Kris Krajecki's Blog

Did you miss the 36 hour Refi Boomlet?

2008-02-02T11:25:10Z

Did you miss the 36 hour Refi Boomlet? Did you have a lot of customers complaining because they missed it too? This has happened 3 times in the last 5 months. Don't let it happen again.

How about establishing a "Pre-Pipeline"? Give your past customers an "added value" of joining your Pre-Pipeline. Get them ready to go, so they AND YOU won't miss the next Refi Boomlet.

You should ALWAYS find an opportunity to contact your past customers with added value.

In today's challenging market, staying one step ahead of the competition can be the degree of separation between the successful lender and the struggling lender.

FHA Streamline Submission Checklist

2008-02-02T11:22:33Z

With rates dropping, and expected to continue to drop, we're going to see more demand for FHA Streamlines (non-credit qualifying rate/term refinances of borrowers who currently have an FHA loan).
Below is some general information on them, and a Submission Checklist

Appraisal not required if loan amount does not exceed original loan amount
DU Findings are not required
Employment information is required on the 1003
Income and Assets are not required on the 1003
Max 1x30 on the Mortgage last 12 months
Must be 0x30 at closing
Max $250 cash out
VOM required at Submission
Not allowed in Colorado, Minnesota, Nevada, or Ohio
Payment must reduce by $50
A borrower may not be removed from the loan........borrower may be added
FICO adjustments on rate sheet do not apply

FHA Streamline Submission Checklist

General
q       Loan Submission Form
q       Borrowers/Co borrowers Signature Authorization Form
q       1003 with NVRL Rate and Terms (signed)
o       Employment must be disclosed on 1003
q       Good Faith Estimate
q       Truth-In-Lending
q       Title Report
q       Copy of Current Note & HUD
q       VOM

FHA Specific
q       FHA DU Findings are NOT needed
q       Notice to Homebuyers regarding Assumption Disclosure
q       Informed Consumer Choice Disclosure
q       92900
q       Clear Copy of ID's if Face-to-Face Interview (if applicable)

FHA Streamline Submission Checklist

2008-02-02T11:19:55Z

With rates dropping, and expected to continue to drop, we're going to see more demand for FHA Streamlines (non-credit qualifying rate/term refinances of borrowers who currently have an FHA loan).

Below is some general information on them, and a Submission Checklist

Appraisal not required if loan amount does not exceed original loan amount
DU Findings are not required
Employment information is required on the 1003
Income and Assets are not required on the 1003
Max 1x30 on the Mortgage last 12 months
- Must be 0x30 at closing
Max $250 cash out
VOM required at Submission
Not allowed in Colorado, Minnesota, Nevada, or Ohio
Payment must reduce by $50
A borrower may not be removed from the loan........borrower may be added
FICO adjustments on rate sheet do not apply

FHA Streamline Submission Checklist

General

q Loan Submission Form

q Borrowers/Co borrowers Signature Authorization Form

q 1003 with NVRL Rate and Terms (signed)

o Employment must be disclosed on 1003

q Good Faith Estimate

q Truth-In-Lending

q Title Report

q Copy of Current Note & HUD

q VOM

FHA Specific

q FHA DU Findings are NOT needed

q Notice to Homebuyers regarding Assumption Disclosure

q Informed Consumer Choice Disclosure

q 92900

q Clear Copy of ID's if Face-to-Face Interview (if applicable)

U.S. Treasury Notes Advance as Drop in Stocks Increases Demand

2008-01-26T10:16:42Z

Treasury notes gained, posting their sixth straight weekly advance, as a decline in stocks fueled concern that the U.S. economy will fall into recession.

Traders pushed U.S. government debt to the best start to a year in two decades on speculation the Federal Reserve will cut interest rates by as much as a half-percentage point Jan. 30. Volatility in Treasuries reached the highest in a decade this week as policy makers slashed their target in an emergency move, while stocks had the longest slide since 2002.

