George's Blog

The seasons in New England are very distinct and very different from one another.  Spring is filled with crisp air, blooming flowers, budding trees, and grass that is beginning to grow.  Summer is warm, with a couple of weeks that gets very hot and humid.  The flowers are in full bloom, trees are thick with green leaves, and cutting the grass is a weekly chore.  Fall is a canopy of colors, as the leaves on trees begin to turn bright shades of orange, yellow, and red, and different shades of green.  The weather is also cooler and crisp, but different from Spring.  Winter is cold and snow is plentiful.  The grass has stopped growing, and is usually covered with snow, as well as are the trees.

But there is a fifth season, one that is not talked about, but equally distinct as the other four.  This fifth season is not as beautiful as the other four, or one that New Englanders look forward to.  This fifth season occurs between the bright colors of Fall, and the beautiful white fluffy snow of Winter.  It is a time that the trees have lost their leave and are not very pleasant to look at.  It is a time that is cold, raw, and rainy.  It is a time that isn't very pleasant.  But it is a time that has it's own very distinct character, and should be shared like the other four.

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Info about the author:

George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com

I just was made aware of this and wanted to get the word out to our Military Service Men and Women, as well as all our Veterans.  Applebee's is offering all our Veterans and Active Duty Military Members a free meal today to honor all our Military Personal and Veterans on Veterans Day.

Applebee's will be offering six entrees on their menu to choose from, all that a Veteran or Military Service Man or Women needs to do is to provide one of following as proof of service:

• U.S. Uniform Services identification card
• U.S. Uniform Services Retired ID card
• Current leave and earnings statement
• Veterans organization card
• A photograph in uniform
• Service members may also wear their uniforms as proof of military service.

A free meal always sounds good to me, and as a Vietnam Veteran I might just take Applebee's up on this offer today.  Thank you Applebee's for your show of support to all our Military Personal. 

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Info about the author:

George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com

This is a picture that my brother just took in his back yard in Arizona.  It is almost as if the Hawk was posing for him :)

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Info about the author:

George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com

As promised below is an overview and comparison between the present Tax Credit and the New.  The information below was just given to us by Senator Dodd's Office.

Homebuyer Tax Credit Overview:

• First‐time homebuyers (those who have not owned a principal residence in the three years prior to the purchase date of their subsequent home) are eligible for a refundable tax credit of 10 percent of the purchase price of a principal residence up to $8,000 for homes bought between January 1 and December 1, 2009.
• If the home is sold within three years, the taxpayer must pay back the credit (called "recapture").
• Income limits for the current credit are $75,000 for single filers and $150,000 for joint filers, phasing out completely after $95,000 for individuals and $170,000 for couples. Income limits are based on Modified Adjusted Gross Income (MAGI).

Extended and Expanded Homebuyer Tax Credit:

• Extends the availability of the $8,000 first‐time homebuyer credit to taxpayers who have a principal residence under a binding contract before April 30, 2010, allowing 60 days to close.
• Creates a new $6,500 credit for move‐up buyers. Move up buyers are defined as people who haveLike the credit for first‐time buyers, lived in their current home for 5 or more consecutive years during the 8 year period ending on the date of purchase of the their subsequent principal residence. this credit is available to taxpayers who have principal residences under a binding contract before April 30, 2010, allowing 60 days to close. 
• Raises the income limits for both the first time and move‐up buyer to $125,000 for single filers, $225,000 for joint filers with a $20,000 phase‐out. The $20,000 phaseout means that no credit can be claimed by those with MAGI above $145,000 for single filers, $245,000 married joint filers.
• Both the first‐time and move‐up credit are available for principal residences with a purchase price up to $800,000. Purchase price is defined as the adjusted basis of the principle residence on the date such residence is purchased.
• Includes strong anti‐fraud provisions: 
  • Gives the Internal Revenue Service math error authority which they have requested when processing IRS form 5405. This would allow the IRS to correct certain errors during credit processing, and avoid the need for a post‐refund, labor intensive audit. 
  • Requires a copy of the settlement statement (HUD‐1) which would verify the date of purchase, the residence address, and the purchase price. 
  • Introduces an explicit age limitation, allowing no one under 18 to claim the credit
  • Excludes individuals who are claimed as dependents and married individuals who purchase the home from the family of their spouse from claiming the credit
• Eliminates the recapture requirement for military personnel and members of the Foreign Service and intelligence community who are forced to sell their homes within three years as a result of an official extended duty of service. In addition, these individuals have one additional year to qualify for the credit if they served for at least 90 days outside the U.S. in 2009 or 2010. 
• Purchases made in 2010 can be claimed on the 2009 tax return. 
• The score of $10.8 billion over 10 years is paid for by a seven year delay of the worldwide allocation of interest rule until 2017, not stimulus funds. 
• Effective after the date of enactment. 
• Homebuyers who were eligible for the first‐time homebuyer tax credit pre‐WHBAA will be able to continue to claim the credit. Homebuyers who qualify for the credit under the expanded terms will only be able to claim the credit if they close on their home purchase after the date of enactment of this bill (the binding contract can be signed before enactment).

