Consumer Homes.

Question:

- Hide quoted text — Show quoted text -> >> > What I’d like to know is……would this be legal? > >> It’s usually known as fraud. > >OK, what exactly would be fraudulant?  It’s not illegal to let your house > go > >into foreclosure, is it? >  Since you say you have good credit,  you will be liable for the full > debt on the house plus attorneys fees and court cost which could > quickly double the debt.  They can easily get a judgment against you > and it will follow you until it plus interest is fully paid (or you > declare bankruptcy). > That’s true on an unsecured loan, like credit cards.  The bank will take our > house, how could they expect us to pay for it when they have it?

   That doesn’t change the fact that when you got the mortgage, you promised to pay $X.  Even if the bank takes the house back, and sells it, it will probably be for less.  So you’re still on the hook for the difference. >  Others that are walking away from mortgages probably don’t have good > credit and are judgment proof. > They had credit good enough to get the house.  Maybe you’re on to something > though.  Maybe I ought to not pay my other bills, so that I look like an > even bigger dirtbag, so they will just leave me alone and write me off as a > loser.

   Presumably you’re being facetious, but I would hope that you’re not low enough to actually consider it.

Response:

>… Values on homes is dropping like rocks here, and there is no >indication or reason for them to turn around.  Why would someone buy a house >here?  No one can get out of here fast enough!!

But then, why would *YOU* think it is a good idea to buy ANOTHER house in the very same town????? -v.

Response:

>… Values on homes is dropping like rocks here, and there is no >indication or reason for them to turn around.  Why would someone buy a house >here?  No one can get out of here fast enough!! > But then, why would *YOU* think it is a good idea to buy ANOTHER house > in the very same town????? > -v.

Because I want to live here.  Because of my husband’s career, my children have moved many times and had to change schools an average of every 18 months.  And I’m not going to move them again.

Response:

ignore "v", he is the jerk of this newsgroup

Response:

> ignore "v", he is the jerk of this newsgroup

V is not a jerk.  On the other hand Brigitte certainly appears to fit the bill. -Tim

Response:

> ignore "v", he is the jerk of this newsgroup

I think if you hang around a while longer, you’ll realize how much knowledge and experience "v" has and how helpful he is. Sure, he’s no "Little Mary Sunshine" but who’d seek her advice in buying and maintaining a house?

Response:

You should get a Real Estate Attorney and look into this.. because if its something major then they may or may not still be liable for disclosure.. – Hide quoted text — Show quoted text – > Soon after purchasing our "new" house, we discovered numerous problems. > Some of them very expensive to fix.  About a year and a half after the > purchase, we discovered that the previous owners knew about these problems > and didn’t disclose them.  We want out of this house.  The market in this > small midwestern town has gone very far south recently, because several > large employers here have had to close their doors and/or lay-off many of > the people who worked there.  Almost half the houses in this are for sale, > and have been for almost a year.  We don’t really want to put $9,0000.00 > into making the necessary repairs on a house that is dropping in value by > the minute!

Response:

Soon after purchasing our "new" house, we discovered numerous problems. Some of them very expensive to fix.  About a year and a half after the purchase, we discovered that the previous owners knew about these problems and didn’t disclose them.  We want out of this house.  The market in this small midwestern town has gone very far south recently, because several large employers here have had to close their doors and/or lay-off many of the people who worked there.  Almost half the houses in this are for sale, and have been for almost a year.  We don’t really want to put $9,0000.00 into making the necessary repairs on a house that is dropping in value by the minute! We are now in quite a pickle.  Even if we didn’t disclose these numerous problems with the house (which we would NEVER do), we still couldn’t get within 10k of what we paid for it.  If we DO disclose the problems, the possibility of getting what we paid for the house is FAR from what we would need to payoff the current mortgage. We have excellent credit and don’t really want to walk away, and let it go into foreclosure, but we may not have any choice. In our many sleepless nights we have tossed around many ideas on how to get out of this mess.  The best idea we’ve come up with, is to buy a home here in town (which are quite numerous and cheap at this time), and then walking away from the house and letting it go into foreclosure. I realize there will still be this horrible skid-mark on our credit, but can’t find any other solution to our problem. What I’d like to know is……would this be legal? Thanks, Aggie…

Response:

– Hide quoted text — Show quoted text ->Soon after purchasing our "new" house, we discovered numerous problems. >Some of them very expensive to fix.  About a year and a half after the >purchase, we discovered that the previous owners knew about these problems >and didn’t disclose them.  We want out of this house.  The market in this >small midwestern town has gone very far south recently, because several >large employers here have had to close their doors and/or lay-off many of >the people who worked there.  Almost half the houses in this are for sale, >and have been for almost a year.  We don’t really want to put $9,0000.00 >into making the necessary repairs on a house that is dropping in value by >the minute! >We are now in quite a pickle.  Even if we didn’t disclose these numerous >problems with the house (which we would NEVER do), we still couldn’t get >within 10k of what we paid for it.  If we DO disclose the problems, the >possibility of getting what we paid for the house is FAR from what we would >need to payoff the current mortgage. >We have excellent credit and don’t really want to walk away, and let it go >into foreclosure, but we may not have any choice. >In our many sleepless nights we have tossed around many ideas on how to get >out of this mess.  The best idea we’ve come up with, is to buy a home here >in town (which are quite numerous and cheap at this time), and then walking >away from the house and letting it go into foreclosure. >I realize there will still be this horrible skid-mark on our credit, but >can’t find any other solution to our problem. >What I’d like to know is……would this be legal? >Thanks, >Aggie…

Legal Sure,  after all, it’s not like the bank can have you locked up for credit violations,  but,  lets look at the big picture. 1) You still have your job. 2) You can still afford to make payments on the place. 3) The problems aren’t unsolvable, what are we talking about $9K in repairs? 4) All houses in your town are losing value.  All you do is swap one dirty pig for a shiny pig, it’s still a pig. Here’s what I would reccomend. A) Consult an attorney, see if you can sue the previous sellers for failure to disclose. B) See if said action applies to the real estate agent, after all they did sell you a dirty pig, and if the agent knew of the problems, then they did you a dirty deed. C) View this as an excuse to buy power tools and play tim allen. D) I spent 10  years of long weekends and holidays fixing up fauults in this house, but it’s now just what i want, it’s wonderful, and warm and I know all the flaws.

Response:

> What I’d like to know is……would this be legal?

It’s usually known as fraud. And it won’t work anyway because you won’t be able to get a loan on the new house unless you sell the first one.

Response:

> And it won’t work anyway because you won’t be able to get a loan on the > new house unless you sell the first one.

You’re assuming they’re maxed out on credit.  Some of us don’t do that.  I was a double-homeowner for 2 weeks last summer when we switched homes and until our previous home sold. -Tim

Response:

> What I’d like to know is……would this be legal? > It’s usually known as fraud.

OK, what exactly would be fraudulant?  It’s not illegal to let your house go into foreclosure, is it? > And it won’t work anyway because you won’t be able to get a loan on the > new house unless you sell the first one.

I know that’s not true…because we’ve already been approved for the loan to buy the second home. Brigitte – Hide quoted text — Show quoted text –

Response:

> > > What I’d like to know is……would this be legal? > It’s usually known as fraud. > OK, what exactly would be fraudulant?  It’s not illegal to let your house go > into foreclosure, is it?

You’re not off the financial hook unless the mortgage holder can sell the house for more than the mortgage amount. – Hide quoted text — Show quoted text -> And it won’t work anyway because you won’t be able to get a loan on the > new house unless you sell the first one. > I know that’s not true…because we’ve already been approved for the loan to > buy the second home. > Brigitte

Response:

> > What I’d like to know is……would this be legal? > It’s usually known as fraud. > And it won’t work anyway because you won’t be able to get a loan on the > new house unless you sell the first one.

It sounds to me like a belated case of buyers remorse.  I wonder if she would be happy with the house she has if they had paid the -current- market price.  $9000 in repairs for a used house is not out of line. Harry K

Response:

>>And it won’t work anyway because you won’t be able to get a loan on the >new house unless you sell the first one. > You’re assuming they’re maxed out on credit.  Some of us don’t do that.  I > was a double-homeowner for 2 weeks last summer when we switched homes and > until our previous home sold.

She’s complaining about needing $9k in repairs and not being able to get within $10k of what she paid for it and yet can afford two mortgage payments?  Something’s funny there.  She won’t screw over the buyer of her old house but is willing to dump it on the mortgage holder; I see some moral problems.

Response:

If you don’t have a lawyer you really need to get one and talk to them about this.  At least go look up your state’s statutes about mortgages and foreclosures.

Response:

– Hide quoted text — Show quoted text ->>And it won’t work anyway because you won’t be able to get a loan on the >>new house unless you sell the first one. > You’re assuming they’re maxed out on credit.  Some of us don’t do that. I > was a double-homeowner for 2 weeks last summer when we switched homes and > until our previous home sold. > She’s complaining about needing $9k in repairs and not being able to get > within $10k of what she paid for it and yet can afford two mortgage > payments?  Something’s funny there.  She won’t screw over the buyer of > her old house but is willing to dump it on the mortgage holder; I see > some moral problems.

I agree that it sounds like a conflict in moral values.  But the reason I don’t really feel too badly about dumping it on the mortgage company, is because the person I bought this house from is the mortgage loan officer at the bank that holds the note on this house.  Talk about a conflict of interest!  We moved here from out of state and didn’t know this until several months after we bought the house. We’ve had our house listed with a realtor for 6 months.  Houses here in this town just aren’t selling.  And we are disclosing the problem and we can’t even get an offer.  As I said in my initial post, houses here aren’t selling because 2 of the largest employers in this county of 6,000 residents has laid-off 50% of the workforce.  Everyone is moving out, leaving houses to foreclose.  Values on homes is dropping like rocks here, and there is no indication or reason for them to turn around.  Why would someone buy a house here?  No one can get out of here fast enough!! Brigitte

Response:

> It sounds to me like a belated case of buyers remorse.  I wonder if > she would be happy with the house she has if they had paid the > -current- market price.  $9000 in repairs for a used house is not out > of line.

I agree.  9K is not that big a deal.  Every hour has problems.  If they bought a different hour they’d spend 9K updating that too. I say stick it out in that house and make a plan to fix the problems one thing at a time. pearlz

Response:

> I see > some moral problems.

So do I.  But welcome to America, home of "I’ve got a problem — so I have entitlement!" -Tim

Response:

How about you list some of the problems that make up the $9K?  As others have pointed out, this isn’t actually that high for buying a "used" house– especially after being there a year and a half. If you found things right away that weren’t disclosed, then you should have done something at that time.  After a year and a half, how can you be so sure the previous owner even knew about the problems? My own opinon?  You’re caught in a "life isn’t faaaaaiiir!" mode due to both problems with your house and the value of your house tanking.  You don’t really care what happens to others as long as you do what makes you happy. Most of us outgrew that after getting out our our teens… -Tim

Response:

>> > What I’d like to know is……would this be legal? > It’s usually known as fraud. >OK, what exactly would be fraudulant?  It’s not illegal to let your house go >into foreclosure, is it?

 Since you say you have good credit,  you will be liable for the full debt on the house plus attorneys fees and court cost which could quickly double the debt.  They can easily get a judgment against you and it will follow you until it plus interest is fully paid (or you declare bankruptcy).  Others that are walking away from mortgages probably don’t have good credit and are judgment proof.    JL – Hide quoted text — Show quoted text -> And it won’t work anyway because you won’t be able to get a loan on the > new house unless you sell the first one. >I know that’s not true…because we’ve already been approved for the loan to >buy the second home. >Brigitte

Response:

> It sounds to me like a belated case of buyers remorse.  I wonder if > she would be happy with the house she has if they had paid the > -current- market price.  $9000 in repairs for a used house is not out > of line. > I agree.  9K is not that big a deal.  Every hour has problems.  If they > bought a different hour they’d spend 9K updating that too. > I say stick it out in that house and make a plan to fix the problems > one thing at a time. > pearlz

So you think it’s alright for a seller to not disclose costly problems with a home?  I hope you someday don’t have to deal with what we have to deal with here….

Response:

- Hide quoted text — Show quoted text -> > It sounds to me like a belated case of buyers remorse.  I wonder if > > she would be happy with the house she has if they had paid the > > -current- market price.  $9000 in repairs for a used house is not out > > of line. > I agree.  9K is not that big a deal.  Every hour has problems.  If they > bought a different hour they’d spend 9K updating that too. > I say stick it out in that house and make a plan to fix the problems > one thing at a time. > pearlz > So you think it’s alright for a seller to not disclose costly problems with > a home?  I hope you someday don’t have to deal with what we have to deal > with here….

   I think what she ( and almost everyone else ) is saying is that $9K does not constitute "costly problems" in a used house, unless perhaps it’s a mobile home.  Heck, for a lot of houses, that would barely cover a new coat of paint inside and out. Depending on the age of the house, you are almost guaranteed that you’ll get the occasional leak, plumbing problem, foundation problem, etc.    You also have to realize that there are a lot of whiners who post here who want nothing more than to get someone else to pay for unrealistic "problems".  My personal favorite was the guy from a couple of years ago who wanted his money back because he couldn’t sit out back during the summer because of mosquitos.  Turns out he lived next to swamp.  His excuse was, "Well, I grew up in a city and didn’t know that would be a problem."    What exactly needs to be fixed in your house?  And how much did the house cost?  Is the $9K a significant fraction of the original purchase price?   You have to realize that *any* house is going to need repairs.  Heck, for all you know, any repairs you’ve found that weren’t reported could have been done by the original construction crew, with no knowledge of the former owner. – Rich – Rich

Response:

– Hide quoted text — Show quoted text ->> > What I’d like to know is……would this be legal? >> It’s usually known as fraud. >OK, what exactly would be fraudulant?  It’s not illegal to let your house go >into foreclosure, is it? >  Since you say you have good credit,  you will be liable for the full > debt on the house plus attorneys fees and court cost which could > quickly double the debt.  They can easily get a judgment against you > and it will follow you until it plus interest is fully paid (or you > declare bankruptcy).

