LIVE SAFE Prep Course Coming Soon!

Due to popular demand, Praedo Institute is spreading it's live course offerings to Nevada. We have a class scheduled for October 7th, 2010 at 9am. This course is 3 hours long and will help students prepare for the national and state portion of the SAFE exam. Included also in the course is our popular review manual. Sign up today as seats are going fast!! Sign up now!!

September 16th SAFE Prep Course

Praedo Institute has an upcoming SAFE prep course on Thursday, September 16th from 9:00 am-12:00 pm! The class will be held in the Wasatch room of the Salt Lake Community College located at 9750 South 300 West in Sandy. This 3-hour course will count as 3 credits toward your continuing education and will prepare you for the SAFE exam. Sign up today as seats are going fast. Sign up today!

FHA Announces New Credit Score Requirements, Delays Other Changes

It’s been a busy week for HUD as far as mortgagee letters go. HUD released the updated LTV/credit score requirements, which they announced earlier this year. Loan to value (LTV) ratios will now be limited depending on the borrower's credit score as follows:

• Borrowers with a minimum score of 580 or above are eligible for maximum financing;
• Borrowers with a minimum score of 500 to 579 will be limited to a 90 percent LTV; and
• Borrowers with a minimum score under 500 are not eligible for FHA financing.

Borrowers without credit scores may still qualify for financing under the non-traditional credit underwriting requirements. These requirements are effective for all case numbers ordered on or after October 4, 2010.

HUD has delayed any changes in the maximum amount of seller concessions or any changes in manual underwriting requirements.

FHA Announces Mortgage Insurance Changes

Yes, as soon as I advised everyone to wait for FHA’s announcement, it was released. FHA released the mortgagee letter today finalizing the changes in monthly and upfront mortgage insurance.

The changes are effective for any case numbers ordered on or after October 4, 2010. The changes apply to all traditional FHA purchase and refinance mortgages, including FHA and FHA streamlines.

The Up Front Mortgage Insurance Premium will now be one percent of the base loan amount. The monthly mortgage insurance will depend on the loan-to-value (LTV) ratio. Loans with an LTV of 95 percent or less will be subject to a monthly mortgage insurance payment of 85 basis points. Loans with an LTV exceeding 95 percent will be subject to a monthly mortgage insurance payment of 90 basis points. These changes only apply to amortization periods greater than 15 years. Guidelines for loans with amortization periods of 15 years or less remain unchanged.

What is going on with FHA mortgage insurance?

We continue to receive multiple questions regarding the implementation date of FHA’s changes in the monthly mortgage insurance premium as well as the Up Front Mortgage Insurance Premium (UFMIP). As you may know, Congress passed H.R. 5981 which increased the statutory limit on monthly mortgage insurance 1.55 percent. This does not mean the monthly mortgage insurance premium will increase to 1.55 percent, but does mean HUD has the authority go to as high as 1.55 percent. Currently, HUD has the statutory authority to charge up to 3.0 percent on the UFMIP but only charges 2.25 percent.

A few days after the passage of H.R. 5981, Commissioner Stevens, Federal Housing Commissioner, released a statement which included the following:

"It is our intention that effective on September 7, 2010, FHA’s upfront mortgage insurance premium will be adjusted down to 100 basis points on all amortization terms and the annual mortgage insurance premium will increase to 85-90 basis points on amortization terms greater than 15 years². A Mortgagee Letter will be forthcoming once President Obama signs the bill into law…"

Notice the words “intention” and “mortgagee letter will be forthcoming”. A few days later, Deputy Assistant Secretary, Vicki Bott, released a statement, which included the following:

"Last week, FHA Commissioner David H. Stevens announced plans for implementing FHA’s new mortgage insurance premium structure. As we work to publish a Mortgagee Letter, it is our intention to announce that based on industry feedback and our desire to have this change implemented successfully in the marketplace, FHA will make the premium fee changes on all new case numbers effective October 4, 2010."

Again, notice “intention” and “as we work to publish a mortgagee letter.” In the release, Deputy Assistant Secretary Bott clarified that HUD’s intention was to simultaneously decrease the UPFMIP to 1.0 percent and increase the monthly MIP to 85-90 basis points on amortization periods over 15 years.

Bottom line…we still do not know the exact details of the change including the implementation date or the amount. We will post the final details as soon as we see the mortgage letter announcing the change.

Last Chance for Discounted Continuing Education

Tonight is your last chance to take advantage of our summer special!! Discounted continuing education lasts until midnight tonight!! The hours are ticking away...

Stop Procrastinating Mortgage Brokers!!

Stop Procrastinating and sign up for Praedo Institute's 3-hour SAFE preparation course that will count for 3 hours of mortgage continuing education and will help loan originators prepare for the SAFE exam. The course will be held at the Salt Lake Community College Miller Campus at 9750 South 300 West in Sandy from 9 am -12 pm on September 16. There are still seats available, but they are going quick!! Sign up today!

Transfer Fee Battle is Heating Up

A few years ago, builders started imposing transfer fees on the homes that they sold. Most of the buyers didn't care because the fee didn't show up until they sold the house and then it was the new buyer's responsibility to pay for the fee. But things are starting to heat up in Washington as these transfer fees are being further investigated. Transfer fees have been more accepted in the past as they were usually found in the selling of condominiums and smaller homes where the funds would be used to pay for the maintenance and general upkeep of the housing project. The issue that has everybody up in arms over is the fact that these new transfer fees are doing nothing other than lining the pockets of builders (often for 99 years).

