Your Chicago Mortgage Guy

Looking Past April 1st and Dodd-Frank

If you are a Loan Officer right now, you are hearing a lot of doom and gloom about the imminent implementation of the Dodd-Frank legislation aimed specifically at our commission structure.  I could put up lengthy posts about this issue, but anyone that isn't in my seat isn't going to understand most of it, or for that matter, care very much.  But, I have been thinking about the positives that are going to come out of this, and there are many.  Not just for the Consumer, but for the Loan Officer and even our Realtor partners.

I previously posted a very concise article regarding the future of the Loan Officer and our industry in general.  I do not think that the Loan Officer is dead, but I do agree that the days of just writing loans, without any expertise, is over. 

There aren't many indsutries like Mortgage and Real Estate where you don't have to be a full time employee to participate in the process.  If you spend the time and money to get licensed as a Loan Officer or Realtor, I guarantee you that someone will give you a phone and a desk to sell mortgages or real estate.  Think about that.  Beyond the basic licensing requirements, you don't need any other background or knowledge to come in and do what we do.  Scarier still is that they do get deals.  I call these the 'Brother In Law' deals.  When you ask who they are using to buy a house and they say, 'Well, my Brother In Law is a first grade teacher, but he sells mortgages on the side'.  Really?  So, you are going to trust the single largest purchase of your life to a guy that writes maybe five or six loans a year?  Yes.  It happens all the time.

Our industry has changed so much in the past 18 months, that even the most seasoned in our industry can struggle to keep up.  We have added disclosures and compliance at an astronomical rate.  The smallest mortgage shops are doomed at this point.  There isn't any way that they will be able to keep up with the compliance part of the puzzle and the margins have become so slim, there just isn't any room for profit anymore.  The bulk of these firms are home to the lowest volume sales people, and they will not be picked up by the lenders left in the wake.  It's just to expensive now to justify bringing on sales people that aren't working full time.

This is a plus for the consumer.  We are already a pretty lean industry of sales people when compared to our numbers in the mid 2000's when we topped out.  Our ranks should be left with the most experienced sales people, the ones that have been out selling themselves as Mortgage Advisor's, rather than the sales people only concerned with the transaction at hand. 

It's never been more important to vet your Loan Officer.  It's well within bounds to ask how long they have been in the industry.  You should ask what their specialty is and what their volume is like.  An experienced loan officer is probably already sharing this with their potential clients and will likely have references ready to go to back them up. 

Now, the downside for the consumer will be reduced competition.  But, it's Friday and I think I'll leave you with the positives.  Check back next week for how this legislation will hurt the consumer.

Joe Burke

Your Chicago Mortgage Guy

773-742-6707

joe@yourchicagomortgageguy.com

 

Is the Loan Officer Dead? 2010 Market Trends & 2011 Predictions by Rick Roque | The Niche Report

Is the Loan Officer Dead? 2010 Market Trends & 2011 Predictions by Rick Roque | The Niche Report.

Commercial Space In Your Condo Building – How Much Is Too Much?

There has recently been a lot of talk about the health of individual Condo Associations and Projects, and what constitutes a safe Condominium investment. The Chicago Tribune ran a terrific article a couple of weeks ago about this very topic, and frankly, scared the bejeezus out of a lot of potential buyers and realtors. You can see the article in its original form here. Chicago Tribune - Condo Deals Die Article

This article touches on a number of things, which we are going to cover here over the next week or two, but something I have been running into a lot lately is the way Fannie and Freddie are now viewing Commercial Space in Condo Buildings. If you live in a major city, this could very well affect you.

Fannie Mae, Freddie Mac and FHA have long had guidelines in place that state that a Condominium Project cannot contain more than 20% Commercial Space. So, what constitutes 20% commercial space? Technically it is supposed to be square footage. When a developer has the Declarations written for a building, there is a survey done of the building itself and the square footage that belongs to each individual unit. This is used to determine the amount that each unit pays into the HOA for dues.

Now, picture any four unit condo building on a commercial thoroughfare in Chicago. While it might seem obvious from the street that each unit takes up the same amount of space, and that 100% divided by 4 is 25% each, that isn't usually the case. In most cases, the survey will include parking that may only belong to the residential units, or common space like a roof deck, or a deck above a garage, that only belong to the residential units, that push the percentage of ownership of the commercial space under 20%, thus conforming to Fannie/Freddie/FHA condo guidelines.

When the commercial space still doesn't conform to this 20% threshold, it has long been commonplace to separate the commercial units from the residential Home Owners Association. Until recently if the commercial spaces didn't appear in the declarations and didn't contribute to the HOA, they were not considered part of the residential project and were excluded completely. Recently, Fannie Mae, Freddie Mac and FHA have clarified this issue and this no longer holds true. If you have commercial space in a condominium project, regardless of whether they are part of the residential condo association, that square footage is now factored into the condo approval.

This is not a big deal in our first example, but a very big deal for many existing condo projects. For instance, if you have a 3 unit condominium building on a commercial thoroughfare, you are virtually out of options for financing. Another example would be some older condo conversions with multiple commercial and even multiple levels of commercial space, and no clear declarations stating percentage of ownership, because maybe these units were never part of the association.

So, what are your options then? They aren't good. If you fall between 20%-25%, and the rest of the association is in good shape and you have a strong file in terms of the borrower, there is a good chance you can get an exception through Fannie/Freddie. You can also generally find a portfolio lender that will overlook the percentage of ownership, but at a higher down payment. If you are between 25%-30%, you can apply for an exception, but the higher the percentage of commercial, the less likely you get it approved.

If you are in a property where the percentage of commercial is over 20%, you may want to look at the original survey and see if it is truly reflective of where your current project is. For instance, if a roof deck was added, or common space was added over a garage, they property now has more residential square footage, and the Declarations could potentially be changed. The original survey may also have been done incorrectly and the commercial space, when including common elements belonging to the residential units, may just be incorrect.

If you are in one of these larger buildings where the square footage isn't clear at all, it's best to be prepared when you go into this either with documentation showing the calculated square footage. At the end of the day, it's a judgment call by the appraiser as to exactly what percentage is residential verses commercial, and even they aren't always sure. A single appraiser doesn't always even have the type of access that would be necessary to walk off an entire properties square footage, much less the time or patience to do so in the first place. Remember, these guys are only making a couple hundred bucks to be out there for a very short period of time.

If you have any questions, feel free to reach out to Your Chicago Mortgage Guy!

