This came in from CHFA today:

So if you have a creedit score under 620 you need to either raise up above 620 by Januaty 1, or You will not be considered for a home loan. Call with any questions. Mark

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In the lending business there is 0ne thing that every one hates…Mortgage Insurance …well except for those companies that sell it. So I get asked all the time “why do I have to pay that, what does it do for me? My only answer is that it’s the price you have to pay for not saving up 20% of your home purchase. The are two kinds of Mortgage Insurance: MIP stands for Mortgage Insurance Premium and it applies only to FHA loans as they are insured by the Federal Government. PMI stands for Private Mortgage Insurance and applies to Conventional loans only as that insurance is purchased from, you guessed it, Private Mortgage Insurance companies.

Back in the 1930′s, most banks would only lend 80% or less of the value of the home (LTV). The FDR addministration made passed a law that allowed banks to lend up to 97% LTB. But the banks still needed something to offest the risk of that 20%. So Mortgage Insurance was created to help offset that risk. Unfortunately, the buyer has to pay the premium on an insurance policy that protects the lender if you, the buyer, stop making your payment. Does’nt  seem fair but it is what it is.

So any loan over 80% of the purchase of a home will have MI. If it is an FHA loan the   MIP that you pay is fairly high and has very little flexibility when it comes to the amount that you have to pay. It does not matter what your credit score is you will pay the same rate.You also have to pay a one time Up Front Mortgage Insurance Premium (UFMIP) that can be rolled into the loan. You pay a little bit less if you have a little more to put down then the standard 3.5% down and there is a huge reduction if you choose a 15 year fixed as opposed to a standard 30 year FHA fixed.

If you have a conventional loan then the lender can shop around with various PMI companies to get the best deal. The better your credit, the better the Monthly PMI rate you can get and they tend to be quite a bit lower then FHA MIP rates. There is no UFMIP with a normal convnetional loan but you will have the monthly PMI. If you want to pay an UFMIP on a conventional loan then you can and depending on the program, that one time payment will make is so that you don’t pay the monthly MI premium.

The basics are this. If you have low credit scores and you don’t have 20% down then an FHA loan with the MIP is best. If you have good to excellent credit then a convnetional loan and the PMI could be best.

 By the way, Dont get fooled by lenders that say that they don’t charge PMI. Generally they have to make it up somewhere, so they charge a higher interest rate to cover it.

As always feel free to comment or contact me with any questions. Mark

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I just received this information and wanted to pass it on.

Here is some information on the Emergency Homeowner Loan Program (EHLP) that you may want to forward to your Realtor clients. The program is designed to assist homeowners who are currently 90 days or more delinquent on their first mortgage.  The program will offer a declining balance, deferred payment “bridge loan” (non-recourse, subordinate loan with zero interest) for up to $50,000 to assist eligible homeowners who have become unemployed or underemployed due to the economic downturn or a medical condition. 

Information about the program including eligibility requirements and the application can be found at www.findehlp.org  

The funds will be distributed through a state-wide lottery which will be held in early August.  If a homeowner is interested in getting into the lottery they must complete the application and send to Douglas County Housing by 5:00 p.m. on July 22, 2011.

Completed applications may be sent to Douglas County Housing Partnership as follows:

• Email to: ahugh@douglas.co.us
• US Postal: Douglas County Housing Partnership, c/o Ann Hugh, 9350 Heritage Hills Circle, Lone Tree, CO 80124
• Fax: 303-814-2966

So if you know of anyone that might benefit from this program, send them this information.

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I recently had the privilege of attending the funeral service of the father of a good friend of mine. I never met his dad but I was just trying to support my friend. Why do I say “the privilege of attending”? That almost sounds as if it was a good thing that his father died so I could go. Obviously that is not the case. I say it because my friends father was a Veteran of the Navy and served for 4 years during the Second World War. He was buried at Fort Logan National Cemetery with full military honors.  I had never witnessed such a moving ceremony. It was a peaceful day in a part of the cemetery that is away from the roads. We were surrounded by rows and rows of white marble headstones, all perfectly placed with military precision to make a line, all equally spaced from the next. The headstones for higher ranking officers were not larger then the others. The lowliest private was laid alongside a commander.

It was good for me to be there because the Memorial day weekend is usually something that I consider just another day off. The thousands of marble headstones reminded me ?, on this Mewmorial Day weekend, that many have served this country in the Armed Forces. The Veterans of Worlda War Two are leaving us at the rate of thousands per day. Many of these headstones showed that there were some that did not have the chance to get old and die like my friends father did. They died while serving. I doubt if any of them wanted to die for their country but they were willing to, and that makes all the difference.

Should we be beating our swords into plowshares? Yea probably, If there was no other human being that wanted to gather an army and take away the rights and priveleges of others. If there were not people willing to kill other people to get what they want. If there was not humans that were willing to kill as many people as they can because of religious fanatacism, then we would not need our swords. But as long as there are those people in the world, I will be thankful that there are those that are willing to die for their country and the freedom of others.

Go to Fort Logan Cemetery on Sheridan Blvd just south of Hampden Ave in Denver somtime and be reminded that there are those who feel that what we have here is good enough to stand up for and even die for.

