Texas Purchase & Refinance Mortgage Rates …….

Make your clients happy with these Low Rates & Low Fee Loans, also let your your clients, friends and family know……..that we will beat any deal on rates, fee’s and service.

 We are from Texas, We are operated in Texas, and We are Texas Strong…..!

 All Loans close on-time and within 30 Days or less.

Refinance Rates & Purchase Rates could be lower… have your clients call me to discuss.

Rates are still low. Get em locked!

30 yr Conventional 4.5% – 0 Discount Points – 0 Origination

15 yr Conventional 3.5% – 0 Discount Points – 0 Origination

20 yr Conventional 4.25% – 0 Discount Points – 0 Origination

10 yr Conventional 3.25% – 0 Discount Points – 0 Origination

30 yr FHA 4.0% – 0 Discount Points – 0 Origination

15 yr FHA 3.375% – 0 Discount Points – 0 Origination

30 yr USDA 4.5% – 0 Discount Points – 0 Origination

30 yr VA 4.0% – 0 Discount Points – 0 Origination

15 yr VA 3.5% – 0 Discount Points – 0 Origination

 Your Locally Owned and Operated Texas Mortgage Banker……

 * These rates are based on a estimated loan amount of $250,000 or above and roughly 3.7% to 5.867% APR depending on loan program. Rates are also subject to change without notice. FHA requires 3.5% down. Conventional requires 5% down.  Some rates are based on a 740 credit score or higher. Some loans require lower LTV, call for details.

Mike Clover

Mortgage Banker

Homewood Mortgage,LLC

O: 469.621.8484

C: 469.438.5587

F: 972.767.4370

18170 Dallas Parkway

Ste. 304

Dallas, TX 75287

NMLS# 234770

 Apply at: www.mikeclover.com

What Will 2014 Bring for Real Estate?

CNBC Real Estate Reporter Diana Olick has made her real estate predictions for 2014. While none of us can know what will happen to the real estate market either nationally or locally, Diana’s 2013 predictions were almost right on target, so perhaps she’ll be right again.

Here’s what Diana predicts for real estate in 2014:

1. Greater home sales activity. She believes more buyers will be coming into the market as more homes become available for purchase.The increased inventory is in large part made up of homes that were underwater, belonging to home sellers who decided to stick it out rather than opt for a short sale. With prices rising, more know how to sell a house from an equity position.
2. Prices will continue to rise, but more gently. Diana predicted increased prices in 2013, but didn’t predict the sharp 12% rise. She feels those gains were driven largely by investors in the low end of the market.
3. Rents will continue to rise. The present down payment requirements will continue to keep many first time buyers out of the market, putting more pressure on available rental properties. And of course, supply and demand generally dictates pricing.
4. Investors will stay in the market. Some believe that rising home prices will cause large-scale private-equity investors to leave the single-family rental market. Diana believes the opposite – that they will settle in for the long haul, keeping the bulk of their properties. She believes they’ll still be buying, but perhaps in smaller numbers.
5. Higher mortgage payments… Diana believes that interest rates, which are already more than a percentage point above last year’s rate, will continue to rise.

And what do we believe here at Homewood Mortgage?

We agree that rates will continue to climb. We also anticipate that most of our loans will be for home purchases rather than refinances.

We also believe that we’ll continue to make good loans for buyers all over Texas. As always, we promise low rates, low fees, and prompt service.

So if you’re thinking of becoming a Texas homeowner, call us at 1-800-223-7409 or apply on line at http://www.mikeclover.com/ We’ll be glad to get you pre-approved and ready to submit that winning offer. And if you do still have a high-interest loan and need to re-finance, we’ll be happy to assist.

There’s no application fee, and no obligation.

Mike Clover
Mortgage Banker
Homewood Mortgage,LLC
www.mikeclover.com

Texas Purchase & Refinance Mortgage Rates …….

 Make your clients happy with these Low Rates & Low Fee Loans, also let your your clients, friends and family know……..that we will beat any deal on rates, fees and service.

 We are from Texas, We are operated in Texas, and We are Texas Strong!

 All Loans close on-time and within 30 Days or less.

 Refinance Rates & Purchase Rates could be lower… have your clients call me to discuss.