Joe Burke

Your Chicago Mortgage Guy

773-742-6707

joe@yourchicagomortgageguy.com

 

Pre-Approval!

Here we go again. Every Spring, as the first batch of contracts are signed, I get the calls from either Agents or Borrowers who now under contract, are finding out that they either don't qualify for the mortgage they thought they were going to get, or who are not at all happy with the monthly payment that was just put in front of them.

Admittedly, the Pre-Approval process is flawed. Most people these days start off on the internet. There are mortgage calculators on basically every Real Estate site on the internet. You can research lenders, programs, mortgage terms, all without leaving your cubicle. When your Realtor says you need a pre-approval letter, most people pick up the phone and call either the recommended Loan Officer, or their local bank and ask for a pre-approval for the maximum they can afford. The Loan Officer in turn, generally asks about income, assets, runs a credit report and sends out a very generic letter to a specific purchase price or loan amount. But here's the flaw. Most Loan Officer's never ask how much you are comfortable with on a monthly basis or, if you have looked at your own personal budget to come up with a number that fits. And what happens? You sign that contract for $300,000.00 only to find out the monthly payment eats into the $500 per month you had budgeted for your next vacation or your kid's college fund.

Why are we so afraid to talk about budgets? As a Loan Officer, we are guiding people through the single biggest purchase of their lives. As such, it's the largest monthly liability that they are going to carry. Why are so many mortgage professionals not broaching this with their customers?

The first question I ask a potential borrower when we speak is what they are comfortable with in terms of monthly payment. If they don't know, I ask them to think about that before we start talking about purchase price. It's easy to back into a purchase price range once you have that number and the amount of money being put towards down payment. Here's a dirty little secret. Realtor's don't want to sell you more property than you can afford. Especially considering the state so many of our past clients are in post bubble burst. A good Realtor does not care if they sell you a $200K home instead of a $250K home. What they do care about is getting a referral from you after close. They will not be getting referrals for very long if you are not able to make the monthly payment on the home that you have to live in for the next five years.

Just as important as monthly payment is knowing for sure that you meet current mortgage guidelines. It has never been harder for me to just say to someone, 'Congratulations, you are Pre-approved'. There are just too many things that go into the process now, and too many guidelines to follow. It has never been more important to get a credit check, have a loan officer look at your paystubs, W2's and assets, and even run the file through automated underwriting to make sure the loan will be approved. There are so many things now that can negatively affect the quoted interest rate, that it's imperative to get that out of the way up front. While your best friend may have just locked in 5.00% on a 30 Year Fixed, your particular situation could easily push that rate to 5.500% and change your monthly payment on a $300K loan by as much as $90 per month, before you figure in that your mortgage insurance just got more expensive as well.

So, if you haven't spoken to a loan officer, call one. If you have, but you don't feel like they went through your finances, or talked to you about your comfort level or budget, don't call anyone, call me!

Joe Burke

Your Chicago Mortgage Guy

773-742-6707

joe@yourchicagomortgageguy.com

 

 

Loan Level Price Adjustments (LLPA's)

Okay, I have been wracking my brain for the last couple of days trying to find a consumer product that everyone is familiar with that is priced out in a similar manner to Mortgage Interest Rates.  And....I haven't come up with much.

The truth is, there just isn't any comparison in the real world.  So here's what I have come up with.

Everybody is familiar with Car Insurance.  You get it when you turn 16, and it's expensive.  We all know that, not because we went out and got a policy ourselves at 16, but because it's all we heard about from our parents.  And, fact or fiction, this is what we were told.  It's more expensive to insure Men than Women.  When you turn 25, your insurance gets cheaper.  If you get into an accident, or have to many traffic violations, your insurance will go up.  So on and so forth.  This is the closest I can come to describing how I price out an interest rate for a borrower.

It's all about Risk.

When I get a phone call from a borrower shopping for an interest rate, the call starts something like this.  'I want to know what your rate is today on a 30 Year Fixed'.  Believe it or not, that is an impossible question to answer, so as a loan officer, we start asking questions.

What kind of property are you financing?  Condominium?  Townhome?  Single Family?

How much do plan on for a down payment?

Is this a Primary Residence or an Investment Property?

Have you run your credit recently and what are your scores?

Where is the property located?

Are you escrowing your taxes and insurance?

Each one of the above questions is considered a risk factor, that carries with it, an adjustment to interest rate.  Some carry more weight than others.  For instance, if you are buying a condominium, and are putting less than 25% down, it is likely that the borrower will be offered a .125% higher interest rate than the same borrower purchasing a single family home.  It it's a condo, and the credit is below 740, the rate will go up again.  If it's a condo, the credit is less than 740 and you want to waive your tax escrow, the rate gets higher still.  Just like the car insurance.

I have no idea if that helps or not.  If not, give me a call.  In the mean time, I'll try to find another analogy that works better. 

Joe Burke

Your Chicago Mortgage Guy

773-742-6707

joe@yourchicagomortgageguy.com

Private Mortgage Insurance

Most people just think of mortgage insurance as that expensive line item on their mortgage statement, that doesn't seem to do anything for them.  What's forgotten is that without the mortgage insurance, you could never get into the loan without a 20% down payment in the first place.  Lenders take a lot of risk when they take a lien on property, with an equity position over 80%.  As we have seen in the last couple of years, when real estate prices fall, the lender is left holding on to property, without any equity position at all. 

Something that is lost on borrowers though is that Mortgage Insurance is a product.  And, not just one product, but multiple insurance products.  There are different pricing structures for different insurers, different insurance products and they change depending on the assessed risk of the mortgage being insured.  We are going to cover the three main products available to borrowers these days. 

Borrower Paid Mortgage Insurance (BPMI)

This is the most common type of mortgage insurance, and the easiest to explain and sell to the consumer.  Borrower Paid Mortgage Insurance is paid monthly by the borrower.  The amount of insurance is determined by the Loan To Value of the home, FICO score and Loan Type.  Here is an example of how mortgage insurance gets more expensive as the loan to value, and the perceived risk increase.

Download Borrower Paid Mortgage Insurance

If you look closely, you will see that as the Loan To Value goes from 85% to 97%, the rate of mortgage insurance increases.  At 97%, the Interest Rate also increases, but we'll cover that another time. 

While insurance rates don't vary much from insurer to insurer, guidelines can vary wildly.  Each individual insurer has it's own risk tolerances.  They may be different from one another in the maximum Debt To Income that they will limit a borrower too, or they may have different guidelines when it comes to Condominiums or Declining Markets.  The important thing for a lender is to have as many Insurance partners as possible.  That way if one insurer won't insure a file, there may be a second, third or even fourth option.

