Palm Beach Real Estate and Loans

It's amazing what happens when you price property properly (consonance unintentional):

IT SELLS........!

That shouldn't come as a shock, but for those of you that still insist on keeping your listing prices too high - you need to get a grip.

Great home, great neighborhood, at a great price.

My Sellers had a contract in less than a month.

Any questions?

Today's post comes from Jason Price of Knightlines Mortgage Services (and he doesn't seem too happy):

"The nation is arguing over health reform and how government should stay out of it. But what about mortgages? Now that the government is involved, there has been a great chasm created between common sense and a thing called DO/DU.

DO/DU is Fannie Mae's automatic underwriting system. When an application is taken, it is run through this pre-determined set of criteria to determine a borrowers eligibility for a new mortgage loan. The problem is that these criteria do not take into consideration other compensating factors.

Why America needs to go back to manually underwritten loans and not a computer generated decision? Here are two examples that have happened in the past week of why America needs to go back to manual underwriting of mortgage loans.

Scenario 1: The borrower has a credit score of 740. Is putting down 10-20% of the purchase price. The debt-to-income (all monthly debts plus PITI) is 20%. Has been on the job for 3 months, but in the same line of work for 20 years. His new job has a higher salary then his previous employer. These are all things that under a common sense, manually underwritten loan would have me saying congratulations.

FNMAs DO/DU denied the loan. Why? Because he had a mortgage credit late of 30 days. Why did he have a mortgage credit late? Because his previous employer laid everyone off. If was not his fault, he did what he could to stay on top of his payments till he could find a new job. In his quest to find a new job, he had to relocate to where the job would hire him. He sold his house without having to do a short sale and moved to the new area. Now, he cannot buy despite that credit mortgage late. It is a pity that the bank will not even take a look at this to argue an exception because FNMA is not allowing exceptions.

Scenario 2: This is very similar to scenario 1, but instead of a mortgage late there was a bankruptcy approximately 3 years ago. This time last year, no problem. Now, it has to be 4 years, no exceptions. Never mind the fact that he has 20% down, or a credit score in the 700s, or a very low debt-to-income ratio, or many years on the job.

A trained underwriter would see that the bankruptcy was actually stemming from a divorce to handle the debt accrued during the marriage. It was not that payments could be made. It was to get him from being responsible for debt that his ex-wife got him into by being on joint accounts.

Going back to manual underwrites opens many doors for many people that are qualified borrowers, but are getting the door slammed in their face because a computer cannot look at the big picture. Plus, if we go back to manual underwrites, lenders would need to hire more underwriters (a boost in employment), they would close more loans, and more money would be back in the economy. By letting a computer decide, there are no jobs, there are no common sense decisions being made, and there is no help to the economy.

Perhaps, we should take the same voice that we all hold for the medical reform and shout it out at reforming the mortgage industry and going back to good old traditional manual underwriting."

I'd like to send out an invitation to all of you that are interested in purchasing luxury real estate in Palm Beach Gardens:

Today there will be an Open House at 113 San Marita Way in BallenIsles

This 5 bedroom, 6 1/2 bathroom needs to be seen to be believed.

It sits on the 10th hole of the South Course & through the end of the summer, a golf cart and Full Golf Membership are included in the list price.

Call me at 561-282-7406, or come by later on today!

OK, you and your family need a Real Estate Agent.

You certainly want to find the best person for the job.

There are many things to consider, but the most important one is to select a person that knows about the area that you're interested in.

To put it bluntly:

Does your potential Agent have a clue about the area that you want to look at?

Quiz them - what do they know about the neighborhood in general, then get more specific -

Every part of the country is different of course.

I'm in Palm Beach Gardens - it's not a big city, but the # of Golf / Country Clubs in the area is huge:

BallenIsles, PGA National, Steeplechase, Mirasol, Old Palm, Old Marsh, San Michele, Frenchman's Reserve, Frenchman's Creek, Ibis....

Each one is very different - price ranges, gated / not gated, membership prices and so on.

Your Agent should be able to answer your questions before you even head toward the community so that you have the most efficient, successful search possible.

Be careful--- someone may advertise themselves as an 'expert', but that may not mean a thing!

Just yesterday someone billing themselves as an expert on the area's Golf communities brought a buyer to one of my listings- he had no idea that Club Membership was mandatory, or even what the fees were.  His Client was not very happy.

There's a Brokerage in town that pushes the 'fact' that they are internet experts when in reality they have virtually no online presence at all.

Ok, now I'm ranting, but I think you get the point!

I'll be featuring 109 San Marita Way in BallenIsles today at an Open House from 1-3 PM.

This 4000 + sq ft home is situated on the 10th hole of BallenIsles' South Course.

For more information please call me at 561-282-7406 or, even better, drop by the home later this afternoon.