TRID-Top 9 Things Real Estate Agents Should Know

Uniform State Test Adopted by Missouri

Fourteen months ago the MBA of St. Louis asked the MBA of Greater Kansas City and the MBA of Missouri to join us in affecting change in Missouri. (At that time, Missouri was one of only 14 states still requiring a second state-specific test for licensed mortgage loan originators).

On January 1, 2016, independent mortgage bankers will no longer be required to take a Missouri state-specific test.  This will allow loan officers to save money and time in getting their license.  Great news! 

Importantly, the list of all states/regulators that have yet to adopt includes: Arkansas, Colorado, Florida, Illinois, Minnesota, South Carolina (BFI and DCA), Utah DRE and West Virginia.

TRID-We Are Ready!

Summer is over and fall is here.  Along with the weather changing, the mortgage industry is going through a big change.  We want to make sure you know what is going on.  

Beginning October 3rd, TILA-RESPA (commonly referred to as "Know Before You Owe") changes took affect.  You may be wondering how this impacts you as the buyer?  

The whole goal of this rule is to help consumers understand their options, choose the deal that’s best for them, and avoid costly surprises at the closing table.  (These things have always been important to us).  

You may have also heard that these changes could possibly delay closings.   We want to assure you we have been preparing for these changes for the past 12 months and increased our staff.  We have always been committed to speed.  The main take away is to stay in constant communication with us early and often.  Last minute changes can, in fact, lead to your closing becoming delayed.

Watch this short video for more:

https://www.youtube.com/watch?v=BazmJYxZoGY&feature=youtu.be

If you have any questions, please give me a call.

Chris

The Two Largest MLS's in Missouri Agree To Share Listing Data

As of September 1, 2015 realtors in Kansas City and St. Louis will be able to share listings.  This will give someone almost the entire state to look at when they are looking for houses!

*MARIS  and **Heartland Multiple Listing Service (HMLS) of Kansas City excitedly announced an agreement to share real estate listing data beginning September 1, 2015. 

Accordin to the announcement: "The reciprocal share of data will be facilitated through Realtors Property Resource (RPR). As the two largest Multiple Listing Services in Missouri, this agreement to share listing data will significantly broaden exposure for active listings within the state and provide more than 16,000 real estate professionals with access to expanded real estate data."

*MidAmerica Regional Information Systems (MARIS) provides the regional multiple listing service for the St. Louis Association, St. Charles Association, and the Jefferson County, Franklin County, East Central, South Central, Pulaski County, Lebanon, and Mineral Area Boards of REALTORS®.

**Heartland Multiple Listing Service (HMLS) is the most complete and accurate source of real estate information in the Greater Kansas City Metropolitan area. HMLS provides services to more than 7,500 real estate professionals in Kansas and Missouri.

Tips That Could Make or Break Buying or Selling A Condo

There is more to successfully selling a condo than updates, perfect pricing & taking good pictures.
In fact, it starts long before you put it on the market.  If you didn't research your condominiums home owner association before you purchased, and/or weren't actively involved during your ownership, you could have a very difficult time selling.  I have seen it happen too many times; a seller has a willing & qualified buyer, they have agreed to a price, and are ready to move forward with the sale.  Then, to the dismay of both parties, they find out that the home owners' association doesn't "qualify" for the loan.  So what does that mean?  Most loan programs have strict standards to meet when it comes to the purchase of a condominium.  (Especially the popular loan programs through Fannie Mae, Freddie Mac & FHA loans).

Potential reasons why a loan might be denied due to the HOA:

• The home owners' association doesn't have enough reserves (money set aside from HOA dues to cover maintenance or repair costs) 
• Too many investors in the complex.  The lender must consider the fact that renters may not take care of the property properly because they have no ownership interest.  Also, there is the potential for low reserve funds.  While homeowners don't necessarily want to see HOA fees go up, investors especially don't.  To an investor, $50/month on 10 properties = an extra $500/month.  The problem?  If there are not enough fees collected, the reserves could be depleted pretty quickly.

To avoid potential problems when selling, there are 2 major things to consider:

1. Use a realtor to help you research the HOA before you buy.  Your real estate agent can get information from the condo association.  Red flags: 
• If fees are low or aren't going up with inflation.  This could mean there may not be enough in reserves.  (Even if you never intend to sell, if a maintenance project comes up that the reserves can't cover, you may be expected to pay a special assessment.  This could be thousands of dollars). 
• Too much debt, and a lot of delinquent home owners 
• Inadequate insurance
• Pending lawsuits
• Special assessments
2.  Become active in your association from day 1
• Become either a board member or an active member who attends meetings, and/or volunteer for a committee
• The HOA can set limits on those who invest, conduct reserve studies, decide on HOA fees, etc
• Be informed of upcoming projects and/or make suggestions
• Get to know your board members and other owners

Cornerstone Mortgage does offer loans for warrantable (eligible for Fannie Mae, Freddie Mac or FHA) & non-warrantable condos.  But remember, if you purchase a non-warrantable condo, it may be difficult to sell in the long run.

Your realtor and lender are valuable resources, so use us!  Feel free to contact me at any time with questions.

Sincerely,

Chris Scheer

Your Residential Lending Team

"Know Before You Owe" Rule Has Been Delayed

Big changes were expected in the mortgage industry beginning August 1, 2015, as the Consumer Financial Protection Bureau (CFPB) planned to enforce the "Know Before You Owe" rule (aka TRID or TILA-RESPA Integrated Disclosure rule).  But as of yesterday, they have decided to delay the effective date until Oct. 1st. 

The director of the CFPB issued the following statement:

“We made this decision to correct an administrative error that we just discovered in meeting the requirements under federal law, which would have delayed the effective date of the rule by two weeks,” said Richard Cordray, CFPB director. “We further believe that the additional time included in the proposed effective date would better accommodate the interests of the many consumers and providers whose families will be busy with the transition to the new school year at that time.”

This decision is interesting as it comes on the heals of a letter from Congress several weeks ago, asking the CFPB for a grace period (which was granted).  The grace period benefits all parties involved, including the consumer.  David Stevens, chairman and CEO of the Mortgage Bankers Association, stated: “This is a vast system of integrated service providers that spreads far beyond just lenders – there are servicing companies, real estate companies and third-party vendors who all have to make sure their systems are compliant and coordinated with each other.”  Further more, Chris Polychron, National Association of Realtors President, stated this will: "ensure the rule works effectively for consumers, who shouldn’t have to bear the burdens of the industry conforming to the new regulatory requirements.”

While Cornerstone Mortgage has worked diligently on preparing for all of the changes happening in the mortgage industry, the end goal is for a smooth transition for ALL PARTIES involved in the process. The hope is that this delay will benefit all involved, most importantly, the consumer.

Please don't hesitate to contact me with any questions.

Have a great weekend,
Chris

Appraisals: Five Common Questions Answered

WHAT IS AN APPRAISAL?

A real estate appraisal is required on a property whenever it’s financed, whether you are buying or refinancing a home. (With a few exceptions, contact me for more information). It is done after an offer is made on a home, or during a refinance.  An appraisal costs several hundred dollars, and generally the borrower pays this fee.