2009.11.07 18:49:53

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Many people these days are considering if they should apply for the government sponsored loan modification program Making Home Affordable. One of the major concerns people have is what effect a loan modification will have on their credit score.

Until now a loan modification was reported in various ways depending upon the individual lender and their reporting policies. Some lenders would report a loan modification as “paid as agreed”, however, most would report them as “partial payment”, which has a negative impact on a person’s credit score.  A “partial payment” report is a serious derogatory, in the same category as a foreclosure or short sale according to FICO spokesman Craig Watts. Fair Isaac and Company, FICO, is one of the three largest credit reporting companies in the US.

New reporting plan

Starting November 1, 2009, lenders are encouraged to use a new benign way to report government-sponsored loan modifications. Under guidelines put out by the Consumer Data Industry Association, CDIA,  lenders should report them as a “loan modified under a federal government plan”.  CDIA is the association which represents credit bureaus. FICO, the leading provider of credit scores, will ignore this new notation for the time being. It will neither help nor hurt a person’s credit score until FICO decides how to treat it. FICO says new mortgage changes will not hurt scores. “Once there is enough documented performance for people who went through a government sponsored loan modification, we will be able to assess the accumulated data to determine how predictive it is”, says FICO spokesman Craig Watts. As a rule the analysts prefer having at least a year’s worth of performance data before making any changes to its credit-scoring formula.

Under the associations guidelines, if a person is current with his mortgage payments before and during a trial modification period (typically three months), the lender is supposed to report the mortgage as current.

Starting November 1, 2009, if the modification is approved after the trial period, the lender adds a comment that it was modified under a federal plan instead of the dreaded “partial payment”.

If the loan was at least 30 days past due before the trial modification, payments during the trial period will not bring it current. The lender will continue to report the appropriate level of delinquency, but if the modification is approved, it will reported as a modification under a federal plan.

Caveats

The new designation could hurt a borrower down the road if FICO decides to treat it as a risk factor. Even if it never enters the scoring formula, potential lenders can see it on an applicant’s credit report and decide for themselves how to treat it. Have in mind that in most cases the underwriter will look beyond a credit score and study someone’s full credit history when determining a borrower’s credit worthiness.

The new guidelines will not have an effect on people who have already modified a loan, although a lender could, at its discretion, apply them retroactively.

The new category was created at the behest of the U.S. Treasury Department.

The new reporting guidelines do not apply to loans that are refinanced or put into forbearance. These loans have their own separate reporting guidelines. These guidelines are for loans modified under government sponsored loan modification programs only.

First Choice Mortgage Company is committed to be an information and education resource for the Colorado mortgage consumer and a full range of mortgage tools can be found on our website  www.FirstChoiceMortgageCoLLC.com. We pride ourselves on being a full-service mortgage company where you get the advantage of experienced mortgage professionals, great rates and a very wide range of mortgage products.

First Choice Mortgage Company has built its reputation on providing outstanding service to its clients and the launch of www.FirstChoiceMortgageCoLLC.Com is yet another example of the company’s dedication to exceeding expectations.

2009.10.09 19:27:33

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1. Interest rates

A lower interest rate on your mortgage can be an attractive inducement to refinance, however, two other factors should be weighed against that lower rate:

     A. If you refinance into a new loan that has a longer term that what’s left on your current loan, you’ll have to make those lower payments for a longer period of time and that could add up to more interest paid over the life of your new loan. For example, if you took out a 30-year fixed mortgage and made the payments for, say 10 years and then you took out a new 30-year loan, you’d have extended the payments for another 10 years until the new loan is paid off. This consideration is one reason why some homeowners refinance with a new 15-year fixed mortgage instead of a new 30-year fixed mortgage.

    B. On the other hand, if you want to lower your monthly payment due to a change in your income other financial setback, refinance to extend the term of your loan can be a good way to achieve that goal.2. Closing costs

The costs of a new loan typically include loan origination fees, discount points, appraisal fee, settlement services charges and a new lender’s title insurance policy. You may be able to finance these costs info your new loan or obtain a discount in exchange for a higher interest rate, but either way, you should consider the total outlay to refinance. If you plan to own your home for more than a few years, your monthly savings will help your recoup the costs. If you’re planning to more within a short period of time, the upfront costs may outweigh the benefit of the monthly savings you obtain by refinancing.

