Category Archives: Industry Talk

Escrow Trenches: nutty funding conditions

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Recall those episodes where Jerry Seinfeld grits his teeth and in one exasperated and frustrated breadth says, “Neeeewman!”

Similarly, so do title and escrow staff in dealing with lender funding conditions and other challenges that seemingly are for no other purpose but to drive us to the closet for our straight-jackets.

Unfortunately, some conditions cannot be easily met at the moment the request comes over the fax or e-mail.   Some require work that delays closings.  Or, in extreme cases a condition can completely shut down all other transactions you are working on for a couple of hours to work feverishly to meet conditions or do a workaround when parties to a transaction become completely uncooperative.

Here’s a couple funding conditions pulled from our short list posted on our blog:

  • “Prove that the borrowers are not married.” (hmmm)
  • “Slight variance in borrower’s signature from others of the same borrower, need borrower to re-execute documents.”  (can cause escrow people to find a new profession.  Who’s signature is the same after signing an FHA loan package that is 119 pages long and 1.375 inches thick?)
  • “Borrower signed on the line adjacent to the one provided where the name appears.   Please re-execute the document.”  (resulted in a re-sign after tracking down the borrower).

While these are humorous after the fact it also paints a picture of what goes on behind the scenes.   Another thing that creates grins for title and escrow staff:  When there is a “rush” on a request and that request involves the collaboration and cooperation with a government agency.

What’s Happening with the $8,000 homebuyer credit?

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Post Updated based on Info available as of 11/5/09 – No significant changes, but a few minor ones, so if you first read this back when I wrote it on 10/29/2009, take another look at the updates.

$8,000There are a lot of rumors flying around suggesting that the $8,000 credit has been extended. While that is not the case, as nothing has been signed yet, there seems to be strong support for:

1) Extending the $8,000 credit for 1st time buyers, including people who have not owned a home for 3 years

2) An added $6,500 credit for move up buyers who have owned their current home for at least 5 consecutive years of the last 8 years. (this provision is still under heated discussion and most subject to compromise before the bill is passed.) Updated 11/5/08

3) Expansion of the income requirement to $125,000 for an individual and $250,000  $225,000 for a married couple.

4) Extension to contracts entered into by April 30, 2010 that are also closed by June 30, 2010 (before July 1, 2010)

The most credible “rumor”/story going around [IMO] is CNN Money’s “$8,000 Credit Still in Play“.

In my opinion #1 and #4 make the most sense in that it seems senseless to drop the credit at the end of “Spring Bump” vs. just before 2010 “Spring Bump”.  Closing the door on the credit on Nov. 30th never made any sense, as seasonal factors will make it appear that the credit going away is having more of an adverse affect than it really is, given November through February sales are almost always lower as to price and volume.

Cutting the cord on the credit at the end of April (end of March even better) makes perfect sense, and gives the market the opportunity to compensate during its most robust season.  If the market can transition from 1st quarter 2010 with a credit, to 2nd and 3rd quarters without a credit on a flat market basis, it will be easier to get rid of it altogether. And yes…eventually…it really must go away. I certainly hope the industry isn’t going to keep lobbying indefinitely for its continuation. That would NOT be a good thing.

While it seems that “Senator’s Have Agreed” this credit is still not signed sealed and delivered, (Update 11/5/09 at last step, needs to be signed by the President) so stay tuned for the final version as I think the wheel may still be spinning with regard to the $6,500 move up buyer credit, as well as the expansion of the  income requirements.

Las Vegas Taxi Driver wants a fair deal…and I don’t want to be taken for a ride.

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On one of my many trips back and forth from the BlogWorld Conventionto my hotel, a taxi driver asked me what was going on at the Las Vegas Convention Center.  I told him it was a blogging convention and I received a weird glance from his rear view mirror.   The rest of the conversation pretty much went like this:

Taxi Driver:  What do you write about?

Me: mortgages for the most part.

Taxi Driver (seeming oddly interested in this):  You actually write about mortgages?   Are you a loan officer?

Me:  Yes I originate mortgage loans and help people decide which program might best fit their needs.

At this point, the Taxi Driver is getting very excited…to the point I’m concerned he’s not paying enough attention to the road.

Taxi Driver:  What are rates right now?

Me:  Well, I’m a little out of touch because I’ve been in this convention for a few days.

Taxi Driver:  What if you had to guess?  

