Lock Advice: FLOAT With CAUTION The Float with Caution recommendation is because rates have been down for a while and they almost always adjust in the other direction after a long run. MBS prices are up +6/32 and it is possible to see some rate improvement this morning. Consumer Confidence came in higher than expected.
RATE NOTES: When MBS prices are up, Rates are down. Lock advice can change throughout the day . Good economic news = Bad Rate News.
National Average Fixed Rate Mortgage Down 0.01% at 4.96% on Nov.24
Fannie Mae Mortgage Backed Securities MBS Opened at 4.447% Down 0.074%.
10 Year Treasury Currently 3.330% Down -0.04%
DJI Stocks $10,419.88, Down -31.07, -0.3%
European and Asian Markets Down -0.733%
Nymex Crude Oil Currently $75.92 Down $1.64
Take 5 minutes to watch this humorous and educational video... The big bailout banks find another way to rip off the consumer ... just in a nick of time for them, but not for us. See TBWS Video
Rates 11-24-09, 8:00 AM PT 30 Year Fixed to $417,000 Rate 4.500% Point 1.000, APR 4.647% APR Based on $350,000 Loan at 80% LTV Above Rate can be locked for 30 days. Call for Quotes on FHA and VA loans With Detailed Good Faith Estimates. No Application or Credit Report required
Education is the ONLY Effective Consumer Protection
Lock Advice: FLOAT With CAUTION The Float with Caution recommendation is because rates have been down for a while and they almost always adjust in the other direction after a long run. MBS prices are Up 4/32. Some rate improvements may be possible. Existing Home Sales were stronger than expected.
RATE NOTES: When MBS prices are up, Rates are down. Lock advice can change throughout the day . Good economic news = Bad Rate News.
National Average Fixed Rate Mortgage Down 0.01% at 4.98% on Nov.20
Fannie Mae Mortgage Backed Securities MBS Opened at 4.521% Up 0.009%.
10 Year Treasury Currently 3.380% Up 0.02%
DJI Stocks $10,452.91, Up 134.75, 1.31%
European and Asian Markets Up 1.773%
Nymex Crude Oil Currently $78.85 Up $1.38
Take 5 minutes to watch this humorous and educational video... The big bailout banks find another way to rip off the consumer ... just in a nick of time for them, but not for us. See TBWS Video
Rates 11-23-09, 8:00 AM PT 30 Year Fixed to $417,000 Rate 4.500% Point 1.250, APR 4.665% APR Based on $350,000 Loan at 80% LTV Above Rate can be locked for 30 days. Call for Quotes on FHA and VA loans With Detailed Good Faith Estimates. No Application or Credit Report required
Education is the ONLY Effective Consumer Protection
Elimination of FHA Condominium Spot Approval Delayed Again.
Lender spot approval was scheduled to end after several delays on December 7, 2009, the elimination of condominium spot approval has been delayed until February 1, 2010. FHA Mortgagee Letter 2009-46 B
Implementation of FHA new condominium project approval process will be in effect December 7, 2009. It was originally to go into effect on October 1 then delayed until November 2, 2009. So if December 7, (an auspicious date indeed) is the date then at that time certain individual lenders will begin to approve condominium projects.
FHA Mortgagee Letters 2009-46 A describe the new approval process in detail.
Below are the questions needed for a FHA condo spot approval up to February 1, 2010
FHA Condo Spot Approval Check List
_______ 1. The legal documents of the homeowners association do not contain a right of first refusal or restrictive covenant.
_______ 2. The unit is part of a condominium regime that provides for common and undivided ownership of common areas by unit owners.
_______ 3. The project, including the common elements, and those of any Master Association, are complete, and the project is not subject to additional phasing or annexation.
