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2011-10-20T10:54:00.002-06:00

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2011-04-08T16:43:00.000-06:00

How Might a Government Shutdown Impact the Loan Process?
________________________________________
BY ADAM QUINONES

Congress needs to pass a "Continuing Resolution" by midnight on Friday, April 8th to avoid a government shutdown.

From Wikipedia: A continuing resolution is a type of appropriations legislation used by the United States Congress to fund government agencies if a formal appropriations bill has not been signed into law by the end of the Congressional fiscal year. The legislation takes the form of a joint resolution, and provides funding for existing federal programs at current or reduced levels.

Reuters Headlines...
RTRS-WHITE HOUSE SAYS PROCESSING OF SOME PAPER-FILED IRS TAX REFUNDS WILL BE SUSPENDED IF THE GOVERNMENT DOES HAVE TO SHUT DOWN

RTRS-WHITE HOUSE SAYS PROCESSING IRS TAX AUDITS WOULD ALSO BE IMPACTED BY A GOVERNMENT SHUTDOWN

RTRS-PROCESSING OF SMALL BUSINESS ADMIN LOANS WOULD BE AFFECTED IF GOVT SHUTS DOWN - U.S. OFFICIAL

RTRS-US OFFICIAL - GOVERNMENT SHUTDOWN WOULD IMPACT FHA, HAVE "SIGNIFICANT IMPACT" ON HOUSING MARKET IN PEAK HOME-BUYING SEASON

RTRS-US OFFICIAL-NUMBER OF FEDERAL WORKERS WHO WOULD BE IDLED COULD BE IN THE SAME VICINITY AS THE 800,000 IMPACTED IN LAST SHUTDOWN

RTRS-US OFFICIAL-ELECTRONIC FILING OF US TAX RETURNS WILL CONTINUE IN THE EVENT OF A GOVERNMENT SHUTDOWN

RTRS-SIGNIFICANT NUMBER OF PENTAGON CIVILIAN EMPLOYEES WOULD BE FURLOUGHED IF GOVT SHUT DOWN - U.S. OFFICIAL

RTRS-US OFFICIAL-MILITARY WILL BE PAID UP TO APRIL 8TH IF GOVT SHUTS, SALARIES WILL ACCRUE AFTER THEN BUT PAYMENTS WILL BE DELAYED

RTRS-OBAMA SAYS GOVERNMENT SHUTDOWN WOULD HURT U.S. ECONOMY RIGHT WHEN IT'S GAINING MOMENTUM

RTRS-OBAMA URGES DEMOCRATS AND REPUBLICANS TO MAKE COMPROMISES TO GET BUDGET DEAL, KEEP GOVERNMENT RUNNING
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HOW WOULD A GOVERNMENT SHUT DOWN HAVE A "SIGNIFICANT IMPACT" ON THE HOUSING MARKET?

INITIAL THOUGHTS: The government's servers won't be taken off-line. The network will still be up and running. Essential staff will still be in place. FHA Connection is web-based but ordering FHA Case Numbers ASAP is advised. The IRS is an important part of the loan application process. Tax transcripts are generally accessible online but it seems like a safe move to get 4506-T's ordered now. One obvious thought is not being able to verfiy the employment status of borrowers with government jobs. Plus there could be a delay in getting current paystubs. FHA and Ginnie Mae aren't the only program offices within HUD though.

HERE IS A LIST OF HUD PROGRAMS THAT COULD BE IMPACTED.....

Community Planning and Development

* Community Development Block Grants (CDBG) (Entitlement)
* Community Development Block Grants (Non Entitlement) for States and Small Cities
* Community Development Block Grants (Section 108 Loan Guarantee)
* Community Development Block Grants (Disaster Recovery Assistance)
* Community Development Block Grants (Section 107)
* Community Development Block Grants for Insular Areas
* Community Development Block Grants (Rural Innovation Fund)
* The HOME Program: HOME Investment Partnerships
* Housing Trust Fund
* Shelter Plus Care (S+C)
* Emergency Shelter Grants (ESG) Program
* Surplus Property for Use to Assist the Homeless (Title V)
* Supportive Housing Program
* Continuum of Care Program
* Section 8 Moderate Rehabilitation Single Room Occupancy (SRO) Program
* Rural Housing Stability Assistance Program
* Brownfields Economic Development Initiative (BEDI)
* Economic Development Initiative ("Competitive EDI") Grants
* Empowerment Zones
* Self-Help Homeownership Opportunity Program (SHOP)
* Capacity Building for Community Development and Affordable Housing
* Housing Opportunities for Persons With AIDS (HOPWA)
* Loan Guarantee Recovery Fund for Church Arson and Other Acts of Terrorism (Section 4)

Federal Housing Administration (FHA)

* Single Family Housing Programs
o One to Four Family Home Mortgage Insurance (Section 203(b))
o Mortgage Insurance for Disaster Victims (Section 203(h))
o Rehabilitation Loan Insurance (Section 203(k))
o Single Family Property Disposition Program (Section 204(g))
o Loss Mitigation
o FHA-Home Affordable Modification Program (FHA-HAMP)
o Graduated Payment Mortgage (GPM) (Section 245(a))
o Adjustable Rate Mortgages (ARMs) (Section 251)
o Home Equity Conversion Mortgage (HECM) Program (Section 255)
o Manufactured Homes Loan Insurance (Title I)
o Property Improvement Loan Insurance (Title I)
o Counseling for Homebuyers, Homeowners, and Tenants (Section 106)
o Good Neighbor Next Door
o Energy Efficient Mortgage Insurance
o Insured Mortgages on Hawaiian Home Lands (Section 247)
o Insured Mortgages on Indian Land (Section 248)

Risk Management and Regulatory Affairs

* Manufactured Home Construction and Safety Standards

Multifamily Housing Programs

* Supportive Housing for the Elderly (Section 202)
* Assisted-Living Conversion Program (ALCP)
* Emergency Capital Repairs Program
* Multifamily Housing Service Coordinators
* Manufactured Home Parks (Section 207)
* Cooperative Housing (Section 213)
* Mortgage and Major Home Improvement Loan Insurance for Urban Renewal Areas (Section 220)
* Multifamily Rental Housing for Moderate-Income Families (Section 221(d)(3) and (4))
* Existing Multifamily Rental Housing (Section 207/223(f))
* Mortgage Insurance for Housing for the Elderly (Section 231)
* Supplemental Loans for Multifamily Projects (Section 241)
* Supportive Housing for Persons with Disabilities (Section 811)
* Multifamily Mortgage Risk-Sharing Programs (Sections 542(b) and 542(c))
* Mark-to-Market Program
* Self-Help Housing Property Disposition
* Renewal of Section 8 Project-Based Rental Assistance

Healthcare Programs

* New Construction or Substantial Rehabilitation of Nursing Homes, Intermediate Care Facilities, Board and Care Homes, and Assisted Living Facilities (Section 232); Purchase or Refinancing of Existing Facilities (Section 232/223(f))
* Hospitals (Section 242)

Public and Indian Housing

* Housing Choice Voucher Program
* Homeownership Voucher Assistance
* Project-Based Voucher Program
* Public Housing Operating Fund
* Public Housing Capital Fund
* Public Housing Neighborhood Networks (NN) Program
* Revitalization of Severely Distressed Public Housing (HOPE VI)
* Choice Neighborhoods
* Public Housing Homeownership (Section 32)
* Resident Opportunity and Self-Sufficiency (ROSS) Program
* Family Self-Sufficiency Program
* Indian Community Development Block Grant (ICDBG) Program
* Indian Housing Block Grant (IHBG) Program
* Federal Guarantees for Financing for Tribal Housing Activities (Title VI)
* Loan Guarantees for Indian Housing (Section 184)
* Native Hawaiian Housing Block Grant (NHHBG) Program
* Loan Guarantees for Native Hawaiian Housing (Section 184A)

Fair Housing and Equal Opportunity

* Fair Housing Act (Title VIII)
* Fair Housing Assistance Program (FHAP)
* Fair Housing Initiatives Program (FHIP)
* Equal Opportunity in HUD Assisted Programs (Title VI, Section 504, Americans with Disabilities Act, Section 109, Age Discrimination Act, and Title IX)
* Section 3 Program
* Voluntary Compliance

Policy Development and Research

* Policy Development and Research Initiatives

Government National Mortgage Association (Ginnie Mae)

* Ginnie Mae I Mortgage Backed Securities
* Ginnie Mae II Mortgage Backed Securities
* Ginnie Mae Multiclass Securities Program
* Ginnie Mae Platinum Securities Program
* Healthy Homes and Lead Hazard Control
* Office of Sustainable Communities
o Sustainable Communities Initiative

Temporary Programs

* Housing and Economic Recovery Act of 2008 (HERA) Programs

* HOPE for Homeowners
* Neighborhood Stabilization Program (NSP1)

* American Recovery and Reinvestment Act of 2009 (Recovery Act Programs)
o Neighborhood Stabilization Program 2
o Green Retrofit Program for Multifamily Housing
o Healthy Homes Demonstration Grant Program and Technical Studies Grants
o Homelessness Prevention and Rapid Re-Housing Program (HPRP)
o Lead-Based Paint Hazard Control Grant Program and Lead Hazard Reduction Demonstration Grant Program
o Indian Housing Block Grants (Formula)
o Indian Housing Block Grants (Competitive)
o Public Housing Capital Fund (Formula)
o Public Housing Capital Fund (Competitive)
o Tax Credit Assistance Program (TCAP)
* Dodd-Frank Wall Street Reform and Consumer Protection Act Programs
o Neighborhood Stabilization Program 3
o Emergency Homeowners Loan Program

Other Resources

* Neighborhood Reinvestment Corporation (NeighborWorks America)
* U.S. Interagency Council on Homelessness

