Tom and Chris Gresham

Tom and Chris Gresham just closed their loan with Cornerstone Mortgage. Listen to what they have to say about their experience.

FHA REFORM

This week a big step forward was taken with FHA Reform to help preserve the FHA Mutual Mortgage Insurance Fund. Congress passed H.R. 5981 which will allow the FHA to adjust its upfront mortgage insurance premium down 1.00%. The annual mortgage premium will increase to .85%-.90% on amortization terms greater than 15 years. This is to preserve financial integrity of the insurance fund while at the same time strike a better balance between conventional and government lending. "With this authority, FHA is in a better position to address the increased demands of the marketplace and return the MMI fund to congressionally mandated levels without distruption to the housing market."
This new law will be effective as of September 7, 2010.

Check out the link below for more coverage of this issue.

H.R. 5981 FHA Reform

Congratulations to Jerry and Beth Minor!

Fannie Mae Increases Penalties for Borrowers Who Walk Away

Working with your servicer is always a good option. Fannie Mae has recently announced that borrowers will not be allowed to just default on their loans without completing a workout alternative in good faith. If a borrower does not put in a good faith effort they will not be eligible for a Fannie Mae backed mortgage loan for a period of seven years from the date of foreclosure. However extenuating circumstances are always reviewed on a case by case basis. So simply walking away from your loan is not an option. Work with your servicer and supply them with all relevant information and they can provide you options that go beyond foreclosure. By working with your servicer on your options you will allow yourself the option for a new mortgage loan in as little as three years.

Check out the full article below.

Fannie Mae Increases Penalties for Borrowers Who Walk Away

Fannie Mae's Loan Quality Initiative

Beginning June 1st, lenders will order a second full credit screening immediately before closing. This new ‘double check’ policy is part of a new effort to cut down on fraud by borrowers and shoddy underwriting by lenders.

This loan quality initiative requires lenders to pull two credit reports for each mortgage transaction and additional verifications such as borrower occupancy plans for the property, Social Security numbers, and Individual Taxpayer Identification Numbers.

The last minute credit report will be designed to find out whether you obtained or even shopped for new debt between the date of loan application and closing. If you’ve made applications for credit of any sort – furnishings or appliances, automobiles, landscaping, new credit cards – the closing may be postponed while the lender further investigates if these purchases affect your debt-to-income ratio. The extra debt may deem you ineligible for the mortgage because you may appear unable to handle the payments.

Marc Savitt, president of the National Association of Independent Housing Professionals, claims the situation is quite common. “Most often the new debt involves furniture or other goods for the house. However, we have seen debt for new cars and other major purchases.”

So, in what ways can homebuyers and refinancers prepare for this upcoming credit check procedure? Lenders and credit reporting company executives agree, in unison, that everyone should follow this simple rule: abstinence. In other words, between the time you apply for the mortgage and the date of closing (which can range from 45-60 days or more) don’t apply for new credit unless you discuss it in advance with your lender and they approve.




Read article on Washington Post website

20 Hours of Class!

For years the mortgage industry has been the place for sales people who had little or no financial education to make money. Unfortunately over the past 13 years as underwriting guidelines disappeared and more bartenders became originators, the concern for the client and their financial well being become less of a priority. If you had energy, a warm personality and wanted to make money, being a loan originator was a great career choice. Up until the middle of 2003, you could walk into most bars and swing a dead cat in a bag and hit 3-5 people that called themselves loan originators. Real Estate agents started trying to originate loans, people would do it as a second job: it was all about making easy money.

Then things started to get tough and we saw some people get out, but not enough. By 2006 there was some consolidation going on but in 2007 when the mortgage crisis began to show and companies were going out of business and others were being acquired, we really started to see the people who were only interested in the low hanging fruit leave the game. This gave us a great opportunity to clean up the profession or at least create a level of competency for those that remain and those that wish to enter the industry. Thus the SAFE act was passed in 2008 requiring that all those that wish to originate mortgages be nationally licensed, go through 20 hours of class time, complete a background check and pass a national test.

I just completed the 20 hours of classroom work and although it was extremely difficult for me to sit still for two 10 hour days, I realized the importance of the SAFE act and why we need to set a level of professionalism in this industry. We are dealing with the biggest investment most people will make in their lifetime. For any originator to simply put their financial interest above their client’s well being is a moral crime and we have seen far too many years people committing this crime. Hopefully through education and licensing we will be able to hold ourselves to a higher standard and get back to ensuring the American Dream for those who want it.

Mortgage Action Alliance: Call to Action

The Senate financial regulatory reform bill, S. 3217, the Restoring American Financial Stability Act of 2010, is being debated by the full Senate. This bill's risk retention provisions would have a devastating impact on the nation's real estate market. However, a bipartisan amendment to the proposed legislation has been offered by Senators Mary Landrieu (D-LA), Kay Hagan (D-NC), and Johnny Isakson (R-GA) to develop regulations that would exempt certain "qualified mortgage loans" from the risk retention requirements of the bill.

Please take action NOW to urge your senators to support this amendment to S. 3217 to ensure that the nation's real estate market has ample liquidity for high quality, well underwritten mortgages.

Visit the following link to learn more about joining Mortgage Alliance Action:

MortgageActionAlliance

The Mortgage Action Alliance (MAA), Inc. ® is a voluntary, non-partisan and free nationwide grassroots lobbying network of real estate finance industry professionals, affiliated with the Mortgage Bankers Association