David 's Blog

For many, 2010 will undoubtedly prove to be one of the toughest years in the mortgage industry. The underwriting guidelines still continue to change daily, government regulation and intervention is at an all-time high, legislation is being proposed to change compensation models for Loan Originators, more fraud verification policies are being put in place to protect lenders adding confusion, borrowers are forced to jump through ridiculous hoops and great mortgage professionals are exiting our industry in droves. Let me repeat that.... "Great" mortgage professionals are exiting our industry, not "Good", but "Great".

 I'm sure you know how we got where we are at, but do you really know where we are at? Everyday I speak with my friends from markets across the United States that are considering changing careers. The same questions come up, "How is it possible to create a great experience for a borrower with this environment?" I don't pretend to know the answer because, in my opinion, there isn't one.

• Telling your borrower three months after closing they need to provide proof they've personally paid a credit card on their credit report for 12 months, showing their bank statements for the last 12 months. How and why would they have trust and confidence to refer their friends and family?
• When you receive a loan approval with 45 prior to doc conditions, then it takes 45 minutes to explain why so much documentation is needed. How are your clients to have the trust and confidence to refer their friends and family?
• Loan guidelines forcing Mortgage Professionals to order two appraisals on a property, after one has already been received $14,000 above selling price. How are today's clients to have trust and confidence to refer their friends and family when they feel they've been mistreated and forced to pay excessive costs?

When this happens over and over and over on every transaction, why would Real Estate Professionals continue to refer their clients? It's simple... they don't. They move on to the next Loan Officer. Your past clients don't refer you anymore. You soon realize you don't have a passion for this industry anymore and "Even Great Warriors Die In Battle."

For those that make it through this, we are the survivors, we are the fighters and we are the ones who will shape the perception of this industry so many love. Live the Dream - Carpe diem quam minime credula postero!

FREE CONTINUING EDUCATION CLASS FOR ARIZONA REAL ESTATE PROFESSIONALS

Have your clients asked you any of the following questions and you just weren't quite sure how to answer them?

• Is it better to file bankruptcy or to foreclose?
• What is a short sale and how can it affect my credit?
• What about a Deed-In-Lieu of Foreclosure?
• Foreclosure vs. Short Sale - which is better for me?
• Many more items to cover!!! 

You are invited to attend the continuing education seminar " Answers To Tough Questions About Credit In Today's Market" on Thursday, February 25th from 1:00 pm - 4:00 pm.  This event is FREE and provides (3) three Accredited General Hours towards your continuing education requirements.
 
David Krushinsky, a Certified Mortgage Planning Specialist, will address those tough questions regarding credit in today's real estate industry.  

Don't miss out on this opportunity to learn about new and changing information and get your questions answered by a mortgage professional. 

The Seminar will be held at the W.J. Bradley Mortgage Capital Corporation Conference Room located at 9237 East Via De Ventura Suite #100 Scottsdale, AZ 85258 on Thursday, February 25th from 1:00pm - 4:00pm.
 
Please RSVP to reserve your seat.  For any questions or to RSVP, please contact David Krushinsky at 623-594-7600 or email david@dkhomeloans.com 
 
Hope to see you there!
 
Accredited by C. David McVay School - 3412 E. Dunlap Ave., Phoenix, AZ 85028
602-749-2098 Email: dmcvay@cdavidmcvayschool.com ; www.cdavidmcvayschool.com

So you're in the market to purchase a home in Phoenix, Arizona?  You've saved your money, but were hoping to find something with a low down payment.  Unfortunately, most of the affordable houses in your price range are unable to be financed with a FHA home loan.  It is beginning to seem like your only option may be Conventional financing, which requires a significantly larger down payment. 

There is another option.  It is possible to take advantage of today's low interest rates and affordable home prices in Phoenix, while still benefiting from a reasonable down payment.