30 yr Conventional 4.5% – 0 Discount Points – 0 Origination

15 yr Conventional 3.5% – 0 Discount Points – 0 Origination

20 yr Conventional 4.25% – 0 Discount Points – 0 Origination

10 yr Conventional 3.25% – 0 Discount Points – 0 Origination

30 yr FHA 3.875% – 0 Discount Points – 0 Origination

15 yr FHA 3.375% – 0 Discount Points – 0 Origination

30 yr USDA 4.375% – 0 Discount Points – 0 Origination

30 yr VA 4.0% – 0 Discount Points – 0 Origination

15 yr VA 3.5% – 0 Discount Points – 0 Origination

Your Locally Owned and Operated Texas Mortgage Banker……

 * These rates are based on a estimated loan amount of $250,000 or above and roughly 4.548% to 5.9% APR depending on loan program. Rates are also subject to change without notice. FHA requires 3.5% down. Conventional requires 5% down.  Some rates are based on a 740 credit score or higher. Some loans require lower LTV, call for details

Texas Purchase & Refinance Mortgage Rates …….

 Make your clients happy with these Low Rates & Low Fee Loans, also let your your clients, friends and family know……..that we will beat any deal on rates, fees and service.

 We are from Texas, We are operated in Texas, and We are Texas Strong!

 All Loans close on-time and within 30 Days or less.

Refinance Rates & Purchase Rates could be lower… have your clients call me to discuss.

 Rates Jumped after the Feds quantitative easing announcement.

30 yr Conventional 4.5% – 0 Discount Points – 0 Origination

15 yr Conventional 3.5% – 0 Discount Points – 0 Origination

20 yr Conventional 4.25% – 0 Discount Points – 0 Origination

10 yr Conventional 3.25% – 0 Discount Points – 0 Origination

30 yr FHA 4.0% – 0 Discount Points – 0 Origination

15 yr FHA 3.5% – 0 Discount Points – 0 Origination

30 yr USDA 4.375% – 0 Discount Points – 0 Origination

30 yr VA 4.0% – 0 Discount Points – 0 Origination

15 yr VA 3.5% – 0 Discount Points – 0 Origination

Your Locally Owned and Operated Texas Mortgage Banker……

* These rates are based on a estimated loan amount of $250,000 or above and roughly 4.7% to 5.99% APR depending on loan program. Rates are also subject to change without notice. FHA requires 3.5% down. Conventional requires 5% down. Some rates are based on a 740 credit score or higher. Some loans require lower LTV, call for details.

Once again, our people in Washington D.C. are taking steps to “fix” the mortgage industry.

On June 25, 2013 the Corker-Warner Housing Finance Reform and Taxpayer Protection was introduced with the stated intention of “strengthening America’s housing finance system by replacing government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac with a privately capitalized system that preserves market liquidity and protects taxpayers from future economic downturns.”

According to the Bob Corker Website (http://www.corker.senate.gov), the private mortgage market has all but disappeared as a result of the 2008 Fannie Mae / Freddie Mac bailout (via a $188 bill capital injection from taxpayers). Today, nearly every loan made in America comes with a full government guarantee.

This is a complex piece of legislation, encompassing 154 pages. (You read the summary plus the entire text at the Corker website above.)

Along with other things, it would create a new Federal Mortgage Insurance Corporation (FMIC) while phasing out Freddie, Fannie, and the current Federal Housing Finance Agency.

It will eliminate the “Affordable Housing Goals” that forced Fannie and Freddie into making loans that people couldn’t possibly repay. At the same time it will establish a Market Access Fund focused on making grants to state housing agencies, promoting affordable rental housing, and providing borrower counseling programs. They still want everyone to have housing – but have abandoned the idea that everyone must own a home.

On the scary side, the new FMIC will have the authority to issue regulations.

Another highlight of the Corker-Warner legislation deals specifically with second Trust Deeds – commonly known as home equity loans.

Under the terms of this bill, a first lien holder on a single family home mortgage would be allowed to block the homeowners from taking out a home equity loan. Any time the combined loan to value ratio reaches 80% or more, the homeowner will be required to obtain approval (permission, which may or may not be granted) from the first lien holder. That first lien holder will be allowed to decide the home’s market value through their own in-house appraisal department.

The bill also calls for the creation of a database that will track second liens and notify first lien holders of their existence – and of the homeowner’s payment history on those junior liens.

Going back to the actions that caused the mortgage melt-down in the first place, we see that the unintended consequences of Congressional interference in the housing industry have been dire. Let’s hope this latest “fix” is not more of the same.

