The Mortgage Minute

Mortgage Pre-Approval Is A Must!

Horizon Financial, Inc. — Wed, 07 Oct 2009 14:40:49 -0500

Almost 1 in 3 borrowers who applied for a mortgage in 2008 was denied, the government reported last week.

The Federal Reserve said the denial rate for all home loans was 32%, clear evidence lenders are keeping their standards tight.

Current home shoppers and home owners looking to refinance pay close attention. Mortgage pre-approval is a necessity! Don't gamble by skipping this step. Loan turndowns may be the result.

A true pre-approval requires initial verification of assets, credit and income. Automated underwriting findings can then be obtained. The pre-approval is contingent upon final review of assets, credit and income, but if everything is verified and documented correctly the initial pre-approval is gold.

So, take extra time and effort on the front end. Provide your lender with the last 2 years W-2's ( tax returns if self employed ), most recent paystubs and a 60 day bank statement. Also, thoroughly review and accurately complete the loan application.

Errors on the application are a big source of loan turndowns. If some of the loan application details can not be verified a turndown may result.

Properly executed pre-approvals will identify potential problems before they arise in final underwriting. This will give you and your lender plenty of time to overcome them and move forward to closing.

Don't be the 1 in 3 who gets a loan denied.

Upstate $1MM Challenge - 1st time home buyer seminar

Horizon Financial, Inc. — Mon, 21 Sep 2009 15:33:06 -0500

Together, we can put $1MM back in our local economy.

Our goal is 125 First Time Home Buyers by Nov. 30, 2009, with each buyer receiving the $8,000 Tax Credit. That's $1MM back in the Upstate economy.

I will be co-hosting ( along with other Upstate professionals ) a series of First Time Home Buyer seminars.

Attendees will learn:

Why buying today will put $8,000 in your pocket
Instructions on how to file or ammend your tax return to receive your $8,000 check
Which 100% financing options are still available
Free $$$ from County and State Down Payment Assistance programs - who has it and how to get it.
Free Credit Report - Get Pre-Approved at the event

Real estate professionals will be available before and after the events to discuss options and answer questions.

Sept 22 @ Imagine Center Gym Sept 29 @ LivNNsidout Gym

All times 6:30 - 7:30 PM

For more information or to register for this free event visit www.UpstateMillionDollarChallenge.com.

or call 864-527-8900 x 128.

Your $8,000 check is waiting!!!

The $1,000,000 Challenge

Horizon Financial, Inc. — Wed, 02 Sep 2009 08:52:20 -0500

Together, we can put $1MM back in our local economy.

Our goal is 125 First Time Home Buyers by Nov. 30, 2009, with each buyer receiving the $8,000 Tax Credit. That's $1MM back in the Upstate economy.

I will be co-hosting ( along with other Upstate professionals ) a series of First Time Home Buyer seminars.

Attendees will learn:

Why buying today will put $8,000 in your pocket
Instructions on how to file or ammend your tax return to receive your $8,000 check
Which 100% financing options are still available
Free $$$ from County and State Down Payment Assistance programs - who has it and how to get it.
Free Credit Report - Get Pre-Approved at the event

Real estate professionals will be available before and after the events to discuss options and answer questions.

Sept 15 @ LivNNsidout Gym Sept 22 @ Imagine Center Gym Sept 29 @ LivNNsidout Gym

All times 6:30 - 7:30 PM

For more information or to register for this free event visit www.UpstateMillionDollarChallenge.com.

or call 864-527-8900 x 128.

Your $8,000 check is waiting!!!

Get STREAMLINED!!!

Horizon Financial, Inc. — Wed, 22 Apr 2009 16:40:15 -0500

Mortgage rates are crazy low! If you have an existing FHA or VA loan call today and ask about a SUPER EASY Streamline.

You can streamline any previous FHA or VA loan with little documentation, no credit check, no income verification or asset verification! What could be easier than that?

You must be current for previous 6-12 months and new rate must be at least .50% lower.

