Follow Up - the Key to Successful Closing

If everyone always did everything they said they’d do, we’d all be a lot richer. Unfortunately, tasks are overlooked, and the ball is often dropped. If you want to have successful closings, you must have strong “follow-up” skills to catch problems early in the process. Follow-up on everyone and everything.

We can’t begin to tell you the number of closings that almost fell apart, or would have fallen apart had we not kept a watchful eye on the entire process to make sure that everything was completed when it needed to be. Here’s a typical scenario: you’re wholesaling a house and you have just 30 days to get it closed before the contract with the Seller expires. You find a buyer who can get a loan and close before the expiration. Then a few days before closing you find out that the loan isn’t ready and closing must be delayed two weeks, but the Seller already has another Buyer ready to pay more than your price, so they refuse to extend your contract. You just lost the deal.

So what is follow-up? We used to think it meant staying in touch with the buyer to make sure that everything was completed for the loan. Then we learned that the buyer is often a newbie and clueless of what needs to be done. Mortgage brokers just usually respond “Everything looks great” until they can’t close the loan. So the real trick to following-up is to speak to the final decision maker for each step. This works whether you’re selling a retail house or a wholesale house, or even if you are the buyer/borrower. The goal is to close without delays.

Assuming that you have already received a pre-qualification letter from the lender, and ensured that the lender will loan on the deal (i.e. no issues with title seasoning, assignment fees, inhabitability of the property), the first step is to follow-up with the broker/lender that all of the application paperwork was submitted, and have they forwarded it to the lender? If not, what is still required? Determine if the lender requires a termite letter, appraisal, and a survey (most lenders do). If so, have they all been ordered? When is each to be completed? Keep following-up until you verify that each has been delivered. You also want to verify that the appraisal was sufficient for the loan.

If we don’t already own the house, we order a title report as soon as we go under contract with the Seller to discover any defects early in the process, and begin resolving them. Closing attorneys usually do not order the title report until just before closing to receive as current information as possible. But if they find problems, it could delay your closing. It is well worth the $125 to run title ahead of time, and eliminate delays.

Once the broker has forwarded the paperwork to the lender, the next step is to verify the loan has gone to underwriting. If not, what is the delay? If so, was the loan approved? Do any conditions need to be met? What are they and who is handling them? Make sure that once the conditions are met, the loan is returned to underwriting and approved.

Verify that the closing has been scheduled with the attorney, and that they have cleared title. Find out if and when the loan package will be forwarded to the attorney. Then remind all of the players of the date and time of closing, to bring a picture ID to closing, and to bring any funds required in a certified check.

This seems like a lot of work that should be handled by other people, but the reality is that often times something is overlooked. Through your diligent follow-up efforts, problems will be detected early and corrected, allowing your closing to occur flawlessly and on schedule.

Article by Reiclub.com

Courtesy of First Choice Title Services & Escrow, Inc.

First Choice Title Services & Escrow, Inc

3 SW 129th Avenue, Suite 202

Pembroke Pines, FL 33027

Phone (954) 433-7680

Fax (954) 433-7355

maria@firstchoicetitleservices.com

New Home Closing Rules Take Effect This October

Closing on your new home is an exciting time — but it also can be an overwhelming process. Home buyers are usually required to sign a seemingly endless pile of documents, most of which are written in terminology not used outside of the housing industry and that can be complicated to understand.

Fortunately, the process is about to get easier. 

Under new rules required by the Consumer Financial Protection Bureau, four closing documents will be merged into two. The CFPB recently announced that the changes scheduled to take effect on Aug. 1 will be delayed until Oct. 3

The Good Faith Estimate and Truth in Lending disclosures will be eliminated and combined into a new single Loan Estimate form. The Loan Estimate must be delivered to the buyer no later than three business days after receiving the application.

In addition, the final Truth in Lending Disclosure and HUD-1 Settlement Statement are being replaced by the Closing Disclosure form. This form must be provided to the consumer a full three days prior to the closing, and if there are changes during that 72-hour period, the closing could be delayed.

This is a big change from the current process that allows the HUD-1 Settlement Statement to be presented to the buyer as late as the day of closing and allows changes to be made to the statement during the loan closing.

These new rules are intended to streamline the loan application process and make it easier for consumers to understand by clearly spelling out the most relevant details all on one page – the interest rate of the mortgage loan, the amount of the monthly payments and a listing of all the closing costs.

For consumers applying for adjustable rate mortgages, the documents will explain how their interest rate and future monthly payments could change based on certain factors.

Article By NAHB.org
Courtesy of First Choice Title Services & Escrow, Inc.

