Your MN Mortgage Mom's Blog

Home Values...You Got It, Your Home Is NOT Worth What You Thought.

Sherri Sherpy (Mortgage & Investment Consultants) — Sat, 06 Mar 2010 17:13:18 -0600

I'm certainly not an appraiser or an expert on home values, but being in the biz as long as I have, I do have a fairly good understanding of appraised home values and the ever restrictive lending requirements behind it.

For many who have had an appraisal done in the past year or so, may be able to attest to this blog's title. The appraisal was done and you were shocked that the value came in so low.

"But I just spent $25,000 for this beautiful landscaping!" In this day and age, that is called over-improved. You just spent a lot of money that did not increase the value of your home.

"But there was a home just like mine that just sold last April 2009 and you're telling me that my home is $75,000 less than that one?" Umm, yep! That home that sold just like yours almost a year ago is not even a viable comparable at this point.

So, what gives? How is a value determined?

Let's get the predominating factor out right away:

Your home's value is PRIMARILY DICTATED by like style homes that have sold within the last 6 months, within a 1 mile radius of yours. Period.

(Now, obviously, if you are in a rural area or have very unique characteristics, that guideline is stretched. But for the typical suburban area, this holds true.)

Let's break this down a bit further:
The homes that have sold in your area are what the industry calls "Comparables". Your home's value is dictated by these comparables. And it cannot be just any comparable, rather it has to "fit" within guidelines. When looking at comparables to a subject property (your home), the basic criteria need to be met:

Comparable homes must be the same style of home as yours. You cannot compare ramblers with two stories.
The comparable homes need to be within a 1 mile radius of your home (some lee-way for extenuating circumstances)
Those comparables should have the same number of total rooms that yours does.
The comparables must be similar in square footage and age (with some wiggle room for adjustments)
The comparables must have been sold within the last 6 months. Homes that are older in sales are not viable comparables. Lenders take this a bit further and also require that at least one of the comparables be sold within the last 3 months.
The appraisal report is required to have a minimum of THREE comparables to your home and TWO comparables that are active/pending listings for a TOTAL OF FIVE. Of those, your home's value rests somewhere between. In other words, your value cannot be the highest number of all comparables. The comparables MUST bracket your value.

Whew! Did you take all that in? Here is my message...before you decide to spend major dollars on renovations to sell your home or refinance, first understand your immediate, neighborhood housing market. You may want to ask your local RE agent to assist you with a comparative market analysis. You don't want to spend your hard earned money for a dismal ROI. And personally, I do not want to be making that call only to hear, "What! My home is only worth what? Are you crazy??" Why yes I am, but that just made the MN Mortgage Mom a little more crazier.

My Puppy Reminds Me Of...........A MN Mortgage Client?

Sherri Sherpy (Mortgage & Investment Consultants) — Thu, 13 Dec 2007 10:38:21 -0600

A few years ago, we lost a friend, a companion and a family member. His name was Pup and he was a beautiful, 11 year old black lab. Kidney disease took him. He was incredibly special to us and the loss was sooo hard. I remember the final days...his body was so weak, but his mind was just like it was when he was 2. I couldn't let go just yet and I filled an air mattress, covered it with lots of comfy blankets and that's where Pup and I slept, cuddled and spent our final time together. When the day came to say goodbye, we knew he was ready. He would look at me on that mattress and say, "Mom, I'm too tired to fight anymore." Uuugh...that was one of the worst days of my life. I still reflect on his beautiful life...sometimes with tears and sometimes with smiles. We loved him dearly and still miss him terribly.

And my husband and I said never again. The loss was too hard to go through a second time.

Well, that didn't last long. Our home was too lonely. It was just too quiet. Our kids said, "How bout a puppy? P-L-E-A-S-E!!!" A puppy! Do you know how much work they are? No way!

For any of you who have kids, well, they can be quite pursuasive and in their world, yes means yes and no means maybe. They continued to "work" us...nothing like hitting mom and dad when we're down! Our hearts were still broken and those little stinkers knew it...they preyed on our weakness.

So, a puppy it was! What kind should we get? Ha! Not a cute little terrier that I could galavant around in my foo-foo bag to all my closings. Not even another lab...we didn't want to feel like we were trying to replace Pup. How about an Old English Mastiff? "Mom, they are so cute and we can have lots of fun with it!" Are you nuts??? Those things are HUGE! But I couldn't help myself...I went straight to my handy dandy laptop and started doing the research...