Me (feeling like I better give “the captain of the car” an answer):  From what I’ve been able to track, probably high 4’s to low 5’s with excellent credit scores, 20% down payment and depending on other factors like loan amount and programs…but it’s really difficult for me to say for certain.

Taxi Driver (very excited):  I’m buying a house.  Can you please take a look at my mortgage papers to make sure they look okay?

I’m beginning to wonder if he’s going to drive me to his mortgage originator’s company…he actually had his file right next to him on the front seat of the cab.   He starts waiving the file around with one hand on the steering wheel.   Of course, wanting to get to my hotel in one  piece and also not minding helping someone, I agreed.

He tells me how excited he is to buy this home and for his family to visit and that it has a pool.  He never thought he’d have a house like this.  He says he feels sorry for whoever lost the home to foreclosure.

We pull to the front of the hotel and the doormen are trying to let me out.  The gruff Taxi Driver is waiving them off.   His rate looked fine and everything seemed in order.  All that I could recommend is that he contact his mortgage originator to get a written lock confirmation.   He believes his rate is locked but there is no written documentation in the papers he had in his cab.

I’d say out of all the cabs I used in Vegas during BlogWorld, I had probably had a 40% chance of dealing with a taxi driver who would take the most direct route.   Most would “steer me wrong” in order to jack up their cab fair.    I realize that this is a much much smaller scale than someone who is buying a home and working with a mortgage originator…it’s a similar feeling (hopefully odds are improving with working with a quality mortgage professional).   

I’m glad I could help the Taxi Driver know that he had a fair deal with his mortgage–now if I could only figure out how to do that with taxi’s the next time I travel!

Join us this Friday for a Tweetup at Elysian Brewery

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Elysian BreweryI’m going to be in town this week and thought it would be fun to organize a tweetup this Friday at the Elysian Brewery in Capitol Hill… and you’re invited!

More than likely, there will be more than a few real estate folks, but everyone is invited to join us.  Here are the details:

  • Date: Friday, October 23, 2009
  • Time: 4:30pm – 7:30pm
  • Location: Elysian Brewery
  • Street: 1221 E Pike St.

And while there’s no need to RSVP, I would love to know if you’re planning to show up!   You can either leave a comment, or use the tweetup and/or Facebook invites to let us know you’ll be there as well as invite others:

The RCG meetups of the past have not only been a blast, but I’ve always ended up meeting great people.  In particular,  I’m thinking of the Ballard one where a huge number of people who became contributors showed up, and the last-minute event we put together with Sami Inkman of Trulia when he dared show up in Seattle (Trulia definitely didn’t have many supporters among agents back then!).   There was also the meetup last January, which I totally missed out on.  (Don’t let that be you this time!)  🙂

I’m sure we’re going to have a fun evening and hope to see you there!

reblogworld, Baby!

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I can’t tell you how much I’m looking forward to participating at RE Blogworld in LasVegas this week.  I feel like I’m inrebw_final “nerd-vana”…in a good way, really!   I’m going to be on a panel with Jay Thompson, Derek  Overbey and Jeff Turner moderated by Matt Fagioli.  We’re going to be the “first track” on Thursday, October 15,  covering Using Social Media for Real Estate.    And if the bantering I’ve witnessed via emails together is any indicator of what our panel should be like…it’s going to not only be informing…it should be entertaining as well.    I’m totally honored to be included with this group and to be taking part in this event.

Social media has done so much for me and my career.  I absolutely love writing for the consumer and being able to work for people I “attract”  (and my past clients) instead of having to use “cold” methods such as post cards to strangers, up-calls or paying for “leads”.   I’m looking forward to learning more ways to fine tune and streamline social media.

I hope to write a post while I’m at Blog World…I’ll have to see how things go.  Odds are that you may not be seeing rates from me on Friday.  Because I’ll be in Vegas, Baby!  🙂

President Obama Wins Nobel Peace Prize

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Hope - ObamaI am stunned to wake up to the news that President Barack Obama has won The Nobel Peace Prize, while I slept.  The range of emotions and thoughts running through my mind are hard to pin down to a reaction to this.

It makes me want to be a better person…it makes me want to be “greeener” and more frugal and a postive influence on any life I may touch. It fills me with a huge responsibility to “have his back” and do anything I can to support him and do my part to make the World a better place.

It doesnt fill me with “Hope”…the main reason he won…it makes me want to be part OF that Hope.

