When you’re thinking of purchasing a home, refinancing, or getting a reverse mortgage, you naturally want the interest rate and terms that will be most beneficial to you. In other words, you want to pay the least for the most benefits.

The rip-off artists in the mortgage industry know that, and they’re counting on your trusting nature to keep you from looking too closely at their “money saving” offerings.

Emails, letters, and full-page ads scream promises that sound good, but may not, in fact, be truthful.

Here are a few terms that should cause you take a much closer look before being drawn in:

Low Fixed Rates

All mortgage lenders do offer low fixed rates today, simply because rates are low right now. However, you may see ads touting rates that are ½% or even a full percentage lower than other lenders are offering. Right now rates are right around 3.875% for a 30-year mortgage. Ads promising a 3% fixed rate are actually offering an Adjustable Rate Mortgage which could go to 5% or even higher within just a few months.

How do they get away with it? By using fine print to disclose that the rate is only fixed for a specific number of months. They’re counting on the fact that the print is not only lengthy; it’s so fine that reading it requires use of a magnifying glass. Most people simply won’t try. They’ll just “trust” that the large print is true and they’re getting a 30-year fixed rate.

Government Backed!

Here’s a phrase designed to lull you into a false sense of security when contemplating a reverse mortgage. Sure they’re government backed, but only because nearly all mortgages are held by Freddie Mac or Fannie Mae.

When the phrase is used by elected officials such as former Senator Fred Thompson, it adds yet another level of security.

Meanwhile, unsuspecting consumers believe that they are buying into a government program that will protect them and their interests. In truth, the fine print might reveal terms that are extremely harmful. Sometimes even the true interest rate and actual cost of the loan is buried in fine print.

Tax free!

This is another promise associated with reverse mortgages, and believing it can lead to foreclosure. They make it sound as if the homeowner will never have to pay property taxes again. In most instances, that is the opposite of the truth.

In most reverse mortgages, the homeowner must promise to pay both property taxes and homeowner’s insurance premiums on time. Failure to do so can lead to foreclosure – which might be exactly what a dishonest lender had in mind.

Read the Fine Print

This one is despicably sneaky. They know that if you did read the fine print, you’d turn down the loan. They’re counting on their invitation to read it to reassure you – so that you will, in fact, not read it.

The Federal Trade Commission and the states of Washington and Colorado are going after lenders who use deceptive advertising, but they aren’t finding all of them, and unscrupulous lenders continue the practice.

Protect yourself

• See “too good to be true” ads as a red flag that something is not as stated.
• Do read the fine print. Get a magnifying glass and go over it line-by-line.
• Don’t be pushed – Do your best to get a copy of your final agreement a day or two before closing so you have time to read and digest. Don’t let a lender rush you through reading 8 or 10 pages at the closing table.
• If in doubt, take the document to an attorney to read.

Call on the Mike Clover Group

The Mike Clover Group at Homewood Mortgage has been helping Texas homeowners and home buyers since 2002. We offer the lowest (honest) interest rates and closing costs available in the industry, and we promise timely closings.

Our reputation is based on customer satisfaction that leads to both repeat business and referrals.

You can reach us at 469.621.8484 or you can apply on line at www.mikeclover.com.

Mike Clover

Mortgage Banker

Homewood Mortgage,LLC

O: 469.621.8484

C: 469.438.5587

F: 972.767.4370

18170 Dallas Parkway

Ste. 304

Dallas, TX 75287

NMLS# 23477

Today, many who have attained the American Dream of home ownership are taking it a step farther – and dreaming of owning a vacation home. Many are making that dream come true.

According to the National Association of REALTORS® (NAR), 1.13 million vacation homes were sold in 2014. That’s a 57% increase over 2013, and the highest level since NAR began tracking such sales in 2003. 2015 figures have yet to be released.

While many baby boomers are purchasing vacation homes in locations where they intend to reside after retirement, some who have already retired are purchasing “winter homes” in the sunshine or “summer homes” in the northern climates. Others are opting for a get-away cabin where they can relax on week-ends.