The next thing we knew, we were driving to Cambridge, MN to pick up our cute little 8 week old Mastiff from a Mastiff breeder. And cute he was!!! 11 pounds of wrinkly skin and baby slobber to boot.

That was 2 years ago. Now, at 2 1/2 years old, everything is gotten REALLY BIG. Big body (lordy, this guy is almost 200 pounds), big paws (or should I say massive), big slobber (our home is littered with bibs to catch it before it slings), even big poops. Okay, I could have probably skipped the last visual, but dang, everything about this wonderful beast is BIG. Sorry if I offended anyone. Small digression...we keep teasing our next door neighbors, who are one of our dearest friends and non-pet owners that we're going to build sculptures out of the stuff...Ha! Let me just say, it's a whole lot of poop. Dad's daily clean up job...

Back to the 4-legged child. His name is Mic. He's cute, he's funny and he's a whole lot of work. First came the potty training. For all you who have a puppy, invest in Nature's Miracle. It IS a miracle...the stuff WORKS. We now own stock in the company :). Let me tell you, potty training was not fun. Mic just didn't understand...he was confused by the whole process, but we were successful...2 weeks and he figured it out. Kind of reminds me of my First Time Home Buyer clients! Now don't get me wrong...I love first time home buyers...they are my niche. I really enjoy working with these people. The lack of understanding and confusion about the whole process is what grounds me...keeps me to the basics with patience, kindness and understanding of my own. Kind of like Mic and the whole potty training business.

And he whines...he whines when he is bored, he whines when he wants attention. He's the perfect little toddler. And when I want him to do something (we're STILL working on obedience and tricks) he just looks at me like "you're kidding, you really want me to do this?" Think about all those underwriters out there that get paid the big bucks to make all of our lives a little bit miserable. They want this, they want that...conditions, conditions. I call my wonderful mortgage client and I can feel that look right through the telephone wires. "Are you kidding? You really want me to do this?" Don't kill the messenger...we've got a doozy of an underwriter on our hands...we all take a deep breath and work through it together.

What makes it all worthwhile? His love and appreciation. When he wags his tail because he's so happy to see us. When he slobbers on our face to show us his love. It's unconditional. When the day is done, all the work, the headaches and frustration melt away. He adores us and shows it in so many wonderful ways.

I have been blessed with so many wonderful mortgage clients throughout the years. Through the mutual patience, admiration and appreciation for hard work well done. The appreciation of my clients does not go un-noticed. It's what makes me tick and move forward. It is rewarding and fills me up with warm fuzzies. Just like Mic...warm fuzzies and a little slobber to boot.

MN Home Improvement Loans

Sherri Sherpy (Mortgage & Investment Consultants) — Fri, 22 Jan 2010 07:58:47 -0600

Just purchasing a home and it needs a few repairs? Or perhaps you are already a homeowner in need of funds to "fix up" your castle?

Either way, you may want to stay away from the sometimes expensive rehab loans and look to the State as a wonderful alternative.

The State of MN offers a very attractive program for your home improvement projects for MN residents.

Appropriately called the "Fix Up Fund".

Here are the highlights:

Household income at or below $96,500
Property must be owner-occupied
You can hire a contractor or do the work yourself
Up to a 20 year term
Loan amounts up to $35,000
Most repairs that will improve the efficiency of your home are okay...no swimming pools, please!
Whoa! And those who complete the improvements may be eligible for a rebate, up to 35% of the cost of repairs. Nice!

The best part is the rates are VERY low...currently at 5.99%!

For more information, contact a sponsoring lender today.

FHA Loans...Buyers Be Warned! You May Want To Act Now.

Sherri Sherpy (Mortgage & Investment Consultants) — Wed, 20 Jan 2010 20:03:19 -0600

Amidst the rising foreclosures in our country, the Federal Housing Administration has seen dramatic losses and its reserves have fallen below Congressional required levels.

In response, FHA is raising fees and tightening lending standards in an effort to bring more revenue to the agency and continue to keep FHA loans available to YOU, the consumer.

If you are waiting to purchase a home during the Spring/Summer market, you will be amongst the borrowers affected by the new changes. It may be time to get off the fence now, instead of later!