The benefits to a borrower for this type of Mortgage Insurance are that it is the easiest to obtain, and it goes away eventually.  When the loan to value reaches 78% of the original purchase price, or the appraised value at the time of refinance, the mortgage insurance automatically drops off.  This is the best option if you are in the loan for the long term.  Also, you can get a cheaper rate if you have a loan amortized for 25 years or less.  This is a great trick if you can afford a 25 year, 20 year or 15 year fixed mortgage.  By just lopping off 5 years on the amortization, you can knock of hundreds of dollars a year in insurance payments.  That's something to ask your loan officer about.

Lender Paid Mortgage Insurance

This product crept into the market place about 5 or 6 years ago.  The idea is that the lender pays for the Mortgage Insurance Certificate at closing, and the insurance is paid by raising the interest rate, thus raising the premium paid to the lender.  The lender then takes that increased premium and pays for the Insurance Certificate.  So essentially, your Mortgage Insurance is now built into your interest rate.  Take a look at the following graph to get an understanding of how your interest rate increases as the Loan To Value increases.

Download Lender Paid Mortgage Insurance\

The first thing you might notice is that even though the interest rate is higher, the monthly payment is lower than our scenario's with Borrower Paid Mortgage Insurance.  With the insurance built into the rate, the monthly payment is lower, but only in the short term.  The downside here is that the insurance never goes away.  Not at 20%, not ever.  So, if you are interested in this type of mortgage insurance, it's perfect if you are going to be in your property for ten years or less.  The other advantage to this type of mortgage insurance is that because it is essentially built into your interest rate, it is then tax deductible.  By increasing the amount of interest you pay over the course of the year, you increase the amount of interest you get to write off against your income at the end of the year. 

Single Premium Mortgage Insurance

I love this program, and I don't think a lot of people even know it's out there.  As a borrower, you always have the option to pay your mortgage insurance premium, outright, at the closing.  This eliminates ever paying any mortgage insurance during the life of the loan.  The downside, is it's expensive.  See the attached spreadsheet.

Download Single Premium Mortgage Insurance

This is a great option if you go into a purchase transaction asking for a large closing cost credit.  It allows you to have the seller pay your mortgage insurance for you for the life of the loan.  If the borrower is paying it on there own, you really have to look at the transaction as a whole.  Would that premium be better served going towards down payment?  Depends on the borrower and the transaction.

Here is a final spreadsheet with all three comparisons side by side.

Download Mortgage Insurance Comparison

Remember, any good Loan Officer is going to have all of these options available and you should at least know if there is a better option out there for you.

Next we talk about Loan Level Pricing Adjustments and how Fannie and Freddie decided to stick it to everyone.  Fun stuff!

Joe Burke

Your Chicago Mortgage Guy

773-742-6707

joe@yourchicagomortgageguy.com

 

Conventional Financing - Fannie Mae and Freddie Mac

When you hear us talk about 'conventional' financing, what we are referring to is mortgages backed and underwritten to Fannie Mae and Freddie Mac guidelines.  It's as simple as that these days.  There just aren't any other conventional financing options anymore.  Whether you walk into a Bank of America branch and get conventional financing, or through a Broker, we are all pretty much looking at the same underwriting guidelines and programs. 

The basic Fannie Mae and Freddie Mac program guidelines are the same for every institution.  Within those guidelines are product specifications that still go all the way to 100% financing.  That is only the first part of the story though.

Any loan package delivered to Fannie Mae and Freddie Mac requires not only Private Mortgage Insurance, but specific coverages as well.  Just like your car insurance, the higher the risk, the higher the rate of insurance.  In the case of mortgages, the closer you get to 100% financing, the higher the rate of insurance.  The worse the credit scores, the higher the rate of insurance.  You get the idea.  Now, the Mortgage Insurers are under no obligation to back every product that Fannie Mae and Freddie Mac have guidelines for, and this is where the product that we sell to the consumer is really crafted.

Like I said, currently there are guidelines in place at Fannie and Freddie for loans up to 100% Loan To Value of the subject property.  Five years ago we could even take that up to 103%, with mortgage insurance.  When individual markets began declining in value in 2008, Mortgage Insurers pulled back in a big way.  They immediately eliminated anything over 95%.  Then, they began scaling back to 90% and even 85% in some markets.  Slowly over the past two years, they have begun creeping back up to 95%, and most recently to 97% financing.  If you look at the guidelines currently in place at the Mortgage Insurers today though, compared to five years ago, there is a marked difference.  Current guidelines are significantly more stringent than they were previously.

So, what's out there?  The following programs are currently available for conventional financing.  Without getting into individual program guidelines and credit score requirements and differences in interest rate or origination fees, this is what we are offering as an industry right now, both for Single Family Homes as well as Condominiums.

• 97% Conventional Financing - Interest rate will be at least .50% higher than 95% conventional Financing
• 80% - 95% Conventional Financing - You shouldn't see any difference in interest rate, although the closer you get to 95%, the higher the mortgage insurance.

Stay tuned for the next post, where we will cover Loan Level Pricing Adjustments and Credit Score Requirements, followed by a post that is more specific to Mortgage Insurance Guidelines and some FICO score examples.  This will help to put it all into focus.

Happy Selling!

Joe Burke

Your Chicago Mortgage Guy

773-742-6707

joe@yourchicagomortgageguy.com

 

 

Mortgage Boot Camp

Happy Friday Everyone!

So, when I posted last week regarding a new 97% Financing option, I just kind of figured the general response would be 'Woo Hoo'!  But, the response I received was a lot more '97 percent?  I didn't even know we could go to 95%?'.  And I started thinking about it.  I guess most of what you get from us in the mortgage industry is the negative.  We can't do this, we can't do that, we are cutting this program, and you need a higher FICO score for this program.  That's on us.  We should be telling you about what you can do.  What can be financed and what you can safely tell your clients is out there so that you can sell more property. 

Over the next couple of weeks I am going to post regularly regarding current Mortgage Programs and Guidelines.  Not the negative, but the positive.  What you can go out and sell this Spring.  What is going to get your First Time Home Buyers into their first Condo or Single Family Home.  What is going to get your move up buyer out of their condo and into that next property. 

We are going to cover Conventional and FHA.  Mortgage Insurance and FICO scores.  We'll go over what exists in terms of Second Mortgage products and what you can expect in the Jumbo market. 

