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Recently I had the honor to meet and work with the Brett family.Joshua Brett has served 3 tours in Iraq and will be honorably discharged in a few months. I met his wife Tracy months ago and worked with her to find the perfect home for her family. We looked at almost every home in the town they had their hearts set on and we kept coming back to the first home she saw which was under construction. Josh came home on leave and loved the house as well. Then began the turmoil.
The couple tried to get into several different loan programs and kept being turned away. The reason was that after all Josh and his family gave to his country he was coming home. Financially they were good, credit wise they were good, but darn he actually was coming home. After the last lender turned them down we looked into rentals so they didn't have to take the children out of their current school system. No luck. Tracy called me and she was very upset. I was upset I did'nt know where to turn. This was not just a sale not going to happen this was much more to me. I felt so terrible that this man fought for us, his family endured him being away, they could afford the home and it wasnt going to happen.
Being a recent E-pro graduate I turned to the internet. I Googled mortgages for Veterans in Massachusetts and the first thing that popped up was a PDF file about a brand new program called " Home for the Brave". It was about 8:30 and I said what the heck I am emailing someone right now. I emailed Thomas J. Farmer from Mass Housing, he emailed Goretti S. Joaquim, Mass Housing at 6:40 the next morning and she emailed me by 7:00 that same morning.
She gave me three local banks in my area that were doing the loan. The Brett's contacted First Citizens Federal Credit Union-Terri Machado the next day , July 12th and July 31st they closed on their new home! This was the first Home for the Brave loan in Mass. and I hope it is not the last. Spread the word!
Following is the story of the first Home for the Brave loan in Massachusetts. Published by the Standard Times.
After the lawyer and the paperwork and the wait, there was the smile.
"We are officially the owners," Tracy Brett said to her husband, Joshua, with a lit-from-within smile after they closed on their first home Thursday morning.
The Bretts' first was also a first for MassHousing: They were the first couple in the state to purchase a home through the agency's new "Home for the Brave" program.
The program, which was announced by Gov. Deval Patrick on July 2, gives veterans access to low- or no-down-payment mortgages from participating banks and credit unions.
Sgt. Brett has been in the armed forces for 10 years and has served three tours in Iraq, he said.
"They put their lives on the line to take care of us. It's an honor to be able to do something for them," said Thomas Gleason, MassHousing's executive director.
The Bretts received the mortgage for their Freetown home through First Citizens' Federal Credit Union, one of about 41 financial institutions working with the program across the state.
"This program has put us where we need to be," Sgt. Brett said. "Without it, we'd be renting somewhere."
Although the tail end of the Bretts' housing search was a whirlwind — 18 days from the time they found out about MassHousing's program to their closing — the beginning was anything but.
"It was a process," Sgt. Brett said.
The Bretts started hunting, for a house and a mortgage, in May, they said, and kept running into roadblocks.
Sgt. Brett, who has spent about 33 months over the past six years in Iraq, is receiving an honorable discharge from the Army in January; with his discharge date less than a year away, it looked to banks as if he did not have steady employment, he said.
Two military-oriented banks turned their mortgage application down, he said.
"They didn't even try to assist us in any way," Sgt. Brett said.
Desperation started to set in. Mrs. Brett and her two sons have been living at her parents' home in Freetown; Sgt. Brett is stationed at Fort Drum in upstate New York until his discharge.
Sgt. Brett has a daughter who lives with the couple on weekends.
Rental properties are hard to find in Freetown, Mrs. Brett said, and moving out of the town meant pulling her boys out of the school district.
"When she called me crying, I was crushed," said Dawn Devlin, the couple's real estate agent.
Ms. Devlin thought, "There's got to be something for these people," and so at about 8 one night in early July, she turned to Google.
A search entry of "home loans for veterans in Massachusetts" generated a link to the "Home for the Brave" program. Ms. Devlin sent an e-mail inquiry and the rest, as they say, is history.
Through the program, mortgages have discounted, fixed interest rates for a minimum of 10 years and also have MassHousing's MI Plus mortgage insurance, which covers borrowers' mortgage payments for up to six months if they lose their jobs or are deployed, according to information from MassHousing.
"This certainly makes the mortgage affordable," said Peter Muise, First Citizens' chief executive officer. "The unemployment part takes away a little of the risk."
According to Mr. Gleason, new housing programs can take a while to get off the ground. That the first loan through this program has already closed is a sign the program has hit a chord with veterans across the state, he said.
All the recent negative press about the housing market has made many lenders and investors very nervous, he said, which can lead them to tighten their lending guidelines.
It's harder to get a mortgage than it used to be, he said, and this program is a way to fill the gap for families like the Bretts.
"The joy you get when you buy your first home ... that's a wonderful feeling," he said. "And I think that's only magnified by (the fact that) this is a true homecoming for Sgt. Brett."
About The Home for the Brave Program
• A Home for the Brave mortgage program was developed by MassHousing, the state’s affordable housing bank, in consultation with the Veterans Housing Sub-Committee of the Governor’s Advisory Committee on Veterans Services, which is chaired by Lt. Gov. Tim Murray.
