Thank you Mortgage Women's Magazine! I am honored to be listed in your latest edition.
You can find me under women owned business.
Mortgage Women Magazine - September 2017 - 1
Even with all the regulations and changes in the mortgage industry since 2008, fraud still exists. This blog most specifically deals with borrower fraud and what is being termed as reverse occupancy fraud.
Borrowers will use rental income to qualify for a mortgage loan but then occupy the property instead of renting it out. The agencies, Freddie Mac and Fannie Mae, have seen an increase in use of short term rental income, i.e. Airbnb and VBRO. Borrowers will try to use this income to qualify but have no intention of putting their home in a rental pool.
Because this has become such a problem, Freddie Mac has recently updated their guidelines that state:
ncome from rental properties not owned in the prior calendar year For Borrowers who do not have a documented one-year history of investment property management experience, the Seller may only consider net rental income in an amount up to 30% of the sum of the net rental income and all other stable monthly income that is used to qualify the Borrower. This change provides support to sustainable and successful homeownership by requiring a reasonable limitation upon the reliance on a newer type of income stream. Guide impact: Section 5306.1(c)(ii)
I found an interesting calculator that will tell a potential borrower if it is cheaper overall to rent or to purchase a home. The calculator will allow the user to input specifics such as monthly rental costs and tax bracket information. The results show if buying or renting is the best option. www.calculator.net/rent-vs-buy-calculator.html
.I came across information about this program in a recent blog post. HUD has offered this program for a while but I didn't realize it was still an option. The program provides certain incentives (subject to meeting criteria) to firefighters, law enforcement officers, emergency medical technicians, and teachers.
Here is a link that further explains the program.
FHA owns homes throughout the country. Find out what properties are in your neighborhood via the Hud Home Store.
Freddie Mac's Home Possible mortgage option.
Have bad credit and wondering if you can qualify for a mortgage loan? There are some options but remember that a borrower with a low credit score will more than likely pay a higher interest rate or will be required to provide a higher down payment amount.
Read more at Realtor.com
New construction activity was higher in June than the previous month and higher than what was predicted. This is good news for the housing industry as this makes possible more inventory and more options for potential home buyers.
Across the county housing inventory is low which means that purchase business has been low, there is not enough homes for the number of potential buyers who are looking to buy.
With the increase in new construction, this opens up more existing homes... those who are building now have homes to sell.
Permits taken out by builders have also increased which is a good sign for future construction activity.
Good news for lenders, Realtors, and home buyers!
As I read through daily mortgage news and commentaries, I frequently run across information about eased credit guidelines with Freddie Mac and Fannie Mae. Most recently Fannie Mae updated their guidelines for self-employed borrowers. They have relaxed documentation requirements and analysis of business and personal income.
Speaking of self-employed borrowers. It is often very hard for a small business owner to qualify for a mortgage loan because business tax returns often show very little income on the adjusted gross income bottom line. There might be some help for business owners. Help … but somewhat controversial. What I mean by is that some lenders across the nation are offering stated income loans again. These were often called NINA loans or liar loans. They were called liar loans because borrowers were stating income they thought would allow them to qualify. A borrower states to the lender what their monthly income is with very little or no documentation required.
These loans are referred to as non – qualified loans and are not sold to the secondary market, i.e. Freddie Mac or Fannie Mae. These type of loans may also require a certain downpayment or cash reserves.
This is feared by some as a reason or a least one of the reasons that caused the mortgage melt down.
What do you think? Are we heading back to what hit the mortgage business in the past by offering stated income loans?
Did you know what site is the only federally approved site to obtain a free consumer credit report? Annualcreditreport.com is the only official site directed by federal law to provide them.
Federal law to provide them
The three national credit reporting agencies, Equifax, TransUnion, and Experian, have launched the National Consumer Assistance Plan initiative which will help make credit reports more accurate, transparent, and understandable.
NewsNews ReleaseJUNE 09, 2016
Equifax, Experian and TransUnion today launched a new website, http://NationalConsumerAssistancePlan.com, to inform and update consumers about implementation of the National Consumer Assistance Plan, an initiative launched by the three companies in March, 2015 to enhance their ability to make credit reports more accurate and make it easier for consumers to correct any errors on their credit reports.