Colorado Home Search Website

We have created a new Colorado Homes search site, ColoradoHomesiq.com.  ColoradoHomesIQ provides homebuyers the ability to save searches, read information about specific neighborhoods, and ask questions to local Colorado real estate experts.  Check out Coloradohomesiq.com from Cherry Creek Mortgage Company and let us know what you think.

Loan Modification Numbers Still Out of Whacked

The government's loan modifications program which was sold as a program that will help more than 5 million is still failing to live up to they hype. The program has only helped provide 421,804 home owners with loan modifications since it began. Which is great, until you know how much it has costed tax payers in America.

The government has spent over $75 billion to help over 400,000 home owners with loan modifications. If you do the math, each modification comes with a price tag over $177,000. While this number has come down slightly from when I first reported this "bank bailout," it's still obvious this was a horrible thought out program or well though out bank bail out.

Real Estate Niche

If you could, would you work with your ideal client on every transaction? Over the next few weeks we are going to help you with creating a niche.

A lot of agents avoid developing a niche because they don’t want to “limit” their business. However, creating a niche doesn’t limit your business, but allows you to focus your marketing time and money on your “ideal client.” Establishing your expertise within your niche is not an overnight transformation. While you are building your niche you will continue to work with all clients even though they don’t “fit” your niche. However, in time you will have the ability to only work with your “ideal clients” and refer all other prospects to other agents.

First you must decide what YOUR NICHE will be. Consider the following questions when determining your niche:

• What defines you?
• What are your interests?
• Who do you like working with? Who are your friends?
• Who were your past clients that you enjoyed working with the most?
• What are you doing when you’re not a Realtor?
• Where do you live?

Take some time to think about your niche and remember the greater the passion for your niche the less work you will be doing.

Check out this article for more information
http://www.brokeragentsocial.com/article/485/breaking-down-niche-economics-how-what-where-and-when

FHA Guideline Changes

FHA announced over the weekend that they will be changing their mortgage insurance premiums effective September 7, 2010. Currently, borrowers obtaining a FHA loan pay 2.25% for upfront mortgage insurance and 0.55% for monthly mortgage insurance. For a $200,000 mortgage the mortgage insurance would be $4,500 and $93.73/month.

On loans after September 7th FHA borrowers will pay 1% for upfront mortgage insurance and 0.90% for monthly mortgage insurance.

While home owners will end up paying more for mortgage insurance in the long run, this was a necessary change to keep FHA above water. FHA has taken major hits in the last few years and changes needed to be made for the program to continue.

Need to Sale, but Underwater?

With almost half of Colorado home owners underwater on their home there are a lot of people wondering what to do when they have to move? Bankruptcy? Foreclosure? Short Sale? Or do you keep the house and convert in to a rental?  None of the options are great, but what is the best of all evils?

There is no right answer for every one, however, more lenders are starting to allow clients to purchase a new house after a short sale is completed with NO seasoning requirements.   FHA announced this change in guidelines in December of 2009, however lenders still required applicants to wait 2-4 years after a short sale to be eligible for a new mortgage.  A majority of lenders still require borrowers to wait, but there are a few lenders that will now let you obtain a new mortgage immediately.

However, there are additional guidelines you must meet to qualify for a new mortgage without waiting at least two years.  If you are considering a short sale on your current house and purchasing a new home you must:

1. Have no delinquent mortgage payments in the last 12 months and your mortgage must be current at time of closing.
2. You can't have any delinquent payments on any installment debts in the last 12 months.
3. You can not complete a short sale just to take advantage of the market.  You need to be able to show that moving is necessary (increase or decrease in family size, moving to a different geographic area)

If you have any questions or are planning to do a short sale please call us for more information.

Why Locking is Better than Floating?

Once you lock your interest rate you are guaranteed that rate as long as you close with in the lock period. However, if rates fall you can not take advantage of lower rates. So should you lock or float?

