What a topic of discussion in the past 30 days....... The DOWN PAYMENT ASSISTANCE PROGRAMS !!!!!!
For many of you, you have until September 30th to have a lender actually underwrite your loan and sign off on the MCAW. For those that don't understand, stop listening to the rumors that the Down payment assistance programs, such as Nehehmiah, Ameri Dream, & a few others, are done after August 29th. That date has been mentioned because Countrywide and Wells Fargo have told their loan officers that they can't accept any loans after August 29th. That is a whole month prior to the date that HUD set and HUD is like god in a way. It basically comes down to your lender.....
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Just because Countrywide & Wells Fargo are some of the biggest lenders out there, doesn't mean when they say something, the mortgage world stops And if you were promised this type of program with them, call them now. They should have called you though.
I have read and I have had calls from realtors, loan officers, and consumers that the DPA program will stop before September. It was passed in congress and signed by the president to be banned by October 1st, 2008. Any rumors out there, might not be a rumor, but by that specific lender. Unless HUD authorizes a mortgagee letter stating otherwise, business as usual until 10/01/08. And this is the date that the lender needs to approve the loan, not close the loan, settle the loan, or fund the loan.
I just had a consumer call me yesterday from Florida, from reading my blogs. He told me that he had been pre-approved for a FHA loan by Wells Fargo. I first asked him, "are you sure that you were pre-approved"? He said yes, and that was what he told his realtor. I then asked this client if he had filled our an application and gave the lender pay stubs, W-2's, and bank statements. He said no to all questions. I then explained that he was not pre-approved. He understood the difference and was upset, to as why this loan officer told him and his realtor that he was pre-appoved. For a complete understanding of this, please read : The difference between a Pre-Approval and a Pre-Qualification letter.
One other thing that he was very disappointed about. That Wells Fargo has issued last week, that all DPAloans would be stopped with their company by August 29th. This client is still shopping for a home and was very upset that his loan officer hadn't contacted him as of yet.
The moral of this story is that you want to work with a true mortgage professional. Someone that is on top of things and will tell you even when they have bad news, and not wait around. And this is also a good example that even your local lender might not always be your best for a smooth closing. I asked this individual if I could help him and he said that he wasn't sure, because I was out of state. Not all lenders out of state are bad. As I pointed out to him, I explained everything to him in a timely manner. That he read a handful of my blogs that said they were more informative than the loan others that he spoke with locally. I have over 16 years of mortgage experienceand that I know most things about about FHA loans. About 80% of my business is now out of state, which means that more people trust me, even if I am 1,000 miles away. I just closed on a client in Miami, Florida today and she received her deposit of $2,500 back at closing. Meaning, she didn't put a dime out of pocket for her closing. And it went very smooth, even though I am based out of New Jersey. Just food for thought, next time you are deciding on what loan officer to use for your mortgage transaction. It doesn't matter if it's a FHA loan or a conventional loan, please don't hesitate to call me. thanks, jeff
PS... I am heading down to DC the 2nd week of September. The fight is not over as of yet. There is still hope and this fight is picking up speed and votes. It still might be alive, but with some new rules. To help with this fight, please click on this link : http://www.dpagroundswell.org
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For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!!
Copyright © 2008 by Jeff Belonger
Great post here J. There's so much disinformation here. There's really two reasons for it. First, the companies really aren't leading or directing or educating their loan officers. Wells and CW just send out e-mail blasts, but there are no leadership trainings for the LOs. Secondly, great loan officers WANT TO KNOW the latest. The truth is in what you've said. THE LOAN HAS TO BE UNDERWRITTEN BY A DE prior to that date....the trailing problem is getting an investor to buy the loan. The X factor is will the DPA revival bill actually pass? A lot on our plates dude.
Good information Jeff. Hopefully you get that loan from Florida since the LO dropped the ball. I know we were notified by CHL about the upcoming dates and perhaps Wells Fargo also (I dont get daily updates from them although we work with them). Im waiting to hear about the new bill to see where that takes us. If all goes well, perhaps DPA will be back with some minor alterations.
