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

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FHA’s Homeowner Armed With Knowledge blueprint

FHA UpdateLast week the Federal Housing Administration, an arm of HUD (the department of Housing and Urban Development) announced a new “Blueprint for Access” that, if implemented, should lower the cost of having an FHA loan as well as make getting an FHA loan a little easier for some home buyers.

The biggest thing here is the HAWK (Homeowners Armed With Knowledge) program which, in exchange for the home buyer sitting through a short homeowner education course, will cut the historically high FHA mortgage insurance premium factors.

FHA-questions-cost-MIGenerally speaking FHA loans are great. They tend to have lower rates than conventional loans and are easier to qualify for and get closed. The big issue with FHA is the mortgage insurance and how much it can increase a homeowner’s monthly payment.

However due to the housing “crisis” and recession tied to it HUD had to increase the FHA’s cost of borrowing to re-fund its MMI fund (Mutual Mortgage Insurance fund, which losses on FHA loans are paid to lenders from) that had taken a hit due to defaults and foreclosures in 2008-2012. HUD increased both the up-front fee collected on FHA loans (UFMIP) as well as the annual premium that is paid monthly by FHA borrowers as part of their monthly payment to all-time highs; making new FHA loans more expensive than at any time in their history, despite having lower rates than conventional loans.

The HAWK program will reduce the UFMIP by 50 basis points ($1,750 on a $350,000 FHA loan) as well as the annual MIP by 10 basis points ($30 a month on a $350,000 FHA loan).

For those willing to take additional homeowner courses after closing and make on-time payments for the first two years of the loan FHA will reduce the amount of the annual MIP by an additional 15 basis points (another $42 a month on that $350,000 loan, for a total of a $72 reduction in monthly payment).

Right off the top the HAWK program will save an average Roseville/Rocklin/Lincoln buyer between $1750-2,000 off their total loan amount and $70-100 a month off of their payments after two years compared to an FHA borrower that does not participate!

The detailed guidelines will be posted this summer and the program is slated to roll out in the fall. I’ll let everyone know once the program has been implemented and additional details once they are known…

http://portal.hud.gov/hudportal/HUD?src=/press/press_releases_media_advisories/2014/HUDNo_14-048

Sincerely,

Greg Cowart

(916) 412-3313 – info@rosevilleloanexpert.com

Credit Corner: New legislation to help consumers

While not law just yet, the Stop Errors in Credit Use and Reporting (SECURE) Act of 2014 will be a huge help to many consumers. We have had conversations about how the archaic credit laws are in the country, both on this website and with some of you in person, and I don’t see it ever being perfect, but this is a good start.

Reading the text of the bill some of it sounds redundant with current protections (that have not quite worked as planned) but this should help in clarifying those protections and make sure both creditors and the credit reporting bureaus are transparent and put more effort into follow the rules, as well as adding some guidelines such as requiring the credit bureaus to provide a free credit score along with the already available free annual credit report

Political realities of today being the political realities of today this may not ever pass (seeing as its authors and sponsors are all from one party) but I can’t see any reason for this to be political at all. My assumption is we see one of the few bills that passes with bipartisan support.

We can only hope, it will be good for ALL of us. At any given time there are an estimated 10 million American adults with major errors on their credit report! It could be you… I’ve been in that group at one time. While I am well versed in credit monitoring and repair due to my profession and was able to quickly fix the issue, most of those 10 million people aren’t.

Read more about the Stop Errors in Credit Use and Reporting Act of 2014 at my preferred credit repair provider’s blog here: BLUE WATER CREDIT BLOG.

Till next time please give me a call if there is anything I can help you with…

Sincerely,
Greg Cowart

(916) 412-3313
info@rosevilleloanexpert.com

New Placer County Tax Website

It was just pointed out to me by a local Realtor (thank you for all the great info you provide on a regular basis, Jen) that Placer County has updated their tax bill website…

placer-county-tax-bill-mortgage

Placer County Tax Bill Search

For any of your property tax bill needs in Roseville, Rocklin, or anywhere in Placer County here is your starting point. Of course you can always call me or your favorite real estate professional and have us do the research for you.

Greg Cowart
(916) 412-3313
info@rosevilleloanexpert.com

Lincoln still in play for USDA (100% financing)

Yep, that is right. The city of Lincoln, Ca is still eligible for 100% USDA financing.

Over the last two years USDA was supposed to change their eligible areas based on the 2010 US Census but the date of the new map’s going into effect keeps getting pushed back.  The most recent date for the change was Jan 16th, 2014 (it was also slated to change in October 2013, March 2013, and October 2012)…

USDA-mortgage-transWhat does this mean?

Well, it means if you want to buy in Lincoln, or any other city/area that will no longer be USDA-eligible once the new maps go into effect (Auburn being one of them), you now have until (at least) October 1st, 2014 to get into contract and have your lender get the application over to USDA.

For the map of eligible areas plug your subject address into this link on the USDA website and it will tell you if it is eligible or not (Lincoln, CA is 100% eligible as of the search I did today).