Although specific dates have not yet been announced, here is a snapshot of the upcoming guidelines:

Raise the UFMIP (up front mortgage insurance premium) to 2.25%. Right now, that premium is 1.75%. We will still be allowed to "roll" the premium into the loan, but this increase will absolutely increase the total loan/payments that the home buyer is approved upon. This change is scheduled for this spring.

FHA is also seeking legislative authority to increase the annual premium (currently .55%)...More to come on that, as all of this continues to unfold.

Reduce allowable seller paid closing costs from 6% down to 3%. If you are a first-time home buyer who is "cash strapped", this could be a significant blow to your ability to purchase a home. This change is scheduled for early summer.

So what is The MN Mortgage Mom's recipe for success? Don't wait! If you have the means and ability to purchase a home, do it now!

Mortgages...And You Thought You Were Confused Before?

Sherri Sherpy (Mortgage & Investment Consultants) — Wed, 20 Jan 2010 18:47:15 -0600

Mortgage Client: "I'm confused. I don't understand. None of this makes sense. This paper does not even give me the numbers I need to know."

Loan Officer: "Why, Mr. and Mrs. Mortgage Client, you are absolutely correct...all this confusion compliments of our wonderful government and their ivory tower."

Could government just leave well enough alone? Yes, the MN Mortgage Mom is on a rant!

As of January 1, 2010, the newly overhauled Good Faith Estimate (GFE) and HUD-1 Settlement statement went into effect. And boy, what a confusing mess it is!

Last week, I met with a new client who has bought and sold real estate several times. This client is very well informed and experienced. As we were going through the mortgage documents, we came upon the new GFE. I began going through it when my client said, "Excuse my profanity, but what is this s**t?" I explained to him the changes, compliments of our wonderful government and their ivory tower. He expressed, "This is a joke. Is there any way I can get the old document?"

First, who other than the government can take a 1 page, detailed document of all fees and turn it into a 3 page bundled up mess??

To make matters worse, it does nothing to help the mortgage consumer understand some fundamental and critical numbers:

Cash-to-Close--There is no indication whatsoever on the new GFE as to how much money will be required from the borrower to bring to closing. Huh?
Total Monthly Payment--Ummm, yes, most borrowers want to know what their total payment is. Gotta look for it on another mortgage document!
Seller Paid Closing Costs--For those who are purchasing a home, it is nice to see how seller paid closing costs paid on behalf of the borrower/buyer will affect their bottom line cash needed at closing. You guessed it! Not on the GFE anymore! Gotta look for it on another mortgage document again.
Details--Many of my clients are very detail oriented. They want to know exactly what they are spending their money on. Rightfully so! The new GFE takes all of that away. Now fees are BUNDLED. Great for the lender, not so great for the consumer.

Here's my point. I am not ranting because this has just made my job more difficult. It has, but I will get used to it very quickly. I am used to constant change, being in the industry as long as I have. However, my point is these new forms do nothing to provide clarity to the consumer in a concise, easily documented fashion. Sure, these numbers can be found elsewhere in other mortgage documents, but GEEZ! At the consumer's expense in the growing sea of mortgage confusion?

All of this, compliments of our wonderful government and their ivory tower.

The Feds Are Pushing Short Sales in a BIG Way

Sherri Sherpy (Mortgage & Investment Consultants) — Mon, 07 Dec 2009 10:23:29 -0600

Short Sales and Deed in Lieu of Foreclosure (commonly referred to as Cash for Keys) have received major attention on the Hill.

The Feds are stepping in AGAIN, perhaps to the advantage of everyone...homeowners, buyers and the real estate community.

In an effort to curtail foreclosures, the Feds have introduced HAFA, Home Affordable Foreclosure Alternatives, effective April 2010.

This is a big push to get banks to approve and move expeditiously on allowing homeowners to short sale their homes or possibly turn in their keys WITHOUT deficiency recourse.

Up until now, foreclosures have outnumbered short sales and loan modifications 20:1. Banks have been very non-responsive to short sales...or they take "a month of Sundays" to even respond to an inquiry. Homeowners, buyers and agents may see some relief around the horizon.

With HAFA, banks will be required to streamline and simplify the process of short sales or DILs.

