Posted To: Community Commentary

Transparency is the new buzz word in the financial world, especially in the mortgage industry. W hile government officials and financial pundits pay "TRANSPARENCY" plenty of lip service, those of us working on the front lines of origination live with it on a daily basis. I would go as far to say, from a point of sale perspective, MORTGAGE ORIGINATORS HAVE QUICKLY BECOME THE MOST ACCOUNTABLE MEMBERS OF THE FINANCIAL SERVICES INDUSTRY. Imagine the potential protection consumers might benefit from if all commission based financial services professionals were forced to follow in our crystalline footsteps, conducting every aspect of their businesses in the spirit of undisguised disclosure, in an environment of extreme accountability. Perhaps it would seem fit to start with car sales? Suppose…(read more)

Posted To: MBS Commentary

Despite the 4 tick improvement on the day that leaves MBS just about as close to all time highs as we could ask for, the lack of excitement this week is a bit of a let down. Sure, there was plenty of chopatility earlier in the week in MBS, but not only was it mostly confined to the range, prices actually ended exactly where they started on Monday! At least the boring and range-bound nature of the week made for plenty of predictability as the only real technical levels worthy of mention played important roles throughout the week. 101-21 became eerily supportive as the week progressed. and 101-27 mentioned as a pivot point on Monday and Tuesday maintained it's technical significance as resistance by week's end. In tsy's, the story was clearly about 3.31 and 3.38. (3.31 is an intraday…(read more)

Some good news (finally) for Orange County, CA FHA borrowers - FHA has eased the appraisal requirements for “high balance” loans. A High Balance loan in Orange County is considered to be any loan over $417,000, up to $729,750. Under the guidelines that have been in place since FHA began offering High Balance loan amounts in 2008, if the loan to value was higher than 95%, then 2 appraisals were required.

Mortgagee Letter 2009-48 Eliminates Need for Second Appraisal

Mortgagee Letter 2009-48 modifies FHA’s requirements for second appraisals on high balance loans in declining markets, which Orange County, CA is considered to be. (Despite what seems to be stabilization in pricing.) FHA has also required a second appraisal on FHA High Balance cash out refinances. Now, that is no longer the case.

Great News for Orange County FHA Home Buyers!

For those Orange County home buyers purchasing properties with FHA loans over $417,000 this is great news! Getting two appraisals is not only an added expense, but can also add complications to the deal. Even if both appraisers agree on the properties value, one may request conditions that another appraiser doesn’t.  This can only confuse the FHA underwriters and cause delays (speaking from personal experience). Now, the confusion caused by a second appraisal has come to an end.

High Balance FHA Will be Popular in 2010

2010 will be a big year for FHA loans in Orange County, especially High Balance FHA loans. FHA offers home buyers the ability to purchase homes for prices as high as $750,000 with only 3.5% down. 2010 will be a great year for not only first time buyers but also move up buyers. While homeowners in Orange County have lost equity in their homes over the past few years, there has not been a better time in many years to “move up” into a bigger or nicer home. Plus, with the $6,500 Tax Credit for Move Up Buyers, Orange County home owners have an extra incentive to make the move.

Authored by Tim Storm, an Orange County, CA Loan Officer – Please contact my office at Frost Mortgage Lending Group for more information about an Orange County, CA home loan.  877-786-4243 x 7.

www.OCFHALoans.com

Contact us for your Orange County FHA Mortgage:

Call our office today and see how we can help you and your family. Ask for your Free First Time Home Buyer Report.

877.786.4243 x 7 | tstorm (at) ochomebuyerloans.com

*Licensed by Department of Corporations under the California Residential Mortgage Lending Act. PRMI Branch License 813F487.

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Posted To: MBS Commentary

Its 430 on a Friday afternoon. The market is resting after a week's worth of grinding to the right. (Note sarcasm.) It was exciting when the week began…but it sure did fizzle out into the close. Everything we watch turned a profit this week. We hope you followed the crowd and booked a few extra bps yourself. Gobble Gobble. I can smell the mashed potatoes…. Enjoy the weekend PS. Smash someone up Tucker. go 44…(read more)

The Energy Efficient Mortgage can be added to an Oregon FHA203b but more likely an FHA203k. This Energy Efficient Mortgage gives the borrower/buyer the ability to add an additional $8,000 to their mortgage for energy related upgrades. It is available on a purchase or a refinance and should be a really great deal, however, I have found that the actual implementation might be troublesome. Cost versus benefit may not pencil out in the long run.

This comes from the FHA Homes and Communities website:

The TWO SIDES of the EEM COIN

Finance Energy Improvements!

• Cost-effective energy-saving measures may be financed as part of the mortgage
• Make an older, less efficient home more comfortable and affordable!

Increase Your Buying Power

• Stretch debt-to-income qualifying ratios on loans for energy-efficient homes!
• Qualify for a larger loan amount! Buy a better, more energy efficient home!

WHO BENEFITS from the ENERGY EFFICIENT MORTGAGE?

Buyers:

• Qualify for a larger loan on a better home!
• Get a more comfortable home NOW.
• Save money every month from Day One.
• Increase the potential resale value of your home.

Sellers:

• Sell your home more quickly.
• Make your house affordable to more people.
• Attract attention in a competitive market.

