Real Estate Financing...

Here I've been, waiting patiently for the purse strings to loosen up just a bit here and there to better serve different situations and circumstances for Homeowners we serve throughout Pennsylvania.  While I hope it never gets as ridiculous as it once was, there have been many products whose existence has turned into crusty fossils.  Some of those products actually made sense, the kind that doesn't seem too common anymore.  I keep tabs on all the Investors & Lenders & Banks I deal with, passing on information that may be helpful to anyone I know and those that they know.  Minutes ago, I passed on this Press Release....

News Release

March 25, 2008

New Product Release: No Seasoning On C/O Refinance

First Choice Equity Group is currently in the midst of releasing a multitude of new programs through their Investors all designed to tap un-serviced markets.

"They Hope To Fill A Void Left By The Sub-Prime Fallout And Give REALTORS & BORROWERS Better Tools To Serve Their Market And Increase Their Financing Options."

Their latest product is a no seasoning c/o refinance. In essence you or your borrower can buy a home today... then turn around get a new appraisal and do a c/o refinance tomorrow.

Highlights of the "No Seasoning Product" are as follows:

Minimum FICO 590
Second homes
Owner occupied
No limit on C/O
Full doc only
 

For more information on this new program please call Jason (that's me:-) at 610-439-2166 ext. 229.

Also, please be on the look out for many new products to come.

Licensed with The Pennsylvania Department of Banking

Now, the predominant question will become, "Do you have this product for Investment Properties?"  Well, not quite yet.   This only applies for Owner-Occupied Properties or Second Homes.  I don't know what the future holds but my guess is it will still be awhile before that product rises from the waters to re-surface within our Industry for Non-Owner Occupied Properties.  Yet, this product can be very useful to those who are buying a property to live in that they may be buying under Market Value or that needs work to bring it up to par with the condition and values of similar properties within that particular area.  If this situation applies to you, here's a few things that you'll want to address in why the Appraised Value is different/higher than the sales price....

- Perhaps you bought a Pre-Foreclosure or Distressed Sale of Any Type from a very motivated seller or bank that just wanted to unload it to get rid of the headache.

- Maybe you put substantial improvements (Updated Kitchen & Bathroom), added square footage, put on a new deck, etc.  You'll want to make sure you save the receipts in case they want you to document the improvements that were made.  Be sure also to have the appraisal handy when you first bought the property and it's probably a good idea to use the same appraiser when getting the house re-appraised.

- You could also have bought and rehabbed a property (I'll have more on Hard Money Rehab Loans down the road) and want to reimburse your pocket book for the cash you put out to Rehab the property.  The no-seasoning cash-out refinance can be a wonderful exit strategy for such loans.

For the foreseeable future, I am of the educated opinion that niche products such as this will be in and out of play throughout the Industry.  So, it's important to take advantage of them when they present themselves...before any changes are made to the product or it goes away temporarily all over again.

I didn't go to College for Economics.  In retrospect, perhaps I should of.  I didn't go to College for Political Science.  In hindsight, perhaps I should of.  Instead, I graduated with a major in Psychology & minor in Philosophy.  Something in me wanted to spend the rest of my life on top of a mountain handing out Prozac like it was candy at a Parade.

FED RATE CUTS ARE NOT GOING TO SOLVE THE CREDIT CRUNCH!

That's my opinion at least.  I could be wrong, mislead, irrational, off-base, & off of my proverbial rocker.  But I could be right.  Time is the only teller...

A FEW THOUGHTS

 - In its most simplistic terms, when the FED cuts the rate, they are essentially charging Banks & Lending Institutions less of a Rate from which to borrow money.  This has happened on occasions in hopes of nipping all the volatility of what's going on in the bud.  It won't though.  The interest rates Banks & Lending Institutions are charging consumers has remained pretty stable, if not going down from time to time.  Smart Money would be to raise the rates after these FED rate cuts to increase the loss reserves (shielding themselves from the default on loans gone bad).  Think about it like this, the FED cuts the Rate and Bank A decides to increase the rates they charge consumers by 1/4% to 1/2% to maintain a healthy loss reserve.  While that's probably the smart thing to do, it won't work across the board.  Why?  One word, Greed.  Banks B, C, & D will keep their rates the same and Bank A will price themselves right out of the market.  Losses will continue and the reserves will continue to deplete and the crunch will continue to be taking a bite out of our economy.

