Breaking News
As you know, I am committed to bring you the most- updated, must-know information on mortgage and industry changes. I have hesitated in sending the following news as it is not “set in stone” yet. However, in having conversations with many of our referring partners I think that we need to let you know the latest:
There are five major servicers in the Industry (along with a number of minor players). Typically in our market and the time we are in, the five major players set the rules and the rest follow suite. In the past few months two of the major servicers have increased the minimum FHA credit score from 620 to 640. As of Monday, Bank of America (obviously one of the five) announced that they, too, will increase to a minimum of 640 effective 10/4/2010. We have two of the major servicers still holding at 620 but our sources are telling us that they could go to 640 within the next few weeks.
What does it mean to you? Right now we are still at 620, but there is a very good possibility that 640 will become the new 620 in the weeks to come (and probably sooner than later) for FHA. So this is a Call To Action - Your current buyers that have lower credit scores (between 620-639) need to look at purchasing NOW. This change could take them out of the market in the near future to be able to purchase a home unless they can increase their credit scores to 640.
Get the word out, send this to your clients, call everyone you know- this IS Breaking News and we owe it to our buyers to let them know. With historically low interest rates, 620+ credit scores allowed, and great inventory- NOW is the time to purchase!
As always, we would love to hear from you this week and are never too busy for your calls and questions! Simply contact us at 972-278-3400 or email us at ldavidson@servicefirstmtg.com . Have a blessed rest of week! Remember that we are open on Saturdays from 10:00 AM -4:00 PM for your prequals.
Don’t forget to call us this week so we can obtain the FHA case number by Friday 10/1 at 5 PM for any FHA contracts!
Thursday, September 30, 2010
Monday, September 20, 2010
The Davidson Group has placed #1 in Reader's Choice
Exciting News - We received word that The Davidson Group has placed #1 in Reader's Choice for Mesquite AND Rowlett AND Plano AND Frisco Newspapers. Wow... what an honor to be chosen by the newspaper readers in each of these areas! Our McKinney office (Go CJ!) also placed #1 for McKinney. Go Team and let's keep making Raving Fans!
Monday, September 13, 2010
A Did You Know for FHA….
One of the questions that we are asked over and over again is when can a buyer have two FHA mortgages at the same time. In our quest to always be THE source of mortgage information for you… here is the answer:
A buyer cannot have two FHA loans at the same time unless:
1) The second FHA loan is for a primary residence and the old home which has the current FHA financing is not in a "reasonable driving distance to the first one" from the new one. An example would be: First home with FHA financing is in New Mexico and they are being transferred here with their company. Since the first home with FHA financing is not in a "reasonable driving distance" from the next home, the buyer can obtain another FHA loan. Note that they would have to qualify for both payments or a properly executed lease agreement (i.e., a lease signed by the homebuyer and the lessee) of at least one year’s duration after the loan is closed is required. FHA recommends that underwriters also obtain evidence of the security deposit and/or evidence the first month’s rent was paid to the homeowner.
2 ) The second exception of when a buyer can have a second FHA mortgage has two parts (and both parts must be satisfied): A) Current home with FHA must have 25% equity into the home (as per an appraisal) AND (not OR) B) must be able to prove increase of family size (i.e., births of additional children) so that the current home does not now adequately fit the family needs. Note that they would have to qualify for both payments or a properly executed lease agreement (i.e., a lease signed by the homebuyer and the lessee) of at least one year’s duration after the loan is closed is required. FHA recommends that underwriters also obtain evidence of the security deposit and/or evidence the first month’s rent was paid to the homeowner.
3 ) And third exception of when a buyer can have a second FHA mortgage at the same time is if they are non-occupying co-signing for someone. If the non-occupying co-signer already had an FHA loan on their current property and they are Non-Occupying co-signing, that is OK.
4 ) The forth exception would be if a husband and wife are on an FHA mortgage and they get a divorce. The divorce decree specifically awards the home to one spouse. This would release the other spouse (the one not awarded the original home) to obtain their own FHA financing on another home. Note that both parties are responsible to make certain that the payments were made on time up to the time of the legal separation or legal divorce is final.
Obviously in any situation, if a buyer has FHA financing on their current home and it is sold, then that would release them to obtain an FHA loan again.
One of the questions that we are asked over and over again is when can a buyer have two FHA mortgages at the same time. In our quest to always be THE source of mortgage information for you… here is the answer:
A buyer cannot have two FHA loans at the same time unless:
1) The second FHA loan is for a primary residence and the old home which has the current FHA financing is not in a "reasonable driving distance to the first one" from the new one. An example would be: First home with FHA financing is in New Mexico and they are being transferred here with their company. Since the first home with FHA financing is not in a "reasonable driving distance" from the next home, the buyer can obtain another FHA loan. Note that they would have to qualify for both payments or a properly executed lease agreement (i.e., a lease signed by the homebuyer and the lessee) of at least one year’s duration after the loan is closed is required. FHA recommends that underwriters also obtain evidence of the security deposit and/or evidence the first month’s rent was paid to the homeowner.
2 ) The second exception of when a buyer can have a second FHA mortgage has two parts (and both parts must be satisfied): A) Current home with FHA must have 25% equity into the home (as per an appraisal) AND (not OR) B) must be able to prove increase of family size (i.e., births of additional children) so that the current home does not now adequately fit the family needs. Note that they would have to qualify for both payments or a properly executed lease agreement (i.e., a lease signed by the homebuyer and the lessee) of at least one year’s duration after the loan is closed is required. FHA recommends that underwriters also obtain evidence of the security deposit and/or evidence the first month’s rent was paid to the homeowner.
3 ) And third exception of when a buyer can have a second FHA mortgage at the same time is if they are non-occupying co-signing for someone. If the non-occupying co-signer already had an FHA loan on their current property and they are Non-Occupying co-signing, that is OK.
4 ) The forth exception would be if a husband and wife are on an FHA mortgage and they get a divorce. The divorce decree specifically awards the home to one spouse. This would release the other spouse (the one not awarded the original home) to obtain their own FHA financing on another home. Note that both parties are responsible to make certain that the payments were made on time up to the time of the legal separation or legal divorce is final.
Obviously in any situation, if a buyer has FHA financing on their current home and it is sold, then that would release them to obtain an FHA loan again.
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