Escrow Holdback Season Starts NOW
Posted On: August 31st, 2009 by James Posted In: Portland Real Estate
OK! A strange phenomenon is taking hold of the Portland metro area real estate closing statments: ESCROW HOLDBACKS! Oregon is a little different in the way we collect our property taxes- we only do it ONCE per year, due in November. For all closings in September, and October most title companies require a huge reserve account to be collected at close. Usually the amount is 115% of last years tax bill PLUS an additional 2 months for good measure. Even if you are “waiving impounds” and paying your own taxes separately, you will have to cough it up at close. And when I say most title companies, I really mean ALL title companies, so prepare yourselves for this!
My colleague and fellow blogger Evan Swanson, over in the Beaverton Branch of Mortgage Trust, has recently posted an exhaustive explanation and history of everything you’d ever want to know about Escrow Holdbacks. Instead of explaining it myself, I will defer to him on this one.
CLICK HERE to quench your thirst for more knowledge about Escrow Holdbacks.
What is Correspondent Lending?
Posted On: August 31st, 2009 by James Posted In: Mortgage Programs • Portland Real Estate
I’ll try to make this brief, because this is kind of a boring topic, but a very important one if you are in the real estate industry. There are a variety of ways that homebuyers access Mortgages, and its becoming more and more critical to the outcome of your real estate transaction to understand which “channel” you are accessing. The 3 predominant systems for mortgage delivery are 1. wholesale brokering, 2. correspondent lending, and 3. direct bank retail.
The wholesale mortgage broker will take a loan application, and collect supporting documentation. Then they will proceed to “shop” for the best possible rate and price structure with any number of wholesale funding sources. They send the file into this separate mortgage company for the remainder of the process. That other 3rd party wholesale company will make the risk decision, also they will make the final escrow instructions, and finally that 3rd party company will wire the funds to close.
Continue Reading – What is Correspondent Lending?
A New Strategy for Finding That Downpayment
Posted On: August 17th, 2009 by James Posted In: Financial Health
I had coffee with a financial planning associate of mine today named Mark Delphine with the “Futures” planning group. He brought a very interesting strategy idea to me regarding a very cost effective way to borrow from your qualified plan (IRA, 401K etc) in a ‘cash strapped’ home buying scenario. It is very exciting and quite clever. It results in borrowing $50,000.00 or 50% of your total funds (whichever is less) at Prime rate, with 15 years to pay back (not to mention the interest rate is INTEREST PAID TO YOURSELF). There is only a $40.00 set up fee and a $15 annual fee for preparing everything. This is for those of you who have retirement funds and see the opportunity of buying in this amazing purchase environment. Do not delay in contacting me to begin this process, it can take up to 2-4 weeks to get the funds organized. And the clock is ticking on that first time buyer credit!
Closing Times: The Lifecycle of a Mortgage
Posted On: August 17th, 2009 by James Posted In: Government Actions • Mortgage Programs • Portland Real Estate
Most folks in the biz are probably aware of this by now, but the Mortgage Disclosure Improvement Act is officially upon us. What this means in plain terms is that the loan process will take longer to accomplish now. There are certain events that now force 3 day waiting periods during the process. We cannot order an appraisal until all disclosures have been signed by the borrower now. This is making a face to face appointment much more desirable, and “out of state” lending will now cause even more problems than normal. On a purchase, I would not expect any lender to close much sooner than 40 days, and I think 60 day closings will begin to be more common.
Why the Failure of Taylor Bean and Whitaker Matters
Posted On: August 9th, 2009 by James Posted In: Mortgage Programs • Mortgage Rates
This past week we saw the shut down of Florida based mortgage lender Taylor Bean & Whitaker. They are (were) a HUGE wholesale mortgage company that is a very common funding source for mortgage brokers. I believe they were the third largest wholesale FHA loan source in America. I am very thankful that I did not have any loans in the TBW pipeline prior to their closure, because if I had, those files would have to go to a new bank and start the process over, under newer slower rules. Not to mention that pricing has gotten worse recently. My heart goes out to all borrowers and brokers in this position, its a tough one.
T.B.&W. were shut down by the FHA. They apparently failed to disclose that their audit results were poor. I think some in the industry were particularly struck by how forcefully the FHA acted in this situation. I’m sure many in the company thought that they would be given time to rectify the problems they had, but they got an immediate cease and desist. This should be seen as yet another blow to the wholesale/broker lending model.
Continue Reading – Why the Failure of Taylor Bean and Whitaker Matters