______ 4. (a) There are no special assessments pending.
______ (b) No legal action is pending against the condominium association, or its officers or directors.
______ 5. The common areas have been under the control of the homeowners association for at least one year.
______ 6. At least 90 percent of the total units in the project have been sold.
______ 7. At least 51 percent of the total units in the project are owner-occupied.
______ 8. There are no adverse environmental factors affecting the project as a whole or individual units .
______ 9. No single entity owns more than 10 percent of the total units in the project.
______ 10. The units in the project are owned in fee simple or the units are held under a leasehold acceptable to FHA.Leasehold in file.
______ 11. The owners association has adequate common area insurance coverage. General liability, replacement coverage, etc. reflects the character, amenities and risks of the particular development. Flood and other insurances carried, when applicable.
______ 12. General maintenance level of common elements is acceptable and there is no deferred maintenance, based on the comments by the Appraiser and/or the pictures.
______ 13. The owners association has a reserve plan and a reserve fund, separate from the operating account, that is adequate to prevent deferred maintenance. The amount of the fund is $_________ as of __________.
_______14. (a) For projects consisting of over 30 units, no more than 10 percent of the total units are encumbered by FHA insured mortgages.
_______ (b) For projects consisting of 30 units or less, no more than 20 percent of the total units are encumbered by FHA insured mortgages.
Elimination of FHA Condominium Spot Approval Delayed Again.
Lender spot approval was scheduled to end after several delays on December 7, 2009, the elimination of condominium spot approval has been delayed until February 1, 2010.
Implementation of FHA new condominium project approval process is delayed again to December 7, 2009. It was originally to go into effect on October 1 then delayed until November 2, 2009. So if December 7, (an auspicious date indeed) is the date then at that time individual lenders will begin to approve each condominium project.
FHA Mortgagee Letters 2009-46 A and 2009-46 B describe the new approval process in detail.
Below are the questions needed for a FHA condo spot approval up to February 1, 2010
FHA Condo Spot Approval Check List
_______ 1. The legal documents of the homeowners association do not contain a right of first refusal or restrictive covenant.
_______ 2. The unit is part of a condominium regime that provides for common and undivided ownership of common areas by unit owners.
_______ 3. The project, including the common elements, and those of any Master Association, are complete, and the project is not subject to additional phasing or annexation.
______ 4. (a) There are no special assessments pending.
______ (b) No legal action is pending against the condominium association, or its officers or directors.
______ 5. The common areas have been under the control of the homeowners association for at least one year.
______ 6. At least 90 percent of the total units in the project have been sold.
______ 7. At least 51 percent of the total units in the project are owner-occupied.
______ 8. There are no adverse environmental factors affecting the project as a whole or individual units .
______ 9. No single entity owns more than 10 percent of the total units in the project.
______ 10. The units in the project are owned in fee simple or the units are held under a leasehold acceptable to FHA.Leasehold in file.
______ 11. The owners association has adequate common area insurance coverage. General liability, replacement coverage, etc. reflects the character, amenities and risks of the particular development. Flood and other insurances carried, when applicable.
______ 12. General maintenance level of common elements is acceptable and there is no deferred maintenance, based on the comments by the Appraiser and/or the pictures.
______ 13. The owners association has a reserve plan and a reserve fund, separate from the operating account, that is adequate to prevent deferred maintenance. The amount of the fund is $_________ as of __________.
_______14. (a) For projects consisting of over 30 units, no more than 10 percent of the total units are encumbered by FHA insured mortgages.
_______ (b) For projects consisting of 30 units or less, no more than 20 percent of the total units are encumbered by FHA insured mortgages.
Next week should be an intersting week in Mortgage Land. A wide range of economic data will be released during the shortened week ahead.
Existing Home Sales will come out on Monday. GDP, Consumer Confidence, and the FOMC Minutes from the November 4th Fed meeting will be released on Tuesday. Durable Orders, Personal Income, Core PCE inflation, New Home Sales, and Consumer Sentiment will all be packed in on Wednesday. In addition, there will be Treasury auctions on Monday, Tuesday, and Wednesday. Mortgage markets will be closed on Thursday for Thanksgiving.