In a booming real estate market, we would probably see these fees getting swept under the rug. But in a weaker economy, everything is under the spotlight, especially in the real estate market. With so much opposition and press on transfer fees, we could see some federal regulation that would ban these fees very soon. The FHA has already proposed a rule that would restrict Fannie Mae and Freddie Mac from purchasing homes with these types of fees. I'm sure we will see more on this very soon.

Recovery Really Means Stabilization

In today's real estate market, we need to better understand what recovery really means. Many people, both in and out of the real estate industry, are waiting for loan programs to come back and prices to go back up. Financial recovery in our real estate market is all bout stabilization rather than recovery. Last month new construction was up 24%. That sounds great, but it really balances out when you factor in the 37% drop in new construction after the expiration of the home buyer tax credit. So pay attention to what's evolving in the market so you can improve your business and be the reliable agent or broker that your clients expect.

Seats Still Available at Utah SAFE Prep Course!

Tomorrow Praedo Institute will be hosting a 3-hour SAFE preparation course that will count for 3 hours of mortgage continuing education and will help loan originators prepare for the SAFE exam. The course will be held at the Salt Lake Community College Miller Campus at 9750 South 300 West in Sandy from 9 am -12 pm. There are still seats available! Sign up today!

SAFE Prep Course On Thursday Aug 5th at SLCC!!

Praedo Institute has an upcoming SAFE prep course on Thursday, August 5th from 9:00 am-12:00 pm! The class will be held in the Wasatch room of the Salt Lake Community College located at 9750 South 300 West in Sandy. This 3-hour course will count as 3 credits toward your continuing education and will prepare you for the SAFE exam. Sign up today as seats are going fast. Seriously sign up now.

More on Social Networking

I don't want to beat on a dead hose here but I want to encourage everyone to take advantage of social networking. If you don't you will get left behind. Marketing during tougher times will pay off with dividends as things get better. Take advantage of Facebook, Twitter, and other social networking tools. These are free tools and you must take advantage of this changing marketing world in order to stay in the game, The way people receive information has changed, products and the services now go to them.

Email support@praedo.com for more information. We are always happy to help at the Praedo Institute.

Facebook: Your Newest Marketing Tool

As if you haven't heard enough about facebook. Facebook just announced their 500 millionth user on Tuesday. There is now talk of an alleged contract that would award 50% of facebook to an associate of Mark Zuckerburg (Founder of Facebook), if the contract is found to be binding by the judge. Also, there is a movie coming. And this is to say absolutely nothing of friend requests, inbox messages, liking, photo tags, wall posts, and poking.

Without going into the how-to of facebook (you can talk to your 9 year-old niece for that), I'd like to shed a little bit more light on the power of this social media giant. In fishing, they tell you to 'go where the fish are.' In business, it has always been my feeling that you should 'go where the people are.' It sounds simple enough, but many loan officers and real estate agents are still avoiding using facebook as they see it as a fad. It is not. This is not a furbie or a tickle me elmo, facebook is here to stay. The longer you hold off to take advantage of this free service, the more business you will lose and the more business your cutting-edge competitors are going to get. Take advantage of it, build a company profile, update your status, and request a friend or two. Your checkbook will thank you later.

One thing to keep in mind. Do not mention confidential material on facebook that you would not openly talk about elsewhere. If you update you status saying that 'my clients just put an offer on their dream home,' the seller's agent may see it and encourage the sellers to reject the offer and raise the price. Your buyers may find out. They will sue you. They may win. If you're not going to announce it in the middle of the town square, don't post it on facebook. With 500,000,000 users it's more like Times Square anyways.

Jumbo Loans Are On A Comeback Tour

Jumbo loans are reportedly making a comeback. This is great for the middle- to upper-income borrowers who have been unable to purchase some discounted dream homes because of the drying up of the jumbo market. Bankrate.com is reporting 30-year fixed jumbo loan rates for 5.5%, which is very surprising for an almost extinct loan program.

When it comes to borrowers, banks are still only accepting the cream of the crop as they try to minimize risk and keep only good loans on their books. This is a slow start to re energizing this loan program, but it is at least a start, and many loan officers across the country are rejoicing at the idea of the jumbo loan market being revived.

While I've never been an advocate of beating the dead horse, I did want to add another plug to my unofficial theme I've had for our readers over the last couple of weeks. Be the professional your clients expect. Explain the pros and cons of a jumbo loan and be equipped to explain all of your borrower's specific options. Knowledge is power.

Foreclosures . . . By Your HOA

Foreclosures by your HOA. It hasn't been a common topic that has gotten much media attention, but it is happening. As many homeowners are struggling to keep up with their mortgage payments, many have elected to stop paying their HOA in order to put as much money into their home as they can. This has pushed many homeowner associations to get desperate. They certainly have a duty to fulfill to the other home owners, but many who have fallen victim are outraged.

34 states allow for judicial foreclosures by home owner associations. Most states have a long redemption period so homeowners have the option of paying off their debt to the HOA. The redemption period is the time period that the homeowner has to pay back the HOA and reclaim their house after the Home Owner's Association has taken title. Some states have very short redemption periods that hardly give the home owner the option to get to the bank before their house is gone forever. Florida's redemption period, for example, is ten days.

