Blog | DDA Mortgage

🟩 1. FHA Streamline Refinance Purpose: Simplify refinancing for homeowners who already have an FHA loan — lowering their rate or switching from an ARM to a fixed rate with minimal paperwork and cost. Key Features: No income verification usually required No appraisal required in most cases (uses the original home value) Limited credit check — just to confirm good payment history Must benefit financially (lower rate, lower payment, or move to a more stable loan) Basic Rules: You must already have an FHA-insured loan No late payments in the past 12 months At least 6 months must have passed since your current FHA loan was opened The refinance must result in a “net tangible benefit” — meaning it improves your financial situation Appraisal Waiver: Most FHA Streamlines don’t require an appraisal at all — it’s based on the original value when the loan was made. 👉 So, the loan amount can’t exceed your current unpaid principal balance plus upfront MIP (mortgage insurance premium). 🟦 2. VA Streamline Refinance (IRRRL) (IRRRL = Interest Rate Reduction Refinance Loan) Purpose: For veterans, service members, or eligible spouses who already have a VA loan, this program allows them to lower their rate quickly and cheaply. Key Features: No appraisal required (uses prior VA loan value) No income or employment verification Limited or no out-of-pocket costs (can roll costs into new loan) No cash-out allowed — it’s only to reduce the rate or switch from ARM to fixed Basic Rules: Must have an existing VA-backed loan Must show a net tangible benefit (like lowering monthly payment or rate) Must be current on mortgage payments Appraisal Waiver: VA Streamlines typically waive the appraisal entirely, meaning your home value isn’t rechecked. This makes the process much faster and easier. 🟨 3. The “90% Appraisal Waiver” Explained This term often shows up when: A lender chooses to order an appraisal, but wants to use an automated value system (AVM) or When the lender uses an appraisal waiver (like through FHA/VA automated systems) up to 90% of the home’s current estimated value. In practice: It means the lender or agency allows the loan amount to be up to 90% of the home’s estimated value without a full appraisal. It’s a type of limited-value check — often used when rates are being lowered and no cash-out is being taken. It helps borrowers avoid delays and costs tied to a new appraisal. Example: If your home’s estimated value (per AVM or prior appraisal) is $400,000, a 90% waiver means your loan can go up to $360,000 without needing a new appraisal. ✅ Summary Com  tune in and learn https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329

Here are alternative ways to qualify for a mortgage without using tax returns: 🏦 1. Bank Statement Loans How it works: Lenders review 12–24 months of your business or personal bank statements to calculate your average monthly deposits (as income). Used for: Self-employed borrowers, business owners, gig workers, freelancers. What they look at: Deposit history and consistency Business expenses (they’ll apply an expense factor, usually 30–50%) No tax returns or W-2s required. 💳 2. Asset Depletion / Asset-Based Loans How it works: Instead of income, your assets (like savings, investments, or retirement funds) are used to demonstrate repayment ability. Used for: Retirees, high-net-worth individuals, or anyone with substantial savings but limited current income. Example: $1,000,000 in liquid assets might qualify as $4,000–$6,000/month “income” (depending on lender formula). 🧾 3. P&L (Profit and Loss) Statement Only Loans How it works: Lender uses a CPA- or tax-preparer-prepared Profit & Loss statement instead of tax returns. Used for: Self-employed borrowers who can show business income trends but don’t want to use full tax documents. Usually requires: 12–24 months in business + CPA verification. 🏘️ 4. DSCR (Debt Service Coverage Ratio) Loans How it works: Common for real estate investors — qualification is based on the property’s rental income, not your personal income. Formula: Gross Rent ÷ PITI (Principal + Interest + Taxes + Insurance) DSCR ≥ 1.0 means the property “covers itself.” No tax returns, W-2s, or employment verification needed. 💼 5. 1099 Income Loan How it works: Uses your 1099 forms (from contract work, commissions, or freelance income) as income documentation instead of full tax returns. Used for: Independent contractors, salespeople, consultants, etc. Often requires: 1–2 years of consistent 1099 income. Higher down payment and interest rate required. tune in and learn https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329 

