George's Blog

Yesterday I wrote a blog on the new policy that was just announced by HUD for the $8,000 Tax Credit, in their latest Mortgagee Letter "MORTGAGEE LETTER 2009-1.  In it I advised everyone to read it for themselves and become familiar with it.  What I did not do in my blog yesterday was to further advise everyone to caution their clients about the SCAMS that will most likely emerge as a result of this latest change.

We have seen SCAMS pop up for everything prior to this, and I have no doubt that new SCAMS will pop up with creative ways to take advantage of those who do not follow sound advice, and would rather listen to those who will tell them what they want to hear instead.

• We have seen SCAMS devised to take advantage of those who are trying to refinance out of high interest loans. 
  
• We have seen SCAMS devised to take advantage of those who have fallen behind on their mortgages and are being promised loan programs that they can't possibly qualify for.
  
• We have seen SCAMS devised to take advantage of those who are trying to Modify their present mortgage.

So why would we not expect the Con Artist to come up with ways to make money off of this latest change to the $8,000 Tax Credit that is prime for the picking.

Make sure that your Buyers/Borrowers are dealing with reputable Lenders and Banks when it comes to this.  They need to stay away from Internet Lenders that no one has heard of.

It is likely that very few Lenders and Banks will participate in this program, because most are not set up for doing Bridge Loans, which this will be a form of.  I have not heard of anyone that has even considered participating in making these advances on the $8,000 Tax Credit available.

So as they use to say on the TV program Hill Street Blues "Lets Be Careful Out There"

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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

FHA issued MORTGAGEE LETTER 2009-15 today, once again making a provision or provisions for the $8,000 Tax Credit (Gift) to be received before the Closing on a property.

Now before anyone gets to excited about this, like many did before, you really NEED to read the entire Mortgagee Letter, once you do, you will most likely not be as excited about this provision.  There are several catches, and I really don't know if eligible lenders are going to get on board with this.

The new provision while allowing for the $8,000 to be received in advance, does not permit it to be used for the initial 3.5% downpayment.  It can be use as an addition to the 3.5% downpayment and or Closing Costs.  I personally do not see this as any advantage, and certainly not worth the extra paper work and liability that will be involved.

Why use the $8,000 to increase your downpayment when all that is going to do is reduce your monthly payment by about $5.50 to $6.00 per thousand.  And why use it for closing costs when you can negotiate with the Sellers for them to pay Seller Paid Closing Costs.

To me it is far more advantageous to receive the $8,000 the way it was originally intended to be received, and use it for repairs or upgrading the property.  That has far more value in my opinion than using it in for additional downpayment or Closing Costs, and this is again if you can even find a Lender that will participate, and make the money available in advance (at a cost of course).

Again I want to highly recommend that you read MORTGAGEE LETTER 2009-15 for yourself in its entirety, it is not hard to understand, just click on the link,

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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

In the beginning of the month I wrote a blog "Appraisal Issues Continue To Be Big Problems!!!".  In the blog I gave an example of a loan that I was presently working on, and the appraisal issues that I was have with it.  It was one of those loans that the Buyer was not the problem, they had excellent credit an income, but the property had major issues.

I closed the blog by saying that I would report back on the outcome.  Well I am happy to report that the loan closed yesterday, and I now have two extremely happy Borrowers.

We were able to get the house changed to a single family residence, witch allowed it to be able to comp out for the sales price the the Sellers needed to be able to sell for, or they would have been upside down on the property.  And my Borrowers were able to get a property that they loved, and fit them and their life style.

Not all of these situations are happy endings, but this one certainly was.  Now if I can just get my CHFA/VA Loan that I also bloged about to close, I will be a very happy camper.  Stay toned for the results on that one.

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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

Most will associate the term "Be Prepared" with the Boy Scouts, and it is a term that I am very familiar with since both my sons are Eagle Scouts.  But these days this term has taken on a new meaning for me with all of the changes and challenges that we are facing in the Real Estate Industry.  These days we in the Real Estate Industry need to adopt this term for ourselves as well.  In some regards we have always had to "Be Prepared" in Real Estate, because of the possibility of last minute things popping up, but lately the need to "Be Prepared" has increased significantly.

