Mike Berrios CMPS, CMA, CLA's Blog

Fannie Mae to require 2nd credit check before funding starting June 1, 2010

Mike Berrios CMPS, CMA, CLA (Integrity Home Finance) — Thu, 13 May 2010 00:05:22 -0700

If you're like most soon-to-be new homeowners waiting for your house to close, you keep thinking of projects you can do and things you need to buy to make your home just right.

It could be the carpeting that doesn't match your furniture, or maybe you don't want your old refrigerator in your new home. You're probably considering hitting the big-box stores so you can get your hands on all the new state-of-the-art gadgets and appliances to your new home.

You're also probably tempted to just pull out your credit card and charge the purchase, or maybe you're lured by a "12-months-with-no-interest" offer. You could have the installers on their way as soon as you have the keys!

As is often the case, what we want isn't what's best for us. Fannie Mae's new rules go into effect June 1 that require lenders to pay more attention to changes in your credit report from the day you applied until the day you close.

Lenders must refresh your report to see if your credit balances have changed or if you have acquired a new debt. They must even check out credit inquiries to see if you are obligated to pay back any 'new' loans. Lenders also have access to new fraud detection tools that can determine if you are trying to work around the system or if you have undisclosed debt.

Note that lenders can put these new rules into effect at any time prior to June 1, and for most borrowers, new debt could delay closing, or the bank could even decide against approving the loan altogether.

If you are buying a home, pay cash for all the new things you want, or wait until you can really afford the new purchases. Don't even let stores run your credit to see if you qualify. Plan a little slack in your moving schedule so you can have new carpets, appliances, etc. installed before you have to move from your old home.

Market Color

Mike Berrios CMPS, CMA, CLA (Integrity Home Finance) — Fri, 07 May 2010 14:21:59 -0700

Market Color: How many times is it appropriate to say "What?" before you just nod and smile because you didn't hear or understand a word the individual said? How many times can you point to the same excuse or reason for what is going on in the market before you repeat yourself. Same song again today with the issue in Greece with the Euro still falling against the dollar, labor department reported jobless claims at 444,000 as analysts want it lower than 400,000 to signal some form of job growth. Unemployment number to be released tomorrow and that is expected to remain the same or maybe a tick lower. Right now, the futures market is pricing in a 76% chance that the Fed keeps rates at .25% through September 21st, 2010. Currently, the Ten Year yield is at 3.56% (3.55% yesterday). 30 year fixed rates looks like it will hold a .125% improvement in price from the market open.

Market News

Mike Berrios CMPS, CMA, CLA (Integrity Home Finance) — Fri, 07 May 2010 14:20:50 -0700

Market News: The tug of war continues about who is going to have the responsibility to regulate independent mortgage bankers. Senate Republicans are pushing for a division of consumer protection within the FDIC to oversee nonbank mortgage firms and write consumer regulations. The proposal also would continue the practice of having federal laws override state laws. Meanwhile, a Democratic plan backed by the White House would place an independent bureau within the Federal Reserve to police customer financial service transactions. It would allow states to write and enforce tougher laws -- language opposed by the financial industry.

Meanwhile we see the first suggestions being advanced on what to do with Fan and Fred. Sens. Richard Shelby, R-Ala., John McCain, R-Ariz., and Judd Gregg, R-N.H., have introduced an amendment to the Democrats' financial reform bill requiring "conservatorship" of Fannie Mae and Freddie Mac to end within two years. Once the firms are no longer under federal control, they would be stripped of their mandate to promote affordable housing; and the government's role in mortgage finance would be sharply scaled back.

Amendments after amendments are being introduced to the Financial Reform Act. Now we have a Senator that is suggesting that a "Self Employed Home Loan" be developed for the loan market. Senate leaders late Tuesday cleared the way for Sen. Olympia Snowe, R-Maine, to offer an amendment allowing mortgage bankers to originate residential loans to small business owners with flexible payment schedules that reflect seasonal changes in cash flows. The Snowe language would amend the Consumer Financial Protection Agency section of the financial services regulatory reform bill, putting such mortgages in a category where they will not be considered abusive by the new agency. "The bill does not take into account that many entrepreneurs use home mortgage loans with customized payment terms," Sen. Snowe said. (Until the credit crisis, some self employed workers used payment option ARMs, or "NINA" loans to obtain housing credit but those loans have since fallen out of favor and are now viewed warily by consumer groups and many elected officials as well as regulators.) Once Senate leaders reach an agreement to start the voting process, the Snowe amendment is expected to be adopted.

