Denver Loan Racer

Now that we are back to having to qualify for a home loan I thought I’d go over the four key areas an underwriter will be looking at when approving a borrower for a home mortgage loan.  We call it the 4 C’s of Underwriting and they are made of Credit, Cash, Capacity and Collateral. 

CREDIT- Everyone knows that a credit score is important and now with risk-based pricing it’s more important than ever, especially when trying to qualify for the lowest possible rate. Although a credit score is made up of 10 factors, 3 of them are responsible for 90% of the score that falls between 300 and 850.  These 3 are: 1) Credit ratio - the amount of credit used vs. the amount available - we want to keep this at about 33% or less.  2) Length of time accounts opened - the longer the better.  3) Usage - are accounts paid on time, lates, collections, etc… Another important factor with credit is history and continuance… in other words, does someone have an attitudinal view towards credit, so paying there bills if/when they feel like it throughout their history. Or is it more of a circumstantial view, so typically paying everything on time, but in the event of a life altering problem/accident which may incur credit issues we see some problems, but then, once the life issue is resolved we see a return to good form as far as credit goes.

CASH- The assets someone has (preferably liquid) are another huge factor when being reviewed by underwriting.  Typically, a few months of reserves in the bank is required… that’s a few months worth of mortgage payments in the bank after close. For someone with several months of cash reserves/significant assets, they can be nice compensating factor if they have issues with the previous “C”, credit or the next one, capacity. One thing to note here is history and continuance again… recent large irregular deposits will be scrutinized by underwriting so it’s important to have paper trails and be able to document such things.

CAPACITY - The ability to make monthly mortgage payments along with the other debts a person has is very important. Typically, underwriting likes to see less than a third of someones gross income go towards principle, interest, taxes, insurance and/or HOA’s and mortgage insurance.  More importantly, they want this amount plus the amounts of other debts a person has to be less than about 41% of a persons gross income. Often times with a borrower that’s strong in credit and assets this % can go as high as 50% and still get approval.  Other factors important here are the length of time they’ve been at a particular job and/or field of work and the payment shock someone may/may not experience going from whatever housing payment they were making to the one they will be making. Capacity is also the key to giving us the amount of money someone will qualify to borrow.

COLLATERAL- The asset a lien is held against, or in our case, the home being purchased and it’s value is extremely important. It’s the biggest reason why the real estate market has gotten to where it is in many places now…  Lenders/investors didn’t care about the first 3 “C’s” during these times because they were sure to be saved by the collateral and it’s ever appreciating value. Not so any longer. Appraisals are being reviewed and re-reviewed in many cases now and aside from FHA, getting close to 100% financing for a property is impossible.

That’s pretty much it for underwriting guidelines. If we can just get back to everyone realizing this is the norm and how it should be we’ll be wasting much less of everyone involved’s time as well as strengthen everything from local housing markets to the end investors in such things on Wall Street and beyond!

Over the past year we’ve seen the mortgage lending business go from a place where just about anyone could get a loan, and get it easily, to where we are now - a time when one must actually qualify for the loan and for some it can be difficult.  As a result of actually having to qualify it is now more important than ever that the mortgage professional you use knows what these qualifications are and how to accurately qualify a potential customer.

Since the ever popular and now infamous stated income/stated asset loans that required, let’s face it, NO job and little to no money down are no longer available we have seen huge increase in old school FHA loans - loans that require verification of jobs, income, assets and credit, but only require 3% down.  However, even less money down is still an option for many… first-time buyers that meet the criteria can put as little as $1000.00 into the transaction when using a program such as CHFA.  Even better yet, if someone can find a HUD foreclosure property, they may be able to purchase the home for as little as $100.00!

At ULC, a large privately held Colorado mortgage bank that’s been around for almost 30 years, we were built on the basis of providing loans to the average person (that is qualified) and are a leader in Colorado for FHA loans.  In light of this, everyone involved in the transaction from the loan officer to the processor to the underwriter are highly experienced and will be able to help provide expertise and great service in dealing with FHA as well as many of the available first-time buyer programs.

