DU making LTV adjustments for Duplex's

Desk top Underwriting (DU) is making a BIG adjustment on the LTV limits for 2-Unit homes (DUPLEX) effective Dec 12th, 2009.

2-Unit Primary Residence:

Purchases & Rate and Term refinances:
Old: 95% Loan to Value
NEW: 80% LTV

Cash out refinances:
old: 85%
NEW: 75%

2-Unit Investment Properties:

Purchases & RT refis:
Old: 85%
NEW: 75%

C/O refis:
old: 70%
NEW: Ineligible

Call me with any other questions on purchase
or refinance of multi unit, owner or non owner, properties.

FHA doesn't want to crowd out the return of the private market

FHA Shying Away from Risk-Based Pricing

December 2, 2009

The Federal Housing Administration wants to stay
away from traditional risk-based pricing for mortgage
insurance premiums, saying it doesn't want the government
to compete against private sector MI firms. Lowering prices
for the least risky borrowers could have the effect of
"potentially crowding out the return of a private market"
or delaying its return, HUD secretary Shaun Donovan told
a congressional panel. FHA officials are planning to raise
the upfront premium or the annual premium - or both. The agency
willunveil details of their proposal in January. In determining
the premiums, they want to employ some combination of credit
scores, loan-to-value ratios and other underwriting criteria
that would limit the entry of the riskiest borrowers into
the FHA fund. For example, FHA might raise the downpayment
for borrowers with low FICO scores. "We also have to be careful
about overpricing risk," secretary Donovan testified. He noted
new FHA originations are "quite profitable."

FHA Mortgages are Changing...

FHA Will Hike Premiums, Credit Scores and More

December 2, 2009

The Federal Housing Administration is asking for an increase in mortgage insurance premiums to replenish its diminishing capital reserves while hiking credit scores for applicants. Housing secretary Shaun Donovan will ask Congress Wednesday afternoon to raise the 55-basis point cap on annual government MI premiums. Administratively, FHA officials are expected to raise the 1.75% upfront premium and prohibit those points from being rolled into the loan amount. (The agency does not need Congressional approval to raise upfront premiums.) Even though it is hiking loan costs, HUD will allow the upfront premium to be priced into the interest rate. It also will allow home sellers to pay the premium. "The good news is that they are doing this administratively and taking leadership," said Brian Chappelle, a mortgage-banking consultant with Potomac Partners. As the health of the mortgage insurance fund improves, FHA can reduce the premiums and other restrictions, he added.

Sales of existing homes jump 4% along Wasatch Front

Sales of existing single-family homes across the Wasatch Front climbed 4% in the 3rd quarter compared to the same quarter a year ago, according to the Salt Lake Board of Realtors and Utah Association of Realtors.

The increase marked the first time in four years that home sales showed a year-over-year increase during the third quarter. Across the Wasatch Front there were 5,608 single family homes sold in third quarter, 2009. In Davis County sales surged and were up 9% in the third quarter.

The median home price for a Single Family Home sold along the Wasatch Front for the quarter was $213,250.

Source: The Enterprise Newspaper, SLC, UT, November 16-23, 2009

Renters Have Much to Gain

For immediate release November 18, 2009

A Qualified Mortgage Consultant Can Outline Your Options

Renters Have Much to Gain by Pursuing Home Ownership

By Loan Marty Qualls, Sr. Mortgage Loan Officer

Primary Residential Mortgage

Ogden, UT – Buying a home vs. renting is a big decision that takes careful consideration, as most mortgage consultants will agree. But the rewards of home ownership are great. For many years, purchasing real estate has been considered an extremely profitable investment. It is an achievement that offers a sense of pride, financial stability and potential tax advantages.

Yes, there are certain responsibilities associated with owning a home. Landlords will often argue the benefits of renting, and for obvious reason. If you are renting, you’re helping them make their mortgage payment.

The numbers are staggering if you look at it this way. If you are paying $1,000 per month for an apartment, and you know your rent will increase 5% every year, then over the next five years you will pay your landlord $66,309. If you are currently renting a house, you may be paying much more than that each month. Either way, you gain no equity by shelling out this monthly housing expense and you certainly won’t benefit when the property value goes up!

However, if you were to purchase your own home or condominium, you would be well on your way toward building equity within that same five-year period. By choosing a fixed-rate loan program, you can have the comfort of knowing that your monthly mortgage payment will never go up. In fact, you would have the option of refinancing to a lower interest rate at some point in the future should interest rates drop, and this would cause your monthly mortgage commitment to go down.

In addition to building equity, there are tax advantages that come into play with home ownership. Depending on your tax bracket, owning a home is often less expensive than renting after taxes. Interest payments on a mortgage below $1 million are tax-deductible, and your mortgage consultant should help you evaluate the tax advantages of various loan scenarios, and share this information with your tax consultant to glean feedback on your behalf.

