Palmetto Park Title In Boca Raton is Doing Loan Mods

Palmetto Park Title Agency in Boca Raton is now doing Loan Modifications!  Palmetto Park is a well established company with offices in Downtown Boca Raton.  Robin Williams, the owner, is a 38 year veteran of the South Florida Real Estate Market and she has agreed to handle your loan modifications for $995 with a Forensic Mortgage Audit from MFI-Miami.  Palmetto Park also has an in-house attorney that specializes in real estate issues.  We believe this is the best value in South Florida.  You can call Robin at 561-750-3426.

VA: The Forgotten Mortgage Loan

By Paul Chandler

With all of the news about changing programs, disappearing programs, a new emphasis on FHA and more stringent underwriting guidelines, little has been said about the VA program. And that is because few changes have affected it. Some lenders may use a pricing adjustment for those with credit scores below 600. However, little else has changed. There is still no down payment required. The seller can pay the closing costs and the pre-paid expenses. Fixed rates account for the vast majority of VA loans issued. And they take no longer to process than any other type of mortgage.

VA still assigns the appraisers on a rotational basis. There are two types of appraisals. One is the traditional appraisal which is sent to the Department of Veterans Affairs to issue a Notice of Value which is then forwarded to the lender. The second is one that is sent directly to the lender which has underwriting authority for the appraisal. These are known as LAPP lenders and up to a week can be shaved off the processing time if you are working with a LAPP lender.

Manufactured homes are allowed under the program, but not all lenders will do loans secured by them. If you are considering purchasing one, you should make sure your loan officer is aware of the property type right away. The last thing you want to have happen is an appraiser asking the lender if they knew the property had manufactured housing on it.

A one time VA funding fee is paid in lieu of monthly PMI on most VA loans. Only those exempted from it by virtue of receipt of service-connected disability will not need to pay it. It can be financed into the loan. Often the total monthly payment is less with VA, even without the down payment. Repeat uses are allowed, but the fee is higher for the repeat use. This is a benefit extended to veterans & their spouses. Non-married parties must also have eligibility to avoid the need to put a 12 ½ % down payment into the transaction.

VA actually has a family support requirement as a part of the dual qualifying used in the loan approval process. This is a great feature as it protects the veteran from getting overextended. If the family support requirement is not met, it does not matter what the ratios are in qualifying. Income taxes, child care, social security taxes and utility and maintenance costs are all considered.

For those with a VA loan in place already, the Interest Rate Reduction Refinancing Loan is a great way to save money when rates are dropping. If the loan is current, no appraisal is required and re-qualifying is not needed. Closing costs can be rolled into the loan. A two week closing period is not unheard of with this type of loan. You should save at least 1% on the note rate WITHOUT PAYING POINTS OR ORIGINATION FEE in order to make this worthwhile.

The VA home loan program is a benefit that has been around since the 1940s. It is often forgotten. But it has helped many veterans to purchase a home. And it could help YOU.

Paul Chandler, Certified Mortgage Professional, is the Newport Branch Manager for Universal Mortgage Corporation. He graduated from the University of Maine’s business school in 1979 and has been in the financial services industry ever since. Since 1991, he has exclusively been involved in mortgage lending, moving to the Newport area in 1993. He also authors a blog at http://www.misterva.typepad.com. He also has been a contributor to Mortgage Originator Magazine. If you have a mortgage related question, please call 334-1999.

What is a Loan Modification and What Questions Should I Ask?

There is a new industry rising from the ashes of America’s imploding mortgage industry and it’s called Loan Modification. Loan modifications have become a viable option for many distressed homeowners many of whom are considering abandoning their homes because they are upside down in their mortgages or just simply can’t afford their payments.

What is a loan modification? A loan modification is as the name suggests a modification of your current loan without going through the process of refinancing our home or property. The responsibility of a loan modification company is to act as a negotiator for you with your lender. Because a new loan is not being written, many states have not instituted or modified their mortgage and banking laws to regulate the loan modification industry. This means anyone can open a loan modification company, even those who have revoked mortgage and real estate licenses revoked or have multiple felony convictions.

States such as Florida and California, two states still suffering from the fallout from being at ground zero of the lending implosion, have begun to reign in loan modification companies by requiring licensing and background checks. Unfortunately, in the rest of the country, it’s still caveat emptor or “Buyer beware”.

Below is a list of questions you should ask when considering a loan modification company:

1. Have you or any of your employees ever been convicted of a felony?

You can follow this up with do you do criminal background checks on your employees? If they have employees with criminal records or they don’t do criminal background checks, look for another company.

2. Do you have a background in mortgage lending? If so what is it?

This is always a good question to ask because it shows the level of their competency and how they operate their business.