A third mortgage is an additional loan secured by the same property after a first and second mortgage already exist. It’s essentially a third lien on the property, which means it’s in third place to be repaid if the borrower defaults — making it riskier for lenders. Because of this higher risk, third mortgages typically: Have higher interest rates, Offer smaller loan amounts, and Require strong borrower profiles or solid property equity. 🤖 How AI Is Transforming 3rd Mortgage Lending AI tools can make offering third mortgages much more efficient and lower-risk by handling the data-heavy analysis that used to take underwriters days. Here’s how: 1. AI-Powered Lead Generation AI platforms identify homeowners with significant equity but limited cash flow — ideal candidates for third liens. Example: AI scans property databases, loan records, and credit profiles to spot someone with 60–70% total combined LTV (Loan-to-Value). The system targets those borrowers automatically with personalized financing offers. 2. Smart Underwriting AI underwriters use advanced algorithms to evaluate: Combined LTV across all liens, Income stability and payment history, Real-time credit behavior, Local property value trends. This allows the lender to make quick, data-backed decisions on small, higher-risk loans while keeping default rates low. 3. Dynamic Pricing AI adjusts rates and terms based on real-time risk scoring — similar to how insurance companies use predictive pricing. For example: Borrower A with 65% CLTV might get 10% APR. Borrower B with 85% CLTV might see 13% APR. 4. Automated Servicing and Risk Monitoring Post-funding, AI tools can monitor the borrower’s financial health, detect early signs of distress, and even suggest restructuring options before default risk rises. 💡 Why It’s Appealing Opens a new revenue stream for lenders and brokers, Meets demand for smaller equity-tap loans without refinancing, Uses AI automation to keep costs low despite higher credit risk, Attracts tech-savvy borrowers seeking quick approvals. tune in and learn https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329

Great question — the 10-year U.S. Treasury Note (T-Note) is one of the most important benchmarks in finance, and it’s tightly linked to interest rates. Here’s a breakdown of how it works and why it matters: 1. What the 10-Year Treasury Is It’s a bond issued by the U.S. government with a maturity of 10 years. Investors buy it, loaning money to the government in exchange for: Semiannual coupon payments (interest), and The face value back at maturity. Because it’s backed by the U.S. government, it’s considered one of the safest investments in the world. 2. Yield vs. Price The yield is the effective return investors earn on the bond. The yield moves inversely with the bond’s price: If demand is high and price goes up → yield goes down. If demand falls and price goes down → yield goes up. 3. Connection to Interest Rates The 10-year Treasury yield reflects investor expectations about: Future Federal Reserve policy (Fed funds rate). Inflation (higher inflation expectations push yields higher). Economic growth (slower growth often pushes yields lower). While the Fed directly controls only the short-term Fed funds rate, the 10-year yield is market-driven and often moves in anticipation of where the Fed will go. 4. Why It’s So Important Mortgage rates & lending costs: 30-year mortgage rates generally move in step with the 10-year yield (plus a spread). If the 10-year goes up, mortgage rates usually rise. Benchmark for global finance: Companies, governments, and banks often price loans and bonds based on the 10-year yield. Risk sentiment: Investors flock to Treasuries in times of uncertainty, driving yields down (“flight to safety”). 5. Practical Example Suppose the Fed raises short-term rates to fight inflation. Investors expect tighter policy and possibly lower inflation later. If they believe inflation will fall, demand for 10-years might rise → yields drop. But if they fear inflation will stay high, demand falls → yields rise. Mortgage rates, business loans, and even stock valuations all adjust accordingly. ✅ In short: The 10-year Treasury is the bridge between Fed policy and real-world borrowing costs. It signals market expectations for growth, inflation, and Fed moves, making it a crucial guide for interest rates across the economy. tune in and learn https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329 

Speed & Efficiency AI Underwriting: Processes applications in seconds to minutes. 1.Can instantly pull data from multiple sources (credit reports, bank statements, income verification, property valuations, etc.). Ideal for high-volume, standardized cases. Human Underwriter: Takes hours to days, depending on complexity. Manually reviews documents, contacts third parties, and applies professional judgment. Slower, especially for complex or edge cases. 2. Data Handling AI: Uses algorithms and machine learning to analyze massive datasets. Can detect patterns humans might miss (e.g., spending behavior, alternative data like utility payments, even digital footprints in some markets). Human: Relies on traditional documentation (pay stubs, tax returns, appraisals). Limited by human bandwidth—can’t process as much raw data at once. 3. Consistency & Bias AI: Decisions are consistent with its rules and training data. However, if the data it’s trained on is biased, the system can replicate or even amplify those biases. Human: Brings subjective judgment. Can weigh special circumstances that don’t fit a neat rule. Risk of inconsistency—two underwriters might interpret the same file differently. May have unconscious bias, but also flexibility to override rigid criteria. 4. Risk Assessment AI: Excels at quantifiable risks (credit scores, loan-to-value ratios, historical claim data). Weak at unstructured or nuanced factors (e.g., a borrower with an unusual income stream, or a claim with unclear circumstances). Human: Strong at contextual judgment—understanding unique borrower situations, exceptions, or “gray areas.” Can pick up on red flags that an algorithm might miss (e.g., forged documents, conflicting information). 5. Regulation & Accountability AI: Regulators are still catching up. Requires transparency in decision-making (explainable AI). Hard to appeal an AI decision if it can’t explain its reasoning clearly. Human: Provides a clear chain of accountability—borrower can request explanations or escalate. Easier for compliance teams to audit decision-making. 6. Cost & Scalability AI: Scales cheaply—one system can process thousands of applications simultaneously. Lower ongoing labor costs once implemented. Human: Labor-intensive, costs grow with volume. Better suited for complex, high-value, or unusual cases rather than mass processing. ✅ Bottom line: AI underwriting is best for speed, scale, and straightforward cases. Human underwriters are best for nuanced judgment, exceptions, and handling edge cases. Most modern institutions use a hybrid model: AI handles the bulk of simple files, while humans step in for complex or flagged cases. tune in and learn https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329

