As a mortgage banker in Florida, I have done my best to help the good paying customers. I also noticed that the original HARP refinance program was lacking because it only allowed customers save money when they were upside down up to 105% loan to value. Based on the huge discounting of home values in Florida, many of my potential customers were quickly ineligible.

Then the HARP limits were pushed to 125%, but still many mortgage customers were left out due to declining home values. Now the good news is that the limits have been taken off completely!  Here are some other recent upgrades that will benefit homeowners everywhere.

As I mentioned, recent improvements include eligibility for Fannie Mae/Freddie Mac customers to refinance if they are over 125% loan to value. Lenders are offering an appraisal waiver option that will appear in the automated underwriting feedback of your file. This feedback will help you avoid the cost of an appraisal and simplify the process. Mortgage holders with interest only mortgages or mortgages with mortgage insurance can now utilize this loan as well. Mortgage holders who originally had structured financing with a 1st mortgage and a 2nd mortgage piggy-back can also lower their interest rate. We will subordinate that second although no new seconds mortgages are allowed. Mortgage holders who own a condo have another set of overlays but I encourage you to try. It depends on the property and the strength of the file.

In the feedback of our underwriting, we see that HARP also offers expanded approval options for customers with tarnished credit or shaky job history or lack of reserves. As a rule, a middle score of 620 is needed but I encourage everyone to let us do the work and check the feedback. Rates are in the low to mid 4’s. If you are currently in the upper 5’s or low to mid 6’s, you should probably look at this loan.

All in all, I encourage any mortgage customer with a Fannie Mae or Freddie Mac loan bought before June of 2009 to call a mortgage professional and see if they qualify for this loan. Saving $150-$400 a month for the life of your mortgage has a wonderful effect on the happiness of your family for years to come.

One pattern I am seeing is that the Fannie Mae side is working smoothly while the Freddie Mac side is having issues with their automated valuation system built into the automated underwriting. One of my sources recently suspended all new Freddie loans until they get that fixed.  Other sources are requiring underwriting feedbacks that have the appraisal waiver in the findings. The appraisal waiver will allow you to avoid the cost of a $400 appraisal by doing a $75 appraisal waiver form. (Also,  no chance that your deal can be killed by a bad appraisal.) The appraisal waiver was a feature of the previous HARP programs but it seemed like it never showed up in the findings. The new Harp 2.0 is much more accommodating with the appraisal waiver. If you are submitting a value that is substantiated by an appraisal web site such as Zillow, you are probably in the right ball park and will get the waiver.

The other major feature of the New Harp 2.0 is that many feedbacks need to shorten the term of the loan in order to get the full approve - eligible status. If the customer purchased their home in say 2007 or 2008, the feedbacks are pointing towards approving a 25 year term vs a 30 year term. This kind of makes sense in that Fannie Mae does not want to “string” these refinances along  another 5 years by offering the 30 year term. From the customers stand point it is still a loan with benefits but the monthly savings will less than anticipated. The other half of the coin is that you will pay your underwater balance down much quicker. Where before 12% of your monthly payment was applied to principal, now 30% will be applied to principal just because of the term.

This is an awesome loan for upside homeowners.  This coupled with a little price appreciation in the next few years will have everybody smiling again in the long term.

Preston Ware

Mortgage Banker

First Main Street Financial

561-329-0075

http://www.prestonware.com

    I have been working within the mortgage industry in Florida for about 18 years now and have never seen anything like what is going on right now with respect to prices for jumbo and super-jumbo mortgages. Interest rates on Jumbo and Super Jumbo mortgages are unbelievable!

Thanks to a negative outlook regarding our economy as well as lackluster investment, interest rates have been pushed to 50 year lows! Mortgage interest rates on certain loan programs such as the 5/1 adjustable rate mortgage and the 7/1 adjustable rate mortgage are in the 3’s.

          For example, current pricing for a 7/1 ARM, $2,000,000 loan, primary residence, purchase, 70% or less loan to value is at 3.75%! (No points, as of 08/30/2011) Second home pricing is similar but not quite as good. (Pricing varies based on scenario)

          There is an old rule of thumb that many customers go by that really doesn’t apply especially with Jumbo and Super Jumbo mortgages. Many believe that it does not make sense to refinance their mortgage unless the customer’s interest rate drops by at least 2%. That is simply not true for a few reasons. First of all there are situations where we as mortgage bankers can pay closing costs for the customer. If I am paying all of your true hard costs you are essentially getting a free loan. If I bring your rate down ½ a percent and the loan is free that makes sense.