There is an easy way to determine if you should lock your mortgage interest rate. There are only three options that can happen when locking an interest rate. Rates can go up, rates can go down, or rates can stay.

If you lock your interest rate and rates increase or stay the same you win. The only situtation you would lose is if rates decrease during your lock period. However, if you float and rates increase you lose, if rates remain the same you took a risk for nothing.

Lock your rate as soon as you can, UNLESS you know mortgage rates are trending down. The odds are on your side.

Remodeling This Spring

If you are planning on remodeling or doing any improvements this spring you may be able to get tax credit from the Federal government. The government is providing a tax credit for qualifying energy efficient products. Visit http://www.nahb.org/generic.aspx?genericContentID=113316 for specific details on the tax credits.


Also, for all Colorado home owners, Colorado will begin their appliance rebate program for energy efficient appliances later this month. We will let you know when the details of the program are released.

How Guidelines Changes Affect You

There has been so many changes in the mortgage industry nationally and in Colorado over the last few months it's tough to keep track. Our business has been constantly changing for the last 3 years, but over the last few months we have seen big changes that will affect you trying to obtain a loan. Below I have listed the big changes and how they will affect you.

Qualifying debt-income ratio has been lowered by most companies to 45% from 50%. The tougher guidelines decrease your purchase ability. If you household income is $4,000/month your purchase power has been decreased by over $30,000.

When FHA increases their fees this spring (upfront and monthly mortgage insurance) you will not only be paying more you will also be buying less.

CHAC in Colorado has recently changed their guidelines AGAIN, but this time it's to the home buyer's benefit. CHAC will once again provide down payment assistance to most home owners in Colorado. They do not lend in all cities and counties so for more information please contact us.

The new GFE which was instituted at the beginning of this year, doesn't do much but create a new headache and more paperwork. If you not seen this form you will get a good laugh once you receive it.

It's important that you understand how much the process and guidelines have changed before you begin the process of refinancing or purchasing a new home. Please call with any questions or advice. Or you can visit our website www.colomortgages.com

There is Not Much Time Left

No I'm not talking about the tax credit. While the home buyer tax credit has received the most attention, the government's mortgage backed security (MBS) program has done more for the real estate market and may have a bigger impact when it's over.

The federal government allocated $1.25 TRILLION to purchase MBS to keep mortgage backed rates. In fact, they have become the ONLY player in the MBS market. The MBS purchase program is set to expire at the end of March. Once the government leaves we will see rates increase, the question is how much? Some experts believe we will see an increase of at least 1% immediately and possibly 2%-3% higher by the end of the year.

What does this mean in dollars? If you have a $200,000 loan currently you could receive an interest rate of 5% which would give you a payment of $1,073. If rates increase to 6% your payment will increase to $1,199. The difference of $125/month or $1,500/month or $45,000 over the life of the loan.

If you thought of refinancing, have a rate above 6%, have an adjustable rate, or purchasing a new home, do it now. Go to www.colomortgages.com and apply online for free.

HAMP and Another Short Sale Disaster

New numbers were published by the government a few weeks back with regard to HAMP, the government's loan modification program. And I was surprised they would release the numbers! Any one who has tried to obtain a loan modification, this might not be too big of a surprise, until you find out how much the government has paid out.

Since the program started earlier this year over 3.1 million have applied for a short sale and the lender has requested initial documents to process. Out of 3.1 million people only 31,000 have received a permanent loan modification, that's only 1% and well short of the 4 million people our government promised to help!!!! While, lenders and the government guidelines are to blame, it's not all their fault. There are a lot of people that don't send in the paper work or are just plain tired of the headache tying to obtain loan modification and give up.

As I have said in the past, if you don't have professionals helping the public, the success rate of any loan modification program will be low. There is just too much paper work and too much to know for the average American to handle.

