Archive for the 'Mortgage Update' Category
A Last Minute Credit Review Could Change Your Loan Terms
June 19th, 2010 Categories: Mortgage Update, Real Estate News
Under a new Loan Quality Initiative by Fannie Mae, a last minute credit review could change your loan terms.
In an effort to remedy the tsunami of foreclosures since 2007, Fannie Mae is putting more responsibility on the lenders and putting them on the hook if things go bad.
In other words, according to loan officer Dan Green, “the program shifts the onus of mortgage guidelines compliance away from the government-backed group and to the individual banks responsible for making loans.”
Green goes on to explain that consumers will notice very little difference – except for one thing. And that one thing is BIG.
“In the new LQI environment, Fannie Mae wants lenders to verify that an applicant’s credit profile did not change while the loan was in underwriting. If the profile did change and the lender happens to “miss” it, Fannie Mae might then refuse to buy the loan, burdening the bank with a loan (and possibly a loss).
Because of this added risk, it behooves banks to take each mortgage applicant’s credit report in hand, and do a complete re-pull just prior to closing.
To make sure the loan is saleable to Fannie Mae, banks will look for evidence of any of the following events occurring while the
loan was being underwritten:
- Did the applicant apply for new credit cards?
- Did the applicant run up existing cards?
- Did the applicant finance an automobile, or other major purchase?
If the more recent credit report reveals inconsistencies versus the original credit report, the mortgage is subject to a complete re-underwrite and a possible turndown.” In other words, a last minute credit review could change your loan terms.
These three question should be “no brainers.” I have always told my clients to wait – just wait – until they are in their house before doing anything that would change their credit report.
This new action by Fannie Mae simply emphasizes the need to be financially prudent before signing on the dotted line.
For a full explanation of the new Fannie Mae initiative, visit Dan Green here. And in the meantime, don’t do anything to jeopardize your loan terms
Michael
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Mortgage Rate Stability May Hinge on End of US Treasury Purchases of Mortgage Backed Securities
March 22nd, 2010 Categories: Mortgage Update
Our go to mortgage guy, Rob Clark, offers that mortgage rate stability may hinge on the end of a US Treasury program that purchased mortgage backed securities.
Rob goes on to say “According to some analysts, mortgage rates “wandered about aimlessly” last week. It is becoming apparent that the current economic recovery will be a very slow and muted affair, at least for the time being.
With manufacturing issues appearing to cool, consumers remaining on the sidelines, and, in last week’s Producer Price Index (PPI) and Consumer Price Index (CPU), inflationary pressures seeming to be nearly nonexistent, the Fed will likely be able to maintain its low rates for some time. The Fed’s policy statement last week said as much, with the Fed leaving rates unchanged again.
This week could be another week of the same for rates, but there are some unknowns coming. While many have pointed out that the Fed continues to have many tools available to influence rates, its campaign of buying mortgage-backed securities will come to an end on March 31st.
While there appears to be some significant stability to rates right now, markets can turn quickly. Hopefully it will not happen, but even a false rumor could lead to a spike in mortgage rates in the coming weeks.”
For Rob’s full report, click here.
Michael
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Mortgage Report for January 18, 2010
January 18th, 2010 Categories: Mortgage Update
Long-term mortgage rates moved down slightly last week as some of the recent optimism regarding the economy waned.
While industrial output increased a solid 0.6%, the increase was due to utility output related to the frigid weather gripping much of the nation.
Retail sales dropped by 0.3%, which was quite shy of the 0.5% increase that analysts had forecast. Fortunately, both the Consumer Price Index’s headline and core numbers increased only a scant 0.1%.
For more information on the mortgage market and why ARM indices don’t always move as expected, click here.
Rob Clark, Preferred Mortgage Group
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Mortgage Report for December 21, 2009
December 21st, 2009 Categories: Mortgage Update
Our mortgage report for December 21 sees interest rates left unchanged by the Federal Reserve. At the same time economic activity is picking up and the labor market is showing signs of recovery.
The next few months should see rates affected more by the market place than by government policies. Bottom line, we are probably in the last few weeks of sub-5% rates for 30 year fixed mortgages.
For my complete report, click here.
Rob Clark, Preferred Mortgage
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Mortgage Rates Fall But Then React to Good Employment News
December 7th, 2009 Categories: Mortgage Update
Mortgage rates are excellent right now and reached an almost all time low last week. Unexpected good news about revised unemployment rates moved the rates up slightly but 5 percent or below rates still offer an extraordinary opportunity for buyers.
Conventional, FHA and VA loans of $417,000 or less are all under 5 percent with 0 points; loans above $417k, up to $729,750 are 5% with 0 points.
The big news though is that as of the end of this week conventional loans of $417k or less will only allow for a debt to income ratio of 45 percent regardless of AUS (Automated Underwriting Systems) findings.
If the loan carries mortgage insurance it is a maximum 41 percent debt to income ratio. Some lenders have already moved to this maximum but everyone must be in compliance by the end of the week to align with Fannie Mae/Freddie Mac imposed changes.
For more click here. As always, thanks to Rob Clark, for the most up to date information.
Michael
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Mortgage Rates Show Slight Decrease for Home Buyers in Alexandria
November 16th, 2009 Categories: Mortgage Update
Mortgage rates are showing a slight decrease for home buyers in Alexandria with FHA, VA and conforming conventional loans in the 5 percent and 0 point range. Rob Clark, our go to mortgage guy offers this observation on the market:
“With limited economic data released last week, mortgage rates continued their recent trend of slowly moving downward. While we continue to see limited activity outside of conforming and FHA-backed mortgages, it is worth noting that jumbo mortgages are beginning to reappear more widely in the market, and the difference between conforming and jumbo rates has been shrinking.
