Responsible Mortgage Lender in Virginia, Your source for Refinancing or purchasing a home.

As the employment market heats up, a rate cut diminishes

Michael Mapes-Suntrust Mortgage (Sun Trust Mortgage) — Thu, 06 Dec 2007 13:31:46 -0600

The Federal Reserve will have a lot to ponder in face of a healthy labor market.

By Michael Mapes, The Responsible Mortgage Lender

As the Federal Reserve is set to meet next week to discuss key interest rates, they will no doubt focus in on the current state of the labor markets. As one analyst stated that as long as people have jobs and are spending money the Federal Reserve has no reason to cut rates. However, others in the financial sector believe that no matter what the labor report shows tomorrow the Federal Reserve is going to cut at least .25 bps or could shock the market and cut as much as .50 bps. What ever happens housing continues to suffer and borrowers are still finding access to credit harder than in previous years.

The employment numbers to be released tomorrow are considered to be a lagging indicater. This means that the unemployment rate will increase and job growth decline as the economy begins to slow down. In turn consumers worried about the propects of lower paychecks hold on to their money instead of spending it on goods and services. All signs in the economy point towards a recession except for the labor markets. As long as the people are still employed expect the economy to stay out of a recession. The Feds action next week will set the stage for the first quarter of 08.

Michael Mapes can be reached at 757.599.1810 or by email at michael.mapes@suntrust.com

Appraisals are as good as a home inspection

Michael Mapes-Suntrust Mortgage (Sun Trust Mortgage) — Tue, 20 Nov 2007 19:44:51 -0600

Appraisals are just as important as a home inspection.

By Michael Mapes, The Responsible Mortgage Lender

Congress recently took up action to place a bar between lenders and appraisers. The rationale to this proposal was that on too many occasions mortgage brokers where applying pressure to appraisers to inflate the value so the deal would work. However as the recent foreclosure rate continues to rise. Fraud during the mortgage application process seems to becoming a re-occurring theme. In many cases across the country regulators are finding appraised values on properties that were for more than the house was actually worth at the time of sale.

In the past a lender would send an appraisal request to an appraiser because he was fast and fair and would work to resolve any issues quickly. Appraisers are human and do make mistakes. Lenders rely on the work of the appraiser to package and sell loans, which the appraisal serves as the underlying valuation of the collateral. When the value of a home is over inflated it hurts everyone involved including the borrower and even someone who buys the house next door.

In many cases across the country as home owners are defaulting on their loans, those who wish to refinance their existing loan are finding that the foreclosures are hurting the value of their own home. Sellers who are trying to sell their homes are also finding stiff competition with foreclosure sales at much lower prices for the same square footage and features.

An appraiser is typically not the friend of the listing agent or the home seller. After all the appraisers role is to not only look after the lender but in reality a good appraiser can save a borrower from making a poor investment, over spending on an investment or alert a home owner that your home is not actually worth what they thought. An appraiser can end up saving a consumer and lender hundreds of thousands of dollars.

Many homeowners who are currently refinancing their home have come to learn this valuable lessen. However, there are options but avoiding the realities should not be one of them.

Michael Mapes can be reached for comment at 757.599.1810 ext 225 or on the web at http://www.theresponsiblemortgagelender.com/

Yesterday I was approved.........Today I am declined

Michael Mapes-Suntrust Mortgage (Sun Trust Mortgage) — Tue, 20 Nov 2007 19:07:58 -0600

Yesterday I was approved............Today I am declined

By Michael Mapes, The Responsible Mortgage Lender

If the mortgage lending business was a car then quite frankly ever lender would be in court explaining the speed at which changes have occurred. Once borrowers lined up at the lenders door wanting ever kind of loan and loan product the lender had to offer. Cash out refinance, no problem, 100% -104% financing no problem, marginal credit no problem, little cash in the bank, no problem. Fact is lenders found ever which way to provide loans to people who wanted them.

Alas, Then the Bubble Burst

In November of 2006 the music to the dance started to skip a beat. These loans lenders had been serving up began to default and investors who had provided the capital woke up as the party was ending. As their heads started to clear they began to realize that the loans that they thought were good investments turned out to be rotten apples. Trying to manage the debt obligations and figure out where to go from here led them to tighten the purse strings or just stop buying mortgage securities all together. As lender after lender began to go bankrupt and CEO after CEO began to lose their jobs it has become apparent that it is too little too late.

But my loan was approved yesterday.

As the song goes "yesterday, life had such meaning and now I long for yesterday". Both lenders and borrowers are singing the same tune. Program guidelines have gone through such rapid changes that today, with only a hand full of new products available consumers who were once approved are now finding the doors to capital to finance a home closed. As capital markets have no appetite left for sub prime loans or Alt A loans, those borrowers who can not document their income or have poor credit histories are now on the outside looking in. For many what once was a dream has now turned into a nightmare and lenders who once invested in communities are now trying to just stay afloat.

Analysis suggest that the worse might not be over, However, at interest rates around 6 percent or less in some cases opportunity is still there and while it is true quite a few home buyers can no longer qualify for the house they want. But with hard work you will get there just not 0 to 60 in 5 seconds flat.

As a wise person said to me recently, this situation too will pass.

