At this point in my carreer I’ve helped somewhere in the 1000’s of first time home buyers around Atlanta to finance their home.  Most of those with FHA or Rural Housing loans – and some VA loans for those who have served our Country.

And, I enjoy it.  I enjoy the teaching aspect of sitting down and explaining the types of loans available, explaining what fees are involved, both recurring and non-recurring, and what the process will be from the moment of pre-approval to closing and beyond.

And, I enjoy the smiles on their faces when, at the closing table, when everything has been signed that needs a signature, the sellers slide the keys to their new house over the table.  You can almost see fireworks light up around them.

And, I am always amazed that about 5% of first time home buyers have the attitude that they simply cannot be bothered with the pre-approval meeting.  You see, buying a home is the largest indebtedness that most of us will ever take on in our lives.  It is a big commitment, and it can be quite advantageous to spend 45 minutes to really learn the in’s and out’s of obtaining and managing a mortgage.

Here are a few items I like to review:

• Ways a mortgage can aid or inhibit wealth creation
• Managing the debt, so it doesn’t consume you
• Buiding home equity and managing that
• pre-approval vs. pre-qualification
• Guarding your investment with the right insurance
• And, right now, how to qualify for an receive your $8000 tax credit

Time is flying by quickly to cash in on your $8000 tax credit for first time home buyers. As of this writing there are only 97 days left until the tax credit expires.  Because, to qualify for the $8000 tax credit, you need to close on the purchase of your home by November 30, 2009.

“Cash for Clunkers” is over.  Enter, Cash for Renters, the $8000 tax credit for first time home buyers.  But just like the narrow window of opportunity to turn in your clunker for cash, there is an equally narrow windo to claim your $8000 tax credit.  Realistically, if you are buying your first home around metro Atlanta, then you need to have an accepted contract by the end of October in order to close by the end of November.

And, think of this: if you buy a $200,000 home and finance it with an FHA mortgage, then your down payment is $7000.  Get the tax credit back, and you replace your down payment and have $1000 left to buy that new, big, cozy leather chair…or, just save the money in the bank for a rainy day.

And when we need to act quickly, the best way to avoid costly mistakes is with a proper education. So, mark your calendar for the one first time home buyer training that we have left:

Wednesday, September 2 @ 7:00pm
The 1818 Club 6500 Sugarloaf Pky, Duluth, GA 30097 – in the Gwinnett Chamber of Commerce Building

To buy your first home – quite possibly for less than you pay in rent – and get up to $8,000 in free money from the federal government for doing so, then sign up here to reserve your seat.

And, be ready to brag for years that YOU bought at the perfect time. Mortgage rates are at multi-decade lows, home prices have fallen, and the government is giving you $8000 to buy now.

I can only imagine the stories you will be telling your friends, gathered around you at the next party!

I do like that bathroom, though.

This Million Dollar Mortgage Challenge is not only taking place in Atlanta.  It is being done by teams of innovative mortgage professionals and agents all around the country – each team working to help 125 first time home buyers into homes, helping each one receive their $8,000 federal tax credit, totally $1MM in tax revenue back into the pockets of those buyers, back to the community.

Well, we got some press, today.  Holden Lewis wrote an aritcle about it, interviewing Jim Sahnger, one of the masterminds behind this MDC.  It is great to see a united push for this effort in multiple cities across the country, not only here in Atlanta.

And, here, it is going well.  In fact, we have a seminar for first time home buyers tonight:

Thursday, August 20  @ 7:00pm
Sheraton, 2844 Cobb Parkway SE, Atlanta, GA 30339 – Across from Cobb Galleria

If you live nearby, come on out.  We’d love to have you.

Did you know the economic impact of selling a home?

Mark Zandi of Moody’s Economy.com, one of the most respected economists in the country, puts this figure at $56,000.

That’s what your commissions, the fees to home inspectors and appraisers, and all the trips to Home Depot, hiring the painters and the lawn service, and Rooms To Go all add up to for the community.  So I got to thinking… What would that do to stimulate the Atlanta economy, if 125 Atlantans bought their first home?

We are in the middle of our $1,000,000 Challenge: 125 first time home buyers, each getting the $8,000 tax credit for buying by November 30.

Using Mark Zandi’s math, that’s really a $7,000,000 Challenge!  Cool.

We, as you know, are a direct lender.  We underwrite FHA and most other loans right in our office, and fund the new loans.  But, we do not “service” loans, or keep the loan and collect the monthly payments from each borrower.  We sell our loans to servicers.

