HARP refi - watch out for scams! Rates = 3.875% 30 year fixed

Freddie Mac has released the results of its Primary Mortgage Market Survey (PMMS) for the week ending Dec. 1, 2011, showing the 30-year fixed-rate mortgage (FRM) averaging 4.00% with an average 0.7 point cost, up from last week when it averaged 3.98%. Last year at this time, the 30-year FRM averaged 4.46%. The 30-year fixed mortgage has averaged at or below four percent for the fifth consecutive week while the 15-year fixed has hovered around 3.30%.. Additionally, adjustable-rate mortgages (ARMs) ticked down slightly averaging new record lows for the second straight week.

The latest Lender Processing Services Inc. (LPS) October Mortgage Monitor report shows that mortgage delinquencies have continued a steady decline, now nearly 30 percent off their January 2010 peak, while foreclosure inventories are on the rise, hitting an all-time high at the end of October of 4.29 percent of all active mortgages. The average days delinquent for loans in foreclosure extended as well, setting a new record of 631 days since last payment, while the average days delinquent for loans 90 or more days past due but not yet in foreclosure decreased for the second consecutive month.


A consumer fraud alert has been issued to protect homeowners from HAMP-related mortgage modification scams.  The alert tells homeowners who are struggling to make their mortgage payments to be aware of con artists that promise to save their homes and lower their mortgage debt or their payments and offers these homeowners specific tips:

No special assistance is needed to apply for a HAMP modification and paying a third party does not improve your likelihood of obtaining one. Beware of persons claiming to be HAMP experts. Homeowners can make application on their own or with the help of a Housing and Urban Development (HUD) approved housing counselor. Applying for the program is always free.
No third party can approve a modification; this can only be done by the loan servicer.
No advance fee is necessary for mortgage modification services and in most cases charging in advance for a modification is illegal.
Homeowners should verify the authenticity of any individual or company that claims to be affiliated with HAMP or displays a seal or logo representing the U.S. government by calling the Homeowner's HOPETM Hotline.
Beware of individuals or companies that offer money-back guarantees or that advise stopping mortgage payments or not contacting the mortgage servicer.


30 year fixed - 3.875% + 0% cost points for rate
20 year fixed - 3.750% + 0 % points for rate
15 year fixed - 3.250% + 0% points for rate
10 year fixed - 2.99% + 0% points for rate
5/1 ARM - 2.50% +0 points for rate
7/1 ARM - 2.750 % + 0 points for rate
10/1 ARM 3.250% + 0 points for rate

FHA/VA
30 year fixed - 3.875% with +0 % points for rate
5/1 ARM - 2.75% with + 0 points for rate
7/1 ARM - 3.25 with + .625 % CREDIT point for rate

Jumbo - over 576,000 (in Fairfield County, CT) to 2,000,000
30 year fixed - 4.625 % with 0 points for rate
15 year fixed - 4.125% with 0 points for rate
5/1 ARM - 3.375% - 0 points for rate
7/1 ARM - 3.875 % - 0 points for rate
10/1 ARM - 4.375% with 0 points for rate

Rates and market update this week - Volatile is the market

This week  Mortgage Rates worsened as trading in the secondary mortgage market and beyond grew increasingly volatile.  Best-Execution offerings may be the same or slightly higher than last week, but if the rate remains the same, closing costs will likely have increased. Market volatility is a reaction to the situation in Europe and the impending summit this weekend. We have to expect the volatility to continue indefinitely. Treasuries bounced around higher and lower with 10-year notes ultimately closing down 6/33 in price to yield 2.18%. Mortgage Backed Security prices on 30-year current coupon 3.5 and 4.0 were flat to 1/8 point lower/worse.

The general market is -

BEST EXECUTION 30 YEAR FIXED -   3.99% - 4.250%
FHA/VA - More 3.875% today, 3.75% still out there for some.
15 YEAR FIXED -  Mostly 3.5%
5 YEAR ARMS -  low 3% range, huge variations from lender to lender.

The U.S. Senate voted Thursday to restore higher loan limits, approving, 60-38, an amendment to a federal spending bill that would raise the maximum size of loans that can be guaranteed by government-controlled mortgage companies Fannie Mae (FNMA) Freddie Mac (FMCC) and the Federal Housing Administration. The amendment was sponsored by Sen. Robert Menendez (D., N.J.), but things don't look so good for it in the Republican-controlled House, as many argue that the current reduced loan limits help scale back government support of the mortgage market.
NAR reported this week that Existing Home Sales dropped 3% in September from August but are still up about 11% versus a year ago. The median sales price was $165,400, down 3.5% from $171,400 a year earlier. The inventory of previously owned homes listed for sale, meanwhile, fell at the end of September to 3.48 million. That represented an 8.5-month supply. Foreclosures and other distressed properties represented about 30% of sales.
30 year fixed - 3.99% + 0 cost points for rate
20 year fixed - 3.875% + 0 points for rate
15 year fixed - 3.375% + .50 points for rate
10 year fixed - 3.250%  0 cost points for rate
5/1 ARM - 2.625% - 0 points for rate
7/1 ARM - 2.875%  + 0 points for rate

FHA/VA
30 year fixed - 3.875% with 0 points for rate
5/1 ARM - 3.00 with 0 points for rate
7/1 ARM - 3.25 with 0 point for rate

Jumbo - over 635,000 to 2,000,000
30 year fixed - 4.750 % with 0 points  for rate
15 year fixed - 4.250% with 0 points for rate
5/1 ARM - 3.375% - 0 points for rate
7/1 ARM - 3.50 % - 0 points for rate
10/1 ARM - 4.375% with 0 points for rate

The lowest rate in the wrong mortgage program will cost you real $$.

A first time homebuyer had done some online research and told me they wanted a CHFA mortgage with a 30 year fixed rate of 4.00%. They had excellent credit, income and enough cash to put down 20% on their home purchase. They wanted more cash on deposit after their purchase and they were putting down 10% with both loan programs.

Here are the options I gave them -

CHFA = 2,000 in points for the rate
PMI = 150.00 per month for 5 years minimum (= 9,000)(average is 10 years)

200,000 loan @ 4% = 954.83 + 150.00 = 1104.83 per month

10% down 30 year fixed
1 time MI payment (complete tax deduction) = 2,250

200,000 loan @ 4.375% = 998.57 per month


CHFA = 1104.03 x 5 years = 66,241.80
10% down = 998.57 x 5 years = 59,914.20

A real dollar savings to them of 6,300.60 over 5 years, and remember the 150.00 per month for the mortgage insurance did not pay down the principal of their loan - it is a direct benefit to the lender.

and over 30 years
CHFA = 361,739
Conventional = 359,485

This is the kind of long and short term planning that is necessary for the best debt program for your needs.

Rates fall to 1951 price

Fixed mortgage rates fell to the lowest level in six decades for the second straight week, according to new figures compiled by Freddie Mac. The GSE said the average rate on the 30-year Fixed Rate Mortgage dropped to 4.09%, the lowest rate since 1951. The average rate on the 15-year mortgage, a popular refinancing product, fell to 3.30%, also a new low.  Freddie Mac chief economist Frank Nothaft said continued investor worries over the debt crisis in Europe kept Treasury bond yields low, driving down mortgage rates in the process. Over the past week the yield on the benchmark 10-year Treasury fell to as low as 1.9% before rebounding to 2.08% on Thursday.
The market had a "slew" of economic news Thursday. The Consumer Pride Index was +.4% (higher than expected), but Jobless Claims were +11k to a total of 428k - higher than expected. The Empire State Manufacturing Survey General Business Conditions index inched down one point. Nationwide, Industrial Production increased 0.2% in August, and Capacity Utilization edged up to 77.4%. The Philadelphia Fed Index of General Business activity within the factory sector rose to -17.5 this month from -30.7 in August and 3.2 in July.
The impact of all this on rates was not particularly good, since the ECB coordination with our Fed will dampen the bid for safe assets (i.e., Treasury securities) and the CPI rose faster than expected in August. The 10-year US Treasury note yield increased as much as 13 basis points to 2.12%, after having dropped to a record low of 1.8770% three days ago and closed at 2.09%. Volume in Mortgage Backed Securities was light Thursday at just 64% of the 30-day average, according to Tradeweb's experience, and prices were worse by about .250.

