Mortgage Market Update

Mortgage Market Update - The Future of Interest Rates

Joe Farro (Premier Capital Mortgage) — Tue, 29 Sep 2009 08:58:20 -0700

Most don't realize that without all the Feds efforts mortgage interest rates would be much higher and economy worse off that were we are today. Today processes are at work to bring the mortgage market back. As much as most want to say how hard it is to get a loan there is a reason for this. Investors who buy mortgages need to feel confident that the loans they are buying are good quality(solid appraisals, good credit, stable income). We desperately need these investors to come back into the market and begin to buy these securities. Simply put if they don't buy - mortgage rates will need to rise to a level that makes it attractive. We need to do our part to make sure the mortgages they buy are the best quality.

The Fed said they are going to ration out the remaining commitment of Mortgage Backed Security purchases through the first quarter of 2010. There will be no additional buying, but instead, a longer weaning off of the program. There was some speculation about the Fed increasing the amount of buying above the $1.25T committed to, and last week's statement is the Fed's nice way of saying "no." They will not be buying more in quantity, but what they will do is attempt to provide a smoother transition to normal market conditions.

It is a given that once the Fed ceases its purchases, that interest rates will most likely climb higher...most likely back above the 6% area. Next year this time we could be in the mid to low 6's. So instead of a hard transition with a large bump in rates, the Fed is attempting to allow rates to gradually rise. This means that waiting to purchase or refinance will very likely mean a higher interest rate.

Now is the time to take action.

MORTGAGE RATES

Loan Programs

Interest Rates*

30 Year Conv.

Mid - low 5's

30 Year FHA/VA

Mid - low 5's

Rural Development

Mid 5's

5/1 Arm Conv.

Low 4's

5/1 Arm Jumbo

Mid 5's

Please contact us for specific situations and specific rates.

*Risk Based Pricing will affect rate offered.

MORTGAGE RATE TRENDS

DAILY RATE LOCK ADVISORY

For an in depth explanation and daily update click on The Daily Rate Lock Advisory.

A copy of this newsletter can be found at Market Update.
also check out Quick Tips
and Home Loan Toolbox

Joe Farro
Premier Capital Mortgage
(678)289-6600

Mortgage Market Update - FHA Appraisal Changes / HVCC Strategies

Joe Farro (Premier Capital Mortgage) — Mon, 21 Sep 2009 22:00:40 -0700

With all the HVCC changes to conventional loans - FHA released some of their new appraisal guidelines. Lets look at them

FHA Appraisal Changes

1- Changes effective January 1st, 2010.

2- Mortgage brokers and commission based lender staff are now PROHIBITED from selecting the FHA appraiser.

3- Lenders are not required to use Appraisal Management Companies.

4- When a borrower switches lenders FHA prohibits the 2nd lender for ordering additional appraisals to obtain a higher value unless:
     -The FHA DE underwriter determines the 1st appraisal is deficient
     -The appriaser of the 1st appraisal is the other lenders exclusionary list
     -The first lender delayed the trasfer of appraisal to cause harm

5- Appraisals are now valid for only 120 days for all existing and proposed or under construction properties.

Please remember that this has just been released and that most lenders have not created policy to handle this. Just like most other regulatory changes this year I am sure most lenders will create their own policy on how to comply with these guidelines. The good news is that everyone has some time to prepare. I don't believe this will be difficult to work with and will update you as things continue to develop.

Strategies and Tips for Realtors on working with Appraisers and the HVCC:

Remove the lockbox off of the home before the appraiser comes out to generate a phone call from the appraiser asking to gain entry (make sure you enter "call before showing" in listing info). When the appraiser calls, politely ask them to get a sense of their competency. Here are some suggestions: Where are they based? Have they ever appraised in the area before? What data sources will they be utilizing? Do they have enough time to complete the appraisal?

If you feel that the appraiser is not knowledgeable about the area, politely ask them to hold off. Next contact the lender and see about having someone else assigned. Rely heavily on the USPAP(page2)rules regarding appraising only in geographical areas in which an appraiser is competent (familiar).
Provide comps of your own before the appraiser comes out. This is important as appraisers have to take pictures and will want to avoid making a second trip. It is also important that the comps you offer have closed in the last 3 months. Comps closing longer than 3 to 6 months will likely be adjusted downwards for date of closing. (Comps closing longer than 6 months ago are unacceptable).
Download this helpful document from the NAR regarding the HVCC and educate yourselves.

Joe Farro
Premier Capital Mortgage
(678)289-6600

Mortgage Market Update - HOA's On Who's List?

Joe Farro (Premier Capital Mortgage) — Tue, 15 Sep 2009 09:04:46 -0700

Delays in closings are the number one cause for a client to be disappointed with the process of purchasing a home. This year with all the foreclosures, shorts sales and changes in the industry we now have another item to pay attention to that now can be added to your already long list of things to do. Home owners associations are a part of many communities and are now may be creating delays as the owners of foreclosed properties may not be current on association dues or having a property with a subdivision violation that need to be corrected before a closing can occur.

This is not surprising to me as many times, we(Lenders) receive realestate contracts are lucky to have any disclosure notifying anyone that there is a Home Owners Association(HOA). It is great for a lender to know up front so we can quote accurate closing costs and payments. Home owner associations have initiation fees that can affect the buyers funds for closing or monthly fees that affect payments. Upfront disclosure is always the remedy for all parties to facilitate a smooth closing.

To miss closing dates or have delays caused by no one obtaining the HOA info or being able to clear any conditions in a 30 day period is unacceptable. This is not meant to point fingers but there has to be a better way. I believe the first line of defense against this is a listing agent providing information on the HOA and to properly disclose in the initial contracts. This will greatly assist all so that by the time it reaches the closing attorney they are alerted to contact the HOA and can now get any information pertaining to the home. Lets not wait for the title report to come back. Buyers agents also need to ask when making offers - may be helpful to provide in the listing information. Once this is identified up front this should allow for more time for the title agent to obtain the info. Again lets not wait for the closing agent to find out there is a HOA and then start the process. I find it hard to belive that a listing agent would not have this info and or a buyers agent would not do any due diligence when receiving or making offers just seems like common sense. Yes common sense however, this does not have much to do with what we are dealing with today. Dont kill the messenger I was told to say this. By the way dealing with foreclosure attorneys is never a winning experience when issues arise that are time sensitive. This is not the hard stuff and should be a simple fix. Us survivors need to stick together.

Any insight/feedback is greatly appreciated.

Joe Farro
Premier Capital Mortgage
(678)289-6600

Mortgage Market Update - Truth in Lending and your Closing Date

Joe Farro (Premier Capital Mortgage) — Wed, 02 Sep 2009 07:39:54 -0700

I have already heard of a couple of a closings that have been affected by the new truth in lending requirements now required. When a lender discloses an initial truth in lending in todays market there now is a requirement that the final one(provided at closing) has to be within a .125% tolerance. The truth in lending is a form that a buyer signs at loan application that discloses the APR. The Annual percentage rate(APR) is the real cost of funds a buyer pays that takes into account certain closing expenses. In a perfect world buyers are told to compare APR's in choosing lenders with low interest rates - surprise we don't live in a perfect world. Unfortunately some lenders today still utilize misrepresentation and bait and switch tactics.

So what does this have to do with the closing date? Based on the previous topic of HERA HOEPA, most don't realize that lenders are checking the initial truth in lending figure against the final one. Most do know that when it is off by more than .125% the lender must redisclose and now wait 3 days for the client to understand the process.