Now here is the real kicker. For helping 31,000 Americans lower the mortgage payments lenders have received over $27 BILLION in incentives from the government. $27 BILLION!!!! ARE YOU KIDDING ME!!! If the government would have paid off mortgages of $200,000, they could helped 135,000 home owners pay their mortgage IN FULL!!!!

HAMP has become another bank bail out, with out all the bad press that TARP received. This is amazing, that we would pay $27 BILLION to lenders to help on 31,000 people. And now the government has not only created a similar program for short sales, they have also increase the HAMP funds to $50 BILLION.

The bottom line is, that lenders are getting RICH without providing any service or product, and we are paying for it. The loan modification and short sales that we are paying for, lenders would have done regardless of a government incentive program, as it SAVES them money. And I have heard countless stories and worked on loan modifications for friends that qualify for HAMP and are being denied for no reason, except that they don't help the bottom line of the lender.

If you are working on a loan modification, good luck and hopefully it's the lenders financial best interest.

HVCC Ended Appraisal Fraud?

Fannie Mae and Freddie Mac along with the Attorney General of New York created this great program called Housing Valuation Code of Conduct (HVCC) that would solve all the appraisal fraud problems we have experienced over the last few years. While EVERY ONE in the business knew this was bad idea from the beginning the public was unable to let their voice be heard.

HVCC has not only resulted in higher fees and additional headaches for the consumer, a recent report shows appraisal fraud has actually increased by 40%. Another government intervention failure and I know there will be more to come.

When will they learn to talk to experts in the business before they create or pass new guidelines/laws?

The Moving Target

As the mortgage industry continues to evolve the toughest obstacle to over come is the constant moving target of loan approval. Tougher guidelines continue to limit home ownership to those who want to buy. Many potential home owners are finding out they may have qualified last month to purchase a home and now they don't OR they are approved for a much lower loan amount. So what can you do to make sure that you are able to buy home today AND next month with guidelines changing so rapidly and often?


You need to make a budget for yourself and know what you can afford and WANT to pay on a monthly basis. The biggest problem most potential home owners make is they try to purchase a house at their qualifying amount, which is not always what they can afford. Mortgage underwriters only account for the debt that is reporting on your credit and you may have other obligations that are unknown to the underwriter. Make sure you have room in your budget for emergencies and don't over buy. By not over buying you are also protecting yourself from debt to income ratio guidelines changing.

Pay off your debt and save money! I know this sounds like common sense, but you don't how many people purchase new items for their home BEFORE they close or start the approval process. The lower your debt and the higher your savings will help your chances of loan approval when guidelines change. Mortgage underwriters will grant exceptions on certain guidelines if there are compensating factors and the two biggest compensating factors; our your debt to income ratio and savings.

Plan ahead - Once you obtain a mortgage approval it is typically good for 120 days, but you must be approved FIRST. Before you start looking for houses talk with a mortgage professional and obtain underwriting approval. This way if guidelines change, you most likely won't be affected as your loan is already approved. Also, the approval process is taking a little longer then it did six months ago, if you wait to start the approval process until you are under contract you may run in to complications with closing on time.

Finally, be prepared for the loan approval process to be a little more in depth and require more documentation then you did the last time you purchased a house or refinanced. If you haven't obtained a new mortgage in the last 12 months you are going to be surprised/shocked on how different the process is now.

If you have any questions or would like to be pre-approved for a mortgage please call 303.666.6550, email, or visit us online.

http://www.colomortgages.com/

YES, We Are STILL DOING LOANS!!!!

I've never been so amazed on how many people believe every thing they hear on the news. Almost every person that I have met in the last month are amazed that I'm still doing business in the mortgage industry. They all thought that mortgages were near impossible to obtain at this point and were surprised to hear that I was not filing for unemployment. What about the credit squeeze they heard about on the news?

The facts are, that mortgages are still being approved and funded every day. Yes, the guidelines can be tougher in some places and there are a lot of loans that we can no longer due. However, you don't have to have an 800 credit score or 20% down to be approved for a loan. NOT EVEN CLOSE.