With the constant changes in loan program guidelines, appraisal issues, and PMI requirements we have to not only be ready to act immediately, but to also anticipate any and everything that could developer during a transaction.  As if these things did not present a big enough challenge, we now also have the increased challenges of foreclosures, and short sales.  The number of foreclosures and short sales, have made these transactions extremely difficult in many cases.  I am going through a foreclosure transaction right now that I have already written about, and will write about again later in the week, that has truly given new meaning to "if it can go wrong, it will go wrong".

Many of the problems that we are facing today is in my opinion, because we were not ready for the number of foreclosures and short sales that have come on the market, and as a result not staffed adequately to handle the work load.  In other words, we were not prepared, and now need to turn that around.  That will take all of us on every side of a transaction to do that, and each and everyone has to prepare their clients for what could possibly happen along the way.  This means that they as well as we have to "Be Prepared". Anticipating what could happen in a course of a transaction, and being prepared to address it, will eliminate most of the problems, and a well prepared Buyer/Borrower will be a much happier client in the end.

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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

Yesterday I commented on a blog that Donna Bigda wrote on Condominiums, and she suggested that I add a couple of links for Buyers to have as a resource.

The comment that I made was that most Condo Loans that I do are for First Time Homebuyer, and that FHA and Connecticut Housing Finance Authority (CHFA) are the two main loan programs that I use for them, because most First Time Homebuyers do not have much money to put down on a house or condo.  I also suggested that if a Realtor is working with a Buyer that will be using one of these two loan programs, that they need to make sure that the Condo Complex is on the Approved Condo List for FHA and/or CHFA. 

This is very important step in purchasing a Condo with either of these two loan programs, because if the Condo Complex is not on their approved list, you might not be able to do the loan.  I say might, because even if the Condo Complex is not on their approved lists, a "Spot Approval" may still be possible.  The main obstacle that I find with being able to do a "Spot Approval" is that many times a Condo is not on these approved lists, because they either do not meet the Investor to Owner Occupied Ratio required, or the Condo Association By-Laws contains a "Right of First Refusal Clause".  Both of these are like the kiss of death in obtaining a "Spot Approval" The Investor to Owner Occupied ratio that is required is 51%.  That is 51% or more of the units need to be occupied by owners.

If a Borrower is trying to do a CHFA Loan on a Condo, both CHFA and FHA Condo lists need to be checked, because CHFA is a FHA insured loan, so the Condo Complex needs to appear on both list.  This may seem like a simple process, and it is, but it is amazing how often no one checks these list, and then finds out after they make an offer that they have a problem. 

Below are the links for these to lists, I would suggest that anyone reading this bookmark these two sites for future use.

CHFA Approved Condo List

FHA Approved Condo List.

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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

Most of us who have been in this business for a while, and plan on being around for a lot longer, pride ourselves in providing our Clients with great service.  Up until a couple of years ago I thought that providing great service was good, that is until I read a little book by Ken Blanchard and Sheldon Bowles "Raving Fans".

As I was reading this book it became very clear to me that just providing great service is not good enough.  That if I wanted to set myself apart from everyone else that also provides great service, that I had to create "Raving Fans"

Creating "Raving Fans" is not easy, but if you do people will seek you out because of it.  Creating "Raving Fans" is not about price or rate, in fact if you create "Raving Fans" price and rate become a very minor consideration, it it is even a consideration at all.  Creating "Raving Fans" is about creating a one of kind experience and service.

After reading this book, which only took me a couple of hours to read, I realized that even though I was providing great service to my Borrowers, I was not providing "Raving Fans" service.  Since then I have tried to change that, and even though I am not there yet, I am making progress to achieve that.  As a result I have noticed a difference between the Borrowers that have done business with me during that time and those that have not.