3. Equity

Home prices have declined in most areas and appraisers generally have become more conservative about home valuations. That means some homeowners may not have enough equity to refinance. One the plus side, the federal government’s Making Home Affordable program now allows qualified homeowners to refinance even if they owe more on their mortgage than their home is worth. The loan-to-value (LTV) ratio on a Home Affordable Refinance loan can be as high as 125 percent. More information can be found at www.firstchoicemortgagecollc.com/colorado-loan-programs/colorado-home-affordable.html

First Choice Mortgage Company’s is committed to be a information and education resource for the Colorado mortgage consumer and a full range of mortgage tools can be found on our website  www.FirstChoiceMortgageCoLLC.com. We pride ourselves on being a full-service mortgage company where you get the advantage of experienced mortgage professionals, great rates and a very wide range of mortgage products.

First Choice Mortgage Company has build its reputation on providing outstanding service to its clients and the launch of www.FirstChoiceMortgageCoLLC.Com is yet another example of the company’s dedication to exceeding expectations

2009.10.03 19:46:06

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Ask your Colorado mortgage professional these questions to be sure you choose the mortgage that will best meet your needs

• What is the interest rate?
This is the most obvious question. The interest rate is used to calculate your monthly mortgage payment, and it will determine how much you’ll pay over the life of the loan. However, you will need to understand more than simply the quoted rate. A good benchmark for comparing offers is their annual percentage rate (APR). This figure combines the interest costs and other fees charged by a lender over the life of the loan.
• Will the interest rate change over the life of the loan?
In the case of a fixed rate mortgage, the interest rate will remain the same for the entire term of the loan. Adjustable rate mortgages, however, have interest rates that change periodically. If you’re considering an adjustable rate mortgage, make sure you understand what the adjustment is – that is, how often the rate will change (usually annually). Also, ask what the index and margin will be as that will determine your rate, and find out what caps will protect you from large rate increases. You should request a chart showing the past performance of the index the rate is based on as well.
• Will I be charged points?
A lender may offer to lower your rate if you pay discount points up front. One point is equal to one percent of the principal – two points on a $150,000 mortgage, for example, equals $3,000, and may lower your rate by 0.5 percent. Lenders may also charge origination points, which are administrative fees and do not affect the interest rate.
• What are the closing costs and other fee?
Ask each lender for a Good Faith Estimate (GFE) of the closing costs. (Lenders are required by law to provide a GFE within three days of your application). Take the time to go through each estimate carefully to be sure you understand what each item means. This is important when comparing offer as lenders sometimes use different terminology for the same item.
• Will you lock-in the interest rate?
A lender may allow you to lock-in the interest rate and points quoted in your offer for a specific period of time, often 30 to 60 days. This will protect you if rates go up during the time it takes to process your application. As what date the lock-in becomes effective and whether there is an additional fee involved – and get the agreement in writing.
• How will my down payment affect the cost of the loan?
Some lenders require only a very small down payments of 3.5 or 5 percent, and some even offer zero-down-payment loans. But these carry significant costs to offset their inherent risk. Typically, if your down payment is less than 20 percent, the lender will require you to pay for private mortgage insurance (PMI). On the other hand, you may be able to reduce the cost of your loan, or at least improve the terms, by making a large down payment.
• What documentation do you require?
Lenders will ask you to provide a bundle of personal information, such as your income, employer, social security number, information about your assets and an appraisal of your home. Ask for a checklist so your application is not delayed by missing paperwork.
• 8. How long will it take to close the loan?
Processing a mortgage application can be time consuming. Ask each lender how long they expect it will take to review your documents. A minimum of two weeks is typical, though it is not unusual for it to take several weeks.

