Greg Cowart on Zillow
Greg Cowart - Mortgage Broker or Lender at The Securus Group
Greg Cowart - Roseville Loan Guy

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I am pleased to announce a new Down Payment Assistance Grant Program being offered by Comstock Mortgage

I am very pleased to announce a new Down Payment Assistance Grant Program being offered by Comstock Mortgage.  It is our Return to Homeownership Program and, as opposed to many community-lending products from agencies like SHRA and CalHFA this grant is not only for first time homebuyers and is actually a grant, not a 2nd mortgage or anything of the sort. It’s really free money!

This loan is originated, underwritten, and funded within Comstock Mortgage, with underwriting/docs/funding all in our Sacramento home office. There are no outside agencies providing overlays, restrictions, or time delays to the purchase process. It really is THAT simple… 

Of course there are some rules and not every buyer or property will qualify. Some of the pertinent features of the loan are:

** Loan
– FHA 30–year fixed rate loan only (no 203K)
– Interest rate is determined daily, currently 5.5%

** Grant
– 3% of total loan amount
– Proceeds can be used for:

  • down payment
  • closing costs
  • prepaid items
  • earnest money

– Not a 2ndlien: Grant does not need to be calculated into the loan calculation in any way

– No monthly payment: Since it’s not a loan there is no monthly payments and the grant does not have to be paid back

 **Borrower Eligibility
– Income limits ( Sacramento, El Dorado, Placer counties $87,720.00)
– Buyer does not have to be a 1st time homebuyer

 **Properties Allowed

– Owner occupied primary residence in California
– Single Family Residences, FHA approved Condos, Planned Unit Developments (PUD’s)

**Properties Not Allowed
– 2-4 Units
– Rental Homes
– Co-ops
– Investment Properties
– Recreational, vacation, or second homes
– Manufactured Housing

 **Underwriting

– Underwritten by Comstock Mortgage Underwriting Staff
– Run through FNMA Desktop Originator Automated Underwriting
– Minimum FICO score of 640
– Seller paid closing costs up to 6% to cover normal and customary fees

 Please call me with any questions…

 -Greg

Comstock Mortgage is now fully VA approved!

Hello everyone,

For years we’ve been serving the greater Sacramento area real estate world in the best way any company can, with all of the products and tools anyone would possibly need to obtain the best possible financing for their homes. But we still have to act as broker for a few loan products that we were not able to do in-house. This is not a problem, it’s the same issue every mortgage broker has to face on every one of their loans, but we as a locally-owned mortgage banker, do not have to deal with on the vast majority of ours. One exception was VA financing. A great product that we do a lot of for our clients, but one we had to broker to another bank to close. Taking the control of turntimes, underwriting, and closing out of our hands.

In 2010 Comstock Mortgage submitted our application for authority to close VA Loan “in-house”.  After a long awaited decision, we have finally received the news that our VA application has been APPROVED.  What a great way to start 2011!!!!

Now we can turn our in-house underwriting, docs, and closing, 24 hour turntimes, as well as all the other benefits of closing loans in house that we already provide to the real estate world for Conventional, FHA, USDA/Rural, and other in-house products to VA buyers as well. All the details are just now being rolled out and we should have the Comstock Mortgage VA financing available very soon!

I’ll be keeping an eye out to see (make sure) this product can be combined with our ‘Return To Homeownership’ Down Payment Assistance Grant program, as I expect it will…

-Greg

Homepath Incentives, AGAIN!

Fannie Mae is offering buyers up to 3.5% in closing cost assistance on HomePath® properties. HomePath homes are REO’s that have already been taken back by Fannie Mae and put on the market at a certain price as HomePath eligible. I did a complete breakdown of the HomePath on a previous post but here is a quick reference…

A HomePath home may offer the best financing possible today. The loan only requires a 3.0% down payment, instead of a 3.5% down payment as required by FHA. There is also no PMI or mortgage insurance required, a huge savings to the new homeowner. Better yet there is no appraisal so the buyer saves even more in closing costs and the escrow can close faster. Given this 3.5% closing cost assistance buyers can get their new home with only 3.0% down, no appraisal fee, and have the seller – Fannie Mae – pay 100% of the closing costs (if you’re paying more than 3.5% in closing costs it might be a good idea to call another lender)! Even if there was PMI required it would still be a great deal.

