The Dalles Oregon VA Home Loan, VA Real Estate Lending The Dalles OR. VA Home Loan Specialist

SHORT SALES!

December 2nd, 2009

As I am arrranging my current files in my office I realize that 80% of all my current purchases are short sales.. A total of 14 offers to purchase. I have approval, ( verbal- not worth much) on some, some are in the waiting game ( months now) and some at the very beginning of the process. Closing short sale offers can be a very dicey proposition… A short sale is when, as an example the home owner owes 200k on their home and can only sell it for 170k so the homeowner is 30k short of having enough to pay off the existing lien or liens on the property. Here is where the fun begins! A buyer comes along as says fine, I will pay 170k for the home as that is what it is worth now. The seller says great I will take that offer of 170k and we are off an running. The bank or banks that hold the liens on the first and second ( most short sales have a first and second) have to agree on the purchase price and how the amount the sale will be short of covering the existing liens will be handled. ( How much first and second lien holder agree to take in funds or from amount short of full payment of liens). The fact that you get a seller to sign a contract on their home when it is a short sale really doesnt mean much at all, just that they will agree to the price if the bank does. The decision is completely the bank or banks involved as to whether they are OK with the price. Their will be a negotiator from the bank, there will be a BPO (Broker Price Opinion) done by the bank to see whether the price being offered by the new buyer meets their minumum for current market conditions. Now when the bank says OK if they do…then the sellers will be presented options from the bank/ banks on how in this case the roughly 30k short to cover existing liens will be addressed. The bank,banks can forgive the debt, the sellers may have to pay income tax on the 30k as it is income if the bank forgives the debt, could be a lien which would have to be paid back some how. Any number of things can happen in the end game. So after waiting for 1-6 months the deal can be off in a matter of minutes if the seller balks or is not willing to go along with the terms the bank / banks offer. Here is a couple examples that have happened to me in the month of Novemeber. With one buyer we waited for 4 months and got the offer approved with the bank and were going to be able to beat the looming foreclosure that would occur if not closed by a specific date. On this home there was a small first mortgage and a large second mortgage. The bank that owned the first mortgage took out a mortgage insurance policy on the second to protect their interest in the property. So… in the eleventh hour after a verbal approval but before the written approval was issued the bank that held the first withdrew their approval and decided to let the home go into foreclosure. This is a business decision and really can not fault the bank for proceeding this way as now they can get the insurance money and most likely collect more money in the final sale of the property than what my buyer was offering. My second example was a transaction that had one condition left to get the loan documents out to title… the seller decided to file bankruptcy in the 12th hour which terminated all proceedings in the sale of the home. Now it will be up to a judge. I speculate that the terms the bank offered the seller were not possible for the sellers to meet. Probably figured that better to file Bankruptcy and wait a few years and buy again. So in short …. Short Sales are very time consuming and have a lower chance of funding than a bank or seller owned property. Tomorrow I will write about what the Feds are doing to put the pressure on banks to expedite, and standardize the procedure for selling Short Sale Properties.

Michael Frakes

We are now working with Nan Wimmers and Becky Schertenleib, agents with Columbia Gorge Real Estate

November 16th, 2009

Creekside Mortgage, Inc., is now partnering with Nan Wimmers and Becky Schertenleib, at Colubia Gorge Real Estate. They are a family-owned and operated real estate agency working in the Columbia Gorge communities, including The Dalles, Dallesport, Dufur, Rowena, and surrounding areas. They love helping veterans with the home buying process. They work hard for their clients by establishing great partnerships in the industry, fostering a high level of communication to ensure every transaction is smooth and worry-free. Their high level of service is personalized for every client; they are always available by phone, and their office is open 7 days a week! Check out their website at http://www.columbiagorge-realestate.com/

We at Creekside are happy to be working with Nan and Becky in the Gorge. As Veterans ourselves, we go out of the way to help Service veterans recognize their dream of homeownership, and we recognize the service excellence of Nan and Becky, for Veterans and others who purchase real estate in the beautiful Columbia River Gorge.

Rates fall back to all-time low!

November 13th, 2009

Rates have now fallen back to an all-time low, right around 5%, in some cases lower on government VA 30 year fix loans.

Once again, it is a great opportunity to buy a house. A lot of people are predicting this is the last run on rates going down, due to the inflationary factors that will be coming in the future due to governement spending at such a high rate. The government will soon have to start raising the cost of borrowing short term money to be able to pay for debt that is currently being incurred.

Kerry Greenwald Sr. VA Loan Specialist

Your Credit Score…..the Highs and Lows

November 12th, 2009

In todays world of Credit there are so many factors that are considered in the bureau’s determining your score. Lets consider two types of credit scores that are not that different…..actually quite similar. Lets compare a 740 and say a 680 score.

The difference points up an important fact: The higher your score, the more points you tend to lose from “bad” actions. That’s because the scoring formula is sensitive to any sign you’re getting in over your head. Maxing out a credit card is considered one of those signs.

You also should know that it typically doesn’t matter to the formula if you carry a balance or pay off that maxed-out card as soon as you get your statement. What’s usually reported to the credit bureaus is the balance on your last statement. Even if you pay the debt in full before the due date, the maxed-out card will hurt your score. So keeping a balance at 35% or less of the available balance is a good rule to follow.

Kevin J. Lawson

The benefits of VA vs. FHA loans

November 8th, 2009

Many people are confused about the benefits of getting a home loan through the Veterans Administration vs. the Federal Housing Administration. Both are similar loans due to the fact that they surround first-time home-buyer programs, or are a limited- to no-down-payment-required loan. An FHA loan requires a down payment of 3.5% and the seller can pay all of your closing costs. A VA loan is a true 0% down loan, with no down payment and no closing costs for the borrower, as the seller can pay all closing costs.