Here are the highlights:

Allows homeowner to receive preapproved short sale terms before property listing
Prohibits servicer from reducing real estate commissions as a condition of approving the short sale. Great news for the agents!
Homeowners are fully released from future liability for the debt...No more deficiency judgments!
Servicer must respond within 30 days of the homeowner requesting a short sale. Yes! An established time frame!
$1,500 relocation incentive to the homeowner
The bank MUST respond within 10 business days of receiving an executed purchase agreement, it's decision on approval or denial. You read it right...TEN DAYS!
The servicer (bank) may not charge the homeowner administrative processing fees...the servicer must pay all out of pocket expenses

Click on the provided link above to read the entire directive. It even includes a short sale agreement.

Happy Holidays from The MN Mortgage Mom!

Are Mortgage Rates Going Down? How Low Will They Go?

Sherri Sherpy (Mortgage & Investment Consultants) — Wed, 21 Jan 2009 22:43:24 -0600

If there is one question that I get asked the most, it is "Sherri, how low will mortgage rates go?" Or another version, "Will interest rates go down further?"

Let me start by saying, THAT is the million dollar question. In the last 3 weeks, I have seen 30 year fixed rates as low as 4.375%, only to jump up to 5.375%. What a wild, wild roller coaster we are on!

I subscribe to many rate and market commentaries, alerts, updates and news. I have been in this industry for nearly a decade. And the Rate Game is the most difficult THING to put my thumb on these days. Nothing makes sense. Statistical data has been blown-out-of-the-water. Experts predict down and then they go up.

There seems to be a lot of buzz waiting for the government to bring the interest rates down to 4.5%. Well, we've been there and lower. Economic data can be major market movers, as we have witnessed with the change in mortgage interest rates several times per day. Some experts predict that rates will continue to fall and others believe our Treasury is going to BUST and rates will sky rocket. What gives?

If that isn't enough, let's take this a little further...inside the workings of the mortgage industry itself. Rates are low...they were REALLY low 2 weeks ago. But now we are seeing some crazy things going on. Fannie Mae and Freddie Mac just announced more LLPA's (loan level pricing adjustments). These are all the "adjustments" that get layered on top of the rate for certain loan scenarios. For example:

Want to do a cash out refinance? Be prepared for an LLPA.
Have a credit score under 740? Could mean another LLPA.
Buying an investment property? HUGE LLPA!
Buying or refinancing with a 1st and 2nd mortgage? Yep! You're getting it now...another LLPA.

So let's say 30 year fixed rates are at 4.5%. You want to refinance. You have a 699 mid credit score, you need to take a little cash out to pay off a bill and your loan-to-value ratio is 80%. Think you will get a 4.5% rate? Not even close...Unless you want to pay points to cover all those little LLPA's.

To make things even a little more interesting, there is now talk of major lenders beginning to absorb their costs of lost interest rate locks by charging fees. These fees will be "absorbed" in their interest rates, meaning an inflated, higher rate or charging the fee outright. See my blog, What? Mortgage Rates Go Up When They Are Going Down? for more information on this.

If I can offer my 2 cents of advice on the Rate Game, it would be this:

If you feel inclined to shop different lenders, do it ahead of time, find a lender or loan officer you trust and stick with that person. Yes, that means conversation, getting a GFE and doing your homework up front. If not, you may end up losing...I have seen it happen on many occasion. Rates can change several times a day. Don't chase 3 or 4 lenders. By the time they all get back to you, rates may have gone up.
With that research, make sure you find a loan officer who is current on economic news and has the technology to inform you of possible upcoming rate changes before they happen.
Be prepared to lock at a moment's notice. That means, giving your loan officer every conceivable way to get a hold of you. Remember what I said earlier...we are on a roller coaster ride and the ride just keeps getting wilder!
If you are refinancing, know what the value of your home is, or at least an accurate estimate. Remember LLPA's? They can hurt when you find out you really have a loan-to-value ratio of 80% and not 50% that you wished for. Also, know what you want to do with your refinance. Is it just rate-and-term? Are you taking cash out? What do your credit scores look like? When you choose your loan officer, have this discussion. Know what your certain set of circumstances are and how those may affect the interest rate. It will save your loan officer from having to deliver the bad news that you really can't get that wonderful rate unless you pay points and it will save you from frustration.
This one may sound bold, but here it is, anyway...Don't get too greedy. You may miss the boat all together. If you are waiting for rates to go down to 4.25% without closing costs, you most likely will never move forward. Rates are at a historical low. If it feels right and the payment fits, LOCK !

Mortgage Documents 101...GFE? Til? 1003? 4506?