That’s true on an unsecured loan, like credit cards.  The bank will take our house, how could they expect us to pay for it when they have it? >  Others that are walking away from mortgages probably don’t have good > credit and are judgment proof.

They had credit good enough to get the house.  Maybe you’re on to something though.  Maybe I ought to not pay my other bills, so that I look like an even bigger dirtbag, so they will just leave me alone and write me off as a loser.

Response:

– Hide quoted text — Show quoted text -> >> > What I’d like to know is……would this be legal? > >> It’s usually known as fraud. > >OK, what exactly would be fraudulant?  It’s not illegal to let your house > go > >into foreclosure, is it? >  Since you say you have good credit,  you will be liable for the full > debt on the house plus attorneys fees and court cost which could > quickly double the debt.  They can easily get a judgment against you > and it will follow you until it plus interest is fully paid (or you > declare bankruptcy). > That’s true on an unsecured loan, like credit cards.  The bank will take our > house, how could they expect us to pay for it when they have it?

maybe because when they sell it and it doesn’t cover the mortgage, the papers you signed when you closed say they can? you’re on the hook for the amount borrowed, not what the house is ‘worth’. – Hide quoted text — Show quoted text ->  Others that are walking away from mortgages probably don’t have good > credit and are judgment proof. > They had credit good enough to get the house.  Maybe you’re on to something > though.  Maybe I ought to not pay my other bills, so that I look like an > even bigger dirtbag, so they will just leave me alone and write me off as a > loser.

Response:

Question:

This is a way that investors leverage capital to aquire more property. Less money out of pocket. As long as the buyer is legit, you’re probably OK. I would have a lawyer look over the contract. You could do the same thing, yourself, as long as you could rent the property for more than the morgage payment You could also do a lease option, where the buyer pays rent, plus an up front fee (usually 2-3K) and after a year they have the option of applying the fee, plus a percentage of the rent to the downpayment (usually 30-50%).

> Sell my house quickly.  I would get more money this way.

– Hide quoted text — Show quoted text -> Why would you want to do such a thing? > It is certainly scam material and I have a hunch that an attorney would not > recommend signing their contracts and guess what the odds of them accepting > your revisions are? > Their is almost no upside for you and a huge downside potential. > Why not tell us your situation and maybe we can help you find another way. > > There is a company in my area that claims they buy houses.  After > > calling them, I found out the house must have at least 70% equity. > > Mine does not.  However, there is another program they have. > > What they do, all with contractual agreements, is get me to refinance > > my house at 100%.  Then I get the money for the refinance.  The > > company then takes the deed of the house and takes over the payments. > > However, the financing is still in my name.  There is another contract > > that says although the financing is in my name, they actually must > > make the payments.  The person said the risk is in case we go out of > > business.  He said they would sell the house or lease/purchase it. > > So, I refinance, I get the equity money.  They get the house.  They > > get the deed.  They make the payments, but the financing is in my > > name.  They make the payments by contractual agreement even though the > > original financing is in my name.  He called it buying a house subject > > to something or other… > > Is this a scam?  Thank you.

Response:

>No, it is not a scam.  As others have pointed out though, you >are trusting this buyer to make the payments since your name is >still on the mortgage.

Actually, it pretty much *IS*, see below. >If you were 3 months behind on your payments, credit going down >hill, can’t refinance, and you are going to lose everything; you >might be more inclined to do this type of deal…

So it is a scam that takes advantage of desparate people.  The worst kind of scam; at least some just take advantage of the greedy. >  If you just >can’t sell the home for the price you want, and want to sell it >quickly to get out from under the payments…

If you have to sell quickly, you sell for less.  If you have to or want to get "the price you want", then you can’t sell quickly, the house is not worth it (like being ‘upside down’, owing more than it is worth).  So *WHY* would this buyer, if it was legit, do something that made *NO* economic sense and pay over market???? >There is nothing illegal about doing this and it is not a scam. >In your situation, you will get your cash up front from your >refinance of your house, and the buyer will make the payments >for you.

If you refi, when yo pay the new loan off, the house is yours.  If you sell legitimately, you are in the clear.  But the way this works is, you are not in the clear (you’ll never purchase another house with an open mortgage still in your name on the first one; just try telling the new bank about this ‘deal’ you made), and you will not own the house after the loan is paid.  You will not even have equity as it is paid down. >The risk can, and will work both ways.  If the buyer does not >make the payments, you need a way in the contract to get the >house back.  Something like if buyer falls 2 months behind on >the payments, you get the house back, or something to that >effect to make you comfortable.  

Yeah, so now *YOU* have a contract secured by real estate; so now *YOU* can (have to, that is) proceed by a foreclosure to try and get your property back, all the while still being on the hook for the payments.  How soon do you think you’ll get it back, eh?  Think these birds will just roll over and capitulate, so sorry?  Naive. >The buyer is also taking the >risk that a DOSC does not get called….

But if there *IS* a due on sale clause, then you are perpetrating a fraud by not bringing to your lender’s attention that you are selling. So this scheme depends on an ongoing fraud.  Therefore it is a scam to me. >  Subject-To the existing >mortgage(s) is just another way to purchase property.

Yes, but that’s not *REALLY* what this is.  Purchasing subject to mortgage just indicates in general that the mortgage will remain in place and/or be discharged by buyer; the amount to seller is net and buyer will pay mortgage.  As there are few bank mortgages now without Due on Sale clauses, and those few that allow assumption require that the new owner be on the note, this would have to be a scam as advertised, if it is supposed to apply to more than a rare handful of properties, and be done without informing the lender. The way this was 1st reported, these ‘buyers’ wanted houses with fairly high equity.  Which looks to me to be so that the mortgage payment would be far below rental value so that they can milk the place with no money down.  And remember, they are nowhere on the mortgage loan; so what is the risk to them????  Maybe it aint illegal (though I think in practice it usually would be) but it sure would be stupid to get hooked into it.  Who do you think is zooming whom here? -v.

Response:

- Hide quoted text — Show quoted text – >There is a company in my area that claims they buy houses.  After >calling them, I found out the house must have at least 70% equity. >Mine does not.  However, there is another program they have. >What they do, all with contractual agreements, is get me to refinance >my house at 100%.  Then I get the money for the refinance.  The >company then takes the deed of the house and takes over the payments. >However, the financing is still in my name.  There is another contract >that says although the financing is in my name, they actually must >make the payments.  The person said the risk is in case we go out of >business.  He said they would sell the house or lease/purchase it. >So, I refinance, I get the equity money.  They get the house.  They >get the deed.  They make the payments, but the financing is in my >name.  They make the payments by contractual agreement even though the >original financing is in my name.  He called it buying a house subject >to something or other… >Is this a scam?  Thank you.

I’m not sure if this is a scam or not, but I’m dead certain that there’s an unacceptably high risk for you. Consider that even though they are making the payments, it’s *your* signature on the mortgage. This means that, if *they* stop making payments, *you* are in default, and the lender comes after *you* for the money. And *they* have the deed, and hence legal ownership of the house. The risk is indeed if they go out of business. They have the house, and you have the debt. DISCLAIMER: I am not an attorney, so what follows is merely common sense, not legal advice. It appears that you would then need to sue them to get the deed to the house back. This may or may not be successful: it may be protected in some form under the terms of their bankruptcy filing, or they may have sold it to a fourth party and spent the cash. At best, even if you succeed, it will take some time, and you still have to make the payments in the meantime. At worst, you may find yourself with no money, no house, and a large debt. I’d stay a LONG way away from this deal if I were you. The more I look at this, the more it looks like a scam. This is a bad deal. *All* the risk rests on you, and none on them. Run, don’t walk, in the other direction. — alphageek/at/milmac/dot/com Stop Partial-birth Abortion NOW! End religious persecution in China – boycott Chinese goods. Ted Kennedy’s car has killed more people than my gun.

Response:

> He called it buying a house subject > to something or other… > Is this a scam?  Thank you.

No, it is not a scam.  As others have pointed out though, you are trusting this buyer to make the payments since your name is still on the mortgage. If you were 3 months behind on your payments, credit going down hill, can’t refinance, and you are going to lose everything; you might be more inclined to do this type of deal.  If you just can’t sell the home for the price you want, and want to sell it quickly to get out from under the payments, then you might be inclined to do this. There is nothing illegal about doing this and it is not a scam. In your situation, you will get your cash up front from your refinance of your house, and the buyer will make the payments for you. The risk can, and will work both ways.  If the buyer does not make the payments, you need a way in the contract to get the house back.  Something like if buyer falls 2 months behind on the payments, you get the house back, or something to that effect to make you comfortable.  The buyer is also taking the risk that a DOSC does not get called.  Subject-To the existing mortgage(s) is just another way to purchase property. — Real Estate Agent & Private Investor Retail, Wholesale, or Fast Cash; There is always a solution! Tacoma: 253-212-1085 * Seattle: 206-353-7044 * Fax: 253-212-1087

Response:

Why would you want to do such a thing? It is certainly scam material and I have a hunch that an attorney would not recommend signing their contracts and guess what the odds of them accepting your revisions are? Their is almost no upside for you and a huge downside potential. Why not tell us your situation and maybe we can help you find another way.

– Hide quoted text — Show quoted text -> There is a company in my area that claims they buy houses.  After > calling them, I found out the house must have at least 70% equity. > Mine does not.  However, there is another program they have. > What they do, all with contractual agreements, is get me to refinance > my house at 100%.  Then I get the money for the refinance.  The > company then takes the deed of the house and takes over the payments. > However, the financing is still in my name.  There is another contract > that says although the financing is in my name, they actually must > make the payments.  The person said the risk is in case we go out of > business.  He said they would sell the house or lease/purchase it. > So, I refinance, I get the equity money.  They get the house.  They > get the deed.  They make the payments, but the financing is in my > name.  They make the payments by contractual agreement even though the > original financing is in my name.  He called it buying a house subject > to something or other… > Is this a scam?  Thank you.

Response:

Sell my house quickly.  I would get more money this way. – Hide quoted text — Show quoted text – > Why would you want to do such a thing? > It is certainly scam material and I have a hunch that an attorney would not > recommend signing their contracts and guess what the odds of them accepting > your revisions are? > Their is almost no upside for you and a huge downside potential. > Why not tell us your situation and maybe we can help you find another way. > There is a company in my area that claims they buy houses.  After > calling them, I found out the house must have at least 70% equity. > Mine does not.  However, there is another program they have. > What they do, all with contractual agreements, is get me to refinance > my house at 100%.  Then I get the money for the refinance.  The > company then takes the deed of the house and takes over the payments. > However, the financing is still in my name.  There is another contract > that says although the financing is in my name, they actually must > make the payments.  The person said the risk is in case we go out of > business.  He said they would sell the house or lease/purchase it. > So, I refinance, I get the equity money.  They get the house.  They > get the deed.  They make the payments, but the financing is in my > name.  They make the payments by contractual agreement even though the > original financing is in my name.  He called it buying a house subject > to something or other… > Is this a scam?  Thank you.

Response:

There is a company in my area that claims they buy houses.  After calling them, I found out the house must have at least 70% equity. Mine does not.  However, there is another program they have. What they do, all with contractual agreements, is get me to refinance my house at 100%.  Then I get the money for the refinance.  The company then takes the deed of the house and takes over the payments. However, the financing is still in my name.  There is another contract that says although the financing is in my name, they actually must make the payments.  The person said the risk is in case we go out of business.  He said they would sell the house or lease/purchase it. So, I refinance, I get the equity money.  They get the house.  They get the deed.  They make the payments, but the financing is in my name.  They make the payments by contractual agreement even though the original financing is in my name.  He called it buying a house subject to something or other… Is this a scam?  Thank you.

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Question:

Do the ceilings for conventional loans ($300,700) go up every year or whenever the government decides? Is there any charts of how often (and when) it has gone up in the past?

Response:

> Do the ceilings for conventional loans ($300,700) go up every year or > whenever the government decides? Is there any charts of how often (and when) > it has gone up in the past?

The ceilings are not government things, but, rather, imposed by Fannie Mae and Freddie Mac, which are private federally-chartered securities institutions. The ceilings for conventional loans depend upon how many investers they can get to bite into investment pools comprised of big loans. They have to get enough mortgages into the pool in order to reduce the risk of default to an acceptable amount (investers in mortgage-backed securities are funny that way, they’re looking for a safe investment, and there’s not much safer than holding the keys to someone’s house in your hands). When they get lots of rich folks biting on mortgage-based securities (basically buying mortgage loans and sucking off the payments and interest on those loans), like in today’s market where the stock market is horrid and the bond market only mediocre, they can raise the ceilings for conventional loans because there’s more people willing to buy into each risk pool. I presume that if money ever fled the mortgage-backed security market (why?! It’s the closest thing to a guaranteed yield that you’ll ever get, even a total default on the part of homeowner usually doesn’t cause a loss because of PMI etc.!), they’d end up having to reduce the ceilings, though I haven’t seen it happen in my lifetime. — There is no distinctly native American criminal class except Congress.                                               – Mark Twain —–= Posted via Newsfeeds.Com, Uncensored Usenet News =—– http://www.newsfeeds.com – The #1 Newsgroup Service in the World! —–==  Over 80,000 Newsgroups – 16 Different Servers! =—–

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>> Do the ceilings for conventional loans ($300,700) go up every year or > whenever the government decides? Is there any charts of how often (and when) > it has gone up in the past? > The ceilings are not government things, but, rather, imposed by Fannie > Mae and Freddie Mac, which are private federally-chartered securities > institutions.