Michael Mapes can be reached for comment at 757.599.1810 ext 225 or on the web at www.theresponsiblemortgagelender.com

Are Mortgage Brokers a good place to find a loan

Michael Mapes-Suntrust Mortgage (Sun Trust Mortgage) — Wed, 07 Nov 2007 09:25:14 -0600

Are mortgage brokers a good place to find a loan

By Michael Mapes, The Responsible Mortgage Lender

A few years ago I went out for dinner only to find a gentleman standing at the bar having a drink. He appeared to be in an extremely good mood. So being the ever inquisitive person that I am I had to ask him why he was so happy? He told me that he was a mortgage broker and had just closed a loan that paid him $5,000.00. Now this gentleman did not know that I am a Mortgage Banker but I thought to myself that this seemed like a lot of money to make on one loan, must have been a big loan. So I asked him about the loan and he said that the loan was for 140,000.00 and that he charged the borrower 3 points on the front end and 2 on the back end, the borrower ended up with an 8.5% interest rate. He really was quite proud of himself for this feat that he had just completed. As my mouth took over where my brain left off, I explained to him that how is it that he expects to get referrals from this guy when he just ripped the guy off and how long is it going to take for the customer to realize he got duped? Well he did not seem to care and today some 4 years later he is no longer in the mortgage business, thank goodness.

When a consumer walks into a Mortgage Brokers office or a Bank there are some expectations that go along with this. The first is that the person across the table knows what they are doing and can explain the ramifications of the loan they are selling. The truth of the matter is that most Mortgage Brokers have no real skill other than being a sales man or a pitch man. That is not to say that there are not very good and very honest mortgage brokers out there, there are. But by and large most mortgage brokers have no formal education in financing, No training in the Rules and Regulations regarding home financing and most are more concerned with how to fleece you then actually help you. Unfortunately the ones that are decent and very good get painted with the same brush as the bad ones.

Mortgage Brokers typically tell you that they work with several lenders in order to get you the best rate. While this sounds good and noble it is far from the truth. Brokers shop lenders in order to get a better price for themselves and pass the higher price onto the consumer so that they (The Broker) can make a bigger premium spread. As well as Brokers can not perform the actions of processing or underwriting or closing of a loan. This means that the broker must pay for these services as part of the loan transaction. Therefore as a consumer you are charged sometime thousands of dollars extra in fees for services that a Mortgage Banker provides for free and at a much lower cost of borrowing to you.

Is a Mortgage Broker right for you, yes in fact it could be. They do fill a void that banking institutions can not. However, as a consumer compare real lenders to actual brokers. Real competition between like kind businesses is a good for the consumer and it is good for the market place. Competition makes us sharper, more knowledgeable and holds prices down. This is good for you and good for business.

Michael Mapes can be reached at 757.599.1810 ext 225 or on the web at http://www.theresponsiblemortgagelender.com/

Saving money on a home with Lender Paid Mortgage Insurance

Michael Mapes-Suntrust Mortgage (Sun Trust Mortgage) — Tue, 06 Nov 2007 20:12:36 -0600

Lender Paid Mortgage Insurance, an old concept with a new twist

By Michael Mapes, The Responsible Mortgage Lender

Like old yeller it is hard to teach a new dog new tricks, in the world of mortgage financing we are continually finding new ways to open doors to potential homeowners and those wishing to escape adjustable rate mortgages in a declining market place.

One example of an old idea that has a new twist is Lender Paid Mortgage Insurance. It works very simply. Suppose you are purchasing a 100,000 home and going to put a down payment equal to 10% of the purchase price. A normal loan at 6% would have a principal and interest payment of $540.00, taxes and home owners insurance would equal about $150.00 and mortgage insurance would equal about $48.60 for a total payment of $738.60. Lender paid mortgage insurance would carry a rate of about .50% above the normal rate. So at 6.5% your principal and interest payment would be $569.70 add to that personal property taxes and homeowners insurance and a new payment would be $719.70 or roughly $19.00 less per month. While, $19.00 may not seem like much and perhaps its not. However most borrowers today are not borrowing 90,000.00, they are borrowing 190,000 - 250,000.00 and at those levels lender paid mortgage insurance will save a homeowner 50-60.00 per month on average. This translates into huge savings month over month and year over year.

When comparing mortgage financing options looking at lender paid mortgage insurance could save you money, allow you to purchase more a home and provide you with a higher tax deduction at the end of year. As consumers look for more financing options to finance their home purchase new and creative uses of old methods is proving to a safe harbor in uncertain times.

Michael Mapes can be reached for comment at 757.599.1810 ext 225 or on the web at http://www.theresponsiblemortgagelender.com/ or apply online at www.suntrustmortgage.com/mmapes

Mortgage Insurers defy Fannie Mae and pull plug on popular products

Michael Mapes-Suntrust Mortgage (Sun Trust Mortgage) — Tue, 06 Nov 2007 19:51:32 -0600

Mortgage Insurers defy Fannie Mae and refuse to insure certain products

By Michael Mapes, The Responsible Mortgage Lender

Mortgage Insurance Agencies like MGIC, United Guaranty, Radian and others announced last week that they would no longer insure certain products issued by Fannie Mae and Freddie Mac. This is direct response to mounting loses from early payment defaults. Under the old rules if a borrower received an approval from FNMA (Fannie Mae) or FHLMC (Freddie Mac) automatic underwriting system, then mortgage insurance was approved as well based on those findings. In reality the mortgage insurance agency's walked in lock step with the Quasi-Federal Agencies. That is no longer the case.

In a recent announcement, mortgage insurers will no longer rubber stamp certain loan products for borrowers below 620 credit scores and loan to value above 95%. For those borrowers who are above a 620 credit score but lower than 660 will find the cost of mortgage insurance 35-40% higher than they normally would have paid. As well as mortgage insurers are raising the rates they charge on all loans across the board regardless of credit score or loan to value.

Mortgage Insurance provides no protection to a borrower. It is paid for by the borrower as part of their housing payment. When a borrower's down payment is less than 20% of the purchase price then mortgage insurance is required in order to obtain loan approval. Mortgage Insurance pays for the foreclosure and protects the actual lender against steep financial losses when a loan goes bad. Developed in the late 1960's mortgage insurance has allowed lenders to stretch guidelines and loan millions more too home owners since it creation.

