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March Mortgage News
Keeping You Informed in Today's Market
May 2011 - Vol 6, Issue 4
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sean

Welcome summer! As we head toward Memorial Day and the official beginning of summer, I think how quickly this year is going by. The seemingly constant change the mortgage industry has kept me on my toes as I attempt to always give the best advice to my customers.

This newsletter features a product change, rate news, and appraisal topic. I hope you'll call me or send your clients to me for more information. The borrower's individual needs are always first with me and you can be assured to get the best mortgage solution possible.

Enjoy your Memorial Day weekend!

This month's new product is something dealing with PMI. As many of you are aware, if a borrower is looking for conventional financing and is putting less than 20% down, then they are dealing with PMI. Up until now there were two options. The first is the "borrower paid" PMI which is the traditional way of paying it. Based on how much you put down and credit score, there is a monthly PMI factor based on the loan amount and you wind up paying a separate mortgage insurance payment. Recently, lenders have also come back Lender Paid PMI. This basically means that instead of having that separate PMI payment, the lender just increases the interest rate to cover PMI. This makes it tax deductible and makes the monthly payments lower than the traditional PMI when putting 10% or less down.

Amstar Mortgage is now able to offer something called "Split MI". Basically, with an additional cost at closing, that monthly PMI factor can be lower. In a nutshell, the borrower is paying for the PMI upfront to have a lower PMI payment and this can save greatly on the monthly payments. Another great advantage of this product is that this cost can be paid as part of the closing costs by the seller. Agents, this is a great negotiation tool and will help your borrowers qualify more easily and enjoy lower monthly payments. Make sure to give me a call before you make that offer!
The Fannie Mae affordability program (or otherwise known as HARP program) now allows borrowers with PMI to refinance even if they have little or no equity in their current homes. During the past couple of years, I have refinanced many of you who didn't have 20% equity in your home and did not have to deal with PMI because your loan was owned by Fannie Mae. This was under the condition that your current loan that was being refinanced didn't have PMI which would have been a deal killer.

Well, I am glad to say that now if you have PMI, it's worth it to give me a call! The one guideline to the refinance is that the current PMI Company must transfer the original mortgage insurance certificate to the new lender. I would think they would agree since you would be taking advantage of these fantastic low rates. Anyway, give me a call to see if you qualify for this program!
As many of you know, the new appraisal policy and implementation of HVCC a couple of years ago has been an ongoing topic for loan originators and Realtors. Many of us have had to face some appraisal issues and the frustration of this new policy that requires all appraisals to be ordered through the appraisal management system.

The National Associate of Realtors had a meeting and cheered the Mortgage Banker's Association President who mentioned that there are some flaws with HVCC. Really? Problems could have been anticipated a couple of years ago on day one when this thing was implemented.

Anyway, one of the problems is what is called "Geographical Incompetence" and is supposedly a violation with the HVCC policy. This is, of course, where an appraiser has to drive 80 miles to a neighborhood he or she knows nothing about and do an appraisal for the appraisal management company who ordered it. Not to say the appraiser does not have the ability or tools not to do the appraisal but how would you like to give $350.00 to an appraiser from Snellville who will be doing the appraisal in Marietta?

The other big problem comes from these banks owning their own appraisal management firms. Remember, the loan originator orders the appraisal through the lender, who then sends the order to an appraisal management firm, who then orders the appraisal through an actual appraiser. The grey area arises when your first appraisal comes in low and then a second one is needed. Some argue that this is padding revenue to the banks who own these appraisal management firms. According to HVCC there should be no co-mingling or ownership involved with banks and appraisal management firms. Do you see a problem here?

Finally, the good news is that this is being highlighted by several high ranking members in the real estate industry and there may be some changes as a result. I will continue the updates as it relates to this hot topic.
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Thank you for reading my newsletter. Please feel free to call me with questions or a quick prequalification at (404) 641-1486.
As always, I value your referrals! If I can help you advertise your properties, I'm happy to include them. This newsletter reaches over 1000 people monthly!

Amstar Mortgage Network is a Georgia Residential Mortgage Licensee, #18329. All rate information is subject to change and based on borrower's individual qualifications. NMLS#214727, GRML #27269, Amstar License # 148016

Sincerely,
Sean Trombetti
Amstar Mortgage Network

phone: (404) 641-1486