Between legal directives on how they’re allowed to act, the federal oversight boards they report to, and the implicit federal guarantee of the bonds they issue, the "private" status Fannie Mae and Freddie Mac is fairly nominal. > The ceilings for conventional loans depend upon how many investers > they can get to bite into investment pools comprised of big loans.

Fannie Mae and Freddie Mac are required by law to set the conventional loan ceiling based on the results of the October Federal Housing Finance Board’s Monthly Interest Rate Survey (which, despite its name, covers more than interest rates). http://www.fhfb.gov/MIRS/mirs.htm > cause a loss because of PMI etc.!), they’d end up having to reduce the > ceilings, though I haven’t seen it happen in my lifetime.

Eleven years old and you own a house!  Wow!  (The ceiling was lowered slightly in 1990.  <grin>) http://www.bankrate.com/brm/news/mtg/19981231.asp Ed

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Question:

Thank you John.  They had their closing yesterday and everything went well.  If it interests you further, Greenpoint Savings Bank gave them 2 loans, to cover the cost of the house.  One 30year fixed while the second was Arm for 50K – to avoid PMI. Santhosh – Hide quoted text — Show quoted text -> A couple of months ago, when there was about $2500/- left to be paid > on the rental condo, the broker told him that NO BANK/Lender would > give him a second mortgage on the condo and that they would NOT even > refiance it. > Just yesterday he received a letter from a national bank stating that > he is eligible to receive a "home equity loan" on the condo – and that > he is preapproved for 90% of the existing market value. > Question:: What is the difference between 2nd Mtg and Home equity > loan?  And why would the broker say that NO Bank/Lender would give him > the money on the Condo while a national bank just approved an equity > loan? > No real difference — different names for the same concept. > The broker either didn’t know what he was talking about, was too lazy to do any > research, or lied. > OTOH, "a national bank" may have sent him an unsolicited form letter that does > not truly represent the situation or the interest rate attached to the loan… > How does it affect the way you pay taxes?  Is Interest paid > deductable? > For rental property, interest paid on a mortgage loan is generally a business > expense that offsets rental income in calculating net income.  An accountant, > tax lawyer, or IRS agent would have to tell your friend the specifics of a > second mortgage in that case. > John Weiss > Seattle, WA > Remove NOSPAM from reply address

Response:

Thank you Wayne.  Appreciate the response. – Hide quoted text — Show quoted text – > Possibly he was saying that since most normal loans call for owner > occupancy.  That said there are other loans and taking the word of a Broker > friend or someone on line without checking for yourself! > Wayne

Response:

Possibly he was saying that since most normal loans call for owner occupancy.  That said there are other loans and taking the word of a Broker friend or someone on line without checking for yourself! Wayne

– Hide quoted text — Show quoted text -> Hi there, > Am posting this question on behalf of someone who doesn’t have access > to the web. > He currently owns a Condo (fully paid up) which is rented and now > would like to buy a house.  He was planning to use the refinance money > from the condo for the downpayment.  He has "excellent" credit rating. > He has been preapproved for the house and the closing date is set for > sometime at the end of this month. > A couple of months ago, when there was about $2500/- left to be paid > on the rental condo, the broker told him that NO BANK/Lender would > give him a second mortgage on the condo and that they would NOT even > refiance it. > Just yesterday he received a letter from a national bank stating that > he is eligible to receive a "home equity loan" on the condo – and that > he is preapproved for 90% of the existing market value. > Question:: What is the difference between 2nd Mtg and Home equity > loan?  And why would the broker say that NO Bank/Lender would give him > the money on the Condo while a national bank just approved an equity > loan? > How does it affect the way you pay taxes?  Is Interest paid > deductable? > Thanks in advance > S

Response:

Hi there, Am posting this question on behalf of someone who doesn’t have access to the web. He currently owns a Condo (fully paid up) which is rented and now would like to buy a house.  He was planning to use the refinance money from the condo for the downpayment.  He has "excellent" credit rating. He has been preapproved for the house and the closing date is set for sometime at the end of this month. A couple of months ago, when there was about $2500/- left to be paid on the rental condo, the broker told him that NO BANK/Lender would give him a second mortgage on the condo and that they would NOT even refiance it. Just yesterday he received a letter from a national bank stating that he is eligible to receive a "home equity loan" on the condo – and that he is preapproved for 90% of the existing market value. Question:: What is the difference between 2nd Mtg and Home equity loan?  And why would the broker say that NO Bank/Lender would give him the money on the Condo while a national bank just approved an equity loan? How does it affect the way you pay taxes?  Is Interest paid deductable? Thanks in advance S

Response:

> A couple of months ago, when there was about $2500/- left to be paid > on the rental condo, the broker told him that NO BANK/Lender would > give him a second mortgage on the condo and that they would NOT even > refiance it. > Just yesterday he received a letter from a national bank stating that > he is eligible to receive a "home equity loan" on the condo – and that > he is preapproved for 90% of the existing market value. > Question:: What is the difference between 2nd Mtg and Home equity > loan?  And why would the broker say that NO Bank/Lender would give him > the money on the Condo while a national bank just approved an equity > loan?

No real difference — different names for the same concept. The broker either didn’t know what he was talking about, was too lazy to do any research, or lied. OTOH, "a national bank" may have sent him an unsolicited form letter that does not truly represent the situation or the interest rate attached to the loan… > How does it affect the way you pay taxes?  Is Interest paid > deductable?

For rental property, interest paid on a mortgage loan is generally a business expense that offsets rental income in calculating net income.  An accountant, tax lawyer, or IRS agent would have to tell your friend the specifics of a second mortgage in that case. John Weiss Seattle, WA Remove NOSPAM from reply address

Response:

Question:

Recently, I have gotten into big trouble with my credit cards.  I am currently working with credit counseling to negotiate lower terms for all six of them.  Many have already been handed over to collection agencies as they are 6 months past due.  Not that it matters, but I "had" a gambling problem.  My question is this: I want to sell my condominium in about 1 year and buy another less expensive condo in another part of town.  My current mortgage is $150,000 at 6.8% and I pay it on time.  The new mortgage will hopefully be about $25,000 less.  How difficult will it be for me to qualify for another mortgage because of my tarnished credit report?   I hope to profit about $50,000 from the sale and use the proceeds to pay down my debt, credit cards included.  Next, if I don’t qualify on my own would a co-signer help the situation any?  Thanks, so much!

Response:

said: >I want to sell my condominium in about 1 year and buy another less >expensive condo in another part of town.

Be very careful here, you may have to use up a one-time-only tax exemption (usually used when someone retires and doesn’t buy a replacement home but rather goes into an assisted living facility) or else pay capital gains on any profit from the previous condo (and roll-over profit homes owned prior to that one).  Talk to a tax specialist FIRST. jc

Response:

> said: >I want to sell my condominium in about 1 year and buy another less >expensive condo in another part of town. > Be very careful here, you may have to use up a one-time-only tax > exemption (usually used when someone retires and doesn’t buy a > replacement home but rather goes into an assisted living > facility) or else pay capital gains on any profit from the > previous condo (and roll-over profit homes owned prior to that > one).  Talk to a tax specialist FIRST. > jc

it hasn’t been that way for a while.

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> said: >I want to sell my condominium in about 1 year and buy another less >expensive condo in another part of town. > Be very careful here, you may have to use up a one-time-only tax > exemption (usually used when someone retires and doesn’t buy a > replacement home but rather goes into an assisted living > facility) or else pay capital gains on any profit from the > previous condo (and roll-over profit homes owned prior to that > one).  Talk to a tax specialist FIRST.

The one-time exemption thing has been eliminated.  You now have a lifetime pass on capital gains from your primary residence provided you lived in it 2 of the past 5 years.  Still good to talk to a tax accountant first since there are some limitations, and maybe a lifetime cap. -john- — Newave Communications                       http://www.johnweeks.com

Response:

> I want to sell my condominium in about 1 year and buy another less > expensive condo in another part of town.  My current mortgage is > $150,000 at 6.8% and I pay it on time.  The new mortgage will > hopefully be about $25,000 less.  How difficult will it be for me to > qualify for another mortgage because of my tarnished credit report?   > I hope to profit about $50,000 from the sale and use the proceeds to > pay down my debt, credit cards included.  Next, if I don’t qualify on > my own would a co-signer help the situation any?  Thanks, so much!

Your credit record it toast for about 10 years.  The key thing is your FICO score, and I have little hope that it will qualify you for a conventional mortgage.  A co-signer will help, but you will likely still be paying a higher interest rate as punishment. You may have options with a low-doc or no-doc loan.  This will take something like 40% down, so you will need that $50K as a down payment. I do, however, like your plan.  Downsizing to raise cash to pay off debts is the responsible thing to do, and hopefully, it will be relatively painless for you to do (other than the pain of moving). The only thing that I can think of is to visit a mortgage loan company right now, and find out first hand where you stand.  That gives you a year to fix what you can, and come up with a plan. You may end up looking at "brokered mortgages", which is a higher risk category, so talk with a real estate agent that you know and trust to get a referal to a mortgage broker that can be trusted. There are a lot of shady people in that business. -john- — Newave Communications                       http://www.johnweeks.com

Response:

> Recently, I have gotten into big trouble with my credit cards.  I am > currently working with credit counseling to negotiate lower terms for > all six of them.  Many have already been handed over to collection > agencies as they are 6 months past due.  Not that it matters, but I > "had" a gambling problem.  My question is this:

Your credit counselor or a mortgage lending officer would be in a much better position to answer your question than anyone on this newsgroup. Good luck

Response:

– Hide quoted text — Show quoted text -> I want to sell my condominium in about 1 year and buy another less > expensive condo in another part of town.  My current mortgage is > $150,000 at 6.8% and I pay it on time.  The new mortgage will > hopefully be about $25,000 less.  How difficult will it be for me to > qualify for another mortgage because of my tarnished credit report? > I hope to profit about $50,000 from the sale and use the proceeds to > pay down my debt, credit cards included.  Next, if I don’t qualify on > my own would a co-signer help the situation any?  Thanks, so much! > Your credit record it toast for about 10 years.  The key thing is > your FICO score, and I have little hope that it will qualify you > for a conventional mortgage.  A co-signer will help, but you will > likely still be paying a higher interest rate as punishment. > You may have options with a low-doc or no-doc loan.  This will take > something like 40% down, so you will need that $50K as a down payment. > I do, however, like your plan.  Downsizing to raise cash to pay off > debts is the responsible thing to do, and hopefully, it will be > relatively painless for you to do (other than the pain of moving). > The only thing that I can think of is to visit a mortgage loan > company right now, and find out first hand where you stand.  That > gives you a year to fix what you can, and come up with a plan. > You may end up looking at "brokered mortgages", which is a higher > risk category, so talk with a real estate agent that you know and > trust to get a referal to a mortgage broker that can be trusted. > There are a lot of shady people in that business.

There were a couple things in your post I didn’t understand. What’s a low-doc loan? And what does "brokered" mortgages mean? DH and I have flawless credit and got our latest mortgage through a broker recommended by our realtor. The interest rate was very favorable and the whole process was accomplished with one short phone call. This was a lot less hassle than the previous mortgage, which DH wanted to get through a bank he’d done business with for years. There was no actual problem there, just a lot more forms to fill out, documentation required, etc. To the OP: even if your credit is indeed toast another option that might be available to you is seller financing, which typically might last not more than 5 years but would give you additional time to repair your credit and become eligible for conventional financing.

Response:

> said: >I want to sell my condominium in about 1 year and buy another less >expensive condo in another part of town. > Be very careful here, you may have to use up a one-time-only tax > exemption (usually used when someone retires and doesn’t buy a > replacement home but rather goes into an assisted living > facility) or else pay capital gains on any profit from the > previous condo (and roll-over profit homes owned prior to that > one).  Talk to a tax specialist FIRST. > jc

Know what you are talking about before you post.  The one-time exemption is no more, and you can use the exemption (with some limitations) every two years. JK

Response:

> said: > Be very careful here, you may have to use up a one-time-only tax > exemption (usually used when someone retires and doesn’t buy a > replacement home but rather goes into an assisted living > facility) or else pay capital gains on any profit from the > previous condo (and roll-over profit homes owned prior to that > one).  Talk to a tax specialist FIRST.

Its not a one time only exemption anymore.  If I’m not mistaken, you can use the exemption multiple times, as long as you have lived in the home for at least two of the last five years.  Sell your house now, use the exemption…buy a new house and then when you sell that house, if you’ve lived there two of the last five years then you can take the exemption again.

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:

: > said: : > Be very careful here, you may have to use up a one-time-only tax : > exemption (usually used when someone retires and doesn’t buy a : > replacement home but rather goes into an assisted living : > facility) or else pay capital gains on any profit from the : > previous condo (and roll-over profit homes owned prior to that : > one).  Talk to a tax specialist FIRST. : : Its not a one time only exemption anymore.  If I’m not mistaken, you : can use the exemption multiple times, as long as you have lived in : the home for at least two of the last five years.  Sell your house now, : use the exemption…buy a new house and then when you sell that house, : if you’ve lived there two of the last five years then you can take : the exemption again. :    http://www.irs.gov/faqs/display/0,,i1%3D54%26genericId%3D16267,00.html    Tax Topics   "Topic 701 – SALE OF YOUR HOME    If you have a gain from the sale or exchange of your main home in    2001, you may be able to exclude from income up to $250,000 of the    gain ($500,000, for certain married taxpayers filing a joint return).    The exclusion may be allowed each time you sell or exchange your main    home, but generally no more frequently than once every two years.    If you sold your home under a contract that provides for part or all    of the selling price to be paid in a later year, you made an    "installment sale." Refer to Tax Topic 705 for more information.    To be eligible for an exclusion, your home must have been owned by you    and used as your main home for a period of at least two years out of    the five years prior to its sale or exchange. You can meet the    ownership and the use tests during different two year periods.    However, both tests must be met during the five-year period ending on    the date of the sale or exchange. If you and your spouse file a joint    return for the year of the sale or exchange, you can exclude gain if    either of you qualified for the exclusion.    If you did not meet the ownership and use tests, you may be allowed to    exclude a portion of the gain realized on the sale or exchange of your    home if:      You sold or exchanged your home due to a change in health or place    of employment, or      You sold or exchanged a home due to a change in health or place of    employment, and during the 2-year period ending on the date of the    sale or exchange you sold or exchanged another home at a gain and    excluded all or part of that gain.    Report the sale or exchange only if you have a gain that is not    excluded from your income. If you have a gain that is not excluded you    must report it on Schedule D Form 1040 (PDF).    For additional information, refer to Publication 523 (PDF), Selling    Your Home. This publication also contains information you may need if    you sold your home before May 7, 1997." –Jerry Leslie   (my opinions are strictly my own)

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> There were a couple things in your post I didn’t understand. What’s a > low-doc loan? And what does "brokered" mortgages mean? DH and I have > flawless credit and got our latest mortgage through a broker recommended by > our realtor. The interest rate was very favorable and the whole process was > accomplished with one short phone call. This was a lot less hassle than the > previous mortgage, which DH wanted to get through a bank he’d done business > with for years. There was no actual problem there, just a lot more forms to > fill out, documentation required, etc.

