Hi friends! I frequently get phone calls that ask “Am I still in the mortgage business?” You bet I am! I have been originating mortgages since 1994. My kids were only 4 and 7 when I started. It’s been nearly three years since my son Adam graduated from Tulane and my daughter Becka is 22 years old and has recently moved to Pittsburgh. By the way, Faye is doing great too! Although our industry has gone through many ups and downs over the past 18 years, I am still helping folks buy or refinance their homes. Rates are at historic lows and the buying power in Arizona has never been better!

I accepted a position as a loan officer at GMAC Mortgage this week and I am excited to represent them in Tucson and Arizona (I am licensed throughout the state – NMLS #182108). My official start date was April 15th.  In the meantime, call me to say hello at (520) 977-3300 or email me at david@davidwolsky.com.

• Freddie Mac reports that a 30 Year fixed rate mortgage at record low of 3.91% with 0.7 points.
• Forclosures jumped 21% in the 3rd quarter but 11.8% lass than a year ago.
• Unemployment rates fell in 43 states in November. The most states to report delcines in 8 years.
• Housing starts rise 9.3% in November. Building Permits up 5.7%.
• Existing Home Sales for November jumped 4% over last year.
• Existing Home Sales for 2007 through 2010 were revised lower by 14%.

My dad always advised me to buy low and sell high! You would be hard pressed to find a better market for mortgage rates and real estate pricing. Have you heard that the affordability index has measured that home buying is at it’s most affordable level in since the 60′s?  Tucson is a great market for buying real estate and it’s no secret that housing values have plummeted in Arizona. There are lots of foreclosures and short sales offering  very low home prices. Check out www.homepath.com for Fannie Mae owned properties. My company, PHH Mortgage offers special financing terms for a Home Path Mortgage (we are not currently offering the Home Path Renovation Mortgage at this time). Home Path Mortgages can be obtained with a 3% down payment (or more), there is no mortgage insurance and they do not require an appraisal. Fannie Mae often pays for the buyers closing costs too.

If you already own your house, have you thought about a refi? Here’s an article from yesterday’s USA today: Mortgage Rates Reach Record Lows, Sparking Refinancings.

The article indicates 63% of residential mortgages have rates above 5% and 46% of homeowners have 20% or less equity in their home. It is harder to refinance your home without sufficient equity. It can be hard to refinance your home with equity too as underwriting guidelines continue to get tighter. However if you qualify, now is the time. 5/1 ARMs are currently below 3% APR. According to this week’s Freddie Mac survey, 15 year fixed rates are at 3.5% and 30 year fixed rates are at 4.32% which is very near the record low. Freddie Mac has been tracking rates for over 40 years.

What if you don’t have equity and you still want to refinance?  You might qualify for the HASP (Home Affordability and Stability Plan) program that can enable you to refinance your loan even if the current mortgage is up to 125% of the home’s value. You had to have purchased your home before June of 2009 and the existing mortgage is with Fannie Mae (www.fanniemae.com) or Freddie Mac (www.freddiemac.com). Go to the Look Up tool to see if Fannie Mae or Freddie Mac owns your mortgage. They do not service the loans, but they are the investors.

Call me to review your options. David wolsky at 520-275-2536 or david@davidwolsky.com.

It’s been a while since my last post. I think I have some readers out there! (Hope so.) The past few months have been very intense with personal stuff and the Tucson real estate market has been keeping me very busy as well.

As an originator, I am involved from the start to the finish of every transaction. Although I am part of a team that consists of loan processors, underwriters, management and more, I am the one on the front lines. It is a lot of responsibility in this market when it comes to conventional and government loan processing. Verification is the key to getting a mortgage approved in 2011 including a thorough verification of the borrower’s income, assets and credit. For example, if you are self employed, two years of tax returns and a profit and loss statement will be necessary. If you receive a bonus, a written verification of employment sent to your employer will help us determine a track record of the bonus income and the likelihood of continuation. Part time income is only accepted if you have a two year track record of receiving it. Hourly wages will be reviewed to see if there are unpaid furloughs or excessive time away from work.