Sherri Sherpy (Mortgage & Investment Consultants) — Wed, 21 Jan 2009 20:44:32 -0600

When most industries are boasting the paperless era, the mortgage industry continues to inundate our consumers with more paper! Every year it seems that we are presented with new state and federal disclosures. What do all these forms mean?

Well, here it is...Everything you wanted to know about mortgage documents, but were too afraid to ask!

The following descriptions are meant to be abbreviated explanations of lending disclosures. Of course, I recommend that you read them in their entirety, ask your loan officer questions where they arise and seek professional counsel should you feel it necessary.

Uniform Residential Loan Application (1003)

The lender uses this form to record relevant financial information about an applicant who applies for a residential mortgage. This form will represent the information shared in the interview concerning residence history, income, assets, liabilities, details of the proposed transaction and declarations about the applicant, his/her intentions and his/her past.

Good Faith Estimate (GFE)

This document is a written estimate of expected closing costs that a lender must provide a prospective home loan borrower. Brokers and lenders are required by law to make as accurate an estimate as they can.

Truth In Lending (TIL)

The purpose of the Truth In Lending Act (TILA) is to promote the informed use of consumer credit by requiring disclosures about its terms and costs in a standardized manner. This document will show you your Annual Percentage Rate (APR) which is the cost of credit on a yearly basis, expressed as a percentage. This is required to be disclosed by the lender and it includes up-front costs paid to obtain the loan, and is, therefore, usually a higher amount than the interest rate stipulated in the mortgage note. APR Does not include title insurance, appraisal and credit report.

Borrower's Certification and Authorization

This document affirms your application intentions, its accuracy, consequences of lying, and authorizes your lender or its assignee to verify your application information and modify the method by which your income may be documented for the purposes of loan processing and approval.

Credit Authorization

This document allows your broker/lender to obtain and share your credit report with lenders, investors or other relevant 3^rd parties for the purpose of fulfilling your request for an extension of credit.

RESPA Servicing Disclosure

The Real Estate Settlement Procedures Act (RESPA) requires the lender or mortgage broker to tell you in writing whether it expects that someone else will be servicing your loan (collecting your payments). In this document, you'll find the lender's history of servicing and transferring servicing rights.

4506-T Request for Transcript of Tax Return

This document authorizes your lender to obtain transcripts (i.e. Form 1040 series, Form 1065, Form 1120, Form 1120A, Form 1120H, Form 1120L, and Form 1120S) as well as supplemental filed materials (i.e. Form W-2, Form 1099 series, Form 1098 series, or Form 5498 series transcript) for verification and quality control purposes.

Credit Score Information Disclosure

In connection with your application for a home loan, the lender must disclose to you the score that a credit bureau distributed to the lender used in connection with your home loan, and the key factors affecting your credit scores.

Equal Credit Opportunity Act Notice

The Equal Credit Opportunity Act (ECOA) ensures that all consumers are given an equal chance to obtain credit. This notice informs you of that right and what to do if you feel you've been discriminated against.

Disclosure Notices

There are several elements to this disclosure. It is an affidavit of your intention of occupying the property or not, a description of your rights under the Fair Credit Reporting Act, a reiteration of your rights and redress under the ECOA, a description of your right to privacy, an authorization to your current affiliates to release information to your lender for the purpose of compiling a mortgage loan credit package, an affirmation that your lender has not coerced you to use a specific insurance company and an affirmation that you received a copy of the Consumer Handbook on Adjustable Rate Mortgages, if applicable.

Fair Lending Notice

The Fair Lending Notice outlines what constitutes different forms of illegal bias, prejudice and discrimination and provides contact information to federal agencies for further questions about your rights or whom to contact if you wish to file a complaint.

Patriot Act Disclosure

Federal law requires all financial institutions to obtain, verify, and record information that identifies every customer. This document simply informs you that we'll be collecting the required information to be in compliance with this act.

Patriot Act Information Form

This form gives you the option of which form of identification you'd like to use to satisfy the Patriot Act requirements. Please choose the identification form that is most convenient for you and fill out the requested information.

Net Tangible Benefit...IMPORTANT!

Loan officers in Minnesota are prohibited from brokering or making a loan that does not provide a borrower with a "net tangible benefit." This disclosure outlines that this requirement exists and how the benefit is identified.

