Hello, your Red Headed Mortgage Guy, Dave offering some interesting information.
NEW FHA Limits have returned.
Speaking of FHA, remember that Mortgagee Letter 2009-07 establishes the new FHA loan limits set forth by the American Recovery & Reinvestment Act of 2009. Things to note: new loan limits are for FHA loans that receive approval in calendar year 2009, not farther out; changes apply to the 203b (basic loan), 203h (disaster victims), & 203k (rehab loan); the national FHA floor limit remains at 271,050; the FHA ceiling for high value areas is 729,750; lastly the national reverse mortgage limit increases from 417,000 to 625,500. For the limit in your area, check https://entp.hud.gov/idapp/html/hicostlook.cfm
Pierce, King and Snohomish Counties - $567,500
Kitsap County - $475,000
Mason County - $310,000
Thurston County - $361,250
Lewis County - $271,050
FHA treats short sales, deeds in lieu, etc all the same as foreclosures when it comes to guides and they require 3 years before a borrower can qualify for a loan. Fannie has the new short sale guideline that requires 2 years before a borrower can qualify and 5-7 years for foreclosures.
Lenders had a good January, will end up with great February's, and solid March's. After that, it is anyone's guess as pipelines clear up, loans are purchased, and rates perhaps inch downward. Will these volumes continue if rates stay the same? Are underwriting guidelines going to loosen up? "What do you think?" he said sarcastically. As of yet, aside from a couple random things from Fannie (like increasing the number of properties a borrower can own) personally I have seen no sign of anyone loosening up any guidelines. Investors will take their cue from Freddie and Fannie, and, like I said, I have seen no signs that would point to different guidelines, especially since credit risk is one of the key issues bringing the housing market to where it is. And the government is better in dealing with rates then in setting guidelines.
Last week the Fed bought $25 billion in agency mortgage-backed securities - the most since the program began. Almost 50% of the securities were Fannie 4.5's, which generally include mortgage rates from 4.75-5.125%. As I heard in a seminar yesterday if you are buying something at 4.5%, you're not going to sell it at 4.5%. IN OTHER WORDS THOSE 4.5% INTEREST RATES MAY JUST BE A PIE IN THE SKY.
Also, in the seminar yesterday I got this idea on how to turn a negative to a positive...the discussion was about the media and its negative approach to the real estate market. This caught my mind, "How correct has the media been in the past few years?" Remember early 2008 they were saying we are NOT in a recession and everything will be fine in a few months. Now we ARE IN a recession and everything hasn't been fine. Here's my POSITIVE approach - who's the expert you are the media? You have a better pulse on the market then they do. You can now tell your clients home prices are low (don't tell your sellers this), interest rates are at historical lows, and first time home buyers can get an $8,000 tax CREDIT from the government. Who else is going to give you $8,000 in a year from now?
I'll touch base with you soon. More details to follow after March the 4th?