And finally in our news section today, we have another Senator that is working to establish minimum underwriting standards for all residential lenders and attach it to the Financial Services Regulatory Reform bill. An early draft of Bob Corker's R- of Tennessee, amendment would prohibit warehouse lenders and wholesalers from funding mortgages that do not meet the minimum standards. Sen. Corker has complained that the current bill before the Senate does not prevent the underwriting of bad loans. His amendment directs the federal banking regulators to establish minimum standards with specific requirements for a downpayment. It is understood that the senator wants a minimum 5% downpayment requirement. It seems that any new products or underwriting limitations are now going to be decided in Congress not the marketplace.

Market News

Mike Berrios CMPS, CMA, CLA (Integrity Home Finance) — Fri, 07 May 2010 14:16:52 -0700

Market News: Financial reform moved closer to a bill as the Senate cleared a hurdle on May 6, when Democrats blocked a GOP attempt to dilute the size and scope of a consumer regulator designed to safeguard borrowers from lender abuses. They did so by garnering the support of two key Republican lawmakers -- Sens. Charles Grassley of Iowa and Olympia Snowe of Maine -- who Democrats are counting on for support of their broader reform bill.

First we had to worry about our mortgage rates going up due to the FED not buying Mortgaged backed securities which thankfully has not been realized as other bidders have taken their place. Now we have to worry about the FED selling their large position of securities they hold. The Federal Reserve is debating how soon and how aggressively to sell some of its $1.1 trillion of mortgage-backed securities, a move that could lower MBS prices and boost mortgage borrowing costs. Translation, increase mortgage rates. Most Fed officials do not want to hold onto the MBS because that would lead some observers to believe the central bank would allow inflation to take hold in the future; they also are concerned that observers would view sales as a sign that the Fed wants to tighten credit.

While the tax credit has expired for the bulk of the people on April 30th, members of the U.S. military, foreign service and intelligence communities have another year to purchase a home and claim the home buyer tax credit. Any service member who is or has been on extended duty for 90 days or more between Jan. 1, 2009 to April 30, 2010, has until April 30, 2011, to sign a sales contract and until June 30, 2011, to close on the property. Both the $8,000 first-time and the $6,500 repeat home buyer tax credits are included in the extension. The rule that requires buyers to repay the credit if they move out of their home within three years has also been waived for qualified service members if they receive government orders to move.

The effect of the Tax Credit for housing was measured by First American on future home prices. That report if helpful to your realtor referral sources is attached. Another report and illustrations discuss the impact on home prices and the dreaded shadow inventory in the other attachment.

Given the turmoil and unrest, thoughts of ones own mortality can creep in. It seems A man dies and goes to hell. There he finds that there is a different hell for each country. He goes to the German hell and asks, "What do they do here?" He is told, "First they put you in an electric chair for an hour. Then they lay you on a bed of nails for another hour. Then the German devil comes in and whips you for the rest of the day."The man does not like the sound of that at all, so he moves on.

He checks out the American hell, as well as the Russian hell and many more. He discovers that they are all more or less the same as the German hell.

Then he comes to the Greek hell and finds that there is a long line of people from all nationalities waiting to get in. Amazed, he asks, "What do they do here?"

He is told, "First they put you in an electric chair for an hour. Then they lay you on a bed of nails for another hour. Then the Greek devil comes in and whips you for the rest of the day." But that is exactly the same as all the other hells. Why are there so many people waiting to get in?" He is told, "Because the maintenance crew is always on strike, there is no electricity so the electric chair doesn't work; Albanians have stolen all the nails from the bed; and the Greek devil is a former Greek government employee, so he comes in, signs the register, and then goes to have his kafethaki (coffee) and eat kourabiethes (cookies) all day."