Some of this, like any new Legislation, is going to take a few days to fully understand.  As further clarification is made available I will try to provide it.

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Info about the author:

George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com

Looks like the long awaited New Tax Credit Bill will be signed into law tomorrow.  The New Tax Credit Bill was passed by the Senate earlier today, and by the House a few minutes ago.  The President has already stated that he will sign the Bill tomorrow once it hits his desk.

The New Tax Credit Bill will look a little different than the current one, but until it is passed by both the Senate and the House, and signed by the President, it is always subject to change.  As it stands right now the New Tax Credit Bill is suppose to contain the following:

• First-time homebuyers will continue at $8,000
  
• Tax credit for “move up” purchasers will be up to $6,500
  
  • Must have used previous home as a principal residence for 5 of the 8 previous years.
• Income limits increased and are the same for first-time and “move up” purchasers: $125,000 for single filers/$225,000 for joint filers
  
• Limitation on eligible home prices has been increased to $800,000
  
• Time Frame: December 1, 2009 to April 30, 2010 plus 60 day extension if binding contract is in place by April 30, 2010.
• Anti-fraud measures have been added

The two big differences between the present Tax Credit and the New Tax Credit Bill in my opinion are: 

• The New Tax Credit will be expanded to include present homeowners that have owned their home for at least 5 years.  The New Tax Credit still only applies to Primary Properties, which means that Investment Properties or Vacation Homes do not qualify for the New Tax Credit.
• Instead of the cut-off date being the Closing Date, it will now be the Date that the Buyer goes under Contract, and then having to Close 60 Days from that date.  This makes a lot more sense to me then having the Closing Date be the cut-off.

The $6,500 Tax Credit for existing Homeowners will be effective upon the New Tax Credit Bill being signed by the President.

Let's see if what we are being told is actually with ends up being signed, and we should know that some time tomorrow.

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Info about the author:

George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com

Not often that I get to see an almost full moon while it is still day light.  Who knows maybe we will have a full moon for halloween.

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Info about the author:

George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com

The third and last change that we have been notified of this week is a change to FHA Appraisal Expiration.  FHA Appraisals use to be good for six month, this was both good and bad.  Good because if an appraisal was done on a property, and the deal fell apart, the appraisal would still be applicable for a six month period, and the new Buyers/Borrowers would continue to use the same appraisal, because it was attached to the FHA Case Number.  Therefore, they were able to save money on an appraisal.  The Bad part is that if the reason for the deal falling apart was because of appraisal issues, or the house under appraised, those issues would continue to be a problem for six months, and you could not get away from them by doing a new appraisal.

With this change FHA has reduced the appraisal expiration to 120 days for all existing and new construction properties effective with case numbers assigned on or after Jan 1, 2010. This change aligns FHA with current industry practices. 

This again is both good and bad.  Good because you are able to replace an appraisal that had issues or under appraised sooner.  But likewise it is bad because an appraisal that did not have any issues will now be good for only 120 days in stead of the previous six month.

This concludes the changes that I have to report on for now, but keep in mind that these three changes that I have blogged about, are all Program Changes, there are other changes that have also been made that are Investor Changes.  Investor Changes are an additional layer of qualifying requirements that are imposed on by Investor which are over and above those made by Fannie Mae, Freddie Mac, FHA, VA, and USDA.  Those changes will differ from Lender to Lender depending on whom the Lender is selling their loans to.  The best way to keep up with these changes is by having a good working relationship with a Loan Officer that will keep you up to date on them.

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Info about the author:

George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com

The second up coming change that Kim Neilson our Senior Vice President at McCue Mortgage recently made us aware of, are changes to FHA Streamline Refinancing.  Unlike the up coming change that I wrote about yesterday, this change will only affect existing FHA Borrowers, but given the number of FHA Loans that have been done over the last few years, this change will still an impact on a significant number of homeowners.

The up coming changes to the FHA Streamline refinance guidelines will become effective with FHA case numbers assigned on or after 11/18/09, and are as follows:

• Borrower must be receiving a net tangible benefit as the result of the streamline refinance in one of the following ways:
  • 5% reduction in total mortgage payment.
  • Adjustable Rate (ARM) to Fixed Rate.
  • Reducing the term of the mortgage
• Evidence borrower is employed and has income at time of application.  A current paystub and verbal Verification of Employment (VOE) will be required.  If self employed, YTD Profit & Loss (P&L) statement from an accountant will be required.
• If assets are needed to close, borrower must provide evidence of sufficient assets to close.
• If subordinated financing is remaining in place, the max Cumulative Loan To Value (CLTV) is 125%. For streamline refinance WITHOUT appraisal, the LTV/CLTV calculation is based on the original appraised value for the property.  For streamline refinances WITH appraisal, the CLTV is based on the new appraised value.
• The Maximum Mortgage Amount calculation is as follows:
  • Streamline WITHOUT appraisal - the outstanding principal balance minus the applicable refund Upfront Mortgage Insurance Premium (UFMIP) PLUS the new UFMIP. Closing costs CANNOT be added to the mortgage.
  • Streamline WITH appraisal - the lower of outstanding principal balance minus the applicable refund UFMIP, plus closing costs, Prepaids and the new UFMIP OR 97.75% of the appraised value plus the new UFMIP. Discount Points* MAY NOT be included in the new mortgage. If the borrower agrees to pay discount points, documentation of sufficient assets must be verified.