So, stay tuned.  There is a lot of great information on the horizon. 

Joe Burke

Your Chicago Mortgage Guy

773-742-6707

joe@yourchicagomortgageguy.com

97% Conventional Financing. It's Back....

I have to admit, I am still pinching myself to see if this is real.  It is.  This isn't about Fannie Mae or Freddie Mac.  They have had guidelines, that never really went away, for 97% financing.  This is about the Mortgage Insurance Industry insuring these mortgages.  And, they're back.

So, is this a game changer?  Yes, and no, not at all.  With the release of the new LLPA's(Loan Level Pricing Adjustments) by both Fannie Mae and Freddie Mac, a 97% mortgage will run you roughly .75%-1.00% above a typical 95% financing mortgage.  The monthly mortgage insurance isn't cheap either.  But, there will be instances where the consumer chooses to go with this product over a similar FHA mortgage.  

In the end though, I think this is a symbolic product gesture.  Yes, I made that up, but I think it's true. Making 97% financing available again is symbolic of the fact that the Mortgage Insurance Industry is loosening guidelines again.  What it really means is that an actuary somewhere sees opportunity with less risk than they did previously.  Even as Fannie and Freddie tighten there pricing model in the wake of new regulation about to hit us in April, somebody out there is starting to see a light at the end of the tunnel.

Hopefully this is just the beginning.  We could certainly use the product.

Joe Burke

Your Chicago Mortgage Guy

joe@yourchicagomortgageguy.com

773-742-6707

 

ChicagoAgent Magazine - Ask A Lender

Well, I guess I made the big time!  Here's my article from this month's ChicagoAgent Magazine.  You can also find it here at ChicagoAgent Magazine Online.

Ask A Lender

6 December 2010 No Comment

For this issue’s Ask a Lender, Joe Burke, a vice president of mortgage lending with Guaranteed Rate, answers questions posed by Chicagoland Realtors.

Q: I have spent countless hours and marketing dollars on condominium listings this year, only to find out on more than one deal that the condominium associations are not eligible for conventional mortgages. Is there any way to avoid this?
A: It has long been the norm to prequalify our potential buyers, but the same can’t be said of the properties themselves, and that needs to change. It is the logical next step these days when so many condominium projects are not currently ‘warrantable’ by Fannie Mae and Freddie Mac.

When a mortgage application is taken and the property or collateral is a condominium, the loan application is basically split into two separate underwrites. The first is the borrower package, consisting of income, assets and credit. The second is the condominium package, which is deemed by Fannie Mae and Freddie Mac standards as either warrantable or non-warrantable. If the condominium project is deemed non-warrantable, it is difficult, or even impossible, to obtain financing.

So, how can this be avoided? By prequalifying your client’s condominium association. While there are variances from lender to lender, some are more conservative than others when interpreting guidelines, there are 10 questions that can be asked up front that should give you a reasonable idea if there are going to be any problems that crop up during the mortgage process:

1. Is there a ‘Right of First Refusal’ in the condo declarations?
2. Does the project allow for a buyer to purchase more than one unit with a single mortgage?
3. Is the condo association currently involved in any litigation?
4. Does the project contain any commercial space? If so, what is the square footage?
5. Does any single entity own more than 10 percent of total units in the project?
6. Are more than 15 percent of the total condo units 30 days or more delinquent on their monthly assessments?
7. Is the project a condotel, have a rental desk, daily or weekly rentals?
8. Are there any special assessments currently approved, or have there been any in the past year?
9. If a unit is taken over in foreclosure or “deed-in-lieu,” is the mortgagee responsible for the delinquent HOA dues?
10. Does the budget call for at least 10 percent of the operating cost to be put into a reserve account as a line item in the budget?

Some of these questions can be deal killers if you get a “yes.” Others can be harmless to the transaction with the right documentation. And a few, if apparent up front, can be corrected before the unit ever goes on the MLS. But they will all become a problem during the underwriting process at some point if you don’t ask the questions up front, because the lender will.
As a Realtor, it has never been more important to have a strong relationship with a loan officer, who can help to prequalify your clients’ properties before the MLS. When a challenge presents itself prior to listing, everyone in the transaction can be prepared, the listing can be priced appropriately and potential borrowers can be targeted appropriately.

Q: If my client’s condominium association is deemed “non-warrantable,” are there any financing options available?
A: Yes, Guaranteed Rate has access to lenders that will finance a non-warrantable condominium project, but they won’t necessarily finance any non-warrantable condominium project. For instance, if it’s the owner occupancy that is an issue, there are lenders that will allow financing in the project. They will generally require a higher down payment and have a more limited product array, but are still generally very aggressive when it comes to interest rates.

Joe Burke is a vice president of mortgage Lending at Guaranteed Rate. He has been a loan officer since 2002 with a concentration in first-time condo buyers. He can be reached at 773.742.6707 or joe.burke@guaranteedrate.com.

The Dreaded 4506-T

How did this happen?  How did something as simple as verifying your clients income by pulling their tax transcripts from the IRS become such an issue during underwriting?

Over the years the purpose of the 4506 has not changed, however, it's usage has changed dramatically.  It used to be that having a 4506 in the file was merely a fraud prevention measure in that the Underwriter or end Servicer would only execute it in as a Quality Control document. 

Now, a 4506-T is executed on every single borrower, for every single loan application that is taken, in conjunction with the collection of W2's, Pay Stubs and actual Tax Returns from the borrowers.  This has caused a huge backlog and extended the time it takes to order and receive Tax Transcripts.  It is currently taking about 6 business days to order and receive Tax Transcripts from the IRS, while it used to take 24 hours. 

Is there a fix?  Probably not from the Processing and Underwriting side of things.  We are already checking and double checking addresses and requesting full Federal 1040's at the time of application, so that we order the transcripts correctly the first time around.  This one is really up to the IRS.  When the refinance volume goes down, it will surely help, but a faster automated system is probably going to be the only real fix. 

This is just one more instance of making sure that you set reasonable time frames for contracts and closings with your Borrowers and your Realtors. 

Joe Burke

Your Chicago Mortgage Guy

773-742-6707

joe@yourchicagomortgageguy.com

30 Days To Go....

It seems like just yesterday that the First Time Home Buyers Credit was extended through April 30th, yet here we are with only thirty days to go. 

