What we do. What we can do for you.

Written by Michael A. Foote, CMB on . Posted in Uncategorized

So I thought it wise to re-educate all my readers, past customers, and partners about all the products and services that California Property Resources offers today.

1. Residential Mortgage Financing – We offer EVERY mortgage product out there for a home loan. Owner Occupied, Investor, Vacation, Units, etc. All with amazing terms. I beat banks and direct lenders all day long. Moreover, I can offer non-traditional financing too! Subprime Lending is back and there are stated income alternatives for investors as well. We even have a “24 month bank statements as income program” program.

2. Commercial Lending – SBA 7a and 504 loan are amazing and offer 90-93% LTV financing for the purchase of primarily owner-user commercial buildings. SBA loan terms are very reasonable today and if you own a property, want to buy a property, or refinance a property, check in with me to see if we can improve your terms. We also offer Investor owned commercial property financing.

3. Asset Based Lending – We offer financing for Accounts Receivable. If your business is paid through invoices from another business, you may be able to sell those invoices and receive cash much faster. So if you in a cash flow pinch at the office, or need cash faster for a big expansion, this may be the prefect product for you. Quick easy and without all the bank hassle.

4. Contact Mortgage Processing – Simple Solutions is a division of our company that offers NMLS approved Contract Mortgage Processing to Mortgage Brokers and Bankers. This service allows Bankers and Brokers to avoid the hassle to interviewing, training, and managing full time employees. There is a significant cost benefit to the companies who use contract processing. And in today’s rising interest rate environment, this may be just the trick to keep profit margins up.

5. Land Contracts – We are a licensed Real Estate Broker, but we don’t offer traditional Real Estate Services. What we do offer is the creation, management and administration of Land Contracts or Contract for Deed transactions. If a buyer and seller can come to terms directly and avoid the Real Estate commission our service prepares contracts, deals points, and administers the payments through the life of contract.

Thanks for listening and please reach out if you or someone you know is in need of any of our products or services.

 

Rates are up, but they are still ridiculously low.

Written by Michael A. Foote, CMB on . Posted in Uncategorized

There is a saying that you can’t catch a falling knife? Well I can catch a falling knife, but I think the point is that you can’t time a low..in anything. low stock price, low car price, low home price, and low interest rates in general. And even if you could, how would you know that you got THE lowest rate? You wouldn’t because there is always someone else who could shave a few bucks here and there. My point is this, the market is still very exciting and if you already refinanced to a rate under 4% you probably wouldn’t need to refinance again. If you are buying rates are still amazing, and you shouldn’t let the news telling you rates have spiked to hinder your decision.

Customers want to be lied to?

Written by Michael A. Foote, CMB on . Posted in Uncategorized

Back in my early days, one of my superiors shared this bit of advice about clients (business to business and business to customer. He was of the opinion that when all is said and done, that people want to be lied to. Not that they know they want to be lied to specifically, but that they don’t know they want to be lied to.

I’ll give you an example. Say a client calls me to shop a rate. The prospective client heard on the radio “fixed rates at 2.75%” and they call me and ask about a 30 year fixed rate which let’s say at the time is at 3.5% and immediately, they are put on the defensive. Even if they don’t tell me they’ve heard that rates are lower on the radio. The assumption is that the sales guy is selling me a higher rate. Now to be fair, that can happen. But I always quote lowest possible rates. And I am always very competitive.

Now back to the point. If the client tells me about the commercial he/she heard. I will of course, tell them that the commercial they heard was most likely offering a 10 or 15 year  fixed rate and the “fixed” portion of the commercial is the teaser. It’s gets them to call the advertiser, or at least someone. Most of the time, the client gets that and can be convinced that what they heard was a commercial and I was being honest when quoting rates. However, there is a portion that doesn’t believe me and will undoubtedly call the advertiser to check my story. Sometimes they call back and sometimes they don’t.

That is the simplest explanation of the title of this blog article. But once we drill into real specifics it gets tougher to sway a customer away from a lie. A more specific instance would be a guideline variation.

A few weeks back, I received a call from a Realtor (my favorite we all need em’ but few are worth dealing with). He noted that his client completed a short sale OVER two years ago and was looking at homes to buy and wanted to make an offer that weekend.

My first response, great let’s go. Second response, Are you sure the short sale AND transfer of title of the previous property went through OVER two years ago. Of course, he said yes. Ok let’s get the deal put together and I’ll double check the transfer of the previous property.

