Archive for March, 2008

Good News Surfaces in a Crazy Market!

Enough Already!

It’s time for GOOD NEWS! And while this news does not directly impact Charlotte mortgage loans, this is still good news for us all.

A major (and I mean Major) lender has lowered the required credit score for FHA mortgages using down payment assistance in “declining markets.” This is a great positive thing to see!

A declining market is one that is seeing home values decline rather than increase. With FHA mortgage loans, the minimum down payment is only 3%, which in all reality does not place the mortgage company in any tremendous equity position! When you consider that down payment assistance pays for the buyer’s downpayment, you have a home owner with virtually nothing invested in a home located in an area that is seeing declining values. That would scare anyone lending home purchase money!

So to help ensure that only the best credit risks were able to buy these homes, many FHA mortgage lenders have imposed high credit score requirements. This one major lender placed a credit score requirement of 680 for this type of FHA mortgage loan using down payment assistance. Well, today they announced the score will be lowered to 620!

Could it be that the declining markets are not declining as much? Maybe there is a returning back to sanity and a realization that someone with mid 600 scores is still a good credit risk? I don’t know the exact reasoning, but I sure like to see this being relaxed a bit.

As I said, this does not affect FHA mortgages in Charlotte. Since Charlotte is not a declining market (due to Charlotte’s solid real estate market), we have not had to face this higher credit score requorement in order to use down payment assistance programs. However, if this is an indication of things to come, we may begin to see a relaxing of the credit market, which has gone a little too far in tightening up!

Again, it may not directly affect Charlotte’s FHA mortgage loans, but it’s good news and I will take it!

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Big Increase in Number of Union County $1 Million Homes

The number of $1 million homes in Union County has more than tripled since 2004. In 2004 Union County’s tax records indicated 306 homes valued over $1 million. As of the last real estate property valuation, Union County now has 1,010 million dollar properties! That’s tremendous growth!

As recently reported, Union County NC was ranked the 7th fastest growing county in the nation. With its close proximity to Charlotte’s major banking industry, its no wonder there are so many new million dollar homes!

There are many prestigious neighborhoods in Union County that have homes worth over $1 million. Weddington, NC alone  has 228 homes valued over $1 million. Roughly half of those homes are located in the Highgate subdivision.

With such growth in the region, coupled with the lower county taxes and better schools, Union County will surely see more of these types of properties. However, one should note that the median home priced for sale in Union County is around $173,000.

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Davidson NC on National Map

Thank you Davidson Wildcats for showing the rest of the world what Davidson North Carolina is all about. The class and determination in which you played in the NCAA Men’s Basketball Tournament was inspiring to all of us, even those outside the general Charlotte area.

Davison North Carolina is a small college community north of Charlotte, located around Huntersville and Lake Norman. The town of Davidson is absoultely charming and wonderful. And now with the Davidson Wildcats’ run towards this year’s Final Four, the entire nation is looking at Davidson, NC.

I expect this will be a good thing for Davidson College, but even more so for the Davidson community as a whole. As people are “Googling” Davidson Wildcats and Davidson NC, they will begin to find out how great the area is. People looking to move towards Charlotte will seriously consider the Davidson area. Other local communities like Huntersville and the entire Lake Norman area will also see great benefits from this exposure.

With the news that Charlotte’s real estate market being the only major market to improve in values last month, there is no doubt the Davidson real estate market will heat up! So if you are considering buying a home in Davidson NC, contact me for a free Davidson NC mortgage pre-approval. I can get you approved for a Davidson mortgage loan and introduce you to great Davidson NC real estate agents and Realtors.

Who’s Wachovia Looking Out For?

According to a front page story in the Charlotte Observer (Sunday March 30th, 2008), Wachovia is putting pressure on it’s loan officers to push it’s “Pick-A-Payment” option ARM mortgage program. The story highlights a borrower that approached Wachovia to refinance her home’s mortgage only to be “sold” on the “Pick-A-Payment” mortgage program. After everything finally was disclosed, the homeowner realized that this mortgage program’s interest rate was higher than the mortgage she currently had! So why did the loan officer advise this program over the traditional Charlotte 30 year fixed rate mortgage program with a rate over 1 point lower?

