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Brent Mendelson's Blog

By Brent Mendelson | Mortgage Broker
or Lender in Bethesda, MD
  • VA loan update for same sex couples in NY

    Posted Under: Home Buying in New York, Agent2Agent in New York, Military Movers in New York  |  March 17, 2014 8:11 PM  |  157 views  |  No comments

    Effective immediately, the Department of Veteran affairs will process and approve applications for same sex married couples where legally possible. Please note that the process for loan approval is subject to final approval from VA. Here is what we were told to do in order to gain VA approval of the loan application.

    VA requires

    (1) date and State of marriage; (2) State of residence at time of marriage; (3)State where subject property is located; (4) current State of residence; and (5) estimated date of loan closing. VA staff will then notify the lender if both spouses’ incomes may be applied.

    This next section is EXTREMELY important also.

    After we as the lender forwards the above information to the VARO <VA Regional Office> they then forward to the VA main office in Washington, DC. This could be anywhere from a 1 to 10 business day process- plan accordingly. In the meantime, loans cannot be closed until the VA Main Office sends email that the borrowers meet VA’s criteria. Borrowers MUST be married in a state that recognizes same-sex marriage AND the property is in a jurisdiction that recognizes those marriages.

    I have requested clarification on my following sentence. "If a same sex couple is married in Maryland, moves to Virginia and wants to buy a home in New York can the VA benefits be used as a married couple? My guess is yes but I do not guess on important questions like this. I'll provide an update as soon as possible and if there are any questions or scenarios please let me know. I specialize in VA loans and if I can assist in any way please let me know.


    Thank You,

    Brent Mendelson
    1st Mariner Mortgage
    Senior Loan Officer
    Licensed in all 50 states
    bmendelson@1stmarinerbank.com
    Office 240-235-5314
    NMLS#111407
  • New York VA jumbo loan update

    Posted Under: Home Buying in New York, Agent2Agent in New York, Military Movers in New York  |  November 17, 2013 8:37 PM  |  151 views  |  No comments

    Contrary to some opinions in the industry VA loans are the easiest loans to get versus FHA and conventional. It's VERY important to understand that there are two factors at play here. The first is VA and what they do and don't allow. The second is what lenders are willing to do. VA is very lenient on credit scores. Lenders however will often use what we call an overlay. So while VA allows down to a 600 credit score most lenders want at least a 640 and some are as high as a 680. 1st Mariner will do them as low as 620 on purchases and 600 on an IRRL. I'm sure some lenders will go even lower than us.

    So that being said there are many VA lenders that won't do the entire amount of a VA jumbo loan at 100%. What's a jumbo loan? Any loan amount greater than $417,000 in any county in the US. Take the highest county loan limit in the US which is $843,750 That means 1st Mariner Bank will loan you <assuming you have an approvable loan> 100% of the county loan limit with no mortgage insurance. If you have a VA disability the funding fee is generally waived. It really doesn't get any better than that. UNLESS you want to buy a house over the county loan limit. What if you want to buy a home for $975,000? Are you allowed, how does it work. The answer is yes you can buy it and do not need to pay the entire difference as many people think. it works very simply.

    You take the purchase price and multiply .25% and take the county loan limit and do the same. In this example the veteran would be able to buy the house and only put down $32,813. That's less than 3.5% and there is no mortgage insurance. You can NOT get a better deal on another type of loan Conventional loans would normally require 20% minimum down payments and very other extremely stringent guidelines and perfect credit.

    VA must conform to the lender and VA rules but this loan provides more flexibility than any other loans on the market. But if the county loan limit for VA is only $417,000 and you buy a $517,000 you can do it and only put down $25,000. Again no MI and low rates and usually very helpful lender credits to help pay closing costs.

    I hope this was helpful and please let me know any questions. I am licensed in all 50 states and have veteran references upon request.