Ability to Repay the Loan

Minnesota requires that consideration be given to a borrower's capacity to repay the loan that they are applying for. This disclosure verifies this fact, affirms your income as represented by you or on your behalf to your lender and outlines the method by which they evaluate your capacity to repay the loan. It also serves as a warning that, if you think you might not be able to afford this loan, that you should not proceed with the loan process.

Escrow Accounts

Of late, many less scrupulous companies have disclosed terms of loan offers without representing the complete monthly payment that includes taxes and insurance. This disclosure outlines how an escrow account works and shows our estimate, at this time, of what will be included on a monthly basis in your escrow account.

Whew! Now that's a lot of language! Always work closely with your loan officer, ask questions, read your mortgage documents and make sure you know what you are signing.

What? Mortgage Rates Go Up When They Are Going Down?

Sherri Sherpy (Mortgage & Investment Consultants) — Tue, 20 Jan 2009 09:43:19 -0600

Mortgage Rate confusion!!

Here's the question...how low will rates eventually go? This is an interesting question to say the least, in the current times. We are currently experiencing a refinance boom in this country. That's the good news. The bad news: It is expected that at least 50% of all those interest rate locks will fall through. In other words, thousands of homeowners have locked in their rates in hopes to refinance to a better position with their mortgage. 50% of these will not close...due to denials, low home values and a whole slew of other reasons. How does this affect us? Let me explain:

When a consumer decides to lock in their rate, the lender is committing those funds on the secondary market. When these locks expire or don't get fulfilled, the investor charges the lender a fee. With 50% of the rate locks expected to fall through, this equates to big losses for lenders. What can happen? There is speculation that lenders may start charging a FEE to lock in an interest rate to protect themselves from the losses. To the consumer, this may mean an upfront fee to lock or a fee that is incorporated into the rate. So, even though rates may go very low, if lenders decide to charge this fee, the consumer gets to decide to pay the fee or take a higher rate to "bury" the fee.

Unbelievable! It will be interesting in the coming weeks and months to see how lenders respond to the losses of thousands of unfulfilled rate locks. No matter what, the consumer gets to pay. :(

The MN Mortgage Mom Receives Accolades!

Sherri Sherpy (Mortgage & Investment Consultants) — Sat, 03 Jan 2009 18:05:44 -0600

Far too seldom do we recieve warm praises in this somewhat "thankless industry". I have held several careers in my lifetime and this is bar-none, the most challenging of all. Long hours, endless need for research and guideline changes almost every day. I am the Financial Planner, the Accountant, the Researcher, the Preacher, the Teacher and the Psychologist all wrapped into one role of Mortgage Loan Consultant.

Nevertheless, it is bar-none the most rewarding career ever. I am helping and changing people's lives on a daily basis. I want to thank those who have taken a moment to give me their praises. It makes those not-so-good days all worth it! And yes, I am, for the first time ever going to toot my own horn on my blog!

I have had the good fortune to receive a string of kind words from clients:

My plans for refinance had changed at one point and in a moment's notice, I was back on the scene again. Let me start by saying that Sherri Sherpy was with me through the entire journey. I have been going through a divorce and this was one of those "evils" that I had to deal with. I received several good faith estimates and Sherri explained line by line the costs associated. Everything from setting up a new escrow account to why the numbers were the way they were. I DID NOT receive the same courtesies from others. Most of them showed the numbers to be very low. I would have been COMPLETELY surprised at closing and quite unhappy to say the least. Sherri also kept me abreast of the rates daily (sometimes more often than just daily) and I locked when it was great for me to do so. I just closed yesterday. She was fast, efficient and truly a consumer advocate. What a great teacher.

Annette (12/31/2008)

I had been working with another lender. I had many questions. Sherri not only answered every single one of my questions with the most detail, but she answered them at all hours of the day and night. I am very impressed with her responsiveness and knowledge on financing. I look forward to working with Sherri as we find and purchase our new home.

Andrew Stettner (12/28/2008)

What a breath of fresh air! I have recently spoken to two other loan officers (one from a big bank) and wondered, where do these people come from??? I like to work with local people considering I am spending this much money. Sherri's name was given to me and I gave her a call this morning. She answered EVERYTHING for me. She was very patient and took 45 minutes of her time to help me get through all of my concerns. The other two I had spoken to either beat around the bush or were a bit rude in answering some of my questions. Plus she has a great sense of humor! I am meeting her tonight at Starbucks and let me say, I definitely look forward to it!

