Archive for January, 2010
Mortgage Market Update
From the desk of Joe Bailey
Keeping You Informed…
Life as an FHA borrower just got tougher.
In an effort to shore up its flailing balance sheet and dwindling capital reserves, the Federal Housing Authority rolled out sweeping financial changes on Wednesday. FHA borrowers must now look better on paper and have more cash at closing.
Mortgage insurance premiums are rising, too.
In its official announcement, the FHA said it’s trying to “better position the FHA to manage its risk while continuing to support the nation’s housing market”.
The changes are effective with case numbers assigned starting April 5, 2010.
One widely speculated change wasn’t made — the increase of the FHA minimum down payment. Homebuyers in California and elsewhere can still buy with just 3.5 percent down. However, the FHA did roll out a number of other changes, including:
- An increase in Upfront MIP from 1.75 percent to 2.25 percent
- A reduction in maximum seller contributions from 6 percent to 3 percent
- A Congressional request to increase monthly mortgage insurance premiums
Furthermore, the FHA’s new guidelines institute a minimum FICO requirement of 580 to make the minimum 3.5% down payment, requiring 10 percent for any applicant whose credit score falls below that level.
But, just because the FHA allows a 580 FICO, it doesn’t mean that banks will approve it.
The official term here is “investor overlay”. It’s when the banks use FHA guidelines as a starting point for their own set of underwriting rules which are often more strict; banks have a good reason for making investor overlays.
Last week, the FHA subpoenaed 15 lenders — including the well-respected 1st Advantage Mortgage in Lombard, Illinois — because of abnormally-high FHA default rates. The act was a shot across the bow, it seems, because in Wednesday’s FHA statement, the group established an official benchmark for FHA loan performance.
If a bank’s defaults exceed the mean by a certain number of sigmas, the FHA terminates the bank. Period.
For this reason, FHA investor overlays will be a running theme of 2010.
The FHA changes go into effect this spring.
“Play like a champion today!”
Joe Bailey – Loan Officer
O. (831) 689-8500
C. (831) 251-5167
Posted in Mortgage Market Updates | 1 Comment »
Mortgage Market Update
From the desk of Joe Bailey
Keeping You Informed…
Foreclosures have always been an issue for banks, but since 2005, the percentage of foreclosure filings coming from the top 10 foreclosure-filing states has moved markedly higher.
- Q1 2005 : 64.3 percent
- Q4 2009 : 72.4 percent
The U.S. foreclosure problem is concentrating by geography. And meanwhile, the 10 states included in the list — California, Florida, Illinois, Arizona, Michigan, Texas, Georgia, Nevada, Ohio and Nevada — account for just 45% of the nation’s population. Distilled, 45 percent of states represent 72 percent of foreclosure filings.
Clearly, some states are more foreclosure-heavy than others. We must use caution when interpreting national housing statistics. A few states can distort the bigger picture. For example, when RealtyTrac says annual foreclosures reached 2.8 million last year and that foreclosures are up by one-fifth, that’s a national story. On a local level, however, the story’s much different.
10 states showed year-over-year improvement in 2009 — including Ohio and Indiana. Both states had been hard-hit by losses in manufacturing. And even when we examine states like Florida and Arizona — two of the most foreclosure-heavy states in the nation — we can find areas in which foreclosure filings are down and the housing market is thriving.
Miami is a terrific example of this.
All real estate is local. Period. We can’t compare states any more than we can compare Bakersfield to Beverly Hills. Big picture data is important, but it’s what happens on the streets that matters, pardon the pun.
Once you’ve found a home and need a prequalification letter to accompany your offer, send me an email and I’ll get you handled.
“Play like a champion today!”
Joe Bailey - Loan Officer
O. (831) 689-8500
C. (831) 251-5167
JBailey@JoeBailey.biz
Posted in Mortgage Market Updates | No Comments »
There has been a lot of talk recently about the New FHA Loan Seasoning Guidelines for 2010. For all of those that don’t know what property seasoning is, let me explain. If a 90 day seasoning period is required, it means that the property can’t be bought and sold within 90 days. For example, if buyer #1 purchases a property on January 1st they can’t sell it to buyer #2 until it has “seasoned” for 90 days or until April 1st.
