George's Blog

The Middlesex Chamber of Commerce will be conducting a workshop on Social Networking on Wednesday April 22nd from 9:00 to 10:30 a.m. The workshop will actually be conducted by an ActiveRain member in Middlesex County, Connecticut, Diana Bartolatta.

This was actually discussed at our monthly Middlesex Realtors Council meeting a couple of months ago, and everyone present felt that this playing a big part in the way we do business today. The goal of the workshop is to help us expand our business, and should benefit all who attend.

The workshop will be tailored specifically for the Real Estate Industry, and presented in a way that those who are new to Social Networking will be able to understand. This workshop is free to all who want to attend and will demonstrate methods that we can all use to connect to one another, and more importantly to our client base.

As a member of ActiveRain, Diane is not only familiar with this site, but also with other sites like LinkedIn. I am hoping to walk away with a better knowledge of how I can best utilize the blogging that I do here in the Rain, to link it to other sites like LinkedIn. Linda Davis did a similar presentation earlier this month at my office and it was very well received, and I learned a lot from her.

Space might be limited, so make sure that you contact the Middlesex Chamber of Commerce well in advance to register, and reserve a seat. Hope to see some of the ActiveRain members here in Connecticut there. It would also be a great opportunity for some of us who have not met to do so at this event.

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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 had planned on blogging about something else today, but after a Pre-Approval that I did this morning, I decided that I would blog about that instead, because the results just floored me.

Over at least the last six months I have not been able to get an Approved/Eligible though DU (Direct Underwriting) Automated Underwriting System for FHA Loans (FHA TotalScore Card) with ratio's of more than a 38/52.  This has been the case even for Borrowers with Credit Scores in the 700's and with one to three months of reserves in the bank.  That was until this morning.

This morning I got a call from one of the Realtors that I work with needing me to do a Pre-Approval on one of her Buyers that needed a Pre-Approval Letter today in order to submit an offer on a house.  I contacted the Buyer and went through my normal procedure which is to look at credit and income first, and if that looks OK to then go on from there, and take a full application so that I can run it through Automated Underwriting (DU).

When I ran the credit I got my first red flag, the middle credit score was under 620, and even though FHA does not have a minimum credit score requirement, our investors have a minimum of 620.  This was a concern but this buyer had a credit card that was over the credit limit and another one that was almost maxed out.  It wasn't going to take much money to bring them both to about 1/3 of the card limits, so I knew I could quickly get the score up 20 - 40. 

I then went on to take the rest of the information to complete the application, and the Buyer did have a couple of strong points. There were no lates in the last 12 months and had money in the bank for at least six months of reserves.  When I finished I took a second look at everything before running it through DU.  The Buyers ratio's were 43/55, this was not good, and given my recent experience, there was NO WAY that this was getting an Approve/Eligible.  But I do not leave anything up to my opinion, so I prepared the Buyer for want I was expecting to get while I was running it through DU.  What I saw next was a shock, and I was speechless for several seconds (which for me is amazing ... LOL), on the screen it read Approved/Eligible.

I could not believe it then, and I still cannot believe it now while I am writing this.  The only conclusion that I can come up with is that DU really liked the fact that the Buyer had six months of money in reserve, and that FHA is easing up on their Automated Underwriting standards.  In any case, if FHA is increasing their qualifying ratio's this will open the door for a whole lot more Buyers.  This might have been a fluke, but it will not take long to see if it was or not.  As I Pre-Approve buyers in the future I will be able to determine quickly if it was a fluke or not.  If it isn't, it is going to have a big impact on the number of Buyers that will be able to qualify in the future.

So here we go with the ever changing world of mortgage lending.  Hey I bet that would make a good new TV show :)

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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

When we hear someone say CHFA here in Connecticut, we automatically think Mortgage Program for First First Homebuyers. But mortgages for First Time Homebuyers are not the only programs that CHFA provides. One of those programs that is provided by CHFA that is not well know is “The Emergency Mortgage Assistance Program (EMAP)”. This program offers financial assistance for up to five years to Connecticut homeowners who are going through a temporary financial hardship, who have fallen behind on their mortgage payments, and have been given a foreclosure notice by their lender.