In case you don't know, and I still get questions on this, you must be under contract by April 30th, with a closing prior to June 30th.  Both what I am seeing personally and what I am hearing from Realtor's out in the field, it's a mad dash for the finish line.  I have personally never written so many pre-approval letters in such a short period of time, but I haven't seen that many contracts yet.  That means my potential buyers are all still out there looking to write a contract. 

Advice from Your Chicago Mortgage Guy?  Don't wait until the last minute to write that contract.  You never know if there are going to be multiple offers, or worse yet, inspection or attorney review issues that end up killing your deal.  Since we basically only get one shot at this now, and only have 30 days left to take that shot, it's best you make an informed decision.  It's also best to be prepared.

What can you do to be prepared?  Line up your Lender.  Get Pre-Approved.  Talk to an Attorney and make sure they know that your contract is coming.  Ask your Realtor who they recommend for an Inspector and if you feel like you need to shop or vet them, do it before you write that contract.  We are about to get very, very busy with a lot of people who will be under pressure to do everything at once.  You don't want to be left on the outside looking in.

As always, contact Your Chicago Mortgage Guy if you have any questions or need any advice.

Joe Burke

Your Chicago Mortgage Guy

773-742-6707

joe@yourchicagomortgageguy.com

Get your FHA Applications in, PRONTO!

Happy Friday Everyone!  Hopefully you are not in front of a computer right now, seeing how it's 70 degrees here in Chicago and March Madness is in full swing.  I'll make this brief, but want to get this in front of everyone before they go out and sign a contract this weekend.

First, as stated previously, you have until April 4th to get your FHA application in and only get hit 1.75% for the upfront Mortgage Insurance Premium.  As of April 5th, it goes up to 2.25%.  So, if you have a contract, or are about to sign a contract, do your shopping quickly and make sure your lender gets their FHA Case number prior to April 5th.

Second, we are starting to get a sense of how long the Condominium Approval process is going to take when submitting an FHA application in a condo unit.  We are doing the initial Condominium Approval process in house before we send it off to HUD for final approval, and I am still quoting people a minimum of 60 days from contract date to close.  It is taking 10-15 business days in house and another three weeks once we submit our approved package to HUD for final approval.  Those turn times are only going to increase as we get closer to the April 30th deadline for the First Time Buyer Credit.  So, if you are looking to finance a condominium through FHA, best to get your application in well before that deadline.  We will talk more and more about this over the next two weeks here, so stay tuned.

That's all for now.  Call me or email me if you have any questions.  As long as they aren't about the NCAA, my brackets are already busted. 

Good Luck and Happy Friday!

Joe Burke

Your Chicago Mortgage Guy

773-742-6707

joe@yourchicagomortgageguy.com

FHA FMIP Increase, and lots of other acronyms...

It's official, and it doesn't look like it will be delayed or changed.  Effective April 5th, 2010, FHA Upfront Mortgage Insurance Premiums will increase to 2.25% of the base loan amount.  Currently the Mortgage Insurance Premium(MIP) is 1.75% of the base loan amount.  This will effect every FHA loan originated and receiving an FHA case number on or after April 5th, 2010.  Just in time for the expiration of the Home Buyer Tax Credit.  Nice that these agencies are all talking to one another about timing impementation of these items.

Here's how it works.  If you have a $100,000.00 purchae price, and are putting down 5% through FHA, your base loan amount would be $95,000.00.  Take $95,000.00 and multiply it by 2.25% and you end up with a Mortgage Insurance Premiuim (MIP) of $2137.50.  As the borrower, you can either pay that up front, or roll it into the loan amount.  If you roll it into the loan amount, your new initial loan is now $97,137.50.  The MIP is now called your Financed Mortgage Insurance Premium (FMIP).  Currently at 1.75%, that MIP is $1662.50, so there is a significant increase in cost to do an FHA loan.

So, why would HUD do this?  Especially right before the tax credit is coming to an end?

The upfront MIP you pay at close goes into an insurance pool that supports all FHA Insured mortgages, nationwide.  Every time someone defaults on a loan, this insurance pool is dipped into.  Put simply, this insurance pool is going broke.  It is WAY below the federally mandated minimums that it is supposed to maintain, and it will be flat broke before the end of the year if all of the current trends hold.  So, by increasing the FHA premiums for new borrowers, it should help stabilize and hopefully increase the liquidity of this insurance pool.  Unfortunately new buyers are paying for the sins of past buyers.

Joe Burke

Your Chicago Mortgage Guy

773-742-6707

joe@yourchicagomortgageguy.com

95% Condominium Financing

Tick, tock, tick, tock...  That's what it feels like with the First Time Buyer Credit deadlines looming out there.  I am getting lots and lots of calls right now for pre-approvals, and there seems to be alot of conflicting information out there.  So, let's get some things straight.

Is there financing out there for 5% down payments on Condominiums? 

Yes, but it depends on where you are, what your qualifications are and what you are buying.  Not long ago, you were required to make a 10% down payment to finance a Condominium through conventional, not FHA, means.  I am happy to say that we are starting to see some of our Mortgage Insurance partners expanding there guidelines.  While less strict, they are still more strict than your typical underwrite, which makes it more important than ever to get pre-approved with a Mortgage Professional that understands both the guidelines and the limitations, before you write a contract on a property.

Can you still do 5% or 3.5% down on a condominium through FHA, even with the elimination of the 'Spot Approval' process?

Yes again.  As an industry we have not been very good at educating our Realtor partners on this one.  In the short term, the elimination of the 'Spot Approval' process is going to seem more cumbersome to everyone involved in a transaction.  In the long run, it is going to make FHA Condo financing a much easier and understandable process.  We are now approving the entire Condominium project during the underwriting process, rather than the individual unit.  The idea being that we will be building a database of 'Approved' projects that will only need to be updated every three years.  If the project is approved for one borrower, it will eventually land on the FHA approved list and the next borrower to apply for an FHA loan in that particular project will go through a much simplified approval process, similar to the Fannie and Freddie 'Limited Review' process.  The overall guidelines for approval are the same with one gigantic change.  Right of First Refusal is no longer an obstacle to get the project approved.  So, all in all, more projects become eligible.  But, you should still be conscious of the over all health of the project and the association when submitting an application for an FHA approval.  As an industry, we are still underwriting the buildings with as much, or more diligence, as the borrowers themselves.

Does my building or association need to go through the FHA approval process prior to a sale or refinance?

