Weekly Blog - 02/11/2010

10 business days left to close in February! Time is flying…

Fannie Mae Homepath Applicance Incentive: Fannie Mae recently announced a sales incentive to encourage the sale of their REO properties. This new incentive would apply to properties with purchase agreements signed on or after January 28, 2010, and are closed and funded on or before April 30, 2010. During the negotiation of the purchase, Fannie Mae is offering buyers an incentive of up to 3.5% of the final sales price to be used towards the purchase of new Whirlpool® appliances. This appliance incentive is considered as part of the purchase price and will not be considered a seller concession.

FHA HUD $100 program: The following HUD Owner Occupant incentives will expire as of February 12, 2010.

• FHA $100 Down Sales Incentive:
• $2,500 Owner Occupant Sales Incentive (For properties with a purchase price of $25,000 or greater)
• $500 Broker Bonus for Owner Occupant Sales (For properties with a purchase price of $25,000 or greater)

The incentives will be eligible for owner occupant sales meeting the above criteria that have a bid acceptance date on or before February 12, 2010. Any bids accepted after February 12 will not be eligible for any of these incentives.

Weekly Blog - 02/05/2010

February is going fast!

It is going to be a busy last 2 weeks of this month for closings so be sure to “status” your transactions early and often.

Our First Acquisition: It is my pleasure to announce that as of 01/01/2010, we have joined forces with 1st State Title. 1st State Title provides Title Insurance for both residential and commercial properties in the state of Michigan.

The staff has 60 + years of industry experience and just completed moving into our new space located in Wixom, Beck Rd just north of I-96. They are available to assist with all components of a Real Estate Transaction.

Please keep us in mind for any and all of these services:

• Purchase and Refinance transactions
• Closings at your home or office
• FSBO transactions
• Quit Claim Deeds
• Title Searches
• Notary

1st State Title

28317 Beck Road, Unit E-17

Wixom, MI 48393

Telephone 248-912-1080 Facsimile 248-912-1081

Weekly Blog - 01/28/2010

The month ended strong for us as we saw a “year over year” gain in January!

Some quick notes:

Fed’s Mortgage Purchase Program: As expected, the FOMC left overnight rates unchanged yesterday but importantly to mortgage folks, once analysts picked apart every word of the announcement, is that the FOMC announced that its $1.25 trillion agency mortgage-backed security purchase program will be slowing down as the end of March nears, and ending March 30th. You can expect the fixed rates to begin a slow march upward.

Increase in upfront MIP for FHA loans: Effective for all FHA loans for which the case number is assigned on or after April 5, 2010, FHA will collect an upfront MIP of 2.25%. This policy will increase premiums for purchase and refinance transactions, including FHA to FHA credit qualifying and non-credit qualifying streamlined refinance transaction.

Regulation X:We have started to “fund” our first loans following the new regulation “X” guidelines that went into place 01/012010. The investors have added an additional layer of review upfront to make sure the guidelines and disclosures are being handled properly. It is a benefit to the borrower as the Lender Fee’s can NOT change during the process and the borrower will not be “surprised” when they get to close. It is not slowing our processing and underwriting process down. Please contact me with any questions.

Weekly Blog - 01/21/2010

The activity is really picking up now. We have had out busiest week since late November!

Mortgage demand down more than 50%: The Home loan application volume was up 9.1 % on a seasonally adjusted basis for the week ending 01/15/10, but off a startling 52.3 percent compared with the same week 1 year ago.

ARM’s were the lowest on record in 2008: Fixed rate lending has dominated the mortgage market over the last year as we have seen the 50 years lows reached a few times. Last year, just 3% of purchase money conventional loans were ARM’s according to Freddie Mac.

FHA Changes on the horizon: Here are the changes that take effect this spring/summer:

• Upfront mortgage insurance premium will be raised from 1.75% to 2.25% of the loan amount.
• Today, on a $250,000 loan, you'd pay $4,375, or 1.75%, at closing. With the increase, your upfront payment would go to $5,625 -- an increase of $1,250.
• Seller "concessions" will be reduced from 6% to 3%.
• Homebuyers with credit scores below 580 now need 10% down, not 3.5%, and all buyers will pay more insurance upfront.

Please note that this is a FICO restriction FHA itself has imposed and lenders still have the 620 to 640 FICO overlays with no change in sight. FHA is cracking down on unscrupulous lenders who are responsible for the agency's growing defaults and shrinking reserves.

Weekly Blog - 01/14/2010

Week #2 of the New Year is here and the phones are ringing again. Activity is picking up. The interest rates will begin to climb, tax credit will soon expire but home prices should stabilize. Here are a few tidbits for the week:

Home Buyer Tax Credit Program: A reminder that you must be under contract by April 30, 2010 and must be closed by June 30, 2010 to qualify.