As we continue to move through a rather challenging time in the housing industry there are alternatives to programs affected by this latest rule change. FHA provides one such alternative solution. The FHA reform bill is set to go to a vote in the Senate, soon home buyers will have the added protection of a safe secure fixed rate FHA loan with reasonable payments and terms.

Michael Mapes can be reached for comment at 757.599.1810 or on the web at http://www.theresponsiblemortgagelender.com/ or www.suntrustmortgage.com/mmapes

Old Ideas present us with New Solutions, Creative Mortgage Financing for Consumers

Michael Mapes-Suntrust Mortgage (Sun Trust Mortgage) — Sat, 03 Nov 2007 12:05:25 -0500

Old Ideas present us with new solutions, Creative Mortgage Financing for Consumers.

By Michael Mapes, The Responsible Mortgage Lender

10 years ago there was only a handful of ways to finance a home and by the way you better have had pretty decent credit and a down payment. That was replaced in 1999-2000 by the over exuberance of lenders and brokers pushing tailor made, easy to process, approve and close sub prime and Alt A loans. Gone was the rational of actually having a financial stack in your home. Gone was the rational of ever thinking someone could actually pay back the loan and gone was the thought of credit quality.

As with all good things the party had to end. Sad to say but it did. In its wake the hangover effect has been like a heroin addict still searching for that next fix. Homeowners are losing their home, Realtors and Mortgage Brokers are packing up shop and finding other jobs and Mortgage Banking operations like New Century Financial, Home 123 and American Home Mortgage has ceased to exist as companies.

Although the down turn in activity has led to the extinction of several companies and good mortgage products. It has also spawned new and innovative uses for long last products that where once the back bone of the Housing Market. As we shall see some new twists to some old products can still generate a home purchase:

30 year fixed rate loans where the seller can pay up to six months of house payments.
Lender paid Mortgage Insurance or Buyer Financed Mortgage Insurance. (This feature lowers total housing costs by 22%)
FHA and VA buy downs funded by the lender.
State Bond programs which offer good credit families below market interest rates.
30 year No Doc, Stated Income and No Ratio programs for people with good credit and down payment (ideal for self employed or commissioned people)
40 year fixed rate loans offering the same protections as those of other fixed rate products.
New FHA loan to be introduced in 2008 allowing for 1.5% down payment instead of the traditional 3%

While those with poor credit histories may not be able to buy today, a good lender will always work with these people to help them get their credit to where it needs to be in order to purchase. However, as we have seen in the last few months home buyers wishing to purchase have found that rates are attractive and some lenders are still willing to be creative in its approach. After all home ownership is still the number one investment families can make and it is still a great time to buy a home.

Michael Mapes can be reached at 757.599.1810 ext 225 or on the web at http://www.theresponsiblemortgagelender.com/

Mortgage Rates Decline as Housing Prices Begin to moderate in some areas

Michael Mapes-Suntrust Mortgage (Sun Trust Mortgage) — Sat, 03 Nov 2007 11:40:01 -0500

Mortgage Rates decline as Housing Prices begin to moderate is some areas

By Michael Mapes, The Responsible Mortgage Lender

During most of 2007 two inevitable things have happened. One foreclosures have risen has home owners could not keep up the rising costs of housing as their adjustable rate mortgages have reset. Secondly, this factor among others has led to a decline in the average home price in just about every market in the country.

The Credit Crunch and Liquidity issues experienced in August and September have yet to show up in the economic data released in October. However, the Federal Reserve Board headed by Ben Bernanke saw signs that the economy was going to fracture and that the stability of the US Financial System was at risk. Their direct response was to lower the discount rate by .50 bps in August followed by a lowering of the Fed Funds Rate in September and October. The direct result of this is a lowering of interest rates for things like credit cards, home equity loans and to a smaller extent home mortgage.

During the summer months interest rates on home mortgages climbed to as high as 7.25% for a 30 year fixed rate loan. Now that the investors appetite for prime loans has returned (mostly due to the FEDs action) mortgage rates are now approaching the 6.0% level again. This lowering of the mortgage rates is beginning to stimulate the home buyers back into the market. With rates still low and the rest of the economy steaming along home buyers are finding tremendous value in the market place. In most cases sellers are willing to not only pay closing costs for the buyers but in some cases they are will to improve the property as well.

As we move into the winter months and the home buying season of 2008 there are still cause for concern but if you are looking at buying a home a trusted realtor can show the value in buying a home at today's price levels.

Michael Mapes can be reached at 757.599.1810 ext 225 or on the web at http://www.theresponsiblemortgagelender.com/

Federal Reserve Cuts Rates, How will mortgage rates respond

Michael Mapes-Suntrust Mortgage (Sun Trust Mortgage) — Wed, 31 Oct 2007 14:36:54 -0500

Federal Reserve Cuts rates .25 bps. How will mortgage rate respond?

Now that the widely anticipated rate cur for October has occurred how does the market respond? The first over all response is that oil topped off at over 94.00 a barrel. However, that price is driven by market speculators who will soon be burned when the bubble on oil burst and goes down to 60.00 a barrel in short order. Although, the economy is not out of the woods just yet, In the weeks and months that precede this rate cut turmoil in the financial markets still exists. For one the LIBOR rate which is the rate banks loan to each other is still at extreme levels, since banks typically have inside knowledge this rate spread between treasury's and LIBOR (London Interest Rate Over Night Lending Rate) is still troubling to say the least. Couple this with a declining valuation in home prices still means the bottom may not have yet been achieved.

In a positive note rates are once again going lower than the previous high of this summer at 7.0% and the liquidity crisis that griped the housing market is loosing. This will bring with it opportunity for the home buyer who is positioned to take advantage of the lower than expected home prices.

How low is a home price going to go is anybodies guess? Predictions range from 10-15% from 2006 levels. However, home prices are a market to market situation and in Hampton Roads, Va home prices are expected to hold their value given the relative economic wage increases and low taxes which tend to attract high quality jobs. However, in many markets across the country as in Florida and Southern California home prices are declining in excess of 40% of 2005 price levels.

