Tuesday, January 11, 2011
Multi-Million Dollar Ponzi Scheme Mastermind Sentenced
William Arthur Sassman II, 42, Sacramento, California, who looted the life savings of dozens of investors to bankroll his own lavish lifestyle and finance his own investments, was sentenced to 18 years in prison.
Sassman convinced people who had painstakingly saved for their retirement that he could make a lot of money for them. Instead he used their money for his fine clothing, his expensive cars, his several homes and his own illegal investments.
Sassman appeared in Sacramento County Superior Court where he had previously entered a guilty plea on 13 felony counts of grand theft.
Judge Lloyd G. Connelly sentenced Sassman to prison and ordered him to pay more than $4.45 million in restitution to 48 victims. No funds have been found, however, and it is unlikely victims will receive repayment.
An investigation by agents of the Department of Justice revealed that Sassman, a licensed insurance agent, operated a Ponzi scheme starting about 10 years ago in which he repaid current investors with money from new investors.
Using a book he wrote, "Secrets of a Worry Free Retirement," Sassman convinced investors, many of whom were senior citizens, to shift their life savings to "high return" investments. These investments included foreclosed properties and real estate on Mare Island, Vallejo, California, and in other states, commercial property in El Dorado Hills, near Sacramento, California, the production of a laptop computer stand called the "Notefloat," which never sold, and annuity, stock and foreign currency investments.
Sassman actually invested little of the money and rarely paid the double to triple digit returns he promised. Instead, he spent investors' millions financing his lavish lifestyle. He charged more than $1 million on his American Express cards, spent $300,000 on automobiles, including two Ferraris, and spent more than $121,000 at Polo Ralph Lauren. Sassman possessed three invitation-only Centurion cards, which are black metal cards issued by American Express for high spenders. He also had an electronic card for collecting public assistance despite owning three homes and numerous cars.
The limited funds Sassman did invest were channeled into other illegal operations in which Sassman himself was victimized. Sassman failed to disclose to investors that he had invested more than $200,000 in a "Nigerian swindle" in 2000-2002. He also lost money in a "stock trading program" run by a group subsequently indicted in federal court in 2009 for running a Ponzi scheme and a European investment scam that promised a 200 percent profit in 45 days or 800 percent annually.
As Sassman's empire fell apart in September 2009, he sought bankruptcy for himself and his companies, but he continued to solicit funds from investors. When Sassman was arrested in November 2009, investigators discovered that in the two months before his arrest he had sent another $20,000 to a new "Nigerian swindle."
Since his arrest, Sassman has remained in custody with bail set at $2 million. But investigators discovered that he had family members gain access to stolen funds to support his family and put funds on his jail commissary account.
Sassman's victims include a Sacramento resident who invested more than $250,000 in one of Sassman's companies. Sassman promised her a seven percent annual return. Her money was combined with money from other investors for a total of more than $700,000. Of that money, Sassman spent approximately $400,000 on personal expenses, more than $50,000 went to Sassman's wife, and more than $34,000 was paid in returns to other investors. The victim lost $170,000 of her investment.
In January 2007, a Sacramento couple gave Sassman more than $80,000 that was supposed to be invested in real estate and interest-bearing accounts, but the entire amount was used to pay previous investors.
The case was prosecuted by the state Department of Justice. The investigation was conducted by the Department of Justice, with assistance from the Department of Insurance and the Department of Corporations.
http://www.themortgagemark.com/ mwilkins@capitalfmc.com
Tuesday, January 11, 2011
Monday, January 3, 2011
Mortgage Interest Deduction: Understanding How it Works Today and the Proposed Changes
Recent talk about eliminating the mortgage interest tax deduction has made headlines and, given all of the proposed changes, has caused confusion for many. Below is an explanation of what the mortgage interest deduction is in its current form and the proposed changes being suggested by The National Commission on Fiscal Responsibility and Reform in an effort to reduce the national deficit.
