Category: Mortgage Information

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Mike Cathell,
Broker/Owner, Investment Property Consultant

Real Estate Services of SWFL, LLC
Real Estate Services of Citrus County, LLC

Cell:  (239) 770-6250   Fax:  (239) 288-2505
Real Estate Services of SWFL, LLC
#Florida Real Estate     #Cape Coral Real Estate    #Fort Myers Real Estate
#Real Estate Investing   #Property Investments   #Wholesale Properties
#Wholesale Florida Properties  #Commercial Real Estate Funding


Low-Income Housing Goals Set for Fannie Mae and Freddie Mac

Low-Income Housing Goals Set for Fannie Mae and Freddie Mac

The federal agency that regulates the mortgage finance companies Fannie Mae and Freddie Mac on Wednesday set goals for the next two years to nudge them to provide mortgages to more low-income borrowers and to landlords who offer low rents to poor people.

The Federal Housing Finance Agency is required by a 2008 law that took effect after the collapse of the housing market to set annual targets for mortgages bought by Fannie and Freddie, the government-run institutions that back most home loans.

The goals act as directives for Fannie and Freddie to focus more of their business on affordable housing. The companies buy loans from private lenders, package them into mortgage-backed securities and provide a credit guarantee to investors to ensure timely payment.
Some advocates of housing for the poor expressed disappointment that the goals were not more ambitious. But the agency hailed the rules as an important lever for helping more poor families buy homes and for improving access to mortgages for landlords who rent out affordable apartments to low-income tenants in poverty-stricken neighborhoods.

“These goals establish a solid foundation for affordable and sustainable homeownership and rental opportunities in this

Frequently Asked
How does this affect you?

country,” Melvin L. Watt, the agency’s director, said in a news release.

The housing market is improving, but still lags the boom years before the market collapsed. Many potential buyers still complain that they have trouble getting mortgages, that few homes are on the market and that rents are soaring.
The agency set separate targets for single-family housing including categories for mortgages for low-income families, very low-income families and families in low-income areas, and for refinancing mortgages. The goals for mortgages for owners of multifamily property also include separate targets for low- and very low-income families.

The agency said 24 percent of mortgages should be bought by Freddie or Fannie for homes for low-income borrowers, or those with incomes no greater than 80 percent of an area’s median income. That goal is one percentage point higher than the goal for 2014.

The National Community Reinvestment Coalition, which advocates affordable housing, said that the new target fell short of expectations.

“With demand up and the economy stronger, to say 24 percent is to create a standard that isn’t as helpful as what is needed,” said John Taylor, president of the organization, who called the new goals “a lost opportunity.”

The agency also set a goal of 6 percent of mortgages for borrowers considered very low income, who have incomes no greater than 50 percent of the median income of the area. That is slightly less ambitious than last year’s goal of 7 percent.

For multifamily units, the agency wants the lenders to back mortgages for 300,000 units a year through 2017 for low-income units and 60,000 a year for very low-income units.

For mortgages for small apartment complexes, the goals are 48,000 total low-income units for the next two years, less than half of the 105,000 total units originally proposed. The higher goals would have risked “crowding out” smaller lenders, the agency said, acknowledging that the final goals are modest but are intended to keep Fannie and Freddie active in this market.

The agency said that Fannie and Freddie had not fallen short of similar housing goals in the past, but that it could take action to ensure the goals are met if problems arise.

During the housing crisis, the federal government placed Fannie and Freddie in conservatorship, and they received a taxpayer bailout to avoid bankruptcies. They now pay their profits to the Treasury.

The agency said it had received 144 comment letters from advocacy groups and others on its proposed goals. A “significant number” of those letters questioned whether Fannie and Freddie should still be under conservatorship or were tied to unrelated matters.

“Those comments are beyond the scope of this rule-making,” the agency said.

A version of this article appears in print on August 20, 2015, on page B7 of the New York edition with the headline: Agency Sets Goals for Fannie Mae and Freddie Mac to Encourage Affordable Housing .

Lease to Own Instead of Renting


Renters and Home Owners are always working towards paying off a mortgage.  The difference?  Owners are paying their own mortgage and Renters are paying the Owner’s mortgage also.  Years ago, a friend of mine told me that paying rent was like throwing your money down a black hole.

If you are tired of throwing money down “that black hole”, we have a unique plan to turn renters to house owners.  Our Neighbors Healing Neighborhoods program works with Investors that want renters to experience the dream of home ownership for the first time or again if the victim of the past economy.