Whatever your choice, if you dream of a vacation home, it’s time to get your finances in top shape.

NAR reported that 70% of vacation home buyers use a mortgage to finance the purchase. If that will also be your choice, here’s what you need to know:

You need good credit. Clients with scores above 720 get the best rates, while scores in the mid-600’s are required if you want to be considered at all.

If a vacation home purchase is in your future, start now to make sure your credit is in order. Get a copy of your credit report and check it for errors. Even FICO admits that a huge percentage of credit reports do contain errors – and some of them can be damaging to your credit.

If your scores could be higher, get to work on raising them long before you’re ready to make a loan application.

You’ll need at least 10% for a down payment. While programs exist to help you own a primary residence with as little as 5% down, lenders want a larger investment when you purchase a second home. For the best interest rates and to avoid mortgage insurance, start saving toward the 20% mark.

You’ll need extra cash on hand. Once the down payment and closing costs have been paid, you’ll need enough left in your accounts to cover two months’ worth of expenses on that second home.

You’ll need enough income to support both properties without exceeding a 43% debt to income ratio. In addition to the monthly cost of mortgages and taxes on both of your homes, your student loans and car payments must total 43% of less of your monthly income. (There can be exceptions to this rule in certain circumstances.)

You can’t claim projected rental income on your second home as an addition to your income. Remember, this is a vacation home and as such it comes under a specific set of guidelines. Investment (rental) properties come under a different, stricter set of guidelines.

When you’re thinking of a vacation home, call the Mike Clover Group.

Here at Homewood Mortgage, the Mike Clover Group, we offer low closing costs combined with the lowest mortgage interest rates possible – whether you’re purchasing villa rentals, a primary home or a vacation home.

We’re always happy to get you pre-approved so you can make purchase offers with confidence, and we’ll be glad to give you pointers on raising those credit scores. Just give us a call at 469.621.8484 or visit us online at www.mikeclover.com.

Mike Clover

Mortgage Banker

Homewood Mortgage,LLC

O: 469.621.8484

C: 469.438.5587

F: 972.767.4370

18170 Dallas Parkway

Ste. 304

Dallas, TX 75287

NMLS# 23477

When you set out to purchase a home you have several financial factors to consider. First, of course, is the price of the home. Next is your mortgage interest rate. Those two factors, together with taxes and insurance, will determine your monthly payment. After that you have to consider Homeowner Association Fees, the cost of repairs and maintenance, and even the cost of commuting.

Today mortgage interest rates are at historic lows, but unless you’ve purchased with your own cash, mortgage loan interest is still the heaviest cost of home ownership. On the other hand, it’s also a tax deduction, which has the potential of putting a few of those dollars back in your pocket.

With mortgage interest, you’re always in arrears…

Just like rent, your mortgage interest is paid monthly. Unlike rent, which is paid in advance, mortgage interest is always paid for the preceding month. Thus, when you look at your monthly statement, the balance due is not the payoff amount. You owe that much on principal plus interest for the previous month. Your monthly interest is calculated on the balance owed, which is why it decreases just a little each month as long as you make your payments on time.

For the first ten years of a thirty-year loan, the lion’s share of your payment will go to pay the past month’s interest. Very little will be applied to the principal. That’s why it’s so easy to “double up” on payments in the early years.

For example: You have a mortgage loan with a payment of approximately $900 per month. A portion of that payment, say $200, will go into escrow to pay your taxes and insurance. Depending upon your interest rate and the age of your loan, about $500 could go to interest, leaving just $200 to reduce your outstanding loan balance. Making a payment of $1,100 rather than $900 would effectively be making two payments rather than one, because that extra $200 would go toward reducing your loan balance.

Good credit scores will make you eligible to pay a lower rate of interest, which will lower your monthly payment (and perhaps make it easier to “double up” on those payments).

