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Get Ready for Smart Money Week Iowa!

Tyler Osby (Four Legacies Mortgage) — Tue, 08 Apr 2008 09:27:24 -0500

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That's right! Starting April 5th, Money Smart Week begins. Money Smart Week is a week long event focused on educating consumers on how to more effectively manage their money. We like to say teaching consumers how to keep more of what they make!

At Four Legacies Mortgage, we're huge advocates of financial literacy. This is why we have decided to sponsor this exciting week of financial education. As always, we'll be offering a jam packed week of free classes/seminars and we hope you can make it to one! Here is our personal schedule of activities for next week:

Monday, April 7^th at 7pm-8pm - Improving Your Credit Score - With everything that credit score influences now its more important than ever to understand how it is calculated and how you can take control of it. We promise to teach you how to improve inaccurate records, manage your debt so your credit score is at its peak and lead you to save thousands of dollars in unnecessary interest over your lifetime.

Tuesday, April 8^th at 4:30-5:30pm -How to Get Debt Free and Stay Debt Free Forever - With a national savings rate of -2% we think its more important than ever to know how to be debt free. We promise to show you how to pay off debt quickly and put you on track for an abundant life that you deserve.

Thursday, April 10^th at 7pm-8pm -Building Wealth Through Real Estate - Whether you're a seasoned homeowner or looking to buy your first home it is extremely important to own real estate right. We will show you how to let your money work for you and build wealth over time through the ownership of real estate.

Friday, April 11th at 4:30pm-5:30pm - How to Plan and Pay for College - With the average college education cost being $50,000 its more important now than ever to plan for college expenses. Whether there is a need 18 years from now or right around the corner - we will show you strategies that will fund your child's education.

If you can't make our activities, there are still a long list of activities to get involved in. Please get in touch with me if you've got anything I can help you out with!

All of our free classes are held at 939 Office Park Rd. in West Des Moines, Iowa. If you'd like to come out, we'd love to have you. Please RSVP if you're planning on coming out. We love to have a seat warmed up for you and a beverage ready for your arrival.

We hope to see you soon!

Forbes Ranks Des Moines #4

Tyler Osby (Four Legacies Mortgage) — Tue, 08 Apr 2008 09:24:06 -0500

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In case you missed it - Forbes published the 10 Best Cities for Business and Careers. Des Moines ended up being ranked #4 in the nation for best metros!

It's not that surprising when you consider the numbers. We've had huge job growth (26,000 in the last five years), a low unemployment rate of 3.4% and our business costs are 10% below the national average! Take these numbers and an extremely low cost of living and you have one hot place for businesses to grow.

If you're an Iowan - you should be proud. If you're not an Iowan - you should seriously consider!

Here are the top ten metros:

Iowa continues to be a highly competitive place to raise a family and grow a business. If you're considering the move, you should get in touch with me!

**Click Here for the Original Post on WealthWithMortgage.com!**

Median Home Prices In Iowa - 2006 vs. 2007

Tyler Osby (Four Legacies Mortgage) — Tue, 08 Apr 2008 08:47:39 -0500

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Have you wondered what home prices in Iowa have been doing? I know as a homeowner, I have.

I was getting my car washed on Saturday, and picked up the Des Moines Register business section and found an interesting article that included median prices across the state in 2007 and their change since 2006. Here's a quick Tyler Osby summary of the chart I'm talking about...you can tell by the fuzziness. (I have to do this since the Des Moines Register isn't cool enough to put it on their 'online article')

Again, these numbers are based on median home prices. Statistics can be manipulated to look super sexy in one scenario and not so sexy in another. Take into consideration if there are many more higher priced homes (say the handful of homes in Des Moines worth over 1 Million) sell in 2006 and not in 2007 it could really hammer those numbers (at least for 'median home prices').

If you want to see some specific statistics ran, just let me know. I know plenty of people in the real estate business that like crunching numbers as much as I do.

I have to call the Register out on being a few weeks late with the article I based this chart on. The article was titled 'Down Payment Cost May Grow for Borrowers'. If you subscribe to my blog, you saw this coming weeks ago. Paula Lavigne, you're on notice (a little Stephen Colbert humor). If Paula does happen to find this though - I really enjoyed her story and it was well written and researched. Keep up the great work. I'd be happy to help keep you up on how the mortgage market is effecting Iowans. The easiest way is to just subscribe.

Here's the original article from The Des Moines Register.

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Rate Moving Economic Reports for the Week of April 7th

Tyler Osby (Four Legacies Mortgage) — Tue, 08 Apr 2008 08:40:59 -0500

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It's important to recognize that advice is extremely valuable when seeking advice on a mortgage. The right advice can literally save you thousands of dollars, while the wrong advice can cost you the same. I'm talking on this subject because too often when we're asking the wrong questions when shopping around.

I'll be the first person to tell potential clients to do their homework on potential lenders. The important thing to consider is the types of questions you should be asking when shopping around. Here are some questions to consider asking when shopping for a loan:

1) What are mortgage rates based on?
2) What is the next economic report or even that could cause mortgage rates to move?
Professionals have these reports at their fingertips and spend their time keeping up to date on them. I am constantly reviewing upcoming reports and I even act as somewhat of a resource with my feed provided by Twitter.
3) When Ben Bernanke (Fed Chairman) decides to 'change the rate', what influence does it have on mortgage rates?
4) Do you have access to live, real time, mortgage bond quotes?