The program is fairly simple:wishing_stones_in_front_of_a_model_house

  1. Make an appointment to talk with one of our agents to discuss where you want to live, what type of house interests you and what your five year plan is to get your “Dream” Home.
  2. Next, our agents work with you to establish what you can afford now.
  3. This step requires a bit of time doing research with our agents. Drive the neighborhoods to look for the house that is affordable and comes closest to the features you would like in your house.
  4. Once the right house is found, our negotiators and Investors go to work to get the best price for the house. If everything meets our Investors parameters, they purchase the house and do the rehab.
  5. With a low down payment, the family can move into the house as renters.  The downpayment is kept in an account to be used as part of the down payment.
  6. Part of the monthly rental will also go into the account to be added to the down payment amount.
  7. The tenant will sign a purchase agreement for the house to be closed in 12 or 24 months, whichever works best for all parties.

This program has been designed with two goals in mind.  First we want to help displaced home owners and new buyers to experience the American dream of home ownership.  The second goal is to rebuild the neighborhoods in SW Florida.  It’s a win-win-win scenario for the future homeowner, the Investor and the neighborhood!


Mike Cathell,
Broker/Owner, Investment Property ConsultantJ
Real Estate Services of SWFL, LLC


Mortgage News for Military Veterans

Our VA and VA Elite Loans have…
Industry-Leading Rates
Quick Closings
Red Carpet Service
plus you get…
Exceptional Service from Your Local Mortgage Broker
Gary King   239-989-2288   (mobile any time)    NMLS #386955

This is not a commitment to lend. Not all borrowers will qualify for this program. 



Innovative Mortgage News

Our Elite FHA and VA Interest Rates
Lead The Industry !!
If Your Buyer Has a Minimum 720 FICO Score
She/he may qualify for Elite Pricing
* Loans from $175,000 to $417,000
* All fixed-term mortgages
*Primary SFR’s
Combined with fast closings often less than 30 days
We Can Submit & Lock A Loan Up ‘Til Midnight
and you also get…
Exceptional Service from a Local Mortgage Broker
Put these advantages in  

your tool kit to close more deals!
Gary King   239-989-2288   (mobile any time)    NMLS #386955

This is not a commitment to lend. Not all borrowers will qualify for this program.

Ready – Set – Close More Deals! Qualifying Your Buyer

As a real estate agent, how often have you put your buyer and a great property together at the right price, only to find out that they are having trouble qualifying for a mortgage? Well, here’s some information that may help.

The largest wholesale lender in the country has a product called “Pay Advantage” that will lend up to 95% LTV with no monthly mortgage insurance (commonly called M.I.). That’s a big deal, as a $190,000 FHA loan on a $200,000 purchase would require an extra $200+/mo for that M.I. – for the life of the loan! Not only would your buyer be paying an extra $2,500 a year, but they would not even qualify for an FHA loan, unless the property will be their primary residence. Second homes in Florida (or anywhere else) do not qualify for an FHA loan, but they do qualify for a Pay Advantage loan. Of course, that extra $200+/mo also adds some drag on the debt-to-income (DTI) ratio that cannot be exceeded for loan approval.

Now let’s consider the source of your buyer’s down payment for that 95% LTV. In most cases, all down payment and closing costs must be sourced from the borrower’s own funds. Believe me, the underwriters will pursue documentation that verifies those sources – bank accounts, investment accounts and the like. Underwriters will International Home Buyersquestion the source of any major deposits made in the last 60 days and will require a “paper trail” that accounts for any such deposits.

Well, this same lender has a 100% Gift Program that permits the borrower to use a “gift” of funds for the entire down payment, as well as closing costs! That means parents or other friends and relatives can “gift” the money to cover those costs, allowing your buyer to get a mortgage with virtually no out-of-pocket cash. I’m really beginning to like this lender!

Now add in closing times of 23 days, on average, in order to meet or beat your contract dates.

When you put all these advantages together, that can mean more closed deals, higher commissions and faster closings! Want to know more? Just give me a call.

Gary King

Innovative Mortgager, LLC

239-989-2288   mobile   (anytime)

New Mortgage Rules – Keep an Eye on this!

By Tim Grant / Pittsburgh Post-Gazette

Federal housing authorities want to make it easier for people who lost their homes due to bankruptcy or foreclosure as a result of the economic downturn five years ago to qualify for a new mortgage — sooner rather than later.

The Department of Housing and Urban Development last month changed its rule requiring a three-year waiting period for people who have lost a home due to foreclosure or bankruptcy, opening the door for them to buy another home in only one year as long as they have fixed whatever financial problem caused them to lose the previous home.

“Three years can be a long time for a family to wait for a loan, and putting money into a rental instead of an investment can result in a loss,” said Don Frommeyer, president of the National Association of Mortgage Brokers in Plano, Texas.

