Another challenge for the Columbus Ohio real estate market - no more down payment assistance for first time home buyers.

Ohio First Time Home Buyer Down Payment Assistance programs - Temporarily Discontinued - Effective October 13, 2008
I received a memo regarding OHFA - Ohio Housing Finance Agency’s First Time Home Buyer Program which has been providing down payment assistance grants, enabling Ohio first time home buyers to buy a home with no money down in Central Ohio. It appears the financial crisis is now affecting Ohio’s ability to help first time home buyers make buying their first home more affordable. I have had many first time home buyers over the years utilize this program for their down payment and am sad to see this program being discontinued. It will certainly have an impact on the Columbus Ohio real estate market, with even less buyers qualified to buy homes now, especially homes under $150,000.

Here’s the core message from the memo: As the financial market continues to be volatile, the Ohio Housing Finance Agency is unable to meet the needs of first time home buyers because they don’t have the capital to continue providing down payment assistance grant money. The recent elimination of no money down gift loan programs probably increased the number of buyers that were seeking down payment assistance from OHFA, since that was the only other way to obtain down payment assistance money. The Ohio Housing Finance Agency (OHFA) Ohio first time home buyer program volume has been increasing at a rate they can no longer sustain so they have to discontinue providing down payment assistance grants for first time home buyers.

There are now very limited ways for Central Ohio home buyers to buy homes with no money down in the Columbus Ohio area. A few options still remain including: obtain a gift for your down payment from a family member, 100% VA loans for veterans and 100% mortgage loans for medical doctors.

Also HUD has a great program right now where you can buy a HUD home in Central Ohio, with only $100 down plus they’ll provide a $2500.00 repair credit that can be used toward closing costs or repairs. If you’re open to considering a HUD foreclosure home in Central Ohio, it’s a great deal to take advantage of, while it lasts.

GET FREE COLUMBUS AND CENTRAL OHIO REAL ESTATE AND HUD HOME LISTING UPDATES

If you’re interested in buying a home in Central Ohio, I can help make your home search easier by emailing new listing updates from the Columbus Ohio MLS. You’ll get all the details, photos, virtual tours and price change updates too. The Columbus Ohio MLS includes all real estate listings in Central Ohio, by any real estate agent/broker in Central Ohio plus HUD Repo, bank owned foreclosure properties, short sales and more. To get started complete my Columbus Ohio Home Finder Service Form OR call Petra (Pay tra) at 614-895-0496 anytime from 8am-10pm EST.

Columbus and Central Ohio HUD home foreclosure update

The Columbus Ohio real estate market offers a wide variety of homes for sale, including HUD Repo and bank owned foreclosure properties. Since buying HUD Repo, bank short sale and bank foreclosure properties is so popular in the Columbus Ohio area, I thought I’d share this update on a great program to buy HUD homes in Columbus and Central Ohio for ONLY $100 DOWN. FHA has extended the $100 HUD Repo Program that allows borrowers to purchase HUD-owned properties.

The Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA) are extending the Sales Incentive Program in Ohio, for OWNER OCCUPANTS only. This Ohio HUD program offers huge sales allowances for owner occupants:

• Buy HUD homes for ONLY $100 DOWN PAYMENT

• Buyers using FHA receive $2,500 at closing to use on repairs, closing costs or to lower their mortgage amount.
• Buyers can obtain up to 3% in seller paid closing cost assistance.

Many HUD homes in Columbus and Central Ohio that I’ve seen typically need work. So it’s important to note that in addition to requiring only a $100 down payment for HUD homes, borrowers may also obtain financing up to 110% of the loan amount to have extra money for repairs. Appraiser-required repairs up to $5,000, all closing costs and pre-paid expenses may be financed up to 110% of the lesser of the appraised value or purchase price.

ALL COLUMBUS AND CENTRAL OHIO HUD HOMES ARE LISTED ON THE COLUMBUS OHIO MLS

The Columbus Ohio MLS - Multiple Listing Service is a database of real estate listings in Columbus and Central Ohio used by all Columbus Ohio REALTORS, who are members of the Columbus Board of REALTORS, to post their real estate listings. Since HUD homes are listed by Columbus Ohio Realtors, you’ll find them listed on the Columbus Ohio MLS. In fact, Columbus and Central Ohio HUD homes are not available to bid on until they are posted on the Columbus Ohio MLS and you must go through a REALTOR to place your bid.

