Teri R. Maco MBA, RSA, CNSA

FHA Announces Short Refi Program

Teri — Mon, 09 Aug 2010 11:20:45 +0000

In an effort to help responsible homeowners who owe more on their mortgage than the value of their property, the U.S. Department of Housing and Urban Development today provided details on the adjustment to its refinance program which was announced earlier this year that will enable lenders to provide additional refinancing options to homeowners who owe more than their home is worth. Starting September 7, 2010, the Federal Housing Administration (FHA) will offer certain ‘underwater’ non-FHA borrowers who are current on their existing mortgage and whose lenders agree to write off at least ten percent of the unpaid principal balance of the first mortgage, the opportunity to qualify for a new FHA-insured mortgage. For more details go to Real Estate Rama

Mortgage Rates at 2009 Lows

Teri — Fri, 25 Jun 2010 09:54:13 +0000

From Mortgage News Daily

2010 has been the year of “near record low” mortgage rates. Regular readers are probably used to hearing us say:

* “We’re bouncing along just above record lows”
* “Lenders won’t go any lower”
* “The rewards of floating don’t outweigh the risks of floating”
* “It would take a serious economic downturn for mortgage rates to go lower”

Well. MBS prices are at all-time highs (AGAIN) and I think we can officially say mortgage rates are priced at their best levels ever. If not, we’re pretty darn close!

Major lenders were actually buying 4.25% note rates today! As far as I remember, that was the lowest rate I saw on a rate sheet last year (that didn’t cost 3 points). There were some days last year when 4.125% loans were traded, but seldom few. Those loan rates would’ve been quoted last March and early August.

For the most part I think it’s safe to say this is just about as good as it’s ever been…

Don’t get me wrong. I’m not talking “no closing cost” deals here. To close at these rates a consumer would have to pay more than one discount point, plus an origination fee. But the option is there if the borrower plans to live in their house forever and can afford to pony up the extra $$$ at closing. In reality, while record low rates are on the table, the best borrowers are finding their sweet spot around 4.625% while below average borrowers are priced around 4.875%.
What’s funny is this all happened after the Federal Reserve stopped buying mortgage-backed securities. THIS POST EXPLAINS WHY

What drove mortgage rates this low?

After all the “European Union/Greece/Spain/Portugal/China/North Korea/Iranian/Germany” drama we’ve gone through over the last 3-4 months, global markets have finally turned a skeptical eye on the U.S. ECONOMY. And at the moment, attention is firmly focused on U.S. HOUSING

Here is quick recap of recent housing data…

1. The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending June 18, 2010. IT WAS DISAPPOINTING. Mortgage loan application volume, decreased 5.9 percent on a seasonally adjusted basis from one week earlier. The Refinance Index decreased 7.3 percent from the previous week. Refinances now make up 74.8 percent of new apps. The seasonally adjusted Purchase Index decreased 1.2 percent and is at 13-year low. READ MORE. SEE CHARTS
2. The FHFA Purchase Only Home Price Index rose 0.8 percent in April. READ MORE
3. Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, declined 2.2 percent to an annualized rate of 5.66 million units in May. WORSE THAN EXPECTED First-time buyers purchased 46 percent of those homes, down from 49 percent in April. But home prices are up 2.7 percent from last year! READ MORE. SEE CHARTS
4. Sales of new single-family houses in May 2010 fell 32.7 percent to an annual rate of 300,000. MUCH WORSE THAN EXPECTED! And…April, which was supposed to see tax credit expiration rush, was revised lower, from 504,000 to 446,000. READ MORE. SEE CHARTS
5. The OCC/OTS says mortgage payment delinquencies are on the decline but foreclosures are on the rise. Yikes Shadow Inventory. Borrowers who’ve already had their loan modified are re-defaulting ! READ MORE

We are going to hear more and more about a “double dip” in housing. Wait what? When did housing start recovering enough to warrant the classification of a double dip? We’ve seen some stabilization but the business feels the same now as it has over the past 10 months. Slow!

The fact is, purchase business was seasonal (around expirations) at best and borrowers looking to refinance over the last 10 months have been in no huge hurry to close. Mortgage operations haven’t been overwhelmed by an onslaught of borrowers as much as they’ve been delayed by long lists of underwriting approval stipulations that send originators on wild goose chases. Yes business is slow right now, but business has been slow for quite some time!