You know as well as I do that some times figures are changed last minute. In todays environment this could impose delays and you need to make sure that you are in touch with your lender when making these changes due to the potential of causing a delay.

I have done some of the math on the impact to APR based on a change in closing costs

$100,000 loan - $1000 - $1250 change may trigger a change in APR and delay closing

$200,000 loan - $3000 change may trigger a change in APR and delay a closing

Please remember the lower the loan amount the bigger the impact on APR when changes are made.

Now that you can see the math the next item is what closing costs trigger the change in APR. I have gone ahead and prepared a list of fees that are both included and not included>

I understand that sometimes changes need to be made last minute. Working with someone who knows the ins and outs of the new legislation and understanding it impacts your clients loan has never been as important. Clients can be forgiving but the one item they never seem to forget is if they miss the closing date. Set the best expectation and do it right.

Please visit Realtor Toolbox and go to Easy Notes for our APR handout

MORTGAGE RATES

Loan Programs

Interest Rates*

30 Year Conv.

Mid - low 5's

30 Year FHA/VA

Mid - low 5's

30 Year Jumbo

Mid 6's

5/1 Arm Conv.

Low 4's

5/1 Arm Jumbo

Mid 5's

Please contact us for specific situations and specific rates.

*Risk Based Pricing will affect rate offered.

MORTGAGE RATE TRENDS

DAILY RATE LOCK ADVISORY

For an in depth explanation and daily update click on The Daily Rate Lock Advisory.

A copy of this newsletter can be found at Market Update.
also check out Quick Tips
and Home Loan Toolbox

Joe Farro
Premier Capital Mortgage
(678)289-6600

Mortgage Market Update - Can I afford $3,000 more in my Sales Price?

Joe Farro (Premier Capital Mortgage) — Tue, 25 Aug 2009 16:54:36 -0700

This is a simple one that many still struggle with. Just he other day had a Realtor want me to specifically give an exact dollar amount for a prequal. For the record, this is impossible in that every property is different based on the property taxes and home insurance. The best that any lender can do today is provide a range that makes sense based the buyers qualifications and needs.

As home values have fallen some property assessments have remained the same or gone up. Typically many have used a calculation of 1.25% of the sales price to calculate taxes. Today the best practice is to pull the exact tax amount from the county web site. We have provided a link for every county in the US on our site in the Home Loan Toolbox page. Just scroll down and click on the Property Tax Resource page, click on state, choose county and select Tax Commissioner for that county.

In addition, to the property tax differences most still don't realize the payment differences based on every $1,000 financed. look at the differences below.

                                                        30 year Fixed                       30 year Fixed
                    Interest Rate            Cost Per $1,000                Cost Per $10,000

                        5.5%                               $5.68                                    $56.80

                        6.0%                                $6.00                                   $60.00

So as you can see the differences per $1,000 is very small in the payment for a 30 year fixed. So when someone is looking put down another $2,000 or raise the sales price $2,000 so that the seller can pay for some of the closing costs, you can no see how small an impact it is.

So to sum this up as best practice for any agent when working with buyers - you need to not only know the price range but also have an understanding of the payment. Partner with your loan officer when looking at making offers and writing contracts so your buyer has the right expectations.

Joe Farro
Premier Capital Mortgage
(678)289-6600

Mortgage Market Update - Where's my Check?

Joe Farro (Premier Capital Mortgage) — Tue, 18 Aug 2009 07:47:14 -0700

After completing a job everyone likes to get paid as it is part of the reward. It can be a very frustrating thing not to get paid when your suppose to. Over the last few years this has increasing been a more important subject as lenders have gone out of business and left many parties to a real estate closing with no funds.

Today all lenders are required to wire funds to closing.  Wires are the cleanest way to close as the funds are liquid once they reach the destination.  The question many times is when did the wire go out and when is the closing agent notified that the funds are available. Most of the time everyone is never provided the best information - so why point fingers. Lets just try to come up with some solutions that may provide greater consistency with getting paid at the closing table.

1. Always try and work with closing agents that have good offices who know what is going on. Always surprises me when we get the call from closing that the attorney indicates they don't have the wire. We produce the Fed number and they still don't fund because they cant get confirmation. Also please understand that the attorney has no profit motive in holding on to the funds as any interest the account earns just goes to the Georgia Bar Association. Close with Attorneys who have greater consistency and know what is going on. Remember you are writing the attorneys name in the contract.

2.  Always try to make sure your working with reputable mortgage providers who provide wires prior to closing. Need to also understand the process the lender has for when and what conditions have to be met to have the wire go out.

3. Schedule closings for later in the day  so you have a higher likely hood for the wire to make it. Most mortgage companies have similar wire cut off times such at 10 a.m, 12 p.m. and 2 p.m. for the same day wires. It usually take a couple of hours for a wire to transmit. Typically lender do not like to send funds until the day of closing.

4. Schedule closings so that you do not close at the end of the month. This is something we have always been a big advocate of. Closing at the end of a month is a recipe for spending more time waiting on the system to fail you as everyone else is trying to do the same and thus creating capacity issues for closing agents and lenders.

I am firm believer in getting paid what you do and we do everything possible for this to happen. Are we perfect - unfortunately not but I can guarantee on thing is that we can tell you exactly what is happening and where we are in the process. We are very fortunate to have one of the best closer/funders. She is know as Sarge.many know her by Regina. If you have had the opportunity to work with her you know why.

MORTGAGE RATES

Loan Programs

Interest Rates*

30 Year Conv.

low 5's

30 Year FHA/VA

Mid - low 5's

30 Year Jumbo

upper 6's

5/1 Arm Conv.

low 4's

5/1 Arm Jumbo

upper 5's

Please contact us for specific situations and specific rates.

*Risk Based Pricing will affect rate offered.

MORTGAGE RATE TRENDS

DAILY RATE LOCK ADVISORY

For an in depth explanation and daily update click on The Daily Rate Lock Advisory.

A copy of this newsletter can be found at Market Update.
also check out Quick Tips
and Home Loan Toolbox

Joe Farro
Premier Capital Mortgage
(678)289-6600

Mortgage Market Update - The Loan Officer Application for Realtors!

Joe Farro (Premier Capital Mortgage) — Tue, 11 Aug 2009 09:25:13 -0700

Home financing is still considered to be 50% of the home buying process. Once a home has been selected the next step or the buyer is to obtain financing. If you are not able to come to terms on a home loan your contract can die. Over the years it has always shocked me as to the criteria some agents use to make decisions on who they refer clients to for home loans. Most of the time it largely based on what others in the office have to say. I don't believe this is the only best practice that is going to guarantee success. When so much a transaction is based on financing you need to take time have solid resources available.

With some of the recent changes in the lending industry this is a good time to take inventory and make sure you have the right lender relationships in place. Last week I receive an inquiry from a top producer who took some of our previous updates and decided to take action. I want to thank Jessica Horton who took the time to develop some questions that you may want use today with your lenders. Cudos to you if you already have taken the time to do something like this but if you haven't this is definitely an action item to complete. Believe it or not there are differences between loan consultants - just like every Realtor has a unique set of skills no matter the company.

1. How does your PQ process work.

What is the time line?
How(face to face, phone, web or remote) and when do you preform a pre-qualification?
How long does it take
Any thing special about your process of a PQ? Do you charge a fee to the client?
When is a credit report reviewed?
How am I notified and what commitments are made the buyer?

