Georgia Mortgage FHA

With thousands of new homes entering the foreclosure process every month in each market area the question arises ever more frequently, “Can I use an FHA loan to purchase a short sale property?”

For the readers not familiar with short sales let us first define the term as it applies to real estate. As “short sale” on real estate is when the existing lien holder(s) agree to accept a lower amount than is currently owed on the existing loan(s).

If you need an example suppose the home owner has only one mortgage for $350,000 (existing payoff) on a home. Perhaps that home is currently valued only at $275,000. The home owner cannot refinance, the lender has failed to modify and foreclosure is looming so the lender agrees to accept a sales price equal to the current appraised value even though it is a full $75,000 lower than (short of) the payoff.

Answering the question, “can an FHA loan be used to purchase a short sale”, really is too simple. The answer is “yes” provided the property and transaction fall within FHA insurance guidelines. Remember FHA has maximum loan amounts, guidelines for property type and guidelines for property use.

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• Government to push lenders to do short sales (sfgate.com)

— Ken Cook NMLS ID 208452

In 2008 the Federal Housing Administration, in a move to try and get permission from congress to insure 100% home loans, were able to get most private third party down payment assistance programs eliminated from the process. Government and civic organizations are still able to operate but some of the largest DPA companies are out of the business of helping home owners with their required contribution to the loan process.

Since that date the only way to get down payment assistance is from generally higher priced government assistance programs or from a gift from a family member or employer. According to the HUD Handbook, chapter 2-10(C):

“Gift Funds.An outright gift of the cash investment is acceptable if the donor is the borrower’s relative, the borrower’s employer or labor union, a charitable organization, a governmental agency or public entity that has a program to provide homeownership assistance to low- and moderate-income families or first-time homebuyers, or a close friend with a clearly defined and documented interest in the borrower.”

There is much more to it than simply having the funds available. Not only does the gift money have to exist. The paper trail, evidence of the donor’s ability to give and proof of the relationship also has to be verified. Read the rest of this entry »

— Ken Cook NMLS ID 208452

For many years the Up Front Mortgage Insurance Premium, established and priced by the Federal Housing Administration, has been at 1.75% of the loan amount on purchases and non-streamlined refinances. Due to increased costs and losses in the Administration a new level for the UFMIP has been established and will go into affect on April 5, 2010.

The UFMIP is not the same as the Monthly Mortgage Insurance Premium but rather is paid in full at the time of consummation of the loan. In other words the date the final loan documents are paid and monies exchange hands. Read the rest of this entry »

— Ken Cook NMLS ID 208452

Every year the United States Department of Agriculture (USDA) ?guarantees thousands of home loans to borrowers who have?an income of up to 115% of the median income for the area. Funding for the program is always uncertain and there is generally a period during which funding for the program is not available and that time usually is late in the year. Read the rest of this entry »

— Ken Cook NMLS ID 208452

— Ken Cook NMLS ID 208452

Buying a first home, even buying any home, can be a nerve racking and tedious adventure. As with anything else experience is the best teacher but short articles on blogs can help, too! Obviously it is not possible within a few lines of text to provide an in-depth education and exposition of the process of buying a first home. However a few short pointers of do’s and do not’s can be highly valuable. Follow that up with a contact form and you will be well on your way! Read the rest of this entry »

— Ken Cook NMLS ID 208452

Continuing the great and enlightening discussion on the topic of short sales it has come time for the bane of the web: a poll. Actually polls are not the bane of the web but they are also usually skewed and completely unscientific when used in this manner. However, which is the same as but, your opinion and perspective is invited on this particular matter.

Having taught and “done” short sales for a number of years, in fact well before they were one of the biggest buzz-words in the industry, I have had the chance to work with many agents, sellers, buyer, banks, and lenders in multiple aspects of the process. Still there are “gaps” in understanding, approach and even the timing of a short sale. Moreover, and more personally important to me as the lender offering financing to people who are purchasing short sales, the timing of when a property officially becomes a short sale. Read the rest of this entry »

— Ken Cook NMLS ID 208452

You have almost certainly heard the phrase “short sale” over the last several months. As the nation’s housing market imploded and millions of people began falling behind on their mortgage payments and started facing foreclosure short sales have become much more popular. Many “short sales experts” began showing up around 2007 who had not even heard the term until the attended a class or read an article by someone who may have been familiar with short sales for many years.

Opportunity also breeds scams and the short sales opportunity almost immediately saw hundreds of websites come into existence claiming to be part of a “Government Loan Modification Program”. If you are facing foreclosure and you are searching for help online be warned -- NEVER pay anyone upfront for help avoiding foreclosure or to negotiate a short sale for you. NEVER assign your deed or sign a contract giving another party control of your property. Consult a reputable personal asset protection attorney in your area and ask them how much experience they have had with short sales. The same goes for any real estate agent who says they have short sale experience.

Almost every lender will “consider” a short sale. If you are a home buyer or a buyer’s agent looking at a “short sale listing” the very first question to ask is “has the short sale been approved at a specific dollar amount?” If it has then you have a short sale and you should make your offer based on that knowledge. However, if the answer is “the short sale has been approved and they will consider offers” then it is not a short sale. It is a listing for a home for sale with the possibility of negotiating a short sale.

If the short sale has not been approved to a specific dollar value plan on 45 to 180 days of negotiating. If the short sale has been approved to a specific dollar value and you want to offer less than that amount ditto.

— Ken Cook NMLS ID 208452

September of 2009 brought devastating flooding to many areas of metropolitan Atlanta, Georgia. During this time flood waters from the Chattahoochee River, the Yellow River, Peachtree Creek and hundreds of other small tributaries and?reservoirs?crested to record levels. During a 24 to 48 hour period as much as 15 inches of rain deluged the already water soaked landscape and created a new line of?demarcation?between flood zone and safe zone.

At least eight people lost their lives, hundreds were injured and thousands left homeless as the Georgia flood receded. What it left behind, as does any flood or other disaster, is wounded lives and dashed hopes and dreams. As a grim reminder of the loss of property there is a raw video feed from CNN attached. Read the rest of this entry »

— Ken Cook NMLS ID 208452

Regardless of the industry there are certain buzzwords or words that seem like they are created simply to confuse the outsider. Near the bottom of the list for business goals should be confusing customers. Unfortunately it does happen and the one who stands the highest chance for damage is the most valuable of all; the customer.

Mortgage professionals throw around terms like an alphabet soup that would frighten even Vanna White. Words like ten oh three (1003) and respa (RESPA – Real Estate Settlement and Procedures Act) fall out of their mouths like jelly beans out of a pinata.

Making it even a little more confusing for you different agencies use the same term to apply to different meanings and vice versa. Streamline and streamlined for example.

The Federal Housing Administration (FHA) makes available a couple of different “streamline” loans. Freddie Mac (FHLMC) has their “streamlined” loan. Essentially they are the same product and if you phone an FHA lender and ask for a “streamlined” loan they will neither laugh at you nor hang up on you.

For all practical purposes streamline loans, whether a streamline refinance or otherwise, indicate something less is required or they go faster than a standard loan. For the FHA streamline refinance a little less documentation is required and sometimes less evidence of value is required.

Read the rest of this entry »

— Ken Cook NMLS ID 208452