 To be eligible for this incentive:

  • Initial offers must be accepted on or after September 23, 2010;
  • Property sales must close on or before December 31, 2010, and close within 60 days of offer acceptance; &
  • Buyers must be owner-occupants and confirm that the property will be used as their primary residence by completing a certification form (investors are excluded)

Fannie Mae says that this incentive reinforces their commitment to stabilizing communities and assisting buyers. For more information about the incentive read the press release, or give me call/e-mail…

~Greg

Short Sale Fraud is a big problem, getting bigger…

According to the commissioner of the State Of California Department Of Real Estate (DRE), Short Sale fraud is on the rise. In a recently issued letter the DRE reached out to local mortgage lenders to advise them of the problem, as well as for help. Even though there are many ways short sale’s can be used for fraud they specifically outlined the most common ploys. Namely “short sale flipping” where real estate agents and other, non-licensed individuals, defraud lenders as to the value of a listed short sale property, withholding higher offers that came in from prospective buyers and then selling the property to a straw buyer working with the Realtor, only to sell the property at a profit the day after buying the property. Not only are these agents making a killing doing this (they make a profit on the sale as well as a LARGE commission on BOTH transactions) it is hurting well intentioned buyer in the process.

There are a number of other methods being used for this fraud but that is the most prominent. This is not only bad for the lenders – something the public is probably apathetic to – but to you and me every day. As it usually does, greed always has a victim, even if it’s not easily noticed. If you’ve been out there trying to get into your first home for months with no luck, only to see a home you made an offer on for sale again a month or two later, there’s a good chance you are victim to this fraud, albeit indirectly. I’m sure you can see the problem this can cause.

What can we do about this? The DRE asks that we (Realtors, mortgage professionals, and you) report possible fraud directly to them. Especially unlicensed induviduals perpetrating this fraud, something that is extreemely damaging to the consumer and the industry alike. Is it worth the time? I say yes. In a time that ethics is SOOOO imporant in real estate and lending we need to do all we can to stop fraud. It’s important to all of us, even if we don’t think about it every day.

~ Greg

More news on the California FTHB tax credit…

There is more important news for first time homebuyers in California expecting to get the 2010 tax credit after buying their homes. In the link below the Franchise Tax Board spells out the updated process, how much is left, and what to do to ensure (or give yourself the best chance anyways) you get the credit…

http://www.ftb.ca.gov/individuals/new_home_credit.shtml

The site claims they will be updating the website daily until the deadline to request the credit; AUG 15th, 2010. If you haven’t filed your request yet, get on it!

HUD making major changes… Are they good or bad for future homeowners?

I received a letter from the federal department of Housing and Urban Development (HUD) informing me that there are going to be sweeping changes to the FHA mortgage insurance program starting next month. This is something that has been talked about for some time but nothing had been finalized. The major change is in FHA’s Up Front and annual mortgage insurance premiums, the Up Front premium is being reduced my more than 50% (from 2.25% to 1%!) and the annual premium is being increased from 5.0% or 5.5% (depending on loan-to-value ratio) to .85% or .9%. But what is FHA mortgage insurance and what does this mean?

I was once told that FHA IS MORTGAGE INSURANCE. FHA is the government’s program that allows more Americans to own homes. They have both purchase and refinance programs designed to allow those with less of a down payment (equity for refiance customers) and/or lower credit scores than the conventional mortgage market will allow. To keep the program safe and tax payers off the hook for FHA losses, HUD employs a mortgage insurance premium to keep the program viable. EVERY FHA LOAN HAS MORTGAGE INSURANCE (MI). This MI premium keeps the program solvent, allowing for the program to continue and more people to become homeowners.

Recently, with the decline of conventional financial availability, FHA’s market-share has grown. So much so that they needed to make a change to keep the program running well. These changes will make a negligible difference to homeowners payments but will keep the program up and running for the long term. Up until these changes took place the UFMIP premium for an FHA loan was 2.25% of the loan amount. Although this amount is not required to be paid by the homeowner at closing it is financed into the loan, making the loan amount thousands of dollars higher than it otherwise would be and increasing the monthly payment accordingly. The annual MIP was .55% (or .50% with at least 5% down payment) but that is not being raised to .90% (or .85% with at least 5% down payment). This, of course, is going to increase monthly payments.