The 10-year note yield dropped 14 basis points today to 3.57 percent. The yield touched 3.29 percent this week, the lowest since June 2003, as investors sought shelter from falling stocks. The note's rally is the longest since 2006.

NEW FHA LOAN LIMITS UP TO $730,000!!!!

2008-01-26T10:12:38Z

As part of the economic stimulus package being negotiated by House Democrats
and the Treasury Department, Fannie and Freddie loan limits will increased
for one year up to $730,000. The increase will be adjusted for local markets
at 125% of local median home price. The move will significantly improve
liquidity and pricing in the jumbo market. The agreement also includes
raising the FHA loan limits to the same amount. We are trying to confirm
whether the other provisions of FHA reform will be included (such as
lowering downpayment requirements). But at a minimum, the loan limits will
be increased.

This represents an agreement in principle and must still go through the
legislative process. My best guess is that will happen sometime after the
State of the Union next week, likely progressing into early February.

This is the most significant action to date proposed by the federal
government to stabilize the housing market. Lenders One/National Alliance of
Independent Mortgage Bankers have worked hard to make this a reality and we
will continue to keep you posted on our progress.

....and YES...We have always been FHA approved!

:-)

~KRIS KRAJECKI

Mortgage Specialist

630-347-6321

AWESOME FHA NEWS!!! NEW HIGHER LIMITS!!!

2008-01-26T10:09:39Z

Countrywide New "Soft Market" Policy Changes

2008-01-26T10:07:47Z

I recieved this e-mail and thought I'd pass it along...

Looks like teh declining housing market is here to stay for awile....and the lenders know it!

As you are well aware, 2008 is forecasted to be a challenging year for the mortgage industry, characterized by a declining Housing Price Index in a wide variety of metropolitan markets. In the context of the prominent threat to our industry of collateral values falling below outstanding loan balances, mortgage professionals must strive to ensure that borrowers do not take on loans that they do not have the ability or economic interest to repay.

Because of these market conditions, as well as policies implemented by Government Sponsored Enterprises and Mortgage Insurance agencies, Countrywide^®, America's Wholesale Lender^® is adopting new Soft Market policies designed to help serve qualified borrowers in markets which are either declining or projected to decline in 2008.

Impacted markets across the nation have been categorized, with Category 5 being the highest risk for declining market value and Category 1 markets currently demonstrating more stable market values. Those counties in a higher risk category are subject to additional guideline restrictions as described below. Click here to view a list of the counties currently attributed* to Soft Market categories 1-5.

The following Soft Market policy became effective January 18, 2008:

Conforming, Non-Conforming, Expanded Approval (EA), and Conventional Bond loans:

Soft Market Category 4-5 loans
		Maximum financing will be reduced by 5% Example: Maximum financing per Countrywide's Loan Program Guide allows for 95% LTV. Loans in Category 4-5 will be limited to a new max LTV of 90%.
Soft Market Category 1-3 loans
		Maximum financing will be reduced by 5%, only if the appraisal or appraisal review indicates any of the following:
	Declining Market Oversupply Marketing time over 6 months

For the above categories, if the loan is already 5% below the maximum allowable financing, no further reduction is required.

Home Equity**

Soft Market Category 5 loans
		Maximum financing will be reduced by 10%, unless the loan is already 10% below the maximum allowable financing
Soft Market Category 4 loans
		Maximum financing will be reduced by 5%, unless the loan is already 5% below the maximum allowable financing
Soft Market Category 1-3 loans
		Maximum financing will be reduced by 5% (unless the loan is already 5% below the maximum allowable financing) if the appraisal or appraisal review indicates any of the following:
	Declining Market Oversupply Marketing time over 6 months
Products / Programs Not Impacted
		FHA / VA
		Rural Housing
		Bond programs using government or Rural Housing loan programs
		Reverse Mortgages

Treasuries Decline as Stimulus Plan Reduces Demand For Debt

2008-01-24T12:35:06Z

Treasuries Decline as Stimulus Plan, Stocks Dim Demand for Debt (edit/delete)

Ten-year Treasury notes fell for a second day as gains in stocks drew investors from government debt, pushing yields up from close to the lowest since 2003.

