REA-NK REO HomePath Program

Fannie Mae's REA-NK REO HomePath Program

For those out there looking for a deal by buying a foreclosed property here in San Diego, you might want to take a close look at Fannie Mae's HomePath program. In my opinion it could be a great way to purchase your new San Diego Condo or home.

Fannie Mae's REA-NK REO brand, HomePath, was created early in 1999. Fannie Mae has over 89,000 real estate owned (REO) properties on their books; over 600 of those are in San Diego. These Fannie Mae owned properties eligible for the HomePath financing offer an affordable opportunity to buy a foreclosure with up to 97% financing. Yes, that's less money down then an FHA loan.

Some advantages of the HomePath loans:

• 3 % Down payment

• No PMI (mortgage insurance) required

• No Appraisal

• Renovation Financing

• Up to 6% in Seller concessions (Owner-occupant)

• Only 10% down on 1 unit investment properties

• Allows Investors to finance up to 10 Properties

First Look Marketing Program I know its tough working with the Owner-occupants going against Investors who are usually going to blow us out of the water by paying cash with no contingencies. Most of these properties are open to offers to investors as well as owner-occupants during the first 15 days after they come on market. For the HomePath properties that qualify the First Look Marketing Program will only consider offers from Owner Occupants or Buyers using public funds for the first 15 days.

This offers a distinct advantage over a normal REA-NK REO listing, taking the Investor out of the competition. If the property is still for sale after the First Look Marketing period expires, Investor offers may be submitted and will be considered. Fannie Mae's HomePath Program is worth taking a look at.

Fannie Mae HomePath Mortgage

Shopping for the Right Home Loan

Are you thinking about refinancing your home loan? Are you looking for the best refinance rates available? If so, than there are several things you should know about the rate quotes you may be finding. A home loan refinance can quickly lower your monthly payment, allowing you to keep more spending money for yourself; however there are numerous "junk fees" and markups that can cloud that great deal you may have found. Below are several great tips to help you find a great mortgage rate without overpaying!

Best Home Mortgage Rates

Where are the best home mortgage rates? Numerous homeowners are unable to know a good mortgage rate when they find one because they are unaware of hidden markup and fees. What is a hidden markup? It is a way for loan originators, banks and lending institutions to make additional money off of your loan refinance. Essentially, your interest rate is quoted higher than the bottom line, thus raising your interest rate and allowing your loan originator to make additional money off of your dollar! How do you bypass this hidden expense? You must find someone who is willing and able to provide you with a mortgage without marking up your rate. In other words, you need access to wholesale mortgage rates. Refinancing (or even purchasing for that matter) with the right originator can save you thousands of dollars in the end. How do you find the right originator? Let's first discuss how to find the WRONG one!

Bank Mortgage Loans

Countless Americans think refinancing through a bank is a great deal because they cut out the middle man, thus allowing you the lowest rate, however, there are several issues with bank originated home loans.

Mortgage brokers and lenders are regulated by your State's consumer protection and predatory lending laws as well as the Real Estate Settlement Procedures Act, thus being required to disclose (nearly to the penny) all fees associated with your mortgage loan. Banks, however, are regulated by the Federal Government and are exempt from your State's mortgage lending regulations. Although they must abide by the Federal Truth-in-Lending laws there are many loopholes that the banks are able to get around. Additionally, bank have lobbied the Federal Government so they only need to provide a less-than-accurate Good Faith Estimate and an Annual Percentage Rate based on this estimate. Due to the loopholes previously mentioned, banks are not required to disclose any of their markup or profit margin on your home loan.

In addition to the lack of regulation, banks are in business just to loan money. They make a majority of their profit by selling their mortgage loans on the secondary market. Loans with a higher market interest rate make a larger profit for a bank (known as the Service Release Premium) which is why you will never get a wholesale refinance rate from your bank.

