Justin McHood

About Justin McHood

Justin McHood can be seen talking about mortgages on many of the nation's leading real estate and mortgage sites. Some of his most recent work can be found on BlownMortgage.com

HARP Refinance Program Extended Until 2016

May 15, 2015 By Justin McHood

Somewhere in the neighborhood of 600,000 homeowners may be interested in the announcement by FHFA head Mel Watt last Friday in California. In a prepared statement he gave at the Greenlining Summit, he announced that the HARP and HAMP programs would be extended through December 31, 2016 (currently they are set to expire at the end of 2015) and that many people who could benefit from getting HARP approved still haven’t done so.

From his remarks:

In the meantime, we want to encourage the 600,000 plus borrowers nationwide who would still benefit from the HARP program to take advantage of HARP while they still have the opportunity to do so and while interest rates remain low. Approximately 31,000 of these borrowers are right here in California, and we want them to join the nearly 3.3 million borrowers who have already taken advantage of HARP to reduce their monthly payments and obtain some financial relief.

Who Holds Your Mortgage?

If you are interested in the HARP program, one of the first things you want to do is figure out if your loan is backed by Fannie Mae or Freddie Mac. Both have tools on their websites to see if they own your loan.

To see if either one holds your mortgage, first check Fannie Mae. If they don’t have your mortgage there, then check Freddie Mac.

If you currently have an FHA loan or VA loan, the bad news is that you won’t be eligible for the HARP program – but don’t worry, there is good news. The good news is that there are refinance programs available to help you called the FHA streamline and the VA streamline that are designed to help you get a lower interest rate and have more flexible guidelines than conventional loans.

HARP: Refinance While Rates Are Low

The Home Affordable Refinance program was announced by President Obama in March of 2009 and it has become one of the most popular refinance programs in the last couple of years for people all across America.

HARP 1.0 program had modest success due to loan-to-value restrictions and was modified to HARP 2.0 in 2011 when it was announced that loan-to-values could be higher than 125%. Currently, there are multiple lenders that will do a HARP refinance with an unlimited LTV – which means it doesn’t matter how far under water your home is, it will not be a determining factor in qualifying for the HARP program.

Interest rates are at historical lows, and it is probably safer to say that they will rise in the future vs. go down. The real question is “how long before they rise?” HARP has been available for people to refinance for a few years now and while somewhat surprising that even though millions of people have already refinanced under HARP, there are still hundreds of thousands who haven’t.

View for source.

HARP Resources

Thinking that you may want to beat the deadline and see if the HARP program is for you? Here are just a few resources that can help you:

Official announcement

Making Home Affordable official site

Fannie Mae lookup tool

Freddie Mac lookup tool

Get a free HARP mortgage quote

9 Places You Won’t Find Your Loan Officer

November 6, 2012 By Justin McHood

Occasionally I hear people complain that their loan officer is nowhere to be found.

“Really?” is my usual response when I hear them tell me how their loan officer is MIA and how they need to get in touch with them immediately.

I think that normal people who can’t find their loan officer must just be looking in all the wrong places, you can start by looking for bad credit loans with guaranteed approval.

If you are looking for your loan officer, here are 9 places that you don’t have to look – because the chances of finding them at any one of these are extremely low. Then if you are looking to let property you need to make sure that you get the very best letting agent like this one in Bristol so that you get the best service and return on your property letting.

#1. Their Office

Sure, all the loan officers have an office, but you might be surprised at how little time they spend there.

If the building janitorial service didn’t come through once a week (at least), chances of finding dust on their desk would be high.

#2. Someone Else’s Closing

Occasionally, I hear someone wanting to give a loan officer the benefit of the doubt and say something like “oh, they are probably in a closing and can’t answer the phone …”

Uh, no.

You might find your escrow officer in a closing, but a loan officer?

Riiiight.

#3. Your Realtor’s Office

Skip it.

Although Realtor’s offices usually have doughnuts in the front that a title rep dropped off, few Realtor’s are actually in the office like you may expect.

And the chance that your loan officer is actually in your Realtor’s office?