How much worse can it really get at this point?

The only way mortgage rates move any lower is if global investors really start to believe that an economic double dip is imminent. Unfortunately, at that point, low mortgage rates wouldn’t mean a darn thing! So I guess I am saying I wouldn’t mind seeing mortgage rates increase a few basis points. Anything to avoid seeing the housing market go under a global microscope. Then everyone will know how slow the market has really been over the past 10 months!

Keep your head up everyone. We’ve seen worse days…

Homebuyer Tax Credit- Time is running out!

Teri — Wed, 17 Feb 2010 23:45:17 +0000

Highlights

To collect either tax credit, homes must be under contract by April 30.
“The first thing they need to do is make sure they can get a mortgage.”
Insurance premiums on FHA loans increase after April 2.

There are two homebuyer federal income tax credits: the first-time homebuyer tax credit of up to $8,000, and the move-up homebuyer tax credit of up to $6,500. Both come with deadlines.

To collect either tax credit, buyers have to have homes under contract by April 30. That means that both buyer and seller must have signed the purchase contract by that date. After that, there’s another deadline: The transaction has to close by June 30.

Below is a timeline for homebuyers who want to complete the transaction on time to collect the federal income tax credit. The following dates aren’t ironclad; the real estate agent, lender and title company will know if you need to deviate from this timeline because of your situation or location. Use this timeline as a general guide and as motivation to take action quickly.

Above all, let everyone — from the lender to the seller to the inspector — know about your deadlines

Compliments:

Chad E. Bahnsen

Tax Credit Extension – Not Just for First Time Homebuyers!

Teri — Sat, 23 Jan 2010 00:00:34 +0000

Since the home buyers’ credit began, 1.4 million home buyers have taken advantage of it to earn up to $8,000 when buying a home! This success has caused the government to extend the credit until April 30, 2010.

What does it all mean?The new guidelines will be extended to:

Home owners that have owned their current home for at least 5 years are now eligible for the credit up to $6,500.
Further, first-time home buyers remain eligible for up to $8,000 or 10% of the cost
of the home.
First-time home buyers…

The extension of the credit is available for homes that are under agreement by April 30, 2010 and completely purchased/settled by June 30, 2010. The new regulations for this credit have a higher income limit as well, set at $125,000 for individuals and $225,000 for married couples. The credit will remain at 10% of the cost, with a maximum of $8,000. To receive these benefits, you — and if you’re married, your spouse — must be first-time home buyers, meaning that you have not owned a home in the previous 3 years. Further, unlike the tax credit of 2007/2008, this does not need to be paid back!

Repeat home buyers…
Current home owners that are looking to purchase a new home are eligible for the credit as well! To qualify as a repeat home buyer, you must have owned and lived in your current residence for 5 consecutive years. Now these home buyers can receive a credit for up to $6,500 or 10% of the cost of the home. The new home does not have to be more or less expensive than your current home. The same income limits apply as for first time home buyers.

The fine print..The fine print.. For both credits,

The homes purchased must be less than $800,000.
The credit is refundable, meaning it will be issued as a check to you if your tax liability is less than the refund.
The new extension cannot be applied retroactively; for example, it cannot be used if a home was purchased before November 6, 2009 and the owners did not receive the credit because of the old income limits.

Foreclosure Buster! HAMP Program!

Teri — Sat, 24 Oct 2009 12:22:32 +0000

Foreclosure is a HUGE problem in today’s society with the economic crisis. With the hard economic times millions of people are struggling to make mortgage payments; CNN reported in a online article in January 2009 that a total 861,664 families lost their homes to foreclosures last year. Another frightening concept discussed in this article was that 1 out of every 54 households received a notice last year for foreclosure.

These numbers are FRIGHTENING! March 9th, 2009 marked the date that the future suddenly started to look bright for home owners when the details of the Home Affordable Modification Program (HAMP) were announced.