USDA Eligibility Map Lookup

If you would like to lookup what the future map looks like, whether it changes on October 1st, 2014 or if they push it back again, it is right here…

USDA Future Eligible Area Map Lookup

If you would like any assistance or would like to get prequalified for a USDA loan please give me a call. In my opinion it is one of the best loans out there, if you want to buy in a USDA-eligible area of course. 100% financing is allowed, it is government-backed so rates are on the lower-end (similar to FHA and VA in most cases), but it does not have the huge UFMIP and annual Mortgage Insurance premiums like FHA does (that makes FHA such an expensive loan in comparison to most other loans these days).

Lets say you are looking in the Northern part of Rocklin but can’t find anything in that your price-range or down payment availability will allow you to qualify for. 12 Bridges is right there and you may be able to (subject to minimum income/asset/credit requirements) buy with a lower down payment, or even none at all.

Sincerely,

Greg Cowart
Senior Mortgage Consultant – 18 Years Experience
(916) 412-3313
info@rosevilleloanexpert.com

Major changes make what was once impossible possible

Towards the end of 2013 Fannie Mae quietly released an update to their Desktop Underwriter (DU) underwriting system, the system used to underwrite the vast majority of Conventional mortgages nationwide.

Much of the update is inconsequential, it mostly had to do with updating the software to comply with the new QM (Qualified Mortgage) rules that went into effect on Jan 10th, as well as some minor changes to the way DU underwrote HARP refinances, but one big change may positively affect a lot of people. Definitely a lot of people I have talked to over the last couple years.

One of the good things about current conventional guidelines is they allow qualified borrowers to buy or refinance in as little as two years after a short sale so long as they have a 20% down payment or 20% equity in the case of a refinance.

Fannie Mae Roseville Short Sale

Many people suffered the effects of the Great Recession from 2008 – 2011, losing their primary residence or maybe a 2nd home or investment property, and today qualify under Fannie Mae’s guidelines for getting a new mortgage. The issue has been DU has not been able to differentiate between a short sale and a foreclosure when it reads credit reports and it made it so A LOT of people could still not qualify because of the issue with the software.

Yes, a glitch was making it so people could not buy a home or take advantage of recent low rates. 

Fannie Mae has been aware of this issue for a while but never did anything to fix it. Versions of DU were announced and announced and there was no update to fix this issue. Creative lenders (like me) created a workaround with our credit report providers to help DU read the data is was getting wrong accurately but Fannie Mae asked the credit report providers to stop doing this. At the end of the day well-qualified people could not get their loan even though they met all the guidelines.

That is until Fannie FINALLY did something about it with the release of Desktop Underwriter 9.1. Now the software is able to correctly read the credit report and determine if the loan was foreclosed on or was a short sale. Big difference.

If you or someone you know had issues qualifying to buy a home or refinance in the last couple of years with this glitch please give me a call (916.412.3313). It may (probably should) just work this time around! If you want to buy a home or refinance to a lower rate and payment and you had a short sale as recently as January 2012 you may already be able to qualify!

HARP myths debunked…

Tracy Mooney, Senior Vice President of Freddie Mac put out an insight on the mortgage giant’s blog today discussing some common misconceptions about the HARP program. Here is the link, check it out for the top 9 myths about HARP (such as myriad of ideas people have as to why they do not qualify for the program, when in fact they do)….

http://www.freddiemac.com/news/blog/tracy_mooney/20131216_harp_dispelling_myths.html

freddie-mac-harp-roseville-mortgage

Conforming loan limits stay the same for 2014…

The Federal Housing Finance Agency (FHFA), overseer of mortgage giants Fannie Mae and Freddie Mac (GSE’s), has decided to leave the maximum loan limits for loans they guarantee unchanged for 2014. The maximum conforming loan limit will remain at $417,000.

As has been the case since 2008 some areas considered “high cost”, including most of California, are still exempt from the $417,000 ceiling with limits that range as high as $625,000 in higher priced counties in the Bay Area and Southern California.

For the greater Sacramento area (Sacramento, Placer, and El Dorado County) the “High Balance Conforming” limit remains at $474,950. Unchanged for at least another year.

fannie-mae-freddie-mac-roseville-mortgageEarlier this year FHFA director Edward DeMarco made an announcement that he would like to reduce the limits for 2014 in some areas in an attempt to take the FHFA further out of the market and foster more investment from the private sector.  Before that happened Congress protested the idea as harmful to homeowners and said that it would hurt the real estate market and economy before it has had a chance to fully recover from the crash of 2008 and recession that followed (and they were right about that). In addition to this DeMarco is on the way out and North Carolina US Congressman Mel Watt is nominated for the director’s job and he is seen as very pro-home-ownership, something that may well have made the FHFA decision easier.

