, they don't want any issues to make them nervous. And when the property is subject to decisions of an unpredictable board of directors, that can make them nervous.

"Any number of issues might trip you up," says Gumbinger. "If the building finances aren't in good shape, or if the insurance isn't paid up, or if there are any units in foreclosure, or if there are any lawsuits against the condo association, or if the building is comprised largely of renters. All kinds of fun stuff can arise."

5. Timeliness requirements

Banks want to see the most up-to-date financial information possible before they sign off on a mortgage. But they also have a tendency to ask for document after document after document regarding your financial situation. If the refi process has ballooned to 60 or even 90 days, but they require documents from the last 30 days, that could put you on a carousel of paperwork straight from the ninth circle of hell.

So get out your yoga mat, breathe deeply, and have a mantra ready. You're going to need lots of patience. "Expect the worst," advises Erin Lantz, director of the mortgage marketplace for real estate site Zillow.com. "If you come to terms with that at the beginning, it will remove the stress later on."

(Follow us @ReutersMoney or finance/personal-finance">here Editing by Beth Pinsker Gladstone)
By Chris Taylor; NEW YORK; Sat Oct 13, 2012 9:00am EDT


Yes, at MIG have these issues too. But we know what we are doing and routinely get our clients closed in 20 - 40 days. Call or reply to this email if we can help.

Consumer Financial Protection Bureu Proposes New Rules

Have you ever heard, "I am from the government and I am here to help you."? (Yeah right) Anyway here is what is coming. Maybe it will be ok?

Consumer Financial Protection Bureau proposes rules to bring greater accountability to mortgage market

Rules Would Help Consumers Understand Mortgage Costs and Comparison Shop

WASHINGTON, D.C. - Today the Consumer Financial Protection Bureau (CFPB) proposed rules that would bring greater accountability to the mortgage loan origination market. These rules, which the CFPB is seeking comment on and will finalize by January 2013, would make it easier for consumers to understand mortgage costs and compare loans so they can choose the best deal.

"Consumers have a hard time comparing loans when they are dealing with a bewildering array of points and fees," said CFPB Director Richard Cordray. "We want to provide consumers with clearer options and enable them to choose the loan that they believe is right for them."

The Dodd-Frank Wall Street Reform and Consumer Protection Act places certain restrictions on the points and fees offered with most mortgages and the qualification and compensation of loan originators. Most notably, without this rulemaking, the Dodd-Frank Act would prohibit payment of upfront points and fees for most mortgages even where a consumer prefers a loan with a lower interest rate and some upfront costs. The CFPB is seeking public comment on a proposal that would:

• Require Lenders to Make a No-Point, No-Fee Loan Option Available: It is often difficult for consumers to compare loans that have different combinations of points, fees, and interest rates. Under the proposed rule, creditors would have to make available to consumers a loan without discount points or origination points or fees, unless the consumers are unlikely to qualify for such a loan. These options would enable a consumer buying or refinancing a home to better compare competing offers from different creditors, better able to compare loan offers from a particular creditor, and decide whether they would receive an adequate reduction in monthly loan payments in exchange for the choice of making upfront payments.
• Require an Interest-Rate Reduction When Consumers Elect to Pay Upfront Points or Fees: Consumers can pay points, which are expressed as a percentage of the loan amount, and fees to covers costs associated with origination or prepaid interest charges. While these points and fees come in many different names and combinations, they all should function similarly to reduce the interest rate and thus a consumer's monthly loan payments. The CFPB is seeking comment on proposals to require that any upfront payment, whether it is a point or a fee, must be "bona fide," which means that consumers must receive at least a certain minimum reduction of the interest rate in return for paying the point or fee.

In addition to regulating upfront points and fees, the CFPB is proposing changes to existing rules governing mortgage loan originators' qualifications and compensation. Mortgage loan originators, who take mortgage loan applications from consumers seeking to buy a home or refinance a mortgage, include mortgage brokers and loan officers. The rules the CFPB is proposing would: 

• Set Qualification and Screening Standards: Under state law and the federal Secure and Fair Enforcement for Mortgage Licensing Act, loan originators currently have to meet different sets of standards, depending on whether they work for a bank, thrift, mortgage brokerage, or nonprofit organization. The CFPB is proposing rules to implement Dodd-Frank Act requirements that all loan originators be qualified. The proposal would help level the playing field for different types of loan originators so consumers could be confident that originators are ethical and knowledgeable. The proposed rule includes: 
• Character and Fitness Requirements: All loan originators would be subject to the same standards for character, fitness, and financial responsibility;
• Criminal Background Checks: Loan originators would be screened for felony convictions; and
• Training Requirements: Loan originators would be required to undertake training to ensure they have the knowledge necessary for the types of loans they originate.
• Prohibit Payment of Steering Incentives to Mortgage Loan Originators: In 2010, the Federal Reserve Board issued a rule that was designed to curtail the practice of loan originators directing consumers into higher priced loans based not on the consumer's interest, but on the possibility that the loan originator could earn more money. The Dodd-Frank Act included a similar provision banning the practice of varying loan originator compensation based on interest rates or other loan terms. The CFPB's rule would implement the Dodd-Frank Act provision and clarify certain issues in the existing rule that have created industry confusion.
• Place Restrictions on Arbitration Clauses and Financing of Credit Insurance: The proposal implements Dodd-Frank Act provisions that, for both mortgage and home equity loans, prohibit including mandatory arbitration clauses in loan documents and increasing loan amounts to cover credit insurance premiums.  

The CFPB has engaged with consumers and industry, including through a Small Business Review Panel, and used this feedback in developing the proposed rules. The Bureau believes that today's proposal, if adopted, would promote stability in the mortgage market, which would otherwise face radical restructuring of the current pricing structure in order to comply with Dodd-Frank.

The public will have 60 days, until October 16, 2012, to review and provide comments on the proposed rules. The CFPB will review and analyze the comments before issuing final rules in January 2013.

  

An overview of the proposal is available at: http://files.consumerfinance.gov/f/201208_cfpb_detailed_summary_of_proposed_loan_originator_rules.pdf

The proposed rules are available at: http://files.consumerfinance.gov/f/201208_cfpb_tila_mlo_compensation_proposed_rule.pdf

The SBREFA Panel report on the outreach with small servicers is available at: http://files.consumerfinance.gov/f/201208_cfpb_LO_comp_SBREFA.pdf

Who is left to refinance?


