NEVADA Mortgage Law Changes

COLLEAGUES:

 

FRIDAY, FEBRUARY 6TH AT 8 AM IS A JOINT WAYS AND MEANS AND SENATE FINANCE COMMITTEE HEARING ON THE PROPOSED MERGER OF THE MORTGAGE LENDING DIVISION AND THE FINANCIAL INSTITUTIONS DIVISION.  I HAVE ATTACHED A MEMO WITH MANY REASONS WHY THIS IS NOT A GOOD IDEA FOR OUR PROFESSION AS WELL AS SOME COMMENTS I HAVE RECEIVED BY OUR COLLEAGUES.  ADDITIONALLY, I HAVE DRAFTED A SAMPLE EMAIL YOU MAY WANT TO CONSIDER PERSONALIZING AND SENDING TO THE MEMBERS OF THE WAYS AND MEANS COMMITTEE AND SENATE FIANACE COMMITTEE.  AT THE END OF THIS EMAIL ARE THEIR ADDRESSES FOR YOUR CONVENIENCE.  JUST CUT AND PASTE AS YOU LIKE.  IF YOU HAVE A PERSONAL RELATIONSHIP WITH A LEGISLATOR, BE SURE TO PERSONALIZE YOUR EMAIL. IF YOU WOULD LIKE TO KNOW WHO YOUR LEGISLATORS ARE, YOU CAN FIND OUT ON THE LEGISLATIVE WEBSITE http://www.leg.state.nv.us <http://www.leg.state.nv.us/> 

 

 THE CORRECT SALUTAION FOR OUR ESTEEMED ELECTED OFFICIAL IS “Assemblyman,” “Assemblywoman,” or “Senator,” as appropriate.  Assemblywoman Barbara Buckley is properly addressed as “Madam Speaker.”  Senator Horsford is properly addressed as “Leader Horsford.”

 

FEEL FREE TO FORWARD THESE MATERIALS TO COLLEAGUES, CLIENTS, VENDORS, OR ANYONE YOU THINK MIGHT BE INTERESTED IN THIS IMPORTANT ISSUE. 

 

 

 

Dear Legislator:

 

            I am writing today to share my thoughts regarding the Governor’s Budget recommendation to merge the Mortgage Lending Division (MLD) with the Financial Institutions Division (FID.)  As a professional active in the mortgage industry, I am concerned this merger will diminish the regulatory oversight currently being performed by the MLD  Nevada is one of the top states for mortgage fraud.  Maintaining an effective and vigilant regulatory structure is essential to keep our industry operating successfully for our clients.  

 

            Mortgage lending can be a complex and difficult transaction.  It’s important to have a regulator that understands the complexities and is dedicated to enforcing the statutes and regulations intended to protect consumers.  While the Financial Institutions Division does an excellent job regulating its licensees, having a division dedicated to mortgage brokers, bankers, and agents helps the industry focus on effective and efficient resolutions to complex problems that arise in regulation.  Consumers benefit when they have a division within State government that understands their problems and issues.  Prior to the establishment of the MLD in 1999, many issues regarding licensees, consumers, and regulators were delayed or ignored by the Financial Institutions Division because the mortgage lending business was not the priority of the Division.  Establishing the MLD elevated the mortgage lending business as a profession, licensing brokers and registering agents, and establishing education requirements for licensees.  It gives consumers a specific place to go to address their problems.  Great strides have been made since 1999 and it would be regrettable to diminish the professionalism of mortgage brokers and agents by eliminating the MLD.  It would be a step backward for consumers to be mixed in with the consumers of banks, credit unions, thrifts, and other financial institutions when they want help with their mortgage issues.  

 

            In summary, the Mortgage Lending Division is funded by the fees paid by the licensees, not the State General Fund.   The most effective regulation comes from a partnership between the licensee and the regulator.  Having a division in State Government dedicated to effective regulation of a complex business is vital to maintaining consumer protection.  

 

            Thank you for taking the time to consider my views.  Feel free to contact me if I can provide additional information. 

