Entries from Dan Melson's La Mesa Real Estate and Mortgage Website tagged with 'lender requirements'
New Consumer Article: Changes In The Mortgage Market And Transparency Since 2005
It's been a while because I've been both busy and depressed over dis-improvements in the market and their effects upon consumers, but yesterday I found time to write a new article Changes In The Mortgage Market And Transparency Since 2005....
New Consumer Article: Low Asking Price on Unfinanceable Properties
The new consumer article for today is Low Asking Price on Unfinanceable Properties. Almost always, the reason for an asking price well below other equivalent properties is the presence of some factor that means you cannot obtain a regular real...
New Consumer Article: Automated Underwriting In Pre-Qualification or Pre-Approval Letters
The new consumer article for today is Automated Underwriting In Pre-Qualification or Pre-Approval Letters. Not to put too fine a point on it, automated underwriting is useless until all details of the transaction have been finalized. If you're selling a...
New Consumer Article: Short Sale Negotiators and the Interests of Potential Buyers
The new consumer article for today is Short Sale Negotiators and the Interests of Potential Buyers. An awful lot of nonsense gets tried with short sales, most of it for the benefit of lazy listing agents who shouldn't have taken...
New Consumer Article: They Told Me Not To Make My Loan Payment
The new consumer article for today is They Told Me Not To Make My Loan Payment. Ladies and Gentlemen, that's one of the top ways to get yourself in trouble when you're refinancing. What if your new loan cannot be...
New Consumer Article: There Is No Fairy Godmother for Loans
The new consumer article for today is There Is No Fairy Godmother for Loans. To avoid becoming a government statistic, ask prospective loan providers the hard questions before you sign on the bottom line - or better yet, before you...
New Consumer Article: The Measurement Unit For Desirability Is Dollars
The new consumer article for today is The Measurement Unit For Desirability Is Dollars. It really is that simple. A good agent can make a difference, but a property that has more will cost more. It isn't rocket science, but...
New Consumer Article: Restricted Sale Property: Very Difficult to Find A Loan
The new consumer article for today is Restricted Sale Property: Very Difficult to Find A Loan. Before you make an offer on restricted sale property, know that your financing options are going to be very limited, and being able to...
New Consumer Article: 105% Refinancing With No PMI (Maybe)
The new consumer article for today is 105% Refinancing With No PMI (Maybe). It goes over the straight scoop on Fannie and Freddie's new programs aimed at loss mitigation by helping people who would be able to refinance if values...
New Consumer Article: Shopping For The Best Loan In The New Lending Environment
The new consumer article for today is Shopping For The Best Loan In The New Lending Environment. There have been changes in the lending environment in the last few months, changes that are practically designed to make loan officers with...
New Consumer Article: Who Has A Legitimate Interest In A Real Estate Transaction?
The new consumer article for today is Who Has A Legitimate Interest In A Real Estate Transaction?. This article goes all the way back to first principles to determine who has an interest worth getting hot and bothered over, and...
New Consumer Article: How Agents Should Respond To An Appraisal Below Purchase Price
The new consumer article for today is How Agents Should Respond To An Appraisal Below Purchase Price. The appraisal is a significant client protection, and trying to manipulate the appraisal to make the transaction happen is not in a buyer's...
New Consumer Article: The Home Valuation Code of Conduct (New Appraisal Standards)
The new consumer article for today is The Home Valuation Code of Conduct (New Appraisal Standards) that are going to be taking effect (appropriately enough) on May 1 ("May Day" or "MAYDAY"). It is going to be almost impossible for...
New Consumer Article: What Are The Note And Trust Deed And What Is The Difference?
The new consumer article for today is What Are The Note And Trust Deed And What Is The Difference?. This is a basic article on the differences and relationship between the two documents; one that documents the debt and one...
New Consumer Article: Loan Fall-Out And The Effects Upon Consumers
The new consumer article for today is Loan Fall-Out And The Effects Upon Consumers. The days when loan officers are willing to lock loans with just a social and the identity of the property are ending, if not already over....
New Consumer Article: The Difference Between a Reliable and Unreliable Prequalification or Preapproval Letter
The new consumer article for today is The Difference Between a Reliable and Unreliable Prequalification or Preapproval Letter. Whether you're a buyer or a seller, having the right lender letter is a good thing. If you're a seller, you know...
State of the San Diego Real Estate Market March 2009
Reminds me of this gold rush movie (one that I recommend watching if you have a chance) Okay, it's not quite like that, but correctly priced properties are flying into "Pending". It has to do with supply and demand. At...