There are a number of different types of mortgage loans out there. A no-doc loan stands for no documentation.  Most of the normal loan documentation is skipped, including the verification steps for income and credit.  To get this, you normally have to have a large downpayment (so you will not skip out on the bank), and pay a premium interest rate (to reward the bank for the extra risk).  A low-doc loan stands for low documentation, which skips some, but not all, paperwork. Normally, with a loan, you deal with the lending institution directly. For example, you go to a bank, and they are the ones that take your info, do the approval, and hand out the money.  The bank may or may not sell the loan later on, often, to the Gennie Mae company.  In a brokered loan, the funds come from a local group of investors or an investment fund of some type.  The mortgage broker will take your info, then match you up with one of their various funding options. They will do the approval, then get the funds from the investors. This is normally used for higher risk and commercial loans that do not conform to the HUD and Gennie Mae guidelines.  There is usually a slightly to grossly higher interest rate involved, and an up-front fee to the broker for doing this service (often 1%). > To the OP: even if your credit is indeed toast another option that might be > available to you is seller financing, which typically might last not more > than 5 years but would give you additional time to repair your credit and > become eligible for conventional financing.

I usually only see this on problem properties, where the seller needs to add financing as an incentive because the property is not something that a bank wants to take a risk on.  Sellers usually want to see pretty good credit, too, except if they are selling to a relative. -john- — Newave Communications                       http://www.johnweeks.com

Response:

– Hide quoted text — Show quoted text -> I want to sell my condominium in about 1 year and buy another less > expensive condo in another part of town.  My current mortgage is > $150,000 at 6.8% and I pay it on time.  The new mortgage will > hopefully be about $25,000 less.  How difficult will it be for me to > qualify for another mortgage because of my tarnished credit report?   > I hope to profit about $50,000 from the sale and use the proceeds to > pay down my debt, credit cards included.  Next, if I don’t qualify on > my own would a co-signer help the situation any?  Thanks, so much! > Your credit record it toast for about 10 years.  The key thing is > your FICO score, and I have little hope that it will qualify you > for a conventional mortgage.  A co-signer will help, but you will > likely still be paying a higher interest rate as punishment. > You may have options with a low-doc or no-doc loan.  This will take > something like 40% down, so you will need that $50K as a down payment. > I do, however, like your plan.  Downsizing to raise cash to pay off > debts is the responsible thing to do, and hopefully, it will be > relatively painless for you to do (other than the pain of moving). > The only thing that I can think of is to visit a mortgage loan > company right now, and find out first hand where you stand.  That > gives you a year to fix what you can, and come up with a plan. > You may end up looking at "brokered mortgages", which is a higher > risk category, so talk with a real estate agent that you know and > trust to get a referal to a mortgage broker that can be trusted. > There are a lot of shady people in that business. > -john-

Thanks, Yes, I know interest rate will likely be higher.  Maybe 2 or 3 higher?

Response:

– Hide quoted text — Show quoted text -> There were a couple things in your post I didn’t understand. What’s a > low-doc loan? And what does "brokered" mortgages mean? DH and I have > flawless credit and got our latest mortgage through a broker recommended by > our realtor. The interest rate was very favorable and the whole process was > accomplished with one short phone call. This was a lot less hassle than the > previous mortgage, which DH wanted to get through a bank he’d done business > with for years. There was no actual problem there, just a lot more forms to > fill out, documentation required, etc. > There are a number of different types of mortgage loans out there. > A no-doc loan stands for no documentation.  Most of the normal loan > documentation is skipped, including the verification steps for income > and credit.  To get this, you normally have to have a large downpayment > (so you will not skip out on the bank), and pay a premium interest > rate (to reward the bank for the extra risk).  A low-doc loan stands > for low documentation, which skips some, but not all, paperwork.

Okay, I’ve got the terminology but I’m still puzzled as to why someone with a large downpayment (or anyone, for that matter) would choose a higher interest rate just to avoid completing some paperwork. But if you’re suggsting that the documentation is skipped in order to cover up low income or bad credit, then I’m still puzzled. Are you saying there’s some kind of "don’t ask, don’t tell" category and if so, to what type of borrower would this be advantageous? > Normally, with a loan, you deal with the lending institution directly. > For example, you go to a bank, and they are the ones that take your > info, do the approval, and hand out the money.  The bank may or may > not sell the loan later on, often, to the Gennie Mae company.  In a > brokered loan, the funds come from a local group of investors or an > investment fund of some type.  The mortgage broker will take your > info, then match you up with one of their various funding options. > They will do the approval, then get the funds from the investors. > This is normally used for higher risk and commercial loans that > do not conform to the HUD and Gennie Mae guidelines.  There is > usually a slightly to grossly higher interest rate involved, and > an up-front fee to the broker for doing this service (often 1%).

I’ve owned a number of properties in my lifetime, including primary residences, a vacation home, and rental property so I’m familiar with the process. Both recent mortgages DH and I’ve had were sold to another institution within a matter of days, although one was arranged through a bank (ponderous process) and the other through a broker–a "one call, that’s all" thing that sounds rather like the low-doc mortgage you mentioned, except that the interest rate was the lowest one being advertised at the time for a conventional, 30-year mortgage. > To the OP: even if your credit is indeed toast another option that might be > available to you is seller financing, which typically might last not more > than 5 years but would give you additional time to repair your credit and > become eligible for conventional financing. > I usually only see this on problem properties, where the seller > needs to add financing as an incentive because the property is > not something that a bank wants to take a risk on.  Sellers > usually want to see pretty good credit, too, except if they are > selling to a relative.

DH and I’ve sold a couple pieces of property on land contracts and they weren’t particularly problem properties as far as I could tell.  In one case we knew the buyers personally, in the other we didn’t, but from our perspective the higher interest rate this kind of sale produced was sufficient to satisfy us in terms of the risk. You sound as if you’re in the lending business and know whereof you speak, although a lot of what you said–about types of mortgages, interest rates, and seller financing–sounds directly contrary to my own experience. Perhaps practices differ in different parts of the country. FWIW, on our current mortgage we did have a large down payment–approximately 40%. Maybe that made a difference in procedure and/or interest rate.

Response:

>> A no-doc loan stands for no documentation.  Most of the normal loan > documentation is skipped, including the verification steps for income > and credit.  To get this, you normally have to have a large downpayment > (so you will not skip out on the bank), and pay a premium interest > rate (to reward the bank for the extra risk).  A low-doc loan stands > for low documentation, which skips some, but not all, paperwork. >Okay, I’ve got the terminology but I’m still puzzled as to why someone with >a large downpayment (or anyone, for that matter) would choose a higher >interest rate just to avoid completing some paperwork.

Probably the most common reason is that the buyer is self-employed, and therefore things like verification of employment and income become a bit more complicated.

Response:

http://www.businessweek.com/magazine/content/01_44/b3755094.htm A Debt Trap for the Unwary We do not like consumer credit counselling! This is copied from our web site: In recent years, Consumer Credit Counseling (CCC) has become increasingly popular.  These organizations are also sometimes called "debt management" or "debt consolidation." CCC companies offer to consolidate all of your consumer debt

Question:

> I looked over the site and couldn’t find any instances of > people who had special problems because they used the builder’s > financial company to finance the home built by the builder. > Can you point me at where these cases are documented at > hadd.com? > And one more question.. if you’re non-profit, why is the > site hadd.com rather than hadd.org?

Chris, Not sure what you mean when you say you looked all over the state.  Contact HADD and personally ask for examples such as the Miller Enterprises case, that the president of HADD has detailed knowledge of.  She may have case info that’s in your state, too. Miller is not. I don’t like to relate third hand info, so contact her, thru the site. The records you seek are not always publicly available.  Complaints, investigations, and other records may be kept confidential by state agencies, or simply not online or updated.  The Freedom of Information Act mainly pertains to FEDERAL records, and many people simply look in the wrong place.  Not all states share information readily. Those of us that have to research a bad builder find this out quick, and it’s also why people sometimes don’t find a very accurate picture of a builder when they research them before buying. As for HADD.COM not being "HADD.ORG," I believe the org address was taken when the site was set up. HADD is registered as a non profit, type 501(3)(c). Also at least one state chapter of HADD has incorporated seperately now, (Ohio), and more probably will as they grow.

Response:

We tooa re buying a home and using the builder’s mortgage company. The reason being is that they are paying about half of the closing costs. I’ve gone to our credit union and another bank to inquire and if we did another bank (non builder) then we are stuck with the entire closing costs which we don’t want to do. Seeing as you are in Florida, the title companies are regulated by the state and the fees will all be very similar from one company to the next. so you really won’t get shafted there. I too am paying an origination fee, but from several sources I’ve talked to, that is normal, especially on an FHA loan. And considering most mortgage companies sell your loan off (some several times), don’t sweat so much the builder’s. Guaranteed that in 6 months, they aren’t your servicer. and for the Hazard/Homeowner’s Insurance… its like tomato/tomatoe… I’ve seen it both in documents. the thing you should consider is the cost of the builder’s vs 3rd party lender. Chances are you might have a slightly higher interest rate with the builder, but you won’t get saddled with a higher up front cost. A 3rd party you could get a lower rate, but have to pay more at closing. its your call. Whatever rate I get now, I know its cheaper than the current loan I have now, so I’m not as concerned at getting a 6.7% vs a 6.5% loan. I’d rather pay 3K at close than 10K. – Hide quoted text — Show quoted text – > All, > Four questions.. > 1) I am about to decide on a lender to finance my new home > construction and was wondering..  What are the pros/cons > of using the builder’s mortgage company for the mortgage? > They offer to "pay closing costs" which I looked into, and > they sneak some closing costs in but its not that big of a deal > (basically they have a 1% origination fee, and small app fee). > What I’m more worried about is down the road, will using them > as my lender and builder give them more power then they should > have when managing the mortgage?  What kinds of trouble can I > get into in future circumstances?  Will using an outside lender > mimimize the trouble? I believe they transfer the mortgage > service somewhere else after closing, but still.. what will they be > able to do that they wouldn’t normally be able to do if I used > an outside lender?  If they do in fact get extra power, it might > have a price which I can factor into my decision. > 2) I understand that mortgage prepays like "tax escrow" and > "insurance escrow" are hard to estimate, but I’ve noticed that > different lenders assume different amounts of time for which to > escrow.  For example, lender A says that I’d have to escrow 14 > months of tax, where lender B might say it’s only 6 months. > If the tax is determined and collected by a government office, > why can lenders charge different amounts?  Wouldn’t each lender > have to eventually collect the same amount at closing given the > house and location, since the money is going to said government > office? > 3) Title company.. should I use the lender’s suggested title > company?  Do title companies and lenders often get together > and dupe unwary borrowers, or is the title company selection > not that important in the long run?  I mean, all they do is > hold the title until you pay off the mortgage right? > 4) Why do lenders call insurance "Hazard Insurance" > instead of the phrase I’ve heard normal people call it: > "Homeowners insurance" ??  It took me a few days to > figure out they were the same.

Response:

We purchased a home from a builder who pressured us and played games with us at every corner to get us to use their lender.  They tried to act like different companies.  One day we wanted to make sure they received one of our documents and so we drove over to their headquarters and guess who shared the same office space as the builder, the builder’s lender, in fact they just had two different doors to the same office space. Crooks, Crooks, and more Crooks.

Response:

In my case, the builder and lender openly admit they are the same company. Why do you think your builder and lender are Crooks? Did they dupe you in some way that a traditional, unrelated lender could not have? – Hide quoted text — Show quoted text – > We purchased a home from a builder who pressured us and played games > with us at every corner to get us to use their lender.  They tried to > act like different companies.  One day we wanted to make sure they > received one of our documents and so we drove over to their > headquarters and guess who shared the same office space as the > builder, the builder’s lender, in fact they just had two different > doors to the same office space. > Crooks, Crooks, and more Crooks.

Response:

> Hi.  I compete with builders for mortgage loans, so I am not an > unbiased party (just want to get that out straightaway). > "I see complaints every day from buyers who are having big problems > with not > only a builder but especially when they used the buidler’s lending > company." > I see it all the time as well.  Very important for you to remember – > Nothing happens after closing!.  I cannot emphasize this enough.  If > you have problems with the workmanship of the house, you will likely > be told, "Don’t worry.  We’ll fix it after closing."  After you close > the loan, they have zero incentive to do anything, and it is typical > for them to do nothing that they had promised.

That will be the case no matter which lender I borrow from.  Once the builder gets their cash back from the construction plus their profit, their interest to fix stuff goes out the window no matter who cut their check.  Your advise is valid and welcome, however it would be that way no matter who lent me the money. > A major problem with using the builder as a lender is the inherent > conflict of interest.  If you use a mortgage broker, he or she > represents you.  The builder’s lender represents the builder.  The > broker does not get paid unless the loan closes.  The broker will be > familiar with the process and if something is fishy the broker should > see it.