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So tomorrow is Opening Day. Baseball lives again. I love Baseball and Opening day means the return of Summer. Tomorrow is also teh day when the Fed and Mr Frank and Mr Dodd implement their decision to restrict and give me a dis-incentive to giving good customer service. I still will, but they just made it a little harder to do because I now have to concentrate on volume which means more loans have to come in and therfore less time to spend with people like first time buyers that need the extra time to make sure they understand the process. I have even had a couple of my good Realtor partners ask if I was getting out of the business. I assured them that I was not. I also know that I can’t worry about the Frank-Dodd act. As I have said many times, I can’t always control what happens to me, I can only control how I react to it. So with positive attitude firmly in place, I will continue to do what I do and take joy in helping people get into a house that they can call their own.

OK Another Then and Now set of photos.

These pictures are of the double bridge that spans Cherry Creek down between Little Raven and Wewatta Streets. Trains have long been an important part of Denver’s economy but maybe a little less today then in 1920 when this Steam engine rolled over the same double bridge as the freight cars sit today. The whole area between Union Station and the Platte river used to be full of railroad tracks.  Now there are just a few tracks but those tracks also inclue the Light Rail whcih is taking on the spirit of the rails from days gone by. You can click on each picture to see a larger version.

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There is a comedy sketch that has been done by several British comics called Four Yorkshiremen. <iframe title=”YouTube video player” width=”480″ height=”390″ src=”http://www.youtube.com/embed/Xe1a1wHxTyo” frameborder=”0″ allowfullscreen></iframe>The version I like the best is done by 4 of the members of Monty Python. The gist of the sketch starts out with 4 well dressed gentlemen sitting in what appears to be an exclusive club, sipping some expensive french wine. They go on to remember their childhood “30 years ago” and how tough it was and proceed to try to outdo each other in their descriptions of how difficult they had it until it gets into the ridiculous. “We got evicted from our hole in the ground, we had to live in a lake”. “We had 150 of us living in a shoe box in the middle of the road”. “I used to have to get up half an hour before I went to bed and go work at the mill for 29 hours a day”. The punch line…well I’m not going to tell you the punch line. Google Four Yorkshiremen and watch it.

The reason I bring this up is to ask the question, how will we look back on our lives.  It’s a little bit of human nature to want to build ourselves and our accomplishments up in our minds and that seems to work better when we look at where we came from and how we overcame a lot of adversity. So we make that adversity even worse then it really was so that our accomplishments seem better then they really are. It makes us feel good. However, I submit that as funny as this sketch is, if we have a good attitude and outlook on life, then we don’t need to exaggerate the good or the bad. Life was not more difficult or easier in years past and it is not any better or worse now. Circumstances can be better or worse but not the basic tenants of life remain the same. Life is what you make of it. You can’t always control what happens to you but you can control how you react to it…for what it’s worth.

Then and Now:

Speaking of tough times, Cherry Creek has always been temperamental. In the 1860′s the native people tried to tell the new arrivals that the buildings they built next to the creek bed (sometimes in the creek bed) were going to washed away when it floods. This advice was ignored until one day in 1864 when the little trickle became a torrent and did wash away several buildings including the office of the Rocky Mountain News. It has flooded several times since then but one of the worst was when the Castlewood Canyon Dam (just upstream from Franktown) broke in 1933. The resulting rush of water downstream ripped several bridges out but this one across Wynkoop Street survived. Click on each picture for a larger version.

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“Oh come on Mark how can that be? I pay all my bills on time with cash.” “If I can’t pay cash for it, then I don’t need to buy it.”. I’m not saying that paying cash is a bad thing. Far from it. I think that it is a very responsible way to live. We have grown up with credit being way to easy to obtain and use. I have had too many people say that credit card offers fell in their laps in college and so they used the cards. Now they are in way too deep and can’t qualify for a mortgage. So then many feel like they never want to get in that position again so they close all their accounts and live on cash. Or others have heard about the problems with easy credit and they just decide that they never want to have any credit cards, they buy cars with cash, gas with cash, well you get the picture.

So now they want to buy a house. I take down their information on a loan application, pull their credit report and they don’t have any or very little (we call this a “thin credit” file). They have no credit scores or they have really low scores. This is because they have no credit history. In order for us to know that you are a good risk to pay your mortgage we need to have some evidence that you have been responsible with debts in the past. So we like to see a minimum of 3 credit accounts with at least 12 months of clean history. That can be a car loan, student loans, credit cards, etc. Even if you get one or two small credit limit ($300 or $400) credit cards and use them only once or twice

a month for little purchases and then pay them down every month.  Good credit history is not dependant on the amount of credit you have available to you, just the use of the credit that is available to you. Now it is possible to qualify for a loan with a thin credit file but we have to get letters from other companies that you pay every month like rent, car insurance, utility companies, cell phone bills, etc. To do that, we need to get letters from 3 companies stating that you have paid your bills on time every month for the last 12 months. This is not easy and many times companies don’t srite those kind of letters anymore.

So don’t be afraid of credit, jus be smart about it.

Then and Now:

Cherry Creek has not always been a beautiful greenway with bike paths and lots of vegetation. In the late 1800′s it had lots of trash dumped in it and flooded on a regular basis. Both of these pictures were taken from the Lincoln St bridge. You can click on the the photo for a larger version.

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