On a side note… now that seller-funded down payment assistance is no longer available, programs such as CHFA, CHAC and various others County home buyer assistance programs are going to be even more attractive to buyers who have little or no money to put down.  In many cases, it may be the only option unless some kind of gift is available from a relative…

So, now that we are back to the times of actually having to qualify to purchase a home, in the next few days I’ll post a little information we are calling “The 4 C’s”… The basics of mortgage qualification as viewed by underwriters, and thus, as we must view them.

Here are my photos from the 2008 Beijing Paralympic Games this past September… just click here.  Also, see the summary of my Paralympic experience in the post below…

First off, I apologize for not updating this while in China. Although the Paralympic Village had wifi that was mostly accessible while on the trip I had trouble accessing the updating portion of my blog. Maybe I was flagged by the Chinese gov’t for some reason??? Wouldn’t surprise me… Second, want to apologize for not updating sooner upon my return… Just busy getting back to normal life and been trying to gather my thoughts about the whole experience.

We arrived in Beijing and the Paralympic Village on September 4th. Two days before the Opening Ceremonies and about eight days prior to my first race.  The first day we made a quick trip out to the road venue where we’d be racing and then spent the rest of the day getting familiar with the Paralympic Village, it’s surroundings and all it had to offer.  From the newly built condos that housed us to the massive dining hall which included a McDonalds & McCafe (I know - great food for athletes) to the International Zone which had everything a small village would need.  The Chinese did a great job making all the athletes feel comfortable and at home. 

Next came the Opening Ceremonies and they were amazing!!! We marched onto the Birds Nest Stadium floor in our Polo suits to a sell-out crowd of around 90,000 fans from all over the World.  No Paralympics has ever seen a crowd this large and this fired up. The ceremony was very well done and while I am sure they didn’t spend close to the $400 million they spent on the Opening Ceremonies of the Olympic Games, they definitely spent a significant amount of dough.  The way the lite the torch was pretty cool too - they had a guy in a wheelchair ascend a rope from the ground floor up to the base of the torch and light it.

Over the next several days we woke every morning, had a quick breakfast and went to the road venue for training and to get familiar with the course.  We’d head back to the village in the afternoon, grab lunch, a quick McCafe cappuccino, maybe a nap, do some laundry and then it was dinner, team meeting and bed.  That was pretty much it until the first race. I did sneak out to have dinner with a couple of buddies that had made the trip, but thought I’d better stay in the village mostly and stick to “normal” food until done racing.

The road race venue was one of the nicest courses I’ve been on.  The road was about an 8 mile loop around the Ming Tomb Reservoir completely fenced off on both sides and on brand new pavement. It was a beautiful venue too… the rolling course was mostly tree lined with occasional views of the reservoir and the mountains to the northwest where the Great Wall was located - or part of it anyway. One unique thing about this course was the presence of an army guard every couple hundred yards or so on either side standing at attention on a foot high small box.  (Guess they didn’t want anyone messing with the course)  The start/finish area had a large stadium and was done in such a way as to give spectators about as much viewing capability as one could hope for in a cycling time trial and/or road race.  After leaving the stadium the course had a brutal hill that kicked up to 10% in one spot and then was pretty much a fast roller coaster for the remainder.  Aside from the hill it was my kind of course and in the time trial, with only one time up that hill, it was definitely one that suited me.

The first race was this time trial and my best shot for a medal.  The hill at the beginning I just mentioned wasn’t the place you were going to win the race. The key was just getting over it not too far off the pace and there was plenty of road to make up time and that’s exactly how I’d been planning it.  We arrived early at the road venue that Friday morning September 12th, so we had sufficient time to get ready, warm up and  make it for our start times.  We had a team which included coaches, mechanics, a doctor and sougniers ( a masseuse/care giver type person) so everything a rider would need so one could focus on the race and not worry about anything else… supposedly.