Underwriters are reviewing every deposit on your bank statements. Be prepared to provide a ”paper trail” to explain yourselves. If you sold some gold or a car for your down payment, you will have to prove you owned the asset, the current market value and the proof of sale. There is no doubt about it…credit is tight! Another area of scrutiny is the debt ratio. First the income analysis is determined. Then we look at your credit report and other monthly obligations such as house payments on retained properties and alimony or child support payments. The formula is keeping the new house payments and other monthly debt obligations to 45% or below your gross income (before taxes). In some cases, a 50% debt ratio is acceptable, but there are requirements for credit scores and additional assets besides the down payment. If you have mortgage insurance on a conventional loan because your are borrowing more than 80% of the sales price, the maximum debt ratio is 41%. FHA and VA mortgages go up to 45% in most cases. When considering a home purchase, remember to look at the real estate taxes, insurance and homeowners association fees to get a true picture of your new total house payment. I have seen loans get adjusted or even declined at the last minute because inaccurate taxes, insurance and HOA fees were higher than originally anticipated on the initial application.

It is not enough to have great credit and a down payment to get your loan approved. At times, it has been easier for me to get a young couple approved with a FHA loan and a 3.5% down payment than a couple of executives borrowing $400,000 with a 60% down payment! Underwriters were afraid to say no to loans in 2005 and 2006 and they are afraid to say yes in 2011! I am here for my customers to make sure that the underwriters say yes to your deals! Call me, David Wolsky, for a free loan pre-approval at 520-275-2536. You can write me at david@davidwolsky.com. Thanks for stopping by my blog.

Get Your Government Hands Off My Mortgage Industry!

Bank regulators and Congress are looking to make more changes to guidelines for conventional and FHA mortgages. Congress would like to privatize Fannie Mae and Freddie Mac. The timing of these changes is challenging, considering the struggling housing market and anemic economic recovery. Among the proposed changes being proposed are increasing the minimum down payment for conventional loans to 20%, setting higher income and credit qualifications and reducing the maximum loan limits. FHA proposals include increasing the minimum down payment to 5%. These changes will certainly eliminate potential buyers, causing the housing market to take a longer time to recover.

Short Sales Aren’t Alway Short!

In my mortgage practice, a large percentage of my deals are “short sales” or bank owned properties. Recently, I had a customer that offered to buy a home with a short sale. The listing agent set the sales price, the buyers agreed and  after several weeks, the bank declined the offer. The house will be foreclosed instead. It is likely that another buyer could buy this house on the steps of the courthouse for a lower price than the short sale offer than my customer had offered on the home. I guess the bank decided they could make more money foreclosing the property than accepting the short sale offer. Why else would they turn down a qualified buyer. In fact, he decided to pay cash for the house and the bank still turned him down. Another factor that makes short sales so tough to execute is junior liens. In other words, the current owner of the house has a first and second mortgage and both lien holders have to agree on the sale. This dynamic usually means the junior lien holder (second mortgage or HELOC), is taking a beating on the balances owed on their loans.

I had another interesting deal that closed a few weeks ago. The buyer was buying a short sale and it took months for the first and second lien holder to agree on the terms of the sale. Once it was finally approved, we put the loan in process. The listing agent requested that we close the loan within three weeks of the short sale approval. During those three weeks, we find out that Fannie Mae was going to auction off the house in a foreclosure acout a week before we were scheduled to close. We were able to stave of the foreclosure with a lot of persuasion from the REALTORs involved with the sale and the buyer was able to get the house. The first mortgage lender probably should not have approved the short sale if they knew the investor (Fannie Mae) had begun foreclosure proceeding.

Foreclosures are much easier to buy. The lenders are offering terms to sell the homes. For example, Fannie Mae (FNMA) has a program known as HomePath. They typically will offer 3.5% of the sales price as a concession to the buyer for a primary residence or a second home. The offer 2% for investors. The program does not require an appraisal and there is no mnortgage insurance required if you have a down payment below 20%. A million foreclosures are anticipated again this year. Half of the homes in Arizona have negative equity and home values continue to go south. Hang in there as time heals all wounds. The first quarter of 2011 has been robust for home sales in Tucson.

Tucson Is #4!

According to Inman News, Tucson is considered a top five best markets for investors thanks to the declining housing prices. Of the top ten, only two cities were out west (Tucson and Salt Lake City). The report looks at economic data, housing and demographics including the median price of homes, loan data and foreclosure sales.

If you have any questions about real estate in Arizona, contact David Wolsky at 520-275-2536 or david@davidwolsky.com.

