Mortgage Bait & Switch Or Not?

RE: Internet mortgage company using mortgage bait and switch, or not.

As a real estate agent I DO NOT LIKE when a borrower is using an internet mortgage company to process their loan. These big companies have no long term relationship with me and therefore have no reason to make my buyers their highest priority.  My vendors, mortgage etc. treat my clients like they are their most important borrowers.

With that as a background I refer to the article heading Mortgage Bait & Switch Or Not? I am referring to a radio advertisement that has been running for quite a few days promoting that they have a program with the concept of locking your loan now and being able to pick a lower rate at some future date, providing that interest rates go down in the future. (All mortgage brokers have this option)

The pitch sounds great. The details not so great to most borrowers. The reason for the pitch is to get you to contact the advertiser.

My first days as a loan officer were for a large bank. They advertised a rate or program heavily. We were required to take the phone calls. It was not uncommon for the rate to have climbed by the time they published the quoted in the newspaper rate. However once I had them on the phone, gathered 15 minutes worth of information the consumer was so tired of the process that they stayed with us even if the rate or program had changed. In my history it took only a couple of experiences where I refused to take these calls.

I believe that is what the objective is for this new advertising program, which is to get you to contact them.

The pitfalls of locking now with a promise of a lower rate in the future is that you pay for this attractive program. You either pay with a higher rate or with fees. My experience in originating hundreds of loans is that the costs were not worth it. Another catch is the terms for the relock may be undesirable. You may have a specific period of time that you can exercise the re-lock or it may be available if you are about to close. I don’t remember one person finding this program one they wanted once they knew the facts.

The internet mortgage company running these ads do not care if you end up with the rate lock program. The reason is obvious to me, it is like a mortgage bait and switch, anything to get you to call.


Posted on September 12, 2018 at 9:54 pm
Larry Cragun | Posted in Mortgages, Purchasing A Home or Condo | Tagged

A Summary Of Positives Of Various Downtown Salt Lake City Condos

Garden Towers is seen in the drone shot at the vey bottom. It is about 38 units. The owners manage it themselves. Notice on the roof is the garden. On each corner is a Bar B Q. It has a gazebo and several places to just hang out. The roof can be reserved. Their is a variety of units and floor plans and some are terrific.

Canyon Road Towers is to the right in the photo. It is larger, 185 units, and very popular. It has an indoor swim pool and exercise room. It has two social rooms. It has tennis courts. It is well managed. Some of the units are in original condition and some are remodeled. Some of the views are spectacular.

Zion Summit is directly north of temple square, two towers behind the LDS conference center. The swim pool is outdoors. It has a large entry which invites socializing. Zion Summit seems to encourage socializing, even has a social committee.

All three of the buildings are popular for the easy access to temple square and City Creek Mall.

American Towers, South of City Creek, is very popular with those that are wanting a downtown city feel. Theaters are next to it as well as great places for eating out. Its rooftops are a great place to entertain and hot tub with a view. It is large enough to afford full time security. It has racquetball courts.

Terrace Falls is on 3rd Ave directly behind Garden Towers. The facility has a shop to die for. Some of the floor plans are great for people wanting two master bedrooms. Terrace Falls is a terrific property.

Trevi Towers abuts Zion Summit. Most of the floor plans are large and the units facing South have wonderful views. It has an indoor pool.

This website has great search engine. I invite you to search in the search bar or to take advantage of the quick and useful links searches which I have established. Some are by building and some by location. I enjoyed it when one of my colleagues called me “the condo king”. I have sold condos from North Ogden to Daybreak. Selling condos is not like selling houses. I you to encourage you to choose me in helping you buy or sell a condo.

This link goes to the category that pulls up all of the articles I have written about condos: click here.


Posted on September 11, 2018 at 10:02 pm
Larry Cragun | Posted in American Towers, Canyon Road Towers, Garden Towers, Terrace Falls, Trevi Towers |

Should Your HOA Be FHA Approved?

Should Your HOA Be FHA Approved? I recently dealt with an HOA where the HOA board debated on whether or not to renew their FHA approval. FHA will not make a loan on a building that isn’t approved. VA usually follow FHA. The approval process is in depth. FHA reviews the financial condition, the number of rentals, is in in a floor plain, is it properly insured, etc.