In retrospect we have learned a lot from the business models of brokers and the predatory nature of sub prime loans. Expect to see a return to traditional lending standards as we move forward into 2008. Currently rates are approaching 6% with an opportunity to go lower.

Michael Mapes can be reached for comment at 757.599.1810 ext 225 or on the web at http://www.theresponsiblemortgagelemder.com/

Positive signs for the Housing Market in 2008

Michael Mapes-Suntrust Mortgage (Sun Trust Mortgage) — Wed, 31 Oct 2007 10:17:55 -0500

Some very positive signs for 2008

By Michael Mapes, The Responsible Mortgage Lender.Com

There have been some very interesting developments that I'd like to share. These developments have given us some very positive news as well as some clearer signals about how the mortgage market and housing market will look in 2008. I want to leave you with two very important points

There are some very important signs in the capital markets that the liquidity is returning for "prime" mortgage loans and bonds.
These positive trends in capital markets liquidity are being muted by continued concerns over the housing market, the broader economy, and the concerns over the soundness of the financial system - we should not assume the worst is over.

Capital Markets Liquidity

Over the past several weeks, we have seen very encouraging signs that capital markets liquidity is returning. Prime quality loans and bonds are now trading with much greater regularity than during the August and September spreads. Currently about half of the widening that took place has been regained.

I'd like to reiterate that the market is looking for Prime quality loans right now, however there is limited interest in Alt A loans and even less for Sub Prime Quality loans. However, the fact that investors are buying these types of loans at all is a very encouraging sign. The reason for this is that the investors that are currently buying Alt A and sub prime are very knowledgeable and have a much deeper understanding of mortgage loans and the risk associated with them. This should be viewed as extremely encouraging for everyone.

One last point that I would like to make is that since the steep decline in the Jumbo volume is happening across the country and continues regardless of price or tightening we need to look for the cause of this. The most likely cause of this is the "media effect". The overall health of the real estate market is the single most important factor affecting the outlook of mortgages and the capital markets affecting 2008.

Supply and Demand

While it appears that the sting of the liquidity crisis is past us and is losing strength, it is giving way to the longer term realities. That is that the housing market will have a much bigger and longer term impact on our industry. The feed back loops between reduced capital liquidity, tighter lending standards, declining home prices, increasing defaults and the inevitable stresses to the economy as a whole are fueling a storm that will likely lead to the largest housing market correction since the Great Depression. Conversely this will be one of the biggest challenges to our financial system has had to endure in many years.

Defaults

The credit performance of the 2006 Alt A loans and sub-prime loans continues to be miserable. 2007 sub prime and Alt A loans are actually performing much worse than 2006. The rate of delinquency is much faster and with greater regularity than any one thought possible.

The story is housing as a whole is one of increasing supply with a decrease in demand. This factor alone is and will continue to drive prices down. While housing starts and new permits are declining-which helps lessen the supply, sales of new and existing homes continues to decline which results in a build of supply.

Excess supply combined with falling demand means more home price declines, higher defaults and greater losses are still to come. Estimate right now are that home prices between now and 2009 are for a 10-15% decline.

While I do not want to leave you with doom and gloom that parts of this article suggests. There are tremendous opportunities in the market place, interest rates are very favorable for a good housing market and new and creative uses for prime products are being introduced every day. With that said it is a great time to buy and sell a home contact your local realtor today.

Michael Mapes can be reached at 757.599.1810 ext 225 or on the web at http://www.theresponsiblemortgagelender.com/

The Results of Unprincipled Borrowing

Michael Mapes-Suntrust Mortgage (Sun Trust Mortgage) — Fri, 26 Oct 2007 14:36:25 -0500

The Results of UnPrincipled of Responsible Borrowing.

By Michael Mapes, The Responsible Mortgage Lender.

I received an email from a long time client who sounded so depressed about the state of the current housing market. They have moved away, still trying to sell their old home and just recently closed on a new home in Ohio. Her statement was "Michael, every time I turn on the news or read the paper I see something about the housing industry that makes me want to shudder". As I pondered her reaction to the current state of affairs, it reminded me that actually things are not really bad in this industry. "What?" you say. People are losing their homes in record number. People are getting laid off and entire companies are going out of business. This is all true, but why?

The entire mortgage and Real Estate system are to blame. People were becoming Realtors because the money was good and buyers were easy to find. The same holds true for Mortgage Brokers who needed no training what so ever to hang out a shingle and begin loaning money. All they needed was a few products and a slick slogan and waalaa! they are financial experts. Caught in the middle were a lot of decent people whose only goal was to finally own a piece of the American Dream. These people paid more for a home than they needed to because speculators and fraudsters drove up the price of housing by flipping homes multiple times to individuals involved in the scheme.

However true the above is, Mortgage Brokers eager to provide the access to capital these people needed gift-wrapped loans to consumers that they could not afford, stated income on applications that was not real, and made silent second mortgages that had the lender known of would have never of closed. With all this said, what ever happened to personal accountability?

As consumers were frenzied over homes, all reason with regards to "Can I actually afford this home?" went out the window. "Buy now and find a way to pay for it later," became the norm. In some cases, bidding wars drove up property costs above the actual asking price. This further inflated a market that was bound to crash.

A home is a sustaining force in this country. It's where we raise a family, come to at the end of the day, a place to lay your head at the end of long day and lastly it's your home. The word "home" in my book is a place to go find meaning and peace. Mortgage Brokers made the word "home" a place to fear, but they did not do this by themselves; the consumer helped them by not asking enough questions or walking away.