It’s always a good idea to check your credit scores before making a loan application. You can do so at no cost to you by visiting www.creditscorequick.com. If your scores are low, take steps to raise them before making application. Here at Homewood Mortgage, the Mike Clover Group, we’re always happy to consult with you and make recommendations for improving your scores.

Refinancing is a good idea, but only if…

If your credit scores and your financial position have improved since you purchased your current home, refinancing into a lower rate is a good idea if the difference is enough to justify the cost of an appraisal and loan fees – and if you plan to stay in the home long enough to benefit. It’s a poor idea if you plan to move within just a few months.

Refinancing doesn’t mean you get a “payment-free” month, even though it might look that way.

When you refinance, your new loan will pay off the principal balance owed plus unpaid interest up to the date of closing.

Whether you close on the 5^th of a month or the 25^th, you’ll pay interest for the entire month.  Say you close on your new loan on May 15. Your lender will add interest from May 1 to May 15 into your loan and pay it off at closing.  Interest from May 15 to May 31 will be added to your closing costs and show as prepaid interest on your closing statement.

You won’t be obligated to make a payment on June 1, so you’ll effectively miss one month of making a payment on the principal balance. You’ll pay interest for the month of June when you make your July 1 payment.

While we do provide borrowers with Loan Estimates and do explain the various costs in advance, closing statements can still be confusing to anyone who is not using them on a daily basis. So never be hesitant to ask questions.

We of the Mike Clover Group are always happy to take the time to explain each item and make sure you fully understand every aspect of your loan before you sign the closing documents.

Call us at 469.621.8484 or visit us at www.mikeclover.com.

Mike Clover

Mortgage Banker

Homewood Mortgage,LLC

O: 469.621.8484

C: 469.438.5587

F: 972.767.4370

18170 Dallas Parkway

Ste. 304

Dallas, TX 75287

NMLS# 23477

Should a friend or family member ask you to co-sign a mortgage loan, the best thing you can do for everyone concerned is to say no.

Let’s assume that it is your brother who has approached you about co-signing…

Why is it the best thing for your brother if you say no?

Do you remember the mortgage crisis? It came about because people who couldn’t afford the homes they wanted were granted loans. If your brother is asking you to co-sign it means his credit is poor or his income isn’t high enough to qualify for the house he wants. Keeping up with payments is likely to be a struggle.

Saying yes is simply setting him up for failure. Saying yes is also making him indebted to you in a way that could easily harm your relationship.

Why is it the best thing for you to say no?

Because co-signing a mortgage loan will completely change your own credit worthiness.  It is technically not your debt, but since you have agreed to responsibility for it, it will go on your credit report.

Because you are now legally obligated to pay an additional sum each month, your debt to income ratio (DTI) will change. If your current debt is $2,000 per month and you earn $6,500, your DTI is .31, or 30%. If the new mortgage payment is $1,000, it would bring your current debt to $3,000 per month and raise your DTI to .46, or 46%.

That will naturally lower your credit scores, and the high debt to income ratio could cause you be denied credit when you need it. If you are granted credit, it will likely be at a higher rate.

Next, if your brother is late with a payment or misses a payment entirely, the black mark will go on your credit record as well as his – and that will lower your credit scores. Are you prepared to monitor the account and make the payments if your brother is unable to do so?

Even worse than the financial impact…

Whether you help your brother out of love, affection, or a feeling of family responsibility, your relationship could be irreparably strained or even destroyed if he fails to meet his obligations. That strain could affect your parents, your other siblings, and even your spouse and children.

Co-signing a loan is really not worth the financial or emotional risk.

Better solutions…

• Help him get his financial life in order and show him ways to cut expenses and put money aside while he builds his credit.
• Encourage him to focus on buying a home he actually can afford.
• Help him research the various programs that assist with closing costs, etc.
• Help him find a mortgage lender with access to a variety of programs.
• If you can afford it, make him a cash gift that will assist with the down payment.

Is it ever wise to co-sign a loan in order to help someone make a purchase or build their credit?