Whats wrong with them? They take forever to close loans, they dont return calls and on and on and on.... at least the wholesale side is that way.....
Wells Fargo is one of the most difficult banks we have worked with yet. Sometimes a LIVE person who can make a call on an issue is welcome.
Tim - wow I never made it to sometimes. I had an East Coast regional trainer for their reverse mortgage division in my office, sitting down and personally put the first reverse file together we ever submitted to Wells. After many days of attempting to locate the status of the loan, we were advised it was a poorly submitted file. hmmmmmm
JB-I have heard so many different stories from fellow Realtors in my office about the DPA programs. It's good to finally have the facts! Thanks for fighting so hard for all of us. You're the best!
Jeff- Thanks for the DPA Groundswell link. I sent my letter and forwarded the link to some other people as well.
I have one hot listing that is overpriced and attractive to the DPA peeps. I can tell who is pre-apped with CW and WF and who is not. My seller is absent till the 1st. Some are requiring a seller decision by the 29th.
OK. I'm going to do my usual. Here's my totally off topic comment. Every time I see the word Nehemiah, I get distracted and can't focus on the post. Why? Because it's a book of the bible. LOL! It comes right after Ezrah and before Esther. =p
Jeff,
Thanks for the post. There are so many rumors out there, helping to misguide consumers. Very important to continue to speak truth to the power of these rumors and set the record straight. Likewise, the continuance of the effort to ensure that the DPA option remains a free choice for those who wish to embrace it.
Jeff - Once again a post chock full of information about the state of the mortgage world regarding DPAs. There are so many rumors flying around right now. And it's sad to continue to see the misinformation that is being given to prospective buyers about their loans.I don;t have any clients right now who are impacted, but know folks who are...lots of questions, adn concerns about timing, etc. And who knows what will follow? YOur thoughts?
Jeff
Very timely and informative post Jeff, which I sincerely appreciate. So many land mines out there for potential buyers. True mortgage professional is the only way to go.
LARRY.... there is a ton of it, in blogging and when I speak to a consumer that was told one thing, that I could prove that is totally wrong. Hey, we aren't perfect, but if you aren't sure, ask before tell. If you were taught wrong, then I guess you can't help that. But most of all, if you know, but don't tell it all or give it a different twist, to me that is misleading or a bait and switch.
In regards to when the last day is... that part kills me, because HUD specifically came out and said when. Yes, lenders can change it to when they want, prior, but just because they change it, doesn't mean that it goes for everyone. thanks for the support.
JOHN..... this story is actually about a loan officer that works for Wells Fargo... not as a broker. So, they found out first hand and he still didn't pass the information along to this consumer. The consumer found out Monday himself, without hearing from the lender...
In regards to getting the loan? Kind of funny... this guy was gung ho about getting a house, but after finding out because he was 'qualified, not approved' by Wells.. he said he will have to talk to his wife and think about it. I kind of can read through that, because one of his concerns was that I am out of state and that he can't sit down with me. Hey, I understand that .... so, he is going to go try and find someone local, that is going to be as upfront as me and that I supplied the same good info my blogs (that this consumer complimented me on... than what others told him, locally)... and take that chance again? Business or not, that is a 50/50 shot and it could back fire on him again. I guess time will tell. thanks
LEWIS...... I don't use Wells for any loans. Besides, even though you have a huge success as a broker with a few of your lenders, I don't have to worry about that, since all of my stuff is done in-house, as you know. Besides, you are very lucky to have a great relationship with one of the lenders that you deal with. If I have to put up with anyone that is slow, it's all within my company, and that's it. thanks
TIM & PAM..... as I told Lewis in the above comment... we do everything in-house, underwrite and close our on loans. We then sell them to Wall street investors such as Wells, CITI, and a few others. I don't have to wait around like most brokers do, with the acception like Lewis above, because of his tight relationships. Besides, just curious... why would you talk to them? Or is it a loan officer that you use, uses them? Just curious...
