I often hear about the lengthy letter borrowers are sending their banks to explain their hardship. Once the letter is sent they expect the bank will contact them right away to offer a loan modification; but it doesn’t work that way and borrowers get frustrated. Even though having gone through some financial issues help banks being more empathic; what they really want to know is if you can afford a “modified payment”.

Fannie Mae uploaded a Video in YouTube explaining the documents your lender need to be able to help you. Before you call your Lender gather the following information:

• Mortgage Statement
• Condo/Homeowners Association Statement (if applicable)
• Pay stubs and W-2’s if employed or Profit and Loss Statement if Self Employed
• Income Tax Returns
• Statements on every other debt, balance owed and monthly Payment. Including lines of credit, credit cards, car loan, student loans in other words….document every single penny you owe. Remember that this is not to tell the bank how broke you are but to help them figure out if you qualify for a “new loan”.
• And of course a letter stating the reason why you can’t pay the current mortgage payment.

Be truthful, don’t hide anything!!! and Good Luck

With appraisals becoming more difficult, agents are sometimes having them completed before any inspections are done.  If the customer does not meet face to face with the loan officer and completes their application, via email or phone, the appraisal cannot be ordered for 7 days.  It then takes another 7 days to get the results back.

Another new rule has to do with the Truth and Lending disclosures.  If anything changes in the loan amount (reduction for appraisal, credit for repairs, credit for closing costs) and the APR changes 1/8 of 1%, new disclosures have to be issued.  If new disclosures are issued, you must wait 7 days before a closing can be scheduled.  Often times these changes happen in the middle of the transaction, so you must let the loan officer know.

Good communication with the loan officer, is key to closing a transaction.

This is good news for our market here in Coconut Grove where price points are higher than other areas and buyers have been struggling to come up with the high down payment requirements to get a Jumbo Loan.

Read James’ post in its entirety here.

James Venney is a mortgage banker with Gibraltar Private Bank and Trust.

To stay updated with all of the current Coconut Grove real estate information, receive my blog posts directly to your inbox by subscribing here.

If you are interested in buying or selling real estate in Coconut Grove, please give me a call at 305.342.1623 or send me a note here.

More than likely, you are a buyer who is also eligible for a 203K streamlined loan. This program from the federal Housing Administration is fantastic for a home buyer who is purchasing a home in need of home improvements, such as a foreclosure home.

We are seeing many foreclosure homes missing appliances, having roof leaks, in need of painting or requiring new carpet.

The FHA’s Streamlined 203(k) program permits homebuyers to finance up to an additional $35,000 into their mortgage to improve or upgrade their home before move-in. With this new product, homebuyers can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or FHA appraiser.

What improvements are eligible under the new Streamlined (k) program?

• Repair/Replacement of roofs, gutters and downspouts
• Repair/Replacement/upgrade of existing HVAC systems
• Repair/Replacement/upgrade of plumbing and electrical systems
• Repair/Replacement of flooring
• Minor remodeling, such as kitchens, which does not involve structural repairs
• Painting, both exterior and interior
• Weatherization, including storm windows and doors, insulation, weather stripping, etc.
• Purchase and installation of appliances, including free-standing ranges, refrigerators, washers/dryers, dishwashers and microwave ovens
• Accessibility improvements for persons with disabilities
• Lead-based paint stabilization or abatement of lead-based paint hazards
• Repair/replace/add exterior decks, patios, porches
• Basement finishing and remodeling, which does not involve structural repairs
• Basement waterproofing
• Window and door replacements and exterior wall re-siding
• Septic system and/or well repair or replacement

What are the minimum and maximum amounts for repair costs under this program?

Given the need for homeowners to make minor repairs without exhausting personal savings, and in consideration of the increasing cost of materials, the minimum repair cost of $5,000 is eliminated and the ceiling is now raised to $35,000.  This revised maximum repair/rehabilitation amount recognizes the cost of making older homes more energy efficient.  Note that as described below, when the repairs exceed $15,000, the mortgagee must perform or obtain an inspection to determine that all listed repairs were completed.

Use a Realtor, Susan Penn, EWM Realtor, 954-557-5993 cell, penn.s@ewm.com email,who uses mortgage consultants with this knowledge!

This in turn could lead to raising short-term interest rates sometime middle or late next year, so now is the time to take advantage of low interest rates while they last.

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On May 28, 2009, Irma Marquez, one of EWM’s top Weston Town Center’s real estate agents, tweeted about checking out your property values.  I caught the tweet in my friends’ feed on Facebook.com.

I accessed my tax record on BCPA.net for both properties — my personal residence  and my investment property.  I was shocked to find how the values had declined and how the property taxes had been reduced.

Since  I escrow my taxes and insurance, I decided to write the following letter to my mortgage companies (the numbers were reflective of the properties respectively):

_____________

Date: June 10, 2009

(To Mortgage Company)

Reference: Subject Property; Subject Loan Number

As you know, you are taking $335.68 a month for taxes and insurance on the above-referenced property. The taxes were based on taxes paid last year of $4,196.02 based on the assessed value of $195,660.

Recently, Broward County has reassessed our properties since we are in a declining market.  The assessed value is now $133,040, as evidenced by the BCPA.net printout dated 6/1/2009.  As you can see, the value has decreased approximately 34%. $133,040 times the millage rate (chart #0513) of 20.8884 would put my taxes at around $2,778.99. I have also attached the millage rate chart for your perusal.

Please note these adjustments accordingly and reassess my escrow account immediately. I understand that a cushion must be maintained; however, I believe that my monthly escrow could be reduced which would reduce my monthly mortgage payment.

Please govern yourselves accordingly.

VTY – Karen Bargery Ross
Enclosures (1) BCPA Printout; (2) Millage Rate Chart; and (3) Current Statement for Reference

____________

On June 22, 2009, the subject mortgage company of my investment property advised me by letter that they were completing an escrow analysis and that I would hear from them forthwith. Shortly thereafter, I received my escrow analysis printout with a statement that I was entitled to a $1,040.99 refund from the surplus.  As an added bonus to the check that I received, my next statement reflected a reduction in my monthly payment.

I am still awaiting a response and refund from my home mortgage.  The company wrote me two letters that they were “working on it.”

Even though I would have received a surplus at year’s end, it was a nice pick-me-up to receive the refund and reduction at this time.

Thank you, Irma, for your timely tweet.  This is just one more reason that the EWM agents are on top of their game — and Irma Marquez is certainly an asset to her profession and to our Weston EWM office!

Financially troubled homeowners who have The program, launched in March, is designed to lower monthly payments for 3 million to 4 million borrowers, although only about 200,000 have been helped so far. Lenders agreed this week to adjust 500,000 loans by Nov. 1.  Read more…….