FHA (Federal Housing Administration) loans had a 90 day property seasoning duration last year and it looked like that would continue into 2010 as well. This made it difficult for Short Sale investors to perform A-B-C transactions. The A-B-C transaction is typically used by investors because it makes negotiations with the lenders much easier and more efficient. Let me explain an A-B-C transaction. The “A” party would be the distressed home owner that is currently in pre-foreclosure, the “B” party would be the real estate investor and the “C” party would be the end buyer. A real estate investor goes in and works with the distressed home owner’s lender to negotiate a payoff authorization. The investor has more leverage with the lender by offering a cash purchase. Subsequent to the payoff authorization the investor will start looking for an end buyer. As you can see, the investor performed a valuable service to the distressed homeowner, the original lender and the end buyer. Let’s take a look at how the short sale investor provides a valuable service.
- Distressed Home Owner – They are behind on their payments, typically in pre-foreclosure. They are in position to lose their home to foreclosure, destroy their credit and continue along a bad path in a difficult time in their life. The short sale investor helps them out of their foreclosure problems with much less affect to their credit and pocket book. Also, the investor will have access to additional resources and often times can help the distressed home owner find a new place to live.
- Foreclosing Lender – The bank doesn’t want to take back the property because they are in the business to lend money, not own real estate. If they go through with the foreclosure process there is a risk that the property will not be purchased at auction. That means it will go back to the bank and become an REO property. This means additional holding costs, selling costs, repair costs, lending restrictions due to the additional liability and not to mention headaches for the lender. Once they finally get rid of the property, they are getting rid of it for a discount. By accepting a discount with the investor during the short sale process they save a lot of additional costs and headache.
- End Buyer – The end buyer will typically have a chance to purchase the property at a discount as well. Investors are looking to sell the properties quickly and to do so, they offer discounts. A new home owner will not only get a great property but they will also get instant equity in their new home.
Last year, Short Sale Investors had to find end buyers that could qualify outside of the FHA loan program due to enforcement of a 90 day seasoning period. Starting February 1, 2010 the 90 day seasoning period for FHA Loans will be lifted until February of 2011. To read more about the change check out the following HUD article.
HUD – New FHA Loan Seasoning Guidelines for 2010
This was great news for the investors and end buyers alike! Here are a few more articles about FHA Loans for you to check out…
FHA Loan Pros & Cons
FHA Official Website
Aaron Clendenning
aaron@embracevision.com
Posted in Real Estate News | 10 Comments »
If you have decided to sell your house, how can you turn your house into the most valuable asset? Before selling real estate, it is important to read the ten keys to boosting profit. You should read these low cost tips and you will manage to enhance the overall income return when you sell your house.
How do we know? Everybody knows that most houses would sell more quickly and for a better value if the real estate agent had followed some reasonable, proved real estate tips. If a house is already a showcase, it simplifies the job of the buyer. When some buyer does not like your house for various reasons, an agent will bring other buyers back to the house. In a community of real estate agents everybody very quickly gets to know about a ready showcase house.
First Impressions – It is very important and should not be overlooked in any case. This tip that I am going to share with you is similar to that concept that is called Curb Appeal. It is the very first feeling that a buyer gets from your house. So, take into account, that the buyer’s first impression starts forming as he walks up to the front door and to the moment when the door first opens. So, make sure that you front door is tidy, as it is an entrance into your house. Make your front door sparkle. If the door needs repainting or refreshing, make sure that you have done that.
If you have a plate on your house with your family name, remove it. Even if it is just on the mailbox. You can always put it back once you move. You should make your house anonymous, so that the buyer should have an impression as if the house already belongs to him.
Check if the key fits properly and the lock works easily. When a home buyer visits your house, the agent uses the key from the lock box. Just imagine if there are some problems with your lock and everybody is standing and waiting, your prospective buyer will get negative impression.
The next thing to be considered is an entry way. Make sure there are no shoes or other clutter in the foyer, it also affects the first impression of your potential buyers.
Take into account that in any real estate market, especially in a buyer’s market there is a strong competition and your house should compete with many other houses in your neighbourhood. If your house is competitive your prospective buyer can be easily turned into a buyer.
But, bear in mind that first impression can be spoiled, if the rest of your house is not presentable. A lot of property buyers would like to know what trade-offs to make, how much money to allocate to get their home ready to list and sell. The main thing is that you should think like the buyer, stroll across the street from your house and walk up to the front door, fix all the things that you would like to see repaired or improved if you are planning to buy your own house.
Now Denver real estate search is easy and convenient as never before. Please visit this web site and you will get shortcut not only to Denver real estate quotes and listings, but also a nice looking online map with the best Denver real estate area propositions – zoom in and see.