          Another situation where that old rule of thumb does not apply is with jumbo and super jumbo loans. Bringing the customer’s interest rate down 1% on a million dollars saves that client about $550 per month. Dividing savings into closing costs that person will break-even at around the 11th month. You determine break-even by dividing savings into closing costs. In other words if they intend to stay in the home and in the loan longer than 11 months, that makes sense.

          Half of the closing costs that a customer pays associated with a mortgage loan are fixed and the other half are contingent upon the size of the loan. Fees such as underwriting fee, application fee, recording fee, credit report fee will be the same if your loan is $30,000 or $3,000,000. Other fees such as appraisal or title insurance or doc stamps and intangible tax will always adjust according to loan size.

Remember, the economy of scales are in your favor with the larger loans, so don’t be deterred by what seems to be large loan costs because when you take into account the power of interest and you intend to stay in that home for the long term it will make dollars and sense. Ask your local banker to put an estimate together on paper so he can show you the money!

Sincerely,

Preston Ware - Main Street Financial

http://www.prestonware.com/JumbomortgagesFlorida

                This is my quarterly “please refer me email”. I have some pretty good things to talk about this time. And please refer me, this is how I continue to help others. As always I hope to be your advisor for friends, family and co-workers. http://www.prestonware.com

                First of all, interest rates are in the mid fours. I understand that many of you feel you cannot do anything because you have little equity but I do have options for up to 110% loan to value- Fannie Mae and up to 300% loan to value - FHA.

                Currently, I am the in-house person for one of the largest real estate companies in Palm Beach county- Realty Elite USA, so I certainly can help with a good realtor for customers looking to purchase a home. Regardless of what you hear it is not impossible to get a mortgage these days although it is more difficult than it was 5 years ago.

                Every year you all should look at your insurance on your home and try to get a better deal. In early 2011, I obtained my insurance license and hung my hat over at American Insurance & Financial in Boca Raton. They will look at your homeowners insurance and ensure that you are getting the absolute best deal. Call me about this. http://www.prestonware.com/HomeownersInsurance

                In addition anyone earning 1% or less on a CD or IRA should look at a Fixed Index Annuity which is a far superior tax deferred vehicle which offers a tax deferred guaranteed return tied to an index based on the S & P 500. This is a product offered by the largest insurance company in the world so you know it is not going anywhere.  http://www.prestonware.com/InsuranceAnnuities

                Finally anyone putting money towards a 401K should seriously consider a 7702 exchange which is a program that will offer far superior benefits and 7-8 times as much retirement savings.   http://www.prestonware.com/7702Exchange ,  http://www.prestonware.com/FixedIndexUniversalLife

                As always, with all of these products I will consult you over the phone, put together an estimate and sit down with you and explain the pluses and minuses.

                Please feel free to call me with any questions you may have.

Sincerely,

Preston Ware

Main Street Financial

561-329-0075

There are all types of calculators to analyze your mortgage whether it is a purchase or a refinance. Depending on whether you are purchasing or refinancing, paying your own costs or having your costs paid for you will determine whether or not you like your loan and where your interest rate will end up.

    If you are determining if a refinance it logical it is important to remember that you have all the time in the world because you are in the home. Interest rates have been pretty flat for quite a while so time is on your side. We have the process down to about three weeks again so it won't be too much of a hassle.

    Another consideration is that you always have the option where "the bank" can pay costs for you. Many customers don't consider this option. Just the other day I had a previous customer claiming that his refinance was unjustified because he wasn't bringing his interest rate down a full 2%. If I bring your rate down 1% and pay 75% of your closing costs, THATS A LOAN and there is a true benefit there!

    Considering a purchase, a good place to start for first time home buyers is the rent vs own calculator.   At least for now, there is substantial savings taking into account the mortgage interest deduction on your taxes.

    Another good part of our estimate is determining the estimate for taxes and insurance. Your previous owner may have been "homesteaded" for 10 years so when you move in that home, and your payment is based on the new tax structure, your taxes may be a completely different story.

    In states like Florida where taxes have been all over the board during the last 5 years I recommend going to your local property appraiser web site to get an accurate estimate of your future taxes.

    Debt ratio calculators and mortgage qualifier calculators really should be generated by the mortgage banker. Every deal in today's world is run through an automated underwriting engine where we have to take into account which income to use and which debts to carry. This type of knowhow comes with years in the business and studying our underwriting guidelines. Please give me a call today.

Sincerely,

Preston Ware

Main Street Financial

561-329-0075

http://www.prestonware.com/MortgageCalculatorswestpalmbeach

Mortgage brokering will be on the decline from now on. As of April 1, 2011 any major lending institution that does not have access to a bank line will be effected by the recent changes in the law with regard to loan originator compensation. The capping of yield spread will mean big trouble for mortgage brokerage companies trying to stay afloat.