HAMP is a program that helps financially struggling homeowners avoid foreclosure by modifying loans to a level that is affordable for the borrowers now and sustainable over the long term. HAMP will apply to all mortgages originated before January 1, 2009; and is due to expire December 31st, 2012. This program will allow financially struggling people who are down to get back on their feet again. This program will also serve as what could be the turnaround in this economic crisis because of the estimated 3 to 4 million homes this program should be able to help while in effect. If your home is currently notified that it will be foreclosed you can still apply for the HAMP and temporarily stop the foreclosure process. The HAMP freezes foreclosure process because it is required that all mortgage lenders must review the application to see if you qualify.

Steps to applying:

Find out if your lender is participating in the program. Participation is mandatory for servicer’s of loans owned or guaranteed by Fannie Mae or Freddie Mac. However, participation in the program is voluntary for all other lenders. Lenders must be qualfied by December 31, 2009.
Find out if you qualify for the program. You can simply fill out a questionnaire that will tell you if you qualify or not by going to http://www.makinghomeaffordable.gov/modification_eligibility.html
Apply for HAMP
Your mortgage lender/servicer will make a modification offer, or will reject your application.

General Qualifications:

You must be the owner-occupant of a one to four unit home.
Have an unpaid principal balance that is equal to or less than: 1 Unit: $729,750 2 Units: $934,200 3 Units: $1,129,250 4 Units: $1,403,400.
Have a first lien mortgage that was originated on or before January 1, 2009.
Have a monthly mortgage payment (including taxes, insurance, and home owners association dues) greater than 31 percent of your monthly gross (pre- taxable) income.
Have a mortgage payment that is not affordable due to a financial hardship that can be documented.

How does HAMP effect interest rates? First, if accepted into the program your interest rates on the payment will be fixed for a minimum of five years. At the start of the sixth year the rate may increase no more than one percentage point per year until it reaches the market rate at the time the modification agreement is prepared. HAMP is so concerned with homebuyers making their mortgage payments that your servicer could write the interest down to as low as 2 percent, if that is what is needed to make sure you can afford your payments.

What’s next? After the application process if you are approved you go through what is known as a trial modification. A trial modification usually lasts for 3 months (or 90 days). Basically, after you agree to the terms of modification you MUST make your first three mortgage payments on time in order for you to continue using the program. If the payments are late you will no longer able to continue the program.
HAMP is a step in the right direction to helping American home-owners regain confidence in making mortgage payments during these tough economic times. More changes are coming. According to Fox Business,

Facing a rising tide of home foreclosures, the Obama Administration is pushing mortgage servicing companies to more than double the industry’s mortgage modifications by Nov. 1.

Administration officials said the Administration is considering new programs to help jobless homeowners temporarily make monthly payments until they find new employment.

“Nothing is really off the table at this point,” the official said.

The Administration also announced three new HAMP initiatives to keep up pressure on the companies to process more loan changes: First, the Treasury it will begin publicly reporting servicer-specific performance in the program, with the first report to be released Aug. 4. Second, it will work with servicers to set metrics that it hopes will better monitor the success of the program. Third, it will instruct Freddie Mac (FRE: 1.24, -0.13, -9.49%), one of the government’s mortgage-insurance companies, to take a “second look” at declined applications to make sure homeowners were not rejected by mistake.

Great news for first time homebuyers! Down payment assistance….

Teri — Thu, 16 Jul 2009 12:12:37 +0000

Under the American Recovery and Reinvestment Act of 2009, first time home-buyers can take a credit up to $8,000. The best news about this credit is that is available to use as a down payment on loans, IF the loans are insured by the Federal Housing Administration. You may have heard of the term “monetization” . So, what does that mean? On May 29, 2009, the Department of Housing and Urban Development (HUD) announced that home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate.
Further, according to the First Time Homebuyer Tax Credit Website

It means that HUD will allow buyers to apply their anticipated tax credit toward their home purchase immediately rather than waiting until they file their 2009 income taxes to receive a refund. These funds may be used for certain downpayment and closing cost expenses.

Under the guidelines announced by HUD, non-profits and FHA-approved lenders will be allowed to give home buyers short-term loans of up to $8,000.

The guidelines also allow longer term loans secured by second liens to be used by government agencies, such as state housing finance agencies, to facilitate home sales.

Housing finance agencies and other government entities may issue tax credit loans, the funds of which home buyers may use to satisfy the FHA 3.5% downpayment requirement.