You can purchase a home, which is owned by mortgage giant Fannie Mae, for as little as 3% down.  Fannie Mae currently owns many homes taken over through the foreclosure process in Arizona.  These homes can be financed through their new HomePath^® program, specifically for Fannie Mae REO properties.  Listed below are some of the highlights. 

HomePath^® Financing Highlights

You can search for Fannie Mae REO's at in Arizona by clicking here.  Fannie Mae is also offering a 3.5% incentive* for buyers who purchase and close on a Fannie Mae-owned home between January 28 and April 30, 2010.  Buyers purchasing properties listed on this site that are closed within this period may receive up to 3.5% of the final sales price for:

• Closing costs;
• The purchase of new Whirlpool® appliances by Fannie Mae; or
• A mix of closing costs and appliances, at the buyer's discretion, up to the maximum 3.5%.

Our mortgage team works with many Real Estate Professionals that specialize in locating these homes for our borrowers.  Please feel free to contact us for a referral of someone who is qualified to assist you in writing a contract, negotiating terms and obtaining the best long-term strategy for you and your family.  Purchasing a home involves many other aspects than just negotiating a sales price.  It's very important to know, upfront, how to properly structure your real estate offer upon submitting your contract to Fannie Mae.  Contact us today to begin the process.

Does creative financing still exist or are there ways to purchase homes in Phoenix without traditional financing these days?  If you're like me, you're probably saying, "No way".  If so, read on. 

Recently, I had the privilege of speaking with a real estate investor, by the name of Nick Johnson, that specializes in Short Sales and "Subject To" purchases.  Nick and I got introduced through a mutual friend, Matt Rosen @entrepreneurHI, from Twitter.  I learned a lot about Nick after talking with him for only an hour on the phone.  I learned all about his high regard for his family, his unparalleled ethics and his business philosophy.  Additionally, I also learned he is also the author of the eBook, "Subject2".    

While most of us in the Phoenix area and beyond are all too accustomed with the term Short Sale, "Subject To" was not a practice in which I was all too familiar.  Being the type of individual that prides myself on keeping current with what is available in today's marketplace, I immediately had to do some investigative research.   I figured that I would share a little overview of what I discovered. 

"Subject To", also referred to as "Subject 2" or "Sub2", is a form of creative financing in which the seller deeds the property to the buyer while keeping the existing mortgage note fully intact.  The buyer, typically a real estate investor, simply makes the mortgage payments on the existing mortgage.  These transactions can provide an array of benefits for both the buyers and sellers.

 The buyers do not need to go through the headache (I know all about this) of getting qualified for a new mortgage note.  There is no credit, income or asset verification required.  The investors own the property, but do not assume the loan.  This leaves personally liability on the sellers.  Typically, the main advantage for buyers in these transactions is acquiring a property at a much lower interest rate than if they were to purchase the property outright.

It may seem unbelievable to most of us that a homeowner would deed over their property to another individual, but there are many reasons that sellers find this a great option.  The primary reason that many sellers opt for Sub2 financing is to obtain debt relief.  Some are facing foreclosure and unable to sell their property due to lack of equity.  Owning a property that is "underwater" is a concept that many Arizona homeowners can relate all too well.  Others simply want a fast sale.  They may be moving, transferring jobs, getting married, divorced or a whole list of various scenarios.  

Subject2 contracts should be implemented by a knowledgeable real estate professional.  We've all witnessed the dangers of working with someone who claims to be an expert but has no more expertise than you or me.  A sub2 contract is essentially the same as a standard state approved contract.  The only difference is the 'sub2′ addendum states the terms of the existing loan. 

In today's credit climate, we all know someone who may be struggling to qualify for a loan or continue making their monthly mortgage payments.  I would encourage you, no matter what your preconceived ideas of traditional financing are, to have them contact me before it's too late.  There are many times that I may not be able to help them but I can guide them in the right direction.  Don't let them become just another statistic.