Read below for more details. Read more

Turn times: Our team here continues to help you close your loans more efficiently. Whether it is a bank owned, short sale, or high LTV refinance, our group is getting it done quickly.

Here is our average in December:

• FHA- 26-27 days from application to close
• Conventional- 28-29 days from application to close

Weekly Blog - 01/07/2010

Happy New Year! We look forward to sharing more information and success stories in 2010. Thank you for all of your continued support. A few housekeeping ideas so we can get the year off to a quick start:

• The FHA condominium spot approvals are still valid if the FHA case # is assigned by 02/01/2010. Read more
• The HVCC appraisal ordering for FHA loans has been delayed until 02/15/2010. This means the lender will facilitate the order exactly like the conventional appraisal orders are handled now. Read more
• Regulation X has started on 01/01/2010. Please take a moment to digest. This is an enormous change to the industry and requiring massive changes internally for lenders. Please be prepared for extended time frames with new loans an Save d clearing conditions on current files. Read more

Weekly Blog - 12/17/09

Real Estate sales increase in Southeast Michigan: Positive numbers are supporting non-foreclosure sales had significant year over year gains across Michigan, with gains widely believed to by stimulated by low prices and government tax credits.

• Unit sales are trending up
• Unsold inventory is trending down
• Macomb County non-foreclosure sales increased from 265 in November 2008, to 540 during the same month in 2009
• Sales increased from 51 to 913 in Oakland County
• Sales increased from 562 to 817 in Wayne County
• Sales increased from 91 to 145 in Livingston County

FMOC Statement Summary: The fed statement today implied that economic activity continues to pick up and the dismal labor market is stabilizing.  See more key points below.

• The housing sector has shown signs of improvement in recent months.
• Household spending appears to be picking up at a moderate rate and is constrained by a weak labor market, modest income growth and tight credit.
• Business are still cutting back fixed investments but at a less than expected pace.
• The committee continued to vow to keep the interest rates low to support mortgage lending, housing markets and to improve the overall condition of private credit markets.

Mortgage Lending in 2010:

• MBA(Mortgage Brokers Association) expects a 16% decrease in mortgage lending in 2010.
• MBA predicts mortgage rates to increase from a current rate of 5% to 5.625% by the end of 2010. This is attributely mostly to the fact the fed will wind down the buying of mortgage backed securities.
• MBA also believes that the “purchase” mortgage lending to be at or near the same pace seen this year.

Weekly Blog - 12/10/09

HUD ANNOUNCES NEW RESPA OUTREACH CAMPAIGN: In an effort to address industry concerns about how to implement new rules that take effect Jan.1, 2010, HUD announced earlier this month that it will host 5 FREE online presentations. All efforts focused on increasing the readiness among mortgage and real estate professionals.

HERE to listen and stay informed

FHA appraisals are required to use HVCC starting 01/01/10: How will this affect us? Simply put, it won’t.We use Michigan based lenders who in turn use Michigan based Appraisers that we have used for years.

30-Year Mortgage Rate Climbs From Record Lows: Thirty-year mortgages averaged 5.10 percent, up 0.10 percentage point from the previous week, when it hit the lowest level since Freddie Mac started tracking it in 1971.

Five Buyer Mistakes in a Short Sale:

1. Ignoring property problems
2. Skipping the home inspection
3. Ignoring legal and insurance information
4. Leaving too little time to close the deal
5. Falling hard for a bad home

Weekly Blog - 12/03/2009

FHA Pushing for Changes:The FHA is gearing up to stiffen the borrowing requirements for home buyers,  a move that could dampen the otherwise fragile housing market recovery.  These new regulations will force home buyers to dig a bit deeper in their wallets to purchase a home.  The FHA mortgage programs have become an important slice of the American Dream insuring almost 30% of home purchases more than 75% of which are to the first-time home buyers - 20% percent of mortgage financing's.  See below for some of the key changes.

• Greater down payments.
• Higher minimum credit scores to qualify.
• Lessening the amount a seller and contribute towards associated closing costs.

FHA Gives Condo Market Short Term Reprieve:The popular opinion is that these extensions are HUGE because there are so many condos out there that have really been unfinanceable and opens these properties to FHA financing, not to mention the first-time home buyers. We've noted a few key components of the temporary reprieve below.

• "Spot" FHA loan approvals of individual units in buildings that have not been FHA-approved will be allowed until Fed.1, 2010.  This was set to end on December 7th.
• The rule that only as much as 30% of a building units can be FHA-backed is increased to 50% fo the units.  This will be the case through the end of the year.
• New Construction Pre-Sales - Only 30% of a building has to be sold conventionally before a buyer can get and FHA endorsed mortgage.

