CFPB investigates Zillow’s Co-Marketing Program: What Agents Should Know

 

The CFPB’s recent action against Zillow speaks volumes about the mortgage industry’s regulatory atmosphere when it comes to advertising compliance. With costly fines and other serious penalties for marketing rule breakers, loan officers and their business partners can’t afford to ignore the signs of the times.

To help you navigate this arena with confidence, we have gathered the following information detailing the most common compliance blunders they encounter, with 3 ideas on how you can avoid potentially disastrous mistakes.

Always split payment, and show proof

All co-marketing material/expenses must be split based on pro-rata share, and be documented. This means if I pay for half of a co-marketing flier with you, the flier needs to show both of us, with an equal share of the marketing space. You also need to retain copies of checks, co-op forms, etc. when marketing with another person.

Get use to the verbiage

Unfortunately, mortgage compliance can take the fun and elegance out of marketing. We cannot boast about having the best rates or guarantee to close a loan within a set number of days. If your referral partner is engaged in these kinds of promises, it could be best to have a conversation with them, or if need be, steer clear of them altogether since this kind of rhetoric is inviting trouble.

Get use to the disclaimers

Our disclaimers are required by law. We know how ugly some of the long regulatory verbiages can be, or how picky marketing materials have to be to avoid triggering massive disclosures. However, as frustrating as these can be, there is no room for flexibility. The disclosures have to be there to protect everyone involved. If we don’t include these on our advertisements, it will be a serious reason for concern.

If you have questions about our industry, please let us know. We’d be happy to assist you in any way we can! The Polder Group at Summit Funding

Your HomeReady

 

Segments of the potential mortgage market are completely ignored by some lenders. Not only is this a poor business choice, but ignoring certain populations can be seen as a discriminatory practice by regulators. At PRM, we want to serve all communities and bring the dream of home ownership within reach. Through Fannie Mae’s HomeReady program, we can help you to grow your business in underserved communities for credit-worthy clients with low to moderate income. With flexible income guidelines not seen in other conventional programs, HomeReady helps PRM to assist you in bridging the gap for clients who otherwise would have limited financial options. Segments of the potential mortgage market are completely ignored by some lenders. Not only is this a poor business choice, but ignoring certain populations can be seen as a discriminatory practice by regulators. At The Polder Group, we want to serve all communities and bring the dream of home ownership within reach. Through Fannie Mae’s HomeReady program, we can help you to grow your business in underserved communities for credit-worthy clients with low to moderate income. With flexible income guidelines not seen in other conventional programs, HomeReady helps The Polder Group to assist you in bridging the gap for clients who otherwise would have limited financial options.

 

HomeReady Flexible Income Guidelines

 

  • Rental income acceptable
  • Boarder income acceptable
  • Non-Occupant Co-Borrowers acceptable
  • Expanded eligibility for lower income families by potentially using income derived from occupants other than the borrower as a compensating factor
  • Flexible DTI requirements
  • HomeReady increased home affordability in other ways, with low down payment options, which can be less than the required amounts for FHA loans. Additionally, your client also doesn’t have to be a first-time homebuyer, and properties can be more than 1 unit.

 

In order to qualify for the HomeReady program, your client must meet income requirements for the area the subject property is located in.  For low-income census tracts, there are now income limitations. Income limitations by area can be viewed

Here.

https://www.fanniemae.com/singlefamily/homeready-income-eligibility-maps

 

 

If you have a client you think might benefit from the flexibility of the HomeReady Program, contact The Polder Group Today.

Why Expertise Matters for A VA Loan

 

Most industry professionals know that VA Loans can be a great option for some clients, offering a simple and smart solution to their financing needs. However, as beneficial as the VA loan program can be, these transactions still possess traits which require knowledge and finesse to navigate confidently. Over-eager or inexperienced lenders can turn the underwriting process into a nightmare for your client, so it’s important to have an expert on your side.

 

Mishandling of VA loans is more common than you think.  In November of 2016, the CFPB released a report detailing how many consumers had felt cheated or mislead during the course of a VA Loan. You can read the report here.  In the best of cases, the borrowers felt stressed out or confused by the processes. While some unfortunate clients suffered from buyer’s remorse at the closing table or were declined all together when they were already in contract. The question becomes, why did this happen, and how can you help your clients avoid a situation like this?  We can take a look at the data to see how we can avoid repeating these mistakes.