Plenty of folks, per the number crunchers at CoreLogic. Putting aside the question of, "What will a world of 3.5% 30-yr borrowers look like in five years?" there are still oodles of homeowners with rates in the 5% and 6% range who could benefit. "Roughly 69% of American homeowners with mortgages at the end of the second quarter had rates of 5% or higher and about 33% of them had rates above 6%, according to detailed mortgage data provided to The Times by Santa Ana research firm CoreLogic."

-Terry O'Donnell

I know there are many people who have tried but various problems keep them from refinancing.  If I haven't talked to you about it shoot me an email or call at (615) 777-4663 and we can discuss it. 

Fee Increase to Impact Home Loans

The Federal Housing Finance Agency (FHFA) has again increased the guarantee fee they charge to lenders delivering loans to Fannie Mae and Freddie Mac. This is important to know, as this increase has a rippling effect that will impact the cost of mortgage financing.

Here's what's happening and what it means to home loan rates:

What exactly is this "g-fee"? The guarantee fee or "g-fee" is an amount charged by mortgage-backed securities (MBS) providers, like Freddie Mac and Fannie Mae, to help protect against credit-related losses in the overall mortgage portfolio. In other words, it acts a lot like insurance and helps lower the overall risk...which means home loans can be offered at terrific interest rates to borrowers that have good – but not perfect – credit.

What exactly is the impact of the rate increase? The increase will impact loans with different amortizations in different ways. For example, for a $200,000 home loan, the increased g-fee (assuming a .125% increase in rate) would equate to $250 more per year in interest, or $7,500 more over 30 years. Someone buying or refinancing a home can certainly choose to buy down the cost with cash up front – but most folks will not do this.

Why is the guarantee fee being increased? FHFA has increased the guarantee fee to collect more revenue to enhance the safety and soundness of the Government Sponsored Enterprises (GSEs), and perhaps indirectly encourage private firms to participate in the mortgage market.

Who will this impact? The change will impact all new borrowers using Fannie Mae and Freddie Mac loans.

When will it start? Officially, the increase to guarantee fees will begin on December 1, 2012. However, Fannie Mae will also be making adjustments to pricing for those loans that are committed on or after November 1, 2012. It’s important to note that the increase is already being seen in rate sheets right now, since home loans being originated now will likely not be closed, pooled and securitized until December and therefore will need the increased g-fee priced in earlier.

The bottom line is that the g-fees will be going up...and this will impact homebuyers looking to obtain a home loan through Fannie Mae and Freddie Mac.

~Mortgage Market guide

P.S. I am told that most if not all companies have already reflected this is this in their pricing. And as you know the rates are still amazing. But bottom line it is another case where big government is getting paid by you and you probably didn’t even realize it.

Learning To Use Credit Wisely

While we were driving back to Nashville, we listened to the “Dave Ramsey show”, which I haven’t done in a while. I think he does a tremendous amount of good, except if you follow him completely you will wind up without a credit score. He teaches folks to live without credit and I believe people should learn to manage credit.


He does that because there are a lot of people who will never manage it. They fall victim. So credit may be  similar to addiction to alcohol, gambling or tobacco. You just learn to use it, not abuse it.

He also talked about all the good people trying to talk to the major mortgage servicing companies about missed payments, late payments, short sale approvals and the like. He used their names which I will avoid. He points out that the person receiving the calls hates their job and for the most part doesn’t want to be there. That is probably why they aren’t there the next time you call. They found a better job and moved on, leaving you to talk to someone who could care less. He just says to keep trying, but lower your expectations. And if they tell you you have to be late or skip payments, don’t listen. You just hurt yourself more in the long run.

If you want someone to talk to, to find out if you have options, please give me a call at 615-777-4663 or send me an email at george.margrave@migonline.com, I am here to help in any way I can.

Meet Our Newest Team Member

This week I am pleased to announce that I have added a new member to my team.  You may know him from past times at MIG.  He is David Baker.  It will be his job to do everything that will make our clients continue to believe that no one can give better service than the George Margrave team at MIG.  He comes in with experience with a lot of the things he needs to know.  The rest he will pick up quickly. Welcome him when you get a chance.  You can reach us at 615-777-4663.

Fannie Mae, Freddie Mac Issue New Short Sale Guidelines

by:  Sorohan, Mike; MBA NewsLink

The Federal Housing Finance Agency yesterday announced new standard short-sale guidelines to be used by Fannie Mae and Freddie Mac.

The guidelines to Fannie Mae and Freddie Mac mortgage servicers are designed to align and consolidate existing short sales programs into one standard short sale program. The streamlined program rules will enable lenders and servicers to qualify eligible borrowers for a short sale more quickly and easier.

The guidelines, which go into effect Nov. 1, will permit a homeowner with a Fannie Mae or Freddie Mac mortgage to sell their home in a short sale even if they are current on their mortgage if they have an eligible hardship. Servicers can expedite processing a short sale for borrowers with hardships such as death of a borrower or co-borrower, divorce, disability or relocation for a job without any additional approval from Fannie Mae or Freddie Mac.

Key components of the new guidelines:


• Offer a streamlined short sale approach for borrowers most in need. To move short sales forward expeditiously for those borrowers who have missed several mortgage payments, have low credit scores and serious financial hardships the documentation required to demonstrate need has been reduced or eliminated.


• Enable servicers to qualify certain borrowers who are current on their mortgages for short sales. Servicers will be permitted to process short sales for borrowers with certain hardships, such as death, divorce or other life change, without additional approval from Fannie Mae or Freddie Mac, even if the borrowers are current on their mortgage payments. Borrowers would qualify for a short sale if they need to relocate more than 50 miles from their home for a job transfer or new employment opportunity.


• Deficiency judgments. Fannie Mae and Freddie Mac will waive the right to pursue deficiency judgments in exchange for a financial contribution when a borrower has sufficient income or assets to make cash contributions or sign promissory notes. Servicers will evaluate borrowers for additional capacity to cover the shortfall between the outstanding loan balance and the property sales price as part of approving the short sale.


• Service member guidelines. Service members who are being relocated would be automatically eligible for short sales, even if they are current on their existing mortgages, and will be under no obligation to contribute funds to cover the shortfall between the outstanding loan balance and the sales price on their homes.


• Consolidate existing short sales programs into a single uniform program. Servicers will have more clear and consistent guidelines making it easier to process and execute short sales.


