Mortgage Market Guide as of Wednesday, January 16, 2008

Mortgage and Lending with FAMILY HOME LOANS


No lack of volatility in the market today!  Mortgage bonds opened up relatively flat at -3 basis points and over the last few minutes, they have dropped down to -16 so we may see a little bit of a rate increase.  As of this morning's rate sheets, we could've  squeezed a 30-year fixed in at 5.50% for purchase transactions over $170k with 5% down.  With what's happening as of now, we might see them trickle back up to 5.625%. 

In other news:

This morning's CPI (Consumer Price Index) numbers came in better than expected at 2.4% so this looks like it's contributing to the dent in mortgage bonds.  At 2:00 today, the Fed's Beige book (report of the country's economic conditions) will be this could be a bond market mover as well. 

100% Financing - As you know, it's getting harder and harder to get these loans - not only because of credit score requirements, but now because Fannie Mae has declared most of Michigan an area of declining markets.  When we run a loan through Automated Underwriting, whether it be through Fannie Mae or Freddie Mac's system, we get an approval or a decline.  If the loan is approved, it gives us a report of the information that we need to submit in order to turn it into a final approval (a pay stub, W2, etc).  Before in the collateral section, it was just indicate that we need an appraisal with outdoor and indoor photos.  Now, Fannie Mae is putting a blurb that resembles "this address appears to be in an area of declining values."  If that is the case, the borrower will HAVE to put 5% down.  Again, it's not anything to do with the borrower's qualifications - it's the home itself and how Fannie Mae is categorizing it.  For a very brief window, we were running loans through Freddie Mac's AUS because they weren't putting that blurb on their approval letters.  Starting today, some lenders are no longer accepting the Freddie Mac approvals.  So again...this market is ever-so-changing!  If this completely goes away, you will have to start sharpening your FHA with Down Payment Assistance programs pencils in order to do a No Money Down program.  I would be happy to walk you through the process - it is actually very easy. 

If you need anything...I'm here!

Have a GREAT day!

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