Mortgage News
New Fannie Mae Investor Rule
July 26th, 2008 Categories: Mortgage News
Many buyers are choosing to retain their current residences and turn them into rental properties. Ideally, the rent received will be enough to cover the mortgage payment if not more, and in the long run the buyer will enjoy appreciation on the property as well. As far as qualifying for their home purchase, lenders would typically accept 75% of the new rent to help offset the mortgage payment of the retained property instead of counting the entire payment against their debt to income ratios. 
Big change to FNMA guidelines: The underwriter must now obtain a statistical appraisal (also known as an AVM) on the borrower’s current residence to determine the percentage of equity in that property. If the borrower has a minimum of 30% equity in the current residence, then normal underwriting guidelines apply. However, if it is determined that the borrower has less than 30% equity in the retained home, the entire mortgage payment, including taxes and insurance, will be counted against them, regardless of down payment on the new home, credit, etc. This can be a deal killer.
Unfortunately, there have been many buyers that provided fake lease agreements so that they could buy their next home, wrongly assuming that the home would rent quickly. After a few months of the retained property sitting vacant, the mortgage payments still being due, and a depressed real estate market, some of these folks chose to walk away from the old home.
If you have a client that plans to rent out their current home and needs that income to qualify, run comps on the retained property to be safe. You do not want to wait until after you already have an accepted offer to find out they do not qualify. This guideline change is affecting almost all conventional loans including Conforming, Conforming Plus, and true Jumbo even though Jumbo loans are not insured by FNMA. Not the greatest of news, but in the long run this can help in the effort to reduce loan defaults.
Should you have any questions especially if you have a client that might be affected by this change, please feel free to call (760)500-1919 or email me.
And remember to always get your clients pre-approved not just pre-qualified.
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Know Someone Having Difficulty Paying Their Mortgage?
May 15th, 2008 Categories: Mortgage News
All of us know someone who is having difficulties paying their mortgage these days.
We recently received the information below about a non-profit resource they can access. It was given to us by a fellow Realtor, who serves on the Risk Management Committe with me at San Diego Association of Realtors, and I believe it is very good information to pass on to people who find themselves in this situation.
Organization: Community Housing Works 
National Hot line: 1-888-995-HOPE or www.995hope.org
Local Contact: Francisco Gonzales, 619-282-6647
Monthly Home Clinics, Saturdays, sponsored by many non-profit agencies, such as Fair Housing Council, Springboard, etc.
Go to www.housingcollaborative.org for info and dates.
A former Vice President of SDAR, K. J. Koljonen, works at the Community Housing Works. She is VP, resource management. The web page for Community Housing works is www.chworks.org. It has two offices, one in San Diego at 4305 University, and one in Escondido, at 1820 So. Escondido Blvd.
For additional information, please fill out the form and contact us direct:
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