Electric Loan Officer

Category - Credit Help

Back To Work FHA Loan Guidelines “De-Bunked”

back-to-work

I cannot tell you how many phone calls I have had in the past 5 business days in regards to this “new” guidance from the Federal Housing Administration. In a recent mortgagee letter HUD has released, new guidelines have been set in regards to waiting periods for foreclosures, short sales, deed in lieu and bankruptcy. A good thing? It just might be…

You may or may not like my thoughts on it, but thats ok I will apologize now. I think a lot of people are using it as a marketing ploy. Yes, it will get the phones ringing but to be honest with all of the hoops you have to jump through few will make it to the end. I know I know, I may sound like a bit of a Debbie Downer but part of my job as a Phoenix Loan Officer is setting the right expectations, don’t you agree? And if I promised this brand new amazing program was available to you and then you sat in my office and I then revealed all of the hoops you had to jump through you may want to strangle me. Well, in my opinion a lot of the advertising headlines that I have seen going around make it seem like this is a miracle to the housing market and now everybody can own a home.

Either way you look at it, I wanted to bring you the inside scoop, the low down, the skinny on this new guidance and then you can make up your own opinion about it and whether or not you would fit in the so called “box” and qualify or maybe you know somebody that would fit in the “box” and you can send them our way?

So here it is, in the new Back to Work FHA guidelines HUD will (as long as you meet the requirements and jump through the hoops) insure a loan for you allowing you to buy a home in as little as 12 months from a bankruptcy, short sale, foreclosure or deed in lieu if you meet the following requirements.

  • You have an “Economic Event” which is considered beyond a borrower’s control which results in loss of employment or loss of income or both which reduces the household income of at 20% for a MINIMUM period of 6 months time.
  • Household income is defined as ALL income earners residing in the household at the time of the event
  • The borrower must have re-established credit with 12 months minimum satisfactory payment history
  • The borrower must have attended a HUD approved housing counseling class and received a certificate a minimum 30 days prior to date of loan application but no longer than 6 months from the date of the loan application

As far as documenting the loss in income, that’s where it can get really messy. We will need to get verifications of employments for previous employers termination letters etc etc. It can be done if you meet the above criteria and I am sure this slightly grey guidance from HUD and their Back to Work FHA loan is going to cause A LOT of questions but hey that’s what we are here for.

If you think you fit into this category or know someone who may, we would love to see if we are a good match for them, fill out the form below and we will reach out and see if we can help.

-Mr. Electric Himself

 

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Contingent on Sale is the new skinny | Electric Loan Officer

contingent-on-sale

I guess it didn’t hit me at first the other day, I was talking to a fellow colleague, another Phoenix Loan Officer like myself and she was saying that she was working in her words a “contingency chain”. I asked her to shed some light on this and she said this in a nutshell. Buyer “A” is purchasing Buyer “B’s” house but must sell his house first, buyer “B” is purchasing buyer “C’s” house but must close on the sale of his house to Buyer “A”, buyer “C” is purchasing buyer “D’s” house but must close on the sale of his house to Buyer “B”, NOW if you’re like me you will have to go back and re read this sentence a couple times to fully understand it. In this instance my fellow loan officer friend is doing the loans for ALL of these transactions, and she stated that this was the most efficient way of doing the contingent on sale type transactions. She could ENSURE that she could dig in and make sure there was not going to be any snags on the financing for ANY of the borrowers, because if someone was to drop the ball on one of the loans the entire thing could potentially fall apart.

I am not entirely too sure, but something must be going on in our market as I walked back to my desk to check our current transactions and we have TWO of the same type of transactions, not necessarily that many contingent on sale transactions together but we have two separate clients who have decided “hey, we can make some money on our home that we bought a couple years ago, why not roll that into a new purchase”. What a fantastic concept right?

Here is where the deal can get a bit tricky…. It’s best that you make sure WELL ahead of time that your phoenix loan officer can perform with all of the potential issues you can have. By having this conversation well ahead of time, you can ensure that you will not end up homeless for a couple days. When the cash to close or the money that it takes to close the new purchase come from the sale of your current residence you may run into a snag with your current lender. I say you MAY because all lenders are slightly different…  Because that cash to close is not yet in your account you would be wise to have your Phoenix Loan Officer check with their underwriter on whether or not they will accept an estimated HUD with a sales contract of the house your selling and allow you to get docs to the title company on your new purchase.

From here, it’s best that you work with the same title company on the sale of your property as well as the purchase of the new property that way you don’t have to worry about the wire from the sale taking a too long to get to another title company for your purchase, that could cause a serious mess. This is something your agent should help you coordinate, if you don’t have a good real estate agent to coordinate a negotiate contact me now and I can get you introduced to a couple top agents who have a success rate with these types of transactions, your real estate team MATTERS.

Again, contingent on sale deals require a bit more finesse, if you think your loan officer is having problems with yours I am here to help you navigate and coach them through it.

-Mr. Electric Himself.

Need help with a contingent on sale?

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