Mortgage Knowledge in English!

Refinancing your conventional loan; East Bay, CA

Kathleen Davis (Cherry Creek Mortgage) — Wed, 02 Dec 2009 15:13:50 -0600

Refinance a Conventional Loan into a FHA Loan because owe more than value of home (edit/delete)

You can refinance your conventional mortgage into a FHA mortgage.

FHA will allow you to refinance to 96.5% loan to value but there can be no cash out. Loan to value means the amount of your loan as a percentage to the value: example value of home is $200K with a loan of $193K gives you a loan to value of 96.5%.

If you are trying to refinance an into an FHA loan and taking cash out than there are limitations. Most banks will not allow you to take out cash beyond 85% loan to value. What does that mean: If your home is worth $200K you cannot have an FHA loan with cash out beyond $170K.

This is for loans that are $417K and under. The guidelines for loan amounts > $417K to $729,750 maybe different.

FHA has max loan amountsallowed that are based by state and than by county. These limits are set by HUD. The max loan limits are set by HUD and are 120% of the median home price for the county to a max loan amount of $729,750. Example: Calaveras County, CA max loan amount is $462,500 for a single family home versus in San Francisco County, CA the max loan amount for a single family home is $729,750 which is the max amount HUD will allow for FHA.

Pleasanton Realtors Give Back to the Community

Kathleen Davis (Cherry Creek Mortgage) — Wed, 02 Dec 2009 15:03:00 -0600

Here is a great cause. Local Pleasanton Realtors and Affilates give back to the community. Realtors and Afflilates are donating up to $2K to the local charities of Pleasanton/Tri-Valley. These Tri-Valley organizations are in need as many are in these challeneging times. T

These Pleasanton and Tri-Valley Real Estate community have so far donated to date $50K+ in funds that will be matched by a local Holiday Fund. These funds will go to help local community charties such as:

Open Heart Kitchen: http://www.openheartkitchen.org/

Axis Community Center: http://www.axishealth.org/

Tri-Valley Haven - a world without violence: http://www.trivalleyhaven.org/

Funds go to support these Pleasanton/Tri-Valley such as:

Ways you can help.

Donate: http://www.vmamakingadifferencefund.org/text/2009/HOW-CAN-YOU-HELP.pdf
Come to the party: call Wendy @ 925.251.2500

Last year the Valley Real Estate Network transformed their annual yearend Holiday Party into a fundraising event for the 2^nd year and raised $25,000. In the two years of this event, VREN has raised $67,000 for local Tri-Valley Community Organizations such as Tri-Valley Haven, Open Heart Kitchen, Hope Hospice and Axis Community Health. The party is a great event, but the best part is raising these funds to help so many needy families and individuals.

This year the Holiday Event will be held December 9, 2009 from 6-9 PM at the Marriott Pleasanton Hotel. Tickets are $15 and will include a fabulous array of hot and cold appetizers, a live auction, prize drawings, entertainment and dancing!

I'm excited to share with you our financial goal to reach $56,000. Here is how you can help; Any contribution you make will be matched 4 to 1 For example, a contribution of $10 will turn into $40, a $100 will turn into $ 400 and $250 will turn into $1,000.

I hope you will join us this year in contributing directly to the fund and or attending the event. Thank you for helping us, help those in need!

http://www.vmamakingadifferencefund.org/default.html

Sincerely,

Roy Dronkers

President,VREN

925.872.8671

VALLY REAL ESTATE NETWORK

The 2009 VREN "Making A Difference" Fund

Interest Rates 12/01/09

Kathleen Davis (Cherry Creek Mortgage) — Tue, 01 Dec 2009 12:57:19 -0600

What goes up does come down... The Bond market has lost about 21 base points this morning. I suspect this will put lenders to reprice for the worst. However.....

Rates are still very very good in the upper 4% to low to mid 5% depending on your circumstances.

http://www.mortgagenewsdaily.com/consumer_rates/121570.aspx

The stock market regained some growth as reports on construction spending and pending home sales were better than expected and concerns about the Dubai World debt crisis eased with talks going on with lenders to restructure the debt on their books.

Here is a great recording on the First Time Home Buyer tax credit and move up credit:

Click Here For First Time Homebuyer & Move-Up/Repeat Buyer Tax Credits

Interest Rates 11/30/09

Kathleen Davis (Cherry Creek Mortgage) — Mon, 30 Nov 2009 16:36:56 -0600

The big move in bonds on Friday held steady today. The new of Dubai pushed many into the safe haven of bonds on Friday thus giving us the great rates we are seeing.

Cautiously float. There is some economic news that will come out this week that could have effective on mortgage rates as well as the Federal Reserves annouement that will come on Thursday of the next auction.

Tuesday: Pending Home Sales
Wed: National Employment Report
Thurs; Jobless Claims
Friday: Unemployment Rate

There are other reports due out that could have an impact such as the Manufacturing Index which is a measure of expansion; Beige Book giving current economic conditions by District.

Obama is pushing on banks to do loan modification to keep people in their homes and to help stabilize the housing market.

