Latest from the Mortgage Blog
Denver Home Sales Remain Strong
The Denver market has remained strong, even during the traditionally slower months of August and September, as families hesitate to move during the time when kids go back to school. It is very nice to see some balance again. This past Spring, we saw an extremely wild market which was not sustainable. Sellers, buyers, Realtors and lenders were losing their mind, trying to keep up. We would see 20+ offers on one home, the day it went on the market, pushing the price up and up. This may seem good for sellers, but it was not, based on my experience, unless the offer was made by a cash buyer. We had more appraisals come in lower than the purchase price, during this Spring, than I had had combined in the past 11 years! In every single case, the seller ended up lowering the price, or the buyer had to put more money down, or a combination of both. It was really the wild west, with showings on homes taking place at 9pm, and the home going under contract the next day. The "wild west" of this Spring was hectic, and fun at times, but not sustainable. The current market we are seeing now still has historically low inventory, but it is more in balance, and is a positive for the health of the market.
http://www.denverpost.com/breakingnews/ci_24224555/denver-housing-market-is-stong-autumn-months
How Will The Government Shutdown Affect Lending And Your Transaction?
http://www.youtube.com/watch?v=A8IDpJk3MEM
Buying After A Short Sale
With the economy and housing market doing what it did since 2008, I am speaking to more and more clients that had a short sale in their past. Here are some guidelines to help during the next pre-approval. HUD has just announced some radical new changes if the short sale was a direct cause of the economy, and banks are still evaluating them. For now, I wanted to share the current (i.e. accepted by all banks) guidelines.
First, it is important to establish the "Completion Date"
1. If the old loan was a Conventional loan, the settlement date, or closing date on the HUD-1, is the “completion date”.
2. If the old loan was FHA or VA, and HUD paid a premium to the lending bank, then the date the premium was paid, is the “completion date”. This is often after the date that everything is signed. Your lender can check on this quickly by doing a CAIVRs search.
Second, we talk about the new financing that the buyer is trying to obtain
If the new financing is FHA, 3 years must pass from the settlement/completion date. There is a small loophole that if the client made no late payments on the old loan, and was relocated to a new state by an employer, and the short sale was due to that reason because the home was underwater, and could not sell, then they can buy right away with a new FHA loan.
If the new financing is VA, 2 years must pass from the completion date. Sometimes exceptions can be made if the short sale was due to relocation while in service, and there were no late payments, I have seen some get approved as soon as 1 year after the completion date.
If the new financing is Conventional, it gets more tricky. A borrower can buy after 2 years with a 20% down payment, 4 years with a 10% down payment, and must wait 7 years for a 5% down payment loan. Borrower must have re-established credit since the short sale, and no late payments.
Call me with any questions at all!
Quick Update On The Effects Of The Recent Floods
Just a quick update for mortgage transactions in areas affected by the floods. FEMA has added Boulder, Adams, Larimer, Weld and parts of El Paso county, to a disaster area classification. Banks are requiring a final appraiser's inspection for homes in these areas, to make sure the home is still in good shape. We just had this happen on a loan closing next week, even after the loan was fully approved last week. We ordered the inspection and had it back in just a few days. So, in the big picture, it is not a big deal, but just wanted to make you aware - we are on top of it!