    Thank You,

    Brent Mendelson
    Senior Loan Officer
    1st Mariner Mortgage
    Office 240-235-5314
    Cell 301-412-0259
    Nmls #111407

  • Rules when buying and having a recent BK

    Posted Under: Home Buying in New York, Financing in New York, Agent2Agent in New York  |  June 21, 2013 8:26 PM  |  185 views  |  No comments

    I get many calls for loans with one or both of the borrowers coming out of a bankruptcy. There are different rules for both chapter 7 and 13. Some of the other factors are why the BK occurred, what type of loan you wish to get <VA,FHA,CONVENTIONAL> how many BK filings there have been and by far the #1 most important factor is have you reestablished and maintained good credit since the BK? If you filed a BK and have been late on bills after that it is extremely difficult to get a new loan. Especially on a purchase. Not impossible though. I just did it for a borrower but it was a SERIOUS battle.  A few things to understand if you are going to try and get a loan within the BK period.

    1. Chapter 7 and 11 require a 4 year waiting period from the discharge date. Not the filing date. Discharge date is when the judge signs the paperwork basically starting the clock.

    2. Chapter 13 is a 2 year waiting period and only 12 months for FHA from the discharge date or four years from the dismissal date.

    3. Again it's very important to understand that these are generally minimums that are allowed and banks can and do add additional overlays onto the basic guidelines.  For example there could be a bank that applies a 4 year waiting period and 5 years for multiple filings for loans they will accept. And even if you are past that minimum requirement the loan would still receive extra scrutiny and stand a higher chance of being denied even if approved by Fannie and Freddie. Just because a bank can make a loan doesn't mean they will.

    4. The loan size also matters. Over 417k borrowed is more restrictive and less than that will be slightly easier to obtain.

    Additional requirements can be broken down into two categories.

    Extenuating Circumstances and Financial Mismanagement

    For extenuating circumstances the guidelines are.

    Minimum 620 credit score.
    24 months re-established credit after the discharge date of the BK.
    3 tradelines open and active and paid on time are the general rules.

    For financial mis management the guidelines are

    680 credit scores minimum
    48 months re-established credit since the discharge/dismissal of the BK.

    The following additional credit requirements apply to both of the above guidelines.

    No more than two installment or revolving payments more than 30 days late in the last two years.
    No debt of any type more than 60 days late at all in the time period.
    No housing lates since the discharge date.
    No new records for BK'S, foreclosures, judgements, collections or chargeoffs.
    Proof that credit history doesn't have multiple accounts with credit cards maxed out or near the credit limits.

    There is more depending on each unique situation but this is enough to see if you meet these guidelines. No one involved should ever relax and assume it's a done deal but it is possible If the loan officer is on the ball and doesn't accept the initial resistance AND the borrower know that they will have to work harder for it than a normal loan you have a chance to buy your new home or refinance and save money. Good luck, I hope this was helpful and please let me know any questions.

    Thank You,

    Brent Mendelson
    Senior Loan Officer
    1st Mariner Mortgage
    O-240-235-5314
    Bmendelson@1stmarinermortgage.com
    nmls #111407

  • Mortgage quotes online. Real deal or phony baloney?

    Posted Under: Home Buying in New York, Financing in New York, Agent2Agent in New York  |  May 6, 2013 8:27 PM  |  181 views  |  No comments

    I was questioned over the weekend about my statement of providing a "real" quote as opposed to an internet quote. While I believe the person who asked the question knows the difference it got me to thinking if everyone else did. So here's what I meant.

    To me an "internet" quote is the type that has a rate that seems incredibly low in relation to the competition. Most lenders have generally about the same rates if the criteria quoted is in fact the same. If they just have rates posted that is not a solid quote, in fact that is where the problems can start.

    So when you see one that's far lower either you have;
    A. Found the bank with the LOWEST rate in America.
    B. Found the bank that wants to catch your eye and get you to call.
    <which one is more likely?>

    So what makes up a "real rate quote?"

    1. Credit Score.
    2, Down payment. <LTV> Putting down 40% gets you a better rate than 20% and so on and so forth.
    3. Type of home. Condo? Single Family? 2 unit?
    4. When do you plan on settling? Quoting 30 days for a lock is no good if you can't settle for 60 days.
    5. Type of loan. FHA,VA,USDA, conventional, jumbo etc?