• Provide servicers and borrowers clarity on processing a short sale when a foreclosure sale is pending. The new guidance will clarify when a borrower must submit their application and a sales offer to be considered for a short sale, so that last-minute communications and negotiations are handled in a uniform and fair manner.


• Second lien holders. Fannie Mae and Freddie Mac will offer up to $6,000 to second lien holders to expedite a short sale. Previously, second lien holders could slow down the short sale process by negotiating for higher amounts.

FHFA announced guidelines in June that establish strict timelines for servicers considering short sales, part of a broader effort known as the Servicing Alignment Initiative, to streamline Fannie Mae and Freddie Mac programs for short sales and other foreclosure alternatives to assist struggling homeowners.

The programs being aligned are Fannie Mae’s Home Affordable Foreclosure Alternative and proprietary short sale programs and Freddie Mac’s HAFA and proprietary short sale programs. The current Fannie Mae and Freddie Mac HAFA programs are modeled on the Treasury Department’s Home Affordable Foreclosure Alternative program, but with this guidance, there will be one program offered by Fannie Mae and Freddie Mac, known as the Standard Short Sale/HAFA II.

“Short sales have become an increasingly important tool in preventing foreclosures and stabilizing communities,” said Leslie Peeler, senior vice president with Fannie Mae. “It is vital that servicers, junior lien holders and mortgage insurers step up to the plate with us. These new guidelines will open doors to help more homeowners qualify for short sales, remove barriers to completing short sales and make the process more efficient for homeowners and servicers.”

TN Closing Costs Are Average for U.S.

Origination and title costs on a $200,000 mortgage averaged $3,754 nationwide, down 7.4 percent from 2011, based on Bankrate's annual survey. Origination fees declined 1 percent; while title and closing costs shrank nearly 12 percent. For the third straight year, New York had the highest closing costs at $5,435, followed by Texas at $4,619 and Pennsylvania at $4,467; while Missouri, Kansas, and Colorado had the lowest closing costs at $3,006, $3,193 and $3,199, respectively.

The average closing cost on a $200,000 mortgage in Tennessee in 2012 is $3,747 (in line with the national average) -- $1,587 for origination fees and $2,160 for title and closing costs.

Bankrate.com surveyed up to 10 lenders in each state in June 2012 and obtained online good faith estimates for a $200,000 mortgage to buy a single-family home with a 20 percent down payment in the state's largest city. Costs include fees charged by lenders, as well as third-party fees for services such as appraisals and title insurance. The survey excludes taxes, property insurance, association fees, interest and other prepaid items.

To see results for the entire U.S., go to: http://www.bankrate.com/finance/mortgages/2012-closing-costs/closing-costs-by-state.aspx

[SOURCE: Bankrate.com]

Call me at 615-777-4663 or email me at george.margrave@migonline.com .

Check out our credit tips at www.youtube.com/teammargrave

MIG Took 4th Place in TN in Market Share Gain

• Statewide Market Share Gain—MIG took over the 4th place in statewide market share for the first 6 months of 2012. AND we are only $25M behind SunTrust to move up another position. I feel confident that we can pull it off in the next 6 months.


• Great Customer Survey Responses for June—we had our highest response rate yet with 24% of closed loans responding. My personal belief is that customers respond to “satisfaction surveys” when the experience is really great or really poor. The fact is proven in our rising response rate. I would put these results up against any competitor in the state.

