So, MetLife Wants to do Warehouse Lending?

Just when we thought no one wanted to lend money, we got a surprise. MetLife has decided to try its hand at warehouse lending in addition to its securities, and financial planning that it offers. From insurance to mortgages, it has now truly broadened its horizons. MetLife in addition to many other insurance and financial planning firms have been looking for ways to expand their potential, and this was one way to do it.

The managing director the for the operation, Brian Lewand made the statement that it was a “good fit” for the firm. In order to launch the financing end properly, the company hired two executives from Sovereign Bank to head up the launch of their new product. Ultimately, it takes more than two to run an operation like this, so MetLife is currently in the process of looking to add staff, but a process like this takes careful time and selection. At the end of their third quarter, MetLife plans to release more information regarding the next steps and what is going to happen.

I hope that this operations is successful, as the nation has faced so much disappointment over the past few years. Our country just can’t take anymore. My hopes are that certainly, a company that focuses on financial planning and insurance, will take all the right steps to grow this endeavor to the best of its ability.

-Mayer Dallal

The Rise on Government Backed Loans

Can we do this without the government? What I meant to say was, can we make a recovery without their help? I guess the answer to that is both yes and no. What I mean by this, is with the increase of applications in government backed loans, we can be in a really good position to move forward and upward in our economy without needing or getting some sort of bail out.


At least with FHA loans it appears this way. Bill Gross, who operates the largest mutual fund at Pacific Investment Management Company, said that there could be as much as a 4 percent increase in mortgage yields. With that being said, we know that mortgage applications have increased by 12.4% from the previous week, and each week prior to that over the past month applications have gone up. Additionally, Gross said that 95% of mortgages that were closed over the past year, were government backed loans. This means that whether they were purchases or refinances, these loans were backed by Freddie Mac or Fannie Mae. I guess the private sector simply charges too much?

Think about the differences in FHA over the conventional loans. With FHA purchases, you can put down as little as 3.5%, or up to 10% depending on your credit score. This was one of the changes that came this year. With conventional loans, you would need to put as much as 10% to 30% down. A majority of families need the lesser of the two, and it’s critical that consumers know that they have options in these tough economic times. I have been able to help so many families get into homes with the lower down payments, and not only that but being able to direct them in the way of how FHA works. It is important in times like this that your clients understand what options are available, and I can get their loans closed in as little as ten to fourteen days. Who likes to wait?

For more information on FHA loans, and how to get your clients qualified, go to www.fhaloansnow.net and take a look around. I have an FHA calculator there where they can put in the information to determine their affordability and payments, and there is valuable information on guidelines and requirements. You can also email me directly at mdallal@fhaloansnow.net, or call me at 310-498-2700.

-Mayer Dallal

The Changes to Mortgage Insurance Premiums

Right at this moment upfront mortgage insurance on an FHA insured loan is 2.25%. Effective on new FHA loans October 4, 2010 and later, the new upfront mortgage insurance premium will be 1.00%. On a $400,000 loan the 2.25% premium pencils out to $9,000 which is typically financed (added to the FHA base loan amount); in a month the upfront premium will be reduced to $4,000.


This might sound like good news, and a break for those who wish things would let up; but there is a catch. The yearly mortgage insurance (paid monthly) is increasing to 85-90 basis points (currently it's 50-55%). An increase of 0.3% of the yearly premium will increase the monthly payment (based on a $400,000 loan amount) to $300 (0.90 x $400k =$3,600/12) from $183 (0.55 x $400k =$2,200/12) an increase of $116.47 per month.

Using an interest rate of 4.25% and a based loan amount of $400,000, this is how it breaks down.

FHA Case Number BEFORE October 10, 2010:

$400,000 plus $9,000 = $409,000 amortized for 30 years at 4.25% = principal and interest of $2012.03 plus the yearly mortgage insurance of $183 = $2,195.03

FHA Case Number issued October 4, 2010 and after:

$400,000 plus $4,000 = $404,000 amortized for 30 years at 4.25% = principal and interest of $1,987.44 plus the yearly mortgage insurance of $300 = $2,287.44.

The new FHA mortgage insurance premiums have an increase in payment of $92.41 based on this example. This impacts both purchases and refinances using FHA insured mortgages.