We all know the that the predictions for 2010 is that Foreclosures will peak in 2010:

People are losing their jobs; unemployment will grow
Arms and Options ARMS will be resetting
Increase in Strategic defaults; those that feel that it's in their best interest to walk away
Loan Modifications will continue to not be productive or succesful

There is a massive "shadow inventory" that will slow down the housing market recovery;

900,000 REOs - over 500,000 not listed for sale
1.1 million homes currently in foreclosure
5.5 million loans in some stage of delinquency

Just some food for thought. What you should be doing is evaluting your mortgage position either if you are ready to buy or if you already own. Talk with someone and just ask questions about getting the facts and how all of this impacts you, your database, clients, friends, etc.

Now more than ever you need to be educated.

REfinance! Buy!! Low Interest Rates!

Kathleen Davis (Cherry Creek Mortgage) — Fri, 27 Nov 2009 19:23:05 -0600

Not much movement in rates today. The bond market opened up strong with big gains but those were quickly lost.

Even with all the uptick in bonds not many banks are passing on these gains with even lower rates.

However we are still seeing a "

30 year fixed High Balance conforming FHA loan 3.6% down (>$417K - $729,750 loan amount) with 620 FICO at 4.75%;
Conforming FHA 3.5% down 620 FICO 4.5% 30 year fixed
Conforming with 20% down 720 FICO 4.625% 30 year fixed
High Balance loan with 20% down 720 FICO 4.75% 30 year fixed

Many are looking for safe havens right now due to news that Dubai has asked for a 6 month reprive or payment of their debts. Safe haven usually means bonds.

Dubai which has funded projects all over the world and holds billions of dollars of debt on their books. Many of these debts are are held by financial institutions that could be significantly impacted by this.

Dubai Jitters Infect Debt of Sovereign Spendthrifts http://online.wsj.com/article/SB125936720204567249.html?mod=WSJ_hpp_LEFTTopStories
Nervous Money Seeks Safe Have http://www.mortgagenewsdaily.com/consumer_rates/121079.aspx

Don't know how long this ride will last!

Now is your time to Refinance or Buy. Get off the fence...

Mortgage Rates now.... WOW!!!

Kathleen Davis (Cherry Creek Mortgage) — Wed, 25 Nov 2009 13:54:22 -0600

Unbelievealble, Bond market is UP!!! it is almost to the levels it was on Mar 19, 2009 but a few days after that we lost alot of those gains. So honestly we don't know what Friday or Monday will bring, tough to say.

Recommendation.... LOCK if you are closing in the next 30 days. RATES are the lowest they have been since March. Potential reprice for the better today or on Friday but.....I see a drop coming and better to be ahead of it than to REGRET it!

Wed 11/25 Mortgage Rates

Kathleen Davis (Cherry Creek Mortgage) — Wed, 25 Nov 2009 11:09:58 -0600

Lock Lock Lock.... WHY....

The market could see some volitalite.

There is alot of economic data due out today, some of which has already been released. Jobless claims came in lower than expected. Home sales improved but could this have been due to the First Time Home Buyer tax credit many thought was going to expire so there was the rush to close before the end of Nov. Personal spending came in slighly higher and the saving rate remains high. http://www.mortgagenewsdaily.com/mortgage_rates/blog/120772.aspx

Alot of good news for the economy which is usually bad news for bonds because it pushes people out of bonds into stocks because they want to captialize on the gains of our economy.

However we are still seeing the improvement in the bond market which is keeping rates in the 4.5% to 4.75% range depending on borrower FICO, donw payment etc; always remember a interest rate is a custom quote for each borrower.

BUT BEWARE... bonds have a long way to fall and it could happen suddenly as the remaining economic reports are released today. LOCK those rates in don't regret later.... GREED in this voititale market can come back to bite you.... As I'm typing this Bonds have already lost some small gains from yesterday with all the good news that was released with more news to come.....

The Tresasury is auctioning off another $32B in 7 year notes, if the auction goes well then bond prices may hold but if the auction doesn't we could see a decline. Remember these notes are our debt and if no one is really interested in purchasing it hurts the bond market. Yesterday's auction of $42B of 5 year notes was well received. GDP and Consumer Confidence came in slightly better than expected which could be part of what pushed the stock market up as this can be a indicator for an improved economy pushing people out of the safe haven of bonds into stocks. http://www.mortgagenewsdaily.com/consumer_rates/120561.aspx Article on why to LOCK

http://www.mortgagenewsdaily.com/mortgage_rates/blog/ Mortgage Back Securities Commentary

Real Estate Professionals Giving Back to the Community

Kathleen Davis (Cherry Creek Mortgage) — Tue, 24 Nov 2009 18:13:58 -0600

VALLY REAL ESTATE NETWORK

The 2009 VREN "Making A Difference" Fund

I hope you will join us this year in contributing directly to the fund and or attending the event. Thank you for helping us, help those in need!

http://www.vmamakingadifferencefund.org/default.html

Sincerely,

Roy Dronkers

President,VREN

925.872.8671

Mortgage Update with Bond auction results

Kathleen Davis (Cherry Creek Mortgage) — Tue, 24 Nov 2009 11:24:06 -0600

Bonds finished up 25bp as the Fed minutes from their previous meetings indicate no rate hikes anywhere in the near future. The Fed expects unemployment to remain high in the range of 9.3-9.7% in 2010---- that may prove to be very optimistic.

Stocks were down 17pts.