2. How does your Pre-Approval Process work?

How and when do you preform a PA?
How long does the process take?
Do you charge a fee to the client
3. Loan Application Process
How is this completed and by who
Is this done face to face (b/c of the new legislation HERA)
When is the Good Faith and Truth in Lending provided to the client
When do you lock loans and do you charge a fee
Do you quote accurate GFE's (b/c new legislation requires .125% redisclosure)
How & when do you preform loan updates and to whom do you provide them to
Do you or your company have any service guarantees in place?

2. Professionalism?

Do you have any special training or certifications?
Why should you do business with them?

This may not be all the questions to ask but does provide a start to understanding your lender(s) so you can have smoother transactions. The question is - Do your lenders have what it takes to navigate the current lending environment? When your income is on the line you cannot afford to take any risk.

Joe Farro
Premier Capital Mortgage
(678)289-6600

Mortgage Market Update - Navigate the Maze!

Joe Farro (Premier Capital Mortgage) — Wed, 29 Jul 2009 06:27:57 -0700

The business of realestate continues to become more challenging as more regulatory oversight takes action. There no shortage of changes in the mortgage industry that affect every active Realtor and mortgage professional. In the last Update, I mentioned that we wanted to share some ideas of how to tackle the changes and come out on top.

First lets look at what some of the challenges are.
        -New HVCC guidelines / appraisal issues
        -New Truth in Lending Disclosure requirements(HERA HOEPA)
        -Reduced loan options and tighter loan guidelines
        -Lower sales prices = reduced commissions. more work less pay
        -REO / Short Sale market
        -Need to Master - technology, property, negotiations, contracts, due diligence etc

In reviewing the list above, your job is much tougher today than most experienced Realtors experienced earlier this decade. I can feel the pain many are about to go through as they hope these changes are not going to affect them.  Earlier this week I had an opportunity to sit with a top notch group of Realtors and they confirmed that success is dependent on staying current on all the changes and while being able to navigate the maze for all clients.  I am confident that if you do not take action you will be out of business by the end of this year.

As you view some of the challenges -half of them are related to the mortgage industry. More than ever you can't afford not to have solid relationships in place with mortgage professionals.  You are going to pay to work with professionals, but also understand you will ultimately pay more in working with non professionals. I would like to share some of the recommendations that I believe are paramount for a smooth transaction for you and your buyer. The more you understand the less work you will have. Example - do you make more commission when you have to complete contract extensions?

The Realtor/Lender Plan

1 Choose the right lender relationships for your clients
            -choose lenders on the following criteria

                    -Likeability - do you and will your clients like the person your refer?
                    -Professional - Knowledge, work ethic, organized, trained, systems, close on time
                    -Value added - what extra things can they do to assist you ($$ does not count)
2. Control the referral. Obtain buyer contact info. Dont hope your clients call.**
3. Understand the lenders PQ process in the following ways(this is value added for your client)
            -How and when do they perform a pre-qualification(PQ)**
                        -Face to face, phone, web or remote
            -What is the lenders process of a PQ
                        -Do they charge a fee to the client?
                        -Is a credit report reviewed?
            -Pre-Purchase counseling for clients**
                        -meeting before contract to review financial aspects of purchase and answer ?'s
            -Pre-Approval Process obtain documentation in advance for preliminary approval.
4. Loan Application Process
            -How is this completed and by who. face to face preferred in regard to new legislation**
            -When is the Good Faith and Truth in Lending provided (client always get a copy)
            -Do they charge a fee to lock loans? Do they quote accurate GFE's(.125% redisclosure)**
            -How and when do they perform updates and to whom do they provide them to?**
            -Do they have any service guarantees in place?

If I were in business as a Realtor and 50% of any transaction closing is based on financing, I would make sure that I had the absolute best resources(loan officers) you cant afford not to.

**above indicates crucial items for smooth closings.

MORTGAGE RATES

Loan Programs

Interest Rates*

30 Year Conv.

low 5's

30 Year FHA/VA

Mid - low 5's

30 Year Jumbo

mid 6's

5/1 Arm Conv.

low 4's

5/1 Arm Jumbo

mid 5's

Please contact us for specific situations and specific rates.

*Risk Based Pricing will affect rate offered.

MORTGAGE RATE TRENDS

DAILY RATE LOCK ADVISORY

For an in depth explanation and daily update click on The Daily Rate Lock Advisory.

A copy of this newsletter can be found at Market Update.
also check out Quick Tips
and Home Loan Toolbox

Joe Farro
Premier Capital Mortgage
(678)289-6600

Mortgage Market Update - HERA HOEPA continued!

Joe Farro (Premier Capital Mortgage) — Sun, 26 Jul 2009 14:14:12 -0700

The changes in the industry have been fast and furious and do not look like they are going to slow down any time too soon. From some of the responses we have received over the last 2 weeks I can tell that some are not fully aware of what this means to the business of a Realtor.

Our goal in the last Message  ,HERA HOEPA and Your Lender!, we attempted to explain some of the new timeframe's that lenders will have to adhere to with loan applications starting this July 30,2009. We understand that you receive many messages and may from time have trouble pulling the relevant message from news, advertising and marketing data.

The last Mortgage Market Update was to provide clarity with the news rules and not intimidate you. Fear is always a great motivator and in this market of change it can be used as a technique to keep and win referral business as most lenders promise to be the solution to all the issues. The company can only go so far in my opinion and it is the loan process of the loan officer that will make the difference. Doing business with a nice or honest person is important but is not the only criteria. Remember if you are referring buyers to lenders - these are some of the basics you may need to know.

Can you answer the following?

                                  What is the prequalification pre approval process the lender uses?
                                  Does the loan officer meet face to face with your client?
                                  Who completes the good faith Estimate? - Processor or Loan Officer?
                                  Is it completed at loan application or mailed out?
                                  When will they order the appraisal? Before or after application fee received?
                                  What is the HVCC process the lender has in place? - All loans or Conv only?

As mentioned many times this year - we are back to the basics and it is refreshing but challenging at the same time. if I were a Realtor in business today and have referral relationships with lenders, I would absolutely need to understand the loan process so I could better negotiate realistic contract time lines for all parties involved. Remember you don't make more commission every time you have to get updated addendum's negotiated and signed.

Each lender may have a different process to the new guidelines as is the case with many of the changes this year. Please don't misunderstand my previous message as this is not a big deal. The purpose of our message is that these changes are going to be good for the consumer and that the requirements for proper disclosure is something we have been doing for over the last decade before it became mandatory. This will not change the way we have been executing loan applications as we continue to deliver the Home Express Guarantee - our attempt at advertising, just solid promises backed by financial commitments.

As a Realtor I would be critical of any buyer/lender relationship that you are unfamiliar with as this could create delays, cost money and foster negative experiences for all parties involved. It may be the best investment in your business to work with lenders that work for the clients best interest and have a proven track record of delivering.

Look for more this week as we layout the flawless buyers agent process with the lender.

Joe Farro
Premier Capital Mortgage
(678)289-6600

Mortgage Market Update - HERA HOEPA and Your Lender!

Joe Farro (Premier Capital Mortgage) — Tue, 21 Jul 2009 09:37:44 -0700

It sort of feels like cramming for a test back in college - you knew it was coming but had to deal with other important matters and now its the night before and your now just getting prepared to study. Many real estate professionals are now just beginning to hear about some of the changes that will become reality on July 30th.

The Home Ownership and Equity Protection Act (HOEPA) and the Housing and Economic Recovery Act (HERA) that were passed by Congress in 2008. The Federal Reserve Board published the regulations under the Truth in Lending Act. These regulations were written to provide more transparent, level and fair regulation of the real estate industry; to add additional steps to help prevent deceptive lending practices; and to protect consumers by making them more informed - and therefore more confident- in their home financing choices.

