My New Blog

SPRING IS IN THE AIR (or not)

Over the past several months I've been working on a Podcast radio series that goes in-depth into the mortgage industry to dispel the myths and expose the truth about what consumers hear every day.

I would love to get your feedback about the show and answer the questions you want to know. Listen in by going to PodcastRadioAmerica.com. Go to the Homewise tab and select "The Mortgage Insider".Have a fantastic spring and as always if you know anyone who is looking to refinance or purchase a home please let me know. I'll work hard to honor your referral and earn their business.

The Fourth of July for me is a day that embodies American tradition. Parades, fireworks, barbecues, picnics, baseball, family and Mom's apple pie go hand in hand with the celebration of America's Independence. In spite of the news & economy you can't help but feel more optimistic this time of year when we take time to remember America's founding and driving spirit of freedom.

Property ownership is a tradition and privilege with deep American history. The Declaration of Independence lists many abuses and usurpations and several were against property rights. In the United States Constitution Amendment III and Amendment IV are specific to rights of property. While I don't believe home ownership is a right it is clearly an American privilege.

Home prices have been flat and interest rates are still low. Making it a great time to refinance or purchase a home. If you know of anyone who's thinking of purchasing or refinancing please let us know. We will work to earn their trust and honor your referral.

Clem Borkowski

A new bill has passed the House of Representatives that will exclude paid medical charge offs and collections from the credit report. According to statistics 41% of American households have carried some kind of medical debt since 2007. Once that medical debt hits your credit report it can wreak havoc on your credit score. Since the type and amount of a collection is not factored into the scoring models, even a $5 medical collection could cost you 100 points or more on your credit score.

Medical debt is not the borrowers fault; no one chooses to be sick or get in an accident. It has long been felt that these debts should not be used against a borrower in determining their credit worthiness. Yet even paid off, medical collections can significantly damage a person’s credit score for years, causing them higher interest rates and even denial for loans.

This bill actually amends the Fair Credit Reporting Act under section 605 to read (a)”any information related to a paid or settled medical debt that has been characterized as delinquent, charged off, or in collection which, from the date of payment or settlement, antedates the report more than 45 days.” This means that 45 days from the time a collection is settled it must be removed from the report. Currently, a collection will stay on your report for 7 years from the date it went into collection.

Up until now it has always been advised not to pay collection accounts, especially older ones as it could actually hurt the credit score by bringing the activity date current. For medical collections it will now be advisable to pay them off promptly as they will have to be removed within a very short period of time. Under this bill, agencies collecting medical accounts will be required to stop reporting once the account has been paid for 45 days.

One question is going to be, are the bureaus going to develop new scoring models to accommodate this new law or simply “tweak” the existing scoring models. Until this is decided, a borrower paying off a medical collection should get something in writing stating the account is paid. The borrower can dispute the account directly with the bureaus to have it removed after 45 days have elapsed. This will have to be policed by the Federal Trade Commission so having this documentation will be critical to the borrower.

This bill will be voted on in the Senate and if approved will be signed into law by the President. Once it is passed and is signed this could mean a significant increase in many borrowers’ credit scores. Ultimately it could open up doors for borrowers’ to qualify for loans due to these higher credit scores.

While this change has been a long time coming, relief might just be right around the corner….

Guest Blogger
Mindy Leisure
Advantage Credit Inc of Colorado

SkiHawk Mortgage is pround to partner with Pat Boone to promote his new premium meat company and help fight world hunger. Read below the press release and click on the Pat Boone All-American Meats link on our home page to place your order and help fight world hunger while enjoying the best steaks available for your family.

Cary, NC — December 7, 2010 — Pat Boone All-American Meats (http://www.patboonemeats.com/), founded by 1950s entertainment icon and well-recognized philanthropist Pat Boone, is proud to promote its business of to-your-door delivered mouth-watering steaks and other premium-quality cuts of beef, a business established with a mission of ending world hunger. A proceed of every sale affiliates generate will go to help feed hungry families in all corners of the world.

Pat Boone All-American Meats delivers a renowned line of hand-trimmed rib eyes, New York strips, T-bones, Porterhouse, thick-cut filet mignon and sirloin steaks directly to patrons’ doors. All premium-quality beef is grain-fed and slow-aged for optimum tenderness and taste, and has been sourced and processed by the choicest U.S. beef producers. At least 5% of all consumer purchases goes toward the nonprofit Pat Boone Foundation, which provides direct support to multiple organizations actively addressing the endemic of world hunger. Affiliates promoting the Meats with a Mission or “Feed the People” campaign can also feel good about driving sales that support U.S. farmers and ranchers, and core American values such as families gathering around the dinner table together.