“This is an effort to help boost the housing industry, which is a major part of jump-starting the economy.”images (19)

At a time when interest rates are ticking up and new mortgage applications are on the decline, the rule change could make more people eligible for mortgage loans, even if their credit was ruined during the Great Recession.

But the Achilles’ heel of the rule change is that banks and other mortgage lenders are not required to abide by it.

The new rule, published Aug. 15, gives financial institutions the option of reducing the waiting time to one year for troubled borrowers. But many are likely to stick to the old three-year waiting period.

“The reality of the new HUD rule is it won’t change anything,” said Tom Hosack, president and CEO of Northwood Realty in Franklin Park. “The lenders actually have more stringent internal requirements than HUD does anyway. Lenders still do not feel comfortable lending to people one year out of bankruptcy and are still requiring them to wait longer.”

He said at the height of the housing boom lenders were more impressed with the value of the collateral than the creditworthiness of the borrower. Institutions had the idea that even if the borrower defaulted, the bank could always get its money back from the sale of the property, which at that time seemed headed nowhere but up.

Now with memories of the housing crash still fresh, lenders have gone back to closely scrutinizing the credit history of borrowers to determine their likelihood of repaying loans.

“Banks are being a little too overcautious,” Mr. Hosack said. “But it is the byproduct of them being too liberal for too long. … People who had a bankruptcy or foreclosure are more likely to have a second one, and banks want to make sure people have their act together before making a loan to them.”

Mike Blehar, principal at Green Tree-based financial services company Fort Pitt Capital Group, said he often works with clients who are either buying a new home or refinancing an existing one, which means he deals with several banks.

Even for affluent clients, buying and refinancing real estate is not always a smooth process.

“Every so often, it is a real struggle for some of them to qualify for a refinance,” he said, adding that one case seemed particularly puzzling.

The client, who is an executive for a major corporation in Pittsburgh, was refinancing his home and had to provide a mountain of documentation to show he was a qualified borrower.

What was striking about the case, Mr. Blehar said, is that on the day of the closing, the mortgage company called his client’s office to verify he was still employed even though they had already checked two weeks earlier.

“These mortgage companies are so worried about getting burned again by making bad loans they will go to extremes to make sure they have a qualified borrower,” he said.

An improving economy could bring more people back into the real estate market although, for now, it seems rising interest rates have caused a slowdown.

The Mortgage Bankers Association reported that mortgage applications fell last week 13.5 percent compared to the previous week, marking the eighth drop in 10 weeks. Since the first week of May, the average rate on a 30-year fixed mortgage has jumped from 3.35 percent to around 4.6 percent.

The decline in applications has led several major banks such as JPMorgan, Bank of America and Citigroup to scale back on their mortgage operations, causing thousands of employees to be laid off.

Wells Fargo & Co., the largest U.S. mortgage lender, announced it expects to make 30 percent fewer home loans this quarter due to rising interest rates.

Meanwhile, the Federal Housing Administration will green-light mortgage applications for people who lost their jobs, filed bankruptcy or saw their income reduced by 20 percent or more for a period of at least six months, as along as they can show that it occurred as a result of the recent recession.

The problem must be fixed, and the borrower must show a record of making at least 12 months of on-time payments on all their credit accounts.

They also will need to complete a housing counseling course and meet all other HUD requirements.

Mr. Frommeyer said every lender maintains what is known as an “overlay,” which is its own lending requirement, used in coordination with FHA’s requirements. For example, he said, FHA actually has no minimum credit score requirements for borrowers, while each financial institution has its own minimum score ranging from 680 to 580.

“This is an effort to lower the standards for mortgage loans, but there is no guarantee banks will participate,” Mr. Frommeyer said.

“Let’s face it. The economy is not where it really needs to be yet. This is a way to try to help borrowers who couldn’t make payments. But it’s not an easy fix.”

Tim Grant: or 412-263-1591.
First Published September 16, 2013 12:00 am

Read more:


Mike Cathell,
Broker/Owner, Investment Property Consultant
Real Estate Solutions of SWFL, LLC

Cell:  (239) 770-6250   Fax:  (239) 220-5508

Real Estate – New Construction

With new home construction coming back into the market, I thought this recent article in National Mortgage News would be of interest…

Applications for financing on new home purchases in June were down 15% from the previous month, according to a new measure of activity from the Mortgage Bankers Association.

Based on the MBA’s Builder Application Survey and some assumptions regarding market coverage and other factors, the association’s economists estimate that sales of new single-family homes were running at a seasonally adjusted annual rate of 413,000 in June 2013.

