Tuesday, December 14, 2010

New Credit Rule

There is a new underwriting regulation for Fannie Mae (non-government) loans that is important to know.

If a borrower pays off a revolving debt (like a credit card) to qualify for a loan, the borrower must close that account before closing or at closing. If they don't close the account, the debt must be counted against them when calculating the debt-to-income ratio, even if the balance is zero.

If the account is paid off but not closed, the balance that showed on the first credit report that was pulled by the lender must be used. Pulling a new credit report to show the balance as zero is not allowed.

This is one of those underwriting guidelines that most lenders will not know about because most lenders do not read the underwriting guideline updates every day. If your lender doesn't read the updates and your deal falls apart, dump the bum and start using a good lender who reads.

Want to make sure your loans close? Call the Mortgage Experts at 303-345-3683.

Thursday, December 9, 2010

New Licensing Regulations

On January 1, 2011 - just a few weeks from now - all mortgage brokers in Colorado must be licensed by the State and registered with the Nationwide Mortgage Licensing System (NMLS). At the moment, thousands of Colorado mortgage brokers have chosen to either ignore the new regulations, or have failed to complete the paperwork correctly or pay the required fees.

On January 1, any mortgage broker who is not licensed by Colorado or registered with NMLS will not be allowed to originate loans in Colorado. However, no one will know that a broker is not licensed and registered until the loans they have sold go to underwriting. That means many deals may fall apart.

Here's how to protect yourself and your clients:
  • If you are the selling agent, ask the mortgage broker who is working with your buyers if they are licensed and registered. If they are, they will have a Colorado Mortgage Loan Originator License number and an NMLS registration number.
  • If you are the listing agent, you should also ask the mortgage broker. Don't assume that the selling agent has done it for you. If they haven't, and the mortgage broker is not licensed and registered, your deal will fall apart.

Monday, December 6, 2010

Mortgage Booklet Gets Business for Realtors

When we get a referral from a real estate agent, one of our main goals is to do everything we possibly can to make sure the home buyer refers the agent to other home buyers. The easiest way to do that is by demonstrating to the client that their real estate agent has referred them to the most knowledgable lender in the Metro Denver area.

We have an 11-page booklet entitled "Mortgage Essentials" that is regarded by everyone who reads it as being the most comprehensive handout on mortgages they have ever seen.

Here is the Table of Contents:

How Do I Qualify for a Loan?
The Down Payment
Down Payment Assistance Programs
Mortgage Insurance
Closing Costs
Locking the Interest Rate
Getting Pre-Approved
The Loan Application
Loan Disclosures
How to Tell if You Have a Good Mortgage Broker
Should You Use a Real Estate Agent?

"Mortgage Essentials" closes deals for us, and it helps to build the business of the real estate agents who refer their clients to us. If you would like to see a copy, give us a call and we'll be happy to email it to you.

Want to make sure you loans close? Call the Mortgage Experts at 303-345-3683.

Friday, December 3, 2010

FHA and Conventional Loan Limits for 2011

The loan limits for Fannie Mae, Freddie Mac, and FHA have been announced for 2011 for the Denver Metro area. Here they are:

The Fannie Mae and Freddie Mac limit is $417,000 for the Denver Metro counties, and $460,000 for Boulder County. Anything over those amounts is considered a jumbo loan. Fannie Mae and Freddie Mac loans are conventional loans, which means they are non-government (FHA or VA) loans.

FHA loan limits also vary depending on the county in which the property is located. For the Denver Metro counties, the limit is $406,250. For Boulder County, the limit is $460,000.

Need to find the limits for a property in a different location? Here's the link to get to the web site that will give you all the loan limits in the country:


Here's how to use the web site:

- From the SORTED BY menu, select County.
- Select the state.
- From the LIMIT TYPE menu, select FHA Forward for FHA loans, or Fannie/Freddie for conventional loans.
- In the LIMIT YEAR menu, make sure the correct year is selected. CY2010 means calendar year 2010 and CY 2011 means calendar year 2011.
- Click on SEND and you will get the loan limits.

Have a question about how to find the loan limits? Call us at 303-345-3683.

Want to make sure you loan closes? Call the Mortgage Experts at 303-345-3683.