Praedo Institute

LIVE SAFE Prep Course Coming Soon!

2010-09-21T15:53:00.002-06:00

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

2010-09-14T16:44:00.002-06:00

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

2010-09-03T15:46:00.003-06:00

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

2010-09-01T16:26:00.003-06:00

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?

2010-09-01T11:56:00.008-06:00

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

2010-08-31T16:47:00.003-06:00

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!!

2010-08-26T12:34:00.003-06:00

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

2010-08-24T14:27:00.002-06:00

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

2010-08-19T11:52:00.004-06:00

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!

2010-08-04T10:55:00.003-06:00

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!!

2010-07-30T14:13:00.004-06:00

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

2010-07-26T11:58:00.005-06:00

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

2010-07-21T12:50:00.007-06:00

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

2010-07-19T14:44:00.003-06:00

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

2010-07-16T12:15:00.004-06:00

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

2010-07-14T10:28:00.003-06:00

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

2010-07-08T10:41:00.006-06:00

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

2010-07-06T13:28:00.005-06:00

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

2010-07-02T10:22:00.003-06:00

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

2010-06-28T12:29:00.005-06:00

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

2010-06-23T10:44:00.006-06:00

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!!

2010-06-21T15:15:00.003-06:00

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

2010-06-17T15:30:00.005-06:00

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!!

2010-06-14T12:01:00.004-06:00

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

2010-06-11T15:37:00.005-06:00

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

2010-06-07T13:49:00.004-06:00

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

2010-06-04T10:26:00.005-06:00

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

2010-05-28T11:25:00.003-06:00

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

2010-05-26T15:27:00.003-06:00

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

2010-05-24T15:53:00.006-06:00

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

2010-05-19T16:43:00.004-06:00

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!!

2010-05-17T15:14:00.003-06:00

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!

2010-05-12T10:42:00.003-06:00

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

2010-05-10T16:00:00.004-06:00

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

2010-05-07T22:46:00.002-06:00

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?

2010-05-05T12:24:00.005-06:00

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!!

2010-05-03T14:06:00.005-06:00

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!!

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We will see you there!!

Going Green: Does It Make Cents?

2010-04-28T12:09:00.003-06:00

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

2010-04-27T12:28:00.003-06:00

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

2010-04-23T12:59:00.004-06:00

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

2010-04-21T15:03:00.002-06:00

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

2010-04-20T11:41:00.005-06:00

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

2010-04-15T15:08:00.005-06:00

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"

2010-04-13T10:24:00.004-06:00

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

2010-04-09T12:25:00.004-06:00

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

2010-04-05T15:45:00.004-06:00

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

2010-04-02T10:49:00.004-06:00

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

2010-04-01T12:05:00.003-06:00

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

2010-03-29T16:46:00.004-06:00

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

2010-03-26T16:05:00.004-06:00

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?

2010-03-24T16:17:00.003-06:00

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

2010-03-22T16:25:00.004-06:00

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

2010-03-17T16:07:00.003-06:00

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

2010-03-15T16:39:00.004-06:00

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

2010-02-08T13:19:00.001-07:00

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

National 20-Hour Mortgage Pre-licensing course is NMLS approved!!

2009-12-23T16:49:00.005-07:00

After meeting the conditions of the CSBS, our national course is now NMLS approved!! We will have other state courses up shortly. The 40-hour mortgage course for Utah will also be up next week. It's been a great year for all of us at Praedo and we wish you and yours a very Merry Christmas and a Happy New year!!

The New GFE Cost Breakdown

2009-12-15T11:36:00.005-07:00

It seems that everyone is still up in arms about the new Good Faith Estimate. If you are a little confused, don't be too hard on yourself. It is not because of you being a bad loan officer or a slow learner. The new GFE really pushes loan origination into a completely new arena. Many large lenders (who have very large and well paid compliance departments) are having a tough time understanding the new GFE and its effects. Here's a quick reminder, or tutorial, on costs:

- Costs which are GUARANTEED by the new GFE:
- Origination charges
- Interest rate related costs, AFTER the interest rate is locked
- Adjusted origination charges
- Transfer taxes