-------------------------------------
We see this childish Congressional behavior as politics in their purest form. STANDARD OPERATING PROCEDURES ON CAPITOL HILL. Playing this game of chicken with the bond market carries massive consequences. We're cutting off our nose just to spite our face here. The last thing we want to do is put the U.S. credit rating in the global spotlight. We don't want bond vigilantes chasing after our debt like they are EU debt right now. A "bitter fight over budget cuts" unfortunately would do just that. I hope our so called leaders in Washington avoid that bitter fight. I hope they act like adults and avoid grand-standing and pandering. We don't need bickering. We need common ground. We need to develop a plan and make some moves to restore confidence in our country.
READ MORE: Budget Battle Looms. Bond Vigilantes Lurk
Besides the observations made above, we don't know exactly how a government shutdown would impact the housing market, we don't see anything positive coming from it though....mortgage rates certainly wouldn't react well!
WHAT ELSE ARE WE MISSING HERE?
Do Fannie and Freddie count as government or is that just an "implied" shutdown?
UPDATED AT 9:00 ON APRIL 7, 2011...
Suntrust sent this out last night:
News reports continue to develop regarding a potential government shutdown if budget agreements are not reached by Friday, April 8. Should this occur, there are several areas where our business could be impacted:
• Tax transcript: If the IRS is on furlough, we will not be able to obtain tax transcripts. If you have a registered/locked loan with us and have not already delivered it to the branch, please upload your completed and signed 4506T into eMagic TRIO now. Even though the TRIO folder will not contain a complete file, please upload your registration or lock confirmation and select "deliver to Underwriting." You will need to check the audit trail in TRIO to confirm receipt by SunTrust Mortgage. We will order the transcripts prior to the shutdown to minimize a potential delay when you deliver your loan file.
• Flood insurance: Borrowers may have difficulty obtaining flood insurance through FEMA during this period.
• FHA: We understand that HUD may not support FHA Connection during their hiatus, and therefore we will not be able to order case numbers or perform other functions in FHA Connection while they are on furlough.
• Rural Housing: We are not sure of the impact to GUS since that system was created since the last shutdown in 1995. However, we should anticipate the system will not be available. In addition we will not be able to get conditional commitments during the shutdown.
• VA: We should anticipate that the system by which VA appraisals are ordered will not be available
UPDATED AT 3:45 ON APRIL 8, 2011
An update from HUD: We know many of you are anxious about where things currently stand with regards to HUD’s Fiscal Year 2011 budget. As we are sure you are well aware, the continuing resolution (CR) under which HUD – along with the rest of the Federal Government – is currently operating, is set to expire tonight. Should the government shut down, most of HUD’s functions would cease.
Housing Counseling Agencies should be aware that:
• HCS - The Housing Counseling System (HCS) will not be available. Consequently, counseling agencies will be unable to update agency profile information, submit activity data, or otherwise utilize the functionality in HCS.
• Counseling Agency Search Functionality - The HUD.GOV website will be available in “Maintenance Mode” only. This means that HUD.GOV will be up but there will be no updates made to pages on the site. As a result, HUD’s website housing counseling search functionality, and similarly HUD’s toll free number to search for counseling services, will still be available to households seeking counseling services. However, with HCS down, the data behind the search functionality will not be updated.
• Grant Funds – While the LOCCS system should be functioning, there will be no GTRs to approve requests for disbursements. Consequently, no grant disbursements will occur during a shut down.
• Inquiries – Counseling agencies will not be able to reach HUD staff with inquiries. General inquiries about FHA programs can be directed to 1-800-CALL FHA (1-800-225-5342). However, this call center will have very limited information regarding the Housing Counseling Program and the issue covered in this message.
We hope this is helpful for you to make any preparations that may be necessary in the event that a shutdown does occur. We look forward to an FY 2011 appropriation and the resumption of services as soon as possible.
UPDATED AT 5:30 ON APRIL 8, 2011
Guidance from GMAC...
Pricing Impact
• GMACB will continue to accept new locks on FHA, VA and USDA loans. Clients should consider possible delays in government loan processing when locking in rates due to limited capacity of government processing systems such as: FHA Connection, TOTAL Scorecard, GUS and Veterans Information Portal.
• GMACB will accept lock extensions on FHA, VA and USDA loans.
• There is no impact to agency and Jumbo lock transactions.
Closing, Funding and Purchasing Impact
• GMACB Correspondent Funding will not purchase any FHA, VA or USDA loan with a Note date after April 8, 2011.
• GMACB Wholesale Operations will not close any FHA (Sponsored Originator) or VA loans after April 8, 2011.
Underwriting Impact
• 4506-T Processing: If the 4506-T cannot be processed by the IRS, personal income tax returns must be provided in lieu of the processed tax transcript based on the number of years required by AUS or by the Client Guide for manual or Jumbo underwriting. If a 2010 income tax return is provided, a 2009 income tax return must also be included. Signing the 4506-T at application and closing remains a GMACB policy. This applies to all products.
• Social Security Number Validation: For Fannie Mae loans, if Desktop Originator (DO) or Desktop Underwriter (DU) require validation of the borrower(s) social security number with the Social Security Administration, the loan file must contain evidence of the validation.
• Flood Insurance: It may be difficult to obtain flood insurance through FEMA during this period. Please note that GMACB requires evidence of flood insurance at time of purchase or closing.
GMACB will continue to provide updates regarding the government entities and the system and operational dependencies pertaining to the government shutdown.

New Role Suggested for RE Agents

2011-03-07T13:14:00.001-07:00

New Role Suggested For RE Agents

Monday, March 7, 2011
By Lew Sichelman

PARK CITY, UT—Among the numerous and often futile efforts to keep troubled borrowers in their homes, a former IndyMac Bank executive believes real estate agents represent a largely untapped resource.

Not agents who list and sell foreclosed properties, said Ray Mathoda, who now bills herself as a housing industry social entrepreneur.

Those professionals are “bank-facing” agents who work for investors.

Rather, consumer-centric agents who have much more to benefit by helping buyers and sellers, Mathoda said at the Midwinter Housing Conference here earlier this month.

Noting that borrower outreach has been pretty much a failure—even today, two out of every five owners who fall into foreclosure claim to have had no contact with their servicers—and that consumers are often poorly informed about their options, Mathoda said realty agents stand a good chance of reaching borrowers who are often “bombarded by a barrage” of confusing, uncoordinated array letters and phone calls.

At the very least, she added, agents can be used by servicers and investors to augment the efforts of overworked, understaffed housing counseling agencies.

Mathoda, who was chief administrative officer at IndyMac, has founded two socially responsible minority-owned businesses—AssetPlanUSA, a national provider of training and education solutions to the housing industry, and HausAngeles, a real estate management consulting firm and brokerage located in the Los Angeles area.

She has been an advocate for standardized, pro-consumer and pro-investor short sales since the start of the housing crisis, arguing that the primary goal of everyone should be financial stability, not home retention.

But noting that short sales aren’t the only viable option, for either the borrower or the investor, Mathoda said no one is in a better position to explain their choices to consumers than real estate agents.

She admitted that realty agents don’t always have the best reputations.

But she said that operating under their brokers’ supervision and an honor code of ethics, agents have the “good business sense” to help people decide what’s best for them.

In return, she added, an agent gets a referral source, if not a client, for life.
And perhaps even a listing or two along the way.

“Real estate agents are our only professional with a fiduciary obligation, yet we’re not taking advantage of that,” Mathoda said.

“If only half the nation’s one million agents sign on, that’s still just a 14-to-1 client-to-agent ratio.

“That compares extremely favorably to just 12 counselors in Los Angeles County.”
About 150 industry professionals attended the 2011 Midwinter Housing Finance Conference at the St. Regis Deer Crest Resort, which is situated in the lower Deer Valley here.

The conference is an annual event geared to the top executives from all facets of the housing and housing finance sectors, along with government regulators, economists and those that serve the business.

2011-03-04T11:43:00.000-07:00

Little Change in Rates

While investors continued to closely watch the events in the Middle East, there were few new developments there during the week. As a result, this week's important economic data had the greatest influence on mortgage rates. Daily volatility was high as investors reacted to the major economic reports, but mortgage rates ended the week essentially unchanged.

Much stronger than expected economic data during the week caused investors to prepare for the possibility that the economy is growing more rapidly than expected. The Chicago PMI manufacturing index rose to the highest level since July 1988, and the ISM Services index rose to the highest level since August 2005. Weekly Jobless Claims dropped to the lowest level since May 2008. Meanwhile, the Fed's Beige Book reported that many companies were passing through price increases due to rising commodity prices. As expected, mortgage rates reacted to the data by moving higher.

The results from Friday's Employment report were strong, but they did not exceed expectations. Against a consensus forecast for an increase of 200K jobs, the economy added 192K jobs in February. The Unemployment Rate declined to 8.9% from 9.0% in January. The gains were strong nearly across the board, with the exception of the government sector. Over the longer-term, the private sector must produce new jobs to sustain a recovery, so strength in the private sector was a good sign for the future. Average Hourly Earnings, a proxy for wage growth, fell short of expectations, remaining unchanged from January. Some investors were prepared for a much higher jobs number, and the on target results prompted a reversal of the rise in mortgage rates from earlier in the week.

Changes Are Coming For Rural Housing!

2011-03-03T12:43:00.004-07:00

BREAKING NEWS- USDA Loans Will Have Monthly MI as of October 1, 2011

BREAKING NEWS- USDA Loans Will Have Monthly MI as of October 1, 2011.
For the first time in the history of USDA, the Single Housing Guaranteed Loan Program has Implemented an Annual Fee. The annual fee will be calculated based on the guaranteed loan amount and based on the average annual scheduled unpaid principal balance for the life of the loan.

Effective October 1, the upfront guarantee will decrease from 3.5% to 2% for purchase loans. The up-front guaranteed fee for refinance loan transaction will remain at 1 percent. In addition, an annual fee of .30 will be calculated when the loan is made and every 12 months thereafter until the loan is paid in full or no longer outstanding and the guarantee cancelled or expired.

Overall, this change increases the monthly payment $15.88 per $100,000. For example, on a $100,000 home with 6% interest, the PI (with a 3.5% up front guarantee fee but not monthly fee) would be $620.53. With the new guidelines (with the upfront guarantee fee of 2.00 and the annual fee of .30), then the payment (PI and monthly fee) would be $636.41.

ACTION PLAN: NOW is the time to purchase…. Rates are still low, USDA is a great program with Zero Down Payment required and until October 1, no monthly mortgage insurance or annual fee.

See Below for Rural Housing Letters

RD AN No. 4551 (1980-D)
February 3, 2011

TO: State Directors
Rural Development

ATTENTION: Rural Housing Program Directors,
Guaranteed Loan Coordinators,
Area Directors and Area Specialists
FROM: Tammye Treviño
Administrator
Housing and Community Facilities Programs

SUBJECT: Single Family Housing Guaranteed Loan Program
Implementation of Annual Fee and Decreased Upfront Fee Effective
October 1, 2011

PURPOSE/INTENDED OUTCOME:

The purpose of this Administrative Notice (AN) is to plan for the implementation of
authorities granted the Secretary of the United States Department of Agriculture (USDA), via Public Law (P.L.) 111-212, Section 102 (July 29, 2010), in which the Secretary may collect from the lender an annual fee not to exceed 0.5 percent of the outstanding principal balance of the loan for the life of the loan. The intent of the annual fee is to make the Single Family Housing Guaranteed Loan Program (SFHGLP) subsidy neutral, thus eliminating the need for taxpayer support of the program. For Fiscal Year (FY) 2012, an annual fee of 0.3 percent of the outstanding principal balance will be required in order that the SFHGLP may maintain subsidy neutrality. Rural Development is in the process of adopting a rule effective with
loans obligated on or after October 1, 2011, under which all loan transactions will be subject to the annual fee. This anticipated policy change is being announced now to allow affected lenders time to make needed systems adjustments.

COMPARISON WITH PREVIOUS AN:

There are no previous AN issued on this subject.
EXPIRATION DATE: FILING INSTRUCTIONS:
February 29, 2012 Preceding RD Instruction 1980-D

BACKGROUND:

P. L. 111-212, “Supplemental Appropriations Act, 2010,” enacted on July 29, 2010,
Section 502(h)(8) of the Housing Act of 1949 (42 U.S.C. 1472 (h) (8)), was amended to
read as follows: “(8) Fees. – Notwithstanding paragraph (14) (D), with respect to a
guaranteed loan issued or modified under this subsection, the Secretary may collect from the lender – “(A) at the time of issuance of the guarantee or modification, a fee not to exceed 3.5 percent of the principal obligation of the loan; and “(B) an annual fee not to exceed 0.5 percent of the outstanding principal balance of the loan for the life of the loan.”