By the end of the day I had established that the previous property was transferred just shy of two years prior. In fact, it was three weeks short. However, the guidelines state that credit can’t be run until the two year window has elapsed. I of course, immediately called the Realtor and told him we’d need to wait another couple weeks….and of course he didn’t like that answer.

So the Realtor calls another lender who tells him what he wants to hear…” Oh I can do that now” Send me the deal. One week later, he of course comes clean. But you know what? I didn’t get the deal. The other lender who lied did?! What a slap in the face.

Here is a perfect example of a case where the client (Realtor) wanted to hear what he wanted to hear. Do I need to work with clients like this, no. But you’d think that being honest and forthright would win the deal every time. But people I am here to tell you that….Customers want to be lied to.

The worse scenario is when a client think you kept vital information from them when making a decision. Client closes a purchase loan with me and calls a few months later to talk about removing the mortgage insurance on the loan. Sure I say, values have risen, let’s take a look. I start with …”on the refinance… “Wait”, he says. I need to do a refinance to remove the mortgage insurance. I say, yes on a FHA loan mortgage insurance stays on the loan for 5 years.

While the loan was in process we talk about every program available, every down payment option, and all mortgage insurance options. Now after everything is done forgetful memory makes me look like I was keeping valuable information from the buyer before closing. Do I expect a client to remember everything we spoke about, no. But don’t assume that it is the sales persons fault or neglect when you can’t get remember what conversation went down.

Was I better off saying, sure let’s do it, and then stating the request was turned down, or do I simply state I am sorry you don’t remember. Frankly, I think the telling them want they want to hear is better. But I went with option two and now can’t a call back from the client.

Gotta’ love it, but I think that the client does want to be lied to – they don’t know it – but they do.

So if you want someone to tell you what you want to hear. Please do not call me.

 

Financial Products for Small Business

Written by Michael A. Foote, CMB on . Posted in Uncategorized

The economy is officially doing better. Not on fire, but many a businessman/woman I’ve talked with lately have noted that they’ve had their “best years ever”. Now there is always a good amount of hyperbole in people’s ranking of their own profits, but its true, times are better than the past few years.

One thing helping small businesses specifically, is the amount of financial tools available for the small, medium, and big business. Now I am not going to write about the big business financing out there. If you are a big time businessman you shouldn’t be reading this blog. But for you small to mid-sized businesses there are some great products available to you.

Invoice Factoring  from companies like Merchant Bridge Finance are one way businesses are getting the expansion and operating capital they need to prosper today. So what the heck is invoice factoring. Well unless you are a finance major, you may not have heard of this tool. Basically, if you are a business that issues invoices to your customers (account debtor) then invoice factoring may be for you.

Let’s say your client has a 90 day turn on their accounts payable and you have a chance for a job that will require more capital than you have available. You could tap a business line, if you have one. Or you can sell your invoices for cash today. A typical factor can provide an advance on that invoice of between 70-95% and will charge anywhere from 1-5% of the face value of that invoice. The terms vary widely between factor, industry and based on the strength of your client. Your credit and financial stability is important but not the over-ridding underwriting concern to be sure.

This product is great in industries like transportation, energy (oil & gas), textiles and apparel, temporary staffing and many others.

If you are interested in this service reach out to me and I will connect you with a factor who has a specialty in your industry.

Beware of the advice you get

Written by Michael A. Foote, CMB on . Posted in Uncategorized

Had a Realtor call me…Got a deal, its a RUSH.. Shocker there. I had it somewhere else, but they closed. I have a DU approval. It’s a previous short sale…can we close in three weeks.

So the first thing that pops up is no one is really closing right now. And it’s a short sale, right? So when was the previous short sale completed? “Over two years” Ok that is an exception right there for conforming and not all lender investors or brokers are even considering these. So I ask further…”When was title transferred from your clients on the old house?” I don’t know..So I call the title plant and pull the old deed and sure enough they have three more weeks until it is even two years. In addition the DU approval even tells the client it needs to be two years.

So I say send me the deal and let me do the research, which fewer and fewer LO’s are doing. Of course, the Realtor doesn’t like that I’ve just basically said no to his new buyer. Even though I’ve really only said you need to wait three weeks and THEN we need to re-run credit and submit to an underwriter for a TBD decision.

But that isn’t good enough, so he calls someone else who has been in the business 30 years as opposed to my 25 years, and he said no problem, send it over I can do it now.