While this may never affect someone you know, it is happening and it is a stark reminder to mortgage brokers and real estate agents to advise their clients of ALL the costs of home ownership.

Mortgage Applications Are Way Down

Mortgage applications have dropped considerably since the expiration of the $8,000 home buyer tax credit. On an annual basis, the mortgage applications were down last week 43%.

Rates have not been this low for a long time but the lower rates don't seem to be helping anything. There is also a lower number of mortgage brokers and loan officers across the nation. While there is a large number of Americans who are apprehensive about jumping head first into purchasing a home, there is still a lot of opportunity in the market. It is a good time to go back to the marketing basics and update your clients. Yes, closing deals is more difficult these days, but those who market themselves well in this industry and perform a good service will thrive. Acknowledge opportunity for what it really is.

Be The Expert Your Clients Expect

I've said it many times before in this blog that one of the positive things that has come out of the bursting of the housing bubble was a cleansing of the real estate and mortgage industries. For a long time this industry has had a lot of part timers who would maintain a license and only close a deal or originate once or twice a year. I am the last one that will ever mock the entrepreneurial sprit. It is the entrepreneurial spirit that made this country what it is today and will be what continues to take it to new heights in the future. However, the problem with only getting your feet wet in this industry is that it is difficult, if not impossible, to stay on top of this constantly changing and evolving industry while maintaining another full time job.

With many of the part timers out of the industry, there is a call to the rest of the industry to raise the bar. Whether you are a seasoned veteran or a newcomer in this industry, sharpening your skills will pay off and with dividends. Your clients will notice, and your fountain of knowledge and expertise will spread throughout the land. Maybe not throughout the land, but you will get a lot more referrals!!

How important it is every day and every week to better understand your disclosures, and their time limits, and the laws, rules, and statutes that accompany them. Understand the good faith estimate and RESPA, no matter what industry you affiliate yourself with. This is one of the most powerful and important financial decisions most of your clients will ever make!! Help them to understand the costs, the market values, and treat it like it is - an investment!!! This is not just another commission!! Be professional in the way that you deal with it, but counsel with your clients and help them to understand the pros and cons of their investment decisions. You're the expert and they depend on you.

Nevada Has Jumped on The Bandwagon

Just a year ago, there were whisperings of whether or not the Nevada Mortgage Lending Division would join the NMLS. However, with the statutory guidelines set in place and the comment period being over, Nevada is officially joining the NMLS. They didn't have much of a choice due to the federal regulation of the SAFE act but they did have the choice of doing nothing. Doing nothing would obligate the Department of Housing & Urban Development to take over which would not be a fun process for anyone involved.

There is an unofficial fall requirement for Nevada mortgage brokers to join the NMLS and take their education but more news will follow on that.

Senate Rescues Homebuyer Tax Credit

On June 30th at midnight, the homebuyer tax credit was scheduled to end. However, Senate pulled a rabbit out of a hat and approved an extension of the homebuyer tax credit.

The homebuyer tax credit itself will not be extended but the closing date that current homebuyers have scheduled is been extended. With new federal laws and more complicated short sales, deals are taking a longer time to close. This extension will help over 180,000 homebuyers take advantage of the tax credit which translates into deals not falling through as many homebuyers were planning on using the tax credit for the purchase of their home in some way.

Thanks to one of the largest and most active political parties in the nation, the real estate industry has pushed congress to extend the closing date to September 30th. Yet another example of the powerful lobbying potential of the real estate and mortgage industies.

Stimulus Is Dead In The Water

Any realtor could tell you that the $8,000 federal tax credit for new home purchases is now over, but the closing deadline for the stimulus is June 30th. Many were hoping and lobbying that the stimulus bill be extended and there was a lot of momentum in Washington to pull it off, but the extension is now dead in the water.

Any realtor or loan originator who has spent any time in the market over the last year will tell you that the industry has been dramatically changed. You will rarely see or hear about a loan that closes in 15 or even 30 days. Between new federal guidelines and backed-up underwriting departments, things just take a lot longer.

And therein lies the problem for the hundreds of thousands of borrowers who are currently trying to close on a loan, but have not as of yet. They have until June 30th, and then the stimulus is gone. There are Whisperings of passing another bill to extend the closing deadline and to make it retroactive, but nothing concrete has been announced. This is definitely something we will stay on top of.

Know your Disclosures

One of the great things that has come out of the bursting of the housing bubble was a cleansing of the industry. Those mortgage brokers and real estate agents who held licenses to sell a home here and there and originate a loan every quarter are almost all gone. And if they're not gone now, they certainly will be soon. They simply will not be able to manage another job, part or full time, and keep up with the many changes that are happening in the industry.

Now, I am all for people who are hard working enough to put in extra time to make a buck but this isn't the garage sale of professional industries. There is a lot to know, a lot to stay on top of, and not staying on top of your game in the real estate industry can be detrimental to the future financial security of the families who you assist. This is usually the most important financial decision your clients will make, and not treating it as such could mean disaster for your clients.

