BradyLoan.com

Five Things About Brian Brady (You Probably Didn't Know)

Happy Holidays to you and your family!  I thought I'd share a little information, about me, with you:

1- I used to play the string bass in elementary and junior high school.  That's right, the stand-up bass fiddle.  I played in the Joyce Kilmer Elementary School Orchestra & the Brainerd Junior High School Orchestra and Jazz Band, both of which are in Cherry Hill, NJ.  I selected the string bass because I wanted to play an instrument but was unsure about whether or not I would commit to it ( I was in 4th grade and loved playing baseball). 

Instruments had to be rented or purchased and, as the oldest child, I as pretty aware of the costs my parents might incur.  The string bass was a BIG instrument so nobody chose to play it.  As such, there was no rental cost as an incentive to get someone to play it.  I picked the string bass because I didn't want to cost my parents money if I chose to quit.  As it turned out, I lugged that thing, back and forth to schol, for five years (we actually walked to school in the 70's).  Oddly enough, my wife Debra played the string bass in elementary school, too.

2- I used to live arund the corner from Reggie "The Rifle" Leach, the Philadephia Flyers great right-winger.  We had Bobby Clarke, Dave Schultz, and Rick MacLeish close by so it wasn't rare to see all of them, drinking beer in the off-season, on the Rifle's front lawn, while we kids played street hockey in front of Reggie's house. 

Naturally, when the Flyers won the Stanley Cup, for the second time, in 1975, ourneighborhood went bonkers.  The kids all camped out, in front of Reggie's house, waiting to hug him when he returned.  I'm pretty sure he stayed up late that night so we all went home wanting.  Reggie had a party, about two weeks later, and had the Stanley Cup in his living room, for all the kids to see.  I drank ginger ale from that cup and it was the greatest day of my ten-year old life.  Reggie's connected with me on Facebook and I thank him for that moment, each and every year.

3- I was on a dance show when I was in high school.  We used to spend our summers in Somers Point, NJ.  Every Sunday afternoon, at 4 o'clock, the local UHF channel had a dance show for teenagers, on the Ocean City Music Pier.  I used to go to the pier, after a day on the beach, and dance with girls in front of the camera.  I fely pretty safe that none of my high school friends would see me but, as luck would have it, most of them were at the Jersey Shore, too.  That local UHF channel was the only thing you could watch on Sunday afternoons (nobody had cable in vacation homes).  I was ridiculed when school started that Fall but the heck with them; I was a local celebrity!

4- I was a student at Villanova

I was a student atVillanova University when the Wildcats defeated the Georgetown Hoyas, to win the NCAA Basketball Championship.  In what was called one of the greatest final games ever, Villanova won 66-64.  This was the last year before the NCAA implemented the shot clock and Villanova ran a four corners offense, styled on Dean Smith's North Carolina team.  The Wildcate had to lay a perfect game to defeat the returning champs, the Hoyas.  That they did, too.  Villanova shot 90% from the field in the second half.

I was interviewed by the Philadelphia Daily News, the day after, because I attended classes.  The only reason I went to class the next day was because I had a test scheduled.  Still, my friends thought I "stretched the truth" because my parents would be reading the paper.  In fact, I'm pretty sure my father thought I stretched the truth as well but, after a night of partying, I showed up for the test...weary...bleary-eyed, and unprepared.  The test was cancelled and I spent the rest of the afternoon sleeping...with a big smile on my face.

5-  I know who the real Philly Phanatic is.  I mean, I know the guy who is in the costume.  It used to be the creator, David Raymond but, some 20 years ago, a friend of mine from high school took over.  He still plays the Phanatic, at our age, with the vim and vigor of a man some 20 years younger.  This isn't his first rodeo either.  He played our high-school mascot and told me, in our senior year, that he EXPECTED to be the Phanatic one day.  You gotta have goals, right?

That big green costume can wreak havoc on my friend, on a hot, humid summer day in Philly.  Not surprisingly, my friend is in pretty good shape.  If you've ever seen the Philly Phanatic, you'd know that you have to be in pretty good shape to carry on with the antics he performs.  He's a great guy and his name is...