To find the loan program that is right for you, your mortgage consultant will need to evaluate your monthly household income, current assets and savings, as well as any monthly obligations you may have for credit card payments, car payments, child support, etc. These prequalification factors, along with the report of your credit score, will determine how much house you can afford and what interest rate you will pay for financing. It is also important to let your mortgage consultant know what your future goals are, because this will help narrow down which loan option is the best fit for your long-term needs.

There are many different types of loan programs available, including “low” and “no” down payment mortgage programs. These types of programs require the borrower to provide less than 3 percent of the loan amount as down payment. FHA lenders rule that the mortgage payment, including principal, interest, taxes and insurance (PITI) should not exceed 31 percent of your gross income, and the PITI plus other long-term debt (car payments, etc.) should not exceed 43 percent of your gross income.

Housing is an expense that takes a big bite out of the monthly budget. If you are a renter and feel that “home” is more than just someplace to hang your hat, think about the advantages of purchasing real estate. It may be time to take the step into building your personal net worth as a home owner.

FHA Condo Update

FHA Condo Update
By FHA expert Marty Qualls

This update contains the temporary changes to the FHA Condo Approval Process as outlined in Mortgage Letter 2009-46 B.

Here are the 5 things you need to know about these changes:

1. These temporary changes are effective on December 7th, 2009 through December 31st, 2010; except for Spot Loan Approvals.

2. Spot Loan Approvals will be eliminated as of February 1st, 2010.

3. FHA loan concentration may be increased to 100% if the following criteria are met: a. Project construction has been 100% complete for at least 1 year, b. All units have been sold and no single entity owns more than 10% of the units, c. Project holds 10% of the budget in reserves for capital expenditures and deferred maintenance, d. Control of Home Owner's Association has been transferred to the owners, and e. Owner-occupancy is at least 50%

4. FHA requires a 50% owner-occupant ratio but bank-owned units that are either vacant or tenant-occupied are not required to be included the calculation.

5. New construction pre-sale requirement is temporarily reduced to 30%.

Call me with questions you may still have about whether your condominium purchase or refinance will qualify through FHA!

First Time Home Buyer Tax Credit Extended and Expanded!

Homebuyer Tax Credit Extended…
Plus, New Tax Credit for Existing Home Owners!

It’s official! President Obama has signed a bill that extends the tax credit for first-time homebuyers (FTHBs) into the first half of 2010. In addition, the extension also opens up opportunities for others who are not buying a home for the first time.

First Time Homebuyer Tax Credit Extended Into 2010!
Plus...A New Tax Credit for Certain Existing Home Owners!

It's official. President Obama has signed a bill that extends the tax credit for first-time homebuyers (FTHBs) into the first half of 2010. This program had been scheduled to expire on November 30, 2009.

In addition to extending the tax credit of up to $8,000 through June 30, 2010, the extension measure also opens up opportunities for others who are not buying a home for the first time.

So Who Gets What?
The program that has existed for FTHBs remains intact with the one exception that more people are now eligible based on an increase in the amount of income someone may now earn.

Additionally, the program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.

Deadlines
In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.

Higher Income Caps in Effect
The amount of income someone can earn and qualify for the full amount of the credit has been increased.

Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible.

Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.

Maximum Purchase Price
Qualifying buyers may purchase a property with a maximum sales price of $800,000.

First-Time Homebuyer Tax Credit – Frequently Asked Questions
Here are answers to some commonly asked questions about the tax credit.

What is a tax credit?
A tax credit is a direct reduction in tax liability owed by an individual to the Internal Revenue Service (IRS). In the event no taxes are owed, the IRS will issue a check for the amount of the tax credit an individual is owed. Unlike the tax credit that existed in 2008, this credit does not require repayment unless the home, at any time in the first 36 months of ownership, is no longer an individual's primary residence.

What is the tax credit for first-time homebuyers (FTHBs)?
An eligible homebuyer may request from the IRS a tax credit of up to $8,000 or 10% of the purchase price for a home. If the amount of the home purchased is $75,000, the maximum amount the credit can be is $7,500. If the amount of the home purchased is $100,000, the amount of the credit may not exceed $8,000.

Who is eligible for the FTHB tax credit?
Anyone who has not owned a primary residence in the previous 36 months, prior to closing and the transfer of title, is eligible. This applies both to single taxpayers and married couples. In the case where there is a married couple, if either spouse has owned a primary residence in the last 36 months, neither would qualify. In the case where an individual has owned property that has not been a primary residence, such as a second home or investment property, that individual would be eligible.

As mentioned above, the tax credit has been expanded so that existing homeowners who have owned and occupied a primary residence for a period of five consecutive years during the last eight years are now eligible for a tax credit of up to $6,500.