I warmed up on a stationary trainer for about 30 minutes and then it was off to the start line…  I was feeling good and was very focused.  My turn on the start ramp seemed like it came quickly and I was off.  We did a 180 deg turn in the stadium so we went back and forth in front of the crowd and after going around the hairpin turn to head back and exit the stadium you were at point where you could start to pick up some speed.  I begin shifting down the cassette to harder gears…. and then it happened… I only had two harder gears I could get into! I kept shifting up and down and nothing.  Looking at the derailuer I couldn’t see why it wasn’t able to move down on the cassette.  Every negative emotion hit me… I was pissed off, embarrassed, sad, etc… I tried to calm down and figured I’d get to the short downhill after leaving the stadium and try to fix it there…  Down the hill I was yanking the shifter cable trying to get it unstuck - if it even was stuck - but nothing worked.  Soon I was at the the big climb and since I had the gears for that I stopped fiddling with the bike and did the climb… still full of the negative emotions by the way and my head spinning.  At the top I yelled to our guy giving us splits that something was wrong with my bike and shifting.  I tried one last time on the next downhill to fix whatever was wrong, but no luck. I resigned to doing the race in the gears I had. I could get in the big ring, but only had the 3 larger cogs on the cassette and could only really pedal at a max of about 20 mph before I was just spinning like crazy.

I finished that race and as my friends and family could see, was not in the best mood afterwards.  Needless to say, I didn’t medal in that race.  I ended up 13th.  Not last somehow which I couldn’t believe. Still, it was a major disappointment.  When I arrived back at the team tent was I explained to the guys what happened and someone looked down and noticed the lever on the quick release was pushed up and into the derailleur preventing it from getting in to most of the gears.  A simple fix if one new that’s what was wrong.

Turns out when the mechanics put our bike in the stationary trainers to warm up they have to flip the quick release so the lever is on the side of the cassette/derailleur and it will fit properly.  I had no idea this was the case since when I use mine at home I don’t need to do this.  Different trainers I guess… When they did it they accidentally shut it so that the quick release lever blocked the derailleur.  When they took me out of the trainer to head to the start line the quick release should have been flipped back around. The mechanic forgot in all the craziness with getting us to the start line and I never thought to tell them since I had no idea they’d reversed the quick release in the first place. When warming up I was only using my few easiest gears, so I didn’t notice anything was wrong or going to be an issue.

Still not totally sure how I feel about it.  So frustrating to think such a simple thing was wrong and so frustrating because I am not even sure who to blame…  I guess it’s spread around, but I do sort of feel like my focus should be on the race and not the bike when it’s only a few minutes before race time and as far as I am aware, all is fine.  Guess that’s not important now and what’s done is done. I’m just trying to keep in my mind that it took a lot of work to get there, it was a huge accomplishment in doing so and the experience of being at the Paralympics was amazing.

The next race - road race - was a couple of days later.  I was trying to tell myself I had a shot, but not sure I ever really convinced myself of this… I think all the disappoint from the TT wasn’t helping.  The road race was on the same course, but a lot longer than the time trial.  We did 4 laps on it which mean 4x over that hill… I was able to hang in there for the first couple of laps, but then get dropped off the leading 6 guys on the 3rd lap.  Not like they were even going that much faster up the hill, but all it takes is a slight gap from a group over the top and they were gone.  I ended up in 10th.

At least it was over… the stress of thinking about the race and all that goes along with that was done. Still a lot on my mind, but nothing I could do about any of it now, so at least there was some comfort in that.

I had family and friends there, so we celebrated that night with a great dinner and cocktails.  I had a few more days to see some of the sites around Beijing, so we hit places like the Forbidden City and the Great Wall.  Both very cool…

Another very cool thing that I wasn’t used to was the way I, as well as the other athletes, were treated when site-seeing around town and places like The Great Wall.  We were celebrities to the Chinese! Everywhere I went it was take a photo with this person, sign an autograph for this person, etc… and you honestly felt like they meant it. There were genuinely excited to meet anyone there for the Paralympic Games. Not to be cynical, but not sure we’d get the same sort of attention here in the USA if we were holding the games???  According to some of my fellow athletes that had been around for Atlanta it’s true, but the Paralympic movement has come a long way since then… Maybe we’ll find out in 2016 and Chicago!