Now I want to step off my soapbox and say that I am proud there has been a cleansing of the industry. However those who are still in the industry should continue to brush up. What type of doctor would you rather have in open heart surgery? The one who reads in medical journals every other day or the one who hasn't picked up a text since med school. Stay on top of your deadlines, stay on top of changes happening in the industry and get involved. Use the Praedo Institute as a resource to staying involved. We will do our best to keep you on top of what is going on. We are committed to helping you succeed and we believe in this industry.

We Want YOU Involved!!

We need your feedback. We are always trying to improve and make our courses and services the best the industry has to offer. We are constantly shaping and redesigning to make the most beneficial learning experience you can have. So whether it is a question about the NMLS, or a way to make our courses better, or even more focus on real estate blogging, whatever it may be, we want to help. Please email us your ideas and insights at support@praedo.com.

Major Banks Are Changing Course

Point the finger at whoever you want for the popping of the housing bubble, cast the blame where you will, but everybody will agree that banks have taken a huge hit. With the free market system being what it is, short sale 'experts' and loan modification companies have popped up everywhere. The government has totally got involved, federal changes have been made, and some markets have even dropped by more than 50%, and the rest is history.

Through this whole process, larger banks and lenders have always been a couple steps behind. That is now changing, banks are now offering to get more involved in short sales to expedite sales for all parties considered. They have looked at the market analysis, and realized that it is they and their investors who have to take the majority of the hit.

So now rather than the bank giving a short sale approval for a specific buyer, the bank approves a lower price and the realtor can offer the home for the lower price to any prospective buyer. This will eliminate a lot of the problems that realtors are seeing on the MLS with housing prices that are 'subject to third-party approval.' Now the house is already approved and ready for sale. Said an executive at Bank of America, "The big difference is that BofA, as well as some other big banks, are changing the model from reactive to proactive."

This change will dramatically affect the way the real estate market evolves over the next couple of years.

Nevada Final Hearing Approaching!!

Final rules have been announced for Nevada and a final meeting has been planned for June 30. It is crucial for those who plan to participate in the Nevada mortgage industry or who are currently involved in the industry to learn about these changes and be present at the meeting with any comments or concerns you may have.

Nevada has been working for over a year to come into compliance with federal laws and regulations. These final changes will get Nevada up to speed and will help them be complaint with the NMLS.

Senator Reid Trying to Extend Deadline for Tax Credit

There has been talk of an extension of the federal tax credit being extended. There has been a lot of borrowers who have cried for an extension of the tax credit. Those cries have not fallen on deaf ears. Senator Majority Leader Harry Reid (D-Nevada) is trying to extend the closing deadline until September 30th.

This extension will not allow for any new buying exposure, simply a longer closing deadline for those who are in the process of closing but are not going to make the current June 30th deadline. The National Association of REALTORS has been saying in its reports that there are a large number in this category who would largely benefit from the tax credit.

It is a good idea for mortgage brokers and lenders to follow this extension closely so that you can better help current borrowers who fit into this category.

Failing Wait Times & Deadlines

Failing wait times and deadlines are brewing to be a perfect storm for many mortgage brokers this year. Testing Centers are filling up around the country. As the wait times get pushed back further and further to get a seat, it is only a matter of time before available times are past state-mandated deadlines. The testing centers can't do anything, it is out of the jurisdiction of state agencies, and NMLS simply doesn't care.

The other part of the perfect storm is the failing wait time. If you fail one of the exams, you have to wait 30 days in order to take it again. However, if you fail a test 4 times, you have to wait six months. Federal bureaucracy at it's finest.

So don't wait and register for your tests today. As always, online and live SAFE prep is available through the Praedo Institute.

HUD called, and They Want You To Call Them Back

Well, maybe someone from HUD didn't actually call . . . but they did do a press release and they do want to hear from you. The press release calls for feedback on RESPA's prohibition against the "required use" of affiliated settlement service providers.

The press release goes onto say that "It is a violation of RESPA when a consumer is required to use a particular mortgage lender, title company, or other settlement service provider that is affiliated with another business in their mortgage transaction. However, whether a consumer is 'required to use' a particular affiliated service provider when they are offered a discount or some other incentive is less obvious."

The issue that is plaguing HUD and the public who is trying to strictly follow the rule is where the line is supposed to be drawn between what is and what isn't "required use."

HUD reminded the public of its purpose, to "prevent kickbacks for referrals that increase costs of settlement services and to encourage shopping for settlement services. They are still comitted to the cause, but they are seeking insight from both the public and industry as to where to draw the line.

Current statute reads: "Required use means a situation in which a person must use a particular provider of a settlement service in order to have access to some distinct service or property, and the person will pay for the settlement service of the particular provider or will pay a charge attributable, in whole or in part, to the settlement service. However, the offering of a package or (combination of settlement services) or the offering of discounts or rebates to consumers for the purchase of multiple settlement services does not constitute a required use. Any package or discount must be optional to the purchaser. The discount must be a true discount below the prices that are otherwise generally available, and must not be made up by higher costs elsewhere in the settlement process."

You can email in your comments and view the entire press release by visiting HUD's website. Get involved!

On the Road Back to Recovery

If you follow the news as closely as I do, you are starting to hear some good outlooks for the US economy. Despite global fears and a shaky European economy, things are looking up. Chairman and Chief Investment Officer of T. Rowe Price, Brian Rogers recently told Fortune magazine "We're on the long and winding road of economic recovery. I think the markets have moved faster than the global economy, yet the global economy has shown some pretty good signs of progress."