How the mortgage interest tax deduction works today:
Currently the monthly interest paid on your mortgage is considered a tax deductible expense, meaning you can take the amount you paid in mortgage interest throughout the year and deduct it from your taxable income–but only if you itemize your taxes, something only about one-third of Americans do each year. This is not to be confused with a tax credit which reduces the amount of tax you pay. The first-time home buyer tax credit is an example of a tax credit–if without the tax credit you owed $10,000 in taxes in 2010 but were able to claim the full first time home buyer tax credit of $8,000 the amount of taxes you would owe would go down to $2,000.
Mortgage interest can only be deducted for your primary and secondary homes. Interest paid on third or fourth homes is not tax-deductible. The amount of mortgage interest paid can be found on your 1098 Mortgage Interest Statement from your bank. Should you decide to itemize your taxes for deductions rather than take the standard deduction you will be asked to provide your 1098 Mortgage Interest Statement to your tax preparer. According to Investopedia only taxpayers whose total itemized deductions are greater than the standard deduction will itemize their taxes. As a rule of thumb, if the amount of mortgage interest and points paid during 2010 exceeds the standard deduction ($5,700 for single taxpayers, $11,400 for married taxpayers filing jointly, $8,400 for head of household) you will likely benefit by itemizing your deductions.
As a side note, Primary Mortgage Insurance paid in 2010 is also fully tax deductible for taxpayers whose adjusted gross income (taxable income) falls below $100,000 and is partially deductible for those with taxable income between $100,000 and $109,000.
Proposed changes to the mortgage interest tax deduction:
The National Commission on Fiscal Responsibility and Reform is proposing a change to the current tax deduction that would modify what is eligible, not eliminate the deduction altogether. The proposal eliminates the tax deduction for secondary homes, homes with mortgages exceeding $500,000 and mortgage interest on home equity loans. The majority of American homeowners who have primary home mortgages of less than $500,000 would not directly feel the effect the impact of the proposed mortgage interest tax-deduction changes.
Arguments for and against proposed mortgage interest tax deduction modifications:
Proponents have come out in droves both for an against the proposed changes. According to a recent Los Angeles Times article, the National Association of Realtors is currently running ads, “warning that tampering with the deduction would hurt ‘hard-working American families.’ The ads point out that 65% of the taxpayers who took the deduction made less than $100,000.”
However, the article goes on to say,
What the group doesn’t say is that about 75% of the entire $85.5 billion that people saved in taxes from the mortgage interest deduction in 2008 went to individuals or couples making $100,000 or more, according to an analysis by the congressional Joint Committee on Taxation of the latest data available.
Based on the committee’s numbers, taxpayers who took the mortgage deduction saved, on average, $2,330 in 2008. But for those reporting incomes of $200,000 and more, the average savings were nearly triple that amount.
About half of all homeowners in the U.S. — and just a quarter of all taxpayers — benefit from the mortgage interest deduction at all. That’s because most people don’t have home loans or don’t pay enough in mortgage interest to take advantage of the benefit.
Here are a few good articles with expert commentary about the pros and cons of modifying the mortgage interest tax deduction from its current form:
Wall Street Journal: Homeowner Perks Under Fire
Los Angeles Times: Tax Deduction for Mortgage Interest Could be on the Chopping Block
AOL HousingWatch: Mortgage Interest Deduction: Do You Need It?
Contact The Mortgage Mark with any questions!!
http://www.themortgagemark.com/ mwilkins@capitalfmc.com
How the mortgage interest tax deduction works today:
Currently the monthly interest paid on your mortgage is considered a tax deductible expense, meaning you can take the amount you paid in mortgage interest throughout the year and deduct it from your taxable income–but only if you itemize your taxes, something only about one-third of Americans do each year. This is not to be confused with a tax credit which reduces the amount of tax you pay. The first-time home buyer tax credit is an example of a tax credit–if without the tax credit you owed $10,000 in taxes in 2010 but were able to claim the full first time home buyer tax credit of $8,000 the amount of taxes you would owe would go down to $2,000.