Foreclosures and Credit Scores: Although credit questions are never black and white, mainly because every consumer has a unique credit profile, making it impossible to identify the credit scoring impact.  Fico released some interested data relating to the effect of a foreclosure on different types of consumers' credit scores, shedding a little light on an often disputed topic.

The company looked at two credit profiles, one average (680 Fico) and one excellent (780 Fico).

Borrower A: 680 Fico
Borrower B: 780 Fico

Although these two borrower examples have initial scores that were 100 points apart, post-foreclosure, those scores would only differ by about 50 points.  Borrower A would see their credit score fall to 575-595, while borrower B would see it slip somewhere between 620-640.  You may be thinking why borrower B would take a bigger hit for the same negative event; simply because borrower A's 680 score already conveys past risky behavior, so it's factored in.  And though the gap would narrow between the two borrowers, borrower A would fall into sub prime status (below 620), while borrower B would still have a credit score in what some call the Alt-A realm.   Either case, they both would be subject to the same rules regarding obtaining a mortgage post-foreclosure.

Weekly Blog - 11/20/2009

Time Home Buyers Claim Market Share! The latest survey released by NAR showed that 1^st Time home buyers represented the largest market share of home sales on record during the past year. First Time home buyers accounted for 47% of home sales which is up 41% as compared to last year.

Paul Bishop, NAR vice president of research made a very hopeful statement. “It’s interesting to note the last cyclical peak of first-time home buyers was during the last noteworthy economic downturn, with First-time buyers starting the chain reaction that led the nation out of recession.

• The median age of 1st time buyers was 30 with an average income of $61,600.
• The average home purchased was $156,000 which is down from $165,000 in 2008.
• The most popular mortgage program by far was a FHA loan, attracting 55% of 1st time home buyers.
• The fixed rate mortgage captured 96% of 1st timers over an adjustable rate mortgage.

Fannie:‘Recovery is here: The deepest and longest recession since the Great Depression appears to be over, Fannie Mae economists say, projecting sales of new and existing homes will jump 11 percent next year and that national home prices will stabilize, remaining essentially flat.  Fannie Mae expects national home prices will stabilize next year, with the median resale home price remaining essentially unchanged at $170,800. That's a 0.2 percent decline from 2009 and a 22 percent decline from 2007.

Weekly Blog - 11/13/2009

Fannie's DU Version 8.0 which is slated to be implemented in exactly one month, will update DU's credit risk assessment, the maximum allowable total expense (DTI ratio to 45% which aligns with their manual underwriting requirement), with flexibilities up to 50% for certain loan case files.

Market Update: Mortgage applications rose about 3% last week. Apps to refinance were up about 11%, but apps to purchase properties fell almost 12%. Are you feeling anything in this arena?

Home prices continue to be impacted by the substantial overhang of excess supply in the market.  FHFA’s purchase only index showed a 0.3 percent decline at the national level from July to August.  MBA forecasts that home prices will increase about 1 percent in 2010 after reaching a trough in 2009

The latest MBA forecast also projects that mortgage origination's will decrease from almost $2.0 trillion in 2009 to $1.5 trillion in 2010.  MBA forecasts that purchases origination's will increase from $717 billion in 2009 to $802 billion in 2010, while refinance origination's are projected to fall from $1.244 trillion to $691 billion

2010 Conforming Loan Limits: We have confirmed our 2010 conforming loan limits, as determined by the Federal Housing Finance Agency (FHFA). The maximum general conforming loan limit for one-unit properties will remain at $417,000

Weekly Blog - 11/06/2009

First Commerce Financial posted our largest number of purchase transactions in our history during the month of October…THANK YOU for your support.

Does this mean values are on the rise???

Before you come to that conclusion consider the following:

• In a recent Wall Street Journal article, FHA released a statement indicating they expect 24% of loans insured in 2007 and 20% of loans insured in 2008 to result in default. Ouch!

• Per the Mortgage Bankers Association, the number of loans that are 30 days late increased in Sept to 7.65%

Here are some key points of interests for the week.

First Time HomeBuyer Tax Credit thrives until April of next year.  This is Great News!! The house of representatives has voted to pass legislation extending this credit until April 30th of next year.  The extension of the $8000 tax credit for First Time Home Buyers also makes available a tax credit to homeowners who have lived in their current residence for at least 5 years.  The credit for these buyers is capped at $6500.

Income levels will be extended from the current limits of $75,000 for a single purchaser and $150,000 for couples to $125,000 and $225,000 respectively.  Above those limits there are diminishing credits available.