...I'll never tell.  A guy has to have some mystery, doesn't he?  Check with me in a few years.  If my friend retires, I'll tell you then but for now, I'll just say he considers himself to be the Phanatic's best friend.

Happy Holidays to you and your family.  Thanks for all the business, referrrals, and support this year.  I truly appreciate it and hope you've enjoyed learning a little bit more about me today.

 

FHA Permits Flipping Properties Through 2012

From Mortgage News Daily:

With certain exceptions, FHA regulations prohibit insuring a mortgage on a home owned by the seller for less than 90 days. In 2010, FHA temporarily waived this regulation through January 31, 2011, and later extended that waiver through the remainder of 2011. The new extension will permit buyers to continue to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. It will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.

The extension is effective through December 31, 2012, unless otherwise extended or withdrawn by FHA. All other terms of the existing Waiver will remain the same. The Waiver contains strict conditions and guidelines to prevent the predatory practice of property flipping, in which properties are quickly resold at inflated prices to unsuspecting borrowers. The Waiver continues to be limited to sales meeting the following conditions:

• All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
• In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the Waiver will only apply if the lender meets specific conditions and documents the justification for the increase in value.
• The Waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

 

Five Things You MUST Bring To The Loan Closing.

How thrilled you must be to "close" on your new home.  If you live in an attorney state, these tips will still apply but, if you're in California, you're not "closing" on the home--you are signing the loan documents and preparing to close.  California is an escrow state which means that an escrow company handles the closing.  Your Residential Purchase Agreement will probably state that ownership of the home transfers at recordation (which means when the grant deed is recorded)

Sorry to bum you out.  You're actually pretty close to "closing" so be happy.  The deed record the day after your loan funds.  The mortgage lender funds your loan 1-3 days after you sign the loan documents.  You're probably 2-5 days from receiving the keys.  Still, this is the most important day of the transaction because you'll be siging the mountain of paperwork, required to get a loan.

Here's what you should bring to the loan signing:

1- Directions to the escrow company or my office.  In some cases, a mobile notary will bring the loan documents to your house but I like home buyers to sign in either the the escrow office or our office.  That way, if there are any problems, we can fix them on the spot.  I attend at least 90% of the loan signings, in San Diego County, and at least half of the loan signings in Orange or Los Angeles counties.  I hate to leave a first-time home buyer unattended at the loan signing.  If I'm not attending, make sure you punch my phone number, (858)-777-9751, into your cell phone.

2- A driver's license and another form of identification.  The notary, conducting your signing, will require positive proof that you are who you say you are.  Unfortunately, I can't "vouch" for you.

3- A copy of the signed good-faith estimate, we issued you at application, and any and all estimates we issued thereafter.  We always try to narrow down the numbers, so that there are no surprises at the signing table.

4- A copy of the estimated settlement statement,  Debra will usually secure that for you as little as 3 hours or as early as 24 hours from your scheduled signing.  If you can compare that against the most recently issued good-faith-estimate, ahead of time, you'll have precise questions for me,  In a perfect world, you'll understand every good faithe estimate you were issued and the settlement statement will match up perfectly.

5- Bring the items requested, from Debra or the escrow agent, along.  Oftentimes, we were able to get a condition waived, because it was clerical, so that you could sign loan dicuments in a timely manner.  If we ask for something, we need it to fund the loan.

Plan on the loan signing time to be 45-75 minutes,  The most important items to check are (a) the NOTE, to insure the interest rate and loan term are exactly what we agree upon and (b) the settlement statement.  Most of the other forms are disclosure items and forms to transfer title.  They're all important but the aforementioned two are most important.

Make sure to sign your name exactly as it appears on the loan documents.  The notary will tell you this (most likely) but, if she doesn't, tell her I said this will be a requirement.  The other thing to remember is that you need to sign your name consistently, throughout the signing.  If the loan documents say "Steve Smith", thjat's how you sign.  If they say "J. Stephen Smith, Jr" you sign every document that way.

Relax!  We're in the home stretch.  I just want you to cross the finish line, looking as strong and confident as you did, when we started the race.  Comgratulations!

Can I Get A Mortgage If I Was Formerly Self-Employed But A Wage Earning Borrower Today?