Minuscule.

The smart money says that your Realtor is probably looking for them too.

#4. Taking Someone Else’s Loan Application

Like at someone’s house or place of business talking to them about qualifying for a mortgage?

Uh, nope.

Most loan officers have assistants who do this stuff nowdays. Too much paperwork stuff to be bothered with.

#5. At Home

If you call their house, chances are that their wife or girlfriend is looking for them too and you are immediately going to be assigned to let them know when you find them to have them “call home immediately”.

Do you want to be turned into a messenger service for wives and girlfriends?

I didn’t think so.

#6. Driving

The reason you won’t find your loan officer driving is that it is hard to hear the phone ring when the top is down on the convertible and AC/DC is blaring so loud normal people’s eardrums become ectoplasm.

There is a small chance that you may catch your loan officer driving, but you will need to drive all of the “wrong roads” in the off chance you will pull up next to him at a red light and honk loud enough for him to hear.

Not worth the investment when gas is $4 / gallon.

#7. At Lunch With a Title Rep

Ok, this one is possible – and the chances go proportionately higher with the scale of attractiveness of the title rep.

The problem here is that finding a loan officer with a hot title rep is going to be difficult because they are deft at making sure #5 doesn’t know that #7 is happening.

So if you want to find them here, it will help if you turn your brain upside-down and think like a skulker.

#8. At The Apple Store

Most of the computer programs that loan officers use require Windows and won’t run on Macs.

See?

There is a reason Microsoft is still in business.

#9. At a Real Estate Industry Happy Hour

The truth on this one is that this is actually not a horrible place to look, because these events center around alcohol and loan officers gravitate to a good party like geese to water.

The problem with looking at a real estate industry happy hour is just that – somewhere that is packed with real estate people.

Show up at one of these and expect to get overwhelmed with small talk, business cards and offers for a free CMA (what is that anyway?) Also be prepared to hear something similar to “if you know of someone who wants to buy a house, you can get a free Home Depot gift card for a referral …” about a hundred times.

Gag.

Not worth the effort.

Ok, so … now you know where not to look.

If you can’t find your loan officer in any of these seemingly logical places to look, where exactly can you find them?

I’m not telling.

It’s our little loan officer fight club secret.

And the first rule of fight club is that you don’t talk about fight club.

Thinking about buying a house or refinancing your current one and need a good referral for a loan officer that is easy to find? The easiest way is to get a referral from your Realtor. They usually have some of the inside scoop on what goes on at loan officer fight club gatherings.

Photo from Flicker by jpellgen

Arizona HARP Refinance: Is It a Good Option For You?

July 13, 2012 By Justin McHood

The Home Affordable Refinance Program was first announced in 2009 as a way to help underwater homeowners refinance their homes and hopefully stimulate the economy. After HARP 1 didn’t go as well as hoped, the HARP program was modified and labeled HARP 2.0 early in 2012. While HARP 2.0 is helping more homeowners than HARP 1.0 did, there are still millions of homeowners left out in the cold when it comes to home refinancing and taking advantage of lower interest rates. As a result of these left-out homeowners, talk of HARP 3.0 is growing louder and louder and it may soon be announced.

Click here for a free HARP rate quote.

When talking with someone who is potentially interested in a HARP refinance, I usually try to bring up 2 points:

Not all Arizona HARP lenders are created equal
Does a HARP refinance make sense vs. a short sale?

HARP Lenders in Arizona: Not All Lenders are Equal

When it comes to working with a lender to find out if you qualify for the HARP refinance program, keep in mind that not all lenders are created equal when it comes to the HARP program. Quite a few lenders are not actually doing HARP loans, but they broker them to other lenders who can do them.

Example: Academy Mortgage is not actually funding HARP loans, but the loan officers here can still help you with your HARP refinance by funding it through another bank.

Brokering a loan is neither good nor bad, but as a consumer you should just be aware that when a loan officer brokers a file, it often means they don’t have as much control over the file which might cause a few more bumps along the way. The best way to know what bumps are common when brokering a file is to ask a financial expert at OP.no when completing the application.