- Costs which may increase up to 10% at settlement:
- Required services selected by originator
- Title services and lenders title insurance, if provider was selected by originator or by consumer from originator's list
- Owner's title insurance if provider is on the originator's list
- Other required services chosen by the consumer from the originator's list
- Recording fees

- Costs which may change without limitation at settlement:
- Required services selected by consumer when they DO NOT choose a company identified by the originator on the originator's list
- Title services and lenders title insurance if provider was selected by consumer and was NOT included on the originator's list
- Owner's title insurance if the provider is NOT on the originator's list
- Escrow account deposit
- Daily interest charges
- Homeowner's insurance

Hopefully this helps. If you or your company would like some live training with us, please use the 'Contact Us' tab on our website (www.praedo.com).

A Good Time To Be Thankful

2009-11-24T11:06:00.001-07:00

There has been a lot of complaining in the mortgage industry for over a year now. I will be the first one to say that there has been a lot to complain about over the past year but we should take a break this week. What could have been a complete meltdown of our financial system was slowed and we are now starting to see the light at the end of the tunnel. We still have a long road in front of us but we can see the light. Despite the many fingers of blame that have been pointed at this industry from the federal government, business is getting better and for the most part, there has been an industry cleansing that has got rid of many brokers who gave this industry a bad name. But of all weeks of the year, this is a time to be grateful. We have so many things to be grateful for, look around. No doubt it will be an eye opening experience to anyone who really stops to think about all he/she has been given. Happy Thanksgiving from all of us at Praedo.

Great Turnout

2009-11-19T16:51:00.006-07:00

We had a great turnout at our Good Faith Estimate Course yesterday. We had over 100 students show up who were all eager to learn about the new good faith estimate and to be taught how to keep their jobs in January. We are eager to announce new classes coming in Salt Lake, St. George, Boise, and Denver. Don't wait until after the new GFE goes into effect to learn more about it. Step up to the plate and get some mortgage CE as well!! Real Estate continuing education also available.

FACT OR FICTION: BROKERS ARE DEAD

2009-11-10T16:42:00.003-07:00

So is it true or not? The end of the mortgage broker is here? New GFE takes away YSP? We have been flooded with questions regarding the RESPA changes which take effect on January 1, 2010. Rumors are flying regarding the future of YSP and the future of mortgage brokers in general. Many of these statements are simply false. The new GFE and the accompanying RESPA changes DO NOT eliminate YSP. The new GFE simply requires it be disclosed differently. Mortgage brokers may still earn YSP as part of the total compensation on the transaction. The RESPA reforms do not kill the broker industry, but do require ALL loan officers to change the way they disclose costs to the borrower.

Due to the massive amounts of confusion and rumor about these issues, we will be holding several seminars in the next few weeks to explain the new GFE and the RESPA changes. Please see the schedule below and know that we will be adding additional dates in Utah, Idaho, and Colorado. We are only charging $30 for the course and it is approved for 2 hours of core Utah Mortgage CE. (MC091014) In the next few weeks we will be launching a new online course on the new GFE.

Salt Lake City, Utah

November 18, 2009

St. George, Utah

December 14, 2009

Utah New Agent Renewal Course

2009-11-05T16:25:00.005-07:00

Praedo Institute offers the only online new agent renewal course in the state. This course allows new real estate agents the opportunity to sharpen their skills while their career is still in it's infancy. Students will not only participate in our engaging online education but will also complete several case studies that will help them be more successful in this competitive industry.

$8,000 Tax Credit Hasn't Been Extended YET

2009-11-03T14:15:00.005-07:00

Many loan officers, real estate agents, and even some title companies have been spreading the good word of the extended $8,000 tax credit for first-time home buyers. Well, hold the phone. You don't have to hang up the phone, but hold the phone. While there is a lot of momentum in the Senate to get this stimulus tax credit extended, it still has not happened.

Here is what is going on. If the tax credit is extended, it's December 1, 2009 deadline will be extended to some time during the middle of next year. There is also talk of a $6,500 tax credit for homebuyers who have lived in their previous home for at least 5 years. A final bill will be voted on next week in the Senate, but until then . . . Dec.1 is the deadline. Just hold the phone.