What does this mean? Well, not much in the beginning. Those obtaining FHA financing will have smaller loans, a good thing, but their monthly payment will be increasing but about the cost of a trip for two to the movies (without popcorn, candy, and drinks!). Not a bad price to pay to keep these programs viable and starting out with a smaller loan. But that still seems like a negative on the surface. Higher monthly payments, no matter how small the increase may be, is a negative.

However that is not looking at things in the long term. One thing to remember is, FHA’s mortgage insurance is only required to be in place for 5 years, or when the mortgage balance reaches 78% of the original purchase price, whichever comes last. Anyone that keeps their home long enough to realize the deletion of the annual MIP will see huge savings over today’s situation. To keep it simple, their monthly mortgage payment without the MIP will be less from day one because they are only financing the Up Front MIP of 1% of the loan amount, not a whopping 2.25% as they are today, so their loan amount is smaller. That principal and interest payment is the same for the life of the loan and when that MIP premium they are paying for the first 5 years falls off, their payment will be reduced drastically.

In the short term this change will not mean much to people; loan amounts will be a little smaller, the overall payment will be a tad higher, and this valuable program will stay in effect for more Americans to utilize to become homeowners or refinance to today’s incredibly low rates. Those that keep their homes/loans for 5, 10, 15, 20+ years will realize huge savings in the later years. Seems like a win-win to me.

Your Local Expert,
Greg Cowart

Extension of tax credit and flood insurance program finally signed…

The mortgage industry can feel a little more patriotic this 4th of July holiday now that President Obama has signed two bills to re-start the flood insurance program and extend the closing deadline for homebuyers seeking a tax credit.

The National Flood Insurance Program has been shut down for the past month (as it had expired earlier in the year and congress had not managed to get an extension through yet), which has tied up mortgage closings in many flood-prone areas. The bill – H.R. 5569 – President Barrack Obama signed authorizes FEMA to approve new flood insurance policies through September 30. It also allows FEMA to approve flood insurance applications and renewals that have been pending since the June 1 shutdown.

The second bill – H.R. 5623 – extends the closing deadline for the homebuyer’s tax credit program by three months to September 30. Originally, homebuyers who signed a sales contract by April 30 had until June 30 to close and qualify for the tax credit. But a tax credit-driven jump in home sales caused closing delays. The National Association of Realtors warned that up to 180,000 buyers could miss the deadline and lose their tax credit — $8,500 for first time homebuyers and $6,500 for repeat buyers. Real Estate agents noted that changes in mortgage settlement rules and lapses in the flood insurance program and Rural Housing Service single-family loan program contributed to closing delays.

FAQ : Applying for the CA Tax Credit after Escrow Closing

 

1. I applied for the 2009 New Home Credit, but didn’t get it since the money ran out. Can I apply now since there is more money available?

 No. The 2010 New Home / First-Time Buyer Credits are only available for purchases which close escrow on or after May 1, 2010 

  

2. I just closed escrow on a new home on April 26, 2010. Can I apply for the New Home Credit? 

No. The 2010 New Home / First-Time Buyer Credits are only available for purchases which close escrow on or after May 1, 2010. 

  

3. What is the difference between requesting a reservation and applying for a credit? 

Reservations can only be requested for the New Home Credit and are optional. Since the credits are allocated on a first-come, first-served basis, a reservation will hold the buyer’s place in line until two weeks after escrow closes, the due date of the application. Applications are used for both the New Home Credit and the First-Time Buyer Credit and are required for either credit. 

  

4. Why can’t I request a reservation for the First-Time Buyer Credit? 

The reservation process is intended to allow buyers, who are purchasing a new home that may not be completed until after the $100 million cap is reached, to still have an opportunity to apply for the credit. This prevents some new home buyers from being disqualified just because the home they are purchasing is in an earlier stage of construction. 

  

5. How do I reserve a New Home Credit? 

Buyers who will qualify for the New Home Credit and enter into an enforceable contract on or after May 1, 2010 to purchase a new home may apply for a reservation using FTB 3549-RR, Reservation Request for New Home Credit. Both the buyer and seller must certify on the form that they have entered into an enforceable contract. Specific pages of the purchase agreement must be faxed to FTB along with the reservation request so FTB can verify the information. FTB will send the buyer a letter stating whether the reservation request is approved, revised, or denied. 