Mortgage interest can only be deducted for your primary and secondary homes. Interest paid on third or fourth homes is not tax-deductible. The amount of mortgage interest paid can be found on your 1098 Mortgage Interest Statement from your bank. Should you decide to itemize your taxes for deductions rather than take the standard deduction you will be asked to provide your 1098 Mortgage Interest Statement to your tax preparer. According to Investopedia only taxpayers whose total itemized deductions are greater than the standard deduction will itemize their taxes. As a rule of thumb, if the amount of mortgage interest and points paid during 2010 exceeds the standard deduction ($5,700 for single taxpayers, $11,400 for married taxpayers filing jointly, $8,400 for head of household) you will likely benefit by itemizing your deductions.
As a side note, Primary Mortgage Insurance paid in 2010 is also fully tax deductible for taxpayers whose adjusted gross income (taxable income) falls below $100,000 and is partially deductible for those with taxable income between $100,000 and $109,000.
Proposed changes to the mortgage interest tax deduction:
The National Commission on Fiscal Responsibility and Reform is proposing a change to the current tax deduction that would modify what is eligible, not eliminate the deduction altogether. The proposal eliminates the tax deduction for secondary homes, homes with mortgages exceeding $500,000 and mortgage interest on home equity loans. The majority of American homeowners who have primary home mortgages of less than $500,000 would not directly feel the effect the impact of the proposed mortgage interest tax-deduction changes.
Arguments for and against proposed mortgage interest tax deduction modifications:
Proponents have come out in droves both for an against the proposed changes. According to a recent Los Angeles Times article, the National Association of Realtors is currently running ads, “warning that tampering with the deduction would hurt ‘hard-working American families.’ The ads point out that 65% of the taxpayers who took the deduction made less than $100,000.”
However, the article goes on to say,
What the group doesn’t say is that about 75% of the entire $85.5 billion that people saved in taxes from the mortgage interest deduction in 2008 went to individuals or couples making $100,000 or more, according to an analysis by the congressional Joint Committee on Taxation of the latest data available.
Based on the committee’s numbers, taxpayers who took the mortgage deduction saved, on average, $2,330 in 2008. But for those reporting incomes of $200,000 and more, the average savings were nearly triple that amount.
About half of all homeowners in the U.S. — and just a quarter of all taxpayers — benefit from the mortgage interest deduction at all. That’s because most people don’t have home loans or don’t pay enough in mortgage interest to take advantage of the benefit.
Here are a few good articles with expert commentary about the pros and cons of modifying the mortgage interest tax deduction from its current form:
Wall Street Journal: Homeowner Perks Under Fire
Los Angeles Times: Tax Deduction for Mortgage Interest Could be on the Chopping Block
AOL HousingWatch: Mortgage Interest Deduction: Do You Need It?
Contact The Mortgage Mark with any questions!!
http://www.themortgagemark.com/ mwilkins@capitalfmc.com
Wednesday, December 1, 2010
Underwater Veterans Can Find Relief in a Compromise Loan
The VA does an amazing job of keeping veterans in their homes.
Nearly three-quarters of the VA borrowers who defaulted in fiscal year 2009 avoided foreclosure thanks to the agency’s policies and procedures.
But the Department of Veterans Affairs also operates a unique program that helps veterans who are trying to sell their homes in a difficult real estate market.
Home values have fallen drastically in some parts of the country, leaving some service members with a significant chasm between what they can sell their home for and what they still owe on their mortgage loan.
The VA’s Compromise Sale program helps veterans who have seen their home values collapse recoup and rebound. Through this program, service members can receive a “compromise claim” from the VA that essentially covers that gap between the sale price and their outstanding loan balance.
There’s an array of conditions that need to be met for service members interested in a compromise sale. Among them:
Sellers must document financial hardship
No second liens can exist
There must be a purchase agreement in place before a compromise application is filed
The pending sale must be a better deal financially for the government than a foreclosure
Homeowners will need to furnish a current appraisal. They’ll also need to prepare for a reduced entitlement, at least until the VA is reimbursed for the sale.
Veterans can learn more about the Compromise Sale program by contacting the VA at 1-800-933-5499. The agency’s regional loan center in Houston also maintains a helpful page on Compromise Sales.