Finally it was down to the closing ceremonies which, while not as great as opening, were still very nice indeed.  After that I was really looking forward to getting home. It had been over a month since I was really settled in back in Denver and I was looking forward to a home cooked meal, my own bed and seeing my old dog, Russell.

I have tons of photos and will try and get them up online somewhere for all to view soon…

Thanks again for your support!!!! You know who you are… And I look forward to telling people more about the trip when see them. 

Sitting here at DIA wating to board our flight to San Fran after a 1am wake up call for our 3am meeting time here at the airport. Now throw on about 20 hours of travel and it’s gonna be a LONG day…  Got to get on the plane.  Until next time…

One part of this new Housing and Economic Recovery Act that’s recently been passed by the government is going to allow first time buyers who’ve bought a home with an FHA loan qualify for a tax credit of $7,500.  Here’s what’s required to qualify:

• Must have single income of 75,000.00 or less or married income of 150,000.00 or less
• Must have not owned a property within the last 3 yrs
• Must purchase home between April 9^th 2008 and July 1, 2009
• Credit must be repaid at no interest over 15 yrs

This is just one of the many things the gov’t is trying to do to help stimulate the economy and keep people buying homes. Check back for more residential mortgage lending updates soon!

Okay, maybe not actual TV coverage, but online coverage.  Better than nothing I suppose…  There will be some live as well as taped coverage of Paralympic events at the following sites:

www.universalsports.com  (click on Paralympics in the top bar)

www.paralympicsport.tv

I’d also like to send out a huge thanks to all that have donated to my Paralympic cause!  Couldn’t have done it without you…

The Paralympic Games in Beijing are just around the corner and to help me better focus on training and get the proper equipment to give me the best shot at a medal, US Handcycling is putting on a fundraiser at Scruffy Murphy’s Pub on August 7th. A huge thanks to all my friends for organizing the event and to local businesses that are donating to it!   Marco’s Pizzeria, Amusemints, National Distributing thanks for the kind donations! Hope to see you there…

Seller funded down payment assistance programs (DPA’s) are about to exist no more…  Looks like October 1st of this year will be the end of them and now a buyer will have to either 1) have at least 3% to put down on a home, 2) get a gift for the 3% OR 3) use a program such as CHFA for the 3% down.  CHFA does require that the buyer have $1000 into the deal, so even if the seller has given concessions to pay for closing costs the buyer won’t be able to get a home for $0 like they could do with a seller funded DPA.

The good news for me here at Universal Lending Corporation is that we are one of the few CHFA approved lenders in the state!  Buyers options are going away and the lending World is getting more and more strict all the time, but one thing that seems to be ringing true is that I am still able to help many of the people that might not think they can be helped…  That’s because Universal Lending is a mortgage bank with long standing credibility that never got caught up in the sub-prime mess and bases it’s business on traditional lending practices.

The housing bill that’s about to finally be signed has many other ”features” so check back for updates or feel free to contact me with questions.  Let me know if you’d like more information on CHFA as well.

I recently returned from a quick trip to St. Petersburg, FL and Invacare’s Top End division manufacturing facility.  I was down there to help Chris Peterson (Chief designer/builder and former Top End owner/founder) as he was designing and building a new handcycle.  More like being the test pilot I suppose, but helping out and trying to give good feedback.

I was a former member of Team Invacare/Top End before I left to race with an international team started in Europe sponsored by MasterCard.  That never ended up panning out, but I’ve been lucky enough to get resigned with Invacare.  I don’t think my recent qualification for the Beijing Paralympics hurt…  They sponsor many of the top athletes in handcycling as well as all wheelchair sports so I am back in good company!

Anyway, Chris makes a great handcycle and is constantly innovating new, faster, lighter designs so I am looking forward to being back on the team and working with them in the future.  You can check out the Top End site here. My profile should be added to the athlete profile section soon.