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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 [...]]]> 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

The first thing and I mean the VERY FIRST THING, that lenders look at is your credit report.  Believe me when I say [...]]]> Home ownership is one of the keys to building wealth!  But, almost 98% of home buyers need a mortgage loan in order to buy a home for their family—or purchase rental property.  

The first thing and I mean the VERY FIRST THING, that lenders look at is your credit report.  Believe me when I say there is A LOT of bad information on the topic of credit scoring—or it could simply be that the person advising you doesn’t really know how complex the credit scoring issues can be.  

You need to know your options.  

This White Paper is just the tip of the iceberg.  

But I wrote this white paper to give you some little-known facts to help you understand your credit report and credit scores.  

So here it goes: 

What is a Credit Report? 

FACT:  The Federal Reserve Board (FRB) shares that Your Identity, Your Existing Credit, Your Public Records and Inquiries are all parts of a consumer credit report.  

Little-Known Fact: What they fail to mention is some things that are NOT reported that many people think ARE reported or affect their scores.  

ü   Your Household Income or Personal Income is NOT reported or used for scoring.  

ü   If you are married, your credit files are NOT merged together. (Only joint accounts  will show on both spouse’s credit reports.)  

ü   Even though your birthday is reported, your age cannot affect your score or chances of  approval. (One exception is the reverse mortgage which has an age requirement.) 

Where Can I get a Free Copy of My Credit Report?  

FACT:  They point out you can get one free copy of your credit report from each bureau every 12 months at http://www.annualcreditreport.com.     

Little-Known Fact:    You can get a copy of your credit report for FREE at the above website but “Now here’s a secret that may save you some money. Instead of using a credit monitoring service (that costs you money), just log onto the free site and pull one bureau (Experian, TransUnion, Equifax) every 4 months!” 

Does the Credit Bureau Decide Whether To Grant Me Credit?

FACT:  Another great “truism” is that the credit bureaus DON’T make any credit decisions. 

Little-Known Fact: The creditor uses the bureaus’ information along with other information (like your income) to determine whether or not to extend credit to you. Studies have shown that up to 79% of credit reports have errors! So even though the credit bureaus generate a score, it doesn’t mean it’s accurate. 

How Can I Stop the Unsolicited Credit Card Offers?  

FACT:  You can OPT-OUT from creditors’ marketing lists by going to www.optoutprescreen.com  and completing the information. You can choose to opt out for 5 years or permanently.  To opt-out permanently you will need to mail in the documents requested off the website. This will cut down on your unsolicited mail.  (Don’t worry, if you change your mind you can turn it back on again!) 

Little-Know Fact :  OPT-OUT before you order your free credit report.  The bureaus are in the business of selling (yes, I said selling) your information and making money off of it!  

What is a Credit Score?  

And how is My Credit Score Calculated? 

FACT:  The FRB states that your score is “a number based on your information”.  True, but there is more. 

Little-Known Fact:  The FICO algorithms (FICO 70% of the credit scoring market) actually calculate the odds of you having a 90-day late in a 24 month period on a loan obligation. I know it’s odd isn’t it? That’s why a 90-day late or more has such a negative impact on your scores!  

Another Little-Known Fact:  This is a KEY POINT. Your credit score is like a “snapshot in time”.  The score is calculated at that precise moment in time that you order your report.  So if you can change an inaccurate or un-validated item (i.e. repair, delete or remove) then your score will change immediately!

Still Another Little-Known Fact: There are two types of scores:  FICO (which is used when you apply for a mortgage) and Vantage Score which claims to have higher consumer scores. (They are currently used more in consumer loans.)  

 What If I Have Errors On My Credit Report?  

 FACT:  You can dispute credit reporting errors yourself.  

 Seriously you can repair your own credit.  In fact the FTC (Federal Trade Commission) requires that credit repair organizations have to tell the clients that in their contracts.  

 Little-Known Fact:  Just like you would not perform surgery on yourself, you might need the help of an outside attorney or legitimate credit restoration organization to help you if you get stuck.  

 You have legal rights under the Fair Credit Reporting Act that your information be 100% accurate and 100% validated that it’s yours. If not they have to permanently delete it. It’s easy to say but usually difficult to get the credit bureaus and creditors to perform due diligence. 