This program does have strict requirements, and was not designed to assist everyone that has fallen on hard times. It is meant for a specific group of people that meet the following requirements:

• The delinquent mortgage must be a non-FHA insured mortgage, and it must be the only property they own.
•  The reason for not being able to make their mortgage payments must be because of an unforeseen financial hardship, which could not have been avoided even if they sold off some of their assets (like a car), and the hardship reduced their income by at least 25%, or their monthly mortgage payments increased significantly.
• They must have received a delinquency notice dated on or after July 1, 2008, informing them that foreclosure proceedings are going to be initiated against them.
  
• Prior to their current mortgage delinquency, they must have a favorable mortgage history with no more than three 30-day late payments for the previous 2 years.
  
• They must have contacted their current mortgage lender or a CHFA approved housing counselor to try to negotiate terms to correct the delinquency of the mortgage. If these negotiations are unsuccessful, or they are successful but are unable to honor the terms because of an unforeseeable financial hardship, then they may be eligible to apply for the Emergency Mortgage Assistance Program (EMAP).
  
• CHFA will then determine if there is a reasonable expectation that they will be able to reinstate their current mortgage payments and have the ability to repay the EMAP money back.
  
• They must be fully discharged from any action of bankruptcy.
  
• All properties must be owner-occupied and their primary residence.
  
• Properties must be:

• Single family homes.
  
• Single family homes located in Planned Unit Developments (PUDs).
  
• Single Family condominiums.
  
• Two-to-Four family homes.

CHFA will disbursement the initial EMAP money to the homeowner’s mortgage lender to bring the mortgage current. The homeowner is then required to pay part monthly mortgage payment to CHFA while they are receiving the Emergency Mortgage Assistance. The amount of EMAP funds paid by CHFA to the current mortgage lender is paid back by the homeowner as a 30-year, fixed-rate, fully amortizing mortgage loan. The homeowner must participate in an annual recertification process while they are receiving EMAP funds, to determine if they are still eligibility for the program, and must notify CHFA if there are any changes in their financial status. The EMAP funds that the homeowner receives are paid back by the homeowner once CHFA determines that they are able to based on their annual review.

As you can see this program is not for everyone that is in financial trouble with their mortgage. But it maybe a available to those who are have fallen on hard times because of an unforeseen financial hardship, like lose of a job, or health.

Those who feel that they qualify for this program should contact CHFA directly and not a Lender. This program is originated and adminstered by CHFA directly. Homeowners can contact the CHFA Customer Call Center at 860-571-3500 or toll free at 877-571-CHFA (2432), for more information.

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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

On Wednesday April 1st Realtors as well as other Real Estate professionals will be gathering at the State Capital in Hartford for the 25th Realtor Day At The Capitol. This event has always been well attended in the past, and it is an opportunity for Realtors from all over the state to raise their concerns to their State Senators, and House Representatives about proposed legislation. By coming together like this Realtors have been able to prevent the passage of legislation that would have negatively affected Buyers and Sellers.

This year as in the past there is legislation that is being proposed once again that would have an negative impact on the Real Estate Industry.  Legislation that Realtor Boards across the state will be apposing include:

• HB 6349 which expands the sales tax to professional services including commissions, appraisal and home inspection fees.
• HB 6397 which creates a new real estate conveyance tax imposed on buyers.
• HB 5560 which would make the temporary increase in the municipal conveyance tax permanent and overturns the sunset scheduled for June 30, 2010.

Legislation that is being supported by all the Boards and that we want to voice our support for are:

• HB 6600 create an affordable Health insurance plan for the self-employed.
• HB 5201 with an amendment that allows homeowners a “foreclosure by market sale” option giving them more opportunity for a fair price than the traditional “strict foreclosure” and “foreclosure by (auction) sale.” The bill also authorizes CHFA to guaranty certain loans under foreclosure if lenders adjust the interest rate to the prevailing US Treasury rate for mortgages of similar term plus 2.5%
• HB 6485 which regulates so-called “short sale consultants.”
• HB 6375 and SB 839 which eliminate or consolidate various State agencies.
• HB 6465, 6466, and 6389 which hold down property taxes by promoting cost-efficient smart growth policies.

The larger the number the, louder the voice, and the higher probability of passage of the legislation that we support, and the defeat of legislation we oppose.