First Choice Title Services & Escrow, Inc

3 SW 129th Avenue, Suite 202

Pembroke Pines, FL 33027

Phone (954) 433-7680

Fax (954) 433-7355maria@firstchoicetitleservices.com

What a Fed rate hike would mean for you

The Federal Reserve held back on Thursday from raising interest rates for the first time in years. But it will eventually, maybe later this year.

Whatever the timing, a rate hike will have implications for millions of Americans. It's important if you have a credit card or savings account, invest in a 401(k) or in the markets, or want to buy a home or car.

The Fed slashed interest rates to zero in December 2008 to help stimulate the economy and housing market during the depths of the Great Recession. The economy is much better now.

The first rate hike won't be a game changer overnight. But it will pave the way for more hikes over the next year or two, and rates on all types of things will gradually move up, experts say.

"The precise starting date [of rate hikes] is much less important than the path of rate increases that follows," says Robert Denk, senior economist at the National Association of Home Builders.

Here's what you need to know about a Fed rate hike.

1. Home buyers: Interest rates are still very low

Relax. You don't need to rush to buy a home or get a car loan tomorrow. Interest rates, even when they are raised, are still low and will remain historically low for quite some time.

The Fed's eventual first move is expected to be small -- a maximum of about 25 basis points, or an increase to 0.25% from 0%. In the world of interest rates, that's like bunting a baseball.

The average interest rate on a typical 30-year fixed rate mortgage is 3.9% right now. Ten years ago that rate was near 6% and 20 years ago it was 7.5%, according to the St. Louis Fed. So yes, rates will likely be higher in a year but still low when compared to historical averages.

The Fed sets a target rate for very short-term debt. But that rate also influences interest rates on mortgages, car loans and other big-ticket items.

But none of the impact will happen overnight, experts say.

"We don't expect mortgage rates to skyrocket," says Greg McBride, chief financial analyst at Bankrate.com.

2. Savers can (eventually) smile

The first rate hike would be the light at the end of the tunnel for savers who've seen zero interest in their savings accounts and certificates of deposit.

That will begin to change ... slowly. McBride of Bankrate warns that savers should not expect big banks to start offering higher interest on their deposits immediately.

Still, the Fed's first rate hike will be a step in the right direction. It will mean there will likely be more rate increases in the near future (the next 1-2 years), and that eventually should mean higher interest on your deposits.

Experts say savers will be able to expect to see a more typical interest rate within a couple years, so you still need to be patient.

3. Stock markets could get even more volatile

If you invest in stocks or ETFs -- or even if you just have a 401(k) -- a Fed rate hike will be important to you and your portfolio.

August was a very volatile month for stocks, and a rate hike could trigger even more volatility in U.S. and overseas stocks.

Sometimes a Fed rate hike causes investors to pull their investments out of developing economies like India and Mexico. Even a slightly higher interest rate in the U.S. can encourage some investors to put their cash in safe assets like U.S. government bonds, and get out of less safe assets abroad.

Already this year, investors have pulled $1 trillion out of emerging markets. If you own stocks or ETFs of overseas stocks, it could be a rocky couple of months. We're not saying sell your stocks -- sometimes volatility can present a buying opportunity. We're saying be prepared to handle some volatility in global stock markets.

No one has a crystal ball and knows how the market will react. So far this year, whenever news suggested the Fed might raise rates, stock markets generally went down, and the opposite happened when economic news suggested a rate hike might be pushed off.

The best educated guess is that a rate hike could cause some market volatility at least in the short term.

4. Will the global gloom continue?

Sometimes economists refer to the Fed as the "World's Central Bank" because its actions have lots of implications for global economies. Ultimately what's bad news overseas ends up hurting the U.S. too.

China's economy is already slowing down and developing economies are struggling with plunging currencies and low commodity prices.

The concern is that the Fed's rate hike can cause a boomerang effect: (1) the Fed raises rates, (2) that hurts other economies even more, and then (3) economic woes in developing countries eventually hurt U.S. trade and economic growth.

A rate hike has upsides and downsides, says Diane Swonk, chief economist at Mesirow Financial. The U.S. economy could gain additional momentum behind home buyers trying to lock in low mortgage rates.

"The downside risks, however, is that a rate hike adds insult to injury in an uncertain world and causes a moderation in growth," says Swonk.

Article on CNNMoney
Courtesy of First Choice Title Services & Escrow, Inc.

 First Choice Title Services & Escrow, Inc

3 SW 129th Avenue, Suite 202

Pembroke Pines, FL 33027

http://www.firstchoicetitleservices.com/

Phone (954) 433-7680

Fax (954) 433-7355

maria@firstchoicetitleservices.com