Contact The Mortgage Mark with any questions or for more Information.
http://www.themortgagemark.com/
mwilkins@capitalfmc.com
Nearly three-quarters of the VA borrowers who defaulted in fiscal year 2009 avoided foreclosure thanks to the agency’s policies and procedures.
But the Department of Veterans Affairs also operates a unique program that helps veterans who are trying to sell their homes in a difficult real estate market.
Home values have fallen drastically in some parts of the country, leaving some service members with a significant chasm between what they can sell their home for and what they still owe on their mortgage loan.
The VA’s Compromise Sale program helps veterans who have seen their home values collapse recoup and rebound. Through this program, service members can receive a “compromise claim” from the VA that essentially covers that gap between the sale price and their outstanding loan balance.
There’s an array of conditions that need to be met for service members interested in a compromise sale. Among them:
Sellers must document financial hardship
No second liens can exist
There must be a purchase agreement in place before a compromise application is filed
The pending sale must be a better deal financially for the government than a foreclosure
Homeowners will need to furnish a current appraisal. They’ll also need to prepare for a reduced entitlement, at least until the VA is reimbursed for the sale.
Veterans can learn more about the Compromise Sale program by contacting the VA at 1-800-933-5499. The agency’s regional loan center in Houston also maintains a helpful page on Compromise Sales.
Contact The Mortgage Mark with any questions or for more Information.
http://www.themortgagemark.com/
mwilkins@capitalfmc.com
Friday, November 12, 2010
Internet Tips for Home Buyers
Save time and stress when using the Internet to find your next home.
The internet has made it much easier for people search for homes and Real Estate information than ever before however the sheer volume of information can make it difficult to use the internet effectively.
There are few free technologies and tips that can make can a big difference in your experience while researching Real Estate online.
First is Google’s email solution which is www.Gmail.com. Go and set up a new email account before you start your search and use this email to sign up for Real Estate sites and to have listings delivered to. This will keep all of your Real Estate information in one place and keep it from interrupting your business or personal email.
In addition to the free email Gmail also supplies you with a free telephone from within your account which allows you to make calls to anywhere in the United States and still keep your home and cellular phone number private.
There is also another free service that can help you in your Real Estate search which is Google Alerts. These are included in your Gmail account and can be set to deliver any keyword information you choose to your Gmail account on a daily basis such as “Levittown Homes For Sale".
If you are going to use the Google search engine to search for homes be sure to click the advanced search link to the right of the Google Search Bar which will allow you to pinpoint exactly what you are looking for in your searches and just as importantly what you are not.
It’s very important to know what your credit report looks like as you begin to look for Real Estate and unlike free credit report .com which is anything but free www.annualcreditreport.com is actually a free site created by the three major search engines where you can get copies of all three of your credit reports at no charge and with no credit card required once a year.
A final tip that can save you hours while searching online is when visiting popular Real Estate sites like www.realtor.com or www.zillow.com to review properties try right clicking on the property and then click open in new tab or window. This will allow you to look at multiple properties at the same time and keep your search results open so you don’t have to use the back arrow to try to find the list of properties you just pulled up.
Using these free technologies will help make your online Real Estate search much more productive and limit the time and stress associated with trying to negotiate the internet.
Contact The Mortgage Mark with any questions! http://www.themortgagemark.com
mark@themortgagemark.com
The internet has made it much easier for people search for homes and Real Estate information than ever before however the sheer volume of information can make it difficult to use the internet effectively.
There are few free technologies and tips that can make can a big difference in your experience while researching Real Estate online.
First is Google’s email solution which is www.Gmail.com. Go and set up a new email account before you start your search and use this email to sign up for Real Estate sites and to have listings delivered to. This will keep all of your Real Estate information in one place and keep it from interrupting your business or personal email.
In addition to the free email Gmail also supplies you with a free telephone from within your account which allows you to make calls to anywhere in the United States and still keep your home and cellular phone number private.
There is also another free service that can help you in your Real Estate search which is Google Alerts. These are included in your Gmail account and can be set to deliver any keyword information you choose to your Gmail account on a daily basis such as “Levittown Homes For Sale".
