Lots of Info this week - but I pride myself on getting the latest and greatest (well sometimes not so greatest) news to you.  Rates are great today.  USDA is a wonderful program and they are really nice to work with.  FHA is making huge changes and we need to be fully informed so that we can provide service to our clients.  Please review the info and do let me know how I can be of assistance - thanks!
 

Mary Taylor Sales Manager/Sr. Loan Officer Golf Savings Bank Phone: (503) 701-2269 Fax: 1-888-287-1675 metaylor@golfsavingsbank.com

USDA Program Makes "Rural" Homes More Accessible One of the biggest difficulties many first-time home buyers face is a lack of down payment and the necessary funds for closing costs. However, even with the widespread availability of "no-money-down programs" evaporating in the credit crisis, one national no-down payment program still remains: USDA Rural Development home loans. Guaranteed by the USDA (United States Department of Agriculture), this program might make you think that you have to buy farmland or live "in the country" to qualify, but this is often not the case. In fact, you might be surprised to see just how many neighborhoods actually do qualify as rural development areas. For this program, the term "rural" really applies to those areas with a lower population or fewer homes, not necessarily those areas and neighborhoods far outside of the city. There are several benefits of the USDA loan program besides no money down. The program also does not require private mortgage insurance, and the seller is allowed to pay all of your closing costs and pre-paid items up to 6.00% of the total sales price of the property. And while this is great news for first-time home buyers, it's important to note that you don't have to be a first-timer to qualify for a USDA loan. Other than the location of the property you're seeking to buy, there is one other limitation to this valuable program that you must consider: your income. Luckily, however, these numbers have recently increased to allow more potential buyers to take advantage of this special program. For households in non-high cost areas, with up to four people,  please see the charts available on the USDA website - contact me to get the USDA Brochure that outlines everything about USDA in Oregon.  To find out more about USDA loans, give us a call. We can have an answer as to whether you qualify for this program in just a few minutes.

Mortgage Interest Rates for Fixed Rate Mortgages*

Rates as of  Friday, February 22, 2010

Term Conforming APR         Conv 30 Yr 360  4.875 %  5.039 %         Conv 15 Yr 360  4.250 %  4.529 %         Conv 5/1 Arm 360  3.750 %  3.903 %         FHA/VA 30 Yr 360  5.000 %  5.446 %         FHA 3/1 Arm 360  3.875%   4.273 %

*Rates are subject to change due to market fluctuations and borrower's eligibility.

All loans subject to credit approval and property appraisal. Programs, rates, and terms subject to change without notice. For ARM loans, rate may increase after settlement. Prequalification is not a commitment to lend, a condition of loan approval, or an application for credit. Pre-approvals will result in a loan decision subject to conditions. Consult a tax advisor regarding the deductibility of interest.--

30-Year Rates Down For Third Consecutive Week

 

Freddie Mac Reports:  Recent Housing News Mixed

McLean, VA -Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 4.99 percent for the week ending January 21, 2010, down from last week when it averaged 5.06 percent. Last year at this time, the 30-year FRM averaged 5.12 percent.

The 15-year FRM this week averaged 4.40 percent, down from last week when it averaged 4.45 percent. A year ago at this time, the 15-year FRM averaged 4.80 percent.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.27 percent this week, down from last week when it averaged 4.32 percent. A year ago, the 5-year ARM averaged 5.24 percent.

"Fixed mortgage rates followed bond yields lower for the third consecutive week, pushing 30-year mortgages below 5 percent once more," said Frank Nothaft, Freddie Mac vice president and chief economist. "Similarly, ARM rates eased along with shorter-term rates, as the federal funds futures market indicates no increase in the Federal Reserve's target rate following its upcoming committee meeting on January 26th and 27th.

"Because of reduced sample sizes and work disruptions that occur with severe weather, housing starts tend to be more volatile during winter months. And, indeed, housing starts declined 4.0 percent in December, falling short of the market consensus of no change. Building permits, which are less vulnerable to weather interruptions, unexpectedly jumped 10.9 percent."