True.  However, I don’t want to pay a mortgage broker either, so my current decision is whether to use a "foreign" lender as opposed to the builder’s same-parent-company lender.  There is no mortgage broker in my decision.  I’m not so sure about the conflict of interest, I mean, all lenders are eager to close the loan, and all builders are eager to be done building and on to the next house.  They are both interested in making money, but the secret, back-door avenues of mistrust are what I’m interested in.  If builders and lenders can conspire to rip me off, I want to know ahead of time.  I’m familiar with the usual ripoff tactics (last-minute rate changes, hidden fees, etc).  What I want to know of are the back-door alleys that builders and their affiliated lenders can use to somehow rip me off. > Another problem is that builder’s lenders are notorious for surprises > at closing.  There should be no surprises at a closing!  No "oh, by > the way, the rate is a little higher," or "we had to charge this > teensy-weensy extra fee."  At a loan closing, there are several people > present who do not get paid unless the deal closes.  Many people will > not want to cause a fuss, so they just sign, pressured by the intense > environment.  If there are major surprises at closing, you should > walk!  You have every right to do so.

Are there _more_ surprises when you use the builder’s lender? I’m sure every lender has snuck surprises on borrowers before. Which types of surprises do same-parent-company lenders sneak on borrowers more often?  Are they more inclined to surprise you than a lender that’s not affiliated with the builder? Aren’t the incentives to surprise the same no matter who the lender is? > I meet people time and time again who deeply regret using the > builder’s lender.  My experience with this has all been in Florida. > Maybe in your state all of the builder’s lenders are saints, but I > doubt it.

I’d like to know specifics about the people you have met.  I’m not saying I don’t believe you, I’m just saying that their stories are probably similar to what they could have gotten had they not used the builder’s lender.

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> They send in payments on your behalf. Normally, if you have less than an 80% > LTV, the lender requires impounds and you don’t have the option to pay > directly. Some people voluntarily have impounds so they don’t have that > semi-annual nut to worry about. BTW, be sure to check on their service > charge for managing your impounds.

JD, You’ve been a great help! One more question.. Do they offer interest on the money that they hold in escrow?  I’m sure they are investing that money themselves, unless that goes against the escrow laws.. does it?

Response:

Chris, I volunteer for a home owner advocate non-profit org…I see complaints every day from buyers who are having big problems with not only a builder but especially when they used the buidler’s lending company.  You are really stuck if they conspire to rip you off, and they sometimes do. All kinds of borderline and outright loan fraud goes on, and even if not technically illegal, ends up costing the home buyer a great deal.  Before signing any kind of agreement check out: http://www.hadd.com  I strongly suggest you email the president of this organization from the site and discuss the builder/lender terms with her.  She’s done a lot of work on loan fraud.  Good luck, and be informed!

Response:

> JD, You’ve been a great help! One more question.. Do they offer > interest on the money that they hold in escrow?  I’m sure they are > investing that money themselves, unless that goes against the escrow > laws.. does it?

I’m not up on those laws but I vaguely recall that interest must be paid on impound accounts. It should be easy enough to find out. Maybe Eric knows.

Response:

I looked over the site and couldn’t find any instances of people who had special problems because they used the builder’s financial company to finance the home built by the builder. Can you point me at where these cases are documented at hadd.com? And one more question.. if you’re non-profit, why is the site hadd.com rather than hadd.org? – Hide quoted text — Show quoted text – > Chris, I volunteer for a home owner advocate non-profit org…I see > complaints every day from buyers who are having big problems with not > only a builder but especially when they used the buidler’s lending > company.  You are really stuck if they conspire to rip you off, and > they sometimes do. All kinds of borderline and outright loan fraud > goes on, and even if not technically illegal, ends up costing the home > buyer a great deal.  Before signing any kind of agreement check out: > http://www.hadd.com  I strongly suggest you email the president of > this organization from the site and discuss the builder/lender terms > with her.  She’s done a lot of work on loan fraud.  Good luck, and be > informed!

Response:

Hi.  I compete with builders for mortgage loans, so I am not an unbiased party (just want to get that out straightaway). "I see complaints every day from buyers who are having big problems with not only a builder but especially when they used the buidler’s lending company." I see it all the time as well.  Very important for you to remember – Nothing happens after closing!.  I cannot emphasize this enough.  If you have problems with the workmanship of the house, you will likely be told, "Don’t worry.  We’ll fix it after closing."  After you close the loan, they have zero incentive to do anything, and it is typical for them to do nothing that they had promised. A major problem with using the builder as a lender is the inherent conflict of interest.  If you use a mortgage broker, he or she represents you.  The builder’s lender represents the builder.  The broker does not get paid unless the loan closes.  The broker will be familiar with the process and if something is fishy the broker should see it. Another problem is that builder’s lenders are notorious for surprises at closing.  There should be no surprises at a closing!  No "oh, by the way, the rate is a little higher," or "we had to charge this teensy-weensy extra fee."  At a loan closing, there are several people present who do not get paid unless the deal closes.  Many people will not want to cause a fuss, so they just sign, pressured by the intense environment.  If there are major surprises at closing, you should walk!  You have every right to do so. I meet people time and time again who deeply regret using the builder’s lender.  My experience with this has all been in Florida. Maybe in your state all of the builder’s lenders are saints, but I doubt it. I hope this advice has been helpful.  Good luck with everything. John Waldron http://www.ushomeloan.com/ – Hide quoted text — Show quoted text – > I looked over the site and couldn’t find any instances of > people who had special problems because they used the builder’s > financial company to finance the home built by the builder. > Can you point me at where these cases are documented at > hadd.com? > And one more question.. if you’re non-profit, why is the > site hadd.com rather than hadd.org? > Chris, I volunteer for a home owner advocate non-profit org…I see > complaints every day from buyers who are having big problems with not > only a builder but especially when they used the buidler’s lending > company.  You are really stuck if they conspire to rip you off, and > they sometimes do. All kinds of borderline and outright loan fraud > goes on, and even if not technically illegal, ends up costing the home > buyer a great deal.  Before signing any kind of agreement check out: > http://www.hadd.com  I strongly suggest you email the president of > this organization from the site and discuss the builder/lender terms > with her.  She’s done a lot of work on loan fraud.  Good luck, and be > informed!

Response:

– Hide quoted text — Show quoted text -> I recall reading somewhere that a lender who has a special relationship with > a builder will approve you for a loan even if you suddenly don’t qualify > anymore, > just so they don’t get stuck with the house, whereas external lenders would > laugh > and say "sorry" and walk away.  For example, Joe Schmoe puts a deposit down, > gets the house built, then takes a 40% paycut at the factory, which makes him > not qualify for the loan anymore in an external lender’s eye.  However, the > builder > mortgage company approves Joe, then forcloses on the house when he can’t > make payments.  That’s the only scenario I’ve heard of, and I’m not sure if > it’s accurate or legal.  All I know is they are much better off foreclosing then > being stuck with unsold inventory.

The typical lender does not want to deal with foreclosures. That said, it sounds like you’re dealing with a different kind of animal but one constant is you. It’s ultimately up to the buyer to decide if he can aford the house. You cannot pass that decision on to the lender. > > What kinds of trouble can I > > get into in future circumstances? > None as long as you pay. > Yeah.. sort of like the mafia huh

How would you view the situation if you were the lender? > If they sell the loan to someone else then even if there were issues there > certainly won’t be after the transfer. > So once the service transfer is made, then there is no relationship _at all_ > with the original lender?

Correct. > > 2) I understand that mortgage prepays like "tax escrow" and > > "insurance escrow" are hard to estimate, > They aren’t hard to estimate at all. > Well, I just meant that a lender in spokane, washington probably doesn’t > have the dade county, florida tax rates sitting there.  And knowing the > financial > industry, they probably have to trudge down to the basement and pull some > paper out of a filing cabinet to do so.

It’s not a problem at all. These people do it every day. > Ok, so then this means that *they* are the ones paying the tax/insurance, and > you just get a total bill ("PITI") from the lender?  Is it possible for me to > pay > the taxes and insurance separately? Is this a good idea?  Or just extra

hassle? They send in payments on your behalf. Normally, if you have less than an 80% LTV, the lender requires impounds and you don’t have the option to pay directly. Some people voluntarily have impounds so they don’t have that semi-annual nut to worry about. BTW, be sure to check on their service charge for managing your impounds.

Response:

> insurance. Some states have laws regarding the maximum allowable escrow > account reserves.

My understanding is that this was set in stone in the 1999 "Home Purchaser’s Protection Act", a federal law (the same one which mandates that PMI must be removed at 78% equity from the original appraisal). The computation is rather involved, though, and depends upon the next property tax payment and when it is due. I’d dig up the form and calculation from one of the heaps of paper that I’ve accumulated whilst in the process of buying a house, but I’m too tired right now (packing is hell!). > 3) Title company.. should I use the lender’s suggested title > company?  Do title companies and lenders often get together > and dupe unwary borrowers, or is the title company selection > not that important in the long run?  I mean, all they do is > hold the title until you pay off the mortgage right? > Title companies sell title insurance and in some areas, they are also the > escrow agent. If your builder is the same person you are buying the lot from

Title companies are typically heavily regulated by the state, and it’s difficult for them to rip you off because of the federal laws regulating the home buying processes (e.g., must provide you with settlement statement within <n> days prior to closing). You’re much more likely to have problems with the builder than with the title company, because a title company ripoff is objective dollars and cents, rather than shoddy materials and lousy construction (the way builders rip you off) where everything is subjective and as long as the house meets code it’s hard to win. Mortgage lenders, on the other hand, have wide lattitude to rip you off with, e.g., "junk fees" on your closing costs and such. But they don’t need the escrow agent’s participation to do that. — There is no distinctly native American criminal class except Congress.                                               – Mark Twain

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> > 1) I am about to decide on a lender to finance my new home > construction and was wondering..  What are the pros/cons > of using the builder’s mortgage company for the mortgage? > Do you mean that the builder and the lender are the same company or just > that the lender is one that the builder has a relationship with?

They have the same prefix and work out of the same office, so I am assuming they are owned by the same parent company.  For example, "Foobar Homes, Inc." and "Foobar Financial, Inc.".  I suppose I could verify by looking at some public records… They probably attempt to work as separate entities internally, but externally they appear to be joined at the hip.  They do offer some unique features that external lenders cannot. > They offer to "pay closing costs" which I looked into, and > they sneak some closing costs in but its not that big of a deal > (basically they have a 1% origination fee, and small app fee). > Not a big deal? Tell them to pay all closing costs — including the > origination fee. Of course, the quoted rate might change. BTW, I don;t > consider app fees to be closing costs.

Yeah, so if they knock off the 1% Origination Fee, but bump up the interest rate, I haven’t really gotten anything.  I am going to pay points either way, as I plan on staying in the house a while. > What I’m more worried about is down the road, will using them > as my lender and builder give them more power then they should > have when managing the mortgage? > Of course not.

I recall reading somewhere that a lender who has a special relationship with a builder will approve you for a loan even if you suddenly don’t qualify anymore, just so they don’t get stuck with the house, whereas external lenders would laugh and say "sorry" and walk away.  For example, Joe Schmoe puts a deposit down, gets the house built, then takes a 40% paycut at the factory, which makes him not qualify for the loan anymore in an external lender’s eye.  However, the builder mortgage company approves Joe, then forcloses on the house when he can’t make payments.  That’s the only scenario I’ve heard of, and I’m not sure if it’s accurate or legal.  All I know is they are much better off foreclosing then being stuck with unsold inventory. > What kinds of trouble can I > get into in future circumstances? > None as long as you pay.

Yeah.. sort of like the mafia huh >Will using an outside lender > mimimize the trouble? > Nope. >I believe they transfer the mortgage > service somewhere else after closing, but still.. what will they be > able to do that they wouldn’t normally be able to do if I used > an outside lender? > If they sell the loan to someone else then even if there were issues there > certainly won’t be after the transfer.

So once the service transfer is made, then there is no relationship _at all_ with the original lender? >  If they do in fact get extra power, it might > have a price which I can factor into my decision. > No extra power. > 2) I understand that mortgage prepays like "tax escrow" and > "insurance escrow" are hard to estimate, > They aren’t hard to estimate at all.

Well, I just meant that a lender in spokane, washington probably doesn’t have the dade county, florida tax rates sitting there.  And knowing the financial industry, they probably have to trudge down to the basement and pull some paper out of a filing cabinet to do so. – Hide quoted text — Show quoted text -> but I’ve noticed that > different lenders assume different amounts of time for which to > escrow.  For example, lender A says that I’d have to escrow 14 > months of tax, where lender B might say it’s only 6 months. > If the tax is determined and collected by a government office, > why can lenders charge different amounts? > There are 3 factors at play. One is the individual lender’s policy. Two, the > time of year you close. And, three (to a much lesser degree, if at all) you > credit rating. >Wouldn’t each lender > have to eventually collect the same amount at closing given the > house and location, since the money is going to said government > office? > Yes, but how much they want in reserve is essentially up to them. Most > lenders I’ve deal with want a minimum of 4 months of reserve for taxes and > insurance. Some states have laws regarding the maximum allowable escrow > account reserves.

Ok, so then this means that *they* are the ones paying the tax/insurance, and you just get a total bill ("PITI") from the lender?  Is it possible for me to pay the taxes and insurance separately? Is this a good idea?  Or just extra hassle? > 3) Title company.. should I use the lender’s suggested title > company?  Do title companies and lenders often get together > and dupe unwary borrowers, or is the title company selection > not that important in the long run?  I mean, all they do is > hold the title until you pay off the mortgage right? > Title companies sell title insurance and in some areas, they are also the > escrow agent. If your builder is the same person you are buying the lot from > then I guarantee you will not have a choice on title companies because the > developer is getting a discount. As long as the company is one of the majors > like Chicago or First American, you’ll be alright.