The Federal Housing Administration is selling 11,000 to 13,000 foreclosed homes a month after re-engineering the way it manages and markets Real Estate Owned, or REO. For the first nine months of fiscal year 2011 (ending June 30) the average days-to-list and the average days-to-sell REO decreased by 76 days (61%) and 25 days (12%) respectively, as compared to Financial Year 2010, according to the commissioner's Sept. 8 testimony. This acceleration of sales has allowed FHA to reduce its REO inventory by nearly 40% in four months. "As a result of these initiatives and despite the spike in properties being conveyed to us, FHA's inventory of REOs is down to 48,324," Galante testified. The agency had an REO inventory of nearly 80,000 REO at the end of March.
30 year fixed - 3.99% + .50 cost points for rate
20 year fixed - 3.75 % + 0 points for rate
15 year fixed - 3.250% + .50 points for rate
10 year fixed - 3.250%  0 cost points for rate
5/1 ARM - 2.50% - 0 points for rate
7/1 ARM - 2.875%  + 0 points for rate

FHA/VA
30 year fixed - 4.00% with 0 points for rate
5/1 ARM - 2.75 with 0 points for rate
7/1 ARM - 3.25 with 0 point for rate

Jumbo - up to 2,000,000 with 20% down
30 year fixed - 4.750 % with +.250 points  for rate
15 year fixed - 4.250% + .250 cost points for rate
5/1 ARM - 3.250% + .250 points for rate
7/1 ARM - 3.750% + .250 points for rate
10/1 ARM 4.375% with +.250 points for rate

Current rates and market news

Rates continue to be historically good, and should be for quite some time. Of course we will see daily fluctuations, but with the Fed firmly in the 0% and plan to stay there mode, mortgage rates should continue to sit around these levels for quite some time.
The Wall Street Journal reported that "Bank of America Corp. intends to sell its correspondent mortgage business, as the troubled lender looks to narrow its focus and bolster its financial strength...Employees could be notified as soon as Wednesday that the lender has decided to exit the correspondent channel because it no longer fits with the long-term strategy for its mortgage unit. The company decided to get out roughly four to six weeks ago, following a review led by mortgage chief Barbara Desoer. The business employs more than 1,000 people." What this means is, there are fewer and fewer big lenders in the business, the pricing on Chase home loans last week were in excess of 1.00% higher than other lenders - big banks do price themselves out of the market when - they are about to close a division or they have more loans application than they can close.

The Federal Housing Finance Agency (FHFA) has reported the national average mortgage rate for the purchase of previously occupied homes by combined lenders was 4.57 % for loans closed in July - a decrease of 0.05% from the previous month. The average interest rate on conventional, 30-year, fixed-rate mortgage loans of $417,000 or less decreased to 4.69% in July. The FHFA also reports that the contract rate on the composite of all mortgage loans (fixed- and adjustable-rate) was 4.55% in July, down from 4.61% in June. The effective interest rate, which reflects the amortization of initial fees and charges, was 4.67% in July, down 7 from 4.74% in June.

U.S. home prices increased by 3.6% in the second quarter, after having fallen 4.1% in the first quarter, according to new data from the Standard & Poor's (S&P)/Case-Shiller Home Price Indices.

"Looking across the cities, eight bottomed in 2009 and have remained above their lows," says David M. Blitzer, chairman of the index committee at S&P Indices. "These include all the California cities, plus Dallas, Denver and Washington, D.C. - all relatively strong markets. At the other extreme, those which set new lows in 2011 include the four Sunbelt cities - Las Vegas, Miami, Phoenix and Tampa - as well as the weakest of all, Detroit.
These shifts suggest that we are back to regional housing markets, rather than a national housing market where everything rose and fell together."

30 year fixed - 4.250% 0 points for rate
20 year fixed - 3.875% 0  points for rate
15 year fixed - 3.250% 0 points for rate
10 year fixed - 3.250%  + 1.00 lender credit points for rate
5/1 ARM - 2.50 % 0 points for rate
7/1 ARM - 3.00%  + 0 points for rate

FHA/VA
30 year fixed - 4.250% +  0 points for rate
5/1 ARM - 2.75+  0 points for rate
7/1 ARM - 3.250 + 0 point for rate

Jumbo - over 729,000 up to 2,000,000 with 20% down on purchase
30 year fixed - 4.750 % with 0  points  for rate
15 year fixed - 4.375 % + 0   points for rate
5/1 ARM - 3.250 % + 0 points for rate
7/1 ARM - 3.75% + 0 points for rate
10/1 ARM -  4.375% with + 0 points cost for rate

Rates are stable, costs to borrow increase - how can this be?

Borrowing costs are higher this week.  When volatility picks up in the secondary mortgage market, the cost of doing business gets more expensive for lenders (hedging costs go up). The added costs are passed down to consumers. These costs are unavoidable.

Some lenders have been adjusting their loan pricing much higher because they can't take-in anymore business. They have pushed rates higher to encourage consumers to either wait it out or find another lender offering lower rates.

CURRENT MARKET as reported by Mortgage Rate Watch - The Best Execution 30-year fixed mortgagerate  has fallen to 4.125%.  Several lenders are willing to offer 4.000% and even 3.875% is possible for those interested in buying down the rate with points. 4.250% is widely-available. On FHA/VA 30 year fixed Best Execution is 4.000%, but 3.875 and even 3.750 are available with additional closing costs. 15 year fixed conventional loans are best priced at 3.625% but we're seeing aggressive quotes as low as 3.375%. Five year ARMs are still best priced at 3.25. ARMs seem to have bottomed out. 



Purchasing a home is currently cheaper than renting in 74% of major U.S. cities, according to Trulia's Summer 2011 Rent vs. Buy Index , which compares the cost of buying and renting a two-bedroom apartment, condominium or townhouse in the nation's 50 biggest cities.


30 year fixed - 4.125% + .0 points for rate
20 year fixed - 3.750% + 0 points for rate
15 year fixed - 3.375 % + 0 points for rate
10 year fixed - 3.250%  + .50 points credit for rate
5/1 ARM - 2.625% - 0 points for rate
7/1 ARM - 3.00%  + 0 points for rate

FHA/VA
30 year fixed - 4.00 % + .500 points for rate
5/1 ARM - 2.750 + 0 points for rate
7/1 ARM - 3.125 + .250 point for rate

Jumbo - over 625,500 - to 2,000,000 Fairfield County
30 year fixed - 4.625 % + 0  points  for rate
15 year fixed - 4.250% + 0 points for rate
5/1 ARM - 3.125 % + 0 points for rate
7/1 ARM - 3.625% + 0 points for rate
10/1 ARM - 4.250% + 0 points cost for rate

What do these numbers mean - #mortgage rates this week

It is easy to be confused, or misled, with seemingly simple numbers. For example, you are saving for your child's college costs, expected be about $100,000. You are 80 percent funded with $80,000 in your account. The next year, your investment account drops 25 percent in value, to $60,000. The year following year it bounces back 25 percent. Is the value back to where you started? No, because now you have $75,000 in your account. Assume college costs are rising 8 percent per year. How close to paying for college are you? The answer: 64 percent, because you have $75,000 toward $117,000 of costs. Even though your investments rose the same percentage as they fell, you're further from your goal than before. This is the same situation faced by pension funds. This is why, if you are locking in a loan, at these historically low rates, you MUST think of your long term and short term financial plans.