First Choice Mortgage Company’s is committed to be information and education resource for the Colorado mortgage consumer and a full range of mortgage tools can be found on our website www.FirstChoiceMortgageCoLLC.com. We pride ourselves on being a full-service mortgage company where you get the advantage of experienced mortgage professionals, great rates and a very wide range of mortgage products. First Choice Mortgage Company has build its reputation on providing outstanding service to its clients and the launch of www.FirstChoiceMortgageCoLLC.Com is yet another example of the company’s dedication to exceeding expectations.

2009.09.25 03:42:23

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Which is the best option?

These days many Colorado mortgage homeowners unfortunately are finding themselves in the situation of having to decide which of these options would be best for them – Should they foreclosure on their home or should they do a short sale?

Foreclosure

The foreclosure process occurs when a lender sells or repossesses a property after the owner has failed to comply with the agreement between the lender and the borrower. This agreement is also known as the “mortgage or “deed of trust”.

A foreclose brings with it many negative consequences to the homeowner. Some of the consequences include the following:

• If arrangements have not already been made prior to the foreclosure, the lender may want the borrower to immediately vacate the property and can commence eviction proceedings.
• Just like in a short sale, a personal residence is exempt from mortgage debt relief until the end of 2012 on a federal level. An investor is not exempt from mortgage debt relief.
• By virtue of not having paid the mortgage on the property for several months, the borrowers FICO score should be poor. Then once the foreclosure is registered with the credit bureaus, the borrower’s FICO score should be expected to drop further. The foreclose will remain on the credit report for 10 years.
• If a prospective employer runs a credit check on the borrower, a job application may be denied if it shows a foreclosure.

With certain restrictions, if a borrower has a foreclosure in the past on a primary residence, the borrower may be eligible to purchase another home five years after the foreclosure was completed. Without restrictions it’s a seven year wait. If the past foreclosure was on an investment property the wait would be seven years as well.

Short Sale

A short sale is a sale of a property in which the proceeds from the sale fall short of the balance owed on a loan secured by the property sold.

A short sale may be the right choice for some borrowers. The following are some of the expected outcomes of a short sale:

• A borrower is in control of the sale, not the lender. Contrary to popular belief, a borrower can be current on the mortgage and still complete a short sale. The sale of the home will be handled like any other home sale.
• If a borrower’s payments have never fallen behind by more than 30 days and the lender does not require the borrower to pay back the loan, Fannie Mae guidelines may allow the borrower to borrow money for another home immediately. FHA would require the borrower to wait for three years before qualifying. If the borrower’s payments are in arrears yet a short sale is granted by the lender, the borrower may qualify to purchase another home with a Fannie Mae backed mortgage within two years, regardless of whether the home was a primary home or an investment property.
• Your credit score may not be lowered by the credit bureaus after a short sale if you have been current on the mortgage. The credit bureaus do not report the short sale as a short sale, but will show your mortgage as having been “paid as less than agreed” or “paid as agreed”. A possible drop in Fico points is typically due to mortgage payments being more that 30 days past due. Also, note that lenders report short sales differently and some do not report them at all!
• If you have had a foreclosure notice filed, you may be able to postpone that action while the bank considers your short sale. The wait for a short sale approval is different from lender to lender, but expect it to be two to three months or longer.

Just like in a foreclosure, a personal residence is exempt from mortgage debt relief until the end of 2012 on a federal level. An investor is not exempt from mortgage debt relief.

First Choice Mortgage Company’s is committed to be an information and education resource for the Colorado mortgage consumer and a full range of mortgage tools can be found on our website www.FirstChoiceMortgageCoLLC.com. We pride ourselves on being a full-service mortgage company where you get the advantage of experienced mortgage professionals, great rates and a very wide range of mortgage products.

First Choice Mortgage Company has built its reputation on providing outstanding service to its clients and the launch of www.FirstChoiceMortgageCoLLC.Com is yet another example of the company’s dedication to exceeding expectations.

2009.09.22 15:20:50

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The most common question we are asked as Colorado mortgage professionals regarding a divorce is “how do I get my ex off the mortgage?”