Ok, thanks for that one.  I’ll find out asap. > 4) Why do lenders call insurance "Hazard Insurance" > instead of the phrase I’ve heard normal people call it: > "Homeowners insurance" ??  It took me a few days to > figure out they were the same. > Who knows, who cares. You buy it and hopefully never use it.

I guess it’s just industry jargon, sort of like "hemmoraging" = "bleeding".

Response:

question 1 it can be simpler to go thru them for coordination. they really cannot do anything to you! 2  if you are responsible push to have you pay taxes and insurance yourself. the amount they escrow up front will depend upon when the taxes are due and which month you close if they are due in April and you close in December you would owe the whole year but only have made 4 payments! title company will make little difference in Colorado the seller chooses the company! hazard insurance because they require you to have insurance on the house itself not contents! much like if you don’t have car insurance the lender will buy insurance that only cover collision and theft! Wayne

– Hide quoted text — Show quoted text -> All, > Four questions.. > 1) I am about to decide on a lender to finance my new home > construction and was wondering..  What are the pros/cons > of using the builder’s mortgage company for the mortgage? > They offer to "pay closing costs" which I looked into, and > they sneak some closing costs in but its not that big of a deal > (basically they have a 1% origination fee, and small app fee). > What I’m more worried about is down the road, will using them > as my lender and builder give them more power then they should > have when managing the mortgage?  What kinds of trouble can I > get into in future circumstances?  Will using an outside lender > mimimize the trouble? I believe they transfer the mortgage > service somewhere else after closing, but still.. what will they be > able to do that they wouldn’t normally be able to do if I used > an outside lender?  If they do in fact get extra power, it might > have a price which I can factor into my decision. > 2) I understand that mortgage prepays like "tax escrow" and > "insurance escrow" are hard to estimate, but I’ve noticed that > different lenders assume different amounts of time for which to > escrow.  For example, lender A says that I’d have to escrow 14 > months of tax, where lender B might say it’s only 6 months. > If the tax is determined and collected by a government office, > why can lenders charge different amounts?  Wouldn’t each lender > have to eventually collect the same amount at closing given the > house and location, since the money is going to said government > office? > 3) Title company.. should I use the lender’s suggested title > company?  Do title companies and lenders often get together > and dupe unwary borrowers, or is the title company selection > not that important in the long run?  I mean, all they do is > hold the title until you pay off the mortgage right? > 4) Why do lenders call insurance "Hazard Insurance" > instead of the phrase I’ve heard normal people call it: > "Homeowners insurance" ??  It took me a few days to > figure out they were the same.

Response:

> 1) I am about to decide on a lender to finance my new home > construction and was wondering..  What are the pros/cons > of using the builder’s mortgage company for the mortgage?

Do you mean that the builder and the lender are the same company or just that the lender is one that the builder has a relationship with? > They offer to "pay closing costs" which I looked into, and > they sneak some closing costs in but its not that big of a deal > (basically they have a 1% origination fee, and small app fee).

Not a big deal? Tell them to pay all closing costs — including the origination fee. Of course, the quoted rate might change. BTW, I don;t consider app fees to be closing costs. > What I’m more worried about is down the road, will using them > as my lender and builder give them more power then they should > have when managing the mortgage?

Of course not. > What kinds of trouble can I > get into in future circumstances?

None as long as you pay. >Will using an outside lender > mimimize the trouble?

Nope. >I believe they transfer the mortgage > service somewhere else after closing, but still.. what will they be > able to do that they wouldn’t normally be able to do if I used > an outside lender?

If they sell the loan to someone else then even if there were issues there certainly won’t be after the transfer. >  If they do in fact get extra power, it might > have a price which I can factor into my decision.

No extra power. > 2) I understand that mortgage prepays like "tax escrow" and > "insurance escrow" are hard to estimate,

They aren’t hard to estimate at all. > but I’ve noticed that > different lenders assume different amounts of time for which to > escrow.  For example, lender A says that I’d have to escrow 14 > months of tax, where lender B might say it’s only 6 months. > If the tax is determined and collected by a government office, > why can lenders charge different amounts?

There are 3 factors at play. One is the individual lender’s policy. Two, the time of year you close. And, three (to a much lesser degree, if at all) you credit rating. >Wouldn’t each lender > have to eventually collect the same amount at closing given the > house and location, since the money is going to said government > office?

Yes, but how much they want in reserve is essentially up to them. Most lenders I’ve deal with want a minimum of 4 months of reserve for taxes and insurance. Some states have laws regarding the maximum allowable escrow account reserves. > 3) Title company.. should I use the lender’s suggested title > company?  Do title companies and lenders often get together > and dupe unwary borrowers, or is the title company selection > not that important in the long run?  I mean, all they do is > hold the title until you pay off the mortgage right?

Title companies sell title insurance and in some areas, they are also the escrow agent. If your builder is the same person you are buying the lot from then I guarantee you will not have a choice on title companies because the developer is getting a discount. As long as the company is one of the majors like Chicago or First American, you’ll be alright. > 4) Why do lenders call insurance "Hazard Insurance" > instead of the phrase I’ve heard normal people call it: > "Homeowners insurance" ??  It took me a few days to > figure out they were the same.

Who knows, who cares. You buy it and hopefully never use it.

Response:

All, Four questions.. 1) I am about to decide on a lender to finance my new home construction and was wondering..  What are the pros/cons of using the builder’s mortgage company for the mortgage? They offer to "pay closing costs" which I looked into, and they sneak some closing costs in but its not that big of a deal (basically they have a 1% origination fee, and small app fee). What I’m more worried about is down the road, will using them as my lender and builder give them more power then they should have when managing the mortgage?  What kinds of trouble can I get into in future circumstances?  Will using an outside lender mimimize the trouble? I believe they transfer the mortgage service somewhere else after closing, but still.. what will they be able to do that they wouldn’t normally be able to do if I used an outside lender?  If they do in fact get extra power, it might have a price which I can factor into my decision. 2) I understand that mortgage prepays like "tax escrow" and "insurance escrow" are hard to estimate, but I’ve noticed that different lenders assume different amounts of time for which to escrow.  For example, lender A says that I’d have to escrow 14 months of tax, where lender B might say it’s only 6 months. If the tax is determined and collected by a government office, why can lenders charge different amounts?  Wouldn’t each lender have to eventually collect the same amount at closing given the house and location, since the money is going to said government office? 3) Title company.. should I use the lender’s suggested title company?  Do title companies and lenders often get together and dupe unwary borrowers, or is the title company selection not that important in the long run?  I mean, all they do is hold the title until you pay off the mortgage right? 4) Why do lenders call insurance "Hazard Insurance" instead of the phrase I’ve heard normal people call it: "Homeowners insurance" ??  It took me a few days to figure out they were the same.

Response:

Question:

Hello, everybody. Okay, here’s my questions and ideas.  Please poke holes into anything that I didn’t think out correctly. I’m getting married April 2003 (…I gather some of you are poking holes already..).  The plan right now is for my fiance to move in with me in January 2003.  She is currently residing in an apartment.  I am in my first house.  By the time we get married, I will have been in the house for only a year.  Since she and her two kids are moving in, I really need to get a bigger house, but we’re willing to wait until after the marriage before we actually move into this new house.  I would like to sell the home myself (no agent) and want to purchase a used, not brand new home. Now that I’ve explained the situation above, let me tell you the plan that I’ve come up with so far and see what you guys think: * Instead of her moving into my house with me, wouldn’t it be a better idea for me to move in with her and we just extend her apt leasing agreement?  I’m asking that because wouldn’t it be difficult to sell my current home if I’m still residing in it.  Wouldn’t it become a huge nuisance to me and my family to live in a house and constantly be asked to leave whenever it’s being shown to a prospective buyer? Shouldn’t a house being sold be completely empty or is having all of my furniture and things in the house a good thing?  Of course, I’m also worried about the timing of selling this house and getting a new house around the same time period. *  Since my fiance has bad credit, I’m guessing that her credit would drag down my credit rating, so I’m guessing that I would apply for a mortgage loan for my new home BEFORE we get married.  If we start living together BEFORE the marriage and she supplies me money, couldn’t I report the money she gives me as "Additional source of income" on the application which would hopefully help get me (us) approved for a higher mortgage amount.  For my current home, I could only get approved for $130k.  My debt to income ratio is not that great.  My fiance knows that her credit would hurt us when buying a new house and has no problem with the things I’m mentioning in this paragraph.  I don’t know if I’ll be able to do the same routine if we’re already married.  Again, I’m trying to come up with a way to do this which would include her good salary, but not her bad credit (chp 7 – bankruptcy 2 yrs ago). *  My loan is a FHA assumable loan.  Of course, if I sell it that way, the person must qualify for the loan.  When I sell the home, I want my name completely off the mortgage.  Here’s my question though.  Does my selling the home FHA assumable make it more attractive to the homebuying public or would it only really be attractive if it was non-qualifying?  Also, with me selling it this way, does it make it easier for me to sell the house without having to get an agent?  With a wedding coming up, of course, I would like to avoid the 6% commission if possible.  I spoke to two other people who did FSBO and they said that it was a total nightmare and if they had to do it over, they would have hired an agent.  I’m just wondering if offering a FHA assumable makes life easier for me or not. *  Any book recommendations???? Thanks everyone.  I’m asking you guys all of these questions because my fiance says that I’m aggravating her and I should be focusing on our marriage, not all this future home stuff.  Maybe your answers will help me relax a little  

Response:

Sorry about the double posting of this message.  This google system gave me an error msg the first time I tried to post this, so I didn’t think it went through. – Hide quoted text — Show quoted text – > Hello, everybody. > Okay, here’s my questions and ideas.  Please poke holes into anything > that I didn’t think out correctly. > I’m getting married April 2003 (…I gather some of you are poking > holes already..).  The plan right now is for my fiance to move in with > me in January 2003.  She is currently residing in an apartment.  I am > in my first house.  By the time we get married, I will have been in > the house for only a year.  Since she and her two kids are moving in, > I really need to get a bigger house, but we’re willing to wait until > after the marriage before we actually move into this new house.  I > would like to sell the home myself (no agent) and want to purchase a > used, not brand new home. > Now that I’ve explained the situation above, let me tell you the plan > that I’ve come up with so far and see what you guys think: > * Instead of her moving into my house with me, wouldn’t it be a better > idea for me to move in with her and we just extend her apt leasing > agreement?  I’m asking that because wouldn’t it be difficult to sell > my current home if I’m still residing in it.  Wouldn’t it become a > huge nuisance to me and my family to live in a house and constantly be > asked to leave whenever it’s being shown to a prospective buyer? > Shouldn’t a house being sold be completely empty or is having all of > my furniture and things in the house a good thing?  Of course, I’m > also worried about the timing of selling this house and getting a new > house around the same time period. > *  Since my fiance has bad credit, I’m guessing that her credit would > drag down my credit rating, so I’m guessing that I would apply for a > mortgage loan for my new home BEFORE we get married.  If we start > living together BEFORE the marriage and she supplies me money, > couldn’t I report the money she gives me as "Additional source of > income" on the application which would hopefully help get me (us) > approved for a higher mortgage amount.  For my current home, I could > only get approved for $130k.  My debt to income ratio is not that > great.  My fiance knows that her credit would hurt us when buying a > new house and has no problem with the things I’m mentioning in this > paragraph.  I don’t know if I’ll be able to do the same routine if > we’re already married.  Again, I’m trying to come up with a way to do > this which would include her good salary, but not her bad credit (chp > 7 – bankruptcy 2 yrs ago). > *  My loan is a FHA assumable loan.  Of course, if I sell it that way, > the person must qualify for the loan.  When I sell the home, I want my > name completely off the mortgage.  Here’s my question though.  Does my > selling the home FHA assumable make it more attractive to the > homebuying public or would it only really be attractive if it was > non-qualifying?  Also, with me selling it this way, does it make it > easier for me to sell the house without having to get an agent?  With > a wedding coming up, of course, I would like to avoid the 6% > commission if possible.  I spoke to two other people who did FSBO and > they said that it was a total nightmare and if they had to do it over, > they would have hired an agent.  I’m just wondering if offering a FHA > assumable makes life easier for me or not. > *  Any book recommendations???? > Thanks everyone.  I’m asking you guys all of these questions because > my fiance says that I’m aggravating her and I should be focusing on > our marriage, not all this future home stuff.  Maybe your answers will > help me relax a little  

Response:

John – First thing I will say is that I have not sold a house, so you can throw everything I say out if you want. But I have bought a few lately, so I can give you the viewpoint from that side. It’s easier to sell a house while it is furnished. It will be more flexible if you put the house on the market and plan to move in with your fiance when you sell it, rather than have her move in and make your sale contingent on you finding a suitable house to buy. Also, if she has kids and the house is too small for all of you, it will not be easy to keep it looking its best for showing. If you have an FHA assumable mortgage, some people will take that as a positive sign, whether they want to assume the mortgage or not. They don’t have to assume your mortgage. It’s their choice. You may have a hard time getting a mortgage for a house in your name if you title the house jointly. I went through a similar situation recently. But it just might be the particular bank I went to, or the region. You should check around with a bank or two to find out what their policies are. Same deal on using her income. You just don’t get to declare ‘additional inome’, you usually have to explain it somehow. Again, check with your bank. If you want the title in your name only, there would be no reason for her to contribute to the mortgage payments. I got a joint title, and joint mortgage. My partner’s name appears on the mortgage application, but no asset or income information, as we qualified based only on my info. They did run a credit check on both of us. That’s pretty much the function of all those background and credit checks – to eliminate the situation that you are describing. That doesn’t mean a bank won’t be flexible if you approach them in the right way. Good Luck rudy

