Archive for the ‘Mortgage News’ Category

The beatings will continue until morale improves!

Monday, November 7th, 2011

“The U.S. Federal Reserve is tilting the playing field in favor of those attempting to get mortgages by keeping interest rates ultra-low. The Senate also has voted to tilt the playing field in their favor, by raising the limit of Freddie Mac and Fannie Mae guarantees back to $729,750 – an absurdly high amount for a program that was meant to help the middle class.

However, the banks themselves are being very cautious, restricting lending to those well within traditional parameters of no more than an 80% loan to value ratio and no more than 25% of income consumed by mortgage payments. That helps the rental market, by preventing well-qualified renters from buying homes, but it does nothing for housing market recovery.

Given the restrictions on mortgage availability and the continued overhang of foreclosures and pre-foreclosures . . . the pace of new home sales remains extremely depressed. Further, even when the housing market recovers it will do so first through the absorption of existing inventory, so the demand for new building will remain low.”

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Wells Fargo and BoA at least give lip service to working with HAMP

Thursday, March 18th, 2010

In the news :  Wells Fargo joins Bank of America participating in a government program to modify second mortgages if the home owner has already modified their first mortgage.

The program is part of the  government’s Home Affordable Modification Program (HAMP) that aims at reducing monthly payments to help customers stay in their homes.

HAMP offers lenders who made “piggyback” loans — second mortgages that allowed consumers to make a small or no down payment in recent years — incentives to lower payments or eliminate the loans entirely.   As usual, it remains to be seen if these incentives will be passed thru to second mortgage holders.

Customers of Wells Fargo or Bank of America  who have already modified their first mortgage through the HAMP modification program  can also apply to modify their second mortgage.  All first-lien HAMP customers with second-lien mortgages should received mailed notices to make them aware of the new payment relief option … but maybe you heard about it first here.

The Not So Perfect Storm

Tuesday, March 16th, 2010

This blog author still has a key chain that reads “Captain’s Stateroom — SS Titanic” given to him in a going away party a good while back when he was leaving Federal employment.

Roll time forward and the analogy to sinking cruise ships may be a current day fit, as the Fed’s continue to pursue their “QE2” program. (the Fed’s “Quantitative Easing” program and the cruise ship “Queen Elizabeth 2” seems to be an obvious allegory).

The author has taken to the sidelines and a lifeboat as the mortgage industry continues to flounder. That’s a poetic way of saying I’ve let my mortgage broker license go inactive. It just isn’t fun anymore putting on a happy face that low interest mortgage money is abundant and is readily available for submitting an application, when the reality is pretty much the opposite for most borrowers.

Loan originators, as mortgage brokers are now called, are generally able to offer the current under 3.99/4.25 rates on agency conforming loan amounts primarily to borrowers who are have a middle FICO score over 740 and enough equity in their home to qualify for a refinance or a large enough savings to cover their down payment and closing costs.

Except for government employees, whose credit hasn’t been dinged by the economic events of the past few years ? Whose credit score is still above the 740 high water mark?

And if your credit score has miraculously floated like burning oil on the churned up seas, whose mortgage isn’t at least partly underwater ? I have friends whose HELOC’s (home equity lines of credit) have been trimmed back severely in this period of reduced home equities.

Then to add insult to injury, if the terms of your loan application trigger any risk-based loan level pricing adjustments (LLPAs), your rate quote will most likely be higher.

Bottom line : if you do not fall into the “perfect borrower” category, batten down your hatches and stand by for the “perfect storm”. And prepare to get wet.

Loan originators find themselves shouting into the wind in this kind of economic weather, and at least this originator doesn’t find that to be productive, fruitful, or helpful to potential clients. A “perfect borrower” should be able to go into their local credit union and do just fine.

I’ll continue to post here and on my twitter blog “a1mortgageinfo” with opinion and information that I think cuts thru the chase and tries to make sense of it all.

I continue to be a strong advocate of the Reverse Mortgage Program for qualifying seniors.

Hang in there … keep your life vest inflated … and hopefully we’ll all wind up having stayed the course !

Who’s Giving Out Snorkel Masks ? More on the influence of underwater mortgages.

