It may not seem like many people are buying new homes, but even economic downturns never kill real estate completely, and there is a kind of security in home ownership that renting simply does not provide. When shopping for your new home, however, it’s important to factor in the cost of insurance for your home, since your lender will require you to carry it.

When looking at houses, it’s also a good idea to consider whether or not they will be more or less expensive to insure. Factors to consider include:

• Locations of fire hydrants - is one close by?
• Distance from fire department - some insurers give a break for homes within a mile of the fire house.
• Electrical system - if the house you’re looking at is an older home, you’ll want to be sure this has been updated.
• Roof - is it in good repair with no evidence of leaks? Are you also getting a roof inspection? You may wish to consider one.
• Outdoor equipment - does the home come with a pool or trampoline? If so, you may be paying a higher premium.
• Alarm system and smoke alarms - if these are already in place they’ll net you a discount, if not, you may want to consider adding them. Smoke alarms, specifically, are required by law in much of the country.

If you are torn between two houses, knowing which would be less expensive to insure could help make the decision.

Work with the best lenders in the United States and get qualified for the best FHA program that fits your situation! Some of the most popular FHA programs include the FHA Streamline program, the FHA Secure program and the FHA Hope for Homeowners program.

Get Qualified Now!

If you are currently in an FHA loan and are *not* late on your payments, FHA has designed a way for you to take advantage of lower interest rates without having to completely requalify for a new loan.

It is called the FHA Streamline Program.

The Streamline program was designed to allow borrowers who are currently in an FHA loan and are not late on their mortgage payments to “streamline” their loan into another FHA loan at current market rates.

If you are currently in an FHA loan and your interest rate is over 6%, it currently makes financial sense to speak with your mortgage professional about the FHA Streamline program.

The FHA Streamline program is one of the few loan programs that are available where you can refinance and get a lower the interest rate on your home and:

• No appraisal may be required
• No income documentation is needed
• No asset documentation is needed

When speaking with your mortgage professional, ask them about the FHA Streamline With No Appraisal program and what it takes to qualify for it.

With the government announcing that they will be buying massive amounts of Mortgage Backed Securities as a method to unfreeze the credit markets and as a result drive interest rates down, you may be surprised at how easy it is to lower your interest rate and save money each month on your mortgage payment.

Yes.

At least, I think so.

They wrote a press release about it… and lots of people are asking me about it…

So it must be real, right?

Well, to give you an update, I am working with a handful of people at various stages of the origination process who seem to be good candidates for a Hope for Homeowners loan.  And more and more people are contacting me asking about the newly-announced FHA Hope for Homeowners program and how to qualify, what will work and won’t work with the guidelines, etc.

The good news is that FHA has issued a few press releases about the program and we have some high-level guidelines to look at as we begin to work with people to help them get qualified.

The bad news is that many lenders and investors have not yet put their guidelines in place and so we caught in this cycle of “maybe this will work” but not knowing for sure and often times many lenders are not sure what they can and can’t do.

As a result, we have yet to *complete* an FHA Hope for Homeowners loan — although we have a few at various stages of the origination process.

Many of the people we talk to may be able to realize more benefit from a short-refinance than they would benefit from a Hope for Homeowners loan and so we are working with lenders to do a short refinance when possible.

How does a short-refinance work?

Think short-sale except for rather than sell your home to someone else for less than you currently owe, you just refinance it and your current bank excepts less than you currently owe.

Short refinance, Hope for Homeowners, loan modification, short sales.

In today’s mortgage world, those are the three most common things that we seem to be talking with people about.

Which one is right for you?

It depends on things like whether you want to live in your home or just get rid of it.  Or whether or not you are current on your house payment.  Or who your current lender is. Or whether or not you currently could qualify for a new loan.

But if you are in a situation where you currently owe more than your house is worth, you cannot afford not to start talking to experts about what your best option is.

The FHA Hope for Homeowners loan program officially began on October 1, 2008.  The objective of the Hope for Homeowners program is to help homeowners who are in a negative-equity (they more than the house is now worth) situation and may be in a toxic adjustable rate mortgage, get a fixed rate FHA mortgage loan they can afford.

The key elements of the FHA Hope For Homeowners loan program include (this is not an all-inclusive list):

• Your current mortgage payment must be more than 31% of the your gross monthly income.
• You must not have misrepresented your income on your original loan application.
• You must be able to qualify for a new FHA 30-year fixed rate based upon your current documented income.
• You will be required to share in future home appreciation with the FHA.
• The new FHA mortgage loan will be a maximum of 90% of the home’s current appraised value.  All second mortgages or any other liens on the property will need to be extinguished — usually meaning that the 2nd mortgage holders will have to agree to a loss of principal.
• The program is completely voluntary; lenders are not required to participate.

I am currently helping people obtain new FHA loans who meet these criteria.  Since not all lenders are excited about participating in the FHA Hope for Homeowners Program, the first step to seeing if it can benefit you is to pick up the phone and call your current lender.

Ask them if they are participating in the FHA Hope For Homeowners Program.

If they are participating in the program but cannot help you get a new FHA loan because they are not an approved FHA lender, you have come to the right place!  I will be happy to help you, you can call or email me anytime.

I have been talking quite a few people this week who would like to refinance their house through the FHA Secure Mortgage program, but can’t for one reason or another.  These people are s-t-u-c-k in their current loan and usually they think all is lost and that they are going to face foreclosure…

Until I tell them about “Loan Modification”.