Yes, but only if:

• You’re in a very solid financial position so additional debt won’t reduce your own credit scores.
• The amount is small – as in a used car loan or a credit card with a reasonable limit.
• You’re prepared to monitor the account and make the payments yourself, so they’re never late.
• The reason is to build credit, not to repair credit that has been destroyed.

If you (or your brother) are ready for a home loan, contact Homewood Mortgage, the Mike Clover Group. We offer the best rates and the lowest closing costs you’ll find anywhere – and we’ll be happy to get you pre-approved. Call us at 469.621.8484 or apply on line at www.mikeclover.com.

Mike Clover

Mortgage Banker

Homewood Mortgage,LLC

O: 469.621.8484

C: 469.438.5587

F: 972.767.4370

18170 Dallas Parkway

Ste. 304

Dallas, TX 75287

NMLS# 23477

First, what it does NOT mean is that you’re likely to see an immediate increase in mortgage loan rates.

Mortgage rates are tied to the yield on mortgage-backed securities, which are tied to the yield on the U.S. 10-year Treasury rates. These yields could end up higher or lower in the near future, but it won’t be because the Fed raised the target federal funds rate.

Right now, the majority of home mortgage loans are backed by Fannie Mae, Freddie Mac, and Ginnie Mae. These loans are sold to the Federal Reserve in Mortgage Backed Securities. This has been going on since the financial markets crashed in 2008.

The Fed is not now using “new money” to purchase these securities, but is rolling-over all the income (estimated at $24-$26 Billion per month) into new Mortgage Backed Securities.

What it does mean is that the rate on your existing ARM (Adjustable Rate Mortgage) is likely to increase. Now would be a very wise time to refinance into a fixed rate mortgage.

It also means that auto loans and credit card interest rates are likely to increase.

When it comes to cars, don’t panic. A ¼% rate increase would add only about $3 per month to the payment on a $25,000 car loan.

When it comes to credit cards – now is a good time to pay them off or to take advantage of the “zero rate” or low rate balance transfers you’re offered. Then pay them off.

Does it mean anything to your savings accounts? Probably not. No one expects the banks to share this quarter-percent hike.

Since home mortgage rates could potentially rise in the near future, it does mean that this is a good time to get serious if you’re considering a home purchase.

Rates in the 4% range have become “normal” over the past few years and young buyers especially panic at the idea of paying more.

However, these rates aren’t historically normal. For many decades rates ranged between 8% and 12%, and in the early 1980’s were at 18%. And yes, people still purchased homes. They were simply more conservative in what they paid for the homes they purchased.

By the late 80’s it was considered a triumph to get a home loan at 10% – without paying points.

So, while no potential home buyer wants home mortgage rates to rise, it can probably be considered inevitable at some point in the future.

Do you have an adjustable rate mortgage to refinance before the rates to up? Or, are you considering a home purchase? If so, Homewood Mortgage, the Mike Clover Group will be pleased to help you accomplish your goals. We offer fast closings, along with the best rates and the lowest closing costs you’ll find anywhere. You can reach us at 469.621.8484 or you can apply on line at www.mikeclover.com.

Mike Clover

Mortgage Banker

Homewood Mortgage,LLC

O: 469.621.8484

C: 469.438.5587

F: 972.767.4370

18170 Dallas Parkway

Ste. 304

Dallas, TX 75287

NMLS# 23477

What is a boomerang buyer? A person, or a couple, who lost their home when the real estate bubble popped back in 2006 and is now ready to re-enter the housing market.

A recent study by TransUnion found that approximately 700,000 such former homeowners could become home purchasers within the next year, and more than 2 million more will again become homeowners by 2020.

Whether you can become a boomerang buyer in 2016 depends upon several factors, beginning of course with your current credit rating.

But there is more that will be taken into consideration:

• When did you lose your home?
• Why did that happen?
• What kind of loan can you get?

For a conventional loan the waiting periods are four years after a short sale and seven years after a foreclosure. However, if you qualify for a FHA or VA loan, you may be able to become a homeowner sooner.