Notwithstanding the hurdles and nasty parts of the road that are yet ahead of us, no one can complain that most signs of the economy are saying that we are on the road back. Things are still fragile, but at least they are not declining. It is a good time to judge where we, and our investments for that matter, are. What did we learn? What can we do to take advantage of the present economy? As real estate agents and loan originators, what can we do to better understand the financial situations of our clients so that we can help them make more financially sound decisions? As agents and mortgage brokers, we help our clients make some of the most important financial decisions of their lives, are we properly equipped to do so?

Pay Attention To Dates

I know it sounds like something your high school history teacher would tell you, but this time it really will affect you. Well it will affect you a lot more than your grade at least. As many NLMS and state guidelines are coming near, and with many of the deadlines changing without notice, it becomes a mortgage broker's responsibility to know when those dates are and to follow them strictly. Please consult your state's regulatory agency or the Praedo website for more detailed information. An apple on the desk will not get you out of this one.

Testing Centers Are Filling Up Fast

With SAFE testing deadlines starting to hit around the nation, mortgage brokers around the country are scrambling to register to take national and state exams. What they're coming to find out is that . . . testing centers are filled up. Usually the wait is only for a couple of days or weeks but some are finding out that if they don't want to wait a couple of months, they will have to make the drive, or even flight. Similar problems have arose in the past as students try to meet required deadlines and quickly find that testing centers are filled up in their area. They must to choose to drive to a different location (sometimes in a different state) or stop working until they can meet deadlines.

However, the situation that we currently are in is even more particular. As many states have similar deadlines, traveling to a different location (even in another state) may not be possible as many test centers may be booked past the required deadlines. If deadlines are not met, some loan originators may be forced to stop originating until they meet the deadlines. Do not wait. Register today! If you need help preparing for the test, contact us for SAFE prep materials!

Hot off the press . . . California Manuals

California state review manuals will begin shipping this Friday, May 21. Many mortgage brokers in California have tested poorly on California's state portion of the SAFE test. This manual prepares students for that portion of the test by covering all of the California laws that the 20-hour national SAFE course does not. If you have any questions or would like help ordering a California review manual, please contact us by clicking HERE.

Live SAFE Prep In Salt Lake This Thursday!!

Due to popular demand, we are running another live National SAFE test prep course this Thursday, May 20, 2010. This class will help current mortgage licensees prepare for the national portion of the SAFE test that all licensees must take and pass in 2010. The course will not only help you pass the exam but will count towards three hours of continuing education (2 hours of federal law and 1 hour of general). The class will be held at Salt Lake Community College at 9750 South 300 West in Sandy, Utah. The class will be held from 9 am - 12 pm.

Seats are going very quickly. Don't wait and sign up HERE TODAY!!

California Mortgage Manuals Coming Soon!

We have had many of our California students ask about state-specific test prep for California and we have heard your cries. We will have California state prep available this Friday for all of you distressed California loan officers who are looking to pass the test.

Many have also asked why wasn't there any California test prep in the 20-hour SAFE course? Now that loan originator education is federally policed by the NMLS, states had to choose how they want their loan officers licensed. For many states, such as California, it was a lot easier to simply require the standard 20-hour package that NMLS had approved rather than require state specific education and the 20-hour package. For this reason you are seeing a number of state-specific questions on the test that was not explained in the education.

Praedo on YouTube

Praedo Institute on YouTube. No that was not a typo. With all of the changes happening in the real estate and mortgage industries this year, we have extended our Praedo YouTube channel with the Praedo Video Series. This will allow mortgage brokers, agents, brokers, and managers alike stay on top of the changes that are affecting our industry.

Check it out today!! YouTube Channel

If you have a question that you would like us to address on the channel to use in your own training, send us an email at support@praedo.com

We Are Here To Help

We are here to help. That sounds like a copyrighted slogan from a Fortune 500 company, so I'm not going to use it any more so I don't get in trouble. But we really are. Our team is in constant communication with departments of real estate and while many large corporations have travel freezes, we are still traveling. We are traveling to find out what is going on and persuade for the best interest of the industry. We do this so that when you call or email us with a question, we will be there to help. So give us a try. I guarantee you will not be disappointed.

Can You Get Out of SAFE Testing & Education Requirements?

The deadline is quickly approaching for many to be able to opt out of their testing and education requirements. Some states have struck a deal with the NMLS that enables many of their licensees to opt out of testing and education requirements. While many state requirement deadlines and requirements are different, the process is relatively similar across the nation.

If you are eligible for exemption from any testing & educational requirements, you must transition all of your information to the NMLS system and submit an MU-4 Form. After transitioning over, you must certify that you meet the requirements (basically an excuse for NMLS to charge you a frivolous charge). If the state(s) that you are registered in concur that you are eligible for the exemption, you will be able to register as a mortgage licensee.

The problem is that the window is rapidly closing. NMLS has, in it's infinite wisdom, set up several dates that make meeting the requirements for opting out very difficult. If, for example in the State of Utah, you do not transition over to the NMLS system by the end of May, you are no longer eligible for certifying. It goes without saying that this date has been changed several times and many licensees across the nation are very confused. Please do not miss out on this opportunity. Please contact Praedo Institute or your local state government to determine whether or not you are eligible for the exemption.