 - Raise Prime Rate & Bank Rates!  I know, I know, that very sentence is going to make me about as popular as dressing in drag at a Lewis Farrackhan pep rally.  However, I'm not quite sure the Banks can continually operate at such minimal profit margins considering the ongoing losses and rising delinquencies in portfolios of Mortgage Loans.  For the consumer, increased Prime Rates and Bank Rates would make more capital available and products would be more aggressive, simply because the profit margins would get back to where Banks & Lending Institutions were used too back in the early 2000's.  Home affordability would decrease, so instead of being able to afford a $350,000 house, perhaps you only will be able to afford a $275,000 home.

 - You want more consumer spending?  How about having Interest Deduction on interest paid on Credit Cards and Installment Loans (such as car loans) which is how it was before Ronald Reagan took office.  (Of note, I still liked Mr. Reagan).  That would allow consumers increased deductions, increased refunds, give us more money to spend rather than giving us an occasional $600.00 refund that will hopefully cover my Heating Oil Bill, being the unmarried male with no kids that I am.

Bottom line, there are no short-cuts to life.  Sometimes solutions aren't easy and maybe even a tad hard at first.  If I open a wound on my arm, I'll be the first to pour Hydrogen Peroxide on the cut.  It stings at first, most things do before the healing begins......

I was honored when Midori Miller asked me to do the Blogger's Choice Selections, just in time for St. Patrick's Day.  Some of the following contributors you may recognize, read often, or maybe don't recognize or have never read at all.  I'll try to highlight some posts from a variety of writer's and subjects to hopefully give everyone insight into our Industry and some of the people inside of it.  So sit back, pour yourself a tall, cold, green beer and enjoy the following posts....I think you'll find them magically delicious:-)

The first selection I'll point out is by a very underrated, under-read, yet very talented & experienced Mortgage Professional.  In these times where the word 'Regulation' is thrown around the Mortgage Industry like a Leprechaun at 'The World's Strongest Man' Competition, Scott Geary presents another Industry that we often time ignore, yet is responsible for many of our Culture's Financial Woes.  He asks us this, 'Mortgage vs. Credit Card Companies - Quien Es Mas Macho?'

Midori Miller takes an interesting perspective on how the Writer's Strike can affect Real Estate and our economy as a whole.  Her approach is one of compassion, pointing out how our decisions can prove to provide adverse ramifications across the board.  That's the one thing about Greed, it tends to cause a whirlwind of turbulence.  Check out 'Writer's Strike...Why? Real Estate Will Be Affected!' and see what you think.

Sometimes, it's the Title of the Post that grabs you.  In the following contributor's case, it was just the case for me.  Audrey June-Forshey writes a very concise viewpoint on how we tend to buy into everybody's most beloved Real Estate Experts, The Media.  While I'm a peaceful soul most hours of most days, I agree with Audrey when she writes, ' Kill your television.'

There is a reason the following contributor of Active-Rain is looked upon as one of the best of the best by most of us.  I've called her 'The Master' and if AR had a Hall-of-Fame, she'd be the first inductee in my mind.  Whether you're a consumer on the outside looking in, or a Real Estate Professional, the following post is flat-out AWESOME for any prospective buyer, seller, or homeowner.  'REAL ESTATE SECRETS THE AGENT MAY NOT TELL YOU' is yet another contribution by a lady who helps to set the bar around here, Lenn Harley IS The Master! 

One of the most inspiring & truly great examples of what is right about the Real Estate Industry is Celeste "Sally" Cheeseman.  With so many hands already involved in any Real Estate Transaction, Sally points out a big No-No that is to be avoided.   'When Sellers Play Real Estate Agent..... Reputations At Risk' created some nice conversation and input from Active-Rain and something all Agents should probably read and chew on.  Some call her Inspiring, some call her WOOHOO, I call her the Sister I never had:-)

Brian 'He's off the starting' Block wrote a stellar Localism Piece that reminds us once again of the true value and importance of having an Agent representing you and your interests.  Reading 'Gentlemen (and ladies), start your engines: It's time to sell!' will put you on the fast-track to selling your home in a timely manner for the most profit for the punch!