    6. With points or without?
    7. Everyone knows about the 30 year fixed. Did you know there are 25,20,15 and 10 year fixed? Plus 10,7,5,3,1, and 6 month ARMS? All different pricing. I heard someone say on Facebook today talking about his fixed rate 2.5% loan. Could be but not on a 30 year loan. What companies can put in the small print though can hurt you if you don't know whom to trust and how to catch them at their own game.

    Here are just a few games I have seen lenders play in the last few months.

    1. Quote a rate far below industry averages. Either with points, a too short lock period or comparing a 15 year to a 30 year rate. Rates aren't that important, what's the payment is what matters and what does it cost?

    2. Imply that the rate is "fixed" when it's an ARM. It is fixed but not for the life of the loan.
    3. Quoting 15 and 30 day lock periods to show better pricing when they know that they can't actually close the loan in the period advertised.


    These are just a few ways that lenders attract people with rates that while lower might not always be the best deal. I hope this was helpful and I look forward to your feedback.
    GO RED SOX!!

    Thanks,

     

    Brent Mendelson

    Senior Loan Officer

    1ST Mariner Mortgage

    O-240-235-5314

    C-301-412-0259

    F-240-235-8236

    Bmendelson@1stMarinerbank.com

    Lending in all 50 states

    nmls#111407


  • Should I refinance using my VA benefit?

    Posted Under: Financing in New York, Agent2Agent in New York, Military Movers in New York  |  March 8, 2013 1:36 PM  |  172 views  |  No comments

    If you are a veteran and own a home or know someone who is you should read this blog.

    1st Mariner Mortgage has a streamlined VA loan program that in my opinion is 2nd to NONE.
    Here's what we can do and also listed are the major differences.

    1. Appraisals are NOT required on a VA IRRL no matter which servicer you currently have. Most banks will only refinance their own VA loans with no appraisal.

    1st Mariner charges no processing fees, no origination fees to close your VA IRRL loan. TOTAL fees from us are less than $50. Most banks charge $500-$1,000 to process these loans.

    Working with Brent Mendelson and 1st Mariner can also save you an estimated $750 in settlement fees than other lenders and title companies. One of our national title companies charges NO settlement fee on VA IRRL loans where allowed by law. Your state is one where we can offer no settlement fee and no lender fees. I do not believe you will find a better loan program out there with rates this low and most of the fees waived.

    1st Mariner has a program to refinance VA loans with credit scores as low as 600. Most banks will not touch these loans unless you have a 640 score. The rate is not the same as if you are above 640 but it is still probably better than what you have.

    It cost NOTHING to talk to me and find out if this is the right loan program for you. Don’t wait, rates have been headed up and we want to save you the most money we can.

     

    If you have struggled in the past to find a lender willing and able to help I would be happy to take a look and offer any advice. Again this is a no cost, no obligation phone call.

    I attached a Google search engine thread so you can also find out more about me.
    https://www.google.com/#hl=en&output=search&sclient=psy-ab&q=brent+mendelson+va+loans&oq=brent+mendelson+va+loans&gs_l=hp.3...2328.7062.0.7374.24.22.0.2.2.1.281.2876.6j11j4.21.0.les%3B..0.0...1c.1.5.psy-ab.YFaIuhgQeTc&pbx=1&bav=on.2,or.r_qf.&bvm=bv.43287494,d.dmg&fp=2cc7d514406cf5ae&biw=1441&bih=627

    I look forward to talking soon and seeing how we can save you money for years to come. Please let me know any questions.

    Sincerely,

    Brent Mendelson

    Senior Loan Officer

    1ST Mariner Mortgage

    O-240-235-5314

    C-301-412-0259

    F-240-235-8236

    Bmendelson@1stMarinerbank.com

    Lending in all 50 states

    nmls#111407

  • Features and benefits of the VA loan program

    Posted Under: Home Buying in New York, Financing in New York, Agent2Agent in New York  |  December 7, 2012 1:32 PM  |  176 views  |  No comments

    My name is Brent Mendelson and I specialize in VA loans for both purchases and refinances.
    I wanted to take a few minutes and explain how a VA loan works, the features and benefits, a few of the restrictions lenders and VA put on the loan and the main drawback of a VA loan.