3. Can you provide references?

Don’t be afraid to ask to speak to real people. Some companies will post questionable testimonials on their site signed by “Homer S.”, “Monty B.”, “Ned F.” or “Moe S.” For all you know the owner or of one of his employees could have written these testimonials.

Is your processing done in house or is it contracted out?

This is a good question because it will tell you if the company is acting as a “middle man” and simply collecting a referral fee. Some services are legitimately contracted out such as the loan auditing or fraud investigating.

Do you have an attorney on staff?

This is a great question for two reasons. If they say, yes, then ask for their name and feel free to check them out with the state bar association. Having an in-house legal staff also gives the loan modification company legitimacy because it means they can handle any legal situations that may arise during the negotiations of the modification. If the loan modification uses outside attorneys, it’s a sign that the loan modification company could be acting as a soliciting agent for a law firm which is illegal in most states. Consumers also need to keep a watchful eye on attorneys who allow the loan modification company’s staff to use their letter head and fax cover sheets. In most states this considered unethical behavior by the attorney. If you suspect this do not hesitate to contact the state bar of where that attorney is a member.

Do I need to be late in order to make this work?

Although it may help expedite the process in certain cases, it is not mandatory

How long does this process take?

It can take anywhere between two weeks to six months depending on the lender and the complexity of the file.

If I can’t get a modification completed – what can be done?

There is a whole menu of resolutions available.There is litigation (in cases of deceptive practices), short-sale, short-payoff, deed-in-lieu, or forbearance.

Are there any guarantees?

Be careful of loan modification companies that offer or guarantee specific results because they don’t know what the final terms will be.

What are my costs and can you put this in writing?

There are two ways loan modification companies charge. They either charge a flat fee or a fee based on a sliding scale depending on the size of renegotiated payoff or by the size of your first payment. If they are unwilling to spell out the terms to you up front, keep shopping. Also, don’t be afraid to shop around. New loan modification companies are popping up everyday which means more competition and better pricing. A loan modification fee should not exceed $2500 and include a forensic mortgage audit.

FHA Basics

By Paul Chandler

Unless you have been isolated from news media outlets for the past 18 months, you have probably heard a lot about FHA mortgages. Some of it may even be true. By the end of this article, you should have a clear understanding about what FHA is and whether or not it is a program that can help you. FHA stands for Federal Housing Administration and is under the auspices of HUD. It has nothing whatsoever to do with the old Farmers Home Administration or FmHA. So if friends and relatives start relating horrible things about that agency, just smile and nod politely and know that you are pursuing nothing of the kind.

FHA is not a lender. It is an insuring body to lenders who make mortgage loans written to FHA standards. Most FHA loans are fixed rate loans. Those that aren’t generally have modest adjustment caps and margins to protect the consumer. You should always ask your loan officer about which type of FHA loan is on your application. FHA loans have no income limits or recapture of equity provisions like many state housing programs do. And, although there are loan limits, they generally will be sufficient to purchase most homes in most areas of the country.

FHA loans have competitive interest rates and in many cases when the homebuyer has less than a 20% down payment, the overall rates and payments will be lower than for a similar type of conventional loan. Mortgage insurance is less expensive in most cases and is not subject to pricing based on credit scores. A portion of that mortgage insurance or MIP is paid up front and is usually financed. The new housing bill will result in a to be announced rate for that portion of the premium.

FHA loans are for a primary residence only and are assumable loans under certain circumstances. They can be used for up to 4 units and the rental income from the other units can be used to help you qualify. The rehab portion of the housing act known as section 203k can allow for the financing of certain repairs to the property to be done within 6 months after purchase for a regular rehab loan or within 60 days for an FHA 203k Streamline rehab loan.

The down payment will end up being 3.5% of the sale price and can be a gift from family. There are some municipalities who may have qualifying grant funds, too. The seller may contribute up to 6% of the sale price toward closing costs and pre-paid expenses, too. Also different with FHA is the non-resident co-borrower feature whereby a closely related party can co-sign. This will not offset poor credit however.

Although there are some provisions for different types of refinancing options with FHA, those will be discussed in a future article. What you SHOULD know is that FHA is NOT the new subprime. It has been around since the Depression Era in the 1930s. Many folks should have utilized this program instead of others when they purchased or refinanced. I have used the program myself to buy a home. It is a tremendous program and, when used properly, can provide the means for many consumers to become homeowners.

Paul Chandler, Certified Mortgage Professional, is the Newport Branch Manager for Universal Mortgage Corporation. He graduated from the University of Maine’s business school in 1979 and has been in the financial services industry ever since. Since 1991, he has exclusively been involved in mortgage lending, moving to the Newport area in 1993. He also authors a blog at http://www.misterva.typepad.com. His regular column “Mortgage Matters” is published almost weekly in the Newport Daily Express. If you have a mortgage related question, please call 334-1999. You may also email questions to misterva@hotmail.com.