Basically, a company can no longer pay a loan broker a yield-spread premium, which is tied to the interest rate of the mortgage. The fee earned will be the same for each and every interest rate offered. This idea was introduced for the consumer’s protection.

The problem with this rule change is that mortgage brokers as companies are no longer allowed to charge application fee which is a standard and acceptable fee to cover overhead. (My application fee is $595.)

Personally I am unaffected by the rule change because my source has the ability to “Bank” but I hate to see another step taken against mortgage brokers by Washington.

As I mentioned in previous posts Fannie Mae is expected to come to an end in about 6 years. These steps will all improve the importance of the local community bank to lend in the communities they are located in. (Which is something they are supposed to do in the first place.)

I expect to see all sorts of interesting new loan products on the horizon as lending becomes more privatized and new players emerge on the scene. Stated loans, foreign national loans, and adjustable rate mortgages will probably come back as well.

Sincerely.

Preston Ware

http://www.prestonware.com

Checking my time line on blogs:

 I think we are on top of things and moving forward in the right direction.

Yes, Fannie Mae / Freddie Mac may go away in 6 years but home buyers will still purchase homes somehow. (E.g.  FHA)  The market will not tank due to lack of financing. The market will tank from lack of demand. (E.g  Not enough good borrowers who qualify.) But the economy is getting better. But if the economy gets better too quick that is bad for interest rates. But the economy isn’t getting better that quick, rates will be good. That’s what we are doing now.

I am happy to see positive vibes coming from the Broward - Sun Sentinel and the Palm Beach Post with regard to home values.  It is good to see something more positive that is based on facts. Around the end of the year I recall reading that last year Broward was up 8% and Palm Beach was down 8% compared to the previous year. Given these other numbers it seems that the area is coming right along.

In April the Sun Sentinel said the market was hot just like it was in 2005.

“Broward Home Prices Hot like 2005” See attached PDF.   Broward Market on the Rise.pdf

Yesterday the tax assessor’s office gave a positive report on “leveling out of values” in Palm Beach County.  Palm Beach Tax Assessors Office states Home Values are Leveling Off

I am not a realtor, I am the mortgage guy but this sounds good to me.

Preston Ware

preston@prestonware.com

http://www.prestonware.com

Over the weekend, I was a little surprised when I was reading the feedback that one of my potential clients was receiving from her new realtor. She was looking around in the low end section of Lake Worth east of I-95 because that is where she had rented for the last several years.

My customer was looking in the $80,000 - $100,000 price range. I had her pre-approved through FHA with a very good credit score, a W-2'd position and about $8000 in the bank. I was very surprised when her realtor shot back an email describing how banks were not lending and we needed more skin in the game, namely 10% or 20% down. I said to myself that is surprising, we are not buying a condo here, we are looking at a single family home. This perception was wrong and all that it managed to do was rattle my borrower and her chances of seeing this task through to the end.My secondary thought was that this new realtor was just trying to make his job easier by putting together a more attractive offer.

Lenders are lending. If I run your deal and receive your automated approval you are good to go. We simply have to validate the information that was provided. Validating is more involved than it used to be but that is my job of explaining everything to the underwriter.

When you hear the buzz about not lending, in my opinion that applys more to the commercial environment. Mostly small commercial banks are suring up their balance sheets in an effort to fight foreclosures on the their own books.  This in turn slows the velocity of money or the amount of lending going on which is counter productive to any kind of recovery. But you can't blame them because it is better to not lend and sure up the balance sheet than be out of business.

Don't be fooled by naysayers. Residential financing is still out here. The Federal Housing Administration (FHA)  requires some money in the bank, a job and a 660 credit score, and a bunch of paperwork. If you have a 600 credit score and three active paid on time tradelines we can still consider your loan.  That doesn't sound too bad does it?

Preston Ware

Equity Loans LLC

http://www.prestonware.com

FHA Loans are keeping the Florida Housing Market Alive

Judging from activity in the South Florida Housing Market, FHA is the mortgage program that is keeping the housing market alive. Our government announced last month that Fannie Mae and Freddie Mac will be shut down in about five to seven years. This is quite a gamble and we can only speculate what our housing market will look like by that time.

About a month ago our "experts" announced plans to start winding down Fannie Mae and Freddie Mac. Just about every person you speak with agrees that this is a gargantuan mistake. Making loans easier to get is what fueled our mortgage frenzy in 2004 thru 2006, and making loans more difficult is one factor that is making our current real estate market more lifeless and sluggish.

