The “Access / FirstDown” Disclaimer: This information is accurate as of the date shown Below and is subject to change without notice. June13, 2015
The “Access / FirstDown” • Introductions –
Eric L. Frazier MBA Broker NMLS 461708 | Frazier, Eric, Lawrence Brokerage NMLS 1273606
• Mortgage Broker vs. Banker • Access / FirstDown Programs Highlights • Program Income & Loan Limits • Program Qualifying Income • Underwriting Guidelines • Program Summary • Questions and Answers • Thank You and Disclaimers Frazier, Eric, Lawrence Broker Company NMLS 1273606 | Eric L. Frazier Broker NMLS 461708
My Story
Introduction
• Married 33 years 4 Daughters • One in College., Three MBAs. All In Real Estate
• Born in Memphis Tenn. Native IE. SB. • Residence Riverside 14 years.
• University of Redland Graduate • Degrees: BSBAM, & MBA in Finance • 33 years as Lender/Mortgage Banker • 23 years as Real Estate Agent/Broker • Co-Founder of Frazier Group Realty • President of The Power Is Now Inc. • Radio | TV | Magazine | Events | Financial Services
• President of The Power Is Now Foundation
Eric Lawrence Frazier, MBA Mortgage & Real Estate Broker
• President of The OC Realtist (NAREB) • BOD of California Assoc. or RE Brokers • BOD of California African American Museum • BOD of Project Tomorrow (k-12th Ed)
Frazier, Eric, Lawrence Broker Company NMLS 1273606 | Eric L. Frazier Broker NMLS 461708
The Mortgage Brokerage • Frazier, Eric, Lawrence Mortgage Brokerage NMLS 1273606 begin March 1st, 2015. Founder and Owner Eric L. Frazier MBA NMLS 461708 has been opening doors to the American Dream for 33 years. It is his passion and mission. He is also a Real Estate Agent/Broker for approximately 23 years CABRE 01143484 and is the co-founder of Frazier Group Realty. • As a Mortgage Broker, Eric Lawrence Frazier is approved with many lenders that offer programs for first time homebuyers, move up buyers, investors, churches, nonprofits and foreign nationals. We are a full service mortgage brokerage.
Frazier, Eric, Lawrence Broker Company NMLS 1273606 | Eric L. Frazier Broker NMLS 461708
Mortgage Broker verses Banker Making the Case for the Broker
Why Use Mortgage Broker Verses a Banker • There are three reasons to use a broker instead of a bank/banker: Expertise, Time and Money. • As a Mortgage Broker, Eric Lawrence Frazier is approved with many Bankers and Portfolio Lenders that offer programs for first time homebuyers, move up buyers, investors, churches, non-profits and foreign nationals. We are a full service brokerage. I have 33 years in banking and the time and expertise to search for the loan you need. Frazier, Eric, Lawrence Broker Company NMLS 1273606 | Eric L. Frazier Broker NMLS 461708
Mortgage Brokers Arrange Loans • Brokers do not make loans we arrange loans for borrowers. We represent the borrower and not the bank. We find the terms and rates the borrowers want from the bank who will provide it. We save them time and money in paying the initial fees with multiple lenders and the time it takes to go through the process. • As a Real Estate Broker looks high and low for the home their clients want. A mortgage broker does the same research for the right loan for his client and saves his client time and money in the process.Â
Frazier, Eric, Lawrence Broker Company NMLS 1273606 | Eric L. Frazier Broker NMLS 461708
Mortgage Brokers are Service Providers • Mortgage Brokers provide a concierge type of services in that we can conduct business on your terms and in anyway you like: over the phone, online, at your office or home. If you are a busy professional do you have the time sit and wait for banker, or come down to the bank. You also do not have the time to research what they are trying to sell you.
