Introducing HARP 2.0….. HAH!
I thought it would be good time to review a few pieces of the HARP 2.0 program now that it has been up and running for a short time. The HARP 2.0 program has been drastically different for those loans underwritten by Fannie Mae & Freddie Mac. From our experiences the Fannie Mae refinancing has been much easier and more sensible than that from Freddie Mac.
First of all with the lifting of loan to value caps, Fannie Mae HARP 2.0 refinances has only required some of the loans to have an appraisal. Many loans we have done have been run through the automated Fannie Mae engine and not asked for an appraisal with others being asked for. It hasn’t been consistent and there doesn’t seem to have any ryme or reason to the decision. In addition, you can run it a few times and get different findings. But for the most part it goes with the first findings.
When we get those results, we then need to check rates. Investors are adding different adjustments based on the 
combined loan to value so although rates might be 4% for a regular 30 year fixed rate conventional mortgage, it may be 4.25%-4.5% for the new HARP 2.0 refinance. Now I am not saying that’s bad, I am just pointing out what is happening in many HARP refinancing.
As for Freddie Mac, they are all coming back asking for appraisals and to date haven’t come out with a 15 year portion of the program. From what we have seen and heard, very very few 
Freddie Mac loans are being refinanced. Some of the reasons for them being denied are second loans are excessive, balances on credit cards are too high and the systems are not accepting them….period. So if you have a Freddie Mac loan, I think you are up a river without a paddle. If you have a Fannie Mac backed mortgage, you have a standing chance to benefit from a refinance. If you have any questions, feel free to get in touch with me to assist you in any way.
Keith Hoffman #120133
Residential Mortgage Specialist
1st Advantage Mortgage
Lombard, IL.
Mortgage Blog
Illinois offers a few different mortgage programs through their IHDA ( Illinois Housing Development Authority) that I wanted to bring to your attention. In 1967, the Illinois Housing Development Authority (IHDA) was created as a self-supporting authority by the state legislature to finance quality affordable housing across Illinois. They connect qualified Illinois residents and communities with state and federal financial tools to stimulate affordable housing opportunities. And all of this is done by lenders like 1st Advantage Mortgage.
SmartMove Mortgage Products offer affordable interest rates and down payment assistance for borrowers of low to moderate income. These programs are ideal for borrowers who need extra flexibility on sources of income or who have limited funds for down payment and/or closing costs. Here are some things to look at:
- Features
Offers up to $6000 in down payment and closing costs assistance as a 10 year ZERO percent forgivable loan.
Maximum LTV’s from 96.5% to 100%.
FHA/VA/USDA & Conventional insured products are available.
Fixed rate with terms to 30 years.
Reduced mortgage insurance requirements on conventional loans. - Mortgage Insurance
Mortgage insurance requirements are about 1/3 less than other conventional programs.
80.01-85.00% LTV Ratio…….6% coverage
85.01-90.00% LTV Ratio……12% coverage
90.01-95.00% LTV Ratio……16% coverage
95.01-97.00% LTV Ratio……18% coverage
Permitted subject to availability are single premium and split premiums along with monthly borrower paid premium. - Qualifications
Minimum credit -620 FHA/VA/USDA, 660 for conventional loans.
Maximum total debt ratios allowed are 45% back end.
Buyer must contribute 1 percent or $1000 of the purchase price, whichever is greater
First Time Buyers or qualified exemption.
There are household income limits so please check with us for the amount allowed in your area.
Home ownership counseling is required.
If you or anyone you know would like to take advantage of these loan programs for their next home purchase, please contact me. I can qualify you for this or any other loan program available that will your individual needs. 1st Advantage Mortgage is an approved IHDA lender in the state of Illinois.
Keith Hoffman #120133
Residential Mortgage Specialist
1st Advantage Mortgage
Lombard, IL.
Mortgage Blog
Everyone is talking about the elections. This year Super Tuesday falls on March 5th when 10 states will hold primaries to offer 410 delegates or 17.9% of the state votes including contests in: Georgia (76), Idaho (32), Massachusetts (41), North Dakota (28), Ohio (66), Oklahoma (43), Tennessee (58), Vermont (17), and Virginia (49), along with Alaska’s two-week-long caucuses, Mar. 6–24. But with early voting taking place in many states, more and more people will be casting their votes for their favorite or at least against their least favorite candidates.
