Mortgage News You Can Use

November 16,  2007

The Good News That Does Not Get Reported:

1. Thirty-five percent of the homes in the U.S. do NOT have a mortgage.

2. Some 94.88 percent of the loans ARE performing.

3. The foreclosure problem in this country is really a story about seven states.

4. The biggest foreclosure problems are in Michigan, Ohio and Indiana.  These are manufacturing states that had horrible job losses.  Since 2001, our fair state has lost 300,000 jobs.  These states would probably have had problems no matter what the market was doing.

5. The other four states-California, Florida, Nevada and Arizona-experienced significant overbuilding.  Twenty-five percent of the foreclosures in these states are on properties that are held by investors who were speculating.

6. Only 25 percent of all mortgages are subprime, and of these, 75 percent are performing.

7. In the other 43 states, foreclosures have fallen in 2007 from 2006.

There's no question about the fact that there is bad news in some markets.  Frustrating to me is that there is also a lot of good news that is either being buried or is not being reported at all.

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Rate Update:  For the week ending November 15, 30-year fixeds averaged 6.24%, down from 6.26% the week before.  A year ago 30-year fixeds were at 6.33%.The rates for ARMs fell following the Federal Reserve's interest-rate cut.

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Some timely and important tips from an underwriter that spoke at the Michigan Mortgage Brokers annual conference last week:

· Make your time to closing longer in your contracts-at least 45 to 60 days.  The rest of the country is busier, the lenders have reduced their staffs and the time a loan spends in underwriting has been lengthened.

· Make your inspection dates shorter-5 business days

· Make sure your lender uses local appraisers who use realistic comps-underwriters go to www.zillow.com to check values and distance between comps used by the appraiser.

· If the underwriter asks you/your lender for more comps "consider yourself fortunate"!  The underwriter's other option is to decline the appraisal or lower the value they will accept for that home.

· And, a big item-PICTURES TELL A 1000 WORDS.  The pictures the appraiser uses tell the underwriter the whole story about the house-The pictures are the first thing the underwriters look at and give the most weight to.  So, spruce up the house before the appraiser arrives!