Marc's Mortgage Matter's

The oil spill has impacted all of us: OilEverywhere (This can be done to any website, by the way...)

President Barack Obama signed HR 5623, the "Homebuyers Assistance and Improvement Act of 2010," a three-month extension on the closing deadline for first-time home buyers to receive the tax credit. Potential homeowners with offers currently under contract now have until September 30 to close the deal, instead of the original June 30 deadline.

What do a divorce in Tennessee, a tornado in Kansas and a hurricane in Florida have in common? Somebody is fixin' to lose them a house trailer. Manufactured housing (not to be confused with modular housing) does not have the best of reputations in the lending arena - or among tornado experts. Manufactured housing, often known as single-wide or double-wide trailers, is normally treated as "personal property" when it is built. This is as opposed to "real property", which, from a lender's point of view, represents a simpler foreclosure process should the borrower default. ("You can't tow away a house" said one agent.) Large servicers found themselves saddled with inventories of manufactured housing, which is not a viable business model, and helped result in the near-demise of lending in that sector.

From a manufactured home retailer's perspective, business is not so good. Deliveries of factory built homes have taken a dive due to the abundance of site-built inventory and lack of financing options. One expert noted, "In a normal market factory built homes are considered an affordable housing alternative while in today's market a spike in foreclosures and motivated seller's has brought the site-built market into a realm that manufactured housing previously ruled."

Most lenders stay away from manufactured housing, and the larger investors like Wells and Bank of America, Citi, SunTrust, Chase etc. do not buy them. Flagstar, however, does make a market in them with some strict guidelines. On the conventional side, Flag will purchase loans secured by double wide manufactured homes under Fannie's fixed-rate programs but not in CO, IL, LA, KY, MO, NY, Puerto Rico, PN, TX, or the Virgin Islands. Hmmm I guess that option is now out of the picture for some ;)

Mortgage brokers and lenders will often caution borrowers against charging up their credit cards or changing jobs before the closing date on a home loan. Now that advice seems especially prudent.

On June 1, Fannie Mae, the government-sponsored company that establishes the underwriting standards for most of the nation’s mortgages, started requiring lenders to recheck a borrower’s finances shortly before closing the loan. If a broker or lender finds significant changes, the loan could be delayed, or in some cases, denied. Janis Smith, a spokeswoman for Fannie Mae, said the new policy reflected the organization’s focus on “sustainability.”

“Fannie Mae is requiring lenders to take extra steps to make sure that all liabilities have been considered prior to closing,” Ms. Smith said, “and confirm, based on the most accurate and up-to-date information, that the borrowers will be able to make the mortgage payments.” Industry executives say the change should not have a drastic effect on borrowing, unless of course the borrower is prone to running up huge credit card bills.

“If everyone does what they’re supposed to do, it should not be a big problem,” said Jim Pair, the president of the National Association of Mortgage Brokers. Mr. Pair said he had for years counseled borrowers not to charge any large purchases or change jobs in the weeks between the initial mortgage application and the closing. “If the consumer is responsible, they won’t,” he said.

But what if a borrower’s car breaks down or the home heating system stops working? “If that happens,” Mr. Pair said, “you should see if you can get money from family or friends until the loan closes. After that, you can repay them.”

Lenders can check for major changes in a borrower’s financial profile without retrieving a credit score, but if a lender does use this method and learns that the score has materially changed, the lender must disclose that to Fannie Mae. (High credit-card bills can affect credit scores, because they directly influence a borrower’s debt-to-income ratios.)

Just one point in a credit score can change things tremendously.And potentially, they may not qualify for the loan. Borrowers whose scores drop to 719 from 720 can, in many instances, incur additional fees. And last-minute changes in terms could also delay the loan. New federal regulations that took effect last year mandate a three-day waiting period for borrowers whose interest rates have changed by more than an eighth of a percentage point.

That waiting period, instituted so that borrowers have time to review the new terms, can be waived for emergencies. But for those borrowers who locked in a low rate for a fixed period or who have tight scheduling, such delays can be costly.

Sometimes borrowers begin the loan process with such a high credit score that lenders will think nothing of a drop in the score late in the loan process. Clients who communicate well with us can work things out, the ones who have problems are really the rogue clients who try to hide things from you. Communicate, communicate, and ask if unsure what to do. 


Lower mortgage rates are opening a window of opportunity for borrowers with a mortgage rate above about 5.625% to refinance. For conforming 30-year fixed rate loans, this covers a period from roughly July 2003 to November 2008; however, at least a portion of those borrowers have already refinanced, and many others (especially those with post-2005 loans) probably have insufficient equity to allow for a successful refinance.

Drug companies continue to do research on new drugs, many aimed at women.

DAMNITOL
Take 2 and the rest of the world can go to hell for up to 8 full hours.
EMPTYNESTROGEN
Suppository that eliminates melancholy and loneliness by reminding you of how awful they were as teenagers and how you couldn't wait till they moved out!
ST. MOMMA'S WORT
Plant extract that treats mom's depression by rendering preschoolers unconscious for up to two days.
PEPTOBIMBO
Liquid silicone drink for single women. Two full cups swallowed before an evening out increases breast size, decreases intelligence, and prevents conception.
DUMBEROL
When taken with Peptobimbo, can cause dangerously low IQ, resulting in enjoyment of country music and pickup trucks.
FLIPITOR
Increases life expectancy of commuters by controlling road rage and t he urge to flip off other drivers.
MENICILLIN
Potent anti-boy-otic for older women. Increases resistance to such lethal lines as, "You make me want to be a better person".
JACKASSPIRIN
Relieves headache caused by a man who can't remember your birthday, anniversary, phone number, or to lift the toilet seat.
ANTI-TALKSIDENT
A spray carried in a purse or wallet to be used on anyone too eager to share their life stories with total strangers in elevators.
BUYAGRA
Injectable stimulant taken prior to shopping. Increases potency, duration, and credit limit of spending spree.