So you've decided that you want to buy a home in Phoenix, AZ.  Besides the many advantages to living in the Valley, interest rates reaching all-time lows coupled with the recent plunge in home prices make Phoenix a very affordable and attractive option.   Nowadays, it is actually cheaper to purchase a home in the Phoenix area than rent.  The only down side to this scenario is that you're short on cash for a down payment.  Unfortunately, you cannot get a gift from your family, you've already tapped out your 401K, you are not eligible for a VA loan, you make too much money to qualify for down payment assistance, and you have no desire to live in a rural area.  So, the question is..... What can you do without a down payment???  Meet the qualifications for the $100 Down Payment HUD Home Program.

Let's take a trip back in time and describe why the availability to finance a home with the $100 Down Payment HUD Home Program arose.  During the housing boom, many of the homes in Phoenix were financed with Conventional loans.  Prior to the run-up in home prices, many first-time homebuyers used FHA loans to purchase housing.  Once home prices started rising at unsustainable levels; homeowners began to refinance their FHA loans into Conventional loans to pull cash out, remove mortgage insurance, and lower their monthly obligations.  Once these homes, now with Conventional financing, went into foreclosure, the banks began to sell their inventory at a discounted price.  At the beginning of 2007, many of the new homebuyers were forced to use a FHA loan due to inability to finance their purchases with Conventional mortgages in Phoenix.  These homebuyers were unknowingly still buying homes at inflated home prices.  Sadly, many of these homes purchased in 2007 and 2008 with FHA loans are currently going into foreclosure.  In most cases, the current values of these homes are significantly less than what is owed.  The $100 Down Payment HUD Home Program is a result of a FHA borrower foreclosing and HUD repossessing the home that is now for sale.    

So Who Qualifies? 

 Now that you've been able to determine you may be able to qualify, here is an outline of the next steps you need to take.

Step 1 - Get pre-qualified for the $100 downpayment HUD Homes Program

Step 2 - Choose search area and type of home (i.e. North Phoenix - 3 bedroom, 2 bath with 1,500 square feet or more)

Step 3 - Create a login and password at our customized database to search homes

Step 4 - Contact us to match you with one of our Realtor partners that can assist you with viewing the homes you are intrested in.  Please note, not all Realtors are trained and educated for HUD homes.  It's very important to work with one of our preferred partners that has experience with HUD homes.

Step 5 - Submit an offer, get acceptance and go through the loan process.

Step 6 - Close on your purchase using an FHA-insured loan.

It can be a very simple process but the first step is to get pre-qualified.

If we believe foreclosure is in our clients best interest, should we propose this as an option and recommend they seek legal counsel?

This morning I was thinking about the many clients I have who are underwater 50-70% in negative equity.  The more I thought about the reality of those clients getting back to the break-even point, where their home is worth what they paid for it, the more I questioned what my advice to them should be.  In Arizona, our foreclosure laws are extremely favored toward homeowners.  I'm not going to pretend to be an expert and give you all the scenarios but, often times, the borrower can walk away without any recourse, or deficiency.    

This brought me to think about the letters behind my name, CMPS.  I am a Certified Mortgage Planning Specialist, and have been since January 2007.  What is CMPS you ask?  CMPS is a training, certification and ongoing membership program for financial professionals who provide mortgage and real estate equity advice. The CMPS Institute was formed as a joint effort by leaders in the mortgage and financial planning industries to raise professional standards among mortgage professionals and integrate sound financial planning advice into the mortgage process.   Note the last sentence, sound financial planning advice.  This leads me to my question.

What would your advice be to a borrower owes $220,000 on a home that's worth $70,000?  Should they continue to pay their mortgage if they have suffered income loss but still have assets?  What if they were advised by legal counsel there is no recourse if they walk away versus do a short sale, where there may be recourse?  One could argue that bad economic advice would be to continue paying on an asset that could take more than 20 years to see the original purchase value versus fixing your credit after foreclosure, which could only take 3-5 years.  The average appreciation rate for Arizona is 5.73025% for a 30 year period.  The 5 and 10 year averages are the same, depending on the years you start and stop. 