 

marberry@asm.state.nv.us; bbuckley@asm.state.nv.us; mconklin@asm.state.nv.us; mdenis@asm.state.nv.us; sanjoe@embarqmail.com; ekoivisto@asm.state.nv.us; sleslie@asm.state.nv.us; kmcclain@asm.state.nv.us; joceguera@asm.state.nv.us; dsmith@asm.state.nv.us; hgansert@asm.state.nv.us; tgrady@asm.state.nv.us; jhardy@asm.state.nv.us; pgoicoechea@asm.state.nv.us.  bmathews@sen.state.nv.us; shorsford@sen.state.nv.us; bcoffin@sen.state.nv.us; jwoodhouse@sen.state.nv.us; wraggio@sen.state.nv.us; drhoads@sen.state.nv.us; whardy@sen.state.nv.us. 

 

 

 

 

 

David Goldwater, President

 

Goldwater Capital Nevada, Llc.

 

 3259 E. Warm Springs Rd.

 

Las Vegas, NV 89120

 

http://www.goldcapnv.com

 

(702) 933 2366 (o)

 

(702) 933 2490 (f)

New Appraiser’s Code of Conduct

In 2008, Freddie Mac introduced to the Appraiser’s Board a Home Valuation Code of Conduct.  These standards are currently under final review, and the enactment date has yet to be set.  It is anticipated they will become effective 1-15-2009, however the final code has not been issued.  The following is the current version of the Code of Conduct:

I. No employee, director, officer, or agent of the lender, or any other third party acting as joint venture partner, independent contractor, appraisal management company, or partner on behalf of the lender, shall influence or attempt to influence the development, reporting, result, or review of an appraisal through coercion, extortion, collusion, compensation, instruction, inducement, intimidation, bribery, or in any other manner including but not limited to:

1)       withholding or threatening to withhold timely payment for an appraisal report;

2)       withholding or threatening to withhold future business for an appraiser, or demoting or terminating or threatening to demote or terminate a legally licensed appraiser;

3)       expressly or impliedly promising future business, promotions, or increased compensation for an appraiser;

4)       conditioning the ordering of an appraisal report or the payment of an appraisal fee or salary or bonus on the opinion, conclusion, or valuation to be reached, or on a preliminary estimate requested from an appraiser;

5)       requesting that an appraiser provide an estimated, predetermined, or desired valuation in an appraisal report, or provide estimated values or comparable sales at any time prior to the appraiser’s completion of an appraisal report; (an appraiser’s estimate of value prior to completing the appraisal report is not allowed, so don’t ask any more or you are asking them to violate their new code of conduct)

6)       providing to an appraiser an anticipated, estimated, encouraged, or desired value for a subject property or a proposed or target amount to be loaned to the borrower, except that a copy of the sales contract for purchase transactions may be provided;  (requests for an appraisal for refinance transactions should not include the estimated appraisal value to influence the appraiser)

7)       providing to an appraiser, appraisal management company, or any entity or person related to the appraiser or appraisal management company, stock or other financial or non-financial benefits;

8)       allowing the removal of an appraiser from a list of qualified appraisers used by any entity, without prior written notice to such appraiser, which notice shall include written evidence of the appraiser’s illegal conduct, a violation of the Uniform Standards of Professional Appraisal Practice (USPAP) or state licensing standards, substandard performance, or otherwise improper or unprofessional behavior;

9)       ordering, obtaining, using, or paying for a second or subsequent appraisal or automated valuation model in connection with a mortgage financing transaction unless there is a reasonable basis to believe that the initial appraisal was flawed or tainted and such basis is clearly and appropriately noted in the loan file, or unless such appraisal or automated valuation model is done pursuant to a bona fide pre- or post-funding appraisal review or quality control process; or

10)   any other act or practice that impairs or attempts to impair an appraiser’s independence, objectivity, or impartiality.

Nothing in this section shall be construed as prohibiting the lender (or any third party acting on behalf of the lender) from requesting that an appraiser (i) provide additional information or explanation about the basis for a valuation, or (ii) correct objective factual errors in an appraisal report.

II. The lender shall ensure that the borrower is provided, free of charge, a copy of any appraisal report concerning the borrower’s subject property immediately upon completion, and in any event no less than three days prior to the closing of the loan. The borrower may waive this three-day requirement. The lender may require the borrower to reimburse the lender for the cost of the appraisal.

III. The lender or any third-party specifically authorized by the lender (including, but not limited to, appraisal management companies and correspondent lenders) shall be responsible for selecting, retaining, and providing for payment of all compensation to the appraiser. The lender will not accept any appraisal report completed by an appraiser selected, retained, or compensated in any manner by any other third-party (including mortgage brokers and real estate agents).