As for me, I have already made my choices. Early voting is available in Downers Grove so as I value my time, I took a few minutes the other morning and sent my messages to the politicians. For me voting is done for this primary. And now I look forward to Super Sunday! And you are asking yourself what is Super Sunday. Well let me tell you, its Sunday March 11th ( Selection Sunday) when the NCAA announces their teams for the NCAA basketball tournament or better known as “March Madness”. That is what I am am waiting for.
Each year more productivity is lost in businesses during this tournament than any other time of the year, including sick days. People are tuning out of work and into the computer watching their teams either slip into the next round or fall by the wayside while others leave work early to watch the games at a local establishment. With the new expanded format to 68 teams, games will be starting even earlier than Thursday. With the opportunity to have a team enter a short field of 4 with the ability to be placed into the 64 team brackets, smaller schools that may be strong now have the ability to join the dance.
This year I have chosen a few teams I think will be strong in the tourney. My top 6 are Kentucky (young but good), Syracuse, Kansas, North Carolina, Missouri and Georgetown. I know 4 of the six will probably be top seeds but a few of these teams may just show up and do some damage. I am not a big proponent of the Big Ten this year. Michigan, Ohio Stae and Michigan State have beaten up on each other and tied for the conference title. In my opinion we will see one of these three go far into the tournament and looking at how they have played, it may be Michigan State. Tom Izzo always has the boys doing well in March.
Some of my sleepers will be Marquette, Creighton, Indiana, San Diego State and the late coming Iowa State Cyclones. So like many of the basketball fans who will be taking to the tv’s for this coming event, I will be routing on my teams in my pools and hope to see some fantastic basketball.
So who is your vote for Super Sunday? Did you enter a pool or just have a favorite team to win it all? Let us me know BEFORE the the tournament starts. Mine final teams if the brackets work out will be Kentucky and North Carolina.
Good luck to you all!
Keith Hoffman
Residential Mortgage Specialist
1st Advantage Mortgage
Lombard, IL.
Mortgage Blog
No one likes to spend all their precious time off on the weekends running around and fixing those small items that have made your home into something t wasn’t. Weekends are for enjoying hobbies, visiting with friends and relaxing from your hard work week. That is why I have decided to read up and share a few articles that may help you do some of those needed household chores but leave time for the pleasures in life.
The first is an article that was in Yahoo “12 quick fixes for your household things – Yahoo! Shopping. These simple 12 things each can be done if needed in 15 minutes if you really put your mind to it. Now mind you I don’t spend all my time watching shows like This Old House or House Hunters, but I do recognize the need to have things kept up in the house. This article “23 Quick Fixes” offers some great tips for home repairs and making things just right for all homeowners. And for those of you who are environmentally conscious, DoYourPart.com has a great article called “Save Money and Energy with Quick Home Fixes”. 
If you are looking to save more money on making your home more energy efficient, this is the article and short video to watch. So in the long-run you will not only save energy, you will save money. And for those of you who are expecting guests and need to make a quick fix to cover up things, “9 Home Fixes to Fake” is an article from Good Housekeeping that might help.
There are many things you can do without calling the handyman. You just need to spend a few minutes ahead of time to see what needs to be done and what you can do economically to fix it. Whether you are listing your home, getting ready to list a home or just living in your humble abode, take a few minutes and plan what you want to do. That should still leave you some time to smell the roses and enjoy your life.
Keith Hoffman
Residential Mortgage Specialist
1st Advantage Mortgage
Lombard, IL.
Mortgage Blog
On November 8, 1971, writers guitarist Jimmy Page and vocalist Robert Plant had Led Zeppelin release the well now well know song “Stairway to Heaven”. Not speaking today about religion or heaven, many of the words today can relate more to the mortgage business.
“Yes there are two paths you can go by, but in the long run there’s still time to change the road you’re on”. Many people are renting or not making the needed changes to 
move forward in purchasing a home. Housing prices are down as well as historic low mortgage rates. And there is “Sometimes words have two meanings-oohhh it makes me wonder”. AAHHH, the fast talking, two headed, tongue twisting mortgage people who try and direct you into what may not be right for you and you end up taking the stairs on the right instead of the stairs on the left.
Good mortgage information is important. Maybe one of the most important pieces of information you will need when it pertains to your financial future. Be sure when you are dealing with your mortgage specialist, they have been in the business a long time, are knowledgeable of not only the trade but are up to date on the laws and be sure they can deliver what they promise.