Lenders have loss-mitigation departments, which are staffed and have legal counsel.  Why shouldn't a borrower mitigate their own losses too?  Sometimes it's really just a business decision that one faces.  Many business contracts have been broken by the politicians, the people who run these banks and the banks themselves.  Is it immoral?  Is it unethical?  Are we outraged to hear about it??  What do you think?  

Phoenix home buyers looking to take advantage of favorable interest rates, reduced home prices, and a low down payment should consider an FHA loan when buying a new home in which to live.  The Federal Housing Administration (FHA) is a part of the U.S. Department of Housing and Urban Development (HUD).  Since FHA loans are insured by the government, it's easier for a lender to offer you the option of a lower down payment.  FHA home loans allow first time home buyers and current home owners to purchase a home with a 3.5% down payment.  In order to qualify for a FHA loan, you will need to ask yourself the following questions......

READ THE REST OF THE ARTICLE HERE.................

For many years I've attended Sales Mastery, Business Plan or some type of mortgage seminar to continue learning new, innovating ways to build my business.  Many of the top loan officers in our company, and other companies, also attend these events.  It wasn't uncommon for these seminars to have over 3,000 people in attendance.  Unfortunately, there was no Sales Mastery or Business Plan to attend this year.  

The Internet is an amazing tool that we can use to leverage our knowledge, relationships and advertising.  Websites like Twitter, Facebook and Linked In have allowed me the opportunity to connect with some brilliant loan officers in other parts of the country.  I read their blogs, their tweets and look at their status updates on Facebook.  I do what they're doing to help grow my own business.  I write about my own mistakes and also the success that my team has and post those articles in my blog.  I put links on Twitter, Facebook and embed my articles in Linked In.  

In the short time I've been doing this, I've built relationships with many of these people.  Chris Brown helped me get my blog started last year.  Brian Brady gave me a few tips on the phone about writing blogs, which has resulted in about 3-5 leads per week.  I've also received many referrals from loan officers in different states and locally in Phoenix.  I've even been contacted to write articles for print magazines, such as Scotsman Guide.  All of this because of social media.    

The game is changing.  Gone are the days of advertising with flyers and magazines.  Sending out 1,500 mailers to people "hoping" you get a 1% return on your efforts is a losing battle.  The Washington Post just announced yesterday they are shutting down all of their offices around the country except the one in Washington D.C.  If today's loan officer doesn't embrace the new rules within our own business, we will be left behind just like the Post.  During the last 10 years, the media has taught everyone they must get prequalified before even looking at homes.  Today's consumer is turning more toward the Internet and we must learn how to show up in their search results on the first page of Google.  

I'm using this as an invite to learn a new strategy, implementation and execution from the best of the best.  The event is called Mortgage Revolution and is dubbed "a grass-roots movement created by mortgage professionals for mortgage professionals".  I am committed to attending this event January 10-12, 2010 at the Cobb Galleria in Atlanta, GA.  Early-Bird special is $149 until Dec. 1, 2009, then the regular price thereafter is $199. This is a non-profit event and the goal is to raise $250K for charity so that the media has something positive to say about our industry.  To find out more visit their website or shoot me an email.  I hope to see you there.      

Located in the Southwestern part of the United States, Arizona is a state known for its wonderful weather, beautiful scenery and national parks. It is one of the ideal spots for active lifestyles and is easy to see why many potential home buyers are choosing Arizona as their destination of choice. 

The path to home ownership is an exciting time for you and your family, but it is one that may bring additional responsibilities into your life.  Having the assistance of an honest and experienced Arizona mortgage professional can make all the difference during this process. 

Homes that are newly purchased may require additional remodeling or repairs. The FHA 203k loan may be the perfect opportunity to make the necessary repairs for safety and cosmetic upgrades.  There are also other options for VA and FHA loans for "Going Green" on your home mortgage.  Building or remodeling your home with eco-friendly materials can lower utility and water bills, achieve federal tax credits, higher real estate value, purer air quality, reduced waste sent to landfills and conservation of natural resources.

