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

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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…

Greg Cowart

(916) 412-3313

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!

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.


Greg Cowart

Senior Mortgage Advisor – 17 Years Experience

(916) 412.3313

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.

Greg Cowart

Senior Mortgage Planner – 17 Years Experience
Partners Mortgage

Bill in congress attempts to open up refinancing for more worthy homeowners (will it work)?

The ‘Responsible Homeowner Refinancing Act of 2013’ has been (re)introduced in the US Senate. This bill’s aim is to help homeowners that are not otherwise eligible to refinance through another program (such as HARP or Home Affordable Refinance Program) to take advantage of today’s historically low rates.

Originally introduced last year by Robert Menendez (D-NJ) and Barbara Boxer (D-CA) the bill did not have the support needed to move forward. If passed this time around it would direct Fannie Mae and Freddie Mac to require the same streamlined underwriting allowed under HARP for “same servicer” loans (refinancing with your current lender) to all lenders, leveling the playing field for all lenders.

Fannie Mae Roseville Short SaleThe bill, if passed, will also extend HARP benefits to those that have 20% equity in their homes. Opening up a world of refinancing that had currently only be open to those with little to no equity (or negative equity). Currently homeowners that take advantage of the HARP program average about $2,500 in savings annually. This bill would also limit Fannie and Freddie from charging up-front fees to refinance any loan they currently guarantee. Lowering borrowing costs to deserving homeowners even further.

HARP loans currently use proprietary Automated Valuation Models, or AVMs, to determine home values without the need for slow and costly manual appraisals. However, borrowers who happen to live in communities without a significant number of recent home sales often cannot use these models and are forced instead to pay hundreds of dollars for a manual appraisal for a HARP refinance. This bill requires the Fannie and Freddie to develop additional streamlined alternatives to manual appraisals, eliminating a significant barrier and reducing cost and time for both homeowners and lenders.

HARP already requires the borrower has been current on their mortgage for at least 6 months, and has only been late (no more than 30 days) on a total of one payment for the 6 months before that, so there is no reason to require proof of employment or income for these loans. Especially since Fannie/Freddie already guarantees these loans, and lowering the monthly payment for these homeowners actually reduces the risk to Fannie/Freddie and the taxpayer. This bill eliminates employment and income verification requirements, further streamlining the refinancing process and removing unnecessary costs and hassle for lenders and borrowers alike.

The bill would also extend the expiration of HARP for an extra year, moving the date from 12.31.13 to 12.31.14.

The Congressional Budget office has analyzed the bill and determined that the bill more than pays for itself by reducing default rates on loans Fannie Mae and Freddie Mac already guarantee. As it does not add loans to the books, or allow homeowners to take cash out, there is literally no risk to the taxpayer. On top of that it would add billions of dollars of spendable/savable dollars into the US economy. Money that is currently going towards mortgage interest. It is a win-win.

According to the CBO, the bill pays for itself through reduced default rates on GSE loans, which saves taxpayers money.

~ Greg Cowart

Mortgage Consultant – 16 Years Experience

UPO’s business center forecasting good things for California

Not what you expect to hear out there in the “Eyore media” but, according to the Business Forecasting Center at The University Of the Pacific, the state of California remains on a steady but slow economic recovery.

Based on the study, for this year and next the state’s GDP is projected to grow at an average pace of 2.5%. With job growth projected at 1.8%.

The state’s unemployment rate, currently sitting at 10.7%, is projected to slowly shrink but stay about that magic number of 10.0% though 2013. Going into 2014 and beyond they forecast the unemployment rate to continue to shrink into single digits as the rate of economic recovery increases with construction/housing again making a positive effect on the economy for the first time in over half a decade.

Here is a link to the report: LINK

Another sign: Commercial office vacancy is down for the first time in a long time

The Sacramento area’s commercial/office vacancy rate has improved from a record high at the beginning of the year. The 2nd quarter rate is still quite high, still about 23%, and the improvement was not a major one, only about 1%, but it is improvement.

Current data shows there is still about 15 and a half million square feet of office space available in the greater Sacramento area. However, the many experts believe the new data shows the commercial real estate market may have turned a corner and has a chance to post a plus in the net absorption of space rate for the first time in five years.

Much of the growth is in the Roseville area, where business is moving to take advantage of bargains in higher vacancy areas that were not only hit by the recession, but were a crop of high end office space went up right as the recession was taking hold of the local economy. Large tenants looking for a great price on high end offices are taking advantage of the low prices and inventory is starting to shrink.

It is going to be a slow and not-too-obvious recovery, but here is more data that shows our local real estate market, as well as overall economy, taking yet another step in the right direction every day…

Greg Cowart
(916) 412-3313

Innerwork Mortgage
Roseville, CA

Foreclosure activity CONTINUES to fall…

Foreclosure and mortgage default activity continues to fall…

If you have been reading my posts for the last few years I’ve been trying to put the media’s doom and gloom into proper prospective. YES, there have been a lot of foreclosures out there.

But homes in foreclosure today don’t tell us a thing about foreclosures of the future. Homeowners missing their first monthly payments do (can’t go into foreclosure if you are making your payments). Regardless of what you read in the paper or see them screaming at you about on cable news, anyone looking at the right data (patting myself on the back and saying “I told you so”) could tell you that – even though there was a sea of foreclosures a few years ago – with less and less people missing mortgage payments foreclosures of the future would be down.

I love being right! (especially about things that mean good news for all of us)

Dwight Schrute has it all figured out…

Every metro area in California saw a year over year drop in both foreclosures and first payment defualts from June 2011 – June 2012. To top that off, only two metro areas in the state, the epicenter of the mortgage crisis, were above the national average in these stats. These are wholesale changes in the data as compared to the last few years.