Update.....Auction results were very good, and bonds are up 28bp at $102.28. $102.28 is the exact top reached in early October. It will be interesting to see if bonds have any steam left.

Looking at the bond page bonds have gone up so we this could put some in a posiiton to maybe re-price but maybe not. With rates as good as they are now the banks probably will just hold steady on pricing for today.

Bonds prices are really pushing the next ceiling of resistance which gives bonds a long way to fall.

Earlier posted.....Mortgage Bonds are slightly higher, but off their best levels of the morning. Once prices approached the intraday high from October 2^nd, they subsequently backed off. This has us on guard as the market appears overdue for a move lower. What continues to prop prices up? As we have been discussing, it's the weak Dollar and carry trade.

In the news, the Preliminary Gross Domestic Product reading for the 3rd Quarter was reported in line with expectations, while Consumer Confidence was reported slightly better than expected. Also, the Case-Shiller Index for September reported a slight rise in home prices in the 20 largest US cities, marking the 5th consecutive month of price increases.

At 1pm ET, the Treasury will auction a record $42B in 5-year Notes. This follows yesterday's good auction results of 2-Years, which helped push Bond prices higher. Then at 2pm ET, the Fed Minutes from the November 4th meeting will be released. It will be interesting to see if there were any comments from members regarding removing the current accommodative policy. And looking ahead, next Thursday December 3rd, is the day the Senate decides to either approve or disapprove Obama's nomination of Fed Chairman Ben Bernanke to a second term. There has been chatter from some, including Chris Dodd, suggesting that Bernanke's nomination is in jeopardy - but we think it will go through.

Based on where Bond prices are right now in relation to resistance and historic highs, I recommend locking in recent gains. There is no rush but bond prices seem to be bouncing back and forth on that 1st line of pricing resistence thus we could see some gains or we could see some sudden losses thus getting a re-price for the worse.

Interest rates are very good holding at around that 4.875% to 5.125% depending on if you are conforming or high balance conforming. If you are closing in the next 10 days lock in and not stress about it as you have a great rate.

Refinance a Conventional Loan into a FHA Loan because owe more than value of home

Kathleen Davis (Cherry Creek Mortgage) — Thu, 19 Nov 2009 22:05:44 -0600

You can refinance your conventional mortgage into a FHA mortgage.

This is for loans that are $417K and under. The guidelines for loan amounts > $417K to $729,750 maybe different.

Central Contra Costa County California Real Estate: Supply and Demand Comparison for Alamo detached / attached properties) October 2009

Kathleen Davis (Cherry Creek Mortgage) — Thu, 19 Nov 2009 13:10:17 -0600

Good info on the local market in Contra Costa County.

Via Pete Sabine (J Rockcliff Realtors):

I have posted Multiple Listing Service (MLS) Supply and Demand Comparison Statistics for Alamo, California real estate (detached / attached properties).

Easy to read charts and graphs to provide you with accurate up-to-the-minute information for the local Central Contra Costa County real estate market.

To learn how to interpret this information or further discuss, please feel free to contact me directly or post a comment to the blog. Contact me at (925) 385-2340 (PST) or send an email to Pete@ContraCostaLiving.com. Visit Pete's web site www.ContraCostaLiving.com

Interest Rates Nov 19, 2009

Kathleen Davis (Cherry Creek Mortgage) — Thu, 19 Nov 2009 11:29:12 -0600

Mortgage Bonds are trading slightly higher and, for the moment, remain relatively close to the best prices of 2009.

This morning, Initial Jobless Claims met expectations, and Continuing Jobless Claims fell by 39,000. Once again, that drop is likely due to benefits expiring, rather than people finding jobs. Later today, the Treasury Department will announce next week's auctions, which could add volatility to the market, depending on how the announcement is received.

Currently, Bonds are near their highs for the year. Therefore I recommend locking, since there's presently a higher risk of Bond prices moving to the downside than there are potential gains available to be made on the upside.

Interest rates are holding in the 4.875% range on a 30 year fixed. Remember that interest rate quotes are custom to each individual. Factors that must be considered are credit score, type of loan, down payment, reserves, area buying, co-borrower, etc.

In the case above 4.875% on a FHA loan with 3.5% down, 30 year fixed, 620 FICO, no reserves left at closing, with 1 point on a $500K home purchase.

4.875% for a conventional loan 30 year fixed with 20% down on a $500K purchase need 700 FICO. In this same scenario if your credit score is 680 your interest rate is now 5.125% on a 30 year fixed. All with 1 point orgination fee.

Just a small change in credit score and loan program can change the dynamics of the interest rate.

Never take them at face value.

Can I combine my 1st and 2nd mortgage into 1?

Kathleen Davis (Cherry Creek Mortgage) — Wed, 18 Nov 2009 17:47:14 -0600

Yes you can but you need to find out what your loan to value will be when you combine the two as banks are limiting the amount they will loan on a cash out refinance.

You maybe asking; I'm not taking cashout. In the eyes of the banks your 2nd is cashout because you took a 2nd mortgage out on your home's equity (like drawing on your credit card limit) and now you want to combine that cash you took out into a new securitized first mortgage. The equity in that home is reduced and will take longer to pay off combining it into a longer term mortgage. They look at your home equity line in someways like a credit card debt thus you are combining your cash debt (cash out of your home) into a first mortgage.