Frazier, Eric, Lawrence Broker Company NMLS 1273606 | Eric L. Frazier Broker NMLS 461708
Mortgage Brokers are Service Providers • You need an advocate and that is what brokers are to their clients. You are the mortgage brokers client - not the bank. Our allegiance is to you the customer and all mortgage brokers want what you want just like your Real Estate Broker who is helping you find the home of your dreams. • Once you work with a mortgage broker you will never work with a bank or mortgage bank directly again. Frazier, Eric, Lawrence Broker Company NMLS 1273606 | Eric L. Frazier Broker NMLS 461708
Mortgage Broker Licensing & Requirements • California Mortgage Brokers are licensed by the Federal Government’s National Mortgage Licensing System and the State of California Bureau of Real Estate. • They are required to take continuing education courses to maintain their license every year like many other professions. Frazier, Eric, Lawrence Broker Company NMLS 1273606 | Eric L. Frazier Broker NMLS 461708
Mortgage Broker Licensing & Requirements • The Great Financial Crises of 2008 brought many changes in lending. Mortgage Brokers have more licensing and education requirements to meet than Federally Insurance bank loan officers. They must also meet credit standards, net worth and asset requirements, and pass a state and federal exams.Â
Frazier, Eric, Lawrence Broker Company NMLS 1273606 | Eric L. Frazier Broker NMLS 461708
Mortgage Broker Licensing & Requirements • Mortgage professional also holds a real estate agents or brokers license take a real estate test and additional continuing education courses are required. • Mortgage & Real Estate Brokers are all highly educated, experience and qualified real estate professionals. Frazier, Eric, Lawrence Broker Company NMLS 1273606 | Eric L. Frazier Broker NMLS 461708
Mortgage Broker Compensation • Mortgage Brokers are compensated the same way bankers and portfolio lenders are. We are all paid directly by the consumer or paid from the premium charged in the interest rate. Mortgage Brokers embraced transparency and disclose our compensation to our clients. Banks and Mortgage banks are not required to disclose their compensation. • Borrower are not at a disadvantage in anyway in using a broker. In fact, borrowers have more advantages working with a broker and brokers can compete with any bank or portfolio lender in interest rates and fees.
Frazier, Eric, Lawrence Broker Company NMLS 1273606 | Eric L. Frazier Broker NMLS 461708
Mortgage Brokers Save You Money • As a mortgage broker I am a low cost provider of mortgage services in that I do not charge any processing, underwriting, or administrative fees to our clients. I seek out wholesale financial institutions that do no charge any fees. A typical loan will only have the necessary third party fees to facilitate the transaction. In some cases, the wholesaler may have fees that are passed on to the borrower. But this is rare.
Frazier, Eric, Lawrence Broker Company NMLS 1273606 | Eric L. Frazier Broker NMLS 461708
Mortgage Brokers Save You Money • Our total compensation comes from the lender that funds your loan. The Lender builds our commission into the interest rate just like they do for their own employees who for their retail operations. • You also have the options to pay all cost and commissions out of pocket for the lowest rate in the market place. • The compensation paid to all mortgage professionals today, regardless of whether you are working with a broker or banker, is established in advance before the employee can originate any loans so that loan officer cannot change the customer’s interest rate or program to increase their compensation.
Frazier, Eric, Lawrence Broker Company NMLS 1273606 | Eric L. Frazier Broker NMLS 461708
Mortgage Broker Get Results! • Brokers can find the best interest rate for any type of property or loan and do it quickly because they have many options • Brokers can process your loan faster than banks because they do not have the bureaucracy that banks have • Brokers use contract processors and many lenders so there is no standing in line and waiting to get the loan closed quickly • Brokers can work with you regardless of your financial or credit circumstances and will never say no if there is product for you in the world of lending. – Banks and mortgage banks will say no if you do not fit their limited set programs and products. Frazier, Eric, Lawrence Broker Company NMLS 1273606 | Eric L. Frazier Broker NMLS 461708
Mortgage Brokers Get Results! • I am Mortgage Broker and Real Estate Brokers and proud to be so. I am indebted to the industry for teaching me and the many people who have mentored me over the years. • Now I proudly serve the community independently and work to make home ownership a reality for everyone • Once you use a qualified mortgage broker you will never go direct to a bank again. Please call me today. I can help you. • Licensed CA Only NMLS 1273606.