I'm a picky guy when it comes to those I read and subjects that interest me.  I can honestly say that if I were to pick a handful of writers that I would call a must-read, Lola Audu would definitely make that list.  'How "Cream Puff" Marketing is Slowly Deflating the Real Estate Industry? ' is a wonderful piece that we should all take heed too.  It will not only help take back the Real Estate Industry by the competent & ethical, it will also help instill the confidence & trust that the consumer may have lost because of the few that gave a lot of us a bad name to begin with.

The following post I loved, heck I knew I would just from the title of it.  Allison Stewart presents an article I couldn't agree with more in, 'SINCE WHEN IS BEING COLORFUL A BAD THING?'  In life & in any line of work, we should probably all look inwardly and honestly to make sure we are practicing what this post preaches.  The message is enlightening and oh so very true!

This post was written awhile back, but I do think it worth re-visiting.  It struck a cord with me, because the post he was referring too was actually 'calling out' a former co-worker of mine.  Eric Kodner is right on point and creates some discussion with this post from back in December 'What Is "Hate Speech"?.  The bottom line in my book, we all share one undeniable likeness, we are human and we're in this gig together.

I hope you enjoyed these posts and discussions as much as your 'Not so Irish' author.  None the less, a few more hours to go before I will be sipping on a Green Beer or two or three myself.  As always, moderation is key...don't drink & drive....or blog for that matter.  Well, maybe you can get away with the drinking and blogging thing:-)  Thank you Lola for this group and to Midori Miller for being asked to bring home this rather difficult task.  Happy St. Patrick's Day everyone!!!

One of the very first loans I ever closed was on a Manufactured Home.  I'll never forget that customer.  He was a former applicant from somebody who had left our firm and I was calling to follow-up with him.  Thus began a 30 minute tirade on his part that left my ears ringing louder than the phones around me.  He used more explicatives than a George Carlin rant.  What was his major gripe?  It was simple.  NOBODY would help him refinance his property.  His rate was in the double digits, yet his credit, equity position, job & housing history....along with his assets were impeccable.  I could see his point.  After 30 minutes, he calmed and asked if I could help.  I said, "I'll sure try."  I washed my ears out with soap and went to work.  That was some 7 years ago and it was a wrestling match at the time, yet we got it done.  Thus, the journey began...

I began doing some research into Manufactured Housing.  Seemed that years back, lenders had a horrible time with defaulting loans on that type of property.  States like Florida & Texas had a bunch of issues and between the defaults and the depreciation that the Property Type sometimes entails, lenders ran fast and far away from wanting to finance Manufactured Homes of any kind.

Manufactured Housing offers an affordable way for people to buy a home.  And after seeing some of these homes, they are absolutely spacious & extremely nice.  The price range I'm accustom to seeing and financing rests between $50,000 & $250.000.  The last one I closed was late last month the borrower got a fixed rate of 6.875%....not too shabby for a property type that is deemed so very hard to finance.

Yet, there was and is a need.  So, Manufactured Housing is alive and well and living at First Choice Equity Group Inc!  It is just one of the many things we can do.  Below are some of the guidelines and parameters...

Single Wides, Double Wides,

Triple Wides

*Purchases 100% LTV

*Cash Out Refinances To 90% LTV (640 Score)

*Minimum Credit Score 620

*Second Homes

*Rural Properties

*Mobile Homes In Parks

* Pre 1976 Models Allowed

So, don't be shy.  If you own or are looking to buy a home and see a Manufactured Home that tickles your fancy, feel free to get a hold of me.

It's your livelihood.  It's how you get about in this capitalistic culture we call America.  It's your freaking job.  Sometimes it's just you, sometimes it's your family.  Sometimes, it's both.  Regardless, I wonder if we all 'Sin' before we 'Saint'.  If Money is indeed the root, I never wanted to grow into that tree.

I've got to say, Active-Rain is a remarkable place.  Its very design is to motivate us who are involved in the Real Estate Industry, while educating the consumer at the same time.  Heck, I like it.  Before you think this is more of a tangent than a followable story, I suggest you read further.  It will take me about 10 minutes and 689 Brain Cells to type my thoughts at this particular moment....on this particular occupation.