Banks also look at cash out refinances as a higher risk. Borrower is leveraging even more of their home thus reducing the amount of equity available. Putting the bank at risk if there is a foreclosure or short sale as the equity has been reduced because of the cash out thus leaving the bank and it's investors with a nonperforming investment.

Most banks will not allow a cash out refinance beyond 85% of the value of the home.

First Time Home Buyer Credit and More

Kathleen Davis (Cherry Creek Mortgage) — Wed, 04 Nov 2009 18:14:42 -0600

Good Day!!!

What a great time to be a Buyer, Seller, or Refinancer!
Interest Rates are the lowest in over 30 years. That is unbelievable. So what ARE YOU WAITING FOR! Move up, buy a home, or refinance.
Rates will not stay here forever.
OH wait and home prices at their lowest

Below you will find.....
-          First Time Home Buyer Tax credit
-          Extension of Higher Loan Limits
-          FHA Condo Changes
-          Change to Debt to income ratio
-          CAR helps buyers and Realtors stand out! - flyer attached

First Time Home Buyer Tax Credit - has NOT passed yet: Here is what we know:
- Has passed the Senate but has to go back to the House than to the President
- 10% of the purchase price to max of $8K for FTHB
- Extended to Apr 30 but COE has to be within 60 day after
- Move up buyers eligible; has to have lived in their house the last 5 of the 8 year; eligible for $6500 credit
- Capped at purchase price to $800K
- Income limits are expanded to $125,000 on a single return and $225,000 on a joint return. Current law $20,000 phase-out retained.

Extension of Higher Loan Limit
There is a bill that has passed House and Senate that is to extend unemployment benefits. Also tied to this is the extension of the High Loan Limit of $729,750. It is sitting on the President's desk waiting for signature....

FHA Condo Changes Dec 7th
There has been no full release of the new guidelines yet by FHA. We do know:
- Spot approvals will no longer be allowed
- Condos FHA approved prior to Nov 2008 will no longer be FHA approved
- Banks will be allowed to do the approval but there will be heavy fines ($1M or $500K I've heard both) if HUD finds the approval not to regulation/liking.
- The cost for an HOA will be $3 to $5K for the approval
- HUD will take 8 to 12 weeks to approve
- Only 30% of all condos in the complex can have FHA loans

CAR Help Buyers - Mortgage Protection Program -   http://www.car.org/aboutus/hafmainpage/carhafmortgageprotection/
     I made a call yesterday to find out that one of my clients a First Time Home Buyer a year ago was laid off 3 months ago. I gave him some advice but what could I say.
There is something that you can do for you current First Time Home Buyers. I've told you about this before but I think we all need a reminder......
                              C.A.R. Housing Affordability Financing Mortgage Protection Program
Qualified buyers who lose their job due to Layoff maybe eligible to receive $1500 per month for up to 6 months to help them making their mortgage payments

Change to Debt to Income Ratios
     As I mentioned in a previous email; maximum debt to income ratio guidelines are changing.
Date has been moved to Dec 12th with the release of Fannie Mae's updated underwriting software (DU).
The max debt to income ratio of ALL LOANs will be 45% with exception to 50% with compensating factors; reserves at closing, high FICO (680 or higher), 10% or more down payment, no derogatory credit history, and others.
           What is debt to income ratio: all expenses / total income
            Example: Two Borrowers; Total expenses before purchase of new home of $1000
           - Total income is $6000
           - Borrower is purchasing a home for $200K with total house payment of $1800
                    (principal/interest/property taxes/insurance)
           - Debt to income ratio ($1000+1800)/$6000 = 47%

Condo FHA changes date MOVED AGAIN... DEC 7th

Kathleen Davis (Cherry Creek Mortgage) — Thu, 22 Oct 2009 14:40:39 -0500

Condos in Trouble

FHA has just issued new condo guidelines that will become effective on October 1, 2009. If you currently either have buyers interested in purchasing condos or clients looking to sell their condo you need to know the facts below:

As of right now, after December 7th now... FHA is voiding all condo project approvals that were done BEFORE October 1, 2008
This means FHA loans will not be able to be done in an ineligible project until it is Re-approved which will be a difficult and lengthy procedure
A project approval will cost $1,500 and up and FHA is now going to require an attorney's opinion letter, which can be another $800 or higher.
Spot FHA condo approvals will no longer be allowed
- This means that if you have a condo client who wants to buy or sell FHA, you should get them to do it NOW. After November 2^nd, the whole project will have to be approved for just one FHA loan and will be a long and tedious process
  - Project approvals are currently taking 6-8 weeks. If FHA holds to their current November 2^nd rules, and some 55,000 condo projects nationwide have to get re-approved, who knows how long an approval may take.
Only 30% of the loans in any project will be allowed to be FHA loans
- For example in a 30 unit project only 9 FHA loans will be allowed. Since FHA is the preferred program currently for most condo buyers, condo sales for the remaining 21 units will be difficult

LET CHERRY CREEK GET YOUR CONDO PROJECT APPROVED. We have one of the best and most experienced project approval experts in the U.S. on our Cherry Creek staff. This gives you a huge advantage over your REALTOR^® competitors in the condo arena.