I received this question today:  "Brian, I was self-employed, for 7 years as a IT consultant.  Basically, I worked for 4 different companies, maintaining their networks, and was paid as a 1099 contractor.  Last winter, after losing two of those customers last year, I accepted a position with my biggest customer (now my employer).  I am paid a steady salary and want to buy a home but all lenders tell me I need a W-2 form, from this employer.  Can you help me get a mortgage?"

Sure I can but, as always, there are some conditions:

You need two years employment in the same industry or "line of work".  If you were a self-employed shepherd and suddenly decided to be an IT consultant, I couldn't get you a loan (unless you were going to schooll, to be an IT consultant, while herdinh sheep).  In your case, you were an IT consultant then, and are an IT consultant now, so we're in good shape.

You need to have six months employment with this employer. As long as we can prove that (which we can, from your YTD income, on your most recent paystub, and a letter of verification from the employer) we can fund that loan.  We still have to look at your tax returns, from the past two years, even if the income is poor or was declining.

The underwriter may ask you to write a letter of explanation.  Many lenders will tell you to write some sort of sob story which, in my opinion, is silly.  We'll just lay out the facts and present the case for approval.  Most underwriters "get" your situation because many of them were "contract underwriters", and self-employed, before they were hired full-time by the bank.

N.B--We'll probably need to show that you have closed your business.  If you were incorporated, we;ll need to see some sort of termination document.  If you were a sole proprietor, we might need to show a closed bank account.  If you're still operating the business, while working full-time, the undewriter may want to see a profit-and-loss statement, for that part-time business.

Mortgage Rate Quote Expiration Dates

Looking at mortgage rates on the internet?  Maybe your shopping in the Zillow Mortgage Marketplace, on Lending Tree, or even in the newspaper.  One thing you should understand is, unlike milk, the mortgage rate quote "purchase on or before" dates do not extend for 3-4 days.  Mortgage rates change as often as 2-5 times each day.  Why is that?

READ: You'll NEVER get the lowest rate on your mortgage.

Mortgage rates are a dynamic market, based on mortgage -backed securities.  The volatility in mortgage bond markets is wildly erratic, especially in financial crises.  With European countries facing bankruptcy, perpetual war in the Middle East, and a debt-riddled US economy, things change...a lot...and more than once or twice a day.

We used to be able to "eat" those price movements, if they weren't too erratic, after we quoted your rate and before we locked it in for you.   A new federal rule, Regulation Z, prohibits us from adjusting our compensation, to your benefit, when the market changes.  If the market changes for the worse, you get stuck with the higher costs.  Conversely, yoou get rewarded with the lower costs if the market improves.  Essentially, you bear the risk and I am protected.  So much for the "consumer protection"of regulations.  Don't get me started down that path or I'll digress into the politics of mortgages.

What can you do to protect yourself? 

Well, if you have three quotes, and you are pretty sure that you've narrowed it down to 2-3 lenders, ask each lender to e-mail you a good-faith estimate, all at the same rate, at a specified time.  Then open your email, find the best one, call the winning bid, and lock-in the rate.

The key thing to remember is that the good faith estimate you receive is probably only valid for 2-8 hours.  If you're on-the-ball, act quickly, and are dealing with an originator who follows this market like a hawk, you'lll get a great deal.

Mortgages For Condominium Complexes With Commercial Businesses (Mixed-Use)

Some mortgage lenders eschew condominium complexes which have a portion of the complex leased to commercial businesses.  For example, in Pacific Beach (San Diego), there is a property with 8 units on top of a 2200 square foot, retail business.  Why won't lenders make a loan there?

Both FHA & conventional financing permit a certain amount of the property, to lease commercial space.  Fannie Mae allows for 20% of the property to be leased to commercial ventures as does Freddie Mac.  FHA allows for up to 25% of the square footage to be leased commercially.

If the commercial space is more than the permitted percentage of the project, or it's being advertised as a condo-tel, or the public liability insurance doesn't cover the commercial spaces that are owned by the HOA, the loan can be funded.

In our Pacific Beach example, each of the eight units is approximately 975 square feet, for a total of 7800 square feet.  The retail space is 2200 square feet.  The commercial lease is 22% of the toal square footage of the complex.  It is not eligibile for Fannie mae or Freddie Mac financing but is eligible for FHA financing.