The annual fee provision of P.L. 111-212, will be applicable to purchase and refinance loan transactions. Implementation of an annual fee of 0.30 percent of the outstanding principal balance, will allow the Agency to reduce the up-front guarantee fee. Therefore under the new rule,effective October 1, 2011, the up-front guarantee fee for purchase transactions will decrease from 3.5 percent to 2 percent for purchase loans transactions. The up-front guaranteed fee for refinance loans transactions will remain at 1 percent.

Future updates to both the up-front and annual fee will be published in Exhibit K, of RD Instruction 440.1, available in any Rural Development office or on the Rural
Development website as follows: http://www.rurdev.usda.gov/regs/regs_toc.html. The
annual fee and upfront guarantee fee are subject to change annually to maintain a subsidy neutral program.

IMPLEMENTATION RESPONSIBILITIES:

Beginning October 1, 2011, it is anticipated that all purchase loans transactions will be charged (1) an up-front guarantee fee equal to 2 percent of the loan amount, and (2) an annual fee of 0.3 percent of the unpaid principal balance. The annual fee will be calculated and collected as follows:

1. The initial fee, for the first year of the loan will be determined and calculated
based on the loan amount. For remaining year of the loan, the annual fee will be
charged on the scheduled amortized unpaid principal balance (UPB) of the loan,
not the actual UPB.

2. The fee will be calculated annually and the lender will be notified of the annual
fee for the next 12 month period and billed to the lender each year on the
anniversary date of the loan. Thus, the initial annual fee will be calculated when
the loan is closed and the bill to collect the annual fee from the lender will be 12
months after the closing date of the loan. The annual fee for the next year will
also be calculated at that time.

3. The initial annual fee will be calculated based on the closing date of the loan.

4. Lenders will be billed annually, initially 12 months after the closed and
commencing annually for the life of the loan.

5. The payment will be due to Rural Development by the 15th calendar day after the
bill is generated.

6. The bill for each year will be retroactive for the prior year period.

7. A late fee of 4 percent of the annually billed amount will be assessed on the 15th
calendar day after the bill is generated.

8. If the fee for a loan is still unpaid after 30 days, an additional late fee may be
accessed on the unpaid fee amount.

9. The first payment due will begin at the end of the first 12 months after closing and will be for the prior 12 month period.

10. The annual fee, billed annually, will be collected through Pay.Gov, as follows:
• Fully web-based for lenders with 3,000 or less loans; and
• An overnight matching batch process for lenders with greater than 3,000
loans.

Rural Development is aware that lenders may need a minimum of 6 to 9 months lead time
to configure their systems to support the annual fee. Since this notice is published
approximately 8 months before the implementation date, it is anticipated that the lenders should be able to accommodate the annual fee by October 1, 2011. We will work closely with lenders and service bureaus to ensure they can support the annual fee requirement in the shortest possible timeframe. Supporting documentations for servicers as well as training materials for loan originators and servicers will be developed prior to the effective date of the annual fee.

Any questions concerning this AN should be addressed to the Single Family Housing
Guaranteed Loan Division at, (202) 720-1452.

2011-03-01T14:29:00.001-07:00

Poor Credit Tops List of Homeownership Barriers.
Rents Seen Rising
________________________________________
by Jann Swanson

Fannie Mae's latest National Housing Survey shows that Americans have markedly changed their perception of homeownership.

The most recent survey, conducted between October and December 2010, revealed that 64 percent of respondents felt buying a home was a safe investment. This is 6 points below the responses given in a January 2010 survey and 19 points below the answers to an initial survey conducted in 2003. Persons who are currently renting or who are delinquent on their mortgages ranked home owning lower with 53 percent of both subgroups feeling a home was a safe investment.

But at the same time, 84 percent of consumers believe that owning a home makes more sense than renting, a number that has remained relatively stable since the January 2010 survey. Respondents gave, as positive reasons for homeownership the quality of local schools (79 percent) and safety (also 79 percent.) These ranked far ahead of any financial considerations such as tax benefits or a belief that paying rent makes less sense. Among renters 28 percent thought renting made more sense.

The National Housing Survey was conducted by phone with 3,407 Americans age 18 and up. The sample included a random group of 3,004 members of the general population made up of 751 homeowners, 1,232 mortgage borrowers, and 871 renters. An oversample of 403 random delinquent borrowers was also contacted. Fannie Mae conducted similar surveys in January and June 2010 and from July to September 2010 and in 2003. The survey reported out some of its findings among subsets which included renters, delinquent borrowers, Afro-Americans, Hispanics, and "Generation Y" (adults aged 18 to 34.)

Americans have grown more confident about the stability of home prices than they were one year ago although this is not matched by their attitudes regarding strength in the economy. A majority (78 percent) feel that home prices will either stay the same or go up (73 percent held this position in January) versus 19 percent who expect further declines. Expectations among the 26 percent expecting an increase were modest; the average projected increase was 0.4 percent.

A larger share of respondents - 39 percent - expect rents to increase over the next year with the average estimate of increase at 2.8 percent.

"Over the course of the last year, we gained deeper insights into Americans' confidence in the strength of the housing market and the economic recovery," said Doug Duncan, Vice President and Chief Economist of Fannie Mae. "More Americans believe that housing prices will remain stable over the next year. We also are seeing encouraging signs in the positive attitudes toward homeownership among younger Americans, despite the severe impact of the housing crisis on Generation Y. But most respondents to our survey continue to lack confidence in the strength of the economic recovery, and they are less optimistic about their ability to buy a home in the years ahead. This sense of uncertainty is weighing on the housing recovery today and reshaping expectations for housing for the future."

Consumers' own financial situations have not improved over the last year. Six in 10 respondents said their monthly household income has remained about the same compared to January 2010 while nearly half of the delinquent borrowers reported a significant decline. Significantly higher expenses were reported by 34 percent of respondents and 22 percent reported significant declines.

Financial reasons were most frequently named as significant obstacles to owning a home; poor credit topped the list. 42 percent of renters and seventy-three percent of delinquent borrowers cited income which is insufficient for their existing expenses. Seventy-nine percent of renters believe they would have to make a financial sacrifice to own a home and 54 percent say it would require a "great deal" of sacrifice.

The number of delinquent borrowers who say they have considered defaulting on their mortgage has declined from 39 percent in January 2010 to 31 percent and most Americans (86 percent) continue to disapprove of strategic defaults even when the home is underwater.

Despite being hit hard by the housing crisis which saw the homeownership rates in its age group drop almost four percentage points since 2009 to 39.8 percent, Generation Y remains positive about owning a home. Sixty-one percent of that subgroup in the survey felt that buying a home is a safe investment. They gave a higher value to the impact of homeownership on societal status and as a place to raise children than did other subgroups in the survey.

Minority groups have a more positive outlook toward homeownership and the economy than the general population. Fifty-none percent of Hispanics expect their personal financial situation to improve over the next year compared to 78 percent of the general population and 40 percent of African Americans. About a third of each of the two minority groups say that it is likely they will buy a home in the next three years compared to about 25 percent of all survey respondents. Both Hispanics and African-Americans are more likely, in most cases by double digits, to place a high value on homeownership as a good place to raise children, a better way to provide an education for those children, a motivation to be a better citizen, a place to keep your family safe, and as a wealth builder than is the general population.. Only 38 percent of African Americans think the economy is on the wrong track compared to 62 percent of the general population and 59 percent of Hispanics

FHA Insurance Hike!

2011-02-23T10:09:00.004-07:00

FHA Commissioner Explains Logic Behind Insurance Premium Hike
________________________________________
by Adam Quinones

Last week the FHA announced it would increase annual mortgage insurance premiums by 0.25% to "bolster capital reserves", effective for case numbers ordered on or after April 18, 2011. Naturally the sudden spike in fees led to a chorus of Bronx cheers from inside the housing industry. Originator, Realtor, and Borrower feedback was generally themed along the lines of comments like "GREAT TIMING. REDUCING THE POOL OF QUALIFIED HOMEBUYERS WILL DEFINITELY BOOST THE HOUSING RECOVERY".

Please note sarcasm. And yes, capital letters were intended to imply yelling. Beyond the frustrated muttering that emanated from the trenches, a deeper explanation of this move was requested as this move seemed to make no sense at all. So in the spirit of transparency and open communication from industry leadership, FHA Commissioner David Stevens decided it was time to pen another letter offering more perspective on the issue. The following words are his, not MND's....

A Letter from the Desk of David Stevens
On February 14, I announced a new premium structure for FHA single-family mortgages, increasing the annual mortgage insurance premium (MIP) by a quarter of a percentage point (.25) on all 30-year and 15-year loans.

It is important for everyone in the industry to understand the reason for this action.

After careful consideration and analysis, we determined it was necessary to increase the annual mortgage insurance premium at this time in order to bolster our capital reserves and to help private capital return to the housing market. As many of you are aware, FHA has a Congressionally-mandated obligation to maintain a two percent capital reserve ratio in its Mutual Mortgage Insurance (MMI) fund, and to take swift and necessary actions if the reserves fall below that level.

The MMI fund has been below the two percent threshold in our last two annual actuarial reports to Congress. The FY 2010 actuarial report, submitted in November, projected that in the base case we would not get above two percent again until 2015. FHA has suffered greatly from poorly performing loans originated in years 2006 - 2008, especially seller-funded loans.

Raising the annual premium will enable FHA to increase revenues and have a positive effect on the ongoing stability of the MMI fund, which had capital reserves of approximately $3.6 billion at the end of FY 2010. Based on current volume projections, the annual MIP increase would generate an additional $2.5 - $3 billion annually.

We must balance this premium adjustment with the need to support the overall housing recovery. This quarter point increase in the annual MIP is a responsible step towards meeting the two percent threshold, while allowing FHA to remain the most cost effective mortgage insurance option for borrowers with lower incomes and lower down payments.

The changes we have implemented since I became Commissioner in July 2009 have, so far, helped shelter FHA from any external intervention which could have a negative impact on the business. Though there has been talk by some of eliminating all Government guarantees, I believe that responsible management of FHA will eliminate the need for intervention.

I recommended this increase based on FHA’s obligation to get the capital reserves back to the two percent level. And I understand the concerns of those in the industry about this increase. While I do not expect all to agree, we have made these moves to protect FHA so that it can continue its vital mission.

The monthly payment for an average loan in the FHA portfolio will increase by approximately $30 due to the increase in the annual MIP. The change impacts new loans insured by FHA on or after April 18, 2011. The upfront MIP will remain unchanged at one percent. HECM loans are not impacted by the pricing change.
For more details,

read Mortgagee Letter 11-10
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Why You Should Buy That Home Now

2011-02-22T09:05:00.000-07:00

Real Estate by AnnaMaria Andriotis (Author Archive)
Why You Should Buy That Home Now

The Obama administration's proposals this morning to extricate the government from mortgage lending sounded the death knell for Freddie Mac and Fannie Mae. They weren't good news for homebuyers, either. In the proposals were changes that will mean more expensive mortgages, with higher fees and, probably, higher interest rates, larger down payments and, in the near term, fewer lenders to choose from.
No Money Down? Not Anymore

As housing prices drop, mortgage lenders are requiring larger downpayments on homes. Kelsey Hubbard talks to WSJ's Mitra Kalita about what the changes mean for consumers. ( Watch video .)