FHA loans have a monthly mortgage insurance calculated on the value of the house that lasts up to five years and until you get 75% loan to value on the house. FHA does have an up-front mortgage insurance premium of 1.5% added overall on top of the loan. VA has no such mortgage insurance on a monthly basis.

However, with VA, you do pay a VA funding fee. The first time you use your benefits, there is a 2.15% fee; it is not paid out of pocket, but is financed into the loan. Your second use requires a 3.3% fee. That is also financed on top of the loan; it is not something you have to pay up front, which in the long run is much cheaper than paying that extra premium on a monthly basis.

The bottom line: never, under any circumstances, if you’re a veteran, would you ever go FHA, unless you’ve lost your entitlement, or you want to buy a house with another person you’re not married to who is not a veteran. There are very few circumstances in which FHA would benefit a veteran more than going VA.

Most people try to talk veterans out of their VA rights because it is more difficult for the person doing the loan to complete the transaction. Never give up that benefit!

Another note: If you have any type of disability benefits of 10% or more from the VA, even if you’re putting 10%-20% down, a VA loan is always going to be cheaper for you.

I hope this was helpful. If you have any questions, always feel free to give Creekside Mortgage a call.

Kerry N. Greenwald, Sr. VA Loan Specialist

Creekside Mortgage partners with charitable organization for the benefit of children of veterans

October 29th, 2009

Creekside Mortgage is happy to announce that we are partnering with the Special Operations Warrior Foundation to help provide college educations to the children of fallen Special Operations forces. For every closed VA loan originated after July 1, 2009, Creekside Mortgage will donate $100 to the Special Operations Warrior Foundation in the name of the borrowing veteran. The foundation also provides assistance to special operations personnel who have been serverely wounded.

The Special Operations Warrior Foundation was started in 1980 as a scholarship fund named in honor of the legendary Army Green Beret Bull Simons. This fund provided college educations for surviving children of the men killed or incapacitated at Desert One.

Children awarded scholarship funds are survivors of Special Operations Forces of the Army, Navy, Air Force, and Marine Corps. Currently, the foundation is providing scholarships for 760 children of over 600 Special Operations Forces who have passed away in service to the country.

At Creekside, we are veterans who want to support our fellow service members and their families in every way that we can–not just by providing expertise in using VA home loan benefits, but by supporting organizations who have common cause to support families of service members. When you choose Creekside for your lending needs, you are partnering with us to help children of deceased service members and to make a difference in the lives of others. Please visit http://www.specialops.org for more information on this organization.

Kerry Greenwald Sr. VA Loan Specialist

Why put 5% down on a VA home?

October 25th, 2009

The VA loan allows a Veteran to utilize his/her VA loan multiple times with various combinations depending on military history, service connected disability, down payment, and prior VA loan history. I must preface my topic: “Why put 5% down on a VA home loan?” with a basic answer to another question: What is a VA funding fee? The VA funding fee is added as a dollar amount calculated by a percentage to the purchase price of the home you are buying. The VA funding fee guarantees to the lender that if a Veteran fails to repay the loan the lender is protected from $36,000 up to$144,000, and an additional amount equal to 25% of the allowed county loan limit for a single family home may be available. This is not to be confused with the veterans entitlement amount to purchase with $0 down, which is $417,000 in most counties, and higher in a few.

When a veteran with active duty service (which includes nearly everyone, including reserves, due to active duty service in multiple theatres of war) the VA funding fee is set at 2.15% for first time use of the VA benefit and subsequent use (another new home purchase or refinance) is set by the VA at 3.3%. The Veterans who are in reserves with no overseas service in Iraq or Afghanistan for example (on active duty) will have slightly higher fees, and for the purpose of this discussion I will focus on active duty and active duty reserves.

If you put down 5% on a VA home loan, your funding fee drops to 1.5%, no matter how many times you have used your benefit. This is a huge savings! If you look at an average home of $250,000, the funding fee for a second use on your home would be 3.3%, or $8,250. However, if you put down 5% the loan amount is now $237,000 and the funding fee would drop to $3562.50–a savings of $4,687! With a first time home purchase (funding fee of 2.15%), you still save a significant amount of about $1,813 on our hypothetical $250,000 home. The lower loan amount translates into lower monthly payments.

There is no other loan on the planet that even comes close to your VA home loan benefit…all other loans require some type of mortgage insurance paid monthly when you are in less than a 20% equity position. Additionally, on a VA home loan the seller can pay up to 4% of the purchase price of the home toward your closing costs, pre-paid fees, and VA non-allowables (fees the veteran by law cannot pay). Using the hypothetical $250,000 home again, the seller could pay up to $6,500 in closing costs, pre-paids, and VA non-allowables. This frees up a person’s savings to go toward a down payment rather than paying closing costs.

If you put 10% down, your VA funding fee will drop to 1.25% , which is a limited return for the additional funds required compared to the benefit gained by the 5%. Feel free to contact us for more information on your VA home loan benefits.

Michael Frakes, U.S. Navy Retired, Sr. VA Loan Specialist

*The guaranty means the lender is protected against loss if you fail to repay the loan. The guaranty replaces the protection the lender normally receives by requiring a down payment allowing you to obtain favorable financing terms.

*For loans in excess of $144,000 on purchases or new constructions, additional entitlement up to an amount equal to 25% of the VA county loan limit for a single family home may be available.

Michael Frakes U.S. Navvy Retired Sr. VA Loan Specialist

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