Archive for July, 2009

and knowing is half the battle

July 30, 2009

Today, the Mortgage Disclosure Improvement Act (MDIA) goes into affect.  For more information on what that is, see this previous post.

Now that it will impact all loans moving forward, what are some things you can to help speed the mortgage approval process along.

  • Sign and email/fax back the initial Good Faith Estimate and Truth-in-Lending disclosures as soon as possible.  This will allow fees to be collected and appraisals to be ordered.
  • Sign and return the rest of the loan package in a timely fashion.
  • Collect and submit the required bank statements, pay stubs, W2s, etc. that are necessary to complete the loan file.
  • Notify me of any changes to the loan amount, seller contributions to closing costs, closing date changes, etc. as soon as you know.  The quicker I know, the quicker your loan will be approved.
  • If a redisclosure of the Truth-in-Lending statement is required, sign and email/fax it back as soon as possible.
  • Be conservative when scheduling a closing date.  Quick closings will become very difficult under the new Act.

Getting a loan has never been a quick process, and these new changes will not help speed things along.  Remember that the new guidelines cannot be waived AND require several business days between the date of a redisclosure and a closing date.  Waiting to sign and return documents will only cause delays.

Now you know, and knowing is half the battle…

Clay Jeffreys is a Mortgage Consultant with Dunwoody Mortgage Services, Inc. and writer for “Blog Pertaining to the Acquisition of a Mortgage to Purchase a Domicile.”  Dunwoody Mortgage Services seeks to provide mortgage brokerage services with the highest standards of service, care, honesty, integrity and value; concentrating on owner-occupied, residential financing.  For more information about Dunwoody Mortgage and available programs, please visit www.dunwoodymortgage.net.

November 30, 2009 – don’t be late!

July 28, 2009

The $8,000 tax credit for first time home buyers comes to an end on November 30, 2009.  Buyers looking to take advantage of it must have the purchase of their new home completed on November 30th… not in process, not loan approved, and not cleared to close… completed, done, finished… you get the idea.

I know what you are thinking, “it’s still July. There’s over 120 days until then.” Yes, it is indeed July. I can’t argue with you there.  That said, think about these two things.

  • If you give yourself roughly 30 days to find a home about the same amount of time to get a loan and close on the home, that is roughly 60 days.  Now all of the sudden, there are only about 60 days to spare.
  • Think about how many people are going to “jump off the fence” and want to buy a home to take advantage of the tax credit before the end of November?  Realtors will be pressed for time… Underwriting times will lengthen… Closing times with attorneys will be harder to schedule.

I am advising all of my first time home buyers to be ready to close (house found, under contract, and loan approved) by the end of October 2009. If there is a delay for any reason, you would still have 30 days to get it resolved.

It won’t be an easy process to find a home, get under contract, and buy the home if you start the process in late October or November 1st.  Don’t be like this guy, who is always running late!

Rates still near historic lows

July 23, 2009

Rates are in fact still near historic lows.  For those of you still waiting to refinance, what are you waiting for?!?

Perhaps a better question would be… which would make you more upset? 

  • We DID lock-in your interest rate, and mortgage rates went down.
  • We DIDN’T lock-in your interest rate, and mortgage rates went up.

The answer to that question should help you decide whether or not to go ahead and refinance.  There will be a few who miss out on these rates. Don’t be one of them!

Oh, also, be sure you have the help of a mortgage professional who keeps a close watch on the Mortgage Backed Security (mbs) market, undersatnd the trend lines of resistance and support in the mbs market, is aware of upcoming econmic reports, US Treasurey policy, Federal Reserve policy, and how all of this affects mortgage rates.

Don’t know of anyone like that? Don’t hesitate to contact me.  We can review your current situation and see if there is a rate and time that makes sense for you to refinance.

Get started now while rates are still at these historic lows!

Clay Jeffreys is a Mortgage Consultant with Dunwoody Mortgage Services, Inc. and writer for “Blog Pertaining to the Acquisition of a Mortgage to Purchase a Domicile.”  Dunwoody Mortgage Services seeks to provide mortgage brokerage services with the highest standards of service, care, honesty, integrity and value; concentrating on owner-occupied, residential financing.  For more information about Dunwoody Mortgage and available programs, please visit www.dunwoodymortgage.net.

A change will do you good??

July 22, 2009

The world is changed. I feel it in the water. I feel it in the earth. I smell it in the air. Much that once was is lost, for none now live who remember it. It did not begin with the forging of the Great Rings, but with the creation of subprime loans and 100% financing.

Galadriel, chill out, not all change is bad!

Galadriel, relax! Not all change is bad.

Change can be a good thing, but going through the process of change may not be too pleasant.  This is a timely reminder because on July 30, 2009, the Mortgage Disclosure Improvement Act (MDIA) goes into affect.  This changes the way in which borrowers are disclosed information regarding their loan AND the time frame in which a loan can close (based on the disclosure of that information).

Some examples of the new guidelines:

  • Lenders will no longer be allowed to collect any application fees, appraisal fees, etc. until the borrower receives the truth-in-lending statement. 
  • “Received” is when the borrower signs and dates the disclosure OR three business days after loan disclosures have been mailed to the borrower. 
  • During the loan process, if the APR on the loan changes by more than 0.125% for any reason, the borrower must receive an updated set of disclosures and given time to review them. 
  • On a redisclosure, a home closing cannot occur until 3 business days after the lender sends the updated disclosures to the borrower.
  • Redisclosure is required even when the borrower’s APR goes down (better rate, lower closing costs, etc).

The idea behind MDIA is great because it is designed to protect consumers. It will cut down on predatory lending and ensure borrowers know about any changes taking place on their loan.  The days of shady lenders saying at the closing table “by the way, your rate is actually 5.5%, not 5%. Now sign here” are over.

The downside in all of this will be MDIA’s implementation.  There may be delays in ordering appraisals (waiting to collect up-front fees), and possible delays in closings for changes in loan amounts, rate, closing costs, etc. 

As we all adjust to the new guidelines, here are some practical steps to ensure a smooth closing.

  • Plan ahead: Always a good idea, but now even more important to close on time.
  • Schedule closings wisely: Quick closings will become very difficult under the new Act.  Before putting down a quick closing date on a contract, call me so we can schedule a realistic closing date.
  • Be patient:  As with any change, there will be an adjustment period.  Remember, this is not only new for borrowers and mortgage professionals, but also for realtors, appraisers, and closing attorneys.

As cumbersome as these changes may be, it is actually a good thing. There will be some frustration involved as we all adjust to the new guidelines.  That said, it will be worth the trouble in order to provide more transparency and protection for borrowers.

Clay Jeffreys is a Mortgage Consultant with Dunwoody Mortgage Services, Inc. and writer for “Blog Pertaining to the Acquisition of a Mortgage to Purchase a Domicile.”  Dunwoody Mortgage Services seeks to provide mortgage brokerage services with the highest standards of service, care, honesty, integrity and value; concentrating on owner-occupied, residential financing.  For more information about Dunwoody Mortgage and available programs, please visit www.dunwoodymortgage.net.