On Monday, I was at the Bakersfield Board of Realtors for their REALTORS® Giving Back, Giving Blood blood drive, sponsored by Houchin Blood Bank; and also donating food for the Christmas Can Tree, sponsored by the Golden Empire Gleaners. For those of you who missed it, The Houchin Blood Bank is on Truxtun Extension, and they are always looking for fresh blood. The Golden Empire Gleaners is a non-profit organization dedicated to helping alleviate hunger and poverty in Kern County. If you would like to donate cans of food or cash you can give directly to the Gleaners or most Real Estate offices can also accept donations for the Christmas Can Tree. For instance, McKinzie Nielsen at 3400 Calloway, where agent Cheryl Pauley is on the Christmas Can Tree Committee.

All this giving of blood made me think of Shylock, who demanded a pound of flesh as collateral for his loan to Antonio, The Merchant of Venice:

Merchant of Venice, Act 1, Scene III

SHYLOCK

This kindness will I show.

Go with me to a notary, seal me there

Your single bond; and, in a merry sport,

If you repay me not on such a day,

In such a place, such sum or sums as are

Express'd in the condition, let the forfeit

Be nominated for an equal pound

Of your fair flesh, to be cut off and taken

In what part of your body pleaseth me.

Of course, after taking out this loan, his ships failed to come in, both figuratively and literally. When they did come in, Shylock still demanded the pound of flesh. Talk about collateral damage! Later, in Act 4 Scene I they wind up in court. I don’t want to spoil it for the people who haven’t read or seen William Shakespeare’s play, but the case revolves on matters of flesh and matters of blood.

Which brings me to an interesting lunch I had with Brenda Gregor and Susan Hedrick of Platinum Home Mortgage. They had many interesting things to say about what is going on in the wonderful world of lending. For instance, there are some great loans and programs available through CalHFA. This is the State of California equivalent of the FHA. I heard them called Chaffa, but that is only a nick name. It is hard sometimes to separate the wheat from the chaff, or the CalHFA from the Chaffa.

Recent volatility in the mortgage market has led to many changes for first-time borrowers. Since the Sub Prime Mortgage Meltdown, we have seen that lots of people were able to get into homes, but the trouble is keeping them. With CalHFA, they maintain rigorous standards of responsible lending to enable borrowers to keep their homes. All of the interest rates are fixed, No ARMs (Adjustable Rate Mortgages) that might suddenly jump, increasing your payment beyond your ability to pay. They require a FICO score of 620 (this may go higher in 2008, so if you are over 620, but under 680, don’t hesitate). They require full documentation. One of the problems with sub prime loans was that you could state your income, and perhaps exaggerate it. This meant that you could really get in over your head, with no way you could really expect to make your payment. The rigorous documentation keeps that from happening, usually. It also allows CalHFA to offer 100% loans, they are one of the few lenders still willing to do so.

Another advantage of the CalHFA loans is HomeOpeners®, a Mortgage Protection Program that costs the borrower nothing but makes up to six mortgage payments for CalHFA borrowers if they lose their job involuntarily, a big safety net that can make a big difference in tough times. 

Though these loans require good credit, there are some extraordinarily low interest rates available. For instance, there are great programs for first time home buyers (and this is if you haven’t bought a home in the past three years), teachers, firemen, police, correction officers, and veterans. Earlier this year congress passed a new law allowing veterans to take advantage of CalHFA’s low interest rates even if they are not first-time homebuyers. For teacher’s, they should check out the Extra Credit Teacher Program (ECTP). 

For details on these and other programs, go to www.calhfa.ca.gov

Or talk to a lender who is familiar with CalHFA.