VanEd Newslog

Finance Friday: Help for Homeowners???

Today President Bush announced plans to help homeowners avoid loosing their homes.  He is proposing expanding FHA programs to allow more borrowers the ability to refinance out of adjustable loans.  The new program will allow risk based pricing, meaning the up front MIP will vary between the current 1.5% and 2.3% of the loan amount.  This is probably more of a political move than an actual solution.  It is expected this program will aid up to 80,000 homeowners.  However, there are over two million loans set to reset to higher rates and payments in the next 24 months, so 80,000 is a drop in the bucket.  Also, it is only for credit worthy borrowers, and many of the sub-prime borrowers had credit issues that would make them ineligible. This also won't help larger loans because the FHA loan limits will apply.
Unfortunately, many borrowers got into homes they cant afford, and no federal program, short of debt forgiveness, will make it possible for them to make their payments.  The key to avoid future problems is for lenders to make sure their borrowers have sufficient income to afford the payments.

The mortgage markets are settling into a more normal pattern after weeks of uncertainty.  With the closing of Greenpoint Mortgage last week, the days of the no-doc loan are just about over.  These loans will still be available, but the rates will be prohibitive. However, loans to fully qualified borrowers are available, even for jumbo and investor loans. The current rate for no point low fee mortgages is about 6.5%.  Jumbo loans and loans for investment properties are about .25% higher.  I expect these rates to decrease slightly over the next few months as investors realize that quality mortgages are a secure investment, and shouldn't be included with sub-prime loans and no-doc loans.

Guest Author Randy Kelly is a Mortgage Banker and Finance Author with Boulder West Financial Services. He can be reached on-line at http://www.boulderwest.com/.

New 2007 Colorado Real Estate Manual is now available

The new Colorado Real Estate Manual was recently made available for purchase from Bradford Publishing. The new manual includes new chapters covering;

• Mortgage Broker Licensing Act
• Law of Affiliated Business Arrangements
• Revised Water Rights

The manual is also presented with new features to make it easier to use and read. You may click here or use the following link to download the order form to purchase your new 2007 Manual. Please note that you will want to call Bradford Publishing so that you can make sure to get the final price that includes shipping and handling.

>>>Click Here for Manual Order form

Consumer advisory issued on Foreclosure Rescue Services

The Nebraska Department of Banking & Finance issued an advisory last week urging consumers to be cautious when working with foreclosure rescue companies. The advisory stems from inquiries to the Department from consumers as rescue companies offer to take ownership of a distressed homeowners property.

The deal may work like this; the rescue company (or an individual) offers to take the property over and make the payments on the mortgage, allowing the homeowner to rent back the property and purchase the home back at a later date. The distressed homeowner may feel pressure to sign documents and relinquish ownership. The rescue company then assumes the remaining equity in the property and may sell the property at any time. The promise to keep the homeowner from foreclosure and save the homeowners credit may be used to coerce the homeowner into signing the property over.

The Department advises distressed homeowners to be cautious and contact lawyers or real estate professionals before signing any agreements. The full text of the Department Advisory can be found by clicking here.

Finance Friday: Good old days are back

Remember the good old days when home buyers actually had to qualify for their loan and have some money for a down payment?  They're back!!!!  The shakedown in the mortgage industry has left no doc and low doc loans virtually unavailable.  Greenpoint, one of the biggest low doc and no doc lenders, closed its doors this week.  Rates on no doc loans at ALS, another big provider of stated income and no doc loans, have gone up over 2.00% in the past 30 days.  Today's rate for a fixed rate stated income loan is 9.50%. 

However, qualified buyers are still able to get financing in the 6.50% to 6.75% range for FHA and Fannie Mae loans. Even rates on jumbo loans (loans in excess of the Fannie Mae limit of $417,000) are reasonable, currently about  7.25% for qualified buyers. Now when buyers ask us how much they can qualify for, we actually review pay stubs, tax returns, bank statements, and credit reports before we give them an answer.

Guest Author Randy Kelly is a Mortgage Banker and Finance Author with Boulder West Financial Services. He can be reached on-line at http://www.boulderwest.com/.

Colorado Appraiser Continuing Education Requirements/Audits

The Colorado Division of Real Estate and the Colorado Board of Real Estate Appraisers recently sent out a special announcement via email reminding all Colorado appraisers of the continuing education requirements. Colorado appraisers are required to complete at least 42 hours of continuing appraisal education during their 3-year license period. A 7-hour USPAP Update Course must be taken as part of the 42 hours.

The Division of Real Estate is performing audits to ensure compliance with continuing education requirements. The Division audited 100% of licensees who renewed as of 12-31-05. Shortly, we will be expanding our audit to include 100% of licensees who renewed as of 12-31-06. It is also very likely that they will do a 100% audit of licensees who renew as of 12-31-07.