St. George SAFE Prep This Thursday!!

St. George mortgage brokers wait no longer!! We are teaching a three hour mortgage SAFE prep course this Thursday, May 6. Sign up now so you can avoid the drive up to Salt Lake or down to Las Vegas. This three-hour preparation course will be your most important tool in passing the NMLS national and state exam. Sign up today as seats are going fast!!

SIGN UP HERE

We will see you there!!

Going Green: Does It Make Cents?

With Earth Day just a week behind us, we've heard a lot of talks on the importance of going green. Washington is even pushing the trend on homeowners through tax credits and incentives. However, homeowners need to understand if it is in their best interest and realtors should advise accordingly.

The issue is pretty simple. Homeowners can save money on the upgrades due to the tax credits and incentives but they can only save a portion of the costs and most of the upgrades savings stop at $2,000. That is a drop in the bucket for a green upgrade. But the real problem is that many appraisers across the country are not on board. The majority of appraisers are not including green upgrades in the value of the home because markets are not looking for them. Unless buyers want these upgrades for the sake of having them, many homeowners won't act unless they can recover the majority of the costs in the sale of their home.

DC has removed the $2,000 cap for "qualified solar expenditures" so markets in which solar panels are worthwhile can take full advantage of the tax incentives. However, there are few markets in which solar panels are worthwhile and socially acceptable. There are even fewer where appraisers are adding value of the panels to the value of the home. In markets such as these (many of which are in California), it would be relevant to urge your clients to upgrade their homes. At the end of the day, as it is with any upgrade, it is important that the upgrade is analyzed from a financial perspective and not simply from a social awareness perspective.

Big Changes For Nevada Mortgage Licensees

Nevada mortgage brokers and lenders alike are preparing to hop onto the NMLS roller coaster. Many states have already integrated their systems with the Nationwide Mortgage Lending System but Nevada is one of the last states to get on board.

Originally the Nevada mortgage commission was slow to align with the NMLS. There were even talks of whether or not Nevada would ever join the NMLS. However, Nevada conceded and is now just another car on the roller coaster and Nevada mortgage brokers and lenders should expect nothing short of a roller coaster of changes. Many of the proposed changes will be up for public comment this Friday. If you can attend either of the two Nevada meetings, it would be a great time to go out and show your support.

Meetings will be held at 9 am on Friday, April 30, 2010 at the Las Vegas Grant Sawyer Office Building 555 East Washington Avenue Room 4500 Las Vegas & Carson City Office of the Attorney General 100 North Carson Street Mock Courtroom Carson City. Please attend!

New Home Sales Up 27% - That's Good For Everyone

New Home Sales were up last month 27%. It was the fastest single-month jump in 47 years. Many skeptics are saying that it was just the market trying to do a last minute reaction to the new homebuyer tax credit that ends next week. Others are predicting sales later in the summer will drop. Others are saying that it is the economy recovering and people feel more secure about their jobs and are restoring their faith in the real estate economy.

My wisdom points me to believe that the future is difficult to predict. But I will say that people are getting loans and they are buying homes. Transactions are being closed and deals are being done. That is a huge improvement from where we were just one year ago when even large lenders were making program changes on an almost weekly basis. Sometimes this industry has to weather the storm. My thoughts are that things are getting better and that is a good thing. If you or someone you know wants to get into the real estate or mortgage industry, it's a good time to turn to the experts at the Praedo Institute. We will help you hit the ground running. Mortgage brokers and real estate agents who need continuing education can also take advantage of our summer discounts.

Life

Whether things are good or not so good, good ratings from news rarely come from coverage on a couple's first home, puppies, or a local 10 month-old's first steps. What gives good ratings is news material that stirs emotions, feelings, and intrigues the reader or listener to give up their full attention and give them something to talk about at the water cooler at work or in the line at Starbucks. I am one who advocates staying on top of world events, staying up on cutting technology, participating and being active in your neighborhood associations, and being a loyal and active contributor to local, state, and federal politics. I agree and stand beside Thomas Jefferson when he said that "all that is necessary for evil to triumph is for good men to do nothing."

It goes without saying that life is a balancing act where one must choose between a variety of good things. But as the world swirls around us, it is my hope that we can cherish life around us. Most problems will pass and if they don't pass quickly, adjustments will be made, but to the best of my knowledge no problem on this planet has ever meant the end of the world. Shouldn't we be a little bit wiser, if for no other reason to keep stress levels down, and consider the clouds of life to be temporary shade rather than an absence of sunshine. I fear that we are missing too many things. We are missing the couple's first home in the neighborhood and the puppies and the new-born babies. I especially fear that it may be our first home or our toddler or our puppies who are getting swept by the wayside.

While this is not Thanksgiving, we do have so much to be grateful for, even in April. I also stand beside Thomas Jefferson when he commented "and thanks to a benevolent arrangement the greater part of life is sunshine." Problems will pass by you occasionally, but may our happiness take up a permanent residence.

Things Are Getting More Lenient

For better or worse, banks and lenders are becoming more lenient with what they are requiring from borrowers. It was only a year ago that most borrowers felt like they were being vetted to become a presidential candidate as they applied for home ownership. Instructors at the Praedo Institute have been joking with loan originators that they should learn how to draw blood, as that is certainly going to be the next required step in the application process and how they could expedite the process if they could draw blood themselves. However, the wind is starting to change direction in the market.