In addition, approved FHA lenders will also be able to purchase a home buyer’s anticipated tax credit to pay closing costs and downpayment costs above the 3.5% downpayment that is required for FHA-insured homes.

Further details and the fine print on this credit are:

The credit is 10% of the appraised value of the home, up to $8,000.

The credit is refundable, so if your tax liability is less than the credit, you will receive a refund for the difference.

The credit also does not require a repayment, unless you sell the home within 3 years.. Those who took the credit in 2008 for 2007 purchases do have to repay their credit over 15 years.
For more information, check out the link below.

http://www.federalhousingtaxcredit.com/2009/index.html

This is an exciting opportunity for new homebuyers, to take advantage of a depressed economy and secure home ownership.

Tags: http://www.federalhousingtaxcredit.com/2009/index.html

Mortgage Rates Remain Steady While Market Awaits Directional Guidance

Teri — Sun, 24 May 2009 01:20:31 +0000

According to Victor Burek of Mortgage News Daily:

Low housing prices and low mortgage rates are not enticing new buyers to market yet. With the purchase applications index showing disappointing numbers, you would think this would be bad for stocks; however, the futures market is pointing to a positive open. Less home purchases will lead to less buying of furniture, flooring, appliances, etc… which will continue to keep retail sales numbers down. In related news, Home Depot reported a 9.7% drop in first quarter sales while Lowes posted better than expected numbers and gave an optimistic outlook. Chief executive officer for Home Depot gave a less than optimistic outlook due to the rising amount of foreclosures especially on the west coast. It is going to be difficult for our economy to grow until the housing sector starts to see some improvement and foreclosures show a steady decline.

Early reports from fellow mortgage professionals are indicating lenders rate sheets to be very similar to yesterday’s. This will keep the par 30 year conventional rate mortgage in the 4.625% to 4.875% range for the best qualified consumers.

With mortgage rates at the lowest rates in three years, now is definitely time to refinance if one has the equity to do so.

No more Countrywide…..

Teri — Wed, 29 Apr 2009 22:48:15 +0000

It’s official…Can you believe it…Countrywide is no longer….The most recognizable name in mortgage lending, will no longer operate under the name Countrywide….but under it’s parent name Bank of America. With their Clarity Commitment they are reinforcing responsible lending…again…

According to Market Watch
The Clarity Commitment is a simple one-page summary in straightforward language designed to make it easier for customers to understand terms of their loan. The summary includes information regarding interest rate, monthly payment, payment terms, and an explanation of closing costs and other loan information. Provided both at application and at closing, the Clarity Commitment document is available on most new purchase and refinance transactions, including traditional and government-backed loans.

The end of an era….and the beginning of a new one…Responsible lending….What a novel concept!

2009 First Time Homebuyer Credit- Expanded Homebuyer Credit

Teri — Tue, 03 Mar 2009 02:34:56 +0000

Just when I thought I had the 2008 First Time Homebuyer credit figured out, here comes a 2009 First Time Homebuyer credit that is better than the 2008 Credit…If you bought in December, 2008, I feel your pain! The 2009 credit is up to $8000 and never needs to be paid back…Contrast that with the 2008 credit of $7500 to be paid back over 15 years…Timing is everything! For more details on the American Recovery and Reinvestment Act of 2009, go to the IRS website . New details are emerging every day.

Are you eligible for the First -Time Homebuyer Credit of $7500?

Teri — Tue, 03 Mar 2009 02:31:25 +0000

You do not need to be a first time homebuyer to be eligible for this $7500 credit, which is actually an interest free loan from the government for 15 years (Yes, you do have to pay it back over 15 years!). The term first time homebuyer is a misnomer. Actually, according to the New York Times:

a “first-time homebuyer” is a person or couple who had no ownership interest in a principal residence in the United States during the three years ended on the purchase date of the residence for which the credit is claimed. Thus, someone who formerly owned a home, then rented for several years, could qualify. The purchase must be on or after April 9, 2008, and before July 1, 2009.

Homeowners who qualify are eligible for 10% of the purchase price of their home up to a maximum of $7500,

The credit is available to joint filers with modified adjusted gross income below $150,000; it phases out once income exceeds $170,000. For single filers, the numbers are $75,000 and $95,000.