The changes aren't effective immediately, and, some, if passed by Congress, won't go into effect for several years. Even so, they pose a dilemma for today's would-be homebuyers: loans are cheaper today than they're likely to be in the future – but one of the unintended consequences of the proposals could be another drop in home prices should higher mortgage costs dampen demand. Unfortunately, there's no single right answer, experts say. "Buyers shouldn't rush in – but there's no reason in most markets to delay waiting for something better to come along – it probably won't," says Barry Zigas, director of housing policy at the Consumer Federation of America.
Congress will ultimately decide whether Fannie and Freddie have a future, and whether the other changes could go into effect as soon as this fall. Here are the big three:

Smaller mortgages
In October, the maximum size of mortgages backed by Fannie and Freddie will shrink. (That's when the current limits are set to expire, and the president's report is calling for them to not be extended.) Currently, in high-cost cities like New York and San Francisco, homebuyers can borrow up to $729,750 for a single-family home; that amount drops 14% to $625,500. The $417,000 amount for more moderately priced areas will remain the same. The new limitation would, for example, render 10% of homes in San Francisco County ineligible for financing backed by Fannie or Freddie, according to analysis by the California Association of Realtors. It could also crimp refinancing for borrowers who try to get a home loan beyond these limits.
Higher fees

In November, the Federal Housing Administration could raise annual mortgage insurance premium fees by 0.25% for all borrowers, according to proposals. The hike comes out to an extra $250 per $100,000 of mortgage per year, which borrowers can pay upfront or have rolled into their mortgage. The new premium could be as high as 1.2%, up from a previous maximum of 0.95%. Over the life of a 30-year $300,000 mortgage, the higher rate means at least an additional $12,000 more in payments. Separately, two of the administration's proposals would provide mortgage insurance for some mortgages -- for a fee, which would be passed along to the borrower.
Bigger down payments

Currently, borrowers can try to get a mortgage from a bank with just 5% down by taking on mortgage insurance – mostly because that mortgage is then sold off to Fannie Mae or Freddie Mac. That requirement would gradually increase to 10%, according to the proposals, but a Freddie Mac spokesman says no implementation details are available at this time.

There are other government groups with a similar agenda, and similar effects on homebuyers. Housing regulators are currently considering making it harder to get a mortgage – higher down payments are possible, as are other hurdles – and are expected to offer specifics in April. Around the same time, mortgages backed by Freddie Mac (starting March 1) and Fannie Mae (starting April 1) will get more expensive by 0.25% to 0.50%. Later in the summer, the Consumer Financial Protection Bureau, which is expected to make mortgages a top priority, could make the process of originating a mortgage more expensive for the lender by requiring, for example, more personnel to check documentation, says Keith Gumbinger, vice president at HSH Associates, which tracks the mortgage market. And those costs will likely be passed along to borrowers as well.

Long term, consumer advocates worry that if the government stops backing private mortgages, as Fannie Mae and Freddie Mac do currently, lenders will get out of the market and consumers will have fewer options. But for now, it's simply possible that mortgages will become more expensive, as lenders react to the uncertainty that's just been introduced to the market. As it is, mortgages have already become more difficult to obtain. In August 2010, the most recent data available from mortgage data firm CoreLogic, the average mortgage borrower had a credit score of 767, higher than the average score of 761 six months prior.

And in the long term, should these proposals go into play, a healthier housing market could ensue, says Stu Feldstein, president at SMR Research, which tracks home loan data. The most sweeping message of the proposals is that the government won't help every American buy a home, especially if they can't afford it. "Houses will be sold to people with financial wherewithal to buy them and will reduce foreclosures going forward," he says.

5 Reasons To Buy Now!

2011-02-18T10:13:00.004-07:00

Selling Your House? 5 Reasons To Do It NOW!
by The KCM Crew on February 15, 2011 •

The conventional wisdom when selling a home has always been to wait until the ‘Spring Buying Season’. Over the years, that has seemed to make sense and is now accepted as a good strategy for those who want to sell their house and receive the best possible price. This real estate market has shattered many previously held beliefs. The wisdom of waiting for a spring market is another belief that is about to fall. Here are five reasons why?

1.) Interest Rates Are On the Rise
Interest rates have spiked up rather dramatically over the last ninety days and are now over 5%. Initially, an increase in rates has a positive effect on the market as it forces buyers off the fence. However, it also eats into a buyer’s purchasing power. As rates increase, the mortgage amount a buyer qualifies for decreases. This will eventually have a negative impact on prices.

2.) Your Dream Home Will Never Be Cheaper
If your family goal is to sell your current house and take advantage of the fabulous selection of properties currently available to buy the home of your dreams, DO IT NOW! Prices will continue to soften in most markets. However, if you are buying, COST should be more important than PRICE. Cost can be dramatically impacted by rising mortgage interest rates. Do the math and decide if now is the time.

3.) Buyers Are Out Early
There is mounting evidence that buyers are coming out earlier this year. A belief that now is a good time to buy coupled with the increase in interest rates has started the buying season early.
Pete Flint, CEO of Trulia:

“We’re seeing a national resurgence of buyer and seller activity on Trulia.com. In January alone, we experienced an unprecedented level of site traffic including 11 million unique visitors – which is more than 70 percent year-over-year growth. We’ve are now experiencing 100,000 property views per minute.”
The National Association of Realtors just reported that the number of house sales increased 12.9% over last month.

4.) Inventory Increases Every Spring
Every year there is an increase of inventory which comes to market as we approach the spring. Here is the number of listings available for sale in 2010.
• February – 3,531,000
• March – 3,626,000
• April – 4,029,000
We believe there will be an increase in these numbers in 2011 as there is a pent-up selling demand created by the weak market of the last few years. You won’t have to worry about this increasing competition if you sell now.

5.) We Are in the Eye of the Foreclosure Storm
While banks are trying to rectify their foreclosure procedures, there is a large supply of discounted properties which has been delayed coming to market. This inventory will be released sometime in the next few months. Foreclosures sell on average at a 41% discount. When released they will be competing with your house for the buyers in the marketplace. If you are looking to sell in 2011, you want to sell before this inventory becomes your competition.

CNN Money quoted the leadership Of RealtyTrac on this issue:

“We’ve now seen three straight months with fewer than 300,000 properties receiving foreclosure filings, following 20 straight months where the total exceeded 300,000,” said James Saccacio, CEO of RealtyTrac.
“Unfortunately,” he added, “This is less a sign of a robust housing recovery and more a sign that lenders have become bogged down in reviewing procedures, resubmitting paperwork and formulating legal arguments related to accusations of improper foreclosure processing.”

“We expect a spike in the first quarter,” said Rick Sharga, a RealtyTrac spokesman.

Bottom Line
These are five strong reasons to sell now instead of waiting until later in the year. Sit down with a local real estate professional today and decide the best options for you and your family.

RURAL Housing USDA Funding May Be Coming Soon To A Lender Near You!

2010-04-30T10:47:00.005-06:00

USDA • USDA funds status as of April 27, 2010:

Total unobligated balances remaining for USDA fiscal year 2010: $1,130,860,689.38

Purchase: $1,046,482,690.77
Refinance: $84,377,998.61

USDA anticipates that current funding will likely be exhausted by May 7, 2010.

But Wait…… The U.S. House of Representatives recently passed the Rural Housing Preservation and Stabilization Act of 2010 (H.R. 5017). Through this legislation, the guarantee fee in the USDA Guaranteed Rural Housing (GRH) Program may be raised to offset any need for Congressional appropriations. Additionally, H.R. 5017 would authorize USDA Rural Development to guarantee up to $30 billion in loans in Fiscal Year 2010. This would represent an additional $18 billion in loan making authority for the remainder of this fiscal year. Be advised that there is a requirement in this bill to increase the UPMIP from 2% to 4%. Before these changes can be implemented, similar legislative action will need to occur in the U.S. Senate.

First Time Buyer Seminar Workbook

2010-02-18T18:14:00.002-07:00

Use Full Screen For Better Viewing

First Time Buyer Seminar

2010-02-18T18:11:00.002-07:00

Use Full Screen For Better Viewing

FHA changes for borrowers

2010-01-20T12:54:00.003-07:00

FHA CHANGES COMING SOON!

Basic Breakdown: (we will have a new mortgagee letter tomorrow that may give more details)

1) Upfront MIP will go from 1.75% to 2.25% The initial up-front increase is included in a Mortgagee Letter to be released tomorrow, January 21st, and will go into effect in the spring.
2) Sellers contribution will go from 6% to 3% This change will be posted in the Federal Register in February, and after a notice and comment period, would go into effect in the early summer.
3) The 10% down payment will only effect borrowers below 580. Which won’t effect your borrowers since there aren’t any lenders broker or correspondent going below 620.
This change will be posted in the Federal Register in February and, after a notice and comment period, would go into effect in the early summer

As soon as I get exact dates and more information, I will get it out immediately. Wed Jan 20, 2010 12:41pm EST
•
WASHINGTON, Jan 20 (Reuters) - The U.S. Federal Housing Administration said late Tuesday it was increasing borrowing costs for homeowners getting loans backed by the government in an effort to shore up the agency's finances and avoid a taxpayer bailout. The FHA said it would increase the up-front mortgage insurance premium, which is paid by the borrower when the loan is made, to 2.25 percent from 1.75 percent. And it would raise the minimum down payment required to secure an FHA-backed mortgage for less creditworthy borrowers.
REGULATORY NEWS | BONDS

Why is the FHA making this move?

In late 2009, an independent auditor found that the FHA's capital reserves were below the 2 percent required by Congress. In fact, the FHA has capital reserves equal to just 0.53 percent of the value of the thousands of outstanding U.S. home mortgages it insures. So, the agency is trying to increase the quality of its borrowers in order to reduce the number of loans that end up in default. But it doesn't want to seriously impact the ability of borrowers to get FHA-backed loans, which now make up half the market. So it is tweaking the rules around the edges.

What does the FHA decision to raise borrowing costs mean?

The biggest immediate change is the increase in the up-front mortgage insurance premium. For a loan of $100,000, the mortgage insurance premium would be $2,250, up from the current $1,750. A $500,000 loan would therefore be $11,250 instead of $8,750. Those fees can be rolled into the loan. The FHA also said it was cutting the amount of aid sellers could provide buyers to 3 percent of the purchase price from 6 percent. That's designed as a counterweight to inflated house prices stemming from borrowers just tacking on the closing costs to the purchase price of a home. FHA is also asking Congress to increase its second premium, the so-called annual premium which is paid over the life of the loan. FHA Commissioner David Stevens said the FHA plans to lower the upfront premium after it gets approval to raise the annual premium, currently capped at 0.55 percent of the loan amount.

How many borrowers will be affected by this decision?