Somebody wrote an anonymous comment on a Blog I posted on another site.  They said, "you sold the mortgages we are all chocking on ;-("  That Post was originally written here on Active-Rain by yours truly. I'll ignore the fact that they didn't quite get the spelling right on 'choking':-)  Yet, I heard their message loud and clear.  Since I can't retort there, I will here. 

I don't get paid by the hour.  There is no set salary for what I do.  I get paid according to production.  Man hours mean nothing, monetarily speaking, if your loan doesn't close.  Sounds fair to me.  There is a beauty to that concept...and also a disease.  It's only common sense that when you are offered a dime and need a dollar, you'll take the plunge.  Or is it? 

If money were something we could all not worry about, I'm sure that would provide us more time to worry about things that actually mattered.  However, I like to deal with reality at times.  Reality says, "Money makes the world go round."  Fair enough, I'd love to provide the solution to every economic woe any of us have had....but I can't.  At least, not now.  What I can do is offer the best version of the truth that I can.

Words probably can't do justice to make things right.  The majority of the folks I've worked with have nothing but kind words.  That said, I make mistakes...and I hate that human inevitability.  On numerous occasions throughout my career in Real Estate, I was offered and encountered by the 'Easy Buck.'  You know, quick money...fast and hurting nobody.  The wise soul in me knows that fast tends to equal fleeting and typically hurts everybody.  I didn't take that plunge. I have lived in an attic, I had no cable, I didn't eat for days at a time....I always thought that what I was doing mattered in the long haul.  It was and is a career and not a short-cut to thinking.  The ups and downs of the Market we call Real Estate is akin to the very breath we associate with life.

So, Mr. Anonymous Commenter....we can pass the blame card around all day long.  Something tells me that I wasn't responsible for the stranglehold you are feeling, yet the broad paint brush that is responsible for your musings is one that was painted upon me.   Don't think for one moment that the devil is resting on my shoulder, there's not even a chip there as of now.  I'd rather do right and live in poverty than sell the 'sizzle' and live in temporary luxury.  The Devil isn't a big fan of that.

If you are reading, clicking here may actually make it easier to do so.... 

While I awoke startled, dazzled by dreams I had only thoughts of dreaming before....something came to my mind.  The cold sweat of consciousness had beaded my garments like the wet rain of a softly woven spring eve.  Ok, am I being a tad bit dramatic with my wording?  You bet I am!  I think I have a point amongst words that may go above & beyond the 5th grade reading level we are accustom to responding too and reading.  When dealing with and reading about Real Estate, Mortgages are about as fun to read about as watching Andy Rooney waxing intellectual about the relevance of our currency in comparison to monkeys throwing 'poo' at each-other.  If you don't believe me, look up some of the more informative Mortgage Posts and see the lack of tangible feedback.  Don't get me wrong, I completely understand.  If I wasn't in the field, I would be completely bored and overcome by thoughts that I may just want to be a 'renter' for the rest of my natural born life.  I am in the 'field' though, and that's not the best of ideas...

Owning a home is both a privilege and a challenge.  It's also good for our economy and personal financial situation, at least in my opinion.  I am aware of both, being a owner of a home & land myself.  I guess my challenge to myself and others involved in the 'Mortgage Side of Things' is how to make it more readable for the general public and fellow members.  While I envy the thought of someone drooling over my blog, I'd rather that be because they just didn't fall asleep reading it.  Knowledge is indeed power and we are equipping the members and public with that daily, yet I sense they get very bored reading what may help them now and down the road...

My thought is raising the bar of creativity that is intertwined with the knowledge and information that we convey to the consumer and fellow members.  I've been doing this gig for over 7 years now and I realize daily that not all of the explanations I dispense make sense to those around me.  Explaining money & mortgages isn't an easy task, especially in speaking to those working class heroes that represent the majority and beauty of our culture.  I could surely utilize my marketing efforts and go after the higher echelon of Corporate America alone, yet my fight is for those who don't have enough to call 'money' a luxury.  Perhaps I fancy myself the Robin Hood of lending...perhaps they have a need for someone speaking from their side of things.  Or maybe, just maybe, we all want to read something we can identify with and understand.  This thread is now open, anonymous or not so much, feel free to give your thoughts...