All Realtor Boards will provide transportation to Hartford for those that do not want to drive, please check with you local Board for details on that. This is the one time of the year that we can have a major impact by standing together, let's overflow the meeting rooms at the Capitol and be heard.

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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

It has been a little over three years since FHA made changes to their appraisal process. It is hard to believe that it has been that long, but it is even harder to believe how many people in this Industry are still not aware of those changes.

In January of 2006 FHA finally listened, and made major change to their appraisal requirements, these changes removed many of the obstacles that use to have us all running around trying to correct in the past. With these changes FHA moved significantly closer to being on par with conventional appraisals.

When these changes were made in 2006, we contacted several of our FHA approved Appraisers and met with them all together, at our office, to try to get a better understanding of how they were going to apply these new standards. As a result of that meeting our Vice President of Marketing at McCue Mortgage, Gary Kulik, put together a great piece for us to pass out to the Realtors that we call on and do business with

I blogged about this back when I first joined ActiveRain, but without going into this much detail, in fact it was my fifth blog back on September 28, 2006. I decided to bring these changes to everyone’s attention again, because of what I state before, there are still many in the business that don’t know about this. As much of an effort as we, and others made back then to get the word out, I still run into Realtors on a regular bases that are still unaware of these changes. As a result they are still concerned about Loans that require an FHA Appraisal, and are reluctant about accepting offers from Buyer that will be utilizing a FHA Loan to purchase the property. In these days when Fannie Mae and Freddie Mac have tightened up their guidelines considerably, to the point that it is much easier to qualify for a FHA Loan then it is for a Conforming (Conventional) Loan. Couple that with the recent increase in FHA Loan Limits, which have significantly increased the number of houses that FHA Loans can be done on, it is more important than ever before to make sure that everyone in the Industry is aware of the changes, and remove the fears.

It is important to also point out that these same changes also apply to Connecticut Housing Finance Authority (CHFA) Loans, since they are insured through FHA

The changes to the FHA Appraisal removed many of the repair requirements, and there are very few repair requirements needed any more

Examples of MINOR property conditions that no longer require AUTOMATIC repair for existing properties are:

• Missing handrails, unless it creates a safety problem.
  
• Cracked or damaged exit doors.
• Cracked window glass.
• Minor plumbing leaks (such as leaky faucets).
• Defective floor finish or covering (badly soiled carpeting).
• Rotten or worn out counter tops.
• Crawl Space with debris or trash.
• Minor exterior paint peeling of paint in homes constructed Post 197

Examples of tests that may no longer be REQUIRED:

• Wood Destroying Infestation Report-required if there is no evidence of READILY OBSERVABLE ACTIVE infestation.
• Well (Individual Water Test)-Required if there is no knowledge that well water may be near sources of contamination.
• Septic Test-required if there is no known evidence of system failure.

It is still advisable for Buyers to still do these tests for their own peace of mind, and some of this may be covered or detected by a Home Inspector, but the Buyer now has the option to not do them unless there is knowledge of problems in these areas.

The conditions that still remain and that we have to be aware of and address are those that maybe a risk to health and safety of those occupying the house, or soundness of the property. Example of this are:

• Inadequate access/egress from bedrooms to exterior of home.
• Major peeling of exterior paint on house constructed before 1978.
• Leaking or worn out roofs, (if there are 3 or more layers of shingles) all existing shingles must be removed before re-roofing.
• Evidence of structural problems (such as damage caused by excessive settlement).
• Well and Septic that are less than 50 feet from one another.

I hope that a few that are still not aware of these changes read this blog and become more comfortable with FHA Appraisals. This seems to be a great way to get the word out to a large number of Realtors, than I call on.

To this day I still carry the fact sheet around with me that we developed back when these changes first came out, so that when I run into a Realtor that is not aware of them, I can provide them one. But I hope that those out there that are not aware of these changes will stumble across this blog and that it helps to relieve their fears and concerns.

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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

Sally Cheeseman's latest contest for the "POSITIVE ATTITUDE for the Weary Soul" Group, "Spring Cleaning & Fresh Ideas For Changing Times"! got me to do some spring cleaning in coming up with Spring Fresh Ideas by evaluating how I do business.