Remodelers/Refinancers:

• Get all the EEM benefits without moving.
• Make improvements which will actually save you money.
• Increase the potential resale value of your home.

Pay for energy improvements easily, through your mortgage. Your lender can increase your loan to cover energy improvement costs. Monthly mortgage payments increase slightly, but you actually save money because your energy bills will be lower!

The problem comes from the next section, the HERS or Home Energy Rating System. Anytime you get an EEM added to your loan, you will need a HERS. That is a problem in Eugene as, apparently, there is only one HERS inspector and he charges approximately $4,000 for doing the inspection. Hardly makes the $8,000 loan attractive when you have to pay $4,000 just to qualify. According to the FHA website, the HERS rating usually costs between $300 and $800. Even if able to get it done on the upper end, that would make it a 10% cost for the loan, again, questionable economics.

I think the idea of a EEM is excellent, especially in today’s raising energy cost environment. Maybe it would be better if the EEM was a larger amount, I am not sure or maybe it would be better if you could use the EEM for financing Energy Star appliances without the HERS. Overall, the program, to my mind, needs some work. I think one solution is that if you are a seller of a home in need of energy improvements, it might be worthwhile to have a HERS inspection done prior to listing the home. Just a suggestion but it might make your home more attractive.

If you are interested in an FHA loan, call me today and let’s get together to discuss your options. I am always willing to spend time with people to make sure they are getting the right thing for them. You can reach me at 541-342-7576/541-221-3455 cell or by e-mail. Don’t wait, rates are excellent, prices are down, and negotiations are going in the benefit of the buyers.

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Posted To: MBS Commentary

With absolutely no exaggeration, all but one, maybe two of the times I've looked at my screens before writing this week MBS have been between -2 and +2 ticks on the day while changes in tsy's have been more pronounced. Same story today, at least on a price level, as 4.5's are up 2 ticks to 101-23 whereas 10's are down 6 ticks, bringing the yield up to 3.362. Neither of those levels are especially interesting as they both lie above levels that have supported 99% of the trade this week. For MBS, the level is obviously 101-21, which has received more than its fair share of mention this week, and likely needs no further introduction. And though we haven't seen much of it this week, the 3.38 lvl in tsys is equally significant. It just draws more of it's credibility from weeks…(read more)

Announcing Two New Assistance Programs for

Grand Prairie and Rockwall Counties

City of Grand Prairie

 The Foreclosed Home Purchase Assistance Grant Program (FHPAG) assists qualified low, moderate and middle-income families to purchase foreclosed homes in Grand Prairie. The Program is administered through the city of Grand Prairie Housing and Neighborhood Services Department.

The FHPAG program provides up to a $20,000 forgivable second lien to assist qualified buyers with approved closing costs, down payment assistance up to 50% and approved rehabilitation work after closing process is complete.

http://www.gptx.org/index.aspx?page=942

City of Rockwall

This is a true grant/gift program.  No second lien is created for the down payment assistance.  The only criteria for qualification is that the Borrower must be a resident of Rockwall.

First come first served, based on availability of funds.

http://www.rockwallhdc.com/services.asp#contact

Hopefully you and your perspective clients will find this information useful.  Let’s use all these resources to get our shoppers into new home and allow them to take advantage of the new and improved Home Buying Tax Credit.  Please call or email me today to let me know how I can help.  Best wishes!!

Leesa Sandoval

National Loan Consultant

972-407-7922 or 214-202-0491

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Posted To: MBS Commentary

Much of our analysis this week has focused on the technical dynamics of range limits and the interconnected relationship between the market's perception of fundamentals and trader's ongoing short term profit churning positional tactics. While some of the explanatory logic we have provided was mere exploratory reasoning based on the speculative maneuvering and strategery (been waiting to use that one) of performance driven traders, we have continued to rely upon the same concepts and indicators that have driven price action for the majority of 2009: the Federal Reserve's consistent presence in the agency MBS market and the bond market's ongoing independence and outperformance. An unwavering reliance on these themes has served as a stable foundation with which we build our directional…(read more)

Posted To: Mortgage Rate Watch

While benchmark interest rates continue to chop around in a contained range, mortgage-backed securities have moved sideways, failing to make much progress in either direction. Although we have experience a few moments of added volatility, tight trading ranges have kept and generally "topped out" MBS prices have kept mortgage rates stable all week, near six month lows. There are no scheduled data releases today. Reports from fellow mortgage professionals indicate mortgage rates to be unchanged from yesterday. The par 30 year conventional rate mortgage continues to hold in the 4.625% to 4.875% range for well qualified consumers. To secure a par interest rate you must have a FICO credit score of 740 or higher, a loan to value at 80% or less and pay all closing costs including an estimated…(read more)

Posted To: Pipeline Press

One top ex-secondary guy wrote to me and said, "Things I sort of miss hearing in mortgage banking: "What are rates gonna do tomorrow?" "Why is IndyMac a point better than we are?" Anything associated with "Did you hear what they said on CNBC this morning…….?" "How come I'm losing money on the hedge?" And "See that rep over there? We ended up naked in a hot tub at a conference back in '94." I tell you, sometimes this commentary writes itself. Right now, companies all over the US are talking about next Friday: Black Friday! Either companies are closed, and the employees have the day off to go spur the economy, or companies are open. Those that are open may have low seniority people at the desks, or people who don't care about…(read more)