In the spirit of educating consumers looking for mortgages, here is this week's answer to the 2nd question:

As always, if you have questions - please get in touch!

It's my life goal to help more Americans obtain financial freedom, let me know how I can help you.

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Real Estate Market Watch for Des Moines, Iowa / Week of March 29th, 2008

Tyler Osby (Four Legacies Mortgage) — Tue, 08 Apr 2008 08:38:05 -0500

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Numbers are always extremely important to consider when buying, selling and financing a home. Each week, I receive a weekly market watch update providing the breakdown of the activity from last week. The report is provided by Heather Barglof at Peoples Company. As I continue to get them, I will continue to post them (with her permission of course). Here is her brief market commentary this week:

"Over the past couple of weeks we have seen many more people list their homes as we move into the spring season. We are right where we were a year ago as far as listings, however things aren't selling like they were a year ago. If you or any of your clients are looking to purchase a home, now is actually a great time to do so. Selection is high and the cost of ownership is low right now and will only be increasing over the next year."
(Click to hugify)
I hope you enjoy the statistics as much as I do!

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Washington Mutual Decides to Exit Wholesale

Tyler Osby (Four Legacies Mortgage) — Tue, 08 Apr 2008 08:34:17 -0500

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Announced (late) yesterday, Washington Mutual will be exiting the wholesale business and changing to a strictly retail business model. The decision was extremely surprising to me after a recent conference call I was involved in. In the call, WAMU discussed some of their plans the wholesale division. These changes were specifically targeted at reducing fraud issues, verifying benefit to borrower, etc.

I guess since they've announced they are closing, It doesn't really matter - does it?

For you're entertainment, I googled 'WAMU' under the image search feature.. This was the first photo that popped up, not kidding. I have to be honest, it's not the way I feel about it.. but it definitely took the edge off. I almost fell out of my chair laughing. So, I'm going to post it for you.. I hope you find it comforting (or something like that). Seriously, I'm still laughing.

Here's the official announcement to brokers:

"Today, WaMu announced significant changes affecting our Home Loans business. As part of this announcement, and consistent with the company's retail focused strategy, WaMu has made the very difficult decision to exit the Wholesale lending business. In order to have an orderly shut down, we have determined the following critical dates:

April 10, 2008: Last date to submit new applications or locks.

May 31, 2008: All WaMu Wholesale Sales Centers will be closed by this date.

June 13, 2008: Generally, all loans must be closed/funded by this date. We will, however, honor outstanding loan commitments with expiration dates after June 13, 2008 up until the expiration dates set forth in those commitments.

June 30, 2008: All WaMu Wholesale loan fulfillment centers (LFCs) [San Diego, CA; Pleasanton, CA; Downers Grove, IL; and Jacksonville, FL] will be closed by this date.

Current Pipeline:
.. Locked loans with an expiration date prior to June 13, 2008 may be extended per current policy provided the loan is closed/funded by June 13, 2008.
.. Effective April 8, 2008, a condition will be added to each new commitment which will supersede the normal expiration provision.
.. Floating loans must generally be locked, closed/funded by June 13, 2008. Again, they may only close and funded after June 13, 2008 if a loan commitment has already been issued and the commitment expires after June 13, 2008.
.. If a loan is locked with an expiration date past June 13, 2008, it will not be honored unless a loan commitment has been issued and the commitment expires after June 13, 2008.
.. We are unable to make any exceptions regarding the closed/funded date of June 13, 2008. Again, however, we will honor outstanding commitments with commitment expiration dates beyond June 13, 2008.

WaMu will continue to originate loans through Consumer Direct and our Retail Lending channel.
Your Account Manager or Sales Manager will be available to support you while we transition out of this business.

This is a very hard day for WaMu and all of Wholesale Lending. We have appreciated your partnership and support over these many years and wish you the best as we move on to new opportunities."

I'm extremely disappointed with Washington Mutual's decision to exit wholesale. They were one of the most systematic lenders to work with and they seemed to have things figured out. They will be missed.

Now everyone's wondering, who's next?

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So, Apparently The Fed Works on Sundays?

Tyler Osby (Four Legacies Mortgage) — Sun, 16 Mar 2008 22:23:40 -0500

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In a surprise move, this afternoon (Sunday afternoon)... The Fed announced two changes to the discount rate. The first change, the most surprising one - was an expansion of it's lending to securities dealers for up to six months. The securities will join the banks that the Fed worked directly with before.

The second part of the announcement was reducing the discount rate from 3.5% to 3.25%. This cut is said to have part to do with the announcement of JP Morgan Chase & Co's purchase of Bear Stearns. There have been many speculators calling some of the recent moves of the Fed 'bailouts'. I just think we're seeing the fed work in ways we've never seen them work before.

The Wall Street Journal said it the best:

'Since the current credit crisis began in August (2007), the Fed has taken even more innovative steps to push its remedies beyond the banking system.'

It's interesting to see the Fed continue to stop in and make moves to inject liquidity into the financial markets. What will they do next?.... No, seriously.. WHAT WILL THEY DO NEXT?

You're guess is probably as good as mine. I'm betting on a 3/4% cut to the Fed Funds Rate (FFR) on Tuesday.