 

From Dick Lepre, San Francisco:

Thursday January 21, 2010

Initial Jobless Claims for last week was 482,000 - above consensus and previous.  The pop is being attributed to delays in reporting because of administrative delays cause by the Christmas and New Year's holidays and the MLK holiday last Monday. My reaction is "Huh?" No matter how you slice it these are newly reported jobless claims.  Leading Economic Indicators was +1.1% above consensus and previous. I would regard this as a day with equivocal data.

FHA UPDATE

 (Please be advised that this info needs to be reviewed by the Lending Community - Lenders will issue formal statements on how this will impact their policies)

FHA Announces Policy Changes to Address Risk and Strengthen Finances:
New Measures Will Help FHA Better Manage Risk, While Maintaining Support for the Housing Market and Access for Underserved Communities

FHA Commissioner David Stevens announced on 01/20/10 a set of policy changes to strengthen the FHA's capital reserves, while enabling the agency to continue to fulfill its mission to provide access to homeownership for underserved communities. The changes announced are the latest in a series of changes Stevens has enacted in order to better position the FHA to manage its risk while continuing to support the nation's housing market recovery.

The FHA will propose to take the following steps: increase the mortgage insurance premium (MIP); update the combination of FICO scores and down payments for new borrowers; reduce seller concessions to three percent, from six percent; and implement a series of significant measures aimed at increasing lender enforcement...

AND 

New FHA Mortgagee Letter:

 

U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT WASHINGTON, DC 20410-8000

ASSISTANT SECRETARY FOR HOUSING-FEDERAL HOUSING COMMISSIONER

January 21, 2010

MORTGAGEE LETTER 2010-02

TO: ALL APPROVED MORTGAGEES

SUBJECT: Increase in Upfront Premiums for FHA Mortgage Insurance  

Effective for FHA loans for which the case number is assigned on or after April 5, 2010, FHA will collect an upfront mortgage insurance premium of 2.25 percent. This policy change will increase premiums for purchase money and refinance transactions, including FHA-to-FHA credit-qualifying and non-credit qualifying streamlined refinance transactions...

  

  

January 21, 2010

MORTGAGEE LETTER 2010-02

TO: ALL APPROVED MORTGAGEES

SUBJECT: Increase in Upfront Premiums for FHA Mortgage Insurance

Effective for FHA loans for which the case number is assigned on or after April 5, 2010, FHA will collect an upfront mortgage insurance premium of 2.25 percent. This policy change will increase premiums for purchase money and refinance transactions, including FHA-to-FHA credit-qualifying and non-credit qualifying streamlined refinance transactions.

Programs Covered by Insurance Premiums Shown Below

The upfront and annual premiums and the requirements described in this Mortgagee Letter apply to all mortgages insured under FHA's Single Family Insurance Programs except those listed below:

 

- Title I

 

- Home Equity Conversion Mortgages (HECMs)

 

- Hope for Homeowners (H4H)

 

- Section 247 (Hawaiian Homelands)

 

- Section 248 (Indian Reservations),

 

- Section 223(e) (declining neighborhoods)

 

- Section 238(c) (Military Impact areas in Georgia and New York)

 

Upfront Premiums

FHA will charge an upfront premium in an amount equal to the following percentages of the mortgage:

 

Purchase Money Mortgages and Full-Credit Qualifying Refinances = 2.25 percent

 

 

Streamline Refinances (all types) = 2.25 percent

 

 

HOPE for Homeowners (Delinquent Mortgagors) = 2.00 percent

 

 

Home Equity Conversion Mortgages = 2.00 percent

2

Annual Premiums

Annual premiums will not change at this time.

For FHA traditional purchase and refinance products, the annual premium, shown in basis points below, is to be remitted on a monthly basis, and will be charged based on the initial loan-to-value ratio and length of the mortgage according to the following schedule:

LTV	Annual for Loans >15 Years	LTV	Annual for Loans < 15 Years
< 95	50 BPS	< 90	-None-
> 95	55 BPS	> 90	25 BPS

 USDA Info: