Utah Real Estate Survival Guide

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Archive for the tag “FHA”

Second Mortgage Won’t Accept The First’s Approval

I am currently representing a Buyer client on the purchase of a Short Sale. The Seller’s first mortgage is a Fannie Mae backed loan with Wells Fargo. The second is with US Bank. This is a traditional short sale, not HAFA.

Wells Fargo has issued their approval, with no Seller contribution at closing or promissory note. They have allocated 10% to the second mortgage, per their investor guidelines, and will permit no more – to the exclusion of additional funds/promissory notes from the Seller or the Buyer that those parties would be willing to bring to the closing table. US Bank has rejected these investor terms.

Now, you’re thinking, “so what’s so unusual about any of this?” What’s my point?

My point, a question really, relates to the listing agent’s ethical responsibility given this situation (per the Realtor Code of Ethics). Since the second mortgage has rejected participation in the short sale, shouldn’t the listing be removed from the MLS? Or is it acceptable to let it languish, as part of an already bloated inventory, until it dies a natural death as an expired listing?

I’m looking forward to reading your comments. Please post!

Kim Novak, RE/MAX Masters
kimnovak@remax.net
(801) 726-1443

Refi and Rent Out to Buy New? What Not to Do …

Buying a new home and renting out the old one Realty Q&A – MarketWatch. Written By: Lew Sichelman. The author and nationally syndicated columnist is also a contributor to RealtyTimes® and HouseLogic … the latter being a subsidiary of the National Association of Realtors®.

Did Mr Sichelman really write and recommend the following strategy?

“… But the only way you can pull $50,000 out of your present abode is to refinance. And to do that, you’ll have to certify that you will occupy the place. So don’t let anyone in on your plan, especially your loan officer. And don’t buy your next house until the you have the money from the refi in hand.”

Yes, this is loan fraud. Excerpt from HUD’s website page “Don’t be a victim of loan fraud”: Be honest about your intention to occupy the house. Stating that you plan to live there when, in fact, you are not (because you intend to rent the house to someone else or fix it up and resell it) violates federal law and is a crime.

wow

Thanks for reading – hope you’ll share.

Your Realtor®,
Kim Novak, RE/MAX Masters
kimnovak@remax.net
(801) 726-1443

FHA/VA Rates Jump Today

For over a month, FHA and VA 30-year fixed mortgage rates have steadfastly held at 4%. Today, those rates jumped to 4.25%, most likely as fall out over the Fed’s $600 Billion Monetary Stimulus Plan initiated the day after the mid-term elections on Nov 2nd.

As a VA buyer who purchased my first home back in the early ’80’s when the “discounted” VA rate was 12%, and getting ready to refinance my current VA loan at at a 3% 5/1 ARM, I believe that a 4.25% 30-year fixed rate is still kinda sorta really good 🙂

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