This is a week full of economic data for markets to sort through. With recent signs that the labor market could be hitting bottom, any signal that indicates that the recovery is beginning to power up could start pressuring mortgage rates upward.
Both Retail Sales and Industrial Production are due this week. If these two influential reports show greater strength than anticipated, then the likelihood of increasing rates will grow. However, if they both come in lower than expected, we could see this trend of very slowly decreasing rates continue.
Both the PPI and CPI also are also due this week. If they are near expectations, they will create some additional downward pull on rates.”
Next we’ll be bringing you up to date information on the extension of the first time home owners tax credit so stay tuned.
Michael
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Mortgage Rates are Volatile But Relatively Unchanged Going Into September
August 31st, 2009 Categories: Mortgage Update
Mortgage rates were volatile again last week but closed relatively unchanged as we move into September:
- FHA/VA below $417k and below – 5.5% with 0 points; 5% with 1 point
- FHA/VA above $417k to $729,750 for FHA and $812k for VA – 5.5% with .05 points
- Conventional conforming $417k and below – 5.25% with 0 points.
- Conforming plus from $417k to $719,750 – 5.625% with 0 point.
Folks are stepping up the intensity of their home search as the end to the 2009 First Time Buyer Tax Credit is now in sight. Remember, buyers must close by November 30 to take advantage of the credit. To be safe, I recommend the buyer be under contract by October 15 to insure closing on time.
No news yet on an extension of the tax credit but stay tuned as we move further into the year.
Bright spots -
- According to the S&P/Case-Shiller 20-city home price index, we’ve now gone two months with prices actually increasing.
- The ISM Manufacturing Index isexpected to tic over the 50-mark, indicating that manufacturing is finally expanding.
For a full report on mortgage rates, click here.
As always, thank to Rob Clark at Preferred Mortgage,
Michael
Related articles:
10 First-Time Homebuyer Tax Credit Questions and Answers
What Are the Chances for An Extension on the First Time Home Owners Tax Credit?
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Out-of-Town Appraisers May Hurt Home Sales
July 20th, 2009 Categories: Mortgage Update, Real Estate News
In early May, Rob Clarke, one of our favorite mortgage brokers, noted in a column that:
“The Home Valuation Code of Conduct (HVCC) is in full swing in Northern Virginia and we are now required to order appraisals on conventional loans through a panel of appraisers as determined by each lender.”
Another article in Saturday’s Washington Post, called attention to the new practice and how out-of-town appraisers may hurt home sales. Rather than a broker relying on a favorite appraiser, as in the past, that appraisal must now be ordered by someone at the lender’s office who is not directly involved in the deal.
On the surface it looks like a great idea but in reality, lenders are relying on appraisal management companies who take the order and then send it out. Critics say that it has increased the price to consumers while reducing the fees paid to the appraisers who actually do the work. Realtor’s and lenders alike have also noticed that appraisals are often coming in lower than they should, killing deals unnecessarily.
The biggest complaint is that appraisers hired by the management companies are sometimes not familiar with the neighborhoods they are working in. AND they base their price estimates on recent sales that are not at all comparable properties, including short sales and deeply discounted foreclosures.
The National Association of Realtor’s is keeping a close watch on this issue and we hope to see some changes before the end of the year.
Need help in determining the value of your house? Give me a call at 703.927.4554 for a free Comparative Market Analysis.
Thanks for stopping by,
Michael
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Mortgage Rates Moving Up
June 1st, 2009 Categories: Mortgage Update
Mortgage rates moved up this week for no easily discernible reason. After fluctuating wildly, the rates ended higher than we have seen them in months.
This jump is a good reminder that rates can move at anytime and with the current economy that move is going to be UP.
- FHA/VA below $417k and below – 5.5 % with 0 points.
- FHA/VA above $417k to $729,750 for FHA and $812k for VA – 5.5% with 1 point.
- Conventional conforming $417k and below – 5.625% with 1 points.
- Conforming plus from $417k to $625,500 – 5.25% with 1 point.
For my full report, click here.
Thanks to Rob Clark at Preferred Mortgage for this timely update. Think about how today’s rates and the first time buyers credit fit in with your home buying plans and then give me a call at 703.927.4554.
Michael
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Home Valuation Code of Conduct Influences Mortgage Lending in Northern Virginia
May 12th, 2009 Categories: Mortgage Update
The Home Valuation Code of Conduct (HVCC) is in full swing in Northern Virginia and we are now required to order appraisals on conventional loans through a panel of appraisers as determined by each lender.
The process is fairly similar to VA loans where we are no longer able to choose the appraiser. FHA is the only loan type still available where the lender can specify the appraiser.
Mortgage rates remain volatile with conflicting economic data a heavy influence. I expect it will be months before a clear trend become apparent. As of Monday, rates look like this:
- FHA/VA below $417k and below – 5% with 0 points.
- FHA/VA above $417k to $729,750 for FHA and $812k for VA – 5% with 1 point.
- Conventional conforming $417k and below – 5% with 0 points.
- Conforming plus from $417k to $625,500 – 5.25% with 1 point.
For my complete market report, click here.
Rob Clark, Preferred Mortgage.
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