*Discount points are defined as total borrower points greater than 1.00.

I will cover the third change tomorrow, which is also an FHA change, and that change will affect all FHA Borrowers. 

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Info about the author:

George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com

Kim Neilson our Senior Vice President just released some information to all our Loan Officer about Industry Changes that will be happening over the next two to three months.  These are changed that will affect many of us in the Real Estate Industry, especially the change that I am writing about in this blog, Fannie Mae Automated Underwriting (DU) Eligibility Changes.  If all of us are up to date on the up coming changes, than we can all better serve and advice our Borrowers and Buyers.  

This first change, Fannie Mae Automated Underwriting (DU) Eligibility Changes, is going to have a major impact on 2 Unit Multi-Family Properties, and the sooner the word gets out about it the better.  Fannie Mae will be releasing Automated Underwriting (DU) Version 8.0 on December 12.  Changes included with the release are as follows:

• Minimum FICO score 620 (was 580)
• 2 Unit Owner Occupied Property - maximum LTV 80% for purchase & rate/term refinance (was 90%)
• 2 Unit Owner Occupied Property - maximum LTV 75% for cash out refinance (was 85%)
• 2 Unit Investment Property - maximum LTV 75% for purchase & rate/term refinance (was 80%)
• Unit Investment Property - maximum LTV 70% for cash out refinance (was 75%)

All new cases submitted to DU on or after December 12 will be scored with the 8.0 version and the new eligibility will be applied. New cases submitted prior to December 12 will be scored with the current version DU 7.1 and will continue to score as DU 7.1 on subsequent submissions, however, loans using DU version 7.1 must close by February 12, 2010.

Similar changes were already put in place several months back on 3 & 4 Unit Multi-Family Properties, and those requirements will continue as is.  These changes continue to make FHA an even more attractive loan product for Multi-Family Owner Occupied Properties (FHA does not do loans on Non-Owner Occupied Properties), and making Conventional Loans even tougher to do.

Tomorrow I will write about the second change that will go into affect very soon.  Stay tune!!!

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Info about the author:

George Souto is a Loan Officer who can assist you with all your FHA, CHFA, andConventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com

Bob Stewart announced a new ActiveRain Challenge on Thursday called Using Your Blog To Enhance Existing Relationships.  The purpose of the Challenge is exactly what it says but please follow the link to get all the details.

My purpose for blogging is to provide information and to better educate Home Buyers as well as to keep Realtors that follow my blog.  I have taken many of my blogs and created packets as well as flyers that I give to my clients and Realtors whom I call on.

Examples of blogs that I have created packets for my Borrowers are:

First Time Homebuyer Seminars.....Part #1.

First Time Homebuyer Seminars.....Part #2.

First Time Homebuyers Seminars.....Part #3

First Time Homebuyer Seminars.....Part #4

Major Impact on Credit Scores (edit/delete)

Credit Scores Where Did They Come From & What Are They???

Why Are Credit Scores Different Between Credit Reports & Reporting Agencies???

Most of my business comes from Realtors who refer me to their Buyers, so a major part of my work week is to stop by Realtor Offices and provide them with information on loan programs like FHA, CHFA, VA, and USDA Mortgages.

FHA The Main Loan Program In Connecticut!!!
FHA & CHFA Condo Lists
PMI Changes Making FHA and VA Much More Go To Loan Products 
FHA Condominium Approvals
HUD Website Great Resource For Homebuyers

CHFA Not For Just First Time Homebuyers.
New Tax Credit .................... Connecticut Housing Finace Authority (CHFA)
CHFA ................ Federal Recapture Tax

VA Mortgages

USDA Loan Program 
USDA Loan Program ........... Part II
FHA Appraisals

I also provide flyers that Realtors use and make part of their Open House Packets.  Lately many of the Realtors that I partner with have also started to include these flyers as part of the material that they leave at each of their listings.  My most popular flyer that Realtors request is the I wrote the following blog about.

Open Houses Not Just For Realtors...A Great Marketing Tool For Loan Officers Also!!!

There are many blogs that I have written, that I have then converted to into material that I hand out to my Borrowers and Realtor partners, such as resent blogs that I have written on FHA Condo Approval changes.  I see a major part of my job as a Loan Officer keeping the public and especially the Realtors that I partner with, informed of many industry changes that we are experiencing these days.  Writing a blog and then using the blog to create flyers to hand out to my Borrowers, and Realtor Partners, is a great way for me to do that, and I would encourage others to do the same.

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Info about the author:

George Souto is a Loan Officer who can assist you with all your FHA, CHFA, andConventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or