Thought we were done with subprime mortgages forever?

We aren’t.

Lenders are starting to offer subprime mortgage loans and even the press is starting to notice.  The LA Times ran a story about a couple who had a foreclosure got a subprime loan from a lender above a 10% interest rate and was happy about it.  Just think – how many other people who have recently been through a foreclosure or short sale would be happy about getting a loan right after it? This particular couple viewed it as a “bridge loan” – which can make a lot of sense in a rising real estate market.

Michele and Russell Poland’s credit was shot, but they managed to buy their suburban dream home anyway.

After a business bankruptcy and a home foreclosure, they turned to a rare option in this era of tightfisted banking — a subprime loan.

The Polands paid nearly $10,000 in upfront fees for the privilege of securing a mortgage at 10.9% interest. And they had to raid their retirement account for a 35% down payment.

Most borrowers would balk at such stiff terms. But with prices rising, the Polands wanted to snag a four-bedroom home in Temecula near top-rated schools for their 5-year-old son. By later this year, they figure, they’ll be able to refinance into a standard loan.

“The mortgage is a bridge loan,” said Russ Poland, now working as an insurance investigator. “It was expensive, but we think it’s worth it.”

In the aftermath of the housing crash, there’s no shortage of Americans who, like the Polands, are eager to rebuild their shattered finances. In response, lenders are emerging to offer the classic subprime trade-off: high-priced loans for high-risk customers.

Before the housing crash, many people would get subprime loans and think nothing of it. Then the housing crash happened and it was blamed on the “bad, bad subprime loans” – which may or may not have been the primary reason for it.

Before the housing bust, a sprawling business arose in subprime mortgages and their cousins, so-called alt-A loans, which were issued to people who had decent credit but did not have to prove income. About $1 trillion in subprime and alt-A loans were originated in 2005 and again in 2006 — more than a third of all home loans, according to the trade publication Inside Mortgage Finance.

But the explosion of mortgage defaults that began in late 2006 vaporized an entire industry of subprime specialists. The Wall Street firms that had bundled the loans into securities soon began to implode as well. Little wonder that loans for the credit-challenged disappeared.

Today’s high-risk lenders differ from those during the housing boom in key ways. These lenders say the new subprime mortgages are actually old school — the kind of loans made in the 1980s and 1990s. In other words, a borrower’s collateral matters, down payments matter, income and ability to pay matter.

If you are in a situation where you have went through a foreclosure or short sale or bankruptcy and are having trouble getting a “standard” loan – maybe it is time to look into getting a subprime loan again – lenders are offering them at reasonable terms and if you have the ability to repay it (good job, stable history, big down payment, etc.) then it may make a lot of sense.

The post Subprime Mortgage Loans Making a Comeback in 2013 appeared first on Arizona Mortgage Team.

If you haven’t heard the terms Obama Refinance or HARP Refinance or anything similar to it, you soon might.  Fannie Mae is ramping up to help all homeowners hear about the HARP refinance program that was first announced by President Obama a couple of years ago because there are still millions of homeowners who can take advantage of the program and save on their mortgage.

Is the HARP refinance program more popular in 2013 than it was in the past? Yes. Because we are now into HARP 2.0 where lenders have expanded the guidelines to let more people participate and be eligible.

And even though there isn’t an official “Obama Refinance Campaign” and the marketing materials that Fannie Mae is getting ready to send out with lenders across the US doesn’t have the word OBAMA on it anywhere … plenty of people still know HARP as the Obama refinance program.

Officially, the Home Affordable Refinance Program is the name of it.

