Texas One Mtg – Blog

The Real Estate Settlement Procedures Act (RESPA) is a consumer protection statute, first passed in 1974. The purposes of RESPA are to help consumers become better shoppers for settlement services and to eliminate kickbacks and referral fees that unnecessarily increase the costs of certain settlement services.

RESPA requires that borrowers receive disclosures at various times. Some disclosures spell out the costs associated with the settlement, outline lender servicing and escrow account practices and describe business relationships between settlement service providers.

RESPA also prohibits certain practices that increase the cost of settlement services. Section 8 of RESPA prohibits a person from giving or accepting any thing of value for referrals of settlement service business related to a federally related mortgage loan. It also prohibits a person from giving or accepting any part of a charge for services that are not performed. Section 9 of RESPA prohibits home sellers from requiring home buyers to purchase title insurance from a particular company.

RESPA covers loans secured with a mortgage placed on a one-to-four family residential property. These include most purchase loans, assumptions, refinances, property improvement loans, and equity lines of credit. HUD’s Office of RESPA and Interstate Land Sales is responsible for enforcing RESPA.

For additional information regarding RESPA, please visit the HUD website here.

Click on the video link.  This video focuses on IndyMac Bank, the FDIC, and OneWest Bank.  Bankers and the FDIC will have more explaining to do:  Short Sale Provides Big Profit for Bank

For those who don’t feel like taking notes, it is a study on the sweetheart deal they cut, complete with an example of a bad $478,000 loan with six months of missed payments purchased at 70% for $334,600. The borrower is forced into a short sale on property at $ 241,000, so the loss on the original loan is $244,200. The FDIC pays 80% of the loss calculated from the original price, not the reduced 70% reduced price, bringing the loss payment to the purchaser to it to $195,360. So the short sale proceeds plus the FDIC guarantee totals $436,360. Already the profit for the purchaser is $241,000+$195,360 – $334,600 = $101,760, and on top of this, the original borrower was forced to sign a promissory note for $75,000.

If you are the seller on one of these deals, make sure you are not being taken advantage of by the bank holding the loan.  Also, a good thing to remember is that when you go to buy another home, the lender/underwriter can treat this short sale just like a foreclosure. Your credit scores can be impacted the same way as well. You will have to wait 3-5 years under current guidelines before you are able to purchase again.

If you purchased your home after November 6th, 2009, you may or may not have discovered there is a problem with filing for your tax credit with the IRS. Seems the IRS has not issued the official form required to file for this latest homebuyer tax credit. It was supposed to be ready the beginning of January. Hopefully it won’t take too much longer for them to revise the old form and issue it. In the mean time, you’ll just have to wait to file for your tax credit. 

It’s been reported that the IRS is having so much trouble with fraudulent claims for the original $8000 first time homebuyer tax credit that ended November 30th, 2009 that they are now requiring proof that you actually did buy a new home. Hard to believe they weren’t smart enough to ask for the “proof of purchase” from the beginning. Isn’t that how ALL rebates work?

President Obama signed the Homebuyer Tax Credit extension into law today. See the article below for more details.

GREAT NEWS FOR HOME BUYERS!!!

The house voted today to extend the $8000 first time home buyers tax credit. President Obama is expected to sign the bill tomorrow morning, 11/06/09.

A new provision for a $6500 tax credit to borrowers who have lived in their current home for at least 5 consecutive years out of the past 8 years and wish to purchase a new home was also passed.

Example:
You purchased a home in 2002, lived there for 5 years as your primary home, moved out in 2007, and turned that home into a rental property. If you decide to buy a new primary residence today, you would qualify for the $6,500 tax credit based on the fact that you lived in the same residence as your primary home for at least five consecutive years out of the past eight.

Both credits apply to contracts signed by April 30, 2010 and that close by June 30, 2010. These credits are only available for purchasing a principal residence priced at $800,000 or less.

The bill would raise the adjusted gross income cap to $125,000 for single filers and $225,000 for joint filers. The amount of the credit currently begins to phase out for taxpayers whose adjusted gross income is more than $75,000, or $150,000 for joint filers.

Firsttime homebuyers are defined as someone who has not owned a residence within the past 3 years.

NOTES:
- If two unmarried individuals buy a home, and only one of the individuals qualifies for the credit based on their income or past home ownership status, the individual who qualifies for the credit can claim the full credit.

- For married couples, both spouses must qualify for the credit.

- The credit applies even if you have co-signers on your mortgage loan.

Friday saw rates end the week the same as last Friday with pricing only 0.25 to 0.375% worse. Monday’s rates are mixed.

The week ahead will most likely by volitile, with lots of economic reports and corporate earnings due. The Housing Index report is out Monday, Producer Price Index  & Housing Starts on Tuesday, Leading Economic Indicator on Thursday and Existing Home Sales reports on Friday. Among the companies reporting quarterly earnings will be American Express, Apple, Coca-Cola, Yahoo and Microsoft.

We’ll be at a VA convention Thursday and Friday of this week. Our office will be closed during that time. Next week we will bring you all the latest news and information from VA.

Have a great week!

The House of Representatives has unanimously voted to extend the deadline for utilizing the $8000 first-time homebuyer credit for qualifying service members for one year. The bill now awaits the Senate to act on it.

The bill also waives repayment requirements for military families, intelligence agents, and Foreign Service officers who take advantage of first-time homebuyer tax credits, passed in the Recovery Act, but are required to sell their homes or move due to orders. The legislation also gives those serving outside the United States for at least 90 days in 2009 an additional year, through November 30, 2010, to take advantage of the tax credit.

Good Morning and Happy Columbus Day.

Bond markets are closed today, while stocks and futures markets are open. Rates were much lower last week until Friday when they increased significantly due to comments by Mr. Bernanke that seemed to imply the feds are thinking about raising bank lending rates, which will most likely increase mortgage rates, too. Corporate earnings announcements will be in full swing this week. Better than expected corporate earnings will give the feds one more  reason to start raising those rates.

Have you had any bad experiences due to the new HVCC appraisal requirements? If so, please go to www.thingbigworksmall.com and sign the HVCC Petition. Look for it on the right side of the page about half way down. Brian and Frank will be headed to Washington with the petition of over 100,000 signatures in an attempt to get the  HVCC requirements temporarily halted until an intelligent and useful program can be put in place.

A bill was introduced in Congress last week calling for FHA to increase the minimum downpayment from 3.5% to 5%. We think this is another bad idea from our congressmen.

Word is, Texas legislators may try to require sales tax on all services in the loan process during their legislative term next year. This would mean lenders, brokers, loan officers, realtors, etc. would pay sales tax on their commissions & income. Borrowers and sellers would see their closing costs increase. Some estimates would increase closing costs $600 to well over $1000, depending on your sales price and/or loan amount.  This would give the state a lot more money to through away, but I don’t see how it will help the consumer or the housing/real estate industry, aka, the economy. Let’s hope wiser minds will prevail.

More later. Have a great week.

Welcome to our new Blog! This is a new experience for us. We hope we can make it interesting and informative for you.

As you may know, our lending industry is and has been going through many changes, both good and bad. HVCC is a nightmare for conventional loan appraisals. Lenders are continuing to tighten underwriting guidelines for most loan products we offer. Lower debt to income ratios, higher credit score requirements and more documentation. We’ll cover all these issues and how they may affect you and your next purchase or refinance. Until then, our website can provide a lot of information about all the loan products we offer.