Frazier, Eric, Lawrence Broker Company NMLS 1273606 | Eric L. Frazier Broker NMLS 461708
“Access / FirstDown”
Not having the money for a down payment is no longer an excuse!
“Access / FirstDown” • The Access / FirstDown Program is a program of the National Homebuyers Fund, Inc. (NHF) provides and manages a variety of homeownership programs on behalf of itself, state and local Housing Finance Agencies and other housing related organizations. NHF is not a direct lender and does not provide nor accept loan applications to or from potential borrowers. Participating Lenders provide potential borrowers with loan applications, applicable fees and APRs and complete program guidelines. • As a Mortgage Broker, Eric Lawrence Frazier is approved with many lenders that offer programs for first time homebuyers. The CHS Access/FirstDown is just one of many programs that are available and will be presented today.
Frazier, Eric, Lawrence Broker Company NMLS 1273606 | Eric L. Frazier Broker NMLS 461708
“Access / FirstDown” Purpose of the Program… • The Access/FirstDown provides financing to families and individuals who can afford a mortgage loan but do not have the resources for the down payment and/or closing costs. What the Program provide… • The Access/FirstDown offers financing up to 99.50% designed to increase homeownership opportunities to low-to-moderate income individuals and families in CA. Frazier, Eric, Lawrence Broker Company NMLS 1273606 | Eric L. Frazier Broker NMLS 461708
Why We Need Access / FirstDown Now! • Seller paid DAPs discontinued • County and City DAPs out of funds or limited funds. • State DAP programs take too long and have many restrictions. • Loan programs in general have more restrictive guidelines/products • Low inventory – Higher prices more money • Sellers market – Higher prices and no or limited seller credit • Higher cost of living = Less money to save Frazier, Eric, Lawrence Broker Company NMLS 1273606 | Eric L. Frazier Broker NMLS 461708
Access/FirstDown Program Highlights
Access/FirstDown Program Highlights 1st Loan
2nd Loans
Home Ownership
FHA up to 96.5% Loan to Values
15-Year Fully
Little to no money out of pocket
Amortized 2nd Up to 3% of lower of Sales Price or Appraised Value CLTV up to 99.50%
Frazier, Eric, Lawrence Broker Company NMLS 1273606 | Eric L. Frazier Broker NMLS 461708
Fixed Rate 1st Trust Deed Topic Program Types
Program Description FHA 30 Year Fixed
Max LTV
96.50%
Max CLVT
Loan Purpose
99.50% (Access / FirstDown 1st and 2nd combined) Conforming: Up to $417,000 Jumbo: > $ 417,000 to $625,500 based on county where property is located FHA Loan Limits Purchase
Occupancy
Owner Occupied
Down Payment Assistance
Access / FirstDown 2nd: Can be used to fulfill the borrower’s equity contribution required on FHA 1st Mortgage
Maximum Loan Amount
Frazier, Eric, Lawrence Broker Company NMLS 1273606 | Eric L. Frazier Broker NMLS 461708
Fixed Rate 2nd Trust Deed Topic
Program Description
Program Types
Access / FirstDown 2nd Fixed
Term
15-yrs Fixed-Rate Fully Amortizing
Maximum Loan Amount
Sized up to 3% of the LOWER of the Sales Price or Appraised Value
Interest Rate
8.25%
Max CLTV
99.50% (Access / First/Down 1st and 2nd Combined)
Use of Funds
•
Proceeds may be used for: • DOWN PAYMENT • CLOSING COSTS • Price Adjustments • Up Front or Single Premium MI
•
No cash back to the borrower from the 2nd loan proceeds • Any overage over POCs must be used to reduce principal balance • Any overage over $500 results in redraw of loan documents
Frazier, Eric, Lawrence Broker Company NMLS 1273606 | Eric L. Frazier Broker NMLS 461708
250,000 Purchase Price – Total Down: $1,250 Transaction Summary
%
Purchase Price
Amounts
Debit to close