Call two days later and sure as you know what, he can’t do it now AND can’t do it later because he has an overlay that requires four years after a short sale.

The moral of this story is, you can find anyone to tell you what you want to hear, but a true professional will tell you what you NEED to hear.

Side note, the Realtor is STILL showing the buyer homes knowing full well he had no approval and doesn’t even know if the buyer can find financing. Oh yeah the buyer wants the best rate too… And people in hell want ice water.

Oh Relitters!

Mortgage Brokers offer better pricing and can offer reduce rates when the market adjusts in your favor at no cost.

Written by Michael A. Foote, CMB on . Posted in Uncategorized

So the CFPB now effectively regulate all things financial, including mortgage lending. And I can guarantee you the biggest firms with the biggest wallets will have the greatest influence on the rules and and regulations “promulgated” going forward.

tr.v. prom·ul·gat·edprom·ul·gat·ingprom·ul·gates

1. To make known (a decree, for example) by public declaration; announce officially. See Synonyms at announce.
2. To put (a law) into effect by formal public announcement.

It just is how it is…But you as a consumer, Realtor, mortgage originator can share a big difference that really ends up being a very real and valid reason to use a mortgage broker instead of a mortgage lender, or bank.

It’s called up-selling or steering – also knowing as bait and switch in some cases. The cold hard truth is we have all been told the mortgage broker primarily caused the financial collapse of 2008 (which really started in 2007) but it isn’t true. Sure the broker did plenty of things wrong and many broke the law and did loans in a way only a graphic artist could admire, but they didn’t create the guidelines (lenders, investment bankers, secondary departments) and they certainly didn’t pay exorbitant fees to obtain those loans (investment banks, pension funds, fannie and freddie).

But a lender doesn’t share beneficial swings in the market to consumers like a broker can. Example, you lock your rate with Bank of America, and three days later the market rallies, everyone buys treasuries and demand for mortgages (by institutions) increases thereby decreasing the cost and interest rates being offered. Bank of America will pocket the difference and not allow you to relock at the new market rate, with-out a hit. Whereas, a broker can simply re-trade that loan with another investor at a lower price, and share the savings with you the borrower.

Even worse, assume you don’t even know the market had improved and you just take the rate you locked. If the bank sells that loan for even more, they don’t share it with you. The banks and direct lenders can offer the better pricing but don’t most of the time.

Even the rules allow for variable commissions and “generally prohibit the acts that should ALWAYS be prohibited. Read the CFPB rule below – in summary:

             “To prevent incentives to “up-charge” consumers on their loans, the final rule generally
prohibits loan originator compensation based upon the profitability of a transaction or a
pool of transactions. However, the final rule clarifies the application of this prohibition
to various kinds of retirement and profit-sharing plans. For example, mortgage-related
business profits can be used to make contributions to certain tax-advantaged retirement
plans, such as a 401(k) plan, and to make bonuses and contributions to other plans that
do not exceed ten percent of the individual loan originator’s total compensation.”

So next time you think about choosing a broker versus a banker or bank, or direct lender. Make sure you understand a broker works for you to aid you in finding the best deal from multiple investors. The direct lender is only going to offer you their best pricing that day. AND they can mark up there prices without you even noticing since disclosure laws are easier for direct lenders.

Realtor’s CAN do loans; Subprime is back; Real Estate is hot. Those are some good headlines.