Three proposals have been put on the table by our powers that be which leads me to believe our leaders have no plan at all. The authors propose a government re-insurance program to "backstop" private investors. The degree of back stopping is unclear and there needs to be safe guards for maintaining interest rates in the low ranges. If our government is "safeguarding" a private money guy or a hedge fund, those safe guarded rates will be in the 10-15% range. It does us no good what so ever to have a liquid mortgage market at 10-15%.

Stepping back to this decision one has to try to look a little deeper into the transition plan. FHA has certainly been the stellar loan program that has kept our housing market together. FHA Rates are now better than Fannie and Freddie rates. FHA only requires 3.5% down where Fannie Mae and Freddie Mac usually require 5% or 10% or 20% percent down (to avoid mortgage insurance) depending on your cash to close and what level of PMI you want.

Phasing out Fannie Mae and Freddie Mac would also take away yet another product offered by mortgage brokers who have been streadily thrown under the bus by the guys inn Washington. Guys who paved the way for mortgage brokers to lend money to expand the economy and loved it but know suffer from selective memory as to who created those programs.

The only positive that I can see from forcing Fannie and Freddie to cease to exist will be that it may help the small banks. Small banks can open a niche and start lending again. Small local banks are getting clobbered these days by the third phase of the mortgage meltdown that is going on right now which is the commercial meltdown. Residential loans would create a new vehicle to meet and greet the public and get customers walking in the door again and maybe depositing some money or doing other loans. I recall the early days of my mortgage career, I worked for a local bank "SunBank" now Suntrust that did quite a bit of CRA loans. Community Reinvestment Act loans enabled extremely low income customers to get a 95% mortgage with no mortgage insurance. Underwritten by the banks, backed by a local government programs and serviced by the same lending institution. The bank was able to create a lot of good business and support local communities. (What banks are supposed to do in the long run)

My current employer has the ability to bank as well as broker so I guess I will keep an eye on things.

Sincerely,

Preston Ware
Equity Source Home Loans
http://www.prestonware.com

West Palm Beach Mortgage Lender

West Palm Beach is where I make my home. I have lived here since December 2002 and love it. Previous to living here, I lived in Broward County, Florida for 13 years so I am accustomed to the South Florida lifestyle. West Palm Beach Florida is less congested than say Fort Lauderdale, Florida or the Broward County area. If you visit the exclusive island of Palm Beach you may visit some of the most extravegant mansions in the world and the homes of the rich and famous.

If you start to travel west and stop in a few miles, you will encounter fun places like City Place which is downtown outdoor mall complete with live music, shopping and many night clubs and restaurants.

If you venture West from the island of Palm Beach you will encounter the city of West Palm Beach. If you continue to travel west you will find an area known as The Acreage or Loxahatchee with its more rural wide open lifestyle complete with the 1.33 or larger acre lots. This is where I live and I must say I enjoy the wide open atmosphere. There are no zero lot lines here and certainly no homeowner associations with the condo commandos!

As a trusted advisor providing service to my clients for the past 17 years I have been fortunate to meet a lot of wonderful people and also witness the incredible spectacle that occurred within the real estate bubble in Florida and the rest of the country as well as the mortgage meltdown. Values are currently discounted 40% - 60% over what they were in 2005. A typical buyer in todays West Palm Beach Real Estate market is positioned to find a real deal at very reasonable prices.

Nevermind foreclosures and short sales, your mainstream purchase of a West Palm Beach home sold by a West Palm Beach homeowner looking to move on will yield a very nice home at a very affordable price. Prices range from the $100,000's to the $1,000,000 depending on square footage and fix up and neighborhood.

Enough talk about real estate, that is up to the realtor. I can always refer you to a good one.

Mortgage Bankers are once again lending in the West Palm Beach area and I am one of them. I can help you with "in-house " financing or I can broker out a loan to take advantage of an excellent rate or a special program offered by another lending institution. Equity Source Home Loans is an established mortgage lender with every conceivable loan program available at our fingertips.

If you are in the area I am more than happy to meet up with you to discuss the details of your transaction and demonstrate the service that I provide. I have the experience and no how as well as contacts with local appraisers, home inspectors, realtors and insurance companies. No question is out of bounds so please call me today to discuss a scenario or make an appointment.

If you are a little further than driving distance we can speak on the phone and I will email you a good faith estimate. Once you have the estimate in front of you we will go examine it and discuss the finer points of your loan. It is important to review cash to close and where you want your payment to be.  Thank you

Preston Ware

Equity Source Home Loans

Preston@Prestonware.com

561-329-0075