The FEDERAL RESERVE took the extraordinary step of announcing that it was minded to keep the federal funds rate close to zero for at least two more years. It also restated that it was "prepared to employ" a "range of policy tools" if the economy worsens, which some think might include a third round of bond-buying.

As stock markets tumbled, the price of GOLD surged to trade above $1,800 a Troy Ounce, reaching parity with platinum prices for the first time since the end of 2008.

AMERICAN INTERNATIONAL GROUP (AIG) lodged a lawsuit against BANK OF AMERICA, claiming BofA sold it low-risk securities backed by "defective" mortgages given to low-income borrowers. It is one of the biggest claims so far to originate from the practices that led to the financial crisis; suits against other big banks are expected to follow.

30 year fixed - 4.125% + .0 points for rate
20 year fixed - 3.750% + .250 points for rate
15 year fixed - 3.250% + .250 points for rate
10 year fixed - 3.250%  + 1.125 lender credit points for rate
5/1 ARM - 2.625% - 0 points for rate
7/1 ARM - 3.00%  + 0 points for rate

FHA/VA
30 year fixed - 3.874% + .500 points for rate
5/1 ARM - 2.750 + 0 points for rate
7/1 ARM - 3.125 + .250 point for rate

Jumbo - over 625,500 - to 2,000,000 Fairfield County
30 year fixed - 4.750 % + 0  points  for rate
15 year fixed - 4.250% + 0 points for rate
5/1 ARM - 3.125 % + 0 points for rate
7/1 ARM - 3.625% + 0 points for rate
10/1 ARM - 4.250% + 0 points cost for rate

#mortgage market update and rates this week

It would be hard to find another time frame of mortgage rate prices moving in a more volatile fashion than this week. In less than an hour on Friday morning, prices moved up 14 ticks to 2 day highs and then down 23 ticks to 2 day lows. On Friday morning stocks appear to be stalling and bouncing lower after failing to break 1220. Bonds like it. 10's are down to 2.462 now. Keep in mind that quoted levels in these updates continue to be moving targets.
U.S. job growth accelerated more than expected in July. This could ease fears the economy was sliding into a fresh recession. U.S. payrolls increased 117,000 above market expectations for an 85,000 gain. The unemployment rate dipped to 9.1 percent from 9.2 percent in June. The payrolls count for May and June was revised to show 56,000 more jobs added than previously reported The report was the first encouraging piece of economic data in some time. Economists see the odds of a recession as high as 40 percent. Top policy makers at the Federal Reserve will sift through the report when they meet on Tuesday but are not expected to announce any new measures to support the sputtering recovery. The U.S. central bank has cut interest rates to zero and spent $2.3 trillion on bonds. Policy makers have said they want to see how the economy fares before taking any further action.



The Best Execution conventional 30-year fixed mortgage rate has improved to 4.250%. Some lenders are even offering 4.00% but that quote carries with it additional closing costs. On FHA/VA 30 year fixed Best Execution is now 4.00% with some lenders willing to go as low as 3.875% (includes additional closing costs).  15 year fixed conventional loans are still best priced at 3.75% but we've seen very aggressive quotes at 3.625% too. Five year ARMs are still best priced at 3.25. ARMs and 15 year quotes seem to have bottomed out. 
It's important to point out an increased amount of variation in what individual lenders are quoting as their Best Execution rates.  This is a factor of price volatility in the secondary mortgage market. Unfortunately when volatility picks up in the secondary mortgage market, the cost of doing business gets more expensive for lenders (hedging costs go up). Those added costs are usually passed down to consumers via extra margin in rate sheets.


Reuters Reports - Wells Fargo & Co (WFC.N) plans to pay $590 million to settle a class action lawsuit. The 2009 class action case was filed in a federal court in New York City. Wachovia (now Wells Fargo) misrepresented its residential-mortgage holdings in offering documents during the lead-up to the financial crisis. The settlement is not expected to hurt Wells Fargo's financial position, it said in its quarterly filing with the U.S. Securities and Exchange Commission. Darren Robbins, a lawyer for the plaintiffs, said that auditor KPMG LLP, another defendant in the case, agreed to pay $37 million to settle the case, bringing the total recovery for plaintiffs to $627 million. Robbins said it would be the largest recovery in a case stemming from the credit crisis. In February, a federal judge in Los Angeles approved a $601.5 million settlement of a class action lawsuit against Countrywide Financial Corp over allegations it misled investors about its financial condition and lending practices. The settlements are subject to court approval. The case is In re: Wachovia Preferred Securities and Bond/Notes Litigation, U.S. District Court, Southern District of New York, No. 09-06351.

30 year fixed - 4.250% + .0 points for rate
20 year fixed - 3.750% + 0 points for rate
15 year fixed - 3.375% + 0 points for rate
10 year fixed - 3.250%  + 1.125% lender credit points for rate
5/1 ARM - 2.750% - 0 points for rate
7/1 ARM - 3.125%  + 0 points for rate

FHA/VA
30 year fixed - 4.125% + 0 points lender credit for rate
5/1 ARM - 2.750 +  0 points for rate
7/1 ARM - 3.250 + .3750 lender credit for rate

Jumbo - over 729,000
30 year fixed - 4.875 % with 0  points  for rate
15 year fixed - 4.375% + 0   points for rate
5/1 ARM - 3.250 % + 0 points for rate
7/1 ARM - 3.750% + 0 points for rate
10/1 ARM -  4.375% with + 0 points for rate

30 Year Fixed @ 4.375% on 417,000 or less purchase #mortgage

The theme of volatility is ongoing. Loan pricing has moved in the opposite direction from the previous day for 6 sessions in a row now. The increases seen yesterday in home loan borrowing costs were erased the next day, leaving things slightly worse than average vs the last 2 weeks, but about middle of the road when comparing to the last month.
The only bet that has a decent probability of success in this environment is that no bets are clearly better than any others. This should continue to be the case until at least some semblance of resolution makes its way to the debt-ceiling debate. This makes for plenty of volatility in the meantime.
Rather than change rate sheets with each rapid movement in the secondary market, it's not only easier on all parties involved, but downright necessary for lenders to be extra conservative with rate sheet offerings.
The Federal Reserve plans to provide guidance to banks soon on how to handle the potentially turbulent financial waters if the United States exhausts its borrowing authority August 1. "We have been engaged in operational planning with the Treasury," Fed spokeswoman Barbara Hagenbaugh said on Thursday. "We expect to be able to give additional guidance to financial institutions when there is greater clarity from the Congress and when Treasury outlines its specific operational plans."