Housing and Economic Recovery Act - (HERA) amends and impacts several aspects of obtaining a mortgage, the disclosures required for borrowers, and the timing of their delivery. Below are some of the new time tables that may affect your closings. The following rules only apply to primary residences and second homes.

1. The earliest a closing may occur is no sooner than 7 days after the borrower has been issued all the initial mortgage disclosures (Saturdays may count - depends on lender but Sundays and federal holidays do not).

2. Upfront fees may not be collected until after the early Truth in Lending disclosures (good faith estimate and the Federal T&L disclosure)have been provided. Truth in lending disclosures must be provided at least 3 days after application.

        Face to face application    -Credit report fee(reasonable) may be collected at application.
                                          -Appraisal fees may be collected the day after.

        Mail out application          -Credit report fee(reasonable) may be collected up front (includes overnight and email)
                                           -Appraisal fees may be collected 3 business days after mailing.

3. The homebuyer must receive a copy of the appraisal 3 days before closing. This right may be waived by borrower.

4. Redisclosure    -if the Truth in Lending changes by more than .125% a revised one must be issued at least 3 days prior to closing. If mailed it is considered to be received by borrower 3 days after mailing. You can see from the time line that this could be a long delay with any changes if your working with a lender that is not local.

So what does this all mean? Simply - at Premier Capital Mortgage, nothing to sweat - for other lenders this is going to create delays and potentially cost your buyers more money. We have always believed in doing it right with full disclosure to set the right expectation up front. Years ago we started our client value proposition called the Home Express Mortgage Guarantee that promises your clients this high level of service. For years I have been surprised that most lenders no longer meet face to face with clients and have always felt this puts both the loan officer and client at a disadvantage. Taking the extra time up front to set the right expectation can save many hours over the loan approval process in answering questions up front. We have stayed committed to this practice what has continued to build our business and still meet over 95% of our clients face to face.

The new rules that will be in place next week are good for the consumer and may be an inconvenience for some in real estate. If I were a real estate professional I would make sure that I understand my lenders loan process so that I could better navigate the contract negotiation process and set the right expectation up front for my buyers.

Joe Farro
Premier Capital Mortgage
(678)289-6600

Mortgage Market Update - Home Prices vs Interest Rates

Joe Farro (Premier Capital Mortgage) — Wed, 15 Jul 2009 07:24:05 -0700

Interest rates have always been a driving factor when buyers are looking to make a home purchase. I don't know that in all cases this has been the smartest decision. Today we have extraordinary value as home prices have decreased and interest rates are still near all time lows. Many who are not buying today are going to be kicking themselves that they did not take action in these times.

"We're no longer falling off a cliff, We're just rolling down a very steep hill."
- Market Watch 5/26/2009

As more media is beginning to take a positive spin on the market we may see interest rates begin to move back up. I am not saying that things are all rosey. We are going to continue to see foreclosures increase, unemployment rise, HVCC affect home sales and banks continue to tighten up guidelines through government regulation.

"Even if prices decrease by 10% if the interest rate increases by more than 1% the buyers monthly cost goes up."
                                                                                           - Keeping Current Matters July 2009

In my career I have seen mortgage rates move up .5% in one day. Buying a home is not a 1 day process and does not need to be, however if you have buyers that are waiting for the market to bottom they may miss the boat if they are not out there today educating themselves on the market by at least starting the search.

Keeping Current Matters small group meeting - Today @ 11 am
                                    - up to date market data for real estate professionals

                                                Open Registration:  Please contact Deric Garcia
                                                                                (770)692-6680
                                                                                dgarcia@joefarro.com

MORTGAGE RATES

Loan Programs	Interest Rates*
30 Year Conv.	low 5's
30 Year FHA/VA	low 5's
30 Year Jumbo	mid 6's
5/1 Arm Conv.	low 4's
5/1 Arm Jumbo	mid 5's

Please contact us for specific situations and specific rates.

*Risk Based Pricing will affect rate offered.

MORTGAGE RATE TRENDS

DAILY RATE LOCK ADVISORY

For an in depth explanation and daily update click on The Daily Rate Lock Advisory.

A copy of this newsletter can be found at Market Update.
also check out Quick Tips
and Home Loan Toolbox

Joe Farro
Premier Capital Mortgage
(678)289-6600

Mortgage Market Update - Closing Costs - Why so much confusion?

Joe Farro (Premier Capital Mortgage) — Wed, 01 Jul 2009 07:19:51 -0700

Buyers, Sellers, Realtors and now Asset Managers all share different opinions on closing costs. Buyers feel that the sellers should pay. Sellers may be willing to help but don't want to pay everything. Asset Managers have developed some policies that come from another market that have no relation to the market you are in. Many Realtors have different opinions based on the last closing or what some person in there office explained 4 years ago. Heck for that matter many loan officer can quote a good faith estimate accurately.

Setting the right expectation up front is crucial for repeat and referral business. Why someone writes a contract without getting the figures is absurd. There are no longer rules in place that say closing costs are 3% of the sales price.  3% of $60,000 is much less and different than 3% of $150,000.   Dont fall in this trap and have an upset client that they now needs more money for closing than when they went into this.

I say lets stop the confusion and look at the basics - this actually applies to any market in the US. When a buyer is negotiating a contract we provide a cash for closing figure. Now this figure is the summation of 3 items - down payment, closing cost and prepaid items. Based on the type of financing being used there are some limits (example FHA - 6%)  and those rules do apply.

In my opinion the buyer always pays closing costs and it is negotiated into the sales price.  I have found the best way to explain this to a buyer is to use the following example.  "Do you think when a seller/builder offers to pay $5,000 in closing costs they are doing out of the goodness of there heart and they actually want to help you conserve your money and take a loss on there side?" Usually at this point I get a strange look or a smile. The smile is preferred because they get it. Purchasing a home at $150,000 with $5,000 in closing costs is the same mathematical net to the seller as $145,000 with no closing costs. The main decision a buyer has to unmake is that is better to negotiate a higher sales price with more seller contribution ($1,000 in loan @ 6% cost $6 in a monthly payment for 30 years). There is not a right or wrong answer it just depends on the buyers current financial position.

Sellers get over the idea that you will only pay X amount of money toward closing costs. Many of the first time buyers need help with not only closing costs but also the prepaid items.   The goal is to sell the home and if it nets you the amount you need - take it regardless of the idea you paid too much in closing costs. In this market at this time I would rather sell now than wait to get a better offer that may never come.

Solutons for setting the right expectation

    Buyers Agents     contact loan officer to confirm figures for the offer.

    Loan Officers       Pull actual taxes and quote real numbers not the bait and switch GFE figures
                                        oh by the way - answer the phone -refis are gone and you need purchases

    Listing Agents     Be able to complete an accurate net to seller calculation on offers.
                                        Always surprises me how many sellers don't have a better idea of the net

    Asset Managers So many things so little time - may be the next Market Update

Negotiations, contracts, consultations, market analysis and due diligence is the new real estate need to master it.

MORTGAGE RATES

Loan Programs	Interest Rates*
30 Year Conv.	low 5's
30 Year FHA/VA	low 5's
30 Year Jumbo	Upper 6's
5/1 Arm Conv.	Mid 4's
5/1 Arm Jumbo	Mid 5's

Please contact us for specific situations and specific rates.

*Risk Based Pricing will affect rate offered.