Why is this important?  Because we have sold a lot of loans to the mortgage servicer, Taylor, Bean & Whitaker; especially our FHA loans.  TBW was the 3rd largest FHA mortgage servicer in the nation.  And, as you may have heard in the news, TBW closed their doors abruptly last Wednesday.  And, a lot of clients are wondering where they should be sending their monthly mortgage payment now.

HUD just came out with a fairly informative information page for loans that were serviced by TBW.  You can find it HERE.  The entire FHA portfolio has been transferred to Bank of America.

And, if I helped you in orginating your home loan, then feel free to call me and I will do what I can to help you sort out any questions that you have.

An FHA loan for a buyer around Atlanta, especially a first time home buyer, is one of the very best loans right now.  That’s because an FHA loan is one of the easiest to qualify for, covers all properties, and is not dependant on outside, third-party factors.

1. FHA loans for Atlanta area buyers are easy to qualify for:  With a minimum 620 credit score – at present – and no collections or significant late pays in the past year, the credit will be approved.  And, unlike conventional loans, there are no discount points for lower credit scores that are charged.  And, contrary to popular belief, the property qualifies pretty much the same as with a conventional appraisal.  Just enough verifiable income for the borrower needs to be there.
2. An FHA loan in metro Atlanta covers all properties:  Okay, at least all residential properties that are being purchased to be a Primary residence.  Properties in a “declining market” cannot be financed to the maximum Loan to Value (LTV).  FHA does not have the restriction.  And, Rural Housing loans are excellent, and offer 100% financing, but are only available to, well, rural homes.
3. Atlanta FHA loans are not dependant on outside, third-party restrictions: For example, if a borrower getting a conventional loan, as opposed to an FHA loan, puts less than 20% down payment, then they will need Private Mortgage Insurance (PMI).  The MI companies currently count metro Atlanta as a “declining market”, so even though conventional loans will lend up to 95% of the purchase price of the home, MI companies will only insure the loans up to 90% LTV.  So, that’s all we can lend.  Similarly, I can get an approval for a prospective home-owner with a 670 score – but MI companies will not issue PMI for any borrower with that low a credit score.

Dejavù.  It feels like the end of 2007, maybe the first quarter of 2008.

We are a direct lender, meaning that we underwrite, approve and fund mortgage loans right here, in this office where I am sitting right now.  That is a very comfortable place to be in this uncertain lending environment.  I mean, when a loan comes in and it makes sense, we approve it, and that borrower gets into their home.  Nice.

That said, we do not service loans.  Meaning, we close the loan, usually with a commitment from a loan servicing company to pick that loan up and mail the monthly statements and collect the monthly payments.  Why does that matter?  Well, yesterday the news hit that Taylor, Bean & Whitaker can no longer buy or service FHA loans.

Bummer.  And based on having seen this scenario play out over and again over the past 3 years, I would say that TBW will likely be closing their doors for good within hours, or days.  And this affects us because it was one outlet that we had to sell our FHA loans, and other government loans such as VA and Rural Housing Loans.

It is too bad.  I, thankfully, have other outlets to sell FHA loans, so we go on business as usual in that sense. I only had TWB as an outlet to sell my VA loans, however.  So, although as of this writing TBW is still in business and still, supposedly, taking VA loans, all that is likely to change any time now.  Which means we are setting up to sell VA loans to other outlets for servicing.  Could be 2-3 weeks before we get there, but we will have that ability again soon.

Oh, and in case you were wondering about the inner workings of an Atlanta mortgage lender even further, we only need these outlets for government and niche loans.  For the standard, conventional 30 year and 15 year fixed loans, we sell those directly to Freddie Mac, and Freddie in turn finds the servicer for the loan.  So, we are good there.  Right?

There you have it.  More information than you ever thought you would need to know about the back office workings of a mortgage lender.

I saw this article on the Reuters Blog, by Rolfe Winkler.  He chronicles quite succinctly the difficulty that the Fed has in trying to pump the economy up, while trying their best to stave off inflation, and potentially hyper-inflation that many economists fear is coming our way.

Note in the graph that the ‘excess reserves’ that the Fed has pumped into the banking system is approximately $700B, up from it’s decades-long level of $10B.

Now, the Fed argues that if it just sits there, with banks earning small amounts of interest on it, then all is well, and they can slowly reel these excess funds back in once the economy starts chugging along again.  Everybody’s then happy, and, no inflation.

The danger is that the economy starts picking up a little steam, and the banks start to aggressively lend these excess funds, to gain even more interest income.  Then, we have WAY too much money supply in circulation, and, you guessed it, hyper-inflation.  And we all pay $10 a gallon for milk.  Leave the Oreos.