Credit to close
Amount to close
$ 250,000.00
$ 250,000.00
$ 250,000.00
Estímated Closing Cost
2%
$ 250,000.00
$
5,000.00
$
5,000.00
Upfront MIP Financed
1.75%
$
$
4,221.88
$
4,221.88
4,221.88
Total Amount to closed
$ 259,221.88
Financial Summary
%
Amounts
$ 259,221.88
Debit to close
Credit to close
Access / FirstDown 1st
96.5%
$ 250,000.00
$ 241,250.00
Upfront MIP Financed
1.75%
$ 241,250.00
$
4,221.88
Access /FirstDown 2nd
3%
$ 250,000.00
$
7,500.00
Seller Credit
2%
$ 250,000.00
$
5,000.00
Mínimum Down Payment
0.50%
$ 250,000.00
$
1,250.00
Total Credit to closed
Amount to close
$ 259.221.88 Key Details
Mínimum Down Payment
0.5%
Total Financing 1st & 2nd & MI
3%
Frazier, Eric, Lawrence Broker Company NMLS 1273606 | Eric L. Frazier Broker NMLS 461708
$ 1,250.00 $ 7,500.00
350,000 Purchase Price – Total down $1,750 Transaction Summary
%
Purchase Price
Amounts
Debit to close
Credit to close
Amount to close
$ 350,000.00
$ 350,000.00
$ 350,000.00
Estimated Closing Cost
2%
$ 350,000.00
$
7,000.00
$
7,000.00
Upfront MIP Financed
1.75%
$
$
5,910.63
$
5,910.63
5,910.63
Total Amount to closed
$ 362,910.63
Financial Summary
%
Amounts
$ 362,910.63
Debit to close
Credit to close
Access / FirstDown 1st
96.5%
$ 350,000.00
$ 337,750.00
Upfront MIP Financed
1.75%
$ 337,750.00
$
Access /FirstDown 2nd
3%
$ 350,000.00
$ 10,500.00
Seller Credit
2%
$ 350,.000.00
$
7,000.00
Minimum Down Payment
0.50%
$ 350,000.00
$
1,750.00
Amount to close
5,910.63
Total Credit to closed
$ 362,910,63 Key Details
Minimum Down Payment
0.5%
Total Financing 1st & 2nd & MI
3%
Frazier, Eric, Lawrence Broker Company NMLS 1273606 | Eric L. Frazier Broker NMLS 461708
$ 1,750.00 $ 10,500.00
Program Income & Loan Limits
Program Income Limits 115% of HUD AMI • Riverside
$ 80,155.00
• Orange County
$ 98,780.00
• Los Angeles County
$ 80,155.00
• San Diego County
$ 83,950.00
• San Francisco
$117,185.00
• Santa Clara
$122,245.00
• Contra Costa
$106,835.00
Frazier, Eric, Lawrence Broker Company NMLS 1273606 | Eric L. Frazier Broker NMLS 461708
Program Loan Limits FNMA/FHLMC & HUD Conforming Loan Limit
HUD Loan Limit
• Riverside
$ 417,000.00
• Riverside
$ 335,350.00
• San Bernardino County
$ 417,000.00
• San Bernardino County
$ 335,350.00
• Orange County
$ 625,500.00
• Orange County
$ 625,500.00
• Los Angeles County
$ 625,500.00
• Los Angeles County
$ 625,500.00
• San Diego County
$ 562,350.00
• San Francisco
$ 625,500.00
• San Diego County San Francisco
$ 562,350.00 $ 625,500.00
• Santa Clara
$ 625,500.00
• Contra Costa
$ 625,500.00
• Santa Clara • Contra Costa
$ 625,500.00 $ 625,500.00
Program Qualifying Income Borrower Qualifying Income
Borrower Qualifying Income • Borrower qualifications is based on Qualified repayment Income • Only the Applicants income used for Qualifying is considered in order to meet the program income limits • All income documented that borrower receives on a consistent basis must meets FHA’s Effective income guidelines (2 year history and is likely to continue). – For example: Retirement income, Overtime income, Bonus income, parttime income must have a 2 year history and the likelihood to continue. Frazier, Eric, Lawrence Broker Company NMLS 1273606 | Eric L. Frazier Broker NMLS 461708
Eligibility Guidelines
Eligibility Guidelines • Borrower Eligibility: – Owner Occupied Primary Residence only. – You do not have to be a first time homebuyer to participate in the program – You may own other properties – must meet FHA requirements. – Non occupying Co-borrowers/Co-signers are NOT ALLOWED – Home buyer Education is required. Frazier, Eric, Lawrence Broker Company NMLS 1273606 | Eric L. Frazier Broker NMLS 461708
