Earnell's Blog

The Market Round Up - 12/28/07

Horizon Home Mortgage — Fri, 28 Dec 2007 11:07:56 -0600

Good Afternoon,

As the year comes to a close, its encouraging looking ahead to a new year filled with unlimited opportunities and prosperity! Okay, maybe I'm just a LITTLE optimistic, but in this business optimism is what keeps us from diving out the window.

As the numbers continue to pour in from the year's end and projections made for the next, it looks like it will continue to be a rough ride. With increasing foreclosures in Connecticut and tighten loan guidelines nationwide, we will continue to feel the crunch well into 2008. As the market twists and turns, make sure you have a mortgage provider that can adjust to the times. At Horizon Home Mortgage, we have invested in the technology and resources to build your business as well as ours. Give us the chance to put our words to the test.

Conforming rates for 100% Financing and the lower LTV's increased by 0.125% from last week. Sub-prime rates vary on a case by case basis so please call for pricing. Don't forget to register for the up coming seminar "The Future of Real Estate" for an even more in-depth view of the real estate market. Have a great weekend and a Happy New Year!!!

The Connecticut Economic Outlook: Foreclosures, Subprime Crisis Will Distress State Economy

By Peter E. Gunther, Connecticut Center of Economic Analysis, 12/24/07

The Congressional Joint Economic Committee (JEC) analysis on the subprime crisis anticipates that Connecticut will suffer foreclosures inflicting losses of $1.4 billion, $876 million directly, and another $531 million through declining prices of properties in neighborhoods where foreclosures occur. With falling property values, local property tax revenues will suffer a loss of $19 million. The JEC expects the tri-state area to bear 16.6 percent of the $103 billion cost of the mortgage crisis.

Given JEC expectations, it will take much of the next nine quarters for the subprime mortgage debacle and associated housing surpluses to work their way through the economy.

Foreclosure Adjustment

Residential construction permits for Connecticut and New York (Table 1) suggest that by the end of 2007, contractors will have adjusted to expectations concerning foreclosures. And there are suggestions that the population is beginning to relocate in order to minimize transportation costs.

Residential construction seems to be adjusting rapidly to the new environment. Expectations for permits of the next nine quarters are down, compared with the previous nine quarters before the slide began, by nearly 13,500, just short of the 14,047 subprime foreclosures the JEC expects over the next nine quarters.

The shift in Connecticut and especially New York to an increasing share of units in urban areas suggests that people may be reducing transportation costs by moving closer to work or mass transit.

Permit values reveal the direction of future construction activity. Table 2 presents the percentage changes in the value of private residential construction permits, paralleling much of what Table 1 covered.

Two points are clear at a glance: declines in aggregate value of all units and single family homes are considerably smaller than for numbers of units, and the value of permits for structures with five or more units is positive in Connecticut. As it is aggregate value, not units, that drives activity, construction should not differ as much as mere permit data suggests.

How Will Connecticut Fare?

Connecticut's seasonally adjusted unit housing permits have already made most of the needed adjustments. The outlook anticipates they will decline gently from 1,911 in the next quarter to 1,891 in the fourth quarter of 2009.

Despite the ubiquity of subprime impacts, Connecticut enjoyed sustained growth in the most recent two quarters of 3.8 percent and 3.9 percent in its real GDP at annual rates. This outlook anticipates slowing growth of 2 percent for 2008 and 1.8 percent for 2009.

Consistent with the devalued dollar affording wider opportunities for American exports, in Connecticut, manufacturing earnings in 2007-Q3 outperformed expectations by $7.13 a week. Nevertheless, manufacturing earnings will continue to be under pressure from competing imported goods and services. The rising cost of important inputs will also pressure earnings, such as energy, potentially leading to annual declines by less than half a percent.

The above factors should support modest growth for Connecticut GDP and seasonally adjusted employment of 2 percent in 2007 and 1.8 percent in 2009. Chart 1 presents Connecticut quarterly GDP.

Employment is expected to grow modestly, with .75 percent in 2008 and an almost vanishingly small growth of .18 percent in early 2009. However, the state is expected to suffer an employment decline going into the fourth quarter of 2009. Chart 2 shows the levels anticipated for employment. If real growth holds up better than now anticipated, employment growth could continue through 2009.

Sector Analysis

With three quarters of data in preliminary form, the GDP growth for 2007 in the finance insurance and real estate industry to be 3.8 percent. With ongoing pressures from credit markets, the rate of growth will decline from 3.0 percent to 1.9 percent annually going out to 2009.

With dollar depreciation, manufacturing is likely to continue to do well, with expected growth of 3.9 percent and 3.0 percent in 2008 and 2009.

TODAYS RATES - 12/28/07
	Loan-to-Value (LTV)
Credit Score	100%	95%	90%	80%
720+	*6.50%	6.25%	6.25%	6.25%
680 - 719	*6.50%	6.25%	6.25%	6.25%
660 - 679	*6.50%	6.25%	6.25%	6.250%
640 - 659	n/a	6.50%	6.50%	6.50%
620 - 639	n/a	6.50%	6.50%	6.50%
600 - 619	n/a	n/a	n/a	n/a
580 - 599	n/a	n/a	n/a	n/a
550 - 579	n/a	n/a	n/a	n/a
501 - 549	n/a	n/a	n/a	n/a

*FLEX 100 PROGRAM

** Loan contains 3 yr pre-payment penalty

All Rates assume financing for a single family/condo,

primary residence, full documentation, 30 yr fixed. For other property,

occupancy, documentation and loan types, please call for pricing.

Rates subject to change

****COMMUNITY LENDING SPECIAL ****

6.875% - 100% Financing, single family/condo, primary residence

w/ 600+ credit score. Rate is for approval thru community lending program.

Applicant income cannot exceed $80,200 for Hartford County or property

must be located in low-to-moderate income census tract.

Rates subject to change

6.00% - 97% Financing, single family/condo, primary residence

Rates subject to change

Do not hesitate to call regarding any scenarios or questions. We're always here to help!

The Market Round Up - 12/20/07

Horizon Home Mortgage — Thu, 20 Dec 2007 16:50:58 -0600

Good Evening,

As we approach Christmas, it's good to see that Old Saint Nick isn't the only one participating in the spirit of giving. Today, New England's five largest banks announced the creation of "The Mortgage Relief Fund", targeted towards homeowners in New England facing resets in their adjustable rate mortgages. Though limited in scope (as with most of the initiatives proposed during this crisis) it is estimated to help about 10,000 homeowners in Connecticut alone.

As an approved broker for two of the five banks offering this program, Horizon Home Mortgage has the ability to help your past clients who may be struggling with their payments during these tough times. Clients who would be forever grateful for you helping them, even after you've done your job. Because the good realtors know...that your job is never done.

Conforming rates for 100% Financing and the lower LTV's remain constant. Sub-prime rates vary on a case by case basis so please call for pricing. Don't forget to register for the up coming seminar "The Future of Real Estate". You won't want to miss it. Have a great weekend and a Very Merry Christmas!!!

New England: Mortgage Relief Fund Set Up

By MARK JEWELL AP Business Writer, Dec. 20, 2007, 3:08PM
© 2007 The Associated Press

BOSTON - Five banks have created a $125 million fund to refinance mortgage loans for New England borrowers who are keeping up with monthly payments but face interest rate increases that could eventually put them at risk of losing their homes. The program announced Thursday is the latest in an array of efforts nationwide by local governments and private industry to expand options for at-risk homeowners as lending standards tighten and housing prices decline.

New England's so-called "Mortgage Relief Fund" is geared toward homeowners who were offered subprime mortgages because of their weak credit histories and now face rising payments as adjustable-rate mortgages reset to higher levels. Although far fewer may ultimately participate, as many as 38,000 borrowers in New England meet the program's eligibility criteria, according to research by the Federal Reserve Bank of Boston, which helped arrange the fund agreement with the five banks.

The total includes more than 15,000 borrowers in Massachusetts; 10,000 in Connecticut; 3,800 in both New Hampshire and Rhode Island; 3,400 in Maine; and fewer than 1,000 in Vermont. Homeowners generally must meet criteria including being up-to-date or nearly up-to-date on payments; a credit score of at least 620; equity of at least 10 percent in the home at the time the mortgage begins; and documented income levels.