The Obama Refinance Program / HARP Refinance in 2013

HARP 2.0 is now here and plenty of people are wondering about the guidelines. The initial intent of the program was to help homeowners who owe more on their house than it is worth due to falling real estate values – and allow them to refinance into a lower rate.Highlights and some general lender guidelines of the HARP / Obama refinance program include:

• Current mortgage must have been obtained before May, 31, 2009.
• Some lenders have loan to value restrictions, some don’t
• Some lenders have minimum credit score requirements, some don’t
• Some lenders may wave a required appraisal
• 1-4 Family Primary Residence, Second Home, 1-2 Family Non-Owner Occupied, and Condominiums & PUDs are eligible
• Private Mortgage Insurance transfers are allowed with certain mortgage insurance companies
• Most lenders will require that subordinate liens (second mortgages) be re-subordinated
• Most lenders require no late payments in the last 12 months
• Most lenders will not allow a bankruptcy or foreclosure in the last 7 years

Required Benefits

Most lenders will require that in order to do a HARP refinance, you will have to benefit from it in one of the following ways:

• Reduction in the monthly principal and interest payment
• Reduction in the interest rate
• Reduction in the amortization term
• Move to a more stable product, e.g. ARM to Fixed-Rate

Does Fannie Mae or Freddie Mac Own Your Loan?

In order to be eligible for the Obama refinance / HARP program, your loan must be backed by Fannie Mae or Freddie Mac. Both have tools on their websites to see if they own your loan. To see if either one holds your mortgage, you can check Fannie Mae. If they don’t have your mortgage there, then check Freddie Mac.

HARP Mortgage Marketing

If you haven’t heard about the HARP refinance program, you soon will. Millions of pieces of direct mail are soon to be going out to let people know of the benefits of the program and what they can do to qualify.  What the direct mail pieces won’t tell you? That in order to get the best deal, you will want to get a written quote from multiple lenders.  Getting a quote from multiple lenders will get you the best chance to see what each lender can do for you and let you know what your options are. Getting a quote on the HARP refinance program is free and only takes a few seconds. Get started today and get a quote right here.

The post Obama Refinance Program and HARP For Loans Owned by Fannie Mae and Freddie Mac appeared first on Arizona Mortgage Team.

Interest rates can’t stay low forever – they go up and down. When interest rates are down, people get mortgages that are locked in for the term of the loan at a very low rate. What happens when rates go up and people want to sell their house? The buyer may ask about whether or not their loan is assumable. Two of the most popular loan programs over the last few years are the FHA loan and VA loan programs.

Are VA Mortgages Assumable?

In order to find out if VA loans are assumable, the VA manual on loans is the source of the answer. Look in Chapter 5, section 7. From the source:

General Information about Assuming a VA Mortgage

Under certain circumstances, properties that are security for VA-guaranteed loans may be sold even though the loans are not paid in full. Borrowers who sell their properties under these conditions remain liable to VA for any loss that may occur as a result of a future default and subsequent claim payment, unless the property is sold to a creditworthy purchaser who agrees to assume the payment obligation.

Who Can Process VA Assumptions

While procedures for processing requests for assumption approvals previously depended on the date of loan (commitment made on or after March 1, 1988), the new VA Loan Electronic Reporting Interface (VALERI) regulations authorize loan holders or servicers with automatic authority to determine creditworthiness on all assumption approval requests processed by their servicers.

VA Mortgage Assumption Review Procedures

Transfers of ownership on properties securing loans for which commitments were made on or after March 1, 1988, must have the prior approval of the loan holder or its authorized servicing agent if either of them have automatic authority. If neither the holder nor the servicer has automatic authority, the servicer must submit a credit package to VA for underwriting. The following subparagraphs describe processing details. A seller must apply for approval of the transfer prior to completing the sale. Servicers and holders with automatic authority must examine the application to assess compliance with the provisions of 38 U.S.C. 3714. VA will make the determination in a case where neither the servicer nor the holder has automatic authority, following receipt of a complete application package from the servicer.

To approve the transfer of ownership:

• The loan must be current or will be brought current at the closing of the sales transaction,
• The prospective purchaser of the property is creditworthy, as determined in accordance with 38 CFR 36.4840 and VA Pamphlet 26-7, Lenders Handbook, and
• The prospective purchaser has agreed to assume all of the loan obligations, including the obligation to indemnify VA if a claim is paid.
• A processing fee may be collected in advance, including a reasonable estimate for the cost of the credit report. The maximum fee for processing a request for assumption approval and changing the loan records is the lesser

of:

• Automatic authority – $300 plus the actual cost of a credit report;

or

• No automatic authority – $250 plus the actual cost of a credit report; or any maximum prescribed by applicable state law.