 

VA Loans – Mistakes and Solutions

 

Mistake 1: For some clients, loan terms were not in the borrower’s best interest. Just because a borrower is a Veteran, doesn’t mean that a VA loan is the right choice for them. Without a qualified Mortgage Banker looking out for the borrower’s best interest, borrower’s found themselves in new mortgages that presented new financial difficulties, instead of making their lives easier.

Solution:  You need a mortgage banker who looks at your client holistically, not just as a commission check with legs.  I treat every client with respect and put their goals and needs first. Like you, I want clients for life, with a relationship based on trust.

 

Mistake 2: In many cases, a thorough examination of the borrower’s financial profile was never performed, so qualification-threatening issues were discovered at underwriting, instead of upfront. A lender may lack a deep understanding of VA guidelines which cause the borrower to be declined.

Solution: This is why my team and I request full documentation upfront from the borrower, so issues aren’t caught in the end or the middle of the underwriting process. I work closely with our underwriters so no one is surprised by guideline changes. No one should sell something they don’t fully understand.

 

Mistake 3: For other clients, communication with the lender was either delayed, or non-existent, causing the process to stretch on endlessly, blowing the borrower’s rate lock period, or allowing sensitive documents to expire.

Solution: My team and I engage our clients with clear, transparent communication at every step of the mortgage process. We update both the client and you, so there is never a need to request the status of the loan. The process can be stressful enough without being left in the dark.

 

All of these errors highlight why expertise in lending matters. You need a lender who knows how to work within the VA system, who can set realistic expectations for all parties involved, and who provides one-on-one, personal service with the history and experience to back it up. And most importantly, you can trust I have your client’s best interest in mind during every step of the process.

 

Contact The Polder Group today if you have questions with how we can help your clients obtain smart and confident VA financing!

POTENTIAL DELAYS IN CLOSING DURING TAX SEASON

With tax season in full swing, many of your clients are working to collect, organize and file their 2016 tax returns. Because final tax information must be received before final loan approval, tax season is an important time in the mortgage industry. Here are some potential delays in closing during tax season:

Delays in Closing during Tax Season

After April 18, 2017, the previous year’s tax returns are required and lenders must have a copy of their transcripts or their filed extension in order to close their loan.

The closer we get to the tax deadline, the slower requests are returned by the IRS because of the high demand. This can delay closing for those borrowers that do not keep records of their taxes or are filing their taxes too close to their closing date.

Requesting Previous Tax Returns

During this tax season, many home closings are subject to delay because clients may not have their most recent tax returns on file. Requesting previous years’ tax returns electronically will help speed up the process and allow for a smoother closing when the client is purchasing a home this season.

 Filing Electronically

Filing electronic tax returns with the IRS may be able to help your clients accelerate the documentation process considerably when buying a home in 2017. For buyers hoping to use their 2016 income to qualify, filing their taxes electronically allows lenders to verify their transcripts much sooner; qualifying them with their most recent income.

If you have clients actively looking for homes, please give us a call so we can figure out if their latest tax returns will be required to qualify. We are happy to help our referral partners proactively account for any IRS tax return delays when writing the purchase contract. We would also love to help educate your clients on the timeline of the loan process. Please don’t hesitate to give The Polder Group a call!

Hidden Cost for First-Time Homebuyers

 

There are many things home buyers learn throughout their first home buying experience. Much shock and disappointment could be avoided if buyers understood the additional expenses which come along when buying a home; not just the down payment and mortgage payment. Yes, all upfront costs in a loan transaction will be laid out with the Closing Disclosure form; but borrowers should truly know what they are getting themselves into financially before they’ve signed on the dotted line.

So alert your clients of these hidden costs for first-time buyers:

Down Payment

Down payments are one aspect of financing that first-time homeowners may not fully understand before purchasing a home. The standard down payment for conventional financing is 20% of the purchase price of the home, though this is not the only way! Most people still believe that a 20% down payment is required to get into their first home. In fact, 76% of individuals in a recent Fannie Mae study say they were unaware of low down payment options such as a 3 or a 5% down payment program. The Polder Group at Summit Funding’s low down payment programs can significantly help first-time home buyers get into the home they love.