Stevens told reporters on Wednesday that he couldn't answer that question. And some analysts say that's because it's almost none. The FHA is raising its minimum credit score for a 3.5 percent down payment to 580 while scores below that level would be required to have 10 percent down. But most FHA lenders won't lend to anyone below 620 so it's unclear how many borrowers would really be affected by the down payment change. And the other changes might cause some borrowers on the margins to be unable to get loans as a result of increased up-front costs but most borrowers will just have to scrape up the extra cash. FHA says that's by design. The FHA faced some pressure to raise the down payment minimum to 5 percent, but FHA says that would go against the agency's mandate to bolster housing finance for needy borrowers.
David Berenbaum, chief program officer at the National Community Revinvestment Coalition said the FHA has a difficult task of navigating its competing goals. "The burden to the individual borrower is modest and should ensure, overall, that borrowers have access to responsible credit," he said.

(Reporting by Corbett B. Daly; Editing by W Simon )

First Time Homebuyer Tax Credit Update & Changes

2009-11-06T11:48:00.003-07:00

THE FIRST TIME HOME BUYER TAX CREDIT IS BEING EXTENDED!

Here is the brief version, see below for all of the details

There have been some slight revisions “Buyers who have owned their current homes at least five years would be eligible for tax credits of up to $6,500. First-time homebuyers — or anyone who hasn't owned a home in the last three years — would still get up to $8,000. To qualify, buyers in both groups have to sign a purchase agreement by April 30, 2010, and close by June 30. The credit is available for the purchase of principal homes costing $800,000 or less, meaning vacation homes are ineligible. The credit would be phased out for individuals with annual incomes above $125,000 and for joint filers with incomes above $225,000.”

Tax Credit for Homebuyers

First-Time Homebuyers (FTHBs): First-time homebuyers (that is, people who have not owned a home within the last three years) may be eligible for the tax credit. The credit for FTHBs is 10% of the purchase price of the home, with a maximum available credit of $8,000.

Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

Current Owners: The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.

Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

What are the New Deadlines?

In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.

Tax Credit Versus Tax Deduction

It’s important to remember that the tax credit is just that… a tax credit. The benefit of a tax credit is that it’s a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if a first-time homebuyer were to owe $8,000 in income taxes and would qualify for a tax credit of $8,000, she would owe nothing.

Better still, the tax credit is refundable, which means the homebuyer can receive a check for the credit if he or she has little income tax liability. For example, if a first-time homebuyer is eligible for a tax credit of $8,000 but is liable for $4,000 in income tax, she can still receive a check for the remaining $4,000!

Higher Income Caps

The amount of income someone can earn and qualify for the full amount of the credit has been increased.

Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible

Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.

Maximum Purchase Price

Qualifying buyers may purchase a property with a maximum sale price of $800,000.

------------------------

Remember, the new tax credit program includes a number of details and qualifications. For more information or answers to specific questions, please call or email me today.

In addition, you may be able to benefit from additional housing related provisions, including the following:

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Tax Incentives to Spur Energy Savings and Green Jobs
This provision is designed to help promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.

Landmark Energy Savings

This provision provides $5 Billion for energy efficient improvements for more than one million modest-income homes through weatherization. According to some estimates, this can help modest-income families save an average of $350 a year on heating and air conditioning bills.

Repairing Public Housing and Making Key Energy Efficiency Retrofits To HUD-Assisted Housing

This provision provides a total of $6.3 Billion for increasing energy efficiency in federally supported housing programs. Specifically, it establishes a new program to upgrade HUD-sponsored low-income housing (for elderly)

Grants and The Home Run Grant!

2009-09-08T15:23:00.001-06:00

Condo changes coming, Hang on for the bumpy ride!

2009-08-27T13:09:00.006-06:00

If you would like a copy of the full letter from hud on these changes, please email me or call me and I would be happy to get it to you.

What is the Mortgage Disclosure Improvement Act Policy (MDIA) and How does it effect you?

2009-08-18T17:45:00.010-06:00

As many of you know there have been many recent new changes that have gone into effect as of July 30, 2009. One of those changes is the MDIA which is the Mortgage Disclosure Improvement Act Policy.

There are a few things that you have to remember for this new policy:

1) There are now waiting periods that the buyer has in order to review the documents of 3 days, each time they are disclosed or re-disclosed.

2) You cannot close a loan for a min. of 7 business days from the first set of documents signed

3) Nothing other than credit can be ordered until we have signed documents. If the documents were marked "mailed" we have to wait 3 business days and on the 4th day, we can order appraisal etc..

4) Anytime the Truth in Lending changes .125% higher or lower we must re-disclose and then wait 3 business days.

5) A business day is considered any day other than Sunday and Federal Holidays.

Basically, what this boils down to is that the fees disclosed to the borrower can not be .125% (eighth) higher or lower than what was originally disclosed. If it is an eighth higher or lower, than we will have to re-disclose those fees and wait 3 business days before closing.

So you ask, what are the fees that will be included in the TIL that can effect and trigger off the 3 days waiting period of re-disclosure? I have included the list of items below for your review.

Many Realtors have also asked what they can do to help this along and make it smoother for us to make sure our numbers are as accurate as possible. A few things that you can do to help your loan officer are:

1)encourage your buyer to get with the loan officer as soon as they can to sign the application.

2)ANYTIME you have an addendum done, please send it over as soon as you can. especially if there are any changes to the purchase price in any way. this will trigger a re-discloser.

3)Short Sales can be another one that can bugger up the closing and trigger off a
re-disclosure. We all know that we can wait months sometimes for the official acceptance from a bank. And usually when they finally approve the offer there are changes to the purchase price or the closing costs that they will pay. And, usually the bank wants to close ASAP. This is all fine and dandy but if we have to change any of the numbers that are included in the TIL, a new re-disclosure has to be signed and 3 business days starts.

4)If the lender gets the file done early and everyone wants to close early... A new re-disclosure will have to be sent out since less interest days will need to be collected and this effects the TIL. So, this can be signed and 3 business days later you can close early.(because the original one will include the amount of days going off of the REPC (purchase contract).

Do you see the pattern? There are a lot of things that can trigger re-disclosure.

I estimate that borrowers will sign re-disclosed documents at least 3 times before closing. (this is the minimum) The first time will be for the Pre-qual with a TBD address. The second will be once they go under contract and the address and purchase price etc. is established. And thirdly, we will send out a re-disclosure 5 days before closing just to be safe.

So 3 times min. they will re-sign docs (luckily it is only a few docs that need to be re-signed)

I am preparing my borrowers when I sit down with them of how many times they will get to sign things so it is not a surprise. The agents can assist us by letting the buyer know that this is normal and part of the new MDIA law that was effective July 30, 2009.

If we didnt have enough to think about, well there is the HVCC (appraisal) new law that we have to add on top of these deadlines too. That is another entry, another day.

Once again, please let me know if you would like further information and assistance.

Cindee Stone
801-381-3863
www.cindeestone.com

Here is that list that I promised you.

Fees that affect the APR on the Truth in Lending (TIL)

Administration Fee
Closing/Settlement Fee
Courier Fee (Overnight delivery, courier, messenger fees)
Discount Points
E-mail/E-Doc Fee
Final Inspection Fee
Flood Cert Fee, if Life of Loan
Loan Origination Fee
Mortgage Broker Fee
Mortgage Insurance Premium (MIP, PMI, VA Funding Fee)
Payoff Processing Fee
Prepaid Interest (until 1st of following month)
Processing Fee
Reconveyance TRACKING Fee
Tax Service Fee
Underwriting Fee
Wire Fee

Fees that DO NOT affect the APR on the TIL:
Appraisal or Appraisal Waiver Fee
Credit Report
Doc Prep Fee
Endorsements
Hazard/Flood Insurance Premiums
HOA Dues
Reconveyance Fees (Not Tracking Fee)
Recording Fees
Reserves (Taxes and Insurance)
Termite/Pest Inspection Fees
Title Insurance Premium

$100 HUD Loan Program

2009-08-18T14:25:00.003-06:00

Economic Calendar for August 17-August 21 2009

2009-08-17T11:47:00.001-06:00

Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.

Economic Calendar for the Week of August 17 - August 21

Date ET Economic Report For Estimate Actual Prior Impact
Mon. August 17 08:30 Empire State Index Aug 2.20 -0.55 Moderate
Tue. August 18 08:30 Building Permits Jul 576K 570K Moderate
Tue. August 18 08:30 Housing Starts Jul 598K 582K Moderate
Tue. August 18 08:30 Producer Price Index (PPI) Jul -0.2% 1.8% Moderate
Tue. August 18 08:30 Core Producer Price Index (PPI) Jul 0.1% 0.5% Moderate
Wed. August 19 10:30 Crude Inventories 8/14 NA 2.52M Moderate
Thu. August 20 08:30 Jobless Claims (Initial) 8/15 553K 558K Moderate
Thu. August 20 10:00 Index of Leading Econ Ind (LEI) Jul 0.6% 0.7% Low
Thu. August 20 10:00 Philadelphia Fed Index Aug -2.0 -7.5 HIGH
Fri. August 21 10:00 Existing Home Sales Jul 5.00M 4.80M Moderate

Volatility Accompanies Subdued Consumer Spending

2009-08-17T11:45:00.001-06:00

Last Week in Review

There's no time like the present, so the famous saying goes. And that's certainly true when it comes to the good inflation news we saw last week. But, remember, things with inflation could change in the future as the economy continues to try to climb out of the recession...which could have a negative impact on Bonds and home loan rates. Here's what you need to know.

The Consumer Price Index (CPI) for July was unchanged, and, as you can see in the chart below, the year-over-year CPI fell 2.1%, the largest 12-month decline since 1950.

-----------------------
Chart: Consumer Price Index

There was also good news on inflation last week from the Labor Department. Worker Productivity came in better than expected, rising at its fastest pace in 6 years, as companies cut costs and try to maximize output from their current workforce. This efficiency helps curb inflation, which is good for Bonds and home loan rates.

So how does this news tie in with the economy overall? For one thing, consider last week's Retail Sales Report, which showed that Retail Sales dropped in July by 0.1%, well below the 0.8% gain that was expected. This report negated the better than expected Wal-Mart second quarter earnings report and signals that consumers are still saving more than spending.

Although low consumer spending may seem like a bad thing, it is actually not such bad news in terms of inflation because of a little known (and rarely discussed) but critical facet of the economy called the velocity of money.

The velocity of money concept is simple. It goes like this: when you buy a pair of shoes, the owner of the shoe store takes that profit and buys a big screen TV, then the TV store owner buys something else, etc. The same dollar passes through the economy over and over again, triggering growth, jobs and, ultimately, inflation. The latest Retail Sales Report tells us that the velocity of money effect has been stagnant...that shoe store owner is not running out to buy a big screen TV with the profits. Once consumer spending begins to increase and the velocity of money increases, inflation is likely to follow. This will be something to look for as the economy continues to stabilize.

Something else to look for is the approaching end of the Fed's Bond purchase program. Home loan rates have stayed historically low since the program began in January. So, this is another variable that could push Bonds down and home loan rates up in the future.

Bonds and rates did manage to end last week better than where they began, but there was a great deal of volatility along the way. Give me a call if you want to look at your situation and see if now is the time for you to act.

LAST WEEK MARKED MORE TREASURY PURCHASES AND ANOTHER RATE AND POLICY DECISION FROM THE FED. CHECK OUT THIS WEEK'S MORTGAGE MARKET VIEW TO LEARN EVEN MORE ABOUT WHAT THE FED DOES.

Forecast for the Week

While there will be a break in the Fed Treasury auctions this week, there will still be plenty of news that could affect the markets. Tuesday will bring more inflation news in the form of the Producer Price Index (PPI), which provides information about wholesale level price changes. We'll also get a read on the housing market with Tuesday's Housing Starts and Building Permits Report as well as Friday's Existing Home Sales Report.

Thursday brings both the Philadelphia Fed Report, which is one of the most-watched manufacturing reports overall, as well as the Initial Jobless Claims Report. We have seen three weeks of readings under 600,000 claims after 22 consecutive weeks of readings over that level. However, it may be that those numbers have dropped as a result of Claims benefits expiring, rather than people finding employment.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Bonds and home loan rates were helped last week by tame inflation readings and a strong demand for Treasuries. I will be watching closely to see what this week brings.

Chart: Fannie Mae 4.5% Mortgage Bond (Friday Aug 14, 2009)

The Mortgage Market View...

What the Fed Does
By Steve Sampson

The Fed provides banking services to America's banks and to Uncle Sam. That's the nitty-gritty part of its job. On the more glamorous side, it also develops and implements the nation's monetary policy--and in the process influences interest rates.

Mighty Money Supplier

The media often suggest that the Fed "sets" interest rates--as if the Fed chairman just says "let the rate be 4 percent" and the nation's banks make it so. But that's not how it works. Banks determine interest rates based on all sorts of factors, from recipients' credit histories, to the current money supply, to how low their competitors are willing to go.

The Fed has no control over many of these factors, but it can influence the money supply--in three ways. First, it loans money directly to banks, though only on a limited scale. Second, it occasionally changes how much money banks must keep on reserve. Third, and most important, the Fed uses what it calls "open market operations" to move money into and out of the banking system.

We're Banking on You

To get an idea how the Fed's open market operations work, imagine you're the manager of Knowledge News National Bank (it's OK, we trust you). Your job is to make as much money as you can for the bank, and one of the ways you do that is by making loans, on which the bank earns interest.

The Fed requires KNB (and all banks) to keep a certain percentage of customer deposits in reserve at all times. As KNB's manager, you use deposits to make loans. But you must also maintain the required reserves--and you never know how much money customers will deposit or withdraw each day. When you're short on reserves at the end of the day, you must find a way to cover the difference.

Luckily, you know where to go. Other bank managers have extra money on hand, and they want to loan it out to earn interest. It's a perfect match. All you have to do is agree on an interest rate. If lots of banks have money to loan and not many are shopping for it, supply and demand dictates that rates will go down. On the other hand, if lots of banks want to borrow money and not many have it, rates will go up.

Smooth Open Market Operator

Recognizing this, the Fed influences interest rates by buying and selling securities on the open market. If it wants rates to go up, it starts selling lots of securities. The buyers of those securities pay the Fed millions, even billions, of dollars. That money comes right out of the buyers' bank accounts, reducing the amount of reserves in the banking system. Money gets "tight," and the rate banks charge each other for overnight loans--the "federal funds rate"-goes up.

The same supply-and-demand rules apply in reverse. When the Fed buys securities, it pays millions, even billions, of dollars into the sellers' bank accounts, increasing the amount of reserves in the banking system. With more money out there to loan, the federal funds rate goes down.

Over time, changes in the federal funds rate lead to changes in short-term interest rates, followed by changes in long-term interest rates. When the Fed nudges those rates down, it's hoping for some good old-fashioned economic stimulation. When it nudges rates up, it's hoping to fight inflation.

This article was provided to you through collaboration with Every Learner.
Copyright © 2002-2009 Every Learner, Inc. All rights reserved.

This week in review of announcements....

2009-08-17T11:37:00.000-06:00

We have a very busy housing news week ahead of us.

This morning we have seen the NY Empire State survey. The median expectations we're calling for growth of 5.0 follow -.6 decline the month before. According to the index the Business conditions have expanded by 13 points up 12, new orders up nearly 8 points to 13.4 and shipments increasing 3 points to 14.1. The employment index improved, employee payrolls up -7.5 versus a reading of -21.8 the month before.

At 1 PM today we received the housing market index.

Tomorrow
We will se housing starts which is looking for another strong advance. As well as PPI (producer price index).

Thursday
Jobless Claims
LEI (leading economic indicator)
Philly Fed Manufacturing survey

Friday
Existing home sales

Should I Refinance Now?

2009-08-14T11:01:00.001-06:00

The Fed's been at it again, offering words that sound encouraging at first blush, confirming that their buying program of Mortgage Backed Securities is in full swing and will continue as needed. Of course, the media will pick this up and offer their own interpretation, saying "Good news, the Fed's words on continuing their purchasing program mean that rates will continue to drop lower, and remain low into the summer..." But is this really what that means? Not so.

Here's the truth.

Yes, the Fed has been buying Mortgage Bonds, but if you look at what they are purchasing, they are buying a lot of FNMA 30-yr 5.5% and 5.0% Bonds...which won't have much of an impact on present interest rates. Why? First, see the Fed's purchases for yourself by hitting this link: Direct Link to View Fed Mortgage Bond Buying - http://www.newyorkfed.org/markets/mbs/index.html.

So why is the Fed buying these Bonds? Well if you think about it, it's very smart of the Fed...and maybe even a little sneaky...because 5.5% Bonds actually represent outstanding mortgages with rates of 6 - 6.50%, which are precisely the loans being refinanced at today's great interest rates.

Stay with me here...

With rates at present low levels, many of the mortgages in these FNMA 5.5% pools being bought up by the Fed will be refinanced and paid, thus giving the Fed a quick recoup on some of their investment. And this is likely a big reason why the Fed said they could continue this purchasing program beyond June, if necessary. Bottom line, the Fed buying these higher rate coupons will not necessarily help rates to move lower, as their actions do not impact the loans being originated at today's low rates.

Here's the most important part.

Sometimes I talk to clients who are in a situation where it makes sense to refinance right now, and save $250 per month for example. But when they hear the media throwing around teases of lower rates ahead, they decide to hold off on making the decision to save the $250 per month right now, in the hopes of gaining another $30 per month in additional savings with a lower rate than where we stand presently. Now clearly, rates could turn higher, and this window of opportunity could pass them by entirely.

The clincher is this:

Even if those clients ultimately are correct in timing the market, and eventually grab that lower rate and save another $30 per month - think of what they have lost by waiting. While they delayed, they lost the savings they could have gained by taking action sooner - or in the example used, $250 - for every single month they waited. So even if they got lucky and obtained the rate they were looking for, it could take years to make up what they lost by waiting.

I don't want anyone to miss an opportunity by either waiting, or not understanding what is at stake. Let's talk further on this - call or email me and let's discuss what this might mean for you.

TGIF!

2009-08-14T10:53:00.003-06:00

This morning we've seen the Consumer Price Index (CPI) which came in roughly unchanged. On average consumer prices are down 2.1% the largest decent since 1950. With this news mortgage prices are roughly unchanged.

2009-08-12T10:32:00.001-06:00

There is quite a bit of news that can move rates today. This morning we've seen the trade balance which reached a total deficit in goods and services of $27 Billion due to a jump in Oil prices following a forecast of $28.5 billion. This would normally be bad for rates as it revises the GDP better showing signs of stabilization globally, however we are in pretty much a holding pattern until the FOMC adjourns. The major market mover today will be the results of the $23 Billion in 10 year notes auction at 1 PM (EST) today.

Have a great day!

Jay Cain

2009-08-11T12:57:00.002-06:00

In the news this morning worker productivity grew to its highest levels seen in six years as employers require more out of their remaining staffs. Labor costs fell by the most in nearly 8 years at a decrease of 5.8% with productivity jumping 6.4%. The average hours worked fell at 7.6% while compensation rose .2%.

U.S. Wholesalers decreased inventories for the 10th straight month, showing a decrease of 1.7% which is the longest series of decline since recording begun in 1987. Sales we're up .4%.

In Fed news, today's begins the 2 day FOMC meeting, however no changes are expected and 37 billion in 3 year notes to be auctioned today.

Auctions are as follows

Today - $37 Billion 3 year notes
Tomorrow - $20 Billion in 10 year notes
Thursday - $15 Billion in 30 year bonds

Have a great day and hope for great auction turn outs!

Jay Cain

2009-08-06T11:37:00.001-06:00

In the news this morning, initial jobless claims decreased by 38k to the expected
550k pushing the four week moving average to 555,250. However continuing claims rose 69k to 6,130,000. With this being basically the only news on the day mortgage prices are worse by about .125.

2009-03-09T09:48:00.001-06:00

The following script is intended to be used when speaking with your clients, prospects, and referral sources. It explains the current market conditions and will help solidify your position as a Trusted Advisor. You can even use it when you leave a voicemail message.

"Stocks opened to their worse levels since the mid-1990s, but are trading higher this morning.

There could be some good news later this week when Congress holds a hearing on mark-to-market. The Securities Exchange Commission Chief Accountant and the Chairman of the Financial Accounting Standard's Board will be testifying at the Thursday hearing. Hopefully, Congress can come up with a mark-to-market solution that will help the credit system flow again.

Currently, Mortgage Bonds are holding above the 25-Day Moving Average and the Falling Trendline. I recommend floating for now. But with rates already near 35-year lows, we may need to be ready to lock. I will keep you posted.""

© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved

2009-03-05T11:55:00.001-07:00

"The morning began with Stocks lower and Mortgage Bonds pushing higher, as Traders anticipate a lousy Jobs Report tomorrow. The move higher in Bonds is important because it means they have managed to break above a difficult ceiling of resistance, at least for the moment.

In other news, Productivity in the fourth quarter dropped as the economy contracted faster than companies cut jobs and hours. And while the number of Initial Jobless Claims was slightly better than expected, the four-week moving average of Jobless Claims reached the highest level since October 1982.

Tomorrow's Jobs Report is expected to be dismal--estimates are for 650,000 jobs lost, but the number could be even higher. While this is unfortunate for our economy and those individuals, it could cause Bond prices to improve. I recommend floating ahead of tomorrow's report, and I will be watching closely to see how the markets react."

© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved.

2009-03-04T12:11:00.001-07:00

"Yesterday, Bond prices climbed to an important level of resistance at the Falling Trendline before being pushed back to the 25-Day Moving Average. These indicators are important because rates will not significantly improve unless prices can move above this ceiling.

In the news today, the ADP Report came in worse than expected--showing U.S. private firms shed 697,000 jobs in February. Adding to insult was a downward revision to January’s number, which erased another 90,000 jobs. Also today, the Obama administration released its Housing Rescue Plan designed to help responsible homeowners.

Currently, prices are in the midst of a trading range. Therefore, I recommend floating, but be prepared to lock if the situation changes."

© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved.

2009-03-03T11:40:00.000-07:00

"Stocks are looking to rebound today after yesterday's sell off that saw the Dow fall below 6,800 for the first time since October 1996.

On the radar today, Federal Reserve Chairman Ben Bernanke and Treasury Secretary Timothy Geithner will discuss the budget in front of separate Senate and House committees. They will try to shed some light on plans to bring the ailing US economy back to life.

For now, I recommend floating, as prices are near the middle of a comfortable trading range. If a change of course is required as information on the budget is presented, I will let you know."

© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved.