Saturday, February 6th, 2010

Results of a recent consumer survey conducted by Thomas Reuters and the University of Michigan indicated approximately 75 percent of homeowners who participated in the survey viewed current home buying conditions as favorable because of attractive home prices and low interest rates.

However, nine out of ten of those home owners viewed the conditions for the sale of their own home as unfavorable, not because of lack of buyers, but because of price declines.


Lenders Should Help You … Not … Walk Away From Your Mortgage

Friday, January 8th, 2010

The excerpts below are quoted from :

“Walk Away From Your Mortgage”
By Roger Lowenstein
Contributing writer for the New York Times Magazine
Published:  January 7, 2010

Time was, Americans would do anything to pay their mortgage — forgo a new car or a vacation, even put a younger family member to work.  But the housing collapse left 10.7 million families owing more than their homes are worth.  So some of them are making a calculated decision to hang onto their money and let their homes go.  Is this irresponsible?


Early May ’09 mortgage rates revisited in Sept ’09 !

Thursday, September 10th, 2009

I don’t think the market is going to let rates get much lower. Actually I’m surprised we’re seeing these again, but with continued Government intervention in the mortgage securities market for now (this too will end), it’s a crapshoot.

A simple rule of thumb, rates go up a lot quicker than they go down.

Get off your decision fence, get that paperwork in and lock in your rate.   Especially those of you that qualify for the first time homeowners tax credit !

These  “planets”  will only stay aligned for so long, after which you’ll only be able to look back and kick yourself for not making a move then.

Home Affordable Refinance Program Expands to 125 Percent Loan-to-Value

Thursday, July 2nd, 2009

(News Source: Federal Housing Finance Agency)

(WASHINGTON, D.C.) — The Federal Housing Finance Agency has authorized Fannie Mae and Freddie Mac to expand the Home Affordable Refinance Program (HARP) to homeowners who are current on their mortgage payments from the present loan-to-value ratio ceiling of 105 to 125 percent. With these expanded refinance opportunities, qualified borrowers whose mortgages are currently owned or guaranteed by Fannie Mae and Freddie Mac will be allowed to refinance those loans according to the terms of the Home Affordable Refinance Program established earlier this year.


Federal Housing Finance Agency – Home Page

Wednesday, June 10th, 2009

Mission Statement:

To promote a stable and liquid mortgage market, affordable housing and community investment through safety and soundness oversight of Fannie Mae, Freddie Mac and the Federal Home Loan Banks.

Federal Housing Finance Agency – Home

Missed The Mortgage Rate Boat ? Timing, Luck or Greed . . . maybe a bit of each ?

Tuesday, June 9th, 2009

Just like the stock market and how quickly prices can go down; mortgage rates have shown they can go up just as steeply and quickly. There has to be ton of people kicking themselves for trying to time the bottom and do better than the 4 to 4.25 percent mortgage rates of a month back.

Rates will possibly get back under 5% but not as low as they were, so there may be another opportunity if your circumstances allow you to wait. Lesson learned hopefully.

Q : Wait for how long ? A : No one has a crystal ball. Two weeks, two months ? As I’ve posted elsewhere, with government intervention, mortgage rate movements can be unpredictable.

(I personally don’t trust the government or government agencies to necessarily do the right thing. I think greed still prevails at the Lender level. Why not ? They got bailed out once. No lessons learned there that I can see.)

As of this posting, mortgage rates continued to tick higher as the market showed a disdain for the risks associated with investing in mortgage-backed securities. MBS are similar to treasuries in that the price and the yield are inversely related, meaning as price goes lower, yields move higher and vice versa. So as MBS move lower in price, mortgage rates move higher. Monday June 8th, over lunchtime hours, MBS made a dramatic move lower in price forcing lenders to reissue worse rate sheets. This increased the par 30 year conventional rate mortgage by another .125% in rate. By day’s end, most lenders were offering par 30 year fixed rate mortgages in the 5.5% to 5.625% range.

Home prices are still very affordable and rates are still under 6%, so it’s still a great time to buy. And if you are a first time home buyer you can get up to $8,000 back from the government. Don’t leave it to chance that things couldn’t get worse.

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