H.R. 5140 PASSED - Relief on the Way!

With an 81 to 16 vote, the Senate passed an amended version of H.R. 5140, a $150 billion plan to jumpstart the economy with temporary tax breaks for consumers and businesses, extend benefits, and most importantly, two provisions designed to assist the housing market.

The bill temporarily increases the size of loans that may be purchased by Fannie Mae and Freddie Mac, raising the current level of $417,000 to reportedly up to $730,000 in the highest cost regions of the housing markets.

Rest assured, we at Loan Source Financial are following this development closely and are hard at work preparing the tools and resources you’ll need to make the most of this important legislation once it actually becomes law.

How does this affect YOU? As a consumer:

1. Refinancing existing larger loan amounts or combining 2 loans. Anyone with an existing first mortgage that exceeds the $417,000 limit today and/or second mortgage could conceivably refinance into a single loan with a conforming loan limit rate that historically is .5% to 1% better than the existing “jumbo” rates.

2. Purchasing a home with better interest rate. Under the new provision, anyone planning to purchase a home this year would be able to qualify for the conforming loan limit rates and enjoy the option of having a rate that would be better than the current jumbo rates.

3. Less documentation needed to qualify: Loans that fall within the conforming loan limits are subject to easier underwriting through streamlined processing. What this means is that if the borrower has good credit scores and solid work history the secondary market (i.e. companies such as Fannie Mae and Freddie Mac) may require less documentation to qualify for a mortgage loan. For example, if a borrower meets the initial requirements for qualifications (Credit score, work history and available assets) the secondary market my not require tax returns or W2’s to underwrite the loan.

We’ll keep you apprised of any developments and opportunities as they become available. Please call if you have any questions or would like to review your situation in anticipation of this potential opportunity.

Rising Foreclosures Open the Hottest Real Estate Opportunity Ever!

2008 projections call for roughly 2 MILLION people to complete the foreclosure process next year. That is 2 Million people who NEED TO LIVE SOMEWHERE. And not everyone will move in with mom and dad. They will move to apartments and in so doing create one of the greatest bull runs in apartment lending ever!

Most apartment complexes across the country run 86-95% occupied. And even at that, they are profitable. But rents have not been raised much at all because of lack of demand. Increasingly easier lending standards over the last 10 years led to constant turnover as people moved out of apartments into their own homes. But those standards have changed. So there will be LESS people moving out of apartments because they can't qualify for a home and 2 Million new people coming in. This will drive most apartments to 100% occupancy. When that happens, there are 3 valuable benefits to the apartment complex owner:

1. Profits go up (the mortgage payment, taxes, etc. don't change when you go from 90% occupied to 100% occupied) - that extra income goes right to the bottom line.
   

2. Values go up since profitability effects the value of commercial properties
   
3. Most importantly, rents can begin to be raised leaving ever increasing profits.

SO HOW CAN YOU TAP THIS CRAZE?

You can BUY - Did you know that you can buy an apartment complex with almost no income verification? With some creative financing and a willing seller; you can do it with no money down as well!

You can Help Others Buy - Create an investment club or pool with the guidance of Loan Source Financial.