Eligibility Guidelines • Property Eligibility: – SFR – PUDs – FHA Approved Condos – 2 units – 640 minimum fico and possible higher rate – Manufactured Homes 660 minimum fico for maximum financial
Frazier, Eric, Lawrence Broker Company NMLS 1273606 | Eric L. Frazier Broker NMLS 461708
Underwriting Guidelines
Underwriting Guidelines • Minimum Credit Scores: – Minimum Credit scores 580+ Maximum financials – Zero Score with Non-traditional Trade line: Maximum financial
• Max Debt Ratio: – 43%: Credit scores less than 620 – 45%: Credit Score 620- 659 – 48.9% Credit Score 660+ and higher – 1 month reserves may be required if DU approval is not granted. – No reserves requirement on DU approved loans – DU – Fannie Mae Desktop Underwriter. An automated decision engine that approves loans are refers them an underwriter for approval or denial. Frazier, Eric, Lawrence Broker Company NMLS 1273606 | Eric L. Frazier Broker NMLS 461708
Program Summary
Program Summary • NOT Limited to First Time Home Buyers •
NO “Recapture Tax” if home is sold later
•
NO Sales Price Limits
• Financing available for Down Payment and Closing Costs •
CLTV’s up to 99.50% -little to no money down & no out of pocket closing costs
•
No Minimum Borrower Contribution Required
•
Ratios stretched up to 48.9% DTI
•
2 Units allowed with minimum 640 fico score
•
Manufactured Homes with minimum 660 fico score
•
Buyer or Seller Discount Fees allowed Frazier, Eric, Lawrence Broker Company NMLS 1273606 | Eric L. Frazier Broker NMLS 461708
Access First/Down
Thank you • On behalf of Eric Frazier Mortgage Brokerage and the Power Is Now Radio thank you for joining the Buyers and Sellers Club program today. I hope the information provided will help you achieve the dream of home ownership. • Please read the important legal disclaimer on the last page.
Frazier, Eric, Lawrence Broker Company NMLS 1273606 | Eric L. Frazier Broker NMLS 461708
Disclaimer: • The main purpose of sharing this information is to assist borrowers in understanding the loan programs that are available in the market place. While Eric Lawrence Frazier Mortgage Brokerage, staff, employees, contractors and contributors take care to ensure the accuracy of the content of the loan program information , Eric Lawrence Frazier Mortgage Brokerage, makes no warranties as to the accuracy of the information contained within these materials. Furthermore, every attendee who has received this information uses it understanding that he or she must still conduct his or her own original legal research, analysis and opinion from their legal counsel. All non-legal professionals are urged to seek legal advice from a lawyer. • Eric Lawrence Frazier Mortgage Brokerage specifically disclaims any liability for any loss or damage any participant may suffer as a result of the information contained within this PowerPoint. • While the information contained in this power point presentation addresses guidelines and issues surrounding mortgage programs, this PowerPoint point does not constitute legal advice, nor include all the rules, guidelines and restrictions that are related to the program. All non-legal professionals are urged to seek legal advice from a lawyer. • Upon the completion and submission of a loan application for the Access Program, all the appropriate legal disclosures will be provide at the time. • The Power Is Now Radio is not mortgage company or real estate company but an online radio platform to broadcast and promote information about homeownership.
Frazier, Eric, Lawrence Broker Company NMLS 1273606 | Eric L. Frazier Broker NMLS 461708
Real Estate Broker  CABRE #01143484 CA Mortgage Broker NMLS: 461708 Frazier, Eric, Lawrence Broker Company NMLS 1273606 | Eric L. Frazier Broker NMLS 461708