Responsible borrowing begins with you, the consumer. If you see the payment and know that you are going to tight affording this home, walk away and find another way or find a home you can afford. Sure it is not the perfect house but what is? I do not live in a castle or big expensive house, but every night I walk into my 2 year old's room and give him a kiss goodnight as he lies there sleeping, peaceful and quite. I then go off to bed knowing that my family is safe and secure. That means more to me than living in a castle or a big beautiful house. My family lives in their own home; yours deserves the same.

This is a great time to be buying a home or even selling one and moving up. The cream of the mortgage industry and the Realtor community are all that are left from all this consolidation. This is good news for the consumer. But as you ponder your next purchase ask yourself, "Can I afford this house?" If so, buy it. If not, move on to a house you can fford. The stakes are higher than you imagine.

Michael Mapes can be reached at 757.599.1810 ext 225 or on the web at http://www.theresponsiblemortgagelender.com/ or www.suntrustmortgage.com/mmapes

Mortgage Insurers announce today tighter credit policies, Could spell the end for low to moderate income home buyers

Michael Mapes-Suntrust Mortgage (Sun Trust Mortgage) — Fri, 26 Oct 2007 13:20:39 -0500

Your Credit Score will depend on if you get a home or if you Rent

by Michael Mapes, The Responsible Mortgage Lender.Com

Mortgage Insurance companies AIG/United Guaranty along with RMIC have announced this morning that it will no longer insure certain loan types with credit scores under 660. Citing first payment default as the reasoning behind such a move, the mortgage insurance industry has begun to not accept automatic underwriting model approvals from both Fannie Mae and Freddie Mac.

In recent years when a borrower applied for a loan, the loan officer would input this data into a loan application and electronically send it to Fannie Mae's DU/DO system or Freddie Mac's LP system. These systems would use a statistical model to gauge the risk and with in a minute send back a underwriting approval or refer it to an underwriter for manual underwriting. This feature has allowed numerous home buyers not only to purchase a home they otherwise would not have qualified for under traditional manual underwriting, but it has also allowed mortgage loans to be approved and closed in record speed.

Todays actions were as follows:

* Loans with a credit score of 660 or lower and borrowing 97.01 - 100% loan to value will now have their mortgage insurance priced at A- mortgage insurance rates. This represents a increase of over 50%

* Loans with a credit score of 620 or less and borrowing 95.01% Loan to Value up to 100% will no longer be eligible for mortgage insurance.

* Loans with a credit score of 575 or less will not be eligible for Mortgage Insurance regardless of Loan to Value.

* These policies take effect and are in effect as of December 3, 2007 regardless of automatic underwriting finding

What does all this mean? and who is impacted?

These new enhancements or tightening is target at the FNMA My Community Program and Freddie Mac's Home Possible Solutions Program as well as FNMA and Freddie Mac's 97% program. Without the issuance of mortgage insurance for borrowers using these programs, which lenders could previously sell to FNMA and Freddie Mac with credit score down to 575, this action will effectively end the program for anyone below a 620 credit score. As well as those that are above the 620 credit score but below a 660 credit score will see the cost of a home mortgage rise about 20-25% what they would have normally paid. Thus making qualifying for a home much harder for the low to moderate income borrower.

Typically the mortgage insurance industry and FNMA and Freddie Mac have marched in tune with each other, this move by the mortgage industry is sign that they no longer wish to dance.

Michael Mapes can be reached for comment at 757.599.1810 ext 225 or on the web at www.theresponsiblemortgagelender.com or at www.suntrustmortgage.com/mmapes

New Jobless claims sparks debate about October Rate Cut

Michael Mapes-Suntrust Mortgage (Sun Trust Mortgage) — Tue, 23 Oct 2007 18:17:12 -0500

New Jobless claims sparks debate about October Rate Cut. How will Mortgage Rates respond

By Michael Mapes, The Responsible Mortgage Lender.Com

New Jobless claims for the week ending Oct 19 was up 27,000. Most economist were expecting a number of down 2,000. The surprise in this result has once again spurred comment that the Federal Reserve will once again have to cut key interest rates by .25bps at the October 31st meeting.

The Federal Reserve Chairman Ben Bernanke in Testimony on Capital Hill recently told law makers that "The Federal Reserve is prepared to step in and aid the economy with whatever means it has". Most market analysts view this statement as a sign that the Federal Reserve will indeed cut key rates again this month. The latest cut of 50 bps in the September meeting was designed to inject liquidity and confidence into the trouble financial sector, the Fed minutes revealed. While some members of the Board of Governors resisted the .50bps move, Chairman Bernanke felt that ailing the struggling housing market was more important this time around.

As more and more economic data comes in showing a slowing economy, the one sector that has remained strong is employment and income growth. If the unemployment numbers from August 2007 and the recent new job less claims for October are correct then signs of slowing consumer spending are sure to follow. In any economic system the end user or consumer of a product or service is the fundation of economic growth. As more and more people feel uncertain about their jobs then consumers will save more and spend less. Not a promising senerio as we head into the holiday shopping season.

Most economist agree that the Federal Reserve will slash key interest rates by .25 bps this October meeting. Mortgage Interest Rates are more tied to the 10 year treasury note then what the Federal Reserve actions are. However, given the current state of the economy and mortgage market in general. A postive move by the Federal Reserve could spark lower mortgage rates heading into 2008.

Michael Mapes can be reached for comment at 757.599.1810 ext 225 or on the web at http://www.thereponsiblemortgagelender.com/

Jumbo Loan LIquidity returning to normal

Michael Mapes-Suntrust Mortgage (Sun Trust Mortgage) — Tue, 23 Oct 2007 14:44:51 -0500

Jumbo Loan Liquidity returning to Normal

By Michael Mapes, The Responsible Mortgage Lender.com

During the month of August as the liquidity issues gripped the market and the news of a global credit crunch became reality one of the first segments to feel the pinch were those borrowers wishing to borrow in excess of 417,000 on a home. The rush to judgement for these loans was so sever that the 30 year rate went from 6.75% one day to over 8% the next. As the institutional investors sold off their positions in these products and refused to purchase these so called "risky" loans, the real estate market went into a further tailspin.

