Mortgage Talking Points

Freddie’s HomeSteps special financing for their foreclosed properties has been extended to Jan 31, 2010.  Why don’t they just extend it for 6 months at a time–instead of month to month?  Updated MortgageTalkingPoints(r) posted on the site. 

http://www.mortgagecurrentcy.com/downloads/TalkingPoints_HomeSteps_111009.doc

The 49 page consumer booklet has just been released on HUD’s site.  You’ll need to start using it on Jan 1, 2010. 

 It’s the best I’ve seen–and recommend that you use as YOUR tool to explain the process to your clients.  Suggest you start on Page 11, called “Your GFE Step-By-Step”.  Hold a sales meeting with Real Estate Agents and review the booklet with them as they will be getting questions about it too.  (Pages 4-8 apply to them)

On the same page link, you’ll also find a 29 page ”power point presentation” by HUD called ” RESPA Training - Dec 2009″  No audio but suggest you print and review. 

http://www.hud.gov/offices/hsg/ramh/res/respa_hm.cfm

Now that the banks have sucked the money out of our economy and then our government they are hell bent on holding on to it.  It’s no secret in the mortgage business that lenders are doing everything they can NOT to lend. 

 I’m not talking about making risky loans. I’m talking about preventing qualified, responsible people from buying a home.  Even when loan applications meet every federal lending guideline the wholesale lenders apply restrictive “credit overlays” to deny mortgage loan applications.  Furthermore, it appears that experienced underwriting specialists have been replaced with less costly processors who have no concept of analyzing risk.  The cost cutting has also left lenders understaffed and inefficient.

 Another tool conspicuously disguised as consumer protection is the new Home Value Code of Conduct.  By prohibiting loan originators from ordering appraisals from qualified and licensed local appraisers the banks have found a way to undervalue properties using Appraisal Management Companies (AMC) in which they share ownership.  Not only do consumers get overcharged for each appraisal, they also get charged for multiple appraisals whenever the application has to be transferred to another lender even when the same AMC does the additional appraisals.  This is the biggest scam ever perpetuated on consumer borrowing

As if that wasn’t enough here’s another assault on local mortgage companies and consumers, once again, in the name of consumer protection.  Wholesale lenders have capped fees to originators (makes sense) BUT the maximum fees include all the lenders junk fees and the rules do not apply to lenders who are permitted by law not to disclose what they are earning on a loan.  In other words, if you can conceal your fees from the borrower the maximum fee limits do not apply

The bottom line is that no one seems to care that at the other end of all these injustices is an American family trying to own a new home.  In the big picture it means jobs for the real estate, construction, insurance. home improvement, and all other related businesses.  None of this happens if the banks don’t do what they are responsible for doing: lending.

 -Danny

 Daniel J. Poulos

561.575.5626

www.EliteLending.biz

www.RealEstateRoadkill.com

HUD’s Just Posted “Practice” GFE - Link Provided Started by Karen Deis. Save in Folder Just about a week ago, HUD posted a “practice” GFE form on their website.  You can fill in the blanks and get a feel for what to expect when January 1 hits!  Here are two links.   This One should take you directly to the GFE form. http://www.hud.gov/offices/adm/hudclips/forms/files/1-gfe.pdf This one will take you to the HUD Clips site, and then click on the PDF version: http://www.hud.gov/utilities/intercept.cfm?/offices/adm/hudclips/forms/files/1-gfe.pdf

HUD’s Just Posted “Practice” GFE - Link Provided

Just about a week ago, HUD posted a “practice” GFE form on their website.  You can fill in the blanks and get a feel for what to expect when January 1 hits!  Here are two links. 

 This One should take you directly to the GFE form. http://www.hud.gov/offices/adm/hudclips/forms/files/1-gfe.pdf

This one will take you to the HUD Clips site, and then click on the PDF version: http://www.hud.gov/utilities/intercept.cfm?/offices/adm/hudclips/forms/files/1-gfe.pdf

Like most government legislation, the Nov 6, 2009 homebuyer tax credit extension created more questions than answers.  However, according to Doug Geissler, CPA, the IRS is literally writing the “refund rules” as they go along. 

Unbeknown to homebuyers, real estate agents and the mortgage industry, the IRS is giving behind-the-scenes instructions—that are not available to the general public—to CPA’s and tax advisors on how to file for the home buyer tax credit after Nov 6, 2009.  It will be completely different than what you might have advised your clients previously—and your clients are NOT going to like these changes!

The first shocker?   Your clients cannot file a 1040 EZ to claim the tax credit!  Nor can they file tax returns electronically if claiming the tax credit!  

Read exactly what and how the MAGI is figured; how the forms need to be filed; what docs need to accompany the tax return and the estimated time the IRS is projecting for the tax credit refund! 

In addition, links to the most recent IRS Updates and FAQ’s provided. 

Why no electronic filing or 1040 EZ forms?

It’s the first step in stopping fraudulent tax credit refunds. Believe it or not, the IRS never had a way to determine if a person owned a home—no auditing software in place–to determine if they previously claimed a “mortgage interest” deduction within a 3-year time period.  The IRS is building “auditing software” now to “catch” previous homeowners who are trying to claim a FTHB tax credit. 

Secondly, the IRS now requires that the HUD 1 or closing statement be attached to the 5405 form (and that cannot be attached electronically).

Third, speaking about the 5405 form…unless the home was purchased on or before November 6, 2009, currently there is NO FORM on the IRS website to file the amended return.  Here’s the wording that you will find when you to the IRS website and try to download the form:

And to give them time to audit the document, the IRS is telling tax advisors to expect an average of a 16-week turn around time…which means that it could either be the refund OR a request for additional documentation.  Geissler says that one of his clients recently received an IRS notice, requesting a letter from a landlord, a copy of a driver’s license and the closing statement on an amended tax return where the client was claiming the FTHB tax credit.  Yes, the new law allows them to ask for additional info on amended returns. 

So, what means, that if your clients is expecting an income tax refund AND a homebuyer tax credit refund, BOTH refunds could be held up for several months.  

We all know what adjusted gross income is, right?  But did you know that there are over 20 different “modified adjusted gross income” interpretations for different tax forms and credit tax claims?  

In regard to the homebuyer tax credit, the simple explanation is that is Line 38 on the 1040 form (remember, no 1040EZ to claim this tax credit).  However, if IRS Form 2555 (Foreign Earned Income) or IRS Form 4563 (Exclusion of Income fro Bona Fide Resident of American Samoa) is attached, this income has to be ADDED to line 38 to determine if the clients meet the maximum income limits of $125,000 or $225,000.   While this might not apply to very many clients, it’s something you can counsel your client about if they claim foreign income to qualify for a loan.

Here are the links to the most recent updates regarding the Nov 6, 2009 homebuyer tax credit extension.

10 Important Facts About the Extended First-Time Buyer Tax Credit -  11-30-09

http://www.irs.gov/newsroom/article/0,,id=215827,00.html?portlet=7

First-Time Homebuyer Tax Credit  - 11-24-09

http://www.irs.gov/newsroom/article/0,,id=204671,00.html