Everyone in sales is always looking for a new idea, marketing tool, website, or product that will reach-out to their client base and generate more referrals and business.  I feel that sometimes we spend so much time looking for ways to get more business, that we forget to just stop and ask ourselves one simple little question, "Why Do People Do Business With Me?"  As simple as this question is, there is even a more simple one that we need to ask ourselves in answering it, "Why Do I Do Business With Someone Else?"

If I can answer "Why Do I Do Business With Someone Else?" then it should make sense that others probably do business with me for most of the same reasons.  So over the last couple of days I have been asking myself that question, "Why Do I Do Business With Someone Else?", and it comes down to this for me:

• They are knowledgeable about what they do.
• They inspire confidence.
• They are POSITIVE people to be around.
  
• They go over and above what I would expect.
• They are availability when I need them.
• They always have time for me.
• They do not make me feel rushed.
• They return my calls RIGHT AWAY.
• They treat me with respect even when I ask stupid questions.
• They make me feel comfortable and at ease when I talk to them.
• They can be trusted.
• They have a great attitude.

There are probably other reasons that belong on this list, and those of you reading this please feel free to add them to you comment, but the ones that I have mentioned are big ones for me.  So if these things are so important to me in determining who I will give my business to, should I not also try to project the same to those whose business I am seeking?  The answer is obviously YES!!!  So I have decided to do a truthful evaluation of myself, do I posses these qualities.  If I do I need to make sure that I keep doing them or if possible improve on them.  If I don't, then I need to make it a priority make it one of my qualities, to make it a natural part of how I do business.  I know that it is a little to late for a New Years Resolution, so I will call this my "Spring Fresh Resolution", and one that I WILL KEEP.

I hope that you will also stop for a second while you are going through all those great new marketing tools that you are maybe thinking of using to generate more business, and ask yourself the same two questions that I am asking myself "Why Do People Do Business With Me?" and answer it by asking yourself "Why Do I Do Business With Someone Else?"

NOTE:  The picture of the flowers in the picture are from my front yard.  Even though it is not Spring yet here in Connecticut they must think so, because they are doing everything they can to come up, and make the us feel that Spring has arived.

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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

A regular part of my weekly routine is to stop by Open Houses on Sunday, on my way home from Church. Saturday evening I plan what Open Houses I will stop at, usually three, and the best route to take.  I have been doing this every week since I became a Loan Officer, and it has not only been a great marketing tool, but one that I also really enjoy doing.  Many of the business relationships that I have made with Realtors has been a result of doing this.

Most of the Open Houses are between 1:00 – 3:00 in the afternoon, and this time works out great for me, because I am usually leaving Church around 12:30, so that gives me plenty of time to get to the first Open house before it starts.  This also works out good because it gives my wife a chance to cook our Sunday meal without me getting in the way (I like to pick while she cooks ....... LOL).

I have found Open houses to be a great way of meeting new Realtors, and Realtors that I do not get to catch in the office on a regular bases. Through the years I have put together different things to bring with me to the Open Houses.  Over the past year what I have started to do is to put together what I call and "Open House Survival Kit".  It consists of a bottle of cold water, a bag of pretzels, an energy bar, and a mini candy bar.  I put all of of this into a small bag along with some of my business cards of course.

I have found that the Realtors love these, because a lot of times they are rushing around putting up signs for the Open House and do not get a chance to eat.  The snacks are just enough to hold them over for a couple of hours, and the cold water is a huge hit, especially on those hot, sticky summer Sunday afternoons.  Once I stop by with one of my little "Open House Survival Kits" they do not forget me, and isn't that what marketing is all about, get people to remember your name and what you do.

If you are not doing something that sets you apart and gets others to remember you, I would encourage to do so.  It does not have to be something complicated or costly, in fact it is the simple things that work best.  I know that some Realtors in my area do Pop-bys for their past Buyers.  Whatever it is do something that is not expected, and leaves them remembering you.

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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

Connecticut is an Attorney State, which means that Attorneys are the ones that conduct Residential Real Estate Closings.  This also means that Attorneys besides preparing the Closing Paperwork are the ones that do the Title Search, take out the Title Policy, and prepare the HUD-1.