You may also be able to get a conventional loan sooner if you lost your last home due to circumstances beyond your control. For instance, the death of a breadwinner, a major health problem that prevented your employment, or loss of a job due to downsizing or a company going out of business. As long as you are now in good shape financially, many lenders will make an exception to the four and seven year rules.

Your credit rating is a major factor, and the higher it is the better your chances not only to get a loan, but to pay the least interest on that loan. Rates naturally fluctuate, but in general, over the course of a 30-year loan on a $200,000 balance, there’s a difference of more than $16,000 in interest that will be paid by a borrower with a 700 score and one with a 760 score.

You’ll also need to show a few years of steady income and a low debt-to-income ratio. So if you’re still waiting for eligibility, stay steady at your job, pay down your debt, and work on raising your credit scores.

Before you go shopping, you’ll need to become pre-approved for a loan. This is far different from the old “pre-qualification” that many lenders did prior to the bubble bursting.  Pre-qualification called for a phone conversation and no documentation.

Pre-approval calls for the same documentation required to approve the loan after you’ve found your new house, and it is stringent. You’ll have to present verification of your income, your assets, and your debts. You may also have to present proof that you’ve paid your rent on time.

If you got your last loan during the time when standards were loose, you may feel overwhelmed by the paperwork and documentation required, but it is necessary and it does, in fact, provide you with some protection from getting in over your head.

Pre-approval is important for two reasons. First, it will tell you what you can or cannot spend on your next home. You won’t waste time looking at homes that are out of your reach. Second, most real estate agents today won’t show you homes without it – and very few home sellers will accept an offer from a buyer who has not been pre-approved.

Unless you qualify for a Veterans’ Administration loan, you’ll also need a down payment.

While “no money down” loans were common before the crash, many lenders today require 20% down for conventional loans. FHA loans can still be obtained for as little as 3.5% down. A study at RealtyTrac showed that in the first quarter of 2015, the average down payment for a home was 15%.

This does vary from lender to lender, and here at Clover Mortgage we’ve been placing a good number of mortgage loans with from 3% to 5% down.

The bottom line is that you will need some cash for a down payment. You’ll also need closing costs, unless you find a seller willing to pay them for you.

If all of this means that you may need to wait a bit before purchasing a home, know that it will be worth it in the long run. When you enter into your next transaction with a down payment and a good credit score you’ll save money.  And… when you’ve been approved for a loan under the new rules of documentation, you’ll be far more secure.

Homewood Mortgage, the Mike Clover Group, offers the best rates and the lowest closing costs you’ll find anywhere – and we’ll be happy to get you pre-approved. So if you’re ready to become a boomerang, call us at 469.621.8484 or apply on line at www.mikeclover.com.

Mike Clover

Mortgage Banker

Homewood Mortgage,LLC

O: 469.621.8484

C: 469.438.5587

F: 972.767.4370

18170 Dallas Parkway

Ste. 304

Dallas, TX 75287

NMLS# 23477

As of October 3, 2015, the new TILA-RESPA Integrated Disclosures (TRID) rule is in effect. Under this rule, lenders are required to provide home buyers with a Closing Disclosure three days prior to their scheduled closing.

This disclosure is intended to give buyers time to double-check that all the details are correct and to get answers to their questions if anything appears not in keeping with what they expected. Should changes be necessary, the three days will begin again – which would delay closing and cause problems/inconveniences for all involved, most especially buyers and sellers.

With that in mind, we offer some “Do’s and don’ts” for obtaining a home loan under the new regulations:

Do: Take time to discuss and compare all of your options with your lender before choosing the loan that best suits your situation. Then make your application.

Don’t: Ask for a loan estimate on a 15 year fixed loan, then change your mind and ask for a 30-year loan a few days before closing.

Do: Fully disclose your income, assets, and liabilities to your lender before making your formal loan application.

Don’t: “Forget” to mention your child support payments or a wage garnishment in hopes that no one will notice these liabilities.

Do: Supply documentation of your income before asking him or her to prepare your Loan Estimate (LE).

