Real Estate Financing...

It's true, it's true, it's darn true!  In my 7 illustrious years in the Mortgage Business, 65% of my business has been Conforming Loans.  You know, the Gold Card Elite who have the type of credit that warrants dinner and drinks at the White House.  As crazy as the Market as been, Conforming Loans have remained the same.  Yet, I've heard the echoes of a dried up Sub-prime Market....even rumors of it being totally dead.

Well, to sum it up in 2 words.....Not Quite.

We happen to be closing one today.

Check this out:

616 Credit Score

Large Judgement on Credit (which had to be paid off of course)

$100,000 cash-out

80% Loan To Value

The last 24 months of the borrower's mortgage history is scattered with 30 and 60 day lates.

CLOSED IN 3 DAYS!!!

And oh, one more small thing to consider.....it's a Stated Income Loan!  The borrower happens to be Self-Employed.

The rate isn't too bad either.....8.5%!

The land of second chance financing hasn't disappeared yet.

We await the closing package....

Well, it's official.  Yep, the Market is in limbo.  Actually, that's not totally right.  The Market is doing the limbo.  What do I mean?  Ladies & Gents, rates are ridiculously low!  How low you may ask?

30 Year Fixed Rate Mortgage - 5.25%

15 Year Fixed Rate Mortgage - 4.75%

If you are on the fence about buying a home, it may not be a bad idea it is a very good idea to jump over the fence.  Thinking about whether it is the right time to refinance your mortgage?  Well, with that finger on the trigger I strongly suggest you might want to pull it towards your chest and fire away.

There is rarely a better way to establish an appropriate sense of urgency than to offer cheap money.  The money is cheap folks, it is yours for the taking.  The only question is.....are you a taker?

*This post is written by Jason Sardi (but you probably already knew that), a Mortgage Consultant with First Choice Equity Group Inc. here in Allentown, Pennsylvania.  If you would like more information, feel free to email me at jsardi@fcegi.com or give me a ring Toll Free at 1-866-262-8720 ext. 229.  If you would like to copy or plagiarize this particular piece of prose, you may be out of your freaking mind:-)*

MSN Money had an interesting and relevent article today speculating on how Bank of America will handle the buy-out of Countrywide.  Click here to read the article.

I'd like to focus on a few key points that were made in the article:

- First off, the relationship between BOA & Countrywide is not new, it's been going on for 40 years.  In my mind, this should give you some perspective on whether it was an intelligent decision on BOA's part and the fact that this news wasn't a 'shocker' to a lot of us in the Mortgage Profession.  There is familiarity between the two firms and I believe this decision is an example of the Industry starting continuing to cure itself of the ills that came down on it and within it.

- Countrywide is said to have a heck of a lot of liquidity and the rumors of bankruptcy were probably off the mark.  Then again, they were sure itching for something like this because something had to be done.

- Bank of America has said that it will be more selective in acquiring Mortgages issued by other banks or independent brokers.  This, in my estimation, is HUGE!  This should of been done all along and was probably a major component of the problems that went down with Countrywide.  Being a Mortgage Broker myself, we have always run loans through their system, got the approval, packaged it up and sent it on its way.  Our files were clean and performed well.  I wasn't concentrating too much on what other Mortgage Brokers were doing, didn't have to at the time.  Then, the whole Sub-Prime Market started taking a plunge and we began experiencing an awful lag-time once our files were submitted.  I found out the reason for this........other Mortgage Brokers were running approvals online that were getting turned down and still sending the files into Countrywide because they had no other place to go with them.  What better example of 'Throwing It Against The Wall' than this practice?  Also, taking a look at how loans are performing that are coming from this Bank or this Broker should be a regular practice to make sure you are doing business with the right companies.  I think BOA will be on top of this to ensure they don't experience similiar problems.