• Survey responses

o 98.4% rated the LO good or excellent

o 100% rated the processor good or excellent

o 96.1% stated documents were ready on time

o 96.9% stated clear where to make first payment

o 97.6% expected or better than expected overall experience

o 97.6% good or excellent total experience

o 97.6% would recommend MIG to others

~~~From Steve Smith

You can reach me at 615-777-4663 or via email at george.margrave@migonline.com if you would like to find out what we can do for you or to chat about these numbers.

Mortgage Insurance

This week's topic is so important, but it makes some people's eyes glaze over. It is Mortgage Insurance. It is rare that a loan is made (that does not show 20% equity or down payment) and you don't see mortgage insurance. It is probably the most important thing to talk to me about when you call about a mortgage. It may be more significant than the interest rate. With all the defaults in the housing industry we have seen huge changes in MIP, PMI, Funding Fees, Guarantee fees etc. The only plus is PMI (which is the conventional loan version) is showing signs that are positive. For it you need 5% of your own money or equity and 720 plus credit scores. If you have that I can show you how to save money. But if you don't, it isn't worth waiting . You might miss these great interest rates.



Call me at 615-777-4663 or email me at george.margrave@migonline.com to discuss your options.

The housing market has turned—at last.

The U.S. finally has moved beyond attention-grabbing predictions from housing "experts" that housing is bottoming. The numbers are now convincing.

Nearly seven years after the housing bubble burst, most indexes of house prices are bending up. "We finally saw some rising home prices," S&P's David Blitzer said a few weeks ago as he reported the first monthly increase in the slow-moving S&P/Case-Shiller house-price data after seven months of declines.

Nearly 10% more existing homes were sold in May than in the same month a year earlier, many purchased by investors who plan to rent them for now and sell them later, an important sign of an inflection point. In something of a surprise, the inventory of existing homes for sale has fallen close to the normal level of six months' worth despite all the foreclosed homes that lenders own. The fraction of homes that are vacant is at its lowest level since 2006.

The reduced inventory of unsold homes is key, says Mark Fleming, chief economist at CoreLogic, a housing data-analysis firm. For the past couple of years, house prices have risen in the spring and then slumped; the declining supply of houses for sale is reason to believe that won't happen again this year, he says.

Builders began work on 26% more single-family homes in May 2012 than the depressed levels of May 2011. The stock of unsold newly built homes is back to 2005 levels. In each of the past four quarters, housing construction has added to economic growth. In the first quarter, it accounted for 0.4 percentage points of the meager 1.9% growth rate.

"Even with the overall economy slowing," Wells Fargo Securities economists said, cautiously, in a note to clients, "the budding recovery in the housing market appears to be gradually gaining momentum."

Economists aren't always right, but on this at least they agree: A new Wall Street Journal survey of forecasters found 44 believe the housing market has reached its bottom; only three don't. (The full results of the Journal's July survey will be released at 2pm ET)

Housing is still far from healthy despite the Federal Reserve's efforts to resuscitate it by helping to push mortgage rates to extraordinary lows: 3.62% for a 30-year loan, according to Freddie Mac's latest survey. Single-family housing starts, though up, remain 60% below the 2002 pre-bubble pace. Americans' equity in homes is $2 trillion, or 25%, less than it was in 2002 and half what it was at the peak. More than one in every four mortgage borrowers still has a loan bigger than the value of the house, though rising home prices are reducing that fraction slowly.

Still, the upturn in housing is a milestone, a particularly welcome one amid a distressing dearth of jobs. For some time, housing has been one of the biggest causes of economic weakness. It has now—barely—moved to the plus side. "A little tail wind is a lot better than a headwind," says economist Chip Case, the "Case" in Case-Shiller.

From here on, housing is unlikely to drag the U.S. economy down further. It will instead reflect the strength or weakness of the overall economy: The more jobs, the more confident Americans are about keeping their jobs, the more they are willing to buy houses.

"Manufacturing had led growth and construction had lagged," JPMorgan Chase economists said last week."Now the roles are reversed: Manufacturing growth has slowed as private construction comes to life."

Plenty could go wrong. The biggest threat is a large shadow inventory of unsold homes, homes which owners won't put on the market because they are underwater, homes that will be foreclosed eventually and homes owned by lenders. They have been trickling onto the market, slowed in part by government efforts to delay foreclosures; a flood could reverse the recent rise in prices. Or the still-dysfunctional mortgage market could get worse. Or overly zealous regulators or a post-election change in government policy could unsettle mortgage lenders or home buyers.

But the housing bust is over.

Write to David Wessel at capital@wsj.com or you can contact me at george.margrave@migonline.com or via telephone at 615-777-4663.

Chill Out with Ceiling Fans

In 24 hours, a standard central air conditioning unit can burn through a great deal of electricity. In the same amount of time a ceiling fan’s electric expense is less than a dime. Running a ceiling fan at medium speed for three hours costs just a penny! In fact, most ceiling fans only use about as much power as a 100W light bulb.


Air conditioning accounts for more than 15 percent of the energy use of the average home. Using ceiling fans—especially during hot summer months—can conserve energy and save money.


The spin on savings.  Fans work like wind chill: they help your body stay more comfortable in higher temperatures. Using fans to stay cool in the summer allows you to set your home thermostat higher without sacrificing comfort, allowing you to save up to 40% on cooling costs.



Installing and maintaining.  Ceiling fans are relatively inexpensive (some models sell for less than $50). Many homeowners find fan installation an easy DIY project, especially if an electric ceiling box is already present. For maximum energy savings, be sure to keep your fans in good working order by cleaning the blades regularly. You can also eliminate wobbling and squeaking by keeping your fan well oiled and balanced. Then, sit back and enjoy the breeze!


Fan smarts.

• Ceiling fans will only cool you, not the room, so don’t leave fans running in empty rooms.

• In the summer, make sure fan blades are turning counterclockwise, which will circulate cool air downward.

• Fans will only save you money if you set your thermostat higher as a result of fan use. Running ceiling fans and the air conditioner at full blast will only increase your energy bills.


Want even more information on how your ceiling fan can save you money? ENERGY STAR has great advice that can help you with just that.



From American Home Shield.  If you would like to get more information about buying a home, please contact me at 615-777-4663 or contact me via email at george.margrave@migonline.com

OUR NATIONAL ANTHEM....IN GOD DO WE TRUST!

Uness you know all four stanzas of the Star Spangled Banner you may find this most interesting. Bet most of you didn't realize what Francis Scott Key's profession was or what he was doing on a ship. This is a good brush-up on your history.

NO REFUGE COULD SAVE
BY DR. ISAAC ASIMOV


Editor's Note- Near the end of his life the great science fiction author Isaac Asimov wrote a short story about the four stanzas of our national anthem. However brief, this well-circulated piece is an eye opener from the dearly departed doctor.....


I have a weakness -- I am crazy… absolutely nuts, about our national anthem. The words are difficult and the tune is almost impossible, but frequently when I'm taking a shower I sing it with as much power and emotion as I can. It shakes me up every time.