30 year fixed - 4.375% + .0 points for rate
20 year fixed - 4.00% + 0 points for rate
15 year fixed - 3.50% + 0 points for rate
10 year fixed - 3.250% + .705% lender credit points for rate
5/1 ARM - 2.625% - 0 points for rate
7/1 ARM - 3.125% + 0 points for rate

FHA/VA
30 year fixed - 4.250% + .500 points lender credit for rate
5/1 ARM - 2.875 + 0 points for rate
7/1 ARM - 3.250 + 0 point for rate

Jumbo - over 729,000
30 year fixed - 4.99 % with 0 points for rate
15 year fixed - 4.50% + 0 points for rate
5/1 ARM - 3.375 % + 0 points for rate
7/1 ARM - 4.00% + 0 points for rate
10/1 ARM - 4.50% with + 0 points for rate

Rates and Market Updates

This week was filled with housing-related news. The modest pop in housing starts - new construction (led by multi family), was positive though most analysts believe that there is little reason to believe that the U.S. will see a real pickup in home construction any time soon. The most recent data from the Census Bureau shows 13.4 million vacant homes, roughly 3 million above a normal market. Much of this is from the big increase in vacancies that we saw in 2005-2006 when overbuilding hit its peak. The fastest-growing category of vacancies is in homes that the owner would like to sell or rent but are currently "held off"the market, and it is yet another form of shadow inventory that will eventually have to be absorbed.
We also had the FHA Home Price Index increase by .4% in May, the second consecutive monthly increaseand better than the expected 0.1% increase. April's results were revised downward to a 0.2% increase from an initial estimate of a 0.8%increase.   Year over year, home prices were still down 6.3%, and the index remains 19.6% below its peak in April 2007 and roughly equal to the level of January 2004.
Rates crept up during the latter half of the week, mostly due to speculation that Greek bonds will receive some type of European guarantee. Just as investors move money during a "flight to safety," they move it out again when risk is reduced - and that is what we saw Thursday. The EU side of the debt drama appeared to be making some progress as opposed to the US debt ceiling impasse. The 10-yr closed at 3.01%,and traders reported higher selling of mortgage-backed securities on the sell-off. There are no economic releases scheduled for today, Friday July 22. The markets will stay focused on the deals being reached in Europe and in the US with an eye on what our stock market is doing. 
An apparent consequence of Dodd Frank, MetLife Bank is for sale - but not the mortgage company. In a quote that tells it all, "MetLife Bank represented just two percent of MetLife Inc.'s first quarter 2011 operating earnings, and we do not believe it is appropriate for the overwhelming majority of our business to be governed by regulations written for banking institutions," said Steven Kandarian, president and chief executive officer of MetLife Inc. MetLife Inc. said that it is considering the sale of its Met Life Bank N.A.'s depository business and eliminating the company's status as a bank holding company. The firm said it will still offer residential mortgages through its MetLife Home Loans business.

30 year fixed - 4.50% + 0 cost points for rate
20 year fixed - 4.250% + 0 points for rate
15 year fixed - 3.625% + .50 points for rate
10 year fixed - 3.250%  0 cost points for rate
5/1 ARM - 2.750% - 0 points for rate
7/1 ARM - 3.250% + 0 points for rate

FHA/VA
30 year fixed - 4.375% with 0 points for rate
5/1 ARM - 3.00 with 0 points for rate
7/1 ARM - 3.50 with 0 point for rate

Jumbo - over 729,000
30 year fixed - 4.99 % with +.50  points  for rate
15 year fixed - 4.625% + .250 cost points for rate
5/1 ARM - 3.50% - 0 points for rate
7/1 ARM - 4.00% - 0 points for rate

What does it mean to qualify for a mortgage loan program?

What does it mean to qualify for a mortgage loan program?

When a mortgage loan officer talks about a mortgage loan programs, they are taking about the different types of mortgages. Each mortgage program Fixed or ARMS have different and strict requirements or loan parameters you must meet. The guidelines include a minimum: Credit Score, income, assets and down payments or loan to value - in order to qualify for the loan programs offered, unless you and your loan officer can show compensating factors and have an “exception” granted for one of the factors that are not in the minimum loan program requirements.
Fixed rate mortgages, loans with rates that are fixed for the life of the loan have some of the most stringent requirements. The longer you ask the bank to lend you money at a fixed rate, the higher the cost is to you and the stricter the banks requirements are to qualify for the loan program.
Credit Score – A lower (than 620 in most cases) credit score will disqualify you from a fixed rate mortgage at application (exception - FHA).
Debt to Income, or DTI. – There is a front end and back end DTI. The “front-end” debt to income for a fixed rate loan needs to be about 36 % or less, exception FHA. This amount is your proposed monthly housing expenses (principal, interest, property taxes, any common charges for condo or co-ops and homeowner’s insurance) divided by your gross monthly income. The “back-end” DTI includes your monthly housing expense, plus all other debts on your credit report, divided by your gross income. Fixed rate loan programs back end DTI needs to be about 45% or lower exception FHA. Again, exception for compensating factors – such as you have assets that exceed your loan amount.
FHA loans, which are available to all borrowers, not just first time home buyers – have lower credit score requirements (580 or higher) and allow higher DTI – up to 50% with compensating factors. .

Loan to Value, or LTV ratio - The down payment initially determines your LTV. If you put 20% down, your loan to value ratio will be 80 percent. If you put 10 % down, your loan-to-value is only 90 percent. Less than 20 % down, you may have the option of a second mortgage to reach the desired 80 percent loan-to-value ratio or you’ll likely have to pay at least a one time mortgage insurance premium, or an annual policy with monthly premium to protect the lender should you default. Exception, there are loans with lender paid premiums which is a cost to you in a higher loan rate.
Compensating factors – these are circumstances that allow the underwriter to grant an approval to a loan with numbers that do not meet the minimum loan guide lines. Working with a loan officer who will take the time to ask you to tell your story with regard to any compensating factors that affect your Credit Score, Income, Assets or property type can make the difference in getting you the right loan for your long and short term financial needs and goals.

New Legislature today to extend loan limits for 2 years!

As part of the 2008 Stimulus package, Freddie and Fannie - the government run agencies who purchase almost all mortgage debt, have enacted and used a temporary expanded conforming loan limit for one year duration, subject to renewal. The program allowed a lower cost of borrowing for designated high cost areas. In Fairfield County CT the expanded amount is 709,000. The conforming loan limit has been 417,000 and less,  and the jumbo conforming loan limit (or expanded conforming limit) has been a maximum of 729,500 for high cost areas.  The number used for the loan limit is determined by a government agency and is based on a formula using the actual prices of homes sold in geographic areas. The difference in rates between the two loan limits is often less than .250% in the rate - if a 417,000 30 year fixed is 4.50% - a 729,500 30 year fixed would be 4.750%.  Before the stimulus package,  any loan over 417,000 was considered a jumbo loan and often the rate price increase was more than 1% above the conforming loan limits for fixed rate.

 Ever year there is buzz and speculation about the loan limit amount being extended for another year. The temporary loan limits for the jumbo conforming (or expanded conforming) expire October 1, 2011 - which means if your loan over 417,000 and more than the new lower expanded loan limits and is not closed and funded by Friday - September 30, 2011, your loan will have a price increase.  Fir the first time since 2009, banks and lenders are gearing up to change their rate sheets to price and reflect non expanded limits -  and are informing their loan officers to expect the loan limit to return to 417,000 for conforming and in Fairfield Count CT - the new perennate limit for expanded limits is reduced from 709,000 to a maximum of 635,000. 

It now takes some lenders as long as 45 - 60 days to close a purchase loan. Most real estate contracts ask for at least 60 to 90 days for occupancy. Knowing the time frame from accepted offer to the close of a loan - it is 76 days from July 15 to September 30,2011.

The breaking news is - on Friday July 15, 2011 Representative Campbell (R) and Ackerman (D) have introduced a bill to extend the higher 2008 government loan limits for two more years.

It is imperative that consumers are aware of the risk, and more importantly for all lenders to be aware of the new expiration date and closely watch this new legislation.