- As far as Mozilo's take home from Countrywide's sale to BOA, it might not be a bad idea for Mr. Mozilo to float a few bucks to do his part in helping out the current Market from a Money Perspective.  And Mr. Mozilo, if you don't think you want to do that, you are always welcome to invest give some money to the International Bank of Jason Sardi:-)

Jason Sardi

Mortgage Consultant

1-866-262-8720 ext. 229

jsardi@fcegi.com

I have wanted to write about this subject for awhile.  Now before I go any further, I should point out that the Rehab I'm talking about has nothing to do with any addiction.   (I know, you are so disappointed and the title was such a tease:-). This has everything to do with newbie and/or seasoned Real Estate Investors who seek to buy properties and then Rehab them for eventual resale.

Here's a concrete example of a typical and very doable Rehab Transaction...

Customer is buying a distressed property for $45,000. He believes that he can fix it up to salable condition for $46,000. When the property is done, it should be able to sell for about for $180,000.  (Based off of an After Repair Value Appraisal)

In this case... we are loaning the borrower $96,400 which is 54% of 180,000!  (I can lend up to 80% of the ARV value if that is needed)

In other words...

We are giving him:

He doesn't need any of his own money!!!

A few notes in regards to these products:

- After the property is brought up to par, you can immediately sell or refinance to get cash-out.  If you chose to do a cash-out refinance, make sure you contact a Mortgage Company whose Investors don't have seasoning requirements (having to hold onto a property for 6 or 12 months after buying it before you can take cash-out).

-  Currently, with these Rehab Loans, you can't put cash in pocket on this particular product unless you refinance after the fact.

-  Minimum Credit Scores are generally required to be 660 and you must be able to fully document your income to qualify for the loan.

The thing that isn't often mentioned with Rehab Loans is the real value.  Sure, you can make a pretty good living doing these deals as a Real Estate Investor, yet there is another very tangible benefit deeper than just financial rewards.  Revitalizing properties help the growth and health of the community.  It's a Win-Win proposition and that's what any successful Real Estate Transaction is all about.

For more information on Rehab Loans in Pennsylvania, feel free to email me or give me a call.

Jason Sardi

First Choice Equity Group Inc.

Mortgage Consultant

610-439-2166 ext. 229

jsardi@fcegi.com

What better way to start the New Year than to concentrate on one of the more important subjects in our economy and in our world?  Active-Rain is blessed with many things and one of those things happens to be a lot of talented writers within the Real Estate Profession.  Here's my attempt to highlight some of the best in regards to the Mortgage Industry....

There's been a lot of non-sense thrown around with what has gone within the Industry.  And anytime you use or hear the word 'Fed'....it tends to get intimidating.  Matt Heaton wrote one of the more concise and informative tutorials on what The FED is and isn't about. 

* "Why does no one in the media understand The FED?" by Matt Heaton

One of the better contributors to the Mortgage side of things here can be found if you do yourself a favor and subscribe to Mr. Ken Cook.

* "The Federal Reserve Board is LYING - YSP All Over Again" by Ken Cook

I'd like now to call a spade a spade.  If you are looking for a post that truly exemplifies some of the best Mortgage-Related Insights from the year that was 2007....you'll have to read one of the best in all the land, Jeff Belonger.

* "Active Rain 2007 Year in Review -- Mortgages -- by Jeff Belonger"

To do one of these Reviews and not include the man I perceive to be a bona-fide Legend & Individual we can all aspire to be in the Mortgage Business, Mr. William J. Archambault, Jr. .....would be hazardous to my soul. 

* "Your Greatest Year In Real Estate Is Here" by William J. Archambault, Jr.

There was an interesting question brought forth from a very valuable contributor to Active Rain, Mr. Gary Miljour.....

*  "Are Wholesale Mortgage Banks putting themselves Out of Business on Purpose?" by Gary Miljour

Whether it is Mortgages or Marketing, this cat is stellar at both.  If you're a client, you can be assured to be represented by one of the best.  If your a Real Estate Professional, become a sponge and read up....