I was once asked to speak at a luncheon. Taking my life in my hands, I announced I was going to sing our national anthem -- all four stanzas. This was greeted with loud groans. One man closed the door to the kitchen, where the noise of dishes and cutlery was loud and distracting. "Thanks, Herb," I said.


"That's all right," he said. "It was at the request of the kitchen staff."


I explained the background of the anthem and then sang all four stanzas. Let me tell you, those people had never heard it before -- or had never really listened. I got a standing ovation. But it was not me; it was the anthem.


More recently, while conducting a seminar, I told my students the story of the anthem and sang all four stanzas. Again there was a wild ovation and prolonged applause. And again, it was the anthem and not me.


So now let me tell you how it came to be written.


In 1812, the United States went to war with Great Britain, primarily over freedom of the seas. We were in the right. For two years, we held off the British, even though we were still a rather weak country. Great Britain was in a life and death struggle with Napoleon. In fact, just as the United States declared war, Napoleon marched off to invade Russia. If he won, as everyone expected, he would control Europe, and Great Britain would be isolated. It was no time for her to be involved in an American war.


At first, our seamen proved better than the British. After we won a battle on Lake Erie in 1813, the American commander, Oliver Hazard Perry, sent the message, "We have met the enemy and they are ours." However, the weight of the British navy beat down our ships eventually. New England, hard-hit by a tightening blockade, threatened secession.


Meanwhile, Napoleon was beaten in Russia and in 1814 was forced to abdicate. Great Britain now turned its attention to the United States, launching a three-pronged attack.


The northern prong was to come down Lake Champlain toward New York and seize parts of New England.


The southern prong was to go up the Mississippi, take New Orleans and paralyze the west.


The central prong was to head for the mid-Atlantic states and then attack Baltimore, the greatest port south of New York If Baltimore was taken, the nation, which still hugged the Atlantic coast, could be split in two. The fate of the United States, then, rested to a large extent on the success or failure of the central prong.


The British reached the American coast, and on August 24, 1814, took Washington, D.C. Then they moved up the Chesapeake Bay toward Baltimore. On September 12, they arrived and found 1,000 men in Fort McHenry, whose guns controlled the harbor. If the British wished to take Baltimore, they would have to take the fort.


On one of the British ships was an aged physician, William Beanes, who had been arrested in Maryland and brought along as a prisoner. Francis Scott Key, a lawyer and friend of the physician, had come to the ship to negotiate his release.


The British captain was willing, but the two Americans would have to wait. It was now the night of September 13, and the bombardment of Fort McHenry was about to start.


As twilight deepened, Key and Beanes saw the American flag flying over Fort McHenry. Through the night, they heard bombs bursting and saw the red glare of rockets. They knew the fort was resisting and the American flag was still flying. But toward morning the bombardment ceased, and a dread silence fell. Either Fort McHenry had surrendered and the British flag flew above it, or the bombardment had failed and the American flag still flew.


As dawn began to brighten the eastern sky, Key and Beanes stared out at the fort, trying to see which flag flew over it. He and the physician must have asked each other over and over, "Can you see the flag?"


After it was all finished, Key wrote a four stanza poem telling the events of the night. Called "The Defense of Fort McHenry," it was published in newspapers and swept the nation. Someone noted that the words fit an old English tune called, "To Anacreon in Heaven" -- a difficult melody with an uncomfortably large vocal range. For obvious reasons, Key's work became known as "The Star Spangled Banner," and in 1931 Congress declared it the official anthem of the United States.


Now that you know the story, here are the words. Presumably, the old doctor is speaking. This is what he asks Key:


Oh! say, can you see, by the dawn's early light,
What so proudly we hailed at the twilight's last gleaming?
Whose broad stripes and bright stars, through the perilous fight,
O'er the ramparts we watched were so gallantly streaming?
And the rocket's red glare, the bombs bursting in air,
Gave proof thro' the night that our flag was still there.
Oh! say, does that star-spangled banner yet wave,
O'er the land of the free and the home of the brave?

"Ramparts," in case you don't know, are the protective walls or other elevations that surround a fort. The first stanza asks a question. The second gives an answer:


On the shore, dimly seen thro' the mist of the deep,
Where the foe's haughty host in dread silence reposes,
What is that which the breeze, o'er the towering steep.
As it fitfully blows, half conceals, half discloses?
Now it catches the gleam of the morning's first beam,
In full glory reflected, now shines on the stream
'Tis the star-spangled banner. Oh! long may it wave
O'er the land of the free and the home of the brave!


"The towering steep" is again, the ramparts. The bombardment has failed, and the British can do nothing more but sail away, their mission a failure. In the third stanza, I feel Key allows himself to gloat over the American triumph. In the aftermath of the bombardment, Key probably was in no mood to act otherwise.


During World War II, when the British were our staunchest allies, this third stanza was not sung. However, I know it, so here it is:


And where is that band who so vauntingly swore
That the havoc of war and the battle's confusion
A home and a country should leave us no more?
Their blood has washed out their foul footstep's pollution.
No refuge could save the hireling and slave
From the terror of flight, or the gloom of the grave,
And the star-spangled banner in triumph doth wave
O'er the land of the free and the home of the brave.


The fourth stanza, a pious hope for the future, should be sung more slowly than the other three and with even deeper feeling:


Oh! thus be it ever, when freemen shall stand
Between their loved homes and the war's desolation,
Blest with victory and peace, may the Heaven - rescued land
Praise the Power that hath made and preserved us a nation.
Then conquer we must, for our cause is just,
And this be our motto --"In God is our trust."
And the star-spangled banner in triumph doth wave
O'er the land of the free and the home of the brave.


I hope you will look at the national anthem with new eyes. Listen to it, the next time you have a chance, with new ears. Pay attention to the words. And don't let them ever take it away .. not even one word of it.


AND IT'S SUNG IN ENGLISH!!!

Realtors Report Surge in Contract Signings in May

The National Association of Realtors’ leading indicator of future home sales rebounded in May after an unexpected downdraft in April.


The Realtors reported Wednesday that its pending sales index jumped nearly 6% in May back to 101.1, the same level in March and the highest this year.


NAR's pending sales index is based on signed contracts, which usually translate into actual sales in a month or two.


Overall, the PSI is up over 13.3% from a year ago.


“The latest increase in home contract signings marks 13 consecutive months of year-over-year gains,” NAR chief economist Lawrence Yun said.


“Actual closings for existing-home sales have been notably higher since the beginning of the year and we’re on track to see a 9% to 10% improvement in total sales for 2012,” he added.


NAR economists are forecasting that existing home sales will total 4.66 million by yearend, up from 4.26 million in 2011.




They also expect the national median existing-home price to rise 3% this year and another 5.7% in 2013.


Give me a call if you want more information or just want to chat about how we can help you. 615-777-4663 or just shoot me an email at george.margrave@migonline.com

Outlook for a Housing Market Recovery

 Home prices may well find a bottom this year, and stronger sales should pave the way for a pickup in single-family construction over the course of 2012.

That’s the assessment made by Harvard University’s Joint Center for Housing Studies (JCHS) in its recently released “State of the Nation’s Housing” report. The report - which has been released since 1988 - is an essential resource for both public policy makers and private decision makers in the housing industry.