The approval must be updated and is good for two years. The board can start the renewal process six months prior to expiration and can go back within six months of expiration.

My efforts to persuade the board was based on the benefits to buyers:

There are two reasons that buyers use FHA: 1- to do a reverse mortgage 2- to have more lenient
mortgage underwriting. The prices in CRT and the size of the monthly dues virtually eliminates any FHA
buyers from using a typical 30 year mortgage to purchase here.
Benefit of FHA reverse mortgages to the HOA: STABILITY. People have to buy with about 50% down.
Using conventional financing it can be as low as 5%. With a reverse mortgage the lender will foreclose
on them if the HOA notifies the owner is delinquent on their HOA dues. The 50% down rule virtually
assures that you have an owner with a great deal at stake. The underwriting process gives reasonable
security that the buyer/borrower can pay their taxes and HOA dues with verifiable income.
FHA condo project requirements: The Building must be primarily residential, contain at least two
dwelling units – No more than 25% of the property’s total floor space in a project or unit can be used for
non-residential or commercial usage – No more than 10% can be owned by one investor or entity – no
more than 15% can be more than 60 days past due on their HOA dues – at least 75% of the units must
be owner occupied.

RE benefits for the building: 1- Demand – The more in demand a property is the more the value. Eliminating a source of financing
reduces the potential value. Mike Kline asked me to prove that FHA was a positive not a negative to CRT.
To me the way to measure that is value. The more in demand a property is the more the value.
Eliminating a source of financing reduces the potential value.
2- Restricting rentals: FHA does not encourage rental owners. The borrowers on reverse mortgages
must commit to owner occupancy. The HOA must account for the rental percent numbers which is one
of the main reasons for the two-year renewal process. Some of the buildings denied FHA have received
a denial because of too many rentals. Zion Summit and American Towers as an example.
3- Endorsement: Many knowledgeable buyers and/or their agents understand the FHA approval means
that important issues have been reviewed buy HUD. These would include too many rentals, a law suit on
the HOA, poor reserves, issues that might arise from the HOA meetings minutes, and any item they
consider a red flag.

The vote went 3 to 2 to renew. A homeowner and the HOA attorney made a different point that swayed the yes voters. That is, when times are tough having the ability for you to sell your home FHA may be critical.

 


Posted on September 9, 2018 at 11:01 pm
Larry Cragun | Posted in Condominiums | Tagged ,

All HOA Fees Don’t Cover The Same

HOA Comparisons

Clicking the link above opens up a spreadsheet that I created for one of the downtown Condominium Home Owners Associations. (HOA) They were interested in comparing the fees and what they cover of other associations. Not all condominium projects are listed in this spreadsheet, but many of those downtown are included.

If you are moving from a house to a condominium you will probably discover that the costs add up to be quite similar to what you are now paying.

Benefits that  you can’t really monetize is the convenience of not having to maintain a home; yard work, snow removal, building maintenance, etc. You do give up total control which led to an article, “Welcome To The Condominium Project”.

 


Posted on July 2, 2018 at 4:44 pm
Larry Cragun | Posted in American Towers, Canyon Road Towers, Condominiums, Garden Towers, Terrace Falls, Trevi Towers |

The Wrong Loan Officer Can Get You Into Trouble

Why do I title this article, The Wrong Loan Officer Can Get You Into Trouble? The shady ones don’t always look like this.

I write this because of a phone call I received from a very worried woman who knew that I used to own a large mortgage company.

She had committed loan fraud and that fact was just thrown at her by the company she did the mortgage with. She was terrified over the phone call she had just received.

She was guided into it by her loan officer. At the time it didn’t seem like a big deal to her, as it was explained to her she was just fine, so she thought.

The fraud was this: she and her husband refinanced their primary residence with this mortgage company. The interest rates were great at the time, it was a smart idea, they had purchased the home years ago with a VA loan and the refi paid that loan off.

A month later they went out and  purchased another home using their current VA eligibility.

The events, refi and purchase, started the fraud. Investment properties have different underwriting rules and benefits. One big difference is that there is a higher interest rate on an investment property.

They turned the home they did the refi on into a rental. Now we have the fraud.