Private Mortgage Insurance (PMI)

PMI is an added insurance policy to protect the lender in the event that the buyer cannot pay their mortgage and the loan winds up in foreclosure. Private Mortgage Insurance can be paid for all at once, when the loan is closed, or in monthly installments that are added to the mortgage payment for the loan.  If the borrower cannot make a 20% down payment, paying for PMI can help them get into a home when they may not have been able to before.

Inspections

Before closing on the house, it is generally a good idea to get a home inspection. A Home inspection will verify if there are hidden issues and will provide an in-depth analysis of the home, bringing to light things which might otherwise be missed. These inspections generally run a couple hundred dollars, but are widely considered worth it to the buyer as the information could save hundreds, if not thousands of dollars, in the end. Find limitations and exclusions to home inspections here.

Appraisals

Home Appraisals are unbiased, professional opinions on how much the home is worth. Appraisals must be done before closing so the lender can verify that the value of the home is at least the amount the buyer is paying for it. While also ensuring the subject is structurally safe, sound and secure. These can cost a few hundred dollars, but can often be rolled into the loan amount.

Closing Costs

Closing costs, sometimes called settlement fees, are paid when closing on a home. These are fees charged by people taking care of the purchase process, including the lender, real estate agent, and other third parties involved in the transaction. Some of these costs can be rolled into the loan, allowing less cash out of pocket to be needed at closing.

Closing Costs can include:

Government recording costs, appraisal fees, credit report fees, lender origination fees, title services, tax service fees, survey fees, attorney fees, underwriting fees, etc.

Earnest money

Earnest money is a deposit which the buyer submits at the time they make an offer to show that they have a serious intent to purchase the home. Most often, the amount is between 1-3% and the funds are generally held in escrow with the Title Company or closing agent. Earnest money is not a separate expense as it will be applied to either the buyer’s down payment or closing costs. However, it is worth mentioning because the funds are typically paid when the offer to purchase is made rather than when the loan closes.  Depending on the terms and conditions of the contract, the buyers could possibly get this money back if the sale does not go through. So it is important to review these terms carefully before making an earnest money deposit.

Homeowners Insurance

A buyer will need proof of homeowner’s insurance before the mortgage loan can be completed. Not only is it a wise thing to have, but insurance is required by the lender to ensure that the mortgage will be paid off, or the property will be repaired or rebuilt to its current value, in the case of disaster.  A buyer may also consider flood insurance, even if they don’t live in a flood zone, just in case.

Taxes

Buyers should always check the property tax rate for the new home. Local rates can vary by area depending on school, fire districts, etc. The buyer may owe the previous homeowner for some portion of fees already paid as they are paid yearly and are split when the home is sold.

Cost to Move In

First-time homeowners often forget how all the little things add up; make sure the buyers know to consider these in their budget as well:

Moving expenses – moving truck, boxes, hiring movers, feeding friends to help with the move.

Appliances/Furnishings – many homes don’t come with appliances or furnishings which are other expenses buyers need to keep in mind before deciding to purchase.

Maintenance costs – unless the home is a fixer-upper, buyers may not have too much work to do, but they should budget in small fixes and adjustments in their total budget.

Monthly Bills – many buyers don’t consider the change in monthly bills they will have with their new home, not only mortgage, but utilities, water, garbage, etc.

If you or your clients have any questions about the hidden costs for first-time buyers, please have them give The Polder Group at Summit Funding a call!

Tucson P2P Program

 

Tucson P2P Program

Good afternoon,

The IDAs of Tucson/Pima would like to thank you for originating a very successful Tucson P2P program!  As of this afternoon, the program has been fully originated.

So what does this mean?  No new reservations will be accepted in the program.  No additional funds will be made available. And a waitlist will not be created.  If you have reserved funds it is extremely important to follow the program timeline.  There is no guarantee that if a loan cancels that it can be reinstated.  Loans must be Underwriter Certified within 25 days of reservation.  And loans must be purchased by US Bank within 70 days of reservation.

As a reminder, the Homebuyer’s Solution Program is continuously funded and still available.

 

Thank you,

eHousingPlus

 

Other Great Programs Available

Call or Text us Today To Get Started: (520) 495-0222

FHA Lowers MIP Rate Which Could Boost Home Sale

In a letter from the U.S. Department of Housing and Urban Development (HUD), dated January 9, 2017, HUD has announced the reduction of annual Mortgage Insurance Premium (MIP) rates for homes closed on or after January 27, 2017. This will save borrowers money on their monthly payments which can lead to bigger savings and better financial well-being for homeowners. It will also allow for more families to get into the home of their dreams.