FHA Streamline Changes effective January 2010: Beginning in just 4 weeks, the FHA changes over to new guidelines for its popular FHA-to-FHA refinance program. Getting approved for a Streamline Refi will be more difficult and more expensive. There are 3 areas in which the Streamline Refinance program is toughening up.

1. FHA homeowners must now be employed at the time of application.

2. FHA homeowners must now verify income.

3. FHA homeowners must now get an appraisal in order to "roll in" closing costs to the transaction.

New RESPA Rules: HUD is requiring that loan originators provide borrowers with a standard Good Faith Estimate that clearly discloses key loan terms and closing costs and that closing agents provide borrowers with a new HUD-1 settlement statement. New RESPA regulations were published November 17, 2008 and are scheduled to take full effect on January 1, 2010

Weekly Blog - 10/29/2009

First Time Home-buyer Credit: Good news looks to be on the horizon for an extension of the tax credit.  One option shows it being extended thru the end of March, 2010 and another says through the end of June, 2010 but opening it up to all buyers.  We will keep you posted as soon as something breaks.  See below:

http://www.calculatedriskblog.com/2009/10/home-buyer-tax-credit-revision.html

October Recap: It was the 2nd busiest month of 2009 in October!  Thank you for all of your support.  With the increased activity we are still managing Turn Times (application to closing) efficiently; allowing us to turn loans in 3.5 weeks on average.  I have great people behind the scenes that help make this the best (and least painful) place to do your home loan in Michigan.

Market Forecast (Fannie Mae):

• Although we are seeing heightened activity (low rates, tax credit, lowest home values in 20 years) we have not officially moved into a “Seller’s Market”.
• The Median Home Prices are expected to see an estimated 2% decline in 2010.
• Fixed interest rates are expected to increase an estimated .250% per quarter through 2010.

Weekly Message - 10/22/2009

FHA Attached Condo Changes: Implementation of FHA's new policy guidance for condominium project approval and condo unit financing will be delayed until December 7th 2009.  The new guidance, to be issed within the next two weeks, will:

1. Offer additional lenience to address the difficult market conditions and
2. Augment some portions of FHA Mortgagee Letter 2009-19, providing additional information and clarification.

Until the new guidance takes effect on December 7th 2009 lenders may continue to use the Spot Loan Approval guidance issued in Mortgagee Letter 1996-41.  Further, the site condo and manufactured housing condo project changes that have already been implemented are not affected by this delay.  Please take a moment to read FHA Mortgagee Letter 1996-41 and 2009-19, providing additional information and clarification. Read More...

HUD Good Neighbor Next Door Program: Law enforcement officers, pre-Kindergarten through 12th grade teachers and firefighters/emergency medical technicians can contribute to community revitalization while becoming homeowners through HUD's Good Neighbor Next Door Sales Program. HUD offers a substantial incentive in the form of a discount of 50% from the list price of the home. In return you must commit to live in the property for 36 months as your sole residence. READ MORE…

The Good Neighbor Next Door program (GNND) has its own financing program as well. When participants purchase properties under the GNND program they agree to own and live in the property for a three-year period as their sole residence. Participants are required to certify every year that they are living in the property. Contact me for more details if you’re interested in hearing more.

Rates: Mortgage rates are up 0.500 percent from their early-October lows.  They'll likely tack on another 0.500 percent before the New Year.  If you're wondering whether it's the right time to lock, the answer is "yes".  You may have missed the market bottom, but today's rates are terrific compared to what we should see just 8 weeks from now.

Next Week’s Updates:The latest beat on the street is the First Time Home Buyers Credit will likely be extended, stay tuned…

Weekly Blog - 10/15/2009

Fannie Mae Homepath: This is a great opportunity for buyers! This mortgage program provides special financing on homes that Fannie Mae (foreclosed) is selling. Here are the features:

• 5% down, NO PMI, NO Appraisal on primary residence

• 10% down, NO PMI, NO Appraisal on Investment or 2^nd home

• Visit the website below to locate these homes for your buyers.

 

HUD $100 Down - This is another program that is designed for buyers who are purchasing HUD (foreclosed FHA insured) owned homes.

• $100 total down payment required; normally 3.5% required

• For homes under $50,000, the earnest money is $500

• Visit the website below to locate these homes for your buyers.

http://mcbreo.com/st_mimain.htm

We talked about this in last week’s message. October is shaping up to be the 2^nd largest volume month in 2009 which is great news! The title company slots are filling up for closings at the end of the month and the lenders are starting to be overwhelmed with conditions! Please keep the lines of communication open with all parties. Good luck!

We are still at historic lows. Now is a great time to buy or refi….