New Consumer Article: Investment Property and Loan Qualification
The new consumer article for today is Investment Property and Loan Qualification. It has become exceedingly difficult to get credit for rental income when you apply for a new mortgage, with the upshot being that when the lender won't agree...
New Consumer Article: Getting A Loan In A Paranoid Lending Environment
The new consumer article for today is Getting A Loan In A Paranoid Lending Environment. Lenders today are over-tightening lending standards in over-reaction to the losses they have taken (which were their own fault), effectively nuking the barn after one...
New Consumer Article: Be Careful Moving Your Down Payment Money
The new consumer article for today is Be Careful Moving Your Down Payment Money. Underwriters want to see a trail on any money you have. If you don't have or can't show such a trail, the presumption is going to...
New Consumer Article: Termite Work, Wood Destroying Pest Agreements, and Lender Requirements
The new consumer article for today is Termite Work, Wood Destroying Pest Agreements, and Lender Requirements. If you know about work that needs to be done, concealing it from the buyer's lender is fraud. Lots of agents are putting their...
New Consumer Article: The Hope (Dashed) For Homeowners Program
The new consumer article for today is The Hope (Dashed) For Homeowners Program. I really thought that most folks understood this was all political theater - unlike the $700 Billion for lenders who screwed up by the numbers, intentionally disregarding...
New Consumer Article: Cash to Close - A Basic Primer
The new consumer article for today is Cash to Close - A Basic Primer. The article discusses how much cash a buyer of real estate has to have in order to make the transaction happen. Proving that you have this...
New Consumer Article: You've Got a Great Offer, But Can The Buyer Consummate It? (Cash to Close)
The new consumer article for the day is You've Got a Great Offer, But Can The Buyer Consummate It? (Cash to Close). These days, you have to pay attention to details like the limits of how much lenders are willing...
New Consumer Article: Mortgage Fraud Is Still Happening - What To Do About It
The new consumer article for the day is Mortgage Fraud Is Still Happening - What To Do About It. There are still tricks that the less scrupulous agents and loan officers are pulling that are just as fraudulent as at...
New Consumer Article: How Much Down Payment Do I Need and How Do I Get It?
The new consumer article for the day is How Much Down Payment Do I Need and How Do I Get It?. The title says it all: How much do you need, and ways of coming up with it in a...
New Consumer Article: Will I Qualify for the Loan to Buy Real Estate During The Market Meltdown?
Today's new consumer article is Will I Qualify for the Loan to Buy Real Estate During The Market Meltdown?, which helps people answer the question of whether they will qualify for and be able to get a loan during the...
What Sort of Loan Can I Get? (October 2008)
Having had two separate very qualified buyers ask me if they could get a loan in the last two days was kind of an eye opener to all of the hype out there about how difficult it is to...
New Consumer Article: When Loan Modification Will Not Help, or Is Not Appropriate
Today's new consumer article is When Loan Modification Will Not Help, or Is Not Appropriate, in which I write about the major situations where trying for a mortgage loan modification will not help you....
New Consumer Article: How Loan Modification Benefits The Real Estate Markets
Today's new consumer article is How Loan Modification Benefits The Real Estate Markets, in which I discuss the benefits that everyone, even those who aren't in trouble, get out of the loan modification program. A lot of people get upset...
New Consumer Article: Mortgage Loan Modification
Today's new consumer article is Mortgage Loan Modification, in which I discuss the basics of a program that lenders are cooperating with that keeps people in their homes and prevents the lender from losing money they don't have to. I...
New Consumer Article September 9, 2008
Today's new consumer article is Personal Loans For A Real Estate Down Payment, which discusses an uncommon but doable alternative for rapidly acquiring a down payment. It has significant downsides even if done correctly, and if you do it wrong...
New Consumer Article September 5, 2008
Today's new consumer article is The State of the Loan Market and How Much You Can Borrow September 2008 (Part II), which discusses the loan market and the state of lender paranoia that currently prevails, and the possible solutions to...
New Consumer Article September 4, 2008
Today's new consumer article is The State of the Loan Market and How Much You Can Borrow September 2008 (Part I), which discusses the loan market and the state of lender paranoia that currently prevails. If you are one of...
New Consumer Article September 3, 2008
Today's new consumer article is What Do Loan Qualification Standards Accomplish?, which talks about the good that having and adhering to standards of qualification does, and the problems it avoids for all concerned....