How does FHA Mortgage Insurance Work?

When a borrower applies for an FHA loan, they are able to make a down payment of as low as 3.5% of the home’s purchase price. For any loan in which the borrower cannot put a full 20% down payment, they are required to pay mortgage insurance, which is generally added to their monthly mortgage payment.

Since FHA loans are insured and backed by the US Government, the mortgage insurance paid by the borrower will reimburse the lender in the event that the borrower cannot make their monthly payment and go into default.

FHA Passes Down Mortgage Insurance Savings

The money which borrowers pay towards their mortgage insurance goes into FHA’s Mutual Mortgage Insurance Fund (MMIF), a pool of funds designed to aid lenders in the event of another housing market crash. According to HUD officials, the MMIF has grown in value significantly since 2012, by $44 billion, as evidence of an increase in quality lending and a decrease in borrowers defaulting on their loans.

Therefore, due to the increased pool of funds in the MMIF, HUD has chosen to reduce the annual MIP rates, lowering its annual rate by 25 basis points, or 0.25%. This will lower the typical FHA house payment by an average of $500 per year in 2017. That’s more than $41 per month for the average borrower! Homeowners taking out larger loans will see even larger savings.

Here is a chart from the official policy change letter by HUD, showing current annual MIP as well as the new reduced premiums which will soon take effect.

Who Will this Effect?

This new FHA discount on MIP affects all FHA Title II forward mortgage programs, with terms greater than 15 years and closing on or after January 27, 2017. This new change will not affect Single Family forward streamline refinances which were endorsed on or before May 31, 2009. It will also not affect Section 247 mortgages (Hawaiian Homelands).

Going Forward

Now that the cost of an FHA loan is going down, more borrowers and their families should be able to qualify for an FHA loan. This could incentivize more first-time homebuyers to enter the housing market.

If you or your clients have questions about how this may affect their home loan, or if they are interested in taking advantage of the new lower MIP, give The Polder Group at Summit Funding a call. We would love to help!

New Year’s Financial Resolution 2017

 

The New Year is here! And with it, comes a chance for everyone to make a fresh start. An important change that many people make in this season is one which will improve their financial situation. Everyone should set at least one financial goal in 2017 to keep them on track with specific and tangible objectives.

New Year’s Financial Resolution

In Fidelity’s 2017 New Year Financial Resolutions Study, they found that out of the people who were “successful at keeping their financial resolution, 66% also said they were in a better financial situation than last year, compared to 38% of those who didn’t come as close to achieving their resolution.” Setting financial goals can make a difference for anyone committed to their future financial success.

Financial goals may include:

  • Paying off debt
  • Saving for retirement
  • Building an emergency fund

In a time where interest rates are low, and housing prices are high, refinancing can help pay off debt, or kick-start retirement saving or an emergency fund.

Term and Rate Refinance

A term and rate refinance will allow the borrower to refinance only the term and the rate of their mortgage. This refinance replaces the loan terms with a new interest rate and payment term. This could significantly lower monthly payments, allowing borrowers to save money over the long term.

Cash-Out Refinance

With cash-out refinancing, the mortgage is refinanced for more than is currently owed, and the borrower pockets the difference. They then make mortgage payments on the new loan amount. With this option, the borrower can pay off large amounts of credit card/car/student loan debt, or they could place a lump sum in retirement or an emergency fund for savings.

If used wisely, a home loan refinance could use home equity to lead borrowers to a more stable financial future. If you know of clients who are considering a home loan refinance, give The Polder Group at Summit Funding a call! We would love to reach out to them.

Bloomberg Ranks Tucson #3 Fastest Job Growth

The Tucson area could see job growth double this year from 2015 levels, signaling Tucson’s grand come back.

Bloomberg Markets has ranked Tucson #3 Metros with Fastest Job Growth. This is huge for our city and the real estate market!!

Jed Kolko, an economist who specializes in U.S. cities and the future of work, points out that mid-sized cities, such as Tucson, Arizona and Seattle, Washington, continue to see fast growth, but the San Francisco Bay area has fallen out of the top 10.

Check out Bloomberg Article Below:

http://www.bloomberg.com/news/articles/2016-08-19/these-are-the-cities-with-the-fastest-and-slowest-job-growth-in-america