I asked her if she had all of the paperwork signed at closing. The answer was yes. I asked if they had signed an addendum warranting that they would remain in the home as their primary residence for at least a year. The answer turned out to be yes.

But…… she said when discussing the possibilities with their loan officer they were guided that they weren’t certain at the time they would be buying another home and renting this one out. They were told that since it wasn’t certain that it would be ok.

Now I refer back to the title of this post, “The Wrong Loan Officer Can Get You Into Trouble.” As far as the Feds go the intent is obvious. They purchased a new home 0 down VA 30 days later. It’s a pretty obvious crime. (Even if they did this months later, it is still loan fraud)

The lender came to her in a panic. The loan officer no longer works for this mortgage company. They must believe that they have some liability. Loans are usually sold to an investor. The investor in reviewing this loan found the fraud and rejected it. The mortgage company is now offering to refinance the fraudulent loan to a non owner loan at their cost. They will lose over $10,000 to make this old loan go away.

I have suggested to them to be cooperative with the mortgage company, it seems like it will suffer the costs to get rid of this fraudulent loan. I also referred them to an attorney that is a mortgage industry expert to guide them through these next days, and hopefully not with future problems.

My advice to you is to always use a loan officer that is personally recommended and introduced to you by a full time real estate agent. There are a few flakes out there and this person found one. There are some great loan officers in the business and they usually work with real estate agents. Real estate agents are demanding. They want loan officers that deliver what was promised, as promised.

Take note on my statement above, “deliver what was promised, as promised.” This is outside of fraud. It refers to delivering your loan on time to stay under contract with a seller. This refers to deliver the terms you were promised. One real estate branch broker sourly told me that, “too many transactions the buyers are told all along, the loan is ok and then at the end, “sorry not ok’.

I always refer my clients to Aaron Morgan, a producing branch manager of Academy Mortgage. (801-560-8162)To follow my proposed procedure, make sure I let him know that you are contacting him.

I use the cute little fraud guy to depict the Wrong Loan Officer by license with PresenterMedia.com

 


Posted on June 4, 2018 at 5:50 pm
Larry Cragun | Posted in Mortgages, Purchasing A Home or Condo, Vendors I Recommend |

The Avenue’s Is A Great Community

From monthly meetings that are engaging to annual events such as the Memory Grove cleanup which took place last Saturday, to the Greater Avenues Street Fair we find another example of the advantages of living in downtown Salt Lake City. First of all, The Avenues Is A Great Community.

Saturday was the Memorial Grove cleanup event. Many of the neighbors turned out with gloves and a strong (some not so strong) back to chip in. It was fun to get to know more of our neighbors and work along side friends we already knew.

Here are a few photos Kathleen took of the event:

Yep, that’s Kathleen and I doing back breaking chores. It was fun for sure and the park is looking great. Below you see one way the park is often used, for a wedding or wedding photos. I am not sure just how happy this bride was about the crowd.

Memory Grove Park is a must visit. It has unlimited access to hiking, you can go for miles. Up the side hill is the State Capitol. Access it by turning off 2nd Ave onto Canyon Road. Canyon Road Towers is at the corner of 2nd Ave and Canyon Road.


Posted on June 2, 2018 at 4:05 pm
Larry Cragun | Posted in Uncategorized |

Salt Lake City Condominiums Near American Towers

Salt Lake City Condominiums Near American Towers. This is an important topic as Windermere will be opening an office next to Mid City Salon. We will be licensing Teresa Bowman and she and I will be focusing on downtown Salt Lake City condominiums. I told Teresa t0day that I have had ab0ut 50 downtown condo transactions in the last two or three years. Teresa owns Mid City Salon and will be making sure that your needs are forwarded to me.  You will get the great service you deserve and that I and Windermere are known for. The office should be ready to go about June 5th.

From their website

American Towers 44 West Broadway Website

The search links in this article pull all active listings in the particular building and in many cases units close by that meet your search request.

American Towers listings. click here

Best location in the city. Half block to Trax, near Gallivan Center. Be where the action is!

Broadway Park Lofts: click here 

Convenient downtown location and only a walk away from the farmers markets, restaurants, and plenty of shopping. 

The Metro condominiums:   click here

Downtown SLC retreat. Walt to the finest eateries, entertainment, & shopping. Steps to Trax light rail and City Library.