LEWIS..... funny story... hence why I tell some people when they tell me... well, I have spoken to their manager or .. hey, he is the owner of the company. To me, that doesn't mean much sometimes, because even people with titles don't always know what they are doing or talking about.
BETH...... and the sad part about this is that realtors in most cases should be like... I am not sure, talk with your loan officer, if you trust them. Nothing against realtors, but so many try to make it look like they know a lot of what is going on with mortgages.... and who knows, it could be their loan officer or lender giving the wrong into to begin with.... just my ,02. thanks
Jeff,
Great post and thanks for getting the word out. It all comes back to the lenders creating stricter guidelines than HUD and brokers interpreting that to be a HUD ruling- kinda like the FHA lending under 580 credit scores.
It really does emphasize how important it is to deal with a government loan expert when looking for low down financing in general. Like we have both said repeatedly, we can do credit scores to 500 and we can close Down payment assistance until October 1st and beyond (if approved prior) but there are so many other lenders that simply can't.
It's been keeping me too busy to blog lately so thanks for picking up the slack. I'm also pushing the new bill from this end and want to thank you for taking the time to support it. Many don't realize the time it takes to represent our industry and I want you to know I appreciate your efforts!
Gerry Suarez, Jr.
Your HUD Loan Pro!
Thanks Jeff for clarifying that about the cut-off dates. I was personally told it was earlier too and a matter of fact it was from Wells Fargo. Hmmmm.
I hope the down payment assitance programs do NOT get axed.....
A LOT of first time buyers NEED these to purchase a home....
Did they say WHY they are shutting them down?
I agree that people should work with a true mortgage professional. It amazes me that there are still loan officers out there that is not properly defining the difference between a pre-qualification and pre-approval.
Jeff, wow, what a great blog. I truly learn from you and I look forward to reading them every week
Dave
GERRY.... I am going to be writing a post tonight on this.... I have a current client that has spoken to 5 other lenders. I am the only that feels that I can do her loan if we can get her front ratio to 39%. She said all 5 said they couldn't do it because of her credit score, but she is mad, because nobody said that her qualifying ratio was a problem... lol Besides, she was like... I get overtime.... but her overtime was hald of that in 2007, so I have to average that. How much do you want to bet that most of the people that she spoke to, used this years overtime and didn't ask what she made in 2007. And now she has doubts with me.... but I am the one that says we could do this... she has a 565 mid score. I can still do it.. kind of funny, yet scary. Because I need to get it over 580, so I can use the difference in the fico score hit to pay for her costs. Anyhoo.... In any case, it sounds like your hands are full. Thanks for stopping by and for the support.
LYN.... my pleasure... I only decided to write about it when I was even reading some misleading blogs on here.... and loan officers and realtors were making it sound like this was HUD's decision... so misleading and scary.
ALEXANDER...... well, you aren't the only one that feels that way also. As I have told a few, I will be making a trip down to DC for a few days to speak to some of the Senators personally. We shall see. If I was a betting man, I think there is a good shot at bringing this back.
LINDA..... yes, and that is very scary and truthfully? Pisses me off. I really have to question someone when they tell me that they were pre-approved. When I asked if a application was taken and if they handed pay stubs and bank statements... and they no... I chuckle. And that is sad. But you know what, many of these loan officers are just good sales people. The average client doesn't know any better and the loan officer knows this. So... they dangle such things as pre-approval in front of them, to make them stay and to feel comfortable.
DAVE..... wow, thank you very much for such an award winning compliment. It's appreciative.
salesman extraordinaire + limited product knowledge = death
no personal skills + product knowledge = death
sales skills + product expert = mortgage survivor bottom line!
in the year of 2008 in the mortgage industry, if you are not a product expert you will die because Jeff Belonger or Gerry Suarez Jr. or someone else who is an FHA expert, a reverse expert, a VA expert will sell circles around you..... Learn FHA guides. Learn FHA sweet spots. Learn FHA tolerances.
If you do not know your products like the back of your hand, go do something else! You will never make it through the next year....
Jeff: Thank you for bringing this to light and making it clear for the financially challenged such as myself. Go get 'em in DC !