jakob
Posts:473
 |
| 07/24/2008 8:36 AM |
 Alert
|
Did you guys see this on Jim Klinge's blog? Sounds unusually smart from the GSEs. Fannie and Freddie are FINALLY doing something about the buy and bailers. Now you can't get a GSE or FHA loan if you don't have at least 30% equity in your existing house.
"Fannie and Freddie underwriting guidelines will require that borrowers applying for a mortgage to purchase a property, and who already own another, must verify that they have at least 30% equity in the old property - or they can't get a loan."
http://www.bubbleinfo.com/journal/2008/7/24/new-buy-and-bail-rule.html#comments |
|
|
|
|
|
|
rwsinmissionhills
Posts:311
|
| 07/24/2008 8:41 AM |
Alert
|
Thanks for the info, jakob:
I just posted the following on another thread, but am repeating it here since it's related topic:
A number of people have shown an interest in compiling a list of property transactions that appear suspicious.
I have communicated with a few agencies, and they do in fact encourage people to send info on activities that are deemed suspicious.
If anyone would like to participate in submitting such information, I have created an account to accept your inputs. I will then put the info submitted into a spreadsheet for forwarding to the appropriate offices.
The email address is: property.list.rws@gmail.com
Here is my request:
Please use this contact information only for the purposes stated.
Please send fact based information. If the info you send is part of public record, please state that if you can.
If you submit any info that is hearsay (something you have not seen, heard, touched, smelled, tasted, for yourself, please state that)
If you are sending an opinion, please disclose that it is opinion.
Please do not submit info you know to be false or with the intent to mislead or harass someone.
Here is the info that I am compiling:
property addresses (apn also if you have it)
name of individuals involved (ownership or other names if relevant and their relationship to the transaction )
loan numbers, loan amounts, financial institutions is available/relevant
amount of last sale/refinance/loan amount
date of last sale, transfer, loan activity
date of any pertinent legal filing (NOD etc)
any info on defaulted property taxes
I might put in a column for comps ... depends on how much work this might end up being and how useful the info could be.
|
|
|
|
|
jspoto
Posts:217
|
| 07/24/2008 8:49 AM |
Alert
|
| jackob - your interpretation of the new fannie freddie u/w guideline is incorrect. The new guideline is for people who already own an existing home and want to claim it will become a rental (and use rental income to qualify) after they close on a new home. If you are going to use rental income on your existing home a a basis for qualifying on the purchase of a new home , then you must have 30% equity in your existing home as well as a signed lease and cashed deposit check. In the past, all you had to do was provide a lease agreement and then you could use the rental income to qualify for your new purchase. If you do not need to use rental income to qualify for the new purchase than you buy whatever you like regardless of existing equity. rwsinmissionhills - are you serious - you are going to start reporting suspicious activity ? thanks for helping to save the market. we need more civilian hero's like yourself - we probably couldnt get thru this mess without you. |
|
|
|
|
jakob
Posts:473
|
| 07/24/2008 8:57 AM |
Alert
|
| jspoto: Really, so if I have an existing house that's underwater and I don't claim it as rental income but I say I will sell it, then I can get the loan? That doesn't sound smart... |
|
|
|
|
Brian
Posts:2210
|
| 07/24/2008 9:57 AM |
Alert
|
jakob, loans applicants lie. that's well know fact. Problem is that banks are not verifying.
-----
I wonder if proceeds of real estate scams have been used to fund terrorism. I found a few suspicious transactions by people with Middle Eastern/Iranian sounding names. I bet they were just profiteers like everyone else.
|
|
|
|
|
jspoto
Posts:217
|
| 07/24/2008 10:04 AM |
Alert
|
| If the applicant is claiming that he will sell the house after they close on a new property, than they would have to qualify for both mortgages (existing and new). If they qualify for both mortgages based on verifiable income, than they will not have a problem. However, how many people can qualify for 2 mortgages, let alone 1. The new guideline is making it harder for people to lie, not the opposite. |
|
|
|
|
Brian
Posts:2210
|
| 07/24/2008 10:33 AM |
Alert
|
Jakob, you could simultaneously sell your old house and buy a new house. That's the move up/down market. In that case you only need to qualify for only one loan. That's how I sold my first house and bought my 2nd house back in the 80s when the standards were 20% down.
If needed, an enterprising mind could create a "fake" escrow to deceive the lender. At the last minute, the old house "fall-out" of escrow. That happens all the time.
|
|
|
|
|
jspoto
Posts:217
|
| 07/24/2008 10:47 AM |
Alert
|
| brian -you could not get away with that today. the lender on the new mortgage would require a final HUD-1 to show that the existing home closed before they will close escrow on your new purchase. If your home fell out of escrow you would not be allowed to close on the new purchase. |
|
|
|
|
Brian
Posts:2210
|
| 07/24/2008 10:59 AM |
Alert
|
jspoto, thanks for the update. So that means that move up/down buyers will have to rent back the house they just sold, or move out to another rental before they are allowed to close on the new purchase. Interesting.