No.  Can they?  Yes.  Once someone applies for a mortgage and goes through the process of getting the building FHA approved, it is approved.  You may have to go back through the same lender until the building is added to the FHA master list, but the next borrower should not have to get the whole building approved again.  In fact, this is the cheapest way to get approval for your building.  If a building or association approaches a lender to get the building approved separate from the mortgage process, they can do it, but it is expensive and there just aren't the advantages there were prior to the recent changes.

As always, call me for more details.  I don't like to post minim FICO scores and maximum Debt To Income ratios in a post like this because our market is changing so quickly and dramatically every day.  I am always available to answer questions though.

Joe Burke

Your Chicago Mortgage Guy

773-742-6707

joe@yourchicagomortgageguy.com

Wow, What Happened to Mortgage Rates?

To say Mortgage Rates have risen over the past two weeks would be an understatement.  Before Memorial Day weekend, we were still locking people in under 5.00%.  Now, we're getting pretty close to touching on 6.00% for the first time since last fall.  What happened and why did rates go up so quickly?

You may not feel like the economy is improving, but from where Wall Street is sitting, they see that a foundation for long term growth has been laid and we are finally showing signs of pulling out of this recession.  If you look at all of the inflationary indicators, they all point up.  Oil is higher.  Consumer Confidence is up.  Even Real Estate is showing signs of having finally hit bottom.  There were also a number of auctions of Treasury Notes that pushed Treasury Yields higher than they have been since last year.  It's all about confidence and that can be clearly seen in the rally in the Dow Jones and S&P. 

There is good news though.  First, even around 6.00%, mortgage rates remain very low, historically speaking.  There will also be times over the next six months where Wall Street pauses, treasury yields dip, the Fed pledges to buy up more mortgage backed securities and interest rates dip.  The key is being ready for these periods.  Forget about that rate you were waiting for under 5.00%.  It is likely gone for good.  But, if you still want to refinance, make sure your mortgage professional has all of your information ready to go.  When rates dip, lock in and close it.  Once this is over for good, it will really be over. 

Joe Burke

Your Chicago Mortgage Guy

joe@yourchicagomortgageguy.com

773-742-6707

The Department of Housing and Urban Development(HUD), They Just Don't Get It

I've been trying to keep a pretty rosy attitude when it has come to the Tax Credit being used as down payment.  I have tried to keep everyone informed while not expressing too much concern over whether this is actually going to do anything to help the housing market.  I'm done.

The announcement earlier in the week regarding the Tax Credit being used as down payment is garbage.  It doesn't mean anything and it isn't going to help. 

First.  It can only be used in conjuction with an FHA loan.

Second, It CANNOT be used to satisfy the minimum 3.5% down payment requirement currently in place with FHA.

So, you say it might be the difference between someone putting 3.5% and 5% down on a property, then putting them into a better position to afford the monthly payment?  The difference that would make on a $300,000.00 property would be about $4500 towards down payment.  That equates to about a $25.00 per month savings right now. 

Yes, I will agree that it could come in handy for closing costs.  But, I really don't think that there are that many potential buyers out there with 3.5% in there pockets who are not out buying a house SOLELY because they don't have the closing costs.  Especially if they are already going FHA, for one very simple reason.  FHA allows for up to 6% of the purchase price back to the buyer to help pay closing costs, which is how these deals are already getting done.

So, to you HUD, if you want to help, great.  If you want a P.R. campaign for the housing industry that gets potential buyers nowhere, well, we don't need it.  We have enough on our hands already.

Your Grumpy Chicago Mortgage Guy

Joe Burke

773-742-6707

joe@yourchicagomortgageguy.com

Okay, I can use the tax credit for down payment. Now, where do I get that money from?

It's official, we received our Mortgagee Letter 2009-15 on May 29, from the Us Department of Housing and Urban Development(HUD).  Download Tax Credit As Down Payment

HUD will now permit approved entities to offer "tax credit advances" with a lien put on the residence to be paid off and released once the home buyer recieves the future tax credit. 

So, what does that mean?  This is where it gets confusing.  As a Home Buyer, you have to get an "Eligible government agency or instrumentality of government" or a " FHA-approved nonprofit organization" to basically front the money and recover it by putting a short term lien on your property.  Now, there are nonprofits and government entities out there that have been and are currently offering down payment assistance programs similar to this.  The City of Chicago has Tax Smart and CPAN.  The Illinois Housing Department Authority(IHDA) offers Tax Smart and other bond programs for down payment assistance.  These would be the most likely agencies to offer a short term instrument to use as a down payment.  As of today, they haven't posted anything.  I'll keep my eyes open for anyone offering this bridge to get you into your first home.  Let me know if you see anything before I do!

Joe Burke

Your Chicago Mortgage Guy

joe@yourchicagomortgageguy.com

773-742-6707

Tax Credit For Down Payment... On again...

The Department of Housing and Urban Development(HUD) issued a news release this morning confirming that yes, they will allow for the $8000.00 First Time Home Buyer Tax Credit to be used towards down payment.  Thanks guys! 

So, with six months left to be eligible for the tax credit at all, we are finally moving in the right direction with this thing.  As soon as I see guidelines on what is available to Your Chicago Mortgage Guy in terms of a bridge product for down payment, I will ge them posted here.  But, for now at least, it looks like we will have something to work with for the rest of the year.  And that, is good news!

Joe Burke

Your Chicago Mortgage Guy

joe@yourchicagomortgageguy.com

773-742-6707

Oops, Did I Say That....Tax Credit Ineligible For Down Payment

I'll keep this brief.  HUD has reversed course on using the $8000 First Time Buyer Tax Credit towards down payment.  As reported by J. Craig Anderson of the Arizona Republic, there were, among other things, some pretty serious tax implications for the IRS. 

Tax Credit Ineligible For Down Payment

I wish I had better news.

Joe Burke

Your Chicago Mortgage Guy

773-742-6707

joe@yourchicagomortgageguy.com

First In - 2-4 Unit Condo's. Yes. We will do them....

With all the doom and gloom in terms of mortgage guidelines, soemtimes it's easy to miss the good stuff.

We will now do a first in closing on a 2 to 4 unit new construction or conversion condominium.  Yes.  You read that right.  If you have one contract on a 2, 3 or 4 unit building, we will close that provided the project meets all other Fannie Mae and/or Freddie Mac Condominium Guidelines. 

Here are the details.

• Project must be 100% complete
• No more than one unit can be a rental or investor unit
• No single entity may own more than one unit
• Project may not be involved in any litigation
• Non-Residential/Commercial Space may not exceed 20% of the total square footage of total project
• Project must carry 100% replacement cost for building/hazard coverage and $1 Million general liability coverage
• Budget must maintain a reserve of at least 10% of the buildings operating cost

Give me a call if you are having a hard time with your 2-4 unit buidlings and we'll see if you qualify.