Remember your mother this weekend and all the times she told you to take your nap when you were little. I totally take back all those times I didn't want to take my nap when I was younger. Sorry mom

Market Color

Mike Berrios CMPS, CMA, CLA (Integrity Home Finance) — Fri, 07 May 2010 14:15:51 -0700

Market Color: Can civil unrest in one part of the globe lower mortgage rates? Apparently so and oversized fingers on a stock market trade for some lucky trader who will have some explaining to do that sold 38 billion shares of Proctor and Gamble instead of 38 million shares can contribute as well. At one time the bond market was improved by almost 1.0% yesterday. Things remain a little unsettled today as investor worries and jitters continue. Our bond market started out negative and now has swung to the positive. Market psychology is ever so fickle. Nonfarm payrolls printed much higher than expectations, +290K vs. +190K consensus; the unemployment rate jumped up .2% to 9.9%; U6 is up to 17.1%. The SEC will conduct an investigation as to what happened yesterday with a supposed mis-entered trade and the subsequent almost 1,000 point DOW sell-off and immediate 650 point rally from the low. Right now, the futures market is pricing in a 67% chance that the Fed keeps rates at .25% through September 21st, 2010. Currently, the Ten Year yield is at 3.46% (3.56% yesterday). And your 30 year fixed rate mortgages are up .25% but rate sheets have not come in from investors to reflect it as of yet.

Market News

Mike Berrios CMPS, CMA, CLA (Integrity Home Finance) — Wed, 05 May 2010 20:55:50 -0700

As we watch the financial reform bill inch forward, which will have a sweeping impact on our business, beside lobbyists, others are concerned about the direction of the bill. Since Freddie and Fannie are not a part of the bill and the government sector is over 95% of loans being made today, concerns mount about what the liquidity will be in the capital markets for the mortgage market. Article in New York Times explores the issues attached.

http://dealbook.blogs.nytimes.com/2010/05/03/senate-financial-bill-misguided-some-academics-say/?src=busln

Market News

Mike Berrios CMPS, CMA, CLA (Integrity Home Finance) — Wed, 05 May 2010 20:54:51 -0700

Market News: The Rural Housing Service has enough remaining loan commitment authority to continue guaranteeing single-family loans through May 6, according to the Department of Agriculture. "We anticipate funding likely will be exhausted by May 7," the agency said. It was understood RHS would run out of loan authority on April 30 and the House quickly passed a bill (H.R. 5017) last Tuesday to extend the program through Sept. 30. Sen. Michael Bennett, D-Colo., has introduced a similar bill, but the Senate adjourned on Friday without passing it. The Senate resumes legislative activities on Monday. "Depending upon Congressional activity with the proposed legislation, it is possible that the agency may consider issuing conditional commitments," RHS said. The House-passed bill makes the RHS single-family program self-funding by raising the 2% upfront guarantee fee to 4%. RHS is expected to set the fee at 3.44%. The increase means Congress will not need to approve additional funding to keep the RHS guarantee program running. We still await the Senate for action.

Market News

Mike Berrios CMPS, CMA, CLA (Integrity Home Finance) — Wed, 05 May 2010 20:52:20 -0700

Market News

Mike Berrios CMPS, CMA, CLA (Integrity Home Finance) — Wed, 05 May 2010 20:51:20 -0700

Market News: Since the FED has backed out the MBS market and the expectations that rates would go up as much as 1/2 of 1% thankfully did not materialize, will we see the same with our purchase market now that the tax credits are expired. The National Association of Realtors expects activity to decline following expiration of the home buyer tax credit. Resales are projected to rise 4.3 percent, compared to NAR's forecast in April for a 6.5 percent increase for the year; but the group now anticipates a jump of 6.9 percent in sales of new single-family homes, compared to an earlier call for a 0.6 percent gain. NAR also expects resale home prices to rise 2.5 percent this year, down from the previous prediction of a 2.7 percent increase, and prices for new homes to rise 3.3 percent, better than the previous forecast of a 2.7 percent increase. We will know before the month is out for sure.

