Brian Brady's Discussions

While I'm no fan of government meddling in the loan origination process, I can find no fault in the Federal Reserve's recent proposal to define the role of a mortgage broker and to regulate lending. Those who know me know that I'm a known Fed-phile; I sincerely believe that they are the most appropriate body, within the government, to establish rules and guidelines for lending.  The full, 41-page text of the proposal is here. Any thoughts?  

Mr. Phillips,I think the point my colleagues are trying to make is that regardless of what your lender friend remarked about the probability the execution of this temporary loan limit increase, it is technically incorrect to advise people that agency-jumbo loans, in Orange County, are available for an amount over the $625,500 amount.I lend in Orange County and would tell you to advise a buying customer that the higher loan limit, with its lower down payment requirements and superior pricing, will MOST LIKELY be executed prior to April 1, 2009.  Still, I'd tell you to advise a selling customer to insist that the earnest money deposit be non-refundable, if accepting an offer based upon that information.How's that for opacity?  Perhaps that will exemplify the tenuous attitude we have towards the swift execution, by lenders, of the "law of the land".I think the reason we try to be so precise is that you (REALTORS) trust us to get the job done right the first time.

The best style of intelligent writing is clear and simple, in present tense.Oh, I never underestimate the intelligence of my readers, Sir.  Most anyone who can read understands the irony of my second paragraph.

VA loan limits, in OC are $737,500.  There is a "trigger" for higher rates, for VA loan amounts above $417,000 but it's minor.  Instead of 5.25%,you might get 5.375%.Here's the cool thing about VA loans; the down payment requirement is only 25% of the DIFFERENCE between the loan limit and the purchase price.  In your case, you'd only have to come up with 25% of the $62,500, or about $15,500.  Amazing, huh?  We had a similar transaction, towards the end of last year when the SD county limit was $697,000.  The purchase price was $760,000 and we wee able to get the Marines into the home for about $20,000 cash-to-close (down payment and closing costs)VA loans weren't affected by this stimulus package and the increased loan limits went into place last summer/ fall, so the lenders are comfortable.  I funded one of the first "high balance" VA loans, in San Diego County, last year so I bumped my head (along with the lender) and worked the kinks out.San Diego is a military town so you can imagine how stoked we are to be able to go to the high fives, this year.  OC and LA have it even better.  San Fran has a limit of a skosh over $1MM; that astounds me that a veteran can still buy a seven figure home with no money down.Remember two things:1- If you have ANY service related disability (even as little as 10%) , you're funding fee is waived.2- The seller can pay up to 4% of the purchase price, towards non-recurring closing costs.  At your price level, 2% should do it but the extra contribution might help you get that rate down to 5% or lower.

Credit scores of 620 are required, now for an FHA loan.  Large chargeoffs, collections, or judgments would disqualify a borrower.In addition to the minimum credit score, a good 24-month payment history is suggested.FHA loans are full documentations loans so the income used for underwriting will come off of the Adjusted Gross Income, at the bottom of page 1, of your 1040.  Any depreciation or retirement plan contributions, taken as deductions, can be added back in to the adjusted gross income for qualification purposes.

Right now jumbo loans are those over $729,500.  This, in Orange County Calif. is absolutely true - verified by HUDs website and that of the White House.  The lenders may NOT have quite worked out the details, but I'm willing to wager that it won't take more than 20-30 days from now. It appears that Mr. Phillips isn't so "misleading" after all. His prognostication of 20 days turned out to be "padded" by a week or two.  The higher loan limits were accepted by many of my lenders and investors three days ago; a week earlier than he predicted.

This is a common misconception; especially in California.  I compete with no less than 8 credit unions, in San Diego,  and find that mortgage brokers smoke their rates/terms