30 year fixed - 4.375% + .375 cost points for rate
20 year fixed - 4.1250% + .250 points for rate
15 year fixed - 3.625% 0 points for rate
10 year fixed - 3.250%  with .250% credit for rate
5/1 ARM - 2.750% - 0 points for rate
7/1 ARM - 3.125% - 0 -points for rate

FHA/VA
30 year fixed - 4.375% with 0 points for rate
5/1 ARM - 3.00 with 0 points for rate
7/1 ARM - 3.375 with 0 point for rate

Jumbo - over 729,000
30 year fixed - 4.99% with 0  points  for rate
15 year fixed - 4.50% + .250 cost points for rate
5/1 ARM - 3.50% - 0 points for rate
7/1 ARM - 4.00% - 0 points for rate

Loan Limits they are a changing ... and rates

For the last several years Freddie and Fannie - the government run agencies who purchase almost all of the major lenders mortgage debt have had a temporary expanded conforming loan limit. The conforming loan limit has been 417,000 and less, and the jumbo conforming loan limit (or expanded conforming limit) has been a maximum of 729,500 for high cost areas. The number used for the loan limit is determined by a government agency and is based on a formula of the actual prices of homes sold in specific determined areas. The difference in rates between the two loan limits was often less than .250% in the rate - if a 417,000 30 year fixed is 4.50% - a 729,500 30 year fixed would be 4.750%. . This was part of the original stimulus package to lower the cost of borrowing for areas of the country, such as Fairfield County CT, so more people would be encouraged to purchase a home. Before the stimulus package, any loan over 417,000 was considered a jumbo loan and often the rate price increase was more than 1% above the conforming loan limits for fixed rate - thus the popularity of ARMs for Jumbo Loans - their prices were often more in line with conforming 30 year fixed - or lower. The temporary loan limits for the jumbo conforming (or expanded conforming) expire October 1, 2011 - which means if your loan over 417,000 and less than 729,500 (in some areas) is not closed and funded by Friday - September 20, 2011, your new loan will have a price increase. This year, more and more banks and lenders are now gearing up to change their rate sheets to non expanded limits - and are informing their loan officers to expect the loan limit to return to 417,000. And very very soon, to lock loans with the new guidelines in place. It now takes some lenders as long as 45 - 60 days to close a purchase loan. And most real estate contracts ask for at least 60 to 90 days for occupancy - so the banks and lenders are gearing up for the deadline - knowing the time frame from accepted offer to the close of a loan, and 75 days from July 14 is September 27,2011.
If you are considering purchasing a home before September 30, 2011 - and you have not made an offer or locked in your loan - the window of time is getting more and more narrow and the time to act is now.


30 year fixed - 4.375% + .375 cost points for rate
20 year fixed - 4.1250% + .250 points for rate
15 year fixed - 3.625% 0 points for rate
10 year fixed - 3.250% with .250% credit for rate
5/1 ARM - 2.750% - 0 points for rate
7/1 ARM - 3.125% - 0 -points for rate

FHA/VA
30 year fixed - 4.375% with 0 points for rate
5/1 ARM - 3.00 with 0 points for rate
7/1 ARM - 3.375 with 0 point for rate

Jumbo - over 729,000
30 year fixed - 4.99% with 0 points  for rate
15 year fixed - 4.50% + .250 cost points for rate
5/1 ARM - 3.50% - 0 points for rate
7/1 ARM - 4.00% - 0 points for rate

Mortgage loan notes can approve your loan

Can your Mortgage broker’s “loan notes” cause your good loan to be denied?
Loan notes are written by every good mortgage officer when a loan application and all supporting documents are submitted to underwriting. Loan notes tell the borrowers story, why the loan makes sense, and explains any situations that may not make sense on the paperwork submitted.
An attorney gave me a call and asked me to look at a loan file to see if I could help him and his client understand why their refinance loan was denied. His client was very upset. They had given the other loan officer a non refundable application fee and appraisal fee for a denied loan. I looked at the income documents, more than enough income on tax returns for these self employed borrowers to qualify. I looked at the FICO scores, almost 800! I looked at the appraisal, value over 600,000 for a 300,000 loan. The property is residential according to the report, on 2+ acres with a pool and has a horse stable, with horses. What happened? When I looked at the other lenders appraisal I was confidant I knew why the loan was denied, the use of the property and the income from the use of the property. One of the borrowers gives ridding lessons to children – using the horses she owns. The other Loan Officer did not write notes to the underwriter and tell the story about the horses on the property and show that the income from the ridding lessons was not needed for the borrowers to qualify for the loan. It was as simple as that. Best bet, when this file went into underwriting with the first lender, the property was determined to be a commercial horse farm and not residential in her opinion – thus, the loan was denied. I just closed and funded this loan. The rate reduction saved this borrower more than $400.00 per month. How? When I submitted the file the loan notes documented the horses were owned by the borrowers, and showed with a current P&L statement the income from ridding lessons was not needed for the borrower to qualify for the new mortgage. Make sure your Mortgage officer submits complete and correct loan notes with your loan file!

Rates and Market update

With all the up and down this week in rates and economic news from raising the debt ceiling limit - to employment numbers, - I wanted to wait for a re price for the better (due this afternoon) based on the jobs report - it just seems a bit insane - for lack of a better word for my linear thinking logical mind - that there are fewer jobs - more houses available for purchase - and lowest mortgage rates in decades - because/when there are fewer jobs the investment money moves from the Stock Market to Bond Market for security - the lesson is - if you want to own a home, primary, second home or investment property - and you have income and down payment money - this is the time to buy!

Turmoil and change has been a constant in the mortgage industry and we've always worked our way out of it. Much of what drives our industry is not of our own making or easily managed but we somehow find a way to develop products that both serve the customer and keep our doors open.  It is easy to vilify the mortgage industry, even when the root causes lie far afield as it was with Enron's collapse due to accounting issues. Caution, be careful of what you wish for - you may actually get it. For political, economic and accounting - remember: capital will flow into an arbitrage opportunity, be it a rate arbitrage or a credit arbitrage, until that arbitrage opportunity no longer exists, after which it will not flow at all.  Many, if not most, of the proposals floated to reform real estate finance seemingly forget this basic fact and, if implemented, would be pro-cyclical  - meaning they would serve to provide too much mortgage capital during boom periods and too little during times of slowdown.  Before we wish away Fannie or Freddie or GNMA, we'd be wise to remember this...


30 year fixed - 4.50% - .50 points for rate
20 year fixed - 4.250% - 0 points for rate
15 year fixed - 3.750% 0 points for rate
10 year fixed - 3.250% 0 points for rate
5/1 ARM - 3.00% - 0 points for rate
7/1 ARM - 3.50% - 0 -points for rate
Jumbo - over 729,000
30 year fixed - 4.99% .50 points for rate
15 year fixed - 4.50% .50 points for rate
5/1 ARM - 3.50% - 0 points for rate
7/1 ARM - 4.00% - 0 points for rate

FHA/VA
30 year fixed - 4.375% - .375% points for rate
5/1 ARM - 3.250% .125% points for rate
7/1 ARM - 3.625% - .250 points for rate

Market updates and rates week of June 30

Rate sheet "influential" mortgages are experiencing modest price losses after Greek lawmakers agreed to implement aggressive austerity measures Thursday morning. Based on the market's reaction to this news, this was a widely expected outcome. This stabilization is somewhat comforting but not enough to stop a corrective rally before the long weekend. This paints a less positive picture for bonds over the next few days. After failing on multiple occasions to extend the two-month bond rally, traders are feeling technically exhausted. The path of least resistance is up for interest rates, at least in the short-term. That puts pricing in a defensive posture for the next 10 to 20 days. The market predictors are not ready to change the outlook for lower rates by the end of the summer. Remember, this happened last year, which supports the long standing view that "history is repeating itself" in the bond market. In times like these, the value of analyzing Mortgage Backed Securities charts greatly decreases and underlying benchmarks become much more important. Thursday morning the bond market came into the day as close to "on the edge" of the recent range as it could be. Long story short, the breakout has now been confirmed after looking indecisive leading up to 9:45 AM Chicago PMI data. After that, the snowball began. Volume ramped up, and yields moved sharply. The market reached its next major technical level for 10 year yields, and in terms of "history repeating itself" is an analogous level to how things happened in 2008. If history continues repeating, more volatility is in store--BIG swings.

