What does President Bush's economic stimulus plan mean to the Metro Detroit area and how soon can we expect the changes to occur?
Everything is uncertain as how it will affect Detroit and the Detroit suburbs? FHA, Fannie Mae, and Freddie Mac are the government and quasi government agencys that now have to set guidelines for mortgages. It may take time for those agencies to come up with guidelines.
Some of the issues that have to determine is which areas are high cost areas, which area will be included in the changes, what is the median home cost. All of these factors will determine whether Detroit and metro Detroit mortgage holders will benefit from the plan.
Even after FHA, Fannie Mae, and Freddie Mac determine the new mortgage guidelines, the banks have to set their guidelines. One bank even sent out an email stating that they have to determine the impact the guidelines have. The banks owe it to their share holders to minimize risk and make money. So you may see some banks still shy away from those big loans. Would you as a big bank want to put $600 -$700,00 at risk at one loan or would you rather do 3 $200,000 loans. It is in the banks best interest to spread the risk amongst 3 loans than 1 big one. I bet that you will see a higher rate from the banks for the high loan amounts. Only time will tell. I'm just guessing, but whatever the outcome there will be people that benifit from the plan. No it will not solve all the problems, but it is a start. I hope for the people of Detroit, the people that live in Metro Detroit suburbs that they get relieve in this mortgage crisis. Have a great day. Russ Ravary. For more on Michigan mortgages, house hunting tips, buying a condo (what you should think about) go to my website www.russravary.com
Showing posts with label Metro Detroit. Show all posts
Showing posts with label Metro Detroit. Show all posts
Wednesday, February 13, 2008
Monday, May 21, 2007
Mortgage fraud
Today was another tough day in the mortgage world. I had a loan approved at a major lender for a 100% loan on Friday. Today PMI insurers made a change in their guidelines. They will no longer insure 100% loans when the borrowers credit score is less than 575. Unfortunately my borrowers credit score is less than 575 and now they will only loan him 95% instead of the 100% they would on Friday.
It is just another sign of how much the banks are tightening up the credit guidelines.
On another front I had a real estate agent arguing with an appraiser. They had a purchase agreement for $250,000. The appraiser could not find a comp that would support a price of over $235,000. The real estate agent was upset with that answer. When my appraiser asked her what comps she used to set a price on the house, this is what she said. Well I sold a house in that sub over a year ago for $250,000. Do you think she might have been a little smarter and realized that the housing prices in Metro Detroit are falling. (and across the country) She didn't want to tell her seller's that the house was no longer worth the $250,000 they paid for it let alone the $50,000 they put into it. The agent wanted to know if my clients had $15,000 to come to the table with. What did she think that we were stupid. Why would we buy a home that would not comp out. She wanted to use comps from over a mile away and disregard the close ones. That agent wanted my appraiser to commit appraisal fraud or mortgage fraud so she could make a commission. Shame on her!!!!
Don't let an agent do that to you. If an appraiser tells your mortgage guy that the house won't comp out to the purchase price. Either the sales price has to come down or you need to move on and find another home. The buyer's agent was smart enough to do just that. And you can too. There is absolutely no reason to overpay for a home in this market.
For more mortgage information go to http://www.russravary.com
May you work with an honest agent that looks out for your interest.
Russ Ravary
It is just another sign of how much the banks are tightening up the credit guidelines.
On another front I had a real estate agent arguing with an appraiser. They had a purchase agreement for $250,000. The appraiser could not find a comp that would support a price of over $235,000. The real estate agent was upset with that answer. When my appraiser asked her what comps she used to set a price on the house, this is what she said. Well I sold a house in that sub over a year ago for $250,000. Do you think she might have been a little smarter and realized that the housing prices in Metro Detroit are falling. (and across the country) She didn't want to tell her seller's that the house was no longer worth the $250,000 they paid for it let alone the $50,000 they put into it. The agent wanted to know if my clients had $15,000 to come to the table with. What did she think that we were stupid. Why would we buy a home that would not comp out. She wanted to use comps from over a mile away and disregard the close ones. That agent wanted my appraiser to commit appraisal fraud or mortgage fraud so she could make a commission. Shame on her!!!!
Don't let an agent do that to you. If an appraiser tells your mortgage guy that the house won't comp out to the purchase price. Either the sales price has to come down or you need to move on and find another home. The buyer's agent was smart enough to do just that. And you can too. There is absolutely no reason to overpay for a home in this market.
For more mortgage information go to http://www.russravary.com
May you work with an honest agent that looks out for your interest.
Russ Ravary
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