If you are going to use the Google search engine to search for homes be sure to click the advanced search link to the right of the Google Search Bar which will allow you to pinpoint exactly what you are looking for in your searches and just as importantly what you are not.
It’s very important to know what your credit report looks like as you begin to look for Real Estate and unlike free credit report .com which is anything but free www.annualcreditreport.com is actually a free site created by the three major search engines where you can get copies of all three of your credit reports at no charge and with no credit card required once a year.
A final tip that can save you hours while searching online is when visiting popular Real Estate sites like www.realtor.com or www.zillow.com to review properties try right clicking on the property and then click open in new tab or window. This will allow you to look at multiple properties at the same time and keep your search results open so you don’t have to use the back arrow to try to find the list of properties you just pulled up.
Using these free technologies will help make your online Real Estate search much more productive and limit the time and stress associated with trying to negotiate the internet.
Contact The Mortgage Mark with any questions! http://www.themortgagemark.com
mark@themortgagemark.com
Friday, November 5, 2010
7 Requirements of Mortgage Verification and Validation
Verification and Validation – how it can affect your loan.
Today’s economic crisis has taught mortgage lenders one huge lesson they are all living by - verify and validate every loan file. Documentation – sounds like an easy task, but simply turn the clock back just a few years to the days of stated income loans, no income loans and even no income, no assets, no doc loans (just give me a high credit score) and you have the reason we now live in a Full Documentationworld. Did these loans make sense? Opinions vary, but eliminating as product that was intended for self employed borrowers has restricted business owners from tapping needed equity to stay operational. Ask any business owner you know what they think the chances are of qualifying for a loan would be today.
Below are 7 items that must be verified and validated these days when applying for mortgage financing:
Employment – Even after a loan has been cleared to close, telephone confirmation of employment is now routine just before a loan is scheduled to fund. In other words, don’t quit your job!
Income – 30 days worth of pay stubs. Previous two years W 2’s. If you show any kind of business income or loss, last two years tax returns (business and personal). Signed 4506-T forms at loan application allow lenders to order tax transcripts from the IRS to match up to your income… And they all order them. If you show a loss on your tax returns tell your loan officer upfront and save yourself frustration. This is not always a deal killer but will affect your debt ratio.
Assets – When a loan is run through automated underwriting it takes into account the assets that are stated. If you show money in checking, savings, 401k or any other investment, you will want to validate it by providing statements. Many times the final page or pages of the statements are blank. Include ALL pages of your statements regardless if they are blank. Note – if you are printing these documents from the internet, as a security measure, institutions do not include name or account number. This would not be acceptable documentation.
Deductions – Provide supporting documentation for payroll deductions such as child support, alimony, garnishments, 401k loans. Anything that affects your debt ratio must be documented which would include providing divorce and separation agreements and terms of of 401k loans.
Appraisals – This verification is done behind the scenes, but rest assured, even with all the new HVCC appraisal regulations, lenders validate appraisal figures through automated valuation models (AVM’s). The days of stretching home values in order to close a deal are long gone.
Gift Funds – Lenders want to see gift money comes from an acceptable gift source. And they way to show this is a paper trail… A bank statement from the gift source showing funds were available and a copy of the transaction transferring monies from the gift account to the borrower if deposited into borrowers account.
Earnest Money Deposit – Also referred to as the EMD. Many times this single item goes undocumented and causes a delay in clearing a loan to close. Sure we need a copy of the front of the check, but lenders want to see that the money was deposited before crediting it to the transaction.
These are just a few examples of documentation to gather when applying for a mortgage. This is just a guideline to use and lender requirements can and will vary, but providing the above documentation to your loan officer, you will greatly reduce the chances of frustration and delays in your loan closing. The mortgage process can be stressful enough these days. Supplying the required documentation the first time a loan is submitted to underwriting will increase the chances of a stress free closing.