Let's make a connection of what all this means to mortgage rates in the short term (as it's the question I'm most often asked). When a change to fiscal policy is made, it normally takes 6 months to see the effects of it. With the FFR moving down as quickly as it has, we'll probably be facing nasty inflation numbers down the road. As investors realize this, they'll pull money out of mortgage bonds (smart ones already have) and back into stocks. Until we start seeing some fed hikes (it's a ways out there), we're going to see mortgage rates slowly increase.

However, we'll still continue to see the crazy volatility that we've been seeing. Sometimes the market is emotional instead of logical. Make sure that you're partnered with a mortgage planner that is watching the market closely so you can capitalize on the opportunity when it happens.

Related Stories Worth Reading:
Federal Reserve Statement on Rate Cut
'Fed acts Sunday to prevent global bank run Monday' on MarketWatch
'Fed Cuts Rates, Extends Loans to Calm Markets' on Wall Street Journal

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Des Moines, Iowa - Real Estate Market Watch 3/3/08 - 3/9/08

Tyler Osby (Four Legacies Mortgage) — Sun, 16 Mar 2008 17:28:09 -0500

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"There was a jump in new listings again this week which increased our overall inventory above the 2 month running average. We are still trending down from where we were last year, but as we move into spring our sales numbers should increase from where they are now."
(Click On Picture To Hugify)
I hope you enjoy these updates as much as I do!
**Click Here to See the Original Post on WealthWithMortgage.com!**

Higher Cost Mortgages? Fannie Mae Says Yes.

Tyler Osby (Four Legacies Mortgage) — Sun, 16 Mar 2008 17:22:59 -0500

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Once again, there is some re-pricing of risk going on. If you have recently applied for a loan, you may notice that you're rate is higher than the 'going rate' you're seeing in less than honest ad's. Fannie Mae has made the decision to increase the rates on what they consider higher risk loans. As I've mentioned in recent posts, we're beginning to see a lot of credit score driven adjustments.

If you have less than a 720 credit score, you will have an adjustment against the 'base rate' that you'd qualify for. I can almost promise that the longer you wait to get a loan, the larger these adjustments will get. All of these adjustments were determined on extremely complicated statistics and analysis, so don't get too mad. Obviously, Fannie Mae believes these loans have a better chance of not performing (meaning they are more likely to end up in foreclosure).

You'll find Fannie Mae's announcement at their website. I've taken screen shots directly from the announcement so you can see the breakdown of the 'loan level price adjustments'.

The first chart is for purchase loans and refinances without any cash out:

(Click On Chart To Hugisize)

The second chart is for cash-out refinances:

So what does this mean to you, the customer?

Quick scenario: Let's say you're buying a home for $300,000 and you're financing 90%. You have a 660 credit score, you have the income and assets to qualify for the loan.

Here is an example before the loan level price adjustment took place (Before):

$270,000 Loan
30 Year Fixed Amortization
6% Rate
$1618.79 per month (principal and interest)

Here is an example after the loan level price adjustment took place (Now):

$270,000 Loan
30 Year Fixed Amortization
6.25% Rate
$1,662.44 per month (principal and interest)

A difference of $44 more each month! As you can see with the adjustments, rates could be seriously worse if your credit score is below 660.

If you need help determining how these changes effect you, or how to improve your credit score to qualify for a better rate - please let me know. I'd be glad to help!

**Click Here to See The Original Post on WealthWithMortgage.com!**

Another Example of Why Real Estate is LOCAL!

Tyler Osby (Four Legacies Mortgage) — Sun, 16 Mar 2008 17:20:17 -0500

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Just as we don't get one national forecast for weather, we also shouldn't get a national forecast for real estate. Too often, Iowans get caught up in the national numbers and with the declines in property values on the coasts. If you take a closer look, you'll realize our market really isn't in the recession that other markets are suffering. To be fair, no - real estate isn't as sexy to talk about as it was 2 years ago. However, let's be realistic - things aren't THAT bad... really, they aren't. Let's start acting like it.

According to an update from the Des Moines Business Record today, Iowa's unemployment rate dropped from 3.8% to 3.6% in January. Also notable, the number of workers increased 9,800 in January. Elisabeth Buch, Director of Iowa workforce Development said:

"The Iowa labor market grew at a moderate pace in January, while the national economy showed serious signs of faltering."

Specifics on job growth are as follows:

3,900 jobs gained in the service sector
1,600 new jobs in transportation and government
1,600 new jobs in trade
800 new jobs in professional and business services
400 new jobs in the finance industry
1,000 jobs were lost in construction
900 jobs were lost in manufacturing

Again, don't get caught up in the media hype. Iowa may have a slight slowdown in our real estate market (watch our weekly market watch), but overall, things aren't as bad as they may seem in the news. Yes, foreclosures will continue to be a problem.. and if I don't already sound like a broken record - things will continue to get worse with foreclosures before they get better.

If you're an real estate investor in Iowa, you should be out looking for deals. I have numerous clients that are currently building their retirement plan through real estate, you should be too.

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PMI Companies Decide to Shuffle Guidelines - You Need To Read This!

Tyler Osby (Four Legacies Mortgage) — Sun, 16 Mar 2008 17:17:18 -0500

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If you haven't heard yet, there have been some BIG changes at the private mortgage insurance companies. Since PMI companies are the real risk takers when financing over 80%, they've decided to really tighten up their guidelines in the past two months.