Need more info on the streamline process, call me today toll free @ 877-627-9211x104 or email SFowler@HorizonFinancial.org .

More Positive News From Today's Existing Home Sales Report

Horizon Financial, Inc. — Thu, 26 Feb 2009 10:51:42 -0600

You would think last month's Existing Home Sales report signals more trouble ahead for the housing market.

Quite the opposite.

Beyond the headlines is the real story; one that shows housing market fundamentals are coming back into balance.

As home values tick lower, it appears, value buyers are stepping in and snapping up supply. It's true the number of homes sold fell to its lowest levels in 12 years, but we can't ignore the number of homes available to buy fell, too.

Banks have put the brakes on foreclosures
Economic uncertainty is reducing job-related relocations
Builders have all but stopped building new homes

The national housing supply is as low as it's been in more than a year.

Based on the current rate of sales activity, the national housing supply would be 100% sold in 9.6 months -- a two-month improvement from the high point set in June 2008.

Also, demand for homes is expected to rise.

The Fed is trying to hold mortgage rates low
Fannie Mae is opening its checkbook to real estate investors
The stimulus package is granting a $8000 tax credit to first-timers

So, the headlines aren't wrong; they're just incomplete.

In looking at all of the data and not just one piece, we find hope. Falling supply plus rising demand leads home values higher and that's the basis for a recovery.

(Image courtesy: Wall Street Journal Online)

Good News For Housing Recovery - Cost Of Owning Versus Renting Back To Historical Norm

Horizon Financial, Inc. — Wed, 25 Feb 2009 09:46:40 -0600

One popular housing theory is -- before a bona fide housing recovery can begin -- the cost of owning a home versus renting one must return to historical levels.

If that belief is true, a national return to rising home prices may be in store for 2009.

Falling home prices and falling mortgage rates have dropped the relative, after-tax cost of owning a home to 125% of the cost of renting a home.

This is the exact 18-year historical average and not since 2001 has the gap been this small.

As reported by the Wall Street Journal, though, the study has some flaws. For example, the data doesn't account for ongoing home maintenance costs, nor does it consider real estate tax bills and insurance policies.

But, combining a relatively low cost of ownership with the government's $8,000 tax credit for first-time home buyers is likely to convert long-time renters into never-before homeowners.

This is thought to be a key element of the housing recovery.

In many markets (but not all), home prices are expected to move even lower through 2009. Provided mortgage rates stay low, the cost gap between owning and renting will shrink even more.

(Image courtesy: Wall Street Journal

February 2, 2009 - The Week Ahead

Horizon Financial, Inc. — Mon, 02 Feb 2009 09:40:55 -0600

Consumer confidence reached an all-time low and 100,000 Americans were issued layoff notices last week. For the 3rd consecutive week, mortgage rates rose and average loan fees increased.

Amid all of the negative economic news, however, there were two bright spots worth identifying.

First, the supply of "used" homes for sale fell from 11 months to 9 months nationwide. This suggests homebuyers are re-entering the housing market in force and signals home prices are nearing equilibrium.

And, second, the nation's GDP -- a measurement of the country's complete economic footprint -- didn't fall by nearly as much as experts predicted. A positive surprise like this makes us wonder what else the Doomsday Economists may be wrong about.

We won't have to wonder long.

This week we have a large amount of data, legislation and rhetoric to influence mortgage rates. Some of the news mortgage markets will digest this week include:

The Personal Consumption Expenditures Index report. PCE is a preferred inflation measurement and inflation is the enemy of mortgage rates. A high reading may pressure mortgage rates up.
Retail stores report on same-store sales.
The Pending Home Sales report. This notes the number of "homes under contract" and is a good gauge for buyer interest and the general health of housing.
20% of the S&P 500 firms will report earnings.
Congress is expected to vote on the Stimulus package.

The biggest impact on rates, however, could come Friday with the release of January's jobs report. Employment data is always a market-mover and with the press giving so much attention to layoffs lately, expect Wall Street to be extra jittery it.

Starting A New Loan Application? A Few Tips.