New Consumer Article September 2, 2008
Today's new consumer article is All Buyer Assistance Programs Require Full Documentation of Income, in which I go over one requirement of all government programs, first time buyer programs, and all other programs where a consumer is getting assistance to...
New Consumer Article August 19, 2008
Today's new consumer article is Loan Qualification Standards: Qualifying Rate and Payment, which talks about how the calculations that determine whether or not you qualify for the loan you apply for....
How Can I Lower The Down Payment Requirements So I Can Buy Real Estate?
With a few lenders starting to loosen their requirements slightly in San Diego, it's becoming increasingly obvious that the bottom is behind us. However, the issue has now become, "I don't have much of a down payment. How do...
Why Do Purchase Escrows Fall Apart? (And Why Is It Happening More Often?)
There have always been real estate transactions that fall apart. The reasons why they fall apart are as varied as the people who enter into the transaction in the first place. Let's get back to the very basics for...
NEWSFLASH! SAN DIEGO DECLINING MARKET DESIGNATOR REMOVED!
I have just gotten an email from one of my wholesalers (who shall remain publicly unnamed) removing the "declining market" designation from San Diego loans! This particular lender is still not willing to do 100% loans, but they will...
The Three Purposes of Real Estate Loans Defined
Purchase Money: This is a loan that enables you, in combination with your down payment, to actually purchase the property. If you spend cash to buy the property and get a loan the next day, that is not a purchase...
What Happens If I Don't Sign Mortgage Documents?
That was a question that brought someone to the site and the answer is very simple: they don't give you the loan. You haven't agreed to pay them, so why should they? There are two major cases of this, one...
The Best Way to Avoid Default and Foreclosure
We got behind on house pymts & it was sent to an attorney for foreclosure.? The attorney has printed a notice in our paper on Oct 9 that it will go up for public action on Nov.16th. We found out...
You Only Need Negative Amortization Disclosures on Negative Amortization Loans
First let me say that I really learned a lot from your postings/articles/website; its awesome that a resource like yourself exists. Now to the problem. I recently refinanced and the mortgage broker lied to me about many, many things....
Loan Assumption and Assumable Loans
Every once in a while, the subject of assumable loans comes up. An assumable loan is one where the owner of a property has the ability to pass the loan along with the property in a sale. In other...
Can a Lender Legally Stop Loan Funding After Signing?
That question brought someone to the site. The answer is "Yes, they can". As a matter of fact, just because they have you sign those documents does not in any way obligate that lender to actually fund your loan. There...
From How Much You Make to A Payment You Can Afford
I'm clueless about how home loans work. Is there any way to figure out how much I can afford to spend per month on a home. If I were to get a home for $(figure) how much would that...
Time in Line of Work for Mortgage Qualification - What Counts?
Question from an e-mail: Hi, I have a question about mortgages. My boyfriend and I are looking to buy a home, and since I have recently quit my job he would be the primary applicant. He makes $44k and we...
Sellers Lending to Buyers and Selling the Note
I am seeking to sell my properties to my tenants. I want to create a mortgage and then sell the mortgages. Properties are undervalued in this area as they have been historically fixer-uppers. Ours are in very good condition...
Can You Get A Mortgage On a Condemned House?
The answer is a modified no. The same answer applies to property that is only structurally damaged, but not condemned. That condemnation is a matter of public record. I've seen any number of them while perusing title records. It shows...
My Sixty Second Public Service Announcement about Buying Real Estate
Here was an idea I had: Pack a list of the most important things consumers need to know about buying real estate, as packed into the words I can say in sixty seconds without sounding like an over-clocked squirrel. Here...
Another Scam: "Negative Equity? Sell and Get Cash!"
Notice that it doesn't claim that you can do so legally. I saw another of these signs on the way to the office this morning. When things are going sour, there are any number of scam artists who will...
Sourcing and Seasoning of Funds
People sometimes ask, "Why should the lender care where I got the money for the down payment? I earned it, it's mine - cash is cash!" They're right as far as they go. In general, the lender doesn't care...
Manufactured, Modular, and Site-Built Homes: How Lending Practices Drive the Sales Market
Many people are unaware how profoundly lending policies influence the market for residential property. So I am going to go over the various gradations in available loans for various types of property. Pretty much everyone is familiar with the standard...
Why All The Fuss Over Real Estate Transactions?
Why doesn't real estate just sell for the asking price instead of having to go thru all the paper work...? Wouldn't it be easier to just put a price on it and sell it for that price? We don't...
New Temporary FHA Conforming Loan Limits Announced!