The bottom line of the report is that - after several false starts - there is reason to believe that 2012 will mark the beginning of a true housing market recovery.

 

However, employment growth remains a key factor, providing the stimulus for stronger household growth and bringing relief to some distressed homeowners. And, if the broader economy weakens in the short-term, the housing rebound could again stall.

 

Here are just some of the findings in the report:

 

• The monthly mortgage payment for the typical home currently compares more favorably to rents than at any time since the early 1970s.
•  
• By the first quarter of 2012, existing home sales were 5.2 percent above year-earlier levels, with single-family sales up 6.3 percent.
•  
• Sales of newly constructed homes in the first quarter of 2012 stood 16.7 percent above year-earlier levels.
•  
• The inventory of existing homes for sale shrank by some 23 percent in 2011, reducing the supply in the first quarter of 2012 to its lowest level since 2006.
•  
• Single-family permitting, a leading indicator of starts, was also up 16.9 percent in the first quarter of 2012.

The complete report provides a current assessment of:

 

• The state of the housing market and the foreclosure crisis
•  
• The economic and demographic trends driving housing demand
•  
• The state of mortgage finance
•  
• Ongoing housing affordability challenges

 

You can download the full report from the JCHS’s website. You can also download a convenient handout of Key Housing Industry Facts from the website.

 

 

 

~~Mortgage Market Guide

 

 

 

New FHA Streamline Loans...worth the wait!

FHA has finally done something good. There are lots of folks that bought their homes in the 2000 to May 31, 2009 timeframe that have not been candidates for refinancing. The reasons are usually one of these.


1 The new FHA MIPs made the numbers much worse than they should have been.

2. They owed more than their home was worth

FHA addressed this by announcing that for any person who has an existing FHA loan that was endorsed before May 31, 2009, the streamline FHA MIP will be .55 monthly and .01 up front. This is much lower than people buying a new home today with current MIPS.

So the numbers are going to be drastically better. The catch is that if you want to add closing cost to the loan , the home has to appraise for enough to do that. But if it won’t, then we can build the cost into the rate and do lender paid closing cost with no appraisal.

It is a win win for everybody.

Basically the only qualifying factor is that you have income, a minimum 640 credit score and no mortgage payments over 30 days late in the last 12 months.

Give me a call, 615-777-4663, shoot me an email george.margrave@migonline.com or refer someone you know looking to refinance. Look at the numbers. It will be worth it.

CRACKING THE CODE: DUTY TO DISCLOSE

Do you know your disclosure responsibility? In a recent case, a Hawaii court found that a “Frog Addendum” alerted a buyer to the potential issue of tree frog din. Interestingly, in Brinkwood Land Equities Ltd. v. Hilo Brokers Ltd., the court also determined the broker had no duty to disclose that the surrounding neighborhood was allegedly frequented by drug dealers and prostitutes.


Article 5 of the Code of Ethics says REALTORS® shall not undertake to provide professional services concerning a property or its value where they have a present or contemplated interest unless such interest is specifically disclosed to all affected parties. This could apply to many different areas- for example, frogs. For more on disclosure and article 5, click here.


~~GNAR

Remember, if you want more information or would like to chat, let me know.  I can be reached at 615-777-4663 or via email at george.margrave@migonline.com

Still a Buyer's Market...but HURRY!

In case you missed it, the Greater Nashville Board of Realtors reported that sales for the area were up approximately  25% for both the month of April and year to date.  Inventory was also down by about 12%.   This explains the call I had from an agent this morning wanting to make sure his client had been pre-approved.  He proceeded to tell me that in the areas this young couple was looking that every time they started to look at a certain home it was sold out from under them.  So we are probably reaching a state of the new normal in the real estate industry.   It isn’t like the “good old days”. But there is reasonable hope of a seller to sell their home (average 88 days) and the buyers are still able to contract for good terms. It is still a buyer’s market, but if you are wanting to buy, the edge is slowly but surely moving toward the seller.

FEMA warns Congress clock is ticking on flood insurance program

By Erik Wasson - 04/25/12 11:33 AM ET


The Federal Emergency Management Agency on Wednesday stepped up pressure on Congress to reauthorize the National Flood Insurance Program (NFIP).


The program is set to expire at the end of May, and FEMA warned that after that time NFIP will not be able to issue new policies. The program is seen as key for limiting the costs of natural disasters.


“FEMA is urging Congress to reauthorize the NFIP and send a clear signal to citizens, communities, and private sector partners that the federal government will continue to support our nation's efforts to manage flood risk,” David Miller, associate administrator for FEMA's Federal Insurance and Mitigation Administration, said in a statement.


The House and Senate were unable to agree on a NFIP reauthorization last year, and extended the program without changes until May 31.


House Republicans are pushing their reform plan as part of a six-committee effort to replace the automatic spending cuts triggered by the failure of the congressional debt supercommittee last year.


The government will be forced to cut $109 billion in 2013 automatically starting on Jan. 2. The House-passed budget requested six committees to come up with detailed replacements for the across-the-board sequester.


The House Financial Services Committee has proposed a five-year NFIP bill that cuts the deficit by $4.9 billion. Authored by Rep. Judy Biggert (R-Ill.), it would increase rates charged to customers.


It is unclear where the six-committee process is heading. Officially the recommendations of the six committees are to be used as part of a budget reconciliation bill, but because the Senate is not passing a new budget resolution this year, that process appears to be a dead end. More likely, the recommendations will be used in a lame-duck negotiation with the White House on budget, spending and tax matters.


In the Senate Banking Committee Chairman Tim Johnson (D-S.D.) urged passage of his version of the bill.


“The Banking Committee unanimously passed a bipartisan bill that provides long-term stability with a 5-year reauthorization period and makes important reforms that set the program on a more fiscally-sound path, phases in premium increases to assist homeowners, and helps educate consumers about their flooding risks," he said in a statement. "It is my hope that we can find a bipartisan path forward before this critically important program lapses.”


Source:
http://thehill.com/blogs/on-the-money/budget/223619-fema-warns-congress-clock-ticking-on-flood-insurance-program

Conventional VS FHA

We are seeing a few signs of the loosing of loan criteria. The main one is from the PMI companies. You may not know but several of them went out of business during the credit crunch we have experienced. The ones that are left have just been making things difficult. Now one of them has emerged and decided to go after business. They are cutting rates and making the guidelines a little better. That should start forcing their peers to adjust also. Let’s hope so. In the meantime we are using one time upfront mortgage insurance a lot. If someone has good credit scores and 5% for a down payment it is a better option than FHA.



If you want to check it out more, or would like to talk about what we can do for you..email me at george.margrave@migonline.com for more info or give me a call at 777-4663.

Pimco Housing Bear Kiesel Says It's Time to Start Buying

By John Gittelsohn-May 4, 2012

Mark Kiesel, the Pacific Investment Management Co. managing director who sold his home in 2006 when he deemed the market a bubble, says it's time to buy.


"I was one of the most negative on housing," Kiesel said in a telephone interview. "I finally came to the conclusion housing is looking pretty decent."


