Tori Levitt Mortgage Matters

Mortgage rates at a new low! Time to buy or refi!

Tori Levitt — Tue, 16 Aug 2011 21:04:40 +0000

You may have heard. Debt ceiling debates. A volatile stock market. Historically low mortgage rates. It’s hard to turn on the television or read a newspaper without seeing some sort of daily upheaval in the financial sector.
According to Rodrigo Campos for Reuters Report on 8/12- “After one of the most volatile weeks in memory, U.S. stocks ended higher on Friday in a tentative sign that the worst of the selling may be over.”
However, if you got caught up in the maelstrom last week, then you know mortgage rates fell to an all-time low (below 4% for 30-year fixed loans).

Per Mr. Campos: “About 9 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, sharply lower than the daily average of nearly 16 billion shares traded earlier this week. It was the busiest week in terms of volume since October 2008.

While the markets have slowed down this week, following a whipsaw of activity, mortgage rates are phenomenally attractive for both existing homeowners looking to refinance or those would-be buyers who have been sitting on the fence.

It’s time to buy or refi! Please call a mortgage consultant to review your options.

“For time and the world do not stand still. Change is the law of life. And those who look only to the past or the present are certain to miss the future.” (John F. Kennedy)

Tori Levitt
Sr. Mortgage Consultant
The Legacy Group
NMLS # 0912207

FHA set to reduce loan limits

Tori Levitt — Tue, 19 Jul 2011 19:29:58 +0000

According to Brad Finkelstein, in an article posted today by National Mortgage News, it appears as though this administration, which has busied itself with massive regulation and an unending overhaul of the mortgage banking industry, is now set to reduce the current FHA loan limit by almost 50%. The spirit behind the reduction in the maximum (FHA) insurable loan amount, is to restore FHA to it’s origin of assisting first-time, low-income borrowers. Additionally, FHA is looking to reduce it’s exposure in higher-end loans which are “probably” riskier. Really?
Based on comments by Robert Van Order, the former chief economist for Freddie Mac, he said, “We find that FHA’s current market share exceeds what is needed to serve these markets. “In the wake of significant declines in home prices, we believe FHA could reduce its loan limits by approximately 50% and still almost entirely satisfy its target market. That would reduce its current large market share, which is difficult for FHA to manage.”
It does stand to reason that the median price of any home available for purchase has fallen- MEASURABLY. Therefore, as the argument goes, FHA shouldn’t bear the burden of financing more expensive homes, which would otherwise divert to CONVENTIONAL financing (i.e. Fannie Mae or Freddie Mac-backed loans) or on the much higher end of the scale, fall upon the scant field of JUMBO lenders banking loans in excess of $417,000.
The big picture here, regarding the ultimate source of mortgage money, is that Fannie Mae and Freddie Mac are operating within a framework of “no new loan programs” and a platform of risk mitigation. The underwriting software used by lenders, to determine eligibility of a conventional loan being sold to these agencies, continues to evolve with stricter standards of borrower qualification.
Sadly, the bottom line, in my personal opinion, is fewer financing options for the prospective homeowner. We have come full circle and in the manner of Henry Ford, do you want that loan in black or black?
As always, if you are contemplating a home purchase, please consult with a qualified mortgage professional to determine your mortgage options as they exist TODAY. For most of us, it is still preferable to have a car (even if black is the only color) than not drive at all!

Tori Levitt
Sr. Mortgage Consultant
480-699-4075 (Arizona)

Foreclosures bogged down-expanded “lease” to live rent free!

Tori Levitt — Tue, 21 Jun 2011 20:11:50 +0000

A recent article in the New York Times reports some surprising statistics regarding the amount of time it is taking banks to process foreclosures. No surprise that the high level of default has overwhelmed bank’s REO departments. Not to mention the “false filings” via “robo-signing”, that certain banks have copped to, mandating reforms to the foreclosure process, causing further delay in seizing one’s home (1000′s of cases required additional review).

The legal procedure for bank foreclosure varies significantly by state. According to David Streitfeld of the NY Times, “In New York state, it would take lenders 62 years at their current pace, the longest time frame in the nation, to repossess the 213,000 houses now in severe default or foreclosure…New Jersey would take 40 years.” However, 27 states do not rely on the court system, so the sheriff could come knocking much sooner, and on the average within 2-3 years in places like Colorado, Nevada and Arizona.