IV. All members of the lender’s loan production staff, as well as any person

1. who is compensated on a commission basis upon the successful completion of a loan or
2. who reports, ultimately, to any officer of the lender other than either the Chief Compliance Officer, General Counsel, or any officer who is not independent of the loan production staff and process, shall be forbidden from:

(1)     selecting, retaining, recommending, or influencing the selection of any appraiser for a particular appraisal assignment or for inclusion on a list or panel of appraisers approved to perform appraisals for the lender;  (Loan originators will no longer be able to choose the appraiser.  It is anticipated that the funding lender will be the one that will order the appraisal.)

(2)     any communications with an appraiser, including ordering or managing an appraisal assignment; and

(3)     working together in the same organizational unit, or being directly supervised by the same manager, as any person who is involved in the selection, retention, recommendation of, or communication with any appraiser. If absolute lines of independence cannot be achieved as a result of the originator’s small size and limited staff, the lender must be able to clearly demonstrate that it has prudent safeguards to isolate its collateral evaluation process from influence or interference from its loan production process.

V. Any employee of the lender (or if the lender retains an appraisal management company, any employee of that company) tasked with selecting appraisers for an approved panel or substantive appraisal review must be

(1) appropriately trained and qualified in the area of real estate and appraisals, and

(2) in the case of an employee of the lender, wholly independent of the loan production staff and process.

VI. In underwriting a loan, the lender shall not utilize any appraisal report prepared by an appraiser employed by:

1)       the lender;

2)       an affiliate of the lender;

3)       an entity that is owned, in whole or in part, by the lender;

4)       an entity that owns, in whole or in part, the lender

5)       a real estate “settlement services” provider, as that term is defined in the Real Estate Settlement Procedures Act, 12 U.S.C.§ 2601 et seq.;

6)       an entity that is owned, in whole or in part, by a “settlement services” provider.

The lender also shall not use any appraisal report obtained by or through an appraisal management company that is owned by the lender or an affiliate of the lender, provided that the foregoing prohibitions do not apply where the lender has an ownership interest in the appraisal management company of 20% or less and where

1. the lender has no involvement in the day-to-day business operations of the appraisal management company,
2. the appraisal management company is operated independently, and
3. the lender plays no role in the selection of individual appraisers or any panel of approved appraisers used by the appraisal management company.

Notwithstanding these prohibitions, the lender may use in-house staff appraisers to  

1. order appraisals,
2. conduct appraisal reviews or other quality control, whether pre-funding or post-funding,
3. develop, deploy, or use internal automated valuation models, or
4. prepare appraisals in connection with transactions other than mortgage origination transactions (e.g. loan workouts).

VII. The lender will establish a telephone hotline and an email address to receive any complaints from appraisers, individuals, or any other entities concerning the improper influencing or attempted improper influencing of appraisers or the appraisal process, which hotline and email address shall be attended only by a member of the office of the General Counsel, Chief Compliance Officer or other independent officer. In addition: (1) each appraiser now or hereafter on any list of approved appraisers, or, upon retention by the lender, will be notified, in a separate document, of the hotline and email address and their purpose; and (2) each borrower, as part of a cover letter accompanying the provided appraisal, will be notified of the hotline and email address and their purpose. Within 72 hours of receiving any complaint, the lender will begin a preliminary investigation of the complaint and upon completing the inquiry (or, after a period not to exceed 60 days, whichever shall come first) shall notify the Independent Valuation Protection Institute and any relevant regulatory bodies of any indication of improper conduct. The name and any identifying information of the person or entity that has filed such a complaint shall be kept in strictest confidence by the office of the General Counsel, Chief Compliance Officer or other independent officer, except as required by law. The lender shall not retaliate, in any manner or method, against the person or entity which makes such a complaint.

VIII. The lender agrees that it shall quality control test, by use of retroactive or additional appraisal reports or other appropriate method, of a randomly-selected 10% (or other bona fide statistically significant percentage) of the appraisals or valuations which are used by the lender, including the results of automated valuation models, broker’s price opinions or “desktop” evaluations. The lender shall report the results of such quality control testing to the Independent Valuation Protection Institute and any relevant regulatory bodies.

IX. Any lender who has a reasonable basis to believe an appraiser is violating applicable laws, or is otherwise engaging in unethical conduct, shall promptly refer the matter to the Independent Valuation Protection Institute and to the applicable State appraiser certifying and licensing agency.

X. The lender shall certify, warrant and represent that the appraisal report was obtained in a manner consistent with this Code of Conduct.