MORTGAGE RATE TRENDS

Joe Farro
Premier Capital Mortgage
(678)289-6600

Mortgage Market Update - Mortgage Rates and the Media

Joe Farro (Premier Capital Mortgage) — Wed, 01 Jul 2009 06:09:32 -0700

Still today we see the media continue to send different messages to the public that can be misleading. Last week the mortgage market continued to look like a rollercoster ride as we had a sell off followed by an improvement. As frustrating as this was to have to update clients everyday on their potential mortgage rate I also witnessed different messages from local news shows to national medial like CNN, Fox and CNBC send out a wide spectrum of messages. Below are just some examples of what clients are seeing.

Mortgage rates retreat Run-up loses steam as bond yields ease. 30-year and 15-year rates fall. - CNN Money June 18th

FHFA Lockhart:Rising Rates May Hurt Homeowner Program - Wall Steet Journal June 18th

Mortgage rates jump in one week - BBC June 19th

Mortgage window shopping Rates have been volatile, -- they may fall again - Market Watch June 18th
As Mortgage Rates Move, Headaches Follow - Washington Post June 20th

As you can see there is a wide array of messages that buyers will see and it is virtually impossible to make a clear decision as to what action to take. Below is the recent chart demonstrating what is happening in the mortgage market

Chart: Fannie Mae 4.5% Mortgage Bond

Also interesting to note is that while most will just look at the downward graph above and think mortgage rate are declining - exactly the opposite is true. This graph reallydemonstrates that mortgage rates have been rising.

More than ever you need to be the expert here to be able to cut to the chase with your clients. Mortgage rates are still very attractive. They will go up. With our governments need for capital and short term rates rising - Mortgage rates are like a boat floating on the sea of inflation and the tide is coming in.

Yes, next year we will have cheaper home prices but you will also have higher rates and as of right now - no tax incentives. Smart money continues to buy.

MORTGAGE RATES

Loan Programs	Interest Rates*
30 Year Conv.	low 5's
30 Year FHA/VA	Mid 5's
30 Year Jumbo	Upper 6's
5/1 Arm Conv.	Mid 4's
5/1 Arm Jumbo	Upper 5's

Please contact us for specific situations and specific rates.

*Risk Based Pricing will affect rate offered.

MORTGAGE RATE TRENDS

Joe Farro
Premier Capital Mortgage
(678)289-6600

Mortgage Market Update - To Appraise or Not thats the Question

Joe Farro (Premier Capital Mortgage) — Wed, 17 Jun 2009 06:17:22 -0700

There is a movement at this time to challenge the HVCC as many feel this is creating more issues than its tying to solve. At this time I feel trying to stop the HVCC is going to fall on deaf ears as we have not struggled long enough with this process. The main reason this is in place is to continue to bring credibility and confidence back into the home loan market for investors (buyers of mortgages). Most large institutional lenders have already had these processes in place for some time and they have worked for the most part. Yes,definitely there can be some improvements, but for now, lets focus on some strategies to work through this.

It has always surprised me that most loan officers and realtors never have spent much time with appraisers getting to know the process and methods used to complete appraisals. In the recent times many lenders tried developing systems to replace the appraiser and manage valuation risk. It is refreshing to see that many of the old school practices are coming back into vogue. Appraisals have 3 methods - Market, Cost and Income. Market obviously has the most weight in the analysis today.

From a buyers perspective home values are just downright ridiculously fantastic. Most today would argue that homes are offering tremendous value for your dollar. At the same time we are running into issues that homes are not appraising because of the recent sales that continue to move lower. As this happens it is going to cause a loss of income with declining commissions on smaller sales. Realestate has always been great as inflation has always increased home values while also increasing commissions at the same time - pretty cool. Today you work harder to sell lower priced homes with more red tape.

Spoke to some appraisers in the last couple of weeks getting some feedback that they are just as frustrated and confused as the rest of us. Lets not let the current state of affairs take us away from what we are trying to do - assist clients manage the changes in life while helping them to buy and sell homes. The solution I am proposing at this time is just a start. We need to better understand what the appraisers requirements are and what to do when we are faced with value issues. We owe it to our sellers and buyers to have more knowledge in this area. It is widely forecasted that prices are going to continue to decline through this year and next. An interesting point to the HVCC is that while the loan officer may no longer communicate with the appraiser - the realtor can.

Next Wednesday we are having a forum with a panel of experienced appraisers to openly discuss the current state of appraisal industry, the future changes and potential solutions in working with appraisal issues.   Dont miss this.

Appraiser Panel Discussion

            When:        Wednesday 6/23/2009
            Time:        10 am
            Place:        Keller Williams (Eagles Landing) Training Room


                Email Registration or call (770)692-6680

Also don't forget about Keeping Current Matters small group meeting - sign up

MORTGAGE RATES

Loan Programs

Interest Rates*

30 Year Conv.

Low 5's

30 Year FHA/VA

Mid 5's

30 Year Jumbo

Low 7's

5/1 Arm Conv.

Low 4's

5/1 Arm Jumbo

Upper 5's

Please contact us for specific situations and specific rates.

*Risk Based Pricing will affect rate offered.

MORTGAGE RATE TRENDS

DAILY RATE LOCK ADVISORY

For an in depth explanation and daily update click on The Daily Rate Lock Advisory.

A copy of this newsletter can be found at Market Update.
also check out Quick Tips
and Home Loan Toolbox

Joe Farro
Premier Capital Mortgage
(678)289-6600

Mortgage Market Update - The Rate Chase!

Joe Farro (Premier Capital Mortgage) — Thu, 11 Jun 2009 08:16:30 -0700

The recent interest rate increases are a real wake up call for every buyer in the market thinking about taking action soon. Some are even going to feel like they have missed the boat and you should not let them feel that way. The chart below demonstrates the quick increase in mortgage rates. Please understand that it is an inverse relationship. As the mortgage bond prices decline(below) mortgage rates increase.

Chart: Fannie Mae 4.5% Mortgage Bond (Friday Jun 05, 2009)

Even today as I prepare the following message the mortgage bond prices continue to decline.

The problem is that many home buyers have been lulled into a sense of complacency because of extremely low interest rates. Since the Federal Reserve initiated its program of buying mortgage-backed securities, which control the rates people pay for their home loans, rates had been range bound, bouncing between 4.50% to 5.00% for a 30-year fixed-rate loan.

But buyers shouldn't be confused by this. These rates are artificially low! Historically, interest rates have been above 6.00%. And any rate obtained below this number is a great deal, especially on homes with price tags from 2003!

There may be one more opportunity to see rates drop but this will not be a long sustained move, but rather a quick V shaped trading pattern. As most of us know it may take 45-90 days for a buyer to identify, negotiate and close a home. Looking forward there has not been as good of a time to buy a home as the market we are in today.

Time to take action is now!

Market Comment

Mortgage bond prices had another terrible week pushing mortgage interest rates considerably higher. Personal income, outlays, construction spending, ISM Index, and payrolls data came in stronger than expected. This did little to help the already shattered bond market. Oil prices continued to escalate hitting over $70/barrel. The Fed attempts to keep rates in check were not very effective as selling pressure continued. Bernanke tried to calm the markets by reiterating forecasts of tame inflation but his words fell on deaf ears among bond traders. For the week interest rates rose by about 1 and 1/2 of a discount point.

The Treasury auctions will once again take center stage, as the market has to deal with additional supply. Continued strength in the economic data will do little to help mortgage interest rates improve.