* "Inman Connect NYC 2008: Making Money From Your Blogging Efforts"  by Brian Brady

Many in our Industry may be reluctant to keep abreast of the times and technology before us, Matthew Blum is not and helps to let everyone in on our 'Dirty Little Secret'....we don't work by the hour.

* "Are You Available 24/7 For Your Potential Clients? Don't You Love Technology" by Matthew J Blum

If you are one of those who have a hard time proving your income and are looking to buy or refinance a home, Ricardo does a nice & parsimonious job of laying out the Stated Income product for us all...

* "Stated Income Loans" by Ricardo Bueno

Sometimes the best teachings and advice come from what NOT to do in your line of work.  I think Jim does a nice job in this particular case study...

* "Dishonest Lenders"  by Jim Ludes

There's a very respectable and time honored tradition on how to deal with problems....it's called presenting solutions.  In this post, a guy mentioned earlier who is vast becoming one of my favorite reads from the Mortgage Side of things...tees off...

* "Real Estate: We Broke It--Let's Fix It" by Ken Cook

On that note, I bid thee farewell for this particular evening.  I hope you can learn and take something away from these posts that makes your life just a tad easier.

The next two on the map are....

Matthew Rosov 01/07/08 through 01/13/08 

Keith Hoffman . 01/14/08 through 01/20/08

There will be no recreations of any type regarding the titles or content of this group or Review without the permission and expressed written consent of the Group's founder- Copyright 2007^©

Late at night while chowing down on a chopped sirloin and gulping up the last drops of Green Tea, I often times find myself watching the late night Infomercials we've become so accustom to seeing.  You know, Carlton Sheets & Company pitching the way to riches in Real Estate Investing.  I've done this since I was 18 years old and now at 31 years old and almost 7 years in the business....I have a much different perspective in the validity or lack thereof in what these shows are promoting and how they are promoting it.

I was given a fantastic & quite surprising gift awhile back from a gentlemen by the name of William J Archambault Jr.  That gift was a book he had written especially for Real Estate Investors, both new and seasoned.  Who is Bill?  In a nutshell, he's been in the business (in pretty much every aspect) since 1969.  He knows his stuff inside & out.  He's saw and been through the ups, the downs, all the cycles that is the Real Estate Industry.  If you want a Guru or Mentor or Professional to work with.........Bill is your man.

On my recent flight down to North Carolina to visit my loving parent & brother (Hi Dad, Mom, & Justin:-), I was finally able to sit down and read the book in its entirety.  Trust me when I say, "Awesome Read."

I'm not going to do a Book Review per se, but I will provide a link where you can get the book.  I strongly recommend you do.  It covers anything under the sun that is Real Estate.  It's hefty on pages but a very easy & entertaining read.  More than that, the value it has in information & Bill's sharing of knowledge is extraordinary.

Now, one may find it odd that I'm essentially promoting my 'competition'.  After-all, Bill is licensed in all 50 states so he can do loans here in Pennsylvania as well.  Well, I strongly recommend you call him.  Yup, that's right...I don't mind being overlooked for the best in the biz.  Besides, maybe he'll get too busy and I'll get the overflow:-) 

Back to my point though.  If you are Real Estate Professional, Real Estate Investor, or someone looking to get started in Real Estate........his book is a must read.  Put Carlton Sheets & Company aside and Invest in Bill's book first.

http://www.reii.org/ 

http://onehouseatatime.info/

I want to thank Mr. Bill for granting me the opportunity to read the work of a Mortgage Legend.  I'm sure anyone reading this will find the information just as relevant & important now as it will ever be.

*Note*

To All you Active-Rain Members, tonight I will be posting my 2008 AR & Real Estate Predictions.  As is somewhat typical of yours truly, it will be a sarcastic, tongue-in-cheek, & hopefully a humorous look into the future:-)