Kiesel said he bought a house in Newport Beach, California, where Pimco is based. Today he published a credit market note titled, "Back In" on the firm's website in which he writes, "I'm not sure U.S. housing prices have bottomed--only time will tell--but there are many more positives today than there were six years ago when I sold my house."


Home prices that have fallen 35 percent from their mid-2006 peak and mortgage rates of less than 4 percent are helping make it a good time to buy, said Kiesel, who is global head of the corporate bond portfolio management group at Pimco. Other signs the housing market is turning around include forclosure filings dropping to levels last seen in 2007 and sales of new and existing homes that have begun to increase as rising rents boost the relative affordability of purchasing, he said.


"For those of you renting or on the sidelines, I recommend you at least consider getting 'back in' and buying a house," he wrote in the note. "The future is hard to predict, but U.S. housing is healing and is probably close to a bottom."


http://www.bloomberg.com/


If you want to check it out more, or would like to talk about what we can do for you..email me at george.margrave@migonline.com for more info or give me a call at 777-4663.

Is It Hard to Get a Mortgage?

I know that you have all heard that it is tough to get a mortgage approved. Well it is, but mostly it is common sense regulations that are designed to create good mortgages for good borrowers and home owners. The kicker is that so many of my so called peers at my competitors don’t know what they are doing. They are driving their clients insane. They don’t answer their questions and if the news is not good they don’t deliver the message, much less solve the problem.


I and my team pride ourselves in recognizing and solving issues. We don’t bat 100%, but we do well if I do say so. Every month we wind up saving someone’s purchase or refinance when some other lender just didn’t know what to do. My 27 years is good for something. :)

Email me at george.margrave@migonline.com or call me at 615-777-4663 for more info or to chat about it.

Your Dream House is Calling....

The house of your dreams is out there. You just have to find it. This coming weekend the Greater Nashville Association of Realtors will host the largest number of open houses that Middle Tennessee has ever seen. House inventory is high and mortgage rate are at record lows making this the PERFECT time to buy. You could be settled into your new home just in time to host the next big cookout.




Visit Tennessean.com/openhouses for more info or give me a call at 615-777-4663.

Whew! Tax Day Was Yesterday!

Since tax day has passed, I feel compelled to advise those of you who are getting a tax refund and do not own a home a piece of free advice. That refund (on average $3000) can help you get into a new home of your own. The payment will likely be less than your present rent if you get a home of comparable size. You may not even have to use your refund, but even so you will probably need new drapes a new grill and will have moving expense. You may not have to use it because in spite of what you have heard on the media, you might get into a home for little to no cash. I am reading everywhere that the housing recovery is here. That will most certainly drive interest rates up.


Here is a surprising statistic. The P and I on $150,000 at 3.75% (today’s FHA rate) is $696. If rates go up 1% which is a good probability that same payment will only finance $133,300.

So it doesn’t pay to wait to see if prices might drop some.

These payments are Principal and Interest only, not the total payment. Call me at 777-4663 for details or email me at george.margrave@migonline.com . 

QUESTION: Property taxes too high?

ANSWER: We may be at the height of income tax season, but hoping you'll be getting a refund isn't the only thing you should be thinking about this time of year...especially if you're a homeowner. That's because the National Taxpayers Union (a nonprofit citizen group) estimates that between 30 and 60 percent of properties are assessed for too high of a value, resulting in an incorrectly larger property tax bill.


Taking the time to review your property tax bill could save you a nice chunk of change. And the good news is that submitting an appeal can be a fairly simple process, but make sure to take the time to fill out all forms in advance and be prepared with your documentation if there is an in-person hearing that needs to take place. To help you out, the National Taxpayers Union offers a checklist that walks you through some important steps in the process.

~~Mortgage Market Guide

If you have any questions that I can help with at this time, please call or email today. It will only take a few moments to discuss what's going in the markets and how it impacts your unique goals and situation.

You can reach me at 615-777-4663 or via email at George.Margrave@migonline.com .

T-Minus 5 Days to FHA MIP Increase....

It is T minus 5 days (in reality 2 days) to get an FHA case number for refinances and purchases.  I know I have been over and over this.  Next week it won’t be an issue any more. It will just be what it is.  But for now I don’t want anyone to pay more than they have to.   If you don’t know what MIP is, here is a short explanation.  There is more risk to a lender when the down payment is less than 20%.  So to make up for that risk the MIP is charged and supposedly put in a pool to pay for losses.

Call me, 615-777-4663, check out my website http://www.mignashville.com/ or email me at george.margrave@mignonline.com let's get you taken care of!

Credit Inquiries and What They Mean

We get many questions about how many points are affected by a credit inquiry. This is a simple yet difficult question to answer. Let me explain. There are two types of inquiries that a person must take into consideration. Here is a look at both of them:


Soft Inquiries: These do not affect your credit score and thus you don’t have to worry about them. They are reported on your credit report which confuses many people. A soft inquiry, or “soft pull” as we refer to them, are harmless in nature. There are many examples. Here are a few:

1) You have a credit card and you see they have pulled your credit. This is done by your credit card company to see if you have missed paying any of your other financial obligations. If you have been late, this allows them to increase the interest rate on your credit card per your agreement! Very few people notice this when they open a credit line because they don’t read the agreement.

I know what you’re saying: what does a late payment on some other line of credit have to do with my payment history on this credit card? Yes it’s unfair but non-the-less reality.

2) Pulling your free annual credit reports at www.annualcreditreport.com. Again, these don’t affect your score and is something everyone should do once a year. The credit reports are free but you have to pay a fee if you want the score.

3) Lending institutions regularly pull your credit for “pre-approved” offers. You know the main culprits here—usually credit card companies that want your business.

4) A few other examples are when you apply for employment or by landlords for renting or leasing an apartment or a house.

Hard Inquiries: Ok, these are the only ones you have to worry about. When I talk to clients I make it simple by telling them if you apply or initiate an application for a vehicle, credit card, line of credit or a mortgage etc… then it is factored into your credit score.

From my experience many people get into trouble with inquiries when they are making purchases at major department stores or other large businesses. At checkout the clerk tells them they can get “15% off this purchase” if they apply for a credit card or line of credit with that business. Do not do this! Department store cards are not rated the same as major credit cards and the interest rates are usually much higher!

Finally, keep in mind hard inquires stay on your report for two years but are most often only factored into your score if they are within the last six months.



From Thomas McGee

By the way T-minus 12 on the increased MIP. Call me so I can help you avoid it.

You can reach me at 615-777-4663 or via email at george.margrave@migonline.com

Good news and bad news