Demand for the relative safety of U.S. notes and bonds waned on speculation that further cuts in borrowing costs by the Federal Reserve and an economic stimulus package will avert a recession.

Losses in Treasuries were limited as a report showed the nation's housing slump deepened. Purchases of existing homes fell 2.2 percent to an annual rate of 4.89 million, the National Association of Realtors said today. For all of 2007, sales of single-family homes declined 13 percent, the most since 1982, and prices dropped for the first time in at least four decades.

I still predict a 1/2 point rate next week.

:-)

Treasuries Decline as Stimulus Plan, Stocks Dim Demand for Debt

2008-01-24T12:31:58Z

Ten-year Treasury notes fell for a second day as gains in stocks drew investors from government debt, pushing yields up from close to the lowest since 2003.

Demand for the relative safety of U.S. notes and bonds waned on speculation that further cuts in borrowing costs by the Federal Reserve and an economic stimulus package will avert a recession.

I still predict a 1/2 point rate next week.

:-)

Fed Cuts The Rate .75 Percentage Point!

2008-01-22T09:09:16Z

The Federal Reserve lowered its benchmark interest rate in an emergency move for the first time since 2001 after stock markets tumbled from Hong Kong to London and the U.S. economy showed increasing signs that it's headed into a recession.

The central bank cut the target overnight lending rate to 3.5 percent from 4.25 percent

(I was guessing 1/2) :-)

Policy makers weren't even scheduled to gather until next week! It's the biggest single reduction since the Fed began using the rate as the principal tool of monetary policy around 1990.

Fed Cuts The rate .75 Percentage Point!

2008-01-22T09:08:07Z

The central bank cut the target overnight lending rate to 3.5 percent from 4.25 percent

(I was guessing 1/2) :-)

Policy makers weren't even scheduled to gather until next week! It's the biggest single reduction since the Fed began using the rate as the principal tool of monetary policy around 1990.

Fed Cuts Rate .75 Percentage Point!

2008-01-22T09:06:44Z

The central bank cut the target overnight lending rate to 3.5 percent from 4.25 percent

(I was guessing 1/2) :-)

Policy makers weren't even scheduled to gather until next week! It's the biggest single reduction since the Fed began using the rate as the principal tool of monetary policy around 1990.

Aurora Loan Services-Lehman Brothers...Last Day To Submit. Closing Doors!

2008-01-18T09:03:32Z

Well...It's official!

Got the "official e-mail" ... even though corporate actually dropped the bomb yesterday at 10am. My file with them must fund by the 25th. That is the day that my lock expires and there will be NO MORE lock extensions! Today is the last day to submit a new loan to them and you can only lock for 30 days.

Here's the e-mail...

Dear valued clients:

Aurora Loan Services' parent company, Lehman Brothers, announced today that it will substantially reduce its resources and capacity in the U.S. residential mortgage origination space in light of the dislocation in the mortgage markets. As a result, Lehman Brothers is suspending all Wholesale and Correspondent mortgage originations at Aurora. Aurora will continue to originate loans through its direct lending channel, and will maintain its servicing business.

January 18 will be the last day to lock new loan applications, with a maximum lock period of 30 days. The final day to submit underwriting packages is January 25. We will continue to process locked applications in the pipeline through to final disposition, however lock extensions will not be granted. Please contact your regional Operations center regarding any questions or status updates.

We truly appreciate your business and support over the years.

With sincerest thanks.

I will miss Aurora.

:-)

The Rate Cuts Are Coming...The Rate Cuts Are Coming!!

2008-01-16T11:49:16Z

Treasuries fell as higher-than- forecast reports on inflation and industrial production may reduce speculation the Federal Reserve will lower borrowing costs by more than a half-percentage point this month.

Yields on benchmark 10-year notes were near the lowest level in more than four years. The housing slowdown and losses on securities linked to subprime mortgages have led investors to push the yields down in the past month by the most in more than two decades on bets the economy will fall into recession.