Tags: Denver, Denver real estate, real-estate
Posted in Real Estate News | No Comments »
I heard this little poem yesterday and really liked it.
When you want a thing bad enough to go out and fight for it,
To work day and night for it,
To give up your peace and your sleep and your time for it;
If only the desire of it makes your aim strong enough never to tire of it;
If life seems all empty and useless without it,
And all that you dream and you scheme is about it;
If gladly you’ll sweat for it, fret for it, plan for it,
Pray with all your strength for it;
If you’ll simply go after the thing that you want with all your capacity,
Strength and sagacity; faith, hope, and confidence, stern pertinacity;
If neither poverty nor cold nor famish nor gaunt,
Nor sickness or pain to body or brain can turn you away
From the aim that you want;
If dogged and grim, you besiege and beset it,
With the help of God, you WILL get it!
Author Unknown
Posted in Inspiration | No Comments »
Find Out Information About when to refinance and Read Helpful Tips About should i refinance my mortgage and no cost refinance.
Cash back mortgage refinancing is a great way for homeowners to use their homes equity, and quickly obtain a large amount of money that can be used for anything. Different from a personal loan, cash out refinancing typically offers people much more money with much better interest rates, terms, and conditions. Here are some things people should know when considering a cash out refinancing.
There are many reasons for wanting to use your homes equity. Many people have medical bills or other financial hardships that need immediate attention. Other homeowners want to use their homes equity to complete home improvements or repairs, pay college tuition, or for other major life expenses. While a cash out refinance does potentially provide a homeowner with a big lump of money, always remember that it needs to be paid back.
This means that it is generally a good idea to have a productive plan for the money you are getting. Even if most of it is going to be used to prevent or help a financial problem, the rest should be used to improve your homes value, your financial future, or both. Some people come into problems down the road when they unwisely spend the money from a refinancing on things that are not going to benefit them now. However, the money has absolutely no restrictions on what it can be spent on and some homeowners use it for extravagant vacations, expensive cars, or for other big ticket items. The choice is yours, just make is wisely and with the long run in mind.
Here is a very simple example of how a typical cash out mortgage refinancing can work. Say you owe $50,000 over the next 5 years on your 30 year mortgage. With a cash out refinance, you can take out a new home loan for $100,000 due over 10 years, and pocket the $50,000 difference. This is the money you are able to use for anything you want. This money often comes at a much better interest rate than a typical personal loan would be at.
While this type of refinancing may not be beneficial for everyone, it is a great option for many people. Make sure you understand the long term effects, what you want to do with the money, and the benefits of cash out refinancing before you get yourself into anything. A lot of people actually get themselves into a really bad financial situation if they improperly prepare, understand, or get a cash back refinance. Do not be one of these people.
Once you know the difference you are aware of what each of these options mean so you can make educated choices for your loan modification needs. As you navigate through this complex process it is important to learn as much as you can so that you know what you are getting every step of the way and you can have more control of your process.
Gain handy tips about should i refinance my mortgage – study this publication.
Tags: mortgage
Posted in Mortgage Market Updates | No Comments »
Mortgage Market Update
From the desk of Joe Bailey
Keeping You Informed…
Mortgage rates are low but maybe not for you, specifically.
If you’ve ever wondered why loan officers can’t give you the best “advertised rate”, it’s not because of a bait-and-switch scheme or something worse. Most likely, you’re being quoted higher mortgage rates because of a government mandate called Loan-Level Pricing Adjustments.
LLPAs are changes in loan costs based on your personal risk traits.
Fannie Mae and Freddie Mac first introduced loan-level pricing adjustments in April 2008 and they’ve been a constant cause of consternation among conforming borrowers since.
The problem is loan-level pricing adjustments aren’t exactly Prime Time news and so the first time most people hear about them is at the point of application. LLPAs can raise a person’s mortgage rate by a full percentage point or more.
To understand what LLPAs are and how they work, let’s talk about auto insurance.
For all of us, there is some base insurance rate for which we all qualify. It’s based on our age, our credit and the ZIP code in which we park the car. From there, however, adjustments are made — drive a riskier car, pay a higher premium. Have a history of accidents, pay a higher premium. Things like that.