Idaho Mortgage Continuing Education

2009-11-02T16:27:00.004-07:00

I saw Christmas lights last night. I couldn't believe it. I just stared in awe, not really knowing what to do. We barely are scraping November and christmas lights already? Someone told me that they hauled up their Christmas tree this weekend. It made me think of two things. One, where has 2009 gone? Two, many Idaho mortgage licensees are coming up on their year-end renewals. With that being said, many will be procrastinating and their getting continuing education while the kids are banging pots and pans together and counting down to the New Year.

With that being said, maybe we can help you keep some of those long, forgotten new year's resolutions that you made back in January. The first of course being not procrastinating. The second being spending more time with your kids during important times in their lives, like New Year's Eve. Here's how we can help, we at the Praedo Institute are not only a leader in the Idaho mortgage continuing education but we have the best prices in the industry. Our courses allow you to take at your own leisure from the comfort of your own home or office. Contact us for information on corporate discounts and help others keep at least one new year's resolution.

Just how SAFE is it?

2009-10-30T15:24:00.004-06:00

Any firefighter or EMT will tell you that the worst thing to do in an emergency situation is panic. Whether it is the parent or a friend or even the victim himself, the guaranteed way to ensure a worse outcome is panic. I wish we could apply this to other facets of our lives. Sometimes we try to fix things that don't need being fixed and end up causing bigger problems then the ones we sought out to combat. This issue is really obsessed over in our society. We love it. We can't live without it. We thrive off of it. If you don't believe me, turn on prime time any night of the week. And before you run behind the barricade of blame that it is the networks' fault, they only give us what we want. But you turn it on and what do you see? Drama. Drama. Drama. People living ordinary lives with more drama then any self-respecting person could ever stand. And now that is 'reality' in our society. Normal problems that are blown way out of proportion and so the outcome is blown way out of proportion. I can't help but believe that this is seeping into the rest of our lives. I would be willing to submit that I know that it is.

Was there panic involved in trying to get our economy back on its feet? Was there some drama in how government (we as they are our representatives) fixed some of our economic problems?There was. One such outcome was the SAFE Act which instituted a federal licensing system and guidelines by which all mortgage licensees, schools, states, and other regulating bodies must abide. Yes, some states did need to regulate their licensees but many had to downgrade in order to be compliant with these new regulations. Others could were not prepared for such a change because of the substantial fees and costs. This goes without mentioning the fact that after this bill was compiled, passed, and assigned it was handed off to a non-governed third party that could address the issue as they wished. Not only were states obligated to pay an exorbitant amount of money to make changes and adjust to the SAFE Act, they had to give up their right and obligation to follow the demands of their citizens but had to submit to the demands of strangers who now wielded the shield and sword of federalism.

Time would tell that such a radical change was probably unnecessary, that it simply caused more panic and drama than it attempted to abolish. Many would even agree that the finger of blame was pointed in the wrong direction in this case. What can we learn from all of this? Any good EMT or fireman would tell you to relax. Breathe. Analyze the situation and look at the FACTS. Then make a decision. With that hopefully we can better combat the problems that will inevitably come.

Idaho SAFE Preparation Course TOMORROW

2009-10-27T12:29:00.006-06:00

With Praedo's live SAFE exam courses in full swing, we are happy to announce another Boise Idaho class tomorrow. If you are in the Boise area and you have a couple hours to come join us, please do. This class will not only prepare you for the exam but combined with your other Idaho continuing education will allow you to opt of the required 20 hours of education (offer extends at the end of the year). Tomorrow's event will be held at the Hilton Garden Inn located on 7699 West Spectrum Street in Boise beginning at 9am. This course will be the beginning of a host of others that will help licensees prepare for the federal changes that have swept our industry.

Mortgage Brokers: Extinction or Purification?

2009-10-16T12:22:00.005-06:00

It is simply human nature to assign blame when something goes wrong. I am not one who usually complains about human nature, I normally leave that to the philosophers and the anthropologists, but I feel as if this case is different. This case should make us all raise our eyebrows as to what is going on. When the tides of recession began to hit every shore in 2008, the blame assignments were being passed out. What surprised me and what should have surprised many more was who got the brunt of the blame.

What emerged was a lot of blame on the mortgage broker. Many more should pause and realize that banks created these loan programs. Banks did the underwriting, the due diligence, and the approving. Banks handled the investing and the hedging. Mortgage Brokers simply submitted the files and they take home the blame while banks get a bailout and a mere slap on the wrist.

What isn't surprising is the fact that this has led to a severe drop in the number of mortgage brokers in the industry. Market analysts are predicting that by the end of the 2009, the number of mortgage brokers will have dropped 72% since 2006. Many are calling it a purification, that only the 'creme of the crop' will be around by the beginning of the next year but others are worried that banks and a gullible federal government will not rest until there is an extinction of the mortgage broker as we know it. Only time will tell.

Utah Continuing Education Changes

2009-07-09T15:09:00.008-06:00

We have seen some sweeping changes that the SAFE (Secure And Fair Enforcement) Mortgage Licensing Act has brought. It has, as we have said before, remodeled the mortgage industry as we know it. One of the areas being remodeled in the mortgage industry is continuing education for license renewal. Mortgage licensees must have 14 hours of continuing education during the fiscal year of 2010, meaning mortgage licensees will have until December 31, 2010 to complete the required hours.

However, the mortgage industry isn't the only one who is undergoing some 'house cleaning' issues. The Utah Department of Real Estate is now requiring 18 hours of continuing education for real estate agents and brokers for every two-year period. Everyone who has a renewal date after January 1, 2010 will have to complete the 18 hours of ce.

If you didn't see this month's Praedo newsletter, please email us so we can put you on the list! Contact us at support@praedo.com today!!! Don't let ignorance get you in trouble!

SAFE Act Testing in Utah Postponed

2009-07-07T08:19:00.006-06:00

The Utah Division of Real Estate has collectively decided to postpone the new SAFE testing until September 1, 2009. This extra month gives 'on-the-fence' Utahans the opportunity to decide whether or not they should get their mortgage license. If you've been trying to decide whether or not you or someone else in your office should get licensed, now is the time to act.

While many states have postponed testing requirements until next year, The Utah Division of Real Estate has been ahead of the pack when complying with this new federal legislation. Many states have postponed SAFE testing until the middle of next year as they scramble to draft and pass laws that will allow for the type of changes that the SAFE act is bringing to the table.

Nonetheless the SAFE act has caused a lot of headache for the Utah Division of Real Estate. Not to mention all of the changes that the act is calling for, it also affects legislation that the Division has painstakingly fought for years and now much of it will fall by the wayside. On an administrative level, the Governor has been assigned as the Ambassador to China and the Director of the Division of Real Estate (an assignment appointed by the Governor) has also been assigned to a new position. These two changes bring a lot of headache to the Division, but in addition to all the changes that SAFE is bringing to the mortgage industry, it is no wonder why the testing has been postponed.

The End of Brokers?

2009-06-23T15:09:00.006-06:00

I had the opportunity to meet with a senior manager for one of the largest wholesalers a few days ago. He met with a group of brokers and updated us on the industry and his company. He also solicited feedback from the attending brokers. One of the consistent themes throughout the conversation was treatment of us mortgage brokers over the last several months. It seems many are ready to blame the financial crisis on us. Obviously, this approach frustrates me as most of us simply sold the programs which were offered to us. We didn’t commit fraud. We didn’t misrepresent. We conformed with the program guidelines and very effectively sold the aggressive programs developed by the lenders. Over the last several months, I’ve been worried about the future of the broker industry. Every time we turn around, someone is making it more difficult to do business as a mortgage broker.

We posed the question as to the future of the mortgage broker. Finally, we received some positive feedback. The large wholesalers are experiencing outstanding returns on the third party origination business. The performance of the loans is excellent. The two largest originators nationally are most likely the largest due to their broker business. The lenders are again realizing that, if done properly, broker business makes sense. As the executive put it, the brokers are no longer the poster child for the mortgage crisis. As warehouse capacity increases and the industry stabilizes, mortgage brokers should be able to continue effectively serving the borrowers who have come to rely on our expertise, experience, and relationships.