Note: VA does not specifically regulate when the processing fee may be assessed. However, when the processing fee is collected prior to signing the sales contract, the portion of the fee attributable to changing the servicer’s records (usually $50) must be returned to the seller if the application is denied or the process is not completed. Therefore, VA recommends that the processing charge accompany the complete package.

VA Assumable Loan Processing Time Guidelines: How Long Does It Take?

Automatic Authority: Servicers or holders with automatic authority must complete the examination and notify the seller of the decision within 30 days after receiving a complete ownership transfer approval application package. Without Automatic Authority: Servicers without automatic authority (where the holder also does not have automatic authority) must submit documents to VA within 21 days after receiving a complete application package.

VA Review: VA has 14 days to complete its underwriting review and notify the servicer of its decision. Servicers have 7 days to notify all parties of VA’s decision.

Note: These time periods may be extended by the time lost if delays are beyond the servicer’s control, such as employers or financial institutions not responding to requests for verification or follow-up requests.

Decision Notices

Approvals: If the application for ownership transfer is approved, the servicer must notify the seller and include instructions for the assumption of liability by the purchaser, the amount of funding fee that must be paid, and documentation needed to complete the process.

Disapprovals: If the application is disapproved, the seller and purchaser must be notified. The disapproval notice must include:

• The reason for the decision and a notice that the decision may be appealed to VA within 30 days
• The VA address to which the appeal should be sent, which will be the RLC that has jurisdiction over the state where the property is located, and
• If the application was disapproved for credit reasons, the purchaser must be informed of the basis on which the adverse decision was made in accordance with the Fair Credit Reporting Act.
• If the application remains disapproved after 45 days (to allow time for appeal and review by VA), the $50 fee for changing the account records, if previously collected, must be refunded.

Yes, VA Mortgages Can Be Assumable

The short answer is yes, VA mortgages may be assumable if approved by the lender. If you are interested in assuming a VA loan be sure to get a quote on a new VA mortgage from multiple lenders so that you have all of the information needed to make the best financial decision possible. Get a free quote on a VA mortgage today.

The post Can You Assume a VA Mortgage Loan? appeared first on Arizona Mortgage Team.

Searching for the best refinancing company in AZ? It’s a good time. Rates are low are there are plenty of lenders who are actively lending money. Just a few of the popular refinance programs that lenders are seeing a boom in when rates are low are the:

• FHA streamline
• VA streamline
• Jumbo refinance
• USDA refinance

Of course there are others, but those are just a few of the ones that lenders are doing. Loan officers are busy with all kinds of different clients who want to refinance their mortgage to save some money – because even a 1% drop in your mortgage rate can possibly mean hundreds on your mortgage payment.

Getting The Best Deal on Your Refinance

Getting the best deal on your refinance (no matter what program you are wanting to do) isn’t really all that hard to do – all you need to do is shop around. In the old days, to shop a lender you would need to open the yellow pages, find the mortgage section and then pick up the phone and call as many lenders as you could stand to talk to. Now with the internet, you can easily get multiple quotes from lenders in Arizona who are local and can help you with your refinance.

Simply choose a few lenders who have updated their rates daily and see which one can give you the best overall deal when it comes to mortgage rates and fees and turn times.

The post Best Refinancing Company in Arizona appeared first on Arizona Mortgage Team.

Quite a few people seem to be searching for more information on “Obama Refinance Program in 2013″ and based on the amount of times I see the media talking about it and calling the HARP refinance program the “Obama refinance”, it doesn’t really surprise me.

But is there a refinance program called the “Obama Refinance Program”?

Not officially.

The official name of the Obama refinance is the Home Affordable Refinance Program – but still quite a few people call it the Obama refinance and lenders have now gotten used to the idea that people will call them up and ask for more information about the Obama refinance.