There are still 100% financing options available and you don't necessarily have to have GREAT credit to obtain no money down financing. And, YES, you can still obtain a mortgage loan if you can't verify your income. AND, YES, you can still obtain a mortgage for an investment property.

However, lenders will no longer approved loans with layered risk (multiple risk factors). If you don't have great credit and can't verify your income, good luck finding a loan. Or if you want to purchase an investment property with no money down, have fun trying. There are dozens of programs still available (with good rates) that will lend money to people with a lower credit score or can't verify income or don't want to put money down, but you can't have multiple risk factors.

When we look back in 5-10 years at the mortgage meltdown, I believe layered risk will be one of the biggest lessons learned. A lot of these loans are great programs, but there can't be multiple risk factors involved within these loans.

Greg Selters
Mortgage Manager
Prosperity Financial, LLC
http://www.myprosperityfinancial.com/

Why the Mortgage Bail Out Bill Won't Work?

There has been a lot of hype surrounding the Mortgage Bail Out Bill that is scheduled to be signed by President Bush today. However, it's all been for the wrong reason. Our government has waisted a lot of time and tax payer's money for a bill that will cause more harm than good. I'm not sure how they could get this so wrong and not have a clue.

Why won't it work and what is wrong with the bill?

1. To be eligible for the bail out you must have obtained a loan between January 2005 and June of 2007. So if you received a loan prior to January 2005 or after June 2007 you are out of luck.
2. To receive help your current lender must be willing to write a portion of your current loan balance, similar to a short sale . If you currently owe $250,000 and your home's value is only $200,000, your current lender will have to write of $70,000.00. Don't get me wrong a lot of lenders will do this, but it's a process and not an easy one. Most consumers will not be able to navigate through the process on their own and very few lenders will be willing to help as it will take a lot of time and very little in compensation.
3. The consumer will have to share any appreciation they obtain with the government, up to 100%!!! If the consumer refinances or sales their house with in the 1st year the government would get 100% of the profit. The percentage the government would receive decreases 10% every year there after but is guaranteed to receive at least 50% of the profit regardless when you sale or refinance.
4. TIME!!! There will also be a huge back log to obtain approval as all of these loans will have to be manually underwritten. Lenders are already struggling to keep up with current FHA loans that must be manually underwritten and a lot of lenders have placed tight guidelines on FHA loans that they will manually underwrite. I foresee a lot of lenders not offering this new FHA program as they will not be able to handle the workload and/or it will be cost prohibitive.

Not only will the bail out fall short in helping the millions Americans, it has made it tougher for millions of American to purchase a home. The bill will eliminate down payment assistance (DPA) programs that millions of Americans use to help purchase a house AND it raises the the down payment requirements to 3.5%. While I agree with the elimination of DPA this is not the time to do it. We have now cutoff millions of potential home owners ability to purchase a house at time that we are trying to stimulate the housing market. How will this help???

If you are in a house or mortgage that you need to get our of you need to call a mortgage specialist and discuss your options. We will provide a free consultation to review your options and help you develop a plan.

100% Financing And Much More

In this market there is no doubt that it's tougher to get financing then it was a year ago or even a few months ago. If you are self-employed or trying to buy a house with no money down you already know this. But it doesn't mean you can qualify for a mortgage, even at 100% or with stated income. Although you can't go to your local bank and get a loan at 100% financing or with stated income, mortgage brokers have access to these types of loans.

Why don't you hear about these programs, because a lot of brokers are lazy and complacent. They are still in the same mind set they were a few years ago, they have a few lenders that they work with and when their lenders eliminate programs they assume every one has. A lot professionals in the business also have the mindset if they can't help you now, they can't help you.