The same goes for mortgage loans, the more the risk, the higher the rate. A few of the risk factors that can change a person’s mortgage rate include:
- Living in a condo with less than 25% equity in the home
- Having a credit score of less than 740
- Living in a 2-unit, 3-unit or 4-unit home
- Using a home as an investment property
- Doing a “cash out” refinance with less than 40% equity in the home
- Having a second mortgage to subordinate
Each of these traits — historically — increases the likelihood of your default. Therefore, to hedge, Fannie Mae and Freddie Mac charge flat fees to offset potential future losses.
LLPAs are not discretionary fees; sources of profit or padding. Nor are they junk fees. LLPAs are mandatory costs triggered by specific loan characteristics. There’s no flexibility, either. If you trigger the guidelines, you pay the fees.
The Fannie Mae Loan-Level Pricing Adjustment chart is as thorough as it is punitive. At least borrowers get to choose how they pay them:
- LLPAs can be paid as a traditional “closing cost”, due at closing.
- LLPAs can be built into an interest rate. In general, interest rates increase 0.250% for each 1 percent of loan-level pricing adjustment.
It doesn’t take much to trigger the risk-based pricing of Fannie Mae and Freddie Mac; in fact, a lot of conforming mortgage applicants do trigger the LLPAs.
“Play like a champion today!”
Joe Bailey – Loan Officer
O. (831) 689-8500
C. (831) 251-5167
Tags: LLPA, Loan-Level Pricing Adjustment, mortgage
Posted in Mortgage Market Updates | 2 Comments »
Find Out Helpful Info About home loan mortgage refinance loan and Read Info About lowest mortgage rate refinance and home loan mortgage refinance loan.
For people with good credit getting mortgage refinance loans is no problem, but in times of economic uncertainty the people who need to refinance the most due to hard times often also have bad credit perhaps because of a high debt to income ratio, or a defaulted loan, or even simply because they have opened too many credit cards lately.
Mortgage refinance loans are much easier to get if your credit is pristine because the bank considers you much less of a risk than if you are seeking Bad Credit Refinance Loans, because of the bad credit, it’s very hard to get a loan (If you defaulted on credit card loans what’s to say you won’t default on your mortgage refinance loan) but because we are in such economic turmoil so many people are having problems with their loans and going into foreclosure that the government has set up numerous programs that were created to help those with bad credit get a bad credit mortgage refinance loan.
Recently the federal government released billions of dollars to allow people with low incomes and bad credit turn their variable interest rate loans which have gotten very expensive into low interest fixed rate loans. The mortgage interest rates can help millions of people avoid foreclosure on their homes and be able to sleep better at night. Check out your local government websites as well as information on the united states department of housing and urban development (also known as HUD) and on the federal housing administration’s website. These sites can become invaluable tools to help reduce your mortgage payments and get your bills under control.
It’s very important to get your mortgage rate under control as quickly as possible especially now because soon the government packages will expire and as the economy recovers interest rates will skyrocket leaving those who hesitated behind. With houses being large purchases of hundreds of thousands of dollars, even a 1 percent decrease in your annual percentage rate can save you tens of thousands over the lifetime of your loan.
Along with helping you with bad credit mortgage refinance loans, the united states department of housing and urban development and the federal housing administration can help new home buyers purchase homes for a very low down payment hopefully to stimulate the housing market adding buyers and slowly driving up property costs.
If you feel bogged down by your home, and think you will lose it because your mortgage loan payments are too high look into those governmental departments and perhaps a little research can change your life for the better!
About the Author
A great resource to help you in your continued research on Mortgage Interest Rates is ApproveAll.com They offer completely free and unbiased information about Bad Credit Mortgage Refinance Loans, Mortgage Loans and a lot more.
Grab realistic suggestions about 40 year mortgage rates – your individual tips store.
Find important things to know about luxury vacation home – please make sure to read the publication. The times have come when concise information is really only one click of your mouse, use this possibility.
Tags: mortgage
Posted in Mortgage Market Updates | No Comments »
Find Information About bank mortgage refinancing and Get Helpful Info About 40 year mortgage rates and 30 year fixed refinance.
Taking out a mortgage on a new home is a very big step in your life. If you are obtaining a mortgage loan for the first time, there are a few things you should consider.
Before you search for a new mortgage loan, you first need to know what type of loan is best for you. There are many types of loans available on the market to choose from. Some mortgages are very traditional and straightforward, while others might be a little more difficult to complete understand.
If you are buying a home for the first time, an FHA loan might be just right for you. FHA loans are obtained through a regular mortgage lender, but they are backed by the U. S. Government. Qualifying for an FHA loan is easier than other loans because lenders know that the loan is secured by government funding.