Name Delete Assumption

Name Delete Assumption is the least know’ of the three options. Contact the servicer of your mortgage, (the company that sends you the monthly mortgage statement), and inquire if they will allow for Name Delete Assumption.  If the servicer does allow for Name Delete Assumption they will require that the remaining partner on the mortgage can indeed qualify for the mortgage and will be required to apply for the mortgage anew. Have in mind that no new appraisal is required and the terms of the loan like the  interest rate with remain the same. Once the servicer has approved the application for the mortgage they will release the departing partner and require the remaining partner to re-affirm the debt and security instrument. Name Delete Assumption is the least expensive option as the lender will usually only charge approximately $500.00 - $1,000.00 for underwriting, etc.

This option can be quite tedious and if you do not want to go through this process yourself please contact us and we will contact your lender on your behalf at no cost to you.

Refinance

If the servicer does not allow for Name Delete Assumption, the next option would be to refinance the mortgage.  If the remaining partner wishes to remain in the home for the near future then this is the next best option for removing a departing partner on a mortgage. If the remaining partner is able to qualify for a new mortgage loan the departing partner would be required to execute a “Quit Claim Deed” at time of close of the refinance, that would then transfer the departing partner’s ownership of the home to the remaining partner.     

Sell

If the remaining partner can’t qualify for a Name Delete Assumption or a refinance the only option left to remove a person from the mortgage is to sell the home.  Contact a Realtor you are both comfortable working with and arrange for the home to be listed for sale.  As always make sure the Realtor has a track record of selling homes in your neighborhood, has several newer references for you to contact and is in good standings with the local board of Realtors.

If none of the above mentioned options are a possibility, the partners would have to keep the home in their names and continue to pay the monthly mortgage. 

First Choice Mortgage Company’s is committed to be an information and education resource for the Colorado mortgage consumer and a full range of mortgage tools can be found on our website  www.FirstChoiceMortgageCoLLC.com. We pride ourselves on being a full-service mortgage company where you get the advantage of experienced mortgage professionals, great rates and a very wide range of mortgage products.

First Choice Mortgage Company has built its reputation on providing outstanding service to its clients and the launch of www.FirstChoiceMortgageCoLLC.Com is yet another example of the company’s dedication to exceeding expectations.

2009.09.13 21:33:59

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An appraisal is an essential part of the home loan approval process

If you are shopping for a home loan to purchase a home or refinancing your current mortgage, you may already know that a home appraisal is almost always required before a loan can be approved. However, if you are like many other borrowers, you might not know about appraisals or why they’re are so important.

Appraisals have been a hot topic in recent months due to new rules that have changed how lenders and mortgage brokers orders appraisals for certain types of loans. The rules are spelled out in the Home Valuation Code of Conduct (HVCC), which became effective May 1, 2009.

What is an appraisal?

Technically, a real estate appraisal is an opinion of a property’s value prepared by a licensed real estate appraiser. Each property is unique, so the appraiser must rely on his or her experience together with the information gathered about the neighborhood such as property sales prices of other comparable properties to determine the value of a property. Appraisal are meant to be unbiased and free from the influence of anyone’s opinion of the home’s value. The new rules have placed greater restrictions on attempts to unduly influence appraisers.

Who pays for the appraisal?

Borrowers pay for a home appraisal upfront since the appraisal must be completed before the lender will approve the loan. Under the new HVCC rules, borrowers who switch to a different lender during the loan process, as sometimes happens, will most likely have to pay for another appraisal to satisfy the new lenders approval requirements. Even though the borrower pays the appraiser’s fee through the lender, the appraiser typically is independent and not an employee of the lender. The main purpose of an appraisal is to help the lender assess the value of the property and decide whether to approve the loan. That’s why a new appraisal typically is required for a loan refinance as well as a home purchase.

Is an appraisal the same as a home inspection?

Another common misconception is that a home appraisal is the same as a home inspection. Appraisers do consider the condition of the home and may note any major problems.

First Choice Mortgage Company’s is committed to be a information and education resource for the Colorado mortgage consumer and a full range of mortgage tools can be found on our website www.FirstChoiceMortgageCoLLC.com. We pride ourselves on being a full-service mortgage company where you get the advantage of experienced mortgage professionals, great rates and a very wide range of mortgage products.