Mortgage update

Kathleen Davis (Cherry Creek Mortgage) — Tue, 13 Oct 2009 18:59:20 -0500

Highlights of the Day and other info:

- Bond Market Highlight

- FHA HVCC implemenatation

- Tax credit extended for Active Military

- Fannie and Freddie cutting debt to income allowances impacting government loans as well

- Buyers Choice Act

Bond Market Highlights:

Stocks closed last week at their highest level since October 2008. Mortgage Bonds, on the other hand, were unable to close above resistance and were ultimately pushed lower. As we head into this week, two important news items are worth repeating... and worth sharing with your database.

First - as we explained in last Friday's Market Update, the remainder of the Fed's purchase program equates to $12 Billion per week in purchases. However, since the Fed is reducing the frequency of purchases, it may elect to purchase $24 Billion every other week. This is significantly lower than we've seen up until now, which will probably lead to softer Bond prices and higher mortgage rates.

Second - don't forget Fed Chairman Bernanke's remarks last week about the Fed raising its Fed Funds Rate at some point down the road to protect against inflation. Even if inflation looks tame now, this is insight you and your referral partners can use to educate and better advise clients who are sitting on the sidelines waiting for better rates. After all, when you combine Bernanke's comments with the news about the Fed dialing back its purchases of MBS, it is highly unlikely that future rates will be lower or even equal to where they have been recently.

FHA HVCC implementation???

Yes, starting January 2010 FHA appraisals can no longer be ordered by anyone that will receive a commission or monetary compensation from the transaction. FHA also implemented in Oct that any appraisal done must also be licensed by the state.

REMEMBER!!! Cherry Creek Mortgage Company, Inc does not use AMC to ordered appraisals. Our appraisers are LOCAL and are VERY experienced! Are list of appraisers are those we have been working with for sometime and our system complies with all our investors and the HVCC.

House Passes Legislation Extending FTHB Tax Credit for Active Military

The House of Representatives voted unanimously Monday to extend the deadline for the home buyers tax credit for one group of Americans.

HR 3590 will allow eligible military personnel and foreign service and intelligence officers to apply for the $8,000 tax credit for one year beyond its current November 30 deadline. Those meeting the underlying requirements for the credit must also be serving overseas or have spent at least 90 days deployed outside of the country during the current calendar year. It is expected that about 350,000 military personnel and an unknown number of federal employees may be affected by the new law.

The bill, introduced by Representative Charles Rangel (D-NY) because it was thought that families serving overseas were being passed over for this one-time opportunity to purchase a home. It passed the Housed passed with 416 votes and 16 abstentions.

Fannie and Freddie Cutting DTI Allowances to 45%?!

What this means is that borrowers who could afford a $500k home today will have to settle for a $400k home in the future. Get those buyers moving!

The maximum allowable total expense ratio in DU will be revised to 45 percent, with flexibilities offered up to 50 percent for certain loan casefiles with strong compensating factors. If current debts exceed the maximum allowable total expense ratio, the loan casefile will receive an Ineligible recommendation. This will apply to government loans FHA/VA. Investors will take on this new guideline. As mentioned in a previous email Cherry Creek Mortgage Company, Inc as implemented this guideline for loans that fund after Nov 13^th as to allow us time to sell those loans with DTI higher than this guideline to end investors. Thus new loans funded after Nov 13^th will be under the new guidelines.

Governor signs AB957; Buyers Choice Act

Prohibits sellers of so-called REO properties - typically foreclosed properties owned by banks - from requiring the buyer to use a particular title company, escrow settlement or other real estate service provider. http://www.prnewswire.com/news-releases/buyers-choice-act-ab-957galgiani-signed-into-law-64103832.html

Bonds Market:

Condo FHA changes now effective Nov 2nd!!

Kathleen Davis (Cherry Creek Mortgage) — Fri, 18 Sep 2009 00:16:52 -0500

Condos in Trouble

As of right now, after November 2^nd FHA is voiding all condo project approvals that were done BEFORE October 1, 2008
This means FHA loans will not be able to be done in an ineligible project until it is Re-approved which will be a difficult and lengthy procedure
A project approval will cost $1,500 and up and FHA is now going to require an attorney's opinion letter, which can be another $800 or higher.
Spot FHA condo approvals will no longer be allowed
- This means that if you have a condo client who wants to buy or sell FHA, you should get them to do it NOW. After November 2^nd, the whole project will have to be approved for just one FHA loan and will be a long and tedious process
  - Project approvals are currently taking 6-8 weeks. If FHA holds to their current November 2^nd rules, and some 55,000 condo projects nationwide have to get re-approved, who knows how long an approval may take.
Only 30% of the loans in any project will be allowed to be FHA loans
- For example in a 30 unit project only 9 FHA loans will be allowed. Since FHA is the preferred program currently for most condo buyers, condo sales for the remaining 21 units will be difficult

Free Seminar to increase your business!

Kathleen Davis (Cherry Creek Mortgage) — Mon, 14 Sep 2009 12:10:46 -0500

What Realtors are saying about Cherry Creekâ€^TMs Purchase Reverse Seminar

This is a FREE opportunity to help a growing population. Especially today with those that have lost more or all of their 401Ks or retirement and trying to figure out how they are going to get by. Here is a possible solution for you to be a HERO!