LOOKING AHEAD

Economic Indicator	Release Date & Time	Consensus Estimate	Analysis
3-year Treasury Note Auction	Tuesday, June 9, 1:30 pm, et	None	Important. $35 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates.
Trade Data	Wednesday, June 10, 8:30 am, et	$28.7 billion deficit	Important. Affects the value of the dollar. A falling deficit may strengthen the dollar and lead to lower rates.
10-year Treasury Note Auction	Wednesday, June 10, 1:30 pm, et	None	Important. $19 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates.
Fed "Beige Book"	Wednesday, June 10, 2:00 pm, et	None	Important. This Fed report details current economic conditions across the US. Signs of weakness may lead to lower rates.
Retail Sales	Thursday, June 11, 8:30 am, et	Up 0.3%	Important. A measure of consumer demand. A smaller than expected increase may lead to lower mortgage rates.
Business Inventories	Thursday, June 11, 10:00 am, et	Down 1.0%	Low importance. An indication of stored-up capacity. A stronger figure may lead to lower rates.
30-year Treasury Bond Auction	Thursday, June 11, 1:30 pm, et	None	Important. $11 billion of bonds will be auctioned. Strong demand may lead to lower mortgage rates.
U of Michigan Consumer Sentiment	Friday, June 12, 10:00 am, et	68.6	Important. An indication of consumers' willingness to spend. Weakness may lead to lower mortgage rates.

Payrolls

Last week was a prime example of the divergence between the unemployment rate and payrolls figure along with the risk of floating into important data. Unemployment came in at 9.4%, higher than the expected 9.2%, while non-farm payrolls fell 345,000, not as much as the expected 520,000 decline. Mortgage bond prices fell and rates spiked higher. Bond traders hoped the report would provide a solid indication that the labor market remained weak. Unfortunately it left more uncertainty. The unemployment figure is derived from a household survey while the payrolls number comes from an employer report.

Energy prices have risen considerably stoking inflation fears amid record debt levels. As a result the low mortgage interest rates that everyone considered a given have quickly gone away. The Fed continues to purchase mortgage bonds in an effort to keep mortgage interest rates low but they face a daunting task as the selling pressure continues. The Fed still has over $700b marked for purchasing additional mortgage bonds. The question remains whether that will be enough to help rates turn lower. So far it appears additional measures are needed.

MORTGAGE RATES

Loan Programs

Interest Rates*

30 Year Conv.

Mid 5's

30 Year FHA/VA

Upper 5's

30 Year Jumbo

Low 7's

5/1 Arm Conv.

Low 4's

5/1 Arm Jumbo

Upper 5's

Please contact us for specific situations and specific rates.

*Risk Based Pricing will affect rate offered.

MORTGAGE RATE TRENDS

DAILY RATE LOCK ADVISORY






For an in depth explanation and daily update click on The Daily Rate Lock Advisory.

A copy of this newsletter can be found at Market Update.
also check out Quick Tips
and Home Loan Toolbox

Joe Farro
Premier Capital Mortgage

Mortgage Marlet Update - The House Trap

Joe Farro (Premier Capital Mortgage) — Wed, 03 Jun 2009 08:54:47 -0700

Coming across stories, I thought this one provided some insight to some of the attitudes I have seen on where we are today with regard to real estate.

A mouse looked through the crack in the wall to see the farmer and his wife open a package. What food might this contain?' the mouse wondered - - - he was devastated to discover it was a mousetrap. Retreating to the farmyard, the mouse proclaimed the warning : There is a mousetrap in the house! There is a mousetrap in the house!' The chicken clucked and scratched, raised her head and said, 'Mr.Mouse, I can tell this is a grave concern to you, but it is of no consequence to me. I cannot be bothered by it.' The mouse then turned to the pig with the same, The pig sympathized, but said, 'I am so very sorry, Mr.Mouse, but there is nothing I can do. The mouse then turned to the cow. The cow said, 'Wow, Mr. Mouse I'm sorry for you, but it's no skin off my nose.' So, the mouse returned to the house, dejected, to face the farmer's mousetrap .. . . alone. That very night a sound was heard throughout the house -- SNAP! The farmer's wife rushed to see what was caught. In the darkness, she did not see it was a venomous snake whose tail the trap had caught. The snake bit the farmer's wife. The farmer rushed her to the hospital, and she returned home with a fever. Everyone knows you treat a fever with fresh chicken soup, so the farmer took his hatchet to the farmyard for the soup's main ingredient. But his wife's sickness continued, so friends and neighbors came to sit with her around the clock. To feed them, the farmer butchered the pig. The farmer's wife did not get well; she died. So many people came for her funeral, the farmer had the cow slaughtered to provide enough meat for all of them. The mouse looked upon it all from his crack in the wall with great sadness. So, the next time you hear someone is facing a problem and think it doesn't concern you, remember ---- when one of us is threatened, we may all be at risk. We are all involved.

The Story above provides many interesting viewpoints. As we continue to come out of this - the hope is that we learn from the recent past.

Joe Farro
Premier Capital Mortgage
(678)289-6600

Mortgage Market Update - Much Ado about Nothing - Tax Credit and Pown Payment

Joe Farro (Premier Capital Mortgage) — Fri, 29 May 2009 15:52:37 -0700

Earlier today I sent out the message that the New HUD guideline was released on the tax credit being used to purchase a home. Below is the message that was released.

Just out this morning HUD mortgagee letter 2009-15 is now out. FHA is now providing the guidance to help homeowners utilize the tax credit to purchase the home - thus not waiting to obtain the funds after the closing.

Please note there are more guidelines to follow and I am sure some lenders may have their own set of rules in place once they are able to interpret this mortgagee letter.

To be very clear on something that was not explicit in the previous message. The Funds from the tax credit may not be used for the down payment. The excerpt below from ML 2009-15

•· Pursuant to 12 U.S.C. 1709(b)(9), the homebuyer's downpayment required for eligibility for FHA insurance may not consist of any funds (including funds derived from a sale of the homebuyer tax credit) provided by the mortgagee, the seller, or any other person or entity that financially benefits from the transaction (or by any third party or entity that is reimbursed, directly or indirectly, by the financially benefiting person or entity). Accordingly, the proceeds of the sale of the tax credit to FHA approved mortgagees, the seller, or any other person or entity that financially benefits from the transaction (or any third party or entity that is reimbursed, directly or indirectly, by the financing benefiting person or entity), may not be used to meet the 3.5% minimum downpayment, but may be used as additional downpayment, buying down of interest rate, or other closing costs.

For an in depth explanation and daily update click on The Daily Rate Lock Advisory.

A copy of this newsletter can be found at Market Update.
also check out Quick Tips
and Home Loan Toolbox

Joe Farro
Premier Capital Mortgage
(678)289-6600
(800)613-0650

Mortgage Market Update - FHA Reinstitutes the Using the First Time Homebuyer Tax Credit

Joe Farro (Premier Capital Mortgage) — Fri, 29 May 2009 10:35:52 -0700

Just out this morning HUD mortgagee letter 2009-15 is now out. FHA is now providing the guidance to help homeowners utilize the tax credit to purchase the home - thus not waiting to obtain the funds after the closing.

Please note there are more guidelines to follow and I am sure some lenders may have their own set of rules in place once they are able to interpret this mortgagee letter.

I contacted HUD and there is going to be more information released on the HUD website soon to answer more questions and as always we will stay in touch to let you know the updates as they are released.

For an in depth explanation and daily update click on The Daily Rate Lock Advisory.

A copy of this newsletter can be found at Market Update.
also check out Quick Tips
and Home Loan Toolbox

Joe Farro
Premier Capital Mortgage

Morrtgage Market Update - Georgia Homebuyer Tax Credit - Now Passed!

Joe Farro (Premier Capital Mortgage) — Sat, 16 May 2009 14:57:41 -0700

On Monday, May 11th, Gov. Sonny Perdue signed into law HB 261 a tax credit from the state.

