Monthly Archives: August 2009

Tax Credit Count Down

OK…the important date to remember here is October 01st,2009.

Yes, yes, I know…the tax credit ends on December 01st…BUT, the transaction for the house you want to buy must be closed by the end of the day on November 31st. If it closes later than that, you will not qualify for the credit.

 Most lenders are requiring 45 days to close a loan as they are now faced with complex challenges (see my post from August 5th entitled “Say Bye-Bye to 30 Day Closings”).

To be on the safe side, I would suggest adding two more weeks to the timeline. That means if you have not identified and/or in contract with a seller by October 01st, you may miss the boat. Well, guess what…that is only five weeks away!

At this time, we do not know if the Fed’s will extend the credit. For information about the tax credit click here: Federal Housing Tax Credit.

If you are currently house hunting, keep these dates in mind. If you are on the fence, now is the time to talk to your lender. Also, it is critical to make sure your that your lender is very experienced and is well educated with the most recent regulations and proceedures. I would also suggest that you hire a lender that works in your area. That way you can sit face to face with him or her whenever necessary. Ask your Realtor to refer you to their recommended professional.

All my best~ Kevin GormanIMG_0918


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FHA Cracks Down on TBW

Hello friends – Below is a recent press release regarding the FHA suspension of Taylor, Bean & Whitaker Mortgage Corp., the third largest FHA lender. Have a nice summer week~ Kevin

Press Release Aug 04, 2009 / Brian Sullivan  FHA website:


The Federal Housing Administration (FHA) today suspended Taylor, Bean and Whitaker Mortgage Corporation (TBW) of Ocala, Florida, thereby preventing the Company from originating and underwriting new FHA-insured mortgages. The Government National Mortgage Association (Ginnie Mae) is also defaulting and terminating TBW as an issuer in its Mortgage-Backed Securities (MBS) program and is ending TBW’s ability to continue to service Ginnie Mae securities. This means that, effective immediately, TBW will not be able to issue Ginnie Mae securities, and Ginnie Mae will take control of TBW’s nearly $25 billion Ginnie Mae portfolio.

FHA and Ginnie Mae are imposing these actions because TBW failed to submit a required annual financial report and misrepresented that there were no unresolved issues with its independent auditor even though the auditor ceased its financial examination after discovering certain irregular transactions that raised concerns of fraud. FHA’s suspension is also based on TBW’s failure to disclose, and its false certifications concealing, that it was the subject of two examinations into its business practices in the past year. “Today, we suspend one company but there is a very clear message that should be heard throughout the FHA lending world – operate within our standards or we won’t do business with you,” said HUD Secretary Shaun Donovan.

FHA Commissioner David Stevens said, “TBW failed to provide FHA with financial records that help us to protect the integrity of our insurance fund and our ability to continue a 75-year track record of promoting, preserving and protecting the American Dream. We were also troubled that the Company not only failed to disclose it was a target of a multi-state examination and a separate action by the Commonwealth of Kentucky, but then falsely certified that it had not been sanctioned by any state. FHA won’t tolerate irresponsible lending practices.” Ginnie Mae President Joseph Murin said, “I would like to reassure TBW’s customers whose loans serve as collateral for Ginnie Mae securities that, although this action will result in a new servicer, the transition will be seamless for them.”

TBW’s immediate suspension is for a temporary period pending the completion of an investigation by HUD’s Office of Inspector General, an ongoing review by the Department’s Office of Housing, and any legal proceedings that may ensue.

TBW is the third largest direct endorsement lender of FHA-insured loans and the eighth largest issuer of Ginnie Mae mortgage-backed securities. FHA decided that TBW’s immediate suspension is in the best interest of the public and is necessary to protect the financial interests of the Department. TBW may appeal its immediate suspension by submitting a written request for a hearing before an Administrative Law Judge within 30 days. Such a request will not delay the action FHA is announcing today. In conjunction with TBW’s suspension, HUD sent notices of proposed debarment to TBW’s Chief Executive Officer, Paul R. Allen, and TBW’s President, Ray Bowman. Mr. Allen’s proposed debarment alleges that he submitted false and/or misleading information to Ginnie Mae regarding TBW’s delay in submitting its audited financial reports for fiscal year ending on March 31, 2009. Mr. Bowman’s proposed debarment alleges that he submitted two false certifications to HUD on TBW’s Yearly Verification Report. Mr. Allen and Mr. Bowman have thirty days to contest the proposed debarments.

HUD is the nation’s housing agency committed to sustaining homeownership; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development and enforces the nation’s fair housing laws.

Ginnie Mae is a wholly-owned government corporation within the U.S. Department of Housing and Urban Development. Ginnie Mae pioneered the mortgage-backed security (MBS), guaranteeing the very first security in 1971. An MBS enables a mortgage lender to aggregate and sell mortgage loans as a security to investors. Ginnie Mae securities carry the full faith and credit of the United States Government, which means that, even in difficult times, an investment in Ginnie Mae is one of the safest an investor can make.

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Say “Bye-Bye” To 30 Day Closings

 Snail Pending


In case you haven’t heard, the mortgage industry has changed. Everything about obtaining a loan to purchase real estate has become more stringent and time consuming.

1) Underwriters are scrutinizing every detail of the buyer’s qualifications and the property of interest. In many cases a second appraisal (called a “field appraisal”) is being ordered. Due to #2 below, just getting that first appraisal is causing delays.

2) Fannie Mae and Freddie Mac have adopted the Home Valuation Code of Conduct (HVCC). The purpose of which, is to protect valuations of properties and reinforce appraiser independence. The regulation requires the disconnection of the communication lines between appraisers and lenders. The result has created delays in appraisal report turn around times.

3) In addition, lenders must comply with the 2008 Home Ownership and Protection Act (HOEPA) and the Housing and Economic Recovery Act (HERA). A recent amendment effective July 30, 2009 is called Regulation Z and is published under the Truth and Lending Act (TIL). The regulation adds additional steps for lenders in order to prevent deceptive lending practices and to protect consumers.

Whew! That’s a lot of acronyms to consider. No wonder it’s taking longer to get a transaction closed.

Bottom line? Whether you are a buyer or a seller, be prepared that it may be a tall order to expect to close a transaction in 30 days. 45 day closings are now being recommended by most lenders and some suggest 60 days. Buyers should discuss with their lender how the longer closing periods may affect their purchase including the interest rate lock, closing costs, prepaid expenses, etc. Sellers should be aware that there is a good chance that their sale may not close in 30 days. Sellers should discuss with their Realtor and perhaps ask them to contact the buyer’s lender to confirm that the negotiated closing date is do-able.

The good news is that sales have definitely picked up. There is a lot of talk about the bottom being hit. Interest rates remain low…for now. It’s competitive out there. The homes that are priced correctly and show nicely are getting multiple offers. My office is jumpin!

Oh by the way…I am never too busy to help you or your friends or family.

 All my best~ Kevin

Kevin Gorman Broker/GRI/CDPE

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