Joe Burke

Your Chicago Mortgage Guy

773-742-6707

joe@yourchicagomortgageguy.com

30 Year Fixed Jumbo - Welcome Back!

That's right!  We've got a 30 Year Fixed Jumbo loan again.

As of today, we are at  6.00% on a 30 Year Fixed Jumbo Loan for a primary residence with .25% discount points.  The requirements aren't exactly pretty, but it is back.  Here are some of the parameters.

• Max 75% LTV with a 780 FICO
• Max 70% LTV with a 720 FICO
• Primary Residence Only
• Max Debt To Income is 40% - No exceptions
• Purchase and Limited Cash Out
• 6 Months PITI Reserves Required

Those are the basics.  There are also some pretty stringent Appraisal requirements.  I would have to look at each individual scenario to know if we meet all guidelines, but at least there is something out there to look at now.

Call me for more info.

Joe Burke

Your Chicago Mortgage Guy

773-742-6707

joe@yourchicagomortgageguy.com

New Insurance Requirements for Condo Owners

Fannie Mae is once again stepping up with more stringent guidlines.  Some times I am surprised at these, other times I am just surprised it took them so long to put them in place.  This is definitely the latter of the two.

Fannie Mae announced in it's April 2nd Condo Project Release Notes, that as of May 4th 2009, it will require "borrowers to obtain a "walls-in" coverage policy (commonly known as an HO-6 policy) unless the lender can document that the master policy povides the same interior unit coverage". 

First, I can say with almost 100% certainty that if you own a condo, your condominium's policy does not provide for this.  At least, I have never seen it.  Second, you should already have this. 

An HO-6 policy proides coverage for everything inside the walls of your unit.  But, it doesn't just cover your valuables, but also your appliances, cabinets, counter tops, fixtures;  basically, everything inside the four walls of your condo.  Your coverage will have to be "not less than 20% of your units appraised value". 

On average, a policy of this nature should run you anywhere from $200 per year to $500 per year, depending on the amount you want to insure for and the appraised value of your unit. 

So, if you are buying a place, or in the process if refinancing and don't already have a "walls-in" policy, it might be time to talk to your Insurance Agent.  Or, talk to mine!

State Farm

Barbara Janusek

5554 North Broadway

Chicago, IL  60640

773-561-4335

barbara.janusek.hbr9@statefarm.com

 

Joe Burke

Your Chicago Mortgage Guy

joe@yourchicagomortgageguy.com

773-742-6707

Update regarding Conforming Loan Limits in Illinois - We got no love...

I'll keep this pretty short.  Not a single area or "sub area" of  Chicago, or any of Illinois for that matter, was designated as qualifying for the increased conventional loan limit of $729,500.00.  So, for now at least, and probably for the rest of the year, we are going to continue to be capped at $417,000.00. 

I'll let you know if anything changes. 

Joe Burke

Your Chicago Mortgage Guy

joe@yourchicagomortgageguy.com

773-742-6707

What mortgage rates will do over the next 30 days....

I was reading the Sunday Chicago Tribune Real Estate section last night.  I know, it was Tuesday, but it's hard to get to all of Sunday's paper with a little one running around.  Anyway, I was reading the Sunday Real Estate section and I started to get hot.  I see this all the time lately.  The "What Mortgage Rates Will Do Over the Next 30 Days" prediction.  What a joke.  Do they go back and print what percentage of their respondents were correct?  Or which ones?  That's like saying, "I predict that Drew Barrymore will date another A-Lister and it will end miserably".  Does anyone take these predictions seriously?  Unfortunately, Yes!

If you are thinking about refinancing or purchasing a property, you take this very seriously.  The Chicago Tribune is the local authority in terms of Real Estate journalism.  Bankrate.com has made itself into something that people tend to take seriously, rightfully or not.  So, what's the answer?  Don't take the paper or what you read online as fact.  Talk to your mortgage professional.  Set goals that are particular to your situation.

If you are thinking about refinancing, get your loan officer all of your information and discuss where it makes sense to pull the trigger.  Turn times are going to start letting up at some point and if the market stays where it is for a little while, rates are going to look like they are coming down regardless of what bonds are doing.  When and if they do, you want to be ready.  There isn't time to shop with three or four or five people anymore.  The market is very fickle.  You have to find someone you trust and be ready to move with them.

If you are purchasing.  Throw rates out the window.  Rates are unbelievably low historically speaking, even if we creep back up to 6.00%.  There is inventory out there to look at and pricing is at it's best in ten years.  The best thing you can do as a buyer is to sit down with your mortgage professional to discuss what your comfort level is in terms of monthly payment.  The interest rate won't sway that more than a few dollars in either direction.  If you have a plan, and you keep within these parameters, there is no reason not to go out and get into a home right now.  Plus, if rates drop, assuming your home holds it's value, there is no reason you cannot refinance later this year. 

So, talk to your lender.  Get your documentation together.  Sit down and put together a plan.  You don't want to get left out in the cold in an environment like this.

By the way, my prediction?  Rates will go up, rates will go down.  Maybe even before you read this. 

Joe Burke

Your Chicago Mortgage Guy

joe@yourchicagomortgageguy.com

773-742-6707

"CNN Money says Interest Rates are at an all time low. Why are you quoting me 5.75%?"

I can't tell you how many times I have had that exchange over the past week.  Mortgage rates bottomed out during the second week of January and have risen pretty steadily since.  There are many reasons for this, but none of them have to do with a traditional market place.

• First, rates were artificially low due to the government purchase of huge sums of mortgage securities in December and early January.  Problem:  We are essentially printing our own money too buy this debt deflating our currency and thus pushing up interest rates.
• Second, mortgage applications soared and demand caused lenders to lock clients in for longer periods of time, inflating interest rates.  We will see this pressure ease as applications have slowed.  But, it won't matter much if the base rates keep pushing up.
• Third, new Loan Level Pricing Adjustments from Fannie Mae and Freddie Mac have caused lenders to pass along either higher rates or higher fees to their customers.  These are here to stay, at least for the time being. 

So, where do we go from here?  There is very little in the way of direction from Washington right now.  As long as we are floundering around without a strict monetary policy and are arguing over what will unquestionably be the largest spending bill in human history, this ship is not going to have a direction.  We are litterally on a ship without a navigator at this point and everything that happens from day to day is a complete reaction to what happened five minutes previous.  Until someone takes the wheel, will keep spinning in circles.

