Living In Tucson Blog

It’s been several weeks since my last posting. I’m not sure if I have many followers to this blog, if so, I apologize for the lack of new posts. I’ve been fairly busy lately with potential buyers this past spring trying to take advantage of the home buyer’s tax credit that expired on April 30th. I have also been busy taking my twenty hours of S.A.F.E. classes for licensing and four hours of Arizona mortgage law classes. I take the tests next week! Wish me luck. Nationally, Loan originators have to be licensed by July 1st, 2010. I personally think this is a good thing and I expect that many originators will leave the business.

In addition to licensing, there are lots of other things happening in our industry, so let me attempt to boil some of it down.  New Fannie Mae/Freddie Mac regulations will start in June. We will be required to pull a new credit report right before closing to see if the borrowers have increased their debt load which would impact the debt-to-income  ratio. The new quality control measure is also designed to prevent “shotgunning” which is a type of mortgage fraud involving simultaneously applying for multiple mortgages on the same property and then fleeing with the proceeds. Another new guideline is a change in qualifying for an ARM. Borrowers are required to qualify for the higher payment of the note rate plus 2% or the fully indexed rate. A fully indexed rate for an ARM is the highest amount the rate could ever be when adding the index (the adjustable component to calculate the rate) and the margin (which remains the same throughout the life of the loan). For example, a five year ARM can adjust to 5% over the start rate (note rate) which is to say that a ARM that starts at 3.75% can adjust up to 8.75%. The maximum rate is the rate that an underwriter must use to approve a borrower.

Why are these guidelines getting tighter? That is because Fannie Mae and Freddie Mac are requiring lenders to buy back record numbers of loans. Once a lender sells loans to investors such as Fannie and Freddie, they don’t ever want to have to buy them back.

We did hear some good news last week about loosening loan guidelines. We are now offering 95% conventional financing for buyers of one or two unit primary residences in Arizona, a declining market!

As always, if you have any mortgage questions or needs, I am available to take your call! Contact David Wolsky at 520-275-2536 or email me at david@davidwolsky.com.

The $8000 tax credit expires on November 30th. I would urge anyone interested in obtaining the credit to close their deal by November 15th to avoid running into the Thanksgiving holiday when title companies and the county recorder’s offices are closed typically for the weekend. I would also urge any first time buyers to stay away from short sales, because they will be difficult to close before the deadline. The current program has helped over 1.4 million people already! The credit is available to first time home-buyers or anyone who has not owned a home for at least three years. Click on www.irs.gov to answer any questions you may have regarding eligibility and to download the correct form to receive your refund. There is growing support to continue the program for at least six months, but there has been no new legislation as of this writing. There has also been some talk of expanding the tax credit to $15,000 and opening it up to all home buyers.

If you or someone you know would like to explore the possibilities, call me, David Wolsky at 520-275-2536. I can pre-approve you on the same day! You can choose between FHA,VA and conventional financing. There is also a program in Arizona to help buyers by foreclosed properties. It’s called, Your Way Home Arizona. My company, PHH Home Loans and Coldwell Banker Home Loans also offers financing for USDA Rural Housing which is a zero down program designed to help buyers in more rural settings.