The program is not geared toward borrowers already far behind on payments, or those facing imminent foreclosure. The initiative "offers genuine help to a subset of borrowers who are at a perilous juncture in their mortgages," Eric Rosengren, president and chief executive of the Boston Fed, told a news conference that included executives of the five banks, as well as Massachusetts Gov. Deval Patrick and Boston Mayor Thomas Menino. Rosengren said the program "won't be the whole answer, but it's certainly a start."

Eligible borrowers can arrange new loans with the five banks under terms similar to those offered to borrowers with generally strong credit, with potential savings of hundreds of dollars in monthly payments, Rosengren said. Participating banks will be able to limit their credit risks because of loan guarantees extended by the Federal Housing Administration as well as state programs to protect lenders in case a borrower defaults. The banks that collectively set aside the $125 million include several of New England's biggest financial institutions: Bank of America, Citizens Bank, Sovereign Bank, TD Banknorth and Webster Bank.

Officials said the fund could be expanded above $125 million if other banks decide to sign on later. Several other similar government and private sector programs that have recently emerged amid the housing slump have so far seen lower-than-expected borrower participation _ in part because of strict criteria and difficulty spreading the word about the programs.

Backers of the New England program have set up a Web site and plan media advertisements paid by the banks. The Web site includes eligibility criteria and contact information for participating banks. A spokesman for the Neighborhood Assistance Corp. of America, a Boston-based nonprofit homeowner advocacy group, said the New England program "is a good step, although it is limited."

In particular, the program doesn't appear to offer much to homeowners holding little equity in their homes, said the NACA spokesman, Darren Duarte. Because home values have recently declined, such low-equity borrowers often owe more on their mortgage than their home is worth, meaning they're often unable to benefit by selling the home. The New England program requires that the current value of a borrower's house exceed the amount owed on the loan, Duarte noted.

TODAYS RATES - 12/20/07
	Loan-to-Value (LTV)
Credit Score	100%	95%	90%	80%
720+	*6.50%	6.125%	6.125%	6.125%
680 - 719	*6.50%	6.125%	6.125%	6.125%
660 - 679	*6.50%	6.125%	6.125%	6.1250%
640 - 659	n/a	6.375%	6.375%	6.375%
620 - 639	n/a	6.375%	6.375%	6.375%
600 - 619	n/a	n/a	**9.40%	**9.11%
580 - 599	n/a	n/a	**9.84%	**9.49%
550 - 579	n/a	n/a	n/a	**9.55%
501 - 549	n/a	n/a	n/a	n/a

*FLEX 100 PROGRAM

** Loan contains 3 yr pre-payment penalty

All Rates assume financing for a single family/condo,

primary residence, full documentation, 30 yr fixed. For other property,

occupancy, documentation and loan types, please call for pricing.

Rates subject to change

****COMMUNITY LENDING SPECIAL ****

6.75% - 100% Financing, single family/condo, primary residence

w/ 600+ credit score. Rate is for approval thru community lending program.

Applicant income cannot exceed $80,200 for Hartford County or property

must be located in low-to-moderate income census tract.

Rates subject to change

6.00% - 97% Financing, single family/condo, primary residence

Rates subject to change

Do not hesitate to call regarding any scenarios or questions. We're always here to help!

The Market Round Up - 12/14/07

Horizon Home Mortgage — Fri, 14 Dec 2007 09:38:08 -0600

Good Morning,

I know it's been a while since the last "Round Up", but as you can see below we have been busy staying in business. As the market continues to turn upside down, many brokers are falling by the waist-side as evidenced by the dramatic increase in license revocations in Connecticut.

In these times it critical to align yourself with a mortgage partner who has the ability to maneuver through a difficult market while providing your clients with sensible lending solutions (FHA, CHFA, No Money Down, Down Payment Assistance, etc). As an independently licensed FHA provider, Horizon Home Mortgage has the financial capacity as well as the credibility to weather the storm.

Conforming rates for 100% Financing and the lower LTV's remain constant. Sub-prime rates vary on a case by case basis so please call for pricing. Have a great weekend!!!

Revocation Of Mortagage Broker Licenses Rising

By Sean O'Leary, Hartford Business Journal Staff Writer - 12/10/07

The number of mortgage broker licenses revoked or suspended by the state has risen considerably, up four times the number of enforcement actions issued last year. The state Department of Banking has yanked the licenses of about 20 companies, including eight last month alone, and industry observers expect more by year's end. The banking department's regulatory proceedings are in stark contrast to the handful of enforcement measures it carried out through the entire year of 2006.

In most cases, the state's current actions come on the heels of another reversal of fortune for mortgage broker companies. Bond companies are no longer willing to post bonds for the mortgage companies as required by Connecticut law. And without a bond, the state will not issue the required the mortgage broker license.

"For these recent orders, there have been a large number of bond cancellations," said Kathleen Titsworth, Department of Banking spokesperson. "When the bonds are cancelled, we are notified and then we are aware. [The mortgage brokers] are given 30 days, but if they have had their bonds cancelled, they will lose their license." In most of the orders, the brokers and lenders cited by the state - including Access Mortgage Corporation of New Haven - did not respond to the state's notice, an indication that the firm is likely out of business.

Norman Roos, the counsel for the Connecticut Mortgage Bankers Association, has represented independent brokers and lenders for more than three decades. "I would say, clearly, what you have seen does relate to the sea change, particularly in the subprime mortgage market," he said. "It's sort of a surge because of the market correction that is going on. When you have these actions and there is a failure to maintain bonds, these are clearly situations of someone shutting down."

There could be another wave of companies failing in the next couple of months, Roos said, noting that the current lending conditions will make it difficult for brokers experiencing money troubles to remain financially sound. "When these companies fail to even respond to a notice, it's indicative of the market we're facing," said Roos. "It means one of two things: It means that they're going out of business because they feel it is no longer profitable, or the market has moved into the credit crunch so far that they have financial obligations they can't meet."

If the mortgage brokers go out of business and fail to keep their loan commitments, Roos said it may become an issue to the state attorney general or banking officials. The recent surge of suspensions and revocations is part of the department's overall goal to combat the crisis. "This has nothing to do with the economics of the crisis and everything to do with keeping sharp," said Howard Pitkin, the state banking commissioner. The mortgage market, specifically the subprime mortgage market, has been on state officials' radar. In April, Gov. M. Jodi Rell convened a task force to examine the soaring rise of home mortgage foreclosures.

TODAYS RATES - 12/14/07
	Loan-to-Value (LTV)
Credit Score	100%	95%	90%	80%
720+	*6.50%	6.125%	6.125%	6.125%
680 - 719	*6.50%	6.125%	6.125%	6.125%
660 - 679	*6.50%	6.125%	6.125%	6.1250%
640 - 659	n/a	6.375%	6.375%	6.375%
620 - 639	n/a	6.375%	6.375%	6.375%
600 - 619	n/a	n/a	**9.40%	**9.11%
580 - 599	n/a	n/a	**9.84%	**9.49%
550 - 579	n/a	n/a	n/a	**9.55%
501 - 549	n/a	n/a	n/a	n/a

*FLEX 100 PROGRAM

** Loan contains 3 yr pre-payment penalty

All Rates assume financing for a single family/condo,

primary residence, full documentation, 30 yr fixed. For other property,

occupancy, documentation and loan types, please call for pricing.

Rates subject to change

****COMMUNITY LENDING SPECIAL ****

6.875% - 100% Financing, single family/condo, primary residence

w/ 600+ credit score. Rate is for approval thru community lending program.

Applicant income cannot exceed $80,200 for Hartford County or property

must be located in low-to-moderate income census tract.

Rates subject to change

6.00% - 97% Financing, single family/condo, primary residence

Rates subject to change

Do not hesitate to call regarding any scenarios or questions. I'm always here to help!

Give Me a Break - Part 1

Horizon Home Mortgage — Tue, 13 Nov 2007 12:20:18 -0600

I'm sorry, but I just have to say something here. It's really frustrating how politicians are trying to spin the housing situation that brokers are scum (many of which I would agree), and they as our elected officials are the knights in shining armor riding in to save the day. Stiff legislation (House Bill, HR3915) combined with gracious loans, such as FHA Secure and Gov. Jodi Rell's new CHFA Program in Connecticut, will surely bring stability back to the market...or will it. While we as mortgage professionals know the truth of the matter, there are a multitude of people who have no clue as to the real impact of these measures. With that said, let me break it down for you.

