No termite license can terminate the deal!

Recently a costly mistake happened that I thought would be a good idea to share with R.E agents, Sellers and Buyers.  As an FHA 203k loan originator I am use to dealing with lots of moving parts and working with all those involved in the transaction.  Recently though, to my surprise a transaction fell through that was already approved and over 30 days into the deal. So why did this deal crash?  Because it was found out that the person who did the termite inspection was not licensed at the time of the inspection.

Wow!!! That was a first for me but never the less an easy solution.  These were my options:

Option #1 - Have another person from that company sign the inspection who was licensed

or

Option 2 –  Get another company to go out and do a new inspection and estimate.

Now Option #1 is the easiest as this would not change any work that needs to get done and the report would remain the same.  But keep in mind that Option #2 may have a completely different outcome as now you will be using a different company who will be giving you a new inspection and report that may result in a new list of items to attend to.

In my case, Option #2 had to be exercised which revealed a lot more issues than the original termite report that was already on file.  Because not only was the person who did the inspection (apparently sole owner and only operator) not licensed at the time of inspection but he was still not licensed when the issue was investigated.

Typically, the Listing Agent or the Seller will select the termite company and most termite companies will offer a free inspection along with an estimate.  What typically isn’t done and often overlooked is checking to see if  the termite company is currently licensed. So Sellers, Buyers and R.E agents beware of these type of surprises and avoid unnecessary delays by making sure those that need to be licensed are.  Also keep in mind that a termite inspection is optional on FHA and Conventional loans as long as it stated in the purchase contract or a waiver is signed.

Check here for termite licensing status
http://www.pestboard.ca.gov/license.shtml

Check here for contractor license status
https://www2.cslb.ca.gov/OnlineServices/CheckLicense/LicenseRequest.asp

Related posts:

1. 203K Contractors and Cost Consultants
2. FHA 203K Loan Information
3. FHA 203K News Straight from the Dept. of Treasury

Today I came across yet another great post encouraging Real Estate Agents to consider those buyers who want to use FHA financing.   As a 203K Mortgage Lender I am trying to do my part in spreading the word that FHA Loans have a lot of benefits that the standard Conventional loans don’t.  So read on…you may be pleasantly surprised on how far FHA has come.

This article comes from a blog posted on Realtor.org

Here is an excerpt :

Can You Afford to Say No to FHA Borrowers?

By Robert Freedman, Senior Editor, REALTOR® magazine

Hopefully you don’t consider it a mark against buyers if they want to use FHA financing. It’s true it typically takes longer to process FHA-backed financing than it does conventional loan applications, but with the challenging credit environment, for a big chunk of your potential clientele the only financing available to them is FHA. What’s more, these days it’s taking longer to get conventional financing applications processed, so the time gap between the two has narrowed considerably.

Yet here in NAR we continue to hear that sellers—and some sales associates—are discouraging FHA borrowers from making offers on homes in the outdated belief that FHA is significantly slower and more paper-intensive than conventional financing.

Not true, says NAR Senior Policy Analyst Megan Booth. While it’s the case FHA still requires borrowers to jump through some hoops that don’t apply to conventional borrowers, the agency has undergone a sea-change in the last several years in the way it does business.

The agency is far more flexible and far more quick in its processing than it ever was in the past. Even its appraisal requirements are very much like those in the conventional market.

What’s more, FHA has just made some rule changes that increase the attraction of its financing for condos, including site condos. If you’re not familiar with site condos, they’re units in developments that look and feel like single-family communities but are structured as condos. We’re seeing more of these types of communities and FHA has moved out front by changing its rules to accommodate them.

To be sure, the agency faces challenges, but it remains that rare federal agency that is growing (35 percent of residential loans today) and making money for the federal government.

If you have FHA borrowers interested in a listing, can you afford to discourage them from making an offer? FHA is not the agency it was 10 years ago; you might be surprised at how the Depression-era mortgage insurer is moving into the Twenty-first Century.

This is very encouraging to Home buyers who are having trouble getting their offers accepted.  I hope all  Agents will be more open to FHA financing and reconsider the benefits that this type of financing provides.

If your an Real Estate Agent and would like some ideas on how to market the FHA 203K Loan I have a website dedicated exclusively to Real Agents.  You can check it out here.  http://agents.203kMorgageLender.com

I offer a FREE 203K Marketing package exclusively for Real Estate Agents who wish to promote selling less desirable or “As-is” listings. So Check it out.

Related posts:

1. Fixer-Upper Financing: 203k Program Provides Buyers with Renovation Funds
2. FHA 203K Loan Information
3. FHA 203K News Straight from the Dept. of Treasury

Videos - This is a sample version of the FHA 203K: 10 Steps from Offer to Closing video. You can see the complete version at the 203k Mortgage Lender website

Articles and Ebooks: In addition to the video we also have the Print Version of the 10 Steps from Offer to Closing. This can be a useful resource when you’re meeting with your Real Estate Agent in the event they aren’t familiar with the 203K program.

Here is an excerpt:

… Currently there are many Home Buyers who are interested in purchasing a home with the FHA 203K but unfortunately there aren’t many Real Estate Agents that are aware of the program or feel comfortable doing the transaction, and most Mortgage Lenders either can’t,won’t, or are just not familiar enough to do them.  So today I’m going to cover an overview on the 10 Step Application process from beginning to end, when using a 203k Loan to purchase a property in California.

