Opteum Mortgage: Mortgage News

Ringing in the new year will be a present from Fannie Mae and Freddie Mac to borrowers with credit scores under 680. Here is what these borrowers on conventional loans with Loan-to-values over 70% will receive on either purchases or refinances:

Credit score less than 620: Either a 2 discount point sur-charge or a higher rate of approximately ¾%

620-639: 1.75 discount point charge or higher rate of approximately 5/8%

640-659: 1.25 discount point charge or higher rate of approx. ½%

660-679: .75 discount point charge or higher rate of approx. ¼%

These changes will typically become effective in January. What it means to you is that lenders will not be able to determine the interest rate until they receive the borrower’s credit report if they are anywhere close to 680. If there are joint applicants, the lower of the two applicant’s middle scores will be the one that determines the interest rate….. So, theoretically, a borrower could be quoted a rate of 6.0% prior to loan app and end up with a 6.75% rate because their middle credit score was 619.

Rate swings: This week has been a pendulum for mortgage rates. Monday rates were virtually touching 5.5% on the 30 year fixed, the lowest we have seen in a few years. Things started reversing on Wednesday, turning back up about an 1/8%. We had further movement up today as they are back up to the 5.875-6.0% level. So the window of opportunity has closed for now, but perhaps the market overreacted again and will settle back down. Congratulations to those of you who made the decision to lock your rate in on Monday!

A Minus Loans: These loans are available at Opteum to borrowers with scores as low as 575 on purchases up to 95-100% LTV. Cash assets are needed to offset the low credit scores and can help someone with low scores, few trade lines and without even a rent history purchase a new home. I like to call this type of program “the New Sub-Prime”.

I will be working this weekend if you need me.

Best regards,

Sam Thompson

Loan Officer

Opteum Mortgage

678-742-6631 (office)

1-866-226-2066 (toll free)

770-301-0527 (cell)

678-585-8345 (e-fax)

222 Chastain Meadows Court, Suite 300

Kennesaw, GA 30144

email: Sthompson@opteum.com

web: http://www.opteum.com/sthompson

Real Estate News:Immigrants Often Targets of Subprime Scams

Immigrants Often Targets of Subprime Scams

Immigrants have long been victims of fraud, but the subprime mortgage boom has provided a particularly popular avenue for unethical lenders to take advantage of immigrants.

Housing counselors say they have seen predatory lending to immigrants across the U.S. Among the vulnerable groups: Latinos throughout California, Caribbean and African borrowers in the New York area, and Russian immigrants in Philadelphia.

Immigrants with limited English skills tend to be trusting, especially when people with roots in their own countries offer them what appear to be good opportunities and easy money, says Katrina Vizinau, a counselor at Community Housing Development Corp. in New York City.

Source: The Wall Street Journal, Jonathan Karp, Miriam Jordan (12/06/2007)

Real Estate News

Private-Money Mortgages Get More Popular
Hard-money or private-money mortgages, which are funded by individual investors or investor groups, are gaining popularity now that subprime financing has dried up and prime lenders have tightened their credit standards.

Miami-based Yale Mortgage Co., for instance, reports a 30-percent increase in applications from last year; while a 50-percent gain has been recorded by Aliso Viego, Calif.-based Alliance Portfolio.

Scotsman Guide mortgage-industry analyst Daniel Yeh notes that “hard-money lenders are pretty much the only source of capital for many people,” primarily borrowers with poor credit but plenty of equity, those in need of construction loans, and those wishing to buy a home or refinance quickly.

While they do not place much emphasis on income or credit, hard-money lenders generally require 30 percent to 40 percent equity in the borrower’s collateral, charge fees as high as 5 percent, and impose interest rates slightly above 10 percent.

However, Yale Mortgage principle Woody Kahn notes that the delinquency rate for such mortgages hovers between 35 percent and 40 percent, while foreclosures typically range between 10 percent and 15 percent of such loans.

Source: The Wall Street Journal, Jeff D. Opdyke (12/05/07)

(c) Copyright 2007 INFORMATION INC.

Did you know..

There are a number of State, City and Non profit programs available to help with down payment assistance?

There are a number of State, City and Non profit programs available to help those with challenged credit, to get you into a home within 90days or less?

There are a number of programs  available just for those wanting to live within the city? For those with low-mid income  wanting to live in neighborhoods such as the West End or Westview?

If you didn’t know- you better ask. I’ll gladly direct you to a few mortgage specialist that are approved for many of these programs, who will work with you in finding the right one for you!

Ellenwood man guilty in Atlanta mortgage fraud case

Atlanta Business Chronicle

A Georgia man pleaded guilty late Wednesday to running a $15 million mortgage fraud ring in Atlanta’s West End.

Kevin G. Wiggins, 41, of Ellenwood, Ga., pleaded guilty in federal district court to charges related to a large-scale mortgage fraud scheme that targeted West End neighborhoods in Atlanta in 2001 and 2002.

Wiggins contracted to buy more than 80 distressed properties primarily in Atlanta West End neighborhoods at their true value which ranged from $24,000 to $80,000. Then, before he actually bought the property, he deeded the properties to unqualified straw borrowers, some of whom were his relatives. Using false information about the unqualified straw borrowers, he arranged for financing for them and got more than $15 million in mortgage loans.

When Wiggins applied for the loans in the names of the straw borrowers, he inflated each property’s value by as much as $100,000 by lying that the properties had been completely renovated or “rehabbed.” Wiggins then claimed the properties were occupied by tenants paying rent in excess of the projected monthly mortgage amount.

Wiggins paid a co-defendant in the case, appraiser Frank W. Astwood, 37, of Hampton, three times the legitimate appraisal fees to write appraisals that falsely reflected that each property had been rehabbed.

Wiggins bought the properties after he had already “sold” them to the straw borrowers, using proceeds from the “sales,” which came from the fraudulently inflated mortgage loans obtained in the straw borrowers’ names. Wiggins operated this scheme through a number of companies he had established, such as “TWF,” and “The Wiggins Family.” The lenders in this scheme suffered $7 million in losses, and affected West End neighborhood property taxes doubled due in part to the fraudulently inflated property valuations.

Wiggins, along with co-defendants Astwood and Lydia Wiggins Christopher, 59, of Union City, were indicted by a federal grand jury in February 2007.

Wiggins pleaded guilty to one count of conspiracy and two counts of wire fraud. He could receive a maximum sentence of 15 years in prison and a fine of up to $750,000 and be ordered to pay restitution of $7 million.

Astwood pleaded guilty to this mortgage fraud conspiracy on June 14, and could get a maximum sentence of five years in prison and a fine of up to $250,000 and be ordered to pay restitution.

Christopher has pleaded not guilty to the charges and awaits trial.

Sentencing for Wiggins and Astwood is set for at Jan. 31, 2008 before U.S. District Judge Jack T. Camp.

“The use of a phony rehab scheme and straw borrowers to steal money from mortgage lenders on so many properties that were later foreclosed devastated an area of our community that was struggling to preserve its historic character,” U.S. Attorney David E. Nahmias said. “This guilty plea, along with the prior guilty plea of a complicit appraiser, resulted from a committed FBI investigation supported by neighborhood activists. We will continue to aggressively investigate and prosecute those who promote such mortgage fraud schemes in North Georgia.”