Fannie Mae is easing up on its requirements from borrowers to make home ownership easier in these difficult times. If you have been given the deed to your house back to the bank or done a short sale on a home, Fannie Mae regulations stated that you could not apply for a loan for four years. Fannie Mae is shortening that period to two two years. Cutting this length of time in half allows more borrowers to get back in the housing market.

The sentiment of such a change brings mixed feelings. Should forgiveness of such a magnitude be expedited or do we need more borrowers in the country in order to take up excess inventory? There are arguments that could be made on both sides. Certainly lenders are conscious of the fragile state of the housing market but executives at Fannie Mae feel that this is a move in the right direction. This expedited forgiveness also comes at a steep price, borrowers who wish to take advantage of the policy must put down a 20% down payment.

For better or worse, no one can argue that these types of changes coming form Fannie Mae are a positive thing for the housing market and urges us to be optimistic for the future of the housing market.

Principal Forgiveness: The Battle Rages On

After President Obama announced changes to the Home Affordable Modification Program several weeks ago, many banks have ran to the defensive line in order to defend their position. The Obama administration has urged lenders to consider principal forgiveness when trying to work with borrowers who are underwater in their homes. However, many big bank executives testified to the House Financial Services Committee on April 13 of the harsh reality of the new changes.

One argument against principal reduction was that of costs. David Lowman of JP Morgan Chase said that this could cost the industry between $700 and $900 billion. He went on to say that "Broad-based principal reduction could result in decreased access to credit and higher cost to consumers because lenders will price for principal forgiveness risk."

Yet one must wonder how accurate these costs are. I would argue that these costs may cover the principal reductions of current borrowers, but how about the majority of the country who are willing and able to make their payments, but start missing payments to qualify under the HAMP program? There is also a deeper morale issue that is raising questions of fairness both to this aforementioned majority and to the banks themselves.

I stand behind Mike Heid of Wells Fargo who said "while very difficult to achieve, the needs and interests of homeowners in financial distress must be balanced with those who've remained current in their mortgage payments."

Unless we choose to change our economic system (which I am against with every fiber of my being), we need to stick to the rules of our current market and let the market balance itself out without any large government hand ordering banks what to do. How unconstitutional it is for a government to stand between two parties who have bound themselves in contract. But I guess that discussion is for another day.

"I Made It Through My Trial Period, Now I'm Getting Foreclosed On"

With the federal government pushing banks to perform loan modifications on behalf of their distressed borrowers, many banks have followed suite. With hefty incentives that are paid for by the American tax-payer lingering in front of their faces, banks are taking the bait and moving monumentally quicker than they did just a year ago. To the credit of new programs and the government's incentives, what once took 10-12 months can now take just a few weeks.

However, if you have tried performing a loan modification or know somebody who has, you know that submitting a loan modification request is no reason to pop the cork off the champagne. On the contrary, many people are finding that there are still a lot of holes in the system. One overwhelming problem for most borrowers is the trial period. Once a loan modification is made, banks will require the borrower to make the payments that the loan modification has outlined. Most borrowers are under the impression that if they make their payments during the trial period that the loan modification is official. Things couldn't be further from the truth. Many borrowers find themselves meeting all the requirements that the banks have outlined and than being turned down for the modification. This has left many borrowers confused and homeless.

Nonetheless, many analysts and economists are 'cautiously optimistic,' the new phrase coined during this recession. But housing numbers are looking better and those who have lost their homes are taking up inventory in rental properties across the country. The moral of the story is simple, if you're submitting a loan modification package to your lender, I would advise you to be 'cautiously optimistic.'

Preado Email Blasts Now in a Theatre Near You

With all of the changes that have affected the mortgage industry over the last year we are rolling out our Praedo Email Blast program. Each week we will send out an email that will contain a host of regulatory updates and changes that will help you stay on top of all of these changes. Our first email blast update was sent out earlier this week and we've already got a great response.

Our email blasts will soon include YouTube videos that can be a great tool to use in training meetings and for your own improvement. Please email us if you did not receive an email this week and we will get you on the list. Praedo Institute. Your source for mortgage education.

Praedo: Your Source For SAFE Information

Mortgage brokers across the country are just trying to keep their heads above water. The bursting of the housing bubble delivered a tough blow to loan originators last year. And now with Congress pointing the cause of the bubble burst on mortgage brokers and lenders, and the deputizing of the NMLS (Nationwide Mortgage Licensing System) to police the mortgage industry, there is more red tape and a lot more restrictions that loan officers must abide by. Staying on top of all of these state and federal laws can be agonizing, so who best to turn to for up-to-date SAFE questions than the Praedo Institute. Between blogging, YouTube, Twitter, Facebook, email blasts, our informative website, and our knowledgeable staff, we can help you stay on top of everything you need and more.

Need Mortgage Brokers? Praedo Can Help

Are you trying to recruit mortgage brokers? Whether you're starting a new venture or trying to expand your company, we can help. Managers and owners alike can contact us order to join our third party employment page. Here you and your company can have access to thousands of SAFE licensed loan originators who are looking for work. Owners should also be aware that Praedo offers corporate discounts to our already competitive pricing for qualified companies. If you are interested in participating in our third party employment pages, please contact us at support@praedo.com.