Click here for a free HARP refinance quote.

HARP Refinance: Does It Make Sense?

For homeowners living in the Phoenix market, many areas have seen significant price increases in the last 12 months. Supply is short and demand is high – and many people who were once deeply under water are now at close to break-even or maybe even have an increase in their property’s equity release costs.

This recent trend in rising home prices is working to the advantage of anyone considering a HARP refinance because as property values rise, a short sale (the other common alternative to a HARP refinance) becomes less and less attractive.

So when asking the question “Should I do a HARP refinance or just short sell this house?” keep in mind that property values are rising and from what I can may continue to rise through at least 2013.

If you are are in the situation where the interest rate on your home is higher than 5%, be sure to ask your loan officer and/or Real Estate Agent what the pros and cons of a short sale vs. HARP refinance are.

Click here for a free HARP rate quote.

Canadian Citizen Financing Options in 2012

June 15, 2012 By Justin McHood

Here in the Phoenix area, pretty much any lender can help you get a property financed if you are a US citizen and can meet the qualification criteria. A quick-and-simple overview of what loan options are available for US citizens include:

FHA loans – popular with first time home buyers and people who have less-than-perfect credit. Generally speaking, you will need higher than a 620 credit score and have a 3.5% down payment.

VA loans – popular with Veterans because of the zero down financing option, no monthly mortgage insurance and flexible guidelines.

USDA loans – popular in places like Queen Creek because USDA loans are only available in certain areas that are designated “rural” and they offer 100% financing.

Conventional loans – Popular with people who have good credit and are looking for the lowest possible rates.

Jumbo loans – Any loan that is over $417,000. Jumbo loans require great credit and a healthy down payment.

In addition to these types of loans, there are any number of niche programs that are also available for financing, but the common requirement to each of them is that you must be a US citizen to qualify.

What if you are from Canada and are interested in buying a second home or possibly even relocating to Phoenix – are there financing options available?

Yes.

Canadian Citizen Financing in 2012

Finding a lender in Arizona that finances Canadian citizens isn’t all that easy – but it isn’t impossible. Here is a general overview of what you can expect regarding guidelines for Canadian citizen financing with just one large lender with loan officers here in Phoenix.

General Guidelines For Canadian Citizen Financing:

15,20,25 and 30 year fixed rate terms available
5/1 adjustable rate terms available
$50,000 minimum loan amount
Will loan up to 75% for both purchase and refinance transactions up to $1,000,000
No prepayment penalties
Borrowers must have a checking account with the lender or open an account prior to closing
Loans over $1,000,000 require one full appraisal

Eligible Property Types For Canadian Citizen Financing:

Single family residences
PUDs/CONDO must meet FNMA/FRMC guidelines
Non-warrantable condos must have an LTV of 70% or less
Property must be located in a market area served by a retail bank branch

Canadian Citizen Documentation Requirements:

2 years Canadian T1, T2’s and/or T4’s.
Business balance sheet and income statement (if applicable)
Passport
60 days of bank statements
30 days of paystubs

Canadian Citizen Financing Contact Information

Have more questions about your particular situation? Here is contact information for the best loan officer I know who can help you with Canadian financing.

BBVA Compass Apply Online
David Rush
[email protected]
Mortgage Lending ”“ Mortgage Banking Officer II – NMLS# 512541
Mobile 480-254-6974

Biltmore Office
2850 E Camelback Rd Ste 170, Phoenix, AZ 85016

Photo Credit

What To Expect After a Short Sale

May 21, 2012 By Justin McHood

A wise mentor of mine once taught me this concept:

Crisis + Time = Humor

Over the last few years, more than just a few homeowners have went through the short sale process – and from what I can put together, there will be people trying to decide whether a short sale is right for them for years to come.

For better or worse, I happen to be an expert on the subject of “what to expect after a short sale” because it was about 2 1/2 years ago now that I finalized a short sale after not making a mortgage payment for a year.

