New Conforming Mortgage Guidelines , Effective September 1, 2009

I am re-posting a recent blog from our partner Ed Hollinshead, GHMC; the author of The Wealth Catalyst Report.

The information contained in this blog is very important and essential for you and your clients to understand.

As a reminder, Fannie Mae is rolling out new lending guidelines Tuesday, September 1, 2009.

Starting next week, being approved for a home loan could be much more difficult.

The new rules mark the first major underwriting update since April of this year. The changes are mostly geared at fraud prevention.

Among the updates:

1. Stock options are no longer eligible for "reserves"


2. Relocating families can't use the "trailing" spouse's projected income for qualifying


3. "Tip" income must be documented and verified


4. Lenders must call employers to verify employment


5. Lenders must verify tax transcripts against IRS records

But there are other changes, too. As examples:

1. Owners and buyers of 2-unit homes are subject to new minimum FICOs with larger down payment and equity requirements.


2. Only 70% of stock, bond and mutual fund values may be used as reserves.


3. Only 60% of retirement assets may be used as reserves.

Consider this post to be your advance warning. Not everyone that qualifies for a mortgage on Monday, August 31 will qualify on Tuesday, September 1.

Therefore, if you have a pending need for a mortgage -- for either a purchase or a refinance -- it's probably best to talk with a lender as soon as possible. The deadline is based on the date of application -- not the date of closing.

Read the complete Fannie Mae announcement online.

Do You Have a Social Networking Stragegy?

As many of our followers know, Real Finance Solutions is a proponent of leveraging Social Networking principles as a means to grow and manage your business. Successful implementation begins with an understanding of the main uses of Social Networking and developing your strategy.

Until now, we have focused on the various tools and platforms of Social Networking. Today, I would like to discuss the main uses of this business strategy. First, Social Networking provides an ideal platform for building and organizing your team. As you on-board new members to your team, one of your first objectives should be to educate them on the values of Social Networking, and if they are not currently using these tools, be sure introduce Facebook, LinkedIN, Twitter, etc. Every member of your team should be connected to you, Real Finance Solutions, and each other in order to leverage the shared knowledge and experiences of the entire network.

Second, Social Networking enables your team to organize around a project and work together for shared success on a particular strategy or objective. Team members can collaborate with one another and stay updated on each other progress as you move forward.

Third, and possibly most important, Social Networking allows you to build a knowledge base for your clients. Every member of your team bring special attributes and experiences that will contribute to addressing the following question; "Will I have the answer?" You need to remain focused on being a resource to answer your clients questions as they arise.

I strongly encourage you to make Social Networking a significant part of your business and engage every member of your team to follow this path to future success.

The Nutter Burger.....

So much for economic news and tips for our clients to improve their financial lives; today we are unveiling the making of the Nutter Burger; and the most outrageous hamburger preparation I have found in a long time.

Be careful, carrying the ingredients to the grill may require a small vehicle; but it is worth the effort.

Start with a 1/2 pound burger and introduce the following ingredients, liberally, to the top-side (ONLY) once the meat hits the cooking surface:

1. Splash Louisiana's favorite; Crystal Hot Sauce, across the entire surface of this meat lovers masterpiece;

2. Follow with a second liquid infusion of Lea & Perrins Worcestershire Sauce;

3. Close your eyes and sprinkle Tones Garlic Pepper to your heart's content;

4. Don't be shy with the application of Cajun Spice;

5. As if the Cajun Spice was not enough; follow up with some pure ground Cayenne Pepper to bring natural health benefits to your burger experience;

6. No grilling event is complete without Lawry's Seasoned Salt;

7. Introduce the sweet flavor and warm aroma of Sweet Basil as though you were grilling Southern European style;

8. In honor of the Southern European influence, add a dash of Italian Seasoning to each burger;

9. Top everything off with some Smoke Flavors; don't go crazy here....just a pinch will do;

10. I love cheesburgers, but resist the temptation to add any cheese to this burger; enjoy the purity of your work of art.

The Nutter Burger is being introduced to the general population after years of feeding travel baseball teams across Northeast Ohio. Chef Rod Nutter, complete with a classic Bull Durham accent, shares hours of baseball stories while he diligently prepares the coals in the iron grill that has been called upon for the past 15-years to deliver this work of art.

Chef Rod said, "I never leave home without my Nutter-Bag of blends and spices; and can't think of a better place to enjoy one of these burgers than at a baseball diamond on a summer afternoon."

We couldn't agree more and vow to continue the tradition of the soon-to-become famous Nutter Burger.