Have other ideas on how we can help your company, let us know!!

Utah Real Estate Deadline Has Past

On January 1, 2010 The Utah Department of Real Estate increased the number of hours of pre-licensing education that new agents must obtain. Hours were increased from 90 to 120. The Division allowed real estate agents who had purchased a course prior to January 1, 2010 to complete all of their education and have all documentation into the Division by March 31. However, that date has passed and the Division has a no-exception-rule on changes such as this. Do not let your 90 hours of education go to waste!! You can purchase the additional 30 hours of education for a limited-time offer of only $80! You can access the course through Praedo's website or by clicking here.

The New Remodel

If you haven't already noticed, there's been a lot of buzz recently in magazine and newspapers on the 'new remodel.' With money tight, many homeowners simply can't afford or don't see the return in expensive remodels. As it always does, the design savvy remodel industry is suggesting to do more with what you have and to make minor changes in your home like lighting and paint rather than a massive overhaul that leaves the whole family eating in the garage all summer. If you are considering a remodel, look around and see where you are going to get the best design and best return in mind. We will be blogging more and more on this topic in the coming months.

We are even setting the standard with our new remodeled blog. Let us know if you like it!!

Overtime For Loan Officers Now Means More Pay

Currently the Fair Labor Standards Act allows loan officers to work overtime without being paid. Such a ruling is a huge benefit to managers but not as much for loan officers themselves. Even with the lobbying of several organizations such as the Mortgage Banker's Association, the exemption for loan officers was overruled. MBA senior executive Steve O'Connor commented on the ruling by saying 'It has been, and remains our contention that those who fall into the category of mortgage loan officers described in the opinion spend a majority of their time performing exempt administrative or executive duties; thus they should be exempt from FLSA coverage." Nonetheless the Department of Labor's reversal of their 2006 decision should bring a lot of change and adjustments to the industry.

Are 5% mortgage rates history?

The Fed has promised to continue to buy mortgage backed securities until April 1 of this year. Many are speculating that interest rates are going to rise considerably once the free market adapts to the new risk and the government has stepped out of the picture. While it is more than likely that the lenders will raise interest rates to cover this new risk, rates will more than likely not rise very much. Rising rates will push an already shifty housing market even lower to make up for the rise in interest rates. With stated-income loans and other risky loan programs almost completely extinct, people are starting to take a more realistic approach as to what they can and can't afford in a home. Even if they would like to get in over their head, the underwriting department at almost any lender will help them change their mind. If interest rates do rise, housing prices will adjust as well.

Testing Centers Filling Up FAST

Testing Centers are starting to fill up seats across the country . . . fast. With nearly every loan originator in the country needing to be licensed over the course of 2010, there are only so many spots left in testing centers. While hundreds of suggestions have been made by various Departments of Real Estate and other departments alike to the NMLS to expand the number of available seats in testing centers, those suggestions have fallen on deaf ears and the results are starting to float to the surface. In the State of Utah alone, students and experienced loan originators alike are being asked to wait 45 days before they can take an NLMS approved exam due to packed testing centers. What is more alarming than anything is the fact that we are in well . . . March. What happens to the majority of the market that will be scrambling to take their exams toward the end of the year? Worst yet, if you do not pass your exam and have to wait 30 days . . . you may have be out of work while you're waiting to retest.

The only reaction that we can have in this scenario is one that is born out of proaction. Don't wait to take your test. We would recommend signing up for one of our live test prep courses so that you can pass the first time. If you are interested please visit the Praedo Institute website at http://www.praedo.com/mortgage

Short Sales: Yet Another Avenue For Loan Fraud

Everyone in the mortgage industry is used to hearing about 'that agent' or 'that office' that is committing fraud. We gasp and point fingers and then go back to our desks, but at the end of the day it's important to ask yourself if you are committing fraud. When a bank issues a short sale agreement, it does so with a specific seller and a specific financial history in mind. If the buyer backs out of the offer, this short sale agreement is out of the picture. It is not valid for any other buyer. As a buyer's agent, if you were to use an old short sale agreement in order to intrigue other buyers, you are breaching your fiduciary duties, confidentiality laws, and laws that the third party bank or lender required when they issued the letter.

Stay tuned for more information on how to avoid loan fraud.

Fingerprinting Convention

As you are already aware, NMLS is not accepting your old fingerprints and all licensees must get fingerprinted again. With so many brokers and lenders needing to be fingerprinted in the State of Utah, Praedo Institute is looking to set up a day in which all licensees can come and take care of this requirement. Stay tuned for more details.

California Mortgage Brokers: The Clock is Ticking

As of January 4, 2010 all mortgage brokers who fall under the supervision of the California Department of Corporations are required to take 20 hours of SAFE-approved education by July 31, 2010. So if you do fall under the DOC's supervision, the sandglass has been officially flipped over. Once you have taken your 20 hours of SAFE-approved education you can go and take your state and federal exams.

Please DO NOT FORGET that if you do not pass the exam, you must wait 30 days before retesting. After the third attempt, you must wait 6 months. Make sure you are taking your education from a quality school with high pass rates, from a school like the Praedo Institute. www.praedo.com