Now that I am an expert? Here are a few simple things of what you can expect after a short sale if you have missed 12 payments on your mortgage leading up to the short sale.

(Are you following Thompson’s Realty on Facebook? You should be… Click here)

Expect Your Credit Card Companies To Cancel Your Account

You should expect your credit card companies to cancel your credit cards. At the time of my short sale, I had 4 cards with the following credit limits:

Bank #1 – $50,000 limit
Bank #2 – $40,000 limit
Bank #3 – $35,000 limit
American Express – $12,500 limit

My personal credit card spending always has been fairly high each month because I run quite a few business expenses and collect frequent flier miles. Historically, over the last 10 years or so, I probably charge on average $10-$30k per month and generally don’t keep a balance.

Right after my short sale, I got a notice from American Express that my account was being cancelled. I can’t say that it was unexpected – but I can say that they were the only company who cancelled my credit line – which leads me to the thought:

American Express can kiss my ass.

(Yes Justin McHood talks like that often, follow him on Twitter and see.)

The topic of customer loyalty and what makes people stick with you or abandon you as a company is a topic I don’t have room to ramble on about in this post, but I’ll just leave it for now with the statement that automated decision making can sometimes backfire on you.

The banks who didn’t cancel my card?

I am now a customer for life and happily in their “elite status” group of people who moved more of my assets under their management for the simple reason that they stuck by me when I needed them.

When short selling your home, expect your credit card companies to cancel your account. True, they may not – but expect them to.

Expect To Get Divorced

I was married for 17 years and short selling a house was the straw that broke the camel’s back so-to-speak.

I can’t say I didn’t see it coming – but if you are married and having trouble, don’t expect a short sale to help your relationship.

The reason you should expect to get divorced in my opinion is if you expect it to happen and it doesn’t – well, lucky you.

Every situation is different, but if you are reading this and you know that you already have fissures in your marriage, expect it to fracture completely around the time you short sell your home.

The reason?

When you two people are going through a financial trough, it just seems easier to split it all up than it does when you are on top of the world.

Again, just my experience – and it may or may not apply in your situation.

Expect To Have Housing Options

I actually bought a house in the same subdivision the exact same day that I short sold mine.

How?

Seller financing.

Lucky? Maybe. Possible? Absolutely.

The most common expectation that many homeowners have when short selling a home is that they will be renters for at least 2 years before they can qualify for a mortgage again.

Not true.

People are getting mortgages right after they short sell a home through various loan programs.

Sure, they may not be FNMA or FHA mortgages, but it is certainly possible to buy a home 1 day after a short sale if you have seller financing and it is even possible to get a USDA or FHA loan under certain circumstances.

If you are interested in buying a home right after a short sale, the most important thing you can do is to continue to make your payment right up until the end.

Expect To Have Legal Troubles

If you have short sold your house, expect the bank to try to come after you at some point. For something.

Will they?

Maybe, maybe not.

In my case, I wasn’t too worried about this because I hired the best mortgage lawyer (in my opinion) to advise me through the short sale process.

If you are considering short selling your house, I can’t recommend enough that you retain legal counsel to advise you through the process.

It has been my experience that there is nothing more expensive in life than cheap legal advice.

The Last Laugh

Two and a half years after a short sale, I can’t help but feel like smiling at what was one of the most awful situations I have been through in life. Many others I talk to feel the same way.

Maybe that old wise man was right when he said “crisis + time = humor”.

The only group of people who seem to have found more humor than I found?

Those who made the decision to buy and bail.

They have managed to find a solution to the problem of negative equity – while the homeowners who have elected to stay in their homes and continue making payments even if the home is worth 50% less than what they paid for it are still looking for an alternative solution.

What should you expect after a short sale?

It has been my experience that life has a lot more humor to the awful situation of short selling your home the more time that passes.

Disclaimer: Thompson’s Realty is not a law firm, and a law firm is *exactly* who you should be consulting with prior to entering into a short sale, default, foreclosure or any other form of default / breaking of a contract. ANYTHING can happen and every situation is different. TALK TO AN ATTORNEY.