Mortgage Grapevine


Question for the experts? What is best program FHA or My Community? What do you think are the pros and cons?

by sassyloans May 5, 2007 12:00 AM

I choose apples.

by Rollo Tomasi May 5, 2007 12:00 AM

I guess I must explain myself a little bit better... I currently have a client that has been approved for a my community loan and a wonderful FHA specialist is taking away my client saying Fha is better .. of course the payment with him is smaller but the loan amount is different, I am doing 100% at 170,000 he is giving her a loan for $100,000 putting the other $70,000 on a silent second, so my question is how can I keep this client, what are my selling points?? I have never done an FHA loan and I dont know what the disadvantages are.. so please help??
by sassyloans May 5, 2007 12:00 AM

silent second?
by dead eye May 5, 2007 12:00 AM

Ditto the ????
by Mac May 5, 2007 12:00 AM

Is the "silent second" a gift of equity, perhaps?
by kathy88 May 5, 2007 12:00 AM

I would take a 100% MCM over a 97% FHA all things considered. If the supposed second is not recorded, it´s fraud. If the borrower will be making a 2nd mtg. payment on 70k in addition to the 1st, there is no chance that the overall monthly pymt is less.

by HellsBanjos May 5, 2007 12:00 AM

Even when the LTV is less than 80%, an FHA loan still requires mortgage insurance. I also do not understand the structure of the silent second, but it sounds like the loan would be less than 80%. FHA may not be the best option.
by swamp_farmer May 5, 2007 12:00 AM

Silent second on a FHA purchase? That is no expert FHA
artist. That is a ........

Learn FHA.

Present your borrowers with 3 programs for which they qualify pointing out the advantages and disadvanteges of

That will put away charlitans like this "FHA expert".
by lil_oh_me May 5, 2007 12:00 AM

Have the customer explain exactly what the $70K second is all about. After just one read it doesn´t make any sense for the customer to do the FHA loan. They still have to pay back the other $70K right? My guess is that your customer is going to commit fraud and they dont even have to do that.
by jlorenz May 5, 2007 12:00 AM

Well from what the client explained to me the 70,000 would be recorded but she would not have to make any payments on it, she would only need to pay it when she either sold the house or refinanced it.. so her monthly payment would only be 900 (payment for the 100,000, mortgage insurance at 1.5% factor and the hazard insurance) I have her at 1378 payment for the full loan amount including taxes, mi and insurance.. and well since I haven´t the faintest clue as to how FHA loans works this all is just not making sense to me.. So if someone could shed some light on me and let me know the disadvantages of FHA loans I would really appreciate it .. Thanks again
by sassyloans May 5, 2007 12:00 AM

Who is the mortgage holder for the second? Is it the seller? Is there an existing relationship between the two? Is the seller truely willing to receive the 70K at some unspecified time in the future without monthly payments? I think they will have trouble makeing this one pass the smell test.

I am an FHA expert but I suspect that your counterpart is not. FHA is an excellent loan but does not seem to be the best option with the scenario that you presented. The home owner will be required to pay 1.5% up front MIP and monthly MIP at .5%

There is no magic feature of FHA that includes this silent second. This is the part of the puzzle that you need to focus on. What is stopping you from also doing the second, assuming that it truely exsists?
by swamp_farmer May 6, 2007 12:00 AM

This sounds like a community buyer assistance program for the second. Many of those programs don´t require repayment unless you refi or sell within a specified amount of time. If that is the case, it has nothing to do with FHA. You can offer the same 70k second. Find out if the city the the subject property is located in offers buyer assistance programs.

my .o2

by desert dweller May 6, 2007 12:00 AM


Community buyer assistance for 42% of sales price for $70K...
Where do I sign up???????
by dead eye May 6, 2007 12:00 AM

Kathy88 makes a good point when she asked if it was a gift of equity. Is she buying from a friend or family member?
by jlorenz May 6, 2007 12:00 AM

It is no Gift of equity on the FHA - It is sellers paying the 3% for the down payment-so it turns out for a 100% financing for the borrower,

by angry crickets May 7, 2007 12:00 AM

Well I have gotten more info finally!! Yes its a down payment assistance program and yes to my disbelief they will help with the 40%... so she makes payments on her 1st for 100,000 ($909) and the 70,000 are recorded and if she sells or refies needs to pay back... Geeezz where do I sign up???
by sassyloans May 7, 2007 12:00 AM

3% of $170K= $5100.00

this buyer is getting $70,000 in assistance or 41%
by jlorenz May 7, 2007 12:00 AM

you should be able to offer the same loan possibly with Mycommunity, but there would be no MI on your loan
by jlorenz May 7, 2007 12:00 AM

For the sake of sanity, even if you do not get this deal, please find out who the assistance source is and let the rest of us know. Something is not passing the smell test.
by swamp_farmer May 7, 2007 12:00 AM

sf: Thats exactly what I have been trying to figure out all day long today and I have narrowed it down ... its a City program however I read the guidelines and they say the maximum down payment assistance is 40,000 not the 70,000 I was told.. Im still crossing my fingers and hoping the deal is too good to be true and that I might not lose it .lol. just for pride lol.. The house is in a rural area ... maybe that helps??
by sassyloans May 7, 2007 12:00 AM


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