First Choice Mortgage Company has build its reputation on providing outstanding service to its clients and the launch of www.FirstChoiceMortgageCoLLC.Com is yet another example of the company’s dedication to exceeding expectations.

2009.09.04 02:30:43

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First-time home buyers should shop around and educate themselves about mortgage products.

Shopping for a mortgage can be intimidating. It’s natural to feel anxious about doing something new for the first time, and getting your first mortgage is no exception.

Fortunately, there are a few simple things you can do to make sure you’re being well-prepared before you start looking for your first home loan. Here are a few tips to help first-time mortgage borrowers:

1.       Lock Your Interest Rate. Interest rates on mortgages can increase or decrease from day to day or even hour to hour. Discuss the interest rate outlook with your loan officer and try to learn as much as you can about how ups and downs in interest rate quotes might affect your mortgage payment and your ability to qualify for that loan. To protect yourself from interest rate rises, ask about a rate lock, which can reserve a specific interest rate for you for a set time period. If you decide to lock your rate, make sure your lock period won’t expire before your closing date. 2.       Consider FHA. If you are a first-time home buyer, you might want to shop for a “FHA loan”, which is a mortgage that’s insured by the Federal Housing Administration (FHA). FHA loans offer competitive interest rates, allow smaller down payment requirements and have easier qualification guidelines compared with other types of loans. The minimum down payment for an FHA loan is only 3.5 percent of the purchase price of the home.  FHA loans require that you pay an up-front lump sum mortgage insurance fee as well as a monthly mortgage insurance premium.   3.       Take the Tax Credit. If you have not owned a home the past three years, you may be able to qualify for the federal First-Time Home Buyer Tax Credit, which is worth up to $8,000. The credit is refundable, which means you’ll even get a rebate of sorts from the federal government if the income tax that you owe is less than the full amount of the credit. The credit is subject to income tax limitations and you’ll have to act fast since it’s set to expire after November 30, 2009. Some lenders here in Colorado will allow you to use the credit as a down payment, to pay for settlement fees or other closing costs or to pay discount  points to reduce the interest rate on your loan. 4.       Educate Yourself. A plain-vanilla 30-year or 15-year fixed-rate mortgage is fairly easy to understand. But other types of loans can be more complicated. If you want to consider an adjustable-rate mortgage (ARM) or other less common types of loan products, do your homework and make sure you fully understand how your loan works before you sign the loan documents. 5.       Shop Around. Interest rates, loan products and loan terms vary from lender to lender. That means all borrowers, whether novice or not, should shop around for loan offers. Ask about the benefits and risks of each loan and be sure to compare the quoted points and estimated closing costs as well as the interest rates on different loans before you decide which would best fit your personal situation.

First Choice Mortgage Company’s is committed to be information and education resource for the Colorado mortgage consumer and a full range of mortgage tools can be found on our website  www.FirstChoiceMortgageCoLLC.com. We pride ourselves on being a full-service mortgage company where you get the advantage of experienced mortgage professionals, great rates and a very wide range of mortgage products.

First Choice Mortgage Company has build its reputation on providing outstanding service to its clients and the launch of www.FirstChoiceMortgageCoLLC.Com is yet another example of the company’s dedication to exceeding expectations.

colorado home purchase | colorado first time homebuyer | colorado mortgage | colorado home financing

2009.09.04 02:29:40

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The Colorado Division of Real Estate on Monday inactivated 4,560 mortgage broker licenses, about half of the licenses in the state.

A total of 4,252 licensed mortgage brokers remained active in Colorado as of Monday August 31, 2009.

When Colorado’s mortgage broker licensing last went into effect on January 1, 2008, all of the state’s brokers were automatically licensed. But to keep those licenses, they has one year to fulfill the same requirements as new applicants, which include completing 40 hours of licensing education and passing a written test.

The two-part exam tests applicants’ knowledge of federal, state and consumer protection laws, and mortgage lending basics and ethics. By December 31, 2008, nearly 6,000 brokers either still hadn’t passed or hadn’t attempted the exam. Afraid that deactivating so many mortgage brokers at once would hurt the state’s credit markets, the Division of Real Estate granted a 90-day extension, which ended on March 31.