On an unadjusted basis, the MBA estimates there were 39,000 new home sales in June.

The new survey captures mortgage loan application activity on new single-family properties for lenders affiliated with homebuilders. It will be produced every month.

Since sales estimates reported by the Census Bureau on a monthly basis are based on new home sales as recorded at contract signing, capturing the number of mortgage applications, which are typically made around the same time as contracts are signed, will provide an earlier indicator of new home sales.

BAS will track application volume from mortgage subsidiaries of large homebuilders across the country. Utilizing these data, as well as data from other sources, the MBA also will be able to provide information regarding the types of loans used by new homebuyers.

In June, two-thirds of the loan apps were for conventional loans, 17.4% were for FHA loans, 13.4% were for VA financing and 1.9 % for RHS/USDA mortgages. The average loan size decreased from $283,795 in May to $283,000 in June.

“Along with being an important leading indicator of developments in the market for new homes, the BAS will provide additional color on the composition of sales in that market,” said Mike Fratantoni, MBA’s vice president of research and economics. “As we continue to expand the survey, we will release additional data and metrics, including geographic detail at the state and metro level.”

According to the MBA, participants in the survey collectively account for approximately 20% of new home sales based on the Census Bureau estimates.

              Gary King, MBA

Residential & Commercial RE Advisor
 Real Estate Solutions of SWFL, LLC
        Innovative Mortgage, LLC
Residential & Commercial Mortgages
       …extraordinary service!
    mobile 239-989-2288 (any time)

Earth Calling Ben Or Is It Ben Calling Earth?

Unless you were on the space station, orbiting Earth, you already know that one week ago Ben Bernanke sparked a significant jump in mortgage interest rates with his Fed comments. In some cases, they increased by one half a point over night…that’s HUGE, as Billy Fucillo (our local mega-car dealer in SWFL) would say. Rates continue to climb and fall back, even on an intra-day basis.

There is some speculation that rates may calm down and even drop some, as the market adjusts from Ben’s comments about reducing the Review promotes growthFed’s volume of bond market purchases over the next eighteen months, if the economy continues to improve.
That leaves buyers and investors with a challenging decision – should you move ahead with that mortgage now or wait for a possible pull back in the rates? Here’s a suggestion…if the deal makes sense with today’s rates and terms, then act now. Do not wait for a marginal rate improvement that may not come or may cause you to miss the deal that is on the table now.
Rates are still very attractive vs. historical averages and there are many mortgage features in today’s market that are truly beneficial for the buyer. My company even has an escrow waiver program that can give you increased flexibility with your monthly payment and cash flow. You can also take advantage of our loan product that can go as high as 97% LTV with no mortgage insurance…now that really is HUGE!
Yes, commercial rates are not immune to increases, either, as they tend to follow Prime, LIBOR and other popular indices. So keep that in mind.
              Gary King, MBA

Residential & Commercial RE Advisor
 Real Estate Solutions of SWFL, LLC
        Innovative Mortgage, LLC
Residential & Commercial Mortgages
       …extraordinary service!
    mobile 239-989-2288 (any time)

The Ultimate Advantage Loan Blows FHA Away!

As you may know, a main advantage of an FHA home loan has been the ability to buy a home with a small down payment, borrowing up to 96.5% loan-to-value (LTV) of your home’s purchase price and as much as 97.75% for a rate/term refinance, so long as you purchased costly private42-21058878 mortgage insurance (PMI) . Until now, that insurance could be eliminated from your monthly mortgage payment once you reached 22% equity in your home or 78% LTV…but no more! After June 3rd, you must pay PMI for 11 years, if you put 10% or more down. If you put less than 10% down, you will pay PMI for the life of the loan! 
With the FHA’s Mutual Mortgage Insurance Fund announcing a deficit of over $16.3 billion for fiscal year 2013, these changes are necessary to maintain the FHA’s mandated reserve requirement. That translates into loans and payments that are more expensive for consumers.
These tougher FHA rules have made the Ultimate Advantage Loan even more attractive! In a recent side-by-side example of a $210,000 home purchase with an approximate 96.5% LTV, the Ultimate Advantage Loan saved nearly $193 per month ($2,316 per year). Now that added cost for the FHA loan will continue for the entire life of the loan.
Email or call me to see the details of that comparison or to learn more about the Ultimate Advantage Loan.  (The comparison assumed a 3.875% note rate for the loan. Not all borrowers will qualify for this loan program.)
               Gary King, MBA
        Innovative Mortgage, LLC
Residential & Commercial Mortgages
        …extraordinary service!
    mobile 239-989-2288 (any time)