The Divisions reminder also listed the penalties for failing to complete continuing education prior to renewing your license. Currently, these penalties include license suspension until the continuing education requirements are completed and a $600.00 fine. This can also be considered disciplinary action that is shown as a red flag in the public license database.

VanEd currently offers the 7-hour USPAP course which will count towards your hours and is required every other year. You may enroll and sign up for the 7-hour USPAP course here.

License Expire December 31st, 2007? Have you completed your fingerprint background check yet?

For the past two years all renewing Colorado Licensees have been required to submit a Fingerprint based criminal history background check. This year is the third and final round of renewal fingerprints mandated by the Colorado Legislature. VanEd wants to remind all real estate licensees that this year Mortgage Brokers are also required to submit fingerprint cards to the CBI and Division of Real Estate. With a large pool of mortgage brokers potentially sending in fingerprint cards, all real estate licensees are advised to submit their fingerprint cards as soon as possible.

Any broker who does not complete the background check process prior to December 31st, 2007 will be inactivated beginning on January 1st, 2008.

Fingerprint cards can be taken to many local police stations and electronic fingerprints may be taken at any PSI testing center. Many local Associations are also offering fingerprinting. For more information and fingerprinting facilities, click here to view the CREC Notice. This notice is intended for those licenses whose license will expire December 31st, 2007.

Registration is open for the Colorado Association of REALTORS® Annual Convention

The 2007 CAR State Convention will be held October 21-23 at the Broadmoor Hotel in Colorado Springs. The convention will host numerous education offerings, including the CREC Annual Update Course scheduled for October 21st at 1:00pm. VanEd is proud to be the provider to the state association for this annual update course.

You can register online for the state convention by visiting the CAR website at www.coloradorealtors.com. You may also register for the CREC Annual Update course by logging on at VanEd and then selecting Classroom Courses under your Available Courses tab. For more information or assistance, email us at cecredit@vaned.com, or Click Here to register for the update course online.

Finance Friday: Credit Crunch Continues

The turmoil in the mortgage industry continues.  The only mortgage backed securities that are generating any buying support are those issued by Fannie Mae, Freddie Mac, or Ginnie Mae.  The securities filled with jumbo, alt-A, and no doc loans are not finding any buyers.

On Thursday, Countrywide Financial had drawn down their entire $11.5 billion credit line, and their bonds were downgraded by Moody's to Baa, which is considered junk status.  First Magnus, a large purchaser of whole loans, filed for bankruptcy protection.  Wells Fargo quit accepting overnight rate guarantees.  Fitch rating service put all $12.5 billion of the second mortgage backed backed bonds it watches on credit watch.  Effectively, the only reasonably priced loans available are within conforming limits ($417,000), and these require either 20% down or mortgage insurance.

Guest Author Randy Kelly is a Mortgage Banker and Finance Author with Boulder West Financial Services. He can be reached on-line at http://www.boulderwest.com/.

VanEd Presents: Resort and Second Home Specialist (RSPS) designation program

Van Education Center is proud to now have 3 of the RSPS certification courses available to members online. The RSPS, or Resort and Second-home Property Specialist, is the NAR official Resort & Second-home certification program. The program requires completion of 2 core courses and 2 elective courses. One of the electives, Tax-Deferred (1031) Exchanges, is offered online. VanEd also offers two of the elective courses online, the CIPS International Real Estate for Local Markets course and the e-Buyer course.

To view detailed information on the RSPS Certification and the available courses, visit www.vaned.com/RSPS.  Applications to earn the certification should only be sent in after completing all 4 courses that are required (2 core, 2 elective).

Click Here to open the Application for the RSPS certification.

Registration open for REBAC Networking and Awards reception at NAR conference

REBAC members are encouraged to register for the Networking & Awards reception to be held on Wednesday, November 14th at the NAR conference in Las Vegas. The event is free to those who list REBAC as their primary affiliation, and costs $25 for guests on members who do not indicate REBAC as their primary affiliation on their conference registration form.

REBAC is also providing various designation courses at the convention, and the registration form and list of events can be found by clicking here. Note: All members wishing to attend the networking event to be held at the Venetian Hotel must RSVP. You may also contact Dawn Headtke at 312-329-8488 to register for the reception.

Nebraska Real Estate Commission promotes Errors & Omissions seminars

Williams Underwriting Group, Inc., the program administrator for the state of Nebraska's Errors & Omissions Insurance Program, will be conducting a series of seminars as part of the services they provide. The seminars will include a review of loss and claim records, and there will be a discussion of risk management related topics. Dick Williams, Ph.D., CPCU, Chairman of Williams Underwriting Group, Inc., will be conducting the seminars and will also discuss current issues in the industry.

The seminars are being held between September 24th and September 28th in various parts of the state. For more information or to register contact the Nebraska Real Estate Commission.

Last chance to Register for NAR convention and get early bird discount

Register for the NAR annual convention and expo by August 15th and pay only $300 for the 4 day event. The conference, which will be held in Las Vegas November 13th - 16th, will include Bill Cosby at the General session and James Taylor playing at the REALTORS® celebrity concert.

