mortgage: Sacramento Mortgage Rate Update: No Change
- 02/09/08 03:03 AM
Despite the bumpy ride, rates didn’t change much this week. According to Freddie Mac’s weekly survey, the 30 year conforming fixed rate ended the week at 5.65% with half a point. This of course is the owner occupied rate with the highest credit scores. Investors, or those with lower scores pay more. The big news of course was the Senate passing the economic stimulus package containing the increased conforming loan limits, which now moves on to the President’s desk for signature next week. I contacted a number of banks to ask how quickly they would act on the new law, but … (1 comments)
mortgage: FHA + Nehemiah: A Path to 103% Financing
- 02/05/08 03:58 PM
With the rapid demise of 100% financing, first-time home buyers are finding it increasingly difficult to purchase homes, even as prices become more tempting. Yet there is one solution often overlooked by borrowers and lenders alike. It is the Nehemiah program, and when used in conjunction with a normal FHA loan, magical things happen. What is Nehemiah? The Nehemiah Corporation is “a community development corporation specializing in homeownership, affordable housing and community development.” The Nehemiah Program, founded in 1997, is the largest privately funded down payment assistance program (DPA) in the country and has helped a quarter of a million families … (21 comments)
mortgage: What You Need to Know About Risk Based Pricing & Mortgage Rates
- 12/31/07 08:17 AM
There have been many consequences of the subprime mortgage meltdown. But one which has received very little attention so far is the repricing of risk by investors who buy mortgages. That is about to change. What’s important to understand about this fuzzy term is that mortgage rates will now rise even for consumers with decent credit scores. Meet risk-based pricing. In the 2007 mortgage meltdown, investors realized that the low interest rates previously offered didn’t adequately cover the risk of default. Past projections floated on a rising tide of appreciation that kept every one off the reef. Now that the tide … (0 comments)
mortgage: FHA Reform Makes it Through the Senate
- 12/15/07 05:44 AM
The Senate’s FHA Modernization Bill, S 2338 flew through with a 93 to 1 vote yesterday. The House previously passed its own slightly different FHA reform bill in September. The measure will now go to a committee to work out compromises between the two competing version before the final draft is forwarded to the Oval Office for signature. Two of the key issues are: Raises the maximum FHA loan amount to $417,000, putting it in parity with conventional loan limits. Lowers the required down payment to 1.5% from 3% (the House version eliminates the down payment requirement altogether)(read the rest) … (1 comments)
mortgage: Will a Short Sale Damage Your Credit Less Than a Foreclosure?
- 11/27/07 04:21 PM
As real estate values continue to sag, pushing many home owners toward foreclosure, one question surfaces more than any other. Will a short-sale damage your credit less than a foreclosure? REWIND I wrote a couple of articles awhile back entitled, Short Sales vs. Foreclosures…Your Credit Will Suck Either Way and Short Sales and Loan Prospector: A Response From Freddie Mac. At the time–nearly a year ago–my preliminary investigation suggested that short sales and foreclosures would have exactly the same effect on credit. But back then, this issue was just reclaiming the spotlight, and no one had really given it much thought. … (1 comments)
mortgage: An Update on Credit Score Piggybacking: Your Scores May Tumble
- 11/22/07 06:35 AM
Last June I wrote an article entitled Is This The End of Credit Score Piggybacking? That article discussed the renting or selling of credit scores by good borrowers to fake good credit scores for bad ones. The practice of piggybacking credit has been used by parents to help their kids develop good credit scores. When accompanied by some education in the matter of building and maintaining good credit habits, this promotes the responsible use of credit. However, the bad guys have been using credit renting to cheat the system and the credit bureaus are about to slam the door shut. Here … (3 comments)
mortgage: Mortgage Reform, U.S. House Bill 3915, & YSP
- 11/06/07 03:28 PM
This morning, the U.S. House of Representatives Financial Services Committee voted on H.R.3915, The Mortgage Reform and Anti-Predatory Lending Act of 2007. While legislators attempt to erect a defense shield against mortgage lending abuse, this current law strikes wide of the target and is sure to inflict collateral damage upon the very group it seeks to protect. YSP One of the primary thrusts of the Act is to outlaw Yield Spread Premium (YSP). This is the mechanism by which consumers are able to obtain zero point and no cost loans. Borrowers elect a slightly higher interest rate in exchange for eliminating … (1 comments)
mortgage: Is Mortgage Insurance The Next Domino?
