WARNING: 2010 Census Cautions from the Better Business Bureau

Be Cautious About Giving Info to Census Workers

With the U.S. Census process beginning, the Better Business Bureau (BBB) advises people to be cooperative, but cautious, so as not to become a victim of fraud or identity theft . The first phase of the 2010 U.S. Census is under way as workers have begun verifying the addresses of households across the country. Eventually, more than 140,000 U.S. Census workers will count every person in the United States and will gather information about every person living at each address including name, age, gender, race, and other relevant data.
The big question is - how do you tell the difference between a U.S. Census worker and a con artist? BBB offers the following advice:

**If a U.S. Census worker knocks on your door, they will have a badge, a handheld device, a Census Bureau canvas bag, and a confidentiality notice . Ask to see their identification and their badge before answering their questions. However, you should never invite anyone you don't know into your home.

** Census workers are currently only knocking on doors to verify address information. Do not give your Social Security number, credit card or banking information to anyone, even if they claim they need it for the U.S. Census.

While the Census Bureau might ask for basic financial information, such as a salary range, the Census Bureau will not ask for Social Security, bank account, or credit card numbers nor will employees solicit donations.

Eventually, Census workers may contact you by telephone, mail, or in person at home. However, the Census Bureau will not contact you by Email, so be on the lookout for Email scams impersonating the Census..

Never click on a link or open any attachments in an Email that are supposedly from the U.S. Census Bureau.

For more advice on avoiding identity theft and fraud, visit http://www.bbb.org/ .

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Time Running Out on First Time Buyer Tax Credit

If you are a first time buyer and want to take advantage of the $8000 tax credit, you should plan on finding and getting your new home under contract by about the first week of October if you want to make sure your home closes on time. With new disclosure regulations, loan processing will all lenders is now taking about 45 days. Don't miss out on this money just by waiting to try to find that HOT deal. The waiting time is over! It is time to secure your future!

New Appraisal Rules Slow Home Buying

May 1 brought about a new set of rules for ordering appraisals that apparently slowed the loan process and caused mass confusion throughout the industry.
On all conventional loans originated after May 1, your friendly loan officer will no longer be able to order your appraisal from an appraiser they may have used in the past. Instead, the loan officer now has to order the appraisal from the lender they plan on using and they in turn order it from a nationwide appraisal company (some of which are owned by the banks themselves). The process has already caused delays and additional costs for borrowers. Borrowers will now have to pay for their appraisal upfront via a credit card or check.
Although this is not in effect for government loans, many lenders are already taking the opportunity to use these systems on all loans.
Here is what you need to know about how this will affect you: Make sure that if you lock your loan, that you allow extra time for increased processing times and be ready to pay for that appraisal. Be sure that you have chosen your lender because lenders are going to be less likely to transfer appraisals now and we are being told that if you go with another lender midstream, plan on doing the appraisal again.
A wild changing mortgage world! I'm just glad I have so many lenders to use for my clients so I can wade through all the nonsense and get the job done!

Give me $8000 Please!

First time home buyers (those that do not occupy a home that they own) can now get $8000 from the federal government just for buying a home. What a deal! Even better is the fact that the IRS will allow you to amend your 2008 return to get the money now or wait until you file your 2009 return, your choice. They will treat your purchase as if you bought it on Dec.31 of 2008. This tax credit does NOT have to be paid back as long as you live in the home for the next 3 years. For the full credit, you must make no more than $75,000 annually ($150,000 = married couple) and the home purchase must close between January 1 and Novemebr 30, 2009.
You need to do a couple of things:
1) Get Preapproved for a new mortgage: START HERE
2) Buy your new home.
3) Apply for the tax credit. Here's the form: IRS FORM