You can view the Conference Schedule and register online by clicking here!

Finance Friday: What a Week

The mortgage market had a tough week.  It all began last Friday when American Home Mortgage began to falter.  American Home is a big Alt-A lender, not a sub-prime lender.  Sub-prime loans are loans to borrowers with questionable credit.  Alt-A loans are loans to borrowers with A credit, but do not meet Fannie Mae guidelines.  It can be because of loan size (jumbo loans), property type, or documentation type, including stated income, no ratio, and no doc loans.

Many financial industry leaders, including Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson, thought the sub-prime market issues would be limited to the sub-prime lenders.  However, after American Home's bankruptcy filing on Monday, the mortgage credit issues had spread throughout the world wide security market.  Mortgage Backed Securities (MBS) issued by anyone other than federally backed institutions (Fannie Mae, Freddie Mac, and Ginnie Mae) have lost favor with investors, and rates on Alt-A loans have increased over one percent in the last week. On Thursday, BNP Paribas, France's largest bank, refused redemptions of three funds because the bank couldn't calculate how much the funds' holdings were worth due to a lack of buyers. In response to the liquidity crises, the European Central Bank (ECB) injected $130 Billion and the FED pumped in $24 Billion to stabilize the markets.  While we don't know how this will play out, we know interest rates for mortgages other than Fannie Mae, FHA, and VA will be substantially higher.

Conforming Fannie Mae loans stayed stable this week, about 6.625% for no point low fee loans, Jumbo loans (above $417,000) are up to 7.25%, and no-doc loans are about 8.25%.

Guest Author Randy Kelly is a Mortgage Banker and Finance Author with Boulder West Financial Services. He can be reached on-line at http://www.boulderwest.com/.

Colorado Real Estate Commission adopts new contract, names new Education Committee

At their August 7th meeting, the Colorado Real Estate Commission completed a rulemaking hearing to approve a new Buy/Sell contract. After a comment period that concludes Friday the forms committee and staff will review any notes from the commissioners and the public and then prepare to create the final copy of the new CBS1 form. A draft copy of this form is available by clicking here. Comments on the form should be directed to the Commission this week. The final approved form will not be mandatory until January.

The Division also announced the new education committee members at the meeting. They are Susan Plage, current President of the Colorado Real Estate Educators Association (CREEA), Rick Madden, former Director of Education for the Division of Real Estate, George Harvey, President of the Colorado Chapter of Realtors Land Institute, Caren Hunt, CAR Education Director and Curtis Hilty. A staff member from the Division will be assigned to begin working with the committee in the coming weeks.

Registration is open for the Nebraska REALTOR® Association Fall Meetings, scheduled September 10-13

Registration is open for the Nebraska REALTORS® Association Fall Meetings and education events, which will take place in Lincoln September 10th-13th, with the Presidents Hospitality reception slated for Monday the 9th. The schedule of events includes all association business meetings and continuing education sessions running each day during the event. Featured speakers include Rich Casto, Mildred Wilkins, Steve Stazel and Mark Wehner.

To learn more about the Fall Meetings, visit the NRA home page. You can register online for the meetings by clicking here. For hotel information, click here.

Registration open for Volunteer activities at NAR Annual Conference in Las Vegas

After a successful volunteer effort in New Orleans last year, REALTORS® again have the opportunity to volunteer in the community at the NAR Conference and Expo in Las Vegas. NAR will provide a portion of attendee registration fees to local Habitat for Humanity efforts and for improvements to a children's shelter in Las Vegas. Join REALTORS® from across the Nation in this wonderful effort.

Volunteer space is limited so attendees are asked to begin registering early. You can register now for the conference by clicking on the image or visiting the NAR conference web site.

Finance Friday: More problems with piggybacks - Chase changes guidelines

Effective Monday, August 6, Chase Home Equity is changing their second mortgage guidelines, substantially decreasing their loan to value limits.  For a seven state region that includes Colorado, Arizona and California the maximum combined loan to value Chase Home Equity will lend is 90%.  The maximum loan to value for stated income products has been reduced to 80%.  These limits affect both purchases and refinances.  Chase Home Equity has been a major source of second mortgages in Colorado, allowing buyers to get into a home with little or no down payment.  This will certainly make piggyback purchase loans more difficult to get.

Mortgage rates have dipped slightly, down to 6.625% for no point low fee loans.

Guest Author Randy Kelly is a Mortgage Banker and Finance Author with Boulder West Financial Services. He can be reached on-line at http://www.boulderwest.com/.

Vaned Presents: Building Green: The High Performance Home course online

Van Education Center is proud to announce the launch of our first Building Green course, The High Performance Home. The course, a 4 hour Continuing Education course, is available online at www.vaned.com. During this course, students will be taught the elements and components of Green Building and design as they relate to both new and existing homes.

The course is available now at www.vaned.com.