- 10/23/07 04:31 PM
Although everybody hates mortgage insurance (MI or PMI as it is known) we’ve once again become dependent upon it. Those who have recently purchased homes know that the 2nds used in “80-10s” and “80-20s” to avoid mortgage insurance are gone. But have the MI companies ignored the risks in their excitement about being invited to the dance? Let’s hope not. Here’s an interesting article to check out: Strains Evident on Mortgage Industry’s Line of Defense Claims skyrocket at MGIC; losses expected for ‘08 American Banker / By Harry Terris October 18, 2007 In a sign of … (4 comments)
mortgage: “Timely Rewards Payment Option”–Fannie Mae’s Best Kept Secret
- 10/16/07 02:09 PM
Sub-prime mortgages have largely evaporated. What remains are a few offerings in the 10–11% range with nasty prepayment penalties and the potential for future rate resets. So what do you do if you or your client have sub-prime credit? Try Fannie Mae’s DU engine. Although most lenders think of Fannie/Freddie as prime credit only, both offer approvals for lower credit grades. Even with a credit score in the high 500’s, you may be able to secure a Expanded Level I, II, or III approval. While these do carry higher rates—7.5% to 8.5%— you can at least secure a safe, standard 30 … (1 comments)
mortgage: Why It Pays to Check Out Lender-Paid Mortgage Insurance
- 10/05/07 02:30 AM
Mortgage insurance, or PMI, has had an unfair rap ever since the media grabbed the topic 10 years ago and beat the life out of it. Every client thereafter spit out the same warning when we met. I don’t want PMI! Ok, I get it. So, most of us started doing the 1st/2nd combo loans that eventually became so popular. Structure an 80% 1st , put a 2nd behind it for the rest….and presto, no MI! And we’d still be doing them now except that those high CLTV 2nds are mostly gone. There are times however when PMI, or MI as we … (3 comments)
mortgage: 100% Financing With Freddie Mac’s Home Possible
- 09/25/07 01:49 PM
As sub prime, Alt-A and 2nd mortgages continue their disappearing act, the GSE’s have been busy trying to help make housing more accessible and affordable. Both Fannie Mae and Freddie Mac have brought forth fantastic programs that can help consumers buy homes with no down payment or refinance homes with little remaining equity. Fannie Mae’s initiative is called MyCommunity Mortgage and I wrote a previous article about that. Freddie Mac has something similar called Home Possible. Here are a few highlights: 100% purchase or rate and term refinance, with no minimum borrower contribution. (105% CLTV allowed on SFRs)30 & 40 yr … (1 comments)
mortgage: The New FHA: What You May Not Know About Down Payments
- 09/15/07 03:59 AM
With the tide shifting back toward old-school underwriting, source of down payment is once again becoming an issue. Conventional loans often require that the borrower have 5% of their own funds, and that money must be “seasoned”. FHA is different and far more flexible. Did you know that FHA loans do not require that the borrower have any of their own money? And there are no “reserves” required. Here are a few acceptable and interesting sources for an FHA down payment: Gift funds, from a blood relative or charitable organization. The donor must sign a standard industry Gift Letter stating that … (2 comments)
mortgage: The New FHA: What You May Not Know About Appraisals
- 09/12/07 05:20 AM
During the sellers’ market of the early 2000’s, FHA loans were the forgotten stepchild of the mortgage business. No seller would even talk to a buyer approved through FHA or VA. One big reason for that avoidance was the FHA appraisal and related property issues. All that has changed. While an FHA approved appraiser must still be used, the rest of FHA’s appraisal requirements have been brought into parity with those of conventional loans. Here are some key improvements: Pest reports: No longer required. Pest reports used to be an FHA fact of life, and every structure on the property—the broken down shed … (1 comments)
mortgage: Sacramento Mortgage Rate Update
- 08/29/07 04:27 PM
So what are mortgage rates doing? That’s an interesting question. The conforming 30 year fixed rate has actually been falling. That is the bright star in a dark sky. But, it helps pull FHA, VA, CalHFA and any agency 100% programs down with it. Freddie Mac last week reported the average 30 year fixed rates in the West at around 6.5% at half a point. And although things are bouncing around a bit, conforming rates continue their gradual decline. That makes it a great time for borrowers who can cobble together a down payment and document income. Jumbo rates–and pretty … (0 comments)