Some highlights of HB261

        - $1,800 or 1.2% of the purchase price spread over 3years(1/3 each year)
        - For purchases between June 1 and November 30 2009
        - Do not have to be a first time homebuyer

- For investment properties as well as owner occupied
- Only one credit per taxpayer

The tax credit is taken over a 3 year period and, unlike the federal tax credit, there is no income restriction. The income restriction for the federal tax credit begins at $75,000 for individuals or $150,000 for married couples and then phases out. The federal credit ends on November 30th as well.

With up to $8000 from the federal government and now $1800 more from Georgia, coupled with the lowest home prices and interest rates in a long time - um - this is just plain ridiculously good for buyers.

Joe Farro
Premier Capital Mortgage

Mortgage Market Update - Where is Mortgagee Letter 2009-15

Joe Farro (Premier Capital Mortgage) — Sat, 16 May 2009 13:52:38 -0700

I realize there is some confusion as HUD released Mortgagee Letter 2009-15 and then removed it from the FHA/HUD website. This announcement stated that qualified First-Time Home Buyers who want to take advantage of the available tax credit of up to $8,000 now have another option available to them to help them become homeowners and have access to the funds prior to closing.

I understand that some lenders are putting the news out that this is available but at this time Mortgagee Letter 2009-15 has been rescinded.

It's clear that first-time home buyers have been having a major impact on the housing market this year. The National Association of Realtors announced that first-time buyers, who typically account for less than 40% of home sales each year, have been especially busy...in March, homes that were purchased by first-timers accounted for 53% of all sales, and this percentage is expected to hold true for all of 2009.

With home affordability higher than ever, available tax credits and some of the lowest interest rates ever recorded for home loans, who can blame them? Particularly as a first-time buyer, there may never be a better time to buy a home than right now.

However, the availability of a tax credit, while a great incentive, does not put the money in the hands of a buyer before they buy. HUD's announcement now allowed for prospective and qualified home buyers to borrow the money from approved agencies and lenders prior to closing.

At this time there are still no details on what is happening.  I believe we should see more news on this week so that we may have some clarity.

I am mot exactly sure what HUD was thinking by doing this.   Obviously something happened that changed their mind. I am not sure that this is a good idea, However I hope that smarter people are making these decisions. I can only make my decision off what I see everyday as I work with first time home buyers. Please understand that my intentions is not that I don't want to help first time buyers out, but rather would like to see the industry continue to go down the path of responsible lending practices. If someone is not able to raise 3.5% for a down payment via gift or savings to purchase a home, I have concerns that they may not be able to overcome any hardship in the future.  I understand the goal of this initiative is to assist the market with absorption of foreclosures and also help the dream of home ownership. The other way I look at this is if someone does not have the financial resources or wherewithal to come up with 3.5% what is going to happen to them if they get into financial trouble in the future? Do they not have family or friends to help them out?

One thing I have seen in my mortgage career is that for those that work for what they want - they can make it happen. Making sacrifices to get what you want is not new - just a time tested action plan that works and helps you to appreciate what you have.   We are still coming out a time where this was not the case. Lets not go backwards.

Joe Farro
Premier Capital Mortgage

Mortgage Market Update - Property Assessments vs Market Values

Joe Farro (Premier Capital Mortgage) — Wed, 13 May 2009 06:28:37 -0700

This is a challenging year for the Tax assessors office as they are under incredible pressure by homeowners who look for assessed home values to follow market values.  In the past assessed valued have typically trailed market values by 10% or so. Today we are seeing the opposite as market values are now below assessment values.

As you may be working with home buyers identifying great opportunities one of the challenges is to properly quote payments and provide accurate expectations. I have seen purchase contracts in the 70k - 80k range with property taxes in the $2,500 - $3,000 range. Typically this home price range would have property taxes in the $900 - $1,200 range. Obviously this is going to impact the payment for the home and going to affect pre approval price ranges. One solution we are providing is to always quote accurate payments based on actual property taxes. On the PCM website we have posted a link on the Home Loan Toolbox page for property taxes across the United States(scroll toward the bottom of the page).

One statement that many buyers are told is that the property taxes should go down in the next year. I understand that this might seem like a realistic expectation but there is no way to guarantee this to the buyer. However recent legislation is empowering homeowners with more options than before. Senate Bill 240 changes this - assessments must now be fair or a property owner can take a professional appraisal straight to an arbitrator and receive a lower, true fair market valuation.  Some highlights to the legislation is the following

                    - The appeal must be filed within 45 days of the mailing
                    - Taxpayer will provide an appraisal dated with 30 days of appeal
                    - Board of Assessors has 30 days to review to accept - if not
                    - Information will go to clerk of superior court and arbitrator will be assigned in 15 days
                    - Arbitrator has 30 days to set appointment and 30 days to render decision
                    - **The Board of Assessors has the burden of proving value
                    - Whichever party loses they shall pay the cost of the arbitration

As you are working with clients this information should help to set the right expectation and provide the most up to information so they can make the proper decision.

Sort of an interesting proposition above as if the county loses the arbitration we all still lose because our tax dollars continue to pay the bill. Hopefully there will not be big issues as the Assessor office is able to deal with the appeals efficiently. In March we sent out an appeal message for homeowners to take action early. I sent in an appeal before the assessments came out and just received my new value. Very pleased with the results and don't need to go further.

There is now way to get out of paying - sure your value may be lowered but the next question is when will your millage rate may go up. Time will tell.

Property Tax Links

Tax Assessors Office - Henry County GA

Property Tax Callendar - Henry County GA

Tax Commissioner Best site to find property taxes - Henry County GA

MORTGAGE RATES

Loan Programs

Interest Rates*

30 Year Conv.

Upper 4's

30 Year FHA/VA

5

30 Year Jumbo

lower 6's

5/1 Arm Conv.

Forget about it

5/1 Arm Jumbo

Low 5's

Please contact us for specific situations and specific rates.

*Risk Based Pricing will affect rate offered.

MORTGAGE RATE TRENDS

DAILY RATE LOCK ADVISORY

For an in depth explanation and daily update click on The Daily Rate Lock Advisory.

A copy of this newsletter can be found at Market Update.
also check out Quick Tips
and Home Loan Toolbox

Joe Farro
Premier Capital Mortgage

Mortgage Market Update - FHA Lending & Property Flipping

Joe Farro (Premier Capital Mortgage) — Wed, 06 May 2009 06:58:00 -0700

The new electronic FHA 4155 has just been released that will now assist finding updated underwriting guidelines for all. A question that continually comes up every week for us is property flipping, especially since investors have been buying and renovating properties. FHA lending in my immediate market is constituting 70 - 80% of the purchase business right now. As a listing agent this is incredibly important to understand the guidelines and make sure you can execute a purchase contract with your seller while setting the right expectation. In regards to Property Flipping (scroll down to section e.)the first guideline to comply with is the 0-90 day rule. If you submit a contract within the first 90 days after the acquisition - no FHA loan will be able to proceed. Yes there are exceptions(section h) such as HUD properties and estate sales, but you will find that these most likely will not be ones that the general resale market would be able to utilize. Please rememberYour purchase contract must be dated 91 days or later.