Written by Michael A. Foote, CMB on . Posted in Uncategorized

Full credit to Rob Chrisman   So it is an age old question, much like, What is meaning of life? What is Stonehenge? Do bears %^** in the woods?  Can a Realtor originate loans. It would appear in this article that the answer is YES!! If…. Point of fact, I am a mortgage broker and not an approved FHA lender. So if you are thinking about originating loans, AND you are a Realtor Broker – I want to talk with you!! 
Sometimes I am asked, “Can I work for a lender as a loan officer and as a realtor for another company at the same time?” or, “Can a loan officer of a sponsored third party originator also be a real estate agent?” Fortunately there are some talented folks, and government agencies, that know the answers to these. Barbara Werth (Mortgage Training Today – barb@mttoday@co) wrote to HUD and writes, “I went to the reference listed in the second section, 4060.1 Chapter 2, page 6. I don’t think you can do both (as a sponsored TPO – not an Eagle lender – or ‘broker’, carrying a real estate license and mortgage originator license even if a state supposedly allows it).”
HUD wrote to Ms. Werth, “FAQ: Can I work for a lender as a loan officer and as a realtor for another company at the same time? No, FHA does not permit “dual employment” on a full or part time basis in any mortgage lending, real estate, or related field. The restriction applies to all employees who are employed by a FHA approved lender that work on FHA loans. This also applies to a lender’s “wholesale account representatives” that originate loans through sponsored third party originators (brokers). This includes working as a real estate agent or broker for another company. A loan officer may hold a vocational or professional license in real estate but may not engage in realtor activities or make use of the license while employed by a FHA approved lender.”
HUD also wrote, “The following information is regarding if a mortgage broker can work as a real estate agent. FAQ: Can a loan officer of a sponsored third party originator also be a real estate agent? Yes, if the sponsored third party originator is not a FHA approved lender or an employee of a FHA approved lender. However, the loan originators of non-FHA approved entities must comply with applicable federal, state, and local requirements governing their FHA loan activities. If the sponsored third party originator is a FHA approved lender, it is subject to the staffing and employment requirements in Handbook 4060.1, Chapter 2. FHA does not prohibit loan originators of FHA approved lenders from maintaining a real estate broker or sales agent license, as long as the FHA approved lender has controls in place to ensure the individual does not make use of their license.”
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In other news, Subprime is back. No not necessarily stated income, but yes Subprime loans for credit impaired clients are back in full force. Rates start at 7.95% for 7 year fixed 30 year fixed
AND BANK STATEMENTS can be used for income (Personal or Business). Down payments are big as you would expect, but leverage up to 75% LTV is available. 
I have multiple sources for owner occupied properties and non-owner occupied properties. 
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In other not so shocking news, Real Estate is hot. Phoenix alone had 23% price appreciation YOY. 
California is following right behind that double digit YOY appreciation. So kids go buy some homes. If you income is good and stable, this is a great time to move up to that dream home. 

Financing is hard to find? Really? And FHA is STILL a great product.

Written by Michael A. Foote, CMB on . Posted in Uncategorized

Sometimes the press gets it right, and other times, you wonder where the heck they “heard that”. When I watch www.CNBC.com lately, and I admit to being a news junkie, I’ve noticed they talk about financing being tough to get for homeowners and home buyers. So let’s take a look at that theory.

First let’s look at homeowners. So we have the HARP program, which allows borrowers who got a loan out prior to June 2009 AND whose loan is owned (this does not mean serviced – or who collects your payments) by Fannie Mae or Freddie Mac, to refinance with little to NO worry about the value versus the loan amount, or LTV (Loan to Value). They allow credit scores and you can even have a late mortgage payment over 30 days in the last year.

There is also the FHA Streamline program with allows current existing FHA borrowers to refinance at today’s low rates in many cases with NO INCOME DOCUMENTATION and NO APPRAISAL requirement. Wow, that sounds like the old days.

And how about the home buyer? Surely, we lenders make it VERY hard for them to get a loan. Well you can put down next to nothing and buy a house today – even if your credit score if below 620. The FHA still offers home buyers options to buy with as little as 1% down. If you buy a HUD owned home as little as $100 down.

If you buy a home and you’re a veteran…then you can get 100% financing.

If you buy a home in a rural area, USDA offers 100% financing on purchases as well.

And even if you just want a plain ole vanilla mortgage and have good to great credit, Fannie and Freddie will still offer purchase loans with as little as 3% down.

With all these options, its still amazing to me that some of my favorite news shows continue to talk about the lack of financing….I am here COME GET MONEY FROM ME!! I want to lend. 

FHA’s are Assumable!

Written by Michael A. Foote, CMB on . Posted in Uncategorized

It’s still a great time to buy IF you can get a house. Of course inventory concerns in better markets are a dilemma, let’s look at some more positives of buying today with a FHA loan.

Guess what? FHA loans are assumable and why does that matter you ask? Well in 5-7 years, which is the typical amount of time for homeownership in one home, when you go to sell the home, you can sell with an assumable loan.

Well why does that makes sense? Well, if rates rise, as they are expected to do, and you are offering a 23 year fixed rate FHA loan that is assumable. Compare that to a new 30 year fixed mortgage at 5, 6, or 7%… The savings are massive to the new homebuyer…. and guess whose home those buyers may pick when looking to buy in an higher interest rate environment. So if you are in an FHA loan – here is another reason to feel great about getting that home.