WHEN:

Tuesday, September 15th

WHERE: 4309 Hacienda Drive #360, Pleasanton, CA 94588

TIME: (8:45 - 9:30 continental breakfast) 9:30 A.M. to 12:30 P.M. - it will be a very profitable use of your morning so please donâ€^TMt bail out if something else comes up

(there is always â€œsomething elseâ€*)

Be sure to come to this one on: Tuesday, September 15th

4309 Hacienda Dr., Suite 360, Pleasanton, CA 94588

RSVP needed; email: kdavis@ccmclending.com or call 1-800-325-2062 and tell them you are a guest of me Kathleen Davis

As a 30 year real estate veteran I found the reverse mortgage seminar very educational and exciting. This reverse mortgage product is not like the reverse mortgages of years ago. In this current challenging economic climate this reverse mortgage offers seniors both peace of mind and the freedom to move into a more appropriate home. This vehicle can improve the quality of life for many people of aging generation. Every REALTORÂ® needs to understand the inner workings of the reverse mortgage so they can operate as true housing specialists. I got more important information out of this class than any other educational format I have been to in the past year or two. Sharon Luther, REALTORÂ®, CRS, SRES, Mediator; Windemere Properties of the East Bay
I want to thank you for the invitation to the Purchase Reverse Mortgage Seminar held this week. It was very informative and interesting in that this is certainly helpful for some of my clients. With this seminar I am very interested in pursuing clients who may be helped by your product. Barbara Sanchez
I really enjoyed it. Barry was a fantastic speaker. Very informative and made it easy to understand. Kate Hardwig Prudential Realty

Mortgage Update

Kathleen Davis (Cherry Creek Mortgage) — Mon, 14 Sep 2009 11:47:26 -0500

Key things that you need to be telling your clients this week

Rates for home loans remain low - but it won't last forever. The Fed continues on their purchasing plan of Mortgage Backed Securities, and the added demand has kept Bond prices high and home loan rates low. Last week, they purchased another $32.4B, bringing the total to $849B out of the $1.25T they committed to. While these Fed purchases have helped home loan rates stay near present low levels, remember that their buying program is set to be over near the end of the year. There is talk that the program will be extended - but there has also been talk that it will end early - so nothing is a guarantee, except for the fact that when the Fed purchasing program is over, home loan rates will assuredly rise.
President Obama imposed a special tariff on Chinese tires late Friday to help address the job losses among US tire workers. As a result, there is some concern that China could unload some of their US security holdings, largely Mortgage Bonds, which would cause home loan rates to increase.
$8K tax credit ENDS Nov 30^th!　 There is rumor it probably will be extended but nothing has been confirmed.　 The focus on the hill is health care and jobs.

The market is volitale and could be getting more with the news of the tariff on China.　 Remember China is buying up a lot of our debt right now in the form of bonds in response they could dump a bunch of those bonds thus sending interest rates up in response.　

Last Week in Review

"BEFORE ANYTHING ELSE...PREPARATION IS THE KEY TO SUCCESS." Alexander Graham Bell

Rates for home loans remain low - but it won't last forever. The Fed continues on their purchasing plan of Mortgage Backed Securities, and the added demand has kept Bond prices high and home loan rates low. Last week, they purchased another $32.4B, bringing the total to $849B out of the $1.25T they committed to. While these Fed purchases have helped home loan rates stay near present low levels, remember that their buying program is set to be over near the end of the year. There is talk that the program will be extended - but there has also been talk that it will end early - so nothing is a guarantee, except for the fact that when the Fed purchasing program is over, home loan rates will assuredly rise.

In addition, given the current expiration date of November 30, 2009 for the $8,000 First Time Homebuyer credit, it's important for homebuyers to get prepared, and take action. In fact, many homebuyers are doing just that already. The Mortgage Bankers Association reported that home loan applications surged in the latest week to their highest level since late May, as more buyers are seeing the great opportunity that exists right now. Let me know if I can answer any questions for you, or perhaps a friend, family member, neighbor or coworker that might be thinking about a home purchase. The combination of reduced home prices, motivated sellers, low home loan rates, and the potential of a juicy tax credit is too great an opportunity to miss.

The Stock market is doing well - and as you can see in the chart below, the S&P 500 Index closed at its highest level of 2009 last Thursday. The S&P 500 is a basket of 500 Stocks that are considered to be widely held, and is considered by most market experts as one of the best benchmarks available to judge overall US Stock market performance.

In other economic news, Consumer Sentiment came in stronger than expected and Initial Jobless Claims were also reported better than expected, but still at a high level. Continuing Claims, which represent the number of people still receiving unemployment benefits, dropped a bit, but this realistically may be due to benefits expiring rather than people finding new jobs.

Forecast for the Week

Be prepared for a jam-packed week of economic reports ahead! Tuesday brings both the Retail Sales Report, which is the most-timely indicator of broad consumer spending patterns, and the Producer Price Index (PPI), which provides information about inflation at the wholesale level. There will also be more inflation news coming on Wednesday with the Consumer Price Index (CPI). CPI is an important measurement of inflation (and deflation) because it measures the average prices paid by consumers for goods and services, and what the change is in those prices over time.