The Sterling Building: click here

Originally built in 1905 and completely renovated by one of the best architects in the city as an architectural statement deserved to be in any major metropolitan area delivering that special feeling that you belong.

Uffens Marketplace: click here

Those near downtown condominiums for sale north of South Temple can be searched on this link: click here

99 West South Temple – City Creek – click here

3 properties located in and around City Creek Shopping Center

Let me know if  there is a project nearby or anywhere that you would like to have more complete information provided for your review.


Posted on May 25, 2018 at 8:00 pm
Larry Cragun | Posted in American Towers |

You Can Make The Mortgage Process Go Well

You Can Make The Mortgage Process Go Well. Consider these facts. Today more than ever before you need to be responsible to make your mortgage process go well. Federal Laws changed last week. They affect lenders and Title Companies, as well as you and your agent. Delays in closing are a huge hazard now. The new law is designed to help consumers understand better what they are receiving. There should be no last minute gotchas on rate or fees. That’s the good part. The rougher part is that everyone, including you, need to be diligent with their roles in bringing  your purchase to an on time and satisfactory conclusion

What may excite a borrower is that the automated underwriting can give a quick approval. Yeah baby, you are done, you are approved.

Not so fast.

This is just step one. You have a long way to go to get to the end. It has always been a trek to the end, but with the advent of the meltdown everyone involved in your loan became fearful of making a mistake or being too lenient. This resulted in a lot of last minute issues.

Now I bring up the pressure event – the U Haul is rented and the loan must close on time. Nothing is more problematic than a delayed closing. It can actually be worse than the U Haul issue, closing late can kill the transaction. Sometimes a seller gets remorse, maybe has a better offer as a backup.

You are responsible to provide everything asked for, be it pay stubs, bank statements front and back, everything. So many of my borrowers have been slow, sloppy, even resistant to requests. And hey, your loan officer and processor might have more than your loan to get funded. Push Push push your way around. “What is the status, do you have everything, may I see the list of conditions by the underwriting” are all things you can do.

No matter what your nature, detailed or not, get involved in every detail of your loan. Make sure you see a copy of your credit report. See if anything is fishy. Fix everything fast that needs fixing or explaining. Ask your loan officer if they have a back up plan if trouble arises. I did. Doing loans was pressure packed for me. I laid awake at nights or woke up early in the morning scouring the loans in process in my mind. What if this happens, what will I do? I loved it, but it was grueling. At times I had 11 to 15 loans of my own in process. If you only knew what a gigantic list of details that created.

Don’t lie. The only loan that I had that blew up at the end was not my fault, yet I was the target of blame. The borrower was from Hawaii. Hawaii like Utah, isn’t a community property state. Spouses can buy real property separately. In Washington, where I was working, the opposite is the rule. This borrower – buyer, lied on his application. He said he was single. We came right down to closing and the underwriter conditioned a document to be signed  by his wife. He was furious and wouldn’t comply. “How did you find out I was married?”. Dumb question! He made such a fuss that since I was working for a mortgage company owned in part by the real estate company he pressured the real estate company to fund the loan out of their own capital.

I will never forget the brokers statement. He too was out of step. He said he hated it – that loan officers say all the way through the process; he is approved, he is approved, he is approved and then at closing – sorry he’s not approved. He lied folks, and got caught.

I had another borrower that two days before closing came to me to back out by blaming it on me. He had $5,000 earnest money in escrow. I listened to his accusations which were many. I finally had had enough and said, “listen buddy this is all crap. I don’t know what is the real excuse but you better come clean with me right now. I have done loans for several members of your family, if you don’t come clean that’s it for the whole bunch of you.” He then humbly apologized and confessed that he had his accountant provide us with phony tax returns. I felt compassion for him, for he had already confessed this to his young wife. He said it broke her heart, both in losing this great home and in his actions. I assured him it was better to quit now and lose his earnest money than proceed with committing a crime. His conscience was his buddy even though the consequences were painful.

I once received a call from an underwriter. It was over one of our loan officers who had submitted his own loan. She tactfully said she was sending the loan back and that I should confront him over the income he claimed. I did. He blew up and threatened my with bodily harm that I should suggest that he faked his income. He said that he had filed amended returns and how dare I insult him. He was fired that moment and I informed him the underwriter had pulled a summary of all of his tax returns and I had copies. They did not match his application and he could leave now quietly or my next call was to the Feds.

He left.

So please do all you can do to make sure things go will with that you haul you have ordered. It’s on your shoulders too. Do it all, do it immediately, and do it right.


Posted on May 24, 2018 at 4:56 pm
Larry Cragun | Posted in American Towers, Larry K Cragun, Purchasing A Home or Condo |

Ah The Great Life – Living In The City

So I hop over to Harmons City Creek on Friday about lunch time and what do you know – it’s rockin! Great Music at the back street entrance.

2    People hanging out enjoying the fun and the sun, and obviously each other.

And food, all too tempting food on the Barbie.    3

4

And did I partake? No way, Kathleen fixed Italian for lunch.

But I did hang around for the upbeat music.

 

Larry K Cragun – Windermere Real Estate

Condominium and Residential Professional

801-244-1666  –  larry@cragun.net


Posted on May 23, 2018 at 4:50 pm
Larry Cragun | Posted in Larry K Cragun, Shopping, Windermere Real Estate |

What? They Won’t Allow Your Puppy? No Dogs No Cats?

.

Soon after Kathleen and I moved into our condominium at Starpoint I noted the fact that we had to put up with rules and regulations as well as the actions of our neighbors.  I coined the phrase, “welcome to the condominium project”.

There were no pet restrictions. As a result the common areas were the potty place for some of our inconsiderate neighbors. That courtyard smelled badly after awhile and we had to give up worrying why the plants were dying and the ground dug up. What bothered me the most was when a new next door neighbor moved in. I met her in the elevator, I should say I met her and her dog in the elevator. “Is that a pit bull I asked”. ‘Yes, but she is harmless was her answer”. OK, how should I react? I have heard the pit bull tales. The no animal restriction policy got so carried away that I say no wonder some properties don’t allow them.

But they restrict cats too? How come these harmless loving animals are restricted? Note, I am a cat lover. We had two cats that lived to be over twenty. We couldn’t part with them. Waiting for them to die to move, and then the emotional pain of them getting so bad they had to be put away was terrible. But rules are rules, probably just some of the rules that may bug you when “joining the condominium project”.

Since it’s a common question, are pets allowed I am going to publish the Salt Lake City Condo developments that do and don’t allow pets.

I am referencing those which begin at $200,000 in price. Most under that price do not have pet restrictions.

Do allow: (Note: Some allow but with size, number of, or other restrictions. Some allow cats but not dogs). Contact me if you want to sort out what would work  in your situations.

Allow:

  • The Presidential Club
  • Northridge Heights
  • Belmont Downtown Condos
  • Brickyard
  • Broadway Park Lofts
  • Broadway Tower {Under 20#’s}
  • Country Club Ridge
  • Meridien
  • Oak Crest
  • The Metro
  • Avenues Condo
  • The Presidential Villas
  • Parc Gateway
  • Parc 7
  • Liberty Park Place
  • One and Nine
  • Salt Creek Condo
  • Mayflower
  • Millcreek Terrace
  • Millcreek Hollow {Under 20#’s}
  • Patrick Lofts
  • Old Farm
  • Highland Springs
  • Laurelhurst Condo
  • Highland Springs
  • Monte Carlo
  • Northpoint Estates
  • East Point Lane
  • Urbana on 11th Condo
  • Wasatch Towers
  • Westgate Lofts
  • Wolf Hollow

Don’t allow:

  • American Towers
  • Aztec
  • Bonneville Towers
  • Canyon Crest Condo
  • City Crest
  • City Creek Regent
  • City Creek Richards
  • Canyon Road Towers
  • Eagle Springs West
  • Garden Towers
  • Governors Plaza
  • Terrace Falls
  • Forest Glen
  • Trevi Towers
  • Royal Oaks
  • 838 Condos
  • Zions Summit
  • 99 West
  • Wilshire Condos
  • Forest Glen, maybe small with a loophole

This is not complete yet as some of those listed in the MLS do not state yes or no to pets. I will work on updating this information as fast as I can.


Posted on May 22, 2018 at 6:26 pm
Larry Cragun | Posted in Pets |