RATE LOCK ADVISORY
Lock Advice: FLOAT With CAUTION The Float with Caution recommendation is only because rates have been down for a while and they almost always adjust in the other direction after a long run. MBS prices closed +2/32. No economic data was released Friday.
RATE NOTES: When MBS prices are up, Rates are down. Lock advice can change throughout the day . Good economic news = Bad Rate News.
National Average Fixed Rate Mortgage Down 0.01% at 4.98% on Nov.20
Fannie Mae Mortgage Backed Securities MBS Opened at 4.513% Down 0.004%.
10 Year Treasury Currently 3.370% Up 0.01%
DJI Stocks closed Friday $10,318.16, Down -14.28, -0.14%
European and Asian Markets closed the week Down -0.758%
Nymex Crude Oil Currently $77.47 Down $0.58
Take 5 minutes to watch this humorous and educational video... The big bailout banks find another way to rip off the consumer ... just in a nick of time for them, but not for us. See TBWS Video
Rates 11-20-09, 11:00AM PT 30 Year Fixed to $417,000 Rate 4.500% Point 1.250, APR 4.665% APR Based on $350,000 Loan at 80% LTV Above Rate can be locked for 30 days. Call for Quotes on FHA and VA loans With Detailed Good Faith Estimates. No Application or Credit Report required
Education is the ONLY Effective Consumer Protection
President signs the First Time Buyer Tax Credit ExtensionRead Story
Bill Introduced to Increase FHA Down Payment to 5.00% from 3.50 Read Story.
RATE LOCK ADVISORY
Lock Advice: FLOAT With CAUTION The Float with Caution recommendation is only because rates have been down for a while and they almost always adjust in the other direction after a long run. MBS prices closed +2/32. No economic data was released Friday.
RATE NOTES: When MBS prices are up, Rates are down. Lock advice can change throughout the day . Good economic news = Bad Rate News.
National Average Fixed Rate Mortgage Down 0.01% at 4.98% on Nov.20
Fannie Mae Mortgage Backed Securities MBS Opened at 4.513% Down 0.004%.
10 Year Treasury Currently 3.370% Up 0.01%
DJI Stocks closed Friday $10,318.16, Down -14.28, -0.14%
Lock Advice: FLOAT With CAUTION The Float with Caution recommendation is only because rates have been down for a while and they almost always adjust in the other direction after a long run. MBS prices are up +3/32. No economic data will be released today.
RATE NOTES: When MBS prices are up, Rates are down. Lock advice can change throughout the day . Good economic news = Bad Rate News.
National Average Fixed Rate Mortgage Down 0.01% at 4.98% on Nov.20
Fannie Mae Mortgage Backed Securities MBS Opened at 4.513% Down 0.004%.
10 Year Treasury Currently 3.360% Up 0.01%
DJI Stocks $10,289.52, Down -42.92, -0.42%
European and Asian Markets Down -0.758%
Nymex Crude Oil Currently $76.70 Down $0.76
Take 5 minutes to watch this humorous and educational video... The big bailout banks find another way to rip off the consumer ... just in a nick of time for them, but not for us. See TBWS Video
Rates 11-20-09, 8:30 AM PT 30 Year Fixed to $417,000 Rate 4.500% Point 1.250, APR 4.665% APR Based on $350,000 Loan at 80% LTV Above Rate can be locked for 30 days. Call for Quotes on FHA and VA loans With Detailed Good Faith Estimates. No Application or Credit Report required
Education is the ONLY Effective Consumer Protection
With the U.S. Census process beginning, the Better Business Bureau (BBB) advises people to be cautious. The major concern is that individuals don't become a victim of fraud or identity theft.
The first phase of the 2010 U.S. Census is under way as workers have begun verifying the addresses of households across the country. Eventually, more than 140,000 U.S. Census workers will count every person in the United States and will gather information about every person living at each address including name, age, gender, race, and other relevant data.