House Bill HR3915, aka The Mortgage Reform and Anti-Predatory Lending Act of 2007, basically proposes four things:

•1) Mandatory registration and licensing of all mortgage originators, mortgage brokers and bank loan officers - DUH!!! Why did it take a catastrophic event like the "Great Credit Crunch of 2007" to make that happen. Many states adopted this practice years ago. Besides, it's only fair to expect that the financial facilitators of the biggest and most important purchase of a one's life, at least, be competent in providing the best options for them.

•2) Minimum standards for all mortgages. Which states the borrower must have the ability to repay - Okay, so you're telling me if I offer 100% financing to a borrower with a 620 credit score without verifying their income or assets, they may not be able to repay the loan??? The writing was on the wall two years ago when these types of loans were a dime a dozen.

While we as mortgage professionals should be more responsible to advise our customers in loans that best fit their situations, let's place equal culpability on the lenders and investors who wrote and bought this paper. I didn't see anyone complaining about the rates and fees they were charging at the time. In Vegas, when you roll the dice and lose, the house never gives back your money, no matter how much you cry.

•3) Provides limited liability to secondary market securitizers who package and sell interest in home mortgage loans outside of these standards - This is one I'm hoping to get more clarity on, as no one is speaking to this provision. Does this mean they get a bigger tax break if the paper fails to perform? If so, I'm for that. I believe you should receive certain benefits for investments that stimulate the economy. But if it means they are limited in their legal liability as well, then I have a problem. Is it okay to put the mortgage professionals who originated these loans on the hook, but not the investors who offer them?

•4) Expands and enhances consumer protections for "high-cost loans" under the Home Ownership and Equity Protection Act - Now that sounds reasonable, until you understand how they intend to make that happen. The thought is that eliminating the Yield Spread Premium (YSP), which is the rebate paid on the margin of a rate, will prevent brokers from selling higher rate loans to borrowers. I guess the olds days of "2 on the front and 2 on the back" would be over, and if this is how you service your clients then it would be a fitting end.

However, there are many of us who use the YSP as a tool to lower the cost to our borrowers. Many of my clients are first-time home buyers who have just enough money for reserves, not to mention paying another $3 - 5k in closing costs. With YSP, I'm able to offer them a No Fee Option, many times paying for expenses such as appraisals and inspections. Eliminating this rebate would greatly increase closing costs and defeat the very purpose of enacting this bill, which is to protect borrowers and give as many as possible a fair chance at homeownership.

Force brokers and banks to disclose the YSP and explain how it affects the rate. That way the borrower can make a better informed decision as to which option is best for their financial situation. I'm all for licensing, education and holding our profession to a higher standard, but the buck shouldn't stop here. Let's hold everyone accountable in this industry to do that same and not make drastic decisions that could push us further down the abyss.

The Market Round Up - 10/31/07

Horizon Home Mortgage — Wed, 31 Oct 2007 11:00:25 -0500

Good Afternoon,

Freddie Kruger, Mike Meyers and Jason combined could not amount to the horror we are witnessing in these scary times. In an effort to calm the evil sprirts lurking, The Fed is expect to reduce the discount rate yet again today. As the housing market continues to slump and the infamous "credit crunch" tightens it's grip, the government is clamoring to keep things afloat.

We all know things are pretty bad, and could possibly get worst before they get better. This a time to form strong strategic partnerships with reliable and innovative companies dedicated to helping each other through this period. We at Horizon Home Mortgage are commited to not only providing the best service and expertise, but also unique ways to grow and sustain your business. Call us today to discuss forming a strategic alliance.

Conforming rates for 100% financing and the lower LTV's remain constant. Sub-prime rates remain constant as well. Happy Halloween!!!

Fed Rate Cut Expected Wednesday

UPDATED - Wednesday October 31, 2007 4:03am

Washington (AP) - With oil prices soaring and the housing market sinking, the Federal Reserve is likely to combat the economic turmoil with more interest rate cuts.Federal Reserve Chairman Ben Bernanke and his colleagues were wrapping up a two-day meeting Wednesday and many economists believe they will announce that they have decided to follow September's half-point cut in the federal funds rate with a quarter-point cut at this meeting.

"They are going to cut rates," predicted Mark Zandi, chief economist at Moody's Economy.com. "The economy is weakening and financial markets remain unsettled."

Many analysts said this rate reduction probably will not be the last either, as the central bank keeps reducing rates to help the economy overcome a host of problems.

The Fed cut the federal funds rate, the interest that banks charge each other, for the first time in four years at its September meeting, reducing it to 4.75 percent. Responding to that move, commercial banks cut their prime lending rate, the benchmark for millions of consumer and business loans, by a half-point as well to 7.75 percent.

The economy's troubles include the worst slump in housing in more than two decades and a credit crunch that roiled financial markets this summer when investors suddenly became concerned about mounting losses from defaults on subprime mortgages.

With lenders tightening mortgage standards, marking it harder for prospective buyers to qualify for loans, and defaults continuing to rise, the slump in housing has deepened.

Financial markets also have a new worry in the latest surge in oil prices. Crude oil prices have hit records above $93 per barrel.

The worry is that the combination of the deep slump in housing, a lingering credit-crunch and rising oil prices will severely dampen consumer spending, the economy's main growth engine, in the months ahead.

"The economy is facing a perfect storm right now of a crisis-related tightening of credit, higher oil prices and lower house prices," said David Jones, chief economist at DMJ Advisors, a Denver forecasting firm. "We are going to see a significant slowing in growth."

Jones forecast that the overall economy, as measured by the gross domestic product, will slow to a rate of 1.5 percent for this quarter and will dip even lower to a rate of 1.3 percent in the first three months of next year.

But the ongoing credit and housing problems and the renewed surge of energy prices are expected to exact a toll in upcoming months with the economy not expected to regain its balance until mid-2008. Many analysts believe that in addition to a rate cut Wednesday, the Fed will cut rates at its final meeting of the year in December and possibly at its January meeting as well.

"It is possible that the housing industry will take us over the edge into a recession," he said, noting that every housing downturn of the past 60 years with the exception of two have triggered recessions.

TODAYS RATES FROM HORIZON HOME MORTGAGE - 10/31/07
	Loan-to-Value (LTV)
Credit Score	100%	95%	90%	80%
720+	*6.75%	6.25%	6.25%	6.25%
680 - 719	*6.75%	6.25%	6.25%	6.25%
660 - 679	*6.75%	6.25%	6.25%	6.25%
640 - 659	n/a	6.375%	6.375%	6.3750%
620 - 639	n/a	6.375%	6.375%	6.375%
600 - 619	n/a	**10.67%	**9.40%	**9.11%
580 - 599	n/a	n/a	**9.84%	**9.49%
550 - 579	n/a	n/a	n/a	**9.55%
501 - 549	n/a	n/a	n/a	n/a

*FLEX 100 PROGRAM

** Loan contains 3 yr pre-payment penalty

All Rates assume financing for a single family/condo,

primary residence, full documentation, 30 yr fixed. For other property,

occupancy, documentation and loan types, please call for pricing.

Rates subject to change

****COMMUNITY LENDING SPECIAL ****

6.875% - 100% Financing, single family/condo, primary residence

w/ 600+ credit score. Rate is for approval thru community lending program.

Applicant income cannot exceed $80,200 for Hartford County or property

must be located in low-to-moderate income census tract in Windsor/Hartford County.

Rates subject to change

FHA Loans

6.25% - 97% Financing, single family/condo, primary residence

Rates subject to change

Do not hesitate to call regarding any scenarios or questions. I'm always here to help!

The Market Round Up - 10/25/07

Horizon Home Mortgage — Thu, 25 Oct 2007 13:09:35 -0500

Good Afternoon,

When I was taking drivers education in high school, one thing I remembered was how to respond when your car spins out of control. Most people would slam on the brakes and pull the wheel in the opposite direction thinking it will bring the car under control, when the key is to easy your foot off the gas and gently steer the car back under control. Hopefully you will remember this if nothing else in this article.

While most of the proposed bill provides much needed regulation, somethings in this bill (in particular the elimination of yield spread premium or YSP) is the drastic re-correction that could cause the market to spin out of control. YSP allows for a borrower to tailor their closing costs to their budget and financial needs, such as low or no point options. Eliminating this would drastically raise closing costs thus making loans unaffordable for many borrowers (in particular first-time home buyers). This bill is a big step in the right direction, but still needs more consideration before a move is made that could possible send us further down the abyss. More information to follow as talks continue.