I have told you about how HUD is raising the MIP for their borrowers after April 1. Actually the final letter says April 9th now, so we got a few more days. So If you are thinking of buying, you would save money by getting the transaction far enough along to order the FHA case number and appraisal by then. The countdown is T minus 26 days


Now the good news. People that currently have an FHA loan that was closed prior to the first part of 2009 (date to be determined) will be able to get a considerably lower MIP for their refinance. This will mean a big savings. So if I ran the numbers for you and it didn’t look very good, it is about to get a lot better. But we have to wait until June 11.


You can reach me at 615-777-4663 (HOME) or email me at George.Margrave@migonline.com .  

Don't Put Off Buying...HUD Raising MIP 4/1/2012

Last week I told you about how HUD is raising the MIP for their borrowers after April 1.  So If you are thinking of buying, you would save money by getting the transaction far enough along to order the FHA case number and appraisal.  My political comment on this may not interest you, but the powers that be are piling on the average homebuyer.  That is exactly what they talk against.  If housing were to have a recovery (even moderately) the whole economy would benefit dramatically.  So why would they keep putting the brakes to the most obvious things. I’m just saying.

You can reach me at 615-777-4663 (HOME) or email me at George.Margrave@migonline.com .

Higer MIP Coming April 1, 2012

No, that is NOT an April Fool's joke, but you can bet it really looks like one.

The FHA announced that it is raising Mortgage Insurance Premiums (MIP) for FHA mortgages. These increases will only impact new FHA loans and DO NOT impact existing FHA borrowers. The MIP changes can be summarized as follows:



* Upfront MIP increase by 0.75 points to 1.75%. The UFMIP as is the case now can be financed into the mortgage. This change is to be effective from April 1, 2012.


* Effective April 1, 2012 FHA is also increasing its MIP by 10 bps as required by the Temporary Payroll Tax Cut Continuation Act of 2011.


The FHA estimates these changes will add over $1 billion to their fund based on their volume projections through September 30, 2013.


We will have additional details as soon as possible.


From Jesse Lehn, MIG

Remember you can always reach me at george.margrave@migonline.com or http://www.mignashville.com/ or by phone at 615-777-HOME (4663). 

9 Popular Tax Breaks You Can No Longer Count on in 2012

From what I understand the tax deductibility of Mortgage insurance expired Jan 1-2012. So you can probably write it off on the return you are about to file, but not the next one.



I believe the same thing is happening with our sales tax deduction. Tennessee, being one of the few states without an income tax had been allowed to write of the sales tax in lieu of state income tax. But that write off is also going away. Write your congress people.  And take a look at this article....


9 Popular Tax Breaks You Can No Longer Count on in 2012



Lawmakers may have extended the payroll tax holiday for two months, but they let a number of tax breaks that might be dear to you expire.

By David Muhlbaum, Kiplinger.com

You'll face a higher tax bill next spring if Congress doesn't act to revive a series of tax breaks that expired Dec. 31, 2011. Among the breaks that Congress didn't extend in all the sturm-und-drang over the payroll tax holiday are:


Alternative minimum tax patch...The AMT is a parallel tax system created more than 40 years ago to prevent excessive use of tax breaks by the very wealthy, ensuring they pay at least some tax. Taxpayers whose income exceeds the AMT exemption - in 2011, $48,450 for individuals and $74,450 for married couples filing jointly - must calculate both regular tax and AMT liability and pay the larger of the two amounts. But exemption levels have, at least tentatively, dropped to $33,750 for individuals and $45,000 for married couples filing jointly in 2012, which will expose 31 million taxpayers to the higher AMT this year, according to Tax Policy Center estimates.


Higher mass transportation benefit...This one's of particular interest to straphangers, van-riders and other users of public transit. A 2009 federal stimulus provision raised the maximum an employee could receive for transit, tax-free, from $120 to $230. That matched the tax-free limit for parking. With the expiration of this break, the maximum for 2012 dropped to $125. Employees who've asked to have an amount higher than that withheld from their paycheck to cover their total commuting costs will see their net pay come down, as the difference is now taxed.


Deduction for direct IRA payouts to charity...Retirees who are 70½ or older could direct up to $100,000 of their IRA distributions directly to charity and exclude the donated amounts from taxable income. Not anymore in 2012, unless Congress reinstates this deduction.


Write-offs for state sales taxes...This particularly significant expired break allowed you to deduct either state income tax or state sales tax from your federal taxable income.


Teacher's supplies deduction...Teachers, even if they didn't itemize, were able to take an additional deduction of up to $250 for classroom supplies they paid for out of their own pockets.


Tuition and fees deduction...Taxpayers (up to certain income limits) who can't claim the more advantageous American Opportunity or Lifetime Learning credits can still reduce taxable income by up to $4,000 for tuition and other qualifying educational expenses -- if, of course, Congress reinstates this break.


Mortgage insurance premium deduction...Homeowners who don't exceed certain income limits had been able to deduct premiums they pay on mortgage insurance policies issued after 2006 on their primary residence.


Personal tax credits applied against the alternative minimum tax...Credits such as the tuition and dependent-care credits were allowed to offset your AMT liability.


Research and Development credit...Like the AMT patch and direct IRA payouts, this credit, which allowed high-tech companies and others to subsidize research in areas that might go unexplored, has broad support. But it still falls to Congress to reauthorize it periodically.


We think Congress will manage to revive these breaks -- eventually -- with the exception of the transit subsidy, whose chances are no better than 50-50 . But you may spend much, if not all, of 2012 in a state of uncertainty. The political atmosphere in Washington is so toxic that it is doubtful the parties will reach agreement before the end of 2012, when Congress will have to take up the question of extending the Bush tax cuts.


If lawmakers wait too long, in 2013, we may have a repeat of the 2006 and 2010 filing seasons, when many taxpayers had to wait for the IRS to reprogram its computers before they could file their tax returns. In both cases, the start of the filing season was delayed for many until early to mid February.


Reprinted with permission. All Contents ©2012 The Kiplinger Washington Editors. http://www.kiplinger.com/ .

Mortgage Market Guide

You can reach me at 615-777-4663 (HOME) or email me at George.Margrave@migonline.com

Reverse Mortgages

We haven’t talked about reverse mortgages lately. In the right situation they are wonderful. All of a sudden our client has no house payment (except taxes and insurance). In some cases they may even get a payment to them in the form of a lump sum of cash or other bills paid off. There is no credit check so credit is not a factor. The equity in the home and the borrower’s age are the main factors. If you have a friend that is interested send me the address and birth date and we can give you a rough idea.


You can reach me at 615-777-4663 (HOME) or email me at George.Margrave@migonline.com

Are YOU a First Time Home Buyer? We can HELP!

I want to mention our expertise with First Time Home Buyers. My team accounted for the most THDA loans in the state for 2010. This fiscal year which is almost half done finds us in the lead again. I just want to point out that these loans are not always the easiest, but I think we are serving our community by working on them so diligently.



You may not realize it but in most cases we can structure it so that these buyers do not have to have money to make the purchase. (this is in spite of what you read in the media that 20% is required)The interest rates are great and as a result of this, our borrower often owns a home for less than the rent they were paying.

You can reach me at 615-777-4663 (HOME) or email me at George.Margrave@migonline.com .