2009-03-02T12:34:00.003-07:00

"In early trading this morning, the Dow fell below 7,000 for the first time since 1997, as Stocks are trading lower on fears that the recession is getting worse.

Also pressuring Stocks lower is news that insurance giant AIG lost more than $61 Billion in the 4th quarter of 2008--which is the biggest loss ever for a US company. As a result, the government is preparing to provide AIG with a $30 Billion line of credit using money set aside from the TARP fund created last year.

Despite the drop in Stocks, Bonds are trading near unchanged levels. For now, I recommend carefully floating, but be prepared to lock if Stocks reverse higher."

© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved.

2009-01-23T12:12:00.001-07:00

Inflation was back in the news today. Fed member Frederic Mishkin appeared on CNBC this morning stating that inflation could come to the forefront given all of the government programs. The news is keeping Mortgage Bond prices near unchanged levels.

The Federal Reserve Bank of New York reported they purchased $19B in mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae between January 15 and January 21, bringing its total purchases so far up to $52.6B, or around just 10% of their $500B commitment through the end of June. The program was instituted to shore up the slumping housing market.

For today, I am currently recommending floating as support seems to be holding just below where Mortgage Bonds are trading. With the Fed still buying Mortgage Backed Securities there is a potential that home loan rates could improve in the near term."

© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved.

2009-01-22T09:59:00.001-07:00

It's been another wild and volatile morning for Mortgage Bonds after a slew of disappointing economic news and negative corporate earnings reports initiated an early sell-off in the Stock market.

Initial Jobless Claims reached its highest level since November 1982. In addition, housing remains weak as Housing Starts fell more than 15% in December and Building Permits also came up short.

Mortgage Bonds are attempting to trade above support. I recommend floating for now, but I will let you know if today’s volatility requires a change of course."

© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved.

2009-01-21T10:54:00.001-07:00

Mortgage Bonds are trading just above important support at the Rising Trendline, and with no economic reports scheduled for release today, pricing could be influenced by action in the Stock market. After a rough start in 2009, Stocks are hovering right near important support as well, and could bounce higher from here.

Adding a slightly positive tone to Stocks this morning is news that IBM beat earnings estimates for the 4th quarter. The tech bellwether said it also plans to earn $9.20 a share in 2009 versus expectations of $8.70.

After a few days of pricing pressure, Mortgage Bonds are trading near oversold conditions, which could make prices ripe for a reversal higher. Couple that with the strong underlying support from the Fed and it suggests for the time being to float."

© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved.

2009-01-16T11:49:00.001-07:00

"This morning, the Consumer Price Index for 2008 was reported the lowest since 1954, indicating that inflation is not a problem. The big news of the day, however, is in the banking sector.

Citigroup reported a $8.29 Billion loss, completing its worst year ever since its inception in 1812. Bank of America also lost $1.79 Billion in the 4th quarter, making 2008 the bank's first yearly loss in 17 years. However, Bank of America received a lifeline late last night in government funds in exchange for preferred stock.

Currently, the Stock market is rebounding a bit higher, which is applying selling pressure on Bonds. However, prices have already improved since early lows. For now, I recommend floating, as we watch to see if prices can hold."

© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved.

2009-01-15T14:03:00.001-07:00

"There has been a barrage of economic data and news released today, yet Bonds have remained relatively steady so far this morning. Meanwhile, JPMorgan Chase surprised the market with an earnings report that beat expectations. It's been awhile since a financial Stock actually surprised to the good side.

In other news, inflation is virtually non-existent at the wholesale level as the Producer Price Index showed that prices fell in December for the fifth consecutive month. Tomorrow’s Consumer Price Index report will show how costs have increased or declined on the consumer side, and I will be watching to see how the markets respond.

Overall, Bonds continue to move in a sideways pattern, thanks in part to the Fed buying support of Mortgage Backed Securities. For now, I recommend floating.

© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved.

2009-01-14T12:00:00.001-07:00

"Mortgage Bonds improved and Stocks lost more ground today on the awful Retail Sales news. Sales plunged by 2.7%, far worse than expected. Even worse, when you strip out autos, the number declined 3.1% versus expectations of a 1.4% decline. Retail sales have now fallen for six months in a row.

In the banking sector, Deutsche Bank, which is Germany's largest bank, warned of a fourth-quarter loss of $6.3 Billion, and Chase announced they are pulling out of their broker wholesale lending. This has added to the selling pressure on Stocks.

The Fed's Beige Book will be released this afternoon at 2 pm and could influence the markets, so stay tuned. For right now, I recommend floating to see if prices can revisit resistance at the all-time price highs, about 40 basis points above present levels."

© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved

2009-01-13T13:43:00.001-07:00

"Stocks are trading near unchanged levels after being under selling pressure yesterday due to Alcoa's 4th quarter loss of $1 Billion and rumors that Citigroup has more credit losses mounting.

In other news, Federal Reserve Chairman Ben Bernanke discussed the financial crisis this morning, saying that the highest priority is to promote global financial stability. On a positive note, he said that the US Federal Reserve still has enough policy tools to combat the current recession.

For now, I recommend floating. But I will be watching carefully to see if Stocks rebound after losing 500 points in the last 5 days. If that happens, Bonds could drift a bit lower and a change of course may be needed. I will keep you posted."

© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved.

2009-01-12T14:17:00.000-07:00

"Today kicks off the 4th quarter earnings season for the Stock market. No one expects any stellar reports to be in store, but many eyes and ears will be on what these companies say regarding future earnings.

In other news, Oil prices are tumbling this morning to near $38 a barrel on concerns that slumping demand will outweigh output cuts by OPEC. Due to the present economic slowdown, Oil consumption is expected to fall by 1 million barrels a day this year in the US alone.

Currently, Bond prices are down, but may rebound a bit later if the Fed steps in with some buying. Therefore, I recommend floating for now.

© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved.

2009-01-09T11:27:00.001-07:00

"The Labor Department reported this morning that there were 524,000 jobs lost during the month of December, this was worse than expectations of 500,000. All told, there were 2,600,000 jobs lost in 2008 and was the biggest job loss in any calendar year since 1945, when 2,750,000 jobs were lost as the wartime economy was demobilized.

Adding further sting to the report was the Unemployment Rate, which shot up higher than expectations to 7.2%, the highest reading in 16 years.

I will continue to recommend Floating for now, but be mindful that Mortgage Bonds are trading at all-time historic highs - so a pullback lower would not be a surprise."

© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved

2009-01-08T11:41:00.000-07:00

"Mortgage Bonds are trading higher and at historic levels as the Fed was likely active in the markets continuing their purchase program this morning.

Meanwhile, Stocks are under selling pressure thanks to a rash of earnings warnings from the nation's retailers. Wal-Mart said today that 4th quarter profits will miss expectations after one of the worst holiday shopping seasons on record, while Macy's and Limited Brands cut their earnings forecast after the weak December sales readings. Macy's also said they are closing 11 stores.

In other news, the markets are bracing for a bad Jobs Report tomorrow and if the number is indeed bad, Mortgage Bonds could improve further as Stocks will likely come under selling pressure. Therefore, I recommend floating into tomorrow's report, but I will let you know if the news of the day requires a change of course."

© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved.

2009-01-06T13:05:00.001-07:00

"The Fed was back in the markets this morning aggressively buying Mortgage Backed Securities pushing prices higher as it tries to lower home loan rates. The Fed will be buying $500B of Mortgage Bonds - that equals approximately $4B in buying power each trading day...that is pretty good buying support, which could help mortgage rates move steadily sideways to lower over the first two quarters of 2009.

At 2pm ET the Fed will release the Minutes from the December 16 Meeting which may shed some light on the Fed's view of the economy and the reasoning behind the aggressive cut. The Fed lowered the Fed Funds Rate by .75% to a range of 0 to .25% at that meeting.

With the Fed providing underlying buying support to Mortgage Bonds, I am recommending to float longer-term, but on short-term transactions we should be ready to lock at a moment's notice to protect pricing. We will likely see the lowest rates in our lifetime during the first two quarters of 2009, so get this message to everyone who can benefit and have them lock in during this once in a lifetime opportunity."

© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved.

2009-01-05T12:08:00.001-07:00

"Happy New Year! Mortgage Bonds are off to a great start in 2009, as the Fed begins its planned purchase of Mortgage Backed Securities. This process will continue gradually through June and should help buoy Mortgage Bond prices. For today, there are no economic reports due out, so Mortgage Bonds will likely respond to today's Fed announcement.

In other news, President-Elect Obama's new stimulus package will reportedly be worth $775 Billion and will include hundreds of Billions of dollars worth of tax breaks and credits for individuals and businesses. This is good news for the economy and should help with consumer confidence over time
© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved.

2008-12-31T14:05:00.000-07:00

"Mortgage Bonds are soaring higher this morning, thanks to the Fed reiterating its New Year's Resolution to purchase $500 Billion of Mortgage Backed Securities by June 2009. The announcement has led to another wild disconnect between Mortgage Bonds and Treasuries, as the 10-Year Note is trading sharply lower, while Mortgage Bonds are sharply higher.

In other news, Initial Jobless Claims were reported at 492,000, which was well below expectations that it would rise to 575,000. The Labor Department said that seasonal volatility led to the surprise drop in unemployment claims

© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved

2008-12-30T11:05:00.001-07:00

"Bonds prices declined yesterday afternoon and so far this morning, good news for Stocks is keeping the selling pressure on Bonds. GMAC received a $6 Billion lifeline today from the Treasury to help stave off bankruptcy or a shut down. Stocks are moving higher on the good news, which is pulling more money out of Bonds.

In other news, Consumer Confidence came in at a record low of 38.0. This time last year, Consumer Confidence was at 88.6. So there's been quite a decline during 2008.

© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved.

2008-12-29T13:59:00.001-07:00

"Stocks opened higher this morning but have since reversed course, as tensions in the Middle East sent crude oil higher on concerns of supply disruption. Higher oil prices could boost Stock prices in the energy sector and may help lift the entire Stock market later today, but the rise in Middle East tensions may also help Bonds improve as traders seek a safe haven for investments.

There are no economic reports due out today, and the Bond market faces another short holiday week--with the market closing early on Wednesday and remaining closed all day Thursday in celebration of the New Year. This holiday environment creates lower trading volumes, which can cause unexpected price movements and additional volatility.

© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved

2008-12-24T11:09:00.001-07:00

"Typically bad economic news is good for Bonds. And, as Mortgage Bonds are trading higher on the heels of some Bond friendly data, that's good for rates.

Initial Jobless Claims jumped by 30,000 to 586,000 and the four-week average of continuing claims rose to 4.32 million, which is the most since December 1982. Also on the news front, Personal Spending fell 0.6% in November amid mounting job losses and economic uncertainty. While this number was bad, it was a bit better than expectations.

© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved.

2008-12-23T12:46:00.000-07:00

"Declining home sales are in the news this morning, as the median sales price of existing homes fell more than 13% over the past year. In addition, New Home Sales came in below expectations--falling to their lowest reading in 27 years.

During times like this, it's important to remember that while inventories are high and need to come down for housing prices to stabilize, the combination of abundant inventory and low interest rates does provide a great opportunity for buyers to purchase homes below market prices and at great monthly payment rates.

Currently, Mortgage Bonds are clawing their way back, after opening lower this morning.

© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved.

2008-12-22T12:14:00.000-07:00

"Mortgage Bonds are trading lower as we kick off the short holiday week. The Bond markets will close at 2 pm Eastern Time on Wednesday and will be closed all day Thursday for Christmas. Friday will be a regular trading session.

There are no economic reports due out today. However, later this afternoon, a record $38 Billion auction of 2-year Treasury Notes could influence prices, as the market absorbs additional supply.

Currently, Mortgage Bonds are trading in a wide range between resistance and support.
© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved.

2008-12-19T12:02:00.001-07:00

Good Morning,

There is no economic news today.

In a speech from Bush this morning, the Auto makers will receive 17.4 billion to assist them with their intermediary capital issues. The auto makers will have until March to have a plan together regarding how they will restructure. The 17.4 Billion must be repaid, however no time line was spelled out in the speech. The loans may act as an ease for the companies to enter into chapter 11 bankruptcy.

What has this done for MBS? We have been all over the place this morning.
As stocks increase on the news, treasuries and MBS have suffered somewhat.

Many people that have been following MBS have noticed that mortgage pricing should probably be better than it is. That leads of course to the Why?
With the volatility that we've had recently for one with rates dropping significantly, prepayments - due to rates dropping, forward unmet commitments, foreclosure risk, EPO's and EDP's - Investors really don't know where to price anymore. For example, if you purchased MBS with a yield of say 1%, it is going to take some time to see those profits. If the loan pays off early - well, that was a total waste of time for the investor as they will see no gains whatsoever. The reality of gain I was told is roughly 4 years of performance.

Jay Cain - Bank of Ann Arbor

2008-12-18T14:05:00.000-07:00

Hmmm, any gains that we had are now gone. Rates didnt look as good this morning as they did yesterday morning. but we had a wild ride yesterday afternoon.

"After all the big Fed news from earlier this week, Bonds began the day on the quiet side as they attempt to regain some of yesterday's losses.

Meanwhile, the Job market continues to struggle. The four-week average of new Jobless Claims reached the highest level since December 1982, while the four-week average of continuing Claims is the highest since January 1983.

© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved.

2008-12-17T12:43:00.001-07:00

hmmm, no economic news today but the market has been going crazy. we have had 2 price increases so far this morning. but, rates are still incredible!! I am not going to post because i am anticipating more change going on today.

"The Fed lowered the Federal Funds Rate by .75% to a target range of 0% to .25%, and also lowered the Discount Rate by .75% to .50%. The statement that followed the cut said that the Fed was prepared to take aggressive steps to revive the sagging US economy.

In the past, Mortgage Bonds have reacted negatively to Fed cuts as fears of inflation come to life. But the Fed stated that inflation pressures have diminished appreciably and expects inflation to moderate further in coming quarters, hence the reason home loan rates are improving.

There are no economic reports due out today
© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved.

2008-12-16T14:55:00.001-07:00

Rates are looking GREAT!!!!
up to 4.875% on conventional and up to 5% for FHA.

"It's Fed Day! And that means the Fed will release its interest rate decision and policy statement later this afternoon. Currently, the Fed Funds Rate stands at 1%. But, indications are that the Fed will cut by .50% or .75%.

In other news today, Consumer Prices dropped more in November than any other month on record, due in large part to falling gas and energy prices. Based on these numbers, inflation is almost non-existent and could shift thinking towards fears of deflation. Also today, housing starts for November came in at their lowest level since records began in 1959, and building permits were reported at record lows.

So far this morning, Bonds have improved, but have struggled to gain too much ground. The tame inflation numbers and the dismal housing numbers should have sparked a better reaction in Bonds, but traders are cautious ahead of a Fed Rate cut, which historically hurts Bond prices. Therefore, I recommend floating for now, but be prepared to lock this afternoon."
© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved.

Todays Rates and Updates on the Mortgage Market

2008-12-11T09:43:00.000-07:00

"Mortgage Bonds had a nice rally yesterday afternoon and continue to test resistance at the previous price highs for 2008. Stocks, meanwhile, are facing some uncertainty as opposition in the Senate threatens to delay or kill the emergency loan legislation for GM and Chrysler that was approved by the House last night.

In other news, Initial Jobless Claims reached their highest level in 26 years. The data shows that businesses are laying off workers at a rapid pace, as the current recession drags on.

© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved.

Rates look great, FHA is around 5.375% and Conventional around 4.99%

Wouldn't This Be Amazing!!!

2008-12-10T13:57:00.001-07:00

Fannie, Freddie May Waive Appraisals for Refinancings (Update1)

By Dawn Kopecki

Dec. 10 (Bloomberg) -- Fannie Mae and Freddie Mac, the mortgage-finance companies seized by the U.S. government, are considering waiving a requirement for new appraisals on refinanced loans, their regulator said.

“If they refinance someone, rather than doing a loan mod, do they need a new appraisal if they already have the credit?” Federal Housing Finance Agency Director James Lockhart told reporters after a speech in Washington today. “That’s an issue that’s being discussed. They’re looking at it.”

Fannie and Freddie, which own or guarantee $5.3 trillion of the $12 trillion U.S. home loan market, have accelerated anti- foreclosure efforts and are now debating how to deal with delinquent borrowers who owe more than their homes are worth. The S&P/Case-Shiller home-price index dropped 17.4 percent in September from a year earlier after a 16.6 percent decline in August. The gauge has fallen every month since January 2007.

“An upside down mortgage is a difficult thing to deal with,” Lockhart said. Whether the new loans would require or could even get mortgage insurance is a consideration, as well as accounting issues surrounding the valuation of the refinanced loan on the companies’ balance sheets, he said.

“That’s why it’s hard to make a decision,” Lockhart said.

Washington-based Fannie and McLean, Virginia-based Freddie accounted for 73 percent of all new mortgages in the first nine months of this year as private sources of financing contracted, Lockhart said.

A Freddie spokeswoman, Sharon McHale, didn’t have an immediate comment. Brian Faith, a Fannie spokesman, wasn’t immediately available to respond.

Mortgage Insurance

Lockhart also said today the Federal Housing Administration will likely supplant Fannie and Freddie as the largest source of new home loans as borrowers find it harder to obtain the mortgage insurance necessary to qualify for non-government financing.

FHA, a government agency that insures loans for private lenders, will probably overtake Fannie and Freddie within the next quarter, Lockhart said in his speech to the Women in Housing & Finance, a society of industry professionals.

“You will probably see in the next quarter the Fannie and Freddie lines going down and FHA coming up,” Lockhart said. “Fannie and Freddie are so dependent on mortgage insurers because they can only buy loans with 80 percent loan-to-value ratios and they aren’t able to do as much.”

FHA has taken a larger role in helping troubled homeowners refinance their mortgages partly because of the higher standards that Fannie and Freddie require of lenders to buy or guarantee their loans. Those standards have become more of an obstacle as mortgage insurers including PMI Group Inc. and Radian Group Inc. are now charging higher prices and being more selective in their coverage to curb losses stemming from a surge in foreclosures.

To contact the reporter on this story: Dawn Kopecki in Washington at dkopecki@bloomberg.net.

Last Updated: December 10, 2008 15:02 EST

Todays Rates and Updates on the Mortgage Market

2008-12-10T11:47:00.003-07:00

Rates are looking great! Conventional is as low as 4.99% and FHA as low as 5.375%!*OAC

"Mortgage Bonds are trading sideways in a wide range between support and resistance. There is a large $28 Billion 3-year Note auction this afternoon, which could pressure the Bond market due to added supply.

Stocks are rising today on word that Congress will approve a $15 Billon bailout to keep the Detroit 3 auto makers from seeking bankruptcy protection. Also helping Stocks are shares of energy companies, which are getting a lift from higher oil prices this week. Oil, now at $44.50 a barrel, has risen almost $4 a barrel since Friday's close.

Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved

Hang on for a bumpy ride! still no more news on the Famous 4.5% that the government is going to magically do. Who knows, maybe the market will do it on its own.

2008-12-09T15:24:00.001-07:00

Mortgage Bonds are trading higher, as Stocks trade slightly lower. There are no high-impact economic news reports scheduled for release today, so Bonds will likely take their direction from Stocks.

In other news, it appears a $15 Billion rescue plan for GM, Ford and Chrysler is close to agreement in Congress. Also this morning, news reports indicate that five members of the House Financial Services Committee are sponsoring a bill that would force the SEC to reinstate the uptick rule. Since the removal of the uptick rule in July 2007, market swings have gone wild. So reinstating this rule could help alleviate the excessive volatility in both Stocks and Mortgage Bonds.

2008-12-05T13:07:00.003-07:00

One of my lenders sent this to me today. We don't know a lot about it yet, it is just talk as of now. So, as the whole thing unfolds I will put details out for you.

Other good new, Utah housing rate is 5.98%! yahoo!

FHA and Conventional rates had a worsening today. But, they still look great.

"There has been alot of talk about a proposed plan regarding first time homebuyer purchase money reaching 4.5%. My personal opinion on this is put your money where your mouth is. Hovnanian a large builder requested rates to 3% and were shot down. I understand the plea behind this, if you can stir up enough purchases demand rises, foreclosures potentially go down due to them selling and poof we're back on track."

My market report gave me this news about things happening today.

"The November jobs report was released today showing some of the worst numbers in decades. Non-farm payrolls dropped 533,000 last month and was only the fourth time in 58 years that our economy lost over 500,000 jobs. The unemployment rate ticked up to 6.7%, the highest since October of 1993.

The news sent the Stock markets lower while the Bond markets didn't have much of a reaction. We are currently in a bad economy and only news of a better report would have been a surprise.

So, keep your fingers crossed that we will continue to get better rates.

Should I Refinance Now?

2008-12-04T18:26:00.000-07:00

Now is a Great time to Refinance!! Especially with todays announcement that they are going to try and lower the rate to 4.5%! Can you imagine a 30-Year fixed loan at 4.5%?

The real estate market needs this desperatly to re vitalize the market.

It isnt there yet (a lot has to happen to really make that work) but today we saw conventional as low 5.25% and FHA as low as 5.5%. *OAC.

Your credit, LTV and other factors will help determine what you can get for a loan. A lot goes in to what decides your rate will be, it is not the same for everyone across the board.

So, whether you wait or not will be your choice but just remember, it may never get to the 4.5%. And if what the rate is today works for you, dont wait.

What happened today is the following:

"This morning, the Initial Jobless Claims report came in at its lowest reading since the beginning of November. The four-week average, however, rose to its highest level in 16 years.

In other news, the Bank of England and the European Central Bank both cut interest rates today in an effort to revive their sagging economies. Here in the US, Secretary Treasurer Paulson is considering another plan to help boost the ailing housing markets. The Treasury already announced plans to buy Mortgage-Backed Securities issued by Fannie Mae and Freddie Mac and now wants to step up those purchases in a coordinated move to drive home loan rates down to 4.5%.

Currently, Mortgage Bonds are near unchanged levels this morning, as Stocks trade a little lower. Tomorrow, the Labor Department will unveil its Jobs Report for last month--and the markets are already bracing for poor numbers, which may help Bonds improve.

© Copyright 2001-2008 The Mortgage Market Guide, LLC. All rights reserved.