Additional information can be found at http://www.giveme8000.info/

Ch...Ch...Ch...Changes

Boy, it sure is getting interesting these days in the home lending industry. Lenders are falling by the wayside, running out of money to lend, changing guidelines fast and furious. What is a poor home buyer to do? The answer is simple:
Now more than ever before, anyone seeking a home loan needs to have a little education about what is really going on. Lending has gone back about 20 years. Back before credit scoring, no income or stated income loans, zero down, piggy back, etc., etc.
Quite simply put... You want a bank to lend you some money? You must prove you have the income to support the upcoming new payment. Have a verifiable JOB!. Have evidence that you have the ability to pay other bills and debt obligations ON TIME! Banks are no longer looking for borrowers that are not "credit-worthy". They do not want your loan subject to Risk Management. They want to lend money to people that can justifiably prove their ability to make the payment for a long term. That is the way lending was when I got into the business 23 years ago. Back to the basics.
All this mortgage mess and economic strife we hear about is the result of people getting certain types of loans that they should have never gotten in the first place. Sure, Wall Street and investors created these loans that brokers sold (funny how the poor broker gets blamed for this). They only sold a product that the Wall Street investors and Big Banks created.
Anyway, we are currently in one of the greatest home buying opportunities of all time. We have interest rates that we have not seen since around 1970, home prices that have fallen back to the latter part of 2003, and a first time buyer credit of $8000.
Yes, certain guidelines have changed. If you want to take advantage of all this, get with an experienced and knowledgeable loan officer. Have him/her pull your credit and educate you about any shoring up that it needs. (More than 70% of all reports contain errors.) Become preapproved and know what you can afford, then go out and refinance to the lower rate and better loan program or go and buy that first home!

Interest Rates & Credit Scores

Now more than ever before, a person's credit score is directly going to affect the mortgage rate one gets on their home loan. Guidelines are stiffening up daily and future new rules are going to even affect government loans. No one is going to escape. Basically, we are going back to a time when you needed to prove your ability to pay your monthly obligations.
When I started in the business in 1987, the guidelines were simple. Prove you made your payments on your obligations on time for the previous 24 months without going 30 days or more past due. There was no scoring back then. On government loans like FHA and VA, you had to have a good payment history for 12 months, and they allowed maybe a couple of dings going back 24.
The scoring models of today are basically designed to attempt to create the same picture as before. In the lenders eyes, if cannot make a $25 charge card payment on time and let it go 30 days late recently, how can you justify making a house payment on time when it is a lot larger? The credit score algorithms are designed to calculate the probability of on time payments. Many factors go into the score:

• payment history (30,60,90 day lates)
• age of accounts (how far back since account was opened)
• percentage used versus credit available (30% used gets best scoring)
• collections (paid versus outstanding and what for?)
• past dues (currently not paid on time and still owing - this is bad)
• judgements (someone sued you and won - this usually has to be paid off before mortgage)
• types of accounts (revolving, installment, mortgage, high interest finance accounts)
• amount of different accounts (how many total open trade lines or accounts you have)

Now here is a new problem. In a recently published report, a claim was made that approximately 70% of ALL credit reports contain errors. Many of these errors were affecting the credit score. This could potentially mean thousands of dollars extra spent on mortgages.

Just a couple of years ago, a 620 score could get a person the best rates. Now the new figure is 740. On conventional conforming loans, extra fees are placed on scores between 620 and 740. Coming on the horizon now is a move to have a minimum score above of 620 on government backed mortgages like FHA, VA, and USDA loans. even senior reverse mortgages where NO credit is used, some lenders are now requiring a credit score. Go figure!

I highly suggest if you are deciding to obtain a new mortgage, get with a mortgage professional experience in reviewing your credit and able to guide and suggest options for credit restoration if needed. More information can be obtained by visiting my website at http://www.cme4loans.com/DisputingCreditReports or give me a call.

Welcome to Mortgage Planning with Gary W Smith

As information about lending and changes abound in today's mortgage market, we want to provide an accurate and up-to-date blog for the those wanting home loans. Welcome to our blog, we hope you enjoy it.



Since 1987, Gary W Smith has helped hundreds of Washington residents obtain home loans. Gary uses his training, knowledge, and experience in lending to help home buyers through the maze of financing options and loan programs. Gary is a member of the National Association of Responsible Loan Officers (http://www.NARLO.com/3425), the National Association of Mortgage Professionals, and branch manager of Allied Home Mortgage Capital Corp in Spanaway, WA.