    First the benefits.

    A veteran can purchase a home with no down payment. That's right no money is required.
    Even better the loan has no mortgage insurance as conventional or FHA loans.
    There is a funding fee that is waived if the veteran receives VA disability.
    The funding fee ranges from 2.15% for active duty military to 2.4% for National Guard/Reserves if you are a first time buyer. If you are a subsequent user the fees are 3.3%

    If you put down 5% or 10% the funding fee is reduced across the board for all buyers.

    Active duty or retired Army, Navy, Air Force, Marines, Coast Guard are of course eligible provided they were honorably discharged. A little known fact is members of NOAA and the Public Health Service are also included in the VA loan program.

    Surviving spouses of veterans who died in service or from service-connected disabilities (whether or not such surviving spouses are veterans with their own entitlement)

    The loan limits could be as high as $625,500 depending on which county you wish to live. Here is a link for every county in the US. http://www.benefits.va.gov/homeloans/documents/docs/Loan_Limits_2012_Dec_2011.pdf

    If the county you seek isn't listed then the limit is $417,000

    If anyone else knows a loan program that allows a loan of $625,500 with no money down, no mortgage insurance and a possibility of no funding fee please let me know. :) The funding fee is rolled into the loan, you
      do not have to pay it in cash.

    The loan process works much the same as any other loan as far as documents required except for a DD-214. There are other steps though that involve the actual home you wish to buy,

    VA residual income is one of the major underwriting guidelines required to qualify for a VA mortgage.  Residual income is calculated by determining the gross monthly income of the veteran and spouse.  Then deduct from that total gross monthly income the following monthly expenses:

    • State Taxes
    • Social Security
    • Federal Taxes
    • Proposed new monthly house payment (PITI: principle, interest, taxes and insurance)
    • Estimated Maintenance and Utilities
    • Monthly Child Care Expense
    • Alimony or Child Support
    • Monthly consumer debt payments: installment and revolving credit cards

    These are important guidelines and again if the loan officer isn't up to speed on VA loans this is where it generally falls apart.

    There are both fixed rates and ARM'S available as well.
    The loans are assumable which means when you sell the home under certain circumstances the  buyer could assume the actual terms of the loan. In an era of 30 year fixed rates around 3% this could be a HUGE factor in selling the home.

    You are only allowed one VA loan at a time under almost all circumstances but there are exceptions to this rule.

    If rates ever do fall you are eligible for a low cost reduced paper work refinance loan called an IRRL.

    You can also do a cashout to up to 100% limit later if need be also. Most lenders do limit you to 90% however.

    Credit scores are not a priority to VA but they are to lenders. Most will not approve loans under a 640 however 1st Mariner mortgage will down to 600 scores under certain circumstances.

    You can get up to 6% of closing help from the seller but..... you'll probably not need it right now because VA loans currently come with very large lender credits under most circumstances. This amount is different in every case and subject to change with no warning.

    If you have any questions about VA loans in general or specific questions please let me know. We offer VA loans in almost all 50 states for purchase and refinance loans.

    Now for the downside to these loans. There aren't many but there are a few that Realtors and buyers and sellers need to know.

    VA appraisals have never been selected by lenders and are randomly assigned.
    They are much tougher on certain repair aspects of the appraisal process usually on paint and wood issues. Chipped and pealing paint and a rotted deck will ALWAYS be flagged for repair per VA rules. There is no rehab loan like the FHA 203K loan.

    No one else other than a spouse can be on the loan to help qualify for the loan. Not even if the couple is engaged and living together the non married spouse CAN NOT be on the loan.
    There is no non occupant co-borrower.like FHA allows.

    If a married couple uses a VA loan and gets a divorce it's much tougher to remove the spouse from the deed and loan. You can do it but it must be an IRRL hybrid loan.