Total applications for FHA insured mortgages are down 30% through March in 2011. Most FHA buyers choose the minimum down payment of 3.5% of the sales price for a purchase transaction. Effective Monday, April 18th, changes to FHA loans were implemented. One big change is a higher monthly mortgage insurance premium. Borrowers will now be paying 25 basis points more each month. This is the second increase in the past six month. The new premium is 1.15% up from .90%. For example, the new premium for a $150,000 mortgage is $1725 annually charged in monthly premiums of $143.75. The previous premium was $1350 or $112.50 per month which is an increase of $31.25 per month! There were no changes to the  1% premium up front premium that is financed in the mortgage. The government insures FHA mortgages with these premiums. The higher premiums are squeezing some buyers out of the housing market. Borrowers with a 720 credit score (In Arizona) can still obtain a conventional mortgage with a 5% down payment and private mortgage insurance.

PHH Home Loans and Coldwell Banker Home Loans has announced new minimum credit scores guidelines for FHA loans. Applications are now being accepted with credit scores as low as 500 with a 10% down payment, assets of at least two monthly house payments verified in addition to the 10% down payment and debt ratios of 31% of the gross income for the house payment and 36% for all debt including the new house payment. The minimum credit score for a 3.5% down payment, is now 600 (down from 620). These terms can vary lender to lender. Other mortgage banks use 580, 620 or 640 for their minimum scores.

What’s next? Congress has passed a bill to eliminate FHA! I doubt that it will ever become law. It is more likely that Fannie Mae and Freddie Mac will be spun off from the government. Personally, I think these proposed changes will devastate a very shaky housing market. FHA loans already account for a major percentage of all home loans. Spinning of Fannie and Freddie would result in much tighter underwriting guidelines including 20 to 25% minimum down payments. You can expect FHA to raise the minimum down payment to 5%.

I’m David Wolsky and I can answer any questions you may have regarding various loan programs available at PHH Home Loans and Coldwell Banker Home Loans. The email address is david@davidwolsky.com or call (520) 275-2536.

With declining home values, rising interest rates and FHA, Fannie Mae and Freddie Mac changes around the corner, now is the time to take advantage of the Tucson housing market and buy that house! Even waiting 60 days could cost you thousands.

The Obama administration released their “white paper” this past week on the housing market. The impact of their proposals could launch major changes in the mortgage industry. FHA has already announced .25% higher mortgage insurance fees effective on April 18, 2010. You can expect monthly payments to rise $30 per month for a $150,000 mortgage. It is my understanding that the government would like to reduce FHA’s exposure from its 30% market share of mortgages down to 10%. It is unclear where homebuyers can turn to for loan programs that will be similar to today’s FHA mortgages. Tomorrow’s FHA home loans will consider raising the minimum down payment which are currently 3.5%. As you can imagine, most people are already strapped for down payment money. The report also suggested that higher down payments should also be considered for conventional loans. A 10% down payment was recommended. The current terms allow a 3% to 5% down payment depending on the borrower’s qualifications. Other changes include reducing the maximum loan amounts under FHA and conventional mortgages in the so-called “high cost areas”. Those changes do not appear to impact loan limits in Tucson or Phoenix. Fannie and Freddie have raised their fees charged to lenders to guarantee pools if their mortgages for resale to bond investors. Lenders will pass along those charges to consumers. The hits just keep on coming! Fannie and Freddie recently began charging additional fees for borrowers with a credit score below 740 and down payments less than 25%. Those charges will translate to slightly higher rates or points for consumers.

If you are on the fence to buy that house, don’t wait! Call me, David Wolsky for mortgage advice. I can be reached at (520) 275-2536 or at david@davidwolsky.com. My company, PHH Home Loans is offering a $350 lender credit towards are closing costs which are already amongst the lowest in the business.

Rates are trending higher. Don’t miss the train. If you have not refinanced yet, this may be a great opportunity to do so. We are offering a $350 discount for closing costs in February whether you are purchasing or refinancing!

Call me at 520-275-2536 or email David Wolsky @david@davidwolsky.com for details on how PHH Home Loans can save you money every month on your next mortgage! Licensed in Arizona. NMLS#182108.

Happy New Year! Looking back at last year and a look forward to 2011.

For years, there was a fees on our settlement sheets with a small charge of $4.95 to MERS. Here’s a fascinating article by Yasha Levine on how this little known entity named MERS that is causing havoc in the mortgage industry.

Dude, Where’s My Mortgage? How an Obscure Outfit Called MERS Is Subverting Our Entire System of Property