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Fernon Meeks talks about HUD 203(k) 203(b) and Good Neighbor programs

BrokerIPTV: Today we are talking with Fernon Meeks from AXIS Title. The owner and the subject is different types of financing with HUDs. You specialize in HUDs at AXIS Title. So, tell me about my financing options?

Fernon Meeks: Well, if you are going cash, that is always nice and easy. You can go conventional, VA, but if go FHA, there are a couple of different options. One of those is the FHA 203(b), which is the standard FHA loan, which FHA as of today, they have a great $100 down program, instead of 3%, they can go $100 down. They have a 203(b) with repair escrow, thats where FHA will allow a specific amount to be added to the loan amount for repairs that HUD has already established and you can see that on the listing or FHA 203(k), which is a HUD loan where they are financing in some repairs into one loan, into one mortgage.

BrokerIPTV: Okay, explain as is versus list price.

Fernon Meeks: As is, is the price HUD has determined the property, has appraised for. They have hired and FHA appraiser to go out and appraise the property in an FHA 30 day as is value. So, something that is going to price well and sell in as is condition. And then the list price is what it is currently listed at, when they first hit the market, they are the same price, 45 days later if there hasn't been a bid, they will reduce the list price 10%, but the as is price what that appraisal is is still the same.

BrokerIPTV: What if the buyer wants to get money from FHA to fix up the place that they haven't already deemed in the little report about what needs to be repaired?

Fernon Meeks: Okay, the report you are talking about is when it's a 203(b) with repair escrow. If they want money in addition to that, it would be the 203(k) and there is two programs, one is the streamline 203(k), anything from a dollar up to $35,000 and then the conventional 203(k) program FHA, there is no cap on repairs.

BrokerIPTV: And it could be cosmetic?

Fernon Meeks: Absolutely, it could be cosmetic, sure.

BrokerIPTV: Alright, what about the Good Neighbor Next Door Program?

Fernon Meeks: Great, great program, great program. 50% off, its a great marketing tool also for agents, 50% off of the list price. So, if a house is listed for 200,000, the Good Neighbor Next Door Program, if you qualify you have to be a police officers, a fire fighter and EMT or a teacher working full time in the area that they service buy house and it is home listed under special section on MCB (Michaelson, Connor & Boul) website, but they 50% off, so if its $200,000 home, they can get $100,000. There is a $100,000 silent second that would be recorded against the property.

BrokerIPTV: Last one, I am just throwing this in, have you seen a HUD that really has been in great shape and not trashed?

Fernon Meeks: I have, I bought some for myself.

BrokerIPTV: Have you?

Fernon Meeks: Yes, absolutely.

BrokerIPTV: So, they exist?

Fernon Meeks: Carpet, paint, appliances, it just depends on the person who was living in there prior, a lot of people really had pride in their house, unfortunately they lost it.

BrokerIPTV: Fernon, thanks.

Fernon Meeks: Thanks for having me.

BrokerIPTV: Terrific information, I appreciate that.

Fernon Meeks: Thank you.

Mortgage Fraud-Number One Investigation For Real Estate Commission's Marcia Waters, DORA which is the Department Of Regulatory Agency for Real Estate.

BrokerIPTV: Today we are talking with Marcia Waters, Investigations and Compliance director with the Division of Real Estate for Colorado, welcome to the show.

Marcia Waters: Thank you Dan.

BrokerIPTV: Glad you are here. Well, lets talk about what you do - complaints and investigations. First complaints, I guess about realtors.

Marcia Waters: Exactly.

BrokerIPTV: And they are? <read more>

Read more »

BrokerIPTV: Today we are talking with Pete Lansing, President of Universal Lending. Pete thanks for being with us.

Universal Lending's Pete Lansing says sub prime is out and FHA is in

Pete Lansing: You bet.

BrokerIPTV: I appreciate you be in here. The topic is FHA. They seemed to be very popular and in vogue again, why is that?

Pete Lansing: Well, I think mainly because the subprime market has gone away. The reason the subprime market took FHA away form us in the first place is that there wasn't a down program. It was easier to qualify, we were utilizing tools in the industry that really FHA became second to, compared to what it is now that the subprime has gone away. So, with the fact that there is a down payment program and that there is the ability to be able to do such a low down payment, easier to qualify FHA, certainly around nation has come back to be probably the number one lending program.

BrokerIPTV: Is FHA I mean whats so great about it and what is not so great?