– Hide quoted text — Show quoted text -> Hello, everybody. > Okay, here’s my questions and ideas.  Please poke holes into anything > that I didn’t think out correctly. > I’m getting married April 2003 (…I gather some of you are poking > holes already..).  The plan right now is for my fiance to move in with > me in January 2003.  She is currently residing in an apartment.  I am > in my first house.  By the time we get married, I will have been in > the house for only a year.  Since she and her two kids are moving in, > I really need to get a bigger house, but we’re willing to wait until > after the marriage before we actually move into this new house.  I > would like to sell the home myself (no agent) and want to purchase a > used, not brand new home. > Now that I’ve explained the situation above, let me tell you the plan > that I’ve come up with so far and see what you guys think: > * Instead of her moving into my house with me, wouldn’t it be a better > idea for me to move in with her and we just extend her apt leasing > agreement?  I’m asking that because wouldn’t it be difficult to sell > my current home if I’m still residing in it.  Wouldn’t it become a > huge nuisance to me and my family to live in a house and constantly be > asked to leave whenever it’s being shown to a prospective buyer? > Shouldn’t a house being sold be completely empty or is having all of > my furniture and things in the house a good thing?  Of course, I’m > also worried about the timing of selling this house and getting a new > house around the same time period. > *  Since my fiance has bad credit, I’m guessing that her credit would > drag down my credit rating, so I’m guessing that I would apply for a > mortgage loan for my new home BEFORE we get married.  If we start > living together BEFORE the marriage and she supplies me money, > couldn’t I report the money she gives me as "Additional source of > income" on the application which would hopefully help get me (us) > approved for a higher mortgage amount.  For my current home, I could > only get approved for $130k.  My debt to income ratio is not that > great.  My fiance knows that her credit would hurt us when buying a > new house and has no problem with the things I’m mentioning in this > paragraph.  I don’t know if I’ll be able to do the same routine if > we’re already married.  Again, I’m trying to come up with a way to do > this which would include her good salary, but not her bad credit (chp > 7 – bankruptcy 2 yrs ago). > *  My loan is a FHA assumable loan.  Of course, if I sell it that way, > the person must qualify for the loan.  When I sell the home, I want my > name completely off the mortgage.  Here’s my question though.  Does my > selling the home FHA assumable make it more attractive to the > homebuying public or would it only really be attractive if it was > non-qualifying?  Also, with me selling it this way, does it make it > easier for me to sell the house without having to get an agent?  With > a wedding coming up, of course, I would like to avoid the 6% > commission if possible.  I spoke to two other people who did FSBO and > they said that it was a total nightmare and if they had to do it over, > they would have hired an agent.  I’m just wondering if offering a FHA > assumable makes life easier for me or not. > *  Any book recommendations???? > Thanks everyone.  I’m asking you guys all of these questions because > my fiance says that I’m aggravating her and I should be focusing on > our marriage, not all this future home stuff.  Maybe your answers will > help me relax a little  

Response:

Question:

Forget the savings account.  At today’s interest rates you earn practically nothing.  Better to go and buy some real estate with some of the money you’ve saved up to buy a rig.  Mortgage loans are at their lowest in years. Then hook up with a property management company and pay them to screen renters, collect the mortgage payment and be Mr. Fix-it while you go out and look for another piece of property to buy.  Ten years from now you will have a nice nest egg. Barbara

– Hide quoted text — Show quoted text -> I’m looking to buy my first car and would like one suitable for an > outdoor lifestyle. Mainly something to get me to the trailheads & > perhaps ski resorts here in Washington State. Also kayaking. Ideally I > would like a fuel effecient, used vehicle with 4X4 in the $5,000 to > $7,000 price range. Any suggestions? Is 4X4 even necessary or would > front wheel drive and snow tires suffice? > Now my parents offered to give me their ‘96 4×4 Jeep Grand Cherokee > Laredo. I know they are gas guzzlers but it is a 4×4 and it will save > me $7,000! Any comments on Grand Cherokees? > Take the jeep, and put into a savings account the money that would have been > for paying back a loan each month. > —–= Posted via Newsfeeds.Com, Uncensored Usenet News =—– > http://www.newsfeeds.com – The #1 Newsgroup Service in the World! > —–==  Over 80,000 Newsgroups – 16 Different Servers! =—–

Response:

Only answered first inquiry.  Didn’t attempt to answer the other one.  The answer is a given.

– Hide quoted text — Show quoted text -> Absolute best bar none..   Hummer >  for $7000.. you must be joking. > PS > > I’m looking to buy my first car and would like one suitable for an > > outdoor lifestyle. Mainly something to get me to the trailheads & > > perhaps ski resorts here in Washington State. Also kayaking. Ideally I > > would like a fuel effecient, used vehicle with 4X4 in the $5,000 to > > $7,000 price range. Any suggestions? Is 4X4 even necessary or would > > front wheel drive and snow tires suffice? > > Now my parents offered to give me their ‘96 4×4 Jeep Grand Cherokee > > Laredo. I know they are gas guzzlers but it is a 4×4 and it will save > > me $7,000! Any comments on Grand Cherokees? > > regards, > > kris

Response:

I suspect that some people have trouble comprehending a simple question.  Any 4X4 for free is definitely worth it.  A Grand Cherokee seems like it would work great for what you are doing.  Why you wouldn’t jump on that, I don’t have a clue.  Maybe you want something to call your own…that you choose?  HMM Anyway, I had a 95 Dodge Caravan with a V6.   Ha HA tee hee whatever. That minivan was reliable, carried my canoes, my gear, and three other people with their gear into Northern MN (Boundary Waters)without a sputter.  It still got 25 MPG.  Sure I looked like a soccer mom, but my manlihood is known where I want it to be known.  My other favorite is my IH Scout Traveler.  Not great on gas but definitely worthy in the rough terrain.  My `85 Chev Blazer is not good on gas at all, but very nice to drive in the winter especially during a blizzard.  I would stay away from GM S10’s and Ford Crap altogether.  A low mileage Toyota or Mazda would be a decent choice.  But you’ll pay for their reliabilty up front.  The Jeep is one hell of a deal!  Good Luck – Hide quoted text — Show quoted text -> > > I’m looking to buy my first car and would like one suitable for an > > > outdoor lifestyle. Mainly something to get me to the trailheads & > > > perhaps ski resorts here in Washington State. Also kayaking. Ideally I > > > would like a fuel effecient, used vehicle with 4X4 in the $5,000 to > > > $7,000 price range. Any suggestions? Is 4X4 even necessary or would > > > front wheel drive and snow tires suffice? > > > Now my parents offered to give me their ‘96 4×4 Jeep Grand Cherokee > > > Laredo. I know they are gas guzzlers but it is a 4×4 and it will save > > > me $7,000! Any comments on Grand Cherokees? > > > regards, > > > kris

Response:

> I’m looking to buy my first car and would like one suitable for an > outdoor lifestyle. Mainly something to get me to the trailheads & > perhaps ski resorts here in Washington State. Also kayaking. Ideally I > would like a fuel effecient, used vehicle with 4X4 in the $5,000 to > $7,000 price range. Any suggestions? Is 4X4 even necessary or would > front wheel drive and snow tires suffice? > Now my parents offered to give me their ‘96 4×4 Jeep Grand Cherokee > Laredo. I know they are gas guzzlers but it is a 4×4 and it will save > me $7,000! Any comments on Grand Cherokees?

Take the jeep, and put into a savings account the money that would have been for paying back a loan each month. —–= Posted via Newsfeeds.Com, Uncensored Usenet News =—– http://www.newsfeeds.com – The #1 Newsgroup Service in the World! —–==  Over 80,000 Newsgroups – 16 Different Servers! =—–

Response:

Might I also recommend browsing Edmunds.com for cars.  Hell your lucky… get the 96′ Jeep Grand Cherokee. John

– Hide quoted text — Show quoted text -> I’m looking to buy my first car and would like one suitable for an > outdoor lifestyle. Mainly something to get me to the trailheads & > perhaps ski resorts here in Washington State. Also kayaking. Ideally I > would like a fuel effecient, used vehicle with 4X4 in the $5,000 to > $7,000 price range. Any suggestions? Is 4X4 even necessary or would > front wheel drive and snow tires suffice? > Now my parents offered to give me their ‘96 4×4 Jeep Grand Cherokee > Laredo. I know they are gas guzzlers but it is a 4×4 and it will save > me $7,000! Any comments on Grand Cherokees? > regards, > kris

Response:

Absolute best bar none..   Hummer

– Hide quoted text — Show quoted text -> I’m looking to buy my first car and would like one suitable for an > outdoor lifestyle. Mainly something to get me to the trailheads & > perhaps ski resorts here in Washington State. Also kayaking. Ideally I > would like a fuel effecient, used vehicle with 4X4 in the $5,000 to > $7,000 price range. Any suggestions? Is 4X4 even necessary or would > front wheel drive and snow tires suffice? > Now my parents offered to give me their ‘96 4×4 Jeep Grand Cherokee > Laredo. I know they are gas guzzlers but it is a 4×4 and it will save > me $7,000! Any comments on Grand Cherokees? > regards, > kris

Response:

>Absolute best bar none..   Hummer

Absolutely best what? Was that 1) serious 2) a troll 3) a total failure to comprehend what is being asked? – Hide quoted text — Show quoted text -> I’m looking to buy my first car and would like one suitable for an > outdoor lifestyle. Mainly something to get me to the trailheads & > perhaps ski resorts here in Washington State. Also kayaking. Ideally I > would like a fuel effecient, used vehicle with 4X4 in the $5,000 to > $7,000 price range. Any suggestions? Is 4X4 even necessary or would > front wheel drive and snow tires suffice? > Now my parents offered to give me their ‘96 4×4 Jeep Grand Cherokee > Laredo. I know they are gas guzzlers but it is a 4×4 and it will save > me $7,000! Any comments on Grand Cherokees? > regards, > kris

Response:

> Absolute best bar none..   Hummer

 for $7000.. you must be joking. PS – Hide quoted text — Show quoted text -> I’m looking to buy my first car and would like one suitable for an > outdoor lifestyle. Mainly something to get me to the trailheads & > perhaps ski resorts here in Washington State. Also kayaking. Ideally I > would like a fuel effecient, used vehicle with 4X4 in the $5,000 to > $7,000 price range. Any suggestions? Is 4X4 even necessary or would > front wheel drive and snow tires suffice? > Now my parents offered to give me their ‘96 4×4 Jeep Grand Cherokee > Laredo. I know they are gas guzzlers but it is a 4×4 and it will save > me $7,000! Any comments on Grand Cherokees? > regards, > kris

Response:

> for $7000.. you must be joking. >PS

If anyone knows of any $7k Hummers, e mail me immediately. Steve                ~ Illegitimi Non Carborundum ~

Response:

1. serious question was "Re: Best Car/Truck for the Outdoors"

– Hide quoted text — Show quoted text ->Absolute best bar none..   Hummer > Absolutely best what? > Was that > 1) serious > 2) a troll > 3) a total failure to comprehend what is being asked? >> I’m looking to buy my first car and would like one suitable for an >> outdoor lifestyle. Mainly something to get me to the trailheads & >> perhaps ski resorts here in Washington State. Also kayaking. Ideally I >> would like a fuel effecient, used vehicle with 4X4 in the $5,000 to >> $7,000 price range. Any suggestions? Is 4X4 even necessary or would >> front wheel drive and snow tires suffice? >> Now my parents offered to give me their ‘96 4×4 Jeep Grand Cherokee >> Laredo. I know they are gas guzzlers but it is a 4×4 and it will save >> me $7,000! Any comments on Grand Cherokees? >> regards, >> kris

Response:

>I’m looking to buy my first car and would like one suitable for an >outdoor lifestyle. Mainly something to get me to the trailheads & >perhaps ski resorts here in Washington State. Also kayaking. Ideally I >would like a fuel effecient, used vehicle with 4X4 in the $5,000 to >$7,000 price range. Any suggestions? Is 4X4 even necessary or would >front wheel drive and snow tires suffice? >Now my parents offered to give me their ‘96 4×4 Jeep Grand Cherokee >Laredo. I know they are gas guzzlers but it is a 4×4 and it will save >me $7,000! Any comments on Grand Cherokees? >regards, >kris

Kris, go to www.allpar.com and browse around the forums there.  Those folks have a wealth of information to share for the asking.  No "membership" or "log-in" required.  NOTE: The site is non-commercial (except for the occasional pop-up) and is not connected to MOPAR in any way.   — The probability of someone watching you is directly proportional to the stupidity of your actions.

Response:

> I’m looking to buy my first car and would like one suitable for an > outdoor lifestyle. Mainly something to get me to the trailheads & > perhaps ski resorts here in Washington State. Also kayaking. Ideally I > would like a fuel effecient, used vehicle with 4X4 in the $5,000 to > $7,000 price range. Any suggestions? Is 4X4 even necessary or would > front wheel drive and snow tires suffice? > Now my parents offered to give me their ‘96 4×4 Jeep Grand Cherokee > Laredo. I know they are gas guzzlers but it is a 4×4 and it will save > me $7,000! Any comments on Grand Cherokees? > regards, > kris

Doesn’t get much better for off-road work than a Jeep.  And $7,000 will buy a lot of gas! Matt

Response:

I’m looking to buy my first car and would like one suitable for an outdoor lifestyle. Mainly something to get me to the trailheads & perhaps ski resorts here in Washington State. Also kayaking. Ideally I would like a fuel effecient, used vehicle with 4X4 in the $5,000 to $7,000 price range. Any suggestions? Is 4X4 even necessary or would front wheel drive and snow tires suffice? Now my parents offered to give me their ‘96 4×4 Jeep Grand Cherokee Laredo. I know they are gas guzzlers but it is a 4×4 and it will save me $7,000! Any comments on Grand Cherokees? regards, kris

Response:

Question:

I’m just starting to look for a house and a real estate broker told me over the phone that I should be ready to move fast because, "bond money is coming in at about 4.75% in 2 weeks, depending on down payment." I asked, "Bond money? Whaddaya mean, like Ginnie Mae’s?" She said, "No, It’s federally funded bond money." I didn’t feel like asking the same question again, so I still don’t know what the heck bond money is in regards to a mortgage. Can somebody please clue the clueless in? I’m a first-time buyer, if that’s any help. Also, another clueless question. I thought Fannie Mae’s, Genny Mae’s and Freddie Mac’s were types of mortgages I could take out, kinda like VA loans but for the rest of us. In other words, I thought I could apply to GNMA and FNMA for a mortgage loan. This is incorrect? Thanks

Response:

>Also, another clueless question. I thought Fannie Mae’s, Genny Mae’s >and Freddie Mac’s were types of mortgages I could take out, kinda >like VA loans but for the rest of us. In other words, I thought I >could apply to GNMA and FNMA for a mortgage loan. This is incorrect?