Whether you're a borrower looking for answers, or an originator trying to make something of this mess. You've come to the right place. I've been doing a TON of research to get guidelines updated as of today. I must warn readers that these guidelines can change at a moments notice and most likely will. So take the information with caution and check directly with mortgage insurance companies (customers, have your loan officer do this) to make sure that the loan still qualifies. Often, we cannot order mortgage insurance until we have the loan underwritten. So the faster you can move, the better off you are.

Real quick - Mortgage Insurance is a product that lenders require borrowers to carry to insure them for the amount lent over 80% of the purchase price on purchases or appraised value on refinances. If you can't get PMI, you can't get a mortgage loan - period.

FICO (credit score) based risk is the new way things are now done in the mortgage industry. As mentioned before, we've seen the guidelines changes for the mortgage insurance specifically on that factor (I'm sure we'll see Fannie and Freddie do the same thing soon). Here's the readers digest version of the changes:

For Owner Occupied Loans with an 'Approve/Eligible' (Top Teir Fannie Mae Approval)
Max LTV 80.01- 95% need a minimum score 620 (Purchase or Rate/Term)
Max LTV 95.01-100% need a minimum score of 680 (Purchase or Rate/Term)
Max LTV 80.01-90% need a minimum score 680 for Cash Out. (Effective March 14)

For Owner Occupied Loans with a 'Level' approval (Less Than Cream of the Crop, a Growing Pool)
LTV's less than 80% need 620 minimum score
Max LTV-80.01- 95% need a 660 minimum score (Purchase or Rate/Term)
Max LTV-80.01- 90% need a 680 minimum score for Cash Out.
** There are no 'level' approvals on non-owner occupied properties with any LTV **

For Non-Owner Occupied with an 'Approve/Eligible'
Max LTV 80.01-90% need a minimum score 660 (Purchase or Rate/Term)
Max LTV 80.01-90% need a minimum score 720 (CASH OUT)

If you're a detail person, here is the full table w/ company specific information:

(Click to Hugisize)

If you're a borrower currently looking for answers, I hope you find this summary beneficial.

If your current loan officer has:

Abandoned you
Won't call you back
Turned your loan down
Hasn't mentioned the MI guideline changes
Doesn't understand the recent changes
...fill in the blank of a horrible quality or problem

Please give me a call or e-mail me. I'd love to be a resource for you and help you find a home for your home loan!

**Click Here To See The Original Post on WealthWithMortgage.com!**

Did You Miss The Bus Last Week? Don't Next Time.

Tyler Osby (Four Legacies Mortgage) — Sun, 16 Mar 2008 17:13:55 -0500

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If you've been following me on Twitter, you'd know that rates have increased as much as 1/2% since Monday. If you haven't been following me on Twitter, today - you might consider starting. The bus of low mortgage rates has left the station and it'll be a while before it returns.

To understand why rates have been climbing this week, you first have to understand what mortgage rates are based on. Mortgage rates directly correlate with value of mortgage backed securities (MBS). Rates are NOT based on the 10 Year T-Note, stock market, or the fed funds rate (FFR). These common misconceptions are due to the lack of visibility of MBS. In order to receive live bond quotes, you have to pay to subscribe to a service (and it's not cheap).

Ok, now for the specifics on WHY rates have increased (so much) this week. When you buy a bond (like a mortgage backed security), you buy it and it will have a pre-determined amount paid over time. If inflation is creeping up, that pre-determined payout is going worth less to the owner of that bond in the future. Make sense? When investors see inflation as a concern, they sell off their mortgage bonds and put their money elsewhere.

The higher the value of a mortgage backed security, the lower an interest rate will be on a mortgage. If the value falls, rates increase. As I had mentioned, some individuals in my industry give advice to follow the 10-Year T-Note the same way I follow mortgage bonds. I'm not one to laugh at other's expense (actually, I sort of do), but take a look at what happened today (especially if you were watching the 10-Year T-Note):

A loss of 103 basis points for MBS is a big one. Rates worsened between 1/4% and 1/2% just Thursday. If you or your loan originator were following the 10-Year T-Note, you missed the bus... and you will be spending thousands of dollars more over the life of your loan because of some bad advice.

Are you and your loan officer watching the right indicators? Do you know when the best time to lock is? Is someone managing your mortgage? Are you receiving top notch advice? Does your lender have access to live, real time, mortgage bond quotes?

If you answer no to any of these questions, we should chat. I love this stuff, seriously. I look like a kid at a candy store when I'm watching bond quotes... It's sick, it's sad and you should take advantage of it.

**Click Here to See the Original Post on WealthWithMortgage.com!**

Iowa Mortgage Help Hotline Is Announced

Tyler Osby (Four Legacies Mortgage) — Sun, 16 Mar 2008 17:10:41 -0500

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Announced earlier last week, 'Iowa Mortgage Help Hotline' will assist Iowan homeowners that are currently struggling with their house payments. Recently funded by an additional $1.5 million dollar grant, the capacity will be increased on the foreclosure hotline.