What is Asbestos?

Asbestos is the name given for a group of fibrous minerals that were mined for their qualities as fire resistant, insulation and high durability. Asbestos may still appear in roof shingles, dry wall, attic insulation, popcorn ceilings, joint compounds and electrical wires. It's flame resistant and durable qualities made it an ideal choice for many industries.  Homes built before 1980 may still contain asbestosmaterials. There are now many eco-sustainable options that make the use of asbestos obsolete.

Tips & Important Information on Asbestos

If any asbestos is located in your home, the best thing to do is leave it un-disturbed until a home inspector can determine the best course of action. In many situations, the best action is no action. Asbestos that is disturbed or damaged due to age is known as "friable" asbestos. This is a concern because its toxic fibers can easily circulate and become inhaled.

Although asbestos exposure does not always lead a related illness, long term inhalation of its fibers can cause a rare but severe ailment known as malignant mesothelioma. Asbestos-related illnesses may not appear until 20 to 50 years after exposure, which makes mesothelioma diagnosis even more difficult.

The removal of asbestos must be performed by licensed abatement contractors who are trained in handling dangerous materials. They work under state and federal regulations to ensure no health concerns arise from improper removal.

Arizona "Going Green"

The Arizona Department of Environmental Quality is committed to protecting the public from asbestos-containing materials by educating and assisting with asbestos removal, transport and disposal. The removal of hazardous substances must be performed by professional abatement contractors who are trained in these matters. Eco-friendly options must be considered when the removal is complete.

Implementing green methods of building can have positive environmental, health and economic benefits. These include: Conservation of natural resources, enhance air quality, protect eco systems, energy sustainability, increase property value, improve quality of life, improvement of pulmonary and cardiac health, Reduction of waste.

Environmentally safe alternatives to asbestos include the use of cotton fiber, lycnene and cellulose. There is no need for any products used in construction to be made from asbestos, yet over 3,000 work and home-based materials still contain this toxin.

With growing education and technology in green sustainable energy and building resources, the state of Arizona has taken actions to ensure safety and health is a top priority in this great state. If you are looking for more information on asbestos or mesothelioma please visit www.asbestos.com.

If you're considering remodeling or rehabilitating your home, the FHA 203k program may fit your needs.  If you want more information on the FHA 203k or other rehabilitation loans please contact The Krushinsky Team at 602.695.7575 or david.krushinsky@wjbradley.com.

FREE CONTINUING EDUCATION CLASSES FOR ARIZONA REALTORS

You are invited to attend the continuing education seminar " Answers To Tough Questions About Credit In Today's Market" on Wednesday, January 13th from 2:00 pm - 5:00 pm.  This event is FREE and provides (3) three Accredited General Hours towards your continuing education requirements.
 
David Krushinsky, a Certified Mortgage Planning Specialist, will address those tough questions regarding your clients credit in today's real estate industry.  The following are a few key topics that will be discussed:

   -Is it better for your client to file bankruptcy or to foreclose?
    -What is a short sale and how can it affect your clients credit?
    -What about a Deed-In-Lieu of Foreclosure?
    -Foreclosure vs. Short Sale
    -What should my clients do???
    -Many more items to cover!!!

 
Don't miss out on this opportunity to learn about new and changing information and get your questions answered by a mortgage professional. 

The Seminar will be held at the Foothills Recreation & Aquatic Center 5600 West Union Hills Drive, Glendale, AZ 85308 on Wednesday, January 13th from 2:00pm - 5:00pm.
 
Please RSVP to reserve your seat.  For any questions or to RSVP, please contact David Krushinsky at 623-594-7600 or email david.krushinsky@wjbradley.com 
 
Hope to see you there!
 
Accredited by C. David McVay School - 3412 E. Dunlap Ave., Phoenix, AZ 85028
602-749-2098 Email: dmcvay@cdavidmcvayschool.com ; www.cdavidmcvayschool.com