Conforming rates for 100% financing remain constant while the lower LTV's decreased by 0.125%. Sub-prime rates remain constant. Have a great weekend!!!

Sweeping Bill Could Radically Alter the Mortgage Industry

Posted on Wednesday, October 24, 2007 fromMorgageLender.com

Democrats unveiled a sweeping predatory lending bill would - among other things - eliminate the Yield Spread Premium (YSP), create a national broker registry, end prepayment penalties on subprime loans, and extend assignee liability to investors on the secondary market for loan performance.

The Mortgage Reform and Anti-Predatory Lending Act of 2007, or H.R. 3915, represents one of the most comprehensive efforts at mortgage industry reform by House Financial Services Committee chairman Rep. Barney Frank.

The bill is the product of numerous private and public discussions Frank has held all year with representatives of the mortgage industry, regulators, consumer groups, lawmakers and other related groups.

The new legislation would require that all mortgage originators to hold licenses under state or federal law, and would force lenders to be reasonably sure borrowers are able to repay the loan they are offered.

Every loan document would identify the originator under the national registry.

The bill would require criminal background checks, testing to demonstrate basic knowledge of loan products and continuing education and professional ethics training for all originators.

At the onset of the loan process, loan originators would have to provide a simple, straight-forward disclosure of their role in a mortgage transaction, including all fees and other sources of compensation.

Another of the bill's provisions would reduce the "points and fees" trigger for "high-cost loans" under the Home Ownership and Equity Protection Act (HOEPA) from 8% to 5% and include all costs and fees charged to the borrower.

The bill would also prohibit lenders from steering borrowers to more costly loans, eliminating the use of yield spread premiums.

A wide spectrum of federal regulators - including HUD, OCC, OTS, and FDIC - would draw up the regulations prohibiting originators from steering consumers toward a loan "not in the consumer's interest."

If a securitized subprime mortgages lacks income documentation, the bill would allow borrowers to rescind the loan and recover transaction costs on the stated-income loan.

While the bill would prohibit prepayment penalties on subprime loans completely, prepayment penalties on a prime loan would have to expire at least three months before interest rates reset on a prime adjustable-rate mortgage.

The proposed legislation would also extend some liability to certain parts of the secondary market to ensure that investment banks and others securitizing the loan fundings monitor them for quality and underwriting standards.

If secondary market investors follow certain due diligence and other practices, the bill allows for the creation of safe harbors to shield them from liability.

U.S. Treasury Secretary Henry Paulson has argued that assignee liability could scare away investors and further damage both the mortgage market and the larger economy.

The National Association of Mortgage Brokers (NAMB) issued a mixed response to the proposed bill.

The group applauded the creation of a national registry and new disclosure rules, but voiced serious concern about several provisions, particularly the elimination of the YSP.

"The indirect compensation mortgage brokers receive from lenders is a defendable fee that actually lowers closing costs to consumers," said NAMB President George Hanzimanolis.

"It is an imperative tool for first time homebuyers, and critical to enable so many people to own a home and manage their finances."

NAMB also suggested that many lenders will reject making loans at the heightened HOEPA threshold, which Hanzimanolis likened to government sanctioned ‘red-lining.'

"These restrictions are going to cut off credit to people who are generally in lower economic areas who deserve and need credit," said Hanzimanolis.

The Mortgage Bankers Association (MBA) chose not to address the legislation directly, and only welcomed a "full and open debate on how to best protect consumers."

TODAYS RATES - 10/25/07
	Loan-to-Value (LTV)
Credit Score	100%	95%	90%	80%
720+	*6.75%	6.25%	6.25%	6.25%
680 - 719	*6.75%	6.25%	6.25%	6.25%
660 - 679	*6.75%	6.25%	6.25%	6.25%
640 - 659	n/a	6.375%	6.375%	6.3750%
620 - 639	n/a	6.375%	6.375%	6.375%
600 - 619	n/a	**10.67%	**9.40%	**9.11%
580 - 599	n/a	n/a	**9.84%	**9.49%
550 - 579	n/a	n/a	n/a	**9.55%
501 - 549	n/a	n/a	n/a	n/a

*FLEX 100 PROGRAM

** Loan contains 3 yr pre-payment penalty

All Rates assume financing for a single family/condo,

primary residence, full documentation, 30 yr fixed. For other property,

occupancy, documentation and loan types, please call for pricing.

Rates subject to change

****COMMUNITY LENDING SPECIAL ****

6.875% - 100% Financing, single family/condo, primary residence

w/ 600+ credit score. Rate is for approval thru community lending program.

Applicant income cannot exceed $80,200 for Hartford County or property

must be located in low-to-moderate income census tract.

Rates subject to change

6.00% - 97% Financing, single family/condo, primary residence

Rates subject to change

Do not hesitate to call regarding any scenarios or questions. I'm always here to help!

The Market Round Up - 10/19/07

Horizon Home Mortgage — Fri, 19 Oct 2007 12:01:13 -0500

Good Afternoon,

I hope you find the below article as enlightening as I have. But please understand the problem we are facing is two fold. Money hungry investors looking for hugh returns coupled with inadequate regulations have made for one fess mess. Although many people in this industry oppose stiffer legislation, it is really needed to hold this profession to a higher standard.

As a licensed broker in the state of Florida (which is highly regulated as opposed to Connecticut) as well as a licensed HUD approved lender (FHA/CHFA), we welcome this legislation with opens arms. While brokers are not entirely to blame, if more operated with a higher level of integrity the problem would be far less severe.

Conforming rates for 100% financing and the lower LTV's decreased by 0.125%. Sub-prime rates remain constant. Remember, many programs are no longer available, so make sure your client's are properly qualified as they continue their house hunt. Have a great weekend!!!

Mortgage bankers, brokers at odds

Oct. 18, 2007 (Thomson Financial delivered by Newstex) --

WASHINGTON (AP) - Mortgage brokers are squaring off with bankers over efforts in Congress to impose stiffer regulations on the industry.

The outcome of the long-running fight could help shape the future of a market battered by lax lending practices that have led to a surge in home loan defaults.

Brokers acknowledge their industry would benefit from mandatory criminal background checks, education requirements and licensing by state or federal authorities. But they say the same standards should also apply to bank loan officers.

While bankers agree on the need for stricter professional standards, they say the emphasis should be on mortgage brokers, who face dramatically different licensing requirements from state to state. The banks say their industry is already regulated enough by state and federal authorities, and that any additional rules would raise costs on the industry with uncertain benefits.

The dispute between mortgage bankers and brokers is likely to gain prominence next week, when Rep. Barney Frank, D-Mass., the chairman of the House Financial Services Committee is expected to introduce legislation designed to limit abusive lending practices.

While a Frank spokeswoman declined to comment on the timing of the bill's introduction, it is widely expected to be introduced as soon as Monday. Frank plans a hearing on the issue next Wednesday.

Frank's bill is likely to have support in the House, but its future is unclear in the Senate, where Democrats have not banded together around one approach.

A bill similar to Frank's was introduced in May by Sen. Charles Schumer, D.-N.Y., but hasn't moved forward as Sen. Christopher Dodd., D-Conn., chairman of the Senate Banking Committee, has been developing his own legislation.

Mortgage brokers in particular have attracted scrutiny from politicians and consumer advocates, who say they unfairly steered borrowers toward loans with low introductory 'teaser' rates that skyrocket in payments after two to three years.

Democratic presidential front-runner Hillary Rodham Clinton in August called for 'an end to fly-by-night mortgage brokers peddling loans to unqualified applicants.'
While the Bush administration has generally urged a limited response to mortgage market turmoil, Treasury Secretary Henry Paulson this week signaled a willingness to consider stricter regulations for mortgage brokers.

'The development of a uniform national licensing, education, and monitoring system for all mortgage brokers is worth considering,' Paulson said in a speech Tuesday. 'It is no secret that, while not the norm, some fraudulent activity on behalf of mortgage brokers occurred.'
Everyone involved in the mortgage lending process, Paulson said, 'should be able to demonstrate a sound understanding of the products that they will be selling.'
Frank's bill would require state or federal licenses for loan officers and mortgage brokers, according to a draft outline circulated among industry officials and consumer advocates.