Horizon Financial, Inc. — Mon, 26 Jan 2009 21:03:17 -0600

With rates at record lows, all lenders have recently seen a sharp increase in loan applications. Remember also, lenders have dramatically reduced their staff over the last 18 months to cut cost. This means timeframes needed for underwriting, approvals and closing have become longer than normal.

There are a few things you can do to protect yourself. First, consider longer lock in time frames. 60 days instead of 30. I have several lenders who've recently priced 60 day locks the same as 30 days. They realize 30 days isn't enough and incent customers to select 60 day locks.

Next, responding quickly to requests for information or documentation is important - the faster the file is submitted and approved, the better off we are to keep that great interest rate protected.

Finally, be aware it may be a smart idea to pay points to gain the best interest rate - and sometimes is even necessary in today's market. Fannie Mae and Freddie Mac have recently imposed more "risk-based pricing adjustments", meaning even credit scores and loan to values which in the past would have been considered very low risk, may now be subject to mandated fess by Fannie and Freddie.

Right now is still an excellent time to act, before the great low rates of today get away from us. Don't try to squeeze every last drop out of rates. It's an impossible task. If you are within a quarter percent of the lowest rates offered in the history of our country, you did very well. And rates always shoot up higher at a much faster pace than when they dip lower. But let's be smart - call or email for information on how we can get started right away.

Happy New Year!! Lower Rates in 2009

Horizon Financial, Inc. — Mon, 05 Jan 2009 13:25:16 -0600

Mortgage Bonds are off to a great start in 2009, as the Fed begins its planned purchase of $500B Mortgage Backed Securities. This process will continue gradually through June and should improve Mortgage Bond prices. What does this mean in plain English. LOWER RATES!!! For today, there are no economic reports due out, so Mortgage Bonds will likely respond to today's Fed announcement.

In other news, President-Elect Obama's new stimulus package will reportedly be worth $775 Billion and will include hundreds of Billions of dollars worth of tax breaks and credits for individuals and businesses. This is good news for the economy and should help with consumer confidence over time.

Currently, I recommend floating, as Mortgage Bonds ride a nice long-term trend higher. Remember, with today's continued volatility and sharp swings in the market, trusted market knowledge is as important as price in your rate decision. If you have any questions or concerns, please contact me. I'll be happy to help.

Christmas Eve Market Update

Horizon Financial, Inc. — Wed, 24 Dec 2008 11:13:07 -0600

Best wishes for a safe and happy Holiday Season!

With home loan rates at historic lows, there has never been a better time to examine your own home loan situation and plans for the future. Sometimes human nature drives people to be a little greedy and attempt to wait for even lower rates before acting...but the opportunity cost of missing the savings that could be benefited from right now - by waiting for something that may never happen - could quickly mount up into thousands of dollars. Take a minute and get in touch with me. Let's take a look at your situation, and ensure you are saving all the money that you can, and positioned correctly for your future home and financial plans.

Looking ahead to the new year, I do see Bond prices revisiting the highs seen last week and for rates to improve, but it will likely continue to be volatile. For now, I recommend floating. Merry Christmas!

30 Days To Close? Not So Fast.

Horizon Financial, Inc. — Tue, 23 Dec 2008 10:01:10 -0600

In late-November, the Federal Reserve pledged $600 billion to buy mortgage-backed securities. The announcement drove down mortgage rates and started the Refi Boom.

Then, the Federal Reserve made a second series of statements after its scheduled meeting last Tuesday, causing mortgage rates to plunge again. This started the Refi Boom's second wave.

Because of the surge in refinance activity, mortgage lenders are "backed up"; initial file reviews are taking up to 12 business days in some cases.

Typically, this process takes 2 days.

Underwriting delays are problem for refinancing Americans because when a mortgage rate is locked, it's most often locked for 30 calendar days -- the standard Rate Lock Agreement contract length. If the mortgage doesn't close within those 30 days, the applicant must either pay an "extension fee" to preserve the lock, or risk losing the rate altogether.

30 days may seem like a long time, but let's consider a few external variables:

December 24, 25, and 26 plus January 1 and 2 are lost to holiday
December 27, 28 plus January 3, 4, 10, 11, 17, and 18 are lost to weekends
January 19 is lost to federal holiday
3 days are lost to the Right To Cancel clause

This leaves 13 days to get from Application to Closing, and of those 13 days, 12 of them are being spent on the initial review. A 30-day rate lock, in other words, may be an inadequate agreement with some mortgage lenders. A 45-day agreement may be required instead.

Typically, 45-day rate locks carry higher rates or higher fees, versus their 30-day counterparts. This amounts to a "tax" on borrowers, a result of the nation's rush to refinance en masse.

As always, the best way to preserve a rate lock is to be as responsive as possible to the process. Return paperwork when asked, schedule appraisals immediately, and arrange to signing closing paperwork on the first available day.

With mortgage rates low, application volume -- and underwriting turntimes -- should remain high into early-2009.

Effective December 13, 2008, Some Conforming Mortgages Will Require Larger Downpayments To Get Approved

Horizon Financial, Inc. — Sat, 13 Dec 2008 16:00:08 -0600

In an effort to limit risky borrower behavior, Fannie Mae has announced a new round of mortgage guideline changes .

Unlike previous its previous 20-plus updates that raised income requirements and minimum credit scores (among other changes), Fannie's latest guideline tweaks focus on the value of its underlying mortgage assets -- home equity.

Effective December 13, 2008, Fannie Mae will require larger equity positions on some of its insured purchases and refinances.

A few of the updates include:

Limiting primary residence, cash out refinances to 85% loan-to-value
Requiring 10% downpayments on second/vacation homes
Requiring a 25% equity position on all investment property refinances

And, while the above changes represent 5 percent equity increases over the current mortgage guidelines, some of the other updates call for increases of as much as 20 percent.

As we head into the election and Congress mulls over another economic stimulus package, it's unclear if mortgage rates will move higher or lower as we close out the year. We do know, however, that getting approved for a conforming mortgage will, in general, be harder come December 13, 2008.

If you're finding yourself on the fence about your next move -- whether it's to buy or to refinance -- consider taking the necessary steps before the guidelines change.

Low, low mortgage rates don't mean much if you don't have enough home equity to get a home loan approval.

(Image courtesy: The New York Times)

The Truth About Those 4.5% Mortgage Rates You Keep Hearing About

Horizon Financial, Inc. — Thu, 04 Dec 2008 12:23:05 -0600

Business television is abuzz this morning with talk of "4.5% mortgage rates"; this clip ran on NBC Today. The news stems from a leaked story the U.S. Treasury will intervene in the mortgage market, lowering rates a full percentage point below current levels.

As cited by every journalist in every publication, however, the story is 100% speculation. Naturally, that doesn't stop the press from covering it. When hope for homeowners gets spread in this manner, it's important to remember some facts:

The Treasury doesn't set mortgage rates -- Wall Street traders do. Historically, rates are based on the Supply and Demand for mortgage-backed bonds.
Treasury intervention doesn't guarantee low rates. That mortgage rates are up by a .25% since last week proves it.
Zero details about the plan have been confirmed, quoting CNBC. Everything you've heard about 4.5% rates is a guess at this point.

But, perhaps most importantly, nearly every analyst interviewed has expressed a belief that a Treasury-sponsored stimulus would apply to home buyers only. Homeowners wanting a refinance, in other words, would be ineligible.

Mortgage rates are very low today compared to where they've been in 2006, 2007 and 2008. If you think your mortgage rate is too high for this market, reach out to your loan officer to review all of your options. If rates really do reach 4.5%, you can always refinance again later.

You Locked In A Low Mortgage Rate -- Now You've Got To Close On It

Horizon Financial, Inc. — Tue, 02 Dec 2008 16:28:01 -0600

Each Wednesday, the Mortgage Bankers Association releases its Weekly Applications Survey, a detailed look at new mortgage applications submitted over the previous 7 days.