There are even talks that the FED may come in with an inter-meeting rate cut!!

Some analysts are even talking about a THREE QUARTER OF A PERCENT RATE CUT?!!?

WOW!

The central bank hasn't eased by more than 50 basis points in a single move since Oct. 2, 1984!!

It looks like a rate cut for sure...it seems the only question now is...HOW MUCH??

I say 1/2 point.....Whats your guess?

:-)

Treasuries Fall on Higher-Than-Forecast Inflation

2008-01-16T11:47:18Z

There are even talks that the FED may come in with an inter-meeting rate cut!!

Some analysts are even talking about a THREE QUARTER OF A PERCENT RATE CUT?!!?

WOW!

The central bank hasn't eased by more than 50 basis points in a single move since Oct. 2, 1984!!

It looks like a rate cut for sure...it seems the only question now is...HOW MUCH??

:-)

Branding Yourself...Give Yourself an Edge!

2008-01-16T11:41:34Z

"A brand for a company is like a reputation for a person. You earn reputation by trying to do hard
things well."

Jeff Bezos (1964 - ) Founder Amazon.com
Americans are having 3.5 billion brand-related conversations per day. Are they talking about your brand? Are they talking about you? You are a brand!

According to recent findings <http://m1e.net/c?50136946-BK1jjTsGTvytY%402950489-a.kT247ovJ8Lk> unveiled at the Word-of-Mouth conference in Las Vegas in November, spending on word-of-mouth marketing grew to $981 million in 2006, an increase of 35.9%. Word-of-Mouth marketing grew more than the overall marketing services category (7.7%) and the U.S. Gross Domestic Product (5.7%) in the same 12-month period.

Word-of-Mouth spending is expected to reach $3.7 billion by 2011 - almost 50 times more than the $76 million spent in 2001. And just who are consumers talking to? Nearly 80% trust recommendations from friends, family and 'influential' persons most. The second-most credible source is newspapers with 63%.
Are you keeping in touch with your past customers and prospects?

In today's challenging market, staying one step ahead of the competition can be the degree of separation between the successful lender and the struggling lender. As you know, in real estate the established rule is:
"Location, Location, Location"

Jim's rule of mortgage lending is:
"Differentiate, Differentiate, Differentiate"

So, how can you set yourself apart from your competitors?

Branding....Giving You The Edge!

2008-01-16T11:40:34Z

A brand for a company is like a reputation for a person. You earn reputation by trying to do hard
things well.

Americans are having 3.5 billion brand-related conversations per day. Are they talking about your brand? Are they talking about you? You are a brand!

According to recent findings <http://m1e.net/c?50136946-BK1jjTsGTvytY%402950489-a.kT247ovJ8Lk> unveiled at the Word-of-Mouth conference in Las Vegas in November, spending on word-of-mouth marketing grew to $981 million in 2006, an increase of 35.9%. Word-of-Mouth marketing grew more than the overall marketing services category (7.7%) and the U.S. Gross Domestic Product (5.7%) in the same 12-month period.

Word-of-Mouth spending is expected to reach $3.7 billion by 2011 - almost 50 times more than the $76 million spent in 2001. And just who are consumers talking to? Nearly 80% trust recommendations from friends, family and 'influential' persons most. The second-most credible source is newspapers with 63%.
Are you keeping in touch with your past customers and prospects?

In today's challenging market, staying one step ahead of the competition can be the degree of separation between the successful lender and the struggling lender. As you know, in real estate the established rule is:
"Location, Location, Location"

A great rule of mortgage lending or real estate is:
"Differentiate, Differentiate, Differentiate"

So, how can you set yourself apart from your competitors?

FNMA EA LEVELS CHANGING TO 620 MINIMUM FICO!!

2008-01-14T10:23:34Z

I just recieved an e-mail from one of my lenders (GMAC)....he says that that all FNMA products will be changing as soon as tomorrow!

(from e-mail:)

ALL EA LEVELS AND MY COMMUNITY IS CHANGING TOMORROW, FANNIE IS CHANGING THE MIN FICO TOMORROW, RUN AND LOCK THESE LOANS TODAY. THEY ARE SAYING MIN FICO @ 620!