The Obama Refinance Program: HARP Refinance

The HARP refinance program was designed for homeowners who owe more on their house than it is worth due to falling real estate values to be able to take advantage of lower interest rates and refinance and save money. Highlights and some general lender guidelines of the HARP / Obama refinance program include:

• Current mortgage must have been obtained before May, 31, 2009.
• Some lenders have loan to value restrictions, some don’t
• Some lenders have minimum credit score requirements, some don’t
• Some lenders may wave a required appraisal
• 1-4 Family Primary Residence, Second Home, 1-2 Family Non-Owner Occupied, and Condominiums & PUDs are eligible
• Private Mortgage Insurance transfers are allowed with certain mortgage insurance companies
• Most lenders will require that subordinate liens (second mortgages) be re-subordinated
• Most lenders require no late payments in the last 12 months
• Most lenders will not allow a bankruptcy or foreclosure in the last 7 years

HARP Refinance Requirements

Each lender will have slightly different rules about what you need to do in order to qualify for the HARP refinance, but generally speaking, lenders will make sure that you benefit from the transaction in order for you to do it. Generally speaking, lenders will require that you benefit in one of the following ways:

• Reduction in the monthly principal and interest payment
• Reduction in the interest rate
• Reduction in the amortization term
• Move to a more stable product, e.g. ARM to Fixed-Rate

First Step: Find Out Who Owns Your Loan

The easiest thing that you can do before speaking to a lender to see if you qualify for the HARP program is to first find out who owns your loan. If your loan is not owned by Fannie Mae or Freddie Mac, then you will not be eligible for HARP. Both have tools on their websites to see if they own your loan. To see if either one holds your mortgage, you can check Fannie Mae. If they don’t have your mortgage there, then check Freddie Mac.

Shop For The Best Rates

The single best way to save money when doing the Obama refinance is to shop multiple lenders. Shopping multiple lenders will make sure that you have the best chance to get the best rate and lender fees and close your loan in the shortest possible timeframe. When you shop around, you might be surprised at how much money you can save from one lender to the next. Any number of lenders are helping people with the HARP program – and you can easily see the differences in lenders pricing when you shop more than a couple.

Get started here with a free HARP / Obama Refinance quote today!

The post 2013 Obama Refinance Program aka HARP appeared first on Arizona Mortgage Team.

When rates are low, many people want to refinance. And for those people who are in a FHA loan, the FHA streamline program is something that they can take advantage of to help lower their rate and decrease their overall mortgage expense. Bank of America is one of the largest lenders in the US and they have plenty of people who currently make their payment to them each month – AND – they do a decent job of alerting their customers to the possibility of being able to refinance.

Bank of America FHA Streamline: What You Want To Know

The first thing that you want to know is that just because you currently make your payment to Bank of America doesn’t mean that you have to use Bank of America for your FHA streamline refinance. When you have an FHA loan, you can use anyone you want as long as they are an FHA approved lender. The way the FHA programs work are that if you want to get an FHA loan, any FHA approved lender can help you get a new loan – regardless of who currently has your loan.

The Key To Saving Money

The key to saving money when thinking about the FHA streamline program is to shop around! The more lenders that you get a written quote from, the more chances you have to get the best possible deal on your streamline. Getting a quote is easy, but make sure that you get your quote in writing. If it isn’t in writing, chances are that it isn’t valid. Also, know that rates change every day – sometimes multiple times each day – so be sure to shop lenders in a short time period and keep the amount of time that you shop to a minimum so that you can lock in the best possible rate.

Start right here – get a free FHA streamline quote today!

The post Bank of America FHA Streamline Refinance appeared first on Arizona Mortgage Team.

A simple story from someone who was interested in a VA loan:

“If you have served in the Military, you are able to apply for a VA home loan. This is a very good option and a great way to get into a home. This is the route that we took in order to get into our first house.

When we applied for a home loan we knew that we would not be able to bring much to the table. With a VA mortgage you really don’t have to have a lot of extra money to get your loan. In the end we only spent about $500 during the whole process.

We knew that if we were able to get a VA loan that we would be able to get a better mortgage rate. Since VA loans are backed by the government, banks charge lower interest rates on them. This is very important if your credit score is not ideal.

Although you can get a VA loan with a lower than average credit score, they do have a cut off. Most banks want you to have a score over 620. If your score is lower than that you will most likely have to work on it a bit before you can get a loan.