30 year fixed - 4.625% - .250% points for rate
20 year fixed - 4.375% - 0 points for rate
15 year fixed - 3.750% 0 points for rate
10 year fixed - 3.375% 0 points for rate
5/1 ARM - 3.00% - 0 points for rate
7/1 ARM - 3.50% - 0 -points for rate
10/1 ARM - 4.125 % 0 points for rate
Jumbo - over 729,000
30 year fixed - 4.99% +.50 points for rate
30 year fixed - 5.125% - 0 points for rate
15 year fixed - 4.625 % - 0 points for rate
5/1 ARM - 3.750% - 0 points for rate
7/1 ARM - 4.250% - 0 points for rate
10/1 ARM - 4.625% 0 points for rate

Rates and market update

After experiencing a scary setback earlier in the week, home loan borrowing costs improved again today as a "flight to safety" continued to benefit bond yields.

A "flight to safety" happens when investors are nervous about owning risky assets like stocks, but do not want to miss out on earning a return on their funds, so they allocate their money into risk-free government guaranteed U.S Treasury debt to provide a safe-haven and an investment return. As benchmark Treasury yields fall on "flight to safety" buyer demand, prices of mortgage-backed securities move higher in unison. This allows lenders to reprice their rate sheets for the better and gives originators an opportunity to offer fence-sitting borrowers lower mortgage rates or more competitive closing costs.

The "Best Execution" conventional 30-year fixed mortgage rate is 4.50%. Some lenders may be quoting 4.50% with increased closing costs in the form of origination fees. Some lenders may also be quoting 4.375%, but those offers will definitely carry additional closing costs. These costs could be worth it to applicants who plan to keep their new mortgage outstanding for long enough to break even on the extra up front costs.


30 year fixed - 4.50% - 0 points for rate
20 year fixed - 4.250% - 0 points for rate
15 year fixed - 3.625% 0 points for rate
10 year fixed - 3.250%
5/1 ARM - 2.75% - 0 points for rate
7/1 ARM - 3.250% - 0 -points for rate
Jumbo - over 729,000
30 year fixed - 4.99% 0 points for rate
15 year fixed - 4.50% - 0 points for rate
5/1 ARM - 3.50% - 0 points for rate
7/1 ARM - 4.00% - 0 points for rate

Mortgage Rates today - market opinions

Fixed mortgage rates fell for the eighth straight week in the widely watched Freddie Mac survey of what lenders are offering to well-qualified borrowers. The 30-year fixed-rate mortgage averaged 4.49% this week, down from last week when it averaged 4.55%, Freddie Mac said. Freddie Mac economist Frank Nothaft said a weak jobs report had pushed down yields on long-term Treasury bonds. Those debt securities are a benchmark for home lending rates, and mortgage rates followed suit
This week mortgage experts examined the 10 year Treasury note charts due to its ideal role as a benchmark of the general "bond market." While it's true that loan pricing is derived from MBS, or mortgage backed securities the goal was to examine long-term, big-picture movements. The highest yield levels of 2007 through present day lie roughly along the same line. There appears a near perfect parallel line that, with the exception of the initial panicked flight-to-safety in 2008 and the repeat performance in 2010, the 10 year Treasury note charts contains every last bit of trading since the crisis.
This is one of those times where technical analysis really is saying something very clear about the future: we're either in for an unfriendly bounce, or we're looking at the possibility of rates going lower.

Plain and Simple: The revisiting of a long term technical level coincides with several other uncommon market dynamics, including the end of QE2, this is combining to create a perfect storm where rates are "on the ledge, poised for directional volatility. Best advice, if you are purchasing or refinancing, work with a lender who has real time live MBS market data streaming to them so you can lock if the market starts to move into negative territory.

Mortgage rates this week:


30 year fixed - 4.375 % with .250% points for rate
20 year fixed - 4.125 0% with .250% points for rate
15 year fixed - 3.625% 0 points for rate
10 year fixed - 3.250% with 1.00 point credit to borrower for rate
5/1 ARM - 2.75% - 0 points for rate
7/1 ARM - 3.125% - 0 -points for rate
Jumbo - over 729,000
30 year fixed - 4.99% 0 points for rate
15 year fixed - 4.50% - 0 points for rate
5/1 ARM - 3.50% - 0 points for rate
7/1 ARM - 4.00% - 0 points for rate

Today's rates and market up date

A week of troubling economic data helped push fixed mortgage interest rates to a new low for the year, representing the seventh consecutive weekly decline, according to the latest survey from Freddie Mac. Surveys of national consumer confidence and manufacturing activity in the past month have suggested the economy may be slowing. The S&P Case-Shiller National Home Price Index, meanwhile, showed first-quarter home prices fell by the steepest annual rate since the third quarter of 2009.The 30-year fixed-rate mortgage averaged 4.55% in the week ended Thursday, down from 4.60% the prior week and 4.79% a year earlier. Rates on 15-year fixed-rate mortgages fell to 3.74% from 3.78% the previous week and 4.20% a year earlier. Five-year Treasury-indexed hybrid adjustable-rate mortgages held steady from last week at 3.41%, but are down from 3.94% a year earlier. One-year Treasury-indexed ARM rates rose to 3.13% from 3.11% the prior week but are down from 3.95% a year earlier.

30 year fixed - 4.50% - 0 points for rate
20 year fixed - 4.250% - 0 points for rate
15 year fixed - 3.625% 0 points for rate
10 year fixed - 3.250% with 1.00 point credit to borrower for rate
5/1 ARM - 2.75% - 0 points for rate
7/1 ARM - 3.250% - 0 -points for rate
Jumbo - over 729,000
30 year fixed - 4.99% 0 points for rate
15 year fixed - 4.50% - 0 points for rate
5/1 ARM - 3.50% - 0 points for rate
7/1 ARM - 4.00% - 0 points for rate

Last Minute Creidt Pulls before your loan closes ...

Your loan is clear to close, you have 1 day until you will own your home. Your attorney has scheduled your close date and time - and you get a call from your loan officer. Your credit report was re run before the close day - and you have applied for a credit card with a local home improvement store or furniture company for the great 10% discount on your newly purchased furniture and paint- for your new home. Now your loan closing is possibly going to be delayed – or your loan type changed.
Why? If you open a new account after you have applied for a mortgage the bank must see a copy of your statement, your rate and terms of the new debt - and re qualify your loan based on the worst case scenario - you borrowing the full limit of the new line of credit (credit card) and the new monthly payments.
Best advice - DO not open a new account before you loan is closed.

Today's rates

For purchase - assume credit score of 740+ laon amount 417,00 or less,30 year fixed = 4.625% apr 4.7497, 15 year fixed, 3.875% apr 3.9986%, 5/1 ARM 3.875% apr 3.8986, Jumbo 30 year fixed, 5.375% apr 5.498, 5/1 ARM 3.750% apr 3.898% - Rates are always subject to change based on market conditions and your credit score.

How to close your loan faster ...

The fact is that loans are more complex today than ever and they require more documentation. This is to limit the risk to the investor when they purchase the a loan, and the lenders need to sell their mortgage debt to be able to fund more loans.

The underwriting process can be frustrating and some of it seems ridiculous. There is a rhyme and reason behind this madness. Just remember loan officers don’t get paid until your loan closes, so we are not trying to make your loan or the paperwork impossible.

To close faster - get everything your loan officer asks for upfront, as soon as possible! Once the initial underwriting is finished (usually about 48 hours from receipt of you full loan package) get the loan officer EVERYTHING else they need to get your file “clear to close”. Don’t send them 3 out of 4 things they need … send them all!