However as the noise is settling down we are beginning to see the investors return to these products. As of today we have witnessed a decline in real interest rates for these loans back to the 6.875-7% range. Traditionally Jumbo loans have been .25 or 50% higher than that of conforming loans. We are seeing this trend develop and its likihood of continuance is good. As the Institutional investors once again begin to have confidence in what they are buying we should see Jumbo Rates move a bit lower.

In recent weeks as I have talked with Realtors and builders alike they are also seeing Jumbo buyers show back up at open houses and model homes to look. While no one seems to be able to predict the future, one this is sure and that is the Jumbo market will not go the way of sub-prime loans.

Michael Mapes can be reached at 757.599.1810 ext 225 or on the web at www.theresponsiblemortgagelender.com

Housing Market outlook for 2008-2009

Michael Mapes-Suntrust Mortgage (Sun Trust Mortgage) — Tue, 23 Oct 2007 14:16:55 -0500

State of the Mortgage Market for October 2007

By Michael Mapes, The Responsible Mortgage Lender.Com

Having just returned from the annual conference of Mortgage Bankers in Mass. I left with not the same good feelings about our industry as when I went. During this three day conference we or should I say the mortgage bankers that actually went. Were not so delighted to hear the news coming from key executives at various mortgage banking firms across the country.

Having set foot onto the convention floor I was convinced that 2009 was going to be the turn around year for our industry. Today I am not so sure. The key highlight and eye opener for me was that amount of inventory unsold across major urban areas. For example today the entire state of Florida has a 3 plus year standing inventory, with still more to come. Foreclosures from the the second and thrid quarter of this year have not yet hit the market for sale and lastly, the mortgage credit markets will go through another round of tighting to bring lending standards back in line with pre-1998/99 guidelines.

These three factors could lead to more housing price declines in the Midwest, Florida and California. Bringing underwriting standards back down to pre-boom levels will cause further deterioration in the housing prices across the nation. In addition to that most builders will find the cost of building a home much more expensive than the actually selling price. This further complicate a complicated problem. Most executives believe that the above markets will not recover until 2010 and beyond. Most seem to place the blame on brokers who pushed stated income, no ratio and sub prime loans with out regard to peoples ability to repay. However, the consensus was that some parts of the country will start to recover in 2008, while others like the Hampton Roads Market in Virginia will experience little to no price decline and others such as Florida and California will not recover until past 2010.

For Now it seems that interest rates are very favorable which is holding up the industry, A half percentage point movement upward and we could be in for a long long winters nap.

Michael Mapes can be reached for comment at 757.599.1810 ext 225 or on the web at www.theresponsiblemortgagelender.com

Yorktown Virginia it is a Historical Place

Michael Mapes-Suntrust Mortgage (Sun Trust Mortgage) — Sun, 14 Oct 2007 11:46:36 -0500

The Historic Trangle

by Michael Mapes

Yourtown, Va is where George Washington finally defeated the British to win the Revolutionary War. It is in the middle of the so called "Historic Triangle" nesttled between Williamsburg, Va and jamestown, Va. Each carry significant weight when it comes to the history of this country.

Williamsburg, Va is the first colonial capital of the United States and is also the most visted site by US Presidents. visit www.colonialwilliamsburg.com for more information on visiting this area.

Jamestown, Va is the site of the first english speaking colony in the New World. www.jamestown.com is a great site to visit for information about Jamestown and the 400 anniverary of the first English settlement.

So when you want to set sail and take a good family vacation, a Trip to the historic triangle is the way to go.

It is about the Relationship not the sale

Michael Mapes-Suntrust Mortgage (Sun Trust Mortgage) — Sun, 14 Oct 2007 11:29:00 -0500

It is about the Relationship

by Michael Mapes, The Responsible Mortgage Lender

Today many lenders advertise the ease and affordability of mortgage loans. It does not matter if you have good credit bad credit purchasing a home or refinancing. The pitch is the same. Yesterday I spent an hour watching the latest and greatest infomercial on the topic of mortgage loans from A direct lender. We have 50 year, 40 year and 30 year terms with options like pick a payment, bad credit loans, foreclosure bail outs, chapter 13 bail outs and the list goes on and on and on.

I was hoping that this down turn in business would put these kinds of people out of business. I guess I was wrong. You see a mortgage loan regardless of reason or circumstances is about the relationship you can create and foster with another person. It is not about these fancy commercials designed to suck you in so you can be swindled. I decided to call the number and see what was what.

The person who answered the phone could not answer basic questions about rate and in fact refused to unless she could pull my credit. I told her my credit score was 747 and I had only two bills and that I was interested in refinancing. Needless to say the sales pitch was high pressure and in the end she offered me an adjustable rate mortgage at 6.75% for one year. She made no attempt to create a relationship with me, she made no attempt to get to why I wanted to refinance.

In Real Estate Sales as well as Mortgage financing it is all about the relationship and allowing yourself to get inside you clients head and help them achieve the achievable dream.

Michael Mapes can be reached at 757.599.1810 ext 225 or on the web at http://www.theresponsiblemortgagelender.com/ or apply online at www.suntrustmortgage.com/mmapes

When well qualified borrowers can't get a mortgage loan

Michael Mapes-Suntrust Mortgage (Sun Trust Mortgage) — Sun, 14 Oct 2007 10:24:35 -0500

When well qualified borrowers can't get loans

By Michael Mapes, The Responsible Mortgage Lender.com

When borrowers who can document income and credit is in the high 750 range can not get loans then we are all in trouble. Recently that has happened to a couple wishing to refinance their home.