If this is true, a lot of deals will be lost to 580 - 620 borrowers who are pre-approved and actively looking for houses! KEEP YOUR EYES OPEN!!

This change is significant enough to remind me of last year when sub-prime lenders were falling out and guidelines changed so quickly that many many LO's and Realtors lost many deals simply because the borrower was qualified on Monday and was not on Tuesday!

FHA lenders who only take a 580 or better are looking better NOW! Hopefully the new FHA limits will be in place SOON!

:-)

~Kris Krajecki

FNMA CHANGING TOMORROW TO 620 MID FICO!!! BUYERS "QUALIFIED"?!

2008-01-14T10:22:09Z

I just recieved an e-mail from one of my lenders (GMAC)....he says that that all FNMA products will be changing as soon as tomorrow!

(from e-mail:)

ALL EA LEVELS AND MY COMMUNITY IS CHANGING TOMORROW, FANNIE IS CHANGING THE MIN FICO TOMORROW, RUN AND LOCK THESE LOANS TODAY. THEY ARE SAYING MIN FICO @ 620!

If this is true, a lot of deals will be lost to 580 - 620 borrowers who are pre-approved and actively looking for houses! KEEP YOUR EYES OPEN!!

FHA lenders who only take a 580 or better are looking better NOW! Hopefully the new FHA limits will be in place SOON!

:-)

~Kris Krajecki

FNMA EA LEVELS ARE CHANGING TO 620 FICO!? REALTORS MUST KNOW!

2008-01-14T10:20:58Z

I just recieved an e-mail from one of my lenders (GMAC)....he says that that all FNMA products will be changing as soon as tomorrow!

(from e-mail:)

ALL EA LEVELS AND MY COMMUNITY IS CHANGING TOMORROW, FANNIE IS CHANGING THE MIN FICO TOMORROW, RUN AND LOCK THESE LOANS TODAY. THEY ARE SAYING MIN FICO @ 620!

If this is true, a lot of deals will be lost to 580 - 620 borrowers who are pre-approved and actively looking for houses! KEEP YOUR EYES OPEN!!

FHA lenders who only take a 580 or better are looking better NOW! Hopefully the new FHA limits will be in place SOON!

:-)

~Kris Krajecki

An Important Message from Countrywide

2008-01-10T13:50:23Z

I got the e-mail!

Countrywide denying rumers of filing BK....

:-)

Dear Business Partner:

Yesterday, rumors circulated about Countrywide's financial condition that caused concern among our Business Partners and employees. While our policy is that we typically do not comment on rumors, yesterday's unique circumstances led to Countrywide issuing the below statement that I wanted to share with you right away:

"There is no substance to the rumor that Countrywide is planning to file for bankruptcy, and we are not aware of any basis for the rumor that any of the major rating agencies are contemplating negative action relative to the Company."

In addition, the Company will host a live management discussion of the results for the 2007 fourth quarter and full year on Tuesday, January 29, at 12:00 p.m. (EST).

On behalf of the entire Countrywide^®, America's Wholesale Lender^® team, I want to extend our appreciation for your ongoing support during these challenging market conditions. As always, thank you for your business.

Todd A. Dal Porto
Senior Managing Director and President
Countrywide, America's Wholesale Lender

Two-Year Treasuries Rise as Bernanke Cites `Downside Risks'

2008-01-10T13:48:45Z

Treasury two-year notes rose, pushing yields toward a three-year low, as Federal Reserve Chairman Ben S. Bernanke signaled the central bank may cut borrowing costs this month to offset ``downside risks.''

MAY cut most likely means, WILL cut!

Traders increased bets the central bank will reduce borrowing costs by a half-percentage point on Jan. 30 as Bernanke gave his first assessment of the economy since the Fed's Dec. 11 meeting.

With any luck, maybe these low rates will spur home sales!