 Brokers who are listed as inactive on the Colorado Division of Real Estates website, www.dora.state.co.us face a bigger problem than simply running afoul of state regulators. By July 31, 2010, all mortgage loan originators must register with the Nationwide Mortgage Licensing System and Registry (NMLS), a national tracking system established by the federal Secure and Fair Enforcement (S.A.F.E.) Mortgage Licensing Act of 2008.

Unless the loan originator is employed by a federally regulated bank or thrift or one of its subsidiaries, the only way to gain access to the NMLS is to be licensed by the state. Although other states allow entire companies to become licensed, giving every mortgage broker access to the national registry, Colorado doesn’t. Colorado’s licensing system applies only to individuals, and Colorado law would have to be changed to alter that, said Erin Toll, director of the Colorado Division of Real Estate, which regulates Colorado’s mortgage brokers.

Why does it matter for a broker to be registered on the NMLS? Because beginning January 1, 2010, mortgage giants Fannie Mae and Freddie Mac won’t buy loans that lack a loan origination identifier, which can only be obtained by being on the NMLS.

About 60 percent of all U.S. residential mortgage loans are sold to either Fannie Mae or Freddie Mac according to Fannie Mae and Freddie Mac. Toll estimates that between 60 and 70 percent of all Colorado single-family home loans are sold to one or the other.

First Choice Mortgage Company’s is committed to be information and education resource for the Colorado mortgage consumer and a full range of mortgage tools can be found on our website  www.FirstChoiceMortgageCoLLC.com. We pride ourselves on being a full-service mortgage company where you get the advantage of experienced mortgage professionals, great rates and a very wide range of mortgage products.

First Choice Mortgage Company has build its reputation on providing outstanding service to its clients and the launch of www.FirstChoiceMortgageCoLLC.Com is yet another example of the company’s dedication to exceeding expectations.

colorado mortgage | colorado mortgage broker | colorado mortgage license

2009.09.04 02:28:27

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First Choice Mortgage Company in Colorado announces the launch of its new mortgage website for residential mortgage clients.

First Choice Mortgage Company’s new website address is www.FirstChoiceMortgageCoLLC.com. We pride ourselves on being a full-service mortgage company where you get the advantage of experienced mortgage professionals, great rates and a very wide range of mortgage products. First Choice Mortgage Company is excited about the launch of its new mortgage website and believes it will be a well received site with many great educational tools for its clients. We look forward to providing our clients with online mortgage services and in general consult them through the mortgage process.  “We are truly committed to delivering professional unbiased advise to every client whether there are purchasing their first home or refinancing their investment property” said J. Johansen, Director of First Choice Mortgage Company.

The new website www.FirstChoiceMortgageCoLLC.com marks a new era for the company as it will now enable the company to be accessible to clients 24/7. An exciting new and convenient tool on the web site is LiveZilla. LiveZilla gives the site visitor the ability to communicate live via text messaging with one of First Choice Mortgage Company’s mortgage professionals.

Purchasing a new home, refinancing your current home or needing assistance with a loan modification, each scenario has its own unique requirements and regulations.  This new site has been developed with that in mind.  What loan works for me? What is today’s interest rate? What makes up my FICO score? What factors affect a mortgage rate? How large of a mortgage can I afford? What is the value of my current home? What should I expect when purchasing a home? These are just some of the questions you can find answers to on the site.

Don’t want to spend time calling several lenders for a mortgage rate? Complete the “1 Minute Quick Quote” application on the site and you will have your answer in minutes. Alternatively use the “Lock In Your Interest Rate” feature on the site.  Let our system rate watch for you every day. An email notification with be send to you when your desired interest rate becomes available.

First Choice Mortgage Company has build its reputation on providing outstanding service to its clients and the launch of www.FirstChoiceMortgageCoLLC.Com is yet another example of the company’s dedication to exceeding expectations.

colorado mortgage company | co mortgage website | colorado mortgage news