Jobless Rate Improves - Rates May Move Up......

The unemployment rate improved this morning as U.S. job market showed signs of improvement. The unemployment rate dropped to 9.40%, the lowest rate since August, 2008, according to the U.S. Labor Department. The Labor Department report released this morning reported a net loss of 247,000 jobs in July, less than expected.

What does this mean for interest rates? We may see rates inch up slightly on this news because positive economic data leads to investment into the stock market; which takes away investment in the Bond market. As we have discussed in the past, Bond market activity is directly related to the movement of interest rates.

What to loo for moving forward........ Any rate increase should not be significant, however, clients that are not yet locked and may be closing in the next couple of weeks may be at risk of a slightly higher interest rate than they expected. Rate movement may lead to an increase of .25% to .375% in the interest rates being quoted in the market place.

Real Finance Solutions is dedicated to bringing you up to date market data that will allow you to keep your clients informed of news that effects their bottom line.

Educate, Educate, Educate.......

With more and more first time homebuyers entering the market, we can never overlook the importance of educating them on the real estate world they are about to enter. From the very moment they find their dream home, our clients are staring down the barrel of a process they have no idea how to manage. This is where we come in.......

As RFS professionals, it is our mandate to prepare our clients and provide them counsel in order to understand the entire real estate process. Does this mean WE have to be experts in every aspect of real estate, mortgage lending, and title; NO, but we need to rely upon the experts in these fields to help navigate the process.

Get to know the lenders in our network; understand what they bring to the table. Many of our lending partners have multiple years of experience behind them, understand the totality of our industry, and are eager to help you build your business. The good ones know how to research and find answers to questions they don't have answers to.

Not a licensed Realtor? Build a team around you of knowledgeable real estate professionals that understand the market and requirements of buying and selling homes. The same applies for our title company partners; stuff happens at the closing table that has an effect on real estate transactions on a daily basis. Get to know these professionals and leverage their knowledge.

Remember, our partners are seeing a multitude of transactions and are exposed to a full range of unique situations with each and every client they touch. Think of our partners as giant databases. With every transaction comes a learning experience and we need to access the collection of data that they are exposed to.

The bottom line is that every successful transaction is the result or preparation and planning. Take the initiative and begin tapping into the vast knowledge and resources our partners have to offer.

Home Sales Rise - Lifting Interest Rates

The National Association of Realtors (NAR) announced that pending sales of existing home rose 3.60% in June, recording a fifth straight monthly gain. NAR's Pending Home Sales Index (PHSI) is released during the first week of each month and is designed to be a leading indicator of housing activity.




The latest news on housing activity caused the price on 10-Year Treasury Notes to drop, sending yields to their highest levels in more than six weeks. As the price of Treasury Securities falls, the yield increases; which is reflected in an increase in mortgage interest rates. Typically positive economic data of this nature will result in a "sell-off" of securities, causing the price to drop and rate to increase.



It is very important to understand that the 10-Year Treasury is NOT the leading indicator of mortgage rates. Mortgage professionals monitor the activity of the 30-Year Treasury Bond; however, the 10-Year is often quoted in news releases and it's activity is readily available in general market reports. The 30-Year Bond was trading significantly lower on the housing data.



Overall, the housing data is viewed as an indication that the struggling U.S. housing market may be reaching its bottom level. Furthermore, this news may be a sign that home prices will be back on the rise soon as inventory shrinks. It is quite possible that we may see a "sellers" market again in the near future; the time to buy is now while home prices and interest rates enjoy lower levels.

Real Finance Solutions Update

Good Monday Morning.

Real Finance Solutions just completed a explosive month of growth and I want to share some of our July highlights with you.

• We have added 26 new RFS Consultants to our network; which now stands at 111 strong!


• Team Building Leaders: Jose Bautista (Fremont, CA) has added 10 new team members and Steve Carter (Columbus, OH) has added 6 new team members


• Business Development Leaders: Cody Ann Moran (Atlanta, GA) has submitted 8 new transactions and Johnny Mosley (Detroit, MI) has submitted 7 new transactions.

I am also excited to announce that we will be bringing you a Weekly Update from Real Finance Solutions at the close of business each Friday beginning August 7. Our Weekly Update will keep you informed on the growth of our network as well the activities of our business leaders. In addition, we will we will include an RFS Focus where we will introduce you to the rising stars in our network and provide a forum to share our success stories with one another.

Thank you for an amazing July and we look forward to the continued growth and success of our network as a result of our dedicated RFS Consulting Team!