Even the Central Valley is showing signs of recovery. If California was the epicenter of the crisis, the central valley was the epicenter of the epicenter! The two areas mentioned above were Stockton and Merced, hit even harder than we were here in Sacramento and the rest of the state, but even their numbers are steadily improving. Topping the foreclosure news in Stockton the more important delinquency rate has improved by a full 3% year over year. Down from 12% to 9%. Still a high number but, as everything else is, slowly headed in the right direction.

More locally the data in the Sac Metro market (which includes Roseville and Rocklin) shows similarly encouraging results. The foreclosure rate is down to 2.5% from over 3% a year earlier. Surprisingly still, the foreclosure rate for the Sac Metro market is BELOW THE NATIONAL AVERAGE for the first time since before the crisis. Piling on the (relatively) good news the delinquency rate in our market was down over 2.0%, to 7% from slightly above 9% a year ago.

Our economy, looking at jobs and real estate has steadily, although slowly, been improving pretty much every month for a couple of years now. This is natural improvement, slow and steady in in the right direction, and I like what the future looks like.

Sincerely your Roseville Loan Guy,

Greg Cowart
Innerwork Mortgage

(916) 412-3313

Weekly Update: Only 80,000 jobs? It must be the end of the world!

Last week, in the midst of writing about whether interest rates could fall any further – pontificating on how bad economic news generally results in lower interest rates and why – I was inclined to say that we’d probably reached the bottom for this cycle…and perhaps for all recorded time.

Then the June employment data was released….

The headline, of course, was the meager gain of 80,000 payroll jobs over the course of the month, and the fact that unemployment remained at 8.2%, unchanged from the prior month. And that’s about as far as most people read.

Such a superficial reading hit the stock markets hard, inspiring further headlines, such as this from The New York Times: “Job Growth Falters Badly, Clouding Hope for Recovery.” In other words, it’s possible to wrench from a very complex set of figures the simple conclusion that we’re on the precipice, once again, of overall economic decline. Take a shallow breath, and the pundits add a few words about the political significance of all this. (Bad for Obama, good for Romney, apparently.)

All of this, however, pays no attention at all to the portions of the report that aren’t quite as eye-catching. For me, the most significant are the group of figures that suggest the manufacturing sector isn’t doing as poorly as analysts were beginning to think they are. detailed the mild but still meaningful bits of growth as follows: “Relative strength in the goods-producing sector. Employment in this sector rebounded 13,000 after a 21,000 decline in May. Manufacturing increased 11,000 after a 9,000 rise in May. Construction posted a modest 2,000 gain after dropping 35,000 the month before. Mining edged up 1,000, following a 3,000 advance in May.”

A close reading of these improvements suggests that we may be on the verge of a gradual sea change – one that pushes the core of the economy in the direction of growth, not toward another recessionary decline. Along with better manufacturing data and slightly better construction figures – and we should anticipate that the construction employment figure will continue to grow, especially after last month’s surge for new home sales – we can also find some solace in the fact that employment gains really weren’t very far from the consensus of economists.

There are two reasonable conclusions here:

First, the psychology in the big world of investors is operating under the assumption that we’re in big trouble if the markets aren’t making significant gains. They’re not – though the gains in real-estate-related indicators have very recently been surprisingly good.

In general, the jobs report suggests very little forward movement last month. But the mild recovery in manufacturing, the fact that the unemployment rate didn’t worsen, and the upward revisions in many recent employment numbers (again, think construction) all suggest that we may expect better data soon. When, we don’t know. But the point remains: There is less likelihood that “Hope for Recovery” has been clouded than there is that our economic feet are simply stuck in the mud. Especially in the Roseville/Rocklin and greater Sacramento market, where real estate data is on fire!

The second reasonable conclusion is that we may see the super-low interest rates of today for longer than many of us have anticipated. Indeed, they may even go lower on more bad economic news in the near-term future. Unfortunately, low rates are now the embodiment of an economy that refuses to pick up. But the economy refuses to pick up because of all the reasons for concern and uncertainty, and they are – fittingly – utterly unpredictable.

Nonetheless, it is easy to imagine investors finding solace and inspiration in some future news, and finally allowing interest rates to start rising toward the levels that they should occupy. I mean, who knows? My point this week isn’t that there’s much to rejoice about in the employment data. It’s that there is equal or better reason to be patient and find slow growth and improvement in the report.


Greg Cowart
(916) 412-3313

Is homeownership the key to dating?

A recent survey of single people showed more than a third of women and a fifth of men said they would much rather date a homeowner than a renter.

Only 2% of women said they preferred to date a man who rents, while only 3% of men said they would choose a woman who rents over one that owns her home, according to the survey, conducted by Harris Interactive.

Men and women also clearly prefer it when there’s no roommate in the picture (big surprise!); 62% of all men and women strongly prefer dating someone that lives alone.

There was also bad news for the growing number of boomerang kids (young adults who went off to college only to end up back with their folks). Less than 5% of all singles surveyed, regardless of gender, said they would date someone living back with their parents.

The survey also asked which home features were the biggest turn-ons. #1 ended up being a master bath. 64% of men love that private sanctum almost as much as women (75%) do.

Walk-in closets were cited by 55% of men and 72% of women and gourmet kitchens got 51% of the male vote and 62% of the female. Hardwood floors, outdoor decks and home theaters also came in high on the list.

Interestingly enough, hot tubs got a lot less love from respondents. Only 26% of men and 22% of women cited the old standby in the science of seduction as an amenity they would truly want

Do you fall in line with the poll’s results?


(916) 412-3313