And things won't slow down then...Thursday will bring a read on the housing market with the Housing Starts and Building Permits Report, followed by a read on manufacturing with the Philadelphia Fed Report, which is one of the most widely-watched manufacturing reports. Thursday will also bring another Initial Jobless Claims Report. This weekly report continues to be important to watch as the job market plays a key role in our economic recovery.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Bonds have been able to remain above a key technical support level, and I'll be watching closely to see if Bonds and rates continue to improve.

Condo Gudielines Change Sept 30th Effective!

Kathleen Davis (Cherry Creek Mortgage) — Fri, 11 Sep 2009 13:11:39 -0500

Condos in Trouble

As of right now, after October 1^st FHA is voiding all condo project approvals that were done BEFORE October 1, 2008
This means FHA loans will not be able to be done in an ineligible project until it is Re-approved which will be a difficult and lengthy procedure
- A project approval will cost $1,500 and up and FHA is now going to require an attorneyâ€^TMs opinion letter, which can be another $800 or higher.
Spot FHA condo approvals will no longer be allowed
- This means that if you have a condo client who wants to buy or sell FHA, you should get them to do it NOW. After October 1^st, the whole project will have to be approved for just one FHA loan and will be a long and tedious process
  - Project approvals are currently taking 6-8 weeks. If FHA holds to their current October 1^st rules, and some 55,000 condo projects nationwide have to get re-approved, who knows how long an approval may take.
Only 30% of the loans in any project will be allowed to be FHA loans
- For example in a 30 unit project only 9 FHA loans will be allowed. Since FHA is the preferred program currently for most condo buyers, condo sales for the remaining 21 units will be difficult

CALL ME to strategize and to get a complete list of FHA project eligibility requirements.

New Rules that went into effect July 30th are you up to date?

Kathleen Davis (Cherry Creek Mortgage) — Thu, 10 Sep 2009 12:11:54 -0500

Mortgage Disclosure Improvement Act Went Into Effect on July 30, 2009

Overall, there are 4 major reasons behind this law, created to protect consumers who apply for a mortgage. But most importantly, I would like to share how it will be affecting you, your sellers and your buyers.

Uniformity - Every lender must now use the SAME Good Faith Estimate. It's easier to read and includes detailed mortgage loan terms, estimated closing costs and annual percentage rate. The term "business days" has been defined and means Monday through Saturday, EXCEPT Federal holidays.
Disclosure - If anything changes during the processing of the loan - if the loan terms change, the down payment, closing costs, APR (by more than 1/8% higher), another disclosure must be sent to the consumer.
Waiting Periods - The consumer is given "time" to review all disclosures. There is an extra layer of protection where there is a 7-day waiting period before the loan can close.
Comparison Shopping - The new Good Faith Estimate Form now includes a section called "Using The
Shopping Chart". It encourages consumers to compare loan term, closing costs and interest rates with up to 3 other lenders.

What You Need to Know...

When negotiating the date of closing, make sure it's flexible and there are no penalties for not closing on the specified date. The waiting periods are "Federal Law" and preclude the terms in written contact.
No last minute down payment changes.
No "floating the interest rate" until the last minute. Encourage your buyers to lock-in at least 7 to 10 days before the projected close date.
No switching of lenders at the last minute. The disclosure process starts over again with another lender.
No waivers - unless it's a hardship case with tens of thousands of dollars at stake because the law is written as such that a "waiver" will be virtually impossible to obtain.
Notify your loan officer if anything...and I MEAN ANYTHING CHANGES on the purchase agreement. This could require a re-disclosure and delay the closing.
Appraisal disclosure plays a part in this as well. Even if all loan disclosures are met, the consumer has another 3 days to review the appraisal.

The bottom line: The days of negotiating the deal at the last minute ARE GONE-unless your buyers and sellers are prepared to delay the closing date.

FHA MYTHS! Good borrowers and good loans!

Kathleen Davis (Cherry Creek Mortgage) — Wed, 09 Sep 2009 18:35:39 -0500

The Truth About FHA Financing

There is a ton of misinformation and wrong perceptions about FHA financing among REALTORS^® and REO/Short-sale sellers. Unfortunately, these items are keeping deserving first-time homebuyers, who only have the capability of making small down payments from buying, and REO/Short-sale sellers from reducing their inventories of foreclosed homes as quickly as possible.

We can't speak for other lenders, but at Cherry Creek the following are the truths about FHA financing.

Misperception Number 1 - FHA loans take too long to close:

TRUTH - At Cherry Creek we are closing FHA loans in 30 days or less barring unforeseen problems with a borrower's documentation or difficulties with the property value. FHA's are faster than most conventional loans. Why? Partly because we order our FHA appraisals directly, not through an Appraisal Management Company as many other lenders do. Our appraisers give us quick turnaround too

Misperception Number 2 - Termite clearances are always needed on FHA loans:

TRUTH - New FHA Guidelines say that a termite inspection/clearance onlyrequired if there is something that affects the safety of the occupants or the soundness (structural integrity) of the property. Very few of our appraisals require a termite clearance.

Misperception Number 3 - Sellers costs are higher on FHA loans:

TRUTH - The only mandatory seller's cost on an FHA loan is the tax service fee. Which is only $76.

