5 Things To Consider When Buying A House

These are 5 things every homebuyer should consider when buying a house in California and Texas. 1: INSIGHT INTO CURRENT MARKET CONDITIONS According to recent data from Zillow, the median home value in California is $578,267. Over the last year, home prices increased by 4.4% and are expected to fall by 1.1% in the next 12 […]Read More

Forbearance Confusion; Refis Dominate Market; Purchases Still; Mortgage Industry Remains Alive

FORBEARANCE CLARITY The mortgage industry, terrified of a mass onslaught of payment forbearances, was alarmed by a misleading report by CNBC. Reporter Diana Olick said that borrowers obtaining a forbearance could tack the missed payments on to the end of the mortgage. This is not true, however, as most servicers will try to recoup the […]Read More

Types of Loans: FHA, VA, Gov’t, Conventional, Conforming, Jumbo, etc.

There is often a lot of confusion about the names and types of mortgages available in the market place. Here is some general information to address some of the confusion. I. “Government Loans” are mortgages that are either insured or guaranteed by the government or a government agency. They include FHA, VA and USDA loans. […]Read More

Values Drop But Rates Up? – Payment Still Way Higher; Don’t Wait

We recently had a borrower repeat a refrain we heard often in years past: “I think the market is over-priced right now b/c there is too little inventory; I am going to wait for prices to drop even if it means I have to take a higher rate; higher rates may actually push prices even […]Read More

Happy Thanksgiving! JVM Open All Day; Co2 Detectors

JVM Lending will be open all day today, but closed Friday. Jay and Heejin will, however, be available via cell phone and email on Friday and over the weekend, as usual. Quick Reminder: Make sure Carbon Monoxide Detectors are installed in at least the kitchen and bedroom areas of all homes. Co2 Detectors are an […]Read More

15 Day Close? Get Suitcases & Move In With Us – Rules for Fast Closings

We often tout our ability to close purchases in 15 days, even though our Processors and Mortgage Analysts hate it. They dislike touting fast closings not b/c we cannot perform (we can, and then some); they dislike it because even a slightly uncooperative borrower, Realtor or escrow agent can delay us by a week, while […]Read More

What Are “Seasoned Funds”? Why Are Seasoned Funds Important?

Most people know that “seasoned funds” are funds that have been in a borrower’s account for more than 90 days. Lenders verify “seasoning” by reviewing a borrower’s last two account statements and looking for all “unexplained” deposits. Lenders scrutinize deposits/seasoning much more now than in the past, and this frequently delays transactions. Lenders look for […]Read More

Reminder: Do Not Disclose Pending Divorces

Yesterday, we almost had a purchase blow up in funding b/c an escrow officer assistant disclosed a pending divorce situation to the lender. The husband and wife were buying a second home for the wife with investment property financing. The realtors and escrow officer all knew not to say anything about the divorce (we had […]Read More

“Average Credit Score = 750!”; Bad Thing?; Good Thing!

Over the last six months, the average credit score of an approved borrower was a whopping 750. The average score of a borrower denied mortgage credit was 704! These are amazingly high scores in light of the fact the average score of borrowers in the 25-34 year old (First Time Buyer) range is only 649. […]Read More

Mortgage Lending Process Overview

Mortgage Lending Process Overview Purchase Process Overview with JVM Lending: The below timeline is an overview of the course of events necessary to close your home loan after your offer has been accepted and you are officially in contract to purchase your new home. The “DAYS” set out below are approximations only and are based […]Read More

“QE 3” Announced – Lowers Rates

QE 3 is short for Quantitative Easing, Round #3. This is a policy where the Fed buys up debt instruments or assets in an effort to push down long-term interest rates. The Fed’s hope is that lower long-term rates will stimulate the economy by giving consumers and businesses an incentive to borrow and invest more […]Read More

Rescission Periods – 3 Days For Primary Residence Refi Only

A “Rescission” Period is a mandatory “cooling off” period between the date someone signs loan documents and the date a loan can fund. There is NO rescission period for purchases, or refinances involving 2nd homes and/or investment properties. Only a refinance of an owner occupied primary residence requires a rescission period. Prior to the late […]Read More

Options For Investors Buying “Fixer Uppers”

Investors looking to buy “fixer uppers” that are in poor condition have only a few options. Hard Money or Private Money/30%+ Down: These lenders do not care about condition, but they do require 30% down or more, and their rates are in excess of 10%. In addition, they charge from 3 to 5 points. Fannie […]Read More

Loan Over $417,000? 2 Options: 10% Down or 3.5% Down FHA

If loan amounts are under $417,000, buyers can get conventional financing with as little as 3% down, as well as FHA financing with 3.5% down. If loan amounts are over $417,000, however, buyers still have only two options: conventional financing with 10% down or more, or FHA financing with 3.5% down. This is an important […]Read More

Call Extra/Unpermitted Units “Storage”

We have two retired borrowers refinancing their property in Berkeley – a quaint older home with an in-law in back. The in-law unit is a cute little, detached cottage that does not detract from the property in any way, and it also generates $900 per month in rent. The cottage itself is in great condition. […]Read More

“Appraised Value” Often NOT “Market Value”; Low Appraisals

We often have buyers bidding for houses in very competitive markets because of the lack of inventory. In these situations, appraisals often come in under contract price. This frightens buyers because they think they are paying too much for the property. But, we explain to buyers that the “appraised value” often does not come close […]Read More

“Gift of Equity” for a Down Payment; No Cash Required

We often have buyers purchasing properties from close family members. These buyers often have minimal cash for a down payment, and the sellers (often parents) are willing to help the buyers out. In these situations, the best option for a down payment is a “gift of equity.” As long as the down payment is 20% […]Read More

Buy Primary Property as “Investment” if Debt Ratios Tight

We often have buyers looking to “buy up” into a larger property with the intention of keeping their current property. These buyers, however, often cannot qualify for the larger house b/c the new mortgage in conjunction with their current mortgage makes their debt ratios too high. One solution is to find a renter for the […]Read More

3% Down Conventional vs. 3.5% Down FHA

Many buyers with limited down payment funds think FHA financing is their only option. But, for loan amounts under $417,000, Conventional Buyers can put down as little as 3% (0.5% less than FHA requires). Below are some of the benefits and drawbacks of Conventional Financing. Benefits of 3% Down Conventional Financing (vs. 3.5% Down FHA […]Read More

Will Rates Stay Up? Still Say Lock Now

There are three reasons why rates have spiked: (1) improvements in Europe’s sovereign debt picture; (2) improvements in the US economy overall; and (3) decreasing likelihood that the Fed will move again to “ease” or push rates down. As we point out frequently, positive economic news sends investors into stocks and away from bonds (and […]Read More

Main Criteria To Evaluate To “Know” a Buyer Is Viable

We often have Realtors with eager buyers who want to view homes before the buyers have been previewed by us. To ensure no time is wasted on non-viable buyers, Realtors need to ask a few questions about the criteria that make buyers viable: (1) Credit; (2) Income; (3) Equity – Down Payment. Credit: Ask about […]Read More

Every Penny In Transaction Must Be “Sourced” Up To Close

Borrowers all too often believe that once their loan is approved and they sign loan documents, they have nothing to worry about. We have addressed this before, reminding everyone that “verbal employment verifications” are often performed right before close of escrow (so yes, borrowers do need to keep their jobs through close of escrow). Another […]Read More

25% Ownership Means “Self-Employed”; 2 Year History Required

Borrowers who switch from one W2/salaried job to another in the same field can still garner mortgage financing as soon as 30 days after their job switch. There is a caveat, however, that surfaces all too often in this age of “entrepreneurialism.” If a borrower takes a 25% (or higher) ownership stake in his new […]Read More

U.S Rates Worse; Mortgage Rates Better; Why?

Mortgage rates do not always move in lock-step with Treasury rates. Mortgage rates will often move independently from Treasuries, depending on the overall supply and demand for mortgage-backed securities. Secondly, there is a good by-product of the excessively stringent underwriting guidelines – investors are realizing that mortgages are very safe bets. This increases demand for […]Read More

Defining “Turn Times”; Financing Takes Time

Lenders are frantically hiring more underwriters and support people to handle the influx of loan requests for both purchases and refi’s. They simply cannot find enough trained talent to handle the volume. As a result, “turn-times” are slower than usual. It is essential that everyone understands the definition of a “turn-time” in order to understand […]Read More

Strong Borrowers Frustrated Because of Need to Comply With Fannie

We address this frequently and are doing so again because it comes up so often. We constantly get extremely strong borrowers from a financial perspective who either cannot qualify for a loan, or who gets conditioned to death. And, as always, they become irate and blame us for the problems, telling us how strong they […]Read More

Part Time and 2nd Jobs Require Two Year History

We often get borrowers who can only get part-time jobs b/c of the weak economy. We also get borrowers with 2nd jobs to help make ends meet. A “part-time” job is typically one that requires fewer than 30 hours per week. A “2nd job” is simply a source of employment other than a person’s full-time […]Read More

Foreclosure Inside a BK – Same Seasoning Periods

As mentioned yesterday, we often get borrowers with recent bankruptcies (BKs), and we quote the normal seasoning periods that lenders require after a BK is discharged. The seasoning period is usually 2 years b/c most of our borrowers have had Chapter 7 BKs. But often, after further digging, we discover that borrowers had one or […]Read More

Financing After a Bankruptcy – Seasoning

We have been getting borrowers with recent bankruptcies asking about financing after a bankruptcy. Fortunately, FHA is very forgiving when it comes to bankruptcies. A Chapter 13 BK requires NO seasoning after 12 months of timely payments into the BK. Chapter 7 & 11 BKs require 2 years of seasoning in most cases, or 1 […]Read More

Do NOT Mention PENDING Divorce

This is another reminder from previous Comments because it has come up many times. If a borrower or buyer is involved in a divorce that is not yet recorded or finalized, do not bring it to light. If lenders find about a pending divorce, it raises legitimate issues in regard to future liabilities. Hence, lenders […]Read More

Initial Deposit Into Escrow Needs to Come From Buyer or Donor

We often get purchases where well-meaning relatives or friends write the initial check for the escrow deposit. This invariably creates problems for us; we often end up backing out initial deposits from escrow (with the permission of sellers) and then getting buyers to write a new deposit check. The reason is that every penny that […]Read More

Options For Locked Borrowers if Rates Fall

There are hundreds of thousands of borrowers across the country with locked in interest rates, and most are wondering what their options are when rates fall. First, we like to remind borrowers that they were smart to lock in the first place. We remember all too many times over the past 20 years when borrowers […]Read More

Final Conditions In? Still Need Sign Off & Docs Drawn – 4 to 8 Days

We had a purchase of a condo conversion recently where all conditions were signed off with the exception of the final condo documents. When the final documents showed up, the buyers and realtors (all great clients, by the way) expected to sign loan documents and close the next day. In the above case, we still […]Read More

Rates Hold; We Often Discourage Leaving One Lender for Another

With rates at record lows, we often get calls from borrowers currently locked and working with another loan officer. They might say, “I am locked at 3.75% but I want to see if you can do better.” We invariably can offer a much better rate, but unless the borrower is getting a decidedly bad loan, […]Read More

Short Sales Statistics – Short Sales Still Take Forever

If you are nursing a “Short Sale”, continue to expect long wait times. Legislation intended to speed up short sales apparently is not yet working. Deutsche Bank published a study of short sale turn time with various different servicers. GMAC is fastest with an average approval time of 6 months. Citi takes an average of […]Read More