Jeremy's Blog

Michigan mortgage licensing went into effect April 1st, 2009. Is the loan officer your working with registered? Find Out It's amazing that there are only 399 names in the database! Last year the state expected 10,000 LO's to sign up. So what’s the deal? One reason the list is so small is because of the log jam. Many companies and loan officers waited until the very last minute get it done. Another reason is that the banks lobbied and received an exception. That's right loan officers at banks don’t have to get a licenses. Even though some 60% of people FAILED this test the first time! Finally some don’t take it seriously. I personally know a loan officer that decided he didn’t want to take the test. His boss simply said "don’t worry we will put your loans in my name".

I will say that I am glad to see at least some type of regulation on our industry in Michigan. It's about time we license the people helping consumers make the biggest financial decision of their lives.

Great News . . . The people at the USDA have increased and simplified the income limits. For our area 1 - 4 family the limits are now $75,000 a year. For a detailed list click here.

So phase one of the "Obama Refi" plan rolled out yesterday.  Will it really help millions of home owners????

I think NOT.

Here's why:

1. When you purchased your home you would have had to put 20% or more down on the home.  Otherwise you do not qualify.

2.  If you did a purchase money second to get to 80% you do not qualify.

3. If you are upside down in your home by more than 105% you do not qualify (for example you owe 106k, and the home is worth 100k).

4.  Rate hits apply, meaning there are major fee's for high loan to values (for example someone with a 639 credit score at a 85% LTV will pay a 2.75% fee)

5. The loan must be service by Fannie Mae or Freddie Mac.  If the loan is serviced by Freddie then only 2,500 can be rolled in to cover closing costs, prepaids, & escrows.  That's no where near enough.

6. Borrowers must be current on the mortgage.

7. Borrowers must have a 580+ credit score

With those 7 restrictions alone the number of people that will qualify for this program is drastically reduced.  The administration has indicated that this will help millions.  The whole thing reminds me of the "Hope for homeowners" program that rolled out last year.  Nobody qualified for it, it was a complete waist, but yet the administration scored some points simply because of the media buzz.  You would think that our government would enlist the advice of a couple seasoned loan officers.  People that work out in the field could structure a meaningful program much better.

Oh well, I guess something is better than nothing.

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