Contact The Mortgage Mark with any questions!
www.themortgagemark.com mwilkins@capitalfmc.com
Today’s economic crisis has taught mortgage lenders one huge lesson they are all living by - verify and validate every loan file. Documentation – sounds like an easy task, but simply turn the clock back just a few years to the days of stated income loans, no income loans and even no income, no assets, no doc loans (just give me a high credit score) and you have the reason we now live in a Full Documentationworld. Did these loans make sense? Opinions vary, but eliminating as product that was intended for self employed borrowers has restricted business owners from tapping needed equity to stay operational. Ask any business owner you know what they think the chances are of qualifying for a loan would be today.
Below are 7 items that must be verified and validated these days when applying for mortgage financing:
Employment – Even after a loan has been cleared to close, telephone confirmation of employment is now routine just before a loan is scheduled to fund. In other words, don’t quit your job!
Income – 30 days worth of pay stubs. Previous two years W 2’s. If you show any kind of business income or loss, last two years tax returns (business and personal). Signed 4506-T forms at loan application allow lenders to order tax transcripts from the IRS to match up to your income… And they all order them. If you show a loss on your tax returns tell your loan officer upfront and save yourself frustration. This is not always a deal killer but will affect your debt ratio.
Assets – When a loan is run through automated underwriting it takes into account the assets that are stated. If you show money in checking, savings, 401k or any other investment, you will want to validate it by providing statements. Many times the final page or pages of the statements are blank. Include ALL pages of your statements regardless if they are blank. Note – if you are printing these documents from the internet, as a security measure, institutions do not include name or account number. This would not be acceptable documentation.
Deductions – Provide supporting documentation for payroll deductions such as child support, alimony, garnishments, 401k loans. Anything that affects your debt ratio must be documented which would include providing divorce and separation agreements and terms of of 401k loans.
Appraisals – This verification is done behind the scenes, but rest assured, even with all the new HVCC appraisal regulations, lenders validate appraisal figures through automated valuation models (AVM’s). The days of stretching home values in order to close a deal are long gone.
Gift Funds – Lenders want to see gift money comes from an acceptable gift source. And they way to show this is a paper trail… A bank statement from the gift source showing funds were available and a copy of the transaction transferring monies from the gift account to the borrower if deposited into borrowers account.
Earnest Money Deposit – Also referred to as the EMD. Many times this single item goes undocumented and causes a delay in clearing a loan to close. Sure we need a copy of the front of the check, but lenders want to see that the money was deposited before crediting it to the transaction.
These are just a few examples of documentation to gather when applying for a mortgage. This is just a guideline to use and lender requirements can and will vary, but providing the above documentation to your loan officer, you will greatly reduce the chances of frustration and delays in your loan closing. The mortgage process can be stressful enough these days. Supplying the required documentation the first time a loan is submitted to underwriting will increase the chances of a stress free closing.
Contact The Mortgage Mark with any questions!
www.themortgagemark.com mwilkins@capitalfmc.com
Thursday, November 4, 2010
Mortgage Definition: Stability Of Income
Stability Of Income — A Simple Definition:
One of the factors that underwriters will consider on a loan application is “stability of income”. The stability of income risk factor is one where the underwriter will attempt to measure how likely it is that your income may continue based on what your previous work history looks like.
Stability Of Income — An Expanded Definition:
While there may be a wide range of things an underwriter can consider regarding the stability of income, there are a few specific things that an underwriter will look at when considering the stability of income.
These include:
Gaps in Employment – If there are any gaps in employment that are longer than one month, be ready to provide an explanation. If you happen to be a seasonal worker, allowances can be made but be ready to provide documentation.
The Probability Of Continued Employment — What are the chances of continued employment at your current employer? What are the chances that you can get a similar job based on your qualifications, previous work history, education and location.
Frequent Job Changes — If you have a history of changing jobs, it isn’t necesarily a bad thing as long as you can document that you have changed jobs for advancements, more money, benefits or other related topics. Remember, the underwriter is looking at the stability of income – not necessarily how long you have been at one company.
Stability of income is one of the important items that an underwriter will consider when you apply for a loan. By keeping in mind the simple items of: gaps in employment, the probability of continued employment and frequent job changes you can be ready to provide explanations — before the underwriter even asks for them.
