Posts

Fed May Step Back into the Market; Rate Float-Downs

But the question remains, with respect to the Fed stepping back in, why? The Fed’s presence (in buying up mortgages) was necessary in 2009 to maintain demand for mortgages, but, as it stands now, there is ample demand for mortgage-backed securities. In addition, driving rates even lower may not spur further demand for refi’s b/c […]Read More

Appraisal Horror Story

Appraisal Horror Story We have a $285,000 purchase in an especially depressed area. We thought there would be no issue with the appraisal because the most recent comp was a “model match” that sold for $315,000, and it was clearly in inferior condition. We under-estimated the appraiser’s laziness, and he came in $20,000 LOW. The […]Read More

Energy Efficient Mortgages – Great Tool for Repairs

EEM Mortgages are a great tool to do ANY so-called “energy efficient improvements” to a home, including installing new windows, new furnaces, new doors, new insulation, etc. $8,000 for such improvements can be added on to an FHA loan irrespective of the resulting LTV. The work does not have to be done before close, as […]Read More

FHA Repairs/Concerns; We (JVM) Can Pay For & Do Repairs

FHA Appraisers do not care so much if properties are “old or tired” looking. They test appliances for working order; they look for “Health and Safety Concerns” (is water heater strapped down), and they look for major deferred maintenance (dry rot, leaky roof, etc.). FHA appraisers are not significantly worse than conventional appraisers with respect […]Read More

Rates Improve Slightly; Our Best Appraiser Thinks “STAGING” Effective

Our most experienced appraiser is in constant contact with us, frequently sharing his market observations. Over the last several months, he has been appraising numerous “Flip” properties at the lower end of the market. He concluded recently that investors who aggressively “stage” their “Flips” get much higher prices for their properties (than those who do […]Read More

“Yield Premium” for Repairs or Fees

We have a transaction in which we are using our “yield premium” or commission to pay for about $8,000 of repairs. The seller won’t do the repairs, and the buyer cannot afford to do the repairs, so we increased the rate to get more commission. We then agreed to credit the commission to the contractor. […]Read More

FHA Rules/Dates Again; Spot Approval; Appraisal; MIP Increase

FHA Down Payment: An increase to 5% Down does not seem likely for FHA loans according to several of our lenders. Using our OWN Appraisers: If FHA Case Numbers are ordered on or after Feb. 15th, we are subject to HVCC appraisal rules. This is serious, as our super-skilled appraisers have saved many FHA deals […]Read More

Great “Fence Sitter/Tire Kicker” Story

There was a great Fence Sitter/Tire Kicker story in Monday’s Wall Street Journal. It featured a woman in Marin County named Ms. Pringle who spent over two years viewing 298 homes, much to her Realtor’s frustration. (The average time a buyer spends looking for homes is just over 10 weeks, according to the article). Anyway, […]Read More

Energy Efficient Mortgages (again) – Great Way to Finance Improvements; Limit Is Now $17,650

We mentioned Energy Efficient Mortgages (EEMs) a few weeks back. These loans consist of additions to principal that can be tacked on to FHA Loans at the same rate as the base FHA Loan, irrespective of the resulting LTV. EEMs were capped at $8,000, but now a few of our lenders allow as much as […]Read More

Market Volatile; Appraisal Issues Galore; HVCC Guides May Disappear

The other issues we are battling right now involve appraisals. Many of our current purchases are at prices higher than most of the recent closed sales in the subject property’s neighborhood. Fortunately, most of these transactions involve FHA financing so we are able to work with our appraisers directly. They call us to discuss potential […]Read More

Banking Crisis

Rates got marginally worse because money moved out of bonds and back to a moderately stabilized stock market. In case anyone wants to understand the nature of our current banking crisis, we highly recommend an episode from the “This American Life” radio series on Public Radio; we found it both fascinating and informative. It explains […]Read More