This week's report will reveal what most of us already know -- plunging mortgage rates created a flood of mortgage activity.

If you're among the many Americans taking advantage of today's low rates, don't forget that when your rate was "locked", it was locked with an expiration date.

Most likely, that rate lock is for 30 days.

And, while 30 days may seem like a long time, it's not. Especially because rate locks made prior to Thanksgiving lose a combined 14 days to weekends and holidays, plus another 4 days to the Right To Cancel clause.

A 30-day rate lock, therefore, yields just 12 "working" days in which to underwrite and approve the mortgage and that's not a lot of time at all.

Making matters more difficult, many lenders are ill-equipped for boom.

Not only has staff been pared down in expectation of a slowing economy, but December a prime vacationing month, too. Lenders are short-staffed at a very inopportune time.

So, for active refinancing homeowners, the best way to preserve a 30-day rate lock is to be as responsive as possible to the process:

If paystubs are requested, return them on the same day
If a home appraisal is needed, schedule the appraisal immediately
If a closing date is scheduled, don't postpone it by a day

As mortgage rates hang near 3-year lows, the number of refinancing homeowners nationwide will grow, further taxing lenders and their staff. If you already have a loan in process, be pro-active about it to prevent your 30-day rate lock from expiring.

Looking Back And Looking Ahead : December 1, 2008

Horizon Financial, Inc. — Mon, 01 Dec 2008 20:51:56 -0600

Government action fueled a mortgage market rally last week, leading mortgage rates lower for the second consecutive week.

Despite soft housing numbers and evidence of a slowing economy, mortgage rate shoppers found reason to celebrate:

Citigroup was "rescued"
Wall Street liked the new economic team
The government pledged $600 billion to buy investment-grade mortgage bonds

These 3 elements helped drive mortgage rates to their lowest levels since January 2008 -- in some cases shaving a full percentage point off the offered rate.

Homeowners responded to the dip and refinance activity reached "a frenzy". As evidence, at least one national mortgage bank reported more loans were locked on Tuesday, November 25 than for the first 24 days of the month combined.

However, low rates rarely stick around.

The last time rates fell like they did last week, markets recovered within a week and rates returned to normal. This week provides ample chance for that to happen again.

Throughout the early part of the week, 5 members of the Fed will make public appearances, including Fed Chairman Ben Bernanke. With the Fed's next meeting scheduled for December 15, markets will be looking for clues about how the Fed may change the Fed Funds Rate.

When the Fed Funds Rate falls, mortgage rates tend to rise on the news.

Then, on Thursday, retailers start announcing their "same store" sales figures for November. This will clue us in to the true health of the economy because consumer spending accounts for two-thirds of it. If same-store sales are dramatically lower, expect calls for a large Fed Funds Rate cut.

And lastly, Friday brings us the jobs report. As terrible as the employment reports have been this year, it will take an especially higher number of jobs lost in November, or an exceedingly high Unemployment Rate to have much of an impact on mortgage rates.

This month, weak jobs data should be harmful to mortgage rates because more out-of-work Americans may lead to more mortgage defaults nationwide, plus additional Fed Funds Rate cuts.

(Image courtesy: The Wall Street Journal Online)

Mortgage Rates Fall

Horizon Financial, Inc. — Wed, 26 Nov 2008 13:27:03 -0600

Like everything else on Wall Street, mortgage markets are based on supply and demand. When demand outweighs supply, mortgage rates fall.

So, Tuesday, when the government unexpectedly announced a $500 billion budget for buying mortgage debt from Fannie Mae and Freddie Mac, the demand side of the mortgage market ballooned.

The surprise demand helped push mortgage rates to their lowest levels since January 22, 2008. 30-year fixed mortgage rates were down by as much as three-quarters of a percent Tuesday before retreating higher.

Not coincidentally, January 22, 2008, was the date of another unexpected government intervention -- a surprise 0.750 percent Fed Funds Rate cut that was meant to spur the economy forward.

Interventions like these are a big reason why predicting mortgage rates is tough business -- just when you discover the market's balance point, an outside force shifts that balance, creating tremendous amounts of uncertainty about the future.