Borrowers that have not done business with me, and who were NOT referred to me by those that have, their first questions is usually "what's the rate".  Those that HAVE done business with me during that time, or have been referred to me by those that have done business with me, the rate question does not come up in the conversation until we are making a decision on what rate to lock at.  It is not a question of whether, or not they are going to do business with me, because they made that decision when they picked up the phone to call me.  And that is the message that this little exceptional book projects, and does an excellent job of demonstrating.  It made a believer out of me.

So if you pride yourself on provide great service, do yourself a favor, and read "Raving Fans".  Once you have you will not be satisfied with just providing great service, you will strive to provide "Raving Fans" service.

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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

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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 don't know about everyone else but for the last two months I have been busier than I have been for a long time.  In fact the month of April was one of the best months that I have ever had.  I have been so busy that it has been hard to keep up with all of the Pre-Approvals, and Loans that I have doing, and I have had very little time to do other things that I know I need to do. When times are busy like this it is is easy to begin to take for granted that it will continue, and get comfortable with just waiting for the phone to ring.  But in reality it is when times are busy like this that we should be most concerned, and do what we need to do to keep the phone ringing, and not take for granted that it will continue to ring by its self.

This leads me to the title of my Post "Who Moved My Cheese?".  For some of you this may be a familiar title. because it is the title of a book by Spencer Johnson, M.D.  I have been thinking about this little book lately because its message is very relevant to what I am experiencing right now.

"Who Moved My Cheese" is about four characters Sniff & Scurry and Hem & Haw.  Sniff & Scurry are two little mice, not to smart, but rely on their senses to survive.  Hem & Haw are two special little people who are no bigger than the mice, but have very complex brains that enable them to analyze everything.

All four lived in a Maze in which there was all sorts of cheese stored.  The four of them found a part of the maze that had so much cheese that it seemed that it would never run out.  All four settled in to a very comfortable daily routine, getting up in the morning and going to were their pile of cheese was.  It was just expected that it would always be there, and that they were set for life.  That was until one morning when they got up and went to eat some of their cheese and it was all gone.

Now Sniff & Scurry the not so smart mice who relied on their instinct, had been noticing that the huge pile of cheese had been slowly disappearing, and figured that they would have to find a new pile of cheese soon.  But Hem & Haw with their complex brains, who had just taken for granted that the cheese would always be there, had not.  So when each pair arrived that morning and noticed that there was no more cheese, Sniff & Scurry moved on quickly to find a new supply of cheese, they explored new parts of the maze until they found a new supply.  But Hem & Haw did not, they just sat around complaining that their cheese was gone.  They were unprepared for what had been slowly happening, and were unwilling to explore and find new cheese.

I am going to stop here in my recap of the book, and let you pick up a copy of it for yourself if you are interested in finding out what the outcome for the four of them.  But I do want to tie this story in with the times that many of us are going through right now.

Now is not the time to relax and assume that business is going to continue like this.  That the phone is going to keep ringing and all that we have to do is pick it up.  Now is the time to be looking for ways to keep the phone ringing and keep the source of our "cheese" fresh.  Now is the time to make sure that we make time to do the things that caused the phone to ring in the first place.  If we don't, we like Sniff & Scurry, and Hem & Haw, will get up one morning and wonder where has our cheese has gone.

The question is when that day comes, will we be prepared like Sniff & Scurry to move on and find a new source of cheese, or will we be like Hem & Haw and not know what to do, and just sit around complaining about it?

****************************************************************************************************************** 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

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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 Chamber of Commerce Business After Hours is coming up soon, and this timeit is an event that the whole family can enjoy.  The Chamber has planned a evening of fun at the New Britain Rock Cats Stadium on Tuesday June 9th.  The event will start at 5:00 p.m. with hot dogs and hamburgers as well as time to network with those their, and then followed by a baseball game.

For those of you who have never been to the New Britain Rock Cats Stadium, it is a great place to watch a game, there isn't a bad seat in in the stadium. The stadium is also very easy to get to since it has it's own exit right off of RT 9.

Take advantage to this to spend time with the family, watch excellent quality minor league baseball, and network at the same time.  Opportunities like this don't come around often, so plan on taking advantage of this one.

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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