XI. Nothing in this Code shall be construed to establish new requirements or obligations that (1) require a lender to obtain a property valuation, or to use any particular method for property valuation (such as an appraisal or automated valuation model) in connection with any mortgage loan or mortgage financing transaction, or (2) affect the acceptable scope of work for an appraiser in connection with a particular assignment.

Are You Ready for the Red Flag Rules?

Red Flag Rules will be effective 5-1-09 due to the Federal Trade Commission allowing an extension (previously 11-1-08) for lenders to implement identity theft prevention programs.  The Red Flag Rules require each financial institution and creditor that holds any consumer account, or other account with a reasonably foreseeable risk for identity theft must set policies and procedures for detecting, preventing, and mitigating identity theft.  The Prevention Program will enable a financial institution or creditor to:

1. Identify relevant patterns, practices, and specific forms of activity that are “red flags” signaling possible identity theft and incorporate those red flags into the Program,
2. Detect red flags that have been incorporated into the Program,
3. Respond appropriately to any red flags that are detected to prevent and mitigate identity theft, and
4. Ensure the Program is updated periodically to reflect changes in risks from identity theft. 

Creditors as defined by the Act include finance companies, automobile dealers, mortgage brokers, utility companies, and telecommunications companies.  You may go to the Federal Trade Commission’s website for guidelines to assist in developing and implement a Program www.ftc.gov.  A supplement to the Guidelines identifies 26 possible red flags.  These red flags are not a checklist, but rather, are examples that financial institutions and creditors may want to use as a starting point.  They fall into five categories:

• alerts, notifications, or warnings from a consumer reporting agency;
• suspicious documents;
• suspicious personally identifying information, such as a suspicious address;
• unusual use of – or suspicious activity relating to – a covered account; and
• Notices from customers, victims of identity theft, law enforcement authorities, or other businesses about possible identity theft in connection with covered accounts.

A brief outline of the laws requirements includes:

• You must have a written information security policy
• You have to have an acceptable use plan (how will you use the above)
• You need an incident response plan (how you will respond to a breach of information by you or a third-party vendor)
• The program must be administered by senior management and updated on a regular basis
• A compliance report must be generated on at least an annual basis
• You must assure that your relevant vendors are also in compliance
• Senior management will be held responsible, and
• The law does allow for the use of a third-party provider who has the ability to facilitate this mandatory compliance issue on your behalf.

This legislation is holding businesses and business owners to a higher standard, as they are entrusted with safeguarding customer’s information.  If they are negligent in that regard, they will face serious consequences under this legislation.

Mortgage Trainers of North America is offering a service to help you develope your Prevention Program.  Email linda@mtgtna.com if you would like further information or assistance.

To test your knowledge of ID theft, try this website http://www.onguardonline.gov/games/id-theft-faceoff.aspx This FTC website has lots of useful information with ways to train your staff, and ensure you understand identity theft issues.

2009 a Year of Opportunity

A new year is here, wealth of opportunities are on the horizon. 

·         Spring is historically the busiest season with extra money flow from the borrower’s tax refunds

·         The interest rates are great

·         House prices are affordable

·         The new Administration is going to be focusing on the mortgage industry to help pull the economy out of the recession.  This additional opportunity will stimulate our market.

·         Credit scores are set on a national curve rating.  Therefore, even though some borrowers’ credit scores are decreasing from bad credit, others with good credit will be increasing from the swing of the curve.  Take our Diagnosing the Borrower’s Credit Health if you want to know more about the credit scoring system.

Think of the recession (or is it rescission) as a type of cooling off period.  We had a hot market and long run of profits.  This market correction has raised the need for licensed and educated mortgage professionals.  You need to know the guidelines, and be flexible with what loan products you have to sell.

What ‘was’ is just that, ‘history’!

Stop looking back.  Stay focused on what’s now and what’s on the horizon over the next 36 months.  We are heading for uncharted waters of new opportunities, legislation, and loan programs.  History shows there is always someone buying, someone selling, and someone refinancing a home. 

Set your 2009 goals, make your ‘Plan of Action’, and work your plan to tap into these opportunities and be a mortgage professional.  Need a refresher or road map to goal setting, target marketing, market approach, and sales techniques?  We offer this class in January only, as the beginning of the year is when you make your ‘Plan of Action’.  Join us on January 22^nd in Las Vegas for Salesmanship Marketing for Prosperous Originations.  Click here for more details!