Today’s underwriting guidelines have been more tedious than in the past. The phrase “dot your I’s and cross your T’s” means much more these days. We need to document much more activity in your financial picture while practicing the in’s and out’s of our business. With rates below 4% and the new HARP 2.0 program coming out 3/17, all good mortgage professionals will continue to be busy. Bear with us all while we take you to your Stairway to Heaven. And check out these mortgage calulators if you need to.
Keith Hoffman
Residential Mortgage Specialist
1st Advantage Mortgage
Lombard, IL.
Mortgage Blog
Our US economy is a mixed bag of numbers. Home prices down, housing starts up, producer prices down and productivity mixed. What I can figure out from this is that we are definitely not sure where interest rates will be going. The one thing I do know is that they are historic lows. For those who really are interested CLICK HERE for an in-depth picture of from the Bureau of Labor Statistics.
I was looking at base rates (rates for mortgages without added adjustments) on Monday and here is what they looked like. 
30 Yr. Fixed – 3.875%
20 Yr. Fixed – 3.750%
15 Yr. Fixed – 3.125%
10 Yr. Fixed – 3.125%
FHA 30 Yr. – 3.750%
With this in mind if you are considering doing something in regards to either purchasing a home or refinancing an existing home, now is the time. And with the new HARP 2.0 program being implemented, many more people who couldn’t refinance before may be eligible to do so now.
I will be on a company trip for the next week so I will be skipping my twice a week blog until the week of Feb 27th. So until then have a great week and take a minute to look at your personal mortgage needs.
Keith Hoffman
Residential Mortgage Specialist
1st Advantage Mortgage
Mortgage Blog
During the 1/24/2012 State of the Union Speech by President Obama, one of the hot topics that was the in his proposal was to help homeowners save their mortgages:
Proposal to help homeowners save on their mortgages
“I’m sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage, by refinancing at historically low rates. No more red tape. No more runaround from the banks. A small fee on the largest financial institutions will ensure that it won’t add to the deficit and will give those banks that were rescued by taxpayers a chance to repay a deficit of trust.”
Lets look at the number of people this MAY HELP.
There are about 110 Million Households in the United States of which
- 35 Million rent homes
- 30 Million own their homes Free & Clear
- Leaving about 50 Million of which 40 Million are not under water on their mortgages or have refinanced and,
- 10 Million who MAY BENEFIT from this bailout like program.
These numbers are rounded so the math doesn’t actually add up exactly. So if you are someone like myself who looks at numbers all day, this has a 5 million varience within the numbers shown. These were taken from David Stockman, former director of the OMB.
Here is a great short 6 minute video that was shown on Yahoo Finance online.
http://finance.yahoo.com/blogs/daily-ticker/obama-refi-plan-another-bank-bailout-stockman-says-131457764.html. It features an interview with David Stockman, former director of OMB (Office of Management and Budget | The White House). It really speaks for itself.
Mortgage rates are at all time lows. I am not sure that having the government impose things into the system they once urged to create stated or no docs loans in the Clinton administration, should be a part of trying to fix the problem. It looks like the President wants to move more to socialism, Stay tuned for newer updates to come!
Keith Hoffman
Residential Mortgage Specialist
1st Advantage Mortgage
Mortgage Blog
Mortgage applications are not quickly becoming a thing of the past. In fact according to the MBA – Mortgage Bankers Association, applications last week were up 7.5%. “In the 
first seasonally adjusted basis of February 2012, the Refinance Index increased 9.4 percent from the previous week.”, as seen in an article from MReport.com. “The seasonally adjusted Purchase Index merely increased 0.1 percent from the last week, while the unadjusted Purchase Index increased 6 percent in comparison to the previous week. This was reportedly 4.1 percent lower than the same week a year ago.”
The majority of these applications were done by homeowners who either wanted to 
reduce their payments or reduce the length of time on their mortgage. With interest rate hovering around 4% for a 30 year fixed rate or 3.375% for a 15 year mortgage, more homeowners are taking advantage of the low low rates.
If you haven’t taken advantage of the low rates check into it. Even with home values that have declined, there are many programs that allow borrowers to refinance. Or if you in the market to purchase a new home with the assistance from a licensed real estate professional, get pre-qualified from your mortgage specialist and start shopping for your new home. In either case do your homework. Talk to the mortgage professional first. Then you can create your game plan and move ahead. Here are mortgage calculators to get started.