The most traditional loan on the market is the fixed rate mortgage. With a fixed rate mortgage, you choose the length of time you want to pay off the mortgage, as well as the interest rate. Fixed rate mortgages usually have a payback period of 10 to 30 years. During the life of the loan, the interest rate will remain the same.
Adjustable rate mortgages are similar to fixed rate mortgages in that you choose the length of time you want to pay on the loan, as well as the interest rate. The difference with this type of loan is that the interest rate will change during the life of the loan. As the prime lending rate goes up and down, the lender has the option to raise or lower the interest rate on your loan.
Veterans of the U. S. Military have an option that other borrowers do not have. Many veterans will be able to qualify for a V. A. Loan. Most mortgages require the borrower to have a down payment to purchase a home. The V. A. Loan is different in that no down payment is required for qualified borrowers.
There are a number of newer loan types on the market today that look very attractive to borrowers. Many loans look like there is a lot of flexibility in the way they can be paid. Watch out! If you take the time to read the fine print on some of these mortgages you will see the hidden truth. Some of these loans require a balloon payment. Balloon payments require the borrower to come up with a very large amount of money to finish paying off the loan.
If you find the loan you want, but the interest rate is not as low as you would like, you can change the rate. Lenders allow you to pay points to lower the interest rate. A point is a percentage of the loan amount, usually 1%. By paying points, you will be able to lower the interest rate. This is a particularly good option for fixed rate loans.
Finding a good mortgage loan is easy these days. If you search the Internet, you will find many mortgage lenders doing business online. Do a little research first, decide what type of mortgage is right for you and you will have no trouble finding the mortgage loan that is right for you.
When you’re deciding to buy a house, some of the factors that you have to take into account are mortgage rates. As mortgage rates are important for home-buyers, GIC rates are important for investors. If you’re interested in a customized financial plan, remember to visit us.
Article Source: http://EzineArticles.com/?expert=Adriana_N.
Gain pragmatic info about 30 year fixed refinance – dig into this web page.
For practical tips about luxury vacation home – go through this web site. The time has come when concise information is really only one click away, use this possibility.
Tags: Refinance
Posted in Mortgage Market Updates | No Comments »
Get Information About bank mortgage refinancing and Discover Useful Information About 40 year mortgage rates and mortgage refinance no closing costs.
In the several months that have past, the mortgage loaning business has started picking up. This is because banks and mortgage institutions have started offering the lowest mortgage refinancing rates in the history of this business.
This has contributed heavily to the picking up of these businesses. In the past week, you will find that the average rate for a thirty year mortgage was 5.68%.
This is the lowest mortgage refinancing when you compare it to the previous year which was at 6.3%. The decline in the rates has led to an influx of refinancing due to the fact that home owners are looking to get out of the adjustable rate mortgages.
By refinancing at this time, such home owners can have the opportunity of lowering the rate on their fixed mortgages. At the end of January, the applications that were made for mortgage refinancing stood at 22%.
This was a research that was done by the Mortgage Bankers Association. For those who are paying the normal mortgage rate, they should consider the current lowest mortgage refinancing that is available.
There are some skeptic borrowers who will want to wait in the hope that the current rate will go to a further low rate. Long term rates are in the lowest mortgage refinancing meaning at this time the chances of them going lower is highly unlikely.
That is why such skeptics are being advised to refinance before the rates start to rise again. The Federal Reserve has reduced short – term rates by fifty percent appoint by the end of the previous week.
Though these cuts have an impact on lower rates for credit cards and car loans, they do not necessarily influence the long – term mortgage rates. This is because mortgage rates are reliant on the changes in the economy.
Some of the time you will see that short rates may go down but mortgage rates will do the exact opposite.
Because long – terms rates have been known to be directly influenced by inflation, you will find that the bonds yields will rise. A boost on the inflation rate therefore will mean a direct rise to the mortgage rates.
That is why those people who are waiting for the rates to go lower are at a very high risk of getting higher refinancing rates in the future.
About the Author
Discover where to get the lowest mortgage refinance rates online. Learn how to get affordable refinance mortgage interest rates at my site.
Get helpful suggestions for 30 year fixed refinance – this is your personal guide.
Read realistic knowledge about the topic of to get ex back – make sure to go through the publication. The times have come when concise info is really only one click away, use this opportunity.
Tags: Mortgage Refinancing Rates
Posted in Mortgage Market Updates | 1 Comment »