If Congress passes any version of the spending bill, it is likely that there is some relief when it comes to mortgage rates.  But, there is no guarantee there as banks have never been in a position to price in an environment like this.  Here's what we have to get used to.  Mortgage rates ARE at an all time low.  If you look at the last 15 years, getting a 30 Year Fixed mortgage for under 7.00% is unbelievably low.  And, with the number of foreclosures and short sales out there, housing is becoming more affordable than it has been in years.  Bottom line, if you can qualify for a mortgage and are in the market for a new home, this might be the best time to buy a home in 50 years.

Joe Burke

Your Chicago Mortgage Guy

joe@yourchicagomortgageguy.com

773-742-6707

Freddie Mac to follow Fannie Mae in raising Loan Delivery Fees - Told you so moment....

Happy Monday!  Well, I said it would happen and it did.  Freddie Mac is following Fannie Mae and raising their loan delivery fees.  We have discussed this in depth over the past three weeks and new it was coming, it was just a matter of time.

Download Freddie - New Delivery Fees

There are generally two roads to take in this industry when you talk to your clients and referral sources.  You can paint a pretty picture and sell something that you know almost certainly is about to go away, or you can advise them on what realistically will be coming in the market place.  Which one would you rather get your advice from?  Some times I do enjoy a little "I told you so" moment.

Joe Burke

Your Chicago Mortgage Guy

joe@yourchicagomortgageguy.com

773-742-6707

What is going on with mortgage rates?

I hate quoting interest rates in a forum like this.  It is absolutely a no win situation for a loan officer.  As we have discussed in earlier posts, it is virtually impossible to compare rates from one customer to the next anyway, but it's likely that people will think that the given quote is a reflection of your interest rate anyway.  For this exercise, so be it.

If you called me today with these scenario's, these are likely rate quotes on a  30 Year Fixed.

Purchase - Single Family Home - 20% down - 30 Day Lock - 5.375%

Purchase - Condominium - 20% Down - 30 Day Lock - 6.125% or 5.375% paying .750% Discount Point

Purchase - Condominium - 25% Down - 30 Day Lock - 5.375%

Refinance - Single Family 20% Equity - 90 DAY LOCK MINIMUM - 5.99%

Refinance - Condominium - 20% Equity - 90 Day Lock - 5.99% paying .750% Discount Point

Now, first off, for legal reasons, I am not guaranteeing any of these rates.  There are factors like FICO scores that can change these. 

These are though, a pretty good snapshot of the significant difference in interest rates that we are quoting right now.  Playing into these rates are pricing adjustments that have been implemented by both Fannie Mae and Freddie Mac as well as increased lock times for refinances.  But, the one thing that the consumer cannot see here is that banks are just not letting us build these pricing adjustments into the interest rate any more. 

Banks learned from the last Refinance Boom that by allowing loan officers to build fees into the interest rate, the consumer had absolutely no tangible benefit to staying in the mortgage that they were given.  If rates dropped again, the consumer refinanced again.  If the property rose in value in a very short time period, it was a no brainer to sell and move up into a bigger property.  The consumer had no "skin" in the game, so to speak.  I remember when I first got out of college in the late 90's, my friends who were buying condo's or homes, would brag about getting a loan with only "One Point", or "Zero Points".  Well, Points are back. 

Investors are taking a very hard look at what specifically is performing well in terms of mortgages.  FICO scores, property type, down payment and the borrowers over all ability to repay a loan are all being examined in earnest.  In turn, banks are having to pass this risk back to their customers.  This is going to come in the form of points to borrowers.  If you are buying what is considered a riskier property, specifically condo's or investment properties, the borrower is going to be expected to bring something to the table. 

It's time to sit down with your mortgage professional to find out what is and isn't going to affect your situation.  There is nothing that can be done to avoid this, but to educate ourselves and our clients.  One very obvious solution in this market is to ask for closing cost credits to cover some or all of these fees.  Right now, that option is still on the table if you have an educated borrower. 

Joe Burke

Your Chicago Mortgage Guy

joe@yourchicagomortgageguy.com

773-742-6707

4.5%? We'll see...

Well, I got a lot of emails and calls on this today. I'll update my blog with this in a second.

I have pulled up and read everything that I can find on the proposal to lower mortgage rates to 4.5% and here's what I think.

First, I don't think it will apply to anything but home purchases. I really don't see the Treasury Department essentially financing Fannie Mae and Freddie Mac to refinance A paper first mortgages that aren't even deliquent. If this 4.5% did apply to delinquent or soon to be deliquent first mortgages and they decided that those people would qualify, they would not get this out of session because of all of the good borrowers who would put there arms up in protest.

Second. Offering first mortgage rates at 4.5% to buyers to help stimulate the economy makes way more sense than refinancing already existing mortgages at an interest rate that is basically below the rate of inflation. If every mortgage in this country is financed at a rate this low, Fannie, Freddie and every bank that holds this paper is going to lose money. But, by offering this to stimulate the purchase market, they will stimulate all of the other areas of the economy that benefit from a strong housing market. Real Estate trickles down to just about every consumer industry. Think Home Depot. Someone at my luncheon today said it best. "It was Real Estate that got us into this mess, and it's going to be Real Esate that gets us out."

I will keep my eyes and ears open, but for now, this is just another program being floated out there by the law makers trying to stimulate a stagnant housing market. Even if something like this did happen, I don't see it happening tomorrow. Let's keep our fingers crossed that we see something like this in the new year.

Here is the best article I found on the subject.

http://www.housingwire.com/2008/12/04/treasury-considering-45-percent-mortgages-report/

Joe Burke

Your Chicago Mortgage Guy

773-742-6707

joe@yourchicagomortgageguy.com

American Home Mortgage Customers - Call me!

Wow.  That's all I can say right now.  Well, not really.  I just got off the phone with a past customer of mine who's mortgage was bought at some point by American Home Mortgage.  He was sent a package in the mail last week that basically offered to knock 20% off the remaining loan balance if he can either pay off the mortgage or refinance it in a timely manner.  Yes, you read that correctly.  My client was just handed 20% equity in his home.  If you are an American Home Mortgage customer, call me immediately.  Let's fiind out if you qualify as well.

Joe Burke

Your Chicago Mortgage Guy

773-742-6707

joe@yourchicagomortgageguy.com