"We want Iowans to call the mortgage help hotline if they are currently struggling or as soon as they think they may be headed toward financial difficulty. Our counselors have more resources available to help people who are in the early stages of mortgage delinquency. Ideally, we'd like to talk with Iowans before they miss a mortgage payment." Bret Mills, IFA Executive Director

The goal of Iowa Mortgage Help Hotline is to help 7,000 Iowans before the end of 2008. This program has been heavily promoted by Bret Mills of Iowa Finance Authority and Iowa Attorney General, Tom Miller.

Statistically speaking, nearly 50% of people who are unable to pay their mortgage never contact their lender or seek assistance from a trained counselor. Since it was established in September of 2007, the helpline has received about 8,000 calls and is presently handling about 700 cases.

If you personally would like to get help, please contact the Iowa Mortgage Help Hotline at:
1-877-622-4866 or online at http://www.iowamortgagehelp.com/.

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Tax Relief FAQ

Tyler Osby (Four Legacies Mortgage) — Sun, 16 Mar 2008 17:07:34 -0500

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First off, sorry for the short 'vacation'. I've been out and sick with the flu for the past week, still recovering as we speak.

Back to tax rebates - as you've probably heard, many American's will be getting a check in the coming months. Here are the details:

Married couples will get as much as $1,200.
Singles will get $600.
Filers with children under 17 get $300 per child extra.
Married couples must make at least $17,500, but no more than $150,000 to qualify for the rebates.
Singles must make at least $87,500, but no more than $75,000.
Seniors and disabled veterans also qualify using their social security benefits and disability income.
You must file a 2007 tax return to qualify for the refund check.
You must have a valid social security number to qualify.

If you'd like to figure out how much you should expect for your rebate, check out Kiplinger's free calculator.

If you need a copy of the tax form to file (even if it's simply for the purpose of getting the refund) here it is.

Tax season is here. Keep in mind that your tax refund checks are sent after your taxes are filed. As always, if you need more about filing taxes - I can recommend a CPA to assist you.

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Lenders Becoming More Picky, Countrywide Starts Cherry Picking

Tyler Osby (Four Legacies Mortgage) — Sun, 16 Mar 2008 17:04:26 -0500

**Click Here To See The Original Post on WealthWithMortgage.com**

When you're financing over 80% of a purchase price or appraised value, you're at the mercy of two things:

Lender Guidelines - Defined by GSE's (like Fannie and Freddie) or banks/investors (such as Countrywide or Citi Mortgage)
Mortgage Insurance Guidelines - Companies that carry some of the risk on money loaned over the 80%.

Last week, I received more guideline revisions (a common thing to get these days). I review them closely each time - but this particular update has some pretty big changes. Notably, the lender has decided to put into place minimum score requirements, requirements that Fannie & Freddie haven't even put into place yet. I think it's extremely interesting to see lenders tighten up credit requirements before the actual markets tighten them.

Here's the details on the revisions directly from Countrywide Wholesale (keep in mind, all lenders haven't put these rules into effect):

Guideline Changes for LTVs > 80%

All transactions:
- Min credit score increased to 620*
- Cash-out:
  - Owner Occupied: Min credit score increased to 680*
  - 2nd Home & NOO: No longer allowed
  - 3-4 Units:
    - No longer allowed
    - LTVs 95.01 - 97%:
      - Min credit score increased to 620*
      - Fixed Rate products only (Interest Only not allowed)
      - ARM Terms > 5-Years only (Short term & 3/1 ARMs not allowed)
      - SFR & PUD only
      - LTVs > 97%:
        Min credit score increased to 620*
        Fixed Rate products only (Interest Only not allowed)
        ARM Terms > 5-Years only (Short term & 3/1 ARMs not allowed)
        SFR & PUD only
        
        * Greater of the posted minimum credit score or the loan program minimum, regardless of AUS approval

Like I mentioned, this isn't a blanket policy.. but it's a sign of things to come! Tomorrow, I'll touch on the big changes that have happened with PMI and the different companies that provide the coverage.

**Click Here To See The Original Post on WealthWithMortgage.com**

Fannie and Freddie Downgraded, Prepare For a Rough Landing

Tyler Osby (Four Legacies Mortgage) — Sun, 24 Feb 2008 22:20:18 -0600

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According to MarketWatch, this morning Fannie Mae (FNM) and Freddie Mac (FRE) have been downgraded from 'neutral' to 'sell' by Merrill Lynch. Apparently they are pretty bearish on the GSE's. Fannie and Freddie are supposed to be reporting numbers next week.

Here are a couple brief quotes from the Merrill Lynch report:

"Weakening macro-economic, financial market and credit trends continue to point to more financial stress than we think the market is discounting.."
"..we do not think the stocks fully reflect the severity or duration of the financial headwinds facing the companies."

I'm not extremely surprised of the downgrade, especially considering the spike in defaults and late payments. One thing continues to be sure (in my opinion), things will get worse before they get better. It's been my re-occurring theme and I'm not sure when I'll really switch sides of the fence (I really don't think it will be soon). For now, continue to be prepared for constant re-assessment of risk and guideline changes. If I were you, I'd be prepared (whatever that means) for rough news next week when Fannie and Freddie release their data.

Too much focus has been placed on 'alt-a' and 'subprime' loans. Prime saw a lot of loosening in their credit guidelines for a pretty large window of time as well. I think we've just seen the tip of the iceberg. Strap in, this could get messy.