If they ask for a 30 day bank statement don’t send them a statement with only 28 days. Get them what they need as fast as possible. This will ensure a timely closing and that your lock does not expire. If your lock needs to be extended, your loan officer can no longer cover that extension for you out of their compensation, new rules and laws prohibit this.

Fighting the extra stipulations or disputing the fact that you shouldn’t need to supply more income or asset documents - or saying I didn’t need this last time I did my loan will do nobody and good. It may be true BUT it is a waste of everyone’s time.

When a 4.625% fixed might be better than a 4.00% fixed rate

When a 4.625% fixed might be better than a 4.00% fixed rate


I was working with first time home buyers who said they wanted a 4.00% fixed rate CHFA loan. They are putting down 10% on a 250,000 purchase with a final loan amount of 225,000. This couple are in their early twenties, have no children – their long term plans are to have children and move to a larger house in 5 – 10 years. They want a fixed rate mortgage. They have excellent credit scores and about 40,000 saved for this purchase.

With CHFA there is mortgage insurance, which is an additional $207.00 per month. And the point to pay for the CHFA rate is 1% or $2,250.00. The monthly mortgage payment would be 1074.18 + 207.00 = 1218.18 per month.

A conventional 30 year fixed rate is 4.625% with 0 points for the rate. The one time mortgage insurance premium will be about 2% or 4,500. The monthly mortgage payment is 1156.82

In 5 years – which is the minimum time required to keep CHFA mortgage insurance on the loan, the Mortgage insurance payment = 12,420, The point for the rate is 2,250 and the total 5 year loan payments = 64,458.80- or a total paid in 5 years = 79,120.

With the conventional fixed rate loan, 4500 for the mortgage insurance and total 5 year loan payments = 69,409.20 + 4500 = 73,909.00.

Assume the CHFA mortgage insurance is eliminated at the end of year 5 – and the loan must be paid down, it cannot be eliminated with property value appreciation.

322,254 is the 25 year amount to pay off the CHFA loan.
347,046 is the 25 year amount to pay off the conventional loan.

The life of the CHAF loan cost = 401,374.
The life of the conventional loan cost = 420,955

Or a difference of $55.00 per month less for the CHFA loan for 30 years.

They now know the real numbers of the cost of a 4.00% fixed rate loan – and can make an informed decision when they chose their loan program. They may still opt for the CHFA. They may also take the cost of the CHFA loan and buy down the conventional mortgage to 4.250% - and save some real money on this purchase loan.

Having the lowest rate in the wrong program for a borrowers needs is just bad business, and my business is making sure the borrower has the right program for their long and short term borrowing needs.

Why did the bank accept a lower offer than ours on a foreclosure?

If you want to buy a foreclosure home, you could be competing with other buyers for that foreclosure.
© Big Stock Photo Question: Why Did the Foreclosure Home We Tried to Buy Sell for Less?
A reader writes: My wife and I tried to buy a foreclosure home a few months ago. The agent told us we had to offer more than list price to buy this particular foreclosure home. We didn't think it was worth more money, so we kept our bid at the list price. Come to find out last week this home sold for less than we had offered. Can we sue our agent? Why did he tell us to pay more for that foreclosure? Why did the foreclosure home we tried to buy sell for less? None of this makes sense to us."
Answer: The process of overbidding to buy a home, whether it's a foreclosure or a regular home, is often very confusing to buyers. Part of the reason buyers are confused is because they might think the price of a home is the value of the home. The truth is the asking price, the eventual sales price and the market value can all be 3 different numbers and often are.
When a bank-owned home comes on the market as a foreclosure home, it can attract many buyers for that home if it's priced attractively. Say, for example, the bank wants to sell the foreclosure for $250,000. The bank might price that home at $240,000, hoping that buyers will easily see the home is priced far less than it is worth and be drawn like moths to a flame. Underpricing is one way a bank can get multiple offers for a foreclosure home.

The problem that can arise is sometimes agents don't do a very good job explaining to potential buyers why underpricing occurs and how to make underpricing work for the buyer's benefit. After all, the buyer probably just wants to buy a foreclosure home. But it's more complicated than that.


To Buy a Foreclosure Home Can Mean Making an Offer Over the Asking Price
If the home is priced too low, many buyers will probably make offers over the asking price. The asking price is simply the starting place for negotiations. The following is a sampling of how a series of offers might possibly rank, depending on the order in which they are received:


•First offer to buy a foreclosure: slightly under the asking price. That's because the buyer is first and there are no other offers on the table.

•Second offer to buy a foreclosure: at the asking price or $1,000 or so above. That's because the buyer figures the first buyer offered full price, even when the buyer did not.

•Third offer to buy a foreclosure: quite a bit above the asking price. That's because the buyer wants to beat out the first and second buyer.

•Fourth offer to buy a foreclosure: above the asking price but it could tie with #3. That's because the buyer is hoping the third buyer might back out.

•Fifth offer to buy a foreclosure: above list price with a hefty earnest money deposit and a shortened inspection time. This is often the buyer who really wants the home.

•Sixth offer to buy a foreclosure: a little bit below list price but all cash. This buyer thinks her offer is golden. Maybe she's right; maybe she's wrong. There are advantages to paying cash to buy a home.
By the time the bank receives 7 or more offers, these offers can be all over the board. Some low, some high and some are incomplete. It might seem as though everybody and their uncle are throwing offers at the bank.

Reasons a Foreclosure Home Can Sell For Less Than the Price You Offered
A lot can happen during an inspection period and offer negotiations. The terms a bank agrees to in advance can change. A tree can fall on the house or market conditions could suddenly worsen. Not to mention, interest rates could go up, putting downward pressure on prices. Here are a few reasons why a home can sell for less when you offered to buy the foreclosure for more:


•The listing agent represented the buyer and purposely, although it is generally against the law in most states, pushed her own buyer's offer to the top of the pile while downplaying the other offers. Not every real estate agent is an ethical agent.

•The home required extensive work, which was revealed during a home inspection. Sometimes buyers can ask the bank to lower the price to reflect a newly discovered condition.

•The buyer might have offered a price that was too high to be substantiated by an appraisal. In that event, generally a bank will lower the price to match the amount from the buyer's appraisal. A low appraisal is the most common reason.
this article was written by
About Home Buying / Selling: Why That Foreclosure Sold for Less Than Your Offer

Elizabeth Weintraub - About.com Home Buying/Selling Guide
to:
jbuchanan
04/26/2011 03:33 AM

VA Tax Service and attorney fees

Tax Service Fee is an UNALLOWABLE Fee for VA Loans.

The borrower cannot pay the lender's attorney fees.

Also, please be aware that if the borrower chooses personal representation by an attorney at the closing, it cannot be the same attorney that is representing the lender. It must be a separate attorney to allow the borrower to pay an attorney fee.

2,000,000 30 year fixed locked @ 5.250%

Purchase price 4,000,000
2,000,000 loan amount
30 year fixed = 5.275% with .125% (2,500) for rate, .125% discount to rate for opening a CD = 5.25% with .125% (2,500) cost to borrower for the rate.
If you need a JUMBO loan with a great rate, I have the produce.

What is a Credit Report

What is a credit report?
FACT: The Federal Reserve Board (FRB) shares that Your Identity, Your Existing Credit, Your Public Records and Inquiries are all parts of a consumer credit report.
What they fail to mention is – there are some things that are NOT reported that many people think ARE reported or affect their scores.

- Your Household Income or Personal Income is NOT reported or used for scoring.
- If you are married your credit files are NOT merged together. (Only joint accounts
will show on each others’ credit reports.)
- Even though your birthday is reported your age cannot affect your score or chances of
approval. (One exception is the reverse mortgage which has an age requirement.)