Taylor (12/11/2008)

From The MN Mortgage Mom, "Thank you SO much!"

Veterans' Refinances Get A Reprieve From A Declining Housing Market

Sherri Sherpy (Mortgage & Investment Consultants) — Sat, 03 Jan 2009 09:56:51 -0600

When many of us cannot refinance to take advantage of the historical, low rates due to declining values,

Veterans are afforded some relief. As they should be!

If you currently have a VA loan, you are in luck.

Consider this:

NO APPRAISAL NEEDED. It does not matter what the current value of your home is. We will not require an appraisal.
NO INCOME DOCUMENTATION. That is right. You can refinance your current VA loan into another and NOT supply any income or asset documentation

This is particularly unique when we consider our laws in MN. One and a half years ago, laws were passed prohibiting any mortgage transactions with no income verification. In other words, there are no longer any MN mortgages transacted without full documentation of income and assets. Not true for MN VA refinance loans!

There are only a few guidelines to qualify:

Must have a minimum 580 credit score
Must have a current VA loan with no lates in last 12 months
We must be able to pull a clear CAIVR (meaning you have no delinquent federal debt)

That is it! If you haven't taken action and taken advantage of the very low rates, it may be a great time to do so now. What a great way to bring in the New Year by saving some cash!

Ph: 612-363-1106

Email: ssherpy@minnmortgage.com

Web: www.sherrisherpy.com

CASH FOR KEYS...With a Twist!

Sherri Sherpy (Mortgage & Investment Consultants) — Wed, 13 Aug 2008 21:23:33 -0500

I have heard and read a lot about the Cash for Keys programs that banks offer renters or current occupants after the home has been foreclosed on. Cash for Keys is basically a monetary incentive that the bank will offer to the resident to move out by a certain date, thereby gaining possession of the property quicker and cutting losses.

To read a great article loaded with details on this, go to John Occhi's post, "I Don't Get It! The Bank Forecloses on Their home and Then Pays Them To Move...Or Why Cash for Keys.

So what is Cash for Keys...with a twist? Well, today I had lunch with a friend and was literally blown away. Now some of you may read this and think, "Gosh, that's not so surprising." But I was speechless and for those of you who know me, that is an anomaly in and of itself.

I knew my friend was not doing well. He was plagued with over $100,000 in medical bills and the finances were going downhill fast. He did not want to face foreclosure, so he called his mortgage companies (he had a 1st and 2nd mortgage) to see if something could be worked out.

He called the 2nd mortgage company and asked if they would be willing to remove the lien from his house. They were willing to do so for $5,000. He did not have that kind of cash, so he then called the 1st mortgage company and asked if they would help. Long story short, the 1st mortgage company paid the 2nd mortgage company the $5,000 to release the lien. Then the 1st mortgage company turned around and paid my friend a good amount of money to "turn in his keys".

No foreclosure process EVER took place.

What blew me away the most? On his credit report, the mortgage companies reported:

Mind boggling, but I am very happy for my friend!

Just Walk Away

Sherri Sherpy (Mortgage & Investment Consultants) — Thu, 07 Feb 2008 21:35:10 -0600

Unbelievable..............

Is walking away from your mortgage becoming the next biggest trend?

We all know that the sub-prime crisis has had an incredible impact on homeowner's losing their homes due to increasing rates. People just flat out cannot afford the higher payments and are "forced" into foreclosure.

We also know that home values have been plummeting and people cannot even refinance because they owe more than what there homes are worth. Again, being "forced" into foreclosure.

How about the rest of us? HEY, JUST WALK AWAY!

Is this the next socially acceptable, easy to do trend to hit our industry?

Consider this:

Skipping out on a home has been made easier, thanks to the Mortgage Debt Relief Act of 2007. Now the IRS cannot go after you for the dollar difference of your mortgage balance and what the bank sold the home for.
Experian (a consumer credit rating agency) recently reported that many homeowners are choosing to pay off credit cards and other consumer debts before making their mortgage payments. Huh?
People with the capacity to pay their mortgages are now choosing to just walk away because they feel they've lost the equity value in their homes
Heck, this "trend" has even spawned a new company called YouWalkAway.com. For $1,000 the company will help you to ditch your mortgage!