Got an email alerting me to this fact. The e-mail was gobbledegook as far as making any sense but I went to the FHA home page and they had better information. It appears as if the FHA, through OFHEO,...
Why Do I Have to Pay For The Appraisal When I Cancelled Escrow?
I got an ill-mannered complaint email about how an evil loan officer ordered the appraisal without waiting for the inspection to be done, and it turned out there was a minor problem that the seller likely could have had repaired,...
The Lender's Rules of Mortgage Payments
Every so often, someone who thinks they're a wit sends me a copy of The Rules For Relationships According To Women. Unlike those rules, which might have been funny around the time Nefertiti was a debutante, these rules are real...
The FHA Secure Program - Saving Some Homeowners From Foreclosure
This is a temporary program, launched by President Bush and Congress a few months ago. Its goal is to prevent as many homeowners as is reasonable from losing their homes through foreclosure. It won't help you if you bought...
FHA Loans: Poised for a Comeback
I want to state that I am in no way shape or form an FHA loan guru. I haven't done an FHA loan in years. But with the new developments in the market rapidly transforming FHA loans into being...
Cash Back From The Seller to the Buyer in Real Estate Sales
Yesterday I dealt with a very disturbing phone call from a would be client. He was very happy with the way I found bargain properties, and wanted me to find him such a property. All very well and good. But...
FYI: FHA Loans, FHA Secure, and Down Payment Assistance Programs
FYI, I attended a class on FHA mortgages, FHA Secure and down payment assistance programs this morning. I'll probably have two or possibly three articles in the next week or so. In the meantime, if I can help with a...
What if Your Partner Refuses to Pay Their Share of a Loan or Mortgage (or Won't Pay on Time)?
what happens if partner refuses to pay his half of the mortgage? The lender will hold you each responsible for payment in full. That's the long and the short of it. You both agreed to the loan contract, and...
Loan Cosigners in Real Estate - A Lot of Risk For Not Much Gain
Every so often I get questions about loan cosigners. The main borrowers do not qualify on their own, so they get someone - most often mom and dad - to cosign. Now this is a different thing, or so I...
When The Appraisal Is Below The Purchase Price for Real Estate
what happens when house doesn't appraise? I presume this question meant "for the necessary value according to the lender's guidelines". Lenders base their evaluation of a property upon the standard accountant's "Lower of Cost or Market." This is intentionally...
Loans Not Funded
I got a question about "what does it mean if my loan is not funded after right of rescission?" It likely means your loan provider lied to you, probably from day one. Once you have signed documents, there shouldn't be...
When The Underwriter Makes A Mistake
"challenging underwriters mistakes in housing loan paperwork" was a search that I got. You can't challenge them. Butting heads with an underwriter is stupid and counterproductive. There's only one person who gets a vote, and it's not you, whether you...
Legal Late Payments on Your Mortgage
I got a question about legal late payments in California. Unfortunately, there really is no such thing as a legal late payment. You borrowed the money, signed a contract, and it accrues interest according to that contract. You owe this...
Recording Errors and Title Insurance
I just got a google search where the question asked was "What if the mortgage is recorded in the wrong county?" I've never actually seen this (and San Diego County, once upon a time, included what is now Riverside, Imperial...
Privacy Concerns in Real Estate Transactions
Every once in a while I get someone who is unhappy with required paperwork for privacy reasons. There are three forms that are the driving force behind this. The first is the standard form for a mortgage loan application, known...
Asset and Income Rentals - Borrowing Trouble at Usurous Rates
I found this article by Ken Harney in the paper. WASHINGTON - Call it funny money for the housing boom: Now you don't need actual cash in the bank to buy a house. All you need is somebody who says...
Lenders and Insurance Proceeds
The question that inspired this was can a mortgage company use the flood insurance claim money towards homeowners mortgage loans? This is equally applicable to every other form of insurance on your home - earthquake, regular homeowner's insurance, and any...
Full Circle: Back to More Traditional Lending Standards
I've seen more changes in the lending industry in the last six months than the previous five years. But those changes simply restored us to the place we were a few years ago. Loans are easy to get, rates are...
100% Financing or Low Down Payment or Low Equity: PMI May Be The Only Option
One of the casualties of the current lending meltdown is the high loan to value second mortgage. With many properties locally having lost twenty percent or more of their value, a second mortgage on a property that ends up in...
Mortgages: General Concerns and Manufactured Housing
A mortgage is basically pledging an asset that you own as collateral for a debt. If you default on the debt, the lender takes your property. When you're talking about real estate in the state of California (and many others),...