The VA can be a bit picky when it comes to homes that need repair. It would be best to find a Realtor who is familiar with VA loans. They will be able to point out if there might be an issue with a particular house getting approved.

I think the reason we had such a good experience with our VA loan was partly because our Realtor knew what was acceptable to the VA and what wasn’t. She pointed out when she thought something in a house we were looking at would cause an issue when the VA came to approve the house. The house we ended up buying didn’t have any issues and passed the VA inspection without any problems.

This doesn’t mean you can’t buy an older house with a VA loan. You just need to be aware of what they are looking for and what you and your budget would be able to fix if need be. It would be frustrating to find out the house of your dreams won’t be approved and that you can’t afford to fix what they need you to fix.

If there is anyway you can qualify for a VA loan, I would suggest you go that route. It will be the easiest way for you to achieve a home loan and get into your own house. It will most likely be a better choice for you than going with a conventional loan.”

Are you interested in a VA loan? Find a loan officer at a VA approved lender who can help you today.

The post Why A VA Loan Makes Sense appeared first on Arizona Mortgage Team.

If you live in Arizona and are wanting an FHA loan, the mortgage insurance premiums are about to change. Here are the changes to the FHA mortgage insurance premium that goes into effect for FHA case numbers issued after April 1, 2013.

In addition to the increases in the FHA UFMIP listed above, there are a couple of other changes to the FHA loan program as well.

It used to be that FHA would have a candellation policy where you could get the FHA mortgage insurance cancelled when the outstanding principal balance reached 78 percent of the original loan balance. Starting April 1, FHA has changed the rules and homeowners will now be required to pay mortgage insurance for the life of the loan.

Getting a jumbo FHA loan will also get more expensive – FHA is raising the down payments for FHA jumbo loans from 3.5 to 5 percent (although this won’t impact AZ – it will impact CA and other high-cost areas).

If you have a credit score below 620, FHA will require that the lender manually underwrite the loan. This doesn’t mean that you won’t get approved for an FHA loan if you have a credit score below 620, but you can expect it to get much harder.

If you are in the market for an FHA loan, the good news is that it is still one of the best loan programs out there for people who need to get a mortgage. The bad news is that regardless of what lender you choose to work with, guidelines just got harder (making it harder to get a loan) and if you do get approved, it also just got more expensive.

The easiest way to get approved for an FHA loan is to shop lenders and get the lowest rates and fees while getting approved today.

The post FHA Mortgage Insurance Changes 2013 appeared first on Arizona Mortgage Team.

Thinking of refinancing?

You’re not alone, many people are looking to refinance with an FHA Streamline Refinance Program and they all have similar questions. There has never been a better time to utilize the benefits of an Arizona FHA Streamline Refinance program.

You can benefit from;

• Lower Interest Rates
• Lower Mortgage Insurance
• Lower Monthly Mortgage Insurance Premiums

Everyone is aware of the FHA Streamline Refinance Programs available in Arizona. What most borrowers don’t know is that Mortgage Insurance Premiums are changing. Mortgage Insurance is a requirement for eligibility for an FHA Streamline Refinance loan. Find out about changing interest rates too.

Information regarding the changing in guideline requirements are sometimes hard to locate. The U.S. Department of Housing and Urban Development, also known as HUD, has always required borrowers to pay up-front mortgage premiums.

Click Here to Get a Free Mortgage Rate Quote

Requirements for Arizona FHA Streamline Refinance

Raising Your Loan to Cover Closing Costs

HUD unfortunately, cannot allow you as the borrower to increase your balance on the new FHA Streamline Refinance Loan without first getting an appraisal. The amount of your new loan must not exceed the principal balance of your old loan. Easiest way to get around closing costs is to either be credited from your loan officer or simply pay cash.

Credit Checks & Credit Scores

Lenders have different interest rates based on whether or not you are credit qualified for an Arizona FHA Streamline Refinance loan. Ask your loan officer for details pertaining to whether or not there is a difference between the two.

The majority of lenders in Arizona will most likely require a minimum credit score for an Arizona FHA Streamline Refinance loan. The most commonly known score lenders typically start at is right around 620, some lenders may have an even lower credit score requirement, but some lenders may have an exceedingly higher credit score requirement. Some lenders may offer FHA Streamline Refinance loans with no credit score requirement at all.