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Thursday Blog Watch - In Case You Missed It!

Tyler Osby (Four Legacies Mortgage) — Sun, 24 Feb 2008 22:17:42 -0600

** Click Here to See The Original Post on WealthWithMortgage.com**

Together we're smarter. Sometimes, instead of plagiarizing great posts... I'd rather just direct you to them. Here is this week's finds:

How Mortgage Rates Went From (Relative) Riches to Rags in 30 Days by Dan Green @ The Mortgage Reports - This really offers a great explanation of the events that have taken place in the past month that have slowly shaped the mortgage market. One thing I must point out, Dan's not the only one that has been predicting mortgage rates would increase!
Quote of the Day: Kedrosky on Project Lifeline by Alex Stenback @ Behind The Mortgage - Always count on Alex to pick-up on great one liners from big names. Opinions differ on the governments actions. I think it will help less than some anticipate... but It's good to see an effort.
Twitter's Set Up- What's Next? by Lani Anglin-Rosales @ Agent Genius - As a fellow twitter(er) I found this post extremely helpful. I had no idea how to use this new social media tool for anything more than just posting a quick update. Pretty handy stuff I'll tell ya!
Urgent Facebook Warning by Lani Anglin-Rosales @ Agent Genius - I've heard about Facebook publishing your every move.. I thought the feature had been disconnected. (apparently it hasn't been disconnected). If you want to protect your web surfing (credit cards, website address, banking info) you should go follow this quick tutorial to avoid huge headaches in the future!

If you found something incredible.. quit hording it and share it already you punk. Post them in the comments.

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What Is Mortgage Management? Pt. 1

Tyler Osby (Four Legacies Mortgage) — Sun, 24 Feb 2008 22:14:31 -0600

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I'm often asked about what makes Four Legacies Mortgage and myself any different from our countless competitors. The truth of the matter is, I don't like the answer 'our advice is better or more timely or that we are more professional than the rest'. These things should be required to even be in consideration (even though they often aren't really there).

I would say the BIG thing that makes Four Legacies Mortgage different than anyone in our market, is that we will help you actively manage your mortgage EVEN after it is closed. We do not generate transactions in our practice, we create long term relationships with our clients. In the interest of not sounding too cheesy and sleazy, I want to be totally upfront - I'm still a regular guy.. I just happen to take my clients financial situation extremely seriously, much more than others in my profession.

So, if you've ever received a mortgage.. I've got a few questions for you:

Do you know the terms of your mortgage? (EXACT rate, length, fixed or adjustable, balance)
Do you know your credit score? ... and most importantly, Do you have a gameplan to improve it?
Do you know what your home is currently valued at?
When was the last time you heard from the mortgage lender that financed your home?
Who do you call with questions in regards to your current mortgage? Do you talk to someone you personally know?

I could keep going with questions, but I think my point is obvious here. I don't baby sit my car insurance policy. I also don't sit on e-trade all day making stock trades. I trust my team of carefully selected professionals to tell me if I need to change coverage or when to buy or sell stock. Why is it that everyone thinks a mortgage is a do-it-yourself project? I think it's because most people don't think they have a choice. If they knew, why would they choose to watch mortgage backed securities (MBS) instead of enjoying their freetime?

Truth of the matter is, I spend a lot of my time studying the market and determining which direction it's moving. I lock ahead of rate increases and know when to recommend floating to take advantage of gains. I hint at the direction via Twitter, but I don't give away the farm either. Yea, it's easy to say that we've done a good job - but check out our track record. I really am enveloped in the mortgage business, I love what I do and I love helping my clients save money over time by implementing a mortgage plan that works.

If you or someone you know has a loan that has been abandoned, please let me know. I'd be happy to step in and help manage it. At Four Legacies Mortgage we believe mortgage management should be the standard to which other lenders are held, and we're willing to work to show you why. No, we don't charge anything extra for our management services. I'd love to help you and your family implement a mortgage plan that gets you where you want to be the fastest.

Just a few weeks ago, we had a dip in interest rates of about .5%. Did you get a call? My clients under active management that could benefit from the rate reduction did. If you're located in Iowa, and have a mortgage on your home, don't wait until you miss the next big chance. Let me get you under management today!

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FHA Limits Will Be Increasing After Bush Signing Stimulus Package

Tyler Osby (Four Legacies Mortgage) — Sun, 24 Feb 2008 22:12:22 -0600

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You may have already heard, but it's done - Bush has signed the Economic Stimulus Bill. The Bill will provide tax rebates between $300-$1,200. The bill also included some changes for the lending industry.

As the bill has been passed, the loan limits for conventional loans and FHA loans will be increased once they are re-assessed. I've been shared a website to find the new FHA limits as they've been released, that is posted below. I will keep you in the loop as things move forward with the new loan limits with conventional loans. For Iowans, these changes MOST LIKELY will not effect our loan limits since we haven't seen the run up in values of our homes. I will share a link as soon as it becomes available with conventional loan limits.

Just a quick side note, I currently have access to professionally calculated estimates of the new limits. However, I cannot share it on this blog since it is copy written information from another source only available to it's members. I would however answer questions on limits one on one if you'd like to e-mail me or shoot me a question from the questionnaire section on the right side of the page. Eventually, these limits will be made public once they are reviewed and modified. I'll let you know when that happens.

