August 25, 2011-Appraisal changes coming in September!

This is a lengthy blog, but worth reading.  Beginning September 1st there is a major format change for all Fannie Mae and Freddie Mac appraisals.  These same changes will apply to FHA loans on January 1st.  Real Estate agents need to be aware that they may be receiving more calls from the appraisers to get clarification on properties.  It may also lengthen the period of time it takes for the appraiser to complete the form.

What it is?

If you have questions about this, please don't hesitate to call me at 808-241-7711 or 808-635-7283.

Sharon

June 9, 2011

Taken from the KCM Blog: As people go through the mortgage process today, I believe that they wonder if their lender has gone insane. Lenders ask for documentation repeatedly, constantly updating, asking for further clarification and explanation for everything. Income, credit, assets and appraisals are scrutinized at a level unseen in my 25+ years. It almost seems like they are trying to find reasons NOT to lend.

But, I assure you, that is not the case. The only way lenders can stay in business is to lend money. It is what funds the operation and pays for salaries, rent and paper clips. Lending is what creates the value of the company. No closings, no revenue, no company.

So why the perception of over-documentation and over analysis when we know the lenders have to make loans? This is the reality of a post-subprime world. Lenders got too liberal and under-documented files and forgot the primary role of underwriting (judging a borrower’s ABILITY and WILLINGNESS to repay the loan) as they approved files. And now, the pendulum has swung back to a very conservative stance. Common sense seems to have been replaced by a “Cover Your Butt Mentality”.

No one is immune. Appraisers error on the side of lower valuations and heightened criticism of a home’s condition.  Underwriters labor over pay stubs, tax returns, bank statements and credit information. Closing agents meticulously examine title and closing documents. Each of them has learned that their mistakes, miscalculations, or errors in judgment (no matter how minor) can result in a loss of their job, a bad loan, and/or monetary damages to their companies.

So, today I just wanted to counsel home buyers. Your lender WANTS to make your loan. However, understand that they have been burned by borrowers, burned by their bad judgment, burned by moronic industry trends of the past. Lenders are going to be a little gun shy. If you can prove that you are willing and able to repay the loan, lenders have lots of money available at incredible (once-in-a-lifetime) rates. When you think your lender is asking for too much, know it’s because they want to say “yes” AND know that their decision is both a good and defendable one.

May 16, 2011

I watched an interesting video this morning about rent vs own.  The advocate for renting was indicating it was a much better to rent, because what if one purchases a home now, and a year from now it is worth $20,000 less than when they purchased it.  She was using a monthly rental payment of $2,000.  I don't profess to be the expert in this area, but doesn't that mean that this person paid $24,000 over the course of twelve months, and they still don't own anything?  And what if the owner of the property they are living in decides to sell the property, or it goes into foreclosure? And of course there is always the argument of the tax writee off for interest paid (vulnerable to our great legislators). Using their examples, this person is still ahead by $4,000.

In the same newsreel, they showed a line of 100 people waiting to apply for two units in an apartment that was being offered at a subsidized price.  Rental prices are climbing!

In any case, it appears they would still be ahead buying a home rather than gathering a drawer full of rental receipts.  Home prices are very low and interest rates are very low.  Today's average conforming 30 year fixed price is 4.375%, and for FHA 4.25%. 

Call now to get pre-qualified, and into your own home. 

Don't have a lot of cash, but you have a steady income?  Be sure to check out the properties on the www.homepath.com website.  These are Fannie Mae foreclosures, and require as little as 3% down with no mortage insurance, no appraisal, and if it is a condo, no condo docs.

May 3, 2011

It's been awhile since I've posted here, but just had to comment on today's interest rates.  We are hearing all kinds of news about the improvements in the economy, yet there is still strong evidence that there are many more foreclosures in the near future.  It's quite a bit of mixed messages.  The one message that is very clear is that this is a great time to get into the housing market or expand on your real estate holdings.  Home prices are at the bottom, and interest rates went even lower today.  Today's average rate on a 30 year fixed Fannie Mae mortgage is 4.5%, at 1 point, and FHA is at 4.25% at 1 point.  This is not the time to hesitate.


January 7, 2011

Happy New Year!  The end of 2010 was especially busy.  Many buyers took advantage of historically low interest rates and bargains in the housing market. 

2011 begins with great opportunities for those looking to buy a home.  Interest rates continue to remain low.  The economy appears to progress in its slow rise out of the recession, with news of better employment, and the stock market is reporting positive gains.

A large number of properties that have been in bank "limbo" over the past year have finally come on the market as foreclosures.  Check with your real estate agent for these listings.  Another great resource is www.homepath.com for Fannie Mae Foreclosures or www.homesteps.com for Freddie Mac Foreclosures. 

Perhaps your New Year's Resolution is to purchase a home or refinance.  There is no time like the present...

November 4, 2010

Rates at 3.875% on a 30 Year Fixed, and it might even get better than that. 

Quoting Al Bowman from the Mortgage Market Commentary, "Tomorrow morning brings us the release of the almighty monthly Employment report. The Labor Department will post October's employment stats early tomorrow morning. The report is comprised of many statistics and readings, but the most important ones are the unemployment rate, the number of new jobs added or lost during the month and average hourly earnings. Current forecasts call for no change in the unemployment rate to keep the national unemployment rate at 9.6%, an increase in payrolls of approximately 60,000 and a 0.1% increase in average earnings. Weaker than expected readings should renew concerns about the labor market and rally bonds enough to improve mortgage rates, especially if the stock markets react poorly to the news."

If you have been waiting to lock, you may want to check with your lender tomorrow morning.  In my lifetime I didn't think the SF Giants would win the World Series, and never would have believed that interest rates on mortgage rates would be this low.

October 4, 2010

Mortgage Rate Commentary: The rest of the week brings us little data except for Friday's important Employment report. There is nothing of relevance scheduled for tomorrow, so look for the stock markets to be behind any changes to mortgage rates. If the major stock indexes rally, the bond market will likely move lower the next couple of days as funds shift from bonds into stocks. As bond prices drop, their yields move higher. And since mortgage rates tend to follow bond yields, we would prefer to see stock weakness and bond prices to move higher.

Rates opened at 4.125% today at one point, and there was a mid-day improvement, although it showed very little impact on the rates.  If you are considering a 15 Year Fixed, rates are at 3.5% at one point.  Unbelievable.  Give me a call to lock these rates up while they are low.

September 3, 2010

Mortgage Rate Commentary:  Friday's bond market as opened well in negative territory following the release of stronger than expected employment news. The stock markets are reacting favorably to the data with the Dow up 61 points and the Nasdaq up 21 points. The bond market is currently down 26/32, which will likely push this morning's mortgage rates higher by approximately .250 of a discount point.

Even though bonds are in negative territory, we continue to see a strong refinance market here on Kauai.  Sales have also picked up.  It's really something to think that with a negative day on mortgage rates, we are still at 4.25% on a 30 year fixed.

Wishing everybody a relaxing Labor Day Weekend.  Aloha.

August 17, 2010

Mortgage Rate Commentary posted this on their website today.  Overall, the recommendation is to lock if you plan on closing a mortgage within the next 60 days. "Tuesday's bond market has opened in negative territory after the two more important economic reports of the morning revealed stronger than expected results. The stock markets are reacting favorably to the news with the Dow up 54 points and the Nasdaq up 20 points. The bond market is currently down 13/32, which will likely push this morning's mortgage rates higher by approximately .125 of a discount point."

 


August 3, 2010

It is rather telling that my blog has not been updated for a couple of weeks.  With rates being so low, and so much inventory on the market, we have the perfect storm.  If you didn't get a chance to read my article in the Garden Island on Friday, here is an excerpt: 

So, with interest rates still low, prices down, more buyers coming in from abroad, the scarcity of property in Hawaii and the government doing everything in its power to prop up the faltering mortgage industry, we are experiencing the likes of a perfect storm for the savvy investor who is ready to enter the Hawaii real estate market.   It may not be the thrilling roller coaster ride we have seen in the past, but it is going to be a much safer ride this time around. 

Happy shopping.....


July 16, 2010

This week ends with even better interest rates.  If you were thinking of refinancing, don't wait any longer.  With 30 Year fixed mortgages at 4.25% it's a great time to get a mortgage.  In Kauai, we continue to see an upswing in purchases.  Many of the properties that are being offered for short sales and foreclosures are getting multiple offers, and many of the appraisals coming in are checking the box for "stable" market.  (up until recently it had been the declining market box).  These all appear to be very positive for the Kauai Real Estate market.

From the Mortgage News Daily on what to expect next week:

Next week is light in terms of economic releases, especially if comparing to this week. We have a couple of housing related reports and a future economic growth prediction index as the only relevant monthly reports. The big news will likely be Fed Chairman Bernanke's semi-annual testimony to congress about the state of the economy and monetary policy in the middle of the week. There is no relevant news or data scheduled for Monday, but look for details on next week's events in Sunday's weekly previewJuly 2, 2010

Most continue to recommend "floating" unless you need to lock to close your transaction.

Fourth of July weekend ahead, which means we are already half way through the year.  Due to the many foreclosures and short sales, along with fabulous interest rates, the mortgage industry continues to see a fairly strong market.  Guidelines for obtaining a mortgage continue to become increasingly stringent.  Don't be discouraged as these guidelines are just helping people to not step into a poor financial situation.

From the Mortgage News Daily on what to expect next week:

"Next week is very light in terms of relevant economic reports scheduled for release. There are no important Treasury auctions or other events scheduled that are likely to affect mortgage rates. The financial and mortgage markets will be closed Monday in observance of the Independence Day holiday and will reopen Tuesday morning. There is no early close for stocks or bonds today, but I suspect this afternoon's trading will be light as traders head home for the long weekend. Look for more details on next week's events in Sunday's weekly preview."

They are still recommending "float", so maybe rates will continue to slide south.  That will keep the market moving.  Until next time......


June 18, 2010

Good Morning.   It's a beautiful Friday morning here in downtown Lihue.  Rain all night, so everything is very fresh. And the forecast is for sunshine all day.

