Gene Mundt - Let's Talk Mortgages & Real Estate!

     Last week after a particularly frustrating day, I wrote a message on my Facebook.  It was meant to be somewhat "tongue in cheek", but evidently that wasn't as apparent as I thought it was.  My comment was that I was going to put an educational seminar together for today's home buyers.  The topic would obviously cover the lending process, but would also cover all the many changes recently made within our industry. 

     I suggested that the largest portion of the seminar would be directed at those buyers that had previously closed a loan and were looking to refinance currently.  The focus of this portion would be what a buyer should currently expect during his purchase and financing process in contrast to his prior experiences. 

     The message I was trying to make ... and obviously did so very poorly ... was that expectations are fine if they are reasonable.  That day I was feeling that many of my clients and referral partners expectations were possibly a little "over the top" and I was feeling a little battered.  Thus my comments. 

     Now before anyone gets upset ... let me explain that I think there is an accountability to be met by a lender.  I also think that customers and referral partners are right to expect and demand a high level of expertise, professionalism, knowledge, accountability, honesty, and results from the lender they are working with.  That is not even up for debate.

     My simple point I was trying to make was this ... the customer has responsibilities and obligations within a transaction too.  Today's real estate transactions many times follow a twisting and bumpy path.  Costumers need to know and understand this ... and formulate their expectations around current reality.  

     Lenders and agents are real estate professionals ... not magicians and psychics.   Transactions are simply not conducted or accomplished like they once were.  Everyone involved needs to contribute towards a successful closing.  Everyone needs to do their part.

    My little comment seemingly struck a nerve on Facebook.  I received many responses to it expressing a thumbs-up on the idea.  Many thought a seminar should be mandatory too!  At the time I was being facetious ... but I think I'm on to something. 

     What are your thoughts and opinions?

     There have been many articles written recently regarding the looming tax    credit deadline for first-time home buyers.  A real debate has been raging ... should or shouldn't the tax credit be extended?

     In the meantime while the pros and cons of this are being debated, I'm experiencing a great number of phone calls asking ... "Can I still take advantage of this credit"?  And ... "Do I still have time to get a deal closed before the cut-off date"?  As the clock ticks down on this program, it is getting harder and harder to answer in the affirmative.  Closings are hard to guarantee and time is terribly short now.  I hate having to tell a young      first-time buyer that they may have missed their opportunity.  It's sure not easy telling a referral partner that message either.

     It's why I was almost giddy when I learned about a new loan product being added to the program menu at our company through Fannie Mae.  This new program is exclusive to Fannie Mae Foreclosed Properties.  No one needs to tell you, there is currently a virtual backlog of home inventory being held by this mortgage giant.  

     In order to improve the housing market, this inventory needs to be moved.  To address this problem, Fannie Mae has now developed and will provide an unique financing opportunity for these properties through qualified, program participating lenders. 

           Some of the Highlights/Unique Advantages of this new program are:

        1.  5% DOWN CONVENTIONAL FINANCING with lower than   typically allowed Credit Scores

          2.  INVESTORS allowed (Non-Owner Occupied) with 15% Down Payment

          3.  NO MORTGAGE INSURANCE Required

          4.  NO APPRAISAL Required

     How does this fit?  How does it help everyone's cause?  Buyers looking to enter the market at low prices tend to search for distressed properties, like foreclosures and short sales.  Pitfalls are encountered by these buyers when the property is appraised or mortgage insurance is denied.

      NEITHER of these issues is a concern with this new product.  NEITHER an appraisal or mortgage insurance is needed. 

    Take these two major issues out of the underwriting/processing/closing mix ... and you have a much better chance at getting a loan closed before the deadline of November 30th!   

    This new program has been delivering new life into the agencies that I work with.  Agents are seeing real potential for immediate assistance for their customers ... and their personal businesses with this dynamite new program. 

     The wheels of change have been a long time coming, but with the advent of this new HomePath loan ... there is finally some hope of improving some of the frustrating circumstances presently before us. 

    Unfortunately, even after portions of the new stimulus dollars have been dispursed, many banks are still not lending to small businesses.  The infusion of the Fed's capital has not loosened the lending as we'd like.

    We are now facing the reality of 5 & 7 year balloon clauses written on commercial loans in '02 through '04  having, or soon coming due, as well.  Value on many properties has dropped, and the bank's are not willing to always renew those notes.  If this is what you or your borrowers/owners are facing, what do you do?  What options exist for them or you?  The answer to the dilemma may be found within an unique lending product.

    Please consider the unique asset-based loan ... money lent solely on the size and strength of publicly traded stock.  Some of the benefits of an asset-based loan are:

• There is no reporting of income.
• No appraisal needs to be done. 
• No underwriting is involved in these loans. 

    If the borrower/owner has stock of substantial value, lending can occur at interest rates of 3.5% to 6%, interest-only, up to 80% of the value of the stock.  You, or an owner, can payoff the bank note held with this new loan.  The stock gets pledged as the loan's collateral.

    If you, or someone you represent, is facing this scenario now or in the near future, please contact me for further information.  This loan may afford a great opportunity to the situation you are facing, offer a unique solution to your lending needs, and place you on the right financial path for the future. 

    The opportunity for lending is open for those in multiple areas, as my company and I are fully licensed and able to assist in many states across the nation.  I look forward to speaking with you very soon.

Gene Mundt, Professional Mortgage Banker                                                 www.genemundt.com     Chicago Bancorp