Do: Include only verifiable income when asking for a LR.

Don’t: Think you can use the dollars you earned “under the table” to help you qualify for a loan.

Don’t: Wait until after the lender prepares your LE to mention that you haven’t filed Income Taxes for the past four years.

Do: Review the fees and services offered by available title companies before making your choice.

Don’t: Select a title company, then change your mind after the work has begun.

Do: Take your lender’s and agent’s advice with regard to the days required to close your loan and finalize your purchase. Understand that loans take longer to close under the new rules. This is not something your lender can control.

Don’t: Insist on a closing within seven days of your offer acceptance, just because someone on late night TV said it could be done.

Do: Give your lender current email addresses for all borrowers, then check those accounts daily.

Don’t: Furnish an outdated email address or one you check only occasionally.

Do: Carefully read your Closing Disclosure as soon as you receive it. Check for any errors and call your lender immediately if you find discrepancies or have questions.

Don’t: Fail to check your email until the day before closing, then ask your lender to re-schedule the closing because you haven’t had time to examine it.

Do: Understand that your lender MUST send you the Closing Disclosure three business days prior to closing.

Don’t: Ask him or her to make an exception for you because you have things to do and places to go three days from now. TRID is not optional for your lender.

The new regulations have been dubbed “Know before you owe” because they’re designed to ensure that borrowers know exactly what they’re agreeing to before they sign their loan documents.

For a detailed explanation and to view samples of the new Loan Estimate and Disclosures, visit the Consumer Financial Protection Bureau (http://www.consumerfinance.gov/owning-a-home/loan-estimate/)

Here at Homewood Mortgage, the Mike Clover Group, we have always provided accurate estimates and full disclosures to our borrowers, because we have always believed that our borrowers deserve to “Know before they owe.” The only thing the new TRID regulations mean for us is that we’ll be using the government-sanctioned forms and providing the disclosures 3 days prior to closings.

We’d love to help you get the right loan for your financial situation, so call us at 469.621.8484 or apply on line at www.mikeclover.com.

Mike Clover

Mortgage Banker

Homewood Mortgage,LLC

O: 469.621.8484

C: 469.438.5587

F: 972.767.4370

18170 Dallas Parkway

Ste. 304

Dallas, TX 75287

NMLS# 23477

Are you having a hard time finding a house with the size, the design, and the features you want?

Consider having a home built to your own specifications. You’ll not only get a house that suits the way you and your family live; you’ll get a house filled with new systems and appliances, so repairs and replacements will be a few years into the future. And so, it becomes prudent as to where you invest to get the best out of what you have. Seacrest Homes is one such place which offers you the best bargains, with their ultra-luxurious opulence. It pays one to venture carefully and invest in the right kind of place.

There are two ways to go about it:

1. You can purchase a lot (or acreage); choose a floor plan; and choose a builder to put it all together.
2. You can buy into a new subdivision with a builder who will allow you to alter his or her existing floor plans to suit your wants and needs.

With either method, you’ll be able to choose finishes, appliances, cabinets, counter tops, kitchen and bathroom fixtures, windows and doors, flooring, and even the kind of water heater and heating/cooling unit you want.  You can also choose the best contractors, for example there are some Roofing Companies in Houston, so you can pick the one that offers the best services you need. Nowadays you just visit website and make your choice!

Having a custom home built gives you freedom of choice, which is probably why TD Bank’s First-Time Home buyer Pulse reports that one third of consumers looking to buy their first home are considering new construction.

One of the most important things to remember is that your choices, along with any changes to the plans, need to be made at the outset. The builder will base his or her price on the cost of labor and materials, and “Change Orders” for changes that come later are expensive.

It’s important to visualize your new home, and that isn’t easy unless the builder has a model home or two for you to view. So really look at the room dimensions in any plan you’re considering. Then compare those dimensions to the dimensions of the rooms in your current home.

Financing: The first step toward owning a new, custom-built home

Your first step needs to be finding a lender who is familiar with the construction-to-permanent loan process. This is essentially a two-step loan. The first step allows you to make interest-only payments on only the amounts actually paid out to the contractor at various stages during construction.