Maybe because Wachovia is putting pressure on their loan officers to sell it!

According to the Charlotte Observer, Wachovia has placed minimum requirements on their loan officers to sell a certain number of each type of mortgage loans they offer. Failure to reach the minimums in each category can result in discipline, including termination! So instead of offering the best mortgage program to fit the borrower’s needs, Wachovia’s loan officers are under pressure to steer borrowers to the mortgage programs that fits Wachovia’s needs! If a Wachovia loan officer has sold enough traditional mortgages for the month, there may be more pressure to steer a borrower to a different product even if it is not in the client’s best interests. And with Wachovia currently being number 2 in these types of option ARM programs, obviously the sales pressure is great!

If I were to offer or advise the wrong mortgage program to a borrower, my ability to close a loan is severely limited. My focus when working with any borrower is to find the best mortgage loan in Charlotte to fit their needs and close it in a timely fashion. In my humble opinion, looking out for the borrower’s best interests is not “sales”, but is instead a valuable “service.” I don’t need to sell anyone on my services when I offer them the best mortgage program for their unique needs.

So when you are shopping for a mortgage loan in Charlotte, look for a loan officer who’s focus is on YOUR needs, not the company’s. I am here to find you the best mortgage loan in Charlotte, period.

What is a “Net Branch” mortgage company?

“Net branch” mortgage companies are mini franchises. The idea is that instead of actually opening your own mortgage shop, you join a company that allows you to open a “branch” in their name. The attraction for the owner, called a “branch manager” is the ability to operate under a “known name”, the ability to have a corporate shield to cover the manager’s liability, and the possibilty of circumventing state licensing laws.

Basically anyone that wants to open a mortgage company (with minimal experience) can give it the ole “college try.” If it doesn’t work out, they have not totally invested themselves and can walk away at any time. The corporation is ok with that because they get set up fees and monthly fees regardless of how much the branch does. And since the corporation is not repsonsible for the leasing of space, equipment, ect.. there is no real investment on the corporation’s part either.

These “net branch” mortgage companies are also not looked at favorably by most state banking commissioners. The North Carolina Commissioner of Banks does not like these types of setups at all. There are only a couple that the NCCOB are “ok” with in NC, and that’s only because they are based in North Carolina, therefore satisfy the licensing requirements often avoided under this setup.

My suggestion is to make sure the mortgage lender you are working with is a solid company. With so much on the line, you do not want to trust your most important financial decision to a “net branch” operator seeing if “this is for him.” That could leave you with a “Net Loss.”

Residential Mortgage Center is a full service, FHA approved mortgage company in Charlotte NC operating under a North Carolina mortgage lender’s license. And while we actually have four offices across NC, they are fully owned, operated and managed by Residential Mortgage Center, and are not “net branches”.

Welcome to Joe’s Mortgages & Equipment Leasing.

(and credit card processing, and commercial loans, and small business loans, and credit repair service, and foreclosure negotiators, and payoff accelerator services, and cash advance store… and you name it, we’ll do it!)

What in the world am I talking about?!?!

Looking through one of the major publications aimed at mortgage professionals I began to notice a disturbing trend. The articles and the ads are all geared towards mortgage lenders offering everything BUT mortgages. These items range from offering clients cash advances to equipment leases! What in the world do these have to do with the financing of a person’s home?

When a lender can not find a way to write a mortgage, they begin to look for alternatives. Those that offer all types of services never get really good at any of them. And believe me, the mortgage business is a full time, ever changing business. Especially today!

Be sure the mortgage lender you are working with is focused on what they should do… mortgages. While I can offer advice on credit issues, I do not operate a credit repair company. While I can write commercial mortgage loans, my focus is on the residential market. I have no desire to lease equipment (what?) nor credit card processing. I have associates that I can refer that stuff to.

I write mortgage loans. I work to find my clients the right mortgage for their home ownership needs. And working with both home buyers and current home owners, I can offer purchase and refinance mortgages in the Charlotte area. I am fully licensed in North and South Carolina. I am focused and that keeps me busy.