Mortgage brokers are happy with that outcome. Frank 'seems to be taking a balanced approached to the mortgage issues at hand today,' said Roy DeLoach, executive vice president of the National Association of Mortgage Brokers.

Erick Gustafson, vice president for government affairs at the Mortgage Bankers Association declined to comment on the drafts of Frank's proposals that have been circulating around Washington. But he said the mortgage bankers, which oppose any effort to require licensing for loan officers.

'The institutions themselves are already licensed,' Gustafson said. Banks, he said, 'are liable for the actions of the individuals that work for them...there's already a structure that exists for ensuring that loan officers are of good quality.'
Still, Howard Glaser, a former housing official in the Clinton administration and formerly the mortgage bankers' top lobbyist, doesn't buy that argument.

'This is the largest investment that most people make in their lifetimes,' Glaser said. 'Whether they're going to obtain a loan from a bank loan officer or an independent broker, the standards ought to be the same.'
Right now, he said, it's far too easy for scam artists to close up shop in one state and move to another.

The mortgage industry is a powerful force on Capitol Hill, and it remains to be seen whether the it will be able to defeat or alter legislation.

The mortgage bankers trade group includes giants like Bank of America Corp. (NYSE:BAC) , Countrywide Financial Corp. (NYSE:CFC) and Wells Fargo & Co. (NYSE:GWF) (NYSE:JWF) (NYSE:WSF) (NYSE:WPF) (NYSE:WFC) as well as several thousand smaller lenders. It spent $1.5 million in lobbying in the first half of this year, after spending more than $2.7 million last year, according to forms filed with the Senate's public records office.

While tightened licensing standards for brokers and loan officers are a good idea, prohibiting incentive payments that reward mortgage brokers and banks for steering customers to more expensive loans, said Michael Calhoun, president of the Durham N.C.-based Center for Responsible Lending.

Under the current system, Calhoun said, brokers have been paid more for high-rate loans 'and they weren't on the line if the loan went bad...Not bad work if you can get it.'

TODAYS RATES - 10/19/07
	Loan-to-Value (LTV)
Credit Score	100%	95%	90%	80%
720+	*6.75%	6.375%	6.375%	6.375%
680 - 719	*6.75%	6.375%	6.375%	6.375%
660 - 679	*6.75%	6.375%	6.375%	6.3750%
640 - 659	n/a	6.50%	6.50%	6.50%
620 - 639	n/a	6.50%	6.50%	6.50%
600 - 619	n/a	**10.67%	**9.40%	**9.11%
580 - 599	n/a	n/a	**9.84%	**9.49%
550 - 579	n/a	n/a	n/a	**9.55%
501 - 549	n/a	n/a	n/a	n/a

*FLEX 100 PROGRAM

** Loan contains 3 yr pre-payment penalty

All Rates assume financing for a single family/condo,

primary residence, full documentation, 30 yr fixed. For other property,

occupancy, documentation and loan types, please call for pricing.

Rates subject to change

****COMMUNITY LENDING SPECIAL ****

7.00% - 100% Financing, single family/condo, primary residence

w/ 600+ credit score. Rate is for approval thru community lending program.

Applicant income cannot exceed $80,200 for Hartford County or property

must be located in low-to-moderate income census tract.

Rates subject to change

6.25% - 97% Financing, single family/condo, primary residence

Rates subject to change

Do not hesitate to call regarding any scenarios or questions. I'm always here to help!

The Market Round Up - 10/16/07

Horizon Home Mortgage — Tue, 16 Oct 2007 10:24:17 -0500

Good Morning,

As we continue to witness the changes in the market and legislation being passed and proposed by Congress, it seems that maybe this whole "credit crunch" thing WAS bigger than the government and other naysayers predicted. Even with the rate cuts and agency guideline changes it will be later than sooner before we see a drastic change in the market place.

The frustrating part is, much of this could have been avoided if these and other suggested actions were taken at the onset of this crisis. The following article depicts the timeline of the events we have all being experiencing. While no one has a crystal ball I thing it's safe to say the writing was on the wall...it's just the powers that be choose to ignor it. As with many issues facing our nation, I guess late action is better than no action.

Conforming rates for 100% remain constant while the lower LTVs decreased by 0.125%. Sub-prime rates remained constant as well. Remember, many programs are no longer available, so make sure your client's are properly qualified as they continue their house hunt.

Timeline of Gov't Credit Crunch Response
Associated Press 10.15.07, 8:03 PM ET

Wall Street and Main Street alike have been caught up in this year's credit market turmoil, which began with rising defaults on mortgages made to financially shaky borrowers and spread to corporate bonds and other kinds of debt.

Following is a timeline of actions and statements from key players in Washington related to the credit crunch:

May 17: Federal Reserve Chairman Ben Bernanke says growing number of mortgage defaults will not seriously harm the U.S. economy.

June 29: Banking regulators complete new guidelines calling on lenders to strictly evaluate borrowers' ability to repay home loans.

Aug. 7: Fed leaves key federal funds rate unchanged, says credit problems and housing slump pose increasing risks to U.S. economy.

Aug. 9: Fed pumps $24 billion into U.S. banking system through large purchases of securities, while European Central Bank makes record cash injection of $130 billion into its markets to shake off credit fears. Wall Street suffers its second-worst decline of the year as Dow Jones industrials drop by nearly 400 points.

Aug. 10: Fed pumps another $38 billion in temporary reserves into the U.S. financial system; government rejects request for mortgage finance giants Fannie Mae and Freddie Mac to take on more debt.

Aug. 17: Fed tries to stabilize financial markets by approving 0.5 percentage point cut in its discount rate on direct loans to banks.

Aug. 31: President Bush announces plan to use Federal Housing Administration, which insures loans for low-income borrowers, to offer government-guaranteed loans to around 80,000 homeowners in default.

Sept. 18: Fed cuts key federal funds rate by a half point to 4.75 percent.

Sept. 19: Government raises debt portfolio limits for Fannie and Freddie by more than 2 percent annually.

Sept. 20: Bush acknowledges "some unsettling times" in the housing and credit markets, while Treasury Secretary Henry Paulson signals the administration would consider allowing Fannie and Freddie to temporarily buy loans bigger than the current cap of $417,000.

Oct. 4: House approves tax break for homeowners who have mortgage debt forgiven as part of a foreclosure or loan renegotiation.

Oct. 10: Paulson announces a new mortgage industry coalition aimed at helping homeowners avoid foreclosure.

Oct. 11: House and Senate Democrats reach a compromise on legislation permitting Fannie and Freddie to increase mortgage holdings by 10 percent from current limit; Bush administration rejects that idea.

Oct. 15: Three largest banks - Citigroup Inc., Bank of America Corp., JPMorgan Chase & Co. - announce a plan organized by Treasury Department to buy securities hurt during the summer's mortgage turmoil.

TODAYS RATES - 10/16/07
	Loan-to-Value (LTV)
Credit Score	100%	95%	90%	80%
720+	*6.875%	6.375%	6.375%	6.375%
680 - 719	*6.785%	6.375%	6.375%	6.375%
660 - 679	*6.875%	6.375%	6.375%	6.3750%
640 - 659	n/a	6.625%	6.625%	6.625%
620 - 639	n/a	6.625%	6.625%	6.625%
600 - 619	n/a	**10.67%	**9.40%	**9.11%
580 - 599	n/a	n/a	**9.84%	**9.49%
550 - 579	n/a	n/a	n/a	**9.55%
501 - 549	n/a	n/a	n/a	n/a

*FLEX 100 PROGRAM

** Loan contains 3 yr pre-payment penalty

All Rates assume financing for a single family/condo,

primary residence, full documentation, 30 yr fixed. For other property,

occupancy, documentation and loan types, please call for pricing.

Rates subject to change

****COMMUNITY LENDING SPECIAL ****

7.00% - 100% Financing, single family/condo, primary residence

w/ 600+ credit score. Rate is for approval thru community lending program.

Applicant income cannot exceed $80,200 for Hartford County or property

must be located in low-to-moderate income census tract.

Rates subject to change

6.375% - 97% Financing, single family/condo, primary residence

Rates subject to change

Do not hesitate to call regarding any scenarios or questions. I'm always here to help!

The Market Round Up - 10/12/07

Horizon Home Mortgage — Fri, 12 Oct 2007 10:55:14 -0500

Good Morning,

"How low can you go". As sub-prime backed mortgage securities continue to do the limbo, other positive developments have risen in the market. After many investors turned their backs on No Income Verification loans (also know as Stated Income loans), some lenders are beginning to embrace this red-headed step child again.