Uncertainty on Wall Street is typically bad for mortgage rate shoppers because it leads to high levels of volatility. Look at the trading pattern from Market Open to Market Close yesterday:

8:30 AM ET: Markets open with rates falling on the news
10:00 AM ET : Rates fall more on momentum trading
12:00 PM ET : Rates level at their lowest levels of the day
2:00 PM ET : Rates rise as profit-taking begins
3:30 PM ET : Rates rise more on momentum trading
4:00 PM ET : Markets close with rates down by half

Again, not coincidentally, this is the exact trading pattern from January 22, 2008. On that day, rates were at their lowest about 3 hours into trading, and then consistently rose all the way into Market Close -- just like we saw Tuesday.

Unfortunately, in the 30 days that followed January 22, mortgage rates rose from a 3-year low to a 3-year high. And, it's not to say that the same thing will happen from now through December 25, but trading patterns have a tendency to repeat themselves over time.

Mortgage markets seek balance and when there's a dramatic shift, chaos can creates opportunity. Tuesday's $500 billion pledge added new demand and shocked the mortgage market system. Before long, it recovered to find balance.

As of today, mortgage rates are still hovering near their 3-year lows so if you haven't spoken to your loan officer about a refinance, consider calling today.

Housing Starts data is good news for home sellers

Horizon Financial, Inc. — Fri, 21 Nov 2008 16:07:30 -0600

This weeks Housing Starts data is good news for home sellers. Housing Starts fell in October to their lowest levels since 1947. Building permits were also down. Fewer homes under construction results in less inventory for home buyers to select from. Decreasing supply will add a strong support floor to home prices. Sellers may feel less pressure to lower asking prices. When supply is less than demand, prices increase, and vice verse.

(Image courtesy: The Wall Street Journal)

2009 FHA Loan Limits

Horizon Financial, Inc. — Thu, 20 Nov 2008 16:10:53 -0600

Effective January 1, 2009, FHA loan limits revert to pre March 2008 levels.

FHA home loans are mortgages made by private lenders and insured by the federal government.

2009 FHA loan limits (in most areas of the country) are:

1-unit : $271,050
2-unit : $347,000
3-unit : $419,400
4-unit : $521,250

Note that the loan limits don't apply to all areas of the country equally. Higher-cost regions feature higher loan limits, based on typical home values.

The official FHA announcement published all of the counties with access to higher loan limits, spread across two spreadsheets. The first spreadsheet lists each county at the $625,500 maximum; the second list is everyone else.

If your home county is on neither list, use the "base" numbers above.

Today's Rates Video

Horizon Financial, Inc. — Tue, 18 Nov 2008 14:46:47 -0600

Click here for today's rates.

Simpsonville Home Values Stable

Horizon Financial, Inc. — Tue, 18 Nov 2008 14:44:08 -0600

For the hundreth time, all real estate is local. Zillow.com reported today home values in Simpsonville, SC decreased a paltry -.11% in the third quarter of 2008. Great News for buyers and sellers in Simpsonville. Our market, although not unscathed, is certainly much stronger than most media folk would have you believe. This number is substantially lower than the -9.7% decrease nationwide. Often, perception is realty. It is tough dealing with home buyers and home sellers in a down market. Use this data to keep them informed of local conditions.

Wholesale Inflation Down

Horizon Financial, Inc. — Tue, 18 Nov 2008 14:31:55 -0600

The Producer Price Index (PPI) released today shows the biggest drop in wholesale inflation since records began in 1947. Most of the decline can be attributed to the 25%+ drop in gas prices. However, the Core PPI ( which excludes food and gas ) increased more than expectations. The year-over-year Core PPI shows the highest reading in nearly 20 years. In general, deflation, not inflation, is of immediate concern.