Pete Lansing: Well, this is a government insured program. One of the best parts about the fact that it is a government insured program is that gives liquidity to the investor base keeping interest rates low. If there is a down side to FHA, it has do affect that you have to qualify, you do have to follow the insuring program and guidelines of the FHA. I don't think that specifically bad, but there are some people that have been in the real estate industry that really don't even have or have never done that before and now they are following those guidelines, only negative is that there is some limitation to how much you can barrow.

BrokerIPTV: In some limitation and whether or not the property even qualifies for an FHA loan?

Pete Lansing: That's true. FHA would look at the ability to have a good property. They will ask the lender and appraisers do a review and make sure that it meets up FHA guidelines as a qualified property.  

BrokerIPTV: Right, who should be looking at FHA, who should not?

Pete Lansing: No question about it, first time home buyers should be looking in to the FHA program.

BrokerIPTV: Finally, a rumor circling around may be reducing the down payment minimum from 3% to 1½%, is that do you think coming down the pike again for the government trying to stimulate the buying and the using of FHA?

Pete Lansing: Very possible and it is in the FHA bill that right now congress is talking about, both in the senate and in the house are discussing it. they are negotiating and we never know it that negotiation is going to allow us to have lesser of a down payment or not, but it certainly has been a discussion in congress and that would be a sure possibility disseminating even more FHA, if the normal down payment would drop from 3%, so the lower number of 1 and 1½% that we have been told of that

BrokerIPTV: Pete thanks, great information and I appreciate it.

Pete Lansing: Glad to be here.

BrokerIPTV: We are talking with Pete Lansing today, President of Universal Lending. Pete thanks for being with is, I appreciate it.

Pete Lansing: I am glad to be here.

BrokerIPTV: Talking about FHA in HUDs and a lot of people have interest in this now for obvious reasons, but buying a HUD with FHA financing can be tricky, what do people need to know?

Pete Lansing: Well the most important thing is that people get their client and the consumer needs to be pre-qualified. So there is no question in HUD's mind with regards to "can you purchase this home?" The contract is very easy to do, the down payment is very easy to do and of course you want to make sure that you got proper housing inspections and appraisal has been done by HUD, so it almost makes it easier then any other type of loan program out there. 

BrokerIPTV: Yeah. Just mention a couple of FHA programs that go hand-in-hand with buying a HUD? 

Pete Lansing: Really the one that we are seeing a lot of is the good neighbor next door program, which is be fire, police, teacher or so on. 

BrokerIPTV: If you are one of those people? 

Pete Lansing: Correct, and I think the one that is most popular even connected to that is the FHA 203(k) program. So we are seeing 203(k) flourish, we are seeing the neighbor next door and another program that's of course a reverse mortgage program or another FHA program is the research mortgage program and we have a lot of success with that with people that are 62 years and older. 

BrokerIPTV: Is FHA the closes things we are going to see to 100% financing or will 100% financing come back again? 

Pete Lansing: I don't see that happening in the near future and the reason I say that is the liquidity of them markets have to do with what was put into those mortgage back securities. The investors are very stilted with what is happening with regards the foreclosure, they are not from receiving, they are principal back like they were excepting to the mortgage backed securities, the people that were doing 100% loans, put those into other loans or other packages that may not have been in there. Not only we have seen the end of that yet, but the FHA program is probably the closest we will see except your traditional VA loan program to a 100% financing. 

BrokerIPTV: I am glad you brought the VA up, because FHA has gained popularity, we hadn't seen a lot of VA loans, but not that is going to gain popularly, not that it has anything to do with FHA, but...? 

Pete Lansing: It really doesn't have anything to do with FHA, but one of the things that we are seeing of course is more veterans, the have done their duty, they want to be able to use their VA benefits and probably one of the best thing they can do is, use their VA benefits for being able to purchase a home. 

BrokerIPTV: Now, Universal does VA? 

Pete Lansing: We certainly do. 

BrokerIPTV : Thank you very much. 

Pete Lansing: You bet. 

BrokerIPTV : I appreciate it.

If you lost a home to foreclosure last year or paid mortgage insurance premiums, there is some good news. Congress enacted laws in late 2007 to allow deduction of some mortgage insurance premiums. This could amount to a tax break of up to $350. The foreclosure tax break applies to all taxpayers who were granted forgiveness of mortgage debt. Previously, this amount was fully taxable and could have run into the tens of thousands of dollars.

http://www.businessweek.com/ap/financialnews/D8U6GH5O0.htm