Meeting with your lender first and getting pre-approved for a loan amount will help you in several ways. First, in addition to choosing the loan product that best suits your situation, your experienced lender will be able to give you guidance regarding the size of the house you can consider and the amenities you can choose. While we’d all like to have every item on our wish lists, finances don’t always make that possible.

Your experienced lender knows the approximate cost of various amenities and will help you balance your wants with your needs to see where best to place your dollars. For instance, will you be happier installing the most expensive windows available, or would you get more enjoyment from a huge covered deck from Porch and Patio of Frederick?

Second, your lender will likely be able to supply you with a list of reputable contractors who have helped his or her clients in the past and who work well with the bank’s policies and procedures.

The bank will have a set procedure in which they pay out a percentage of the contract after verifying that specific parts of construction have been completed. For instance, when the foundation is in or when the framing is complete. (And yes, they do send someone to inspect.) This method protects you from “fly-by-night” builders, since only a solid builder will agree to construct a house under bank financing terms.

Third, when you already have pre-approval for a loan, you can speak with the builder from a position of power. The builder will be more open to talking with you and discussing options when he or she knows you’re not “just dreaming.”

Getting a loan for a “to-be-built” home is different in another way as well.

When you purchase an existing home you agree on a price and the bank sends an appraiser to examine the house, make comparisons to recently sold homes in the neighborhood, and verify that it is worth that price.

When you purchase a “to-be-built” home, the appraiser will study the plans and the materials lists in order to make those comparisons and verify that your agreed-upon price is valid. That’s why it’s so important to make all of your design decisions and materials choices before your contractor submits a proposal. You may strike a deal on AC repair.

When you want a construction loan, turn to Homewood Mortgage, LLC and the Mike Clover Group. At the present time we’re providing financing for more than 3 dozen homes in various stages of construction all across Texas.

We’d love to do the same for you, so call us at 469.621.8484 or apply on line at www.mikeclover.com. If you have questions, we’ll be glad to sit down with you to explain how our construction-to-permanent loans work and let you know what would be needed from you.

Mike Clover

Mortgage Banker

Homewood Mortgage,LLC

O: 469.621.8484

C: 469.438.5587

F: 972.767.4370

18170 Dallas Parkway

Ste. 304

Dallas, TX 75287

NMLS# 23477

While Homewood Mortgage, the Mike Clover Group has been offering low loan origination fees in Texas and Washington for many years, lenders across the country have now started following suit.

In fact, Bloomberg.com reports that in the 12 months ending in June, the average mortgage origination fee fell by 22% nationwide.

Why? In a word: Competition.

Traditional banks are experiencing more and more competition from non-traditional lenders. Borrowers now have more options, so they don’t have to say yes to high fees.

Average costs vary from state to state, and ranged from $874 in Wyoming to $1,208 in Arizona. Our average fee at the Mike Clover Group is lower than the Wyoming average, at $855.

Banks are seeing smaller profits

The competition that drives fees down is coming at a time when banks are facing higher and higher mortgage-lending costs due to the provisions contained in the 1,800 pages of the 2010 Dodd-Frank Act that deal with lending. As each new regulation is implemented, lender’s costs rise and profits fall.

For example: In the first quarter of 2014, banks reported an average profit of $1,654 per loan. By first quarter 2015, that figure had dropped to an average of $1,447.

Even as banks grant more loans, their profits are dropping. Wells Fargo & Co. reported a 1% drop in revenue after a 32% increase in loan originations. JPMorgan Chase & Co. claim a 39% drop in revenue from making and servicing home loans, even as lending increased by 74%.

Non-traditional lenders are taking a bigger share

In June, non-traditional firms accounted for 55% of all mortgage lending in the U.S. – double the share they enjoyed at the end of 2012. In 2006, at the height of the housing boom, the nonbank share was 30%. Stephen Oliner, a resident scholar at the American Enterprise Institute in Washington, appears to be placing blame for the financial crisis on these non-banks, stating that they dominated the market for the sub-prime mortgages and other risky loans.