A new survey from Clever Real Estate shows that 61% of baby boomer homeowners say they “never” plan to sell their homes, a jump of 7 percentage points from 2024. The main reason? More than half want to age in place. That’s a big shift. Baby boomers now make up the largest share of U.S. homeowners, and if more than 6 in 10 say they’ll “never” sell, that has ripple effects: Inventory squeeze : With fewer boomers putting homes on the market, younger buyers have less supply to choose from, which can keep prices elevated. Aging in place trend : The desire to stay put often means investing in accessibility upgrades—things like stair lifts, walk-in showers, and smart home tech for safety. Generational divide : Millennials and Gen Z face higher borrowing costs and limited starter-home availability, while boomers are holding onto larger family homes longer. Long-term planning : Some experts note that many of these homes will eventually transfer through inheritance rather than sales, changing how housing stock re-enters the market. Didier Malagies nmls212566 DDA Mortgage nmls324329

Excited to share a major update that will make the homebuying process more secure and less stressful. President Donald Trump recently signed the Homebuyers Privacy Protection Act of 2025 into law. This bill is a significant victory for the real estate industry, as it directly addresses the problem of unwanted calls, texts, and emails that often flood clients upon mortgage application. What's Changing? For years, many borrowers have experienced a barrage of unsolicited contact from different lenders immediately after their mortgage application. This happens because of "trigger leads"—a process where credit reporting agencies sell information to other companies once a credit inquiry is made. Effective March 5, 2026, this new law will put a stop to this practice. It will severely limit who can receive client contact information, ensuring client privacy is protected. A credit reporting agency will only be able to share trigger lead information with a third party if: • Clients explicitly consent to the solicitations. • The third party has an existing business relationship. This change means a more efficient, respectful, and responsible homebuying journey. We are committed to a seamless process and will keep you informed of any further developments as the effective date approaches. In the meantime, you can use the information below to inform clients how to proactively protect themselves from unwanted solicitations.  Opting Out: • OptOutPrescreen.com: You can opt out of trigger leads through the official opt-out service, OptOutPrescreen.com. • Do Not Call Registry: You can also register your phone number with the National Do Not Call Registry to reduce unsolicited calls. • DMA.choice.org: For mail solicitations, you can register with DMA.choice.org to reduce promotional mail. tune in and learn https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329

We're excited to share a major update that will make the homebuying process more secure and less stressful. President Donald Trump recently signed the Homebuyers Privacy Protection Act of 2025 into law. This bill is a significant victory for the real estate industry, as it directly addresses the problem of unwanted calls, texts, and emails that often flood clients upon mortgage application. What's Changing? For years, many borrowers have experienced a barrage of unsolicited contact from different lenders immediately after their mortgage application. This happens because of "trigger leads"—a process where credit reporting agencies sell information to other companies once a credit inquiry is made. Effective March 5, 2026, this new law will put a stop to this practice. It will severely limit who can receive client contact information, ensuring client privacy is protected. A credit reporting agency will only be able to share trigger lead information with a third party if: • Clients explicitly consent to the solicitations. • The third party has an existing business relationship. This change means a more efficient, respectful, and responsible homebuying journey. We are committed to a seamless process and will keep you informed of any further developments as the effective date approaches. In the meantime, you can use the information below to inform clients how to proactively protect themselves from unwanted solicitations. Opting Out: • OptOutPrescreen.com: You can opt out of trigger leads through the official opt-out service, OptOutPrescreen.com. • Do Not Call Registry: You can also register your phone number with the National Do Not Call Registry to reduce unsolicited calls. • DMA.choice.org: For mail solicitations, you can register with DMA.choice.org to reduce promotional mail. Didier Malagies nmls212566 DDA Mortgage nmls324329