The problem is akin to the python who swallowed the pig. The digestion of which is further complicated by changes in state laws, lack of coordination between bank departments, insufficient staffing and the dismal impact of current Modification programs and/or speedy acceptance of short sale offers.

There is no simple solution for the distressed homeowner looking for relief. It simply appears as though that same individual might have more time to contemplate his/her next move…if all else has failed.

However, if you are in distress, please consult a qualified mortgage consultant to discuss possible solutions in advance of actual foreclosure. There are some programs, such as the Home Affordable Refinance Program, that might provide for a more affordable payment and help you to avoid the sheriff’s knock!

Call me if you have questions!

Tori Levitt
Sr. Mortgage Consultant
MLO# 0912207
480-699-4075

FHA changes to loan limits coming!

Tori Levitt — Mon, 13 Jun 2011 18:01:55 +0000

I feel like Paul Revere sounding the alarm that the British are coming! And the consequences of the anticipated arrival are not good…
I recently blogged about the upcoming changes (decrease) in high loan balance limits for those mortgages securitized by Fannie Mae and Freddie Mac. While the standard $417,000 is likely to remain unchanged for most of the country, certain high-dollar areas will be impacted.
Not to be “outdone”, FHA is currently reviewing their maximum loan limits and will be implementing similar changes (decreases) in their loan limits as well.
As recently reported by National Mortgage News: “The pending change in federal loan limits will have a much larger impact on mortgages insured by the Federal Housing Administration than on those purchased or securitized by either Fannie Mae or Freddie Mac.
According to an analysis by the FHA, loan limits for FHA-insured mortgages are likely to decline in 669 of the 3,334 counties when the ceilings revert back to the 2008 levels.
The FHA analysis shows that its loan limit would fall by more than 5% in eight states—Arizona, California, Colorado, Connecticut, Massachusetts, Maine, New Hampshire and Oregon—as well as the District of Columbia.”
The decrease in loan limits will likely occur Oct. 1, pending any further Congressional consideration. As an example, this could mean a decrease from $346,250 to $271,750 in Maricopa County, AZ.
SO! Buyers beware! If you are considering a new home purchase, and plan to use FHA as your mortgage conduit, know that as of October 1st, the maximum amount you can apply for is subject to imminent change!!!! Based on your target purchase price, and locale, you need to strongly consider your purchase options TODAY and consult your local mortgage consultant for further details.
The only constant in life is change! The mortgage climate is NOT changing in your favor!

Arm yourself and take action NOW!

Tori Levitt
Sr. Mortgage Consultant
MLO #0912207
480-699-4075 (direct)

Mortgage climate change

Tori Levitt — Mon, 23 May 2011 19:56:36 +0000

For those of you who have applied for a mortgage in the past few years, you know all too well how burdensome it became! Many of you may have felt overwhelmed and bewildered by the amount of paperwork involved -often in duplicate and triplicate- over the course of the 30-60 day process.
If you had a problem navigating the complicated forms and “CSI detective-like” questioning into your personal financial affairs, you are not alone! It took months to unravel the new Good Faith Estimate (1/2010) and Truth-in-Lending disclosures (7/2009) and it’s intended meaning. Mind you, not all lenders had the same interpretation re: how to implement these new measures. In one egregious example, one of my borrower’s was forced to wait 3-days to close his loan, in order for a new TIL to be generated correcting the subject property address (it was missing the word “east” in the original disclosure). While the new TILA Act was designed to re-disclose variances in the APR, above .125%, this lender imposed a stricter “letter of the law”. Never mind that the moving van had already been scheduled for the original closing date!
Ironically, now that we have it figured out, the new Consumer Financial Protection Bureau wants to change it again! While not officially scheduled to launch until July of this year, the CFPB is getting a jump start on changing the GFE, reducing it’s complexity from 3 pages to just 1 (where we started years ago and prior to 1/2010). I can only hope that in the spirit of “transparency”, their effort will actually help consumers understand the proposed terms of their loan.
Additional changes coming down the pike include a reduction in the maximum (temporary) conforming high-balance loan limit, particularly in high-cost areas. Those limits expire 9/30/2011, with little hope of extension at the current levels. This will primarily affect those homeowners seeking refinance relief -or purchase money -in many major California cities (such as San Francisco, San Jose, Santa Barbara, Los Angeles) and pockets of Colorado (Edwards and certain Non Metro areas of Denver). If you need to borrow up to $729,750, and still achieve the lower “conforming” rate in these markets, make your move before September 30th of this year!! If you live in any other market that might be considered “high cost”, check with your lender NOW about current vs. proposed limits that may affect you.
As always, your comments are appreciated!
Tori Levitt-Sr. Mortgage Consultant-MLO #0912207 (Arizona)

What you need to know before you buy!