Relocation Loans and Developer Issues
From an e-mail: I live in (City 1) and recently signed a work order on a semi-custom new construction house in (City 2). My wife and I make a combined 120K income and still can't afford a decent place in...
For Sale By Owner - Working Directly With a Loan Officer
Just got a search on "state of california fsbo questions to work directly with loan officers without a agent" This isn't a problem. Whereas it is the same license, it is two entirely separate job functions. The fact that you...
Approaching the Loan Application Process - What Loan Will You Qualify For?
On of the biggest time and money wasters in real estate is people that apply for the wrong loans - loans that they can never qualify for because they can't meet the guidelines, or can't prove they meet the guidelines,...
Loan Qualification Standards - "Loanbusters"
This is definitely not a "Who you gonna call?" I've done a couple articles in the recent past on the two ratios, debt to income and loan to value. Nonetheless, there exist a plethora of reasons why someone can be...
Buyer's Appraisal versus Seller's Appraisal
My husband and I are currently in escrow with the sale of our home in California. Our buyers have been " difficult" to say the least. The buyers appraisal of our property came in $6,000 below the selling price...
Impound Accounts Facts and FAQs
I've seen a fair number of questions on impound accounts in the last several months. An impound account, also known by the confusing term escrow account because the lender is holding it in escrow, is money that you give the...
The Escrow Process and Reasons for Falling Out
There are all sorts of reasons why escrow falls through, but they fall into three main categories. They can best be described as failures of qualification, failures of the property itself, and failures of execution. Before I get into the...
Straw Buyers and Their Liabilities
Over the last few years, a lot of folks have gotten used to zero real scrutiny of transactions. With values increasing rapidly, it was hard to lose money on real estate, whether you were purchaser or lender. One of the...
The Three Day Right of Rescission
One reason to check your referral logs every day: Sometimes you can find great material for an article. I got one about the three day right of rescission. This is a feature (or bug, depending upon your situation) with every...
Builder Upgrades
What I still am unclear on is the pool and how (in my opinion) it's crazy to finance $40,000 into a mortgage when you *plan* on refinancing in a few years. By *plan* I mean you take out a...
Joint Loans
First off, let me say that your site has been very informative and helpful. I stumbled across your blog looking for information on ARM vs. 30 year fixed loans and ended up reading every article. One issue I have...
Reserves
Thanks again for the terrific posts. I've learned more about mortgages in the past two months than I ever dreamed I might. I am looking to buy my first home soon, and have myself in a good credit position...
Refinancing When You're Upside Down on the Mortgage
I've been looking around for an answer to this but my searches haven't returned anything useful. Say you buy a house and with that house you finance in a pool. House was $210,000 and pool is $40k. $250k mortgage....
Rebates: Be Careful Not to Commit Fraud
With many people pushing various "cash back to the buyer" schemes in real estate, a note of caution is needed. Actually, it's more like an entire symphony of caution. Because if there is a loan involved, you run the risk...
Removing Private Mortgage Insurance (PMI)
"How do I remove PMI?" First off, a definition. Private Mortgage Insurance, often abbreviated PMI, is an insurance policy that the bank may make you buy in order to get the loan. It is a monthly surcharge based upon a...
One Loan Versus Two Loans
One of the questions we ask all the time is whether to do your financing as one loan or two loans. Until comparatively recently, one loan was the default option, but people have been learning that splitting their home financing...
Loan Qualification Standards - Debt to Income Ratio
Many people have no clue how qualified they are as buyers, or borrowers. There are two ratios that, together with the credit score, determine how qualified someone is for a loan. The first, and by far the more important, is...
Real Estate Sellers Giving A Buyer Cash Back
When we sold our home just over a year ago we were talked into selling for a bit more than the original offer so the person could get money back to do renovations... I objected based on percentages and...
Levels of Mortgage Documentation, or, Why You Should Demand to Do More Paperwork
No matter which provider, no matter what type of loan you get, nobody is going to loan you money without the appropriate documentation. The more documentation you have that you are a good risk, the better the rate you are...
An Owner Occupied Loan Does Not Mean You Have to Refinance If You Move Out
I have a landlord, that is always harassing me every 2 weeks, for the past 2 years, on the upkeep of the property, and wants to have inspections. Also want me to mail them all their mail. Most of...
100% Financing: Buying A Home With Zero Down Payment
Is there any program that i can qualify for a home with no down payment? Lots of them. We may not be talking number of grains of sand on the beach or drops of water in the ocean, but...
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