  

6. Does FTB’s approval of my reservation request guarantee my credit? 

No. FTB 3549-A, Application for New Home / First-Time Buyer Credit must still be completed and faxed, along with the buyer’s final settlement statement, to FTB within 2 weeks after escrow closes. If FTB does not receive the completed application and the settlement statement within 2 weeks after the close of escrow, the reservation will be cancelled and you will not be eligible for the credit. 

  

7. Can I just send my application for the New Home Credit with my reservation request? 

No. Any application (FTB 3549-A) received before escrow closes will automatically be denied. Applications are only valid after the home is actually purchased. The date of purchase is the date escrow closes. 

  

8. I entered into a contract to purchase a new home before May 1, 2010 but the house will not be completed for several months. Can I request a reservation? 

No. Reservations for the New Home Credit can only be completed if the contract is entered into on or after May 1, 2010. However, if the contract is cancelled and a new contract is entered into on or after May 1, 2010, you may request a reservation. 

  

9. How long will it take FTB to respond to my application or reservation request? 

It will probably take FTB 3-6 months to respond to your application or reservation request. We must build a new computer system before we can begin verifying the applications and reservation requests. Please wait at least 4 months before contacting FTB regarding your application or reservation request. Because of this delay, it will be important to keep a copy of the fax confirmation. 

  

10. I requested a reservation, but I have not received a letter from FTB telling me whether my reservation request was approved. Now escrow is closing. What should I do? 

Do not wait for FTB’s response. Complete an application (FTB 3549-A), and make sure it is faxed to FTB within 2 weeks after escrow closes. If FTB does not receive your application on time, your credit will be denied. 

  

11. I requested a reservation, but now I will not be purchasing the home. How do I notify FTB? 

Write “Cancel” across the face of Side I and Side II of the original reservation request (FTB 3549-RR) that was faxed to FTB and fax it to FTB at the number shown on the bottom of the form. Use this method regardless of whether or not FTB has responded to your original reservation request. 

  

12. I’m a First-Time Buyer, purchasing an existing home that has been lived in before so I can’t request a reservation. However, I think the $100 million will run out before escrow closes. Can my escrow person send my application early? 

No. If FTB receives your application (FTB 3549-A) before escrow closes, your application will be denied. 

  

13. I am purchasing a duplex and intend to live in one of the units. Do duplexes qualify as a “single family residence?” 

The unit that you will live in qualifies as a “single family residence.” However, the credit amount is determined by the portion of the purchase price allocated to the unit that you will live in. Multiply the purchase price by the square footage of the unit you will live in divided by the total square footage of the duplex. Use the same method if you are buying some other multiplex. 

  

14. I currently own my home, but I am selling it and buying a new home that has never been lived in. Do I qualify for the New Home Credit? 

Yes. You do not have to be a first-time buyer to qualify for the New Home Credit. 

  

15. I just sold my home in another state. I am now moving to California and buying a home that has been previously occupied. Will I qualify as a First-Time Buyer since I have never owned a home in California

No. If you have owned a principal residence within the last 3 years, you do not qualify for the First-Time Buyer Credit, regardless of where the home was located. 

  

16. I am married, but I have been separated from my wife for several years. I have never owned a home, but my wife purchased a home last year that is now her principal residence. Since my wife will not be purchasing the home with me, can I apply for the First-Time Buyer Credit? 

No. If you are married on the date you purchase the home, you do not qualify for the First-Time Buyer Credit if either you or your spouse has owned a principal residence within the last 3 years. It does not matter that your spouse is not purchasing the home with you or that you are separated. 

  

17. I qualify as a First-Time Buyer and I am purchasing a home that has never been lived in. Why can’t I choose which credit I want instead of having to get the New Home Credit? 

When buyers qualify for both credits, the law states that the amount will be allocated from the New Home Credit. The money for the First-Time Buyer Credit is expected to run out much faster than the New Home Credit. 

  

18. I am a First-Time Buyer and I am purchasing a home that has been previously occupied. Do I need to have the seller provide his/her SSN and address? 

No. Seller information is no longer required for the First-Time Buyer Credit. The application (Form 3549-A) was revised May 26, 2010, eliminating the seller information requirement for the First-Time Buyer Credit. If you previously faxed an application to us with the seller information included, do not send a revised application. 