Knowing what to expect and what is required will help you keep your Agent on track and help you prepare in advance for the steps to be taken to efficiently process your transaction and limit delays. You might also want to refer your Real Estate agent to this guide to help them get a better idea of the 203K transaction if they’re not familiar with the program.

Before we get into the 10 steps you must know there are two types of 203k loans that you can use to buy & fix up a property.  There is the Standard 203K and then there is the 203K Streamline.  So what’s the difference?

A 203k Streamline – can be used for rehab & repairs up to $35k and a Contractors bid is all that’s required.

A Standard 203k – can be used for major improvements over $35k and a “Cost Consultant” is required along with a Contractor’s bid.

For more information about the Standard and Streamline 203k loans you can download the FHA 203K Buyer’s Guide at the 203K Mortgage Lender website . Now let’s go over the 10 steps.

Step #1 Selecting a Property (Home Buyer)

The property can be a Single Family Residence, 2 to 4 units, Condo or PUD.  There are different maximum loan limits that apply and will vary depending on what county the property is located and whether it’s 1 to 4 units.  To find out what the maximum loan limits are in your area you can go to my blog to download the FHA 203K  County Loan Limits list here.

Step #2 Making the Offer (Home Buyer and Real Estate Agent)

This is where You and your Real Estate Agent take out a pencil and paper or calculator and figure out the purchase price that you are offering the seller while taking into consideration the amount of money needed for repairs which will be added to the purchase price.

If you have a chance to meet with your contractor before putting in the offer that would be helpful, unless you have a pretty good idea of how much money will be needed to bring the property up to an acceptable standard or beyond.  Keep in mind of what the future value will be after repairs and that the new loan amount will be based off of the purchase price plus repairs or 110% of the after improved value whichever is less.  The offer you make to the seller is the “As Is” price that means you are making an offer on the property in its present condition and that is the only price that concerns the seller.

Step #3 The Offer is Submitted (Real Estate Agent)

What should be in the offer:

This step is your Real Estate Agent’s responsibility but it’s good for you to know so you can review your offer and know what to look for before your Agent submits it to the Seller  … Read More >>

To download the complete video & article FHA 203K Loan: 10 Steps From Offer to Closing as well as receive the FHA 203K Buyer’s Guide  go the 203K Mortgage Lender website and sign up.  Once you sign up you’ll get updates on the 203K Loan program, and additional resources as I’ll be updating the website on a regular basis.  And as always if you would like to contact me give me a call (888) 788-9398 or email me at Marvin@203kMortgageLender.com

Related posts:

1. Find FHA 203K Loan Limits in Your Area
2. Rehab Loan Options for Homeowners
3. Fixer-Upper Financing: 203k Program Provides Buyers with Renovation Funds

FHA 203K loan limits differ from County to County.  So knowing what the Maximum loan amount FHA offers in your area will help you determine the price range of your purchase.    This document comes directly from the HUD website.

Related posts:

1. FHA 203K Loan Information
2. Beware! No Termite License Can Be a Terminator!
3. Rehab Loan Options for Homeowners

New OCC Community Developments Insights Report Focuses on the FHA’s 203(k) Home Rehabilitation Financing Program

August 6, 2009

by RealEstateRama

WASHINGTON, DC – August 6, 2009 – (RealEstateRama) — The Office of the Comptroller of the Currency (OCC) today published a Community Developments Insights report that provides bankers an overview the FHA’s 203(k) Home Rehabilitation Mortgage Insurance Program.

“The 203(k) Program is an important tool that can help mitigate a lender’s risk, while at the same time restore some of the nation’s foreclosed properties and help stabilize neighborhoods,” said Comptroller of the Currency John C. Dugan.

“HUD strongly supports OCC’s efforts to increase bank participation in the 203(k) Program. With so many bank-owned properties in need of repairs, this program offers a great way for homebuyers to finance both the purchase and rehabilitation of these homes,” said David Stevens, Assistant Secretary for Housing/Federal Housing Commissioner at the U.S. Department of Housing and Urban Development.

The 203(k) Program provides FHA mortgage insurance on loans which combine home purchase and rehabilitation financing

. Loans to rehabilitate and refinance a borrower’s current resident area are also available under the 203(k) Program. The 203(k) Program is a tool for FHA-approved lenders to originate loans for individuals, nonprofits and government development agencies interested in purchasing foreclosed properties in need of repair. Compared to conventional purchase and rehabilitation products, 203(k) loans carry less risk to lenders since these loans are backed by the full faith and credit of the federal government.

The report provides a comprehensive overview of this program for lenders that may be considering expanding their product line with 203(k) loans. The report also outlines how FHA 203(k) loans would be evaluated under the Community Reinvestment Act.

The Insights report can be accessed on the OCC’s Web site at: http://www.occ.gov/cdd/203k_Loan Program_Insights_Jul09.pdf.

Contact: Dean DeBuck

(202) 874-5770

Related posts:

1. FHA 203K Loan Information
2. Fixer-Upper Financing: 203k Program Provides Buyers with Renovation Funds
3. Beware! No Termite License Can Be a Terminator!