How to Get Wholesale Refinancing Mortgage Rates

Obtaining a mortgage loan at a wholesale rate is not as hard as you may think. You do not need to have special intel or a secret agent, you simply need to shop for the right mortgage broker! The fact of the matter is, if you want the lowest possible refinance rate, you will need to find a mortgage broker willing to do your loan for a flat, up-front fee who will not mark up your interest rate for a fee (called Yield Spread Premium).

Do you recall how banks profit from selling their home loans to investors for a fee known as Service Release Premium? Well, mortgage brokers are able to collect a similar fee known as Yield Spread Premium. Yield Spread Premium is a fee paid to a mortgage broker by the mortgage lender for selling a higher interest rate to a borrower. Although it must be disclosed to you, it is often explained away as a fee that the lender pays the broker and has nothing to do with the borrower's expense. It would be great if that were true, but unfortunately it is 100% at the borrower's expense, and that expense lasts over the life of the loan! It is the increased interest rate that results in an increased mortgage payment that comes directly out of the pocket of the borrower. The most important thing to know about this fee is that although you may be saving out of pocket expenses during the origination of the loan, in the long run you are better off to just pay the mortgage broker an upfront fee for originating your loan and getting the lowest possible interest rate. An honest mortgage broker should be able to provide you with both options and tell you the true difference in your mortgage payment with and without your Yield Spread Premium. If that is disclosed and discussed upfront, than there is no hidden fee because your mortgage broker has revealed it to you!

If you want wholesale mortgage rates for your next home loan, make sure you tell your potential brokers that you understand Yield Spread Premium and you are not interested in a loan that includes a markup. Offer to pay them a reasonable loan origination fee and you will be on your way to saving money on your next home loan!

9 Fannie Mae HomePath Facts

There are a few really important facts that need to be known about Fannie Mae HomePath properties. There are great deals to be had, but be prepared to move quickly. These foreclosures tend to get multiple offers very quickly when they hit the market, and you may end up in a bidding war.

Let's go over the top 9 Fannie Mae HomePath facts:

1. Fannie Mae HomePath is available to investors.

This is usually unheard of. But investors can get in on this craze. Most of these style programs are not available to the investors and are reserved for the owner occupied buyer.

2. HomePath does not require mortgage insurance.

Even though you are not putting 20% down on the loan, HomePath financing does not require mortgage insurance (MI). Some people might know this as PMI.

3. No appraisal necessary.

On certain programs, there is no need to have an appraisal. This is great if you are intending to do repairs that you don't want the lender to know about, or if there are repairs that most lenders would require to be fixed, prior to issuing a loan.

4. Interest rates are a little higher.

It is what it is. The interest rates are slightly higher on these programs. It is a small price to pay if you are trying to buy a home outside the normal box.

5. There are (or can be) incentives.

Fannie Mae regularly comes out with incentive programs that are really great. Like offering to pay your closing costs, or giving the agent a bonus for selling the home. Make sure you check into these or ask your Realtor.

6. You can renovate your purchase.

If the home needs repairs, check to see if the home is eligible for the HomePath Renovation loan. You are allowed to finance extra money in to complete the repairs. Again, this is an unusual opportunity, since most loans do not allow for financing above and beyond the purchase price.

7. Homes are sold as-is.

Since banks and lenders never lived in the home, they sell them as-is. This means that if there are issues with the home, they are your problem once you buy it. It is always recommended to get a home inspection to ensure you know more about what you are buying.

8. HomePath is for Fannie Mae properties only.

Financing is for homes owned by Fannie Mae only. You cannot use HomePath to purchase a home owned by Freddie Mac or any other lender.

9. Fannie Mae does not lend directly.

If you want to get a HomePath loan, you need to locate a lender that offers them. Fannie Mae will not lend you money directly, rather, they will approve a loan that a lender or bank underwrites. Since the lender and loan officer does most or all of the paperwork, you will never "see" Fannie Mae in the process.