:-)

Credit Card New Year's Resolution Ideas

2008-01-08T09:25:52Z

Check all of your credit cards that you carry balances on to confirm the current rate. You may be surprised to see that some of these rates are higher than you recall. Remember that credit card rates can be changed very frequently and easily by the issuer, and rarely in your favor. And even better - give me a call to check your overall debt structure, and let's ensure that it makes sense based on your current financial goals.

Usually, just a quick call to your CC company to the # on the back of the card is enough to get them to lower your APR...saving you hundreds!

Don't forget that you can check your credit report and score once a year for FREE at www.annualcreditreport.com

:-)

Foreclosures...WHO REALLY LOSES?

2008-01-08T09:23:22Z

Over the past several months a steady stream of large financial companies have given notice of large losses that they are sustaining as a result of the credit crunch and sub-prime mortgage market issues. So the question is, who really loses when a company or in this case an industry loses a lot of money?

Clearly, it is rarely the CEO of the firm. And obviously, it is initially the shareholders in the company, as the value of their investments plummet. But who really pays the price in the end...and how? Well, as many Americans are finding, the buck stops with the consumer.

Home Loan Rates

Although home loan rates overall remain fairly low, Fannie Mae and Freddie Mac--the two large government sponsored companies that form the framework for most conventional home loans--have announced a series of changes over the past sixty days. Many of these changes deal with stricter underwriting standards and guidelines, but several are price increases as they work to cover losses incurred based on previous loans.

Price increases are generally not paid in cash, but rather are reflected by a higher interest rate on a new loan - which is why it is crucial that you clearly understand the rates and terms that you qualify for, when you are shopping for a new mortgage.

Credit Cards

It's pretty common practice for credit card issuers to hike rates if a payment is missed or the card is charged over the limit, especially if that consumer had an average or below average credit rating. But it is becoming increasingly common that issuers are starting to place these 'hair trigger' rate resets on consumers with solid credit ratings. The reason? You guessed it, most of the credit card issuers are the same large financial companies that are being hurt by the overall strife in the financial markets.

Many of these companies fear that the financial issues related to the mortgage industry will spill over into the revolving credit card markets, as it only stands to reason that a consumer, if faced with either paying their mortgage or their credit cards, will probably choose their mortgage. So as foreclosures rise, credit card late payments and losses will ramp up accordingly.

How to Protect Yourself

The best defense you can take is to proactively monitor and safeguard your credit - and I would encourage you to call me for an analysis of your current credit standing, as I may be able to make suggestions that could help right away.

Additionally, when it comes to your credit cards in particular, make sure that you do not give that lender reason to bump your rates. If they do, call their customer service lines to ask them to reverse course, or risk losing your business. If your credit score is strong, you will greatly increase your chances of winning this fight, or being able to simply follow through on your threat and take your business elsewhere. This will at least help mitigate the chances that YOU will have to help subsidize the massive losses being experienced by some of the largest banks in the US.

Economic Forcast for the Week of 1/7/08

2008-01-08T09:21:17Z

The economic event calendar slows down significantly this week, with only one meaningful report scheduled to arrive on Thursday - Initial Jobless Claims, giving a look at the most recent reports of filings for unemployment. Considering the recent stats on higher unemployment levels, this report will be given special attention.

And notice how prices have recently separated far from their 25-day Moving Average, shown as a green line. Many securities tend to gravitate back towards their 25-day MA once they stray too far above or below it. This is called the "Leash Effect". Imagine a puppy on a leash straying too far...its owner will tug on the leash to bring the puppy back. Mortgage Bonds have historically shown a similar reaction; once prices stray far from their 25-day MA, they tend to snap back towards it. Notice how this happened about a month ago in the chart below. It is likely that Bonds will again be reined in by the "Leash Effect" in the week ahead, which suggests a bit higher rates.

The colorful chart below shows how Bond prices have run up higher in recent days, and in turn, home loan rates have improved. In fact, they've improved so much, that they are somewhat ripe for a reversal.

In the absence of any unexpected news - don't be surprised to see home loan rates worsen a bit in the coming week.