• MassHousing enlisted the partnership of nearly 50 Bay State banks and credit unions to commit nearly $200 million in private funding for the Home for Brave loan program. No taxpayer funds or MassHousing bond funds will be used.
• MassHousing will insure veterans’ loans with its MI Plus™ mortgage insurance, which will allow veterans to receive 100-percent financing with no down payment for single-family homes and condominiums. MI Plus™ will also pay the principal and interest on a veteran’s mortgage for up to six months in the event of a job loss or deployment.
• Borrowers seeking 100-percent financing must complete an approved homebuyer-counseling course.
• A Home for the Brave mortgage offers 97-percent financing for two, three and four-family properties.
• Discounted interest rates fixed for a minimum of 10 years.
• Fannie Mae is providing a $300,000 grant to assist the first 200 veterans who take advantage of the Home for the Brave program. They can receive up to $1,500 each in closing cost assistance. In addition, the loans will be underwritten based on preferred terms provided by Fannie Mae to MassHousing through a special agreement. Veterans will have access to a low- or no-down payment requirement and low mortgage insurance premiums. Where appropriate, Fannie Mae may provide additional liquidity by purchasing eligible loans.
• Disabled veterans can access funds from the U.S. Veterans Administration for accessibility upgrades to their homes.
• Borrowers can earn up to 135 percent of the median income for the city or town in which they are purchasing a home. Income limits vary, but may be as high as $111,240. Home purchase limits will be determined by the buyer’s income level.
• To be eligible for a Home for the Brave mortgage, one must be a veteran as defined under M.G.L. c. 4, sec. 7, cl. 43rd as amended by the Acts of 2005, ch. 130. Borrowers must also have good credit and meet other underwriting standards. (Note: Total housing debt may not exceed 38 percent of gross income and total monthly debt may not exceed 45 percent of gross income).
• Loans must be used to purchase or refinance a primary residence in Massachusetts and Local veterans agents will verify eligible veteran status for the loan program through DD-214 Discharge from Active Duty forms
One of the hardest things as a Realtor I have had to deal with is working with a Seller who had just lost her mom and needed to sell the property she grew up in.
I went to the home to do a CMA and talk. I ended up spending a few hours there and did come away with the listing. During the week before the house went on the market she had the family members come through and take what they wanted for mementos. Then the hard part started.
The home needed some updates however the family members did not have the finances to do huge improvements. We walked through the house, rearranged furniture, and she did some cleaning . I brought paint samples of neutral colors for rooms that needed to be painted and picked up the paint for her. She cleaned the carpets and cleaned out the basement.
During this process family members of mine kept saying aren’t you doing more than you should be as the Sellers Realtor. I realized not only did I relieve some of the stress for the family during their time of grief, but realized I had not only received the commission for the sale but had a feeling I had really made a difference for the better in someone’s life.
I also learned a lot about staging the home for showing. You can do the same for any property. Look around the house. Have them pack things that are not necessary items to have around for a few months(hopefully less time). Explain that you would like to move things around to create a calm atmosphere when potential buyers come in. Don’t be afraid to hurt their feelings. Just let them know not everyone has the same taste and we want to make the home appealing to everyone.
Just to close, if you think you are doing to much for the money you are making realize just like the old saying goes “sometimes money isn’t everything”
A short sale occurs when a property is sold and the lender agrees to accept a discounted payoff, meaning the lender will release the lien that is secured to the property upon receipt of less money than is actually owed.
As a Realtor I suggest that all borrowers call an accountant to discuss tax ramifications and
obtain legal advice from a real estate lawyer.
If we are going to take short sale listings the seller needs to contact their mortgage company/bank and send a letter of authorization giving permission for the Realtor to talk with the parties about the loan. The letter should contain Sellers name, account number, address of property and the agents name, contact information and office information.
· Other information that the bank will need from the seller is a hardship letter.. They need to describe how you they got into this financial bind and makes a plea to the lender to accept less than full payment. Lenders are not inhumane and can understand if you lost your job, were hospitalized or a truck ran over your entire family, but lenders are not particularly empathetic to situations involving dishonesty or criminal behavior.
· Proof of Income and Assets
It is best to be truthful and honest about your financial situation and disclose assets. Lenders will want to know if you have savings accounts, money market accounts, stocks or bonds, negotiable instruments, cash or other real estate or anything of tangible value. Lender are not in the charity business and often require assurance that the debtor cannot pay back any of the debt that it is forgiving.
· Copies of Bank Statements
If your bank statements reflect unaccountable deposits, large cash withdrawals or an unusual number of checks, it's probably a good idea to explain each of those line items to the lender. In addition, the lender might want you to account for each and every deposit so it can determine whether deposits will continue.
· Comparative Market Analysis
Sometimes markets decline and property values fall. If this is part of the reason that you cannot sell your home for enough to pay off the lender, this fact should be substantiated for the lender through a comparative market analysis (CMA). Your real estate agent can prepare a CMA for you, which will show prices of similar homes
o Active on the market
o Pending sales
o Solds from the past six months
We have been dealing with short sales in our office and I believe there will be many more considering the “creative financing” that lenders have been doing for the past few years. For our buyer and sellers we need to be informed and be pro-active
Some of this blog references information from an article by Elizabeth Weintraub