Ask A New Jersey Closing Expert

What is the difference between conventional, FHA and VA mortgage financing?
A conventional loan is the standard loan type with the usual down payment and underwriting requirements. These will differ from lender to lender, but it would typically involve a minimum 10% down payment, an above average credit rating and the lender would verify employment, income, assets, and liabilities. The department of Housing and Urban Development and the Administrator of Veteran’s Affairs back FHA and VA loans and hence allows lenders to be more leninent in their lending criteria and requirements; allowing them to make loans to individuals who would not qualify with normal lending criteria.

 Does FHA/VA have any effect on closing costs?

Yes. There are certain fees that are non-allowable under FHA/VA regulations, which means the seller must pay the fees. These fees might include, but are not limited to, courier fees, wire fees, underwriting, tax services, recording mortgage assignments, special tax searches, and document preparation. Additionally, on a VA loan, the buyer cannot be charged a settlement fee, so even if the purchase agreement states that the settlement fee is to be split evenly between the buyer and seller, the seller must pay 100% of that charge.

 Hope this provides some useful information to those who were confused about the differences between conventional and FHA/VA closings.

Your friend,

AD

www.qualitycloser.com

The growing use of Limited Power of Attorney can open door for “scam artisis” to victimize homeowners and borrowers. The Limited Power of Attorney (LPOA) is an agreement giving a designated individual the authority to sign documents relating to  a specific real estate transaction.

Limited Power of Attorney are common place items in commerical transactions but their crossover into the residential world leaves unexperienced homeowners vulnerable. With LPOA, a critical element of consumer protection is removed by allowing predatory lenders and predatory foreclosure saving companies to take advantage of homeowners by sigining off on documents on their behalf. These documents can be changed at the last minute and by having a LPOA the homeowners gets stuck agreeing to items or terms which may not be beneficial to them.  The homeowner is obliged to abide by the terms of whatever is signed on their behalf whether they like it or not.

 Consumer groups estimate foreclosures will cost homeowners $164 billion as “foreclosure firms” swoop in and use LPOA to rip homeowners out of all of their equity value in their property. Thus allowing them to make a buck off the victimized homeowners.

Your friend,

AD

www.qualitycloser.com

Like every fed move in the past, the effects of their decisions takes months on end to affect the consumer market. Their latest decision will not be any different. Anlaysts expect that the Fed’s decision to improve money avaliability in the market and cutting the Fed Funds rate should help improve the consumer market in the long run. But a essential element is still being assumed. That element is that banks would ease restrictions due to these steps by the Fed thereby and will make it easier to lend to individuals and businesses.

 In my opinion,  I believe that these steps will improve the lending market but I still feel that the lenders are going to be scared to openly lend to consumers as they had done in the past. This will in turn affect various markets such as housing, auto, and other big ticket item industries as it will not show the gains as had been the case in the previous terms.

The damage on the markets has also really hampered consumer confidence and this will need to be amended along with the banks openess to lend money before any real improvements in the markets will be visible

Your friend,

AD

www.qualitycloser.com

Fed, 4 other central banks take steps to help credit markets

By Greg Robb

WASHINGTON (MarketWatch) — The Federal Reserve announced plans Wednesday to ease elevated pressures in credit markets. The Fed will inject cash into the markets through auction of short-term funds. The Fed also announced foreign exchange swap lines with the European Central Bank and the Swiss National Bank. The Bank of Canada is also a partner in the liquidity plan. The first auction will be held on Monday Dec. 17

 The Fed’s announcement today  in my opinion is a good idea. I believe that with the opening of liquidty into the market coupled with the Rate Freeze Plan will help alleviate the pressure and the downturn in the housing market. The influx of liquidty and the continued Fed Rate cut will assist bringing better rates and deals to buyers. This should have a cascading effect resulting in stablizing of housing market downturn. Only time can tell but I feel that the markets will respond positively to these decisions in the long turn.

Your friend

AD

www.qualitycloser.com

This is what is going on in the market where I own and operate my business out of:

Current Market Rating: 2 1 2 3 4 5

Current Price Trend: 4 1 2 3 4 5

December 4, 2007

The following statistics are from the Garden State MLS and reflect all homes currently listed, pending or sold in November of 2007.

There are currently 88 properties (98 last month) on the market in Montclair with an average Asking Price of $924,860 ($851,060 last month).They have been on the market for an average of 89 days (80 last month).

There are 41 properties (48 last month) Pending Sale, (signed contracts but not yet closed) with an average Asking Price of $815,743 ($857,897 last month). We won’t know what the actual Sales Price is until these properties close. These Pending properties have been on the market for an average of 52 days (48 last month).

There have been 26 homes Sold (21 last month) with an average Asking Price of $838,826 ($730,899 last month) and an Average Sales Price of $856,088 ($766,976 last month). These homes sold in an average of 51 days (60 days last month).

Montclair continues to confound. Though inventory remains high, a few more homes sold this month! Add to that that the Average home sold $15,000 Over Asking Price makes defining this market difficult. Buyers still set value but when a home priced with a High Perception Of Value comes onto the market, multiple offers still arise and lead to Over Asking Results.

 A great resource for investors and homeowners alike in my opininon is the market conditions page on www.realtor.com. Go look up your area/town and you will have a better prespective on what is going on with the market.

Your friend

AD

www.qualitycloser.com