Tori Levitt — Fri, 06 May 2011 18:26:06 +0000

You’ve heard the horror stories: “I’m being treated like a criminal”! “I need 20% down payment to qualify”! “I don’t make enough money despite the money I have in the bank!” and the list goes on.

While it is true that mortgage loan applications are being scrubbed with far greater discernment today, there is light at the end of the tunnel. Let’s face it, the credit bar HAD to be raised, in the aftermath of too many loosey-goosey loans of the past.

With Private Mortgage Insurers regaining confidence in real estate markets, it is not imperative that you have 20% down. FHA requires 3.50%, VA requires 0% and conventional lenders may extend credit with only 3% down, depending upon your credit qualifications.

In the event that your credit is impaired due to a short sale, foreclosure, deed in lieu or bankruptcy, there are mandatory wait periods imposed before you can obtain new credit.
The wait periods vary between FHA/VA and Conventional lenders, and are based on the type of event described above. KNOW WHAT THEY ARE before you buy.
(You may have compelling circumstances that might help overcome those obstacles, if reasonable and fully documented.)

Credit can be repaired! I recently posted “4 Ways to Raise your Credit Score” which did not include the suggestion to hire a Credit Counseling service for outside assistance as another option. A minimum credit score of 620 is recommended in order to “get in the game”.

Some creativity in managing credit scores AND your debt-to-income (“d.t.i”) ratios may be needed. I recently worked with a borrower who PREPAID several months of alimony to his ex-wife in order to lower his d.t.i. Sound extreme? Not according to his current wife! Bottom line: be flexible and work diligently with an experienced mortgage consultant to assist you in achieving your homeownership goals.

And… apply BEFORE you buy!

I’d love to hear about your recent experiences and any creative solutions uncovered during your loan process.

Your opinions matter to me, as I espouse my opinions upon you!

Tori Levitt
Sr. Mortgage Consultant
MLO 0912207 (AZ)
480-699-4075 (direct)

Modification Loan Programs-are they helping?

Tori Levitt — Tue, 19 Apr 2011 17:15:04 +0000

On the heels of my last post, the government is not only fully functioning, having staved off a potential shutdown, but now splintered as to where and how to make budget cuts. (No surprise there).

While Congress battles over the right mix of “fix”, Laurie Anne Maggiano, director of policy in the Treasury Department’s Office of Homeownership Preservation, wants to expand government’s reach over the disastrous program she helped create known as Home Affordable Modification Program (“HAMP”).

Originally launched in March 2009, the spirit of HAMP was to assist troubled homeowners with loan modifications by lowering existing mortgage payments, for up to 5 years, providing a more affordable alternative to foreclosure. The program had high hopes to help 3 – 4 million borrowers, yet statistics show that those numbers fell far short of the goal, with less than 650,000 homeowners actually realizing HAMP relief. These statistics do NOT include those successful modifications achieved through private companies, attorneys, “modification specialists”, and agencies such as Hope Now Alliance. However, hiring outside assistance often meant personal, financial cost to the consumer, who by definition, is already financially troubled!

Fundamentally, the HAMP program requires the compliance and participation of the banks holding the notes and of course, the consumer’s burden to demonstrate an inability to sustain existing, higher payments. Despite the financial incentives given to the banks for each successful modification, the program is still broken.

So, do we need yet another government agency to “fix” it?

According to Austin Kilgore, Maggiano has outlined new goals for 2011. “Servicer accountability will be enforced with new scorecards and servicers will be ranked against each other… (Do you think they care?)
…The customer experience will be improved with new mandatory communications to borrowers on the verge of foreclosure and the creation of the Treasury’s Homeowner Advocacy Office, which will review special cases and step in to assistant borrowers having difficulty obtaining a modification from servicers.”