In addition, banks also list their foreclosure properties with Columbus Ohio Realtors. So you’ll find bank owned foreclosure properties listed on the Columbus Ohio MLS - Multiple Listing Service as well.

As a Columbus Ohio REALTOR, I have access to all HUD homes in Central Ohio.

As a full-time REMAX Columbus Ohio Realtor and Accredited Buyer Representative, I’d be happy to help you find your ideal home - whether it’s a HUD Repo, bank foreclosure, short sale or negotiate to get you a good deal on any home listed for sale in Central Ohio. Plus, I’ll look out for your best interests throughout the process, AT NO COST TO YOU. That’s right - it doesn’t cost anything to have a buyer’s agent working for you.

GET FREE COLUMBUS AND CENTRAL OHIO HUD HOME LISTING UPDATES

I can set up a search to email you with any new HUD Repo, bank owned foreclosure properties, short sales and more - the same day they come on the market. Just share information about what you are looking for by completing my Columbus Ohio Home Finder Service Form OR call Petra (Pay tra) at 614-895-0496 anytime from 8am-10pm EST to get started.

You can also search the Columbus Ohio MLS for all Central Ohio Real Estate listings on the internet at www.columbuscastles.com/search-columbus-mls

ATTENTION FIRST TIME HOME BUYERS . . . YOU CAN STILL BUY A HOME WITH NO MONEY DOWN LOANS IN COLUMBUS OHIO.

You may have heard about the Housing and Economic Recovery Act of 2008, which passed in July.  While there are many good points to this bill, you know the government had to throw some bad ideas in there too.  Supposedly this new law is intended to help prevent foreclosures, restore home values and stabilize housing markets.  Here’s what you need to know about buying a home with no money down loans in Columbus Ohio.

FHA ZERO DOWN MORTGAGE LOAN PROGRAMS GOING AWAY

What were they thinking? Among the key provisions of the bill, the program that allowed sellers to provide down payment assistance to buyers through Down Payment Assistance (DPA) programs such as Nehemiah and AmeriDream, will be eliminated October 1, 2008. Buyers will still have the ability to obtain a gift for their down payment from a relative, which is what many buyers relied upon, before DPA programs existed.

HURRY - YOU CAN STILL BUY WITH A ZERO DOWN MORTGAGE UNTIL SEPTEMBER 30, 2008

If you are thinking about buying a home in the Columbus Ohio area in the next year and were hoping to buy with a no money down home loan, now’s the time to move.  I have a very reputable mortgage broker in Columbus Ohio who can process a loan in 2-3 weeks, so there’s still time to get a no money down loan.  Call Petra at 614-895-0496 today to get started!

TO LEARN MORE ABOUT BUYING A HOME WITH NO MONEY DOWN IN THE COLUMBUS OHIO AREA VISIT: ColumbusCastles.com/Buyers_nomoneydown

GOOD NEWS FOR FIRST TIME HOME BUYERS IN OHIO

While ZERO DOWN mortgage loans are going away for most FHA home buyers, there is still a program for first time home buyers in Columbus Ohio to buy a home with no down payment.  OHFA, The Ohio Housing Finance Agency provides Ohio Bond Money, a 3% down payment assistance grant or a 2^nd mortgage to cover the down payment.  Anyone who hasn’t owned a home in the last 3 years, within certain income guidelines may qualify.  Plus the Ohio Heroes program offers lower rates for qualified buyers including veterans, firefighters, police, teachers and health care workers.

GOOD NEWS FOR VETERANS

Veterans who qualify for a VA loan can still buy with a NO MONEY DOWN MORTGAGE LOAN as usual.  I have a very experienced mortgage broker who’s been providing VA loans in Columbus Ohio for many years that I can refer to you - just call me at 614-895-0496 to get started.  The Bill also contains provisions to help returning soldiers avoid foreclosure including lengthening the time a lender must wait before starting foreclosure from 3 to 9 months after a soldier returns from service.