  

19. I faxed my application to FTB, but I forgot to include the HUD-1 statement. What should I do? 

Fax the HUD-1 statement along with a copy of your original application to the same fax number. Include a note explaining why you are sending the application a second time. 

  

20. I faxed my application to FTB, but I made a mistake on the application. What should I do? 

Fax the corrected application to the same fax number. Include a note explaining why you are sending the application a second time. Do not send the HUD-1 statement a second time. 

  

21. How is the two week period to file an application determined? 

Applications (FTB 3549-A) must be received by FTB within 2 weeks after escrow closes. Two weeks means 14 calendar days. A calendar day starts at 12:00 AM and ends at 11:59 PM. Saturdays, Sundays, and holidays are included. We count the day after escrow closes as the first full day. For example, if escrow closes June 1, 2010, the application must be received between June 1, 2010 and June 15, 2010. If the application is received before June 1, 2010, or after June 15, 2010, the application will be denied. 

Information obtained from the CA Franchise Tax Board; 

For more information: http://www.ftb.ca.gov/individuals/New_Home_Credit.shtml

This week in review (it was a crazy one!!!)

Today’s payroll flop — only 20,000 real jobs created in May — will take some time to settle all the way in. Immediately: 10-year T-notes are 3.22% (from 3.36% yesterday and 3.99% six weeks ago), and the best mortgages below 5.00%.

The payroll report has confirmation: new unemployment has held high for five months; May retail sales look soggy and auto sales flubbed in May.

In days ahead, the entire recovery camp from government to stock-pushers has more than explaining to do. It must change its mind.

All in one fur-ball: How can mortgage rates be so low, and home prices so low, home affordability the best ever measured, yet housing defies recovery? One unifying answer: credit. Not enough, and wildly too tight. The credit dearth is perfectly rational. At default rates like these, nobody knows what new loan is safe to make, and underwriting has been overtaken by hand-shaking, eye-glazed panic. The horrifying conundrum: new loans will inevitably produce new losses, yet without enough new loans, losses on existing ones will be greatly higher.

The good thing for us is hidden in the above. Rates are at all-time lows and home affordability has never been better, the perfect storm. And even though it may not seem like it, we’re lucky here in California. Throughout the rest of the country the loss of the $8,000 home buyer tax credit has taken it’s toll as purchase applications are down sharply from a month ago (even though prices are the same and rates are lower) but we have another $10,000 tax credit available to use here in California! The local Sacramento area market is actually looking up with an every so slight month-over-month and year-over-year price increases in housing. Uber-low rates, dropping unemployment rates, and value in home prices coupled with that free $10,000 tax credit available to many Californian homebuyers should help that continue until the economy and national housing starts to pick up as well.

The glass is half empty, but it’s actually more than half full. Somehow…

Have you heard of the Homepath Mortgage?

Fannie Mae HomePath Financing…. Have you heard of it? If not you’re in for a nice suprise. This is a little-known program recently rolled out by mortgage giant Fannie Mae that helps them get some of the foreclosed homes sold and buyers into those same homes with a fantastic mortgage for taking it off their hands.

 Ask you Realtor about it. Any time you see this logo on a listing or on the MLS it means the home is already approved for HomePath financing. OK OK, what is HomePath and why do I want it anyways? Well, Homepath is probably the best loan out there for buyers with low down payments. The minimum required down payment is actually lower than FHA (3% to FHA’s 3.5%) and there is no MI (Mortgage Insurance) or appraisal required. Not only that, they may give 3.5% back to the buyer for closing costs so it really is the lowest down payment option in the Sacramento area for the majority of future homeowners. Here are a few of the benefits of Fannie Mae Homepath…

  • Low down payment and flexible mortgage terms (fixed-rate, adjustable-rate, or interest-only)
  • You may qualify even if your credit is less than perfect
  • Available to both owner occupiers and investors
  • Down payment (at least 3 percent) can be funded by your own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer
  • No mortgage insurance*
  • No appraisal fees
  • * Ask your lender for cost details on loans without mortgage insurance

    We have this incredible program in house here at Comstock Mortgage. Give me a call if you have any questions.

    Sincerely,

    Greg