Congratulations, Mr. President. You do certainly do us proud…

Truliaboy gets his house…and a puppy

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truliaboyBack in June, a young man posted a question on Trulia Voices. The question no longer appears, though the answers to his question do. I had him remove the question once he became my client, because if you find a great house that you want to buy, you don’t want to highlight it on social media sites for other buyers to see and possibly make an offer on.

This post has SO many messages, it’s hard to stick to one subject…that being the young man did get the house (and a new puppy).

1) Trulia Voices is a great place for home buyers and sellers to ask questions anonymously, and get the opinions of area (and out of area) real estate professionals.

2) If an agent is NOT willing to do a short sale, that should be a disclosure up front to potential buyers who have not yet chosen a home to buy. Truliaboy found the home himself…it was a short sale. His question, which was removed, indicated that his agent ignored 3 of his requests to see the house and make an offer on it.

3) St. Joseph played a huge role in the Truliaboy story. While my answer to his question (“…If you have the time and the energy to get what you want…don’t give up!…”) prompted him to “look me up”, it was actually my connection with St. Joseph that caused him to hire me. You never know 🙂

I usually do not post the real estate stories of my current clients, but he and I have been talking about posting his story since it started. He’s a fabulous young man who found a house he wanted to buy. He had two previous agents who did not think he could buy the home of his dreams, at the price he could afford to pay. As you can see from the few answers that were posted before I had him remove the question, some agreed. For those who suggested that he could not possibly get the house for less than current market value…he got the house for 15% less than current market value (his lender’s appraised value). The sold price was 17% less than summer of 2004 pricing and 32% under the face amount of what the bank lent to the previous owner, at market peak.

Most importantly…he got the house of his dreams…and a new puppy. I give a special thanks to Trulia Voices for making this forum available to buyers who have questions that need an answer. Truliaboy asked me to include his special thanks to St. Joseph.

New Rule on Home Blogging & Zillow

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There’s a lot of talk going on about the new mls rules regarding blogging about homes for sale. The same new rule can prevent agents from posting their listings on Zillow, or any site that has Zillow or another “AVM” feature as a complement to the information available on the same site as the home listing. Basically sellers will now opt in or opt out of these categories separately, when they list their home for sale with an mls member.

Below are links to conversations already happening regarding the new rule that will shortly go into effect.  No one has answered my one question yet in any of these conversations. Does the “new” rule pre-empt the old rule 190? In other words, if a seller clicks “yes” to allow his home to be blogged about, does that “yes” apply to ALL bloggers OR only the listing agent. If I see in the mls a “yes” as to blogging allowed by the seller…do I still need the listing agent’s permission per rule 190, in addition to the seller’s permission?

Seems to me the rule should have more options like “yes MY agent CAN, but no other agents cannot”.

None of these changes impact me or the way I currently blog, but given there is so much being said on the topic, a simple re-direct to these online discussions via the links below, should give you the complete picture. My guess is large brokerages will choose FOR their sellers by company policy, and the actual seller making the opt in and opt out decision will not really come to pass. So much ado about nothing.

FHA to Adopt HVCC-ish Guidelines effective January 1, 2010…Correction: February 15, 2010

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HUD recently announced in Mortgagee Letter 2009-28 dated September 18, 2009 that they are implementing “Appraiser Independence” which is very similar to HVCC. 

Prohibition of mortgage brokers and commission based lender staff from the appraisal process…. To ensure appraiser independence, FHA-approved lenders are now prohibited from accepting appraisals prepared by FHA Roster appraisers who were selected, retained or compensated in any manner by a mortgage broker or any member of a lender’s staff who is compensated on a commission basis tied to the successful completion of a loan….

FHA does not require the use of AMCs or other third party organizations for appraisal ordering, but does recognize that some lenders use AMCs and/or other third party organizations to help ensure appraiser independence.

Mortgagee Letter 2009-28 goes on to “affirm existing requirements” with regards to preventing improper influencing of appraisers.  And states that:

“A lender must not assume, simply because an appraiser is state-certified that the appraiser is qualifed and knowledgeable in a specific market area.  It is incumbent upon the lender to determine whether an appraisers’ quaifications, as evidenced by educational training and actual field experience are sufficient to enable the appraiser to competently perform appraisals before assigning an appraisal to them.”

AMCs (and the banks who own them) will have extra reason to party-on this New Year’s Eve.  This new requirement goes into effect on all FHA case numbers assigned on or after January 1, 2010 February 15, 2010. [Update:  HUD has extended the time period before the new guidelines in the above referenced mortgagee letter goes into effect…I corrected the title of this post too!]