Great article about some important things for Buyers to know when looking for a home. It claims that these are items an agent won't tell you, but my clients get all this information from me up-front!

10 Things Your Real Estate Broker Won't Tell You

How the Government Shutdown is affecting real estate transations

The government shutdown has long-reaching impacts, particularly on the lending side.  Here are some of the highlights:

Internal Revenue Service (IRS)The IRS is closed and has suspended the processing of all forms, including requests for tax return transcripts (Form 4506T). While FHA and VA do not require these transcripts, they are required by many lenders for many kinds of loans, including FHA and VA, so delays can be expected if the shutdown is protracted. We have received indications that many loan originators are adopting revised policies during the shutdown, such as allowing for processing and closings with income verification to follow, as long as the borrower has signed a Form 4506T requesting IRS tax transcripts. On loans requiring a Form 4506T Fannie Mae and Freddie Mac have also adopted relaxed provisions allowing closings but subject to tax transcript verification before the GSE’s purchase the loans. 

Social Security Administration (SSA)The Social Security Administration is closed and has suspended most customer service functions. According to the SSA Contingency Plan, verifying Social Security numbers through the Consent Based SSN Verification Service will also be suspended during the shutdown, a further complication for mortgage processing. As with IRS income verification, policies vary among lenders, with many choosing to exercise forbearance during the shutdown period subject to subsequent verification. Fannie Mae and Freddie Mac have also adopted policies to allow for closing subject to subsequent verification and before GSE purchase of the loan.
Federal Housing AdministrationHUD’s Contingency Plan states that FHA will endorse new loans in the Single Family Mortgage Loan Program, but it will not make new commitments in the Multi-family Program during the shutdown. FHA will maintain operational activities including paying claims and collecting premiums. Management & Marketing (M&M) Contractors managing the REO portfolio can continue to operate. You can expect some delays with FHA processing. 

VA Loan Guaranty ProgramLenders will continue to process and guaranty mortgages through the Loan Guaranty program in the event of a government shutdown. Expect some delays during the shutdown.  

Flood InsuranceThe Federal Emergency Management Agency (FEMA) confirmed that the National Flood Insurance Program (NFIP) will not be impacted by a government shutdown, since NFIP is funded by premiums and not tax dollars. Changes to the flood insurance program scheduled to take effect on Oct. 1 will be implemented as scheduled. 

Rural Housing ProgramsFor the U.S. Department of Agriculture programs, essential personnel working during a shutdown do not include field office staff who typically issue conditional commitments, loan note guarantees, and modification approvals. Thus, lenders will not receive approvals during the shutdown. If the lender has already received a conditional commitment from the Rural Development office, then the lender may proceed to close those loans during the shutdown. A conditional commitment, which is good for 90 days, is given to a lender once a USDA Underwriter approves the loan. If a commitment was already issued, the funds were already set aside and the lender may close the loan at its leisure. If Rural Development has not issued a conditional commitment, the lender must wait until funding legislation is enacted before closing a loan.
It is important to note that the traditional definition of “rural” for qualifying communities for assistance will be continued in effect during the shutdown.  We expect that language to continue the current definition will be included in whatever funding measure is eventually enacted. 

Government Sponsored EnterprisesFannie Mae and Freddie Mac will continue operating normally, as will their regulator, the Federal Housing Finance Agency, since they are not reliant on appropriated funds. 

TreasuryThe Making Home Affordable program, including HAMP and HAFA, will not be affected as the program is funded through the Emergency Economic Stabilization Act which is mandatory spending not discretionary.

Several sources predicting a continued rise in home prices!

The past 6 months have seen a real surge in the housing market.  I know I personally have been swamped, which is fantastic!  Inventory is incredibly low and homes are selling faster and for more money than I have seen in years.  Recently several national sources have come out with studies supporting what I have personally been seeing and predictions that this great market will continue. Great news!  If you have been considering selling your home, now is the time! Most of my listings since November have sold in less than a week and for at least 98% of the list price (if not OVER list price).  I would love to help yours do the same!

Check out these articles for more information about the improved housing market we are seeing:

Fannie Mae: Confidence in Home Price Gains Reaches Record Levels

Firm Forecasts 8% Increase in Prices, Decrease in Mortgage Rates

CoreLogic: Home Prices Post 12.1% Annual Gain in April

How to pick the right mortgage

Great flow chart to help you figure out what your best loan option is!

Compliments of one of my favorite lenders, Kim Jones with Fidelity. If you have any questions, please contact her: kim.jones@lionbank.com

New changes to FHA loans

There are some changes coming up in FHA that you should know about.  As you may or may not be aware, FHA has implemented numerous increases to their monthly MI and the Up Front MIP since 2009.  They are doing it again and so FHA continues to be the "loan of last resort".  Since the increases started, my lenders have been consistently avoiding FHA for borrowers who have other options, since it is more expensive.  FHA is notorious for changing this stuff at the last minute, but for now here is what we expect...

(There are some slight variations to the bullet points below for 15 year FHA loans or if clients put more than 5% down, but that is a VERY small percentage of FHA borrowers, so these are the changes most borrowers will experience)

• The monthly MI will increase to 1.35% of the loan amount (divided by 12) for most FHA loans.  So a $200,000 30 year fixed FHA loan will have monthly MI of $225.00 (about double conventional)  - This will be effective with all FHA case numbers pulled after April 1, 2013
• The Monthly MI will not be able to be dropped under any circumstances for the life of the loan. It doesn't matter if they pay the loan down or if the home doubles in value, borrowers will still have to pay monthly MI until they sell, refinance, or pay the loan off.   This will be effective for all FHA case numbers pulled after June 3rd, 2013.

The Up Front MIP will remain the same at 1.75% of the loan amount and is still non refundable for any reason.  


Information compliments of one of my favorite lenders, Mark Moore. Thanks, Mark!