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George Raymondo's Blog

By George Raymondo | Mortgage Broker
or Lender in Chino Hills, CA
  • Thinking About Buying a Home After a Short Sale? Better Think Ahead!

    Posted Under: Home Buying in California, Home Selling in California, Financing in California  |  April 14, 2012 12:15 PM  |  3,542 views  |  2 comments

    As we enter another year of the housing market fiasco, I am reminded on a daily basis how seldom homeowners are being correctly guided through the short sell process by their Realtors. I find many Real Estate Agents are more concerned about just getting the deal closed rather than thinking about the consequences of their advice. Why do I say this? Simple, as a mortgage lender, I am on the frontlines of having to help individuals pick up the pieces of the lives after having gone through a short sale. You can't imagine the horror stories I hear from people every day and how upset they are to find out that most of what they were told by their Agents turned out to be not the case at all.

    What I have found is a commonality among these previous homeowners. I see the converging and intersecting circumstances that these past homeowners all share with one another. As I hear their stories I often times find myself shaking my head and wonder how it is still possible with all the information out there, that people are being misguided by so called Short Sale Specialists? First and foremost, the main culprit that either prevents or prolongs the possibility of re-entering the housing market (after going through a short sale) is being delinquent on their mortgage payment during the preceding 12 months and especially at the close of escrow.

    Prior to the recent changes to HUDs 4155.2  as long as a homeowner brought all delinquent payment current at the time of closing, regardless of having mortgage late payments, I was able to get those homeowners wishing to purchase another home into an FHA loan. With pressure from the current Administration, HUD has recently made it more difficult for homeowners to purchase after having to short sell their previous home. I just do not understand the wisdom here, I try to kind in mind that there are people out there who have deliberately pulled a fast one by doing a buy and bail I get that, but they are the minority.

    But there are literally millions of homeowners, who have fallen on hard times due to a loss of a job, failed business, or a divorce that MUST sell their home. It's not their fault the housing market has tanked. I have seen homeowners who have been in their homes for 10 or 15 years who are upside down. How could these homeowners in million years ever predict this? So what do individuals need to consider in addition to all the other factors while considering short selling their homes? That answer is quite simply this. If you want to purchase a home after your short sale, be it now or in the future heed my warnings and try to follow these rules if humanly possible:

    Rule #1: DO NOT BE LATE ON YOUR MORTGAGE PAYMENTS! If you can pull this off you will have many more options available to you. Don't fall prey to that ole adage, you need to be behind in payments before we can talk to you is just not true! There are Realtors and third party facilitation companies who specialize in short sales whom have teams setup with the sole purpose of handling the negotiation and communication between homeowner and lender. I have seen it, it can happen. Your job as a homeowner is to do your research and be diligent in hiring a listing broker. This can and will make all the difference with regards to your success or failure.

    Rule #2: If you are currently delinquent on your mortgage payments either due to circumstances beyond your control or because you were told to by your Realtor or Lender this was a prerequisite in order to demonstrate a hardship, try at all costs not to go over 90 days late. What most people do not realize is, once you cross that 120 day plus late threshold, your credit report can actually show as a pre-foreclosure or repo and this alone can trigger an automatic denial through the AUS (automated underwriting system) that FHA, VA, USDA, and Fannie Mae and Freddie Mac use. This can make it virtually impossible to get approved for a traditional home loan. Once on your credit, it can remain for years. The question is can it be removed? Yes it is possible but it can take several rounds of disputing that tradeline with the credit bureaus or it can take several hours on the phone pleading with the Bank to remove it.

    Rule#3: Know your options! Did you know as a homeowner, other than trying to modify your existing home loan, you have the option of staying in your home by doing a short-pay refinance? There are several ways to approach and tackle this task, but with proper guidance and a skilled loan officer, it is possible.

    Rule #4: Team up with the Pros! The key to any successful endeavor is to do business with people whom are at the top of their profession in a given industry. So finding a Top Realtor is crucial! These Realtors aligned themselves with other professionals in order to make this process go more smoothly and that can all the difference in the world. Remember the principle of cause and effect, what you do today is what will determine your ability to rise above your circumstances and guide you to success in the future. 

    Click here for a FREE Consultation.

    George Raymondo

    Mortgage Banker

    www.AFN-Loans.com

  • I Have No Credit, Can I Buy A House?

    Posted Under: Home Selling, Financing, Credit Score  |  March 22, 2011 5:04 PM  |  799 views  |  No comments

    How Do I Start Building My Credit?
    by George Raymondo

    I hear that question all the time, "What if I have no credit?" or "Can I Buy A House Without A Credit Score?"  Having no credit is certainly better than having a boat load of bad credit. The question is how do I start building my credit? The answer is relatively simple. What most people do is simply start by applying for a credit card through their own bank. It is the most logical place to start since you already have a banking relationship with them, they are more likely than not to issue you a credit card.

    If you are denied a credit card, don't worry. Most of the major banks offer a secured visa program whereby you simply open a savings account with an amount you can afford. That saving account balance translates into your new credit limit. A great way to insure that your credit score is boosted is to increase your deposit with the bank after 3-6 month therefore it appears that the bank has issued you a credit increase. Works like a charm!

    No doubt each bank has their own set of rules, but generally speaking, after you maintain a good payment history for one year, the bank will usually return your deposit and in most cases they actually increase your limit. This is great way to start building your credit. "So how long will it take to for the account to show up on my credit?" It has been my experience that after 90-120 days there has been sufficient time to start rating your credit and a credit score should appear on all three major credit bureaus.

    Another common way to get started is for a family member or close friend placed you their account as an authorized user.This has been an quick and effective way to at least add a line item to your report. With this option, you will normally inherit the credit history of the account holder. So if they've had a perfect payment history, so will you. But be careful this could work against you if that person is over-limit, had late payments, or has a high balance. Keep in mind this option could come back to haunt you.

    "Is there something else I can do to make my credit better?" Of course, pay your bills on time, this is best advice I can give you. Avoid going over the credit limit and pay your bill just prior to your billing statement posting to avoid interest fees. Do these things and you should be on your way to building a good credit history and high scores. For a FREE Credit Consultation, feel free to contact me.
 
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