It’s especially critical if you have had a divorce, bankruptcy, foreclosure, short sale or medical emergency that’s caused negative or erroneous information to appear on your report.  

So, what should you do next? 

Order your credit report using the link I gave you above. 

 If for some reason your score is low or you cannot be approved for a mortgage loan because of your credit score, I can show you how you can get those credit scores increased!   

It may take some time. But once you get to that magic credit score number, not only will it help you get a better interest rate when buying a home, you’ll get better interest rates on your credit cards and auto loans, too. 

So, the question that people continue to ask me is: “Are credit repair companies legal?” 

If credit repair wasn’t legal they would not have passed a law governing Credit Repair Organizations! It’s called Credit Repair Organizations Act (CROA). It was passed to govern and protect the consumer. 

Here’s the website link if you want to check it out. 

http://www.ftc.gov/ro/chro/credit.shtm 

So, what’s in it for you?  

Not many other mortgage loan officers know the information that I shared with you in this white paper. 

Your need to increase your credit scores, combined with my knowledge, will help you increase your chances of obtaining a mortgage, dramatically. 

Most other mortgage companies want to cherry-pick the easy deals. 

Not me, because I have more options for you than they do. 

Well, you probably have some questions.  

Lots of them. 

Please give me a call while the info from this white paper is fresh on your mind and you’re excited about increasing your credit – in the long-run, saving you money.  

Even if you are skeptical, which is only natural, a phone call can’t hurt. 

Hey, the WORST you could do is spend a few minutes learning. 

The BEST you can do is have peace of mind and save yourself thousands of dollars.  

     Call Me (916) 412-3313 

I look forward to hearing from you. 

Regards, 

Greg Cowart  

P.S. If you don’t want to order your own credit report thru http://www.annualcreditreport.com, call me and I’ll order one for you…free!

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Just a quick look at last week’s mortgage bond market. Up and down (red is bad) in huge strokes all week long. I hope you see how important it is to work with a mortgage professional that not only has access to this data, but understands how to use it to your advantage. [...]]]>

.

Just a quick look at last week’s mortgage bond market. Up and down (red is bad) in huge strokes all week long. I hope you see how important it is to work with a mortgage professional that not only has access to this data, but understands how to use it to your advantage. It could make a huge difference in how much interest you pay over the life of your loan!

Here’s to hoping this week starts off with a bang and we can keep these historically low rates for a little while longer (so far it’s already looking good)!

-Greg

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 [...]]]>  

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

The payroll report has confirmation: new unemployment has held high for five months; May [...]]]> 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…

- Marriage certificate with bridal dress will be required if both husband and wife are required to qualify for the loan.

- [...]]]> - All borrowers’ birth certificates will be required with pictures taken in the hospital with medical staff. Birth certificate with a live home delivery will not be eligible for first time home buyers.

- Marriage certificate with bridal dress will be required if both husband and wife are required to qualify for the loan.

- GFE will not require signature, but will require blood sampling from a recognized institution within three days of application.

- DNA test will be performed at closing to avoid any non-arms length transactions. Loan funding will be contingent upon satisfactory receipt of DNA results.

- Verification of deposit will be acceptable only if Bank representative is present at the closing. Copy of Pay stubs and W2 will only be acceptable through IRS and only with a wax-sealed envelope mailed directly to the lender.

- Seven witnesses from the neighborhood will be required as proof of primary residence in case borrower owns more than 1 property.

- All appraisers will be required to use masks and ear plugs at the time of inspection to avoid any personal influence by the borrower or broker for the appraised value.

- In order to correctly calculate DTI and true housing ratio a list of grocery items, monthly usage and brand names will be required with receipts and projected 12 month consumption chart.

- Closing will not occur without loan officer presence at settlement and loan officer picture will be taken at the closing in a mug shot format with loan number. Picture should meet standard guideline of 2 X 2 inch in color format with one facing and one side view.

- Loan officer picture will be attached to the Deed and note and will be made available for general public and security agencies in case borrower defaults on the loan.

~ Greg

P.S. OF COURSE THESE ARE ALL JOKES!!!!