Don't give up if you have been turned by a lender or even 5, there are programs out there that can help you achieve your goals, but you have to be willing to do the research. I spend about 2 hours a day looking for new lenders and new programs that can help my clients (and I know where to look). Yes, you might have to do a little work to improve your credit scores, but your mortgage professional should be able to help you do this. I would say about 25% of our clients needed help with improving their scores 20-30 points before we could do a loan, but that usually can be done with in 60 days.

If you are self-employed, looking for 100% financing, or just need help finding a loan call us, we will work you to find the right solution, whether that is doing a loan with us or another option that will meet your needs better.

Prosperity Financial - Your Mortgage Manager

Questions YOU SHOULD be Asking

Any time I talk with a client or introduce myself to a stranger as a mortgage professional, the first and usually only question I receive, is what are your rates? Obviously, price (rate and closing costs) are important to every one, but I'm amazed that is the only question I hear?

While, price is an important factor when making a decision on what lender to use, service is more important. The problem is most people don't understand how great service from their lender can save them thousands of dollars and a dozen headaches. Here are some questions that you should be asking your lender and why they are important.

What is your process and how do you communicate the status/progress of the approval process? While all lenders basically have the same process, they all do it differently, and this can be important if there is a time crunch, especially on purchase transactions. Communication is also very important, you want to make sure you are working with a lender that communicates effectively with all parties involved. Also, make sure your lender is willing to fax/email/mail your rate lock to you, this will help you avoid the bait and switch tactic some lenders employ.

What after closing services do you offer? I believe this is one of the most important questions you can ask. You want to make sure you have a great relationship with you lender and that they are looking after you best interest even after the loan closes. A good lender will offer multiple after closing services such as, credit analysis, rate watch, and value analysis. After closing services can save you thousands of dollars, if not hundreds of thousands.

How do you store/dispose of my private information? This should be a no brainer, however, there have been many instances in the news of lenders throwing away clients private information (application, tax returns, bank statements), in the trash with out shredding it. Make sure you lender takes your privacy as seriously as you do.

Ask for Referrals!!!!! It blows me away how few people ask me for referrals from past clients. Any GREAT mortgage lender will have a plenty of refferals that you can call and ask about their services. Great lenders have raving fans as clients and their clients never have problems talking to prospective clients. If your lender is hestitant or will not provide you referrals, find a new lender.


Prosperity Financial - Your Mortgage Manager

www.colomortgages.com www.3bed2bath.net www.myprosperityfinancial.com

Are you Kidding Me?!?!?

As most of you know in February of 2009 all television broadcasts are moving to digital. Which means that you will be required to have a TV or attenna or converter box that can receive the digital signal. What you might not know is that the Federal Government may spend over $1.3 TRILLION to help people with conversion!!!

ARE YOU JOKING????

Your tax money is going to help ensure people don't miss out on American Idol??? I didn't know watching TV was a right as an American? With all the problems we are facing now, we can't find a better way to spend this money?

Why it Will Get Worse

I know I have been predominately optimistic about the local real estate market, however, over the last few weeks I'm starting to think we might not be out of trouble yet. In fact, the problem may be getting bigger. Why the change of heart? Lender guidelines, "Declining Markets, and Americans spending habits"

This ugly tag of a "declining market" that lenders and mortgage insurance companies have set on most of Colorado and the nation is going to hurt. If a market is designated as a "declining market" financing becomes much more difficult for those who are trying to obtain financing (purchase or refinancing). 100% financing, forget about it. In a "declining market" 95% financing is difficult to find, a lot of lenders will on financing 90%-92%. Ten, twenty years ago this would not have been a problem (actually the norm), however, very few people plan or have the ability to make a down payment now.

Lender and mortgage insurance guidelines are becoming more conservative by the day. Stated income loans, which most self-employed borrowers use to qualify, are becoming extinct or so limited they are only useful to a small percentage. Other similar guideline changes have excluded thousand from home ownership or trapping them in bad loans that they can't refinance.