In the past week, we have received notice that four of our contracted lenders have re-instated their Stated Income Programs up to 95% LTV (loan-to-value) for primary residence and 90% for investment. While it may seem that investors are touching the stove again, the program guidelines are more restrictive than those in the past such as higher reserve requirements and stiff mortgage insurance premiums.

None the less, it is a viable option for your self-employed clients who can't document their income. Please call for details and program guidelines.

Conforming rates for 100% increased by 0.125% and the lower LTVs remain constant. Sub-prime rates remained constant. Remember, many programs are no longer available, so make sure your client's are properly qualified as they continue their house hunt. Have a great weekend!!!

Moody's Cuts Ratings On $33.4 Bln Of Subprime Mortgage Bonds
DOW JONES NEWSWIRES
October 11, 2007 4:55 p.m.

By Aparajita Saha-Bubna Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)--Moody's Investors Service cut Thursday the credit ratings on $33.4 billion of securities backed by pools of risky home loans to borrowers with weak credit.

The mortgage bonds - backed by subprime first-lien loans, that is, those that have the first dibs on the collateral in case of default - were issued in 2006, a year characterized by loose lending standards. These bonds make up 7.8% of the dollar volume of such securities rated by Moody's.

Of the $33.4 billion, $3.8 billion - or about 11% of the mortgage bonds - are being reviewed for further downgrades, Moody's said in a press release.

The ratings actions "reflect the steady deterioration in the performance of loans originated during 2006, and significant differences in loan performance by originator," said Moody's in the release.

In addition, $23.8 billion of mortgage bonds backed by first-lien home loans - making up 5.6% of such subprime securities rated by Moody's - are also being reviewed for a possible downgrade.

These include 48 triple-A - the highest of 10 investment-grade rankings - and 529 double-A-rated mortgage bonds.

The move by Moody's assumes that "the severity of loss associated with loans that are now seriously delinquent will be 40%-50% on average," according to the release.

It also assumes, based on a recent Moody's survey of subprime loan servicers, that "significant loan modifications that might mitigate future losses are not likely to occur in the near term."

Also Thursday, Moody's affirmed the ratings on $258.6 billion of triple-A-rated and $21.3 billion of double-A rated mortgage bonds, which make up 74.7% and 52%, respectively, of the universe of such securities rated in 2006.

TODAYS RATES - 10/12/07
	Loan-to-Value (LTV)
Credit Score	100%	95%	90%	80%
720+	*6.875%	6.50%	6.50%	6.50%
680 - 719	*6.785%	6.50%	6.50%	6.50%
660 - 679	*6.875%	6.50%	6.50%	6.50%
640 - 659	n/a	6.625%	6.625%	6.625%
620 - 639	n/a	6.625%	6.625%	6.625%
600 - 619	n/a	**10.67%	**9.40%	**9.11%
580 - 599	n/a	n/a	**9.84%	**9.49%
550 - 579	n/a	n/a	n/a	**9.55%
501 - 549	n/a	n/a	n/a	n/a

*FLEX 100 PROGRAM

** Loan contains 3 yr pre-payment penalty

All Rates assume financing for a single family/condo,

primary residence, full documentation, 30 yr fixed. For other property,

occupancy, documentation and loan types, please call for pricing.

Rates subject to change

****COMMUNITY LENDING SPECIAL ****

7.00% - 100% Financing, single family/condo, primary residence

w/ 600+ credit score. Rate is for approval thru community lending program.

Applicant income cannot exceed $80,200 for Hartford County or property

must be located in low-to-moderate income census tract.

Rates subject to change

6.375% - 97% Financing, single family/condo, primary residence

Rates subject to change

Do not hesitate to call regarding any scenarios or questions. I'm always here to help!

The Market Round Up - 10/05/07

Horizon Home Mortgage — Fri, 05 Oct 2007 08:47:56 -0500

Good Morning,

In a large majority vote yesterday, Congress approved a bill that would revise the bankruptcy code to help homeowners facing default and foreclosure. The bill is projected to save more than $650 million in repossessed homes, but just how much is that anyway?

It may sound like alot, but when you consider the median home value of $223,800 (2007 NAR Quarterly Report) that equates to about 2,900 homeowners. With with more than 430,000 foreclosures filied in the first quater of 2007 (Realty Trac), not including those currently in default, that barely scrapes the tip of the iceberg.

It seems as with most of the issues facing our nation, the current administration likes to "appear" they are working hard for the American people, but if you look a little deeper...its all smoke and mirrors.

Conforming rates for 100% and the lower LTVs decreased by 0.125%. Sub-prime rates increased by 0.05%. Remember, many programs are no longer available, so make sure your client's are properly qualified as they continue their house hunt. Have a great extended weekend!!!

House approves bill to help homeowners

By Marcy Gordon, Posted on Fri, Oct 5, 2007

Associated Press

WASHINGTON - Financial relief for homeowners facing foreclosure or in bankruptcy advanced in the House yesterday as lawmakers approved legislation to help financially strapped homeowners by a 386-27 vote.

The bill would revise the bankruptcy code to help homeowners facing default and foreclosure, but that would bite into already hard-hit profits at mortgage lenders.

The House also approved a separate measure to cut taxes of some strapped homeowners by $650 million while eliminating a tax break that had been available on the sale of second homes.

The tax break would be available to homeowners who have mortgage debt forgiven as part of a foreclosure or a reworking of a loan. The value of that forgiveness, which is now taxable as income, would become tax-exempt.

Legislation similar to both bills is pending in the Senate.

The mortgage legislation would allow judges to order mortgage lenders to ease terms for homeowners in bankruptcy proceedings. Currently, mortgage lenders can foreclose against a homeowner in default 90 days after the filing of bankruptcy.

Mortgage lenders will be "terrified" of getting wrapped up in bankruptcy proceedings, said Brian Gardner, a research analyst with investment firm Keefe, Bruyette & Woods Inc.

The House vote was the latest congressional reaction to a mortgage crisis touched off this spring by a blowup in high-priced home loans for risky borrowers, which has thrown a pall over the economy. An estimated 2 million to 2.5 million adjustable-rate mortgages - worth about $600 billion - will jump from low initial "teaser" rates to higher rates this year and next. Steep prepayment penalties have made it difficult for some to get out of their mortgages, and some overstretched homeowners cannot afford to refinance or sell their homes.

Foreclosures are at record highs, and late payments are spiking. Lenders have been forced out of business, and investors have taken huge financial hits.

The House last month passed legislation to expand backing of mortgages by the Federal Housing Administration, which now insures about 3.7 million loans in the event of default, with a view to helping struggling homeowners avoid foreclosure.

To help offset the $650 million in tax revenue, the legislation also makes it harder to get breaks on capital gains taxes for the sale of second homes.

TODAYS RATES - 10/05/07
	Loan-to-Value (LTV)
Credit Score	100%	95%	90%	80%
720+	*6.875%	6.375%	6.375%	6.375%
680 - 719	*6.785%	6.375%	6.375	6.375%
660 - 679	*6.875%	6.375%	6.375%	6.375%
640 - 659	**10.70%	6.625%	6.625%	6.625%
620 - 639	**10.70%	6.625%	6.625%	6.625%
600 - 619	n/a	**10.67%	**9.48%	**9.19%
580 - 599	n/a	n/a	**9.90%	**9.50%
550 - 579	n/a	n/a	n/a	**9.50%
501 - 549	n/a	n/a	n/a	n/a

*FLEX 100 PROGRAM

** Loan contains 3 yr pre-payment penalty

All Rates assume financing for a single family/condo,

primary residence, full documentation, 30 yr fixed. For other property,

occupancy, documentation and loan types, please call for pricing.

Rates subject to change

****COMMUNITY LENDING SPECIAL ****

7.00% - 100% Financing, single family/condo, primary residence

w/ 600+ credit score. Rate is for approval thru community lending program.

Applicant income cannot exceed $80,200 for Hartford County or property

must be located in low-to-moderate income census tract.

Rates subject to change

6.25% - 97% Financing, single family/condo, primary residence

Rates subject to change

Do not hesitate to call regarding any scenarios or questions. I'm always here to help!