In addition to the 90 day rule you will also find that there are additional guidelines for properties purchased between 91 and 180 days and 91 days and 12 months. The reason I bring these additional guidelines up is that for some home buyers a second appraisal may be required and this will affect closing costs. FHA appraisals are approaching $400 in this market and if the loan requires 2 appraisals you are now approaching the $800 range. There is relief though in that the second appraisal may not be charged to the borrower. Hint -you may want to make sure what your lenders policy is up front

Lastly you will find that the guidelines allow for underwriter discretion and today most lenders are going to take a cautious approach which most of the time may require the second appraisal. So to sum up some of this - the recommended approach might be - is that first the listing agent needs to know when the property was acquired - seems simple enough. Second need to make sure the buyers agent and lender are aware of the original acquisition date so they will know how to proceed. Please don't wait until the lender gets the title report only to find out they may need the second appraisal.

Joe Farro CMPS
(678)289-6600
joe@joefarro.com
Premier Capital Mortgage

Mortgage Market Update - HVCC or Havoc - you call it!

Joe Farro (Premier Capital Mortgage) — Wed, 29 Apr 2009 06:21:58 -0700

Joe Farro
Certified Mortgage Planner

Phone: (678)289-6600
Fax: (678)289-6601
jfarro@joefarro.com
www.joefarro.com

Hope you having a great month end and everything is going smooth.  If you are please tell me what your doing,  if not misery loves company .

As we continue to pay for the sins of the past real estate market the new Home Valuation Code of Conduct (HVCC) is going to now be in place starting May 1 for most lenders. The main purpose of this rule is to provide fair and impartial real estate appraisals for mortgage investors.

If you have been in the business over the last several years as a real estate agent I am sure you have come across some deals that you had no idea how the home appraised. You may even have been approached by some lender telling you to revise the sales price up 10 - 20% so the buyer could be given a second mtg by the seller that would be forgiven after closing. I know these deals happened - I don't know how other than a bogus appraisal provided to a unscrupulous mortgage lender. Well guess what? - those days are long gone and hope they never come back. The losers in this whole mess are you and me now.

One of the main goals of the HVCC is to remove the sales person(loan officer) from the appraisal ordering process. It is thought that a loan officer will order appraisals from appraisers who could get values. Heck, in the past I have been approached by appraisers telling me they can get the values I need to close my loans. I have been told by builders that if I wanted to work this account I had to use this appraiser and yes, - this has also happened with some real estate agents.

I think most of us has seen in some form or fashion issues with what has happened in the past.  Mortgage companies are going to have to comply with this on conventional (Fannie and Freddie) loans.  Every mortgage company will have their own policy which will differ somewhat form what others do. FHA and VA loans will still be ordered the same way they have been.

I do support the intent of HVCC and believe it could be a good thing but having to work with it in the recent past I experienced some issues. The creation of these appraisal management firms in the last year or so has been like the surge in REO business. Over the last year or so many appraisers have been approached to work with these national appraisal firms.  Conventional appraisal fees typically range from $300 - 400 per appraisal. When approached by these companies one of 2 things is going to happen the appraisal fee is going up for the buyer or the amount paid to appraiser is going down.   Guess what the better appraisers with good business are not interested to sign up for less pay, - so guess what the ones that sign up may not be the most capable.

Look we could take all day to talk about why this wont work or why we are in this position. Like it or not we are here.  We are still in the midst of this political hot potato and it is all about bringing back integrity and confidence into the mortgage industry.

I believe the preparation we must take here is roll up our sleeves and treat this like a true professional would. When hit with a lower values from contract sales prices make sure you have the best data to support the sale. Know what data the appraisers will look for. Get in front of appraisers to better understand what they are dealing with so you can better work with them.

Look this may not get changed until some legislators parents selling there home has an appraisal or appraisal review completed by the buyers mortgage company only to find out the contract is no good (can't move to retirement home) because the value is 40,000 off only to find out the appraiser came from 5 counties over and wasn't working with the best data sources.  Unfortunately it wont feel real until this happens to you and loose that one deal.

We all know some of the ridiculous deals out there and know that these values are tremendous. Greatest time ever to be a buyer. More to come on this

MORTGAGE RATES

Loan Programs

Interest Rates*

30 Year Conv.

Upper 4's

30 Year FHA/VA

5

30 Year Jumbo

lower 6's

5/1 Arm Conv.

Forget about it

5/1 Arm Jumbo

Low 5's

Please contact us for specific situations and specific rates.

*Risk Based Pricing will affect rate offered.

MORTGAGE RATE TRENDS

DAILY RATE LOCK ADVISORY







For an in depth explanation and daily update click on The Daily Rate Lock Advisory.

A copy of this newsletter can be found at Market Update.
also check out Quick Tips
and Home Loan Toolbox

Joe Farro
Premier Capital Mortgage

Mortgage Market Update - 20% Down Conventional Loans Only?

Joe Farro (Premier Capital Mortgage) — Wed, 29 Apr 2009 06:13:55 -0700

Joe Farro
Certified Mortgage Planner

Phone: (678)289-6600
Fax: (678)289-6601
jfarro@joefarro.com
www.joefarro.com

I am still surprised today that the media continues to paint the picture of only 20% down conventional mortgages for homeowners to utilize to purchase a home. Just this morning and over the weekend on CNBC and CNBC there were guest commentators who were discussing housing and indicating that we only had limited options for buyers to purchase a home. Only those with 20% down and perfect credit could purchase.  I agree that we are not in 2003 & 2004 where it seemed the qualifications to obtain a home loan was only to fog a mirror.

Important to note real estate is local and every market is different. In my immediate market FHA (3.5% down), VA (0% down) , Starte Bond programs (DCA) and Rural Development (0% down) are also available to assist those who qualify to get in with less than 20% down. We have added a resource called home loan toolbox  page to you that provides the correct information on what is really available.

To most this is not new information. The great thing is right now we don't need to create compelling reasons for home buyers to purchase.   Most experts agree that now is the time to buy. Heard a 30 year builder explain that when he was selling homes back in the 80's buyers were only wishing for 12% mortgage rates.

I get so excited when I meet first time home buyers that are qualified because we can transform their financial life right now with all the good news.  Currently we have some of the lowest interest rates of all time, declining home prices and the first-time home buyer tax credit. Some don't realize that you can actually take advantage for he tax credit this year for homes purchased before December 1, 2009. Even if you have already completed your 2008 income tax returns, all you need to do is to amend the return to obtain the tax credit funds this year.

Lets focus on what is working and share these opportunities.

Joe Farro
Premier Capital Mortgage

Mortgage Market Update - Seller Value Proposition

Joe Farro (Premier Capital Mortgage) — Wed, 29 Apr 2009 06:05:57 -0700

Joe Farro
Certified Mortgage Planner

Phone: (678)289-6600
Fax: (678)289-6601
jfarro@joefarro.com
www.joefarro.com

Last week I sent out a small blurb that some have asked some questions on. I introduced a new tool for listing agents called the Seller Value Proposition.

As a listing agent who does not specialize in REO - how do you compete with the growing number of listings in the foreclosure market? I believe that sellers need to have the right perspective. Below is a chart provided by Case Shiller to forecast home values in the near future.

We are no longer in a market where we need to burry our head in the ground and hope for the best. Clients need solutions that work. To assist your sellers that all is not lost we have created a tool to help demonstrate the value of pricing to sell today while locking in a savings on a new home loan at these all time low rates. Below is a copy of the Seller value proposition that we have created to help you and your sellers.

This is a quick and easy tool to utilize that only needs you to enter 4 items. In the example above over the next 27 years the difference in savings will create over a $46,000 savings.

We have added a new page under the Realtor Toolbox called Financing tools. The Seller Value Proposition has been created specially for you. Please feel free to download - you will need excel. Please let us know what you think.

Joe Farro
Premier Capital Mortgage