Where Can I get a Copy of My Credit Report?
FACT: You can get a one free copy of your credit report from each bureau every 12 months at www.annualcreditreport.com .
Now here’s a secret that may save you some money. Instead of using a credit monitoring service, just log on to the free site and pull one different bureau report every 4 months!

Does the Credit Bureau Decide Whether To Grant Me Credit?

FACT: Another great “truism” is that the credit bureaus DON’T make any credit decisions.

The creditor uses the bureaus information along with other information (like your income) to determine whether or not to extend credit to you. If a score is low studies have shown that up to 79% of credit reports have errors! So even though the credit bureaus generate a score, it doesn’t mean it’s accurate.

How Can I Stop the Unsolicited Credit Card Offers?
FACT: You can OPT-OUT from creditors marketing lists by going to www.optoutprescreen.com and completing the information. You can choose to opt out for 5 years or permanently. To opt-out permanently you will need to mail in the documents requested off the website. This will cut down on your unsolicited mail.
(Don’t worry, if you change your mind you can turn it back on again!)

OPT-OUT - the credit bureaus are in the business of selling your information and making money off of the sale, it's legal and it's done every day.

What is a credit score? How is my credit score calculated?
FACT: The FRB states that your score is “a number based on your information”. True, but there is more.

The FICO algorithms (FICO 70% of the credit scoring market) actually calculate the odds of you having a 90 day late in a 24 month period on a loan obligation. I know its odd isn’t it? That’s why a 90 day late or more has such a negative impact on your scores!

Your credit score is like a “snapshot in time”. The score is calculated at that precise moment in time. So if you can change an inaccurate or un-validated item (i.e. repair, delete or remove) then your score will change immediately!

No mention was made of Vantage Score which has new algorithms and claims to have higher consumer scores. (They currently only have 6-7% of the markets, but are used more in consumer loans - store credit cards for example.)

Credit Reporting Errors….

FACT: This is the last section the FRB speaks about in their consumer report. This has advice for consumers to dispute credit reporting errors on their own. And of course you can do this all yourself. (And you can operate on yourself if you need surgery too…and build your own home… and change your own oil…..)

Seriously you can repair your own credit. In fact the FTC (Federal Trade Commission) requires that credit repair organizations have to tell the clients this in their contracts.

But they make no mention of using an outside attorney or legitimate credit restoration organization to assist you if you need it. You have legal rights under the Fair Credit Reporting Act that your information be 100% accurate and 100% validated that it’s yours. If not they have to permanently delete it. It’s easy to say but usually difficult to get the credit bureaus and creditors to perform due diligence.

It’s legal and ethical for you to get professional assistance for credit restoration. Especially if you have had a divorce, bankruptcy, foreclosure, short sale or medical emergency that’s caused negative or erroneous information to appear on your report.

Another reason we know its legal: If credit repair wasn’t legal a law would not have passed governing Credit Repair Organizations! It’s called Credit Repair Organization’s Act (CROA) and it was passed to govern and protect the consumer.

Spanish Version – When you use the link to the website in the links section, there is a Spanish version on the lower, right hand side of the web page.

Links
The Consumer's Guide to Credit Reports and Credit Scores".
http://www.federalreserve.gov/creditreports/ "


Jennifer Buchanan
Certified Mortgage Planning Specialist
MetLife Home Loans
jbuchanan@metlife.com

Title Source: Title Source in the Community

Title Source: Title Source in the Community: "Making a difference in the lives of our clients, team members and community is part of our culture.  Title Source team members have volunte..."

5 Myths for Home Biuyers

5 Myths For Home Buyers

1. The listing information is always correct - not always. When it comes to listings, don't always take the information on the house as being on-target. Some times listing agents don't bother to check out facts they receive from the sellers and the wrong data is posted. Always verify!

2. We will find the PERFECT house - Not always. Buyers may try to focus on something that's wrong with a house rather than all of it's good points. Don't expect to get everything on your wish list and zero in on the items that are the most important to you.

3. If we have several agents looking for homes on our behalf, we'll find a house quicker. Wrong again. By working exclusively with one agent you will improve the momentum and the end results. Working with your Buyers Agent thrives on communication, loyalty and trust!

4. When a house remains on the market longer, the more you can negotiate a better deal. Buyers always ask, "How long has this home been on the market?" They may think the longer its been on the market the more they can negotiate the price down. Not always. It often means the seller is determined to hold on to their price.

5. If the offer is accepted right away, it was too much to offer." No, it's just called buyers remorse. There's no point in second-guessing what the bottom line is, go with your goal and everyone will be a winner.

Beware the Prequalificaiton letter

A prequalification letter generally states that you have spoken with a loan officer, verbally given them your financial information and once your information is verified it is most likely you will be issues a mortgage commitment to lend. In other words, you have given information and once it is confirmed it is possible you will be given a mortgage.

A mortgage commitment to lend means that you have provided a copy of all the necessary financial documents, the mortgage underwriter has reviewed your documents and approved your mortgage application.

In today's market, the prequalification – or pre-approval letter is proving time and again not good enough to become the winning bidder on a home. If you are serious about purchasing a home, having a mortgage commitment will make you a much more attractive buyer.

Most recently I worked with an extremely well qualified buyer who chose not to provide the documents, made an offer with a pre approval letter and lost their dream house in a multiple bid situation to a buyer who had a commitment to lend. There are more and more loan officers with the same story these days. Today’s sellers have been waiting a long time in most cases for a purchase offer. Once the seller has accepted your offer, their house is essentially off the market until all the inspection, appraisal and loan approval dates have been met – and if they must wait an additional 3 weeks for a mortgage approval with a pre qualification versus an offer with the only the requirement of an appraisal, the smart seller will take the appraisal only offer.

There is no cost or obligation to have a completed commitment to lend - and sooner or later you must provide the documents. If you are serious about purchasing a home, and want to have your offer accepted, ask for the full commitment to lend when you apply for a mortgage. The financial documents needed include; your most recent pay statement, 2 most recent asset statements, 2 most recent W2's or 1099's and 2 years complete tax returns.

Should I refinance my mortgage

The Most Frequently asked mortgage question –

My rate is 7% and I am 12 years into a 30 year fixed, should I refinance?

Two important questions to ask the borrower

1. Do you want to pay off the loan in 18 years or less?

2. Do you want better cash flow?

Assume current 200,000 mortgage @ 7% = 1,500 monthly payment

Example of Three solutions that answer both objectives -

1. New 30 year fixed –
Keep current loan = 324,000 to pay off loan in 18 years
Refinance into a new 30 year fixed rate @ 5% = 1,074 monthly payments = 386,512 to pay off loan in 30 years

The borrower will pay out more to refinance, about 57,000 – however their monthly cash flow will increase by about 450.00 per month or 162,000 over the life of the loan, however subtract the 12 years for the longer pay out = 97,200 is the real cash savings



2. New 20 year fixed -
Keep current loan = 324,000 to pay off loan in 18 years
Refinance into a new 20 year fixed rate @ 5% = 1320 monthly payment = 316,800 to pay off loan in 20 years

The borrower has better cash flow and after paying the refinance charges – the pay off is about the same amount – but adds 2 years to the loan pay off. The 18 year monthly savings for this refinance is 38,880 and the extra 2 years payments = 31,680 = 7,500 is the real cash savings


3. New 15 year fixed rate
Keep current loan = 324,000 to pay off loan in 18 years
Refinance loan new 15 year fixed @ 4.375 = 273,104 to pay off loan in 15 years

By keeping the monthly payments near to current payment, borrower will save about 45,000 in interest over the next 15 years, and 54,000 saved in 3 years of fewer loan payments with the refinance = 99,000 is the real cash savings.