Mechanics’ Lien

The Mechanics’ Lien law provides special protection to contractors, subcontractors, laborers and suppliers who furnish labor or materials to repair, remodel or build your home.

If any of these people are not paid for the services or materials they have provided, your home may be subject to a mechanics’ lien and eventual sale in a legal proceeding to enforce the lien. This result can occur even where full payment for the work of improvement has been made by the homeowner.

The mechanics’ lien is a right that a state gives to workers and suppliers to record a lien to ensure payment. This lien may be recorded where the property owner has paid the contractor in full and the contractor then fails to pay the subcontractors, suppliers, or laborers. Thus, in the worst case, a homeowner may actually end up paying twice for the same work.

The theory is that the value of the property upon which the labor or materials have been bestowed has been increased by virtue of these efforts and the homeowner who has reaped this benefit is required in return to act as the ultimate guarantor of full payment to the persons responsible for this increase in value. In practice, a homeowner faced with a valid mechanics’ lien may be compelled to pay the lien claimant and then pursue conventional legal remedies against the contractor or subcontractor who initially failed to pay the lien claimant but who himself was paid by the homeowner. Another justification for this result relates to the relative financial strengths of the parties to a work of improvement. The law views the property owner as being in a better situation to absorb the financial setback occasioned by having to pay the amount of a valid mechanics’ lien, as opposed to a laborer or material man who is viewed as being less able to absorb the financial burdens occasioned by not being paid for services or materials provided in connection with a work of improvement.

The best protection against these claims is for the homeowner to employ reputable firms with sufficient experience and capital and/or require completion and payment bonding of the construction work. The issuance of checks payable jointly to the contractor, material men and suppliers is another protective measure, as is the careful disbursement of funds in phases based upon the percentage of completion of the project at a given point in the construction process. The protection offered by mechanics’ lien releases can also be helpful.

Even if a mechanics’ lien is recorded against your property you may be able to resolve the problem without further payment to the lien claimant. This possibility exists where the proper procedure for establishing the lien was not followed. While it is true that mechanics’ liens may be recorded by persons who have provided labor, services, or materials to a job site, each is required to strictly adhere to a well-established procedure in order to create a valid mechanics’ lien.

Needless to say, this is one area of the law that is very complex, thus it may be worthwhile to consult an attorney if you become aware that a mechanics’s lien has been recorded against your property. In the event you discover that a lien has been recorded but no effort has been made to enforce the lien, a title company may decide to ignore the lien. However, be prepared to be presented with a positive plan to eliminate the title problems created by this type of lien. This may be accomplished by means of a recorded mechanics’ lien release from the person who created the lien, or other measures acceptable to the title company.

As in all areas of the real estate field, the best advice is to investigate the quality, integrity, and business reputation of the firm with whom you are dealing. Once you are satisfied you are dealing with a reputable company and before you begin your construction project, discuss your concerns about possible mechanics’ lien problems and work out, in advance, a method of ensuring that they will not occur.

New EPA Rule

EPA New Rule “Lead: Renovation, Repair and Painting Program”

Beginning this month, April 2010, contractors performing renovation, repair and painting projects that disturb lead-based paint in homes, child care facilities, and schools built before 1978 must be certified and must follow specific work practices to prevent lead contamination.

The EPA issued a rule requiring the use of lead-safe practices on April 22, 2008 which is aimed at preventing lead poisoning from risks including common renovation activities like sanding, cutting, and demolition which can create hazardous lead dust and chips by disturbing lead-based paint that can be harmful to adults and children.

After April 22, 2010, federal law will require you to be certified and to use lead-safe work practices. To become certified, renovation contractors must submit an application and fee payment to EPA. Contractors will need to take training with a provider that has been accredited by EPA to provide training for renovators under EPA’s Renovation, Repair, and Painting (RRP) Program.

Accent’s “Give Back Program”

Are you aware of our company’s “Give Back” program?

The way that the program works is……. at closing our clients name a charity (any charity of their choice.)  We then send a $25 donation to that charity in the name of our client.  This is one way that we can personally thank our clients and give back to the community.  Charities that have benefited from this program in the past year include:

  • Tulsa SPCA
  • The Little Lighthouse
  • Broken Arrow Neighbors – Assistance with Dignity
  • Hope Harbor (at risk youths)
  • Make-a-Wish Foundation of Oklahoma
  • CAN (Child Abuse Network)
  • DVIS
  • Family and Children’s Services
  • Wounded Warrior Project
  • Community Food Bank
  • Tulsa Zoo

During times of economic struggle charities need help more than ever.  As an active member of our community, we are proud to be able to help!

Avoiding Financial Stress

By asking the right questions, and knowing exactly what your needs are, you can find the right loan for you. There are certain approaches that you can take while mortgage shopping that can cost or save you money.

It is still true that the better qualifications you have, the lower your interest rate will be. However, there are mortgages available for almost everyone; it’s the interest rates or the down payments that vary.

Before speaking with a lender, know what monthly dollar amount you feel comfortable committing to. Then when you discuss mortgage pre-approval with your lender, it is easier for you to determine the monthly amount and what value of home the monthly amount translates into. Do not put yourself in the position where you will be paying more each month than you intended simply because the “dream” house requires it.