Royce and Cathy wished to refinance their home and take cash out for the purposes of doing some home repairs and upgrades. The couple's credit is stellar, in fact the scores that are on their credit are so stellar the lowest score is 750. They have no other debt than their house payment and the house payment represents only 30% of their gross income. However, the new FNMA desk top underwriting model suggested that they were a risk to the lender and did not approve their loan through the automatic model.

In days gone past this loan would have been approved and closed with minimal questions asked. Today the market is in turmoil and even well qualified borrowers are finding it hard to get approved for a loan. The new FNMA model puts a lot more weight on cash assets for approving a loan and loan to value exposure. While it still views debt to income ratios important its latest upgrade also places great weight on the reason for the refinance and the reserves that the borrower is able to prove.

When your borrower is applying for a loan the best approach is full disclosure of income and assets. The more assets that one can document the better, as we work through this tightening of credit it could mean the difference between a smooth process or a process of heartache.

Michael Mapes can be reached at 757.599.1810 ext 225 or on the web at http://www.theresponsiblemortgagelender.com/ or apply on line at www.suntrustmortgage.com/mmapes

No cost Refinance, When they are the right Choice

Michael Mapes-Suntrust Mortgage (Sun Trust Mortgage) — Sun, 14 Oct 2007 09:53:33 -0500

No cost Refinance, when are they a good deal for consumers

By Michael Mapes, The Responsible Mortgage Lender

Lets all give credit where credit is due. Countrywide and Bank of America have found a way to repackage an old idea and call it there own. Least not forget that Bank of America now owns a significant portion of Countrywide Home Loans. However, they should be given credit for an excellent marketing strategy.

How does a no cost refinance work.

A No Cost refinance works very simply. Mortgages today are unlike mortgages many decades ago where you had to wait for the bank to have the money to loan people. Today mortgages are backed by bonds called Mortgage Backed Securities. Bonds carry prices on them both negative (which is when borrowers pay points) and positives (when a borrower pays no points).

When a mortgage bond carries a significant premium (determined daily) then the lender can either keep this premium as profit or use it to pay the borrowers closing cost. I have never met a loan officer yet who at sometime has not used the premium to pay the borrowers closing costs. It is good business to do so and it also builds good will between the borrower and the lender.

When is a No Cost Refinance a Good Deal.

Refinancing a mortgage can cost a lot of money. Typically the cost is rolled into the new loan. However if you are able to arrange a no cost refinance and it is truly lender paid and you are reducing your interest rate by at least ½% then a no cost refinance would work for you. You save money on your monthly housing costs and your equity in your home is protected. However, should you be raising your rate and paying off bills trying to use a no cost refinance option then a no cost refinance might not be in your best interest long term. The reason for this is that the higher rate you obtained to do a no cost refinance could be actually adding more to your household outgo then a normal cash out refinance can provide. Normally a No Cost refinance is 1% to 11/2% higher than a regular refinance at normal market rates.

What ever your situation be advised that every lender can offer a no cost refinance. However if is a good idea for you depends on your situation, a responsible lender will help guide you along so that you can make the right borrowing decision for you.

Michael Mapes can be reached at 757.599.1810 ext 225 or on the web at http://www.theresponsiblemortgagelender.com/ or www.suntrustmortgage.com/mmapes

What are Legitimate AR Points? When blogging points goes to far

Michael Mapes-Suntrust Mortgage (Sun Trust Mortgage) — Sun, 14 Oct 2007 09:34:07 -0500

What happens when points are ill gotten

by Michael Mapes

We all know by now how to achieve points on AR. Active Rain is a point based blogging system and if the most part it works. You write bolgs for consumers to read and you score 200 points, more if people actually like what you wrote. You also score points for making comments to other blogs, Invite other to join Active Rain and you can build yourself residual points. The point system is alive an well on Active Rain.

Other Points

Until friday I did not know that you can post photos to Localism and score points. In fact post two photos and you can score 150 points and then 25 points for each additional photo. Here in lies a potential problem. When you have reached your 10 blog max and you have exhausted you comment limit for the day, what is a person to do to maintain ranking and point advantage. Answer post photos that may or may not be ones you have taken of you area.

Many members of Active Rain and I suspect that number is in the high 90% range post blogs and comments that they feel are of value to not only the author but also to the general public. But the other percentage of people have nothing of value to say or go through the motions in order to gain points.

Posting photos on localism is a great way for consumers to gain some valuable information about your area. Posting photos from other websites that are not of your own creation is FRAUD and prohibits free and open competition. If you have nothing of value to say, for petes sake do not blog just to add points. Sharpen you skills and open your mind and learn what the public wants. If you find your self behind in the points do not commit fraud by posting photos that do not belong to you. I know of one person who has posted over 40 photos to localism and judging by the quality of the photo this person ought to be a professional photographer and not in the Real Estate Business. Accumulating over 3,000 points in the process.

Cheating hurts everyone

Once I learned of this point accumulation I almost through in the towel and quit AR. I blog to provide information for people. Help them avoid the pitfalls in Mortgage financing and expose predatory lenders. I have over 111 posts and over 150 comments to other blogs. I believe I am playing with in the rules. This persons actions has caused me to rethink the work I am doing here and possible look for another way to add value to people.

Blog to help people and not for the points. If you are simply in this for the points then you are in it for the wrong reasons.

Michael Mapes can be reached for comment at 757.599.1810 ext 225

1 out of every 4 married men sleep alone

Michael Mapes-Suntrust Mortgage (Sun Trust Mortgage) — Wed, 10 Oct 2007 19:02:58 -0500

One out of every married man sleeps alone

by Michael Mapes, The Responsible Mortgage Lender

As I walked in the door this evening I kissed my wife and kids hello. It was a great day. At the dinner table talk turned to the local news story about married couples who sleep in separate beds. The story concluded a study that stated that 25% of all married couples sleep in separate beds in separate rooms because of the male in the relationship snoring so loud that the female cannot sleep. Well truth be told I snore, according to my wife I snore loudly. Of course she snores as well, which I pointed out to her. I also explained to her that men have to sleep on the couch because of the female hogging the bed. Tonight I get to sleep on the couch for general principals.