Net Tangible Benefit Test

Every Arizona FHA streamline refinance loan has to pass something called the “Net Tangible Benefit Test”.  The Net Tangible Benefit Test simply shows the lender whether or not your request for the loan is realistic. The main purpose of the Net Tangible Benefit is to get an idea as to whether the borrower will benefit from the transaction or not. Mortgage lenders don’t want to put their financial institutions at risk. The Net Tangible Benefit Test simply means that the benefit of doing the transaction is greater than any costs that are associated with the loan. One of the main requirement is that the principal amount, the interest and mortgage insurance portions of your new monthly mortgage payment must be lower than your previous mortgage payment by 5% or more.

Making Your Monthly Mortgage Payments

It’s very important to make all your payments, and even more important the make them on time. To be considered eligible for an Arizona FHA Streamline Refinance program, lenders require that you have 12 consecutive months worth of on-time payments towards your current loan.

Borrowers can save a significant amount on their mortgage payments and lower their interest rates, it all starts with the right lender. Shop around for a good lender, you might be surprised to find not only differences in lenders rates and fees, but also in their expertise and customer service.

The post Arizona FHA Streamline Refinance in 2012 appeared first on Arizona Mortgage Team.

VA and FHA Home Buying Tips

There has been a recent downturn in the real estate housing market but that can mean great deals for buyers. More houses on the market with less buyers means that the buyers have the advantage. This article can help you find the advantages of home buying and help you to be able to find the house you have always wanted, at a price you can afford.  Click Here to Get a Free Mortgage Rate Quote

• Home Buying Advice You Need To Know
• What’s The Hype About FHA Loans
• What is a VA Loan

Home Buying Advice You Need To Know

Searching for a new house can be a difficult task. Remembering to take pictures of the properties you see will help with the process. Keep the pictures in a folder, with notes stating what you like and dislike about the homes. The folder will serve as great material to refer back to when making your decision.

To make the best purchase decision when buying real estate you must consider what it will be like to live there for 10 or more years. Look at where the trend of the neighborhood is going and is the house laid out to hold a larger family if yours expands during that time.

When you’re choosing a home, don’t think of it as an investment whose value will appreciate. Select a home because it’s a desirable place to live, not because you hope to make a killing off of it. If you think of your house as a home first and foremost, you’ll be happier in the long run.

When making an offer to purchase a home, consider offering more “bottom line” money but ask the buyer to pay some of your fees or add in an insurance contract. This is because your offer sounds higher to the seller so they will be more likely to accept it; however, you still save money.

If you have a vague idea of how much house you can afford, start saving the money that you would have used for the monthly mortgage, and do not use this money for anything else. This will put the real affordability to the test. It is better to find out now rather than later if you can keep up with the house payments.

What’s The Hype About FHA Loans

Don’t allow the loss of your foreclosed home to destroy your dream. Although a foreclosure can stay on your record for as much as seven years, FHA, Freddie Mac and Fannie Mae usually require a minimum of only three years before they’ll help with another home loan. That’s assuming that your foreclosure was due to things like illness, job loss or relocation. You may be asked for as much as a 20 percent down payment and a somewhat higher interest rate.

Before you purchase a home, you should read the government housing and urban development websites to see if you qualify for any of their assistance. Remember FHA and other programs exist to let people like you purchase their first home. Even if you don’t qualify, you may be able to help your friends.

What is a VA Loan

Veterans of the armed forces should consider taking advantage of a VA loan when purchasing their next home. VA loans offer no down payment options, and all closing costs can paid by the seller. There are capped points on a VA loan as well, and another veteran can assume your loan when it’s time to sell.

In Conclusion

While it is true that the housing market has been in a downward trend, that isn’t bad news for everyone. The people who can benefit can be the wise buyers, the ones who didn’t buy when real estate was such a hot property. By using the advice in the article, you can find a great house at a bargain price.

The post VA and FHA Home Buying Tips appeared first on Arizona Mortgage Team.