The FHA limit's website is: FHA Mortgage Limits

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Project Lifeline Proposes to Help Mortgage Borrowers

Tyler Osby (Four Legacies Mortgage) — Sun, 24 Feb 2008 22:09:42 -0600

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It's NOT official, but today we're expecting an announcement of 'Project Lifeline'. These titles really are timeless huh? Back to the news, the new plan proposes to put a suspension on foreclosures (I refuse to use the word 'freeze' anymore). Project Lifeline will have these banks participating: Bank of America, Citigroup, Countrywide, JPMorgan Chase, Washington Mutual and Wells Fargo.

This new plan is targeted at helping homeowners that are seriously delinquent on their mortgage (90 days past due or more). The plan is being announced by the Treasury Department and the Department of Housing and Urban Development (HUD) later on today.

It looks as though the suspension will give lenders an opportunity to review the current terms of the mortgage. They will then modify them with the goal being to make them repayable by the borrowers. Yes, again... the lenders want to continue being in the debt collection business and not real estate management business.

If you haven't read the news already:
Warren Buffett is looking to help out bond insurers with $800 Billion.
GM Reported $722 Million Loss this morning.

Mortgage rates are hurting pretty bad this morning.... worsening as much as .25% from yesterday. I told you the technical factors would still have a big play.. Watch for Retail Sales numbers come out tomorrow. On the left bar you'll see my Twitter updates (quick market updates). Always feel free to follow me, and you'll get this stuff as soon as I think of it ;)

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Countrywide Recognizes They're Not In The Property Management Biz

Tyler Osby (Four Legacies Mortgage) — Sun, 24 Feb 2008 22:06:45 -0600

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I've been saying it for years now.. Mortgage companies are in business to collect interest income on their money, not to be property managers. The LAST thing they want to do is end up owning a bunch of property. Thanks to Morgan over at Blown Mortgage, I've been enlightened with Countrywide's most recent move to prove my point.

To help make the home loan modification possible and much more efficient, Countrywide has partnered with consumer group known as ACORN. ACORN has been known as a group that had campaigned against companies such as Wells Fargo and Countrywide for predatory lending. Interesting to see them finally working together in an effort to avoid an even more messy situation.

Here are some highlights from the agreement that is being worked on between ACORN and Countrywide.

"A systematic approach to helping borrowers with subprime hybrid ARMs
who have strong payment records but may face or are already facing difficulty with higher payments as the result of interest rate resets. Solutions in these cases include refinancing into a prime loan or a loan modification program offering a five-year extension of the rate prior to the reset, consistent with the previously announced programs. This portion of the initiative is backed up by a proactive outbound calling and mailing campaign to contact borrowers and discuss their
options.
For delinquent subprime fixed rate and ARM borrowers who want to stay
in their homes, ACORN counselors and Countrywide home retention
specialists will utilize a streamlined approach to provide affordable
home retention options that include short-term repayment plans or loan
modifications in line with identified affordability standards. Loan
modification solutions include capitalization of arrearages, an
interest rate freeze or rollback to the pre-reset rate, and, under
certain circumstances, an interest rate reduction."

As Morgan pointed out, Countrywide is making a pretty good move in showing they're serious about improving their image and ACORN lends a lot of creditability to the situation.

Stay tuned to hear more about companies making loan modifications a more common practice.

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US Senate Passes $150 Billion Stimulus Package

Tyler Osby (Four Legacies Mortgage) — Sun, 24 Feb 2008 22:04:02 -0600

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It's official. On Thursday, the Senate passed the proposed $150 billion stimulus package aimed to avoid a recession sparked by a mighty messy credit market.

The stimulus package includes tax rebates up to $1,200 for households with an additional $300 per child. To qualify, individuals must make less than $75,000 and families must have incomes less than $150,000. The rebate phases out for households that earn more than the specified limits.

In addition to the rebates, it will also increase the conforming loan limits in high cost areas. Fannie Mae and Freddie Mac will be able to purchase loans as large as $729,750 in high cost areas (175% of the current limits). The increase in conforming limits is targeted to help homeowners qualify for conventional loans (instead of the jumbo loans they originally financed their homes with).

The bill goes to President Bush this week to be signed into law. I'm about 183.4% sure this will be signed.

If you're mortgage is not currently under management, you need to get in touch with someone who can advise you if and when there is a good time to refinance your home. If you need a recommendation, I know a guy.

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Big Dream Gathering Friday Night

Tyler Osby (Four Legacies Mortgage) — Sun, 10 Feb 2008 23:55:47 -0600

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Sorry about the last minute reminder about this event (late if you're reading on ActiveRain).. but I promise - it's worth your time!

The Big Dream Gathering is an event that is for the dreamers out there. We've all got big dreams. Some of us act on them, some of us bottle them up and never let them happen. The Big Dream Gathering is an event where people can come freely, write down their dreams and post them for the world to see! The process is totally anonymous and a super positive environment.

When? Friday, February 8th from 6pm to 9pm.
Where? Lutheran Church of Hope
925 Jordan Creek Dr.
West Des Moines, IA
Why? Because it's sure to be an awesome time with a ton of positive thinkers.
Who? Anyone!
Cost? Totally free! You won't be sold a CD package as you leave either. Trust me, it's worth your time.. the price is right.