Mike Clover
Homewood Mortgage,LLC
Mortgage Banker
www.mikeclover.com

All too often, people are approved for a loan and happily anticipating moving into a new home – only to find out at the last minute that their loan has been denied.

Why? Because they entered into avoidable situations that changed their desirability as borrowers. The bank no longer considers them credit-worthy.

Your loan officer should give you this information when you first apply for a loan. But we’ve found that in the excitement of a new home purchase, some consumers tend to forget the advice.

This “Don’t do list” can’t be repeated too often, because heeding its advice can make the difference between owning your dream home and remaining a tenant.

1. Don’t quit your current job
Some people think that the lender will not find out if they quit their job. They will. Most banks do a last minute verification of employment and that is when the problems begin. So stay in your current job until AFTER your loan closes.

2. Don’t transfer money between accounts. This just causes more paperwork for everyone involved. When you transfer money between checking and savings we have to show where the money came from. Try to use one account only for your real estate transaction; this avoids the big paper shuffle involved with this type of activity.

3. Don’t make large deposits in your accounts being used for the transaction. This is a huge problem for lenders. Deposits from your employer are fine, but cash deposits or gifts could cause your loan to be denied. Even money from the sale of a car could be an issue. Consult with your loan officer before depositing any money into the account being used to buy your new home.

4. If you do sell a car or other large item…Keep a careful record of the transaction. Write a dated, detailed bill of sale. Along with giving a copy to your buyer, have him or her sign and date a copy for your records. If paid by check, make a copy of the check. Then go talk with your lender before you do anything with it.

5. Don’t be late on any obligations If you are late on a credit card, car note or student loan, this could cause your credit scores to drop. In some cases the lender may re-pull your credit report at the last minute. Being late on obligations can cause your loan to be denied.

6. Don’t buy anything beyond the essentials. Restrict your shopping to groceries, gasoline, and other essentials. This is not the time to run up a credit card balance or deplete a checking account by buying large items, replenishing your wardrobe, etc.

7. Don’t go shopping and allow a sales person access to your Social Security Number. He or she will run a routine credit check in hopes of selling you something on credit. That inquiry could alter your credit score just enough to cause your loan to be denied.

You can buy furniture for that new house after your loan has closed. For now, restrain the impulse.

8. Don’t lease a new car. A lease is a financial obligation – so it will hurt you just as much as if you purchased a new car.

9. Don’t use your credit card as security to book a vacation, reserve a car rental or airline ticket, etc. On your credit report, it will look as if you’ve SPENT that money.

10. Don’t pay off a credit card balance without first checking with your lender.

11. Don’t open or close a credit account. Either activity will lower your credit score. A lower credit score can result in a higher mortgage interest rate or an outright denial of the loan.

12. Don’t co-sign a note or loan for anyone. This is a bad idea under any circumstances, but right now it could cause you to lose your house.

In short – don’t do anything that causes your credit picture to change in the slightest.

You were approved for your mortgage loan based on circumstances as they were on that day. Should any of those circumstances change, the loan could be denied.

Mike Clover
Mortgage Banker
Homewood Mortgage,LLC
www.mikeclover.com

Under the terms of the Dodd-Frank act, as of January 10, 2014 banks will be subject to the Ability-to-Repay Rule – also known as the Qualified Mortgage Rule. One of the provisions of that rule is that a borrower’s total debt liability shall not exceed 43% of their income. Right now the limit is 45%, with exceptions made in some cases.

What does that mean in dollars? If your monthly income is $10,000, your total monthly debt can now be no more than $4,500. After January 10 that number will be reduced to $4,300. In terms of a 30-year Mortgage loan at 4.5% interest, that $200 reduction in available debt reduces your maximum loan amount by about $40,000. That number will fluctuate based on the interest rate, with a higher interest rate dictating a smaller loan amount.

How is your debt to income ratio calculated?

It begins with your income before taxes are withheld.

From that you must deduct:

• All payments that would show up on your credit report. For instance, car loans, credit cards, and payments on any other real estate you own.
• Taxes, insurance, and HOA fees on that other real estate.
• Child support or Alimony
• Any business loss shown on your income tax return
• The new Mortgage payment
• Taxes and insurance
• HOA fees

What should you do?

Before you begin to shop for your new home, call us and get pre-approved for your mortgage loan. Then you’ll know just how much you can spend based on your present debt, your credit scores, and the amount you’re able to furnish as a down payment.