For more information on the changes, you can go to www.fhaloansnow.net, or you can call me directly at 310-498-2700.

-Mayer Dallal

Adjustments in the FHA Down Payments

FHA Down Payment Gets Adjusted




In January, FHA made adjustments to the down payment requirements. This change in the FHA down payment requirements threw some borrowers for a loop, while others weren’t greatly affected by it. Let me explain.



The FHA down payment guidelines, allows home buyers to put as little as 3.5% down, and up to 3% in seller concessions. Prior to the changes the seller was able to contribute up to 6% in seller concessions, so for those who were planning to buy and hadn’t started the process yet, had to back off until they could come up with more money.

Fore more information, you can visit my website at http://www.fhaloansnow.net/. There you can find information on purchasing and refinancing too.

-Mayer Dallal

What to Do When You Have No Credit

If you have no credit, and you aren’t sure where to start, you can become a co-applicant on an account, or in other words be added to someone’s account who has established credit. While I don’t encourage making a habit out of this, it can help you get something on your credit history. There is risk in this, as anything could happen at any time, an no one is exempt from job loss or hard times. Being a primary applicant you can’t remove yourself since you originally applied for the account in your name, but you can always be removed as a co-applicant or secondary borrower on a credit card. Remember, just paying your bills on time is not the only way to keep your credit healthy. You can also drive your credit score down by maxing out your lines of credit.




Once you are able to get some credit, you will able to move toward paving the way to your fulfillment of the FHA loan requirements. The guidelines are always subject to change, and they have become a little more stringent than they were a few years ago, so keeping up with the knowledge of the market is always essential as well. Avoid the mistakes that can affect your buying power for years to come. Making bad credit decisions can limit your options, so think of credit as a tool, not a joke.



Your credit score will also need to meet the FHA loan requirements if you want to buy a home. If you are a first-time homebuyer then you will need to plan on how you much money you can bring as a down payment. With a credit score of 620 or better, you can start with as little as 3.5% down, but if your score is 580 or better you will need to come up with at least 10% down. This was a fairly recent change, but rightfully so. The idea behind this change was to get the homeowner to invest more into the home upfront. Statistics show that those who put more down on the home are less likely to default on their loan.



For more information on credit repair, and steps to getting your FHA loan today, visit http://www.fhaloansnow.net/.

-Mayer Dallal

Getting Help From the FHA Calculator

Determining how much you can afford is an important factor of taking a loan out of any size, no matter what it’s for. When using the FHA calculator to determine what you can afford, you can enter the monthly payment that you would like to be at, interest rate and term, and you will be able to calculate the maximum monthly payment that you can afford. Keep in mind that while using this tool is beneficial, it doesn’t include any other fees that may be associated with your loan.


Last but not least, you can take advantage of my prequalification FHA calculator. You can use the prequalification calculator to get an idea of how much you can borrow. This is not the same as finding out what your maximum payment can be, and it isn’t the same as a preapproval. The prequalification gives you an estimate of how much you may be able to borrow. A preapproval, shows that you have been approved for a particular loan amount prior to selecting a property. Remember, when buying a home it is the first step before speaking with a realtor.

For more information on how you can start the process for applying for an FHA loan, and to find out what your options are when buying a home, you can visit www.fhaloansnow.net. It is never too late to learn.

-Mayer Dallal

The Bottom Line on Banks

I guess I am not sure why banks aren’t advertising their low rates either, but they aren’t. They aren’t encouraging people to refinance to minimize their debt. Why? They would love for people to stay in their mortgages forever, not paying stuff off. This leaves people in a bad situation, when everyone knows that we could all use a lower payment on everything right now. Isn’t that what stimulus really is?


I talk to families time and again that just simply want to throw their hands up in the air because they feel like they can’t find a viable option. This isn’t living, it’s financial prison. Money should breed options, not heartache, but this is so often the case. Helping each other has fallen by the wayside, and banks helping people has too. Being in a position to help others with their finances I should live in this mindset, which is why I chose to become an FHA specialist, not a salesman. If I wanted to do that, I would go back and continue to do things the way that they were being done before. I choose otherwise. Do you?



-Mayer Dallal