Mortgage Fraud

In a Wall Street Journal article 6-20-08, FBI Mortgage-Fraud Probe is Looking at Big Firms.  The following is a summary of the article.

‘Some 19 companies, including mortgage lenders, investment banks, hedgefunds, credit-rating companies and accounting firms, are being looked at.  Mortgage fraud is an area the FBI is aggressively pursuing.  The Justice Department and FBI officials announced 400 individuals have been criminally charged for their roles in home-lending schemes, with 60 arrested in one day.  Real estate developers, brokers, agents and appraisers were among those charged, along with lenders, lawyers and so-called straw buyers.  “Operation Malicious Mortgage” swept up criminal investigations from March 1 through mid-June, and produced 144 cases nationwide.  FBI officials estimated the losses from the alleged scams reached $1 billion.  Two former Bear Stearns & Co managers were also indicted from misleading investors about Bear hedge funds that ultimately collapsed, causing more than $1 billion of losses. 

Mortgage fraud cases are on the rise as the FBI cases lead to indictments.  in 2003 they had 436 cases, and in 2007 they have 1,200 cases.  There are another 1,400 investigations under way, and they will continue to prosecute and bring those individuals to justice including prison terms where appropriate.’

As a 29 year mortgage professional, I am tired of the fraudsters ruining the mortgage business.  I applaud the FBI and look forward to the clean up of our industry.  Fraudsters be ware – the FBI is watching!

FHA has raised their loan limits

Affective March 6^th of 2008 FHA has increased their mortgage loan limits. Here the site to check out your local county loan limits http://www.fhaoutreach.com/

Companies that specialize in Leads

Question:

“I like to get your advice on how to get more clients these days. I’m in California I been doing loans for 14yrs. I have always strive to give my clients the best product available. Based on your experience as a professional for the past 30yrs. what have you found to be one of the most effective ways to generate more leads? There’s a lot of companies offering their leads. How good are these sources?

Your valuable input will be greatly appreciated.”

Answer:

This is a very topical question. We have done some research and with our experience have found the following to be very helpful.

As far as lead sheets, be sure of what you are buying. A loan originator

using a call sheet from a lead generation company is just as liable under

the law in regards to how the leads were developed. Loan originators may be

held liable to Do Not Call Registry law violations from purchasing a list

from the lead generating company. Verify that your potential clients are not on the “Do Not Call Registry”.

Also you need to ask questions about the lists. What are the demographics

of the list. How many others have been sold these leads? Does the company

offer exclusive ‘single user’ lists? What are the guarantees regarding success?

What is response rate or closing ratio predicted? These are just a few of the questions

you must know when using these types of lists

Title companies offer ‘farm lists’ for the specific criteria you request.

These lists are offered free by most title companies. You will have to

do more work as you will have to ensure they are not on the ‘do not call’

registry, and then develop the lead yourself.

A 2-3% response on cold-call direct mailers is considered good. So

it’s a numbers game and accurate targeting with direct mailing and

cold calling is crucial.

One key thing loan originators learn is that every client they serve is now

a referral source and possible repeat business in the future. That being

said, it is crucial for achieving steady reliable business is to have

constant contact with past clients to remind them how professional you are.

Referrals are the best and easiest way to generate new leads. In addition

it’s a warm lead which increases the prospect to client ratio. When was

the last time you reached out to your past clients and asked them for a referral?

This should be scheduled for no less than 6 times a year. It is much cheaper

to keep a client than to develop a client.

You may want to combine Newsletters and marketing pieces. Newsletters are

not a ‘call to action’ as is a marketing piece. All correspondence need to ask for

the referral and have a meaning or purpose for the approach to the recipient.

For attracting new clients you will need to adapt to what your target market

is looking for. Who is it you want as a client, must be identified, besides

anyone that wants a mortgage loan? A target market may be “First Time

Homebuyers” or “Senior Citizens”. Become the expert in that area and focus.

Know the programs that are designed for what ever group you are targeting.

Then you set up marketing campaigns that targets these clients.

To help loan originators attract their target market, MTGTNA offers two lead

generating tools. “Home ownership Question and Answer Session” presentation

designed for attracting first time homebuyers and existing homeowners that

may want to refinance into better loan programs. Attendees will receive the

basic necessary information to qualify and how the mortgage cycle works.