Market Color

Mike Berrios CMPS, CMA, CLA (Integrity Home Finance) — Wed, 05 May 2010 20:50:41 -0700

Market Color: Most people don't know that in 1912, Hellmann's mayonnaise was manufactured in England. In fact, the Titanic was carrying 12,000 jars of the condiment scheduled for delivery in Vera Cruz, Mexico, which was to have been the next port of call for the great ship after its stop in New York. This would have been the largest single shipment of mayonnaise ever delivered to Mexico. But as we know, the great ship did not make it to New York. The ship hit an iceberg and sank, and the cargo was lost forever. The people of Mexico, who were crazy about mayonnaise, and were eagerly awaiting its delivery, were disconsolate at the loss. Their anguish was so great that they declared a National Day of Mourning, which they still observe to this day. The National Day of Mourning occurs each year on May 5th and is known, of course, as Sinko de Mayo. This of course is not to be confused with Cinco de Mayo celebration when the Mexican Army overcame the insurmountable odds of defeating the French Army at the battle of Puebla on May 5, 1862. Many avocados, limes and Corona Extras will meet their demise in addition to mayonnaise.

Understand the California $10,000 Tax Credit

Mike Berrios CMPS, CMA, CLA (Integrity Home Finance) — Tue, 27 Apr 2010 12:44:09 -0700

I've received a lot of questions regarding the "New" California Tax Credit for home buyers that was recently passed in to law. Below is a great "snapshot" of the basics of the program. I have also provided you with a link to the official website for a deeper explaination if needed.

As always, if you ever have any questions or know of anyone looking to buy or sell, please do not hesitate in giving me a call.

Great News for California Homebuyers
$10,000 New Home and First-Time Buyer Tax Credits Available May 1

There’s good news for California home buyers who want to purchase a home
this year, but are unable to get under contract before the April 30th deadline
for the Federal Government’s $8,000 Homebuyer Tax Credit program. In late
March, Governor Arnold Schwarzenegger signed legislation that will provide
a state tax credit of up to $10,000 (5% of Sales Price) to Californians who
are buying their first home or purchasing a brand new home.

Here are important details to know about this tax credit:

Dates: These tax credits are available for taxpayers who purchase a qualified
principal residence on or after May 1, 2010, and before January 1, 2011.
The purchase date is defined as the date escrow closes. The tax credit will
be applied in equal amounts over three years.

For both the New Home Tax Credit and First-Time Buyer Credit: A qualified
principal residence must:

- Be a single family residence, either detached or attached;
- Be eligible for the California property tax homeowner’s exemption, and
- Be occupied by the taxpayer as their principal residence for a minimum of 2 years immediately following the purchase.

In addition, for buyers to be eligible for the New Home Tax Credit, sellers must certify that the property has never been occupied. For purposes of the First-Time Buyer Credit, a first-time buyer is any individual who has not owned a home in the three years prior to purchase.

Eligibility: Taxpayers will not be eligible for either tax credit if the
taxpayer (1) was allowed a 2009 New Home Credit, (2) is under 18 years old, (3) is related to the seller (or if the taxpayer’s spouse is related), or (4) is a dependent.

This tax credit is available to buyers on a first-come, first-serve basis!
The 2009 California Homebuyer Tax Credit ran out after just four months! For California residents planning to purchase a home in 2010, acting sooner rather than later could make a big difference in your wallet!

For more information, visithttp://www.ftb.ca.gov/individuals/New_Home_Credit.shtml.

Mike Berrios

Integrity Home Finance

Veterans get an extra year for Tax Credit!

Mike Berrios CMPS, CMA, CLA (Integrity Home Finance) — Tue, 20 Apr 2010 22:34:14 -0700

Did you know if a Veteran has served 90 days of any part in 2009 active overseas they qualify for the extended tax credit? Their extension is until May 2011 and if they get relocated and have to sell the home, they do not get penalized for selling sooner than 3 years!

Call or email me for more information

(909) 945-8155

mberrios@ihfinance.com

Up to $18,000 Tax Credit for California Home Buyers!

Mike Berrios CMPS, CMA, CLA (Integrity Home Finance) — Fri, 02 Apr 2010 10:57:01 -0700

Mortgage Rates for Today

Mike Berrios CMPS, CMA, CLA (Integrity Home Finance) — Thu, 04 Mar 2010 10:08:04 -0800

"Mortgage Bonds are continuing to hover above the 100-day Moving Average this morning. In the news, Initial Jobless Claims were reported inline with expectations, and Continuing Claims fell slightly. The numbers were so-so at best. Also, Pending Home Sales for January came in much worse than the expected, due in part to inclement weather.

Why Pre-Qualification takes longer

Mike Berrios CMPS, CMA, CLA (Integrity Home Finance) — Wed, 03 Mar 2010 23:47:09 -0800

As if things couldn't get any worst. Most lenders are now deducting any non-reimbursed employee (2106) expenses. Just a few months ago I can recall just looking at W2s and pay check stubs, but now they are reducing the qualifications of the buyer by deducting 2106 expenses.

Short Sales are here for a while

Mike Berrios CMPS, CMA, CLA (Integrity Home Finance) — Wed, 03 Mar 2010 01:04:39 -0800

Short sales accounted for 15.9 percent of home purchases in January, up from 13.7 percent in December, according to a monthly survey by Campbell Surveys and Inside Mortgage Finance. The percentage for last month was the highest since the survey was launched in July, topping the previous peak of 15.1 percent in October. Also, sales of real estate owned properties represented 27.2 percent of home purchase transactions last month, up from 25.5 percent in December.

The Obama Administration is providing $1.5 billion to housing finance agencies to develop innovative programs that might prevent foreclosures in some of the most economically hard hit states. HFAs in Nevada, Arizona, Florida, Michigan and California are expected to come up with new programs to help unemployed mortgagors remain in their homes until they find a new job. For borrowers with underwater mortgages, "HFAs may experiment with programs that would assist borrowers to negotiate with lenders to write down mortgages," according to a White House press release. To apply for the funds, HFAs have to submit proposals to the Treasury Department. We will have to watch for this as this support flows through to certain market areas.

Is the Tax Credit going to be extended?

Mike Berrios CMPS, CMA, CLA (Integrity Home Finance) — Wed, 03 Mar 2010 01:01:40 -0800

After studying 40,000 home loans in three cities over a period of 30 years, the National Resources Defense Council and the Center for Neighborhood Technology determined that the likelihood of foreclosure grew as neighborhood car ownership levels rose. The research suggests that if homeowners do not need to own a car, they are better able to weather financial shocks such as spiking gas prices or a job loss. The study recommends that lenders factor location efficiency and borrowers' transportation costs into underwriting decisions, thus providing "proportionally better borrowing terms for purchasers of location-efficient homes."

Is third time a charm for the extension of the federal tax credit for buying a home? The National Association of Realtors and other industry groups again are pressing U.S. lawmakers to extend the home buyer tax credit. Legislators have done so twice, but realty practitioners say the housing market is still fragile and the incentive is a sorely needed shot in the arm. They are stressing to elected officials that this is an election year for many and that a series of other market supports are already in the process of being eliminated. Finally, NAR and other industry groups argue that the credit should be renewed because banks are taking too long to approve short sales. Any bets on the outcome?

Market News 3/2/2010

Mike Berrios CMPS, CMA, CLA (Integrity Home Finance) — Wed, 03 Mar 2010 00:52:23 -0800

Market Color: Well we have to wish Yahoo today Happy Birthday. They are 15 years old. Economic news today, Ford beat out Government Motors in Monthly Auto Sales for the first time since 1998 and if you want to buy a Toyota, some great deals are coming in the aftermath of the product liability issues in the news. Stock market continues to show an improvement today based upon India reporting good economic results and Europe is playing fiddler on the roof with a possible bailout of the Greek economy. Stateside U S. Auto sales were reported weaker and will we say good bye to Saturday mail? Whew SI is out of breath. Right now, the futures market is pricing in an 86% chance that the Fed keeps rates somewhere between 0% and .25% through June 23rd, 2010. Currently, the Ten Year yield is at 3.64% (3.61% yesterday). And our mortgage market is tanking worse and is down .25% in price. Market News: Sen. Christopher Dodd, D-Conn., has proposed establishing a consumer financial protection division within the Federal Reserve. The lawmaker negotiated with Sen. Bob Corker, R-Tenn., on the proposal, which would give the central bank the authority to write and enforce rules. Meanwhile, Sen. Richard Shelby, R-Ala., has unveiled one plan that would set up a consumer protection unit within the FDIC and another that would establish an interagency consumer protection council, but the agencies would have limited enforcement powers. This will impact our industry dependent upon whatever form this legislation takes. We will have to watch this closely as it develops. Fannie Mae and Freddie Mac appear to be working together under federal conservatorship, rather than competing for market share and preferential status with originators. As the Federal Housing Finance Agency coordinates policies for preventing foreclosures and incentives for saving taxpayers money, lenders say forcing them to repurchase more bad loans has strained relationships with the secondary-market giants. Mortgage bankers and other industry members complain, for one, that Fannie Mae and Freddie Mac have become too risk-averse and bureaucratic.