I don't know...I'm worried about the continued declination of home values from an ever increasing rate of foreclosures. I'm worried about people and their growing attitudes of "just walking away"...it's the easy and acceptable thing to do. I'm worried about the long-term affects on our economy, banks, lenders and the entire real estate market.

I can't yet see the light at the end of the tunnel on this new phenomenon and that just plain makes me WORRIED.

Sherri Sherpy

MN Mortgage Mom

FIRST TIME HOMEBUYERS...What You Need To Know

Sherri Sherpy (Mortgage & Investment Consultants) — Sun, 10 Aug 2008 00:37:49 -0500

First Time Homebuyers are my niche...they are the lifeblood to my Twin Cities mortgage business. I love working with them because I can be a coach, a nurturer and a great knowledge base to learn from.

I've been told that I am a great teacher. And mortgages are what I know best!

First Time Homebuyers have many questions. Home financing can be a sea of confusion. "Where do we start?" "What do we do first?" "What is the process?"

When a First Time Homebuyer is beginning the homebuying process, these are the questions I get asked most often.

Here is a list of the most important things to do NOW to be prepared for pre-approval and getting that mortgage for your first home:

Is your credit good? If you have concerns, call me and let's take a peek. An action plan may be in order and I can help with correction, building new credit or re-establishing credit due to a "not-so-good" credit history.
If you have had any job gaps, be prepared to write a letter of explanation as to the reason for the gap.
If you have experienced credit issues in the last 12 months, be prepared to write a letter of explanation.
Get these documents in order: 2 years most recent W-2's; 30 days most recent paystubs; 2 months most recent bank statements (including retirement account statements); 2-3 years tax returns if you are self-employed.
Down Payment: Where is your down payment coming from? Your own funds? If so, your bank statements (as noted above) will be sufficient documentation. Gift money from parents? If this is the case, tell Mom and Dad to hold tight. Do not exchange any monies until we have talked. There is a clear process of documenting gift funds. I can help you do this the right way!
Pre-approval: Do not start shopping for a home until you have been pre-approved for financing. A seller will not give you the time of day if you put an offer on a home without being pre-approved. A pre-approval is as if you are saying, "Mr. and Mrs. Seller, I am ready, willing and have the ability to finance the purchase of your home."
Find a great real estate agent to represent you. As a buyer, you do not pay a dime for their service. Use a Realtor. You need and deserve representation. Don't know any agents? ASK ME! I have been in the business many years and can refer the best of the best.

Not so bad, huh? The mortgage process really can be stress-free and quite simple. With a little organization and the help of a professional, you can be moving into that dream home faster than you think!

Your MN Mortgage Mom

Stealin' the Show in Cottage Grove!

Sherri Sherpy (Mortgage & Investment Consultants) — Thu, 07 Aug 2008 13:26:27 -0500

For nearly 15 years, I have enjoyed this wonderful community. It's great neighborhoods, sense of safeness, friendly people and an overall feeling of peace living here.

And who can forget about the new Culvers moving in! Yummmmm!!

Last evening, I took our puppy, Mic, for a walk (okay, puppy in mind and soul...maybe not so much puppy in size). We stopped along the way to visit with people outside and just enjoyed the beautiful summer evening.

Now, everyone who lives here can tell you how nice our parks are and Mic (puppy) is no exception. He has one particular favorite that we frequent all the time. Well, last night, as in all of our walks, Mic walked patiently...waiting to get to his favorite destination. He knows that when we get there, I will take his leash off and he can run free!

Well, last night was different. There were lots and lots of people at the park. There was a soccer game of small kids. Mic quickly got over the fact that he couldn't run free...better yet! There were kids all over the place! Lots of playmates!

All eyes were on the kids playing soccer...Every parent was cheering their children on...And I thought, "Oh dear, should I turn around and go in a different direction?" I decided to move forward...no one would even notice...I could handle the situation. As we moved through, Mic did not bark, but he so badly wanted to greet his friends. I kept a hold of the leash and as we walked by, I realized all eyes started moving in our direction. The kids stopped playing and the coaches were staring.

"LOOK AT THAT DOG! WHAT KIND IS IT? HE LOOKS LIKE A HORSE! wOW, THAT IS A BEAUTIFUL DOG!"

My fears suddenly turned into large smiles. Mic pranced as if he were a galliant stallion. We both handled the situation like pros. Ane he was very proud. I smiled one last time as we moved on by and thought, "Huh! We just stole the show in Cottage Grove!"