One thing I must address (because it's been asked numerous times), you don't have to be a member of the church (i'm not). This is an event totally open to the public, regardless of your religious beliefs. I really don't care what your faith is, as long as you have some.

I hope to see you there! If you'd like to hear more about the BDG or see some photos from the last event, check out http://www.bigdreamgathering.com/!

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Proposed Legislatiive Updates for Iowa

Tyler Osby (Four Legacies Mortgage) — Sun, 10 Feb 2008 23:52:32 -0600

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As always, the government is trying to modernize the laws that we abide by. There are currently three bills that I'm watching proposed here in Iowa.

House Bill 551 / Senate Bill 3107 : Agency Duty for Mortgage Brokers
In summary, this is a bill that proposes Mortgage Brokers treat a relationship as an 'agency relationship'. It continues to describe that we would be required to act in the customers best interest (wow, that's not expected already?), not receive/give/charge any undisclosed fees to a borrower. The list goes on, but this seems like a bill that would better define the obligations a mortgage broker has to their 'customer' (we aren't supposed to refer to them as clients.. because apparently that's moving past 3rd base in our business).

Progress thus far: The Iowa Association of Mortgage Brokers (IAAMB), who are opposed to this bill, have appeared before a sub-committee to voice the association's opinions.

My opinion: I think this would be a better bill if it included ALL ORIGINATORS. Too often mortgage brokers are put on a different playing field than mortgage bankers and others. I've made it my business practice to treat my customers just like an attorney would represent a client (without the lack of personality). It's a good bill, but it needs to be more comprehensive. Quit pointing fingers at mortgage brokers everyone! Target the bad actors and get them out of the industry, it'll be a better world without them.

House Bill 552 : Increase Dollar Amount for Consumer Credit Code
In summary (my understanding), this is a bill that proposes an increase from the current credit limit of $25,000 to $75,000. This is in relation to consumer credit sales, amounts financed or leased or amount payable under a consumer rental purchase agreement. It appears as if this legislation is going create some restrictions on credit for consumers (this is why IAAMB is against the bill).

Progress thus far: No hearings to date.

My opinion: I don't even completely understand what this bill effects based on its current form. Clarification would be a fantastic start. From there, I think that this sounds like it's going to effect low income areas/borrowers.. and that's no good. More to come on this as I understand what the heck it is they are talking about... comments are open - so please add if you know more.

House Bill 554 : Licensing and Regulation of Escrow Companies
In summary, this is a bill that would make it illegal to have an escrow company in the same office as a broker business. Pretty self explanatory really - if you have a mortgage brokerage business, you cannot have an escrow office in the same office.

Progress thus far: There has been one sup-committee hearing to date.

My opinion: I'm not extremely for or against this legislation. I'm sure It's targeted at a couple specific businesses around Des Moines. Those businesses that it would affect are well run companies (in my opinion). So I'm fine with it. I think those companies whom have escrow offices in or near their office (often owned by the same owner), are attempting to streamline their business and have a larger piece of the pie during the process. Four Legacies Mortgage isn't planning on doing this in the future. I find more value in connecting with other professionals and continue doing what we're extremely good at, and that is mortgages.

There will inevitably be more to come on these topics in the future. With the mess we've seen in some sectors of the mortgage market, I'm sure our attorney general will find a way to protect consumers further with new legislation. In the meantime, don't shoot the messenger. Brokers didn't get the country into this 'mess', it was a group effort of greed and under-estimation of the long term effects of the lending practices. Please - DON'T get me started.

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Don't Be Surprised That Rate Cuts = Higher Mortgage Rates

Tyler Osby (Four Legacies Mortgage) — Sun, 10 Feb 2008 23:48:53 -0600

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With frequent talk of cutting the Fed Funds Rate (FFR) going forward, I figure it's a pretty good time to discuss the effects of a Fed Cut and the translation into mortgage rates. Often, this is a very misunderstood subject, and rightfully so. There just isn't enough good information out there - period. The media, economists and CNBC anchors get this wrong. Let me try to set the record straight.

First off - the Fed Funds Rate (FFR) does NOT directly effect mortgage rates. The FFR is a overnight rate to borrow money (now 30 days, but that's another story). Therefore, the FFR is not a good indicator at all to follow when trying to predict mortgage rates.

Now that we know what the FFR is not, let's talk about what the FFR does affect:

Credit card rates.
Home equity lines of credit (HELOC's).
Borrowing rates for banks that fund loans (for their short term funds).

Now, with this said - it's fair to say that history has a way of repeating itself, right? Well, take a look at the most recent 5 meetings and the effect on mortgage rates that those cut's had.

It's important to note that the lower value of a mortgage backed security (MBS), the higher the interest rate you'll see on your mortgage. So, lower values on mortgage backed securities translate into higher mortgage rates. Make sense? Now for the history:

Now, after yesterday and the stock market sell-off, we made some of our losses back in the bond market. However, there is still a lot of talk about future fed cuts.

So, you tell me - if you're considering financing a home in the next couple months, look at our recent history, do you want to hang out and see if rates get lower? I know I just closed on my personal refinance, the balls in your court. I'm rooting for ya!

If you've got questions please shoot me an e-mail at tyler@iowamtg.com or use the form off to the right and i'll help you navigate the storm and get your mortgage under management where it deserves to be!

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