How do I claim the credit?
For those taking advantage of the tax credit in 2009, you may choose to either apply for the credit with your 2009 tax return or you may apply for the credit sooner by filing an amended 2008 tax return with Form 5405 (http://www.irs.gov/pub/irs-pdf/f5405.pdf).

Can you claim the tax credit in advance of purchasing a property?
No. The IRS has recently begun prosecuting people who have claimed credits where a purchase had not taken place.

Can a taxpayer claim a credit if the property is purchased from a seller with seller financing and the seller retains title to the property?
Yes. In situations where the buyer purchases the property, even though the seller retains legal title, the taxpayer may file for the credit. Examples of this would include a land contract, contract for deed, etc. According to the IRS, factors that would demonstrate the ownership of the property would include: 1. the right of possession, 2. the right to obtain legal title upon full payment of the purchase price, 3. the right to construct improvements, 4. the obligation to pay property taxes, 5. the risk of loss, 6. the responsibility to insure the property and 7. the duty to maintain the property.

Are there other restrictions to taking the credit?
Yes. According to the IRS, if any of the following describe your situation, a credit would not be due.

• You buy your home from a close relative. This includes your spouse, parent, grandparent, child or grandchild.
• You do not use the home as your principal residence.
• You sell your home before the end of the year.
• You are a nonresident alien.
• You are, or were, eligible to claim the District of Columbia first-time homebuyer credit for any taxable year. (This does not apply for a home purchased in 2009.)
• Your home financing comes from tax-exempt mortgage revenue bonds. (This does not apply for a home purchased in 2009.)
• You owned a principal residence at any time during the three years prior to the date of purchase of your new home. For example, if you bought a home on July 1, 2009, you cannot take the credit for that home if you owned, or had an ownership interest in, another principal residence at any time from July 2, 2006, through July 1, 2009.

Can you buy a home from a step-relative and be eligible for the credit?
Yes. Provided the person you are buying a home from is not a direct blood relative, the purchase would be allowed.

Can parent(s) who will not live in the property cosign for a mortgage for their child and the child that is a qualifying FTHB still be eligible for the credit?
Yes.

Can a separated spouse who has not owned a home for four years qualify for the FTHB tax credit if the spouse has owned a property anytime in the last three years?
No. However, the spouse may be eligible for the repeat buyer credit. The best path to take in any situation regarding income taxes is to speak with a professional tax preparer or CPA.

If you have any questions that fall outside the situations here, give me a call and if you do not have an accountant to speak with, I can refer you to one.

Paul and Maria Wagner Loan Closing February 13, 2009

Fantastic timing for best rates in history, Paul and Maria! Took their 30 year mortgage to a 15 year term and lower rate! Thanks again for the opportunity to help you with your mortgage loan!

Maria and I want to thank you for the hard work you put in, and the amount of time you put in to get us the best loan possible, you were there in the beginning when we first bought our home and you have been there ever since .

You are truly the best and its shows in all that you do, once again thanks, by the way your gift is appropriately displayed where all can see, THANKS Marty...

Paul and Maria Wagner

2/16/09

Brad and Amy Forsberg Loan Closing January 26, 2009

The Forsberg family ready for loan closing for the purchase of their new home! Jon and Michelle Hiatt were their buyer's Agents and did a fantastic job of selling their home and finding them a new one!

Hi Marty,

Just wanted to say thank you again for everything.

We had a great experience working with you and will share your name with anyone we know buying a home.

Thanks, Amy and Brad Forsberg

Ed and Julie Soriano Loan closing January 30, 2009

Marty with Julie and RJ Soriano at their refinance closing where they got one of the best rates in 50 years! Congratulations on the perfect timing!

Gary and Elly Robinson Loan Closing January 23, 2009

Gary, Elly and Marty at their refinance closing at Inwest Title-Rachel Miller Escrow Officer and photographer.

Thanks Marty,
Appreciate all your help and hard work you did on the refinancing of our mortgage.
It saves us a couple of hundred a month in our payment, awesome!

Elly Robinson

In January 2009, my wife Elly and I had the privilege to work with Marty Qualls, Sr. Loan Officer. In my experience with Marty, he is always prompt and followed through with whatever he said that he was going to do. His nature is pleasant and inviting. In looking for the best rate when we refinanced, he helped us secure an awesome rate.

As it was our first time refinancing a house, it was unfamiliar territory. Marty made the experience very easy. He made sure that we understood all the information and took the time to explain to us the processes as we went along. He also took the additional time to answer clearly every question that we had. Marty Qualls is a man of sincerity and integrity. I would highly recommend Marty Qualls to work as your Mortgage Lender.

Thanks Marty,

Gary Robinson
Associate Broker
ERA Webber Real Estate