GOOD NEWS FOR OHIO DOCTORS WHO WANT TO BUY A HOME WITH NO MONEY DOWN

I know a lender who offers zero down physician home loans this is a conventional no down payment mortgage for doctors, with no mortgage insurance. This is a great deal because this no money down mortgage for doctors in Ohio also offers competitive interest rates and no mortgage insurance.

GET FREE BUYER REPRESENTATION

CALL PETRA AT 614-895-0496, to make your home search easier - AT NO COST TO YOU! I only work with reputable mortgage brokers, lenders and bankers in Columbus Ohio and would be happy to refer you to the best lender for your situation so you can buy a home with no money down and I’ll help you find your ideal home in the Columbus Ohio area too.

SIGN UP FOR PETRA’S FREE COLUMBUS OHIO HOME FINDER SERVICE - to get real estate listing updates via email the same day they come on the market - with all the details including pictures and virtual tours CONTACT PETRA TODAY AT 614-895-0496.

TO LEARN MORE ABOUT BUYING A HOME IN THE COLUMBUS OHIO AREA VISIT:    ColumbusCastles.com/Buyers

Internet Lender - Legitimate, Swindler, or Identity Thief?

Article as printed in the Columbus Board of Realtors® IN CONTRACT Magazine September 2004

The multitrillion-dollar mortgage industry is a goldmine for cons, scams, schemes and swindlers. The schemes have actually been around for decades, but improved technology has made the scams easier to pull off and enable fraud to proliferate.

Consumers are daily receiving a barrage of e-mail, fax and mail solicitations for advance-fee loans, buyers clubs, credit card insurance come-ons, credit repair cons, internet spam offers and pyramid schemes that can involve work-at-home promises of telecommuting riches.

Results from the Federal Trade Commission’s recently released “Consumer Fraud In The United States” based on a random survey of 2,500 consumers, says nearly 25 million adults - more than 11 percent of the population - are probably victims of fraud in a typical year.

Identity theft and it’s related scams, such as phishing, topped the Federal Trade Commission’s list of concerns this past year. Phishing occurs when fraudsters masquerade as legitimate companies to trick consumers into handing over their personal and financial account information. If you’ve ever received an unsolicited e-mail that appeared to be from Citibank or Paypal and that asked you to update or verify an account, you’ve been targed by a ‘phishing’ scam. So far, financial service companies and their consumers have been targeted the most.

What’s more, 75 percent of fraud related to credit, including credit-repair scams, often target those carrying high debt loads or having bad credit.

Mortgage Scams

One of the greatest concerns for the real estate industry are the scams promoting home mortgages that are artificially low interest rates. Solicitations may even appear to come from the original lender as marketers can get this lender and loan information from the courthouse public records.

Use extreme caution as these perpetrators are often not lenders at all but identity thieves or resellers of application information.

Those 2.7 percent 30-year mortgages turn out to be either short-term “teaser” adjustable loans that allow payments at artifically low rates for short periods, or programs that require a large number of discount points to get the ‘great’ rate.

Jon Sadler, Vice President of Fifth Third Bank has seen this happen all too often. “Borrowers are taken advantage of when these promotional rates turn out to include outrageous closing costs and large pre-payment penalties. In addition, I’ve seen several situations where buyers had their bags packed and ready to go and the deal fell through just days before closing.”

A big cost that may drive up borrower’s costs are yield spread premiums (YSPs). Simply put, they are fees lenders pay mortgage brokers for charging a higher rate to the borrower. By law, they don’t show up until it’s time for you to see the final settlement sheet, typically the day of or the day before you must sign the paperwork (at closing).

YSPs can be advantageous for the borrower that does not have the cash to pay the closing costs that cover the mortgage broker’s fees. But some brokers can take advantage of the borrower by raising the rate so much that the broker is making an exorbitant amount of money on the loan, making it a predatory product.