Utah County Parade of Homes

2009-06-02T10:34:00.000-06:00

Despite the popping of one of the largest housing bubbles the country has ever seen, there is one venue that is not being cancelled: The Utah County Parade of Homes. From the edge of Santaquin to the rolling hills of Alpine, 28 homes are 'decked to the halls' for all to come and see. You can download a map of the parade here. Open Daily 12:00pm - 9:00pm, closed Sundays and Mondays. Tickets are $10 each, kids 5 years and younger are admitted free. Praedo sponsoring a booth in Home #2, The Chatham located at 5937 W. Chatham Circle in gorgeous Highland. Come see us!

New Home Grant Total: Now at $14,000

2009-04-28T16:18:00.000-06:00

New home buyers in Utah may qualify for $6,000 in mortgage assistance with the Home Run Grant. If the home buyer is a first-time home buyer, the grant may also be combined with the new $8,000 federal tax credit for additional savings.

Approximately of 1,600 grants are available for home buyers who purchase a newly-constructed, never-occupied, primary, single-family residence in Utah. The grants will be given on a first-come, first-serve basis.

Individuals do not have to be a first time home buyer to receive the grant, but must meet the requirements to be eligible. Home buyers have income restrictions of $75,000 for a single person and $150,000 for a married couple.

In addition to the income restrictions, the property has to be occupied within 30 days of closing by the home buyer as their primary residence. If a mortgage loan is needed to purchase the property, the loan must have a fixed interest rate and amortize with a term of 30 years or less. Home buyers also need to have a Home Run Grant Commitment before the transaction closing.

Applications for a Home Run Grant need to be submitted through the home buyer’s mortgage lender. More information about the program and how many grants are still available can be found on the Web site for the Utah Housing Corporation.

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Praedo Institute has been offering mortgage and real estate education to industry professionals since 2003. Online courses are available to fulfill pre-licensing and continuing education requirements. Education courses were first offered in Utah, but Praedo Institute has now expanded to assist industry participants with education requirements for multiple states. Praedo Institute works closely with industry and state regulators to educate individuals of any changes or updates.

Home Valuation Code of Conduct Brings Changes to the Appraisal Process

2009-04-28T16:16:00.000-06:00

The Home Valuation Code of Conduct (HVCC) will change the way appraisals are ordered and how residential transactions that utilize financing are processed.

The HVCC was created as part of a settlement that requires Freddie Mac and Fannie Mae to change their policies and procedures for all loans purchased. These companies will not be able to purchase mortgages from sellers who are not in compliance with the Code after the pending implementation date of May 1, 2009.

The lawsuit was filed when home prices were being inflated and foreclosure rates were starting to rise. Freddie Mac states on their Web site that the HVCC will, “enhance the independence and accuracy of the appraisal process, and provide added protections for homebuyers, mortgage investors and the housing market.”

Mortgage brokers traditionally order the appraisal required on a mortgage transaction. The HVCC now requires the appraisal to be ordered by the lender or a third party authorized by the lender.

This will impact mortgage brokers, since according to the National Association of Mortgage Brokers, brokers currently account for over half of the mortgages originated in the United States. The HVCC will not allow brokers to select, recommend, or influence the selection of any appraiser. Brokers are also not allowed to have substantive communication with the appraiser or have any influence on valuation.

Another provision required under the HVCC requires the lender to provide a copy of the appraisal to the borrower. Currently, a lender is required to provide the borrower with a copy of the appraisal upon request. After the implementation date of the HVCC, borrowers need to be provided with a copy of the appraisal at no additional cost at least three days prior to the loan closing.

Lenders must also randomly select 10 percent of appraisal reports for a required quality control test. The appraisal reports include automated valuation models, broker’s price opinions, or any other valuation. Any unusual findings or negative information by the lender needs to be provided to Freddie Mac or Fannie Mae.

Praedo Institute has been offering mortgage and real estate education to industry professionals since 2003. Online courses are available to fulfill pre-licensing and continuing education requirements. Education courses were first offered in Utah, but Praedo Institute has now expanded to assist industry participants to comply with education requirements for multiple states. Praedo Institute works closely with industry and state regulators to educate individuals of any changes or updates.