A $200 increase in your debt to income sounds like a small amount, but when it translates into a $40,000 difference in the price you can pay for a new home, it’s significant. So if it looks like the new debt to income ratio rules will put you just out of reach of your dream home, begin now to put aside more money for a down payment and to reduce amounts owing on other consumer debt.

One warning: Don’t make major changes in your financial situation until you’ve talked with your loan officer. It sounds backward, but paying off a credit card could have a negative impact on your credit scores, and that in turn could impact your interest rate and mortgage payment.

And of course, don’t take on any new debt or increase the outstanding balance on any credit lines. That will not only change your debt to income ratios, but can reduce your credit scores and thus raise your interest rate.

We at Homewood Mortgage finance homes anywhere in Texas, and we promise low rates, low fees, and prompt service. So if you’re thinking of becoming a Texas homeowner, call us at 1-800-223-7409 or apply on line at http://www.mikeclover.com/ We’ll be glad to get you pre-approved and ready to submit that winning offer.

There’s no application fee, and no obligation.

Mike Clover
Mortgage Banker
www.mikeclover.com

If senior officials listen to their own economists, the answer will be yes.

At present, the Fed expects to begin raising interest rates when the unemployment rate drops to 6.5% and inflation rises to 2.5%.

Now a half-dozen Fed economists are recommending that the unemployment objective should be lowered to 6% or even 5.5% before any change. They believe the economy will simply perform better if they hold off.

This is in part due to the fact that unemployment numbers don’t mean the same thing they meant a decade ago. We’re now experiencing a 35-year low in labor market participation. This is in large part due to the number of workers who have given up on finding a job and simply dropped out. Those “drop-outs” are not counted in the overall unemployment figures.

Some believed that a decrease in emergency unemployment benefits would get people back to work. However, the decrease took place without doing much to increase employment. It turns out most people weren’t receiving unemployment benefits because they didn’t want to work – it was because they could find no work.

Now the implementation of Obamacare has put thousands more in the “under employed” category, as large employers cut hours to avoid providing insurance. A store clerk gave me an earful about that situation just this week.

Now economists are recommending that the zero-bound interest rates remain in place until at least 2017 and kept below normal into the early 2020’s.

At present, companies are using the low interest rates to raise record levels of debt capital – which could in turn lead to expansion, more jobs, and a stronger economy.

Keeping rates at our near present levels will also continue to benefit the housing market, as lower mortgage interest rates mean more individuals and families can afford a house payment.

The Fed may also be considering an earlier than anticipated reduction of Quantitative Easing – perhaps as soon as March. Right now the central bank is pumping $85 billion per month into bond-buying. Its balance sheet recently stood at more than $3.8 trillion.

While the stock market went into shock in May when a reduction was discussed, economists now believe that the stock market won’t suffer as long as low interest rates remain in place.

Will the economy respond as expected? Are these the right moves?

Only time will tell.

Mike Clover
Mortgage Banker
www.mikeclover.com

Fannie Mae’s official forecast was written during the shut-down, so in a sense is obsolete. However, they based their prediction on the assumption that the shut-down would end as it did.

Based on a lowered estimate of growth in the 4^th quarter, forecasters lowered their estimate of economic growth for 2013 by 0.1% – bringing it to 1.9%.

The Federal Reserve’s decision to maintain the pace of asset purchases for now brought long-term interest rates back down, but momentum is still weakened due to the threat of tapering in 2014. They expect to end the asset purchase program in the second half of 2014, but predict that funds rate hikes won’t happen until third quarter 2015 – when unemployment rates are expected to fall to 6.5%.

Economists have lowered their mortgage rate hike predictions and now think that rates will average 4.4% in the 4^th quarter and rise to 5% a year from now.

The refinancing boom appears to be over, in spite of the dip in interest rates. However, existing home sales in 2013 are, so far, averaging 12% above 2012. Pending home sales did decline In August, but even with a dip, 2013 should finish at 10% above last year. Home sales are now at the highest level in six years.

Did the shutdown have an effect? Yes, but since it lasted less than a month, the impact was limited. The primary problem was delays, as FHA and VA were operating on reduced staff. In addition, government employees who were furloughed had their home purchase loans put on hold – causing problems for both them and sellers who expected to close their home sales in early October.

While they’re back to work, they may still experience delays as the backlog is addressed.

Due to revised estimates of total mortgage originations in 2012, predictions for 2013 loan originations were revised downward by 15% – to $1.83 trillion.

