Monday, June 28, 2010

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.

Wednesday, June 23, 2010

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.

Monday, June 21, 2010

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.

Thursday, June 17, 2010

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.

Monday, June 14, 2010

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.

Friday, June 11, 2010

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.

Monday, June 7, 2010

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.

Friday, June 4, 2010

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!