Homepath- Program a must have in your arsenal!
Market rate have been heading up for the past 5-6 business days in the opposite direction to what most people were expecting for it to stay low or stable. Just this month the Federal reserve announced the 2nd Round of buying of additional $600 Billion in treasuries until June 2011, to boost growth and keep interest rates low. One big change i noticed compared to the 2009 treasury buying, was the focus now is on short term maturing treasuries 10 year notes and below; where before it was on long term maturing 10year and higher. You see as Federal Reserve buys these treasures each month they will artificially bid up the prices and treasury yield (rate) moves directly opposite to its price. So as price go up Yield should come down and Mortgage rates mostly tracking treasuries should of have produced lower Mortgage rates. But if the Fed wont be using the Billions to buy Long term treasuries then the Long term rates like the 30year Fixed will be pushed higher. See the link below for the announcement
Now to the Homepath Program – A must have in your arsenal!
I just helped a client of mine to buy a investment condominium for his portfolio at discounted cash value and was able to use the Homepath loan to purchase it. When searching for condos on the MLS you may have noticed “Cash Only” and these days the biggest reason for that is current homeowners are not paying their HOA fees on time. If the percentage of delinquent or non-paying homeowners are 15% or higher then the banks will not give out Conventional or FHA loans and the only option will be “Cash purchase”. This issue makes the value of the condo complex go down due to lack of financing and buyers are able to buy at a big discount $81,600, compared to other complexes next door average $110,000-120,000. Eventually finance-ability will come back to the complex when most of the higher priced purchased owner recycle out of the community and complex stabilizes and delinquencies goes lower then 15%. When that happens finance-ability will come back to the building and prices will go up to the neighborhood prices regardless of what the RE market is doing. There is a hidden profit on these properties that i have discovered during my research and i invite you to take advantage of it and share with your buyers!
Homepath loans allow you to finance in condo/townhome complexes and buy at cash value. You must look at properties with Homepath financing offered , and only the ones that are Fannie Mae REO qualify for this loan. Requirements as follows:
– Verify property eligibility at www.Homepath.com
– No appraisal required
– Purchase loan Owner occupied SFR/condo 95% LTV
– Investments to 85% LTV
– Mortgage insurance required
– 1-4 units, condo
– Minimum 660 credit score
And as additional incentive Fannie Mae is offering buyers up to 3.5% in closing cost assistance and a added $1,500 bonus for selling agents on HomePath properties through December 31, 2010.
For more information please call me at 310 654-3010
This weeks featured program is the FHA Streamline Refinance. I really wanted to give you a good understanding of this program due to all the FHA loan we have been doing in the past 2-3 years. With lower market rates, the benefit of saving money with a refinance has been more appealing. The program requirements are very basic (streamlined):
– Current loan has to be FHA loan and in existence for 12 months.
– Credit score of borrowers 620+
– Have a job (Income will not be disclosed to bank)
– No appraisal will be done, so equity in is not required
– No fixed cost to the borrower, the bank will pay for costs (only 1st payment to be brought in to escrow)
As an example to clarify how the program works. I had a client that purchased the house in Norwalk with an FHA loan of $255290 December 2009, $1875 piti 5.5%, 30 year loan. We did a Streamline refinance on August 2010 with loan of $ 257000 , $1707piti 4.875% rate . The borrower saved $168 a month without spending money. In reality the borrower had to bring in one payment to close the loan but when the old loan was closed she got a refund of $2900 from her impound account so at the end of the day she ended up with $1300 cash in her pocket and $168/ monthly savings.
The house value had gone down in value since the purchase and her husbands income has gone down considerably. But because of the programs No Appraisal requirement and No income verification these were no issues. There loan balance only went up by $1700 because of all the costs were paid by the bank.
Currently the rates on FHA Streamline are ranging from 4.5- 4.625% with all fixed costs paid by lender. Savings will be higher or lower depending on balance of the existing loan and from my past experience if you can lower the rate by .5% it is worth doing the refinance. So go through your old clients and see if you can help them save money!!!!! Call me let me help
Tigran Momdjian (Direct lender/ loan broker)
American Capital Corp.
10058 Rosecrans Ave.
Bellflower, CA 90706
Actual programs are subject to change without notice and may change due to market conditions, program offerings, product requirements, required qualifications, and other criteria. American Capital Corporation is a licensed real estate broker with the California Department of Real Estate, Broker License #01174694
Owning a home is part of the American dream. But high home prices may make the dream seem out of reach. To make monthly mortgage payments more affordable, many lenders offer home loans that allow you to (1) pay only the interest on the loan during the first few years of the loan term or (2) make only a specified minimum payment that could be less than the monthly interest on the loan.
Whether you are buying a house or refinancing your mortgage, this information can help you decide if an interest-only mortgage payment (an I-O mortgage)–or an adjustable-rate mortgage (ARM) with the option to make a minimum payment (a payment-option ARM)–is right for you. Lenders have a variety of names for these loans, but keep in mind that with I-O mortgages and payment-option ARMs, you could face
“payment shock.” Your payments may go up a lot–as much as double or triple–after the interest-only period or when the payments adjust.
In addition, with payment-option ARMs you could face
negative amortization. Your payments may not cover all of the interest owed. The unpaid interest is added to your mortgage balance so that you owe more on your mortgage than you originally borrowed.
Be sure you understand the loan terms and the risks you face. And be realistic about whether you can handle future payment increases. If you’re not comfortable with these risks, ask about another loan product. Skip to content
The Federal Housing Administration, generally known as “FHA”, is the largest government insurer of mortgages in the world. A part of the United States Department of Housing and Urban Development (HUD), FHA provides mortgage insurance on single-family, multifamily, manufactured homes and hospital loans made by FHA-approved lenders throughout the United States and its territories. While borrowers must meet certain requirements established by FHA to qualify for the insurance, lenders bear less risk because FHA will pay the lender if a homeowner defaults on his or her loan. FHA has insured over 38 million home mortgages and 47,205 multifamily project mortgages since 1934. Currently, FHA has 6.1 million insured single-family mortgages and 13,000 insured multifamily projects in its portfolio. Clearly, FHA provides a huge economic boost to the country in the form of home and community development, particularly in today’s challenging financial climate.
HUD-approved housing counseling agencies are available to provide you with the information and assistance you need to avoid foreclosure. As part of President Obama’s comprehensive Homeowner Affordability and Stability Plan (HASP), you may be eligible for a special Making Home Affordable loan modification or refinance, to reduce your monthly payments and help you keep your home.
If you need help understanding the Making Home Affordable programs, you can contact a counseling agency in your area that will provide you with free foreclosure prevention services. If you are eligible for the loan modification or refinance program, the counselor will work with you to compile an intake package for your servicer.
Foreclosure prevention counseling services are provided free of charge by nonprofit housing counseling agencies working in partnership with the Federal Government. These agencies are funded, in part, by HUD and NeighborWorks® America. There is no need to pay a private company for these services.
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