Keith Hoffman
Residential Mortgage Specialist
1st Advantage Mortgage
Mortgage Blog
We all know home values have dropped across the country. It is a fact and that won’t go away. But for many who were able to refinance there were huge savings. According to Freddie Mac, nearly 85% of those who did refinance either took cash out and kept their payment the same or reduced or refinanced into the same or lower time frame and also saved.
In this report, 49 percent of borrowers slashed their principal payments by refinancing at current rates, compared with 37 percent 
who preserved their payments. According to Freddie Mac Vice President and chief economist, “Savvy homeowners are taking advantage of some of the lowest fixed-rates in more than 60 years to lock in interest savings.” So-called “cash-out” borrowers – those who upped their loan balances by at least five percent – accounted for 15 percent of all refinance loans, the lowest percentage in the 26-year history of the GSE’s analysis.
As an example of this savings, a couple who bought a home 2 years ago had a mortgage balance of $250,000 at 5.75% is paying about $1493 per 
month in principal and interest. Today they would refinance a new loan of about $243,400 at 4% with a payment of about $1160 per month, saving $298 per month. It doesn’t take a rocket scientist to figure out that is a good deal. If closing costs were about $2000 it would only take them about 6 1/2 months to make that up. And if they took cash out of about $6600 they could still save $265 per month over their present payment.
If you want anymore information on refinanicng in this crazy day and age, just give me a shout. I am here to assist you in anyway I can.
Keith Hoffman
Residential Mortgage Specialist
1st Advantage Mortgage
Mortgage Blog
As a longtime mortgage professional I think I have seen most everything. When I bought my first house interest rates were the highest in history. I was newly married with 2 children and I actually felt good as a young adult to assume a VA loan from the seller at 14% and take a second mortgage of equal amount at 11%, averaging 12.5% for both. Now in hindsight with rates today at about 4% we must have been crazy. But that was a good rate with rates at 18%.
I have always thought that it is a privilege to own a home, not a right everyone has to have. Many people are fiscally responsible but on the other hand so many are not. I am not speaking of those who had 2 income families and now, due to the hard economy, have only one. The ones I have always had a hard time with are those who frivolously racked up excessive debt spending like they have millions and buying a home way above their means. It is not right for those who are fiscally responsible to pay for the many who aren’t. That is where the conversations start. I am sure there are some good points to this new “Obama Refi Plan”.
Yesterday the Obama administration rolled out an ambitious package of benefits, reforms, and structural changes for homeowners who want to refinance their loans and avoid foreclosure. As reported by MReport.com, “The plan would cost anywhere from $5 billion to $10 billion and pay for itself with fees exacted from major financial institutions if Congress moves forward with legislation proposed by President Barack Obama.
As reported by MReport.com “If it makes it into law, the proposal would significantly expand refinancing opportunities for underwater borrowers, shift appraisal responsibilities in distressed neighborhoods to an automated system under the GSEs, and offer servicing reforms he billed as a homeowner’s bill of rights.” This plan would fall under an FHA mortgage plan and “Under new modifications, borrowers with single-family mortgages could refinance their loans through the Federal Housing Administration (FHA) if their FICO scores match 580.”
Now I will tell you that people who have scores as low as 580 are in trouble. Their scores are that low for a reason; bankruptcies, foreclosures, late payments, jjudgements, collections and way too much debt. Now that doesn’t make sense to offer this to those in this credit category. Not at all. But Obama seems to think that everyone should be able to get this loan. Now please don’t misunderstand me when I say this. I do believe people run into life’s troubles and need help. But lets be sure those are the ones who should get the help. I love the new Home Afforbale Refinance Program known as HARP program. They have removed the loan to value limitations that have plagued many Americans with lower values. Now that is good. But lets see where this new program will go.
I am a Rotarian and follow the Four Way Test;
- Is it the TRUTH?
- Is it FAIR to all concerned?
- Will it build GOODWILL and BETTER FRIENDSHIPS?
- Will it be BENEFICIAL to all concerned?
Lets see if this plan will fall into this category before we jump on the band wagon.
Keith Hoffman
Residential Mortgage Specialist
1st Advantage Mortgage
Mortgage Blog