Go figure. Open mouth insert foot. I am over my post total so a good rating will help me with the points........please have pity on me....I am sleeping on the couch

If you know some looking to refinance or purchase a home a referal is the greatest compliment I could recieve

Michael Mapes can be reached at 757.599.1810 or on the web at www.theresponsiblemortgagelender.comor apply on-line at www.suntrustmortgage.com/mmapes

Are builders the new predatory Lenders

Michael Mapes-Suntrust Mortgage (Sun Trust Mortgage) — Wed, 10 Oct 2007 08:38:15 -0500

Sharks in the water, Are you the bait

By Michael Mapes, The Responsible Mortgage Lender.Com

During the recent housing boom buyers had to be wary of predatory lenders selling sub prime loans with high cost mortgages and terms that were in reality not affordable. It appears today that buyers still need to worry about not only predatory lenders but also predatory sellers.

Sellers are wanting to sell a home, especially builders. With all the standing inventory and the need to bleed off that inventory builders, especially builder who control the financing vehicle are coming up with unheard of terms and conditions for the sale. Recently, some builder have been offering closing cost assistance of up to 10,000.00 and price reductions of up to 30-40,000 of new homes. On the surface this seems like a good deal, to the buyer. However, these builder bail outs are starting to cause some real problems.

As builders continue to offer steep discounts what is emerging is that neighborhoods that they are building in are being to lose their value. Sometimes even before the house is completed for sale the house has devalued some 10,000.00, the net result is that a home buyer has to put up more money. Secondly, the builders are turning to sub standard material and labor as a way to off set the reductions. This has a long term net effect of depreciating a home and causing the home owner to incur expensive repairs two to three years after the purchase. This also can put a strain on the household budget to the point that puts the ability to repay the obligation in jeopardy. Thirdly, the controlling of the financing in a down market like this has led to even poorer underwriting decisions and more predatory lending practices.

While not all builders are conducting this type of business practice there are some that are and as a buyer you need to be aware of the costs versus reward. In some cases if is sounds to good to be true it typically is. A good reputable builder will offer a quality product at a reasonable price. A cautious approach is warranted none the less.

Michael Mapes can be reached at 757.599.1810 ext 225 or on the web at www.suntrustmortgage.com/mmapes or http://www.theresponsiblemortgagelender.com/

Prevent Identity Theft

Michael Mapes-Suntrust Mortgage (Sun Trust Mortgage) — Tue, 09 Oct 2007 10:08:03 -0500

Prevent Identity Theft

Many consumers are not aware of what there credit report says. Not knowing what is on your credit report can leave you a exposed to identity theft when it happens. WWW.annualcreditreport.com offers a free credit report to individuals so that you can check your credit report on an annual basis. This helps to identify new accounts opened in your name that perhaps you did not open.

By staying proactive and informed you can keep the criminals at bay.

Michael Mapes can be reached at 757.599.1810 or on the web at www.suntrustmortgage.com/mmapes

How to skip 6 months mortgage payments

Michael Mapes-Suntrust Mortgage (Sun Trust Mortgage) — Tue, 09 Oct 2007 09:16:38 -0500

Buying a home in Virginia Has never been easier

by Michael Mapes

Every now and again you must revisit a tried and true product and then enhance it. That is exactly what has happened with Michael Mapes. In recent months Michael has tweaked existing products, recieved secondary market approval for and implemented the "skip it" program.

This is a tremendous tool not only for sellers to attract quality buyers but also for agents to attract quality buyers. The skip it mortgage program currently being offered is a 30 year fixed rate mortgage that allows the buyers to skip up to six months worth of mortgage payments.

These payments are not included in the loan, there are no special fees to pay in order to participate in "skip it". In-fact the the rates on the skip it program are the exact same that you see on any 30 year fixed conventional loan. In recent months several lenders have come out with a Fannie Mae program to allow the seller to pay up to 6 months of Interest, Taxes and Insurance payments. Skip It allows borrowers on purchase loans to Skip the whole entire payment for up to Six Months, which includes principal as well.

For more information on "Skip it" please contact Michael Mapes at 757.599.1810 ext 225 or on the web at www.theresponsiblemortgagelender.com

Mortgage Rates

Michael Mapes-Suntrust Mortgage (Sun Trust Mortgage) — Tue, 09 Oct 2007 09:04:26 -0500

A New tool for Realtors and Consumers

In response to an ever changing and fast paced market one lender has developed a new tool for consumers and Realtors to use to deliver mortgage interest rates right to your desk top. Michael Mapes, The Responsible Mortgage Lender has implemented a new system called rate watch. Here you can fill out a few pieces of information and begin to receive mortgage interest rates daily, weekly or monthly if you so desire.

How Rate Watch is a tool.

Rate Watchis designed to do two things. One it is a tool for consumers to real rates in real time should they be in the market to buy a home or refinance their existing mortgage. Secondly it is to aid Realtors in market movement. When Realtors can see tangible results of rate movement on a daily basis they can begin to position clients in a way to maximize opportunity.

The mission of Michael Mapes is to give every available tool to consumers and Realtors so that life for them becomes easier and more affordable. Rate Watch is a free service and no commitment is required. Signing up for Rate Watch takes a few minutes of your time and can save you thousands of dollars in expenses.

Michael Mapes can be reached for comment at 757.599.1810 ext 225 or on the web at www.suntrustmortgage.com/mmapes or www.theresponsiblemortgagelender.com