The Market Round Up - 10/01/07

Horizon Home Mortgage — Mon, 01 Oct 2007 09:57:40 -0500

Good Morning,

While talks of revised legislation, new goverment programs and relaxed agency guidelines provide a sense of security, it is evident that we have a long way to go before normalcy returns to the marketplace. In addition to the "credit crunch", over-saturation of inventory has exacerbated the problem. Add in the number of overwhelmed homeowners clamoring to sell their homes as a result of climbing ajustable rate mortgages, and you have one fine mess that's going to take some time to clean up.

Conforming rates for 100% and the lower LTVs remain constant. Sub-prime rates remain constant as well. Remember, many programs are no longer available, so make sure your client's are properly qualified as they continue their house hunt.

Greenspan: Falling House Prices Will Slow US Growth

By Paul Hannon, Dow Jones Newswires, 10-1-07 6:40 AM EDT

LONDON -(Dow Jones)- Declining U.S. house prices will slow U.S. consumer spending and economic growth with consequences for the global economy, former U.S. Federal Reserve Chairman Alan Greenspan said Monday. In a speech to bankers, Greenspan also said "normality" had yet to return to global financial markets in the wake of the credit crunch that began in early August.

Greenspan said there was little that policymakers could have done to "diffuse" the market euphoria that led to the credit crunch. He said U.S. house prices will fall until stocks of unoccupied homes are reduced to more normal levels, adding that the current inventory overhang is twice normal levels. "I expect home price declines to continue until the rate of inventory liquidation reaches its peak," he said.

He added that the reduction in the inventory of unsold homes may take some time. "The process of inventory adjustment has just started, we have a long way to go before mortgage markets stabilize in the U.S.," he said. Greenspan said declining house prices will have an impact on household wealth and lead to a slowdown in consumer spending unless there is a sharp rise in equity markets. "The recent decline in house prices is already eating into home equity and consumer spending and gross domestic product will be under pressures from household wealth," he said.

Greenspan said there was little direct evidence that demand for homes financed by non subprime mortgages had been affected by the crisis in the subprime sector. "The bulk of the market .. has at least until recently held up," he said. Many economists believe the global economy is less sensitive to developments in the U.S. than in the past, with China, India and other Asian nations growing strongly.

Greenspan said he is "suspicious that this notion is premature". "A weakened U.S. economy still has the capacity to impact on its trading partners," he said. Greenspan said that an underpricing of risk was at the heart of the recent turmoil in global financial markets, but added that there was little that could be done to better manage the period of euphoria that was the product of, "innate human nature". "Efforts to divert its course serve only to exacerbate the size of its ultimate collapse," he said.

Greenspan said the underpricing of risk had its origins in changes to the world economy following the collapse of communism in 1989 and the entry of large numbers of workers from China and elsewhere into the global market economy. "Their savings propensity swamped financial markets," Greenspan said. "Long- term interest rates fell dramatically across the globe." The "massive increase in liquidity" caused by high levels of savings in developing economies led investment banks, private-equity investors and pension funds to acquire "lesser quality assets," Greenspan said.

Among those assets were securitizations of subprime U.S. mortgage loans. Indeed, Greenspan said the subprime market would have been considerably smaller, and defaults much lower if the demand for securitizations hadn't been so great. When losses did occur, and were incurred by investors outside the U.S., "a blanket of uncertainty engulfed the financial community" that ultimately caused banks to stop lending to each other in early August, Greenspan said.

"The developed world financial system was in crisis," he said. Greenspan said there have been some signs of normalization in recent weeks, with interbank interest rates in a variety of currencies having fallen back from their August peaks. "The credit crisis may possibly be about to be over," he said. "Normality is still not in reach."

While defaults in the U.S. subprime mortgage market were the trigger for the August credit crunch, Greenspan said given the underpricing of risk that had reached "levels that were barely conceivable" it was likely that "an abrupt upheaval was waiting to happen" even without those problems.

Greenspan said it may be unwise to look to new regulations to prevent a recurrence of the August credit crunch.

"Regulation is...counterproductive," he said. "I know of no economic system that can convert irrational exuberance or irrational fear into a stable economy."

TODAYS RATES - 10/01/07
	Loan-to-Value (LTV)
Credit Score	100%	95%	90%	80%
720+	*7.000%	6.50%	6.50%	6.50%
680 - 719	*7.000%	6.50%	6.50%	6.50%
660 - 679	*7.000%	6.50%	6.50%	6.50%
640 - 659	**10.650%	6.75%	6.75%	6.75%
620 - 639	**10.650%	6.75%	6.75%	6.75%
600 - 619	n/a	**10.620%	**9.430%	**9.140%
580 - 599	n/a	n/a	**9.85%	**9.450%
550 - 579	n/a	n/a	n/a	**9.65%
501 - 549	n/a	n/a	n/a	n/a

*FLEX 100 PROGRAM

** Loan contains 3 yr pre-payment penalty

All Rates assume financing for a single family/condo,

primary residence, full documentation, 30 yr fixed. For other property,

occupancy, documentation and loan types, please call for pricing.

Rates subject to change

****COMMUNITY LENDING SPECIAL ****

7.25% - 100% Financing, single family/condo, primary residence

w/ 600+ credit score. Rate is for approval thru community lending program.

Applicant income cannot exceed $80,200 for Hartford County or property

must be located in low-to-moderate income census tract.

Rates subject to change

6.375% - 97% Financing, single family/condo, primary residence

Rates subject to change

Do not hesitate to call regarding any scenarios or questions. I'm always here to help!

The Market Round Up - 9/27/07

Horizon Home Mortgage — Thu, 27 Sep 2007 10:15:03 -0500

Good Morning,

While homes continue to lie dormant on the market, many investors and homeowners are looking for ways to avoid foreclosure. With property values topped and dropping in some areas, as well as tighten mortgage guidelines, many people are turning to renting out their homes in order to make the payments.

The Section 8 Housing Program provides security by providing a portion of the tenants payment, thus guaranteeing the funds needed to support the mortgage. As this alternative becomes more widely used, it could reduce the amount of inventory for sale on the market. While this alternate might not work for all, it is a great alternative to giving away equity to the bank or a potential buyer looking to capitalize on one's misfortune. As an active investor and landlord of current Section 8 tenants, I give it a thumbs up!

Conforming rates for 100% and the lower LTVs remain constant. Sub-prime rates increased by 0.05%. Remember, many programs are no longer available, so make sure your client's are properly qualified as they continue their house hunt. Have a great weekend!!!

City seeks to avoid Section 8 explosion

This story appeared in the Antelope Valley Press on Wednesday, September 26, 2007.

By BOB WILSON
Valley Press Staff Writer

PALMDALE - With numerous homeowners facing mortgage problems because of subprime lending practices, the City Council has asked the city's legal staff to seek ways to prevent an explosion of Section 8 housing rentals. "I know the Section 8 housing in the Antelope Valley has become a very serious concern among residents," said Councilman Tom Lackey, who submitted the matter for council discussion last week.

Because the federal Section 8 program guarantees monthly rent checks for landlords, some people may turn to that program to salvage their property investments, Mayor Jim Ledford said. "In areas of fast (population) growth like ours, we are going to see more and more of that, especially in an economy that's on the downturn," Ledford said. "People are going to be looking for (Section 8) as an option to keep that home occupied and make that debt-service payment," he said. "I would like us, as a council, to discuss what we can do as a city to possibly make sure this doesn't swarm our Valley like it did once before" during the nationwide recession of the 1990s, Lackey said.

A lack of oversight in the Section 8 program has helped degrade communities and neighborhoods across the nation, Ledford said. As a result, Palmdale and Lancaster have been forced to spend their own money to have Los Angeles County - the regional Section 8 oversight agency - hire the local inspectors needed to keep program properties in compliance, the mayor said.

Section 8 "is not our program, yet we are being forced to use our residents' tax dollars to enforce the rules and regulations that the county, state and federal government should be enforcing," Councilman Steve Hofbauer said. "What I would like to know is: Is there a way we can recoup our (cost) from the irresponsible government agencies that aren't dealing with it?" Hofbauer asked.

Ledford suggested putting that question at the top of a list for city legal staff to investigate. That question should be joined by another on whether contracts that are supposed to preclude buyers from immediately renting out newly constructed tract homes can be enforced, Ledford added. "I'm seeing ... these Section 8 vouchers being applied to brand new houses, and to me, that's totally out of line," the mayor said.