The outlook for mortgage interest rates is quite favorable as well.  Rates have been holding steady in the high "4"s for conventional conforming loans for the past three weeks.  It's a great time to refinance or purchase a home, taking advantage of these low rates.

From today's Mortgage News Daily:

Next week is not too busy in terms of economic reports being released. There are a handful of relevant reports scheduled for release in addition to another FOMC meeting and a couple of Treasury auctions that may influence bond trading and therefore mortgage rates.

None of the relevant data is going to be released Monday. The week's first report comes late Tuesday morning, so the stock markets are likely influence bond trading and mortgage rates Monday. Look for more details on next week's events in Sunday's weekly preview.

June 15, 2010

Today's excerpt from Mortgage News Daily:

Tomorrow there are three relevant reports scheduled for release.

The first is May's Housing Starts that tracks starts of new home projects. It is the week's least important report and likely will not affect mortgage rates unless its results vary greatly from the 2.5% decline in starts that are expected.

The second is one of the two highly important reports of the week. May's Producer Price Index (PPI) will also be posted early tomorrow morning. It helps us measure inflationary pressures at the producer level of the economy.

The third and final piece of data scheduled for tomorrow is May's Industrial Production.

With these three reports being posted tomorrow, there is a pretty good possibility of seeing changes to mortgage rates. The stock markets will also influence trading and mortgage rates, but I am expecting tomorrow's data to have more of an impact on rates than many recent reports have.

So if you are in the process of financing/refinancing a home, and you will be closing within the next 20 days, you may want to lock your interest rate.


June 8, 2010

Here is the latest comment from Mortgage News Daily:

"Tomorrow afternoon brings us the release of the Fed's Beige Book. This data details economic conditions throughout the U.S. by region. It is relied upon heavily by the Federal Reserve to determine monetary policy during their FOMC meetings. If it shows much stronger economic activity than its last release, we could see mortgage rates rise tomorrow after the 2:00 PM ET release. Particularly so if it indicates inflation is growing.

We also have to watch for the results of tomorrow's 10-year Treasury Note auction. Results the sale will be posted at 1:00 PM ET. If investor demand was high for the Notes, we may see bonds rally during afternoon trading, however, weak demand could lead to selling and an increase to mortgage rates."

Rates have been holding steady below 5% on conforming 30 year fixed.  We are hoping this trend continues throughout the summer, as there has been an increase in purchase demand.


June 4, 2010

The Labor Department gave us today's data. They posted May's employment numbers early this morning, announcing an unemployment rate of 9.7% and that 431,000 new jobs were added to the economy last month. The 9.7% was slightly lower than the 9.8% that was expected and can be considered negative for bonds, but the decline is being attributed more to people giving up on the effort to find another job than it is of fewer laid-off workers. This allows the payroll number to take center stage this morning. This appears to be good news for the mortgage market as Friday's bond market has opened well in positive territory after this morning's Employment report revealed a surprise that was favorable to bonds.

Mortgage rates moved down by about an .125 of a percentage point this morning.

June 3, 2010

Mortgage interest rates continue with the historically low trend.  Today's conforming rate for a 30 year fixed is at 4.75%. It's a great time to refinance or purchase a home. 

Looking at the economic news for this week, tomorrow's sole report is arguably the single most important report that we see each month. The Labor Department will post May's Employment data early tomorrow morning. This report gives us key employment readings such as the U.S. unemployment rate and the number of jobs added or lost during the month. Analysts are expecting to see the unemployment rate slip from 9.9% in April to 9.8% this month with approximately 500,000 jobs added to the economy during the month. A higher than expected unemployment rate and fewer than 500,000 new payrolls would be great news for the bond market. It would probably create a sizable rally in bonds, leading to lower mortgage rates. However, stronger than expected numbers may lead to a spike in mortgage rates tomorrow morning.

We are finally on our way in Hawaii to comply with the S.A.F.E. Act, as Act 84 is now the codified name of our 2010 mortgage originator licensing law, since Governor Lingle signed it on May 7. The new law makes amendments to the application, licensing, and regulatory requirements of the Secure and Fair Mortgage Licensing Act.

This is great news for borrowers and loan officers alike.  Across the United States, the standards for becoming a mortgage originator (code name for loan officer) have become stricter.  By January 1, 2011, any loan officer working for a broker in the State of Hawaii will be held to these new standards. 

The components of the new licensing regulations:  20 hours of pre-licensing education, thereafter, 8 hours of continuing education annually; Pass a National and State Test, Background check and Credit check.

So why is this great news for borrowers?  It means that along with your loan officer having access to numerous banks and other lenders that provides the consumer with access to hundreds of options when it comes to financing a home, they will also be working with a loan officer that is held to a higher level of standards.

Loan offficers that work under a mortgage broker can provide consumers the most efficient and cost-effective method of obtaining a mortgage that fits the consumer's financial goals and circumstances.

Moving on to another subject, 95% loans are back.  For those that fit the product guideline, 5% down on conventional financing is available.  The most important restrictions are that the borrower must have a 700 FICO score or higher and their debt-to-income ratio cannot be above 45%. 

For all of your residential financing needs, give me a call at 808-635-7283.