November 17, 2008 - Market Update

Horizon Financial, Inc. — Mon, 17 Nov 2008 11:32:53 -0600

Another volatile week in this crazy market. Retail Sales dropped for the 5th straight month. Expect a dismal holiday shopping season ahead...probably the worst retailers will have seen in a long time. Circuit City filed for Chapter 11 Bankruptcy, and will be closing 150 stores. We also learned of poor economic reports from Nordstrom, Best Buy, Macy's, Wal-Mart, General Motors and Intel. And bad news continued on the job front, as Initial Jobless Claims reported the highest number of first time unemployment claims since 2001. Jobless claims have reached their highest level in 25 years. As a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. That didn't hold as rates ended slightly higher than last week.

This morning, Mortgage Bonds are near unchanged levels and hover near the 200 day Moving Average. I would recommend floating. However, if you find a rate and payment combo that suits your budget, consider locking.

Retail Sales Plunge

Horizon Financial, Inc. — Fri, 14 Nov 2008 10:06:03 -0600

Retail Sales numbers fell for the fourth straight month and plunged to their worst level since record keeping began in 1992. This is important information because it indicates a bad outlook for the retail industry overall and comes as we head into what looks to be the worst holiday shopping season in a long, long time.

How The New Good Faith Estimate Form Can Help You Save Money On Your Mortgage

Horizon Financial, Inc. — Fri, 14 Nov 2008 09:26:42 -0600

To help demystify the mortgage process, the federal government is giving the much-maligned Good Faith Estimate document a makeover. Effective January 1, 2010, the current, 2-page form will be replaced by a new, easier-to-understand version, spanning 3 pages.

The biggest strength of the new Good Faith Estimate is that it uses everyday English to explain how the mortgage works. For example, in one section titled "Loan Summary", the Good Faith Estimate specifically answers:

What is your interest rate?
Can your interest rate rise?
Does your loan have a prepayment penalty?

Using today's disclosures, the answers are spread across 3 separate forms.

In addition, the new-look Good Faith Estimate identifies what charges are legally allowed change at the time of settlement, and how a mortgage applicant can opt for higher fees in exchange for a lower mortgage rate, and vice versa.

These educational elements are lacking from the current model.

But for all of its clarity, the Good Faith Estimate doesn't address the issue of suitability. As in, is this the right loan for the right borrower? The new Good Faith Estimate won't prevent homeowners from choosing "bad loans" -- it will only educate them about the loan's facts.

For suitable advice -- as always -- talk with a trusted mortgage professional who will both listen to your needs and help you make plans for them. Getting the "best terms" on an unsuitable loan can be far worse that getting great terms on a loan that fits.

4 States Account For 51 Percent Of The Nation's October 2008 Foreclosures

Horizon Financial, Inc. — Thu, 13 Nov 2008 09:33:32 -0600

Foreclosure is a hot topic among the press lately. It's hard to turn on the television or open up a newspaper without seeing a story about it.

But what's most interesting about foreclosures is that they appear to be concentrated in certain areas of the country.

According to the foreclosure-tracking service RealtyTrac, 4 states accounted for more than half of nation's foreclosures last month.

And those 4 states -- California, Florida, Arizona, and Nevada -- share some very similar characteristics including:

Their respective popularity with retirees and real estate investors
Their large home value increases earlier this decade

In looking at the rest of the country's foreclosure data, the remaining 46 states combined accounted for just 48.8 percent of October's foreclosures.

That's 1.06% per state on average.

Now, this isn't meant to diminish the impact of foreclosures on the economy -- quite the opposite. Foreclosures harm to the national housing market because most mortgage lenders are national. But, we highlight statistics like this to show that the foreclosure "problem" isn't so bad in most parts of the country, relative.

Furthermore, mortgage lenders are intervening to slow the flow of defaults nationwide. Following the lead of JP Morgan and Bank of America, CitiMortgage just announced a sweeping plan to help homeowners avoid default and keep their homes.

In a way, for as good as this news is for homeowners, it's equally bad news for home buyers. As the number of foreclosures decrease in any given market, it reduces the inventory of homes for sale. Lower supply levels often lead to higher sale prices and less room to negotiate. And this may be what the banks are trying to accomplish.