    The last one might be the biggest downside but actually has the least actual basis in reality.
    Many sellers and their agents believe VA loans involve more red tape than other loans.
    This is up to your lender to step in and help them understand the steps involved and relieve them of the mis-guided anxiety they may feel. VA loans should take no longer than a conventional loan if you have the right VA lender working for you.

    I am the right lender for your VA purchase clients. If I can ever be of service to explain these loans or pre approve your veteran loan please do not hesitate to contact me. I hope this was helpful.

    Sincerely,

    Brent Mendelson
    1st Mariner Mortgage
    bmendelson@1stmarinermortgage.com
    240-235-5314
    Licensed in ALL 50 states
    nmls#111407
    GO RED SOX

  • New York to face higher interest rates after Nov 1.

    Posted Under: Home Buying in New York, Home Selling in New York, Agent2Agent in New York  |  October 8, 2012 5:24 PM  |  296 views  |  No comments
    close [x]
    At the end of October there are HUGE changes coming again to the way loans are priced. Below is a more technical anaylsis of what will happen and why but in a nutshell the change are as follows.

    If your loan is locked BEFORE the end of October and closes within its projected timeframe there will be no change to the rate and pricing. The danger will be if loans are locked and have to be extended after October 31st it will be VERY expensive, almost impossible to honor the lock pricing as currently structured.  So just to clarify if you lock now and close within the time frame the lock says you are good. If ANYTHING goes wrong, no matter what it is going to be a HUGE problem for all parties. It will mean higher rates, points to be charged or in the case of tight DTI ratios it will kill the deal at the last minute. Short sales and foreclosures are particularly vulnerable.

    You might get a GREAT RATE but you better start asking how long the lock is for or you are going to find out in Nov it will be a different story. There will be a lot of blame passed around but there is nothing the loan officer or even the lender can do. Fannie and Freddie are run by Congress so we all know what that can mean. 

    Last thing and very important.
    FHA/VA would not be affected by the G-Fee increases because FHA collects MIP and insures the loan. VA collects a VA Funding Fee and guarantees the loan.

    I hope this was helpful and please let me know if there are any questions.

    Thanks,

     

    Brent Mendelson
    Go RED SOX

    Senior Loan Officer

    1ST Mariner Mortgage

    O-240-235-5314

    C-301-412-0259

    F-240-235-8236

    Bmendelson@1stMarinerbank.com

    Lending in all 50 states

    nmls#111407


     Congress mandated the FNMA and Freddie Mac properly measure their risk of insuring mortgage securities, therefore, later this month, both GSE’s will be adding 10 bps to their “G-Fee” (Guaranty Fee). The financial impact of this is an increased cost within the transaction of approximately 40 – 80 bps.

    -   The G-Fee is an annual insurance payment made to the GSE’s for guarantying the flow of monthly P&I payments to the investors in the MBS’s.

    -   Since mortgages are assumed to have a life-span of 4 – 8 years (varies by bank and owner of MBS’s), the financial impact is 10 bps x 4 – 8 times = 40 – 80 bps.

     

    Earlier this year, the US Congress made FNMA and Freddie Mac absorb the cost of the Payroll Tax Holiday by adding to the G-Fee in March. This was also a 10 bps increase to the G-Fee.

     

    The financial impact of the G-Fee increases are significant:

    -   Prior to 2007, a large bank would have paid 12 – 15 bps in total G-Fee.

    -   By November 1, this will have increased for three reasons:

    o   The GSE’s no longer show significant favoritism to large lenders, therefore, the base G-Fee rose to 25 bps to most companies from 2008 – 2011.

    o   The Payroll Tax Holiday expense: +10 bps

    o   Added G-Fee risk adjustment: +10 bps.

    -   Therefore, today’s rates have the following additional expense paid to the GSE’s in the pricing:

    o   13 + 10 + 10 = 33 bps x 6 year life = 198 bps.

    o   This equates to roughly an increase of 50 bps of additional INTEREST RATE from 2007 – 2012..


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