Market News 3/1/2010 - Fannie Mae will no longer offer Interest Only

Mike Berrios CMPS, CMA, CLA (Integrity Home Finance) — Mon, 01 Mar 2010 19:05:11 -0800

Market News: The ongoing bid to reduce or eliminate the mortgage tax credit remains status quo, but the White House wants to cut tax liability savings to 28 cents per $1 of mortgage interest from 35 cents for individuals earning more than $200,000 annually and couples earning more than $250,000 per year. The proposal also would lower deductions for real-estate taxes, and concern that it would hold back the housing market has won it little support in Congress. Lucien Salvant of the National Association of Realtors warns that diluting the tax break would eliminate an incentive for trade-up buyers, but others say the deduction does little to boost homeownership given that low- to moderate-income filers tend not to itemize. Rest assured this topic will come up again. The agencies seem to be have struck on the idea that sellers need guidance on loan quality. Fannie Mae has unveiled a "Loan Quality Initiative" to help ensure that mortgage lenders are adhering to its underwriting guidelines. The action follows an analysis of the leading causes of loan-repurchase requests, which determined that many buybacks stem from loans that fall short of the firm's credit and eligibility requirements. Fannie Mae plans to roll out new quality-control policies in the next few months. SI cannot resist making a comment that the agencies negotiated the relaxation of guidelines with the major loan aggregators over the last 10 years and now take it upon themselves to be the leaders of loan quality. Attached is the lender letter that was sent out. Please note that Freddie and more than likely Fannie will follow with no longer offering interest only products. Freddie Mac said it will stop buying and securitizing interest-only mortgages - a $40 billion a year market - on Sept, 1. Interest-only and alt-A products have been Freddie's downfall: the two loan types accounted for 44% of the mortgage giant's credit losses in 2009. Freddie exited the alt-A market a few years back but the product still accounts for 8% of its portfolio holdings. The GSE currently has $129.9 billion in interest-only mortgages, which comprises 7% of its single-family mortgage portfolio. These loans have an average loan-to-value ratio of 106% and 17.6% are 90 days or more past due. This loan product features interest-only payments for a set period of time before the loan becomes fully amortizing and the borrower has to start making principal and interest payment. Because the initial payments are so low, it is very difficult to modify these loans once the homeowner defaults. Freddie has modified only 0.2% of its interest-only portfolio. Despite these problems, Freddie purchased $800 million in interest-only mortgages in 2009. Look for various cut off dates for deliveries of this product sooner than later.

News for Chase Bank Loan Officers

Mike Berrios CMPS, CMA, CLA (Integrity Home Finance) — Mon, 01 Mar 2010 10:29:57 -0800

In the context of this, let me share with you a conversation I had with a very high level person at Chase Home Mortgage this morning, they run a division there for ‘loan officers’. This is so you have a feel for the competition, here’s some key facts at Chase that are happening now, and will continue going forward. Loan officers are to be in the branch 6 days a week. They have to wear a uniform (black suit, blue shirt, chase tie). They are expected to do 4 loans per month, they are cutting 25% monthly who do not maintain this level. They have to do 2 loans per month to get a cubicle, otherwise they are expected to stand and greet customers. Their base is $24,000 with 20bps bonus, increasing to 40bps if they cross sell two additional products. Their current turnover rate is 50% per quarter, which they feel is acceptable. Their target comp is $65,000 for the year. They have two products, 30 year and 15 year fixed, Chase is terminating all but those two solutions. They’ve completely redeveloped their internal platform to support those two loan products. You’ll have to be a Chase customer to get one of those two loans. They expect to provide no other mortgage support to the industry outside their branches They expect to run with about 2,000 loan officers using this new model and stabilize on it by year end. I worked for Chase many years ago for 4 years, they have obviously changed many rules. Hearing about this, makes me feel better I made the right decision in moving. If you know anyone that isn't happy where they are - please pass along my name.

Mortgage Market 3/1/10

Mike Berrios CMPS, CMA, CLA (Integrity Home Finance) — Mon, 01 Mar 2010 10:22:29 -0800

Mortgage Bonds are trading near unchanged levels, thanks to tame consumer inflation data. The Personal Consumption Expenditure Index met expectations for January, and the year-over-year rate remained well within the Fed's comfort zone. In other news, Personal Income came in well below expectations, but Personal Spending was reported above expectations. The bump in spending came at the expense of savings, as the Personal Savings Rate fell to the lowest savings rate since October 2008.

How to have a Budget

Mike Berrios CMPS, CMA, CLA (Integrity Home Finance) — Sun, 28 Feb 2010 22:25:22 -0800

Click HERE to details

New 2010 GFE - what does this mean to you?

Mike Berrios CMPS, CMA, CLA (Integrity Home Finance) — Sun, 28 Feb 2010 22:23:32 -0800

Click Here for details

The 3 States That Accounted For 50% Of The March 2009 Foreclosures

Mike Berrios CMPS, CMA, CLA (Integrity Home Finance) — Thu, 16 Apr 2009 20:22:04 -0700

Since 2007, foreclosures have dominated real estate news. You can't turn on the news or open a paper without some foreclosure-related story.

But for all of the discussion, foreclosures continue to be geographically concentrated.

Adding up the latest stats from RealtyTrac.com, more than half of the country's foreclosure actions from March occurred in just 3 states -- California, Florida and Nevada.

Those 3 states represent just 19 percent of the nation's population.

Despite the local concentration of foreclosures, however, they remain a national problem. This is because mortgage lenders lend in all 50 states -- not just 3 of them -- so the impact of mortgage defaults in one region can quickly spread to others.

In part because of foreclosures are higher, the following has happened:

Mortgage guidelines have tightened
Downpayment requirements have increased
Private mortgage insurance has become more expensive

That's an important set of changes for a would-be borrower. In some cases, it can keep a person from qualifying.

A Few Reasons Why Now May Be The Least Expensive And Easiest Time To "Go FHA"

Mike Berrios CMPS, CMA, CLA (Integrity Home Finance) — Thu, 16 Apr 2009 01:49:44 -0700

A Few Reasons Why Now May Be The Least Expensive And Easiest Time To "Go FHA"

Shopping for low mortgage rates is a game of luck.

Some days, mortgage rates are favorable. Other days, they're not. And while you can sometimes make an educated guess about where rates might be headed, you're not always going to guess right.

Even the experts get it wrong more often than they'd like.

But some parts of the rate shopping process can be predicted and one of them is the future of mortgage guidelines.

In general, the more often homeowners default on their respective mortgages, the harder it is for future mortgage applicants to be approved.

This is why "now" may be the best time to apply for a FHA mortgage. Defaults are climbing, suggesting that FHA underwriting guidelines are about to tighten.

Indeed, the FHA has implemented two major changes since last summer:

The minimum downpayment requirement was raised by a half-percent to 3.5%
Cash out refinances are now limited to 85 percent, down from 95 percent.

These changes create barriers to entry for potential FHA borrowers, improving the overall quality of the FHA loan pool.

For a taxpayer-funded agency like FHA, loan performance is an important goal. Therefore, as the number of defaults grows, expect FHA guideline to get tighter.

The problem is, though, we can't predict just where the FHA will tighten. Maybe the FHA raises its minimum FICO score requirement, or maybe it gets tough on seller-paid closing costs. A hike in loan fees isn't out of the question, either -- that's the path Fannie Mae took, after all.

Whatever the FHA does, fewer people will qualify for FHA mortgages once it's done. So, if you're planning to buy a home and your downpayment is limited, or your credit scores are suspect, or there's some other "red flag" in your profile, consider moving up your timeframe to act.

Mortgage rates may rise or mortgage rates may fall, but neither is going to matter if you can't get qualified for a home loan. And, for FHA mortgage applicants, tougher mortgage guidelines are only a matter of time.

(Image courtesy: The Wall Street Journal Online)

A Few Reasons Why Now May Be The Least Expensive And Easiest Time To "Go FHA"