Loan originations are expected to drop further in 2014 due to the rising mortgage interest rates and the subsequent decline in refinancing activity. The prediction is $1.36 trillion in 2014.

Although total mortgage debt has been dropping for 5 years, forecasters expected an increase this year. Instead, total outstanding single-family mortgage debt fell by 1.8% in the second quarter, leading them to predict an overall drop again in 2013.

So what’s the effect on you as a consumer?

You can still get a home mortgage loan at a low, low interest rate, compared to the averages over the past 40 years. And when you call on the Mike Clover Group at Homewood Mortgage LLC, you’ll also pay low fees.

Remember, no matter where you are in Texas, we can help.

Mike Clover
Texas Mortgage Banker
www.mikeclover.com

Handling of Collections & Disputed Accounts

In an effort to reduce risk in backing mortgage loans, HUD has once again revised its regulations, effective October 15.

Mortgage Letter 2013-24 deals with credit analysis of collections and judgments, and outlines how lenders must proceed.

As you probably know, the first step in FHA loan approval is use of the TOTAL Mortgage Scorecard.  This scorecard takes into account the presence of collections or judgments via the credit score. Should a borrower be approved through the TOTAL Mortgage Scorecard, no documentation or letters of explanations will be required.

If TOTAL Mortgage Scorecard results in a “Refer,” the lender must manually underwrite the loan – and must determine the cause of the collections or judgments.

• Was it disregard for financial obligations?
• Was it an inability to manage debt?
• Were there extenuating circumstances?

In order to make this determination, the lender must gather supporting documentation, including a letter of explanation from the borrower for each outstanding collection account and/or judgment. It will be up to the lender to determine whether the explanation is consistent with other credit information in the file.

Collections

If the borrower’s combined collection accounts equal $2,000 or more, the lender must perform a “Capacity Analysis.” Medical collections and charge-offs are not included in this aggregate. However, collection accounts of a non-purchasing spouse ARE included here in Texas.

Capacity analysis consists of one of the following:

• Payment in full of the collection account – using a verified acceptable source of funds.
• A payment agreement with the creditor, accompanied by a letter from the creditor verifying the monthly payment. This monthly payment will be included in the borrower’s debt to income ratio.
• In the absence of a payment arrangement, the lender must calculate a monthly payment equal to 5% of the outstanding balance. This payment will be included in the borrower’s debt to income ratio.

Judgments

Until now, borrowers were required to pay off court ordered judgments before being eligible for FHA insurance. Now there is an exception.

Under the new regulations a loan may be approved if the borrower has entered into an agreement with the creditor to make regular monthly payments and has made a minimum of three such payments over a period of 3 or more months. Pre-payments will bring the balance down, but won’t help with loan approval.

The borrower must provide evidence that the payments have been made on time and in accordance with the agreement.

And of course, the payment will be included when calculating the borrower’s debt to income ratio.

As with collections, in Texas and other community property states judgments against a non-purchasing spouse also must be paid off or meet the rules for exception.

Disputed Accounts

Many borrowers have found to their dismay that their credit reports contain inaccurate information. Some of that inaccurate information is the result of poor data entry, some is there because old accounts that should have “fallen off” the report have not been removed, some because the original bill was in dispute, and some are due to identity theft.

Accounts that appear as “in dispute” on a borrower’s credit report are not considered by TOTAL Mortgage Scorecard.  Therefore, they must be addressed in manual underwriting.

Disputed accounts fall into two categories: Derogatory and Non-derogatory.

Non-derogatory disputed accounts

If a borrower is disputing non-derogatory accounts, the lender is not required to downgrade the application to “refer.” However, if the dispute results in the borrower’s monthly debt payments being lower than originally indicated, he or she must provide documentation.

Derogatory Disputed Accounts

If the cumulative outstanding balance of such accounts is less than $1,000, a downgrade is not required.

If the cumulative outstanding balance is $1,000 or more (excluding medical accounts) the borrower must provide a letter of explanation and documentation supporting the basis for the dispute. The lender must analyze the documentation to determine whether the account should be considered in the underwriting analysis.

In contrast to collections and judgments, disputes involving a non-purchasing spouse are not included in the $1,000 aggregate balance.

Identity Theft

Disputed accounts resulting from identity theft and credit card theft are not included. However, the borrower must provide documentation verifying the charges as fraudulent. This can include a letter from the creditor and/or a police report.

Mike Clover
Texas Mortgage Banker
www.mikeclover.com