None of those outfits offer loans to consumers. Fannie Mae and Fredie Mac buy mortgages from banks (see http://www.fanniemae.com/ and http://www.freddiemac.com/). Ginnie Mae offers mortgage-backed bonds. See http://www.ginniemae.gov/. —

Response:

>I’m just starting to look for a house and a real estate broker told me >over the phone that I should be ready to move fast because, …. I still don’t know >what the heck bond money is in regards to a mortgage. Can >somebody please clue the clueless in? I’m a first-time buyer, if that’s >any help.

Your broker may also be a clueless shyster trying to take advantage of a first time buyer.  Sounds like a used car dealer pressuring you to buy today.  There are ALWAYS houses for sale and mortgages go up and down… typically in relation to what the market rates are for US Treasury securitites ("bonds" or "bills").  Sounds like the broker is just pressuring you to buy now so that he/she can get a commission sooner (nothing wrong with that unless they bullshit you to do it) and may be spouting off something they don’t understand fully either. good luck! -v.

Response:

> I’m just starting to look for a house and a real estate broker told me > over the phone that I should be ready to move fast because, "bond > money is coming in at about 4.75% in 2 weeks, depending on down > payment."

I have some good advice for you.  Go to the library and study the difference between a sellers real estate agent and a buyers real estate agent.  You have been talking to a sellers agent, and you are headed for trouble, if you don’t learn the in and out of house buying before you buy, you are going to be in even more trouble.  Just think, this is one of the largest purchases you’ll make in your life, and you are going in knowing nothing about how to select and negotiate terms for a house.  Look at books on house buying – several!!! — Tom J http://www.geocities.com/aviontravelcade/ http://www.geocities.com/tomj_ga/ Are we having fun yet?

Response:

Question:

>First your realestate agent and mortgage company should be helping you.

If it’s the real estate agent who showed the house, it’s very likely that this is the sellers’ agent and is of absolutely no good to the buyer.   Peter should secure representation on his own, either a buyers’ broker or an attorney. I have never heard of a mortgage company ‘helping’ a loan applicant. — chmod -R 666 *

Response:

– Hide quoted text — Show quoted text ->I hope I’m not in violation of this group’s FAQ or other regulations regarding >posting, but as we are greatly excited about our offer being accepted without a >counteroffer and as COE is to be completed in 26 days, I ask you, what do we do >now?  We trust we’ll get a mortgage loan and we intend to have the home >inspected; other than that is there anything we need to know? )   >Thank you for any information you can provide this neophyte, whether in the >group or by e-mail.   >PS: I did kick the walls and the house continued to stand!  :o) >Peter

Have the inspection done first.  That way if anything comes up that allows or makes you to back out of the offer you won’t have spent money on the application fee, etc. I hope you used an attorney to draw up your contract.  Probably not, so good luck in your endeavors.   Trip

Response:

- Hide quoted text — Show quoted text – > (PeterP6268) says: >I hope I’m not in violation of this group’s FAQ or other regulations regarding >posting, but as we are greatly excited about our offer being accepted without > a >counteroffer and as COE is to be completed in 26 days, I ask you, what do we > do >now?  We trust we’ll get a mortgage loan and we intend to have the home >inspected; other than that is there anything we need to know? )   >Thank you for any information you can provide this neophyte, whether in the >group or by e-mail.   >PS: I did kick the walls and the house continued to stand!  :o) >Peter >Have the inspection done first.  That way if anything comes up >that allows or makes you to back out of the offer you won’t >have spent money on the application fee, etc. >I hope you used an attorney to draw up your contract.  Probably not, >so good luck in your endeavors.  

Make sure to hire your own inspector, not one recommended by the seller’s realtor. Get recommendations from friends and co-workers. Don’t hire just any warm body, and don’t try to cut corners and hire someone just because he’s cheap. You’re spending tens, maybe hundreds, of thousands of dollars to buy the house. Compared to that, what’s a few hundred spent for a competent inspection to make sure the house is sound? Even hiring an inspector recommended by your own realtor may not be the best idea. When we sold our house last summer, the buyers hired the inspection company recommended by their own realtor, and the inspector was an idiot. Our realtor said "What do you expect on 24 hours notice? The fact that they weren’t busy, in the middle of the summer, should tell you something!" So the other lesson here is to set up the inspection as soon as possible. If the inspector is any good, he’s probably booked a few days in advance, at least. The last time we bought a house, I made the appointment for the inspection before we had an accepted purchase offer. I had worked with this inspector before, and knew he was both good and busy. I phoned him as soon as the negotiations progressed far enough that I felt confident we would be able to reach an agreement within less than a week. — Doug Miller, dlmiller/at/netdirect/dot/net Ted Kennedy’s car has killed more people than my gun.

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Best thing you can do is make sure you have an agent representing YOU not the seller and get a good home inspector.  If you are a ‘handy’ person I would try to go with him to see if (s)he really knows about inspections and how/where things are in the house before you plunge in.  They are paid to find problems and you later decide if the price of the house is worth it given the problems found by the inspector. Sale should be contingent on a satisfactory inspection report. Microsoft has a site with crime report statistics somewhere (I lost the link) but it will tell you about crime in the area of the new house.  Drive by several times at different times/days to see what the neighborhood is like.  Late night on weekends should give a good heads up as to the night life of your neighbors. Good luck! Noel. – Hide quoted text — Show quoted text ->I hope I’m not in violation of this group’s FAQ or other regulations regarding >posting, but as we are greatly excited about our offer being accepted without a >counteroffer and as COE is to be completed in 26 days, I ask you, what do we do >now?  We trust we’ll get a mortgage loan and we intend to have the home >inspected; other than that is there anything we need to know? )   >Thank you for any information you can provide this neophyte, whether in the >group or by e-mail.   >PS: I did kick the walls and the house continued to stand!  :o) >Peter

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I’m in the same type of situation and would like to know how to find a good lawyer who could work with me on the closing of my house.  Are these lawyers specialized in mortgage situations or freelance type?  Also, why would the sellers agent insist on his own pick for title agent? From Phoenix, Arizona RTB PHX

– Hide quoted text — Show quoted text ->I hope I’m not in violation of this group’s FAQ or other regulations regarding >posting, but as we are greatly excited about our offer being accepted without a >counteroffer and as COE is to be completed in 26 days, I ask you, what do we do >now?  We trust we’ll get a mortgage loan and we intend to have the home >inspected; other than that is there anything we need to know? ) >Thank you for any information you can provide this neophyte, whether in the >group or by e-mail. >PS: I did kick the walls and the house continued to stand!  :o) >Peter

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I’m with a title company in Houston.  In most cases, the docs you will sign at closing are all FNMA (Fannie Mae) boiler-plate docs.(i.e. Promissory Note, Deed of Trust, etc.). I hate to see someone retain an atty. and pay atty. fees for basically something that cannot be changed by anyone. You either accept the terms you had previously agreed to or you don’t. Best caveat I can offer is to thoroughly understand the Promissory Note as to (1)correct principal & interest (2)term is correct [15 or 30 year payout] (3)any prepayment penalty.

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I agree.  Any person who is recommended by anyone who’s profit is linked to the sale going through, should be suspect.   Make sure anyone picked is accredited and carries "omission" insurance. – Hide quoted text — Show quoted text – > Even hiring an inspector recommended by your own realtor may not be the best > idea.

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You should have asked this question before you even made an offer and the answer is to get a real estate lawyer to protect "your" interests. I’m sure you’ve already signed lot’s of legal documents/contracts.  Did you really read and understand all the fine print and ramifications? (most of them were drawn up by lawyers who represent either the seller or realtors vs. you!) A home is a significant investment and you really need someone looking out for your legal interests.  The realtors (both listing and selling agents)are paid by the seller and that’s where there interests lie. The mortgage company simply wants to minimize any risk to them and they don’t really care about the buyer’s interests.  Home inspectors typically have a closer relationship to the realtors than the buyers since that’s where their work typically comes from. You need to get a lawyer on your side and I’d recommend you do it ASAP. – Hide quoted text — Show quoted text -> I hope I’m not in violation of this group’s FAQ or other regulations regarding > posting, but as we are greatly excited about our offer being accepted without a > counteroffer and as COE is to be completed in 26 days, I ask you, what do we do > now?  We trust we’ll get a mortgage loan and we intend to have the home > inspected; other than that is there anything we need to know? ) > Thank you for any information you can provide this neophyte, whether in the > group or by e-mail. > PS: I did kick the walls and the house continued to stand!  :o) > Peter

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>Even hiring an inspector recommended by your own realtor may not be the best >idea. When we sold our house last summer, the buyers hired the inspection >company recommended by their own realtor, and the inspector was an idiot. Our >realtor said "What do you expect on 24 hours notice? The fact that they >weren’t busy, in the middle of the summer, should tell you something!" So the >other lesson here is to set up the inspection as soon as possible. If the >inspector is any good, he’s probably booked a few days in advance, at least.

We closed on our first home Dec. 15th, just two weeks after making the offer. The rushed closing benefitted both parties but was something of a hassle to get the mortgage company to come through on time.  I started lining up the inspection the day we heard our offer was accepted; we’d given a standard (in our area at least) three business day window to have the inspection done and amend our offer if necessary.  I called every inspection service in the local phone book as well as the four our agent recommended.  I spoke with the inspectors at all of them (not the receptionists) and went with the one that sounded the most competent– he turned out to be a code compliance inspector for three local cities that also does home inspections on the side, and had been a local general contractor for 25 years before that.  The inspection took about three hours and we had a comprehensive written report by fax the next morning, including phone numbers for the various people he’d mentioned to me during the inspection (sewer service, insulation guys, etc.). In all, I was very pleased with the inspection and felt I got more than my money’s worth ($195) in information from him as he performed the inspection– he anticipated all my questions and offered advice about some remodelling projects, gave me cost estimates for various things, and even told me a fair bit of history about the building based on his local experience ( the house was built in 1958 with all locally-made, custom windows, cabinets, etc. that he could identify). Though I had basically uncovered everything that was wrong with the house before the inspection (minus a bit of asbestos wrap on some pipes) I felt the money was very well spent and was glad we had the inspection contingency on the offer. -Derek — Derek R. Larson           Indiana University        Dept. of History  "Let me go on record as stating that Mountain Dew, although a refreshing   and enjoyable beverage, is NOT A CONTRACEPTIVE."  -Ann Landers

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I hope I’m not in violation of this group’s FAQ or other regulations regarding posting, but as we are greatly excited about our offer being accepted without a counteroffer and as COE is to be completed in 26 days, I ask you, what do we do now?  We trust we’ll get a mortgage loan and we intend to have the home inspected; other than that is there anything we need to know? )   Thank you for any information you can provide this neophyte, whether in the group or by e-mail.   PS: I did kick the walls and the house continued to stand!  :o) Peter

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First your realestate agent and mortgage company should be helping you. Depending on  the age of the home, you need a home inspection and or structrual inspection.  Dont rely on the mortgague inspection. Get your own inspection that you pay for. might want to find out why no counter offer was made, Is it a lemon or does someone need to move, get out of the house? Some of this should be done before making an offer but get it done ASAP after your offer, Your inspection clause can get you out of most offers if need be. Get a list of utilities servicing the house, Get information about the area if your new to it.Call the police get info about crimes, issue in the area. If you can find an officer ask him. I always like to take a couple of drives to the office starting at the new home. What is traffic going to be like. – Hide quoted text — Show quoted text -> I hope I’m not in violation of this group’s FAQ or other regulations regarding > posting, but as we are greatly excited about our offer being accepted without a > counteroffer and as COE is to be completed in 26 days, I ask you, what do we do > now?  We trust we’ll get a mortgage loan and we intend to have the home > inspected; other than that is there anything we need to know? ) > Thank you for any information you can provide this neophyte, whether in the > group or by e-mail. > PS: I did kick the walls and the house continued to stand!  :o) > Peter

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– Hide quoted text — Show quoted text -> I hope I’m not in violation of this group’s FAQ or other regulations regarding > posting, but as we are greatly excited about our offer being accepted without a > counteroffer and as COE is to be completed in 26 days, I ask you, what do we do > now?  We trust we’ll get a mortgage loan and we intend to have the home > inspected; other than that is there anything we need to know? ) > Thank you for any information you can provide this neophyte, whether in the > group or by e-mail. > PS: I did kick the walls and the house continued to stand!  :o) > Peter

Peter, you are not in violation of the group, but you do have the cart in front of the horse. It sound like you are buying a house using the sellers agent. But I do hope you do have your own buyers agent. I hope that in your offer, it had a right of rejection if it didn’t pass inspection, by your selected inspector. I hope you are aware of what and where the utilities hooked to the house are. If you have school age kids, I do hope you know what the schools are like serving the area. You will need your own closing attorney before closing time. You really need to go the the library and get a book on home buying and read it, even at this late date.  After all, it’s one of the largest purchases most people make in their lifetime, unless it’s a newer, larger home. Tom J

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