Here in Middlesex County most Attorneys follow a similar procedure to one another, but when it comes to preparing the HUD-1 and funds needed for Closing, like oil tank adjustments, and special assessments. they do not follow one set procedure.  This can be a problem for those of us who try to give our Buyers/Borrowers a close estimate of what kind of funds they might need when we first meet with them.

Realizing that having different methods of arriving at the Closing Costs on the HUD-1 presents a problem for the rest of us involved in the Real Estate transaction, Attorney's in Middlesex County have decided to get together and come up with one set procedure that they will all follow in doing "Closing Customs".

Many of the Attorney's have already met as a group to start this process, and on Wednesday of this week (March 25th) they are meeting again, but this time they are opening up the meeting to the rest of us in the Real Estate Industry so that we may have an opportunity to give our input.

This is being done with the approval of the Middlesex County Bar, and the meeting will be held at the Middlesex Chamber of Commerce, on Main Street, Middletown, between 9:00 to 11:00.  There is limited space, and they are expecting a large number to attend, so if you plan on attending, call ahead to make sure that space is still available.

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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 Middlesex County Chamber of Commerce will be holding their 25th Annual Business After Hours Taste of Downtown & Auction, on Tuesday, March 24 2009, 5:00pm - 8:00pm at the Sons of Italy Hall in Middletown.  This is a great event to not only help to raise money for the community by bidding on items that have donated by Chamber members, but to also to taste delicious food from 18 downtown restaurants,and network with others in the community.

I have attended this event in the past, and have always had a great time, and made new business connections.  So mark you calendars and plan on coming.  You might even have more fun if you plan on coming with a group of Friends and really make a fun evening of 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

These days with Lending guidelines tightening as much as they have, and so much emphasis on Credit Scores, it is more important than any other time in recent years to make sure that Credit Scores are as high as they can possibly be.  These days Credit Scores are playing a major part on how much money a Borrower will have to come up with at Closing.  If the middle Credit Score is under 740, and the Borrower does not have 20% to put down on a house, they will have to pay points.  This is not being imposed by Lenders, it is being imposed by Fannie Mae, and Freddie Mac on loans backed by them.  So not having Credit Scores in the upper 700's could prove very costly to a Borrower.

That is why it is important for anyone looking to purchase a house in the near future to contact a Loan Officer see what their Credit Scores are.  I know that these days there are a million companies offering free credit reports that you can pull yourself, but these are consumer reports, not mortgage reports, and they do not tell you how you can correct things that you may find, or how to improve your Credit Scores.  By having a Loan Officer check your credit, you will eliminate surprises when you are ready to purchase a house, and if Credit Scores are low, or not high enough, the Loan Officer can tell you what needs to be done to bring them up to where they need to be.

There are three major things that have the biggest impact on your credit.  They are Credit History, Years of Credit, and Available Credit.  The first two relate to time, and will take time to have for them to correct or improve a Credit Score, they are:

• Credit History:  Which represents 35% of a Credit Score, and it is the history of how well you have paid your bills during the time you have had credit.  However, late payments, charge offs, or collections that are over two years have very little impact on a credit score.  In fact it is better to not pay off a collection that is over two years old, because that could actually bring down the score.  That is because it will bring the last reporting date current again, and will now be reported as a late.
• Years of Credit:  Also know as length of credit.  This simply is the number of years that you have had credit, the longer the number of years with good credit the higher the score.  This represents 12% of a Credit Score. 

The third thing that has a major impact on a Credit Score, is something that can be adjusted or corrected quickly, it is:

• Available Credit:   Available Credit is just what it says, it is the amount of credit that is available to you.  For example the number of credit cards you have, and how much of the credit limit on the cards are still available to you.  If you are over 30% of the available credit on a credit card it has a negative impact on your credit.  If you are over the Credit Limit it has an even bigger negative impact on your credit.  So a quick way to improve your credit is pay down your credit cards to less than 30% of the Credit Limit.  This has a huge quick improvement on your scores, and it represents 30% of your Score.

So as you can see, by contacting a Loan Officer an reviewing your Credit Report with him/her you will not only be able to see where you stand, but also receive the necessary help if your Credit is in need of improvement.  One final point, closing out unused credit cards does not help your credit.  You are better off keeping them open, because it adds to your available credit.

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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