We have a lot of buyers and sellers in Roseville, Rocklin, Granite Bay, Folsom, and El Dorado Hills this will affect (or won’t affect as the news is that the limits are not changing, but you get the point), very good news for people with at least a 10% down payment in the $500-800,000 price range. Likewise a good thing for people selling a home in that price range as well.

Sincerely,

Greg Cowart

Senior Mortgage Advisor – 17 Years Experience

(916) 412.3313

The Energy Efficient Mortgage (EEM)… What is it?

What is an EEM and is it even relevant in the world of real estate in the Roseville/Rocklin area or greater Sacramento?

EEM-Roseville-Rocklin-MortgageWhether you’re purchasing or refinancing, today’s reality is that many of us should consider making energy conservation improvements to our homes. Most homes can benefit from energy upgrades.

Any home built before 1994 should benefit from an Energy Efficient Mortgage. Why?  Simple… The energy codes used up until 1993 are no longer industry standard.  Mechanical systems, insulation levels, and water heaters are the main determining factor in a home’s energy consumption.  Those installed before 1994 are less efficient, not to mention they are old!  With the Energy Efficient Mortgage, you can renew and upgrade all the critical factors that determine the energy consumption of your home, and include the total cost in your home loan.

Personal consumption has increased along with energy costs.  Today’s homes use electronics to manage almost everything, from ovens, microwaves and refrigerators, to DVRs, iPods, and tablet computers; not to mention all the battery chargers needed to keep them running.  Though prices are relatively stable, we use almost 25% more electricity today than we did in 1993.  Natural gas, however, is a different story.  Most of Californians cook, heat their homes, and their water, with gas.  Our consumption has increased a modest 10%, while the price has skyrocketed over 70%.

Simply stated, utility bills have become the second largest monthly expense of modern living, behind the mortgage or rent payment. An Energy Efficient Mortgage may lower both of these costs, definitely utility bills and overall monthly expenses.

There is plenty opportunity to take advantage of an Energy Efficient Mortgage for those looking for homes in Roseville/Rocklin or anywhere in the greater Sacramento market. Like most of the lesser-known special programs ignored by other lenders I’ve become THE local expert in the Energy Efficient Mortgage! Give me a call any time if you’d like more information.

~Greg Cowart
(916) 412-3313
info@rosevilleloanexpert.com

HARP Refinance Program Extended Through 2015!

Edward DeMarco, director of the Federal Housing Finance Agency (FHFA), has stated the extremely popular HARP refinance program has been extended through 2015. This is good news as it will allow even homeowners to benefit from lower rates and payments.

HARP Refinance Roseville

Before this the program was set to expire at the end of this year.

We’ve talked about the HARP program before (here, here, and here). HARP allows some people with loans owned or guaranteed by Fannie Mae and Freddie Mac to refinance to today’s low rates even if they have little or no equity. Most of the time an appraisal isn’t even required. At first it didn’t help too many people but was expanded in 2012 as “HARP 2.0” to open it up to millions more homeowners and has now helped about 2.5 million people refinance that otherwise wouldn’t have been able to.

And, while the number of people underwater on their homes in the Sacramento area is going down every day, there are still many missing out on lower rates and payments because they think they will not qualify because they have little/no equity, or owe more than their homes are worth.

The program’s extension to 2015 also seems to take advantage of the Fed’s promise to keep interest rates low until at least mid-2015. Some experts estimate there is still somewhere between $2-2.5 TRILLION in mortgages out there that have not utilized HARP 2.0 yet that could benefit from the programs expanded guidelines that will allow them to access today’s lower rates and payments.

I have been doing these since the beginning and one of the great things about our banking platform is we don’t have all the underwriting “overlays” that many (if not most) other mortgage companies and banks have that make it hard to qualify for a HARP refinance. Many people find me after trying with thier current lender and calling around to other places with no luck. We usually get these done in short order even though others couldn’t because they add extra rules over the top of Fannie Mae’s guidelines that prohibit a lot of people from refinancing.

Please give me a call or e-mail if you have any questions about HARP or any of our other streamlined refinance programs.

Sincerely,
Greg Cowart

Senior Mortgage Planner – 17 Years Experience
Partners Mortgage

Roseville’s Downtown Bridges Project

Three new bridges and a big change coming to Roseville, the Downtown Bridges Project.

The city is about to make some drastic changes to downtown and the Royer Park area. The main library bridge will be replaced with a new one, a new bridge will be built from the library to downtown Roseville, and the Oak Street bridge will be extended. Oh ya, and the firehouse will be graded as part of the project, connecting downtown Roseville with Royer Park.

The committee selected to choose which design plan (of a few) has recommended that the council choose Mark Thomas & Company’s plan because its design more closely matches the New Deal-era Works Progress Administration architecture called for in plans for downtown Roseville, as well as this design’s trail plans.

LINK TO MARK THOMAS & COMPANY’S SITE PLAN

It won’t be until at least 2014 before construction begins but soon enough we will see a dramatically different downtown Roseville.

Greg Cowart II
Mortgage Planner – 17 Years Experience