Now he warns that while these lenders are saving borrowers some money, they create a risk for the taxpayer. He believes that when the next recession hits and some stop paying their mortgages, taxpayers will be on the hook.

Who are these lenders? The list includes peer-to-peer lenders, online firms, and closely held originators such as Quicken Loans, Inc.

Does this mean you’re SURE to get a loan with lower costs?

Absolutely not. What it means is that when you shop around you’ll get a loan with lower costs. Not all lenders have cut their fees, assuming instead that consumers simply won’t ask.

So get in touch

When you want low loan origination fees combined with fast and friendly service, look to the Mike Clover Group at Homewood Mortgage.

Remember, you’ll increase your chances of having your offer accepted when you’ve been pre-approved for a home mortgage loan before you shop. The Mike Clover Group at Homewood Mortgage will be happy to help, so give us a call at 800-223-7409 or visit us at http://www.mikeclover.com/.

Mike Clover

Mortgage Banker

Homewood Mortgage,LLC

O: 469.621.8484

C: 469.438.5587

F: 972.767.4370

18170 Dallas Parkway

Ste. 304

Dallas, TX 75287

NMLS# 23477

The Consumer Financial Protection Bureau (CFPB), which was created as part of the Dodd- Frank and whose very existence has been challenged by conservatives and libertarians since its inception, is once again facing a legal challenge.

In 2012, State National Bank of Big Spring, Texas, along with two D.C. area non-profit organizations, filed suit challenging both the constitutionality of CFPB Director Cordray’s recess appointment, and the CFPB’s authority. Plaintiffs alleged that the Financial Stability Oversight Council (FSOC) created by Dodd-Frank was unconstitutional, and that CFPB’s structure violated the Constitution’s separation of powers.

State National Bank, along with conservatives and libertarians across the land, contend that the Dodd-Frank mandates violate separation of power in that they give the CFPB broad powers, and these powers are largely unchecked by other agencies. It is a bureaucracy without restraints.

In August 2013, the D.C. district court dismissed the lawsuit based on standing and ripeness grounds.

If CFPB thought the challenge was over, they were wrong.

On Friday, July 24, the district court’s decision was reversed by the U.S. Court of Appeals for the D.C. Circuit, when a three-judge panel ruled that the bank does have standing to challenge both the constitutionality of Director Cordray’s recess appointment and the CFPB itself.

The court ruled that State National Bank has the standing to challenge the CFPB’s constitutionality because it is regulated by the DFPB and is thus subject to its authority to impose new restrictions and obligations. The bank alleges that it has been injured by increased compliance costs and a loss of business – directly resulting from the DFPB and the Remittance Rule.

SNB’s standing to challenge the constitutionality of director Cordray’s recess appointment exists for the same reason.

The court noted that Director Cordray was later confirmed by the Senate, but left determination of the significance of that fact to the District Court.

On the Congressional side of the question…

Last week CFPB was the focus of a Judiciary Committee hearing entitled “The Administrative State v. The Constitution: Dodd-Frank at Five Years.”

A number of witnesses testified, among the Professor Neomi Rao of George Mason University School of Law. Professor Rao’s extensive written testimony supports those who believe CFPB is unconstitutional. He stated that “constitutional infirmities have predictably resulted in agency overreach on matters of fundamental importance to the consumer financial marketplace,” and that because of its “super independence and expansive delegated authority, the CFPB’s structure undermines the Constitution’s checks and balances.”

We look forward to a positive outcome from both the lawsuit and Congress. No agency should have unchecked, unregulated powers to create regulations for American citizens – nor should any agency be free from oversight.

Mike Clover

Mortgage Banker

Homewood Mortgage,LLC

O: 469.621.8484

C: 469.438.5587

F: 972.767.4370

18170 Dallas Parkway

Ste. 304

Dallas, TX 75287

NMLS# 234770