Posts Tagged ‘CalPERM (State Employees)’

CalPERS Dumps Member Home Loan Program…VITEK Steps up to Fill the Void.

Thursday, January 27th, 2011

The Board of Administration for CalPERS, the largest public employee pension fund in the United States, has voted to suspend the popular CalPERS Home Loan Program for their members. In a press release dated December 13, 2010, George Diehr, Chair of the CalPERS Investment Committee cited limited interest, an increasing number of delinquencies and a changing mortgage marketplace for the move. “This change allows us to redirect our resources and reduce the risk to the Fund”, stated Diehr.

The CalPERS Member Home Loan Program was launched twenty-nine years ago and offered a unique mortgage benefit for members, including, reduced lender fees through Preferred Mortgage Lenders, lower closing costs through participating partners, and a down payment assistance program that allowed members to borrow against their CalPERS retirement system for up to 100% of the down payment required.

VITEK Mortgage Group, a full service Mortgage Bank, has decided to step up to fill the void left by CalPERS, by creating a new and exciting program with many of the same features as those previously offered by CalPERS. This important market segment, which includes police officers, firefighters and other city, county and state workers, has over 1.6 Million active and retired members in California that will now be eligible for these benefits, exclusively available through VITEK Mortgage Group. By teaming up with our industry partners, we can now offer similar reduced lender fees, lower closing costs and down payment assistance programs for CalPERS members. This can amount to substantial savings for CalPERS members on a home purchase or refinance, when compared to other mortgage lenders.

VITEK Mortgage Group is scheduled to roll out this new program around February 1, 2011, at which time more specific details will be made available.

For more details, contact us today.

VITEK Mortgage Group
(866) 787-0300

SPECIAL ALERT: CalPERS Loan Program About to be Eliminated

Tuesday, November 23rd, 2010

A bulletin today from the CalPERS Board of Administration says it is considering the possible suspension of new loans for the Member Home Loan Program (MHLP) including the Secured Personal Loan Program.

According to their bulletin, “Since 2004, MHLP has benefited a small percentage of CalPERS 1.6 million members and retirees. Despite the low percentage, the program has suffered from a rising number of loan defaults, especially with regard to its personal loan feature and increasing resources required to manage the loan program.”

If the CalPERS Board of Administration approves the recommendation to suspend the MHLP, all loan applications currently in the pipeline will be honored but no new applications will be taken.
CalPERS is expected to make a final decision within the next several weeks. Stay tuned with VITEK for more information!

Photo of Philip Duncan
Philip Duncan

Executive Vice President

New Government Lending Regulations – What They Mean to You

Tuesday, August 4th, 2009

It’s no surprise lending and real estate regulations have changed as a result of the credit crisis. We have already seen tightened lending practices that resulted from rising mortgage delinquencies, and now our legislators in Washington have enacted new laws changing the way lenders do business today.

If you are a home buyer or real estate agent, there are two significant pieces of legislation impacting lending that should be considered, especially when determining closing dates for purchase transactions.

Home Valuation Code of Conduct – Now all conventional home buyer loan applications sold to Fannie Mae or Freddie Mac must be compliant to new important changes. In an effort to help safeguard and reinforce appraiser independence and ensure the soundness of appraisals, lenders must be in full compliance with the HVCC. One of the main changes is the manner in which the appraiser is selected and engaged. Under these new regulations, loan originators are not allowed to have any communications with an appraiser to have impact on valuation, and home buyers have the right to “promptly” receive a copy of the appraisal.

The code is intended to reinforce the independence of the appraiser. Lenders no longer have the ability to help facilitate the appraisal process on conventional loans. Because our company VITEK Mortgage Group is not satisfied with the poor performance and appraisal reports we’ve received using the recommended national and regional Appraisal Management Companies, we are about to unveil our solution to better serve our customers with quality and timely appraisals. Expect to receive more in future blogs about our solution. In the meantime, it is important to note that these new regulations DO NOT affect government loan programs such as FHA, VA, CalVET, reverse mortgage, and USDA loan programs. They do affect CalPERS loans and some jumbo home loans.

Housing and Economic Recovery Act – Real estate agents, buyers, and sellers beware. The recently enacted Housing and Economic Recovery Act (HERA) amends and impacts several aspects of obtaining a mortgage, including the disclosures required for borrowers and the timing of their delivery. When applying for a loan, a borrower is provided a Truth in Lending (TIL) statement that details the total expected costs that could be incurred over the life of the loan. Should anything change in the loan application causing the APR to increase more than 0.125%, a new TIL must be reissued to the borrower.

The new rules may adversely affect the minimum time required to close, especially if changes are made to a loan application. When changes are made to the loan application that cause the APR (Annual Percentage Rate) to increase more than 0.125%, re-disclosures are required to be sent to the applicant. There is now a minimum of three business days wait from the time of any re-disclosure to when the borrower can sign their final loan documents which may delay the subsequent closing date. Also, for rush situations now the earliest a loan can close is 7 business days after the initial disclosure is issued! Examples of things that can cause the APR to increase are loan product changes, loan amount changes, interest rate changes, good faith estimate of loan cost changes, and even changes of the planned closing date!

In addition, lenders may not accept any additional fees from a homebuyer until the fourth business day after the initial disclosures have been provided to or mailed to a borrower, other than paying for a credit report. This has the potential to delay several aspects of the application process, especially the appraisal ordering process.

Now more than ever, for peace of mind it is important to work with a lender like VITEK Mortgage Group that understands the new lending rules and acts appropriately to avoid unnecessary delays in your purchase transactions. For starters, we recommend you work with home purchase contracts that have sufficient time frames to account for possible delays if the terms of the loan application are not certain and the interest rate lock is still undone. Also make sure your loan terms are locked at least seven days prior to closing to avoid any unnecessary and time delaying re-disclosure requirements. The new HERA rules do not apply to home refinance loans.

Philip Duncan
Executive Vice President

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