“It doesn’t take a rocket scientist to make loans to rich guys in the suburbs. But for the rest of the world, it takes a little work,” says Lenny Zangardi, President of Strategic Mortgage Company. “People will buy books and CDs on the internet. They shouldn’t trust the biggest financial transaction of their lives to a random email from a stranger. They need to sit down with a qualified local professional lender to weigh alternatives and determine the product that best suits their needs.”

Consumers who receive dubious offers promising low rates in exchange for personal application information can forward them to the FTC at uce@ftc.gov. Homeowners can also call in complaints at 1-877-FTC-HELP.

Following are some of the more common methods of using legitimate mortgage loan methods to dupe the mortagee into paying higher fees and/or commit outright loan fraud.

Bi-Weekly Mortgages

The bi-weekly concept is simple: Make a mortgage payment every 2 weeks instead of making a payment every month. This is accomplished by cutting your monthly payment in half and make this half-payment every 2 weeks. Because there are 52 weeks in a year, you end up paying the equivalent of 13 monthly payments instead of 12 (26 bi-weekly payments which equate to 13 monthly payments). This forced prepayment will typically reduce a 30-year loan to less than 20 years.

Although many traditional lenders offer this service, they typically do not promote it as the service fees offset the benefit. Solicitations are more often from third party services who will charge a set-up fee ($300-$500) and a per transaction fee of ($2-$3). They might also offer incentives such as grocery gift cards or a discount off the set-up fee if you commit by a certain date. But, keep in mind, if they are offering an incentive, they are getting a greater value in return.

The better solution is to do this on your own. But a payment every two weeks isn’t necessary. Simply take your monthly mortgage payment and divide it by 12. Take this amount and add it to your normal monthly payment and let the lender know the extra is for principal reduction. Otherwise it might end up in your escrow account. In this way, you can get your mortgage debt paid down faster without having to pay the setup and monthly fees.

Zero-Down Loans

Aside from promoting an artificially low interest rate, zero-down loans might be the second most popular way for fraudsters to attract unknowing buyers.

There are a number of legitimate zero-down loans available to assist potential home owners who have little or no down payment saved. Keep in mind that, in exchange for having no money up front for a down payment, the lender will likely charge a higher interest rate and the buyer may have to pay a higher mortgage insurance premium which is not tax deductible.

HUD’s proposed 2005 fiscal budget includes a proposal which would allow buyers to take out no-money-down mortgages insured by the Federal Housing Administration and roll some closing costs into the loan as well. The maximum loan size, then, would be 103 percent of the home’s price.

If approved by Congress, HUD expects a higher default rate on no-money-down loans because they will carry greater risk. But borrowers will be charged a slightly higher mortgage insurance premium to cover the extra risk. After five years, the premium would be reduced to the same rate paid by other FHA borrowers.

However, there is another type of zero-down loan scheme which is both unethical and illegal. This scheme has been around for quite a while and puts the lender at risk. It entails the buyer asking the seller to increase the purchase price by the amount of down payment needed. The seller carries a second mortgage for the increased amount but destroys the note after the closing and the lender is left holding a mortgage on the property for 100% of its value. If the buyer defaults, the lender is stuck holding the bag as there is no PMI insurance to pay a claim.

“Executing a contract in this manner isn’t legal or ethical on a number of levels and concerns not only lenders but appraisers, buyers of other comparable properties and the county auditor among others,” cautions Mark Spangler, Vice President of Mortgage Lending, Prospect Bank.

Reverse Mortgages

Whether seeking money to pay for medical treatment, finance a home improvement, buy long-term care insurance, or supplement their income, many older Americans are turning to “reverse mortgages.” They allow older consumers to convert the equity in their homes to cash while retaining home ownership.

With a “regular” mortgage, you make monthly payments to the lender. But with a reverse mortgage, you receive money from the lender and generally do not have to repay it for as long as you live in your home. In return, the lender holds some - if not most or all - of your home’s equity.

In addition to receiving tax-free income, the other major reverse mortgage advantage is the senior citizen homeowner has no personal liability - repayment only comes from the residence, not personally from the homeowner. No repayment is required during the period provided the qualified homeowner lives in the principal residence at least six months each year. If the homeowner vacates the home for more than 12 months, such as while living in an assisted living center, the reverse mortgage “matures” and becomes due. Of course, if the homeowner dies or sells the residence, then the reverse mortgage and it’s accrued interest must be repaid.