Does the new lender actually check County records to make sure the old house was sold before they fund the new loan? Or will they just take the HUD-1 statement at face value? The enterprising mind could create a fake HUD-1. Just thinking of the possibilities here. People created fake jobs and incomes for themselves. So this would not be beyond the pale.
|
|
|
|
|
jspoto
Posts:217
|
| 07/24/2008 11:14 AM |
Alert
|
| Current buyers who are moving into a new home and have an existing home can do 3 things before they can close on their new house(according to the new fannie guidelines) 1) sell their existing house and get proof it closed before the closing on the new property. A final HUD 1 signed by an escrow officer (who is licensed and bonded) would provide the proof. 2) rent their existing house out - must have 30% equity, a signed lease and a cashed deposit check. This is where the big change is. Lets say that the borrower could not qualify for his new housing payment because they still have an existing mortgage. They did not make enough income to cover both payments. The borrower could submit a signed lease (usually bullshit) saying they would receive 3500m in rental income for their existing home. that 3500m would then be added to their existing income and offset the existing mortgage payment. now, the borrowers can qualify for the new loan. 3) qualify for both housing payments with their verifiable income. like I said before, how many people can qualify for 2 mortgages, let alone 1. |
|
|
|
|
jakob
Posts:473
|
| 07/24/2008 11:25 AM |
Alert
|
| Thanks for clarifying, gentlemen. We're lucky to have a mortgage guy in our midst. :) |
|
|
|
|
jakob
Posts:473
|
| 07/24/2008 11:27 AM |
Alert
|
| Sounds like move-up buying is dead as a doornail right now. Not a good omen for the high end. |
|
|
|
|
jspoto
Posts:217
|
| 07/24/2008 11:37 AM |
Alert
|
| jakob -you are correct - the box is getting smaller for people who want a new mortgage. |
|
|
|
|
Brian
Posts:2210
|
| 07/24/2008 12:02 PM |
Alert
|
This is an interesting topic.
More wealthy borrowers who are upside down, could actually more easily exercise their "options" to walk (because they can easily qualify for a new mortgage that would not be upside down before walking, or rent for a while because they have cash).
On the other hand owners of more modest means are locked into their upside down properties (because their good credit rating is the only way they can purchase/rent anything).
|
|
|
|
|
tpc
Posts:498
|
| 07/24/2008 2:58 PM |
Alert
|
| Thank G-- I got my reverse mortgage in 2005 at the peak of the market. I never plan on leaving the old homestead that I purchased 10 years ago. Careful planning and perfect timing can really enhance ones lifestyle. This has been the perfect annuity. Prop 13 has also been great. |
|
|
|
|
jakob
Posts:473
|
| 07/24/2008 3:57 PM |
Alert
|
I agree with you Brian. Rich people don't need credit. Plenty of rich people have terrible credit. Look at Jose Canseco walking from his $2.5M Encino house.
"It didn't make financial sense for me to keep paying"
The high end has been relatively safe, but I'm starting to see cracks in places like LJ, RSF, Coronado. This is going to get interesting. |
|
|
|
|
tpc
Posts:498
|
| 07/24/2008 3:57 PM |
Alert
|
| Sorry-I just got back from the spa. Got my manicure, pedicure, massage and facial. Did I miss anything?? |
|
|
|
|
jakob
Posts:473
|
| 07/24/2008 4:08 PM |
Alert
|
| lol. all paid for by 'shorting' your own house. you sir are a genius. |
|
|
|
|
tpc
Posts:498
|
| 07/24/2008 4:58 PM |
Alert
|
| Jakob-my heirs are encouraging me to put a full sized freezer in the garage in case the unthinkable happens. Sounds like a good idea. I love to get value for my money so I would like the income stream to remain intact for at least 40 years (til age 108). And the kids could really use the money. |
|
|
|
|
Brian
Posts:2210
|
| 07/24/2008 9:16 PM |
Alert
|
Posted By tpc on 07/24/2008 4:58 PM
Jakob-my heirs are encouraging me to put a full sized freezer in the garage in case the unthinkable happens.
haha, that's a good one. :)
tpc, great timing on your part. Congratulations!!
Do you mind telling us a little about your reverse mortgage? So the bank keeps on paying you in perpetuity until you pass away. Are there any caveat?
|
|
|
|
|