For example, I talked to a borrower the other day, he purchased his house 2 years ago with no money down. He has a great credit score 743, he has never made a late payment in his life, however, because he lives in a "declining market" and is self-employed he has no chance at obtaining a new loan at this time. He can't afford his payment when it increases $650/month, he is going to have to walk a way from his home.

So we have an excess of homes on the market, thousands of people who own homes and now in trouble (because of the economy, life changing events, or bad loans), lenders shutting the doors on a majority of society, and Americans who like to spend and hate to save. This is bad news for the national economy and local real estate market. However, all of the plans that have came from the White House or Capital Hill will do little or nothing to stop the slide. Watch out!!!

Prosperity Financial - Your Mortgage Manager
Lafayette, CO

www.colomortgages.com www.myprosperityfinancial.com www.3bed2bath.net

Paying For Other's Mistakes...

You came home after a hard day at work and open your pay check, and you are astonished, upset, angry when you see how much of your check has been taken my Uncle Sam. If you are still mad, STOP READING NOW!!!

Although most American home owner's made a conscious effort to purchase a house within their budget, obtain a loan that would fit their financial plan, and even struggled to make their payments in hard times, they now will be forced to help those who didn't. Many Americans don't know that their hard earned money and taxes they pay will be used to help bailout homeowners who made bad choices and may lose their home in foreclosures. The Federal Government has already allocated billions of dollars to bailout investment banks that made poor decisions and now there is legislation that is gaining popularity to bailout homeowners, AT OUR COST!!!

Politicians are quick to note that some of these homeowners were victims of fraud, and will share personal stories of these people to help them pass these bills. The fact is, a majority of these people made poor financial decisions and either purchased more house than they could afford or gambled with ARM loans and didn't follow up and refinance their house before the loan adjusted or over spent on materialistic items (like new cars, boats, electronics) and now can't make their mortage payment. And now, we have to pay for their mistakes and bail them out.

When will we as society start holding people responsible for their mistakes and make them accept the consequences of their actions??? If I don't manage my business correctly and I'm forced to close my doors the government is not going to come and save me, nor do I expect them or want them to. I understand and fully support helping those who are less fortunate, but I'm responsible for my failures and the consequences, as well as, my success and prosperity. I shouldn't have to bare the burden of others mistakes nor should I share in their prosperity. But I guess that is what our nation is becoming or already has become?

Prosperity Financial - Your Mortgage Manger

Say it Ain't so, Joe

Lenders are once over reacting and creating another mortgage mess. This time they are eliminating programs for qualified borrowers making it tougher for people to purchase or even keep their homes.

Every day I hear of new guidelines or lenders eliminating products eliminating another set of borrowers from purchasing or refinancing their house. There are very few lenders offering 100% LTV loans even if you have great credit, income, and assets it's a lot harder to obtain financing then it was a few months ago.

Self-employed borrowers options to obtain financing is also becoming scarce. A lot of self-employed borrowers typically use stated income loans because their tax returns do accurately reflect their cash flow. However, many lenders are eliminating their conforming stated income programs making it tough or impossible for them to obtain financing. If they can obtain financing the loan amount for which they will be approved will be much lower than before.

These two changes are going to eliminate a lot of borrowers from the real estate market and will also probably help increase the foreclosure numbers around the nation. There are some alternatives for borrowers, such as FHA and others but they will not be able to help a lot of these people. Not good for the real estate market and not good for the value of your house.

Why are lenders over reacting? There are a few reasons, supply and demand on the secondary market and mortgage insurance companies are facing problems with their current portfolio of loans that they insured over the last few years.

If you need help navigating through mortgage chaos to find financing that meets your financial needs, please call and we would be happy to help you or guide you in the right direction.


Prosperity Financial - Your Mortgage Manager

http://www.3bed2bath.net/ http://www.colomortgages.com/ http://www.myprosperityfinancial.com/