The big question is - how do you tell the difference between a U.S. Census worker and a con artist? BBB offers the following advice:
** If a U.S. Census worker knocks on your door, they will have a badge, a handheld device, a Census Bureau canvas bag, and a confidentiality notice. Ask to see their identification and their badge before answering their questions. However, you should never invite anyone you don't know into your home.
** Census workers are currently only knocking on doors to verify address information. Do not give your Social Security number, cre dit card or banking information to anyone, even if they claim they need it for the U.S. Census. While the Census Bureau might ask for basic financial information, such as a salary range, the Census Bureau will not ask for Social Security, bank account, or credit card numbers nor will employees solicit donations.
Eventually, Census workers may contact you by telephone, mail, or in person at home. However, the Census Bureau will not contact you by Email, so be on the lookout for Email scams impersonating the Census.
Never click on a link or open any attachments in an Email that are supposedly from the U.S. Census Bureau.
For more advice on avoiding identity theft and fraud, visit http://www.bbb.org/.
Larry Bettag - Regional Vice President, Midwest Region
So you or your client have found a home in a great area in the client's price range. Only one problem: it's in bad shape. The HVAC system is 50 years old, the roof is 40 years old and the windows may as well not even be closed. Plus the kitchen has vinyl floors in 3 different patterns and the counters are all laminate with burns and holes and scars.
Not to fear! Meet the FHA 203K Streamlined renovation loan.
Eligible Improvements Virtually any kind of improvement is eligible provided it becomes a permanent part of the real property and adds value.
Additions to the structure
Kitchen or bath remodels
Finished basement or attic
Patios, decks or terraces
Roofing and landscaping
Safety, energy efficiency and electrical upgrades
Handicapped accessibility improvements
Luxuryitems are not eligible
Swimming pools, hot tubs, tennis courts, gazebos, barbecue pits, saunas or alterations to support commercial use
The maximum loan amount must be within the FHA loan amount maximum for the MSA where the home is located and must include the purchase price and the renovation amount. The maximum renovation amount is $35,000 and the minimum is $5,000. Under $5,000 we can do with an escrow of repair funds. A minimum of 10% contingency reserve is required and must also fit into the FHA loan maximums for the area where the property is located. (Any balance remaining on the contingency will be applied to the principal balance and may not be used for additional repairs.)
Yes, it takes a little longer to close an FHA203k Streamline loan than it does to close a standard FHA loan. If you are an agent and you are concerned about that extra couple of weeks just think of it this way: You may make a sale you would not have otherwise made. You may help a buyer get into a home in the area where they wanted to live instead of where they "had" to live. You can be a real hero for someone.
If you are in Georgia I can help you with the necessary paperwork and give you a short class in how to use the FHA 203K Streamline Rehab loan to purchase, sell or represent homes in today's economy. Never hesitate to call me at any time and I'll be happy to answer your questions.
Ken Cook - Georgia - FHA, USDA, VA and Conventional Home Loans (678) 439-8683
Mortgage APR was designed to allow consumers to use one standardized number to compare each lender's rate for the same type of loan while rate shopping. It is supposed to represent the borrower's cost and it works like this.
If I lend you, $10,000 and, I charge a $500 Bump-ta-Bump Fee, you will actually receive $9,500, however you must still repay me $10,000. Mortgage APR is my real yield and your real cost on this loan.
We agreed that you will repay the loan at 8% interest on $10,000, HOWEVER you only received $9,500 therefore I will earn more than the 8.0% interest rate I charge on $10,000. In this case, my yield (APR) is 9.799% on the $9,500 you received.
APR is the lender's yield on dollars actually lent ($10,000 minus $500 = $9,500); in this case, the lender's yield (APR) on $9,500 is 9.799% (APR is computed as if the above example is a 30 year loan)
The $9,500 also represents the Amount Financed in the Truth In Lending (TIL) disclosure.
For those of you who use spreadsheets the Rate Function will find APR. Use the Amount Financed for Loan Amount and use the monthly payment on the actual loan amount.