I don’t actually do loan modifications — it is a process and negotiation between a legal firm and a lender where the legal firm negotiates with your current lender to get you into a better loan.  Often times as a result of these negotiations, the loan that people end up with is a better loan that I could have gotten them if they would have refinanced with the FHA Secure mortgage program!

Here are a few signs that you may be a candidate for loan modification:

• You are currently behind on your mortgage payments
• You have recently been denied when applying for a refinance of your current loan
• Your interest rate has adjusted or is going to adjust soon
• You have a prepay penalty on your current loan
• When you got your current loan, something “just didn’t seem right”
• You are concerned that you may soon be facing foreclosure or are currently in the foreclosure process
• You have some sort of hardship that is causing you financial difficulty

These are not the only signs that the loan modification process can help you, but it is a start.  Loan modification is not free (have you ever met a lawyer who would work for free?  I haven’t!) but if your options are either loan modification or foreclosure, it is definately worth it!

Call or email me and I can show you how to get started with the process.

According to a HUD press release released today:

WASHINGTON - U.S. Department of Housing and Urban Development Secretary Steve Preston today announced that 300,000 families have refinanced their mortgages with HUD’s affordable mortgage insurance program. Since September 2007, FHA Secure - the Federal Housing Administration (FHA) refinancing product - has provided struggling families with expanded access to safe and affordable mortgage financing. FHA is on pace to help 500,000 families by the end of the year.

“FHA remains a source of hope for families who want to stay in their homes,” said Preston. “The Bush Administration’s smart, practical solutions to expand FHA-insured financing are offering a safety net for hundreds of thousands of families in need of affordable home loans. We are focused and determined to work through the current challenges in the mortgage market.”

Are you having trouble making your mortgage payment?  Pick up the phone and call your lender.  You are not alone and many people are in your same situation.

Because so many people in today’s world are having trouble making their mortgage payments on time, lenders are hiring people in their “loss mitigation” departments so there is a better chance than ever before that you can actually talk with someone.

When talking to your lender, here are a few of the ways that they could possibly help you if you are having trouble making your mortgage payments:

1. They could be willing to accept a partial monthly payment for a period of time and put the rest of the payment that you can’t afford to pay into the principal balance of the loan. Effectively, they will allow you to “tack on” money that you owe to the back of the loan. This might be a good solution if you are experiencing a temporary situation such as job loss or a short-term illness or family situation.

2. They could allow you to “skip” a payment (or two?) and have the missed payment added into the total loan amount. Again, this may be a solution if the financial problems that you are experiencing are temporary.

3. They could waive late payment fees that may have accumulated. This may be a solution if you have several late payments already and are just trying to get caught up. This is probably the simplest option of all of these listed.

4. They could set up a payment plan with you for an extended period of time (think 12-36 months) where they will add a fraction of your outstanding loan payments to your payment each month until you are caught up. For example, if you are currently $2,400 behind, you might be able to set up a payment plan where you pay $100 extra each month for 24 months.

5. They could offer you a completely new loan with a new amortization schedule. I see this happen the most when people use a loan modification company to help them negotiate with the lender. Usually, the loan modification company is getting people a 5.X% 30 year fixed rate (better than you could get refinancing in today’s market). The reason that the loan modification company is usually able to do better than just the consumer in negotiating this is because there are truth-in-lending (or similar) violations in the original loan and they use that to your advantage to pressure the loan servicing company into giving you a competitive fixed rate.

6. They could simply do a “principal reduction”. I see this happen most often in some combination with #5 and when done by a loan modification. Most of the time, it seems that consumers are just not aware or savvy enough (who would be?) to know all of the options that are available to them but a principal reduction is more common than you may think in today’s world.

These are only some of the things that are possible when working with your current lender if you are having problems making your payment.  I am sure there are more ways that a lender can be creative if they want to help you — and when it costs so much to actually foreclose on someone, believe it or not… lenders just want you to make your payments — they don’t actually want your house!

Have you had an FHA loan in the past?  It is possible that you may be due an MIP refund and may not even know about it.  The easiest way to find out?  Go here and search by your last name.  It takes about 20 seconds, is free and is worth doing if you suspect that you may be owed money.  Some people are owed more than $1,000 and it is easy and free to claim it.

If you have any more questions about your MIP account or why you would be getting a refund, just let me know!

Last week, I touched briefly on Loan Modifications and it looks like they have hit the main-stream news!  Today, there was a feature article in the New York Times about loan modifications and it highlighted one of the companies that I have been working with for a few weeks now — LoanSafe.

Some highlights in the story about LoanSafe and quotes from it’s CEO Moe Bedard include:

• LoanSafe charges a flat fee to analyze loans and according to Moe, they have found problems in at least 80 percent of the 300 or so mortgages they have examined.
• Among the problems found were notary problems, Truth-in-Lending-Act (TILA) violations and Real Estate Settlement Procedures Act (RESPA) violations.
• One common violation occurs when the interest rates or fees change between the time a borrower initially receives a cost estimate on the mortgage and when the borrower actually closes the loan.

According to Moe:

“When presented with these findings, most lenders and servicers quickly agree to a loan modification and many of the deals that my firm has arranged have an initial interest rates in the 3 percent range.”

Could you afford your mortgage payment if you had your lender modify it to a 5.5% fixed rate?

If so, let me know and I can put you in touch with the best in the business.