So beware the jack of all trades, master of none. After all, its about more than a mortgage… its about your family… your life! Don’t trust it with someone who’s not focused on finding you the right solution.

Little Help Available at Foreclosure

Attention Charlotte area home owners:

If you are behind on your mortgage payments 30, 60 or even 90 days, do not wait to ask for help! Often times as a mortgage lender in Charlotte, I get calls from homeowners asking if I can help save their homes from foreclosure. In many cases, these homeowners have a good amount of equity they are at risk of losing. But once the notice of foreclosure is issued, it is very difficult to help them.

If you are currently 30 days behind and see that you may get 60 days behind, call me now! Do not wait until you get any further. There are programs out there that can help, and with today’s low Charlotte area mortgage rates you may be able to get a better mortgage program and use the best rates in Charlotte to lower your monthly payments!

Avoiding the issue will not make it go away. Avoiding the collection calls will not make the mortgage company holding your mortgage forget you exist. All this will do to signal to the lender that you don’t want to work with them and that they will need to go forward with foreclosure.

If you have equity in your home and are getting behind on your mortgage, call now as we may be able to structure a better mortgage solution for you. When you begin to get behind, time is of the essence. Don’t wait until the lender serves you with foreclosure papers. Unfortunately, at that point I would need to refer you to a good attorney (which I can do.)

Charlotte New Home Buyers get Better Deal!

Most large home builders today also own mortgage companies. This is an additional profit center and until recently, they have forced their home buying customers to provide the additional mortgage profits. These builders will typically offer tremendous “savings and discounts” when buying one of the builder’s homes, but ONLY if you use their mortgage company. And that is when the mortgage company will hit them with more fees and higher rates, all as an attempt to get back what they “gave away” with the home’s “discount.”

This is one of the down sides to “affiliated arrangements.” When your real estate company or builder owns your mortgage company, title company, insurance company, and attorney’s office, one must proceed with caution. All of these areas are potential profit centers, and while I have nothing against profit (profit allows a business to stay alive and help others) I do have a problem with the extra profit being “sold” as a way to “save” you money!

Recently, Ryland Homes / Ryland Mortgage agreed to make changes in how they conducted these “discounts.” In an settlement with the North Carolina Commissioner of Banks, Ryland Mortgage has agreed to not inflate mortgage rates and fees to cover the “discounts” of buying a Ryland Home. Ryland also agreed that “discounts” would be true discounts and that if any discount requires use of their mortgage company, it would be fully disclosed to the buyer.

The NCCOB believed that Ryland had over charged homebuyers beyond the legal limits in North Carolina. While not willing to admit “wrong doing”, Ryland Mortgage did agree to refund approximately 850 home buyers to settle the allegations. On average, these home buyers should see about $250.00. (Don’t spend it all in one place!)

The good news this brings to Charlotte home buyers is the knowledge that the North Carolina Commissioner of Banks is aware of the problem and is going after these types of arrangements. And with the pressure the NCCOB can bring, we may begin to see changes in the practice of “fake discounts” and required services!

This also means that buying a New home in Charlotte does not mean you have to use the higher cost builder’s mortgage company (at least with Ryland Homes)! You are free to work with the mortgage lender you feel most comfortable with, and that can mean a world of difference in your experience!

Little Known Fact about FHA Mortgage Reserves

One advantage of an FHA mortgage loan is the ability to deposit cash into your bank account with no need for seasoning. Once the deposit is made, you can get a verification of deposit showing the current balance. Unlike standard conforming mortgage loans, the money does not need to be averaged over 60 days. This is especially important if a borrower is “iffy” in getting an approval.

In some cases, a declined application can get an approval with a good amount of reserves. “Reserves” is the amount of liquid money you have available should you run low on income temporarily. A lender will take the amount of your reserve savings and divide that by the amount of your total monthly house payment. This is the number of months’ reserves they count. Six months or more could help a potentially declined application get an approval.

I share this because sometimes a borrower may have other money that is not deposited in their bank account. But by depositing it in their bank account, they can get credit for the reserves, which also makes the lender feel more comfortable.

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This may be a bit offbeat for my website, but I just had to share this…. enjoy.