Part III:Lender Interview:Dean Wong from First Cap. Mortgage

The following is Part III of an ongoing series of interviews with my Preferred Lender:Dean Wong. His contact info follows the Interview.
Thomas Ray:Dean, how are you these days?
Dean Wong:Thomas, I am great! Hopefully we can help clear up some questions your clients might have with all the new regulations and products.
FHA questions:
1).Thomas Ray:Dean, my clients are showing renewed interest in FHA loans. Can anyone qualify? What is the upfront cost..2%? Are there income restrictions? Do Sellers respond well when they see offers with this loan?
Dean Wong:FHA loans have been around for a long time.  Actually FHA (Federal Housing Authority) has insured more than 37 million home loans for Americans since 1934!  It was primarily designed to help mainly first time homebuyers (even though you do not need to be a first time home buyer anymore) to purchase a primary residence with as little as 3.5% down payment and FICO scores as low as 620.  In the recent past, FHA only accounted for about 3% of home loans originated but now accounts for close to 30%!  The reason Thomas is that a first time homebuyer may not have 15% down payment or a 720 FICO score that a conventional loan requires.  Anyone who can qualify full documentation (pay stubs, W2s, tax returns, bank statements), has a 620 FICO, 3.5% down payment, no federal liens outstanding as is looking to buy a primary residence can qualify for an FHA Loan.  
FHA charges an upfront MIP (Mortgage Insurance Premium) of 1.75% of the base loan amount.  FHA allows this premium to be financed.  Then there is also a monthly MIP until one reaches 20% equity in their home.  The monthly MIP is required for a minimum of 5 years and run 55 dollars a month per every 100k borrowed.  Example for a 300k loan your buyer will have $5,250 for the upfront MIP financed into the loan amount and monthly MIP will be 165/month. 
There are no longer income restrictions either. 
More and more sellers/listing agents are beginning to come around and accepting FHA loans.  Look at it this way – As a seller, all things being equal, FHA financing opens the doors to more potential buyers as again, most first timers do not have 15% or a 720 FICO score.  Sellers shouldn’t be scared of FHA buyers as it’s a full documentation loan so if they are Pre-Approved by a legitimate lender the buyer is just as qualified as a Conventional buyer.
 
Buyer Tax Credit questions:
1)Thomas Ray:The President signed into law some new regs. as they relate to the Buyers Credit. What are the changes and who qualifies now? 
Dean Wong:President Obama recently signed a bill extending the FTHB (First Time Homebuyer’s) tax credit which was due to expire on 11/30/09.  New provisions now include higher income limits as well as allowing “repeat” home buyers to take advantage of the tax credit!  First timers receive 8k and repeat buyers can receive 6.5k now!  I went ahead and attached a nice cheat sheet from NAR (National Association of Realtors) for you and your clients regarding the tax credit bill.  Please call/email or have your clients do the same should you have further questions. 
 
Finding a good lender:
1)Thomas Ray:My clients are worried that choosing the wrong or inexperienced lender could affect their escrow. How could this happen.
Dean Wong:This does happen far too often Thomas.  The lending environment is much more detailed oriented now than ever before.  Buyers should work with a trusted lender that has experience and know how to navigate the lending process from beginning to end.  For example, I’ve seen very often lenders “Pre-Approve” a buyer for X price point without even asking for income data like pay stubs or tax returns!  Problem is that improper expectations are set for a certain price point, you as a realtor show homes in this price point, get the offer accepted, buyer gets into escrow and when it’s time to submit the income data to the underwriter for loan approval, guess what?  Escrow needs to be canceled as the inexperienced lender did not do a good job Pre-Approving the buyer from the get go.  This makes you look bad in the real estate community by representing unqualified buyers and buyers are now discouraged.  They find out their real price point and of course it doesn’t compare to the house they were in escrow on but wasn’t qualified to buy!  Everyone is frustrated. 
 
Thomas Ray:Is using a "Lending Tree" type service a good idea to shop rates?
Dean Wong:It is not Thomas.  Such sites are advertising portals for banks.  A buyer’s information is sold as “leads” to numerous lenders who pay for this information.  A buyer consents to having their credit information run, not once, but as many times as there are buyers of these leads!  It has always astonished me how people ask for referrals for restaurants but when it comes to one’s most important purchase in their lives they look on the internet and are willing to trust someone they do not know.  A buyer should work with someone their trusted realtor, accountant or attorney referred to them.   Or possibly even working with a referral that a friend or family member recently worked with for their loan is okay too if they have glowing reviews about them closing on-time and as quoted. 
But I’d never go blindly into a transaction of this size with someone I found on the internet because the closing costs is say 50 bucks cheaper.  When you refer me a client Thomas, my main goal is to take care of your client to the best of my ability so you and the clients are comfortable in referring others to me.  Unfortunately, someone you may find on the internet who “advertises” a too good to be true rate probably has no allegiance to you or the buyer outside of closing just that one deal.  And unfortunately, what you and I have seen far too often I’m sure is one who fall victim of internet bait and switch advertisement, get too deep into an escrow to cancel and just “takes” the final rate as they really want the home.  It’s a shame.  For me, you and my clients are life long. 
I’ve been in the business close to 9 years now and my client satisfaction rate is 99.3%.  My philosophy is simple – I do what I say and I deliver what I quote on time and with no excuses.  
Thank you Dean!! Your knowledge and passion are unmatched in the industry. I look forward to our next mutually satisfied client.
Please contact Dean Wong and tell him you saw this interview on my Blog:www.RealEstateBlogLA.com
Dean Wong
First Capital Mortgage

Office:310-656-8210 
Cell:310-344-3252
Dean Wong Link
Email: dwong@firstcapitalmtg.com
Please contact Dean AND also use our Mortgage Calculator.
Thomas Ray,M.S.,Realtor
Search the MLS like an agent on my Site:
www.LAexclusiveProperty.com
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www.RealEstateBlogLA.com
Have a great week everybody!!...Tom and Dean