Contact The Mortgage Mark with any questions!
http://www.themortgagemark.com mwilkins@capitalfmc.com
One of the factors that underwriters will consider on a loan application is “stability of income”. The stability of income risk factor is one where the underwriter will attempt to measure how likely it is that your income may continue based on what your previous work history looks like.
Stability Of Income — An Expanded Definition:
While there may be a wide range of things an underwriter can consider regarding the stability of income, there are a few specific things that an underwriter will look at when considering the stability of income.
These include:
Gaps in Employment – If there are any gaps in employment that are longer than one month, be ready to provide an explanation. If you happen to be a seasonal worker, allowances can be made but be ready to provide documentation.
The Probability Of Continued Employment — What are the chances of continued employment at your current employer? What are the chances that you can get a similar job based on your qualifications, previous work history, education and location.
Frequent Job Changes — If you have a history of changing jobs, it isn’t necesarily a bad thing as long as you can document that you have changed jobs for advancements, more money, benefits or other related topics. Remember, the underwriter is looking at the stability of income – not necessarily how long you have been at one company.
Stability of income is one of the important items that an underwriter will consider when you apply for a loan. By keeping in mind the simple items of: gaps in employment, the probability of continued employment and frequent job changes you can be ready to provide explanations — before the underwriter even asks for them.
Contact The Mortgage Mark with any questions!
http://www.themortgagemark.com mwilkins@capitalfmc.com
Monday, November 1, 2010
Can I have 2 FHA loans at the same time?
Why would someone have two FHA loans at the same time? Here are the reasons and the exceptions that may allow someone to have 2 concurrent FHA Loans.
Increase in family size – There must be an increase in family size in which their current house can’t support the new family member(s). You will have to prove the increase. Also, you must have 25 percent equity in your current home or pay it down to 75% LTV (loan-to-value). An FHA approved appraiser must be used to determine such new value.
Relocation – If the borrower is relocating and it is established that they aren’t in reasonable distance from their current property. Keeping in mind that reasonable can be defined differently from any lender.
Note – If that borrower(s) returns back to the same area, they are not required to re-establish residency in that property in order to have another FHA insured mortgage.
Vacating a jointly owned property – A borrower my leave a property and be eligible for another FHA loan if the co-borrower is to stay in the same property that is being vacated.
A good example of this is because of a divorce and that the vacating spouse needs to buy a new home.
Non-Occupying co-borrower – If someone previousily co-signed for a family member or relative while using a FHA loan. This type of FHA loan is called a non-occupant co-borrower loan. This borrower would still be eligible to purchase their own home using a FHA mortgage.
Without meeting any of these requirements, a potential borrower would not be approved for a second FHA insured loan.
Contact The Mortgage Mark with any questions! mark@themortgagemark.com
www.themortgagemark.com
Increase in family size – There must be an increase in family size in which their current house can’t support the new family member(s). You will have to prove the increase. Also, you must have 25 percent equity in your current home or pay it down to 75% LTV (loan-to-value). An FHA approved appraiser must be used to determine such new value.
Relocation – If the borrower is relocating and it is established that they aren’t in reasonable distance from their current property. Keeping in mind that reasonable can be defined differently from any lender.
Note – If that borrower(s) returns back to the same area, they are not required to re-establish residency in that property in order to have another FHA insured mortgage.
Vacating a jointly owned property – A borrower my leave a property and be eligible for another FHA loan if the co-borrower is to stay in the same property that is being vacated.
A good example of this is because of a divorce and that the vacating spouse needs to buy a new home.
Non-Occupying co-borrower – If someone previousily co-signed for a family member or relative while using a FHA loan. This type of FHA loan is called a non-occupant co-borrower loan. This borrower would still be eligible to purchase their own home using a FHA mortgage.
Without meeting any of these requirements, a potential borrower would not be approved for a second FHA insured loan.
Contact The Mortgage Mark with any questions! mark@themortgagemark.com
www.themortgagemark.com
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