The builders decide whether to include such clauses in their sales contracts, said Judy Skousen, Palmdale's assistant city attorney. Not all participants in the Section 8 program allow their homes to deteriorate, Hofbauer noted. "But there are a number of bad actors out there who are giving the whole program a black eye and costing this community a lot of money," he said.

According to council documents, a city staff report, of the approximately 41,000 housing units in the city, some 12,000 are rental properties, and of those, 1,057 are Section 8 rentals. The documents also noted there were 1,930 Section 8 rentals in Lancaster, where there are about 41,400 housing units. During the past three years, the number of problems reported about Section 8 rentals has decreased because of stepped-up enforcement, City Manager Steve Williams said.

At the same time, "the number of enforcement actions because of violations has increased," Williams said. Palmdale's rental problems do not end with Section 8, Ledford said, noting that the other 11,000 rental homes in the city are subject to no regular supervision.

So far, about 5,000 rentals in Palmdale have been registered by their owners for city-mandated rental inspections, said Shane Walter, the city's director of building and safety. During the first nine months of the city's inspection program, about 2,000 of those rentals have been inspected, and problem-free certificates have been issued to about 400, Walter said.

Most of the remaining 1,600 have only minor problems that need to be corrected, but the corrections must be made before a certificate is issued, he said. "These are the people who came out and wanted to be registered" and have their properties inspected, Walter noted.

At the city's inspection program matures, rental-property owners who dodge inspection will be given municipal citations, he said. "What I hoped to do in bringing this agenda item forward was to begin the discussion," Lackey said. "My concern is, with the economic challenges that lie ahead, the vulnerability is greater than it has been in the past, and I want to make sure that, as a city, we give it proper attention and discuss it and try to draw some ideas from the community as to what we might, and then balance that with the legal considerations," he said.

TODAYS RATES - 9/27/07
	Loan-to-Value (LTV)
Credit Score	100%	95%	90%	80%
720+	*7.000%	6.50%	6.50%	6.50%
680 - 719	*7.000%	6.50%	6.50%	6.50%
660 - 679	*7.000%	6.50%	6.50%	6.50%
640 - 659	**10.70%	6.75%	6.75%	6.75%
620 - 639	**10.70%	6.75%	6.75%	6.75%
600 - 619	n/a	**10.67%	**9.48%	**9.19%
580 - 599	n/a	n/a	**9.90%	**9.50%
550 - 579	n/a	n/a	n/a	**9.70%
501 - 549	n/a	n/a	n/a	n/a

*FLEX 100 PROGRAM

** Loan contains 3 yr pre-payment penalty

All Rates assume financing for a single family/condo,

primary residence, full documentation, 30 yr fixed. For other property,

occupancy, documentation and loan types, please call for pricing.

Rates subject to change

****COMMUNITY LENDING SPECIAL ****

7.25% - 100% Financing, single family/condo, primary residence

w/ 600+ credit score. Rate is for approval thru community lending program.

Applicant income cannot exceed $80,200 for Hartford County or property

must be located in low-to-moderate income census tract.

Rates subject to change

6.375% - 97% Financing, single family/condo, primary residence

Rates subject to change

Do not hesitate to call regarding any scenarios or questions. I'm always here to help!

The Market Round Up - 9/24/07

Horizon Home Mortgage — Mon, 24 Sep 2007 09:53:00 -0500

Good Morning,

As talks continue on Capitol Hill, it seems the FHA will play a major role in restoring normalcy to the housing market. With rising loan limits and less restrictive guidelines, FHA is projected to help tens of thousands of homebuyers to get of the sidelines and back in the game.

As well, with the new FHASecure program current homeowners have a life-line for those who are drowning in the sea of adjustable rate mortgages. For more information on FHASecure, please visit our website under the "News" tab.

Conforming rates for 100% remain constant while rates for the lower LTVs increased by 0.125%. Sub-prime rates remain constant. Remember, many programs are no longer available, so make sure your client's are properly qualified as they continue their house hunt.

FHA Home Loan Program Poised to Take Off -- Big-Time
by Kenneth R. Harney

FHA-insured home mortgages -- marginalized or squeezed out of the market during the subprime loan boom years -- are poised to roar back. And if Congress passes a compromise version of FHA reform legislation, maximum loan limits for FHA could rise immediately to $417,000 -- or even a lot higher.

Last Tuesday the House overwhelmingly approved a reform bill that would cut minimum downpayments to zero, and increase loan limits in high cost areas of California well beyond $500,000. Under the House-passed bill, FHA could insure mortgages as high as 125 percent of the median home price in a market area, or 175 percent of the conforming loan limit for Fannie Mae and Freddie Mac -- currently $417,000. In addition, the HUD Secretary could raise limits by another $100,000 if local conditions required such a move.

In effect, southern California, where FHA loan applications have been almost nonexistent in recent years, could conceivably see a new wave of jumbo FHA mortgages in the $700,000 range and beyond.

Meanwhile, the Senate Banking committee last Wednesday reported out its version of an FHA reform bill, but with much tighter loan limits--$417,000 maximum-and a 1.5 percent minimum cash downpayment, down from the current 3 percent minimum. The full Senate is expected to approve the Banking committee's bill soon, sending the FHA issue to a House-Senate conference committee to work out the differences.

What's likely to emerge in the final bill sent to the president in the coming weeks? At the very minimum, Congress is now almost certain to make FHA competitive again in high-cost markets. A $417,000 limit for California would still be well below the state's median home price in the mid-$500,000s. But it would provide potentially tens of thousands of home buyers an attractive, consumer-friendly alternative to what they've got now.

The huge gap between the House and Senate loan ceilings will need to be bridged in the upcoming conference. There may also be pressure to raise Fannie's and Freddie's limits during Senate floor debate or through a separate bill -- opening the door to at least a temporary "jumbo" program for FHA, Fannie and Freddie.

There are some potential minefields facing conferees however: The House version of the bill contains a proposal from Financial Services committee chairman Barney Frank (D-Mass.) to tap into FHA premium revenues to help finance a new National Housing Trust Fund for affordable housing activities. Separate legislation from chairman Frank would also tap into revenues of Fannie and Freddie. The Bush administration opposes siphoning off FHA resources for the Fund, and the Senate did not include the concept in its bill.

Another sticky issue: The Senate bill prohibits "downpayment assistance" for FHA loans involving "anyone party to the transaction." That would presumably cut off dozens of nonprofit groups around the country that now provide such assistance. The House bill imposes some restrictions on downpayment assistance providers, but does not ban them.

The House bill authorizes FHA loan terms up to 40 years, but the Senate bill is silent on that issue. The Senate bill allows FHA to use "risk based pricing" on all loans where borrowers make less than a 3 percent downpayment -- a provision favored by the Bush Administration. The Senate bill has no language on the subject, but some Republicans are strongly opposed to allowing FHA to directly compete with private mortgage insurance firms for borrowers who present varying levels of default risk.

Published: September 24, 2007

TODAYS RATES - 9/24/07
	Loan-to-Value (LTV)
Credit Score	100%	95%	90%	80%
720+	*7.000%	6.50%	6.50%	6.50%
680 - 719	*7.000%	6.50%	6.50%	6.50%
660 - 679	*7.000%	6.50%	6.50%	6.50%
640 - 659	**10.650%	6.75%	6.75%	6.75%
620 - 639	**10.650%	6.75%	6.75%	6.75%
600 - 619	n/a	**10.620%	**9.430%	**9.140%
580 - 599	n/a	n/a	**9.85%	**9.450%
550 - 579	n/a	n/a	n/a	**9.65%
501 - 549	n/a	n/a	n/a	n/a

*FLEX 100 PROGRAM

** Loan contains 3 yr pre-payment penalty

All Rates assume financing for a single family/condo,

primary residence, full documentation, 30 yr fixed. For other property,

occupancy, documentation and loan types, please call for pricing.

Rates subject to change

****COMMUNITY LENDING SPECIAL ****

7.25% - 100% Financing, single family/condo, primary residence

w/ 600+ credit score. Rate is for approval thru community lending program.

Applicant income cannot exceed $80,200 for Hartford County or property

must be located in low-to-moderate income census tract.

Rates subject to change

6.25% - 97% Financing, single family/condo, primary residence

Rates subject to change

Do not hesitate to call regarding any scenarios or questions. I'm always here to help!