My Take on Fannie and Freddie - 08/21/08 06:53 AM
They are extremely vital to the health of our housing market, as evidenced over the last year when Wall Street money dried up in the mortgage markets. Fannie and Freddie kept the conforming, full doc mortgage market moving along as if nothing was amiss. Their problems started when investors of Fannie and Freddie doubted their ability to withstand the overall real estate market downturn.  As you may know, Fannie and Freddie insure around 60% of the mortgages in the US.  What you probably did not know is that they also invested heavily in other mortgage-backed securities.  They could buy them on … (2 comments)

Seller Funded DPA has left the building (Sooner than expected)! - 08/19/08 01:37 PM
By now we have all been informed that thanks to H.R. 3221, all forms of Seller Funded Down Payment Assistance will cease to exist as of 9/30/08.  What we have to remember is that lenders will probably start eliminating it from their offerings much sooner.  I know of one national lender who says that you must be rate locked by 8/25/08 and closed by 9/19/08.  Expect this trend to continue with more lenders over the next week or two as lenders continue to digest H.R. 3221.  Therefore, if you or your clients intend to use this type of down payment assistance with an … (6 comments)

Know Your VA - 08/18/08 07:42 AM
I've said it before; you really need an expert when it comes to VA loans. There is still a good deal of confusion and misinterpretation out there, even on the part of professionals in the mortgage industry. I went round and round today with someone who insisted that he knew what he was talking about, and he didn't.
The issue this time was the closing costs and pre-paids on a VA loan and what sellers are permitted to contribute. The VA allows seller paid closing contributions not to exceed 4%. But, that 4% is above and beyond the up to 6% … (0 comments)

Here We Go Again - 08/11/08 02:21 PM
OK, Fannie Mae (FNMA) is at it again.  As of 10/1/08, they are raising the cost of loans for borrowers. They are doing it two ways.  First, they are increasing costs on their matrix of "risk based" pricing model (see below), which means that if you do not have a 40% down payment OR your qualifying credit score is not at least a 720, then you will experience an increase in costs related to that loan.  Not only did they adjust pricing for those with less than perfect credit, they also DOUBLED their fee for ALL mortgages, from .25% of the … (5 comments)

H.R. 6694 - 08/04/08 06:20 PM
Some ideas are so good and at the same time so bad when they are used incorrectly. And what happens to good ideas and programs that are not used as they should be? They go away and then serve no one. HR 3221 was signed into law by President Bush, is doing just that by abolishing down payment assistance as of October 1st.  I am an advocate of down payment assistance programs such as The Nehemiah Program, but only to the extent that such is extended to qualified borrowers that are truly creditworthy. Since anyone can currently qualify for these types … (11 comments)

Foreclosure Bailout - 08/02/08 09:31 AM
It's no news that people are upside down on their mortgages. It is an unfortunate circumstance that is affecting people from all income brackets and walks of life. What is also unfortunate is that family members of these mortgagees in distress are prohibited from officially assisting. There are situations where relatives in the market for a first or second home are instead "keeping it in the family" by electing to buy the home of a family member who is looking down the barrel at a foreclosure or in the purgatory of short sale land. Some really amazing cousins, siblings, etc., are … (2 comments)