Fees that must be subtracted from a mortgage loan to properly calculate Amount Financed for APR
Origination and Discount Points
Processing and Lender Fees
Pre-Paid Interest (Use 15 days when closing date is unknown)
Monthly Mortgage Insurance must be added to the payment of all FHA loans and Conventional loans greater than 80% loan to value.
The inclusion of Mi or MIP accounts for the large spread between Rate and APR on loans with mortgage insurance.
NOTES: FeesNot used in APR calculation; third party fees such as appraisal and credit. APR can only be compared on loans of the same type and amortization period
How Do APR Predators Work?
Many sophisticated borrowers shop interest rates by searching for lowest APR which, if property stated, is a valid way to compare similar loans. Unfortunately, APR is not always stated properly.
Prepaid Interest is understated - must be 15 days when closing date is unknown.
MI or MIP is not included in the APR on any online rate sites, Bankrate etc.
Some lenders do not include MI or MIP on their web sites such as Amerisave.com
Lender fees are either understated or not included in the APR calculation. This is a tricky one because No or Low Lender Fees does not necessarily indicate a predatory lender. Some lenders charge a higher rate and no points or fees for their so called "Zero Cost" loan. However, the "Zero Cost" rate will always be higher than a rate with points and/or fees.
Notes to the above:
there is no such thing as a Zero Cost loan and some states prohibit lenders from advertising Zero Cost Loans.
The spread between Rate and APR on loans greater than 90% LTV should be at least 0.700%. When it is not... you are being scammed
Rate - Points - Fees are all interdependent
The best way I can explain this is show various Rate - Point - Fee combinations where the lender is making the same gross profit on each combination.
In the examples below, we will use a $200,000 loan amount and Lender gross profit of $1,000, on a day when the Lender's cost for a 5.000% rate is par (0 point).
Best Rate: $1,000 Lender profit in various combinations of points and fees
Rate
Fees
Points
APR
Profit
5.000%
$1,000
0
5.044%
$1,000
5.000%
$500
0.250
5.044%
$1,000
5.000%
$0
0.500
5.044%
$1,000
Lowest Fees: You pay $0 points and fees and Lender's investor pays the lender $1,000 for the higher rate.
Rate
Fees
Points
APR
Profit
5.125%
$0
0
5.125%
$1,000
The point here is that lenders design their loans to provide talking points for their sales staff (loan officers). They all require a certain profit margin and it is not important the way the loan is structured as long as the closed loan delivers their required profit margin.
This illustration also points out the value of correctly stated APR as a way of comparing mortgage loans. For the sake of these illustrations, prepaid interest was not used. If 15 days PP was calculated it would have increased each APR by 0.019%.
Lock Advice: FLOAT With CAUTION MBS prices are up +1/32. Jobless Claims were close to expectations.
RATE NOTES: When MBS prices are up, Rates are down. Lock advice can change throughout the day . Good economic news = Bad Rate News.
National Average Fixed Rate Mortgage Unchanged at 4.99% on Nov.19
Fannie Mae Mortgage Backed Securities MBS Opened at 4.517% Up 0.005%.
10 Year Treasury Currently 3.340% Down -0.02%
DJI Stocks $10,332.44, Down -93.87, -0.9%
European and Asian Markets Down -1.392%
Nymex Crude Oil Currently $77.46 Down $2.12
Take 5 minutes to watch this humorous and educational video... The big bailout banks find another way to rip off the consumer... just in a nick of time for them, but not for us. See TBWS Video
Rates 11-19-09, 11:00AM PT 30 Year Fixed to $417,000 Rate 4.500% Point 0.875, APR 4.637% APR Based on $350,000 Loan at 80% LTV Above Rate can be locked for 30 days. Call for Quotes on FHA and VA loans With Detailed Good Faith Estimates. No Application or Credit Report required
Education is the ONLY Effective Consumer Protection
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
Bill Ladewig
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