Do your research on the types of mortgages available to you and find the one that best suits your needs. There are a number of considerations to be made in terms of finding the best mortgage for each individual:

*What type of market are you in? Are the interest rates falling or rising?
*Do you want a fixed mortgage rate, where you will always know what your payment is going to be?
*What are your long-term goals? Do you intend to resell the property? Do you only need the mortgage for a short time?

If you need to get in touch with a reputable lender, we can help 665-8559.

Indian Home Loan Guarantee Section 184

Section 184 is a mortgage product specifically for American Indian and Alaska Native families, tribes, Alaska Villages or tribally designated housing entities. Congress established this program in 1992 to facilitate homeownership in Native American communities.

Borrowers can purchase a home with a low down payment, no monthly mortgage insurance and flexible underwriting.

  • 2.25% down payment requirement for loans over $50,000;
  • 1.25% downpayment requirement for loan under $50,000;
  • No monthly mortgage insurance
  • A one-time, 1% loan guarantee fee that can be added to your financed loan
  • HUD underwriters and Loan Guarantee Specialists are familiar with the unique issues and circumstances that Native Americans face when trying to obtain a mortgage in Indian Country.

The Section 184 Loan Provides Numerous Options

  • Purchase of an existing home
  • Construction of a home (stick-built or a manufactured home on a permanent foundation)
  • Rehab loans
  • Purchase and rehab
  • Refinancing (Rate and Term, Streamline, Cash Out)

Getting Started

To qualify for a home loan, it’s recommended (but it’s not mandatory) that applicants first find out if there are homebuyer education classes available through their tribe, housing department and/or in their community.  Homebuyer classes prepare you for the home buying process, so that when you meet with a lender you’ll have a better understanding of what it takes to qualify for a home loan.  To apply for a 184 loan, you must contact a HUD-Approved Section 184 lender.

Call us today 665-8559 and let us help you navigate these waters!

Where Does The Money Come From For Mortgage Loans?

In the “olden” days, when someone wanted a home loan they walked downtown to the neighborhood bank or savings & loan. If the bank had extra funds laying around and considered you a good credit risk, they would lend you the money from their own funds.

It doesn’t generally work like that anymore. Most of the money for home loans comes from three major institutions:

  • Fannie Mae (FNMA – Federal National Mortgage Association)
  • Freddie Mac (FHLMC – Federal Home Loan Mortgage Corporation)
  • Ginnie Mae (GNMA – Government National Mortgage Association)

This is how it works:

You talk to practically any lender and apply for a loan. They do all the processing and verifications and finally, you own the house and now you have a home loan and you make mortgage payments. You might be making payments to the company who originated your loan, or your loan might have been transferred to another institution. The institution where you mail your payments is called the “servicer,” but most likely they do not own your loan. They are simply “servicing” your loan for the institution that does own it.

You see, what happens behind the scenes is that your loan got packaged into a “pool” with a lot of other loans and sold off to one of the three institutions listed above. The servicer of your loan gets a monthly fee from the investor for servicing your loan. This fee is usually only 3/8ths of a percent or so, but the amount adds up. There are companies that service over a billion dollars of home loans and it is a tidy income.

At the same time, whichever institution packaged your loan into the pool for Fannie Mae, Freddie Mac, or Ginnie Mae, has received additional funds with which to make more loans to other borrowers. This is the cycle that allows institutions to lend you money.

What Freddie Mac, Ginnie Mae, and Fannie may do after they purchase the pools, is break them down into smaller increments of $1000 or so, called “mortgage backed securities.” They sell these mortgage backed securities to individuals or institutions on Wall Street. If you have a 401K or mutual fund, you may even own some. Perhaps you have heard of Ginnie Mae bonds? Those are securities backed by the mortgages on FHA and VA loans.

These bonds are not ownership in your loan specifically, but a piece of ownership in the entire pool of loans, of which your loan is only one among many. By selling the bonds, Ginnie Mae, Freddie Mac, and Fannie Mae obtain new funds to buy new pools so lenders can get more money to lend to new borrowers.

And that is how the cycle works.

So when you make your payment, the servicer gets to keep their tiny part, and the majority is passed on to the investor. Then the investor passes on the majority of it to the individual or institutional investor in the mortgage backed securities.

From time to time your loan may be transferred from the company where you have been making your payment to another company. They aren’t selling your loan again, just the right to service your loan.

There are exceptions.

Loans above $227,150 do not conform to Fannie Mae and Freddie Mac guidelines, which is why they are called “non-conforming” loans, or “jumbo” loans. These loans are packaged into different pools and sold to different investors, not Freddie Mac or Fannie Mae. Then they are securitized and for the most part, sold as mortgage backed securities as well.

This buying and selling of mortgages and mortgage backed securities is called “mortgage banking,” and it is the backbone of the mortgage business.

Open House At A Fabulous Home In Tulsa, OK

Saturday 4/24 from 2:00 – 4:00

1752 E. 60th Pl., Tulsa, OK 74105

Great for entertaining, huge open floor plan. Great room with fireplace. Huge sunroom. Totally remodeled. Corian counters, stained concrete floors, newer appliances. Updated bathrooms. Nice in-ground pool w/ deck. Privacy fenced. Must see!