Based on the consumer feedback I have received, this new agency is going to be very busy assisting those borrowers who can’t get through to their banks and mortgage lenders.

Do you agree with those Capitol Hill representatives that have voted to end this program?

I’d love to hear from you, especially if you have attempted and/or obtained a modification. Please comment or call me at 480-699-4075.

Tori Levitt, Sr. Mortgage Consultant
The Legacy Group

Critical info for current mortgage applicants!

Tori Levitt — Fri, 08 Apr 2011 16:47:16 +0000

While this may seem extreme and overly paranoid on my part, the threat of a temporary government shutdown could negatively impact the progress of your loan application (if you have applied for mortgage financing and are not yet closed on your transaction).

What you may not know is that all loans, whether you have applied for a government loan (i.e. FHA or VA) or conventional (typically sold to Fannie Mae or Freddie Mac) are subject to certain, internal verifications that require government assistance. Examples include a lender’s request for tax transcripts; this is a summary of your prior year’s tax returns that you have filed with the IRS. Even if your loan officer has not requested copies of your tax returns to support your loan request, tax transcripts are requested on ALL loans.

Should the stalemate over Title X actually conclude with a government shutdown (I know this seems unreal), then, according to an Associated Press report by Ben Fuller:

“A closure would mean the furloughs of hundreds of thousands of workers and the services they provide…”.

To protect yourself, please contact your loan officer to ensure that all government-related tasks, such as assignment of FHA case numbers, Social Security Validations and IRS Transcript processing has been done on your file.

“The truth is better than fiction”. Simply BE PREPARED (in the spirit of “caveat emptor”).

I hope to update this blog later today with a post of relief!

Tori Levitt
Sr. Mortgage Consultant
The Legacy Group
MLO 0912207
480-699-4075

How to Raise your Credit Score

Tori Levitt — Mon, 28 Mar 2011 19:05:53 +0000

How to improve your credit score has received alot of attention in recent years, despite the fact that the Fair Isaac Corporation (author of the”FICO” score) has been around since 1987.

Nonetheless, this credit scoring model has a tremendous impact on a consumer’s ability to obtain a mortgage at a good rate. Similar models are also used when determining auto loan or lease rates and homeowner’s insurance premiums. Now is a great time to review your scores AND review your current insurance premiums. With falling home values, it’s possible that you are paying too much for homeowner’s coverage.

Remember that insurance companies are more focused on replacement cost coverage than the simple value of your home today. In many instances, the cost to replace a home today exceeds the purchase price (value). Just for grins, you may want to contact your insurance agent and do a little comparison shopping. A friend of mine recently saved over $3000 on her insurance by switching carriers. Before you shop, take a peak at your credit if you haven’t done so recently. The better your score, the lower the premium!

Every consumer is entitled to a free report once a year. There are several sites available, including myfico.com or myfreecreditscore.com.

If you aren’t satisfied with the results, a few tips to improve your score follows:

(1). Pay your past-due accounts: if an account is NOT in collection or charge-off status, then pay the past due amount to current. If you DO have open collections or charge-offs, and plan to apply for financing soon, do NOT pay these off, as the creditors will generate updated status and a MORE CURRENT derogatory comment will have the opposite effect of what you are trying to achieve.

(2). Request an increase in your limit: the lower the percentage of debt to available credit is better for your score.

(3). Keep old credit cards active: 15% of your score is based on the AGE of your credit accounts. Use the old cards occasionally to keep them active. FICO ignores inactive accounts.

(4). Clean up the past: if you have a late payment reported by a creditor, give them a call to either a). dispute it or b). ask in good faith if they will remove the late payments based on your overall history with the creditor. Many derogatory entries are erroneous or at least subject to interpretation.

Having good credit pays big rewards!

If you have any questions about your credit, please call me at 480-699-4075. I’d love to help you!

Tori Levitt
Sr. Mortgage Consultant
Legacy Group
NMLS # 163051
MLO# 0912207

HARP HAS BEEN EXTENDED!

Tori Levitt — Tue, 15 Mar 2011 18:58:41 +0000

Timing is everything! Just yesterday I posted about the possible elimination of HARP financing this June. GOOD NEWS for some homeowners: The Federal Housing Finance Agency has extended this program to 6/2012! Now would be a great time to research this opportunity, while rates are still low. Call your local mortgage representative if you think you might qualify for high loan-to-value financing!!