If the sales proceeds are insufficient to pay the amount owed, HUD will pay the lender the amount of the shortfall. The Federal Housing Administration, which is part of HUD, collects an insurance premium from all borrowers to provide this coverage.

FHA’s reverse mortgage insurance makes HUD’s program less expensive to borrowers than the smaller reverse mortgage programs run by private lenders without FHA insurance.

The concern: Older Americans are being targeted by companies charging large fees (6-10 percent of the total amount borrowed) to act as unneeded middlemen. No one needs these services to get a reverse mortgage. HUD gives people the name and phone number of a nearby HUD-approved non-profit housing counseling agency at no charge. The counseling agency gives callers information about the program and tells them how to contact at least three participating lenders. To find a counselor that serves your neighborhood, call HUD’s toll-free number: (800) 569-4287.

People who want to report complaints about firms charging high fees for reverse mortgage information can also call HUD toll free at (888) 466-3487.

Flipping

In the usual case, flipping is nothing more than a legal and lawfull speedy re-sale. For instance, Smith buys a package of five houses from an estate and immediately sells one at a fair market value. Or, Jones buys a property knowing that Green is willing to pay a higher price.

Where flipping becomes illegal is when the re-sale relies on inflated appraisals, fake documents, sales to straw buyers who represent original sellers and phantom second loans. In some cases, illegal flipping involves a series of instant sales and re-sales with a single property and an inside group of buyers and sellers. The insiders move the title back and forth among themselves, in each case raising the sale price and thus creating a fictional basis for larger loans.

Illegal flipping is rare as it leaves reams of evidence, the penalties are severe, and the protective systems evolved by the lending industry work enormously well.

Consumer Reports

Consumer Reports rated online mortgages and published their results in April of 2006. They chose six websites that often came up when trawling search engines for lenders. Three sites Ditech, E-Loan and Quicken Loans act as sales arms for their own mortgage companies. LendingTree, meanwhile collects and distribues leads to outside lenders. But two other sites, HSH and Bankrate, take themselves out of the equation. They act as information clearing houses, listing lenders - including some who pay to appear there with rates and leaving you to click through.

They found that applying for a loan online may mean more hassles and dealing with a lot more salespeople than you would face if you shopped in person. Most important was that they determined that it is possible to find rates in your own backyard that are lower than or comparable to those advertised on the major mortgage web sites.

“On the internet, a marketer only has a few seconds to snag a customer,” says Dave Dewey, Area Manager, Wells Fargo Home Mortgage. “So they throw out the hook but not the whole picture. You have to get enough facts to be able to compare apples to apples. Then compare the loan specifics with a local lender you trust. Remember - the deal that looks too good to be true - probably is.”

What Can You Do?

Know how to recognize marketing pieces directly targeting consumers which is not from a legitimate mortgage broker or lender. When a mortgage promotion states a rate and term, but no “annual percentage rate” (APR) or type of program, that may be a tip-off of a scam and also violates the Truth in Lending Act.

Be very cautious of unknown ‘lenders’ - ESPECIALLY those who show up in your inbox. Even though they may use the name of a reputable lender, perhaps even your own lender, they may be completely unrelated.

Shop around at several online lenders, your credit union, and local lenders in your area.

Ask for the loans contract interest rate, but also the annual percentage rate (APR), which expresses closing costs and the contract interest rate as part of the overall rate. Also ask for a detailed good-faith estimate of closing costs. Some lenders are also offering guaranteed good faith estimates or guaranteed-fee mortgages. Scrutinize them nevertheless. Verify if there is an early prepayment penalty if you were to sell or refinance the loan.

When possible, pay closing costs up front instead of wrapping them into the mortgage to avoid paying interest on a few thousand dollars for the loan’s full term.

Think twice about lowering the interest rate by paying discount points up front, especially if you believe you’ll live in the house for six years or less - the average stay before most homeowners move on.

Rely on your Columbus Ohio Realtor who probably has established relationships with reputable Columbus Ohio Mortgage Lenders to serve your home loan needs.