Gulf Coast Associates' Blog: Mortgage Information

The collapse of American Home Mortgage last week is making all the headlines. Over the past month or so, if you follow any type of financial news you've been hearing about the subprime markets, predatory lending, and the tightening of credit lending standards by State legislatures including Florida. What does all this mean to you? Let's see if we can explain a few of the details so you can understand what actually is happening.

In the past few years quite a few loans were made to folks using a "non-traditional" or a "non-conforming" loan product - this may have been for a poor credit history, unwillingness or inability to document income, or many factors that leave a borrower "outside of the box" for standard loan qualification. Quite a few times these…

According to Bankrate.com's annual survey on loan closing costs, Florida ranked number three behind only Texas and New York. The new ranking was a move up for Florida from being ranked number 5 last year.

This year's top five states included:

• New York - $3,830
• Texas - $3,413
• Florida - $3,175
• Pennsylvania - $3,169
• Ohio - $3,047

The bottom five states included:

• North Carolina -$2,487
• Nevada - $2,467
• Illinois - $2,401
• Wyoming - $2,390
• Indiana - $2,339

The median cost for all states was $2,692. The study was based on a $200,000 loan with 20% down and excluded taxes, other governmental fees and escrow fees.

The survey results reinforce why borrowers need to shop for their mortgage loan and…

For families facing some challenging housing arrangements - we announce the offering of the Family Opportunity Mortgage. Now, if you need to buy a home for a disabled (unable to work) family member, provide housing for a college bound child - "Kiddie Condos", or provide a home for your elderly parents - you will no longer have to pay the higher interest rates associated with the home being considered as an investment property.

For elderly parents or disabled family members, you will need to provide a letter stating their intent to occupy the property as their primary residence and if applicable, an explanation regarding the disability. There are no distance requirements and you will qualify as the primary purchaser on the property.

For "Kiddie Condos",…

It's real easy to confuse a buyer who is pre-qualified vs. a buyer who is pre-approved. But, think of what the words actually mean - you may be qualified to buy a property because of how much money you make. However, if you don't pay your bills on time and you have poor credit, you could still be declined for a home loan. If you are approved to do something - then that means someone else is permitting you to do what you say you can. You can home shop with confidence if you have a loan approval letter in hand.

Agents, buyers, and sellers may equate pre-qualification with pre-approval when in fact these two terms are apples and oranges. A pre-qualified buyer is someone who calls a lender on the phone and speaks about their financial situation. The lender,…

Having been in the mortgage lending business for 20 years or so, we've seen a lot of things both good and bad. However, in the last couple of years the industry, as a whole, seems to have lost its way when it comes to handing out loans to under qualified borrowers. All you have to do is read a newspaper - or watch a cable business show - to be aware of the problems with predatory lending practices and skyrocketing foreclosure rates. Unfortunately, none of these issues stemmed the tide of lenders originating option ARMs and "No Doc" loans with reckless abandon.

We know you might be thinking this is no big deal and that these types of programs help get borderline buyers into the house they want. The problem is that outlook is a short sighted way of looking…

If you're contemplating going through a divorce, you'll want to look closely at issues involving your credit. Understanding the different kinds of credit accounts and mortgage loan liabilities should help illuminate how to keep yourself from getting into credit difficulties.

Simply trying to rely on the wording of a divorce decree as to who is responsible for existing debts is a surefire way to get yourself into credit trouble. Lenders and other creditors are not parties to such documents and in most states are not bound to abide by them. So if your spouse stops making payments, they are surely to come after you for payment. Knowing how best to proceed ahead of time can save you lots of headaches down the line.

• Individual Account: Your income,…

In the last few weeks, all of the seller funded down payment assistance programs have ceased operations in order to comply with the IRS Revenue Ruling 2006-27 that ruled that providing seller funded down payment assistance was not a chartable activity. The IRS is now making full efforts to revoke the 501c3 status of these non-profit organizations.

In order to fill the void created by this action for low to moderate income buyers needing help, an alternative is the Grant America Program which works the same way but does not give a gift from a non-profit organization but from a Government Entity.

The Grant America Program is available nationwide and defines a low to moderate-income homebuyer as anyone that qualifies for an FHA loan under HUD guidelines or…

With mortgage fraud continuing to rise throughout the country and the state of Florida ranking number one for its occurrence in 2005, Gov. Charlie Crist signed a new law last week intended to combat the problem.

Changes in lending rules will go into effect on October 1st of this year with the goal of making the mortgage lending process more transparent. Any person, including buyers, sellers and real estate licensees will be held accountable if they are caught knowingly lying, misrepresenting or omitting information a Lender would rely on in the mortgage loan process.

The new law requires the following lending practice changes:

• New more detailed disclosures for loans, including variable rate (ARM) loans.
• Mortgage Brokers must disclose to…