mortgage: “Check Your Appraisal”
- 08/24/07 03:19 PM
….was the heading on yesterday’s email from Wells Fargo Wholesale. This is a heads-up to Realtors and home buyers… Fast Rewind In mid July, FannieMae issued Announcement 07–11, entitled Collateral Valuation Practices and Declining Markets. Here are several key points from the memo: FannieMae’s Desktop Underwriter (DU) Version 5.7 released July 22, will now generate a message when it thinks that a property is located in a declining market.The appraiser must also indicate when the property is in a declining market.The lender is responsible for ensuring the accuracy of the appraiser’s work.Any pressure by the lender on an appraiser will cause … (37 comments)
mortgage: More Lenders Falter
- 08/22/07 10:33 AM
Lehman Brothers announced today the closure of its sub-prime subsidiary BNC Mortgage. Lehman Brothers will continue to originate prime mortgages through its Aurora Loan Services platform but is discontinuing all sub-prime originations. More sad news from my rep at Accredited Mortgage yesterday afternoon: I’m sure you’ve all heard the news that we’ve ceased accepting new loan applications. As you can surely guess, this means I am no longer employed. I wanted to thank all of you for your business and wish you the best of luck in the future. My email account will be shut off shortly. If you’d like to stay in … (2 comments)
mortgage: Words of Wisdom from a Mortgage Veteran
- 08/20/07 07:39 AM
These words of wisdom came in the form of a Monday morning email from fellow loan officer and mortgage broker Dave Ryland. Dave was a seasoned professional when I got into the business 18 years ago. Through good and bad markets, Dave has lived and demonstrated the kind of integrity & professionalism that defines us at our best. Through the current mortgage industry shake up, positive changes are evolving. Here are a couple of Dave’s thoughts: I have realized why the contraction in our industry has me encouraged rather than worried. For many years, I took pride in the fact that it took effort and … (3 comments)
mortgage: Countrywide & Washington Mutual Reveal “Unprecedented Disruptions”
- 08/10/07 04:26 PM
If common sense and research studies hadn’t already convinced you that you should use a mortgage broker (vs. a mortgage banker or direct lender), then chew on this: Countrywide and Washington Mutual, two of the nation’s largest mortgage banks, stated this week that they are facing “unprecedented disruptions” in the secondary market for mortgages that could adversely impact earnings and financial condition. Unprecedented disruptions. Hmmmm… that’s a vague and scary phrase, but what does it mean? It means that if you arrange your home loan through a mortgage bank and they experience an unprecedented disruption of the we-can’t-fund-your-loan kind, you may be sleeping in … (4 comments)
mortgage: Subprime Troubles Spread to Europe
- 08/09/07 12:20 PM
From CBS Market Watch this morning…. LONDON (MarketWatch) — BNP Paribas, one of the largest banks in France, said Thursday that it will stop valuing three of its funds and is suspending investor withdrawals after U.S. subprime-mortgage woes led to the “complete evaporation of liquidity,” the latest sign of housing market troubles in the world’s biggest economy rippling across the globe. So the mess has now spread beyond the subprime, beyond the prime mortgage arena, beyond the U.S. economy, and into the international economy, causing a complete evaportation of liquidy. BNP Paribas was joined by Germany’s Union Investment who suspended redemption … (0 comments)
mortgage: Another Wave of Mortgage Underwriting Changes
- 07/31/07 10:02 AM
Yesterday from First Franklin….. First Franklin no longer allows loans at >95% LTV. This applies to all doc types. Loans at >90% LTV have a maximum loan amount of $500,000 and require a minimum 680 FICO. This applies to all doc types. 90% loans are not available for first time homebuyers. To qualify for >90% funding, borrowers must have owned a home during the previous 3 year period. The Stated Plus and Blended Access programs have been discontinued. Today from Chase Home Equity… Effective August 6, 2007, all stated income/stated asset home equity loans and lines are discontinued, except…Self Employed borrowers … (4 comments)
Despite the bumpy ride, rates didn’t change much this week. According to Freddie Mac’s weekly survey, the 30 year conforming fixed rate ended the week at 5.65% with half a point. This of course is the owner occupied rate with the highest credit scores. Investors, or those with lower scores pay more.;)
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