Your attendees with have the necessary information to qualified for the best loan

to serve their purposes. The attendees with be able to see how their income and/or

credit affects their ability to qualify for a new mortgage.

The other lead generating tool is a “Homebuyer ‘Knowledge is Power’

Seminar” presentation designed to attract first time home buyers. Special

knowledge of the loan programs that are targeting this market is crucial.

Both will require you to generate the people to attend. This professional

presentation for your prospects will have an appreciated value.

To help you in making your marketing plan, please access our website for the

free Goal Sheets offered on the Benefit page. www.mtgtna.com They will help

you plan your marketing approach and set your goals. While your at our

website join the ‘Professional’s Club’ so you can be included in our email

database. Then you will receive our special offers, discount coupons, and

other industry information. Our Linda Williams just finished an article that

outlines the response to this question of leads. It outlines the ’10 steps

for Marketing Success’ and has 32 lead sources listed. We will be notifying

the club members when this article will be available on our website.

So you want to be a DE underwriter?

Professor’s Answer:For information on becoming a DE Underwriter, the FHA website www.fha.gov has the information. The professor found this link to help you start. Go to the following link to receive the handbook 4000.4 which outlines the DE program. http://portal.hud.gov/portal/page?_pageid=33,716773&_dad=portal&_schema=PORTALNow scroll down the page to the area regarding different Single Family Handbooks (which means guidelines) with their reference numbers to the left. Choose 4000.4 DE Program, and open the manual. Then page down to chapter three which discusses the requirements for an underwriter. The entire manual describes the whole DE program for the lender. This should be the current information as to what is expected, although if you get involved with the program, you’ll need to make sure you get any updates to the manual from FHA.

Your local HOC (Home Ownership Center) office can give you more detail information and would be the best source for information. You can find out your HOC office at www.fha.gov, or in the left margin of the above link. Remember you will need a Mortgage Banker to sponcor your application to FHA.

Thanks for ‘asking the professor’, and we enjoy helping you wade through the mortgage information madness to find your answer!

Avenues for business development

We all remember the “good old days” when if you answered the phone, took an application, got the basics to the processor, and then went on to the next prospect. Let me see, that was 2004 through 2006.  Oh yes those were the days.

Then it was 2007, home values declined and adjustable mortgage rates moved up.  No more easy money as the mortgage industry slowed.

Now it is 2008, a new dawn of opportunity.  Homeowners will want to take advantage of the low fixed rates, and others will take advantage of the low priced housing market. Tap into this refinance market and help the consumer get a fabulous low fixed rate. 

To determine the new payment you will need to know the “margin” and the “index”.  The margin and index is set at the time of closing based on the loan product.    The margin does not change during the loan amortization, but is added to the index to determine the fully indexed rate.

You can find the index and margin on the mortgage note.  The margin will be shown as a percentage and the index will be identified by name. The index is the only variable factor, and the current index factor can be found easily.  Do a search on the internet or look in the financial section of the paper. Common indexes are LIBOR (London Inter Bank Offered Rate), COFI (Cost of Funds Index), COSI (Cost of Savings Index), MTA (Monthly treasury average), or one year CMT (Constant Maturity Treasury) with terms of 1, 3, 6, or 12 months.  Hybrid arms have longer fixed period before adjustments start.  

From your client’s monthly mortgage statement, get the balance of the current mortgage. Add the and the margin to establish the new rate.  Now determine the new payment based on current balance and adjusted interest rate.  Ideally the refinance should lower their payment as the adjustable rate payment should be higher after the adjustment period.

Remember that the current value of your client’s property will need to reflect an equity position of at least 5% for most refinance loan programs.  Some lenders prefer at least 10% equity.  Check with your wholesale representative or guidelines.  The borrower’s repayment pattern will also impact the percentage of equity required and loan program.

With these low rates, now is the time to improve your borrower’s position with a low fixed rate.  Conforming loan programs offer the best rate and terms, and require full documentation of your clients income for proper debt ratios.  When no additional ‘cash out’ is taken on the loan, the automated systems may be lenient with the debt ratios.

Some new mortgage programs are being offered due to the federal government’s intervention.  FHA Secure program with new higher loan limits, and Fannie Mae and Freddie Mac’s revised programs.  Let me emphasize the point of qualifying the client to match his/her real budget with the payments required to sustain the loan.

As a mortgage professional, leaving the borrower in a better position after loan closing is the goal.  It also builds client trust and referrals.  So don’t miss this new year of opportunity.