Misperception Number 4 - FHA appraisals contain unnecessary repair conditions:

TRUTH - FHA allows "AS-IS" appraisals except where something may affect the safety of the occupants or the structural integrity of the property.
As far as Cherry Creek FHA appraisals are concerned, there are no unnecessary repair conditions. This may not be true from other lenders using AMC's, however.

Misperception Number 5 - Lenders don't know what they are doing on FHA loans:

TRUTH - At Cherry Creek we have been doing FHA loans since 1986 and our processors, underwriters, closers and appraisers who each have 10-15 years FHA experience. We do know what we are doing.

Nobody has to be afraid of FHA financing if Cherry Creek is the lender!

Inflation and Interest Rates

Kathleen Davis (Cherry Creek Mortgage) — Tue, 28 Jul 2009 13:45:14 -0500

What's Going on with Inflation and Interest Rates?

If you've seen the news lately, you know concerns about inflation are increasing. But what does it really mean to you?

The fact is, inflation is a very serious issue, and it will likely be on the rise as 2009 proceeds...and along with it, home loan rates will rise too.

To help you learn more about this important topic, I have attached a link to a short video, featuring the nation's foremost mortgage industry expert. In this video (you may need to hold cntrl key as you select the link), you'll learn how inflation impacts interest rates and what the outlook is for down the road.

Because home loan rates will be on the rise, if you or any of your family, friends, neighbors or co-workers have been considering a purchase or refinance, now's the time to act.

Please contact me today to discuss your specific situation, and feel free to forward this email and video link along to others that you think might benefit from it as well.

Watch the Video

Interest Rates Rally....

Kathleen Davis (Cherry Creek Mortgage) — Thu, 09 Jul 2009 13:20:06 -0500

Just keeping my fingers on the pulse of interest rates for you and that pulse is still volatile.....

As we all saw on May 17^th interest rates went up about .75% which fluctuated up and down about .125% until recently. At the end of June we saw rates come down about .25% and just in the last 24hrs we have seen them come down another .25%.

What's happening.....

The Treasury auctioned off 10 year Treasury notes which were received very favorably thus driving the price of Bonds up thus the yields of those bonds look better giving us a reduction in interest rates. China in the middle of June made a statement that they would continue to be purchasing our debt (stimulus debt in the form of bonds) giving Bonds another push up as well as Hedge Fund Paulson & Co stated they would continue to purchase distressed debt. Thus since June we have been in a somewhat float pattern on locking due to the favorable bond market, weak economic news, and those purchasing our debt.

However..... we are starting push at the upper resistance of the bond level of the 100 day moving average; this is a big resistance to break through. The flipside of the favorable auctions of bonds means that the bond market is starting to see the over bought position again (May) which could cause bonds to drop suddenly thus causing interest rates to go up again.

Will have to watch very carefully over the next days.

Do not wait volitality in interest rates as well as time is ticking on the Tax Credit. The final HUD1 statement has to be dated no later than 12/1/2009 in order for First Time Home Buyers to qualify for it. It's almost of the middle of July.... Not much time left.

Interest Rates holding from yesterday (June 24th)

Kathleen Davis (Cherry Creek Mortgage) — Wed, 24 Jun 2009 14:17:18 -0500

Bonds slightly down but interest rates are holding but if you are in contract you might want to think about locking. The FED met today, the federal funds rate will remain the same at 0 to 1/4% as well as will continue to purchase up to $1.25 trillion in of mortgage back securities. This will help to keep interest rates down for a bit. If you are floating be careful and be in close contact with you mortgage professional! (me I hope)

Bond market ended yesterday day up slightly living rates unchanged but we are seeing them decline slightly this morning with rumors of what will come out of the FED meeting.

Today:

FHA rates today 30 year fixed:
- Remember! min 620 score, min 3.5% down, and NO reserves required; condo and single family home interest rates the same
  - < $417K on a 30 year fixed: 5.375%
  - > $471K to $729K FHA High Balance 30 year fixed; 5.5%
- Remember FHA can close just as quickly as conventional and the inspections requirements are the same.
- Agents are missing out on good buyers by not accepting FHA offers.
- FHA buyers are taking advanatge of the low down payment option, low FHA interest rates, and not having to liquidate their savings to get into a home and the PMI is minimal. Why not take advantage of this program.
- FHA does not require pest/termite inspection unless appraiser notes something in the appraisal that would require further inspection
Conventional lending:
- min 10% down on a single family home; condos 15%
- < 20% down must have min credit score of 720 or in some cases 740 to get PMI
- interest rates as credit score goes below 720 go up
  - Rates today for Conventional 30 year fixed
    - loan amount: < $417K; 20 % down
      - >=720 credit ; 5.375%
      - 700 - 719 credit score; 5.625%
      - 699 - 680 credit score: 5.875%
      - 679 - 620 credit score: 6.125%
    - > $417K; 20% down
      - >=720 credit ; 6.125%
      - 700 - 719 credit score; 6.625%
      - for credit scores below the pricing gets worse, why would you go conventiona! go FHA
    - 10% down 30 year fixed
      - < $417K; 5.375%
      - > $417K to $729K: 5.75%
    - 15% down condo
      - < $417K: 5.625%
      - < $417K to $729K; 6.375%

Talk with a loan professional (call me anytime) and talk about your options for buying a home.