“I’ve long been an advocate for preserving two very important facets of the American experience: family and philanthropy,” Boone said of his new All-American Meats business. “It is our goal to promote core American values, such as family dinner time and giving back to community. What better way to celebrate and encourage these values than by offering an excellent steak for a family to enjoy, knowing that all affiliate sales and purchases can directly help those in need.”

If you haven't been paying attention over the past 11 days then you've missed one of the most volatile periods in mortgage rate history. The low point for the year was November 4th. One day after the Federal Reserve announced the spectacular Quantitative Easing 2 program (learn more about that by watching this easy to understand video).

The experts said to expect lower rates. Of course the exact opposite has happened. Over the past 11 days the cost for an interest rate (either charged or credited by the lender) increased over 200bps (2%). In generic terms that means roughly a .25% - .375% higher interest rates for everyone.

We've said all a long that interest rates would need to rise but we just didn't think it would be over a 10 day period. In the short term we suggest to take what you can get and lock in your loan. Close and never look back. Predicting right now for more than 5-7 days is a high risk. If you're in the home purchasing market and could be more than 30 days out we suggest qualifying you payments on rates .25% - .375% higher then current market. That way if rates continue to rise you know you can qualify and the payment is in your budget.

 We'd like to thank Ben Bernanke for a wild roller coaster ride. But enough already we would like to get off. More to come soon once we can read the "Federal Reserve Tea Leaves" clearly.

At least once a week I'm asked by a client what I think they should do with their home. The answer usually falls in to 3 categories, fix it, sell it or burn it (of course just kidding on the last one, kind of).

For today's blog entry lets talk about the first option "Fix It". Because of the decrease in home values most people who have decided to stay in their home long term don't have the option of using a home equity line of credit to update/upgrade their home. As was often the case over the past decade this was a quick easy way to get money. But what options do you have today, short of simply paying cash?

Riding in on a beautiful white horse is the FHA 203k rehabilitation loan. No this isn't a way to finance rehab for uncle Ted's undesirable lifestyle, it's a way to get money for home improvements.

The idea is pretty simple, we get to look at the future value of your home (and sometimes up to 110% of the future value) after improvements are made and lend you the money to make those improvements. With today's low rates there couldn't be a better time to check into this option if you are thinking of renovating your current home or if you want to purchase that new fixer upper at a discount.

Attended the annual Economic Forum with Chris Inlow, renowned economist from First Tennessee last night. Thank you to Integrity Bank and Trust for hosting the event. I can't wait for next years event.

Interesting forecast on interest rates moving forward. Chris was forecasting that federal funds and government bonds will decrease in yield (interest rate). That's great news for home owners in the refinance or purchase market. But....

There was a downside to this awesome forecast. He is also forecasting another 20% decrease in home values nationally over the next year or so. That means you could be waiting for the incredibly low rate while your home value drops and causes you to be ineligible to refinance.

Anyone reading this blog that's thinking about refinancing I would encourage you to contact your loan consultant and ask for a proposal. Knowing your options will give you the peace of mind to know when to act or when to wait.

As you can see we're on top of updating the blog. It's been 345 since the last post. Needless to say the past year in the lending industry has been interesting. Many new programs and guidelines to talk about.

First, the Home Buyer Tax Credit is still available for contracts written by April 30th, 2010 and closed by June 30th, 2010. The credit not only includes $8,000 for first time home buyers (haven't owned in past 3 years) but also now includes $6,500 for people who own but are purchasing a new primary residence. For full details click HERE.

Second, there are still many government backed and Fannie Mae & Freddie Mac programs to help home owners who are upside down (owe more than the value). If you think that's you, I encourage you to contact us to find out if there are options before the programs go away. We're have closed many home loans using these programs and understand the options available.

And last but not least. Interest rates are still very, very low. Because of global economic pressure this can't last much longer. I expect to see an increase of .50% to 1.00% in interest rate by the end of the summer if not sooner. Don't miss out on a great time to buy or refinance. It could be decades before rates go this low again.

Thanks for reading and I'll make sure it's not another year before the next update.

Clem Borkowski
Branch Manager
SkiHawk Mortgage - a Universal Lending Company

We've had so many requests for the VA IRRRL Streamline Loan I thought this would be a great time to give some details of how the loan works and why someone would want use the program.

The VA IRRRL (Interest Rate Reduction Refinance Loan) is one of the last common sense loans left today. You must have a current VA Loan to be eligible and if you do VA takes a very simple approach. VA is currently the guarantee on your home loan and bears the risk if you default. So the logic is if you can lower your payment then you're probably more likely to keep making the payments (I know, you would think all the banks would think this way).

So VA makes the process very simple, if you've made your last 12 months payments on time you qualify. No income verifications, No Appraisal, No Asset verification, No Credit Check. You can even refinance a home you're using as an investment property.

If you have a VA Home Loan now you should check to see what interest rate is available today!